Item 16. FORM 10-K SUMMARY

None.

2019 Form 10-K	143	WEC Energy Group, Inc.

Table of Contents

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.

2019 Form 10-K	144	WEC Energy Group, Inc.

Table of Contents

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.

2019 Form 10-K	145	WEC Energy Group, Inc.

Table of Contents

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.

2019 Form 10-K	146	WEC Energy Group, Inc.

Table of Contents

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.

2019 Form 10-K	147	WEC Energy Group, Inc.

Table of Contents

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.

2019 Form 10-K	148	WEC Energy Group, Inc.

Table of Contents

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

2019 Form 10-K	149	WEC Energy Group, Inc.

Table of Contents

SCHEDULE II

WEC ENERGY GROUP, INC.

VALUATION AND QUALIFYING ACCOUNTS

Allowance for Doubtful Accounts (in millions)		Balance at Beginning of Period				Expense (1)				Deferral				Net Write-offs (2)				Balance at End of Period
December 31, 2019		$	149.2			$	85.8			$	11.4			$	(106.4	)		$	140.0
December 31, 2018		143.2				94.7				(5.5		)		(83.2		)		149.2
December 31, 2017		108.0				96.7				16.4				(77.9		)		143.2

(1)	Net of recoveries.

(2)	Represents amounts written off to the reserve, net of adjustments to regulatory assets.

2019 Form 10-K	150	WEC Energy Group, Inc.

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		WEC ENERGY GROUP, INC.
	By	/s/ J. KEVIN FLETCHER
Date:	February 27, 2020	J. Kevin Fletcher
		President and Chief Executive Officer

2019 Form 10-K	151	WEC Energy Group, Inc.

Table of Contents

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ J. KEVIN FLETCHER		February 27, 2020
J. Kevin Fletcher, President and Chief Executive Officer, and Director --
Principal Executive Officer
/s/ SCOTT J. LAUBER		February 27, 2020
Scott J. Lauber, Senior Executive Vice President and Chief Financial Officer --
Principal Financial Officer
/s/ WILLIAM J. GUC		February 27, 2020
William J. Guc, Vice President and Controller --
Principal Accounting Officer
/s/ GALE E. KLAPPA		February 27, 2020
Gale E. Klappa, Executive Chairman and Director
/s/ BARBARA L. BOWLES		February 27, 2020
Barbara L. Bowles, Director
/s/ ALBERT J. BUDNEY, JR.		February 27, 2020
Albert J. Budney, Jr., Director
/s/ PATRICIA W. CHADWICK		February 27, 2020
Patricia W. Chadwick, Director
/s/ CURT S. CULVER		February 27, 2020
Curt S. Culver, Director
/s/ DANNY L. CUNNINGHAM		February 27, 2020
Danny L. Cunningham, Director
/s/ WILLIAM M. FARROW, III		February 27, 2020
William M. Farrow, III, Director
/s/ THOMAS J. FISCHER		February 27, 2020
Thomas J. Fischer, Director
/s/ MARIA C. GREEN		February 27, 2020
Maria C. Green, Director
/s/ HENRY W. KNUEPPEL		February 27, 2020
Henry W. Knueppel, Director
/s/ THOMAS K. LANE		February 27, 2020
Thomas K. Lane, Director
/s/ ULICE PAYNE, JR.		February 27, 2020
Ulice Payne, Jr., Director
/s/ MARY ELLEN STANEK		February 27, 2020
Mary Ellen Stanek, Director

2019 Form 10-K	152	WEC Energy Group, Inc.