Exhibit 99.02
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information
adjusts the historical consolidated balance sheets and
statements of income of NSP and WEC after giving effect to their
proposed business combination transaction (the Transaction) to
form Primergy and a new subsidiary structure. The unaudited pro
forma combined condensed balance sheets at Dec. 31, 1995 give
effect to the Transaction as if it had occurred on that date.
The unaudited pro forma combined condensed statements of income
for each of the three years in the period ended Dec. 31, 1995
give effect to the Transaction as if it had occurred at Jan. 1,
1993. These statements are prepared on the basis of accounting
for the Transaction as a pooling of interests and are based on
the assumptions set forth in the notes thereto.
The following pro forma financial information has been
prepared from, and should be read in conjunction with, the
historical consolidated financial statements and related notes
thereto of NSP and WEC. The following information is not
necessarily indicative of the financial position or operating
results that would have occurred had the Transaction been
consummated on the date, or at the beginning of the periods, for
which the Transaction is being given effect nor is it
necessarily indicative of future operating results or financial
position.
Primergy Pro Forma Combined Condensed Information
The pro forma financial information combines the historical
financial statements of NSP and WEC after giving effect to the
Transaction to form Primergy.
PRIMERGY CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 1995
(In thousands, except per share amounts)
NSP WEC Pro Forma Pro Forma
(As Reported) (As Reported) Adjustments Combined
Utility Operating Revenues
Electric $2,142,770 $1,437,480 $0 $3,580,250
Gas 425,814 318,262 0 744,076
Steam 0 14,742 0 14,742
Total Operating Revenues 2,568,584 1,770,484 0 4,339,068
Utility Operating Expenses
Electric Production-Fuel and Purchased Power 570,245 345,387 0 915,632
Cost of Gas Sold & Transported 256,758 188,764 0 445,522
Other Operation 560,734 395,242 0 955,976
Maintenance 158,203 112,400 0 270,603
Depreciation and Amortization 290,184 183,876 0 474,060
Taxes Other Than Income Taxes 239,433 74,765 0 314,198
Income Taxes 147,148 141,029 0 288,177
Total Operating Expenses 2,222,705 1,441,463 0 3,664,168
Utility Operating Income 345,879 329,021 0 674,900
Other Income (Expense)
Equity Earnings of Unconsolidated Investees 59,067 0 0 59,067
Other Income and Deductions - Net (6,261) 16,821 0 10,560
Total Other Income (Expense) 52,806 16,821 0 69,627
Income before Interest Charges
and Preferred Dividends 398,685 345,842 0 744,527
Interest Charges 122,890 110,605 0 233,495
Preferred Dividends of Subsidiaries 12,449 1,203 0 13,652
Net Income $263,346 $234,034 $0 $497,380
Average Common Shares Outstanding (Note 1) 67,416 109,850 42,202 219,468
Earnings Per Common Share $3.91 $2.13 $2.27
NSP Equivalent Shares (Note 1) 67,416 109,850 (42,292) 134,974
Earnings Per Common Share using NSP Equivalent Shares $3.69
See accompanying notes to unaudited pro forma combined condensed financial statements.
