WEC Energy Group, Inc.

Good afternoon and welcome to WEC Energy Group's conference call for fourth quarter and year end 2024 results. This call is being recorded for rebroadcast and all participants are in a listen only mode at this time. After the presentation, the conference will be open to analysts for questions and answers. In conjunction with this call, a package of detailed financial information is posted at wecenergygroup.com. A replay will be available approximately two hours after the conclusion of this call. Before the conference call begins, please note that all statements in the presentation other than historical facts are forward-looking statements that involve risks and uncertainties that are subject to change at any time. Such statements are based on management's expectations at the time they are made. In addition to the assumptions and other factors referred to in connection with the statements, Factors described in WEC Energy Group's latest Form 10-K and subsequent reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those contemplated. During the discussions, referenced earnings per share will be based on diluted earnings per share unless otherwise noted. This call also will include non-GAAP financial information. The company has provided reconciliation to the most directly comparable gap measures in the materials posted on its website for this conference call. And now it is my pleasure to introduce Scott Lauber, President and Chief Executive Officer of WEC Energy Group.

Good afternoon, everyone, and thank you for joining us today as we review our results for calendar year 2024. Here with me are Sha Lu, our Chief Financial Officer, and Beth Straka, Senior Vice President of Corporate Communications and Investor Relations. As you saw from our news release this morning, we reported full-year 2024 adjusted earnings of $4.88 a share. I am pleased to report that we delivered another year of solid results on virtually every meaningful measure, from customer satisfaction to financial performance, to steady execution of our capital plan. In just a few minutes, Shaw will provide more details on our financial results and outlook. For 2025 earnings, recall that in early December, we provided our guidance in the range of $5.17 to $5.27 a share. We continue to target a 6.5% to 7% long-term compound annual growth rate. We have a robust capital plan driven by strong economic growth in our region. The Wisconsin unemployment rate stands at 3%, continuing a long running trend below the national average. And as we discussed, there have been many exciting developments along the I-94 corridor between Milwaukee and Chicago. In December, less than a year after Eli Lilly acquired a facility in Pleasant Prairie, The pharmaceutical company announced plans for a $3 billion expansion. Eli Lilly predicts the expansion will add 750 highly skilled jobs in addition to 2,000 construction jobs to complete the project. Microsoft is making good progress on its large data center complex in southeast Wisconsin. Work continues on the first phase of the project. Microsoft took a short pause on construction to evaluate the technical design of the second area. That pause was lifted and work has resumed. Microsoft is still reviewing designs for the third area. Microsoft reports that the potential design changes have not affected plans to invest $3.3 billion in the project by the end of 2026. And we do not anticipate these changes will impact our capital plan or demand growth projections over the next five years. In fact, Microsoft purchased an additional 240 acres of land just last week for another data center development. We're delighted that Microsoft continues to expand its commitment to the Milwaukee region. Also in January, Cloverleaf announced plans to develop approximately 1700 acres in Port Washington, just north of Milwaukee for another large data center campus. Cloverleaf projects that construction could start this fall. In the initial announcement, Cloverleaf expects the load to be one gigawatt. This development is in the very early stages, but all this load is incremental to our current plan. So we're off to a strong start to the year with great economic prospects. To serve a growing economy, of course, we need to continue investing in our generation facility and infrastructure. Our $28 billion five-year capital plan, which we update in October, is the largest in our history. A balanced generation mix is a significant focus for our electric utilities. In the renewable area, over the next five years, we have 4,300 megawatts planned for our expected investment of $9.1 billion. We wrapped up 2024 by bringing the Paris Solar Park into service with an investment of approximately $319 million. It has added 180 megawatts of solar capacity for our Wisconsin utility customers. Next up on our schedule, we expect the 225 megawatt Darien Solar Park to go into service later this year. Natural gas also continues to be a critical resource for reliable service. We expect the Wisconsin Commission to make rulings on several major project filings throughout the year. That includes 1,200 megawatts of efficient natural gas generation, as well as 33-mile lateral and two BCF of liquefied natural gas storage. Turning to our WEC infrastructure business, the Delilah One and Maple Flat solar project went online at the end of last year. Between those two facilities, we invested approximately $890 million for 90% ownership of 550 megawatts of capacity. And we expect to close on the hardened three projects during the first quarter. We plan to invest approximately $407 million for 90% ownership interest of the project, which has a total capacity of 250 megawatts. As a reminder, this project fulfills our five year plan investment at WEC infrastructure. Regarding transmission, as you saw in January, MISO announced capital investments on tranche 2.1. We expect ATC to be assigned approximately $2 billion of that tranche with an additional opportunity through the right of first refusal or competitive bid of up to $1.5 to $1.8 billion. As you know, we own 60% of ATC. Overall, we have a lot of confidence in our ability to execute on our capital plan and continue our growth trajectory. Now turning to the regulatory front, I am pleased to report that we currently have no planned or active rate cases. As you know, the Wisconsin Commission finalized their written orders for test year 2025 and 2026. Consistent with prior disclosures, the Commission maintained a 53% financial equity layer and a 9.8% return on equity for our Wisconsin utilities. In Illinois, we remain actively engaged in two proceedings of note. One of these is evaluating the future of natural gas in Illinois. Currently, it's scheduled to extend into 2026. The other, a review of our safety modernization program, is close to its conclusion. We made our final oral arguments before the Commerce Commission last week and expect a decision this quarter. Next up, I'll provide you more details on our financials.

