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BKH - Black Hills News Story

$69.55 2.0  2.9%

Last Trade - 21/06/21

Sector
Utilities
Size
Large Cap
Market Cap £3.14bn
Enterprise Value £6.33bn
Revenue £1.29bn
Position in Universe 1560th / 6942

Black Hills Corp. Reports First Quarter 2021 Results and Reaffirms Guidance

Tue 4th May, 2021 9:15pm
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RAPID CITY, S.D., May 04, 2021 (GLOBE NEWSWIRE) -- Black Hills Corp. (NYSE:
BKH) today announced financial results for the first quarter of 2021. Net
income and Net income, as adjusted (non-GAAP) for the first quarter of 2021
compared to the first quarter of 2020 were:

                                          Three Months Ended March 31,                                         
                                          2021                                 2020                            
 (in millions, except per share amounts)  Income          EPS                  Income          EPS             
 GAAP:                                                                                                         
 Net income                               $    96.3       $    1.54            $    93.2       $    1.51       
                                                                                                               
 Non-GAAP:                                                                                                     
 Net income, as adjusted (*)              $    96.3       $    1.54            $    98.4       $    1.59       

* A schedule for the GAAP to non-GAAP adjustment reconciliation is provided
below.

“The first quarter will be remembered for Winter Storm Uri and its historic
impacts,” said Linn Evans, president and CEO of Black Hills Corp. “When
Uri disrupted our industry and millions of lives across the United States, we
kept our customers safe with reliable and uninterrupted service throughout the
storm. Our team and infrastructure performed remarkably well to serve the
extraordinary demand during dangerous and historic cold conditions. This storm
highlighted the critical need for safe and reliable gas utilities and firm
generation capacity, affirming our customer-focused strategy and capital plan.

“Solid financial performance during the quarter was overshadowed by a $0.15
per share adverse impact from Winter Storm Uri, resulting primarily from
certain non-recoverable fuel costs related to the storm. Results benefited
from new recovery on investments and colder weather, partially offset by
increased share count due to equity issued in February 2020.

“We made excellent progress on our strategic initiatives, advancing our
renewable energy strategy in Colorado and executing on our capital investment
plan. We also received the final order for our Nebraska rate review and
we’ve had constructive discussions with all of our states regarding recovery
of the incremental costs related to Winter Storm Uri.

“We are reaffirming our 2021 and 2022 earnings guidance and five-year
capital plan of more than $3 billion,” continued Evans. “We immediately
implemented cash and expense management programs in response to the financial
challenges posed by storm Uri and our business fundamentals and outlook
remains strong. We remain confident in our strategy and opportunities ahead as
we target 5% to 7% earnings growth beyond 2022.”

FIRST QUARTER 2021 HIGHLIGHTS AND UPDATES

Winter Storm Uri Impacts
* In mid-February, Black Hills’ service territories, and much of the United
States, were impacted by Winter Storm Uri, which brought snow, ice and an
extended period of extreme and historic cold temperatures. The breadth and
extended nature of this weather event caused disruptions in energy supply
chains and power generation, resulting in unforeseeable and unprecedented
market prices for natural gas and electricity. The following table summarizes
these impacts:
                                          (in millions)          After-tax       
                                          Pre-tax Impact         EPS Impact      
 Balance Sheet                                                                   
 Regulatory asset for utility fuel costs  $      558.8                           
                                                                                 
 Income Statement                                                                
 Wholesale power margin sharing           $      3.2                             
 Term loan interest expense               0.7                                    
 Power Generation storm benefit           (1.7          )                        
 Black Hills Energy Services fuel cost    8.2                                    
 Regulated utility fuel costs             2.1                                    
 Total income statement impacts*          $      12.5            $       0.15    
                                                                                 
 Total Winter Storm Uri costs             $      571.3                           

* Company expects opportunities in 2021 to mitigate impacts through cost
management and regulatory actions.
* On Feb. 24, Black Hills entered into an $800 million unsecured term loan to
provide additional liquidity due to the impacts from Winter Storm Uri. The
term loan matures Nov. 24, 2021, and carries an interest rate based on LIBOR
plus 75 basis points. The term loan was paid down by $200 million prior to
quarter end.
Electric Utilities
* On Feb. 19, Colorado Electric entered into a power purchase agreement to
purchase up to 200 megawatts of renewable energy upon construction of a new
solar facility, which is expected to be completed by the end of 2023. This
agreement extends for 15 years after construction completion. With the
addition of 200 megawatts of solar energy on its system, more than half of
Colorado Electric’s generation is forecasted to be sourced from renewable
energy resources by 2023, leading to an estimated 70% reduction in carbon
emissions by 2024 compared to a 2005 baseline.


