<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) August 25, 1995
WISCONSIN ELECTRIC POWER COMPANY
(Exact name of registrant as specified in its charter)
1-1245
(Commission file number)
Wisconsin 39-0476280
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
231 West Michigan Street, P.O. Box 2046, Milwaukee, Wisconsin 53201
(Address of principal executive offices) (Zip Code)
(414) 221-2345
(Registrant's telephone number, including area code)
NOT APPLICABLE
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
FORM 8-K
WISCONSIN ELECTRIC POWER COMPANY
--------------------------------
ITEM 5. OTHER EVENTS
WISCONSIN RETAIL RATE MATTERS
1996 Test Year: On March 27, 1995, Wisconsin Electric Power Company ("WE")
and Wisconsin Natural Gas Company ("WN") sent a letter to the Public Service
Commission of Wisconsin ("PSCW") proposing a one year deferral of their
scheduled rate case filing for the 1996 test year, leaving existing electric,
gas and steam rates in effect. On May 1, 1995, WE and WN filed with the PSCW
required data related to the 1996 test year. This was an abbreviated filing
since no increase in rates was requested. The Citizens' Utility Board ("CUB")
filed a petition seeking a reduction in rates of $100 million and a hearing on
the companies' request for a freeze on rates in 1996. Other parties filed
requests for full hearings on all or part of the filing. The companies
opposed the petition. At the PSCW's open meeting on August 21, 1995, the PSCW
determined that the electric, gas and steam rates for 1996 should be decreased
from current levels. The dollar impacts and percentage decreases for
electric, gas and steam rates are approximately $33 million (2.75%), $8
million (2.6%) and $0.8 million (5.1%), respectively, on an annualized basis.
This determination will not take effect until after it is reduced to a written
order issued by the PSCW. Such an order is expected before year-end.
MERGER AGREEMENT WITH NORTHERN STATES POWER COMPANY
As previously reported, on April 28, 1995, Wisconsin Energy Corporation
("WEC"), WE's parent company, and Northern States Power Company, a Minnesota
corporation ("NSP"), entered into an Agreement and Plan of Merger, which was
amended and restated as of July 26, 1995 (the "Merger Agreement"). The Merger
Agreement provides for a strategic business combination involving WEC and NSP
in a "merger-of-equals" transaction. As a result, WEC will become a
registered public utility holding company under the Public Utility Holding
Company Act of 1935, as amended, and will change its name to Primergy
Corporation ("Primergy"). Primergy will be the parent company of NSP (which,
for regulatory reasons, will reincorporate in Wisconsin ("New NSP")), of WE
(which will be renamed Wisconsin Energy Company) and of the other subsidiaries
of WEC and NSP. The business combination is intended to be tax-free for
income tax purposes and to be accounted for as a "pooling of interests".
Subject to obtaining all requisite approvals, WEC and NSP anticipate
completing this business combination late in 1996.
Wisconsin Energy Company will include the operations of WN, the wholly owned
gas utility subsidiary of WEC, which WEC intends to merge into WE to form a
single combined utility subsidiary, as previously planned. Completion of the
planned merger of WN into WE is expected to occur by January 1, 1996.
Northern States Power Company, a Wisconsin corporation ("NSP-WI"), currently a
wholly owned subsidiary of NSP, will also be merged into Wisconsin Energy
Company in connection with the transactions contemplated by the Merger
Agreement. Prior to the merger of NSP-WI into Wisconsin Energy Company, New
NSP will acquire certain gas utility assets in LaCrosse and Hudson, Wisconsin
from NSP-WI.
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<PAGE> 3
FORM 8-K
WISCONSIN ELECTRIC POWER COMPANY
--------------------------------
ITEM 5. OTHER EVENTS (Cont'd)
MERGER AGREEMENT WITH NORTHERN STATES POWER COMPANY (Cont'd)
WEC and NSP recognize that the divestiture of their existing gas operations
and certain non-utility operations is a possibility under the new registered
holding company structure contemplated by the Merger Agreement, but will seek
approval from the Securities and Exchange Commission ("SEC") to maintain such
businesses. If divestiture is ultimately required, the SEC has historically
allowed companies sufficient time to accomplish divestitures in a manner that
protects shareholder value.
