BLACK HILLS CORP /SD/ Q3 FY2024 earnings call

• Customer-focused strategy progress with new margins and growth projects.
• Operational excellence with 98% availability for natural gas units and 95% total availability across generation facilities. Served Meta's data center in Cheyenne, WY starting 2026.
• $800 million capital plan on track, including Ready Wyoming electric transmission expansion. Achieved debt to capitalization target for BBB+ credit rating.
• Rate reviews: Arkansas Gas rates approved in Oct, Iowa Gas settlement pending, Colorado Electric in regulatory process.
• Received higher Vets Medallion award for fifth consecutive year for veteran recruitment/retention.

In Q3 2024, Black Hills Corporation reported $0.35 per share in EPS compared to $0.67 per share in Q3 2023. New margins were $0.16, including $0.10 from electric utilities, $0.05 from gas utilities, and $0.01 from customer growth and usage. Operating expenses increased due to higher insurance premiums, employee costs, outside services, unplanned generation outages, and a prior year gain on land sale. Year-to-date, they delivered $0.57 per share of new margins from gas and electric utilities, customer growth, and usage, offset by off-system sales, unplanned outages, and prior year insurance benefits.

• On track to deliver earnings guidance range of $3.80 to $4 per share. Confident in 4%-6% EPS growth target long-term.
• Five-year capital investment plan targets $4.3 billion, with $1.3 billion in 2026 for generation investments. Update 2025 guidance and capital forecast in Feb 2025.

• Uncertainties in forward-looking statements. Impact of mild weather, unplanned generation outages, and insurance expense increases on financial results.

Q: Can you give more detail on unplanned outages and their O&M impact?

A: One outage rolled over from last quarter into early Q3, no additional outages this quarter. Financial impact on slides includes $0.03 and $0.05 for quarter and year respectively.

Q: Any thoughts on incoming administration's impact on crypto/blockchain industry and how Black Hills is positioned?

A: Agnostic to federal policy, but focused on serving customers best. Been serving data centers over a decade, see potential benefit from inbound calls in other states.

Q: Insights on cadence of large load customers like data centers?

A: Data centers like Meta come on end of 2026 gradually, with expansion seen. Inbounds in Colorado and South Dakota also inform future EPS growth.

Q: Color on CapEx investments and guidance for fourth quarter?

A: CapEx includes transmission on electric and gas sides, gas storage opportunities. Fourth quarter guided with focus on managing O&M to cover unplanned outages and insurance expenses, aligning with full-year 3.5% O&M increase plan adjusted for challenges.