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Investment in ATC

9 Months Ended

Sep. 30, 2012

Investment in ATC Disclosure [Abstract]

3. Investment in ATC - MGE Energy and MGE.

ATC owns and operates electric transmission facilities primarily in Wisconsin. MGE received an interest in ATC when it, like other Wisconsin electric utilities, contributed its electric transmission facilities to ATC. That interest is presently held by MGE Transco, which is jointly owned by MGE Energy and MGE.

MGE Transco has accounted for its investment in ATC under the equity method of accounting. For the nine months ended September 30, 2012 and 2011, MGE Transco recorded equity earnings from the investment in ATC of $6.8 million and $6.4 million, respectively. Dividend income received from ATC was $5.3 million and $5.0 million for the nine months ended September 30, 2012 and 2011, respectively. In addition, during the nine months ended September 30, 2012 and 2011, MGE Transco made $1.8 million and $0.9 million in capital contributions to ATC, respectively.

MGE Energy and MGE's investment in ATC as of September 30, 2012 and December 31, 2011 was $60.3 million and $57.0 million, respectively.

At September 30, 2012, MGE is the majority owner, and MGE Energy, the holding company, is the minority owner of MGE Transco. MGE Energy's proportionate share of the equity and net income of MGE Transco is classified within the MGE financial statements as noncontrolling interest.

ATC's summarized financial data for the three and nine months ended September 30, 2012 and 2011, is as follows:

		Three Months Ended				Nine Months Ended
(In thousands)		September 30,				September 30,
		2012		2011		2012		2011
Operating revenues	$	150,303	$	142,741	$	450,136	$	420,562
Operating expenses		(68,813)		(66,413)		(210,139)		(192,491)
Other expense, net		(5)		(173)		(832)		(665)
Interest expense, net		(20,983)		(19,517)		(61,260)		(60,893)
Earnings before members' income taxes	$	60,502	$	56,638	$	177,905	$	166,513

- Definition

The entire disclosure for equity investment, or group of investments, for which combined disclosure is appropriate, including: (a) the name of each investee and percentage of ownership of common stock, (b) accounting policies for investments in common stock, (c) difference between the amount at which the investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference, (d) the total fair value of each identified investment for which a market value is available, (e) summarized information as to assets, liabilities, and results of operations of the investees (for investments in unconsolidated subsidiaries, common stock of joint ventures, or other investments using the equity method), and (f) material effects of possible conversions, exercises, or contingent issuances of the investee. Other disclosures include (a) the names of any investee in which the investor owns 20 percent or more of the voting stock and investment is not accounted for using the equity method, and the reasons why not, and (b) the names of any investee in which the investor owns less than 20 percent of the voting stock and the investment is accounted for using the equity method, and the reasons why it is.

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