Black Hills Corp. (NYSE: BKH) today announced financial results for
the third quarter of 2023. Net income available for common stock
and earnings per share for the three and nine months ended
Sept. 30, 2023, compared to the three and nine months ended
Sept. 30, 2022, were:
|
Three Months Ended Sept. 30, |
|
|
Nine Months Ended Sept. 30, |
|
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
(in millions, except per share amounts) |
|
Net income available for common stock |
$ |
45.4 |
|
$ |
35.0 |
|
|
$ |
182.5 |
|
$ |
185.9 |
|
Earnings per share, Diluted |
$ |
0.67 |
|
$ |
0.54 |
|
|
$ |
2.74 |
|
$ |
2.86 |
|
Earnings of $0.67 per share for the third quarter
were driven by new rates and rider recovery, recapture of lost
revenue from a 2021 generation outage, expense management and a
gain on a strategic sale of land in Wyoming to a customer to
support continued load growth. These positive drivers more than
offset impacts of inflation on operating expenses and interest
expense and the impact of new shares of common stock issued.
“I’m proud of the operational and financial
performance delivered by our team and our progress on key
initiatives,” said Linn Evans, president and CEO of Black Hills
Corp. “Our strong earnings are driven by solid execution as we
continue to invest in the core needs of our customers, advance our
regulatory plan, and deliver creative energy solutions for our
customers. We recently filed a settlement for our natural gas rate
review in Wyoming, and we appreciate and value the constructive
regulatory and business environment in the state. We maintained
excellent liquidity and continued to strengthen our balance sheet
through strong cashflows and benefits from our financing strategy
during the quarter.
“We continue to achieve key milestones for our
electric resource plans and initiatives to reliably serve growing
customer demand for energy and continue to responsibly reduce
emissions. In South Dakota, we are conducting negotiations for 100
megawatts of build-transfer renewable generation to be in service
in 2026, and in Colorado, we are evaluating a strong bid response
to add 400 megawatts of renewable resources by 2030. In Wyoming, we
also placed in service assets supporting data center expansion and
continued to progress on our Ready Wyoming transmission project
providing long term benefit to customers.
“We expect to deliver earnings at the top end of
our 2023 guidance range and look forward to sharing more detail
early next year about our growing pipeline of investment
opportunities on behalf of customers,” concluded Evans.
THIRD-QUARTER 2023 HIGHLIGHTS AND
UPDATES
Electric Utilities
- During the third quarter, South Dakota Electric advanced its
competitive bidding process in its request for proposals for 100
megawatts of build-transfer renewable energy resources to be in
service by mid-year 2026. Negotiations are underway, with the
results to be presented to the South Dakota Public Utilities
Commission and included in a certificate of public convenience and
necessity filing with the Wyoming Public Service Commission during
the first quarter of 2024.
- On July 31, Colorado Electric issued a request for proposals
for 400 megawatts of new resources to be in service between 2026
and 2029 to achieve objectives in its Clean Energy Plan. The
company received a strong response of diverse project proposals and
is currently evaluating the bids.
- On July 24, Wyoming Electric set a new all-time and summer peak
load of 312 megawatts, surpassing the previous peak of 294
megawatts set in July 2022.
Gas Utilities
- On Oct. 13, Wyoming Gas filed a settlement agreement with the
Wyoming Public Service Commission for its rate review request to
recover more than $140 million of system investments. The agreement
provides $13.9 million in new annual revenue based on a capital
structure of 51% equity, 49% debt and a return on equity of 9.85%.
Subject to commission approval, the agreement includes new rates
effective Jan. 1, 2024, and provides a four-year renewal of its
integrity investment rider.
- On July 12, Rocky Mountain Natural Gas received approval from
the CPUC of a settlement agreement for its rate review filed on
Oct. 7, 2022. The settlement provided new rates effective July 15,
2023, which are expected to generate $8.2 million in new annual
revenue based on a weighted average cost of capital of 6.93% with a
capital structure that reflects an equity range of 50% to 52%, a
debt range of 50% to 48% and a return on equity range of 9.5% to
9.7%. The settlement also shifted $8.3 million of System Safety and
Integrity Rider revenues to base rates and terminated the
SSIR.
