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                       Securities and Exchange Commission
                              Washington, DC 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 September 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,
                          32,571,548 shares outstanding
                            as of September 30, 1996






- -------------------------------------------------------------------------------
     This Amendment No. 1 to Minnesota Power & Light Company's (Company) 
Quarterly Report on Form  10-Q for the quarter ended September 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 
Captial 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-




   
                                                  Minnesota Power
                                        Consolidated Statement of Income
                               In Thousands Except Per Share Amounts - Unaudited

Quarter Ended Nine Months Ended September 30, September 30, 1996 1995 1996 1995 - ------------------------------------------------------------------------------------------------------------------- Operating Revenue and Income Electric operations $ 133,480 $ 131,036 $ 394,200 $ 371,486 Water operations 20,848 16,678 63,124 50,093 Automobile auctions 50,464 30,492 135,372 30,492 Investments 10,358 7,915 33,631 28,074 --------- ---------- --------- --------- Total operating revenue and income 215,150 186,121 626,327 480,145 --------- ---------- --------- --------- Operating Expenses Fuel and purchased power 50,937 46,087 142,871 130,510 Operations 90,676 75,696 263,741 198,812 Administrative and general 38,571 29,768 112,918 65,018 Interest expense 16,074 13,246 44,593 35,735 --------- ---------- --------- --------- Total operating expenses 196,258 164,797 564,123 430,075 --------- ---------- --------- --------- Income (Loss) from Equity Investments 2,832 2,339 9,441 (1,570) --------- ---------- --------- --------- Operating Income from Continuing Operations 21,724 23,663 71,645 48,500 Distributions on Redeemable Preferred Securities of Subsidiary 1,509 - 3,220 - Income Tax Expense (Benefit) 2,701 7,978 17,777 (1,915) --------- ---------- --------- --------- Income from Continuing Operations 17,514 15,685 50,648 50,415 Income from Discontinued Operations - 33 - 2,874 --------- ---------- --------- --------- Net Income 17,514 15,718 50,648 53,289 Dividends on Preferred Stock 487 800 1,921 2,400 --------- ---------- --------- --------- Earnings Available for Common Stock $ 17,027 $ 14,918 $ 48,727 $ 50,889 ========= ========== ========= ========= Average Shares of Common Stock 29,428 28,512 29,091 28,443 Earnings Per Share of Common Stock Continuing operations $ .58 $ .52 $ 1.68 $ 1.69 Discontinued operations - .00 - .10 ------ ------ ------ ------ Total $ .58 $ .52 $ 1.68 $ 1.79 ====== ====== ====== ====== Dividends Per Share of Common Stock $ .51 $ .51 $ 1.53 $ 1.53 - ------------------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of this statement.
-2- Minnesota Power Consolidated Statement of Cash Flows In Thousands - Unaudited
Nine Months Ended September 30, 1996 1995 - ------------------------------------------------------------------------------------------------------------------- Operating Activities Net income $ 50,648 $ 53,289 Depreciation and amortization 49,310 40,269 Deferred income taxes (5,161) (28,491) Deferred investment tax credits (1,503) (1,437) Pre-tax gain on sale of plant (1,073) - Pre-tax loss on disposal of discontinued operations - 1,760 Changes in operating assets and liabilities excluding the effects of discontinued operations Trading securities (38,652) 20,127 Notes and accounts receivable (55,426) (6,748) Fuel, material and supplies 1,208 (1,015) Accounts payable 12,522 16,560 Other current assets and liabilities 7,986 13,977 Other - net 17,150 (8,388) ---------- --------- Cash from operating activities 37,009 99,903 ---------- --------- Investing Activities Proceeds from sale of investments in securities 32,488 77,997 Proceeds from sale of plant 5,311 - Proceeds from sale of discontinued operations - 107,633 Additions to investments (84,138) (43,405) Additions to plant (71,894) (73,053) Acquisition of subsidiaries - net of cash acquired (44,013) (129,083) Changes to other assets - net 5,358 (447) ---------- --------- Cash for investing activities (156,888) (60,358) ---------- --------- Financing Activities Issuance of long-term debt 190,549 18,805 Issuance of Company obligated mandatorily redeemable preferred securities of subsidiary MP&L Capital I - net 72,270 - Issuance of common stock 14,271 2,158 Changes in notes payable 51,063 10,006 Reductions of long-term debt (139,042) (9,074) Redemption of preferred stock (17,568) - Dividends on preferred and common stock (46,303) (45,974) ---------- --------- Cash from (for) financing activities 125,240 (24,079) ---------- --------- Change in Cash and Cash Equivalents 5,361 15,466 Cash and Cash Equivalents at Beginning of Period 31,577 27,001 ---------- --------- Cash and Cash Equivalents at End of Period $ 36,938 $ 42,467 ========== ========= Supplemental Cash Flow Information Cash paid during the period for Interest (net of capitalized) $ 43,164 $ 40,249 Income taxes $ 17,338 $ 20,534 - ------------------------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of this statement.
