form11ka.htm
SECURITIES AND EXCHANGE
COMMISSION
Washington, D. C.
20549
FORM 11-K/A
[X]
|
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE SECURITIES
|
|
EXCHANGE ACT
OF 1934
|
For the fiscal year
ended December 31, 2006
OR
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
|
|
EXCHANGE ACT
OF 1934
|
Commission file
number 33-6369
Full title of the
Plan:
Peoples Energy
Corporation
Employee Capital Accumulation
Plan
and
Peoples Energy
Corporation
Employee Thrift
Plan
Name of issuer of
the securities held pursuant to the plan and the address of its principal
executive office:
Integrys Energy Group,
Inc.
130 East Randolph
Drive
Chicago,
Illinois 60601
EXPLANATORY
NOTE
This amended Annual
Report on Form 11-K for the year ended December 31, 2006 is filed to restate the
financial statements of the Employee Capital Accumulation and Thrift Trust and
Participating Plans as of December 21, 2006 and 2005. The
amended financial statements reflect a reallocation of assets between the two
plans covered by the trust; the Peoples Energy Corporation Employee Capital
Accumulation Plan and the Peoples Energy Corporation Employee Thrift
Plan. The reallocation is to reflect transfers of participant account
balances between the two plans. There were no other changes made in
the financial statements filed with this report. The original Form
11-K was filed June 27, 2007.
PEOPLES ENERGY
CORPORATION
EMPLOYEE CAPITAL ACCUMULATION AND
THRIFT TRUST
AND PARTICIPATING
PLANS
FINANCIAL
STATEMENTS
AND SUPPLEMENTAL
SCHEDULES
TOGETHER WITH REPORTS
OF
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
AS OF DECEMBER 31, 2006 and
2005
TABLE OF CONTENTS
|
|
|
Page
|
PEOPLES
ENERGY CORPORATION
|
|
EMPLOYEE
CAPITAL ACCUMULATION AND THRIFT TRUST
|
|
|
|
|
|
|
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
1
|
|
|
|
|
|
FINANCIAL
STATEMENTS
|
|
|
|
|
|
|
|
Statements of
Net Assets and Trust Balances
|
|
|
|
As
of December 31, 2006 and 2005
|
3
|
|
|
|
|
|
|
Statements of
Changes in Net Assets and Trust Balances
|
|
|
|
For
the Years Ended December 31, 2006 and 2005
|
4
|
|
|
|
|
|
|
Notes to
Financial Statements
|
5
|
|
|
|
|
|
SUPPLEMENTAL
SCHEDULES TO TRUST FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
Schedule of
Assets Held for Investment
|
|
|
|
Schedule
I
|
11
|
|
|
|
|
|
|
Schedule of
Reportable Transactions
|
|
|
|
Schedule
II
|
12
|
|
|
|
|
PEOPLES
ENERGY CORPORATION
|
|
EMPLOYEE
CAPITAL ACCUMULATION PLAN
|
|
|
|
|
|
|
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
14
|
|
|
|
|
|
FINANCIAL
STATEMENTS
|
|
|
|
|
|
|
|
Statements of
Net Assets Available for Plan Benefits
|
15
|
|
|
|
|
|
|
Statements of
Changes in Net Assets Available for Plan Benefits
|
16
|
|
|
|
|
|
|
Notes to
Financial Statements
|
17
|
|
|
|
|
PEOPLES
ENERGY CORPORATION
|
|
EMPLOYEE
THRIFT PLAN
|
|
|
|
|
|
|
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
23
|
|
|
|
|
|
FINANCIAL
STATEMENTS
|
|
|
|
|
|
|
|
Statements of
Net Assets Available for Plan Benefits
|
24
|
|
|
|
|
|
|
Statements of
Changes in Net Assets Available for Plan Benefits
|
25
|
|
|
|
|
|
|
Notes to
Financial Statements
|
26
|
Report
of Independent Registered Public Accounting Firm
Employee Benefit
Administrator Committee
Integrys Energy
Group, Inc.
We have audited the
accompanying statement of net assets of Peoples Energy Corporation Employee
Capital Accumulation and Thrift Trust and trust balances (the Trust) as of
December 31, 2006, and the related statement of changes in net assets and trust
balances for the year then ended. These financial statements are the
responsibility of the Trust’s management. Our responsibility is to express an
opinion on these financial statements based on our audit. The financial
statements of the Trust and trust balances as of December 31, 2005 were audited
by other auditors whose report dated April 6, 2006 expressed an unqualified
opinion on those statements.
We conducted our
audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the
financial statements referred to above present fairly, in all material respects,
the net assets of Peoples Energy Corporation Employee Capital Accumulation and
Thrift Trust and trust balances as of December 31, 2006, and the changes in its
net assets and trust balances for the year then ended in conformity with
accounting principles generally accepted in the United States of
America.
The accompanying
statements are those of Peoples Energy Corporation Employee Capital Accumulation
and Thrift Trust, which is established under Peoples Energy Corporation employee
Capital Accumulation Plan and Peoples Energy Corporation Employee Thrift Plan;
the statements do not purport to present the financial status of Peoples Energy
Corporation Employee Capital Accumulation Plan and Peoples Energy Corporation
Employee Thrift Plan. The statements do not contain certain information on
accumulated plan benefits and other disclosures necessary for a fair
presentation of the financial status of Peoples Energy Corporation Employee
Capital Accumulation Plan and Peoples Energy Corporation Employee Thrift Plan in
conformity with accounting principles generally accepted in the United States of
America. Furthermore, these statements do not purport to satisfy the Department
of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 relating to the financial statements of
employee benefit plans.
