威斯康辛能源 (WEC) 2002 Q4 法說會逐字稿

Good afternoon and welcome to the Wisconsin Energy conference call and web cast. Before the conference call begins I will read the forward-looking language. As 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 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, earnings per share comments will be based on diluted earnings per share unless otherwise noted.

This conference call is being recorded for rebroadcast and all participants are in a listen-only mode at this time. After the presentation, the conference will be open to analysts for question and answer sessions. You are welcome to follow the presentation graphics for this call at www.wisconsinenergy.com. A replay of the presentation, both audio and visual will be available approximately two hours after the conclusion of this call. Now I would like to introduce Richard A. Abdoo, Chairman of the Board, President and Chief Executive Officer of Wisconsin Energy Corporation. Please go ahead, sir.

Good afternoon and thank you for joining Wisconsin Energy Corporation's conference call review of our 2002 results. Let me begin by introducing the Wisconsin Energy management team with me here today. We have Paul Donovan, Executive Vice President and Chief Financial Officer of WEC. Richard Grigg, President and Chief Executive Vice President of Wheat (ph) Energies and executive vice president of WEC. Jim Donolly (ph) president and chief executive officer of Wycore (ph) Industries. Larry Salustro, Senior Vice President and General Counsel. Jeffrey P.West, Treasurer and Steve Dickson, Controller, all of whom will be available to respond to your questions at the conclusion of our prepared remarks. During the call today we will review our accomplishments on our strategic plan, report on 2002 financial results and describe our expectations for earnings per share in 2003.

2002 was a year of many significant accomplishments for Wisconsin Energy. We improved our financial performance and achieved significant milestones in our growth strategy. These accomplishments include; achieving approval for the first two 500 megawatt natural gas plants for our 'Power the Future' program which I'll talk more about at the end of the call, improving the earnings performance from the core utility and manufacturing businesses; lowering the company's risk profile by selling nine utility assets, including the sale of our WIS Connecticut assets in the fourth quarter of 2002, and increasing natural gas capacity into Wisconsin through the completion of the Guardian pipeline and continued progress towards the related natural gas lateral.

We believe that the progress we have made over the past two years was recognized by the market as our shareholders received a total return exceeding 15 percent in 2002 on our stock. This chart shows our stock price since we announced our growth strategy in September of 2000, and compares our stock against the S&P 500, and the Dow Jones utility index. In addition, for 2002, our stock was ranked eight out of 65 in the EEI utilities index nationwide in total shareholder return, a sign that we're on the right track.

As you saw in the press release this morning, we reported fourth quarter GAAP earnings per share of 63 cents, as compared to 31 cents in the fourth quarter of 2001. When we adjust 2001 fourth quarter earnings for valuation charges and goodwill amortization, our 2002 earnings were still 12 percent better than last year. This increase primarily reflects favorable weather, improved manufacturing results and lower interest costs. We ended the year on a strong note. We also reported our annual GAAP earnings per share of $1.44 in 2002 as compared to $1.86 in 2001. When we exclude nonrecurring items as shown on the slide, our adjusted 2002 earnings per share were $2.32 as compared to $2.11 in 2001.

As Paul will explain in more detail, our improved financial performance was driven by our core businesses, our regulated electric and gas businesses and our manufacturing operations. These earnings could have been even better except for the impacts of a soft non-utility energy market. Although much remains to be done we've made good progress in implementing our growth strategy which is now beginning to be reflected in our financial results. Now I'm going to turn the presentation over to Paul Donovan, our chief financial officer. Paul.

Thank you, Dick. For the next 20 minutes or so I'll read you our overall 2002 operating results by business segment and explain the key financial performance drivers within each segment. Then I'll review our 2002 cash flows, specifically addressing the funded status of our pension plans, our share repurchase program, and the progress we have made in divesting in our non-core assets. Finally, I'll close with a review of our 2003 earnings guidance.

First, I'd like to begin with an overview of each business segment. We are very pleased that our utility and manufacturing segments performed extremely well during 2002, contributing $2.63 of earnings per share and 31 cents per share respectively. Unfortunately, our non-utility entity segment has been adversely impacted by the implosion (ph) of this market and incurred a loss of 11 cents per share. In addition, we incurred corporate and other costs of 51 cents per share, which resulted in adjusted earnings per share of $2.32, a 21 cent pair share or 10 percent increase over adjusted 2001 earnings.

