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Q3 2010 RESULTS – Black Hills Corporation

Black Hills Corporation · Oct 29, 2010 · 49 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. Q3 2010 RESULTS – Black Hills Corporation – slide 1
    October 29, 2010 2010 Third Quarter Update David Emery Chairman, President & CEO Tony Cleberg Executive Vice President & CFO
  2. Q3 2010 RESULTS – Black Hills Corporation – slide 2
    Discussion Agenda Third 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. Q3 2010 RESULTS – Black Hills Corporation – slide 3
    Third Quarter Review David Emery Chairman, President & CEO
  4. Q3 2010 RESULTS – Black Hills Corporation – slide 4
    2010 Third Quarter Summary Income from continuing operations and net income, as adjusted, was 14.8 or 0.38 per share, compared to 2.6 million or 0.07 per share for the same period in 2009 (non-GAAP) Utilities Non-Regulated Energy…
  5. Q3 2010 RESULTS – Black Hills Corporation – slide 5
    Utility Highlights Income from continuing operations 17.9 million compared to 7.1 million for Q3 2009 Construction well underway on utility gas-fired generation facilities to serve BHE COE customers Implemented new and interim…
  6. Q3 2010 RESULTS – Black Hills Corporation – slide 6
    Non-Regulated Energy Highlights Income from continuing operations 4.5 million compared to a loss of 1.8 million in Q3 2009 Construction underway on IPP gas-fired power generation facilities to serve BHE COE customers Improved…
  7. Q3 2010 RESULTS – Black Hills Corporation – slide 7
    Corporate Highlights Growth projects on track; demonstrated ability to access capital markets; integration efforts nearly complete On 7/16/2010 completed issuance of public debt offering for 200 million aggregate principal amount of…
  8. Q3 2010 RESULTS – Black Hills Corporation – slide 8
    Financial Update Tony Cleberg Executive Vice President & CFO
  9. Q3 2010 RESULTS – Black Hills Corporation – slide 9
    Quarterly EPS Analysis Earnings Per Share (EPS) Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Income (Loss) from Continuing Operations (0.10) 0.84 0.81 (0.22) 0.32 Add-back special loss/(gain) items: Undesignated interest rate…
  10. Q3 2010 RESULTS – Black Hills Corporation – slide 10
    Q3 Income Statement In millions, except per share amounts 2010 2009 Comments 2010 vs. 2009 Revenue 264.4 225.8 Improved electric utility revenues Operating expense (222.7) (208.9) Gain on sale of Wygen III 6.2 -- Operating income…
  11. Q3 2010 RESULTS – Black Hills Corporation – slide 11
    Q3 Revenue/Operating Income Roll-Up In millions Revenue Operating Income (Loss) 2010 2009 2010 2009 Comments Utilities Electric Utilities 142.6 128.9 27.5 18.8 Rate Cases Gain on sale of Wygen III -- -- 6.2 -- Gas Utilities 72.3…
  12. Q3 2010 RESULTS – Black Hills Corporation – slide 12
    Improved Balance Sheet and Liquidity Received 62 million in cash proceeds from sale of 23% interest in Wygen III power plant Completed 200 million offering of 10 year, 5.875% senior unsecured notes Contributed 30 million to…
  13. Q3 2010 RESULTS – Black Hills Corporation – slide 13
    Capital Structure In millions Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, 2009 2009 2010 2010 2010 Short term debt: Current maturities 32.1 35.2 24.4 4.5 5.3 Notes Payable 350.5 164.5 223.0 225.0 145.0 382.6 199.7 247.4 229.5…
  14. Q3 2010 RESULTS – Black Hills Corporation – slide 14
    Strategic Overview David Emery Chairman, President & CEO
  15. Q3 2010 RESULTS – Black Hills Corporation – slide 15
    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…
  16. Q3 2010 RESULTS – Black Hills Corporation – slide 16
    Growth Capital Investments Excludes routine capital investments for maintenance of assets Excludes routine capital expenditures for maintenance of assets (millions) 2008 - 2009 2010 2011 Project Total Wygen III 175 -47 -- 128 52%…
