ALLETE has entered an agreement to be acquired by a partnership led by Canada Pension Plan Investment Board and Global Infrastructure Partners and start the process to become a private company. Learn more at www.ALLETEforward.com.




                       Securities and Exchange Commission
                             Washington, D.C. 20549



                                    FORM 10-Q/A
                                  Amendment No.1

(Mark One)

/X/   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

For the quarterly period ended June 30, 1996

                                       or

/ /   Transition Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934



                           Commission File No. 1-3548


                         Minnesota Power & Light Company
                             A Minnesota Corporation
                   IRS Employer Identification No. 41-0418150
                             30 West Superior Street
                             Duluth, Minnesota 55802
                           Telephone - (218) 722-2641


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during the  preceding  12 months and (2) has been  subject to such  filing
requirements for the past 90 days.
                  Yes   X    No
                      ----     ----



                           Common Stock, no par value,
                          31,935,547 shares outstanding
                               as of July 31, 1996





- -------------------------------------------------------------------------------
     This Amendment No. 1 to Minnesota Power & Light Company's (Company) 
Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 (Form 10-Q) is
being filed to reflect a reclassification of distributions on Company obligated
mandatorily redeemable preferred securities of subsidiary MP&L Capital I. This
Amendment No. 1 includes only those portions of the Form 10-Q which have been 
changed as a result of such reclassification.
- -------------------------------------------------------------------------------