Now, I'd like to review the operating results of our largest business segment, our regulated electric and gas business. This slide identifies the primary drivers of our 25 cent per share improvement in utility earnings. First, our electric margins grew by 34 cents per share, our gas margins grew by 11 cents pair share reflecting favorable weather and lower fuel and purchase power costs. Our earnings benefited from ten cents per share from lower interest expense caused primarily by lower short-term interest rates, the refinancing of long-term debt that we redeemed last year and lower debt balances overall. For that redemption cost us three cents per share in the first quarter of 2002. Also, our 2001 earnings were favorably impacted by a court ruling which resulted in a one-time pick up to interest income of five cents per share, which of course did not recur in 2002. Finally, our own end costs increased by 26 cents earnings per share due primarily to two scheduled nuclear outages and higher employee benefit costs.

As you can see, 2002 was a strong year for our regulated utility segment. In 2002, our utility energy segment recorded revenues of $2,852 million, down $113 million from the prior year, as a result of reduced gas costs, which flow back to our gas customers on a dollar for dollar basis. However, we experienced increased operating margins in each of our electric, gas and steam businesses. Electric revenues increased by $44 million, or by approximately two percent in 2002. This improvement was primarily the result of a $26 million increase in revenues caused by favorable summer weather, which led to increased sales to residential customers.

As measured by cooling degree days, 2002 was 26 percent warmer than 2001, and 28 percent warmer than normal. Overall, our electric volumes were virtually flat compared to 2001, as the increased residential sales were offset by reduced off system sales. In addition, our electric revenues increased by $10 million, as a result of the full year impact of fuel surcharge, implemented in February of 2001 and by nine million dollars due to a surcharge to recover increased transmission costs which began in October 2002.

Now, let's take a look at our natural gas revenues. Gas revenues were $918 million in 2002, compared to $1,075 million in 2001. Our gas business operates under a gas adjustment clause, where changes in the costs of gas are recovered on a dollar for dollar basis in rates. Our customers' bills were $177 million lower in 2002, due to lower gas prices. Our gas revenues increased by $20 million due to a six percent increased in volume, primarily due to a return to more favorable weather. Heating degree days were three percent greater than 2001, but still three percent below the twenty-year norm. Our steam business primarily serves commercial and industrial customers in downtown Milwaukee with a reliable source of steam for heating and manufacturing processes. During 2002, we recorded steam and other revenues of $23 million, essentially level with revenues recorded in 2001.

Now let's look at the primary expenses we incurred in running our utility businesses. We incurred $497 million of fuel and purchased power costs in 2002, which was $20 million less than the prior year. Fuel and purchase power expenses declined by $40 million, due to lower natural gas and wholesale power prices. These cost reductions were partially offset by $17 million of higher costs due to scheduled outages at our Oak Creek and Pleasant Prairie power plants during the year and the second planned refueling outage at our Point Beach nuclear plant in 2002.

Our cost of gas sold totaled $575 million in 2002, a decline of $177 million from the prior year. The lower natural gas costs were passed on to tour customers in 2002, under the gas cost recovery mechanism. Two components materially impacted our cost of gas sold in 2002. First, the average cost of gas per decatherm declined which led to $211 million of lower gas costs. However, this decline (ph) was partially offset by $34 million reflecting the impact of greater usage because of colder winter weather during the year.

For the year, on non-fuel O&M costs were $813 million or $47 million higher than the costs incurred in 2001. The most significant factor contributing to the increased non - fuel O& M was $25 million of scheduled maintenance at several generation plants and additional scheduled nuclear power plant outage compared to 2001. In addition, our medical, pension and other employee benefit costs increased by 17 million dollars when compared to 2001. $10 million of higher electric transmission and $5 million of increased property insurance costs also contributed to this increase.

To summarize, the $33 million increase in operating income was due to improved electric and gas margins which was partially offset by higher operating costs. As you can see on this slide, our electric margins increased by $65 million in 2002, reflecting small price increases, favorable weather, and growth in our base system load. Similarly, our gas margins improved by $20 million last year, reflecting favorable weather and small price increases.

I'd like to briefly review our other income within the utility segment which totaled $25 million, down about $14 million from last year. Other income declined by $14 million in 2002, the bulk of which is explained by the fact that we recognized $10 million, or five cents per share of interest income due to a favorable court ruling in 2001, and in 2002 we incurred $5 million, or three cents per share of costs associated with the early retirement of debt. This redemption contributed to lower interest costs in 2002. During 2002, our interest expense declined by $19 million, caused primarily by a combination of lower interest rates, debt refinancings and lower outstanding debt balances.

