ALLETE, Inc. (NYSE: ALE) today reported third quarter 2022
earnings of 59 cents per share on net income of $33.7 million. Last
year’s results were 53 cents per share on net income of $27.6
million. Quarter over quarter results reflect higher net income for
the Regulated Operations segment primarily due to interim rate
revenue at Minnesota Power. Also impacting the quarter were ongoing
inflation, supply chain challenges and transmission congestion
resulting in lower earnings at ALLETE Clean Energy. Overall,
results for the quarter were in line with expectations.
“ALLETE’s Sustainability in Action strategy continues to present
significant opportunities for our company, and we are confident in
our ability to execute while we navigate the current macro
environment,” said ALLETE President and CEO Bethany Owen. “In fact,
we are excited that, just this week, Minnesota Power reached an
agreement on its Integrated Resource Plan with various stakeholders
that, if approved by the Minnesota Public Utilities Commission
later this month, would significantly increase the amount of
renewable energy and storage the Company provides over the next 15
years. We are also pleased that Minnesota Power and Superior Water,
Light and Power rate cases are progressing as expected; New Energy
integration is nearing completion and we are confident in their
strong pipeline of projects; and the recently passed Inflation
Reduction Act is positive for all of our ALLETE companies.”
ALLETE’s Regulated Operations segment, which includes Minnesota
Power, Superior Water, Light and Power and the Company’s investment
in the American Transmission Co. recorded net income of $38.3
million, compared to $32.9 million in the third quarter of 2021.
Third quarter 2022 earnings reflect higher income at Minnesota
Power primarily due to the implementation of interim rates on
January 1, 2022. This increase was partially offset by lower kWh
sales to retail customers and higher costs under a 250 MW power
purchase agreement. ALLETE’s earnings in ATC were lower than in
2021 primarily due to period-over-period changes in ATC’s estimate
of a refund liability related to MISO return on equity
complaints.
ALLETE Clean Energy recorded a third quarter 2022 net loss of
$7.3 million compared to a net loss of $0.8 million in 2021. The
net loss in 2022 reflected a reserve of $2.9 million after-tax for
an anticipated loss on the sale of ALLETE Clean Energy’s Northern
Wind project primarily due to ongoing inflation and supply chain
challenges, losses under the Caddo wind energy facility’s power
sales agreements resulting from market volatility and transmission
congestion in the Southwest Power Pool, and lower wind resources at
other wind facilities as compared to 2021.
Corporate and Other businesses, which include New Energy, BNI
Energy, the Company’s investment in the Nobles 2 wind energy
facility, and ALLETE Properties, recorded net income of $2.7
million in 2022 compared to a net loss of $4.5 million in 2021.
Results in 2022 reflect higher earnings from our investment in
Nobles 2 due to stronger wind resources in 2022, net income from
New Energy of $1.3 million, which includes purchase price
accounting of $1.7 million after-tax, and a benefit from the timing
of income taxes.
Earnings per share dilution in 2022 was approximately 5 cents
due to additional shares of common stock outstanding as of
September 30, 2022.
“We expect our 2022 earnings to be near the mid-point of our
guidance range of $3.60 - $3.90 per share,” said ALLETE Senior Vice
President and Chief Financial Officer Steven Morris. “The results
for the quarter did meet our expectations notwithstanding the
previously mentioned impacts of ongoing inflation, supply chain
challenges and transmission congestion in Southwest Power Pool, as
well as the refund reserve impacting our equity earnings in ATC.
This updated guidance reflects year to date results and the timing
of a Minnesota Power solar project originally expected to close
this year, and now expected to be completed in the first quarter of
2023. We expect a strong fourth quarter of earnings from New
Energy, with growing momentum in the project pipeline and
significant projects closing in October and into the end of the
year.”