Further information related to the Merger Agreement was previously reported in
WEC's Current Report on Form 8-K dated as of April 28, 1995 and in WEC's and
WE's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995 and
June 30, 1995. Detailed information with respect to the Merger Agreement and
the transactions contemplated thereby is contained in the Joint Proxy
Statement/Prospectus dated August 7, 1995 (contained in WEC's Registration
Statement on Form S-4, Registration No. 33-61619) which relates to the
meetings of the shareholders of WEC and NSP to vote on the Merger Agreement
and related matters.
DRY CASK STORAGE MATTER - POINT BEACH NUCLEAR POWER PLANT
On August 24, 1995, the Citizens' Utility Board and other parties mailed WE
and the Wisconsin Department of Natural Resources ("WDNR") with a formal
"Notice of Intent to Sue" stating they would commence a citizens suit premised
on an alleged failure of WE to obtain WDNR approval under Wisconsin's high
level nuclear waste law prior to doing borings in connection with its dry cask
storage facility at Point Beach.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements and pro forma financial information are
provided in connection with the pending business combinations discussed in
Item 5 above.
(a) FINANCIAL STATEMENTS OF WN AND NSP-WI
The financial statements of WN listed in the descriptions of Exhibits (99)-1
and (99)-2 in paragraph (c) of this Item 7 are incorporated herein by
reference. The audited financial statements so listed are included in Item 8
of WN's Annual Report on Form 10-K for the fiscal year ended December 31, 1994
(File No. 2-2066). The unaudited interim financial statements so listed are
included in Item 1 in Part I of WN's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995 (File No. 2-2066).
The financial statements of NSP-WI listed in the descriptions of Exhibits
(99)-3 and (99)-4 in paragraph (c) of this Item 7 are incorporated herein by
reference. The audited financial statements so listed are included in Item 8
of NSP-WI's Annual Report on Form 10-K for the fiscal year ended December 31,
1994 (File No. 10-3140). The unaudited interim financial statements so listed
are included in Item 1 in Part I of NSP-WI's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1995 (File No. 10-3140).
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<PAGE> 4
FORM 8-K
WISCONSIN ELECTRIC POWER COMPANY
--------------------------------
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Cont'd)
(b) UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
The following unaudited pro forma financial information combines the
historical balance sheets and statements of income of WE, WN, and NSP-WI. The
unaudited pro forma combined condensed balance sheets at June 30, 1995 give
effect to the proposed business combinations as if such business combinations
had occurred at June 30, 1995. The unaudited pro forma combined condensed
statements of income for each of the three years ended in the period ended
December 31, 1994 and the twelve months ended June 30, 1995 give effect to the
proposed business combinations as if they had occurred at January 1, 1992.
These statements are prepared on the basis of accounting for the proposed
business combinations as a pooling of interests and are based on the
assumptions set forth in the notes thereto.
The WE and WN income statements for the fiscal year ended December 31, 1994
include a significant one-time pretax charge of $63.5 million and $10.4
million, respectively, for revitalization costs recorded in the first quarter
of 1994. To provide a more representative twelve-month period summarizing
combined operating results, an unaudited pro forma combined condensed
statement of income for the twelve months ended June 30, 1995 is also
presented.
The following pro forma financial information has been prepared from, and
should be read in conjunction with, the historical financial statements and
related notes thereto of WE, WN and NSP-WI. The following information is not
necessarily indicative of the financial position or operating results that
would have occurred had the proposed business combinations been consummated on
the date, or at the beginning of the periods, for which the proposed business
combinations are being given effect, nor is it necessarily indicative of
future operating results or financial position.
