UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission File Number 001-31303
Black Hills Corporation
Incorporated in South Dakota IRS Identification Number 46-0458824
7001 Mount Rushmore Road
Rapid City, South Dakota57702
Registrant’s telephone number (605) (605) 721-1700
Former name, former address, and former fiscal year if changed since last report
NONE
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer | x | Accelerated Filer | ☐ | |||||||||||||||||
Non-accelerated Filer | ☐ | Smaller Reporting Company | ☐ | |||||||||||||||||
Emerging Growth Company | ☐ | |||||||||||||||||||
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ☐ No ☒
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||||||||
Common stock of $1.00 par value | BKH | New York Stock Exchange | ||||||||||||||||||
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.
Class | Outstanding at October 31, | |||||||||||||
Common stock, $1.00 par value |
| shares | ||||||||||||
| Page | ||||||||||
Item 1. | |||||||||||
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Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
Item 1. | |||||||||||
Item 1A. | |||||||||||
Item 2. | |||||||||||
Item 4. | |||||||||||
Item 5. | |||||||||||
Item 6. | |||||||||||
2
GLOSSARY OF TERMS AND ABBREVIATIONS
The following terms and abbreviations appear in the text of this report and have the definitions described below:
AFUDC | Allowance for Funds Used During Construction | ||||
AOCI | Accumulated Other Comprehensive Income (Loss) | ||||
Arkansas Gas | Black Hills Energy Arkansas, Inc., an indirect, wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas services to customers in Arkansas (doing business as Black Hills Energy). | ||||
ATM | At-the-market equity offering program | ||||
Availability | The availability factor of a power plant is the percentage of the time that it is available to provide energy. | ||||
BHC | Black Hills Corporation; the Company | ||||
Black Hills Colorado IPP | Black Hills Colorado IPP, LLC a 50.1% owned subsidiary of Black Hills Electric Generation | ||||
Black Hills Electric Generation | Black Hills Electric Generation, LLC, a direct, wholly-owned subsidiary of Black Hills Non-regulated Holdings, providing wholesale electric capacity and energy primarily to our affiliate utilities. | ||||
Black Hills Electric Parent Holdings | Black Hills Electric Utility Holdings, LLC., a direct, wholly-owned subsidiary of Black Hills Corporation | ||||
Black Hills Energy | The name used to conduct the business of our utility companies | ||||
Black Hills Energy Services | Black Hills Energy Services Company, an indirect, wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas commodity supply for the Choice Gas Programs (doing business as Black Hills Energy) | ||||
Black Hills Non-regulated Holdings | Black Hills Non-regulated Holdings, LLC, a direct, wholly-owned subsidiary of Black Hills Corporation | ||||
Black Hills Utility Holdings | Black Hills Utility Holdings, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation (doing business as Black Hills Energy) | ||||
Black Hills Wyoming | Black Hills Wyoming, LLC, a direct, wholly-owned subsidiary of Black Hills Electric Generation | ||||
Choice Gas Program | Regulator-approved programs in Wyoming and Nebraska that allow certain utility customers to select their natural gas commodity supplier, providing for the unbundling of the commodity service from the distribution delivery service. | ||||
Clean Energy Plan | 2030 Ready Plan that establishes a roadmap and preferred resource portfolio for Colorado Electric to cost-effectively achieve the State of Colorado's requirement calling upon electric utilities to reduce GHG emissions by a minimum of 80% from 2005 levels by 2030. The preferred resource portfolio calls for the addition of 149 MW of wind, 258 MW of solar and 50 MW of battery storage to Colorado Electric's system. The final mix of resources will be determined by the results of a competitive solicitation that started in July 2023. Colorado legislation allows electric utilities to own up to 50% of the renewable generation assets added to comply with the Clean Energy Plan. | ||||
Colorado Electric | Black Hills Colorado Electric, LLC, a direct, wholly-owned subsidiary of Black Hills | ||||
Colorado Gas | Black Hills Colorado Gas, Inc., an indirect, wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas services to customers in Colorado (doing business as Black Hills Energy). | ||||
Common Use System | The Common Use System is a jointly operated transmission system we | ||||
Consolidated Indebtedness to Capitalization Ratio | Any indebtedness outstanding at such time, divided by capital at such time. Capital being consolidated net worth (excluding non-controlling interest) plus consolidated indebtedness (including letters of credit and certain guarantees issued) as defined within the current Revolving Credit Facility. | ||||
Cooling Degree Day | A cooling degree day is equivalent to each degree that the average of the high and low temperatures for a day is above 65 degrees. The warmer the climate, the greater the number of cooling degree days. Cooling degree days are used in the utility industry to measure the relative warmth and to compare relative temperatures between one geographic area and another. Normal degree days are based on the National Weather Service data for selected locations. | ||||
CP Program | Commercial Paper Program | ||||
3
CPUC | Colorado Public Utilities Commission | ||||
DRSPP | Dividend Reinvestment and Stock Purchase Plan | ||||
Dth | Dekatherm. A unit of energy equal to 10 therms or approximately one million British thermal units (MMBtu) | ||||
FASB | Financial Accounting Standards Board | ||||
Fitch | Fitch Ratings Inc. | ||||
GAAP | Accounting principles generally accepted in the United States of America | ||||
Heating Degree Day | A heating degree day is equivalent to each degree that the average of the high and the low temperatures for a day is below 65 degrees. The colder the climate, the greater the number of heating degree days. Heating degree days are used in the utility industry to measure the relative coldness and to compare relative temperatures between one geographic area and another. Normal degree days are based on the National Weather Service data for selected locations. | ||||
HomeServe | We offer HomeServe products to our natural gas residential customers interested in purchasing additional home repair service plans. | ||||
Integrated Generation | Non-regulated power generation and mining businesses that are vertically integrated within our Electric Utilities segment. | ||||
Iowa Gas | Black Hills Iowa Gas Utility Company, LLC, a direct, wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas services to customers in Iowa (doing business as Black Hills Energy). | ||||
IPP | Independent Power Producer | ||||
IRS | United States Internal Revenue Service | ||||
Kansas Gas | Black Hills Kansas Gas Utility Company, LLC, a direct, wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas services to customers in Kansas (doing business as Black Hills Energy). | ||||
LIBOR | London Interbank Offered Rate | ||||
MMBtu | Million British thermal units | ||||
Moody's | |||||
| |||||
MW | Megawatts | ||||
|
| ||||
|
| ||||
Nebraska Gas | Black Hills Nebraska Gas, LLC, an indirect, wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas services to customers in Nebraska (doing business as Black Hills Energy). | ||||
|
| ||||
OCI | Other Comprehensive Income | ||||
PPA | Power Purchase Agreement | ||||
PTC | Production Tax Credit | ||||
Revolving Credit Facility | Our $750 million credit facility used to fund working capital needs, letters of credit and other corporate purposes, which was amended on May 9, 2023 and | ||||
RMNG | Rocky Mountain Natural Gas LLC, an indirect, wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas transmission and wholesale services in western Colorado (doing business as Black Hills Energy). | ||||
SEC | United States Securities and Exchange Commission | ||||
Service Guard Comfort Plan | Appliance protection plan that provides home appliance repair services through on-going monthly service agreements to residential utility customers. | ||||
S&P | S&P Global Ratings, a division of S&P Global Inc. | ||||
SOFR | Secured Overnight Financing Rate | ||||
South Dakota Electric | Black Hills Power, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation, providing electric service to customers in Montana, South Dakota and Wyoming (doing business as Black Hills Energy). | ||||
SSIR | System Safety and Integrity Rider | ||||
Tech Services | Non-regulated product lines delivered by our Utilities that 1) provide electrical system construction services to large industrial customers of our electric utilities, and 2) serve gas transportation customers throughout its service territory by constructing and maintaining customer-owned gas infrastructure facilities, typically through one-time contracts. | ||||
Utilities | Black | ||||
4
Wind Capacity Factor | Measures the amount of electricity a wind turbine produces in a given time period relative to its maximum potential. | ||||
Winter Storm Uri | February 2021 winter weather event that caused extreme cold temperatures in the central United States and led to unprecedented fluctuations in customer demand and market pricing for natural gas and energy. | ||||
WPSC | Wyoming Public Service Commission | ||||
WRDC | Wyodak Resources Development Corp., a direct, wholly-owned subsidiary of Black Hills Non-regulated Holdings, providing coal supply primarily to five on-site, mine-mouth generating facilities (doing business as Black Hills Energy). | ||||
Wygen I | A mine-mouth, coal-fired power plant with a total capacity of 90 MW located at our Gillette, Wyoming energy complex. Black Hills Wyoming owns a 76.5% of the facility and Municipal Energy Agency of Nebraska (MEAN) owns the remaining 23.5%. | ||||
Wyodak Plant | The 362 MW mine-mouth, coal-fired generating facility near Gillette, Wyoming, jointly owned by PacifiCorp (80%) and South Dakota Electric (20%). Our WRDC mine supplies all of the fuel for the facility. | ||||
Wyoming Electric | Cheyenne Light, Fuel and Power Company, a direct, wholly-owned subsidiary of Black Hills Corporation, providing electric service to customers in the Cheyenne, Wyoming area (doing business as Black Hills Energy). | ||||
Wyoming Gas | Black Hills Wyoming Gas, LLC, an indirect and wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas services to customers in Wyoming (doing business as Black Hills Energy). | ||||
Wyoming Integrity Rider | The Wyoming Integrity Rider (WIR) is a WPSC-approved tariff that allows us to recover costs from customers associated with ongoing infrastructure replacement, gas meter and yard line replacement projects driven by federal regulation. | ||||
5
FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q includes “forward-looking statements” as defined by the SEC. Forward-looking statements are all statements other than statements of historical fact, including without limitation those statements that are identified by the words “anticipates,” “estimates,” “expects,” “intends,” “plans,” “predicts” and similar expressions, and include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, including without limitation, the risk factors described in Item 1A of Part I of our 20212022 Annual Report on Form 10-K, Part II, Item 1A of this Quarterly Report on Form 10-Q and other reports that we file with the SEC from time to time, and the following:
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME
| (unaudited) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||
| (in thousands, except per share amounts) | ||||||||||||||
| Revenue | $ | 462,612 | $ | 380,590 | $ | 1,760,377 | $ | 1,386,594 | ||||||
| Operating expenses: | ||||||||||||||
| Fuel, purchased power and cost of natural gas sold | 168,535 | 94,057 | 793,632 | 495,678 | ||||||||||
| Operations and maintenance | 134,449 | 122,277 | 403,549 | 375,201 | ||||||||||
| Depreciation, depletion and amortization | 64,019 | 59,159 | 188,610 | 174,871 | ||||||||||
| Taxes - property and production | 16,130 | 15,224 | 49,365 | 45,390 | ||||||||||
| Total operating expenses | 383,133 | 290,717 | 1,435,156 | 1,091,140 | ||||||||||
| Operating income | 79,479 | 89,873 | 325,221 | 295,454 | ||||||||||
| Other income (expense): | ||||||||||||||
| Interest expense incurred net of amounts capitalized (including amortization of debt issuance costs, premiums and discounts) | (40,580) | (38,604) | (118,454) | (115,098) | ||||||||||
| Interest income | 561 | 586 | 1,126 | 1,278 | ||||||||||
| Other income, net | 464 | 1,560 | 2,731 | 1,635 | ||||||||||
| Total other income (expense) | (39,555) | (36,458) | (114,597) | (112,185) | ||||||||||
| Income before income taxes | 39,924 | 53,415 | 210,624 | 183,269 | ||||||||||
| Income tax (expense) | (2,090) | (5,253) | (15,920) | (6,333) | ||||||||||
| Net income | 37,834 | 48,162 | 194,704 | 176,936 | ||||||||||
| Net income attributable to non-controlling interest | (2,861) | (4,050) | (8,790) | (11,347) | ||||||||||
| Net income available for common stock | $ | 34,973 | $ | 44,112 | $ | 185,914 | $ | 165,589 | ||||||
| Earnings per share of common stock: | ||||||||||||||
| Earnings per share, Basic | $ | 0.54 | $ | 0.70 | $ | 2.87 | $ | 2.63 | ||||||
| Earnings per share, Diluted | $ | 0.54 | $ | 0.70 | $ | 2.86 | $ | 2.63 | ||||||
| Weighted average common shares outstanding: | ||||||||||||||
| Basic | 64,876 | 63,341 | 64,722 | 62,950 | ||||||||||
| Diluted | 65,061 | 63,436 | 64,910 | 63,046 | ||||||||||
(unaudited) | Three Months Ended |
| Nine Months Ended |
| ||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||
| (in thousands, except per share amounts) |
| ||||||||||
Revenue | $ | 407,126 |
| $ | 462,612 |
| $ | 1,739,568 |
| $ | 1,760,377 |
|
|
|
|
|
|
|
|
| |||||
Operating expenses: |
|
|
|
|
|
|
|
| ||||
Fuel, purchased power and cost of natural gas sold |
| 102,241 |
|
| 168,535 |
|
| 749,753 |
|
| 793,632 |
|
Operations and maintenance |
| 125,767 |
|
| 134,449 |
|
| 412,522 |
|
| 403,549 |
|
Depreciation, depletion and amortization |
| 64,878 |
|
| 64,019 |
|
| 191,235 |
|
| 188,610 |
|
Taxes - property and production |
| 16,469 |
|
| 16,130 |
|
| 49,888 |
|
| 49,365 |
|
Total operating expenses |
| 309,355 |
|
| 383,133 |
|
| 1,403,398 |
|
| 1,435,156 |
|
|
|
|
|
|
|
|
| |||||
Operating income |
| 97,771 |
|
| 79,479 |
|
| 336,170 |
|
| 325,221 |
|
|
|
|
|
|
|
|
| |||||
Other income (expense): |
|
|
|
|
|
|
|
| ||||
Interest expense incurred net of amounts capitalized |
| (44,477 | ) |
| (40,580 | ) |
| (131,809 | ) |
| (118,454 | ) |
Interest income |
| 3,479 |
|
| 561 |
|
| 5,786 |
|
| 1,126 |
|
Other income (expense), net |
| (647 | ) |
| 464 |
|
| (1,513 | ) |
| 2,731 |
|
Total other income (expense) |
| (41,645 | ) |
| (39,555 | ) |
| (127,536 | ) |
| (114,597 | ) |
|
|
|
|
|
|
|
| |||||
Income before income taxes |
| 56,126 |
|
| 39,924 |
|
| 208,634 |
|
| 210,624 |
|
Income tax (expense) |
| (7,366 | ) |
| (2,090 | ) |
| (15,950 | ) |
| (15,920 | ) |
Net income |
| 48,760 |
|
| 37,834 |
|
| 192,684 |
|
| 194,704 |
|
Net income attributable to non-controlling interest |
| (3,377 | ) |
| (2,861 | ) |
| (10,164 | ) |
| (8,790 | ) |
Net income available for common stock | $ | 45,383 |
| $ | 34,973 |
| $ | 182,520 |
| $ | 185,914 |
|
|
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|
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| |||||
Earnings per share of common stock: |
|
|
|
|
|
|
|
| ||||
Earnings per share, Basic | $ | 0.67 |
| $ | 0.54 |
| $ | 2.74 |
| $ | 2.87 |
|
Earnings per share, Diluted | $ | 0.67 |
| $ | 0.54 |
| $ | 2.74 |
| $ | 2.86 |
|
|
|
|
|
|
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| |||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
| ||||
Basic |
| 67,315 |
|
| 64,876 |
|
| 66,652 |
|
| 64,722 |
|
Diluted |
| 67,389 |
|
| 65,061 |
|
| 66,725 |
|
| 64,910 |
|
The accompanying Condensed Notes to Condensed Consolidated Financial Statements are an integral part of these Condensed Consolidated Financial Statements.
7
BLACK HILLS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| (unaudited) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||
| (in thousands) | ||||||||||||||
| Net income | $ | 37,834 | $ | 48,162 | $ | 194,704 | $ | 176,936 | ||||||
| Other comprehensive income (loss), net of tax: | ||||||||||||||
| Reclassification adjustments of benefit plan liability - prior service cost (net of tax of $8, $6, $22 and $21, respectively) | (16) | (19) | (48) | (53) | ||||||||||
| Reclassification adjustments of benefit plan liability - net loss (net of tax of $(66), $(139), $(179) and $(513), respectively) | 122 | 459 | 384 | 1,280 | ||||||||||
| Derivative instruments designated as cash flow hedges: | ||||||||||||||
| Reclassification of net realized losses on settled/amortized interest rate swaps (net of tax of $(134), $(55), $(549) and $(395), respectively) | 578 | 657 | 1,589 | 1,743 | ||||||||||
| Net unrealized gains on commodity derivatives (net of tax of $(559), $(1,437), $(165) and $(1,776), respectively) | 1,776 | 4,430 | 509 | 5,476 | ||||||||||
| Reclassification of net realized (gains) on settled commodity derivatives (net of tax of $10, $81, $881 and $87, respectively) | (33) | (250) | (2,739) | (269) | ||||||||||
| Other comprehensive income (loss), net of tax | 2,427 | 5,277 | (305) | 8,177 | ||||||||||
| Comprehensive income | 40,261 | 53,439 | 194,399 | 185,113 | ||||||||||
| Less: comprehensive income attributable to non-controlling interest | (2,861) | (4,050) | (8,790) | (11,347) | ||||||||||
| Comprehensive income available for common stock | $ | 37,400 | $ | 49,389 | $ | 185,609 | $ | 173,766 | ||||||
(unaudited) | Three Months Ended |
| Nine Months Ended |
| ||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||
| (in thousands) |
| ||||||||||
Net income | $ | 48,760 |
| $ | 37,834 |
| $ | 192,684 |
| $ | 194,704 |
|
|
|
|
|
|
|
|
| |||||
Other comprehensive income (loss), net of tax; |
|
|
|
|
|
|
|
| ||||
Reclassification adjustments of benefit plan liability - prior service cost (net of tax of $--, $8, $-- and $22, respectively) |
| - |
|
| (16 | ) |
| - |
|
| (48 | ) |
Reclassification adjustments of benefit plan liability - net loss |
| 24 |
|
| 122 |
|
| 67 |
|
| 384 |
|
Derivative instruments designated as cash flow hedges: |
|
|
|
|
|
|
|
| ||||
Reclassification of net realized (gains) losses on settled/amortized interest rate swaps (net of tax of $(162), $(134), $(489) and $(549), respectively) |
| 550 |
|
| 578 |
|
| 1,649 |
|
| 1,589 |
|
Net unrealized gains (losses) on commodity derivatives |
| (195 | ) |
| 1,776 |
|
| (937 | ) |
| 509 |
|
Reclassification of net realized (gains) losses on settled commodity derivatives (net of tax of $(8), $10, $(592) and $881, respectively) |
| 26 |
|
| (33 | ) |
| 1,881 |
|
| (2,739 | ) |
Other comprehensive income, net of tax |
| 405 |
|
| 2,427 |
|
| 2,660 |
|
| (305 | ) |
|
|
|
|
|
|
|
| |||||
Comprehensive income |
| 49,165 |
|
| 40,261 |
|
| 195,344 |
|
| 194,399 |
|
Less: comprehensive income attributable to non-controlling interest |
| (3,377 | ) |
| (2,861 | ) |
| (10,164 | ) |
| (8,790 | ) |
Comprehensive income available for common stock | $ | 45,788 |
| $ | 37,400 |
| $ | 185,180 |
| $ | 185,609 |
|
The accompanying Condensed Notes to Condensed Consolidated Financial Statements are an integral part of these Condensed Consolidated Financial Statements.
8
BLACK HILLS CORPORATION
CONSOLIDATED BALANCE SHEETS
| (unaudited) | As of | ||||||||||
| September 30, 2022 | December 31, 2021 | ||||||||||
| (in thousands) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 11,693 | $ | 8,921 | |||||||
| Restricted cash and equivalents | 5,399 | 4,889 | |||||||||
| Accounts receivable, net | 249,747 | 321,652 | |||||||||
| Materials, supplies and fuel | 223,162 | 150,979 | |||||||||
| Derivative assets, current | 3,868 | 4,373 | |||||||||
| Income tax receivable, net | 17,112 | 18,017 | |||||||||
| Regulatory assets, current | 290,087 | 270,290 | |||||||||
| Other current assets | 48,180 | 29,012 | |||||||||
| Total current assets | 849,248 | 808,133 | |||||||||
| Property, plant and equipment | 8,236,053 | 7,856,573 | |||||||||
| Less: accumulated depreciation and depletion | (1,538,731) | (1,407,397) | |||||||||
| Total property, plant and equipment, net | 6,697,322 | 6,449,176 | |||||||||
| Other assets: | |||||||||||
| Goodwill | 1,299,454 | 1,299,454 | |||||||||
| Intangible assets, net | 9,883 | 10,770 | |||||||||
| Regulatory assets, non-current | 416,119 | 526,309 | |||||||||
| Other assets, non-current | 50,268 | 38,054 | |||||||||
| Total other assets, non-current | 1,775,724 | 1,874,587 | |||||||||
| TOTAL ASSETS | $ | 9,322,294 | $ | 9,131,896 | |||||||
(unaudited) | As of |
| ||||
| September 30, 2023 |
| December 31, 2022 |
| ||
| (in thousands) |
| ||||
ASSETS |
|
|
|
| ||
Current assets: |
|
|
|
| ||
Cash and cash equivalents | $ | 594,289 |
| $ | 21,430 |
|
Restricted cash and equivalents |
| 6,213 |
|
| 5,555 |
|
Accounts receivable, net |
| 228,830 |
|
| 508,192 |
|
Materials, supplies and fuel |
| 168,079 |
|
| 207,421 |
|
Derivative assets, current |
| 126 |
|
| 582 |
|
Income tax receivable, net |
| 17,749 |
|
| 17,637 |
|
Regulatory assets, current |
| 191,746 |
|
| 260,312 |
|
Other current assets |
| 33,242 |
|
| 50,579 |
|
Total current assets |
| 1,240,274 |
|
| 1,071,708 |
|
|
|
|
| |||
Property, plant and equipment |
| 8,767,954 |
|
| 8,374,790 |
|
Less: accumulated depreciation and depletion |
| (1,755,606 | ) |
| (1,576,842 | ) |
Total property, plant and equipment, net |
| 7,012,348 |
|
| 6,797,948 |
|
|
|
|
| |||
Other assets: |
|
|
|
| ||
Goodwill |
| 1,299,454 |
|
| 1,299,454 |
|
Intangible assets, net |
| 8,708 |
|
| 9,589 |
|
Regulatory assets, non-current |
| 313,113 |
|
| 392,669 |
|
Other assets, non-current |
| 59,031 |
|
| 46,862 |
|
Total other assets, non-current |
| 1,680,306 |
|
| 1,748,574 |
|
|
|
|
| |||
TOTAL ASSETS | $ | 9,932,928 |
| $ | 9,618,230 |
|
The accompanying Condensed Notes to Condensed Consolidated Financial Statements are an integral part of these Condensed Consolidated Financial Statements.