Our
audit was performed for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedules of assets held for
investment at December 31, 2006 and reportable transactions for the year ended
December 31, 2006 are presented for the purpose of additional analysis and are
not a required part of the basic financial statements but are supplementary
information required by the Department of Labor’s Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plans’
management. The supplemental schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
June 20, 2007,
except for Note 8,
as to which the
date is March 26, 2008
PEOPLES
ENERGY CORPORATION
|
EMPLOYEE
CAPITAL ACCUMULATION AND THRIFT TRUST
|
STATEMENTS
OF NET ASSETS AND TRUST BALANCES
|
AS
OF DECEMBER 31, 2006 AND 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
2005
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Receivable:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued
Interest and Dividends
|
|
$ |
598,615
|
|
|
$ |
405,990
|
|
|
|
|
|
|
|
|
|
|
Investments
at Quoted Market Value
|
|
|
247,249,809
|
|
|
|
226,171,839
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
|
247,848,424
|
|
|
|
226,577,829
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued
Expenses
|
|
|
18,593
|
|
|
|
18,967
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
18,593
|
|
|
|
18,967
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS
|
|
$ |
247,829,831
|
|
|
$ |
226,558,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRUST
BALANCES FOR:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peoples
Energy Corporation Employee Capital
|
|
|
|
|
|
|
|
|
Accumulation
Plan, As Restated
|
|
$ |
167,011,637
|
|
|
$ |
154,020,995
|
|
|
|
|
|
|
|
|
|
|
Peoples
Energy Corporation Employee Thrift Plan, As Restated
|
|
|
80,818,194
|
|
|
|
72,537,867
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
247,829,831
|
|
|
$ |
226,558,862
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
|
PEOPLES
ENERGY CORPORATION
|
EMPLOYEE
CAPITAL ACCUMULATION AND THRIFT TRUST
|
STATEMENTS
OF CHANGES IN NET ASSETS AND TRUST BALANCES
|
FOR
THE YEARS ENDED DECEMBER 31, 2006 AND 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
2005
|
|
ADDITIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions:
|
|
|
|
|
|
|
Employee
Contributions
|
|
$ |
8,687,640
|
|
|
$ |
8,451,753
|
|
Employer
Contributions
|
|
|
3,646,921
|
|
|
|
3,659,272
|
|
Rollover
Contributions
|
|
|
974,044
|
|
|
|
263,407
|
|
Total
Contributions
|
|
|
13,308,605
|
|
|
|
12,374,432
|
|
|
|
|
|
|
|
|
|
|
Income from
Investments:
|
|
|
|
|
|
|
|
|
Dividend
Income
|
|
|
2,885,897
|
|
|
|
1,180,189
|
|
Interest
Income
|
|
|
804,185
|
|
|
|
1,201,113
|
|
Total Income
from Investments
|
|
|
3,690,082
|
|
|
|
2,381,302
|
|
|
|
|
|
|
|
|
|
|
Loan
Payments:
|
|
|
|
|
|
|
|
|
Interest
|
|
|
473,852
|
|
|
|
425,605
|
|
|
|
|
|
|
|
|
|
|
Net
Gain:
|
|
|
|
|
|
|
|
|
Net
Unrealized Appreciation (Depreciation)
|
|
|
10,935,983
|
|
|
|
(4,191,874 |
) |
Net Realized
Gains
|
|
|
13,426,016
|
|
|
|
7,771,284
|
|
Total Net
Gain
|
|
|
24,361,999
|
|
|
|
3,579,410
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ADDITIONS
|
|
|
41,834,538
|
|
|
|
18,760,749
|
|
|
|
|
|
|
|
|
|
|
DEDUCTIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Withdrawals
|
|
|
20,563,569
|
|
|
|
22,080,739
|
|
|
|
|
|
|
|
|
|
|
TOTAL
DEDUCTIONS
|
|
|
20,563,569
|
|
|
|
22,080,739
|
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Assets During the Year
|
|
|
21,270,969
|
|
|
|
(3,319,990 |
) |
|
|
|
|
|
|
|
|
|
Net Assets -
Beginning of Year
|
|
|
226,558,862
|
|
|
|
229,878,852
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS - END OF YEAR
|
|
$ |
247,829,831
|
|
|
$ |
226,558,862
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
|
PEOPLES
ENERGY CORPORATION
EMPLOYEE
CAPITAL ACCUMULATION AND THRIFT TRUST
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
1 – ESTABLISHMENT OF THE TRUST
The Peoples Energy
Corporation Employee Capital Accumulation and Thrift Trust (the Trust) was
established to accumulate contributions and income thereon to be used to provide
benefits under the Peoples Energy Corporation Employee Capital Accumulation Plan
and the Peoples Energy Corporation Employee Thrift Plan (the
Plans). The Northern Trust Company (Northern Trust) serves as Trustee
for the Trust.
Peoples Energy
Corporation (the Company) has received favorable determination letters for the
Plans which entitle the Trust to exemption from Federal income tax
liability. The Plans are subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA), as amended.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the
significant accounting policies consistently applied in the preparation of the
accompanying financial statements is as follows:
The accompanying
statements were prepared on the accrual basis of accounting in accordance with
accounting principles generally accepted in the United States of
America.
The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
changes therein and disclosure of contingent assets and liabilities at the date
of the financial statements. Accordingly, actual results could differ
from those estimates.
Benefits are recorded when paid.
d.
|
Administrative
Expenses and Fees
|
The Plans’
participants, through reduced earnings, pay recordkeeping, trustee, and
investment management fees. During 2006 and 2005, such fees amounted to $228,839
and $222,551, respectively. The Company provides certain accounting
and management services to the Plans at no cost. These services
include audit fees, legal fees, and time provided by Company
employees. Costs borne by the Company have been excluded from the
accompanying financial statements since they were not paid from Trust
assets. Accrued expenses at December 31, 2006 and 2005 of $18,593 and
$18,967, respectively relate to the normal monthly invoices charged by the
trustee and the record keeper.
PEOPLES
ENERGY CORPORATION
EMPLOYEE
CAPITAL ACCUMULATION AND THRIFT TRUST
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
The underlying
assets for each participant’s account are maintained at the Trust
level. Each participant’s record is maintained at the Plan level and
is credited with the participant’s contributions and allocations of (a) the
Company’s contribution and (b) Plan earnings, and charged with an allocation of
administrative expenses. Allocations are based on participant
earnings or account balances. The benefit to which a participant is
entitled is the benefit that can be provided from the participant’s vested
account.
f.
|
Recognition
of Investment Gains and
Losses
|
Purchases and sales
of securities are accounted for on a trade-date basis. Dividends are
recorded on the ex-dividend date. At the time the investments are sold, the
difference between the original cost (computed on an average cost basis) and the
proceeds received are recorded as a realized gain or loss in the financial
statements.
The unrealized
appreciation or depreciation of investments held at the end of the year
represents the change in the market value of the investments from the beginning
of the Plan year (or date the investments were purchased, if later) to the end
of the Plan year.
Investments are
included in the accompanying statements of net assets at fair market value as of
the financial statement dates. Securities traded on security
exchanges are valued at the closing price on the day of valuation, except for
such securities included in the Northern Trust Global Investments (NTGI)
Collective Fund Investment Trust for Employee Benefit Plans, which are valued at
the closing net asset value on the day of valuation. Short-term
credit investments (corporate notes) are valued at cost, which approximates
market. Participant loans are valued at their outstanding balances, which
approximate fair value.
