Long-Term Debt and Capital Leases

12 Months Ended

Dec. 31, 2019

Long-term Debt and Lease Obligation [Abstract]



(11) Long-Term Debt and Finance Leases

Long-term debt and finance leases consisted of the following (in thousands):



		December 31,
	Due	2019			2018
Unsecured Debt:
Unsecured Revolving Line of Credit	2021	$	289,000		$	290,000
Unsecured Revolving Line of Credit	2021	—			18,000
Secured Debt:
Mortgage bonds—
South Dakota—5.01%	2025	64,000			64,000
South Dakota—4.15%	2042	30,000			30,000
South Dakota—4.30%	2052	20,000			20,000
South Dakota—4.85%	2043	50,000			50,000
South Dakota—4.22%	2044	30,000			30,000
South Dakota—4.26%	2040	70,000			70,000
South Dakota—2.80%	2026	60,000			60,000
South Dakota—2.66%	2026	45,000			45,000
Montana—5.71%	2039	55,000			55,000
Montana—5.01%	2025	161,000			161,000
Montana—4.15%	2042	60,000			60,000
Montana—4.30%	2052	40,000			40,000
Montana—4.85%	2043	15,000			15,000
Montana—3.99%	2028	35,000			35,000
Montana—4.176%	2044	450,000			450,000
Montana—3.11%	2025	75,000			75,000
Montana—4.11%	2045	125,000			125,000
Montana—4.03%	2047	250,000			250,000
Montana—3.98%	2049	150,000			—
Pollution control obligations—
Montana—2.00%	2023	144,660			144,660
Other Long Term Debt:
New Market Tax Credit Financing—1.146%	2046	26,977			26,977
Discount on Notes and Bonds and Debt Issuance Costs, Net	—	(12,356		)	(12,292		)
		$	2,233,281		$	2,102,345
Less current maturities		—			—
Total Long-Term Debt		$	2,233,281		$	2,102,345

Finance Leases:
Total Finance Leases	Various	$	19,915		$	22,213
Less current maturities		(2,476		)	(2,298		)
Total Long-Term Finance Leases		$	17,439		$	19,915

Secured Debt

First Mortgage Bonds and Pollution Control Obligations

The South Dakota First Mortgage Bonds are a series of general obligation bonds issued under our South Dakota indenture. These bonds are secured by substantially all of our South Dakota and Nebraska electric and natural gas assets.

The Montana First Mortgage Bonds and Montana Pollution Control Obligations are secured by substantially all of our Montana electric and natural gas assets.

In June 2019, we priced $150 million aggregate principal amount of Montana First Mortgage Bonds, at a fixed interest rate of 3.98% maturing in 2049. We issued $50 million of these bonds in June 2019 and the remaining $100 million of these bonds in September 2019 in transactions exempt from the registration requirements of the Securities Act of 1933, as amended. Proceeds were used to repay a portion of our outstanding borrowings under our revolving credit facilities and for other general corporate purposes. The bonds are secured by our electric and natural gas assets in Montana.

As of December 31, 2019, we were in compliance with our financial debt covenants.

Other Long-Term Debt

The New Market Tax Credit (NMTC) financing is pursuant to Section 45D of the Internal Revenue Code of 1986 as amended, which was issued in association with a tax credit program related to the development and construction of a new office building in Butte, Montana. This financing agreement is structured with unrelated third party financial institutions (the Investor) and their wholly-owned community development entities (CDEs) in connection with our participation in qualified transactions under the NMTC program. Upon closing of this transaction in 2014, we entered into two loans totaling $27.0 million payable to the CDEs sponsoring the project, and provided an $18.2 million investment. In exchange for substantially all of the benefits derived from the tax credits, the Investor contributed approximately $8.8 million to the project. The NMTC is subject to recapture for a period of seven years. If the expected tax benefits are delivered without risk of recapture to the Investor and our performance obligation is relieved, we expect $7.9 million of the loan to be forgiven in July 2021. If we do not meet the conditions for loan forgiveness, we would be required to repay $27.0 million and would concurrently receive the return of our $18.2 million investment. As we are the primary beneficiary of the entities created in relation to the NMTC transaction, they have been consolidated as variable interest entities. The loans of $27.0 million are recorded in long-term debt and the investment of $18.2 million is recorded in other noncurrent assets in the Consolidated Balance Sheets.

Maturities of Long-Term Debt

The aggregate minimum principal maturities of long-term debt and finance leases, during the next five years are $2.5 million in 2020, $291.7 million in 2021, $2.9 million in 2022, $147.8 million in 2023 and $3.3 million in 2024.