WEC Energy Group reports first-quarter results

MILWAUKEE, May 4, 2020 /PRNewswire/ -- WEC Energy Group (NYSE: WEC) today reported net income of $452.5 million, or $1.43 per share, for the first quarter of 2020 - up from $420.1 million, or $1.33 per share, for the first quarter of 2019.

Consolidated revenues totaled $2.1 billion, down $268.8 million from last year's first quarter.

"We delivered another solid quarter, despite mild winter temperatures and an economic downturn that began in late March as businesses closed to slow the spread of COVID-19," said Gale Klappa, executive chairman. "In the months ahead, we will continue to focus on employee safety and on executing the fundamentals of our business - world-class reliability, customer satisfaction and financial discipline." He added, "Our team is experienced and resilient. I'm confident we'll shine through the challenges ahead."

For the quarter, natural gas deliveries in Wisconsin - excluding natural gas used for power generation - fell by 10.6 percent compared to the first quarter of 2019. On a weather-normal basis, natural gas deliveries were 1.1 percent lower.

Retail deliveries of electricity - excluding the iron ore mine in Michigan's Upper Peninsula - decreased by 3.4 percent in the first quarter of 2020 compared to the first quarter last year.

Residential electricity use declined by 4.6 percent. Electricity consumption by small commercial and industrial customers was 2.6 percent lower.

Electricity use by large commercial and industrial customers - excluding the iron ore mine - fell by 3.1 percent.

On a weather-normal basis, retail deliveries of electricity - excluding the iron ore mine - fell by 2 percent.

At the end of March, WEC Energy Group utilities were serving approximately 10,000 more electric and 12,000 more natural gas customers compared to the same time a year ago.

The company is reaffirming its earnings guidance for 2020 in the range of $3.71 to $3.75 per share.

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, Monday, May 4. The call will review 2020 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 877-683-2228 up to 15 minutes before it begins. The number for international callers is 647-689-5446. The conference ID is 7898148.

Conference call access also is available at wecenergygroup.com. Under 'Webcasts,' select 'Q1 Earnings.' 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, Monday, May 4.


A replay will be available on the website and by phone. Access to the webcast replay will be available on the website about two hours after the call. Access to a phone replay also will be available approximately two hours after the call and remain accessible through May 18, 2020. Domestic callers should dial 800-585-8367. International callers should dial 416-621-4642. The replay conference ID is 7898148.

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 45,000 stockholders of record, 7,500 employees and $35 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; the impact of the COVID-19 pandemic; 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 restructuring and consolidation; continued advances in, and adoption of, new technologies that produce power or reduce power consumption; energy conservation efforts; the company's ability to successfully acquire and/or dispose of assets and projects; 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 American Transmission Co. as well as projects in which the company's energy infrastructure business invests; the ability of the company to obtain additional generating capacity at competitive prices; 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, 2019, 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.

The global outbreak of COVID-19 is currently impacting countries, communities, supply chains and markets, and has caused many states, including those states in which we operate, to issue shelter-in-place orders. The extent to which the COVID-19 pandemic may affect us depends on factors beyond our knowledge or control. Therefore, we are currently unable to determine what impact the pandemic may ultimately have on our business plans and operations, liquidity, financial condition, and results of operations, but will continue to monitor COVID-19 developments.

Tables follow


                    STATEMENTS (Unaudited)                                                  Three Months Ended

              March 31

                                (in millions, except per share
                                 amounts)                           2020                                        2019


                   Operating revenues                                      $
              2,108.6                $

                   Operating expenses

       Cost of sales                                              734.7                                       1,009.6

        Other operation and maintenance                            455.7                                         550.6

        Depreciation and amortization                              239.1                                         226.4

       Property and revenue taxes                                  52.5                                          48.0

                   Total operating expenses                      1,482.0                                       1,834.6


              Operating income                                626.6                                         542.8

        Equity in earnings of transmission
         affiliates                                                 39.8                                          36.1

       Other income, net                                            5.6                                          30.9

       Interest expense                                           129.4                                         124.4

              Other expense                                  (84.0)                                       (57.4)


       Income before income taxes                                 542.6                                         485.4

       Income tax expense                                          90.0                                          65.0

              Net income                                      452.6                                         420.4

        Preferred stock dividends of
         subsidiary                                                  0.3                                           0.3

        Net loss attributed to
         noncontrolling interests                                    0.2

                   Net income attributed to common
                    shareholders                                             $
              452.5                  $


                   Earnings per share

       Basic                                                                 $
              1.43                   $

       Diluted                                                               $
              1.43                   $

                   Weighted average common shares

       Basic                                                      315.4                                         315.5

       Diluted                                                    316.7                                         316.7

                   Dividends per share of common stock                      $
              0.6325                 $



                      SHEETS (Unaudited)                                    March 31, 2020                                 December 31, 2019

                                    (in millions, except share and per
                                     share amounts)



                     Current assets

       Cash and cash equivalents                                                                $
         15.4                           $