PEOPLES
ENERGY CORPORATION
|
|
EMPLOYEE
CAPITAL ACCUMULATION AND THRIFT TRUST
|
|
NOTES
TO FINANCIAL STATEMENTS
|
|
DECEMBER
31, 2006 and 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
(Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTMENTS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
in securities and the net appreciation (depreciation), which includes
realized as well as
unrealized gains or losses at December 31, consisted of the
following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
2005
|
|
|
|
|
|
|
|
NET
|
|
|
|
|
|
NET
|
|
|
|
|
|
|
|
CHANGE
IN
|
|
|
|
|
|
CHANGE
IN
|
|
|
|
|
MARKET
|
|
|
APPRECIATION
|
|
|
MARKET
|
|
|
APPRECIATION
|
|
|
|
|
VALUE
|
|
|
(DEPRECIATION)
|
|
|
VALUE
|
|
|
(DEPRECIATION)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI-QM Coltv
Daily Russell 3000 Equity Index Fund-SL *
|
|
$ |
5,819,837
|
|
|
$ |
982,214
|
|
|
$ |
5,427,205
|
|
|
$ |
316,494
|
|
NTGI-QM Coltv
Daily S&P 500 Equity Index Fund-SL *
|
|
|
50,793,147
|
|
|
|
7,163,863
|
|
|
|
48,528,512
|
|
|
|
2,218,994
|
|
NTGI Coltv
Daily S&P 500/Barra Growth Eqty Indx Fd-SL *
|
|
|
23,050,576
|
|
|
|
2,335,028
|
|
|
|
22,082,613
|
|
|
|
846,675
|
|
NTGI Coltv
Daily S&P 500/Barra Value Equity Indx Fd-SL *
|
|
|
21,575,104
|
|
|
|
3,719,032
|
|
|
|
18,931,958
|
|
|
|
1,009,867
|
|
NTGI-QM Coltv
Daily Russell 2000 Equity Index Fund-SL *
|
|
|
17,242,174
|
|
|
|
2,591,692
|
|
|
|
14,544,017
|
|
|
|
570,757
|
|
NTGI Coltv
Daily S&P MidCap 400 Equity Indx Fd-SL *
|
|
|
11,861,287
|
|
|
|
1,146,967
|
|
|
|
11,788,575
|
|
|
|
1,150,611
|
|
Northern
Instl Fds Intl Equity Index Portfolio Class A *
|
|
|
13,858,419
|
|
|
|
722,152
|
|
|
|
8,520,490
|
|
|
|
785,429
|
|
NTGI-QM Coltv
Daily Aggregate Bond Index Fund - SL *
|
|
|
35,008,764
|
|
|
|
1,328,870
|
|
|
|
35,204,469
|
|
|
|
865,597
|
|
Northern
Trust Collective Short-Term Investment Fund *
|
|
|
41,265,342
|
|
|
|
-
|
|
|
|
36,300,018
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PEOPLES
ENERGY CORPORATION COMMON STOCK *
|
|
|
19,189,881
|
|
|
|
4,372,181
|
|
|
|
17,536,824
|
|
|
|
(4,185,014 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTICIPANT
NOTES
|
|
|
|
7,585,278
|
|
|
|
-
|
|
|
|
7,307,158
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
INVESTMENTS
|
|
|
$ |
247,249,809
|
|
|
$ |
24,361,999
|
|
|
$ |
226,171,839
|
|
|
$ |
3,579,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: *
Party-in-Interest Transactions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PEOPLES
ENERGY CORPORATION
EMPLOYEE
CAPITAL ACCUMULATION AND THRIFT TRUST
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
3 – INVESTMENTS
The fair market
value of the Trust’s investments at December 31, 2006 and 2005, which represent
5% or more of the Trust’s net assets, are summarized as follows:
|
|
Fair Market
Value
|
|
|
|
at December
31,
|
|
|
|
2006
|
|
|
2005
|
|
|
|
|
|
|
|
|
NTGI-QM Coltv
Daily S&P 500 Equity Index Fund-SL
|
|
$ |
50,793,147
|
|
|
$ |
48,528,512
|
|
Northern
Trust Collective Short-Term Investment Fund
|
|
|
41,265,342
|
|
|
|
36,300,018
|
|
NTGI-QM Coltv
Daily Aggregate Bond Index Fund-SL
|
|
|
35,008,764
|
|
|
|
35,204,469
|
|
NTGI Coltv
Daily S&P 500/Barra Growth Eqty Index Fund-SL
|
|
|
23,050,576
|
|
|
|
22,082,613
|
|
NTGI Coltv
Daily S&P 500/Barra Value Eqty Index Fund-SL
|
|
|
21,575,104
|
|
|
|
18,931,958
|
|
Peoples
Energy Corporation Common Stock
|
|
|
19,189,881
|
|
|
|
17,536,824
|
|
NTGI-QM Coltv
Daily Russell 2000 Equity Index Fund-SL
|
|
|
17,242,174
|
|
|
|
14,544,017
|
|
NTGI Coltv
Daily S&P MidCap 400 Equity Index Fund-SL
|
|
|
-
|
|
|
|
11,788,575
|
|
Northern
Instl Fds Intl Equity Index Portfolio Class A
|
|
|
13,858,419
|
|
|
|
-
|
|
NOTE
4 - RELATED PARTY
Northern Trust is
the investment manager utilized by the plan administrator to manage certain
investments held by the Trust. These investments consist of shares in
Northern Trust’s Collective and Institutional Funds. Northern Trust
also serves as Trustee and, therefore, qualifies as
party-in-interest. At December 31, 2006 and 2005, the fair value of
assets held by the Trust that were managed by Northern Trust was $220,474,650
and $201,327,857, respectively. Fees paid to Northern Trust in 2006
and 2005 are considered to represent the fair market value of the services
performed and are comparable to fees paid to other investment
managers. During 2006 and 2005, amounts paid to Northern Trust for
fees were $85,510 and $86,375, respectively. As of December 31, 2006
and 2005, amounts due to Northern Trust for fees were $28,828 and $28,354,
respectively.
NOTE
5 - RISKS AND UNCERTAINTIES
The Trust invests
in various investment securities. Investment securities are exposed
to various risks such as interest rate, market, and credit risks. Due
to the level of risk associated with certain investment securities, it is at
least reasonably possible that such changes in the values of investment
securities will occur in the near term and that such change could materially
affect the amounts reported in the statement of net assets.
PEOPLES
ENERGY CORPORATION
EMPLOYEE
CAPITAL ACCUMULATION AND THRIFT TRUST
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
6 – PEOPLES ENERGY CORPORATION MERGER
On July 8, 2006,
WPS Resources Corporation (WPS Resources), Wedge Acquisition Corporation (Sub),
a wholly owned subsidiary of WPS Resources, and Peoples Energy Corporation
entered into an agreement and Plan of Merger (the Agreement).
The Agreement
provides for the merger of Sub with and into Peoples Energy (the Merger) on the
terms and subject to the conditions set forth in the Agreement, with Peoples
Energy continuing as the surviving corporation. As a result of the
Merger, Peoples Energy will become a wholly owned subsidiary of WPS Resources,
and Peoples Energy shareholders will receive shares of WPS Resources common
stock in exchange for their shares of common stock of Peoples Energy including
stock held pursuant to this plan. At the effective time of the
Merger, each share of common stock of Peoples Energy issued and outstanding
immediately prior to the effective time will be cancelled and converted into the
right to receive 0.825 shares of common stock of WPS Resources.
NOTE
7 – SUBSEQUENT EVENT
On February 21,
2007, the merger between WPS Resources and Peoples Energy Corporation was
consummated. In connection with the merger, WPS Resources changed its
name to Integrys Energy Group, Inc. Effective with the merger, the
plan sponsor is changed from Peoples Energy Corporation to Integrys Energy
Group, Inc. and the plan administrator is changed from the Peoples Energy
Corporation Retirement & Benefit Plans Committee to the Integrys Energy
Group, Inc. Employee Benefit Administrator Committee. The effect this
merger will have on the Trust has not been determined.
NOTE
8 – RESTATEMENT OF BEGINNING NET ASSETS BALANCES BETWEEN CAPITAL ACCUMULATION
AND THRIFT PLANS
The Trust has
restated its previously issued 2006 and 2005 financial statements to account for
the transfers of participants’ account balances between the Capital Accumulation
Plan and the Thrift Plan from prior years, affecting the net asset allocation
between the two Plans. The cumulative effect of the change in net assets in the
2005 financial statements is to increase the net assets of the Capital
Accumulation Plan and to decrease the net assets of the Thrift Plan by
$11,137,133 at January 1, 2005, respectively, as well as to increase the
investment income and net gain allocation to the Thrift Plan and to decrease
such allocation to the Capital Accumulation Plan by $13,820 for the year ended
December 31, 2005, respectively. The net effect of the restatement to the 2006
financial statements is to increase the net assets of the Capital Accumulation
Plan and to decrease the net assets of the Thrift Plan by $11,456,967 at
December 31, 2006, respectively, including the net effect of increasing the
investment income and net gain allocation to the Thrift Plan and decreasing such
allocation to the Capital Accumulation Plan by $123,613 for the year ended
December 31, 2006, respectively.
