WEC Energy : Third Quarter 2023 MGU

MICHIGAN GAS UTILITIES CORPORATION

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

FINANCIAL STATEMENTS

For the Quarter Ended September 30, 2023

MICHIGAN GAS UTILITIES CORPORATION

CONDENSED INCOME STATEMENTS (Unaudited)	Three Months Ended				Nine Months Ended
			September 30				September 30
(in millions)	2023			2022				2023			2022
Operating revenues		$	18.2		$	24.8		$	126.3		$	145.9
Operating expenses
Cost of natural gas sold		4.8			11.2			61.7			80.3
Other operation and maintenance		8.6			8.3			25.5			23.9
Depreciation and amortization		4.9			4.7			14.0			13.8
Property and revenue taxes		2.2			3.4			6.2			7.3
Total operating expenses			20.5			27.6			107.4			125.3
Operating income (loss)		(2.3)			(2.8)			18.9			20.6
Other income, net		0.1			0.4			0.3			1.1
Interest expense		1.9			1.6			6.1			4.6
Other expense			(1.8)			(1.2)			(5.8)			(3.5)
Income (loss) before income taxes		(4.1)			(4.0)			13.1			17.1
Income tax expense (benefit)		(0.9)			(0.9)			2.9			3.8
Net income (loss)		$	(3.2)		$	(3.1)		$	10.2		$	13.3

MICHIGAN GAS UTILITIES CORPORATION

CONDENSED BALANCE SHEETS (Unaudited)			September 30			December 31
(in millions, except share amounts)			2023			2022
Assets
Current assets
Accounts receivable and unbilled revenues, net of reserves of $2.1 and $2.8, respectively			18.3			56.5
Accounts receivable from related parties			1.7			2.3
Materials, supplies, and inventories:
Natural gas in storage			28.2			31.7
Materials and supplies			2.0			1.7
Deferred property taxes			2.1			8.3
Prepayments			1.8			0.7
Amounts recoverable from customers			2.7			10.8
Other			3.8			4.3
Current assets			60.6			116.3
Long-term assets
Property, plant, and equipment, net of accumulated depreciation and amortization of $210.5 and
$212.3, respectively			436.3			415.1
Regulatory assets			37.9			41.9
Goodwill			34.5			34.5
Pension and OPEB assets			22.8			21.3
Other			6.1			6.7
Long-term assets			537.6			519.5
Total assets		$	598.2		$	635.8
Liabilities and Equity
Current liabilities
Short-term debt to parent	$	33.1	$	56.0
Accounts payable			10.9			35.0
Accounts payable to related parties			3.4			4.6
Accrued taxes			4.5			9.4
Customer credit balances			12.5			7.8
Other			5.3			6.4
Current liabilities			69.7			119.2
Long-term liabilities
Long-term debt			149.4			149.3
Deferred income taxes			69.2			68.8
Regulatory liabilities			77.9			74.5
Environmental remediation liabilities			14.3			14.6
Other			3.2			3.2
Long-term liabilities			314.0			310.4
Commitments and contingencies
Common shareholder's equity
Common stock - without par value, 100 shares authorized; 100 shares issued and outstanding			181.7			166.7
Retained earnings			32.8			39.5
Common shareholder's equity			214.5			206.2
Total liabilities and equity		$	598.2		$	635.8

MICHIGAN GAS UTILITIES CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)		Nine Months Ended
			September 30
(in millions)		2023			2022
Operating activities
Net income	$	10.2	$	13.3
Reconciliation to cash provided by operating activities
Depreciation and amortization		14.0			13.8
Deferred income taxes and ITC's, net		(0.4)			5.7
Change in -
Accounts receivable and unbilled revenues, net		38.8			8.2
Materials, supplies, and inventories		3.2			(23.9)
Amounts recoverable from customers		8.1			(4.7)
Deferred property taxes		6.2			5.6
Prepaid taxes		(1.8)			(3.2)
Other current assets		1.5			0.6
Accounts payable		(24.9)			(6.6)
Accrued taxes		(4.9)			(5.6)
Customer credit balances		4.7			2.3
Other current liabilities		(0.4)			(0.6)
Other, net		2.2			-
Net cash provided by operating activities			56.5			4.9
Investing activities
Capital expenditures		(31.5)			(34.8)
Other, net		(0.1)			(0.1)
Net cash used in investing activities			(31.6)			(34.9)
Financing activities
Short-term debt to parent, net		(22.9)			25.4
Payment of dividends to parent		(17.0)			-
Equity contribution from parent		15.0			4.0
Net cash provided by (used in) financing activities			(24.9)			29.4
Net change in cash and cash equivalents		-			(0.6)
Cash and cash equivalents at beginning of period		-			0.6
Cash and cash equivalents at end of period		$	-		$	-
Supplemental cash flow information
Cash paid for interest, net of amount capitalized	$	5.6	$	3.9
Cash paid for income taxes, net			6.0			3.4