ALLETE Reports Solid Second Quarter Earnings
DULUTH, Minn., July 19 ALLETE, Inc. today
reported earnings of 57 cents per share for the second quarter of 2001, a
19 percent increase over a year ago. The stated increase excludes a gain of
44 cents per share from the sale of the company's investment in ACE Limited
last year. Quarterly revenue was $443.0 million, compared to $327.0 million in
2000. This 35 percent increase reflects the success of ALLETE's growth
initiatives. The second quarter results bring year-to-date earnings to
$1.03 per share, 13 percent ahead of last year, excluding ACE. ALLETE remains
on track to achieve its target of 12 percent annual earnings growth for 2001.
"Being a diversified company, we're not dependent on a single business to
deliver value to our shareholders," said Ed Russell, ALLETE President and CEO.
"Our strong second quarter is a clear example of this strategy at work, and
we're delighted with the results."
Automotive Services net income climbed 37 percent for the quarter,
42 percent year-to-date, which is in line with expectations set for 2001.
ADESA vehicle sales for the quarter rose 60 percent over a year ago, due
primarily to the addition of 28 vehicle auctions. At Automotive Finance
Corporation, the number of vehicles financed grew by 15 percent.
ALLETE's Investments portfolio recorded a 70 percent increase in net
income, boosted by a $29 million real estate sale at Cape Coral, Fla., along
with strong sales at other Florida locations. Year-to-date, Investments
contributed $22.8 million, compared to $21.7 million, illustrating the
strength of this segment.
Energy Services net income for the quarter was up modestly compared to
last year, despite approximately $1.3 million in additional costs incurred by
Minnesota Power caused by a severe April ice storm and wind damage. Even with
these unexpected costs, year-to-date net income is up by 7 percent over last
year.
Water Services net income declined slightly in the quarter, due in large
part to a 9 percent decrease in water consumption primarily attributable to
above-average rainfall in Florida. Customer growth, however, climbed a robust
7 percent compared to a year ago.
ALLETE is a multi-services company with corporate headquarters in Duluth,
Minn. ALLETE's holdings include the second-largest wholesale automobile
auction network in North America; the leading provider of independent auto
dealer inventory financing; the largest investor-owned water utilities in
Florida and North Carolina; significant real estate holdings in Florida; and a
low-cost electric utility that serves some of the largest industrial customers
in the United States.
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, Inc.
Consolidated Statement of Income
For the Periods Ended June 30, 2001 and 2000
Millions Except Per Share Amounts
Quarter Ended Year to Date
2001 2000 2001 2000
Operating Revenue
Energy Services $147.9 $138.9 $307.3 $280.5
Automotive Services 220.8 129.7 431.9 249.2
Water Services 31.4 31.7 60.9 59.7
Investments 42.9 26.7 55.9 60.2
Total Operating
Revenue 443.0 327.0 856.0 649.6
Operating Expenses
Fuel and Purchased Power 56.8 53.5 119.2 106.6
Operations 292.6 201.2 565.2 402.4
Interest Expense 21.4 15.2 43.4 31.5
Total Operating
Expenses 370.8 269.9 727.8 540.5
Operating Income
Before ACE 72.2 57.1 128.2 109.1
Disposition of
Investment in ACE -- 48.0 -- 48.0
Operating Income 72.2 105.1 128.2 157.1
Distributions on Redeemable
Preferred Securities of
ALLETE Capital I 1.5 1.5 3.0 3.0
Income Tax Expense 28.2 39.4 49.8 59.5
Net Income $42.5 $64.2 $75.4 $94.6
Average Shares of
Common Stock
Basic 73.4 69.6 72.4 69.4
Diluted 74.0 69.9 73.0 69.5
Earnings Per Share
of Common Stock
Basic $0.58 $0.92 $1.04 $1.35
Diluted $0.57 $0.92 $1.03 $1.35
Dividends Per Share
of Common Stock $0.2675 $0.2675 $0.535 $0.535
ALLETE, Inc.
Consolidated Balance Sheet
Millions
Jun. 30, Dec. 31,
2001 2000
Assets
Current Assets $1,024.8 $731.0
Property, Plant and Equipment 1,528.3 1,479.7
Investments 114.6 116.4
Goodwill 503.6 472.8
Other 122.5 114.1
Total Assets $3,293.8 $2,914.0
Liabilities and Stockholders' Equity
Current Liabilities $739.5 $707.0
Long-Term Debt 1,068.8 952.3
Other Liabilities 300.1 278.9
Mandatorily Redeemable Preferred Securities
of ALLETE Capital I 75.0 75.0
Stockholders' Equity 1,110.4 900.8
Total Liabilities and Stockholders' Equity $3,293.8 $2,914.0
Quarter Ended Year to Date
June 30, June 30,
ALLETE, Inc. 2001 2000 2001 2000
Net Income
Millions
Energy Services $9.5 $9.3 $21.4 $20.0
Automotive Services 20.1 14.7 37.8 26.6
Water Services 3.7 4.1 6.8 6.5
Investments 17.3 10.2 22.8 21.7
Corporate Charges (8.1) (4.5) (13.4) (10.6)
Net Income Before ACE 42.5 33.8 75.4 64.2
ACE Transaction * -- 30.4 -- 30.4
Net Income $42.5 $64.2 $75.4 $94.6
Diluted Earnings Per Share
Before ACE Transaction $0.57 $0.48 $1.03 $0.91
ACE Transaction * -- 0.44 -- 0.44
$0.57 $0.92 $1.03 $1.35
* In May 2000 ALLETE, Inc. sold its investment in ACE Limited (ACE) 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.
Statistical Data
Corporate
Common Stock
High $26.13 $20.75 $26.13 $20.75
Low $22.04 $16.00 $20.19 $14.75
Close $22.50 $17.31 $22.50 $17.31
Book Value $13.45 $11.79 $13.45 $11.79
Energy Services
Millions of Kilowatthours
Sold
Retail
Residential 199.0 192.0 469.4 449.9
Commercial 257.6 245.0 543.0 521.7
Industrial 1,630.4 1,719.4 3,154.7 3,438.3
Other 17.3 17.3 36.1 35.6
Resale 542.6 686.1 1,356.7 1,534.0
2,646.9 2,859.8 5,559.9 5,979.5
Automotive Services
Vehicles Sold 492,000 307,000 993,000 602,000
Vehicles Financed 232,000 202,000 453,000 397,000
EBITDAL (Millions) ** $60.4 $39.6 $118.2 $74.0
Water Services
Millions of Gallons Billed
Florida Water Services
Water 5,120.9 5,713.7 9,539.1 9,951.9
Wastewater 1,347.3 1,278.0 2,644.3 2,477.7
Heater Utilities
Water 992.5 973.3 1,664.6 1,656.8
** Earnings Before Interest, Taxes, Depreciation, Amortization and Lease
Expense