ALLETE Reports 2012 Earnings of $2.58 Per Share

  ALLETE Reports 2012 Earnings of $2.58 Per Share

                    Results in upper end of guidance range

Business Wire

DULUTH, Minn. -- February 15, 2013

ALLETE, Inc. (NYSE: ALE) today reported 2012 earnings of $2.58 per share
compared with $2.65 per share in 2011. Excluding two non-recurring items,
ALLETE's pro-forma earnings in 2011 were $2.39 per share.

The company recorded net income of $97.1 million in 2012 compared with $93.8
million a year ago, an increase of 3.5 percent. Operating revenue was $961.2
million this year versus $928.2 million in 2011.

Income from ALLETE's Regulated Operations segment decreased by $4.3 million in
2012 compared to 2011, however, last year's results included the benefit of
two non-recurring items: the reversal of a $6.2 million, or 18cents per
share, deferred tax liability and a $2.9 million, or 8 cents per share, income
tax benefit. Excluding these items, Regulated Operations increased by $4.8
million.

Continued strong retail and municipal sales, higher cost recovery revenue and
renewable energy tax credits all contributed to the year-over-year increase.
Minnesota Power electric sales to industrial customers increased by nearly two
percent over 2011 to more than 7.5 million kilowatt-hours. These increases
were partially offset by increased operating and maintenance, depreciation and
interest expenses, as well as higher costs under the Square Butte power
purchase agreement.

The Investments and Other segment recorded net income of $1 million in 2012
compared to a net loss of $6.6million in 2011, due primarily to lower state
income tax and interest expense.

Earnings for 2012 were diluted by 16 cents per share due to issuances of
common shares needed to fund major capital investments.

“I'm pleased with our 2012 financial and operational performance as we
executed our multi-faceted growth strategies,” said ALLETE President, Chairman
and CEO Al Hodnik. “Our year-end results were in the upper end of our $2.50 to
$2.60 guidance range.”

Hodnik said he was confident in ALLETE's ability to deliver continued earnings
growth in 2013. “We expect another strong year of energy sales as our regional
economy grows and we will continue to make needed capital investments to
ensure reliability and meet state renewable and environmental mandates.”

ALLETE will host a conference call and webcast at 10:00 a.m. Eastern time
today to discuss details of its financial performance for 2012, and its
outlook for 2013. Interested parties may listen live by calling (877)
303-5852, or by accessing the webcast at www.allete.com. A replay of the call
will be available through February 18, 2013 by calling (855) 859-2056, pass
code 89501500.

ALLETE is an energy company headquartered in Duluth, Minn. ALLETE's energy
businesses include Minnesota Power, Superior Water, Light & Power Co., BNI
Coal and ALLETE Clean Energy. More information about the company is available
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. 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's press releases and other communications may include certain
non-Generally Accepted Accounting Principles (GAAP) financial measures. A
"non-GAAP financial measure" is defined as a numerical measure of a company's
financial performance, financial position or cash flows that excludes (or
includes) amounts that are included in (or excluded from) the most directly
comparable measure calculated and presented in accordance with GAAP in the
company's financial statements.

Non-GAAP financial measures utilized by the Company include presentations of
earnings (loss) per share. ALLETE's management believes that these non-GAAP
financial measures provide useful information to investors by removing the
effect of variances in GAAP reported results of operations that are not
indicative of changes in the fundamental earnings power of the Company's
operations. Management believes that the presentation of the non-GAAP
financial measures is appropriate and enables investors and analysts to more
accurately compare the company's ongoing financial performance over the
periods presented.



ALLETE, Inc.
Consolidated Statement of Income
For the Periods Ended December 31, 2012 and 2011
Millions Except Per Share Amounts

                         Quarter Ended             Year Ended
                        2012        2011        2012        2011
Operating Revenue        $ 256.0    $ 239.2    $ 961.2    $ 928.2 
                                                                
Operating Expenses
Fuel and Purchased           80.0          76.8          308.7         306.6
Power
Operating and                102.3         104.9         397.1         381.2
Maintenance
Depreciation              25.8      23.3      100.2     90.4  
Total Operating              208.1         205           806           778.2
Expenses
                                                                     
Operating Income          47.9      34.2      155.2     150.0 
                                                                     
Other Income (Expense)
Interest Expense             (12.1 )       (11.0 )       (45.5 )       (43.6 )
Equity Earnings in ATC       5.1           4.7           19.4          18.4
Other                     2.6       2.1       6.0       4.4   
Total Other Expense       (4.4  )    (4.2  )    (20.1 )    (20.8 )
                                                                     
