EXHIBIT 99
[ALLETE LOGO]
For Release: July 28, 2006
CONTACT: Eric Olson
218-723-3947
eolson@allete.com
INVESTOR Tim Thorp
CONTACT: 218-723-3953
tthorp@allete.com
NEWS
ALLETE REPORTS SECOND QUARTER 2006 EARNINGS
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EARNINGS PER SHARE FROM CONTINUING OPERATIONS INCREASE 29%,
EXCLUDING ONE-TIME 2005 CHARGE
ALLETE (NYSE: ALE) today reported second quarter 2006 earnings from continuing
operations of $0.49 per diluted share compared to a loss of $1.46 in the second
quarter of 2005. The results a year ago were impacted by a $1.84 per share
charge related to the assignment of a Kendall County, Ill. power purchase
agreement. Excluding that one-time charge, ALLETE's second quarter earnings per
share from continuing operations are 29 percent higher in 2006 than in 2005.
"Halfway though the year, ALLETE's earnings are where we expected them to be,"
said CEO Don Shippar. "We anticipate our 2006 earnings per share from continuing
operations, as we projected earlier, will increase 15 percent to 20 percent over
2005."
During the quarter, income from ALLETE's real estate segment was driven by
contract closings at the Town Center at Palm Coast development in northeast
Florida. ALLETE Properties net income doubled from $2.8 million in 2005 to $5.6
million in 2006. As of June 30, 2006, ALLETE had a total of $128.9 million of
land sales under contract, up from $85.3 million at the end of March 2006. Those
contracts are expected to close over the next several years.
Earnings from ALLETE's energy businesses were $7.7 million in the second quarter
of 2006, the same as the comparable period a year ago, excluding the one-time
Kendall charge. Plant maintenance at Minnesota Power generating facilities
resulted in $1.1 million of additional after-tax operating and maintenance
expense during the quarter compared to 2005.
In late May, ALLETE made its initial investment in the American Transmission
Company and as of June 30, had invested a total of $11.5 million. Shippar said
the income contribution from ATC will accelerate as ALLETE continues to make
additional investments during the year. He noted that the company intends to
invest an additional $48.5 million in ATC by year-end, giving ALLETE an
ownership interest of approximately nine percent.
ALLETE's corporate headquarters are located in Duluth, Minnesota. ALLETE
provides energy services in the upper Midwest and has significant real estate
holdings in Florida. More information about the company is available on ALLETE's
Web site at www.allete.com.
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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.
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[recycle logo] RECYCLED PAPER
ALLETE - 30 WEST SUPERIOR STREET, DULUTH, MINNESOTA 55802
WWW.ALLETE.COM
ALLETE NEWS RELEASE PAGE 2
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ALLETE, INC.
CONSOLIDATED STATEMENT OF INCOME
FOR THE PERIODS ENDED JUNE 30, 2006 AND 2005
Millions Except Per Share Amounts
QUARTER ENDED YEAR TO DATE
2006 2005 2006 2005
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OPERATING REVENUE $178.3 $174.4 $370.8 $367.7
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OPERATING EXPENSES
Fuel and Purchased Power 63.0 68.9 132.4 136.5
Operating and Maintenance 76.8 71.7 151.3 144.4
Kendall County Charge - 77.9 - 77.9
Depreciation 12.2 11.9 24.4 23.8
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Total Operating Expenses 152.0 230.4 308.1 382.6
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OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS 26.3 (56.0) 62.7 (14.9)
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OTHER INCOME (EXPENSE)
Interest Expense (6.4) (6.7) (12.8) (13.5)
Other 3.4 1.5 5.1 (2.7)
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Total Other Expense (3.0) (5.2) (7.7) (16.2)
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INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE MINORITY INTEREST AND INCOME TAXES 23.3 (61.2) 55.0 (31.1)
MINORITY INTEREST 0.8 0.2 2.1 1.4
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INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 22.5 (61.4) 52.9 (32.5)
INCOME TAX EXPENSE (BENEFIT) 8.9 (21.6) 20.5 (10.1)
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INCOME (LOSS) FROM CONTINUING OPERATIONS 13.6 (39.8) 32.4 (22.4)
LOSS FROM DISCONTINUED OPERATIONS - NET OF TAX (0.4) (0.5) (0.4) (0.5)
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NET INCOME (LOSS) $ 13.2 $ (40.3) $ 32.0 $(22.9)