9
BLACK HILLS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Continued)
| (unaudited) | As of | ||||||||||
| September 30, 2022 | December 31, 2021 | ||||||||||
| (in thousands, except share amounts) | |||||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 187,046 | $ | 217,761 | |||||||
| Accrued liabilities | 250,835 | 244,759 | |||||||||
| Derivative liabilities, current | 5,569 | 1,439 | |||||||||
| Regulatory liabilities, current | 24,797 | 17,574 | |||||||||
| Notes payable | 501,350 | 420,180 | |||||||||
| Total current liabilities | 969,597 | 901,713 | |||||||||
| Long-term debt, net of current maturities | 4,131,033 | 4,126,923 | |||||||||
| Deferred credits and other liabilities: | |||||||||||
| Deferred income tax liabilities, net | 491,859 | 465,388 | |||||||||
| Regulatory liabilities, non-current | 469,963 | 485,377 | |||||||||
| Benefit plan liabilities | 120,629 | 123,925 | |||||||||
| Other deferred credits and other liabilities | 155,456 | 141,447 | |||||||||
| Total deferred credits and other liabilities | 1,237,907 | 1,216,137 | |||||||||
| Equity: | |||||||||||
| Stockholders’ equity — | |||||||||||
| Common stock $1 par value; 100,000,000 shares authorized; issued 65,105,205 and 64,793,095 shares, respectively | 65,105 | 64,793 | |||||||||
| Additional paid-in capital | 1,811,093 | 1,783,436 | |||||||||
| Retained earnings | 1,032,522 | 962,458 | |||||||||
| Treasury stock, at cost – 26,208 and 54,078 shares, respectively | (1,715) | (3,509) | |||||||||
| Accumulated other comprehensive (loss) | (20,389) | (20,084) | |||||||||
| Total stockholders’ equity | 2,886,616 | 2,787,094 | |||||||||
| Non-controlling interest | 97,141 | 100,029 | |||||||||
| Total equity | 2,983,757 | 2,887,123 | |||||||||
| TOTAL LIABILITIES AND TOTAL EQUITY | $ | 9,322,294 | $ | 9,131,896 | |||||||
(unaudited) | As of |
| ||||
| September 30, 2023 |
| December 31, 2022 |
| ||
| (in thousands) |
| ||||
LIABILITIES AND EQUITY |
|
|
|
| ||
Current liabilities: |
|
|
|
| ||
Accounts payable | $ | 124,033 |
| $ | 310,020 |
|
Accrued liabilities |
| 257,458 |
|
| 243,457 |
|
Derivative liabilities, current |
| 2,193 |
|
| 6,600 |
|
Regulatory liabilities, current |
| 93,988 |
|
| 46,013 |
|
Notes payable |
| - |
|
| 535,600 |
|
Current maturities of long-term debt |
| 1,125,000 |
|
| 525,000 |
|
Total current liabilities |
| 1,602,672 |
|
| 1,666,690 |
|
|
|
|
| |||
Long-term debt, net of current maturities |
| 3,799,510 |
|
| 3,607,340 |
|
|
|
|
| |||
Deferred credits and other liabilities: |
|
|
|
| ||
Deferred income tax liabilities, net |
| 530,985 |
|
| 508,941 |
|
Regulatory liabilities, non-current |
| 468,969 |
|
| 472,560 |
|
Benefit plan liabilities |
| 119,046 |
|
| 116,742 |
|
Other deferred credits and other liabilities |
| 152,174 |
|
| 156,062 |
|
Total deferred credits and other liabilities |
| 1,271,174 |
|
| 1,254,305 |
|
|
|
|
| |||
Commitments, contingencies and guarantees (Note 3) |
|
|
|
| ||
|
|
|
| |||
Equity: |
|
|
|
| ||
Stockholder's equity - |
|
|
|
| ||
Common stock $1 par value; 100,000,000 shares authorized; issued 68,046,262 and 66,140,396 shares, respectively |
| 68,046 |
|
| 66,140 |
|
Additional paid-in capital |
| 1,994,439 |
|
| 1,882,653 |
|
Retained earnings |
| 1,121,196 |
|
| 1,064,122 |
|
Treasury stock, at cost - 54,428 and 36,726 shares, respectively |
| (3,457 | ) |
| (2,435 | ) |
Accumulated other comprehensive income (loss) |
| (12,907 | ) |
| (15,567 | ) |
Total stockholders' equity |
| 3,167,317 |
|
| 2,994,913 |
|
Non-controlling interest |
| 92,255 |
|
| 94,982 |
|
Total equity |
| 3,259,572 |
|
| 3,089,895 |
|
|
|
|
| |||
TOTAL LIABILITIES AND TOTAL EQUITY | $ | 9,932,928 |
| $ | 9,618,230 |
|
The accompanying Condensed Notes to Condensed Consolidated Financial Statements are an integral part of these Condensed Consolidated Financial Statements.
10
BLACK HILLS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
| (unaudited) | Nine Months Ended September 30, | |||||||
| 2022 | 2021 | |||||||
| Operating activities: | (in thousands) | |||||||
| Net income | $ | 194,704 | $ | 176,936 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Depreciation, depletion and amortization | 188,610 | 174,871 | ||||||
| Deferred financing cost amortization | 7,430 | 3,892 | ||||||
| Stock compensation | 6,779 | 7,245 | ||||||
| Deferred income taxes | 16,062 | 5,844 | ||||||
| Employee benefit plans | 2,677 | 6,779 | ||||||
| Other adjustments, net | (10,243) | 2,708 | ||||||
| Changes in certain operating assets and liabilities: | ||||||||
| Materials, supplies and fuel | (88,405) | (29,948) | ||||||
| Accounts receivable and other current assets | 64,280 | 97,348 | ||||||
| Accounts payable and other current liabilities | 5,963 | (20,094) | ||||||
| Regulatory assets | 118,330 | (559,389) | ||||||
| Regulatory liabilities | — | (9,533) | ||||||
| Other operating activities, net | (11,900) | (1,419) | ||||||
| Net cash provided by (used in) operating activities | 494,287 | (144,760) | ||||||
| Investing activities: | ||||||||
| Property, plant and equipment additions | (466,302) | (497,849) | ||||||
| Other investing activities | (19) | 13,743 | ||||||
| Net cash (used in) investing activities | (466,321) | (484,106) | ||||||
| Financing activities: | ||||||||
| Dividends paid on common stock | (115,850) | (106,957) | ||||||
| Common stock issued | 20,027 | 62,977 | ||||||
| Term loan - borrowings | — | 800,000 | ||||||
| Term loan - repayments | — | (800,000) | ||||||
| Net borrowings (payments) of Revolving Credit Facility and CP Program | 81,170 | 98,485 | ||||||
| Long-term debt - issuances | — | 600,000 | ||||||
| Long-term debt - repayments | — | (8,436) | ||||||
| Distributions to non-controlling interest | (11,678) | (10,230) | ||||||
| Other financing activities | 1,647 | (2,778) | ||||||
| Net cash provided by (used in) financing activities | (24,684) | 633,061 | ||||||
| Net change in cash, restricted cash and cash equivalents | 3,282 | 4,195 | ||||||
| Cash, restricted cash and cash equivalents at beginning of period | 13,810 | 10,739 | ||||||
| Cash, restricted cash and cash equivalents at end of period | $ | 17,092 | $ | 14,934 | ||||
| Supplemental cash flow information: | ||||||||
| Cash (paid) refunded during the period: | ||||||||
| Interest, net of amounts capitalized | $ | (98,227) | $ | (93,325) | ||||
| Income taxes | 746 | 1,486 | ||||||
| Non-cash investing and financing activities: | ||||||||
| Accrued property, plant and equipment purchases at September 30 | 42,687 | 55,619 | ||||||
(unaudited) | Nine Months Ended September 30, |
| ||||
| 2023 |
| 2022 |
| ||
Operating activities: | (in thousands) |
| ||||
Net income | $ | 192,684 |
| $ | 194,704 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
| ||
Depreciation, depletion and amortization |
| 191,235 |
|
| 188,610 |
|
Deferred financing cost amortization |
| 6,928 |
|
| 7,430 |
|
Stock compensation |
| 4,563 |
|
| 6,779 |
|
Deferred income taxes |
| 16,114 |
|
| 16,062 |
|
Employee benefit plans |
| 7,929 |
|
| 2,677 |
|
Other adjustments, net |
| (6,099 | ) |
| (10,243 | ) |
Changes in certain operating assets and liabilities: |
|
|
|
| ||
Materials, supplies and fuel |
| 43,546 |
|
| (88,405 | ) |
Accounts receivable and other current assets |
| 302,764 |
|
| 64,280 |
|
Accounts payable and other current liabilities |
| (186,500 | ) |
| 5,963 |
|
Regulatory assets |
| 199,093 |
|
| 118,330 |
|
Other operating activities, net |
| (16,205 | ) |
| (11,900 | ) |
Net cash provided by operating activities |
| 756,052 |
|
| 494,287 |
|
|
|
|
| |||
Investing activities: |
|
|
|
| ||
Property, plant and equipment additions |
| (421,770 | ) |
| (466,302 | ) |
Other investing activities |
| 17,985 |
|
| (19 | ) |
Net cash (used in) investing activities |
| (403,785 | ) |
| (466,321 | ) |
|
|
|
| |||
Financing activities: |
|
|
|
| ||
Dividends paid on common stock |
| (125,446 | ) |
| (115,850 | ) |
Common stock issued |
| 107,380 |
|
| 20,027 |
|
Net borrowings (payments) of Revolving Credit Facility and CP Program |
| (535,600 | ) |
| 81,170 |
|
Long-term debt - issuance |
| 800,000 |
|
| - |
|
Distributions to non-controlling interests |
| (12,891 | ) |
| (11,678 | ) |
Other financing activities |
| (12,193 | ) |
| 1,647 |
|
Net cash provided by (used in) financing activities |
| 221,250 |
|
| (24,684 | ) |
|
|
|
| |||
Net change in cash, restricted cash and cash equivalents |
| 573,517 |
|
| 3,282 |
|
|
|
|
| |||
Cash, restricted cash and cash equivalents beginning of period |
| 26,985 |
|
| 13,810 |
|
Cash, restricted cash and cash equivalents end of period | $ | 600,502 |
| $ | 17,092 |
|
|
|
|
| |||
Supplemental cash flow information: |
|
|
|
| ||
Cash (paid) refunded during the period: |
|
|
|
| ||
Interest (net of amounts capitalized) | $ | (108,813 | ) | $ | (98,227 | ) |
Income taxes |
| 51 |
|
| 746 |
|
Non-cash investing and financing activities: |
|
|
|
| ||
Accrued property, plant and equipment purchases at September 30, |
| 52,984 |
|
| 42,687 |
|
The accompanying Condensed Notes to Condensed Consolidated Financial Statements are an integral part of these Condensed Consolidated Financial Statements.
11
BLACK HILLS CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY
| (unaudited) | Common Stock | Treasury Stock | |||||||||||||||||||||||||||
| (in thousands except share amounts) | Shares | Value | Shares | Value | Additional Paid in Capital | Retained Earnings | AOCI | Non-controlling Interest | Total | ||||||||||||||||||||
| December 31, 2021 | 64,793,095 | $ | 64,793 | 54,078 | $ | (3,509) | $ | 1,783,436 | $ | 962,458 | $ | (20,084) | $ | 100,029 | $ | 2,887,123 | |||||||||||||
| Net income | — | — | — | — | — | 117,526 | — | 3,498 | 121,024 | ||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | 6 | — | 6 | ||||||||||||||||||||
| Dividends on common stock ($0.595 per share) | — | — | — | — | — | (38,533) | — | — | (38,533) | ||||||||||||||||||||
| Share-based compensation | 425 | — | (34,393) | 2,222 | (191) | — | — | — | 2,031 | ||||||||||||||||||||
| Issuance of common stock | 55,707 | 56 | — | — | 3,776 | — | — | — | 3,832 | ||||||||||||||||||||
| Issuance costs | — | — | — | — | (41) | — | — | — | (41) | ||||||||||||||||||||
| Distributions to non-controlling interest | — | — | — | — | — | — | — | (4,420) | (4,420) | ||||||||||||||||||||
| March 31, 2022 | 64,849,227 | $ | 64,849 | 19,685 | $ | (1,287) | $ | 1,786,980 | $ | 1,041,451 | $ | (20,078) | $ | 99,107 | $ | 2,971,022 | |||||||||||||
| Net income | — | — | — | — | — | 33,415 | — | 2,431 | 35,846 | ||||||||||||||||||||
| Other comprehensive (loss), net of tax | — | — | — | — | — | — | (2,738) | — | (2,738) | ||||||||||||||||||||
| Dividends on common stock ($0.595 per share) | — | — | — | — | — | (38,603) | — | — | (38,603) | ||||||||||||||||||||
| Share-based compensation | 39,066 | 39 | 4,006 | (255) | 5,370 | — | — | — | 5,154 | ||||||||||||||||||||
| Issuance of common stock | 216,885 | 217 | — | — | 16,353 | — | — | — | 16,570 | ||||||||||||||||||||
| Issuance costs | — | — | — | — | (266) | — | — | — | (266) | ||||||||||||||||||||
| Distributions to non-controlling interest | — | — | — | — | — | — | — | (4,184) | (4,184) | ||||||||||||||||||||
| June 30, 2022 | 65,105,178 | $ | 65,105 | 23,691 | $ | (1,542) | $ | 1,808,437 | $ | 1,036,263 | $ | (22,816) | $ | 97,354 | $ | 2,982,801 | |||||||||||||
| Net income | — | — | — | — | — | 34,973 | — | 2,861 | 37,834 | ||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | 2,427 | — | 2,427 | ||||||||||||||||||||
| Dividends on common stock ($0.595 per share) | — | — | — | — | — | (38,714) | — | — | (38,714) | ||||||||||||||||||||
| Share-based compensation | 27 | — | 2,517 | (173) | 2,724 | — | — | — | 2,551 | ||||||||||||||||||||
| Issuance costs | — | — | — | — | (68) | — | — | — | (68) | ||||||||||||||||||||
| Distributions to non-controlling interest | — | — | — | — | — | — | — | (3,074) | (3,074) | ||||||||||||||||||||
| September 30, 2022 | 65,105,205 | $ | 65,105 | 26,208 | $ | (1,715) | $ | 1,811,093 | $ | 1,032,522 | $ | (20,389) | $ | 97,141 | $ | 2,983,757 | |||||||||||||
(unaudited) | Common Stock |
| Treasury Stock |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(in thousands except share amounts) | Shares |
| Value |
| Shares |
| Value |
| Additional Paid in Capital |
| Retained Earnings |
| AOCI |
| Non-controlling Interest |
| Total |
| |||||||||
December 31, 2022 |
| 66,140,396 |
| $ | 66,140 |
|
| 36,726 |
| $ | (2,435 | ) | $ | 1,882,653 |
| $ | 1,064,122 |
| $ | (15,567 | ) | $ | 94,982 |
| $ | 3,089,895 |
|
Net income |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 114,084 |
|
| - |
|
| 3,296 |
|
| 117,380 |
|
Other comprehensive income, net of tax |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 1,220 |
|
| - |
|
| 1,220 |
|
Dividends on common stock ($0.625 per share) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (41,362 | ) |
| - |
|
| - |
|
| (41,362 | ) |
Share-based compensation |
| 84,735 |
|
| 85 |
|
| 4,388 |
|
| (262 | ) |
| 1,886 |
|
| - |
|
| - |
|
| - |
|
| 1,709 |
|
Issuance of common stock |
| 445,578 |
|
| 446 |
|
| - |
|
| - |
|
| 27,273 |
|
| - |
|
| - |
|
| - |
|
| 27,719 |
|
Issuance costs |
| - |
|
| - |
|
| - |
|
| - |
|
| (336 | ) |
| - |
|
| - |
|
| - |
|
| (336 | ) |
Distributions to non-controlling interest |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (4,494 | ) |
| (4,494 | ) |
March 31, 2023 |
| 66,670,709 |
| $ | 66,671 |
|
| 41,114 |
| $ | (2,697 | ) | $ | 1,911,476 |
| $ | 1,136,844 |
| $ | (14,347 | ) | $ | 93,784 |
| $ | 3,191,731 |
|
Net income |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 23,053 |
|
| - |
|
| 3,491 |
|
| 26,544 |
|
Other comprehensive income, net of tax |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 1,035 |
|
| - |
|
| 1,035 |
|
Dividends on common stock ($0.625 per share) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (41,752 | ) |
| - |
|
| - |
|
| (41,752 | ) |
Share-based compensation |
| 8,492 |
|
| 8 |
|
| 7,509 |
|
| (470 | ) |
| 2,888 |
|
| - |
|
| - |
|
| - |
|
| 2,426 |
|
Issuance of common stock |
| 436,202 |
|
| 436 |
|
| - |
|
| - |
|
| 27,274 |
|
| - |
|
| - |
|
| - |
|
| 27,710 |
|
Issuance costs |
| - |
|
| - |
|
| - |
|
| - |
|
| (404 | ) |
| - |
|
| - |
|
| - |
|
| (404 | ) |
Distributions to non-controlling interest |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (4,523 | ) |
| (4,523 | ) |
June 30, 2023 |
| 67,115,403 |
| $ | 67,115 |
|
| 48,623 |
| $ | (3,167 | ) | $ | 1,941,234 |
| $ | 1,118,145 |
| $ | (13,312 | ) | $ | 92,752 |
| $ | 3,202,767 |
|
Net income |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 45,383 |
|
| - |
|
| 3,377 |
|
| 48,760 |
|
Other comprehensive income, net of tax |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 405 |
|
| - |
|
| 405 |
|
Dividends on common stock ($0.625 per share) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (42,332 | ) |
| - |
|
| - |
|
| (42,332 | ) |
Share-based compensation |
| 15 |
|
| - |
|
| 5,805 |
|
| (290 | ) |
| 1,445 |
|
| - |
|
| - |
|
| - |
|
| 1,155 |
|
Issuance of common stock |
| 930,844 |
|
| 931 |
|
| - |
|
| - |
|
| 52,433 |
|
|
|
|
|
|
|
| 53,364 |
| |||
Issuance costs |
| - |
|
| - |
|
| - |
|
| - |
|
| (673 | ) |
| - |
|
| - |
|
| - |
|
| (673 | ) |
Distributions to non-controlling interest |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (3,874 | ) |
| (3,874 | ) |
September 30, 2023 |
| 68,046,262 |
| $ | 68,046 |
|
| 54,428 |
| $ | (3,457 | ) | $ | 1,994,439 |
| $ | 1,121,196 |
| $ | (12,907 | ) | $ | 92,255 |
| $ | 3,259,572 |
|
| (unaudited) | Common Stock | Treasury Stock | |||||||||||||||||||||||||||
| (in thousands except share amounts) | Shares | Value | Shares | Value | Additional Paid in Capital | Retained Earnings | AOCI | Non-controlling Interest | Total | ||||||||||||||||||||
| December 31, 2020 | 62,827,179 | $ | 62,827 | 32,492 | $ | (2,119) | $ | 1,657,285 | $ | 870,738 | $ | (27,346) | $ | 101,262 | $ | 2,662,647 | |||||||||||||
| Net income | — | — | — | — | — | 96,316 | — | 4,171 | 100,487 | ||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | 1,018 | — | 1,018 | ||||||||||||||||||||
| Dividends on common stock ($0.565 per share) | — | — | — | — | — | (35,514) | — | — | (35,514) | ||||||||||||||||||||
| Share-based compensation | 82,794 | 83 | 7,448 | (445) | 1,672 | — | — | — | 1,310 | ||||||||||||||||||||
| Other | — | — | — | — | — | (2) | — | — | (2) | ||||||||||||||||||||
| Distributions to non-controlling interest | — | — | — | — | — | — | — | (4,644) | (4,644) | ||||||||||||||||||||
| March 31, 2021 | 62,909,973 | $ | 62,910 | 39,940 | $ | (2,564) | $ | 1,658,957 | $ | 931,538 | $ | (26,328) | $ | 100,789 | $ | 2,725,302 | |||||||||||||
| Net income | — | — | — | — | — | 25,161 | — | 3,126 | 28,287 | ||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | 1,882 | — | 1,882 | ||||||||||||||||||||
| Dividends on common stock ($0.565 per share) | — | — | — | — | — | (35,578) | — | — | (35,578) | ||||||||||||||||||||
| Share-based compensation | 20,905 | 21 | 6,588 | (424) | 3,698 | — | — | — | 3,295 | ||||||||||||||||||||
| Issuance of common stock | 596,035 | 596 | — | — | 39,636 | — | — | — | 40,232 | ||||||||||||||||||||
| Issuance costs | — | — | — | — | (466) | — | — | — | (466) | ||||||||||||||||||||
| Other | — | — | — | — | — | 1 | — | — | 1 | ||||||||||||||||||||
| Distributions to non-controlling interest | — | — | — | — | — | — | — | (4,061) | (4,061) | ||||||||||||||||||||
| June 30, 2021 | 63,526,913 | $ | 63,527 | 46,528 | $ | (2,988) | $ | 1,701,825 | $ | 921,122 | $ | (24,446) | $ | 99,854 | $ | 2,758,894 | |||||||||||||
| Net income | — | — | — | — | — | 44,112 | — | 4,050 | 48,162 | ||||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | — | — | — | — | 5,277 | — | 5,277 | ||||||||||||||||||||
| Dividends on common stock ($0.565 per share) | — | — | — | — | — | (35,865) | — | — | (35,865) | ||||||||||||||||||||
| Share-based compensation | 17 | — | (2,643) | 169 | 1,849 | — | — | — | 2,018 | ||||||||||||||||||||
| Issuance of common stock | 338,221 | 338 | — | — | 22,834 | — | — | — | 23,172 | ||||||||||||||||||||
| Issuance costs | — | — | — | — | (231) | — | — | — | (231) | ||||||||||||||||||||
| Distributions to non-controlling interest | — | — | — | — | — | — | — | (1,525) | (1,525) | ||||||||||||||||||||
| September 30, 2021 | 63,865,151 | $ | 63,865 | 43,885 | $ | (2,819) | $ | 1,726,277 | $ | 929,369 | $ | (19,169) | $ | 102,379 | $ | 2,799,902 | |||||||||||||
(unaudited) | Common Stock |
| Treasury Stock |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
(in thousands except share amounts) | Shares |
| Value |
| Shares |
| Value |
| Additional Paid in Capital |
| Retained Earnings |
| AOCI |
| Non-controlling Interest |
| Total |
| |||||||||
December 31, 2021 |
| 64,793,095 |
| $ | 64,793 |
|
| 54,078 |
| $ | (3,509 | ) | $ | 1,783,436 |
| $ | 962,458 |
| $ | (20,084 | ) | $ | 100,029 |
| $ | 2,887,123 |
|
Net income |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 117,526 |
|
| - |
|
| 3,498 |
|
| 121,024 |
|
Other comprehensive income, net of tax |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 6 |
|
| - |
|
| 6 |
|
Dividends on common stock ($0.595 per share) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (38,533 | ) |
| - |
|
| - |
|
| (38,533 | ) |
Share-based compensation |
| 425 |
|
| - |
|
| (34,393 | ) |
| 2,222 |
|
| (191 | ) |
| - |
|
| - |
|
| - |
|
| 2,031 |
|
Issuance of common stock |
| 55,707 |
|
| 56 |
|
| - |
|
| - |
|
| 3,776 |
|
| - |
|
| - |
|
| - |
|
| 3,832 |
|
Issuance costs |
| - |
|
| - |
|
| - |
|
| - |
|
| (41 | ) |
| - |
|
| - |
|
| - |
|
| (41 | ) |
Distributions to non-controlling interest |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (4,420 | ) |
| (4,420 | ) |
March 31, 2022 |
| 64,849,227 |
| $ | 64,849 |
|
| 19,685 |
| $ | (1,287 | ) | $ | 1,786,980 |
| $ | 1,041,451 |
| $ | (20,078 | ) | $ | 99,107 |
| $ | 2,971,022 |
|
Net income |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 33,415 |
|
| - |
|
| 2,431 |
|
| 35,846 |
|
Other comprehensive income, net of tax |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (2,738 | ) |
| - |
|
| (2,738 | ) |
Dividends on common stock ($0.595 per share) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (38,603 | ) |
| - |
|
| - |
|
| (38,603 | ) |
Share-based compensation |
| 39,066 |
|
| 39 |
|
| 4,006 |
|
| (255 | ) |
| 5,370 |
|
| - |
|
| - |
|
| - |
|
| 5,154 |
|
Issuance of common stock |
| 216,885 |
|
| 217 |
|
| - |
|
| - |
|
| 16,353 |
|
| - |
|
| - |
|
| - |
|
| 16,570 |
|
Issuance costs |
| - |
|
| - |
|
| - |
|
| - |
|
| (266 | ) |
| - |
|
| - |
|
| - |
|
| (266 | ) |
Distributions to non-controlling interest |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (4,184 | ) |
| (4,184 | ) |
June 30, 2022 |
| 65,105,178 |
| $ | 65,105 |
|
| 23,691 |
| $ | (1,542 | ) | $ | 1,808,437 |
| $ | 1,036,263 |
| $ | (22,816 | ) | $ | 97,354 |
| $ | 2,982,801 |
|
Net income |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 34,973 |
|
| - |
|
| 2,861 |
|
| 37,834 |
|
Other comprehensive income, net of tax |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 2,427 |
|
| - |
|
| 2,427 |
|
Dividends on common stock ($0.595 per share) |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (38,714 | ) |
| - |
|
| - |
|
| (38,714 | ) |
Share-based compensation |
| 27 |
|
| - |
|
| 2,517 |
|
| (173 | ) |
| 2,724 |
|
| - |
|
| - |
|
| - |
|
| 2,551 |
|
Issuance costs |
| - |
|
| - |
|
| - |
|
| - |
|
| (68 | ) |
| - |
|
| - |
|
| - |
|
| (68 | ) |
Distributions to non-controlling interest |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (3,074 | ) |
| (3,074 | ) |
September 30, 2022 |
| 65,105,205 |
| $ | 65,105 |
|
| 26,208 |
| $ | (1,715 | ) | $ | 1,811,093 |
| $ | 1,032,522 |
| $ | (20,389 | ) | $ | 97,141 |
| $ | 2,983,757 |
|
13
BLACK HILLS CORPORATION
Condensed Notes to Condensed Consolidated Financial Statements
(unaudited)
(Reference is made to Notes to Consolidated Financial Statements
included in the Company’s 20212022 Annual Report on Form 10-K)
The unaudited Condensed Consolidated Financial Statements included herein have been prepared by Black Hills Corporation (together with our subsidiaries the “Company”, “us”, “we” or “our”), pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAPaccounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, we believe that the footnotes adequately disclose the information presented. These Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and the notes included in our 20212022 Annual Report on Form 10-K.
