Good afternoon, ladies and gentlemen. Thank you for waiting, and welcome to Wisconsin Energy’s Conference Call to review 2011 year-end results. This conference call is being recorded for rebroadcast, and all participants are in a listen-only mode at this time. Before the conference call begins, I will read the forward-looking language. All statements in this presentation, other than historical facts, are forward-looking statements that involve risks and uncertainties, which are subject to change at any time. Such statements are based on management’s expectations at the time they are made. In addition to the assumptions and other factors referred to in connection with the statements, factors described in the company’s latest Form 10-K and subsequent reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those contemplated. During the discussions, referenced earnings per share will be based on diluted earnings per share, unless otherwise noted. After the presentation, the conference will be opened to analysts for questions and answers. In conjunction with this call, Wisconsin Energy has posted on its website a package of detailed financial information at www.wisconsinenergy.com. A replay of our remarks will be available approximately two hours after the conclusion of this call. And now, it’s my pleasure to introduce Mr. Gale Klappa, Chairman of the Board, President and Chief Executive Officer of Wisconsin Energy Corporation.

Colleen, thank you. Good afternoon, everyone. Happy Groundhog Day. I can tell you that the tundra is not frozen. But we appreciate you joining us for our review today of the company’s 2011 yearend results. Let me begin, as always, by introducing the members of the Wisconsin Energy management team, who are here with me today. We have Allen Leverett, President and CEO of We Generation; Rick Kuester, our Chief Financial Officer; Pat Keyes, is serving as our Treasurer; Steve Dickson, Controller; and of course, Jim Fleming, our General Counsel. On a personal note, this is the last time that Jim will be officially sitting in on our conference calls. After a long and productive career, Jim has decided to retire. He’s done a truly outstanding job as our General Counsel over the past six years and we’ll miss him but we understand that his lake house and his classic Corvette are calling. Jim, our entire team wishes you and Kay in Godspeed as you open a new chapter of your life.

Thank you, Gale.

You’re welcome. Thank you, Jim. Now, Rick will review our financial results in detail in just a moment. But as you saw from our news released this morning, we reported earnings from continuing operations of $2.18 a share for the 2011. This compares with earnings of $1.92 a share for 2010. A number of factors contributed to our strong performance in 2011 including earnings from our Power the Future assets. As you recall, our second expansion unit at Oak Creek began commercial service in January of 2011. We also recorded equity AFUDC related to the Air Quality Control upgrade at our older Oak Creek units and the Glacier Hills Wind Park. Overall, we’re very pleased with our financial and operational performance in 2011. We exceeded our customer satisfaction goals. We achieved the best safety record in the history of the company and we were named the most reliable utility in the Midwest for the seventh time in the past 10 years. Turning now to the economy of Wisconsin’s area, Wisconsin’s unemployment rate at 7.1% remains well below the national average. And after nearly a double-digit rebound in 2010, electric sales to our large commercial and industrial customers rose by three-tenths of a percent in 2011. The demand destruction that we saw from five large plant closings during recession is now being largely offset by modest growth and recovery in other sectors of the region’s economy. For example, we continue to see strength in specialty steel and metal fabrication, paper and printing and industrial machine rate. Now I’d like to update you on three of our significant construction projects, the 50-megawatt biomass plant in Northern Wisconsin, the Glacier Hills Wind project, northeast of Madison and the air quality control upgrade of the original Oak Creek units. We’re making and I’m pleased…

Okay. Thanks, Gale. As Gale mentioned earlier, in our 2011 full year earnings – in 2011, our full year earnings from continued operations were $2.18 a share. I will focus on operating income by segment for the year and then touch on other income statement items. I will also discuss full year cash flows and cover our earning guidance for 2012. Our consolidated operating income for 2011 was $887 million as compared to $810 million for 2010, an increase of $77 million. Operating income in our utility energy segment totaled $545 million, which is down $19 million from 2010. Looking at our Utility segment, our electric margins were helped by approximately $14 million because of pricing increases at the wholesale level and also in our Michigan jurisdiction, primarily to recover costs associated with our Power the Future plans. In addition, we saw growth in our electric sales, which added approximately $10 million of operating income. When we look at weather, we estimate that our operating income was reduced by $13 million as compared to the prior year. During 2011, we experienced normal winter weather, which helped our gas business as compared to 2010. On the electric side, we experienced a hotter than normal summer but 2010 was even warmer. So we actually saw a reduction in our earning due to weather compared to 2010. We also saw increased non-fuel operating and maintenance cost totaling $26 million as we released dollars in our generation business for a terminal overhaul in our distribution business for forestry work and higher Power the Future costs related to our wholesale and Michigan customers. These factors combined with $4 million of other net items resulted in the $19 million decline in utility operating income. Our operating income in the Non-Utility Energy segment, which includes We Power,…

Rick, thank you very much. Overall, we’re on track and focused on delivering value for our customers and our stockholders.