- 4 -
<PAGE> 5
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY FORM 8-K
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
JUNE 30, 1995
(In thousands)
<CAPTION>
WE WN Pro Forma WE
Pro Forma Balance Sheet As Reported As Reported Adjustments Pro Forma
------------------------------------------ -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Assets
Utility Plant
Electric $ 4,598,068 $ - $ - $ 4,598,068
Gas - 475,853 - 475,853
Other 39,700 - - 39,700
------------- ------------- ------------- -------------
Total 4,637,768 475,853 - 5,113,621
Accumulated provision for depreciation (1,994,430) (228,542) - (2,222,972)
Nuclear fuel - net 56,873 - - 56,873
------------- ------------- ------------- -------------
Net Utility Plant 2,700,211 247,311 - 2,947,522
Current Assets 417,413 62,129 - 479,542
Other Assets 765,166 31,595 - 796,761
------------- ------------- ------------- -------------
Total Assets $ 3,882,790 $ 341,035 $ - $ 4,223,825
============= ============= ============= =============
Liabilities and Equity
Capitalization
Common stock equity $ 1,508,480 $ 142,902 $ - $ 1,651,382
Cumulative preferred stock and premium 30,451 - - 30,451
Long-term debt 1,161,122 66,551 - 1,227,673
------------- ------------- ------------- -------------
Total Capitalization 2,700,053 209,453 - 2,909,506
Current Liabilities
Current portion of long-term debt 52,444 - - 52,444
Short-term debt 198,887 13,299 - 212,186
Other 135,064 52,479 - 187,543
------------- ------------- ------------- -------------
Total Current Liabilities 386,395 65,778 - 452,173
Other Liabilities 796,342 65,804 - 862,146
------------- ------------- ------------- -------------
Total Capitalization and Liabilities $ 3,882,790 $ 341,035 $ - $ 4,223,825
============= ============= ============= =============
<FN>
See accompanying notes to unaudited pro forma combined condensed financial statements.
- 5 -
</TABLE>
<PAGE> 6
<TABLE>
NORTHERN STATES POWER COMPANY - WISCONSIN FORM 8-K
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
JUNE 30, 1995
(In thousands)
<CAPTION>
NSP-WI Pro Forma NSP-WI
Pro Forma Balance Sheet As Reported Adjustments As Adjusted
------------------------------------------ -------------- -------------- --------------
(Note 2)
<S> <C> <C> <C>
Assets
Utility Plant
Electric $ 846,685 $ - $ 846,685
Gas 89,329 (30,756) 58,573
Other 57,810 - 57,810
------------- ------------- -------------
Total 993,824 (30,756) 963,068
Accumulated provision for depreciation (358,192) 12,612 (345,580)
Nuclear fuel - net - - -
------------- ------------- -------------
Net Utility Plant 635,632 (18,144) 617,488
Current Assets 68,415 17,021 85,436
Other Assets 50,814 (970) 49,844
------------- ------------- -------------
Total Assets $ 754,861 $ (2,093) $ 752,768
============= ============= =============
Liabilities and Equity
Capitalization
Common stock equity $ 316,709 $ - $ 316,709
Cumulative preferred stock and premium - - -
Long-term debt 213,235 - 213,235
------------- ------------- -------------
Total Capitalization 529,944 - 529,944
Current Liabilities
Current portion of long-term debt - - -
Short-term debt 26,300 - 26,300
Other 44,043 - 44,043
------------- ------------- -------------
Total Current Liabilities 70,343 - 70,343
Other Liabilities 154,574 (2,093) 152,481
------------- ------------- -------------
Total Capitalization and Liabilities $ 754,861 $ (2,093) $ 752,768
============= ============= =============
<FN>
See accompanying notes to unaudited pro forma combined condensed financial statements.
