DULUTH, Minn.--(BUSINESS WIRE)--Feb. 14, 2019--
ALLETE, Inc. (NYSE: ALE) today reported 2018 earnings of $3.38 per share
on net income of $174.1 million and operating revenue of $1.5 billion.
Reported results from 2017 were $3.38 per share on net income of
$172.2 million and operating revenue of $1.4 billion.
Net income in 2017 included a $13.0 million after-tax, or $0.25 per
share, benefit for the re-measurement of ALLETE’s deferred income tax
assets and liabilities resulting from the Tax Cuts and Jobs Act (TCJA)
that was enacted on December 22, 2017. Results for 2017 also reflected a
benefit of $7.9 million after-tax, or $0.16 per share, for the Minnesota
Public Utilities Commission’s (MPUC) modification of its November 2016
order on the allocation of North Dakota investment tax credits. These
benefits were partially offset by a non-cash $11.4 million after-tax
charge, or $0.22 per share, for the MPUC’s decision in Minnesota Power’s
rate case in January 2018, disallowing recovery of Minnesota Power’s
regulatory asset for deferred fuel adjustment clause costs due to the
anticipated adoption of a forward-looking fuel adjustment clause
methodology.
“Our accomplishments in 2018 were many, as evidenced by our strong
financial performance and continued positioning with our multi-faceted
strategy for future growth,” said ALLETE Chairman and CEO Al Hodnik.
“Our hard work and thoughtful positioning over the past several years is
already contributing value to our shareholders and we expect that to
continue for the long-term. 2019 will be a year of robust construction
and further investment for growth as our Regulated Operations and ALLETEClean Energy will complete approximately $400 million in renewable
energy related projects for a cleaner energy future.”
ALLETE’s Regulated Operations segment, which includes Minnesota Power,
Superior Water, Light and Power, and the Company’s investment in the
American Transmission Co. (ATC), recorded 2018 net income of $131.0
million, compared to $128.4 million in 2017. Minnesota Power’s 2017 net
income reflects the previously mentioned $11.4 million after-tax charge
for the MPUC’s decision disallowing recovery of Minnesota Power’s
regulatory asset for deferred fuel adjustment clause costs in 2017. In
addition, net income in 2018 reflects lower transmission revenue
resulting from lower MISO-related revenue, timing of fuel adjustment
clause recoveries, lower industrial sales, and higher property tax and
interest expense. These decreases were partially offset by lower
operating and maintenance expense, higher pricing on power supply
agreements with Other Power Suppliers, increased cost recovery rider
revenue and higher kilowatt hour (kWh) sales to residential and
commercial customers due to more favorable weather conditions in 2018.
ALLETE’s Energy Infrastructure and Related Services businesses, which
include ALLETE Clean Energy and U.S. Water Services, recorded net income
of $33.7 million and $3.2 million, respectively. Earnings at ALLETEClean Energy in 2018 included the sale of a wind energy facility to
Montana-Dakota Utilities, a lower federal income tax rate enacted as
part of TCJA and $7.4 million after-tax of additional production tax
credits as ALLETE Clean Energy continues to execute its refurbishment
strategy. These increases were partially offset by higher operating and
maintenance expenses. Earnings in 2017 included a favorable impact of
$23.6 million after-tax for the remeasurement of deferred income tax
assets and liabilities resulting from the TCJA.
Earnings at U.S. Water Services in 2018 included increased revenue due
to higher capital project sales and higher sales of chemicals and
related services, partially offset by increased operating expenses. 2018
earnings also reflected a $0.6 million after-tax expense recognized as
cost of sales related to purchase price accounting for sales backlog.
Net income in 2017 reflected a $9.2 million after-tax benefit for the
re-measurement of deferred income tax assets and liabilities resulting
from the TCJA.
Corporate and Other businesses, which include BNI Energy and ALLETE
Properties, recorded net income of $6.2 million in 2018 compared to a
net loss of $8.4 million in 2017. Net income in 2018 included an
increase for the change in fair value of the contingent consideration
liability of $1.3 million after-tax. The net loss in 2017 included
additional income tax expense of $19.8 million after-tax for the
remeasurement of deferred income tax assets and liabilities resulting
from the TCJA. The net loss in 2017 also included the previously
mentioned favorable impact of $7.9 million after-tax for the MPUC’s
modification of its November 2016 order on the allocation of North
Dakota investment tax credits.
