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
March 31, 2018
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¨
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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 ______________
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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.)
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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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Emerging Growth Company
¨
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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 regulated utility plant additions during construction periods
|
ALLETE
|
ALLETE, Inc.
|
ALLETE Clean Energy
|
ALLETE Clean Energy, Inc. and its subsidiaries
|
ALLETE Properties
|
ALLETE Properties, LLC and its subsidiaries
|
ALLETE Transmission Holdings
|
ALLETE Transmission Holdings, Inc.
|
ATC
|
American Transmission Company LLC
|
Bison
|
Bison Wind Energy Center
|
BNI Energy
|
BNI Energy, Inc. and its subsidiary
|
Boswell
|
Boswell Energy Center
|
Camp Ripley
|
Camp Ripley Solar Array
|
CO
2
|
Carbon Dioxide
|
Company
|
ALLETE, Inc. and its subsidiaries
|
CIP
|
Conservation Improvement Program
|
Cliffs
|
Cleveland-Cliffs Inc.
|
CSAPR
|
Cross-State Air Pollution Rule
|
DC
|
Direct Current
|
EIS
|
Environmental Impact Statement
|
EITE
|
Energy-Intensive Trade-Exposed
|
EPA
|
United States Environmental Protection Agency
|
ERP Iron Ore
|
ERP Iron Ore, LLC
|
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
|
Generally Accepted Accounting Principles in the United States of America
|
GHG
|
Greenhouse Gases
|
GNTL
|
Great Northern Transmission Line
|
Invest Direct
|
ALLETE’s Direct Stock Purchase and Dividend Reinvestment Plan
|
IRP
|
Integrated Resource Plan
|
Item ___
|
Item ___ of this Form 10-Q
|
kV
|
Kilovolt(s)
|
kW / kWh
|
Kilowatt(s) / Kilowatt-hour(s)
|
Laskin
|
Laskin Energy Center
|
Magnetation
|
Magnetation, LLC
|
Manitoba Hydro
|
Manitoba Hydro-Electric Board
|
MATS
|
Mercury and Air Toxics Standards
|
Mesabi Metallics
|
Mesabi Metallics Company, LLC (formerly Essar Steel Minnesota, LLC)
|
Minnesota Power
|
An operating division of ALLETE, Inc.
|
Minnkota Power
|
Minnkota Power Cooperative, Inc.
|
MISO
|
Midcontinent Independent System Operator, Inc.
|
Abbreviation or Acronym
|
Term
|
Montana-Dakota Utilities
|
Montana-Dakota Utilities Co., a division of MDU Resources Group, Inc.
|
MPCA
|
Minnesota Pollution Control Agency
|
MPUC
|
Minnesota Public Utilities Commission
|
MW / MWh
|
Megawatt(s) / Megawatt-hour(s)
|
NAAQS
|
National Ambient Air Quality Standards
|
NDPSC
|
North Dakota Public Service Commission
|
NOL
|
Net Operating Loss
|
NO
2
|
Nitrogen Dioxide
|
NO
X
|
Nitrogen Oxides
|
Northern States Power
|
Northern States Power Company, a subsidiary of Xcel Energy Inc.
|
Northshore Mining
|
Northshore Mining Company, a wholly-owned subsidiary of Cleveland-Cliffs Inc.
|
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 District
|
Palm Coast Park Community Development District in Florida
|
PolyMet
|
PolyMet Mining Corp.
|
PPA / PSA
|
Power Purchase Agreement / Power Sales Agreement
|
PPACA
|
Patient Protection and Affordable Care Act of 2010
|
PSCW
|
Public Service Commission of Wisconsin
|
SEC
|
Securities and Exchange Commission
|
Silver Bay Power
|
Silver Bay Power Company, a wholly-owned subsidiary of Cleveland-Cliffs Inc.
|
SO
2
|
Sulfur Dioxide
|
Square Butte
|
Square Butte Electric Cooperative, a North Dakota cooperative corporation
|
SWL&P
|
Superior Water, Light and Power Company
|
Taconite Harbor
|
Taconite Harbor Energy Center
|
TCJA
|
Tax Cuts and Job Act of 2017 (Public Law 115-97)
|
Tenaska
|
Tenaska Energy, Inc. and Tenaska Energy Holdings, LLC
|
Thomson
|
Thomson Energy Center
|
Tonka Water
|
Tonka Equipment Company
|
Town Center District
|
Town Center at Palm Coast Community Development District in Florida
|
UPM Blandin
|
UPM, Blandin Paper Mill owned by UPM-Kymmene Corporation
|
U.S.
|
United States of America
|
U.S. Water Services
|
U.S. Water Services Holding Company and its subsidiaries
|
USS Corporation
|
United States Steel Corporation
|
WTG
|
Wind Turbine Generator
|
•
|
our ability to successfully implement our strategic objectives;
|
•
|
global and domestic economic conditions affecting us or our customers;
|
•
|
changes in and compliance with laws and regulations;
|
•
|
changes in tax rates or policies or in rates of inflation;
|
•
|
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;
|
•
|
changes in operating expenses and capital expenditures and our ability to raise revenues from our customers in regulated rates or sales price increases at our Energy Infrastructure and Related Services businesses;
|
•
|
the impacts of commodity prices on ALLETE and our customers;
|
•
|
our ability to attract and retain qualified, skilled and experienced personnel;
|
•
|
effects of emerging technology;
|
•
|
war, acts of terrorism and cyberattacks;
|
•
|
our ability to manage expansion and integrate acquisitions;
|
•
|
population growth rates and demographic patterns;
|
•
|
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;
|
•
|
effects of competition, including competition for retail and wholesale customers;
|
•
|
effects of restructuring initiatives in the electric industry;
|
•
|
the impacts on our Regulated Operations segment of climate change and future regulation to restrict the emissions of GHG;
|
•
|
effects of increased deployment of distributed low-carbon electricity generation resources;
|
•
|
the impacts of laws and regulations related to renewable and distributed generation;
|
•
|
pricing, availability and transportation of fuel and other commodities and the ability to recover the costs of such commodities;
|
•
|
our current and potential industrial and municipal customers’ ability to execute announced expansion plans;
|
•
|
real estate market conditions where our legacy Florida real estate investment is located may not improve;
|
•
|
the success of efforts to realize value from, invest in, and develop new opportunities in, our Energy Infrastructure and Related Services businesses; and
|
•
|
factors affecting our Energy Infrastructure and Related Services businesses, including fluctuations in the volume of customer orders, unanticipated cost increases, changes in legislation and regulations impacting the industries in which the customers served operate, the effects of weather, creditworthiness of customers, ability to obtain materials required to perform services, and changing market conditions.
