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CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation

Black Hills Corporation · Feb 8, 2011 · 42 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 GROUP ENERGY SUMMIT – Black Hills Corporation – slide 1
    February 8-9, 2011 Credit Suisse Energy Summit David Emery Chairman, President & CEO Tony Cleberg Executive Vice President & CFO
  2. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 2
    Discussion Agenda Company Overview David Emery Chairman, President & CEO Financial Update Tony Cleberg Executive Vice President & CFO Strategic Overview David Emery Chairman, President & CEO Q&A 3
  3. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 3
    Company Overview David Emery Chairman, President & CEO
  4. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 4
    Black Hills Corporation We are 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 Omaha, NE, the company…
  5. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 5
    Diversification of Earnings: Predictable Cash Flows and Optimization of Assets Since 2007 our business portfolio has shifted from mostly non-regulated energy to mostly regulated electric and gas utilities Operating Income Assets…
  6. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 6
    Investment Highlights: A 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 Service…
  7. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 7
    Regulated Electric and Natural Gas Utilities Serving more than 762,000 Customers MT MT SD SD WY Black Hills Power WY Cheyenne NE IA NE Light Nebraska Iowa Gas Gas CO CO KS KS Colorado Kansas Gas Electric Colorado…
  8. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 8
    Non-regulated Segment Generates Electricity, Produces Natural Gas, Coal and Crude Oil, and Markets Energy Power Generation Coal Mining Smaller plant approach to incremental growth; facilitates Includes approximately 262 million…
  9. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 9
    Non-regulated Segment Generates Electricity, Produces Natural Gas, Coal and Crude Oil, and Markets Energy Oil and Gas Energy Marketing Includes operated wells in San Juan, Powder River, Big Horn Diversified energy commodities…
  10. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 10
    Effective and Proactive Regulatory and Asset Management Strategies New and interim rates implemented in 5 utility jurisdictions in 2010 (3 settlements) 47.1 million increase in annual revenues Pending & future rate cases…
  11. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 11
    Timeline of Events 2009 2010 2011 anticipated 2012 anticipated Strategic Development Enserco portfolio Coal added to Power & Environ portfolio Oil & Gas diversification added to portfolio strategic review complete Oil & Gas…
  12. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 12
    Financial Update Tony Cleberg Executive Vice President & CFO
  13. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 13
    2010 Full Year Summary Income from continuing operations and net income, as adjusted, was 70.4 million or 1.81 per share, compared to 55.0 million or 1.43 per share for the same period in 2009 (non-GAAP) Utilities Non-Regulated…
  14. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 14
    EPS Analysis Earnings Per Share (EPS) Q4 2009 FY 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 FY 2010 Shares Outstanding (in thousands) 38,790 38,684 39,009 38,902 39,133 39,437 39,091 Income (Loss) from Continuing 0.84 2.04 0.81 (0.22)…
  15. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 15
    FY Income Statement In millions, except per share amounts 2010 2009 Comments 2010 vs. 2009 Revenue 1,307.3 1,269.6 Rate case settlements Operating expense (1,122.3) (1,125.5) Gain on sale of assets 8.9 26.0 Wygen III, Elkhorn, Wygen…
  16. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 16
    FY Revenue/Operating Income Roll-Up In millions Revenue Operating Income (Loss) 2010 2009 2010 2009 Comments Utilities Electric Utilities 570.0 519.9 93.1 71.0 Rate case settlements Gas Utilities 550.7 580.3 66.3 55.2 Interim and…
  17. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 17
    Improved Balance Sheet and Liquidity Completed 500 million, unsecured corporate revolving credit facility (100 million accordion feature); expiring April 14, 2013 Completed 250 million committed 2-year stand-alone credit facility at…
  18. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 18
    Strategic Overview David Emery Chairman, President & CEO
  19. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 19
    Defined Investment Program Drives Earnings Growth Historical and Forecasted Capital Expenditures 497 (in millions) 0 17 426 2 148 13 336 348 12 113 25 21 5 21 41 43 52 49 205 89 5 19 65 72 242 233 186 177 105 22 11…
  20. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 20
    2012 Earnings Growth Driven By Natural Gas-Fired Generation Projects in Colorado Overview: Two generation projects owned by Utility and IPP segments; ready to serve Black Hills Energy Colorado electric utility customers by January 1,…
  21. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 21
    Additional BHE- COE Gas-Fired Generation Opportunity Colorado PUC approved BHE-COE plan to comply with Colorado Clean Air, Clean Jobs Act (HB 1365) Approved retirement of 42 MW W.N. Clark coal-fired generation facility Granted…
  22. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 22