* On Feb. 11, in the midst of Winter Storm Uri, South Dakota Electric set a
new winter peak load of 326 megawatts, surpassing the previous winter peak of
320 megawatts set in February 2019.
Gas Utilities
* On Jan. 26, Nebraska Gas received approval from the Nebraska Public Service
Commission to consolidate rate schedules into a new, single statewide
structure and recover significant infrastructure investments in its
13,000-mile natural gas pipeline system. Final rates were effective March 1,
and are expected to generate $6.5 million in new annual revenue with a capital
structure of 50% equity and 50% debt and an authorized return on equity of
9.5%. The approval also includes an extension of the System Safety and
Integrity Rider for five years and an expansion of this mechanism across its
consolidated jurisdictions.


* On Sept. 11, 2020, Colorado Gas filed a rate review with the Colorado Public
Utilities Commission, which was ultimately dismissed. Black Hills plans to
file a new rate review in the second quarter of this year.


* On Sept. 11, 2020, Colorado Gas filed a system safety and integrity rider
proposal with the Colorado commission that would recover safety and integrity
focused investments in its system for five years. A decision from the
commission is expected by mid-2021.
Corporate
* On April 26, Black Hills’ board of directors approved a quarterly dividend
of $0.565 per share payable on June 1, 2021, to shareholders of record at the
close of business on May 18, 2021.
2021 EARNINGS GUIDANCE REAFFIRMED

Black Hills is reaffirming its guidance for 2021 earnings per share available
for common stock in the range of $3.80 to $4.00, based on the following
updated assumptions:
* Normal weather conditions within our utility service territories, including
temperatures, precipitation levels and wind conditions;
* Normal operations and weather conditions for planned construction,
maintenance and/or capital investment projects;
* Completion of utility regulatory dockets;
* No significant unplanned outages at any of our generating facilities;
* Production tax credits of $20 million associated with wind generation
assets;
* Capital investment of $647 million in 2021
* Equity issuance of $100 million to $120 million through the at-the-market
equity offering program in 2021;
* No material net impact from COVID-19; and
* Constructive regulatory outcomes related to recovery of incremental Winter
Storm Uri costs.
2022 EARNINGS GUIDANCE REAFFIRMED

Black Hills is reaffirming its guidance for 2022 earnings per share available
for common stock in a range of $3.95 to $4.15, based on the following updated
assumptions:
* Normal weather conditions within our utility service territories including
temperatures, precipitation levels and wind conditions;
* Normal operations and weather conditions for planned construction,
maintenance and/or capital investment projects;
* Completion of utility regulatory dockets;
* No significant unplanned outages at any of our generating facilities;
* Adjusted contract price for Wygen I power purchase agreement beginning Jan.
1, 2022;
* Production tax credits of $20 million associated with wind generation
assets;
* Capital investment of $647 million in 2021 and $600 million in 2022; and
* Equity issuance of $100 million to $120 million in 2021 and $60 million to
$80 million in 2022 through the at-the-market equity offering program; and
* Constructive regulatory outcomes related to recovery of incremental Winter
Storm Uri costs.
BLACK HILLS CORPORATION
CONSOLIDATED FINANCIAL RESULTS

(Minor differences may result due to rounding)

                                                     Three Months Ended March 31,                     
                                                     2021                        2020                 
                                                     (in millions)                                    
 Adjusted operating income ((a)):                                                                     
 Electric Utilities ( (b) (c))                       $      21.8                 $      35.7          
 Gas Utilities                                       102.1                       102.9                
 Power Generation                                    14.3                        11.3                 
 Mining                                              3.3                         3.1                  
 Corporate and Other                                 (3.1          )             0.2                  
 Operating income                                    138.3                       153.2                
                                                                                                      
