-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K7tEjy3jyO3M+Z2rdD//8yse/EDZXRPJpuls+dMPM6NNCHESz7Py77pTlEOaJ7Z+ lsNBq6920NxDgIWB4TqqdQ== 0000107815-97-000011.txt : 19970630 0000107815-97-000011.hdr.sgml : 19970630 ACCESSION NUMBER: 0000107815-97-000011 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970627 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WISCONSIN ENERGY CORP CENTRAL INDEX KEY: 0000783325 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 391391525 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09057 FILM NUMBER: 97631753 BUSINESS ADDRESS: STREET 1: 231 W MICHIGAN ST CITY: MILWAUKEE STATE: WI ZIP: 53201 BUSINESS PHONE: 4142212345 MAIL ADDRESS: STREET 1: PO BOX 2949 CITY: MILWAUKEE STATE: WI ZIP: 53201 10-K/A 1 AMENDMENT NO. 1 TO 1996 WEC FORM 10-K 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. EX-99.1 2 1996 ANNUAL REPORT - WEC MESP 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 WISCONSIN ELECTRIC POWER COMPANY MANAGEMENT EMPLOYEE SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
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 ------------ ----------- ----------- ----------- ------------ ---------- 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.
WISCONSIN ELECTRIC POWER COMPANY MANAGEMENT EMPLOYEE SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION (Continued)
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 ----------- ---------- ---------- ----------- ----------- ----------- 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.
WISCONSIN ELECTRIC POWER COMPANY MANAGEMENT EMPLOYEE SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
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 ------------ ----------- ----------- ----------- ------------ ---------- 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.
5 WISCONSIN ELECTRIC POWER COMPANY MANAGEMENT EMPLOYEE SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION (Continued)
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 ----------- ---------- ---------- ----------- ----------- 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.
WISCONSIN ELECTRIC POWER COMPANY MANAGEMENT EMPLOYEE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
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 ------------ ------------ ------------ ---------- ------------ ---------- 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.
WISCONSIN ELECTRIC POWER COMPANY MANAGEMENT EMPLOYEE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION (Continued)
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 ----------- ----------- ----------- ----------- ---------- ------------ 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.
WISCONSIN ELECTRIC POWER COMPANY MANAGEMENT EMPLOYEE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
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 ------------ ------------ ------------ ---------- ------------ ---------- 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.
WISCONSIN ELECTRIC POWER COMPANY MANAGEMENT EMPLOYEE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION (Continued)
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 ----------- ----------- ----------- ----------- ------------- 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.
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 =========== =========== WISCONSIN ELECTRIC POWER COMPANY -------------------------------- MANAGEMENT EMPLOYEE SAVINGS PLAN -------------------------------- I. ITEM 27a - Schedule of Assets Held for Investment Purposes ------------------------------------------------------------- As of December 31, 1996 -----------------------
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 ---------------------------------------------- ------------------------------------- ------------- ------------- 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
WISCONSIN ELECTRIC POWER COMPANY -------------------------------- MANAGEMENT EMPLOYEE SAVINGS PLAN -------------------------------- II. Item 27d - Schedule of Reportable Transactions -------------------------------------------------- For the Year Ended December 31, 1996 ------------------------------------
(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) - ----------------- ------------------------ ---------- ---------- ------ ----------- ---------- ------------- --------- 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
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 EX-99.2 3 1996 ANNUAL REPORT - WEC RESP 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 WISCONSIN ELECTRIC POWER COMPANY REPRESENTED EMPLOYEE SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
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 ------------ ----------- ----------- ----------- ------------ ---------- 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.
WISCONSIN ELECTRIC POWER COMPANY REPRESENTED EMPLOYEE SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION (Continued)
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 ----------- ---------- ---------- ----------- ----------- ----------- 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.
WISCONSIN ELECTRIC POWER COMPANY REPRESENTED EMPLOYEE SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
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 ------------ ----------- ----------- ----------- ------------ ---------- 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.
WISCONSIN ELECTRIC POWER COMPANY REPRESENTED EMPLOYEE SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION (Continued)
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 ------------ ---------- ---------- ----------- ----------- 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.
WISCONSIN ELECTRIC POWER COMPANY REPRESENTED EMPLOYEE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
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 ------------ ------------ ------------ ---------- ------------ ---------- 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.
WISCONSIN ELECTRIC POWER COMPANY REPRESENTED EMPLOYEE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION (Continued)
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 ----------- ----------- ----------- ----------- ---------- ------------ 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.
WISCONSIN ELECTRIC POWER COMPANY REPRESENTED EMPLOYEE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
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 ------------ ------------ ------------ ---------- ------------ ---------- 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.
WISCONSIN ELECTRIC POWER COMPANY REPRESENTED EMPLOYEE SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION (Continued)
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 ----------- ----------- ----------- ----------- ------------- 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.
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 =========== =========== WISCONSIN ELECTRIC POWER COMPANY -------------------------------- REPRESENTED EMPLOYEE SAVINGS PLAN --------------------------------- I. ITEM 27a - Schedule of Assets Held for Investment Purposes ------------------------------------------------------------- As of December 31, 1996 -----------------------
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 ---------------------------------------------- ------------------------------------- ------------- ------------- 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
17 WISCONSIN ELECTRIC POWER COMPANY --------------------------------- REPRESENTED EMPLOYEE SAVINGS PLAN --------------------------------- II. Item 27d - Schedule of Reportable Transactions -------------------------------------------------- For the Year Ended December 31, 1996 ------------------------------------
(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) - ----------------- ------------------------ ---------- ---------- ------ ----------- ---------- ------------- --------- 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
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 -----END PRIVACY-ENHANCED MESSAGE-----