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Operations and Significant Accounting Policies | 6 Months Ended
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Jun. 30, 2015
Operations and Significant Accounting Policies [Abstract] |
Operations and Significant Accounting Policies [Text Block] | OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES Reclassifications. As a result of recent acquisitions, certain financial statement captions have been added and as a result we have reclassified certain prior-period amounts on our Consolidated Balance Sheet, Consolidated Statement of Income, and Consolidated Statement of Cash Flows to conform to the presentation for the current period. Consolidated Balance Sheet. In conformity with the current presentation of Goodwill and Intangible Assets - Net on the Consolidated Balance Sheet, we have reclassified our December 31, 2014, Consolidated Balance Sheet to include $1.6 million and $3.2 million of goodwill and intangible assets previously disclosed in Property, Plant and Equipment - Net and Other Non-Current Assets, respectively, under Goodwill and Intangible Assets - Net. There was no impact to Total Assets as a result of the reclassification. Consolidated Statement of Income. In conformity with the current presentation of Cost of Sales on the Consolidated Statement of Income, we have reclassified $18.9 million from Operating and Maintenance Expenses to Cost of Sales for the quarter ended June 30, 2014 and $42.4 million for the six months ended June 30, 2014. Cost of Sales includes purchased gas at SWL&P, expenses incurred to deliver coal at BNI Coal, and the cost of land and other sales at ALLETE Properties. Cost of Sales also includes costs associated with the manufacture and delivery of inventories at U.S. Water Services, our integrated water management company which was acquired on February 10, 2015. (See Note 4. Acquisitions.) In addition to the presentation of Cost of Sales, we have created new captions on the Consolidated Statement of Income to provide additional detail for Transmission Services and Taxes Other than Income Taxes. Transmission Services are MISO-related costs incurred for the transmission of electricity. In conformity with the current presentation, we have reclassified from Operating and Maintenance Expenses $10.5 million of Transmission Services and $11.3 million of Taxes Other than Income Taxes for the quarter ended June 30, 2014, and $21.3 million of Transmission Services and $22.5 million of Taxes Other than Income Taxes for the six months ended June 30, 2014. There was no impact to Operating Income, Net Income, or Net Income Attributable to ALLETE as a result of these reclassifications. Consolidated Statement of Cash Flows. In conformity with the current presentation of the Amortization of Power Purchase Agreements on the Consolidated Statement of Cash Flows, we have reclassified $5.6 million from Changes in Regulatory and Other Non-Current Liabilities to Amortization of Power Purchase Agreements for the six months ended June 30, 2014. There was no impact on cash from (for) Operating Activities, Investing Activities, and Financing Activities as a result of the reclassifications. NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) Inventories. Inventories are stated at the lower of cost or market. Amounts removed from inventories in our Regulated Operations segment are recorded on an average cost basis. Amounts removed from inventories in our Investments and Other segment are recorded on an average cost, first-in, first-out or specific identification basis.
Inventories | June 30, 2015 |  |  | December 31, 2014 |
Millions |  |  |
Regulated Operations |  |  |
Fuel |  | $43.7 |  |  |  | $29.0 |
Materials and Supplies | 34.2 |  |  | 35.2 |
Total Regulated Operations | 77.9 |  |  | 64.2 |
Investments and Other (a) |  |  |
Materials and Supplies | 16.6 |  |  | 16.3 |
Raw Materials | 2.9 |  |  | — |
Work in Progress | 1.5 |  |  | — |
Finished Goods | 9.1 |  |  | — |
Reserve for Obsolescence | (0.2 | ) |  | — |
Total Investments and Other | 29.9 |  |  | 16.3 |
Total Inventories |  | $107.8 |  |  |  | $80.5 |
(a) | Raw Materials, Work in Progress, Finished Goods, and Reserve for Obsolescence presented relate to U.S. Water Services which was acquired on February 10, 2015.
Prepayments and Other Current Assets | June 30, 2015 |  |  | December 31, 2014 |
Millions |  |  |
Deferred Fuel Adjustment Clause |  | $11.8 |  |  |  | $16.3 |
Construction Costs for Development Project (a) | — |  |  | 48.2 |
Restricted Cash (b) | 7.7 |  |  | 2.7 |
Other | 17.0 |  |  | 14.8 |
Total Prepayments and Other Current Assets |  | $36.5 |  |  |  | $82.0 |
(a) | Construction Costs for Development Project relate to ALLETE Clean Energy’s acquisition in November 2014 of a project to develop and construct a wind energy facility in 2015. As of June 30, 2015, these costs have been netted with contract billings. (See Billings in Excess of Costs and Estimated Earnings in Other Current Liabilities table and Note 4. Acquisitions.)
(b) | Restricted Cash related to ALLETE Clean Energy’s wind energy facilities operating expense and capital distribution reserve requirements and cash pledged as collateral by U.S. Water Services for stand-by letters of credit.
