Segments and Related Information

12 Months Ended

Dec. 31, 2019

-Minnesota 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-Minnesota has the following reportable segments:

•

Regulated Electric — The regulated electric utility segment generates electricity which is transmitted and distributed in Minnesota, North Dakota and South Dakota. In addition, this segment includes sales for resale and provides wholesale transmission service to various entities in the United States. The regulated electric utility segment also includes NSP-Minnesota’s wholesale commodity and trading operations; and


•	Regulated Natural Gas — The regulated natural gas utility segment transports, stores and distributes natural gas in portions of Minnesota and North Dakota.

NSP-Minnesota presents Other, which includes operating segments, with revenues below the necessary quantitative thresholds. Those operating segments primarily include appliance repair services, non-utility real estate activities and revenues associated with processing solid waste into refuse-derived fuel.

Asset and capital expenditure information is not provided for NSP-Minnesota’s reportable segments because as an integrated electric and natural gas utility, NSP-Minnesota 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-Minnesota’s segment information is as follows:



(Millions of Dollars)	2019			2018			2017
Regulated Electric
Operating revenues^(a)	$	4,506.6		$	4,508.0		$	4,541.7
Intersegment revenues	0.6			0.8			0.6
Total operating revenue	$	4,507.2		$	4,508.8		$	4,542.3
Depreciation and amortization	742.1			697.8			661.3
Interest charges and financing costs	205.3			199.5			199.8
Income tax expense	36.1			16.4			179.9
Net income	491.0			450.4			462.5
Regulated Natural Gas
Operating revenues^(a)	$	571.3		$	583.1		$	531.9
Intersegment revenues	0.8			0.5			0.5
Total operating revenue	$	572.1		$	583.6		$	532.4
Depreciation and amortization	48.8			43.3			38.7
Interest charges and financing costs	15.6			14.8			13.5
Income tax expense	12.4			10.2			10.0
Net income	40.0			34.2			28.4
Other
Operating revenues^(a)	$	33.9		$	30.8		$	28.4
Depreciation and amortization	0.4			0.5			0.6
Interest charges and financing costs	—			—			—
Income tax expense	(1.1		)	0.6			9.8
Net income (loss)	11.6			7.7			(0.8		)

Consolidated Total
Total operating revenue ^(a)	$	5,113.2		$	5,123.2		$	5,103.1
Reconciling eliminations	(1.4		)	(1.3		)	(1.1		)
Consolidated total revenue	$	5,111.8		$	5,121.9		$	5,102.0
Depreciation and amortization	791.3			741.6			700.6
Interest charges and financing costs	220.9			214.3			213.3
Income tax expense	47.4			27.2			199.7
Net income	542.6			492.3			490.1

^(a)

Operating revenues include $457.4 million, $473.7 million, and $490.2 million of intercompany revenue for the years ended Dec. 31, 2019, 2018 and 2017, respectively. See Note 13 for further information.