WEC Energy : First Quarter 2024 MERC

MINNESOTA ENERGY RESOURCES CORPORATION

(An Indirect Wholly Owned Subsidiary of WEC Energy Group, Inc.)

FINANCIAL STATEMENTS

For the Quarter Ended March 31, 2024

MINNESOTA ENERGY RESOURCES CORPORATION

CONDENSED INCOME STATEMENTS (Unaudited)		Three Months Ended
			March 31
(in millions)		2024			2023
Operating revenues		$	118.6		$	172.3
Operating expenses
Cost of sales		60.6			114.6
Other operation and maintenance		14.1			16.9
Depreciation and amortization		6.3			5.8
Property and revenue taxes		4.1			5.3
Total operating expenses			85.1			142.6
Operating income		33.5			29.7
Interest expense			1.9			2.2
Income before income taxes		31.6			27.5
Income tax expense		8.6			7.5
Net income		$	23.0		$	20.0

MINNESOTA ENERGY RESOURCES CORPORATION

CONDENSED BALANCE SHEETS (Unaudited)			March 31			December 31
(in millions, except share amounts)			2024			2023
Assets
Current assets
Cash and cash equivalents	$	1.0	$	-
Accounts receivable and unbilled revenues, net of reserves of $2.0 and $3.6, respectively			54.7			56.9
Accounts receivable from related parties			1.4			2.4
Materials, supplies, and inventories:
Natural gas in storage			13.4			18.8
Materials and supplies			0.3			0.3
Prepayments			1.2			3.2
Other			1.3			3.9
Current assets			73.3			85.5
Long-term assets
Property, plant, and equipment, net of accumulated depreciation and amortization of $219.5 and
$215.9, respectively			665.5			668.2
Regulatory assets			24.6			25.9
Goodwill			127.7			127.7
Other			20.0			19.3
Long-term assets			837.8			841.1
Total assets		$	911.1		$	926.6
Liabilities and Equity
Current liabilities
Short-term debt to parent	$	4.7	$	20.2
Accounts payable			19.8			33.2
Accounts payable to related parties			3.9			6.0
Accrued taxes			19.8			13.2
Customer credit balances			14.1			22.7
Customer assistance programs			6.0			6.1
Amounts refundable to customers			18.6			12.7
Other			4.9			12.0
Current liabilities			91.8			126.1
Long-term liabilities
Long-term debt			209.2			209.2
Deferred income taxes			138.6			134.1
Regulatory liabilities			115.0			113.8
Other			4.8			4.7
Long-term liabilities			467.6			461.8
Commitments and contingencies
Common shareholder's equity
Common stock - without par value, 1,000 shares authorized; 100 shares issued and outstanding			209.1			209.1
Retained earnings			142.6			129.6
Common shareholder's equity			351.7			338.7
Total liabilities and equity		$	911.1		$	926.6

MINNESOTA ENERGY RESOURCES CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)		Three Months Ended
			March 31
(in millions)		2024			2023
Operating activities
Net income	$	23.0	$	20.0
Reconciliation to cash provided by operating activities
Depreciation and amortization		6.3			5.8
Deferred income taxes, net		3.6			(2.8)
Change in -
Accounts receivable and unbilled revenues, net		3.2			17.9
Materials, supplies, and inventories		5.4			19.0
Other current assets		3.0			5.3
Accounts payable		(13.0)			(31.0)
Accrued taxes		6.6			13.2
Amounts refundable to customers		5.9			(5.1)
Other current liabilities		(10.6)			(7.7)
Recovery of extraordinary natural gas costs		-			13.8
Other, net		(1.8)			8.1
Net cash provided by operating activities			31.6			56.5
Investing activities
Capital expenditures		(5.1)			(5.2)
Financing activities
Short-term debt to parent, net		(15.5)			(16.6)
Payment of dividends to parent		(10.0)			(34.0)
Net cash used in financing activities			(25.5)			(50.6)
Net change in cash and cash equivalents		1.0			0.7
Cash and cash equivalents at beginning of period		-			-
Cash and cash equivalents at end of period		$	1.0		$	0.7
Supplemental cash flow information
Cash paid for interest	$	2.4	$	2.7
Cash paid for income taxes, net			0.9			1.2