SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K/A
AMENDMENT NO. 1
TO
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
- ----- OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
- ----- OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------- -------------
Commission file number 1-9057
------------------------
WISCONSIN ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 39-1391525
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
231 West Michigan Street, P.O. Box 2949, Milwaukee, Wisconsin 53201
(Address of principal executive offices) (Zip Code)
(414) 221-2345
(Registrant's telephone number, including area code)
------------------------
FORM 10-K/A
WISCONSIN ENERGY CORPORATION
------------------------------
AMENDMENT NO. 1
TO
1996 ANNUAL REPORT ON FORM 10-K
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report for the year ended
December 31, 1996 on Form 10-K as set forth in the pages attached hereto:
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Item 14(a) 3 and the Exhibit Index to Wisconsin Energy Corporation's Annual
Report on Form 10-K for the year ended December 31, 1996 are hereby amended to
reflect the filing of Exhibit Nos. 99.1 and 99.2 herewith; the remainder of
Item 14 (including the Exhibits incorporated by reference in Item 14(a) 3) and
the Exhibit Index are unchanged.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
WISCONSIN ENERGY CORPORATION
--------------------------------
(Registrant)
Date: June 27, 1997 By /s/ A. K. Klisurich
-------------------------------- --------------------------------
A. K. Klisurich, Controller
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS AND REPORTS OF INDEPENDENT ACCOUNTANTS
INCLUDED IN PART II OF THIS REPORT
Wisconsin Energy Corporation ("WEC")
Consolidated Income Statement for the three years ended
December 31, 1996.
Consolidated Statement of Cash Flows for the three years
ended December 31, 1996.
Consolidated Balance Sheet at December 31, 1996 and 1995.
Consolidated Capitalization Statement at December 31, 1996
and 1995.
Consolidated Common Stock Equity Statement for the three
years ended December 31, 1996.
Notes to Financial Statements.
Report of Independent Accountants.
Wisconsin Electric Power Company ("WE")
Income Statement for the three years ended December 31,
1996.
Statement of Cash Flows for the three years ended
December 31, 1996.
Balance Sheet at December 31, 1996 and 1995.
Capitalization Statement at December 31, 1996 and 1995.
Common Stock Equity Statement for the three years ended
December 31, 1996.
Notes to Financial Statements.
Report of Independent Accountants.
2. FINANCIAL STATEMENT SCHEDULES INCLUDED IN PART IV OF THIS
REPORT
Wisconsin Energy Corporation
Schedule I Condensed Parent Company Financial Statements for the
three years ended December 31, 1996.
Other schedules are omitted because of the absence of conditions
under which they are required or because the required
information is given in the financial statements or notes
thereto.
Wisconsin Electric Power Company
Financial statement schedules are omitted because of the absence
of conditions under which they are required or because the
required information is given in the financial statements or
notes thereto.
* * * * *
THE FOLLOWING UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL
INFORMATION IS CONTAINED HEREIN AFTER THIS ITEM 14
Primergy Corporation ("Primergy")
Unaudited Pro Forma Combined Condensed Balance Sheet at
December 31, 1996.
Unaudited Pro Forma Combined Condensed Statements of Income
for the:
12 Months ended December 31, 1996
12 Months ended December 31, 1995
12 Months ended December 31, 1994
Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
Wisconsin Energy Company
Unaudited Pro Forma Combined Condensed Balance Sheet at
December 31, 1996.
Northern States Power Company-Wisconsin ("NSP-WI") Unaudited
Pro Forma Condensed Balance Sheet at December 31, 1996.
Unaudited Pro Forma Combined Condensed Statements of Income
for the:
12 Months ended December 31, 1996
12 Months ended December 31, 1995
12 Months ended December 31, 1994
Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
3. EXHIBITS AND EXHIBIT INDEX
See the Exhibit Index included as the last part of this report,
which is incorporated herein by reference. Each management
contract and compensatory plan or arrangement required to be
filed as an exhibit to this report is identified in the
Exhibit Index by two asterisks (**) following the description
of the exhibit.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by WEC or WE during the fourth
quarter of the year ended December 31, 1996.
WISCONSIN ENERGY CORPORATION
INCOME STATEMENT
(Parent Company Only)
SCHEDULE I - CONDENSED PARENT COMPANY
FINANCIAL STATEMENTS
Year Ended December 31
--------------------------------
1996 1995 1994
-------- -------- --------
(Thousands of Dollars)
Miscellaneous Income $ 1,576 $ 645 $ 373
Nonoperating Expense 427 363 423
-------- -------- --------
1,149 282 (50)
Income Taxes 303 122 (20)
-------- -------- --------
846 160 (30)
Equity in Subsidiaries' Earnings 217,289 233,874 180,898
-------- -------- --------
Net Income $218,135 $234,034 $180,868
======== ======== ========
See accompanying notes to condensed parent company financial statements.
(continued on next page)
WISCONSIN ENERGY CORPORATION
STATEMENT OF CASH FLOWS
(Parent Company Only)
SCHEDULE I - CONDENSED PARENT COMPANY
FINANCIAL STATEMENTS - (cont'd)
Year Ended December 31
---------------------------------
1996 1995 1994
--------- --------- ---------
(Thousands of Dollars)
Operating Activities
Net Income $ 218,135 $ 234,034 $ 180,868
Reconciliation to cash
Equity in subsidiaries' earnings (217,289) (233,874) (180,898)
Dividends from subsidiaries 167,889 159,576 150,951
Other (3,794) (8,131) 235
--------- --------- ---------
Cash Provided by Operating Activities 164,941 151,605 151,156
Investing Activities
Equity investment in subsidiaries - net (3,101) (36,641) (19,500)
Change in notes receivable -
associated companies (17,975) (6,490) (17,535)
Other 195 (1,128) (870)
--------- --------- ---------
Cash Used in Investing Activities (20,881) (44,259) (37,905)
Financing Activities
Sale of common stock 23,180 52,353 50,494
Dividends on common stock (167,236) (159,688) (150,708)
Change in notes payable -
associated companies - - (13,100)
--------- --------- ---------
Cash Used in Financing Activities (144,056) (107,335) (113,314)
--------- --------- ---------
Change in Cash and Cash Equivalents $ 4 $ 11 $ (63)
========= ========= =========
Cash Paid For
Interest $ - $ - $ 62
Income taxes (40) 246 (15)
See accompanying notes to condensed parent company financial statements.
(continued on next page)
WISCONSIN ENERGY CORPORATION
BALANCE SHEET
(Parent Company Only)
SCHEDULE I - CONDENSED PARENT COMPANY
FINANCIAL STATEMENTS - (cont'd)
December 31
----------------------------
1996 1995
---------- ----------
(Thousands of Dollars)
Assets
------
Current Assets
Cash and cash equivalents $ 18 $ 14
Accounts and notes receivable
from associated companies 42,613 24,728
Other 780 580
---------- ----------
Total Current Assets 43,411 25,322
Property and Investments
Investment in subsidiary companies 1,893,039 1,839,993
Other 773 1,534
---------- ----------
Total Property and Investments 1,893,812 1,841,527
Deferred Charges 19,905 16,431
---------- ----------
Total Assets $1,957,128 1,883,280
========== ==========
Liabilities and Equity
----------------------
Current Liabilities
Accounts payable $ 77 $ 216
Accounts and notes payable
to associated companies 106 108
Other 169 21
---------- ----------
Total Current Liabilities 352 345
Deferred Credits 8,643 8,881
Stockholders' Equity
Common stock 703,987 680,807
Retained earnings 118,180 116,227
Undistributed subsidiaries' earnings 1,125,966 1,077,020
---------- ----------
Total Stockholders' Equity 1,948,133 1,874,054
---------- ----------
Total Liabilities and Equity $1,957,128 $1,883,280
========== ==========
See accompanying notes to condensed parent company financial statements.
(continued on next page)
WISCONSIN ENERGY CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Parent Company Only)
SCHEDULE I - CONDENSED PARENT COMPANY
FINANCIAL STATEMENTS - (cont'd)
1. The condensed parent company financial statements and notes should be read
in conjunction with the consolidated financial statements and notes of WEC
appearing in this Annual Report on Form 10-K.
2. Various financing arrangements and regulatory requirements impose certain
restrictions on the ability of Wisconsin Energy Corporation's utility
subsidiary to transfer funds to Wisconsin Energy Corporation ("WEC") in
the form of cash dividends, loans, or advances. Under Wisconsin law,
Wisconsin Electric Power Company ("WE") is prohibited from loaning funds,
either directly or indirectly, to WEC. WEC does not believe that such
restrictions will affect its operations.
WISCONSIN ENERGY CORPORATION ("WEC")
WISCONSIN ELECTRIC POWER COMPANY ("WE")
EXHIBIT INDEX
to
Annual Report on Form 10-K
For the Year Ended December 31, 1996
The following exhibits are filed with or incorporated by reference in this
report with respect to WEC and/or WE as denoted by an "X" in the last two
columns. (An asterisk (*) indicates incorporation by reference pursuant to
Exchange Act Rule 12b-32.)
Number Exhibit WEC WE
------ ---------------------------------------------------- --- --
2 Plan of acquisition, reorganization, arrangement,
liquidation or succession
2.1 * Amended and Restated Agreement and Plan of X X
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. ("New
NSP") and WEC Sub Corp. (Exhibit (2)-1 to WEC's
Registration Statement on Form S-4 filed on
August 7, 1995, Registration No. 33-61619
("Form S-4, No. 33-61619"); other related
documents are also filed as exhibits to such
Registration Statement.)
2.2 * WEC Stock Option Agreement, dated as of X X
April 28, 1995, by and among NSP and WEC.
(Exhibit (2)-2 to Form S-4, No. 33-61619.)
2.3 * NSP Stock Option Agreement, dated as of X X
April 28, 1995, by and among WEC and NSP.
(Exhibit (2)-3 to Form S-4, No. 33-61619.)
2.4 * Committees of the Board of Directors of X X
Primergy (Exhibit (2)-4 to Form S-4,
No. 33-61619.)
2.5 * Form of Employment Agreement between X X
Primergy and James J. Howard. (Exhibit
(2)-5 to Form S-4, No. 33-61619.)
2.6 * Form of Employment Agreement between X X
Primergy and Richard A. Abdoo.
(Exhibit (2)-6 to Form S-4, No. 33-61619.)
