WEC Energy Group posts first-quarter results
WEC Energy Group posts first-quarter results
Reaffirms earnings guidance of $3.26 to $3.30 per share, with an expectation of reaching the top end of the range
MILWAUKEE, May 1, 2018 /PRNewswire/ -- WEC Energy Group (NYSE: WEC) recorded net income of $390.1 million, or $1.23 per share, for the first quarter of 2018 - up from $356.6 million, or $1.12 per share, for the first quarter of 2017.
Consolidated revenues totaled $2.3 billion for the first quarter of 2018, level with last year's first quarter.
"The solid results we posted for the opening quarter of 2018 were driven by stronger than expected demand for both natural gas and electricity," said Gale Klappa, Chairman and Chief Executive Officer. "Colder winter temperatures, a strengthening economy, and efficiency gains across our system were all positive factors that lifted our earnings above year ago levels," he added.
Natural gas deliveries in Wisconsin, excluding gas used for power generation, rose by 11.2 percent in the first quarter of 2018, compared to the first quarter of 2017. On a weather-normal basis, natural gas deliveries grew by 4.9 percent.
Retail deliveries of electricity by the Wisconsin and Michigan utilities - excluding the iron ore mine in Michigan's Upper Peninsula - increased by 1.6 percent, compared to the first quarter of 2017.
Residential electricity use rose by 4.6 percent. In the large commercial and industrial segment - excluding the iron ore mine - electricity use was 0.7 percent higher. Electricity consumption by small commercial and industrial customers was up 0.1 percent from the year ago quarter.
Overall, on a weather-normal basis, retail deliveries of electricity - excluding the iron ore mine - were even with last year's first quarter.
At the end of March, the WEC Energy Group utilities were serving approximately 9,000 more electric and 27,000 more natural gas customers than at the same time a year ago.
The company is reaffirming its earnings guidance of $3.26 to $3.30 per share, with an expectation of reaching the top end of the range, assuming normal weather for the remainder of the year.
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 Tuesday, May 1. The call will review 2018 first-quarter earnings and the company's outlook for the future.
All interested parties, including stockholders, news media and the general public, are invited to listen. Access the call at 844-840-1623 up to 15 minutes before it begins. The number for international callers is 631-625-3204. The conference ID is 6377454.
Conference call access also is available at wecenergygroup.com. Select 'First Quarter Earnings Release and Conference Call' and then select 'Webcast.' In conjunction with this earnings announcement, WEC Energy Group will post on its website a package of detailed financial information on its first-quarter performance. The materials will be available at 6:30 a.m. Central time on Tuesday, May 1.
Replay
A replay will be available on the website and by phone approximately two hours after the call. The phone replay will remain accessible through May 14, 2018. Domestic callers should dial 855-859-2056. International callers should dial 404-537-3406. The replay conference ID is 6377454.
WEC Energy Group (NYSE: WEC), based in Milwaukee, is one of the nation's premier energy companies, serving 4.5 million customers in Wisconsin, Illinois, Michigan and Minnesota.
The company's principal utilities are We Energies, Wisconsin Public Service, Peoples Gas, North Shore Gas, Michigan Gas Utilities, Minnesota Energy Resources and Upper Michigan Energy Resources. The company's other major subsidiary, We Power, designs, builds and owns electric generating plants.
WEC Energy Group (wecenergygroup.com), is a Fortune 500 company and a component of the S&P 500. The company has approximately 50,000 stockholders of record, 8,000 employees, and more than $31 billion of assets.
Forward-looking Statements
Certain statements contained in this press 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 are based upon management's current expectations and are subject to risks and uncertainties that could cause our actual results to differ materially from those contemplated in the statements. Readers are cautioned not to place undue reliance on these statements. Forward-looking statements include, among other things, statements concerning management's expectations and projections regarding earnings and future results. In some cases, forward-looking statements may be identified by reference to a future period or periods or by the use of forward-looking terminology such as "anticipates," "believes," "estimates," "expects," "forecasts," "guidance," "intends," "may," "objectives," "plans" "possible," "potential," "projects," "should," "targets," "will" or similar terms or variations of these terms.
Factors that could cause actual results to differ materially from those contemplated in any forward-looking statements include, but are not limited to: general economic conditions, including business and competitive conditions in the company's service territories; timing, resolution and impact of rate cases and other regulatory decisions; the company's ability to continue to successfully integrate the operations of its subsidiaries; availability of the company's generating facilities and/or distribution systems; unanticipated changes in fuel and purchased power costs; key personnel changes; varying weather conditions; continued industry consolidation; continued adoption of distributed generation by the company's customers; energy conservation efforts; cyber-security threats and data security breaches; construction risks; equity and bond market fluctuations; changes in the company's and its subsidiaries' ability to access the capital markets; the impact of tax reform and any other legislative and regulatory changes, including changes to environmental standards; political developments; current and future litigation and regulatory investigations; changes in accounting standards; the financial performance of the American Transmission Company; goodwill and its possible impairment; and other factors described under the heading "Factors Affecting Results, Liquidity and Capital Resources" in Management's Discussion and Analysis of Financial Condition and Results of Operations and under the headings "Cautionary Statement Regarding Forward-Looking Information" and "Risk Factors" contained in the company's Form 10-K for the year ended Dec. 31, 2017 and in subsequent reports filed with the Securities and Exchange Commission. The company expressly disclaims any obligation to publicly update or revise any forward-looking information.
Tables follow
WEC ENERGY GROUP, INC.
