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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Black Hills Corp. Corporate Units (delisted) | NYSE:BKHU | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 63.73 | 0 | 01:00:00 |
Black Hills Corporation
|
|
Incorporated in South Dakota
|
IRS Identification Number 46-0458824
|
7001 Mount Rushmore Road
|
|
Rapid City, South Dakota 57702
|
|
Registrant’s telephone number (605) 721-1700
|
|
Former name, former address, and former fiscal year if changed since last report
|
|
NONE
|
|
Yes
x
|
|
No
o
|
|
|
Yes
x
|
|
No
o
|
|
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
|
|
|
|
|
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
|
|
|
|
|
|
|
|
|
Emerging growth company
o
|
|
|
|
|
|
|
|
Yes
o
|
|
No
x
|
|
Class
|
Outstanding at November 1, 2018
|
||
Common stock, $1.00 par value
|
59,974,620
|
|
shares
|
AFUDC
|
Allowance for Funds Used During Construction
|
AOCI
|
Accumulated Other Comprehensive Income (Loss)
|
APSC
|
Arkansas Public Service Commission
|
Arkansas Gas
|
Black Hills Energy Arkansas, Inc., a direct, wholly-owned subsidiary of Black Hills Gas Inc.
|
ASC
|
Accounting Standards Codification
|
ASU
|
Accounting Standards Update issued by the FASB
|
ATM
|
At-the-market equity offering program
|
Availability
|
The availability factor of a power plant is the percentage of the time that it is available to provide energy.
|
Bbl
|
Barrel
|
BHC
|
Black Hills Corporation; the Company
|
Black Hills Electric Generation
|
Black Hills Electric Generation, LLC, a direct, wholly-owned subsidiary of Black Hills Non-regulated Holdings
|
Black Hills Energy
|
The name used to conduct the business of our utility companies
|
Black Hills Power
|
Black Hills Power, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation (doing business as Black Hills Energy)
|
Black Hills Utility Holdings
|
Black Hills Utility Holdings, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation (doing business as Black Hills Energy)
|
Black Hills Wyoming
|
Black Hills Wyoming, LLC, a direct, wholly-owned subsidiary of Black Hills Electric Generation
|
Busch Ranch
|
Busch Ranch Wind Farm is a 29 MW wind farm near Pueblo, Colorado, jointly owned by Colorado Electric and AltaGas. Colorado Electric has a 50% ownership interest in the wind farm.
|
Busch Ranch II
|
Busch Ranch II wind project will be a 60 MW wind farm near Pueblo, Colorado, built by Black Hills Electric Generation to provide wind energy to Colorado Electric through a 25-year power purchase agreement.
|
CAPP
|
Customer Appliance Protection Plan
|
Cheyenne Light
|
Cheyenne Light, Fuel and Power Company, a direct, wholly-owned subsidiary of Black Hills Corporation (doing business as Black Hills Energy)
|
Choice Gas Program
|
The unbundling of the natural gas service from the distribution component, which opens up the gas supply for competition allowing customers to choose from different natural gas suppliers. Black Hills Gas Distribution distributes the gas and Black Hills Energy Services is one of the Choice Gas suppliers.
|
CIAC
|
Contribution In Aid of Construction
|
City of Gillette
|
Gillette, Wyoming
|
Colorado Electric
|
Black Hills Colorado Electric, Inc., an indirect, wholly-owned subsidiary of Black Hills Utility Holdings (doing business as Black Hills Energy)
|
Colorado IPP
|
Black Hills Colorado IPP, LLC a 50.1% owned subsidiary of Black Hills Electric Generation
|
Consolidated Indebtedness to Capitalization Ratio
|
Any Indebtedness outstanding at such time, divided by Capital at such time. Capital being Consolidated Net-Worth (excluding noncontrolling interest and including the aggregate outstanding amount of RSNs) plus Consolidated Indebtedness (including letters of credit, certain guarantees issued and excluding RSNs) as defined within the current Credit Agreement.
|
CDD
|
A cooling degree day is equivalent to each degree that the average of the high and low temperature for a day is above 65 degrees. The warmer the climate, the greater the number of cooling degree days. Cooling degree days are used in the utility industry to measure the relative warmth of weather and to compare relative temperatures between one geographic area and another. Normal degree days are based on the National Weather Service data for selected locations over a 30-year average.
|
CPCN
|
Certificate of Public Convenience and Necessity
|
CP Program
|
Commercial Paper Program
|
CPUC
|
Colorado Public Utilities Commission
|
CVA
|
Credit Valuation Adjustment
|
Dodd-Frank
|
Dodd-Frank Wall Street Reform and Consumer Protection Act
|
Dth
|
Dekatherm. A unit of energy equal to 10 therms or one million British thermal units (MMBtu)
|
Equity Unit
|
Each Equity Unit has a stated amount of $50, consisting of a purchase contract issued by BHC to purchase shares of BHC common stock and a 1/20, or 5% undivided beneficial ownership interest in $1,000 principal amount of BHC RSNs that were formerly due 2028 prior to the successful remarketing on August 17, 2018.
|
FASB
|
Financial Accounting Standards Board
|
FERC
|
United States Federal Energy Regulatory Commission
|
Fitch
|
Fitch Ratings
|
GAAP
|
Accounting principles generally accepted in the United States of America
|
HDD
|
A heating degree day is equivalent to each degree that the average of the high and the low temperatures for a day is below 65 degrees. The colder the climate, the greater the number of heating degree days. Heating degree days are used in the utility industry to measure the relative coldness of weather and to compare relative temperatures between one geographic area and another. Normal degree days are based on the National Weather Service data for selected locations over a 30-year average.
|
Horizon Point
|
Corporate headquarters building in Rapid City, South Dakota, which was completed in 2017.
|
IPP
|
Independent power producer
|
IRS
|
United States Internal Revenue Service
|
Kansas Gas
|
Black Hills Kansas Gas Utility Company, LLC, a direct, wholly-owned subsidiary of Black Hills Utility Holdings (doing business as Black Hills Energy)
|
LIBOR
|
London Interbank Offered Rate
|
MMBtu
|
Million British thermal units
|
Moody’s
|
Moody’s Investors Service, Inc.
|
MWh
|
Megawatt-hours
|
Nebraska Gas
|
Black Hills Nebraska Gas Utility Company, LLC, a direct, wholly-owned subsidiary of Black Hills Utility Holdings (doing business as Black Hills Energy)
|
OCA
|
Office of Consumer Advocate
|
Peak View Wind Project
|
$109 million 60 MW wind generating project for Colorado Electric, adjacent to Busch Ranch wind farm
|
PCA
|
Power Cost Adjustment
|
PPA
|
Power Purchase Agreement
|
Revolving Credit Facility
|
Our $750 million credit facility used to fund working capital needs, letters of credit and other corporate purposes, which was amended and restated on July 30, 2018 and now terminates on July 30, 2023.
|
RMNG
|
Rocky Mountain Natural Gas, a regulated gas utility acquired in the SourceGas Acquisition that provides regulated transmission and wholesale natural gas service to Black Hills Gas in western Colorado (doing business as Black Hills Energy)
|
RSNs
|
Remarketable junior subordinated notes, issued on November 23, 2015
|
SEC
|
U. S. Securities and Exchange Commission
|
SourceGas
|
SourceGas Holdings LLC and its subsidiaries, a gas utility owned by funds managed by Alinda Capital Partners and GE Energy Financial Services, a unit of General Electric Co. (NYSE:GE) that was acquired on February 12, 2016, and is now named Black Hills Gas Holdings, LLC (doing business as Black Hills Energy)
|
SourceGas Acquisition
|
The acquisition of SourceGas Holdings, LLC by Black Hills Utility Holdings
|
S&P
|
Standard and Poor’s, a division of The McGraw-Hill Companies, Inc.
|
South Dakota Electric
|
Includes Black Hills Power operations in South Dakota, Wyoming and Montana
|
SSIR
|
System Safety and Integrity Rider
|
TCJA
|
Tax Cuts and Jobs Act enacted on December 22, 2017
|
Tech Services
|
Non-regulated product lines within Black Hills Corporation that 1) provide electrical system construction services to large industrial customers of our electric utilities, and 2) serve gas transportation customers throughout its service territory by constructing and maintaining customer-owner gas infrastructure facilities, typically through one-time contracts.
|
WPSC
|
Wyoming Public Service Commission
|
Wyodak Plant
|
Wyodak, a 362 MW mine-mouth coal-fired plant in Gillette, Wyoming, owned 80% by Pacificorp and 20% by Black Hills Energy South Dakota. Our WRDC mine supplies all of the fuel for the plant.
|
Wyoming Electric
|
Includes Cheyenne Light’s electric utility operations
|
(unaudited)
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||
|
(in thousands, except per share amounts)
|
|||||||||||
|
|
|
|
|
||||||||
Revenue
|
$
|
321,979
|
|
$
|
335,611
|
|
$
|
1,253,072
|
|
$
|
1,224,968
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
||||||||
Fuel, purchased power and cost of natural gas sold
|
80,244
|
|
86,281
|
|
432,544
|
|
404,222
|
|
||||
Operations and maintenance
|
115,477
|
|
109,258
|
|
350,099
|
|
335,707
|
|
||||
Depreciation, depletion and amortization
|
49,046
|
|
47,109
|
|
146,345
|
|
140,636
|
|
||||
Taxes - property, production and severance
|
11,905
|
|
12,408
|
|
39,181
|
|
38,866
|
|
||||
Other operating expenses
|
222
|
|
996
|
|
1,993
|
|
5,996
|
|
||||
Total operating expenses
|
256,894
|
|
256,052
|
|
970,162
|
|
925,427
|
|
||||
|
|
|
|
|
||||||||
Operating income
|
65,085
|
|
79,559
|
|
282,910
|
|
299,541
|
|
||||
|
|
|
|
|
||||||||
Other income (expense):
|
|
|
|
|
||||||||
Interest charges -
|
|
|
|
|
||||||||
Interest expense incurred (including amortization of debt issuance costs, premiums and discounts)
|
(36,480
|
)
|
(35,287
|
)
|
(107,360
|
)
|
(105,417
|
)
|
||||
Allowance for funds used during construction - borrowed
|
701
|
|
753
|
|
1,345
|
|
2,061
|
|
||||
Capitalized interest
|
100
|
|
64
|
|
177
|
|
197
|
|
||||
Interest income
|
382
|
|
402
|
|
1,012
|
|
700
|
|
||||
Allowance for funds used during construction - equity
|
193
|
|
696
|
|
503
|
|
1,982
|
|
||||
Other income (expense), net
|
(703
|
)
|
189
|
|
(2,426
|
)
|
(6
|
)
|
||||
Total other income (expense), net
|
(35,807
|
)
|
(33,183
|
)
|
(106,749
|
)
|
(100,483
|
)
|
||||
|
|
|
|
|
||||||||
Income before income taxes
|
29,278
|
|
46,376
|
|
176,161
|
|
199,058
|
|
||||
Income tax benefit (expense)
|
(7,477
|
)
|
(13,478
|
)
|
11,784
|
|
(58,518
|
)
|
||||
Income from continuing operations
|
21,801
|
|
32,898
|
|
187,945
|
|
140,540
|
|
||||
(Loss) from discontinued operations, net of tax
|
(857
|
)
|
(1,300
|
)
|
(5,627
|
)
|
(3,485
|
)
|
||||
Net income
|
20,944
|
|
31,598
|
|
182,318
|
|
137,055
|
|
||||
Net income attributable to noncontrolling interest
|
(3,994
|
)
|
(3,935
|
)
|
(10,447
|
)
|
(10,674
|
)
|
||||
Net income available for common stock
|
$
|
16,950
|
|
$
|
27,663
|
|
$
|
171,871
|
|
$
|
126,381
|
|
|
|
|
|
|
||||||||
Amounts attributable to common shareholders:
|
|
|
|
|
||||||||
Net income from continuing operations
|
$
|
17,807
|
|
$
|
28,963
|
|
$
|
177,498
|
|
$
|
129,866
|
|
Net (loss) from discontinued operations
|
(857
|
)
|
(1,300
|
)
|
(5,627
|
)
|
(3,485
|
)
|
||||
Net income available for common stock
|
$
|
16,950
|
|
$
|
27,663
|
|
$
|
171,871
|
|
$
|
126,381
|
|
|
|
|
|
|
||||||||
Earnings per share of common stock:
|
|
|
|
|
||||||||
Earnings (loss) per share, Basic -
|
|
|
|
|
||||||||
Income from continuing operations, per share
|
$
|
0.33
|
|
$
|
0.54
|
|
$
|
3.33
|
|
$
|
2.44
|
|
(Loss) from discontinued operations, per share
|
(0.02
|
)
|
(0.02
|
)
|
(0.10
|
)
|
(0.06
|
)
|
||||
Earnings per share, Basic
(a)
|
$
|
0.32
|
|
$
|
0.52
|
|
$
|
3.22
|
|
$
|
2.38
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share, Diluted -
|
|
|
|
|
||||||||
Income from continuing operations, per share
|
$
|
0.32
|
|
$
|
0.52
|
|
$
|
3.26
|
|
$
|
2.35
|
|
(Loss) from discontinued operations, per share
|
(0.02
|
)
|
(0.02
|
)
|
(0.10
|
)
|
(0.06
|
)
|
||||
Earnings per share, Diluted
(a)
|
$
|
0.31
|
|
$
|
0.50
|
|
$
|
3.15
|
|
$
|
2.29
|
|
Weighted average common shares outstanding:
|
|
|
|
|
||||||||
Basic
|
53,364
|
|
53,243
|
|
53,346
|
|
53,208
|
|
||||
Diluted
|
54,819
|
|
55,432
|
|
54,508
|
|
55,254
|
|
||||
|
|
|
|
|
||||||||
Dividends declared per share of common stock
|
$
|
0.475
|
|
$
|
0.445
|
|
$
|
1.425
|
|
$
|
1.335
|
|
(unaudited)
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||
|
(in thousands)
|
|||||||||||
|
|
|
|
|
||||||||
Net income
|
$
|
20,944
|
|
$
|
31,598
|
|
$
|
182,318
|
|
$
|
137,055
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
||||||||
Reclassification adjustments of benefit plan liability - prior service cost (net of tax (expense) benefit of $10 and $17 for the three months ended September 30, 2018 and 2017 and $29 and $52 for the nine months ended September 30, 2018 and 2017, respectively)
|
(34
|
)
|
(32
|
)
|
(104
|
)
|
(94
|
)
|
||||
Reclassification adjustments of benefit plan liability - net gain (loss) (net of tax (expense) benefit of $(138) and $(145) for the three months ended September 30, 2018 and 2017 and $(409) and $(445) for the nine months ended September 30, 2018 and 2017, respectively)
|
483
|
|
269
|
|
1,456
|
|
797
|
|
||||
Derivative instruments designated as cash flow hedges:
|
|
|
|
|
||||||||
Reclassification of net realized (gains) losses on settled/amortized interest rate swaps (net of tax (expense) benefit of $(152) and $(249) for the three months ended September 30, 2018 and 2017 and $(456) and $(779) for the nine months ended September 30, 2018 and 2017, respectively)
|
560
|
|
464
|
|
1,682
|
|
1,449
|
|
||||
Net unrealized gains (losses) on commodity derivatives (net of tax (expense) benefit of $0 and $94 for the three months ended September 30, 2018 and 2017 and $51 and $(442) for the nine months ended September 30, 2018 and 2017, respectively)
|
30
|
|
(160
|
)
|
(168
|
)
|
755
|
|
||||
Reclassification of net realized (gains) losses on settled commodity derivatives (net of tax (expense) benefit of $3 and $95 for the three months ended September 30, 2018 and 2017 and $(187) and $344 for the nine months ended September 30, 2018 and 2017, respectively)
|
21
|
|
(166
|
)
|
615
|
|
(590
|
)
|
||||
Other comprehensive income, net of tax
|
1,060
|
|
375
|
|
3,481
|
|
2,317
|
|
||||
|
|
|
|
|
||||||||
Comprehensive income
|
22,004
|
|
31,973
|
|
185,799
|
|
139,372
|
|
||||
Less: comprehensive income attributable to noncontrolling interest
|
(3,994
|
)
|
(3,935
|
)
|
(10,447
|
)
|
(10,674
|
)
|
||||
Comprehensive income available for common stock
|
$
|
18,010
|
|
$
|
28,038
|
|
$
|
175,352
|
|
$
|
128,698
|
|
(unaudited)
|
As of
|
||||||||||
|
September 30,
2018 |
|
December 31, 2017
|
|
September 30,
2017 |
||||||
|
(in thousands)
|
||||||||||
ASSETS
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
10,001
|
|
|
$
|
15,420
|
|
|
$
|
13,449
|
|
Restricted cash
|
3,241
|
|
|
2,820
|
|
|
2,683
|
|
|||
Accounts receivable, net
|
152,796
|
|
|
248,330
|
|
|
150,325
|
|
|||
Materials, supplies and fuel
|
122,618
|
|
|
113,283
|
|
|
122,866
|
|
|||
Derivative assets, current
|
1,392
|
|
|
304
|
|
|
433
|
|
|||
Income tax receivable, net
|
11,025
|
|
|
—
|
|
|
—
|
|
|||
Regulatory assets, current
|
48,302
|
|
|
81,016
|
|
|
61,023
|
|
|||
Other current assets
|
32,691
|
|
|
25,367
|
|
|
25,586
|
|
|||
Current assets held for sale
|
2,854
|
|
|
84,242
|
|
|
8,653
|
|
|||
Total current assets
|
384,920
|
|
|
570,782
|
|
|
385,018
|
|
|||
|
|
|
|
|
|
||||||
Investments
|
41,202
|
|
|
13,090
|
|
|
12,947
|
|
|||
|
|
|
|
|
|
||||||
Property, plant and equipment
|
5,819,000
|
|
|
5,567,518
|
|
|
5,499,557
|
|
|||
Less: accumulated depreciation and depletion
|
(1,118,783
|
)
|
|
(1,026,088
|
)
|
|
(1,000,875
|
)
