EX-99 6 ale6-30x2015exx99.htm EXHIBIT 99 ALE 6-30-2015 EX-99


 
Exhibit 99
For Release:
August 4, 2015
Investor Contacts:
Tim Thorp
 
218-723-3953
 
tthorp@allete.com
 
 
NEWS
 
Vince Meyer
 
218-723-3952
 
vmeyer@allete.com
 
ALLETE, Inc. quarterly earnings increase from a year ago
Full-year earnings guidance adjusted upward to $3.20-$3.40 per share
DULUTH, Minn. ALLETE, Inc. (NYSE: ALE) today reported second quarter 2015 earnings of 46 cents per share on net income of $22.5 million and operating revenue of $323.3 million. Earnings for the second quarter of 2014 were 40 cents per share on net income of $16.8 million and operating revenue of $260.7 million. This year’s results included acquisition transaction fees amounting to $0.9 million, or two cents per share. In last year’s quarterly results was a $2.5 million, or six cents per share, non-recurring charge associated with a settlement agreement with the Environmental Protection Agency (EPA).
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 $23.6 million, an increase of $6.1 million over 2014 second quarter net income. This year’s results reflect increases in cost recovery rider revenue, production tax credits, and power marketing sales due to the commencement of the Minnkota Power sales agreement in June 2014, partially offset by increased depreciation and interest expense. Included in last year’s quarterly results was the previously mentioned non-recurring charge related to a settlement agreement with the EPA.
“With respect to Minnesota Power and the region it serves, we are pleased that our large power taconite customers nominated near 90% of full electricity demand levels for the fourth quarter of 2015.” said ALLETE Chairman, President and CEO Al Hodnik.
The Investments and Other segment, which includes U.S. Water Services, ALLETE Clean Energy, BNI Coal, ALLETE Properties, corporate expense and unallocated interest expense, posted a net loss of $1.1 million, compared to a second quarter 2014 net loss of $700,000 a year ago. Operating results from the companies in this segment were as expected. The net loss for the second quarter of 2015 included acquisition transaction fees of $.9 million and higher interest and income tax expenses. The increase in income tax expense included $1.2 million attributable to the first quarter of 2015, due to a higher estimated effective tax rate for the year.
An increase in common shares outstanding resulted in 7 cents of earnings per share dilution compared to the same period a year ago.
“Overall, these solid financial results are as we anticipated in the quarter and when we examine them closely we find evidence that the strategy to broaden our energy operations is taking hold,” said Hodnik. “The recent addition of U.S. Water Services and the consistent growth of ALLETE Clean Energy, combined with our strong utility base, set the stage for future growth.”
ALLETE’s 2015 full-year guidance has been adjusted upward to a range of $3.20 to $3.40 per share to include ALLETE Clean Energy’s expected development fee from the MDU transaction. On June 30, 2015, the North Dakota Public Service Commission approved the sale of a wind facility under construction by ALLETE Clean Energy, to MDU. The company estimates the development fee from the MDU transaction to be between $20 million and $25 million, pre-tax, of which most will be recognized in earnings during the second half of 2015.
The 2015 guidance excludes acquisition-related transaction fees. Additional details about earnings guidance for the year will be discussed in our conference call scheduled for today.
Interested parties may listen to the conference live by calling (877) 303-5852, or by accessing the webcast on ALLETE’s Web site, www.allete.com. A replay of the call will be available through August 6, 2015 by dialing (855) 859-2056, pass code 72675112. 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 BNI Coal in Center, N.D., ALLETE Clean Energy, based in Duluth, 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.

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,
 
2015
2014
2015
2014
 
 
 
 
 
Operating Revenue
$323.3
$260.7
$643.3
$557.2
Operating Expenses
 
 
 
 
Fuel and Purchased Power
80.1

83.6

166.1

179.8

Transmission Services
11.3

10.5

26.2

21.3

Cost of Sales
52.3

18.9

83.5

42.4

Operating and Maintenance
85.4

74.3

165.1

148.6

Depreciation and Amortization
41.3

33.9

80.3

66.1

Taxes Other than Income Taxes
13.4

11.3

26.2

22.5

Total Operating Expenses
283.8
232.5
547.4
480.7
Operating Income
39.5
28.2
95.9
76.5
Other Income (Expense)
 
 
 