2.7 * Form of Amended and Restated Articles of X X
Incorporation of New NSP. (Exhibit 3-3 (b)
to Form S-4, No. 33-61619.)
2.8 * Letter Agreement, dated January 17, 1995, X X
between NSP and WEC. (Exhibit (2)-8 to WEC's
Schedule 13D dated May 4, 1995 with respect
to the NSP Stock Option Agreement.)
2.9 * Letter Agreement, dated April 26, 1995, X X
between NSP and WEC amending Letter Agreement
dated January 17, 1995. (Exhibit (2)-9 to
WEC's Schedule 13D dated May 4, 1995 with
respect to the NSP Stock Option Agreement.)
2.10 * Plan and Agreement of Merger, dated June 30, X
1994, by and between WE and Wisconsin Natural
Gas Company ("WN"). (Appendix A to WE's Proxy
Statement dated October 31, 1994, in File No.
1-1245.)
3 Articles of Incorporation and By-laws
3.1 * Restated Articles of Incorporation of WEC, X
as amended and restated effective June 12, 1995.
(Exhibit (3)-1 to WEC's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1995,
File No. 1-9057.)
3.2 * Bylaws of WEC, as amended and restated X
July 26, 1995. (Exhibit (3)-2 to Form S-4,
No. 33-61619.)
3.3 * Restated Articles of Incorporation of WE, as X
amended and restated effective January 10, 1995.
(Exhibit (3)-1 to WE's Annual Report on Form
10-K for the year ended December 31, 1994,
File No. 1-1245.)
3.4 * Bylaws of WE, as amended and restated X
January 31, 1996. (Exhibit (3)-1 to WE's Annual
Report on Form 10-K for the year ended
December 31, 1995, File No. 1-1245.)
4 Instruments defining the rights of security holders, including
indentures
4.1 * Reference is made to Article III of the X X
Restated Articles of Incorporation.
(Exhibits (3)-1 and (3)-3 herein.)
Mortgage, Indenture, Supplemental Indenture or Securities
Resolution:
4.2 * Mortgage and Deed of Trust of WE dated X X
October 28, 1938 (Exhibit B-1 under File
No. 2-4340.)
4.3 * Second Supplemental Indenture of WE, dated X X
June 1, 1946 (Exhibit 7-C under File
No. 2-6422.)
4.4 * Third Supplemental Indenture of WE, dated X X
March 1, 1949 (Exhibit 7-C under File
No. 2-8456.)
4.5 * Fourth Supplemental Indenture of WE, dated X X
June 1, 1950 (Exhibit 7-D under File
No. 2-8456.)
4.6 * Fifth Supplemental Indenture of WE, dated X X
May 1, 1952 (Exhibit 4-G under File
No. 2-9588.)
4.7 * Sixth Supplemental Indenture of WE, dated X X
May 1, 1954 (Exhibit 4-H under File
No. 2-10846.)
4.8 * Seventh Supplemental Indenture of WE, X X
dated April 15, 1956 (Exhibit 4-I under
File No. 2-12400.)
4.9 * Eighth Supplemental Indenture of WE, X X
dated April 1, 1958 (Exhibit 2-I under
File No. 2-13937.)
4.10 * Ninth Supplemental Indenture of WE, dated X X
November 15, 1960 (Exhibit 2-J under
File No. 2-17087.)
4.11 * Tenth Supplemental Indenture of WE, dated X X
November 1, 1966 (Exhibit 2-K under
File No. 2-25593.)
4.12 * Eleventh Supplemental Indenture of WE, X X
dated November 15, 1967 (Exhibit 2-L under
File No. 2-27504.)
4.13 * Twelfth Supplemental Indenture of WE, X X
dated May 15, 1968 (Exhibit 2-M under File No.
2-28799.)
4.14 * Thirteenth Supplemental Indenture of WE, X X
dated May 15, 1969 (Exhibit 2-N under
File No. 2-32629.)
4.15 * Fourteenth Supplemental Indenture of WE, X X
dated November 1, 1969 (Exhibit 2-O under
File No. 2-34942.)
4.16 * Fifteenth Supplemental Indenture of WE, dated X X
July 15, 1976 (Exhibit 2-P under File
No. 2-54211.)
4.17 * Sixteenth Supplemental Indenture of WE, dated X X
January 1, 1978 (Exhibit 2-Q under File
No. 2-61220.)
4.18 * Seventeenth Supplemental Indenture of WE, X X
dated May 1, 1978 (Exhibit 2-R under File
No. 2-61220.)
4.19 * Eighteenth Supplemental Indenture of WE, X X
dated May 15, 1978 (Exhibit 2-S under
File No. 2-61220.)
4.20 * Nineteenth Supplemental Indenture of WE, X X
dated August 1, 1979 (Exhibit (a)2(a) under
File No. 1-1245, 9/30/79 WE Form 10-Q.)
4.21 * Twentieth Supplemental Indenture of WE, dated X X
November 15, 1979 (Exhibit (a)2(a) under
File No. 1-1245, 12/31/79 WE Form 10-K.)
4.22 * Twenty-First Supplemental Indenture of WE, X X
dated April 15, 1980 (Exhibit (4)-21 under
File No. 2-69488.)
4.23 * Twenty-Second Supplemental Indenture of WE, X X
dated December 1, 1980 (Exhibit (4)-1 under
File No. 1-1245, 12/31/80 WE Form 10-K.)
4.24 * Twenty-Third Supplemental Indenture of WE, X X
dated September 15, 1985 (Exhibit (4)-1 under
File No. 1-1245, 9/30/85 WE Form 10-Q.)
4.25 * Twenty-Fourth Supplemental Indenture of WE, X X
dated September 15, 1985 (Exhibit (4)-1 under
File No. 1-1245, 9/30/85 WE Form 10-Q.)
4.26 * Twenty-Fifth Supplemental Indenture of WE, X X
dated December 15, 1986 (Exhibit (4)-25
under File No. 1-1245, 12/31/86 WE Form 10-K.)
4.27 * Twenty-Sixth Supplemental Indenture of WE, X X
dated January 1, 1988 (Exhibit 4 under File
No. 1-1245, 1/26/88 Form 8-K.)
4.28 * Twenty-Seventh Supplemental Indenture of WE, X X
dated April 15, 1988 (Exhibit 4 under
File No. 1-1245, 3/31/88 Form 10-Q.)
4.29 * Twenty-Eighth Supplemental Indenture of WE, X X
dated September 1, 1989 (Exhibit 4 under
File No. 1-1245, 9/30/89 WE Form 10-Q.)
4.30 * Twenty-Ninth Supplemental Indenture of WE, X X
dated October 1, 1991 (Exhibit 4-1 under
File No. 1-1245, 12/31/91 WE Form 10-K.)
4.31 * Thirtieth Supplemental Indenture of WE, X X
dated December 1, 1991 (Exhibit 4-2 under
File No. 1-1245, 12/31/91 WE Form 10-K.)
4.32 * Thirty-First Supplemental Indenture of WE, X X
dated August 1, 1992 (Exhibit 4-1 under
File No. 1-1245, 6/30/92 WE Form 10-Q.)
4.33 * Thirty-Second Supplemental Indenture of WE, X X
dated August 1, 1992 (Exhibit 4-2 under
File No. 1-1245, 6/30/92 WE Form 10-Q.)
4.34 * Thirty-Third Supplemental Indenture of WE, X X
dated October 1, 1992 (Exhibit 4-1 under
File No. 1-1245, 9/30/92 WE Form 10-Q.)
4.35 * Thirty-Fourth Supplemental Indenture of WE, X X
dated November 1, 1992 (Exhibit 4-2 under
File No. 1-1245, 9/30/92 WE Form 10-Q.)
4.36 * Thirty-Fifth Supplemental Indenture of WE, X X
dated December 15, 1992 (Exhibit 4-1 under
File No. 1-1245, 12/31/92 WE Form 10-K.)
4.37 * Thirty-Sixth Supplemental Indenture of WE, X X
dated January 15, 1993 (Exhibit 4-2 under
File No. 1-1245, 12/31/92 WE Form 10-K.)
4.38 * Thirty-Seventh Supplemental Indenture of WE, X X
dated March 15, 1993 (Exhibit 4-3 under
File No. 1-1245, 12/31/92 WE Form 10-K.)
4.39 * Thirty-Eighth Supplemental Indenture of WE, X X
dated August 1, 1993 (Exhibit (4)-1 under
File No. 1-1245, 6/30/93 WE Form 10-Q.)
4.40 * Thirty-Ninth Supplemental Indenture of WE, X X
dated September 15, 1993 (Exhibit (4)-1
under File No. 1-1245, 9/30/93 WE Form 10-Q.)
4.41 * Fortieth Supplemental Indenture of WE, X X
dated January 1, 1996 (Exhibit (4)-1
under File No. 1-1245, 1/1/96 WE Form 8-K.)
4.42 * Indenture for Debt Securities of WE X X
(the "Indenture"), dated December 1, 1995
(Exhibit (4)-1 under File No. 1-1245,
12/31/95 WE Form 10-K.)
4.43 * Securities Resolution No. 1 of WE under X X
the Indenture, dated December 5, 1995
(Exhibit (4)-2 under File No. 1-1245,
12/31/95, WE Form 10-K.)
4.44 Securities Resolution No. 2 of WE under X X*
the Indenture, dated November 12, 1996.
(WEC Exhibit 4.44 herein.)
All agreements and instruments with respect
to long-term debt not exceeding 10 percent of
the total assets of the Registrant and its
subsidiaries on a consolidated basis have been
omitted as permitted by related instructions.
The Registrant agrees pursuant to Item
601(b)(4) of Regulation S-K to furnish to the
Securities and Exchange Commission, upon request,
a copy of all such agreements and instruments.
10 Material Contracts
10.1 * Supplemental Executive Retirement Plan of WEC X
(as amended and restated as of January 1, 1996).
(Exhibit (10)-1 to WEC's Annual Report on
Form 10-K for the year ended December 31,
1995, File No. 1-9057.)** See Note.
10.2 * Amended Non-Qualified Trust Agreement by X X
and between WEC and Firstar Trust Company
dated January 26, 1996, regarding trust
established to provide a source of funds
to assist in meeting of the liabilities
under various nonqualified deferred
compensation plans made between WEC or
its subsidiaries and various plan
participants. (Exhibit (10)-2 to WEC's
Annual Report on Form 10-K for the year
ended December 31, 1995, File No.
1-9057.)** See Note.
