UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2025 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______________ to ______________ Commission File Number 1-3548 ALLETE, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction ...

Core Viewpoint - Allete's shares have entered oversold territory with a Relative Strength Index (RSI) reading of 29.7, indicating potential buying opportunities as heavy selling may be exhausting [1][2][3] Group 1: Stock Performance - Allete shares traded as low as $63.555, with a current trading price of $63.65, reflecting a decrease of approximately 0.3% on the day [1][3] - The 52-week range for Allete shares is between $61.51 (low) and $66.40 (high) [3] Group 2: Technical Indicators - The average RSI for the energy stocks universe is 51.1, while WTI Crude Oil has an RSI of 47.5, and Henry Hub Natural Gas is at 41.4 [2] - The 3-2-1 Crack Spread RSI is currently at 45.6, indicating a relatively stronger position compared to Allete's RSI [2]

Part I. Financial Information [Consolidated Financial Statements - Unaudited](index=7&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20-%20Unaudited) ALLETE's Q1 2025 unaudited consolidated financial statements report net income attributable to ALLETE of **$56.1 million**, an increase from **$50.7 million** in Q1 2024 Consolidated Balance Sheet (Unaudited) | (Millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $477.9 | $435.2 | | **Total Assets** | **$6,866.3** | **$6,754.3** | | **Total Current Liabilities** | $380.6 | $404.2 | | **Total Liabilities** | $3,477.5 | $3,363.8 | | **Total ALLETE Equity** | $2,866.0 | $2,848.0 | | **Total Equity** | $3,388.3 | $3,390.1 | | **Total Liabilities, Redeemable Non-Controlling Interest and Equity** | **$6,866.3** | **$6,754.3** | Consolidated Statement of Income (Unaudited) | (Millions Except Per Share Amounts) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total Operating Revenue** | $400.2 | $403.3 | | **Operating Income** | $53.0 | $47.3 | | **Income Before Income Taxes** | $42.2 | $41.0 | | **Net Income** | $34.7 | $37.0 | | **Net Income Attributable to ALLETE** | **$56.1** | **$50.7** | | **Diluted Earnings Per Share** | **$0.97** | **$0.88** | Consolidated Statement of Cash Flows (Unaudited) | (Millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Cash provided by Operating Activities** | $110.2 | $60.1 | | **Cash used in Investing Activities** | ($160.2) | ($60.8) | | **Cash provided by (used in) Financing Activities** | $89.2 | ($38.4) | | **Change in Cash, Cash Equivalents and Restricted Cash** | $39.2 | ($39.1) | [Note 1. Operations and Significant Accounting Policies](index=12&type=section&id=Note%201.%20Operations%20and%20Significant%20Accounting%20Policies) This note outlines the basis of preparation for unaudited financial statements and details key accounting policies for cash, inventories, and goodwill Inventories – Net | (Millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Fuel | $22.3 | $22.5 | | Materials and Supplies | 122.2 | 107.6 | | Renewable Energy Facilities Under Development | 26.6 | 24.5 | | **Total Inventories – Net** | **$171.1** | **$154.6** | - The carrying amount of goodwill was **$154.9 million** as of March 31, 2025, with no changes during the quarter[38](index=38&type=chunk) [Note 2. Regulatory Matters](index=15&type=section&id=Note%202.%20Regulatory%20Matters) This note details regulatory activities, including a **$33.97 million** rate increase approval, a **$27.9 million** interim rate refund reserve, and the 2025 IRP for future energy capacity - In the 2024 Minnesota General Rate Case, a settlement was approved for a **$33.97 million** rate increase, a **9.78%** return on equity, and a **$27.9 million** pre-tax reserve for an interim rate refund as of March 31, 2025[48](index=48&type=chunk) - The 2025 Integrated Resource Plan (IRP) filed on March 3, 2025, proposes adding **400 MW** of new wind, **100 MW** of energy storage, and **~1,000 MW** of natural gas capacity by 2035, aiming to cease coal use at the Boswell Energy Center[55](index=55&type=chunk) Regulatory Assets and Liabilities Summary | (Millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Non-Current Regulatory Assets** | $364.6 | $371.7 | | **Total Non-Current Regulatory Liabilities** | $580.6 | $570.5 | [Note 3. Equity Investments](index=17&type=section&id=Note%203.%20Equity%20Investments) This note details ALLETE's equity method investments in ATC and Nobles 2, with balances of **$199.5 million** and **$144.5 million** respectively as of March 31, 2025 ALLETE's Investment in ATC | (Millions) | Amount | | :--- | :--- | | Equity Investment Balance as of December 31, 2024 | $194.4 | | Cash Investments | 5.5 | | Equity in ATC Earnings | 6.5 | | Distributed ATC Earnings | (7.2) | | **Equity Investment Balance as of March 31, 2025** | **$199.5** | ALLETE's Investment in Nobles 2 | (Millions) | Amount | | :--- | :--- | | Equity Investment Balance as of December 31, 2024 | $145.7 | | Equity in Nobles 2 Earnings | (0.5) | | Distributed Nobles 2 Earnings | (0.7) | | **Equity Investment Balance as of March 31, 2025** | **$144.5** | [Note 4. Fair Value](index=18&type=section&id=Note%204.%20Fair%20Value) This note describes fair value measurements for ALLETE's financial assets and liabilities, with recurring assets totaling **$25.8 million** and debt fair value at **$1.82 billion** Recurring Fair Value Measures as of March 31, 2025 | (Millions) | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | **Total Fair Value of Assets** | $19.4 | $6.4 | — | $25.8 | | **Total Fair Value of Liabilities** | — | $18.8 | — | $18.8 | Fair Value of Financial Instruments | (Millions) | Carrying Amount | Fair Value | | :--- | :--- | :--- | | **Short-Term and Long-Term Debt (March 31, 2025)** | $1,936.1 | $1,820.1 | - No indicators of impairment were identified for non-financial assets such as goodwill, intangible assets, and property, plant and equipment for the three months ended March 31, 2025[74](index=74&type=chunk) [Note 5. Short-Term and Long-Term Debt](index=20&type=section&id=Note%205.