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MINNESOTA POWER EARNINGS RISE 28 PERCENT IN THIRD QUARTER

 DULUTH, Minn., Oct. 22 /PRNewswire/ -- Minnesota Power (NYSE: MPL) today reported third quarter earnings per share of common stock of 59 cents, compared with 46 cents in 1992.
 Operating revenues in the third quarter total $126.1 million, compared with $117.1 million in 1992. Net income was $18.7 million, compared with $14.1 million a year ago.
 Minnesota Power Chairman and President Arend Sandbulte attributed third quarter 1993's improved financial results to increased revenues from the company's electric and water utilities.
 "Compared with last year, electric revenues were up 6 percent in 1993's third quarter," Sandbulte said. "This reflects an increase in power sales of other utilities, recovery through customer bills of fuel- and purchased power-related costs, and a one-time adjustment relating to previously deferred revenues for electric service provided but not billed."
 Sandbulte said revenues were reduced about $1.8 million in the third quarter as a result of the Aug. 1 shutdown of National Steel Pellet Company's taconite production facility at Keewatin, Minn., a large electric customer. National's owners have announced plans to buy replacement pellets from other taconite plants and say the Keewatin facility will be closed indefinitely.
 "The impact of this reduction in revenues is being partially offset by expense reductions and increased sales of electricity to other power suppliers and to other taconite producers," Sandbulte said.
 Revenue from Minnesota Power's water utilities also increased to $16.3 million in third quarter 1993 from $12.4 million in third quarter 1992, reflecting higher rates in effect this year. Low prices for publication-grade paper continue to hurt the financial performance of Lake Superior Paper Industries, a Duluth paper mill owned 50 percent by Minnesota Power, Sandbulte said.
 For the 12 months ended September 1993, the company's earnings per share were $2.48, compared with $2.35 for the previous 12 months. Year- to-date earnings through the first three quarters of 1993 were $1.66, compared with $1.65 for the same period in the previous year.
 Minnesota Power on Sept. 1 paid a quarterly dividend of 49.5 cents per common share, up 1 cent from the company's quarterly dividend in 1992.
 Minnesota Power supplies electric power in upper Minnesota and northwestern Wisconsin. A subsidiary operates water and wastewater treatment utilities in Florida and the Carolinas. Other company-owned businesses include paper manufacturing, coal mining and a new plant that converts office scrap paper into recycled fiber for use in the region's paper mills. The recycled fiber plant began operating in September.
 MINNESOTA POWER
 CONSOLIDATED STATEMENT OF INCOME
 FOR THE PERIODS ENDED SEPTEMBER 1993 AND 1992
 (In thousands, except per share amounts - Unaudited)
 Third Quarter Year-to-Date
 1993 1992 1993 1992
 Operating revenue
 Electric $102,960 $96,967 $309,416 $302,519
 Water 16,323 12,411 46,390 35,206
 Coal 5,724 5,639 17,465 17,034
 Gas 1,084 2,069 7,040 8,955
 Total operating revenue 126,091 117,086 380,311 363,714
 Operating expenses
 Fuel for electric generation 22,112 21,480 64,297 65,236
 Purchased power 17,976 19,542 62,864 59,225
 Other operation 28,484 28,521 89,582 88,613
 Maintenance 6,495 6,673 19,412 18,369
 Depreciation 10,763 9,893 32,028 29,485
 Property and general taxes 12,442 10,220 35,971 32,424
 Income taxes 6,600 3,468 16,323 14,292
 Total operating expenses 104,872 99,797 320,477 307,644
 Operating income 21,219 17,289 59,834 56,070
 Other income and (deductions)
 Securities investment and
 interest income 8,450 7,241 25,923 25,600
 Income from equity investments 794 532 3,131 4,033
 Miscellaneous 368 1,773 4,202 2,723
 Allowance for funds used
 during construction 46 163 146 1,021
 Income taxes (1,396) (764) (8,719) (4,519)
 Total other income 8,262 8,945 24,683 28,858
 Income before interest charges
 and extraordinary item 29,481 26,234 84,517 84,928
 Interest charges
 Interest on long-term debt 10,031 10,708 29,338 32,403
 Other interest and amortization 961 1,579 3,463 4,748
 Allowance for borrowed funds
 used during construction (168) (108) (426) (1,224)
 Total interest charges 10,824 12,179 32,375 35,927
 Income before
 extraordinary item 18,657 14,055 52,142 49,001
 Extraordinary gain on early
 extinguishment of debt -- -- -- --
 Net income $18,657 $14,055 $52,142 $49,001
 Dividends on preferred stock (846) (991) (2,542) (3,017)
 Tax benefits of ESOP dividends -- 705 -- 2,641
 Earnings available
 for common stock $17,811 $13,769 $49,600 $48,625
 Average shares of common
 stock outstanding 30,190 29,442 29,796 29,439
 Earnings per share of common stock
 Before extraordinary item $.59 $.46 $1.66 $1.65
 Extraordinary item -- -- -- --
 Total earnings per share $.59 $.46 $1.66 $1.65
 12 Months Ended
 1993 1992
 Operating revenue
 Electric $412,624 $404,694
 Water 59,474 46,595
 Coal 23,581 22,887
 Gas 10,317 12,762
 Total operating revenue 505,996 486,938
 Operating expenses
 Fuel for electric generation 82,184 88,656
 Purchased power 88,999 82,222
 Other operation 120,701 118,417
 Maintenance 25,829 24,022
 Depreciation 41,614 39,464
 Property and general taxes 44,528 42,384
 Income taxes 21,505 17,838
 Total operating expenses 425,360 413,003
 Operating income 80,636 73,935
 Other income and (deductions)
 Securities investment and
 interest income 39,664 32,462
 Income from equity investments 3,450 7,775
 Miscellaneous 3,418 9,972(a)
 Allowance for funds used
 during construction 75 1,296
 Income taxes (11,717) (6,928)
 Total other income 34,890 44,577
 Income before interest charges
 and extraordinary item 115,526 118,512
 Interest charges
 Interest on long-term debt 38,778 43,113
 Other interest and amortization 5,458 8,295
 Allowance for borrowed funds
 used during construction (308) (1,685)
 Total interest charges 43,928 49,723
 Income before
 extraordinary item 71,598 68,789
 Extraordinary gain on early
 extinguishment of debt 4,831 --
 Net income $76,429 $68,789
 Dividends on preferred stock (3,332) (4,040)
 Tax benefits of ESOP dividends 565 4,692
 Earnings available
 for common stock $73,662 $69,441
 Average shares of common
 stock outstanding 29,716 29,468
 Earnings per share of common stock
 Before extraordinary item $2.32 $2.35
 Extraordinary item .16 --
 Total earnings per share $2.48 $2.35
 (a) Miscellaneous for the 12 months ended Sept. 30, 1992, includes pretax income of $2.4 million from a favorable court decision and $7.3 million from operations and sale of the steam project.
 -0- 10/22/93
 /CONTACT: Warren Hudelson of Minnesota Power, 218-723-3934/
 (MPL)


CO: Minnesota Power ST: Minnesota IN: UTI SU: ERN

DS-CP -- MN014 -- 5794 10/22/93 14:15 EDT
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Date:Oct 22, 1993
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