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Wec Energy Group Annual Report, Year Ended Dec 31, 2002

Filing Date
Filed February 28, 2003
Period End
December 31, 2002
Security
WEC
In the record · 2016–202610-K1110-Q338-K260

WEC filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 260 current reports (8-K) between 2016 and 2026.

  1. FY2018 annual report10-K · Feb ’19Feb ’19
  2. Leadership change8-K · Jan ’22Jan ’22
  3. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed February 28, 2003. Cited figures are marked; the original filing is the authoritative source.

Wisconsin Energy Corporation reported 2002 net income of $167.0 milliona, or $1.44 diluted earnings per share, down from $219.0 million ($1.86 per diluted share) in 2001.

The decline was driven primarily by a $141.5 millionb pre-tax ($92.0 million after tax, or $0.79 per share) non-cash asset valuation charge in the first quarter of 2002 on non-utility energy assets, including the Wisvest-Connecticut plants, which were sold on December 6, 2002. Adjusted earnings, which exclude that charge and other items, rose to $2.32 per share from $2.11. The utility energy segment was the main driver, with net earnings of $295.2 million, and the manufacturing segment's net earnings were $24.0 million.

The company is executing its 10-year, $7 billionc Power the Future strategy to add generation and upgrade the distribution system in Wisconsin. It plans to invest approximately $3.0 billion in 2,800 megawatts of new generation, about $1.3 billion in upgrades to existing generating assets, and about $2.7 billion in distribution assets. The Public Service Commission of Wisconsin issued a certificate of public convenience and necessity in December 2002 for the Port Washington gas-fired units, and a decision on the Oak Creek coal site is expected in late 2003.

Total capital expenditures are estimated at $693 milliond for 2003. The company also divested about $1.0 billion of non-core assets since 2000 and reported total assets of $8.36 billion at December 31, 2002.

Key risks include pending regulatory approvals for Power the Future, Moody's review for possible downgrade of Wisconsin Energy's security ratings in February 2003, exposure to the Point Beach nuclear plant's auxiliary feedwater issues cited by the NRC, and a Court of Federal Claims lawsuit against the U.S. Department of Energy over used fuel storage, where damages exceed $35 million. The company's 2003 dividend remained at $0.80 per share, the same as in 2002 after the reduction that began in 2001.

02—Key points

Key Highlights

  1. 2002 net income of $167.0 million ($1.44 diluted EPS) versus $219.0 million ($1.86) in 2001, reflecting a $141.5 million pre-tax non-cash asset valuation charge in Q1 2002
  2. Adjusted earnings per share increased to $2.32 in 2002 from $2.11 in 2001, excluding the valuation charge, litigation charges and other items
  3. Utility energy segment net earnings were $295.2 million in 2002, the largest contributor, while non-utility energy segment posted a net loss of $94.4 million
  4. Power the Future strategy: approximately $3.0 billion for 2,800 MW of new generation, $1.3 billion for generation upgrades and $2.7 billion for distribution over the next decade
  5. Port Washington combined-cycle units received a PSCW certificate in December 2002; Oak Creek coal site decision expected in late 2003
  6. Divested about $1.0 billion of non-core assets since 2000, including the Wisvest-Connecticut sale completed December 6, 2002
  7. Moody's placed Wisconsin Energy's security ratings under review for possible downgrade in February 2003; S&P and Fitch outlooks remain stable

03—Questions

Frequently Asked Questions

  1. Why did Wisconsin Energy's net income decline in 2002?

    The main cause was a non-cash impairment charge of $141.5 million ($92.0 million after tax, or $0.79 per share) recorded in the first quarter of 2002 on non-utility energy assets held for sale, primarily the Wisvest-Connecticut power plants and a 500 megawatt power island. Net income was $167.0 million versus $219.0 million in 2001.

  2. What is the Power the Future strategy and how much will it cost?

    Power the Future is a 10-year, $7 billion strategy to improve electricity supply and reliability in Wisconsin. It includes about $3.0 billion for 2,800 megawatts of new natural gas and coal generation, about $1.3 billion for upgrades to existing generating assets and about $2.7 billion for energy distribution system assets. New plants will be built by We Power and leased to Wisconsin Electric under 25 to 30-year agreements.

  3. What were the company's capital expenditure plans for 2003?

    Total capital expenditures excluding nuclear fuel and manufacturing acquisitions were estimated at $693 million for 2003, compared with $557 million actual in 2002. The largest component was $455 million for the utility energy segment, and $186 million was estimated for Power the Future within the non-utility energy segment.

  4. What regulatory approvals and risks does the company face?

    Power the Future requires several state and federal approvals. The PSCW granted a CPCN for Port Washington in December 2002, and a decision on the Oak Creek site is expected in late 2003. Moody's placed the company's ratings under review for possible downgrade in February 2003. The NRC also issued a notice of violation related to Point Beach's auxiliary feedwater system, and the company says it cannot yet estimate the impact of a related issue.

04—Continue

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