|
|||
Total property, plant and equipment, net
|
4,700,217
|
|
|
4,541,430
|
|
|
4,498,682
|
|
|||
|
|
|
|
|
|
||||||
Other assets:
|
|
|
|
|
|
||||||
Goodwill
|
1,299,454
|
|
|
1,299,454
|
|
|
1,299,454
|
|
|||
Intangible assets, net
|
6,954
|
|
|
7,559
|
|
|
7,765
|
|
|||
Regulatory assets, non-current
|
212,048
|
|
|
216,438
|
|
|
239,571
|
|
|||
Other assets, non-current
|
17,143
|
|
|
10,149
|
|
|
11,626
|
|
|||
Noncurrent assets held for sale
|
—
|
|
|
—
|
|
|
108,685
|
|
|||
Total other assets, non-current
|
1,535,599
|
|
|
1,533,600
|
|
|
1,667,101
|
|
|||
|
|
|
|
|
|
||||||
TOTAL ASSETS
|
$
|
6,661,938
|
|
|
$
|
6,658,902
|
|
|
$
|
6,563,748
|
|
(unaudited)
|
As of
|
||||||||||
|
September 30,
2018 |
|
December 31, 2017
|
|
September 30,
2017 |
||||||
|
(in thousands, except share amounts)
|
||||||||||
LIABILITIES AND TOTAL EQUITY
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
115,900
|
|
|
$
|
160,887
|
|
|
$
|
94,790
|
|
Accrued liabilities
|
201,353
|
|
|
219,462
|
|
|
206,779
|
|
|||
Derivative liabilities, current
|
1,154
|
|
|
2,081
|
|
|
1,458
|
|
|||
Accrued income taxes, net
|
—
|
|
|
1,022
|
|
|
5,587
|
|
|||
Regulatory liabilities, current
|
41,442
|
|
|
6,832
|
|
|
7,042
|
|
|||
Notes payable
|
112,100
|
|
|
211,300
|
|
|
225,170
|
|
|||
Current maturities of long-term debt
|
255,743
|
|
|
5,743
|
|
|
5,743
|
|
|||
Current liabilities held for sale
|
2,538
|
|
|
41,774
|
|
|
7,701
|
|
|||
Total current liabilities
|
730,230
|
|
|
649,101
|
|
|
554,270
|
|
|||
|
|
|
|
|
|
||||||
Long-term debt
|
2,951,389
|
|
|
3,109,400
|
|
|
3,109,864
|
|
|||
|
|
|
|
|
|
||||||
Deferred credits and other liabilities:
|
|
|
|
|
|
||||||
Deferred income tax liabilities, net
|
292,753
|
|
|
336,520
|
|
|
618,315
|
|
|||
Regulatory liabilities, non-current
|
508,846
|
|
|
478,294
|
|
|
198,189
|
|
|||
Benefit plan liabilities
|
151,613
|
|
|
159,646
|
|
|
149,803
|
|
|||
Other deferred credits and other liabilities
|
105,928
|
|
|
105,735
|
|
|
113,996
|
|
|||
Non-current liabilities held for sale
|
—
|
|
|
—
|
|
|
23,329
|
|
|||
Total deferred credits and other liabilities
|
1,059,140
|
|
|
1,080,195
|
|
|
1,103,632
|
|
|||
|
|
|
|
|
|
||||||
Commitments and contingencies (See Notes 9, 11, 16, 17)
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
||||||
Equity:
|
|
|
|
|
|
||||||
Stockholders’ equity —
|
|
|
|
|
|
||||||
Common stock $1 par value; 100,000,000 shares authorized; issued 53,661,863; 53,579,986; and 53,524,529 shares, respectively
|
53,662
|
|
|
53,580
|
|
|
53,525
|
|
|||
Additional paid-in capital
|
1,157,214
|
|
|
1,150,285
|
|
|
1,147,922
|
|
|||
Retained earnings
|
644,154
|
|
|
548,617
|
|
|
516,371
|
|
|||
Treasury stock, at cost – 72,915; 39,064; and 41,457 shares, respectively
|
(4,072
|
)
|
|
(2,306
|
)
|
|
(2,448
|
)
|
|||
Accumulated other comprehensive income (loss)
|
(37,703
|
)
|
|
(41,202
|
)
|
|
(32,566
|
)
|
|||
Total stockholders’ equity
|
1,813,255
|
|
|
1,708,974
|
|
|
1,682,804
|
|
|||
Noncontrolling interest
|
107,924
|
|
|
111,232
|
|
|
113,178
|
|
|||
Total equity
|
1,921,179
|
|
|
1,820,206
|
|
|
1,795,982
|
|
|||
|
|
|
|
|
|
||||||
TOTAL LIABILITIES AND TOTAL EQUITY
|
$
|
6,661,938
|
|
|
$
|
6,658,902
|
|
|
$
|
6,563,748
|
|
(unaudited)
|
Nine Months Ended September 30,
|
|||||
|
2018
|
2017
|
||||
Operating activities:
|
(in thousands)
|
|||||
Net income
|
$
|
182,318
|
|
$
|
137,055
|
|
Loss from discontinued operations, net of tax
|
5,627
|
|
3,485
|
|
||
Income from continuing operations
|
187,945
|
|
140,540
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
||||
Depreciation, depletion and amortization
|
146,345
|
|
140,636
|
|
||
Deferred financing cost amortization
|
5,682
|
|
6,212
|
|
||
Stock compensation
|
7,544
|
|
7,594
|
|
||
Deferred income taxes
|
(14,396
|
)
|
65,536
|
|
||
Employee benefit plans
|
10,641
|
|
8,470
|
|
||
Other adjustments, net
|
7,668
|
|
(3,549
|
)
|
||
Changes in certain operating assets and liabilities:
|
|
|
||||
Materials, supplies and fuel
|
(8,380
|
)
|
(19,511
|
)
|
||
Accounts receivable, unbilled revenues and other operating assets
|
72,061
|
|
103,963
|
|
||
Accounts payable and other operating liabilities
|
(86,604
|
)
|
(112,288
|
)
|
||
Regulatory assets - current
|
41,655
|
|
1,287
|
|
||
Regulatory liabilities - current
|
21,416
|
|
(4,328
|
)
|
||
Contributions to defined benefit pension plans
|
(12,700
|
)
|
(27,700
|
)
|
||
Other operating activities, net
|
2,007
|
|
(1,410
|
)
|
||
Net cash provided by operating activities of continuing operations
|
380,884
|
|
305,452
|
|
||
Net cash provided by (used in) operating activities of discontinued operations
|
(2,162
|
)
|
13,978
|
|
||
Net cash provided by operating activities
|
378,722
|
|
319,430
|
|
||
|
|
|
||||
Investing activities:
|
|
|
||||
Property, plant and equipment additions
|
(278,132
|
)
|
(238,840
|
)
|
||
Purchase of investment
|
(24,429
|
)
|
—
|
|
||
Other investing activities
|
2,766
|
|
160
|
|
||
Net cash provided by (used in) investing activities of continuing operations
|
(299,795
|
)
|
(238,680
|
)
|
||
Net cash provided by (used in) investing activities of discontinued operations
|
18,024
|
|
(17,298
|
)
|
||
Net cash provided by (used in) investing activities
|
(281,771
|
)
|
(255,978
|
)
|
||
|
|
|
||||
Financing activities:
|
|
|
||||
Dividends paid on common stock
|
(76,309
|
)
|
(71,334
|
)
|
||
Common stock issued
|
1,079
|
|
3,562
|
|
||
Net (payments) borrowings of short-term debt
|
(99,200
|
)
|
128,570
|
|
||
Long-term debt - issuances
|
700,000
|
|
—
|
|
||
Long-term debt - repayments
|
(603,307
|
)
|
(104,307
|
)
|
||
Distributions to noncontrolling interest
|
(13,755
|
)
|
(12,884
|
)
|
||
Other financing activities
|
(10,457
|
)
|
(6,719
|
)
|
||
Net cash provided by (used in) financing activities
|
(101,949
|
)
|
(63,112
|
)
|
||
Net change in cash, cash equivalents and restricted cash
|
(4,998
|
)
|
340
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
18,240
|
|
15,792
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
13,242
|
|
$
|
16,132
|
|
•
|
Regulated natural gas and electric utility services tariffs
- Our utilities have regulated operations, as defined by ASC 980, that provide services to regulated customers under rates, charges, terms and conditions of service, and prices determined by the jurisdictional regulators designated for our service territories. Collectively, these rates, charges, terms and conditions are included in a tariff, which governs all aspects of the provision of our regulated services. Our regulated services primarily encompass single performance obligations material to the context of the contract for delivery of either commodity natural gas, commodity electricity, natural gas transportation or electric transmission services. These service revenues are variable based on quantities delivered, influenced by seasonal business and weather patterns. Tariffs are only permitted to be changed through a rate-setting process involving the regulator-empowered statute to establish contractual rates between the utility and its customers. All of our utilities’ regulated sales are subject to regulatory-approved tariffs.
|
•
|
Power sales agreements
- Our electric utilities and power generation segments have long-term wholesale power sales agreements with other load-serving entities, including affiliates, for the sale of excess power from owned generating units. These agreements include a combination of “take or pay” arrangements, where the customer is obligated to pay for the energy regardless of whether it actually takes delivery, as well as “requirements only” arrangements, where the customer is only obligated to pay for the energy the customer needs. In addition to these long-term contracts, Black Hills also sells excess energy to other load-serving entities on a short-term basis as a member of the Western States Power Pool. The pricing for all of these arrangements is included in the executed contracts or confirmations, reflecting the standalone selling price and is variable based on energy delivered.
|
•
|
Coal supply agreements
- Our mining segment sells coal primarily under long-term contracts to utilities for use at their power generating plants, including affiliate electric utilities, and an affiliate non-regulated power generation entity. The contracts include a single promise to supply coal necessary to fuel the customers’ facilities during the contract term. The transaction price is established in the coal supply agreements, including cost-based agreements with the affiliated regulated utilities, and is variable based on tons of coal delivered.
|
•
|
Other non-regulated services
- Our natural gas and electric utility segments also provide non-regulated services primarily comprised of appliance repair service and protection plans, electric and natural gas technical infrastructure construction and maintenance services, and in Nebraska and Wyoming, an unbundled natural gas commodity offering under the regulatory-approved Choice Gas Program. Revenue contracts for these services generally represent a single performance obligation with the price reflecting the standalone selling price stated in the agreement, and the revenue is variable based on the units delivered or services provided.
|
Three Months Ended September 30, 2018
|
Electric Utilities
|
Gas Utilities
|
Power Generation
|
Mining
|
Inter-company Revenues
|
Total
|
||||||||||||
Customer types:
|
(in thousands)
|
|||||||||||||||||
Retail
|
$
|
157,049
|
|
$
|
88,559
|
|
$
|
—
|
|
$
|
16,751
|
|
$
|
(7,941
|
)
|
$
|
254,418
|
|
Transportation
|
—
|
|
30,079
|
|
—
|
|
—
|
|
(267
|
)
|
29,812
|
|
||||||
Wholesale
|
8,255
|
|
—
|
|
14,485
|
|
—
|
|
(13,047
|
)
|
9,693
|
|
||||||
Market - off-system sales
|
9,059
|
|
140
|
|
—
|
|
—
|
|
(1,349
|
)
|
7,850
|
|
||||||
Transmission/Other
|
10,196
|
|
11,887
|
|
—
|
|
—
|
|
(3,693
|
)
|
18,390
|
|
||||||
Revenue from contracts with customers
|
184,559
|
|
130,665
|
|
14,485
|
|
16,751
|
|
(26,297
|
)
|
320,163
|
|
||||||
Other revenues
|
231
|
|
1,011
|
|
9,118
|
|
550
|
|
(9,094
|
)
|
1,816
|
|
||||||
Total revenues
|
$
|
184,790
|
|
$
|
131,676
|
|
$
|
23,603
|
|
$
|
17,301
|
|
$
|
(35,391
|
)
|
$
|
321,979
|
|
|
|
|
|
|
|
|
||||||||||||
Timing of revenue recognition:
|
|
|
|
|
|
|
||||||||||||
Services transferred at a point in time
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
16,751
|
|
$
|
(7,941
|
)
|
$
|
8,810
|
|
Services transferred over time
|
184,559
|
|
130,665
|
|
14,485
|
|
—
|
|
(18,356
|
)
|
311,353
|
|
||||||
Revenue from contracts with customers
|
$
|
184,559
|
|
$
|
130,665
|
|
$
|
14,485
|
|
$
|
16,751
|
|
$
|
(26,297
|
)
|
$
|
320,163
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2018
|
Electric Utilities
|
Gas Utilities
|
Power Generation
|
Mining
|
Inter-company Revenues
|
Total
|
||||||||||||
Customer types:
|
(in thousands)
|
|||||||||||||||||
Retail
|
$
|
449,482
|
|
$
|
565,816
|
|
$
|
—
|
|
$
|
49,653
|
|
$
|
(23,761
|
)
|
$
|
1,041,190
|
|
Transportation
|
—
|
|
100,760
|
|
—
|
|
—
|
|
(977
|
)
|
99,783
|
|
||||||
Wholesale
|
25,497
|
|
—
|
|
41,161
|
|
—
|
|
(36,874
|
)
|
29,784
|
|
||||||
Market - off-system sales
|
18,142
|
|
728
|
|
—
|
|
—
|
|
(5,531
|
)
|
13,339
|
|
||||||
Transmission/Other
|
36,622
|
|
36,230
|
|
—
|
|
—
|
|
(10,967
|
)
|
61,885
|
|
||||||
Revenue from contracts with customers
|
529,743
|
|
703,534
|
|
41,161
|
|
49,653
|
|
(78,110
|
)
|
1,245,981
|
|
||||||
Other revenues
|
2,218
|
|
3,106
|
|
27,429
|
|
1,675
|
|
(27,337
|
)
|
7,091
|
|
||||||
Total revenues
|
$
|
531,961
|
|
$
|
706,640
|
|
$
|
68,590
|
|
$
|
51,328
|
|
$
|
(105,447
|
)
|
$
|
1,253,072
|
|
|
|
|
|
|
|
|
||||||||||||
Timing of revenue recognition:
|
|
|
|
|
|
|
||||||||||||
Services transferred at a point in time
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
49,653
|
|
$
|
(23,761
|
)
|
$
|
25,892
|
|
Services transferred over time
|
529,743
|
|
703,534
|
|
41,161
|
|
—
|
|
(54,349
|
)
|
1,220,089
|
|
||||||
Revenue from contracts with customers
|
$
|
529,743
|
|
$
|
703,534
|
|
$
|
41,161
|
|
$
|
49,653
|
|
$
|
(78,110
|
)
|
$
|
1,245,981
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2018
|
External Operating Revenue
|
|
Inter-company Operating Revenue
|
|
Total Revenues
|
|
Net income (loss) from continuing operations
|
||||||||||||||
Contract Customers
|
Other Revenues
|
Contract Customers
|
Other Revenues
|
||||||||||||||||||
Segment:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Electric Utilities
|
$
|
179,527
|
|
$
|
231
|
|
|
$
|
5,032
|
|
$
|
—
|
|
|
$
|
184,790
|
|
|
$
|
21,578
|
|
Gas Utilities
|
130,390
|
|
1,011
|
|
|
275
|
|
—
|
|
|
131,676
|
|
|
(13,277
|
)
|
||||||
Power Generation
(b)
|
1,437
|
|
348
|
|
|
13,048
|
|
8,770
|
|
|
23,603
|
|
|
6,691
|
|
||||||
Mining
|
8,809
|
|
226
|
|
|
7,942
|
|
324
|
|
|
17,301
|
|
|
3,572
|
|
||||||
Corporate and Other
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(757
|
)
|
||||||
Inter-company eliminations
|
—
|
|
—
|
|
|
(26,297
|
)
|
(9,094
|
)
|
|
(35,391
|
)
|
|
—
|
|
||||||
Total
|
$
|
320,163
|
|
$
|
1,816
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
321,979
|
|
|
$
|
17,807
|
|
Three Months Ended September 30, 2017
|
External Operating Revenue
|
|
Inter-company Operating Revenue
|
|
Net income (loss) from continuing operations
|
|||||||
Segment:
|
|
|
|
|
|
|||||||
Electric Utilities
|
$
|
181,238
|
|
|
$
|
2,333
|
|
|
$
|
27,324
|
|
|
Gas Utilities
|
142,821
|
|
|
73
|
|
|
(4,329
|
)
|
||||
Power Generation
(b)
|
1,810
|
|
|
21,117
|
|
|
6,155
|
|
||||
Mining
|
9,742
|
|
|
7,751
|
|
|
3,477
|
|
||||
Corporate and Other
|
—
|
|
|
—
|
|
|
(3,664
|
)
|
||||
Inter-company eliminations
|
—
|
|
|
(31,274
|
)
|
|
—
|
|
||||
Total
|
$
|
335,611
|
|
|
$
|
—
|
|
|
$
|
28,963
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nine Months Ended September 30, 2018
|
External Operating
Revenue
|
|
Inter-company Operating Revenue
|
|
Total Revenues
|
|
Net income (loss) from continuing operations
|
||||||||||||||
Contract Customers
|
Other Revenues
|
Contract Customers
|
Other Revenues
|
||||||||||||||||||
Segment:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Electric Utilities
|
$
|
513,270
|
|
$
|
2,218
|
|
|
$
|
16,473
|
|
$
|
—
|
|
|
$
|
531,961
|
|
|
$
|
63,313
|
|
Gas Utilities
(a)
|
702,532
|
|
3,106
|
|
|
1,002
|
|
—
|
|
|
706,640
|
|
|
93,182
|
|
||||||
Power Generation
(b)
|
4,287
|
|
1,066
|
|
|
36,874
|
|
26,363
|
|
|
68,590
|
|
|
17,319
|
|
||||||
Mining
|
25,892
|
|
701
|
|
|
23,761
|
|
974
|
|
|
51,328
|
|
|
9,561
|
|
||||||
Corporate and Other
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(5,877
|
)
|
||||||
Inter-company eliminations
|
—
|
|
—
|
|
|
(78,110
|
)
|
(27,337
|
)
|
|
(105,447
|
)
|
|
—
|
|
||||||
Total
|
$
|
1,245,981
|
|
$
|
7,091
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
1,253,072
|
|
|
$
|
177,498
|
|
|
|
|
|
|
|
|||||||
Nine Months Ended September 30, 2017
|
External Operating Revenue
|
|
Inter-company
Operating
Revenue
|
|
Net income (loss) from continuing operations
|
|||||||
Segment:
|
|
|
|
|
|
|||||||
Electric Utilities
|
$
|
518,925
|
|
|
$
|
9,123
|
|
|
$
|
68,386
|
|
|
Gas Utilities
|
674,161
|
|
|
90
|
|
|
41,409
|
|
||||
Power Generation
(b)
|
5,382
|
|
|
62,907
|
|
|
18,017
|
|
||||
Mining
|
26,500
|
|
|
22,485
|
|
|
9,048
|
|
||||
Corporate and Other
(c)
|
—
|
|
|
—
|
|
|
(6,994
|
)
|
||||
Inter-company eliminations
|
—
|
|
|
(94,605
|
)
|
|
—
|
|
||||
Total
|
$
|
1,224,968
|
|
|
$
|
—
|
|
|
$
|
129,866
|
|
(a)
|
Net income from continuing operations available for common stock for the
nine
months ended
September 30, 2018
included a
$49 million
tax benefit resulting from
legal entity restructuring. See Note 19 Income Taxes of the Notes to Condensed Consolidated Financial Statements for more information.
