x
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
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For the quarterly period ended
September 30, 2014
|
¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
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For the transition period from ______________ to ______________
|
Minnesota
|
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41-0418150
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(State or other jurisdiction of incorporation or organization)
|
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(IRS Employer Identification No.)
|
Large Accelerated Filer
x
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Accelerated Filer
¨
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Non-Accelerated Filer
¨
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Smaller Reporting Company
¨
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September 30, 2014 and December 31, 2013
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For the Quarter and Nine Months Ended September 30, 2014 and 2013
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For the Quarter and Nine Months Ended September 30, 2014 and 2013
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For the Nine Months Ended September 30, 2014 and 2013
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Abbreviation or Acronym
|
Term
|
AFUDC
|
Allowance for Funds Used During Construction – the cost of both debt and equity funds used to finance utility plant additions during construction periods
|
ALLETE
|
ALLETE, Inc.
|
ALLETE Clean Energy
|
ALLETE Clean Energy, Inc.
|
ALLETE Properties
|
ALLETE Properties, LLC, and its subsidiaries
|
ATC
|
American Transmission Company LLC
|
Bison Wind Energy Center
|
Bison 1, 2 & 3 Wind Facilities
|
Bison 4
|
Bison 4 Wind Project
|
BNI Coal
|
BNI Coal, Ltd.
|
Boswell
|
Boswell Energy Center
|
CAIR
|
Clean Air Interstate Rule
|
CO
2
|
Carbon Dioxide
|
Company
|
ALLETE, Inc., and its subsidiaries
|
DC
|
Direct Current
|
EPA
|
Environmental Protection Agency
|
ESOP
|
Employee Stock Ownership Plan
|
FASB
|
Financial Accounting Standards Board
|
FERC
|
Federal Energy Regulatory Commission
|
Form 10-K
|
ALLETE Annual Report on Form 10-K
|
Form 10-Q
|
ALLETE Quarterly Report on Form 10-Q
|
GAAP
|
United States Generally Accepted Accounting Principles
|
GHG
|
Greenhouse Gases
|
GNTL
|
Great Northern Transmission Line
|
IBEW
|
International Brotherhood of Electrical Workers
|
Invest Direct
|
ALLETE’s Direct Stock Purchase and Dividend Reinvestment Plan
|
Item ___
|
Item ___ of this Form 10-Q
|
kV
|
Kilovolt(s)
|
kWh
|
Kilowatt-hour
|
Laskin
|
Laskin Energy Center
|
LIBOR
|
London Interbank Offered Rate
|
MACT
|
Maximum Achievable Control Technology
|
Manitoba Hydro
|
Manitoba Hydro-Electric Board
|
MATS
|
Mercury and Air Toxics Standards
|
Minnesota Power
|
An operating division of ALLETE, Inc.
|
Minnkota Power
|
Minnkota Power Cooperative, Inc.
|
MISO
|
Midcontinent Independent System Operator, Inc.
|
MPCA
|
Minnesota Pollution Control Agency
|
MPUC
|
Minnesota Public Utilities Commission
|
MW / MWh
|
Megawatt(s) / Megawatt-hour(s)
|
NAAQS
|
National Ambient Air Quality Standards
|
NOL
|
Net Operating Loss
|
Non-residential
|
Retail commercial, non-retail commercial, office, industrial, warehouse, storage and institutional
|
Abbreviation or Acronym
|
Term
|
NO
2
|
Nitrogen Dioxide
|
NO
X
|
Nitrogen Oxides
|
Note ___
|
Note ___ to the consolidated financial statements in this Form 10-Q
|
NPDES
|
National Pollutant Discharge Elimination System
|
Oliver Wind I
|
Oliver Wind I Energy Center
|
Oliver Wind II
|
Oliver Wind II Energy Center
|
Palm Coast Park
|
Palm Coast Park development project in Florida
|
Palm Coast Park District
|
Palm Coast Park Community Development District
|
PolyMet
|
PolyMet Mining Corporation
|
PPA
|
Power Purchase Agreement
|
PPACA
|
Patient Protection and Affordable Care Act of 2010
|
PSCW
|
Public Service Commission of Wisconsin
|
Rainy River Energy
|
Rainy River Energy Corporation - Wisconsin
|
SEC
|
Securities and Exchange Commission
|
SIP
|
State Implementation Plan
|
SO
2
|
Sulfur Dioxide
|
Square Butte
|
Square Butte Electric Cooperative
|
SWL&P
|
Superior Water, Light and Power Company
|
Taconite Harbor
|
Taconite Harbor Energy Center
|
Thomson
|
Thomson Energy Center
|
Town Center
|
Town Center at Palm Coast development project in Florida
|
Town Center District
|
Town Center at Palm Coast Community Development District
|
U.S.
|
United States of America
|
•
|
our ability to successfully implement our strategic objectives;
|
•
|
global and domestic economic conditions affecting us or our customers;
|
•
|
wholesale power market conditions;
|
•
|
federal and state regulatory and legislative actions that impact regulated utility economics, including our allowed rates of return, capital structure, ability to secure financing, industry and rate structure, acquisition and disposal of assets and facilities, operation and construction of plant facilities and utility infrastructure, recovery of purchased power, capital investments and other expenses, including present or prospective environmental matters;
|
•
|
changes in and compliance with laws and regulations;
|
•
|
effects of competition, including competition for retail and wholesale customers;
|
•
|
effects of restructuring initiatives in the electric industry;
|
•
|
changes in tax rates or policies or in rates of inflation;
|
•
|
the impacts on our Regulated Operations segment of climate change and future regulation to restrict the emissions of greenhouse gases;
|
•
|
the impacts of laws and regulations related to renewable and distributed generation;
|
•
|
the outcome of legal and administrative proceedings (whether civil or criminal) and settlements;
|
•
|
weather conditions, natural disasters and pandemic diseases;
|
•
|
our ability to access capital markets and bank financing;
|
•
|
changes in interest rates and the performance of the financial markets;
|
•
|
project delays or changes in project costs;
|
•
|
availability and management
of construction materials and skilled construction labor for capital projects;
|
•
|
changes in operating expenses and capital expenditures and our ability to recover these costs;
|
•
|
pricing, availability and transportation of fuel and other commodities and the ability to recover the costs of such commodities;
|
•
|
our ability to replace a mature workforce and retain qualified, skilled and experienced personnel;
|
•
|
effects of emerging technology;
|
•
|
war, acts of terrorism and cyber attacks;
|
•
|
our ability to manage expansion and integrate acquisitions;
|
•
|
our current and potential industrial and municipal customers’ ability to execute announced expansion plans;
|
•
|
population growth rates and demographic patterns; and
|
•
|
zoning and permitting of land held for resale, real estate development or changes in the real estate market.
