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Employee Stock and Incentive Plans | 12 Months Ended
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Dec. 31, 2011
Employee Stock and Incentive Plans [Abstract] |
Employee Stock and Incentive Plans [Text Block] | Employee Stock and Incentive Plans Employee Stock Ownership Plan. We sponsor a leveraged ESOP within the RSOP. As of their date of hire, eligible employees may contribute to the RSOP plan. In 1990, the ESOP issued a $75.0 million note (term not to exceed 25 years at 10.25 percent) to use as consideration for 2.8 million shares (1.9 million shares adjusted for stock splits) of our newly issued common stock. The note was refinanced in 2006 at 6 percent. We make annual contributions to the ESOP equal to the ESOP’s debt service less available dividends received by the ESOP. The majority of dividends received by the ESOP are used to pay debt service, with the balance distributed to participants. The ESOP shares were initially pledged as collateral for its debt. As the debt is repaid, shares are released from collateral and allocated to participants based on the proportion of debt service paid in the year. As shares are released from collateral, we report compensation expense equal to the current market price of the shares less dividends on allocated shares. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings; available dividends on unallocated ESOP shares are recorded as a reduction of debt and accrued interest. ESOP compensation expense was $7.4 million in 2011 ($7.1 million in 2010; $6.5 million in 2009). According to the accounting standards for stock compensation, unallocated shares of ALLETE common stock currently held and purchased by the ESOP will be treated as unearned ESOP shares and not considered outstanding for earnings per share computations. ESOP shares are included in earnings per share computations after they are allocated to participants.
Year Ended December 31 | 2011 | 2010 | 2009
Millions |  |  |
ESOP Shares |  |  |
Allocated | 2.2 |  | 2.2 |  | 2.2 |
Unallocated | 1.0 |  | 1.3 |  | 1.5 |
Total | 3.2 |  | 3.5 |  | 3.7 |
Fair Value of Unallocated Shares |  | $42.0 |  |  | $48.4 |  |  | $49.0 |
Stock-Based Compensation. Stock Incentive Plan. Under our Executive Long-Term Incentive Compensation Plan (Executive Plan), share-based awards may be issued to key employees through a broad range of methods, including non-qualified and incentive stock options, performance shares, performance units, restricted stock, stock appreciation rights and other awards. There are 1.3 million shares of common stock reserved for issuance under the Executive Plan, with 0.6 million of these shares available for issuance as of December 31, 2011. We had a Director Long-Term Stock Incentive Plan (Director Plan) which expired on January 1, 2006. No grants have been made since 2003 under the Director Plan. Approximately 1,293 options were outstanding under the Director Plan at December 31, 2011. We currently have the following types of share-based awards outstanding: Non-Qualified Stock Options. The options allow for the purchase of shares of common stock at a price equal to the market value of our common stock at the date of grant. Options become exercisable beginning one year after the grant date, with one-third vesting each year over three years. Options may be exercised up to ten years following the date of grant. In the case of qualified retirement, death or disability, options vest immediately and the period over which the options can be exercised is three years. Employees have up to three months to exercise vested options upon voluntary termination or involuntary termination without cause. All options are canceled upon termination for cause. All options vest immediately upon retirement, death, disability or a change of control, as defined in the award agreement. We determine the fair value of options using the Black-Scholes option-pricing model. The estimated fair value of options, including the effect of estimated forfeitures, is recognized as expense on the straight-line basis over the options’ vesting periods, or the accelerated vesting period if the employee is retirement eligible. Stock options have not been granted under our Executive Plan since 2008. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the grant date. Expected volatility is estimated based on the historic volatility of our stock and the stock of our peer group companies. We utilize historical option exercise and employee pre-vesting termination data to estimate the option life. The dividend growth rate is based upon historical growth rates in our dividends.