And now we’d like to take your questions. (Operator Instructions) Greg Gordon with ISI Group. Please state your question.

Hi, Greg, how are you today? Greg Gordon – ISI Group: Hi, good morning, Gale, it’s actually Bill, how are you guys doing?

Oh, Bill, hi. We’re good, how about you? What you do with Greg? Greg Gordon – ISI Group: I think he stepped off for a second. Actually – so we had a question about your comments on the dividend.

Sure. Greg Gordon – ISI Group: And, so I guess, you said you’re pulling for your targeted payout ratio for 60% by 2014 now?

Yeah, that’s correct. Greg Gordon – ISI Group: Right, and so, and you’re saying that that would imply – Greg Gordon – ISI Group: Hey, Gale, I’m back.

There you go. Greg Gordon – ISI Group: Yes, so the question is you’ve said that you were targeting a 60% payout ratio by 2014 and that that implied double-digit growth – percentage growth in the dividend between now and then. Is that an accurate regurgitation of your comment?

You done regurgitate well. Greg Gordon – ISI Group: Okay, so we can infer from that, that there’s sort of a minimum level of expected earnings growth over the course of the next two years. If we just do the algebra and what that means in terms of your earnings power?

We thought, you might like to do your own math, but you are correct. Greg Gordon – ISI Group: Okay. Thank you, Gale.

You’re welcome, and Bill, thank you.

Jim Von Riesman with UBS. Please state your question. Jim Von Riesman – USB: Hi, Gale, good afternoon.

Good afternoon, Jim, how are you doing today? Jim Von Riesman – USB: I’m doing well. Thanks. Couple of question if you don’t mind, the first one is can you just talk about what’s happening in the state politically with this governor Walker recall efforts and if there’s any update in status on the generation buy from the state?

Sure, I’ll be happy too Jim. By the way were you out there with Ponsitony Phil this morning? Jim Von Riesman – USB: No.

Well the state political situation. It does certainly appear that we are headed for a recall election. Right now the Government Accountability Board of the state is parsing through approximately 1 million signatures to determine how many of those signatures are valid signatures petitioning a recall. That is going to take some time. And in fact the Government Accountability Board has asked for more time and the court has provided them more time. So the best guess estimate now is that we would have a recall election sometime between April and June of this year. In the meantime as you can about imagine the airwaves are full of political commercials on both sides. We don’t expect any significant legislation and certainly nothing affecting energy policy to be dealt with or debated over the course of the next few months. And if indeed there is going to be a piece of legislation that would authorize the sale of some of the state-owned power plants that would not occur certainly until the fall. Jim Von Riesman – USB: Okay. Just a quick order or reference here what’s the threshold for either he stays or he goes in terms of the vote count? Simple majority?

Oh no. It’s simple, but yeah, 50% plus one vote. Jim Von Riesman – USB: Okay. Second question is I guess this is more for Rick. If I heard you correctly you said $3.2 million share buyback roughly at $31 a share or just under that. Is that right?

$30.79. Jim Von Riesman – USB: Okay. So that’s a $100 million. But the cash flow statement that you released today says you had a decreased in repurchased stock of about $140 million. What’s that $40 million delta?

I’ll let Steve Dickson, our controller, go through that, Jim.

Yeah. Thanks, Jim. That item is consistent with item that we’ve had in past years. When stock options are exercised, we take the proceeds of the stock options and then go to the open market and buy back stock. So the delta between $100 million and $140 million is cash that we used to buy back our own shares to satisfy stock options and other stock awards. Jim Von Riesman – USB: Okay, just double checking. And then last question is in pension. Well, are you prepared to talk about your revised discount rate assumptions or your plan asset recurrence at this point in time?