|
|
March 31,
2018 |
|
|
December 31,
2017 |
|
||
Millions
|
|
|
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and Cash Equivalents
|
|
$98.5
|
|
|
|
$98.9
|
|
Accounts Receivable (Less Allowance of $2.1 and $2.1)
|
128.2
|
|
|
135.1
|
|
||
Inventories – Net
|
143.1
|
|
|
95.9
|
|
||
Prepayments and Other
|
33.8
|
|
|
37.6
|
|
||
Total Current Assets
|
403.6
|
|
|
367.5
|
|
||
Property, Plant and Equipment – Net
|
3,786.1
|
|
|
3,822.4
|
|
||
Regulatory Assets
|
376.0
|
|
|
384.7
|
|
||
Investment in ATC
|
120.1
|
|
|
118.7
|
|
||
Other Investments
|
52.8
|
|
|
53.1
|
|
||
Goodwill and Intangible Assets – Net
|
224.5
|
|
|
225.9
|
|
||
Other Non-Current Assets
|
109.0
|
|
|
107.7
|
|
||
Total Assets
|
|
$5,072.1
|
|
|
|
$5,080.0
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts Payable
|
|
$88.1
|
|
|
|
$136.3
|
|
Accrued Taxes
|
60.5
|
|
|
50.0
|
|
||
Accrued Interest
|
14.6
|
|
|
17.6
|
|
||
Long-Term Debt Due Within One Year
|
106.2
|
|
|
64.1
|
|
||
Other
|
130.2
|
|
|
83.2
|
|
||
Total Current Liabilities
|
399.6
|
|
|
351.2
|
|
||
Long-Term Debt
|
1,396.5
|
|
|
1,439.2
|
|
||
Deferred Income Taxes
|
229.7
|
|
|
230.5
|
|
||
Regulatory Liabilities
|
516.0
|
|
|
532.0
|
|
||
Defined Benefit Pension and Other Postretirement Benefit Plans
|
175.2
|
|
|
191.8
|
|
||
Other Non-Current Liabilities
|
257.8
|
|
|
267.1
|
|
||
Total Liabilities
|
2,974.8
|
|
|
3,011.8
|
|
||
Commitments, Guarantees and Contingencies (Note 13)
|
|
|
|
||||
Shareholders’ Equity
|
|
|
|
||||
Common Stock Without Par Value, 80.0 Shares Authorized, 51.3 and 51.1 Shares Issued and Outstanding
|
1,407.4
|
|
|
1,401.4
|
|
||
Accumulated Other Comprehensive Loss
|
(27.9
|
)
|
|
(22.6
|
)
|
||
Retained Earnings
|
717.8
|
|
|
689.4
|
|
||
Total Shareholders’ Equity
|
2,097.3
|
|
|
2,068.2
|
|
||
Total Liabilities and Shareholders’ Equity
|
|
$5,072.1
|
|
|
|
$5,080.0
|
|
|
Three Months Ended
|
|||||
|
March 31,
|
|||||
|
2018
|
2017
|
||||
Millions Except Per Share Amounts
|
|
|
||||
Operating Revenue
|
|
|
||||
Contracts with Customers – Utility
|
|
$270.2
|
|
|
$281.6
|
|
Contracts with Customers – Non-utility
|
82.0
|
|
78.1
|
|
||
Other – Non-utility
|
6.0
|
|
5.9
|
|
||
Total Operating Revenue
|
358.2
|
|
365.6
|
|
||
Operating Expenses
|
|
|
||||
Fuel, Purchased Power and Gas – Utility
|
100.9
|
|
96.6
|
|
||
Transmission Services – Utility
|
18.4
|
|
16.6
|
|
||
Cost of Sales – Non-utility
|
32.9
|
|
31.5
|
|
||
Operating and Maintenance
|
86.5
|
|
84.4
|
|
||
Depreciation and Amortization
|
45.8
|
|
50.5
|
|
||
Taxes Other than Income Taxes
|
16.3
|
|
14.4
|
|
||
Total Operating Expenses
|
300.8
|
|
294.0
|
|
||
Operating Income
|
57.4
|
|
71.6
|
|
||
Other Income (Expense)
|
|
|
||||
Interest Expense
|
(16.9
|
)
|
(17.2
|
)
|
||
Equity Earnings in ATC
|
4.7
|
|
6.1
|
|
||
Other
|
2.1
|
|
1.6
|
|
||
Total Other Expense
|
(10.1
|
)
|
(9.5
|
)
|
||
Income Before Income Taxes
|
47.3
|
|
62.1
|
|
||
Income Tax Expense (Benefit)
|
(3.7
|
)
|
13.1
|
|
||
Net Income
|
|
$51.0
|
|
|
$49.0
|
|
Average Shares of Common Stock
|
|
|
||||
Basic
|
51.2
|
|
50.2
|
|
||
Diluted
|
51.4
|
|
50.4
|
|
||
Basic Earnings Per Share of Common Stock
|
|
$1.00
|
|
|
$0.97
|
|
Diluted Earnings Per Share of Common Stock
|
|
$0.99
|
|
|
$0.97
|
|
Dividends Per Share of Common Stock
|
|
$0.56
|
|
|
$0.535
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017
|
||||
Millions
|
|
|
|
||||
Net Income
|
|
$51.0
|
|
|
|
$49.0
|
|
Other Comprehensive Income (Loss)
|
|
|
|
||||
Unrealized Gain (Loss) on Securities
|
|
|
|
||||
Net of Income Tax Expense of $– and $0.3
|
(0.1
|
)
|
|
0.3
|
|
||
Defined Benefit Pension and Other Postretirement Benefit Plans
|
|
|
|
||||
Net of Income Tax Expense of $0.1 and $0.1
|
0.4
|
|
|
0.2
|
|
||
Total Other Comprehensive Income
|
0.3
|
|
|
0.5
|
|
||
Total Comprehensive Income
|
|
$51.3
|
|
|
|
$49.5
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017
|
||||
Millions
|
|
|
|
||||
Operating Activities
|
|
|
|
||||
Net Income
|
|
$51.0
|
|
|
|
$49.0
|
|
AFUDC – Equity
|
(0.3
|
)
|
|
(0.2
|
)
|
||
Income from Equity Investments – Net of Dividends
|
(0.5
|
)
|
|
(1.5
|
)
|
||
Change in Fair Value of Contingent Consideration
|
—
|
|
|
(0.4
|
)
|
||
Loss (Gain) on Sales of Investments and Property, Plant and Equipment
|
(0.1
|
)
|
|
0.1
|
|
||
Depreciation Expense
|
44.5
|
|
|
49.2
|
|
||
Amortization of PSAs
|
(6.0
|
)
|
|
(5.9
|
)
|
||
Amortization of Other Intangible Assets and Other Assets
|
2.8
|
|
|
2.9
|
|
||
Deferred Income Tax Expense
|
(4.4
|
)
|
|
13.0
|
|
||
Share-Based and ESOP Compensation Expense
|
1.7
|
|
|
1.8
|
|
||
Defined Benefit Pension and Postretirement Benefit Expense
|
2.2
|
|
|
2.5
|
|
||
Provision for Interim Rate Refund
|
4.4
|
|
|
—
|
|
||
Provision for Tax Reform Refund
|
7.5
|
|
|
—
|
|
||
Bad Debt Expense (Recoveries)
|
0.3
|
|
|
(0.4
|
)
|
||
Changes in Operating Assets and Liabilities
|
|
|
|
||||
Accounts Receivable
|
6.3
|
|
|
0.1
|
|
||
Inventories
|
(0.3
|
)
|
|
(6.3
|
)
|
||
Prepayments and Other
|
(1.2
|
)
|
|
1.8
|
|
||
Accounts Payable
|
(0.1
|
)
|
|
(11.3
|
)
|
||
Other Current Liabilities
|
17.3
|
|
|
(1.0
|
)
|
||
Cash Contributions to Defined Benefit Pension Plans
|
(15.0
|
)
|
|
(1.7
|
)
|
||
Changes in Regulatory and Other Non-Current Assets
|
3.8
|
|
|
9.6
|
|
||
Changes in Regulatory and Other Non-Current Liabilities
|
7.4
|
|
|
(2.6
|
)
|
||
Cash from Operating Activities
|
121.3
|
|
|
98.7
|
|
||
Investing Activities
|
|
|
|
||||
Proceeds from Sale of Available-for-sale Securities
|
3.3
|
|
|
0.3
|
|
||
Payments for Purchase of Available-for-sale Securities
|
(5.3
|
)
|
|
(0.5
|
)
|
||
Investment in ATC
|
(1.6
|
)
|
|
(3.1
|
)
|
||
Changes to Other Investments
|
2.5
|
|
|
(1.2
|
)
