Company Overview - Black Hills Corporation (NYSE: BKH) serves 1.35 million natural gas and electricity customers, operating as a holding company for residential and commercial gas utilities [1] - The company is experiencing growth in its smaller but valuable electric generation and utilities segments, alongside its transmission and generation operations [1] Leadership and Expertise - Laura Starks, founder and CEO of Starks Energy Economics, LLC, has a background in chemical engineering and an MBA with a concentration in finance, which she has utilized for personal investments and insights on energy companies [1] - Starks' coverage includes various sectors such as utilities, independent power producers, energy service companies, contractors, and all segments of oil and natural gas: upstream, midstream, and downstream [1]

Black Hills (BKH) Q2 2025 Earnings Call July 31, 2025 11:00 AM ET Company ParticipantsSal Diaz - Director - IRLinden Evans - President & CEOKimberly Nooney - CFO & SVPMarne Jones - SVP & Chief Utility OfficerAndrew Weisel - DirectorConference Call ParticipantsChris Ellinghaus - MD & Senior Equity Analyst - Electric, Natural Gas Utilities & Alternative EnergyOperatorGood day and thank you for standing by. Welcome to the Second Quarter twenty twenty five Black Hills Corporation Earnings Conference Call. At th ...

Financial Data and Key Metrics Changes - The company reported earnings per share (EPS) of $0.38 for Q2 2025, up from $0.33 in Q2 2024, reflecting a year-over-year growth of approximately 15% [14] - Year-to-date EPS increased to $2.24 from $2.19 compared to the same period last year, driven by successful execution of regulatory strategies [16] - The company reaffirmed its full-year earnings guidance range of $4 to $4.2 per share, indicating a 5% growth rate at the midpoint over 2024 EPS [10][20] Business Line Data and Key Metrics Changes - New margins contributed $0.22 per share, including $0.17 from new rates and rider recovery, which offset higher operating expenses and financing costs [15] - The company experienced a positive weather impact of $0.03 per share compared to Q2 2024, although weather drove $0.04 per share of unfavorability during Q2 2025 [15] Market Data and Key Metrics Changes - Wyoming Electric recorded four distinct all-time peak loads during the first half of the year, with the latest peak of 379 megawatts in June representing a 21% increase over the peak recorded in 2024 [7] - The company noted strong customer growth driven by demand from data centers and blockchain customers, contributing solid earnings [6] Company Strategy and Development Direction - The company is focused on delivering financial commitments, executing regulatory and growth initiatives, and providing excellent operational performance [5] - A $1 billion capital plan is in place to support key projects that address the growing needs of customers [5] - The company is on track to achieve its long-term EPS growth target of 4% to 6% starting in 2026, supported by a $4.7 billion capital plan [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the upper half of the long-term EPS growth target, driven by new rates, regulatory efforts, and customer growth [20] - The company is actively engaging with potential data center customers, indicating a robust pipeline of demand that will further drive revenue growth [13] Other Important Information - The company has established an emergency public safety power shutoff program to mitigate wildfire risk across its electric utilities [8][30] - The company maintains a strong balance sheet with a focus on sustaining credit quality and liquidity, with over $600 million available under its revolving credit facility [18] Q&A Session Summary Question: Industrial growth for the quarter was 19%. What is the outlook for digital growth? - Management indicated that while significant growth is expected from data centers and blockchain, it may not be strictly linear due to varying ramp rates [35][38] Question: Was the new announcement for Wyoming part of the existing pipeline? - Management confirmed that the new announcement is incremental to the existing pipeline and will be included in future load forecasts once agreements are executed [39][40] Question: What is driving the expectation for upper half growth in the 4% to 6% range? - Management highlighted several drivers, including capital projects, regulatory efforts, and customer growth, particularly from data centers [55] Question: Can you provide details on unplanned outages and their impact? - Management confirmed that all generation is currently online and operational, and the financial impact of unplanned outages is considered immaterial [58][60]