Income Before
Non-Controlling              43.5          30.0          135.1         129.2
Interest and Income
Taxes
Income Tax Expense        14.6      10.9      38.0      35.6  
Net Income                28.9      19.1      97.1      93.6  
Less: Non-Controlling
Interest in               —         —         —         (0.2  )
Subsidiaries
Net Income               $ 28.9     $ 19.1     $ 97.1     $ 93.8  
Attributable to ALLETE
                                                                     
Average Shares of
Common Stock
Basic                        38.5          36.0          37.6          35.3
Diluted                   38.6      36.1      37.6      35.4  
                                                                     
Basic Earnings Per         $ 0.76        $ 0.53        $ 2.59        $ 2.66
Share of Common Stock
Diluted Earnings Per       $ 0.75        $ 0.53        $ 2.58        $ 2.65
Share of Common Stock
                                                                     
Dividends Per Share of   $ 0.46     $ 0.445    $ 1.84     $ 1.78  
Common Stock
                                                                             


Consolidated Balance Sheet
Millions

             Dec. 31,    Dec. 31,                      Dec. 31,    Dec. 31,
            2012        2011                         2012        2011
                                            Liabilities and
Assets                                      Shareholders'
                                            Equity
Cash and                                    Current
Short-Term    $ 80.8        $ 101.1         Liabilities       $ 283.4       $ 163.1
Investments
Other
Current         192.4         175.9         Long-Term Debt      933.6         857.9
Assets
Property,                                   Deferred Income
Plant and       2,347.6       1,982.7       Taxes               423.8         373.6
Equipment
Regulatory      340.3         345.9         Regulatory          60.1          43.5
Assets                                      Liabilities
                                            Defined Benefit
Investment      107.3         98.9          Pension & Other     228.2         253.5
in ATC                                      Postretirement
                                            Benefit Plans
Investments     143.5         132.3         Other               123.3         105.1
                                            Liabilities
Other         41.5       39.2       Shareholders’     1,201.0    1,079.3
                                            Equity
                                            Total
Total        $ 3,253.4   $ 2,876.0    Liabilities and  $ 3,253.4   $ 2,876.0
Assets                                      Shareholders’
                                            Equity
                                                                              

                                              
                       Quarter Ended                 Year Ended
ALLETE, Inc.           December 31,                  December 31,
Income (Loss)       2012       2011         2012        2011
Millions                                                     
Regulated              $ 28.0        $ 19.9          $ 96.1         $ 100.4
Operations
Investments and      0.9       (0.8  )     1.0        (6.6   )
Other
Net Income
Attributable to     $ 28.9     $ 19.1      $ 97.1      $ 93.8   
ALLETE
Diluted Earnings    $ 0.75     $ 0.53      $ 2.58      $ 2.65   
Per Share
                                                                    
Statistical Data                                     
Corporate
Common Stock
High                   $ 42.09       $ 42.54         $ 42.66        $ 42.54
Low                    $ 37.73       $ 35.14         $ 37.73        $ 35.14
Close                  $ 40.98       $ 41.98         $ 40.98        $ 41.98
Book Value             $ 30.50       $ 28.77         $ 30.50        $ 28.77
                                                                    
Kilowatt-hours                                       
Sold
Millions
Regulated
Utility
Retail and
Municipals
Residential              303           294             1,132          1,159
Commercial               352           360             1,436          1,433
Municipals               262           256             1,020          1,013
Industrial           1,877     1,895      7,502      7,365  
Total Retail and         2,794         2,805           11,090         10,970
Municipal
Other Power          512       514        1,999      2,205  
Suppliers
Total Regulated          3,306         3,319           13,089         13,175
Utility
Non-regulated
Energy               33        30         113        105    
Operations
Total
Kilowatt-hours       3,339     3,349      13,202     13,280 
Sold
                                                                    
Regulated                                            
Utility Revenue
Millions
Regulated
Utility Revenue
Retail and
Municipals
Residential            $ 28.1        $ 26.6          $ 104.5        $ 109.1
Commercial               29.0          28.7            116.2          116.9
Municipals               15.6          14.6            60.6           61.2
Industrial           100.1     98.9       393.4      390.2  
Total Retail and         172.8         168.8           674.7          677.4
Municipals
Other Power              18.6          18.5            73.1           78.7
Suppliers
Other                41.0      32.3       126.6      95.8   
Total Regulated     $ 232.4    $ 219.6     $ 874.4     $ 851.9  
Utility Revenue
                                                                             

This exhibit has been furnished and shall not be deemed “filed” for purposes
of Section18 of the Securities Exchange Act of 1934, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of 1933,
except as shall be expressly set forth by specific reference in such filing.

Contact:

ALLETE, Inc.
Investor Contact:
Tim Thorp, 218-723-3953
tthorp@allete.com