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AGA FINANCIAL FORUM – Black Hills Corporation

Black Hills Corporation · May 16, 2011 · 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. AGA FINANCIAL FORUM – Black Hills Corporation – slide 1
    2011 AGA Financial Forum May 16, 2011
  2. AGA FINANCIAL FORUM – Black Hills Corporation – slide 2
    Discussion Agenda Company Overview David Emery Chairman, President & CEO Operational Update Linn Evans President & COO, Utilities Financial Update Tony Cleberg Executive Vice President & CFO Strategic Overview David Emery…
  3. AGA FINANCIAL FORUM – Black Hills Corporation – slide 3
    Company Overview 4
  4. AGA FINANCIAL FORUM – 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 Papillion, NE, the…
  5. AGA FINANCIAL FORUM – Black Hills Corporation – slide 5
    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%…
  6. AGA FINANCIAL FORUM – Black Hills Corporation – slide 6
    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…
  7. AGA FINANCIAL FORUM – Black Hills Corporation – slide 7
    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 operated wells in San Juan, Powder River, and…
  8. AGA FINANCIAL FORUM – Black Hills Corporation – slide 8
    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…
  9. AGA FINANCIAL FORUM – Black Hills Corporation – slide 9
    Investment Highlights Defined long-term investment program Identified organic growth plus significant upside opportunities Poised for economic recovery Service territories and non-regulated businesses well positioned to capture…
  10. AGA FINANCIAL FORUM – Black Hills Corporation – slide 10
    Operational Update 11
  11. AGA FINANCIAL FORUM – Black Hills Corporation – slide 11
    Q1 2011 Overview 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 an annual…
  12. AGA FINANCIAL FORUM – Black Hills Corporation – slide 12
    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…
  13. AGA FINANCIAL FORUM – Black Hills Corporation – slide 13
    Regulatory Overview 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…
  14. AGA FINANCIAL FORUM – Black Hills Corporation – slide 14
    Strategic Initiatives Timeline 2009 2010 2011 anticipated 2012 anticipated Strategic Development Enserco portfolio Coal added to Power & Environ diversification portfolio added to portfolio Oil & Gas strategic Oil & Gas review…
  15. AGA FINANCIAL FORUM – Black Hills Corporation – slide 15
    Financial Update 16
  16. AGA FINANCIAL FORUM – Black Hills Corporation – slide 16
    Q1 2011 Financial Performance 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…
  17. AGA FINANCIAL FORUM – Black Hills Corporation – slide 17
    Q1 2011 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…
  18. AGA FINANCIAL FORUM – Black Hills Corporation – slide 18
    Q1 2011 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…
  19. AGA FINANCIAL FORUM – Black Hills Corporation – slide 19
    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)…
  20. AGA FINANCIAL FORUM – Black Hills Corporation – slide 20
    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…
  21. AGA FINANCIAL FORUM – Black Hills Corporation – slide 21
    Strategic Overview 22
  22. AGA FINANCIAL FORUM – Black Hills Corporation – slide 22
    Defined Investment Plan Drives Earnings Growth 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…
  23. AGA FINANCIAL FORUM – Black Hills Corporation – slide 23
    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…
  24. AGA FINANCIAL FORUM – Black Hills Corporation – slide 24
    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…
  25. AGA FINANCIAL FORUM – Black Hills Corporation – slide 25
    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.…
  26. AGA FINANCIAL FORUM – Black Hills Corporation – slide 26
    Summary Defined long-term investment program Identified organic growth plus significant upside opportunities Poised for economic recovery Service territories and non-regulated businesses well positioned to capture economic growth…
  27. AGA FINANCIAL FORUM – Black Hills Corporation – slide 27
    Questions and Answers 28
  28. AGA FINANCIAL FORUM – Black Hills Corporation – slide 28
    Appendix 29
  29. AGA FINANCIAL FORUM – Black Hills Corporation – slide 29
    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…
  30. AGA FINANCIAL FORUM – Black Hills Corporation – slide 30
    Q1 2011 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…
  31. AGA FINANCIAL FORUM – Black Hills Corporation – slide 31
    Electric Utilities Q1 2011 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…
  32. AGA FINANCIAL FORUM – Black Hills Corporation – slide 32
    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…
  33. AGA FINANCIAL FORUM – Black Hills Corporation – slide 33
    Gas Utilities Q1 2011 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…
  34. AGA FINANCIAL FORUM – Black Hills Corporation – slide 34
    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…
  35. AGA FINANCIAL FORUM – Black Hills Corporation – slide 35
    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 -…
  36. AGA FINANCIAL FORUM – Black Hills Corporation – slide 36
    Q1 2011 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…
  37. AGA FINANCIAL FORUM – Black Hills Corporation – slide 37
    Power Generation Q1 2011 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…
  38. AGA FINANCIAL FORUM – Black Hills Corporation – slide 38
    Oil & Gas Q1 2011 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…
  39. AGA FINANCIAL FORUM – Black Hills Corporation – slide 39
    Energy Marketing Overview 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…
  40. AGA FINANCIAL FORUM – Black Hills Corporation – slide 40
    Energy Marketing Q1 2011 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…
  41. AGA FINANCIAL FORUM – Black Hills Corporation – slide 41
    Coal Q1 2011 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…
  42. AGA FINANCIAL FORUM – Black Hills Corporation – slide 42
    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)…
  43. AGA FINANCIAL FORUM – Black Hills Corporation – slide 43
    Q1 2011 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…
  44. AGA FINANCIAL FORUM – Black Hills Corporation – slide 44
    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…
  45. AGA FINANCIAL FORUM – Black Hills Corporation – slide 45
    Credit Ratings as of May 13, 2011 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…
  46. AGA FINANCIAL FORUM – Black Hills Corporation – slide 46
    Vision: Be the energy partner of choice. Mission: Improving life with energy. 47

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