|
(b)
|
Net income from continuing operations available for common stock for the
three
and
nine
months ended
September 30, 2018
and
September 30, 2017
reflects net income attributable to noncontrolling interests of
$4.0 million
and
$10.4 million
, and
$3.9 million
and
$10.6 million
, respectively.
|
(c)
|
Net income (loss) from continuing operations available for common stock for the
nine
months ended
September 30, 2017
included a
$1.4 million
tax benefit recognized from carryback claims for specified liability losses involving prior tax years.
|
Total Assets (net of inter-company eliminations) as of:
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
||||||
Segment:
|
|
|
|
|
|
||||||
Electric Utilities
(a)
|
$
|
2,853,414
|
|
|
$
|
2,906,275
|
|
|
$
|
2,911,919
|
|
Gas Utilities
|
3,433,316
|
|
|
3,426,466
|
|
|
3,288,104
|
|
|||
Power Generation
(a)
|
122,428
|
|
|
60,852
|
|
|
64,357
|
|
|||
Mining
|
72,602
|
|
|
65,455
|
|
|
66,700
|
|
|||
Corporate and Other
|
177,324
|
|
|
115,612
|
|
|
115,330
|
|
|||
Discontinued operations
|
2,854
|
|
|
84,242
|
|
|
117,338
|
|
|||
Total assets
|
$
|
6,661,938
|
|
|
$
|
6,658,902
|
|
|
$
|
6,563,748
|
|
(a)
|
The PPA under which Black Hills Colorado IPP provides generation to support Colorado Electric customers from the Pueblo Airport Generation Station is accounted for as a capital lease. As such, assets owned by our Power Generation segment are recorded at Colorado Electric as a capital lease.
|
|
Accounts
|
Unbilled
|
Less Allowance for
|
Accounts
|
||||||||
September 30, 2018
|
Receivable, Trade
|
Revenue
|
Doubtful Accounts
|
Receivable, net
|
||||||||
Electric Utilities
|
$
|
43,108
|
|
$
|
31,381
|
|
$
|
(386
|
)
|
$
|
74,103
|
|
Gas Utilities
|
48,638
|
|
24,768
|
|
(2,188
|
)
|
71,218
|
|
||||
Power Generation
|
1,696
|
|
—
|
|
—
|
|
1,696
|
|
||||
Mining
|
3,749
|
|
—
|
|
—
|
|
3,749
|
|
||||
Corporate
|
2,030
|
|
—
|
|
—
|
|
2,030
|
|
||||
Total
|
$
|
99,221
|
|
$
|
56,149
|
|
$
|
(2,574
|
)
|
$
|
152,796
|
|
|
Accounts
|
Unbilled
|
Less Allowance for
|
Accounts
|
||||||||
December 31, 2017
|
Receivable, Trade
|
Revenue
|
Doubtful Accounts
|
Receivable, net
|
||||||||
Electric Utilities
|
$
|
39,347
|
|
$
|
36,384
|
|
$
|
(586
|
)
|
$
|
75,145
|
|
Gas Utilities
|
81,256
|
|
88,967
|
|
(2,495
|
)
|
167,728
|
|
||||
Power Generation
|
1,196
|
|
—
|
|
—
|
|
1,196
|
|
||||
Mining
|
2,804
|
|
—
|
|
—
|
|
2,804
|
|
||||
Corporate
|
1,457
|
|
—
|
|
—
|
|
1,457
|
|
||||
Total
|
$
|
126,060
|
|
$
|
125,351
|
|
$
|
(3,081
|
)
|
$
|
248,330
|
|
|
Accounts
|
Unbilled
|
Less Allowance for
|
Accounts
|
||||||||
September 30, 2017
|
Receivable, Trade
|
Revenue
|
Doubtful Accounts
|
Receivable, net
|
||||||||
Electric Utilities
|
$
|
42,716
|
|
$
|
29,762
|
|
$
|
(494
|
)
|
$
|
71,984
|
|
Gas Utilities
|
49,842
|
|
24,516
|
|
(1,190
|
)
|
73,168
|
|
||||
Power Generation
|
1,010
|
|
—
|
|
—
|
|
1,010
|
|
||||
Mining
|
3,534
|
|
—
|
|
—
|
|
3,534
|
|
||||
Corporate
|
629
|
|
—
|
|
—
|
|
629
|
|
||||
Total
|
$
|
97,731
|
|
$
|
54,278
|
|
$
|
(1,684
|
)
|
$
|
150,325
|
|
|
September 30, 2018
|
December 31, 2017
|
September 30, 2017
|
||||||
Regulatory assets
|
|
|
|
||||||
Deferred energy and fuel cost adjustments
(a)
|
$
|
29,976
|
|
$
|
20,187
|
|
$
|
20,559
|
|
Deferred gas cost adjustments
(a)
|
720
|
|
31,844
|
|
12,833
|
|
|||
Gas price derivatives
(a)
|
6,192
|
|
11,935
|
|
11,297
|
|
|||
Deferred taxes on AFUDC
(b)
|
7,804
|
|
7,847
|
|
15,645
|
|
|||
Employee benefit plans
(c)
|
106,734
|
|
109,235
|
|
105,671
|
|
|||
Environmental
(a)
|
972
|
|
1,031
|
|
1,051
|
|
|||
Asset retirement obligations
(a)
|
526
|
|
517
|
|
514
|
|
|||
Loss on reacquired debt
(a)
|
21,431
|
|
20,667
|
|
21,067
|
|
|||
Renewable energy standard adjustment
(a)
|
1,131
|
|
1,088
|
|
1,956
|
|
|||
Deferred taxes on flow through accounting
(c) (e)
|
29,342
|
|
26,978
|
|
41,900
|
|
|||
Decommissioning costs
(b)
|
11,052
|
|
13,287
|
|
13,989
|
|
|||
Gas supply contract termination
(a)
|
15,745
|
|
20,001
|
|
21,402
|
|
|||
Other regulatory assets
(a)
|
28,725
|
|
32,837
|
|
32,710
|
|
|||
Total regulatory assets
|
260,350
|
|
297,454
|
|
300,594
|
|
|||
Less current regulatory assets
|
(48,302
|
)
|
(81,016
|
)
|
(61,023
|
)
|
|||
Regulatory assets, non-current
|
$
|
212,048
|
|
$
|
216,438
|
|
$
|
239,571
|
|
|
|
|
|
||||||
Regulatory liabilities
|
|
|
|
||||||
Deferred energy and gas costs
(a)
|
$
|
15,980
|
|
$
|
3,427
|
|
$
|
3,780
|
|
Employee benefit plan costs and related deferred taxes
(c) (e)
|
39,332
|
|
40,629
|
|
66,620
|
|
|||
Cost of removal
(a)
|
146,177
|
|
130,932
|
|
125,360
|
|
|||
Excess deferred income taxes
(c) (d)
|
316,625
|
|
301,553
|
|
52
|
|
|||
TCJA revenue reserve
|
20,592
|
|
—
|
|
—
|
|
|||
Other regulatory liabilities
(c)
|
11,582
|
|
8,585
|
|
9,419
|
|
|||
Total regulatory liabilities
|
550,288
|
|
485,126
|
|
205,231
|
|
|||
Less current regulatory liabilities
|
(41,442
|
)
|
(6,832
|
)
|
(7,042
|
)
|
|||
Regulatory liabilities, non-current
|
$
|
508,846
|
|
$
|
478,294
|
|
$
|
198,189
|
|
(a)
|
Recovery of costs, but we are not allowed a rate of return.
|
(b)
|
In addition to recovery of costs, we are allowed a rate of return.
|
(c)
|
In addition to recovery or repayment of costs, we are allowed a return on a portion of this amount or a reduction in rate base.
|
(d)
|
The increase in the regulatory tax liability is primarily related to the revaluation of deferred income tax balances at the lower income tax rate. As of September 30, 2018 and December 31, 2017, all of the liability was classified as non-current due to uncertainties around the timing and other regulatory decisions that will affect the amount of regulatory tax liability amortized and returned to customers through rate reductions or other revenue offsets.
|
(e)
|
The variance to the prior periods is primarily due to the decrease in federal income tax from 35% to 21% as a result of the TCJA.
|
State
|
Approximate 2018 Benefit for Customers
|
Start Date for Customer Benefits
|
||
Arkansas
|
$
|
9.7
|
million
|
October 2018
|
Colorado
|
$
|
10.8
|
million
|
July 2018
|
Iowa
|
$
|
2.4
|
million
|
June 2018
|
Kansas
|
$
|
1.9
|
million
|
April 2018
|
Nebraska
|
$
|
3.8
|
million
|
July 2018
|
South Dakota
|
$
|
7.7
|
million
|
October 2018
|
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
||||||
Materials and supplies
|
$
|
73,777
|
|
|
$
|
69,732
|
|
|
$
|
70,284
|
|
Fuel - Electric Utilities
|
2,750
|
|
|
2,962
|
|
|
2,993
|
|
|||
Natural gas in storage held for distribution
|
46,091
|
|
|
40,589
|
|
|
49,589
|
|
|||
Total materials, supplies and fuel
|
$
|
122,618
|
|
|
$
|
113,283
|
|
|
$
|
122,866
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
||||||
Cost method investment
|
$
|
28,134
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash surrender value of life insurance contracts
|
13,068
|
|
|
13,090
|
|
|
12,947
|
|
|||
Total investments
|
$
|
41,202
|
|
|
$
|
13,090
|
|
|
$
|
12,947
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
|
|
|
|
|
|
||||||||
Net income available for common stock
|
$
|
16,950
|
|
$
|
27,663
|
|
|
$
|
171,871
|
|
$
|
126,381
|
|
|
|
|
|
|
|
||||||||
Weighted average shares - basic
|
53,364
|
|
53,243
|
|
|
53,346
|
|
53,208
|
|
||||
Dilutive effect of:
|
|
|
|
|
|
||||||||
Equity Units
(a)
|
1,344
|
|
2,015
|
|
|
1,060
|
|
1,872
|
|
||||
Equity compensation
|
111
|
|
174
|
|
|
102
|
|
174
|
|
||||
Weighted average shares - diluted
|
54,819
|
|
55,432
|
|
|
54,508
|
|
55,254
|
|
(a)
|
Calculated using the treasury stock method.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
2017
|
|
2018
|
2017
|
||||
|
|
|
|
|
|
||||
Equity compensation
|
12
|
|
—
|
|
|
15
|
|
—
|
|
Anti-dilutive shares
|
12
|
|
—
|
|
|
15
|
|
—
|
|
|
September 30, 2018
|
December 31, 2017
|
September 30, 2017
|
|||||||||||||||
|
Balance Outstanding
|
Letters of Credit
|
Balance Outstanding
|
Letters of Credit
|
Balance Outstanding
|
Letters of Credit
|
||||||||||||
Revolving Credit Facility
|
$
|
—
|
|
$
|
15,203
|
|
$
|
—
|
|
$
|
26,848
|
|
$
|
—
|
|
$
|
25,391
|
|
CP Program
|
112,100
|
|
—
|
|
211,300
|
|
—
|
|
225,170
|
|
—
|
|
||||||
Total
|
$
|
112,100
|
|
$
|
15,203
|
|
$
|
211,300
|
|
$
|
26,848
|
|
$
|
225,170
|
|
$
|
25,391
|
|
Nine Months Ended September 30, 2018
|
Total Stockholders’ Equity
|
Noncontrolling Interest
|
Total Equity
|
||||||
|
|
(in thousands)
|
|
||||||
Balance at December 31, 2017
|
$
|
1,708,974
|
|
$
|
111,232
|
|
$
|
1,820,206
|
|
Net income (loss)
|
171,871
|
|
10,447
|
|
182,318
|
|
|||
Other comprehensive income
|
3,481
|
|
—
|
|
3,481
|
|
|||
Dividends on common stock
|
(76,309
|
)
|
—
|
|
(76,309
|
)
|
|||
Share-based compensation
|
4,871
|
|
—
|
|
4,871
|
|
|||
Dividend reinvestment and stock purchase plan
|
220
|
|
—
|
|
220
|
|
|||
Other stock transactions
|
147
|
|
—
|
|
147
|
|
|||
Distribution to noncontrolling interest
|
—
|
|
(13,755
|
)
|
(13,755
|
)
|
|||
Balance at September 30, 2018
|
$
|
1,813,255
|
|
$
|
107,924
|
|
$
|
1,921,179
|
|
Nine Months Ended September 30, 2017
|
Total Stockholders’ Equity
|
Noncontrolling Interest
|
Total Equity
|
||||||
|
|
(in thousands)
|
|
||||||
Balance at December 31, 2016
|
$
|
1,614,639
|
|
$
|
115,495
|
|
$
|
1,730,134
|
|
Net income (loss)
|
126,381
|
|
10,567
|
|
136,948
|
|
|||
Other comprehensive income
|
2,317
|
|
—
|
|
2,317
|
|
|||
Dividends on common stock
|
(71,334
|
)
|
—
|
|
(71,334
|
)
|
|||
Share-based compensation
|
5,853
|
|
—
|
|
5,853
|
|
|||
Dividend reinvestment and stock purchase plan
|
2,300
|
|
—
|
|
2,300
|
|
|||
Redeemable noncontrolling interest
|
(886
|
)
|
—
|
|
(886
|
)
|
|||
Cumulative effect of ASU 2016-09 implementation
|
3,714
|
|
—
|
|
3,714
|
|
|||
Other stock transactions
|
(180
|
)
|
—
|
|
(180
|
)
|
|||
Distribution to noncontrolling interest
|
—
|
|
(12,884
|
)
|
(12,884
|
)
|
|||
Balance at September 30, 2017
|
$
|
1,682,804
|
|
$
|
113,178
|
|
$
|
1,795,982
|
|
•
|
Commodity price risk associated with our retail natural gas marketing activities and our fuel procurement for certain gas-fired generation assets; and
|
•
|
Interest rate risk associated with our variable rate debt.