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and Cash Equivalents
|
|
$150.5
|
|
|
|
$97.3
|
|
Accounts Receivable (Less Allowance of $1.0 and $1.1)
|
82.4
|
|
|
96.3
|
|
||
Inventories
|
71.6
|
|
|
59.3
|
|
||
Prepayments and Other
|
29.3
|
|
|
35.1
|
|
||
Deferred Income Taxes
|
24.0
|
|
|
19.0
|
|
||
Total Current Assets
|
357.8
|
|
|
307.0
|
|
||
Property, Plant and Equipment - Net
|
3,121.5
|
|
|
2,576.5
|
|
||
Regulatory Assets
|
277.1
|
|
|
263.8
|
|
||
Investment in ATC
|
120.7
|
|
|
114.6
|
|
||
Other Investments
|
116.4
|
|
|
146.3
|
|
||
Other Non-Current Assets
|
74.4
|
|
|
68.6
|
|
||
Total Assets
|
|
$4,067.9
|
|
|
|
$3,476.8
|
|
Liabilities and Equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts Payable
|
|
$92.7
|
|
|
|
$99.9
|
|
Accrued Taxes
|
30.9
|
|
|
34.8
|
|
||
Accrued Interest
|
14.8
|
|
|
15.7
|
|
||
Long-Term Debt Due Within One Year
|
85.3
|
|
|
27.2
|
|
||
Notes Payable
|
2.7
|
|
|
—
|
|
||
Other
|
60.4
|
|
|
52.6
|
|
||
Total Current Liabilities
|
286.8
|
|
|
230.2
|
|
||
Long-Term Debt
|
1,289.2
|
|
|
1,083.0
|
|
||
Deferred Income Taxes
|
509.7
|
|
|
479.1
|
|
||
Regulatory Liabilities
|
103.1
|
|
|
81.0
|
|
||
Defined Benefit Pension and Other Postretirement Benefit Plans
|
116.8
|
|
|
133.4
|
|
||
Other Non-Current Liabilities
|
231.6
|
|
|
127.2
|
|
||
Total Liabilities
|
2,537.2
|
|
|
2,133.9
|
|
||
Commitments, Guarantees and Contingencies (Note 15)
|
|
|
|
||||
Equity
|
|
|
|
||||
ALLETE’s Equity
|
|
|
|
||||
Common Stock Without Par Value, 80.0 Shares Authorized, 44.5 and 41.4 Shares Outstanding
|
1,035.3
|
|
|
885.2
|
|
||
Unearned ESOP Shares
|
(8.6
|
)
|
|
(14.3
|
)
|
||
Accumulated Other Comprehensive Loss
|
(16.1
|
)
|
|
(17.1
|
)
|
||
Retained Earnings
|
518.6
|
|
|
489.1
|
|
||
Total ALLETE Equity
|
1,529.2
|
|
|
1,342.9
|
|
||
Non-Controlling Interest in Subsidiaries
|
1.5
|
|
|
—
|
|
||
Total Equity
|
1,530.7
|
|
|
1,342.9
|
|
||
Total Liabilities and Equity
|
|
$4,067.9
|
|
|
|
$3,476.8
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||
|
September 30,
|
|
September 30,
|
||||||||||
|
2014
|
2013
|
|
2014
|
2013
|
||||||||
|
|
|
|
|
|
||||||||
Operating Revenue
|
|
$288.9
|
|
|
$251.0
|
|
|
|
$846.1
|
|
|
$750.4
|
|
Operating Expenses
|
|
|
|
|
|
||||||||
Fuel and Purchased Power
|
88.9
|
|
80.5
|
|
|
268.7
|
|
245.7
|
|
||||
Operating and Maintenance
|
105.7
|
|
102.7
|
|
|
340.6
|
|
311.2
|
|
||||
Depreciation
|
33.5
|
|
29.4
|
|
|
99.5
|
|
86.3
|
|
||||
Total Operating Expenses
|
228.1
|
|
212.6
|
|
|
708.8
|
|
643.2
|
|
||||
Operating Income
|
60.8
|
|
38.4
|
|
|
137.3
|
|
107.2
|
|
||||
Other Income (Expense)
|
|
|
|
|
|
||||||||
Interest Expense
|
(13.2
|
)
|
(12.7
|
)
|
|
(39.5
|
)
|
(37.8
|
)
|
||||
Equity Earnings in ATC
|
5.3
|
|
4.9
|
|
|
15.6
|
|
15.1
|
|
||||
Other
|
2.1
|
|
3.3
|
|
|
6.0
|
|
7.5
|
|
||||
Total Other Expense
|
(5.8
|
)
|
(4.5
|
)
|
|
(17.9
|
)
|
(15.2
|
)
|
||||
Income Before Non-Controlling Interest and Income Taxes
|
55.0
|
|
33.9
|
|
|
119.4
|
|
92.0
|
|
||||
Income Tax Expense
|
13.4
|
|
8.7
|
|
|
27.1
|
|
20.3
|
|
||||
Net Income
|
41.6
|
|
25.2
|
|
|
92.3
|
|
71.7
|
|
||||
Less: Non-Controlling Interest in Subsidiaries
|
—
|
|
—
|
|
|
0.4
|
|
—
|
|
||||
Net Income Attributable to ALLETE
|
|
$41.6
|
|
|
$25.2
|
|
|
|
$91.9
|
|
|
$71.7
|
|
Average Shares of Common Stock
|
|
|
|
|
|
||||||||
Basic
|
42.9
|
|
39.8
|
|
|
42.1
|
|
39.4
|
|
||||
Diluted
|
42.9
|
|
39.9
|
|
|
42.3
|
|
39.5
|
|
||||
Basic Earnings Per Share of Common Stock
|
|
$0.97
|
|
|
$0.63
|
|
|
|
$2.18
|
|
|
$1.82
|
|
Diluted Earnings Per Share of Common Stock
|
|
$0.97
|
|
|
$0.63
|
|
|
|
$2.17
|
|
|
$1.81
|
|
Dividends Per Share of Common Stock
|
|
$0.49
|
|
|
$0.475
|
|
|
|
$1.47
|
|
|
$1.425
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
Comprehensive Income
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net Income
|
|
$41.6
|
|
|
|
$25.2
|
|
|
|
$92.3
|
|
|
|
$71.7
|
|
Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Unrealized Gain (Loss) on Securities
|
|
|
|
|
|
|
|
||||||||
Net of Income Taxes of $–, $(0.3), $0.1, and $(0.2)
|
(0.1
|
)
|
|
(0.5
|
)
|
|
0.1
|
|
|
(0.4
|
)
|
||||
Unrealized Gain (Loss) on Derivatives
|
|
|
|
|
|
|
|
|
|
||||||
Net of Income Taxes of $–, $(0.1), $0.1, and $–
|
0.1
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
—
|
|
||||
Defined Benefit Pension and Other Postretirement Benefit Plans
|
|
|
|
|
|
|
|
||||||||
Net of Income Taxes of $0.2, $0.3, $0.6, and $0.8
|
0.2
|
|
|
0.3
|
|
|
0.8
|
|
|
1.1
|
|
||||
Total Other Comprehensive Income (Loss)
|
0.2
|
|
|
(0.3
|
)
|
|
1.0
|
|
|
0.7
|
|
||||
Total Comprehensive Income
|
41.8
|
|
|
24.9
|
|
|
93.3
|
|
|
72.4
|
|
||||
Less: Non-Controlling Interest in Subsidiaries
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
||||
Comprehensive Income Attributable to ALLETE
|
|
$41.8
|
|
|
|
$24.9
|
|
|
|
$92.9
|
|
|
|
$72.4
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2014
|
|
2013
|
||||
|
|
|
|
||||
Operating Activities
|
|
|
|
||||
Net Income
|
|
$92.3
|
|
|
|
$71.7
|
|
Allowance for Funds Used During Construction – Equity
|
(5.9
|
)
|
|
(3.4
|
)
|
||
Income from Equity Investments, Net of Dividends
|
(3.0
|
)
|
|
(3.1
|
)
|
||
Gains on Sale of Assets / Investments
|
(0.2
|
)
|
|
(2.4
|
)
|
||
Depreciation Expense
|
99.5
|
|
|
86.3
|
|
||
Amortization of Debt Issuance Costs
|
0.8
|
|
|
0.8
|
|
||
Amortization of Power Purchase Agreements
|
(9.0
|
)
|
|
—
|
|
||
Deferred Income Tax Expense
|
25.2
|
|
|
20.4
|
|
||
Share-Based Compensation Expense
|
1.7
|
|
|
1.8
|
|
||
ESOP Compensation Expense
|
6.7
|
|
|
6.0
|
|
||
Defined Benefit Pension and Postretirement Benefit Expense
|
9.6
|
|
|
16.8
|
|
||
Bad Debt Expense
|
1.1
|
|
|
0.9
|
|
||
Changes in Operating Assets and Liabilities
|
|
|
|
||||
Accounts Receivable
|
16.9
|
|
|
8.2
|
|
||
Inventories
|
(9.2
|
)
|
|
5.1
|
|
||
Prepayments and Other
|
8.8
|
|
|
4.4
|
|
||
Accounts Payable
|
(1.2
|
)
|
|
3.9
|
|
||
Other Current Liabilities
|
(12.8
|
)
|
|
(8.8
|
)
|
||
Cash Contributions to Defined Benefit Pension and Other Postretirement Benefit Plans
|
—
|
|
|
(10.8
|
)
|
||
Changes in Regulatory and Other Non-Current Assets
|
(13.0
|
)
|
|
(13.5
|
)
|
||
Changes in Regulatory and Other Non-Current Liabilities
|
3.8
|
|
|
4.6
|
|
||
Cash from Operating Activities
|
212.1
|
|
|
188.9
|
|
||
Investing Activities
|
|
|
|
||||
Proceeds from Sale of Available-for-sale Securities
|
3.3
|
|
|
15.0
|
|
||
Payments for Purchase of Available-for-sale Securities
|
(4.3
|
)
|
|
(2.8
|
)
|
||
Investment in ATC
|
(3.1
|
)
|
|
(2.3
|
)
|
||
Changes to Other Investments
|
31.1
|
|
|
(10.5
|
)
|
||
Additions to Property, Plant and Equipment
|
(467.8
|
)
|
|
(195.3
|
)
|
||
Acquisition – Net of Cash Acquired
|
(23.1
|
)
|
|
—
|
|
||
Cash in Escrow for Acquisition
|
5.4
|
|
|
—
|
|
||
Proceeds from Sale of Assets
|
—
|
|
|
0.9
|
|
||
Cash for Investing Activities
|
(458.5
|
)
|
|
(195.0
|
)
|
||
Financing Activities
|
|
|
|
||||
Proceeds from Issuance of Common Stock
|
128.9
|
|
|
63.3
|
|
||
Proceeds from Issuance of Long-Term Debt
|
375.0
|
|
|
150.0
|
|
||
Changes in Restricted Cash
|
(1.4
|
)
|
|
—
|
|
||
Changes in Notes Payable
|
2.7
|
|
|
1.2
|
|
||
Reductions of Long-Term Debt
|
(134.1
|
)
|
|
(66.2
|
)
|
||
Debt Issuance Costs
|
(3.1
|
)
|
|
(1.3
|
)
|
||
Acquisition of Non-Controlling Interest
|
(6.0
|
)
|
|
—
|
|
||
Dividends on Common Stock
|
(62.4
|
)
|
|
(57.2
|
)
|
||
Cash from Financing Activities
|
299.6
|
|
|
89.8
|
|
||
Change in Cash and Cash Equivalents
|
53.2
|
|
|
83.7
|
|
||
Cash and Cash Equivalents at Beginning of Period
|
97.3
|
|
|
80.8
|
|
||
Cash and Cash Equivalents at End of Period
|
|
$150.5
|
|
|
|
$164.5
|
|
Inventories
|
September 30,
2014 |
|
|
December 31,
2013 |
|
||
Millions
|
|
|
|
||||
Fuel
|
|
$16.8
|
|
|
|
$13.1
|
|
Materials and Supplies
|
54.8
|
|
|
46.2
|
|
||
Total Inventories
|
|
$71.6
|
|
|
|
$59.3
|
|
Prepayments and Other Current Assets
|
September 30,
2014 |
|
|
December 31,
2013 |
|
||
Millions
|
|
|
|
||||
Deferred Fuel Adjustment Clause
|
|
$18.5
|
|
|
|
$23.0
|
|
Restricted Cash
(a)
|
2.4
|
|
|
—
|
|
||
Other
|
8.4
|
|
|
12.1
|
|
||
Total Prepayments and Other Current Assets
|
|
$29.3
|
|
|
|
$35.1
|
|
(a)
|
Restricted Cash related to ALLETE Clean Energy’s wind energy facilities operating expense and capital distribution reserve requirements.