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</TABLE>
<PAGE> 7
<TABLE>
WISCONSIN ENERGY COMPANY FORM 8-K
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
JUNE 30, 1995
(In thousands)
<CAPTION>
Adjusted
WE NSP-WI Pro Forma Pro Forma
Pro Forma Balance Sheet Pro Forma As Adjusted Adjustments Combined
------------------------------------------ -------------- -------------- -------------- --------------
(See Page 5) (See Page 6) (Note 3)
<S> <C> <C> <C> <C>
Assets
Utility Plant
Electric $ 4,598,068 $ 846,685 $ - $ 5,444,753
Gas 475,853 58,573 - 534,426
Other 39,700 57,810 - 97,510
------------- ------------- ------------- -------------
Total 5,113,621 963,068 - 6,076,689
Accumulated provision for depreciation (2,222,972) (345,580) - (2,568,552)
Nuclear fuel - net 56,873 - - 56,873
------------- ------------- ------------- -------------
Net Utility Plant 2,947,522 617,488 - 3,565,010
Current Assets 479,542 85,436 - 564,978
Other Assets 796,761 49,844 (135,518) 711,087
------------- ------------- ------------- -------------
Total Assets $ 4,223,825 $ 752,768 $ (135,518) $ 4,841,075
============= ============= ============= =============
Liabilities and Equity
Capitalization
Common stock equity $ 1,651,382 $ 316,709 $ - $ 1,968,091
Cumulative preferred stock and premium 30,451 - - 30,451
Long-term debt 1,227,673 213,235 - 1,440,908
------------- ------------- ------------- -------------
Total Capitalization 2,909,506 529,944 - 3,439,450
Current Liabilities
Current portion of long-term debt 52,444 - - 52,444
Short-term debt 212,186 26,300 - 238,486
Other 187,543 44,043 - 231,586
------------- ------------- ------------- -------------
Total Current Liabilities 452,173 70,343 - 522,516
Other Liabilities 862,146 152,481 (135,518) 879,109
------------- ------------- ------------- -------------
Total Capitalization and Liabilities $ 4,223,825 $ 752,768 $ (135,518) $ 4,841,075
============= ============= ============= =============
<FN>
See accompanying notes to unaudited pro forma combined condensed financial statements.
- 7 -
</TABLE>
<PAGE> 8
<TABLE>
FORM 8-K
WISCONSIN ENERGY COMPANY
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
12 MONTHS ENDED JUNE 30, 1995
(In thousands)
<CAPTION>
WE WN WE NSP-WI Pro Forma Pro Forma
As Reported As Reported Pro Forma As Reported Adjustments Combined
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Utility Operating Revenues
Electric $ 1,400,244 $ - $ 1,400,244 $ 372,074 $ - $ 1,772,318
Gas - 294,543 294,543 75,468 - 370,011
Steam 13,599 - 13,599 - - 13,599
----------- ----------- ----------- ----------- ----------- -----------
Total Operating Revenues 1,413,843 294,543 1,708,386 447,542 - 2,155,928
Utility Operating Expenses
Electric Production - Fuel
and Purchased Power 329,526 - 329,526 180,006 - 509,532
Cost of Gas Sold
and Transported - 176,412 176,412 50,610 - 227,022
Other Operation 335,733 51,226 386,959 76,933 - 463,892
Maintenance 114,206 5,672 119,878 21,900 - 141,778
Depreciation and Amortization 163,090 17,283 180,373 31,940 - 212,313
Taxes Other Than Income Taxes 66,663 5,495 72,158 13,761 - 85,919
Income Taxes 118,362 11,315 129,677 18,532 - 148,209
----------- ----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,127,580 267,403 1,394,983 393,682 - 1,788,665
----------- ----------- ----------- ----------- ----------- -----------
Utility Operating Income 286,263 27,140 313,403 53,860 - 367,263
Other Income (Expense) 25,147 87 25,234 1,528 - 26,762
----------- ----------- ----------- ----------- ----------- -----------
Income Before Interest Charges
and Preferred Dividends 311,410 27,227 338,637 55,388 - 394,025
Interest Charges 101,401 7,856 109,257 19,171 - 128,428
----------- ----------- ----------- ----------- ----------- -----------
Net Income 210,009 19,371 229,380 36,217 - 265,597
Preferred Dividend
Stock Requirement 1,204 - 1,204 - - 1,204
----------- ----------- ----------- ----------- ----------- -----------
Earnings Available
for Common Stockholder $ 208,805 $ 19,371 $ 228,176 $ 36,217 $ - $ 264,393
=========== =========== =========== =========== =========== ===========
<FN>
See accompanying notes to unaudited pro forma combined condensed financial statements.
