Financial Data and Key Metrics Changes - The company achieved GAAP EPS of $3.98 for 2025, including $0.12 of merger-related transaction costs, and adjusted EPS of $4.10, a 5% increase from $3.91 in 2024 [11][12] - Operating and financing expenses increased, with O&M expenses rising by $0.36 per share, primarily due to higher employee costs and unplanned generation outages [12][13] - The company maintained a healthy balance sheet with a net debt to total capitalization of 55% and FFO to debt of 14%-15%, above the downgrade threshold [14] Business Line Data and Key Metrics Changes - The company successfully executed its regulatory strategy, delivering $0.95 per share of new rates and rider recovery margin, which offset higher operating expenses [12] - The data center pipeline was tripled to over 3 GW, with significant demand from large customers like Microsoft and Meta [4][7] Market Data and Key Metrics Changes - The company reported strong demand from large load customers, particularly data centers, contributing to solid economic development in its service territories [4] - The company anticipates delivering 6% year-over-year earnings growth in 2026, driven by ongoing customer growth and new rates [6][15] Company Strategy and Development Direction - The company is committed to a customer-centric strategy, focusing on innovative investments and regulatory progress, including the merger with NorthWestern Energy [5][9] - The merger is expected to enhance capabilities and create long-term value through increased scale and improved customer diversity [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial commitments and maintaining a strong investment-grade credit rating, with expectations for continued growth driven by data center demand [11][15] - The company is preparing for a rate review in South Dakota to recover customer-focused investments after holding base rates unchanged for over a decade [24] Other Important Information - The company increased its dividend for the 56th consecutive year in 2025, targeting a payout ratio of 55%-65% [17] - The company completed the 260-mile Ready Wyoming transmission project, enhancing reliability and access to market energy [20][21] Q&A Session Summary Question: Proportion of the 3 GW pipeline within the five-year window - Management indicated that 600 MW is expected by 2030, with ongoing negotiations for additional capacity beyond that timeframe [36][37] Question: Interface with the Montana Commission regarding the merger - Management stated they are in the discovery phase, receiving expected questions from regulators [40] Question: Scale of data centers in the pipeline - Management confirmed that Microsoft and Meta are the primary customers, with ongoing negotiations for additional large-scale data centers [41][42] Question: Regulatory filings for transmission infrastructure - Management confirmed plans for additional investments to accommodate data center demand, including the Robinson Substation [58] Question: Timing for energy service agreements with hyperscalers - Management noted that customers intend to begin taking service in Q1 2027, aligning efforts to meet both parties' goals [60]

Financial Data and Key Metrics Changes - The company achieved GAAP EPS of $3.98 for 2025, including $0.12 of merger-related transaction costs, and adjusted EPS of $4.10, a 5% increase from $3.91 in 2024 [11][12] - Operating and financing expenses increased, with O&M expenses rising by $0.36 per share, primarily due to higher employee costs and unplanned outages [12][13] - The company maintained a healthy balance sheet with a net debt to total capitalization of 55% and FFO to debt of 14%-15%, above the downgrade threshold [14] Business Line Data and Key Metrics Changes - The company successfully executed its regulatory strategy, delivering $0.95 per share of new rates and rider recovery margin, which offset higher operating costs [12] - The data center pipeline was tripled to over 3 gigawatts, with significant demand from large customers like Microsoft and Meta [4][7] Market Data and Key Metrics Changes - The company anticipates delivering 6% year-over-year earnings growth in 2026, driven by ongoing customer growth and increasing data center demand [6][15] - The company is actively pursuing additional data center pipeline demand that would contribute upside to earnings over time [16] Company Strategy and Development Direction - The company is committed to a customer-centric strategy, focusing on innovative investments and regulatory progress [6][9] - The merger with NorthWestern Energy is expected to create a stronger utility company, enhancing capabilities and growth opportunities [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial commitments and maintaining a strong investment-grade credit rating [11] - The company is preparing for a rate review in South Dakota to recover customer-focused investments after holding base rates unchanged for over a decade [24] Other Important Information - The company increased its dividend for the 56th consecutive year in 2025, targeting a payout ratio of 55%-65% [17] - The company completed the 260-mile Ready Wyoming transmission project, enhancing service reliability and cost-effectiveness [20] Q&A Session Summary Question: Proportion of the 3-gigawatt pipeline within the five-year window - Management indicated that 600 MW is expected by 2030, with additional demand anticipated beyond that timeframe [36][37] Question: Filing CPCNs in advance of resource specificity - Management noted the importance of having facts present for CPCN filings and is navigating the process to ensure timely approvals [38][39] Question: Scale of data centers in the pipeline - Management confirmed that Microsoft and Meta are the primary customers, with ongoing negotiations for additional large-scale data centers [41][42] Question: Crusoe Tallgrass project and regulatory filings - Management discussed the unique setup for customer-funded construction to alleviate risks and costs for other customers [49][50] Question: Additional investments for data center customers - Management acknowledged the need for further investment beyond the current plan to accommodate growing demand [58]

