Skip to content
AnalystLens

Wec Energy Group Annual Report, Year Ended Dec 31, 2003

Filing Date
Filed March 2, 2004
Period End
December 31, 2003
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 March 2, 2004. Cited figures are marked; the original filing is the authoritative source.

Wisconsin Energy Corporation (now WEC Energy Group, Inc.) reported 2003 net income of $244.3 milliona, or $2.06 diluted EPS, up from $167.0 million in 2002, on total operating revenues of $4.05 billion.

Results were shaped by a cooler summer, higher fuel and purchased power costs, and higher benefit and nuclear costs in the utility segment, partly offset by gas margins and lower financing costs. Operating income in the utility energy segment fell to $544.1 millionb from $562.1 million, while the non-utility segment's operating loss narrowed to $61.5 million from $132.0 million, largely because 2002 carried larger asset valuation charges. The company reported a $45.6 million asset valuation charge in 2003 related primarily to non-utility investments.

The most significant strategic development is the agreement announced in February 2004 to sell the manufacturing segment (WICOR Industries) to Pentair, Inc. for $850 millionc in cash plus assumption of about $25 million of debt, with net cash proceeds expected to be about $740 million after taxes and transaction costs. The company expects to use proceeds to pay down debt and repurchase up to $50 million of common stock, and expects the sale to close in the second or third quarter of 2004. Management also highlighted its Power the Future strategy, which calls for about 2,120 megawatts of new generation at an estimated cost of about $2.5 billion, with Port Washington and Elm Road units approved by the Public Service Commission of Wisconsin but subject to legal challenges.

Capital expenditures were $659.4 milliond in 2003 and are estimated at $699.2 million for 2004. Total assets were $10.03 billion at year-end, and the company's credit ratings were lowered by S&P and Moody's and Fitch during 2003, though outlooks were stable as of early 2004. The dividend was raised 5% to $0.84 annualized in February 2004.

02—Key points

Key Highlights

  1. Net income rose to $244.3 million ($2.06 diluted EPS) in 2003 from $167.0 million ($1.44 diluted) in 2002.
  2. Agreed in February 2004 to sell the manufacturing segment to Pentair, Inc. for $850 million plus about $25 million of assumed debt; net cash proceeds expected to be about $740 million.
  3. Utility energy operating income declined to $544.1 million from $562.1 million, mainly due to cooler summer weather and higher fuel, purchased power, and benefit costs.
  4. Non-utility energy operating loss narrowed to $61.5 million from $132.0 million, reflecting smaller asset valuation charges in 2003 compared with 2002.
  5. Power the Future plan targets about 2,120 MW of new generation at an estimated cost of about $2.5 billion, with Port Washington and Elm Road projects approved by the PSCW but facing legal challenges.
  6. Capital expenditures of $659.4 million in 2003, with $699.2 million estimated for 2004.
  7. Quarterly dividend raised 5% to $0.21 per share in February 2004; the company's credit ratings were downgraded by S&P, Moody's and Fitch during 2003.

03—Questions

Frequently Asked Questions

  1. Why did net income increase in 2003?

    Net income rose to $244.3 million from $167.0 million, helped by lower financing costs, which fell $14.3 million, and a smaller non-utility operating loss, since 2002 included a $125.1 million asset valuation charge. Utility operating income declined, partly offsetting these gains.

  2. What is the status of the manufacturing segment sale?

    In February 2004 the company agreed to sell its manufacturing segment to Pentair, Inc. for $850 million in cash plus about $25 million of assumed third-party debt. The sale is subject to regulatory approvals and is expected to close in the second or third quarter of 2004, with net proceeds of about $740 million.

  3. What will the company do with the sale proceeds?

    The company expects to use the proceeds to pay down long- and short-term debt and to repurchase up to $50 million of its common stock in the open market.

  4. What is the Power the Future strategy?

    It is a 10-year plan to add generation and improve distribution in Wisconsin, including about 2,120 MW of new capacity at an estimated cost of about $2.5 billion. Port Washington gas units and Elm Road coal units have received PSCW certificates, though the filing notes legal challenges that could affect timing.

  5. How did the company's credit ratings change?

    In 2003 S&P lowered the parent's corporate rating from A- to BBB+, and Moody's and Fitch also downgraded the parent and subsidiaries. The filing reports stable rating outlooks for the parent and its utility subsidiaries as of early 2004.

04—Continue

← View all 10-K filings