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CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation

Black Hills Corporation · Feb 6, 2012 · 33 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 1
    Credit Suisse Energy Summit 2012 February 6-8, 2012
  2. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 2
    Discussion Agenda David Emery Company Overview Chairman, President and CEO Financial Update Tony Cleberg Executive Vice President and CFO 2012 Review & Strategic David Emery Chairman, President and CEO Overview Q&A
  3. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 3
    Company Overview
  4. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 4
    Black Hills Corporation A diversified energy company with a tradition of exemplary service and a vision to be the energy partner of choice. Based in Rapid City, SD, with corporate offices in Denver, CO, and Papillion, NE, the company…
  5. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 5
    Business Transformation Strategic accomplishments since 2007 provide more focus on core utilities, power generation and fuel production businesses Operating Income Assets 57% 28% 16% 57% 27% 34% 2% 1% 9% 2007 (4% 2011 2007…
  6. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 6
    Electric and Natural Gas Utilities Regulated Electric and Natural Gas Utilities Serving over 762,000 customers MT MT SD SD WY Black Hills Power WY Cheyenne NE IA NE Light Nebraska Iowa Gas CO Gas CO KS KS Colorado…
  7. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 7
    Power Generation and Coal Mining Power Generation Coal Mining Ownership in three power generation facilities Includes approximately 262 million tons of low-sulfur Powder Wygen I - 69 MW of a 90 MW coal-fired facility in Gillette,…
  8. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 8
    Oil and Gas and Energy Marketing Non-regulated Group Generates Electricity, Produces Natural Gas, Coal and Crude Oil, and Markets Energy and Related Products Oil and Gas Energy Marketing Operated wells in San Juan, Powder River,…
  9. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 9
    Investment Highlights Diversified Energy Company with a Tradition of Exemplary Service Defined long-term investment program Identified organic growth plus significant upside opportunities Poised for economic recovery Utility…
  10. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 10
    Financial Update
  11. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 11
    2011 Full Year Summary Income from continuing operations, as adjusted, 67.7 million or 1.69 per share compared to 64.8 million or 1.67 per share in 2010 Utilities Non-Regulated Energy Income from continuing operations, as adjusted, was…
  12. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 12
    Earnings Per Share Analysis Earnings Per Share (EPS) Q4 Q1 Q2 Q3 Q4 YE YE 2010 2011 2011 2011 2011 2010 2011 Continuing Operations (GAAP) 0.88 0.73 0.09 (0.29) 0.44 1.62 1.01 Add back unique loss/subtract (gain) items Interest rate…
  13. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 13
    Trends in Earnings Regulated vs Non-Regulated Operating Income (Annual % Growth Rates) 200 (73%) 180 (5%) 160 (49%) Operating Income - in millions 140 26% 16% 26% 16% 120 26% 100 36% 36% 80 13% 16% 36% 60 40 EPS…
  14. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 14
    Income Statement Year to Date Ended December 31, (In millions, except per share amounts) 2009 2010 2011 Revenue 1,198.7 1,219.7 1,272.2 Gross margin 603.5 652.7 697.2 Operating expense (341.1) (351.6) (375.4) Depreciation…
  15. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 15
    Operating Income (Loss) Roll-up Year to Date Ended December 31, (In millions) Compound Annual 2009 2010 2011 Growth % Electric Utilities 71.0 93.1 108.7 Gas Utilities 55.2 66.3 76.3 126.2 159.4 185.0 21% Non-regulated…
  16. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 16
    Capital Expenditures v. DD&A Expenses Regulated Cap-Ex vs. DD&A (in millions) 300 Hello 250 200 3.9x 3.9x 2.8x 150 100 50 - 2009 2010 2011 Cap Ex DD&A Non-Regulated Cap-Ex vs. DD&A (in millions) 250 200 150…
  17. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 17
    Capital Structure Dec. 31, March 30, June 30, Sept. 30, Dec. 31, In millions 2010 2011 2011 2011 2011 Short term debt Current maturities 5.2 4.3 3.6 2.9 2.5 Notes payable 249.0 287.0 380.0 359.0 345.0 254.2 291.3 383.6 361.9 347.5…