- 8 -
</TABLE>
<PAGE> 9
<TABLE>
FORM 8-K
WISCONSIN ENERGY COMPANY
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
12 MONTHS ENDED DECEMBER 31, 1994
(In thousands)
<CAPTION>
WE WN WE NSP-WI Pro Forma Pro Forma
As Reported As Reported Pro Forma As Reported Adjustments Combined
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Utility Operating Revenues
Electric $ 1,403,562 $ - $ 1,403,562 $ 374,777 $ - $ 1,778,339
Gas - 324,349 324,349 76,715 - 401,064
Steam 14,281 - 14,281 - - 14,281
----------- ----------- ----------- ----------- ----------- -----------
Total Operating Revenues 1,417,843 324,349 1,742,192 451,492 - 2,193,684
Utility Operating Expenses
Electric Production - Fuel
and Purchased Power 328,485 - 328,485 179,558 - 508,043
Cost of Gas Sold
and Transported - 199,511 199,511 53,484 - 252,995
Other Operation 344,765 54,246 399,011 77,958 - 476,969
Maintenance 118,138 6,464 124,602 22,385 - 146,987
Depreciation and Amortization 160,758 16,856 177,614 30,736 - 208,350
Taxes Other Than Income Taxes 70,156 5,879 76,035 13,710 - 89,745
Revitalization Charges 63,500 10,400 73,900 - - 73,900
Income Taxes 91,483 8,278 99,761 19,077 - 118,838
----------- ----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,177,285 301,634 1,478,919 396,908 - 1,875,827
----------- ----------- ----------- ----------- ----------- -----------
Utility Operating Income 240,558 22,715 263,273 54,584 - 317,857
Other Income (Expense) 25,216 118 25,334 1,535 - 26,869
----------- ----------- ----------- ----------- ----------- -----------
Income Before Interest Charges
and Preferred Dividends 265,774 22,833 288,607 56,119 - 344,726
Interest Charges 98,829 8,024 106,853 17,574 - 124,427
----------- ----------- ----------- ----------- ----------- -----------
Net Income 166,945 14,809 181,754 38,545 - 220,299
Preferred Dividend
Stock Requirement 1,351 - 1,351 - - 1,351
----------- ----------- ----------- ----------- ----------- -----------
Earnings Available
for Common Stockholder $ 165,594 $ 14,809 $ 180,403 $ 38,545 $ - $ 218,948
=========== =========== =========== =========== =========== ===========
<FN>
See accompanying notes to unaudited pro forma combined condensed financial statements.
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</TABLE>
<PAGE> 10
<TABLE>
FORM 8-K
WISCONSIN ENERGY COMPANY
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
12 MONTHS ENDED DECEMBER 31, 1993
(In thousands)
<CAPTION>
WE WN WE NSP-WI Pro Forma Pro Forma
As Reported As Reported Pro Forma As Reported Adjustments Combined
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Utility Operating Revenues
Electric $ 1,347,844 $ - $ 1,347,844 $ 362,473 $ - $ 1,710,317
Gas - 331,301 331,301 72,760 - 404,061
Steam 14,090 - 14,090 - - 14,090
----------- ----------- ----------- ----------- ----------- -----------
Total Operating Revenues 1,361,934 331,301 1,693,235 435,233 - 2,128,468
Utility Operating Expenses
Electric Production - Fuel
and Purchased Power 318,265 - 318,265 165,695 - 483,960
Cost of Gas Sold
and Transported - 214,132 214,132 51,501 - 265,633
Other Operation 341,748 57,387 399,135 76,749 - 475,884
Maintenance 149,247 6,838 156,085 21,703 - 177,788
Depreciation and Amortization 150,831 16,235 167,066 28,585 - 195,651
Taxes Other Than Income Taxes 68,969 5,684 74,653 13,091 - 87,744
Income Taxes 90,037 8,426 98,463 23,103 - 121,566
----------- ----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,119,097 308,702 1,427,799 380,427 - 1,808,226
----------- ----------- ----------- ----------- ----------- -----------
Utility Operating Income 242,837 22,599 265,436 54,806 - 320,242
Other Income (Expense) 28,913 201 29,114 1,538 - 30,652
----------- ----------- ----------- ----------- ----------- -----------
Income Before Interest Charges
and Preferred Dividends 271,750 22,800 294,550 56,344 - 350,894
Interest Charges 93,825 8,645 102,470 18,338 - 120,808
----------- ----------- ----------- ----------- ----------- -----------
Net Income 177,925 14,155 192,080 38,006 - 230,086
Preferred Dividend
Stock Requirement 4,377 - 4,377 - - 4,377
----------- ----------- ----------- ----------- ----------- -----------
Earnings Available
for Common Stockholder $ 173,548 $ 14,155 $ 187,703 $ 38,006 $ - $ 225,709
=========== =========== =========== =========== =========== ===========
<FN>
See accompanying notes to unaudited pro forma combined condensed financial statements.