[Forward-Looking Information](index=7&type=section&id=Forward-Looking%20Information) This report contains forward-looking statements based on current expectations, and actual results may differ - This report contains forward-looking statements based on current expectations and projections; **actual results may differ** due to various risks and uncertainties[13](index=13&type=chunk) - Key risks include the ability to obtain adequate cost recovery, complete capital programs, execute strategy and financing plans, effects of interest rates and inflation, and impacts of governmental regulation and supply chain disruptions[15](index=15&type=chunk) [PART I. FINANCIAL INFORMATION](index=8&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=8&type=section&id=Item%201.%20Financial%20Statements%20-%20unaudited) This section presents the unaudited consolidated financial statements for the quarterly period ended June 30, 2025 [Consolidated Statements of Income](index=8&type=section&id=Consolidated%20Statements%20of%20Income) The company reported increased revenue and net income for the three and six months ended June 30, 2025 Consolidated Income Statement Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $439.0 | $402.6 | $1,244.2 | $1,129.0 | | **Operating Income** | $82.5 | $70.6 | $287.4 | $264.0 | | **Net Income Available for Common Stock** | $27.5 | $22.8 | $161.7 | $150.6 | | **Diluted EPS** | $0.38 | $0.33 | $2.24 | $2.19 | [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) Total assets and equity increased as of June 30, 2025, driven by PP&E growth and retained earnings Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $608.4 | $742.3 | | **Total Property, Plant and Equipment, net** | $7,860.4 | $7,629.9 | | **TOTAL ASSETS** | $10,091.6 | $10,022.6 | | **Total Current Liabilities** | $953.9 | $763.4 | | **Long-term Debt, net** | $3,952.4 | $4,250.2 | | **Total Equity** | $3,719.4 | $3,585.2 | | **TOTAL LIABILITIES AND TOTAL EQUITY** | $10,091.6 | $10,022.6 | [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased while investing cash use increased for the six months ended June 30, 2025 Six Months Ended June 30, Cash Flow Summary (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $416.4 | $464.0 | | **Net Cash used in Investing Activities** | $(376.2) | $(340.7) | | **Net Cash provided by (used in) Financing Activities** | $(47.8) | $415.4 | | **Net Change in Cash** | $(7.6) | $538.7 | [Note 2. Regulatory Matters](index=15&type=section&id=Note%202.%20Regulatory%20Matters) The company secured several favorable rate case decisions and has a new rate review pending in Nebraska - Colorado Electric received a final decision for a general rate increase, resulting in approximately **$17.5 million of new annual revenue**, effective March 22, 2025[39](index=39&type=chunk) - Iowa Gas received final approval for a settlement agreement generating **$15.0 million in new annual revenue**, with new rates effective January 1, 2025[40](index=40&type=chunk) - Kansas Gas received approval for a settlement generating **$10.8 million in new annual revenue**, effective August 1, 2025[41](index=41&type=chunk) - Nebraska Gas filed a rate review requesting **$34.9 million in new annual revenue**, with a decision expected in Q1 2026[42](index=42&type=chunk) [Note 5. Financing](index=18&type=section&id=Note%205.%20Financing) The company extended its credit facility, maintained covenant compliance, and utilized its ATM equity program - The maturity of the **$750 million Revolving Credit Facility** was extended to May 31, 2030; as of June 30, 2025, available capacity was **$622.8 million**[50](index=50&type=chunk) - The company was in compliance with its key financial covenant, with a Consolidated Indebtedness to Capitalization Ratio of **0.55 to 1.00**, below the maximum of 0.65 to 1.00[52](index=52&type=chunk) - On May 8, 2025, the At-the-Market (ATM) equity program was amended, resetting its size to **$400 million**; the company raised **$65.3 million (net)** through the ATM programs in the first six months of 2025[54](index=54&type=chunk)[55](index=55&type=chunk) [Note 11. Income Taxes](index=27&type=section&id=Note%2011.%20Income%20Taxes) The company sold Production Tax Credits and is evaluating the impact of newly enacted energy legislation - In January 2025, the company sold **$17.0 million of 2024-generated Production Tax Credits (PTCs)** to a third party under the IRA's transferability provision[91](index=91&type=chunk) - The **'One Big Beautiful Bill Act' (OBBBA)** was signed into law on July 4, 2025; while it rolls back some clean energy provisions, it does not repeal tax credit transferability and the company is evaluating its impact[93](index=93&type=chunk) [Note 12. Business Segment Information](index=27&type=section&id=Note%2012.