Black Hills Corporation, (BKH)
Q2 2010 Earnings Call
August 6, 2010 11:00 am ET
David Emery - Chairman of the Board, President and Chief Executive Officer
Anthony Cleberg - Executive Vice President and Chief Financial Officer
Jason Ketchum - Director of Investor Relations
Ella Vuernick - RBC Capital Markets
Gordon Howald - East Shore Partners
Previous Statements by BKH
» Black Hills Corp. Q1 2010 Earnings Call Transcript
» Black Hills Corp. Q4 2009 Earnings Call Transcript
» Black Hills Corporation Q4 2008 Earnings Call Transcript
Good day ladies and gentlemen and welcome to the Black Hills Corporation 2010 second quarter earnings conference call. My name is [Latasha] and I will be your coordinator for today.
At this time all participants are in a listen-only mode. Following the prepared remarks, there will be a question-and-answer session. (Operator Instructions)
As a reminder this conference is being recorded for replay purposes. I would now like to turn the presentation to Mr. Jason Ketchum, Director of Investor Relations of Black Hills Corporation, please proceed sir.
Thank you [Latasha], good morning everyone and welcome to the Black Hills second quarter 2010 earnings call. With me today are Dave Emery, Chairman and CEO and Tony Cleberg, CFO.
Before I turn the call over I need to remind you that during the course of this call some of the comments we make may contain forward-looking statements as defined by the Securities and Exchange Commission and there are a number of uncertainties [Indiscernible].
Although we believe that our expectations and beliefs are based on reasonable assumptions, actual results may differ materially. We direct you to our earnings release slide 2 of the Investor Presentation on our website and our most recent form 10-K and form 10-Q filed with the Securities and Exchange Commission for a list of some of the factors that could cause future results to differ materially from our expectations.
I will now turn the call over to Dave Emery.
David R. Emery
Alright, thank you Jason. Good morning everyone thanks for joining us. Before we discuss the quarter I’d like to first take a minute or two and explain some of the formatting changes we’ve made to our quarter earnings press release.
For the past several years, as all of you are aware we’ve been extremely busy at Black Hills and as a result we’ve had a lot of--I’ll call it special activities so buying, selling, major construction projects, [Indiscernible] integration activities and the like. We’ve received a lot of feedback from you, our investors stating that all of those special or unique, one time non-recurring type of activities make it very hard to determine the actual performance of our ongoing operating businesses.
Last year, Tony in his financial portion of the presentation started including a reconciliation of those special items and we received a lot of positive feedback on that reconciliation that we’d included in the web cast presentation portion of our materials.
So you may have noticed that yesterday in the press release we made a change for the second quarter and that’s one that one that we intend to continue going forward in our quarterly earnings releases. We will present the adjusted earnings numbers first.
They are non-GAAP measure but we do believe they give a more meaningful representation of the ongoing earnings potential of the business. Then we’ll also of course provide the GAAP numbers and in additional we’ll provide a table with the specific reconciliation of the GAAP to non-GAAP or adjusted numbers.
You can see the details of all the special items and their related impact on earnings. Obviously the intent of this change in format is to make our earnings numbers more transparent and easily understood. As usual we love to have feedback on our materials so if you have any feedback on the change please let Jason Ketchum know if you have any feedback or additional suggestions.
Now I’ll move on to the presentation itself and for those of you that have a copy of the web cast presentation we’ll try to refer to page numbers as we go through and make it a little easier to follow along.
Starting on slide five, 2010 second quarter was a very good quarter for us from an earnings perspective particularly looking at the as-adjusted earnings are slightly netter than last year and certainly in line with our expectations. Despite a couple of negatives, notably some extended plant outages at our [Indiscernible] and Wygen power plants and combined with continued challenges in energy marketing and oil and gas.
If you look at the quarter from our highlights or key accomplishments perspective it really was a fantastic quarter. We made significant progress on a lot of our strategic initiatives both during the quarter and a few subsequent to quarter end.
Moving on to utility highlight on slide six, on the electric side our Wygen III plant began commercial operations in April 1
, 2010 which we talked about on our last call. That project was ahead of schedule and on the budget. We have also completed two rate cases related to the planned addition, one in Wyoming and one in South Dakota and those were very successful.
On the 14
of July we closed on the sale of a 23% ownership in that plant to the city of Gillette, Wyoming and received $62 million in proceeds from that sale.
In Colorado we have two power plant projects ongoing there. One is an electric utility project; the other is an IPP or non-regulated power plant to serve our electric utility there. In July on the 22
we received our air permit and have commenced full scale construction on that project. I’ll talk about some of the details on that one a little bit more here later.