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</TABLE>
<PAGE> 11
<TABLE>
FORM 8-K
WISCONSIN ENERGY COMPANY
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
12 MONTHS ENDED DECEMBER 31, 1992
(In thousands)
<CAPTION>
WE WN WE NSP-WI Pro Forma Pro Forma
As Reported As Reported Pro Forma As Reported Adjustments Combined
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Utility Operating Revenues
Electric $ 1,298,723 $ - $ 1,298,723 $ 345,289 $ - $ 1,644,012
Gas - 283,699 283,699 61,071 - 344,770
Steam 13,093 - 13,093 - - 13,093
----------- ----------- ----------- ----------- ----------- -----------
Total Operating Revenues 1,311,816 283,699 1,595,515 406,360 - 2,001,875
Utility Operating Expenses
Electric Production - Fuel
and Purchased Power 330,461 - 330,461 158,230 - 488,691
Cost of Gas Sold
and Transported - 177,947 177,947 41,814 - 219,761
Other Operation 318,253 48,767 367,020 69,080 - 436,100
Maintenance 143,618 6,844 150,462 21,806 - 172,268
Depreciation and Amortization 148,967 15,400 164,367 26,832 - 191,199
Taxes Other Than Income Taxes 68,380 5,334 73,714 12,925 - 86,639
Income Taxes 82,141 7,697 89,838 22,184 - 112,022
----------- ----------- ----------- ----------- ----------- -----------
Total Operating Expenses 1,091,820 261,989 1,353,809 352,871 - 1,706,680
----------- ----------- ----------- ----------- ----------- -----------
Utility Operating Income 219,996 21,710 241,706 53,489 - 295,195
Other Income (Expense) 25,350 373 25,723 2,268 - 27,991
----------- ----------- ----------- ----------- ----------- -----------
Income Before Interest Charges
and Preferred Dividends 245,346 22,083 267,429 55,757 - 323,186
Interest Charges 83,604 7,875 91,479 17,557 - 109,036
----------- ----------- ----------- ----------- ----------- -----------
Net Income 161,742 14,208 175,950 38,200 - 214,150
Preferred Dividend
Stock Requirement 5,916 - 5,916 - - 5,916
----------- ----------- ----------- ----------- ----------- -----------
Earnings Available
for Common Stockholder $ 155,826 $ 14,208 $ 170,034 $ 38,200 $ - $ 208,234
=========== =========== =========== =========== =========== ===========
<FN>
See accompanying notes to unaudited pro forma combined condensed financial statements.
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</TABLE>
<PAGE> 12
FORM 8-K
WISCONSIN ENERGY COMPANY
------------------------------------------
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
1. The pro forma combined condensed financial statements reflect the
previously planned merger by WEC of WN into WE to form a single
combined utility subsidiary. Completion of the planned merger is
expected to occur by January 1, 1996.
As previously reported, on April 28, 1995, WEC, WE's parent company,
and NSP entered into a Merger Agreement, which was amended and
restated as of July 26, 1995. The Merger Agreement provides for a
strategic business combination involving WEC and NSP in a "merger-of-
equals" transaction. As a result, WEC will become a registered public
utility holding company under the Public Utility Holding Company Act
of 1935, as amended, and will change its name to Primergy. Primergy
will be the parent company of NSP, WE (which will be renamed Wisconsin
Energy Company) and the other subsidiaries of WEC and NSP. The
business combination is intended to be tax-free for income tax
purposes and to be accounted for as a "pooling of interests". Subject
to obtaining all requisite approvals, WEC and NSP anticipate
completing this business combination late in 1996.