Now I'd like to comment on the performance of our manufacturing business, which posted very strong results in 2002. Our earnings from the manufacturing business improved by six cents per share, an increase of 24 percent. His segment benefited from recent strategic acquisitions, strong cost controls and a slight improvement in the economy. Our manufacturing segment recorded annual revenues of 685 million dollars in 2002, and an all time record. And an increase of $100 million or 17 percent over the prior year. Domestic revenues were $507 million, or 74 percent of the total in 2002. The revenue increase was split between growth caused by the impact of acquisitions made in late 2001, and 2002, and the growth in our base business.

Our base manufacturing business recorded impressive results in 2002, reflecting strong business increases in nearly all market segments. We saw particular strength in our pool and spa and global water systems businesses. The pool and spa business, our second largest market segment, posted significant growth this year, benefiting from a healthy pool construction season and the introduction of new products. Drought conditions in over 40 percent of North America and large portions of Australia, coupled with new customer and new product introductions, produced a significant increase in annual revenues from our water systems business.

For the year, operating income of $63 million was up nine million dollars compared with 2001. Growth in operating income was caused by an increase of $10 million from our base business, coupled with the four million dollar increase due to acquisitions, somewhat offset by $5 million of one-time plant consolidations and restructuring costs. We're very pleased with the results achieved by our manufacturing businesses in 2002 and we are optimistic about the opportunities for this business in 2003. 2002 represented a significant change in our non-utility energy segment as we sold this to Connecticut and increased our focus on power of the future through our subsidiary We (ph) power, which will soon begin the production of our new power plants.

Before we look at the operating results, I'd like to briefly comment on the collapse of the non-utility energy market and its impact on our company. As you know, back in 2000, we identified the need to focus on our traditional utility service in Wisconsin and Michigan and we began to exit our non-utility businesses. During 2000, and 2001, we sold $320 million of non-utility energy assets and due to our early exit from this market realized after tax gains of $71 million. Then the credit crunch and weak economy resulted in excess capacity and the non-utility energy market fell almost overnight.

A sad anecdote to this collapse is the impact this had on the sale of our Wisfes (ph) Connecticut operations. We reached an agreement to sell these assets for $350 million which would have produced a significant gain. This agreement, however, failed to receive regulatory approval and the sell fell through. In less than 18 months the market value of these assets dropped by over 30 percent and we ended up selling them at a loss. Since mid 2000, we have recorded a net loss of ten cents per share where we realized gains and losses on assets sales with the 2002 impairment charge.

However, we still currently have approximately $250 million of non-utility energy assets, all of which were under contract before the collapse of this industry. These assets primarily relate to a power plant in Chicago and an investment in a plant in Maine and a set of Seems (ph) turbines. We're exploring our options related to these assets. We believe that the current market to them is significantly depressed and over time should improve. However, as we ride out this depressed market, we will incur operating losses associated with these assets. We are disappointed with the drag on earnings that these investments are causing, and we are evaluating all of our options to improve their performance.

In 2002, our non-utility energy segment had losses of $13 million compared to prior year earnings of $2 million. Our largest asset, Wisfes (ph), Connecticut was sold in December had operating loss of $2 million in 2002 compared to operating income of $21 million in 2001. Offsetting these amounts were the FAS 133 valuations. In 2002 we had $13 million of FAS 133 gains, while in 2001 we had $13 million of losses. As we previously mentioned, our subsidiary, We (ph) power, which will build a new generating plants, begin operations in 2002 and incurred start-up costs of four million dollars. Finally, our other non-utility energy assets which were discussed previously had losses of $20 million.

Now I'd like to briefly touch on several other key 2002 financial items, including our corporate costs and 2002 cash flows. When you look at our corporate and other costs, you will see that the largest cost represents unallocated interest expense, which was about $57 million after tax in 2002. We also had about eight million dollars in after tax corporate costs during the year. You will note that in 2002 we did recognize rehabilitation tax credits of about six million dollars related to community development projects that we expect to receive additional credits in 2003 as these projects continue.

Let's turn to a discussion of our 2002 cash flows. First, our 2002 cash sources are comprised of $259 million in net income, $362 million in depreciation and amortization, and litigation refund of $71 million. The decline in depreciation and amortization reflects $21 million due to the elimination of goodwill amortization. These sources were $95 million higher than the $597 million we generated in the prior year. We used this cash to fund $557 million in capital expenditures and $60 million for increases in working capital and other needs during 2002. When we combine our $692 million in cash sources with our $617 million of cash uses, the result is a positive operating cash flow of $75 million.

