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EXHIBIT 99
[ALLETE LOGO]
For Release: February
10, 2005
CONTACT: Eric
Olson
218-723-3947
eolson@allete.com
INVESTOR Tim
Thorp
CONTACT:
218-723-3953
tthorp@allete.com
NEWS
ALLETE ANNOUNCES STRONG 2004 earnings RESULTS;
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EXPECTS EARNINGS PER SHARE GROWTH OF 45 TO 50 PERCENT in 2005
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DULUTH, Minn.--ALLETE, Inc. (NYSE: ALE)
today reported 2004 income from
continuing operations of $39.1 million.
Excluding a one-time charge for the
early repayment of debt and a one-time gain
realized by an employee stock
ownership fund, income from continuing
operations was $38.5 million, an increase
of 29 percent over 2003.
"Our company went through a significant
transformation in 2004 and at the same
time performed exceptionally well," said
ALLETE President and CEO Don Shippar.
"We are stronger as a result, and from what
we've accomplished are poised for
substantial earnings growth in 2005."
Net income from ALLETE's REGULATED UTILITY
business grew by 13 percent in 2004
and kilowatthour sales to Minnesota Power's
industrial customers were 8 percent
higher than last year. Higher benefit and
maintenance expenses were more than
offset by other lower expenses during
2004.
NONREGULATED ENERGY OPERATIONS posted a
slight loss in 2004. The net income
contributions of the Taconite Harbor energy
facility and BNI Coal were offset by
losses incurred at the Kendall County
facility. ALLETE recently announced that
it has reached an agreement to transfer its
Kendall County purchased power
agreement to a subsidiary of Constellation
Energy. The transfer is expected to
close in April 2005.
Net income from ALLETE's REAL ESTATE
business increased by 4 percent in 2004.
Demand for Florida property remained strong
through the year. "We are excited
about our future earnings prospects in this
business," said Shippar.
Year-end results for ALLETE's OTHER
business segment improved by $7.8 million in
2004 over 2003, mainly due to reduced
interest expense resulting from lower debt
balances. The aforementioned fourth quarter
gain of $11.5 million related to the
fourth quarter sale of securities held by
an employee stock ownership plan
offset a third quarter charge of $10.9
million for the early repayment of debt.
During 2004, ALLETE spun off its Automotive
Services business and substantially
completed the sale of its Water Services
business. Net income from these
DISCONTINUED OPERATIONS was $73.1 million
in 2004. On February 4, 2005, ALLETE
closed on the sale of its last wastewater
system.
For the quarter, income from continuing
operations was 5 percent higher than the
fourth quarter of 2003, excluding the
previously mentioned one-time gain.
Increased electric sales and lower interest
and other expenses offset outage
expenses at the Square Butte and the
Taconite Harbor energy facilities.
"We expect ALLETE's earnings per share from
continuing operations to grow by 45
to 50 percent in 2005," said Shippar. The
company expects the increase to come
from continued strong real estate sales,
lower interest expense, and the
transfer of the Kendall County purchased
power agreement. The earnings
expectation excludes an anticipated
one-time charge related to the Kendall
County agreement.
(more)
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ALLETE NEWS RELEASE
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ALLETE's corporate headquarters are located
in Duluth, Minnesota. ALLETE
provides energy services in the upper
Midwest and has significant real estate
holdings in Florida. More information about
the company is available on ALLETE's
Web site located at www.allete.com.
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THE STATEMENTS CONTAINED IN THIS RELEASE
AND STATEMENTS THAT ALLETE MAY MAKE
ORALLY IN CONNECTION WITH THIS RELEASE THAT
ARE NOT HISTORICAL FACTS, ARE
FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS
MAY DIFFER MATERIALLY FROM THOSE
PROJECTED IN THE FORWARD-LOOKING
STATEMENTS. THESE FORWARD-LOOKING STATEMENTS
INVOLVE RISKS AND UNCERTAINTIES AND
INVESTORS ARE DIRECTED TO THE RISKS
DISCUSSED IN DOCUMENTS FILED BY ALLETE WITH
THE SECURITIES AND EXCHANGE
COMMISSION.
###
[RECYCLE LOGO] RECYCLED PAPER
ALLETE - 30 WEST
SUPERIOR STREET, DULUTH, MINNESOTA 55802
WWW.ALLETE.COM
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ALLETE NEWS RELEASE
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ALLETE, INC.
CONSOLIDATED STATEMENT OF INCOME
FOR THE PERIODS ENDED DECEMBER 31, 2004 AND 2003
Millions Except Per Share Amounts
<CAPTION>
QUARTER ENDED
YEAR ENDED
2004
2003
2004
2003
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OPERATING REVENUE
$178.6
$165.9
$