Well, we’ve certainly made then public. Let me state first that we made, as Rick mentioned, the $277 million contribution to our benefit plans during 2011. And when you look at our funding position against our liabilities, we are very, very well-positioned. We’re also quite conservative in terms of our – at least in terms of our industry, in terms of future asset growth. Steve, do you want to give a shot?

Also, I think we have a conservative asset mix.

Yes.

Overall, we’ve got a very conservative program. Steve, go through the details.

Yeah. We worked with our actuaries to get the year-end discount rate and it’s just 5.05, so that’s what we have the liabilities valued at. As Gale said, our expected return on assets remains the same at 7.25% and then the actual returns were about 2.5% in 2011. Jim Von Riesman – USB: Okay. I’ll follow-up with you on some other questions after the call.

Okay. Jim, thank you for your call. We appreciate it. Jim Von Riesman – USB: Thank you.

Michael Lapides with Goldman Sachs. Please state your question.

Rock and roll, Michael. How are you? Michael Lapides – Goldman Sachs: I’m okay, Gale. You?

Yeah. We’re fine. We’re doing well. Michael Lapides – Goldman Sachs: Couple of questions. First of all, can you walk us through going forward, so let’s say what’s embedded in your 2012 guidance for cash flow – for basically deferred tax-related cash flows whether it’s from Oak Creek, whether it’s from PTCs, but those that accrued kind of back to the holding company or the shareholder and don’t necessarily go to a reduction in rate base. I’m probably more thinking about the PTF units than I am about kind of the bonus (inaudible) the utility record (inaudible). But if there’s a way to just quantify how much cash gets upstreamed that is related to deferred taxation?

We’re all thinking about how to make that calculation quickly for you. Michael Lapides – Goldman Sachs: We can – if that’s a pain, we can follow up offline. My other one is CapEx. You’re – it seems a little unusual that your CapEx going up but it’s not – meaning from earlier 2011 guidance ranges.

That is correct. Michael Lapides – Goldman Sachs: But your load growth is pretty like a lot of part to the Midwest relatively versus history.

Correct. Michael Lapides – Goldman Sachs: That strikes me as an unusual dichotomy. And could you through some of the drivers of that?

Sure. I think it’s very – it’s a good question but a very straightforward answer. The additional CapEx spending, and let’s kind of reset that, our 2011 through 2015 plan called for about $3.4 billion of capital spending. Our 2012 through 2016 plan is about $100 million increase at $3.5 billion. The difference between the two rolling five-year plans, Michael, is really replacement of aging infrastructure. I mean we have, as I mentioned in the past, we have aging underground lines, we have aging power poles, we have aging (inaudible) transformers. So we have got – we really need to maintain the reliability that our customers have come to rely on and deserve. We need to spend more capital on replacement of aging electric and gas distribution infrastructure. That’s the big difference. Michael Lapides – Goldman Sachs: Okay. And how are you guys thinking about O&M next year relative to – meaning in 2012, I guess that’s this year, relative to 2011 levels?

Two answers to that because the second answer is very important to make sure you can follow our financials as we go through the year. First answer is that on an operating basis, we’re projecting our O&M to be basically flat. However, you will see a reduction when we report earnings in the first quarter and subsequent quarters. You’ll actually see a reduction in O&M because of the amortization holiday in the rate case. Michael Lapides – Goldman Sachs: And can you quantify that?

$148 million. Michael Lapides – Goldman Sachs: Got it. Okay. It’s the full amount. Okay. So we should look, think about $148 million year-over-year reduction in O&M? No. No, actually, that’s not true. That’s right. I got it. I’ll follow up. Colleen and I touched on it this morning.

All right.

Paul Patterson with Glenrock Associates, please proceed with your question.

Good afternoon, Paul. How are you doing? Paul Patterson – Glenrock Associates: Hey, how are you doing?

Pretty good. Paul Patterson – Glenrock Associates: A couple of questions has been asked and answered, but just wanted to touch basically on the rate base growth and just a question that Michael asked about the weak anemic growth. I mean, how do you guys see customer rates? I know you guys are focused on keeping them as controlled as possible. Going forward, with this CapEx build-out and with this anemic growth kind of a concern that you have to sort of do this CapEx adjustment and there doesn’t seem to be that much growth.

