EX-99 2 a2018q3wecearningsreleasee.htm WEC ENERGY GROUP Q3 2018 EXHIBIT 99 Exhibit
Exhibit 99

wecenergylogoa09.jpg
From:    Brian Manthey (news media)
414-221-4444
brian.manthey@wecenergygroup.com

Beth Straka (investment community)
414-221-4639
beth.straka@wecenergygroup.com

Oct. 31, 2018                

WEC Energy Group posts third-quarter results

MILWAUKEE - WEC Energy Group (NYSE: WEC) today reported net income of $233.2 million, or $0.74 per share, for the third quarter of 2018. This compares to earnings of $215.4 million, or $0.68 per share, for the third quarter of 2017.

For the first nine months of 2018, the company recorded net income of $854.3 million, or $2.70 per share - up from $771.1 million, or $2.43 per share, in the corresponding period a year ago.

Consolidated revenues for the third quarter and nine months ended September 30, 2018, were $1.6 billion and $5.6 billion, respectively, both level with the comparable periods in 2017.

“Our solid results for the quarter were driven by a strong economy across the region coupled with warmer than normal summer temperatures and our ongoing focus on efficiency,” said Gale Klappa, Chairman and Chief Executive Officer.

Retail deliveries of electricity - excluding the iron ore mine in Michigan’s Upper Peninsula - increased by 6.0 percent in the third quarter of 2018, compared to the third quarter last year. Residential electricity use grew by 10.2 percent, and electricity consumption by small commercial and industrial customers rose by 5.1 percent.

Consumption of electricity by large commercial and industrial customers - excluding the iron ore mine - was up 3.0 percent during the third quarter of 2018 compared to the same period last year. “This marks the fourth consecutive quarter that we’ve seen demand growth from our large customer segment,” Klappa added.

On a weather-normal basis, retail deliveries of electricity - excluding the iron ore mine - increased by 2.6 percent.



1
Exhibit 99


At the end of September, the company was serving approximately 11,000 more electric customers and 15,000 more natural gas customers than at the same time a year ago.

The company is reaffirming its 2018 earnings guidance of $3.32 per share. The guidance assumes 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, Wednesday, Oct. 31. The call will review 2018 third-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 866-393-4306 up to 15 minutes before it begins. The number for international callers is 734-385-2616. The conference ID is 9174377.

Conference call access also is available at wecenergygroup.com. On the homepage, go to 'Webcasts' and select '3rd Quarter Earnings.' In conjunction with this earnings announcement, WEC Energy Group will post on its website a package of detailed financial information on its third-quarter performance. The materials will be available at 6:30 a.m. Central time, Wednesday, Oct. 31.

Replay

A replay will be available on the website and by phone after the call. 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 Nov. 14, 2018. Domestic callers should dial 855-859-2056. International callers should dial 404-537-3406. The replay conference ID is 9174377.

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 $32 billion of assets.









2
Exhibit 99

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


3
Exhibit 99

WEC ENERGY GROUP, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)
 
Three Months Ended
 
Nine Months Ended
 
 
September 30
 
September 30
(in millions, except per share amounts)
 
2018
 
2017
 
2018
 
2017
Operating revenues
 
$
1,643.7

 
$
1,657.5

 
$
5,602.7

 
$
5,593.5

 
 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
 
Cost of sales
 
524.1

 
542.7

 
2,043.9

 
2,025.6

Other operation and maintenance
 
553.1

 
473.1

 
1,602.7

 
1,457.4

Depreciation and amortization
 
212.8

 
201.2

 
628.1

 
593.5

Property and revenue taxes
 
51.0

 
48.3

 
149.4

 
147.9

Total operating expenses
 
1,341.0

 
1,265.3

 
4,424.1

 
4,224.4

 
 
 
 
 
 
 
 
 
Operating income
 
302.7

 
392.2

 
1,178.6

 
1,369.1

 
 
 
 
 
 
 
 
 
Equity in earnings of transmission affiliates
 
33.7

 
39.2

 
95.2

 
122.9

Other income, net
 
26.1

 
17.8

 
65.0

 
49.2

Interest expense
 
112.0

 
103.8

 
327.2

 
310.4

Other expense
 
(52.2
)
 
(46.8
)
 
(167.0
)
 
(138.3
)
 
 
 
 
 
 
 
 
 
Income before income taxes
 
250.5

 
345.4

 
1,011.6

 
1,230.8

Income tax expense
 
17.0

 
129.7

 
156.4

 
458.8

Net income
 
233.5

 
215.7

 
855.2

 
772.0

 
 
 
 
 
 
 
 
 
Preferred stock dividends of subsidiary
 
0.3

 
0.3

 
0.9

 
0.9

Net income attributed to common shareholders
 
$
233.2

 
$
215.4

 
$
854.3

 
$
771.1

 
 
 
 
 
 
 
 
 
Earnings per share
 
 
 
 
 
 
 
 
Basic
 
$
0.74

 
$
0.68

 
$
2.71

 
$
2.44

Diluted
 
$
0.74

 
$
0.68

 
$
2.70

 
$
2.43

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
 
 
 
 
 
 
 
 
Basic
 
315.5

 
315.6

 
315.5

 
315.6

Diluted
 
316.9

 
317.5

 
316.9

 
317.5

 
 
 
 
 
 
 
 
 
Dividends per share of common stock
 
$
0.5525

 
$
0.5200

 
$
1.6575

 
$
1.5600






4
Exhibit 99

WEC ENERGY GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions, except share and per share amounts)
 
