ALLETE, Inc. (NYSE: ALE) reported earnings growth versus 2018 in its annual report, released Feb. 13.
Earnings in 2019 were $3.59 per share on net income of $185.6 million and operating revenue of $1.2 billion. Reported results from 2018 were $3.38 per share on net income of $174.1 million and operating revenue of $1.5 billion, the report said.
Net income in 2019 included a gain on the sale of U.S. Water Services of 26 cents per share, of which 4 cents per share was recognized in the fourth quarter of 2019 for the favorable settlement of a U.S. Water Services patent infringement case, offset by 2 cents per share of U.S. Water Services operating results prior to the sale.
"We completed many strategic initiatives in 2019 that position ALLETE for additional success in a clean energy landscape," said President and Chief Executive Officer Bethany Owen. She added "2020 will be another year of large scale renewable energy projects that will benefit our customers and the environment while creating value for our shareholders. In 2019 ALLETE made approximately $500 million in renewable energy investments, and we plan to invest over $450 million again in 2020."
"ALLETE is well positioned to thrive as all facets of an increasingly clean energy future unfold," stated Executive Chairman Al Hodnik. "In addition to our team delivering 2019 on plan financial results, the board recently raised the dividend for the 10th year in a row. I have every confidence that Bethany’s strong values based leadership, her proven ability to position while executing and her laser focus on talent development will assure ALLETE’s momentum continues as a new decade dawns."
ALLETE’s Regulated Operations segment, which includes Minnesota Power, Superior Water, Light and Power and the company’s investment in the American Transmission Co. (ATC), recorded net income of $154.4 million compared with $131.0 million in 2018. Earnings reflect higher net income at Minnesota Power primarily due to lower operating and maintenance and property tax expense, increased cost recovery rider revenue, higher transmission margins and higher fuel adjustment clause recoveries. These increases were partially offset by lower kilowatt-hour sales and associated margins from retail and municipal customers. Net income at SWL&P increased over last year due to higher rates implemented the first of this year, and ALLETE’s earnings in ATC were higher than in 2018 primarily due to additional equity investments and period over period changes in ATC’s estimate of a refund liability related to MISO return on equity complaints.
ALLETE Clean Energy recorded 2019 net income of $12.4 million compared with $33.7 million in 2018. Earnings in 2018 included the sale of a wind energy facility to Montana-Dakota Utilities of $10.2 million and $3.0 million of production tax credits that resulted from the retrospective qualification of additional wind turbine generators in 2016 and 2017. Net income in 2019 included lower revenue resulting from lower non-cash amortization related to the expiration of power sales agreements and higher depreciation expense. These decreases were partially offset by $5.3 million of additional production tax credits generated in 2019 compared to production tax credits generated in 2018 as ALLETE Clean Energy continues to execute its refurbishment strategy.
Corporate and Other businesses, which include BNI Energy and ALLETE Properties, recorded net income of $19.9 million in 2019 compared to net income of $6.2 million in 2018. Net income in 2019 included the gain on sale of U.S. Water Services of $13.2 million after-tax and higher earnings on cash and short-term investments. Net income in 2018 included a $2.0 million after-tax benefit for the change in fair value of the contingent consideration liability.