Corporate and Other
- On Oct. 23, Black Hills’ board of directors approved a
quarterly dividend of $0.625 per share payable on Dec. 1, 2023, to
shareholders of record at the close of business on Nov. 17, 2023.
- On Sept. 15, Black Hills completed a debt offering of $450
million, 6.15% senior unsecured notes due May 15, 2034. The
proceeds, along with available cash, will be used to repay the $525
million, 4.25% senior unsecured notes maturing Nov. 30, 2023.
- During the third quarter, Black Hills issued 0.9 million shares
of new common stock for net proceeds of $52.8 million under its
at-the-market equity offering program. Year to date, the company
has issued a total of 1.8 million shares of new common stock for
net proceeds of $107.7 million.
2023 EARNINGS GUIDANCE
REAFFIRMED
Black Hills reaffirms its guidance for 2023
earnings per share available for common stock to be in the range of
$3.65 to $3.85 based on the follow 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;
- Constructive and timely outcomes of utility regulatory
dockets;
- No significant unplanned outages at any of our generating
facilities;
- Production tax credits of approximately $20 million associated
with wind generation assets;
- Capital investment of approximately $615 million;
- Equity issuance of $140 million to $160 million through the
at-the-market equity offering program;
- Interest expense of $180 million to $185 million, including
debt refinancing activity;* and
- Total operating expense of $600 million to $610 million,
excluding fuel, purchased power, cost of natural gas sold,
depreciation, depletion and amortization.*
* Guidance assumptions for interest expense and
operating expense are being provided for only 2023 due to ongoing
volatility in inflation and rising interest rate environments.
2024 EARNINGS GUIDANCE TO BE ANNOUNCED
DURING YEAR-END 2023 EARNINGS
Black Hills will provide its annual financial
update during its fourth quarter and full-year earnings call. This
update in early February 2024 will include earnings and dividend
guidance for 2024 and the capital investment forecast for 2024
through 2028.
|
|
BLACK HILLS CORPORATION CONSOLIDATED
FINANCIAL RESULTS(Minor differences may result due to
rounding) |
|
|
|
|
Three Months Ended Sept. 30, |
|
|
Nine Months Ended Sept. 30, |
|
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
(in millions) |
|
Operating income: |
|
|
|
|
|
|
|
|
|
Electric Utilities |
$ |
83.0 |
|
$ |
69.5 |
|
|
$ |
190.7 |
|
$ |
165.5 |
|
Gas Utilities |
|
15.4 |
|
|
10.6 |
|
|
|
147.8 |
|
|
162.3 |
|
Corporate and Other |
|
(0.6 |
) |
|
(0.6 |
) |
|
|
(2.3 |
) |
|
(2.6 |
) |
Operating income |
|
97.8 |
|
|
79.5 |
|
|
|
336.2 |
|
|
325.2 |
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(41.0 |
) |
|
(40.0 |
) |
|
|
(126.0 |
) |
|
(117.3 |
) |
Other income (expense), net |
|
(0.6 |
) |
|
0.5 |
|
|
|
(1.5 |
) |
|
2.7 |
|
Income tax benefit (expense) |
|
(7.4 |
) |
|
(2.1 |
) |
|
|
(16.0 |
) |
|
(15.9 |
) |
Net income |
|
48.8 |
|
|
37.8 |
|
|
|
192.7 |
|
|
194.7 |
|
Net income attributable to non-controlling interest |
|
(3.4 |
) |
|
(2.9 |
) |
|
|
(10.2 |
) |
|
(8.8 |
) |
Net income available for common stock |
$ |
45.4 |
|
$ |
35.0 |
|
|
$ |
182.5 |
|
$ |
185.9 |
|
|
Three Months Ended Sept. 30, |
|
|
Nine Months Ended Sept. 30, |
|
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
Weighted average common shares outstanding (in
thousands): |
|
|
|
|
|
|
Basic |
|
67,315 |
|
|
64,876 |
|
|
|
66,652 |
|
|
64,722 |
|
Diluted |
|
67,389 |
|
|
65,061 |
|
|
|
66,725 |
|
|
64,910 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
Earnings Per Share, Basic |
$ |
0.67 |
|
$ |
0.54 |
|
|
$ |
2.74 |
|
$ |
2.87 |
|
Earnings Per Share, Diluted |
$ |
0.67 |
|
$ |
0.54 |
|
|
$ |
2.74 |
|
$ |
2.86 |
|
CONFERENCE CALL AND WEBCAST
Black Hills will host a live conference call and
webcast at 11 a.m. EDT on Thursday, Nov. 2, 2023, to discuss
financial and operating performance.
