July 28, 2006
ALLETE (NYSE: ALE) today reported second quarter 2006 earnings from continuing operations of $0.49 per diluted share compared to a loss of $1.46 in the second quarter of 2005. The results a year ago were impacted by a $1.84 per share charge related to the assignment of a Kendall County, Ill. power purchase agreement. Excluding that one-time charge, ALLETE's second quarter earnings per share from continuing operations are 29 percent higher in 2006 than in 2005.
"Halfway though the year, ALLETE's earnings are where we expected them to be," said CEO Don Shippar. "We anticipate our 2006 earnings per share from continuing operations, as we projected earlier, will increase 15 percent to 20 percent over 2005."
During the quarter, income from ALLETE's real estate segment was driven by contract closings at the Town Center at Palm Coast development in northeast Florida. ALLETE Properties net income doubled from $2.8 million in 2005 to $5.6 million in 2006. As of June 30, 2006, ALLETE had a total of $128.9 million of land sales under contract, up from $85.3 million at the end of March 2006. Those contracts are expected to close over the next several years.
Earnings from ALLETE's energy businesses were $7.7 million in the second quarter of 2006, the same as the comparable period a year ago, excluding the one-time Kendall charge. Plant maintenance at Minnesota Power generating facilities resulted in $1.1 million of additional after-tax operating and maintenance expense during the quarter compared to 2005.
In late May, ALLETE made its initial investment in the American Transmission Company and as of June 30, had invested a total of $11.5 million. Shippar said the income contribution from ATC will accelerate as ALLETE continues to make additional investments during the year. He noted that the company intends to invest an additional $48.5 million in ATC by year-end, giving ALLETE an ownership interest of approximately nine percent.
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.