 Interest expense, net                               (37.6         )             (35.5         )      
 Impairment of investment                            —                           (6.9          )      
 Other income (expense), net                         0.3                         2.4                  
 Income tax benefit (expense) ((b))                  (0.5          )             (16.0         )      
 Net income                                          100.5                       97.2                 
 Net income attributable to noncontrolling interest  (4.2          )             (4.1          )      
 Net income available for common stock               $      96.3                 $      93.2          



 (a)    Adjusted operating income removes the impacts of finance lease accounting relating to the 20-year PPA between Black Hills Colorado IPP and Colorado Electric for the Electric Utilities and Power Generation segments and Corporate and Other. This presentation of segment information does not impact consolidated financial results.                                    
 (b)    In February 2021, Colorado Electric delivered $9.3 million of TCJA-related bill credits to its customers. These bill credits, which resulted in a reduction in revenue were offset by a reduction in income tax expense and resulted in a minimal impact to Net Income.                                                                                                    
 (c)    As a result of Winter Storm Uri, our Electric Utilities incurred a $3.2 million negative impact to our regulated wholesale power margins due to higher fuel costs and $2.1 million of incremental fuel costs that are not recoverable through our fuel cost recovery mechanisms, which may be mitigated by cost management and regulatory actions by the end of the year.  



                                                             Three Months Ended March 31,            
                                                             2021                    2020            
 Weighted average common shares outstanding (in thousands):                                          
 Basic                                                       62,633                  61,778          
 Diluted                                                     62,691                  61,856          
                                                                                                     
 Earnings per share:                                                                                 
 Earnings Per Share, Basic                                   $       1.54            $       1.51    
 Earnings Per Share, Diluted                                 $       1.54            $       1.51    

CONFERENCE CALL AND WEBCAST

Black Hills will host a live conference call and webcast at 11 a.m. EDT on
Wednesday, May 5, 2021, to discuss our financial and operating performance.

To access the live webcast and download a copy of the investor presentation,
go to the Black Hills website at www.blackhillscorp.com, and click on
“Events and Presentations” in the “Investor Relations” section. The
presentation will be posted on the website before the webcast. Listeners
should allow at least five minutes for registering and accessing the
presentation. Those interested in asking a question during the live broadcast
or those without Internet access can call 866-544-7741 if calling within the
United States. International callers can call 724-498-4407. All callers need
to enter the passcode 5684629 when prompted.

For those unable to listen to the live broadcast, a replay will be available
on the company’s website.

USE OF NON-GAAP FINANCIAL MEASURES

As noted in this news release, in addition to presenting its earnings
information in conformity with Generally Accepted Accounting Principles
(GAAP), the company has provided non-GAAP earnings data reflecting adjustments
for special items as specified in the GAAP to non-GAAP adjustment
reconciliation table below. Net income available for common stock, as
adjusted, is defined as Net income, adjusted for expenses and gains that the
company believes do not reflect the company’s core operating performance.
The company believes that non-GAAP financial measures are useful to investors
because the items excluded are not indicative of the company’s continuing
operating results. The company’s management uses these non-GAAP financial
measures as an indicator for planning and forecasting future periods. These
non-GAAP measures have limitations as analytical tools and should not be
considered in isolation or as a substitute for analysis of our results as
reported under GAAP. The presentation of these non-GAAP financial measures
should not be construed as an inference that future results will not be
affected by unusual, non-routine, or non-recurring items.

                                                                                                                                     
                                                                Three Months Ended March 31,                                         
 (In millions, except per share amounts)                        2021                            2020                                 
 (after-tax)                                                    Income          EPS             Income               EPS             
 Net income available for common stock (GAAP)                   $    96.3       $    1.54       $    93.2            $    1.51       
 Adjustments:                                                                                                                        
 Impairment of investment                                                       —               6.9                  0.11            
 Total adjustments                                              —               —               6.9                  0.11            
                                                                                                                                     
 Tax on Adjustments:                                                                                                                 
 Impairment of investment                                       —               —               (1.6       )         (0.03      )    
 Total tax on adjustments                                       —               —               (1.6       )         (0.03      )    
                                                                                                                                     
 Rounding                                                                                       (0.1       )         —               
 Adjustments, net of tax                                        —               —               5.2                  0.08            
                                                                                                                                     
 Net income available for common stock, as adjusted (non-GAAP)  $    96.3       $    1.54       $    98.4            $    1.59       
                                                                                                                                     

