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As Of Filer Filing For·On·As Docs:Size 11/05/19 Black Hills Corp/SD 10-Q 9/30/19 104:14M |
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Document |
i ☒ | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES | |
EXCHANGE ACT OF 1934 | ||
For the quarterly period ended | ||
OR | ||
i ☐ | 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 |
i Black
Hills Corporation | ||||||
Incorporated in | i South Dakota | IRS Identification Number | i 46-0458824 | |||
i 7001
Mount Rushmore Road | i Rapid City | i South Dakota | i 57702 | |||
Registrant’s
telephone number | i (605) | i 721-1700 | ||||
Former name, former address, and former fiscal year if changed since last report | ||||||
NONE |
i Yes | x | No
o |
i Yes | x | No
o |
i Large
Accelerated Filer | x | Accelerated Filer | ☐ | |||
Non-accelerated
Filer | ☐ | Smaller Reporting Company | i ☐ | |||
Emerging
Growth Company | i ☐ |
Yes | i ☐ | No
x |
Securities registered pursuant to Section 12(b) of the Act: | ||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
i Common
stock of $1.00 par value | i BKH | i New York Stock Exchange |
Class | Outstanding
at October 31, 2019 | ||
Common stock, $1.00 par value | i 61,454,071 | shares |
Page | |||
Item 1. | |||
Item 2. | |||
Item
3. | |||
Item 4. | |||
Item 1. | |||
Item 4. | |||
Item 6. | |||
AFUDC | Allowance
for Funds Used During Construction |
AOCI | Accumulated Other Comprehensive Income (Loss) |
Arkansas Gas | Black Hills Energy Arkansas, Inc., a direct, wholly-owned subsidiary of Black Hills Gas Inc. |
ASC | Accounting Standards Codification |
ASU | Accounting Standards Update issued by the FASB |
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 Electric Generation | Black Hills Electric Generation, LLC, a direct, wholly-owned subsidiary of Black Hills Non-regulated Holdings |
Black Hills Energy | The name used to conduct
the business of our utility companies |
Black Hills Power | Black Hills Power, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation (doing business as Black Hills Energy) |
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 |
Busch Ranch I | Busch
Ranch Wind Farm is a 29 MW wind farm near Pueblo, Colorado, jointly owned by Colorado Electric and Black Hills Electric Generation. Colorado Electric and Black Hills Electric Generation each have a 50% ownership interest in the wind farm. |
Busch Ranch II | Busch Ranch II wind project will be a 60 MW wind farm near Pueblo, Colorado, built by Black Hills Electric Generation to provide wind energy to Colorado Electric through a 25-year power purchase agreement. |
CAPP | Customer Appliance Protection Plan |
Cheyenne
Light | Cheyenne Light, Fuel and Power Company, a direct, wholly-owned subsidiary of Black Hills Corporation (doing business as Black Hills Energy and providing electric service) |
Choice Gas Program | The unbundling of the natural gas service from the distribution component, which opens up the gas supply for competition allowing customers to choose from different natural gas suppliers. Black Hills Gas Distribution and Wyoming Gas distribute the gas and Black Hills Energy Services, Wyoming Gas and Black Hills Gas Distribution are Choice Gas suppliers. |
CIAC | Contribution In Aid of Construction |
City
of Gillette | Gillette, Wyoming |
City of Cheyenne | Cheyenne, Wyoming |
Chief Operating Decision Maker (CODM) | Chief Executive Officer |
Colorado Electric | Black Hills Colorado Electric, LLC, an indirect, wholly-owned subsidiary of Black Hills Utility Holdings (doing business as Black Hills Energy) |
Colorado Gas | Black Hills Colorado Gas, Inc.,
an indirect, wholly-owned subsidiary of Black Hills Utility Holdings (doing business as Black Hills Energy) |
Colorado IPP | Black Hills Colorado IPP, LLC a 50.1% owned subsidiary of Black Hills Electric Generation |
Consolidated Indebtedness to Capitalization Ratio | Any indebtedness outstanding at such time, divided by capital at such time. Capital being consolidated net-worth (excluding noncontrolling interest) plus consolidated indebtedness (including letters of credit and certain guarantees issued) as defined within the current Revolving Credit Facility. |
Cooling Degree Day (CDD) | 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 of weather 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. |
CPCN | Certificate of Public Convenience and Necessity |
CP Program | Commercial Paper Program |
CPUC | Colorado Public Utilities
Commission |
CT | Combustion turbine |
CVA | Credit Valuation Adjustment |
Dodd-Frank | Dodd-Frank Wall Street Reform and Consumer Protection Act |
Dth | Dekatherm. A
unit of energy equal to 10 therms or one million British thermal units (MMBtu) |
Equity Unit | Each Equity Unit had a stated amount of $50, consisting of a purchase contract issued by BHC to purchase shares of BHC common stock and a 1/20, or 5% undivided beneficial ownership interest in $1,000 principal amount of BHC RSNs that were formerly due 2028. On November 1, 2018, we completed settlement of the stock purchase contracts that are components of the Equity Units issued in November 2015. |
FASB | Financial
Accounting Standards Board |
FERC | United States Federal Energy Regulatory Commission |
Fitch | Fitch Ratings |