The information furnished in the accompanying Condensed Consolidated Financial Statements reflects certain estimates required and all adjustments, including accruals, which are, in the opinion of management, necessary for a fair presentation of the September 30, 2022,2023, December 31, 20212022 and September 30, 20212022 financial information. Certain lines of business in which we operate are highly seasonal, and our interim results of operations are not necessarily indicative of the results of operations to be expected for an entire year.
| As of |
| As of |
| ||
| September 30, 2023 |
| December 31, 2022 |
| ||
Regulatory assets |
|
|
|
| ||
Winter Storm Uri | $ | 225,052 |
| $ | 347,980 |
|
Deferred energy and fuel cost adjustments |
| 59,129 |
|
| 72,580 |
|
Deferred gas cost adjustments |
| 8,048 |
|
| 12,147 |
|
Gas price derivatives |
| 3,849 |
|
| 8,793 |
|
Deferred taxes on AFUDC |
| 7,180 |
|
| 7,333 |
|
Employee benefit plans and related deferred taxes |
| 87,423 |
|
| 89,259 |
|
Environmental |
| 2,868 |
|
| 1,343 |
|
Loss on reacquired debt |
| 17,865 |
|
| 19,213 |
|
Deferred taxes on flow through accounting |
| 69,259 |
|
| 69,529 |
|
Decommissioning costs |
| 2,407 |
|
| 3,472 |
|
Other regulatory assets |
| 21,779 |
|
| 21,332 |
|
Total regulatory assets |
| 504,859 |
|
| 652,981 |
|
Less current regulatory assets |
| (191,746 | ) |
| (260,312 | ) |
Regulatory assets, non-current | $ | 313,113 |
| $ | 392,669 |
|
|
|
|
| |||
Regulatory liabilities |
|
|
|
| ||
Deferred energy and gas costs | $ | 91,273 |
| $ | 41,722 |
|
Employee benefit plan costs and related deferred taxes |
| 33,006 |
|
| 34,258 |
|
Cost of removal |
| 179,208 |
|
| 175,614 |
|
Excess deferred income taxes |
| 250,390 |
|
| 254,833 |
|
Other regulatory liabilities |
| 9,080 |
|
| 12,146 |
|
Total regulatory liabilities |
| 562,957 |
|
| 518,573 |
|
Less current regulatory liabilities |
| (93,988 | ) |
| (46,013 | ) |
Regulatory liabilities, non-current | $ | 468,969 |
| $ | 472,560 |
|
| As of | As of | |||||||
| September 30, 2022 | December 31, 2021 | |||||||
| Regulatory assets | ||||||||
Winter Storm Uri (a) | $ | 392,994 | $ | 509,025 | ||||
Deferred energy and fuel cost adjustments (b) | 74,998 | 59,973 | ||||||
Deferred gas cost adjustments (b) | 18,764 | 9,488 | ||||||
Gas price derivatives (b) | 10,776 | 2,584 | ||||||
Deferred taxes on AFUDC (b) | 7,407 | 7,457 | ||||||
Employee benefit plans and related deferred taxes (c) | 86,335 | 88,923 | ||||||
Environmental (b) | 1,346 | 1,385 | ||||||
Loss on reacquired debt (b) | 19,663 | 21,011 | ||||||
Deferred taxes on flow through accounting (b) | 66,039 | 63,243 | ||||||
Decommissioning costs (b) | 4,094 | 5,961 | ||||||
Other regulatory assets (b) | 23,790 | 27,549 | ||||||
| Total regulatory assets | 706,206 | 796,599 | ||||||
| Less current regulatory assets | (290,087) | (270,290) | ||||||
| Regulatory assets, non-current | $ | 416,119 | $ | 526,309 | ||||
| Regulatory liabilities | ||||||||
Deferred energy and gas costs (b) | $ | 6,283 | $ | 6,113 | ||||
Employee benefit plan costs and related deferred taxes (c) | 31,168 | 32,241 | ||||||
Cost of removal (b) | 174,312 | 179,976 | ||||||
Excess deferred income taxes (c) | 257,282 | 264,042 | ||||||
Other regulatory liabilities (c) | 25,715 | 20,579 | ||||||
| Total regulatory liabilities | 494,760 | 502,951 | ||||||
| Less current regulatory liabilities | (24,797) | (17,574) | ||||||
| Regulatory liabilities, non-current | $ | 469,963 | $ | 485,377 | ||||
Except as discussed below, there have been no other significant changes to our Regulatory Matters from those previously disclosed in Note 2 of the Notes to the Consolidated Financial Statements in our 20212022 Annual Report on Form 10-K.
RMNG Rate Review
On December 10, 2021, Arkansas Gas filedJuly 12, 2023, the CPUC approved a settlement agreement for RMNG's rate review with the APSC seeking recoveryfiled on October 7, 2022. The agreement is expected to generate $8.2 million in new annual revenue and establishes a weighted average cost of significant infrastructure investments in its 7,200-mile natural gas pipeline system. On October 10, 2022, the APSC approved a partial settlement agreementcapital of 6.93% with all intervening parties for a general rate increase and authorized a capital structure that reflects an equity range of 45% equity and 55%50% to 52%, a debt range of 50% to 48% and a return on equity range of 9.6%9.5% to 9.7%. The APSC’s decisionsettlement also shifts approximately $10$8.3 million of rider revenueSSIR revenues to base rates and is expected to generate $8.8 million of new annual revenue. The APSC also approved a new comprehensive safety and integrity rider which replaces three former riders.terminates the SSIR. New rates were effective on October 21, 2022.
Wyoming Gas
On May 18, 2023, Wyoming Gas filed a substantial increaserate review with the WPSC seeking recovery of significant infrastructure investments in heating and energy demand and contributed to unforeseeable and unprecedented market prices forits 6,400-mile natural gas and electricity. As a result, we incurred significant incremental fuel, purchased power and natural gas costs.
Wyoming Electric
On June 1, 2022, Wyoming Electric filed a rate review with the WPSC seeking recovery of significant infrastructure investments in its 1,330-mile1,330-mile electric distribution and 59-mile59-mile electric transmission systems. On January 26, 2023, the WPSC approved a settlement agreement with intervening parties for a general rate increase. The rate review requests $15settlement is expected to generate $8.7 million in new annual revenue with a capital structure of 54%52% equity, and 46%48% debt and a return on equity of 10.3%9.75%. New rates were effective March 1, 2023. The request seeksagreement also includes approval of a new rider that will be filed annually to finalize rates in the first quarter of 2023.recover transmission investments and expenses.
Except as described below, there have been no significant changes to commitments, contingencies and guarantees from those previously disclosed in Note 3 of our Notes to the Consolidated Financial Statements in our 20212022 Annual Report on Form 10-K except for those described below.
On April 13, 2022, a jury awarded $41$41 million for claims made by GT Resources, LLC (“GTR”) against BHC and two of its subsidiaries (Black Hills Exploration and Production, Inc. and Black Hills Gas Resources, Inc.), which ceased oil and natural gas operations in 2018 as part of BHC’s decision to exit the exploration and production business. The claims involved a dispute over a 2.3 million-acre concession award in Costa Rica which was acquired by a BHC subsidiary in 2003. GTR retained rights to receive a royalty interest on any hydrocarbon production from the concession upon the occurrence of contingent events. GTR contended that BHC and its subsidiaries failed to adequately pursue the opportunity and failed to transfer the concession to GTR. We believe we have meritorious defensesappealed this verdict to the verdictColorado Court of Appeals. On October 19, 2023, the Appellate Court reversed and have appealedremanded the verdict.case with directions limiting any retrial to the narrow issue of whether there was improper interference with the prospective conveyance of the concession. We continue to believe this lawsuit has no merit and will vigorously defend it. At this time, we do not believe that the liability related toany losses from this matter if any, is not reasonably estimable.
Gain Contingency - Wygen 1 Business Interruption Insurance Recovery
In September 2021, Wygen I experienced an unplanned outage that continued until December 2021. For the end of 2023. The agreement will expire 20 years after construction completion. The wind energy from this PPA will be used to serve our expanding partnerships with industrial customers in Cheyenne, Wyoming.
15
| Three Months Ended September 30, 2022 | Electric Utilities | Gas Utilities | Inter-company Revenues | Total | ||||||||||
| Customer types: | (in thousands) | |||||||||||||
| Retail | $ | 211,489 | $ | 157,203 | $ | — | $ | 368,692 | ||||||
| Transportation | — | 41,006 | (99) | 40,907 | ||||||||||
| Wholesale | 13,667 | — | — | 13,667 | ||||||||||
| Market - off-system sales | 16,770 | 186 | — | 16,956 | ||||||||||
| Transmission/Other | 15,919 | 8,875 | (4,148) | 20,646 | ||||||||||
| Revenue from contracts with customers | $ | 257,845 | $ | 207,270 | $ | (4,247) | $ | 460,868 | ||||||
| Other revenues | 824 | 1,018 | (98) | 1,744 | ||||||||||
| Total revenues | $ | 258,669 | $ | 208,288 | $ | (4,345) | $ | 462,612 | ||||||
| Timing of revenue recognition: | ||||||||||||||
| Services transferred at a point in time | $ | 7,928 | $ | — | $ | — | $ | 7,928 | ||||||
| Services transferred over time | 249,917 | 207,270 | (4,247) | 452,940 | ||||||||||
| Revenue from contracts with customers | $ | 257,845 | $ | 207,270 | $ | (4,247) | $ | 460,868 | ||||||
Three Months Ended September 30, 2023 | Electric Utilities |
| Gas Utilities |
| Inter-segment Revenues |
| Total |
| ||||
Customer types: | (in thousands) |
| ||||||||||
Retail | $ | 191,029 |
| $ | 120,803 |
| $ | - |
| $ | 311,832 |
|
Transportation |
| - |
|
| 42,654 |
|
| (114 | ) |
| 42,540 |
|
Wholesale |
| 9,441 |
|
| - |
|
| - |
|
| 9,441 |
|
Market - off-system sales |
| 12,999 |
|
| 25 |
|
| - |
|
| 13,024 |
|
Transmission/Other |
| 18,092 |
|
| 9,607 |
|
| (4,374 | ) |
| 23,325 |
|
Revenue from contracts with customers | $ | 231,561 |
| $ | 173,089 |
| $ | (4,488 | ) | $ | 400,162 |
|
Other revenues |
| 5,768 |
|
| 1,196 |
|
| - |
|
| 6,964 |
|
Total revenues | $ | 237,329 |
| $ | 174,285 |
| $ | (4,488 | ) | $ | 407,126 |
|
|
|
|
|
|
|
|
| |||||
Timing of revenue recognition: |
|
|
|
|
|
|
|
| ||||
Services transferred at a point in time | $ | 7,843 |
| $ | - |
| $ | - |
| $ | 7,843 |
|
Services transferred over time |
| 223,718 |
|
| 173,089 |
|
| (4,488 | ) |
| 392,319 |
|
Revenue from contracts with customers | $ | 231,561 |
| $ | 173,089 |
| $ | (4,488 | ) | $ | 400,162 |
|
| Three Months Ended September 30, 2021 | Electric Utilities | Gas Utilities | Inter-company Revenues | Total | ||||||||||
| Customer Types: | (in thousands) | |||||||||||||
| Retail | $ | 185,892 | $ | 115,908 | $ | — | $ | 301,800 | ||||||
| Transportation | — | 37,651 | (110) | 37,541 | ||||||||||
| Wholesale | 7,247 | — | — | 7,247 | ||||||||||
| Market - off-system sales | 13,511 | 75 | — | 13,586 | ||||||||||
| Transmission/Other | 12,904 | 9,863 | (4,288) | 18,479 | ||||||||||
| Revenue from contracts with customers | $ | 219,554 | $ | 163,497 | $ | (4,398) | $ | 378,653 | ||||||
| Other revenues | 850 | 1,186 | (99) | 1,937 | ||||||||||
| Total Revenues | $ | 220,404 | $ | 164,683 | $ | (4,497) | $ | 380,590 | ||||||
| Timing of Revenue Recognition: | ||||||||||||||
| Services transferred at a point in time | $ | 6,968 | $ | — | $ | — | $ | 6,968 | ||||||
| Services transferred over time | 212,586 | 163,497 | (4,398) | 371,685 | ||||||||||
| Revenue from contracts with customers | $ | 219,554 | $ | 163,497 | $ | (4,398) | $ | 378,653 | ||||||
Three Months Ended September 30, 2022 | Electric Utilities |
| Gas Utilities |
| Inter-segment Revenues |
| Total |
| ||||
Customer types: | (in thousands) |
| ||||||||||
Retail | $ | 211,489 |
| $ | 157,203 |
| $ | - |
| $ | 368,692 |
|
Transportation |
| - |
|
| 41,006 |
|
| (99 | ) |
| 40,907 |
|
Wholesale |
| 13,667 |
|
| - |
|
| - |
|
| 13,667 |
|
Market - off-system sales |
| 16,770 |
|
| 186 |
|
| - |
|
| 16,956 |
|
Transmission/Other |
| 15,919 |
|
| 8,875 |
|
| (4,148 | ) |
| 20,646 |
|
Revenue from contracts with customers | $ | 257,845 |
| $ | 207,270 |
| $ | (4,247 | ) | $ | 460,868 |
|
Other revenues |
| 824 |
|
| 1,018 |
|
| (98 | ) |
| 1,744 |
|
Total revenues | $ | 258,669 |
| $ | 208,288 |
| $ | (4,345 | ) | $ | 462,612 |
|
|
|
|
|
|
|
|
| |||||
Timing of revenue recognition: |
|
|
|
|
|
|
|
| ||||
Services transferred at a point in time | $ | 7,928 |
| $ | - |
| $ | - |
| $ | 7,928 |
|
Services transferred over time |
| 249,917 |
|
| 207,270 |
|
| (4,247 | ) |
| 452,940 |
|
Revenue from contracts with customers | $ | 257,845 |
| $ | 207,270 |
| $ | (4,247 | ) | $ | 460,868 |
|
Nine Months Ended September 30, 2023 | Electric Utilities |
| Gas Utilities |
| Inter-segment Revenues |
| Total |
| ||||
Customer types: | (in thousands) |
| ||||||||||
Retail | $ | 522,304 |
| $ | 931,129 |
| $ | - |
| $ | 1,453,433 |
|
Transportation |
| - |
|
| 131,410 |
|
| (344 | ) |
| 131,066 |
|
Wholesale |
| 24,578 |
|
| - |
|
| - |
|
| 24,578 |
|
Market - off-system sales |
| 37,487 |
|
| 349 |
|
| - |
|
| 37,836 |
|
Transmission/Other |
| 54,727 |
|
| 28,833 |
|
| (13,120 | ) |
| 70,440 |
|
Revenue from contracts with customers | $ | 639,096 |
| $ | 1,091,721 |
| $ | (13,464 | ) | $ | 1,717,353 |
|
Other revenues |
| 10,015 |
|
| 12,200 |
|
| - |
|
| 22,215 |
|
Total revenues | $ | 649,111 |
| $ | 1,103,921 |
| $ | (13,464 | ) | $ | 1,739,568 |
|
|
|
|
|
|
|
|
| |||||
Timing of revenue recognition: |
|
|
|
|
|
|
|
| ||||
Services transferred at a point in time | $ | 24,344 |
| $ | - |
| $ | - |
| $ | 24,344 |
|
Services transferred over time |
| 614,752 |
|
| 1,091,721 |
|
| (13,464 | ) |
| 1,693,009 |
|
Revenue from contracts with customers | $ | 639,096 |
| $ | 1,091,721 |
| $ | (13,464 | ) | $ | 1,717,353 |
|
16
Nine Months Ended September 30, 2022 | Electric Utilities |
| Gas Utilities |
| Inter-segment Revenues |
| Total |
| ||||
Customer types: | (in thousands) |
| ||||||||||
Retail | $ | 553,327 |
| $ | 947,290 |
| $ | - |
| $ | 1,500,617 |
|
Transportation |
| - |
|
| 125,196 |
|
| (298 | ) |
| 124,898 |
|
Wholesale |
| 32,370 |
|
| - |
|
| - |
|
| 32,370 |
|
Market - off-system sales |
| 32,590 |
|
| 602 |
|
| - |
|
| 33,192 |
|
Transmission/Other |
| 46,535 |
|
| 27,794 |
|
| (12,445 | ) |
| 61,884 |
|
Revenue from contracts with customers | $ | 664,822 |
| $ | 1,100,882 |
| $ | (12,743 | ) | $ | 1,752,961 |
|
Other revenues |
| 4,764 |
|
| 2,967 |
|
| (315 | ) |
| 7,416 |
|
Total revenues | $ | 669,586 |
| $ | 1,103,849 |
| $ | (13,058 | ) | $ | 1,760,377 |
|
|
|
|
|
|
|
|
| |||||
Timing of revenue recognition: |
|
|
|
|
|
|
|
| ||||
Services transferred at a point in time | $ | 21,712 |
| $ | - |
| $ | - |
| $ | 21,712 |
|
Services transferred over time |
| 643,110 |
|
| 1,100,882 |
|
| (12,743 | ) |
| 1,731,249 |
|
Revenue from contracts with customers | $ | 664,822 |
| $ | 1,100,882 |
| $ | (12,743 | ) | $ | 1,752,961 |
|
| Nine Months Ended September 30, 2022 | Electric Utilities | Gas Utilities | Inter-company Revenues | Total | ||||||||||
| Customer types: | (in thousands) | |||||||||||||
| Retail | $ | 553,327 | $ | 947,290 | $ | — | $ | 1,500,617 | ||||||
| Transportation | — | 125,196 | (298) | 124,898 | ||||||||||
| Wholesale | 32,370 | — | — | 32,370 | ||||||||||
| Market - off-system sales | 32,590 | 602 | — | 33,192 | ||||||||||
| Transmission/Other | 46,535 | 27,794 | (12,445) | 61,884 | ||||||||||
| Revenue from contracts with customers | $ | 664,822 | $ | 1,100,882 | $ | (12,743) | $ | 1,752,961 | ||||||
| Other revenues | 4,764 | 2,967 | (315) | 7,416 | ||||||||||
| Total revenues | $ | 669,586 | $ | 1,103,849 | $ | (13,058) | $ | 1,760,377 | ||||||
| Timing of revenue recognition: | ||||||||||||||
| Services transferred at a point in time | $ | 21,712 | $ | — | $ | — | $ | 21,712 | ||||||
| Services transferred over time | 643,110 | 1,100,882 | (12,743) | 1,731,249 | ||||||||||
| Revenue from contracts with customers | $ | 664,822 | $ | 1,100,882 | $ | (12,743) | $ | 1,752,961 | ||||||
| Nine Months Ended September 30, 2021 | Electric Utilities | Gas Utilities | Inter-company Revenues | Total | ||||||||||
| Customer Types: | (in thousands) | |||||||||||||
| Retail | $ | 554,143 | $ | 601,358 | $ | — | $ | 1,155,501 | ||||||
| Transportation | — | 117,251 | (329) | 116,922 | ||||||||||
| Wholesale | 24,261 | — | — | 24,261 | ||||||||||
| Market - off-system sales | 25,549 | 235 | — | 25,784 | ||||||||||
| Transmission/Other | 38,315 | 29,378 | (12,868) | 54,825 | ||||||||||
| Revenue from contracts with customers | $ | 642,268 | $ | 748,222 | $ | (13,197) | $ | 1,377,293 | ||||||
| Other revenues | 4,556 | 5,030 | (285) | 9,301 | ||||||||||
| Total Revenues | $ | 646,824 | $ | 753,252 | $ | (13,482) | $ | 1,386,594 | ||||||
| Timing of Revenue Recognition: | ||||||||||||||
| Services transferred at a point in time | $ | 20,658 | $ | — | $ | — | $ | 20,658 | ||||||
| Services transferred over time | 621,610 | 748,222 | (13,197) | 1,356,635 | ||||||||||
| Revenue from contracts with customers | $ | 642,268 | $ | 748,222 | $ | (13,197) | $ | 1,377,293 | ||||||
Shelf Registration Statement
We maintain an effective shelf registration statement with the SEC under which we may issue, from time to time, an unspecified amount of Contentssenior debt securities, subordinated debt securities, common stock, preferred stock, warrants and other securities. In anticipation of the approaching expiration of our previous shelf registration statement on Form S-3 originally filed on August 4, 2020 (Registration No. 333-240320), we filed a new shelf registration statement on Form S-3 on June 16, 2023 (Registration No. 333-272739).