|
||
Additions to Property, Plant and Equipment
|
(88.1
|
)
|
|
(36.7
|
)
|
||
Other Investing Activities
|
0.2
|
|
|
0.1
|
|
||
Cash for Investing Activities
|
(89.0
|
)
|
|
(41.1
|
)
|
||
Financing Activities
|
|
|
|
||||
Proceeds from Issuance of Common Stock
|
4.3
|
|
|
70.6
|
|
||
Changes in Notes Payable
|
—
|
|
|
1.3
|
|
||
Repayments of Long-Term Debt
|
(1.9
|
)
|
|
(26.3
|
)
|
||
Acquisition-Related Contingent Consideration Payments
|
—
|
|
|
(15.1
|
)
|
||
Dividends on Common Stock
|
(28.7
|
)
|
|
(26.9
|
)
|
||
Other Financing Activities
|
(0.2
|
)
|
|
—
|
|
||
Cash from (for) Financing Activities
|
(26.5
|
)
|
|
3.6
|
|
||
Change in Cash, Cash Equivalents and Restricted Cash
|
5.8
|
|
|
61.2
|
|
||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
|
110.1
|
|
|
38.3
|
|
||
Cash, Cash Equivalents and Restricted Cash at End of Period
|
|
$115.9
|
|
|
|
$99.5
|
|
|
Total Shareholders’
Equity
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Common
Stock
|
|||||||
Millions
|
|
|
|
|
|||||||
Balance as of December 31, 2017
|
|
$2,068.2
|
|
|
$689.4
|
|
$(22.6)
|
|
$1,401.4
|
|
|
Adjustments to Opening Balance – Net of Income Taxes
(a)
|
0.5
|
|
6.1
|
|
(5.6
|
)
|
—
|
|
|||
Balance as of January 1, 2018
|
2,068.7
|
|
695.5
|
|
(28.2
|
)
|
1,401.4
|
|
|||
Comprehensive Income
|
|
|
|
|
|||||||
Net Income
|
51.0
|
|
51.0
|
|
—
|
|
—
|
|
|||
Other Comprehensive Income – Net of Income Taxes
|
|
|
|
|
|||||||
Unrealized Loss on Debt Securities
|
(0.1
|
)
|
—
|
|
(0.1
|
)
|
—
|
|
|||
Defined Benefit Pension and Other Postretirement Plans
|
0.4
|
|
—
|
|
0.4
|
|
—
|
|
|||
Total Comprehensive Income
|
51.3
|
|
|
|
|
||||||
Common Stock Issued
|
6.0
|
|
—
|
|
—
|
|
6.0
|
|
|||
Dividends Declared
|
(28.7
|
)
|
(28.7
|
)
|
—
|
|
—
|
|
|||
Balance as of March 31, 2018
|
|
$2,097.3
|
|
|
$717.8
|
|
$(27.9)
|
|
$1,407.4
|
|
(a)
|
Reflects the impacts associated with the recently adopted accounting standards concerning Financial Instruments, Revenue from Contracts with Customers and the Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. (See Note 1. Operations and Significant Accounting Policies.)
|
Cash, Cash Equivalents and Restricted Cash
|
March 31,
2018 |
|
|
December 31,
2017 |
|
|
March 31,
2017 |
|
|
December 31,
2016 |
|
||||
Millions
|
|
|
|
|
|
|
|
||||||||
Cash and Cash Equivalents
|
|
$98.5
|
|
|
|
$98.9
|
|
|
|
$81.8
|
|
|
|
$27.5
|
|
Restricted Cash included in Prepayments and Other
|
8.8
|
|
|
2.6
|
|
|
9.1
|
|
|
2.2
|
|
||||
Restricted Cash included in Other Non-Current Assets
|
8.6
|
|
|
8.6
|
|
|
8.6
|
|
|
8.6
|
|
||||
Cash, Cash Equivalents and Restricted Cash in the Consolidated Statement of Cash Flows
|
|
$115.9
|
|
|
|
$110.1
|
|
|
|
$99.5
|
|
|
|
$38.3
|
|
Inventories – Net
|
March 31,
2018 |
|
|
December 31,
2017 |
|
||
Millions
|
|
|
|
||||
Fuel
(a)
|
|
$33.8
|
|
|
|
$34.8
|
|
Materials and Supplies
|
46.9
|
|
|
46.5
|
|
||
Construction of Wind Energy Facility
(b)
|
46.9
|
|
|
—
|
|
||
Raw Materials
|
2.8
|
|
|
2.8
|
|
||
Work in Progress
|
4.2
|
|
|
4.2
|
|
||
Finished Goods
|
9.3
|
|
|
8.3
|
|
||
Reserve for Obsolescence
|
(0.8
|
)
|
|
(0.7
|
)
|
||
Total Inventories – Net
|
|
$143.1
|
|
|
|
$95.9
|
|
(a)
|
Fuel consists primarily of coal inventory at Minnesota Power.
|
(b)
|
On February 28, 2018, Montana-Dakota Utilities exercised its option to purchase the Thunder Spirit II wind energy facility upon completion, resulting in a reclassification of the project value from Property, Plant and Equipment – Net to Inventory – Net as ALLETE Clean Energy will no longer own and operate the facility upon completion.
|
Other Non-Current Assets
|
March 31,
2018 |
|
|
December 31,
2017 |
|
||
Millions
|
|
|
|
||||
Contract Assets
(a)
|
|
$31.0
|
|
|
|
$31.6
|
|
Finance Receivable
|
10.9
|
|
|
11.0
|
|
||
Other
|
67.1
|
|
|
65.1
|
|
||
Total Other Non-Current Assets
|
|
$109.0
|
|
|
|
$107.7
|
|
(a)
|
Contract Assets include payments made to customers as an incentive to execute or extend service agreements. The contract payments are being amortized over the term of the respective agreements.
|
Other Current Liabilities
|
March 31,
2018 |
|
|
December 31,
2017 |
|
||
Millions
|
|
|
|
||||
Provision for Interim Rate Refund
(a)
|
|
$28.1
|
|
|
—
|
|
|
PSAs
|
21.5
|
|
|
|
$24.5
|
|
|
Contract Liabilities
(b)
|
20.0
|
|
|
8.7
|
|
||
Provision for Tax Reform Refund
(c)
|
7.5
|
|
|
—
|
|
||
Contingent Consideration
(d)
|
5.5
|
|
|
—
|
|
||
Other
|
47.6
|
|
|
50.0
|
|
||
Total Other Current Liabilities
|
|
$130.2
|
|
|
|
$83.2
|
|
(a)
|
Provision for Interim Rate Refund is expected to be refunded to Minnesota Power’s regulated retail customers in the first quarter of 2019. (See Note 6. Regulatory Matters.)
|
(b)
|
Contract Liabilities include deposits received as a result of entering into contracts with our customers prior to completing our performance obligations.
|
(c)
|
Provision for Tax Reform Refund is deferred as a regulatory liability pending the outcome of regulatory proceedings with the MPUC and PSCW. (See Note 6. Regulatory Matters.)
|
(d)
|
Contingent Consideration relates to the estimated fair value of the earnings-based payment resulting from the U.S. Water Services acquisition. (See Note 5. Fair Value.)
|
Other Non-Current Liabilities
|
March 31,
2018 |
|
|
December 31,
2017 |
|
||
Millions
|
|
|
|
||||
Asset Retirement Obligation
|
|
$122.9
|
|
|
|
$122.7
|
|
PSAs
|
86.3
|
|
|
89.5
|
|
||
Contingent Consideration
(a)
|
—
|
|
|
5.4
|
|
||
Other
|
48.6
|
|
|
49.5
|
|
||
Total Other Non-Current Liabilities
|
|
$257.8
|
|
|
|
$267.1
|
|
(a)
|
Contingent Consideration relates to the estimated fair value of the earnings-based payment resulting from the U.S. Water Services acquisition. (See Note 5. Fair Value.)
