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RAPID CITY, S.D. - Feb. 6, 2014 - Black Hills Corp. (BKH) today announced 2013 fourth quarter and full year financial results. Adjusted income from continuing operations, a non-GAAP measure,* for the fourth quarter of 2013 was $31 million, or $0.70 per share, compared to $30 million, or $0.68 per share, for the same period in 2012. For the 12 months ending Dec. 31, 2013, adjusted income from continuing operations was $109 million, or $2.45 per share, compared to $92 million, or $2.09 per share, for the same period in 2012.

"We are proud of our continued strong performance and the board of directors` recent approval of our 44th consecutive annual dividend increase," said David R. Emery, chairman, chief executive officer and president of Black Hills Corp. "Adjusted earnings of $2.45 per share increased 17 percent compared to the prior year. Results were driven by earnings growth in our natural gas utilities, power generation and coal mining segments and lower interest expense. Our fourth quarter utility performance was stronger than expected due primarily to colder weather, helping drive earnings above our guidance range. Our solid performance was rewarded by the stock market, with Black Hills recording industry-best stock price performance in 2013."

"We continued to lay a solid foundation for future earnings growth," said Emery. "Construction is well underway for the $222 million, 132 megawatt Cheyenne Prairie Generating Station. Our oil and gas segment completed two horizontal wells in the Mancos Shale formation in the southern Piceance Basin and our Colorado Electric utility received approval for a new 40 megawatt natural gas-fired turbine. We also completed a $525 million debt offering, the largest in the company`s history, which captured favorable interest rates for 10 years while retiring higher cost debt.

"Since May, three leading credit ratings agencies have recognized Black Hills` improved financial condition and business risk profile. One recently raised the company`s corporate credit rating to Baa1, while the other two raised our rating to BBB during 2013, acknowledging our growing earnings, increasing cash flows and improving balance sheet.

"On Jan. 30, 2014, we announced an increase in our quarterly dividend for the 44th consecutive year. Only two other electric or gas utility companies in the United States have a longer history of annual dividend increases.

"We remain excited about the future and our earnings growth potential. We have attractive investment opportunities in our utilities and remain encouraged by the potential of our Mancos Shale gas assets. Our solid financial performance and strengthened balance sheet position us to support and grow our businesses. Focusing on strong earnings growth, a superior customer experience, operational excellence and being a great workplace, we will continue our history of creating shareholder value for years to come," concluded Emery.

Black Hills Corp. highlights for the fourth quarter and full year 2013, recent regulatory filings, updates and other events include:


  • On Jan. 17, 2014, Black Hills Power filed a request with the Wyoming Public Service Commission to increase its annual electric revenue by $2.8 million to recover investments made in electric infrastructure, including the Cheyenne Prairie Generating Station under construction in Cheyenne, Wyo.
  • On Jan. 6, 2014, the Colorado Public Utilities Commission issued its initial written decision, approving a settlement agreement between Colorado Electric, commission staff and intervening parties for the Electric Resource Plan filed by Colorado Electric on May 1, 2013. The settlement approved the construction of a 40 megawatt, natural gas-fired combustion turbine to replace the retirement of the W.N. Clark power plant. The plan also included retirement of the aging Pueblo 5 and 6 units. A written order is expected in the first quarter of 2014.
  • On Dec. 31, Colorado Electric retired its W.N. Clark coal-fired power plant in Cañon City, Colo., and its Pueblo 5 and 6 natural gas-fired steam units in Pueblo, Colo.
  • On Dec. 2, Cheyenne Light Fuel & Power filed a request with the Wyoming Public Service Commission to increase annual revenue by $14 million to recover investments in electric and natural gas infrastructure, including the Cheyenne Prairie Generating Station.
  • On Sept. 17, the South Dakota Public Utilities Commission approved Black Hills Power`s general rate case settlement agreement authorizing an increase of $8.8 million in annual electric revenue effective June 16, 2013.
  • On Sept. 17, the South Dakota Public Utilities Commission approved Black Hills Power`s request for a construction financing rider effective April 1, 2013, for Cheyenne Prairie Generating Station in lieu of the traditional allowance for funds used during construction. The rider allows recovery of financing costs during the construction period, reducing long-term customer costs.
  • On April 8, construction commenced on the 132 megawatt Cheyenne Prairie Generating Station. Commercial operation is expected in the fourth quarter of 2014. Costs for plant construction and associated transmission are estimated at $222 million, and the project is currently on schedule and within budget. Joint ownership of the plant by Black Hills Power and Cheyenne Light Fuel & Power creates operating and cost efficiencies, reducing overall customer costs.
  • Efforts continued to acquire small natural gas distribution systems near existing utility service territories. During 2013, five systems with a total of approximately 900 customers were added. In January 2014, another acquisition was announced that will add 400 customers in northeastern Wyoming. This transaction requires approval by the Wyoming Public Service Commission and is expected to close by year-end 2014.

Non-Regulated Energy

  • Two horizontal wells were drilled and completed in the Mancos Shale formation in the southern Piceance Basin. One well was placed on production late December 2013 and the second well was placed on production late January 2014. These wells were part of a transaction in which we earned approximately 20,000 net acres of Mancos Shale leasehold in exchange for drilling and completing the two wells.
  • On May 7, Black Hills Wyoming entered into an agreement to sell its 40 megawatt CTII natural gas-fired generating unit to the City of Gillette for approximately $22 million, subject to closing adjustments. The sale is expected to close in August 2014 upon the expiration of an existing power sale agreement. The sale is subject to Federal Energy Regulatory Commission approval and other requirements included in the contract. 


  • On Jan. 30, 2014, Black Hills` board of directors approved an increase in the quarterly dividend of $0.01 per common share to $0.39 per share, equivalent to an annual increase of $0.04 and dividend rate of $1.56 per share. This represents the 44th consecutive annual dividend increase. Common shareholders of record at the close of Feb. 14, 2014, will receive $0.39 per share, payable on March 1, 2014. 
  • On Nov. 19, the company completed its largest ever public debt offering. Proceeds from the $525 million, 4.25 percent, 10 year senior unsecured notes were used to retire higher cost debt, settle interest rate swaps and pay down other corporate borrowings.
  • Since May, three credit ratings agencies have raised their corporate credit ratings for Black Hills. On Jan. 30, 2014, Moody`s Investors Service raised the company`s corporate rating to Baa1 from Baa2, with a stable outlook. Moody`s had previously raised the company`s corporate credit rating to Baa2 from Baa3, with a positive outlook, on Sept. 25. On July 24, Standard & Poor`s Ratings Agency raised the corporate credit rating to BBB from BBB-, with a stable outlook. On May 10, Fitch Ratings raised the company`s corporate credit rating to BBB from BBB-, with a positive outlook. 
  • On June 21, the company closed a $275 million unsecured term loan with a maturity date of June 19, 2015. The loan has a cost of borrowing based on LIBOR plus a spread of 112.5 basis points per annum. The proceeds of the loan were used to repay term loans of $100 million and $150 million and other short-term debt.

Please see the attached file or visit Black Hills` website at www.blackhillscorp.com for a complete copy of the 2013 Fourth Quarter and Full Year Results earnings release.

BKH 2013 Q4 and Full Year Earnings Release

This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Black Hills Corporation via GlobeNewswire