As part of this proposed merger, the pro forma combined condensed
financial statements reflect the merger of NSP-WI, currently a wholly
owned subsidiary of NSP, into Wisconsin Energy Company. Prior to the
merger of NSP-WI into Wisconsin Energy Company, New NSP will acquire
certain gas utility assets in LaCrosse and Hudson, Wisconsin from
NSP-WI.
2. A pro forma adjustment has been made in the NSP-WI Unaudited Pro Forma
Condensed Balance Sheet at June 30, 1995 to reflect the sale at net book
value of the gas utility assets and liabilities of NSP-WI divisions in
LaCrosse and Hudson, Wisconsin to New NSP.
3. A pro forma adjustment has been made in the Wisconsin Energy Company
Unaudited Pro Forma Combined Condensed Balance Sheet at June 30, 1995
to conform the presentation of noncurrent deferred income taxes into
one net amount. All other financial statement presentation and
accounting policy differences are immaterial and have not been
adjusted in the pro forma combined condensed financial statements.
4. Pro forma income statement amounts for Wisconsin Energy Company do not
reflect the transfer of the LaCrosse and Hudson divisions by NSP-WI to
New NSP. The revenues related to those divisions for the twelve
months ended June 30, 1995 and for the twelve months ended
December 31, 1994, 1993 and 1992 were $26,779,000, $28,028,000,
$27,289,000 and $23,298,000, respectively. The amount of related
expenses have not been quantified.
5. Intercompany transactions (including purchased power and exchanged
power transactions) between WE and NSP-WI during the periods presented
were not material and, accordingly, no pro forma adjustments were made
to eliminate such transactions.
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<PAGE> 13
FORM 8-K
WISCONSIN ENERGY COMPANY
------------------------------------------
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS (Cont'd)
6. The allocation between NSP and WEC and their customers of the
estimated cost savings resulting from the transactions contemplated by
the Merger Agreement, net of the costs incurred to achieve such
savings, will be subject to regulatory review and approval.
Transaction costs are currently estimated to be approximately
$30,000,000 (including fees for financial advisors, attorneys,
accountants, consultants, filings and printing). None of these
estimated cost savings, the costs to achieve such savings, or
transaction costs have been reflected in the pro forma combined
condensed financial statements.
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<PAGE> 14
FORM 8-K
WISCONSIN ELECTRIC POWER COMPANY
--------------------------------
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (Cont'd)
(c)EXHIBITS.
The following Exhibits are filed with this report:
(23)-1 Consent of Price Waterhouse LLP, WN's independent
accountants, dated August 25, 1995.
(23)-2 Consent of Deloitte & Touche LLP, NSP-WI's independent
accountants, dated August 25, 1995.
The following Exhibits are incorporated herein by reference:
(2)-1 Amended and Restated Agreement and Plan of Merger, dated
as of April 28, 1995, as amended and restated as of
July 26, 1995, by and among NSP, WEC, Northern Power
Wisconsin Corp. and WEC Sub Corp. (Exhibit (2)-1 to
WEC's Registration Statement on Form S-4, Registration
No. 33-61619; other related documents are also filed as
exhibits to such registration statement.)
(99)-1 Audited Financial Statements of WN at December 31, 1994
and 1993 and for each of the three years in the period
ended December 31, 1994. (Item 8 of WN's Annual Report
on Form 10-K for the fiscal year ended December 31,
1994, File No. 2-2066.)
(99)-2 Unaudited Interim Financial Statements of WN at June 30,
1995 and for the three and six month periods ended
June 30, 1995 and 1994. (Item 1 in Part I of WN's
Quarterly Report on Form 10-Q for the Quarter ended
June 30, 1995, File No. 2-2066.)