Short-term Debt
Revolving Credit Facility and CP Program
On May 9, 2023, we amended and restated our corporate Revolving Credit Facility, which replaced LIBOR as a benchmark interest rate with the SOFR. The adoption of SOFR as a benchmark interest rate was in advance of the scheduled elimination of LIBOR as a benchmark interest rate on June 30, 2023. No other significant terms or conditions, including borrowing capacity, credit spreads or financial covenants were modified under these amendments and restatements.
| September 30, 2023 |
| December 31, 2022 |
| ||
Amount outstanding | $ | — |
| $ | 535,600 |
|
Letters of credit (a) | $ | 3,707 |
| $ | 24,626 |
|
Available capacity | $ | 746,293 |
| $ | 189,774 |
|
Weighted average interest rates | N/A |
|
| 4.88 | % | |
| September 30, 2022 | December 31, 2021 | |||||||||||||
| Balance Outstanding | Letters of Credit (a) | Balance Outstanding | Letters of Credit (a) | |||||||||||
| Revolving Credit Facility | $ | — | $ | 20,193 | $ | — | $ | 27,209 | ||||||
| CP Program | 501,350 | — | 420,180 | — | ||||||||||
| Total Notes payable | $ | 501,350 | $ | 20,193 | $ | 420,180 | $ | 27,209 | ||||||
Revolving Credit Facility and CP Program duringborrowing activity was as follows (dollars in thousands):
| Nine Months Ended September 30, |
| ||||
| 2023 |
| 2022 |
| ||
Maximum amount outstanding (based on daily outstanding balances) | $ | 548,700 |
| $ | 508,200 |
|
Average amount outstanding (based on daily outstanding balances) | $ | 109,209 |
| $ | 347,121 |
|
Weighted average interest rates |
| 4.91 | % |
| 1.41 | % |
Long-term Debt
On September 15, 2023, we completed a public debt offering of $450 million, 6.15% senior unsecured notes due May 15, 2034. Proceeds from the nine months ended Septemberoffering, which were net of $7.2 million of deferred financing costs, were used for general corporate purposes. We also plan to use the proceeds from the offering, along with cash on hand, to repay all of our $525 million principal amount outstanding notes on their November 30, 20222023 maturity date.
17
On March 7, 2023, we completed a public debt offering of $350 million, 5.95% five year senior unsecured notes due March 15, 2028. The proceeds from the offering, which were $81 million. The weighted average interest rate on short-term borrowings relatednet of $4.2 million of deferred financing costs, were used to repay notes outstanding under our CP Program and for other general corporate purposes.
Debt Covenants
Revolving Credit Facility
We were in compliance with all of our Revolving Credit Facility and CP Program atcovenants as of September 30, 2022 was 3.35%.
Wyoming Electric
Wyoming Electric was in compliance with ourall covenants atwithin its financing agreements as of September 30, 2022 as shown below:
| As of September 30, 2022 | Covenant Requirement | |||||||||||||
| Consolidated Indebtedness to Capitalization Ratio | 61.7% | Less than | 65% | |||||||||||
Equity
At-the-Market Equity Offering Program
As previously disclosed, on August 4, 2020, we did not issue anyentered into an Amended and Restated Equity Distribution Sales Agreement ("Previous Sales Agreement") to sell shares of common stock underup to an aggregate of $400 million, from time to time, through our ATM program utilizing our shelf registration statement. On June 16, 2023, in conjunction with the ATM. Duringnew shelf registration statement filing discussed above, we entered into a new Equity Distribution Sales Agreement ("Sales Agreement") and terminated the nine months ended September 30, 2022, we issued a total of 0.3 millionPrevious Sales Agreement. The Sales Agreement, which is similar to the Previous Sales Agreement, allows us to sell shares of common stock underup to an aggregate of $400 million through our ATM program.
ATM activity was as follows (net proceeds and issuance costs in millions):
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||
August 4, 2020 ATM Program |
|
|
|
|
|
|
|
| ||||
Proceeds, (net of issuance costs of $0, $0, $(0.5) and $(0.2), respectively) | $ | - |
| $ | - |
| $ | 48.5 |
| $ | 20.2 |
|
Number of shares issued |
| - |
|
| - |
|
| 775,225 |
|
| 272,592 |
|
|
|
|
|
|
|
|
| |||||
June 16, 2023 ATM Program |
|
|
|
|
|
|
|
| ||||
Proceeds, (net of issuance costs of $(0.5), $0, $(0.6) and $0, respectively) | $ | 52.8 |
| $ | - |
| $ | 59.2 |
| $ | - |
|
Number of shares issued |
| 930,844 |
|
| - |
|
| 1,037,399 |
|
| - |
|
|
|
|
|
|
|
|
| |||||
Total activity under both ATM Programs |
|
|
|
|
|
|
|
| ||||
Proceeds, (net of issuance costs of $(0.5), $0, $(1.1) and $(0.2), respectively) | $ | 52.8 |
| $ | - |
| $ | 107.7 |
| $ | 20.2 |
|
Number of shares issued |
| 930,844 |
|
| - |
|
| 1,812,624 |
|
| 272,592 |
|
Average price per share | $ | 57.33 |
| $ | - |
| $ | 60.02 |
| $ | 74.84 |
|
Shareholder Dividend Reinvestment and Stock Purchase Plan
Effective as of July 7, 2023, we terminated our DRSPP. On July 10, 2023, we filed a post-effective amendment to amend the ATM for proceedsRegistration Statement on Form S-3 (File No. 333-240319) filed with the SEC on August 4, 2020. The filing of $20 million, net of $0.2 million in issuance costs. During the three months ended September 30, 2021, we issued a total of 0.3 millionthis post-effective amendment de-registered all shares of common stock that were issuable under the ATM for proceedsDRSPP but not sold as of $23 million, netJuly 7, 2023. With the termination of $0.2 million in issuance costs. During the nine months ended September 30, 2021, we issuedDRSPP, a total of 0.9 million shares of commondirect stock under the ATM for proceeds of $63 million, net of $0.6 million in issuance costs.purchase plan was offered which allows shareholders to continue making share transactions. This plan is sponsored and administered solely by EQ Shareowner Services, our transfer agent.
18
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||
Net income available for common stock | $ | 45,383 |
| $ | 34,973 |
| $ | 182,520 |
| $ | 185,914 |
|
|
|
|
|
|
|
|
| |||||
Weighted average shares - basic |
| 67,315 |
|
| 64,876 |
|
| 66,652 |
|
| 64,722 |
|
Dilutive effect of: |
|
|
|
|
|
|
|
| ||||
Equity compensation |
| 74 |
|
| 185 |
|
| 73 |
|
| 188 |
|
Weighted average shares - diluted |
| 67,389 |
|
| 65,061 |
|
| 66,725 |
|
| 64,910 |
|
|
|
|
|
|
|
|
| |||||
Earnings per share of common stock: |
|
|
|
|
|
|
|
| ||||
Earnings per share, Basic | $ | 0.67 |
| $ | 0.54 |
| $ | 2.74 |
| $ | 2.87 |
|
Earnings per share, Diluted | $ | 0.67 |
| $ | 0.54 |
| $ | 2.74 |
| $ | 2.86 |
|
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Net income available for common stock | $ | 34,973 | $ | 44,112 | $ | 185,914 | $ | 165,589 | |||||||||
| Weighted average shares - basic | 64,876 | 63,341 | 64,722 | 62,950 | |||||||||||||
| Dilutive effect of: | |||||||||||||||||
| Equity compensation | 185 | 95 | 188 | 96 | |||||||||||||
| Weighted average shares - diluted | 65,061 | 63,436 | 64,910 | 63,046 | |||||||||||||
| Earnings per share of common stock: | |||||||||||||||||
| Earnings per share, Basic | $ | 0.54 | $ | 0.70 | $ | 2.87 | $ | 2.63 | |||||||||
| Earnings per share, Diluted | $ | 0.54 | $ | 0.70 | $ | 2.86 | $ | 2.63 | |||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||
Equity compensation |
| 74 |
|
| - |
|
| 48 |
|
| - |
|
Restricted stock |
| - |
|
| - |
|
| - |
|
| - |
|
Anti-dilutive shares |
| 74 |
|
| - |
|
| 48 |
|
| - |
|
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Equity compensation | — | 9 | — | 12 | |||||||||||||
| Restricted stock | — | — | — | 1 | |||||||||||||
| Anti-dilutive shares | — | 9 | — | 13 | |||||||||||||
Market and Credit Risk Disclosures
Our activities in the energy industry expose us to a number of risks in the normal operations of our businesses. Depending on the activity, we are exposed to varying degrees of market risk and credit risk.
Market Risk
Market risk is the potential loss that may occur as a result of an adverse change in market price, rate or supply. We are exposed but not limited to, the following market risks:
Credit Risk
Credit risk is the risk of financial loss resulting from non-performance of contractual obligations by a counterparty.
We attempt to mitigate our credit exposure by conducting business primarily with high credit quality entities, setting tenor and credit limits commensurate with counterparty financial strength, obtaining master netting agreements and mitigating credit exposure with less creditworthy counterparties through parental guarantees, cash collateral requirements, letters of credit and other security agreements.
We perform ongoingperiodic credit evaluations of our customers and adjust credit limits based upon payment history and the customers’ current creditworthiness, as determined by review of their current credit information. We maintain a provision for estimated credit losses based upon historical experience, changes in current market conditions, expected losses and any specific customer collection issue that is identified.
Our derivative and hedging activities included in the accompanying Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income are detailed below and in Note 8.
The operations of our Utilities, including natural gas sold by our Gas Utilities and natural gas used by our Electric Utilities’ generation plants or those plants under PPAs where our Electric Utilities must provide the generation fuel (tolling agreements), expose our utility customers to natural gas price volatility. Therefore, as allowed or required by state utility commissions, we have enteredenter into commission approved hedging programs utilizing natural gas futures, options, over-the-counter swaps and basis swaps to reduce our customers’ underlying exposure to these fluctuations. These transactions are considered derivatives, and in accordance with accounting standards for derivatives and hedging, mark-to-market adjustments are recorded as Derivative assets or Derivative liabilities on the accompanying Condensed Consolidated Balance Sheets, net of balance sheet offsetting as permitted by GAAP.
For our regulated Utilities’ hedging plans, unrealized and realized gains and losses, as well as option premiums and commissions on these transactions, are recorded as Regulatory assets or Regulatory liabilities in the accompanying Condensed Consolidated Balance Sheets in accordance with the state regulatory commission guidelines. When the related costs are recovered through our rates, the hedging activity is recognized in the Condensed Consolidated Statements of Income.
We use wholesale power purchase and sale contracts to manage purchased power costs and load requirements associated with serving our electric customers. Periodically, certain wholesale energy contracts are considered derivative instruments due to not qualifying for the normal purchase and normal sales exception to derivative accounting. Changes in the fair value of these commodity derivatives are recognized in the Condensed Consolidated Statements of Income.
To support our Choice Gas Program customers, we buy, sell and deliver natural gas at competitive prices by managing commodity price risk. As a result of these activities, this area of our business is exposed to risks associated with changes in the market price of natural gas. We manage our exposure to such risks using over-the-counter and exchange traded options and swaps with counterparties in anticipation of forecasted purchases and sales during time frames ranging from October 20222023 through December 2024.October 2025. A portion of our over-the-counter swaps have been designated as cash flow hedges to mitigate the commodity price risk associated with deliveries under fixed price forward contracts to deliver gas to our Choice Gas Program customers. The gain or loss on these designated derivatives is reported in AOCI in the accompanying Condensed Consolidated Balance Sheets and reclassified into earnings in the same period that the underlying hedged item is recognized in earnings. Effectiveness of our hedging position is evaluated at least quarterly.
| September 30, 2023 |
| December 31, 2022 |
| ||||||||
| Notional Amounts (MMBtus) |
| Maximum Term (months) (a) |
| Notional Amounts (MMBtus) |
| Maximum Term (months) (a) |
| ||||
Natural gas futures purchased |
| 1,730,000 |
|
| 6 |
|
| 630,000 |
|
| 3 |
|
Natural gas options purchased, net |
| 7,780,000 |
|
| 6 |
|
| 1,790,000 |
|
| 3 |
|
Natural gas basis swaps purchased |
| 1,730,000 |
|
| 6 |
|
| 900,000 |
|
| 3 |
|
Natural gas over-the-counter swaps, net (b) |
| 5,610,000 |
|
| 24 |
|
| 4,460,000 |
|
| 24 |
|
Natural gas physical contracts, net (c) |
| 21,323,455 |
|
| 7 |
|
| 17,864,412 |
|
| 12 |
|
| September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
| Notional Amounts (MMBtus) | Maximum Term (months) (a) | Notional Amounts (MMBtus) | Maximum Term (months) (a) | ||||||||||||||||||||||||||||||||
| Natural gas futures purchased | 1,780,000 | 6 | 590,000 | 3 | |||||||||||||||||||||||||||||||
| Natural gas options purchased, net | 5,500,000 | 6 | 3,100,000 | 3 | |||||||||||||||||||||||||||||||
| Natural gas basis swaps purchased | 1,530,000 | 6 | 870,000 | 3 | |||||||||||||||||||||||||||||||
Natural gas over-the-counter swaps, net (b) | 6,050,000 | 27 | 4,570,000 | 34 | |||||||||||||||||||||||||||||||
Natural gas physical contracts, net (c) | 29,017,775 | 15 | 16,416,677 | 24 | |||||||||||||||||||||||||||||||
| Balance Sheet Location | September 30, |
| December 31, |
| ||
Derivatives designated as hedges: |
|
|
|
|
| ||
Asset derivative instruments: |
|
|
|
|
| ||
Current commodity derivatives | Derivative assets, current | $ | - |
| $ | 118 |
|
Noncurrent commodity derivatives | Other assets, non-current |
| (18 | ) |
| 198 |
|
Liability derivative instruments: |
|
|
|
|
| ||
Current commodity derivatives | Derivative liabilities, current |
| 143 |
|
| (1,703 | ) |
Noncurrent commodity derivatives | Other assets, non-current |
| (20 | ) |
| - |
|
Total derivatives designated as hedges |
| $ | 105 |
| $ | (1,387 | ) |
|
|
|
|
| |||
Derivatives not designated as hedges: |
|
|
|
|
| ||
Asset derivative instruments: |
|
|
|
|
| ||
Current commodity derivatives | Derivative assets, current | $ | 126 |
| $ | 464 |
|
Noncurrent commodity derivatives | Other assets, non-current |
| 18 |
|
| 337 |
|
Liability derivative instruments: |
|
|
|
|
| ||
Current commodity derivatives | Derivative liabilities, current |
| (2,336 | ) |
| (4,897 | ) |
Noncurrent commodity derivatives | Other deferred credits and other liabilities |
| 2 |
|
| (18 | ) |
Total derivatives not designated as hedges |
| $ | (2,190 | ) | $ | (4,114 | ) |
| Balance Sheet Location | September 30, 2022 | December 31, 2021 | |||||||||
| Derivatives designated as hedges: | |||||||||||
| Asset derivative instruments: | |||||||||||
| Current commodity derivatives | Derivative assets, current | $ | 21 | $ | 2,017 | ||||||
| Noncurrent commodity derivatives | Other assets, non-current | 383 | 18 | ||||||||
| Liability derivative instruments: | |||||||||||
| Current commodity derivatives | Derivative liabilities, current | (1,211) | — | ||||||||
| Total derivatives designated as hedges | $ | (807) | $ | 2,035 | |||||||
| Derivatives not designated as hedges: | |||||||||||
| Asset derivative instruments: | |||||||||||
| Current commodity derivatives | Derivative assets, current | $ | 3,847 | $ | 2,356 | ||||||
| Noncurrent commodity derivatives | Other assets, non-current | 986 | 804 | ||||||||
| Liability derivative instruments: | |||||||||||
| Current commodity derivatives | Derivative liabilities, current | (4,358) | (1,439) | ||||||||
| Noncurrent commodity derivatives | Other deferred credits and other liabilities | (23) | (20) | ||||||||
| Total derivatives not designated as hedges | $ | 452 | $ | 1,701 | |||||||
| Three Months Ended |
|
| Three Months Ended |
| ||||||||
| 2023 |
| 2022 |
|
| 2023 |
| 2022 |
| ||||
Derivatives in Cash Flow Hedging Relationships | Amount of Gain/(Loss) Recognized in OCI |
| Income Statement Location | Amount of Gain/(Loss) Reclassified from AOCI into Income |
| ||||||||
| (in thousands) |
|
| (in thousands) |
| ||||||||
Interest rate swaps | $ | 712 |
| $ | 712 |
| Interest expense | $ | (712 | ) | $ | (712 | ) |
Commodity derivatives |
| (219 | ) |
| 2,292 |
| Fuel, purchased power and cost of natural gas sold |
| (34 | ) |
| 43 |
|
Total | $ | 493 |
| $ | 3,004 |
|
| $ | (746 | ) | $ | (669 | ) |
| Nine Months Ended |
|
| Nine Months Ended |
| ||||||||
| 2023 |
| 2022 |
|
| 2023 |
| 2022 |
| ||||
Derivatives in Cash Flow Hedging Relationships | Amount of Gain/(Loss) Recognized in OCI |
| Income Statement Location | Amount of Gain/(Loss) Reclassified from AOCI into Income |
| ||||||||
| (in thousands) |
|
| (in thousands) |
| ||||||||
Interest rate swaps | $ | 2,138 |
| $ | 2,138 |
| Interest expense | $ | (2,138 | ) | $ | (2,138 | ) |
Commodity derivatives |
| 1,244 |
|
| (2,946 | ) | Fuel, purchased power and cost of natural gas sold |
| (2,473 | ) |
| 3,620 |
|
Total | $ | 3,382 |
| $ | (808 | ) |
| $ | (4,611 | ) | $ | 1,482 |
|
| Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Derivatives in Cash Flow Hedging Relationships | Amount of Gain/(Loss) Recognized in OCI | Income Statement Location | Amount of Gain/(Loss) Reclassified from AOCI into Income | ||||||||||||||
| (in thousands) | (in thousands) | ||||||||||||||||
| Interest rate swaps | $ | 712 | $ | 712 | Interest expense | $ | (712) | $ | (712) | ||||||||
| Commodity derivatives | 2,292 | 5,536 | Fuel, purchased power and cost of natural gas sold | 43 | 331 | ||||||||||||
| Total | $ | 3,004 | $ | 6,248 | $ | (669) | $ | (381) | |||||||||
| Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Derivatives in Cash Flow Hedging Relationships | Amount of Gain/(Loss) Recognized in OCI | Income Statement Location | Amount of Gain/(Loss) Reclassified from AOCI into Income | ||||||||||||||
| (in thousands) | (in thousands) | ||||||||||||||||
| Interest rate swaps | $ | 2,138 | $ | 2,138 | Interest expense | $ | (2,138) | $ | (2,138) | ||||||||
| Commodity derivatives | (2,946) | 6,896 | Fuel, purchased power and cost of natural gas sold | 3,620 | 356 | ||||||||||||
| Total | $ | (808) | $ | 9,034 | $ | 1,482 | $ | (1,782) | |||||||||
The following table summarizes the impacts of derivative instruments not designated as hedge instruments on our Condensed Consolidated Statements of Income for the three and nine months ended September 30, 20222023 and 2021.2022. Note that this presentation does not reflect the expected gains or losses arising from the underlying physical transactions; therefore, it is not indicative of the economic profit or loss we realized when the underlying physical and financial transactions were settled.
|
| Three Months Ended September 30, |
| ||||
|
| 2023 |
| 2022 |
| ||
Derivatives Not Designated as Hedging Instruments | Location of Gain/(Loss) on Derivatives Recognized in Income | Amount of Gain/(Loss) on Derivatives Recognized in Income |
| ||||
|
| (in thousands) |
| ||||
Commodity derivatives | Fuel, purchased power and cost of natural gas sold | $ | 255 |
| $ | 1,617 |
|
| $ | 255 |
| $ | 1,617 |
| |
|
| Nine Months Ended September 30, |
| ||||
|
| 2023 |
| 2022 |
| ||
Derivatives Not Designated as Hedging Instruments | Location of Gain/(Loss) on Derivatives Recognized in Income | Amount of Gain/(Loss) on Derivatives Recognized in Income |
| ||||
|
| (in thousands) |
| ||||
Commodity derivatives | Fuel, purchased power and cost of natural gas sold | $ | (2,445 | ) | $ | 2,779 |
|
| $ | (2,445 | ) | $ | 2,779 |
| |
| Three Months Ended September 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| Derivatives Not Designated as Hedging Instruments | Location of Gain/(Loss) on Derivatives Recognized in Income | Amount of Gain/(Loss) on Derivatives Recognized in Income | |||||||||
| (in thousands) | |||||||||||
| Commodity derivatives - Electric | Fuel, purchased power and cost of natural gas sold | $ | — | $ | 2,494 | ||||||
| Commodity derivatives - Natural Gas | Fuel, purchased power and cost of natural gas sold | 1,617 | 4,004 | ||||||||
| $ | 1,617 | $ | 6,498 | ||||||||
| Nine Months Ended September 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| Derivatives Not Designated as Hedging Instruments | Income Statement Location | Amount of Gain/(Loss) on Derivatives Recognized in Income | |||||||||
| (in thousands) | |||||||||||
| Commodity derivatives - Electric | Fuel, purchased power and cost of natural gas sold | $ | — | $ | (2,628) | ||||||
| Commodity derivatives - Natural Gas | Fuel, purchased power and cost of natural gas sold | 2,779 | 6,186 | ||||||||
| $ | 2,779 | $ | 3,558 | ||||||||
We use the following fair value hierarchy for determining inputs for our financial instruments. Our assets and liabilities for financial instruments are classified and disclosed in one of the following fair value categories:
Level 1 — Unadjusted quoted prices available in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities. Level 1 instruments primarily consist of highly liquid and actively traded financial instruments with quoted pricing information on an ongoing basis.
