WEC Energy Group, Inc. · NYSE:WEC
WEC Energy — Wisconsin Energy — Investor Presentation (March 2011)
20 slides from WEC Energy's investor presentation, March 2011
Slide 1: Wisconsin Energy Corporation March 2011
Yau Wisconsin Energy (7m Corporation March 2011
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: Key Areas to be Covered
Key Areas to be Covered Overview of Wisconsin Energy Retail Electric and Gas Utilities Power the Future Wholesale Electric Transmission Earnings Outlook All per share values reflect two-for-one share split effective March 1, 2011 3
Slide 4: Overview of Wisconsin Energy
Overview of Wisconsin Energy Estimated Rate Base and Power the Future Investment at 12/31/11 Retail Electric and Gas Utilities Wisconsin, Michigan, and FERC $9.7 Billion jurisdictions 48.5% to 53.5% equity for Wisconsin $2.7 $0.7 Electric 10.4% allowed ROE $2.7 45% to 50% equity for Wiscon
Slide 5: Retail Electric and Gas Utilities
Retail Electric and Gas Utilities Largest electric and gas company in Wisconsin 1.1 million electric customers 1.0 million natural gas customers 5
Slide 6: Expected Levels of Investment and Depreciation
Retail Electric and Gas Utilities Expected Levels of Investment and Depreciation $1,000 $914 $900 $166 $800 Millions of Dollars $687 $700 $625 $600 $212 $333 $68 $493 $500 $132 $71 $400 $146 $10 $300 $200 $415 $425 $412 $329 310 320 250 260 $100 $0 2010A 2011E 2012E 2013E Base Renewable Environmenta
Slide 7: Projected Rate Base
Retail Electric and Gas Utilities Projected Rate Base Average Total Utility Rate Base $8 $6.7 $6.7 $7 $6.3 $0.4 $0.3 $0.2 $6 $5.5 Billions of Dollars $1.0 $5 $0.6 $4 $6.4 $6.7 $3 $4.9 $5.1 $2 $1 $0 ($0.1) ($0.3) 2010A 2011E 2012E 2013E -$1 PPE CWIP All Other* *All other is comprised of customer adva
Slide 8: Renewable Energy Opportunity: Renewable Portfolio Standard
Renewable Energy Opportunity Renewable Portfolio Standard in Wisconsin Required Percentage for Wisconsin Electric Retail Sales 8.27% * 4.27% * 2.27% 2001-03 2010 2015 Baseline *Requirements at a Wisconsin state level are 5% and 10% in 2010 and 2015 respectively. In terms of energy this is estimated
Slide 9: Renewable Energy Opportunity: Wind Projects
Renewable Energy Opportunity Wind Projects Blue Sky Green Field Completed May 2008 145 MW $295 million investment Glacier Hills Construction began May 2010 160 MW Estimated investment of $367 million Wisconsin Electric has executed 165MW of renewable energy transactions to help ach
Slide 10: Renewable Energy Opportunity: Biomass Project
Renewable Energy Opportunity Biomass Project Biomass Filed application for a 50MW project with PSCW on March 15, 2010 Estimated investment of $255 million with a target in-service date of 2013 All local permits have been obtained Decision by the PSCW is expected in the first quarter of 201
Slide 11: Electric Fuel Cost Recovery
Electric Fuel Cost Recovery Wisconsin Jurisdiction Electric fuel case for 2010 was filed on February 19, 2010 Interim relief was granted on March 25, 2010 Wisconsin jurisdictional increase of $60.5 million, subject to refund Final decision expected in early 2011 Limited reopening of fuel r
Slide 12: Power the Future Plan
Power the Future Plan Natural Gas Coal Capacity 1,090 MW 1 1,030 MW 1 Investment $664 million $2.0 billion ROE 12.7% 12.7% Equity 53% 55% Initial Lease Term 25 Years 30 Years Actual & Targeted Unit 1 – July 16, 2005 Unit 1 – February 2, 2010 In-service Dates Unit 2 – May 23, 2008 Unit 2 – January 12
Slide 13: Power the Future: Expected Earnings
Power the Future Expected Earnings Earnings per Share Contribution Key Assumptions Consolidated Basis Oak Creek Unit 2 in service $0.66 $0.67 January 12, 2011 Cost estimate of $2 billion for $0.48 WEC’s ownership of the coal units $0.21 Free cash flow of $225 million in 2011 – after capex and
Slide 14: Wholesale Electric Transmission
Wholesale Electric Transmission Wisconsin Energy owns 26.2% of American Transmission Company (ATC) ATC is projected to contribute approximately 16 cents to our EPS this year Represents almost 9% of consolidated earnings ATC’s projected capital investment over the next ten years is $3.4 billi
Slide 15: Wholesale Electric Transmission: Expected Earnings
Wholesale Electric Transmission Expected Earnings Projected Capital Expenditures Key Assumptions (Millions of Dollars) $271 In its latest 10-year $252 $252 assessment ATC projects a need for $3.4 billion of transmission improvements in its footprint from 2010 to 2019 Implies average $30 million
Slide 16: Projected Earnings Base for 2010 - 2012
Projected Earnings Base for 2010 - 2012 2010A 2011E 2012E Electric and Gas Utilities $1.34 $1.36 to $1.41 $6.7 billion rate base Power the Future (1) $0.48 $0.66 $0.67 Wholesale Electric Transmission (2) $0.15 $0.16 $0.17 Unallocated holding company debt(3) ($0.05) ($0.13) ($0.09) $1.92 $2.05 to $2.
Slide 17: Financing and Dividend Policy
Financing and Dividend Policy Capital Structure Goals Maintain debt to capital below 55% by the end of 2013 Actual ratio was 54.1% at the end of 2010 Assumes half of hybrid securities are treated as common equity Dividend Policy Target a dividend payout ratio of 50-55 percent of earnings
Slide 18: Free Cash Flow Generation
Free Cash Flow Generation Base Assumptions 50% dividend payout ratio $450 million April 1, 2011 WEC debt maturity repaid $3.4 billion capital budget over 2011 to 2015 period After funding requirements listed above we estimate additional free cash flow of about $600 million from 2011 to 201
Slide 19: Projected Growth in Earnings and Dividends
Projected Growth in Earnings and Dividends Earnings per Share Dividends per Share $2.05 to $1.04 $1.92 $2.10 $1.60 $0.80 $0.68 2009A 2010A 2011E 2009A 2010A 2011E 19
Slide 20: Key Takeaways on Wisconsin Energy
Key Takeaways on Wisconsin Energy Power the Future program now complete Highly visible earnings and strong cash flow Solid utility franchises with rate base growth Driven by environmental upgrades, renewable energy projects and network improvements Investment in American Transmission Compa
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