Wisconsin Energy Posts Third Quarter and Nine-Month Results

MILWAUKEE, Oct. 29 /PRNewswire-FirstCall/ -- Wisconsin Energy (NYSE: WEC) today reported net income from continuing operations of $59 million or 50 cents a share for the third quarter of 2009. This compares with net income from continuing operations of $77 million or 64 cents a share in the third quarter last year.

For the first nine months of 2009, net income from continuing operations reached $264 million or $2.24 a share. On a comparable basis, earnings for the first nine months of last year were $258 million or $2.18 a share.

Total sales of electricity declined by nearly 14.2 percent in this year's third quarter - driven in part by unusually cool summer weather and minimal demand for air conditioning.

Residential use of electricity fell by 10.2 percent in this year's third quarter. For the first nine months of 2009, usage by residential customers has fallen 4.8 percent.

Consumption of electricity by small commercial and industrial customers dropped by 6.9 percent and 4.9 percent, respectively, in the third quarter and first nine months of 2009.

Electricity use by large commercial and industrial customers was down by 13.6 percent in the third quarter and 17.7 percent compared to the first nine months of last year.

Third quarter 2009 revenues from continuing operations were $822 million. In the corresponding period last year, revenues from continuing operations were $852 million.

"Our third quarter performance reflects the impact of one of the coolest summers on record, the effects of a deep recession on our manufacturing customers, and the timing of fuel recoveries," said Gale Klappa, Wisconsin Energy's chairman, president and chief executive officer. "Despite these factors, we posted solid financial results in the first nine months of this year through effective cost reductions and productivity gains. Our focus remains on delivering world-class reliability for our customers at prices that are below the national average.

"The company's earnings guidance for this year remains in the range of $3.05 to $3.15 a share," Klappa added.

Earnings per share listed in this news release are on a fully diluted basis.

Conference Call
A conference call is scheduled for 1 p.m. Central time on Thursday, Oct. 29, 2009. The presentation will review 2009 third quarter earnings and will discuss the company's outlook for the future.

All interested parties, including stockholders, the news media and the general public, are invited to listen to the presentation. The conference call may be accessed by dialing 888-312-3051 up to 15 minutes before the call begins. International callers may dial 719-325-2220. The confirmation code is 1584701. Access also may be gained through the company's Web site (www.wisconsinenergy.com). Click on the icon for the "Third Quarter 2009 Earnings Release & Conference Call" and select "webcast audio." In conjunction with this earnings announcement, Wisconsin Energy will post on its Web site a package of detailed financial information on its third quarter performance. The materials will be available at 6 a.m. Central time on Oct. 29, 2009. An archive of the presentation will be available on the Web site after the call. A replay of the audio portion of the presentation will be available approximately two hours following the conclusion of the presentation and accessible through Nov. 11, 2009. Domestic callers should dial 888-203-1112. International callers should dial 719-457-0820. The replay confirmation code is 1584701.

Wisconsin Energy Corporation (NYSE: WEC), based in Milwaukee, is one of the nation's premier energy companies, serving more than 1.1 million electric customers in Wisconsin and Michigan's Upper Peninsula and more than 1 million natural gas customers in Wisconsin. The company's principal utilities are We Energies and Edison Sault Electric. The company's other major subsidiary, We Power, designs, builds and owns electric generating plants.

Wisconsin Energy Corporation (www.wisconsinenergy.com), a component of the S&P 500, has more than $12 billion of assets, approximately 5,000 employees and 48,000 stockholders of record.