Earnings were diluted by $0.04 per share in 2018, due to additional
shares of common stock outstanding as of December 31, 2018.
Details of the Company’s 2019 earnings guidance were filed as part of
today’s Form 8-K filing.
Live Webcast on February 14, 2019; financial slides posted on company
website
ALLETE’s earnings conference call will be at 10:00 a.m.
(EST), February 14, 2019, at which time management will discuss fourth
quarter and 2018 financial results. To participate in the call, analysts
are asked to dial 877-303-5852, pass code 4766869, ten minutes prior to
the start time and refer to the “ALLETE’s Conference Call Announcing
Fourth Quarter 2018 Financial Results.” All interested parties may
listen to the live audio-only webcast accompanied by financial slides,
which will be available on ALLETE’s Investor Relations website http://investor.allete.com/events-presentations.
A replay of the call will be available through February 18, 2019 by
calling (855) 859-2056, pass code 4766869. The webcast will be
accessible for one year at www.allete.com.
ALLETE is an energy company headquartered in Duluth, Minn. In addition
to its electric utilities, Minnesota Power and Superior Water, Light and
Power of Wisconsin, ALLETE owns ALLETE Clean Energy, based in Duluth,
BNI Energy in Bismarck, N.D., U.S. Water headquartered in St. Michael,
Minn., and has an eight percent equity interest in the American
Transmission Co. More information about ALLETE is available at www.allete.com.
ALE-CORP
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.
ALLETE's press releases and other communications may include certain
non-Generally Accepted Accounting Principles (GAAP) financial measures.
A “non-GAAP financial measure” is defined as a numerical measure of a
company's financial performance, financial position or cash flows that
excludes (or includes) amounts that are included in (or excluded from)
the most directly comparable measure calculated and presented in
accordance with GAAP in the company's financial statements.
Non-GAAP financial measures utilized by the Company may include
presentations of earnings (loss) per share and earnings before interest,
taxes, depreciation and amortization. ALLETE's management believes that
these non-GAAP financial measures provide useful information to
investors by removing the effect of variances in GAAP reported results
of operations that are not indicative of changes in the fundamental
earnings power of the Company's operations. Management believes that the
presentation of the non-GAAP financial measures is appropriate and
enables investors and analysts to more accurately compare the company's
ongoing financial performance over the periods presented.
|
|
| ALLETE, Inc. |
| Consolidated Statement of Income |
| For the Periods Ended December 31, 2018 and 2017 |
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Year to Date |
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
| Millions Except Per Share Amounts |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracts with Customer – Utility
|
|
|
$270.2
|
|
|
|
$239.7
|
|
|
|
$1,059.5
|
|
|
|
$1,063.8
|
|
|
Contracts with Customer – Non-utility