|
Three Months Ended March 31,
|
2018
|
|
|
2017
|
|
||
Millions
|
|
|
|
||||
Cash Paid for Interest – Net of Amounts Capitalized
|
|
$19.3
|
|
|
|
$18.9
|
|
Noncash Investing and Financing Activities
|
|
|
|
|
|
||
Decrease in Accounts Payable for Capital Additions to Property, Plant and Equipment
|
$(48.1)
|
|
$(3.5)
|
||||
Reclassification of Property, Plant and Equipment to Inventory
(a)
|
|
$46.9
|
|
|
—
|
|
|
Capitalized Asset Retirement Costs
|
|
$0.8
|
|
|
|
$19.3
|
|
AFUDC–Equity
|
|
$0.3
|
|
|
|
$0.2
|
|
ALLETE Common Stock Contributed to the Pension Plans
|
—
|
|
|
|
$13.5
|
|
(a)
|
On February 28, 2018, Montana-Dakota Utilities exercised its option to purchase the Thunder Spirit II wind energy facility upon completion, resulting in a reclassification of the project value from Property, Plant and Equipment – Net to Inventory – Net as ALLETE Clean Energy will no longer own and operate the facility upon completion.
|
•
|
We have a right to consideration from our customers in an amount that corresponds directly with the value to such customer for performance completed to date; therefore, we may recognize revenue in the amount to which we have a right to invoice.
|
•
|
We do not adjust the promised amount of consideration for the effects of a significant financing component as at contract inception we expect that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less.
|
•
|
Where applicable, we adopted this guidance using the portfolio approach in which contracts that have similar characteristics were reviewed as a portfolio. The effects on the financial statements of applying this guidance to the portfolio would not differ materially from applying the guidance to each individual contract.
|
•
|
We recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that would otherwise have been recognized is one year or less.
|
Other Investments
|
March 31,
2018 |
|
|
December 31,
2017 |
|
||
Millions
|
|
|
|
||||
ALLETE Properties
|
|
$26.0
|
|
|
|
$26.4
|
|
Available-for-sale Securities
(a)
|
21.1
|
|
|
19.1
|
|
||
Cash Equivalents
|
2.0
|
|
|
3.8
|
|
||
Other
|
3.7
|
|
|
3.8
|
|
||
Total Other Investments
|
|
$52.8
|
|
|
|
$53.1
|
|
(a)
|
As of
March 31, 2018
, the aggregate amount of available-for-sale corporate and governmental debt securities maturing in one year or less was
$0.9 million
, in one year to less than three years was
$3.4 million
, in three years to less than five years was
$3.3 million
and in five or more years was
$1.1 million
.
|
Millions
|
|
||
Assets Acquired
|
|
||
Accounts Receivable
|
|
$5.1
|
|
Other Current Assets
|
5.1
|
|
|
Trade Names
(a)
|
0.9
|
|
|
Goodwill
(a)(b)
|
16.9
|
|
|
Other Non-Current Assets
|
0.2
|
|
|
Total Assets Acquired
|
|
$28.2
|
|
Liabilities Assumed
|
|
||
Current Liabilities
|
|
$9.0
|
|
Total Liabilities Assumed
|
|
$9.0
|
|
Net Identifiable Assets Acquired
|
|
$19.2
|
|
(b)
|
Recognized goodwill is attributable to the assembled workforce and anticipated synergies. For tax purposes, the purchase price allocation resulted in
$4.1 million
of deductible goodwill.
|
|
December 31,
2017 |
|
|
Amortization
|
|
March 31,
2018 |
|
||
Millions
|
|
|
|
|
|
||||
Intangible Assets
|
|
|
|
|
|
||||
Definite-Lived Intangible Assets
|
|
|
|
|
|
||||
Customer Relationships
|
|
$54.7
|
|
|
$(1.1)
|
|
|
$53.6
|
|
Developed Technology and Other
(a)
|
6.3
|
|
|
(0.3)
|
|
6.0
|
|
||
Total Definite-Lived Intangible Assets
|
61.0
|
|
|
(1.4)
|
|
59.6
|
|
||
Indefinite-Lived Intangible Assets
|
|
|
|
|
|
||||
Trademarks and Trade Names
|
16.6
|
|
|
n/a
|
|
16.6
|
|
||
Total Intangible Assets
|
|
$77.6
|
|
|
$(1.4)
|
|
|
$76.2
|
|
(a)
|
Developed Technology and Other includes patents, non-compete agreements, land easements and trade names with finite lives.
|
|
Fair Value as of March 31, 2018
|
||||||||||||||
Recurring Fair Value Measures
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
Millions
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investments
(a)
|
|
|
|
|
|
|
|
||||||||
Available-for-sale – Equity Securities
|
|
$12.4
|
|
|
—
|
|
|
—
|
|
|
|
$12.4
|
|
||
Available-for-sale – Corporate and Governmental Debt Securities
|
—
|
|
|
|
$8.7
|
|
|
—
|
|
|
8.7
|
|
|||
Cash Equivalents
|
2.0
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
||||
Total Fair Value of Assets
|
|
$14.4
|
|
|
|
$8.7
|
|
|
—
|
|
|
|
$23.1
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Deferred Compensation
(b)
|
—
|
|
|
|
$20.2
|
|
|
—
|
|
|
|
$20.2
|
|
||
U.S. Water Services Contingent Consideration
(c)
|
—
|
|
|
—
|
|
|
|
$5.5
|
|
|
5.5
|
|
|||
Total Fair Value of Liabilities
|
—
|
|
|
|
$20.2
|
|
|
|
$5.5
|
|
|
|
$25.7
|
|
|
Total Net Fair Value of Assets (Liabilities)
|
|
$14.4
|
|
|
$(11.5)
|
|
$(5.5)
|
|
$(2.6)
|
(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 Other Current Liabilities on the Consolidated Balance Sheet.
|
|
Fair Value as of December 31, 2017
|
||||||||||||||
Recurring Fair Value Measures
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
Millions
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investments
(a)
|
|
|
|
|
|
|
|
||||||||
Available-for-sale – Equity Securities
|
|
$10.2
|
|
|
—
|
|
|
—
|
|
|
|
$10.2
|
|
||
Available-for-sale – Corporate and Governmental Debt Securities
|
—
|
|
|
|
$8.9
|
|
|
—
|
|
|
8.9
|
|
|||
Cash Equivalents
|
3.8
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
||||
Total Fair Value of Assets
|
|
$14.0
|
|
|
|
$8.9
|
|
|
—
|
|
|
|
$22.9
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
(b)
|
|
|
|
|
|
|
|
||||||||
Deferred Compensation
|
—
|
|
|
|
$18.2
|
|
|
—
|
|
|
|
$18.2
|
|
||
U.S. Water Services Contingent Consideration
|
—
|
|
|
—
|
|
|
|
$5.4
|
|
|
5.4
|
|
|||
Total Fair Value of Liabilities
|
—
|
|
|
|
$18.2
|
|
|
|
$5.4
|
|
|
|
$23.6
|
|
|
Total Net Fair Value of Assets (Liabilities)
|
|
$14.0
|
|
|
$(9.3)
|
|
$(5.4)
|
|
$(0.7)
|
(a)
|
Included in Other Investments on the Consolidated Balance Sheet.
|
(b)
|
Included in Other Non-Current Liabilities on the Consolidated Balance Sheet.
