Wisconsin Energy Corporation (
Q2 2011 Earnings Call
July 28, 2011 2:00 PM ET
Gale Klappa – Chairman, President and CEO
Frederick Kuester – EVP and CFO
Steve Dickson – VP and Controller
Allen Leverett – EVP; President and CEO, We Generation
Paul Ridzon – KeyBanc
Brian Russo – Ladenburg Thalmann
Michael Lapides – Goldman Sachs
Paul Patterson – Glenrock Associates
Andrew Levi – Caris & Company
Dan Jenkins – State of Wisconsin Conference
Tim Winter – Gabelli & Company
Andy Levi – Caris & Company
Previous Statements by WEC
» Wisconsin Energy CEO Discusses Q1 2011 Results - Earnings Call Transcript
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» Wisconsin Energy Corporation Q1 2010 Earnings Call Transcript
Good afternoon, ladies and gentlemen. Thank you for waiting, and welcome Wisconsin Energy’s Quarterly Conference Call. This conference is being recorded for rebroadcast and all participants are in a listen-only mode at this time.
Before the conference call begins, I will read the forward-looking language. All statements in this presentation, other than historical facts, are forward-looking statements that involve risks and uncertainties, which are subject to change at any time. Such statements are made 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 the company’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.
After the presentation, the conference will be open to analysts for questions and answers. In conjunction with this call, Wisconsin Energy has posted on its website a package of detailed financial information at www.wisconsinenergy.com. A replay of our remarks will be available approximately two hours after the conclusion of this call.
And now, I would like to introduce Mr. Gale Klappa, Chairman of the Board, President and Chief Executive Officer of Wisconsin Energy Corporation.
Colleen, thank you. Good afternoon, everyone and thank you for joining us as we review the company’s 2011 second quarter results. Let me begin as always by introducing the members of the Wisconsin Energy Management team who are here with me today.
We have Allen Leverett, President and CEO of We generation; Rick Kuester, our Chief Financial Officer; Jim Fleming, our generous General Counsel; Pat Keyes, our Treasurer; and Steve Dickson, our Controller.
Rick will review our financial results in detail in just a moment, but as you saw from our news release this morning, we reported earnings from continuing operations of $0.41 a share for the second quarter of 2011. This compares with $0.37 a share for the comparable period last year.
Our second quarter 2011 were driven by earnings from our $668 million investment in the second expansion unit at expansion unit at Oak Creek, which as you know came on line in January this year. Overall, we are quite pleased with our second quarter and our year-to-date performance.
Now I would like to focus for a few minutes on the economy across our service area. After nearly double-digit rebound in 2010, electric sales to our large commercial and industrial customers rose by a little more than 1% in the first half of the 2011.
When we take a look a little deeper inside the numbers, we see that the demand destruction from five large plant closings during the great recession is now being largely offset by modest growth and recovery in other sectors of the region’s economy. For example, we are seeing strength in iron ore mining, specialty steel production and in the paper and printing industries. And from talking with our largest customers, we are cautiously optimistic that the recovery will continue throughout the remainder of the year.
Now, when we look at our residential customers, we see flat sales for the first half of this year compared to the first six months of 2010. As you know, however, the Midwest was in the grip of old-fashioned heat wave and residential and commercial dimension was strong. In fact the peak demand on our system rose to within 2.5% of our all-time record one-hour demand.
One other point about recent heat wave, I’m pleased to report that our for new power the future units, the two natural-gas fired units at Port Washington and the two coal-fire units at Oak Creek performed very well. Before units were online the throughout the hot spell, they were war course units. Helping to meet customer needs in a very cost-effective manner. As a result, there were no runouts, no blankouts, no threats of curtailment and no long calls to interrupt our industrial customers.
The experience reaffirms our decision to complete our Power the Future plan, investing in critical energy infrastructure to ensure the liability from Wisconsin and the upper peninsula of Michigan. And now I would like to update you on the three significant construction projects that we have underway. The 50 Megawatt biomass plant in northern Wisconsin, the glazier hills wind park, north-east of Madison and the air quality control upgrade of original Oak Creek units.
As a mention on previous call, 50 megawatt cogeneration plant to be fueled with biomass at a paper mill site in Northern Wisconsin, which is owned by Domtar Corporation was proposed by our company really know almost 2 years ago generation plan will help us to diversify our renewable energy portfolio. We will have the ability, as you know, to dispatch the unit and the efficient technology will clearly benefit the existing paper mill.