|
|
|
172.4
|
|
|
|
92.3
|
|
|
|
415.5
|
|
|
|
331.9
|
|
|
Other – Non-utility
|
|
|
5.7
|
|
|
|
5.9
|
|
|
|
23.6
|
|
|
|
23.6
|
|
|
Total Operating Revenue
|
|
|
448.3
|
|
|
|
337.9
|
|
|
|
1,498.6
|
|
|
|
1,419.3
|
|
| Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel, Purchased Power and Gas – Utility
|
|
|
106.9
|
|
|
|
113.7
|
|
|
|
407.5
|
|
|
|
396.9
|
|
|
Transmission Services – Utility
|
|
|
16.8
|
|
|
|
18.1
|
|
|
|
69.9
|
|
|
|
71.2
|
|
|
Cost of Sales – Non-utility
|
|
|
109.4
|
|
|
|
41.6
|
|
|
|
218.0
|
|
|
|
147.5
|
|
|
Operating and Maintenance
|
|
|
86.9
|
|
|
|
92.7
|
|
|
|
340.5
|
|
|
|
344.1
|
|
|
Depreciation and Amortization
|
|
|
52.2
|
|
|
|
26.0
|
|
|
|
205.6
|
|
|
|
177.5
|
|
|
Taxes Other than Income Taxes
|
|
|
14.1
|
|
|
|
14.2
|
|
|
|
57.9
|
|
|
|
56.9
|
|
|
Other
|
|
|
(2.0
|
)
|
|
|
(0.7
|
)
|
|
|
(2.0
|
)
|
|
|
(0.7
|
)
|
|
Total Operating Expenses
|
|
|
384.3
|
|
|
|
305.6
|
|
|
|
1,297.4
|
|
|
|
1,193.4
|
|
| Operating Income |
|
|
64.0
|
|
|
|
32.3
|
|
|
|
201.2
|
|
|
|
225.9
|
|
| Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
(16.3
|
)
|
|
|
(17.3
|
)
|
|
|
(67.9
|
)
|
|
|
(67.8
|
)
|
|
Equity Earnings in ATC
|
|
|
4.5
|
|
|
|
5.2
|
|
|
|
17.5
|
|
|
|
22.5
|
|
|
Other
|
|
|
2.1
|
|
|
|
1.3
|
|
|
|
7.8
|
|
|
|
6.3
|
|
|
Total Other Expense
|
|
|
(9.7
|
)
|
|
|
(10.8
|
)
|
|
|
(42.6
|
)
|
|
|
(39.0
|
)
|
| Income Before Non-Controlling Interest and Income Taxes |
|
|
54.3
|
|
|
|
21.5
|
|
|
|
158.6
|
|
|
|
186.9
|
|
| Income Tax Expense (Benefit) |
|
|
(6.8
|
)
|
|
|
(19.9
|
)
|
|
|
(15.5
|
)
|
|
|
14.7
|
|
| Net Income |
|
|
$61.1
|
|
|
|
$41.4
|
|
|
|
$174.1
|
|
|
|
$172.2
|
|
| Average Shares of Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
51.5
|
|
|
|
51.1
|
|
|
|
51.3
|
|
|
|
50.8
|
|
|
Diluted
|
|
|
51.7
|
|
|
|
51.3
|
|
|
|
51.5
|
|
|
|
51.0
|
|
| Basic Earnings Per Share of Common Stock |
|
|
$1.19
|
|
|
|
$0.81
|
|
|
|
$3.39
|
|
|
|
$3.39
|
|
| Diluted Earnings Per Share of Common Stock |
|
|
$1.18
|
|
|
|
$0.81
|
|
|
|
$3.38
|
|
|
|
$3.38
|
|
| Dividends Per Share of Common Stock |
|
|
$0.56
|
|
|
|
$0.535
|
|
|
|
$2.24
|
|
|
|
$2.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated Balance Sheet |
|
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec. 31, |
|
|
Dec. 31, |
|
|
|
|
|
Dec. 31, |
|
|
Dec. 31, |
|
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
2018 |
|
|
2017 |
| Assets |
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
Cash and Cash Equivalents
|
|
|
$69.1
|
|
|
$98.9
|
|
|
Current Liabilities
|
|
|
$405.1
|
|
|
$351.2
|
|
Other Current Assets
|
|
|
265.2
|
|
|
268.6
|
|
|
Long-Term Debt
|
|
|
1,428.5
|
|
|
1,439.2
|
|
Property, Plant and Equipment – Net
|
|
|
3,904.4
|
|
|
3,822.4
|
|
|
Deferred Income Taxes
|
|
|
223.6
|
|
|
230.5
|
|
Regulatory Assets
|
|
|
389.5
|
|
|
384.7
|
|
|
Regulatory Liabilities
|
|
|
512.1
|
|
|
532.0
|
|
Equity Investments
|
|
|
161.1
|
|
|
118.7
|
|
|
Defined Benefit Pension & Other Postretirement Benefit Plans
|
|
|
177.3
|
|
|
191.8
|
|
Other Investments
|
|
|
49.1
|
|
|
53.1
|
|
|
Other Non-Current Liabilities
|
|
|
262.6
|
|
|
267.1
|
|
Goodwill and Intangibles – Net
