Company projects year-end earnings to be in
the upper half of its guidance range
ALLETE, Inc. (NYSE:ALE) today reported third quarter 2014
earnings of 97 cents per share on net income of $41.6 million and
revenue of $288.9 million, compared to earnings of 63 cents, net
income of $25.2 million and revenue of $251 million in the third
quarter a year ago.
Compared with a year ago, earnings increased due to cost
recovery revenue related to a major wind energy expansion and an
environmental retrofit to Minnesota Power’s largest electric
generating unit, and the recognition of a conservation improvement
incentive. An $8.7 million state Conservation Improvement Program
(CIP) financial incentive was approved by the Minnesota Public
Utilities Commission and recognized in the third quarter of 2014.
In 2013 the CIP financial incentive amounted to $7.1 million and
was recognized upon Commission approval in the fourth quarter of
2013.
“These strong financial results are a direct result of our
capital investments in renewable energy, environmental improvements
and conservation,” said ALLETE Chairman, President and Chief
Executive Officer Alan R. Hodnik. “Our Bison Wind Energy expansion
in North Dakota and the Boswell Energy Center retrofit now underway
make up a significant share of an annual capital expenditure budget
that’s the largest in our company’s history.”
Quarterly revenue for the Regulated Operations segment
rose by $29.4 million due to higher cost recovery revenue, the CIP
financial incentive, and higher electricity sales. Electric sales
increased almost five percent in the quarter compared to last year,
with sales to industrial customers increasing by about one percent.
Sales to other power suppliers increased over 37 percent compared
to last year, reflecting Minnesota Power selling a portion of its
output from the Square Butte plant to Minnkota Power. Partially
offsetting the higher revenue were higher operating expenses. Net
income for the segment increased $16.6 million from the same period
in 2013.
The Investments and Other segment includes solid
financial performance from ALLETE Clean Energy, which acquired
three wind farms earlier this year. The third quarter of 2013
included gains on sales of securities.
Quarterly earnings were diluted by seven cents per share due to
the increased issuance of common shares needed to fund major
capital improvements.
Hodnik said the company now expects its year-end 2014 earnings
to be in the upper half of its stated guidance range of $2.75 to
$2.95. He noted that the earnings guidance excludes 3 cents per
share of costs recorded in the first quarter related to the ALLETE
Clean Energy acquisition, and a second quarter non-recurring 6
cents per share charge associated with an EPA settlement.
ALLETE will host a conference call and webcast at 10 a.m.
Eastern Time this morning to discuss details of its quarterly
financial performance. Interested parties may listen live by
calling (877) 303-5852, or by accessing the webcast at
www.allete.com. A replay of the call will be available through
November 5, 2014 by calling (855) 859-2056, pass code 16959429.
ALLETE is an energy company headquartered in Duluth, Minn. In
addition to its electric utilities, Minnesota Power and Superior
Water, Light and Power of Wisconsin, ALLETE owns BNI Coal in
Center, N.D., ALLETE Clean Energy, based in Duluth, and has an
eight percent equity interest in the American Transmission Co. More
information about ALLETE is available at www.allete.com.
The statements contained in this release and statements that
ALLETE may make orally in connection with this release that are not
historical facts, are forward-looking statements. Actual results
may differ materially from those projected in the forward-looking
statements. These forward-looking statements involve risks and
uncertainties and investors are directed to the risks discussed in
documents filed by ALLETE with the Securities and Exchange
Commission.
ALLETE's press releases and other communications may include
certain non-Generally Accepted Accounting Principles (GAAP)
financial measures. A "non-GAAP financial measure" is defined as a
numerical measure of a company's financial performance, financial
position or cash flows that excludes (or includes) amounts that are
included in (or excluded from) the most directly comparable measure
calculated and presented in accordance with GAAP in the company's
financial statements.
Non-GAAP financial measures utilized by the Company include
presentations of earnings (loss) per share. ALLETE's management
believes that these non-GAAP financial measures provide useful
information to investors by removing the effect of variances in
GAAP reported results of operations that are not indicative of
changes in the fundamental earnings power of the Company's
operations. Management believes that the presentation of the
non-GAAP financial measures is appropriate and enables investors
and analysts to more accurately compare the company's ongoing
financial performance over the periods presented.
