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Q2 2010 EARNINGS CALL – Black Hills Corporation

Black Hills Corporation · Aug 6, 2010 · 46 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 2010 EARNINGS CALL – Black Hills Corporation – slide 1
    August 6, 2010 2010 Second Quarter Update David Emery Chairman, President & CEO Tony Cleberg Executive Vice President & CFO
  2. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 2
    Discussion Agenda Second 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 2010 EARNINGS CALL – Black Hills Corporation – slide 3
    Second Quarter Review David Emery Chairman, President & CEO
  4. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 4
    2010 Second Quarter Summary Income from continuing operations and net income, as adjusted, was 7.5 million or 0.19 per share, compared to 6.7 million or 0.18 per share for the same period in 2009 (non-GAAP) Utilities Non-Regulated…
  5. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 5
    Utility Highlights Income from continuing operations 6.3 million compared to 5.0 million for Q2 2009 Electric Utilities Wygen III began commercial operation 4/1/2010; ahead of schedule and under-budget SD PUC approved settlement…
  6. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 6
    Non-Regulated Energy Highlights Income from continuing operations 4.2 million compared to 2.8 million in Q2 2009 Construction underway on gas-fired power generation facilities to serve BHE COE customers; air permit issued on…
  7. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 7
    Corporate Highlights Growth projects on track; demonstrated ability to access the capital markets; integration efforts nearly complete Completed 500 million, unsecured corporate revolving credit facility (100 million accordion…
  8. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 8
    Financial Update Tony Cleberg Executive Vice President & CFO
  9. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 9
    Quarterly EPS Analysis Earnings Per Share (EPS) Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 (Loss) Income from Continuing Operations 0.64 (0.10) 0.84 0.81 (0.22) Exclude special gain items: Elkhorn sale completed 3/2010 -- -- --…
  10. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 10
    Q2 Income Statement In millions, except per share amounts 2010 2009 Comments 2010 vs. 2009 Revenue 271.3 257.3 Improved Electric Utility revenues Operating expense (240.5) (231.5) Wygen III/Wygen I outage Operating income 30.8 25.8…
  11. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 11
    Q2 Revenue/Operating Income Roll-Up In millions Revenue Operating Income (Loss) 2010 2009 2010 2009 Comments Utilities Electric Utilities 135.5 118.6 19.0 13.8 Rate case/off-system sales Gas Utilities 87.1 93.4 5.2 5.1 Sub-Total -…
  12. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 12
    Improved Balance Sheet and Liquidity Recent transactions and financings provide flexibility Received 62 million cash proceeds from sale of 23% interest in Wygen III power plant Completed 200 million offering of 10 year, 5.875%…
  13. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 13
    Capital Structure In millions Jun. 30, Sept. 30, Dec. 31, Mar. 31, Jun. 30, 2009 2009 2009 2010 2010 Short term debt: Current maturities 32.1 32.1 35.2 24.4 4.5 Notes Payable 270.5 350.5 164.5 223.0 225.0 302.6 382.6 199.7 247.4…
  14. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 14
    Strategic Overview David Emery Chairman, President & CEO
  15. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 15
    Positioned For Continued Growth Diversified platform based on stable cash flows, more predictable earnings and increased efficiencies Asset Mix By Business Focus (approx) 2010 Forecasted Capex By Segment Gas Utilities R eg ulated…
  16. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 16
    Growth Capital Investments Excludes routine capital investments for maintenance of assets Excludes routine capital expenditures for maintenance of assets (millions) 2008 - 2009 2010 2011 Project Total Wygen III 161 10 -- 185 52%…
  17. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 17
    Timeline of Events 2008 2009 2010 2011 anticipated Strategic Development Unified In-house bill Unified Unified inventory print/lock PeopleSoft work mgt systems box system system Unified performance Unified Unified Unified Unified…
  18. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 18
    BHE-COE Generation- 180 MW Two GE LMS-100 natural gas-fired turbines Capital Expenditure and Schedule Progress as of 6/30/2010 Expenditures Procurement Construction (250 -260 mill budget) contracts awarded contracts awarded…
  19. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 19
    BHCI Generation 200 MW Four 40 MW General Electric LM6000 natural gas-fired turbines and two 20 MW steam turbines (combined cycle) Capital Expenditure and Schedule Progress as of 6/30/2010 Expenditures Procurement Construction (240…
  20. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 20
    Regulatory Update 2010 Rate Cases Implemented Jurisdiction Effective Revenue Return on Cap Structure Rate Base Status Date Increase Equity BHP WY 6/1/2010 3.1 million 10.5% 48% debt / 27.0 million Implemented 52% equity BHP SD…
  21. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 21
    Colorado Energy Legislation Update Evaluating capital investment opportunities Renewable Standard to 30% by 2020 Clean Air - Clean Jobs Act HB 10 - 1001 HB 10 1365 Summary: Summary: Legislation requires investor-owned utilities to…
