<TABLE>
<CAPTION>
Exhibit 99.3
WISCONSIN ENERGY CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
REFLECTING COMPLETION OF THE MERGER WITH WICOR, INC.
Twelve Months Ended December 31, 1999
Wisconsin Pro Forma Pro Forma
Energy WICOR Adjustments Combined
----------- --------- -------------- ------------
(In Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Operating Revenues $2,272,639 $1,010,113 $ - $3,282,752
Operating Expenses
Fuel 352,979 - - 352,979
Purchased power 235,101 - - 235,101
Cost of gas sold 174,046 297,222 - 471,268
Cost of goods sold - 357,704 - 357,704
Other operation and maintenance 708,758 204,290 607 (b)
3,290 (a) 916,945
Depreciation and amortization 270,484 37,091 18,322 (c)
6,622 (d) 332,519
Property and revenue tax 74,877 7,852 (3,290) (a) 79,439
---------- -------- -------- ----------
Operating Income 456,394 105,954 (25,551) 536,797
Other Income and Deductions 14,215 (1,589) - 12,626
Interest Charges and Other (150,473) (16,555) (74,995) (e) (242,023)
---------- -------- -------- ----------
Income Before Income Taxes 320,136 87,810 (100,546) 307,400
Provision (Benefit) for
Income Taxes 111,147 33,977 (33,712) (f) 111,412
---------- -------- -------- ----------
Net Income $208,989 $53,833 ($66,834) $195,988
========== ======== ======== ==========
Earnings Per Share
Basic $1.79 $1.67
Diluted $1.79 $1.65
Weighted Average Shares
Common shares outstanding 117,019 58 (h) 117,077
Diluted shares outstanding 117,019 1,527 (h) 118,546
<FN>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Information.
</FN>
</TABLE>
<TABLE>
<CAPTION>
WISCONSIN ENERGY CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT
REFLECTING COMPLETION OF THE MERGER WITH WICOR, INC.
Three Months Ended March 31, 2000
Wisconsin Pro Forma Pro Forma
Energy WICOR Adjustments Combined
----------- --------- -------------- ------------
(In Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Operating Revenues $627,750 $339,241 $ - $966,991
Operating Expenses
Fuel 94,553 - - 94,553
Purchased power 65,779 - - 65,779
Cost of gas sold 69,292 120,745 - 190,037
Cost of goods sold - 100,374 - 100,374
Other operation and maintenance 185,140 57,938 152 (b)
1,130 (a) 244,360
Depreciation and amortization 103,660 9,676 4,581 (c)
1,655 (d) 119,572
Property and revenue tax 20,727 2,338 (1,130) (a) 21,935
-------- -------- -------- ---------
Operating Income 88,599 48,170 (6,388) 130,381
Other Income and Deductions 37,392 (861) - 36,531
Interest Charges and Other (43,170) (5,139) (18,749) (e) (67,058)
-------- -------- -------- ---------
Income Before Income Taxes 82,821 42,170 (25,137) 99,854
Provision (Benefit) for
Income Taxes 32,227 16,182 (8,428) (f) 39,981
-------- -------- -------- ---------
Net Income $50,594 $25,988 ($16,709) $59,873
======== ======== ======== =========
Earnings Per Share
Basic $0.42 $0.50
Diluted $0.42 $0.50
Weighted Average Shares
Common shares outstanding 119,512 58 (h) 119,570
Diluted shares outstanding 119,512 587 (h) 120,099
<FN>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Information.
</FN>
</TABLE>
<TABLE>
<CAPTION>
WISCONSIN ENERGY CORPPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
REFLECTING COMPLETION OF THE MERGER WITH WICOR, INC.
March 31, 2000
Wisconsin Pro Forma Pro Forma
Energy WICOR Adjustments Combined
----------- --------- -------------- ------------
(In Thousands)
<S> <C> <C> <C> <C>
Assets
------
Property, Plant & Equipment $3,889,712 $459,560 $35,444 (g) $4,384,716
Investments 969,921 - 8,266 (a) 978,187
Current Assets
Cash & cash equivalents 24,746 7,738 - 32,484
Accounts receivable-net,
including accrued
utility revenues 366,165 243,729 - 609,894
Materials, supplies and
inventory 196,051 103,853 15,555 (g)
6,748 (a) 322,207
Prepayments and other
current assets 99,487 34,235 (5,919) (g)
(6,748) (a) 121,055
---------- ---------- --------- ----------
Total Current Assets 686,449 389,555 9,636 1,085,640
---------- ---------- --------- ----------
Deferred Charges and Other Assets
Goodwill 57,386 96,783 732,889 (g) 887,058
Regulatory assets 204,562 50,724 - 255,286
Accumulated deferred
income taxes 199,832 - - 199,832
Other assets, including prepaid
pension costs 190,154 96,645 185,988 (g)
(8,266) (a) 464,521
---------- ---------- --------- ----------
Total Deferred Charges
and Other Assets 651,934 244,152 910,611 1,806,697
---------- ---------- --------- ----------
Total Assets $6,198,016 $1,093,267 $963,957 $8,255,240
========== ========== ========= ==========
Capitalization and Liabilities
------------------------------
Capitalization
Common stock equity $2,034,985 $449,871 ($411,856) (g) $2,073,000
Preferred stock 30,450 - - 30,450
Wisconsin Energy-obligated
redeemable preferred
securities of subsidiary trust 200,000 - - 200,000
Long-term debt 2,135,505 213,234 (13,538) (g) 2,335,201
---------- ---------- --------- ----------
Total Capitalization 4,400,940 663,105 (425,394) 4,638,651
---------- ---------- --------- ----------
Current Liabilities
Short-term debt, including
long-term debt due currently 439,624 72,203 1,195,004 (h) 1,706,831
Accounts payable 191,196 88,172 - 279,368
Accrued liabilities and other 200,390 107,141 16,105 (g) 323,636
---------- ---------- --------- ----------
Total Current Liabilities 831,210 267,516 1,211,109 2,309,835
---------- ---------- --------- ----------
Deferred Credits and
Other Liabilities
Accumulated deferred
income taxes 624,325 55,931 48,625 (g) 728,881
Regulatory liabilities 123,160 25,747 181,557 (g) 330,464
Other, including postretirement
benefit obligation 218,381 80,968 (51,940) (g) 247,409
---------- ---------- --------- ----------
Total Deferred Credits and
Other Liabilities 965,866 162,646 178,242 1,306,754
---------- ---------- --------- ----------
Total Capitalization and
Liabilities $6,198,016 $1,093,267 $963,957 $8,255,240
========== ========== ========= ==========
<FN>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Information.