Level 2 — Pricing inputs include quoted prices for identical or similar assets and liabilities in active markets other than quoted prices in Level 1, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 — Pricing inputs are generally less observable from objective sources. These inputs reflect management’s best estimate of fair value using its own assumptions about the assumptions a market participant would use in pricing the asset or liability.
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels. We record transfers, if necessary, between levels at the end of the reporting period for all of our financial instruments.
Transfers into Level 3, if any, occur when significant inputs used to value the derivative instruments become less observable, such as a significant decrease in the frequency and volume in which the instrument is traded, negatively impacting the availability of observable pricing inputs. Transfers out of Level 3, if any, occur when the significant inputs become more observable, such as when the time between the valuation date and the delivery date of a transaction becomes shorter, positively impacting the availability of observable pricing inputs.
Derivatives
The commodity contracts for our Utilities segments are valued using the market approach and include forward strip pricing at liquid delivery points, exchange-traded futures, options, basis swaps and over-the-counter swaps and options (Level 2) for wholesale electric energy and natural gas contracts. For exchange-traded futures, options and basis swap assets and liabilities, fair value was derived using broker quotes validated by the exchange settlement pricing for the applicable contract. For over-the-counter instruments, the fair value is obtained by utilizing a nationally recognized service that obtains observable inputs to compute the fair value, which we validate by comparing our valuation with the counterparty. The fair value of these swaps includes a credit valuation adjustment based on the credit spreads of the counterparties when we are in an unrealized gain position or on our own credit spread when we are in an unrealized loss position. For additional information, see Note 1 of our Notes to the Consolidated Financial Statements in our 20212022 Annual Report on Form 10-K.
| As of September 30, 2023 |
| |||||||||||||
| Level 1 |
| Level 2 |
| Level 3 |
| Cash Collateral and Counterparty Netting (a) |
| Total |
| |||||
| (in thousands) |
| |||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
| |||||
Commodity derivatives - Gas Utilities | $ | - |
| $ | 5,183 |
| $ | - |
| $ | (5,057 | ) | $ | 126 |
|
Total | $ | - |
| $ | 5,183 |
| $ | - |
| $ | (5,057 | ) | $ | 126 |
|
|
|
|
|
|
|
|
|
|
| ||||||
Liabilities: |
|
|
|
|
|
|
|
|
|
| |||||
Commodity derivatives - Gas Utilities | $ | - |
| $ | 4,809 |
| $ | - |
| $ | (2,598 | ) | $ | 2,211 |
|
Total | $ | - |
| $ | 4,809 |
| $ | - |
| $ | (2,598 | ) | $ | 2,211 |
|
| As of September 30, 2022 | ||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Cash Collateral and Counterparty Netting (a) | Total | ||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Commodity derivatives — Gas Utilities | $ | — | $ | 11,832 | $ | — | $ | (6,594) | $ | 5,238 | ||||||||||
| Total | $ | — | $ | 11,832 | $ | — | $ | (6,594) | $ | 5,238 | ||||||||||
| Liabilities: | ||||||||||||||||||||
| Commodity derivatives — Gas Utilities | $ | — | $ | 12,212 | $ | — | $ | (6,619) | $ | 5,593 | ||||||||||
| Total | $ | — | $ | 12,212 | $ | — | $ | (6,619) | $ | 5,593 | ||||||||||
| As of December 31, 2021 | ||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Cash Collateral and Counterparty Netting (a) | Total | ||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Commodity derivatives — Gas Utilities | $ | — | $ | 7,569 | $ | — | $ | (2,374) | $ | 5,195 | ||||||||||
| Total | $ | — | $ | 7,569 | $ | — | $ | (2,374) | $ | 5,195 | ||||||||||
| Liabilities: | ||||||||||||||||||||
| Commodity derivatives — Gas Utilities | $ | — | $ | 3,273 | $ | — | $ | (1,814) | $ | 1,459 | ||||||||||
| Total | $ | — | $ | 3,273 | $ | — | $ | (1,814) | $ | 1,459 | ||||||||||
| As of December 31, 2022 |
| |||||||||||||
| Level 1 |
| Level 2 |
| Level 3 |
| Cash Collateral and Counterparty Netting (a) |
| Total |
| |||||
(in thousands) |
| ||||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
| |||||
Commodity derivatives - Gas Utilities | $ | - |
| $ | 5,407 |
| $ | - |
| $ | (4,290 | ) | $ | 1,117 |
|
Total | $ | - |
| $ | 5,407 |
| $ | - |
| $ | (4,290 | ) | $ | 1,117 |
|
|
|
|
|
|
|
|
|
|
| ||||||
Liabilities: |
|
|
|
|
|
|
|
|
|
| |||||
Commodity derivatives - Gas Utilities | $ | - |
| $ | 11,455 |
| $ | - |
| $ | (4,837 | ) | $ | 6,618 |
|
Total | $ | - |
| $ | 11,455 |
| $ | - |
| $ | (4,837 | ) | $ | 6,618 |
|
Pension and Postretirement Plan Assets Fair value measurements also apply to the valuation of our pension and postretirement plan assets. Current accounting guidance requires employers to annually disclose information about the fair value measurements of their assets of a defined benefit pension or other postretirement plan. The fair value of these assets is presented in Note 13 to the Consolidated Financial Statements included in our Other Fair Value Measures The carrying amount of cash and cash equivalents, restricted cash and equivalents and short-term borrowings approximates fair value due to their liquid or short-term nature. Cash, cash equivalents and restricted cash are classified in Level 1 in the fair value hierarchy. Notes payable consist of commercial paper borrowings and are not traded on an exchange; therefore, they are classified as Level 2 in the fair value hierarchy.20212022 Annual Report on Form 10-K.27
23
| September 30, 2023 |
| December 31, 2022 |
| ||||||||
| Carrying Amount |
| Fair Value |
| Carrying Amount |
| Fair Value |
| ||||
Long-term debt, including current maturities (a) | $ | 4,924,510 |
| $ | 4,481,989 |
| $ | 4,132,340 |
| $ | 3,760,848 |
|
| September 30, 2022 | December 31, 2021 | ||||||||||||||||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||
Long-term debt, including current maturities (a) | $ | 4,131,033 | $ | 3,736,930 | $ | 4,126,923 | $ | 4,570,619 | |||||||||
We record deferred gains (losses) in AOCI related to interest rate swaps designated as cash flow hedges, commodity contracts designated as cash flow hedges and the amortization of components of our defined benefit plans. Deferred gains (losses) for our commodity contracts designated as cash flow hedges are recognized in earnings upon settlement, while deferred gains (losses) related to our interest rate swaps are recognized in earnings as they are amortized.
|
| Amount Reclassified from AOCI |
| Amount Reclassified from AOCI |
| ||||||||
| Location on the Consolidated Statements of Income | Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||
|
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||
Gains and (losses) on cash flow hedges: |
|
|
|
|
|
|
|
|
| ||||
Interest rate swaps | Interest expense | $ | (712 | ) | $ | (712 | ) | $ | (2,138 | ) | $ | (2,138 | ) |
Commodity contracts | Fuel, purchased power and cost of natural gas sold |
| (34 | ) |
| 43 |
|
| (2,473 | ) |
| 3,620 |
|
| $ | (746 | ) | $ | (669 | ) | $ | (4,611 | ) | $ | 1,482 |
| |
Income tax | Income tax expense |
| 170 |
|
| 124 |
|
| 1,081 |
|
| (332 | ) |
Total reclassification adjustments related to cash flow hedges, net of tax |
| $ | (576 | ) | $ | (545 | ) | $ | (3,530 | ) | $ | 1,150 |
|
|
|
|
|
|
|
|
|
| |||||
Amortization of components of defined benefit plans: |
|
|
|
|
|
|
|
|
| ||||
Prior service cost | Operations and maintenance | $ | - |
| $ | 24 |
| $ | - |
| $ | 70 |
|
Actuarial gain (loss) | Operations and maintenance |
| (43 | ) |
| (188 | ) |
| (129 | ) |
| (563 | ) |
| $ | (43 | ) | $ | (164 | ) | $ | (129 | ) | $ | (493 | ) | |
Income tax | Income tax expense |
| 19 |
|
| 58 |
|
| 62 |
|
| 157 |
|
Total reclassification adjustments related to defined benefit plans, net of tax |
| $ | (24 | ) | $ | (106 | ) | $ | (67 | ) | $ | (336 | ) |
Total reclassifications |
| $ | (600 | ) | $ | (651 | ) | $ | (3,597 | ) | $ | 814 |
|
| Location on the Condensed Consolidated Statements of Income | Amount Reclassified from AOCI | Amount Reclassified from AOCI | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Gains and (losses) on cash flow hedges: | ||||||||||||||||||||
| Interest rate swaps | Interest expense | $ | (712) | $ | (712) | $ | (2,138) | $ | (2,138) | |||||||||||
| Commodity contracts | Fuel, purchased power and cost of natural gas sold | 43 | 331 | 3,620 | 356 | |||||||||||||||
| (669) | (381) | 1,482 | (1,782) | |||||||||||||||||
| Income tax | Income tax expense | 124 | (26) | (332) | 308 | |||||||||||||||
| Total reclassification adjustments related to cash flow hedges, net of tax | $ | (545) | $ | (407) | $ | 1,150 | $ | (1,474) | ||||||||||||
| Amortization of components of defined benefit plans: | ||||||||||||||||||||
| Prior service cost | Operations and maintenance | $ | 24 | $ | 25 | $ | 70 | $ | 74 | |||||||||||
| Actuarial gain (loss) | Operations and maintenance | (188) | (598) | (563) | (1,793) | |||||||||||||||
| (164) | (573) | (493) | (1,719) | |||||||||||||||||
| Income tax | Income tax expense | 58 | 133 | 157 | 492 | |||||||||||||||
| Total reclassification adjustments related to defined benefit plans, net of tax | $ | (106) | $ | (440) | $ | (336) | $ | (1,227) | ||||||||||||
| Total reclassifications | $ | (651) | $ | (847) | $ | 814 | $ | (2,701) | ||||||||||||
| Derivatives Designated as Cash Flow Hedges |
|
|
|
|
| ||||||
| Interest Rate Swaps |
| Commodity Derivatives |
| Employee Benefit Plans |
| Total |
| ||||
As of December 31, 2022 | $ | (8,255 | ) | $ | (1,200 | ) | $ | (6,112 | ) | $ | (15,567 | ) |
Other comprehensive income (loss) |
|
|
|
|
|
|
|
| ||||
before reclassifications |
| - |
|
| (937 | ) |
| - |
|
| (937 | ) |
Amounts reclassified from AOCI |
| 1,649 |
|
| 1,881 |
|
| 67 |
|
| 3,597 |
|
As of September 30, 2023 | $ | (6,606 | ) | $ | (256 | ) | $ | (6,045 | ) | $ | (12,907 | ) |
24
| Derivatives Designated as Cash Flow Hedges |
|
|
|
|
| ||||||
| Interest Rate Swaps |
| Commodity Derivatives |
| Employee Benefit Plans |
| Total |
| ||||
As of December 31, 2021 | $ | (10,384 | ) | $ | 1,476 |
| $ | (11,176 | ) | $ | (20,084 | ) |
Other comprehensive income (loss) |
|
|
|
|
|
|
|
| ||||
before reclassifications |
| - |
|
| 509 |
|
| - |
|
| 509 |
|
Amounts reclassified from AOCI |
| 1,589 |
|
| (2,739 | ) |
| 336 |
|
| (814 | ) |
As of September 30, 2022 | $ | (8,795 | ) | $ | (754 | ) | $ | (10,840 | ) | $ | (20,389 | ) |
| Derivatives Designated as Cash Flow Hedges | ||||||||||||||
| Interest Rate Swaps | Commodity Derivatives | Employee Benefit Plans | Total | |||||||||||
| As of December 31, 2021 | $ | (10,384) | $ | 1,476 | $ | (11,176) | $ | (20,084) | ||||||
| Other comprehensive income (loss) | ||||||||||||||
| before reclassifications | — | 509 | — | 509 | ||||||||||
| Amounts reclassified from AOCI | 1,589 | (2,739) | 336 | (814) | ||||||||||
| As of September 30, 2022 | $ | (8,795) | $ | (754) | $ | (10,840) | $ | (20,389) | ||||||
| Derivatives Designated as Cash Flow Hedges | ||||||||||||||
| Interest Rate Swaps | Commodity Derivatives | Employee Benefit Plans | Total | |||||||||||
| As of December 31, 2020 | $ | (12,558) | $ | 2 | $ | (14,790) | $ | (27,346) | ||||||
| Other comprehensive income (loss) | ||||||||||||||
| before reclassifications | — | 5,476 | — | 5,476 | ||||||||||
| Amounts reclassified from AOCI | 1,743 | (269) | 1,227 | 2,701 | ||||||||||
| As of September 30, 2021 | $ | (10,815) | $ | 5,209 | $ | (13,563) | $ | (19,169) | ||||||
Components of Net Periodic Expense
| Defined Benefit Pension Plan |
| Supplemental Non-qualified Defined Benefit Plans |
| Non-pension Defined Benefit Postretirement Healthcare Plan |
| ||||||||||||
Three Months Ended September 30, | 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||||
Service cost | $ | 614 |
| $ | 982 |
| $ | (77 | ) | $ | (271 | ) | $ | 381 |
| $ | 492 |
|
Interest cost |
| 4,381 |
|
| 2,705 |
|
| 369 |
|
| 209 |
|
| 594 |
|
| 321 |
|
Expected return on plan assets |
| (4,672 | ) |
| (4,631 | ) |
| - |
|
| - |
|
| (55 | ) |
| (31 | ) |
Net amortization of prior service costs |
| (17 | ) |
| (17 | ) |
| - |
|
| - |
|
| 10 |
|
| (72 | ) |
Recognized net actuarial loss |
| 498 |
|
| 1,522 |
|
| 8 |
|
| 69 |
|
| (3 | ) |
| 16 |
|
Net periodic expense (benefit) | $ | 804 |
| $ | 561 |
| $ | 300 |
| $ | 7 |
| $ | 927 |
| $ | 726 |
|
| Defined Benefit Pension Plan |
| Supplemental Non-qualified Defined Benefit Plans |
| Non-pension Defined Benefit Postretirement Healthcare Plan |
| ||||||||||||
Nine Months Ended September 30, | 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||||
Service cost | $ | 1,842 |
| $ | 2,946 |
| $ | 1,607 |
| $ | (2,018 | ) | $ | 1,143 |
| $ | 1,476 |
|
Interest cost |
| 13,142 |
|
| 8,114 |
|
| 1,107 |
|
| 626 |
|
| 1,783 |
|
| 963 |
|
Expected return on plan assets |
| (14,016 | ) |
| (13,892 | ) |
| - |
|
| - |
|
| (167 | ) |
| (93 | ) |
Net amortization of prior service costs |
| (51 | ) |
| (51 | ) |
| - |
|
| - |
|
| 30 |
|
| (217 | ) |
Recognized net actuarial loss (gain) |
| 1,494 |
|
| 4,568 |
|
| 24 |
|
| 207 |
|
| (9 | ) |
| 48 |
|
Net periodic expense (benefit) | $ | 2,411 |
| $ | 1,685 |
| $ | 2,738 |
| $ | (1,185 | ) | $ | 2,780 |
| $ | 2,177 |
|
| Defined Benefit Pension Plan | Supplemental Non-qualified Defined Benefit Plans | Non-pension Defined Benefit Postretirement Healthcare Plan | ||||||||||||||||||
| Three Months Ended September 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Net Service cost | $ | 982 | $ | 1,260 | $ | (271) | $ | 235 | $ | 492 | $ | 560 | ||||||||
| Interest cost | 2,705 | 2,328 | 209 | 176 | 321 | 264 | ||||||||||||||
| Expected return on plan assets | (4,631) | (5,219) | — | — | (31) | (34) | ||||||||||||||
| Net amortization of prior service costs | (17) | — | — | — | (72) | (108) | ||||||||||||||
| Recognized net actuarial loss | 1,522 | 1,828 | 69 | 439 | 16 | 116 | ||||||||||||||
| Net periodic expense (benefit) | $ | 561 | $ | 197 | $ | 7 | $ | 850 | $ | 726 | $ | 798 | ||||||||
| Defined Benefit Pension Plan | Supplemental Non-qualified Defined Benefit Plans | Non-pension Defined Benefit Postretirement Healthcare Plan | ||||||||||||||||||
| Nine Months Ended September 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Net Service cost | $ | 2,946 | $ | 3,779 | $ | (2,018) | $ | 1,948 | $ | 1,476 | $ | 1,678 | ||||||||
| Interest cost | 8,114 | 6,984 | 626 | 530 | 963 | 793 | ||||||||||||||
| Expected return on plan assets | (13,892) | (15,657) | — | — | (93) | (102) | ||||||||||||||
| Net amortization of prior service costs | (51) | — | — | — | (217) | (326) | ||||||||||||||
| Recognized net actuarial loss | 4,568 | 5,486 | 207 | 1,316 | 48 | 350 | ||||||||||||||
| Net periodic expense (benefit) | $ | 1,685 | $ | 592 | $ | (1,185) | $ | 3,794 | $ | 2,177 | $ | 2,393 | ||||||||
Contributions to the Defined Benefit Pension Plan are cash contributions made directly to the Pension Plan Trust account. Contributions to the Postretirement Healthcare and Supplemental Plans are primarily made in the form of benefit payments. Contributions made in the first nine months of 20222023 and anticipated contributions for 20222023 and 20232024 are as follows (in thousands):
| Contributions Made |
| Additional Contributions |
| Contributions |
| |||
| Nine Months Ended September 30, 2023 |
| Anticipated for |
| Anticipated for |
| |||
Defined Benefit Pension Plan | $ | - |
| $ | - |
| $ | - |
|
Non-pension Defined Benefit Postretirement Healthcare Plan | $ | 3,690 |
| $ | 1,230 |
| $ | 4,808 |
|
Supplemental Non-qualified Defined Benefit and Defined Contribution Plans | $ | 1,673 |
| $ | 558 |
| $ | 2,417 |
|
25
| Contributions Made | Additional Contributions | Contributions | ||||||||||||
| Nine Months Ended September 30, 2022 | Anticipated for 2022 | Anticipated for 2023 | ||||||||||||
| Defined Benefit Pension Plan | $ | — | $ | — | $ | — | ||||||||
| Non-pension Defined Benefit Postretirement Healthcare Plan | $ | 3,828 | $ | 1,276 | $ | 5,062 | ||||||||
| Supplemental Non-qualified Defined Benefit and Defined Contribution Plans | $ | 1,617 | $ | 539 | $ | 2,224 | ||||||||
IRS Revenue Procedure 2023-15
On April 14, 2023, the IRS released Revenue Procedure 2023-15 “Amounts paid to improve tangible property.” The Revenue Procedure provides a safe harbor method of accounting that taxpayers may use to determine whether costs to repair, maintain, replace, or improve natural gas transmission and distribution property must be capitalized. We are currently assessing the Revenue Procedure to determine its impact on our tax repairs deduction.
Income Tax Expense (Benefit)Benefit (Expense) and Effective Tax Rates
Three Months Ended September 30, 20222023 Compared to the Three Months Ended September 30, 2021
Income tax expense(expense) for the three months ended September 30, 20222023 was $2.1$(7.4) million compared to $5.3$(2.1) million reported for the same period in 2021.2022. For the three months ended September 30, 20222023, the effective tax rate was 5.2%13.1% compared to 9.8%5.2% for the same period in 2021. The lower effective tax rate was primarily due to tax benefits from state rate changes.
Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022
Income tax (expense) for the nine months ended September 30, 2023 was $(16.0) million compared to $(15.9) million reported for the same period in 2022. For the nine months ended September 30, 2023, the effective tax rate was 7.6% compared to 7.6% for the same period in 2022. The effective tax rate was comparable primarily due to a $8.2 million tax benefit from a current year Nebraska Gas TCJA-related bill credits to customers (which wereincome tax rate decrease offset by reduced revenue) partially offset by $3.4$5.8 million of lower tax benefits from various current and prior year state tax rate changes and $2.0$2.3 million of increased tax benefits from federallower wind PTCs associated with increased wind production and a current year PTC rate increase (inflation adjustment).driven by the March 2023 sale of Northern Iowa Windpower assets.
Our Chief Executive Officer, who is considered to be our CODM, reviews financial information presented on an operating segment basis for purposes of making decisions, allocating resources and assessing financial performance. Our CODM assesses the performance of our operating segments based on operating income.
