DULUTH, Minn.--(BUSINESS WIRE)--ALLETE, Inc. (NYSE: ALE) today reported second quarter 2017 earnings of 72 cents per share on net income of $36.9 million and operating revenue of $353.3 million. Last year’s results were 50 cents per share on net income of $24.8 million and operating revenue of $314.8 million.
“ALLETE’s businesses continue to make significant progress on key initiatives that will strategically position us for success in 2017 and beyond. On July 28, 2017, Minnesota Power submitted a resource package to the Minnesota Public Utilities Commission requesting approval for a 250 MW wind energy power purchase agreement, a 10 MW solar energy power purchase agreement and 250 MW of natural gas-fired generation and also filed a request to delay the filing deadline of its next integrated resource plan to February 2019. This resource package is the next step in Minnesota Power’s EnergyForward strategic plan. Minnesota Power and Superior Water, Light and Power’s respective rate reviews are progressing as planned and ALLETE Clean Energy is actively bidding into many renewable investment opportunities,” said ALLETE Chairman, President and CEO Al Hodnik.
ALLETE’s Regulated Operations segment, which includes Minnesota Power, Superior Water, Light and Power, and the Company’s investment in the American Transmission Co. (ATC), recorded net income of $32.4 million, an increase of $9.8 million over 2016 net income. Earnings increased primarily due to higher net income at Minnesota Power resulting from the implementation of interim retail rates at the beginning of the year, higher kilowatt-hour sales primarily due to increased sales to Minnesota Power’s industrial customers and timing of the recognition of a conservation improvement program financial incentive following Minnesota Public Utilities Commission approval in the second quarter. These increases were partially offset by higher operating and maintenance, depreciation, and interest expenses. Our equity earnings in ATC increased $0.8 million from 2016 primarily due to additional investments in ATC and period over period changes in ATC’s estimate of a refund liability related to MISO return on equity complaints.
ALLETE’s Energy Infrastructure and Related Services businesses, which include ALLETE Clean Energy and U.S. Water Services, recorded net income of $3.8 million and $0.6 million, respectively. Earnings at ALLETE Clean Energy increased $1.2 million, or 46 percent, from 2016. Net income in 2017 included higher operating revenue and lower operating and maintenance expense compared to the same period in 2016. Earnings from U.S. Water Services decreased $0.4 million from 2016 primarily due to increased operating expenses as a result of investments for future growth in waste treatment and water safety applications, partially offset by higher operating revenue.
Corporate and Other, which includes BNI Energy and ALLETE Properties, increased $1.5 million from 2016 primarily due to lower interest expense and lower accretion expense relating to the contingent consideration liability.
Earnings per share for the quarter was diluted by 3 cents due to additional shares of common stock outstanding as of June 30, 2017.
ALLETE will host a conference call and webcast at 10 a.m. Eastern Time this morning to discuss details of its financial performance. 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 August 6, 2017 by calling (855) 859-2056, pass code 48275932. The webcast will be accessible for one year at www.allete.com.
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 ALLETE Clean Energy, based in Duluth, U.S. Water Services headquartered in St. Michael, Minn., BNI Energy in Bismarck, N.D., and has an eight percent equity interest in the American Transmission Co. More information about ALLETE is available at www.allete.com. ALE-CORP
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 |
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| Quarter Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Operating Revenue | ||||||||||||||||
| Utility | $264.9 | $234.9 | $546.5 | $487.2 | ||||||||||||
| Non-utility | 88.4 | 79.9 | 172.4 | 161.4 | ||||||||||||
| Total Operating Revenue | 353.3 | 314.8 | 718.9 | 648.6 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Fuel, Purchased Power and Gas – Utility | 93.1 | 79.0 | 189.7 | 158.9 | ||||||||||||
| Transmission Services – Utility | 17.6 | 16.1 | 34.2 | 32.9 | ||||||||||||
| Cost of Sales – Non-utility | 38.4 | 32.5 | 70.0 | 62.8 | ||||||||||||
| Operating and Maintenance | 84.9 | 82.0 | 168.2 | 160.1 | ||||||||||||
| Depreciation and Amortization | 50.1 | 48.7 | 100.6 | 96.8 | ||||||||||||
| Taxes Other than Income Taxes | 14.2 | 14.3 | 28.6 | 28.1 | ||||||||||||