                                     -1-


PART I.    FINANCIAL INFORMATION
Item 1.    Financial Statements


                                                  Minnesota Power
                                            Consolidated Balance Sheet
                                                   In Thousands
June 30, December 31, 1996 1995 Unaudited Audited - ------------------------------------------------------------------------------------------------------------------- Assets Plant and Other Assets Electric operations $ 799,091 $ 800,477 Water operations 319,331 323,182 Automobile auctions 140,257 123,632 Investments 227,056 201,360 ----------- ----------- Total plant and other assets 1,485,735 1,448,651 ----------- ----------- Current Assets Cash and cash equivalents 63,432 31,577 Trading securities 76,319 40,007 Trade accounts receivable (less reserve of $4,088 and $3,325) 171,700 128,072 Notes and other accounts receivable 22,309 12,220 Fuel, material and supplies 25,911 26,383 Prepayments and other 16,910 13,706 ----------- ----------- Total current assets 376,581 251,965 ----------- ----------- Deferred Charges Regulatory 82,178 88,631 Other 26,703 25,037 ----------- ----------- Total deferred charges 108,881 113,668 ----------- ----------- Intangible Assets Goodwill 124,122 120,245 Other 12,712 13,096 ----------- ----------- Total intangible assets 136,834 133,341 ----------- ----------- Total Assets $ 2,108,031 $ 1,947,625 - ------------------------------------------------------------------------------------------------------------------- Capitalization and Liabilities Capitalization Common stock without par value, 65,000,000 shares authorized 31,917,569 and 31,467,650 shares outstanding $ 384,286 $ 377,684 Unearned ESOP shares (71,047) (72,882) Net unrealized gain on securities investments 1,165 3,206 Cumulative translation adjustment (401) (177) Retained earnings 277,744 276,241 ----------- ----------- Total common stock equity 591,747 584,072 Cumulative preferred stock 11,492 28,547 Redeemable serial preferred stock 20,000 20,000 Company obligated mandatorily redeemable preferred securities of subsidiary MP&L Capital I which holds solely Company Junior Subordinated Debentures 75,000 - Long-term debt 653,039 639,548 ----------- ----------- Total capitalization 1,351,278 1,272,167 ----------- ----------- Current Liabilities Accounts payable 92,366 68,083 Accrued taxes 39,386 40,999 Accrued interest and dividends 16,136 14,471 Notes payable 89,330 96,218 Long-term debt due within one year 70,060 9,743 Other 27,155 27,292 ----------- ----------- Total current liabilities 334,433 256,806 ----------- ----------- Deferred Credits Accumulated deferred income taxes 164,994 164,737 Contributions in aid of construction 97,468 98,167 Regulatory 56,491 57,950 Other 103,367 97,798 ----------- ----------- Total deferred credits 422,320 418,652 ----------- ----------- Total Capitalization and Liabilities $ 2,108,031 $ 1,947,625 - ------------------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of this statement.
-2- Minnesota Power Consolidated Statement of Income In Thousands Except Per Share Amounts - Unaudited
Quarter Ended Six Months Ended June 30, June 30, 1996 1995 1996 1995 - ------------------------------------------------------------------------------------------------------------------- Operating Revenue and Income Electric operations $ 129,219 $ 119,694 $ 260,718 $ 240,448 Water operations 23,050 17,814 42,277 33,416 Automobile auctions 45,215 - 84,908 - Investments 11,019 9,828 23,275 20,160 --------- ---------- --------- --------- Total operating revenue and income 208,503 147,336 411,178 294,024 --------- ---------- --------- --------- Operating Expenses Fuel and purchased power 48,291 44,113 91,934 84,422 Operations 87,034 60,975 173,063 123,117 Administrative and general 40,559 16,790 74,350 35,252 Interest expense 14,357 11,388 28,517 22,489 --------- ---------- --------- --------- Total operating expenses 190,241 133,266 367,864 265,280 --------- ---------- --------- --------- Income (Loss) from Equity Investments 2,832 2,361 6,609 (3,909) --------- ---------- --------- --------- Operating Income from Continuing Operations 21,094 16,431 49,923 24,835 Distributions on Redeemable Preferred Securities of Subsidiary 1,509 - 1,711 - Income Tax Expense (Benefit) 4,753 5,508 15,077 (9,893) --------- ---------- --------- --------- Income from Continuing Operations 14,832 10,923 33,135 34,728 Income from Discontinued Operations - 1,190 - 2,842 --------- ---------- --------- --------- Net Income 14,832 12,113 33,135 37,570 Dividends on Preferred Stock 634 800 1,434 1,600 --------- ---------- --------- --------- Earnings Available for Common Stock $ 14,198 $ 11,313 $ 31,701 $ 35,970 ========= ========== ========= ========= Average Shares of Common Stock 29,053 28,446 28,919 28,409 Earnings Per Share of Common Stock Continuing operations $ .49 $ .35 $ 1.10 $1.17 Discontinued operations - .05 - .10 ----- ----- ------ ----- Total $ .49 $ .40 $ 1.10 $1.27 ===== ===== ====== ===== Dividends Per Share of Common Stock $ .51 $ .51 $ 1.02 $1.02 - ------------------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of this statement.
-3- Minnesota Power Consolidated Statement of Cash Flows In Thousands - Unaudited
Six Months Ended June 30, 1996 1995 - ------------------------------------------------------------------------------------------------------------------- Operating Activities Net income $ 33,135 $ 37,570 Depreciation and amortization 32,511 27,575 Deferred income taxes (1,515) (29,101) Deferred investment tax credits (839) (1,024) Pre-tax gain on sale of plant (1,073) - Pre-tax loss on disposal of discontinued operations - 1,793 Changes in operating assets and liabilities excluding the effects of discontinued operations Trading securities (36,312) 18,013 Notes and accounts receivable (53,488) 8,646 Fuel, material and supplies 531 (2,090) Accounts payable 24,201 (1,325) Other current assets and liabilities (3,460) 8,221 Other - net 12,429 (2,514) ---------- --------- Cash from operating activities 6,120 65,764 ---------- --------- Investing Activities Proceeds from sale of investments in securities 14,640 94,162 Proceeds from sale of plant 5,311 - Proceeds from sale of discontinued operations - 106,115 Funds held by trustee for ADESA acquisition - (161,810) Additions to investments (51,921) (65,996) Additions to plant (45,427) (40,906) Changes to other assets - net 6,443 2,777 ---------- --------- Cash for investing activities (70,954) (65,658) ---------- --------- Financing Activities Issuance of long-term debt 190,134 9,000 Issuance of Company obligated mandatorily redeemable preferred securities of subsidiary MP&L Capital I - net 72,270 - Issuance of common stock 9,015 1,467 Changes in notes payable (9,588) 124,372 Reductions of long-term debt (116,455) (2,217) Redemption of preferred stock (17,568) - Dividends on preferred and common stock (31,119) (30,846) ---------- --------- Cash from financing activities 96,689 101,776 ---------- --------- Change in Cash and Cash Equivalents 31,855 101,882 Cash and Cash Equivalents at Beginning of Period 31,577 27,001 ---------- --------- Cash and Cash Equivalents at End of Period $ 63,432 $ 128,883 ========== ========= Supplemental Cash Flow Information Cash paid during the period for Interest (net of capitalized) $ 24,930 $ 22,481 Income taxes $ 17,182 $ 11,893 - ------------------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of this statement.
-4- Note 1. Business Segments In Thousands
Investments --------------------- Corporate Electric Water Automobile Portfolio & Real Charges Consolidated Operations Operations Auctions Reinsurance Estate & Other ------------ ---------- ---------- ------------ ----------- -------- --------- Quarter Ended June 30, 1996 - --------------------------- Operating revenue and income $208,503 $129,219 $ 23,050 $ 45,215 $4,736 $ 6,605 $ (322) Operation and other expense 159,589 102,218 13,926 37,026 731 3,845 1,843 Depreciation and amortization expense 16,295 10,512 3,070 2,705 - 8 - Interest expense 14,357 5,537 3,057 2,017 - 486 3,260 Income from equity investments 2,832 - - - 2,832 - - -------- -------- -------- -------- ------ -------- ------- Operating income (loss) 21,094 10,952 2,997 3,467 6,837 2,266 (5,425) Distributions on redeemable preferred securities of subsidiary 1,509 403 - - - - 1,106 Income tax expense (benefit) 4,753 3,593 1,010 2,002 928 (782) (1,998) -------- -------- -------- -------- ------ -------- ------- Net income $ 14,832 $ 6,956 $ 1,987 $ 1,465 $5,909 $ 3,048 $(4,533) ======== ======== ======== ======== ====== ======== ======= Quarter Ended June 30, 1995 - --------------------------- Operating revenue and income $147,336 $119,694 $ 17,814 - $6,223 $ 4,438 $ (833) Operation and other expense 109,152 91,128 11,692 - 1,322 3,492 1,518 Depreciation and amortization expense 12,726 10,115 2,551 - - 60 - Interest expense 11,388 5,573 2,534 - 1 - 3,280 Income from equity investments 2,361 - - - 2,361 - - -------- -------- -------- ------ -------- ------- Operating income (loss) from continuing operations 16,431 12,878 1,037 - 7,261 886 (5,631) Income tax expense (benefit) 5,508 5,014 348 - 488 592 (934) -------- -------- -------- ------ -------- ------- Income (loss) from continuing operations 10,923 $ 7,864 $ 689 - $6,773 $ 294 $(4,697) ======== ======== ====== ======== ======= Income from discontinued operations 1,190 -------- Net income $ 12,113 ======== - ------------------------------ Purchased July 1, 1995.
