WEC Energy Group, Inc. · NYSE:WEC
WEC Energy — Wisconsin Energy — Investor Presentation (June 2015)
26 slides from WEC Energy's investor presentation, June 2015
Slide 1: Appendix
Wisconsin Energy Corporation Vz Appendix June 2015
Slide 2: Industry Leading Dividend Growth
A Track Record of Performance Industry Leading Dividend Growth $1.69 $1.56 $1.45 $1.20 $1.04 $0.80 $0.68 $0.50 $0.54 $0.46 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E Targeting dividend payout ratio of 65 - 70 percent of earnings in 2017 2
Slide 3: Power the Future Investments – Natural Gas
A Track Record of Performance Power the Future Investments – Natural Gas Meeting the Region’s Energy Needs Capacity 1,090 MW Investment $664 million ROE 12.7% Equity 53% In Service Dates Unit 1 – July 2005 Unit 2 – May 2008 Cost Per Unit of Capacity $609/kW 3
Slide 4: Power the Future Investments – Coal
A Track Record of Performance Power the Future Investments – Coal Meeting the Region’s Energy Needs Capacity 1,030 MW1 Investment $2 billion1 ROE 12.7% Equity 55% In Service Dates Unit 1 – February 2010, Unit 2 – January 2011 Cost Per Unit Approximately of Capacity $1,950/kW 1 All capacity and inves
Slide 5: Strong Financial Foundation
A Track Record of Performance Strong Financial Foundation Positive Cash Flow … Project $300 million of free cash flow from 2015-2019 Expect to generate free cash flow each year after reaching target dividend payout ratio in 2017 Solid credit ratings … Well-Funded Pension … Moody’s S&P Fitch WEC(
Slide 6: Five-Year Capital Investment in our Retail Utilities
Where We Go From Here Five-Year Capital Investment in our Retail Utilities (Projected Investment, In millions) $900 $800 $765 $690 $681 $700 $657 $647 $628 $600 316 208 227 219 225 213 $500 $400 234 236 235 247 $300 229 242 420 439 $200 362 377 404 350 191 127 108 84 108 125 $100 86 96 97 99 57 61 $
Slide 7: Ten-Year Capital Projection 2015 - 2024
Where We Go From Here Ten-Year Capital Projection 2015 - 2024 $6.6 to $7.2 billion investment in our core business Power the Future: Plus Additional Growth Opportunities $0.2B $2.7 ATC – Traditional Footprint $3.3 to $3.9 billion WEC Ownership 26.2% DATC – Outside ATC Traditional Footprint R
Slide 8: Western Wisconsin Gas Expansion
Where We Go From Here Western Wisconsin Gas Expansion Additional natural gas distribution Sand Plants – Wisconsin capacity needed to address reliability and to meet growth in customer demand Frac sand mining - increase from 10 to 121 licensed sand mining operations since 2010 Propane conversio
Slide 9: Renewable Energy Investments
Where We Go From Here Renewable Energy Investments Biomass plant completed 50MW Investment of $269 million Commercial operation began in November of 2013 Renewable fleet in place Glacier Hills Wind Park (162 MW, in service since 2011) Blue Sky Green Field Wind Park (145 MW, in service
Slide 10: Valley Power Plant
Where We Go From Here Valley Power Plant Converting Valley from coal to natural gas Unit 1 conversion completed in November Targeting completion of project in late 2015 Follows construction of a $30 million gas pipeline upgrade (now in service) Projected conversion cost for Valley: $65 to
Slide 11: Twin Falls Hydroelectric Powerhouse
Where We Go From Here Twin Falls Hydroelectric Powerhouse Building a new powerhouse at Twin Falls as existing powerhouse is in need of repair Construction began in the fall of 2013 with scheduled completion in 2016 Expected cost: $60 to $65 million 11
Slide 12: Oak Creek Plant Projects
Where We Go From Here Oak Creek Plant Projects Goal: enable our Oak Creek expansion units to burn both Powder River Basin (PRB) and bituminous coal In May Wisconsin Commission approved: $21 million of additional capital for plant modifications that will enable testing of up to 100% PRB coal
Slide 13: Amended Michigan Settlement
Where We Go From Here Amended Michigan Settlement Entered into an agreement in March with the Michigan Governor, Attorney General of Michigan, MPSC Staff and owners of the two iron ore mines in the Upper Peninsula (UP) of Michigan Wisconsin Electric retains ownership of Presque Isle Power Plant
