Business Wire | Nov 4, 2021 06:30AM EDT

ALLETE, Inc. Reports Third Quarter Earnings of 53 Cents; Reaffirms 2021 Earnings Guidance Range

Nov. 04, 2021

DULUTH, Minn.--(BUSINESS WIRE)--Nov. 04, 2021--ALLETE, Inc. (NYSE: ALE) today reported third quarter 2021 earnings of 53 cents per share on net income of $27.6 million. Last year's results were 78 cents per share on net income of $40.7 million.

"ALLETE is making significant progress on strategic initiatives, which will result in future earnings growth, driven by improved returns at our businesses and from our ongoing transformation to cleaner energy," said ALLETE Chair, President and CEO Bethany Owen. "We are excited about the future as all of our ALLETE businesses execute ALLETE's sustainability in action strategy, including Minnesota Power's vision to provide carbon-free energy by 2050 and ALLETE Clean Energy's strategy to expand beyond wind, enabling its customers to achieve their sustainability goals."

ALLETE's Regulated Operations segment, which includes Minnesota Power, Superior Water, Light and Power and the Company's investment in the American Transmission Co., recorded net income of $32.9 million, compared to $42.4 million in the third quarter of 2020. Third quarter 2021 earnings reflect lower net income at Minnesota Power primarily due to increased operating and maintenance expense, higher property taxes and negative timing impacts related to the recording of income tax expense compared to 2020, which vary quarter to quarter based on an estimated annual effective tax rate and are expected to reverse during the fourth quarter. Results from 2021 also reflect higher kilowatt-hour sales to residential, commercial and municipal customers, and higher industrial customer margins, partially offset by lower revenue from the idled Verso paper facility.

ALLETE Clean Energy recorded a third quarter 2021 net loss of $800,000 compared to net income of $1.1 million in 2020. Net income in 2021 reflects lower wind resources and availability.

Corporate and Other, which includes BNI Energy and ALLETE Properties, recorded a third quarter net loss of $4.5 million in 2021 compared to a net loss of $2.8 million in 2020. The increased net loss is primarily due to higher expenses.

"Our consolidated financial results are as expected for the quarter," said ALLETE Senior Vice President and Chief Financial Officer Bob Adams. "ALLETE's 2021 full year results are anticipated to be in the range of $3.00 to $3.30 per share, on a consolidated basis, transitioning to increased earnings in 2022 and beyond."

Live Webcast on November 4, 2021; conference call slides posted on company website

ALLETE's earnings conference call will be at 10:00 a.m. (EST), November 4, 2021, at which time management will discuss the third quarter of 2021 financial results. Interested parties may listen live by calling 877-303-5852, pass code 8090438, ten minutes prior to the start time, or may listen to the live audio-only webcast and view supporting 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 November 11, 2021 by calling (855) 859-2056, pass code 8090438. 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., 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 include presentations of earnings (loss) per share. 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, such as the charge for the recent Minnesota Power rate case resolution. Management believes that the presentation of 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. See page 4 in this release for a reconciliation of 2020 annual GAAP earnings guidance range to 2020 annual adjusted earnings guidance range (Non-GAAP).

ALLETE, Inc.

Consolidated Statement of Income

Millions Except Per Share Amounts - Unaudited

Quarter Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Operating Revenue

Contracts with Customers - Utility $304.8 $255.1 $888.2 $721.2

Contracts with Customers - Non-utility 37.7 35.9 123.4 119.0

Other - Non-utility 2.9 2.9 8.6 8.5

Total Operating Revenue 345.4 293.9 1,020.2 848.7

Operating Expenses

Fuel, Purchased Power and Gas - Utility 140.1 93.4 389.4 251.7

Transmission Services - Utility 19.2 14.9 56.1 49.8

Cost of Sales - Non-utility 15.2 15.4 47.8 48.6

Operating and Maintenance 66.7 61.9 200.1 181.9

Depreciation and Amortization 57.5 53.4 173.4 161.3

Taxes Other than Income Taxes 15.6 13.3 52.1 40.9

Total Operating Expenses 314.3 252.3 918.9 734.2

Operating Income 31.1 41.6 101.3 114.5

Other Income (Expense)

Interest Expense (17.3) (16.3) (51.8) (47.9)

Equity Earnings 4.4 5.1 14.3 16.7

Other 1.0 2.9 6.1 9.1

Total Other Expense (11.9) (8.3) (31.4) (22.1)

Income Before Income Taxes 19.2 33.3 69.9 92.4

Income Tax Benefit (4.9) (5.5) (19.3) (27.8)