-5- Note 1. Business Segments (Continued) In Thousands
Investments ---------------------- Corporate Electric Water Automobile Portfolio & Real Charges Consolidated Operations Operations Auctions Reinsurance Estate & Other ------------ ---------- ---------- ------------ ----------- -------- --------- Six Months Ended June 30, 1996 - ------------------------------ Operating revenue and income $ 411,178 $ 260,718 $ 42,277 $ 84,908 $ 8,605 $ 15,281 $ (611) Operation and other expense 306,836 197,523 25,444 71,228 1,254 7,058 4,329 Depreciation and amortization expense 32,511 21,011 6,207 5,255 - 38 - Interest expense 28,517 11,212 6,344 3,308 1 488 7,164 Income from equity investments 6,609 - - - 6,609 - - ---------- --------- --------- -------- --------- -------- -------- Operating income (loss) 49,923 30,972 4,282 5,117 13,959 7,697 (12,104) Distributions on redeemable preferred securities of subsidiary 1,711 480 - - - - 1,231 Income tax expense (benefit) 15,077 11,367 1,459 2,664 2,897 1,581 (4,891) ---------- --------- --------- -------- --------- -------- -------- Net income $ 33,135 $ 19,125 $ 2,823 $ 2,453 $ 11,062 $ 6,116 $ (8,444) ========== ========= ========= ======== ========= ======== ======== Total assets $2,108,031 $ 983,971 $ 341,792 $453,561 $ 244,526 $ 82,516 $ 1,665 Accumulated depreciation $ 646,609 $ 527,425 $ 115,162 $ 4,022 - - - Accumulated amortization $ 5,819 - - $ 4,949 - $ 870 - Construction work in progress $ 55,559 $ 13,769 $ 17,816 $ 23,974 - - - Six Months Ended June 30, 1995 - ------------------------------ Operating revenue and income $ 294,024 $ 240,448 $ 33,416 - $ 12,962 $ 8,703 $ (1,505) Operation and other expense 217,464 178,165 22,749 - 2,257 10,626 3,667 Depreciation and amortization expense 25,327 20,136 5,071 - - 120 - Interest expense 22,489 11,070 4,986 - 4 2 6,427 Income (loss) from equity investments (3,909) - - - 4,619 - (8,528) ---------- --------- --------- --------- -------- -------- Operating income (loss) from continuing operations 24,835 31,077 610 - 15,320 (2,045) (20,127) Income tax expense (benefit) (9,893) 12,833 (47) - 1,950 (17,423) (7,206) ---------- --------- --------- --------- -------- -------- Income (loss) from continuing operations 34,728 $ 18,244 $ 657 - $ 13,370 $ 15,378 $(12,921) ========= ========= ========= ======== ======== Income from discontinued operations 2,842 ---------- Net income $ 37,570 ========== Total assets $1,872,156 $ 993,127 $ 325,348 - $ 518,702 $ 34,181 $ 798 Accumulated depreciation $ 604,884 $ 510,170 $ 94,714 - - - - Accumulated amortization $ 580 - - - - $ 580 - Construction work in progress $ 22,672 $ 9,943 $ 12,729 - - - - - ------------------------------- Purchased July 1, 1995. Includes $3.7 million of minority interest relating to the recognition of tax benefits. (See Note 3.) Includes an $8.5 million pre-tax provision for exiting the equipment manufacturing business. Includes $18.4 million of tax benefits. (See Note 3.)
Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27 Financial Data Schedule -6- 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. Minnesota Power & Light Company ------------------------------- (Registrant) January 22, 1997 D. G. Gartzke ------------------------------ D. G. Gartzke Senior Vice President - Finance and Chief Financial Officer January 22, 1997 Mark A. Schober ----------------------------- Mark A. Schober Corporate Controller -7-
 

UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MINNESOTA POWER'S CONSOLIDATED BALANCE SHEET, STATEMENT OF INCOME, AND STATEMENT OF CASH FLOW FOR THE PERIOD ENDED JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 PER-BOOK 1,118,422 367,313 376,581 108,881 136,834 2,108,031 384,286 0 277,744 591,747 75,000 31,492 653,039 89,330 0 0 70,060 0 0 0 527,080 2,108,031 411,178 15,077 339,347 367,864 49,923 4,898 61,652 28,517 33,135 1,434 31,701 29,685 0 6,120 1.10 1.10 Includes $6,609,000 of Income from Equity Investments and $1,711,000 for Distribution on Redeemable Preferred Securities of Subsidiary.