Operations and Significant Accounting Policies (Tables)



Cash, Cash Equivalents and Restricted Cash	September 30, 2019		December 31, 2018		September 30, 2018		December 31, 2017
Millions
Cash and Cash Equivalents		$100.3		$69.1		$128.0		$98.9
Restricted Cash included in Prepayments and Other	3.4		1.3		4.8		2.6
Restricted Cash included in Other Non-Current Assets	31.5		8.6		8.7		8.6
Cash, Cash Equivalents and Restricted Cash on the Consolidated Statement of Cash Flows		$135.2		$79.0		$141.5		$110.1



Inventories – Net	September 30, 2019		December 31, 2018
Millions
Fuel (a)		$37.8		$26.0
Materials and Supplies	46.8		44.2
Raw Materials (b)	—		2.8
Work in Progress (b)	—		6.1
Finished Goods (b)	—		8.4
Reserve for Obsolescence (b)	—		(0.8		)
Total Inventories – Net		$84.6		$86.7

Fuel consists primarily of coal inventory at Minnesota Power.

On March 26, 2019, ALLETE completed the sale of U.S. Water Services which resulted in the removal of the related inventory items from the Consolidated Balance Sheet.



Other Non-Current Assets	September 30, 2019		December 31, 2018
Millions
Contract Assets (a)		$28.6		$30.7
Finance Receivable (b)	—		10.4
Operating Lease Right-of-use Assets (c)	30.4		—
ALLETE Properties	22.4		24.4
Other	110.2		86.9
Total Other Non-Current Assets		$191.6		$152.4

Contract Assets consist of payments made to customers as an incentive to execute or extend service agreements. The contract payments are being amortized over the term of the respective agreements as a reduction to revenue.

Finance Receivable related to the 2016 sale of Ormond Crossings and Lake Swamp, which was collected in the second quarter of 2019.



Other Current Liabilities	September 30, 2019		December 31, 2018
Millions
Provision for Interim Rate Refund (a)	—			$40.0
PSAs		$12.3	12.6
Contract Liabilities (b)	—		7.6
Provision for Tax Reform Refund (c)	0.3		10.7
Contingent Consideration (d)	—		3.8
Operating Lease Liabilities (e)	7.1		—
Other	39.0		53.8
Total Other Current Liabilities		$58.7		$128.5

Provision for Interim Rate Refund was refunded to Minnesota Power’s retail customers in the second quarter of 2019.

Contract Liabilities consisted of deposits received as a result of entering into contracts with customers prior to completing performance obligations.

Provision for Tax Reform Refund related to the income tax benefits of the TCJA in 2018 was refunded to Minnesota Power customers in the first quarter of 2019 and will be refunded to SWL&P customers in 2019 and 2020.

Contingent Consideration related to the earnings-based payment resulting from the U.S. Water Services acquisition was paid in the first quarter of 2019.



Other Non-Current Liabilities	September 30, 2019		December 31, 2018
Millions
Asset Retirement Obligation		$157.4		$138.6
PSAs	67.7		76.9
Operating Lease Liabilities (a)	23.3		—
Other	44.7		47.1
Total Other Non-Current Liabilities		$293.1		$262.6

Supplemental Statement of Cash Flows Information.



Nine Months Ended September 30,	2019		2018
Millions
Cash Paid for Interest – Net of Amounts Capitalized		$53.5		$52.9
Recognition of Right-of-use Assets and Lease Liabilities (a)	$30.4		—
Noncash Investing and Financing Activities
Increase (Decrease) in Accounts Payable for Capital Additions to Property, Plant and Equipment	$6.3		$(14.4)
Reclassification of Property, Plant and Equipment to Inventory (b)	—			$46.3
Capitalized Asset Retirement Costs		$16.6		$15.4
AFUDC–Equity		$1.9		$0.9

In February 2018, Montana-Dakota Utilities exercised its option to purchase the Thunder Spirit II wind energy facility upon completion, resulting in a reclassification from Property, Plant and Equipment – Net to Inventories – Net for project costs incurred in the prior year.

Additional information on the components of lease cost and presentation of cash flows were as follows:



	Quarter Ended		Nine Months Ended
	September 30,		September 30,
	2019		2019
Millions
Operating Lease Cost		$2.0		$6.7

Other Information:
Operating Cash Flows From Operating Leases		$2.0		$6.7

Additional information related to leases was as follows:



	September 30,
	2019
Millions
Balance Sheet Information Related to Leases:
Other Non-Current Assets		$30.4
Total Operating Lease Right-of-use Assets		$30.4

Other Current Liabilities		$7.1
Other Non-Current Liabilities	23.3
Total Operating Lease Liabilities		$30.4

Weighted Average Remaining Lease Term (Years):
Operating Leases - Vehicles and Equipment	4
Operating Leases - Land and Other	28

Weighted Average Discount Rate:
Operating Leases - Vehicles and Equipment	3.7		%
Operating Leases - Land and Other	4.1		%

Maturities of lease liabilities were as follows:



	September 30, 2019
Millions
2019		$2.2
2020	7.9
2021	6.1
2022	4.9
2023	3.1
Thereafter	9.4
Total Lease Payments Due	33.6
Less: Imputed Interest	3.2
Total Lease Obligations	30.4
Less: Current Lease Obligations	7.1
Long-term Lease Obligations		$23.3