Paul, one more time. I’m not sure I actually follow – Paul Patterson – Glenrock Associates: Okay. You guys have a considerable amount of CapEx that you’re going to have to – I mean, in terms of replacing the aging infrastructure.

That is correct. Paul Patterson – Glenrock Associates: And it sounds like sales growth is in all that robust.

That is correct. Paul Patterson – Glenrock Associates: And so, I’m wondering – I know that you guys are very proactive in keeping weights as manageable as possible –

Right. Paul Patterson – Glenrock Associates: – but at just how should we think about the rate trajectory fuel excluded going forward?

Well it’s a good question and I appreciate the clarification. First of all, for 20 rates that would going to affect in 2013, if you recall we basically have deferred a rate case for a year and I mentioned our customers will see no increase either in fuel costs or in base electric rates during 2012. But that deferral for a year means that we have put off a rate increase request that is largely driven by capital we’ve already spent on important projects that either our coming into the service now or already in service. We have three major projects that will be the drivers of our 2012 rate request for 2013 and that’s the quality control, the $900 million that we’re spending on the air quality control upgrade of the older Oak Creek units, the Glacier Hills Wind Park and then the ongoing construction costs at the Rothschild Biomass Plant that would come into service in late 2013. So, those three factors, those major construction projects all approved by the Commission will be big drivers for our 2012 rate filing for 2013 rates. And that will be obviously a sizeable rate increase with the filing that we’ll make this spring. Beyond that, I would think we would be looking at 3% to 4%, 3% to 5% something in that range. But we would hope 3% or 4% base rate increase is absent fuel going forward once we get this rate increase behind us. Paul Patterson – Glenrock Associates: Okay. And just the magnitude of the rate increase that we’re looking at for 2013 potentially or is it too early to say considering that you haven’t – too early to process to –

No. We’re finalizing the details of that case now and it would probably be in the neighborhood of 6%to 7%. Paul Patterson – Glenrock Associates: Okay.

And we said it’s going to be in the same neighborhood as the -what we’ve thought for last year was in that –

Right.

– 6% to 7%.

I think last year, our filing was 6.6%. Paul Patterson – Glenrock Associates: Right.

But okay, if we had a traditional case, it would be that amount. But we will put this off for a year. Paul Patterson – Glenrock Associates: I got you. And then also you mentioned self-generation and if you could just maybe just elaborate a little bit more on the customers and if that’s a unique situation or what sort of driving that?

I don’t see it being a widespread situation at all. One is a – one of the organizations that is moving a bit towards self-generation is a sewage – Metropolitan Sewerage District and the other is a paper mill.

One using landfill gas which is –

Right.

– there’s limited availability on that and the other paper mill is just a biomass project. So I think they’re fairly unique as Gale says. Paul Patterson – Glenrock Associates: Okay. Okay, great. Thanks a lot.

Good questions, Paul. Thank you.

Paul Ridzon with KeyBanc, you may proceed with your question.

Hi, Paul. How are you? Paul Ridzon – KeyBanc: Good afternoon.

How are you doing? Paul Ridzon – KeyBanc: I’m well, thank you.

Good. Paul Ridzon – KeyBanc: A question, a follow-up on Jim Von Riesman’s question about the discrepancy on the buyback versus $140 million on the cash flow statement. So you get this $40 million in and then you spend it on buybacks. Where does it show up coming in on the cash flow statement?

I’m not sure you’re describing that quite accurately. We are – remember that we are using cash. Forget about the buybacks for a minute, we have historically hear ever since our management team has been in place. We have used cash to satisfy company obligations related to stock option exercises, 401(k) plans, other stock grants that might be made during the course of the year. So you really have to look at two pieces, the dollar spent on share buyback and then what the amounts were related to those plans. Steve?

Yeah. Just to add on to that, we haven’t released the 2011 (k) but if you go back to the 2010 (k) on our cash flow statement, we break out these two items. On our cash post statement for 2010, we received cash proceeds of $91 million from people exercising stock options. So we’ve got the $91 million and that was cash flows coming in. And then we repurchased the stock on the open market and that was $156 million. So last year, we were net out $66 million. Do you understand? Paul Ridzon – KeyBanc: Understood. Thank you very much.

You’re welcome. Paul Ridzon – KeyBanc: And then on your 2012 guidance, what’s your assumption with regards to over or under recovery of fuel?

I believe in our 2012 guidance, we’re still assuming some modest under recovery of fuel.