|
|
|
223.3
|
|
|
225.9
|
|
|
Equity
|
|
|
2,155.8
|
|
|
2,068.2
|
|
Other Non-Current Assets
|
|
|
103.3
|
|
|
107.7
|
|
|
|
|
|
|
|
|
|
| Total Assets |
|
|
$5,165.0
|
|
|
$5,080.0
|
|
|
Total Liabilities and Equity |
|
|
$5,165.0
|
|
|
$5,080.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Year to Date |
| ALLETE, Inc. |
|
|
December 31, |
|
|
December 31, |
| Income (Loss) |
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated Operations
|
|
|
$31.3
|
|
|
$18.3
|
|
|
|
$131.0
|
|
|
$128.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy Infrastructure and Related Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLETE Clean Energy
|
|
|
17.8
|
|
|
30.4
|
|
|
|
33.7
|
|
|
41.5
|
|
|
U.S. Water Services
|
|
|
2.7
|
|
|
9.1
|
|
|
|
3.2
|
|
|
10.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other
|
|
|
9.3
|
|
|
(16.4
|
)
|
|
|
6.2
|
|
|
(8.4
|
)
|
|
Net Income Attributable to ALLETE
|
|
|
$61.1
|
|
|
$41.4
|
|
|
|
$174.1
|
|
|
$172.2
|
|
| Diluted Earnings Per Share |
|
|
$1.18
|
|
|
$0.81
|
|
|
|
$3.38
|
|
|
$3.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Statistical Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High
|
|
|
$82.82
|
|
|
$81.24
|
|
|
|
$82.82
|
|
|
$81.24
|
|
|
Low
|
|
|
$72.42
|
|
|
$72.96
|
|
|
|
$66.64
|
|
|
$61.64
|
|
|
Close
|
|
|
$76.22
|
|
|
$74.36
|
|
|
|
$76.22
|
|
|
$74.36
|
|
|
Book Value
|
|
|
$41.85
|
|
|
$40.46
|
|
|
|
$41.85
|
|
|
$40.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Kilowatt-hours Sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated Utility
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail and Municipal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
|
304
|
|
|
305
|
|
|
|
1,140
|
|
|
1,096
|
|
|
Commercial
|
|
|
351
|
|
|
359
|
|
|
|
1,426
|
|
|
1,420
|
|
|
Industrial
|
|
|
1,843
|
|
|
1,890
|
|
|
|
7,261
|
|
|
7,327
|
|
|
Municipal
|
|
|
195
|
|
|
208
|
|
|
|
798
|
|
|
799
|
|
|
Total Retail and Municipal
|
|
|
2,693
|
|
|
2,762
|
|
|
|
10,625
|
|
|
10,642
|
|
|
Other Power Suppliers
|
|
|
977
|
|
|
1,017
|
|
|
|
3,953
|
|
|
4,039
|
|
|
Total Regulated Utility
|
|
|
3,670
|
|
|
3,779
|
|
|
|
14,578
|
|
|
14,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Regulated Utility Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated Utility Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail and Municipal Electric Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
|
$33.6
|
|
|
$28.4
|
|
|
|
$126.1
|
|
|
$114.8
|
|
|
Commercial
|
|
|
35.5
|
|
|
29.8
|
|
|
|
141.9
|
|
|
133.6
|
|
|
Industrial
|
|
|
120.3
|
|
|
103.1
|
|
|
|
465.2
|
|
|
465.9
|
|
|
Municipal
|
|
|
13.1
|
|
|
12.8
|
|
|
|
54.9
|
|
|
57.9
|
|
|
Total Retail and Municipal
|
|
|
202.5
|
|
|
174.1
|
|
|
|
788.1
|
|
|
772.2
|
|
|
Other Power Suppliers
|
|
|
43.0
|
|
|
37.7
|
|
|
|
170.3
|
|
|
161.8
|
|
|
Other (Includes Water and Gas Revenue)
|
|
|
24.7
|
|
|
27.9
|
|
|
|
101.1
|
|
|
129.8
|
|
|
Total Regulated Utility Revenue
|
|
|
$270.2
|
|
|
$239.7
|
|
|
|
$1,059.5
|
|
|
$1,063.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190214005162/en/
Source: ALLETE, Inc.
Investor Contact:
Vince Meyer
218-723-3952
vmeyer@allete.com