01—Abstract
Summary
Summary of the 10-Q filed November 1, 2024. Cited figures are marked; the original filing is the authoritative source.
WEC Energy Group, Inc. reported net income attributed to common shareholders of $240.1 milliona for the third quarter of 2024, compared with $316.0 million in the third quarter of 2023, and diluted earnings per share of $0.76 versus $1.00.
For the nine months ended September 30, 2024, net income attributed to common shareholders was $1,073.7 millionb, or $3.40 diluted EPS, compared with $1,113.2 million and $3.52 a year earlier. Operating revenues were $1,863.5 million for the quarter, down from $1,957.4 million, and $6,315.7 million for the nine months, down from $6,675.5 million. The filing attributes the quarterly earnings decline primarily to a $73.3 million decrease at the Illinois segment, tied to the ICC rate orders for PGL and NSG and a $25.3 million pre-tax charge from the ICC's disallowance of certain PGL capital costs, along with a $19.2 million increase in the corporate and other net loss driven by higher interest expense.
The balance sheet shows total assets of $45,196.5 millionc at September 30, 2024, and long-term debt including current portion of $18,712.9 million, against common shareholders' equity of $12,082.0 million. Short-term debt fell to $597.0 million from $2,020.9 million at year-end 2023, while cash and cash equivalents rose to $322.5 million. Capital expenditures for the nine months were $1,934.7 million, and management's 2025 to 2029 plan targets approximately $24.4 billion of capital expenditures for regulated utilities.
The company also entered into an equity distribution agreement for up to $1.5 billiond of common stock and issued $862.5 million each of 4.375% convertible senior notes due 2027 and 2029. The filing also notes pending matters that could affect future results, including Wisconsin rate requests for 2025 and 2026 with a decision expected in the fourth quarter of 2024, the PGL and NSG rate-order litigation, and a pending ICC proceeding on the pause in PGL's SMP spending. Management states the company had $2,705.3 million of available revolving credit capacity at September 30, 2024, and that a $1,390.2 million excess of current liabilities over current assets does not impact liquidity.
02—Key points
Key Highlights
- Net income attributed to common shareholders was $240.1 million in Q3 2024, down from $316.0 million; diluted EPS was $0.76 versus $1.00 a year earlier.
- Nine-month net income attributed to common shareholders was $1,073.7 million, or $3.40 diluted EPS, versus $1,113.2 million and $3.52 in the prior-year period.
- Illinois segment swung to a $48.6 million net loss in Q3 2024 from $24.7 million of income, driven by the PGL and NSG rate orders and a $25.3 million pre-tax charge tied to the ICC's QIP reconciliation disallowance.
- Short-term debt declined to $597.0 million from $2,020.9 million at December 31, 2023, after $2,672.4 million of long-term debt issuances in the nine months ended September 30, 2024.
- Capital expenditures were $1,934.7 million for the nine months, and the filing projects approximately $24.4 billion of regulated utility capital expenditures for 2025 to 2029.
- WEC entered into an equity distribution agreement on August 6, 2024 permitting up to $1.5 billion of common stock sales, and it had not issued any shares under it as of September 30, 2024.
- Available revolving credit capacity was $2,705.3 million at September 30, 2024, and the Wisconsin utilities' 2025 and 2026 rate requests are expected to be decided in the fourth quarter of 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Wec Energy Group kept $0.13.
- Revenue$1.86B100.0%
- Cost of revenue−$520.8M27.9%
- Gross profit$1.34B72.1%
- Operating costs−$959.0M51.5%
- Operating income$383.7M20.6%
- Interest, other & tax−$143.6M7.7%
- Net income$240.1M12.9%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 1, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $1.86B$1.96B | −4.8% |
| Cost of Revenue | $520.80M$587.40M | −11.3% |
| Gross Profit | $1.34B$1.37B | −2.0% |
| Operating Expenses | $1.48B$1.49B | −0.4% |
| Operating Income | $383.70M$472.00M | −18.7% |
| Interest Expense | $204.20M$182.50M | +11.9% |
| Net Income | $240.10M$316.00M | −24.0% |
| EPS (Basic) | $0.76$1.00 | −24.0% |
| EPS (Diluted) | $0.76$1.00 | −24.0% |
| Shares Outstanding (Basic) | 316.20M315.40M | +0.3% |
| Shares Outstanding (Diluted) | 316.50M315.80M | +0.2% |
05—Questions
Frequently Asked Questions
Why did WEC Energy's third-quarter earnings decline year over year?
Net income attributed to common shareholders fell $75.9 million to $240.1 million. The filing attributes the largest driver to a $73.3 million decrease at the Illinois segment from lower margins tied to the PGL and NSG rate orders, plus a $25.3 million pre-tax charge related to the ICC's disallowance of certain PGL capital costs. The corporate and other segment's net loss also increased $19.2 million, driven by an interim income tax expense adjustment and higher interest expense.
How did the Wisconsin segment perform in the third quarter of 2024?
The Wisconsin segment contributed $237.8 million of net income attributed to common shareholders, a $5.3 million decrease from $243.1 million. Higher depreciation and amortization and higher interest expense were partially offset by higher retail sales volumes and lower income tax expense from increased production tax credits.
What is the status of the Illinois regulatory matters affecting PGL and NSG?
The ICC issued a final order on August 14, 2024 disallowing $14.8 million of capital costs in PGL's 2016 QIP reconciliation, and PGL filed an appeal with the Illinois Appellate Court on October 25, 2024. The ICC also ordered PGL to pause SMP spending pending a proceeding initiated January 31, 2024, which is expected to last 12 months. The filing states that further disallowances could be material.
How is WEC funding its capital plan and debt maturities?
In the nine months ended September 30, 2024, WEC issued $2,672.4 million of long-term debt and reduced commercial paper by $1,424.8 million. In the second quarter of 2024 it issued $862.5 million each of 2027 and 2029 convertible senior notes at 4.375%, and it entered an equity distribution agreement for up to $1.5 billion of common stock. Short-term debt was $597.0 million at September 30, 2024.
What regulatory decisions are pending that could affect future earnings?
Wisconsin Electric, Wisconsin Public Service, and Wisconsin Gas requested electric and gas rate increases effective January 1, 2025 and January 1, 2026, with a PSCW decision expected in the fourth quarter of 2024 and a requested 10.0% ROE. The filing also notes that disallowances in the UEA and QIP rider reconciliations could be material, and that ATC's October 2024 FERC order is expected to increase pre-tax equity earnings by approximately $19 million to $20 million.
06—Continue