%20Short-Term%20and%20Long-Term%20Debt) This note details ALLETE's debt structure, including **$1.936 billion** in total debt and the issuance of **$150 million** in senior unsecured notes, with covenant compliance maintained Total Debt Summary | (Millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Short-Term Debt | $94.2 | $94.7 | | Long-Term Debt | $1,832.8 | $1,704.7 | | **Total Debt (Principal)** | **$1,936.1** | **$1,808.0** | - On March 25, 2025, ALLETE issued **$150 million** of senior unsecured notes, consisting of **$120 million** at **5.38%** due 2030 and **$30 million** at **5.82%** due 2035[76](index=76&type=chunk) - As of March 31, 2025, ALLETE's ratio of indebtedness to total capitalization was approximately **0.38 to 1.00**, compliant with the covenant limit of **0.65 to 1.00**[77](index=77&type=chunk) [Note 6. Commitments, Guarantees and Contingencies](index=21&type=section&id=Note%206.%20Commitments%2C%20Guarantees%20and%20Contingencies) This note covers significant commitments and contingencies, including environmental compliance costs for the CCR Rule and **$142.8 million** in outstanding letters of credit - The EPA's final CCR Legacy Impoundment Rule is estimated to result in compliance costs for Minnesota Power's Boswell and Laskin facilities between **$50 million** and **$85 million** over the next 10 years[108](index=108&type=chunk) - A wastewater spill at the Boswell facility in July 2024 resulted in remediation costs of approximately **$2 million** pre-tax in the first quarter of 2025, with total costs potentially being material[105](index=105&type=chunk) - As of March 31, 2025, ALLETE had **$142.8 million** of outstanding letters of credit and **$133.2 million** in outstanding surety bonds across its businesses[110](index=110&type=chunk) [Note 7. Earnings Per Share and Common Stock](index=28&type=section&id=Note%207.%20Earnings%20Per%20Share%20and%20Common%20Stock) This note provides basic and diluted EPS calculations, reporting **$0.97** for Q1 2025 based on **$56.1 million** net income attributable to ALLETE Reconciliation of Basic and Diluted Earnings Per Share | (Millions Except Per Share Amounts) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net Income Attributable to ALLETE** | $56.1 | $50.7 | | **Average Common Shares - Basic** | 57.9 | 57.6 | | **Dilutive Securities** | 0.1 | 0.1 | | **Average Common Shares - Diluted** | 58.0 | 57.7 | | **Earnings Per Share - Basic** | $0.97 | $0.88 | | **Earnings Per Share - Diluted** | **$0.97** | **$0.88** | [Note 8. Income Tax Expense](index=28&type=section&id=Note%208.%20Income%20Tax%20Expense) This note details income tax expense, with Q1 2025 total expense of **$7.5 million** and an effective tax rate of **17.8%**, primarily impacted by tax credits - The effective tax rate for Q1 2025 was **17.8%**, compared to **9.7%** for Q1 2024. The rates for both periods were primarily impacted by tax credits[124](index=124&type=chunk) Income Tax Expense Summary | (Millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total Current Income Tax Expense | $7.8 | $6.9 | | Total Deferred Income Tax Benefit | $(0.3) | $(2.9) | | **Total Income Tax Expense** | **$7.5** | **$4.0** | [Note 9. Pension and Other Postretirement Benefit Plans](index=30&type=section&id=Note%209.%20Pension%20and%20Other%20Postretirement%20Benefit%20Plans) This note outlines net periodic benefit costs and employer contributions for pension and postretirement plans, with **$19.1 million** contributed to pension plans in Q1 2025 - For the three months ended March 31, 2025, ALLETE contributed **$19.1 million** in cash to its defined benefit pension plans and expects to make no further contributions in 2025[129](index=129&type=chunk) Net Periodic Benefit Cost (Credit) for Q1 2025 | (Millions) | Pension | Other Postretirement | | :--- | :--- | :--- | | **Net Periodic Benefit Cost (Credit)** | **$2.5** | **$(3.4)** | [Note 10. Business Segments](index=30&type=section&id=Note%2010.%20Business%20Segments) This note details updated reportable segments: Regulated Operations, ALLETE Clean Energy, and New Energy, with New Energy showing significant growth in Q1 2025 net income - In Q1 2025, the company updated its reportable segments to: Regulated Operations, ALLETE Clean Energy, and New Energy, reflecting New Energy's increased contribution to net income[130](index=130&type=chunk) Net Income (Loss) Attributable to ALLETE by Segment | (Millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Regulated Operations | $38.4 | $44.2 | | ALLETE Clean Energy | 7.4 | 3.8 | | New Energy | 9.2 | 4.0 | | Corporate and Other | 1.1 | (1.3) | | **Total Net Income Attributable to ALLETE** | **$56.1** | **$50.7** | Total Assets by Segment | (Millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Regulated Operations | $4,560.2 | $4,489.4 | | ALLETE Clean Energy | 1,464.2 | 1,477.4 | | New Energy | 351.4 | 335.7 | | Corporate and Other | 490.5 | 451.8 | | **Total Assets** | **$6,866.3** | **$6,754.3** | [Note 11. Agreement and Plan of Merger](index=33&type=section&id=Note%2011.