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Form 8-K WEC ENERGY GROUP, INC. For: Nov 04

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November 4, 2015 7:17 AM EST






UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):

November 4, 2015
 


Commission
 
Registrant; State of Incorporation
 
IRS Employer
File Number
 
Address; and Telephone Number
 
Identification No.
 
 
 
 
 
 
 
 
 
 
001-09057
 
WEC ENERGY GROUP, INC.
 
39-1391525
 
 
(A Wisconsin Corporation)
 
 
 
 
231 West Michigan Street
 
 
 
 
P.O. Box 1331
 
 
 
 
Milwaukee, WI 53201
 
 
 
 
(414) 221-2345
 
 
 
 
 
 
 


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






ITEM 2.02  RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On Wednesday, November 4, 2015, WEC Energy Group, Inc. issued a press release announcing its financial results for the quarter and nine months ended September 30, 2015. A copy of the press release is being furnished to the Securities and Exchange Commission as Exhibit 99 attached hereto and incorporated herein by reference.





SIGNATURES
 
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
WEC ENERGY GROUP, INC.
 
(Registrant)
 
 
 
/s/ William J. Guc
Date: November 4, 2015
William J. Guc, Vice President and Controller





From:    Brian Manthey (news media)
414-221-4444

Colleen F. Henderson, CFA (investment community)
414-221-2592

Nov. 4, 2015                

WEC Energy Group posts third quarter results

MILWAUKEE - WEC Energy Group Inc. (NYSE: WEC) recorded net income based on Generally Accepted Accounting Principles (GAAP) of $182.5 million or 58 cents a share for the third quarter of 2015. WEC Energy Group was formed on June 29 when Wisconsin Energy completed the acquisition of Integrys.
Wisconsin Energy’s stand-alone earnings for the third quarter, excluding acquisition costs, increased to 61 cents a share. In the corresponding quarter a year ago, Wisconsin Energy’s stand-alone earnings, adjusted for acquisition costs, were 57 cents a share.

    
 
2015 Q3
 
2014 Q3
WEC Energy Group GAAP EPS
$0.58
 
$0.56
Acquisition Costs (post tax)
$0.01
 
$0.01
Integrys Q3 Earnings
$(0.21)
 
—
Impact of Additional Shares
$0.23
 
—
Wisconsin Energy Adjusted EPS
$0.61
 
$0.57

Systemwide revenue for the third quarter of 2015 totaled $1.70 billion. Wisconsin Energy’s stand-alone third quarter revenue, which excludes $0.63 billion of revenue from Integrys, was $1.07 billion. This compares with revenue of $1.03 billion in the third quarter of 2014.
“Since the close of the acquisition at the end of the second quarter, we’ve made significant progress in focusing our six operating utilities on world-class reliability, customer satisfaction, and financial discipline,” said Gale Klappa, chairman and chief executive.




1


“I’m very pleased with our post-acquisition work, and we remain highly confident that the merger will deliver tangible benefits to our customers, to the communities we serve, and to the stockholders who count on us to create value,” Klappa added.

For the first nine months of 2015, WEC Energy Group reported net income based on Generally Accepted Accounting Principles of $459.2 million or $1.78 a share.
Wisconsin Energy’s stand-alone earnings for the first nine months of this year, excluding acquisition costs, were $2.10 a share. For the first nine months of 2014, Wisconsin Energy’s stand-alone earnings, adjusted for acquisition costs, were $2.08 a share.

    
 
2015 YTD
 
2014 YTD
WEC Energy Group GAAP EPS
$1.78
 
$2.05
Acquisition Costs (post tax)
$0.29
 
$0.03
Integrys Q3 Earnings
$(0.21)
 
—
Impact of Additional Shares
$0.24
 
—
Wisconsin Energy Adjusted EPS
$2.10
 
$2.08

“We delivered solid results through an unusual pattern of summer weather - a cool July, a cool August, followed by an unseasonably warm September,” Klappa said.
At the end of September 2015, We Energies was serving approximately 6,000 more electric customers and 10,000 more natural gas customers than a year ago.
To facilitate comparison with prior periods, the information on electricity sales that follows for the third quarter of 2015 reflects data for We Energies customers only.
Residential use of electricity rose by 11.5 percent over last year's third quarter. Consumption of electricity by small commercial and industrial customers grew by 1.6 percent. Electricity use by large commercial and industrial customers - excluding the iron ore mines in Michigan's Upper Peninsula - increased by 0.6 percent.
On a weather normal basis, retail sales of electricity - excluding the iron ore mines - were essentially level with sales in last year’s third quarter.


2


Conference call

A conference call is scheduled at 1 p.m. Central time, Nov. 4. The presentation will review 2015 third-quarter earnings and will discuss the company's outlook for the future.

