EXHIBIT 99
[ALLETE LOGO]
For Release: October 30, 2006
CONTACT: Eric Olson
218-723-3947
eolson@allete.com
INVESTOR Tim Thorp
CONTACT: 218-723-3953
tthorp@allete.com
NEWS
ALLETE THIRD QUARTER EPS FROM CONTINUING OPERATIONS RISES 34%;
2006 EARNINGS NOW PROJECTED TO BE NEAR THE UPPER END OF GUIDANCE RANGE
ALLETE, Inc. (NYSE: ALE) today reported earnings from continuing operations of
78 cents per share in the third quarter of 2006, a 34 percent increase over the
58 cents per share recorded in the third quarter a year ago. Net income for the
quarter was $21.8 million on revenue of $199.1 million.
Income from ALLETE's energy businesses was up 26 percent from a year ago, driven
by higher industrial power sales to taconite facilities, paper mills and
petroleum pipelines and by additional summer cooling load needed by municipal,
residential, and commercial customers. Returns on ALLETE's investment in the
American Transmission Company also contributed to income. ALLETE had invested
$35.2 million in ATC by the end of the third quarter.
ALLETE Properties income, which was 28 percent higher than in the third quarter
of 2005, continued to benefit from contract closings, recognition of deferred
profit from earlier sales at ALLETE's Town Center at Palm Coast development
project and from other non-project property sales. ALLETE Properties had $114.5
million in land sales under contract as of Sept. 30, 2006.
"We're very pleased with the earnings momentum demonstrated by our two primary
businesses," said Don Shippar, ALLETE's chairman, president and CEO. "We now
expect to be near the upper end of our 2006 earnings guidance range."
ALLETE's 2006 earnings guidance, issued in February, projected earnings per
share growth of 15 to 20 percent compared with 2005. The guidance was based on
diluted earnings from continuing operations in 2005 of $2.26 per share, which
excluded transactions not representative of ongoing operations.
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, 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 SEPTEMBER 30, 2006 AND 2005
Millions Except Per Share Amounts
QUARTER ENDED YEAR TO DATE
2006 2005 2006 2005
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OPERATING REVENUE $199.1 $177.4 $569.9 $545.1
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OPERATING EXPENSES
Fuel and Purchased Power 79.5 65.4 211.9 201.9
Operating and Maintenance 68.7 67.4 220.0 211.8
Kendall County Charge - - - 77.9
Depreciation 12.2 11.9 36.6 35.7
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Total Operating Expenses 160.4 144.7 468.5 527.3
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OPERATING INCOME FROM CONTINUING OPERATIONS 38.7 32.7 101.4 17.8
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OTHER INCOME (EXPENSE)
Interest Expense (7.3) (6.6) (20.1) (20.1)
Other 3.7 0.4 8.8 (2.3)
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Total Other Expense (3.6) (6.2) (11.3) (22.4)
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INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE MINORITY INTEREST AND INCOME TAXES 35.1 26.5 90.1 (4.6)
MINORITY INTEREST 1.1 1.0 3.2 2.4
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INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 34.0 25.5 86.9 (7.0)
INCOME TAX EXPENSE (BENEFIT) 12.1 9.7 32.6 (0.4)
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INCOME (LOSS) FROM CONTINUING OPERATIONS 21.9 15.8 54.3 (6.6)
LOSS FROM DISCONTINUED OPERATIONS - NET OF TAX (0.1) (0.6) (0.5) (1.1)
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NET INCOME (LOSS) $ 21.8 $15.2 $ 53.8 $ (7.7)
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AVERAGE SHARES OF COMMON STOCK
Basic 27.8 27.4 27.7 27.3
Diluted 27.9 27.5 27.8 27.3
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BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing Operations $0.78 $0.58 $1.96 $(0.24)
Discontinued Operations - (0.02) (0.02) (0.04)
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$0.78 $0.56 $1.94 $(0.28)
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DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing Operations $0.78 $0.58 $1.95 $(0.24)
Discontinued Operations - (0.02) (0.02) (0.04)
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$0.78 $0.56 $1.93 $(0.28)
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DIVIDENDS PER SHARE OF COMMON STOCK $0.3625 $0.3150 $1.0875 $0.9300
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CONSOLIDATED BALANCE SHEET
Millions
SEPT. 30, DEC. 31,
2006 2005
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ASSETS
Cash and Cash Equivalents $ 51.4 $ 89.6
Short-Term Investments 121.6 116.9
Other Current Assets 135.5 167.0
Property, Plant and Equipment 877.9 860.4
Investments 165.1 117.7
Discontinued Operations - 2.6
Other 49.4 44.6
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TOTAL ASSETS $1,400.9 $1,398.8
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities $ 82.6 $ 106.7
Long-Term Debt 385.2 387.8
Other Liabilities 287.3 288.5
Discontinued Operations - 13.0
Shareholders' Equity 645.8 602.8
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,400.9 $1,398.8
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ALLETE NEWS RELEASE PAGE 3
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QUARTER ENDED YEAR TO DATE
SEPTEMBER 30, SEPTEMBER 30,
ALLETE, INC. 2006 2005 2006 2005
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INCOME (LOSS)
Millions
Regulated Utility <F1> $13.7 $10.6 $33.5 $31.3
Nonregulated Energy Operations <F1><F2> 1.1 1.6 2.9 (47.3)
ATC 0.6 - 0.6 -
Real Estate 5.1 4.0 15.7 13.7
Other 1.4 (0.4) 1.6 (4.3)
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Income (Loss) from Continuing Operations 21.9 15.8 54.3 (6.6)
Loss from Discontinued Operations (0.1) (0.6) (0.5) (1.1)
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Net Income (Loss) $21.8 $15.2 $53.8 $(7.7)
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DILUTED EARNINGS (LOSS) PER SHARE
Continuing Operations <F2> $0.78 $0.58 $1.95 $(0.24)
Discontinued Operations - (0.02) (0.02) (0.04)
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$0.78 $0.56 $1.93 $(0.28)
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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
SEPTEMBER 30, SEPTEMBER 30,
2006 2005 2006 2005
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STATISTICAL DATA
CORPORATE
Common Stock
High $49.30 $51.70 $49.30 $51.70
Low $43.26 $42.80 $42.99 $35.65
Close $43.45 $45.81 $43.45 $45.81
Book Value $21.26 $19.57 $21.26 $19.57
KILOWATTHOURS SOLD
Millions
Regulated Utility
Retail and Municipals
Residential 263.0 254.5 800.1 804.2
Commercial 361.7 346.6 1,005.9 986.9
Industrial 1,836.9 1,782.8 5,429.1 5,306.8
Municipals 248.6 236.0 684.0 657.3
Other 20.8 20.7 59.4 59.2
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2,731.0 2,640.6 7,978.5 7,814.4
Other Power Suppliers 584.3 261.3 1,604.9 864.9
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3,315.3 2,901.9 9,583.4 8,679.3
Nonregulated Energy Operations 60.4 405.8 181.3 1,159.6
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3,375.7 3,307.7 9,764.7 9,838.9
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REAL ESTATE
Town Center Development Project
Commercial Square Footage Sold 114,300 246,000 364,995 643,000
Residential Units 356 - 542 -
Palm Coast Park Development Project
Residential Units 200 - 200 -
Other Land
Acres Sold 242 521 708 1,058
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.]