Financial Data and Key Metrics Changes - The company reported GAAP EPS of $3.98 for 2025, including $0.12 of merger-related transaction costs, and adjusted EPS of $4.10, a 5% increase from $3.91 in 2024 [11][12] - Operating and financing expenses increased, with O&M expenses rising by $0.36 per share, primarily due to higher employee costs and unplanned generation outages [12][13] - The company maintained a healthy balance sheet with a net debt to total capitalization of 55% and FFO to debt of 14%-15%, above the downgrade threshold [14] Business Line Data and Key Metrics Changes - The company achieved strong earnings through new base rates and rider recovery, with $0.95 per share from new rates and ongoing customer growth [12][13] - The data center pipeline was tripled to over 3 gigawatts, with significant demand from large customers like Microsoft and Meta [4][7] Market Data and Key Metrics Changes - The company anticipates delivering 6% year-over-year earnings growth in 2026, driven by customer growth and data center demand [6][15] - The company is actively pursuing additional data center pipeline demand that could contribute to earnings over time [16][25] Company Strategy and Development Direction - The company is committed to a customer-centric strategy, focusing on regulatory progress and capital investments to meet growing customer demand [6][9] - The strategic merger with NorthWestern Energy is expected to enhance capabilities and create long-term value through increased scale and improved customer diversity [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial commitments and maintaining a strong investment-grade credit rating, with expectations for continued growth in customer demand and regulatory approvals [11][16] - The company is preparing for a rate review in South Dakota to recover investments and increased costs, marking the first change in base rates in over a decade [24] Other Important Information - The company increased its dividend for the 56th consecutive year in 2025, targeting a payout ratio of 55%-65% [17] - The company completed the 260-mile Ready Wyoming transmission project, enhancing reliability and access to market energy [20][21] Q&A Session Summary Question: Proportion of the 3-gigawatt pipeline within the five-year window - Management indicated that 600 MW is expected by 2030, with additional demand anticipated beyond that timeframe [35][36] Question: Interface with the Montana Commission regarding the merger - Management stated they are in the discovery phase with the Montana Commission, receiving expected questions and information requests [40] Question: Scale of data centers in the pipeline - Management confirmed that Microsoft and Meta are the primary customers, with ongoing negotiations for additional large-scale data centers [41][42] Question: Regulatory filings for the Crusoe Tallgrass project - Management explained that the customer would pay for construction to alleviate risk and costs, and they are evaluating how to serve the load with various resources [50][56] Question: Timing for signing agreements for the Crusoe project - Management noted that the customer intends to begin taking service in Q1 2027, and they are working to align timelines [61]

2025 Fourth Quarter and Full Year Review Feb. 5, 2026 Forward-looking Statements COMPANY INFORMATION Black Hills Corporation P.O. Box 1400 Rapid City, SD 57709-1400 NYSE Ticker: BKH www.blackhillscorp.com Company Contacts Kimberly Nooney Senior Vice President and CFO 605-721-2370 kim.nooney@blackhillscorp.com Sal Diaz Director of Investor Relations 605-399-5079 sal.diaz@blackhillscorp.com This presentation includes "forward-looking statements" as defined by the Securities and Exchange Commission. We make th ...