|
Recurring Fair Value Measures
|
|
||
Activity in Level 3
|
|
||
Millions
|
|
||
Balance as of December 31, 2017
|
|
$5.4
|
|
Accretion
|
0.1
|
|
|
Balance as of March 31, 2018
|
|
$5.5
|
|
Financial Instruments
|
Carrying Amount
|
|
Fair Value
|
Millions
|
|
|
|
Long-Term Debt, Including Long-Term Debt Due Within One Year
|
|
|
|
March 31, 2018
|
$1,512.2
|
|
$1,583.1
|
December 31, 2017
|
$1,513.3
|
|
$1,627.6
|
Regulatory Assets and Liabilities
|
March 31,
2018 |
|
|
December 31,
2017 |
|
||
Millions
|
|
|
|
||||
Non-Current Regulatory Assets
|
|
|
|
||||
Defined Benefit Pension and Other Postretirement Benefit Plans
|
|
$217.7
|
|
|
|
$220.3
|
|
Income Taxes
|
110.4
|
|
|
112.8
|
|
||
Asset Retirement Obligations
|
30.4
|
|
|
29.6
|
|
||
Manufactured Gas Plant
|
7.8
|
|
|
8.1
|
|
||
PPACA Income Tax Deferral
|
5.0
|
|
|
5.0
|
|
||
Conservation Improvement Program
|
0.2
|
|
|
3.3
|
|
||
Other
|
4.5
|
|
|
5.6
|
|
||
Total Non-Current Regulatory Assets
|
|
$376.0
|
|
|
|
$384.7
|
|
|
|
|
|
||||
Current Regulatory Liabilities
(a)
|
|
|
|
||||
Provision for Interim Rate Refund
(b)
|
|
$28.1
|
|
|
—
|
|
|
Provision for Tax Reform Refund
(c)
|
7.5
|
|
|
—
|
|
||
Total Current Regulatory Liabilities
|
35.6
|
|
|
—
|
|
||
Non-Current Regulatory Liabilities
|
|
|
|
||||
Income Taxes
|
406.2
|
|
|
|
$411.2
|
|
|
Wholesale and Retail Contra AFUDC
|
59.1
|
|
|
57.9
|
|
||
Plant Removal Obligations
|
21.8
|
|
|
20.3
|
|
||
North Dakota Investment Tax Credits
|
14.3
|
|
|
14.1
|
|
||
Cost Recovery Riders
|
11.1
|
|
|
2.2
|
|
||
Provision for Interim Rate Refund
(a)
|
—
|
|
|
23.7
|
|
||
Other
|
3.5
|
|
|
2.6
|
|
||
Total Non-Current Regulatory Liabilities
|
516.0
|
|
|
532.0
|
|
||
Total Regulatory Liabilities
|
|
$551.6
|
|
|
|
$532.0
|
|
(a)
|
Current regulatory liabilities are presented within Other Current Liabilities on the Consolidated Balance Sheet.
|
(b)
|
This amount is expected to be refunded to Minnesota Power’s regulated retail customers in the first quarter of 2019 and includes
$12.9 million
of discounts provided to EITE customers that will be offset against interim rate refunds as of March 31, 2018 (
$8.6 million
as of December 31, 2017). (See 2016 Minnesota General Rate Case and Energy-Intensive Trade‑Exposed Customer Rates.)
|
(c)
|
We have recorded the impact of the federal income tax rate change in 2018 due to the TCJA for Minnesota Power and SWL&P as regulatory liabilities and a reduction in revenue as the benefits of the TCJA are deferred pending the outcome of regulatory proceedings with the MPUC and PSCW. (See Tax Cuts and Jobs Act of 2017.)
|
ALLETE’s Investment in ATC
|
|
||
Millions
|
|
||
Equity Investment Balance as of December 31, 2017
|
|
$118.7
|
|
Cash Investments
|
1.6
|
|
|
Equity in ATC Earnings
|
4.7
|
|
|
Distributed ATC Earnings
|
(5.2
|
)
|
|
Amortization of the Remeasurement of Deferred Income Taxes
(a)
|
0.3
|
|
|
Equity Investment Balance as of March 31, 2018
|
|
$120.1
|
|
March 31, 2018
|
Principal
|
|
|
Unamortized Debt Issuance Costs
|
|
Total
|
|
||
Millions
|
|
|
|
|
|
||||
Short-Term Debt
|
|
$106.6
|
|
|
$(0.4)
|
|
|
$106.2
|
|
Long-Term Debt
|
1,405.6
|
|
|
(9.1)
|
|
1,396.5
|
|
||
Total Debt
|
|
$1,512.2
|
|
|
$(9.5)
|
|
|
$1,502.7
|
|
December 31, 2017
|
Principal
|
|
|
Unamortized Debt Issuance Costs
|
|
Total
|
|
||
Millions
|
|
|
|
|
|
||||
Short-Term Debt
|
|
$64.6
|
|
|
$(0.5)
|
|
|
$64.1
|
|
Long-Term Debt
|
1,448.7
|
|
|
(9.5)
|
|
1,439.2
|
|
||
Total Debt
|
|
$1,513.3
|
|
|
$(10.0)
|
|
|
$1,503.3
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017
|
||||
Millions
|
|
|
|
||||
Current Income Tax Expense
(a)
|
|
|
|
||||
Federal
|
—
|
|
|
—
|
|
||
State
|
|
$0.7
|
|
|
$0.1
|
||
Total Current Income Tax Expense
|
|
$0.7
|
|
|
$0.1
|
||
Deferred Income Tax Expense (Benefit)
|
|
|
|
||||
Federal
(b)
|
$(6.8)
|
|
|
$7.3
|
|
||
State
|
2.6
|
|
|
5.9
|
|
||
Investment Tax Credit Amortization
|
(0.2
|
)
|
|
(0.2
|
)
|
||
Total Deferred Income Tax Expense (Benefit)
|
$(4.4)
|
|
|
$13.0
|
|
||
Total Income Tax Expense (Benefit)
|
$(3.7)
|
|
|
$13.1
|
|
(a)
|
For the
three months ended March 31, 2018, and 2017
, the federal and state current tax expense was minimal due to NOLs which resulted from the bonus depreciation provisions of the Protecting Americans from Tax Hikes Act of 2015, the Tax Increase Prevention Act of 2014 and the American Taxpayer Relief Act of 2012.
|
(b)
|
For the
three months ended March 31, 2018
, the federal tax benefit is primarily due to the reduction of the federal statutory tax rate from
35 percent
to
21 percent
enacted as part of the TCJA, and production tax credits.
|
|
Three Months Ended
|
||||||
Reconciliation of Taxes from Federal Statutory
|
March 31,
|
||||||
Rate to Total Income Tax Expense
|
2018
|
|
2017
|
||||
Millions
|
|
|
|
||||
Income Before Non-Controlling Interest and Income Taxes
|
|
$47.3
|
|
|
|
$62.1
|
|
Statutory Federal Income Tax Rate
|
21
|
%
|
|
35
|
%
|
||
Income Taxes Computed at Statutory Federal Rate
|
|
$9.9
|
|
|
|
$21.7
|
|
Increase (Decrease) in Income Tax Due to:
|
|
|
|
||||
State Income Taxes – Net of Federal Income Tax Benefit
|
2.6
|
|
|
3.9
|
|
||
Production Tax Credits
|
(14.4
|
)
|
|
(13.0
|
)
|
||
Regulatory Differences for Utility Plant
|
(2.5
|
)
|
|
0.1
|
|
||
Other
|
0.7
|
|
|
0.4
|
|
||
Total Income Tax Expense (Benefit)
|
$(3.7)
|
|
|
$13.1
|
|
|
|
|
2018
|
|
|
|
|
|
2017
|
|
|
||||||||||
Reconciliation of Basic and Diluted
|
|
|
Dilutive
|
|
|
|
|
|
Dilutive
|
|
|
||||||||||
Earnings Per Share
|
Basic
|
|
Securities
|
|
Diluted
|
|
Basic
|
|
Securities
|
|
Diluted
|
||||||||||
Millions Except Per Share Amounts
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net Income
|
|
$51.0
|
|
|
|
|
|
$51.0
|
|
|
|
$49.0
|
|
|
|
|
|
$49.0
|
|
||
Average Common Shares
|
51.2
|
|
|
0.2
|
|
|
51.4
|
|
|
50.2
|
|
|
0.2
|
|
|
50.4
|
|
||||
Earnings Per Share
|
|
$1.00
|
|
|
|
|
|
$0.99
|
|
|
|
$0.97
|
|
|
|
|
|
$0.97
|
|
|
Pension
|
|
Other
Postretirement
|
||||||||||||
Components of Net Periodic Benefit Cost
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Millions
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31,
|
|
|
|
|
|
|
|
||||||||
Service Cost
|
|
$2.7
|
|
|
|
$2.5
|
|
|
|
$1.2
|
|
|
|
$1.1
|
|
Interest Cost
(a)
|
7.4
|
|
|
8.1
|
|
|
1.8
|
|
|
1.9
|
|
||||
Expected Return on Plan Assets
(a)
|
(11.0
|
)
|
|
(10.6
|
)
|
|
(2.7
|
)
|
|
(2.6
|
)
|
||||
Amortization of Prior Service Credits
(a)
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
(0.5
|
)
|
||||
Amortization of Net Loss
(a)
|
3.0
|
|
|
2.5
|
|
|
0.2
|
|
|
0.1
|
|
||||
Net Periodic Benefit Cost
|
|
$2.1
|
|
|
|
$2.5
|
|
|
|
$0.1
|
|
|
—
|
|
(a)
|
These components of net periodic benefit cost are included in the line item “Other” under Other Income (Expense) on the Consolidated Statement of Income.
|
•
|
Ozone NAAQS.