GAAP | Accounting principles generally accepted in the United States of America |
Heating Degree Day (HDD) | 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 of weather 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. |
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 (doing business as Black Hills Energy) |
MMBtu | Million
British thermal units |
Moody’s | Moody’s Investors Service, Inc. |
MW | Megawatts |
MWh | Megawatt-hours |
Nebraska Gas | Black Hills Nebraska Gas Utility Company, LLC, a direct, wholly-owned subsidiary of Black Hills Utility Holdings (doing business as Black Hills Energy) |
NPSC | Nebraska Public Service Commission |
PPA | Power
Purchase Agreement |
Pueblo Airport Generation Station | Two 100 MW combined cycle gas-fired power generation plants owned by Colorado IPP and located at a site shared with Colorado Electric. The plants commenced operation on January 1, 2012. |
Revolving Credit Facility | Our $750 million credit facility used to fund working capital needs, letters of credit and other corporate purposes, which was amended and restated on July 30, 2018 and now terminates on July 30, 2023. |
RSNs | Remarketable
junior subordinated notes, issued on November 23, 2015 and retired on August 17, 2018. |
SDPUC | South Dakota Public Utilities Commission |
SEC | U. S. Securities and Exchange Commission |
S&P | Standard and Poor’s, a division of The McGraw-Hill Companies, Inc. |
South Dakota Electric | Black Hills Power, which includes operations in South Dakota, Wyoming
and Montana |
SSIR | System Safety and Integrity Rider |
TCJA | Tax Cuts and Jobs Act enacted on December 22, 2017 |
Tech Services | Non-regulated product lines within Black Hills Corporation 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-owner gas infrastructure facilities, typically through one-time contracts. |
Wind
Capacity Factor | Measures the amount of electricity a wind turbine produces in a given time period relative to its maximum potential |
WPSC | Wyoming Public Service Commission |
WRDC | Wyodak Resources Development Corporation, a direct, wholly-owned subsidiary of Black Hills Non-regulated Holdings |
Wyodak Plant | Wyodak, a 362 MW mine-mouth coal-fired plant in Gillette, Wyoming, owned 80% by PacifiCorp and 20% by Black Hills Energy South Dakota. Our WRDC mine supplies all of the fuel for the plant. |
Wyoming
Electric | Includes Cheyenne Light’s electric utility operations |
Wyoming Gas | Black Hills Wyoming Gas, LLC, an indirect and wholly-owned subsidiary of Black Hills Utility Holdings (doing business as Black Hills Energy) |
(unaudited) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
(in
thousands, except per share amounts) | ||||||||||||
Revenue | $ | i 325,548 | $ | i 321,979 | $ | i 1,257,246 | $ | i 1,253,072 | ||||
Operating
expenses: | ||||||||||||
Fuel, purchased power and cost of natural gas sold | i 73,090 | i 80,244 | i 411,695 | i 432,544 | ||||||||
Operations
and maintenance | i 117,037 | i 115,699 | i 366,907 | i 352,092 | ||||||||
Depreciation,
depletion and amortization | i 51,884 | i 49,046 | i 154,507 | i 146,345 | ||||||||
Taxes
- property and production | i 12,986 | i 11,905 | i 39,454 | i 39,181 | ||||||||
Total
operating expenses | i 254,997 | i 256,894 | i 972,563 | i 970,162 | ||||||||
Operating
income | i 70,551 | i 65,085 | i 284,683 | i 282,910 | ||||||||
Other
income (expense): | ||||||||||||
Interest charges - | ||||||||||||
Interest expense incurred net of amounts capitalized (including amortization of debt issuance costs, premiums and discounts) | ( i 36,200 | ) | ( i 36,380 | ) | ( i 108,232 | ) | ( i 107,183 | ) | ||||
Allowance
for funds used during construction - borrowed | i 2,200 | i 701 | i 4,555 | i 1,345 | ||||||||
Interest
income | i 513 | i 382 | i 1,208 | i 1,012 | ||||||||
Allowance
for funds used during construction - equity | i 311 | i 193 | i 486 | i 503 | ||||||||
Impairment
of investment | ( i 19,741 | ) | i — | ( i 19,741 | ) | i — | ||||||
Other
income (expense), net | i 269 | ( i 703 | ) | ( i 431 | ) | ( i 2,426 | ) | |||||
Total
other income (expense) | ( i 52,648 | ) | ( i 35,807 | ) | ( i 122,155 | ) | ( i 106,749 | ) | ||||
Income
before income taxes | i 17,903 | i 29,278 | i 162,528 | i 176,161 | ||||||||
Income
tax benefit (expense) | ( i 2,508 | ) | ( i 7,477 | ) | ( i 22,078 | ) | i 11,784 | |||||
Income
from continuing operations | i 15,395 | i 21,801 | i 140,450 | i 187,945 | ||||||||
Net
(loss) from discontinued operations | i — | ( i 857 | ) | i — | ( i 5,627 | ) | ||||||
Net
income | i 15,395 | i 20,944 | i 140,450 | i 182,318 | ||||||||
Net
income attributable to noncontrolling interest | ( i 3,655 | ) | ( i 3,994 | ) | ( i 10,319 | ) | ( i 10,447 | ) | ||||
Net
income available for common stock | $ | i 11,740 | $ | i 16,950 | $ | i 130,131 | $ | i 171,871 | ||||
Amounts
attributable to common shareholders: | ||||||||||||
Net income from continuing operations | $ | i 11,740 | $ | i 17,807 | $ | i 130,131 | $ | i 177,498 | ||||
Net
(loss) from discontinued operations | i — | ( i 857 | ) | i — | ( i 5,627 | ) | ||||||
Net
income available for common stock | $ | i 11,740 | $ | i 16,950 | $ | i 130,131 | $ | i 171,871 | ||||
Earnings
(loss) per share of common stock, Basic - | ||||||||||||
