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Q1 2011 EARNINGS CALL – Black Hills Corporation

Black Hills Corporation · May 11, 2011 · 43 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. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 1
    2011 - 1st Quarter Earnings Presentation May 11, 2011
  2. Q1 2011 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. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 3
    Company Overview 4
  4. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 4
    2011 1st Quarter Summary Net Income, as adjusted, 23.3 million or 0.59 per share compared to 31.7 million or 0.82 per share in Q1 2010 Utilities Non-Regulated Energy Net income was 29.5 million compared to 29.4 Net loss was 3.5…
  5. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 5
    Utility Summary Net income 29.5 million compared to 29.4 million for Q1 2010 Effective February 10, 2011 Iowa Utilities Board approved settlement agreement for a 3.4 million annual revenue increase for Black Hills Energy IA Gas…
  6. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 6
    Non-regulated Energy Summary Net income (3.5) million compared to 7.0 million for Q1 2010 Construction over 55% complete on Black Hills Colorado IPPs 200 MW natural gas-fired generation facility to serve BHE CO Electric customers, with…
  7. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 7
    Non-Regulated Coal Mining Segment Reduced Q1 financial performance resulting from several factors. Operating and financial results will be impacted for remainder of 2011, dependent upon the success of the companys mitigation efforts 1)…
  8. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 8
    Corporate Summary Net income 0.9 million compared to (5.0) million for Q1 2010 Board of Directors approved quarterly dividend on the common stock of 0.365 per share, equivalent to an annual dividend rate of 1.46 per share 3.6…
  9. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 9
    Strategic Initiatives Timeline (Completed and Planned) 2009 2010 2011 anticipated 2012 anticipated Strategic Development Enserco portfolio Coal added to Power & Environ diversification portfolio added to portfolio Oil & Gas…
  10. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 10
    Financial Update 11
  11. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 11
    EPS Analysis Earnings Per Share (EPS) Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Wtd Avg Shares Outstanding (in thousands) 39,009 38,902 39,133 39,437 39,761 Net Income (loss) 0.81 (0.22) 0.32 0.85 0.68 Adjust for special loss/(gain)…
  12. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 12
    Q1 Income Statement In millions, except per share amounts 2011 2010 Comments 2011 vs. 2010 Revenue 403.3 426.5 Lower gas utility volumes and gas prices Operating expenses (347.6) (359.5) Lower electric utility fuel and purchased power…
  13. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 13
    Q1 Revenue/Operating Income Roll-Up In millions Revenue Operating Income (Loss) 2011 2010 2011 2010 Comments Utilities Electric Utilities 148.3 148.8 24.3 20.2 Up 20% due to 2010 rate cases Gas Utilities 230.2 243.2 36.5 34.3 Up 7%…
  14. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 14
    Capital Structure Mar. 31, Dec. 31, Mar. 31, In millions 2010 2010 2011 Short term debt Current maturities 24.4 5.2 4.3 Notes Payable 223.0 249.0 287.0 247.4 254.2 291.3 Long term debt 993.5 1,186.0 1,184.8 Total Debt 1,240.9…
  15. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 15
    Strategic Overview 16
  16. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 16
    Diversified Earnings Our business portfolio mix continues to reflect mostly regulated electric and gas utilities versus the 2007 mix of mostly non-regulated energy segments Operating Income Assets 57% 28% 16% 51% 27% 34% 2%…
  17. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 17
    Defined Investment Program Historical and Forecasted Capital Expenditures (in millions) 497 462 17 2 13 323 348 148 92 3 336 311 12 4 25 21 61 16 3 21 41 62 5 17 43 52 65 4 205 89 56 93 19 5 48 72 242 233 226 222 186…
  18. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 18
    Colorado Generation Projects 2012 Earnings Growth Driven By Natural Gas-Fired Generation Projects Overview: Two generation projects owned by Utility and IPP segments; ready to serve Black Hills Energy - Colorado Electric utility…
  19. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 19
    Environmental Policy Impact Assessment EPA Hazardous Air EPA National Ambient CO Clean Clean Rules (MACT) RICE Air Quality Air-Clean Water Act EPA Rules* Standards Jobs Bill Coal Ash Plant/Unit Segment Location Fuel MW 25 MW < 25 MW…
  20. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 20
    Long-term Growth Opportunities 2012-2015 Capital Expenditures Announced Future Total Excludes routine capital expenditures for maintenance of assets (in millions) Utility BHE-COE Construct third 88 MW utility owned gas-fired…
  21. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 21