|
Other Current Liabilities
|
September 30,
2014 |
|
|
December 31,
2013 |
|
||
Millions
|
|
|
|
||||
Customer Deposits
|
|
$21.2
|
|
|
|
$26.0
|
|
Power Purchase Agreements
(a)
|
12.3
|
|
|
—
|
|
||
Other
|
26.9
|
|
|
26.6
|
|
||
Total Other Current Liabilities
|
|
$60.4
|
|
|
|
$52.6
|
|
(a)
|
Power Purchase Agreements were acquired in conjunction with the ALLETE Clean Energy wind energy facilities acquisition on January 30, 2014. (See Note 4. Acquisition.)
|
Other Non-Current Liabilities
|
September 30,
2014 |
|
|
December 31,
2013 |
|
||
Millions
|
|
|
|
||||
Asset Retirement Obligation
|
|
$94.6
|
|
|
|
$81.8
|
|
Power Purchase Agreements
(a)
|
90.5
|
|
|
—
|
|
||
Other
|
46.5
|
|
|
45.4
|
|
||
Total Other Non-Current Liabilities
|
|
$231.6
|
|
|
|
$127.2
|
|
(a)
|
Power Purchase Agreements were acquired in conjunction with the ALLETE Clean Energy wind energy facilities acquisition on January 30, 2014. (See Note 4. Acquisition.)
|
For the Nine Months Ended September 30,
|
2014
|
|
|
2013
|
|
||
Millions
|
|
|
|
||||
Cash Paid During the Period for Interest – Net of Amounts Capitalized
|
|
$39.4
|
|
|
|
$36.0
|
|
Cash Paid During the Period for Income Taxes
|
|
$2.8
|
|
|
|
$0.6
|
|
Noncash Investing and Financing Activities
|
|
|
|
|
|
||
Decrease in Accounts Payable for Capital Additions to Property, Plant and Equipment
|
$(6.5)
|
|
$(10.0)
|
||||
Capitalized Asset Retirement Costs
|
|
$0.6
|
|
|
|
$1.9
|
|
AFUDC – Equity
|
|
$5.9
|
|
|
|
$3.4
|
|
ALLETE Common Stock Contributed to the Pension Plan
|
|
$19.5
|
|
|
—
|
|
|
Consolidated
|
|
Regulated Operations
|
|
Investments and Other
|
|
|||
Millions
|
|
|
|
||||||
For the Quarter Ended September 30, 2014
|
|
|
|
||||||
Operating Revenue
|
|
$288.9
|
|
|
$255.8
|
|
|
$33.1
|
|
Fuel and Purchased Power Expense
|
88.9
|
|
88.9
|
|
—
|
|
|||
Operating and Maintenance Expense
|
105.7
|
|
79.4
|
|
26.3
|
|
|||
Depreciation Expense
|
33.5
|
|
28.5
|
|
5.0
|
|
|||
Operating Income
|
60.8
|
|
59.0
|
|
1.8
|
|
|||
Interest Expense
|
(13.2
|
)
|
(11.8
|
)
|
(1.4
|
)
|
|||
Equity Earnings in ATC
|
5.3
|
|
5.3
|
|
—
|
|
|||
Other Income
|
2.1
|
|
2.1
|
|
—
|
|
|||
Income Before Non-Controlling Interest and Income Taxes
|
55.0
|
|
54.6
|
|
0.4
|
|
|||
Income Tax Expense
|
13.4
|
|
13.4
|
|
—
|
|
|||
Net Income
|
41.6
|
|
41.2
|
|
0.4
|
|
|||
Less: Non-Controlling Interest in Subsidiaries
|
—
|
|
—
|
|
—
|
|
|||
Net Income Attributable to ALLETE
|
|
$41.6
|
|
|
$41.2
|
|
|
$0.4
|
|
|
Consolidated
|
|
Regulated Operations
|
|
Investments and Other
|
|
|||
Millions
|
|
|
|
||||||
For the Quarter Ended September 30, 2013
|
|
|
|
||||||
Operating Revenue
|
|
$251.0
|
|
|
$226.4
|
|
|
$24.6
|
|
Fuel and Purchased Power Expense
|
80.5
|
|
80.5
|
|
—
|
|
|||
Operating and Maintenance Expense
|
102.7
|
|
78.6
|
|
24.1
|
|
|||
Depreciation Expense
|
29.4
|
|
27.9
|
|
1.5
|
|
|||
Operating Income (Loss)
|
38.4
|
|
39.4
|
|
(1.0
|
)
|
|||
Interest Expense
|
(12.7
|
)
|
(10.4
|
)
|
(2.3
|
)
|
|||
Equity Earnings in ATC
|
4.9
|
|
4.9
|
|
—
|
|
|||
Other Income
|
3.3
|
|
1.2
|
|
2.1
|
|
|||
Income (Loss) Before Non-Controlling Interest and Income Taxes
|
33.9
|
|
35.1
|
|
(1.2
|
)
|
|||
Income Tax Expense (Benefit)
|
8.7
|
|
10.5
|
|
(1.8
|
)
|
|||
Net Income
|
25.2
|
|
24.6
|
|
0.6
|
|
|||
Less: Non-Controlling Interest in Subsidiaries
|
—
|
|
—
|
|
—
|
|
|||
Net Income Attributable to ALLETE
|
|
$25.2
|
|
|
$24.6
|
|
|
$0.6
|
|
|
Consolidated
|
|
Regulated Operations
|
|
Investments and Other
|
|
|||
Millions
|
|
|
|
||||||
For the Nine Months Ended September 30, 2014
|
|
|
|
||||||
Operating Revenue
|
|
$846.1
|
|
|
$749.6
|
|
|
$96.5
|
|
Fuel and Purchased Power Expense
|
268.7
|
|
268.7
|
|
—
|
|
|||
Operating and Maintenance Expense
|
340.6
|
|
258.6
|
|
82.0
|
|
|||
Depreciation Expense
|
99.5
|
|
86.9
|
|
12.6
|
|
|||
Operating Income
|
137.3
|
|
135.4
|
|
1.9
|
|
|||
Interest Expense
|
(39.5
|
)
|
(34.7
|
)
|
(4.8
|
)
|
|||
Equity Earnings in ATC
|
15.6
|
|
15.6
|
|
—
|
|
|||
Other Income
|
6.0
|
|
5.9
|
|
0.1
|
|
|||
Income (Loss) Before Non-Controlling Interest and Income Taxes
|
119.4
|
|
122.2
|
|
(2.8
|
)
|
|||
Income Tax Expense (Benefit)
|
27.1
|
|
29.6
|
|
(2.5
|
)
|
|||
Net Income (Loss)
|
92.3
|
|
92.6
|
|
(0.3
|
)
|
|||
Less: Non-Controlling Interest in Subsidiaries
|
0.4
|
|
—
|
|
0.4
|
|
|||
Net Income (Loss) Attributable to ALLETE
|
|
$91.9
|
|
|
$92.6
|
|
$(0.7)
|
||
|
|
|
|
||||||
As of September 30, 2014
|
|
|
|
||||||
Total Assets
|
|
$4,067.9
|
|
|
$3,519.9
|
|
|
$548.0
|
|
Property, Plant and Equipment – Net
|
|
$3,121.5
|
|
|
$2,888.5
|
|
|
$233.0
|
|
Accumulated Depreciation
|
|
$1,316.6
|
|
|
$1,244.7
|
|
|
$71.9
|
|
Capital Additions
|
|
$467.6
|
|
|
$452.9
|
|
|
$14.7
|
|
|
Consolidated
|
|
Regulated Operations
|
|
Investments and Other
|
|
|||
Millions
|
|
|
|
||||||
For the Nine Months Ended September 30, 2013
|
|
|
|
||||||
Operating Revenue
|
|
$750.4
|
|
|
$683.6
|
|
|
$66.8
|
|
Fuel and Purchased Power Expense
|
245.7
|
|
245.7
|
|
—
|
|
|||
Operating and Maintenance Expense
|
311.2
|
|
243.6
|
|
67.6
|
|
|||
Depreciation Expense
|
86.3
|
|
81.8
|
|
4.5
|
|
|||
Operating Income (Loss)
|
107.2
|
|
112.5
|
|
(5.3
|
)
|
|||
Interest Expense
|
(37.8
|
)
|
(31.5
|
)
|
(6.3
|
)
|
|||
Equity Earnings in ATC
|
15.1
|
|
15.1
|
|
—
|
|
|||
Other Income
|
7.5
|
|
3.4
|
|
4.1
|
|
|||
Income (Loss) Before Non-Controlling Interest and Income Taxes
|
92.0
|
|
99.5
|
|
(7.5
|
)
|
|||
Income Tax Expense (Benefit)
|
20.3
|
|
26.5
|
|
(6.2
|
)
|
|||
Net Income (Loss)
|
71.7
|
|
73.0
|
|
(1.3
|
)
|
|||
Less: Non-Controlling Interest in Subsidiaries
|
—
|
|
—
|
|
—
|
|
|||
Net Income (Loss) Attributable to ALLETE
|
|
$71.7
|
|
|
$73.0
|
|
$(1.3)
|
||
|
|
|
|
||||||
As of September 30, 2013
|
|
|
|
|
|
|
|||
Total Assets
|
|
$3,463.9
|
|
|
$3,086.3
|
|
|
$377.6
|
|
Property, Plant and Equipment – Net
|
|
$2,456.1
|
|
|
$2,384.1
|
|
|
$72.0
|
|
Accumulated Depreciation
|
|
$1,225.3
|
|
|
$1,165.8
|
|
|
$59.5
|
|
Capital Additions
|
|
$186.4
|
|
|
$177.6
|
|
|
$8.8
|
|
Other Investments
|
September 30,
2014 |
|
|
December 31,
2013 |
|
||
Millions
|
|
|
|
||||
ALLETE Properties
|
|
$89.4
|
|
|
|
$89.9
|
|
Available-for-sale Securities
(a)
|
19.0
|
|
|
17.7
|
|
||
Cash Equivalents
(b)
|
3.7
|
|
|
34.2
|
|
||
Other
|
4.3
|
|
|
4.5
|
|
||
Total Other Investments
|
|
$116.4
|
|
|
|
$146.3
|
|
(a)
|
As of
September 30, 2014
, the aggregate amount of available-for-sale corporate debt securities maturing in one year or less was
$0.2 million
, in one year to less than three years was
$2.1 million
, in three years to less than five years was
$1.3 million
, and in five or more years was
$7.1 million
.