Earnings from continuing operations | $ | i 0.19 | $ | i 0.33 | $ | i 2.15 | $ | i 3.33 | ||||
(Loss)
from discontinued operations | i — | ( i 0.02 | ) | i — | ( i 0.10 | ) | ||||||
Total
earnings per share of common stock, Basic | $ | i 0.19 | $ | i 0.32 | $ | i 2.15 | $ | i 3.22 | ||||
Earnings
(loss) per share of common stock, Diluted - | ||||||||||||
Earnings from continuing operations | $ | i 0.19 | $ | i 0.32 | $ | i 2.15 | $ | i 3.26 | ||||
(Loss)
from discontinued operations | i — | ( i 0.02 | ) | i — | ( i 0.10 | ) | ||||||
Total
earnings per share of common stock, Diluted | $ | i 0.19 | $ | i 0.31 | $ | i 2.15 | $ | i 3.15 | ||||
Weighted
average common shares outstanding: | ||||||||||||
Basic | i 60,976 | i 53,364 | i 60,458 | i 53,346 | ||||||||
Diluted | i 61,104 | i 54,819 | i 60,578 | i 54,508 |
(unaudited) | Three
Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
(in thousands) | ||||||||||||
Net
income | $ | i 15,395 | $ | i 20,944 | $ | i 140,450 | $ | i 182,318 | ||||
Other
comprehensive income (loss), net of tax: | ||||||||||||
Reclassification adjustments of benefit plan liability - prior service cost (net of tax of $3, $10, $13 and $29, respectively) | ( i 16 | ) | ( i 34 | ) | ( i 45 | ) | ( i 104 | ) | ||||
Reclassification
adjustments of benefit plan liability - net gain (loss) (net of tax of $(92), $(138), $(197), and $(409), respectively) | ( i 9 | ) | i 483 | i 327 | i 1,456 | |||||||
Derivative
instruments designated as cash flow hedges: | ||||||||||||
Reclassification of net realized (gains) losses on settled/amortized interest rate swaps (net of tax of $(165), $(152), $(500), and $(456), respectively) | i 548 | i 560 | i 1,639 | i 1,682 | ||||||||
Net
unrealized gains (losses) on commodity derivatives (net of tax of $35, $0, $100 and $51, respectively) | ( i 115 | ) | i 30 | ( i 334 | ) | ( i 168 | ) | |||||
Reclassification
of net realized (gains) losses on settled commodity derivatives (net of tax of $(5), $3, $142 and $(187), respectively) | i 124 | i 21 | ( i 366 | ) | i 615 | |||||||
Other
comprehensive income, net of tax | i 532 | i 1,060 | i 1,221 | i 3,481 | ||||||||
Comprehensive
income | i 15,927 | i 22,004 | i 141,671 | i 185,799 | ||||||||
Less:
comprehensive income attributable to noncontrolling interest | ( i 3,655 | ) | ( i 3,994 | ) | ( i 10,319 | ) | ( i 10,447 | ) | ||||
Comprehensive
income available for common stock | $ | i 12,272 | $ | i 18,010 | $ | i 131,352 | $ | i 175,352 |
(unaudited) | As
of | ||||||
(in thousands) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash
and cash equivalents | $ | i 13,087 | $ | i 20,776 | |||
Restricted
cash | i 3,688 | i 3,369 | |||||
Accounts
receivable, net | i 148,989 | i 269,153 | |||||
Materials,
supplies and fuel | i 123,002 | i 117,299 | |||||
Derivative
assets, current | i 412 | i 1,500 | |||||
Income
tax receivable, net | i 12,931 | i 12,978 | |||||
Regulatory
assets, current | i 46,206 | i 48,776 | |||||
Other
current assets | i 29,106 | i 29,982 | |||||
Total
current assets | i 377,421 | i 503,833 | |||||
Investments | i 21,583 | i 41,013 | |||||
Property,
plant and equipment | i 6,567,229 | i 6,000,015 | |||||
Less:
accumulated depreciation and depletion | ( i 1,243,794 | ) | ( i 1,145,136 | ) | |||
Total
property, plant and equipment, net | i 5,323,435 | i 4,854,879 | |||||
Other
assets: | |||||||
Goodwill | i 1,299,454 | i 1,299,454 | |||||
Intangible
assets, net | i 13,566 | i 14,337 | |||||
Regulatory
assets, non-current | i 214,152 | i 235,459 | |||||
Other
assets, non-current | i 25,339 | i 14,352 | |||||
Total
other assets, non-current | i 1,552,511 | i 1,563,602 | |||||
TOTAL
ASSETS | $ | i 7,274,950 | $ | i 6,963,327 |
(unaudited) | As
of | ||||||
(in thousands, except share amounts) | |||||||
LIABILITIES AND TOTAL EQUITY | |||||||
Current
liabilities: | |||||||
Accounts payable | $ | i 145,085 | $ | i 210,609 | |||
Accrued
liabilities | i 217,832 | i 215,501 | |||||
Derivative
liabilities, current | i 2,396 | i 947 | |||||
Regulatory
liabilities, current | i 25,168 | i 29,810 | |||||
Notes
payable | i 294,900 | i 185,620 | |||||
Current
maturities of long-term debt | i 5,743 | i 5,743 | |||||
Total
current liabilities | i 691,124 | i 648,230 | |||||
Long-term
debt | i 3,049,235 | i 2,950,835 | |||||
Deferred
credits and other liabilities: | |||||||
Deferred income tax liabilities, net | i 347,952 | i 311,331 | |||||
Regulatory
liabilities, non-current | i 498,773 | i 510,984 | |||||
Benefit
plan liabilities | i 134,150 | i 145,147 | |||||
Other
deferred credits and other liabilities | i 120,820 | i 109,377 | |||||
Total
deferred credits and other liabilities | i 1,101,695 | i 1,076,839 | |||||
Commitments
and contingencies (See Notes 8, 10, 15, 16) | i | i | |||||
Equity: | |||||||
Stockholders’
equity — | |||||||
Common stock $1 par value; 100,000,000 shares authorized; issued 61,480,640 and 60,048,567 shares, respectively | i 61,481 | i 60,049 | |||||
Additional
paid-in capital | i 1,553,190 | i 1,450,569 | |||||
Retained
earnings | i 742,138 | i 700,396 | |||||
Treasury
stock, at cost – 26,572 and 44,253 shares, respectively | ( i 1,636 | ) | ( i 2,510 | ) | |||
Accumulated
other comprehensive income (loss) | ( i 25,695 | ) | ( i 26,916 | ) | |||
Total
stockholders’ equity | i 2,329,478 | i 2,181,588 | |||||
Noncontrolling