Gross margin (revenue less cost of sales) is considered a non-GAAP financial
measure due to the exclusion of depreciation and amortization from the
measure. The presentation of gross margin is intended to supplement
investors’ understanding of operating performance. Gross margin for our
Electric Utilities is calculated as operating revenue less cost of fuel and
purchased power. Gross margin for our Gas Utilities is calculated as operating
revenue less cost of gas sold. Our gross margin is impacted by the
fluctuations in power purchases and natural gas and other fuel supply costs.
However, while these fluctuating costs impact gross margin as a percentage of
revenue, they only impact total gross margin if the costs cannot be passed
through to customers. Our gross margin measure may not be comparable to other
companies’ gross margin measures. Furthermore, this measure is not intended
to replace operating income as determined in accordance with GAAP as an
indicator of operating performance.

SEGMENT PERFORMANCE SUMMARY

Our segment highlights for the three months ended March 31, 2021, compared to
the three months ended March 31, 2020, are discussed below.

The following segment information does not include certain intercompany
eliminations. Minor differences in comparative amounts may result due to
rounding. All amounts are presented on a pre-tax basis unless otherwise
indicated.

Certain industries in which we operate are highly seasonal, and revenue from,
and certain expenses for, such operations may fluctuate significantly between
quarterly periods. Demand for electricity and natural gas is sensitive to
seasonal cooling, heating and industrial load requirements. In particular, the
normal peak usage season for our electric utilities is June through August
while the normal peak usage season for our gas utilities is November through
March. Significant earnings variances can be expected between the Gas
Utilities segment’s peak and off-peak seasons. Due to this seasonal nature,
our results of operations for the three months ended March 31, 2021 and 2020
are not necessarily indicative of the results of operations to be expected for
any other period or for the entire year.

Electric Utilities

                                Three Months Ended March 31,              Variance             
                                2021                 2020                 2021 vs. 2020        
                                (in millions)                                                  
 Gross margin (non-GAAP)        $      95.3          $      109.7         $      (14.4  )      
                                                                                               
 Operations and maintenance     48.6                 50.5                 (1.9          )      
 Depreciation and amortization  24.9                 23.5                 1.4                  
 Adjusted operating income      $      21.8          $      35.7          $      (13.9  )      



                                                             Three Months Ended March 31,              
 Operating Statistics                                        2021                 2020                 
 Quantities Sold (MWh):                                                                                
 Retail Sales                                                1,340,474            1,364,489            
 Contract Wholesale                                          156,995              131,778              
 Off-system/Power Marketing Wholesale                        127,583              165,785              
 Total energy sold                                           1,625,052            1,662,052            
                                                                                                       
 Contracted generated facilities availability by fuel type:                                            
 Coal                                                        83.7       %         90.8       %         
 Natural Gas and diesel oil                                  87.6       %         83.5       %         
 Wind                                                        93.5       %         99.0       %         
 Total availability                                          87.2       %         87.1       %         
                                                                                                       
 Wind capacity factor                                        43.1       %         45.6       %         
                                                                                                       



First Quarter 2021 Compared with First Quarter 2020

Gross margin decreased as a result of:

                                               (in millions)        
 TCJA-related bill credits ((a))               $      (9.3   )      
 Winter Storm Uri impacts ((b))                (5.3          )      
 Mark-to-market on wholesale energy contracts  (2.9          )      
 Rider recovery                                1.3                  
 Weather ((c))                                 1.1                  
 Residential customer growth                   0.3                  
 Other                                         0.4                  
 Total change in Gross margin (non-GAAP)       $      (14.4  )      

________________

 (a)    In February 2021, Colorado Electric delivered TCJA-related bill credits to its customers. These bill credits were offset by a reduction in income tax expense and resulted in a minimal impact to Net Income.                                                                                                                                                              
 (b)    As a result of Winter Storm Uri, our Electric Utilities incurred a $3.2 million negative impact to our regulated wholesale power margins due to higher fuel costs and $2.1 million of incremental fuel costs that are not recoverable through our fuel cost recovery mechanisms, which may be mitigated by cost management and regulatory actions by the end of the year.  
 (c)    Heating degree days at the Electric Utilities for the three months ended March 31, 2021 were 4% higher than normal compared to 4% lower than normal in the same period in the prior year.                                                                                                                                                                                  

Operations and maintenance expense decreased primarily due to prior year
expenses related to the municipalization efforts in Pueblo, Colorado.