%20Agreement%20and%20Plan%20of%20Merger) This note describes the May 2024 merger agreement for ALLETE's acquisition by Alloy Parent for **$3.9 billion**, with shareholder and key regulatory approvals received - On May 5, 2024, ALLETE entered into a merger agreement to be acquired by Alloy Parent for **$67.00 per share** in cash, an aggregate equity value of approximately **$3.9 billion**[136](index=136&type=chunk)[137](index=137&type=chunk) - Shareholders approved the merger on August 21, 2024. ALLETE has received approvals from FERC, PSCW, and CFIUS[141](index=141&type=chunk)[142](index=142&type=chunk) - The MPUC has referred the merger for a contested case proceeding, with an Administrative Law Judge's report and recommendation requested by July 15, 2025[142](index=142&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Q1 2025 financial results, highlighting increased net income driven by ALLETE Clean Energy and New Energy segments - Q1 2025 net income attributable to ALLETE was **$56.1 million** (**$0.97 per diluted share**), up from **$50.7 million** (**$0.88 per diluted share**) in Q1 2024. Results include after-tax transaction expenses of **$2.1 million** related to the pending merger[150](index=150&type=chunk) - Growth was driven by ALLETE Clean Energy (net income up to **$7.4M** from **$3.8M**) and New Energy (net income up to **$9.2M** from **$4.0M**), while Regulated Operations net income declined to **$38.4M** from **$44.2M**[150](index=150&type=chunk)[151](index=151&type=chunk) [Comparison of the Three Months Ended](index=36&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended) This subsection provides a detailed segment-by-segment analysis of Q1 2025 financial performance, noting decreased Regulated Operations net income offset by growth in other segments - Regulated Operations' net income decreased by **$5.8 million**, primarily due to lower sales to industrial customers (down **12.5%** in kWh) and higher O&M and depreciation expenses[153](index=153&type=chunk)[156](index=156&type=chunk) - ALLETE Clean Energy's net income increased by **$3.6 million**, driven by higher production at tax equity financed wind facilities and recovery from a 2024 network outage near its Caddo facility[150](index=150&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - New Energy's net income increased by **$5.2 million**, reflecting higher sales of renewable energy projects and investment tax credits compared to 2024[169](index=169&type=chunk) [Critical Accounting Policies](index=39&type=section&id=Critical%20Accounting%20Policies) This section confirms no material changes to the risk factors previously disclosed in the company's 2024 Form 10-K - The company's critical accounting policies, which are regularly reviewed by the Audit Committee, remain unchanged from those disclosed in the 2024 Form 10-K[171](index=171&type=chunk) [Outlook](index=40&type=section&id=Outlook) The company maintains a long-term objective of **5% to 7%** consolidated EPS growth, with Regulated Operations expected to contribute **75%** of net income, supported by the 2025 IRP and transmission investments - ALLETE has a long-term objective of achieving **5% to 7%** consolidated EPS growth and expects Regulated Operations to comprise approximately **75%** of total consolidated net income in 2025[174](index=174&type=chunk)[175](index=175&type=chunk) - Minnesota Power filed its 2025 IRP to align with the state's **100%** carbon-free energy by 2040 law, planning significant additions of wind, solar, storage, and natural gas generation[179](index=179&type=chunk) - A key transmission project is the modernization of the HVDC line, estimated to cost between **$800 million** and **$940 million**, with construction beginning in 2025[187](index=187&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) ALLETE reports strong liquidity with **$92.0 million** in cash and **$341.8 million** in available credit, alongside increased 2025 capital expenditures of approximately **$900 million** - As of March 31, 2025, ALLETE had **$92.0 million** in cash and **$341.8 million** available under consolidated lines of credit[192](index=192&type=chunk) Capital Structure as of March 31, 2025 | (Millions) | Amount | % | | :--- | :--- | :--- | | ALLETE Equity | $2,866.0 | 54 | | Non-Controlling Interest in Subsidiaries | 522.3 | 10 | | Short-Term and Long-Term Debt | 1,936.1 | 36 | | **Total** | **$5,324.9** | **100** | - Capital expenditures for 2025 are now expected to be approximately **$900 million**, an increase reflecting higher spending at Minnesota Power, mainly for the HVDC transmission project[202](index=202&type=chunk) [Other](index=45&type=section&id=Other) This section covers environmental matters, including efforts to reduce coal reliance, and employee relations, noting **1,638 employees** with collective bargaining agreements in place - As of March 31, 2025, ALLETE had **1,638 employees**, with **502** at Minnesota Power and SWL&P, and **134** at BNI Energy covered by collective bargaining agreements[205](index=205&type=chunk)[206](index=206&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section discusses market risks, including commodity prices and interest rates, noting mitigation strategies and a **$0.3 million** impact from a **100 basis point** interest rate increase - The company's exposure to commodity price risk (coal, natural gas) is largely mitigated by regulatory frameworks that allow for cost recovery from customers[210](index=210&type=chunk) - Based on variable rate debt outstanding as of March 31, 2025, a **100 basis point** increase in interest rates would result in a pre-tax interest expense increase of **$0.3 million**[213](index=213&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - Based on an evaluation as of March 31, 2025, the principal executive and financial officers concluded that the company's disclosure controls and procedures are effective[215](index=215&type=chunk) - No changes occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[216](index=216&type=chunk) Part II. Other Information [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates legal and regulatory proceedings by reference, stating that normal course litigation is not expected to materially affect financial position or results - Information regarding material legal and regulatory proceedings is detailed in Note 2 (Regulatory Matters) and Note 6 (Commitments, Guarantees and Contingencies)[217](index=217&type=chunk) - The company does not expect the outcome of litigation arising in the normal course of business to have a material effect on its financial position, results of operations, or cash flows[218](index=218&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) This section confirms no material changes to the risk factors previously disclosed in the company's 2024 Form 10-K - There have been no material changes from the risk factors disclosed in Part I, Item 1A of the 2024 Form 10-K[219](index=219&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[220](index=220&type=chunk) [Defaults Upon Senior Securities](index=47&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[221](index=221&type=chunk) [Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety violation information, as required by the Dodd-Frank Act, is included in Exhibit 95 - Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act is included in Exhibit 95 to this Form 10-Q[222](index=222&type=chunk) [Other Information](index=48&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter - During the quarter ended March 31, 2025, no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement[223](index=223&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Merger Agreement, Note Purchase Agreement, and CEO/CFO certifications - Key exhibits filed include the Agreement and Plan of Merger, a Note Purchase Agreement dated March 25, 2025, CEO/CFO certifications, and Mine Safety disclosures (Exhibit 95)[224](index=224&type=chunk)

Company Leadership Transition - New Energy Equity announced the promotion of Josh Kunkel to Chief Executive Officer effective June 1, 2025, as part of a planned transition [1] - Matt Hankey, the co-founder and current CEO, will take on a new role as Emerging Technologies Officer at ALLETE while remaining on the New Energy Equity Board of Directors [1][2] Company Growth and Achievements - Under Matt Hankey's leadership, New Energy Equity has grown to over 125 employees and has implemented over 270 solar projects across the United States, totaling 600MW and more than $1.5 billion in project investment [2] - The company focuses on developing, financing, operating, and managing solar power generation assets, providing clean electricity to various customers under long-term contracts [4] Future Outlook - Josh Kunkel expressed confidence in leading the company into its next phase of growth, emphasizing the strong foundation built by Hankey and the team [2][3] - ALLETE CEO Bethany Owen highlighted Kunkel's results-driven leadership and commitment to the company's culture and mission, indicating a positive outlook for New Energy Equity's future in the renewable energy industry [3]

Core Points - New Energy Equity's Lift as We Climb Foundation donated $100,000 to Civic Works to enhance solar access for Baltimore households [1][4] - The donation will enable 80 households to receive free solar installations, potentially reducing their electricity bills by 80% to 100% [4] - Civic Works aims to strengthen communities through education and skills development while increasing access to clean energy [5] Company Overview - New Energy Equity LLC, a subsidiary of ALLETE, specializes in developing, financing, operating, and managing solar power generation assets, with over 550MW of solar projects developed and more than $1.2 billion in clean energy investments closed [9] - The Lift As We Climb Foundation was established by New Energy Equity to support local communities through charitable donations, focusing on solar energy projects, education, and workforce training [10] Community Impact - The funding will allow Civic Works to expand its rooftop solar team by hiring two new employees, ensuring sustainable solar deployment in the community [4] - Melvin Brennan, Director of Energy Programs at Civic Works, expressed gratitude for New Energy Equity's commitment to clean energy and its values [7][8]

Core Insights - New Energy Equity has partnered with the Harlem Consolidated School District to develop a 5.54 MWdc solar energy project in Illinois, marking its first initiative in the state's Public Schools Program [1][2]. Company Overview - New Energy Equity is a national leader in developing and financing community and commercial solar projects, having developed over 550 MW of solar projects and closed more than $1.2 billion in clean energy investments [8]. - The company emphasizes its commitment to advancing clean energy in educational settings and empowering communities [5]. Project Details - The solar project will provide significant economic benefits, including discounted electricity, to the Harlem Consolidated School District and residential customers in the Commonwealth Edison service area [2]. - The project aims to offset the energy needs of the school district, which supports over 39,000 students across 11 schools, and expand renewable energy access to the local community [4]. Industry Impact - This initiative is part of Illinois' Adjustable Block Program (ABP), which promotes renewable energy growth across the state [2]. - The collaboration is expected to foster environmental stewardship and sustainability, allowing public schools and communities to transition to renewable energy sources [4][6]. Developer Background - BOW Renewables, the original developer of the project, is committed to providing local community benefits and advancing Illinois' clean energy objectives [7].

