ALLETE, Inc. (NYSE:ALE) Files An 8-K Regulation FD Disclosure
Item 7.01
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Regulation FD Disclosure
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ALLETE, Inc. (NYSE:ALE) today initiated its 2017 earnings guidance
range of $3.10 to $3.50 per share on net income of $155 million to
$175 million. This compares favorably with our current 2016
guidance which is at the low end of our guidance range of $3.10 to
$3.40 per share. Key assumptions impacting 2017 guidance are
summarized below.
range of $3.10 to $3.50 per share on net income of $155 million to
$175 million. This compares favorably with our current 2016
guidance which is at the low end of our guidance range of $3.10 to
$3.40 per share. Key assumptions impacting 2017 guidance are
summarized below.
Regulated Operations
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On December 12, 2016, Minnesota Power filed a Request to
Modify Interim Rate Proposal reducing its requested interim rate increase to $34.7 million from the original request of approximately $49 million filed on November 2, 2016. This lower request is attributable to improving economic conditions in Minnesota Power’s service territory and is expected to both lower rate increases for customers and be earnings neutral to Minnesota Power. Our guidance reflects this updated interim rate request which was approved by the Minnesota Public Utilities Commission (MPUC) in a hearing on December 15, 2016, and is subject to refund. |
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As part of the recently filed rate review with the MPUC, we
are seeking an extension of the recovery period for the Boswell Energy Center to better reflect recent environmental investments at the facility and mitigate rate increases for our customers. If approved, annual depreciation expense will be reduced by approximately $25 million. The high end of our guidance range includes the impact of this request. If the requested recovery period extension is not approved, we would expect final rates to be increased by a similar amount. |
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Final rate increase for Superior Water, Light and Power of
approximately $2 million effective March 2017. |
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Additional cost recovery rider revenue from the Great
Northern Transmission Line capital investments. |
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Annual Industrial sales of approximately 7.0 to 7.5 million
megawatt-hours. Going forward, ALLETE will only be disclosing periodic large power customer nominations if the results materially impact the above estimate of annual industrial sales or have other material future implications. |
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Higher operating and maintenance expense due to increased
salary and benefit expense and 2016 including a $3.9 million sales tax refund. |
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Higher depreciation, property tax and interest expense
attributable to recent capital investments. |
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Our 2017 guidance includes the expectation of reasonable
regulatory outcomes. |
Energy Infrastructure and Related Services Businesses
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Similar results at ALLETE Clean Energy and excludes the
impact, if any, of possible development or acquisitions of renewable energy facilities. ALLETE Clean Energy is targeting acquisitions of existing facilities up to 200 megawatts each, and which have long-term power sales agreements in place for the facilities output. ALLETE Clean Energy is also targeting development of new facilities up to 200 megawatts each which will have long-term power sales agreements in place for the output, or may be sold upon completion; federal production tax credit qualification is important to development project economics, and ALLETE Clean Energy intends to invest in equipment in 2016 to meet the production tax credit safe harbor provisions. |
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Increased earnings at U.S. Water Services due to continued
sales growth. Guidance excludes the impact, if any, of possible acquisitions; U.S. Water Services expects to pursue periodic strategic tuck-in acquisitions with a purchase price in the $10 million to $50 million range. Priority will be given to acquisitions which expand its geographic reach, add new technology, or deepen its capabilities to serve its expanding customer base. |
Corporate and Other
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An effective tax rate of approximately 20 percent in 2017 due
to federal production tax credits as a result of wind generation from our Bison wind projects. |
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Earnings per share dilution of approximately $0.05.
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Readers are cautioned that forward-looking statements should be
read in conjunction with the Companys disclosures under the
heading Forward-Looking Statements located on page 2 of this Form
8-K.
read in conjunction with the Companys disclosures under the
heading Forward-Looking Statements located on page 2 of this Form
8-K.
ALLETE, Inc. Form 8-K dated December 19, 2016
Forward-Looking Statements
Statements in this report that are not statements of historical
facts are considered forward-looking and, accordingly, involve
risks and uncertainties that could cause actual results to differ
materially from those discussed. Although such forward-looking
statements have been made in good faith and are based on
reasonable assumptions, there can be no assurance that the
expected results will be achieved. Any statements that express,
or involve discussions as to, future expectations, risks,
beliefs, plans, objectives, assumptions, events, uncertainties,
financial performance, or growth strategies (often, but not
always, through the use of words or phrases such as anticipates,
believes, estimates, expects, intends, plans, projects, likely,
will continue, could, may, potential, target, outlook or words of
similar meaning) are not statements of historical facts and may
be forward-looking.
facts are considered forward-looking and, accordingly, involve
risks and uncertainties that could cause actual results to differ
materially from those discussed. Although such forward-looking
statements have been made in good faith and are based on
reasonable assumptions, there can be no assurance that the
expected results will be achieved. Any statements that express,
or involve discussions as to, future expectations, risks,
beliefs, plans, objectives, assumptions, events, uncertainties,
financial performance, or growth strategies (often, but not
always, through the use of words or phrases such as anticipates,
believes, estimates, expects, intends, plans, projects, likely,
will continue, could, may, potential, target, outlook or words of
similar meaning) are not statements of historical facts and may
be forward-looking.
