Exhibit 99.04
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information adjusts the
historical consolidated balance sheets and statements of income of the Company
and WEC's utility subsidiary, Wisconsin Electric Power Company (referred to
herein as WE) after giving effect to the proposed business combination
transaction (the Transaction) to form Primergy and a new subsidiary structure.
The unaudited pro forma combined condensed balance sheets at December 31, 1996
give effect to the Transaction as if it had occurred on that date. The
unaudited pro forma combined condensed statements of income for the periods
ended December 31, 1996, 1995, and 1994, give effect to the Transaction as if
it had occurred at January 1, 1994. 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 the Company and WE. 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. Completion of the Transaction is
subject to numerous conditions, many of which are beyond NSP's control.
Wisconsin Energy Company Pro Forma Combined Condensed Information
The pro forma financial information combines the historical financial
statements of the Company and WE after giving effect to the Transaction,
including the merger of the Company into Wisconsin Energy Company and the
transfer of certain Company gas distribution properties to New NSP.
WISCONSIN ENERGY COMPANY *
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 1996
(In thousands)
WE The Company Pro Forma Pro Forma
As Reported As Reported Adjustments Combined
Utility Operating
Revenues
Electric $1 393 270 $377 073 $1 770 343
Gas 364 875 88 756 453 631
Steam 15 675 15 675
Total Operating
Revenues 1 773 820 465 829 2 239 649
Utility Operating
Expenses
Electric production-
fuel and purchased
power 331 867 178 657 510 524
Cost of gas sold
and transported 234 254 58 347 292 601
Other operation 391 520 77 851 469 371
Maintenance 103 046 19 617 122 663
Depreciation and
amortization 202 796 35 731 238 527
Taxes other than
income taxes 77 866 14 332 92 198
Income taxes 126 627 24 688 151 315
Total Operating
Expenses 1 467 976 409 223 1 877 199
Utility Operating
Income 305 844 56 606 362 450
Other Income (Expenses) 11 746 1 016 12 762
Income Before Interest
Charges and Preferred
Dividends 317 590 57 622 375 212
Interest Charges 106 275 18 925 125 200
Net Income 211 315 38 697 250 012
Preferred Stock
Dividend Requirement 1 203 1 203
Earnings Available for
Common Stockholder $ 210 112 $ 38 697 $ 248 809
See accompanying notes to unaudited pro forma combined financial statements.
* In connection with the business combinations, WE will be renamed Wisconsin
Energy Company
Note: Earnings per share of common stock are not applicable because the
Wisconsin Energy Company common stock will be owned by Primergy.
WISCONSIN ENERGY COMPANY *
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 1995
(In thousands)
WE The Company Pro Forma Pro Forma
As Reported As Reported Adjustments Combined
Utility Operating
Revenues
Electric $1 437 480 $381 040 $1 818 520
Gas 318 262 78 058 396 320
Steam 14 742 14 742
Total Operating
Revenues 1 770 484 459 098 2 229 582
Utility Operating
Expenses
Electric production-
fuel and purchased
power 345 387 178 446 523 833
Cost of gas sold
and transported 188 764 52 356 241 120
Other operation 395 242 79 472 474 714
Maintenance 112 400 20 780 133 180
Depreciation and
amortization 183 876 33 097 216 973
Taxes other than
income taxes 74 765 14 109 88 874
Income taxes 141 029 24 662 165 691
Total Operating
Expenses 1 441 463 402 922 1 844 385
Utility Operating
Income 329 021 56 176 385 197
Other Income (Expenses) 21 272 2 143 23 415
Income Before Interest
Charges and Preferred
Dividends 350 293 58 319 408 612
Interest Charges 109 625 19 102 128 727
Net Income 240 668 39 217 279 885
Preferred Stock
Dividend Requirement 1 203 1 203
Earnings Available for
Common Stockholder $ 239 465 $ 39 217 $ 278 682
See accompanying notes to unaudited pro forma combined financial statements.
* In connection with the business combinations, WE will be renamed Wisconsin
Energy Company
Note: Earnings per share of common stock are not applicable because the
Wisconsin Energy Company common stock will be owned by Primergy.
WISCONSIN ENERGY COMPANY *
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 1994
(In thousands)
WE The Company Pro Forma Pro Forma
As Reported As Reported Adjustments Combined
Utility Operating
Revenues
Electric $1 403 562 $375 105 $1 778 667
Gas 324 349 76 715 401 064
Steam 14 281 14 281
Total Operating
Revenues 1 742 192 451 820 2 194 012
Utility Operating
Expenses
Electric production-
fuel and purchased
power 328 485 179 558 508 043
Cost of gas sold
and transported 199 511 53 484 252 995
Other operation 399 011 77 958 476 969
Maintenance 124 602 22 385 146 987
Depreciation and
amortization 177 614 30 774 208 388
Taxes other than
income taxes 76 035 13 710 89 745
Revitalization
Charges 73 900 73 900
Income taxes 99 761 19 077 118 838
Total Operating
Expenses 1 478 919 396 946 1 875 865
Utility Operating
Income 263 273 54 874 318 147
Other Income (Expenses) 25 334 1 245 26 579
Income Before Interest
Charges and Preferred
Dividends 288 607 56 119 344 726
Interest Charges 106 853 17 574 124 427
Net Income 181 754 38 545 220 299
Preferred Stock
Dividend Requirement 1 351 1 351
Earnings Available for
Common Stockholder $ 180 403 $ 38 545 $ 218 948
See accompanying notes to unaudited pro forma combined financial statements.