To access the live webcast and download a copy of
the investor presentation, go to the “Investor Relations” section
of the Black Hills website at www.blackhillscorp.com and click on
“News and Events” and then “Events & Presentation.” The
presentation will be posted on the website before the webcast.
Listeners should allow at least five minutes for registering and
accessing the presentation. For those unable to listen to the live
broadcast, a replay will be available on the company’s website.
To ask a question during the live broadcast, users
can access dial-in information and a personal identification number
by registering for the event at
https://register.vevent.com/register/BIfdb4c4cbe87f43d08c5f5e5f6a6a927e.
A listen-only webcast player and presentation
slides can be accessed live at
https://edge.media-server.com/mmc/p/szmbhjvi with a replay of
the event available for up to one year.
EEI FINANCIAL CONFERENCE
ATTENDANCE
Leadership from Black Hills will be attending the
2023 Edison Electric Institute Financial Conference taking place
from Nov. 12, 2023, through Nov. 14, 2023. An investor presentation
will be available prior to the conference on Black Hills’ website
at www.blackhillscorp.com under “Events and Presentations” in the
“Investor Relations” section.
USE OF NON-GAAP FINANCIAL
MEASURES
Gas and Electric Utility Margin
Gas and Electric Utility margin (revenue less cost
of sales) is considered a non-GAAP financial measure due to the
exclusion of operation and maintenance expenses, depreciation and
amortization expenses, and property and production taxes from the
measure. The presentation of Gas and Electric Utility margin is
intended to supplement investors’ understanding of operating
performance.
Electric Utility margin is calculated as operating
revenue less cost of fuel and purchased power. Gas Utility margin
is calculated as operating revenue less cost of gas sold. Our Gas
and Electric Utility margin is impacted by the fluctuations in
power purchases and natural gas and other fuel supply costs.
However, while these fluctuating costs impact Gas and Electric
Utility margin as a percentage of revenue, they only impact total
Gas and Electric Utility margin if the costs cannot be passed
through to customers.
Our Gas and Electric Utility margin measure may
not be comparable to other companies’ Gas and Electric Utility
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
Operating results from our business segments for
the three and nine months ended Sept. 30, 2023, compared to
the three and nine months ended Sept. 30, 2022, are discussed
below.
Certain lines of business 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 and nine months ended Sept. 30, 2023
and 2022 are not necessarily indicative of the results of
operations to be expected for any other period or for the entire
year.
Segment information does not include inter-company
eliminations and all amounts are presented on a pre-tax basis
unless otherwise indicated. Minor differences in amounts may result
due to rounding.