September 30, 2018
 
December 31, 2017
Assets
 
 
 
 
Current assets
 
 
 
 
Cash and cash equivalents
 
$
14.5

 
$
38.9

Accounts receivable and unbilled revenues, net of reserves of $153.7 and $143.2, respectively
 
1,017.3

 
1,350.7

Materials, supplies, and inventories
 
608.5

 
539.0

Prepayments
 
137.6

 
210.0

Other
 
61.8

 
74.9

Current assets
 
1,839.7

 
2,213.5

 
 
 
 
 
Long-term assets
 
 
 
 
Property, plant, and equipment, net of accumulated depreciation of $8,589.3 and $8,618.5, respectively
 
21,663.7

 
21,347.0

Regulatory assets
 
3,643.5

 
2,803.2

Equity investment in transmission affiliates
 
1,613.7

 
1,553.4

Goodwill
 
3,052.8

 
3,053.5

Other
 
749.0

 
619.9

Long-term assets
 
30,722.7

 
29,377.0

Total assets
 
$
32,562.4

 
$
31,590.5

 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
Short-term debt
 
$
1,788.3

 
$
1,444.6

Current portion of long-term debt
 
369.4

 
842.1

Accounts payable
 
690.4

 
859.9

Accrued payroll and benefits
 
143.1

 
169.1

Accrued taxes
 
217.4

 
178.5

Other
 
393.9

 
375.1

Current liabilities
 
3,602.5

 
3,869.3

 
 
 
 
 
Long-term liabilities
 
 
 
 
Long-term debt
 
9,119.0

 
8,746.6

Deferred income taxes
 
3,172.1

 
2,999.8

Deferred revenue, net
 
525.9

 
543.3

Regulatory liabilities
 
3,960.3

 
3,718.6

Environmental remediation liabilities
 
617.4

 
617.4

Pension and OPEB obligations
 
489.1

 
397.4

Other
 
1,233.4

 
1,206.3

Long-term liabilities
 
19,117.2

 
18,229.4

 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
 
 
Common shareholders' equity
 
 
 
 
Common stock – $0.01 par value; 325,000,000 shares authorized; 315,526,051 and 315,574,624 shares outstanding, respectively
 
3.2

 
3.2

Additional paid in capital
 
4,261.6

 
4,278.5

Retained earnings
 
5,508.1

 
5,176.8

Accumulated other comprehensive income
 
2.4

 
2.9

Common shareholders' equity
 
9,775.3

 
9,461.4

 
 
 
 
 
Preferred stock of subsidiary
 
30.4

 
30.4

Noncontrolling interest in subsidiary
 
37.0

 
—

Total liabilities and equity
 
$
32,562.4

 
$
31,590.5






5
Exhibit 99

WEC ENERGY GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 
Nine Months Ended
 
 
September 30
(in millions)
 
2018
 
2017
Operating Activities
 
 
 
 
Net income
 
$
855.2

 
$
772.0

Reconciliation to cash provided by operating activities
 
 
 
 
Depreciation and amortization
 
628.1

 
593.5

Deferred income taxes and investment tax credits, net
 
34.4

 
444.4

Contributions and payments related to pension and OPEB plans
 
(13.8
)
 
(115.4
)
Equity income in transmission affiliates, net of distributions
 
(4.5
)
 
(18.5
)
Change in –
 
 
 
 
Accounts receivable and unbilled revenues
 
312.1

 
310.5

Materials, supplies, and inventories
 
(69.0
)
 
(84.1
)
Other current assets
 
112.7

 
56.8

Accounts payable
 
(71.2
)
 
(111.2
)
Other current liabilities
 
42.5

 
23.4

Other, net
 
181.7

 
(125.7
)
Net cash provided by operating activities
 
2,008.2

 
1,745.7

 
 
 
 
 
Investing Activities
 
 
 
 
Capital expenditures
 
(1,490.5
)
 
(1,309.2
)
Acquisition of Bishop Hill III Wind Energy Center, net of restricted cash acquired of $4.5
 
(143.5
)
 
—

Acquisition of Forward Wind Energy Center
 
(77.1
)
 
—

Acquisition of Bluewater
 
—

 
(226.0
)
Capital contributions to transmission affiliates
 
(43.7
)
 
(63.3
)
Proceeds from the sale of assets and businesses
 
10.9

 
22.7

Proceeds from the sale of investments held in rabbi trust
 
16.6

 
8.6

Other, net
 
7.3

 
1.4

Net cash used in investing activities
 
(1,720.0
)
 
(1,565.8
)
 
 
 
 
 
Financing Activities
 
 
 
 
Exercise of stock options
 
13.9

 
25.6

Purchase of common stock
 
(42.0
)
 
(60.6
)
Dividends paid on common stock
 
(523.0
)
 
(492.4
)
Issuance of long-term debt
 
600.0

 
210.0

Retirement of long-term debt
 
(694.4
)
 
(26.9
)
Change in short-term debt
 
343.7

 
133.3

Other, net
 
(4.8
)
 
(3.1
)
Net cash used in financing activities
 
(306.6
)
 
(214.1
)
 
 
 
 
 
Net change in cash, cash equivalents, and restricted cash
 
(18.4
)
 
(34.2
)
Cash, cash equivalents, and restricted cash at beginning of period
 
58.6

 
72.7

Cash, cash equivalents, and restricted cash at end of period
 
$
40.2

 
$
38.5






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