All interested parties, including stockholders, news media and the general public, are invited to listen to the presentation. The conference call may be accessed by dialing 866-439-9410 up to 15 minutes before the call begins. International callers may dial 706-643-5658. The conference ID is 31622849.

Access also may be gained through the company's website (wecenergygroup.com). Select ‘Third 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 third quarter performance. The materials will be available at 6:30 a.m. Central time, Nov. 4.


Replay

A replay will be available on the website and by phone after the presentation. Access to the webcast replay will be available on the website about two hours after the presentation. Access to a phone replay also will be available approximately two hours after the presentation and remain accessible through Nov. 17, 2015. Domestic callers should dial 855-859-2056. International callers should dial 404-537-3406. The replay conference ID is 31622849.


Non-GAAP earnings measures

We have provided adjusted earnings (non-GAAP earnings) in this press release as a complement to, and not as an alternative to, reported earnings presented in accordance with GAAP.  The adjusted stand-alone earnings of Wisconsin Energy exclude the results of operations of Integrys Energy Group and its subsidiaries and costs related to the acquisition of Integrys, as well as the additional WEC Energy Group shares of common stock that were issued as part of the acquisition.  Costs related to the acquisition of Integrys are not indicative of the company’s operating performance.


3


Institutional investors have informed management on several occasions that, for the remainder of 2015, they are interested in, and focused on, the performance of legacy Wisconsin Energy and subsidiaries, excluding the impact of the Integrys acquisition.  In addition, the earnings guidance and performance expectations previously provided by the company were based upon legacy Wisconsin Energy’s operations. Therefore, we believe that the presentation of adjusted earnings is relevant and useful to investors.  Management also uses such measures internally to evaluate the company’s performance for 2015.


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, and Minnesota 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 $29 billion of assets, 9,000 employees and 60,000 stockholders of record.

Tables follow


4


WEC ENERGY GROUP, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)
 
Three Months Ended
 
Nine Months Ended
 
 
September 30
 
September 30
(in millions, except per share)
 
2015
 
2014
 
2015
 
2014
Operating revenues
 
$
1,698.7

 
$
1,033.3

 
$
4,077.8

 
$
3,772.0

 
 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
 
Cost of sales
 
590.6

 
407.4

 
1,557.5

 
1,735.9

Other operation and maintenance
 
535.9

 
249.4

 
1,153.6

 
780.8

Depreciation and amortization
 
176.5

 
99.8

 
382.6

 
295.2

Property and revenue taxes
 
50.0

 
30.6

 
113.8

 
91.5

Total operating expenses
 
1,353.0

 
787.2

 
3,207.5

 
2,903.4

 
 
 
 
 
 
 
 
 
Operating income
 
345.7

 
246.1

 
870.3

 
868.6

 
 
 
 
 
 
 
 
 
Equity in earnings of transmission affiliate
 
40.0

 
18.0

 
70.4

 
52.8

Other income, net
 
11.1

 
2.9

 
40.2

 
12.1

Interest expense
 
103.8

 
60.4

 
225.6

 
181.7

Other expense
 
(52.7
)
 
(39.5
)
 
(115.0
)
 
(116.8
)
 
 
 
 
 
 
 
 
 
Income before income taxes
 
293.0

 
206.6

 
755.3

 
751.8

Income tax expense
 
110.5

 
80.3

 
296.1

 
284.9

Net income
 
$
182.5

 
$
126.3

 
$
459.2

 
$
466.9

 
 
 
 
 
 
 
 
 
Earnings per share
 
 
 
 
 
 
 
 
Basic
 
$
0.58

 
$
0.56

 
$
1.79

 
$
2.07

Diluted
 
$
0.58

 
$
0.56

 
$
1.78

 
$
2.05

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding (in millions)
 
 
 
 
 
 
 
 
Basic
 
315.7

 
225.5

 
256.2

 
225.6

Diluted
 
317.1

 
227.4

 
257.8

 
227.6

 
 
 
 
 
 
 
 
 
Dividends per share of common stock
 
$
—

 
$
0.39

 
$
1.29

 
$
1.17




5


WEC ENERGY GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions, except share and per share amounts)
 
September 30, 2015
 
December 31, 2014
Assets
 
 
 
 
Property, plant and equipment
 
 
 
 
In service
 
$
25,741.5

 
$
15,509.0

Accumulated depreciation
 
(7,930.6
)
 
(4,485.1
)
 
 
17,810.9

 
11,023.9

Construction work in progress
 
936.4

 
191.8

Leased facilities, net
 
37.9

 
42.0

Net property, plant and equipment
 
18,785.2

 
11,257.7

Investments
 
 
 
 
Equity investment in transmission affiliate
 
999.4

 
424.1

Other
 
97.0

 
32.8

Total investments
 
1,096.4

 
456.9

Current assets
 
 
 