Note 17. | Employee Stock and Incentive Plans (Continued)
Performance Shares. Under the performance share awards plan, the number of shares earned is contingent upon attaining specific market goals over a three-year performance period. Market goals are measured by total shareholder return relative to a group of peer companies. In the case of qualified retirement, death or disability during a performance period, a pro rata portion of the award will be earned at the conclusion of the performance period based on the market goals achieved. In the case of termination of employment for any reason other than qualified retirement, death or disability, no award will be earned. If there is a change in control, a pro rata portion of the award will be paid based on the greater of actual performance up to the date of the change in control or target performance. The fair value of these awards is determined by the probability of meeting the total shareholder return goals. Compensation cost is recognized over the three-year performance period based on our estimate of the number of shares which will be earned by the award recipients. Restricted Stock Units. Under the restricted stock units plan, shares vest monthly over a three-year period. In the case of qualified retirement, death or disability, a pro rata portion of the award will be earned. In the case of termination of employment for any other reason other than qualified retirement, death or disability, no award will be earned. If there is a change in control, a pro rata portion of the award will be paid. The fair value of these awards is equal to the grant date fair value. Compensation cost is recognized over the three-year vesting period based on our estimate of the number of shares which will be earned by the award recipients. Employee Stock Purchase Plan (ESPP). Under our ESPP, eligible employees may purchase ALLETE common stock at a 5 percent discount from the market price. Because the discount is not greater than 5 percent, we are not required to apply fair value accounting to these awards. RSOP. The RSOP is a contributory defined contribution plan subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended, and qualifies as an employee stock ownership plan and profit sharing plan. The RSOP provides eligible employees an opportunity to save for retirement. The following share-based compensation expense amounts were recognized in our consolidated statement of income for the periods presented.
Share-Based Compensation Expense
Year Ended December 31 | 2011 | 2010 | 2009
Millions |  |  |
Stock Options | — |  |  | $0.1 |  |  | $0.3 |
Performance Shares |  | $1.1 |  | 1.5 |  | 1.5 |
Restricted Stock Units | 0.5 |  | 0.6 |  | 0.3 |
Total Share-Based Compensation Expense |  | $1.6 |  |  | $2.2 |  |  | $2.1 |
Income Tax Benefit |  | $0.7 |  |  | $0.9 |  |  | $0.8 |
There were no capitalized stock-based compensation costs at December 31, 2011, 2010, or 2009. As of December 31, 2011, the total unrecognized compensation cost for the performance share awards and restricted stock units not yet recognized in our consolidated statements of income was $1.3 million and $0.6 million, respectively. These amounts are expected to be recognized over a weighted-average period of 1.7 years and 1.6 years for performance share awards and restricted stock units, respectively. Non-Qualified Stock Options. The following table presents information regarding our outstanding stock options as of December 31, 2011.
Note 17. | Employee Stock and Incentive Plans (Continued)
| 2011 | 2010 | 2009
| Number of Options | Weighted-Average Exercise Price | Number of Options | Weighted-Average Exercise Price | Number of Options | Weighted-Average Exercise Price
Outstanding as of January 1, | 560,887 |  |  | $40.69 |  | 646,235 |  |  | $40.05 |  | 672,419 |  |  | $39.99 |
Granted (a) | — |  | — |  | — |  | — |  | — |  | — |
Exercised | 80,798 |  |  | $34.25 |  | 40,769 |  |  | $27.76 |  | 4,508 |  |  | $18.85 |
Forfeited | 19,855 |  |  | $43.96 |  | 44,579 |  |  | $43.16 |  | 21,676 |  |  | $42.62 |
Outstanding as of December 31, | 460,234 |  |  | $41.68 |  | 560,887 |  |  | $40.69 |  | 646,235 |  |  | $40.05 |
Exercisable as of December 31, | 460,234 |  |  | $41.59 |  | 523,491 |  |  | $39.76 |  | 512,743 |  |  | $37.34 |
(a) | Stock options have not been granted since 2008. The weighted-average grant-date intrinsic value of options granted in 2008 was $6.18.
