ALLETE Reports First Quarter Results and Reaffirms 2014 Earnings Guidance

  ALLETE Reports First Quarter Results and Reaffirms 2014 Earnings Guidance

Business Wire

DULUTH, Minn. -- May 7, 2014

ALLETE, Inc. (NYSE:ALE) today reported its financial results for the first
quarter of 2014. The company reported earnings per share of 80 cents compared
with 83 cents in the same period a year ago. Included in this year’s results
was $1.4 million after-tax, or three cents per share, of acquisition costs
related to an ALLETE Clean Energy acquisition.

Compared with the first quarter of 2013, net income rose by $1 million to
$33.5 million. Operating revenue for the first quarter of 2014 was $296.5
million, up twelve percent from $263.8 million in 2013. Earnings per share for
the first quarter of 2014 were diluted by six cents due to an increase in the
amount of common shares outstanding.

Net income at ALLETE’s Regulated Operations segment, which includes Minnesota
Power, Superior, Water, Light and Power and the company’s investment in the
American Transmission Company, was $33.9 million, an increase of $1.8 million
or sixpercent over the first quarter of 2013. Unseasonably cold weather
impacted electricity sales for the first quarter of 2014, which were three
percent higher than the same period in 2013. Operating and maintenance,
depreciation and interest expenses were also higher in 2014 compared with a
year ago.

ALLETE’s Investments and Other segment, which includes BNI Coal, ALLETE
Properties, ALLETE Clean Energy, and miscellaneous corporate income and
expense, recorded a net loss of $0.4 million during the period compared to net
income of $0.4million a year ago. The net loss included the $1.4 million
after-tax costs for ALLETE Clean Energy’s acquisition of wind energy
facilities in January 2014. Quarterly results for BNI Coal and ALLETE
Properties were similar to a year ago and ALLETE Clean Energy’s wind
facilities were accretive to earnings.

“Strong operating performances at our businesses contributed to ALLETE’s first
quarter earnings results,” said ALLETE Chairman, President and CEO Al Hodnik.
“We are comfortably on track to meet our full year earnings guidance of
between $2.75 and $2.95 per share, excluding costs associated with the ALLETE
Clean Energy acquisition.”

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 my
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 May 9, 2014 by
dialing (855) 859-2056, pass code30490699.

ALLETE is an energy company headquartered in Duluth, Minn. In addition to its
electric utilities, Minnesota Power and Superior Water, Light and Power,
ALLETE owns BNI Coal in North Dakota, 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 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
Millions Except Per Share Amounts - Unaudited
                                                    
                                                       Quarter Ended
                                                       March 31,
                                                    2014        2013
                                                                  
Operating Revenue                                    $ 296.5    $ 263.8 
                                                                             
Operating Expenses
Fuel and Purchased Power                                 96.2          86.5
Operating and Maintenance                                119.8         104.7
Depreciation                                          32.2      28.2  
Total Operating Expenses                                 248.2         219.4
                                                                             
Operating Income                                      48.3      44.4  
                                                                             
Other Income (Expense)
Interest Expense                                         (12.8 )       (12.3 )
Equity Earnings in ATC                                   5.1           5.2
Other                                                 2.0       2.7   
Total Other Expense                                   (5.7  )    (4.4  )
                                                                             
Income Before Non-Controlling Interest and Income        42.6          40.0
Taxes
Income Tax Expense                                    8.8       7.5   
Net Income                                            33.8      32.5  
Less: Non-Controlling Interest in Subsidiaries        0.3       —     
Net Income Attributable to ALLETE                    $ 33.5     $ 32.5  
                                                                             
Average Shares of Common Stock
Basic                                                    41.4          38.9
Diluted                                               41.6      39.0  
                                                                             
Basic Earnings Per Share of Common Stock               $ 0.81        $ 0.83
Diluted Earnings Per Share of Common Stock             $ 0.80        $ 0.83
                                                                             
Dividends Per Share of Common Stock                  $ 0.49     $ 0.475 



Consolidated Balance Sheet
Millions - Unaudited
                                                                  
                Mar. 31,      Dec. 31,                         Mar. 31,      Dec. 31,
             2014        2013                        2014        2013
                                            Liabilities
Assets                                      and
                                            Shareholders’
                                            Equity
Cash and                                    Current
Cash            $ 44.6        $ 97.3        Liabilities        $ 208.5       $ 230.2
Equivalents
Other
Current           224.8         209.7       Long-Term Debt       1,202.5       1,083.0
Assets
Property,
Plant and         2,905.1       2,576.5     Deferred             494.4         479.1
Equipment -                                 Income Taxes
Net
Regulatory        267.0         263.8       Regulatory           89.9          81.0
Assets                                      Liabilities
                                            Defined
                                            Benefit
Investment        116.6         114.6       Pension &            117.2         133.4
in ATC                                      Other
                                            Postretirement
                                            Benefit Plans
Other                                       Other
Investments       116.4         146.3       Non-Current          229.3         127.2
                                            Liabilities
Other                                       Shareholders’
Non-Current    74.7       68.6      Equity            1,407.4    1,342.9
Assets
                                            Total
Total                                       Liabilities
Assets        $ 3,749.2   $ 3,476.8   and              $ 3,749.2   $ 3,476.8
                                            Shareholders’
                                            Equity
                                                                               

                                   
                                      Quarter Ended
ALLETE, Inc.                          March 31,
Income (Loss)                       2014        2013
Millions                                         
Regulated Operations                  $ 33.9        $ 32.1
Investments and Other                (0.4  )    0.4
Net Income Attributable to ALLETE   $ 33.5     $ 32.5
Diluted Earnings Per Share          $ 0.80     $ 0.83
                                                    
Statistical Data                               
Corporate
Common Stock
High                                  $ 52.73       $ 49.50
Low                                   $ 47.96       $ 41.39
Close                                 $ 52.42       $ 49.02
Book Value                            $ 33.11       $ 31.07
                                                    
Kilowatt-hours Sold                            
Millions
Regulated Utility
Retail and Municipals
Residential                             398           354
Commercial                              395           377
Municipals                              242           274
Industrial                           1,816     1,845
Total Retail and Municipal              2,851         2,850
Other Power Suppliers                700       591
Total Regulated Utility                 3,551         3,441
Non-regulated Energy Operations      34        31
Total Kilowatt-hours Sold            3,585     3,472
                                                    
Regulated Utility Revenue                      
Millions
Regulated Utility Revenue
Retail and Municipals
Residential                           $ 37.3        $ 33.1
Commercial                              32.8          31.3
Municipals                              16.5          16.5
Industrial                           104.4     102.2
Total Retail and Municipals             191.0         183.1
Other Power Suppliers                   29.5          22.3
Other                                43.7      36.0
Total Regulated Utility Revenue     $ 264.2    $ 241.4
                                                      

Contact:

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