 
Cash and cash equivalents
 
22.2

 
61.9

Accounts receivable and unbilled revenues, net of reserves of $128.7 and $74.5, respectively
 
844.7

 
643.4

Materials, supplies, and inventories
 
719.8

 
400.6

Assets held for sale
 
140.2

 
—

Deferred income taxes
 
250.8

 
242.7

Other
 
204.2

 
186.8

Total current assets
 
2,181.9

 
1,535.4

Deferred charges and other assets
 
 
 
 
Regulatory assets
 
2,805.5

 
1,271.2

Goodwill
 
3,389.1

 
441.9

Other long-term assets
 
511.5

 
200.3

Total deferred charges and other assets
 
6,706.1

 
1,913.4

Total assets
 
$
28,769.6

 
$
15,163.4

 
 
 
 
 
Capitalization and liabilities
 
 
 
 
Capitalization
 
 
 
 
Common stock - $.01 par value; 325,000,000 shares authorized; 315,684,451 and 225,517,339 shares outstanding, respectively
 
$
3.2

 
$
2.3

Additional paid in capital
 
4,350.6

 
300.1

Retained earnings
 
4,264.9

 
4,117.0

Accumulated other comprehensive income
 
11.2

 
0.3

Preferred stock of subsidiaries
 
81.5

 
30.4

Long-term debt
 
8,727.0

 
4,186.4

Total capitalization
 
17,438.4

 
8,636.5

Current liabilities
 
 
 
 
Current portion of long-term debt
 
606.0

 
424.1

Short-term debt
 
661.5

 
617.6

Accounts payable
 
777.6

 
363.3

Accrued payroll and benefits
 
154.9

 
95.1

Other
 
466.8

 
168.6

Total current liabilities
 
2,666.8

 
1,668.7

Deferred credits and other liabilities
 
 
 
 
Regulatory liabilities
 
1,312.3

 
830.6

Deferred income taxes
 
4,690.4

 
2,906.7

Deferred revenue, net
 
588.1

 
614.1

Pension and other postretirement benefit obligations
 
427.7

 
203.8

Environmental remediation
 
611.5

 
32.6

Other long-term liabilities
 
1,034.4

 
270.4

Total deferred credits and other liabilities
 
8,664.4

 
4,858.2

 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
 
 
Total capitalization and liabilities
 
$
28,769.6

 
$
15,163.4



6


WEC ENERGY GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 
Nine Months Ended
 
 
September 30
(in millions)
 
2015
 
2014
Operating Activities
 
 
 
 
Net income
 
$
459.2

 
$
466.9

Reconciliation to cash provided by operating activities
 
 
 
 
Depreciation and amortization
 
390.9

 
312.9

Deferred income taxes and investment tax credits, net
 
220.1

 
258.5

Contributions to pension and other postretirement plans
 
(109.3
)
 
(12.0
)
Change in –
 
 
 
 
Accounts receivable and unbilled revenues
 
269.5

 
221.1

Inventories
 
(101.4
)
 
(49.9
)
Other current assets
 
75.6

 
37.2

Accounts payable
 
(55.9
)
 
(27.7
)
Accrued taxes, net
 
57.9

 
(10.3
)
Other current liabilities
 
40.0

 
(36.8
)
Other, net
 
(173.4
)
 
(125.3
)
Net cash provided by operating activities
 
1,073.2

 
1,034.6

 
 
 
 
 
Investing Activities
 
 
 
 
Capital expenditures
 
(765.1
)
 
(513.0
)
Cost of removal, net of salvage
 
(26.7
)
 
(18.2
)
Business acquisition, net of cash acquired of $156.3 million
 
(1,329.9
)
 
—

Investment in transmission affiliate
 
(5.6
)
 
(10.5
)
Proceeds from asset sales
 
26.7

 
—

Other, net
 
4.7

 
12.8

Net cash used in investing activities
 
(2,095.9
)
 
(528.9
)
 
 
 
 
 
Financing Activities
 
 
 
 
Exercise of stock options
 
26.4

 
31.7

Purchase of common stock
 
(66.1
)
 
(84.2
)
Dividends paid on common stock
 
(310.9
)
 
(264.0
)
Issuance of long-term debt
 
1,650.0

 
250.0

Retirement of long-term debt
 
(27.1
)
 
(322.0
)
Change in short-term debt
 
(270.5
)
 
(61.6
)
Other, net
 
(18.8
)
 
7.1

Net cash provided by (used in) financing activities
 
983.0

 
(443.0
)
 
 
 
 
 
Net change in cash and cash equivalents
 
(39.7
)
 
62.7

Cash and cash equivalents at beginning of period
 
61.9

 
26.0

Cash and cash equivalents at end of period
 
$
22.2

 
$
88.7




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