 
Interest Expense
(16.2
)
(13.5
)
(31.3
)
(26.3
)
Equity Earnings in ATC
4.7

5.2

8.6

10.3

Other
0.7

1.9

1.8

3.9

Total Other Expense
(10.8
)
(6.4
)
(20.9
)
(12.1
)
Income Before Non-Controlling Interest and Income Taxes
28.7

21.8
75.0
64.4
Income Tax Expense
6.4

4.9
12.6
13.7
Net Income
22.3

16.9
62.4
50.7
Less: Non-Controlling Interest in Subsidiaries
(0.2
)
0.1


0.4

Net Income Attributable to ALLETE
$22.5
$16.8
$62.4
$50.3
Average Shares of Common Stock
 
 
 
 
Basic
48.6

42.1

47.7

41.7

Diluted
48.7

42.3

47.8

41.9

Basic Earnings Per Share of Common Stock
$0.46
$0.40
$1.31
$1.21
Diluted Earnings Per Share of Common Stock
$0.46
$0.40
$1.30
$1.20
Dividends Per Share of Common Stock
$0.505
$0.49
$1.01
$0.98



Consolidated Balance Sheet
Millions - Unaudited
 
Jun. 30,
Dec. 31,
 
 
Jun. 30,
Dec. 31,
 
2015
2014
 
 
2015
2014
Assets
 
 
 
Liabilities and Shareholders’ Equity
 
 
Cash and Cash Equivalents
$60.6
$145.8
 
Current Liabilities
$401.0
$416.0
Other Current Assets
270.0
273.0
 
Long-Term Debt
1,272.4
1,272.8
Property, Plant and Equipment - Net
3,451.5
3,284.8
 
Deferred Income Taxes
572.5
510.7
Regulatory Assets
359.6
357.3
 
Regulatory Liabilities
104.8
94.2
Investment in ATC
124.2
121.1
 
Defined Benefit Pension & Other
190.0
190.9
Other Investments
115.0
114.4
 
Other Non-Current Liabilities
353.9
265.0
Goodwill and Intangibles - Net
213.4
4.8
 
Shareholders’ Equity
1,778.4
1,611.2
Other Non-Current Assets
78.7
59.6
 
 
 
 
Total Assets
$4,673.0
$4,360.8
 
Total Liabilities and Shareholders’ Equity
$4,673.0
$4,360.8



 
Quarter Ended
Six Months Ended
ALLETE, Inc.
June 30,
June 30,
Income (Loss)
2015
2014
2015
2014
Millions
 
 
 
 
Regulated Operations
$23.6
$17.5
$65.0
$51.4
Investments and Other
(1.1)
(0.7
)
(2.6
)
(1.1
)
Net Income Attributable to ALLETE
$22.5
$16.8
$62.4
$50.3
Diluted Earnings Per Share
$0.46
$0.40
$1.30
$1.20

Statistical Data
 
 
 
 
Corporate
 
 
 
 
Common Stock
 
 
 
 
High
$52.98
$52.54
$59.73
$52.73
Low
$47.51
$47.51
$47.51
$47.51
Close
$51.35
$51.35
$51.35
$51.35
Book Value
$36.37
$33.22
$36.37
$33.22

Kilowatt-hours Sold
 
 
 
 
Millions
 
 
 
 
Regulated Utility
 
 
 
 
Retail and Municipals
 
 
 
 
Residential
227
249
583
647
Commercial
331
333
715
728
Municipals
187
198
420
440
Industrial
1,575
1,788
3,525
3,604
Total Retail and Municipal
2,320
2,568
5,243
5,419
Other Power Suppliers
1,113
631
2,004
1,331
Total Regulated Utility
3,433
3,199
7,247
6,750
Non-regulated Energy Operations
30
30
60
64
Total Kilowatt-hours Sold
3,463
3,229
7,307
6,814

Regulated Utility Revenue
 
 
 
 
Millions
 
 
 
 
Regulated Utility Revenue
 
 
 
 
Retail and Municipals
 
 
 
 
Residential
$24.1
$25.7
$59.1
$65.8
Commercial
31.5
30.9
65.1
66.0
Municipals
14.5
14.5
30.5
31.0
Industrial
104.2
108.7
218.9
220.1
Total Retail and Municipals
174.3
179.8
373.6
382.9
Other Power Suppliers
37.6
24.1
71.3
53.7
Other
18.1
25.7
47.9
57.2
Total Regulated Utility Revenue
$230.0
$229.6
$492.8
$493.8


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.