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Allete Inc. Reports Operating Results (10-Q)

October 31, 2012 | About:
10qk

10qk

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Allete Inc. (ALE) filed Quarterly Report for the period ended 2012-09-30.

Allete, Inc. has a market cap of $1.58 billion; its shares were traded at around $41.38 with a P/E ratio of 19.3 and P/S ratio of 1.7. The dividend yield of Allete, Inc. stocks is 4.5%. Allete, Inc. had an annual average earning growth of 0.5% over the past 5 years.
This is the annual revenues and earnings per share of ALE over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of ALE.


Highlight of Business Operations:

Net income attributable to ALLETE for the nine months ended September 30, 2012, was $68.2 million, or $1.83 per diluted share, compared to $74.7 million, or $2.12 per diluted share, for the same period of 2011. Net income for 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. Net income for 2011 also included the recognition of a $2.9 million, or $0.08 per share, income tax benefit related to the MPUC approval of our request to defer the retail portion of the tax charge taken in 2010 resulting from the PPACA. Net income for 2012 reflected higher cost recovery rider revenue and renewable tax credits, which were partially offset by increased operating and maintenance expense, higher depreciation and interest expense and higher costs under our Square Butte PPA. Earnings per share dilution was $0.11 as a result of additional shares of common stock outstanding as of September 30, 2012.

Regulated Operations net income attributable to ALLETE was $68.1 million for the first nine months of 2012, compared to $80.5 million for the same period of 2011. Net income for 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 2011 also included the recognition of a $2.9 million income tax benefit related to the MPUC approval of our request to defer the retail portion of the tax charge taken in 2010 resulting from the PPACA. The remaining decrease resulted from increased operating and maintenance expense, higher depreciation and interest expense and higher costs under our Square Butte PPA, partially offset by higher cost recovery rider revenue and renewable tax credits.

Revenue decreased $2.9 million due to a 0.8 percent reduction in kilowatt-hour sales. The decrease in kilowatt-hour sales was primarily due to lower sales to residential customers and other power suppliers. Residential sales, as compared to 2011, were down primarily due to unseasonably warm weather during the first four months of 2012; heating degree days in Duluth, Minnesota were approximately 22 percent lower than the first four months of 2011. These decreases were partially offset by strong sales to our industrial customers, which increased 2.8 percent over the last year.

Operating and Maintenance Expense increased $11.8 million, or 5 percent, from 2011 due to increased salary, benefit, and transmission expenses, partially offset by lower purchased gas costs. Benefit expenses increased primarily due to higher pension expense resulting from lower discount rates. Transmission expense increased primarily due to higher MISO RECB expenses. Purchased gas costs at SWL&P decreased due to a reduction in gas sales due to unseasonably warm weather during the first four months of 2012; purchased gas costs are recovered from customers through a purchased gas adjustment clause. (See Operating Revenue.)

For the nine months ended September 30, 2012, Other Revenue includes wetland mitigation bank credit sales of $1.1 million. For the nine months ended September 30, 2011, Other Revenue includes a $0.4 million forfeited deposit due to the transfer of property back to ALLETE Properties by deed-in-lieu of foreclosure, in satisfaction of amounts previously owed under long-term financing receivables.

Read the The complete Report

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