Live Webcast on November 9, 2022; 2022 third quarter slides
posted on company website
ALLETE’s earnings conference call will be at 10:00 a.m. (EST),
November 9, 2022, at which time management will discuss the third
quarter of 2022 financial results. Interested parties may
participate live by registering for the call at
allete.com/earningscall or may listen to the live audio-only
webcast accompanied by supporting slides, which will be available
on ALLETE’s Investor Relations website
investor.allete.com/events-presentations. The webcast will be
accessible for one year at 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., New Energy
Equity headquartered in Annapolis, MD, 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,
2022
2021
2022
2021
Operating Revenue
Contracts with Customers – Utility
$322.6
$304.8
$960.3
$888.2
Contracts with Customers – Non-utility
64.5
37.7
178.3
123.4
Other – Non-utility
1.2
2.9
6.3
8.6
Total Operating Revenue
388.3
345.4
1,144.9
1,020.2
Operating Expenses
Fuel, Purchased Power and Gas –
Utility
136.8
140.1
417.4
389.4
Transmission Services – Utility
19.3
19.2
57.5
56.1
Cost of Sales – Non-utility
38.4
15.2
96.9
47.8
Operating and Maintenance
83.2
66.7
238.1
200.1
Depreciation and Amortization
58.7
57.5
181.4
173.4
Taxes Other than Income Taxes
18.5
15.6
53.1
52.1
Total Operating Expenses
354.9
314.3
1,044.4
918.9
Operating Income
33.4
31.1
100.5
101.3
Other Income (Expense)
Interest Expense
(18.4
)
(17.3
)
(55.3
)
(51.8
)
Equity Earnings
2.3
4.4
13.1
14.3
Other
2.3
1.0
16.4
6.1
Total Other Expense
(13.8
)
(11.9
)
(25.8
)
(31.4
)
Income Before Income Taxes
19.6
19.2
74.7
69.9
Income Tax Benefit
(7.2
)
(4.9
)
(19.4
)
(19.3
)
Net Income
26.8
24.1
94.1
89.2
Net Loss Attributable to Non-Controlling
Interest
(6.9
)
(3.5
)
(43.5
)
(18.1
)
Net Income Attributable to
ALLETE
$33.7
$27.6
$137.6
$107.3
Average Shares of Common Stock
Basic
57.1
52.4
55.5
52.3
Diluted
57.2
52.5
55.6
52.3
Basic Earnings Per Share of Common
Stock
$0.59
$0.53
$2.48
$2.05
Diluted Earnings Per Share of Common
Stock
$0.59
$0.53
$2.48
$2.05
Dividends Per Share of Common
Stock
$0.65
$0.63
$1.95
$1.89
Consolidated Balance
Sheet
Millions - Unaudited
Sep. 30
Dec. 31,
Sep. 30
Dec. 31,
2022
2021
2022
2021
Assets
Liabilities and Equity
Cash and Cash Equivalents
$42.1
$45.1
Current Liabilities
$706.0
$543.4
Other Current Assets
680.1
246.2
Long-Term Debt
1,653.0
1,763.2
Property, Plant and Equipment – Net
5,011.0
5,100.2
Deferred Income Taxes
177.0
185.7
Regulatory Assets
447.1
511.8
Regulatory Liabilities
527.4
536.1
Equity Investments
320.3
318.0
Defined Benefit Pension and Other
Postretirement Benefit Plans
171.9
179.5
Goodwill and Intangibles – Net
155.8
0.8
Other Non-Current Liabilities
268.8
280.8
Other Non-Current Assets
201.6
212.9
Equity
3,353.9
2,946.3
Total Assets
$6,858.0
$6,435.0
Total Liabilities and Equity
$6,858.0
$6,435.0
Quarter Ended
Nine Months Ended
ALLETE, Inc.
September 30,
September 30,
Income (Loss)
2022
2021
2022
2021
Millions
Regulated Operations
$38.3
$32.9
$119.4
$99.4
ALLETE Clean Energy
(7.3
)
(0.8
)
15.0
11.7
Corporate and Other
2.7
(4.5
)
3.2
(3.8
)
Net Income Attributable to ALLETE
$33.7
$27.6
$137.6
$107.3
Diluted Earnings Per Share
$0.59
$0.53
$2.48
$2.05
Statistical Data
Corporate
Common Stock
High
$63.81
$73.10
$68.61
$73.10
Low
$49.89
$58.89
$49.89
$58.89
Close
$50.05
$59.52
$50.05
$59.52
Book Value
$46.93
$44.51
$46.93
$44.51
Kilowatt-hours Sold
Millions
Regulated Utility
Retail and Municipal
Residential
251
268
851
846
Commercial
353
360
1,027
1,018
Industrial
1,665
1,778
5,047
5,351
Municipal
130
147
419
445
Total Retail and Municipal
2,399
2,553
7,344
7,660
Other Power Suppliers
769
1,253
2,544
3,695
Total Regulated Utility Kilowatt-hours
Sold
3,168
3,806
9,888
11,355
Regulated Utility Revenue
Millions
Regulated Utility Revenue
Retail and Municipal Electric Revenue
Residential
$37.7
$34.8
$123.3
$107.3
Commercial
47.8
43.2
135.8
119.6
Industrial
146.8
139.2
443.5
405.7
Municipal
9.8
14.4
31.9
38.5
Total Retail and Municipal Electric
Revenue
242.1
231.6
734.5
671.1
Other Power Suppliers
46.7
41.2
124.6
116.9
Other (Includes Water and Gas Revenue)
33.8
32.0
101.2
100.2
Total Regulated Utility Revenue
$322.6
$304.8
$960.3
$888.2
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221109005198/en/
Vince Meyer 218-723-3952 vmeyer@allete.com
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