Correct. Paul Ridzon – KeyBanc: And then lastly, relative to guidance at the end of the third quarter, I think weather was probably more mild than you expected then you had this for $0.04 pension settlement –

Right. Paul Ridzon – KeyBanc: Yet lose at the top end of gains.

Is there a question there? Paul Ridzon – KeyBanc: A question and a statement.

Well, I’ll take your congratulations and I appreciate that. Well, one of the things – I mean obviously we had continued effective cost control across the company. Weather did hurt us in the fourth quarter by about $0.04 of share, but the big drivers for the fourth quarter were really the equity AFUDC that we continue to accrue related to the major projects. The fact that we had full quarter of Oak Creek II where we did not, I mean, Oak Creek II was not in service during fourth quarter of 2010. And then weather was a negative factor. Paul Ridzon – KeyBanc: But you would have known about it, AFUDC in Oak Creek, correct?

Yeah, that’s correct. Yes, we knew about the AFUDC in Oak Creek and Glacier Hills. And as we say it, we had very effective cost controls across the company. Paul Ridzon – KeyBanc: Okay. Thank you.

You’re welcome.

Jay Dobson with Wunderlich Securities. Great, please state your question.

How are you doing, Jay? Jay Dobson – Wunderlich Securities: Hey, very well, Gale. I was hoping we went through a lot of this but hoping we could drill down a little bit into some of the residential trends you’re seeing and appreciate this weather makes it a little difficult to look through this particularly in the quarter. But if we look at the full year, is there more energy efficiency? Is this just austerity? I guess what I’m trying get at from your internal projections, the economy – if the economy accelerates, would you anticipate recovery in your Residential segment?

It’s very hard to tell. We don’t have enough good data in my mind to be able to say concretely what really is driving the residential class. I have a theory that could be wrong, and that is the limitations of weather normalization techniques. And we had a very, very unusually warm summer in 2010. We had another warm but not as warm summer in 2011, both summers above normal. So the numbers we’re reporting to you in essence are weather-normalized data. I still have some concern about the limitations, just of the weather-normalization techniques and the impact that that’s having on our reported data. If we have normal summer this year, I know it’s hard as all it gets out. But if we have a normal summer this year, I think we’ll be able to tell much better what’s going on. There is no question and I’ve mentioned this to you before, there’s no question that in shoulder months when it is easy to conserve, we are definitely seeing more conservation. We are not seeing more conservation when it’s 95 degrees on the lake front or when it’s 20 degrees below. Jay Dobson – Wunderlich Securities: Got you. But so I understand your suggestion is the weather normalization calculation is understating what is otherwise or weather normalized growth?

That is my theory and we’ll have to wait for more data to prove whether I’m right or wrong. Now for what it’s worth, another reason why I have some confidence in that theory is that we are seeing better than expected growth in small commercial. Jay Dobson – Wunderlich Securities: Got you. Okay. And then Rick on HoldCo interest, how should we think about the balancing act of retiring common stock and the growing dividend and your desire to reduce HoldCo debt over time?

Yeah. It’s obviously it’s one of the key priorities we got in terms of uses of cash, Jay. What we will look at is the economics of retiring HoldCo debt. We’ve got some 20 33s out there that right would not be economic. We will continue to look at that I would say were probably a couple of used app made big movement right now.

And Jay just – Rick is absolutely right. Just to add on the that. You know our whole theory and practice here is invest in solid utility projects that are needed for the region, maintain our credit metrics which means we continue de-lever a bit. And then if there’s extra cash, use that cash in the way that best benefits shareholders from an after-tax return standpoint. So that’s kind of our – I mean that’s our whole approach to the next several years. Jay Dobson – Wunderlich Securities: Nope. That’s perfect. I appreciate it. And then last question, Gale, I know it’s a little off in the future but you indicated the need for some incremental renewable capacity by the 2017 timeframe and assuming that was a decision in 2015 and you had to make it today. Is that biomass? Is that wind? Is that some other relative? What would it be?

Well, given today’s market, if the market today were the same when we faced the decision in 2015 or 2016, we would probably buy renewable credits – Jay Dobson – Wunderlich Securities: Perfect.

– for the short term. Jay Dobson – Wunderlich Securities: Absolutely, great. Thanks so much. I appreciate the help.

You’re welcome, Jay. Thank you.

