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LONG-TERM DEBT | 9 Months Ended
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Sep. 30, 2024
Long-Term Debt, Unclassified [Abstract] |
LONG-TERM DEBT | LONG-TERM DEBT WEC Energy Group, Inc. In January and February 2024, pursuant to a tender offer, we purchased $122.1 million aggregate principal amount of the $500.0 million outstanding of our 2007 Junior Notes for $115.2 million with proceeds from issuing commercial paper. We recorded a $6.9 million gain related to the early settlement. Additionally, in May 2024, we repurchased $19.0 million aggregate principal amount of the $377.9 million outstanding of our 2007 Junior Notes for $18.7 million, plus accrued interest, with proceeds received from issuing commercial paper. In March 2024, our $600.0 million of 0.80% Senior Notes, due March 15, 2024, matured, and outstanding principal and accrued interest were paid with proceeds received from issuing commercial paper. Convertible Senior Notes In the second quarter of 2024, we issued $862.5 million of 2027 Notes and $862.5 million of 2029 Notes. The 2027 Notes and 2029 Notes are senior unsecured obligations and bear interest at an annual rate of 4.375%, payable semiannually beginning on December 1, 2024. Proceeds from the offerings were used to repay short-term debt and for general corporate purposes. The 2027 Notes will mature on June 1, 2027, and the 2029 Notes will mature on June 1, 2029, unless earlier converted or repurchased in accordance with their terms, or in the case of the 2029 Notes, redeemed by us. No sinking fund is provided for either series of the notes. Upon the occurrence of a fundamental change, as defined in the related indenture, holders may require us to repurchase for cash all or any portion of their 2027 or 2029 Notes. We may not redeem the 2027 Notes prior to their maturity date. We may redeem for cash all or part of the 2029 Notes, at our option, on or after June 1, 2027 and on or before the 41st scheduled trading day immediately preceding their maturity date, if the last reported sale price per share of our common stock has been at least 130% of the conversion price of the 2029 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period. Any redemptions or fundamental change repurchases of the 2027 Notes or 2029 Notes will be at a price equal to 100% of the principal amount, plus accrued and unpaid interest. Holders may convert all or any portion of their notes at their option at any time prior to the close of business on the business day immediately preceding March 1, 2027, in the case of the 2027 Notes, and March 1, 2029, in the case of the 2029 Notes, only under the following circumstances: •During any calendar quarter commencing after the calendar quarter ending on September 30, 2024, (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of such series of notes on each applicable trading day; •During the five consecutive business day period immediately after any ten consecutive trading day period (measurement period) in which the trading price per $1,000 principal amount of notes of such series for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate of such series of notes on each such trading day; •Upon the occurrence of specified corporate events, as defined in the related indenture; •In the case of the 2029 Notes only, if we call any of the 2029 Notes for redemption, at any time prior to the close of business on the second scheduled trading day prior to the redemption date, but only with respect to the 2029 Notes called (or deemed called) for redemption. Holders may convert all or any portion of their notes at any time, regardless of the foregoing circumstances, on or after March 1, 2027, in the case of the 2027 Notes, or March 1, 2029, in the case of the 2029 Notes, until the close of business on the second scheduled trading day immediately preceding the maturity date of such series of notes. Upon conversion, we will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver cash, shares of our common stock, or a combination of cash and shares of our common stock, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the notes being converted. The initial conversion rate for both the 2027 Notes and 2029 Notes is 10.1243 shares of common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $98.77 per share of our common stock. The conversion rate is subject to adjustment upon the occurrence of certain specified events, as defined in the related indenture, but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change, as defined in the related indenture, we will, in certain circumstances, increase the conversion rate by a number of additional shares of common stock for conversions in connection with the make-whole fundamental change. As of September 30, 2024, none of the conditions allowing holders to convert their notes were met. In accordance with the guidance in ASC Subtopic 470-20, Debt – Debt with Conversion and Other Options, the 2027 Notes and 2029 Notes were accounted for in their entirety as a liability on our balance sheet. The following is a summary of our convertible debt instruments as of September 30, 2024:
(in millions) |  | Principal Amount |  | Unamortized Debt Issuance Costs |  | Net Carrying Amount |  | Fair Value Amount (1)
2027 Notes |  | $ | 862.5 |  |  | $ | (8.8) |  |  | $ | 853.7 |  |  | $ | 936.3 |
2029 Notes |  | 862.5 |  |  | (9.3) |  |  | 853.2 |  |  | 954.7 |
(1) The fair values are categorized in Level 2 of the fair value hierarchy. See Note 15, Fair Value Measurements, for more information on the levels of the fair value hierarchy. The following table provides a summary of the interest expense recorded for each of the 2027 Notes and 2029 Notes:
(in millions) |  | Three Months Ended September 30, 2024 |  | Nine Months Ended September 30, 2024
2027 Notes |  |  |  |
Contractual interest expense |  | $ | 9.4 |  |  | $ | 12.9 |
Amortization of debt issuance costs |  | 0.8 |  |  | 1.1 |
Total interest expense – 2027 Notes |  | 10.2 |  |  | 14.0 |
2029 Notes |  |  |  |
Contractual interest expense |  | 9.4 |  |  | 12.9 |
Amortization of debt issuance costs |  | 0.5 |  |  | 0.7 |
Total interest expense – 2029 Notes |  | $ | 9.9 |  |  | $ | 13.6 |
Potentially dilutive common shares issuable upon conversion of the 2027 Notes and 2029 Notes are determined using the if-converted method for calculating diluted earnings per share. As of September 30, 2024, there were no shares of our common stock related to the potential conversion of the 2027 Notes and 2029 Notes included in our diluted earnings per share calculation as the impact was anti-dilutive. Wisconsin Electric Power Company In May 2024, WE issued $350.0 million of 5.00% Debentures, due May 15, 2029, and used the net proceeds to repay short-term debt and for other general corporate purposes. In September 2024, WE issued $300.0 million of 4.60% Debentures due October 1, 2034 and $300.0 million of 5.05% Debentures due October 1, 2054, and used the net proceeds to repay short-term debt and for other general corporate purposes. Wisconsin Gas LLC In October 2024, WG issued $100.0 million of 4.86% Debentures due November 1, 2029 and $100 million of 5.18% Debentures due November 1, 2034, and used the net proceeds to repay short-term debt. Michigan Gas Utilities Corporation In October 2024, MGU issued $10.0 million of 4.85% Senior Notes due November 1, 2029 and $15.0 million of 5.23% Senior Notes due November 1, 2034, and used the net proceeds to repay intercompany short-term debt to its parent, Integrys. Bluewater Gas Storage, LLC In October 2024, Bluewater issued $25.0 million of 5.41% Senior Notes due November 1, 2041, and used the net proceeds for general corporate purposes.

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