SUPPLEMENTAL
SCHEDULES
TO
TRUST FINANCIAL STATEMENTS
|
|
|
|
|
|
|
SCHEDULE
I
|
|
|
|
|
|
|
|
|
|
|
PEOPLES
ENERGY CORPORATION
|
|
EMPLOYEE
CAPITAL ACCUMULATION AND THRIFT TRUST
|
|
SCHEDULE
OF ASSETS HELD FOR INVESTMENT
|
|
DECEMBER
31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST/
|
|
|
|
|
QUANTITY/
|
|
|
|
CARRYING
|
|
|
CURRENT
|
|
FACE
VALUE
|
|
|
|
VALUE
|
|
|
VALUE
|
|
|
|
|
|
|
|
|
|
|
|
|
COLLECTIVE
INVESTMENT FUNDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,580
|
|
*NTGI-QM
Coltv Daily Russell 3000 Equity Index Fund-SL
|
|
$ |
4,660,191
|
|
|
$ |
5,819,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,221
|
|
*NTGI-QM
Coltv Daily S&P 500 Equity Index Fund-SL
|
|
|
37,929,786
|
|
|
|
50,793,147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,395,612
|
|
*NTGI Coltv
Daily S&P 500/Barra Growth Eqty Indx Fd-SL
|
|
|
19,087,196
|
|
|
|
23,050,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
766,379
|
|
*NTGI Coltv
Daily S&P 500/Barra Value Equity Indx Fd-SL
|
|
|
16,867,568
|
|
|
|
21,575,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,679
|
|
*NTGI-QM
Coltv Daily Russell 2000 Equity Index Fund-SL
|
|
|
12,950,618
|
|
|
|
17,242,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
424,816
|
|
*NTGI Coltv
Daily S&P MidCap 400 Equity Indx Fd-SL
|
|
|
9,614,697
|
|
|
|
11,861,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
994,148
|
|
*Northern
Instl Fds Intl Equity Index Portfolio Class A
|
|
|
12,570,148
|
|
|
|
13,858,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
103,020
|
|
*NTGI-QM
Coltv Daily Aggregate Bond Index Fund - SL
|
|
|
31,998,661
|
|
|
|
35,008,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,265,342
|
|
*Northern
Trust Collective Short-Term Investment Fund
|
|
|
41,265,342
|
|
|
|
41,265,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON
STOCK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
430,556
|
|
*PEOPLES
ENERGY CORPORATION COMMON STOCK
|
|
|
16,881,855
|
|
|
|
19,189,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTICIPANT
NOTES
|
|
|
-
|
|
|
|
7,585,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
HELD FOR INVESTMENT
|
|
$ |
203,826,062
|
|
|
$ |
247,249,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI =
Northern Trust Global Investments
|
|
|
|
|
|
|
|
|
|
|
|
SL = security
lending
|
|
|
|
|
|
|
|
|
|
|
|
*
Party-in-interest transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE
II
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PEOPLES
ENERGY CORPORATION
|
|
EMPLOYEE
CAPITAL ACCUMULATION AND THRIFT TRUST
|
|
SCHEDULE
OF REPORTABLE TRANSACTIONS
|
|
FOR
THE YEAR ENDED DECEMBER 31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUMBER
|
|
|
DOLLAR
|
|
|
NUMBER
|
|
|
DOLLAR
|
|
|
NET
|
|
IDENTITY
OF PARTY INVOLVED/
|
|
OF
|
|
|
VALUE
OF
|
|
|
OF
|
|
|
VALUE
OF
|
|
|
GAIN/(LOSS)
|
|
DESCRIPTION
OF SECURITY
|
|
PURCHASES
|
|
|
PURCHASES
|
|
|
SALES
|
|
|
SALES
|
|
|
RECOGNIZED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SINGLE
TRANSACTIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERIES
OF TRANSACTIONS BY ISSUE IN EXCESS OF 5% OF ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern
Trust Collective Short-Term Investment Fund
|
|
|
464
|
|
|
$ |
73,770,751
|
|
|
|
-
|
|
|
$ |
-
|
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI Coltv
Daily S&P 500/Barra Value Equity Indx Fd-SL
|
|
|
115
|
|
|
$ |
9,418,114
|
|
|
|
-
|
|
|
$ |
-
|
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI-QM Coltv
Daily Aggregate Bond Index Fd-SL
|
|
|
296
|
|
|
$ |
8,783,005
|
|
|
|
-
|
|
|
$ |
-
|
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI-QM Coltv
Daily S&P 500 Equity Indx Fd-SL
|
|
|
99
|
|
|
$ |
11,114,144
|
|
|
|
-
|
|
|
$ |
-
|
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peoples
Energy Corporation Common Stock
|
|
|
57
|
|
|
$ |
19,054,353
|
|
|
|
-
|
|
|
$ |
-
|
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern
Instl Fds Intl Equity Index Portfolio Class A
|
|
|
148
|
|
|
$ |
9,476,812
|
|
|
|
-
|
|
|
$ |
-
|
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI-QM Coltv
Daily S&P Midcap 400 Equity Index Fd-SL
|
|
|
123
|
|
|
$ |
5,305,354
|
|
|
|
-
|
|
|
$ |
-
|
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI-QM Coltv
Daily S&P 500/Barra Growth Equity Index Fd-SL
|
|
|
110
|
|
|
$ |
6,817,239
|
|
|
|
-
|
|
|
$ |
-
|
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI-QM Coltv
Daily Russell 2000 Equity Index Fd-SL
|
|
|
116
|
|
|
$ |
6,950,083
|
|
|
|
-
|
|
|
$ |
-
|
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern
Trust Collective Short-Term Investment Fund
|
|
|
-
|
|
|
$ |
73,770,751
|
|
|
|
540
|
|
|
$ |
68,805,412
|
|
|
$ |
(4,965,339 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI Coltv
Daily S&P 500/Barra Value Equity Indx Fd-SL
|
|
|
-
|
|
|
$ |
9,418,114
|
|
|
|
131
|
|
|
$ |
10,493,999
|
|
|
$ |
1,075,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI-QM Coltv
Daily Aggregate Bond Index Fd-SL
|
|
|
-
|
|
|
$ |
8,783,005
|
|
|
|
395
|
|
|
$ |
10,468,003
|
|
|
$ |
1,684,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI-QM Coltv
Daily S&P 500 Equity Indx Fd-SL
|
|
|
-
|
|
|
$ |
11,114,144
|
|
|
|
149
|
|
|
$ |
16,013,372
|
|
|
$ |
4,899,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peoples
Energy Corporation Common Stock
|
|
|
-
|
|
|
$ |
19,054,353
|
|
|
|
70
|
|
|
$ |
21,744,219
|
|
|
$ |
2,689,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern
Instl Fds Intl Equity Index Portfolio Class A
|
|
|
-
|
|
|
$ |
9,476,812
|
|
|
|
100
|
|
|
$ |
4,861,035
|
|
|
$ |
(4,615,777 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI-QM Coltv
Daily S&P Midcap 400 Equity Index Fd-SL
|
|
|
-
|
|
|
$ |
5,305,354
|
|
|
|
125
|
|
|
$ |
6,379,609
|
|
|
$ |
1,074,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI-QM Coltv
Daily S&P 500/Barra Growth Equity Index Fd-SL
|
|
|
-
|
|
|
$ |
6,817,239
|
|
|
|
137
|
|
|
$ |
8,184,304
|
|
|
$ |
1,367,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NTGI-QM Coltv
Daily Russell 2000 Equity Index Fd-SL
|
|
|
-
|
|
|
$ |
6,950,083
|
|
|
|
130
|
|
|
$ |
6,843,619
|
|
|
$ |
(106,464 |
) |
PEOPLES
ENERGY CORPORATION
EMPLOYEE
CAPITAL ACCUMULATION PLAN
Report
of Independent Registered Public Accounting Firm
Employee Benefit
Administrator Committee
Integrys Energy
Group, Inc.
