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MINNESOTA POWER REPORTS 1993 SECOND QUARTER EARNINGS

 DULUTH, Minn., July 16 /PRNewswire/ -- Minnesota Power (NYSE: MPL) reported today that its second quarter 1993 earnings per share of common stock were 45 cents, compared with 65 cents in 1992.
 Operating revenues in the second quarter totaled $126.3 million, compared to $121.5 million in 1992. Net income was $14.4 million, compared to $18.8 million a year ago.
 "Electric revenues were slightly higher in the second quarter of 1993 compared to 1992, and water operations continued to show improved performance," said Minnesota Power Chairman and President Arend Sandbulte. "The lower second quarter earnings for 1993 were mostly caused by higher purchased power and maintenance costs due to scheduled power plant shutdowns and less income from our securities portfolio.
 "The majority of the purchase power costs will be recoverable through the fuel adjustment clause during the third quarter," Sandbulte said. "The reduction in income from the securities portfolio is primarily a reflection of more limited current market opportunities."
 Water revenues increased to $16 million during the second quarter of 1993 from $11.8 million in 1992, reflecting rate increases received by the company's Florida water utility during the first half of this year.
 Low prices for publication-grade paper continued to hurt the earnings performance of Lake Superior Paper Industries, a Duluth paper mill owned 50 percent by Minnesota Power.
 For the 12 months ended June 1993, earnings per share were $2.35 on operating revenues of $497 million, compared with $2.69 on operating revenues of $485 million for the previous 12 months. In the 12 months ended June 1992, earnings included income from three one-time events: a favorable court decision and sale of water and steam assets.
 On June 1, Minnesota Power paid a quarterly dividend of 49.5 cents per 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 and coal mining.
 MINNESOTA POWER
 CONSOLIDATED STATEMENT OF INCOME
 FOR THE PERIODS ENDED JUNE 30, 1993 AND 1992
 (In thousands except per share amounts - Unaudited)
 Second quarter
 6/30/93 6/30/92
 Operating Revenues
 Electric $102,156 $101,258
 Water 16,026 11,847
 Coal 6,070 5,579
 Gas 2,088 2,823
 Total operating revenues 126,340 121,507
 Operating Expenses
 Fuel for electric generation 18,394 22,238
 Purchases power 25,724 19,303
 Other operation 30,492 28,997
 Maintenance 7,733 5,918
 Depreciation 10,801 10,214
 Property and general taxes 11,298 10,417
 Income taxes 4,807 5,141
 Total operating expenses 108,529 102,228
 Operating income 17,811 19,279
 Other income and (deductions)
 Securities investment and interest
 income 7,305 9,724
 Income form equity investments 1,713 1,055
 Miscellaneous 956 1,327
 Allowance for funds used
 during construction 48 507
 Income taxes (2,751) (1,512)
 Total other income 7,271 11,101
 Income before interest charges
 and extraordinary item 25,082 30,380
 Interest Charges
 Interest on long-term debt 9,538 10,797
 Other interest and amortization 1,256 1,557
 Allowance for borrowed funds used
 during construction (138) (725)
 Total interest charges 10,656 11,629
 Income before extraordinary item 14,426 18,751
 Extraordinary gain on early
 extinguishment of debt -- --
 Net income $14,426 $18,751
 Dividends on preferred stock (845) (1,003)
 Tax benefits of ESOP dividends -- 1,204
 Earnings available for common stock $13,580 $18,952
 Average shares of common stock
 outstanding 29,675 29,434
 Earnings per share of common stock
 Before extraordinary item $0.45 $0.65
 Extraordinary item -- --
 Total earnings per share $0.45 $0.65
 Year to date
 1993 1992
 Operating Revenues
 Electric $206,456 $205,552
 Water 30,067 22,795
 Coal 11,741 11,395
 Gas 5,956 6,886
 Total operating revenues 254,220 246,628
 Operating Expenses
 Fuel for electric generation 42,185 43,756
 Purchases power 44,888 39,683
 Other operation 61,098 60,092
 Maintenance 12,917 11,696
 Depreciation 21,265 19,593
 Property and general taxes 23,529 22,203
 Income taxes 9,723 10,823
 Total operating expenses 215,505 207,846
 Operating income 38,615 38,782
 Other income and (deductions)
 Securities investment and interest
 income 17,473 18,359
 Income form equity investments 2,337 3,501
 Miscellaneous 3,835 949
 Allowance for funds used
 during construction 100 858
 Income taxes (7,323) (3,755)
 Total other income 16,422 19,912
 Income before interest charges
 and extraordinary item 55,037 58,594
 Interest Charges
 Interest on long-term debt 19,307 21,695
 Other interest and amortization 2,503 3,169
 Allowance for borrowed funds used
 during construction (258) (1,116)
 Total interest charges 21,552 23,748
 Income before extraordinary 33,485 34,946
 Extraordinary gain on early
 extinguishment of debt -- --
 Net income $33,485 $34,946
 Dividends on preferred stock (1,696) (2,026)
 Tax benefits of ESOP dividends -- 1,936
 Earnings available for common stock $31,789 $34,856
 Average shares of common stock
 outstanding 29,583 29,438
 Earnings per share of common stock
 Before extraordinary item $1.07 $1.19
 Extraordinary item -- --
 Total earnings per share $1.07 $1.19
 12 Months ended
 1993 1992
 Operating Revenues
 Electric $406,630 $405,715
 Water 55,561 44,373
 Coal 23,496 22,645
 Gas 11,302 12,285
 Total operating revenues 496,989 485,018
 Operating Expenses
 Fuel for electric generation 81,552 84,302
 Purchases power 90,565 89,716
 Other operation 120,737 116,410
 Maintenance 26,007 24,593
 Depreciation 40,743 38,769
 Property and general taxes 42,307 41,859
 Income taxes 18,373 16,827
 Total operating expenses 420,284 412,476
 Operating income 76,705 72,542
 Other income and (deductions)
 Securities investment and interest
 income 38,456 35,822
 Income form equity investments 3,186 11,592
 Miscellaneous 4,822 23,695(a)
 Allowance for funds used
 during construction 192 1,450
 Income taxes (11,083) (15,530)
 Total other income 35,573 57,029
 Income before interest charges
 and extraordinary item 112,278 129,571
 Interest Charges
 Interest on long-term debt 39,455 43,615
 Other interest and amortization 6,076 8,461
 Allowance for borrowed funds used
 during construction (249) (1,986)
 Total interest charges 45,282 50,090
 Income before extraordinary 66,996 79,481
 Extraordinary gain on early
 extinguishment of debt 4,831 --
 Net income $71,827 $79,481
 Dividends on preferred stock (3,477) (4,117)
 Tax benefits of ESOP dividends 1,271 4,375
 Earnings available for common stock $69,621 $79,739
 Average shares of common stock
 outstanding 29,519 29,524
 Earnings per share of common stock
 Before extraordinary item $2.19 $2.69
 Extraordinary item $0.16 --
 Total earnings per share $2.35 $2.69
 (a) Miscellaneous for 12 months ending June 30, 1992, includes pretax income of $10.1 million from a favorable court decision, $6.7 million form the sale of water plant assets, and $8 million from the operations and sale of the steam project.
 -0- 7/16/93
 /CONTACT: Warren F. Hudelson of Minnesota Power, 218-723-3934/
 (MPL)


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

DB -- MN020 -- 2722 07/16/93 18:30 EDT
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Date:Jul 16, 1993
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