Brian Russo with Ladenburg Thalmann, you may state your question. Brian Russo – Ladenburg Thalmann: Yes, hello. All my questions have been ask and answered. Thank you.

Thanks, Brian. Well, we have a pregnant pause here.

Andy Dashal (ph) with Morningstar, please proceed with your question.

Hi, Andy. How are you?

Good afternoon. How are you?

I’m well.

Most of my questions have been answered but kind of just one follow-up clarification on your earnings guidance. You incorporate warmer than normal weather in your first quarter 75 to 78 range. Is that incorporated into your full year while you’re using normal annualized growth from February to December then?

The answer is yes.

Yes, yes.

Okay. That’s all I have. Thank you.

You’re welcome, Andy.

Dan Jenkins with State of Wisconsin, please proceed with your question.

Okay, Dan. I got to ask you, they were trying to redact some signatures before the petitions went public on the recall. Were they trying to redact your name off there? Daniel Jenkins – State of Wisconsin: No comment.

Good afternoon, Dan. Daniel Jenkins – State of Wisconsin: Good afternoon. First of all, I was just wondering if you could clarify again what the 2012 CapEx plan’s going to be.

Sure. Rick has the breakdown for you actually.

Yeah, Dan. This is on our website but on page 12 of the analyst presentation, we break out our CapEx for 2012. About $705 million is what’s in the budget. Of that, about $70 million is tied to environmental and that’s finishing up the air quality controls – primarily finishing up the air quality controls at the older Oak Creek units. Renewables, $161 million which is tied to the biomass project and maybe a few dollars associated with Glacier Hills. And the rest, which is about $475 million is just base capital spend, pipe, poles, wires. Daniel Jenkins – State of Wisconsin: Okay. Given the CapEx and the dividend increase and share buybacks and no pension payments and all of those moving parts, what’s the financing plan for 2012?

I think we’ve got one offering sometime this year at the utility of $250 million-ish, roughly, Dan. Daniel Jenkins – State of Wisconsin: And do you have a quarter when that’s likely to be set, quarter?

We haven’t set a date yet. Yeah.

We haven’t set a date yet. Daniel Jenkins – State of Wisconsin: Okay.

And no equity issuances, obviously. Daniel Jenkins – State of Wisconsin: Right. And then I was just curious about that looking at the electric utility revenues, the wholesale, resale, and other revenues were up fairly big on a percentage basis. Just some color on what’s going on there and what to expect going forward?

Sure. We’ll let Allen Leverett, who heads our generation business cover that with you, Dan.

And, Dan, there are really two categories there. There’s wholesale and then there’s sales for resale. On the wholesale side, we had a 50-megawatt contract with a large co-op here in Wisconsin that we began providing service under that contract. I think it began June 1 of last year. And then we also made some additional sales to a co-op up in the UP of Michigan, so those two together, Dan, increased our wholesale sales about $17.5 million. So that’s two contracts together. In addition on the sales for resale and it’s probably the easiest way to think about those, Dan, those are spot sales. So those are sales that you would make on the spot market, it’s micro as opposed to the term market. In 2010, we purchased about 0.03 million megawatt hours from the micro market, whereas in 2011 we sold 1.3 million megawatt hours. So we had a swing of 1.6 million megawatt hours. And the reason that we were able to make those sales is largely because we had the Oak Creek expansion, the second unit of Oak Creek expansion that was available in 2011 and of course it was not available in 2010 because it hasn’t been completed yet. So hopefully that gives you a little bit of color about these line items. Daniel Jenkins – State of Wisconsin: So what’s the term of those wholesale contracts with the co-ops?

The contract to the Wisconsin co-op is a 10-year contract. The contract with the Michigan co-op was a contract we already had in place, but their take under that contract was a bit more. I think the original term on that contract, Dan, I think we’re into the third year of the contract. The original term of that contract I believe was 25 years. So it was a very longer term contract. Daniel Jenkins – State of Wisconsin: Okay. Thank you.

Take care, Dan. Daniel Jenkins – State of Wisconsin: You too.

Andrew Levi with Caris, please state your question. Andrew Levi – Caris: Hi.

Did you get the hat, Andy? Andrew Levi – Caris: Yes, thank you, Gale. My son loved it. So, thank you very much.

You’re welcome. Andrew Levi – Caris: You said it was one of the good ones.