PRIMERGY CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1994
(In thousands, except per share amounts)
NSP WEC Pro Forma Pro Forma
(As Reported) (As Reported) Adjustments Combined
Utility Operating Revenues
Electric $2,066,644 $1,403,562 $0 $3,470,206
Gas 419,903 324,349 0 744,252
Steam 0 14,281 0 14,281
Total Operating Revenues 2,486,547 1,742,192 0 4,228,739
Utility Operating Expenses
Electric Production-Fuel and Purchased Power 570,880 328,485 0 899,365
Cost of Gas Sold & Transported 263,905 199,511 0 463,416
Other Operation 535,706 399,011 0 934,717
Maintenance 170,145 124,602 0 294,747
Depreciation and Amortization 273,801 177,614 0 451,415
Taxes Other Than Income Taxes 234,564 76,035 0 310,599
Revitalization Charges 0 73,900 0 73,900
Income Taxes 129,228 99,761 0 228,989
Total Operating Expenses 2,178,229 1,478,919 0 3,657,148
Utility Operating Income 308,318 263,273 0 571,591
Other Income (Expense)
Equity Earnings of Unconsolidated Investees 41,709 0 0 41,709
Other Income and Deductions - Net 663 26,965 0 27,628
Total Other Income (Expense) 42,372 26,965 0 69,337
Income before Interest Charges
and Preferred Dividends 350,690 290,238 0 640,928
Interest Charges 107,215 108,019 0 215,234
Preferred Dividends of Subsidiaries 12,364 1,351 0 13,715
Net Income $231,111 $180,868 $0 $411,979
Average Common Shares Outstanding (Note 1) 66,845 108,025 41,845 216,715
Earnings Per Common Share $3.46 $1.67 $1.90
NSP Equivalent Shares (Note 1) 66,845 108,025 (41,589) 133,281
Earnings Per Common Share using NSP Equivalent Shares $3.09
See accompanying notes to pro forma combined condensed financial statements.
PRIMERGY CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1993
(In thousands, except per share amounts)
NSP WEC Pro Forma Pro Forma
(As Reported) (As Reported) Adjustments Combined
Utility Operating Revenues
Electric $1,974,916 $1,347,844 $0 $3,322,760
Gas 429,076 331,301 0 760,377
Steam 0 14,090 0 14,090
Total Operating Revenues 2,403,992 1,693,235 0 4,097,227
Utility Operating Expenses
Electric Production-Fuel and Purchased Power 524,126 318,265 0 842,391
Cost of Gas Sold & Transported 282,036 214,132 0 496,168
Other Operation 516,560 399,135 0 915,695
Maintenance 161,413 156,085 0 317,498
Depreciation and Amortization 264,517 167,066 0 431,583
Taxes Other Than Income Taxes 223,108 74,653 0 297,761
Revitalization Charges 0 0 0 0
Income Taxes 128,346 98,463 0 226,809
Total Operating Expenses 2,100,106 1,427,799 0 3,527,905
Utility Operating Income 303,886 265,436 0 569,322
Other Income (Expense)
Equity Earnings of Unconsolidated Investees 3,030 0 0 3,030
Other Income and Deductions - Net 12,916 32,073 0 44,989
Total Other Income (Expense) 15,946 32,073 0 48,019
Income before Interest Charges
and Preferred Dividends 319,832 297,509 0 617,341
Interest Charges 108,092 102,997 0 211,089
Preferred Dividends of Subsidiaries 14,580 4,377 0 18,957
Net Income $197,160 $190,135 $0 $387,295
Average Common Shares Outstanding (Note 1) 65,211 105,878 40,822 211,911
Earnings Per Common Share $3.02 $1.80 $1.83
NSP Equivalent Shares (Note 1) 65,211 105,878 (40,762) 130,327
Earnings Per Common Share using NSP Equivalent Shares $2.97
See accompanying notes to pro forma combined condensed financial statements.
