01—Abstract
Summary
Summary of the 10-K filed February 23, 2023. Cited figures are marked; the original filing is the authoritative source.
WEC Energy Group, Inc. reported 2022 net income attributed to common shareholders of $1,408.1 milliona, up $107.8 million from $1,300.3 million in 2021, and diluted earnings per share of $4.45 versus $4.11.
The increase was driven mainly by the Wisconsin segment (up $51.9 million, to $758.4 millionb), the non-utility energy infrastructure segment (up $45.2 million, to $324.4 million, largely from higher production tax credits), and the electric transmission segment (up $23.2 million, to $129.5 million, reflecting a D.C. Circuit Court of Appeals ROE opinion). These gains were partly offset by a $20.3 million larger loss at the corporate and other segment.
Total operating revenues rose to $9,597.4 millionc from $8,316.0 million, while total capital expenditures were $2,314.9 million. The company expects capital expenditures of approximately $18.1 billion for its regulated utility and non-utility energy infrastructure businesses from 2023 to 2027, plus about $2.0 billion for its share of ATC's projected capital spending, which together make up the $20.1 billion ESG Progress Plan. The plan centers on retiring about 1,600 MW of additional fossil-fueled generation by the end of 2026 and reducing electric generation carbon emissions 60% by the end of 2025 and 80% by the end of 2030, both from a 2005 baseline.
At year-end 2022, current liabilities exceeded current assets by $1,423.3 milliond, and total debt was $17,294.5 million, or 60.3% of total capitalization. The company reported $1,454.2 million of available revolving credit capacity.
In January 2023, the Board increased the quarterly dividend to $0.78 per share, an annual rate of $3.12, and affirmed a target payout ratio of 65-70% of earnings. Wisconsin base rate orders effective January 1, 2023 include a 9.8% authorized ROE for WE, WPS and WG.
02—Key points
Key Highlights
- Net income attributed to common shareholders rose $107.8 million to $1,408.1 million in 2022; diluted EPS was $4.45 versus $4.11 in 2021.
- Wisconsin segment earnings increased $51.9 million to $758.4 million, driven by lower operation and maintenance expense from regulatory liability amortization.
- Non-utility energy infrastructure earnings increased $45.2 million to $324.4 million, primarily due to higher production tax credits from the Jayhawk wind park and other wind parks.
- The ESG Progress Plan targets about $20.1 billion of capital investment ($18.1 billion utility and non-utility plus about $2.0 billion for ATC) for 2023-2027.
- Total operating revenues were $9,597.4 million, up from $8,316.0 million; capital expenditures were $2,314.9 million in 2022.
- Current liabilities exceeded current assets by $1,423.3 million at year-end 2022, with $1,454.2 million of available revolving credit capacity.
- The quarterly dividend was raised to $0.78 per share in January 2023 (annual $3.12), with a target payout ratio of 65-70% of earnings.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Wec Energy Group kept $0.15.
- Revenue$9.60B100.0%
- Cost of revenue−$4.36B45.4%
- Gross profit$5.24B54.6%
- Operating costs−$3.31B34.5%
- Operating income$1.92B20.0%
- Interest, other & tax−$516.1M5.4%
- Net income$1.41B14.7%
Where FY2022 revenue went
$9.60B- Cost of revenue: $4.36B, 45% of revenue
- Operating costs: $3.31B, 35% of revenue
- Net income: $1.41B, 15% of revenue
- Interest, other & tax: $516.1M, 5.4% of revenue
Kept 15% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 23, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $9.60B$8.32B | +15.4% |
| Cost of Revenue | $4.36B$3.31B | +31.6% |
| Gross Profit | $5.24B$5.00B | +4.7% |
| Operating Expenses | $7.67B$6.60B | +16.2% |
| Operating Income | $1.92B$1.71B | +12.2% |
| Interest Expense | $515.10M$471.10M | +9.3% |
| Net Income | $1.41B$1.30B | +8.3% |
| EPS (Basic) | $4.46$4.12 | +8.3% |
| EPS (Diluted) | $4.45$4.11 | +8.3% |
| Shares Outstanding (Basic) | 315.40M315.40M | 0.0% |
| Shares Outstanding (Diluted) | 316.10M316.30M | −0.1% |
05—Questions
Frequently Asked Questions
How did WEC Energy Group perform financially in 2022?
Net income attributed to common shareholders was $1,408.1 million, up $107.8 million from $1,300.3 million in 2021. Diluted EPS was $4.45, compared with $4.11 in 2021. Operating revenues were $9,597.4 million, versus $8,316.0 million the prior year.
What are the main drivers of the earnings increase?
The Wisconsin segment contributed a $51.9 million increase, driven by lower operation and maintenance expense from amortized regulatory liabilities. The non-utility energy infrastructure segment added $45.2 million, mainly from higher production tax credits. The electric transmission segment added $23.2 million, reflecting a D.C. Circuit Court of Appeals opinion on ATC's ROE and the absence of a 2021 goodwill impairment. The corporate and other segment's net loss grew $20.3 million.
What is the company's capital investment plan?
The company expects capital expenditures of approximately $18.1 billion for its regulated utility and non-utility energy infrastructure businesses from 2023 to 2027, plus about $2.0 billion for its share of ATC's projected capital expenditures. Together, these form the $20.1 billion ESG Progress Plan. Estimated capital expenditures are $3,974.7 million in 2023, $3,908.1 million in 2024, and $3,384.1 million in 2025.
What are the company's emissions and retirement goals?
The company targets reductions in carbon emissions from its electric generation fleet of 60% by the end of 2025 and 80% by the end of 2030, both from a 2005 baseline, with a longer-term target of net-zero CO2 emissions by 2050. It has already retired more than 1,800 MW of coal-fired generation since 2018 and expects to retire about 1,600 MW of additional fossil-fueled generation by the end of 2026.
How is the company's balance sheet and dividend position?
At December 31, 2022, total debt was $17,294.5 million, or 60.3% of total capitalization. Current liabilities exceeded current assets by $1,423.3 million, and $1,454.2 million of revolving credit capacity was available. In January 2023, the Board raised the quarterly dividend to $0.78 per share (annual $3.12), an increase of 7.2%, and affirmed a dividend payout target of 65-70% of earnings.
06—Continue