SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported) - OCTOBER 28, 2004 ALLETE, INC. (Exact name of Registrant as specified in its charter) MINNESOTA 1-3548 41-0418150 (State of Incorporation) (Commission File Number) (IRS Employer Identification No.) 30 WEST SUPERIOR STREET DULUTH, MINNESOTA 55802-2093 (Address of principal executive offices, including zip code) (218) 279-5000 (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: / / Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) / / Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) / / Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) / / Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 7.01 REGULATION FD DISCLOSURE ALLETE, Inc. (ALLETE or Company) adjusted its interactive graphic website financial information to reflect the September 20, 2004 spin-off of ADESA, Inc. (ADESA) as discontinued operations and redefined its reportable business segments. In addition, all common share and per share amounts have been adjusted for all periods to reflect ALLETE's September 20, 2004 one-for-three reverse stock split. The following 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. FOR THE QUARTER ENDED ---------------------------------------------- FULL MAR. 31 JUN. 30 SEPT. 30 DEC. 31 YEAR - -------------------------------------------------------------------------------------------------------------------- Millions Except Per Share Amounts Operating Revenue from Continuing Operations 2004 $209.8 $189.7 $183.2 - $582.7 2003 $187.4 $172.8 $170.1 $167.6 $697.9 2002 $153.0 $159.2 $175.4 $161.2 $648.8 - -------------------------------------------------------------------------------------------------------------------- Operating Expenses from Continuing Operations 2004 $167.7 $170.4 $159.9 - $498.0 2003 $160.7 $152.4 $139.9 $148.3 $601.3 2002 $132.5 $139.4 $143.1 $156.9 $571.9 - -------------------------------------------------------------------------------------------------------------------- Net Income (Loss) from Continuing Operations Before Change in Accounting Principle 2004 $21.4 $2.4 $(0.6) - $23.2 2003 $11.3 $3.4 $10.9 $4.2 $29.8 2002 $8.3 $3.7 $13.9 $(1.2) $24.7 - -------------------------------------------------------------------------------------------------------------------- Net Income from Discontinued Operations 2004 $31.3 $34.3 $13.7 - $79.3 2003 $33.0 $41.0 $36.7 $95.9 $206.6 2002 $26.9 $35.1 $31.2 $19.3 $112.5 - -------------------------------------------------------------------------------------------------------------------- Net Income 2004
$44.9 $36.7 $13.1 - $94.7 2003 $44.3 $44.4 $47.6 $100.1 $236.4 2002 $35.2 $38.8 $45.1 $18.1 $137.2 - -------------------------------------------------------------------------------------------------------------------- Earnings (Loss) Per Share Diluted - Continuing Operations Before Change in Accounting Principle 2004 $0.76 $0.08 $(0.02) - $0.82 2003 $0.41 $0.12 $0.40 $0.15 $1.08 2002 $0.31 $0.13 $0.51 $(0.04) $0.91 - -------------------------------------------------------------------------------------------------------------------- Earnings Per Share Diluted - Discontinued Operations 2004 $1.10 $1.21 $0.47 - $2.78 2003 $1.20 $1.49 $1.31 $3.44 $7.44 2002 $1.00 $1.29 $1.14 $0.70 $4.13 - -------------------------------------------------------------------------------------------------------------------- Earnings Per Share Diluted 2004 $1.59 $1.29 $0.45 - $3.33 2003 $1.61 $1.61 $1.71 $3.59 $8.52 2002 $1.31 $1.42 $1.65 $0.66 $5.04 - -------------------------------------------------------------------------------------------------------------------- Total Shareholder's Equity 2004 $1,504.2 $1,595.0 $662.4 - $662.4 2003 $1,279.0 $1,329.4 $1,365.8 $1,460.2 $1,460.2 2002 $1,174.2 $1,210.2 $1,228.5 $1,232.4 $1,232.4 - -------------------------------------------------------------------------------------------------------------------- ALLETE Form 8-K dated October 28, 2004 1 Included the cumulative effect of a change in accounting principle. A $7.8 million, or $0.27 per share, after-tax loss was reflected in the first quarter of 2004 for the cumulative effect on prior years (to December 31, 2003) of changing to the equity method of accounting for investments in limited liability companies included in ALLETE's emerging technology portfolio. FOR THE QUARTER ENDED ---------------------------------------------- FULL MAR. 31 JUN. 30 SEPT. 30 DEC. 31 YEAR - -------------------------------------------------------------------------------------------------------------------- Millions Except Per Share Amounts Common Shares