%20Business%20Segment%20Information) The Gas Utilities segment drove operating income growth, while capital expenditures were led by Electric Utilities Operating Income by Segment - Six Months Ended June 30 (in millions) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | **Electric Utilities** | $103.3 | $110.9 | | **Gas Utilities** | $187.0 | $153.7 | | **Corporate and Other** | $(2.9) | $(0.6) | | **Total Operating Income** | $287.4 | $264.0 | Capital Expenditures by Segment - Six Months Ended June 30 (in millions) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | **Electric Utilities** | $211.8 | $185.6 | | **Gas Utilities** | $153.8 | $190.4 | | **Corporate and Other** | $4.3 | $4.8 | | **Total Capital Expenditures** | $369.9 | $380.8 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, strategic projects, liquidity, and capital expenditure plans [Recent Developments](index=32&type=section&id=Recent%20Developments) Key developments include new energy legislation, wildfire mitigation efforts, and ongoing strategic projects - Wyoming enacted wildfire mitigation legislation providing liability protections for utilities with approved plans; the company plans to file its plan in H2 2025[114](index=114&type=chunk) - Wyoming Electric set **four new all-time peak loads** in H1 2025, reaching **379 MW** on June 20, 2025, up from a previous peak of 314 MW[114](index=114&type=chunk) - The **Ready Wyoming transmission project** is on track for completion by year-end 2025[120](index=120&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Consolidated operating income increased, driven by strong performance in the Gas Utilities segment Consolidated Operating Income Variance (in millions) | Segment | Q2 2025 vs 2024 | YTD 2025 vs 2024 | | :--- | :--- | :--- | | **Electric Utilities** | $2.7 | $(7.6) | | **Gas Utilities** | $12.5 | $33.3 | | **Corporate and Other** | $(3.3) | $(2.3) | | **Total Operating Income** | $11.9 | $23.4 | - The increase in **Gas Utilities' operating income** was primarily due to new rates from rate reviews and favorable weather[122](index=122&type=chunk) - The decrease in **Electric Utilities' year-to-date operating income** was due to higher operating expenses and unplanned generation outages, which offset gains from new rates[122](index=122&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity and a stable capital structure while funding its capital expenditure plan Liquidity and Capital Structure (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Available Liquidity** | $630.9 | $628.8 | | **Total Debt** | $4,376.1 | $4,384.0 | | **Total Stockholders' Equity** | $3,636.1 | $3,501.5 | | **Debt to Capitalization** | 54.6% | 55.6% | Forecasted Capital Expenditures (in millions) | Year | 2025 | 2026 | 2027 | 2028 | 2029 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Forecast** | $1,002 | $859 | $822 | $1,089 | $909 | - Credit ratings were affirmed by S&P at **BBB+ (Stable)** and Moody's at **Baa2 (Stable)**[167](index=167&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There were no material changes to the company's previously disclosed market risk factors - There have been **no material changes** to market risk disclosures from the 2024 Annual Report on Form 10-K[177](index=177&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were deemed effective with no material changes in internal controls - The CEO and CFO concluded that **disclosure controls and procedures were effective** as of June 30, 2025[178](index=178&type=chunk) - **No material changes** to internal controls over financial reporting occurred during the quarter ended June 30, 2025[180](index=180&type=chunk) [PART II. OTHER INFORMATION](index=45&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) A key lawsuit was resolved in the company's favor without material financial impact - On May 12, 2025, a jury returned a verdict in favor of BHC and its subsidiaries in the **GT Resources, LLC lawsuit**, resolving the matter without material impact on the company's financial position[46](index=46&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) There were no material changes to previously disclosed risk factors - There are **no material changes** to the risk factors previously disclosed in the 2024 Annual Report on Form 10-K[182](index=182&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company acquired a small number of shares to cover tax obligations from vested equity awards - A total of **747 shares were acquired** during the quarter for tax withholding purposes related to equity compensation plans[183](index=183&type=chunk) [Item 4. Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety violation information is provided in Exhibit 95 of this report - Mine safety disclosure information is included in **Exhibit 95**[184](index=184&type=chunk) [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - **No directors or officers** adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[185](index=185&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and XBRL data

