Company: WELPM
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0000107815-25-000204
Chunk: 10

Company: WISCONSIN ELECTRIC POWER CO
Filing Date: 2025-08-01
Form: 10-Q
Item: Part I, Item 2
Chunk 10
---
, also partially offset the increase in interest expense.

Income Tax Expense

Income tax expense at the utility segment decreased $2.6 million during the second quarter of 2025, compared with the same quarter in 2024, driven by an increase in PTCs, the increased benefit from the flow through of tax repairs in connection with our rate order approved by the PSCW, effective January 1, 2025, and an increase in income tax benefits associated with AFUDC-Equity, driven by continued capital investment. These positive income tax impacts were partially offset by higher pre-tax income.

SIX MONTHS ENDED JUNE 30, 2025

Earnings

Our earnings for the six months ended June 30, 2025 were $314.6 million, compared to $219.3 million for the same period in 2024. See below for information on the $95.3 million increase in earnings.

Expected 2025 Annual Effective Tax Rate

We expect our 2025 annual effective tax rate to be between 15.0% and 16.0%. Our effective tax rate calculations are revised every quarter based on the best available year-end tax assumptions, adjusted in the following year after returns are filed. Tax accrual estimates are trued-up to the actual amounts claimed on the tax returns and further adjusted after examinations by taxing authorities, as needed.

06/30/2025 Form 10-Q33Wisconsin Electric Power Company

Non-GAAP Financial Measures

The discussion below addresses the contribution of our utility segment to net income attributed to common shareholder. The discussion includes financial information prepared in accordance with GAAP, as well as utility margin, which is not a measure of financial performance under GAAP. Utility margin (operating revenues less fuel and purchased power costs and cost of natural gas sold) is a non-GAAP financial measure because it excludes certain operation and maintenance expenses applicable to revenues, as well as depreciation and amortization and property and revenue taxes. 

We believe that utility margin provides a useful basis for evaluating utility operations since the majority of prudently incurred fuel and purchased power costs, as well as prudently incurred natural gas costs, are passed through to customers in current rates. As a result, management uses utility margin internally when assessing the operating performance of our utility segment as this measure excludes the majority of revenue fluctuations caused by changes in these expenses. Similarly, the presentation of utility margin herein is intended to provide supplemental information for investors regarding our operating performance. 

Our utility