Part I [Item 1. Business](index=8&type=section&id=Item%201.%20Business) ALLETE is an energy company pursuing a clean-energy transformation and a pending merger into a private entity - ALLETE is undergoing a significant clean-energy transition, aiming for **70% renewable energy by 2030** and **100% carbon-free energy by 2040**; in 2024, it delivered 55% renewable energy to its Minnesota customers[27](index=27&type=chunk)[28](index=28&type=chunk)[95](index=95&type=chunk) - On May 5, 2024, ALLETE entered into a merger agreement with Alloy Parent LLC; upon completion, ALLETE will become a **private subsidiary** of Alloy Parent[30](index=30&type=chunk) Consolidated Operating Revenue by Segment | Percentage of Consolidated Operating Revenue | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Regulated Operations | 81% | 66% | 80% | | ALLETE Clean Energy | 6% | 22% | 8% | | Corporate and Other | 13% | 12% | 12% | [Regulated Operations](index=10&type=section&id=Regulated%20Operations) This largest segment serves 150,000 retail customers, with industrial clients comprising 56% of kWh sales Regulated Utility Kilowatt-hours (kWh) Sold (Millions) | Customer Type | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Residential | 1,069 | 1,089 | 1,148 | | Commercial | 1,322 | 1,347 | 1,359 | | Industrial | 7,022 | 7,044 | 6,745 | | Municipal | 469 | 466 | 540 | | **Total Retail and Municipal** | **9,882** | **9,946** | **9,792** | | Other Power Suppliers | 2,680 | 2,819 | 3,149 | | **Total kWh Sold** | **12,562** | **12,765** | **12,941** | - Industrial customers, primarily taconite mining, are critical, representing **56% of total regulated utility kWh sales** in 2024; a one-million-ton change in taconite production is estimated to impact annual EPS by approximately **$0.07**[39](index=39&type=chunk)[43](index=43&type=chunk) - On January 27, 2025, major customer USS Corporation provided a **four-year notice of termination** for its electric service agreement, effective January 2029[50](index=50&type=chunk) [Power Supply](index=13&type=section&id=Power%20Supply) The company's power supply was 55% renewable in 2024 and is actively transitioning away from coal operations Regulated Utility Power Supply (2024) | Source | Net Capability (MW) | Generation & Purchases (MWh) | % of Total | | :--- | :--- | :--- | :--- | | Total Generation (Owned) | 1,630 | 5,832,105 | 44.9% | | - Coal-Fired | 820 | 3,794,254 | 29.2% | | - Wind | 522 | 1,279,468 | 9.9% | | Total Purchased Power | - | 7,147,244 | 55.1% | | - Long-Term Purchased Power | - | 4,348,790 | 33.5% | | **Total Regulated Utility Power Supply** | **-** | **12,979,349** | **100.0%** | - Coal consumption for electric generation at Minnesota Power's stations was **2.3 million tons** in 2024, down from 2.7 million tons in 2023[63](index=63&type=chunk) - Minnesota Power has long-term PPAs to purchase **250 MW of hydro capacity** from Manitoba Hydro through 2035 and the output from a **250 MW wind facility** (Nobles 2) through 2040[67](index=67&type=chunk)[68](index=68&type=chunk) [Regulatory Matters](index=17&type=section&id=Regulatory%20Matters) The company is regulated by state and federal commissions, with recent rate cases supporting its financial structure - The 2024 Minnesota General Rate Case was settled, resulting in an MPUC-approved rate increase of **$33.97 million**, a **9.78% ROE**, and a **53.00% equity ratio**[80](index=80&type=chunk) - The 2021 IRP, approved by the MPUC, outlines plans to add up to **700 MW of new wind and solar** resources and achieve coal-free operations by 2035[85](index=85&type=chunk) - The 2024 Wisconsin General Rate Case for SWL&P was approved, resulting in a **$5.5 million annual rate increase** and a **9.80% ROE**[87](index=87&type=chunk) [ALLETE Clean Energy](index=20&type=section&id=ALLETE%20Clean%20Energy) This segment develops and operates over 1,600 MW of wind generation across eight states under long-term contracts ALLETE Clean Energy Operating Wind Portfolio | Wind Energy Facility | Capacity (MW) | PSA Expiration | | :--- | :--- | :--- | | Armenia Mountain | 101 | 2031 | | Lake Benton | 104 | 2028 | | Storm Lake I | 108 | 2027 | | Storm Lake II | 77 | 2032 (10% PSA) | | Caddo | 303 | 2034 | | Diamond Spring | 303 | 2032-2035 | | Condon | 50 | 2028 | | Glen Ullin | 106 | 2039 | | South Peak | 80 | 2035 | [Corporate and Other](index=21&type=section&id=Corporate%20and%20Other) This segment includes renewable development, lignite coal supply, and development of a natural gas facility - New Energy, acquired in 2022, is a key growth driver with a development pipeline of over **2,000 MW of renewable projects**[104](index=104&type=chunk) - South Shore Energy is developing the NTEC, an approximately **600 MW natural gas facility**, with an estimated total project cost of **$700 million**[106](index=106&type=chunk) - BNI Energy produces approximately **4 million tons of lignite coal annually** under cost-plus fixed fee agreements extending through 2037[107](index=107&type=chunk) [Human Capital Management](index=23&type=section&id=Human%20Capital%20Management) ALLETE employed 1,616 people at year-end 2024, with a significant portion of its workforce unionized - As of year-end 2024, ALLETE had **1,616 employees**, with 1,564 being full-time[116](index=116&type=chunk) - **490 employees** at Minnesota Power and SWL&P are covered under collective bargaining agreements, mostly with IBEW Local 31, with agreements expiring in 2026 and 2027[116](index=116&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from customer concentration, regulatory compliance, operations, and its pending merger - A primary risk is customer concentration in the cyclical taconite industry, which accounted for **27% of consolidated operating revenue** in 2024[133](index=133&type=chunk)[134](index=134&type=chunk) - The company is subject to extensive environmental laws, with potential for **material costs** related to GHG emissions, coal ash management, and water discharge regulations[143](index=143&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - Risks related to the pending merger include potential delays, business disruptions, and substantial transaction costs, of which **$22.6 million after-tax** were incurred in 2024[197](index=197&type=chunk)[198](index=198&type=chunk)[200](index=200&type=chunk) [Item 1C. Cybersecurity](index=38&type=section&id=Item%201C.