WEC Energy : Third Quarter 2023 NSG

NORTH SHORE GAS COMPANY

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

FINANCIAL STATEMENTS

For the Quarter Ended September 30, 2023

NORTH SHORE GAS COMPANY

CONDENSED INCOME STATEMENTS (Unaudited)	Three Months Ended				Nine Months Ended
			September 30				September 30
(in millions)	2023		2022				2023			2022
Operating revenues		$	27.1		$	25.4		$	143.1		$	190.3
Operating expenses
Cost of natural gas		9.5			6.6			66.1			110.4
Other operation and maintenance		8.5			10.9			32.9			38.5
Depreciation and amortization		5.1			5.0			15.3			15.2
Property and revenue taxes		0.8			2.4			2.8			4.6
Total operating expenses			23.9			24.9			117.1			168.7
Operating income		3.2			0.5			26.0			21.6
Other income, net		0.3			0.5			0.9			1.7
Interest expense		2.0			1.5			5.9			4.6
Other expense			(1.7)			(1.0)			(5.0)			(2.9)
Income (loss) before income taxes		1.5			(0.5)			21.0			18.7
Income tax expense (benefit)		0.4			(0.1)			5.6			5.0
Net income (loss)		$	1.1		$	(0.4)		$	15.4		$	13.7

NORTH SHORE GAS COMPANY

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 $1.7 and $2.9, respectively	$	19.3	$	58.4
Accounts receivable from related parties			2.1			2.1
Materials, supplies, and inventories			31.4			17.1
Prepayments			0.9			1.8
Amounts recoverable from customers			3.8			3.2
Collateral on deposit			7.4			6.3
Other			0.3			2.8
Current assets			65.2			91.7
Long-term assets
Property, plant, and equipment, net of accumulated depreciation and amortization of $264.2 and
$259.6, respectively			543.9			532.7
Regulatory assets			54.3			54.1
Other postretirement employee benefit assets			13.0			12.6
Other			2.0			2.3
Long-term assets			613.2			601.7
Total assets		$	678.4		$	693.4
Liabilities and Shareholder's Equity
Current liabilities
Accounts payable	$	18.2	$	39.7
Accounts payable to related parties			4.4			5.9
Notes payable to related party			38.8			46.4
Accrued taxes			1.5			4.2
Customer credit balances			11.9			11.3
Derivative liabilities			5.5			4.5
Other			10.3			10.0
Current liabilities			90.6			122.0
Long-term liabilities
Long-term debt			156.2			156.1
Deferred income taxes			72.9			69.7
Regulatory liabilities			71.3			71.9
Environmental remediation liabilities			31.5			33.0
Pension obligations			11.2			10.3
Asset retirement obligations			28.9			28.2
Other			6.8			7.6
Long-term liabilities			378.8			376.8
Commitments and contingencies
Shareholder's equity
Common stock, without par value, 5,000,000 shares authorized; 3,625,887 shares issued and
outstanding			95.0			85.0
Retained earnings			114.0			109.6
Shareholder's equity			209.0			194.6
Total liabilities and shareholder's equity		$	678.4		$	693.4

NORTH SHORE GAS COMPANY

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)		Nine Months Ended
			September 30
(in millions)		2023			2022
Operating activities
Net income	$	15.4	$	13.7
Reconciliation to cash provided by operating activities
Depreciation and amortization		15.3			15.2
Deferred income taxes and investment tax credits, net		2.3			(1.0)
Settlement of asset retirement obligations		(0.3)			(0.4)
Manufactured gas plant remediation costs		(1.6)			(3.7)
Change in -
Accounts receivable and unbilled revenues, net		39.1			20.0
Materials, supplies, and inventories		(14.3)			-
Amounts recoverable from customers		(0.6)			2.2
Prepayments		0.9			(0.2)
Collateral on deposit		(1.1)			-
Accounts payable		(19.2)			(2.4)
Accrued taxes		(2.7)			(3.4)
Customer credit balances		0.6			2.6
Other current liabilities		0.3			0.1
Other, net		0.5			11.4
Net cash provided by operating activities			34.6			54.1
Investing activities
Capital expenditures		(26.2)			(20.8)
Other, net		0.2			-
Net cash used in investing activities			(26.0)			(20.8)
Financing activities
Notes payable to related party, net		(7.6)			(16.7)
Equity contribution from parent		10.0			25.0
Payment of dividends to parent		(11.0)			(42.0)
Net cash used in financing activities			(8.6)			(33.7)
Net change in cash and cash equivalents		-			(0.4)
Cash and cash equivalents at beginning of period		-			0.4
Cash and cash equivalents at end of period		$	-		$	-
Supplemental cash flow information
Cash paid for interest	$	4.2	$	3.0
Cash paid for income taxes, net		$	3.4		$	8.6