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Q2 2009 EARNINGS CALL – Black Hills Corporation

Black Hills Corporation · Aug 7, 2009 · 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. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 1
    David Emery Chairman, President & CEO Tony Cleberg Executive Vice President & CFO August 7, 2009 2009 Second Quarter Update 1
  2. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 2
    Discussion Agenda Quarter Review David Emery Chairman, President & CEO Financial Update Tony Cleberg Executive Vice President & CFO Strategic Overview David Emery Chairman, President & CEO Q&A 3
  3. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 3
    Quarter Review David Emery Chairman, President & CEO 4
  4. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 4
    Q2 Business Highlights Operations performing well and company positioned for growth Operations performed well; seasonally strong quarter for gas utilities Completed several critical financing transactions Issued 250 million senior…
  5. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 5
    Electric Utilities Quarter Income Comparison Total MWh Sales Capital Expenditures (from continuing operations in millions) (in millions) (in millions) 0.32 Utility Customers Off-system Sales 0.42 0.53 197.4 0.40 9.6…
  6. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 6
    Gas Utilities Quarter Income Comparison Total Dth Sales Capital Expenditures (from continuing operations in millions) (in millions) (in millions) 0.4 46.0 49.7 42.5 19.3 32.5 39.2 17.3 21.8 FY 2008* Forecasted…
  7. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 7
    Power Generation Quarter Income Comparison Generation Availability (%) Capital Expenditures (from continuing operations in millions) (in millions) 99.9 99.4 99.1 98.5 98.0 98.0 97.4 96.9 96.8 95.5…
  8. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 8
    Coal Quarter Income Comparison Coal Production Capital Expenditures (from continuing operations in millions) (Coal in million tons Overburden in million cubic yards) (in millions) Coal Production Overburden Removed 0.5…
  9. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 9
    Energy Marketing 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) 2.3 2.2 11,846 11,063 10,803…
  10. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 10
    Oil & Gas Quarter Income Comparison Bcf Equivalent Sales Capital Expenditures** (from continuing operations in millions) (in millions) 158.8 89.2 72.2 7.2 3.9 3.8 3.8 3.7 13.0 3.6 3.5 3.5 3.4…
  11. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 11
    Unification Update Building scalable platform of unified systems and processes to gain efficiencies and prepare for future growth People Processes Systems Common values, aligned goals, Integrate best practices From complex &…
  12. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 12
    Timeline of Events 2008 2009 2010 anticipated 2011 anticipated Strategic Development Unified Unified Unified IPP sale Inventory complete PeopleSoft Work Mgt Systems system system Aquila Unified Unified Unified Unified Unified…
  13. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 13
    Financial Update Tony Cleberg Executive Vice President & CFO 14
  14. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 14
    Earnings Drivers Operations performed well; natural gas prices weak Utilities Non-Regulated Energy Seasonally strong quarter for natural gas utilities Oil & Gas impacted by lower commodity prices Decline in off-system sales margins…
  15. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 15
    Q2 Earnings Per Share Analysis Earnings Per Share (EPS) 2nd Quarter 2009 2008 Income from Continuing Operations 0.64 0.34 Exclude notable gain items: Unrealized Gain on Interest Rate Swap (0.53) -- Add-back notable loss items:…
  16. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 16
    Rolling Earnings Per Share Analysis Earnings Per Share (EPS) Q3 2008* Q4 2008 Q1 2009 Q2 2009 Income from Continuing Operations 0.51 (2.52) 0.66 0.64 Exclude notable gain items: Wygen I Sale Completed in January 2009 -- --…
  17. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 17
    Consolidated Income Statement In millions, except per share amounts 2009 2008 QTD EPS QTD EPS Comments 2009 vs. 2008 Revenue 257.3 153.3 Addition of BHE properties Operating expense (231.5) (127.8) Operating income 25.8 0.67 25.5 0.66…
  18. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 18
    Revenue / Operating Income Roll-Up In millions Revenue Operating Income (Loss) 2009 2008 2009 2008 QTD QTD QTD QTD Comments Electric Utilities 118.6 93.6 13.8 17.9 Lower off-system sales margins Gas Utilities 93.4 - 5.1 -…
  19. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 19
    Consolidated Statement of Capitalization In millions Dec. 31, Mar. 31, Jun. 30, 2008 2009 2009 Short term debt: Current maturities 2.1 32.1 32.1 Corporate 703.8 479.8 270.5 705.9 511.9 302.6 Long term debt 501.3 471.2 719.2…
  20. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 20
    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…
  21. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 21
