Investment in ATC

9 Months Ended

Sep. 30, 2012

INVESTMENT IN ATC

Our wholly-owned subsidiary, Rainy River Energy, owns approximately 8 percent of ATC, a Wisconsin-based utility that owns and maintains electric transmission assets in parts of Wisconsin, Michigan, Minnesota and Illinois. ATC rates are FERC-approved and are based on a 12.2 percent return on common equity dedicated to utility plant. We account for our investment in ATC under the equity method of accounting. As of September 30, 2012, our equity investment in ATC was $105.5 million ($98.9 million at December 31, 2011). In the first nine months of 2012, we invested $3.9 million in ATC, and on October 30, 2012, we invested an additional $0.8 million. We do not expect to make any additional investments in 2012.



ALLETE’s Investment in ATC
Millions
Equity Investment Balance as of December 31, 2011		$98.9
Cash Investments	3.9
Equity in ATC Earnings	14.3
Distributed ATC Earnings	(11.6		)
Equity Investment Balance as of September 30, 2012		$105.5

ATC’s summarized financial data for the quarters and nine months ended September 30, 2012 and 2011, is as follows:



	Quarter Ended			Nine Months Ended
ATC Summarized Financial Data	September 30,			September 30,
Income Statement Data	2012		2011	2012		2011
Millions
Revenue	$150.3		$142.8		$450.1		$420.6
Operating Expense	68.8		66.4	210.1		192.5
Other Expense	21.0		19.7	62.1		61.6
Net Income		$60.5	$56.7		$177.9		$166.5

ALLETE’s Equity in Net Income	$4.9		$4.7		$14.3		$13.7

- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

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