|
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
|||||||||
|
Notional
(MMBtus)
|
|
Maximum
Term
(months)
(a)
|
|
Notional
(MMBtus)
|
|
Maximum
Term
(months)
(a)
|
|
Notional
(MMBtus)
|
|
Maximum
Term
(months)
(a)
|
|||
Natural gas futures purchased
|
5,300,000
|
|
|
27
|
|
8,330,000
|
|
|
36
|
|
10,250,000
|
|
|
39
|
Natural gas options purchased, net
|
9,670,000
|
|
|
16
|
|
3,540,000
|
|
|
14
|
|
7,360,000
|
|
|
17
|
Natural gas basis swaps purchased
|
5,140,000
|
|
|
27
|
|
8,060,000
|
|
|
36
|
|
9,170,000
|
|
|
39
|
Natural gas over-the-counter swaps, net
(b)
|
4,370,000
|
|
|
20
|
|
3,820,000
|
|
|
29
|
|
4,600,000
|
|
|
20
|
Natural gas physical contracts, net
(c)
|
19,539,851
|
|
|
33
|
|
12,826,605
|
|
|
35
|
|
21,071,714
|
|
|
38
|
(a)
|
Term reflects the maximum forward period hedged.
|
(b)
|
As of
September 30, 2018
,
2,236,000
MMBtus were designated as cash flow hedges for the natural gas over-the-counter swaps purchased.
|
(c)
|
Volumes exclude contracts that qualify for the normal purchase, normal sales exception.
|
Three Months Ended September 30, 2018
|
||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
Location of
Reclassifications from AOCI into Income
|
|
Amount of
Gain/(Loss) Reclassified
from AOCI
into Income
(Settlements)
|
|
Location of
Gain/(Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)
|
|
Amount of
Gain/(Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)
|
||||
Interest rate swaps
|
|
Interest expense
|
|
$
|
(712
|
)
|
|
Interest expense
|
|
$
|
—
|
|
Commodity derivatives
|
|
Fuel, purchased power and cost of natural gas sold
|
|
(18
|
)
|
|
Fuel, purchased power and cost of natural gas sold
|
|
—
|
|
||
Total
|
|
|
|
$
|
(730
|
)
|
|
|
|
$
|
—
|
|
Three Months Ended September 30, 2017
|
||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
Location of
Reclassifications from AOCI into Income
|
|
Amount of
Gain/(Loss) Reclassified
from AOCI
into Income
(Settlements)
|
|
Location of
Gain/(Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)
|
|
Amount of
Gain/(Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)
|
||||
Interest rate swaps
|
|
Interest expense
|
|
$
|
(713
|
)
|
|
Interest expense
|
|
$
|
—
|
|
Commodity derivatives
|
|
Net (loss) from discontinued operations
|
|
295
|
|
|
Net (loss) from discontinued operations
|
|
—
|
|
||
Commodity derivatives
|
|
Fuel, purchased power and cost of natural gas sold
|
|
(34
|
)
|
|
Fuel, purchased power and cost of natural gas sold
|
|
—
|
|
||
Total
|
|
|
|
$
|
(452
|
)
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||
Nine Months Ended September 30, 2018
|
||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
Location of
Reclassifications from AOCI into Income
|
|
Amount of
Gain/(Loss) Reclassified
from AOCI
into Income
(Settlements)
|
|
Location of
Gain/(Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)
|
|
Amount of
Gain/(Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)
|
||||
Interest rate swaps
|
|
Interest expense
|
|
$
|
(2,138
|
)
|
|
Interest expense
|
|
$
|
—
|
|
Commodity derivatives
|
|
Fuel, purchased power and cost of natural gas sold
|
|
(802
|
)
|
|
Fuel, purchased power and cost of natural gas sold
|
|
—
|
|
||
Total
|
|
|
|
$
|
(2,940
|
)
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||
Nine Months Ended September 30, 2017
|
||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
Location of
Reclassifications from AOCI into Income
|
|
Amount of
Gain/(Loss) Reclassified
from AOCI
into Income
(Settlements)
|
|
Location of
Gain/(Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)
|
|
Amount of
Gain/(Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion)
|
||||
Interest rate swaps
|
|
Interest expense
|
|
$
|
(2,228
|
)
|
|
Interest expense
|
|
$
|
—
|
|
Commodity derivatives
|
|
Net (loss) from discontinued operations
|
|
954
|
|
|
Net (loss) from discontinued operations
|
|
—
|
|
||
Commodity derivatives
|
|
Fuel, purchased power and cost of natural gas sold
|
|
(20
|
)
|
|
Fuel, purchased power and cost of natural gas sold
|
|
—
|
|
||
Total
|
|
|
|
$
|
(1,294
|
)
|
|
|
|
$
|
—
|
|
|
Three Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Increase (decrease) in fair value:
|
|
|
|
||||
Forward commodity contracts
|
$
|
30
|
|
|
$
|
(254
|
)
|
Recognition of (gains) losses in earnings due to settlements:
|
|
|
|
||||
Interest rate swaps
|
712
|
|
|
713
|
|
||
Forward commodity contracts
|
18
|
|
|
(261
|
)
|
||
Total other comprehensive income (loss) from hedging
|
$
|
760
|
|
|
$
|
198
|
|
|
|
|
|
||||
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Increase (decrease) in fair value:
|
|
|
|
||||
Forward commodity contracts
|
$
|
(219
|
)
|
|
$
|
1,197
|
|
Recognition of (gains) losses in earnings due to settlements:
|
|
|
|
||||
Interest rate swaps
|
2,138
|
|
|
2,228
|
|
||
Forward commodity contracts
|
802
|
|
|
(934
|
)
|
||
Total other comprehensive income (loss) from hedging
|
$
|
2,721
|
|
|
$
|
2,491
|
|
|
|
Three Months Ended September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Derivatives Not Designated as Hedging Instruments
|
Location of Gain/(Loss) on Derivatives Recognized in Income
|
Amount of Gain/(Loss) on Derivatives Recognized in Income
|
|
Amount of Gain/(Loss) on Derivatives Recognized in Income
|
||||
|
|
|
|
|
||||
Commodity derivatives
|
Net (loss) from discontinued operations
|
$
|
—
|
|
|
$
|
(53
|
)
|
Commodity derivatives
|
Fuel, purchased power and cost of natural gas sold
|
(96
|
)
|
|
(322
|
)
|
||
|
|
$
|
(96
|
)
|
|
$
|
(375
|
)
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Derivatives Not Designated as Hedging Instruments
|
Location of Gain/(Loss) on Derivatives Recognized in Income
|
Amount of Gain/(Loss) on Derivatives Recognized in Income
|
|
Amount of Gain/(Loss) on Derivatives Recognized in Income
|
||||
|
|
|
|
|
||||
Commodity derivatives
|
Net (loss) from discontinued operations
|
$
|
—
|
|
|
$
|
90
|
|
Commodity derivatives
|
Fuel, purchased power and cost of natural gas sold
|
929
|
|
|
(1,822
|
)
|
||
|
|
$
|
929
|
|
|
$
|
(1,732
|
)
|
•
|
Oil and gas derivative instruments are included in assets and liabilities held for sale discussed in Note 18.
|
•
|
The commodity contracts for our Utilities Segments, are valued using the market approach and include exchange-traded futures, options, basis swaps and over-the-counter swaps and options (Level 2) for natural gas contracts. For exchange-traded futures, options and basis swap assets and liabilities, fair value was derived using broker quotes validated by the exchange settlement pricing for the applicable contract. For over-the-counter instruments, the fair value is obtained by utilizing a nationally recognized service that obtains observable inputs to compute the fair value, which we validate by comparing our valuation with the counterparty. The fair value of these swaps includes a CVA component based on the credit spreads of the counterparties when we are in an unrealized gain position or on our own credit spread when we are in an unrealized loss position.
|
•
|
As of
September 30, 2018
, we no longer have derivatives within our corporate activities as our last interest rate swaps matured in January 2017.
|
|
As of September 30, 2018
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
|
Cash Collateral and Counterparty
Netting
|
Total
|
||||||||||
|
(in thousands)
|
|||||||||||||||
Assets:
|
|
|
|
|
|
|
||||||||||
Commodity derivatives — Utilities
|
$
|
—
|
|
$
|
5,882
|
|
$
|
—
|
|
|
$
|
(4,469
|
)
|
$
|
1,413
|
|
Total
|
$
|
—
|
|
$
|
5,882
|
|
$
|
—
|
|
|
$
|
(4,469
|
)
|
$
|
1,413
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
||||||||||
Commodity derivatives — Utilities
|
$
|
—
|
|
$
|
10,033
|
|
$
|
—
|
|
|
$
|
(8,777
|
)
|
$
|
1,256
|
|
Total
|
$
|
—
|
|
$
|
10,033
|
|
$
|
—
|
|
|
$
|
(8,777
|
)
|
$
|
1,256
|
|
|
As of December 31, 2017
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
|
Cash Collateral and Counterparty
Netting
|
Total
|
||||||||||
|
(in thousands)
|
|||||||||||||||
Assets:
|
|
|
|
|
|
|
||||||||||
Commodity derivatives — Utilities
|
$
|
—
|
|
$
|
1,586
|
|
$
|
—
|
|
|
$
|
(1,282
|
)
|
$
|
304
|
|
Total
|
$
|
—
|
|
$
|
1,586
|
|
$
|
—
|
|
|
$
|
(1,282
|
)
|
$
|
304
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
||||||||||
Commodity derivatives — Utilities
|
$
|
—
|
|
$
|
13,756
|
|
$
|
—
|
|
|
$
|
(11,497
|
)
|
$
|
2,259
|
|
Total
|
$
|
—
|
|
$
|
13,756
|
|
$
|
—
|
|
|
$
|
(11,497
|
)
|
$
|
2,259
|
|
|
As of September 30, 2017
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
|
Cash Collateral and Counterparty
Netting
|
Total
|
||||||||||
|
(in thousands)
|
|||||||||||||||
Assets:
|
|
|
|
|
|
|
||||||||||
Commodity derivatives — Utilities
|
$
|
—
|
|
$
|
2,880
|
|
$
|
—
|
|
|
$
|
(2,448
|
)
|
$
|
432
|
|
Total
|
$
|
—
|
|
$
|
2,880
|
|
$
|
—
|
|
|
$
|
(2,448
|
)
|
$
|
432
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
||||||||||
Commodity derivatives — Utilities
|
$
|
—
|
|
$
|
12,647
|
|
$
|
—
|
|
|
$
|
(11,125
|
)
|
$
|
1,522
|
|
Total
|
$
|
—
|
|
$
|
12,647
|
|
$
|
—
|
|
|
$
|
(11,125
|
)
|
$
|
1,522
|
|
As of September 30, 2018
|
||||||||
|
Balance Sheet Location
|
|
Fair Value
of Asset
Derivatives
|
Fair Value
of Liability
Derivatives
|
||||
Derivatives designated as hedges:
|
|
|
|
|
||||
Commodity derivatives
|
Derivative assets — current
|
|
$
|
142
|
|
$
|
—
|
|
Commodity derivatives
|
Other assets, non-current
|
|
21
|
|
—
|
|
||
Commodity derivatives
|
Derivative liabilities — current
|
|
—
|
|
273
|
|
||
Commodity derivatives
|
Other deferred credits and other liabilities
|
|
—
|
|
10
|
|
||
Total derivatives designated as hedges
|
|
|
$
|
163
|
|
$
|
283
|
|
|
|
|
|
|
||||
Derivatives not designated as hedges:
|
|
|
|
|
||||
Commodity derivatives
|
Derivative assets — current
|
|
$
|
1,250
|
|
$
|
—
|
|
Commodity derivatives
|
Derivative liabilities — current
|
|
—
|
|
881
|
|
||
Commodity derivatives
|
Other deferred credits and other liabilities
|
|
—
|
|
92
|
|
||
Total derivatives not designated as hedges
|
|
|
$
|
1,250
|
|
$
|
973
|
|
As of December 31, 2017
|
||||||||
|
Balance Sheet Location
|
|
Fair Value
of Asset
Derivatives
|
Fair Value
of Liability
Derivatives
|
||||
Derivatives designated as hedges:
|
|
|
|
|
||||
Commodity derivatives
|
Derivative liabilities — current
|
|
$
|
—
|
|
$
|
817
|
|
Commodity derivatives
|
Other deferred credits and other liabilities
|
|
—
|
|
67
|
|
||
Total derivatives designated as hedges
|
|
|
$
|
—
|
|
$
|
884
|
|
|
|
|
|
|
||||
Derivatives not designated as hedges:
|
|
|
|
|
||||
Commodity derivatives
|
Derivative assets — current
|
|
$
|
304
|
|
$
|
—
|
|
Commodity derivatives
|
Derivative liabilities — current
|
|
—
|
|
1,264
|
|
||
Commodity derivatives
|
Other deferred credits and other liabilities
|
|
—
|
|
111
|
|
||
Total derivatives not designated as hedges
|
|
|
$
|
304
|
|
$
|
1,375
|
|
As of September 30, 2017
|
||||||||
|
Balance Sheet Location
|
|
Fair Value
of Asset
Derivatives
|
Fair Value
of Liability
Derivatives
|
||||
Derivatives designated as hedges:
|
|
|
|
|
||||
Commodity derivatives
|
Derivative assets — current
|
|
$
|
2
|
|
$
|
—
|
|
Commodity derivatives
|
Current assets held for sale
|
|
225
|
|
—
|
|
||
Commodity derivatives
|
Derivative liabilities — current
|
|
—
|
|
422
|
|
||
Commodity derivatives
|
Current liabilities held for sale
|
|
—
|
|
89
|
|
||
Commodity derivatives
|
Other deferred credits and other liabilities
|
|
—
|
|
49
|
|
||
Commodity derivatives
|
Noncurrent liabilities held for sale
|
|
—
|
|
10
|
|
||
Total derivatives designated as hedges
|
|
|
$
|
227
|
|
$
|
570
|
|
|
|
|
|
|
||||
Derivatives not designated as hedges:
|
|
|
|
|
||||
Commodity derivatives
|
Derivative assets — current
|
|
$
|
430
|
|
$
|
—
|
|
Commodity derivatives
|
Derivative liabilities — current
|
|
—
|
|
1,036
|
|
||
Commodity derivatives
|
Other deferred credits and other liabilities
|
|
—
|
|
15
|
|
||
Commodity derivatives
|
Noncurrent liabilities held for sale
|
|
—
|
|
15
|
|
||
Total derivatives not designated as hedges
|
|
|
$
|
430
|
|
$
|
1,066
|
|
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
|||||||||||||||
|
Carrying
Amount
|
Fair Value
|
|
Carrying
Amount
|
Fair Value
|
|
Carrying
Amount
|
Fair Value
|
||||||||||||
Cash and cash equivalents
(a)
|
$
|
10,001
|
|
$
|
10,001
|
|
|
$
|
15,420
|
|
$
|
15,420
|
|
|
$
|
13,449
|
|
$
|
13,449
|
|
Restricted cash
(a)
|
$
|
3,241
|
|
$
|
3,241
|
|
|
$
|
2,820
|
|
$
|
2,820
|
|
|
$
|
2,683
|
|
$
|
2,683
|
|
Notes payable
(b)
|
$
|
112,100
|
|
$
|
112,100
|
|
|
$
|
211,300
|
|
$
|
211,300
|
|
|
$
|
225,170
|
|
$
|
225,170
|
|
Long-term debt, including current maturities
(c) (d)
|
$
|
3,207,132
|
|
$
|
3,289,770
|
|
|
$
|
3,115,143
|
|
$
|
3,350,544
|
|
|
$
|
3,115,607
|
|
$
|
3,362,971
|
|
(a)
|
Carrying value approximates fair value due to either the short-term length of maturity or variable interest rates that approximate prevailing market rates, and therefore is classified in Level 1 in the fair value hierarchy.
|
(b)
|
Notes payable consist of commercial paper borrowings and borrowings on our Revolving Credit Facility. Carrying value approximates fair value due to the short-term length of maturity; since these borrowings are not traded on an exchange, they are classified in Level 2 in the fair value hierarchy.
