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) - JANUARY 24, 2002 ALLETE, Inc. A Minnesota Corporation Commission File No. 1-3548 IRS Employer Identification No. 41-0418150 30 West Superior Street Duluth, Minnesota 55802-2093 Telephone - (218) 279-5000
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS The following exhibit of ALLETE, Inc. is filed herewith in accordance with Item 601 of Regulation S-K: Exhibit Number 99 - ALLETE News Release dated January 24, 2002. ALLETE Form 8-K dated January 24, 2002 1
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, ALLETE is hereby filing cautionary statements identifying important factors that could cause ALLETE's actual results to differ materially from those projected in forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) made by or on behalf of ALLETE which are made in this Form 8-K, in presentations, in response to questions or otherwise. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "will likely result," "will continue" or similar expressions) are not statements of historical facts and may be forward-looking. Forward-looking statements involve estimates, assumptions and uncertainties and are qualified in their entirety by reference to, and are accompanied by, the following important factors, which are difficult to predict, contain uncertainties, are beyond the control of ALLETE and may cause actual results to differ materially from those contained in forward-looking statements: - war and acts of terrorism; - prevailing governmental policies and regulatory actions, including those of the United States Congress, state legislatures, the Federal Energy Regulatory Commission, the Minnesota Public Utilities Commission, the Florida Public Service Commission, the North Carolina Utilities Commission, the Public Service Commission of Wisconsin and various county regulators, about allowed rates of return, industry and rate structure, acquisition and disposal of assets and facilities, operation and construction of plant facilities, recovery of purchased power and capital investments, and present or prospective wholesale and retail competition (including but not limited to transmission costs); - economic and geographic factors, including political and economic risks; - changes in and compliance with environmental and safety laws and policies; - weather conditions; - population growth rates and demographic patterns; - competition for retail and wholesale customers; - pricing and transportation of commodities; - market demand, including structural market changes; - changes in tax rates or policies or in rates of inflation; - changes in project costs; - unanticipated changes in operating expenses and capital expenditures; - capital market conditions; - competition for new energy development opportunities; and - legal and administrative proceedings (whether civil or criminal)and settlements that influence the business and profitability of ALLETE. Any forward-looking statement speaks only as of the date on which that statement is made, and ALLETE undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which that statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for management to predict all of those factors, nor can it assess the impact of each of those factors on the businesses of ALLETE or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. 2 ALLETE Form 8-K dated January 24, 2002
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. January 24, 2002 James K. Vizanko ----------------------------------------------------- James K. Vizanko Vice President, Chief Financial Officer and Treasurer ALLETE Form 8-K dated January 24, 2002 3
EXHIBIT INDEX Exhibit Number 99 - ALLETE News Release dated January 24, 2002
Exhibit 99 [ALLETE LOGO] For Release: January 24, 2002 CONTACT: Eric Olson 218-723-3947 eolson@allete.com INVESTOR Tim Thorp CONTACT: 218-723-3953 NEWS tthorp@allete.com ALLETE POSTS SOLID 2001 RESULTS ------------------------------- (Duluth, Minn.)--ALLETE, Inc. (NYSE: ALE) today announced earnings, before one-time events, of 37 cents per share for the fourth quarter of 2001, compared with 27 cents for the same period last year. Excluding the one-time events, annual earnings per share were $1.87, compared with $1.67 in 2000, an increase of 12 percent. The aforementioned earnings figures exclude a 6 cents per share exit charge recorded by ALLETE's vehicle transport company in 2001 and a 44 cent gain in 2000 relating to the company's past investment in ACE Limited. Reported earnings per share in 2001, including the one-time events, were 31 cents for the quarter and $1.81 for the year, compared with 27 cents for the quarter and $2.11 in 2000. "The strength of our core business units--energy and automotive services became evident more than ever in 2001," said David Gartzke, chairman, president and chief executive officer of ALLETE. "Despite economic adversity both nationally and regionally, our people weathered the storms and helped us meet or exceed our growth targets for the year." In the fourth quarter of 2001, AUTOMOTIVE SERVICES posted an earnings increase of $8.6 million over the same period in 2000 due mainly to acquisitions and an increase in the number of