        Accounts receivable and unbilled
         revenues, net of reserves of $164.8
         and $140.0, respectively                                                  1,176.9                         1,176.5

        Materials, supplies, and inventories                                         391.1                           549.8

       Prepayments                                                                  200.0                           261.8

       Other                                                                         61.9                            68.0


                     Current assets                                                1,845.3                         2,093.6

                     Long-term assets

        Property, plant, and equipment, net
         of accumulated depreciation and
         amortization of $9,042.3 and
         $8,878.7, respectively                                                   23,797.1                        23,620.1

       Regulatory assets                                                          3,566.1                         3,506.7

        Equity investment in transmission
         affiliates                                                                1,717.7                         1,720.8

       Goodwill                                                                   3,052.8                         3,052.8

       Other                                                                        853.2                           957.8


                     Long-term assets                                             32,986.9                        32,858.2


                Total assets                                                            $
        34,832.2                       $


                                   Liabilities and Equity

                     Current liabilities

       Short-term debt                                                                         $
         827.2                          $

        Current portion of long-term debt                                            694.3                           693.2

       Accounts payable                                                             597.9                           908.1

        Accrued payroll and benefits                                                 128.6                           199.8

        Amounts refundable to customers                                              155.8                            87.6

       Other                                                                        443.9                           463.2


                     Current liabilities                                           2,847.7                         3,182.7

                     Long-term liabilities

       Long-term debt                                                            11,194.7                        11,211.0

       Deferred income taxes                                                      3,870.0                         3,769.3

       Deferred revenue, net                                                        428.5                           497.1

       Regulatory liabilities                                                     3,987.1                         3,992.8

        Environmental remediation
         liabilities                                                                 589.4                           589.2

        Pension and OPEB obligations                                                 324.2                           326.2

       Other                                                                      1,106.0                         1,128.9


                     Long-term liabilities                                        21,499.9                        21,514.5


        Commitments and contingencies

                     Common shareholders' equity

        Common stock - $0.01 par value;
         325,000,000 shares authorized;
         315,434,531 shares outstanding                                                3.2                             3.2

        Additional paid in capital                                                 4,167.3                         4,186.6

       Retained earnings                                                          6,180.7                         5,927.7

        Accumulated other comprehensive loss                                         (7.1)                          (4.1)

                     Common shareholders' equity                                  10,344.1                        10,113.4


        Preferred stock of subsidiary                                                 30.4                            30.4

       Noncontrolling interests                                                     110.1                           110.8


                     Total liabilities and equity                                            $
        34,832.2                       $


             WEC ENERGY GROUP, INC.

                      CASH FLOWS (Unaudited)                                            Three Months Ended

                March 31

                                    (in millions)                2020                                      2019


                     Operating activities

       Net income                                                      $
                452.6                   $

        Reconciliation to cash provided by
         operating activities

       Depreciation and amortization                           239.1                                              226.4

        Deferred income taxes and investment tax
         credits, net                                            92.1                                               17.2

        Contributions and payments related to
         pension and OPEB plans                                 (3.7)                                             (4.2)

       Change in -

        Accounts receivable and unbilled
         revenues                                               (3.5)                                           (124.3)

        Materials, supplies, and inventories                    158.7                                              218.3

       Other current assets                                     65.4                                              125.1

       Accounts payable                                      (250.1)                                           (204.3)

       Other current liabilities                              (27.7)                                              54.6

       Other, net                                             (32.4)                                               6.5


                     Net cash provided by operating
                      activities                                690.5                                              735.7

                     Investing activities

       Capital expenditures                                  (496.1)                                           (358.8)

        Acquisition of Upstream Wind Energy LLC,
         net of cash and restricted cash
         acquired of $9.2                                                                                       (268.2)

        Capital contributions to transmission
         affiliates                                             (3.0)                                             (3.4)

        Proceeds from the sale of assets                          1.3                                               10.6

        Proceeds from the sale of investments
         held in rabbi trust                                     17.0                                                0.1

        Proceeds from cash surrender value of
         life insurance                                           8.3                                                8.5

       Other, net                                                9.5                                                4.6


                     Net cash used in investing activities    (463.0)                                           (606.6)

                     Financing activities

       Exercise of stock options                                16.0                                               32.6

       Purchase of common stock                               (40.4)                                            (70.7)

        Dividends paid on common stock                        (199.5)                                           (186.2)

       Issuance of long-term debt                                                                                350.0

       Retirement of long-term debt                           (14.0)                                            (13.3)

       Issuance of short-term loan                             340.0

        Change in other short-term debt                       (343.6)                                           (294.9)

       Other, net                                              (2.6)                                             (3.6)


                     Net cash used in financing activities    (244.1)                                           (186.1)


                     Net change in cash, cash equivalents,
                      and restricted cash                      (16.6)                                            (57.0)

        Cash, cash equivalents, and restricted
         cash at beginning of period                             82.3                                              146.1


                     Cash, cash equivalents, and restricted
                      cash at end of period                              $
                65.7                    $


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SOURCE WEC Energy Group