Overview of the Company’s Financial Performance

WEC Energy Group, Inc. is a diversified holding company with natural gas and electric utility operations serving customers in Wisconsin, Illinois, Michigan, and Minnesota. The company also has an approximately 60% equity ownership interest in American Transmission Company (ATC), a for-profit electric transmission company, and non-utility energy infrastructure operations.

For the nine months ended September 30, 2025, WEC Energy Group reported net income attributed to common shareholders of $1,240.9 million, or $3.85 per share, compared to $1,073.7 million, or $3.40 per share, for the same period in 2024. This represents a $167.2 million, or $0.45 per share, increase in earnings.

The significant drivers of the increase in earnings were:

Wisconsin Segment

• $187.3 million increase in net income, driven by higher margins from the impact of new Wisconsin rate orders, higher retail sales volumes, and increased income tax benefits. These were partially offset by higher operating expenses.

Electric Transmission Segment

• $16.6 million increase in net income, driven by continued capital investment by ATC and a gain on the sale of an investment.

These increases were partially offset by a $50.9 million increase in the net loss at the corporate and other segment, driven by higher interest expense and losses from equity method investments.

Revenue and Profit Trends

The Wisconsin segment, which accounts for the majority of the company’s earnings, saw a 29.4% increase in net income during the first nine months of 2025 compared to the same period in 2024. This was driven by:

• A $394.8 million (12.4%) increase in utility margin, primarily due to the impact of new Wisconsin rate orders and higher retail sales volumes from colder weather.
• A $64.2 million (9.4%) increase in depreciation and amortization expense, $31.8 million (7.8%) increase in transmission expense, and $20.4 million (7.2%) increase in other power plant operating costs.
• A $39.0 million (38.5%) decrease in other income, driven by higher pension and OPEB costs.

The Illinois segment saw a 3.4% increase in net income, driven by the positive impact of a $25.3 million charge recorded in 2024 related to a regulatory disallowance. Operating expenses increased $12.1 million, net of rider revenue impacts, primarily due to higher benefits costs and maintenance at the Manlove Gas Storage Field.

The other states segment, which includes Minnesota and Michigan, reported a 6.2% increase in net income, driven by rate increases and higher retail sales volumes, partially offset by higher operating expenses.

The non-utility energy infrastructure segment saw a 2.3% increase in net income, as higher operating income from new renewable projects was partially offset by impairment losses, higher maintenance costs, and lower performance payments.

Analysis of Strengths and Weaknesses

Strengths:

• Diversified utility and non-utility operations provide stability and growth opportunities
• Continued investment in renewable energy and grid modernization to support sustainability goals
• Strong regulatory relationships and track record of constructive rate outcomes
• Healthy balance sheet and cash flow to fund capital plan

Weaknesses:

• Exposure to rising interest rates and potential for higher financing costs
• Regulatory uncertainty around recovery of certain infrastructure investments
• Reliance on natural gas generation and potential future carbon regulations
• Vulnerability to weather fluctuations, particularly in heating-dominated service territories

WEC Energy Group’s diversified business model, with regulated utility operations accounting for the majority of earnings, is a key strength. The company’s focus on renewable energy investment, grid modernization, and operational efficiency supports its long-term sustainability goals.

However, the company faces some risks, including potential higher financing costs due to rising interest rates and regulatory uncertainty around the recovery of certain infrastructure investments, particularly in Illinois. The continued reliance on natural gas generation also exposes the company to potential future carbon regulations. Weather sensitivity, especially in the heating-dominated Midwest service territories, is another potential weakness.

Outlook and Future Prospects

Looking ahead, WEC Energy Group expects to maintain its focus on executing its $36.5 billion capital investment plan from 2026 to 2030. Key elements of this plan include:

• $11.6 billion in regulated renewable energy projects in Wisconsin, including 3,700 MW of utility-scale solar, 1,780 MW of battery storage, and 555 MW of wind power.
• $2.2 billion in battery energy storage systems to enhance grid reliability.
• $4.7 billion in electric and natural gas distribution system upgrades to improve reliability.
• Continued investment in natural gas-fired generation, including 3,300 MW of combustion turbines and 180 MW of reciprocating internal combustion engine units.