Electric Utilities
|
Three Months Ended Sept. 30, |
|
Variance |
|
|
Nine Months Ended Sept. 30, |
|
Variance |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
|
(in millions) |
|
Revenue |
$ |
237.3 |
|
$ |
258.7 |
|
$ |
(21.3 |
) |
|
$ |
649.1 |
|
$ |
669.6 |
|
$ |
(20.5 |
) |
Cost of fuel and purchased power |
|
55.4 |
|
|
86.0 |
|
|
(30.5 |
) |
|
|
147.2 |
|
|
195.0 |
|
|
(47.7 |
) |
Electric Utility margin (non-GAAP) |
|
181.9 |
|
|
172.7 |
|
|
9.2 |
|
|
|
501.9 |
|
|
474.6 |
|
|
27.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations and maintenance |
|
63.1 |
|
|
68.9 |
|
|
(5.8 |
) |
|
|
204.5 |
|
|
207.6 |
|
|
(3.1 |
) |
Depreciation and amortization |
|
35.8 |
|
|
34.3 |
|
|
1.4 |
|
|
|
106.7 |
|
|
101.6 |
|
|
5.1 |
|
Operating income |
$ |
83.0 |
|
$ |
69.5 |
|
$ |
13.5 |
|
|
$ |
190.7 |
|
$ |
165.5 |
|
$ |
25.2 |
|
Three Months Ended Sept. 30, 2023,
Compared with Three Months Ended Sept. 30, 2022
Electric Utility margin increased as a result
of:
|
(in millions) |
|
New rates and rider recovery |
$ |
5.7 |
|
Wygen I revenue recovery under business interruption insurance
(a) |
|
5.0 |
|
Weather |
|
(2.3 |
) |
Other |
|
0.8 |
|
|
$ |
9.2 |
|
____________________ |
(a) |
In 2021, Wygen I experienced an unplanned outage which resulted in
lost revenues. A claim for these losses was submitted under
our business interruption insurance policy. During the third
quarter of 2023, we recovered $5.0 million from our business
interruption insurance which was recognized as Revenue. |
Operations and maintenance expense decreased
primarily due to a $3.9 million gain on the sale of land in Wyoming
to an existing hyperscale data center customer to support continued
load growth.
Depreciation and amortization increased primarily
due to a higher asset base driven by current year and prior year
capital expenditures.
Nine Months Ended Sept. 30, 2023, Compared
with Nine Months Ended Sept. 30, 2022
Electric Utility margin increased as a result
of:
|
(in millions) |
|
New rates and rider recovery |
$ |
15.9 |
|
Wygen I revenue recovery under business interruption insurance
(a) |
|
5.0 |
|
Integrated Generation (b) |
|
5.0 |
|
Transmission services |
|
2.8 |
|
Off-system excess energy sales |
|
1.1 |
|
Weather |
|
(4.5 |
) |
Other |
|
2.0 |
|
|
$ |
27.3 |
|
____________________ |
(a) |
In 2021, Wygen I experienced an unplanned outage which resulted in
lost revenues. A claim for these losses was submitted under
our business interruption insurance policy. During the third
quarter of 2023, we recovered $5.0 million from our business
interruption insurance which was recognized as Revenue. |
(b) |
Primarily driven by favorable mining volumes due to a prior year
planned outage, mining contract pricing and increased Black
Hills Colorado IPP fired-engine hours. |
Operations and maintenance expense decreased
primarily due to a one-time $7.7 million gain on the planned sale
of Northern Iowa Windpower assets and a $3.9 million gain on the
sale of land in Wyoming to an existing hyperscale data center
customer to support continued load growth partially offset by $5.5
million of higher employee-related expenses and $3.5 million of
higher mining and generation expenses driven by planned outages,
higher fuel costs and higher materials costs.
