Economic Industry Overview

William C. Dunkelberg Owl Fund

September 22nd, 2014

Company Overview

Wisconsin Energy Corporation generates and distributes electric energy. The company operates in two
segments, Utility Energy (91% of revenue) and Non-Utility Energy (9% of revenue). It generates electricity
from coal, natural gas, oil, hydroelectric, wind, and biomass. The company provides electric utility services
to customers in the paper, foundry, food products, and machinery production industries, as well as to the
retail chains. It also provides retail gas distribution services in the state of Wisconsin, as well as transports
customer-owned gas to paper, food products, and fabricated metal products industries; and generates,
distributes, and sells steam. In addition, the company invests in and develops real estate, including business
parks and other commercial real estate projects primarily in southeastern Wisconsin. The company was
founded in 1981 and is headquartered in Milwaukee, Wisconsin.

US nonresidential construction spending

The value of US nonresidential construction spending, a demand indicator for electric utilities, rose 7
percent year-to-date in July 2014 compared to the same period in 2013. Nonresidential construction
spending slipped in August, according to an Oct. 1 release from the U.S. Census Bureau. Nonresidential
construction spending shrank 1.2 percent on a monthly basis in August, but has still managed to expand 6
percent on a year-over-year basis. Spending for the month totaled $603.7 billion on a seasonally adjusted,
annualized basis.


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Wisconsin Energy
Corporation

Exchange: NYSE | Ticker: WEC | Sector: Energy

Economic Analysts:
Robert Kost Vicky Magginas
rkost@theowlfund.com vmagginas@theowlfund.com
Darmesh Patel GhishlainGuiebo
dpatel@theowlfund.com gguiebo@theowlfund.com

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Wisconsin Energy Corporation
NYSE: WEC


US personal income

US Personal income on average has increased 0.3% on a seasonally adjusted- month over month rate over the
past couple years. We saw a brief moment of disruption due to the fiscal cliff towards the beginning of 2013.




Value of US residential construction spending


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Wisconsin Energy Corporation
NYSE: WEC
Construction spending over the past 2 years has gained substantial traction and is at its highest levels since
June 2008.

Total US demand for electric power generation

Growth of electricity demand (including retail sales and direct use) has slowed in each decade since the 1950s,
from 9.8%/year from 1949 to 1959 to only 0.7%/year since 2000. Electricity demand growth remains
relatively low, as rising demand for electric services is offset by efficiency gains from new appliance standards
and investments in energy-efficient equipment. Total electricity demand grows by 29%.

Electricity demand varies with different assumptions about economic growth, advances in energy-efficient
technologies, and electricity prices. In the High Economic Growth case, electricity demand grows by 41%
from 2012 to 2040, compared with 20% in the Low Economic Growth case and only 14% in the Best
Available Demand Technology case. In the High Oil and Gas Resource Case, a 2% decline in electricity
prices from 2012 to 2040, because of greater natural gas availability, results in demand growth of 35% over
the same period. In contrast, in the Reference Case, electricity prices increase by 13% over the projection,
while demand increases by 29%.


US Industrial Production

U.S. industrial production fell in August for the first time since January, the latest sign of uneven
improvement in the economy. Industrial production, which measures the output of U.S. manufacturers,
utilities and mines, fell 0.1% in August from the prior month, the Federal Reserve said Monday. July's
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Wisconsin Energy Corporation
NYSE: WEC
increase was revised down to 0.2% from 0.4% and August capacity utilization fell 0.3 percentage point to a
78.8% rate.








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Wisconsin Energy Corporation
NYSE: WEC


DISCLAIMER
This report is prepared strictly for educational purposes and should not be used as an actual
investment guide. The forward looking statements contained within are simply the authors opinions.
TUIA STATEMENT
Established in honor of Professor William C. Dunkelberg, former Dean of the Fox School of
Business, for his tireless dedication to educating students in real-world principles of economics and
business, the William C. Dunkelberg (WCD) Owl Fund will ensure that future generations of students
have exposure to a challenging, practical learning experience. Managed by Fox School of Business
graduate and undergraduate students with oversight from its Board of Directors, the WCD Owl
Funds goals are threefold:
Provide students with hands-on investment management experience
Enable students to work in a team-based setting in consultation with investment
professionals.
Connect student participants with nationally recognized money managers and financial
institutions

Earnings from the fund will be reinvested net of fund expenses, which are primarily trading and
auditing costs and partial scholarships for student participants.