Business Segments Business Segment (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Segment Reporting Information, by Segment [Table Text Block]



Year Ended December 31	2018			2017			2016
Millions
Depreciation and Amortization
Regulated Operations		$158.0			$132.6			$154.3

Energy Infrastructure and Related Services
ALLETE Clean Energy	24.4			23.4			22.3
U.S. Water Services	10.2			9.8			8.9

Corporate and Other	13.0			11.7			10.3
Total Depreciation and Amortization		$205.6			$177.5			$195.8
Operating Expenses – Other (a)
ALLETE Clean Energy	—			—				$3.3
Corporate and Other	$(2.0)			$(0.7)			(13.6		)
Total Operating Expenses – Other	$(2.0)			$(0.7)			$(10.3)
Interest Expense (b)
Regulated Operations		$60.2			$57.0			$52.1

Energy Infrastructure and Related Services
ALLETE Clean Energy	3.6			4.2			5.8
U.S. Water Services	1.5			1.6			1.7

Corporate and Other	7.3			10.3			14.5

Eliminations	(4.7		)	(5.3		)	(3.8		)
Total Interest Expense		$67.9			$67.8			$70.3
Equity Earnings in ATC
Regulated Operations		$17.5			$22.5			$18.5
Income Tax Expense (Benefit) (c)
Regulated Operations (d)	$(15.5)				$27.2			$5.9

Energy Infrastructure and Related Services
ALLETE Clean Energy	(1.0		)	(14.2		)	8.1
U.S. Water Services	1.0			(7.8		)	1.4

Corporate and Other (d)	—			9.5			4.4
Total Income Tax Expense (Benefit)	$(15.5)			$14.7				$19.8


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


(b)	Includes interest expense resulting from intercompany loan agreements and allocated to certain subsidiaries. The amounts are eliminated in consolidation.

(c)

Income tax expense in 2017 included an income tax benefit of $13.0 million due to the remeasurement of deferred income tax assets and liabilities resulting from the TCJA, which consisted of income tax benefits of $23.6 million for ALLETE Clean Energy and $9.2 million for U.S. Water Services as well as additional income tax expense of $19.8 million for Corporate and Other. The TCJA did not have an impact on income tax expense for our Regulated Operations as the remeasurement of deferred income tax assets and liabilities primarily resulted in the recording of regulatory assets and liabilities. (See Note 1. Operations and Significant Accounting Policies and Note 4. Regulatory Matters.)

(d)

In 2017, Regulated Operations includes $14.0 million of income tax expense related to North Dakota investment tax credits transferred to Corporate and Other and higher pre-tax income for the favorable impact for the regulatory outcome of the MPUC’s modification of its November 2016 order on the allocation of North Dakota investment tax credits. There was no impact to net income for Regulated Operations. Corporate and Other recorded an offsetting income tax benefit of $7.9 million in 2017. In 2016, Regulated Operations includes $15.0 million of income tax benefit for North Dakota investment tax credits transferred from Corporate and Other and lower pre-tax income related to the adverse impact for the regulatory outcome of the November 2016 MPUC order. There was no impact to net income for Regulated Operations. Corporate and Other recorded an offsetting income tax expense of $8.8 million in 2016. (See Note 4. Regulatory Matters.)



As of December 31	2018		2017
Millions
Assets
Regulated Operations	$3,952.5		$3,886.6

Energy Infrastructure and Related Services
ALLETE Clean Energy	606.6		600.5
U.S. Water Services	295.8		292.4

Corporate and Other	310.1		300.5
Total Assets		$5,165.0		$5,080.0
Capital Expenditures
Regulated Operations	$211.9		$177.1

Energy Infrastructure and Related Services
ALLETE Clean Energy	89.7		56.1
U.S. Water Services	5.0		4.4

Corporate and Other	12.0		28.9
Total Capital Expenditures		$318.6		$266.5



Year Ended December 31	2018		2017			2016
Millions
Operating Revenue (a)
Residential		$139.7		$127.4			$127.9
Commercial	147.9		139.8			139.5
Municipal	54.9		57.9			67.6
Industrial	469.5		470.5			416.0
Other Power Suppliers	170.3		161.8			175.1
CIP Financial Incentive	3.0		5.5			7.5
Other	74.2		100.9			67.1
Total Regulated Operations	1,059.5		1,063.8			1,000.7

Energy Infrastructure and Related Services

ALLETE Clean Energy
Long-term PSA	55.2		56.9			58.2
Sale of Wind Energy Facility	81.1		—			—
Other	23.6		23.6			22.3
Total ALLETE Clean Energy	159.9		80.5			80.5

U.S. Water Services
Point-in-time	100.3		95.8			93.9
Contract	38.3		36.2			30.4
Capital Project	33.5		19.8			13.2
Total U.S. Water Services	172.1		151.8			137.5

Corporate and Other
Long-term Contract	85.5		89.3			73.7
Other	21.6		33.9			47.3
Total Corporate and Other	107.1		123.2			121.0
Total Operating Revenue		$1,498.6		$1,419.3			$1,339.7
Net Income (Loss) Attributable to ALLETE (b)(c)
Regulated Operations	$131.0		$128.4			$135.5

Energy Infrastructure and Related Services
ALLETE Clean Energy (d)	33.7		41.5			13.4
U.S. Water Services	3.2		10.7			1.5

Corporate and Other (e)	6.2		(8.4		)	4.9
Total Net Income Attributable to ALLETE	$174.1		$172.2			$155.3


(a)	With the adoption of new revenue recognition guidance, the Company has enhanced the presentation of business segment Operating Revenue. (See Note 1. Operations and Significant Accounting Policies.)

(b) Net income in 2017 included a favorable impact of $13.0 million after-tax due to the remeasurement of deferred income tax assets and liabilities resulting from the TCJA, which consisted of a $23.6 million after-tax benefit for ALLETE Clean Energy, a $9.2 million after-tax benefit for U.S. Water Services and a $19.8 million after-tax expense for Corporate and Other. The TCJA did not have an impact on net income for our Regulated Operations as the remeasurement of deferred income tax assets and liabilities primarily resulted in the recording of regulatory assets and liabilities. (See Note 1. Operations and Significant Accounting Policies and Note 4. Regulatory Matters.)


(c)	Includes interest expense resulting from intercompany loan agreements and allocated to certain subsidiaries. The amounts are eliminated in consolidation.


(d)	Net income in 2018 includes the recognition of profit for the sale of a wind energy facility to Montana-Dakota Utilities.


(e)	Net income in 2017 included a $7.9 million after-tax favorable impact for the regulatory outcome of the MPUC’s modification of tits November 2016 order on the allocation of North Dakota investment tax credits. Net income in 2016 included an $8.8 million after-tax adverse impact for the regulatory outcome of the November 2016 order.