Depreciation and amortization increased primarily
due to a higher asset base driven by current year and prior year
capital expenditures.
|
Three Months Ended Sept. 30, |
|
|
Nine Months Ended Sept. 30, |
|
Operating Statistics |
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
Quantities Sold (MWh): |
|
|
|
|
|
|
|
|
|
Retail Sales |
|
1,557,204 |
|
|
1,532,989 |
|
|
|
4,294,407 |
|
|
4,252,835 |
|
Contract/Off-system/Power Marketing Wholesale |
|
278,985 |
|
|
291,539 |
|
|
|
922,234 |
|
|
929,257 |
|
Total Regulated |
|
1,836,189 |
|
|
1,824,528 |
|
|
|
5,216,641 |
|
|
5,182,092 |
|
Non-regulated |
|
25,369 |
|
|
59,745 |
|
|
|
102,563 |
|
|
221,609 |
|
Total quantities sold |
|
1,861,558 |
|
|
1,884,273 |
|
|
|
5,319,204 |
|
|
5,403,701 |
|
|
|
|
|
|
|
|
|
|
|
Contracted generated facilities availability by fuel type: |
|
|
|
|
|
|
|
|
|
Coal |
|
96.3 |
% |
|
96.5 |
% |
|
|
93.7 |
% |
|
89.7 |
% |
Natural gas and diesel oil |
|
94.2 |
% |
|
97.0 |
% |
|
|
94.0 |
% |
|
95.8 |
% |
Wind |
|
93.4 |
% |
|
94.4 |
% |
|
|
93.4 |
% |
|
94.6 |
% |
Total availability |
|
94.7 |
% |
|
96.4 |
% |
|
|
93.8 |
% |
|
94.0 |
% |
|
|
|
|
|
|
|
|
|
|
Wind capacity factor |
|
31.3 |
% |
|
22.9 |
% |
|
|
37.9 |
% |
|
34.7 |
% |
|
Three Months Ended Sept. 30, |
|
Nine Months Ended Sept. 30, |
Degree Days |
2023 |
2022 |
|
2023 |
2022 |
|
Actual |
Variance from Normal |
Actual |
Variance from Normal |
|
Actual |
Variance from Normal |
Actual |
Variance from Normal |
Heating Degree Days |
91 |
(19)% |
66 |
(60)% |
|
4,031 |
4% |
3,952 |
1% |
Cooling Degree Days |
635 |
(2)% |
828 |
36% |
|
710 |
(15)% |
1,041 |
34% |
Gas Utilities
|
Three Months Ended Sept. 30, |
|
Variance |
|
|
Nine Months Ended Sept. 30, |
|
Variance |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
|
(in millions) |
|
Revenue |
$ |
174.3 |
|
$ |
208.3 |
|
$ |
(34.0 |
) |
|
$ |
1,103.9 |
|
$ |
1,103.8 |
|
$ |
0.1 |
|
Cost of natural gas sold |
|
46.9 |
|
|
82.8 |
|
|
(35.9 |
) |
|
|
602.8 |
|
|
599.2 |
|
|
3.6 |
|
Gas Utility margin (non-GAAP) |
|
127.4 |
|
|
125.5 |
|
|
1.8 |
|
|
|
501.1 |
|
|
504.6 |
|
|
(3.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations and maintenance |
|
82.9 |
|
|
85.3 |
|
|
(2.4 |
) |
|
|
269.0 |
|
|
255.4 |
|
|
13.5 |
|
Depreciation and amortization |
|
29.0 |
|
|
29.6 |
|
|
(0.6 |
) |
|
|
84.4 |
|
|
86.8 |
|
|
(2.5 |
) |
Operating income |
$ |
15.4 |
|
$ |
10.6 |
|
$ |
4.8 |
|
|
$ |
147.8 |
|
$ |
162.3 |
|
$ |
(14.6 |
) |
Three Months Ended Sept. 30, 2023,
Compared with Three Months Ended Sept. 30, 2022
Gas Utility margin increased as a result of:
|
(in millions) |
|
New rates and rider recovery |
$ |
2.6 |
|
Retail customer growth and demand |
|
2.4 |
|
Mark-to-market on non-utility natural gas commodity contracts |
|
(1.4 |
) |
Weather |
|
(1.3 |
) |
Other |
|
(0.5 |
) |
|
$ |
1.8 |
|
Operations and maintenance expense decreased
primarily due to $2.4 million of lower outside services
expenses.
Depreciation and amortization was comparable to
the same period in the prior year.
