01—Abstract
Summary
Summary of the 10-Q filed July 31, 2024. Cited figures are marked; the original filing is the authoritative source.
WEC Energy Group, Inc. reported second-quarter 2024 net income attributed to common shareholders of $211.3 milliona, or $0.67 per diluted share, compared with $289.7 million, or $0.92 per diluted share, in the second quarter of 2023.
For the six months ended June 30, 2024, net income attributed to common shareholders was $833.6 millionb, or $2.64 per diluted share, versus $797.2 million, or $2.52 per diluted share, a year earlier. The Wisconsin segment drove the quarterly decline, with higher operating expenses, depreciation, storm restoration costs, and interest expense, while the Illinois segment's year-to-date earnings rose on the PGL and NSG rate orders. Capital investment remains heavy.
Capital expenditures were $1.14 billionc for the six months ended June 30, 2024, and the company's 2024 through 2026 capital expenditure forecast totals $4.16 billion, $3.95 billion, and $4.23 billion, respectively. The filing also describes the ESG Progress Plan, which includes retiring about 1,200 MWs of additional fossil-fueled generation by the end of 2031, and the company expects to invest approximately $19.5 billion in regulated utility businesses from 2024 to 2028. Balance sheet activity was significant.
Long-term debt rose to $16.91 billiond from $15.51 billion at year-end 2023, driven by the issuance of $1.725 billion of convertible senior notes and a $350.0 million WE debenture, while short-term debt fell to $761.3 million from $2.02 billion. Cash from operations was $1.90 billion for the six months, boosted by $172.8 million of cash received for income taxes related to tax credits sold to third parties. Pending rate cases include WE, WPS, and WG requests for 2025 and 2026 increases, with decisions expected in the fourth quarter of 2024.
02—Key points
Key Highlights
- Net income attributed to common shareholders was $211.3 million ($0.67 per diluted share) in Q2 2024, down from $289.7 million ($0.92 per diluted share) in Q2 2023.
- Year-to-date net income attributed to common shareholders was $833.6 million ($2.64 per diluted share), up from $797.2 million ($2.52 per diluted share) in the six months ended June 30, 2023.
- Illinois segment earnings rose $70.0 million year-to-date to $213.2 million, driven by PGL and NSG rate orders effective December 1, 2023 and February 1, 2024.
- Wisconsin segment earnings fell $53.5 million in Q2 2024 to $132.1 million, driven by higher operating expenses and interest expense.
- Long-term debt increased to $16.91 billion at June 30, 2024 from $15.51 billion at December 31, 2023, including $1.725 billion of 4.375% convertible senior notes due 2027 and 2029.
- Pending rate requests include WE, WPS, and WG electric and gas increases for January 1, 2025 and 2026, with a decision expected in the fourth quarter of 2024.
- Dividend declared at $0.835 per share quarterly, equal to $3.34 annually.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Wec Energy Group kept $0.12.
- Revenue$1.77B100.0%
- Cost of revenue−$469.7M26.5%
- Gross profit$1.30B73.5%
- Operating costs−$937.5M52.9%
- Operating income$364.8M20.6%
- Interest, other & tax−$153.5M8.7%
- Net income$211.3M11.9%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed July 31, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $1.77B$1.83B | −3.2% |
| Cost of Revenue | $469.70M$533.00M | −11.9% |
| Gross Profit | $1.30B$1.30B | +0.4% |
| Operating Expenses | $1.41B$1.40B | +0.2% |
| Operating Income | $364.80M$425.30M | −14.2% |
| Interest Expense | $200.60M$178.70M | +12.3% |
| Net Income | $211.30M$289.70M | −27.1% |
| EPS (Basic) | $0.67$0.92 | −27.2% |
| EPS (Diluted) | $0.67$0.92 | −27.2% |
| Shares Outstanding (Basic) | 315.90M315.40M | +0.2% |
| Shares Outstanding (Diluted) | 316.20M315.90M | +0.1% |
05—Questions
Frequently Asked Questions
How did WEC Energy Group perform in the second quarter of 2024?
Net income attributed to common shareholders was $211.3 million, or $0.67 per diluted share, compared with $289.7 million, or $0.92 per diluted share, in the second quarter of 2023. The Wisconsin segment's contribution fell $53.5 million, driven by higher operating expenses, depreciation, storm restoration costs, and interest expense, partly offset by gains in the non-utility energy infrastructure segment.
What is the company's capital spending outlook?
Capital expenditures were $1.14 billion for the six months ended June 30, 2024. The company estimates total capital expenditures of $4.16 billion for 2024, $3.95 billion for 2025, and $4.23 billion for 2026. It expects approximately $19.5 billion of capital expenditures for its regulated utility businesses from 2024 to 2028.
How did the company's debt position change?
Long-term debt including current portion rose to $18.07 billion in the capitalization table, with short-term debt falling to $761.3 million from $2.02 billion at December 31, 2023. Proceeds from the $1.725 billion convertible senior notes due 2027 and 2029 were used to repay short-term debt. The ratio of debt to total capitalization was 60.8% on an actual basis.
What are the key pending regulatory matters?
WE, WPS, and WG requested electric, gas, and steam rate increases effective January 1, 2025 and 2026, with a proposed ROE of 10.0%. A decision is expected in the fourth quarter of 2024. The Illinois Commerce Commission is also reviewing PGL's spending on its SMP pipeline program, with that proceeding expected to last 12 months from January 31, 2024.
Did the company receive cash from tax credit sales?
Yes. The company received $172.8 million in cash for income taxes during the six months ended June 30, 2024, driven by proceeds from selling 2023 and 2024 production tax credits to third parties under the Inflation Reduction Act transferability provision. Operating cash flow for the period was $1.90 billion, compared with $1.75 billion a year earlier.
06—Continue