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WEC Energy Group posts second-quarter results

MILWAUKEE, July 26, 2017 /PRNewswire/ -- WEC Energy Group (NYSE: WEC) recorded net income of $199.1 million, or $0.63 per share, for the second quarter of 2017 ‒ up from $181.4 million, or $0.57 per share, for the second quarter of 2016.

For the first six months of 2017, WEC Energy Group reported net income of $555.7 million, or $1.75 per share ‒ up from $527.6 million, or $1.66 per share, for the first six months of 2016.

The company is reaffirming 2017 earnings guidance of $3.06 to $3.12, with an expectation of being in the upper end of the range. 

Consolidated revenue was $1.6 billion for the second quarter of 2017, which was level with the second quarter of 2016. Consolidated revenue was $3.9 billion for the first six months of 2017, compared to $3.8 billion for the same period in 2016.

"Our continued focus on controlling costs contributed to our results in the second quarter," said Allen Leverett, chief executive officer. "We achieved those results while safely and reliably restoring power in the wake of relentless storm activity."

At the end of June, the WEC Energy Group utilities were serving approximately 9,000 more electric and 13,000 more natural gas customers than they did at the same time a year ago.

For the first six months of 2017, retail deliveries of electricity for the Wisconsin and Michigan utilities ‒ excluding the iron ore mines in Michigan's Upper Peninsula ‒ decreased 0.9 percent compared to the same period last year. Residential electricity usage decreased 1.1 percent. Electricity consumption by small commercial and industrial customers decreased 1.0 percent.

Electricity use by large commercial and industrial customers ‒ excluding the iron ore mines ‒ decreased 0.5 percent for the first six months of 2017 compared to the same period last year.

On a weather-normal basis, retail deliveries of electricity – excluding the iron ore mines – decreased 0.2 percent.

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 Wednesday, July 26. The call will review 2017 second-quarter earnings and will discuss the company's outlook for the future.

All interested parties, including stockholders, news media and 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 43642520.

Conference call access also is available at wecenergygroup.com. Select 'Second 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 second-quarter performance. The materials will be available at 6:30 a.m. Central time on Wednesday, July 26.

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 Aug. 8, 2017. Domestic callers should dial 855-859-2056. International callers should dial 404-537-3406. The replay conference ID is 43642520.

WEC Energy Group (NYSE: WEC), based in Milwaukee, is one of the nation's premier energy companies, serving 4.4 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), a component of the S&P 500, has approximately $30 billion of assets, 8,500 employees and 55,000 stockholders of record.

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 any legislative and regulatory changes, including changes to environmental standards and tax laws; 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, 2016 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


Six Months Ended



June 30


June 30

(in millions, except per share amounts)


2017


2016


2017


2016

Operating revenues


$

1,631.5



$

1,602.0



$

3,936.0



$

3,796.8











Operating expenses









Cost of sales


541.8



508.3



1,482.9



1,347.2


Other operation and maintenance


479.8



522.0



981.7



1,053.5


Depreciation and amortization


197.7



190.0



392.3



377.9


Property and revenue taxes


50.0



49.6



99.6



96.8


Total operating expenses


1,269.3



1,269.9



2,956.5



2,875.4











Operating income


362.2



332.1



979.5



921.4











Equity in earnings of transmission affiliate


41.8



30.9



83.7



69.4


Other income, net


13.1



32.4



28.8



65.1


Interest expense


101.9



100.1



206.6



201.0


Other expense


(47.0)



(36.8)



(94.1)



(66.5)











Income before income taxes


315.2



295.3



885.4



854.9


Income tax expense


115.8



113.6



329.1



326.7


Net income


199.4



181.7



556.3



528.2











Preferred stock dividends of subsidiary


0.3



0.3



0.6



0.6


Net income attributed to common shareholders


$

199.1



$

181.4



$

555.7



$

527.6











Earnings per share









Basic


$

0.63



$

0.57



$

1.76



$

1.67


Diluted


$

0.63



$

0.57



$

1.75



$

1.66











Weighted average common shares outstanding









Basic


315.6



315.6



315.6



315.6


Diluted


317.4



317.0



317.4



317.0











Dividends per share of common stock


$

0.5200



$

0.4950



$

1.0400



$

0.9900


 

WEC ENERGY GROUP, INC.


CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions, except share and per share amounts)


June 30, 2017


December 31,
2016

Assets





Current assets





Cash and cash equivalents


$

36.5



$

37.5


Accounts receivable and unbilled revenues, net of reserves of $111.6 and $108.0, respectively


1,004.3



1,241.7


Materials, supplies, and inventories


510.0



587.6


Prepayments


181.6



204.4


Other


47.3



97.5


Current assets


1,779.7



2,168.7







Long-term assets





Property, plant, and equipment, net of accumulated depreciation of $8,433.2 and $8,214.6, respectively


20,524.3



19,915.5


Regulatory assets


3,108.4



3,087.9


Equity investment in transmission affiliate


1,544.0



1,443.9


Goodwill


3,053.5



3,046.2


Other


549.7



461.0


Long-term assets


28,779.9



27,954.5


Total assets


$

30,559.6



$

30,123.2







Liabilities and Equity










Current liabilities





Short-term debt


$

774.8



$

860.2


Current portion of long-term debt


708.4



157.2


Accounts payable


724.1



861.5


Accrued payroll and benefits


140.0



163.8


Other


440.0



388.9


Current liabilities


2,787.3



2,431.6







Long-term liabilities





Long-term debt


8,799.7



9,158.2


Deferred income taxes


5,416.1



5,146.6


Deferred revenue, net


554.6



566.2


Regulatory liabilities


1,574.0



1,563.8


Environmental remediation liabilities


622.6



633.6


Pension and OPEB obligations


451.0



498.6


Other


1,171.1



1,164.4


Long-term liabilities


18,589.1



18,731.4







Commitments and contingencies










Common shareholders' equity





Common stock – $.01 par value; 325,000,000 shares authorized; 315,576,571 and 315,614,941 shares
outstanding, respectively


3.2



3.2


Additional paid in capital


4,290.1



4,309.8


Retained earnings


4,857.0



4,613.9


Accumulated other comprehensive income


2.5



2.9


Common shareholders' equity


9,152.8



8,929.8







Preferred stock of subsidiary


30.4



30.4


Total liabilities and equity


$

30,559.6



$

30,123.2


 

WEC ENERGY GROUP, INC.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


Six Months Ended



June 30

(in millions)


2017


2016

Operating Activities





Net income


$

556.3



$

528.2


Reconciliation to cash provided by operating activities





Depreciation and amortization


392.3



386.0


Deferred income taxes and investment tax credits, net


274.6



307.1


Contributions and payments related to pension and OPEB plans


(111.5)



(19.5)


Equity income in transmission affiliate, net of distributions


(14.5)



(22.7)


Change in –





Accounts receivable and unbilled revenues


247.3



130.1


Materials, supplies, and inventories


77.9



193.5


Other current assets


15.6



66.7


Accounts payable


(114.0)



(112.4)


Other current liabilities


18.3



(139.0)


Other, net


(74.3)



(93.9)


Net cash provided by operating activities


1,268.0



1,224.1







Investing Activities





Capital expenditures


(790.0)



(618.7)


Acquisition of Bluewater


(226.0)




Capital contributions to transmission affiliate


(50.5)



(12.1)


Proceeds from the sale of assets and businesses


20.7



161.0


Withdrawal of restricted cash from Rabbi trust for qualifying payments


17.2



22.5


Other, net


4.7



(1.8)


Net cash used in investing activities


(1,023.9)



(449.1)







Financing Activities





Exercise of stock options


15.6



35.0


Purchase of common stock


(39.7)



(94.2)


Dividends paid on common stock


(328.3)



(312.4)


Issuance of long-term debt


210.0




Retirement of long-term debt


(14.6)



(241.8)


Change in short-term debt


(85.4)



(167.2)


Other, net


(2.7)



(12.1)


Net cash used in financing activities


(245.1)



(792.7)







Net change in cash and cash equivalents


(1.0)



(17.7)


Cash and cash equivalents at beginning of period


37.5



49.8


Cash and cash equivalents at end of period


$

36.5



$

32.1


 

View original content:http://www.prnewswire.com/news-releases/wec-energy-group-posts-second-quarter-results-300493822.html

SOURCE WEC Energy Group

Brian Manthey (news media), 414-221-4444, brian.manthey@we-energies.com; Beth Straka (investment community), 414-221-4639, beth.straka@wecenergygroup.com