I’m glad to hear that because it was painful buying it. Andrew Levi – Caris: Well, it is what it is, but we’ll see what happens this weekend.

Yeah. Andrew Levi – Caris: But thank you again.

You’re welcome. Andrew Levi – Caris: Do you guys say there was slide package on your website?

We do. We have a slide package on the website at www.wisconsinenergy.com. Andrew Levi – Caris: I can’t find it. Okay, I’ll work on that. And then the only other question I had, weather-wise for the year 2011, how much of that affect your earnings?

Rick, it certainly hurt earnings overall.

Yeah, we were – in health gas, gas was up slightly but it was offset by electrical sales about $0.03 a share, electrical expense $0.06 per share. Gas was up $0.03 a share.

So negative $0.03.

As compared to 2010. Andrew Levi – Caris: On this, I wanted verse normal anything – any of that?

Steve’s got that on normalize, yeah.

Yeah, basically, it was close to normal year. The heating degree days for gas were right here, the 20 degree – 20 year average. So gas was basically a push. And it was a hot summer, but it got warm in the fourth quarter. So, on an operating income – or excuse me, margin basis, there was only $6 million. So weather was basically a push this year.

Against normal.

Against normal. Andrew Levi – Caris: And then just looking at the OEM number which was obviously down quite a bit. Is that sustainable going into 2012?

Well, we’ll look at it, Steve, because there’s some accounting changes that affect the way you look at those numbers for 2011 and then I’ll be happy to talk about 2012, Steve?

Andy, the reduction in OEM on a year-to-year basis and we talked about this in the first and second quarter. It has to do with the elimination of the intercompany revenues and expenses related to the Power the Future leases. And so the impact because unit two, went into service we eliminated more revenue and that was about $98 million year-to-year difference. So, our consolidated OEM is down $98 million because of the elimination entry, I’d like Gale address the other issue.

And that this is the last quarter we’re going to see –

Right.

This whole had to do with the Power the Future assets coming into service. Now for 2012 and I may have mentioned this but it’s worth repeating because it can be confusing if you don’t follow this every day. For 2012, on a pure operating basis our OEM is projected roughly flat, however, when you see our financial reports each quarter you’ll actually see a decline in overall OEM because of the rate plan which caused for us to cease amortization over the course of 2012 of 148.1 million of regulatory assets. So everyone should keep that in mind but in terms of just the trend of real OEM from real operations 2012 we expect to be flat. Andrew Levi – Caris: Thank you.

You’re welcome, Andy.

Ted Hayden with Point State Capital, you may proceed with your question. Ted Hayden – Point State Capital: Good afternoon.

Hi Ted. Good to see. How are you doing? Ted Hayden – Point State Capital: Doing well. I’m glad I don’t have to bet you on a football game this fourth quarter and lose. So appreciate the time, I had just one quick question on 2011. What was your earned ROE at Webco?

If you remember our allowed ROE at the electric side of the business is 10.4. Our allowed ROE on the natural gas distribution side of the business is 10.5 and if you look overall, we were very, very close to our allowed ROE. Ted Hayden – Point State Capital: And is that on the 6 billion of rate base that you guys have in your December slide deck?

We are looking here. Yes. Ted Hayden – Point State Capital: Okay. And the equity ratio is like 53? It’s a sliding scale I guess, right?

Pat, we had 52.2%, 53% up in utilities?

53.5 is the high end. We were underneath that.

Midpoint is 51.

Yeah, our allowed range is 51% to 53.5%. As Pat said we were just under the 53.5%. Ted Hayden – Point State Capital: Got you. Okay and then I’m assuming the guidance for 2012 assumes the 10.4, 10.5 blended as well?

Well it assumes we can come close. Ted Hayden – Point State Capital: Come close? Okay so maybe a little bit of lag?

Yes. Ted Hayden – Point State Capital: Okay. Great. That was it. Thanks a lot.

You’re more than welcome Ted.

Your final question will come from Michael Lapides with Goldman Sachs.

