Schedule I - Condensed Parent Company Financial Statements

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

SCHEDULE I - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS

SCHEDULE I – CONDENSED

PARENT COMPANY FINANCIAL STATEMENTS

WEC ENERGY GROUP, INC. (PARENT COMPANY ONLY)

A. INCOME STATEMENTS

Year Ended December 31
(in millions)	2019		2018		2017
Operating expenses	$	4.7	$	5.0	$	6.0
Equity in earnings of subsidiaries	1,210.5		1,108.3		1,234.7
Other income, net	6.3		6.8		2.1
Interest expense	122.3		104.1		82.0
Income before income taxes	1,089.8		1,006.0		1,148.8
Income tax benefit	44.2		53.3		54.9
Net income attributed to common shareholders	$	1,134.0	$	1,059.3	$	1,203.7

The accompanying Notes to Condensed Parent Company Financial Statements are an integral part of these financial statements.

B. STATEMENTS OF COMPREHENSIVE INCOME

Year Ended December 31
(in millions)	2019			2018			2017
Net income attributed to common shareholders	$	1,134.0		$	1,059.3		$	1,203.7
Other comprehensive income (loss), net of tax
Derivatives accounted for as cash flow hedges
Net derivative losses, net of tax benefits of $1.3, $0.8, and $0.0, respectively	(3.5		)	(2.1		)	—
Reclassification of net gains to net income, net of tax	(0.8		)	(1.2		)	(1.3		)
Cumulative effect adjustment from adoption of ASU 2018-02	—			1.6			—
Cash flow hedges, net	(4.3		)	(1.7		)	(1.3		)
Defined benefit plans
Pension and OPEB adjustments arising during the period, net of tax	0.4			(0.9		)	(0.1		)
Amortization of pension and OPEB costs included in net periodic benefit cost, net of tax	0.2			0.2			0.2
Cumulative effect adjustment from adoption of ASU 2018-02	—			(0.3		)	—
Defined benefit plans, net	0.6			(1.0		)	0.1
Other comprehensive income (loss) from subsidiaries, net of tax	2.2			(2.8		)	1.2
Other comprehensive loss, net of tax	(1.5		)	(5.5		)	—
Comprehensive income attributed to common shareholders	$	1,132.5		$	1,053.8		$	1,203.7

The accompanying Notes to Condensed Parent Company Financial Statements are an integral part of these financial statements.

C. BALANCE SHEETS

At December 31
(in millions)	2019		2018
Assets
Current assets
Cash and cash equivalents	$	0.5	$	32.8
Accounts receivable from related parties	0.7		4.0
Notes receivable from related parties	22.5		71.0
Prepaid taxes	46.5		—
Other	—		0.6
Current assets	70.2		108.4
Long-term assets
Investments in subsidiaries	13,433.1		12,682.5
Notes receivable from UMERC	—		150.0
Other	23.0		31.8
Long-term assets	13,456.1		12,864.3
Total assets	$	13,526.3	$	12,972.7
Liabilities and Equity
Current liabilities
Short-term debt	$	334.7	$	548.4
Current portion of long-term debt	400.0		—
Accounts payable to related parties	2.5		7.7
Notes payable to related parties	489.3		398.9
Other	17.9		14.0
Current liabilities	1,244.4		969.0
Long-term liabilities
Long-term debt	2,141.6		2,190.8
Other	26.9		24.0
Long-term liabilities	2,168.5		2,214.8
Common shareholders' equity	10,113.4		9,788.9
Total liabilities and equity	$	13,526.3	$	12,972.7

The accompanying notes to Condensed Parent Company Financial Statements are an integral part of these financial statements.