    Post 2012 Earnings Growth Driven By Continued Long-term Investment Opportunities Excludes routine capital expenditures for maintenance of assets (millions) Capex Forecast Utility (Rate Base Growth) Renewable Generation Investments…
  23. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 23
    State and Federal Policy Compliance Creates Opportunities For Significant Earnings Growth Colorado Clean Air Clean Jobs Act Requires emission reductions from utility coal-fired electric generating units in Colorado; allows utilities…
  24. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 24
    BHEP Development Program Williston Basin Production from Middle Bakken and Three Forks formations Piceance Basin Planned Operations: BHEP does not operate and co-ventures Current production from Dakota and 1st Qtr 2011 1 Vertical…
  25. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 25
    2010 BKH Strategy Scorecard Strategy 2010 Progress & Future Initiatives UTILITIES 5 Complete BHE-COE rate case (settlement agreement approved 8/5/2010) + Acquire regulated utility properties in our geographic focus 5 Complete Wygen III…
  26. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 26
    Summary Strong improvement over 2009; strategic initiatives on track January 2011, Board of Directors approved a quarterly dividend on the common stock of 0.365 per share, equivalent to an annual dividend rate of 1.46 per share; 41st…
  27. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 27
    Q&A
  28. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 28
    Appendix
  29. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 29
    Electric Utilities Q4 Update Quarter Income Comparison Total MWh Sales Regulatory Update (from continuing operations in millions) (in millions) Utility Customers SD PUC approved settlement agreement Off-system Sales 7/7/2010 for…
  30. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 30
    Gas Utilities Q4 Update Quarter Income Comparison Total Dth Sales Regulatory Update (from continuing operations in millions) (in millions) On 8/18/2010, NE PSC approved rate request for 8.3 million annual revenue increase effective…
  31. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 31
    Energy Marketing Operational Summary Gross Margin by Strategy Realized and Unrealized Gross Margin (Combined Realized and Unrealized) (Total, Realized and Unrealized) Doing business as Enserco Energy 50.0 17.5 50.0 Inc. 30.0 28.5…
  32. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 32
    Power Generation Q4 Update Quarter Income Comparison Generation Availability (%) MW of Generation Capacity (from continuing operations in millions) (in millions) 100 100 100 98.9 96.9 98.0 99.7 100 99.7…
  33. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 33
    Coal Q4 Update Quarter Income Comparison Coal Production (from continuing operations in millions) (Coal in million tons Overburden in million cubic yards) Overburden Removed Coal Production 4.5 4.2 3.9 3.8 3.7 3.4…
  34. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 34
    Energy Marketing Q4 Update Quarter Income Comparison Avg. Daily Natural Gas Volumes Avg. Daily Crude Oil Volumes (from continuing operations in millions) (physical Bcf per day) (barrels per day) Prior Year Current Year…
  35. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 35
    Oil & Gas Q4 Update Quarter Income Comparison Bcf Equivalent Sales (from continuing operations in millions) Prior Year Current Year 3.9 3.6 3.5 3.4 2.9 2.9 3.5 2.9 3.3 3.2 3.1 2.7 3.2 2.8…
  36. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 36
    Utility Energy Efficiency & Renewable Programs Expanding our renewable energy portfolio at reasonable rates for customers Black Hills Power Partnered with South Dakota School of Mines & Technology in Rapid City, SD to construct a…
  37. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 37
    Efficient Cost Recovery Electric Utility Regulated Cost Recovery Mechanisms * Jurisdiction DSM/ Energy Fuel Cost Trans- Purchased Power Fixed Cost Efficiency mission Recovery BHP - South Dakota 5 5 5 BHP - Wyoming 5 5 5 BHP -…
  38. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 38
    Capital Structure In millions Dec. 31, Mar. 31, Jun. 30, Sept. 30, Dec. 31, 2009 2010 2010 2010 2010 Short term debt: Current maturities 35.2 24.4 4.5 5.3 5.2 Notes Payable 164.5 223.0 225.0 145.0 249.0 199.7 247.4 229.5 150.3…
  39. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 39
    Credit Facilities and Debt Proactively managing cash flows, capital expenditures and financing needs Primary Credit Facilities Capacity Utilized Available As of 12/31/2010 Corporate Revolver - Matures April 2013 500 million 149…
  40. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 40
    Credit Ratings Black Hills Corporate S&P Moodys Fitch Long-Term Issuer BBB- Baa3 BBB Senior Unsecured BBB- Baa3 BBB Outlook Stable Stable Stable Black Hills Power S&P Moodys Fitch Long-Term Issuer BBB- Baa2 BBB Senior Secured…
  41. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 41
    Vision: Be the energy partner of choice. Mission: Improving life with energy. 42
  42. CREDIT SUISSE GROUP ENERGY SUMMIT – Black Hills Corporation – slide 42
    Black Hills Corporation 625 9th Street Rapid City, SD 57701 NYSE Ticker: BKH www.blackhillscorp.com Company Contact Jason Ketchum Director, IR & Corporate Communications 605-721-2765 jason.ketchumblackhillscorp.com

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