|
(c)
|
Long-term debt is valued based on observable inputs available either directly or indirectly for similar liabilities in active markets and therefore is classified in Level 2 in the fair value hierarchy.
|
(d)
|
Carrying amount of long-term debt is net of deferred financing costs.
|
(
14
)
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
Location on the Condensed Consolidated Statements of Income
|
Amount Reclassified from AOCI
|
||||||||||||
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
September 30, 2018
|
September 30, 2017
|
|
September 30, 2018
|
September 30, 2017
|
||||||||||
Gains and (losses) on cash flow hedges:
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
Interest expense
|
$
|
(712
|
)
|
$
|
(713
|
)
|
|
$
|
(2,138
|
)
|
$
|
(2,228
|
)
|
Commodity contracts
|
Net (loss) from discontinued operations
|
—
|
|
295
|
|
|
—
|
|
954
|
|
||||
Commodity contracts
|
Fuel, purchased power and cost of natural gas sold
|
(18
|
)
|
(34
|
)
|
|
(802
|
)
|
(20
|
)
|
||||
|
|
(730
|
)
|
(452
|
)
|
|
(2,940
|
)
|
(1,294
|
)
|
||||
Income tax
|
Income tax benefit (expense)
|
149
|
|
154
|
|
|
643
|
|
435
|
|
||||
Total reclassification adjustments related to cash flow hedges, net of tax
|
|
$
|
(581
|
)
|
$
|
(298
|
)
|
|
$
|
(2,297
|
)
|
$
|
(859
|
)
|
|
|
|
|
|
|
|
||||||||
Amortization of components of defined benefit plans:
|
|
|
|
|
|
|
||||||||
Prior service cost
|
Operations and maintenance
|
$
|
44
|
|
$
|
49
|
|
|
$
|
133
|
|
$
|
146
|
|
|
|
|
|
|
|
|
||||||||
Actuarial gain (loss)
|
Operations and maintenance
|
(621
|
)
|
(414
|
)
|
|
(1,865
|
)
|
(1,242
|
)
|
||||
|
|
(577
|
)
|
(365
|
)
|
|
(1,732
|
)
|
(1,096
|
)
|
||||
Income tax
|
Income tax benefit (expense)
|
128
|
|
128
|
|
|
380
|
|
393
|
|
||||
Total reclassification adjustments related to defined benefit plans, net of tax
|
|
$
|
(449
|
)
|
$
|
(237
|
)
|
|
$
|
(1,352
|
)
|
$
|
(703
|
)
|
Total reclassifications
|
|
$
|
(1,030
|
)
|
$
|
(535
|
)
|
|
$
|
(3,649
|
)
|
$
|
(1,562
|
)
|
|
Interest Rate Swaps
|
Commodity Derivatives
|
Employee Benefit Plans
|
Total
|
||||||||
As of December 31, 2017
|
$
|
(19,581
|
)
|
$
|
(518
|
)
|
$
|
(21,103
|
)
|
$
|
(41,202
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
||||||||
before reclassifications
|
—
|
|
(168
|
)
|
—
|
|
(168
|
)
|
||||
Amounts reclassified from AOCI
|
1,682
|
|
615
|
|
1,352
|
|
3,649
|
|
||||
Reclassifications of certain tax effects from AOCI
|
15
|
|
—
|
|
3
|
|
18
|
|
||||
Ending Balance September 30, 2018
|
$
|
(17,884
|
)
|
$
|
(71
|
)
|
$
|
(19,748
|
)
|
$
|
(37,703
|
)
|
|
|
|
|
|
||||||||
|
|
|
|
|
||||||||
|
Interest Rate Swaps
|
Commodity Derivatives
|
Employee Benefit Plans
|
Total
|
||||||||
Balance as of December 31, 2016
|
$
|
(18,109
|
)
|
$
|
(233
|
)
|
$
|
(16,541
|
)
|
$
|
(34,883
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
||||||||
before reclassifications
|
—
|
|
755
|
|
—
|
|
755
|
|
||||
Amounts reclassified from AOCI
|
1,449
|
|
(590
|
)
|
703
|
|
1,562
|
|
||||
Ending Balance September 30, 2017
|
$
|
(16,660
|
)
|
$
|
(68
|
)
|
$
|
(15,838
|
)
|
$
|
(32,566
|
)
|
Nine Months Ended
|
September 30, 2018
|
|
September 30, 2017
|
||||
|
(in thousands)
|
||||||
Non-cash investing and financing activities —
|
|
|
|
||||
Property, plant and equipment acquired with accrued liabilities
|
$
|
49,631
|
|
|
$
|
33,409
|
|
Increase (decrease) in capitalized assets associated with asset retirement obligations
|
$
|
155
|
|
|
$
|
1,362
|
|
|
|
|
|
||||
Cash (paid) refunded during the period —
|
|
|
|
||||
Interest (net of amounts capitalized)
|
$
|
(104,035
|
)
|
|
$
|
(102,008
|
)
|
Income taxes (paid) refunded
|
$
|
(14,842
|
)
|
|
$
|
1
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Service cost
|
$
|
1,708
|
|
$
|
1,759
|
|
|
$
|
5,125
|
|
$
|
5,276
|
|
Interest cost
|
3,867
|
|
3,880
|
|
|
11,602
|
|
11,640
|
|
||||
Expected return on plan assets
|
(6,185
|
)
|
(6,130
|
)
|
|
(18,555
|
)
|
(18,388
|
)
|
||||
Prior service cost
|
15
|
|
15
|
|
|
44
|
|
44
|
|
||||
Net loss (gain)
|
2,158
|
|
1,002
|
|
|
6,473
|
|
3,005
|
|
||||
Net periodic benefit cost
|
$
|
1,563
|
|
$
|
526
|
|
|
$
|
4,689
|
|
$
|
1,577
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Service cost
|
$
|
573
|
|
$
|
575
|
|
|
$
|
1,718
|
|
$
|
1,725
|
|
Interest cost
|
521
|
|
533
|
|
|
1,563
|
|
1,600
|
|
||||
Expected return on plan assets
|
(57
|
)
|
(79
|
)
|
|
(170
|
)
|
(237
|
)
|
||||
Prior service cost (benefit)
|
(99
|
)
|
(109
|
)
|
|
(297
|
)
|
(327
|
)
|
||||
Net loss (gain)
|
54
|
|
125
|
|
|
162
|
|
375
|
|
||||
Net periodic benefit cost
|
$
|
992
|
|
$
|
1,045
|
|
|
$
|
2,976
|
|
$
|
3,136
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||
|
2018
|
2017
|
|
2018
|
2017
|
||||||||
Service cost
|
$
|
632
|
|
$
|
612
|
|
|
$
|
1,347
|
|
$
|
2,048
|
|
Interest cost
|
293
|
|
319
|
|
|
878
|
|
957
|
|
||||
Prior service cost
|
—
|
|
—
|
|
|
1
|
|
1
|
|
||||
Net loss (gain)
|
250
|
|
251
|
|
|
750
|
|
751
|
|
||||
Net periodic benefit cost
|
$
|
1,175
|
|
$
|
1,182
|
|
|
$
|
2,976
|
|
$
|
3,757
|
|
|
Contributions Made
|
Contributions Made
|
Additional Contributions
|
Contributions
|
||||||||
|
Three Months Ended September 30, 2018
|
Nine Months Ended September 30, 2018
|
Anticipated for 2018
|
Anticipated for 2019
|
||||||||
Defined Benefit Pension Plan
|
$
|
12,700
|
|
$
|
12,700
|
|
$
|
—
|
|
$
|
12,700
|
|
Non-pension Defined Benefit Postretirement Healthcare Plans
|
$
|
1,234
|
|
$
|
3,702
|
|
$
|
1,234
|
|
$
|
3,821
|
|
Supplemental Non-qualified Defined Benefit and Defined Contribution Plans
|
$
|
343
|
|
$
|
1,029
|
|
$
|
343
|
|
$
|
1,623
|
|
|
September 30, 2018
|
December 31, 2017
|
September 30, 2017
|
||||||
Other current assets
|
$
|
75
|
|
$
|
10,360
|
|
$
|
8,457
|
|
Derivative assets, current and noncurrent
|
—
|
|
—
|
|
225
|
|
|||
Deferred income tax assets, noncurrent, net
|
—
|
|
16,966
|
|
12,571
|
|
|||
Property, plant and equipment, net
|
2,779
|
|
56,916
|
|
96,085
|
|
|||
Other current liabilities
|
(2,138
|
)
|
(18,966
|
)
|
(7,597
|
)
|
|||
Derivative liabilities, current and noncurrent
|
—
|
|
—
|
|
(114
|
)
|
|||
Deferred income tax liabilities, noncurrent, net
|
(400
|
)
|
—
|
|
—
|
|
|||
Other noncurrent liabilities
|
—
|
|
(22,808
|
)
|
(23,319
|
)
|
|||
Net assets (liabilities)
|
$
|
316
|
|
$
|
42,468
|
|
$
|
86,308
|
|
|
Three Months Ended September 30,
|
|||
Tax (benefit) expense
|
2018
|
2017
|
||
Federal statutory rate
|
21.0
|
%
|
35.0
|
%
|
State income tax (net of federal tax effect)
(a)
|
(6.3
|
)
|
(3.4
|
)
|
Percentage depletion in excess of cost
|
(0.5
|
)
|
(0.9
|
)
|
Accounting for uncertain tax positions adjustment
|
—
|
|
(0.6
|
)
|
Noncontrolling interest
(b)
|
(1.3
|
)
|
(3.0
|
)
|
Tax credits
(c)
|
(5.3
|
)
|
(1.6
|
)
|
Effective tax rate adjustment
(d)
|
—
|
|
3.9
|
|
Flow-through adjustments
|
(1.5
|
)
|
(1.6
|
)
|
TCJA change in estimate
(e)
|
17.6
|
|
—
|
|
AFUDC equity
|
(0.1
|
)
|
—
|
|
Other tax differences
|
1.9
|
|
1.3
|
|
|
25.5
|
%
|
29.1
|
%
|
(a)
|
Adjustment to the deferred state rate and reduced state tax expense for the quarter.
|
(b)
|
The adjustment reflects the noncontrolling interest attributable to the sale in April 2016 of
49.9%
of the membership interests of COIPP LLC.
|
(c)
|
The tax credits are due to the production tax credits for the Peak View wind farm.
|
(d)
|
Adjustment to reflect our projected annual effective tax rate, pursuant to ASC 740-270.
|
(e)
|
The TCJA was signed into law on December 22, 2017. In accordance with ASC 740, net deferred tax assets and liabilities were revalued as of December 31, 2017 due to the reduction in the federal income tax rate from 35% to 21%. During the three months ended September 30, 2018, we recorded an additional
$5.3 million
of tax expense associated with changes in the prior estimated impacts of tax reform on deferred income taxes.
|
(a)
|
During the first quarter of 2017, the Company filed amended income tax returns for the years 2006 through 2008 to carryback specified liability losses in accordance with IRC172(f). As a result of filing the amended returns, the Company’s accrued tax liability interest decreased, certain valuation allowances increased and the previously recorded domestic production activities deduction decreased.
|
(b)
|
The tax credits are due to the production tax credits for the Peak View wind farm.
|
(c)
|
The TCJA was signed into law on December 22, 2017. In accordance with ASC 740, net deferred tax assets and liabilities were revalued as of December 31, 2017 due to the reduction in the federal income tax rate from 35% to 21%. During the nine months ended September 30, 2018, we recorded an additional
$7.5 million
of tax expense associated with changes in the prior estimated impacts of tax reform on deferred income taxes.
|
(d)
|
Tax benefit from legal restructuring associated with amortizable goodwill as part of jurisdictional simplification.
|
|
September 30, 2018
|
December 31, 2017
|
September 30, 2017
|
||||||
Accrued employee compensation, benefits and withholdings
|
$
|
57,600
|
|
$
|
52,467
|
|
$
|
52,841
|
|
Accrued property taxes
|
37,660
|
|
42,029
|
|
36,993
|
|
|||
Customer deposits and prepayments
|
42,002
|
|
44,420
|
|
41,012
|
|
|||
Accrued interest and contract adjustment payments
|
31,139
|
|
33,822
|
|
30,977
|
|
|||
CIAC current portion
|
1,552
|
|
1,552
|
|
1,575
|
|
|||
Other (none of which is individually significant)
|
31,400
|
|
45,172
|
|
43,381
|
|
|||
Total accrued liabilities
|
$
|
201,353
|
|
$
|
219,462
|
|
$
|
206,779
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
See Forward-Looking Information in the Liquidity and Capital Resources section of this Item 2, beginning on Page
66
.
|
•
|
Electric Utilities’ earnings decreased
$5.7 million
primarily due a settlement agreement with the WPSC which decreased gross margins by $3.4 million, unfavorable summer weather compared to prior year, higher operating expenses driven by outside services and employee costs and $2.8 million of tax expense associated with changes in the prior estimated impact of tax reform on deferred income taxes;
|
•
|
Gas Utilities’ earnings decreased
$8.9 million
primarily due to unfavorable weather compared to prior year, higher operating expenses driven by employee costs and outside services and $2.6 million of tax expense associated with changes in the prior estimated impact of tax reform on deferred income taxes;
|
•
|
Power Generation’s earnings increased
$0.5 million
primarily due to the reduction in the federal tax rate from
35%
to
21%
from the TCJA; and
|
•
|
Corporate and Other expenses decreased
$2.9 million
due to lower interest expense and higher prior year operating costs previously allocated to our Oil and Gas segment which were not reclassified to discontinued operations, largely allocated to operating segments in 2018.
|
•
|
Gas Utilities’ earnings increased
$52 million
primarily due to the recognition of a deferred tax benefit of $49 million resulting from
legal entity restructuring associated with amortizable goodwill for tax purposes; earnings also benefited from colder winter weather and increased sales of natural gas, partially offset by an increase in operating expenses;
|
•
|
Electric Utilities’ earnings decreased
$5.1 million
due primarily to a settlement agreement with the WPSC which decreased gross margins by $3.7 million; other variances to the prior year were due to higher operating expenses driven by outside services and employee costs and $3.2 million of tax expense associated with changes in the prior estimated impact of tax reform on deferred income taxes, partially offset by higher rider revenues from recent transmission investments, higher power marketing and wholesale margins, and favorable weather;
|
•
|
Power Generation’s earnings decreased
$0.7 million
primarily due to higher operating expenses;
|
•
|
Mining earnings increased
$0.5 million
primarily due to higher coal sales from increased price per ton sold, partially offset by higher operating expenses and tax expense.
|
•
|
Corporate and other expenses decreased
$1.1 million
primarily due to higher tax benefits recognized in the prior year and higher prior year operating costs previously allocated to our Oil and Gas segment which were not reclassified to discontinued operations, largely allocated to operating segments in 2018.