ALLETE, Inc. Consolidated Statement of Income
Millions Except Per Share Amounts -
Unaudited
Quarter Ended Nine
Months Ended September 30, September 30,
2014 2013
2014 2013
Operating Revenue $ 288.9
$ 251.0 $ 846.1 $ 750.4
Operating Expenses Fuel and Purchased Power
88.9 80.5 268.7 245.7 Operating and Maintenance 105.7 102.7 340.6
311.2 Depreciation 33.5
29.4 99.5
86.3 Total Operating Expenses 228.1 212.6 708.8 643.2
Operating Income 60.8
38.4 137.3
107.2
Other Income
(Expense) Interest Expense (13.2 ) (12.7 ) (39.5 ) (37.8 )
Equity Earnings in ATC 5.3 4.9 15.6 15.1 Other
2.1 3.3 6.0
7.5 Total Other Expense
(5.8 ) (4.5 )
(17.9 ) (15.2 )
Income Before
Non-Controlling Interest and Income Taxes 55.0 33.9 119.4 92.0
Income Tax Expense 13.4
8.7 27.1
20.3
Net Income
41.6 25.2
92.3 71.7 Less: Non-Controlling
Interest in Subsidiaries —
— 0.4
—
Net Income Attributable to ALLETE
$ 41.6 $ 25.2
$ 91.9 $ 71.7
Average
Shares of Common Stock Basic 42.9 39.8 42.1 39.4 Diluted
42.9 39.9
42.3 39.5
Basic Earnings Per Share of Common Stock $ 0.97 $ 0.63 $
2.18 $ 1.82
Diluted Earnings Per Share of Common Stock $
0.97 $ 0.63 $ 2.17 $ 1.81
Dividends Per Share of Common
Stock $ 0.49 $ 0.475
$ 1.47 $ 1.425
Consolidated Balance Sheet
Millions - Unaudited
Sept. 30, Dec. 31,
Sept. 30, Dec.
31, 2014 2013
2014
2013 Assets Liabilities and Shareholders’
Equity Cash and Cash Equivalents $ 150.5 $ 97.3 Current
Liabilities $ 286.8 $ 230.2 Other Current Assets 206.4 209.7
Long-Term Debt 1,289.2 1,083.0 Property, Plant and Equipment - Net
3,121.5 2,576.5 Deferred Income Taxes 509.7 479.1 Regulatory Assets
278.0 263.8 Regulatory Liabilities 103.1 81.0 Investment in ATC
120.7 114.6
Defined Benefit Pension & Other
Postretirement Benefit Plans
116.8 133.4 Other Investments 116.4 146.3 Other Non-Current
Liabilities 231.6 127.2 Other Non-Current Assets
74.4 68.6 Shareholders’
Equity 1,530.7 1,342.9
Total Assets $ 4,067.9 $ 3,476.8
Total Liabilities and Shareholders’ Equity
$ 4,067.9 $ 3,476.8
Quarter Ended Nine Months Ended
ALLETE, Inc. September 30, September 30,
Income (Loss) 2014
2013 2014 2013
Millions Regulated Operations $ 41.2 $
24.6 $ 92.6 $ 73.0 Investments and Other 0.4
0.6 (0.7 )
(1.3 ) Net Income Attributable to ALLETE $
41.6 $ 25.2 $ 91.9
$ 71.7
Diluted Earnings Per Share $
0.97 $ 0.63 $ 2.17
$ 1.81
Statistical Data
Corporate Common Stock High $ 51.56 $ 54.14 $ 52.73 $ 54.14 Low $
44.39 $ 45.78 $ 44.39 $ 41.39 Close $ 44.39 $ 48.30 $ 44.39 $ 48.30
Book Value $ 34.37 $ 31.60 $ 34.37 $ 31.60
Kilowatt-hours
Sold
Millions Regulated Utility Retail and
Municipals Residential 244 259 891 864 Commercial 369 379 1,097
1,091 Municipals 203 242 643 741 Industrial
1,911 1,894 5,515
5,508 Total Retail and Municipal 2,727
2,774 8,146 8,204 Other Power Suppliers 751
547 2,082
1,748 Total Regulated Utility 3,478 3,321
10,228 9,952 Non-regulated Energy Operations
28 26 92
90 Total Kilowatt-hours Sold
3,506 3,347 10,320
10,042
Regulated
Utility Revenue
Millions Regulated
Utility Revenue Retail and Municipals Residential $ 26.4 $ 26.1 $
92.4 $ 86.0 Commercial 34.9 33.4 100.8 95.9 Municipals 14.6 17.7
45.6 50.0 Industrial 117.8
107.8 337.7
317.9 Total Retail and Municipals 193.7 185.0 576.5 549.8
Other Power Suppliers 31.2 21.1 84.9 65.8 Other
30.9 20.3 88.2
68.0 Total Regulated Utility
Revenue $ 255.8 $ 226.4 $
749.6 $ 683.6
This exhibit has been furnished and shall not be deemed
“filed” for purposes of Section 18 of the Securities Exchange
Act of 1934, nor shall it be deemed incorporated by reference in
any filing under the Securities Act of 1933, except as shall be
expressly set forth by specific reference in such filing.
ALLETE, Inc.Investor Contact:Tim Thorp,
218-723-3953tthorp@allete.com
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