ALLETE, Inc. (NYSE: ALE) today reported 2016 earnings of $3.14
per share on net income of $155.3 million and operating
revenue of $1.34 billion. Results from 2015 were $2.92 per share on
net income of $141.1 million and operating revenue of $1.49
billion. Operating revenue in 2015 included $197.7 million for
ALLETE Clean Energy’s construction of a wind energy facility which
was sold to Montana-Dakota Utilities in 2015.
Net income for 2016 was impacted by a gain related to the change
in fair value of the U.S. Water Services contingent consideration
liability, offset by the impact of an adverse November 2016
Minnesota Public Utilities Commission (MPUC) order on the
allocation of North Dakota investment tax credits, a goodwill
impairment charge related to ALLETE Clean Energy and expense
related to the repayment of long-term debt.
Net income for 2015 was impacted by a non-cash impairment charge
related to the real estate assets of ALLETE Properties, the
recognition of profit for the construction of a wind energy
facility sold to Montana-Dakota Utilities and acquisition costs
related to U.S. Water Services and ALLETE Clean Energy.
“I am pleased with the Company’s position and outlook as we move
into 2017,” said ALLETE Chairman, President and CEO Al Hodnik,
“Minnesota Power’s industrial customers start the year on a strong
note, and our energy infrastructure and related services businesses
are well positioned to capitalize on renewed growth and investment
initiatives.”
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 $135.5 million, an increase of $3.9 million compared
to 2015. Net income increased at Minnesota Power due to higher cost
recovery revenue, production tax credits and FERC formula-based
rates, as well as lower operating and maintenance expenses. These
increases were partially offset by higher depreciation expense,
lower industrial sales and demand revenue, and restoration costs
associated with a severe storm in July 2016. Our equity earnings in
ATC increased $1.3 million after-tax in 2016, primarily due to
additional investments in ATC and period over period changes in
ATC’s estimate of a refund liability related to the MISO return on
equity complaints.
ALLETE’s Energy Infrastructure and Related Services businesses,
which include ALLETE Clean Energy and U.S. Water Services, recorded
net income of $13.4 million and $1.5 million, respectively. Results
for 2015 at ALLETE Clean Energy included profit recognition of
$20.4 million after-tax, or 42 cents per share, for the
construction and sale of a wind energy facility to Montana-Dakota
Utilities; 2015 also included $1.8 million after-tax, or 4
cents per share, in acquisition costs. Net income for 2016 at
ALLETE Clean Energy included a $3.3 million after-tax, or 7 cents
per share, goodwill impairment charge and a $0.9 million after-tax
expense, or 2 cents per share, related to the prepayment of
long-term debt. Earnings in 2016 at ALLETE Clean Energy were
positively impacted by income generated from the operations of wind
energy facilities acquired in April and July 2015. Earnings at U.S.
Water Services increased $0.6 million reflecting lower amortization
expense related to purchase accounting adjustments from the 2015
acquisition. 2016 also reflects increased investments in back
office systems and support at U.S. Water Services as we create a
platform for future growth.
The Corporate and Other segment, which includes BNI Energy and
ALLETE Properties, recorded net income of $4.9 million for the
year, compared to a net loss of $21.3 million in 2015. Net income
in 2016 included an after-tax gain of $13.6 million, or 28 cents
per share, related to the change in fair value of the U.S. Water
Services contingent consideration liability, partially offset by an
$8.8 million after-tax, or 18 cents per share, adverse impact for
the regulatory outcome of a November 2016 MPUC order on the
allocation of North Dakota investment tax credits. In 2015, the net
loss included a $22.3 million after-tax, or 46 cents per share,
non-cash impairment charge related to the real estate assets of
ALLETE Properties and $3.0 million after-tax, or 6 cents per share,
in acquisition costs related to U.S. Water Services.
Earnings were diluted by 7 cents in 2016, due to additional
shares of common stock outstanding as of
December 31, 2016.
ALLETE will host a conference call and webcast at 10 a.m.
Eastern Time this morning to discuss details of its financial
performance and earnings guidance. Interested parties may listen
live by calling (877) 303-5852, or by accessing the webcast at
www.allete.com. A replay of the call will be available through
February 19, 2017 by calling (855) 859-2056, pass code 49223856.
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, U.S. Water Services headquartered in St.