    BHE-CO Electric Rate Request Filing Requested Date Filed April 28, 2011 Effective Date January 1, 2012 Revenue Increase 40.2 million ROE 11% Cap Structure 48% debt / 52% equity Rate Base 439 million Average Monthly Residential 18.94…
  22. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 22
    Oil and Gas Exploration & Development Program San Juan Basin Currently drilling first Mancos formation shale gas test well Over 19,000 net acres prospective for Mancos formation shale gas Piceance Basin Two horizontal Mancos…
  23. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 23
    2011 Scorecard Strategy 2010 Progress & Future Initiatives UTILITIES 5 File CPCN for another utility owned natural gas-fired turbine to replace retirement of coal + Acquire regulated utility properties in our geographic focus fired W.N.…
  24. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 24
    Revised 2011 Earnings Guidance Adjusted net income per share expected to be in range of 1.70 to 1.95 Revised 2011 Earnings Guidance Assumptions Planned capital expenditures of 462 million Settlement of the equity forward agreement…
  25. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 25
    2011 1st Quarter - Summary Growth initiatives on track; solid utility performance; non-regulated under performing April 26, 2011, Board of Directors approved a quarterly dividend on the common stock of 0.365 per share, equivalent to…
  26. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 26
    Questions and Answers 27
  27. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 27
    Appendix 28
  28. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 28
    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 Papillion, NE, the…
  29. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 29
    Electric and Natural Gas Utilities Regulated Electric and Natural Gas Utilities Serving more than 763,000 customers MT MT SD SD WY Black Hills Power WY Cheyenne NE IA NE Light Nebraska Iowa Gas Gas CO CO KS KS Colorado…
  30. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 30
    Regulatory Approach Effective and Proactive Regulatory and Asset Management Strategies BHE-CO Electric rate request filed 4/28/11 Request for a 40.2 million annual revenue increase to recover capital and operating expenses associated…
  31. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 31
    Electric Utilities Q1 Update Quarter Net Income Comparison Total MWh Sales Regulatory Update (in millions) (in millions) BHE-COE filed rate request with CO PUC Utility Customers 4/28/11 for 40.2 million annual revenue Off-system…
  32. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 32
    Gas Utilities Q1 Update Quarter Net Income Comparison Total Dth Sales Regulatory Update (in millions) (in millions) BHE-IA Gas received final approval for a rate increase of 3.4 million on 2/10/11 41.3 33.1 43.9 39.2 31.7 21.8…
  33. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 33
    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 -…
  34. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 34
    Oil & Gas and Energy Marketing Non-regulated Segment Generates Electricity, Produces Natural Gas, Coal and Crude Oil, and Markets Energy Oil and Gas Energy Marketing Includes operating interests in wells in San Juan, Powder…
  35. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 35
    Oil & Gas Q1 Update Quarter Net Income Comparison Bcf Equivalent Sales (in millions) Prior Year Current Year 3.5 3.2 3.3 2.9 3.5 2.9 3.4 3.2 2.8 2.9 3.1 2.8 2.7 2.3 Q1 2008 Q2 2008 Q3…
  36. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 36
    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 Inc. 50.0 17.5 50.0 Two…
  37. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 37
    Energy Marketing Q1 Update Quarter Net Income Comparison Avg. Daily Natural Gas Volumes Avg. Daily Crude Oil Volumes (in millions) (physical Bcf per day) (barrels per day) Prior Year Current Year 20,935 21,243 19,965…
  38. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 38
    Power Generation and Coal Mining 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…
  39. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 39
    Power Generation Q1 Update Quarter Net Income Comparison Generation Availability (%) MW of Generation Capacity (in millions) (in millions) 100 100 100 98.9 96.9 100 100 98.0 99.7 100 99.7 97.9 98.1 98.7…
  40. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 40
    Coal Q1 Update Quarter Net Income Comparison Coal Production (in millions) (Coal in million tons Overburden in million cubic yards) Overburden Removed Coal Production 4.5 4.2 Prior Year Current Year 3.9 3.8 3.7…
  41. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 41
    Credit Facilities and Debt Primary Credit Facilities Capacity Utilized Available As of 3/31/2011 Corporate Revolver - Matures April 2013 500 million 187 million 262 million 51 million (LC) Term Loan - Due December 2011 100 million…
  42. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 42
    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…
  43. Q1 2011 EARNINGS CALL – Black Hills Corporation – slide 43
    Vision: Be the energy partner of choice. Mission: Improving life with energy. 44

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