EXHIBIT 99
ALLETE Second Quarter 2007 Form 10-Q
[ALLETE LOGO] For Release: July 27, 2007
CONTACT: Eric Olson
218-723-3947
eolson@allete.com
INVESTOR Tim Thorp
CONTACT: 218-723-3953
tthorp@allete.com
NEWS
TWO REAL ESTATE SALES BOOST ALLETE'S SECOND QUARTER EPS TO 80 CENTS
COMPARED TO 47 CENTS IN SECOND QUARTER OF 2006
FIRST CLOSING OF SAWMILL CREEK SALE INCLUDED IN QUARTERLY RESULTS
ALLETE, Inc. (NYSE: ALE) today reported second quarter 2007 earnings per share
of 80 cents compared to 47 cents per share in the second quarter a year ago.
Net income in the second quarter of 2007 was $22.6 million on operating revenue
of $223.3 million, compared to net income of $13.2 million on operating revenue
of $178.3 million in the second quarter of 2006.
ALLETE's Real Estate segment recorded net income of $11.5 million during the
second quarter compared to $5.6 million in the corresponding period a year ago.
ALLETE Properties closed a $12.6 million sale of property for a Super Target and
associated retail stores at its Town Center at Palm Coast development. At its
Palm Coast Park development, ALLETE Properties closed a $13.1 million sale to a
subsidiary of Lowe Enterprises, which represents the first phase of Lowe's
Sawmill Creek project.
"We're particularly pleased to report the first closing of the sale to Lowe,"
said Don Shippar, ALLETE's Chairman, President and Chief Executive Officer. "The
Sawmill Creek development will enhance the value of the surrounding property we
are marketing in Palm Coast Park."
ALLETE's Regulated Utility net income was down from $6.8 million in the second
quarter of 2006 to $6.1 million in 2007, primarily due to higher operations and
maintenance costs related to outage schedules at the Boswell and Taconite Harbor
Energy Centers. Total kilowatthour sales were about the same as a year ago.
Net income from ALLETE's investment in ATC, which commenced in May of 2006, grew
to $1.9 million during the second quarter of 2007, compared to $54,000 in the
second quarter a year ago. As of June 30, 2007, ALLETE had an investment balance
of $64.4 million in ATC.
ALLETE's Other segment recorded net income of $2.5 million in the second quarter
of 2007, compared to $321,000 in the second quarter of 2006. The increase was
primarily due to a $1.5 million after-tax resolution of a tax audit, and release
of a $1 million loan guarantee for the now-vacant Northwest Airlines maintenance
base in Duluth.
ALLETE anticipates its earnings will be between $3.00 and $3.05 per share in
2007. This guidance assumes lower real estate sales during the second half of
2007 compared to 2006, normal weather patterns in Minnesota Power's service
territory compared to a warmer than normal third quarter in 2006, and higher
income from the investment in ATC due to a larger investment balance in 2007.
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.
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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ALLETE NEWS RELEASE July 27, 2007 PAGE 2 of 3
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ALLETE, INC.
