Dispositions

Holding Company and Other Segment – Sale of Compressed Natural Gas (CNG) Fueling Stations

In November 2014, ITF sold eight CNG fueling stations to AMP Trillium LLC, a joint venture between ITF and AMP Americas LLC. ITF owns 30% and AMP Americas LLC owns 70% of AMP Trillium LLC. The fair value of the CNG fueling stations was $13.0 million. ITF received cash proceeds of $7.2 million, a $2.7 million note receivable from the buyer with a seven-year term, and a $3.1 million equity interest in the joint venture to maintain its ownership interest. In November 2014, we recorded a pre-tax gain of $1.8 million related to the sale of the CNG fueling stations and deferred a gain of $0.8 million that is being recognized over the lives of the stations sold. The pre-tax gain was reported as a component of operating and maintenance expense on the income statement.

In the third quarter of 2014, we early adopted the guidance in FASB ASU 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." Under this guidance, the results of operations of a component of a business that is sold are only accounted for as discontinued operations if the sale represents a shift in strategy that has (or will have) a major effect on the entity's operations and financial results. The sale of the CNG stations did not represent a shift in our strategy. Therefore, the results of operations of the CNG fueling stations prior to the sale remain in continuing operations.

Net property, plant, and equipment of $10.4 million was included with the sale on November 1, 2014, which is net of accumulated depreciation of $0.7 million. Net property, plant, and equipment of $5.3 million were classified as held for sale on the balance sheet at December 31, 2013, which was net of accumulated depreciation of $0.3 million.

Electric Utility Segment – Sale of UPPCO

In August 2014, we sold all of the stock of UPPCO to Balfour Beatty Infrastructure Partners LP for $336.7 million. In the third quarter of 2014, we recorded a pre-tax gain of $85.4 million ($51.2 million after-tax) related to the sale of UPPCO, which was net of transaction costs of $1.1 million. Following the sale, we are providing certain administrative and operational services to UPPCO during a transition period of 18 to 30 months.

The sale of UPPCO was evaluated for accounting purposes prior to our early adoption of ASU 2014-08. UPPCO met the criteria in the accounting guidance to qualify as held for sale but did not meet the requirements to qualify as discontinued operations as WPS has significant continuing cash flows related to certain power purchase transactions with UPPCO that continued after the sale. Therefore, UPPCO's results of operations through the sale date remain in continuing operations.

The following table shows the carrying values of the major classes of assets and liabilities related to UPPCO:



	As of the Closing Date		Held for Sale at
(Millions)	in August 2014		December 31, 2013
Current assets	$	24.3	$	26.5
Property, plant, and equipment, net of accumulated depreciation of $91.3 and $88.9, respectively	194.4		193.8
Other long-term assets	72.8		51.6
Total assets	$	291.5	$	271.9

Current liabilities	$	12.7	$	16.7
Long-term liabilities	28.6		32.4
Total liabilities	$	41.3	$	49.1

In addition to the amounts in the table above, intercompany payables of $1.6 million at December 31, 2013 related to certain power purchase transactions with WPS that continued after the sale were eliminated during consolidation. As of the closing date, these payables were included in the sale and disclosed in the table above as current liabilities.

Holding Company and Other Segment – Winnebago Energy Center

In May 2014, a fire significantly damaged the Winnebago Energy Center, a landfill-gas-to-electric facility that was owned by PDI. Due to uncertainty surrounding the amount of the insurance settlement, we were unable to determine if we would rebuild or abandon the Winnebago Energy Center in the second quarter of 2014. In the third quarter of 2014, we decided to abandon the facility and received proceeds of $6.1 million for both insurance recovery for the damage caused by the fire and from the sale of miscellaneous parts. As a result, we recorded a pre-tax gain of $5.0 million.

In the third quarter of 2014, we early adopted the guidance in FASB ASU 2014-08, as stated previously. Based on this new guidance, the Winnebago Energy Center did not qualify as discontinued operations since it did not represent a shift in our strategy. Therefore, its results of operations prior to the fire remain in continuing operations.

