Investment in ATC

6 Months Ended

Jun. 30, 2012

INVESTMENT IN ATC

Our wholly-owned subsidiary, Rainy River Energy, owns approximately 8 percent of ATC, a Wisconsin-based utility that owns and maintains electric transmission assets in parts of Wisconsin, Michigan, Minnesota and Illinois. ATC rates are FERC-approved and are based on a 12.2 percent return on common equity dedicated to utility plant. We account for our investment in ATC under the equity method of accounting. As of June 30, 2012, our equity investment in ATC was $102.6 million ($98.9 million at December 31, 2011). In the first six months of 2012, we invested $2.0 million in ATC, and on July 31, 2012, we invested an additional $1.9 million. In total, we expect to invest $4.7 million in 2012.



ALLETE’s Investment in ATC
Millions
Equity Investment Balance as of December 31, 2011		$98.9
Cash Investments	2.0
Equity in ATC Earnings	9.4
Distributed ATC Earnings	(7.7		)
Equity Investment Balance as of June 30, 2012		$102.6

ATC’s summarized financial data for the quarters and six months ended June 30, 2012 and 2011, is as follows:



	Quarter Ended		Six Months Ended
ATC Summarized Financial Data	June 30,		June 30,
Income Statement Data	2012	2011	2012		2011
Millions
Revenue	$152.2	$138.2		$299.8		$277.8
Operating Expense	71.8	63.0	141.3		126.1
Other Expense	21.1	19.6	41.1		41.9
Net Income	$59.3	$55.6		$117.4		$109.8

ALLETE’s Equity in Net Income	$4.8	$4.6		$9.4		$9.0

- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

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