interest | i 103,418 | i 105,835 | |||||
Total
equity | i 2,432,896 | i 2,287,423 | |||||
TOTAL
LIABILITIES AND TOTAL EQUITY | $ | i 7,274,950 | $ | i 6,963,327 |
(unaudited) | Nine
Months Ended September 30, | |||||
2019 | 2018 | |||||
Operating activities: | (in thousands) | |||||
Net income | $ | i 140,450 | $ | i 182,318 | ||
Loss
from discontinued operations, net of tax | i — | i 5,627 | ||||
Income
from continuing operations | i 140,450 | i 187,945 | ||||
Adjustments
to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation, depletion and amortization | i 154,507 | i 146,345 | ||||
Deferred
financing cost amortization | i 6,326 | i 5,682 | ||||
Impairment
of investment | i 19,741 | i — | ||||
Stock
compensation | i 8,332 | i 7,544 | ||||
Deferred
income taxes | i 24,381 | ( i 14,396 | ) | |||
Employee
benefit plans | i 7,965 | i 10,641 | ||||
Other
adjustments, net | i 9,192 | i 7,668 | ||||
Changes
in certain operating assets and liabilities: | ||||||
Materials, supplies and fuel | ( i 4,126 | ) | ( i 8,380 | ) | ||
Accounts
receivable, unbilled revenues and other operating assets | i 115,325 | i 72,061 | ||||
Accounts
payable and other operating liabilities | ( i 83,436 | ) | ( i 86,604 | ) | ||
Regulatory
assets - current | i 12,455 | i 41,655 | ||||
Regulatory
liabilities - current | ( i 15,644 | ) | i 21,416 | |||
Contributions
to defined benefit pension plans | ( i 12,700 | ) | ( i 12,700 | ) | ||
Other
operating activities, net | i 3,307 | i 2,007 | ||||
Net
cash provided by operating activities of continuing operations | i 386,075 | i 380,884 | ||||
Net
cash provided by (used in) operating activities of discontinued operations | i — | ( i 2,162 | ) | |||
Net
cash provided by operating activities | i 386,075 | i 378,722 | ||||
Investing
activities: | ||||||
Property, plant and equipment additions | ( i 592,537 | ) | ( i 278,132 | ) | ||
Purchase
of investment | i — | ( i 24,429 | ) | |||
Other
investing activities | ( i 735 | ) | i 2,766 | |||
Net
cash provided by (used in) investing activities of continuing operations | ( i 593,272 | ) | ( i 299,795 | ) | ||
Net
cash provided by investing activities of discontinued operations | i — | i 18,024 | ||||
Net
cash provided by (used in) investing activities | ( i 593,272 | ) | ( i 281,771 | ) | ||
Financing
activities: | ||||||
Dividends paid on common stock | ( i 91,779 | ) | ( i 76,309 | ) | ||
Common
stock issued | i 101,361 | i 1,079 | ||||
Net
(payments) borrowings of short-term debt | i 109,280 | ( i 99,200 | ) | |||
Long-term
debt - issuances | i 400,000 | i 700,000 | ||||
Long-term
debt - repayments | ( i 304,307 | ) | ( i 603,307 | ) | ||
Distributions
to noncontrolling interest | ( i 12,736 | ) | ( i 13,755 | ) | ||
Other
financing activities | ( i 1,992 | ) | ( i 10,457 | ) | ||
Net
cash provided by (used in) financing activities | i 199,827 | ( i 101,949 | ) | |||
Net
change in cash, cash equivalents and restricted cash | ( i 7,370 | ) | ( i 4,998 | ) | ||
Cash,
cash equivalents and restricted cash at beginning of period | i 24,145 | i 18,240 | ||||
Cash,
cash equivalents and restricted cash at end of period | $ | i 16,775 | $ | i 13,242 |
(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 | ||||||||||||||||
i 60,048,567 | $ | i 60,049 | i 44,253 | $ | ( i 2,510 | ) | $ | i 1,450,569 | $ | i 700,396 | $ | ( i 26,916 | ) | $ | i 105,835 | $ | i 2,287,423 | ||||||||
Net
income available for common stock | — | — | — | — | — | i 103,808 | — | i 3,554 | i 107,362 | ||||||||||||||||
Other
comprehensive income (loss), net of tax | — | — | — | — | — | — | i 457 | — | i 457 | ||||||||||||||||
Dividends
on common stock ($0.505 per share) | — | — | — | — | — | ( i 30,332 | ) | — | — | ( i 30,332 | ) | ||||||||||||||
Share-based
compensation | i 48,956 | i 49 | ( i 20,497 | ) | i 1,078 | ( i 589 | ) | — | — | — | i 538 | ||||||||||||||
Issuance
of common stock | i 280,497 | i 280 | — | — | i 19,719 | — | — | — | i 19,999 | ||||||||||||||||
Issuance
costs | — | — | — | — | ( i 289 | ) | — | — | — | ( i 289 | ) | ||||||||||||||
Implementation
of ASU 2016-02 Leases | — | — | — | — | — | i 3,390 | — | — | i 3,390 | ||||||||||||||||
Distributions
to noncontrolling interest | — | — | — | — | — | — | — | ( i 4,846 | ) | ( i 4,846 | ) | ||||||||||||||
i 60,378,020 | $ | i 60,378 | i 23,756 | $ | ( i 1,432 | ) | $ | i 1,469,410 | $ | i 777,262 | $ | ( i 26,459 | ) | $ | i 104,543 | $ | i 2,383,702 | ||||||||
Net
income available for common stock | — | — | — | — | — | i 14,583 | — | i 3,110 | i 17,693 | ||||||||||||||||
Other
comprehensive income (loss), net of tax | — | — | — | — | — | — | i 232 | — | i 232 | ||||||||||||||||
Dividends
on common stock ($0.505 per share) | — | — | — | — | — | ( i 30,620 | ) | — | — | ( i 30,620 | ) | ||||||||||||||
Share-based
compensation | i 54,767 | i 54 | i 1,603 | ( i 112 | ) | i 3,948 | — | — | — | i 3,890 | |||||||||||||||
Issuance
of common stock | i 658,598 | i 659 | — | — | i 49,342 | — | — | — | i 50,001 | ||||||||||||||||
Issuance
costs | — | — | — | — | ( i 492 | ) | — | — | — | ( i 492 | ) | ||||||||||||||
Implementation
of ASU 2016-02 Leases | — | — | — | — | — | ( i 3 | ) | — | — | ( i 3 | ) | ||||||||||||||
Distributions
to noncontrolling interest | — | — | — | — | — | — | — | ( i 4,405 | ) | ( i 4,405 | ) | ||||||||||||||