Financial Performance & Outlook - Black Hills Corp reaffirmed its full-year 2025 EPS guidance in the range of $400 to $420, reflecting approximately 5% year-over-year growth at the midpoint[7] - The company is targeting long-term EPS growth of 4% to 6%, planning to deliver in the upper half of this range starting in 2026, off a 2023 base of $375 per share[7,8] - Black Hills Corp is forecasting $1 billion in capital investment for 2025 and a total of $47 billion from 2025 to 2029[7] - The company targets a dividend payout ratio of 55% to 65%[7] Capital Investments & Growth Initiatives - Black Hills Corp plans to invest $47 billion in capital projects from 2025 to 2029, with key investment categories including customer growth, safety and system integrity, and electric generation and transmission[7,9,13] - The company is developing plans to serve more than 1 GW of total data center demand within the next 10 years, including 500 MW in the current plan by 2029, expecting data center EPS contribution to grow to more than 10% beginning in 2028[16] - The Ready Wyoming transmission project, a 260-mile electric transmission expansion costing $350 million, is on track for completion by year-end 2025[41,69] - The company obtained approval for a 99 MW dispatchable natural gas generation project (Lange II) in South Dakota, with an estimated investment of $280 million, expected to be in service in the second half of 2026[49,50,51] Regulatory & Reliability - A unanimous black box settlement was approved for Kansas Gas, providing $108 million in new annual revenues with new rates effective August 1, 2025[52] - Black Hills Corp is requesting recovery of $453 million of investments and inflationary impacts in Nebraska Gas application NG-124, with interim rates expected to be effective August 1, 2025[52]

[Financial Results and Highlights](index=1&type=section&id=Financial%20Results%20and%20Highlights) Black Hills Corp. reported strong Q2 2025 financial results, reaffirming its 2025 earnings guidance and advancing key capital projects [Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) Black Hills Corp. reported strong financial results for the second quarter of 2025, with diluted earnings per share (EPS) rising to $0.38 from $0.33 in the prior-year period, driven by new rates and rider recovery Q2 & H1 2025 Financial Results (in millions, except per share) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Operating Income** | $82.5 | $70.6 | $287.4 | $264.0 | | **Net income available for common stock** | $27.5 | $22.8 | $161.7 | $150.6 | | **Earnings per share, Diluted** | $0.38 | $0.33 | $2.24 | $2.19 | - The company is executing a **$1 billion** capital plan for the year and remains on track to achieve its 2025 earnings guidance, which represents **5% year-over-year growth** at the midpoint[2](index=2&type=chunk) - Key long-term growth projects are progressing, including the **$350 million** Ready Wyoming electric transmission project (completion by year-end 2025) and the **$280 million** Lange II generation project (in service H2 2026)[3](index=3&type=chunk) - The company forecasts that by 2028, **over 10% of its EPS** will come from serving data centers, with Meta's new Wyoming data center currently under construction[3](index=3&type=chunk) [Q2 2025 Highlights and Recent Updates](index=1&type=section&id=Q2%202025%20Highlights%20and%20Recent%20Updates) During the second quarter, the company reaffirmed its 2025 EPS guidance, established a new wildfire safety program, and achieved significant regulatory and operational milestones - Wyoming Electric experienced 19 consecutive years of increasing electric demand, recording four new all-time peak loads in H1 2025, culminating in a **379-megawatt peak** on June 20, 2025, a **21% increase** over the 2024 peak[5](index=5&type=chunk)[6](index=6&type=chunk) - An Emergency Public Safety Power Shutoff (PSPS) program was established across all three electric utilities to mitigate wildfire risk[5](index=5&type=chunk)[6](index=6&type=chunk) - Received approval for new rates at Kansas Gas, providing **$10.8 million** in new annual revenues[5](index=5&type=chunk)[9](index=9&type=chunk) - Obtained a Certificate of Public Convenience and Necessity (CPCN) for South Dakota Electric's **99-megawatt Lange II generation project**[5](index=5&type=chunk)[9](index=9&type=chunk) [Business Segment Updates](index=1&type=section&id=Business%20Segment%20Updates) The company's business segments are advancing major capital projects, securing favorable regulatory outcomes, and enhancing shareholder returns [Electric Utilities](index=1&type=section&id=Electric%20Utilities) The Electric Utilities segment is advancing major capital projects to enhance reliability and support growth, including the Ready Wyoming transmission project