10.3 * Executive Deferred Compensation Plan of WEC, X
effective January 1, 1989, as amended and
restated as of January 1, 1996. (Exhibit
(10)-3 to WEC's Annual Report on Form 10-K
for the year ended December 31, 1995,
File No. 1-9057.)** See Note.
10.4 * Directors' Deferred Compensation Plan of X
WEC, effective January 1, 1987, and as
restated as of January 1, 1996. (Exhibit
(10)-4 to WEC's Annual Report on Form 10-K
for the year ended December 31, 1995,
File No. 1-9057.)** See Note.
10.5 * Forms of Stock Option Agreements under X
1993 Omnibus Stock Incentive Plan.
(Exhibit (10)-5 to WEC's Annual Report
on Form 10-K for the year ended
December 31, 1995, File No. 1-9057.)**
See Note.
10.6 * Form of Amendment to Stock Option X
Agreements under 1993 Omnibus Stock
Incentive Plan to waive NSP Transaction
as a change in control thereunder.
(Exhibit (10)-6 to WEC's Annual Report
on Form 10-K for the year ended
December 31, 1995, File No. 1-9057.)**
See Note.
10.7 * Supplemental Benefits Agreement between X
WEC and Calvin H. Baker dated
November 21, 1994. (Exhibit (10)-7 to
WEC's Annual Report on Form 10-K for the
year ended December 31, 1995, File
No. 1-9057.)** See Note.
10.8 * Form of Amendment to Supplemental Benefits X
Agreements to waive NSP Transaction as a
change in control thereunder. (Exhibit
(10)-8 to WEC's Annual Report on Form 10-K
for the year ended December 31, 1995,
File No. 1-9057.)** See Note.
10.9 * Form of Consent under the Executive Deferred X
Compensation Plan to waive NSP Transaction
as a change in control thereunder.
(Exhibit (10)-9 to WEC's Annual Report on
Form 10-K for the year ended December 31,
1995, File No. 1-9057.)** See Note.
10.10 * Supplemental Benefits Agreement between WEC X X
and Richard A. Abdoo dated November 21, 1994,
and April 26, 1995 letter agreement.
(Exhibit (10)-1 to WEC's 6/30/95 10-Q.)**
See Note.
10.11 * WEC Senior Executive Severance Policy, as X X
adopted effective April 28, 1995 and amended
on July 26, 1995. (Exhibit (10)-3 to WEC's
6/30/95 10-Q.)** See Note.
10.12 * 1993 Omnibus Stock Incentive Plan adopted X
by the Board of Directors on December 15,
1993, approved by shareholders at the
Annual Meeting of Stockholders held on
May 11, 1994, offering performance-based
incentives and other equity interests in
WEC to officers and other key employees.
(Exhibit 10-1 to WEC's 1993 Form 10-K
in File No. 1-9057.)** See Note.
10.13 * Agreement between WEC, WITECH Corporation X
and employee Francis Brzezinski dated
November 30, 1992, naming him a participant
in the WEC Supplemental Executive
Retirement Plan retroactive to September 1,
1990. (Exhibit 10-1 to WEC's 1992 Form 10-K
in File No. 1-9057.)** See Note.
10.14 * Short-Term Performance Plan of WEC effective X
January 1, 1992. (Exhibit 10-3 to WEC's 1991
Form 10-K in File No. 1-9057.)** See Note.
10.15 * Service Agreement dated January 1, 1987, X X
between WE, WEC and other non-utility
affiliated companies. (Exhibit (10)-(a)
to WE's Current Report on Form 8-K dated
January 2, 1987 in File No. 1-1245.)
Note: Two asterisks (**) identify management
contracts and executive compensation plans
or arrangements required to be filed as
exhibits pursuant to Item 14(c) of Form 10-K.
Certain compensatory plans in which directors
or executive officers of WE are eligible
to participate are not filed as WE exhibits
in reliance on the exclusion in
Item 601(b)(10)(iii)(B)(6) of Regulation S-K.
21 Subsidiaries of the registrant
21.1 Subsidiaries of WEC X
23 Consents of experts and counsel
23.1 Price Waterhouse LLP - Milwaukee, WI X X
Consent of Independent Accountants
appearing in this Annual Report on
Form 10-K for the year ended December 31,
1996.
23.2 Consent of Price Waterhouse LLP - X X
Minneapolis, MN, NSP's and NSP-WI's
Independent Accountants.
23.3 Consent of Deloitte & Touche LLP - X X
Minneapolis, MN, NSP's and NSP-WI's
Independent Auditors prior to 1995.
27 Financial data schedule
27.1 Financial Data Schedule for the fiscal X X
year ended December 31, 1996.
99 Additional Exhibits
99.1 Information furnished in lieu of the X
Form 11-K Annual Report for Management
Employee Savings Plan for the year ended
December 31, 1996. (Filed with Amendment No. 1)
99.2 Information furnished in lieu of the X
Form 11-K Annual Report for Represented
Employee Savings Plan for the year ended
December 31, 1996. (Filed with Amendment No. 1)
99.3 * Audited Financial Statements of NSP. (Item 8 X
of NSP's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996,
File No. 1-3034):
Report of Independent Accountants for the
years ended December 31, 1996 and 1995.
Independent Auditor's Report for the year
ended December 31, 1994.
Consolidated Statements of Income for the
three years ended December 31, 1996.
Consolidated Statements of Cash Flows for the
three years ended December 31, 1996.
Consolidated Balance Sheets at December 31,
1996 and 1995.
Consolidated Statements of Common Stockholders'
Equity for the three years ended December 31,
1996.
Consolidated Statements of Capitalization
at December 31, 1996 and 1995.
Notes to Financial Statements
99.4 * Audited Financial Statements of NSP-WI. X
(Item 8 of NSP-WI's Annual Report on
Form 10-K for the fiscal year ended
December 31, 1996, File No. 10-3140):
Report of Independent Accountants for
the years ended December 31, 1996
and 1995.
Independent Auditor's Report for the year
ended December 31, 1994.
Statements of Income and Retained Earnings
for the three years ended December 31, 1996.
Statements of Cash Flows for the three
years ended December 31, 1996.
Balance Sheets at December 31, 1996 and 1995.
Notes to Financial Statements.
Exhibit 99.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------------
Financial statements and schedules furnished in lieu of the
FORM 11-K
Annual Report
Pursuant to Rule 15d-21 under the
Securities Exchange Act of 1934
------------------------
For the fiscal year ended December 31, 1996
A. Full title of the Plan and the address of the Plan, if different
from that of the issuer named below:
WISCONSIN ELECTRIC POWER COMPANY
MANAGEMENT EMPLOYEE SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the Plan and
the address of its principal executive office:
WISCONSIN ENERGY CORPORATION
231 West Michigan Street
P.O. Box 2949
Milwaukee, Wisconsin 53201
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrator has duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
WISCONSIN ELECTRIC POWER COMPANY
MANAGEMENT EMPLOYEE SAVINGS PLAN
--------------------------------
Name of Plan
June 27, 1997 By /s/ Thomas H. Fehring
---------------------------------
Thomas H. Fehring, Savings Plan
Policy Committee Member
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Participants and
Plan Administrator of the
Wisconsin Electric Power Company
Management Employee Savings Plan
In our opinion, the accompanying statements of net assets available for
benefits with fund information and the related statements of changes in net
assets available for benefits with fund information present fairly, in all
material respects, the net assets available for benefits of the Wisconsin
Electric Power Company Management Employee Savings Plan (the "Plan") at
December 31, 1996 and 1995, and the changes in net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
the Plan's administrator; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by the plan administrator, and evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedule I and Schedule II is presented for the purpose of additional analysis
and is not a required part of the basic financial statements but is
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. The fund information in the statements of net assets
available for benefits and the statements of changes in net assets available
for benefits is presented for purposes of additional analysis rather than to
present the net assets available for plan benefits and changes in net assets
available for benefits of each fund. The supplemental schedules and fund
information 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 23, 1997
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
MANAGEMENT EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
<CAPTION>
December 31, 1996
(Page 1 of 2)
--------------------------------------------------------------------------------
Participant-Directed
--------------------------------------------------------------------------------
Fidelity
WEC Fidelity Fidelity U.S. Equity
Blended Rate Common Equity Growth Index Fidelity
Income Stock Income Company Commingled Balanced
Fund Fund Fund Fund Pool Fund
------------ ----------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments, at fair value (Note 2)
Mutual and pooled funds $ 0 $45,708,902 $27,600,948 $22,148,582 $14,615,664 $3,306,878
Participant notes receivable 0 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
0 45,708,902 27,600,948 22,148,582 14,615,664 3,306,878
----------- ----------- ----------- ----------- ----------- ----------
Investments, at contract value
(Note 2) 32,653,473 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
Total Investments 32,653,473 45,708,902 27,600,948 22,148,582 14,615,664 3,306,878
----------- ----------- ----------- ----------- ----------- ----------
Cash 1,327,687 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
Net assets available
for benefits $33,981,160 $45,708,902 $27,600,948 $22,148,582 $14,615,664 $3,306,878
=========== =========== =========== =========== =========== ==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
MANAGEMENT EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
(Continued)
<CAPTION>
December 31, 1996
(Page 2 of 2)
--------------------------------------------------------------------------------
Participant-Directed
--------------------------------------------------------------------------------
Fidelity
Retirement
Government Fidelity Fidelity
Money U.S. Bond Fidelity Low-Priced
Market Index Overseas Stock Loan
Portfolio Portfolio Fund Fund Fund Total
----------- ---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments, at fair value (Note 2)
Mutual and pooled funds $ 863,061 $ 1,421,712 $ 5,604,367 $ 604,951 $ 0 $121,875,065
Participant notes receivable 0 0 0 0 3,285,263 3,285,263
----------- ----------- ----------- ----------- ----------- ------------
863,061 1,421,712 5,604,367 604,951 3,285,263 125,160,328
----------- ----------- ----------- ----------- ----------- ------------
Investments, at contract value
(Note 2) 0 0 0 0 0 32,653,473
----------- ----------- ----------- ----------- ----------- ------------
Total Investments 863,061 1,421,712 5,604,367 604,951 3,285,263 157,813,801
----------- ----------- ----------- ----------- ----------- ------------
Cash 0 0 0 0 0 1,327,687
----------- ----------- ----------- ----------- ----------- ------------
Net assets available
for benefits $ 863,061 $ 1,421,712 $ 5,604,367 $ 604,951 $ 3,285,263 $159,141,488
=========== =========== =========== =========== =========== ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
MANAGEMENT EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
<CAPTION>
December 31, 1995
(Page 1 of 2)
--------------------------------------------------------------------------------
Participant-Directed
--------------------------------------------------------------------------------
Fidelity
WEC Fidelity Fidelity U.S. Equity
Blended Rate Common Equity Growth Index Fidelity
Income Stock Income Company Commingled Balanced
Fund Fund Fund Fund Pool Fund
------------ ----------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments, at fair value (Note 2)
Mutual and pooled funds $ 0 $51,383,227 $19,964,408 $16,290,632 $10,283,526 $3,055,407
Participant notes receivable 0 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
0 51,383,227 19,964,408 16,290,632 10,283,526 3,055,407
----------- ----------- ----------- ----------- ----------- ----------
Investments, at contract value
(Note 2) 30,652,456 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
Total investments 30,652,456 51,383,227 19,964,408 16,290,632 10,283,526 3,055,407
----------- ----------- ----------- ----------- ----------- ----------
