INTEGRYS ENERGY GROUP, INC. | 2013 | FY | 3


Equity Method Investments

Investments in corporate joint ventures and other companies accounted for under the equity method at December 31, 2013, and 2012 were as follows:
(Millions)
 
2013
 
2012
ATC
 
$
508.4

 
$
476.6

INDU Solar Holdings, LLC
 
24.7

 
27.5

WRPC
 
7.0

 
7.3

Other
 
0.8

 
0.8

Equity method investments
 
$
540.9

 
$
512.2



ATC

Our electric transmission investment segment consists of WPS Investments LLC’s ownership interest in ATC, which was approximately 34% at December 31, 2013. ATC is a for-profit, transmission-only company regulated by FERC.

The following table shows changes to our investment in ATC during the years ended December 31:
(Millions)
 
2013
 
2012
 
2011
Balance at the beginning of period
 
$
476.6

 
$
439.4

 
$
416.3

Add: Earnings from equity method investment
 
89.1

 
85.3

 
79.1

Add: Capital contributions
 
13.7

 
20.4

 
8.5

Less: Dividends received
 
71.0

 
68.5

 
64.5

Balance at the end of period
 
$
508.4

 
$
476.6

 
$
439.4



The regulated electric utilities provide construction and other services to ATC and receive network transmission services from ATC. The related party transactions recorded by the regulated electric utilities during the years ended December 31 were as follows:
(Millions)
 
2013
 
2012
 
2011
Total charges to ATC for services and construction
 
$
11.3

 
$
12.5

 
$
13.5

Total costs for network transmission service provided by ATC
 
104.9

 
100.3

 
102.7



INDU Solar Holdings, LLC

Integrys Solar, LLC, a subsidiary of Integrys Energy Services, owns 50% of INDU Solar Holdings, LLC. INDU Solar Holdings, LLC owns solar energy projects in California, Pennsylvania, New Jersey, Arizona, and Massachusetts that deliver electricity and related products to commercial, government, and utility customers under long-term power purchase agreements.

The following table shows changes to our investment in INDU Solar Holdings, LLC during the years ended December 31:
(Millions)
 
2013
 
2012
 
2011
Balance at the beginning of period
 
$
27.5

 
$
28.4

 
$
0.1

Add: Earnings (loss) from equity method investment
 
1.3

 
1.1

 
(0.7
)
Add: Capital contributions
 

 
7.0

 
29.0

Less: Return of capital to partners
 
4.1

 
9.0

 

Balance at the end of period
 
$
24.7

 
$
27.5

 
$
28.4



WRPC

WPS owns 50% of the stock of WRPC, which operates two hydroelectric plants and an oil-fired combustion turbine. Half of the energy output of the hydroelectric plants is sold to WPS, and the remainder is sold to Wisconsin Power and Light. The electric power from the combustion turbine is sold in equal parts to WPS and Wisconsin Power and Light.

The following table shows changes to our investment in WRPC during the years ended December 31:
(Millions)
 
2013
 
2012
 
2011
Balance at the beginning of period
 
$
7.3

 
$
7.7

 
$
8.1

Add: Earnings from equity method investment
 
1.0

 
0.8

 
0.9

Less: Dividends received
 
1.3

 
1.2

 
1.3

Balance at the end of period
 
$
7.0

 
$
7.3

 
$
7.7



WPS provides services to WRPC, purchases energy from WRPC, and receives net proceeds from sales of energy into the MISO market from WRPC. The related party transactions recorded by WPS during the years ended December 31 were as follows:
(Millions)
 
2013
 
2012
 
2011
Charges to WRPC for operations
 
$
0.9

 
$
0.8

 
$
0.7

Purchases of energy from WRPC
 
3.7

 
5.0

 
4.9

Net proceeds from WRPC sales of energy to MISO
 

 
2.9

 
4.7



Financial Data

Combined financial data of our significant equity method investments, ATC, INDU Solar Holdings, LLC, and WRPC, are included in the tables below:
(Millions)
 
2013
 
2012
 
2011
Income statement data
 
 

 
 

 
 
Revenues
 
$
642.0

 
$
618.3

 
$
575.5

Operating expenses
 
306.2

 
292.1

 
269.6

Other expense
 
83.7

 
85.1

 
81.5

Net income
 
$
252.1

 
$
241.1

 
$
224.4

 
 
 
 
 
 
 
Earnings from equity method investments
 
$
91.4

 
$
87.2

 
$
79.4



(Millions)
 
December 31, 2013
 
December 31, 2012
Balance sheet data
 
 

 
 

Current assets
 
$
90.2

 
$
81.1

Noncurrent assets
 
3,587.2

 
3,347.4

Total assets
 
$
3,677.4

 
$
3,428.5

 
 
 
 
 
Current liabilities
 
$
383.6

 
$
253.0

Long-term debt
 
1,559.1

 
1,559.5

Other noncurrent liabilities
 
134.4

 
103.5

Shareholders’ equity
 
1,600.3

 
1,512.5

Total liabilities and shareholders’ equity
 
$
3,677.4

 
$
3,428.5


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