ALLETE Reports Second Quarter Earnings and Reaffirms 2008 Earnings Guidance
August 01 2008 - 8:30AM
Business Wire
ALLETE, Inc. (NYSE: ALE) today reported second quarter 2008
earnings of 37 cents per share, which were consistent with the
company�s expectations. CEO Don Shippar said the company reaffirms
its previously stated earnings guidance of a range from $2.70 to
$2.90 per share for 2008. Second quarter 2008 net income was $10.7
million on operating revenue of $189.8 million, compared to $22.6
million of net income and $223.3 of operating revenue in the
corresponding period a year ago. Last year�s results included two
major property sales, resulting in net income of $11.5 million for
the company�s real estate segment. Real estate income in the second
quarter this year was $2.5 million, or about 31 cents per share
lower than in 2007. Earnings in the regulated utility segment were
$5.2 million in the second quarter of 2008, compared to $6.1
million a year ago. Depreciation and interest expense were higher
year-over-year as the result of a major capital expenditure program
underway at Minnesota Power. Operation and maintenance expenses
were also higher in 2008, and margins on sales to other power
suppliers were lower. Income from ALLETE�s �Other� segment declined
$2.7 million in the second quarter compared to 2007 partially due
to lower earnings on cash and short-term investments. Also, in the
second quarter of 2007, the �Other� segment included a positive tax
audit settlement and the release from a loan guarantee. �We expect
to record positive earnings for our real estate business despite a
difficult market environment,� said Shippar. �Our energy businesses
are performing as we expected they would, and increased interim
rates at Minnesota Power that go into effect today will begin to
offset increased expenses.� Shippar added that growth at Minnesota
Power will continue as a result of its significant capital
expenditure program and the company will also make additional
investments in the American Transmission Company. ALLETE�s
corporate headquarters are located in Duluth, Minnesota. ALLETE
provides energy services in the upper Midwest and has significant
real estate holdings in Florida. More information about the company
is available on ALLETE�s Web site 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, Inc. Consolidated Statement of Income For the Periods Ended
June 30, 2008 and 2007 Millions Except Per Share Amounts-Unaudited
� � � Quarter Ended Year to Date � � � � � 2008 � � � 2007 � � �
2008 � � � 2007 � Operating Revenue � $ 189.8 � � $ 223.3 � � $
403.2 � � $ 428.6 � Operating Expenses � � Fuel and Purchased Power
75.0 92.9 161.3 170.6 Operating and Maintenance 83.8 84.6 166.2
159.2 � Depreciation � � 12.9 � � � 11.9 � � � 25.6 � � � 23.6 � �
� Total Operating Expenses � � 171.7 � � � 189.4 � � � 353.1 � � �
353.4 � Operating Income � � 18.1 � � � 33.9 � � � 50.1 � � � 75.2
� Other Income (Expense) Interest Expense (7.2 ) (6.1 ) � (13.9 )
(12.4 ) Equity Earnings in ATC 3.6 3.2 7.0 6.1 � Other � � 2.5 � �
� 4.1 � � � 11.1 � � � 8.7 � � � Total Other Income (Expense) � �
(1.1 ) � � 1.2 � � � 4.2 � � � 2.4 � Income Before Minority
Interest and Income Taxes 17.0 35.1 54.3 77.6 Income Tax Expense
6.2 11.2 19.9 27.3 Minority Interest � � 0.1 � � � 1.3 � � � 0.1 �
� � 1.4 � Net Income � $ 10.7 � � $ 22.6 � � $ 34.3 � � $ 48.9 � �
Average Shares of Common Stock Basic 28.8 28.2 28.7 28.1 � Diluted
� � 28.9 � � � 28.3 � � � 28.8 � � � 28.2 � Basic Earnings Per
Share of Common Stock $ 0.37 $ 0.80 $ 1.19 $ 1.74 � Diluted
Earnings Per Share of Common Stock $ 0.37 $ 0.80 $ 1.19 $ 1.73 � �
� � � � � � � � Dividends Per Share of Common Stock � $ 0.43 � � $
0.41 � � $ 0.86 � � $ 0.82 � Consolidated Balance Sheet
Millions-Unaudited � � � � � Jun. 30, Dec. 31, Jun. 30, Dec. 31, �
� 2008 � 2007 � � � 2008 � 2007 Assets Liabilities and
Shareholders' Equity Cash and Short-Term Investments $ 99.1 $ 46.4
Current Liabilities $ 142.0 $ 137.1 Other Current Assets 140.1
168.1 Long-Term Debt 538.5 410.9 Property, Plant and Equipment
1,224.3 1,104.5 Other Liabilities 349.1 353.6 Investments 208.3
213.8 Shareholders' Equity 759.2 742.6 Other � � 117.0 � � 111.4 �
� � � � � Total Assets � $ 1,788.8 � $ 1,644.2 � Total Liabilities
and Shareholders' Equity � $ 1,788.8 � $ 1,644.2 � � � � Quarter
Ended � Year to Date June 30, June 30, ALLETE, Inc. � 2008 � � 2007
� 2008 � 2007 Income (Loss) � � Millions Regulated Utility $ 5.2 $
6.1 $ 23.3 $ 24.9 Nonregulated Energy Operations 1.2 0.6 1.4 2.8
ATC 2.0 1.9 4.0 3.7 Real Estate 2.5 11.5 2.0 14.6 � Other � � (0.2
) � � 2.5 � � 3.6 � � 2.9 � Net Income � $ 10.7 � � $ 22.6 � $ 34.3
� $ 48.9 Diluted Earnings Per Share $ 0.37 $ 0.80 $ 1.19 $ 1.73 �
Statistical Data Corporate Common Stock High $ 46.11 $ 51.30 $
46.11 $ 51.30 Low $ 38.82 $ 45.39 $ 33.76 $ 44.93 Close $ 42.00 $
47.05 $ 42.00 $ 47.05 Book Value $ 24.51 $ 23.23 $ 24.51 $ 23.23 �
Kilowatthours Sold Millions Regulated Utility Retail and Municipals
Residential 239.2 231.7 601.8 573.3 Commercial 307.6 320.9 667.2
673.1 Municipals 226.6 229.2 499.5 495.6 Industrial 1,788.9 1,734.0
3,612.1 3,439.4 � � � Other � � 19.2 � � � 19.0 � � 41.5 � � 41.3
Total Retail and Municipal 2,581.5 2,534.8 5,422.1 5,222.7 � �
Other Power Suppliers � � 375.1 � � � 513.0 � � 779.2 � � 1,036.9
Total Regulated Utility 2,956.6 3,047.8 6,201.3 6,259.6 �
Nonregulated Energy Operations � � 59.7 � � � 59.8 � � 108.3 � �
123.5 � � � � Total Kilowatthours Sold � � 3,016.3 � � � 3,107.6 �
� 6,309.6 � � 6,383.1 � Real Estate Town Center Development Project
Commercial Square Footage Sold - 435,000 - 435,000 Residential
Units - 130 - 130 � Palm Coast Park Development Project Commercial
Square Footage Sold - 40,000 - 40,000 Residential Units - 406 - 406
� Other Land Acres Sold 49 - 51 367
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