All areas of Minnesota currently meet the new standard based on the most recent available ambient monitoring data; however, some areas in the metropolitan Twin Cities and southwest portion of the state are close to exceeding the standard. As a result, voluntary efforts to reduce ground-level ozone continue in the state.
No
additional costs for compliance are anticipated at this time.
|
•
|
Particulate Matter NAAQS.
The EPA has designated the entire state of Minnesota as unclassifiable/attainment; however, Minnesota sources may ultimately be required to reduce their emissions to assist with attainment in neighboring states. In 2016, environmental groups filed a lawsuit against the EPA in the U.S. District Court for the Northern District of California alleging the EPA had failed to fully implement the PM
2.5
standards in certain states, including Minnesota, by not enforcing states’ submittals of required infrastructure implementation plans for the 2012 PM
2.5
NAAQS. The outcome of this litigation is uncertain, and as such, any costs for complying with the final Particulate Matter NAAQS cannot be estimated at this time.
|
•
|
NO
2
NAAQS.
Ambient monitoring data indicates that Minnesota is likely in compliance with the one-hour NAAQS standard for NO
2
. In July 2017, the EPA proposed retaining the current one-hour and annual NO
2
NAAQS. Additional compliance costs for the one-hour NO
2
NAAQS are
not
expected at this time.
|
•
|
SO
2
NAAQS.
In 2015, the EPA finalized the SO
2
data requirements rule (DRR) for the 2010 one-hour NAAQS to assist the states in implementing the standard. The MPCA initially informed Minnesota Power that compliant SO
2
modeling completed at Minnesota Power's Boswell and Taconite Harbor facilities would satisfy the DRR obligations and no further modeling would be required; however, the DRR also require facilities have federally-enforceable permit limits at which the one-hour SO
2
NAAQS compliance was modeled by January 2017. Taconite Harbor was issued an amended air permit in 2016, containing the new modeling limits at that facility. The MPCA did not meet the January 2017, deadline to amend the Boswell permit. The MPCA is in discussions with the EPA on alternate compliance pathways to use existing completed modeling at current limits. In August 2017, the EPA proposed retaining the current primary SO
2
one-hour NAAQS. Compliance costs for the one-hour SO
2
NAAQS are not expected to be material.
|
•
|
Expanding our renewable power supply;
|
•
|
Providing energy conservation initiatives for our customers and engaging in other demand side management efforts;
|
•
|
Improving efficiency of our generating facilities;
|
•
|
Supporting research of technologies to reduce carbon emissions from generating facilities and carbon sequestration efforts; and
|
•
|
Evaluating and developing less carbon intensive future generating assets such as efficient and flexible natural gas-fired generating facilities.
|
|
Three Months Ended
|
|||||
|
March 31,
|
|||||
|
2018
|
2017
|
||||
Millions
|
|
|
||||
Operating Revenue
(a)
|
|
|
||||
Regulated Operations
|
|
|
||||
Residential
|
|
$40.7
|
|
|
$39.5
|
|
Commercial
|
36.6
|
|
38.2
|
|
||
Municipal
|
14.0
|
|
18.2
|
|
||
Industrial
|
114.9
|
|
121.7
|
|
||
Other Power Suppliers
|
43.7
|
|
41.2
|
|
||
Other
|
20.3
|
|
22.8
|
|
||
Total Regulated Operations
|
270.2
|
|
281.6
|
|
||
|
|
|
||||
Energy Infrastructure and Related Services
|
|
|
||||
|
|
|
||||
ALLETE Clean Energy
|
|
|
||||
Long-term PSA
|
18.6
|
|
17.8
|
|
||
Other
|
6.0
|
|
5.9
|
|
||
Total ALLETE Clean Energy
|
24.6
|
|
23.7
|
|
||
|
|
|
||||
U.S. Water Services
|
|
|
||||
Point-in-Time
|
22.3
|
|
21.8
|
|
||
Contract
|
9.5
|
|
8.9
|
|
||
Capital Project
|
6.4
|
|
1.4
|
|
||
Total U.S. Water Services
|
38.2
|
|
32.1
|
|
||
|
|
|
||||
Corporate and Other
|
|
|
||||
Long-term Contract
|
20.0
|
|
22.1
|
|
||
Other
|
5.2
|
|
6.1
|
|
||
Total Corporate and Other
|
25.2
|
|
28.2
|
|
||
Total Operating Revenue
|
|
$358.2
|
|
|
$365.6
|
|
Net Income (Loss)
|
|
|
||||
Regulated Operations
|
|
$43.9
|
|
|
$43.5
|
|
|
|
|
||||
Energy Infrastructure and Related Services
|
|
|
||||
ALLETE Clean Energy
|
8.1
|
|
6.7
|
|
||
U.S. Water Services
|
(1.4
|
)
|
(0.3
|
)
|
||
|
|
|
||||
Corporate and Other
|
0.4
|
|
(0.9
|
)
|
||
Total Net Income
|
|
$51.0
|
|
|
$49.0
|
|
(a)
|
With the adoption of new revenue recognition guidance, the Company has enhanced the presentation of business segment Operating Revenue. (See Note 1. Operations and Significant Accounting Policies.)
