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].

Financial Performance & Growth - Black Hills Corp achieved a solid financial position with a long-term EPS growth target of 4% to 6% off the 2023 base of $3.75 per share[9] - The company targets a 55%-65% dividend payout ratio and has increased its annual dividend for 55 consecutive years[9] - The company is delivering on 2025 earnings guidance, which represents ~5% year-over-year growth, achieving 4%-6% CAGR off 2023 base[11] Capital Investment & Infrastructure - Black Hills Corp has a five-year capital forecast of $4.7 billion for 2025-2029, a 10% increase from the prior five-year plan[11] - The company's capital investment plan includes $2.4 billion for electric utilities and $2.1 billion for gas utilities[93] - The company is undertaking the Ready Wyoming Electric Transmission Initiative, a 260-mile expansion project costing $350 million[33] Data Center & Customer Growth - Black Hills Corp announced 1 GW of data center demand from existing customers, with ~500 MW in the current plan requiring minimal capital[11] - The company expects data center EPS contribution to more than double to 10%+ by 2028[17] - The company's customer count growth is more than double the population growth, with a customer count CAGR of 1.1% from 2019-2024[20, 23] Regulatory & Sustainability - The company is actively executing three to four rate reviews per year, including a filed rate review for Kansas Gas requesting recovery of $17.2 million[11, 18] - Black Hills Corp is committed to reducing GHG emissions intensity 40% by 2030 and 70% by 2040 for electric utilities (2005 baseline)[110] - The company targets Net Zero GHG emissions by 2035 for the natural gas distribution system[110]

Core Viewpoint - Dividend-paying stocks are generally considered lower-risk investments compared to non-payers, as they generate sufficient cash to fund growth and return excess to shareholders through dividends [1] Group 1: Black Hills (BKH) - Black Hills operates as a regulated utility with a monopoly on natural gas distribution and electricity in several states, benefiting from government regulation [5][6] - The company has a growing customer base, expanding at twice the rate of the U.S. population, and has a history of increasing dividends for over five decades, achieving Dividend King status [7] - Expected earnings growth of 4% to 6% and a dividend yield of 4.8% make Black Hills an attractive investment opportunity [8] Group 2: Kinder Morgan (KMI) - Kinder Morgan is one of the largest energy infrastructure platforms in the U.S., with stable cash flows supported by take-or-pay contracts that account for 64% of annual cash flows [9][10] - The company anticipates cash flow growth to $5.9 billion this year, sufficient to cover its $2.6 billion dividend outlay and fund capital expenditures with excess free cash flow [11][12] - With $8.8 billion in growth capital projects, primarily in natural gas pipelines, Kinder Morgan has a strong foundation for future dividend increases, having raised its payout for eight consecutive years [13] Group 3: American States Water (AWR) - American States Water is a major water utility serving 1 million consumers across nine states, with a long history of dividend payments since 1931 and 70 consecutive years of increases, making it a top Dividend King [15] - The company has achieved a compound annual growth rate (CAGR) of 8.8% in dividend growth over the past five years and aims for over 7% in the long term, supported by planned capital expenditures [16] - The stable cash flows and growth potential position American States Water as one of the safest and most reliable dividend stocks available, with a current yield of 2.4% [17]

Core Viewpoint - Black Hills Corp. demonstrates its commitment to a sustainable energy future through its 2024 Corporate Sustainability Report, highlighting significant progress in environmental, economic, and governance areas [1][2]. Environmental Achievements - The company has achieved a 38% reduction in electric utility emissions since 2005 and aims for a 40% reduction by 2030 and a 70% reduction by 2040 [2]. - Black Hills Corp. is on track to reach net zero natural gas utility emissions by 2035 [2]. Economic Impact - The total economic impact of Black Hills Corp. in 2024 was approximately $1.5 billion, which includes $3.8 million in charitable giving and energy assistance [6]. - The company’s charitable contributions included $441,000 to United Way and $73,711 to Black Hills Cares, which, with company matching, totaled $551,000 for United Way and $346,000 in energy assistance [6]. Renewable Energy Initiatives - In 2024, Black Hills Corp. acquired a renewable natural gas facility in Iowa, expected to produce enough RNG to heat over 1,800 homes annually [6]. - The company is also innovating in coal to hydrogen technology and has conducted initial testing of carbon sequestration capabilities at its Gillette, Wyoming energy complex [6]. Customer Empowerment - Through programs like Green Forward and over $10 million in energy efficiency rebates, Black Hills Corp. has helped customers save energy equivalent to powering over 1,500 homes with electricity and 246 homes with natural gas for one year [6]. Workplace Culture - Black Hills Corp. fosters a workplace environment that encourages employee contribution, collaboration, and growth, aligning with its mission to improve life with energy [6].

Core Viewpoint - Geopolitical tensions and tariff uncertainties are prompting investors to seek safe dividend stocks, particularly in the utility sector, which is characterized by stable demand and regulated returns [1][4]. Investment Options - NextEra Energy, Black Hills, and Dominion Energy are highlighted as attractive utility stocks for investment, each with distinct characteristics and dividend profiles [2][7]. NextEra Energy - NextEra Energy is recognized for its strong dividend growth, having increased its dividend annually for over 30 years, with a 10% annualized increase over the past decade and a current yield of approximately 3.2% [9][11]. - The company’s core business is its regulated utility operation in Florida, complemented by a significant renewable power segment that contributes to its growth potential [10]. Black Hills - Black Hills operates regulated electric and natural gas assets across several states and is noted for its consistent dividend increases over more than five decades, offering a yield of 4.8% [12][13]. - The utility's customer base is growing at nearly double the rate of the U.S. population, indicating strong future growth prospects [12]. Dominion Energy - Dominion Energy presents a higher yield of 4.9%, but its dividend is currently not growing as the company focuses on restructuring and strengthening its balance sheet [14][15]. - The utility is positioned to benefit from significant industry trends, including its involvement in one of the largest data center markets and the development of a large offshore wind farm [14]. Summary of Investment Appeal - The three utilities—NextEra Energy for dividend growth, Black Hills for reliable dividends, and Dominion Energy as a turnaround story—offer diverse options for investors seeking stable income streams [16].