i 61,091,385 | $ | i 61,091 | i 25,359 | $ | ( i 1,544 | ) | $ | i 1,522,208 | $ | i 761,222 | $ | ( i 26,227 | ) | $ | i 103,248 | $ | i 2,419,998 | ||||||||
Net
income (loss) available for common stock | — | — | — | — | — | i 11,740 | — | i 3,655 | i 15,395 | ||||||||||||||||
Other
comprehensive income (loss), net of tax | — | — | — | — | — | — | i 532 | — | i 532 | ||||||||||||||||
Dividends
on common stock ($0.505 per share) | — | — | — | — | — | ( i 30,827 | ) | — | — | ( i 30,827 | ) | ||||||||||||||
Share-based
compensation | i 18 | i — | i 1,213 | ( i 92 | ) | i 1,769 | — | — | — | i 1,677 | |||||||||||||||
Issuance
of common stock | i 389,237 | i 390 | — | — | i 29,611 | — | — | — | i 30,001 | ||||||||||||||||
Issuance
costs | — | — | — | — | ( i 398 | ) | — | — | — | ( i 398 | ) | ||||||||||||||
Implementation
of ASU 2016-02 Leases | — | — | — | — | — | i 3 | — | — | i 3 | ||||||||||||||||
Distributions
to noncontrolling interest | — | — | — | — | — | — | — | ( i 3,485 | ) | ( i 3,485 | ) | ||||||||||||||
i 61,480,640 | $ | i 61,481 | i 26,572 | $ | ( i 1,636 | ) | $ | i 1,553,190 | $ | i 742,138 | $ | ( i 25,695 | ) | $ | i 103,418 | $ | i 2,432,896 | ||||||||
Common
Stock | Treasury Stock | ||||||||||||||||||||||||
(in thousands except share amounts) | Shares | Value | Shares | Value | Additional
Paid in Capital | Retained Earnings | AOCI | Non controlling Interest | Total | ||||||||||||||||
i 53,579,986 | $ | i 53,580 | i 39,064 | $ | ( i 2,306 | ) | $ | i 1,150,285 | $ | i 548,617 | $ | ( i 41,202 | ) | $ | i 111,232 | $ | i 1,820,206 | ||||||||
Net
income available for common stock | — | — | — | — | — | i 133,004 | — | i 3,630 | i 136,634 | ||||||||||||||||
Other
comprehensive income (loss), net of tax | — | — | — | — | — | — | i 1,260 | — | i 1,260 | ||||||||||||||||
Dividends
on common stock ($0.475 per share) | — | — | — | — | — | ( i 25,444 | ) | — | — | ( i 25,444 | ) | ||||||||||||||
Share-based
compensation | i 64,770 | i 65 | i 14,895 | ( i 743 | ) | i 1,433 | — | — | — | i 755 | |||||||||||||||
Dividend
reinvestment and stock purchase plan | i 4,061 | i 4 | — | — | i 215 | — | — | — | i 219 | ||||||||||||||||
Other
stock transactions | — | — | — | — | — | ( i 16 | ) | i 18 | — | i 2 | |||||||||||||||
Distributions
to noncontrolling interest | — | — | — | — | — | — | — | ( i 5,648 | ) | ( i 5,648 | ) | ||||||||||||||
i 53,648,817 | $ | i 53,649 | i 53,959 | $ | ( i 3,049 | ) | $ | i 1,151,933 | $ | i 656,161 | $ | ( i 39,924 | ) | $ | i 109,214 | $ | i 1,927,984 | ||||||||
Net
income available for common stock | — | — | — | — | — | i 21,917 | — | i 2,823 | i 24,740 | ||||||||||||||||
Other
comprehensive income (loss), net of tax | — | — | — | — | — | — | i 1,161 | — | i 1,161 | ||||||||||||||||
Dividends
on common stock ($0.475 per share) | — | — | — | — | — | ( i 25,435 | ) | — | — | ( i 25,435 | ) | ||||||||||||||
Share-based
compensation | i 13,033 | i 13 | i 11,022 | ( i 593 | ) | i 3,019 | — | — | — | i 2,439 | |||||||||||||||
Other
stock transactions | — | — | — | — | ( i 5 | ) | ( i 1 | ) | — | — | ( i 6 | ) | |||||||||||||
Distributions
to noncontrolling interest | — | — | — | — | — | — | — | ( i 4,350 | ) | ( i 4,350 | ) | ||||||||||||||
i 53,661,850 | $ | i 53,662 | i 64,981 | $ | ( i 3,642 | ) | $ | i 1,154,947 | $ | i 652,642 | $ | ( i 38,763 | ) | $ | i 107,687 | $ | i 1,926,533 | ||||||||
Net
income (loss) available for common stock | — | — | — | — | — | i 16,950 | — | i 3,994 | i 20,944 | ||||||||||||||||
Other
comprehensive income (loss), net of tax | — | — | — | — | — | — | i 1,060 | — | i 1,060 | ||||||||||||||||
Dividends
on common stock ($0.475 per share) | — | — | — | — | — | ( i 25,430 | ) | — | — | ( i 25,430 | ) | ||||||||||||||
Share-based
compensation | i 13 | i — | i 7,934 | ( i 430 | ) | i 2,107 | — | — | — | i 1,677 | |||||||||||||||
Dividend
reinvestment and stock purchase plan | — | — | — | — | i 1 | — | — | — | i 1 | ||||||||||||||||
Other
stock transactions | — | — | — | — | i 159 | ( i 8 | ) | — | — | i 151 | |||||||||||||||
Distributions
to noncontrolling interest | — | — | — | — | — | — | — | ( i 3,757 | ) | ( i 3,757 | ) | ||||||||||||||
i 53,661,863 | $ | i 53,662 | i 72,915 | $ | ( i 4,072 | ) | $ | i 1,157,214 | $ | i 644,154 | $ | ( i 37,703 | ) | $ | i 107,924 | $ | i 1,921,179 | ||||||||
Three Months Ended September 30, 2019 | Electric Utilities
| Gas Utilities | Power Generation | Mining | Inter-company Revenues | Total | ||||||||||||
Customer types: | (in thousands) | |||||||||||||||||
Retail | $ | i 162,214 | $ | i 89,810 | $ | i — | $ | i 14,992 | $ | ( i 8,146 | ) | $ | i 258,870 | |||||
Transportation | i — | i 29,019 | i — | i — | ( i 195 | ) | i 28,824 | |||||||||||
Wholesale | i 8,210 | i — | i 16,119 | i — | ( i 14,414 | ) | i 9,915 | |||||||||||
Market
- off-system sales | i 6,452 | i 139 | i — | i — | ( i 1,488 | ) | i 5,103 | |||||||||||
Transmission/Other | i 14,274 | i 10,965 | i — | i — | ( i 4,206 | ) | i 21,033 | |||||||||||
Revenue
from contracts with customers | $ | i 191,150 | $ | i 129,933 | $ | i 16,119 | $ | i 14,992 | $ | ( i 28,449 | ) | $ | i 323,745 | |||||
Other
revenues | i 234 | i 811 | i 9,692 | i 560 | ( i 9,494 | ) | i 1,803 | |||||||||||
Total
