ALLETE, Inc. (NYSE: ALE) today reported second quarter 2017
earnings of 72 cents per share on net income of $36.9 million
and operating revenue of $353.3 million. Last year’s results were
50 cents per share on net income of $24.8 million and
operating revenue of $314.8 million.
“ALLETE’s businesses continue to make significant progress on
key initiatives that will strategically position us for success in
2017 and beyond. On July 28, 2017, Minnesota Power submitted a
resource package to the Minnesota Public Utilities Commission
requesting approval for a 250 MW wind energy power purchase
agreement, a 10 MW solar energy power purchase agreement and 250 MW
of natural gas-fired generation and also filed a request to delay
the filing deadline of its next integrated resource plan to
February 2019. This resource package is the next step in Minnesota
Power’s EnergyForward strategic plan. Minnesota Power and Superior
Water, Light and Power’s respective rate reviews are progressing as
planned and ALLETE Clean Energy is actively bidding into many
renewable investment opportunities,” said ALLETE Chairman,
President and CEO Al Hodnik.
ALLETE’s Regulated Operations segment, which includes Minnesota
Power, Superior Water, Light and Power, and the Company’s
investment in the American Transmission Co. (ATC), recorded net
income of $32.4 million, an increase of $9.8 million over 2016
net income. Earnings increased primarily due to higher net income
at Minnesota Power resulting from the implementation of interim
retail rates at the beginning of the year, higher kilowatt-hour
sales primarily due to increased sales to Minnesota Power’s
industrial customers and timing of the recognition of a
conservation improvement program financial incentive following
Minnesota Public Utilities Commission approval in the second
quarter. These increases were partially offset by higher operating
and maintenance, depreciation, and interest expenses. Our equity
earnings in ATC increased $0.8 million from 2016 primarily due to
additional investments in ATC and period over period changes in
ATC’s estimate of a refund liability related to MISO return on
equity complaints.
ALLETE’s Energy Infrastructure and Related Services businesses,
which include ALLETE Clean Energy and U.S. Water Services, recorded
net income of $3.8 million and $0.6 million, respectively. Earnings
at ALLETE Clean Energy increased $1.2 million, or 46 percent,
from 2016. Net income in 2017 included higher operating revenue and
lower operating and maintenance expense compared to the same period
in 2016. Earnings from U.S. Water Services decreased $0.4 million
from 2016 primarily due to increased operating expenses as a result
of investments for future growth in waste treatment and water
safety applications, partially offset by higher operating
revenue.
Corporate and Other, which includes BNI Energy and ALLETE
Properties, increased $1.5 million from 2016 primarily due to lower
interest expense and lower accretion expense relating to the
contingent consideration liability.
Earnings per share for the quarter was diluted by 3 cents due to
additional shares of common stock outstanding as of
June 30, 2017.
ALLETE will host a conference call and webcast at 10 a.m.
Eastern Time this morning to discuss details of its 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 August 6, 2017 by calling
(855) 859-2056, pass code 48275932. The webcast will be accessible
for one year at www.allete.com.
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 ALLETE Clean
Energy, based in Duluth, U.S. Water Services headquartered
in St. Michael, Minn., BNI Energy in Bismarck, N.D.,
and has an eight percent equity interest in the American
Transmission Co. More information about ALLETE is
available at www.allete.com.