Nine Months Ended Sept. 30, 2023, Compared
with Nine Months Ended Sept. 30, 2022
Gas Utility margin decreased as a result of:
|
(in millions) |
|
Prior year
true-up of Winter Storm Uri carrying costs (a) |
$ |
(10.3 |
) |
Mark-to-market on non-utility natural gas commodity contracts |
|
(5.4 |
) |
Weather |
|
(4.3 |
) |
New rates
and rider recovery |
|
10.3 |
|
Retail
customer growth and demand |
|
7.1 |
|
Other |
|
(0.9 |
) |
|
$ |
(3.5 |
) |
____________________ |
(a) |
In certain jurisdictions, we have commission approval to recover
carrying costs on Winter Storm Uri regulatory assets which offset
increased interest expense. During the second quarter of 2022, we
accrued a one-time, $10.3 million true-up of these carrying costs
to reflect commission authorized rates. |
Operations and maintenance expense increased
primarily due to $12.3 million of higher employee-related
expenses.
Depreciation and amortization was comparable to
the same period in the prior year.
|
Three Months Ended Sept. 30, |
|
|
Nine Months Ended Sept. 30, |
|
Operating Statistics |
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
Quantities Sold and Transported (Dth): |
|
|
|
|
|
|
|
|
|
Distribution |
|
8,075,568 |
|
|
9,100,791 |
|
|
|
66,117,252 |
|
|
71,884,859 |
|
Transport and Transmission |
|
36,773,895 |
|
|
35,302,591 |
|
|
|
118,180,078 |
|
|
117,971,404 |
|
Total Quantities Sold |
|
44,849,463 |
|
|
44,403,382 |
|
|
|
184,297,330 |
|
|
189,856,263 |
|
|
Three Months Ended Sept. 30, |
|
Nine Months Ended Sept. 30, |
|
2023 |
2022 |
|
2023 |
2022 |
|
Actual |
Variance from Normal |
Actual |
Variance from Normal |
|
Actual |
Variance from Normal |
Actual |
Variance from Normal |
Heating Degree Days |
56 |
(35)% |
70 |
(53)% |
|
3,926 |
1% |
4,003 |
---% |
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 Sept. 30, |
|
Variance |
|
|
Nine Months Ended Sept. 30, |
|
Variance |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
|
(in millions) |
|
Operating (loss) |
$ |
(0.6 |
) |
$ |
(0.6 |
) |
$ |
(0.1 |
) |
|
$ |
(2.3 |
) |
$ |
(2.6 |
) |
$ |
0.3 |
|
Three Months Ended Sept. 30, 2023,
Compared with Three Months Ended Sept. 30, 2022
Operating (loss) was comparable to the same period
in the prior year.
Nine Months Ended Sept. 30, 2023, Compared
with Nine Months Ended Sept. 30, 2022
Operating (loss) was comparable to the same period
in the prior year.
Consolidated Interest Expense, Other
Income and Income Tax Expense
|
Three Months Ended Sept. 30, |
|
Variance |
|
|
Nine Months Ended Sept. 30, |
|
Variance |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
|
(in thousands) |
|
Interest expense, net |
$ |
(41.0 |
) |
$ |
(40.0 |
) |
$ |
(1.0 |
) |
|
$ |
(126.0 |
) |
$ |
(117.3 |
) |
$ |
(8.7 |
) |
Other income (expense), net |
$ |
(0.6 |
) |
$ |
0.5 |
|
$ |
(1.1 |
) |
|
$ |
(1.5 |
) |
$ |
2.7 |
|
$ |
(4.2 |
) |
Income tax benefit (expense) |
$ |
(7.4 |
) |
$ |
(2.1 |
) |
$ |
(5.3 |
) |
|
$ |
(16.0 |
) |
$ |
(15.9 |
) |
$ |
(0.0 |
) |
Three Months Ended Sept. 30, 2023,
Compared with Three Months Ended Sept. 30, 2022
Interest Expense, net
Interest expense, net was comparable to the same
period in the prior year.
