PR Newswire | May 3, 2021 07:00AM EDT

05/03 06:00 CDT

WEC Energy Group reports solid first-quarter results MILWAUKEE, May 3, 2021

MILWAUKEE, May 3, 2021 /PRNewswire/ -- WEC Energy Group (NYSE: WEC) today reported net income of $510.1 million, or $1.61 per share, for the first quarter of 2021 - up from $452.5 million, or $1.43 per share, for last year's first quarter.

Consolidated revenues totaled $2.7 billion, up $582.8 million from last year's first quarter.

"Our positive first-quarter results were driven by colder weather, economic recovery in our region and a strong focus on operating excellence," said Gale Klappa, executive chairman. "Our people and our infrastructure were put to the test and performed remarkably during a bitter cold stretch in February, when temperatures in the northern portion of our service area dropped to minus 42 degrees Fahrenheit. Ongoing investments in our energy grid and our diverse fuel mix kept the economy moving and our 4.6 million customers warm and safe."

For the quarter, natural gas deliveries in Wisconsin - excluding natural gas used for power generation - rose by 3.2 percent compared to the first quarter of 2020. On a weather-normal basis, natural gas deliveries were 0.5 percent higher.

Retail deliveries of electricity - excluding the iron ore mine in Michigan's Upper Peninsula - increased by 1.1 percent in the first quarter of 2021 compared to the first quarter last year. Residential electricity use rose by 4.8 percent.

Electricity consumption by small commercial and industrial customers was 0.3 percent lower. Electricity use by large commercial and industrial customers - excluding the iron ore mine - fell by 1.0 percent.

On a weather-normal basis, retail deliveries of electricity - excluding the iron ore mine - increased by 1.4 percent.

At the end of March, the company was serving approximately 7,000 more electric customers and 25,000 more natural gas customers than at the same time a year ago.

"The company expects to reach the top end of its earnings guidance for 2021 - which is in a range of $3.99 to $4.03 per share," Klappa said. This 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, Monday, May 3. The call will review 2021 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 2688216.

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 3.

Replay

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 17, 2021. Domestic callers should dial 800-585-8367. International callers should dial 416-621-4642. The replay conference ID is 2688216.

WEC Energy Group (NYSE: WEC), based in Milwaukee, is one of the nation's premier energy companies, serving 4.6 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. Another major subsidiary, We Power, designs, builds and owns electric generating plants. In addition, WEC Infrastructure LLC owns a growing fleet of renewable generation facilities in the Midwest.

WEC Energy Group (wecenergygroup.com) is a Fortune 500 company and a component of the S&P 500. The company has approximately 42,000 stockholders of record, 7,200 employees and more than $37 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 and investments. 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 extent, duration and impact of the COVID-19 pandemic or any future health pandemics; 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, adverse or unusually severe weather conditions; continued industry restructuring and consolidation; continued advances in, and adoption of, new technologies that produce power or reduce power consumption; energy and environmental 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; changes in tax legislation or our ability to use certain tax benefits and carryforwards; the impact of legislative and regulatory changes, including changes to environmental standards and greenhouse gas regulations; political developments; current and future litigation and regulatory investigations, proceedings or inquiries; changes in accounting standards; the financial performance of American Transmission Company 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, 2020, and in subsequent reports filed with the Securities and Exchange Commission. Except as may be required by law, 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) 2021 2020

Operating revenues $ 2,691.4 $ 2,108.6

Operating expenses

Cost of sales 1,265.6 734.7

Other operation and maintenance 479.9 455.7

Depreciation and amortization 261.4 239.1

Property and revenue taxes 55.2 52.5

Total operating expenses 2,062.1 1,482.0

Operating income 629.3 626.6

Equity in earnings of transmission affiliates 42.6 39.8

Other income, net 32.8 5.6

Interest expense 119.5 129.4

Other expense (44.1) (84.0)

Income before income taxes 585.2 542.6

Income tax expense 74.9 90.0

Net income 510.3 452.6

Preferred stock dividends of subsidiary 0.3 0.3

Net loss attributed to noncontrolling interests 0.1 0.2

Net income attributed to common shareholders $ 510.1 $ 452.5

Earnings per share

Basic $ 1.62 $ 1.43

Diluted $ 1.61 $ 1.43

Weighted average common shares outstanding

Basic 315.4 315.4

Diluted 316.2 316.7

Dividends per share of common stock $ 0.6775 $ 0.6325

WEC ENERGY GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, 2021 December 31, 2020(in millions, except share and per share amounts)