We have audited the
accompanying statement of net assets available for plan benefits of Peoples
Energy Corporation Employee Capital Accumulation Plan (the Plan) as of December
31, 2006, and the related statement of changes in net assets available for plan
benefits for the year then ended. These financial statements are the
responsibility of the Plan’s management. Our responsibility is to express an
opinion on these financial statements based on our audit. The financial
statements of the Plan as of December 31, 2005 were audited by other auditors
whose report dated April 6, 2006 expressed an unqualified opinion on those
statements.
We conducted our
audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the
financial statements referred to above present fairly, in all material respects,
the net assets available for plan benefits of Peoples Energy Corporation
Employee Capital Accumulation Plan as of December 31, 2006, and the changes in
its net assets available for plan benefits for the year then ended in conformity
with accounting principles generally accepted in the United States of
America.
/s/ Hill,
Taylor LLC
June 20, 2007, except for Note
7,
as to which the date is
March 26, 2008
PEOPLES
ENERGY CORPORATION
|
EMPLOYEE
CAPITAL ACCUMULATION PLAN
|
STATEMENTS
OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
|
AS
OF DECEMBER 31, 2006 AND 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
2006
|
|
|
2005
|
|
|
|
|
|
|
|
|
PARTICIPANT
LOANS
|
|
$ |
3,119,978
|
|
|
$ |
3,137,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PLAN INTEREST
IN PEOPLES ENERGY CORPORATION
|
|
|
|
|
|
|
|
|
EMPLOYEE
CAPITAL ACCUMULATION AND THRIFT
|
|
|
|
|
|
|
|
|
TRUST, AT
MARKET VALUE
|
|
|
163,891,659
|
|
|
|
150,883,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR PLAN BENEFITS, As Restated
|
|
$ |
167,011,637
|
|
|
$ |
154,020,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
|
|
|
|
|
PEOPLES
ENERGY CORPORATION
|
|
EMPLOYEE
CAPITAL ACCUMULATION PLAN
|
|
STATEMENTS
OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN
BENEFITS
|
|
FOR
THE YEARS ENDED DECEMBER 31, 2006 AND 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
2005
|
|
ADDITIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions:
|
|
|
|
|
|
|
Employee
Contributions
|
|
$ |
5,650,158
|
|
|
$ |
5,501,655
|
|
Employer
Contributions
|
|
|
2,346,556
|
|
|
|
2,246,441
|
|
Rollover
Contributions
|
|
|
974,044
|
|
|
|
209,251
|
|
Total
Contributions
|
|
|
8,970,758
|
|
|
|
7,957,347
|
|
|
|
|
|
|
|
|
|
|
Income from
Investments:
|
|
|
|
|
|
|
|
|
Dividend
Income
|
|
|
1,929,492
|
|
|
|
921,179
|
|
Interest
Income
|
|
|
537,673
|
|
|
|
937,511
|
|
Total Income
from Investments
|
|
|
2,467,165
|
|
|
|
1,858,690
|
|
|
|
|
|
|
|
|
|
|
Loan
Payments:
|
|
|
|
|
|
|
|
|
Interest
|
|
|
206,352
|
|
|
|
186,985
|
|
|
|
|
|
|
|
|
|
|
Net
Gain
|
|
|
|
|
|
|
|
|
Net
Unrealized Appreciation (Depreciation)
|
|
|
7,311,727
|
|
|
|
(3,271,905 |
) |
Net Realized
Gains
|
|
|
8,976,547
|
|
|
|
6,065,761
|
|
Total Net
Gain
|
|
|
16,288,274
|
|
|
|
2,793,856
|
|
|
|
|
|
|
|
|
|
|
Transfer
from Thrift Plan Arising from Employee Transfers |
|
|
35,359 |
|
|
|
421,908 |
|
|
|
|
|
|
|
|
|
|
TOTAL
ADDITIONS
|
|
|
27,967,908
|
|
|
|
13,218,786
|
|
|
|
|
|
|
|
|
|
|
DEDUCTIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Withdrawals
|
|
|
14,977,266
|
|
|
|
16,742,146
|
|
|
|
|
|
|
|
|
|
|
TOTAL
DEDUCTIONS
|
|
|
14,977,266
|
|
|
|
16,742,146
|
|
|
|
|
|
|
|
|
|
|
Net Increase
(Decrease) in Assets During the Year
|
|
|
12,990,642
|
|
|
|
(3,523,360 |
) |
|
|
|
|
|
|
|
|
|
Net Assets -
Beginning of Year, As Restated
|
|
|
154,020,995
|
|
|
|
157,544,355
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS - END OF YEAR
|
|
$ |
167,011,637
|
|
|
$ |
154,020,995
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
|
PEOPLES
ENERGY CORPORATION
EMPLOYEE
CAPITAL ACCUMULATION PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
1 - DESCRIPTION OF PLAN
The following is a
brief description of the Peoples Energy Corporation Capital Accumulation Plan
(the Plan). More complete information may be found in the plan
document.
The Plan is a
defined contribution plan and covers those employees of Peoples Energy
Corporation and subsidiary companies who are not covered by a collective
bargaining agreement. Subsidiary companies include The Peoples Gas
Light and Coke Company, North Shore Gas Company, Peoples Energy Resources
Corporation, Peoples Energy Services Corporation (PESC) and Peoples Energy
Production. The effective date of the Plan is January 1,
1977. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). In 2005 the Plan was
amended to reduce from $5,000 to $1,000 the maximum participant balance subject
to automatic lump-sum distribution upon termination of service.
Employees are
eligible to participate in this plan immediately upon
employment. Participants may elect to make contributions and
designate such amounts as tax deferred contributions, after tax contributions or
a combination of both. For participant contributions of up to 6% of
their regular rate of pay, the employer contributes a matching amount equal to
60% (100% for PESC participants) of the employee's regular
contributions. The employer matching contributions are invested in
the same manner that the employee contributions are
invested. Participants may also elect to make additional
contributions (supplemental contributions) of up to 10% of their regular rate of
pay; these contributions are not matched by the
employer. Participants age 50 years and older are allowed to
contribute an additional pre-tax catch-up contribution according to Internal
Revenue Service (IRS) guidelines and the Economic Growth and Tax Relief
Reconciliation Act of 2001 provisions. Participants may also
contribute amounts representing rollovers from other qualified defined benefit
or defined contribution plans.
Participants direct
the investment of their contributions into various investment options offered by
the Plan. The Plan currently offers the following eleven investment
options: Money Market Fund; Short Term Bond Fund; Bond Fund; Balanced Fund;
S&P 500 Equity Fund; S&P 500 Growth Fund; S&P 500 Value Fund; MidCap
Equity Fund; Small Cap Equity Fund; Foreign Equity Fund; and Company Stock
Fund. Effective February 21, 2007, participants are no longer able to
direct contributions into the Company Stock Fund.