Depreciation and amortization increased primarily due to a higher asset base
driven by prior year capital expenditures.

Gas Utilities

                                Three Months Ended March 31,              Variance             
                                2021                 2020                 2021 vs. 2020        
                                (in millions)                                                  
 Gross margin (non-GAAP)        $      209.5         $      205.4         $      4.1           
                                                                                               
 Operations and maintenance     82.2                 77.3                 4.9                  
 Depreciation and amortization  25.2                 25.2                 —                    
 Adjusted operating income      $      102.1         $      102.9         $      (0.8   )      



                                           Three Months Ended March 31,                
 Operating Statistics                      2021                  2020                  
 Quantities Sold and Transported (Dth):                                                
 Total gas sales                           45,279,348            42,126,650            
 Total transport and transmission volumes  45,314,438            45,055,507            



First Quarter 2021 Compared with First Quarter 2020

Gross margin increased as a result of:

                                                                (in millions)        
 New rates                                                      $      9.2           
 Weather ((a))                                                  7.5                  
 Black Hills Energy Services Winter Storm Uri costs ((b))       (8.2          )      
 Non-utility Gas Supply Services                                (1.2          )      
 Mark-to-market on non-utility natural gas commodity contracts  (0.4          )      
 Other                                                          (2.8          )      
 Total increase in Gross margin (non-GAAP)                      $      4.1           

____________________

 (a)    Heating degree days at the Gas Utilities for the three months ended March 31, 2021, were 3% higher than normal compared to 6% lower than normal in the same period in the prior year.                                                                      
 (b)    Black Hills Energy Services offers fixed contract pricing for non-regulated gas supply services to our regulated natural gas customers. The increased cost of natural gas sold during Winter Storm Uri is not recoverable through a regulatory mechanism.  

Operations and maintenance expense increased primarily due to $5.5 million of
higher employee related costs and outside services expenses driven by higher
headcount and higher stock compensation expense related to market performance
partially offset by $1.0 million of lower travel and training expenses.

Depreciation and amortization was comparable to the same period in the prior
year due to lower depreciation rates approved in the Nebraska Gas and Colorado
Gas rate reviews mostly offset by increased depreciation due to a higher asset
base driven by prior year capital expenditures.

Power Generation

                                Three Months Ended March 31,              Variance             
                                2021                 2020                 2021 vs. 2020        
                                (in millions)                                                  
 Revenue                        $      29.2          $      26.0          $      3.2           
                                                                                               
 Fuel expense                   2.7                  2.3                  0.4                  
 Operations and maintenance     7.4                  7.0                  0.4                  
 Depreciation and amortization  4.9                  5.3                  (0.4          )      
 Adjusted operating income      $      14.3          $      11.3          $      3.0           



                                                              Three Months Ended March 31,            
 Operating Statistics                                         2021                2020                
 Contracted generating facilities availability by fuel type:                                          
 Coal                                                         97.0      %         89.3      %         
 Natural gas                                                  98.6      %         99.5      %         
 Wind                                                         94.2      %         99.3      %         
 Total availability                                           96.7      %         97.8      %         
                                                                                                      
 Wind capacity factor                                         32.6      %         30.4      %         



First Quarter 2021 Compared with First Quarter 2020

Operating income increased $1.7 million due to Winter Storm Uri’s favorable
impact to Black Hills Wyoming under the economy energy power sales agreement.
Revenue also increased due to higher MWh sold at Wygen I driven by a prior
year planned outage.

Mining

                                           Three Months Ended March 31,              Variance             
                                           2021                 2020                 2021 vs. 2020        
                                           (in millions)                                                  
 Revenue                                   $      14.7          $      15.2          $      (0.5   )      
                                                                                                          
 Operations and maintenance                9.2                  9.8                  (0.6          )      
 Depreciation, depletion and amortization  2.2                  2.3                  (0.1          )      
 Adjusted operating income                 $      3.3           $      3.1           $      0.2           



                                  Three Months Ended March 31,              
 Operating Statistics             2021                 2020                 
                                  (in thousands)                            
 Tons of coal sold                875                  896                  
 Cubic yards of overburden moved  1,822                2,267                
                                                                            
 Revenue per ton                  $      16.09         $      16.08         



First Quarter 2021 Compared with First Quarter 2020

Adjusted operating income was comparable to the same period in the prior year.

