ALLETE Reports First Quarter Earnings; Reaffirms 2005 Earnings Guidance.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. -- ALLETE, Inc. (NYSE NYSESee: New York Stock Exchange :ALE) today reported first quarter 2005 earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of 66 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. compared with 76 cents per share in the first quarter of 2004. Including discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , earnings were 64 cents per share on net income of $17.4 million and operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. of $206.9 million. During the quarter the company recorded a $3.3 million, or 12 cents per share, charge related to its emerging technology investment portfolio, which impacted the comparison to the same period a year ago. "We remain on track to meet our expectation for earnings growth despite the charge," said Don Shippar, ALLETE 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 are pleased with our first quarter financial performance." Net income at the company's Regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. Utility business was $12.9 million for the quarter compared with $12.5 million a year ago. Operating revenue for this business was 4.4 percent higher than in 2004, partially due to increased electric sales to other power suppliers combined with higher prices. Retail electric sales remained strong. First quarter results include $1.2 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. of outage out·age n. 1. A quantity or portion of something lacking after delivery or storage. 2. A temporary suspension of operation, especially of electric power. expense, primarily due to planned maintenance at one of the company's generating stations. Nonregulated Energy Operations net income was $1.6 million for the quarter versus a $0.2 million net loss in 2004. Net income from the Taconite taconite, low-grade iron ore, a flintlike rock usually containing less than 30% iron. Resistant to drilling and to the extraction of its contained metal, the rock was long considered worthless. Experiments begun in 1912 by the American scientist Edward W. Harbor harbor: see port. facility was higher than the same period a year ago primarily due to a power sales contract Sales Contract Contract between a seller and buyer for the sale of goods, services, or both. that went into effect in May 2004. Positive earnings contributions from the Taconite Harbor facility and BNI BNI Business Network International BNI Business Networking International BNI Bank Negara Indonesia BNI Bechtel National, Inc. BNI British Nursing Index BNI Barrow Neurological Institute (Phoenix, AZ) Coal were partially offset by a $1.9 million net loss at the Kendall County Kendall County is the name of several counties in the United States:
Net income at the Real Estate business was $6.9 million for the quarter compared with $10.9 million in the first quarter last year. Real estate sales were strong at ALLETE Properties' southwest Florida Southwest Florida is a region of Florida located along its gulf coast, south of the Tampa Bay area, west of Lake Okeechobee and mostly north of the Everglades. It consists of five coastal counties from Manatee County south to Collier County, although it sometimes is considered to operations this quarter. The company expects a growing and consistent annual earnings contribution from this business; however, quarterly results will vary due to the timing of real estate transaction closings. "Site preparation is underway at ALLETE Properties' Town Center project in Palm Coast," said Shippar, "and several pending sales contracts will close this year." Flagler County, Florida Flagler County is a county located in the U.S. state of Florida. As of the 2000 census, the population was 49,832. The U.S. Census Bureau 2006 estimate for the county is 83,084 [1], its 66. , where Palm Coast is located, was recently named the fastest-growing county 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. by the U.S. Census Bureau Noun 1. Census Bureau - the bureau of the Commerce Department responsible for taking the census; provides demographic information and analyses about the population of the United States Bureau of the Census . ALLETE's "Other" segment posted a $3.4 million net loss in the first quarter versus a $1.8 million net loss in the first quarter a year ago. The previously mentioned $3.3 million charge for two emerging technology investments was partially offset by lower interest and corporate expenses. "We recently announced the successful exit from the Kendall County power purchase agreement, which will eliminate its ongoing annual losses of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $8 million after-tax," said Shippar. Excluding a second quarter charge of $50.4 million associated with the Kendall Ken·dall , Edward Calvin 1886-1972. American biochemist. He shared a 1950 Nobel Prize for discoveries concerning the hormones of the adrenal cortex. transaction and earnings ALLETE may realize from investments in growth initiatives, the company continues to expect 45 to 50 percent earnings per share growth from continuing operations in 2005 compared to last year. Shippar cited several additional reasons for the expected earnings growth: --Continued lower interest charges ($1.3 million after-tax lower in the first quarter of 2005 versus 2004) due to debt repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan and refinancing Refinancing An extension and/or increase in amount of existing debt. in 2004; --Strong electric sales and a vigorous 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 real estate market; and --Fewer shares outstanding for earnings-per-share calculation purposes. 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 provides energy services in the upper Midwest The Upper Midwest is a region of the United States with no universally agreed-upon boundary, but it almost always lies within the US Census Bureau's definition of the Midwest and includes the states of Minnesota and Wisconsin, as well as at least the Upper Peninsula of Michigan. and has significant real estate holdings in Florida. More information about the company is available on ALLETE'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 March 31, 2005 and 2004
