Segments and Related Information

12 Months Ended

Dec. 31, 2019

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; and


•	Regulated Natural Gas — The regulated natural gas utility segment purchases, transports, stores and distributes natural gas in portions of Wisconsin and Michigan.

NSP-Wisconsin presents Other, which includes operating segments, with revenues below the necessary quantitative thresholds. Those operating segments 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)	2019			2018			2017
Regulated Electric
Operating revenues^(a)	$	844.1		$	878.6		$	881.9
Intersegment revenues	0.3			0.4			0.5
Total operating revenue	$	844.4		$	879.0		$	882.4
Depreciation and amortization	108.4			97.8			88.9
Interest charges and financing costs	34.2			31.8			29.4
Income tax expense	12.5			28.4			38.9
Net income	68.5			85.5			70.9
Regulated Natural Gas
Operating revenues^(a)	$	136.4		$	141.6		$	122.4
Intersegment revenues	0.4			0.4			0.3
Total operating revenue	$	136.8		$	142.0		$	122.7
Depreciation and amortization	29.0			28.1			22.1
Interest charges and financing costs	3.9			3.3			2.8
Income tax expense	2.2			4.5			4.0
Net income	9.9			12.5			7.8
Other
Operating revenues^(a)	$	0.4		$	1.3		$	1.2
Depreciation and amortization	0.1			0.2			0.2
Interest charges and financing costs	—			0.1			—
Income tax expense (benefit)	1.0			(0.6		)	1.3
Net income	0.5			—			0.7

Consolidated Total
Total operating revenue ^(a)	$	981.6		$	1,022.3		$	1,006.3
Reconciling eliminations	(0.7		)	(0.8		)	(0.8		)
Consolidated total revenue	$	980.9		$	1,021.5		$	1,005.5
Depreciation and amortization	137.5			126.1			111.2
Interest charges and financing costs	38.1			35.2			32.2
Income tax expense	15.7			32.3			44.2
Net income	78.9			98.0			79.4

^(a)

Operating revenues include $176.6 million, $157.9 million and $177.2 million of intercompany revenue for the years ended Dec. 31, 2019, 2018 and 2017, respectively. See Note 13 for further information.