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||
|
2018
|
2017
|
Variance
|
2018
|
2017
|
Variance
|
||||||||||||
Revenue
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
357,370
|
|
$
|
366,885
|
|
$
|
(9,515
|
)
|
$
|
1,358,519
|
|
$
|
1,319,573
|
|
$
|
38,946
|
|
Inter-company eliminations
|
(35,391
|
)
|
(31,274
|
)
|
(4,117
|
)
|
(105,447
|
)
|
(94,605
|
)
|
(10,842
|
)
|
||||||
|
$
|
321,979
|
|
$
|
335,611
|
|
$
|
(13,632
|
)
|
$
|
1,253,072
|
|
$
|
1,224,968
|
|
$
|
28,104
|
|
Net income (loss) from continuing operations available for common stock
|
|
|
|
|
|
|
||||||||||||
Electric Utilities
(b)
|
$
|
21,578
|
|
$
|
27,324
|
|
$
|
(5,746
|
)
|
$
|
63,313
|
|
$
|
68,386
|
|
$
|
(5,073
|
)
|
Gas Utilities
(a) (b)
|
(13,277
|
)
|
(4,329
|
)
|
(8,948
|
)
|
93,182
|
|
41,409
|
|
51,773
|
|
||||||
Power Generation
(b)
|
6,691
|
|
6,155
|
|
536
|
|
17,319
|
|
18,017
|
|
(698
|
)
|
||||||
Mining
(b)
|
3,572
|
|
3,477
|
|
95
|
|
9,561
|
|
9,048
|
|
513
|
|
||||||
|
18,564
|
|
32,627
|
|
(14,063
|
)
|
183,375
|
|
136,860
|
|
46,515
|
|
||||||
Corporate and Other
(b)
|
(757
|
)
|
(3,664
|
)
|
2,907
|
|
(5,877
|
)
|
(6,994
|
)
|
1,117
|
|
||||||
Net income from continuing operations
|
17,807
|
|
28,963
|
|
(11,156
|
)
|
177,498
|
|
129,866
|
|
47,632
|
|
||||||
(Loss) from discontinued operations, net of tax
|
(857
|
)
|
(1,300
|
)
|
443
|
|
(5,627
|
)
|
(3,485
|
)
|
(2,142
|
)
|
||||||
Net income available for common stock
|
$
|
16,950
|
|
$
|
27,663
|
|
$
|
(10,713
|
)
|
$
|
171,871
|
|
$
|
126,381
|
|
$
|
45,490
|
|
(a)
|
Net income (loss) from continuing operations for the
nine
months ended
September 30, 2018
included a $49 million tax benefit resulting from
legal entity restructuring. See Note 19 of the Notes to Condensed Consolidated Financial Statements for more information.
|
(b)
|
Net income (loss) from continuing operations for the three and
nine
months ended
September 30, 2018
included approximately $5.3 million and $7.5 million of income tax expense associated with changes in the prior estimated impact of tax reform on deferred income taxes. The impact to our operating segments and Corporate and Other for the three and
nine
months ended
September 30, 2018
was: Electric Utilities $2.8 million and $3.2 million; Gas Utilities $2.6 million and $2.6 million, Mining ($0.0) million and $0.5 million; Power Generation ($0.0) million and $0.7 million; and Corporate and Other ($0.1) million and $0.6 million, respectively.
|
•
|
On October 31, Wyoming Electric received approval from the WPSC for a comprehensive, multi-year settlement regarding its PCA Application filed earlier in 2018. Wyoming Electric will provide a total of $7.0 million in customer credits through the PCA mechanism in 2018, 2019 and 2020 to resolve several years of disputed issues related to PCA dockets before the commission. The settlement also stipulates that the adjustment for the variable cost segment of the Wygen I Power Purchase Agreement with Wyoming Electric (an affiliate company) will escalate by
3%
annually through 2022.
|
•
|
On October 3, 2018, Colorado Electric set a new winter peak load of 313 MW, exceeding the previous summer peak of 310 MW set in February 2011.
|
•
|
Cooling degree days for the
three
and
nine
months ended
September 30, 2018
were
9%
higher and 29% higher than the 30-year average (normal) compared to
15%
higher than normal for the same periods in
2017
.
|
•
|
Wyoming Electric and Colorado Electric set new summer peak loads:
|
•
|
On July 10, 2018, Wyoming Electric set a new all-time peak load of 254 MW, exceeding the previous summer peak of 249 MW set in July 2017.
|
•
|
On June 27, 2018, Colorado Electric set a new all-time peak load of 413 MW, exceeding the previous summer peak of 412 MW set in July 2016.
|
•
|
On July 25, 2018, South Dakota Electric placed in service the first 48-mile segment of a $70 million, 175-mile, 230-kilovolt transmission line from Rapid City, South Dakota, to Stegall, Nebraska. The remaining segment is expected to be in service by the end of 2019.
|
•
|
On April 25, 2018, Colorado Electric received approval from the CPUC to contract with Black Hills Electric Generation for the 60 megawatt Busch Ranch II wind project. The project is currently under construction and is expected to be in service by the end of 2019. This renewable energy will enable Colorado Electric to comply with Colorado's Renewable Energy Standard.
|
•
|
Rate Review updates:
|
•
|
On October 5, 2018, Arkansas Gas received approval from the APSC for a general rate increase. The new rates will generate approximately
$12 million
of new revenue. The APSC’s approval also allows Arkansas Gas to include
$11 million
of revenue that is currently being collected through certain rider mechanisms in the new base rates. The new revenue increase is based on a return on equity of
9.61%
and a capital structure of
49.1%
equity and
50.9%
debt. New rates, inclusive of customer benefits related to the TCJA, were effective October 15, 2018.
|
•
|
On July 16, 2018, the WPSC reached a bench decision approving our Wyoming Gas (Northwest Wyoming) settlement and stipulation with the OCA. We received the final order in the third quarter of 2018. The settlement provides for $1.0 million of new revenue, a return on equity of 9.6%, and a capital structure of 54.0% equity and 46.0% debt. New rates, inclusive of customer benefits related to the TCJA, were effective September 1, 2018.
|
•
|
In Colorado, new rates for RMNG went into effect June 1, 2018 after an administrative law judge recommended approval of a settlement agreement and the CPUC took no further action. The settlement included
$1.1 million
in annual revenue increases and an extension of SSIR to recover costs from 2018 through 2021. The annual increase is based on a return on equity of
9.9%
and a capital structure of
46.63%
equity and
53.37%
debt. New rates are inclusive of customer benefits related to the TCJA.
|
•
|
Wyoming Gas filed for a CPCN on May 18, 2018 with the WPSC to construct a new $54 million, 35-mile natural gas pipeline (Natural Bridge Pipeline) to enhance reliability of supply for approximately 57,000 customers in its Casper division in central Wyoming.
|
•
|
Certain legal entity restructuring transactions occurred on March 31, 2018 as part of the Company’s ongoing efforts to continue to integrate the
legal entities that the Company has acquired in recent years. As a result of these transactions, additional deferred income tax assets of $49 million, related to goodwill that is amortizable for tax purposes, were recorded with a corresponding deferred tax benefit recorded on the Condensed Consolidated Statements of Income.
|
•
|
Heating degree days at the Gas Utilities for the
three
and
nine
months ended
September 30, 2018
were
27%
lower and comparable to the 30-year average (normal), respectively, compared to
22%
and
12%
lower than normal for the same periods in
2017
.
|
•
|
On April 25, 2018, Black Hills Electric Generation was selected to provide 60 megawatts of renewable energy to Colorado Electric from the Busch Ranch II wind project, which is expected to be in service by the end of 2019.
|
•
|
On November 1, 2018, we completed settlement of the stock purchase contracts that are components of the Equity Units issued in November 2015. Upon settlement of all outstanding stock purchase obligations, the Company received gross proceeds of $299 million in exchange for approximately 6.372 million shares of common stock.
|
•
|
On October 11, 2018, Fitch affirmed Black Hills’ credit rating at BBB+ and maintained a Stable outlook.
|
•
|
On August 17, 2018, we completed a public debt offering of $400 million principal amount of 4.350% senior unsecured notes. The proceeds were used to repay the $299 million principal amount of our RSNs due 2028 and pay down short-term debt.
|
•
|
On August 9, 2018, S&P upgraded Black Hills’ credit rating to BBB+ with a Stable outlook and South Dakota Electric’s credit rating to A.
|
•
|
On July 30, 2018, we amended and restated our corporate Revolving Credit Facility, maintaining total commitments of
$750 million
and extending the term through
July 30, 2023
with
two
one
-year extension options (subject to consent from lenders). This facility is similar to the former Revolving Credit Facility, which includes an accordion feature that allows us, with the consent of the administrative agent, the issuing agents and the banks increasing or providing new commitments, to increase total commitments of the facility up to
$1.0 billion
.
|
•
|
On July 30, 2018, we amended and restated our unsecured term loan due August 2019. This amended and restated term loan, with $300 million outstanding at September 30, 2018, matures on July 30, 2020.
|
•
|
On July 19, 2018, Fitch affirmed South Dakota Electric’s credit rating at A.
|
•
|
On November 1, 2017, the BHC Board of Directors approved a complete divestiture of our Oil and Gas segment.
As of September 30, 2018, we have sold nearly all of our oil and gas assets and we closed our oil and gas office in August. Transaction closing for the last few assets and final accounting are expected within the fourth quarter.
See Note 18 of the Notes to Condensed Consolidated Financial Statements for more information.
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||
|
2018
|
2017
|
Variance
|
2018
|
2017
|
Variance
|
||||||||||||
|
(in thousands)
|
|||||||||||||||||
Revenue
(a)
|
$
|
184,790
|
|
$
|
183,571
|
|
$
|
1,219
|
|
$
|
531,961
|
|
$
|
528,048
|
|
$
|
3,913
|
|
|
|
|
|
|
|
|
||||||||||||
Total fuel and purchased power
|
72,928
|
|
68,733
|
|
4,195
|
|
204,334
|
|
199,398
|
|
4,936
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Gross margin
(b)
|
111,862
|
|
114,838
|
|
(2,976
|
)
|
327,627
|
|
328,650
|
|
(1,023
|
)
|
||||||
|
|
|
|
|
|
|
||||||||||||
Operations and maintenance
|
45,307
|
|
40,204
|
|
5,103
|
|
135,501
|
|
125,302
|
|
10,199
|
|
||||||
Depreciation and amortization
|
24,720
|
|
23,446
|
|
1,274
|
|
73,873
|
|
69,427
|
|
4,446
|
|
||||||
Total operating expenses
|
70,027
|
|
63,650
|
|
6,377
|
|
209,374
|
|
194,729
|
|
14,645
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Operating income
|
41,835
|
|
51,188
|
|
(9,353
|
)
|
118,253
|
|
133,921
|
|
(15,668
|
)
|
||||||
|
|
|
|
|
|
|
||||||||||||
Interest expense, net
|
(12,923
|
)
|
(12,744
|
)
|
(179
|
)
|
(39,423
|
)
|
(39,049
|
)
|
(374
|
)
|
||||||
Other income (expense), net
|
(450
|
)
|
649
|
|
(1,099
|
)
|
(1,121
|
)
|
1,579
|
|
(2,700
|
)
|
||||||
Income tax benefit (expense)
|
(6,884
|
)
|
(11,769
|
)
|
4,885
|
|
(14,396
|
)
|
(28,065
|
)
|
13,669
|
|
||||||
Net income
|
$
|
21,578
|
|
$
|
27,324
|
|
$
|
(5,746
|
)
|
$
|
63,313
|
|
$
|
68,386
|
|
$
|
(5,073
|
)
|
(a)
|
The three and nine months ended September 30, 2018 include Horizon Point shared facility revenues of approximately $2.8 million and $8.1 million, respectively, which are allocated to all of our operating segments as facility expenses. This shared facility agreement is new in 2018 and has no impact on BHC’s consolidated operating results.
|
(b)
|
Non-GAAP measure
|
(a)
|
Non-GAAP measure
|
(b)
|
Horizon Point shared facility revenue is offset by facility expenses at our operating segments and has no impact on consolidated results.
|
(a)
|
Non-GAAP measure
|
(b)
|
Horizon Point shared facility revenue is offset by facility expenses at our operating segments and has no impact on consolidated results.
|
|
|
Electric Revenue (in thousands)
|
|
Quantities sold (MWh)
|
||||||||||||||||||
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||
|
|
2018
|
2017
|
2018
|
2017
|
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Residential
|
|
$
|
58,122
|
|
$
|
55,866
|
|
$
|
163,979
|
|
$
|
158,017
|
|
|
372,623
|
|
369,466
|
|
1,084,531
|
|
1,038,437
|
|
Commercial
|
|
65,794
|
|
68,044
|
|
192,680
|
|
195,495
|
|
|
550,791
|
|
557,975
|
|
1,560,911
|
|
1,547,254
|
|
||||
Industrial
|
|
31,939
|
|
30,564
|
|
93,959
|
|
91,583
|
|
|
429,133
|
|
406,946
|
|
1,248,438
|
|
1,192,316
|
|
||||
Municipal
|
|
4,582
|
|
4,958
|
|
13,389
|
|
13,934
|
|
|
43,972
|
|
47,389
|
|
122,953
|
|
125,065
|
|
||||
Subtotal Retail Revenue - Electric
|
|
160,437
|
|
159,432
|
|
464,007
|
|
459,029
|
|
|
1,396,519
|
|
1,381,776
|
|
4,016,833
|
|
3,903,072
|
|
||||
Contract Wholesale
|
|
8,256
|
|
8,048
|
|
25,497
|
|
22,593
|
|
|
221,327
|
|
185,723
|
|
677,163
|
|
537,720
|
|
||||
Off-system/Power Marketing Wholesale
|
|
9,059
|
|
5,932
|
|
18,142
|
|
15,110
|
|
|
206,791
|
|
159,425
|
|
514,686
|
|
477,283
|
|
||||
Other
|
|
7,038
|
|
10,159
|
|
24,315
|
|
31,316
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Total Revenue and Energy Sold
|
|
184,790
|
|
183,571
|
|
531,961
|
|
528,048
|
|
|
1,824,637
|
|
1,726,924
|
|
5,208,682
|
|
4,918,075
|
|
||||
Other Uses, Losses or Generation, net
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
121,478
|
|
134,595
|
|
337,939
|
|
354,572
|
|
||||
Total Revenue and Energy
|
|
184,790
|
|
183,571
|
|
531,961
|
|
528,048
|
|
|
1,946,115
|
|
1,861,519
|
|
5,546,621
|
|
5,272,647
|
|
||||
Less cost of fuel and purchased power
|
|
72,928
|
|
68,733
|
|
204,334
|
|
199,398
|
|
|
|
|
|
|
||||||||
Gross Margin
(a)
|
|
$
|
111,862
|
|
$
|
114,838
|
|
$
|
327,627
|
|
$
|
328,650
|
|
|
|
|
|
|
(a)
|
Non-GAAP measure
|
Three Months Ended September 30,
|
|
Electric Revenue (in thousands)
|
|
Gross Margin
(a)
(in thousands)
|
|
Quantities Sold (MWh)
(b)
|
|||||||||||||
|
|
2018
|
2017
|
|
2018
|
2017
|
|
2018
|
2017
|
||||||||||
South Dakota Electric
|
|
$
|
78,067
|
|
$
|
73,939
|
|
|
$
|
52,860
|
|
$
|
51,096
|
|
|
874,962
|
|
835,285
|
|
Wyoming Electric
|
|
38,671
|
|
40,670
|
|
|
18,843
|
|
22,990
|
|
|
461,074
|
|
434,945
|
|
||||
Colorado Electric
|
|
68,052
|
|
68,962
|
|
|
40,159
|
|
40,752
|
|
|
610,079
|
|
591,289
|
|
||||
Total Electric Revenue, Gross Margin, and Quantities Sold
|
|
$
|
184,790
|
|
$
|
183,571
|
|
|
$
|
111,862
|
|
$
|
114,838
|
|
|
1,946,115
|
|
1,861,519
|
|
(a)
|
Non-GAAP measure
|
(b)
|
Total MWh includes Other Uses, Losses or Generation, net, which are approximately
5%
,
7%
, and
7%
for South Dakota Electric, Wyoming Electric, and Colorado Electric, respectively.
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30,
|
|
Electric Revenue (in thousands)
|
|
Gross Margin
(a)
(in thousands)
|
|
Quantities Sold (MWh)
(b)
|
|||||||||||||
|
|
2018
|
2017
|
|
2018
|
2017
|
|
2018
|
2017
|
||||||||||
South Dakota Electric
|
|
$
|
222,558
|
|
$
|
213,785
|
|
|
$
|
154,158
|
|
$
|
149,182
|
|
|
2,541,082
|
|
2,399,995
|
|
Wyoming Electric
|
|
120,466
|
|
123,299
|
|
|
62,489
|
|
68,215
|
|
|
1,365,932
|
|
1,298,009
|
|
||||
Colorado Electric
|
|
188,937
|
|
190,964
|
|
|
110,980
|
|
111,253
|
|
|
1,639,607
|
|
1,574,643
|
|
||||
Total Electric Revenue, Gross Margin, and Quantities Sold
|
|
$
|
531,961
|
|
$
|
528,048
|
|
|
$
|
327,627
|
|
$
|
328,650
|
|
|
5,546,621
|
|
5,272,647
|
|
(a)
|
Non-GAAP measure
|
(b)
|
Total MWh includes Other Uses, Losses or Generation, net, which are approximately
5%
,
6%
, and
7%
for South Dakota Electric, Wyoming Electric, and Colorado Electric, respectively.
