Integrys Energy Group, Inc. Reports Fourth Quarter 2014 Earnings

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March 02, 2015

Integrys Energy Group, Inc. Reports Fourth Quarter 2014 Earnings

 

 

Chicago, IL – February 25, 2015 – Integrys Energy Group, Inc. (NYSE: TEG) recognized earnings on a Generally Accepted Accounting Principles (GAAP) basis and an adjusted basis as follows:

 

  Three Months Ended
December 31
Year Ended
December 31
  2014 2013 2014 2013
GAAP earnings (millions) $34.0 $131.6 $276.9 $351.8
GAAP diluted earnings per share $0.42 $1.63 $3.43 $4.39
Adjusted earnings (millions) * $66.2 $73.4 $241.1 $264.5
Diluted earnings per share – adjusted * $0.82 $0.91 $2.99 $3.30

 

* This news release includes non-GAAP financial measures. Schedules that provide details on these measures and reconcile these measures to the most comparable GAAP figures are included with this news release.

 

Adjusted earnings exclude the effects of certain items that are not comparable from one period to the next.

 

Fourth Quarter Results

 

Earnings decreased significantly on a GAAP basis from the fourth quarter of 2013 to the fourth quarter of 2014, but approximately 94% of the decrease resulted from the operations of the retail energy business of Integrys Energy Services, Inc. and other impacts related to its sale in November 2014. The results of the operations of this business are shown in discontinued operations for all periods presented, including the impacts of derivative accounting adjustments and a loss on the sale of approximately $17 million after tax.

 

Adjusted earnings for the fourth quarter decreased $7.2 million from 2013 to 2014, driven by lower earnings at the natural gas utility segment, mainly due to higher permitting and paving costs at The Peoples Gas Light and Coke Company. Lower earnings at the electric transmission investment segment also contributed to the overall decrease in adjusted earnings. Equity earnings from American Transmission Company LLC decreased due to an anticipated refund to customers related to a complaint filed with the Federal Energy Regulatory Commission requesting a lower return on equity for certain transmission owners.

 

Supplemental Data Package

 

A supplemental data package has been posted on Integrys Energy Group's website. It includes this news release, as well as financial statements, non-GAAP financial information, and quarterly financial information by reportable segment. The supplemental data package can be found at http://www.integrysgroup.com/investor/presentations.aspx.

 

Forward-Looking Statements

 

Financial results in this news release are unaudited. In this news release, Integrys Energy Group makes statements concerning its expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. These statements are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future results and conditions. Although Integrys Energy Group believes that these forward-looking statements and the underlying assumptions are reasonable, it cannot provide assurance that such statements will prove correct.

 

Forward-looking statements involve a number of risks and uncertainties. Some risks and uncertainties that could cause actual results to differ materially from those expressed or implied in forward-looking statements include those described in Item 1A of Integrys Energy Group's Annual Report on Form 10-K for the year ended December 31, 2014, and those identified below:

 

  • The timing and resolution of rate cases and related negotiations, including recovery of deferred and current costs and the ability to earn a reasonable return on investment, and other regulatory decisions impacting the regulated businesses;
  • Federal and state legislative and regulatory changes, including deregulation and restructuring of the electric and natural gas utility industries, financial reform, health care reform, energy efficiency mandates, reliability standards, pipeline integrity and safety standards, and changes in tax and other laws and regulations to which Integrys Energy Group and its subsidiaries are subject;
  • The possibility that the proposed merger with Wisconsin Energy Corporation does not close (including, but not limited to, due to the failure to satisfy the closing conditions), disruption from the proposed merger making it more difficult to maintain Integrys Energy Group's business and operational relationships, and the risk that unexpected costs will be incurred during this process;
  • The risk of terrorism or cyber security attacks, including the associated costs to protect assets and respond to such events;
  • The risk of failure to maintain the security of personally identifiable information, including the associated costs to notify affected persons and to mitigate their information security concerns;
  • The timely completion of capital projects within estimates, as well as the recovery of those costs through established mechanisms;
  • Unusual weather and other natural phenomena, including related economic, operational, and/or other ancillary effects of any such events;
  • The impact of unplanned facility outages;
  • The risks associated with changing commodity prices, particularly natural gas and electricity, and the available sources of fuel, natural gas, and purchased power, including their impact on margins, working capital, and liquidity requirements;
  • The effects of political developments, as well as changes in economic conditions and the related impact on customer energy use, customer growth, and the ability to adequately forecast energy use for Integrys Energy Group's customers;
  • Federal and state legislative and regulatory changes relating to the environment, including climate change and other environmental regulations impacting generation facilities and renewable energy standards;
  • Costs and effects of litigation and administrative proceedings, settlements, investigations, and claims;
  • Changes in credit ratings and interest rates caused by volatility in the financial markets and actions of rating agencies and their impact on Integrys Energy Group's and its subsidiaries' liquidity and financing efforts;
  • The ability to retain market-based rate authority;
  • The effects, extent, and timing of competition or additional regulation in the markets in which Integrys Energy Group's subsidiaries operate;
  • The risk of financial loss, including increases in bad debt expense, associated with the inability of Integrys Energy Group's and its subsidiaries' counterparties, affiliates, and customers to meet their obligations;
  • The ability to use tax credit, net operating loss, and/or charitable contribution carryforwards;
  • The investment performance of employee benefit plan assets and related actuarial assumptions, which impact future funding requirements;
  • The risk associated with the value of goodwill or other intangible assets and their possible impairment;
  • Potential business strategies, including acquisitions or dispositions of assets or business, which cannot be assured to be completed timely or within budgets;
  • Changes in technology, particularly with respect to new, developing, or alternative sources of generation;
  • The financial performance of American Transmission Company and its corresponding contribution to Integrys Energy Group's earnings;
  • The timing and outcome of any audits, disputes, and other proceedings related to taxes;
  • The effectiveness of risk management strategies, the use of financial and derivative instruments, and the related recovery of these costs from customers in rates;
  • The effect of accounting pronouncements issued periodically by standard-setting bodies; and
  • Other factors discussed in reports Integrys Energy Group files with the United States Securities and Exchange Commission.

 

Except to the extent required by the federal securities laws, Integrys Energy Group undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

 

About Integrys Energy Group, Inc.

 

Integrys Energy Group is an energy holding company with regulated natural gas and electric utility operations (serving customers in Illinois, Michigan, Minnesota, and Wisconsin), an approximate 34% equity ownership interest in American Transmission Company (a federally regulated electric transmission company), and nonregulated energy operations.

 

More information is available at www.integrysgroup.com.

 

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Additional Attachment

 

 

For More Information, Contact:

Steven P. Eschbach, CFA
Vice President - Investor Relations
Integrys Energy Group, Inc.
(312) 228-5408