Forward-Looking Statements

Certain statements contained in this release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements, including those related to management's expectations and projections regarding earnings, are based upon management's current expectations and are subject to risks and uncertainties that could cause Wisconsin Energy's actual results to differ materially from those contemplated in the statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those set forth in forward-looking statements. Factors that could cause Wisconsin Energy's actual results to differ materially from those contemplated in any forward-looking statements or otherwise affect our future results of operations and financial condition include, among others, the following: (i) factors affecting utility operations such as unusual weather conditions, catastrophic weather-related or terrorism-related damage, availability of electric generating facilities, unscheduled generation outages or unplanned maintenance or repairs, unanticipated events causing scheduled generation outages to last longer than expected, unanticipated changes in fossil fuel, purchased power, coal supply, gas supply or water supply costs or availability due to higher demand, shortages, transportation problems or other developments, nonperformance by electric energy or natural gas suppliers under existing power purchase or gas supply contracts, environmental incidents, electric transmission or gas pipeline system constraints, unanticipated organizational structure or key personnel changes, collective bargaining agreements with union employees or work stoppages or inflation rates; (ii) factors affecting the economic climate in the company's service territories such as customer growth, customer business conditions, including demand for their products and services and changes in market demand and demographic patterns; (iii) timing, resolution and impact of pending and future rate cases and negotiations, including recovery for new investments as part of the company's Power the Future strategy, environmental compliance, transmission service, fuel costs and costs associated with the implementation of the Midwest Independent Transmission System Operator's energy and operating reserves markets; (iv) regulatory factors such as changes in rate-setting policies or procedures, changes in regulatory accounting policies and practices, industry restructuring initiatives, transmission or distribution system operation and/or administration initiatives, required changes in facilities or operations to reduce the risks or impacts of potential terrorist activities, required approvals for new construction, and the siting approval process for new generation and transmission facilities and new pipeline construction; (v) increased competition in the company's electric and gas markets and continued industry consolidation; (vi) factors which impede or delay execution of the company's Power the Future strategy, including the adverse interpretation or enforcement of permit conditions by the permitting agencies, construction delays, and obtaining the investment capital from outside sources necessary to implement the strategy; (vii) factors which may affect successful implementation of the settlement agreement with the two parties who were challenging the water intake permit for the Oak Creek expansion, including regulatory approval of projects and costs contained in the agreement; (viii) the impact of recent and future federal, state and local legislative and regulatory changes, including electric and gas industry restructuring initiatives, changes to the Federal Power Act and related regulations under the Energy Policy Act and enforcement thereof by regulatory agencies, changes in allocation of energy assistance, including state public benefits funds, changes in environmental, tax and other laws and regulations to which we are subject and changes in the application of existing laws and regulations; (ix) restrictions imposed by various financing arrangements and regulatory requirements on the ability of the company's subsidiaries to transfer funds to it in the form of cash dividends, loans or advances; (x) the cost and other effects of legal and administrative proceedings, settlements, investigations, claims and changes in those matters; (xi) impacts of the significant contraction in the global credit markets affecting the availability and cost of capital; (xii) other factors affecting our ability to access the capital markets, including general capital market conditions, our capitalization structure, market perceptions of the utility industry, the company or any of its subsidiaries, and the company's credit ratings; (xiii) the investment performance of the company's pension and other post-retirement benefit plans; (xiv) the effect of accounting pronouncements issued periodically by standard setting bodies; (xv) unanticipated technological developments that result in competitive disadvantages and create the potential for impairment of existing assets; (xvi) changes in the creditworthiness of the counterparties with whom the company and its subsidiaries have contractual arrangements, including participants in the energy trading markets and fuel suppliers and transporters; (xvii) the cyclical nature of property values that could affect our real estate investments; (xviii) changes to the legislative or regulatory restrictions or caps on non-utility acquisitions, investments or projects, including the State of Wisconsin's public utility holding company law; and (xix) other business or investment considerations that may be disclosed from time to time in the company's SEC filings or in other publicly disseminated written documents, including the risk factors set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2008. Wisconsin Energy expressly disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Tables Follow

                           WISCONSIN ENERGY CORPORATION
                     CONSOLIDATED CONDENSED INCOME STATEMENTS
                                    (Unaudited)

                                              Three Months       Nine Months
                                                  Ended             Ended
                                               September 30      September 30
                                              -------------   ----------------
                                                2009    2008     2009     2008
                                                ----    ----     ----     ----
                                               (Millions of Dollars, Except
                                                     Per Share Amounts)

    Operating Revenues                        $821.9  $851.5 $3,060.6 $3,228.0

    Operating Expenses
      Fuel and purchased power                 292.6   344.1    812.6    980.4
      Cost of gas sold                          63.2    95.7    667.9    841.4
      Other operation and maintenance          303.8   320.0    946.5  1,022.7
      Depreciation, decommissioning
        and amortization                        87.3    84.0    259.4    242.1
      Property and revenue taxes                28.0    26.7     84.3     81.0
                                                ----    ----     ----     ----
    Total Operating Expenses                   774.9   870.5  2,770.7  3,167.6

    Amortization of Gain                        57.9   157.4    177.2    403.4
                                                ----   -----    -----    -----

    Operating Income                           104.9   138.4    467.1    463.8

    Equity in Earnings of Transmission
     Affiliate                                  14.9    14.4     43.6     38.0
    Other Income, net                           10.4     7.1     24.0     25.6
    Interest Expense, net                       38.4    38.8    119.0    113.4
                                                ----    ----    -----    -----

    Income from Continuing
      Operations Before Income Taxes            91.8   121.1    415.7    414.0

    Income Taxes                                33.1    44.5    152.1    156.2
                                                ----    ----    -----    -----

    Income from Continuing Operations           58.7    76.6    263.6    257.8

    Income (Loss) from Discontinued
      Operations, Net of Tax                    (0.2)    0.9      0.1      0.9
                                                ----     ---      ---      ---

    Net Income                                 $58.5   $77.5   $263.7   $258.7
                                               =====   =====   ======   ======

    Earnings Per Share (Basic)
         Continuing operations                 $0.50   $0.65    $2.26    $2.20
         Discontinued operations                   -    0.01        -     0.01
                                                 ---    ----      ---     ----
    Total Earnings Per Share (Basic)           $0.50   $0.66    $2.26    $2.21
                                               =====   =====    =====    =====