CONSOLIDATED STATEMENT OF INCOME
FOR THE PERIODS ENDED JUNE 30, 2007 AND 2006
Millions Except Per Share Amounts
QUARTER ENDED YEAR TO DATE
2007 2006 2007 2006
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OPERATING REVENUE $223.3 $178.3 $428.6 $370.8
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OPERATING EXPENSES
Fuel and Purchased Power 92.9 63.0 170.6 132.4
Operating and Maintenance 84.6 76.8 159.2 151.3
Depreciation 11.9 12.2 23.6 24.4
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Total Operating Expenses 189.4 152.0 353.4 308.1
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OPERATING INCOME FROM CONTINUING OPERATIONS 33.9 26.3 75.2 62.7
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OTHER INCOME (EXPENSE)
Interest Expense (6.1) (6.4) (12.4) (12.8)
Other 7.3 3.4 14.8 5.1
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Total Other Income (Expense) 1.2 (3.0) 2.4 (7.7)
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INCOME FROM CONTINUING OPERATIONS
BEFORE MINORITY INTEREST AND INCOME TAXES 35.1 23.3 77.6 55.0
MINORITY INTEREST 1.3 0.8 1.4 2.1
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INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 33.8 22.5 76.2 52.9
INCOME TAX EXPENSE 11.2 8.9 27.3 20.5
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INCOME FROM CONTINUING OPERATIONS 22.6 13.6 48.9 32.4
INCOME FROM DISCONTINUED OPERATIONS - NET OF TAX - (0.4) - (0.4)
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NET INCOME $ 22.6 $ 13.2 $ 48.9 $ 32.0
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AVERAGE SHARES OF COMMON STOCK
Basic 28.2 27.7 28.1 27.6
Diluted 28.3 27.9 28.2 27.8
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BASIC EARNINGS PER SHARE OF COMMON STOCK
Continuing Operations $0.80 $0.50 $1.74 $1.18
Discontinued Operations - (0.02) - (0.02)
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$0.80 $0.48 $1.74 $1.16
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DILUTED EARNINGS PER SHARE OF COMMON STOCK
Continuing Operations $0.80 $0.49 $1.73 $1.17
Discontinued Operations - (0.02) - (0.02)
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$0.80 $0.47 $1.73 $1.15
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DIVIDENDS PER SHARE OF COMMON STOCK $0.4100 $0.3625 $0.8200 $0.7250
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CONSOLIDATED BALANCE SHEET
Millions
JUN. 30, DEC. 31,
2007 2006
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ASSETS
Cash and Short-Term Investments $ 158.9 $ 149.3
Other Current Assets 148.1 138.4
Property, Plant and Equipment 977.2 921.6
Investments 207.8 189.1
Other 137.7 135.0
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TOTAL ASSETS $1,629.7 $1,533.4
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities $ 130.5 $ 143.5
Long-Term Debt 409.2 359.8
Other Liabilities 376.7 364.3
Shareholders' Equity 713.3 665.8
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,629.7 $1,533.4
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ALLETE NEWS RELEASE July 27, 2007 PAGE 3 of 3
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QUARTER ENDED YEAR TO DATE
JUNE 30, JUNE 30,
ALLETE, INC. 2007 2006 2007 2006
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INCOME (LOSS)
Millions
Regulated Utility $ 6.1 $ 6.8 $24.9 $19.8
Nonregulated Energy Operations 0.6 0.9 2.8 1.8
ATC 1.9 - 3.7 -
Real Estate 11.5 5.6 14.6 10.6
Other 2.5 0.3 2.9 0.2
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Income from Continuing Operations 22.6 13.6 48.9 32.4
Loss from Discontinued Operations - (0.4) - (0.4)
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Net Income $ 22.6 $13.2 $48.9 $32.0
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DILUTED EARNINGS PER SHARE
Continuing Operations $ 0.80 $ 0.49 $1.73 $1.17
Discontinued Operations - (0.02) - (0.02)
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$ 0.80 $ 0.47 $1.73 $1.15
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STATISTICAL DATA
CORPORATE
Common Stock
High $51.30 $48.55 $51.30 $48.55
Low $45.39 $44.34 $44.93 $42.99
Close $47.05 $47.35 $47.05 $47.35
Book Value $23.23 $20.70 $23.23 $20.70
KILOWATTHOURS SOLD
Millions
Regulated Utility
Retail and Municipals
Residential 231.7 229.1 573.3 537.1
Commercial 320.9 315.5 673.1 644.2
Municipals 229.2 216.1 495.6 435.4
Industrial 1,734.0 1,769.9 3,439.4 3,592.2
Other 19.0 18.6 41.3 38.6
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Total Retail and Municipal 2,534.8 2,549.2 5,222.7 5,247.5
Other Power Suppliers 513.0 515.5 1,036.9 1,020.6
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Total Regulated Utility 3,047.8 3,064.7 6,259.6 6,268.1
Nonregulated Energy Operations 59.8 55.3 123.5 120.9
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Total Kilowatthours Sold 3,107.6 3,120.0 6,383.1 6,389.0
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REAL ESTATE
Town Center Development Project
Commercial Square Footage Sold 435,000 170,695 435,000 250,695
Residential Units 130 186 130 186
Palm Coast Park Development Project
Commercial Square Footage Sold 40,000 - 40,000 -
Residential Units 406 - 406 -
Other Land
Acres Sold - 10 367 466
Lots Sold - - - -
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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.]