Cash 2,913,784 631,290 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
Net assets available
for benefits $33,566,240 $52,014,517 $19,964,408 $16,290,632 $10,283,526 $3,055,407
=========== =========== =========== =========== =========== ==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE> 5
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
MANAGEMENT EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
(Continued)
<CAPTION>
December 31, 1995
(Page 2 of 2)
---------------------------------------------------------------
Participant-Directed
---------------------------------------------------------------
Fidelity
Retirement
Government Fidelity
Money U.S. Bond Fidelity
Market Index Overseas Loan
Portfolio Portfolio Fund Fund Total
----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Assets
Investments at fair value (Note 2)
Mutual and pooled funds $ 867,814 $1,205,329 $3,843,462 $ 0 $106,893,805
Participant notes receivable 0 0 0 2,687,151 2,687,151
--------- ---------- ---------- ---------- ------------
867,814 1,205,329 3,843,462 2,687,151 109,580,956
--------- ---------- ---------- ---------- ------------
Investments, at contract value
(Note 2) 0 0 0 0 30,652,456
--------- ---------- ---------- ---------- ------------
Total investments 867,814 1,205,329 3,843,462 2,687,151 140,233,412
--------- ---------- ---------- ---------- ------------
Cash 0 0 0 0 3,545,074
--------- ---------- ---------- ---------- ------------
Net assets available
for benefits $ 867,814 $1,205,329 $3,843,462 $2,687,151 $143,778,486
========= ========== ========== ========== ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
MANAGEMENT EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
<CAPTION>
For the Year Ended December 31, 1996
(Page 1 of 2)
--------------------------------------------------------------------------------------------
Participant-Directed
--------------------------------------------------------------------------------------------
Fidelity
WEC Fidelity Fidelity U.S. Equity
Blended Rate Common Equity Growth Index Fidelity
Income Stock Income Company Commingled Balanced
Fund Fund Fund Fund Pool Fund
------------ ------------ ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Additions
Additions to net assets
attributed to:
Investment income:
Interest and dividends $ 2,102,878 $ 1,749,347 $ 1,692,866 $ 960,030 $ 0 $ 145,335
Net (depreciation)
appreciation in fair
value of investments 0 (5,480,552) 2,893,655 2,029,930 2,619,363 122,825
----------- ----------- ----------- ----------- ----------- ----------
2,102,878 (3,731,205) 4,586,521 2,989,960 2,619,363 268,160
----------- ----------- ----------- ----------- ----------- ----------
Contributions:
Participants' 1,466,761 1,021,348 1,533,046 1,681,944 805,891 401,939
Employer's 0 2,405,824 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
1,466,761 3,427,172 1,533,046 1,681,944 805,891 401,939
----------- ----------- ----------- ----------- ----------- ----------
Total additions 3,569,639 (304,033) 6,119,567 4,671,904 3,425,254 670,099
----------- ----------- ----------- ----------- ----------- ----------
Deductions
Deductions from net assets
attributed to:
Administrative expenses 0 3,298 81 0 0 0
Benefits paid to
participants 2,414,304 1,358,374 632,114 465,635 316,773 97,219
----------- ----------- ----------- ----------- ----------- ----------
Total deductions 2,414,304 1,361,672 632,195 465,635 316,773 97,219
----------- ----------- ----------- ----------- ----------- ----------
Net increase (decrease) prior
to interfund and plan transfers 1,155,335 (1,665,705) 5,487,372 4,206,269 3,108,481 572,880
Interfund transfers (899,518) (4,771,998) 1,970,989 1,360,070 1,127,444 (367,633)
Plan transfers (Note 3) 159,103 132,088 178,179 291,611 96,213 46,224
----------- ----------- ----------- ----------- ----------- ----------
Net increase (decrease) 414,920 (6,305,615) 7,636,540 5,857,950 4,332,138 251,471
Net assets available for
benefits:
Beginning of year 33,566,240 52,014,517 19,964,408 16,290,632 10,283,526 3,055,407
----------- ----------- ----------- ----------- ----------- ----------
End of year $33,981,160 $45,708,902 $27,600,948 $22,148,582 $14,615,664 $3,306,878
=========== =========== =========== =========== =========== ==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
MANAGEMENT EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
(Continued)
<CAPTION>
For the Year Ended December 31, 1996
(Page 2 of 2)
--------------------------------------------------------------------------------------------
Participant-Directed
--------------------------------------------------------------------------------------------
Fidelity
Retirement
Government Fidelity Fidelity
Money U.S. Bond Fidelity Low-Priced
Market Index Overseas Stock Loan
Portfolio Portfolio Fund Fund Fund Total
----------- ----------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Additions
Additions to net assets
attributed to:
Investment income:
Interest and dividends $ 43,861 $ 93,056 $ 338,877 $ 5,614 $ 255,563 $ 7,387,427
Net (depreciation)
appreciation in fair
value of investments 0 (43,526) 246,569 7,366 0 2,395,630
----------- ----------- ----------- ----------- ----------- ------------
43,861 49,530 585,446 12,980 255,563 9,783,057
----------- ----------- ----------- ----------- ----------- ------------
Contributions:
Participants' 76,496 162,027 523,019 3,924 0 7,676,395
Employer's 0 0 0 0 0 2,405,824
----------- ----------- ----------- ----------- ----------- ------------
76,496 162,027 523,019 3,924 0 10,082,219
----------- ----------- ----------- ----------- ----------- ------------
Total additions 120,357 211,557 1,108,465 16,904 255,563 19,865,276
----------- ----------- ----------- ----------- ----------- ------------
Deductions
Deductions from net assets
attributed to:
Administrative expenses 0 0 0 0 0 3,379
Benefits paid to
participants 53,868 17,023 161,796 0 26,245 5,543,351
----------- ----------- ----------- ----------- ----------- ------------
Total deductions 53,868 17,023 161,796 0 26,245 5,546,730
----------- ----------- ----------- ----------- ----------- ------------
Net increase (decrease) prior
to interfund and plan transfers 66,489 194,534 946,669 16,904 229,318 14,318,546
Interfund transfers (72,170) (7,289) 751,325 588,047 320,733 0
Plan transfers (Note 3) 928 29,138 62,911 0 48,061 1,044,456
----------- ----------- ----------- ----------- ----------- ------------
Net increase (decrease) (4,753) 216,383 1,760,905 604,951 598,112 15,363,002
Net assets available for
benefits:
Beginning of year 867,814 1,205,329 3,843,462 0 2,687,151 143,778,486
----------- ----------- ----------- ----------- ----------- ------------
End of year $ 863,061 $ 1,421,712 $ 5,604,367 $ 604,951 $ 3,285,263 $159,141,488
=========== =========== =========== =========== =========== ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
MANAGEMENT EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
<CAPTION>
For the year ended December 31, 1995
(Page 1 of 2)
---------------------------------------------------------------------------------------------
Participant-Directed
---------------------------------------------------------------------------------------------
Fidelity
WEC Fidelity Fidelity U.S. Equity
Blended Rate Common Equity Growth Index Fidelity
Income Stock Income Company Commingled Balanced
Fund Fund Fund Fund Pool Fund
------------ ------------ ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Additions
Additions to net assets
attributed to:
Investment income:
Interest and dividends $ 2,118,215 $ 1,693,068 $ 1,141,470 $ 728,744 $ 0 $ 126,469
Net appreciation in fair
value of investments 0 8,959,561 3,479,581 3,032,593 2,645,745 282,121
----------- ----------- ----------- ----------- ----------- ----------
2,118,215 10,652,629 4,621,051 3,761,337 2,645,745 408,590
----------- ----------- ----------- ----------- ----------- ----------
Contributions:
Participants' 1,417,378 938,302 1,242,175 1,280,389 602,514 374,113
Employer's 0 2,129,042 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
1,417,378 3,067,344 1,242,175 1,280,389 602,514 374,113
----------- ----------- ----------- ----------- ----------- ----------
Total additions 3,535,593 13,719,973 5,863,226 5,041,726 3,248,259 782,703
----------- ----------- ----------- ----------- ----------- ----------
Deductions
Deductions from net assets
attributed to:
Benefits paid to
participants 2,806,330 1,462,438 673,738 486,971 400,163 256,840
----------- ----------- ----------- ----------- ----------- ----------
Total deductions 2,806,330 1,462,438 673,738 486,971 400,163 256,840
----------- ----------- ----------- ----------- ----------- ----------
Net increase (decrease) prior
to interfund and plan transfers 729,263 12,257,535 5,189,488 4,554,755 2,848,096 525,863
Interfund transfers 1,579,978 (5,267,060) 351,201 2,936,271 741,623 (340,809)
Plan transfers (Note 3) 253,423 146,081 126,428 66,126 16,064 17,593
----------- ----------- ----------- ----------- ----------- ----------
Net increase (decrease) 2,562,664 7,136,556 5,667,117 7,557,152 3,605,783 202,647
Net assets available for
benefits:
Beginning of year 31,003,576 44,877,961 14,297,291 8,733,480 6,677,743 2,852,760
----------- ----------- ----------- ----------- ----------- ----------
End of year $33,566,240 $52,014,517 $19,964,408 $16,290,632 $10,283,526 $3,055,407
=========== =========== =========== =========== =========== ==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
MANAGEMENT EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
(Continued)
<CAPTION>
For the year ended December 31, 1995
(Page 2 of 2)
-------------------------------------------------------------------------------
Participant-Directed
-------------------------------------------------------------------------------
Fidelity
Retirement
Government Fidelity
Money U.S. Bond Fidelity
Market Index Overseas Loan
Portfolio Portfolio Fund Fund Total
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Additions
Additions to net assets
attributed to:
Investment income:
Interest and dividends $ 53,428 $ 74,122 $ 88,653 $ 197,775 $ 6,221,944
Net appreciation in fair
value of investments 0 95,677 217,286 0 18,712,564
----------- ----------- ----------- ----------- ------------
53,428 169,799 305,939 197,775 24,934,508
----------- ----------- ----------- ----------- ------------
Contributions:
Participants' 83,513 142,925 446,967 0 6,528,276
Employer's 0 0 0 0 2,129,042
----------- ----------- ----------- ----------- ------------
83,513 142,925 446,967 0 8,657,318
----------- ----------- ----------- ----------- ------------
Total additions 136,941 312,724 752,906 197,775 33,591,826
----------- ----------- ----------- ----------- ------------
Deductions
Deductions from net assets
attributed to:
Benefits paid to
participants 181,605 84,455 168,233 10,714 6,531,487
----------- ----------- ----------- ----------- ------------
Total deductions 181,605 84,455 168,233 10,714 6,531,487
----------- ----------- ----------- ----------- ------------
Net increase (decrease) prior
to interfund and plan transfers (44,664) 228,269 584,673 187,061 27,060,339
Interfund transfers (275,110) 60,989 59,467 153,450 0
Plan transfers (Note 3) 36,600 12,487 15,576 23,934 714,312
----------- ----------- ----------- ----------- ------------
Net increase (decrease) (283,174) 301,745 659,716 364,445 27,774,651
Net assets available for
benefits:
Beginning of year 1,150,988 903,584 3,183,746 2,322,706 116,003,835
----------- ----------- ----------- ----------- ------------
End of year $ 867,814 $ 1,205,329 $ 3,843,462 $ 2,687,151 $143,778,486
=========== =========== =========== =========== ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
WISCONSIN ELECTRIC POWER COMPANY
MANAGEMENT EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF THE PLAN
- --------------------------------
The following description of the Wisconsin Electric Power Company ("WE" or the
"Company") Management Employee Savings Plan ("MESP" or "Plan") provides only
general information. Participants should refer to the Plan agreement for a
more comprehensive description of the Plan's provisions.