Other Income (Expense), net
Other expense, net was comparable to the same
period in the prior year.
Income Tax Benefit
Income tax expense increased primarily due to
higher pre-tax income and a higher effective tax rate. For the
three months ended Sept. 30, 2023, the effective tax rate was
13.1% compared to 5.2% for the same period in 2022. The higher
effective tax rate was primarily due to $1.4 million of lower tax
benefits from various current and prior year state rate
changes.
Nine Months Ended Sept. 30, 2023, Compared
with Nine Months Ended Sept. 30, 2022
Interest Expense, net
Interest expense, net increased due to higher
interest rates partially offset by increased interest income on
higher cash and cash equivalents balances.
Other Income (Expense), net
Other expense, net increased primarily due to
higher non-service benefit plan costs driven by higher discount
rates and higher costs for our non-qualified benefit plans which
were driven by market performance.
Income Tax Expense
Income tax expense and the effective tax rate were
comparable to the same period in the prior year. For the nine
months ended Sept. 30, 2023, the effective tax rate was 7.6%
compared to 7.6% for the same period in 2022. The effective tax
rate was comparable primarily due to a $8.2 million tax benefit
from a current year Nebraska income tax rate decrease offset by
$5.8 million of lower tax benefits from various current and prior
year state tax rate changes and $2.3 million of lower wind PTCs
driven by the March 2023 sale of Northern Iowa Windpower
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
1.33 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/corporateresponsibilit 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 2023 earnings
guidance. 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
2022 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
is 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;
- The effects of changing interest rates;
- 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;
- Our ability to overcome the impacts of supply chain disruptions
on availability and cost of materials;
- The effects of inflation and volatile energy prices; 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.
CONSOLIDATING INCOME
STATEMENTS
(Minor differences may result due to
rounding.)
|
Consolidating Income Statement |
|
Three Months Ended Sept. 30, 2023 |
Electric Utilities |
|
Gas Utilities |
|
Corporate and Other |
|
Total |
|
|
(in millions) |
|
Revenue |
$ |
237.3 |
|
$ |
174.3 |
|
$ |
(4.5 |
) |
$ |
407.1 |
|
|
|
|
|
|
|
|
|
|
Fuel, purchased power and cost of natural gas sold |
|
55.4 |
|
|
46.9 |
|
|
(0.1 |
) |
|
102.2 |
|
Operations and maintenance |
|
63.1 |
|
|
82.9 |
|
|
(3.8 |
) |
|
142.2 |
|
Depreciation, depletion and amortization |
|
35.8 |
|
|
29.0 |
|
|
0.1 |
|
|
64.9 |
|
Operating income (loss) |
|
83.0 |
|
|
15.4 |
|
|
(0.6 |
) |
|
97.8 |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
|
|
|
|
|
(41.0 |
) |
Other income (expense), net |
|
|
|
|
|
|
|
(0.6 |
) |
Income tax (expense) |
|
|
|
|
|
|
|
(7.4 |
) |
Net income |
|
|
|
|
|
|
|
48.8 |
|
Net income attributable to non-controlling interest |
|