and the Lange II generation project - Construction continues on the 260-mile, **$350 million Ready Wyoming electric transmission project**, with an expected in-service date by year-end 2025[6](index=6&type=chunk) - South Dakota Electric received CPCN approval for the **99-megawatt, $280 million Lange II gas-fired generation project**, scheduled to be in service in the second half of 2026[9](index=9&type=chunk) - Colorado Electric is advancing its Clean Energy Plan, which includes a **100 MW solar project**, a **50 MW battery storage project**, and a **200 MW solar power purchase agreement**[9](index=9&type=chunk) [Gas Utilities](index=2&type=section&id=Gas%20Utilities) The Gas Utilities segment achieved a favorable regulatory outcome in Kansas and is pursuing another in Nebraska to recover system investments and higher operating costs - On July 24, Kansas Gas received approval for a settlement agreement providing approximately **$10.8 million in new annual revenue**, effective August 1, 2025[9](index=9&type=chunk) - On May 1, Nebraska Gas filed a rate review requesting **$35 million in new annual revenue**, with interim rates effective August 1, 2025[9](index=9&type=chunk) [Corporate and Other](index=2&type=section&id=Corporate%20and%20Other) Corporate actions in the second quarter focused on shareholder returns and financial management, including a dividend increase and the extension of the Revolving Credit Facility - The board of directors approved a quarterly dividend of **$0.676 per share**, representing **55 consecutive years of dividend increases**[9](index=9&type=chunk) - The company extended the maturity of its Revolving Credit Facility to **May 31, 2030**[9](index=9&type=chunk) - Year-to-date, the company issued **1.1 million shares** of new common stock for net proceeds of **$65 million**[9](index=9&type=chunk) [2025 Earnings Guidance](index=2&type=section&id=2025%20Earnings%20Guidance) Black Hills Corp. reaffirmed its full-year 2025 earnings guidance for diluted EPS to be in the range of $4.00 to $4.20, contingent on several key assumptions [Guidance and Assumptions](index=2&type=section&id=Guidance%20and%20Assumptions) The company's reaffirmed 2025 EPS guidance of $4.00 to $4.20 is based on key operational and financial assumptions, including normal weather and constructive regulatory decisions 2025 Full-Year Guidance | Metric | Guidance Range | | :--- | :--- | | **Earnings Per Share (Diluted)** | $4.00 - $4.20 | - Key assumptions for 2025 guidance include: - Normal weather conditions - Constructive and timely regulatory outcomes - Equity issuance between **$215 million and $235 million** - An effective tax rate of **approximately 13%**[9](index=9&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) Black Hills Corp. reported increased revenue and net income for Q2 and H1 2025, driven by growth in the Gas Utilities segment and partially offset by higher operating expenses [Consolidated Income Statement](index=3&type=section&id=Consolidated%20Income%20Statement) For the second quarter of 2025, Black Hills reported revenue of **$439.0 million** and net income available for common stock of **$27.5 million**, compared to **$402.6 million** and **$22.8 million** respectively in Q2 2024 Consolidated Financial Results (in millions) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Revenue** | $439.0 | $402.6 | $1,244.2 | $1,129.0 | | **Operating income** | $82.5 | $70.6 | $287.4 | $264.0 | | **Net income available for common stock** | $27.5 | $22.8 | $161.7 | $150.6 | [Consolidating Income Statements & Analysis](index=4&type=section&id=Consolidating%20Income%20Statements%20%26%20Analysis) A segment-level analysis shows that for Q2 2025, the Gas Utilities segment was the primary driver of growth, with operating income increasing by **$12.5 million** due to new rates and favorable weather Operating Income by Segment - Q2 2025 vs Q2 2024 (in millions) | Segment | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Electric Utilities** | $49.0 | $46.3 | +$2.7 | | **Gas Utilities** | $35.5 | $23.0 | +$12.5 | Operating Income by Segment - H1 2025 vs H1 2024 (in millions) | Segment | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | **Electric Utilities** | $103.3 | $110.9 | -$7.6 | | **Gas Utilities** | $187.0 | $153.7 | +$33.3 | - The decrease in H1 2025 Electric Utilities' operating income was primarily due to higher operating expenses and unplanned generation outages, which were partially offset by new rates and rider recovery[16](index=16&type=chunk) - Net interest expense increased by **$6.3 million in Q2 and $13.6 million in H1 2025** compared to the same periods in 2024, driven by higher interest rates and increased borrowings[15](index=15&type=chunk)[17](index=17&type=chunk) [Operating Statistics](index=6&type=section&id=Operating%20Statistics) Operating