    Earnings Per Share (Diluted)
         Continuing operations                 $0.50   $0.64    $2.24    $2.18
         Discontinued operations                   -    0.01        -     0.01
                                                 ---    ----      ---     ----
    Total Earnings Per Share (Diluted)         $0.50   $0.65    $2.24    $2.19
                                               =====   =====    =====    =====

    Weighted Average Common
      Shares Outstanding (Millions)
         Basic                                 116.9   116.9    116.9    116.9
         Diluted                               118.0   118.2    117.9    118.2

    Dividends Per Share of Common Stock      $0.3375   $0.27  $1.0125    $0.81

                            WISCONSIN ENERGY CORPORATION
                        CONSOLIDATED CONDENSED BALANCE SHEETS

                                                      (Unaudited)
                                                       September      December
                                                       30, 2009       31, 2008
                                                      -----------     --------
                                                        (Millions of Dollars)
                         Assets
                         ------

      Net Property, Plant and Equipment                 $8,903.7      $8,502.6

      Investments
        Restricted cash                                     56.5         172.4
        Equity investment in transmission
         affiliate                                         303.3         276.3
        Other                                               37.7          41.6
                                                            ----          ----
            Total Investments                              397.5         490.3

      Current Assets
        Cash and cash equivalents                           10.7          32.5
        Restricted cash                                    180.5         214.1
        Accounts receivable                                309.5         369.5
        Accrued revenues                                   147.8         341.2
        Materials, supplies and inventories                388.9         344.7
        Regulatory assets                                   69.6          82.5
        Prepayments and other                              221.6         323.0
                                                           -----         -----
            Total Current Assets                         1,328.6       1,707.5

      Deferred Charges and Other Assets
        Regulatory assets                                1,186.3       1,261.1
        Goodwill                                           441.9         441.9
        Other                                              162.7         214.4
                                                           -----         -----
            Total Deferred Charges and Other
             Assets                                      1,790.9       1,917.4
                                                         -------       -------
      Total Assets                                     $12,420.7     $12,617.8
                                                       =========     =========

             Capitalization and Liabilities
             ------------------------------

      Capitalization
        Common equity                                   $3,486.9      $3,336.9
        Preferred stock of subsidiary                       30.4          30.4
        Long-term debt                                   3,631.2       4,074.7
                                                         -------       -------
            Total Capitalization                         7,148.5       7,442.0

      Current Liabilities
        Long-term debt due currently                       312.5          61.8
        Short-term debt                                    938.0         602.3
        Accounts payable                                   263.8         441.0
        Regulatory liabilities                             234.4         310.8
        Other                                              261.2         319.2
                                                           -----         -----
            Total Current Liabilities                    2,009.9       1,735.1

      Deferred Credits and Other Liabilities
        Regulatory liabilities                             949.2       1,084.4
        Deferred income taxes - long-term                  950.0         814.0
        Deferred revenue, net                              687.9         545.4
        Pension and other benefit obligations              316.9         635.0
        Other                                              358.3         361.9
                                                           -----         -----
            Total Deferred Credits and Other
             Liabilities                                 3,262.3       3,440.7
                                                         -------       -------
      Total Capitalization and Liabilities             $12,420.7     $12,617.8
                                                       =========     =========

                            WISCONSIN ENERGY CORPORATION
                  CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                    (Unaudited)

                                                                Nine Months
                                                                   Ended
                                                               September 30,
                                                              --------------
                                                                2009    2008
                                                                ----    ----
                                                               (Millions of
                                                                  Dollars)
      Operating Activities
        Net income                                            $263.7  $258.7
        Reconciliation to cash
          Depreciation, decommissioning and amortization       264.3   249.9
          Contribution to benefit plans                       (289.3)  (48.4)
          Working capital and other                            197.8   182.8
                                                               -----   -----
      Cash Provided by Operating Activities                    436.5   643.0

      Investing Activities
        Capital expenditures                                  (555.8) (888.9)
        Change in restricted cash                              149.5   280.7
        Unrestricted proceeds from asset sales                  15.7    13.8
        Other investing activities                             (88.0)  (87.3)
                                                               -----   -----
      Cash Used in Investing Activities                       (478.6) (681.7)

      Financing Activities
        Common stock issued (repurchased), net                  (8.5)   (9.9)
        Dividends paid on common stock                        (118.4)  (94.7)
        Change in debt, net                                    145.2   140.3
        Other financing activities, net                          2.0    (1.1)
                                                                 ---    ----
      Cash Provided by Financing Activities                     20.3    34.6
                                                                ----    ----

      Change in Cash                                           (21.8)   (4.1)

      Cash at Beginning of Period                               32.5    27.4
                                                                ----    ----

      Cash at End of Period                                    $10.7   $23.3
                                                               =====   =====