-3- Note 1. Business Segments In Thousands
Investments -------------------- Corporate Electric Water Automobile Portfolio & Real Charges Consolidated Operations Operations Auctions Reinsurance Estate & Other ------------ ---------- ---------- ------------ ------------ ------ --------- Quarter Ended September 30, 1996 - -------------------------------- Operating revenue and income $215,150 $133,480 $ 20,848 $ 50,464 $5,334 $ 5,345 $ (321) Operation and other expense 163,386 100,073 13,637 42,395 732 4,623 1,926 Depreciation and amortization expense 16,798 10,412 3,079 3,299 - 8 - Interest expense 16,074 5,681 3,112 2,880 - 363 4,038 Income from equity investments 2,832 - - - 2,832 - - -------- -------- -------- -------- ------ ------- ------- Operating income (loss) 21,724 17,314 1,020 1,890 7,434 351 (6,285) Distributions on redeemable preferred securities of subsidiary 1,509 424 - - - - 1,085 Income tax expense (benefit) 2,701 6,343 292 1,158 2,202 (3,553) (3,741) -------- -------- -------- -------- ------ ------- ------- Net income $ 17,514 $ 10,547 $ 728 $ 732 $5,232 $ 3,904 $(3,629) ======== ======== ======== ======== ====== ======= ======== Quarter Ended September 30, 1995 - -------------------------------- Operating revenue and income $186,121 $131,036 $ 16,678 $ 30,492 $3,813 $ 4,373 $ (271) Operation and other expense 136,609 92,902 11,699 25,650 593 3,721 2,044 Depreciation and amortization expense 14,942 10,089 2,502 2,291 - 60 - Interest expense 13,246 5,650 2,497 907 2 1 4,189 Income from equity investments 2,339 - - - 2,339 - - -------- -------- -------- -------- ------ ------- ------- Operating income (loss) from continuing operations 23,663 22,395 (20) 1,644 5,557 591 (6,504) Income tax expense (benefit) 7,978 9,187 (123) 856 1,468 292 (3,702) -------- -------- -------- -------- ------ ------- ------- Income (loss) from continuing operations 15,685 $ 13,208 $ 103 $ 788 $4,089 $ 299 $(2,802) ======== ======== ======== ====== ======= ======= Income from discontinued operations 33 -------- Net income $ 15,718 ======== - ------------------------ Purchased 80 percent on July 1, 1995, another 3 percent on January 31, 1996 and the remaining 17 percent on August 21, 1996. Includes $800,000 of minority interest relating to the recognition of tax benefits. (See Note 3.) Includes $4 million of tax benefits. (See Note 3.)