revenues | $ | i 191,384 | $ | i 130,744 | $ | i 25,811 | $ | i 15,552 | $ | ( i 37,943 | ) | $ | i 325,548 | |||||
Timing
of revenue recognition: | ||||||||||||||||||
Services transferred at a point in time | $ | i — | $ | i — | $ | i — | $ | i 14,992 | $ | ( i 8,146 | ) | $ | i 6,846 | |||||
Services
transferred over time | i 191,150 | i 129,933 | i 16,119 | i — | ( i 20,303 | ) | i 316,899 | |||||||||||
Revenue
from contracts with customers | $ | i 191,150 | $ | i 129,933 | $ | i 16,119 | $ | i 14,992 | $ | ( i 28,449 | ) | $ | i 323,745 | |||||
Three
Months Ended September 30, 2018 | Electric Utilities | Gas Utilities | Power Generation (a) | Mining | Inter-company Revenues (a) | Total | ||||||||||||
Customer Types: | ||||||||||||||||||
Retail | $ | i 157,049 | $ | i 88,559 | $ | i — | $ | i 16,751 | $ | ( i 7,941 | ) | $ | i 254,418 | |||||
Transportation | i — | i 30,079 | i — | i — | ( i 267 | ) | i 29,812 | |||||||||||
Wholesale | i 8,255 | i — | i 15,373 | i — | ( i 13,935 | ) | i 9,693 | |||||||||||
Market
- off-system sales | i 9,059 | i 140 | i — | i — | ( i 1,349 | ) | i 7,850 | |||||||||||
Transmission/Other | i 10,196 | i 11,887 | i — | i — | ( i 3,693 | ) | i 18,390 | |||||||||||
Revenue
from contracts with customers | $ | i 184,559 | $ | i 130,665 | $ | i 15,373 | $ | i 16,751 | $ | ( i 27,185 | ) | $ | i 320,163 | |||||
Other
revenues | i 231 | i 1,011 | i 9,118 | i 550 | ( i 9,094 | ) | i 1,816 | |||||||||||
Total
Revenues | $ | i 184,790 | $ | i 131,676 | $ | i 24,491 | $ | i 17,301 | $ | ( i 36,279 | ) | $ | i 321,979 | |||||
Timing
of Revenue Recognition: | ||||||||||||||||||
Services transferred at a point in time | $ | i — | $ | i — | $ | i — | $ | i 16,751 | $ | ( i 7,942 | ) | $ | i 8,809 | |||||
Services
transferred over time | i 184,559 | i 130,665 | i 15,373 | i — | ( i 19,243 | ) | i 311,354 | |||||||||||
Revenue
from contracts with customers | $ | i 184,559 | $ | i 130,665 | $ | i 15,373 | $ | i 16,751 | $ | ( i 27,185 | ) | $ | i 320,163 | |||||
Nine Months Ended September 30, 2019 | Electric
Utilities | Gas Utilities | Power Generation | Mining | Inter-company Revenues | Total | ||||||||||||
Customer types: | (in thousands) | |||||||||||||||||
Retail | $ | i 455,409 | $ | i 567,715 | $ | i — | $ | i 43,249 | $ | ( i 23,315 | ) | $ | i 1,043,058 | |||||
Transportation | i — | i 102,159 | i — | i — | ( i 903 | ) | i 101,256 | |||||||||||
Wholesale | i 23,334 | i — | i 46,650 | i — | ( i 40,923 | ) | i 29,061 | |||||||||||
Market
- off-system sales | i 16,592 | i 517 | i — | i — | ( i 5,047 | ) | i 12,062 | |||||||||||
Transmission/Other | i 42,865 | i 35,767 | i — | i — | ( i 12,608 | ) | i 66,024 | |||||||||||
Revenue
from contracts with customers | $ | i 538,200 | $ | i 706,158 | $ | i 46,650 | $ | i 43,249 | $ | ( i 82,796 | ) | $ | i 1,251,461 | |||||
Other
revenues | i 2,465 | i 1,135 | i 29,114 | i 1,777 | ( i 28,706 | ) | i 5,785 | |||||||||||
Total
revenues | $ | i 540,665 | $ | i 707,293 | $ | i 75,764 | $ | i 45,026 | $ | ( i 111,502 | ) | $ | i 1,257,246 | |||||
Timing
of revenue recognition: | ||||||||||||||||||
Services transferred at a point in time | $ | i — | $ | i — | $ | i — | $ | i 43,249 | $ | ( i 23,315 | ) | $ | i 19,934 | |||||
Services
transferred over time | i 538,200 | i 706,158 | i 46,650 | i — | ( i 59,481 | ) | i 1,231,527 | |||||||||||
Revenue
from contracts with customers | $ | i 538,200 | $ | i 706,158 | $ | i 46,650 | $ | i 43,249 | $ | ( i 82,796 | ) | $ | i 1,251,461 | |||||
Nine
Months Ended September 30, 2018 | Electric Utilities | Gas Utilities | Power Generation (a) | Mining | Inter-company Revenues (a) | Total | ||||||||||||
Customer Types: | ||||||||||||||||||
Retail | $ | i 449,482 | $ | i 565,816 | $ | i — | $ | i 49,653 | $ | ( i 23,761 | ) | $ | i 1,041,190 | |||||
Transportation | i — | i 100,760 | i — | i — | ( i 977 | ) | i 99,783 | |||||||||||
Wholesale | i 25,497 | i — | i 43,744 | i — | ( i 39,457 | ) | i 29,784 | |||||||||||
Market
- off-system sales | i 18,142 | i 728 | i — | i — | ( i 5,531 | ) | i 13,339 | |||||||||||
Transmission/Other | i 36,622 | i 36,230 | i — | i — | ( i 10,967 | ) | i 61,885 | |||||||||||
Revenue
from contracts with customers | $ | i 529,743 | $ | i 703,534 | $ | i 43,744 | $ | i 49,653 | $ | ( i 80,693 | ) | $ | i 1,245,981 | |||||
Other
revenues | i 2,218 | i 3,106 | i 27,429 | i 1,675 | ( i 27,337 | ) | i 7,091 | |||||||||||
Total
Revenues | $ | i 531,961 | $ | i 706,640 | $ | i 71,173 | $ | i 51,328 | $ | ( i 108,030 | ) | $ | i 1,253,072 | |||||
Timing
of Revenue Recognition: | ||||||||||||||||||
Services transferred at a point in time | $ | i — | $ | i — | $ | i — | $ | i 49,653 | $ | ( i 23,761 | ) | $ | i 25,892 | |||||
Services
transferred over time | i 529,743 | i 703,534 | i 43,744 | i — | ( i 56,932 | ) | i 1,220,089 | |||||||||||
Revenue
from contracts with customers | $ | i 529,743 | $ | i 703,534 | $ | i 43,744 | $ | i 49,653 | $ | ( i 80,693 | ) | $ | i 1,245,981 | |||||
(a) | Due
to the changes in our segment disclosures discussed in Note 3, Power Generation Wholesale revenue was revised for the three and nine months ended September 30, 2018, which resulted in an increase of $ i 0.9 million and $ i 2.6
million, respectively. The changes to Power Generation Wholesale revenue were offset by changes to eliminations in Inter-company Revenues within Corporate and Other and there was no impact to our consolidated Total Revenues. |