| Total Operating Expenses | 298.3 | 272.6 | 591.3 | 539.6 | ||||||||||||
| Operating Income | 55.0 | 42.2 | 127.6 | 109.0 | ||||||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest Expense | (16.7 | ) | (17.4 | ) | (33.9 | ) | (34.3 | ) | ||||||||
| Equity Earnings in ATC | 5.3 | 4.1 | 11.4 | 8.9 | ||||||||||||
| Other | 0.6 | 0.6 | 1.2 | 1.6 | ||||||||||||
| Total Other Expense | (10.8 | ) | (12.7 | ) | (21.3 | ) | (23.8 | ) | ||||||||
| Income Before Non-Controlling Interest and Income Taxes | 44.2 | 29.5 | 106.3 | 85.2 | ||||||||||||
| Income Tax Expense | 7.3 | 4.7 | 20.4 | 14.0 | ||||||||||||
| Net Income | 36.9 | 24.8 | 85.9 | 71.2 | ||||||||||||
| Less: Non-Controlling Interest in Subsidiaries | — | — | — | 0.5 | ||||||||||||
| Net Income Attributable to ALLETE | $36.9 | $24.8 | $85.9 | $70.7 | ||||||||||||
| Average Shares of Common Stock | ||||||||||||||||
| Basic | 50.9 | 49.3 | 50.5 | 49.2 | ||||||||||||
| Diluted | 51.1 | 49.5 | 50.7 | 49.3 | ||||||||||||
| Basic Earnings Per Share of Common Stock | $0.73 | $0.50 | $1.70 | $1.44 | ||||||||||||
| Diluted Earnings Per Share of Common Stock | $0.72 | $0.50 | $1.69 | $1.43 | ||||||||||||
| Dividends Per Share of Common Stock | $0.535 | $0.52 | $1.07 | $1.04 | ||||||||||||
| Consolidated Balance Sheet | |||||||||||||||
|
Millions - Unaudited |
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| Jun. 30, | Dec. 31, | Jun. 30, | Dec. 31, | ||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Assets | Liabilities and Shareholders’ Equity | ||||||||||||||
| Cash and Cash Equivalents | $84.2 | $27.5 | Current Liabilities | $305.4 | $399.5 | ||||||||||
| Other Current Assets | 262.3 | 267.0 | Long-Term Debt | 1,401.4 | 1,370.4 | ||||||||||
| Property, Plant and Equipment - Net | 3,745.6 | 3,741.2 | Deferred Income Taxes | 577.0 | 554.6 | ||||||||||
| Regulatory Assets | 324.5 | 330.1 | Regulatory Liabilities | 125.8 | 125.8 | ||||||||||
| Investment in ATC | 143.1 | 135.6 | Defined Benefit Pension & Other | 195.8 | 210.9 | ||||||||||
| Other Investments | 56.2 | 55.6 | Other Non-Current Liabilities | 309.1 | 322.7 | ||||||||||
| Goodwill and Intangibles - Net | 210.8 | 213.4 | Shareholders’ Equity | 2,017.0 | 1,893.0 | ||||||||||
| Other Non-Current Assets | 104.8 | 106.5 | |||||||||||||
| Total Assets | $4,931.5 | $4,876.9 | Total Liabilities and Shareholders’ Equity | $4,931.5 | $4,876.9 | ||||||||||
| Quarter Ended | Six Months Ended | ||||||||||||||
| ALLETE, Inc. | June 30, | June 30, | |||||||||||||
| Income (Loss) | 2017 | 2016 | 2017 | 2016 | |||||||||||
| Millions | |||||||||||||||
| Regulated Operations | $32.4 | $22.6 | $75.9 | $65.0 | |||||||||||
| Energy Infrastructure and Related Services | |||||||||||||||
| ALLETE Clean Energy | 3.8 | 2.6 | 10.5 | 8.7 | |||||||||||
| U.S. Water Services | 0.6 | 1.0 | 0.3 | 0.5 | |||||||||||
| Corporate and Other | 0.1 | (1.4 | ) | (0.8 | ) | (3.5 | ) | ||||||||
| Net Income Attributable to ALLETE | $36.9 | $24.8 | $85.9 | $70.7 | |||||||||||
| Diluted Earnings Per Share | $0.72 | $0.50 | $1.69 | $1.43 | |||||||||||
| Statistical Data | |||||||||||||||
| Corporate | |||||||||||||||
| Common Stock | |||||||||||||||
| High | $74.59 | $64.69 | $74.59 | $64.69 | |||||||||||
| Low | $66.81 | $53.47 | $61.64 | $48.26 | |||||||||||
| Close | $71.68 | $64.63 | $71.68 | $64.63 | |||||||||||
| Book Value | $39.58 | $37.51 | $39.58 | $37.51 | |||||||||||
| Kilowatt-hours Sold | |||||||||||||||
| Millions | |||||||||||||||
| Regulated Utility | |||||||||||||||
| Retail and Municipal | |||||||||||||||
| Residential | 229 | 237 | 552 | 566 | |||||||||||
| Commercial | 328 | 339 | 697 | 707 | |||||||||||
| Municipal | 181 | 187 | 396 | 406 | |||||||||||
| Industrial | 1,816 | 1,513 | 3,578 | 3,107 | |||||||||||
| Total Retail and Municipal | 2,554 | 2,276 | 5,223 | 4,786 | |||||||||||
| Other Power Suppliers | 1,004 | 1,185 | 2,045 | 2,315 | |||||||||||
| Total Regulated Utility Kilowatt-hours Sold | 3,558 | 3,461 | 7,268 | 7,101 | |||||||||||
| Regulated Utility Revenue | |||||||||||||||
| Millions | |||||||||||||||
| Regulated Utility Revenue | |||||||||||||||
| Retail and Municipal | |||||||||||||||
| Residential | $25.1 | $24.9 | $59.8 | $57.8 | |||||||||||
| Commercial | 32.6 | 31.5 | 68.6 | 64.0 | |||||||||||
| Municipal | 12.3 | 15.3 | 30.5 | 31.2 | |||||||||||
| Industrial | 120.8 | 96.6 | 241.3 | 196.5 | |||||||||||
| Total Retail and Municipal | 190.8 | 168.3 | 400.2 | 349.5 | |||||||||||
| Other Power Suppliers | 41.6 | 44.2 | 82.8 | 86.4 | |||||||||||
| Other | 32.5 | 22.4 | 63.5 | 51.3 | |||||||||||
| Total Regulated Utility Revenue | $264.9 | $234.9 | $546.5 | $487.2 | |||||||||||
