ALLETE Reports First Quarter Earnings

  ALLETE Reports First Quarter Earnings

                EPS rose 25% compared to first quarter of 2012

Business Wire

DULUTH, Minn. -- May 08, 2013

ALLETE, Inc. (NYSE:ALE) today reported first quarter 2013 earnings of 83 cents
per share on net income of $32.5 million and operating revenue of $263.8
million, compared to 66 cents on net income of $24.4 million and operating
revenue of $240 million in 2012.

ALLETE's Regulated Operations segment, which includes Minnesota Power,
Superior Water, Light and Power and the company's investment in the American
Transmission Company, recorded net income of $32.1 million versus $24.4
million in 2012.

Higher cost recovery rider revenue and federal production tax credits were
tied to the company's strategic move toward adding more renewable wind energy.
In late 2012, Minnesota Power completed two phases of the Bison Wind Energy
Center and both were in service for the first quarter of 2013. Increases in
depreciation and interest expense, both directly attributable to Minnesota
Power's recent capital investments, were in line with the company's

This year's first quarter saw a return to more normal winter weather
conditions, increasing sales to residential, commercial, and municipal
customers. The company's industrial customers continued to produce at near
full-capacity levels; total electric sales were up about three percent
compared to last year. Earnings from ALLETE's investment in the American
Transmission Company grew slightly due to a higher investment balance compared
to a year ago.

ALLETE's Investments and Other segment, which includes BNI Coal, ALLETE
Properties, ALLETE Clean Energy, and other miscellaneous corporate income and
expense, recorded $400,000 of net income during the quarter, versus a
break-even quarter a year ago.

An increase in the average number of common shares outstanding in 2013 from a
year ago, with proceeds used to fund the company's capital investment program,
resulted in dilution of five cents per share compared to the first quarter of

“Our first quarter financial results were consistent with our expectations,”
said ALLETE Chairman, President and CEO Al Hodnik. “Electricity demand remains
strong with our customers, and we continue to make progress in executing our
multi-faceted, multi-year growth strategy.” Hodnik reaffirmed ALLETE's 2013
earnings guidance of between $2.58 and $2.78 per share.

The company's reiterated earnings guidance assumes continued strong industrial
demand, higher cost recovery revenue and federal production tax credits,
higher depreciation and interest expense and dilution from equity issuances of
between ten cents and 15 cents per share.

The company will host a conference call and webcast at 10 a.m. Eastern time
today to discuss details of its quarterly performance. Interested parties may
listen live by calling (877) 303-5852, or by accessing the webcast at A replay of the call will be available through May 10, 2013 by
dialing (855) 859-2056, pass code 31733644.

ALLETE is an energy company headquartered in Duluth, Minn. In addition to its
electric utilities, Minnesota Power and Superior Water, Light and Power of
Wisconsin, ALLETE owns BNI Coal in Center, N.D., ALLETE Clean Energy, based in
Duluth, and has an eight percent equity interest in the American Transmission
Co. More information about ALLETE is available at

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

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.

Consolidated Statement of Income
Millions Except Per Share Amounts - Unaudited

                                             Quarter Ended
                                               March 31,
                                            2013        2012
Operating Revenue                            $ 263.8    $ 240.0 
Operating Expenses
Fuel and Purchased Power                         86.5          77.1
Operating and Maintenance                        104.7         99.9
Depreciation                                  28.2      24.6  
Total Operating Expenses                         219.4         201.6
Operating Income                              44.4      38.4  
Other Income (Expense)
Interest Expense                                 (12.3 )       (11.0 )
Equity Earnings in ATC                           5.2           4.6
Other                                         2.7       0.7   
Total Other Expense                           (4.4  )    (5.7  )
Income Before Income Taxes                       40.0          32.7
Income Tax Expense                            7.5       8.3   
Net Income                                   $ 32.5     $ 24.4  
Average Shares of Common Stock
Basic                                            38.9          36.8
Diluted                                       39.0      36.9  
Basic Earnings Per Share of Common Stock       $ 0.83        $ 0.66
Diluted Earnings Per Share of Common Stock     $ 0.83        $ 0.66
Dividends Per Share of Common Stock          $ 0.475    $ 0.46  

Consolidated Balance Sheet
Millions - Unaudited

              Mar. 31,  Dec. 31,                      Mar. 31,    Dec. 31,
             2013      2012                         2013        2012
Assets                                    and
Cash and                                  Current
Short-Term      $ 77.3    $ 80.8          Liabilities        $ 202.6       $ 283.4
Current           178.6     192.4         Long-Term Debt       975.1         933.6
Plant and         2,366.7   2,347.6       Deferred             430.9         423.8
Equipment -                               Income Taxes
Regulatory        336.6     340.3         Regulatory           59.2          60.1
Assets                                    Liabilities
Investment        109.0     107.3         Pension &            216.3         228.2
in ATC                                    Other
                                          Benefit Plans
Other                                     Other
Investments       138.6     143.5         Non-Current          126.7         123.3
Other                                     Shareholders’
Non-Current    44.5     41.5       Equity            1,240.5    1,201.0
Total                                     Liabilities
Assets        $ 3,251.3 $ 3,253.4    and              $ 3,251.3   $ 3,253.4

                                          Quarter Ended
ALLETE, Inc.                              March 31,
Income (Loss)                         2013      2012
Regulated Operations                      $ 32.1      $ 24.4
Investments and Other                  0.4      -
Net Income Attributable to ALLETE     $ 32.5    $ 24.4
Diluted Earnings Per Share            $ 0.83    $ 0.66
Statistical Data                               
Common Stock
High                                      $ 49.50     $ 42.49
Low                                       $ 41.39     $ 39.98
Close                                     $ 49.02     $ 41.49
Book Value                                $ 31.07     $ 29.20
Kilowatt-hours Sold                            
Regulated Utility
Retail and Municipals
Residential                                 354         326
Commercial                                  377         364
Municipals                                  274         264
Industrial                             1,845    1,868
Total Retail and Municipal                  2,850       2,822
Other Power Suppliers                  591      517
Total Regulated Utility                     3,441       3,339
Non-regulated Energy Operations        31       30
Total Kilowatt-hours Sold              3,472    3,369
Regulated Utility Revenue                      
Regulated Utility Revenue
Retail and Municipals
Residential                               $ 33.1      $ 29.5
Commercial                                  31.3        29.0
Municipals                                  16.5        15.5
Industrial                             102.2    97.8
Total Retail and Municipals                 183.1       171.8
Other Power Suppliers                       22.3        18.7
Other                                  36.0     28.1
Total Regulated Utility Revenue       $ 241.4   $ 218.6

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.


Investor Contact:
Tim Thorp, 218-723-3953
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