ALLETE, Inc. (NYSE: ALE) today reported third quarter 2018
earnings of 59 cents per share on net income of $30.7 million
and operating revenue of $348.0 million. Last year’s results were
88 cents per share on net income of $44.9 million and
operating revenue of $362.5 million. Results for the third quarter
of 2017 reflect a $7.9 million after-tax, or 16 cents per
share, favorable impact for the regulatory outcome related to the
allocation of North Dakota investment tax credits. Results in the
third quarter of 2018 included $5.5 million after-tax, or 11 cents
per share, of reserves for an interim rate refund, a
$3.1 million after-tax, or 6 cents per share, reduction in
revenue for an estimated true-up of transmission rates that were
billed in 2017 and $0.9 million after-tax, or 2 cents per share, of
additional income tax expense related to changes enacted as part of
tax reform for the executive compensation deduction, partially
offset by the timing of approval for financial incentives under the
Minnesota conservation improvement program of $2.1 million
after-tax, or 4 cents per share.
“Our year-to-date financial results capture robust demand from
our taconite customers, impacts from a rate case outcome earlier
this year and ALLETE Clean Energy’s progress executing its
multi-year refurbishment strategy. We are on track to deliver
full-year financial results that are near the mid-point of our
original 2018 earnings guidance range of $3.20 to $3.50 per
share,” 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 $29.8 million for the third quarter of 2018, a decrease
of $4.4 million from 2017. Earnings decreased primarily due to
lower net income at Minnesota Power resulting from timing of
reserves for an interim rate refund and lower transmission revenue
resulting from a reduction in revenue for an estimated true-up of
transmission rates billed in 2017. These decreases were partially
offset by higher sales to residential and commercial customers due
to more favorable weather conditions, lower operating and
maintenance expenses and timing of approval for financial
incentives under the Minnesota conservation improvement program
compared to 2017.
ALLETE’s Energy Infrastructure and Related Services businesses,
which include ALLETE Clean Energy and U.S. Water Services, recorded
net income of $1.0 million and $1.7 million for the third quarter
of 2018, respectively. Earnings at ALLETE Clean Energy increased
$0.4 million from 2017. ALLETE Clean Energy’s 2018 net income
included the benefit of higher wind resources and additional
production tax credits generated as ALLETE Clean Energy executes
its refurbishment strategy, partially offset by higher operating
and maintenance expenses compared to the same period in 2017.
Earnings from U.S. Water Services reflect higher revenue resulting
from the 2017 acquisition of Tonka Water and higher sales of
chemicals and related services, partially offset by higher
operating expenses. Results this period were also negatively
impacted by the timing of capital project sales.
Corporate and Other, which includes BNI Energy and ALLETE
Properties, posted a net loss of $1.8 million in the third quarter
of 2018 compared to net income of $8.8 million in 2017. Net income
in 2017 included the previously mentioned $7.9 million after-tax,
or 16 cents per share, favorable impact for the regulatory outcome
related to the allocation of North Dakota investment tax credits.
The net loss in 2018 included lower revenue at ALLETE Properties
and additional income tax expense.
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 using pass code 3977089, or by accessing the webcast at
www.allete.com. A replay of the call will be available through
November 5, 2018 by calling (855) 859-2056, pass code 3977089. 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, BNI Energy in Bismarck,
N.D., U.S. Water Services headquartered in St. Michael, Minn.,
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 Nine Months
Ended September 30, September 30,
2018 2017
2018 2017 Operating Revenue
Contracts with Customers – Utility
$261.3 $277.6 $789.3 $824.1 Contracts with Customers – Non-utility
80.7 79.0 243.1 239.6 Other – Non-utility 6.0
5.9 17.9
17.7 Total Operating Revenue 348.0
362.5 1,050.3
1,081.4
Operating Expenses Fuel, Purchased
Power and Gas – Utility 103.2 93.5 300.6 283.2 Transmission
Services – Utility 17.9 18.9 53.1 53.1 Cost of Sales – Non-utility
38.7 36.0 108.6 105.9 Operating and Maintenance 80.3 81.1 253.6
251.4 Depreciation and Amortization 51.5 50.9 153.4 151.5 Taxes
Other than Income Taxes 13.1
14.1 43.8 42.7
Total Operating Expenses 304.7
294.5 913.1 887.8
Operating Income 43.3
68.0 137.2 193.6
Other Income (Expense) Interest Expense (17.6 ) (16.6 )
(51.6 ) (50.5 ) Equity Earnings in ATC 4.0 5.9 13.0 17.3 Other
1.4 1.8 5.7
5.0 Total Other Expense
(12.2 ) (8.9 ) (32.9 )
(28.2 )
Income Before Income Taxes 31.1 59.1 104.3 165.4
Income Tax Expense (Benefit) 0.4
14.2 (8.7 ) 34.6
Net Income $30.7 $44.9
$113.0 $130.8
Average Shares of Common Stock Basic 51.4 51.0 51.3 50.7
Diluted 51.6 51.2
51.5 50.9
Basic Earnings Per
Share of Common Stock $0.59 $0.88 $2.20 $2.58
Diluted
Earnings Per Share of Common Stock $0.59 $0.88 $2.19 $2.57
Dividends Per Share of Common Stock $0.56
$0.535 $1.68
$1.605
Consolidated Balance
Sheet
Millions - Unaudited
Sept. 30, Dec. 31, Sept. 30, Dec.