-4- Note 1. Business Segments (Continued) In Thousands
Investments ---------------------- Corporate Electric Water Automobile Portfolio & Real Charges Consolidated Operations Operations Auctions Reinsurance Estate & Other ------------ ---------- ---------- ------------ ------------ ------ --------- Nine Months Ended September 30, 1996 Operating revenue and income $ 626,327 $ 394,200 $ 63,124 $135,372 $ 13,939 $ 20,626 $ (934) Operation and other expense 470,220 297,594 39,081 113,623 1,986 11,681 6,255 Depreciation and amortization expense 49,310 31,424 9,286 8,554 - 46 - Interest expense 44,593 16,897 9,456 6,188 1 851 11,200 Income from equity investments 9,441 - - - 9,441 - - ---------- --------- --------- -------- --------- -------- -------- Operating income (loss) 71,645 48,285 5,301 7,007 21,393 8,048 (18,389) Distributions on redeemable preferred securities of subsidiary 3,220 904 - - - - 2,316 Income tax expense (benefit) 17,777 17,710 1,750 3,822 5,099 (1,972) (8,632) ---------- --------- --------- -------- --------- -------- -------- Net income $ 50,648 $ 29,671 $ 3,551 $ 3,185 $ 16,294 $ 10,020 $(12,073) ========== ========= ========= ======== ========= ======== ======== Total assets $2,145,637 $ 980,187 $ 339,544 $479,254 $ 260,658 $ 84,202 $ 1,792 Accumulated depreciation $ 661,643 $ 536,707 $ 119,272 $ 5,664 - - - Accumulated amortization $ 6,970 - - $ 6,028 - $ 942 - Construction work in progress $ 38,279 $ 11,813 $ 14,786 $ 11,680 - - - Nine Months Ended September 30, 1995 Operating revenue and income $ 480,145 $ 371,486 $ 50,093 $ 30,492 $ 16,775 $ 13,076 $ (1,777) Operation and other expense 354,071 271,672 34,448 25,650 2,243 14,347 5,711 Depreciation and amortization expense 40,269 30,225 7,573 2,291 - 180 - Interest expense 35,735 16,720 7,483 907 6 3 10,616 Income (loss) from equity investments (1,570) - - - 6,958 - (8,528) ---------- --------- --------- -------- --------- -------- -------- Operating income (loss) from continuing operations 48,500 52,869 589 1,644 21,484 (1,454) (26,632) Income tax expense (benefit) (1,915) 22,020 (170) 856 3,418 (17,131) (10,908) ---------- --------- --------- -------- --------- -------- -------- Income (loss) from continuing operations 50,415 $ 30,849 $ 759 $ 788 $ 18,066 $ 15,677 $(15,724) ========= ========= ======== ========= ======== ======== Income from discontinued operations 2,874 ---------- Net income $ 53,289 ========== Total assets $1,932,822 $ 997,599 $ 308,348 $343,267 $ 229,592 $ 53,266 $ 750 Accumulated depreciation $ 617,532 $ 519,862 $ 96,713 $ 957 - - - Accumulated amortization $ 1,949 - - $ 1,297 - $ 652 - Construction work in progress $ 69,135 $ 12,488 $ 20,258 $ 36,389 - - - - ----------------------- Purchased 80 percent on July 1, 1995, another 3 percent on January 31, 1996 and the remaining 17 percent on August 21, 1996. Includes $1.2 and $3.7 million of minority interest relating to the recognition of tax benefits in 1996 and 1995, respectively. (See Note 3.) Includes $6 and $18.4 million of tax benefits in 1996 and 1995, respectively. (See Note 3.) Includes an $8.5 million pre-tax provision for exiting the equipment manufacturing business.
Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27 Financial Data Schedule -5- 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 -6-
 

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 SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 PER-BOOK 1,117,059 394,524 362,443 106,666 164,945 2,145,637 389,698 0 280,073 600,893 75,000 31,492 638,845 150,508 0 0 64,745 0 0 0 515,276 2,145,637 626,327 17,777 519,530 564,123 71,645 6,221 95,241 44,593 50,648 1,921 48,727 44,382 0 37,009 1.68 1.68 Includes $9,441,000 of Income from Equity Investments and $3,220,000 for Distribution on Redeemable Preferred Securities of Subsidiary.