ALLETE, Inc. (NYSE: ALE) today reported second quarter 2016
earnings of 50 cents per share on net income of $24.8 million
and operating revenue of $314.8 million. Last year’s results were
46 cents per share on net income of $22.5 million and
operating revenue of $323.3 million, and included profit
recognition of $1.5 million after-tax, or 3 cents per share,
for the construction of a wind energy facility which was sold to
Montana-Dakota Utilities in the fourth quarter of 2015. Net income
in 2015 also included acquisition costs of $0.9 million, or 2
cents per share.
“We are encouraged by developments in the quarter that point to
improved future production levels for Minnesota Power’s taconite
customers," said ALLETE Chairman, President and CEO Al Hodnik. “As
expected, second quarter results were impacted by lower sales to
taconite customers, and we continued to proactively manage the
impact by utilizing the wholesale power markets and tightening
operating and maintenance expenses."
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 $22.6 million, a decrease of $0.7 million from 2015
second quarter net income. At Minnesota Power, lower industrial
sales and higher depreciation and property tax expenses were
partially offset by increased sales to other power suppliers and
lower operating and maintenance expense. In addition, our equity
earnings in ATC decreased $0.4 million after-tax, due to period
over period changes in ATC’s estimate of a refund liability related
to Midwest Independent System Operator 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 $2.6 million and $1.0 million, respectively. Earnings
at ALLETE Clean Energy decreased $0.4 million primarily due to
2015 results including the previously mentioned profit recognition
of $1.5 million after-tax for the construction and sale of a
wind energy facility to Montana-Dakota Utilities in 2015. Net
income at ALLETE Clean Energy in 2016 also included higher earnings
from a full quarter of a wind energy facility acquired in July of
2015, and $0.9 million of lower acquisition costs. Earnings at
U.S. Water Services increased $0.4 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, posted a net loss of $1.4 million for the
quarter, compared to a net loss of $4.4 million in 2015. The
decreased loss was primarily the result of lower income tax expense
compared to the second quarter of 2015.
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
August 7, 2016 by calling (855) 859-2056, pass code 43088897. 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
Millions Except Per Share Amounts -
Unaudited
Quarter Ended Six Months Ended June
30, June 30, 2016
2015 2016 2015
Operating Revenue $314.8 $323.3
$648.6 $643.3
Operating Expenses
Fuel and Purchased Power 78.1 80.1 155.0 166.1 Transmission
Services 16.1 11.3 32.9 26.2 Cost of Sales 33.4 52.3 66.7 83.5
Operating and Maintenance 82.0 85.4 160.1 165.1 Depreciation and
Amortization 48.7 41.3 96.8 80.3 Taxes Other than Income Taxes
14.3 13.4 28.1
26.2 Total Operating Expenses 272.6 283.8 539.6 547.4
Operating Income 42.2 39.5
109.0 95.9
Other Income
(Expense) Interest Expense (17.4 ) (16.2 ) (34.3 ) (31.3 )
Equity Earnings in ATC 4.1 4.7 8.9 8.6 Other 0.6
0.7 1.6 1.8 Total Other
Expense (12.7 ) (10.8 ) (23.8 ) (20.9 )
Income Before Non-Controlling Interest and Income Taxes 29.5
28.7 85.2 75.0
Income Tax Expense 4.7
6.4 14.0 12.6
Net Income
24.8 22.3 71.2
62.4 Less: Non-Controlling Interest in Subsidiaries —
(0.2 ) 0.5 —
Net
Income Attributable to ALLETE $24.8 $22.5
$70.7 $62.4
Average Shares of
Common Stock Basic 49.3 48.6 49.2 47.7 Diluted 49.5
48.7 49.3 47.8
Basic Earnings Per Share of Common Stock $0.50 $0.46 $1.44
$1.31
Diluted Earnings Per Share of Common Stock $0.50 $0.46
$1.43 $1.30
Dividends Per Share of Common Stock $0.52
$0.505 $1.04 $1.01
Consolidated Balance Sheet
Millions - Unaudited
Jun. 30, Dec. 31,
Jun. 30, Dec. 31, 2016
2015 2016 2015
Assets Liabilities and Shareholders’ Equity Cash and
Cash Equivalents $91.9 $97.0 Current Liabilities $271.6 $274.8
Other Current Assets 262.4 274.0 Long-Term Debt 1,498.9 1,556.7
Property, Plant and Equipment - Net 3,631.3 3,669.1 Deferred Income
Taxes 595.1 579.8 Regulatory Assets 359.1 372.0 Regulatory
Liabilities 94.6 105.0 Investment in ATC 129.0 124.5 Defined
Benefit Pension & Other 204.5 206.8 Other Investments 72.3 74.6
Other Non-Current Liabilities 340.8 349.0 Goodwill and Intangibles
- Net 212.7 215.2 Shareholders’ Equity 1,852.1 1,822.4 Other
Non-Current Assets 98.9 68.1
Total Assets $4,857.6
$4,894.5
Total Liabilities and Shareholders’ Equity
$4,857.6 $4,894.5
Quarter Ended
Six Months Ended ALLETE, Inc. June 30,
June 30, Income (Loss) 2016
2015 2016 2015 Millions
Regulated Operations $22.6 $23.3 $65.0 $64.3 Energy
Infrastructure and Related Services
ALLETE Clean Energy
2.6
3.0
8.7
5.5
U.S. Water Services 1.0 0.6
0.5
0.5
Corporate and Other (1.4 )
(4.4
)
(3.5 ) (7.9 ) Net Income Attributable to ALLETE
$24.8 $22.5 $70.7
$62.4
Diluted Earnings Per Share $0.50
$0.46 $1.43 $1.30
Statistical Data
Corporate Common Stock High $64.69 $52.98 $64.69
$59.73 Low $53.47 $46.27 $48.26 $46.27 Close $64.63 $46.39 $64.63
$46.39 Book Value $37.51 $36.37 $37.51 $36.37
Kilowatt-hours Sold
Millions Regulated Utility Retail and
Municipal Residential 237 227 566 583 Commercial 339 331 707 715
Municipal 187 187 406 420 Industrial 1,513
1,575 3,107 3,525 Total Retail
and Municipal 2,276 2,320 4,786 5,243 Other Power Suppliers
1,185 1,113 2,315 2,004
Total Regulated Utility Kilowatt-hours Sold 3,461
3,433 7,101 7,247
Regulated Utility Revenue
Millions Regulated Utility Revenue
Retail and Municipal Residential $24.9 $24.1 $57.8 $59.1 Commercial
31.5 31.5 64.0 65.1 Municipal 15.3 14.5 31.2 30.5 Industrial
96.6 104.2 196.5 218.9
Total Retail and Municipal 168.3 174.3 349.5 373.6 Other
Power Suppliers 44.2 37.6 86.4 71.3 Other 22.4
18.1 51.3 47.9 Total Regulated
Utility Revenue $234.9 $230.0
$487.2 $492.8
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version on businesswire.com: http://www.businesswire.com/news/home/20160803005251/en/
ALLETE, Inc.Investor Contact:Vince Meyer,
218-723-3952vmeyer@allete.com
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