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Exhibit 99
For Release: January 18, 2001
Contact: Eric Olson
[ALLETE LOGO] 218-723-3947
[email protected]
Investor contact: Tim Thorp
NEWS 218-723-3953
[email protected]
ALLETE SURPASSES GOAL FOR GROWTH DURING 2000
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ALLETE (NYSE: ALE) today announced 2000 operating net income of $118.2 million,
compared with $104.2 million in 1999 resulting in operating earnings per share
of $1.67 versus $1.49. Reported earnings per share rose to $2.11 from 97 cents
last year, taking into account the now completed transactions relating to the
company's investment in ACE Limited and Capital Re.
"We exceeded the company-wide goals for growth we set for ourselves at the
beginning of 2000," said Ed Russell, ALLETE chief executive officer. "Our
operating earnings per share increased by 12 percent, beating our original
target of 10 percent. We're pleased with our earnings per share growth
performance and our objective is to do as well or better in 2001."
Net income from automotive services rose by $8.6 million for the year, led by
strong volume growth at both Automotive Finance Corporation and ADESA auctions.
AFC saw a 14 percent increase in vehicles financed while the number of vehicles
sold at ADESA auction sites increased by 27 percent in 2000.
Net income grew by $2.5 million in ALLETE's investments segment, reflecting
strong sales at the company's Florida real estate business. Water services
showed gains as well, increasing net income by $.9 million while adding 7
percent to its overall customer base, with water consumption up 12 percent for
the year. Net income from energy services fell $1.9 million in 2000, due largely
to lower wholesale power marketing margins from milder than usual weather
conditions during the summer months.
"It's important to keep in mind that the diversified nature of our company
includes businesses that deal with basic necessities such as cars, electricity,
and water--items that people need and use every day," Russell said. "We believe
that gives ALLETE shareholders a sound long-term investment even when domestic
economic forecasts may not be so strong," Russell added.
-more-
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ALLETE's fourth quarter operating net income for 2000 was $19 million,
compared to $22.8 million in 1999. Investments net income was down $8.7
million for the quarter due to large real estate sales and emerging
technology investment gains that occurred in the fourth quarter of 1999.
Energy services showed gains due to increased retail sales in all customer
classes and stringent cost reductions, while automotive services' net
income for the quarter declined by $2.1 million. A temporary slowdown in
auction sales volume and unusually bad weather, which affected multiple
auction sites in December, resulted in reduced sales during the quarter.
Overall, ALLETE's fourth quarter earnings were 27 cents per share, compared
to 32 cents in 1999.
ALLETE is a multi-services company with corporate headquarters in Duluth,
Minnesota. ALLETE's holdings include the second largest wholesale
automobile auction network in North America; the leading provider of
independent auto dealer inventory financing; the largest private water
utilities in Florida and North Carolina; significant real estate holdings
in Florida; and a low-cost electric utility that serves some of the largest
industrial customers in the United States.
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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<TABLE>
<CAPTION>
ALLETE
Consolidated Statement of Income
For the Periods Ended December 31, 2000 and 1999
Millions Except Per Share Amounts
Quarter Ended Year to Date
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Operating Revenue
Energy Services $ 162.9 $ 132.2 $ 589.5 $ 554.5
Automotive Services 159.8 100.3 546.4 406.6
Water Services 28.7 27.5 118.6 112.9
Investments 7.4 26.9 77.4 57.8
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Total Operating Revenue 358.8 286.9 1,331.9 1,131.8
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Operating Expenses
Fuel and Purchased Power 62.3 45.4 229.0 200.2
Operations 241.9 190.6 842.6 705.9
Interest Expense 22.0 15.8 69.2 59.5
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Total Operating Expenses 326.2 251.8 1,140.8 965.6
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Operating Income Before Capital Re and ACE 32.6 35.1 191.1 166.2
