Allete Inc. (ALE, Financial) filed Quarterly Report for the period ended 2011-03-31.
Allete Inc. has a market cap of $1.47 billion; its shares were traded at around $40.85 with a P/E ratio of 18.7 and P/S ratio of 1.6. The dividend yield of Allete Inc. stocks is 4.5%.
Regulated Operations net income attributable to ALLETE was $38.4 million for the first quarter of 2011, compared to $24.9 million for the same period of 2010. The first quarter of 2011 included the reversal of a $6.2 million deferred tax liability related to a revenue receivable Minnesota Power agreed to forgo as part of a stipulation and settlement agreement in its 2010 rate case. Net income for the first quarter of 2010 was reduced by a $3.6 million income tax charge resulting from PPACA. The remaining increase over 2010 is attributable to an increase in MWh sales and current cost recovery rider revenue, partially offset by lower power marketing margins and higher expenses.
Investments and Other reflected a net loss attributable to ALLETE of $1.2 million in the first quarter of 2011, compared to a net loss of $1.9 million in 2010. Contributing to the decreased losses were lower losses at ALLETE Properties due to a reduction in operating expenses. Income tax expense in 2010 also included a $0.4 million charge resulting from PPACA.
Income tax expense decreased $11.1 million, or 54 percent, from 2010 primarily due the reversal of a $6.2 million deferred tax liability related to a revenue receivable Minnesota Power agreed to forgo as part of a stipulation and settlement agreement in its 2010 rate case. Also contributing to the decrease were additional renewable tax credits in 2011, as well as a non-recurring income tax charge of $3.6 million resulting from PPACA in the first quarter of 2010.
Under the terms of a stipulation and settlement agreement approved by the MPUC as part of this rate case, Minnesota Power agreed to forgo collection of $20.5 million in revenue receivable that it was entitled to under a prior rider for the Boswell Unit 3 environmental retrofit. The agreement required the Company to capitalize, as part of rate base, the $20.5 million to property, plant and equipment representing AFUDC. In conjunction with the settlement agreement, and upon receipt of the final rate order in February 2011, the Company reversed a $6.2 million deferred tax liability related to the revenue receivable Minnesota Power agreed to forgo. The $20.5 million revenue receivable was previously included in Regulatory Assets on the Company s consolidated balance sheet.
Investment in ATC. As of March 31, 2011, our equity investment in ATC was $94.8 million, representing an approximate 8 percent ownership interest. ATC rates are based on a FERC approved 12.2 percent return on common equity dedicated to utility plant. ATC has identified $3.4 billion in future projects needed over the next 10 years to improve the adequacy and reliability of the electric transmission system as well as to meet regional needs based on economic benefits and public policy initiatives for renewable energy. This investment is expected to be funded through a combination of internally generated cash, debt, and investor contributions. As additional opportunities arise, we plan to make additional investments in ATC through general capital calls based upon our pro-rata ownership interest in ATC. In the first quarter of 2011, we invested $0.8 million in ATC and on April 29, 2011, we invested an additional $0.6 million. We expect to invest an additional $0.6 million in 2011 in ATC. (See Note 6. Investment in ATC.)
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Allete Inc. has a market cap of $1.47 billion; its shares were traded at around $40.85 with a P/E ratio of 18.7 and P/S ratio of 1.6. The dividend yield of Allete Inc. stocks is 4.5%.
Highlight of Business Operations:
Net income attributable to ALLETE for the quarter ended March 31, 2011, was $37.2 million, or $1.07 per diluted share, compared to $23.0 million, or $0.68 per diluted share, for the same period of 2010. The first quarter of 2011 included the reversal of a $6.2 million, or $0.18 per share, deferred tax liability related to a revenue receivable Minnesota Power agreed to forgo as part of a stipulation and settlement agreement in its 2010 rate case (See Note 5. Regulatory Matters). Net income for the first quarter of 2010 was reduced by a $4.0 million, or $0.12 per share, income tax charge resulting from PPACA. The remaining increase over 2010 is attributable to an increase in MWh sales and current cost recovery rider revenue, partially offset by lower power marketing margins and higher expenses.Regulated Operations net income attributable to ALLETE was $38.4 million for the first quarter of 2011, compared to $24.9 million for the same period of 2010. The first quarter of 2011 included the reversal of a $6.2 million deferred tax liability related to a revenue receivable Minnesota Power agreed to forgo as part of a stipulation and settlement agreement in its 2010 rate case. Net income for the first quarter of 2010 was reduced by a $3.6 million income tax charge resulting from PPACA. The remaining increase over 2010 is attributable to an increase in MWh sales and current cost recovery rider revenue, partially offset by lower power marketing margins and higher expenses.
Investments and Other reflected a net loss attributable to ALLETE of $1.2 million in the first quarter of 2011, compared to a net loss of $1.9 million in 2010. Contributing to the decreased losses were lower losses at ALLETE Properties due to a reduction in operating expenses. Income tax expense in 2010 also included a $0.4 million charge resulting from PPACA.
Income tax expense decreased $11.1 million, or 54 percent, from 2010 primarily due the reversal of a $6.2 million deferred tax liability related to a revenue receivable Minnesota Power agreed to forgo as part of a stipulation and settlement agreement in its 2010 rate case. Also contributing to the decrease were additional renewable tax credits in 2011, as well as a non-recurring income tax charge of $3.6 million resulting from PPACA in the first quarter of 2010.
Under the terms of a stipulation and settlement agreement approved by the MPUC as part of this rate case, Minnesota Power agreed to forgo collection of $20.5 million in revenue receivable that it was entitled to under a prior rider for the Boswell Unit 3 environmental retrofit. The agreement required the Company to capitalize, as part of rate base, the $20.5 million to property, plant and equipment representing AFUDC. In conjunction with the settlement agreement, and upon receipt of the final rate order in February 2011, the Company reversed a $6.2 million deferred tax liability related to the revenue receivable Minnesota Power agreed to forgo. The $20.5 million revenue receivable was previously included in Regulatory Assets on the Company s consolidated balance sheet.
Investment in ATC. As of March 31, 2011, our equity investment in ATC was $94.8 million, representing an approximate 8 percent ownership interest. ATC rates are based on a FERC approved 12.2 percent return on common equity dedicated to utility plant. ATC has identified $3.4 billion in future projects needed over the next 10 years to improve the adequacy and reliability of the electric transmission system as well as to meet regional needs based on economic benefits and public policy initiatives for renewable energy. This investment is expected to be funded through a combination of internally generated cash, debt, and investor contributions. As additional opportunities arise, we plan to make additional investments in ATC through general capital calls based upon our pro-rata ownership interest in ATC. In the first quarter of 2011, we invested $0.8 million in ATC and on April 29, 2011, we invested an additional $0.6 million. We expect to invest an additional $0.6 million in 2011 in ATC. (See Note 6. Investment in ATC.)
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