Outstanding 2004 29.4 29.5 29.5 - 29.5 2003 28.7 28.8 28.9 29.1 29.1 2002 28.2 28.4 28.5 28.5 28.5 - -------------------------------------------------------------------------------------------------------------------- Dividends Paid Per Share of Common Stock 2004 $0.8475 $0.8475 $0.8475 - $2.5425 2003 $0.8475 $0.8475 $0.8475 $0.8475 $3.39 2002 $0.825 $0.825 $0.825 $0.825 $3.30 - -------------------------------------------------------------------------------------------------------------------- As a result of the spin-off of ADESA (the Company's Automotive Services business) in September 2004, ALLETE redefined its business into four segments. REGULATED UTILITY includes the Company's rate regulated electric, water and gas services in northeastern Minnesota and northwestern Wisconsin. NONREGULATED ENERGY OPERATIONS includes the Company's coal mining activities in North Dakota and nonregulated generation consisting primarily of generation from the Company's Taconite Harbor Energy Center in northern Minnesota and generation secured through a 15-year power purchase agreement. REAL ESTATE includes the Company's Florida real estate operations. OTHER includes the Company's telecommunications activities, investments in emerging technologies, and general corporate charges and interest not specifically related to any one business segment. General corporate charges include employee salaries and benefits as well as legal and other outside service fees. DISCONTINUED OPERATIONS includes Automotive Services that was spun off on September 20, 2004, Water Services businesses, the majority of which were sold in 2003, and spin-off costs incurred by ALLETE. FOR THE QUARTER ENDED ---------------------------------------------- FULL MAR. 31 JUN. 30 SEPT. 30 DEC. 31 YEAR - -------------------------------------------------------------------------------------------------------------------- Millions 2004 Net Income (Loss) Regulated Utility $13.9 $ 8.7 $ 9.5 - $32.1 Nonregulated Energy Operations 0.4 0.7 1.5 - 2.6 Real Estate 11.0 2.2 1.6 - 14.8 Other (3.9) (9.2) (13.2) - (26.3) - -------------------------------------------------------------------------------------------------------------------- Continuing Operations 21.4 2.4 (0.6) - 23.2 Discontinued Operations 31.3 34.3 13.7 - 79.3 Change in Accounting Principle (7.8) - - - (7.8) - -------------------------------------------------------------------------------------------------------------------- $44.9 $36.7 $13.1 - $94.7 - -------------------------------------------------------------------------------------------------------------------- 2003 Net Income (Loss) Regulated Utility $11.4 $ 6.9 $12.2 $ 7.4 $ 37.9 Nonregulated Energy Operations 0.8 (0.4) 2.8 0.5 3.7 Real Estate 4.2 5.2 1.9 2.8 14.1 Other (5.1) (8.3) (6.0) (6.5) (25.9) - -------------------------------------------------------------------------------------------------------------------- Continuing Operations 11.3 3.4 10.9 4.2 29.8 Discontinued Operations 33.0 41.0 36.7 95.9 206.6 - -------------------------------------------------------------------------------------------------------------------- $44.3 $44.4 $47.6 $100.1 $236.4 - -------------------------------------------------------------------------------------------------------------------- 2 ALLETE Form 8-K dated October 28, 2004
NONREGULATED BUSINESS SEGMENTS REGULATED ENERGY REAL 2004 CONSOLIDATED UTILITY OPERATIONS ESTATE OTHER - ------------------------------------------------------------------------------------------------------------------------------ Millions FOR THE QUARTER ENDED MARCH 31, 2004 Operating Revenue $209.8 $141.4 $29.8 $27.6 $11.0 Fuel and Purchased Power 68.9 57.1 11.8 - - Operating and Other Expense 86.4 47.5 15.6 8.9 14.4 Depreciation Expense 12.4 9.9 1.8 - 0.7 - ------------------------------------------------------------------------------------------------------------------------------ Operating Income (Loss) from Continuing Operations 42.1 26.9 0.6 18.7 (4.1) Interest Expense (9.1) (4.7) (0.4) (0.1) (3.9) Other Income (Expense) 1.0 - 0.1 - 0.9 - ------------------------------------------------------------------------------------------------------------------------------ Income (Loss) from Continuing Operations Before Income Taxes 34.0 22.2 0.3 18.6 (7.1) Income Tax Expense (Benefit) 12.6 8.3 (0.1) 7.6 (3.2) - ------------------------------------------------------------------------------------------------------------------------------ Income (Loss) from Continuing Operations Before Change in Accounting Principle 21.4 $ 13.9 $ 0.4 $11.0 $(3.9) ----------------------------------------------------- Income from Discontinued Operations - Net of Tax 31.3 Change in Accounting Principle (7.8) - -------------------------------------------------------------------- Net Income $ 44.9 - -------------------------------------------------------------------- FOR THE QUARTER ENDED JUNE 30, 2004 Operating Revenue $189.7 $136.8 $30.1 $6.8 $16.0 Fuel and Purchased Power 77.2 65.9 11.3 - - Operating and Other Expense 80.7 42.8 16.6 2.9 18.4 Depreciation Expense 12.5 9.9 1.9 - 0.7 - ------------------------------------------------------------------------------------------------------------------------------ Operating Income (Loss) from Continuing Operations 19.3 18.2 0.3 3.9 (3.1) Interest Expense (9.1) (4.6) (0.4) - (4.1) Other Income (Expense) (4.0) 0.1 0.9 - (5.0) - ------------------------------------------------------------------------------------------------------------------------------ Income (Loss) from Continuing Operations Before Income Taxes 6.2 13.7 0.8 3.9 (12.2) Income Tax Expense (Benefit) 3.8 5.0 0.1 1.7 (3.0) - ------------------------------------------------------------------------------------------------------------------------------ Income (Loss) from Continuing Operations 2.4 $ 8.7 $ 0.7 $2.2 $(9.2) ----------------------------------------------------- Income from Discontinued Operations - Net of Tax 34.3 - -------------------------------------------------------------------- Net Income $ 36.7 - -------------------------------------------------------------------- ALLETE Form 8-K dated October 28, 2004 3
NONREGULATED BUSINESS SEGMENTS REGULATED ENERGY REAL 2003 CONSOLIDATED UTILITY OPERATIONS ESTATE OTHER - ------------------------------------------------------------------------------------------------------------------------------ Millions FOR THE QUARTER ENDED MARCH 31, 2003 Operating Revenue $187.4 $133.7 $30.8 $12.6 $10.3 Fuel and Purchased Power 67.4 56.0 11.4 - - Operating and Other Expense 80.5 47.4 16.1 5.4 11.6 Depreciation Expense 12.8 10.3 1.9 - 0.6 - ------------------------------------------------------------------------------------------------------------------------------ Operating Income (Loss) from Continuing Operations 26.7 20.0 1.4 7.2 (1.9) Interest Expense (12.5) (5.3) (0.3) - (6.9) Other Income (Expense) 4.0 4.3 0.1 - (0.4) - ------------------------------------------------------------------------------------------------------------------------------ Income (Loss) from Continuing Operations Before Income Taxes 18.2 19.0 1.2 7.2 (9.2) Income Tax Expense (Benefit) 6.9 7.6 0.4 3.0 (4.1) - ------------------------------------------------------------------------------------------------------------------------------ Income (Loss) from Continuing Operations 11.3 $ 11.4 $ 0.8 $ 4.2 $(5.1) ----------------------------------------------------- Income from Discontinued Operations - Net of Tax 33.0 - -------------------------------------------------------------------- Net Income $ 44.3 - -------------------------------------------------------------------- FOR THE QUARTER ENDED JUNE 30, 2003 Operating Revenue $172.8 $125.0 $24.1 $15.6 $ 8.1 Fuel and Purchased Power 64.9 56.8 8.1 - - Operating and Other Expense 74.5 42.2 14.9 6.4 11.0 Depreciation Expense 13.0 10.4 1.8 0.1 0.7 - ------------------------------------------------------------------------------------------------------------------------------ Operating Income (Loss) from Continuing Operations 20.4 15.6 (0.7) 9.1 (3.6) Interest Expense (12.3) (4.9) (0.7) (0.1) (6.6) Other Income (Expense) (2.1) 0.8 0.4 - (3.3) - ------------------------------------------------------------------------------------------------------------------------------ Income (Loss) from Continuing Operations Before Income Taxes 6.0 11.5 (1.0) 9.0 (13.5) Income Tax Expense (Benefit) 2.6 4.6 (0.6) 3.8 (5.2) - ------------------------------------------------------------------------------------------------------------------------------ Income (Loss) from Continuing Operations 3.4 $ 6.9 $(0.4) $ 5.2 $(8.3) ----------------------------------------------------- Income from Discontinued Operations - Net of Tax 41.0 - -------------------------------------------------------------------- Net Income $ 44.4 - -------------------------------------------------------------------- 4 ALLETE Form 8-K dated October 28, 2004
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ALLETE, Inc. October 28, 2004 James K. Vizanko ------------------------------------------------- James K. Vizanko Senior Vice President and Chief Financial Officer ALLETE Form 8-K dated October 28, 2004 5