General - The Plan is a defined contribution plan covering all management
employees of WE who are projected to complete at least 1000 hours of service
within one year from hire date. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
The Wisconsin Energy Corporation ("WEC") Board of Directors has approved the
merger of the MESP and a similar Plan for represented employees. The assets of
the two plans will be merged during 1997.
Contributions - Contributions are subject to certain limitations of the
Internal Revenue Code ("IRC"). Prior to 1996, participants were allowed to
contribute up to 15% of their pre-tax base wages, as defined in the Plan.
Effective January 1, 1996, participants are allowed to contribute up to 20% of
their pre-tax base wages, as defined in the Plan. Participants may also
contribute to the Plan, on a post-tax basis, and may contribute amounts
representing distributions from other qualified defined benefit or contribution
plans. The Company matches 50 percent of the first 6 percent of base wages up
to a maximum contribution of 3 percent of qualified compensation, as defined in
the Plan. All employer contributions are invested in the WEC Common Stock
Fund.
Participant Accounts - Each participant's account is credited with the
participant's contribution and allocations of (a) the Company's contribution
and (b) Plan earnings. Earnings on investments are not taxed while such
amounts accumulate in the Plan.
Vesting - Participants are immediately vested in their contributions plus
actual earnings thereon. Vesting in the Company's matching contribution
portion of their account plus actual earnings thereon occurs after the
participant achieves 1000 hours of service.
Investment Options - Participant contributions may be made, in whole
percentages, to any of the following ten investment options:
- Blended Rate Income Fund - This fund invests in a series of guaranteed
investment contracts from insurance companies or financial institutions
in order to provide a blended rate of return with a low risk to
principal.
- WEC Common Stock Fund - This fund invests in WEC common stock.
- Fidelity Equity Income Fund - This fund invests in securities with
above-average yields and the potential for future investment growth.
- Fidelity Growth Company Fund - This fund invests primarily in common
stocks and securities convertible into common stocks seeking long-term
capital appreciation.
- Fidelity U.S. Equity Index Commingled Pool - This fund attempts to
provide results corresponding to the total return performance of a broad
number of common stocks publicly traded in the United States, by
approximating the composition and total return of the Standard & Poor's
500-stock index.
- Fidelity Balanced Fund - This fund invests primarily in investment-grade
or higher bonds, and other high-yielding securities, including foreign
and domestic stocks. The fund seeks as much income as possible while
preserving capital.
- Fidelity Retirement Government Money Market Portfolio - This fund
invests in obligations issued or guaranteed as to principal and interest
by the U.S. government, its agencies and instrumentalities. The fund
seeks a high level of current income while preserving the principal
of its investors.
- Fidelity U.S. Bond Index Portfolio - This fund attempts to balance its
investments in U.S. government, corporate, mortgage and income
securities in the same proportion as their representation in the Lehman
Brothers Aggregate Bond Index, a U.S. investment-grade, fixed-income
index comprising approximately 6,500 securities.
- Fidelity Overseas Fund - This fund invests primarily in foreign
securities. The fund seeks long-term capital appreciation.
- Fidelity Low-Priced Stock Fund - This fund invests mainly in low-priced
common and preferred stock ($25 or less at time of purchase). This fund
seeks long-term capital appreciation.
The value of participant investments in the Blended Rate Income Fund grows
through interest earnings at negotiated interest rates, while investment growth
(loss) in mutual funds results from dividends plus a net increase (decrease) in
the market value of securities in the fund.
Participants may change their investment options daily.
Participant Withdrawals and Terminations - The full value of a participant's
MESP account is distributed through a lump-sum cash payment to the employee or
designated beneficiary upon retirement, termination of employment or death, for
account balances less than $3,500. Distributions of participant account
balances greater than $3,500 are based on participant elections in accordance
with the Plan provisions.
As the Plan is primarily designed to meet long-term financial needs, employees
may permanently withdraw amounts from their accounts only under the terms of
the Plan's financial hardship withdrawal guidelines.
Amounts paid from MESP accounts are subject to federal income tax upon
distribution.
Participant Notes Receivable - Participant may borrow from their fund accounts
up to a maximum of 50% of their account balance or $50,000 reduced by the
highest outstanding loan balance over the past 12 months. Loans are repayable
monthly over periods not to exceed 5 years. The interest rate charged on
participant loans is fixed at the beginning of each loan at prime rate at
Firstar Bank plus 1%.
Plan Termination - Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA. In the
event of Plan termination, participants will become 100 percent vested in their
accounts.
Tax Status - The Internal Revenue Service has determined and informed the
Company by a letter dated July 28, 1995, that the Plan and related trust are
designed in accordance with applicable sections of the IRC. The Plan has been
amended since receiving the determination letter. However, the Plan
administrator and the Plan's tax counsel believe that the Plan is designed and
is currently being operated in compliance with the applicable requirements of
the IRC.
Administration - A trustee is utilized in connection with the operation of the
Plan. The Chief Financial Officer and Treasurer of WEC serves as the Plan
Administrator.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------
Basis of Accounting - The Plan's financial statements are prepared on the
accrual basis of accounting.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Investment Valuation - The assets of the Plan are stated at fair value. The
assets within the Blended Rate Income Fund are guaranteed investment contracts
which are stated at contract value, which approximates fair value. Contract
value represents contributions made under the contract, plus interest at the
contract rate, less participant withdrawals. The other investments are stated
at fair value based on the quoted asset values on the last day of the Plan
year.
Income Recognition - Assets are recorded at market value and the Statements of
Changes in Net Assets Available for Benefits with fund information include
recognition of net unrealized appreciation or depreciation for the year on
assets held at year-end. Net unrealized appreciation or depreciation of
investments fluctuates based upon the market price of investments held.
Realized gains and losses are calculated in accordance with the Department of
Labor regulations. Under these regulations, realized gains and losses are
calculated as sale proceeds less the carrying value of the investment at the
beginning of the year or acquisition cost if acquired during the year. The
carrying value of the investment is calculated at each year-end, whereby the
original cost of the investment is adjusted to market value.
Interest and dividends are recorded as earned.
Payment of Benefits - Benefits are recorded when paid.
Expenses of the Plan - All significant administrative expenses are paid by the
Company, except for loan origination fees which are paid by the borrowing
participant and charged against the fund from which the borrowings are made.
Reclassifications - Certain reclassifications have been made to the
December 31, 1995 financial statements to conform to the current year
presentation.
NOTE 3 - PLAN TRANSFERS
- -----------------------
During the year ended December 31, 1996, plan transfers were comprised of
$558,151 transferred from the Wisconsin Electric Power Company Represented
Employee Savings Plan ("RESP") and $486,305 transferred from other qualified
defined benefit or contribution plans. Plan transfers for the year ended
December 31, 1995 were comprised of $565,753 and $148,559 of transfers in from
the RESP and other qualified plans, respectively.