Corporate and Other

Corporate and Other represents certain unallocated expenses for administrative
activities that support our reportable operating segments. Corporate and Other
also includes business development activities that are not part of our
operating segments.

                                   Three Months Ended March 31,                     Variance             
                                   2021                        2020                 2021 vs. 2020        
                                   (in millions)                                                         
 Adjusted operating income (loss)  $      (3.1   )             $      0.2           $      (3.3   )      



First Quarter 2021 Compared with First Quarter 2020

The variance in Adjusted operating income (loss) was primarily due to a prior
year favorable true-up of employee costs which was allocated to our
subsidiaries in the current year. This allocation was offset in our reportable
segments and had no impact to consolidated results.

Consolidated Interest Expense, Impairment of Investment, Other Income
(Expense) and Income Tax Benefit (Expense)

                               Three Months Ended March 31,                      Variance             
                               2021                     2020                     2021 vs. 2020        
                               (in millions)                                                          
 Interest expense, net         $     (37.6  )           $     (35.5  )           $      (2.1   )      
 Impairment of investment      —                        (6.9         )           6.9                  
 Other income (expense), net   0.3                      2.4                      (2.1          )      
 Income tax benefit (expense)  (0.5         )           (16.0        )           15.5                 



First Quarter 2021 Compared with First Quarter 2020

Interest Expense

The increase in Interest expense, net was due to higher debt balances driven
by the February 2021 term loan and the June 2020 senior unsecured notes
partially offset by lower interest rates.

Impairment of Investment

In the prior year, we recorded a pre-tax non-cash write-down of $6.9 million
in our investment in equity securities of a privately held oil and gas
company. The impairment was triggered by continued adverse changes in future
natural gas prices and liquidity concerns at the privately held oil and gas
company.

Other Income (Expense)

The decrease in Other income for the three months ended March 31, 2021, was
primarily due to prior year credits for our non-qualified benefit plan driven
by market performance on plan assets.

Income Tax Benefit (Expense)

For the three months ended March 31, 2021, the effective tax rate was 0.5%
compared to 14.1% for the same period in 2020. The lower effective tax rate is
primarily due to $7.6 million of increased tax benefits from Colorado
Electric’s TCJA-related bill credits to customers (which is offset by
reduced revenue), $1.5 million of increased tax benefits from amortization of
excess deferred income taxes and $1.3 million of increased tax benefits from
federal production tax credits associated with new wind assets.

ABOUT BLACK HILLS CORP.

Black Hills Corp. (NYSE: BKH) is a customer-focused, growth-oriented utility
company with a tradition of improving life with energy and a vision to be the
energy partner of choice. Based in Rapid City, South Dakota, the company
serves 1.3 million natural gas and electric utility customers in eight states:
Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming.
More information is available at www.blackhillscorp.com,
www.blackhillscorp.com/corporateresponsibility and www.blackhillsenergy.com. 

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This presentation includes “forward-looking statements” as defined by the
Securities and Exchange Commission. We make these forward-looking statements
in reliance on the safe harbor protections provided under the Private
Securities Litigation Reform Act of 1995. All statements, other than
statements of historical facts, included in this presentation that address
activities, events or developments that we expect, believe or anticipate will
or may occur in the future are forward-looking statements. This includes,
without limitations, our 2021 and 2022 earnings guidance and long-term growth
targets. These forward-looking statements are based on assumptions which we
believe are reasonable based on current expectations and projections about
future events and industry conditions and trends affecting our business.
However, whether actual results and developments will conform to our
expectations and predictions is subject to a number of risks and uncertainties
that, among other things, could cause actual results to differ materially from
those contained in the forward-looking statements, including without
limitation, the risk factors described in Item 1A of Part I of our 2020 Annual
Report on Form 10-K and other reports that we file with the SEC from time to
time, and the following:
* The accuracy of our assumptions on which our earnings guidance and growth
targets are based;


* Our ability to obtain adequate cost recovery for our utility operations
through regulatory proceedings and favorable rulings on periodic applications
to recover costs for capital additions, plant retirements and decommissioning,
fuel, transmission, purchased power, and other operating costs and the timing
in which new rates would go into effect;


* Our ability to complete our capital program in a cost-effective and timely
manner;


* Our ability to execute on our strategy; 


* Our ability to successfully execute our financing plans;


* Our ability to achieve our greenhouse gas emissions intensity reduction
goals;


* Board of Directors’ approval of any future quarterly dividends;


* The impact of future governmental regulation; and


* Other factors discussed from time to time in our filings with the SEC.
New factors that could cause actual results to differ materially from those
described in forward-looking statements emerge from time-to-time, and it is
not possible for us to predict all such factors, or the extent to which any
such factor or combination of factors may cause actual results to differ from
those contained in any forward-looking statement. We assume no obligation to
update publicly any such forward-looking statements, whether as a result of
new information, future events or otherwise.