  17. Q3 2010 RESULTS – Black Hills Corporation – slide 17
    Timeline of Events 2008 2009 2010 2011 anticipated Strategic Development Unified In-house bill Unified Unified inventory print/lock PeopleSoft work mgt systems box system system Unified performance Unified Unified Unified Unified…
  18. Q3 2010 RESULTS – Black Hills Corporation – slide 18
    BHE-COE Generation - 180 MW Two GE LMS100 natural gas-fired turbines Capital Expenditure and Schedule Progress as of 9/30/2010 Expenditures Procurement Construction (250 -260 mill budget) contracts awarded contracts awarded…
  19. Q3 2010 RESULTS – Black Hills Corporation – slide 19
    Pueblo Airport Generation Station Construction well underway; procurement and construction contracts awarded; major equipment purchased Cooling Tower LMS100 Foundation Pueblo Airport Generating Station Site Circulating Water…
  20. Q3 2010 RESULTS – Black Hills Corporation – slide 20
    BHCI Generation 200 MW Four 40 MW General Electric LM6000 natural gas-fired turbines and two 20 MW steam turbines (combined cycle) Capital Expenditure and Schedule Progress as of 9/30/2010 Expenditures Procurement Construction (240…
  21. Q3 2010 RESULTS – Black Hills Corporation – slide 21
    Regulatory Update 2010 Rate Cases Implemented Jurisdiction Effective Revenue Return on Cap Rate Base Status Date Increase Equity Structure BHP WY 6/1/2010 3.1 million 10.5% 48% debt / 27 million Implemented 52% equity BHP SD…
  22. Q3 2010 RESULTS – Black Hills Corporation – slide 22
    Legislation Update Evaluating capital investment opportunities Renewable Standard to Clean Air - Clean Jobs Act Pending EPA Emission 30% by 2020 (CO HB 10 1001) (CO HB 10 1365) Rules Summary: Summary: Summary: Requires…
  23. Q3 2010 RESULTS – Black Hills Corporation – slide 23
    BHEP Development Program Williston Basin Production from Middle Bakken and Three Forks formations Piceance Basin Planned Operations: BHEP does not operate and co-ventures Current production from Dakota and 1st Qtr 2011 1 Vertical…
  24. Q3 2010 RESULTS – Black Hills Corporation – slide 24
    2010 BKH Strategy Scorecard Strategy 2010 Progress & Future Initiatives UTILITIES 5 Complete BHE-CO Electric rate case (settlement agreement approved 8/5/2010) + Acquire regulated utility properties in our geographic focus 5 Complete…
  25. Q3 2010 RESULTS – Black Hills Corporation – slide 25
    Summary Strong overall performance and strategic initiatives on track Capital growth projects on-track; construction well underway on utility and IPP gas-fired power generation facilities in CO; AMI and AMR meter installations on…
  26. Q3 2010 RESULTS – Black Hills Corporation – slide 26
    Earnings Guidance
  27. Q3 2010 RESULTS – Black Hills Corporation – slide 27
    2010 Adjusted Earnings Per Share Guidance 1.80 to 1.95 Updated 2010 Earnings Guidance Assumptions Adjusted earnings guidance primarily impacted by low natural gas prices Increased capital expenditures in 2010 expected to be 512…
  28. Q3 2010 RESULTS – Black Hills Corporation – slide 28
    2011 Earnings Per Share Guidance 1.90 to 2.15 2011 Earnings Guidance Assumptions Planned capital expenditures in 2011 estimated to be 430 million to 475 million; including oil and gas capital expenditures of 35 million to 45…
  29. Q3 2010 RESULTS – Black Hills Corporation – slide 29
    Q&A
  30. Q3 2010 RESULTS – Black Hills Corporation – slide 30
    Appendix
  31. Q3 2010 RESULTS – Black Hills Corporation – slide 31
    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 Omaha, NE, the company…
  32. Q3 2010 RESULTS – Black Hills Corporation – slide 32
    Electric Utilities Operational Summary Service Areas BHC electric utilities generate, Black Hills Power MT transmit and distribute electricity to Serving 66,900 electric customers approximately 202,025 customers Peak load of 430 MW…