|
(b)
|
During the first quarter of 2014, cash included in Other Investments was transferred to Cash and Cash Equivalents.
|
ALLETE Properties
|
September 30,
2014 |
|
|
December 31,
2013 |
|
||
Millions
|
|
|
|
||||
Land Inventory Beginning Balance
|
|
$85.4
|
|
|
|
$86.5
|
|
Cost of Sales
|
(1.1
|
)
|
|
(1.5
|
)
|
||
Other
|
0.5
|
|
|
0.4
|
|
||
Land Inventory Ending Balance
|
84.8
|
|
|
85.4
|
|
||
Long-Term Finance Receivables (net of allowances of $0.6 and $0.6)
|
1.4
|
|
|
1.4
|
|
||
Other
|
3.2
|
|
|
3.1
|
|
||
Total Real Estate Assets
|
|
$89.4
|
|
|
|
$89.9
|
|
|
|
Gross Unrealized
|
|
|
Available-For-Sale Securities
|
Cost
|
Gain
|
Loss
|
Fair Value
|
Millions
|
|
|
|
|
September 30, 2014
|
$19.1
|
$0.3
|
$0.4
|
$19.0
|
December 31, 2013
|
$18.3
|
—
|
$0.6
|
$17.7
|
|
Net
|
Gross Realized
|
|
Available-For-Sale Securities (Continued)
|
Proceeds
|
Gain
|
Loss
|
Millions
|
|
|
|
Quarter Ended September 30,
|
|
|
|
2014
|
$0.6
|
—
|
—
|
2013
|
$6.9
|
$1.4
|
—
|
Nine Months Ended September 30,
|
|
|
|
2014
|
$3.3
|
$0.2
|
—
|
2013
|
$15.0
|
$2.2
|
—
|
Millions
|
|
||
Assets Acquired
|
|
||
Cash and Cash Equivalents
|
|
$3.8
|
|
Other Current Assets
|
14.3
|
|
|
Property, Plant and Equipment – Net
|
156.9
|
|
|
Other Non-Current Assets
(a)
|
7.5
|
|
|
Total Assets Acquired
|
|
$182.5
|
|
Liabilities Assumed
|
|
||
Other Current Liabilities
(b)
|
|
$15.2
|
|
Long-Term Debt Due Within One Year
|
2.2
|
|
|
Long-Term Debt
|
21.1
|
|
|
Power Purchase Agreements
|
99.4
|
|
|
Other Non-Current Liabilities
|
10.6
|
|
|
Non-Controlling Interest
(c)
|
7.1
|
|
|
Total Liabilities and Non-Controlling Interest Assumed
|
155.6
|
|
|
Net Identifiable Assets Acquired
|
|
$26.9
|
|
(a)
|
Included in Other Non-Current Assets was
$0.3
million for the option to purchase Armenia Mountain in 2015, and goodwill of
$2.9
million; for tax purposes, the purchase price allocation resulted in no allocation to goodwill.
|
(b)
|
Other Current Liabilities included
$12.4
million related to the current liabilities portion of the Power Purchase Agreements.
|
(c)
|
The purchase price accounting valued the non-controlling interest relating to Lake Benton, Storm Lake and Condon at fair value using the discounted cash flow method. The non-controlling interest related to Lake Benton and Storm Lake was subsequently purchased by ALLETE Clean Energy.
|
|
Fair Value as of September 30, 2014
|
|||||||||||||
Recurring Fair Value Measures
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|||
Millions
|
|
|
|
|
|
|
|
|||||||
Assets:
|
|
|
|
|
|
|
|
|||||||
Investments
(a)
|
|
|
|
|
|
|
|
|||||||
Available-for-sale – Equity Securities
|
|
$8.3
|
|
|
—
|
|
|
—
|
|
|
|
$8.3
|
|
|
Available-for-sale – Corporate Debt Securities
|
—
|
|
|
|
$10.7
|
|
|
—
|
|
|
10.7
|
|
||
Cash Equivalents
|
3.7
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|||
Total Fair Value of Assets
|
|
$12.0
|
|
|
|
$10.7
|
|
|
—
|
|
|
|
$22.7
|
|
|
|
|
|
|
|
|
|
|||||||
Liabilities:
|
|
|
|
|
|
|
|
|||||||
Deferred Compensation
(b)
|
—
|
|
|
|
$16.2
|
|
|
—
|
|
|
|
$16.2
|
|
|
Derivatives – Interest Rate Swap
(c)
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|||
Total Fair Value of Liabilities
|
—
|
|
|
|
$16.6
|
|
|
—
|
|
|
|
$16.6
|
|
|
Total Net Fair Value of Assets (Liabilities)
|
|
$12.0
|
|
|
$(5.9)
|
|
—
|
|
|
|
$6.1
|
|
(a)
|
Included in Other Investments on the Consolidated Balance Sheet.
|
(b)
|
Included in Other Non-Current Liabilities on the Consolidated Balance Sheet.
|
(c)
|
Included in Current Liabilities - Other on the Consolidated Balance Sheet.
|
|
Fair Value as of December 31, 2013
|
|||||||||||||
Recurring Fair Value Measures
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|||
Millions
|
|
|
|
|
|
|
|
|||||||
Assets:
|
|
|
|
|
|
|
|
|||||||
Investments
(a)
|
|
|
|
|
|
|
|
|||||||
Available-for-sale – Equity Securities
|
|
$7.9
|
|
|
—
|
|
|
—
|
|
|
|
$7.9
|
|
|
Available-for-sale – Corporate Debt Securities
|
—
|
|
|
|
$9.8
|
|
|
—
|
|
|
9.8
|
|
||
Cash Equivalents
|
34.2
|
|
|
—
|
|
|
—
|
|
|
34.2
|
|
|||
Total Fair Value of Assets
|
|
$42.1
|
|
|
|
$9.8
|
|
|
—
|
|
|
|
$51.9
|
|
|
|
|
|
|
|
|
|
|||||||
Liabilities:
|
|
|
|
|
|
|
|
|||||||
Deferred Compensation
(b)
|
—
|
|
|
|
$16.8
|
|
|
—
|
|
|
|
$16.8
|
|
|
Derivatives – Interest Rate Swap
(c)
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|||
Total Fair Value of Liabilities
|
—
|
|
|
|
$17.4
|
|
|
—
|
|
|
|
$17.4
|
|
|
Total Net Fair Value of Assets (Liabilities)
|
|
$42.1
|
|
|
$(7.6)
|
|
—
|
|
|
|
$34.5
|
|
(a)
|
Included in Other Investments on the Consolidated Balance Sheet.
|
(b)
|
Included in Other Non-Current Liabilities on the Consolidated Balance Sheet.
|
(c)
|
Included in Current Liabilities - Other and Other Non-Current Liabilities on the Consolidated Balance Sheet.