Total cash flow before financing was $345 million, which included $310 million of asset sales in 2002, partially offset by $40 million of acquisitions and other investments. We received $52 million of proceeds from the issuance of new shares, primarily from our dividend reinvestment program. And repurchased a small amount in the open market. We paid $92 million in dividends and paid down debt in the amount of $270 million. At the end of 2002, our debt to total capital ratio was 62.9 percent, compared to 65.1 percent at the end of 2001.

Now let's take a more detailed look at three major areas affecting our cash flow. Capital expenditure, asset sales and share repurchases. Our capital expenditures for 2002 totaled $557 million, which was a decline of $116 million from the prior year as we reduced our expenditures for non-utility energy assets. For 2003, we expect capital spend just to be approximately $693 million. We've included $186 million of capital expenses in our budget for the initial phase of our 'Power the Future' program. In 2002, we received $310 million in proceeds from asset dispositions, primarily from the sale of our Wisfes (ph) Connecticut facilities. This brings the total proceeds since the announcement of our strategic plan, to just over one billion dollars.

As you may recall, in September of 2000 we announced the Board of Directors had authorized an increase in our share buy back program from 200 million to $400 million. Since that time we've repurchased $287 million of Wisconsin energy stock or 13 million shares. In December, the board of directors extended the time available to complete this program to the end of 2004. Although we temporarily stopped buying in shares during the fourth quarter of last year, due to the delay in the sale of our Wisfes (ph) Connecticut assets, and our desire to reduce our net leverage, we plan to resume share repurchases in 2003 on an opportunistic basis.

In the conference call we mentioned the decline of the stock market was hurting the funding status of our pension fund during 2002 the funding status of our pension plans fell significantly due to the decline in the value of our investments, and due to the increase in our benefit obligation resulting from a lower discount rate. The net effect of these items was that the funded status of our plans went from $27 million over-funded status of December 31st, 2001 to a $218 million under-funded status as of December 31st, 2002.

Under the accounting rules we have recorded a minimum pension liability of $113 million on our December 31st, 2002 balance sheet. We have concluded that the debit representing unrecognized pension costs qualifies as a regulatory asset and we have not recorded a charge to other comprehensive income for this item. Let me remind you that the under-funded pension status could go away in the future as the stock market rebounds, discount rates rise or the company shoes to fund the shortfall.

Now I'd like to discuss the earning expectations for 2003. As we look at our 2003 earnings forecast, we thought it might be helpful to break down the earnings forecast by segment. We start with our regulated segment and deduct seven to nine cents per share from our 2002 earnings for the impact of weather. You can see that we expect a modest growth within the utility. Next our manufacturing segment should increase by one to four cents per share, which reflects the full year impact of mergers and the continued focus on cost containment. However, as we discussed earlier in the call, we still have investments in the non-utility energy market which are expected to reduce our overall results the increased losses in this segment reflect the elimination of earnings as a result of selling our Wisfes (ph), Connecticut assets in 2002. Considering all of these factors we're confirming our forecast for 2003 in a range of $2.20 to $2.40 per share.

In summary, I want to emphasize that our core businesses are doing well, very well. And we have accomplished many significant things, which should lay the foundation for our future growth. Now I'd like to turn the call back over to Dick Abdoo.

Thank you, Paul. Wisconsin Energy has made substantial progress in executing our "Power of the Future' plan for 2002. Chief among these accomplishments was the approval in December by the public service mission of Wisconsin of the company's application to build two gas-fueled 500 megawatt generating units at our Port Washington, Wisconsin power plant site. The site preparation work is underway and the plant is scheduled to be online in time to meet summer peak demand in 2005. As you know, the final terms for this transaction include a 12.7 percent return on common equity, with an assumed equity component of 53 percent.

In November, Public Service Commission of Wisconsin ruled it had enough information to begin reviewing our proposal to expand our he will many Elm Road site with coal units. We expect to receive a schedule for public hearing shortly, with a financial decision by the end of 2003. Wisconsin energy is planning for the future today. We are executing a growth strategy that benefits our customers, our shareholders and our employees. I believe we have a great future ahead of us. And now we'd like to take your questions.