Three
Months Ended September 30, 2019 | External Operating Revenue | Inter-company Operating Revenue | Total Revenues | ||||||||||||||
Contract Customers | Other Revenues | Contract
Customers | Other Revenues | ||||||||||||||
Segment: | |||||||||||||||||
Electric Utilities | $ | i 185,811 | $ | i 234 | $ | i 5,339 | $ | i — | $ | i 191,384 | |||||||
Gas
Utilities | i 129,385 | i 810 | i 549 | i — | i 130,744 | ||||||||||||
Power
Generation | i 1,703 | i 531 | i 14,415 | i 9,162 | i 25,811 | ||||||||||||
Mining | i 6,846 | i 228 | i 8,146 | i 332 | i 15,552 | ||||||||||||
Inter-company
eliminations | — | — | ( i 28,449 | ) | ( i 9,494 | ) | ( i 37,943 | ) | |||||||||
Total | $ | i 323,745 | $ | i 1,803 | $ | i — | $ | i — | $ | i 325,548 |
Three
Months Ended September 30, 2018 | External Operating Revenue | Inter-company Operating Revenue | Total Revenues | ||||||||||||||
Contract Customers | Other Revenues | Contract
Customers | Other Revenues | ||||||||||||||
Segment: | |||||||||||||||||
Electric Utilities | $ | i 179,527 | $ | i 231 | $ | i 5,032 | $ | i — | $ | i 184,790 | |||||||
Gas
Utilities | i 130,390 | i 1,011 | i 275 | i — | i 131,676 | ||||||||||||
Power
Generation (a) | i 1,437 | i 348 | i 13,936 | i 8,770 | i 24,491 | ||||||||||||
Mining | i 8,809 | i 226 | i 7,942 | i 324 | i 17,301 | ||||||||||||
Inter-company
eliminations (a) | — | — | ( i 27,185 | ) | ( i 9,094 | ) | ( i 36,279 | ) | |||||||||
Total | $ | i 320,163 | $ | i 1,816 | $ | i — | $ | i — | $ | i 321,979 |
Nine Months Ended September 30, 2019 | External Operating Revenue | Inter-company Operating
Revenue | Total Revenues | ||||||||||||||
Contract Customers | Other Revenues | Contract Customers | Other Revenues | ||||||||||||||
Segment: | |||||||||||||||||
Electric
Utilities | $ | i 521,614 | $ | i 2,465 | $ | i 16,586 | $ | i — | $ | i 540,665 | |||||||
Gas
Utilities | i 704,188 | i 1,134 | i 1,971 | i — | i 707,293 | ||||||||||||
Power
Generation | i 5,725 | i 1,401 | i 40,924 | i 27,714 | i 75,764 | ||||||||||||
Mining | i 19,934 | i 785 | i 23,315 | i 992 | i 45,026 | ||||||||||||
Inter-company
eliminations | — | — | ( i 82,796 | ) | ( i 28,706 | ) | ( i 111,502 | ) | |||||||||
Total | $ | i 1,251,461 | $ | i 5,785 | $ | i — | $ | i — | $ | i 1,257,246 |
Nine
Months Ended September 30, 2018 | External Operating Revenue | Inter-company Operating Revenue | Total Revenues | ||||||||||||||
Contract Customers | Other Revenues | Contract
Customers | Other Revenues | ||||||||||||||
Segment: | |||||||||||||||||
Electric Utilities | $ | i 513,270 | $ | i 2,218 | $ | i 16,473 | $ | i — | $ | i 531,961 | |||||||
Gas
Utilities | i 702,532 | i 3,106 | i 1,002 | i — | i 706,640 | ||||||||||||
Power
Generation (a) | i 4,287 | i 1,066 | i 39,457 | i 26,363 | i 71,173 | ||||||||||||
Mining | i 25,892 | i 701 | i 23,761 | i 974 | i 51,328 | ||||||||||||
Inter-company
eliminations (a) | — | — | ( i 80,693 | ) | ( i 27,337 | ) | ( i 108,030 | ) | |||||||||
Total | $ | i 1,245,981 | $ | i 7,091 | $ | i — | $ | i — | $ | i 1,253,072 |
(a) | Due
to the changes in our segment disclosures, Power Generation Inter-company Operating Revenue for Contract Customers was revised for the three and nine months ended September 30, 2018 which resulted in an increase of $ i 0.9 million and $ i 2.6
million, respectively. The changes to Power Generation were offset by changes to Inter-company eliminations within Corporate and Other and there was no impact on our consolidated Total revenues. |
Three
Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Adjusted operating income: | ||||||||||||
Electric
Utilities (a) | $ | i 50,653 | $ | i 43,393 | $ | i 125,219 | $ | i 123,073 | ||||
Gas
Utilities | i 4,736 | i 4,240 | i 116,607 | i 116,168 | ||||||||
Power
Generation (a) | i 11,822 | i 13,079 | i 33,945 | i 33,731 | ||||||||
Mining | i 3,374 | i 4,551 | i 9,351 | i 12,647 | ||||||||
Corporate
and Other (a) | ( i 34 | ) | ( i 178 | ) | ( i 439 | ) | ( i 2,709 | ) | ||||
Operating
income | i 70,551 | i 65,085 | i 284,683 | i 282,910 | ||||||||
Interest
expense, net | ( i 33,487 | ) | ( i 35,297 | ) | ( i 102,469 | ) | ( i 104,826 | ) | ||||
Impairment
of investment | ( i 19,741 | ) | i — | ( i 19,741 | ) | i — | ||||||
Other
income (expense), net | i 580 | ( i 510 | ) | i 55 | ( i 1,923 | ) | ||||||
Income
tax benefit (expense) (b) | ( i 2,508 | ) | ( i 7,477 | ) | ( i 22,078 | ) | i 11,784 | |||||
Income
from continuing operations | i 15,395 | i 21,801 | i 140,450 | i 187,945 | ||||||||
Net
(loss) from discontinued operations | i — | ( i 857 | ) | i — | ( i 5,627 | ) | ||||||
Net
income | i 15,395 | i 20,944 | i 140,450 | i 182,318 | ||||||||
Net
income attributable to noncontrolling interest | ( i 3,655 | ) | ( i 3,994 | ) | ( i 10,319 | ) | ( i 10,447 | ) | ||||
Net
income available for common stock | $ | i 11,740 | $ | i 16,950 | $ | i 130,131 | $ | i 171,871 |
(a) | Due
to the changes in our segment disclosures, Adjusted operating income was revised for the three and nine months ended September 30, 2018, which resulted in an increase (decrease) as follows (in millions): |
Segment | Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2018 | ||||
Electric
