Segments and Related Information

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Information

Segments and Related Information

Operating results from the regulated electric utility and regulated natural gas utility are each separately and regularly reviewed by NSP-Wisconsin’s chief operating decision maker.  NSP-Wisconsin evaluates performance based on profit or loss generated from the product or service provided.  These segments are managed separately because the revenue streams are dependent upon regulated rate recovery, which is separately determined for each segment.

NSP-Wisconsin has the following reportable segments: regulated electric utility, regulated natural gas utility and all other.

• NSP-Wisconsin’s regulated electric utility segment generates electricity which is transmitted and distributed in Wisconsin and Michigan.

• NSP-Wisconsin’s regulated natural gas utility segment purchases, transports, stores and distributes natural gas in portions of Wisconsin and Michigan.

• Revenues from operating segments not included above are below the necessary quantitative thresholds and are therefore included in the all other category.  Those primarily include investments in rental housing projects that qualify for low-income housing tax credits.

Asset and capital expenditure information is not provided for NSP-Wisconsin’s reportable segments because as an integrated electric and natural gas utility, NSP-Wisconsin operates significant assets that are not dedicated to a specific business segment, and reporting assets and capital expenditures by business segment would require arbitrary and potentially misleading allocations which may not necessarily reflect the assets that would be required for the operation of the business segments on a stand-alone basis.

To report income from operations for regulated electric and regulated natural gas utility segments, the majority of costs are directly assigned to each segment. However, some costs, such as common depreciation, common O&M expenses and interest expense are allocated based on cost causation allocators. A general allocator is used for certain general and administrative expenses, including office supplies, rent, property insurance and general advertising.

The accounting policies of the segments are the same as those described in Note 1.

(Thousands of Dollars)	Regulated Electric		Regulated Natural Gas		All Other			Reconciling Eliminations			Consolidated Total
2014
Operating revenues (a)	$	829,748	$	169,629	$	1,085		$	—		$	1,000,462
Intersegment revenues	497		4,885		—			(5,382		)	—
Total revenues	$	830,245	$	174,514	$	1,085		$	(5,382	)	$	1,000,462
Depreciation and amortization	$	65,978	$	13,501	$	175		$	—		$	79,654
Interest charges and financing costs	23,448		2,358		107			—			25,913
Income tax expense (benefit)	39,621		5,993		(3,211		)	—			42,403
Net Income	59,060		8,714		2,868			—			70,642

(Thousands of Dollars)	Regulated Electric		Regulated Natural Gas		All Other			Reconciling Eliminations			Consolidated Total
2013
Operating revenues (a)	$	789,168	$	132,867	$	1,003		$	—		$	923,038
Intersegment revenues	350		1,967		—			(2,317		)	—
Total revenues	$	789,518	$	134,834	$	1,003		$	(2,317	)	$	923,038
Depreciation and amortization	$	64,237	$	12,485	$	175		$	—		$	76,897
Interest charges and financing costs	22,966		2,749		101			—			25,816
Income tax expense (benefit)	33,691		4,623		(1,905		)	—			36,409
Net Income	51,334		6,501		1,633			—			59,468

(Thousands of Dollars)	Regulated Electric		Regulated Natural Gas		All Other		Reconciling Eliminations			Consolidated Total
2012
Operating revenues (a)	$	757,565	$	103,100	$	1,177	$	—		$	861,842
Intersegment revenues	355		727		—		(1,082		)	—
Total revenues	$	757,920	$	103,827	$	1,177	$	(1,082	)	$	861,842
Depreciation and amortization	$	59,768	$	9,251	$	215	$	—		$	69,234
Interest charges and financing costs	20,303		2,554		80		—			22,937
Income tax expense	27,164		2,113		281		—			29,558
Net Income	45,377		3,094		1,480		—			49,951

^(a)  Operating revenuesinclude $145 million, $137 million and $125 million of intercompany revenue for the years ended Dec. 31, 2014, 2013 and 2012 respectively. See Note 15 for further discussion of related party transactions by operating segment.