ALE-CORP
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 Six Months
Ended June 30, June 30,
2017 2016 2017
2016 Operating
Revenue Utility $264.9 $234.9 $546.5 $487.2 Non-utility
88.4 79.9 172.4
161.4 Total Operating Revenue 353.3
314.8 718.9 648.6
Operating Expenses Fuel, Purchased Power
and Gas – Utility 93.1 79.0 189.7 158.9 Transmission Services –
Utility 17.6 16.1 34.2 32.9 Cost of Sales – Non-utility 38.4 32.5
70.0 62.8 Operating and Maintenance 84.9 82.0 168.2 160.1
Depreciation and Amortization 50.1 48.7 100.6 96.8 Taxes Other than
Income Taxes 14.2 14.3
28.6 28.1 Total Operating
Expenses 298.3 272.6 591.3 539.6
Operating Income
55.0 42.2 127.6
109.0
Other Income (Expense)
Interest Expense (16.7 ) (17.4 ) (33.9 ) (34.3 ) Equity Earnings in
ATC 5.3 4.1 11.4 8.9 Other 0.6
0.6 1.2 1.6 Total
Other Expense (10.8 ) (12.7 )
(21.3 ) (23.8 )
Income Before
Non-Controlling Interest and Income Taxes 44.2 29.5 106.3 85.2
Income Tax Expense 7.3
4.7 20.4 14.0
Net Income 36.9 24.8
85.9 71.2 Less:
Non-Controlling Interest in Subsidiaries —
— — 0.5
Net Income Attributable to ALLETE $36.9
$24.8 $85.9
$70.7
Average Shares of Common Stock Basic
50.9 49.3 50.5 49.2 Diluted 51.1
49.5 50.7 49.3
Basic Earnings Per Share of Common Stock $0.73 $0.50 $1.70
$1.44
Diluted Earnings Per Share of Common Stock $0.72 $0.50
$1.69 $1.43
Dividends Per Share of Common Stock
$0.535 $0.52 $1.07
$1.04
Consolidated
Balance Sheet
Millions - Unaudited
Jun. 30, Dec. 31, Jun. 30, Dec.
31, 2017 2016
2017
2016 Assets Liabilities and Shareholders’
Equity Cash and Cash Equivalents $84.2 $27.5 Current
Liabilities $305.4 $399.5 Other Current Assets 262.3 267.0
Long-Term Debt 1,401.4 1,370.4 Property, Plant and Equipment - Net
3,745.6 3,741.2 Deferred Income Taxes 577.0 554.6 Regulatory Assets
324.5 330.1 Regulatory Liabilities 125.8 125.8 Investment in ATC
143.1 135.6 Defined Benefit Pension & Other 195.8 210.9 Other
Investments 56.2 55.6 Other Non-Current Liabilities 309.1 322.7
Goodwill and Intangibles - Net 210.8 213.4 Shareholders’ Equity
2,017.0 1,893.0 Other Non-Current Assets 104.8
106.5
Total Assets $4,931.5
$4,876.9
Total Liabilities and
Shareholders’ Equity $4,931.5
$4,876.9
Quarter Ended
Six Months Ended ALLETE, Inc. June 30, June
30, Income (Loss) 2017
2016 2017
2016 Millions Regulated
Operations $32.4 $22.6 $75.9 $65.0 Energy Infrastructure and
Related Services ALLETE Clean Energy 3.8 2.6 10.5 8.7 U.S. Water
Services 0.6 1.0 0.3 0.5 Corporate and Other
0.1 (1.4 ) (0.8 ) (3.5 )
Net Income Attributable to ALLETE $36.9
$24.8 $85.9 $70.7
Diluted Earnings Per Share $0.72
$0.50 $1.69 $1.43
Statistical Data
Corporate Common
Stock High $74.59 $64.69 $74.59 $64.69 Low $66.81 $53.47 $61.64
$48.26 Close $71.68 $64.63 $71.68 $64.63 Book Value $39.58 $37.51
$39.58 $37.51
Kilowatt-hours Sold
Millions Regulated Utility Retail and Municipal Residential
229 237 552 566 Commercial 328 339 697 707 Municipal 181 187 396
406 Industrial 1,816 1,513
3,578 3,107 Total Retail
and Municipal 2,554 2,276 5,223 4,786 Other Power Suppliers
1,004 1,185 2,045
2,315 Total Regulated Utility Kilowatt-hours
Sold 3,558 3,461
7,268 7,101
Regulated Utility
Revenue
Millions Regulated Utility Revenue
Retail and Municipal Residential $25.1 $24.9 $59.8 $57.8 Commercial
32.6 31.5 68.6 64.0 Municipal 12.3 15.3 30.5 31.2 Industrial
120.8 96.6 241.3
196.5 Total Retail and Municipal 190.8 168.3
400.2 349.5 Other Power Suppliers 41.6 44.2 82.8 86.4 Other
32.5 22.4 63.5
51.3 Total Regulated Utility Revenue
$264.9 $234.9 $546.5
$487.2
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ALLETE, Inc.Investor Contact:Vince Meyer,
218-723-3952vmeyer@allete.com
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