Williams Capital Group West Coast Utilities Seminar March 20 - 21, 2013
Black Hills Corp. Investment Highlights Utility-centered energy company Significant capital expenditures forecast over next three years Utility investments driving earnings growth Newer generation fleet reduces risk Oil and Gas…
Company Overview 4 Williams Capital Group-West Coast Utilities Seminar March 20-21, 2013 Pueblo Airport Generating Station
Black Hills Corporation Today Black Hills Power & Light incorporated Average 3 - month trading volume 1941 approx. 234,000 shares daily Listed on NYSE since 1980, trading Increased annual dividend for 43 under symbol BKH consecutive…
Black Hills Corporation Overview 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…
Electric and Gas Utilities Regulated Electric and Gas Utilities Serving over 769,000 customers Cheyenne Iowa Black Hills Nebraska Gas Light Power Gas Cheyenne Colorado Light Gas Kansas Gas Colorado Electric Electric…
Non-Regulated Energy Power Generation* Coal Mining* Ownership in three power generation facilities totaling 309 MW Serves as fuel supply to adjacent mine mouth electric power generation customers Wygen I - 69 MW of a 90 MW…
Strategic Objectives Williams Capital Group-West Coast Utilities Seminar March 20-21, 2013 Busch Ranch wind farm south of Pueblo
Strategic Objectives Utility-centered energy company well positioned to build upon a track record of successful utility growth Achieve top-tier operational performance in a culture of continuous improvement Lead industry peers in…
Strategic Objective Operating Performance 2012 Customer Service O&M Expense per Customer 70.00 Safety 60.00 50.00 BHC Other CIS IT 40.00 Collection Revenue Protection 30.00 Business Offices Call Center Cash…
Strategic Objective Operating Performance Power Plant Fleet Availability by Fuel Type Natural Gas Turbine Starting Reliability 100% 100% BHC Industry BHC Industry 96% 96% 92% 92% 88% 88% 84% 84% 80% 80% Coal (61%*) Gas…
Strategic Objective Operating Performance Generation Mix by Fuel Type Generation Mix by Fuel Type 1,200 80% % of Generation by Fuel type Megawatts of Generation 1,000 70% 60% 800 50% 600 40% 30% 400 20% 200 10% 0 0%…
Strategic Objective Earnings Growth Capital Investments by Segment Historical and Forecasted Capital Expenditures (in millions) 2009 2010 2011 2012 2013E* 2014E* 2015E* Generation 72 151 82 30 Transmission 38 36 40 21 Other 57 97…
Strategic Objective Earnings Growth Cheyenne Prairie Generating Station New Generation Helps Meet Growing Demand and New Environmental Regulations Overview: New 132 MW, 237 million generating plant jointly owned by Cheyenne Light and…
Strategic Objective Earnings Upside Oil and Gas Growth Strategy Prove up and capture value of existing oil and gas properties Prove up probable and possible reserves Capture value through optionality Participate in limited…
Strategic Objective Earnings Upside Oil and Gas Mancos Shale Strategy Three successful test wells drilled in 2011 affirmed potential in San Juan and Piceance Basins; second Piceance Basin test well produced condensate and higher Btu…
Financial Review Williams Capital Group-West Coast Utilities Seminar March 20-21, 2013
Growth Operating Income and EPS, as Adjusted* (in millions, except per share amount) 300.0 2.30 2.40 2.09 2009 2013 EPS CAGR = 13.6% 250.0 2.00 36.2 1.67 1.69 200.0 1.60 5.2 1.38 19.0 150.0 1.20 19.9 100.0 210.4 0.80…
Earnings Per Share Analysis Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 YTD 2012 YTD 2011 Net Income (loss) 0.60 0.68 (0.31) 0.78 0.70 1.85 1.24 Loss (income) from discontinued operations (0.16) 0.12 0.03 - - 0.16 (0.23) Income (loss)…
2012 Revenue/Op Income Summary 626.9 Electric Util* Total Revenue 614.3 (in millions) 454.1 1,272.2 Gas Util 1,173.8 554.5 81.0 Power Gen* 31.7 YTD 2012 57.8 YTD 2011 Coal Mining 66.9 79.1 Oil & Gas 79.8 (125.1)…
Capital Structure (In millions, except for ratios) Dec. 31, March 31, June 30, Sep. 30, Dec. 31, 2011 2012 2012 2012 2012 Capitalization Short-term Debt 347.5 234.0 452.6 553.3 381.0 Long-term Debt 1,280.4 1,272.0 1,044.9 943.0…
2013 Earnings Guidance Guidance for 2013, as most recently listed in our investor presentation on Feb. 6, 2013, for earnings from continuing operations, as adjusted, is in the range of 2.20 to 2.40 per share, based on the following…
Strategic Objective Credit Ratings Standard and Poors and Moodys changed their ratings outlook for Black Hills Corporation from stable to positive during October Standard & Poors changed Black Hills Corporations business risk profile…
Strategic Objective - Dividend Growth Increased for 43 consecutive years 1.55 Dividend yield was 3.5% on March 14, 2013 1.52 1.50 1.48 1.46 1.45 1.44 Annual Dividend 1.42 1.40 Per Share 1.40 1.35 1.30 1.25 1.20…
