SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Current Report On
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
NOVEMBER 30, 1999
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Commission Registrant; State of Incorporation IRS Employer
File Number Address; and Telephone Number Identification No.
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1-9057 WISCONSIN ENERGY CORPORATION 39-1391525
(A Wisconsin Corporation)
231 West Michigan Street
P.O. Box 2949
Milwaukee, WI 53201
(414) 221-2345
1-1245 WISCONSIN ELECTRIC POWER COMPANY 39-0476280
(A Wisconsin Corporation)
231 West Michigan Street
P.O. Box 2046
Milwaukee, WI 53201
(414) 221-2345
FORM 8-K
WISCONSIN ENERGY CORPORATION
WISCONSIN ELECTRIC POWER COMPANY
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ITEM 5. OTHER EVENTS
GIDDINGS & LEWIS INC./ CITY OF WEST ALLIS LAWSUIT
As previously reported, iron-cyanide-bearing wastes were found at two sites
in West Allis, Wisconsin. One site is on property formerly owned by
Kearney & Trecker Corporation, now a part of Giddings & Lewis Inc. The
other site is owned by the City of West Allis. Environmental remediation
at both sites was completed several years ago, with the current owners
paying for disposal of materials found on their respective portions of the
sites.
On July 25, 1996, Giddings & Lewis, Kearney & Trecker and the City of West
Allis filed an action for damages in the Milwaukee County Circuit Court
against Wisconsin Electric Power Company, the wholly owned, principal
subsidiary of Wisconsin Energy Corporation, alleging that Wisconsin
Electric was responsible for depositing the material in 1959 and therefore
liable to the plaintiffs. Investigations into the potential source of the
waste led Wisconsin Electric to believe that it was not the source of this
waste.
On July 14, 1999, a Milwaukee County Circuit Court jury issued a verdict
against Wisconsin Electric in the lawsuit that awarded the plaintiffs
$4.5 million as actual damages for clean-up costs and loss of property
value and also awarded the plaintiffs $100 million in punitive damages. On
October 6, 1999, the Wisconsin trial court judge denied Wisconsin
Electric's post trial motions and directed that judgment on the verdict be
entered. On November 12, 1999, Wisconsin Electric filed a notice of appeal
of the case to the Wisconsin Court of Appeals.
By statute under Wisconsin law, interest at the rate of 12% per annum
accrues until the funds are tendered or until the judgment is reversed. If
funds are tendered during the pendency of an appeal, Wisconsin law further
provides that upon reversal or reduction of the judgment there shall be
restitution with interest of the applicable amount of any funds tendered.
In order to stop the accrual of interest at 12% during the pendency of the
appeal, Wisconsin Electric filed a motion with the trial court on
November 12, 1999 requesting that Wisconsin Electric be permitted to tender
the funds to the court pursuant to a stay of execution providing
appropriate security for the funds during the pendency of the appeal. That
motion was denied by the trial court and is being appealed to the Wisconsin
Court of Appeals. In further post-trial proceedings, the plaintiffs in
this lawsuit have filed with the trial court a motion for sanctions.
Wisconsin Electric intends to vigorously defend the allegations and does
not believe that any sanctionable conduct has occurred.
In the opinion of management, based in part on the advice of legal counsel,
the jury verdict was not supported by the evidence or the law and the
unprecedented award of punitive damages of this magnitude was unwarranted
and should therefore be reversed or substantially reduced. As such,
Wisconsin Electric has not established a reserve for potential damages from
this suit.
WISCONSIN INTERNATIONAL ELECTRIC POWER LITIGATION
As previously reported, Wisconsin Electric and Wisconsin International
Electric Power, Ltd. ("WIEP") reached agreement on a settlement in
litigation brought against Wisconsin Electric in March 1998, whereby
Wisconsin Electric paid WIEP $18 million in November 1999 and WIEP's claims
were dismissed with prejudice.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
The following exhibits are filed in the applicable Form 8-K report:
Exhibit No.
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WISCONSIN ENERGY CORPORATION
No exhibits are filed with this report.
WISCONSIN ELECTRIC POWER COMPANY
(12)-1 Statement of Computation of Ratios of Earnings to
Fixed Charges
FORM 8-K
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 ENERGY CORPORATION
(Registrant)
/s/Paul Donovan
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Date: November 30, 1999 Paul Donovan, Senior Vice President,
and Chief Financial Officer
WISCONSIN ELECTRIC POWER COMPANY
(Registrant)
/s/Calvin H. Baker
--------------------------------
Date: November 30, 1999 Calvin H. Baker, Vice President -
Finance and Chief Financial Officer
FORM 8-K
WISCONSIN ELECTRIC POWER COMPANY
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EXHIBIT INDEX
CURRENT REPORT ON FORM 8-K
Dated November 30, 1999
Exhibit
Number
- -------
The following exhibit is filed with this report:
(12)-1 Statement of Computation of Ratios of Earnings to Fixed
Charges
<TABLE>
<CAPTION>
EXHIBIT - 12.1
WISCONSIN ELECTRIC POWER COMPANY
STATEMENT OF COMPUTATION OF
RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
Twelve Months Ended
---------------------------------------------------------------
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 9/30/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
(Thousands of Dollars)
Pre-Tax Income
Net Income $181,754 $240,668 $211,315 $70,615 $184,174 $210,964
Income Taxes 101,854 141,934 127,828 35,012 96,699 112,525
-------- -------- -------- -------- -------- --------
Total Pre-Tax Income 283,608 382,602 339,143 105,627 280,873 323,489
Fixed Charges
Interest on Long-Term Debt(a) 102,059 99,727 100,133 106,573 100,420 100,148
Other Interest Expense 7,610 11,960 7,821 8,730 11,756 13,365
Interest Factors of Rents
Nuclear Fuel 1,896 2,401 2,332 868 3,136 3,533
Long-Term Purchase
Power Contract(b) 0 0 0 5,614 20,297 20,372
-------- -------- -------- -------- -------- --------
Total Fixed Charges As Defined 111,565 114,088 110,286 121,785 135,609 137,418
-------- -------- -------- -------- -------- --------
Earnings Before Income
Taxes & Fixed Charges $395,173 $496,690 $449,429 $227,412 $416,482 $460,907
======== ======== ======== ======== ======== ========
Ratio of Earnings to
Fixed Charges 3.5x 4.4x 4.1x 1.9x 3.1x 3.4x
<FN>
(a) Includes amortization of debt premium, discount and expense.
(b) Wisconsin Electric has entered into a long-term power purchase contract that is being
accounted for as a capital lease.
</FN>
</TABLE>
