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Segments and Related Information
12 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]  
Segment Information
Segments and Related Information
Operating results from 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 - The regulated electric utility segment generates electricity which is transmitted and distributed in Wisconsin and Michigan.
Regulated Natural Gas - The regulated natural gas utility segment purchases, transports, stores and distributes natural gas in portions of Wisconsin and Michigan.
All Other - 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.
NSP-Wisconsin’s segment information is as follows:
(Millions of Dollars)
 
2018
 
2017
 
2016
Regulated Electric
 
 
 
 
 
 
Operating revenues (a)
 
$
878.6

 
$
881.9

 
$
849.9

Intersegment revenues
 
0.4

 
0.5

 
0.4

Total operating revenue
 
$
879.0

 
$
882.4

 
$
850.3

Depreciation and amortization
 
97.8

 
88.9

 
81.3

Interest charges and financing costs
 
31.8

 
29.4

 
29.7

Income tax expense
 
28.4

 
38.9

 
40.5

Net income
 
85.5

 
70.9

 
65.0

Regulated Natural Gas
 
 
 
 
 
 
Operating revenues (a)
 
$
141.6

 
$
122.4

 
$
106.2

Intersegment revenues
 
0.4

 
0.3

 
0.5

Total operating revenue
 
$
142.0

 
$
122.7

 
$
106.7

Depreciation and amortization
 
28.1

 
22.1

 
16.8

Interest charges and financing costs
 
3.3

 
2.8

 
2.9

Income tax expense
 
4.5

 
4.0

 
2.4

Net income
 
12.5

 
7.8

 
4.5

All Other
 
 
 
 
 
 
Operating revenues (a)
 
$
1.3

 
$
1.2

 
$
1.1

Depreciation and amortization
 
0.2

 
0.2

 
0.2

Interest charges and financing costs
 
0.1

 

 

Income tax (benefit)
 
(0.6
)
 
1.3

 

Net (loss)
 

 
0.7

 
(0.4
)
 
 
 
 
 
 
 
Consolidated Total
 
 
 
 
 
 
Total operating revenue
 
$
1,022.3

 
$
1,006.3

 
$
958.1

Reconciling eliminations
 
(0.8
)
 
(0.8
)
 
(0.9
)
Consolidated total revenue
 
$
1,021.5

 
$
1,005.5

 
$
957.2

Depreciation and amortization
 
126.1

 
111.2

 
98.3

Interest charges and financing costs
 
35.2

 
32.2

 
32.6

Income tax expense
 
32.3

 
44.2

 
42.9

Net income
 
98.0

 
79.4

 
69.1


(a) 
Operating revenues include $157.9 million, $177.2 million and $170.5 million of intercompany revenue for the years ended Dec. 31, 2018, 2017 and 2016, respectively. See Note 13 for further information.