We conduct our business operations through two operating segments: Electric Utilities and Gas Utilities, Power GenerationUtilities. Certain unallocated corporate expenses that support our operating segments are presented as Corporate and Mining. In the fourth quarter of 2021, we integrated our power generation and mining businesses within the Electric Utilities segment. The alignment is consistent with the current way our CODM evaluates the performance of the business and makes decisions related to the allocation of resources. Comparative periods presented reflect this change.
| Total assets (net of intercompany eliminations) as of: | September 30, 2022 | December 31, 2021 | |||||||||
| Electric Utilities | $ | 3,889,596 | $ | 3,796,662 | |||||||
| Gas Utilities | 5,330,209 | 5,246,370 | |||||||||
| Corporate and Other | 102,489 | 88,864 | |||||||||
| Total assets | $ | 9,322,294 | $ | 9,131,896 | |||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||
Revenues: |
|
|
|
|
|
|
|
| ||||
Electric Utilities |
|
|
|
|
|
|
|
| ||||
External Customers | $ | 234,490 |
| $ | 255,741 |
| $ | 640,595 |
| $ | 660,800 |
|
Inter-segment |
| 2,839 |
|
| 2,928 |
|
| 8,516 |
|
| 8,786 |
|
Total Electric Utilities Revenue |
| 237,329 |
|
| 258,669 |
|
| 649,111 |
|
| 669,586 |
|
|
|
|
|
|
|
|
| |||||
Gas Utilities |
|
|
|
|
|
|
|
| ||||
External Customers |
| 172,636 |
|
| 206,871 |
|
| 1,098,973 |
|
| 1,099,577 |
|
Inter-segment |
| 1,649 |
|
| 1,417 |
|
| 4,948 |
|
| 4,272 |
|
Total Gas Utilities Revenue |
| 174,285 |
|
| 208,288 |
|
| 1,103,921 |
|
| 1,103,849 |
|
|
|
|
|
|
|
|
| |||||
Inter-segment eliminations |
| (4,488 | ) |
| (4,345 | ) |
| (13,464 | ) |
| (13,058 | ) |
|
|
|
|
|
|
|
| |||||
Total Revenues | $ | 407,126 |
| $ | 462,612 |
| $ | 1,739,568 |
| $ | 1,760,377 |
|
|
|
|
|
|
|
|
| |||||
Operating income (loss): |
|
|
|
|
|
|
|
| ||||
Electric Utilities | $ | 83,016 |
| $ | 69,483 |
| $ | 190,695 |
| $ | 165,455 |
|
Gas Utilities |
| 15,400 |
|
| 10,583 |
|
| 147,750 |
|
| 162,318 |
|
Corporate and Other |
| (645 | ) |
| (587 | ) |
| (2,275 | ) |
| (2,552 | ) |
Total Operating Income | $ | 97,771 |
| $ | 79,479 |
| $ | 336,170 |
| $ | 325,221 |
|
| Three Months Ended September 30, 2022 | External Operating Revenue | Inter-company Operating Revenue | Total Revenues | ||||||||||||||||||||
| Contract Customers | Other Revenues | Contract Customers | Other Revenues | ||||||||||||||||||||
| Segment: | |||||||||||||||||||||||
| Electric Utilities | $ | 254,917 | $ | 824 | $ | 2,928 | $ | — | $ | 258,669 | |||||||||||||
| Gas Utilities | 205,951 | 920 | 1,319 | 98 | 208,288 | ||||||||||||||||||
| Inter-company eliminations | — | — | (4,247) | (98) | (4,345) | ||||||||||||||||||
| Total | $ | 460,868 | $ | 1,744 | $ | — | $ | — | $ | 462,612 | |||||||||||||
| Three Months Ended September 30, 2021 | External Operating Revenue | Inter-company Operating Revenue | Total Revenues | ||||||||||||||||||||
| Contract Customers | Other Revenues | Contract Customers | Other Revenues | ||||||||||||||||||||
| Segment: | |||||||||||||||||||||||
| Electric Utilities | $ | 216,676 | $ | 850 | $ | 2,878 | $ | — | $ | 220,404 | |||||||||||||
| Gas Utilities | 161,977 | 1,087 | 1,520 | 99 | 164,683 | ||||||||||||||||||
| Inter-company eliminations | — | — | (4,398) | (99) | (4,497) | ||||||||||||||||||
| Total | $ | 378,653 | $ | 1,937 | $ | — | $ | — | $ | 380,590 | |||||||||||||
| Nine Months Ended September 30, 2022 | External Operating Revenue | Inter-company Operating Revenue | Total Revenues | ||||||||||||||||||||
| Contract Customers | Other Revenues | Contract Customers | Other Revenues | ||||||||||||||||||||
| Segment: | |||||||||||||||||||||||
| Electric Utilities | $ | 656,036 | $ | 4,764 | $ | 8,786 | $ | — | $ | 669,586 | |||||||||||||
| Gas Utilities | 1,096,925 | 2,652 | 3,957 | 315 | 1,103,849 | ||||||||||||||||||
| Inter-company eliminations | — | — | (12,743) | (315) | (13,058) | ||||||||||||||||||
| Total | $ | 1,752,961 | $ | 7,416 | $ | — | $ | — | $ | 1,760,377 | |||||||||||||
| Nine Months Ended September 30, 2021 | External Operating Revenue | Inter-company Operating Revenue | Total Revenues | ||||||||||||||||||||
| Contract Customers | Other Revenues | Contract Customers | Other Revenues | ||||||||||||||||||||
| Segment: | |||||||||||||||||||||||
| Electric Utilities | $ | 633,630 | $ | 4,556 | $ | 8,638 | $ | — | $ | 646,824 | |||||||||||||
| Gas Utilities | 743,663 | 4,745 | 4,559 | 285 | 753,252 | ||||||||||||||||||
| Inter-company eliminations | — | — | (13,197) | (285) | (13,482) | ||||||||||||||||||
| Total | $ | 1,377,293 | $ | 9,301 | $ | — | $ | — | $ | 1,386,594 | |||||||||||||
Total assets (net of inter-segment eliminations) as of: | September 30, 2023 |
| December 31, 2022 |
| ||
Electric Utilities | $ | 3,938,835 |
| $ | 3,929,721 |
|
Gas Utilities |
| 5,301,383 |
|
| 5,578,282 |
|
Corporate and Other |
| 692,710 |
|
| 110,227 |
|
Total assets | $ | 9,932,928 |
| $ | 9,618,230 |
|
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||
| Operating income (loss): | ||||||||||||||
| Electric Utilities | $ | 69,483 | $ | 72,840 | $ | 165,455 | $ | 159,645 | ||||||
| Gas Utilities | 10,583 | 17,257 | 162,318 | 139,336 | ||||||||||
| Corporate and Other | (587) | (224) | (2,552) | (3,527) | ||||||||||
| Operating income | 79,479 | 89,873 | 325,221 | 295,454 | ||||||||||
| Interest expense, net | (40,019) | (38,018) | (117,328) | (113,820) | ||||||||||
| Other income, net | 464 | 1,560 | 2,731 | 1,635 | ||||||||||
| Income tax (expense) | (2,090) | (5,253) | (15,920) | (6,333) | ||||||||||
| Net income | 37,834 | 48,162 | 194,704 | 176,936 | ||||||||||
| Net income attributable to non-controlling interest | (2,861) | (4,050) | (8,790) | (11,347) | ||||||||||
| Net income available for common stock | $ | 34,973 | $ | 44,112 | $ | 185,914 | $ | 165,589 | ||||||
Accounts Receivable and Allowance for Credit Losses
| September 30, 2023 |
| December 31, 2022 |
| ||
Billed Accounts Receivable | $ | 164,171 |
| $ | 267,571 |
|
Unbilled Revenue |
| 66,478 |
|
| 243,574 |
|
Less: Allowance for Credit Losses |
| (1,819 | ) |
| (2,953 | ) |
Account Receivable, net | $ | 228,830 |
| $ | 508,192 |
|
| September 30, 2022 | December 31, 2021 | ||||||||||
| Billed Accounts Receivable | $ | 168,757 | $ | 181,027 | |||||||
| Unbilled Revenue | 82,925 | 142,738 | |||||||||
| Less: Allowance for Credit Losses | (1,935) | (2,113) | |||||||||
| Accounts Receivable, net | $ | 249,747 | $ | 321,652 | |||||||
| Balance at Beginning of Year |
| Additions Charged to Costs and Expenses |
| Recoveries and Other Additions |
| Write-offs and Other Deductions |
| Balance at September 30, |
| |||||
2023 | $ | 2,953 |
| $ | 7,195 |
| $ | 2,445 |
| $ | (10,774 | ) | $ | 1,819 |
|
2022 | $ | 2,113 |
| $ | 6,473 |
| $ | 2,117 |
| $ | (8,768 | ) | $ | 1,935 |
|
| Balance at Beginning of Year | Additions Charged to Costs and Expenses | Recoveries and Other Additions | Write-offs and Other Deductions | Balance at September 30, | ||||||||||||||||||||||||||||||||||
| 2022 | $ | 2,113 | $ | 6,473 | $ | 2,117 | $ | (8,768) | $ | 1,935 | ||||||||||||||||||||||||||||
| 2021 | $ | 7,003 | $ | 1,111 | $ | 2,420 | $ | (8,222) | $ | 2,312 | ||||||||||||||||||||||||||||
| September 30, 2023 |
| December 31, 2022 |
| ||
Materials and supplies | $ | 104,945 |
| $ | 99,734 |
|
Fuel - Electric Utilities |
| 7,674 |
|
| 3,115 |
|
Natural gas in storage |
| 55,460 |
|
| 104,572 |
|
Total materials, supplies and fuel | $ | 168,079 |
| $ | 207,421 |
|
| September 30, 2022 | December 31, 2021 | ||||||||||
| Materials and supplies | $ | 95,390 | $ | 86,400 | |||||||
| Fuel - Electric Utilities | 1,362 | 1,267 | |||||||||
| Natural gas in storage | 126,410 | 63,312 | |||||||||
| Total materials, supplies and fuel | $ | 223,162 | $ | 150,979 | |||||||
| September 30, 2023 |
| December 31, 2022 |
| ||
Accrued employee compensation, benefits and withholdings | $ | 65,620 |
| $ | 62,890 |
|
Accrued property taxes |
| 46,309 |
|
| 52,430 |
|
Customer deposits and prepayments |
| 57,100 |
|
| 47,655 |
|
Accrued interest |
| 49,314 |
|
| 33,798 |
|
Other (none of which is individually significant) |
| 39,115 |
|
| 46,684 |
|
Total accrued liabilities | $ | 257,458 |
| $ | 243,457 |
|
| September 30, 2022 | December 31, 2021 | ||||||||||
| Accrued employee compensation, benefits and withholdings | $ | 64,855 | $ | 74,387 | |||||||
| Accrued property taxes | 46,513 | 50,874 | |||||||||
| Customer deposits and prepayments | 44,254 | 48,814 | |||||||||
| Accrued interest | 46,408 | 33,680 | |||||||||
| Other (none of which is individually significant) | 48,805 | 37,004 | |||||||||
| Total accrued liabilities | $ | 250,835 | $ | 244,759 | |||||||
Except as described in Notes 2 and Note 23, there have been no events subsequent to September 30, 2022,2023, which would require recognition in the condensed consolidated financial statementsConsolidated Financial Statements or disclosures.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussions should be read in conjunction with the Notes contained herein and Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in our 2021the 2022 Form 10-K.
Black Hills Corporation (together with its subsidiaries, referred to herein as the “Company,” “we,” “us” or “our”) isWe are a customer-focused energy solutions provider that invests in its communities’ safety, sustainability and growth with a mission of Improving Life with Energy for more than 1.3 million customers and a800+ communities we serve. Our vision to be the Energy Partner of Choice. The Company’s core mission— directs our strategy to invest in the safety, sustainability and growth of our primary focus — is to provide safe, reliable and cost-effective electric and natural gaseight-state service to 1.3 million utility customers in over 800 communities in eight states,territory, including Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming.Wyoming, and to meet our essential objective of providing safe, reliable and cost-effective electricity and natural gas.
We have received final commission approvalprovided energy and served customers for all of139 years, since the 1883 gold rush days in Deadwood, South Dakota. Throughout our Winter Storm Uri cost recovery applications, which will allow full recovery of our incremental fuel, purchased power and natural gas costs. See Note 2 ofhistory, the Notes to Condensed Consolidated Financial Statements for further information.
is fixed rate debt. Rising discount rates and r
ecent capital markets volatility had a limited impact to our Recent Developments
unfunded status of the BHC Pension Plan from the prior year
.
Electric Utilities
Gas Utilities
Corporate and Other
28
Results of Operations
Certain lines of business in which we operate are highly seasonal, and revenue from, and certain expenses for, such operations may fluctuate significantly among quarterly periods. Demand for electricity and natural gas is sensitive to seasonal cooling, heating and industrial load requirements. In particular, the normal peak usage season for our Electric Utilities is June through August while the normal peak usage season for our Gas Utilities is November through March. Significant earnings variances can be expected between the Gas Utilities segment’s peak and off-peak seasons. Due to this seasonal nature, our results of operations for the three and nine months ended September 30, 20222023 and 2021,2022, and our financial condition as of September 30, 20222023 and December 31, 2021,2022, are not necessarily indicative of the results of operations and financial condition to be expected as of or for any other period or for the entire year.
of the Notes to Condensed Consolidated Financial Statements.
Consolidated Summary and Overview
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||||
| Operating income (loss): | ||||||||||||||||||||
| Electric Utilities | $ | 69,483 | $ | 72,840 | $ | 165,455 | $ | 159,645 | ||||||||||||
| Gas Utilities | 10,583 | 17,257 | 162,318 | 139,336 | ||||||||||||||||
| Corporate and Other | (587) | (224) | (2,552) | (3,527) | ||||||||||||||||
| Operating income | 79,479 | 89,873 | 325,221 | 295,454 | ||||||||||||||||
| Interest expense, net | (40,019) | (38,018) | (117,328) | (113,820) | ||||||||||||||||
| Other income, net | 464 | 1,560 | 2,731 | 1,635 | ||||||||||||||||
| Income tax (expense) | (2,090) | (5,253) | (15,920) | (6,333) | ||||||||||||||||
| Net income | 37,834 | 48,162 | 194,704 | 176,936 | ||||||||||||||||
| Net income attributable to non-controlling interest | (2,861) | (4,050) | (8,790) | (11,347) | ||||||||||||||||
| Net income available for common stock | $ | 34,973 | $ | 44,112 | $ | 185,914 | $ | 165,589 | ||||||||||||
| Total earnings per share of common stock, Diluted | $ | 0.54 | $ | 0.70 | $ | 2.86 | $ | 2.63 | ||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||
| (in thousands, except per share amounts) |
| ||||||||||
Operating income (loss): |
|
|
|
|
|
|
|
| ||||
Electric Utilities | $ | 83,016 |
| $ | 69,483 |
| $ | 190,695 |
| $ | 165,455 |
|
Gas Utilities |
| 15,400 |
|
| 10,583 |
|
| 147,750 |
|
| 162,318 |
|
Corporate and Other |
| (645 | ) |
| (587 | ) |
| (2,275 | ) |
| (2,552 | ) |
Operating income |
| 97,771 |
|
| 79,479 |
|
| 336,170 |
|
| 325,221 |
|
|
|
|
|
|
|
|
| |||||
Interest expense, net |
| (40,998 | ) |
| (40,019 | ) |
| (126,023 | ) |
| (117,328 | ) |
Other income (expense), net |
| (647 | ) |
| 464 |
|
| (1,513 | ) |
| 2,731 |
|
Income tax (expense) |
| (7,366 | ) |
| (2,090 | ) |
| (15,950 | ) |
| (15,920 | ) |
Net income |
| 48,760 |
|
| 37,834 |
|
| 192,684 |
|
| 194,704 |
|
Net income attributable to non-controlling interest |
| (3,377 | ) |
| (2,861 | ) |
| (10,164 | ) |
| (8,790 | ) |
Net income available for common stock | $ | 45,383 |
| $ | 34,973 |
| $ | 182,520 |
| $ | 185,914 |
|
|
|
|
|
|
|
|
| |||||
Total earnings per share of common stock, Diluted | $ | 0.67 |
| $ | 0.54 |
| $ | 2.74 |
| $ | 2.86 |
|
Three Months Ended September 30, 20222023 Compared to the Three Months Ended September 30, 2021:
The variance to the prior year included the following:
Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022:
The variance to the prior year included the following:
29
•
Income tax expense increased $9.6 million driven by higher pre-tax income and a higher effective tax rate primarily due to prior year tax benefits from Colorado Electric and Nebraska Gas TCJA-related bill credits partially offset by tax benefits from state tax rate changes; and
A discussion of operating results from our business segments follows.
The following discussion includes financial information prepared in accordance with GAAP, as well as another financial measure, Electric and Gas Utility margin, that is considered a “non-GAAP financial measure.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. Electric and Gas Utility margin (revenue less cost of sales) is a non-GAAP financial measure due to the exclusion of operation and maintenance expenses, depreciation and amortization expenses, and property and production taxes from the measure.
Electric Utility margin is calculated as operating revenue less cost of fuel and purchased power. Gas Utility margin is calculated as operating revenue less cost of natural gas sold. Our Electric and Gas Utility margin is impacted by the fluctuations in power and natural gas purchases and other fuel supply costs. However, while these fluctuating costs impact Electric and Gas Utility margin as a percentage of revenue, they only impact total Electric and Gas Utility margin if the costs cannot be passed through to our customers.
Our Electric and Gas Utility margin measure may not be comparable to other companies’ Electric and Gas Utility margin measures. Furthermore, this measure is not intended to replace operating income as determined in accordance with GAAP as an indicator of operating performance.
Operating results for the Electric Utilities were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2022 | 2021 | Variance | 2022 | 2021 | Variance | |||||||||||||||
| Revenue: | ||||||||||||||||||||
| Electric - regulated | $ | 245,269 | $ | 210,053 | $ | 35,216 | $ | 635,190 | $ | 614,652 | $ | 20,538 | ||||||||
| Other - non-regulated | 13,401 | 10,351 | 3,050 | 34,396 | 32,172 | 2,224 | ||||||||||||||
| Total revenue | 258,669 | 220,404 | 38,265 | 669,586 | 646,824 | 22,762 | ||||||||||||||
| Cost of fuel and purchased power: | ||||||||||||||||||||
| Electric - regulated | 84,309 | 50,238 | 34,071 | 191,511 | 194,314 | (2,803) | ||||||||||||||
| Other - non-regulated | 1,644 | 893 | 751 | 3,484 | 2,679 | 805 | ||||||||||||||
| Total cost of fuel and purchased power | 85,953 | 51,131 | 34,822 | 194,995 | 196,993 | (1,998) | ||||||||||||||
| Electric Utility margin (non-GAAP) | 172,716 | 169,273 | 3,443 | 474,591 | 449,831 | 24,760 | ||||||||||||||
| Operations and maintenance | 68,896 | 63,472 | 5,424 | 207,565 | 192,507 | 15,058 | ||||||||||||||
| Depreciation and amortization | 34,337 | 32,961 | 1,376 | 101,571 | 97,679 | 3,892 | ||||||||||||||
| Total operating expenses | 103,233 | 96,433 | 6,800 | 309,136 | 290,186 | 18,950 | ||||||||||||||
| Operating income | $ | 69,483 | $ | 72,840 | $ | (3,357) | $ | 165,455 | $ | 159,645 | $ | 5,810 | ||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||||||||
| 2023 |
| 2022 |
| Variance |
| 2023 |
| 2022 |
| Variance |
| ||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Electric - regulated | $ | 221,715 |
| $ | 245,269 |
| $ | (23,554 | ) | $ | 611,238 |
| $ | 635,190 |
| $ | (23,952 | ) |
Other - non-regulated |
| 15,614 |
|
| 13,401 |
|
| 2,213 |
|
| 37,873 |
|
| 34,396 |
|
| 3,477 |
|
Total revenue |
| 237,329 |
|
| 258,669 |
|
| (21,340 | ) |
| 649,111 |
|
| 669,586 |
|
| (20,475 | ) |
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Cost of fuel and purchased power: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Electric - regulated |
| 54,974 |
|
| 84,309 |
|
| (29,335 | ) |
| 145,662 |
|
| 191,511 |
|
| (45,849 | ) |
Other - non-regulated |
| 454 |
|
| 1,644 |
|
| (1,190 | ) |
| 1,586 |
|
| 3,484 |
|
| (1,898 | ) |
Total cost of fuel and purchased power |
| 55,428 |
|
| 85,953 |
|
| (30,525 | ) |
| 147,248 |
|
| 194,995 |
|
| (47,747 | ) |
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Electric Utility margin (non-GAAP) |
| 181,901 |
|
| 172,716 |
|
| 9,185 |
|
| 501,863 |
|
| 474,591 |
|
| 27,272 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Operations and maintenance |
| 63,114 |
|
| 68,896 |
|
| (5,782 | ) |
| 204,487 |
|
| 207,565 |
|
| (3,078 | ) |
Depreciation and amortization |
| 35,771 |
|
| 34,337 |
|
| 1,434 |
|
| 106,681 |
|
| 101,571 |
|
| 5,110 |
|
| 98,885 |
|
| 103,233 |
|
| (4,348 | ) |
| 311,168 |
|
| 309,136 |
|
| 2,032 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Operating income | $ | 83,016 |
| $ | 69,483 |
| $ | 13,533 |
| $ | 190,695 |
| $ | 165,455 |
| $ | 25,240 |
|
30
Three Months Ended September 30, 20222023, Compared to the Three Months Ended September 30, 2021:
Electric Utility margin increased as a result of the following:
| (in millions) |
| |
New rates and rider recovery | $ | 5.7 |
|
Wygen I revenue recovery under business interruption insurance (a) |
| 5.0 |
|
Weather |
| (2.3 | ) |
Other |
| 0.8 |
|
$ | 9.2 |
| |
__________
Operations and maintenance expense increaseddecreased primarily due to higher generation-related expenses, higher vehicle expenses duea $3.9 million gain on a strategic sale of land in Wyoming to higher fuel costs, increased royalties on higher mining revenues partially offset by lower employee costs.a customer to support continued load growth.
Depreciation and amortization increased primarily due to a higher asset base driven by current year and prior year capital expenditures.
Electric Utility margin increased as a result of the following:
| (in millions) |
| |
New rates and rider recovery | $ | 15.9 |
|
Wygen I revenue recovery under business interruption insurance (a) |
| 5.0 |
|
Integrated Generation (b) |
| 5.0 |
|
Transmission services |
| 2.8 |
|
Off-system excess energy sales |
| 1.1 |
|
Weather |
| (4.5 | ) |
Other |
| 2.0 |
|
$ | 27.3 |
| |
Operations and maintenance expense increaseddecreased primarily due to a one-time $7.7 million gain on the planned sale of Northern Iowa Windpower assets and a $3.9 million gain on a strategic sale of land in Wyoming to a customer to support continued load growth partially offset by $5.5 million of higher cloud computing licensing costs,employee-related expenses and $3.5 million of higher generation-relatedmining and generation expenses higher vehicle expenses due todriven by planned outages, higher fuel costs and higher outside services expenses and increased property taxes due to expiration of an abatement partially offset by lower employeematerials costs.
