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
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(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
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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
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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
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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
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Total Operating Revenue 361.6 323.9 1,527.7 1,189.5
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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
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Total Operating Expenses 324.3 295.9 1,319.9 1,018.4
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OPERATING INCOME BEFORE ACE 37.3 28.0 207.8 171.1
INCOME FROM DISPOSITION OF INVESTMENT IN ACE - - - 48.0
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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
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INCOME FROM CONTINUING OPERATIONS 24.7 16.7 128.6 136.9
INCOME FROM DISCONTINUED OPERATIONS 0.8 2.3 10.1 11.7
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NET INCOME $ 25.5 $ 19.0 $ 138.7 $ 148.6
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AVERAGE SHARES OF COMMON STOCK
Basic 79.6 70.3 75.8 69.8
Diluted 80.4 70.6 76.5 70.1
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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
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$0.31 $0.27 $1.83 $2.12
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Diluted - Continuing Operations $0.30 $0.24 $1.68 $1.94
Discontinued Operations 0.01 0.03 0.13 0.17
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$0.31 $0.27 $1.81 $2.11
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DIVIDENDS PER SHARE OF COMMON STOCK $0.2675 $0.2675 $1.07 $1.07
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ALLETE, INC.
CONSOLIDATED BALANCE SHEET
FOR THE PERIODS ENDED DECEMBER 31, 2001 AND 2000
Millions
2001 2000
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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
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TOTAL ASSETS $3,282.5 $2,914.0
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2001 2000
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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
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,282.5 $2,914.0
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ALLETE NEWS RELEASE PAGE 4
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QUARTER ENDED YEAR TO DATE
DECEMBER 31, DECEMBER 31,
ALLETE, INC. 2001 2000 2001 2000
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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
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Net Income Before ACE 24.7 16.7 128.6 106.5
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ACE Transaction<F1> - - - 30.4
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Income from Continuing Operations 24.7 16.7 128.6 136.9
Income from Discontinued Operations<F2> 0.8 2.3 10.1 11.7
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Net Income $25.5 $19.0 $138.7 $148.6
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DILUTED EARNINGS PER SHARE
Continuing Operations
Before ACE Transaction $0.30 $0.24 $1.68 $1.50
ACE Transaction<F1> - - - 0.44
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0.30 0.24 1.68 $1.94
Discontinued Operations<F2> 0.01 0.03 0.13 0.17
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$0.31 $0.27 $1.81 $2.11
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<FN>
<F1> 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.
<F2> 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.
</FN>
QUARTER ENDED YEAR TO DATE
DECEMBER 31, DECEMBER 31,
STATISTICAL DATA 2001 2000 2001 2000
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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
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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
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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) <F1> $47.7 $36.3 $221.2 $151.8
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<FN>
<F1> Earnings Before Interest, Taxes, Depreciation, Amortization and Lease Expense
</FN>