Financial Performance - Black Hills Corp. reported a net income of $104.9 million for Q4 2025, compared to $98.1 million in Q4 2024, and a full-year net income of $291.6 million, up from $273.1 million in 2024[1][2]. - The GAAP EPS for 2025 was $3.98, an increase of 1.8% from $3.91 in 2024, while the adjusted EPS was $4.10, reflecting a 5% increase compared to the previous year[2][6]. - Revenue for the three months ended Dec. 31, 2025, was $635.5 million, an increase of 6.8% compared to $597.1 million for the same period in 2024[20]. - Operating income for the twelve months ended Dec. 31, 2025, was $537.5 million, up 6.8% from $503.1 million in 2024[27]. - Total revenue for the twelve months ended Dec. 31, 2025, reached $2,310.0 million, a 8.6% increase from $2,127.7 million in 2024[27]. - Total operating expenses for the three months ended Dec. 31, 2025, were $464.1 million, compared to $433.8 million in 2024, representing a 6.0% increase[20]. - Other income, net, increased by $4.8 million for the three months ended Dec. 31, 2025, due to higher investment income from the captive insurance cell[26]. - Earnings per share (diluted) for the twelve months ended Dec. 31, 2025, was $3.98, compared to $3.91 in 2024, indicating a 1.8% increase[20]. - Weighted average common shares outstanding (diluted) increased to 75.4 million for the three months ended Dec. 31, 2025, from 71.6 million in 2024[20]. Capital Investments and Projects - Black Hills Corp. invested nearly $900 million in capital projects in 2025, including the completion of three rate reviews that generated over $52 million in new annual revenue[3][6]. - The Ready Wyoming electric transmission expansion project, a 260-mile initiative costing $350 million, was completed on schedule and is expected to enhance system resiliency and customer service[10][6]. - The company’s data center pipeline exceeds 3 GW, with plans to develop 600 MW by 2030, driven by partnerships with major tech companies like Microsoft and Meta[5][6]. Merger and Regulatory Matters - The merger with NorthWestern Energy is anticipated to close in the second half of 2026, with regulatory approvals already filed in multiple states[7][12]. - Black Hills filed a registration statement on Form S-4 with the SEC to register shares of common stock to be issued to NorthWestern stockholders in connection with the pending merger transaction[45]. - The definitive joint proxy statement/prospectus will be sent to stockholders of both Black Hills and NorthWestern regarding the merger transaction[45]. - Investors are urged to read the registration statement and joint proxy statement/prospectus for important information about the pending merger transaction[46]. - Information about directors and executive officers of Black Hills and NorthWestern will be included in the joint proxy statement/prospectus related to the merger[47]. - The merger transaction will involve the solicitation of proxies from stockholders of both companies[47]. - Free copies of relevant documents can be obtained through the SEC website or by contacting investor relations departments[48]. - Media assistance is available 24 hours a day for inquiries related to the merger[48]. Customer Base and Market Presence - The company serves 1.37 million natural gas and electric utility customers across eight states, indicating a broad market presence and customer base[40]. Future Outlook and Guidance - The company initiated 2026 adjusted EPS guidance in the range of $4.25 to $4.45, indicating a projected 6% year-over-year growth[4][12]. - The company anticipates future growth and has provided earnings guidance for 2026, focusing on regulatory filings and the merger with NorthWestern Energy[41]. - The company expects an increase in operations and maintenance expenses of approximately 3.5% in 2026, based on a 2025 expense of $580 million[12][16]. Operational Challenges and Risks - The company is facing risks related to supply chain disruptions, inflation, and regulatory approvals that could impact future performance[42]. - Electric Utilities' operating income decreased by $10.5 million for the twelve months ended Dec. 31, 2025, primarily due to higher operating expenses and unplanned generation outages[28]. - Gas Utilities' operating income increased by $49.5 million for the twelve months ended Dec. 31, 2025, driven by new rates and rider recovery[28]. Energy Generation and Efficiency - Coal generation facility availability decreased to 69.4% in Q4 2025 from 97.2% in Q4 2024, while natural gas and diesel oil availability improved to 88.4% from 85.5%[32]. - The wind capacity factor for the company was reported at 39.7% for Q4 2025, an increase from 38.0% in Q4 2024, indicating improved efficiency in wind energy generation[32]. - The company has implemented a weather normalization mechanism for Nebraska Gas, effective August 2025, to mitigate weather impacts on utility margins[37]. Revenue and Sales Metrics - Retail revenue from residential customers for the three months ended December 31, 2025, was $226.8 million, an increase from $215.4 million in 2024, with total retail revenue for gas utilities reaching $402.9 million, up from $385.2 million[34]. - Quantities sold for the three months ended December 31, 2025, were 1,917.2 GWh, compared to 1,800.2 GWh in 2024, and for the twelve months, quantities sold were 7,666.8 GWh, up from 7,235.2 GWh in 2024[31]. - The company reported a 12% decrease in heating degree days for Arkansas Gas, with actual degree days at 1,105 compared to a normal of 1,073[36].