D. STATEMENTS OF CASH FLOWS

Year Ended December 31
(in millions)	2019			2018			2017
Operating activities
Net income attributed to common shareholders	$	1,134.0		$	1,059.3		$	1,203.7
Reconciliation to cash provided by operating activities
Equity income in subsidiaries, net of distributions	(475.2		)	(419.4		)	(686.1		)
Deferred income taxes	9.1			14.4			89.5
Change in –
Accounts receivable from related parties	3.3			(2.1		)	(0.1		)
Prepaid taxes	(46.5		)	17.5			28.4
Accounts payable to related parties	(5.2		)	4.6			(0.5		)
Other current liabilities	1.5			4.7			(1.4		)
Other, net	7.0			5.6			0.9
Net cash provided by operating activities	628.0			684.6			634.4
Investing activities
Acquisition of Bluewater	—			—			(226.0		)
Capital contributions to subsidiaries	(602.3		)	(448.7		)	(173.4		)
Return of capital from subsidiaries	337.3			290.2			—
Short-term notes receivable from related parties, net	48.5			(6.9		)	167.8
Issuance of long-term notes receivable from UMERC	—			(100.0		)	(50.0		)
Redemption of long-term notes receivable from UMERC	150.0			—			—
Other, net	(0.6		)	6.4			4.5
Net cash used in investing activities	(67.1		)	(259.0		)	(277.1		)
Financing activities
Exercise of stock options	67.0			29.1			30.8
Purchase of common stock	(140.1		)	(72.4		)	(71.3		)
Dividends paid on common stock	(744.5		)	(697.3		)	(656.5		)
Issuance of long-term debt	350.0			600.0			—
Retirement of long-term debt	—			(300.0		)	—
Change in short-term debt	(213.7		)	53.6			173.0
Short-term notes payable to related parties, net	90.4			(6.2		)	169.5
Other, net	(2.3		)	(3.6		)	—
Net cash used in financing activities	(593.2		)	(396.8		)	(354.5		)
Net change in cash and cash equivalents	(32.3		)	28.8			2.8
Cash and cash equivalents at beginning of year	32.8			4.0			1.2
Cash and cash equivalents at end of year	$	0.5		$	32.8		$	4.0

The accompanying Notes to Condensed Parent Company Financial Statements are an integral part of these financial statements.

SCHEDULE I – CONDENSED

PARENT COMPANY FINANCIAL STATEMENTS

WEC ENERGY GROUP, INC. (PARENT COMPANY ONLY)

E. NOTES TO PARENT COMPANY FINANCIAL STATEMENTS

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

For Parent Company only presentation, investments in subsidiaries are accounted for using the equity method. We use the cumulative earnings approach for classifying distributions received in the statements of cash flows.

The condensed Parent Company financial statements and notes should be read in conjunction with the consolidated financial statements and notes of WEC Energy Group, Inc. appearing in this Annual Report on Form 10-K.

NOTE 2—CASH DIVIDENDS RECEIVED FROM SUBSIDIARIES

Dividends received from our subsidiaries during the years ended December 31 were as follows:

(in millions)	2019		2018		2017
WE	$	360.0	$	310.0	$	240.0
We Power	192.5		223.0		181.0
ATC Holding	87.4		105.8		82.6
WG	60.0		50.0		45.0
WECI	25.4		—		—
UMERC	10.0		—		—
Wisvest	—		0.1		—
Total	$	735.3	$	688.9	$	548.6

NOTE 3—LONG-TERM DEBT

The following table shows the future maturities of our long-term debt outstanding as of December 31, 2019:

(in millions)
2020	$	400.0
2021	600.0
2022	350.0
2023	—
2024	—
Thereafter	1,200.0
Total	$	2,550.0

WECC is our subsidiary and has $50.0 million of long-term notes outstanding. In a Support Agreement between WECC and us, we agreed to make sufficient liquid asset contributions to WECC to permit WECC to service its debt obligations as they become due.

NOTE 4—FAIR VALUE MEASUREMENTS

The following table shows the financial instruments included on our balance sheets that are not recorded at fair value as of December 31:

	2019				2018
(in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term notes receivable from UMERC	$	—	$	—	$	150.0	$	145.5
Long-term debt, including current portion	2,541.6		2,619.4		2,190.8		2,132.8

The fair values of our long-term notes receivable and long-term debt are categorized within Level 2 of the fair value hierarchy.

NOTE 5—SUPPLEMENTAL CASH FLOW INFORMATION

(in millions)	2019			2018			2017
Cash paid for interest	$	117.7		$	102.9		$	82.5
Cash received for income taxes, net	(4.9		)	(85.9		)	(169.9		)
Significant non-cash investing and financing transactions:
Issuance of short-term note receivable to Bluewater	—			—			115.0
Issuance of short-term note receivable to UMERC	—			—			40.5
Settlement of short-term note payable with Wisvest	—			0.9			—
Settlement of short-term note payable with Bostco	—			—			4.8

NOTE 6—SHORT-TERM NOTES RECEIVABLE FROM RELATED PARTIES

The following table shows our outstanding short-term notes receivable from related parties as of December 31:

(in millions)	2019		2018
Wispark	$	13.5	$	28.5
UMERC	9.0		42.5
Total	$	22.5	$	71.0

NOTE 7—SHORT-TERM NOTES PAYABLE TO RELATED PARTIES

The following table shows our outstanding short-term notes payable to related parties as of December 31:

(in millions)	2019		2018
WBS	$	168.9	$	123.5
Integrys	166.9		139.5
WECC	111.7		110.3
Bluewater Gas Storage	41.8		25.6
Total	$	489.3	$	398.9