Net Income 24.1 38.8 89.2 120.2

Net Loss Attributable to Non-Controlling (3.5) (1.9) (18.1) (6.9) Interest

Net Income Attributable to ALLETE $27.6 $40.7 $107.3 $127.1

Average Shares of Common Stock

Basic 52.4 51.9 52.3 51.8

Diluted 52.5 52.0 52.3 51.9

Basic Earnings Per Share of Common Stock $0.53 $0.78 $2.05 $2.45

Diluted Earnings Per Share of Common $0.53 $0.78 $2.05 $2.45 Stock

Dividends Per Share of Common Stock $0.63 $0.6175 $1.89 $1.8525

Consolidated Balance Sheet

Millions - Unaudited

Sep. 30

Dec. 31,

Sep. 30

Dec. 31,

2021

2020

2021

2020

Assets

Liabilities and Equity

Cash and Cash Equivalents

$59.0

$44.3

Current Liabilities

$646.0

$459.6

Other Current Assets

219.7

210.6

Long-Term Debt

1,649.4

1,593.2

Property, Plant and Equipment - Net

5,053.1

4,840.8

Deferred Income Taxes

187.1

195.7

Regulatory Assets

502.9

480.9

Regulatory Liabilities

509.5

524.8

Equity Investments

317.8

301.2

Defined Benefit Pension and Other

Postretirement Benefit Plans

207.6

225.8

Other Non-Current Assets

179.7

206.8

Other Non-Current Liabilities

278.1

285.3

Equity

2,854.5

2,800.2

Total Assets

$6,332.2

$6,084.6

Total Liabilities and Equity

$6,332.2

$6,084.6

Consolidated Balance Sheet

Millions - Unaudited

Sep. 30 Dec. 31, Sep. 30 Dec. 31,

2021 2020 2021 2020

Assets Liabilities and Equity

Cash and Cash $59.0 $44.3 Current Liabilities $646.0 $459.6Equivalents

Other Current Assets 219.7 210.6 Long-Term Debt 1,649.4 1,593.2

Property, Plant and 5,053.1 4,840.8 Deferred Income 187.1 195.7Equipment - Net Taxes

Regulatory Assets 502.9 480.9 Regulatory 509.5 524.8 Liabilities

Defined Benefit Pension and OtherEquity Investments 317.8 301.2 207.6 225.8 Postretirement Benefit Plans

Other Non-Current 179.7 206.8 Other Non-Current 278.1 285.3Assets Liabilities

Equity 2,854.5 2,800.2

Total Assets $6,332.2 $6,084.6 Total Liabilities $6,332.2 $6,084.6 and Equity

Quarter Ended

Nine Months Ended

ALLETE, Inc.

September 30,

September 30,

Income (Loss)

2021

2020

2021

2020

Millions

Regulated Operations

$32.9

$42.4

$99.4

$111.0

ALLETE Clean Energy

(0.8)

1.1

11.7

16.8

Corporate and Other

(4.5)

(2.8)

(3.8)

(0.7)

Net Income Attributable to ALLETE

$27.6

$40.7

$107.3

$127.1

Diluted Earnings Per Share

$0.53

$0.78

$2.05

$2.45

Quarter Ended Nine Months Ended

ALLETE, Inc. September 30, September 30,

Income (Loss) 2021 2020 2021 2020

Millions

Regulated Operations $32.9 $42.4 $99.4 $111.0

ALLETE Clean Energy (0.8) 1.1 11.7 16.8

Corporate and Other (4.5) (2.8) (3.8) (0.7)

Net Income Attributable to ALLETE $27.6 $40.7 $107.3 $127.1

Diluted Earnings Per Share $0.53 $0.78 $2.05 $2.45

Statistical DataCorporate

Common Stock

High

$73.10

$61.32

$73.10

$84.71

Low

$58.89

$49.91

$58.89

$48.22

Close

$59.52

$51.74

$59.52

$51.74

Book Value

$44.51

$43.89

$44.51

$43.89

Statistical Data

Corporate

Common Stock

High $73.10 $61.32 $73.10 $84.71

Low $58.89 $49.91 $58.89 $48.22

Close $59.52 $51.74 $59.52 $51.74

Book Value $44.51 $43.89 $44.51 $43.89

Kilowatt-hours Sold

Millions

Regulated Utility

Retail and Municipal

Residential

268

268

846

835

Commercial

360

345

1,018

983

Industrial

1,778

1,410

5,351

4,547

Municipal

147

147

445

434

Total Retail and Municipal

2,553

2,170

7,660

6,799

Other Power Suppliers

1,253

967

3,695

2,495

Total Regulated Utility Kilowatt-hours Sold

3,806

3,137

11,355

9,294

Kilowatt-hours Sold

Millions

Regulated Utility

Retail and Municipal

Residential 268 268 846 835

Commercial 360 345 1,018 983

Industrial 1,778 1,410 5,351 4,547

Municipal 147 147 445 434

Total Retail and Municipal 2,553 2,170 7,660 6,799

Other Power Suppliers 1,253 967 3,695 2,495

Total Regulated Utility Kilowatt-hours Sold 3,806 3,137 11,355 9,294

Regulated Utility Revenue

Millions

Regulated Utility Revenue

Retail and Municipal Electric Revenue

Residential

$34.8

$32.2

$107.3

$93.3

Commercial

43.2

36.5

119.6

99.5

Industrial

139.2

109.3

405.7

315.0

Municipal

14.4

11.2

38.5

30.5

Total Retail and Municipal Electric Revenue

231.6

189.2

671.1

538.3

Other Power Suppliers

41.2

30.9

116.9

96.6

Other (Includes Water and Gas Revenue)

32.0

35.0

100.2

86.3

Total Regulated Utility Revenue

$304.8

$255.1

$888.2

$721.2

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CONTACT: Investor Contact: Vince Meyer 218-723-3952 vmeyer@allete.com