Core Insights - Black Hills Corp. reported a net income of $104.9 million for Q4 2025, an increase from $98.1 million in Q4 2024, and a full-year net income of $291.6 million compared to $273.1 million in 2024, reflecting a solid financial performance [1][5][20] - The company achieved a GAAP EPS of $3.98 for 2025, up from $3.91 in 2024, and an adjusted EPS of $4.10, which excludes merger-related costs, indicating a growth of approximately 5% [1][5][12] - Black Hills Corp. plans to invest $4.7 billion from 2026 to 2030 to enhance service reliability and support growth, with a 6% year-over-year earnings growth guidance for 2026 [3][5][12] Financial Performance - For Q4 2025, revenue was $635.5 million, up from $597.1 million in Q4 2024, while full-year revenue reached $2.31 billion, compared to $2.13 billion in 2024 [1][19] - Operating income for Q4 2025 was $171.4 million, slightly higher than $163.3 million in Q4 2024, and full-year operating income increased to $537.5 million from $503.1 million [19][20] - The company maintained strong credit ratings, with Moody's affirming a Baa2 rating and S&P Global Ratings affirming a BBB+ rating, indicating solid credit quality [15] Strategic Initiatives - The company is advancing its merger with NorthWestern Energy, which is expected to close in the second half of 2026, and has filed necessary applications with regulatory bodies [5][6] - Black Hills Corp. has initiated a significant electric transmission expansion project, the Ready Wyoming project, which is expected to enhance system resiliency and support local economic growth [2][9] - The company is also focusing on a data center pipeline exceeding 3 GW, with plans to serve high-quality partners, driven by demand from major tech companies [4][5] Regulatory and Market Developments - In 2025, Black Hills completed three rate reviews, resulting in over $52 million of new annual revenue, which contributed to its financial performance [2][5] - The company has established an Emergency Public Safety Power Shutoff program to enhance customer safety and mitigate wildfire risks across its electric utilities [9] - New rates effective for Colorado Electric are expected to generate an additional $17.5 million in annual revenue following a rate review [9][10]

Core Thesis - Black Hills Corporation (BKH) is positioned as a resilient utility with a strong operational track record and a commitment to shareholder returns through consistent dividend growth and strategic investments in clean energy [1][7]. Company Overview - Black Hills Corporation serves approximately 1.35 million electric and gas customers across eight states, showcasing its operational excellence and reliability in the utility sector [3]. - The company has a diversified portfolio that includes utility-scale projects and partnerships with industrial and data center clients, which helps in maintaining stable cash flows [4]. Financial Performance - For Q3 2025, Black Hills reported revenue of $461 million and net income of $121 million, reflecting year-over-year growth of 9.2% in revenue and 6.1% in EPS, driven by increased customer demand [5]. - The company has a dividend yield of 3.71% and has increased dividends for 55 consecutive years, supported by a payout ratio of 68.18% and a 25% increase in dividends over the past five years [4]. Future Growth Initiatives - Black Hills plans to invest $4.7 billion from 2025 to 2029, with $1 billion allocated for 2025 alone, focusing on enhancing infrastructure and integrating clean energy resources [6]. - The Colorado Clean Energy Plan aims to add 400 MW of solar and battery storage by 2029, while the data center pipeline exceeds 1 gigawatt, indicating strong potential for recurring revenue growth [6]. Investment Appeal - The combination of steady financial performance, a long history of strategic acquisitions, and a focus on sustainable energy makes Black Hills a compelling investment opportunity in the utility sector [7].

Core Viewpoint - Black Hills Corporation (NYSE:BKH) is recognized as a low-risk stock suitable for retirement portfolios, reflecting its stable growth and customer service focus [1]. Group 1: Valuation and Ratings - BofA has updated its price target for Black Hills Corporation to $72 from $70 while maintaining a Neutral rating, indicating a roll-forward of its valuation to 2028 EPS and revised peer P/E multiples [2]. Group 2: Recent Developments - On January 7, Black Hills completed the construction of its 260-mile Ready Wyoming electric transmission expansion, a $350 million project that was placed into service on schedule in December 2025 [3]. - The transmission project aims to enhance long-term cost stability for customers, improve system reliability, and expand access to regional power markets, while also supporting local economic activity and future energy development in Wyoming [4]. Group 3: Company Overview - Black Hills Corporation is a regulated utility that provides natural gas and electric service to approximately 1.35 million customers across eight states, focusing on steady growth and customer service [5].

Group 1 - Black Hills is a utility company based in Rapid City, S.D., providing electric service to approximately 225,000 customers and natural gas to over 1.1 million customers across seven Western states [3][5]. - The company is recognized as a member of IBD's Utility Leaders Screen, indicating its strong performance in the utility sector [3]. - Black Hills has shown improving price performance, resulting in an upgrade to its IBD Relative Strength Rating, which has risen to 78 [5]. Group 2 - The stock of Black Hills is currently demonstrating rising relative strength, although it remains shy of key technical benchmarks [5]. - Recent reports indicate that Black Hills is making progress towards achieving significant technical thresholds, reflecting positive market sentiment [5].

Core Viewpoint - Black Hills Corp. will announce its 2025 fourth-quarter and full-year earnings on February 4, 2026, and will host a conference call on February 5, 2026, to discuss the financial results [1]. Company Overview - Black Hills Corp. is a customer-focused, 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].