Income (Loss) from Investment in Capital Re and
Related Disposition of ACE - (19.0) 48.0 (34.5)
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Operating Income 32.6 16.1 239.1 131.7
Distributions on Redeemable
Preferred Securities of Subsidiary 1.5 1.5 6.0 6.0
Income Tax Expense 12.1 3.9 84.5 57.7
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Net Income $ 19.0 $ 10.7 $ 148.6 $ 68.0
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Average Shares of Common Stock
Basic 70.3 69.0 69.8 68.4
Diluted 70.6 69.3 70.1 68.7
Earnings Per Share of Common Stock
Basic $0.27 $0.15 $2.12 $0.97
Diluted $0.27 $0.15 $2.11 $0.97
Dividends Per Share of Common Stock $0.2675 $0.2675 $1.07 $1.07
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</TABLE>
<TABLE>
<CAPTION>
ALLETE
Consolidated Balance Sheet
For the Periods Ended December 31, 2000 and 1999
Millions
2000 1999
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<S> <C> <C>
Assets
Current Assets $ 731.0 $ 564.5
Property, Plant and Equipment 1,479.7 1,258.8
Investments 116.4 197.2
Goodwill 472.8 181.0
Other 114.1 111.1
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Total Assets $2,914.0 $2,312.6
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2000 1999
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<S> <C> <C>
Liabilities and Stockholders' Equity
Current Liabilities $ 707.0 $ 398.3
Long-Term Debt 952.3 712.8
Other Liabilities 278.9 289.2
Mandatorily Redeemable Preferred
Securities of ALLETE Capital I 75.0 75.0
Redeemable Serial Preferred Stock - 20.0
Stockholders' Equity 900.8 817.3
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Total Liabilities and Stockholders' Equity $2,914.0 $2,312.6
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</TABLE>
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<TABLE>
<CAPTION>
Quarter Ended Year to Date
December 31, December 31,
ALLETE 2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Net Income
Millions
Energy Services $11.7 $ 6.8 $ 43.1 $ 45.0
Automotive Services 6.5 8.6 48.5 39.9
Water Services 2.8 2.6 13.1 12.2
Investments 2.6 11.3 29.3 26.8
Corporate Charges (4.6) (6.5) (15.8) (19.7)
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Net Income Before Capital Re and ACE 19.0 22.8 118.2 104.2
Capital Re and ACE Transactions * - (12.1) 30.4 (36.2)
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Net Income $19.0 $ 10.7 $148.6 $ 68.0
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Diluted Earnings Per Share
Before Capital Re and ACE Transactions $0.27 $ 0.32 $1.67 $ 1.49
Capital Re and ACE Transactions * - (0.17) 0.44 (0.52)
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$0.27 $ 0.15 $2.11 $ 0.97
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* In May 2000 ALLETE sold its investment in ACE Limited (ACE) common stock, which resulted in an after-tax gain of $30.4
million, or $0.44 per share. The ACE shares were received in December 1999 upon completion of ACE's merger with Capital Re
Corporation (Capital Re). During 1999 ALLETE recorded an aggregate $36.2 million, or $0.52 per share after-tax non-cash charge in
connection with the valuation and exchange of its investment in Capital Re stock for the ACE shares, including a $24.1 million, or
$0.35 per share charge in the second quarter.
</TABLE>
<TABLE>
<CAPTION>
Quarter Ended Year to Date
December 31, December 31,
Statistical Data 2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Corporate
Common Stock
High $25.50 $18.69 $25.50 $22.09
Low $20.13 $16.00 $14.75 $16.00
Close $24.81 $16.94 $24.81 $16.94
Book Value $12.06 $10.97 $12.06 $10.97
Energy Services
Millions of Kilowatthours Sold
Retail
Residential 248.8 234.2 980.1 957.3
Commercial 272.3 258.3 1,207.9 1,156.7
Industrial 1,699.7 1,709.1 7,193.7 6,768.9
Other 18.8 20.5 76.1 77.8
Resale 655.7 620.2 2,272.9 2,365.6
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2,895.3 2,842.3 11,730.7 11,326.3
Automotive Services
Vehicles Sold 380,000 232,000 1,319,000 1,037,000
Vehicles Financed 200,000 186,000 795,000 695,000
EBITDAL (Millions) ** $36.9 $25.5 $154.0 $114.6
Water Services
Millions of Gallons Billed
Florida Water Services
Water 4,653.9 3,922.6 19,310.0 17,251.4
Wastewater 1,378.4 1,180.9 5,385.6 4,869.8
Heater Utilities
Water 818.4 717.7 3,425.2 3,045.5
** Earnings Before Interest, Taxes, Depreciation, Amortization and Lease Expense
</TABLE>
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