ALLETE Reports Second Quarter 2006 Earnings; Earnings Per Share from Continuing Operations Increase 29%, Excluding One-Time 2005 Charge.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 (NYSE NYSESee: New York Stock Exchange :ALE) today reported second quarter 2006 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 $0.49 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared to a loss of $1.46 in the second quarter of 2005. The results a year ago were impacted by a $1.84 per share charge related to the assignment of a Kendall County Kendall County is the name of several counties in the United States:
adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge, ALLETE's second quarter earnings per share from continuing operations are 29 percent higher in 2006 than in 2005. "Halfway Halfway is the name of several places:
During the quarter, income from ALLETE's real estate segment was driven by contract closings at the Town Center at Palm Coast development in northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. 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 . ALLETE Properties net income doubled from $2.8 million in 2005 to $5.6 million in 2006. As of June June: see month. 30, 2006, ALLETE had a total of $128.9 million of land sales under contract, up from $85.3 million at the end of March 2006. Those contracts are expected to close over the next several years. Earnings from ALLETE's energy businesses were $7.7 million in the second quarter of 2006, the same as the comparable period a year ago, excluding the one-time Kendall Ken·dall , Edward Calvin 1886-1972. American biochemist. He shared a 1950 Nobel Prize for discoveries concerning the hormones of the adrenal cortex. charge. Plant maintenance at 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 Power generating facilities resulted in $1.1 million of additional 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. operating and maintenance expense during the quarter compared to 2005. In late May, ALLETE made its initial investment in the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Transmission Company and as of June 30, had invested a total of $11.5 million. Shippar said the income contribution from ATC ATC Air Traffic Control ATC Average Total Cost ATC Certified Athletic Trainer ATC At the Center (Hartford, Maine retreat center) ATC Applied Technology Council ATC All Things Considered will accelerate as ALLETE continues to make additional investments during the year. He noted that the company intends to invest an additional $48.5 million in ATC by year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. , giving ALLETE an ownership interest of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. nine percent. ALLETE's corporate headquarters are located in Duluth, Minnesota. 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.
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ALLETE, Inc.
Consolidated Statement of Income
For the Periods Ended June 30, 2006 and 2005
Millions Except Per Share Amounts
Quarter Ended Year to Date
2006 2005 2006 2005
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Operating Revenue $178.3 $174.4 $370.8 $367.7
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Operating Expenses
Fuel and Purchased Power 63.0 68.9 132.4 136.5
Operating and Maintenance 76.8 71.7 151.3 144.4
Kendall County Charge - 77.9 - 77.9
Depreciation 12.2 11.9 24.4 23.8
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Total Operating Expenses 152.0 230.4 308.1 382.6
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Operating Income (Loss) from
Continuing Operations 26.3 (56.0) 62.7 (14.9)
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Other Income (Expense)
Interest Expense (6.4) (6.7) (12.8) (13.5)
Other 3.4 1.5 5.1 (2.7)
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Total Other Expense (3.0) (5.2) (7.7) (16.2)
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Income (Loss) from Continuing
Operations Before Minority
Interest and Income Taxes 23.3 (61.2) 55.0 (31.1)
Minority Interest 0.8 0.2 2.1 1.4
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Income (Loss) from Continuing
Operations Before Income Taxes 22.5 (61.4) 52.9 (32.5)
Income Tax Expense (Benefit) 8.9 (21.6) 20.5 (10.1)
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Income (Loss) from Continuing