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||
Quantities Generated and Purchased (MWh)
|
2018
|
2017
|
2018
|
2017
|
||||
|
|
|
|
|
||||
Coal-fired
|
608,417
|
|
625,590
|
|
1,772,750
|
|
1,663,935
|
|
Natural Gas and Oil
|
199,351
|
|
156,465
|
|
345,978
|
|
249,065
|
|
Wind
|
54,450
|
|
38,773
|
|
196,932
|
|
167,429
|
|
Total Generated
|
862,218
|
|
820,828
|
|
2,315,660
|
|
2,080,429
|
|
Purchased
|
1,083,897
|
|
1,040,691
|
|
3,230,961
|
|
3,192,218
|
|
Total Generated and Purchased
|
1,946,115
|
|
1,861,519
|
|
5,546,621
|
|
5,272,647
|
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||
Quantities Generated and Purchased (MWh)
|
2018
|
2017
|
2018
|
2017
|
||||
Generated:
|
|
|
|
|
||||
South Dakota Electric
|
469,680
|
|
478,232
|
|
1,293,713
|
|
1,177,131
|
|
Wyoming Electric
|
229,262
|
|
227,391
|
|
633,696
|
|
601,780
|
|
Colorado Electric
|
163,276
|
|
115,205
|
|
388,251
|
|
301,518
|
|
Total Generated
|
862,218
|
|
820,828
|
|
2,315,660
|
|
2,080,429
|
|
Purchased:
|
|
|
|
|
||||
South Dakota Electric
|
405,282
|
|
357,053
|
|
1,247,369
|
|
1,222,864
|
|
Wyoming Electric
|
231,812
|
|
207,554
|
|
732,236
|
|
696,229
|
|
Colorado Electric
|
446,803
|
|
476,084
|
|
1,251,356
|
|
1,273,125
|
|
Total Purchased
|
1,083,897
|
|
1,040,691
|
|
3,230,961
|
|
3,192,218
|
|
|
|
|
|
|
||||
Total Generated and Purchased
|
1,946,115
|
|
1,861,519
|
|
5,546,621
|
|
5,272,647
|
|
|
Three Months Ended September 30,
|
||||||||||||
Degree Days
|
|
|
2018
|
|
|
|
2017
|
||||||
|
Actual
|
|
Variance from
30-Year Average
|
|
Actual Variance to Prior Year
|
|
Actual
|
|
Variance from
30-Year Average
|
||||
Heating Degree Days:
|
|
|
|
|
|
|
|
|
|
||||
South Dakota Electric
|
236
|
|
|
5
|
%
|
|
17%
|
|
202
|
|
|
(10
|
)%
|
Wyoming Electric
|
248
|
|
|
(19
|
)%
|
|
(15)%
|
|
292
|
|
|
(4
|
)%
|
Colorado Electric
|
35
|
|
|
(64
|
)%
|
|
(60)%
|
|
87
|
|
|
(11
|
)%
|
Combined
(a)
|
147
|
|
|
(20
|
)%
|
|
(13)%
|
|
168
|
|
|
(8
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||
Cooling Degree Days:
|
|
|
|
|
|
|
|
|
|
||||
South Dakota Electric
|
356
|
|
|
(33
|
)%
|
|
(40)%
|
|
595
|
|
|
11
|
%
|
Wyoming Electric
|
328
|
|
|
10
|
%
|
|
(15)%
|
|
388
|
|
|
30
|
%
|
Colorado Electric
|
910
|
|
|
33
|
%
|
|
16%
|
|
784
|
|
|
14
|
%
|
Combined
(a)
|
603
|
|
|
9
|
%
|
|
(6)%
|
|
640
|
|
|
15
|
%
|
(a)
|
Combined actuals are calculated based on the weighted average number of total customers by state.
|
|
|
|
|
|
|
|
|
|
|
||||
|
Nine Months Ended September 30,
|
||||||||||||
Degree Days
|
2018
|
|
|
|
2017
|
||||||||
|
Actual
|
|
Variance from
30-Year Average
|
|
Actual Variance to Prior Year
|
|
Actual
|
|
Variance from
30-Year Average
|
||||
Heating Degree Days:
|
|
|
|
|
|
|
|
|
|
||||
South Dakota Electric
|
4,972
|
|
|
11
|
%
|
|
17%
|
|
4,242
|
|
|
(5
|
)%
|
Wyoming Electric
|
4,285
|
|
|
(9
|
)%
|
|
2%
|
|
4,186
|
|
|
(11
|
)%
|
Colorado Electric
|
2,901
|
|
|
9
|
%
|
|
5%
|
|
2,773
|
|
|
(17
|
)%
|
Combined
(a)
|
3,888
|
|
|
5
|
%
|
|
9%
|
|
3,559
|
|
|
(11
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||
Cooling Degree Days:
|
|
|
|
|
|
|
|
|
|
||||
South Dakota Electric
|
488
|
|
|
(23
|
)%
|
|
(31)%
|
|
709
|
|
|
12
|
%
|
Wyoming Electric
|
430
|
|
|
24
|
%
|
|
—%
|
|
429
|
|
|
23
|
%
|
Colorado Electric
|
1,404
|
|
|
57
|
%
|
|
37%
|
|
1,027
|
|
|
15
|
%
|
Combined
(a)
|
895
|
|
|
29
|
%
|
|
12%
|
|
798
|
|
|
15
|
%
|
(a)
|
Combined actuals are calculated based on the weighted average number of total customers by state.
|
Electric Utilities Power Plant Availability
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||
|
2018
|
2017
|
2018
|
|
2017
|
|
||||||
Coal-fired plants
(a)
|
95.7
|
%
|
|
98.3
|
%
|
|
94.0
|
%
|
|
88.1
|
%
|
|
Natural gas-fired plants and Other plants
|
97.0
|
%
|
|
94.6
|
%
|
|
97.2
|
%
|
|
95.8
|
%
|
|
Wind
|
96.9
|
%
|
|
91.0
|
%
|
|
96.9
|
%
|
|
92.0
|
%
|
|
Total availability
|
96.6
|
%
|
|
95.5
|
%
|
|
96.1
|
%
|
|
93.0
|
%
|
|
|
|
|
|
|
|
|
|
|
||||
Wind capacity factor
|
33.1
|
%
|
|
23.6
|
%
|
|
41.8
|
%
|
|
34.3
|
%
|
|
(a)
|
2017 included planned outages at Neil Simpson II, Wygen II and Wygen III.
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||
|
2018
|
2017
|
Variance
|
2018
|
2017
|
Variance
|
||||||||||||
|
(in thousands)
|
|||||||||||||||||
Revenue:
|
|
|
|
|
|
|
||||||||||||
Natural gas — regulated
|
$
|
117,070
|
|
$
|
123,210
|
|
$
|
(6,140
|
)
|
$
|
648,550
|
|
$
|
602,745
|
|
$
|
45,805
|
|
Other — non-regulated services
(a)
|
14,606
|
|
19,684
|
|
(5,078
|
)
|
58,090
|
|
71,506
|
|
(13,416
|
)
|
||||||
Total revenue
|
131,676
|
|
142,894
|
|
(11,218
|
)
|
706,640
|
|
674,251
|
|
32,389
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Cost of sales:
|
|
|
|
|
|
|
||||||||||||
Natural gas — regulated
|
30,612
|
|
33,376
|
|
(2,764
|
)
|
298,149
|
|
255,410
|
|
42,739
|
|
||||||
Other — non-regulated services
(a)
|
5,514
|
|
11,917
|
|
(6,403
|
)
|
15,716
|
|
33,615
|
|
(17,899
|
)
|
||||||
Total cost of sales
|
36,126
|
|
45,293
|
|
(9,167
|
)
|
313,865
|
|
289,025
|
|
24,840
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Gross margin
(b)
|
95,550
|
|
97,601
|
|
(2,051
|
)
|
392,775
|
|
385,226
|
|
7,549
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Operations and maintenance
|
69,746
|
|
65,390
|
|
4,356
|
|
212,319
|
|
201,105
|
|
11,214
|
|
||||||
Depreciation and amortization
|
21,564
|
|
20,937
|
|
627
|
|
64,288
|
|
62,658
|
|
1,630
|
|
||||||
Total operating expenses
|
91,310
|
|
86,327
|
|
4,983
|
|
276,607
|
|
263,763
|
|
12,844
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Operating income
|
4,240
|
|
11,274
|
|
(7,034
|
)
|
116,168
|
|
121,463
|
|
(5,295
|
)
|
||||||
|
|
|
|
|
|
|
||||||||||||
Interest expense, net
|
(20,433
|
)
|
(19,527
|
)
|
(906
|
)
|
(59,456
|
)
|
(58,919
|
)
|
(537
|
)
|
||||||
Other income (expense), net
|
(478
|
)
|
(294
|
)
|
(184
|
)
|
(1,239
|
)
|
(342
|
)
|
(897
|
)
|
||||||
Income tax benefit (expense)
|
3,394
|
|
4,218
|
|
(824
|
)
|
37,709
|
|
(20,686
|
)
|
58,395
|
|
||||||
Net income (loss)
|
(13,277
|
)
|
(4,329
|
)
|
(8,948
|
)
|
93,182
|
|
41,516
|
|
51,666
|
|
||||||
Net (income) loss attributable to noncontrolling interest
|
—
|
|
—
|
|
—
|
|
—
|
|
(107
|
)
|
107
|
|
||||||
Net income (loss) available for common stock
|
$
|
(13,277
|
)
|
$
|
(4,329
|
)
|
$
|
(8,948
|
)
|
$
|
93,182
|
|
$
|
41,409
|
|
$
|
51,773
|
|
(a)
|
The three and nine months ended September 30, 2018 include certain non-utility trading activities which are reported on a net basis. These trading activities are presented on a gross basis in the prior year. This change in presentation had no impact on gross margin.
|
(b)
|
Non-GAAP measure
|
(a)
|
Non-GAAP measure
|
(a)
|
Non-GAAP measure
|
|
|
Gas Revenue (in thousands)
|
|
Gross Margin
(a)
(in thousands)
|
||||||||||||||||||||||
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||||||
|
|
2018
|
2017
|
2018
|
2017
|
|
2018
|
2017
|
2018
|
2017
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Residential
|
|
$
|
58,221
|
|
$
|
57,804
|
|
$
|
383,972
|
|
$
|
344,407
|
|
|
$
|
42,598
|
|
$
|
42,012
|
|
$
|
192,072
|
|
$
|
182,256
|
|
Commercial
|
|
19,639
|
|
21,366
|
|
148,675
|
|
134,156
|
|
|
10,880
|
|
11,097
|
|
57,890
|
|
54,931
|
|
||||||||
Industrial
|
|
8,258
|
|
9,472
|
|
20,805
|
|
18,699
|
|
|
2,028
|
|
2,157
|
|
5,341
|
|
4,665
|
|
||||||||
Other
(b)
|
|
487
|
|
2,099
|
|
(6,789
|
)
|
6,363
|
|
|
487
|
|
2,099
|
|
(6,789
|
)
|
6,363
|
|
||||||||
Total Distribution
|
|
86,605
|
|
90,741
|
|
546,663
|
|
503,625
|
|
|
55,993
|
|
57,365
|
|
248,514
|
|
248,215
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Transportation and Transmission
|
|
30,465
|
|
32,469
|
|
101,887
|
|
99,120
|
|
|
30,465
|
|
32,470
|
|
101,887
|
|
99,121
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total Regulated
|
|
117,070
|
|
123,210
|
|
648,550
|
|
602,745
|
|
|
86,458
|
|
89,835
|
|
350,401
|
|
347,336
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-regulated Services
|
|
14,606
|
|
19,684
|
|
58,090
|
|
71,506
|
|
|
9,092
|
|
7,766
|
|
42,374
|
|
37,890
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total Gas Revenue & Gross Margin
|
|
$
|
131,676
|
|
$
|
142,894
|
|
$
|
706,640
|
|
$
|
674,251
|
|
|
$
|
95,550
|
|
$
|
97,601
|
|
$
|
392,775
|
|
$
|
385,226
|
|
(a)
|
Non-GAAP measure
|
(b)
|
Includes
current year reserve to revenue to reflect the reduction of the lower federal income tax rate from the TCJA on our existing rate tariffs.
|
|
|
Revenue (in thousands)
|
|
Gross Margin
(a)
(in thousands)
|
||||||||||||||||||||||
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||||||||
|
|
2018
|
2017
|
2018
|
2017
|
|
2018
|
2017
|
2018
|
2017
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Arkansas
|
|
$
|
18,743
|
|
$
|
19,276
|
|
$
|
116,226
|
|
$
|
104,519
|
|
|
$
|
13,415
|
|
$
|
13,485
|
|
$
|
65,803
|
|
$
|
66,362
|
|
Colorado
|
|
22,362
|
|
21,823
|
|
125,898
|
|
120,667
|
|
|
15,210
|
|
16,068
|
|
66,917
|
|
69,241
|
|
||||||||
Nebraska
|
|
40,553
|
|
47,577
|
|
196,307
|
|
191,288
|
|
|
31,264
|
|
33,290
|
|
117,925
|
|
112,418
|
|
||||||||
Iowa
|
|
16,982
|
|
17,709
|
|
111,968
|
|
98,619
|
|
|
12,556
|
|
12,564
|
|
49,630
|
|
48,278
|
|
||||||||
Kansas
|
|
18,497
|
|
20,114
|
|
81,880
|
|
77,389
|
|
|
11,129
|
|
11,207
|
|
40,896
|
|
39,810
|
|
||||||||
Wyoming
|
|
14,539
|
|
16,395
|
|
74,361
|
|
81,769
|
|
|
11,976
|
|
10,987
|
|
51,604
|
|
49,117
|
|
||||||||
Total Gas Revenue & Gross Margin
|
|
$
|
131,676
|
|
$
|
142,894
|
|
$
|
706,640
|
|
$
|
674,251
|
|
|
$
|
95,550
|
|
$
|
97,601
|
|
$
|
392,775
|
|
$
|
385,226
|
|
(a)
|
Non-GAAP measure
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||
Gas Utilities Quantities Sold & Transported (Dth)
|
2018
|
2017
|
2018
|
2017
|
||||
|
|
|
|
|
||||
Residential
|
3,708,196
|
|
3,682,944
|
|
42,642,021
|
|
36,052,414
|
|
Commercial
|
2,278,304
|
|
2,445,847
|
|
20,842,996
|
|
18,111,118
|
|
Industrial
|
2,304,098
|
|
2,722,173
|
|
5,235,417
|
|
4,690,092
|
|
Total Distribution Quantities Sold
|
8,290,598
|
|
8,850,964
|
|
68,720,434
|
|
58,853,624
|
|
|
|
|
|
|
||||
Transportation and Transmission
|
29,808,567
|
|
30,577,487
|
|
107,388,321
|
|
102,314,665
|
|
|
|
|
|
|
||||
Total Quantities Sold & Transported
|
38,099,165
|
|
39,428,451
|
|
176,108,755
|
|
161,168,289
|
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||
Gas Utilities Quantities Sold & Transported (Dth)
|
2018
|
2017
|
2018
|
2017
|
||||
|
|
|
|
|
||||
Arkansas
|
4,022,089
|
|
3,950,107
|
|
21,183,322
|
|
18,232,131
|
|
Colorado
|
2,893,029
|
|
3,111,653
|
|
19,301,834
|
|
19,156,708
|
|
Nebraska
|
13,831,306
|
|
14,620,729
|
|
58,223,856
|
|
52,802,084
|
|
Iowa
|
5,595,205
|
|
5,345,911
|
|
28,527,522
|
|
25,472,681
|
|
Kansas
|
6,164,821
|
|
7,270,229
|
|
23,391,905
|
|
20,975,597
|
|
Wyoming
|
5,592,715
|
|
5,129,822
|
|
25,480,316
|
|
24,529,088
|
|
Total Quantities Sold & Transported
|
38,099,165
|
|
39,428,451
|
|
176,108,755
|
|
161,168,289
|
|
|
Three Months Ended September 30,
|
||||||||
Degree Days
|
2018
|
|
|
|
2017
|
||||
Heating Degree Days:
|
Actual
|
|
Variance
from 30-Year
Average
|
|
Actual Variance to Prior Year
|
|
Actual
|
|
Variance
from 30-Year
Average
|
Arkansas
(a)
|
12
|
|
(72)%
|
|
(20)%
|
|
15
|
|
(66)%
|
Colorado
|
109
|
|
(49)%
|
|
(42)%
|
|
187
|
|
(13)%
|
Nebraska
|
101
|
|
(7)%
|
|
53%
|
|
66
|
|
(40)%
|
Iowa
|
128
|
|
(7)%
|
|
42%
|
|
90
|
|
(35)%
|
Kansas
(a)
|
54
|
|
(2)%
|
|
46%
|
|
37
|
|
(32)%
|
Wyoming
|
236
|
|
(23)%
|
|
(23)%
|
|
307
|
|
1%
|
Combined
(b)
|
109
|
|
(27)%
|
|
(7)%
|
|
117
|
|
(22)%
|
|
|
|
|
|
|
|
|
|
|
||||
|
Nine Months Ended September 30,
|
||||||||||||
Degree Days
|
2018
|
|
|
|
2017
|
||||||||
Heating Degree Days:
|
Actual
|
|
Variance
from 30-Year
Average
|
|
Actual Variance to Prior Year
|
|
Actual
|
|
Variance
from 30-Year
Average
|
||||
Arkansas
(a)
|
2,460
|
|
|
(1
|
)%
|
|
35%
|
|
1,826
|
|
|
(26
|
)%
|
Colorado
|
3,548
|
|
|
(14
|
)%
|
|
—%
|
|
3,541
|
|
|
(14
|
)%
|
Nebraska
|
4,016
|
|
|
6
|
%
|
|
22%
|
|
3,280
|
|
|
(13
|
)%
|
Iowa
|
4,460
|
|
|
6
|
%
|
|
22%
|
|
3,641
|
|
|
(13
|
)%
|
Kansas
(a)
|
3,032
|
|
|
2
|
%
|
|
17%
|
|
2,584
|
|
|
(13
|
)%
|
Wyoming
|
4,552
|
|
|
(4
|
)%
|
|
2%
|
|
4,468
|
|
|
(5
|
)%
|
Combined
(b)
|
4,008
|
|
|
—
|
%
|
|
14%
|
|
3,521
|
|
|
(12
|
)%
|
(a)
|
Arkansas has a weather normalization mechanism in effect during the months of November through April for customers with residential and certain business rate schedules. Kansas Gas has a weather normalization mechanism within its residential and business rate structure. The weather normalization mechanism in Arkansas differs from that in Kansas in that it only uses one location to calculate the weather, compared to Kansas, which uses multiple locations. The weather normalization mechanisms in both Arkansas and Kansas minimize weather impact on gross margins.
|
(b)
|
The combined heating degree days are calculated based on a weighted average of total customers by state excluding Kansas Gas due to its weather normalization mechanism. Arkansas Gas is partially excluded based on the weather normalization mechanism in effect from November through April.
