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BKH Broker Appreciation Luncheon – Black Hills Corporation

Black Hills Corporation · Sep 13, 2014 · 48 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. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 1
    Nathan Woods, Black Hills Power BKH Broker Appreciation Luncheon September 19, 2013
  2. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 2
    Discussion Agenda Speakers David Emery Chairman, President and CEO Tony Cleberg Executive Vice President and CFO Agenda Forward Looking Statements History and Overview Overview YTD Highlights Strategic Overview Financial…
  3. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 3
    History and Overview Pueblo Airport Generating Station near Pueblo, Colo. BKH Broker Appreciation Luncheon Sept. 19, 2013 4
  4. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 4
    BHC History Video 5
  5. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 5
    Strategic Repositioning By 2000, Black Hills was engaged in electric utility, telecommunications, power generation, coal mining, pipeline, energy marketing, and oil and gas businesses Strategic decision made in 2004 to refocus company…
  6. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 6
    Strategic Repositioning Assets Op. Inc., as Adjusted 2007 2012 Non-regulated 2007 2012 Utilities 2007 is pre-Aquila acquisition; see Appendix Utility Customer Count BHC Total Employees 700 2,500 Electric Gas 600 Count…
  7. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 7
    Black Hills Corporation Overview A growth oriented, vertically integrated energy company with a tradition of exemplary service and a vision to be the energy partner of choice. Based in Rapid City, SD, the company serves 769,000 utility…
  8. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 8
    Black Hills Organization Structure 9 BKH Broker Appreciation Luncheon Sept. 19, 2013
  9. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 9
    Electric and Gas Utilities Black Hills Power Cheyenne Nebraska Light Gas Iowa Cheyenne Black Hills Gas Light Power Colorado Gas Kansas Colorado Gas Electric Electric Utilities* Natural Gas Utilities* Generate, transmit and…
  10. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 10
    Non-Regulated Energy Power Generation* Ownership in three power generation facilities totaling 309 MW Wygen I - 69 MW of a 90 MW coal-fired facility in Gillette, WY CT II - 40 MW combustion turbine in Gillette, WY Pueblo Airport -…
  11. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 11
    Black Hills Power Profile Communities Served Rapid City Spearfish Sturgis Lead Belle Fourche Deadwood Hot Springs Newell Edgemont Hill City Custer Keystone Upton Newcastle Fast Facts 510 Employees (BHP and BHSC in SD) 3,695…
  12. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 12
    YTD Highlights Gillette Energy Complex in Gillette, Wyo. 13 BKH Broker Appreciation Luncheon Sept. 19, 2013
  13. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 13
    YTD 2013 Highlights Focused on Serving Customers and Building Shareholder Value Black Hills Powers general rate case and financing rider for its share of the Cheyenne Prairie Generating Station approved at South Dakota Public Utilities…
  14. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 14
    Black Hills Power 2013 Update General rate case for South Dakota Rate case filed Dec. 2012 to recover increased costs of serving customers and capital investment to rebuild aging infrastructure South Dakota Public Utilities Commission…
  15. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 15
    Black Hills Power 2013 Update Renewables South Dakota has renewable objective but no mandate; costs make it challenging to integrate renewable energy into energy portfolio Black Hills Power voluntarily integrated cost effective wind…
  16. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 16
    Setting Customer Electric Rates 17 BKH Broker Appreciation Luncheon Sept. 19, 2013
  17. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 17
    Strategic Overview Busch Ranch Wind Farm near Pueblo, Colo. 18 BKH Broker Appreciation Luncheon Sept. 19, 2013
  18. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 18
    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…
  19. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 19
    Strategic Objective Operating Performance Electric Reliability Safety Performance Total Annual Outage Minutes BHC TCIR is defined as the average number of work-related injuries incurred by 100 workers during a one-year…
  20. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 20
    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…
  21. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 21
    Strategic Objectives Operating Performance Generation Capacity by Fuel Type Generation Capacity by Fuel Type 1,200 80% % of Generation by Fuel type 1,000 70% MW of Generation 60% 800 50% 600 40% 30% 400 20% 200 10% 0…
  22. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 22
    Strategic Objective Earnings Growth Historical and Forecasted Capital Expenditures (in millions)* 490 455 416 384 338 205 340 111 199 95 287 53 127 116 344 285 285 289 217 213 171 2009 2010 2011 2012 2013E 2014E 2015E…
  23. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 23
    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…
  24. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 24
    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…
  25. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 25
    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…
  26. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 26
    BKH - Annual Dividend Growth 1.55 1.52 1.50 1.48 1.46 1.45 1.44 Dividend per Share 1.42 1.40 1.40 1.35 1.30 1.25 1.20 2008 2009 2010 2011 2012 2013 Est Board of Directors approved 43rd annual consecutive increase…