%20Cybersecurity) Cybersecurity risk is managed via a multilayered approach based on the NIST framework with board-level oversight - The company's cybersecurity program is based on the **NIST framework** and is managed by a dedicated team with oversight from the CTO and the Audit Committee of the Board of Directors[204](index=204&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) - Defenses include a comprehensive cybersecurity policy, required annual employee training, random phishing tests, and **multiple cyber event simulation exercises** per year[205](index=205&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=40&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock underperformed peers, and the pending merger restricts share repurchases and dividend increases - A quarterly dividend of **$0.73 per share** is payable on March 1, 2025; the pending Merger Agreement **restricts share repurchases** and limits dividend increases[217](index=217&type=chunk)[340](index=340&type=chunk) Cumulative Total Shareholder Return (2019-2024) | Index | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | ALLETE | $100 | $80 | $88 | $90 | $89 | $99 | | S&P 500 Index | $100 | $118 | $152 | $125 | $157 | $197 | | Philadelphia Utility Index | $100 | $103 | $121 | $122 | $111 | $134 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income decreased to $179.3 million in 2024, impacted by merger costs and the absence of a prior-year gain [2024 Compared to 2023](index=43&type=section&id=2024%20Compared%20to%202023) Net income fell due to lower results in clean energy and corporate segments, despite growth in regulated operations Net Income Attributable to ALLETE by Segment (Millions) | Segment | 2024 | 2023 | | :--- | :--- | :--- | | Regulated Operations | $160.9 | $147.2 | | ALLETE Clean Energy | $17.8 | $71.7 | | Corporate and Other | $0.6 | $28.2 | | **Total** | **$179.3** | **$247.1** | - The decrease in 2024 net income was primarily due to **$22.6 million after-tax merger expenses** and the absence of a 2023 after-tax gain of **$40.5 million** from a favorable arbitration ruling[229](index=229&type=chunk) Regulated Operations Financial Summary (Millions) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Operating Revenue – Utility | $1,242.7 | $1,238.3 | | Operating Income | $199.6 | $195.0 | | Net Income Attributable to ALLETE | $160.9 | $147.2 | [Critical Accounting Policies](index=48&type=section&id=Critical%20Accounting%20Policies) Key policies involve significant estimates for regulatory accounting, pensions, business combinations, and taxation - **Regulatory Accounting** allows the deferral of certain costs as regulatory assets based on the probability of future recovery through customer rates[258](index=258&type=chunk) - Pension expense calculations in 2024 used a weighted average expected long-term rate of return on assets of **6.84%** and a discount rate of **5.38%**[258](index=258&type=chunk)[259](index=259&type=chunk) - **Goodwill of $154.9 million** related to the New Energy acquisition is tested for impairment annually; the 2024 test indicated no impairment[262](index=262&type=chunk) [Outlook](index=50&type=section&id=Outlook) ALLETE targets 5-7% long-term EPS growth, driven by significant investments in regulated and renewable projects - The company has a long-term objective of **5% to 7% consolidated EPS growth** and expects Regulated Operations to comprise about **75% of consolidated net income** in 2025[267](index=267&type=chunk)[268](index=268&type=chunk) - Major transmission projects are underway, including the **North Plains Connector (~$3.2B HVDC line)** and an **$800M-$940M modernization** of its existing HVDC system[302](index=302&type=chunk)[305](index=305&type=chunk)[306](index=306&type=chunk) - Minnesota Power is advancing its clean energy goals with RFPs for up to **400 MW of wind** and **300 MW of solar** resources[297](index=297&type=chunk)[299](index=299&type=chunk) [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position and plans $5.0 billion in capital expenditures through 2029 Capital Structure (as of Dec 31) | Category (Millions) | 2024 | 2023 | | :--- | :--- | :--- | | ALLETE Equity | $2,848.0 | $2,809.6 | | Short-Term and Long-Term Debt | $1,808.0 | $1,799.4 | | **Debt-to-Capital Ratio** | **35%** | **35%** | Projected Capital Expenditures 2025-2029 (Millions) | Segment | 2025-2029 Total | | :--- | :--- | | Regulated Operations | $4,610 | | ALLETE Clean Energy | $40 | | Corporate and Other | $355 | | **Total Capital Expenditures** | **$5,005** | - The company's dividend payout ratio was **91%** in 2024, above its target range of 60% to 70%[339](index=339&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=64&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The audited financial statements show 2024 operating revenues of $1.53 billion and net income of $179.3 million Consolidated Statement of Income Highlights (Millions, except per share data) | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Total Operating Revenue | $1,529.8 | $1,879.8 | $1,570.7 | | Operating Income | $160.1 | $180.9 | $134.2 | | Net Income Attributable to ALLETE | $179.3 | $247.1 | $189.3 | | Diluted EPS | $3.10 | $4.30 | $3.38 | Consolidated Balance Sheet Highlights (Millions) | As of December 31 | 2024 | 2023 | | :--- | :--- | :--- | | Total Current Assets | $435.2 | $468.1 | | Property, Plant and Equipment – Net | $5,181.5 | $5,013.4 | | **Total