(Minor differences may result due to rounding.)

                                               Consolidating Income Statement                                                                                                                                                 
 Three Months Ended March 31, 2021             Electric Utilities                           Gas Utilities        Power Generation        Mining         Corporate         Inter- Company Eliminations         Total           
                                               (in millions)                                                                                                                                                                  
 Revenue                                       $              220.6                         $      400.9         $       4.7             $    7.2       $     —           $        —                          $    633.4      
 Intercompany revenue                          6.8                                          1.6                  24.5                    7.4            89.7              (130.0            )                 —               
 Fuel, purchased power and cost of gas sold    132.1                                        193.1                2.7                     —              —                 (34.6             )                 293.1           
 Gross margin (non-GAAP)                       95.3                                         209.5                26.5                    14.7           89.7              (95.4             )                 340.3           
                                                                                                                                                                                                                              
 Operations and maintenance                    48.6                                         82.2                 7.4                     9.2            76.2              (78.8             )                 144.7           
 Depreciation, depletion and amortization      24.9                                         25.2                 4.9                     2.2            6.5               (6.4              )                 57.3            
 Adjusted operating income (loss)              21.8                                         102.1                14.3                    3.3            7.1               (10.2             )                 138.3           
                                                                                                                                                                                                                              
 Interest expense, net                                                                                                                                                                                        (37.6       )   
 Impairment of investment                                                                                                                                                                                     —               
 Other income (expense), net                                                                                                                                                                                  0.3             
 Income tax benefit (expense)                                                                                                                                                                                 (0.5        )   
 Net income (loss)                                                                                                                                                                                            100.5           
 Net income attributable to noncontrolling interest                                                                                                                                                           (4.2        )   
 Net income (loss) available for common stock                                                                                                                                                                 $    96.3       



                                               Consolidating Income Statement                                                                                                                                                 
 Three Months Ended March 31, 2020             Electric Utilities                           Gas Utilities        Power Generation        Mining         Corporate         Inter- Company Eliminations         Total           
                                               (in millions)                                                                                                                                                                  
 Revenue                                       $              167.7                         $      360.0         $       2.3             $    7.0       $     —           $        —                          $    537.1      
 Intercompany revenue                          6.4                                          0.8                  23.7                    8.2            87.6              (126.6            )                 —               
 Fuel, purchased power and cost of gas sold    64.5                                         155.4                2.3                     —              —                 (34.2             )                 187.9           
 Gross margin (non-GAAP)                       109.7                                        205.4                23.7                    15.2           87.6              (92.4             )                 349.2           
                                                                                                                                                                                                                              
 Operations and maintenance                    50.5                                         77.3                 7.0                     9.8            73.5              (78.6             )                 139.6           
 Depreciation, depletion and amortization      23.5                                         25.2                 5.3                     2.3            6.2               (6.1              )                 56.4            
 Adjusted operating income (loss)              35.7                                         102.9                11.3                    3.1            7.9               (7.7              )                 153.2           
                                                                                                                                                                                                                              
 Interest expense, net                                                                                                                                                                                        (35.5       )   
 Impairment of investment                                                                                                                                                                                     (6.9        )   
 Other income (expense), net                                                                                                                                                                                  2.4             
 Income tax benefit (expense)                                                                                                                                                                                 (16.0       )   
 Net income (loss)                                                                                                                                                                                            97.2            
 Net income attributable to noncontrolling interest                                                                                                                                                           (4.1        )   
 Net income (loss) available for common stock                                                                                                                                                                 $    93.2       



 Investor Relations:                                             
 Jerome E. Nichols                                               
 Phone                     605-721-1171                          
 Email                     investorrelations@blackhillscorp.com  
                                                                 
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