Full-year earnings guidance adjusted upward to
$3.20-$3.40 per share
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 IncomeMillions 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 SheetMillions
- 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
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150804005265/en/
ALLETE, Inc.Investor Contacts:Tim Thorp,
218-723-3953tthorp@allete.comorVince Meyer,
218-723-3952vmeyer@allete.com
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