statistics show strong growth in electric industrial sales and overall increases in gas utility revenue and volumes, despite some unplanned outages [Electric Utilities Operating Statistics](index=6&type=section&id=Electric%20Utilities%20Operating%20Statistics) Electric utility operations showed strong growth in the industrial sector, with revenues and quantities sold increasing significantly in both Q2 and the first half of 2025, primarily driven by customers in Wyoming Electric Industrial Sales - Q2 2025 vs Q2 2024 | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Industrial Revenue (millions)** | $49.3 | $41.7 | +18.2% | | **Industrial Quantities Sold (GWh)** | 663.9 | 558.3 | +18.9% | - The increase in industrial revenues and sales volumes was primarily driven by Wyoming Electric LPCS Tariff and BCIS Tariff customers[18](index=18&type=chunk) Generating Facilities Availability | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Q2 Ended June 30** | **87.2%** | **87.1%** | | **H1 Ended June 30** | **88.1%** | **91.3%** | - The lower availability in 2025 was impacted by unplanned outages at Wygen III, Pueblo Airport Generation, and Busch Ranch facilities[22](index=22&type=chunk) [Gas Utilities Operating Statistics](index=7&type=section&id=Gas%20Utilities%20Operating%20Statistics) The Gas Utilities segment saw increased revenue and volumes sold and transported in Q2 and H1 2025, with total revenue growing **10.4% in Q2 and 11.9% in H1** year-over-year Gas Utilities Total Revenue & Quantities - YoY Comparison | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue (millions)** | $223.0 | $202.0 | $795.4 | $710.6 | | **Quantities Sold/Transported (Dth millions)** | 48.8 | 47.1 | 145.0 | 135.5 | - Arkansas Gas and Kansas Gas have weather normalization mechanisms that mitigate the impact of weather variations on revenue[25](index=25&type=chunk) [Other Information](index=8&type=section&id=Other%20Information) This section provides details on the upcoming conference call, an overview of Black Hills Corp., and a caution regarding forward-looking statements [Conference Call and Webcast](index=8&type=section&id=Conference%20Call%20and%20Webcast) Black Hills will host a conference call and webcast on Thursday, July 31, 2025, at 11 a.m. EDT to discuss these financial results - A live conference call and webcast to discuss financial results is scheduled for **11 a.m. EDT on Thursday, July 31, 2025**[27](index=27&type=chunk) [About Black Hills Corp.](index=8&type=section&id=About%20Black%20Hills%20Corp.) Black Hills Corp. (NYSE: BKH) is a customer-focused utility company headquartered in Rapid City, South Dakota, serving 1.35 million natural gas and electric utility customers across eight states - The company serves **1.35 million natural gas and electric utility customers** in eight states[29](index=29&type=chunk) [Caution Regarding Forward-Looking Statements](index=8&type=section&id=Caution%20Regarding%20Forward-Looking%20Statements) This report includes forward-looking statements, such as the 2025 earnings guidance and long-term growth targets, which are subject to risks and uncertainties - Forward-looking statements, including 2025 earnings guidance, are subject to significant risks and uncertainties[30](index=30&type=chunk) - Identified risks include the ability to obtain adequate cost recovery, complete capital programs, execute strategy, manage interest rate effects, and overcome supply chain disruptions[32](index=32&type=chunk)

Financial Performance - Black Hills Corp. reported operating income of $82.5 million for Q2 2025, up from $70.6 million in Q2 2024, and net income available for common stock increased to $27.5 million from $22.8 million in the same period [1][19] - Earnings per share (EPS) for Q2 2025 were $2.24, compared to $0.38 in Q2 2024, reflecting a significant increase due to new rates and rider recovery, despite higher operating expenses [1][19] - For the first half of 2025, the company achieved net income of $161.7 million, up from $150.6 million in the first half of 2024 [1][21] Growth Initiatives - The company is executing a $1 billion capital plan for 2025 to support long-term growth and maintain solid financial credit metrics [2] - Key projects include the $350 million Ready Wyoming electric transmission project, expected to be completed by year-end 2025, and the $280 million Lange II generation project in South Dakota, planned to be operational in the second half of 2026 [3][10] - The company anticipates that data centers will contribute over 10% of EPS by 2028, driven by ongoing construction of Meta's new data center in Wyoming [3] Regulatory Developments - Black Hills Corp. reaffirmed its 2025 earnings guidance range of $4.00 to $4.20 per share, based on favorable regulatory outcomes and operational stability [5][10] - The company received