ALLETE Reports Second-Quarter Net Income Growth of 14 Percent.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)--July 24, 2003
ALLETE, Inc. (NYSE NYSE See: New York Stock Exchange :ALE) today reported second quarter 2003 earnings of 53 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 47 cents per share in the second quarter of 2002. Net income rose 14 percent to $44.4 million on revenue of $409.9 million compared with $38.8 million of net income on $375.9 million of revenue in the second quarter of 2002. "We are pleased with the overall financial results for the quarter," said Dave Gartzke, ALLETE 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 remain confident that our total year performance expectations will be achieved." Net income at Automotive Services was $34.1 million in the second quarter of 2003, an increase of 14 percent over the same time period last year. This was due to increased vehicle sales and improved conversion rates at ADESA's U.S. auctions, and lower interest expense. Conversion rates are the percentage of vehicles sold from those that were run through the auction lanes. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. earnings at Automotive Services were up 11 percent over the same period last year. Energy Services net income was $6.8 million in the quarter compared with $9.7 million for the second quarter of 2002. The decrease was mainly due to the required recognition in 2002 of a $2.8 million mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. accounting gain on the Kendall County Kendall County is the name of several counties in the United States:
Strong real estate sales at ALLETE Properties contributed to the $2.2 million increase in net income from Investments and Corporate Charges. Results 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. were higher than in 2002 when ALLETE recorded exit charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its vehicle transport businesses. 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 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 . 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 June 30, 2003 and 2002
Millions Except Per Share Amounts
Quarter Six Months
Ended Ended
2003 2002 2003 2002
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Operating Revenue
Energy Services $158.5 $154.1 $337.6 $297.0
Automotive Services 240.7 216.8 473.6 425.6
Investments 10.7 5.0 21.6 21.6
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Total Operating Revenue 409.9 375.9 832.8 744.2
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Operating Expenses
Fuel and Purchased Power 64.9 59.2 132.3 108.6
Operations 266.9 242.8 543.1 489.0
Interest 13.9 16.2 28.7 32.1
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Total Operating Expenses 345.7 318.2 704.1 629.7
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Operating Income from Continuing
Operations 64.2 57.7 128.7 114.5
Distributions on Redeemable Preferred
Securities of ALLETE Capital I 1.5 1.5 3.0 3.0
Income Tax Expense 25.3 22.2 49.9 43.9
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Income from Continuing Operations 37.4 34.0 75.8 67.6
Income from Discontinued Operations -
Net of Tax 7.0 4.8 12.9 6.4
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Net Income $44.4 $38.8 $88.7 $74.0
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Average Shares of Common Stock
Basic 82.6 81.0 82.4 80.7
Diluted 82.9 81.7 82.6 81.3
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Earnings Per Share of Common Stock
Basic - Continuing Operations $0.45 $0.42 $0.92 $0.84
Discontinued
Operations 0.09 0.06 0.16 0.08
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$0.54 $0.48 $1.08 $0.92
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Diluted - Continuing Operations $0.45 $0.41 $0.92 $0.83
Discontinued
Operations 0.08 0.06 0.15 0.08
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$0.53 $0.47 $1.07 $0.91
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Dividends Per Share of Common Stock $0.2825 $0.275 $0.565 $0.55
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ALLETE, Inc.
Consolidated Balance Sheet
Millions
Jun. 30, Dec. 31,
2003 2002
----------------------------------------------------------------------
Assets
Current Assets $800.8 $658.4
Property, Plant and Equipment 1,480.6 1,364.7
Investments 166.8 170.9
Goodwill 508.2 499.8
Other 111.4 107.3
Discontinued Operations 341.4 346.1
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Total Assets $3,409.2 $3,147.2
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Jun. 30, Dec. 31,
2003 2002
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Liabilities and Shareholders' Equity
Current Liabilities $786.8 $738.2
Long-Term Debt 753.2 661.3
Other Liabilities 294.4 277.4
Discontinued Operations 170.4 162.9
Mandatorily Redeemable Preferred Securities of
ALLETE Capital I 75.0 75.0
Shareholders' Equity 1,329.4 1,232.4
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Total Liabilities and Shareholders' Equity $3,409.2 $3,147.2
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Quarter Ended Six Months Ended
June 30, June 30,
ALLETE, Inc. 2003 2002 2003 2002
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Net Income
Millions
Energy Services $6.8 $9.7 $19.0 $18.8
Automotive Services 34.1 30.0 60.8 54.9
Investments and Corporate
Charges (3.5) (5.7) (4.0) (6.1)
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Income from Continuing
Operations 37.4 34.0 75.8 67.6
Income from Discontinued
Operations 7.0 4.8 12.9 6.4
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Net Income $44.4 $38.8 $88.7 $74.0
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Diluted Earnings Per Share
Continuing Operations $0.45 $0.41 $0.92 $0.83
Discontinued Operations 0.08 0.06 0.15 0.08
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$0.53 $0.47 $1.07 $0.91
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Statistical Data
Corporate
Common Stock
High $26.70 $31.10 $26.70 $31.10
Low $20.50 $27.09 $18.75 $24.25
Close $26.55 $27.10 $26.55 $27.10
Book Value $15.39 $14.21 $15.39 $14.21
Energy Services
Millions of Kilowatthours
Sold
Utility
Retail
Residential 223.9 232.8 536.8 518.6
Commercial 289.6 295.1 616.0 609.6
Industrial 1,655.0 1,755.2 3,373.6 3,405.0
Other 18.3 17.8 38.8 37.6
Resale 505.4 400.8 913.2 843.7
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2,692.2 2,701.7 5,478.4 5,414.5
Nonregulated 281.1 226.7 700.2 310.3
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2,973.3 2,928.4 6,178.6 5,724.8
Automotive Services
Vehicles Sold
Wholesale 471,000 454,000 933,000 915,000
Total Loss 49,000 44,000 98,000 89,000
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520,000 498,000 1,031,000 1,004,000
Conversion Rate -
Wholesale Vehicles 61.1% 59.7% 61.8% 62.6%
Vehicles Financed 241,000 241,000 474,000 478,000
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