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Q1 2010 EARNINGS CALL – Black Hills Corporation

Black Hills Corporation · May 7, 2010 · 45 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 2010 EARNINGS CALL – Black Hills Corporation – slide 1
    May 7, 2010 2010 First Quarter Update David Emery Chairman, President & CEO Tony Cleberg Executive Vice President & CFO
  2. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 2
    Discussion Agenda First 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 2010 EARNINGS CALL – Black Hills Corporation – slide 3
    First Quarter Review David Emery Chairman, President & CEO
  4. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 4
    2010 First Quarter Summary Income from continuing operations improved to 31.4 million (0.81 per share) compared to 25.6 million (0.66 per share) first quarter 2009 Utilities Non-Regulated Energy Income from continuing operations was…
  5. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 5
    Utility Highlights Income from continuing operations was 29.4 million compared to 26.6 million for Q1 2009 Wygen III began commercial operation 4/1/2010; ahead of schedule and under- budget BHP completed seven year PPA with City of…
  6. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 6
    Non-Regulated Energy Highlights Income from continuing operations was 7.1 million compared to a loss of 6.5 million in Q1 2009 BHCI new generation construction team in place; materials purchasing and contractor selection underway;…
  7. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 7
    Corporate Highlights Growth projects and integration efforts on track; demonstrated ability to access the capital markets Completed 500 million, unsecured corporate revolving credit facility (100 million accordion feature); expiring…
  8. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 8
    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 &…
  9. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 9
    Timeline of Events 2008 2009 2010 2011 anticipated Strategic Development Unified In-house bill Unified Unified IPP sale Inventory complete print/lock PeopleSoft Work Mgt Systems box system system Unified Aquila Unified Unified…
  10. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 10
    Financial Update Tony Cleberg Executive Vice President & CFO
  11. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 11
    Q1 EPS Analysis Earnings Per Share (EPS) 1st Quarter 2010 2009 Income from Continuing Operations 0.81 0.66 Exclude unique gain items: Unrealized gain on interest rate swaps -- (0.25) Gain on sale of Elkhorn (0.04) -- Gain on…
  12. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 12
    Rolling Four Quarter EPS Analysis Earnings Per Share (EPS) Q2 2009 Q3 2009 Q4 2009 Q1 2010 Income (Loss) from Continuing Operations 0.64 (0.10) 0.84 0.81 Exclude notable gain items: Elkhorn sale completed 3/2010 -- -- --…
  13. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 13
    Q1 Income Statement In millions, except per share amounts 2010 Q1 2009 Q1 Comments 2010 vs. 2009 Revenue 442.3 437.9 Improved Utility retail sales and power marketing Operating expense (375.3) (387.1) DD&A: 2010 28.4M and 2009 33.3M…
  14. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 14
    Q1 Revenue/Operating Income Roll-Up In millions Revenue Operating Income (Loss) 2010 2009 2010 2009 QTD QTD QTD QTD Comments Electric Utilities 148.6 137.1 20.2 19.2 Improved retail and marketing margins Gas Utilities 243.2 256.3…
  15. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 15
    Capital Structure In millions Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31, 2009 2009 2009 2009 2010 Short term debt: Current maturities 32.1 32.1 32.1 35.2 24.4 Notes Payable 479.8 270.5 350.5 164.5 223.0 511.9 302.6 382.6 199.7…
  16. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 16
    Strategic Overview David Emery Chairman, President & CEO
  17. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 17
    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 Utilitie s R eg ulated…
  18. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 18
    Growth Capital Investments Excludes routine capital expenditures, such as maintenance and new customer growth capital Excludes routine capital expenditures, such as maintenance and new customer growth capital (millions) 2008 - 2009…
  19. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 19
    Wygen III Serving utility customers on April 1, 2010 Power plant completed 3 months ahead of schedule and 7 million under budget Fourth plant built in the Neil Simpson Complex using Air-cooled condensing technology…
  20. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 20
    BHE-COE Generation Gas-fired generation to serve BHE COE utility customers on-track for commercial operation on 1/1/2012 BHE - COE utility-owned and BHCI non-regulated generation assets to be co-located at Pueblo, CO airport site…
  21. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 21
    Regulatory Update Rate Cases Filed /As Requested* Jurisdiction Date Filed Proposed Proposed Proposed Proposed Rate Status Revenue Return on Cap Base Increase Equity Structure BHP - SD 9/30/2009 32 million 11.5% 48% debt/ 393 million…
  22. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 22
    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…
  23. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 23
    Summary Strong overall performance and strategic initiatives on track 34% year-over-year improvement in income from continuing ops (as adjusted) Completion of Wygen III power plant 3 months ahead of schedule and 7 million under-…
  24. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 24
    Q&A
  25. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 25
    Appendix
  26. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 26
    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 Denver, CO, and Omaha, NE, the company…
  27. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 27
    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 *…
  28. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 28
    Electric Utilities Operational Summary Service Areas Revenue by Customer Class Off -system BHC electric utilities generate, 11% MT transmit and distribute electricity to Contract Ot her approximately 201,100 customers Wholesale…
  29. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 29
    Electric Utilities Q1 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 0.62 0.71 0.59…
  30. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 30
    Gas Utilities Operational Summary Service Areas Revenue by Customer Class Distributes natural gas to MT approximately 528,300 customers in Industrial Transportation CO, IA, KS, and NE SD Commercial 3% 4% 23% Includes 629 miles of…
  31. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 31
    Gas Utilities Q1 Update Quarter Income Comparison Total Dth Sales Capital Expenditures (from continuing operations in millions) (in millions) (in millions) 56.5 56.1 17.3 19.5 43.2 39.2 43.9 32.5 33.1 21.8 17.6 19.3 Prior…
  32. Q1 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. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 33
    Power Generation Q1 Update Quarter Income Comparison Generation Availability (%) Capital Expenditures (from continuing operations in millions) (in millions) 97.9 99.7 98.7 98.5 100 100 99.1 95.5 92.4 150.4…
  34. Q1 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. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 35
    Coal Q1 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. Q1 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. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 37
    Energy Marketing Q1 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) 13,332 13,500 2.3 13,400…
  38. Q1 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. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 39
    Oil & Gas Q1 Update Quarter Income Comparison Bcf Equivalent Sales Capital Expenditures** (from continuing operations in millions) (in millions) 2.3 3.8 3.9 3.6 3.8 3.5 3.1 3.3 3.2 3.3 3.2 3.5 3.4…
  40. Q1 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 National Wind For Schools project includes installation of a 2.4 KW wind generator in Box…
  41. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 41
    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 -…
  42. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 42
    Credit Facilities & Debt Proactively managing cash flows, capital expenditures and financing needs Primary Credit Facilities Capacity Utilized Available As of 3/31/2010 Enserco Credit Facility (Committed / Stand-alone) New May 2009…
  43. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 43
    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…
  44. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 44
    Vision: Be the energy partner of choice. Mission: Improving life with energy. 45
  45. Q1 2010 EARNINGS CALL – Black Hills Corporation – slide 45
    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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