|
|
|
|
|
|
(3.4 |
) |
Net income available for common stock |
|
|
|
|
|
|
$ |
45.4 |
|
|
Consolidating Income Statement |
|
Nine Months Ended Sept. 30, 2023 |
Electric Utilities |
|
Gas Utilities |
|
Corporate and Other |
|
Total |
|
|
(in millions) |
|
Revenue |
$ |
649.1 |
|
$ |
1,103.9 |
|
$ |
(13.5 |
) |
$ |
1,739.6 |
|
|
|
|
|
|
|
|
|
|
Fuel, purchased power and cost of natural gas sold |
|
147.2 |
|
|
602.8 |
|
|
(0.3 |
) |
|
749.8 |
|
Operations and maintenance |
|
204.5 |
|
|
269.0 |
|
|
(11.0 |
) |
|
462.4 |
|
Depreciation, depletion and amortization |
|
106.7 |
|
|
84.4 |
|
|
0.2 |
|
|
191.2 |
|
Operating income (loss) |
|
190.7 |
|
|
147.8 |
|
|
(2.3 |
) |
|
336.2 |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
|
|
|
|
|
(126.0 |
) |
Other income (expense), net |
|
|
|
|
|
|
|
(1.5 |
) |
Income tax (expense) |
|
|
|
|
|
|
|
(16.0 |
) |
Net income |
|
|
|
|
|
|
|
192.7 |
|
Net income attributable to non-controlling interest |
|
|
|
|
|
|
|
(10.2 |
) |
Net income available for common stock |
|
|
|
|
|
|
$ |
182.5 |
|
|
Consolidating Income Statement |
|
Three Months Ended Sept. 30, 2022 |
Electric Utilities |
|
Gas Utilities |
|
Corporate and Other |
|
Total |
|
|
(in millions) |
|
Revenue |
$ |
258.7 |
|
$ |
208.3 |
|
$ |
(4.3 |
) |
$ |
462.6 |
|
|
|
|
|
|
|
|
|
|
Fuel, purchased power and cost of natural gas sold |
|
86.0 |
|
|
82.8 |
|
|
(0.2 |
) |
|
168.5 |
|
Operations and maintenance |
|
68.9 |
|
|
85.3 |
|
|
(3.6 |
) |
|
150.6 |
|
Depreciation, depletion and amortization |
|
34.3 |
|
|
29.6 |
|
|
0.1 |
|
|
64.0 |
|
Operating income (loss) |
|
69.5 |
|
|
10.6 |
|
|
(0.6 |
) |
|
79.5 |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
|
|
|
|
|
(40.0 |
) |
Other income (expense), net |
|
|
|
|
|
|
|
0.5 |
|
Income tax (expense) |
|
|
|
|
|
|
|
(2.1 |
) |
Net income |
|
|
|
|
|
|
|
37.8 |
|
Net income attributable to non-controlling interest |
|
|
|
|
|
|
|
(2.9 |
) |
Net income available for common stock |
|
|
|
|
|
|
$ |
35.0 |
|
|
Consolidating Income Statement |
|
Nine Months Ended Sept. 30, 2022 |
Electric Utilities |
|
Gas Utilities |
|
Corporate and Other |
|
Total |
|
|
(in millions) |
|
Revenue |
$ |
669.6 |
|
$ |
1,103.8 |
|
$ |
(13.1 |
) |
$ |
1,760.4 |
|
|
|
|
|
|
|
|
|
|
Fuel, purchased power and cost of natural gas sold |
|
195.0 |
|
|
599.2 |
|
|
(0.6 |
) |
|
793.6 |
|
Operations and maintenance |
|
207.6 |
|
|
255.4 |
|
|
(10.1 |
) |
|
452.9 |
|
Depreciation, depletion and amortization |
|
101.6 |
|
|
86.8 |
|
|
0.2 |
|
|
188.6 |
|
Operating income (loss) |
|
165.5 |
|
|
162.3 |
|
|
(2.6 |
) |
|
325.2 |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
|
|
|
|
|
(117.3 |
) |
Other income (expense), net |
|
|
|
|
|
|
|
2.7 |
|
Income tax (expense) |
|
|
|
|
|
|
|
(15.9 |
) |
Net income |
|
|
|
|
|
|
|
194.7 |
|
Net income attributable to non-controlling interest |
|
|
|
|
|
|
|
(8.8 |
) |
Net income available for common stock |
|
|
|
|
|
|
$ |
185.9 |
|
|
|
Investor Relations: |
|
Jerome E.
Nichols |
|
Phone |
605-721-1171 |
Email |
investorrelations@blackhillscorp.com |
|
|
Media Contact: |
|
24-hour
Media Assistance |
888-242-3969 |
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