Company: WELPM
Filing Date: 2025-03-27
Form Type: DEF 14C
Source: 0000107815-25-000155
Chunk: 161

Company: WISCONSIN ELECTRIC POWER CO
Filing Date: 2025-03-27
Form: DEF 14C
Chunk 161
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 and $0.7 million, respectively.

At December 31, 2024, our employees held 71,760 WEC Energy Group performance units, including dividend equivalents. A liability of $5.0 million was recorded on our balance sheet at December 31, 2024 related to these outstanding units. As of December 31, 2024, we expected to recognize approximately $9.8 million of unrecognized compensation cost related to unvested and outstanding WEC Energy Group performance units over the next 1.7 years on a weighted-average basis.

During the first quarter of 2025, performance units held by our employees with an intrinsic value of $1.9 million were settled. The actual tax benefit from the distribution of these awards was $0.5 million. In January 2025, the Compensation Committee also awarded 33,070 WEC Energy Group performance units to our officers and other key employees under its normal schedule of awarding long-term incentive compensation.

#### Restrictions
Various financing arrangements and regulatory requirements impose certain restrictions on our ability to transfer funds to WEC Energy Group in the form of cash dividends, loans, or advances. In addition, Wisconsin law prohibits us from making loans to or guaranteeing obligations of WEC Energy Group or its subsidiaries.

In accordance with our most recent rate order, we may not pay common dividends above the test year forecasted amount reflected in our rate case, if it would cause our average common equity ratio, on a financial basis, to fall below our authorized level of 53.0%. A return of capital in excess of the test year amount can be paid by us at the end of the year provided that our average common equity ratio does not fall below the authorized level.

We may not pay common dividends to WEC Energy Group under our Restated Articles of Incorporation if any dividends on our outstanding preferred stock have not been paid. In addition, pursuant to the terms of our 3.60% Serial Preferred Stock, our ability to declare common dividends would be limited to 75% or 50% of net income during a 12-month period if our common stock equity to total capitalization, as defined in the preferred stock designation, is less than 25% and 20%, respectively.

See Note 13, Short-Term Debt and Lines of Credit, for a discussion of certain financial covenants related to our short-term debt obligations.

As of December 31, 2024, our retained earnings were fully restricted.

We do not believe that these restrictions