ALLETE Reports 2002 Earnings, 2003 Expectations.Business Editors DULUTH Duluth (dəl  th`), city (1990 pop. 85,493), seat of St. Louis co., NE Minn., at the west end of Lake Superior, at the head of lake navigation and opposite Superior, Wis.; inc. 1870. , Minn.--(BUSINESS WIRE)--Jan. 24, 2003
ALLETE, Inc. (NYSE NYSE See: New York Stock Exchange :ALE) today reported 2002 earnings of $1.68 per share, compared with earnings of $1.81 in 2001. Excluding one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. events, earnings were $1.80 per share in 2002 and $1.87 in 2001. Net income was $137.2 million in 2002 on revenue of $1.507 billion, compared with $138.7 million net income on revenue of $1.526 billion in 2001. "We navigated through a challenging year while accomplishing several important goals," said Dave Gartzke, ALLETE's chairman, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We simplified sim·pli·fy tr.v. sim·pli·fied, sim·pli·fy·ing, sim·pli·fies To make simple or simpler, as: a. To reduce in complexity or extent. b. To reduce to fundamental parts. c. our company by exiting non-strategic businesses. This strengthened our balance sheet and allowed us to focus on our two core businesses. We continued our efforts to communicate this new focus to investors." One-time events in 2002 include final exit charges related to the automotive transport and Electric Odyssey Odyssey (ŏd`ĭsē): see Homer. Odyssey Homer’s long, narrative poem centered on Odysseus. [Gk. Lit.: Odyssey] See : Epic Odyssey retail businesses, as well as a charge related to the indefinite INDEFINITE. That which is undefined; uncertain. INDEFINITE, NUMBER. A number which may be increased or diminished at pleasure. 2. When a corporation is composed of an indefinite number of persons, any number of them consisting of a majority of those delay of an electric generation project in Superior, Wis adv. 1. Certainly; really; indeed. v. t. 1. To think; to suppose; to imagine; - used chiefly in the first person sing. present tense, I wis. See the Note under Ywis. . In 2001, ALLETE recognized a portion of the exit charge from the automotive transport business. Automotive Services grew net income by 24% in 2002 despite relatively flat auction vehicle sales. At ADESA, growth was due to mandated goodwill accounting changes, lower interest expense and increased auction efficiency. Automotive Finance Corporation financed 42,000 more vehicles - an increase of 5%. At Energy Services, total kilowatt-hour kil·o·watt-hour n. Abbr. kWh or kW-hr A unit of electric energy equal to the work done by one kilowatt acting for one hour. sales were up 11% for the year in part due to sales from nonregulated generation that began in 2002. Low wholesale prices, however, resulted in net income declining by 8%, excluding the Superior generation project. Investments and Corporate Charges declined by $19.5 million from 2001, mainly due to the liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of the company's securities portfolio during the year and the largest real estate sale in the company's history which improved earnings in 2001. Net income from Discontinued Operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. increased by $9.8 million in 2002, largely from the suspension suspension, in vehicles suspension, in automobiles, system of springs used to suspend the frame, body, engine, and power train above the wheels. Its principal purpose is to lessen the jarring of the automobile that is caused by irregularities in the roads of depreciation expense at the company's Water Services businesses. The pending sale of Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and Water Services for $492.5 million is expected to close in mid-February n. 1. the middle part of February. Noun 1. mid-February - the middle part of February period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue . "The proceeds from the sale will give us the ability to reduce debt, which will further strengthen our balance sheet and keep us financially well-positioned," Gartzke said. "Our two core businesses remain strong and are poised for earnings growth in their respective markets as economic conditions improve." Gartzke expects earnings at Automotive Services to grow by about 15% in 2003. Earnings at Energy Services are expected to decrease from 2002 levels. "If wholesale power prices improve, so too will our profitability at Energy Services," he added. ALLETE's corporate headquarters are located in Duluth, Minnesota Minnesota, state, United States Minnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces . ALLETE's holdings include ADESA, the second largest wholesale vehicle auction network in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. ; AFC (1) (Application Foundation Classes) A class library from Microsoft that provides an application framework and graphics, graphical user interface (GUI) and multimedia routines for Java programmers. , the leading provider of independent auto dealer financing; Minnesota Power, a low-cost electric utility that serves some of the largest industrial customers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ; and significant real estate holdings in Florida. For more information about ALLETE, visit the company's Web site 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . 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, Inc.