PEOPLES
ENERGY CORPORATION
EMPLOYEE
CAPITAL ACCUMULATION PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
1 - DESCRIPTION OF PLAN (Continued)
Each participant’s
account is maintained in the Plan and is credited with the participant’s
contributions and allocations of (a) the Company’s contribution and (b) Plan
earnings, and charged with an allocation of administrative
expenses. Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is entitled
is the benefit that can be provided from the participant’s vested
account.
Active participants
are permitted to elect to take up to two loans from their accounts. Participants
may borrow from their fund accounts from a minimum of $500 to a maximum of the
lesser of (a) $50,000 less the highest outstanding loan balance for one year
preceding such loan or, (b) one half of the value of the vested balance in their
account as of the last day of the month preceding the loan application
date. Loans may be for five years for non-residential loans or up to
15 years for residential loans. The loans are secured by balances in
the participant's accounts and bear interest equal to the prime rate on the
first day of the month in which the loan was applied for, plus 1 percentage
point.
Participants are
fully vested in their own contribution account and their rollover account at all
times and become fully vested in the employer's contribution account at the
earlier of (a) completion of at least 104 participation periods, as defined in
the Plan, or (b) termination of service after attaining age 55 or by reason of
death, retirement or total disability. Participants with less than
104 participation periods completed are deemed to be 25, 50 or 75 percent vested
in the employer's contribution account based on the number of completed
participation periods.
For termination of
service due to death, disability, or retirement, a participant may elect to
receive either a lump sum amount equal to the value of the participant’s vested
interest in his or her account, or annual installments over a 15-year
period. For termination of service for other reasons, a participant
may receive the value of the vested interest in his or her account as a lump sum
distribution.
Each participant
whose employment with all employers is terminated is entitled to a distribution
of the entire balance in his or her account and the vested portion of the
employer contribution account within 90 days after termination, unless the
employee elects to defer the distribution under the terms of the
Plan. Active participants are permitted to elect in-service and
retirement planning withdrawals under the Plan provisions.
PEOPLES
ENERGY CORPORATION
EMPLOYEE
CAPITAL ACCUMULATION PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
1 - DESCRIPTION OF PLAN (Continued)
In 2006 and 2005
forfeited non-vested accounts totaled $64,324 and $120,247,
respectively. These accounts would have been or will be used to
reduce employer contributions to the Plan.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the
Plan’s significant accounting policies consistently applied in the preparation
of the accompanying financial statements is as follows:
The accounts of the
Plan are maintained on the accrual basis of accounting. Reference is
made to the separate Statements of Net Assets Held in Trust and accompanying
notes of the Peoples Energy Corporation Employee Capital Accumulation and Thrift
Trust (the Trust) for further information on the accounting for Trust
investments and transactions.
The cost of
recordkeeping, trustee, and investment management services are allocated to Plan
participants based upon account balances. Such allocated costs are
paid by participants through reduced investment earnings. Peoples
Energy Corporation provides certain administrative and accounting services to
the Plan at no cost and also pays the cost of services provided to the Plan by
the independent auditors.
The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
changes therein, and disclosure of contingent assets and liabilities at the date
of the financial statements. Accordingly, actual results could differ
from those estimates.
Employee
contributions become payable to the Plan on the pay date on which the
contribution is deducted from the employee’s pay.
The employer
contribution is required to be paid to the Trust during or as soon as possible
after the end of each month as is reasonably practicable.
PEOPLES
ENERGY CORPORATION
EMPLOYEE
CAPITAL ACCUMULATION PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
e.
|
Investment
Policy and Allocation of Earnings on
Investments
|
Contributions
received by the Plan are invested the same day by the Trust maintained by The
Northern Trust Company into each participant’s account. Earnings are
posted daily to each such account.
Funds received by
the Plan are invested by the Trust maintained by Northern Trust. The
funds in the Plan are commingled with the funds of the Peoples Energy
Corporation Employee Thrift Plan to obtain the economies available when larger
amounts are available for investment. Reference is made to the Trust
separate statements of net assets and accompanying notes for further
information.
At December 31,
2006 and 2005, the Plan’s interest in the net assets of the Trust was
approximately 67% and 68% for each of the years respectively.
NOTE
3 - TERMINATION OF PLAN
The Plan may be
terminated at any time by the Company. In the event of such
termination, the interest of all participants becomes fully vested and no part
of any such participant's accounts shall be thereafter forfeited for any reason
whatsoever. Presently, there is no intention on the part of the
Company to terminate the Plan or to discontinue contributions to the
Plan.
NOTE
4 - TAX STATUS
The Plan received a
favorable determination letter from the IRS dated June 27, 2002 qualifying the
Plan for exemption from income taxes under the Internal Revenue Code, as the
Plan was then designed. The Plan has been amended since receiving the
determination letter; however, the Company and the Plan’s ERISA counsel believe
that the Plan is designed and is currently being operated in compliance with
applicable regulations of the Internal Revenue Code.
NOTE
5 – RISKS AND UNCERTAINTIES
The Plan invests in
various investment securities through its interest in the Peoples Energy
Corporation Employee Capital Accumulation and Thrift
Trust. Investment securities are exposed to various risks such as
interest rate, market, and credit risks. Due to the level of risk
associated with certain investment securities, it is at least reasonably
possible that changes in the values of the Trust investment securities will
occur in the near term and that such changes could materially affect the amounts
reported in the statement of net assets.
PEOPLES
ENERGY CORPORATION
EMPLOYEE
CAPITAL ACCUMULATION PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
6 – SUBSEQUENT EVENT
On February 21,
2007, the merger between WPS Resources and Peoples Energy Corporation was
consummated. In connection with the merger, WPS Resources changed its
name to Integrys Energy Group, Inc. Effective with the merger, the
plan sponsor is changed from Peoples Energy Corporation to Integrys Energy
Group, Inc. and the plan administrator is changed from the Peoples Energy
Corporation Retirement & Benefit Plans Committee to the Integrys Energy
Group, Inc. Employee Benefit Administrator Committee.
Effective with the
date of the merger, February 21, 2007, participants are no longer able to direct
contributions into the Company Stock Fund.
NOTE
7 – RESTATEMENT OF BEGINNING NET ASSETS BALANCES
The Capital
Accumulation Plan has restated its previously issued 2006 and 2005 financial
statements to account for the transfers of participants’ account balances
between the Capital Accumulation Plan and the Thrift Plan from prior years,
affecting the net asset allocation between the two Plans. The cumulative effect
of the change in net assets in the 2005 financial statements is to increase the
net assets of the Capital Accumulation Plan by $11,137,133 at January 1, 2005 as
well as to decrease the investment income and net gain allocation by $13,820 for
the year ended December 31, 2005. The net effect of the restatement to the 2006
financial statements is to increase the net assets of the Capital Accumulation
Plan by $11,456,967 at December 31, 2006, including the net effect of decreasing
the investment income and net gain allocation by $123,613 for the year ended
December 31, 2006.
PEOPLES
ENERGY CORPORATION
EMPLOYEE
THRIFT PLAN
Report
of Independent Registered Public Accounting Firm
Employee Benefit
Administrator Committee
Integrys Energy
Group, Inc.