The company also plans to retire approximately 900 MW of coal-fired generation by the end of 2031, as part of its goal to achieve net carbon neutral electric generation by 2050. This transition to a cleaner generation mix, combined with investments in renewable energy and grid modernization, positions WEC Energy Group to meet evolving customer and regulatory demands around sustainability and reliability.

In the near-term, the company has temporarily adjusted its CO2 emission reduction goals due to tightened energy supply requirements in the Midwest. However, the long-term 2050 net carbon neutral target remains in place. WEC Energy Group is also focused on reducing methane emissions from its natural gas distribution system through initiatives like renewable natural gas (RNG) integration.

Overall, WEC Energy Group’s strategic capital plan, regulatory relationships, and financial discipline provide a solid foundation for continued growth and value creation for shareholders. The company’s diversified operations, commitment to sustainability, and focus on operational excellence position it well to navigate the evolving energy landscape.

Tables

Cash Paid for Interest and Income Taxes ,,,,,,Nine Months Ended September 30,,,,,, (in millions),,,,,,2025,,,,,,2024,,,,,, Cash paid for interest net of amount capitalized,,,,,,$,555.4,,,,,$,533.1,,,,, Cash received for income taxes net,,,,,,( 220.0 ),,,(1),,,( 214.6 ),,,(2),,,

(1) Cash received for income taxes includes $195.0 million related to 2025 and 2024 PTCs that were sold to third parties and a $25.0 million tax refund received in Wisconsin. (2) Cash received for income taxes includes $217.1 million related to 2024 and 2023 PTCs that were sold to third parties.

Cash, Cash Equivalents, and Restricted Cash (in millions),,,,,,September 30 2025,,,,,,December 31 2024,,, Cash and cash equivalents,,,,,,$,51.1,,,,,$,9.8,, Restricted cash included in other current assets,,,,,,32.4,,,,,,5.3,,, Restricted cash included in other long-term assets,,,,,,34.2,,,,,,27.1,,, Cash cash equivalents and restricted cash,,,,,,$,117.7,,,,,$,42.2,,

The company’s restricted cash primarily consists of funds held in trust for deferred compensation plans, debt agreements, and future decommissioning of renewable generation projects.

Regulatory Environment

The report discusses several key regulatory developments:

Wisconsin Electric Power Company (WE)

• WE filed proposals for a Very Large Customer (VLC) Tariff and a Bespoke Resources Tariff to serve large customers. These tariffs are designed to ensure VLC costs are not subsidized by other customers.

The Peoples Gas Light and Coke Company (PGL) and North Shore Gas Company (NSG)

• PGL received a $304.6 million (43.5%) base rate increase, while NSG received an $11.0 million (11.6%) increase. The ICC also disallowed $236.2 million of PGL’s capital costs.
• PGL was ordered to pause certain infrastructure upgrade projects pending a review of optimal replacement methods.
• PGL and NSG have open reconciliations for their Qualifying Infrastructure Plant (QIP) rider from 2017-2023, which could result in further disallowances.

Upper Michigan Energy Resources Corporation (UMERC)

• UMERC filed an Amended Renewable Energy Plan to address renewable portfolio standards and recover compliance costs.

The regulatory landscape presents both opportunities and challenges for WEC Energy Group. Constructive rate outcomes in Wisconsin have supported the company’s financial performance. However, the regulatory uncertainty and potential disallowances in Illinois pose risks that could impact future results.

New Accounting Pronouncements

The report discusses two new accounting standards the company plans to adopt:

1. ASU 2024-03 on disaggregation of income statement expenses, effective for 2027.
2. ASU 2023-09 on improvements to income tax disclosures, effective for 2025.

These new standards will require enhanced financial statement disclosures related to expenses and income taxes.

In summary, WEC Energy Group delivered strong financial results in the first nine months of 2025, driven by its diversified utility and non-utility operations. The company’s strategic capital investment plan, focus on sustainability, and regulatory relationships provide a solid foundation for future growth. However, the company faces some risks, including rising interest rates, regulatory uncertainty, and weather sensitivity, that will require continued management attention.