Michael, Minn., BNI Energy in Center, N.D., 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
For the Periods Ended December 31, 2016 and 2015
Quarter Ended Year to Date
2016 2015 2016
2015 Millions Except Per Share Amounts
Operating Revenue $341.5 $380.6
$1,339.7 $1,486.4
Operating Expenses Fuel and Purchased Power 86.9 85.2 332.9
328.1 Transmission Services 15.7 14.0 65.2 54.1 Cost of Sales 31.6
69.0 144.7 302.3 Operating and Maintenance 93.2 87.1 334.1 333.5
Depreciation and Amortization 50.1 46.5 195.8 170.0 Taxes Other
than Income Taxes 13.2 12.9 53.8 51.4 Other (10.3 )
36.3 (10.3 ) 36.3 Total
Operating Expenses 280.4 351.0
1,116.2 1,275.7
Operating
Income 61.1 29.6
223.5 210.7
Other Income
(Expense) Interest Expense (17.3 ) (15.9 ) (70.3 ) (64.9 )
Equity Earnings in ATC 3.5 2.2 18.5 16.3 Other 1.1
1.2 3.9 4.7
Total Other Expense (12.7 ) (12.5 )
(47.9 ) (43.9 )
Income Before Income Taxes
48.4 17.1 175.6 166.8
Income Tax Expense (Benefit)
4.1 (1.7 ) 19.8
25.3
Net Income 44.3 18.8
155.8 141.5 Less:
Non-Controlling Interest in Subsidiaries —
0.5
0.5
0.4
Net Income Attributable to ALLETE
$44.3 $18.3 $155.3
$141.1
Average Shares of Common Stock
Basic 49.5 49.0 49.3 48.3 Diluted 49.7
49.1 49.5 48.4
Basic
Earnings Per Share of Common Stock $0.89 $0.37 $3.15 $2.92
Diluted Earnings Per Share of Common Stock $0.89 $0.37 $3.14
$2.92
Dividends Per Share of Common Stock
$0.52 $0.505 $2.08
$2.02
Consolidated Balance Sheet
Millions
Dec. 31, Dec. 31, Dec. 31, Dec.
31, 2016 2015
2016 2015
Assets Liabilities and Equity Cash and Cash
Equivalents $27.5 $97.0 Current Liabilities $399.5 $274.8 Other
Current Assets 267.0 274.0 Long-Term Debt 1,370.4 1,556.7 Property,
Plant and Equipment - Net 3,741.2 3,669.1 Deferred Income Taxes
584.1 579.8 Regulatory Assets 359.6 372.0 Regulatory Liabilities
125.8 105.0 Investment in ATC 135.6 124.5 Defined Benefit Pension
& Other Postretirement Benefit Plans 210.9 206.8 Other
Investments 55.6 74.6 Other Non-Current Liabilities 322.7 349.0
Goodwill and Intangibles - Net 213.4 215.2 Equity 1,893.0 1,822.4
Other Non-Current Assets 106.5 68.1
Total
Assets $4,906.4 $4,894.5
Total Liabilities and Equity $4,906.4
$4,894.5
Quarter
Ended Year to Date ALLETE, Inc. December
31, December 31, Income (Loss)
2016 2015 2016
2015 Millions Regulated Operations $25.5 $23.5
$135.5 $131.6 Energy Infrastructure and Related Services
ALLETE Clean Energy 3.7 11.2 13.4 29.9 U.S. Water Services
(0.5
)
(0.6 ) 1.5 0.9 Corporate and Other 15.6
(15.8 ) 4.9 (21.3 ) Net Income
Attributable to ALLETE $44.3 $18.3
$155.3 $141.1
Diluted
Earnings Per Share $0.89 $0.37
$3.14 $2.92
Statistical Data
Corporate Common Stock High
$66.92
$52.90 $66.92 $59.73 Low $56.48 $47.93 $48.26 $45.29 Close $64.19
$50.83 $64.19 $50.83 Book Value $38.17 $37.18 $38.17 $37.18
Kilowatt-hours Sold
Millions Regulated Utility
Retail and Municipal Residential 286 280 1,102 1,113 Commercial 352
356 1,442 1,462 Municipal 205 204 816 833 Industrial
1,716 1,572 6,456 6,635
Total Retail and Municipal 2,559 2,412 9,816 10,043 Other
Power Suppliers 860 1,254
4,316 4,310 Total Regulated Utility
3,419 3,666 14,132
14,353
Regulated Utility Revenue
Millions
Regulated Operations Retail and Municipal Residential
$30.6
$28.9 $115.8 $115.2 Commercial 33.6 33.1 133.7 132.9 Municipal 17.2
15.0 67.6 61.9 Industrial 110.0 103.7
412.5 424.4 Total Retail and
Municipal 191.4 180.7 729.6 734.4 Other Power Suppliers 41.9 43.9
175.1 154.7 Other 26.9 23.6
96.0 102.1 Total Regulated Utility
Revenue $260.2 $248.2
$1,000.7 $991.2
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version on businesswire.com: http://www.businesswire.com/news/home/20170215005359/en/
ALLETE, Inc.Investor Contact:Vince Meyer,
218-723-3952vmeyer@allete.com
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