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THIRD QUARTER EARNINGS REPORTED BY MINNESOTA POWER

 THIRD QUARTER EARNINGS REPORTED BY MINNESOTA POWER
 DULUTH, Minn., Oct. 16 /PRNewswire/ -- Minnesota Power (NYSE: MPL)


today reported third quarter 1992 earnings per share of common stock of 46 cents, compared with 80 cents in 1991. Operating revenues in the third quarter increased 2 percent to $117.1 million while net income was $14.1 million, down from $24.7 million in the third quarter of 1991. For the first nine months of 1992, earnings per share were $1.57, compared with $1.76 in the prior year.
 Minnesota Power Chairman and President Arend Sandbulte attributed the lower earnings in third quarter 1992, compared with 1991, primarily to one-time gains that occurred in 1991 -- a favorable court decision, 12 cents, and the sale of certain water assets in Florida, 14 cents. Earnings from electric utility operations increased, while financial results from the company's paper business declined, he said.
 The company's core electric business, which also includes income from a securities investment portfolio and interest income, contributed 87 percent of earnings in the third quarter, Sandbulte said.
 "The paper mill's earnings have been hurt by the economic recession, which continues to depress prices of the publication-grade paper we produce at Lake Superior Paper Industries," Sandbulte said. "Improved financial performance by our water utilities will depend on our obtaining final regulatory approval of rate increases in Florida and the Carolinas. Interim rate relief granted thus far, about $7.5 million in two cases in Florida, makes us cautiously optimistic that final rate orders will provide adequate relief."
 Sandbulte said Minnesota Power water and wastewater subsidiaries have a total of $19 million in annual rate increase requests pending. An interim rate decision is due in a third Florida case late this year, and final orders in all three major Florida cases should be received in the first half of 1993.
 For the 12 months ended Sept. 30, 1992, earnings per share increased to $2.27 from $2.19 for the previous 12 months, reflecting improved financial results from electric utility operations, Sandbulte said.
 Minnesota Power paid quarterly dividends of 48-1/2 cents per share of common stock on Sept. 1, 1992. The company's core business is to supply electric power in upper Minnesota. Subsidiaries are involved in water and wastewater treatment operations, paper manufacturing and coal mining.
 MINNESOTA POWER
 CONSOLIDATED STATEMENT OF INCOME
 FOR THE PERIODS ENDED SEPTEMBER 1992 AND 1991
 (In thousands, except per share amounts -- unaudited)
 Third Quarter
 1992 1991
 Operating revenues
 Electric $96,967 $97,988
 Water 12,411 10,189
 Coal 5,639 5,396
 Gas 2,069 1,591
 Total operating revenues 117,086 115,164
 Operating expenses
 Fuel for electric generation 21,480 17,126
 Purchased power 19,542 27,035
 Other operation 28,521 26,513
 Maintenance 6,673 7,244
 Depreciation 9,893 9,197
 Property and general taxes 10,220 9,696
 Income taxes 3,468 2,457
 Total operating expenses 99,797 99,268
 Operating income 17,289 15,896
 Other income and (deductions)
 Securities investment and
 interest income 7,241 10,601
 Income from equity investments 532 4,349
 Miscellaneous (a) 1,773 15,495
 Allowance for funds used during
 construction 163 317
 Income taxes (764) (9,366)
 Total other income 8,945 21,396
 Income before interest charges 26,234 37,292
 Interest charges
 Interest on long-term debt 10,708 11,210
 Other interest and amortization 1,579 1,745
 Allowance for borrowed funds used
 during construction (108) (410)
 Total interest charges 12,179 12,545
 Net income $14,055 $24,747
 Dividends on preferred stock (991) (1,068)
 Tax benefit of ESOP dividends 705 387
 Earnings available for common stock 13,769 24,066
 Earnings per average share of
 common stock $.46 $.80
 Average common shares outstanding 29,442 29,666
 Year to Date
 1992 1991
 Operating revenues
 Electric $302,587 $305,596
 Water 35,206 31,879
 Coal 17,034 15,546
 Gas 8,955 7,897
 Total operating revenues 363,782 360,918
 Operating expenses
 Fuel for electric generation 69,143 60,376
 Purchased power 59,225 81,709
 Other operation 88,613 82,088
 Maintenance 18,369 20,442
 Depreciation 29,485 27,182
 Property and general taxes 32,424 29,063
 Income taxes 12,738 8,631
 Total operating expenses 309,997 309,491
 Operating income 53,785 51,427
 Other income and (deductions)
 Securities investment and
 interest income 25,600 29,059
 Income from equity investments 4,033 9,048
 Miscellaneous (a) 2,722 14,487
 Allowance for funds used during
 construction 1,021 429
 Income taxes (4,519) (12,403)
 Total other income 28,857 40,620
 Income before interest charges 82,642 92,047
 Interest charges
 Interest on long-term debt 32,403 31,853
 Other interest and amortization 4,748 5,228
 Allowance for borrowed funds used
 during construction (1,224) (727)
 Total interest charges 35,927 36,354
 Net income $46,715 $55,693
 Dividends on preferred stock (3,017) (3,288)
 Tax benefit of ESOP dividends 2,641 1,454
 Earnings available for common stock 46,339 53,859
 Earnings per average share of
 common stock $1.57 $1.76
 Average common shares outstanding 29,439 30,615
 12 Months Ended
 1992 1991
 Operating revenues
 Electric $404,763 $407,254
 Water 46,595 43,361
 Coal 22,887 20,923
 Gas 12,762 11,350
 Total operating revenues 487,007 482,888
 Operating expenses
 Fuel for electric generation 92,563 83,276
 Purchased power 82,222 104,417
 Other operation 118,417 113,624
 Maintenance 24,022 28,043
 Depreciation 39,464 35,941
 Property and general taxes 42,384 38,712
 Income taxes 16,285 11,699
 Total operating expenses 415,357 415,712
 Operating income 71,650 67,176
 Other income and (deductions)
 Securities investment and
 interest income 32,462 32,848
 Income from equity investments 7,775 12,205
 Miscellaneous (a) 9,971 17,737
 Allowance for funds used during
 construction 1,296 528
 Income taxes (6,928) (11,802)
 Total other income 44,576 51,516
 Income before interest charges 116,226 118,692
 Interest charges
 Interest on long-term debt 43,113 42,814
 Other interest and amortization 8,295 6,557
 Allowance for borrowed funds used
 during construction (1,685) (1,005)
 Total interest charges 49,723 48,366
 Net income $66,503 $70,326
 Dividends on preferred stock (4,040) (4,398)
 Tax benefit of ESOP dividends 4,692 1,454
 Earnings available for common stock 67,155 67,382
 Earnings per average share of
 common stock $2.27 $2.19
 Average common shares outstanding 29,468 30,503
 (a) Miscellaneous for the 12 months ended Sept. 30, 1992, includes $7.3 million from operations and the disposition of the steam project. Miscellaneous in 1991 includes pretax income of $7.6 million from a favorable court decision and $6.7 million from the sale of water plant assets.
 -0- 10/16/92
 /CONTACT: Warren F. Hudelson of Minnesota Power, 218-723-3934/
 (MPL) CO: Minnesota Power ST: Minnesota IN: OIL SU: ERN


KH -- MN013 -- 1073 10/16/92 15:33 EDT
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