Depreciation and amortization increased primarily due to a higher asset base driven by current year and prior year capital expenditures.
| Revenue (in thousands) |
| Quantities Sold (MWh) |
| ||||||||||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||||||
Residential | $ | 63,107 |
| $ | 72,115 |
| $ | 170,279 |
| $ | 187,217 |
|
| 393,830 |
|
| 421,782 |
|
| 1,090,579 |
|
| 1,137,139 |
|
Commercial |
| 69,508 |
|
| 77,314 |
|
| 195,110 |
|
| 210,423 |
|
| 567,111 |
|
| 581,239 |
|
| 1,576,141 |
|
| 1,581,487 |
|
Industrial |
| 42,988 |
|
| 47,090 |
|
| 116,455 |
|
| 120,688 |
|
| 553,481 |
|
| 483,223 |
|
| 1,511,569 |
|
| 1,411,919 |
|
Municipal |
| 4,731 |
|
| 6,093 |
|
| 13,202 |
|
| 15,660 |
|
| 42,782 |
|
| 46,745 |
|
| 116,118 |
|
| 122,290 |
|
Subtotal Retail Revenue - Electric |
| 180,334 |
|
| 202,612 |
|
| 495,046 |
|
| 533,989 |
|
| 1,557,204 |
|
| 1,532,989 |
|
| 4,294,407 |
|
| 4,252,835 |
|
Contract Wholesale |
| 6,839 |
|
| 8,378 |
|
| 15,449 |
|
| 18,639 |
|
| 140,547 |
|
| 160,070 |
|
| 403,682 |
|
| 492,922 |
|
Off-system/Power Marketing Wholesale |
| 9,580 |
|
| 16,769 |
|
| 31,663 |
|
| 32,590 |
|
| 138,438 |
|
| 131,469 |
|
| 518,552 |
|
| 436,335 |
|
Other (a) |
| 24,962 |
|
| 17,509 |
|
| 69,080 |
|
| 49,972 |
|
| - |
|
| - |
|
| - |
|
| - |
|
Total Regulated |
| 221,715 |
|
| 245,269 |
|
| 611,238 |
|
| 635,190 |
|
| 1,836,189 |
|
| 1,824,528 |
|
| 5,216,641 |
|
| 5,182,092 |
|
Non-Regulated (b) |
| 15,614 |
|
| 13,401 |
|
| 37,873 |
|
| 34,396 |
|
| 25,369 |
|
| 59,745 |
|
| 102,563 |
|
| 221,609 |
|
Total Revenue and Quantities Sold | $ | 237,329 |
| $ | 258,669 |
| $ | 649,111 |
| $ | 669,586 |
|
| 1,861,558 |
|
| 1,884,273 |
|
| 5,319,204 |
|
| 5,403,701 |
|
Other Uses, Losses or Generation, net (c) |
|
|
|
|
|
|
|
|
| 97,709 |
|
| 125,613 |
|
| 345,642 |
|
| 337,222 |
| ||||
Total Energy |
|
|
|
|
|
|
|
|
| 1,959,267 |
|
| 2,009,886 |
|
| 5,664,846 |
|
| 5,740,923 |
| ||||
| Revenue (in thousands) | Quantities Sold (MWh) | ||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
| Residential | $ | 72,115 | $ | 66,138 | $ | 187,217 | $ | 192,349 | 421,782 | 419,001 | 1,137,139 | 1,150,150 | |||||||||||||||||
| Commercial | 77,314 | 70,696 | 210,423 | 214,512 | 581,239 | 576,037 | 1,581,487 | 1,570,455 | |||||||||||||||||||||
| Industrial | 47,090 | 37,323 | 120,688 | 115,518 | 483,223 | 459,076 | 1,411,919 | 1,316,060 | |||||||||||||||||||||
| Municipal | 6,093 | 5,069 | 15,660 | 14,471 | 46,745 | 47,515 | 122,290 | 123,620 | |||||||||||||||||||||
| Subtotal Retail Revenue - Electric | 202,612 | 179,226 | 533,989 | 536,850 | 1,532,989 | 1,501,629 | 4,252,835 | 4,160,285 | |||||||||||||||||||||
| Contract Wholesale | 8,378 | 3,855 | 18,639 | 12,787 | 160,070 | 129,221 | 492,922 | 415,979 | |||||||||||||||||||||
| Off-system/Power Marketing Wholesale | 16,769 | 13,511 | 32,590 | 25,549 | 131,469 | 120,224 | 436,335 | 329,426 | |||||||||||||||||||||
Other (a) | 17,509 | 13,461 | 49,972 | 39,466 | — | — | — | — | |||||||||||||||||||||
| Total Regulated | 245,269 | 210,053 | 635,190 | 614,652 | 1,824,528 | 1,751,074 | 5,182,092 | 4,905,690 | |||||||||||||||||||||
Non-Regulated (b) | 13,401 | 10,351 | 34,396 | 32,172 | 59,745 | 56,583 | 221,609 | 197,506 | |||||||||||||||||||||
| Total Revenue and Quantities Sold | $ | 258,669 | $ | 220,404 | $ | 669,586 | $ | 646,824 | 1,884,273 | 1,807,657 | 5,403,701 | 5,103,196 | |||||||||||||||||
Other Uses, Losses or Generation, net (c) | 125,613 | 139,521 | 337,222 | 367,201 | |||||||||||||||||||||||||
| Total Energy | 2,009,886 | 1,947,178 | 5,740,923 | 5,470,397 | |||||||||||||||||||||||||
| Revenue (in thousands) |
| Quantities Sold (MWh) |
| ||||||||||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||||||
Colorado Electric | $ | 80,771 |
| $ | 96,380 |
| $ | 216,904 |
| $ | 243,022 |
|
| 653,166 |
|
| 647,532 |
|
| 1,794,464 |
|
| 1,836,010 |
|
South Dakota Electric |
| 83,024 |
|
| 94,281 |
|
| 240,588 |
|
| 249,073 |
|
| 622,670 |
|
| 684,059 |
|
| 1,876,714 |
|
| 1,928,454 |
|
Wyoming Electric |
| 58,429 |
|
| 55,058 |
|
| 155,039 |
|
| 144,293 |
|
| 560,353 |
|
| 492,938 |
|
| 1,545,463 |
|
| 1,417,629 |
|
Integrated Generation |
| 15,105 |
|
| 12,950 |
|
| 36,580 |
|
| 33,198 |
|
| 25,369 |
|
| 59,744 |
|
| 102,563 |
|
| 221,608 |
|
Total Revenue and Quantities Sold | $ | 237,329 |
| $ | 258,669 |
| $ | 649,111 |
| $ | 669,586 |
|
| 1,861,558 |
|
| 1,884,273 |
|
| 5,319,204 |
|
| 5,403,701 |
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||
Quantities Generated and Purchased by Fuel Type (MWh) | 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||
Generated: |
|
|
|
|
|
|
|
| ||||
Coal |
| 704,227 |
|
| 736,181 |
|
| 2,000,126 |
|
| 1,989,057 |
|
Natural Gas and Oil |
| 540,927 |
|
| 457,790 |
|
| 1,493,230 |
|
| 1,016,369 |
|
Wind |
| 138,527 |
|
| 143,278 |
|
| 519,873 |
|
| 641,302 |
|
Total Generated |
| 1,383,681 |
|
| 1,337,249 |
|
| 4,013,229 |
|
| 3,646,728 |
|
Purchased: |
|
|
|
|
|
|
|
| ||||
Coal, Natural Gas, Oil and Other Market Purchases |
| 459,141 |
|
| 609,699 |
|
| 1,369,994 |
|
| 1,805,904 |
|
Wind and Solar |
| 116,445 |
|
| 62,938 |
|
| 281,623 |
|
| 288,291 |
|
Total Purchased |
| 575,586 |
|
| 672,637 |
|
| 1,651,617 |
|
| 2,094,195 |
|
|
|
|
|
|
|
|
| |||||
Total Generated and Purchased |
| 1,959,267 |
|
| 2,009,886 |
|
| 5,664,846 |
|
| 5,740,923 |
|
32
| Revenue (in thousands) | Quantities Sold (MWh) | |||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||
| Colorado Electric | $ | 96,380 | $ | 82,971 | $ | 243,022 | $ | 226,417 | 647,532 | 667,477 | 1,836,010 | 1,817,821 | ||||||||||||||||||||||||||
| South Dakota Electric | 94,281 | 80,674 | 249,073 | 247,443 | 684,059 | 630,832 | 1,928,454 | 1,794,308 | ||||||||||||||||||||||||||||||
| Wyoming Electric | 55,058 | 46,813 | 144,293 | 142,364 | 492,938 | 452,765 | 1,417,629 | 1,293,561 | ||||||||||||||||||||||||||||||
| Integrated Generation | 12,950 | 9,946 | 33,198 | 30,600 | 59,744 | 56,583 | 221,608 | 197,506 | ||||||||||||||||||||||||||||||
| Total Revenue and Quantities Sold | $ | 258,669 | $ | 220,404 | $ | 669,586 | $ | 646,824 | 1,884,273 | 1,807,657 | 5,403,701 | 5,103,196 | ||||||||||||||||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||
Quantities Generated and Purchased (MWh) | 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||
Generated: |
|
|
|
|
|
|
|
| ||||
Colorado Electric |
| 211,420 |
|
| 127,090 |
|
| 491,995 |
|
| 324,638 |
|
South Dakota Electric |
| 489,160 |
|
| 510,443 |
|
| 1,500,696 |
|
| 1,333,984 |
|
Wyoming Electric |
| 221,999 |
|
| 236,761 |
|
| 667,730 |
|
| 667,079 |
|
Integrated Generation |
| 461,102 |
|
| 462,955 |
|
| 1,352,808 |
|
| 1,321,027 |
|
Total Generated |
| 1,383,681 |
|
| 1,337,249 |
|
| 4,013,229 |
|
| 3,646,728 |
|
Purchased: |
|
|
|
|
|
|
|
| ||||
Colorado Electric |
| 116,234 |
|
| 251,076 |
|
| 442,216 |
|
| 807,442 |
|
South Dakota Electric |
| 177,341 |
|
| 221,872 |
|
| 438,646 |
|
| 667,560 |
|
Wyoming Electric |
| 267,583 |
|
| 174,946 |
|
| 723,542 |
|
| 551,683 |
|
Integrated Generation |
| 14,428 |
|
| 24,743 |
|
| 47,213 |
|
| 67,510 |
|
Total Purchased |
| 575,586 |
|
| 672,637 |
|
| 1,651,617 |
|
| 2,094,195 |
|
|
|
|
|
|
|
|
| |||||
Total Generated and Purchased |
| 1,959,267 |
|
| 2,009,886 |
|
| 5,664,846 |
|
| 5,740,923 |
|
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
| 2023 | 2022 | 2023 | 2022 | ||||
Degree Days | Actual | Variance from Normal | Actual | Variance from Normal | Actual | Variance from Normal | Actual | Variance from Normal |
Heating Degree Days: |
|
|
|
|
|
|
|
|
Colorado Electric | 26 | (42)% | 25 | (66)% | 3,365 | 5% | 3,296 | 4% |
South Dakota Electric | 140 | (15)% | 91 | (57)% | 4,621 | 2% | 4,560 | ---% |
Wyoming Electric | 152 | (12)% | 119 | (60)% | 4,534 | 4% | 4,410 | (2)% |
Combined (a) | 91 | (19)% | 66 | (60)% | 4,031 | 4% | 3,952 | 1% |
|
|
|
|
|
|
|
| |
Cooling Degree Days: |
|
|
|
|
|
|
|
|
Colorado Electric | 909 | 6% | 1,028 | 28% | 1,040 | (10)% | 1,361 | 27% |
South Dakota Electric | 460 | (11)% | 707 | 38% | 496 | (21)% | 814 | 35% |
Wyoming Electric | 315 | (20)% | 580 | 72% | 329 | (30)% | 701 | 77% |
Combined (a) | 635 | (2)% | 828 | 36% | 710 | (15)% | 1,041 | 34% |
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| Quantities Generated and Purchased by Fuel Type (MWh) | 2022 | 2021 | 2022 | 2021 | ||||||||||
| Generated: | ||||||||||||||
| Coal | 736,181 | 711,148 | 1,989,057 | 1,953,104 | ||||||||||
| Natural Gas and Oil | 457,790 | 508,170 | 1,016,369 | 1,259,111 | ||||||||||
| Wind | 143,278 | 162,924 | 641,302 | 572,507 | ||||||||||
| Total Generated | 1,337,249 | 1,382,242 | 3,646,728 | 3,784,722 | ||||||||||
| Purchased: | ||||||||||||||
| Coal, Natural Gas, Oil and Other Market Purchases | 609,699 | 495,905 | 1,805,904 | 1,441,792 | ||||||||||
| Wind | 62,938 | 69,031 | 288,291 | 243,883 | ||||||||||
| Total Purchased | 672,637 | 564,936 | 2,094,195 | 1,685,675 | ||||||||||
| Total Generated and Purchased | 2,009,886 | 1,947,178 | 5,740,923 | 5,470,397 | ||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| Quantities Generated and Purchased (MWh) | 2022 | 2021 | 2022 | 2021 | ||||||||||
| Generated: | ||||||||||||||
| Colorado Electric | 127,090 | 150,646 | 324,638 | 351,723 | ||||||||||
| South Dakota Electric | 510,443 | 538,632 | 1,333,984 | 1,450,113 | ||||||||||
| Wyoming Electric | 236,761 | 221,845 | 667,079 | 618,375 | ||||||||||
| Integrated Generation | 462,955 | 471,119 | 1,321,027 | 1,364,511 | ||||||||||
| Total Generated | 1,337,249 | 1,382,242 | 3,646,728 | 3,784,722 | ||||||||||
| Purchased: | ||||||||||||||
| Colorado Electric | 251,076 | 244,613 | 807,442 | 716,506 | ||||||||||
| South Dakota Electric | 221,872 | 150,269 | 667,560 | 446,904 | ||||||||||
| Wyoming Electric | 174,946 | 146,489 | 551,683 | 454,091 | ||||||||||
| Integrated Generation | 24,743 | 23,565 | 67,510 | 68,174 | ||||||||||
| Total Purchased | 672,637 | 564,936 | 2,094,195 | 1,685,675 | ||||||||||
| Total Generated and Purchased | 2,009,886 | 1,947,178 | 5,740,923 | 5,470,397 | ||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||
| Degree Days | Actual | Variance from Normal | Actual | Variance from Normal | Actual | Variance from Normal | Actual | Variance from Normal | |||||||||||||||||||||
| Heating Degree Days: | |||||||||||||||||||||||||||||
| Colorado Electric | 25 | (66) | % | 22 | (78) | % | 3,296 | 4 | % | 3,348 | (1) | % | |||||||||||||||||
| South Dakota Electric | 91 | (57) | % | 90 | (60) | % | 4,560 | — | % | 4,462 | — | % | |||||||||||||||||
| Wyoming Electric | 119 | (60) | % | 112 | (62) | % | 4,410 | (2) | % | 4,594 | 2 | % | |||||||||||||||||
Combined (a) | 66 | (60) | % | 63 | (65) | % | 3,952 | 1 | % | 3,979 | — | % | |||||||||||||||||
| Cooling Degree Days: | |||||||||||||||||||||||||||||
| Colorado Electric | 1,028 | 28 | % | 942 | 38 | % | 1,361 | 27 | % | 1,242 | 39 | % | |||||||||||||||||
| South Dakota Electric | 707 | 38 | % | 649 | 22 | % | 814 | 35 | % | 816 | 29 | % | |||||||||||||||||
| Wyoming Electric | 580 | 72 | % | 487 | 63 | % | 701 | 77 | % | 604 | 74 | % | |||||||||||||||||
Combined (a) | 828 | 36 | % | 751 | 35 | % | 1,041 | 34 | % | 968 | 39 | % | |||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||
Contracted generating facilities availability by fuel type (a) | 2023 | 2022 | 2023 | 2022 |
Coal (b) | 96.3% | 96.5% | 93.7% | 89.7% |
Natural gas and diesel oil | 94.2% | 97.0% | 94.0% | 95.8% |
Wind | 93.4% | 94.4% | 93.4% | 94.6% |
Total Availability | 94.7% | 96.4% | 93.8% | 94.0% |
|
|
|
| |
Wind Capacity Factor | 31.3% | 22.9% | 37.9% | 34.7% |
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
Contracted generating facilities Availability by fuel type (a) | 2022 | 2021 | 2022 | 2021 | ||||||||||
Coal (b) (c) | 96.5 | % | 94.4 | % | 89.7 | % | 88.9 | % | ||||||
| Natural gas and diesel oil | 97.0 | % | 97.4 | % | 95.8 | % | 95.0 | % | ||||||
| Wind | 94.4 | % | 96.5 | % | 94.6 | % | 95.7 | % | ||||||
| Total Availability | 96.4 | % | 96.4 | % | 94.0 | % | 93.5 | % | ||||||
| Wind Capacity Factor | 22.9 | % | 26.8 | % | 34.7 | % | 30.9 | % | ||||||
33
Gas Utilities
Operating results for the Gas Utilities were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2022 | 2021 | Variance | 2022 | 2021 | Variance | |||||||||||||||
| Revenue: | ||||||||||||||||||||
| Natural gas - regulated | $ | 192,104 | $ | 150,075 | $ | 42,029 | $ | 1,046,910 | $ | 700,617 | $ | 346,293 | ||||||||
| Other - non-regulated | 16,184 | 14,608 | 1,576 | 56,938 | 52,635 | 4,303 | ||||||||||||||
| Total revenue | 208,288 | 164,683 | 43,605 | 1,103,849 | 753,252 | 350,597 | ||||||||||||||
| Cost of natural gas sold: | ||||||||||||||||||||
| Natural gas - regulated | 77,590 | 43,884 | 33,706 | 588,007 | 289,168 | 298,839 | ||||||||||||||
| Other - non-regulated | 5,187 | (750) | 5,937 | 11,242 | 10,131 | 1,111 | ||||||||||||||
| Total cost of natural gas sold | 82,778 | 43,134 | 39,644 | 599,249 | 299,299 | 299,950 | ||||||||||||||
| Gas Utility margin (non-GAAP) | 125,510 | 121,549 | 3,961 | 504,600 | 453,953 | 50,647 | ||||||||||||||
| Operations and maintenance | 85,311 | 78,161 | 7,150 | 255,441 | 237,624 | 17,817 | ||||||||||||||
| Depreciation and amortization | 29,616 | 26,131 | 3,485 | 86,841 | 76,993 | 9,848 | ||||||||||||||
| Total operating expenses | 114,927 | 104,292 | 10,635 | 342,282 | 314,617 | 27,665 | ||||||||||||||
| Operating income | $ | 10,583 | $ | 17,257 | $ | (6,674) | $ | 162,318 | $ | 139,336 | $ | 22,982 | ||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||||||||
| 2023 |
| 2022 |
| Variance |
| 2023 |
| 2022 |
| Variance |
| ||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Natural gas - regulated | $ | 159,481 |
| $ | 192,104 |
| $ | (32,623 | ) | $ | 1,041,017 |
| $ | 1,046,910 |
| $ | (5,893 | ) |
Other - non-regulated |
| 14,804 |
|
| 16,184 |
|
| (1,380 | ) |
| 62,904 |
|
| 56,938 |
|
| 5,966 |
|
Total revenue |
| 174,285 |
|
| 208,288 |
|
| (34,003 | ) |
| 1,103,921 |
|
| 1,103,849 |
|
| 73 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Cost of natural gas sold: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Natural gas - regulated |
| 43,329 |
|
| 77,590 |
|
| (34,261 | ) |
| 578,860 |
|
| 588,007 |
|
| (9,147 | ) |
Other - non-regulated |
| 3,599 |
|
| 5,187 |
|
| (1,588 | ) |
| 23,989 |
|
| 11,242 |
|
| 12,747 |
|
Total cost of natural gas sold |
| 46,928 |
|
| 82,778 |
|
| (35,850 | ) |
| 602,849 |
|
| 599,249 |
|
| 3,600 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Gas Utility margin (non-GAAP) |
| 127,357 |
|
| 125,510 |
|
| 1,847 |
|
| 501,072 |
|
| 504,600 |
|
| (3,528 | ) |
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Operations and maintenance |
| 82,922 |
|
| 85,311 |
|
| (2,389 | ) |
| 268,972 |
|
| 255,441 |
|
| 13,531 |
|
Depreciation and amortization |
| 29,035 |
|
| 29,616 |
|
| (581 | ) |
| 84,350 |
|
| 86,841 |
|
| (2,491 | ) |
| 111,957 |
|
| 114,927 |
|
| (2,970 | ) |
| 353,322 |
|
| 342,282 |
|
| 11,040 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Operating income | $ | 15,400 |
| $ | 10,583 |
| $ | 4,817 |
|
| 147,750 |
| $ | 162,318 |
| $ | (14,568 | ) |
Gas Utility margin increased as a result of the following:
__________
(in millions) |
| ||
New rates and rider recovery | $ | 2.6 |
|
Retail customer growth and demand |
| 2.4 |
|
Mark-to-market on non-utility natural gas commodity contracts |
| (1.4 | ) |
Weather |
| (1.3 | ) |
Other |
| (0.5 | ) |
$ | 1.8 |
| |
Operations and maintenance expense decreased primarily due to $2.4 million of lower outside services expenses.
Depreciation and amortization was comparable to the same period in the prior year include $3.8 millionyear.
Nine Months Ended September 30, 2023, Compared to the Nine Months Ended September 30, 2022:
Gas Utility margin decreased as a result of increased irrigation loads to agriculture customers in our Nebraska Gas service territory.
| (in millions) |
| |
Prior year true-up of Winter Storm Uri carrying costs (a) | $ | (10.3 | ) |
Mark-to-market on non-utility natural gas commodity contracts |
| (5.4 | ) |
Weather |
| (4.3 | ) |
New rates and rider recovery |
| 10.3 |
|
Retail customer growth and demand |
| 7.1 |
|
Other |
| (0.9 | ) |
$ | (3.5 | ) | |
Note 2 of the Notes to Condensed Consolidated Financial Statements for additional information.
Operations and maintenance expense increased primarily due to increased bad debt expense primarily attributable to$12.3 million of higher customer billings, higher outside services and materials expenses, and higher vehicle expenses due to higher fuel costs partially offset by lower employee costs.employee-related expenses.
Depreciation and amortization increased primarily due to a higher asset base driven by prior year capital expenditures.
34
Table of increased irrigation loads to agriculture customers in our Nebraska Gas service territory.
increased primarily due to increased bad debt expense primarily attributable to higher customer billings, higher cloud computing licensing costs, higher outside services and materials expenses, higher vehicle expenses due to higher fuel costs and increased property taxes due to a higher asset base partially offset by lower employee costs.
increased primarily due to a higher asset base driven by prior year capital expenditures.