Assets

Current assets

Cash and cash equivalents $ 26.1 $ 24.8

Accounts receivable and unbilled revenues, net of reserves of $259.1 and 1,369.9 1,202.8$220.1, respectively

Materials, supplies, and inventories 353.5 528.6

Prepayments 258.8 263.4

Amounts recoverable from customers 306.7 20.0

Other 40.5 43.4

Current assets 2,355.5 2,083.0

Long-term assets

Property, plant, and equipment, net of accumulated depreciation and 25,994.4 25,707.4amortization of $9,481.4 and $9,364.7, respectively

Regulatory assets 3,487.1 3,524.1

Equity investment in transmission affiliates 1,773.6 1,764.3

Goodwill 3,052.8 3,052.8

Other 937.2 896.5

Long-term assets 35,245.1 34,945.1

Total assets $ 37,600.6 $ 37,028.1

Liabilities and Equity

Current liabilities

Short-term debt $ 1,580.4 $ 1,776.9

Current portion of long-term debt 787.0 785.8

Accounts payable 656.0 880.7

Accrued payroll and benefits 123.0 174.0

Other 568.5 530.7

Current liabilities 3,714.9 4,148.1

Long-term liabilities

Long-term debt 12,317.7 11,728.1

Deferred income taxes 4,214.1 4,059.8

Deferred revenue, net 406.4 412.2

Regulatory liabilities 3,890.8 3,928.1

Environmental remediation liabilities 532.9 532.9

Pension and OPEB obligations 319.9 327.0

Other 1,236.3 1,229.4

Long-term liabilities 22,918.1 22,217.5

Commitments and contingencies

Common shareholders' equity

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

Additional paid in capital 4,143.6 4,143.7

Retained earnings 6,626.0 6,329.6

Accumulated other comprehensive loss (5.7) (6.8)

Common shareholders' equity 10,767.1 10,469.7

Preferred stock of subsidiary 30.4 30.4

Noncontrolling interests 170.1 162.4

Total liabilities and equity $ 37,600.6 $ 37,028.1

WEC ENERGY GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended

March 31

(in millions) 2021 2020

Operating activities

Net income $ 510.3 $ 452.6

Reconciliation to cash provided by operating activities

Depreciation and amortization 261.4 239.1

Deferred income taxes and ITCs, net 129.6 92.1

Contributions and payments related to pension and OPEB plans (4.1) (3.7)

Equity income in transmission affiliates, net of distributions (9.2) 0.8

Change in -

Accounts receivable and unbilled revenues, net (150.4) (3.5)

Materials, supplies, and inventories 175.1 158.7

Amounts recoverable from customers (286.7) 8.1

Other current assets 20.2 57.3

Accounts payable (181.5) (250.1)

Other current liabilities (2.3) (27.7)

Other, net (67.2) (33.2)

Net cash provided by operating activities 395.2 690.5

Investing activities

Capital expenditures (470.6) (496.1)

Acquisition of Jayhawk Wind, LLC (119.4) -

Capital contributions to transmission affiliates - (3.0)

Proceeds from the sale of assets 11.3 1.3

Proceeds from the sale of investments held in rabbi trust 12.7 17.0

Other, net 24.7 17.8

Net cash used in investing activities (541.3) (463.0)

Financing activities

Exercise of stock options 1.2 16.0

Purchase of common stock (6.6) (40.4)

Dividends paid on common stock (213.7) (199.5)

Issuance of long-term debt 600.0 -

Retirement of long-term debt (14.7) (14.0)

Issuance of short-term loan - 340.0

Repayment of short-term loan (340.0) -

Change in other short-term debt 143.5 (343.6)

Other, net (6.6) (2.6)

Net cash provided by (used in) financing activities 163.1 (244.1)

Net change in cash, cash equivalents, and restricted cash 17.0 (16.6)

Cash, cash equivalents, and restricted cash at beginning of period 72.6 82.3

Cash, cash equivalents, and restricted cash at end of period $ 89.6 $ 65.7

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SOURCE WEC Energy Group