Segment Information

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Segment Information

Segment Information - MGE Energy and MGE.

The electric utility business purchases, generates and distributes electricity, and contracts for transmission service. The gas utility business purchases and distributes natural gas and contracts for the transportation of natural gas. Both the electric and gas segments operate through MGE Energy's principal subsidiary, MGE.

The nonregulated energy operations are conducted through MGE Energy's subsidiaries: MGE Power, MGE Power Elm Road, and MGE Power West Campus. These subsidiaries own electric generating capacity that they lease to MGE to assist MGE. MGE Power Elm Road has an ownership interest in two coal-fired generating units in Oak Creek, Wisconsin, which are leased to MGE, and MGE Power West Campus owns a controlling interest in the electric generation plant of a natural gas-fired cogeneration facility on the UW campus. MGE Power West Campus's portion is also leased to MGE.

The transmission investment segment invests in ATC, a company that provides electric transmission services primarily in Wisconsin, and ATC Holdco, a company formed to pursue electric transmission development and investments outside of Wisconsin. These investments are held in MGE Transco and MGEE Transco, respectively. See Footnote 7 for further discussion.

The "All Others" segment includes: corporate, CWDC, MAGAEL, MGE State Energy Services, MGE Services, NGV Fueling Services (dissolved in 2018), and North Mendota. These entities' operations consist of investing in companies and property which relate to the regulated operations, financing the regulated operations, or, in the case of NGV Fueling Services, owning and operating natural gas compression equipment.

General corporate expenses include the cost of executive management, corporate accounting and finance, information technology, risk management, human resources and legal functions, and employee benefits that are allocated to electric and gas segments based on formulas prescribed by the PSCW. Identifiable assets are those used in MGE's operations in each segment.

Sales between our electric and gas segments are based on PSCW approved tariffed rates. Additionally, intersegment operations related to the leasing arrangement between our electric segment and MGE Power Elm Road/MGE Power West Campus are based on terms previously approved by the PSCW. Consistent with internal reporting, management has presented the direct financing capital leases between MGE and MGE Power Elm Road/MGE Power West Campus based on actual lease payments included in rates. Lease payments made by MGE to MGE Power Elm Road and MGE Power West Campus are shown as operating expenses. The lease payments received by MGE Power Elm Road and MGE Power West Campus from MGE

are shown as lease income in interdepartmental revenues. The depreciation expense associated with the Elm Road Units and WCCF is reflected in the nonregulated energy segment.

The following table shows segment information for MGE Energy's and MGE's operations:

(In thousands) MGE Energy		Electric		Gas		Non-Regulated Energy		Transmission Investment		All Others		Consolidation/ Elimination Entries		Consolidated Total
Year Ended December 31, 2019
Operating revenues	$	408,285	$	159,875	$	695	$	-	$	-	$	-	$	568,855
Interdepartmental revenues		806		16,070		40,020		-		-		(56,896)		-
Total operating revenues		409,091		175,945		40,715		-		-		(56,896)		568,855
Depreciation and amortization		(52,755)		(11,320)		(7,487)		-		-		-		(71,562)
Other operating expenses		(297,156)		(145,097)		(144)		-		(882)		56,896		(386,383)
Operating income (loss)		59,180		19,528		33,084		-		(882)		-		110,910
Other income (deductions), net		7,153		3,550		-		9,547		(1,439)		-		18,811
Interest (expense) income, net		(14,978)		(4,237)		(5,083)		-		1,235		-		(23,063)
Income (loss) before taxes		51,355		18,841		28,001		9,547		(1,086)		-		106,658
Income tax (provision) benefit		(5,037)		(4,753)		(7,628)		(2,602)		236		-		(19,784)
Net income (loss)	$	46,318	$	14,088	$	20,373	$	6,945	$	(850)	$	-	$	86,874
Year Ended December 31, 2018
Operating revenues	$	400,882	$	157,767	$	1,119	$	-	$	-	$	-	$	559,768
Interdepartmental revenues		(289)		16,076		39,526		-		-		(55,313)		-
Total operating revenues		400,593		173,843		40,645		-		-		(55,313)		559,768
Depreciation and amortization		(38,925)		(10,060)		(7,427)		-		-		-		(56,412)
Other operating expenses		(297,374)		(145,883)		(144)		(16)		(1,045)		55,313		(389,149)
Operating income (loss)		64,294		17,900		33,074		(16)		(1,045)		-		114,207
Other income (deductions), net		7,294		3,132		-		8,602		(1,973)		-		17,055
Interest (expense) income, net		(12,198)		(3,692)		(5,307)		-		1,588		-		(19,609)
Income (loss) before taxes		59,390		17,340		27,767		8,586		(1,430)		-		111,653
Income tax (provision) benefit		(13,453)		(4,474)		(7,534)		(2,345)		372		-		(27,434)
Net income (loss)	$	45,937	$	12,866	$	20,233	$	6,241	$	(1,058)	$	-	$	84,219
Year Ended December 31, 2017
Operating revenues	$	413,926	$	148,825	$	348	$	-	$	-	$	-	$	563,099
Interdepartmental revenues		(510)		14,974		44,468		-		-		(58,932)		-
Total operating revenues		413,416		163,799		44,816		-		-		(58,932)		563,099
Depreciation and amortization		(36,660)		(9,000)		(7,417)		-		-		-		(53,077)
Other operating expenses		(308,100)		(135,028)		(190)		(9)		(1,002)		58,932		(385,397)
Operating income (loss)		68,656		19,771		37,209		(9)		(1,002)		-		124,625
Other income (deductions), net		4,539		1,911		-		9,844		(1,895)		-		14,399
Interest (expense) income, net		(11,257)		(3,234)		(5,533)		-		700		-		(19,324)
Income (loss) before taxes		61,938		18,448		31,676		9,835		(2,197)		-		119,700
Income tax (provision) benefit(a)		(20,547)		(7,303)		8,860		(3,954)		850		-		(22,094)
Net income (loss)	$	41,391	$	11,145	$	40,536	$	5,881	$	(1,347)	$	-	$	97,606

(a) In December 2017, there was a $21.7 million one-time tax impact as a result of the Tax Act.

