RAPID CITY, S.D. - Nov. 4, 2013 - Black Hills Corp. (BKH) today announced 2013 third quarter financial results. Income from continuing operations, as adjusted, was $21.1 million, or $0.47 per diluted share, compared with $18.7 million, or $0.42 per diluted share, for the same period in 2012 (this is a non-GAAP measure, and an accompanying schedule for the GAAP to non-GAAP adjustment reconciliation is provided).
"Our businesses continued to perform well in the third quarter, meeting our strong earnings growth expectations," said David R. Emery, chairman, president and chief executive officer of Black Hills Corp. "Adjusted earnings per share increased 12 percent compared to the same period in the prior year, reflecting higher earnings at our electric utilities, power generation and coal mining segments combined with lower interest expense.
"We made excellent progress on two key growth initiatives during the quarter. Construction is well underway for the $222 million, 132 megawatt Cheyenne Prairie Generating Station in Cheyenne, Wyo. This project will meet our customers` growing demand for electricity at Cheyenne Light and replace generating capacity at Black Hills Power that is being closed due to U.S. Environmental Protection Agency regulations. Our oil and gas segment drilled and cased two horizontal wells in the Mancos Shale formation in the Southern Piceance Basin. We expect both wells to be completed and producing prior to year-end. The wells are part of a transaction through which we will earn approximately 20,000 net acres of Mancos Shale leasehold in the Southern Piceance Basin in exchange for drilling and completing the two wells.
"During the quarter, two more credit rating agencies recognized our improved financial position. Standard & Poor`s Rating Services raised our corporate credit rating to BBB from BBB- and Moody`s Investors Service raised our corporate credit rating to Baa2 from Baa3. All three credit rating agencies, including Fitch Ratings, have upgraded our corporate credit rating to a BBB equivalent. These rating agency actions, combined with another quarter of solid financial performance, affirm our strategies for improving cash flows, growing earnings and strengthening our balance sheet," Emery concluded.
Black Hills Corp. highlights, recent regulatory filings and updates, and other events include:
- On Oct. 16, the Colorado Public Utilities Commission denied Colorado Electric`s application for approval to acquire up to 30 megawatts of wind energy. This wind energy solicitation and related requests for proposal were reviewed by an independent evaluator who verified that our Power Generation segment`s bid was the lowest cost to customers. The commission stated its preference to consider renewable energy needs in Colorado Electric`s upcoming Electric Resource Plan hearings scheduled for Nov. 12-15.
- On Sept. 17, the South Dakota Public Utilities Commission approved a general rate case settlement agreement authorizing an increase for Black Hills Power of $8.8 million, or 6.4 percent, in annual electric revenue effective June 16, 2013. The settlement agreement was confidential and certain terms were not disclosed.
- On Sept. 17, the South Dakota Public Utilities Commission approved Black Hills Power`s request for a construction financing rider effective April 1 for the Cheyenne Prairie Generating Station in lieu of the typical allowance for funds used during construction. The rider allows Black Hills Power to recover financing costs during the construction period on its approximately 40 percent share of the total project cost that relates to South Dakota customers, reducing overall capital costs of the project.
- On April 30, Colorado Electric filed its Electric Resource Plan with the Colorado Public Utilities Commission, addressing its projected resource requirements through 2019. The resource plan identified a 40 megawatt, simple-cycle, natural gas-fired turbine as the replacement capacity for the retirement of the coal-fired, 42 megawatt W.N. Clark power plant. A certificate of public convenience and necessity was submitted to the commission requesting approval for the new generating capacity. The resource plan also recommended the retirement of the natural gas-fired Pueblo Units 5 and 6 by Dec. 31, 2013. A certificate of public convenience and necessity was submitted to the commission seeking approval to retire these plants. A hearing with the commission is scheduled for Nov. 12-15 regarding the resource plan and the two certificates of public convenience and necessity.
- On April 8, construction and infrastructure work commenced on the 132 megawatt Cheyenne Prairie Generating Station in Cheyenne, Wyo. Project costs for plant construction and associated transmission are estimated at $222 million. Construction for the new power plant is expected to be completed by the fourth quarter of 2014. The project is currently on schedule and within budget.
- Gas utilities continued efforts to acquire small gas distribution systems adjacent to their existing gas utility service territories. Another small system was acquired during the quarter, bringing the year-to-date total purchases to approximately 900 customers.
- Oil and gas drilled and cased two horizontal wells in the Mancos Shale formation in the Southern Piceance Basin. Completion operations commenced in October and both wells are expected to be completed and producing prior to year-end. The wells are part of a transaction in which the company will earn approximately 20,000 net acres of Mancos Shale leasehold in the Southern Piceance Basin in exchange for drilling and completing the two wells.
- On Oct. 29, Black Hills` board of directors declared a quarterly dividend on the common stock. Common shareholders of record at the close of business on Nov. 15 will receive $0.38 per share, equivalent to an annual dividend rate of $1.52 per share, payable on Dec. 1.
- On Sept. 25, Moody`s Investors Service raised the company`s corporate credit rating to Baa2 from Baa3, with a positive outlook.
- On July 24, Standard & Poor`s Rating Services raised the company`s corporate credit rating to BBB from BBB-, with a stable outlook
See the attached PDF for the full Q3 2013 earnings release.
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Source: Black Hills Corporation via Thomson Reuters ONE