Operations 13.6 (39.8) 32.4 (22.4)
Loss from Discontinued Operations
- Net of Tax (0.4) (0.5) (0.4) (0.5)
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Net Income (Loss) $13.2 $(40.3) $32.0 $(22.9)
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Average Shares of Common Stock
Basic 27.7 27.2 27.6 27.2
Diluted 27.9 27.2 27.8 27.2
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Basic Earnings (Loss) Per Share of
Common Stock Continuing
Operations $0.50 $(1.46) $1.18 $(0.82)
Discontinued Operations (0.02) (0.02) (0.02) (0.02)
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$0.48 $(1.48) $1.16 $(0.84)
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Diluted Earnings (Loss) Per Share
of Common Stock
Continuing Operations $0.49 $(1.46) $1.17 $(0.82)
Discontinued Operations (0.02) (0.02) (0.02) (0.02)
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$0.47 $(1.48) $1.15 $(0.84)
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Dividends Per Share of Common
Stock $0.3625 $0.3150 $0.7250 $0.6150
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Consolidated Balance Sheet
Millions
Jun. 30, Dec. 31,
2006 2005
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Assets
Cash and Cash Equivalents $62.8 $89.6
Short-Term Investments 120.4 116.9
Other Current Assets 157.8 167.0
Property, Plant and Equipment 871.6 860.4
Investments 127.8 117.7
Discontinued Operations - 2.6
Other 45.7 44.6
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Total Assets $1,386.1 $1,398.8
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Jun. 30, Dec. 31,
2006 2005
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Liabilities and Shareholders' Equity
Current Liabilities $79.5 $104.0
Current Maturities 61.6 2.7
Long-Term Debt 326.9 387.8
Other Liabilities 290.3 288.5
Discontinued Operations - 13.0
Shareholders' Equity 627.8 602.8
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Total Liabilities and Shareholders' Equity $1,386.1 $1,398.8
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Quarter Ended Year to Date
June 30, June 30,
ALLETE, Inc. 2006 2005 2006 2005
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Income (Loss)
Millions
Regulated Utility (a) $6.8 $7.8 $19.8 $20.7
Nonregulated Energy Operations (a,b) 0.9 (50.5) 1.8 (48.9)
Real Estate 5.6 2.8 10.6 9.7
Other 0.3 0.1 0.2 (3.9)
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Income (Loss) from Continuing
Operations 13.6 (39.8) 32.4 (22.4)
Loss from Discontinued Operations (0.4) (0.5) (0.4) (0.5)
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Net Income (Loss) $13.2 $(40.3) $32.0 $(22.9)
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Diluted Earnings (Loss) Per Share
Continuing Operations $0.49 $(1.46) $1.17 $(0.82)
Discontinued Operations (0.02) (0.02) (0.02) (0.02)
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$0.47 $(1.48) $1.15 $(0.84)
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(a) In 2006, financial results for ALLETE's Taconite Harbor Energy
Center are included in the Regulated Utility segment. In 2005,
Taconite Harbor is included in the Nonregulated Energy Operations
segment.
(b) In April 2005, ALLETE recorded a $50.4 million, or $1.84 per
diluted share, charge related to the assignment of the Kendall
County power purchase agreement.
Statistical Data
Corporate
Common Stock
High $48.55 $50.33 $48.55 $50.33
Low $44.34 $40.12 $42.99 $35.65
Close $47.35 $49.90 $47.35 $49.90
Book Value $20.70 $19.22 $20.70 $19.22
Kilowatthours Sold
Millions
Regulated Utility
Retail and Municipals
Residential 229.1 229.9 537.1 549.7
Commercial 315.5 300.5 644.2 640.3
Industrial 1,769.9 1,746.9 3,592.2 3,524.0
Municipals 216.1 199.3 435.4 421.3
Other 18.6 18.1 38.6 38.5
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2,549.2 2,494.7 5,247.5 5,173.8
Other Power Suppliers 515.5 366.9 1,020.6 603.6
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3,064.7 2,861.6 6,268.1 5,777.4
Nonregulated Energy Operations 55.3 399.9 120.9 753.8
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3,120.0 3,261.5 6,389.0 6,531.2
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Real Estate
Town Center Development Project
Commercial Square Footage
Sold 170,695 397,000 250,695 397,000
Residential Units 186 - 186 -
Other Land
Acres Sold 10 54 466 537
Lots Sold - - - 7
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