Assets** | **$6,754.3** | **$6,656.4** | | Total Current Liabilities | $404.2 | $377.6 | | Long-Term Debt | $1,704.7 | $1,679.9 | | **Total Liabilities** | **$3,363.8** | **$3,249.3** | | **Total ALLETE Equity** | **$2,848.0** | **$2,809.6** | Consolidated Statement of Cash Flows Highlights (Millions) | Activity | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Cash from Operating Activities | $457.1 | $585.3 | $221.3 | | Cash used in Investing Activities | $(340.7) | $(283.6) | $(384.0) | | Cash used in Financing Activities | $(140.6) | $(262.5) | $155.2 | Part III [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=66&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of year-end 2024, 783,025 securities remained available for issuance under equity compensation plans Equity Compensation Plan Information (as of Dec 31, 2024) | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Securities Remaining Available for Future Issuance (c) | | :--- | :--- | :--- | :--- | | Approved by Security Holders | 227,422 | — | 783,025 | | Not Approved by Security Holders | — | — | — | | **Total** | **227,422** | **—** | **783,025** | Part IV [Item 15. Exhibits and Financial Statement Schedules](index=67&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all filed documents and includes Schedule II detailing valuation and qualifying account activity Schedule II – Valuation and Qualifying Accounts and Reserves (Millions) | Reserve Type | Balance at Beg. of 2024 | Additions Charged to Income | Deductions | Balance at End of 2024 | | :--- | :--- | :--- | :--- | :--- | | Reserve For Uncollectible Accounts | $1.6 | $1.4 | $1.3 | $1.7 | | Deferred Tax Asset Valuation Allowance | $58.0 | $(13.1) | — | $44.9 |

Core Viewpoint - ALLETE has entered into a definitive agreement with a partnership led by CPP Investments and GIP to be acquired for $67.00 per share, totaling $6.2 billion including debt assumption, with the transaction expected to close in mid-2025, pending shareholder and regulatory approvals [1] Group 1: Acquisition Details - The acquisition price is set at $67.00 per share in cash, amounting to $6.2 billion when including the assumption of debt [1] - The transaction is anticipated to close in mid-2025, contingent upon shareholder approval and regulatory clearances from MPUC, PSCW, and FERC [1] Group 2: Shareholder Insights - Shareholders of ALLETE could potentially earn a 12.3% annual return by holding shares until the expected settlement in mid-2025, based on the acquisition offer [2] - Dividends are expected to continue being paid to shareholders until the settlement date [2]

Part I. Financial Information [Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20-%20Unaudited) The company presents its unaudited consolidated balance sheet, income statement, and cash flow statement for the period ended September 30, 2024 [Consolidated Balance Sheet](index=6&type=section&id=Consolidated%20Balance%20Sheet) Total assets increased to $6.74 billion, driven by growth in Property, Plant and Equipment, while total equity saw a slight decrease Consolidated Balance Sheet Highlights (in Millions) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$6,737.2** | **$6,656.4** | | Total Current Assets | $483.4 | $468.1 | | Property, Plant and Equipment – Net | $5,112.8 | $5,013.4 | | **Total Liabilities** | **$3,344.6** | **$3,249.3** | | Long-Term Debt | $1,743.7 | $1,679.9 | | **Total Equity** | **$3,391.9** | **$3,406.6** | [Consolidated Statement of Income](index=7&type=section&id=Consolidated%20Statement%20of%20Income) Net income decreased to $45.0 million in Q3 2024, impacted by merger costs and the absence of a large 2023 arbitration gain Quarterly Financial Performance (in Millions, except EPS) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Total Operating Revenue | $407.2 | $378.8 | | Operating Income | $45.3 | $36.0 | | Net Income Attributable to ALLETE | $45.0 | $85.9 | | Diluted EPS | $0.78 | $1.49 | Nine-Month Financial Performance (in Millions, except EPS) | Metric | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | | Total Operating Revenue | $1,165.0 | $1,477.1 | | Operating Income | $122.0 | $137.8 | | Net Income Attributable to ALLETE | $128.7 | $195.6 | | Diluted EPS | $2.23 | $3.41 | [Consolidated Statement of Cash Flows](index=10&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Operating cash flow decreased to $367.3 million for the nine-month period, while investing cash use increased Cash Flow Summary (Nine Months Ended Sep 30, in Millions) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Cash from Operating Activities | $367.3 | $520.0 | | Cash used in Investing Activities | ($219.9) | ($200.6) | | Cash used in Financing Activities | ($115.8) | ($228.4) | | **Change in Cash** | **$31.6** | **$91.0** | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail key accounting policies, regulatory matters, the pending merger, and segment performance updates - The company is evaluating the SEC's final rule on climate-related disclosures, which is currently stayed pending judicial review[29](index=29&type=chunk) - ALLETE plans to adopt ASU 2023-07 for enhanced segment disclosures in its 2024 Form 10-K[30](index=30&type=chunk) [Management's Discussion and Analysis (MD&A)](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial results, segment performance, and strategic outlook, highlighting impacts from the pending merger - Net income for the first nine months of 2024 was **$128.7 million**, significantly lower than $195.6 million in 2023, attributed to **$19.5 million in after-tax merger transaction costs** and a prior-year gain[128](index=128&type=chunk) [Comparison of the Quarters Ended September 30, 2024 and 2023](index=37&type=section&id=Comparison%20of%20the%20Quarters%20Ended%20September%2030%2C%202024%20and%202023) Q3 2024 net income was impacted by a sharp decline at ALLETE Clean Energy, offsetting stable Regulated