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
Company Overview 4
Q2 2011Summary Net Income, as adjusted, 12.9 million or 0.32 per share compared to 7.5 million or 0.19 per share in Q2 2010 Utilities Non-Regulated Energy Net income was 13.0 million compared to 6.3 million Net income was 3.8…
Utility Summary Net Income increased 106% and New Growth Project Announced Implementation in 2010 of new customer rates driving earnings improvement; approval of environmental rider for Wyodak plant has annual revenue impact of 3.1…
Non-regulated Energy Summary Net income 3.8 million compared to 4.2 million for Q2 2010 Power Generation Earnings up 1.0 million; 2010 results negatively impacted by Wygen I outage Construction over 77% complete on Colorado IPP s 260…
Corporate Summary Net loss 9.1 million compared to net loss of 19.2 million for Q2 2010 5.1 million, or 0.13 per share after-tax unrealized mark-to-market non-cash loss from interest rate swaps as compared to 16.2 million loss in Q2…
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…
Financial Update 10
EPS Analysis Earnings Per Share (EPS) Q2 Q3 Q4 Q1 Q2 2010 2010 2010 2011 2011 Wtd Avg Shares Outstanding (in thousands) 38,902 39,133 39,437 39,761 39,823 Net Income (loss) (0.22) 0.32 0.85 0.68 0.19 Adjust for special loss/(gain)…
Q2 2011 Income Statement In millions, except per share amounts 2011 2010 Comments 2011 vs. 2010 Revenue 273.1 256.3 Gross Margin 168.7 158.1 rate adjustments & weather improved utility Operating expenses (126.1) (127.3) margins…
Q2 2011 Revenue/Operating Income Roll-Up Revenue Operating In millions Income (Loss) 2011 2010 2011 2010 Comments Utilities Electric Utilities 139.5 136.3 22.6 19.0 Realizing return on investments from rate adjustments Gas…
Capital Structure June 30, Dec. 31, June 30, In millions 2010 2010 2011 Short term debt Current maturities 4.5 5.2 3.6 Notes payable 225.0 249.0 380.0 229.5 254.2 383.6 Long term debt 990.1 1,186.0 1,183.6 Total Debt 1,219.6 1,440.2…
Strategic Overview 15
Diversified Earnings Business portfolio mix reflects primarily regulated electric and gas utilities versus 2007 mix of mostly non-regulated energy segments Operating Income Assets 56% 28% 16% 51% 27% 34% 2% 1% Trailing 10%…
Defined Investment Program Drives Earnings Growth Historical and Forecasted Capital Expenditures including Transmission (in millions) 497 457 441 17 439 3 2 3 4 17 12 4 348 148 16 92 93 336 12 62 25 21 56 48 21 41 67 5 43…
Colorado Generation Projects 2012 Earnings Growth Driven By New Natural Gas-Fired Generation Projects Overview: Two generation projects in Electric Utilities and Power Generation segments; begin serving Colorado Electric utility…
Environmental Policy Impact Assessment EPA EPA Hazardous Air National Ambient CO Clean Clean RICE Rules (MACT) Air Quality Air-Clean Water Act EPA Rules* Standards Jobs Bill Coal Ash Plant/Unit Segment Location Fuel MW 25 MW < 25…
Long-term Growth Opportunities 2012-2015 Capital Expenditures Expected In- Announced Future Total Excludes routine capital expenditures for maintenance of assets (in millions) Service Date Utility Colorado Electric 88 MW utility owned…
Colorado Electric Rate Request Request to recover investments in new generation, transmission and distribution facilities and increased operating expenses since 2009 Request includes 200 MW PPA with BH Colorado IPP Requested Date…
Oil and Gas Exploration & Development Program San Juan Basin Fracture stimulation of first Mancos shale test well in progress Over 19,000 net acres prospective for Mancos shale gas Piceance Basin First Mancos test well drilled and…
2011 Scorecard Strategy 2011 Progress & Future Initiatives UTILITIES R 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.…
Q2 2011 Summary Strong utility performance, current growth initiatives on track and new utility project announced Strong utility performance; returns on capital investments being realized through the 2010 implementation of new rates…
Questions and Answers 25
Appendix 26
Black Hills Corporation 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 company…
Electric and Natural Gas Utilities Regulated Electric and Natural Gas Utilities Serving over 762,000 customers MT MT SD SD WY Black Hills Power WY Cheyenne NE IA Light NE Nebraska Iowa Gas Gas CO CO KS KS Colorado…
Regulatory Approach Effective and Proactive Regulatory and Asset Management Strategies Colorado Electric rate request filed 4/28/11 Request for a 40.2 million annual revenue increase to recover capital and operating expenses…
Electric Utilities Q2 2011Update Quarter Net Income Comparison Total MWh Sales Regulatory Update (in millions) (in millions) Cheyenne Light requested CPCN on Utility Customers 8/1/11 for three new 40MW turbines Off-system Sales BHP…
Gas Utilities Q2 2011Update Quarter Net Income Comparison Total Dth Sales Regulatory Update (in millions) (in millions) Iowa Gas received final approval on 2/10/11 for a 3.4 million annual revenue increase (1.6 percent interim rate…
Efficient Cost Recovery Electric Utility Jurisdiction Cost Recovery Mechanisms * DSM/ Energy Fuel Cost Trans- Purchased Power Fixed Cost Efficiency mission Recovery BHP - South Dakota R R R R BHP - Wyoming R R R BHP - Montana R R…
Oil & Gas and Energy Marketing Non-regulated Group Generates Electricity, Produces Natural Gas, Coal and Crude Oil, and Markets Energy & Related Products Oil and Gas Energy Marketing Includes operating interests in wells in San…
Oil & Gas Q2 2011Update Quarter Net Income Comparison Bcf Equivalent Sales (in millions) 3.4 3.5 3.5 3.1 3.2 2.9 2.8 2.9 3.3 2.9 2.9 2.8 2.7 0.2 (0.1) Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2…
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…
Energy Marketing Q2 2011Update Quarter Net Income Comparison Avg. Daily Natural Gas Volumes Avg. Daily Crude Oil Volumes (in millions) (physical Bcf per day) (barrels per day) 20,935 Prior Year Current Year 21,243…
Power Generation and Coal Mining Non-regulated Group Generates Electricity, Produces Natural Gas, Coal and Crude Oil, and Markets Energy and Related Products Power Generation Coal Mining Smaller plant approach to incremental…
Power Generation Q2 2011Update Quarter Net Income Comparison Generation Availability (%) MW of Generation Capacity (in millions) (in millions) Prior Year Current Year 100 0.5 100 99.7 100 99.7 98.9 96.9…
Coal Q2 2011Update Quarter Net Income Comparison Coal Production (in millions) (Coal in million tons Overburden in million cubic yards) Overburden Removed Coal Production 4.5 Prior Year Current Year 4.2 3.9 3.8…
Credit Facilities and Debt Primary Credit Facilities Capacity Utilized Available As of 6/30/2011 Corporate Revolver - Matures April 2013 500 million 130 million 327 million 43 million (LC) Term Loan Due June 2012 -- 150 million --…
Credit Ratings Black Hills Corporation S&P Moody s Fitch Long-Term Issuer BBB- Baa3 BBB- Senior Unsecured BBB- Baa3 BBB- Outlook Stable Stable Stable Black Hills Power S&P Moody s Fitch Long-Term Issuer BBB- Baa2 BBB Senior…
Vision: Be the energy partner of choice. Mission: Improving life with energy. 42
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