|
Financial Instruments
|
Carrying Amount
|
|
Fair Value
|
Millions
|
|
|
|
Long-Term Debt, Including Current Portion
|
|
|
|
September 30, 2014
|
$1,374.5
|
|
$1,465.0
|
December 31, 2013
|
$1,110.2
|
|
$1,131.7
|
Regulatory Assets and Liabilities
|
September 30,
2014 |
|
|
December 31,
2013 |
|
||
Millions
|
|
|
|
||||
Current Regulatory Assets
(a)
|
|
|
|
||||
Deferred Fuel
|
|
$18.5
|
|
|
|
$23.0
|
|
Total Current Regulatory Assets
|
18.5
|
|
|
23.0
|
|
||
Non-Current Regulatory Assets
|
|
|
|
||||
Defined Benefit Pension and Other Postretirement Benefit Plans
(b)
|
158.6
|
|
|
164.1
|
|
||
Cost Recovery Riders
(c)
|
54.5
|
|
|
39.6
|
|
||
Income Taxes
|
37.9
|
|
|
35.3
|
|
||
Asset Retirement Obligations
|
17.2
|
|
|
16.0
|
|
||
PPACA Income Tax Deferral
|
5.0
|
|
|
5.0
|
|
||
Other
|
3.9
|
|
|
3.8
|
|
||
Total Non-Current Regulatory Assets
|
277.1
|
|
|
263.8
|
|
||
Total Regulatory Assets
|
|
$295.6
|
|
|
|
$286.8
|
|
|
|
|
|
||||
Non-Current Regulatory Liabilities
|
|
|
|
||||
Plant Removal Obligations
|
|
$22.7
|
|
|
|
$19.7
|
|
Wholesale and Retail Contra AFUDC
|
37.6
|
|
|
19.7
|
|
||
Income Taxes
|
17.6
|
|
|
17.0
|
|
||
Defined Benefit Pension and Other Postretirement Benefit Plans
(b)
|
15.1
|
|
|
16.3
|
|
||
Other
|
10.1
|
|
|
8.3
|
|
||
Total Non-Current Regulatory Liabilities
|
|
$103.1
|
|
|
|
$81.0
|
|
(a)
|
Current regulatory assets are included in Prepayments and Other on the Consolidated Balance Sheet.
|
(b)
|
Defined benefit pension and other postretirement items included in our Regulated Operations, which are otherwise required to be recognized in accumulated other comprehensive income, are recognized as regulatory assets or regulatory liabilities on the Consolidated Balance Sheet. (See Note 14. Pension and Other Postretirement Benefit Plans.)
|
(c)
|
The cost recovery rider regulatory asset is primarily due to capital expenditures related to our Bison Wind Energy Center and is recognized in accordance with the accounting standards for alternative revenue programs.
|
ALLETE’s Investment in ATC
|
|
||
Millions
|
|
||
Equity Investment Balance as of December 31, 2013
|
|
$114.6
|
|
Cash Investments
|
3.1
|
|
|
Equity in ATC Earnings
|
15.6
|
|
|
Distributed ATC Earnings
|
(12.6
|
)
|
|
Equity Investment Balance as of September 30, 2014
|
|
$120.7
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||
ATC Summarized Financial Data
|
September 30,
|
|
September 30,
|
||||||||||
Income Statement Data
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||
Millions
|
|
|
|
|
|
|
|
||||||
Revenue
|
$163.6
|
|
$160.5
|
|
|
$487.0
|
|
|
|
$464.3
|
|
||
Operating Expense
|
76.6
|
|
77.6
|
|
229.6
|
|
|
217.2
|
|
||||
Other Expense
|
21.4
|
|
20.2
|
|
65.1
|
|
|
62.6
|
|
||||
Net Income
|
$65.6
|
|
$62.7
|
|
|
$192.3
|
|
|
|
$184.5
|
|
||
ALLETE’s Equity in Net Income
|
|
$5.3
|
|
|
$4.9
|
|
|
$15.6
|
|
|
|
$15.1
|
|
Issue Date
|
Maturity Date
|
Principal Amount
|
Interest Rate
|
March 4, 2014
|
March 15, 2024
|
$60 Million
|
3.69%
|
March 4, 2014
|
March 15, 2044
|
$40 Million
|
4.95%
|
June 26, 2014
|
July 15, 2022
|
$75 Million
|
3.40%
|
June 26, 2014
|
July 15, 2044
|
$40 Million
|
5.05%
|
September 16, 2014
|
September 15, 2021
|
$60 Million
|
3.02%
|
September 16, 2014
|
September 15, 2029
|
$50 Million
|
3.74%
|
September 16, 2014
|
September 15, 2044
|
$50 Million
|
4.39%
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
||||
Millions
|
|
|
|
|
|
|
|
|
||||||||
AFUDC – Equity
|
|
|
$2.1
|
|
|
|
$1.2
|
|
|
|
$5.9
|
|
|
|
$3.4
|
|
Gain on Sale of Available-for-sale Securities
|
|
—
|
|
|
1.4
|
|
|
0.2
|
|
|
2.2
|
|
||||
Investments and Other Income (Expense)
|
|
—
|
|
|
0.7
|
|
|
(0.1
|
)
|
|
1.9
|
|
||||
Total Other Income
|
|
|
$2.1
|
|
|
|
$3.3
|
|
|
|
$6.0
|
|
|
|
$7.5
|
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Millions
|
|
|
|
|
|
|
|
|
||||||||
Current Tax Expense (Benefit)
|
|
|
|
|
|
|
|
|
||||||||
Federal
(a)(c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
State
(b)(c)
|
|
$1.8
|
|
$(0.1)
|
|
$1.9
|
|
$(0.1)
|
||||||||
Total Current Tax Expense (Benefit)
|
|
$1.8
|
|
$(0.1)
|
|
$1.9
|
|
$(0.1)
|
||||||||
Deferred Tax Expense (Benefit)
|
|
|
|
|
|
|
|
|
||||||||
Federal
|
|
|
$11.2
|
|
|
|
$7.3
|
|
|
|
$20.4
|
|
|
|
$15.5
|
|
State
|
|
0.7
|
|
|
1.7
|
|
|
5.4
|
|
|
5.5
|
|
||||
Investment Tax Credit Amortization
|
|
(0.3
|
)
|
|
(0.2
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
||||
Total Deferred Tax Expense
|
|
11.6
|
|
|
8.8
|
|
|
25.2
|
|
|
20.4
|
|
||||
Total Income Tax Expense
|
|
|
$13.4
|
|
|
|
$8.7
|
|
|
|
$27.1
|
|
|
|
$20.3
|
|
(a)
|
For the quarter and
nine
months ended
September 30, 2014
, the federal current tax expense of
zero
reflected the utilization of NOL carryforwards from prior periods. The federal NOLs remaining after utilization in 2014 will be carried forward to offset future taxable income.
|
(b)
|
For the quarter and
nine
months ended
September 30, 2014
, the state current tax expense reflected initiatives implemented on the 2013 federal and state tax returns to utilize tax carryforwards that may have expired due to NOL carryforwards from prior periods. State NOL and alternative minimum tax carryforwards remaining after utilization in 2014 will be carried forward to offset future income.
|
(c)
|
For the quarter and
nine
months ended
September 30, 2013
, the state current tax benefit was due to federal and state NOLs which resulted from the bonus depreciation provision of the American Taxpayer Relief Act of 2012.
|
|
Unrealized Gains and Losses on Available-for-sale Securities
|
Defined Benefit Pension, Other Postretirement Items
|
Gains and Losses on Cash Flow Hedge
|
Total
|
||||
Millions
|
|
|
|
|
||||
For the Quarter Ended September 30, 2014
|
|
|
|
|
||||
Beginning Accumulated Other Comprehensive Income (Loss)
|
$0.1
|
$(16.1)
|
$(0.3)
|
$(16.3)
|
||||
Other Comprehensive Income (Loss) Before Reclassifications
|
(0.1
|
)
|
(0.1
|
)
|
0.1
|
|
(0.1
|
)
|
Amounts Reclassified From Accumulated Other Comprehensive Income
|
—
|
|
0.3
|
|
—
|
|
0.3
|
|
Net Other Comprehensive Income (Loss)
|
(0.1
|
)
|
0.2
|
|
0.1
|
|
0.2
|
|
Ending Accumulated Other Comprehensive Loss
|
—
|
|
$(15.9)
|
$(0.2)
|
$(16.1)
|
|||
|
|
|
|
|
||||
For the Quarter Ended September 30, 2013
|
|
|
|
|
||||
Beginning Accumulated Other Comprehensive Loss
|
—
|
|
$(20.7)
|
$(0.3)
|
$(21.0)
|
|||
Other Comprehensive Income (Loss) Before Reclassifications
|
$0.3
|
—
|
|
(0.1
|
)
|
0.2
|
|
|
Amounts Reclassified From Accumulated Other Comprehensive Income (Loss)
|
(0.8)
|
0.3
|
—
|
|
(0.5)
|
|||
Net Other Comprehensive Income (Loss)
|
(0.5)
|
0.3
|
(0.1)
|
(0.3)
|
||||
Ending Accumulated Other Comprehensive Loss
|
$(0.5)
|
$(20.4)
|
$(0.4)
|
$(21.3)
|
|
Quarter Ended
|
Quarter Ended
|
||
Amount Reclassified from Accumulated Other Comprehensive Loss
|
September 30,
|
September 30,
|
||
|
2014
|
2013
|
||
Millions
|
|
|
||
Unrealized Gains on Available-for-sale Securities
(a)
|
—
|
|
$1.4
|
|
Income Taxes
(b)
|
—
|
|
(0.6
|
)
|
Total, Net of Income Taxes
|
—
|
|
$0.8
|
|
|
|
|
||
Amortization of Defined Benefit Pension and Other Postretirement Items
|
|
|
||
Prior Service Costs
(c)
|
$0.1
|
$0.1
|
||
Actuarial Gains and Losses
(c)
|
(0.6
|
)
|
(0.7
|
)
|
Total
|
(0.5
|
)
|
(0.6
|
)
|
Income Taxes
(b)
|
0.2
|
|
0.3
|
|
Total, Net of Income Taxes
|
$(0.3)
|
$(0.3)
|
||
Total Reclassifications
|
$(0.3)
|
$0.5
|
(a)
|
Included in Other Income (Expense) – Other on the Consolidated Statement of Income.
|
(b)
|
Included in Income Tax Expense on the Consolidated Statement of Income.