Discontinued Operations

See Note 5, Cash and Cash Equivalents, for cash flow information related to discontinued operations.

Holding Company and Other Segment – Potential Sale of Combined Locks Energy Center (Combined Locks)

We are currently pursuing the sale of Combined Locks, a natural gas-fired co-generation facility located in Wisconsin. Combined Locks had $0.7 million of assets that were classified as held for sale on the balance sheets at December 31, 2014, and December 31, 2013, which included inventories and property, plant, and equipment. We recorded after-tax losses of $0.5 million, $1.3 million, and $0.6 million in 2014, 2013, and 2012, respectively, in discontinued operations related to Combined Locks.

IES Segment – Sale of IES Retail Energy Business

In November 2014, we sold IES's retail energy business to Exelon Generation Company, LLC (Exelon) for $333.0 million. The purchase price is subject to adjustments for working capital. We recorded a pre-tax loss on the sale of $28.8 million ($17.3 million after tax), which included transaction costs of $4.5 million in 2014. Included in these costs is an immaterial amount related to severances. As part of the purchase agreement, we will continue to hold certain guarantees supporting the IES retail energy business for up to six months following the sale. Exelon is obligated under the purchase agreement to replace these guarantees with its own credit support for the IES retail energy business. See Note 22, Guarantees, for more information. Following the sale, we are providing certain administrative and operational services to Exelon during a transition period of up to 15 months.

The retail energy business consisted of mostly financial assets and liabilities; therefore, it did not qualify as held for sale under the applicable accounting guidance. In the third quarter of 2014, we early adopted the guidance in FASB ASU 2014-08, as stated previously. The sale of the retail energy business is a result of a previously announced shift in our strategy to focus on our regulated businesses. Therefore, its results of operations were classified as discontinued operations beginning in the fourth quarter of 2014.

The following table shows the carrying values of the major classes of assets and liabilities included in the sale:



	As of the Closing Date in
(Millions)	November 2014		December 31, 2013
Cash and cash equivalents	$	7.6	$	5.5
Accounts receivable and accrued unbilled revenues, net of reserves of $1.8 and $1.7, respectively	293.8		390.9
Inventories	52.4		34.2
Current assets from risk management activities	234.8		229.5
Prepaid taxes	—		2.5
Other current assets	75.1		41.5
Property, plant, and equipment, net of accumulated depreciation of $16.6 and $15.6, respectively	4.5		5.2
Long-term assets from risk management activities	106.9		73.4
Goodwill	—		6.7
Other long-term assets	25.5		26.0
Total assets	$	800.6	$	815.4

Accounts payable	$	186.9	$	202.9
Current liabilities from risk management activities	169.7		160.6
Accrued taxes	0.2		2.0
Other current liabilities	6.7		13.1
Long-term liabilities from risk management activities	79.5		61.9
Other long-term liabilities	0.3		7.0
Total liabilities	$	443.3	$	447.5

Included in the sale were commodity contracts that did not meet the GAAP definition of derivative instruments and, therefore, were not reflected on the balance sheets. In accordance with GAAP, expected gains or losses related to nonderivative commodity contracts are not recognized until the contracts are settled.

The following table shows the components of discontinued operations related to the sale of the IES retail energy business recorded on the income statements:



(Millions)	2014			2013			2012
Revenues	$	2,587.1		$	2,150.9		$	1,201.0
Cost of sales	(2,444.7		)	(1,910.7		)	(1,018.9		)
Operating and maintenance expense	(91.5		)	(105.6		)	(88.3		)
Depreciation and amortization expense	(2.7		)	(3.2		)	(3.4		)
Taxes other than income taxes	(4.9		)	(3.2		)	(2.4		)
Goodwill impairment loss	(6.7		)	—			—
Loss on sale of IES retail energy business	(28.8		)	—			—
Miscellaneous income	0.6			7.9			0.3
Interest expense	(0.7		)	(0.8		)	(1.3		)
Income before taxes	7.7			135.3			87.0
Provision for income taxes *	(7.3		)	(52.8		)	(31.9		)
Discontinued operations, net of tax	$	0.4		$	82.5		$	55.1


*	See Note 16, Income Taxes, for more information.