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AVERAGE SHARES OF COMMON STOCK
Basic 27.7 27.2 27.6 27.2
Diluted 27.9 27.2 27.8 27.2
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BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing Operations $0.50 $(1.46) $1.18 $(0.82)
Discontinued Operations (0.02) (0.02) (0.02) (0.02)
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$0.48 $(1.48) $1.16 $(0.84)
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DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing Operations $0.49 $(1.46) $1.17 $(0.82)
Discontinued Operations (0.02) (0.02) (0.02) (0.02)
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$0.47 $(1.48) $1.15 $(0.84)
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DIVIDENDS PER SHARE OF COMMON STOCK $0.3625 $0.3150 $0.7250 $0.6150
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CONSOLIDATED BALANCE SHEET
Millions
JUN. 30, DEC. 31,
2006 2005
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ASSETS
Cash and Cash Equivalents $ 62.8 $ 89.6
Short-Term Investments 120.4 116.9
Other Current Assets 157.8 167.0
Property, Plant and Equipment 871.6 860.4
Investments 127.8 117.7
Discontinued Operations - 2.6
Other 45.7 44.6
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TOTAL ASSETS $1,386.1 $1,398.8
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities $ 79.5 $ 104.0
Current Maturities 61.6 2.7
Long-Term Debt 326.9 387.8
Other Liabilities 290.3 288.5
Discontinued Operations - 13.0
Shareholders' Equity 627.8 602.8
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,386.1 $1,398.8
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ALLETE NEWS RELEASE PAGE 3
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QUARTER ENDED YEAR TO DATE
JUNE 30, JUNE 30,
ALLETE, INC. 2006 2005 2006 2005
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INCOME (LOSS)
Millions
Regulated Utility <F1> $ 6.8 $ 7.8 $19.8 $ 20.7
Nonregulated Energy Operations <F1> <F2> 0.9 (50.5) 1.8 (48.9)
Real Estate 5.6 2.8 10.6 9.7
Other 0.3 0.1 0.2 (3.9)
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Income (Loss) from Continuing Operations 13.6 (39.8) 32.4 (22.4)
Loss from Discontinued Operations (0.4) (0.5) (0.4) (0.5)
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Net Income (Loss) $13.2 $(40.3) $32.0 $(22.9)
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DILUTED EARNINGS (LOSS) PER SHARE
Continuing Operations $0.49 $(1.46) $1.17 $(0.82)
Discontinued Operations (0.02) (0.02) (0.02) (0.02)
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$0.47 $(1.48) $1.15 $(0.84)
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<FN>
<F1> In 2006, financial results for ALLETE's Taconite Harbor Energy Center are included in the Regulated Utility segment. In
2005, Taconite Harbor is included in the Nonregulated Energy Operations segment.
<F2> In April 2005, ALLETE recorded a $50.4 million, or $1.84 per diluted share, charge related to the assignment of the Kendall
County power purchase agreement.
</FN>
QUARTER ENDED YEAR TO DATE
JUNE 30, JUNE 30,
2006 2005 2006 2005
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STATISTICAL DATA
CORPORATE
Common Stock
High $48.55 $50.33 $48.55 $50.33
Low $44.34 $40.12 $42.99 $35.65
Close $47.35 $49.90 $47.35 $49.90
Book Value $20.70 $19.22 $20.70 $19.22
KILOWATTHOURS SOLD
Millions
Regulated Utility
Retail and Municipals
Residential 229.1 229.9 537.1 549.7
Commercial 315.5 300.5 644.2 640.3
Industrial 1,769.9 1,746.9 3,592.2 3,524.0
Municipals 216.1 199.3 435.4 421.3
Other 18.6 18.1 38.6 38.5
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2,549.2 2,494.7 5,247.5 5,173.8
Other Power Suppliers 515.5 366.9 1,020.6 603.6
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3,064.7 2,861.6 6,268.1 5,777.4
Nonregulated Energy Operations 55.3 399.9 120.9 753.8
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3,120.0 3,261.5 6,389.0 6,531.2
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REAL ESTATE
Town Center Development Project
Commercial Square Footage Sold 170,695 397,000 250,695 397,000
Residential Units 186 - 186 -
Other Land
Acres Sold 10 54 466 537
Lots Sold - - - 7
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[THIS EXHIBIT HAS BEEN FURNISHED AND SHALL NOT BE DEEMED "FILED" FOR PURPOSES OF
SECTION 18 OF THE SECURITIES EXCHANGE ACT OF 1934, NOR SHALL IT BE DEEMED
INCORPORATED BY REFERENCE IN ANY FILING UNDER THE SECURITIES ACT OF 1933, EXCEPT
AS SHALL BE EXPRESSLY SET FORTH BY SPECIFIC REFERENCE IN SUCH FILING.]