vehicles sold at auction and financed by Automotive Finance Corporation (AFC). For the year, Automotive Services net income was $74.8 million, a 50 percent increase over 2000, exceeding the company's stated growth goal of 40 percent. Same-store earnings at ADESA wholesale auctions increased by 13 percent over 2000 levels as measured by earnings before interest, taxes, depreciation, amortization and lease expense. At AFC, the number of vehicles financed in 2001 rose to 904,000, an increase of 14 percent over 2000. ENERGY SERVICES reported fourth quarter earnings of $11.4 million, about the same as the fourth quarter of 2000. For the year, net income increased to $50 million, a 16 percent increase over 2000, due primarily to increased margins from wholesale power marketing and trading. INVESTMENTS and CORPORATE CHARGES include the investment portfolio, real estate, emerging technology investments and corporate charges. For the quarter, net income from segment fell by $300,000 compared with 2000. Earnings in 2001 were $3.8 million. ALLETE plans to exit its water business and is entertaining purchase offers from interested parties. This potential sale would provide additional funds for ALLETE to aggressively seek new growth initiatives. Looking ahead to 2002, ALLETE anticipates earnings per share growth of between 8 and 10 percent over $1.87, and 20 percent net income growth in Automotive Services. These projections do not reflect newly mandated changes in accounting standards. Taking these changes into account, ALLETE's growth projections for 2002 are between 14 and 16 percent, and over 30 percent for Automotive Services. -more-
ALLETE NEWS RELEASE PAGE 2 - -------------------------------------------------------------------------------- ALLETE's corporate headquarters are located in Duluth, Minnesota. ALLETE's holdings include the second largest wholesale automobile auction network in North America, the leading provider of independent auto dealer inventory financing, significant real estate holdings in Florida and a low-cost electric utility that serves some of the largest industrial customers in the United States. For more information about ALLETE, visit the company'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. ### [LOGO] recycled paper ALLETE - 30 West Superior Street, Duluth, Minnesota 55802 www.allete.com
ALLETE NEWS RELEASE PAGE 3 - -------------------------------------------------------------------------------- ALLETE, INC. CONSOLIDATED STATEMENT OF INCOME FOR THE PERIODS ENDED DECEMBER 31, 2001 AND 2000 Millions Except Per Share Amounts QUARTER ENDED YEAR TO DATE 2001 2000 2001 2000 - ----------------------------------------------------------------------------------------------------------------------------------- OPERATING REVENUE Energy Services $145.5 $162.9 $ 620.8 $ 589.5 Automotive Services 205.9 153.6 832.1 522.6 Investments 10.2 7.4 74.8 77.4 - ----------------------------------------------------------------------------------------------------------------------------------- Total Operating Revenue 361.6 323.9 1,527.7 1,189.5 - ----------------------------------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Fuel and Purchased Power 53.7 62.3 233.1 229.0 Operations 253.7 214.2 1,012.1 730.6 Interest Expense 16.9 19.4 74.7 58.8 - ----------------------------------------------------------------------------------------------------------------------------------- Total Operating Expenses 324.3 295.9 1,319.9 1,018.4 - ----------------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME BEFORE ACE 37.3 28.0 207.8 171.1 INCOME FROM DISPOSITION OF INVESTMENT IN ACE - - - 48.0 - ----------------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME 37.3 28.0 207.8 219.1 DISTRIBUTIONS ON REDEEMABLE PREFERRED SECURITIES OF ALLETE CAPITAL I 1.5 1.5 6.0 6.0 INCOME TAX EXPENSE 11.1 9.8 73.2 76.2 - ----------------------------------------------------------------------------------------------------------------------------------- INCOME FROM CONTINUING OPERATIONS 24.7 16.7 128.6 136.9 INCOME FROM DISCONTINUED OPERATIONS 0.8 2.3 10.1 11.7 - ----------------------------------------------------------------------------------------------------------------------------------- NET INCOME $ 25.5 $ 19.0 $ 138.7 $ 148.6 - ----------------------------------------------------------------------------------------------------------------------------------- AVERAGE SHARES OF COMMON STOCK Basic 79.6 70.3 75.8 69.8 Diluted 80.4 70.6 76.5 70.1 - ----------------------------------------------------------------------------------------------------------------------------------- EARNINGS PER SHARE OF COMMON STOCK Basic - Continuing Operations $0.30 $0.24 $1.70 $1.95 Discontinued Operations 0.01 0.03 0.13 0.17 - ----------------------------------------------------------------------------------------------------------------------------------- $0.31 $0.27 $1.83 $2.12 - ----------------------------------------------------------------------------------------------------------------------------------- Diluted - Continuing Operations $0.30 $0.24 $1.68 $1.94 Discontinued Operations 0.01 0.03 0.13 0.17 - ----------------------------------------------------------------------------------------------------------------------------------- $0.31 $0.27 $1.81 $2.11 - ----------------------------------------------------------------------------------------------------------------------------------- DIVIDENDS PER SHARE OF COMMON STOCK $0.2675 $0.2675 $1.07 $1.07 - ----------------------------------------------------------------------------------------------------------------------------------- ALLETE, INC. CONSOLIDATED BALANCE SHEET FOR THE PERIODS ENDED DECEMBER 31, 2001 AND 2000 Millions 2001 2000 - ------------------------------------------------------------------------- ASSETS Current Assets $ 909.9 $ 731.0 Property, Plant and Equipment 1,324.0 1,201.9 Investments 141.0 116.4 Goodwill 494.4 472.8 Other 103.6 87.3 Discontinued Operations 309.6 304.6 - ------------------------------------------------------------------------- TOTAL ASSETS $3,282.5 $2,914.0 - ------------------------------------------------------------------------- 2001 2000 - ------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities $ 704.5 $ 707.0 Long-Term Debt 933.8 817.2 Other Liabilities 270.3 257.5 Discontinued Operations 155.1 156.5 Mandatorily Redeemable Preferred Securities of ALLETE Capital I 75.0 75.0 Stockholders' Equity 1,143.8 900.8 - ------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,282.5 $2,914.0 - -------------------------------------------------------------------------
ALLETE NEWS RELEASE PAGE 4 - -------------------------------------------------------------------------------- QUARTER ENDED YEAR TO DATE DECEMBER 31, DECEMBER 31, ALLETE, INC. 2001 2000 2001 2000 - -------------------------------------------------------------------------------------------------------------------------------- NET INCOME Millions Energy Services $11.4 $11.7 $ 50.0 $ 43.1 Automotive Services 15.6 7.0 74.8 49.9 Investments and Corporate Charges (2.3) (2.0) 3.8 13.5 - -------------------------------------------------------------------------------------------------------------------------------- Net Income Before ACE 24.7 16.7 128.6 106.5 - -------------------------------------------------------------------------------------------------------------------------------- ACE Transaction
- - - 30.4 - -------------------------------------------------------------------------------------------------------------------------------- Income from Continuing Operations 24.7 16.7 128.6 136.9 Income from Discontinued Operations 0.8 2.3 10.1 11.7 - -------------------------------------------------------------------------------------------------------------------------------- Net Income $25.5 $19.0 $138.7 $148.6 - -------------------------------------------------------------------------------------------------------------------------------- DILUTED EARNINGS PER SHARE Continuing Operations Before ACE Transaction $0.30 $0.24 $1.68 $1.50 ACE Transaction - - - 0.44 - -------------------------------------------------------------------------------------------------------------------------------- 0.30 0.24 1.68 $1.94 Discontinued Operations 0.01 0.03 0.13 0.17 - -------------------------------------------------------------------------------------------------------------------------------- $0.31 $0.27 $1.81 $2.11 - -------------------------------------------------------------------------------------------------------------------------------- QUARTER ENDED YEAR TO DATE DECEMBER 31, DECEMBER 31, STATISTICAL DATA 2001 2000 2001 2000 - -------------------------------------------------------------------------------------------------------------------------------- CORPORATE Common Stock High $25.85 $25.50 $26.89 $25.50 Low $21.14 $20.13 $20.19 $14.75 Close $25.20 $24.81 $25.20 $24.81 Book Value $13.63 $12.06 $13.63 $12.06 ENERGY SERVICES Millions of Kilowatthours Sold Retail Residential 233.7 248.8 997.5 980.1 Commercial 268.5 272.3 1,233.9 1,207.9 Industrial 1,541.9 1,699.7 6,549.3 7,193.7 Other 18.0 18.8 75.3 76.1 Resale 605.4 655.7 2,085.8 2,272.9 - --------------------------------------------------------------------------------------------------------------------------------- 2,667.5 2,895.3 10,941.8 11,730.7 AUTOMOTIVE SERVICES Vehicles Sold Wholesale 408,000 364,000 1,761,000 1,286,000 Total Loss 45,000 16,000 148,000 33,000 - --------------------------------------------------------------------------------------------------------------------------------- 453,000 380,000 1,909,000 1,319,000 Conversion Rate - Wholesale Vehicles 54.5% 54.1% 58.1% 59.4% Vehicles Financed 228,000 200,000 904,000 795,000 EBITDAL (Millions) In May 2000 ALLETE, Inc. sold its investment in ACE Limited common stock, which resulted in an after-tax gain of $30.4 million, or $0.44 per share. The ACE shares were received in December 1999 upon completion of ACE's merger with Capital Re Corporation. Discontinued operations included the operating results of ALLETE's Water Services businesses and its auto transport company. During the fourth quarter of 2001 ALLETE recognized a $4.4 million, or $0.06 per share, estimated charge to exit the auto transport company. $47.7 $36.3 $221.2 $151.8 - ------------- Earnings Before Interest, Taxes, Depreciation, Amortization and Lease Expense