ALLETE, Inc. (ALE) Discloses 2020 Guidance

ALLETE, Inc. (NYSE: ALE) today initiated its 2020 earnings guidance range of $3.40 to $3.70 per share on net income of $180 million to $190 million. This guidance range is comprised of our Regulated Operations segment earnings within a range of $2.75 to $2.95 per share, and ALLETE Clean Energy and Corporate and Other operations earnings within a range of $0.65 to $0.75 per share. We reaffirm our long-term objective of achieving average annual earnings per share growth of 5 to 7 percent.

(*Consensus sees FY20 EPS of 3.67)

Key factors, expectations, considerations and assumptions impacting 2020 guidance are summarized below.
Regulated Operations

• Interim rate revenue, subject to refund, of approximately $36 million beginning January 1, 2020.

• 2020 industrial sales of approximately 7.0 million to 7.5 million megawatt-hours (MWh), which reflects anticipated production from our taconite customers of approximately 39 million tons in 2020.

•Lower revenue due to an expiring power sales agreement in April 2020, and a municipal customer contract that expired in mid-2019.

• Higher operating and maintenance expense as compared to 2019.

• Higher depreciation and property tax expenses due to additional plant in-service.

• Additional investments in the American Transmission Company LLC of approximately $3 million.

• An effective income tax benefit of approximately 15 percent for our Regulated Operations primarily due to production tax credits (PTCs).

• 2020 guidance assumes that we will achieve reasonable outcomes in regulatory proceedings.

ALLETE Clean Energy

• ALLETE Clean Energy expects approximately 2.3 million MWh (1.1 million MWh in 2019) in total wind generation.

• Expectation of the return to normal wind patterns.

• Glen Ullin in-service full year and South Peak in the first quarter of 2020.

• Diamond Spring wind project commercial operation date anticipated in late 2020.

• PTCs are estimated to be approximately $20 million in 2020.

• Higher depreciation expense due to additional plant in-service.

• Higher operating expenses compared to 2019 due to investments in growth initiatives.

• Guidance does not include the impact, if any, of possible acquisitions of renewable energy facilities, additional construction and sale projects, and requalification projects other than those previously disclosed.

Corporate and Other

• Similar results at BNI Energy, Inc. and ALLETE Properties, LLC.

• Nobles 2 Power Partners, LLC wind energy facility commercial operation date anticipated in late 2020.

A consolidated effective income tax benefit of approximately 20 percent in 2020 primarily due to PTCs as a result of wind generation from our Bison Wind Energy Center and requalification of wind turbine generators at ALLETE Clean Energy.

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