|
|
March 31,
2018 |
|
December 31,
2017 |
|
||
Millions
|
|
|
||||
Assets
|
|
|
||||
Regulated Operations
|
|
$3,877.0
|
|
|
$3,886.6
|
|
|
|
|
||||
Energy Infrastructure and Related Services
|
|
|
||||
ALLETE Clean Energy
|
620.4
|
|
600.5
|
|
||
U.S. Water Services
|
287.4
|
|
292.4
|
|
||
|
|
|
||||
Corporate and Other
|
287.3
|
|
300.5
|
|
||
Total Assets
|
|
$5,072.1
|
|
|
$5,080.0
|
|
Three Months Ended March 31,
|
2018
|
|
2017
|
|
||
Millions
|
|
|
||||
Operating Revenue – Utility
|
|
$270.2
|
|
|
$281.6
|
|
Fuel, Purchased Power and Gas – Utility
|
100.9
|
|
96.6
|
|
||
Transmission Services – Utility
|
18.4
|
|
16.6
|
|
||
Operating and Maintenance
|
55.5
|
|
56.1
|
|
||
Depreciation and Amortization
|
34.3
|
|
39.7
|
|
||
Taxes Other than Income Taxes
|
15.1
|
|
13.2
|
|
||
Operating Income
|
46.0
|
|
59.4
|
|
||
Interest Expense
|
(14.9
|
)
|
(14.0
|
)
|
||
Equity Earnings in ATC
|
4.7
|
|
6.1
|
|
||
Other Income
|
1.6
|
|
1.3
|
|
||
Income Before Income Taxes
|
37.4
|
|
52.8
|
|
||
Income Tax Expense (Benefit)
|
(6.5
|
)
|
9.3
|
|
||
Net Income
|
|
$43.9
|
|
|
$43.5
|
|
Three Months Ended March 31,
|
2018
|
|
2017
|
|
||
Millions
|
|
|
||||
Operating Revenue
|
|
$24.6
|
|
|
$23.7
|
|
Net Income
|
|
$8.1
|
|
|
$6.7
|
|
|
Three Months Ended March 31,
|
|||||||||
|
2018
|
2017
|
||||||||
Production and Operating Revenue
|
kWh
|
Revenue
|
kWh
|
Revenue
|
||||||
Millions
|
|
|
|
|
||||||
Wind Energy Facilities
|
|
|
|
|
||||||
Lake Benton
|
70.4
|
|
|
$3.4
|
|
75.8
|
|
|
$3.5
|
|
Storm Lake II
|
47.9
|
|
2.9
|
|
48.2
|
|
2.9
|
|
||
Condon
|
34.3
|
|
2.8
|
|
24.2
|
|
2.0
|
|
||
Storm Lake I
|
62.5
|
|
3.3
|
|
69.7
|
|
3.4
|
|
||
Chanarambie/Viking
|
78.7
|
|
3.9
|
|
80.9
|
|
3.9
|
|
||
Armenia Mountain
|
91.5
|
|
8.3
|
|
87.7
|
|
8.0
|
|
||
Total Production and Operating Revenue
|
385.3
|
|
|
$24.6
|
|
386.5
|
|
|
$23.7
|
|
Three Months Ended March 31,
|
2018
|
|
2017
|
|
||
Millions
|
|
|
||||
Operating Revenue
|
|
$38.2
|
|
|
$32.1
|
|
Net Loss
|
$(1.4)
|
$(0.3)
|
|
March 31,
2018 |
|
|
%
|
|
December 31,
2017 |
|
|
%
|
||
Millions
|
|
|
|
|
|
|
|
||||
Shareholders’ Equity
|
|
$2,097.3
|
|
|
58
|
|
|
$2,068.2
|
|
|
58
|
Long-Term Debt (Including Long-Term Debt Due Within One Year)
|
1,512.2
|
|
|
42
|
|
1,513.3
|
|
|
42
|
||
|
|
$3,609.5
|
|
|
100
|
|
|
$3,581.5
|
|
|
100
|
For the Three Months Ended March 31,
|
2018
|
|
|
2017
|
|
||
Millions
|
|
|
|
||||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
|
|
$110.1
|
|
|
|
$38.3
|
|
Cash Flows from (used for)
|
|
|
|
||||
Operating Activities
|
121.3
|
|
|
98.7
|
|
||
Investing Activities
|
(89.0
|
)
|
|
(41.1
|
)
|
||
Financing Activities
|
(26.5
|
)
|
|
3.6
|
|
||
Change in Cash, Cash Equivalents and Restricted Cash
|
5.8
|
|
|
61.2
|
|
||
Cash, Cash Equivalents and Restricted Cash at End of Period
|
|
$115.9
|
|
|
|
$99.5
|
|
Credit Ratings
|
Standard & Poor’s
|
Moody’s
|
Issuer Credit Rating
|
BBB+
|
A3
|
Commercial Paper
|
A-2
|
P-2
|
First Mortgage Bonds
|
(a)
|
A1
|
(a)
|
Not rated by Standard & Poor’s.
|
Exhibit
Number
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
101.INS
|
|
XBRL Instance
|
101.SCH
|
|
XBRL Schema
|
101.CAL
|
|
XBRL Calculation
|
101.DEF
|
|
XBRL Definition
|
101.LAB
|
|
XBRL Label
|
101.PRE
|
|
XBRL Presentation
|
|
|
ALLETE, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
May 2, 2018
|
|
/s/ Robert J. Adams
|
|
|
Robert J. Adams
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
May 2, 2018
|
|
/s/ Steven W. Morris
|
|
|
Steven W. Morris
|
|
|
Vice President, Controller and Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
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
|
Thirty-seventh Supplemental Indenture
|
September 1, 2014
|
Thirty-eighth Supplemental Indenture
|
September 1, 2015
|
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
|
None
|
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
|
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
|
3.02% Series due September 15, 2021
|
60,000,000
|
60,000,000
|
3.74% Series due September 15, 2029
|
50,000,000
|
50,000,000
|
4.39% Series due September 15, 2044
|
50,000,000
|
50,000,000
|
2.80% Series due September 15, 2020
|
40,000,000
|
40,000,000
|
3.86% Series due September 16, 2030
|
60,000,000
|
60,000,000
|
|
|
|
Base Salary
|
$
|
|
|
Times
|
|
|
|
Award Opportunity (percent of base salary)
|
%
|
|
|
Equals
|
|
|
|
Target Award
|
$
|
Goal Performance Level
|
Payout as Percent of
Target Award
|
Award Amount
|
Superior
|
200%
|
$
|
Target
|
100%
|
$
|
Threshold
|
45%
|
$
|
Below Threshold
|
0%
|
$
|
|
|
|
|
|
|
|
Goal
|
|
|
|
|
|
|
|
|
Weighting
|
|
|
Financial Goals
|
|
|
|
|
|
||
|
|
Net Income
|
50%
|
|||||
|
|
Cash from Operating Activities
|
|
25%
|
||||
|
|
|
|
|
|
|
|
|
|
Strategic & Operational Positioning Goals
|
|
|
|
25%
|
|||
|
|
|
|
|
|
|
100%
|
Base Salary
|
$
|
|
|
Times
|
|
|
|
Award Opportunity (percent of base salary)
|
%
|
|
|
Equals
|
|
|
|
Target Award
|
$
|
Goal Performance Level
|
Payout as Percent of
Target Award
|
Award Amount
|
Superior
|
200%
|
$
|
Target
|
100%
|
$
|
Threshold
|
37.5%
|
$
|
Below Threshold
|
0%
|
$
|
|
|
|
|
|
|
|
Goal
|
|
|
|
|
|
|
|
|
Weighting
|
|
|
Financial Goals
|
|
|
|
|
|
||
|
|
ALLETE Net Income
|
15%
|
|||||
|
|
Superior Water Light & Power Net Income
|
|
55%
|
||||
|
|
|
|
|
|
|
|
|
|
Strategic & Operational Positioning Goals
|
|
|
|
30%
|
|||
|
|
|
|
|
|
|
100%
|
Base Salary
|
$
|
|
|
Times
|
|
|
|
Award Opportunity (percent of base salary)
|
%
|
|
|
Equals
|
|
|
|
Target Award
|
$
|
Goal Performance Level
|
Payout as Percent of
Target Award
|
Award Amount
|
Superior
|
200%
|
$
|
Target
|
100%
|
$
|
Threshold
|
45%
|
$
|
Below Threshold
|
0%
|
$
|
|
|
|
|
|
|
|
Goal
|
|
|
|
|
|
|
|
|
Weighting
|
|
|
Financial Goals
|
|
|
|
|
|
||
|
|
Net Income
|
50%
|
|||||
|
|
Cash from Operating Activities
|
|
25%
|
||||
|
|
|
|
|
|
|
|
|
|
Strategic & Operational Positioning Goals
|
|
|
|
25%
|
|||
|
|
|
|
|
|
|
100%
|
a)
|
to file an employment-related charge or complaint with any federal, state, or local government agency with authority over employment-related matters (examples of such government agencies include the United States Department of Labor, the federal Equal Employment Opportunity Commission, and the Minnesota Department of Human Rights, etc.); provided, however, if Executive does file a charge or complaint with a government agency, or if someone else files on Executive’s behalf or for Executive’s benefit, and if it would otherwise be covered by the Waiver ad Release, Executive waives and releases all individual rights, remedies, claims, and causes of action, known and unknown, contingent or absolute, Executive might have against the Company to receive any damages, attorneys’ fees, costs, disbursements, and other monetary and personal relief; also, if the charge or complaint is followed by a lawsuit brought by Executive or by someone else on Executive’s behalf, Executive
waives and releases
|
b)
|
to testify, assist, or otherwise participate in any investigation, hearing, or other proceeding conducted by any government agency;
|
c)
|
to bring claims under the Minnesota Workers’ Compensation Act, as amended, pertaining to workers’ compensation benefits; except, however, Executive waives the right to bring claims under Minn. Stat. § 176.82; or
|
d)
|
to challenge in court the validity of Executive’s waiver and release under the Age Discrimination in Employment Act of 1967, as amended; however, Executive has no reason to believe that the above Waiver and Release under that Act is invalid or unenforceable, it being in the best interests of the parties that such wavier and release is valid and enforceable.