31, 2018 2017
2018
2017 Assets Liabilities and Shareholders’
Equity Cash and Cash Equivalents $128.0 $98.9 Current
Liabilities $402.7 $351.2 Other Current Assets 311.4 268.6
Long-Term Debt 1,461.7 1,439.2 Property, Plant and Equipment – Net
3,846.5 3,822.4 Deferred Income Taxes 231.3 230.5 Regulatory Assets
370.6 384.7 Regulatory Liabilities 512.3 532.0 Investment in ATC
126.0 118.7 Defined Benefit Pension and Other Postretirement
Benefit Plans 173.6 191.8 Other Investments 51.7 53.1 Other
Non-Current Liabilities 265.6 267.1 Goodwill and Intangibles – Net
224.7 225.9 Shareholders’ Equity 2,116.1 2,068.2 Other Non-Current
Assets 104.4 107.7
Total Assets
$5,163.3 $5,080.0
Total Liabilities and Shareholders’ Equity
$5,163.3 $5,080.0
Quarter Ended Nine Months Ended ALLETE, Inc.
September 30, September 30, Income (Loss)
2018 2017
2018 2017 Millions
Regulated Operations $29.8 $34.2 $99.7 $110.1 Energy
Infrastructure and Related Services ALLETE Clean Energy 1.0 0.6
15.9 11.1 U.S. Water Services 1.7 1.3 0.5 1.6 Corporate and
Other (1.8 ) 8.8 (3.1 )
8.0 Net Income Attributable to ALLETE
$30.7 $44.9 $113.0
$130.8
Diluted Earnings Per Share $0.59
$0.88 $2.19
$2.57
Statistical Data
Corporate
Common Stock High $80.78 $79.61 $80.78 $79.61 Low $73.39 $69.79
$66.64 $61.64 Close $75.01 $77.29 $75.01 $77.29 Book Value
$41.15 $40.02 $41.15
$40.02
Kilowatt-hours Sold
Millions Regulated Utility Retail and
Municipal Residential 251 239 836 791 Commercial 369 364 1,075
1,061 Industrial 1,794 1,859 5,418 5,437 Municipal
196 195 603
591 Total Retail and Municipal 2,610 2,657 7,932 7,880 Other Power
Suppliers 968 977
2,976 3,022 Total Regulated Utility
Kilowatt-hours Sold 3,578 3,634
10,908 10,902
Regulated Utility Revenue
Millions Regulated
Utility Revenue Retail and Municipal Electric Revenue Residential
$29.0 $26.6 $92.5 $86.4 Commercial 37.2 35.4 106.4 103.8 Industrial
116.9 121.3 344.9 362.8 Municipal 14.1
14.6 41.8 45.1 Total
Retail and Municipal Electric Revenue 197.2 197.9 585.6 598.1 Other
Power Suppliers 40.9 41.2 127.3 124.1 Other (Includes Water and Gas
Revenue) 23.2 38.5
76.4 101.9 Total Regulated Utility Revenue
$261.3 $277.6
$789.3 $824.1
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version on businesswire.com: https://www.businesswire.com/news/home/20181101005142/en/
ALLETE, Inc.Investor Contact:Vince Meyer,
218-723-3952vmeyer@allete.com
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