Slide 14: Stand Alone Service Territory
Service Territory and Economy Stand Alone Service Territory Largest electric and gas company in Wisconsin 1.1 million electric customers 1.1 million natural gas customers 14
Slide 15: Electric Retail Customer Base
Service Territory and Economy Electric Retail Customer Base 2014 Retail KWh Sales Mix* Other 1% C&I Sector % of 2014 Largest Electric Large C&I Segments* C&I Sales Residential 30% 33% Office 12.5% Small C&I Retail 6.3% 36% Primary Metals 5.9% Health Care 5.3% 2014 Retail Revenues* Food 5.2% Other Ed
Slide 16: Forecast of Electric Sales
Service Territory and Economy Forecast of Electric Sales* 2015 Forecast vs. 2015 Forecast vs. 2014 Actual 2014 Normalized Residential 2.0% 0.2% Small C&I 0.5% 0.3% Large C&I (ex. Mines) 0.3% -0.3% Total Retail w/o Mines 0.9% 0.1% *Delivered Volumes or Supply and Distribution Volumes 16
Slide 17: Combined Company Operating Company View
Service Territory and Economy Combined Company Operating Company View Minnesota Wisconsin Green Bay Milwaukee Michigan Wisconsin Energy Corp. Chicago Michigan Gas Utilities Corporation Illinois Minnesota Energy Resources Corporation North Shore Gas Company The Peoples Gas Light and Coke Company Wisc
Slide 18: Regulatory Environment
Service Territory and Economy Regulatory Environment Wisconsin Commission Michigan Commission 3 Commissioners 3 Commissioners Gubernatorial appointment, Gubernatorial appointment, Senate confirmation Senate confirmation Chairman: Gubernatorial Chairman: Gubernatorial appointment appo
Slide 19: Regulatory Environment
Service Territory and Economy Regulatory Environment Illinois Commission Minnesota Commission 5 Commissioners 5 Commissioners Gubernatorial appointment, Gubernatorial appointment, Senate confirmation Senate confirmation Chairman: Gubernatorial Chairman: Gubernatorial appointment appo
Slide 20: Pro Forma Company Size Relative To Peers
Financial Summary Pro Forma Company Size Relative To Peers Publicly Traded Electric and Gas Utilities - Market Value (in $ billions) $59.1 #15 $21.3 $21.0 $19.3 #19 $18.2 $17.0 $16.9 $16.4 $15.8 $15.3 #31 $13.4 $12.1 $11.2 $10.1 $9.8 $9.6 $6.3 $6.3 $5.9 $5.6 PF WEC WEC TEG U.S. Gas Customers (in tho
Slide 21: WEC Rate Base Investment – end of 2014
Financial Summary WEC Rate Base Investment – end of 2014 $10.3 Billion Jurisdictional Mix Retail Electric and Gas Utilities $0.8 1% Wisconsin, Michigan, and FERC 10% jurisdictions $2.7 Growth driven by projected capital spend averaging $700 million per year, primarily for electric and gas infr
Slide 22: Pro Forma Rate Base Investment – end of 2015
Financial Summary Pro Forma Rate Base Investment – end of 2015 $16.7 Billion Jurisdictional Mix 4% Retail Electric and Gas Utilities $1.8 Wisconsin, Illinois, Michigan, Minnesota, and 13% FERC jurisdictions $2.8 Growth driven by average annual capital 14% spend of $1.4 billion per year, e.g.
Slide 23: Dividend Parity – Illustrative Example
Financial Summary Dividend Parity – Illustrative Example (based on current dividend rates per share) Per Share DIVIDEND EXCHANGE RATIO (1) Wisconsin Energy 10 trading day average closing price at effective merger close date $51.01 x Stock consideration exchange ratio 1.128x = Value of stock consider
Slide 24: Integrys Energy Group Company Structure
Integrys Overview Integrys Energy Group Company Structure 24
Slide 25: Integrys Regulated Utilities – Regulatory Rate Base and Return on Equity
Integrys Overview Integrys Regulated Utilities – Regulatory Rate Base and Return on Equity PGL NSG MERC MGU WPS Natural Gas Natural Gas Natural Gas Natural Gas Natural Gas Electric Retail last authorized, IL/MN Rate base/investment ($ millions) 1,670 217 190 Allowed ROE 9.05% 9.05% 9.35% Authorized
Slide 26: Non-GAAP Earnings Measures
Non-GAAP Earnings Measures Adjusted earnings (non-GAAP earnings), which generally exclude nonoperational items that are not associated with the company’s ongoing operations, are provided as a complement to, and should not be considered as an alternative to, reported earnings presented in accordanc