EX-99 5 exhibit_99.htm FURNISHED ALLETE, INC. SECOND QUARTER 2008 PRESS RELEASE exhibit_99.htm

Exhibit 99

  allete logo
For Release:
August 1, 2008
Investor:
Tim Thorp
Contact:
218-723-3953
 
tthorp@allete.com
 
NEWS
    


ALLETE reports second quarter earnings and reaffirms 2008 earnings guidance

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

This exhibit has been furnished and shall not be deemed “filed” for purposes of Section 18 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.