  22. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 22
    BHEP Williston Basin Bakken Shale Joint venture in Bakken Shale play has resulted in net daily production of 90 BOPD and 156 MMCFG Undeveloped lease interests covering 2,990 net acres with potential to drill 2.1 net wells (17 gross…
  23. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 23
    Strategy Scorecard Strategy 2010 Progress & Future Initiatives UTILITIES 5 File BHE-CO Electric rate case with an expected effective date in Q3 2010 + Acquire regulated utility properties in our geographic focus 5 Complete Wygen III…
  24. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 24
    Summary Strong overall performance and strategic initiatives on track Completed additional financings and transactions providing more liquidity for growth initiatives Completion of Wygen III power plant three months ahead of schedule…
  25. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 25
    Q&A
  26. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 26
    Appendix
  27. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 27
    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…
  28. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 28
    Electric Utilities Operational Summary Service Areas Revenue by Customer Class BHC electric utilities generate, Of f-syst em MT transmit and distribute electricity to 11% approximately 202,025 customers Contract Ot her 6% Resident…
  29. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 29
    Electric Utilities Q2 Update Quarter Income Comparison Total MWh Sales Capital Expenditures (from continuing operations in millions) (in millions) (in millions) Utility Customers Off-system Sales 0.64 0.59 0.62 0.71…
  30. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 30
    Gas Utilities Operational Summary Service Areas Revenue by Customer Class Industrial Distributes natural gas to MT 6% Transportation approximately 526,900 customers in Commercial 5% 21% CO, IA, KS, and NE SD Other 2% Includes…
  31. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 31
    Gas Utilities Q2 Update Quarter Income Comparison Total Dth Sales Capital Expenditures (from continuing operations in millions) (in millions) (in millions) 0.4 56.5 Current Year 43.2 56.1 39.2 43.9 32.5 33.1 21.8 17.6 20.3…
  32. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 32
    Power Generation Operational Summary Generation Locations Owned Capacity 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)…
  33. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 33
    Power Generation Q2 Update Quarter Income Comparison Generation Availability (%) Capital Expenditures (from continuing operations in millions) (in millions) 100 100 99.4 98.7 99.7 97.9 100 98.9 96.8 98.0…
  34. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 34
    Coal Operational Summary Facility Location Coal Production* (millions of tons) Includes approximately 268 million tons of low-sulfur Powder River Basin coal for low-cost, mine-mouth generation: a 41 year supply at 6.6 6.0…
  35. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 35
    Coal Q2 Update Quarter Income Comparison Coal Production Capital Expenditures (from continuing operations in millions) (Coal in million tons Overburden in million cubic yards) (in millions) Overburden Removed Coal Production…
  36. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 36
    Energy Marketing Operational Summary Producer Services: Marketing services for Proprietary Trading: Utilize knowledge of independent natural gas and crude oil producers the energy marketplace and customer relationships to create…
  37. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 37
    Energy Marketing Q2 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) 20,935 2.3 2.2 13,332…
  38. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 38
    Oil & Gas Operational Summary 2009 YE Production 2009 YE Reserves Gas 73% Includes operated wells in San Juan, Gas 82% Powder River, Big Horn, Piceance and Denver-Julesberg Basins Includes non-operated wells in California,…
  39. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 39
    Oil & Gas Q2 Update Quarter Income Comparison Bcf Equivalent Sales Capital Expenditures** (from continuing operations in millions) (in millions) 3.9 3.8 3.4 3.5 3.6 3.5 3.1 3.3 3.2 0.2 2.9 2.7 2.8…
  40. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 40
    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…
  41. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 41
    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 &…
  42. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 42
    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 -…
  43. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 43
    Credit Facilities & Debt Proactively managing cash flows, capital expenditures and financing needs Primary Credit Facilities Capacity Utilized Available As of 6/30/2010 Enserco Credit Facility (Committed / Stand-alone) New May 2010…
  44. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 44
    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…
  45. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 45
    Vision: Be the energy partner of choice. Mission: Improving life with energy. 46
  46. Q2 2010 EARNINGS CALL – Black Hills Corporation – slide 46
    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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