</FN>
</TABLE>
WISCONSIN ENERGY CORPORATION
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL INFORMATION
(In Thousands)
This unaudited pro forma financial information gives effect to the acquisition
of WICOR, Inc. by Wisconsin Energy Corporation on April 26, 2000, accounted for
as a purchase transaction under Accounting Principles Board Opinion No. 16,
Business Combinations. The pro forma information does not reflect anticipated
recurring savings arising from integrating the operations of the two companies
nor any costs to achieve such savings.
Wisconsin Energy's Unaudited Pro Forma Combined Condensed Financial Information
assumes that the WICOR acquisition occurred (1) as of January 1, 1999, for
purposes of the Unaudited Pro Forma Combined Condensed Income Statements and
(2) on March 31, 2000 for purposes of the Unaudited Pro Forma Combined Condensed
Balance Sheet.
a. Reclassification of amounts to conform the companies' historical
presentation.
b. Based upon revised actuarial information, WICOR's annual pension income
will decrease by $0.4 million and annual post retirement benefit expense will
increase by an additional $0.2 million (Net increase in expense
of $0.6 million per year or $0.2 million per quarter).
c. Amortization of goodwill over 40 years ($732.9 million/40 years = $18.3
million per year or $4.6 million per quarter).
d. Additional depreciation and amortization resulting from the increased fair
value of property, plant, and equipment and intangible assets acquired based
upon various estimated useful lives ($6.6 million per year or $1.7 million per
quarter).
e. Incremental interest expense based upon an assumed rate of 6.1%
($1.2 billion x 6.1% = $72.9 million per year or $18.2 million per quarter).
A 1/8 percent change in the interest rate would increase or decrease annual
interest expense by approximately $1.5 million. Related debt issue of
$2.7 million will be amortized over three years ($2.1 million for the first
year and $0.3 million for the remaining two years).
Wisconsin Energy initially funded the acquisition of WICOR through issuance
of $1.2 billion of commercial paper with a weighted average effective
interest rate of 6.1%. Wisconsin Energy has arranged for two new bank back-up
credit facilities to provide credit support for the issuance of Wisconsin
Energy's commercial paper: a $1.0 billion 364-day bank back-up credit facility
and a $500 million three-year bank back-up credit facility.
Wisconsin Energy may refinance all or a portion of the $1.2 billion of short-
term debt with medium or long-term debt. Any refinancing of the short-term
debt issued to acquire WICOR is not included in this pro forma financial
information.
f. Reduction of income taxes relating to the foregoing adjustments.
g. Adjustments to WICOR's assets acquired and liabilities assumed to reflect
fair value, purchase accounting adjustments and related tax effects.
The preliminary purchase price allocation, including the excess of the
purchase price over the fair value of net assets acquired at the date of
acquisition, is as follows:
<TABLE>
<S> <C>
Purchase price $1,242,343
Historical net book
value of assets acquired 462,646
----------
Excess of purchase price over
net book value of assets acquired 779,697
Allocated to:
Inventories (15,555)
Property, plant and equipment (35,444)
Intangible assets (63,093)
Prepaid pension asset (136,360)
Postretirement benefit obligation (60,788)
Regulatory liabilities 181,557
Deferred tax liabilities 54,544
Long-term debt (13,538)
Other current and noncurrent assets and liabilities 41,869
----------
Remaining excess of cost over
fair value of net assets acquired (goodwill) $732,889
==========
</TABLE>
Some of the foregoing purchase price allocations, which are currently being
finalized and may be revised at a later date, are based upon preliminary
studies and valuations of the fair value of the acquired assets and assumed
liabilities. Management does not believe that the final purchase price
allocations will produce materially different results than those reflected
herein.
h. Purchase price was financed with 100% debt. In addition, WICOR's equity-
based compensation awards outstanding at the effective time of the merger were
converted into 57,745 shares of restricted Wisconsin Energy common stock
($1.2 million), into options for up to 4,571,345 shares of Wisconsin Energy
common stock ($35.9 million) with a weighted average exercise price of $13.70
per share, and into deferred stock units payable in 105,520 shares of
Wisconsin Energy common stock. The purchase price also included $10.2 million
of transaction costs.
