Schedule I -- Condensed Parent Company Financial Statements

12 Months Ended

Dec. 31, 2014

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
	2014			2013			2012
	(Millions of Dollars)
Other Income, Net	$	2.8		$	3.1		$	3.2
Corporate Expense	26.8			5.5			4.8
Interest Expense	53.1			54.4			55.7
Loss before Taxes	(77.1		)	(56.8		)	(57.3		)
Income Tax Benefit	30.4			26.4			26.0
Loss after Taxes	(46.7		)	(30.4		)	(31.3		)
Equity in Subsidiaries' Continuing Operations	635.0			607.8			577.6
Net Income	$	588.3		$	577.4		$	546.3
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
	2014			2013			2012
	(Millions of Dollars)
Operating Activities
Net income	$	588.3		$	577.4		$	546.3
Reconciliation to cash
Equity in subsidiaries' earnings	(635.0		)	(607.8		)	(577.6		)
Dividends and distributions from subsidiaries	720.0			720.4			842.3
Deferred income taxes, net	60.1			(7.8		)	104.4
Accrued income taxes, net	4.1			66.8			(457.9		)
Change in - Other current assets	—			(0.1		)	0.2
Change in - Other current liabilities	5.1			(22.9		)	(6.7		)
Change in - Accounts receivable	(0.3		)	(2.7		)	22.5
Other, net	(8.1		)	(21.6		)	(8.1		)
Cash Provided by Operating Activities	734.2			701.7			465.4
Investing Activities
Capital contributions to associated companies	(225.5		)	(195.3		)	(21.5		)
Capitalized interest and other	5.0			4.0			12.6
Cash Used in Investing Activities	(220.5		)	(191.3		)	(8.9		)
Financing Activities
Exercise of stock options	50.3			48.5			49.8
Purchase of common stock	(123.2		)	(223.4		)	(153.9		)
Dividends paid on common stock	(352.0		)	(328.9		)	(276.3		)
Change in short-term debt	(72.0		)	5.0			(79.5		)
Change in notes payable due associated companies	3.5			(26.8		)	3.8
Other, net	16.7			14.6			—
Cash Used in Financing Activities	(476.7		)	(511.0		)	(456.1		)
Change in Cash and Cash Equivalents	37.0			(0.6		)	0.4
Cash and Cash Equivalents at Beginning of Year	0.3			0.9			0.5
Cash and Cash Equivalents at End of Year	$	37.3		$	0.3		$	0.9
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
	2014		2013
	(Millions of Dollars)
Assets
Current Assets
Cash and cash equivalents	$	37.3	$	0.3
Accounts and notes receivable from associated companies	37.8		37.4
Prepaid taxes and other	264.2		297.6
Total Current Assets	339.3		335.3
Property and Investments
Investment in subsidiary companies	4,917.8		4,761.8
Other	1.5		1.8
Total Property and Investments	4,919.3		4,763.6
Deferred Charges and Other Assets	118.7		143.2
Total Assets	$	5,377.3	$	5,242.1
Liabilities and Equity
Current Liabilities
Short-term debt	$	—	$	72.0
Notes payable due associated companies	117.2		113.8
Accrued taxes and other	22.4		11.8
Total Current Liabilities	139.6		197.6
Long-term debt	695.8		695.0
Other Long-term liabilities	122.2		116.5
Stockholder's equity	4,419.7		4,233.0
Total Liabilities and Equity	$	5,377.3	$	5,242.1
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 2014, Wisconsin Electric and Wisconsin Gas collectively provided Wisconsin Energy with $423.0 million of dividends, and We Power provided $297.0 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, 2014, the maturities of the Parent Company long-term debt outstanding were as follows:

	(Millions of Dollars)
2015	$	—
2016	—
2017	—
2018	—
2019	—
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.

Effective May 2017, the $500 million of Junior Notes will bear interest at the three-month LIBOR Rate plus 211.25 basis points and will reset quarterly.

In December 2014, Wisconsin Energy amended its bank back-up credit facility to extend its expiration from December 2017 to December 2019. 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, 2014, 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.    The carrying amount and estimated fair value of certain of our recorded financial instruments as of December 31 are as follows:

	2014				2013
	Carrying		Fair		Carrying		Fair
Financial Instruments	Amount		Value		Amount		Value
	(Millions of Dollars)
Long-term debt including current portion	$	700.0	$	770.0	$	700.0	$	749.4

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.

5.    During the year ended December 31, 2014, Wisconsin Energy paid $44.4 million in interest, net of amounts capitalized, and received $95.1 million in net refunds from income taxes. 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 net 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 net refunds from income taxes.