|
a)
|
Executive’s election to sign this Agreement is wholly voluntary, made of Executive’s own free will, free from coercion by the Company or any of its officers or employees and with full knowledge that it is intended, to the maximum extent permitted by law, as a complete and final release and waiver of any and all claims;
|
b)
|
Executive will receive from the Company consideration, meaning something of value beyond that which Executive was already entitled to receive prior to signing this Agreement;
|
c)
|
Executive has been advised by the Company in writing (and given the opportunity) to consult with an attorney before signing this Agreement;
|
d)
|
Executive has made these decisions only after Executive has had the opportunity to carefully consider the benefits available and the ramifications of the Waiver and Release and Executive has not relied on any explanations, statements or promises made by the Company or its agents or attorneys other than as set forth in this Agreement.
|
e)
|
Executive has also been advised by the Company (and given the opportunity) to discuss this Release with family and other advisors, as Executive deems appropriate;
|
f)
|
Executive has been given a period of at least <<[Select:] twenty-one (21) or forty-five (45)>> calendar days from the day that Executive received this Agreement, not counting the day on which Executive received it, to consider whether Executive wished to participate and to sign this Agreement. If Executive signs this Agreement before the end of the <<[Select:] 21-day or 45-day>> period, it will be Executive’s voluntary decision to do so because Executive decided that additional time was not not to decide whether to sign this Agreement; and
|
g)
|
Executive may revoke this Agreement and rescind the Waiver and Release of claims within fifteen (15) days of the date of this Agreement, (the “Reconsideration Period”) Executive understands this Agreement does not become effective until the 15-day period lapses without such revocation by Executive, and that no payment under the Plan will be made to Executive unless and until this Agreement is effective.
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ended
March 31, 2018
, 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: May 2, 2018
|
|
/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
March 31, 2018
, 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: May 2, 2018
|
|
/s/ Robert J. Adams
|
|
|
Robert J. Adams
|
|
|
Senior Vice President and Chief Financial Officer
|
1.
|
The Quarterly Report on Form 10-Q of ALLETE for the period ended
March 31, 2018
, (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: May 2, 2018
|
|
|
|
|
|
/s/ Alan R. Hodnik
|
|
|
|
Alan R. Hodnik
|
|
|
|
Chairman, President and Chief Executive Officer
|
|
Date: May 2, 2018
|
|
|
|
|
|
/s/ Robert J. Adams
|
|
|
|
Robert J. Adams
|
|
|
|
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 (#)
|
|
Center Mine / 3200218
|
—
|
—
|
—
|
—
|
—
|
$208
|
—
|
No
|
No
|
—
|
—
|
—
|
|
|
Exhibit 99
|
For Release:
|
May 2, 2018
|
|
Investor Contact:
|
Vince Meyer
|
|
|
218-723-3952
|
|
|
vmeyer@allete.com
|
|
|
|
|
NEWS
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||
|
March 31,
|
|||||
|
2018
|
2017
|
||||
Operating Revenue
|
|
|
||||
Contracts with Customers – Utility
|
|
$270.2
|
|
|
$281.6
|
|
Contracts with Customers – Non-utility
|
82.0
|
|
78.1
|
|
||
Other – Non-utility
|
6.0
|
|
5.9
|
|
||
Total Operating Revenue
|
358.2
|
|
365.6
|
|
||
Operating Expenses
|
|
|
||||
Fuel, Purchased Power and Gas – Utility
|
100.9
|
|
96.6
|
|
||
Transmission Services – Utility
|
18.4
|
|
16.6
|
|
||
Cost of Sales – Non-utility
|
32.9
|
|
31.5
|
|
||
Operating and Maintenance
|
86.5
|
|
84.4
|
|
||
Depreciation and Amortization
|
45.8
|
|
50.5
|
|
||
Taxes Other than Income Taxes
|
16.3
|
|
14.4
|
|
||
Total Operating Expenses
|
300.8
|
294.0
|
||||
Operating Income
|
57.4
|
71.6
|
||||
Other Income (Expense)
|
|
|
||||
Interest Expense
|
(16.9
|
)
|
(17.2
|
)
|
||
Equity Earnings in ATC
|
4.7
|
|
6.1
|
|
||
Other
|
2.1
|
|
1.6
|
|
||
Total Other Expense
|
(10.1
|
)
|
(9.5
|
)
|
||
Income Before Income Taxes
|
47.3
|
62.1
|
||||
Income Tax Expense (Benefit)
|
(3.7
|
)
|
13.1
|
|||
Net Income
|
$51.0
|
$49.0
|
||||
Average Shares of Common Stock
|
|
|
||||
Basic
|
51.2
|
|
50.2
|
|
||
Diluted
|
51.4
|
|
50.4
|
|
||
Basic Earnings Per Share of Common Stock
|
$1.00
|
$0.97
|
||||
Diluted Earnings Per Share of Common Stock
|
$0.99
|
$0.97
|
||||
Dividends Per Share of Common Stock
|
$0.56
|
$0.535
|
|
Mar. 31,
|
Dec. 31,
|
|
|
Mar. 31,
|
Dec. 31,
|
|
2018
|
2017
|
|
|
2018
|
2017
|
Assets
|
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
Cash and Cash Equivalents
|
$98.5
|
$98.9
|
|
Current Liabilities
|
$399.6
|
$351.2
|
Other Current Assets
|
305.1
|
268.6
|
|
Long-Term Debt
|
1,396.5
|
1,439.2
|
Property, Plant and Equipment – Net
|
3,786.1
|
3,822.4
|
|
Deferred Income Taxes
|
229.7
|
230.5
|
Regulatory Assets
|
376.0
|
384.7
|
|
Regulatory Liabilities
|
516.0
|
532.0
|
Investment in ATC
|
120.1
|
118.7
|
|
Defined Benefit Pension and Other Postretirement Benefit Plans
|
175.2
|
191.8
|
Other Investments
|
52.8
|
53.1
|
|
Other Non-Current Liabilities
|
257.8
|
267.1
|
Goodwill and Intangibles – Net
|
224.5
|
225.9
|
|
Shareholders’ Equity
|
2,097.3
|
2,068.2
|
Other Non-Current Assets
|
109.0
|
107.7
|
|
|
|
|
Total Assets
|
$5,072.1
|
$5,080.0
|
|
Total Liabilities and Shareholders’ Equity
|
$5,072.1
|
$5,080.0
|
|
Three Months Ended
|
|||
ALLETE, Inc.
|
March 31,
|
|||
Income (Loss)
|
2018
|
2017
|
||
Millions
|
|
|
||
Regulated Operations
|
$43.9
|
$43.5
|
||
|
|
|
||
Energy Infrastructure and Related Services
|
|
|
||
ALLETE Clean Energy
|
8.1
|
|
6.7
|
|
U.S. Water Services
|
(1.4
|
)
|
(0.3
|
)
|
|
|
|
||
Corporate and Other
|
0.4
|
|
(0.9
|
)
|
Net Income Attributable to ALLETE
|
$51.0
|
$49.0
|
||
Diluted Earnings Per Share
|
$0.99
|
$0.97
|
Regulated Utility Revenue
|
|
|
Millions
|
|
|
Regulated Utility Revenue
|
|
|
Retail and Municipal Electric Revenue
|
|
|
Residential
|
$35.5
|
$34.7
|
Commercial
|
34.0
|
36.0
|
Industrial
|
113.3
|
120.5
|
Municipal
|
14.0
|
18.2
|
Total Retail and Municipal Electric Revenue
|
196.8
|
209.4
|
Other Power Suppliers
|
43.7
|
41.2
|
Other (Includes Water and Gas Revenue)
|
29.7
|
31.0
|
Total Regulated Utility Revenue
|
$270.2
|
$281.6
|