PRIMERGY CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEETS
DECEMBER 31, 1995
(In thousands)
NSP WEC Pro Forma Pro Forma
Pro Forma Balance Sheet (As Reported)(As Reported) Adjustments Combined
ASSETS
UTILITY PLANT
Electric $6,553,383 $4,608,120 $0 $11,161,503
Gas 710,035 491,176 0 1,201,211
Other 299,585 40,078 0 339,663
Total 7,563,003 5,139,374 0 12,702,377
Accumulated provision for depreciation (3,343,760) (2,288,080) 0 (5,631,840)
Nuclear fuel - net 91,098 59,260 0 150,358
Net utility plant 4,310,341 2,910,554 0 7,220,895
CURRENT ASSETS
Cash and cash equivalents 28,794 23,626 0 52,420
Accounts receivable - net 360,577 150,149 0 510,726
Accrued utility revenues 112,650 140,201 0 252,851
Fossil fuel inventories 43,941 83,366 0 127,307
Material & supplies inventories 100,607 70,347 0 170,954
Prepayments and other 57,894 63,830 0 121,724
Total current assets 704,463 531,519 0 1,235,982
OTHER ASSETS
Regulatory Assets 374,212 309,280 0 683,492
External decommissioning fund 203,625 275,125 0 478,750
Investments in non-regulated projects
and other investments 289,495 110,145 0 399,640
Non-regulated property - net 177,598 115,392 0 292,990
Intangible assets and other (Note 4) 168,851 308,720 (140,844) 336,727
Total other assets 1,213,781 1,118,662 (140,844) 2,191,599
TOTAL ASSETS $6,228,585 $4,560,735 ($140,844) $10,648,476
LIABILITIES AND EQUITY
CAPITALIZATION
Common stock equity:
Common stock (Note 1) $170,440 $1,108 ($169,331) $2,217
Other stockholders' equity (Note 1) 1,856,951 1,870,157 169,331 3,896,439
Total common stock equity 2,027,391 1,871,265 0 3,898,656
Cumulative preferred stock and premium 240,469 30,451 0 270,920
Long-term debt 1,542,286 1,367,644 0 2,909,930
Total capitalization 3,810,146 3,269,360 0 7,079,506
CURRENT LIABILITIES
Current portion of long-term debt 167,360 51,854 0 219,214
Short-term debt 216,194 156,919 0 373,113
Accounts payable 246,051 108,508 0 354,559
Taxes accrued 202,777 20,072 0 222,849
Other accrued liabilities 158,991 98,753 0 257,744
Total current liabilities 991,373 436,106 0 1,427,479
OTHER LIABILITIES
Deferred income taxes (Note 4) 841,153 483,410 (140,844) 1,183,719
Deferred investment tax credits 161,513 89,672 0 251,185
Regulatory liabilities 242,787 167,483 0 410,270
Other liabilities and deferred credits 181,613 114,704 0 296,317
Total other liabilities 1,427,066 855,269 (140,844) 2,141,491
TOTAL CAPITALIZATION AND LIABILITIES $6,228,585 $4,560,735 ($140,844) $10,648,476
See accompanying notes to unaudited pro forma combined condensed financial statements.
PRIMERGY CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL
STATEMENTS
1. The pro forma combined condensed financial statements
reflect the conversion of each share of NSP common stock
outstanding ($2.50 par value) into 1.626 shares of Primergy
Common Stock ($.01 par value) and the continuation of each
share of WEC Common Stock outstanding as one share of
Primergy common stock ($.01 par value), as provided in the
Merger Agreement. The pro forma combined condensed
financial statements are presented as if the companies were
combined during all periods included therein.
NSP equivalent shares shown on the pro forma combined condensed
income statements represent the pro forma equivalent of one share
of NSP Common Stock calculated by multiplying the pro forma
information by the conversion ratio of 1.626 shares of Primergy
Common Stock for each share of NSP Common Stock.
2. The allocation between NSP and WEC and their customers of
the estimated cost savings, resulting from the Transaction,
net of the costs incurred to achieve such savings, will be
subject to regulatory review and approval. Cost savings
resulting from the Transaction are estimated to be approximately
$2 billion over a 10-year period, net of transaction costs
(including fees for financial advisors, attorneys, accountants,
consultants, filings and printing) and net of costs to achieve the
savings of approximately $30 million and $122 million,
respectively. None of the estimated cost savings, the costs
to achieve such savings, or the transaction costs have been
reflected in the pro forma combined condensed financial statements.
3. Intercompany transactions (including purchased and
exchanged power transactions) between NSP and WEC during
the periods presented were not material and, accordingly,
no pro forma adjustments were made to eliminate such
transactions.
4. A pro forma adjustment has been made to conform the
presentation of noncurrent deferred income taxes in the pro
forma combined condensed balance sheet into one net amount.
All other report presentation and accounting policy
differences are immaterial and have not been adjusted in
the pro forma combined condensed financial statements.
5. Certain reclassifications have been made to the 1994 and
1993 NSP financial statements to conform with the 1995
presentation. These reclassifications had no effect on net
income or earnings per share.