We have audited the
accompanying statement of net assets available for plan benefits of Peoples
Energy Corporation Employee Thrift Plan (the Plan) as of December 31, 2006, and
the related statement of changes in net assets available for plan benefits for
the year then ended. These financial statements are the responsibility of the
Plan’s management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements of the Plan as
of December 31, 2005 were audited by other auditors whose report dated April 6,
2006 expressed an unqualified opinion on those statements.
We conducted our
audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the
financial statements referred to above present fairly, in all material respects,
the net assets available for plan benefits of Peoples Energy Corporation
Employee Thrift Plan as of December 31, 2006, and the changes in its net assets
available for plan benefits for the year then ended in conformity with
accounting principles generally accepted in the United States of
America.
/s/ Hill,
Taylor LLC
June 20, 2007, except for Note
7,
as to which the
date is March 26, 2008
PEOPLES
ENERGY CORPORATION
|
|
EMPLOYEE
THRIFT PLAN
|
|
STATEMENTS
OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
|
|
AS
OF DECEMBER 31, 2006 AND 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
2006
|
|
|
2005
|
|
|
|
|
|
|
|
|
PARTICIPANT
LOANS
|
|
$ |
4,179,274
|
|
|
$ |
4,169,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PLAN INTEREST
IN PEOPLES ENERGY CORPORATION
|
|
|
|
|
|
|
|
|
EMPLOYEE
CAPITAL ACCUMULATION AND THRIFT
|
|
|
|
|
|
|
|
|
TRUST, AT
MARKET VALUE
|
|
|
76,638,920
|
|
|
|
68,367,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS AVAILABLE FOR PLAN BENEFITS, As Restated
|
|
$ |
80,818,194
|
|
|
$ |
72,537,867
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
|
|
|
|
|
PEOPLES
ENERGY CORPORATION
|
EMPLOYEE
THRIFT PLAN
|
STATEMENTS
OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN
BENEFITS
|
FOR
THE YEARS ENDED DECEMBER 31, 2006 AND 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006
|
|
|
2005
|
|
ADDITIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions:
|
|
|
|
|
|
|
Employee
Contributions
|
|
$ |
3,037,482
|
|
|
$ |
2,950,098
|
|
Employer
Contributions
|
|
|
1,300,365
|
|
|
|
1,412,831
|
|
Rollover
Contributions
|
|
|
-
|
|
|
|
54,156
|
|
Total
Contributions
|
|
|
4,337,847
|
|
|
|
4,417,085
|
|
|
|
|
|
|
|
|
|
|
Income from
Investments:
|
|
|
|
|
|
|
|
|
Dividend
Income
|
|
|
956,405
|
|
|
|
259,010
|
|
Interest
Income
|
|
|
266,512
|
|
|
|
263,602
|
|
Total Income
from Investments
|
|
|
1,222,917
|
|
|
|
522,612
|
|
|
|
|
|
|
|
|
|
|
Loan
Payments:
|
|
|
|
|
|
|
|
|
Interest
|
|
|
267,500
|
|
|
|
238,620
|
|
|
|
|
|
|
|
|
|
|
Net
Gain:
|
|
|
|
|
|
|
|
|
Net
Unrealized Appreciation (Depreciation)
|
|
|
3,624,256
|
|
|
|
(919,969 |
) |
Net Realized
Gains
|
|
|
4,449,469
|
|
|
|
1,705,523
|
|
Total Net
Gain
|
|
|
8,073,725
|
|
|
|
785,554
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ADDITIONS
|
|
|
13,901,989
|
|
|
|
5,963,871
|
|
|
|
|
|
|
|
|
|
|
DEDUCTIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Withdrawals
|
|
|
5,586,303
|
|
|
|
5,338,593
|
|
|
|
|
|
|
|
|
|
|
Transfer to
Capital Accumulation Plan Arising from Employee Transfers |
|
|
35,359 |
|
|
|
421,908 |
|
|
|
|
|
|
|
|
|
|
TOTAL
DEDUCTIONS
|
|
|
5,621,662
|
|
|
|
5,760,501
|
|
|
|
|
|
|
|
|
|
|
Net Increase
in Assets During the Year
|
|
|
8,280,327
|
|
|
|
203,370
|
|
|
|
|
|
|
|
|
|
|
Net Assets -
Beginning of Year, As Restated
|
|
|
72,537,867
|
|
|
|
72,334,497
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS - END OF YEAR
|
|
$ |
80,818,194
|
|
|
$ |
72,537,867
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes to financial statements are an integral part of these
statements.
|
|
PEOPLES
ENERGY CORPORATION
EMPLOYEE
THRIFT PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
1 - DESCRIPTION OF PLAN
The following is a
brief description of the Peoples Energy Corporation Employee Thrift Plan (the
Plan). More complete information may be found in the plan
document.
The Plan is a
defined contribution plan and includes those employees of the subsidiaries of
Peoples Energy Corporation who are covered by a collective bargaining agreement
which makes the Plan applicable to such employees. Subsidiary
companies include The Peoples Gas Light and Coke Company and North Shore Gas
Company. The effective date of the Plan is January 1,
1977. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). In 2005 the Plan was
amended to reduce from $5,000 to $1,000 the maximum participant balance subject
to automatic lump-sum distribution upon termination of service.
All employees who
have completed one year of service with an employer, as defined in the Plan and
who have worked at least 1,000 hours during the year, are eligible to
participate in the Plan. Participants may elect to make contributions
and designate such amounts as tax deferred contributions, after tax
contributions or a combination of both. For participant contributions
of up to 6% of their regular rate of pay, the employer contributes a matching
amount equal to 60% of the employee's regular contributions. The
employer matching contributions are invested in the same manner that the
employee contributions are invested. Participants may also elect to
make additional contributions (supplemental contributions) of up to 10% of their
regular rate of pay; these contributions are not matched by the
employer. Participants age 50 years and older are allowed to
contribute an additional pre-tax catch-up contribution according to Internal
Revenue Service (IRS) guidelines and the Economic Growth and Tax Relief
Reconciliation Act of 2001 provisions. Participants may also
contribute amounts representing rollovers from other qualified defined benefit
or defined contribution plans.
Participants direct
the investment of their contributions into various investment options offered by
the Plan. The Plan currently offers the following eleven investment
options: Money Market Fund; Short Term Bond Fund; Bond Fund; Balanced Fund;
S&P 500 Equity Fund; S&P 500 Growth Fund; S&P 500 Value Fund; MidCap
Equity Fund; Small Cap Equity Fund; Foreign Equity Fund; and Company Stock
Fund. Effective February 21, 2007, participants are no longer able to
direct contributions into the Company Stock Fund.
PEOPLES
ENERGY CORPORATION
EMPLOYEE
THRIFT PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
1 - DESCRIPTION OF PLAN (Continued)
Each participant’s
account is maintained in the Plan and is credited with the participant’s
contributions and allocations of (a) the Company’s contribution and (b) Plan
earnings, and charged with an allocation of administrative
expenses. Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is entitled
is the benefit that can be provided from the participant’s vested
account.
Active participants
are permitted to elect to take up to two loans from their accounts. Participants
may borrow from their fund accounts from a minimum of $500 to a maximum of the
lesser of (a) $50,000 less the highest outstanding loan balance for one year
preceding such loan or, (b) one half of the value of the vested balance in their
account as of the last day of the month preceding the loan application
date. Loans may be for five years for non-residential loans or up to
15 years for residential loans. The loans are secured by balances in
the participant's accounts and bear interest equal to the prime rate on the
first day of the month in which the loan was applied for, plus 1 percentage
point.