Thanks, Scott. Turning now to earnings, our 2024 adjusted earnings were $4.88 per share, an increase of 25 cents per share over 2023 adjusted earnings. In 2024, we experienced the warmest winter on record. The estimated weather headwind was 25 cents per share when compared to normal conditions. We were able to offset this by implementing a variety of initiatives, such as O&M and fuel management, as well as tax and financing activities. This focus on execution was key for delivering our adjusted EPS near the top end of the earnings guidance. Now let's take a closer look at our year over year variances. Our earnings package includes a comparison of adjusted full year results on page 17. I'll walk through the significant drivers. Starting with our utility operation, weather decreased earnings year over year by an estimated $0.05 per share. This weather impact Along with a total of $0.38 negative impact related to increases in depreciation and amortization, day-to-day O&M, and interest expense were more than offset by $0.49 of total positive variances from rate-based growth, fuel, tax, and other. All in all, the utility operations grew $0.06 year over year. Now, before I discuss earnings comparison at the other segments, let me briefly comment on O&M and sales. Remember that originally we guided 2024 total company day-to-day O&M to be 6% to 7% higher compared to 2023, largely driven by assets that were placed in service and normal inflation. As you recall, Several of the assets in WEC infrastructure had a delayed in-service until the end of the year. This, in combination with initiatives we took after the mild first quarter, helped us achieve an overall increase of 2% over 2023. That is considerably lower than the original guidance. Regarding our weather normal sales for 2024, As you can see on pages 13 and 14 in our earnings package, both retail electric and natural gas deliveries in Wisconsin were relatively flat year over year. For 2025, we're projecting whether normal retail electric sales in Wisconsin, excluding the iron ore mine, to grow 0.7% and retail gas sales in Wisconsin, excluding power generation, to grow 1.9% from the 2024 level. Now, back to our earnings comparison. Regarding our investment in American Transmission Company, earnings increased 7 cents compared to 2023. We recognized 5 cents in Q4 from the FERC order that resolved certain MISO ROE complaints and set the ROE at 10.48%. The remaining $0.02 improvement in ATC earnings was driven by continued capital investment. Earnings at our energy infrastructure segment grew $0.13 in 2024 compared to 2023. $0.03 were driven by additional investment in our Power the Future plans, and the remaining $0.10 relate to WEC infrastructure. Finally, you'll see that earnings at our corporate and other segments decreased one penny. Higher interest expense was substantially offset by tax and other items. Overall, we improved our performance by 25 cents per share on an adjusted basis in 2024. Next, let's look at our earnings guidance. For the first quarter this year, we project to earn in the range of $2.13 per share to $2.23 per share. This forecast takes into account January weather and assumes normal weather for the rest of the quarter. Remember, last year we earned $1.97 per share in the first quarter. And as Scott stated, for the full year 2025, we are reaffirming our annual guidance of $5.17 to $5.27 per share. Finally, some comments on financing. In 2024, we successfully executed over $4.5 billion of external funding, including almost $200 million of common equity. In 2025, consistent with previous disclosures, we expect to issue $700 to $800 million of common equity via our ATM program, as well as the dividend reinvestment and employee benefit plans. Including this, as a reminder, total common equity financing over the next five years is still expected to be between $2.7 and $3.2 billion. Going forward, to support the region's strong economic growth, and our capital investment, we continue to expect any incremental capital will be funded with 50% equity content. Overall, we are confident in our long-term EPS growth paper of 6.5% to 7%. With that, I'll turn it back to Scott.