Thank you, the question and answer session will begin now. If you're using a speaker phone, please pick up the handset before pressing any numbers. If you have a question, press one followed by four on your push button telephone. If you wish to withdraw your question, please press one followed by three. Your question will be taken in the order it is received. Please stand by for your first question. The first question comes from Paul Ridzon. State your affiliation followed by your question.

Paul Ridzon at McDonald Investments. I just had a quick question on your reconciliation. You have on your press release nine cents of charges related to Giddings & Louis (ph). Now, is that securing five cents in the third quarter, and secondly, I was wondering if you could give the impact of what the Connecticut assets did by quarter in 2003.

This is Steve Dickson, controller. Let me walk you through because we had a couple questions from other analyst about reconciling the GAAP numbers to the quarter as adjusted. In the first quarter we reported GAAP loss of four cents a share. We had the adjustment of 79 cents a share to get adjusted earnings per share of 75 cents. Second quarter GAAP earnings were 39 cents a share. The GID digs was four cents a share and again adjusted earnings of 43 cents a share. Third quarter GAAP earnings were 45 cents a share. We had the second part of the Giddings & Louis settlement at five cents a share as you mentioned to get adjusted earnings of 50 cents a share.

Fourth quarter, no adjustments, GAAP earnings 63 cents a share. When you calculate the earnings on a quarterly basis, you sometimes get differences than you do on an annual basis and there's a penny difference there. Our accountants say you have to do the quarters on a stand alone basis. Let me remind you on Giddings & Louis (ph) settlement, the two settlements were the same. They rounded to about four and a half cents a share, so in this discussion I put four cents in the second quarter and five cents in the third quarter. As it relates to Wisfes (ph) Connecticut I don't have the information at my hands right now report quarterly impact.

Colleen will get back to you on that.

Thank you.

The next question comes from Doug Fischer. State your affiliation followed by your question.

Thank you. AG Edwards, and congratulations on a solid fourth quarter. I just wanted you to explain a little bit of the rationale behind booking the minimum pension liability as a regulatory asset. We're seeing some people charge that off. Some people book it as a regulatory asset. And I'd like you to discuss a little bit the thought process that you went through with your accountants in order to book that as regulatory asset.

This is Steve Dickson again. During the fourth quarter, I think discussions with our external accountants, and they naturally had had discussions with the Feds staff and they had been present (ph) for the rate regulated utilities, the amount, the debit that would go to other kind of gain, recognized -- represented unrecognized pension costs. Under FAS 171, we concluded that the other recognized pension costs represented a cost that would be recovered in future rates based on rate orders and the commission as we will account for pension costs and our FAS 87.

And since we can conclude that it was probable, those costs would be included in future rate proceedings, our can't said yes that qualifies as a regulatory asset and we booked it as a regulatory asset. Just as background, last year we had the debit and prepaid pension cost. So on our balance sheet recorded minimum pension liability we're moving that prepaid pension asset in effect out of other investments and into regulatory assets.

But you're right we're only one of a few utilities in the country that have recorded it this way.

Was there any specific action by the commission required in order to, was there a letter or anything you needed from them?

The evidence that we needed was, we received a letter that said it's their intention to continue accounting for pension costs in rate proceedings under FAS 87 to FAS 88. That coupled with prior rate orders, coupled with process in the state, led us to conclude it was probable, the commission would continue to account for pension costs under FAS 87, therefore we concluded it was a regulatory asset

What about the non-regulated parts of your business, how does that work into this?

Basically, their plans were funded so we did not have this situation on a non-regulated businesses.

Okay. Thank you. That's helpful.

Your next question comes from Paul Patterson. Please state your affiliation followed by your question.

Good afternoon. Glenn (ph) Rock Associates. I had to step away from the slide show for a second. Wondered if you could tell us what the assumed share count is for the 2003 guidance.

We don't disclose that, Paul. We said that we will continue our share repurchase program on an opportunistic basis. To date we've repurchased about $287 million worth of our shares, about 13 million shares overall, and the total of the program is $400 million and we'll do it on an opportunistic basis.

Okay. Second question I had for you was what was the total weather impact, if you have one, versus normal?

It's about seven to nine cents overall

Seven to nine cents overall. Also I was wondering, in 2001, I think we saw a big rise in gas prices which caused you to seek a increase with respect to fuel in your electric side of the business. I was wondering whether or not the same segment was in place or whether or not you guys are fine with the big spike we've seen now here with March coming up on gas prices, electric side of the business. I know on the elect side you had a more automatic side of thing. I don't know if it's changed on the electric which is a little bit different.

