Condensed Parent Company Financial Statements

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

Schedule I

Condensed Parent Company Financial Statements

MGE Energy, Inc.

Statements of Income

(Parent Company Only)

(In thousands)

	For the Years Ended December 31,
	2023			2022			2021
Operating Expenses:
Other operations and maintenance	$	868		$	746		$	711
Total Operating Expenses		868			746			711
Operating Loss		(868	)		(746	)		(711	)
Equity in earnings of investments		120,394			112,180			107,883
Other income (loss), net		(2,862	)		(855	)		(2,163	)
Interest income, net		105			2			5
Income before income taxes		116,769			110,581			105,014
Income tax benefit		930			371			747
Net Income	$	117,699		$	110,952		$	105,761

The accompanying notes are an integral part of the above consolidated financial statements.

MGE Energy, Inc.

Statements of Cash Flows

(Parent Company Only)

(In thousands)

	For the Years Ended December 31,
	2023			2022			2021
Net Cash Flows Provided by Operating Activities	$	67,253		$	58,253		$	27,535
Investing Activities:
Contributions to affiliates		(3,750	)		(2,693	)		—
Contributions to other investments		(3,080	)		(2,357	)		(4,006	)
Other		987			861			843
Cash Used for Investing Activities		(5,843	)		(4,189	)		(3,163	)
Financing Activities:
Cash dividends paid on common stock		(60,393	)		(57,500	)		(54,788	)
Other		—			(187	)		—
Cash Used for Financing Activities		(60,393	)		(57,687	)		(54,788	)
Change in cash, cash equivalents, and restricted cash		1,017			(3,623	)		(30,416	)
Cash, cash equivalents, and restricted cash at beginning of period		3,336			6,959			37,375
Cash, cash equivalents, and restricted cash at end of period	$	4,353		$	3,336		$	6,959

The accompanying notes are an integral part of the above consolidated financial statements.

Schedule I

Condensed Parent Company Financial Statements (continued)

MGE Energy, Inc.

Balance Sheets

(Parent Company Only)

(In thousands)

	As of December 31,
ASSETS	2023		2022
Current Assets:
Cash and cash equivalents	$	4,353	$	3,336
Other current assets		2,395		1,978
Total Current Assets		6,748		5,314
Other deferred assets and other		210		294
Investments:
Investments in affiliates		1,148,134		1,091,103
Other investments		21,714		21,193
Total Investments		1,169,848		1,112,296
Total Assets	$	1,176,806	$	1,117,904
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable to affiliates	$	572	$	530
Other current liabilities		1,650		2,017
Total Current Liabilities		2,222		2,547
Other Credits:
Deferred income taxes		33,974		32,624
Accounts payable to affiliates		529		1,059
Other deferred liabilities		8		—
Total Other Credits		34,511		33,683
Shareholders' Equity:
Common shareholders' equity		432,913		431,820
Retained earnings		707,160		649,854
Total Shareholders' Equity		1,140,073		1,081,674
Commitments and contingencies (see Footnote 3)
Total Liabilities and Shareholders' Equity	$	1,176,806	$	1,117,904

The accompanying notes are an integral part of the above consolidated financial statements.

Schedule I

Condensed Parent Company Financial Statements (continued)

Notes to Condensed Financial Statements

(Parent Company Only)

1.Basis of Presentation.

MGE Energy is a holding company and conducts substantially all of its business operations through its subsidiaries. For Parent Company only presentation, investment in subsidiaries are accounted for using the equity method. These condensed Parent Company financial statements and related notes have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X. These statements should be read in conjunction with the financial statements and the notes in Item 8. Financial Statements and Supplementary Data of the Annual Report on Form 10-K for the year ended December 31, 2023.

2.Credit Agreements.

As of December 31, 2023, MGE Energy had access to an unsecured, committed credit facility with aggregate bank commitments of $50.0 million. As of December 31, 2023, no borrowings were outstanding under this facility. See Footnote 13 of the Notes to Consolidated Financial Statements in this Report for further information regarding MGE Energy's credit agreement.

3.Commitments and Contingencies.

See Footnote 16 of the Notes to Consolidated Financial Statements in this Report for information regarding commitments and contingencies.

4.Dividends from Affiliates.

	Dividends from Affiliates
(In thousands)	2023		2022		2021
MGE	$	41,000	$	33,500	$	5,000
MGE Power Elm Road		14,250		12,500		10,500
MGE Power West Campus		6,250		9,500		4,500
MGE Transco		5,533		4,621		5,464
MGEE Transco		79		—		—
Total	$	67,112	$	60,121	$	25,464

Dividend Restrictions

Dividend payments by MGE to MGE Energy are subject to restrictions arising under a PSCW rate order and, to a lesser degree, MGE's first mortgage bonds. The PSCW order restricts any dividends that MGE may pay MGE Energy if its common equity ratio, calculated in the manner used in the rate proceeding, is less than 55%. MGE's thirteen month rolling average common equity ratio as of December 31, 2023, is 57.7% as determined under the calculation used in the rate proceeding. This restriction did not impact MGE's payment of dividends in 2023. Cash dividends of $41.0 million and $33.5 million were paid by MGE to MGE Energy in 2023 and 2022, respectively. The rate proceeding calculation includes as indebtedness imputed amounts for MGE's outstanding purchase power capacity payments and other PSCW adjustments, but does not include the indebtedness associated with MGE Power Elm Road or MGE Power West Campus, which are consolidated into MGE's financial statements but are not direct obligations of MGE.

MGE has covenanted with the holders of its first mortgage bonds not to declare or pay any dividend or make any other distribution on or purchase any shares of its common stock unless, after giving effect thereto, the aggregate amount of all such dividends and distributions and all amounts applied to such purchases, after December 31, 1945, shall not exceed the earned surplus (retained earnings) accumulated subsequent to December 31, 1945. As of December 31, 2023, approximately $699.6 million was available for the payment of dividends under this covenant.

See Footnotes 13 and 14 of the Notes to Consolidated Financial Statements in this Report for more information on dividend restrictions appearing in credit agreements and long-term debt, respectively.