Schedule I -- Condensed Parent Company Financial Statements

12 Months Ended

Dec. 31, 2013

Schedule I -- Condensed Parent Company Financial Statements [Abstract]

SCHEDULE I - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS

WISCONSIN ENERGY CORPORATION

INCOME STATEMENTS

(Parent Company Only)

SCHEDULE I -- CONDENSED PARENT COMPANY

FINANCIAL STATEMENTS

	Year Ended December 31
	2013			2012			2011
	(Millions of Dollars)
Other Income, Net	$	3.1		$	3.2		$	2.7
Corporate Expense	5.5			4.8			4.8
Interest Expense	54.4			55.7			61.8
Loss before Taxes	(56.8		)	(57.3		)	(63.9		)
Income Tax Benefit	26.4			26.0			30.8
Loss after Taxes	(30.4		)	(31.3		)	(33.1		)
Equity in Subsidiaries' Continuing Operations	607.8			577.6			545.9
Income from Continuing Operations	577.4			546.3			512.8
Income from Discontinued Operations including Equity in Subsidiaries' Discontinued Operations	—			—			13.4
Net Income	$	577.4		$	546.3		$	526.2
See accompanying notes to condensed parent company financial statements.

WISCONSIN ENERGY CORPORATION

STATEMENTS OF CASH FLOWS

(Parent Company Only)

SCHEDULE I - CONDENSED PARENT COMPANY

FINANCIAL STATEMENTS - (Cont'd)

	Year Ended December 31
	2013			2012			2011
	(Millions of Dollars)
Operating Activities
Net income	$	577.4		$	546.3		$	526.2
Reconciliation to cash
Equity in subsidiaries' earnings	(607.8		)	(577.6		)	(545.9		)
Dividends and distributions from subsidiaries	720.4			842.3			995.5
Deferred income taxes, net	(7.8		)	104.4			(350.9		)
Accrued income taxes, net	66.8			(457.9		)	363.4
Change in - Other current assets	(0.1		)	0.2			(0.1		)
Change in - Other current liabilities	(22.9		)	(6.7		)	8.9
Change in - Accounts receivable	(2.7		)	22.5			(18.7		)
Other, net	(21.6		)	(8.1		)	(10.2		)
Cash Provided by Operating Activities	701.7			465.4			968.2
Investing Activities
Capital contributions to associated companies	(195.3		)	(21.5		)	(36.5		)
Capitalized interest and other	4.0			12.6			2.4
Cash Used in Investing Activities	(191.3		)	(8.9		)	(34.1		)
Financing Activities
Exercise of stock options	48.5			49.8			54.4
Purchase of common stock	(223.4		)	(153.9		)	(193.9		)
Dividends paid on common stock	(328.9		)	(276.3		)	(242.0		)
Retirement of long-term debt	—			—			(450.0		)
Change in short-term debt	5.0			(79.5		)	(116.5		)
Change in notes payable due associated companies	(26.8		)	3.8			3.9
Other, net	14.6			—			9.9
Cash Used in Financing Activities	(511.0		)	(456.1		)	(934.2		)
Change in Cash and Cash Equivalents	(0.6		)	0.4			(0.1		)
Cash and Cash Equivalents at Beginning of Year	0.9			0.5			0.6
Cash and Cash Equivalents at End of Year	$	0.3		$	0.9		$	0.5
See accompanying notes to condensed parent company financial statements.

WISCONSIN ENERGY CORPORATION

BALANCE SHEETS

(Parent Company Only)

SCHEDULE I - CONDENSED PARENT COMPANY

FINANCIAL STATEMENTS - (Cont'd)

	December 31
	2013		2012
	(Millions of Dollars)
Assets
Current Assets
Cash and cash equivalents	$	0.3	$	0.9
Accounts and notes receivable from associated companies	37.4		32.9
Prepaid taxes and other	297.6		176.3
Total Current Assets	335.3		210.1
Property and Investments
Investment in subsidiary companies	4,761.8		4,662.3
Other	1.8		2.1
Total Property and Investments	4,763.6		4,664.4
Deferred Charges and Other Assets	143.2		331.4
Total Assets	$	5,242.1	$	5,205.9
Liabilities and Equity
Current Liabilities
Short-term debt	$	72.0	$	67.0
Notes payable due associated companies	113.8		140.6
Accrued taxes and other	11.8		34.7
Total Current Liabilities	197.6		242.3
Long-term debt	695.0		694.3
Other Long-term liabilities	116.5		134.2
Stockholder's equity	4,233.0		4,135.1
Total Liabilities and Equity	$	5,242.1	$	5,205.9
See accompanying notes to condensed parent company financial statements.

WISCONSIN ENERGY CORPORATION

NOTES TO FINANCIAL STATEMENTS

(Parent Company Only)

SCHEDULE I - CONDENSED PARENT COMPANY

FINANCIAL STATEMENTS - (Cont'd)

1.    For Parent Company only presentation, investment in subsidiaries are accounted for using the equity method. The condensed Parent Company financial statements and notes should be read in conjunction with the consolidated financial statements and notes of Wisconsin Energy Corporation appearing in this Annual Report on Form 10-K.