NOTE 4 - AMOUNTS ALLOCATED TO WITHDRAWN PARTICIPANTS
- ----------------------------------------------------
Approximately $44,387,256 and $41,600,608 of plan assets have been allocated to
the accounts of persons who are no longer active participants of the Plan as of
December 31, 1996 and 1995, respectively. The following is a summary of the
amounts allocated to withdrawn participants:
December 31,
-------------
1996 1995
---- ----
Blended Rate Income Fund $13,162,422 $13,191,996
WEC Common Stock Fund 11,833,223 13,642,671
Fidelity Equity Income Fund 7,596,954 5,734,860
Fidelity Growth Company Fund 5,225,430 4,170,188
Fidelity US Equity Index Commingled Pool 4,058,503 2,754,167
Fidelity Balanced Fund 804,406 773,437
Fidelity Retirement Government Money
Market Portfolio 264,302 272,946
Fidelity US Bond Index Portfolio 289,852 268,492
Fidelity Overseas Fund 1,088,038 791,851
Fidelity Low-Priced Stock Fund 64,126 -
----------- -----------
$44,387,256 $41,600,608
=========== ===========
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
--------------------------------
MANAGEMENT EMPLOYEE SAVINGS PLAN
--------------------------------
I. ITEM 27a - Schedule of Assets Held for Investment Purposes
-------------------------------------------------------------
As of December 31, 1996
-----------------------
<CAPTION>
Description of investment including
Identity of issue, borrower, maturity date, rate of interest,
lessor, or similar party collateral, par or maturity value Cost Current Value
---------------------------------------------- ------------------------------------- ------------- -------------
<S> <C> <C> <C> <C>
Blended Rate Income Fund Various investment contracts $32,653,473 $32,653,473
WEC Common Stock Fund Mutual/pooled fund 28,124,995 45,708,902
Fidelity Equity Income Fund Mutual/pooled fund 21,540,054 27,600,948
Fidelity Growth Company Fund Mutual/pooled fund 18,235,935 22,148,582
Fidelity U.S. Equity Index Commingled Pool Mutual/pooled fund 9,203,349 14,615,664
Fidelity Balanced Fund Mutual/pooled fund 3,105,753 3,306,878
Fidelity Retirement Government Money Market
Portfolio Mutual/pooled fund 863,061 863,061
Fidelity U.S. Bond Index Portfolio Mutual/pooled fund 1,433,629 1,421,712
Fidelity Overseas Fund Mutual/pooled fund 5,183,284 5,604,367
Fidelity Low-Priced Stock Fund Mutual/pooled fund 597,585 604,951
Loan Fund Participant notes receivable 3,285,263 3,285,263
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
--------------------------------
MANAGEMENT EMPLOYEE SAVINGS PLAN
--------------------------------
II. Item 27d - Schedule of Reportable Transactions
--------------------------------------------------
For the Year Ended December 31, 1996
------------------------------------
<CAPTION>
(f) (h)
Expense Current value
(a) (b) (c) (d) (e) incurred (g) of asset on (i)
Identity of party Description Purchase Selling Lease with Cost of transaction Net gain
involved of Asset Price Price rental transaction Asset date or (loss)
- ----------------- ------------------------ ---------- ---------- ------ ----------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fidelity Blended Rate Income Fund
211 purchases $16,620,159 $16,620,159 $16,620,159
211 sales $16,205,274 N/A None 16,205,274 16,205,274 $0
Wisconsin Energy WEC Common Stock Fund
Corporation
230 purchases 7,509,000 7,509,000 7,509,000
216 sales 10,083,409 N/A None 7,247,639 10,083,409 2,835,770
Fidelity Equity Income Fund
228 purchases 9,862,030 9,862,030 9,862,030
158 sales 5,119,178 N/A None 4,643,866 5,119,178 475,312
Fidelity Growth Company Fund
236 purchases 11,822,505 11,822,505 11,822,505
156 sales 7,994,485 N/A None 7,431,066 7,994,485 563,419
</TABLE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-62157) of Wisconsin Energy Corporation of our
report dated June 23, 1997 appearing in this Exhibit 99.1 filed with Amendment
No. 1 (on Form 10-K/A) to the Wisconsin Energy Corporation December 31, 1996
Form 10-K.
/s/ Price Waterhouse LLP
- ---------------------------------
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
June 27, 1997
Exhibit 99.2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------------
Financial statements and schedules furnished in lieu of the
FORM 11-K
Annual Report
Pursuant to Rule 15d-21 under the
Securities Exchange Act of 1934
------------------------
For the fiscal year ended December 31, 1996
A. Full title of the Plan and the address of the Plan, if different
from that of the issuer named below:
WISCONSIN ELECTRIC POWER COMPANY
REPRESENTED EMPLOYEE SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the Plan and
the address of its principal executive office:
WISCONSIN ENERGY CORPORATION
231 West Michigan Street
P.O. Box 2949
Milwaukee, Wisconsin 53201
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrator has duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
WISCONSIN ELECTRIC POWER COMPANY
REPRESENTED EMPLOYEE SAVINGS PLAN
---------------------------------
Name of Plan
June 27, 1997 By /s/ Thomas H. Fehring
---------------------------------
Thomas H. Fehring, Savings Plan
Policy Committee Member
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Participants and
Plan Administrator of the
Wisconsin Electric Power Company
Represented Employee Savings Plan
In our opinion, the accompanying statements of net assets available for
benefits with fund information and the related statements of changes in net
assets available for benefits with fund information present fairly, in all
material respects, the net assets available for benefits of the Wisconsin
Electric Power Company Represented Employee Savings Plan (the "Plan") at
December 31, 1996 and 1995, and the changes in net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
the Plan's administrator; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by the plan administrator, and evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedule I and Schedule II is presented for the purpose of additional analysis
and is not a required part of the basic financial statements but is
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. The fund information in the statements of net assets
available for benefits and the statements of changes in net assets available
for benefits is presented for purposes of additional analysis rather than to
present the net assets available for plan benefits and changes in net assets
available for benefits of each fund. The supplemental schedules and fund
information 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 23, 1997
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
REPRESENTED EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
<CAPTION>
December 31, 1996
(Page 1 of 2)
--------------------------------------------------------------------------------
Participant-Directed
--------------------------------------------------------------------------------
Fidelity
WEC Fidelity Fidelity U.S. Equity
Blended Rate Common Equity Growth Index Fidelity
Income Stock Income Company Commingled Balanced
Fund Fund Fund Fund Pool Fund
------------ ----------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments, at fair value (Note 2)
Mutual and pooled funds $ 0 $65,335,953 $18,136,684 $15,936,890 $ 9,536,864 $2,656,467
Participant notes receivable 0 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
0 65,335,953 18,136,684 15,936,890 9,536,864 2,656,467
----------- ----------- ----------- ----------- ----------- ----------
Investments, at contract value
(Note 2) 25,564,914 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
Total Investments 25,564,914 65,335,953 18,136,684 15,936,890 9,536,864 2,656,467
----------- ----------- ----------- ----------- ----------- ----------
Cash 1,039,465 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
Net assets available
for benefits $26,604,379 $65,335,953 $18,136,684 $15,936,890 $ 9,536,864 $2,656,467
=========== =========== =========== =========== =========== ==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
REPRESENTED EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
(Continued)
<CAPTION>
December 31, 1996
(Page 2 of 2)
--------------------------------------------------------------------------------
Participant-Directed
--------------------------------------------------------------------------------
Fidelity
Retirement
Government Fidelity Fidelity
Money U.S. Bond Fidelity Low-Priced
Market Index Overseas Stock Loan
Portfolio Portfolio Fund Fund Fund Total
----------- ---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments, at fair value (Note 2)
Mutual and pooled funds $ 1,516,878 $ 1,080,282 $ 4,559,336 $ 416,072 $ 0 $119,175,426
Participant notes receivable 0 0 0 0 3,748,310 3,748,310
----------- ----------- ----------- ----------- ----------- ------------
1,516,878 1,080,282 4,559,336 416,072 3,748,310 122,923,736
----------- ----------- ----------- ----------- ----------- ------------
Investments, at contract value
(Note 2) 0 0 0 0 0 25,564,914
----------- ----------- ----------- ----------- ----------- ------------
Total Investments 1,516,878 1,080,282 4,559,336 416,072 3,748,310 148,488,650
----------- ----------- ----------- ----------- ----------- ------------
Cash 0 0 0 0 0 1,039,465
----------- ----------- ----------- ----------- ----------- ------------
Net assets available
for benefits $ 1,516,878 $ 1,080,282 $ 4,559,336 $ 416,072 $ 3,748,310 $149,528,115
=========== =========== =========== =========== =========== ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
REPRESENTED EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
<CAPTION>
December 31, 1995
(Page 1 of 2)
--------------------------------------------------------------------------------
Participant-Directed
--------------------------------------------------------------------------------
Fidelity
WEC Fidelity Fidelity U.S. Equity
Blended Rate Common Equity Growth Index Fidelity
Income Stock Income Company Commingled Balanced
Fund Fund Fund Fund Pool Fund
------------ ----------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments, at fair value (Note 2)
Mutual and pooled funds $ 0 $70,419,143 $12,894,154 $10,687,987 $ 6,386,870 $2,330,862
Participant notes receivable 0 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
0 70,419,143 12,894,154 10,687,987 6,386,870 2,330,862
----------- ----------- ----------- ----------- ----------- ----------
Investments, at contract value
(Note 2) 24,158,626 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
Total investments 24,158,626 70,419,143 12,894,154 10,687,987 6,386,870 2,330,862
----------- ----------- ----------- ----------- ----------- ----------
Cash 2,296,489 871,782 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
Net assets available
for benefits $26,455,115 $71,290,925 $12,894,154 $10,687,987 $ 6,386,870 $2,330,862
=========== =========== =========== =========== =========== ==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
REPRESENTED EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
(Continued)
<CAPTION>
December 31, 1995
(Page 2 of 2)
---------------------------------------------------------------
Participant-Directed
---------------------------------------------------------------
Fidelity
Retirement
Government Fidelity
Money U.S. Bond Fidelity
Market Index Overseas Loan
Portfolio Portfolio Fund Fund Total
------------ ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Assets
Investments at fair value (Note 2)
Mutual and pooled funds $1,343,051 $ 838,383 $2,887,928 $ 0 $107,788,378
Participant notes receivable 0 0 0 2,878,411 2,878,411
---------- ---------- ---------- ---------- ------------
1,343,051 838,383 2,887,928 2,878,411 110,666,789
---------- ---------- ---------- ---------- ------------
Investments, at contract value
