Black Hills Corporation · NYSE:BKH
Black Hills — Q2 2024 Earnings Presentation
32 slides from Black Hills's earnings presentation, Aug 1, 2024
Slide 1: 2024 Second Quarter Review
2024 Second Quarter Review Aug. 1, 2024
Slide 2: Forward-looking Statements
Forward-looking Statements COMPANY This presentation includes “forward-looking statements” as defined by the Securities and Exchange Commission. We make these forward- INFORMATION looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Ac
Slide 3: Delivering Results for Stakeholders
Delivering Results for Stakeholders Providing excellent operational performance Delivering on financial commitments Advancing regulatory and growth initiatives BKH | 2024 Second Quarter Review | Aug. 1, 2024 | 3
Slide 4: Financial Outlook
Financial Outlook 2024 Guidance range of $3.80 to $4.00 EPS Long-term 4% to 6% growth target* EPS Growth Dividend 55% to 65% payout ratio** Capital $4.3 billion five-year forecast (2024 to 2028) Investment * Average annual compound growth rate off 2023 base of $3.75 per share ** Future dividends sub
Slide 5: Innovatively Serving Data Center Growth
Innovatively Serving Data Center Growth Capital-Light Model Benefitting Customers, Communities and Shareholders Contributing ~5% of current EPS with expectation to increase to ~10%+ by 2028 Trusted Innovative Ideal Energy Partner Service Model Location 10+ years of successfully Innovative Large
Slide 6: Investing for Customer Needs Drives Growth
Investing for Customer Needs Drives Growth $4.3 billion Capital Investment Forecast 2024-2028* (millions) $1,400 $1,200 Anticipating incremental $1,000 opportunities • Customer growth • Safety and system integrity projects $800 • Replacement and modernization programs $600 • Electric generation and
Slide 7: 2023 Sustainability Report Published
2023 Sustainability Report Published 27% reduction in GHG emissions for natural gas distribution system since 2022 1 1 2 www.blackhillsenergy.com/our-company/our-commitment-sustainability 1 Electric goals are based on greenhouse gas emissions intensity as compared to 2005 levels for Scope 1 emission
Slide 8: Q2 2024 Financial Review
Q2 2024 Financial Review
Slide 9: Q2 2024 EPS Earnings Drivers
Q2 2024 EPS Earnings Drivers New Margin and Expense Management Offset Weather and Prior Year Tax Benefit Income Q2 2023 Margin O&M MTM Weather Financing DD&A Taxes Other Q2 2024 $0.50 $0.04 $0.10 ($0.01) $0.45 ($0.04) $0.40 ($0.02) ($0.02) $0.35 $0.35 $0.04 $0.33 $0.30 New rates New shares +$0.13 ($
Slide 10: YTD 2024 EPS Earnings Drivers
YTD 2024 EPS Earnings Drivers New Margin and Expense Management More Than Offset Weather, Financing and Other Impacts Income YTD 2023 Margin O&M MTM Weather Financing DD&A Taxes Other YTD 2024 $2.75 $0.13 $0.04 $2.50 $0.33 ($0.14) $0.02 $2.19 $2.25 ($0.09) $2.06 ($0.07) $2.00 ($0.09) $1.75 New rates
Slide 11: Solid Financial Position
Solid Financial Position Committed to BBB+ Equivalent Credit Ratings Credit Ratings Liquidity and Cash Flow (millions) $1,000 Moody’s S&P Fitch $250 million accordion feature FFO $750 (with bank consent) Adjusted Baa2 BBB+ BBB+ $750 million of available liquidity on revolving credit facility FFO / D
Slide 12: Dividend Track Record
Dividend Track Record 54 Consecutive Years of Annual Increases in 2024 and 82 Consecutive Years Paid* $2.60* 5% CAGR 55%-65% long-term 2019-2024 payout target Dividend growth rate in line with EPS* 1970 1980 1990 2000 2010 2020 2024* Annual Dividend Per Share * Future dividends subject to board appr
Slide 13: Business Update
Business Update
Slide 14: Rate Review Progress
Rate Review Progress • Advanced rate review for Arkansas Gas • Filed rate review for Iowa Gas with interim rates in place • Filed first rate review in 8 years for Colorado Electric Annual Filing Revenue New Rates Jurisdiction Date Increase ROE Debt / Equity Effective Comments / Status Arkansas Gas D
Slide 15: Wildfire Management & Risk Mitigation
Wildfire Management & Risk Mitigation • Prioritization of wildfire Asset Integrity Operational management and risk mitigation Programs Programs Response for decades within safety culture and reliability goals • Vegetation management • Published Wildfire Mitigation Plan in June • Transmission line in
Slide 16: Ready Wyoming Electric Transmission Initiative