In connection with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, we are providing this
cautionary statement to identify important factors that could
cause our actual results to differ materially from those
indicated in forward-looking statements made by or on behalf of
ALLETE in this Form 8-K, in presentations, on our website, in
response to questions or otherwise. These statements are
qualified in their entirety by reference to, and are accompanied
by, the following important factors, in addition to any
assumptions and other factors referred to specifically in
connection with such forward-looking statements that could cause
our actual results to differ materially from those indicated in
the forward-looking statements:
Securities Litigation Reform Act of 1995, we are providing this
cautionary statement to identify important factors that could
cause our actual results to differ materially from those
indicated in forward-looking statements made by or on behalf of
ALLETE in this Form 8-K, in presentations, on our website, in
response to questions or otherwise. These statements are
qualified in their entirety by reference to, and are accompanied
by, the following important factors, in addition to any
assumptions and other factors referred to specifically in
connection with such forward-looking statements that could cause
our actual results to differ materially from those indicated in
the forward-looking statements:
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our ability to successfully implement our strategic
objectives; |
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global and domestic economic conditions affecting us or our
customers; |
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changes in and compliance with laws and regulations;
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changes in tax rates or policies, or in rates of inflation;
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the outcome of legal and administrative proceedings
(whether civil or criminal) and settlements; |
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weather conditions, natural disasters and pandemic
diseases; |
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our ability to access capital markets and bank financing;
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changes in interest rates and the performance of the
financial markets; |
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project delays or changes in project costs;
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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; |
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the impacts of commodity prices on ALLETE and our
customers; |
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our ability to attract and retain qualified, skilled and
experienced personnel; |
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effects of emerging technology;
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war, acts of terrorism and cyber attacks;
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our ability to manage expansion and integrate acquisitions;
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population growth rates and demographic patterns;
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wholesale power market conditions;
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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; |
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effects of competition, including competition for retail
and wholesale customers; |
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effects of restructuring initiatives in the electric
industry; |
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the impacts on our Regulated Operations segment of climate
change and future regulation to restrict the emissions of greenhouse gases; |
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effects of increased deployment of distributed low-carbon
electricity generation resources; |
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the impacts of laws and regulations related to renewable
and distributed generation; |
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pricing, availability and transportation of fuel and other
commodities, and the ability to recover the costs of such commodities; |
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our current and potential industrial and municipal
customers ability to execute announced expansion plans; |
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real estate market conditions where our legacy Florida real
estate investment is located may not improve; |
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the success of efforts to realize value from, invest in,
and develop new opportunities in, our Energy Infrastructure and Related Services businesses; and |
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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. |
ALLETE, Inc. Form 8-K dated December 19, 2016
Forward-Looking Statements (Continued)
Additional disclosures regarding factors that could cause our
results or performance to differ from those anticipated by this
report are discussed in Part 1, Item 1A, under the heading Risk
Factors beginning on page 25 of ALLETEs Annual Report on Form
10K for the year ended December 31, 2015. Any forward-looking
statement speaks only as of the date on which such statement is
made, and we undertake no obligation to update any
forward-looking statement to reflect events or circumstances
after the date on which that statement is made or to reflect
the occurrence of unanticipated events. New factors emerge from
time to time, and it is not possible for management to predict
all of these factors, nor can it assess the impact of each of
these factors on the businesses of ALLETE or the extent to
which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any
forward-looking statement. Readers are urged to carefully
review and consider the various disclosures made by ALLETE in
this Current Report on Form 8K and in other reports filed with
the SEC that attempt to identify the risks and uncertainties
that may affect ALLETEs business.
results or performance to differ from those anticipated by this
report are discussed in Part 1, Item 1A, under the heading Risk
Factors beginning on page 25 of ALLETEs Annual Report on Form
10K for the year ended December 31, 2015. Any forward-looking
statement speaks only as of the date on which such statement is
made, and we undertake no obligation to update any
forward-looking statement to reflect events or circumstances
after the date on which that statement is made or to reflect
the occurrence of unanticipated events. New factors emerge from
time to time, and it is not possible for management to predict
all of these factors, nor can it assess the impact of each of
these factors on the businesses of ALLETE or the extent to
which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any
forward-looking statement. Readers are urged to carefully
review and consider the various disclosures made by ALLETE in
this Current Report on Form 8K and in other reports filed with
the SEC that attempt to identify the risks and uncertainties
that may affect ALLETEs business.
ALLETE, Inc. Form 8-K dated December 19, 2016
About ALLETE, Inc. (NYSE:ALE)
ALLETE, Inc. is an energy company. The Company operates through three segments. The Regulated Operations segment includes its regulated utilities, Minnesota Power and Superior Water, Light and Power Company (SWL&P), as well as its investment in American Transmission Company LLC (ATC), a regulated utility that owns and maintains electric transmission assets. Its regulated utility operations include retail and wholesale activities. The ALLETE Clean Energy segment focuses on developing, acquiring and operating clean and renewable energy projects. The ALLETE Clean Energy segment owns and operates in approximately four states with over 530 megawatt (MW) nameplate capacity wind energy generation. Its U.S. Water Services segment provides integrated water management for industry by combining chemical, equipment, engineering and service for customized solutions. Its U.S. Water Services segment serves the food and beverage, industrial, power generation, and midstream oil and gas industries. ALLETE, Inc. (NYSE:ALE) Recent Trading Information
ALLETE, Inc. (NYSE:ALE) closed its last trading session up +0.49 at 64.35 with 341,045 shares trading hands.
