MGE Energy Reports Fourth-Quarter Earnings

MGE Energy, Inc. (Nasdaq: MGEE) today reported financial results for the fourth quarter and full year 2017.

MGE Energy's GAAP (Generally Accepted Accounting Principles) earnings for the full year of 2017 were $97.6 million, or $2.82 per share, compared to $75.6 million, or $2.18 per share, for the same period in the prior year. Earnings for 2017 included a 62 cent per share one-time, non-cash tax benefit from nonregulated operations as a result of the Tax Cuts and Jobs Act (Tax Act) and a 3 cent per share expense from a voluntary contribution to the Madison Gas and Electric Foundation. Excluding these amounts, adjusted non-GAAP earnings were $2.23 per share for the full year of 2017 compared to $2.18 per share in 2016.

MGE Energy's GAAP earnings for the fourth quarter of 2017 were $36.1 million, or $1.04 per share, compared to $14.5 million, or 42 cents per share, in the fourth quarter of 2016. Earnings for the fourth quarter of 2017 included a 62 cent per share one-time, non-cash tax benefit from nonregulated operations as a result of the Tax Act and a 3 cent per share expense from a voluntary contribution to the Madison Gas and Electric Foundation.

Adjusted non-GAAP earnings were 45 cents per share in the fourth quarter of 2017 compared to 42 cents per share in the fourth quarter of 2016. The increase in adjusted earnings was driven by customer growth and colder weather during the quarter. There were approximately 2,000 more electric and approximately 4,000 more gas customers in 2017, primarily driven by residential customer growth.

The tables below include a reconciliation of GAAP to adjusted earnings per share (EPS).

Non-GAAP earnings measures

We have provided adjusted earnings (non-GAAP earnings) in this press release as a complement to, and not as an alternative to, reported earnings presented in accordance with GAAP. Adjusted earnings exclude a one-time reduction in income tax expense related to a remeasurement of our deferred taxes as a result of the Tax Cuts and Jobs Act of 2017 and an expense associated with a voluntary contribution. We believe the adjusted earnings provide a measure to understand and compare the company's base operating performance across periods. Therefore, we believe that the presentation of adjusted earnings is relevant and useful to investors to understand MGE Energy's operating performance. Management uses such measures internally to evaluate the company's performance and manage its operations. MGE Energy's management also uses income from continuing operations, as adjusted, to determine performance-based compensation.

About MGE Energy

MGE Energy is a public utility holding company. Its principal subsidiary, Madison Gas and Electric, generates and distributes electricity to 151,000 customers in Dane County, Wis., and purchases and distributes natural gas to 158,000 customers in seven south-central and western Wisconsin counties. MGE's roots in the Madison area date back more than 150 years.

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