We are going through the experience of cost of fuel and purchase power and trying to estimate what it will be for the year and we haven't made a decision yet concerning whether we will go back to the commission and ask for an increase or if we do what that increase would be. The Commission has in the recent past taken steps to accelerate their procedure somewhat so if there is a legitimate request for increased purchase and power, that we will anticipate getting it sooner than we had in the past.

Can you give us an idea how much sooner or how much the time might have been compressed?

In the past, it has been a period of months before we at least get a final decision from the commission. The commission has indicated that going forward now they would attempt to make a preliminary decision anyway. Those requests within a month, permitting us to put those into effect sooner and sort out later what the exact amount should be. That's not a hard and fast rule. But they have been sensitive to the effect of fuel and purchase power increases on utilities and the volatility, both up and down, and are taking steps to see whether the process can move forward quicker.

Finally, in terms of short-term debt and variable rate debt, could you just give us an idea either through a dollar value or percentage total amount of debt that comprises of your -- how much short-term debt do you have out of the whole if you see what I'm saying including that variable rate that just ...

This is Jeffrey P.West. Our short-term debt right now comprises between 15 and 20 percent of our total debt outstanding. And this will probably stay in that same vicinity during the course of the next year.

Thanks a lot. Congratulations.

Next question comes from Rick Sheldon (ph). Please state your fill litigation followed by your question

Rick Sheldon (ph), King Capital (ph). I have a couple of questions. I was hoping you would give me what your target balance sheet ratios would be and over the tight horizon you're looking to get there. Then if you could re-walk me through your cash flow for operations for 2003, that would be helpful as well. And last if Larry could give me an update as to the procedure schedule for the call approval process so that power to the future that would be very helpful.

This is Paul Donovan. We ended year total debt to capital about 62.9 percent. Our long-term objective is to get that down to at least 60 percent, if not below. I think it will probably take us few more years than we originally anticipated, probably add it to 2005, 2006, because we have a fair amount of capital spending associated with the power of the future program. However, as you know we did reduce the dividend a year or so ago and that's building equity quite nicely to support the increased capital expenditures. And I'll ask Jeff to comment on the capital expenditures, which are going to be up next year and are total cash flow.

This is Jeffrey P.West. The capital expenditures increased somewhat in 2003 relative to 2002, primarily because on the utility side of the business we are working to complete the lateral that will connect to the guardian pipeline. That adds about $60 million to cap ex in 2003. And then we begin construction on our port Washington phase of the power of the future program and in total power of the future, we have about 180 to $190 million of cap ex budgeted for 2003. So those two items caused the increase in cap ex in 2003.

However we don't expect to see much of a change in the total debt to capital ratio because our equity will build during the year as I mentioned before.

Looked like in one of the slides in 2002 you had something like 697 million in cash flow from operations and it slipped to 2003, should that be more like in the 650 million chaeng if I normalize for weather and that sort of thing and take out contributions from WIS best and if I look at 2003 now I have something say 6gi million, what's the total cap ex for 2003?

Jeffrey P.West again. Total cap ex for -- I believe it's on the one slide, 693 million is the budget. And in terms of cash from operations without getting pinned down to a specific number, we're estimating say between 600 and 650.

The ditched is dividend is how much?

That's up to the board of directors but it's bent set at 80 cents per share for the past year.

That's something like $90 million of cash?

That's correct.

And how much is paid out in the, through the drip? Is that about 50 million a year? )) Roughly in the $50 million range. 40 to 50 million

As far as the procedural process for the coal plants and timing and approval for getting approval of that

This is Larry. The agencies have not yet established the key dates for when they will be having hearings and what they're going to do. But for the two main events, although they're events every day, but for the main ones, first is the agency's preparation of the draft Environmental Impact Statement and although they have not set a date, we anticipate probably early April for that. And that will kick off an extensive environmental review process. And then the Public Service Commission has hearings on that issue and any other issue that comes up. Again, they have not set a date for that. But we would anticipate late summer, perhaps around Labor Day for those ergs. A final decision should be reached by the agency by the end of the year.

Thank you very much.

Ladies and gentlemen, once again, if you do have a question, press release press one followed by four on your push button phone at this time.

That concludes our conference call for today. Thank you for participating. If you have additional questions, Colleen Henderson will be available in the investor relations office at 414-221-2592. This concludes Wisconsin Energy's year-end 2002 conference call. Thank you very much for participating and have a great afternoon.