Business Segments

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Business Segments [Text Block]

BUSINESS SEGMENTS

We present three reportable segments: Regulated Operations, ALLETE Clean Energy, and U.S. Water Services. We measure performance of our operations through budgeting and monitoring of contributions to consolidated net income by each business segment.

Regulated Operations includes three operating segments which consist of our regulated utilities, Minnesota Power and SWL&P, as well as our investment in ATC, a Wisconsin-based regulated utility that owns and maintains electric transmission assets in parts of Wisconsin, Michigan, Minnesota and Illinois. ALLETE Clean Energy is our business focused on developing, acquiring and operating clean and renewable energy projects. U.S. Water Services is our integrated water management company which was acquired in February 2015. The ALLETE Clean Energy and U.S. Water Services reportable segments comprise our Energy Infrastructure and Related Services businesses. We also present Corporate and Other which includes two operating segments, BNI Energy, our coal mining operations in North Dakota, and ALLETE Properties, our legacy Florida real estate investment, along with other business development and corporate expenditures, unallocated interest expense, a small amount of non-rate base generation, approximately 5,000 acres of land in Minnesota, and earnings on cash and investments.

NOTE 17. BUSINESS SEGMENTS (Continued)

Year Ended December 31	2016			2015			2014
Millions
Operating Revenue
Regulated Operations		$1,000.7			$991.2			$1,003.5
Energy Infrastructure and Related Services
ALLETE Clean Energy (a)	80.5			262.1			33.2
U.S. Water Services	137.5			119.8			—
Corporate and Other	121.0			113.3			100.1
Total Operating Revenue		$1,339.7			$1,486.4			$1,136.8
Net Income (Loss) Attributable to ALLETE
Regulated Operations (b)		$135.5			$131.6			$123.0
Energy Infrastructure and Related Services
ALLETE Clean Energy	13.4			29.9			3.3
U.S. Water Services	1.5			0.9			—
Corporate and Other (b)	4.9			(21.3		)	(1.5		)
Total Net Income Attributable to ALLETE		$155.3			$141.1			$124.8
Depreciation and Amortization
Regulated Operations		$154.3			$135.1			$118.0
Energy Infrastructure and Related Services
ALLETE Clean Energy	22.3			18.7			10.1
U.S. Water Services	8.9			7.3			—
Corporate and Other	10.3			8.9			7.6
Total Depreciation and Amortization		$195.8			$170.0			$135.7
Operating Expenses – Other (c)
ALLETE Clean Energy	$3.3			—			—
Corporate and Other	(13.6		)	$36.3			—
Total Operating Expenses – Other	$(10.3)			$36.3			—
Interest Expense
Regulated Operations (b)	$52.1			$53.9			$49.2
Energy Infrastructure and Related Services
ALLETE Clean Energy	5.8			3.3			0.8
U.S. Water Services	1.7			1.4			—
Corporate and Other (b)	14.5			8.6			7.1
Eliminations (b)	(3.8		)	(2.3		)	(2.3		)
Total Interest Expense	$70.3			$64.9			$54.8
Equity Earnings in ATC
Regulated Operations	$18.5			$16.3			$19.6

(a) Includes the construction and sale of a wind energy facility by ALLETE Clean Energy to Montana-Dakota Utilities for $197.7 million in 2015.

(b) During 2015, an intercompany loan agreement was entered into and interest expense was allocated to certain subsidiaries. The amounts are eliminated in consolidation. 

(c) See Note 1. Operations and Significant Accounting Policies.

NOTE 17. BUSINESS SEGMENTS (Continued)

Year Ended December 31	2016		2015			2014
Millions
Income Tax Expense (Benefit)
Regulated Operations		$5.9		$24.4			$39.0
Energy Infrastructure and Related Services
ALLETE Clean Energy	8.1		21.0			2.3
U.S. Water Services	1.4		0.9			—
Corporate and Other	4.4		(21.0		)	(4.6		)
Total Income Tax Expense		$19.8		$25.3			$36.7

As of December 31	2016		2015
Millions
Assets
Regulated Operations (a)	$3,853.4		$3,853.1
Energy Infrastructure and Related Services
ALLETE Clean Energy (a)	566.0		501.5
U.S. Water Services	264.1		258.3
Corporate and Other	222.9		281.6
Total Assets (a)		$4,906.4		$4,894.5
Capital Expenditures
Regulated Operations	$121.8		$224.4
Energy Infrastructure and Related Services
ALLETE Clean Energy	106.9		8.6
U.S. Water Services	3.7		2.9
Corporate and Other	15.4		15.9
Total Capital Expenditures		$247.8		$251.8

(a) As a result of revised accounting guidance adopted in the first quarter of 2016, we reclassified unamortized debt issuance costs from Other Non-Current Assets to Long-Term Debt on the Consolidated Balance Sheet. Prior period segment assets have been reclassified to conform to the current presentation. (See Note 1. Operations and Significant Accounting Policies.)