Investment in ATC

3 Months Ended

Mar. 31, 2013

INVESTMENT IN ATC

Our wholly-owned subsidiary, Rainy River Energy, owns approximately 8 percent of ATC, a Wisconsin-based utility that owns and maintains electric transmission assets in parts of Wisconsin, Michigan, Minnesota and Illinois. ATC rates are FERC-approved and are based on a 12.2 percent return on common equity dedicated to utility plant. We account for our investment in ATC under the equity method of accounting. As of March 31, 2013, our equity investment in ATC was $109.0 million ($107.3 million at December 31, 2012). In the first quarter of 2013, we invested $0.4 million in ATC, and on April 29, 2013, we invested an additional $1.2 million. We expect to make additional investments of approximately $1.5 million in 2013.



ALLETE’s Investment in ATC
Millions
Equity Investment Balance as of December 31, 2012		$107.3
Cash Investments	0.4
Equity in ATC Earnings	5.2
Distributed ATC Earnings	(3.9		)
Equity Investment Balance as of March 31, 2013		$109.0

NOTE 7. INVESTMENT IN ATC (Continued)

ATC’s summarized financial data for the quarters ended March 31, 2013 and 2012, is as follows:



	Quarter Ended
ATC Summarized Financial Data	March 31,
Income Statement Data	2013		2012
Millions
Revenue		$151.8	$147.7
Operating Expense	69.8		69.6
Other Expense	21.5		20.0
Net Income	$60.5		$58.1
ALLETE’s Equity in Net Income		$5.2	$4.6

- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

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