CONDENSED
CONSOLIDATED
INCOME
STATEMENTS
(Unaudited) Three Months Ended
March 31
(in millions,
except per
share
amounts) 2018 2017
------------- ---- ----
Operating
revenues $2,286.5 $2,304.5
Operating
expenses
Cost of sales 972.1 941.1
Other
operation
and
maintenance 511.9 504.5
Depreciation
and
amortization 208.6 194.6
Property and
revenue
taxes 48.8 49.6
---- ----
Total
operating
expenses 1,741.4 1,689.8
---------- ------- -------
Operating
income 545.1 614.7
Equity in
earnings of
transmission
affiliates 32.8 41.9
Other income,
net 7.5 18.3
Interest
expense 106.7 104.7
----- -----
Other expense (66.4) (44.5)
------------- ----- -----
Income before
income taxes 478.7 570.2
Income tax
expense 88.3 213.3
---- -----
Net income 390.4 356.9
Preferred
stock
dividends of
subsidiary 0.3 0.3
---
Net income
attributed
to common
shareholders $390.1 $356.6
------------- ------ ------
Earnings per
share
Basic $1.24 $1.13
Diluted $1.23 $1.12
Weighted
average
common
shares
outstanding
Basic 315.5 315.6
Diluted 316.9 317.2
Dividends per
share of
common stock $0.5525 $0.5200
------------- ------- -------
WEC ENERGY GROUP, INC.
CONDENSED CONSOLIDATED
BALANCE SHEETS (Unaudited) March 31, 2018 December 31,
2017
(in millions, except share
and per share amounts)
--------------------------
Assets
Current assets
Cash and cash equivalents $48.1 $38.9
Accounts receivable and
unbilled revenues, net of
reserves of $160.5 and
$143.2, respectively 1,356.8 1,350.7
Materials, supplies, and
inventories 376.0 539.0
Prepayments 165.9 210.0
Other 34.0 74.9
----- ---- ----
Current assets 1,980.8 2,213.5
Long-term assets
Property, plant, and
equipment, net of
accumulated depreciation of
$8,819.8 and $8,618.5,
respectively 21,466.3 21,347.0
Regulatory assets 2,929.7 2,803.2
Equity investment in
transmission affiliates 1,598.9 1,553.4
Goodwill 3,052.8 3,053.5
Other 757.1 619.9
----- ----- -----
Long-term assets 29,804.8 29,377.0
----------------
Total assets $31,785.6 $31,590.5
------------ --------- ---------
Liabilities and Equity
Current liabilities
Short-term debt $1,200.3 $1,444.6
Current portion of long-
term debt 957.9 842.1
Accounts payable 592.8 859.9
Accrued payroll and benefits 107.4 169.1
Other 747.5 553.6
----- ----- -----
Current liabilities 3,605.9 3,869.3
Long-term liabilities
Long-term debt 8,617.5 8,746.6
Deferred income taxes 3,069.9 2,999.8
Deferred revenue, net 538.1 543.3
Regulatory liabilities 3,924.3 3,718.6
Environmental remediation
liabilities 617.2 617.4
Pension and OPEB obligations 523.1 397.4
Other 1,191.4 1,206.3
----- ------- -------
Long-term liabilities 18,481.5 18,229.4
---------------------
Commitments and
contingencies
Common shareholders' equity
Common stock - $0.01 par
value; 325,000,000 shares
authorized; 315,538,808 and
315,574,624 shares
outstanding, respectively 3.2 3.2
Additional paid in capital 4,267.3 4,278.5
Retained earnings 5,392.7 5,176.8
Accumulated other
comprehensive income 4.6 2.9
--- ---
Common shareholders' equity 9,667.8 9,461.4
--------------------------- ------- -------
Preferred stock of
subsidiary 30.4 30.4
------------------ ---- ----
Total liabilities and equity $31,785.6 $31,590.5
---------------------------- --------- ---------
WEC ENERGY GROUP, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited) Three Months Ended
March 31
(in millions) 2018 2017
------------ ---- ----
Operating Activities
Net income $390.4 $356.9
Reconciliation to cash provided
by operating activities
Depreciation and amortization 208.6 194.6
Deferred income taxes and
investment tax credits, net 17.0 150.2
Contributions and payments
related to pension and OPEB
plans (5.3) (106.0)
Equity income in transmission
affiliates, net of
distributions 7.1 (6.7)
Change in -
Accounts receivable and unbilled
revenues (60.1) 55.0
Materials, supplies, and
inventories 163.0 170.5
Other current assets 81.3 41.2
Accounts payable (170.9) (212.7)
Other current liabilities 128.6 90.8
Other, net 134.3 (19.2)
---------- ----- -----
Net cash provided by operating
activities 894.0 714.6
Investing Activities
Capital expenditures (439.6) (329.7)
Capital contributions to
transmission affiliates (12.8) (27.6)
Proceeds from the sale of assets
and businesses 0.8 13.1
Proceeds from the sale of
investments held in rabbi trust 16.5 8.6
Other, net (0.7) 2.5
---------- ---- ---
Net cash used in investing
activities (435.8) (333.1)
Financing Activities
Exercise of stock options 2.1 5.9
Purchase of common stock (15.8) (20.2)
Dividends paid on common stock (174.2) (164.1)
Retirement of long-term debt (12.6) (12.0)
Change in short-term debt (244.3) (189.8)
Other, net (0.3) (0.6)
----------
Net cash used in financing
activities (445.1) (380.8)
-------------------------- ------ ------
Net change in cash, cash
equivalents, and restricted
cash 13.1 0.7
Cash, cash equivalents, and
restricted cash at beginning of
period 58.6 72.7
-------------------------------- ----
Cash, cash equivalents, and
restricted cash at end of
period $71.7 $73.4
--------------------------- ----- -----
CONTACT: Cathy Schulze (news media), 414-221-4444, cathy.schulze@we-energies.com, Beth Straka (investment community), 414-221-4639, beth.straka@wecenergygroup.com
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SOURCE WEC Energy Group
