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Condensed Parent Company Financial Statements
 12 Months Ended
Dec. 31, 2017
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Condensed Parent Company Financial Statements
Schedule I
Condensed Parent Company Financial Statements
MGE Energy, Inc.
Statements of Comprehensive Income
(Parent Company Only)
(In thousands)
For the Years Ended December 31,
201720162015
Operating Expenses:
Other operations and maintenance$880$720$690
Total Operating Expenses880720690
Operating Loss(880)(720)(690)
Equity in earnings of investments99,24675,58171,306
Other (loss) income, net(2,165)435526
Interest income, net605176136
Income before income taxes96,80675,47271,278
Income tax provision8008865
Net Income97,60675,56071,343
Other Comprehensive Income, Net of Tax:
Unrealized gain (loss) on available-for-sale securities, net of
tax ($(117), $104, and $67)175(155)(101)
Comprehensive Income$97,781$75,405$71,242
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,
201720162015
Net Cash Flows Provided by Operating Activities$70,268$74,994$37,085
Investing Activities:
Contributions to affiliates(6,522)(2,789)(3,360)
Contributions to other investments(4,534)(360)(330)
Other843385-
Cash Used for Investing Activities(10,213)(2,764)(3,690)
Financing Activities:
Cash dividends paid on common stock(43,682)(41,775)(40,043)
Other(58)(11)-
Cash Used for Financing Activities(43,740)(41,786)(40,043)
Change in cash and cash equivalents:16,31530,444(6,648)
Cash and cash equivalents at beginning of period82,22551,78158,429
Cash and cash equivalents at end of period$98,540$82,225$51,781
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)
At December 31,
ASSETS20172016
Current Assets:
Cash and cash equivalents$98,540$82,225
Accounts receivable, net:
Accounts receivable from affiliates-83
Other current assets1,6011,221
Total Current Assets100,14183,529
Other deferred assets and other171201
Investments:
Investments in affiliates702,134684,968
Other investments5,6401,161
Total Investments707,774686,129
Total Assets$808,086$769,859
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable to affiliates$665$530
Accrued taxes17218
Other current liabilities2,030115
Total Current Liabilities2,712863
Other Credits:
Deferred income taxes23,48040,672
Accounts payable to affiliates3,7074,236
Total Other Credits27,18744,908
Shareholders' Equity:
Common shareholders' equity350,936350,936
Retained earnings426,874372,950
Accumulated other comprehensive income, net of tax377202
Total Shareholders' Equity778,187724,088
Commitments and contingencies (see Footnote 3)
Total Liabilities and Shareholders' Equity$808,086$769,859
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, 2017.

2. Credit Agreements.

As of December 31, 2017, MGE Energy had access to an unsecured, committed credit facility with aggregate bank commitments of $50.0 million. At December 31, 2017, no borrowings were outstanding under this facility.

See Footnote 10 of the Notes to Consolidated Financial Statements for further information regarding MGE Energy's credit agreements.

3. Commitments and Contingencies.

See Footnote 17 of the Notes to Consolidated Financial Statements for commitments and contingencies.

4. Dividends from Affiliates.

Dividends from Affiliates
(In thousands)201720162015
MGE(a)$45,000$50,000$30,000
MGE Power Elm Road12,00013,50010,000
MGE Power West Campus6,0009,5003,000
MGE Transco4,6691,1071,708
MGEE Transco112--
Total$67,781$74,107$44,708

(a) Excludes $15.8 million dividend in kind to MGE Energy from MGE in 2016.

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, above the PSCW authorized amount of $70.8 million, 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 at December 31, 2017, is 58.5% as determined under the calculation used in the rate proceeding. MGE was not restricted from paying cash dividends in 2017. Cash dividends of $45.0 million and $50.0 million were paid by MGE to MGE Energy in 2017 and 2016, respectively. In 2016, MGE also transferred its ownership interest in MGE Transco to MGE Energy in the form of a dividend in kind of $15.8 million. 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, 2017, approximately $343.3 million was available for the payment of dividends under this covenant.

See Footnotes 9 and 10 of the Notes to Consolidated Financial Statements for long-term debt and lines of credit dividend restrictions.