* In connection with the business combinations, WE will be renamed Wisconsin
Energy Company
Note: Earnings per share of common stock are not applicable because the
Wisconsin Energy Company common stock will be owned by Primergy.
NORTHERN STATES POWER COMPANY (WISCONSIN)
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
DECEMBER 31, 1996
(In thousands)
The Company Pro Forma The Company
Pro Forma Balance Sheet As Reported Adjustments As Adjusted
(Note 2)
Assets
Utility Plant
Electric $894 143 $894 143
Gas 99 817 (35 406) 64 411
Other 67 262 67 262
Total 1 061 222 (35 406) 1 025 816
Accumulated provision
for depreciation (395 619) 15 196 (380 423)
Nuclear fuel-net
Net Utility Plant 665 603 (20 210) 645 393
Current Assets 86 933 18 445 105 378
Other Assets 56 595 (1 183) 55 412
Total Assets $809 131 $(2 948) $806 183
Liabilities and Equity
Capitalization
Common stock equity $331 412 $331 412
Cumulative preferred
stock and premium
Long-term debt 231 688 231 688
Total Capitalization 563 100 563 100
Current Liabilities
Current portion of
long-term debt
Short-term debt 39 300 39 300
Other 50 112 50 112
Total Current
Liabilities 89 412 89 412
Other Liabilities 156 619 (2 948) 153 671
Total Capitalization
and Liabilities $809 131 $(2 948) $806 183
See accompanying notes to unaudited pro forma combined condensed financial
statements.
WISCONSIN ENERGY COMPANY*
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
DECEMBER 31, 1996
(In thousands)
Adjusted
WE The Company Pro Forma Pro Forma
Pro Forma Balance Sheet As Reported As Adjusted Adjustments Combined
(See Page 59) (Note 3)
Assets
Utility Plant
Electric $4 857 528 $894 143 $5 751 671
Gas 505 100 64 411 569 511
Other 61 765 67 262 129 027
Total 5 424 393 1 025 816 6 450 209
Accumulated provision
for depreciation (2 441 950) (380 423) (2 822 373)
Nuclear fuel-net 75 476
Net Utility Plant 3 057 919 645 393 3 703 312
Current Assets 540 825 105 378 646 203
Other Assets 908 416 55 412 (150 269) 813 559
Total Assets $4 507 160 $806 183 $(150 269) $5 163 074
Liabilities and Equity
Capitalization
Common stock equity $1 738 788 $331 412 $2 070 200
Cumulative preferred
stock and premium 30 450 30 450
Long-term debt 1 371 446 231 688 1 603 134
Total Capitalization 3 140 684 563 100 3 703 784
Current Liabilities
Current portion of
long-term debt 183 635 183 635
Short-term debt 45 390 39 300 84 690
Other 258 570 50 112 308 682
Total Current
Liabilities 487 595 89 412 577 007
Other Liabilities 878 881 153 671 (150 269) 882 283
Total Capitalization
and Liabilities $4 507 160 $806 183 $(150 269) $5 163 074
See accompanying notes to unaudited pro forma combined condensed financial
statements.
* In connection with the business combinations, WE will be renamed
Wisconsin Energy Company.
WISCONSIN ENERGY COMPANY *
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
1. The unaudited pro forma combined condensed financial statements
reflect the previously planned merger by WEC of its gas utility
subsidiary, Wisconsin Natural (WN), into WE to form a single
combined utility subsidiary. Completion of the planned merger
occurred on January 1, 1996.
As part of the Merger Transaction, the unaudited pro forma combined
condensed financial statements reflect the merger of the Company,
currently a wholly owned subsidiary of the Minnesota Company, into
Wisconsin Energy Company. At the time of the merger of the Company
into Wisconsin Energy Company, New NSP will acquire certain gas utility
assets in La Crosse and Hudson, Wisconsin from the Company.
2. A pro forma adjustment has been made in the Company's Unaudited Pro
Forma Condensed Balance Sheet at December 31, 1996 to reflect the sale
at net book value of the gas utility assets and liabilities of the
Company's divisions in La Crosse and Hudson, Wisconsin to New NSP.
Unaudited pro forma income statement amounts for Wisconsin Energy
Company do not reflect the transfer of the La Crosse and Hudson
divisions by the Company to New NSP. The revenues related to those
divisions for the twelve months ended December 31, 1996, 1995 and 1994
were $32,462,000, $28,897,000, and $26,779,000, respectively. The
amount of related expenses have not been quantified.
3. A pro forma adjustment has been made in the Wisconsin Energy Company
Unaudited Pro Forma Combined Condensed Balance Sheet at December 31,
1996 to conform the presentation of noncurrent deferred income taxes
into one net amount. All other financial statement presentation and
accounting policy differences are immaterial and have not been adjusted
in the unaudited pro forma combined condensed financial statements.
4. Intercompany transactions (including purchased power and exchanged power
transactions) between WE and the Company during the period presented
were not material and, accordingly, no pro forma adjustments were made
to eliminate such transactions.
5. The allocation between NSP and WEC and their customers of the estimated
cost savings resulting from the transactions contemplated by the Merger
Agreement, net of the costs incurred to achieve such savings, will be
subject to regulatory review and approval. None of these estimated cost
savings, the costs to achieve such savings, or transaction costs have
been reflected in the unaudited pro forma combined condensed financial
statements.
* In connection with the business combinations, WE will be renamed Wisconsin
Energy Company.