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||
|
2018
|
2017
|
Variance
|
2018
|
2017
|
Variance
|
||||||||||||
|
(in thousands)
|
|||||||||||||||||
Revenue
(a)
|
$
|
23,603
|
|
$
|
22,927
|
|
$
|
676
|
|
$
|
68,590
|
|
$
|
68,289
|
|
$
|
301
|
|
|
|
|
|
|
|
|
||||||||||||
Operations and maintenance
|
7,434
|
|
7,646
|
|
(212
|
)
|
25,520
|
|
24,228
|
|
1,292
|
|
||||||
Depreciation and amortization
(a)
|
1,692
|
|
1,036
|
|
656
|
|
4,927
|
|
3,312
|
|
1,615
|
|
||||||
Total operating expense
|
9,126
|
|
8,682
|
|
444
|
|
30,447
|
|
27,540
|
|
2,907
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Operating income
|
14,477
|
|
14,245
|
|
232
|
|
38,143
|
|
40,749
|
|
(2,606
|
)
|
||||||
|
|
|
|
|
|
|
||||||||||||
Interest expense, net
|
(1,264
|
)
|
(724
|
)
|
(540
|
)
|
(3,753
|
)
|
(2,015
|
)
|
(1,738
|
)
|
||||||
Other income (expense), net
|
(34
|
)
|
(5
|
)
|
(29
|
)
|
(75
|
)
|
(36
|
)
|
(39
|
)
|
||||||
Income tax (expense) benefit
|
(2,494
|
)
|
(3,426
|
)
|
932
|
|
(6,549
|
)
|
(10,114
|
)
|
3,565
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Net income
|
10,685
|
|
10,090
|
|
595
|
|
27,766
|
|
28,584
|
|
(818
|
)
|
||||||
Net income attributable to noncontrolling interest
|
(3,994
|
)
|
(3,935
|
)
|
(59
|
)
|
(10,447
|
)
|
(10,567
|
)
|
120
|
|
||||||
Net income available for common stock
|
$
|
6,691
|
|
$
|
6,155
|
|
$
|
536
|
|
$
|
17,319
|
|
$
|
18,017
|
|
$
|
(698
|
)
|
(a)
|
The generating facility located in Pueblo, Colorado is accounted for as a capital lease under GAAP; as such, revenue and depreciation expense are impacted by the accounting for this lease. Under the lease, the original cost of the facility is recorded at Colorado Electric and is being depreciated by Colorado Electric for segment reporting purposes.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
2017
|
|
2018
|
2017
|
||||
Quantities Sold, Generated and Purchased
(MWh)
(a)
|
|
|
|
|
|
||||
Sold
|
|
|
|
|
|
||||
Black Hills Colorado IPP
(b)
|
304,102
|
|
256,895
|
|
|
745,365
|
|
725,919
|
|
Black Hills Wyoming
(c)
|
160,011
|
|
163,690
|
|
|
470,072
|
|
476,659
|
|
Total Sold
|
464,113
|
|
420,585
|
|
|
1,215,437
|
|
1,202,578
|
|
|
|
|
|
|
|
||||
Generated
|
|
|
|
|
|
||||
Black Hills Colorado IPP
(b)
|
304,102
|
|
256,895
|
|
|
745,365
|
|
725,919
|
|
Black Hills Wyoming
(c)
|
144,476
|
|
140,081
|
|
|
407,324
|
|
407,775
|
|
Total Generated
|
448,578
|
|
396,976
|
|
|
1,152,689
|
|
1,133,694
|
|
|
|
|
|
|
|
||||
Purchased
|
|
|
|
|
|
||||
Black Hills Colorado IPP
|
—
|
|
—
|
|
|
—
|
|
—
|
|
Black Hills Wyoming
(c)
|
16,685
|
|
20,246
|
|
|
65,724
|
|
52,463
|
|
Total Purchased
|
16,685
|
|
20,246
|
|
|
65,724
|
|
52,463
|
|
(a)
|
Company uses and losses are not included in the quantities sold, generated, and purchased.
|
(b)
|
Decrease from the prior year is a result of the impact of Colorado Electric’s wind generation replacing natural-gas generation.
|
(c)
|
Under the 20-year economy energy PPA with the City of Gillette effective September 2014, Black Hills Wyoming purchases energy on behalf of the City of Gillette and sells that energy to the City of Gillette. MWh sold may not equal MWh generated and purchased due to a dispatch agreement Black Hills Wyoming has with South Dakota Electric to cover energy imbalances.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
2017
|
|
2018
|
2017
|
||||
Contracted power plant fleet availability:
|
|
|
|
|
|
||||
Coal-fired plant
|
97.9
|
%
|
97.1
|
%
|
|
93.9
|
%
|
95.8
|
%
|
Natural gas-fired plants
|
99.3
|
%
|
99.2
|
%
|
|
99.4
|
%
|
99.1
|
%
|
Total availability
|
98.9
|
%
|
98.7
|
%
|
|
98.0
|
%
|
98.3
|
%
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||
|
2018
|
2017
|
Variance
|
2018
|
2017
|
Variance
|
||||||||||||
|
(in thousands)
|
|||||||||||||||||
Revenue
|
$
|
17,301
|
|
$
|
17,493
|
|
$
|
(192
|
)
|
$
|
51,328
|
|
$
|
48,985
|
|
$
|
2,343
|
|
|
|
|
|
|
|
|
||||||||||||
Operations and maintenance
|
10,761
|
|
11,235
|
|
(474
|
)
|
32,807
|
|
32,162
|
|
645
|
|
||||||
Depreciation, depletion and amortization
|
1,989
|
|
2,004
|
|
(15
|
)
|
5,874
|
|
6,231
|
|
(357
|
)
|
||||||
Total operating expenses
|
12,750
|
|
13,239
|
|
(489
|
)
|
38,681
|
|
38,393
|
|
288
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Operating income
|
4,551
|
|
4,254
|
|
297
|
|
12,647
|
|
10,592
|
|
2,055
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Interest expense, net
|
(51
|
)
|
(47
|
)
|
(4
|
)
|
(384
|
)
|
(146
|
)
|
(238
|
)
|
||||||
Other income (expense), net
|
(70
|
)
|
567
|
|
(637
|
)
|
(190
|
)
|
1,644
|
|
(1,834
|
)
|
||||||
Income tax benefit (expense)
|
(858
|
)
|
(1,297
|
)
|
439
|
|
(2,512
|
)
|
(3,042
|
)
|
530
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
3,572
|
|
$
|
3,477
|
|
$
|
95
|
|
$
|
9,561
|
|
$
|
9,048
|
|
$
|
513
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||
|
2018
|
2017
|
Variance
|
2018
|
2017
|
Variance
|
||||||||||||
|
(in thousands)
|
|||||||||||||||||
Operating (loss)
(a)
|
$
|
(16
|
)
|
$
|
(1,401
|
)
|
$
|
1,385
|
|
$
|
(2,301
|
)
|
$
|
(7,183
|
)
|
$
|
4,882
|
|
|
|
|
|
|
|
|
||||||||||||
Other income (expense):
|
|
|
|
|
|
|
||||||||||||
Interest (expense) income, net
(a)
|
(626
|
)
|
(1,028
|
)
|
402
|
|
(1,810
|
)
|
(2,331
|
)
|
521
|
|
||||||
Other income (expense), net
|
520
|
|
(31
|
)
|
551
|
|
702
|
|
(869
|
)
|
1,571
|
|
||||||
Income tax benefit (expense)
|
(635
|
)
|
(1,204
|
)
|
569
|
|
(2,468
|
)
|
3,389
|
|
(5,857
|
)
|
||||||
|
|
|
|
|
|
|
||||||||||||
Net income (loss)
|
$
|
(757
|
)
|
$
|
(3,664
|
)
|
$
|
2,907
|
|
$
|
(5,877
|
)
|
$
|
(6,994
|
)
|
$
|
1,117
|
|
(a)
|
Includes certain general and administrative expenses and interest expenses that are not reported as discontinued operations in 2017.
|
Cash provided by (used in):
|
2018
|
2017
|
Increase (Decrease)
|
||||||
Operating activities
|
$
|
378,722
|
|
$
|
319,430
|
|
$
|
59,292
|
|
Investing activities
|
$
|
(281,771
|
)
|
$
|
(255,978
|
)
|
$
|
(25,793
|
)
|
Financing activities
|
$
|
(101,949
|
)
|
$
|
(63,112
|
)
|
$
|
(38,837
|
)
|
•
|
Cash earnings (income from continuing operations plus non-cash adjustments) were
$14 million
lower for the
nine months ended September 30, 2018
compared to the same period in the prior year;
|
•
|
Net cash
inflows
from changes in operating assets and liabilities were
$29 million
for the
nine months ended September 30, 2018
, compared to net cash outflows of
$60 million
in the same period in the prior year. This
$90 million
increase was primarily due to:
|
◦
|
Cash inflows decreased by approximately
$21 million
primarily as a result of increases in pre-paid tax assets and lower collections of accounts receivable, partially offset by lower natural gas in storage for the
nine months ended September 30, 2018
compared to the same period in the prior year;
|
◦
|
Cash outflows decreased by approximately
$26 million
as a result of increases in accounts payable and accrued liabilities driven by changes in prior year accrued interest and contract payments and other working capital requirements;
|
◦
|
Cash inflows increased by approximately
$66 million
as a result of changes in our current regulatory assets and liabilities driven by differences in fuel cost adjustments and cash collected from customers that will be refunded due to the TCJA tax rate change; and
|
◦
|
Net cash outflows decreased by $15 million due to additional pension contributions made in the prior year.
|
•
|
Capital expenditures of approximately
$278 million
for the
nine months ended September 30, 2018
compared to
$239 million
for the same period in the prior year. Higher current year expenditures at our gas utilities, mining and power generation segments are partially offset by higher prior year expenditures at our electric utilities which included completion of the second segment of the 144-mile long Teckla-Lange transmission line and construction of our Horizon Point facility.
|
•
|
A
$35 million
change in net cash provided by investing activities from discontinued operations primarily due to the sale of assets held for sale partially offset by a
$24 million
investment.
|
•
|
Long–term borrowings increased due to the issuance of $400 million principal amount senior secured notes in 2018, a portion of which were issued in exchange for $299 million principal amount of our RSNs due 2028 (which were immediately retired) and a portion of which were sold to the public with $99 million of net proceeds used to pay down short-term debt;
|
•
|
We amended and restated our $300 million unsecured term loan due August 2019;
|
•
|
Prior year net short-term borrowings of $129 million offset by prior year long-term debt repayments of $104 million;
|
•
|
$5.0 million of higher current year dividend payments; and
|
•
|
Increased payments for other financing activities of approximately $3.7 million driven primarily by the July 30, 2018 and August 17, 2018 debt transactions.
|
|
|
Current
|
Revolver Borrowings at
|
CP Program Borrowings at
|
Letters of Credit at
|
Available Capacity at
|
||||||||||
Credit Facility
|
Expiration
|
Capacity
|
September 30, 2018
|
September 30, 2018
|
September 30, 2018
|
September 30, 2018
|
||||||||||
Revolving Credit Facility
|
July 30, 2023
|
$
|
750
|
|
$
|
—
|
|
$
|
112
|
|
$
|
15
|
|
$
|
623
|
|
|
For the Nine Months Ended September 30, 2018
|
||
Maximum amount outstanding - commercial paper (based on daily outstanding balances)
|
$
|
231
|
|
Maximum amount outstanding - revolving credit facility (based on daily outstanding balances)
|
$
|
—
|
|
Average amount outstanding - commercial paper (based on daily outstanding balances)
|
$
|
135
|
|
Average amount outstanding - revolving credit facility (based on daily outstanding balances)
|
$
|
—
|
|
Weighted average interest rates - commercial paper
|
2.16
|
%
|
|
Weighted average interest rates - revolving credit facility
|
—
|
%
|
•
|
Short-term borrowings from our CP Program.
|
•
|
On August 17, 2018, we completed a public debt offering of $400 million principal amount, 4.350% senior unsecured notes due 2033. The proceeds were used to repay the $299 million principal amount of our RSNs due 2028 and pay down short-term debt. Through this offering, we successfully remarketed the $299 million principal amount of the existing subordinated notes, which were originally issued as a part of the Company's Equity Units on November 23, 2015. See Note
9
for more information.
|
•
|
On July 30, 2018, we amended and restated our unsecured term loan due August 2019. This amended and restated term loan, with
$300 million
outstanding at September 30, 2018, will now mature July 30, 2020 and has substantially similar terms and covenants as the amended and restated Revolving Credit Facility. See Note
9
for more information.
|
•
|
Evaluating refinancing options for our $200 million senior notes due July 15, 2020 and the $300 million senior notes due July 30, 2020.
|
(a)
|
On August 9, 2018, S&P upgraded to BBB+ rating and revised the outlook to Stable.
|
(b)
|
On December 12, 2017, Moody’s affirmed our Baa2 rating and maintained a Stable outlook.
|
(c)
|
On October 11, 2018, Fitch affirmed BBB+ rating and maintained a Stable outlook.
|
(a)
|
On August 9, 2018, S&P upgraded to A rating.
|
(b)
|
On July 19, 2018, Fitch affirmed A rating.
|
|
Expenditures for the
|
|
Total
|
|
Total
|
|
Total
|
||||||||
|
Nine Months Ended September 30, 2018
(a)
|
|
2018 Planned
Expenditures
(b)
|
|
2019 Planned
Expenditures
|
|
2020 Planned
Expenditures
|
||||||||
Electric Utilities
|
$
|
105,295
|
|
|
$
|
141,000
|
|
|
$
|
192,000
|
|
|
$
|
165,000
|
|
Gas Utilities
(c)
|
172,599
|
|
|
270,000
|
|
|
374,000
|
|
|
273,000
|
|
||||
Power Generation
(d)
|
4,350
|
|
|
46,000
|
|
|
60,000
|
|
|
9,000
|
|
||||
Mining
|
11,982
|
|
|
19,000
|
|
|
8,000
|
|
|
7,000
|
|
||||
Corporate and Other
|
8,426
|
|
|
12,000
|
|
|
17,000
|
|
|
21,000
|
|
||||
|
$
|
302,652
|
|
|
$
|
488,000
|
|
|
$
|
651,000
|
|
|
$
|
475,000
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
||||||
Net derivative (liabilities) assets
|
$
|
(1,869
|
)
|
|
$
|
(6,644
|
)
|
|
$
|
(6,541
|
)
|
Cash collateral offset in Derivatives
|
4,308
|
|
|
7,694
|
|
|
5,452
|
|
|||
Cash collateral included in Other current assets
|
4,677
|
|
|
562
|
|
|
2,841
|
|
|||
Net asset (liability) position
|
$
|
7,116
|
|
|
$
|
1,612
|
|
|
$
|
1,752
|
|
ITEM 1.
|
Legal Proceedings
|
ITEM 1A.
|
Risk Factors
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
|
|
|
|
|
|
|
ITEM 4.
|
Mine Safety Disclosures
|
ITEM 5.
|
Other Information
|
ITEM 6.
|
Exhibits
|
Exhibit Number
|
Description
|
|
|
Exhibit 3.1*
|
|
|
|
Exhibit 3.2*
|
|
|
|
Exhibit 4.1*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 4.2*
|
|
|
|
|
|
|
|
|
|
Exhibit 4.3*
|
|
|
|
|
|
|
|
Exhibit 4.4*
|
|
|
|
|
|
Exhibit 4.5*
|
|
|
|
Exhibit 4.6*
|
|
|
|
Exhibit 10.1*
|
|
|
|
Exhibit 10.2*
|
|
|
|
Exhibit 31.1
|
|
|
|
Exhibit 31.2
|
|
|
|
Exhibit 32.1
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Exhibit 32.2
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Exhibit 95
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Exhibit 101
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Financial Statements for XBRL Format.
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*
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Previously filed as part of the filing indicated and incorporated by reference herein.
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/s/ David R. Emery
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David R. Emery, Chairman and
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Chief Executive Officer
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/s/ Richard W. Kinzley
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Richard W. Kinzley, Senior Vice President and
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Chief Financial Officer
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Dated:
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November 6, 2018
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1 Year Black Hills Corp. (Holding Co.) Chart |
1 Month Black Hills Corp. (Holding Co.) Chart |
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