|
(c)
|
Defined benefit pension and other postretirement benefit items excluded from our Regulated Operations are recognized in accumulated other comprehensive loss and are subsequently reclassified out of accumulated other comprehensive loss as components of net periodic pension and other postretirement benefit expense. (See Note 14. Pension and Other Postretirement Benefit Plans.)
|
|
Unrealized Gains and Losses on Available-for-sale Securities
|
Defined Benefit Pension, Other Postretirement Items
|
Gains and Losses on Cash Flow Hedge
|
Total
|
||||
Millions
|
|
|
|
|
||||
For the Nine Months Ended September 30, 2014
|
|
|
|
|
||||
Beginning Accumulated Other Comprehensive Loss
|
$(0.1)
|
$(16.7)
|
$(0.3)
|
$(17.1)
|
||||
Other Comprehensive Income Before Reclassifications
|
0.2
|
|
(0.1
|
)
|
0.1
|
|
0.2
|
|
Amounts Reclassified From Accumulated Other Comprehensive Income (Loss)
|
(0.1
|
)
|
0.9
|
|
—
|
|
0.8
|
|
Net Other Comprehensive Income
|
0.1
|
|
0.8
|
|
0.1
|
|
1.0
|
|
Ending Accumulated Other Comprehensive Loss
|
—
|
|
$(15.9)
|
$(0.2)
|
$(16.1)
|
|||
|
|
|
|
|
||||
For the Nine Months Ended September 30, 2013
|
|
|
|
|
||||
Beginning Accumulated Other Comprehensive Loss
|
$(0.1)
|
$(21.5)
|
$(0.4)
|
$(22.0)
|
||||
Other Comprehensive Income Before Reclassifications
|
0.9
|
|
—
|
|
—
|
|
0.9
|
|
Amounts Reclassified From Accumulated Other Comprehensive Income (Loss)
|
(1.3
|
)
|
1.1
|
|
—
|
|
(0.2
|
)
|
Net Other Comprehensive Income (Loss)
|
(0.4
|
)
|
1.1
|
|
—
|
|
0.7
|
|
Ending Accumulated Other Comprehensive Loss
|
$(0.5)
|
$(20.4)
|
$(0.4)
|
$(21.3)
|
|
Nine Months Ended
|
Nine Months Ended
|
||
Amount Reclassified from Accumulated Other Comprehensive Loss
|
September 30,
|
September 30,
|
||
|
2014
|
2013
|
||
Millions
|
|
|
||
Unrealized Gains on Available-for-sale Securities
(a)
|
$0.2
|
$2.2
|
||
Income Taxes
(b)
|
(0.1
|
)
|
(0.9
|
)
|
Total, Net of Income Taxes
|
$0.1
|
$1.3
|
||
|
|
|
||
Amortization of Defined Benefit Pension and Other Postretirement Items
|
|
|
||
Prior Service Costs
(c)
|
$0.3
|
$0.2
|
||
Actuarial Gains and Losses
(c)
|
(1.8
|
)
|
(2.1
|
)
|
Total
|
(1.5
|
)
|
(1.9
|
)
|
Income Taxes
(b)
|
0.6
|
|
0.8
|
|
Total, Net of Income Taxes
|
$(0.9)
|
$(1.1)
|
||
Total Reclassifications
|
$(0.8)
|
$0.2
|
(a)
|
Included in Other Income (Expense) – Other on the Consolidated Statement of Income.
|
(b)
|
Included in Income Tax Expense on the Consolidated Statement of Income.
|
(c)
|
Defined benefit pension and other postretirement benefit items excluded from our Regulated Operations are recognized in accumulated other comprehensive loss and are subsequently reclassified out of accumulated other comprehensive loss as components of net periodic pension and other postretirement benefit expense. (See Note 14. Pension and Other Postretirement Benefit Plans.)
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
|
||||||||||
Reconciliation of Basic and Diluted
|
|
|
Dilutive
|
|
|
|
|
|
Dilutive
|
|
|
||||||||||
Earnings Per Share
|
Basic
|
|
Securities
|
|
Diluted
|
|
Basic
|
|
Securities
|
|
Diluted
|
||||||||||
Millions Except Per Share Amounts
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the Quarter Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income Attributable to ALLETE
|
|
$41.6
|
|
|
|
|
|
$41.6
|
|
|
|
$25.2
|
|
|
|
|
|
$25.2
|
|
||
Average Common Shares
|
42.9
|
|
|
—
|
|
|
42.9
|
|
|
39.8
|
|
|
0.1
|
|
|
39.9
|
|
||||
Earnings Per Share
|
|
$0.97
|
|
|
|
|
|
$0.97
|
|
|
|
$0.63
|
|
|
|
|
|
$0.63
|
|
||
For the Nine Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net Income Attributable to ALLETE
|
|
$91.9
|
|
|
|
|
|
$91.9
|
|
|
|
$71.7
|
|
|
|
|
|
$71.7
|
|
||
Average Common Shares
|
42.1
|
|
|
0.2
|
|
|
42.3
|
|
|
39.4
|
|
|
0.1
|
|
|
39.5
|
|
||||
Earnings Per Share
|
|
$2.18
|
|
|
|
|
|
$2.17
|
|
|
|
$1.82
|
|
|
|
|
|
$1.81
|
|
|
Pension
|
|
Other
Postretirement
|
||||||||||||
Components of Net Periodic Benefit Expense (Income)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Millions
|
|
|
|
|
|
|
|
||||||||
For the Quarter Ended September 30,
|
|
|
|
|
|
|
|
||||||||
Service Cost
|
|
$2.0
|
|
|
|
$2.4
|
|
|
|
$0.9
|
|
|
|
$0.9
|
|
Interest Cost
|
7.5
|
|
|
6.5
|
|
|
1.8
|
|
|
1.7
|
|
||||
Expected Return on Plan Assets
|
(9.6
|
)
|
|
(8.8
|
)
|
|
(2.5
|
)
|
|
(2.4
|
)
|
||||
Amortization of Prior Service Costs (Credits)
|
0.1
|
|
|
0.1
|
|
|
(0.7
|
)
|
|
(0.6
|
)
|
||||
Amortization of Net Loss
|
3.6
|
|
|
5.4
|
|
|
0.1
|
|
|
0.4
|
|
||||
Net Periodic Benefit Expense (Income)
|
|
$3.6
|
|
|
|
$5.6
|
|
|
$(0.4)
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
||||||||
For the Nine Months Ended September 30,
|
|
|
|
|
|
|
|
||||||||
Service Cost
|
|
$6.2
|
|
|
|
$7.4
|
|
|
|
$2.6
|
|
|
|
$2.9
|
|
Interest Cost
|
22.4
|
|
|
19.5
|
|
|
5.5
|
|
|
5.1
|
|
||||
Expected Return on Plan Assets
|
(28.7
|
)
|
|
(26.4
|
)
|
|
(7.7
|
)
|
|
(7.3
|
)
|
||||
Amortization of Prior Service Costs (Credits)
|
0.2
|
|
|
0.2
|
|
|
(1.9
|
)
|
|
(1.9
|
)
|
||||
Amortization of Net Loss
|
10.7
|
|
|
16.1
|
|
|
0.3
|
|
|
1.2
|
|
||||
Net Periodic Benefit Expense (Income)
|
|
$10.8
|
|
|
|
$16.8
|
|
|
$(1.2)
|
|
—
|
|
•
|
Expanding our renewable energy supply;
|
•
|
Providing energy conservation initiatives for our customers and engaging in other demand side efforts;
|
•
|
Improving efficiency of our energy generating facilities;
|
•
|
Supporting research of technologies to reduce carbon emissions from generation facilities and carbon sequestration efforts; and
|
•
|
Evaluating and developing less carbon intensive future generating assets such as efficient and flexible natural gas generating facilities.
|
•
|
Major wind investments in North Dakota. Our Bison Wind Energy Center has 292 MW of nameplate capacity with an additional 205 MW under construction. (See
Renewable Energy.
)
|
•
|
Planned installation of approximately
$300 million
in emissions control technology at our Boswell Unit 4 to further reduce emissions of SO
2
, particulates and mercury. (See
Boswell Mercury Emission Reduction Plan.
)
|
•
|
Planning for the proposed GNTL to deliver hydroelectric power from northern Manitoba by 2020. (See
Transmission.
)
|
•
|
The conversion of Laskin from coal to natural gas in the second quarter of 2015.
|
•
|
Retiring Taconite Harbor Unit 3, one of three coal-fired units at Taconite Harbor, in the second quarter of 2015.
|
|
|
|
|
|
Residential
|
|
|
Non-residential
|
|
Summary of Development Projects (100% Owned)
|
|
Acres
(a)
|
|
|
Units
(b)
|
|
|
Sq. Ft.