Welcome back Michael. Michael Lapides – Goldman Sachs: Hey Gale. I want – if you don’t mind come back to the CapEx question and you talked the 2011 to 2015 and then the 2012 to 2016, 3.4 billion and the 3.5 billion. I’m just a little confused only because you spent a lot of money on South Oak Creek in 2011 if I remember correctly. But South Oak Creek CapEx kind of stopped soon. I mean, you’re mostly done with that and have done well with getting that project wrapped up on time on budget. So it seems like if I look at the CapEx, you’re replacing a large chunk of CapEx in 2011 tied to South Oak Creek with a lot of reliability and infrastructure. I mean, that’s not a small number. And I just want to see and check to make sure I’m understanding that correctly not making a mistake in kind of thinking about the timeline for when you spent dollars on South Oak Creek.

Very good question. And let me break it down for you. Rick and I have got a slide here which really, I think, details it quite well. You are correct. We are virtually complete with our spending on the South Oak Creek air quality control upgrade, and that is a very large project. When you look at our estimated 2011 spending on our rate-based infrastructure, it was about $420 million. For 2012, it’s about a $50 million increase. We’re projecting to spend $473 million on basic infrastructure work at our utilities, replacing aging gas distribution lines, replacing substation transformers, that kind of stuff. So we’re seeing, compared to 2011, about a $50 million increase in infrastructure spend. Then we’re projecting, as we show on the slides here that you can get on our website too, we’re projecting about $160 million of spending on renewable which is largely, Rick, the Rothschild Biomass Plant.

That’s correct.

And then, we have about another $70 million on top of that of environmental spend, environmental CapEx. So that takes you the number Rick mentioned about $705 million of projected capital spend in 2012 in kind of the categories’ breakdown. Michael Lapides – Goldman Sachs: Okay. All right, I’m with you guys. One last question, I just wanted to make sure I understood. On the debt side, besides what you do with the utility, is what’s in plan a reduction of HoldCo level interest and the HoldCo level debt or flat?

In 2012, it will be basically flat. Michael Lapides – Goldman Sachs: Okay. Okay, and beyond like how you were thinking about 2013 and beyond?

Yeah, let me rephrase. We did, as I mentioned in the script, we retired $450 million at the HoldCo in April. So there will be effect to that but we won’t be retiring any new debt in 2012. So we’ll have the effective retire net debt back in the last April, Michael. Michael Lapides – Goldman Sachs: Okay.

And Michael, let me go back if I can to maybe help clarify one additional point on the capital spend question you had. With our projection of about $705 million of capital spending in 2012, that’s materially below the actual spend for 2011. Michael Lapides – Goldman Sachs: Got it. Okay, I’m just – it strikes me your – the way I’m reading it is, come 2013 and 2014, it’s a big jump off in retirement, $400 million a year and reliability spend, kind of core spend because you’re rolling off some of the enviro and some of the renewable spend.

You’re absolutely correct and let me give you the projections. I mentioned $473 million in 2012 on the basic reliability, I mean, the basic core business capital spend. That jumps in our projections to $611 million in 2013 and about $585 million in 2014. So yes, you’re in the right direction with your intuition. Michael Lapides – Goldman Sachs: Have seen and then checked this with the PSC.

Oh, we – let me put it this way, every project of any kind of magnitude. Any project that’s of – what is our threshold on the electric side guys that we take the commission, $7 million, that was $7 million.

I would say $8 million.

$7 million or $8 million.

$8 million, yeah.

We have a capital project that is above $7 million or $8 million of capital spend. We historically, in the way regulation has worked here, we take that project for approval – individual project approval to the commission. And once that project is approved in the 110-year history of regulation in this state, cost recovery for an approved project that you bring in on time and on budget has never been denied. Michael Lapides – Goldman Sachs: Okay.

So Michael, if you look at actually what we’re doing – if you look at the installation history of the company and when a lot of this stuff we’re replacing was installed, look at the age of what we’re replacing, it’s time to be doing this. I mean we’re talking 50-year-old transformers. We’re talking poles that are in excess of 60 years old. We’re talking upgrading of the gas pipelines, putting better material in. So this is infrastructure improvement that needs to be made based on material conditions out there.

We have equipment here older than Mr. Goldman or Mr. Sachs. Michael Lapides – Goldman Sachs: Understood. Okay. I appreciate it, guys. Thank you.

Michael.

All right. Well, ladies and gentlemen, that concludes our conference call for today. We certainly appreciate your taking part. If you have any other questions, don’t hesitate to call Colleen Henderson. Colleen will be available in our Investor Relations office at 414-221-2592. Thanks, everybody. Have a good afternoon.