Operating StatisticsRevenue (in thousands) Quantities Sold and Transported (Dth) Three Months Ended
September 30,Nine Months Ended
September 30,Three Months Ended
September 30,Nine Months Ended
September 30,2022 2021 2022 2021 2022 2021 2022 2021 Residential $ 85,398 $ 68,646 $ 604,568 $ 401,413 3,572,971 3,564,722 43,910,976 42,708,511 Commercial 36,819 27,038 256,643 155,015 2,374,179 2,426,019 21,505,127 20,732,271 Industrial 26,155 13,863 52,268 24,576 3,153,641 2,873,540 6,468,756 5,109,501 Other 2,566 2,706 7,638 1,816 — — — — Total Distribution 150,937 112,253 921,117 582,820 9,100,791 8,864,281 71,884,859 68,550,283 Transportation and Transmission 41,166 37,822 125,794 117,797 35,302,591 34,735,601 117,971,404 114,124,253 Total Regulated 192,104 150,075 1,046,910 700,617 44,403,382 43,599,882 189,856,263 182,674,536 Non-regulated Services 16,184 14,608 56,938 52,635 — — — — Total Revenue and Quantities Sold $ 208,288 $ 164,683 $ 1,103,849 $ 753,252 44,403,382 43,599,882 189,856,263 182,674,536
| Revenue (in thousands) |
| Quantities Sold and Transported (Dth) |
| ||||||||||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||||||
Residential | $ | 75,153 |
| $ | 85,398 |
| $ | 620,306 |
| $ | 604,568 |
|
| 3,546,242 |
|
| 3,572,971 |
|
| 41,078,623 |
|
| 43,910,976 |
|
Commercial |
| 28,629 |
|
| 36,819 |
|
| 255,430 |
|
| 256,643 |
|
| 2,399,834 |
|
| 2,374,179 |
|
| 20,462,092 |
|
| 21,505,127 |
|
Industrial |
| 9,848 |
|
| 26,155 |
|
| 26,156 |
|
| 52,268 |
|
| 2,129,492 |
|
| 3,153,641 |
|
| 4,576,537 |
|
| 6,468,756 |
|
Other |
| 3,057 |
|
| 2,566 |
|
| 7,305 |
|
| 7,638 |
|
| - |
|
| - |
|
| - |
|
| - |
|
Total Distribution |
| 116,687 |
|
| 150,937 |
|
| 909,197 |
|
| 921,117 |
|
| 8,075,568 |
|
| 9,100,791 |
|
| 66,117,252 |
|
| 71,884,859 |
|
Transportation and Transmission |
| 42,794 |
|
| 41,166 |
|
| 131,820 |
|
| 125,794 |
|
| 36,773,895 |
|
| 35,302,591 |
|
| 118,180,078 |
|
| 117,971,404 |
|
Total Regulated |
| 159,481 |
|
| 192,104 |
|
| 1,041,017 |
|
| 1,046,910 |
|
| 44,849,463 |
|
| 44,403,382 |
|
| 184,297,330 |
|
| 189,856,263 |
|
Non-regulated Services (a) |
| 14,804 |
|
| 16,184 |
|
| 62,904 |
|
| 56,938 |
|
| - |
|
| - |
|
| - |
|
| - |
|
Total Revenue and Quantities Sold | $ | 174,285 |
| $ | 208,288 |
| $ | 1,103,921 |
| $ | 1,103,849 |
|
| 44,849,463 |
|
| 44,403,382 |
|
| 184,297,330 |
|
| 189,856,263 |
|
| Revenue (in thousands) |
| Quantities Sold and Transported (Dth) |
| ||||||||||||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| ||||||||
Arkansas Gas | $ | 27,166 |
| $ | 30,663 |
| $ | 189,034 |
| $ | 210,287 |
|
| 4,372,453 |
|
| 4,396,388 |
|
| 21,098,256 |
|
| 22,769,574 |
|
Colorado Gas |
| 31,503 |
|
| 32,239 |
|
| 227,852 |
|
| 202,620 |
|
| 3,588,228 |
|
| 3,408,420 |
|
| 23,283,092 |
|
| 23,192,881 |
|
Iowa Gas |
| 18,784 |
|
| 24,580 |
|
| 168,137 |
|
| 187,209 |
|
| 5,790,254 |
|
| 5,103,212 |
|
| 27,193,172 |
|
| 28,658,007 |
|
Kansas Gas |
| 22,724 |
|
| 38,029 |
|
| 118,478 |
|
| 132,362 |
|
| 9,084,974 |
|
| 9,202,701 |
|
| 27,382,033 |
|
| 28,954,575 |
|
Nebraska Gas |
| 55,297 |
|
| 61,588 |
|
| 277,861 |
|
| 258,159 |
|
| 16,968,376 |
|
| 17,237,325 |
|
| 59,774,008 |
|
| 61,287,579 |
|
Wyoming Gas |
| 18,811 |
|
| 21,189 |
|
| 122,559 |
|
| 113,212 |
|
| 5,045,178 |
|
| 5,055,336 |
|
| 25,566,769 |
|
| 24,993,647 |
|
Total Revenue and Quantities Sold | $ | 174,285 |
| $ | 208,288 |
| $ | 1,103,921 |
| $ | 1,103,849 |
|
| 44,849,463 |
|
| 44,403,382 |
|
| 184,297,330 |
|
| 189,856,263 |
|
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
| 2023 | 2022 | 2023 | 2022 | ||||
Heating Degree Days | Actual | Variance from Normal | Actual | Variance from Normal | Actual | Variance from Normal | Actual | Variance from Normal |
Arkansas Gas (a) | -- | (100)% | 16 | (63)% | 1,944 | (18)% | 2,386 | (4)% |
Colorado Gas | 91 | (22)% | 84 | (61)% | 4,078 | 7% | 3,847 | (6)% |
Iowa Gas | 37 | (59)% | 92 | (34)% | 3,867 | (10)% | 4,474 | 7% |
Kansas Gas (a) | 6 | (78)% | 23 | (58)% | 2,749 | 6% | 3,043 | 3% |
Nebraska Gas | 21 | (67)% | 48 | (56)% | 3,591 | (5)% | 3,768 | ---% |
Wyoming Gas | 180 | 5% | 140 | (55)% | 4,953 | 14% | 4,738 | 1% |
Combined (b) | 56 | (35)% | 70 | (53)% | 3,926 | 1% | 4,003 | ---% |
| Revenue (in thousands) | Quantities Sold & Transported (Dth) | ||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
| Arkansas Gas | $ | 30,663 | $ | 25,188 | $ | 210,287 | $ | 145,176 | 4,396,388 | 4,319,944 | 22,769,574 | 23,345,095 | |||||||||||||||||
| Colorado Gas | 32,239 | 22,452 | 202,620 | 135,764 | 3,408,420 | 3,798,587 | 23,192,881 | 23,121,887 | |||||||||||||||||||||
| Iowa Gas | 24,580 | 22,015 | 187,209 | 108,600 | 5,103,212 | 5,810,932 | 28,658,007 | 27,141,518 | |||||||||||||||||||||
| Kansas Gas | 38,029 | 25,972 | 132,362 | 87,198 | 9,202,701 | 9,075,960 | 28,954,575 | 26,694,184 | |||||||||||||||||||||
| Nebraska Gas | 61,588 | 51,538 | 258,159 | 187,673 | 17,237,325 | 16,174,821 | 61,287,579 | 59,281,802 | |||||||||||||||||||||
| Wyoming Gas | 21,189 | 17,518 | 113,212 | 88,841 | 5,055,336 | 4,419,638 | 24,993,647 | 23,090,050 | |||||||||||||||||||||
| Total Revenue and Quantities Sold | $ | 208,288 | $ | 164,683 | $ | 1,103,849 | $ | 753,252 | 44,403,382 | 43,599,882 | 189,856,263 | 182,674,536 | |||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||
| Heating Degree Days | Actual | Variance from Normal | Actual | Variance from Normal | Actual | Variance from Normal | Actual | Variance from Normal | |||||||||||||||||||||
Arkansas Gas (a) | 16 | (63)% | 11 | (74)% | 2,386 | (4)% | 2,515 | 1% | |||||||||||||||||||||
| Colorado Gas | 84 | (61)% | 92 | (51)% | 3,847 | (6)% | 3,922 | (4)% | |||||||||||||||||||||
| Iowa Gas | 92 | (34)% | 42 | (70)% | 4,474 | 7% | 4,155 | (1)% | |||||||||||||||||||||
Kansas Gas (a) | 23 | (58)% | 10 | (82)% | 3,043 | 3% | 3,079 | 4% | |||||||||||||||||||||
| Nebraska Gas | 48 | (56)% | 33 | (70)% | 3,768 | —% | 3,754 | (1)% | |||||||||||||||||||||
| Wyoming Gas | 140 | (55)% | 153 | (50)% | 4,738 | 1% | 4,778 | 1% | |||||||||||||||||||||
Combined (b) | 70 | (53)% | 53 | (61)% | 4,003 | —% | 3,978 | —% | |||||||||||||||||||||
Corporate and Other
Corporate and Other operating results were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2022 | 2021 | Variance | 2022 | 2021 | Variance | |||||||||||||||
| Operating (loss) | $ | (587) | $ | (224) | $ | (363) | $ | (2,552) | $ | (3,527) | $ | 975 | ||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||||||||
| 2023 |
| 2022 |
| Variance |
| 2023 |
| 2022 |
| Variance |
| ||||||
Operating (loss) | $ | (645 | ) | $ | (587 | ) | $ | (58 | ) | $ | (2,275 | ) | $ | (2,552 | ) | $ | 277 |
|
Three Months Ended September 30, 20222023, Compared to the Three Months Ended September 30, 2021:
Operating (loss)loss was comparable to the same period in the prior year.
Operating (loss)loss was primarily duecomparable to an allocation of a 2020 employee cost true-upthe same period in the first quarter of 2021, which was offset in our business segments.
Consolidated Interest Expense, Other Income and Income Tax Expense
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2022 | 2021 | Variance | 2022 | 2021 | Variance | |||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Interest expense, net | $ | (40,019) | $ | (38,018) | $ | (2,001) | $ | (117,328) | $ | (113,820) | $ | (3,508) | ||||||||
| Other income, net | 464 | 1,560 | $ | (1,096) | $ | 2,731 | $ | 1,635 | $ | 1,096 | ||||||||||
| Income tax (expense) | (2,090) | (5,253) | $ | 3,163 | $ | (15,920) | $ | (6,333) | $ | (9,587) | ||||||||||
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||||||||
| 2023 |
| 2022 |
| Variance |
| 2023 |
| 2022 |
| Variance |
| ||||||
| (in thousands) |
| ||||||||||||||||
Interest expense, net | $ | (40,998 | ) | $ | (40,019 | ) | $ | (979 | ) | $ | (126,023 | ) | $ | (117,328 | ) | $ | (8,695 | ) |
Other income (expense), net |
| (647 | ) |
| 464 |
|
| (1,111 | ) |
| (1,513 | ) |
| 2,731 |
|
| (4,244 | ) |
Income tax (expense) |
| (7,366 | ) |
| (2,090 | ) |
| (5,276 | ) |
| (15,950 | ) |
| (15,920 | ) |
| (30 | ) |
Three Months Ended September 30, 20222023, Compared to the Three Months Ended September 30, 2021:
Interest Expense,expense, net
Interest expense, net was duecomparable to higher interest rates and higher short-term debt balances.
of the Notes to Condensed Consolidated Financial Statements for discussion of effective tax rate variances.
Income net
Income tax expense increased primarily due to higher pre-tax income and a higher effective tax rate. For the ninethree months ended September 30, 2022,2023, the effective tax rate was 7.6%13.1% compared to 3.5%5.2% for the same period in 2021.2022. See Note 11 of the Condensed Notes to Condensed Consolidated Financial Statements for discussion of effective tax rate variances.
Nine Months Ended September 30, 2023, Compared to the Nine Months Ended September 30, 2022:
Interest expense, net
Interest expense, net increased due to higher interest rates partially offset by increased interest income on higher cash and cash equivalents balances.
Other income (expense), net
Other expense, net increased primarily due to higher non-service benefit plan costs driven by higher discount rates and higher costs for our non-qualified benefit plans which were driven by market performance.
Income tax (expense)
Income tax expense and the effective tax rate were comparable to the same period in the prior year. See Note 11 of the Condensed Notes to Consolidated Financial Statements for further information on the effective tax rate.
36
Liquidity and Capital Resources
There have been no material changes in Liquidity and Capital Resources from those reported in Item 7 of our 20212022 Annual Report on Form 10-K except as described below.
The following table summarizestables summarize our cash flows for the nine months ended September 30, 2023, (in thousands):
| Cash provided by (used in): | 2022 | 2021 | Variance | ||||||||
| Operating activities | $ | 494,287 | $ | (144,760) | $ | 639,047 | |||||
| Investing activities | $ | (466,321) | $ | (484,106) | $ | 17,785 | |||||
| Financing activities | $ | (24,684) | $ | 633,061 | $ | (657,745) | |||||
| Nine Months Ended September 30, |
| |||||||
| 2023 |
| 2022 |
| Variance |
| |||
Cash earnings (net income plus non-cash adjustments) | $ | 413,354 |
| $ | 406,019 |
| $ | 7,335 |
|
Changes in certain operating assets and liabilities: |
|
|
|
|
|
| |||
Accounts receivable and other current assets |
| 346,310 |
|
| (24,125 | ) |
| 370,435 |
|
Accounts payable and accrued liabilities |
| (186,500 | ) |
| 5,963 |
|
| (192,463 | ) |
Regulatory assets and liabilities |
| 199,093 |
|
| 118,330 |
|
| 80,763 |
|
| 358,903 |
|
| 100,168 |
|
| 258,735 |
| |
Other operating activities |
| (16,205 | ) |
| (11,900 | ) |
| (4,305 | ) |
Net cash provided by operating activities | $ | 756,052 |
| $ | 494,287 |
| $ | 261,765 |
|
Nine Months Ended September 30, 20222023, Compared to the Nine Months Ended September 30, 2021
| Nine Months Ended September 30, |
| |||||||
| 2023 |
| 2022 |
| Variance |
| |||
Capital expenditures | $ | (421,770 | ) | $ | (466,302 | ) | $ | 44,532 |
|
Other investing activities |
| 17,985 |
|
| (19 | ) |
| 18,004 |
|
Net cash (used in) investing activities | $ | (403,785 | ) | $ | (466,321 | ) | $ | 62,536 |
|
37
Nine Months Ended September 30, 2023, Compared to the Nine Months Ended September 30, 2022
Net cash used in investing activities was $18$62.5 million lower than the same period in 2021.2022. The variance to the prior year was primarily attributable to:
| Nine Months Ended September 30, |
| |||||||
| 2023 |
| 2022 |
| Variance |
| |||
Dividends paid on common stock | $ | (125,446 | ) | $ | (115,850 | ) | $ | (9,596 | ) |
Common stock issued |
| 107,380 |
|
| 20,027 |
|
| 87,353 |
|
Short-term and long-term debt borrowings, net |
| 264,400 |
|
| 81,170 |
|
| 183,230 |
|
Distributions to non-controlling interests |
| (12,891 | ) |
| (11,678 | ) |
| (1,213 | ) |
Other financing activities |
| (12,193 | ) |
| 1,647 |
|
| (13,840 | ) |
Net cash provided by (used in) financing activities | $ | 221,250 |
| $ | (24,684 | ) | $ | 245,934 |
|
Nine Months Ended September 30, 2023, Compared to the Nine Months Ended September 30, 2022
Net cash provided by (used in) financing activities was $658$245.9 million higher than the same period in 2021.2022. The variance to the prior year was primarily attributable to:
| Current | Short-term borrowings at | Letters of Credit (a) at | Available Capacity at | ||||||||||||||
| Credit Facility | Expiration | Capacity | September 30, 2022 | September 30, 2022 | September 30, 2022 | ||||||||||||
| (in millions) | |||||||||||||||||
| Revolving Credit Facility and CP Program | July 19, 2026 | $ | 750 | $ | 501 | $ | 20 | $ | 229 | ||||||||
of the Notes to Condensed Consolidated Financial Statements.
The Revolving Credit Facility and Wyoming Electric’s financing agreements contain covenant requirements. We were in compliance with these covenants as of September 30, 2022.2023. See Note 5 of the Condensed Notes to Condensed Consolidated Financial Statements for more information.
of the Notes to Condensed Consolidated Financial Statements for information related to common stock issuances under the ATM.
We will continue to assess debt and equity needs to support our capital investment plans and other strategic objectives. We plan to fund our capital plan and strategic objectives by using cash generated from operating activities and various financing alternatives, which could include our Revolving Credit Facility, our CP Program, the issuance of common stock under our ATM program or in an opportunistic block trade, or through a non-controlling investment by a third party in certain operating assets. We plantrade. Proceeds from the September 15, 2023 debt offering, along with cash on hand, will be used to re-financerepay our $525 million, 4.25%, senior unsecured notes due November 30, 2023 on their maturity date. We also plan to re-finance our $600 million, 1.04%, senior unsecured notes due August 23, 2024, at or before maturity date.
CREDIT RATINGS
After assessing the current operating performance, liquidity and credit ratings of the Company, management believes that the Company will have access to the capital markets at prevailing market rates for companies with comparable credit ratings.
The following table represents the credit ratings and outlook and risk profile of BHC at September 30, 2022:
Rating Agency | Senior Unsecured Rating | Outlook | ||||||
S&P (a) | BBB+ | Stable | ||||||
| Baa2 | Stable | ||||||
Fitch (c) | BBB+ | Stable |
Rating Agency | Senior Secured Rating | ||||
S&P (a) | A | ||||
Fitch (b) | A |
Capital Expenditures
| Actual | Forecasted (c) | ||||||||||||||||||||||
| Capital Expenditures by Segment | Nine Months Ended September 30, 2022 (a) | 2022 (b) | 2023 | 2024 | 2025 | 2026 | |||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Electric Utilities | $ | 180 | $ | 255 | $ | 197 | $ | 348 | $ | 226 | $ | 194 | |||||||||||
| Gas Utilities | 255 | 364 | 386 | 452 | 412 | 393 | |||||||||||||||||
| Corporate and Other | 7 | 8 | 17 | 19 | 20 | 19 | |||||||||||||||||
Incremental Projects (d) | — | — | — | — | 45 | 100 | |||||||||||||||||
| $ | 442 | $ | 627 | $ | 600 | $ | 819 | $ | 703 | $ | 706 | ||||||||||||
| Actual |
| Forecasted |
| ||||||||||||||
Capital Expenditures by Segment | Nine Months Ended |
| 2023 (b) |
| 2024 |
| 2025 |
| 2026 |
| 2027 |
| ||||||
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Electric Utilities | $ | 156 |
| $ | 212 |
| $ | 348 |
| $ | 268 |
| $ | 184 |
| $ | 163 |
|
Gas Utilities |
| 261 |
|
| 386 |
|
| 452 |
|
| 412 |
|
| 393 |
|
| 444 |
|
Corporate and Other |
| 4 |
|
| 17 |
|
| 19 |
|
| 20 |
|
| 19 |
|
| 18 |
|
Incremental Projects (c) |
| - |
|
| - |
|
| - |
|
| - |
|
| 104 |
|
| 75 |
|
| $ | 421 |
| $ | 615 |
| $ | 819 |
| $ | 700 |
| $ | 700 |
| $ | 700 |
|
__________
Dividends
Dividends paid on our common stock totaled $116$125.4 million for the nine months ended September 30, 2022,2023, or $0.595$0.625 per share per quarter. On October 25, 2022,23, 2023, our board of directors declared a quarterly dividend of $0.625 per share payable December 1, 2022,2023, equivalent to an annual dividend of $2.50 per share. The amount of any future cash dividends to be declared and paid, if any, will depend upon, among other things, our financial condition, funds from operations, the level of our capital expenditures, restrictions under our Revolving Credit Facility and our future business prospects.
Funding Status of Employee Benefit Plans
Based on the Notesfair value of assets and estimated discount rate used to Condensed Consolidated Financial Statements forvalue benefit obligations as of September 30, 2023, we estimate the unfunded status of our employee benefit plans to be approximately $38 million compared to $35 million at December 31, 2022. We have implemented various de-risking strategies including lump sum buyouts, the purchase of annuities and the reduction of return-seeking assets over time to a more liability-hedged portfolio. As a result, recent updatescapital markets volatility had a limited impact to our purchasefunded status and does not require interim re-measurement of our pension plan assets or defined benefit obligations.
A summary of our critical accounting estimates from those reportedis included in our 20212022 Annual Report on Form 10-K. We are closely monitoring the impactsThere were no material changes made as of recent macroeconomic trends and Winter Storm Uri on our critical accounting estimates including, but not limited to, collectibility of customer receivables, cost recoverability through regulatory assets, impairment risk of goodwill and long-lived assets, valuation of pension assets and liabilities and contingent liabilities. For more information on our critical accounting estimates, see Part II, Item 7 of our 2021 Annual Report on Form 10-K.
Other than the pronouncements reported in our 20212022 Annual Report on Form 10-K and those discussed in Note 1 of the Condensed Notes to Condensed Consolidated Financial Statements, there have been no new accounting pronouncements that are expected to have a material effect on our financial position, results of operations or cash flows.
There have been no material changes to our quantitative and qualitative disclosures about market risk previously disclosed in Item 7A of our 2022 Annual Report on Form 10-K.
ITEM 4.CONTROLS AND PROCEDURES
Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, 2022.2023. Based on their evaluation, they have concluded that our disclosure controls and procedures were effective at September 30, 2022.
Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
During the quarter ended September 30, 2022,2023, there have been no changes in our internal controls over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
ITEM 1.LEGAL PROCEEDINGS
For information regarding legal proceedings, seeNote 3 of the Condensed Notes to Consolidated Financial Statements and Note 3 in Item 8 of our 20212022 Annual Report on Form 10-K and 10-K.Note 3
of the Notes to Condensed Consolidated Financial Statements.
ITEM 1A.RISK FACTORS
There are no material changes to the risk factors previously disclosed in Item 1A of Part I in our 20212022 Annual Report on Form 10-K.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table contains monthly information about our acquisitions of equity securities for the three months ended September 30, 2022:
Period | Total Number of Shares Purchased (a) |
| Average Price Paid per Share |
| Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
| Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs |
| ||||
July 1, 2023 - July 31, 2023 |
| 1 |
| $ | 60.27 |
|
| - |
|
| - |
|
August 1, 2023 - August 31, 2023 |
| 1,171 |
|
| 56.89 |
|
| - |
|
| - |
|
September 1, 2023 - September 30, 2023 |
| 2 |
|
| 54.74 |
|
| - |
|
| - |
|
Total |
| 1,174 |
| $ | 56.89 |
|
| - |
|
| - |
|
| Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||
| July 1, 2022 - July 31, 2022 | 2 | $ | 75.59 | — | — | |||||||||
| August 1, 2022 - August 31, 2022 | 341 | $ | 74.67 | — | — | |||||||||
| September 1, 2022 - September 30, 2022 | 3 | $ | 76.42 | — | — | |||||||||
| Total | 346 | $ | 74.69 | — | — | |||||||||
ITEM 4. MINE SAFETY DISCLOSURES
Information concerning mine safety violations or other regulatory matters required by Sections 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is included in Exhibit 95.
None of our directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the three months ended September 30, 2023.
ITEM 6. EXHIBITS
Exhibits filed herewithin are designated by an asterisk (*). All exhibits not so designated are incorporated by reference to a prior filing, as indicated.
Exhibit Number | Description | ||||
4.1 | |||||
31.1* | |||||
31.2* | |||||
32.1* | |||||
32.2* | |||||
95* | |||||
101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||||
101.SCH* | XBRL Taxonomy Extension Schema Document | ||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | ||||
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | ||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | ||||
104* | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | ||||
41
SIGNATURES
BLACK HILLS CORPORATION
/s/ Linden R. Evans | ||||||||
Linden R. Evans, President and | ||||||||
Chief Executive Officer | ||||||||
/s/ | ||||||||
| ||||||||
Chief Financial Officer | ||||||||
Dated: | November |
42