(b, c)
|
|
Current Development Projects
|
|
|
|
|
|
|
|||
Town Center
|
|
958
|
|
|
2,412
|
|
|
2,236,700
|
|
Palm Coast Park
|
|
3,777
|
|
|
3,554
|
|
|
3,096,800
|
|
Total Current Development Projects
|
|
4,735
|
|
|
5,966
|
|
|
5,333,500
|
|
|
|
|
|
|
|
|
|||
Planned Development Project
|
|
|
|
|
|
|
|||
Ormond Crossings
|
|
2,914
|
|
|
2,950
|
|
|
3,215,000
|
|
Other
|
|
|
|
|
|
|
|||
Lake Swamp Wetland Mitigation Project
|
|
3,044
|
|
|
(d)
|
|
|
(d)
|
|
Total of Development Projects
|
|
10,693
|
|
|
8,916
|
|
|
8,548,500
|
|
(a)
|
Acreage amounts are approximate and shown on a gross basis, including wetlands.
|
(b)
|
Units and square footage are estimated. Density at build out may differ from these estimates.
|
(c)
|
Depending on the project, non-residential includes retail commercial, non-retail commercial, office, industrial, warehouse, storage and institutional.
|
(d)
|
The Lake Swamp wetland mitigation bank is a permitted, regionally significant wetlands mitigation bank. Wetland mitigation credits will be used at Ormond Crossings and are available-for-sale to developers of other projects that are located in the bank’s service area.
|
|
September 30,
2014 |
|
|
%
|
|
December 31,
2013 |
|
|
%
|
||
Millions
|
|
|
|
|
|
|
|
||||
ALLETE Equity
|
|
$1,529.2
|
|
|
53
|
|
|
$1,342.9
|
|
|
55
|
Non-Controlling Interest
|
1.5
|
|
|
—
|
|
—
|
|
|
—
|
||
Long-Term Debt (Including Current Maturities)
|
1,374.5
|
|
|
47
|
|
1,110.2
|
|
|
45
|
||
Short-Term Debt
|
2.7
|
|
|
—
|
|
—
|
|
|
—
|
||
|
|
$2,907.9
|
|
|
100
|
|
|
$2,453.1
|
|
|
100
|
For the Nine Months Ended September 30,
|
2014
|
|
|
2013
|
|
||
Millions
|
|
|
|
||||
Cash and Cash Equivalents at Beginning of Period
|
|
$97.3
|
|
|
|
$80.8
|
|
Cash Flows from (used for)
|
|
|
|
||||
Operating Activities
|
212.1
|
|
|
188.9
|
|
||
Investing Activities
|
(458.5
|
)
|
|
(195.0
|
)
|
||
Financing Activities
|
299.6
|
|
|
89.8
|
|
||
Change in Cash and Cash Equivalents
|
53.2
|
|
|
83.7
|
|
||
Cash and Cash Equivalents at End of Period
|
|
$150.5
|
|
|
|
$164.5
|
|
|
|
ALLETE, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
November 3, 2014
|
|
/s/ Steven Q. DeVinck
|
|
|
Steven Q. DeVinck
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 3, 2014
|
|
/s/ Steven W. Morris
|
|
|
Steven W. Morris
|
|
|
Controller
|
Designation
|
Dated as of
|
First Supplemental Indenture
|
March 1, 1949
|
Second Supplemental Indenture
|
July 1, 1951
|
Third Supplemental Indenture
|
March 1, 1957
|
Fourth Supplemental Indenture
|
January 1, 1968
|
Fifth Supplemental Indenture
|
April 1, 1971
|
Sixth Supplemental Indenture
|
August 1, 1975
|
Seventh Supplemental Indenture
|
September 1, 1976
|
Eighth Supplemental Indenture
|
September 1, 1977
|
Ninth Supplemental Indenture
|
April 1, 1978
|
Tenth Supplemental Indenture
|
August 1, 1978
|
Eleventh Supplemental Indenture
|
December 1, 1982
|
Twelfth Supplemental Indenture
|
April 1, 1987
|
Thirteenth Supplemental Indenture
|
March 1, 1992
|
Fourteenth Supplemental Indenture
|
June 1, 1992
|
Fifteenth Supplemental Indenture
|
July 1, 1992
|
Sixteenth Supplemental Indenture
|
July 1, 1992
|
Seventeenth Supplemental Indenture
|
February 1, 1993
|
Eighteenth Supplemental Indenture
|
July 1, 1993
|
Nineteenth Supplemental Indenture
|
February 1, 1997
|
Twentieth Supplemental Indenture
|
November 1, 1997
|
Twenty-first Supplemental Indenture
|
October 1, 2000
|
Twenty-second Supplemental Indenture
|
July 1, 2003
|
Twenty-third Supplemental Indenture
|
August 1, 2004
|
Twenty-fourth Supplemental Indenture
|
March 1, 2005
|
Twenty-fifth Supplemental Indenture
|
December 1, 2005
|
Twenty-sixth Supplemental Indenture
|
October 1, 2006
|
Twenty-seventh Supplemental Indenture
|
February 1, 2008
|
Twenty-eighth Supplemental Indenture
|
May 1, 2008
|
Twenty-ninth Supplemental Indenture
|
November 1, 2008
|
Thirtieth Supplemental Indenture
|
January 1, 2009
|
Thirty-first Supplemental Indenture
|
February 1, 2010
|
Thirty-second Supplemental Indenture
|
August 1, 2010
|
Thirty-third Supplemental Indenture
|
July 1, 2012
|
Thirty-fourth Supplemental Indenture
|
April 1, 2013
|
Thirty-fifth Supplemental Indenture
|
March 1, 2014
|
Thirty-sixth Supplemental Indenture
|
June 1, 2014
|
Series
|
Principal
Amount
Issued
|
Principal
Amount
Outstanding
|
|
3-1/8% Series due 1975
|
$26,000,000
|
|
None
|
3-1/8% Series due 1979
|
4,000,000
|
|
None
|
3-5/8% Series due 1981
|
10,000,000
|
|
None
|
4-3/4% Series due 1987
|
12,000,000
|
|
None
|
6-1/2% Series due 1998
|
18,000,000
|
|
None
|
8‑1/8% Series due 2001
|
23,000,000
|
|
None
|
10‑1/2% Series due 2005
|
35,000,000
|
|
None
|
8.70% Series due 2006
|
35,000,000
|
|
None
|
8.35% Series due 2007
|
50,000,000
|
|
None
|
9-1/4% Series due 2008
|
50,000,000
|
|
None
|
Pollution Control Series A
|
111,000,000
|
|
None
|
Industrial Development Series A
|
2,500,000
|
|
None
|
Industrial Development Series B
|
1,800,000
|
|
None
|
Industrial Development Series C
|
1,150,000
|
|
None
|
Pollution Control Series B
|
13,500,000
|
|
None
|
Pollution Control Series C
|
2,000,000
|
|
None
|
Pollution Control Series D
|
3,600,000
|
|
None
|
7-3/4% Series due 1994
|
55,000,000
|
|
None
|
7-3/8% Series due March 1, 1997
|
60,000,000
|
|
None
|
7-3/4% Series due June 1, 2007
|
55,000,000
|
|
None
|
7-1/2% Series due August 1, 2007
|
35,000,000
|
|
None
|
Pollution Control Series E
|
111,000,000
|
|
None
|
7% Series due March 1, 2008
|
50,000,000
|
|
None
|
6-1/4% Series due July 1, 2003
|
25,000,000
|
|
None
|
7% Series due February 15, 2007
|
60,000,000
|
|
None
|
6.68% Series due November 15, 2007
|
20,000,000
|
|
None
|
Floating Rate Series due October 20, 2003
|
250,000,000
|
|
None
|
Collateral Series A
|
255,000,000
|
|
None
|
Pollution Control Series F
|
111,000,000
|
|
None
|
5.28% Series due August 1, 2020
|
35,000,000
|
|
35,000,000
|
5.69% Series due March 1, 2036
|
50,000,000
|
|
50,000,000
|
5.99% Series due February 1, 2027
|
60,000,000
|
|
60,000,000
|
4.86% Series due April 1, 2013
|
60,000,000
|
|
None
|
6.02% Series due May 1, 2023
|
75,000,000
|
|
75,000,000
|
6.94% Series due January 15, 2014
|
18,000,000
|
|
None
|
7.70% Series due January 15, 2016
|
20,000,000
|
|
20,000,000
|
8.17% Series due January 15, 2019
|
42,000,000
|
|
42,000,000
|
4.85% Series due April 15, 2021
|
15,000,000
|
|
15,000,000
|
Series
|
Principal
Amount
Issued
|
Principal
Amount
Outstanding
|
|
5.10% Series due April 15, 2025
|
30,000,000
|
|
30,000,000
|
6.00% Series due April 15, 2040
|
35,000,000
|
|
35,000,000
|
4.90% Series due October 15, 2025
|
30,000,000
|
|
30,000,000
|
5.82% Series due April 15, 2040
|
45,000,000
|
|
45,000,000
|
3.20% Series due July 15, 2026
|
75,000,000
|
|
75,000,000
|
4.08% Series due July 15, 2042
|
85,000,000
|
|
85,000,000
|
1.83% Series due April 15, 2018
|
50,000,000
|
|
50,000,000
|
3.30% Series due October 15, 2028
|
40,000,000
|
|
40,000,000
|
4.21% Series due October 15, 2043
|
60,000,000
|
|
60,000,000
|
3.69% Series due March 15, 2024
|
60,000,000
|
|
60,000,000
|
4.95% Series due March 15, 2044
|
40,000,000
|
|
40,000,000
|
3.40% Series due July 15, 2022
|
75,000,000
|
|
75,000,000
|
5.05% Series due July 15, 2044
|
40,000,000
|
|
40,000,000
|
By
|
/s/ Steven Q. DeVinck
|
|
Steven Q. DeVinck
|
|
Chief Financial Officer and
|
|
Senior Vice President-Business Support
|
Attest:
|
/s/ Deborah A. Amberg
|
|
Deborah A. Amberg
|
|
Senior Vice President, General Counsel
|
|
and Secretary
|
By
|
/s/ Laurence J. O'Brien
|
|
Laurence J. O'Brien
|
|
Vice President
|
Attest:
|
/s/ Thomas Hacker
|
|
Thomas Hacker
|
|
Vice President
|
/s/ Philip L. Watson
|
L.S.
