David Emery Chairman, President & CEO Tony Cleberg Executive Vice President & CFO May 1, 2009 2009 First Quarter Update 1
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
Quarter Review David Emery Chairman, President & CEO 4
Business Highlights Focused strategy, talented and dedicated employees, access to capital markets, and opportunity for operating efficiencies as integration continues Strong financial & operational performance; some economic impact…
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 0.53 186.2 178.3…
Gas Utilities Quarter Income Comparison Total Dth Sales Capital Expenditures (from continuing operations in millions) (in millions) (in millions) 46 49.7 42.5 17.3 19.3 17.3 39.2 32.5 FY 2008* Forecasted…
Power Generation Quarter Income Comparison Generation Availability (%) Capital Expenditures (from continuing operations in millions) (in millions) 99.9 99.4 98.8 98.0 98.0 97.4 96.9 96.8 95.5 95.5…
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 3.4 3.2…
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) 11,063 10,803 10,200 9,700 9,200…
Oil & Gas Quarter Income Comparison Bcf Equivalent Sales Capital Expenditures** (from continuing operations in millions) (in millions) 2.6 Prior Year Current Year 158,846 89,169 -25.7 72,153 3.9 3.8 3.8 3.7 3.6…
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 &…
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…
Financial Update Tony Cleberg Executive Vice President & CFO 14
Earnings Drivers Operational performance strong; some economic impact Utilities Non-Regulated Energy Seasonally strong quarter Oil & Gas impacted by lower commodity prices Gas utilities performed well Ceiling test impairment…
Earnings Per Share Analysis Earnings Per Share (EPS) 1st Quarter 2009 2008 Income from Continuing Operations 0.66 0.31 Exclude notable gain items: Wygen I Sale Completed in January 2009 (0.44) - Unrealized Gain on Interest Rate…
Consolidated Income Statement In millions, except per share amounts 2009 2008 QTD EPS QTD EPS Comments 2009 vs. 2008 Revenue 437.9 - 152.9 - Addition of BHE properties Operating expense (387.1) - (127.4) - Subtotal 50.8 1.31 25.5 0.66…
Revenue / Operating Income Roll-Up In millions Revenue Operating Income 2009 2008 2009 2008 QTD QTD QTD QTD Comments Electric Utilities 137.1 99.6 19.2 19.9 BHE Colorado Electric Gas Utilities 256.3 - 29.4 - BHE Gas Utilities 393.4…
Consolidated Statement of Capitalization In millions Mar. 31, Dec. 31, 2009 2008 Short term debt: Current maturities 32.1 2.1 Corporate 479.8 703.8 511.9 705.9 Long term debt: Corporate 224.8 224.9 Utilities 246.2 276.2…
Liquidity & Credit Update Proactively managing cash flows, capital expenditures and credit needs in balance with our growth strategy Primary Credit Facilities Capacity Utilized Available As of 3/31/2009 Bridge Loan (BHE acquisition)…
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…
Strategic Overview David Emery Chairman, President & CEO 22
Strong Financial Foundation Diversified platform for growth based on stable cash flows, more predictable earnings and increased efficiencies Balanced asset mix: approximately 2/3 regulated utility and 1/3 non-regulated energy…
Regulatory Update Delivering the service and reliability customers depend on and the value investors expect Overview Status New FERC transmission rates implemented January 1, 2009 representing Black Hills Power 3.8 million increase…
BHE - Colorado Gas - Rate Case Update Requested Approved Date June 30, 2008 (filed) April 1, 2009 (effective) Revenue Increase 2.8 million 1.4 million ROE 11.5% 10.25% Cap Structure 49.5% debt / 50.5% equity 49.52% debt / 50.48%…
Efficient Cost Recovery Cost Adjustment Mechanisms * Jurisdiction Bad Debt Weather Fuel Cost Trans- Purchased Fixed Cost Normal. mission Power Recovery Black Hills Power South Dakota 5 5 5 Wyoming Montana 5 5 FERC 5 Cheyenne Light…
Utility Energy Efficiency & Renewable Programs Expanding our renewable energy portfolio at reasonable rates for customers CLFP 20 year purchased power agreement for 30 MW of wind energy from Silver Sage Wind Farm BHE - Colorado…
Growth Oriented Opportunities Growth projects & capital investments a priority and continue to build value Excludes routine capital expenditures, such as maintenance and new customer growth capital (millions) 2008 2009-2011 Total…
BHE - Colorado ERP Utility-owned generation provides lowest cost, most reliable long-term power for customers August 2008 -- CO Electric Resource Plan Filed BHE Colorado Electric filed a proposal with the Colorado Public Utility…
Strategy Scorecard Strategy 2009 Progress 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 (4/2009) + Construct…
Summary Strong financial & operational performance; some economic impact Liquidity position of 493 million; improved by over 180 million since beginning of year Systems integration & process efficiency projects progressing 39th…
Q&A 32
Vision: Be the energy partner of choice. Mission: Improving life with energy. 33
Appendix 34
Black Hills Footprint 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 *…
Electric Utilities Operational Summary Service Areas Customer Class by Revenue Our electric utilities generate, transmit MT Other and distribute electricity to Off -system 3% Resident ial approximately 202,100 customers Black Hills…
Gas Utilities Operational Summary Service Areas Customer Class by Revenue 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…
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…
Coal Operational Summary Facility Location Coal Production (millions of tons) Includes approximately 274 million 6.0 tons of low-sulfur Powder River Basin 2008 6.0 coal for low-cost, mine-mouth 5.0 generation: a 42 year supply at…
Energy Marketing Operational Summary Four Primary Business Strategies (by approximate % gross margin rounded to nearest 5%) Doing business under the name Proprietary Trading 25% Proprietary Trading 30% Enserco Proprietary Trading…
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…
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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