The June 2014 announcement of the potential sale triggered an interim goodwill impairment test. Based on the results of the interim goodwill impairment analysis, IES recorded a non-cash goodwill impairment loss in the second quarter of 2014. This goodwill impairment loss reflected the offers received for IES's retail energy business.

Holding Company and Other Segment – Sale of WPS Beaver Falls Generation, LLC (Beaver Falls) and WPS Syracuse Generation, LLC (Syracuse)

In March 2013, WPS Empire State, Inc. sold all of the membership interests of Beaver Falls and Syracuse, both of which owned natural gas-fired generation plants located in the state of New York. We recorded a pre-tax impairment loss of $1.1 million ($0.7 million after tax) related to Beaver Falls and Syracuse during 2012 when the assets and liabilities were classified as held for sale. This impairment loss is reflected in operating and maintenance expense in the table below. The sale agreement included a potential annual payment to us for a four-year period following the sale based on a certain level of earnings achieved by the buyer (an earn-out). In September 2014, we entered into an agreement to receive $2.0 million in settlement of this earn-out agreement, which is presented in operating and maintenance expense in the table below.

The following table shows the components of discontinued operations related to Beaver Falls and Syracuse recorded on the income statements:



(Millions)	2014			2013				2012
Revenues	$	—		$	1.2			$	0.6
Cost of sales	—			(0.9		)		(2.0		)
Operating and maintenance expense	2.0			0.4			*	(3.5		)
Depreciation and amortization expense	—			—				(0.6		)
Taxes other than income taxes	—			(0.3		)		(1.4		)
Miscellaneous income	—			—				0.3
Income (loss) before taxes	2.0			0.4				(6.6		)
(Provision) benefit for income taxes	(0.8		)	(0.2		)		2.6
Discontinued operations, net of tax	$	1.2		$	0.2			$	(4.0	)


*	Includes a $1.0 million gain on sale at closing.

Holding Company and Other Segment – Uncertain Tax Positions

In 2014, we recorded a $0.7 million after-tax gain at the holding company and other segment when we remeasured an uncertain tax position included in our liability for unrecognized tax benefits due to a lapse in the statute of limitations. During 2013 and 2012, we recorded a $5.9 million after-tax gain and a $1.8 million after-tax gain, respectively, in discontinued operations at the holding company and other segment. We remeasured uncertain tax positions included in our liability for unrecognized tax benefits after effectively settling certain state income tax examinations. We reduced the provision for income taxes related to these remeasurements.

Holding Company and Other Segment – Sale of WPS Westwood Generation, LLC (Westwood)

In November 2012, Sunbury Holdings, LLC, a subsidiary of IES, sold all of the membership interests of Westwood, a waste coal generation plant located in Pennsylvania. We recorded a pre-tax impairment loss of $8.4 million ($5.0 million after tax) related to Westwood during the third quarter of 2012 when the assets and liabilities were classified as held for sale. This impairment loss is reflected in operating and maintenance expense in the table below.

The following table shows the components of discontinued operations related to Westwood recorded on the income statements:



(Millions)	2012
Revenues	$	9.2
Cost of sales	(4.4		)
Operating and maintenance expense	(14.3		)	*
Depreciation and amortization expense	(1.0		)
Taxes other than income taxes	(0.2		)
Interest expense	(0.7		)
Loss before taxes	(11.4		)
Benefit for income taxes	4.5
Discontinued operations, net of tax	$	(6.9	)


*	Includes a $0.6 million loss on sale at closing.