2013 Scorecard Strategy 2013 Progress and Future Initiatives UTILITIES + Acquire regulated utility properties in our geographic region Commence construction on Cheyenne Prairie Generating Station (CPGS) (Q2) + Construct additional cost…
Questions 29 Williams Capital Group-West Coast Utilities Seminar March 20-21, 2013
Use of Non-GAAP Financial Measures Use of Non-GAAP Financial Measures EBITDA and EBITDA, as adjusted We believe that our presentation of earnings before interest, taxes, depreciation and amortization (EBITDA) and EBITDA, as adjusted…
Use of Non-GAAP Financial Measures - EBITDA (in millions) Q4 2012 Q4 2011 YTD 2012 YTD 2011 Income from continuing operations 30.9 18.8 88.5 40.4 Depreciation, depletion and amortization 33.2 38.1 154.6 135.6 Impairment Oil and Gas…
Use of Non-GAAP Financial Measures Revenue, as Adjusted Power Generation Electric Gas Power Coal Oil and Inter-co Other Inter- Q4 2012 Revenue, as Adjusted Utilities Utilities Generation Mining Gas Corporate Lease Elims co Elims…
Use of Non-GAAP Financial Measures Operating Income, as adjusted (in millions) Electric Gas Power Coal Oil and YTD Dec 31, 2012 Utilities Utilities Generation Mining Gas Corporate Total Operating Income (loss) 131.7 66.2 44.8 2.1…
Appendix 34 Williams Capital Group-West Coast Utilities Seminar March 20-21, 2013
Black Hills Corporation History Originating company started in Deadwood in 1883 (130 years ago) Company was soon sold to new investors to introduce lights into all the towns and cities of the Hills and the name Black Hills Electric…
Black Hills Legal Organization 36 Williams Capital Group-West Coast Utilities Seminar March 20-21, 2013
Electric Utility Generation Availability(%) * Excludes KS HDD data since state has weather normalization 97.2 2,345 Q4 2012 95.6 Q4 2012 98.5 (Total for all gas service* areas weighted by Q3 2012 150 Q3 2012 95.4 Gas…
Siting Synergies Multiple generation sites with expansion potential along the Front Range Shared staff, facilities, land, infrastructure Each location has advantageous fuel supply logistics and/or wind potential Reduces asset…
Gillette Energy Complex Value proposition through integrated approach Coal production, generation, transmission utility and non-regulated assets Shared staff, facilities, land and infrastructure Wyodak Mine Wyodak Plant…
Pueblo Airport Generating Station 2012 Earnings Growth Driven By New Natural Gas-Fired Generation Projects that Started Serving Colorado Utility Customers on Jan. 1, 2012 Colorado Electrics 180 MW Generation Project completed on Dec.…
Utilities - Regulatory Updates Cheyenne Prairie Generating Station Air permits and final approvals received Major equipment for the project ordered Construction expected to commence spring 2013 with anticipated completion in October…
Rate Case Activity Jurisdiction Effective Revenue Return on Cap Status Date Increase Equity Structure BHE-CO Gas 12/10/2012 0.2 million 9.6% 50% debt/ Complete 50% equity CLF&P 7/1/2012 4.3 million 9.6% 46% debt/ Complete Electric…
Non-Regulated - Statistics IPP Generation Contract Availability (%) Coal Production Revenue and Expense per Ton Sold Coal-fired plants (Coal in millions of tons and overburden in millions (Units = tons sold plus cubic yards of…
Coal Mining Benefits of Revised Mine Plan Stripping Ratios* 2.1 to 1 2.1 to 1 2.1 to 1 1.5 to 1 1.6 to 1 2.2 to 1 2.1 to 1 1.8 to 1 1.5 to 1 1.3 to 1 * The ratio of the volume of overburden required to be…
Coal Contracts Summary Approximately 50% of coal production sold under contracts that include price adjustments based on actual mining costs plus a return on mine capital investments Most of the remaining 50% of coal production sold…
Oil and Gas Exploration & Development Program Note: approximate areas of geologic basins does not reflect BHEP acreage 46 Williams Capital Group-West Coast Utilities Seminar March 20-21, 2013
Reserve Data and Net Present Value Reserve calculations at Dec. 31, 2012 Average Average Net Oil Net Gas Net Equiv PV10 Price Oil Price Nat Gas (MBO) (BCF) (BCFE) (MM) Per BBL per MCF PDP* 3.8 54.1 76.9 140.8 85.39 2.25 PNP* 0.1…
Piceance Basin Mancos Shale Map Legend Horizontal Mancos Producing Well BHEP Piceance Basin Acreage 48 Williams Capital Group-West Coast Utilities Seminar March 20-21, 2013
San Juan Basin Mancos Shale 16 miles 45 miles Encana Five Mancos horizontal wells drilled . One reported completion 786 BOPD 838 MCFD Nine additional locations staked. Williams Capital Group-West Coast Utilities…
San Juan Basin Mancos Production Rosa Units are Williams wells 51 Williams Capital Group-West Coast Utilities Seminar March 20-21, 2013
Vision: Be the energy partner of choice. Mission: Improving life with energy. 52
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