Cash received from non-qualified stock options exercised was less than $0.1 million in 2011. The intrinsic value of a stock award is the amount by which the fair value of the underlying stock exceeds the exercise price of the award. The total intrinsic value of options exercised was $0.5 million during 2011 ($0.3 million in 2010; $0.1 million in 2009).
| Range of Exercise Price
As of December 31, 2011 | $18.85 to $29.79 | $37.76 to $41.35 | $44.15 to $48.65
Options Outstanding and Exercisable: |  |  |
Number Outstanding and Exercisable | 11,672 |  | 279,133 |  | 169,429 |
Weighted Average Remaining Contractual Life (Years) | 1.1 |  | 4.5 |  | 4.5 |
Weighted Average Exercise Price |  | $24.14 |  |  | $39.57 |  |  | $46.37 |
Performance Shares. The following table presents information regarding our non-vested performance shares as of December 31, 2011.
| 2011 | 2010 | 2009
| Number of Shares | Weighted- Average Grant Date Fair Value | Number of Shares | Weighted- Average Grant Date Fair Value | Number of Shares | Weighted- Average Grant Date Fair Value
Non-vested as of January 1, | 122,489 |  |  | $38.15 |  | 121,825 |  |  | $41.96 |  | 79,238 |  |  | $47.94 |
Granted (a) | 39,312 |  |  | $41.00 |  | 49,302 |  |  | $35.44 |  | 69,800 |  |  | $35.06 |
Awarded | (32,368 | ) |  | $48.10 |  | — |  | — |  | — |  | — |
Unearned Grant Award | — |  | — |  | (22,909 | ) |  | $54.50 |  | (24,615 | ) |  | $41.97 |
Forfeited | (1,100 | ) |  | $34.35 |  | (25,729 | ) |  | $36.45 |  | (2,598 | ) |  | $38.78 |
Non-vested as of December 31, | 128,333 |  |  | $28.00 |  | 122,489 |  |  | $38.15 |  | 121,825 |  |  | $41.96 |
(a) Shares granted includes accrued dividends. Less than 0.1 million performance shares were granted in January 2011 for the three-year performance period ending in 2013. The ultimate issuance is contingent upon the attainment of certain future market goals of ALLETE during the performance periods. The grant date fair value of the performance shares granted was $1.4 million. Less than 0.1 million performance shares were awarded in February 2011 for the three-year performance period ending in 2010. The grant date fair value of the shares awarded was $1.6 million. Less than 0.1 million performance shares were awarded in February 2012 for the three-year performance period ending in 2011. The grant date fair value of the shares awarded was $1.4 million.
Note 17. | Employee Stock and Incentive Plans (Continued)
Restricted Stock Units. The following table presents information regarding our available restricted stock units as of December 31, 2011.
| 2011 | 2010 | 2009
| Number of Shares | Weighted- Average Grant Date Fair Value | Number of Shares | Weighted- Average Grant Date Fair Value | Number of Shares | Weighted- Average Grant Date Fair Value
Available as of January 1, | 43,803 |  |  | $30.61 |  | 28,983 |  |  | $29.41 |  | — |  | — |
Granted (a) | 20,136 |  |  | $36.74 |  | 26,589 |  |  | $31.83 |  | 30,465 |  |  | $29.41 |
Awarded | (215 | ) |  | $30.30 |  | (3,091 | ) |  | $29.75 |  | — |  | — |
Forfeited | (260 | ) |  | $29.41 |  | (8,678 | ) |  | $30.62 |  | (1,482 | ) |  | $29.41 |
Available as of December 31, | 63,464 |  |  | $22.88 |  | 43,803 |  |  | $30.61 |  | 28,983 |  |  | $29.41 |
(a) Shares granted includes accrued dividends. Less than 0.1 million restricted stock units were granted in January 2011 for the vesting period ending in 2013. The grant date fair value of the restricted stock units granted was $0.6 million. Less than 0.1 million restricted stock units were awarded in February 2011. The grant date fair value of the shares awarded was less than $0.1 million. Less than 0.1 million restricted stock units were awarded in February 2012. The grant date fair value of the shares awarded was $0.8 million.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 + Details
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