WEC Energy Group, Inc. · NYSE:WEC
WEC Energy — Wisconsin Energy — Credit Suisse Energy Summit 2014
22 slides from WEC Energy's conference presentation, Feb 12, 2014
Slide 1: Credit Suisse Energy Summit
Credit Suisse Energy Summit February 12, 2014
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information Much of the information contained in this presentation is forward-looking information based upon management’s current expectations and projections that involve risks and uncertainties. Forward-looking information includes, among other things
Slide 3: Investment Thesis
Investment Thesis An “Earn and Return” Company with a Low Risk Profile Positive free cash flow Targeted EPS growth of 4%-6% Best in class dividend growth - targeting a dividend payout ratio of 65%-70% of earnings in 2017 $300 million share buyback program authorized from 2014 through 2017
Slide 4: Overview
Overview Retail Electric and Gas Utilities Largest electric and gas company in Wisconsin 1.1 million electric customers 1.1 million natural gas customers 4
Slide 5: 2013 Earnings Per Share
A Track Record of Performance 2013 Earnings Per Share 2013 2012 $2.51 $2.35 Increase of 6.8% 5
Slide 6: Consistent Earnings and Dividend Growth
A Track Record of Performance Consistent Earnings and Dividend Growth Wisconsin Energy is the only company in the S&P Electric Index S&P Utilities Index Philadelphia Utility Index Dow Jones Utilities Average that has grown earnings per share and dividends per share every year since 2003 6
Slide 7: Total Shareholder Return
Total Shareholder Return A Ten-Year Track Record of Performance Wisconsin Energy 227.1% Dow Jones Industrial Average 104.9% S&P 500 Index 104.3% NASDAQ Composite Index 133.2% Philadelphia Utility Index 137.1% S&P Electric Index 132.4% 7
Slide 8: Leading Reliability and Customer Satisfaction
A Track Record of Performance Leading Reliability and Customer Satisfaction Named the most reliable utility … In the U.S. in 2013 In the Midwest nine of the past 12 years During 2013, achieved highest customer satisfaction ratings in past decade … likely best ever 8
Slide 9: Meeting the Region's Energy Needs - Natural Gas
A Track Record of Performance Meeting the Region’s Energy Needs Power the Future - Natural Gas Capacity 1,090 MW Investment $664 million In Service Dates Unit 1 – July 2005 Unit 2 – May 2008 Cost Per Unit of Capacity $609/kW 9
Slide 10: Meeting the Region's Energy Needs - Coal
A Track Record of Performance Meeting the Region’s Energy Needs Power the Future - Coal Capacity 1,030 MW1 Investment $2 billion1 In Service Dates Unit 1 – February 2010 Unit 2 – January 2011 Cost Per Unit Approximately of Capacity $1,950/kW 1 All capacity and investment amounts reflect WEC ownershi
Slide 11: Dramatic Change in Environmental Performance
A Track Record of Performance Dramatic Change in Environmental Performance From 2000 to 2014... Power plant capacity up 50% Emissions of nitrogen oxide sulfur dioxide down 80% mercury particulate matter 11
Slide 12: Delivering the Future
Where We Go From Here Delivering the Future From 2014 through 2018, our plan is to invest $3.2 to $3.5 billion in needed infrastructure projects that will: Renew and modernize our grid Meet new environmental standards Reduce our operating costs for customers From 2014 through 2023, our pla
Slide 13: Delivering the Future - Twin Falls
Where We Go From Here Delivering the Future - Twin Falls In 2012 announced plans for a new powerhouse at Twin Falls 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 13
Slide 14: Delivering the Future - Valley Power Plant
Where We Go From Here Delivering the Future -Valley Power Plant In 2012 announced plans to convert Valley from coal to natural gas Targeting completion of the conversion for late 2015 or early 2016 Follows completion of a $26 million gas pipeline upgrade with expected completion in 2014 Proj
Slide 15: Delivering the Future - Electric Overview
Where We Go From Here Delivering the Future – Electric Overview Between 2014 and 2018, we plan to: Rebuild 2,000 miles of electric distribution lines that are more than 50 years old Replace: 18,500 power poles 20,000 transformers Hundreds of substation components 15
Slide 16: Delivering the Future - Gas Overview
Where We Go From Here Delivering the Future – Gas Overview Between 2014 and 2018, we also plan to: Replace: 1,100 miles of vintage plastic and steel gas mains 83,000 individual gas distribution lines 233,000 meter sets 16
Slide 17: Delivering the Future - Western Wisconsin Gas Expansion
Where We Go From Here Delivering the Future - Western Wisconsin Gas Expansion New distribution capacity needed to address reliability and meet growth in customer demand Demand driven by propane conversion and frac sand mining Expected initial investment for the 85-mile lateral: $150-$170 milli
Slide 18: The Frozen Tundra Meets the Polar Vortex
The Frozen Tundra Meets the Polar Vortex… 18 18
Slide 19: Best in Class Financial Flexibility
Where We Go From Here Best in Class Financial Flexibility We project approximately $500 million of free cash flow after capital spending and dividends over the five-year period 2014-2018 19
Slide 20: Industry Leading Dividend Growth
Where We Go From Here Industry Leading Dividend Growth $1.56 $1.45 $1.20 $1.04 $0.80 $0.68 $0.50 $0.54 $0.44 $0.46 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E Targeting dividend payout ratio of 65 - 70 percent of earnings in 2017 20
Slide 21: Financial Flexibility for Share Repurchases
Where We Go From Here Financial Flexibility for Share Repurchases The board of directors authorized management to purchase up to $300 million of Wisconsin Energy common stock from 2014 – 2017 Original share buyback program authorized the purchase of up to $300 million of Wisconsin Energy common
Slide 22: Key Takeaways on Wisconsin Energy
Key Takeaways on Wisconsin Energy “Earn and Return” Company with Low Risk Profile Power the Future program now complete Highly visible earnings and strong cash flow Well managed utility franchises with rate base growth Investment in American Transmission Company provides an additional regula