Millions Except Per Share Amounts
Quarter Ended
2005 2004
----------------------------------------------------------------------
Operating Revenue $206.9 $209.0
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Operating Expenses
Fuel and Purchased Power 69.1 68.9
Operating and Maintenance 83.1 83.6
Depreciation 12.6 12.4
----------------------------------------------------------------------
Total Operating Expenses 164.8 164.9
----------------------------------------------------------------------
Operating Income from Continuing Operations 42.1 44.1
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Other Income (Expense)
Interest Expense (6.8) (9.1)
Other (4.2) 0.4
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Total Other Expense (11.0) (8.7)
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Income from Continuing Operations Before
Minority Interest and Income Taxes 31.1 35.4
Minority Interest 1.2 1.4
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Income from Continuing Operations Before
Income Taxes 29.9 34.0
Income Tax Expense 11.9 12.6
----------------------------------------------------------------------
Income from Continuing Operations Before
Change in Accounting Principle 18.0 21.4
Income (Loss) from Discontinued Operations -
Net of Tax (0.6) 31.3
Change in Accounting Principle - Net of Tax - (7.8)
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Net Income $17.4 $44.9
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Average Shares of Common Stock
Basic 27.2 28.1
Diluted 27.4 28.3
----------------------------------------------------------------------
Basic Earnings (Loss) Per Share of Common
Stock
Continuing Operations $0.66 $0.77
Discontinued Operations (0.02) 1.11
Change in Accounting Principle - (0.28)
---------------------------------------------------------------------
$0.64 $1.60
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Diluted Earnings (Loss) Per Share of Common
Stock
Continuing Operations $0.66 $0.76
Discontinued Operations (0.02) 1.10
Change in Accounting Principle - (0.27)
----------------------------------------------------------------------
$0.64 $1.59
----------------------------------------------------------------------
Dividends Per Share of Common Stock $0.3000 $0.8475
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Consolidated Balance Sheet
Millions
Mar. 31, Dec. 31, Mar. 31, Dec. 31,
2005 2004 2005 2004
--------------------------------- -----------------------------------
Assets Liabilities and
Shareholders'
Equity
Cash and Cash Current
Equivalents $213.2 $194.1 Liabilities $98.2 $97.8
Restricted Cash - 30.3 Long-Term Debt 389.6 390.2
Other Current Other
Assets 140.4 141.7 Liabilities 297.4 300.9
Property, Plant Discontinued
and Equipment 880.8 883.1 Operations 5.4 12.0
Shareholders'
Investments 118.9 124.5 Equity 617.5 630.5
Discontinued
Operations 4.5 4.9
Other 50.3 52.8
--------------------------------- -----------------------------------
Total
Liabilities and
Shareholders'
Total Assets $1,408.1 $1,431.4 Equity $1,408.1 $1,431.4
--------------------------------- -----------------------------------
Quarter Ended
March 31,
ALLETE, Inc. 2005 2004
----------------------------------------------------------------------
Net Income (Loss)
Millions
Regulated Utility $12.9 $12.5
Nonregulated Energy Operations 1.6 (0.2)
Real Estate 6.9 10.9
Other (3.4) (1.8)
----------------------------------------------------------------------
Income from Continuing Operations 18.0 21.4
Income (Loss) from Discontinued Operations (0.6) 31.3
Change in Accounting Principle - (7.8)
----------------------------------------------------------------------
Net Income $17.4 $44.9
----------------------------------------------------------------------
Diluted Earnings (Loss) Per Share
Continuing Operations $0.66 $0.76
Discontinued Operations (0.02) 1.10
Change in Accounting Principle - (0.27)
----------------------------------------------------------------------
$0.64 $1.59
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Note: In 2005, we began allocating corporate charges and interest
expenses to our business segments. For comparative purposes,
segment information for 2004 has been restated to reflect the
new allocation method used in 2005 for corporate charges and
interest expense. This restatement had no impact on net income
or earnings per share.
Kilowatthours Sold
Millions
Regulated Utility
Retail and Municipals
Residential 319.8 310.3
Commercial 339.8 331.9
Industrial 1,777.1 1,766.8
Municipals 222.0 213.8
Other 20.4 20.2
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2,679.1 2,643.0
Other Power Suppliers 236.7 217.2
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2,915.8 2,860.2
Nonregulated Energy Operations 353.9 434.0
----------------------------------------------------------------------
3,269.7 3,294.2
----------------------------------------------------------------------
Real Estate
Acres Sold 483 1,268
Lots Sold 7 199
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