(99)-3 Audited Financial Statements of NSP-WI at December 31,
1994 and 1993 and for each of the three years in the
period ended December 31, 1994. (Item 8 of NSP-WI's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, File No. 10-3140.)
(99)-4 Unaudited Interim Financial Statements of NSP-WI at
June 30, 1995 and for the three and six month periods
ended June 30, 1995 and 1994. (Item 1 in Part I of NSP-
WI's Quarterly Report on Form 10-Q for the Quarter ended
June 30, 1995, File No. 10-3140.)
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<PAGE> 15
FORM 8-K
WISCONSIN ELECTRIC POWER COMPANY
--------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WISCONSIN ELECTRIC POWER COMPANY
--------------------------------------
(Registrant)
/s/C. H. Baker
------------------------------------------
Date: August 25, 1995 C. H. Baker, Vice President - Finance
- 15 -
<PAGE> 16
FORM 8-K
WISCONSIN ELECTRIC POWER COMPANY
--------------------------------
EXHIBIT INDEX
(Current Report on Form 8-K dated August 25, 1995)
Exhibit
Number
-------
The following Exhibits are filed with this report:
(23)-1 Consent of Price Waterhouse LLP, WN's independent
accountants, dated August 25, 1995.
(23)-2 Consent of Deloitte & Touche LLP, NSP-WI's independent
accountants, dated August 25, 1995.
The following Exhibits are incorporated herein by reference:
(2)-1 Amended and Restated Agreement and Plan of Merger, dated
as of April 28, 1995, as amended and restated as of
July 26, 1995, by and among NSP, WEC, Northern Power
Wisconsin Corp. and WEC Sub Corp. (Exhibit (2)-1 to
WEC's Registration Statement on Form S-4, Registration
No. 33-61619; other related documents are also filed as
exhibits to such registration statement.)
(99)-1 Audited Financial Statements of WN at December 31, 1994
and 1993 and for each of the three years in the period
ended December 31, 1994. (Item 8 of WN's Annual Report
on Form 10-K for the fiscal year ended December 31,
1994, File No. 2-2066.)
(99)-2 Unaudited Interim Financial Statements of WN at June 30,
1995 and for the three and six month periods ended
June 30, 1995 and 1994. (Item 1 in Part I of WN's
Quarterly Report on Form 10-Q for the Quarter ended
June 30, 1995, File No. 2-2066.)
(99)-3 Audited Financial Statements of NSP-WI at December 31,
1994 and 1993 and for each of the three years in the
period ended December 31, 1994. (Item 8 of NSP-WI's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, File No. 10-3140.)
(99)-4 Unaudited Interim Financial Statements of NSP-WI at
June 30, 1995 and for the three and six month periods
ended June 30, 1995 and 1994. (Item 1 in Part I of NSP-
WI's Quarterly Report on Form 10-Q for the Quarter ended
June 30, 1995, File No. 10-3140.)
- 16 -
<PAGE> 1
Exhibit (23)-1
(8/25/95 8-K)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Form S-3 (Nos. 33-49199
and 33-51749) of Wisconsin Electric Power Company of our report dated
January 25, 1995 appearing on page 25 in Item 8 of Wisconsin Natural Gas
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1994 (File No. 2-2066), which Annual Report on Form 10-K is incorporated by
reference in this Current Report on Form 8-K of Wisconsin Electric Power
Company dated August 25, 1995.
/s/ Price Waterhouse LLP
------------------------
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
August 25, 1995
- 1 -
<PAGE> 1
Exhibit (23)-2
(8/25/95 8-K)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statements
and Prospectuses on Form S-3 (Nos. 33-49199 and 33-51749) of Wisconsin
Electric Power Company (through the incorporation thereof in Wisconsin
Electric Power Company's Current Report on Form 8-K dated August 25, 1995) of
our report dated January 27, 1995, appearing on page 17 in Item 8 of the
Annual Report on Form 10-K of Northern States Power Company (Wisconsin) for
the fiscal year ended December 31, 1994 (File No. 10-3140).
/s/ Deloitte & Touche LLP
-------------------------
DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
August 25, 1995
- 1 -