Operations results - Regulated Operations utility revenue decreased by **$3.8 million** due to lower fuel adjustment recoveries and transmission revenue[131](index=131&type=chunk) - ALLETE Clean Energy's operating revenue increased by **$19.9 million** due to the sale of the Whitetail wind project in 2024[140](index=140&type=chunk) - Corporate and Other revenue increased by **$12.3 million**, mainly from higher sales of renewable energy projects at New Energy[144](index=144&type=chunk) [Comparison of the Nine Months Ended September 30, 2024 and 2023](index=41&type=section&id=Comparison%20of%20the%20Nine%20Months%20Ended%20September%2030%2C%202024%20and%202023) Nine-month net income fell significantly due to a drop at ALLETE Clean Energy and $19.5 million in merger transaction costs - Regulated Operations utility revenue increased by **$9.5 million**, driven by interim rates and higher fuel adjustment recoveries[148](index=148&type=chunk) - ALLETE Clean Energy's operating revenue fell by **$327.9 million**, primarily because 2023 included large project sales[158](index=158&type=chunk) - Corporate and Other net income was significantly impacted by **$19.5 million in after-tax merger transaction costs**[164](index=164&type=chunk) [Outlook](index=46&type=section&id=Outlook) The company maintains a 5-7% long-term EPS growth target, focusing on its regulated utility business and major transmission projects - The company has a long-term objective of achieving **5% to 7% consolidated EPS growth**[168](index=168&type=chunk) - Regulated Operations are expected to comprise approximately **75% of total consolidated net income** in 2024[169](index=169&type=chunk) - The MPUC approved the settlement in the 2024 Minnesota General Rate Case, resulting in a **$33.97 million net rate increase** and a **9.78% return on equity**[173](index=173&type=chunk) - Major transmission projects are underway, including the North Plains Connector, the Duluth Loop Reliability Project, and the HVDC Transmission System Project (**$800M-$900M cost**)[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position and investment-grade credit ratings despite a negative outlook revision from S&P Capital Structure (as of Sep 30, 2024) | Component | Amount (Millions) | Percentage | | :--- | :--- | :--- | | ALLETE Equity | $2,831.2 | 54% | | Non-Controlling Interest | $560.7 | 11% | | Short-Term and Long-Term Debt | $1,794.4 | 35% | | **Total Capitalization** | **$5,187.0** | **100%** | - On May 7, 2024, S&P Global Ratings **revised its outlook on ALLETE to negative** from stable due to the pending merger, but affirmed all ratings[198](index=198&type=chunk) - Capital expenditures for the first nine months of 2024 totaled **$229.5 million**, up from $182.0 million in the same period of 2023[200](index=200&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks include commodity prices and interest rates, managed through regulatory mechanisms and debt structure - Exposure to commodity price risk in regulated operations is **largely mitigated** through fuel adjustment clauses and other rate recovery mechanisms[206](index=206&type=chunk) - A hypothetical **100 basis point increase** in interest rates would increase annual pre-tax interest expense by approximately **$0.3 million**[209](index=209&type=chunk) [Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective with no material changes to internal controls - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2024[210](index=210&type=chunk) - There were **no changes in internal control** over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[211](index=211&type=chunk) Part II. Other Information [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) Key risks are concentrated around the pending merger, including completion uncertainty, transaction costs, and potential litigation - There is **no assurance if or when the merger will be completed**, with a potential termination fee of **$116 million** payable by ALLETE under certain circumstances[215](index=215&type=chunk) - The company has incurred **$19.5 million in after-tax transaction costs** through September 30, 2024, and expects to incur additional material expenses[219](index=219&type=chunk) - The company has received demand letters and has been subject to complaints related to the merger, which could result in **substantial costs**[220](index=220&type=chunk)[221](index=221&type=chunk) [Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Information regarding mine safety violations is provided in Exhibit 95 of the Form 10-Q - Information concerning mine safety violations as required by the Dodd-Frank Act is included in **Exhibit 95** to this Form 10-Q[223](index=223&type=chunk) [Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including merger agreements, certifications, and XBRL data

Core Insights - New Energy Equity has successfully completed 14 solar projects for Public Storage in Minnesota, marking a significant step in Public Storage's goal to install solar on over 1,300 properties by 2025 [1][2] - The completed projects have a combined installed capacity of 2.28 MW, including a notable 0.35 MW solar array at the Como St. Paul facility, which is the second largest rooftop solar array in Public Storage's national portfolio [2][3] - These solar installations are expected to generate approximately 2,750 MWh of electricity annually, equivalent to powering 379 homes for one year [3] Company Overview - New Energy Equity, a subsidiary of ALLETE, specializes in developing, financing, and managing solar power generation assets, having developed over 500 megawatts of solar projects and closed more than $1.2 billion in clean energy investments [5] - Public Storage is a member of the S&P 500 and operates self-storage facilities across the United States and Europe, with interests in 3,049 facilities and a significant equity interest in Shurgard Self Storage Limited [6]