Goodwill and Intangible Assets. Goodwill. Goodwill is the excess of the purchase price (consideration transferred) over the estimated fair value of net assets of acquired businesses. In accordance with GAAP, goodwill is not amortized. The Company assesses whether there has been an impairment of goodwill annually in the third quarter and whenever an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at the reporting unit level. An impairment loss is recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The estimated fair value is generally determined using a discounted cash flow analysis. NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) Intangible Assets. Intangible assets include customer relationships, patents, non-compete agreements and trademarks and trade names. Intangible assets with definite lives consist of customer relationships, patents and non-compete agreements, which are amortized on a straight-line or accelerated basis with estimated useful lives ranging from less than 1 year to approximately 23 years. We review definite-lived intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Indefinite-lived intangible assets consist of trademarks and trade names, which are tested for impairment annually in the third quarter and whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired. Impairment is calculated as the excess of the asset’s carrying amount over its fair value. Fair value is generally determined using a discounted cash flow analysis. Other Non-Current Assets. Restricted Cash. Included in Other Non-Current Assets on the Consolidated Balance Sheet was restricted cash of $20.3 million and $5.3 million as of June 30, 2015 and December 31, 2014, respectively. Restricted cash as of June 30, 2015 consisted of $15.0 million of cash held in escrow pending the closing of the Armenia Mountain wind energy facility acquisition, which occurred on July 1, 2015 (see Note 4. Acquisitions) and $5.3 million related to ALLETE Clean Energy’s wind energy facilities debt service and other requirements. Restricted cash as of December 31, 2014 related primarily to ALLETE Clean Energy’s wind energy facilities debt service and other requirements.
Other Current Liabilities | June 30, 2015 |  |  | December 31, 2014 |
Millions |  |  |
Customer Deposits |  | $18.5 |  |  |  | $19.7 |
Power Purchase Agreements (a) | 24.3 |  |  | 19.4 |
Construction Deposits Received for Development Project (b) | — |  |  | 54.3 |
Billings in Excess of Costs and Estimated Earnings (c) | 54.4 |  |  | — |
Other | 38.4 |  |  | 27.4 |
Total Other Current Liabilities |  | $135.6 |  |  |  | $120.8 |
(a) | Power Purchase Agreements were acquired in conjunction with ALLETE Clean Energy’s wind energy facilities acquisitions. (See Note 4. Acquisitions.)
(b) | Construction Deposits Received for Development Project relate to ALLETE Clean Energy’s project to develop and construct a wind energy facility in 2015. As of June 30, 2015, these deposits have been netted with contract costs and estimated gross profit. (See Billings in Excess of Costs and Estimated Earnings below and Note 4. Acquisitions.)
(c) | Billings in Excess of Costs and Estimated Earnings represents the excess of contract billings over the construction costs incurred and estimated earnings recognized. In the second quarter of 2015, the NDPSC approved the sale agreement ALLETE Clean Energy has with Montana-Dakota Utilities to develop, construct, and sell a wind energy facility in 2015. (See Note 4. Acquisitions.)
Other Non-Current Liabilities | June 30, 2015 |  |  | December 31, 2014 |
Millions |  |  |
Asset Retirement Obligation |  | $122.4 |  |  |  | $109.2 |
Power Purchase Agreements (a) | 149.5 |  |  | 110.7 |
Contingent Consideration (b) | 36.8 |  |  | — |
Other | 45.2 |  |  | 45.1 |
Total Other Non-Current Liabilities |  | $353.9 |  |  |  | $265.0 |
(a) | Power Purchase Agreements were acquired in conjunction with ALLETE Clean Energy’s wind energy facilities acquisitions. (See Note 4. Acquisitions.)
(b) | Contingent Consideration relates to the estimated fair value of the earnings-based payment resulting from the U.S. Water Services acquisition. (See Note 4. Acquisitions and Note 7. Fair Value.)
NOTE 1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) Supplemental Statement of Cash Flows Information.
Six Months Ended June 30, | 2015 |  |  | 2014 |
Millions |  |  |
Cash Paid During the Period for Interest – Net of Amounts Capitalized |  | $30.0 |  |  |  | $23.7 |
Cash Paid During the Period for Income Taxes |  | $1.0 |  |  |  | $0.2 |
Noncash Investing and Financing Activities |  |  |  |  |
Increase (Decrease) in Accounts Payable for Capital Additions to Property, Plant and Equipment | $(25.5) |  | $3.6
Capitalized Asset Retirement Costs |  | $7.8 |  |  |  | $0.6 |
AFUDC–Equity |  | $1.6 |  |  |  | $3.8 |
ALLETE Common Stock Contributed to the Pension Plan | — |  |  |  | $19.5 |
Contingent Consideration |  | $35.7 |  |  | — |
Subsequent Events. The Company performed an evaluation of subsequent events for potential recognition and disclosure through the time of the financial statements issuance. New Accounting Standards. Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. In April 2014, the FASB issued an accounting standard update modifying the criteria for determining which disposals should be presented as discontinued operations and modifying the related disclosure requirements. Additionally, the new guidance requires that a business which qualifies as held for sale upon acquisition should be reported as discontinued operations. The new guidance was effective beginning in the first quarter of 2015, and applies prospectively to new disposals and new classifications of disposal groups as held for sale. This guidance is not expected to have a material impact on our Consolidated Financial Statements. We will consider the requirements of this standard if future transactions arise. Revenue from Contracts with Customers. In May 2014, the FASB issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required regarding customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This accounting guidance was to have been effective for the Company beginning in the first quarter of 2017 using one of two prescribed retrospective methods. On July 9, 2015, the FASB decided to defer the effective date of the standard by one year which will make the guidance effective for the Company beginning in the first quarter of 2018. Early adoption is permitted beginning in the first quarter of 2017 for public companies. The Company is evaluating the impact of the amended revenue recognition guidance on the Company’s Consolidated Financial Statements. Presentation of Debt Issuance Costs. In April 2015, the FASB issued revised guidance addressing the presentation requirements for debt issuance costs. Under the revised guidance, all costs incurred to issue debt are to be presented on the Consolidated Balance Sheet as a direct deduction from the carrying amount of that debt liability. The revised guidance is effective for interim and annual reporting periods beginning after December 15, 2015. Debt issuance costs represent less than 1 percent of total long-term debt.

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