  18. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 18
    Guidance Reaffirmed Black Hills Corp. reaffirms the guidance for 2012 net income, as adjusted, from continuing operations to be in the range of 2.00 to 2.20 per share as previously issued on Jan. 18, 2012, based on the following…
  19. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 19
    2012 Review
  20. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 20
    FY 2011 Utility Highlights Successful execution of Strategic Plan in 2011 will yield earnings growth in 2012 and beyond Completed Colorado Electrics 180 MW power plant project for 230 million Began serving customers on Jan. 1, 2012…
  21. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 21
    FY 2011 Non-Regulated Highlights Strategy Refinement for Non- Regulated Energy Group Oil and Gas Completed strategy review and new leader joined BHEP in mid-Dec. Mancos shale test drilling program showing promising results; reserve…
  22. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 22
    FY 2011 Corporate Highlights Recognized non-cash unrealized mark-to-market loss on certain interest rate swaps of 42.0 million in 2011 compared to 15.2 million loss in 2010 On Nov. 1, 2011 settled Equity Forward Agreements by issuing…
  23. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 23
    Strategic Overview
  24. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 24
    Defined Investment Program Drives Earnings Growth Historical and Forecasted Capital Expenditures (in millions) 581 7 497 5 432 124 17 437 2 348 19 55 148 10 3 336 12 99 21 112 25 5 41 21 205 43 522 90 46 89 19 44 384…
  25. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 25
    Long-term Growth Opportunities Announced 2012-2015 Capital Expenditures Excludes routine capital expenditures for maintenance of assets (in Expected In- 2011 2012 2013 millions) Service Date Future Total Utility Colorado Electric 50%…
  26. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 26
    BHE Colorado Electric Regulatory Update New Rates Effective Jan. 1, 2012 Dates Revenue Return on Capital Rate Base Status Increase Equity Structure Requested 4/28/2011 40.2 million 11% 48% debt / 439 million Rate request to recover…
  27. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 27
    Colorado Generation Projects Completed 2012 Earnings Growth Driven By New Natural Gas-Fired Generation Projects That Started Serving Colorado Utility Customers on Jan. 1, 2012 Colorado Electrics 180 MW Generation Project completed on…
  28. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 28
    Colorado Electric - Wind Energy Project New Wind Project Helps Meet Renewable Energy Standards In Colorado Overview: Project consists of sixteen 1.8 MW turbines for total 29 MW; ready to serve Colorado Electrics utility customers in Q4…
  29. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 29
    Impact of EPA Regulations Industrial & Commercial Boiler Regulations for Area Sources of Hazardous Air Pollutants (Boiler MACT Rules) Rules effective May 20, 2011 with compliance deadline of March 21, 2014 Anticipate retirement of…
  30. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 30
    Oil and Gas - Mancos Shale Update 2011 Mancos Drilling Program: Well Test Information Current Daily Production 1/31/12 Lateral Initial Gas Conden Frac Load Length Frac Rate Gas -sate Water Basin/Well Feet Stages MMCFD MMCFD Bbls Bbls…
  31. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 31
    Oil & Gas - Mancos Shale Update Held By Production legacy assets San Juan Basin - 19,400 net acres (average royalty 20%) Approximately 120 potential wells on 160 acre spacing Piceance Basin - 54,700 net acres (average royalty…
  32. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 32
    2011 Summary Focused on Serving Customers and Building Shareholder Value Strategy & Business Mix Refined Strong Execution on Major Projects in 2011 Over 300 Million of New Growth Projects Announced and Progressing Well…
  33. CREDIT SUISSE ENERGY SUMMIT 2012 – Black Hills Corporation – slide 33
    Appendix Supplemental appendix slides available at the Investor Relations link at www.blackhillscorp.com

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