Participants are
fully vested in their own contribution account at all times and generally become
vested in the employer's contribution account at the earlier of (a) completion
of at least 104 participation periods, as defined in the Plan, or (b)
termination of service after attaining age 55 or by reason of death, retirement
or total disability. Participants with less than 104 participation
periods completed are deemed to be 25, 50 or 75 percent vested in the employer's
contribution account based on the number of completed participation
periods.
For termination of
service due to death, disability, or retirement, a participant may elect to
receive either a lump sum amount equal to the value of the participant’s vested
interest in his or her account, or annual installments over a 15-year
period. For termination of service for other reasons, a participant
may receive the value of the vested interest in his or her account as a lump sum
distribution.
Each participant
whose employment with all employers is terminated is entitled to a distribution
of the entire balance in his or her account and the vested portion of the
employer contribution account within 90 days after termination, unless the
employee elects to defer the distribution under the terms of the
Plan. Active participants are permitted to elect in-service and
retirement planning withdrawals under the Plan provisions.
PEOPLES
ENERGY CORPORATION
EMPLOYEE
THRIFT PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
1 - DESCRIPTION OF PLAN (Continued)
In 2006 and 2005
forfeited non-vested accounts totaled $2,066 and $8,539,
respectively. These accounts would have been or will be used to
reduce employer contributions to the Plan.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the
Plan's significant accounting policies consistently applied in the preparation
of the accompanying financial statements is as follows:
The accounts of the
Plan are maintained on the accrual basis of accounting. Reference is
made to the separate Statements of Net Assets Held in Trust and accompanying
notes of the Peoples Energy Corporation Employee Capital Accumulation and Thrift
Trust (the Trust) for further information on the accounting for Trust
investments and transactions.
The cost of
recordkeeping, trustee, and investment management services are allocated to Plan
participants based upon account balances. Such allocated costs are
paid by participants through reduced investment earnings. Peoples
Energy Corporation provides certain administrative and accounting services to
the Plan at no cost and also pays the cost of services provided to the Plan by
the independent auditors.
The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
changes therein, and disclosure of contingent assets and liabilities at the date
of the financial statements. Accordingly, actual results could differ
from those estimates.
Employee
contributions become payable to the Plan on the pay date on which the
contribution is deducted from the employee's pay.
The employer
contribution is required to be paid to the Trust during or as soon as possible
after the end of each month as is reasonably practicable.
PEOPLES
ENERGY CORPORATION
EMPLOYEE
THRIFT PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e.
|
Investment
Policy and Allocation of Earnings on
Investments
|
Contributions
received by the Plan are invested the same day by the Trust maintained by The
Northern Trust Company into each participant’s
account. Earnings are posted daily to each such
account.
Funds received by
the Plan are invested by the Trust maintained by Northern Trust. The
funds in the Plan are commingled with the funds of the Peoples Energy
Corporation Employee Capital Accumulation Plan to obtain the economies available
when larger amounts are available for investment. Reference is made
to the Trust separate statements of net assets and accompanying notes for
further information.
At December 31,
2006 and 2005, the Plan’s interest in the net assets of the Trust was
approximately 33% and 32% for each of the years respectively.
NOTE
3 - TERMINATION OF PLAN
The Plan may be
terminated at any time by the Company. In event of such termination,
the interest of all participants becomes fully vested and no part of any such
participant's accounts shall be thereafter forfeited for any reason
whatsoever. Presently, there is no intention on the part of the
Company to terminate the Plan or to discontinue contributions to the
Plan.
NOTE
4 - TAX STATUS
The Plan received a
favorable determination letter from the IRS dated June 27, 2002 qualifying the
Plan for exemption from income taxes under the Internal Revenue Code, as the
Plan was then designed. The Plan has been amended since receiving the
determination letter; however, the Company and the Plan’s ERISA counsel believe
that the Plan is designed and is currently being operated in compliance with
applicable regulations of the Internal Revenue Code.
NOTE
5 – RISKS AND UNCERTAINTIES
The Plan invests in
various investment securities through its interest in the Peoples Energy
Corporation Employee Capital Accumulation and Thrift
Trust. Investment securities are exposed to various risks such as
interest rate, market, and credit risks. Due to the level of risk
associated with certain investment securities, it is at least reasonably
possible that changes in the values of the Trust investment securities will
occur in the near term and that such changes could materially affect the amounts
reported in the statement of net assets.
PEOPLES
ENERGY CORPORATION
EMPLOYEE
THRIFT PLAN
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2006 and 2005
NOTE
6 – SUBSEQUENT EVENT
On February 21,
2007, the merger between WPS Resources and Peoples Energy Corporation was
consummated. In connection with the merger, WPS Resources changed its
name to Integrys Energy Group, Inc. Effective with the merger, the
plan sponsor is changed from Peoples Energy Corporation to Integrys Energy
Group, Inc. and the plan administrator is changed from the Peoples Energy
Corporation Retirement & Benefit Plans Committee to the Integrys Energy
Group, Inc. Employee Benefit Administrator Committee.
Effective with the
date of the merger, February 21, 2007, participants are no longer able to
contribute to the Company Stock Fund.
NOTE
7 – RESTATEMENT OF BEGINNING NET ASSETS BALANCES
The Thrift Plan has
restated its previously issued 2006 and 2005 financial statements to account for
the transfers of participants’ account balances between the Capital Accumulation
Plan and the Thrift Plan from prior years, affecting the net asset allocation
between the two Plans. The cumulative effect of the change in net assets in the
2005 financial statements is to decrease the net assets of the Thrift Plan by
$11,137,133 at January 1, 2005 as well as to increase the investment income and
net gain allocation by $13,820 for the year ended December 31, 2005. The net
effect of the restatement to the 2006 financial statements is to decrease the
net assets of the Thrift Plan by $11,456,967 at December 31, 2006, including the
net effect of increasing the investment income and net gain allocation by
$123,613 for the year ended December 31, 2006.
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Retirement and Benefit Plans Committee of
Peoples Energy Corporation, as administrator of the plans designated below, has
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized, this 1st day of April 2008.
PEOPLES ENERGY
CORPORATION
EMPLOYEE CAPITAL
ACCUMULATION PLAN AND
PEOPLES ENERGY
CORPORATION
EMPLOYEE THRIFT
PLAN
PLAN
ADMINISTRATOR
/s/
Diane L.
Ford
Diane L.
Ford
Member Plan
Administrator Committee
/s/
William J.
Guc
William J.
Guc
Member Plan
Administrator Committee
/s/
Bradley A.
Johnson
Bradley A.
Johnson
Member Plan
Administrator Committee
/s/
Thomas A.
Nardi
Thomas A.
Nardi
Member Plan
Administrator Committee
/s/
Joseph P.
O'Leary
Joseph P.
O'Leary
Member Plan
Administrator Committee
/s/
Bernard J.
Treml
Bernard J.
Treml
Member Plan
Administrator Committee
EXHIBIT
INDEX
The exhibit listed below is filed
herewith and made a part hereof.
Exhibit
|
|
|
Number
|
|
|
|
|
|
23
|
|
Consent of
Independent Public Accountants
|