  33. Q3 2010 RESULTS – Black Hills Corporation – slide 33
    Electric Utilities Q3 Update Quarter Income Comparison Total MWh Sales Regulatory Update (from continuing operations in millions) (in millions) SD PUC approved settlement agreement Utility Customers 7/7/2010 for 15.2 million…
  34. Q3 2010 RESULTS – Black Hills Corporation – slide 34
    Gas Utilities Operational Summary Service Areas BHE CO Gas Distributes natural gas to MT serving 69,400 customers approximately 526,900 customers in 2009 volume 8,870,768 Dth BHE IA Gas CO, IA, KS, and NE SD Serving 149,700…
  35. Q3 2010 RESULTS – Black Hills Corporation – slide 35
    Gas Utilities Q3 Update Quarter Income Comparison Total Dth Sales Regulatory Update (from continuing operations in millions) (in millions) Prior Year On 8/18/2010, NE PSC approved rate request for 8.3 million annual revenue -0.6…
  36. Q3 2010 RESULTS – Black Hills Corporation – slide 36
    Power Generation Operational Summary Generation Locations: 120 MW capacity Construction Projects Managed Name Fuel Size In-Service Date Neil Simpson II (WY) Coal 90MW 9/1995 Smaller plant approach to Neil Simpson CT (WY) Gas 40MW…
  37. Q3 2010 RESULTS – Black Hills Corporation – slide 37
    Power Generation Q3 Update Quarter Income Comparison Generation Availability (%) MW of Generation Capacity (from continuing operations in millions) (in millions) 100 98.9 99.1 97.9 100 100 98.7 100 99.7…
  38. Q3 2010 RESULTS – Black Hills Corporation – slide 38
    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 6.0 6.1…
  39. Q3 2010 RESULTS – Black Hills Corporation – slide 39
    Coal Q3 Update Quarter Income Comparison Coal Production (from continuing operations in millions) (Coal in million tons Overburden in million cubic yards) Overburden Removed Coal Production 4.5 4.2 3.8 3.7 3.4 3.6…
  40. Q3 2010 RESULTS – Black Hills Corporation – slide 40
    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…
  41. Q3 2010 RESULTS – Black Hills Corporation – slide 41
    Energy Marketing Q3 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) 20,935 19,410 Prior Year…
  42. Q3 2010 RESULTS – Black Hills Corporation – slide 42
    Oil & Gas Operational Summary 2009 YE Reserves and Production* Capital Expenditures** (in millions) Includes operated wells in San Juan, Powder River, Big Horn and Reserves Production Piceance Basins Gas Gas 73% 82% Includes…
  43. Q3 2010 RESULTS – Black Hills Corporation – slide 43
    Oil & Gas Q3 Update Quarter Income Comparison Bcf Equivalent Sales (from continuing operations in millions) 3.9 3.8 3.4 3.5 3.6 3.5 2.9 3.1 3.3 3.2 2.9 2.8 2.7 3.2 0.8 -0.1 Q2 2007 Q3…
  44. Q3 2010 RESULTS – Black Hills Corporation – slide 44
    Utility Energy Efficiency & Renewable Programs Expanding our renewable energy portfolio at reasonable rates for customers Black Hills Power Partnered with South Dakota School of Mines & Technology in Rapid City, SD to construct a…
  45. Q3 2010 RESULTS – Black Hills Corporation – slide 45
    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 - Montana 5…
  46. Q3 2010 RESULTS – Black Hills Corporation – slide 46
    Credit Facilities & Debt Proactively managing cash flows, capital expenditures and financing needs Primary Credit Facilities Capacity Utilized Available As of 9/30/2010 Corporate Revolver - Matures April 2013 500 million 145 million…
  47. Q3 2010 RESULTS – Black Hills Corporation – slide 47
    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…
  48. Q3 2010 RESULTS – Black Hills Corporation – slide 48
    Vision: Be the energy partner of choice. Mission: Improving life with energy. 49
  49. Q3 2010 RESULTS – Black Hills Corporation – slide 49
    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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