(Note 2) 0 0 0 0 24,158,626
---------- ---------- ---------- ---------- ------------
Total investments 1,343,051 838,383 2,887,928 2,878,411 134,825,415
---------- ---------- ---------- ---------- ------------
Cash 0 0 0 0 3,168,271
---------- ---------- ---------- ---------- ------------
Net assets available
for benefits $1,343,051 $ 838,383 $2,887,928 $2,878,411 $137,993,686
========== ========== ========== ========== ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
REPRESENTED EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
<CAPTION>
For the Year Ended December 31, 1996
(Page 1 of 2)
--------------------------------------------------------------------------------------------
Participant-Directed
--------------------------------------------------------------------------------------------
Fidelity
WEC Fidelity Fidelity U.S. Equity
Blended Rate Common Equity Growth Index Fidelity
Income Stock Income Company Commingled Balanced
Fund Fund Fund Fund Pool Fund
------------ ------------ ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Additions
Additions to net assets
attributed to:
Investment income:
Interest and dividends $ 1,602,061 $ 1,321,688 $ 1,105,721 $ 680,465 $ 0 $ 116,879
Net (depreciation)
appreciation in fair
value of investments 0 (6,682,103) 1,839,271 1,345,626 1,615,020 104,366
----------- ----------- ----------- ----------- ----------- ----------
1,602,061 (5,360,415) 2,944,992 2,026,091 1,615,020 221,245
----------- ----------- ----------- ----------- ----------- ----------
Contributions:
Participants' 2,036,668 2,483,134 1,580,881 1,877,190 748,626 417,006
Employer's 0 2,971,574 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
2,036,668 5,454,708 1,580,881 1,877,190 748,626 417,006
----------- ----------- ----------- ----------- ----------- ----------
Total additions 3,638,729 94,293 4,525,873 3,903,281 2,363,646 638,251
----------- ----------- ----------- ----------- ----------- ----------
Deductions
Deductions from net assets
attributed to:
Administrative expense 0 7,098 74 0 0 0
Participant withdrawals 1,432,370 2,342,952 489,971 300,465 94,944 109,350
----------- ----------- ----------- ----------- ----------- ----------
Total deductions 1,432,370 2,350,050 490,045 300,465 94,944 109,350
----------- ----------- ----------- ----------- ----------- ----------
Net increase (decrease) prior
to interfund and plan transfers 2,206,359 (2,255,757) 4,035,828 3,602,816 2,268,702 528,901
Interfund transfers (1,957,844) (3,552,379) 1,287,793 1,724,412 924,712 (175,159)
Plan transfers (Note 3) (99,251) (146,836) (81,091) (78,325) (43,420) (28,137)
----------- ----------- ----------- ----------- ----------- ----------
Net increase (decrease) 149,264 (5,954,972) 5,242,530 5,248,903 3,149,994 325,605
Net assets available for
benefits:
Beginning of year 26,455,115 71,290,925 12,894,154 10,687,987 6,386,870 2,330,862
----------- ----------- ----------- ----------- ----------- ----------
End of year $26,604,379 $65,335,953 $18,136,684 $15,936,890 $ 9,536,864 $2,656,467
=========== =========== =========== =========== =========== ==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
REPRESENTED EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
(Continued)
<CAPTION>
For the Year Ended December 31, 1996
(Page 2 of 2)
--------------------------------------------------------------------------------------------
Participant-Directed
--------------------------------------------------------------------------------------------
Fidelity
Retirement
Government Fidelity Fidelity
Money U.S. Bond Fidelity Low-Priced
Market Index Overseas Stock Loan
Portfolio Portfolio Fund Fund Fund Total
----------- ----------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Additions
Additions to net assets
attributed to:
Investment income:
Interest and dividends $ 67,161 $ 67,432 $ 275,246 $ 3,707 $ 279,535 $ 5,519,895
Net (depreciation)
appreciation in fair
value of investments 0 (33,020) 194,973 4,997 0 (1,610,870)
----------- ----------- ----------- ----------- ----------- ------------
67,161 34,412 470,219 8,704 279,535 3,909,025
----------- ----------- ----------- ----------- ----------- ------------
Contributions:
Participants' 212,459 162,971 590,384 6,587 0 10,115,906
Employer's 0 0 0 0 0 2,971,574
----------- ----------- ----------- ----------- ----------- ------------
212,459 162,971 590,384 6,587 0 13,087,480
----------- ----------- ----------- ----------- ----------- ------------
Total additions 279,620 197,383 1,060,603 15,291 279,535 16,996,505
----------- ----------- ----------- ----------- ----------- ------------
Deductions
Deductions from net assets
attributed to:
Administrative expense 0 0 0 0 0 7,172
Participant withdrawals 80,093 22,337 23,224 0 39,338 4,935,044
----------- ----------- ----------- ----------- ----------- ------------
Total deductions 80,093 22,337 23,224 0 39,338 4,942,216
----------- ----------- ----------- ----------- ----------- ------------
Net increase (decrease) prior
to interfund and plan transfers 199,527 175,046 1,037,379 15,291 240,197 12,054,289
Interfund transfers (59,719) 75,283 660,674 400,781 671,446 0
Plan transfers (Note 3) 34,019 (8,430) (26,645) 0 (41,744) (519,860)
----------- ----------- ----------- ----------- ----------- ------------
Net increase (decrease) 173,827 241,899 1,671,408 416,072 869,899 11,534,429
Net assets available for
benefits:
Beginning of year 1,343,051 838,383 2,887,928 0 2,878,411 137,993,686
----------- ----------- ----------- ----------- ----------- ------------
End of year $ 1,516,878 $ 1,080,282 $ 4,559,336 $ 416,072 $ 3,748,310 $149,528,115
=========== =========== =========== =========== =========== ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
REPRESENTED EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
<CAPTION>
For the year ended December 31, 1995
(Page 1 of 2)
---------------------------------------------------------------------------------------------
Participant-Directed
---------------------------------------------------------------------------------------------
Fidelity
WEC Fidelity Fidelity U.S. Equity
Blended Rate Common Equity Growth Index Fidelity
Income Stock Income Company Commingled Balanced
Fund Fund Fund Fund Pool Fund
------------ ------------ ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Additions
Additions to net assets
attributed to:
Investment income:
Interest and dividends $ 1,655,655 $ 1,322,946 $ 707,286 $ 474,979 $ 0 $ 91,397
Net appreciation in fair
value of investments 0 13,014,571 2,082,538 1,856,645 1,543,670 197,620
----------- ----------- ----------- ----------- ----------- ----------
1,655,655 14,337,517 2,789,824 2,331,624 1,543,670 289,017
----------- ----------- ----------- ----------- ----------- ----------
Contributions:
Participants' 2,118,726 2,407,177 1,214,341 1,314,310 561,866 410,373
Employer's 0 2,812,058 0 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
2,118,726 5,219,235 1,214,341 1,314,310 561,866 410,373
----------- ----------- ----------- ----------- ----------- ----------
Total additions 3,774,381 19,556,752 4,004,165 3,645,934 2,105,536 699,390
----------- ----------- ----------- ----------- ----------- ----------
Deductions
Deductions from net assets
attributed to:
Benefits paid to
participants 2,503,778 2,227,434 543,042 218,119 91,177 177,694
----------- ----------- ----------- ----------- ----------- ----------
Total deductions 2,503,778 2,227,434 543,042 218,119 91,177 177,694
----------- ----------- ----------- ----------- ----------- ----------
Net increase prior to
interfund and plan transfers 1,270,603 17,329,318 3,461,123 3,427,815 2,014,359 521,696
Interfund transfers 1,703,339 (5,480,820) 1,291,669 2,092,658 572,030 (56,778)
Plan transfers (Note 3) (243,135) (142,281) (54,205) (38,406) (13,360) (2,381)
----------- ----------- ----------- ----------- ----------- ----------
Net increase (decrease) 2,730,807 11,706,217 4,698,587 5,482,067 2,573,029 462,537
Net assets available for
benefits:
Beginning of year 23,724,308 59,584,708 8,195,567 5,205,920 3,813,841 1,868,325
----------- ----------- ----------- ----------- ----------- ----------
End of year $26,455,115 $71,290,925 $12,894,154 $10,687,987 $ 6,386,870 $2,330,862
=========== =========== =========== =========== =========== ==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
REPRESENTED EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
(Continued)
<CAPTION>
For the year ended December 31, 1995
(Page 2 of 2)
-------------------------------------------------------------------------------
Participant-Directed
-------------------------------------------------------------------------------
Fidelity
Retirement
Government Fidelity
Money U.S. Bond Fidelity
Market Index Overseas Loan
Portfolio Portfolio Fund Fund Total
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Additions
Additions to net assets
attributed to:
Investment income:
Interest and dividends $ 74,165 $ 51,261 $ 68,977 $ 195,397 $ 4,642,063
Net appreciation in fair
value of investments 0 66,864 180,703 0 18,942,611
----------- ----------- ----------- ----------- ------------
74,165 118,125 249,680 195,397 23,584,674
----------- ----------- ----------- ----------- ------------
Contributions:
Participants' 210,810 148,207 525,460 0 8,911,270
Employer's 0 0 0 0 2,812,058
----------- ----------- ----------- ----------- ------------
210,810 148,207 525,460 0 11,723,328
----------- ----------- ----------- ----------- ------------
Total additions 284,975 266,332 775,140 195,397 35,308,002
----------- ----------- ----------- ----------- ------------
Deductions
Deductions from net assets
attributed to:
Benefits paid to
participants 130,824 49,889 65,851 78,850 6,086,658
----------- ----------- ----------- ----------- ------------
Total deductions 130,824 49,889 65,851 78,850 6,086,658
----------- ----------- ----------- ----------- ------------
Net increase prior to
interfund and plan transfers 154,151 216,443 709,289 116,547 29,221,344
Interfund transfers (423,584) (61,143) (264,851) 627,480 0
Plan transfers (Note 3) (34,260) (784) (14,673) (22,268) (565,753)
----------- ----------- ----------- ----------- ------------
Net increase (decrease) (303,693) 154,516 429,765 721,759 28,655,591
Net assets available for
benefits:
Beginning of year 1,646,744 683,867 2,458,163 2,156,652 109,338,095
----------- ----------- ----------- ----------- ------------
End of year $ 1,343,051 $ 838,383 $ 2,887,928 $ 2,878,411 $137,993,686
=========== =========== =========== =========== ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
WISCONSIN ELECTRIC POWER COMPANY
REPRESENTED EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF THE PLAN
- --------------------------------
The following description of the Wisconsin Electric Power Company ("WE" or the
"Company") Represented Employee Savings Plan ("RESP" or "Plan") provides only
general information. Participants should refer to the Plan agreement for a
more comprehensive description of the Plan's provisions.
General - The Plan is a defined contribution plan covering all represented
employees of WE (those represented by collective bargaining agreements) who are
projected to complete at least 1000 hours of service within one year from hire
date. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
The Wisconsin Energy Corporation ("WEC") Board of Directors has approved the
merger of the RESP and a similar plan for management employees. The assets of
the two plans will be merged during 1997.
Contributions - Contributions are subject to certain limitations of the
Internal Revenue Code ("IRC"). Prior to 1996, participants were allowed to
contribute up to 15% of their pre-tax base wages, as defined in the Plan.