2.    Wisconsin Energy's ability as a holding company to pay common dividends primarily depends on the availability of funds received from the Parent Company's non-utility subsidiary, We Power, and its principal utility subsidiaries, Wisconsin Electric and Wisconsin Gas. During 2013, Wisconsin Electric and Wisconsin Gas collectively provided Wisconsin Energy with $373.0 million of dividends, and We Power provided $347.4 million of distributions.

Various financing arrangements and regulatory requirements impose certain restrictions on the ability of the Parent Company's subsidiaries to transfer funds to the Parent Company in the form of cash dividends, loans or advances. In addition, under Wisconsin law, Wisconsin Electric and Wisconsin Gas are prohibited from loaning funds, either directly or indirectly, to the Parent Company.

Wisconsin Energy does not believe that these restrictions will materially affect the Parent Company's operations or limit any dividend payments in the foreseeable future.

3.    As of December 31, 2013, the maturities of the Parent Company long-term debt outstanding were as follows:

	(Millions of Dollars)
2014	$	—
2015	—
2016	—
2017	—
2018	—
Thereafter	700.0
Total	$	700.0

Wisconsin Energy amortizes debt premiums, discounts and debt issuance costs over the lives of the debt and includes the costs in interest expense.

Wisconsin Energy entered into a new bank back-up credit facility in December 2012. The facility contains customary covenants, including certain limitations on Wisconsin Energy's ability to sell assets. The credit facility also contains customary events of default, including payment defaults, material inaccuracy of representations and warranties, covenant defaults, bankruptcy proceedings, certain judgments, ERISA defaults and change of control. In addition, pursuant to the terms of the credit facility, Wisconsin Energy must ensure that certain of its subsidiaries comply with several of the covenants contained therein. In addition, Wisconsin Energy is required to maintain, subject to certain exclusions, a minimum total funded debt to capitalization ratio of less than 70%.

As of December 31, 2013, Wisconsin Energy was in compliance with all covenants.

WECC is a subsidiary of Wisconsin Energy and has $50 million of long-term notes outstanding. In a Support Agreement between WECC and Wisconsin Energy, Wisconsin Energy agreed to make sufficient liquid asset contributions to WECC to permit WECC to service its debt obligations as they become due.

4.    Wisconsin Energy and certain of its subsidiaries enter into various guarantees to provide financial and performance assurance to third parties on behalf of affiliates. As of December 31, 2013, Wisconsin Energy had the following guarantees which are eliminated upon consolidation and not included in the Wisconsin Energy Notes to Consolidated Statements:

	Maximum				Liability
	Potential		Outstanding		Recorded
	Future		as of		as of
	Payments		Dec 31, 2013		Dec 31, 2013
	(Millions of Dollars)
Wisconsin Energy Guarantees
Utility	$	3.8	$	3.8	$	—
Non-Utility Energy	55.5		—		—
Other	0.3		—		—
Total	$	59.6	$	3.8	$	—
Letters of Credit	$	0.1	$	0.1	$	—

Utility guarantees support obligations of the utility segment under surety bonds, worker's compensation and agreements.

Wisconsin Energy's guarantees in support of its non-utility energy segment guaranty performance and payment obligations of We Power. The guarantees which support We Power are for obligations under purchase, construction and lease agreements with the utility segment and third parties.

Wisconsin Energy has a guarantee that supports an environmental indemnification obligation, which is unlimited, associated with the Minergy Neenah plant and indemnifications related to the post-closing obligations under the Minergy Neenah sale agreement which was entered into in September 2006. In the event the guarantee fails to perform, Wisconsin Energy would be responsible for the obligations.

5.    The carrying amount and estimated fair value of certain of our recorded financial instruments as of December 31 are as follows:

	2013				2012
	Carrying		Fair		Carrying		Fair
Financial Instruments	Amount		Value		Amount		Value
	(Millions of Dollars)
Long-term debt including current portion	$	700.0	$	749.4	$	700.0	$	805.9

The carrying value of net accounts receivable, accounts payable and short-term borrowings approximates fair value due to the short-term nature of these instruments. The fair value of our long-term debt, including the current portion of long-term debt, and unamortized discount on debt, is estimated based upon quoted market value for the same or similar issues or upon the quoted market prices of U.S. Treasury issues having a similar term to maturity, adjusted for the Parent Company's bond rating and the present value of future cash flows.

6.    During the year ended December 31, 2013, Wisconsin Energy paid $44.4 million in interest, net of amounts capitalized, and received $86.1 million in refunds from income taxes. During the year ended December 31, 2012, Wisconsin Energy paid $45.2 million in interest, net of amounts capitalized, and received $128.2 million in refunds from income taxes. During the year ended December 31, 2011, Wisconsin Energy paid $57.7 million in interest, net of amounts capitalized, and received $114.6 million in refunds from income taxes.

Subsequent Event: On January 16, 2014, Wisconsin Electric's board of directors declared a special dividend of $50.0 million which was paid to Wisconsin Energy on January 30, 2014.