Ready Wyoming Electric Transmission Initiative 260-mile Project to Further Interconnect and Expand Wyoming Electric System • Maintain long-term cost stability for customers • Enhance system resiliency • Expand access to power markets and provide flexibility as power markets develop in Western states
Slide 17: Colorado Clean Energy Plan
Colorado Clean Energy Plan ~400 MW of Renewable Resources to Reduce Emissions 80% by 2030* April 2023 – Plan approved by unanimous Preferred Portfolio** settlement • 200 MW solar build-transfer (utility owned) Mid-2023 – Issued RFP for 400 MW of • 50 MW battery storage build-transfer renewable r
Slide 18: South Dakota Integrated Resource Plan
South Dakota Integrated Resource Plan 100 MW of Utility-Owned, Dispatchable Natural Gas Resources by Mid-2026 Key Milestones: File 2024 Integrated Resource Plan File for project approval (CPCN) from Wyoming Public Service Commission* File for approval of siting permit from South Dakota Publi
Slide 19: Strong Long-term Growth Outlook
Strong Long-term Growth Outlook $4.3 billion 4% to 6% 55% to 65% Capital Investment 2024-2028 Dividend payout target + Capital-light opportunities Long-term EPS growth target * • Long-term growth rate in line with EPS ** • Integrated pure-play utility profile • Constructive regulatory jurisdictions
Slide 20: Questions
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Slide 21: Appendix
Appendix
Slide 22: 2024 Scorecard
2024 Scorecard Growth & Financial Performance Operational Excellence EPS, growth targets, credit metrics and utility growth Utilize consistent and efficient processes to deliver safe, reliable and cost-effective energy and a great customer experience Achieve earnings guidance Increase dividend 5
Slide 23: 2024 Earnings Guidance Assumptions
2024 Earnings Guidance Assumptions Black Hills reaffirmed its guidance for 2024 EPS available for common stock to be in the range of $3.80 to $4.00 based on the following assumptions: • Normal weather conditions within our utility service territories including temperatures, precipitation levels and
Slide 24: Capital Structure
Capital Structure ($ in millions) Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Capitalization Short-term Debt 837 333 420 342 335 501 1,061 525 525 1,125 600 600 600 Long-term Debt 3,530 4,126 4,127 4,128 4,130 4,131 3,607 3,954 3,956 3,800 3,801 3,803 4
Slide 25: Normalized EPS Seasonality
Normalized EPS Seasonality EPS, as adjusted* Q1 Q2 Q3 Q4 FY / YTD 2019* $1.73 $0.24 $0.44 $1.13 $3.53 EPS, as Adjusted, Normalized for Impacts of 2020* $1.59 $0.33 $0.58 $1.23 $3.73 Weather, Mark-to-Market and Winter Storm Uri* 2021 2022 $1.54 $1.82 $0.40 $0.52 $0.70 $0.54 $1.11 $1.11 $3.74 $3.97 20
Slide 26: Utility Weather and Demand
Utility Weather and Demand Degree Days Weather Impact Compared to Normal (EPS) Q1 Q2 Q3 Q4 Gas HDD 2,865 587 2020 2021 2022 2023 2024 2024 Actual Electric HDD 2,820 757 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Electric CDD - 219 $0.10 $0.10 Gas HDD -8% -20% 2024 vs $0.07 Electric HDD -7
Slide 27: Last Approved Utility Rate Review Results by Jurisdiction
Last Approved Utility Rate Review Results by Jurisdiction Authorized Authorized Effective Return on Authorized Capital Rate Base Jurisdiction Utility Date Equity Structure (in millions) Arkansas Arkansas Gas Oct. 2022 9.60% 55% debt / 45% equity $674.6 Colorado Colorado Electric Jan. 2017 9.37% 47.6
Slide 28: Electric Generation Capacity and Performance
Electric Generation Capacity and Performance Owned Generation Capacity* Electric Generation Availability 1,600 1,394 MW 100% 1,400 90% 1,210 MW 15% 1,200 80% 6% 70% 1,000 60% 807 MW Percent of Total Capacity 800 57% 62% 50% 37% 40% 600 30% 400 20% 63% 200 32% 28% 10% 0% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures Net Income Available for Common Stock, as adjusted We have provided non-GAAP earnings data reflecting adjustments for special items as specified in the GAAP to non-GAAP reconciliation table in this presentation. Net income available for common stock, as adjusted, is defin
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures Earnings, as adjusted (in millions) Earnings Per Share, as adjusted YD YTD 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2024 2024 Net income available for common stock $ 199.3 $ 227.6 $ 236.7 $ 258.4 $ 262.2 $ 150.6 $ 3.28 $ 3.65 $ 3.74 $ 3.97 $ 3.91 $ 2.19 (GAAP) Ad
Slide 31: BKH | 2024 Second Quarter Review | Aug. 1, 2024 | 31
BKH | 2024 Second Quarter Review | Aug. 1, 2024 | 31
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