Effective January 1, 1996, participants are allowed to contribute up to 20% of
their pre-tax base wages, as defined in the Plan. Participants may also
contribute to the Plan, on a post-tax basis, and may contribute amounts
representing distributions from other qualified defined benefit or contribution
plans. The Company matches 50 percent of the first 6 percent of base wages up
to a maximum contribution of 3 percent of qualified compensation, as defined in
the Plan. All employer contributions are invested in the WEC Common Stock
Fund.
Participant Accounts - Each participant's account is credited with the
participant's contribution and allocations of (a) the Company's contribution
and (b) Plan earnings. Earnings on investments are not taxed while such
amounts accumulate in the Plan.
Vesting - Participants are immediately vested in their contributions plus
actual earnings thereon. Vesting in the Company's matching contribution
portion of their account plus actual earnings thereon occurs after the
participant achieves 1000 hours of service.
Investment Options - Participant contributions may be made, in whole
percentages, to any of the following ten investment options:
- Blended Rate Income Fund - This fund invests in a series of guaranteed
investment contracts from insurance companies or financial institutions
in order to provide a blended rate of return with a low risk to
principal.
- WEC Common Stock Fund - This fund invests in WEC common stock.
- Fidelity Equity Income Fund - This fund invests in securities with
above-average yields and the potential for future investment growth.
- Fidelity Growth Company Fund - This fund invests primarily in common
stocks and securities convertible into common stocks seeking long-term
capital appreciation.
- Fidelity U.S. Equity Index Commingled Pool - This fund attempts to
provide results corresponding to the total return performance of a broad
number of common stocks publicly traded in the United States, by
approximating the composition and total return of the Standard & Poor's
500-stock index.
- Fidelity Balanced Fund - This fund invests primarily in investment-grade
or higher bonds, and other high-yielding securities, including foreign
and domestic stocks. The fund seeks as much income as possible while
preserving capital.
- Fidelity Retirement Government Money Market Portfolio - This fund
invests in obligations issued or guaranteed as to principal and interest
by the U.S. government, its agencies and instrumentalities. The fund
seeks a high level of current income while preserving the principal of
its investors.
- Fidelity U.S. Bond Index Portfolio - This fund attempts to balance its
investments in U.S. government, corporate, mortgage and income
securities in the same proportion as their representation in the Lehman
Brothers Aggregate Bond Index, a U.S. investment-grade, fixed-income
index comprising approximately 6,500 securities.
- Fidelity Overseas Fund - This fund invests primarily in foreign
securities. The fund seeks long-term capital appreciation.
- Fidelity Low-Priced Stock Fund - This fund invests mainly in low-priced
common and preferred stock ($25 or less at time of purchase). This fund
seeks long-term capital appreciation.
The value of participant investments in the Blended Rate Income Fund grows
through interest earnings at negotiated interest rates, while investment growth
(loss) in mutual funds results from dividends plus a net increase (decrease) in
the market value of securities in the fund.
Participants may change their investment options daily.
Participant Withdrawals and Terminations - The full value of a participant's
RESP account is distributed through a lump-sum cash payment to the employee or
designated beneficiary upon retirement, termination of employment or death, for
account balances less than $3,500. Distributions of participant account
balances greater than $3,500 are based on participant elections in accordance
with the Plan provisions.
As the Plan is primarily designed to meet long-term financial needs, employees
may permanently withdraw amounts from their accounts only under the terms of
the Plan's financial hardship withdrawal guidelines.
Amounts paid from RESP accounts are subject to federal income tax upon
distribution.
Participant Notes Receivable - Participants may borrow from their fund accounts
up to a maximum of 50% of their account balance or $50,000, reduced by the
highest outstanding loan balance over the past 12 months. Loans are repayable
monthly over periods not to exceed 5 years. The interest rate charged on
participant loans is fixed at the beginning of each loan at prime rate at
Firstar Bank plus 1%.
Plan Termination - Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA. In the
event of Plan termination, participants will become 100 percent vested in their
accounts.
Tax Status - The Internal Revenue Service has determined and informed the
Company by a letter dated September 21, 1995, that the Plan and related trust
are designed in accordance with applicable sections of the IRC. The Plan has
been amended since receiving the determination letter. However, the Plan
administrator and the Plan's tax counsel believe that the Plan is designed and
is currently being operated in compliance with the applicable requirements of
the IRC.
Administration - A trustee is utilized in connection with the operation of the
Plan. The Chief Financial Officer and Treasurer of WEC serves as the Plan
Administrator.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------
Basis of Accounting - The Plan's financial statements are prepared on the
accrual basis of accounting.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
Investment Valuation - The assets of the Plan are stated at fair value. The
assets within the Blended Rate Income Fund are guaranteed investment contracts
which are stated at contract value, which approximates fair value. Contract
value represents contributions made under the contract, plus interest at the
contract rate, less participant withdrawals. The other investments are stated
at fair value based on the quoted asset values on the last day of the Plan
year.
Income Recognition - Assets are recorded at market value and the Statement of
Changes in Net Assets Available for Benefits with fund information include
recognition of net unrealized appreciation or depreciation for the year on
assets held at year-end. Net unrealized appreciation or depreciation of
investments fluctuates based upon the market price of investments held.
Realized gains and losses are calculated in accordance with the Department of
Labor regulations. Under these regulations, realized gains and losses are
calculated as sale proceeds less the carrying value of the investment at the
beginning of the year or acquisition cost if acquired during the year. The
carrying value of the investment is calculated at each year-end, whereby the
original cost of the investment is adjusted to market value.
Interest and dividends are recorded as earned.
Payment of Benefits - Benefits are recorded when paid.
Expenses of the Plan - All significant administrative expenses are paid by the
Company, except for loan origination fees which are paid by the borrowing
participant and charged against the fund from which the borrowings are made.
Reclassifications - Certain reclassifications have been made to the
December 31, 1995 financial statements to conform to the current year
presentation.
NOTE 3 - PLAN TRANSFERS
- -----------------------
During the year ended December 31, 1996, $558,151 was transferred to the
Wisconsin Electric Power Company Management Employee Savings Plan ("MESP") and
$38,287 was transferred from other qualified defined benefit or contribution
plans. Plan transfers for the year ended December 31, 1995 were comprised
entirely of transfers to the MESP.
NOTE 4 - AMOUNTS ALLOCATED TO WITHDRAWN PARTICIPANTS
- ----------------------------------------------------
Approximately $25,786,397 and $22,866,620 of plan assets have been allocated to
the accounts of persons who are no longer active participants of the Plan as of
December 31, 1996 and 1995, respectively. The following is a summary of the
amounts allocated to withdrawn participants:
December 31,
-------------
1996 1995
---- ----
Blended Rate Income Fund $ 6,872,326 $ 5,880,191
WEC Common Stock Fund 11,773,958 12,302,807
Fidelity Equity Income Fund 3,065,689 2,048,221
Fidelity Growth Company Fund 1,451,352 1,024,706
Fidelity US Equity Index Commingled Pool 1,470,560 812,233
Fidelity Balanced Fund 391,319 261,283
Fidelity Retirement Government Money
Market Portfolio 244,115 270,036
Fidelity US Bond Index Portfolio 78,669 62,105
Fidelity Overseas Fund 411,632 205,038
Fidelity Low-Priced Stock Fund 26,777 -
----------- -----------
$25,786,397 $22,866,620
=========== ===========
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
--------------------------------
REPRESENTED EMPLOYEE SAVINGS PLAN
---------------------------------
I. ITEM 27a - Schedule of Assets Held for Investment Purposes
-------------------------------------------------------------
As of December 31, 1996
-----------------------
<CAPTION>
Description of investment including
Identity of issue, borrower, maturity date, rate of interest,
lessor, or similar party collateral, par or maturity value Cost Current Value
---------------------------------------------- ------------------------------------- ------------- -------------
<S> <C> <C> <C>
Blended Rate Income Fund Various investment contracts $25,564,914 $25,564,914
WEC Common Stock Fund Mutual/pooled fund 40,335,495 65,335,953
Fidelity Equity Income Fund Mutual/pooled fund 14,454,391 18,136,684
Fidelity Growth Company Fund Mutual/pooled fund 13,426,747 15,936,890
Fidelity U.S. Equity Index Commingled Pool Mutual/pooled fund 6,198,499 9,536,864
Fidelity Balanced Fund Mutual/pooled fund 2,478,394 2,656,467
Fidelity Retirement Government Money Market
Portfolio Mutual/pooled fund 1,516,878 1,516,878
Fidelity U.S. Bond Index Portfolio Mutual/pooled fund 1,084,343 1,080,282
Fidelity Overseas Fund Mutual/pooled fund 4,237,135 4,559,336
Fidelity Low-Priced Stock Fund Mutual/pooled fund 411,075 416,072
Loan Fund Participant notes receivable 3,748,310 3,748,310
</TABLE>
<PAGE> 17
<TABLE>
WISCONSIN ELECTRIC POWER COMPANY
---------------------------------
REPRESENTED EMPLOYEE SAVINGS PLAN
---------------------------------
II. Item 27d - Schedule of Reportable Transactions
--------------------------------------------------
For the Year Ended December 31, 1996
------------------------------------
<CAPTION>
(f) (h)
Expense Current value
(a) (b) (c) (d) (e) incurred (g) of asset on (i)
Identity of party Description Purchase Selling Lease with Cost of transaction Net gain
involved of Asset Price Price rental transaction Asset date or (loss)
- ----------------- ------------------------ ---------- ---------- ------ ----------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fidelity Blended Rate Income Fund
203 purchases $ 8,871,035 $ 8,871,035 $ 8,871,035
215 sales $8,721,770 N/A None 8,721,770 8,721,770 $0
Wisconsin Energy WEC Common Stock Fund
Corporation
242 purchases 10,365,510 10,365,510 10,365,510
225 sales 10,958,913 N/A None 7,782,191 10,958,913 3,176,722
Fidelity Growth Company Fund
230 purchases 7,075,587 7,075,587 7,075,587
156 sales 3,172,310 N/A None 2,890,271 3,172,310 282,039
</TABLE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-62159) of Wisconsin Energy Corporation of our
report dated June 23, 1997 appearing in this Exhibit 99.2 filed with Amendment
No. 1 (on Form 10-K/A) to the Wisconsin Energy Corporation December 31, 1996
Form 10-K.
/s/ Price Waterhouse LLP
- ---------------------------
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
June 27, 1997