approval for new rates at Kansas Gas, providing an additional $10.8 million in annual revenues, and a certificate for a 99-megawatt generation project in South Dakota [5][10] Operational Highlights - Wyoming Electric recorded an all-time peak load of 379 megawatts, reflecting a 21% increase over the previous year's peak, marking 19 consecutive years of rising electric demand [6][5] - The establishment of an Emergency Public Safety Power Shutoff program aims to enhance customer safety and mitigate wildfire risks across all electric utilities [6] Dividend and Share Issuance - The board of directors approved a quarterly dividend of $0.676 per share, marking 55 consecutive years of dividend increases, the second-longest track record in the industry [10] - In Q2 2025, the company issued 0.3 million shares for net proceeds of $20 million, totaling 1.1 million shares for $65 million year-to-date [10]

Core Points - Black Hills Corp.'s natural gas utility subsidiary in Kansas received approval for new rates from the Kansas Corporation Commission, allowing recovery of approximately $118 million in system investments since the last rate filing in 2021 [1][2] - The approved settlement will generate approximately $10.8 million in new annual revenues and migrate about $4.4 million in annual rider revenue to base rates, resulting in a total annual base rate revenue increase of $15.2 million, effective August 1, 2025 [2][3] - The settlement allows the continued use of the Gas System Reliability Surcharge (GSRS) for safety-focused pipeline replacements and includes a new insurance tracker with deferred accounting treatment [3] Company Overview - Black Hills Corp. is a growth-oriented utility company based in Rapid City, South Dakota, serving 1.35 million natural gas and electric utility customers across eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming [4]

Core Viewpoint - The utility sector is poised for significant growth due to a surge in electricity demand driven by advancements in artificial intelligence, data centers, and electric vehicles, with a projected increase in demand of 55% over the next 20 years compared to just 9% from 2000 to 2020 [3][4]. Industry Trends - Electricity demand grew by 9% from 2000 to 2020, but is expected to grow by 55% over the next two decades [3]. - The demand for electricity from AI and data centers is projected to increase by 300% in the next decade, while electric vehicles are expected to drive a staggering 9,000% increase in electricity demand by 2050 [4]. - By the middle of the century, electricity is projected to account for 32% of final energy demand, up from 21% [4]. Investment Opportunities - Vanguard Utilities Index Fund ETF (VPU) offers diversified exposure to the utility sector with a yield of approximately 2.8% [6]. - NextEra Energy (NEE) has a strong growth platform with a 10% annualized dividend increase over the past decade and a yield of around 3.2% [7][8]. - The Southern Company (SO) has recently started two nuclear reactors, enhancing its clean energy supply and yielding 3.2% [9]. - Duke Energy (DUK) focuses on regulated utility customer bases, with a dividend yield of about 3.5% [10]. - Dominion Energy (D) has a higher yield of 4.7% but has faced challenges with a dividend cut [11]. - Black Hills Corporation (BKH) has achieved Dividend King status with a yield of 4.8% and a growing customer base [12]. - Constellation Energy (CEG) operates the largest nuclear power fleet in the U.S. but has a lower yield of 0.5% [13]. - Brookfield Renewable offers a diversified clean energy investment with yields of 5.8% for the partnership class and 4.5% for the corporate class [14][15]. - Portland General Electric (POR) has a yield of 5.1% and operates in a region with potential for data centers despite wildfire risks [17]. - Eversource Energy (ES) focuses on regulated utility assets with a yield of approximately 4.7% [18]. Long-term Outlook - The trends driving electricity demand are expected to unfold over decades, presenting opportunities for long-term investors to build wealth as the demand growth story develops [19].

Core Viewpoint - Black Hills Corp. is set to announce its 2025 second-quarter earnings on July 30, 2025, followed by a live conference call on July 31, 2025, to discuss the financial results [1]. Company Overview - Black Hills Corp. (NYSE: BKH) is a growth-oriented utility company based in Rapid City, South Dakota, serving 1.35 million natural gas and electric utility customers across eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming [4]. - The company aims to be the energy partner of choice, focusing on improving life with energy [4]. Investor Relations - For inquiries, investors can contact Sal Diaz via email at investorrelations@blackhillscorp.com or reach the 24-hour media relations line at 888-242-3969 [5].