    Credit Facilities & Debt Proactively managing cash flows, capital expenditures and credit needs in balance with our growth strategy Primary Credit Facilities Capacity Utilized Available As of 6/30/2009 Bridge Loan (BHE acquisition)…
  22. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 22
    Strategic Overview David Emery Chairman, President & CEO 23
  23. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 23
    Positioned For Growth Diversified platform for growth based on stable cash flows, more predictable earnings and increased efficiencies Asset Mix By Business Focus (approx) 2009 Forecasted Capex By Segment R e gulate d Utility Gas…
  24. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 24
    Growth Oriented Opportunities Growth projects & capital investments a priority to grow earnings and build shareholder value Excludes routine capital expenditures, such as maintenance and new customer growth capital (millions) 2008…
  25. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 25
    BHE - Colorado ERP Utility-owned generation provides lowest cost, most reliable long-term power for customers August 2008: BHE - CO Electric Resource Plan Filed BHE Colorado Electric filed a proposal with the Colorado Public Utility…
  26. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 26
    Regulatory Update Delivering the service and reliability customers depend on and the value investors expect Jurisdiction Overview Status New FERC transmission rates implemented January 1, 2009 representing Black Hills Power 3.8…
  27. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 27
    Efficient Cost Recovery Cost Recovery Mechanisms * Regulated Jurisdiction DSM/ Capital Bad Debt Weather Fuel Cost Trans- Purchased Fixed Cost Energy Additions Normal. mission Power Recovery Efficiency BHP - South Dakota 5 5 5 BHP -…
  28. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 28
    Utility Energy Efficiency & Renewable Programs Expanding our renewable energy portfolio at reasonable rates for customers Black Hills Power National Wind For Schools project includes installation of a 2.4 KW wind generator in Box…
  29. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 29
    Strategy Scorecard Strategy 2009 Progress & Future Initiatives UTILITIES 5 Complete BHP FERC rate case (1/2009) + Acquire regulated utility properties in our geographic focus 5 Close on sale of 25% interest in Wygen III to MDU…
  30. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 30
    Summary Operations performed well; seasonally strong quarter for gas utilities Completed several critical financing transactions Issued 250 million senior notes Retired 383 million acquisition facility Completed 300 million energy…
  31. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 31
    Q&A 32
  32. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 32
    Vision: Be the energy partner of choice. Mission: Improving life with energy. 33
  33. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 33
    Appendix 34
  34. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 34
    Black Hills Footprint 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 Golden, CO, and Omaha, NE, the company…
  35. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 35
    Black Hills Corporation An integrated and diversified energy company Fuel, Generation & Utilities Utilities Gas Utilities Electric Utilities Colorado Natural Gas Black Hills Power Kansas Natural Gas Cheyenne Light, Fuel & Power *…
  36. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 36
    Electric Utilities Operational Summary Service Areas Revenue by Customer Class Our electric utilities generate, transmit MT Other and distribute electricity to Off -system 3% Resident ial approximately 202,100 customers Black Hills…
  37. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 37
    Gas Utilities Operational Summary Service Areas Revenue by Customer Class Industrial MT 7% Distributes natural gas to approximately 524,000 customers in SD Transportation 3% Commercial CO, IA, KS, and NE WY 24% Gas Operations…
  38. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 38
    Power Generation Operational Summary Generation Locations Construction Projects Managed Name Fuel Size In-Service Date Neil Simpson II (WY) Coal 90MW 9/1995 Smaller plant approach to incremental Neil Simpson CT (WY) Gas 40MW 6/2000…
  39. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 39
    Coal Operational Summary Facility Location Coal Production (millions of tons) Includes approximately 274 million tons of low-sulfur Powder River Basin coal for low-cost, mine-mouth generation: a 42 year supply at 6.0 6.0…
  40. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 40
    Energy Marketing Operational Summary Four Primary Business Strategies (by approximate % gross margin rounded to nearest 5%) Producer Services 10% Doing business under the name Producer Services 15% Producer Services 25% Enserco…
  41. Q2 2009 EARNINGS CALL – Black Hills Corporation – slide 41
    Oil & Gas Operational Summary 2008 YE Reserves 2008 YE Production Includes operated wells in San Juan Gas 83% Gas 83% Basin, Powder River Basin, Big Horn Basin, Piceance Basin and Denver Julesberg Basin Includes non-operated…
  42. Q2 2009 EARNINGS CALL – 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 43

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