(In thousands) MGE		Electric		Gas		Non-Regulated Energy		Consolidation/ Elimination Entries		Consolidated Total
Year Ended December 31, 2019
Operating revenues	$	408,285	$	159,875	$	695	$	-	$	568,855
Interdepartmental revenues		806		16,070		40,020		(56,896)		-
Total operating revenues		409,091		175,945		40,715		(56,896)		568,855
Depreciation and amortization		(52,755)		(11,320)		(7,487)		-		(71,562)
Other operating expenses		(297,156)		(145,097)		(144)		56,896		(385,501)
Operating income		59,180		19,528		33,084		-		111,792
Other income, net		7,153		3,550		-		-		10,703
Interest expense, net		(14,978)		(4,237)		(5,083)		-		(24,298)
Income before taxes		51,355		18,841		28,001		-		98,197
Income tax provision		(5,037)		(4,753)		(7,628)		-		(17,418)
Net income		46,318		14,088		20,373		-		80,779
Less: Net income attributable to
noncontrolling interest, net of tax		-		-		-		(22,349)		(22,349)
Net income attributable to MGE	$	46,318	$	14,088	$	20,373	$	(22,349)	$	58,430
Year Ended December 31, 2018
Operating revenues	$	400,882	$	157,767	$	1,119	$	-	$	559,768
Interdepartmental revenues		(289)		16,076		39,526		(55,313)		-
Total operating revenues		400,593		173,843		40,645		(55,313)		559,768
Depreciation and amortization		(38,925)		(10,060)		(7,427)		-		(56,412)
Other operating expenses		(297,374)		(145,883)		(144)		55,313		(388,088)
Operating income		64,294		17,900		33,074		-		115,268
Other income, net		7,294		3,132		-		-		10,426
Interest expense, net		(12,198)		(3,692)		(5,307)		-		(21,197)
Income before taxes		59,390		17,340		27,767		-		104,497
Income tax provision		(13,453)		(4,474)		(7,534)		-		(25,461)
Net income		45,937		12,866		20,233		-		79,036
Less: net income attributable to
noncontrolling interest, net of tax		-		-		-		(22,552)		(22,552)
Net income attributable to MGE	$	45,937	$	12,866	$	20,233	$	(22,552)	$	56,484
Year Ended December 31, 2017
Operating revenues	$	413,929	$	148,834	$	348	$	-	$	563,111
Interdepartmental revenues		(513)		14,965		44,468		(58,920)		-
Total operating revenues		413,416		163,799		44,816		(58,920)		563,111
Depreciation and amortization		(36,660)		(9,000)		(7,417)		-		(53,077)
Other operating expenses		(308,100)		(135,028)		(190)		58,920		(384,398)
Operating income		68,656		19,771		37,209		-		125,636
Other income, net		4,539		1,911		-		-		6,450
Interest expense, net		(11,257)		(3,234)		(5,533)		-		(20,024)
Income before taxes		61,938		18,448		31,676		-		112,062
Income tax (provision) benefit(a)		(20,547)		(7,303)		8,860		-		(18,990)
Net income		41,391		11,145		40,536		-		93,072
Less: Net income attributable to
noncontrolling interest, net of tax		-		-		-		(43,237)		(43,237)
Net income attributable to MGE	$	41,391	$	11,145	$	40,536	$	(43,237)	$	49,835

(a) In December 2017, there was a $21.7 million one-time tax impact as a result of the Tax Act.

The following table shows segment information for MGE Energy's and MGE's assets and capital expenditures:

		Utility				Consolidated
(In thousands) MGE Energy		Electric		Gas		Non-regulated Energy		Transmission Investment(b)		All Others		Consolidation/ Elimination Entries		Total
Assets:
December 31, 2019	$	1,308,277	$	408,001	$	258,004	$	71,668	$	443,278	$	(407,564)	$	2,081,664
December 31, 2018		1,193,083		377,005		265,301		66,366		465,661		(378,798)		1,988,618
December 31, 2017		1,058,988		354,875		270,384		61,783		485,548		(376,396)		1,855,182
Capital Expenditures:
Year ended Dec. 31, 2019	$	125,086	$	36,193	$	2,757	$	-	$	-	$	-	$	164,036
Year ended Dec. 31, 2018		176,399		30,497		5,301		-		-		-		212,197
Year ended Dec. 31, 2017		77,353		26,847		3,931		-		-		-		108,131

		Utility				Consolidated
(In thousands) MGE		Electric		Gas		Non-regulated Energy		Consolidation/ Elimination Entries		Total
Assets:
December 31, 2019	$	1,308,277	$	408,001	$	257,954	$	(755)	$	1,973,477
December 31, 2018		1,193,083		377,005		265,251		(448)		1,834,891
December 31, 2017		1,058,988		354,875		270,334		(156)		1,684,041
Capital Expenditures:
Year ended Dec. 31, 2019	$	125,086	$	36,193	$	2,757	$	-	$	164,036
Year ended Dec. 31, 2018		176,399		30,497		5,301		-		212,197
Year ended Dec. 31, 2017		77,353		26,847		3,931		-		108,131

(b) In December 2017, there was a $20.4 million one-time tax impact as a result of the Tax Act.