Company: WELPM
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000107815-25-000207
Chunk: 150

Company: WISCONSIN ELECTRIC POWER CO
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 8
Chunk 150
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388.7 million for the same period in 2024. See below for information on the $123.0 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.

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 margin may not be comparable to similar measures presented by other companies. Furthermore, this measure is not intended to replace gross margin as determined in accordance with GAAP as an indicator of operating performance. Our utility segment discussion below includes a table that provides the calculation of both gross margin as determined in accordance with GAAP and utility margin, as well as a reconciliation between the two measures.

09/30/2025 Form 10-Q36Wisconsin Electric Power Company

Utility Segment Contribution to Net Income Attributed to Common Shareholder

The following table compares our utility segment's contribution to net income attributed to common shareholder for the nine months ended September 30, 2025, with the same period in 2024, including favorable or better, "B", and unfavorable or worse, "W", variances.

Nine Months Ended September 30(in millions)20252024B (W)Operating revenues