|
Philip L. Watson
|
|
|
/s/ Arsala Kidwal
|
|
/s/ Glenn G. McKeever
|
|
|
/s/ Jodi M. Nash
|
|
Jodi M. Nash
|
|
Notary Public - Minnesota
|
|
My Commission Expires Jan. 31, 2020
|
|
/s/ Jodi M. Nash
|
|
Jodi M. Nash
|
|
Notary Public - Minnesota
|
|
My Commission Expires Jan. 31, 2020
|
|
/s/ Danny Lee
|
|
Danny Lee, Notary Public
|
|
State of New York, NO. 01LE6161129
|
|
Qualified in New York County
|
|
Commission Expires February 20, 2015
|
|
/s/ Danny Lee
|
|
Danny Lee, Notary Public
|
|
State of New York, NO. 01LE6161129
|
|
Qualified in New York County
|
|
Commission Expires February 20, 2015
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ended
September 30, 2014
, of ALLETE;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 3, 2014
|
|
/s/ Alan R. Hodnik
|
|
|
Alan R. Hodnik
|
|
|
Chairman, President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ended
September 30, 2014
, of ALLETE;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 3, 2014
|
|
/s/ Steven Q. DeVinck
|
|
|
Steven Q. DeVinck
|
|
|
Senior Vice President and Chief Financial Officer
|
1.
|
The Quarterly Report on Form 10-Q of ALLETE for the period ended
September 30, 2014
, (Report) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of ALLETE.
|
Date: November 3, 2014
|
|
|
|
|
|
/s/ Alan R. Hodnik
|
|
|
|
Alan R. Hodnik
|
|
|
|
Chairman, President and Chief Executive Officer
|
|
Date: November 3, 2014
|
|
|
|
|
|
/s/ Steven Q. DeVinck
|
|
|
|
Steven Q. DeVinck
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
Mine or Operating Name/MSHA Identification Number
|
Section 104 S&S Citations (#)
|
Section 104(b) Orders (#)
|
Section 104(d) Citations and Orders (#)
|
Section 110(b)(2) Violations (#)
|
Section 107(a) Orders (#)
|
Total Dollar Value of MSHA Assessments Proposed ($)
|
Total Number of Mining Related Fatalities (#)
|
Received Notice of Pattern of Violation Under Section 104(e) (yes/no)
|
Received Notice of Potential to Have Pattern Under Section 104(e) (yes/no)
|
Legal Actions Pending as of Last Day of Period (#)
|
Legal Actions Initiated During Period (#)
|
Legal Actions Resolved During Period (#)
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|
Center Mine / 3200218
|
—
|
—
|
—
|
—
|
—
|
$434
|
—
|
No
|
No
|
—
|
—
|
—
|
|
|
Exhibit 99
|
For Release:
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November 3, 2014
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|
Investor Contact:
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Tim Thorp
|
|
|
218-723-3953
|
|
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tthorp@allete.com
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|
|
|
|
NEWS
|
|
|
|
Quarter Ended
|
Nine Months Ended
|
||||||
|
September 30,
|
September 30,
|
||||||
|
2014
|
2013
|
2014
|
2013
|
||||
|
|
|
|
|
||||
Operating Revenue
|
$288.9
|
$251.0
|
$846.1
|
$750.4
|
||||
|
|
|
|
|
||||
Operating Expenses
|
|
|
|
|
||||
Fuel and Purchased Power
|
88.9
|
80.5
|
268.7
|
245.7
|
||||
Operating and Maintenance
|
105.7
|
102.7
|
340.6
|
311.2
|
||||
Depreciation
|
33.5
|
29.4
|
99.5
|
86.3
|
||||
Total Operating Expenses
|
228.1
|
212.6
|
708.8
|
643.2
|
||||
|
|
|
|
|
||||
Operating Income
|
60.8
|
38.4
|
137.3
|
107.2
|
||||
|
|
|
|
|
||||
Other Income (Expense)
|
|
|
|
|
||||
Interest Expense
|
(13.2
|
)
|
(12.7
|
)
|
(39.5
|
)
|
(37.8
|
)
|
Equity Earnings in ATC
|
5.3
|
4.9
|
15.6
|
15.1
|
||||
Other
|
2.1
|
3.3
|
6.0
|
7.5
|
||||
Total Other Expense
|
(5.8
|
)
|
(4.5
|
)
|
(17.9
|
)
|
(15.2
|
)
|
|
|
|
|
|
||||
Income Before Non-Controlling Interest and Income Taxes
|
55.0
|
33.9
|
119.4
|
92.0
|
||||
Income Tax Expense
|
13.4
|
8.7
|
27.1
|
20.3
|
||||
Net Income
|
41.6
|
25.2
|
92.3
|
71.7
|
||||
Less: Non-Controlling Interest in Subsidiaries
|
—
|
|
—
|
|
0.4
|
|
—
|
|
Net Income Attributable to ALLETE
|
$41.6
|
$25.2
|
$91.9
|
$71.7
|
||||
|
|
|
|
|
||||
Average Shares of Common Stock
|
|
|
|
|
||||
Basic
|
42.9
|
|
39.8
|
|
42.1
|
|
39.4
|
|
Diluted
|
42.9
|
|
39.9
|
|
42.3
|
|
39.5
|
|
|
|
|
|
|
||||
Basic Earnings Per Share of Common Stock
|
$0.97
|
$0.63
|
$2.18
|
$1.82
|
||||
Diluted Earnings Per Share of Common Stock
|
$0.97
|
$0.63
|
$2.17
|
$1.81
|
||||
|
|
|
|
|
||||
Dividends Per Share of Common Stock
|
$0.49
|
$0.475
|
$1.47
|
$1.425
|
|
Sept. 30,
|
Dec. 31,
|
|
|
Sept. 30,
|
Dec. 31,
|
|
2014
|
2013
|
|
|
2014
|
2013
|
Assets
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
Cash and Cash Equivalents
|
$150.5
|
$97.3
|
|
Current Liabilities
|
$286.8
|
$230.2
|
Other Current Assets
|
207.3
|
209.7
|
|
Long-Term Debt
|
1,289.2
|
1,083.0
|
Property, Plant and Equipment - Net
|
3,121.5
|
2,576.5
|
|
Deferred Income Taxes
|
509.7
|
479.1
|
Regulatory Assets
|
277.1
|
263.8
|
|
Regulatory Liabilities
|
103.1
|
81.0
|
Investment in ATC
|
120.7
|
114.6
|
|
Defined Benefit Pension & Other
Postretirement Benefit Plans
|
116.8
|
133.4
|
Other Investments
|
116.4
|
146.3
|
|
Other Non-Current Liabilities
|
231.6
|
127.2
|
Other Non-Current Assets
|
74.4
|
68.6
|
|
Shareholders’ Equity
|
1,530.7
|
1,342.9
|
Total Assets
|
$4,067.9
|
$3,476.8
|
|
Total Liabilities and Shareholders’ Equity
|
$4,067.9
|
$3,476.8
|
|
Quarter Ended
|
Nine Months Ended
|
|||||
ALLETE, Inc.
|
September 30,
|
September 30,
|
|||||
Income (Loss)
|
2014
|
2013
|
2014
|
2013
|
|||
Millions
|
|
|
|
|
|||
Regulated Operations
|
$41.2
|
$24.6
|
$92.6
|
$73.0
|
|||
Investments and Other
|
0.4
|
0.6
|
|
(0.7
|
)
|
(1.3
|
)
|
Net Income Attributable to ALLETE
|
$41.6
|
$25.2
|
$91.9
|
$71.7
|
|||
Diluted Earnings Per Share
|
$0.97
|
$0.63
|
$2.17
|
$1.81
|
Kilowatt-hours Sold
|
|
|
|
|
Millions
|
|
|
|
|
Regulated Utility
|
|
|
|
|
Retail and Municipals
|
|
|
|
|
Residential
|
244
|
259
|
891
|
864
|
Commercial
|
369
|
379
|
1,097
|
1,091
|
Municipals
|
203
|
242
|
643
|
741
|
Industrial
|
1,911
|
1,894
|
5,515
|
5,508
|
Total Retail and Municipal
|
2,727
|
2,774
|
8,146
|
8,204
|
Other Power Suppliers
|
751
|
547
|
2,082
|
1,748
|
Total Regulated Utility
|
3,478
|
3,321
|
10,228
|
9,952
|
Non-regulated Energy Operations
|
28
|
26
|
92
|
90
|
Total Kilowatt-hours Sold
|
3,506
|
3,347
|
10,320
|
10,042
|
Regulated Utility Revenue
|
|
|
|
|
Millions
|
|
|
|
|
Regulated Utility Revenue
|
|
|
|
|
Retail and Municipals
|
|
|
|
|
Residential
|
$26.4
|
$26.1
|
$92.4
|
$86.0
|
Commercial
|
34.9
|
33.4
|
100.8
|
95.9
|
Municipals
|
14.6
|
17.7
|
45.6
|
50.0
|
Industrial
|
117.8
|
107.8
|
337.7
|
317.9
|
Total Retail and Municipals
|
193.7
|
185.0
|
576.5
|
549.8
|
Other Power Suppliers
|
31.2
|
21.1
|
84.9
|
65.8
|
Other
|
30.9
|
20.3
|
88.2
|
68.0
|
Total Regulated Utility Revenue
|
$255.8
|
$226.4
|
$749.6
|
$683.6
|