Consolidated Statement of Income
For the Periods Ended December 31, 2002 and 2001
Millions Except Per Share Amounts
Quarter Ended Year to Date
2002 2001 2002 2001
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Operating Revenue
Energy Services $162.1 $ 144.4 $ 630.3 $ 618.7
Automotive Services 200.9 205.9 844.1 832.1
Investments 3.3 10.2 32.5 74.8
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Total Operating Revenue 366.3 360.5 1,506.9 1,525.6
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Operating Expenses
Fuel and Purchased Power 64.4 53.7 239.1 233.1
Operations 266.2 252.4 1,008.0 1,007.3
Interest 14.3 16.9 62.2 74.7
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Total Operating Expenses 344.9 323.0 1,309.3 1,315.1
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Operating Income from Continuing
Operations 21.4 37.5 197.6 210.5
Distributions on Redeemable
Preferred Securities of
ALLETE Capital I 1.5 1.5 6.0 6.0
Income Tax Expense 6.6 11.2 72.6 74.2
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Income from Continuing Operations 13.3 24.8 119.0 130.3
Income from Discontinued
Operations 4.8 0.7 18.2 8.4
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Net Income $ 18.1 $ 25.5 $ 137.2 $ 138.7
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Average Shares of Common Stock
Basic 81.8 79.6 81.1 75.8
Diluted 82.3 80.4 81.7 76.5
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Earnings Per Share of Common
Stock
Basic - Continuing
Operations $ 0.16 $ 0.30 $ 1.47 $ 1.72
Discontinued
Operations 0.06 0.01 0.22 0.11
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$ 0.22 $ 0.31 $ 1.69 $ 1.83
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Diluted - Continuing
Operations $ 0.16 $ 0.30 $ 1.46 $ 1.70
Discontinued
Operations 0.06 0.01 0.22 0.11
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$ 0.22 $ 0.31 $ 1.68 $ 1.81
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Dividends Per Share of Common
Stock $0.275 $ 0.2675 $ 1.10 $ 1.07
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ALLETE, Inc.
Consolidated Balance Sheet
For the Periods Ended December 31, 2002 and 2001
Millions
2002 2001
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Assets
Current Assets $ 658.4 $ 895.5
Property, Plant and Equipment 1,364.9 1,323.3
Investments 170.9 155.4
Goodwill 499.8 494.4
Other 107.3 103.6
Discontinued Operations 345.9 310.3
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Total Assets $3,147.2 $3,282.5
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2002 2001
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Liabilities and Shareholders' Equity
Current Liabilities $ 738.2 $ 704.5
Long-Term Debt 661.3 933.8
Other Liabilities 277.4 270.5
Discontinued Operations 162.9 154.9
Mandatorily Redeemable Preferred
Securities of ALLETE Capital I 75.0 75.0
Shareholders' Equity 1,232.4 1,143.8
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Total Liabilities and Shareholders' Equity $3,147.2 $3,282.5
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Quarter Ended Year to Date
December 31, December 31,
ALLETE, Inc. 2002 2001 2002 2001
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Net Income
Millions
Energy Services (a) $ 5.5 $11.5 $ 41.8 $ 51.7
Automotive Services 14.1 15.6 92.9 74.8
Investments and Corporate Charges (6.3) (2.3) (15.7) 3.8
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Income from Continuing Operations (a) 13.3 24.8 119.0 130.3
Income from Discontinued Operations (b) 4.8 0.7 18.2 8.4
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Net Income $18.1 $25.5 $137.2 $138.7
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Diluted Earnings Per Share
Continuing Operations (a) $0.16 $0.30 $ 1.46 $ 1.70
Discontinued Operations (b) 0.06 0.01 0.22 0.11
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$0.22 $0.31 $ 1.68 $ 1.81
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(a) During the fourth quarter of 2002 ALLETE included a $5.5 million,
or $0.07 per share, one-time non-cash charge related to the
indefinite delay of a generation project in Superior, Wisconsin.
(b) Discontinued operations included the operating results of ALLETE's
Water Services businesses, the auto transport business and the
retail store. During the first six months of 2002 ALLETE included
$3.9 million, or $0.05 per share, in charges to complete the exit
from the auto transport business and the retail business. During
the fourth quarter of 2001 ALLETE recognized a $4.4 million, or
$0.06 per share, estimated charge to exit the auto transport
business.
Statistical Data
Corporate
Common Stock
High $ 23.80 $ 25.85 $ 31.10 $ 26.89
Low $ 18.65 $ 21.14 $ 18.50 $ 20.19
Close $ 22.68 $ 25.20 $ 22.68 $ 25.20
Book Value $ 14.39 $ 13.63 $ 14.39 $ 13.63
Energy Services
Millions of Kilowatthours
Sold
Utility
Retail
Residential 285.7 254.3 1,044.4 997.5
Commercial 319.9 301.1 1,257.0 1,233.9
Industrial 1,795.4 1,627.0 6,946.2 6,549.3
Other 20.9 18.6 77.4 75.3
Resale 395.4 462.6 1,806.7 2,085.8
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2,817.3 2,663.6 11,131.7 10,941.8
Nonregulated 321.3 38.5 1,149.2 140.4
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3,138.6 2,702.1 12,280.9 11,082.2
Automotive Services
Vehicles Sold
Wholesale 393,000 408,000 1,741,000 1,761,000
Total Loss 44,000 45,000 175,000 148,000
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437,000 453,000 1,916,000 1,909,000
Conversion Rate - Wholesale
Vehicles 55.1% 54.5% 59.0% 58.1%
Vehicles Financed 231,000 228,000 946,000 904,000
EBITDAL (Millions) (a) $ 43.2 $ 47.7 $ 229.8 $ 221.2
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(a) Earnings Before Interest, Taxes, Depreciation, Amortization and
Lease Expense
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