  27. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 27
    Strategic Objectives Credit Rating Standard & Poors raised its corporate credit ratings on Black Hills Corp. and Black Hills Power to BBB from BBB- in July 2013; both upgrades issued with stable outlooks Fitch raised its corporate…
  28. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 28
    Financial Overview Wygen II and Wygen III power plants at the Gillette Energy Complex in Gillette, Wyo. 29 BKH Broker Appreciation Luncheon Sept. 19, 2013
  29. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 29
    Earnings Per Share Analysis Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Net income (loss) 0.69 0.97 0.70 0.78 (0.31) Loss (income) from discontinued operations - - - - 0.03 Income (loss) from continuing ops 0.69 0.97 0.70 0.78 (0.28)…
  30. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 30
    YTD Revenue/Op Income Total Revenue, as adjusted* Electric Util 320.7 (in millions) 308.9 660.5 Gas Util 305.6 608.2 250.9 41.4 Power Gen 39.1 YTD 2013 27.9 YTD 2012 Coal Mining 28.1 27.2 Oil & Gas 42.3 (62.3) Corporate,…
  31. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 31
    Income Statement June 30, 2013 and 2012 (In millions, except per share amounts) Year to Date 2013 Actual 2012 Actual Comments Revenue 660.5 608.2 Gas Utilities up 22% Gross margin 393.1 387.6 Operating expense (194.3) (190.1)…
  32. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 32
    Growth Operating Income and EPS, as Adjusted* (in millions, except per share amount) 350 2.40 300 2009 2012 EPS CAGR = 14.8% 2.09 2.00 250 1.67 1.69 36.2 1.60 1.38 200 5.2 19.0 1.20 150 19.9 0.80 100 210.4 185.0…
  33. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 33
    Capital Structure (In millions, except for ratios) June 30, March 31, Dec. 31, Sept. 30, June 30, 2013 2013 2012 2012 2012 Capitalization Short-term Debt 355.5 349.6 381.0 553.3 452.6 Long-term Debt 958.6 936.5 938.9 943.0 1,044.9…
  34. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 34
    Delivering for Shareholders 35 BKH Broker Appreciation Luncheon Sept. 19, 2013
  35. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 35
    BKH Stock Performance Weekly Closing Stock Price Cumulative Return % 60 60 BKH S&P Utilities DJIA 50 40 40 20 30 0 20 -20 10 -40 0 -60 Annual Beginning Ending Total Stock Stock Return** Period Price* Price* 1 Year…
  36. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 36
    Investment Proposition Focus on operational excellence and continuous improvement Above industry average earnings growth rate Shale gas assets provide earnings upside 43 consecutive years of increasing dividends Excellent…
  37. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 37
    Questions Stan Lindholm of Exploration & Production 38 BKH Broker Appreciation Luncheon Sept. 19, 2013
  38. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 38
    Appendix Wyodak Coal Mine, Gillette, Wyo. 39 BKH Broker Appreciation Luncheon Sept. 19, 2013
  39. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 39
    Use of Non-GAAP Financial Measures Use of Non-GAAP Financial Measures Assets, as Adjusted (in thousands) (Prior to Acquisition of Aquila Entities) Regulated Non-Regulated Corporate Electric Power 31-Dec-07 Utilities Gas Utilities…
  40. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 40
    Use of Non-GAAP Financial Measures Use of Non-GAAP Financial Measures Operating Income, as Adjusted YTD (Prior to Acquisition of Aquila Entities) 31-Dec-07 Regulated Non-Regulated Corporate Power (in thousands, pre-tax) Electric…
  41. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 41
    Use of Non-GAAP Financial Measures Use of non-GAAP Financial Measures Operating Income, as Adjusted YTD 31-Dec-10 Regulated non-Regulated Corporate Power (in thousands, pre-tax) Electric Utilities Gas Utilities Generation Coal Mining…
  42. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 42
    Use of Non-GAAP Financial Measures Use of non-GAAP Financial Measures Operating Income, as Adjusted YTD 31-Dec-12 Regulated non-Regulated Corporate Power (in thousands, pre-tax) Electric Utilities Gas Utilities Generation Coal Mining…
  43. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 43
    Use of Non-GAAP Financial Measures Use of non-GAAP Financial Measures Operating Income, as Adjusted YTD 30-Jun-12 Regulated non-Regulated Corporate Power (in thousands, pre-tax) Electric Utilities Gas Utilities Generation Coal Mining…
  44. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 44
    Use of Non-GAAP Financial Measures Use of non-GAAP Financial Measures Operating Income, as Adjusted YTD 30-Jun-13 Regulated non-Regulated Corporate Power (in thousands, pre-tax) Electric Utilities Gas Utilities Generation Coal Mining…
  45. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 45
    Use of Non-GAAP Financial Measures Use of Non-GAAP Financial Measures Revenue, as adjusted YTD 30-Jun-12 Regulated non-Regulated Corporate Power (in thousands) Electric Utilities Gas Utilities Generation Coal Mining Oil and Gas…
  46. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 46
    Use of Non-GAAP Financial Measures Use of Non-GAAP Financial Measures DD&A Adjusted for Capital Lease * 31-Dec-12 Regulated Non-Regulated Corporate Electric Power Non- (in thousands) Utilities Gas Utilities Total Utilities Generation…
  47. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 47
    Use of Non-GAAP Financial Measures EARNINGS PER SHARE ROLL-UP Year Ended December 31, 2009 2010 2011 2012 Net income (GAAP) 2.11 1.76 1.24 1.85 Loss (income) discontinued operations (0.11) (0.14) (0.23) 0.16 Income from continuing…
  48. BKH Broker Appreciation Luncheon – Black Hills Corporation – slide 48

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