Utilities | $ | i 1.6 | $ | i 4.8 | ||
Power
Generation | ( i 1.4 | ) | ( i 4.4 | ) | ||
Corporate
and Other | ( i 0.2 | ) | ( i 0.4 | ) | ||
$ | i — | $ | i — |
(b) | Income
tax benefit (expense) for the nine months ended September 30, 2018 included a $ i 49 million tax benefit resulting from legal entity restructuring. See Note 18 for more information. |
Total assets (net of inter-company eliminations) as of: | |||||||
Segment: | |||||||
Electric
Utilities (a) | $ | i 2,810,108 | $ | i 2,707,695 | |||
Gas
Utilities | i 3,797,941 | i 3,623,475 | |||||
Power
Generation (a) | i 414,526 | i 342,085 | |||||
Mining | i 78,073 | i 80,594 | |||||
Corporate
and Other | i 174,302 | i 209,478 | |||||
Total
assets | $ | i 7,274,950 | $ | i 6,963,327 |
(a) | Due
to the changes in our segment disclosures, Electric Utilities and Power Generation Total assets were revised as of December 31, 2018 which resulted in an increase (decrease) of ($ i 188) million and $ i 188
million, respectively. There was no impact on our consolidated Total assets. |
Accounts | Unbilled | Less
Allowance for | Accounts | |||||||||
Receivable, Trade | Revenue | Doubtful Accounts | Receivable, net | |||||||||
Electric Utilities | $ | i 39,151 | $ | i 31,843 | $ | ( i 500 | ) | $ | i 70,494 | |||
Gas
Utilities | i 46,265 | i 24,091 | ( i 2,490 | ) | i 67,866 | |||||||
Power
Generation | i 2,733 | i — | i — | i 2,733 | ||||||||
Mining | i 1,804 | i — | i — | i 1,804 | ||||||||
Corporate | i 6,261 | i — | ( i 169 | ) | i 6,092 | |||||||
Total | $ | i 96,214 | $ | i 55,934 | $ | ( i 3,159 | ) | $ | i 148,989 |
Accounts | Unbilled | Less
Allowance for | Accounts | |||||||||
Receivable, Trade | Revenue | Doubtful Accounts | Receivable, net | |||||||||
Electric Utilities | $ | i 39,721 | $ | i 35,125 | $ | ( i 448 | ) | $ | i 74,398 | |||
Gas
Utilities | i 96,123 | i 90,521 | ( i 2,592 | ) | i 184,052 | |||||||
Power
Generation | i 1,876 | i — | i — | i 1,876 | ||||||||
Mining | i 3,988 | i — | i — | i 3,988 | ||||||||
Corporate | i 5,008 | i — | ( i 169 | ) | i 4,839 | |||||||
Total | $ | i 146,716 | $ | i 125,646 | $ | ( i 3,209 | ) | $ | i 269,153 |
Regulatory assets | ||||||
Deferred energy and fuel
cost adjustments (a) | $ | i 31,832 | $ | i 29,661 | ||
Deferred
gas cost adjustments (a) | i 3,899 | i 3,362 | ||||
Gas
price derivatives (a) | i 4,296 | i 6,201 | ||||
Deferred
taxes on AFUDC (b) | i 7,691 | i 7,841 | ||||
Employee
benefit plans (c) | i 107,921 | i 110,524 | ||||
Environmental (a) | i 917 | i 959 | ||||
Loss
on reacquired debt (a) | i 19,710 | i 21,001 | ||||
Renewable
energy standard adjustment (a) | i 2,871 | i 1,722 | ||||
Deferred
taxes on flow through accounting (c) | i 37,609 | i 31,044 | ||||
Decommissioning
costs (b) | i 11,206 | i 11,700 | ||||
Gas
supply contract termination (a) | i 9,953 | i 14,310 | ||||
Other
regulatory assets (a) | i 22,453 | i 45,910 | ||||
Total
regulatory assets | i 260,358 | i 284,235 | ||||
Less
current regulatory assets | ( i 46,206 | ) | ( i 48,776 | ) | ||
Regulatory
assets, non-current | $ | i 214,152 | $ | i 235,459 | ||
Regulatory
liabilities | ||||||
Deferred energy and gas costs (a) | $ | i 9,919 | $ | i 6,991 | ||
Employee
benefit plan costs and related deferred taxes (c) | i 42,737 | i 42,533 | ||||
Cost
of removal (a) | i 162,169 | i 150,123 | ||||
Excess
deferred income taxes (c) | i 286,587 | i 310,562 | ||||
TCJA
revenue reserve | i 2,770 | i 18,032 | ||||
Other
regulatory liabilities (c) | i 19,759 | i 12,553 | ||||
Total
regulatory liabilities | i 523,941 | i 540,794 | ||||
Less
current regulatory liabilities | ( i 25,168 | ) | ( i 29,810 | ) | ||
Regulatory
liabilities, non-current | $ | i 498,773 | $ | i 510,984 |
(a) | We
are allowed recovery of costs, but we are not allowed a rate of return. |
(b) | In addition to recovery of costs, we are allowed a rate of return. |
(c) | In addition to recovery or repayment of costs, we are allowed a return on a portion of this amount or a reduction in rate base. |
Materials and supplies | $ | i 81,382 | $ | i 75,081 | |||
Fuel
- Electric Utilities | i 2,535 | i 2,850 | |||||
Natural
gas in storage held for distribution | i 39,085 | i 39,368 | |||||
Total
materials, supplies and fuel | $ | i 123,002 | $ | i 117,299 |
Three
Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Net
income available for common stock | $ | i 11,740 | $ | i 16,950 | $ | i 130,131 | $ | i 171,871 | |||||
Weighted
average shares - basic | i 60,976 | i 53,364 | i 60,458 | i 53,346 | |||||||||
Dilutive
effect of: | |||||||||||||
Equity Units (a) | i — | i 1,344 | i — | i 1,060 | |||||||||
Equity
compensation | i 128 | i 111 | i 120 | i 102 | |||||||||
Weighted
average shares - diluted | i 61,104 | i 54,819 | i 60,578 | i 54,508 |
(a) | Calculated
using the treasury stock method. On November 1, 2018, we completed settlement of the stock purchase contracts that were components of the Equity Units issued in November 2015. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||
2019 | 2018 | 2019 | 2018 | ||||||
Equity
compensation | i 2 | i 12 | i 4 | i 15 | |||||
Restricted
Stock | i — | i — | i 1 | i — | |||||
Anti-dilutive
shares | i 2 | i 12 | i 5 | i 15 |
Balance Outstanding | Letters of Credit | Balance Outstanding | Letters of Credit | |||||||||
Revolving Credit Facility | $ | i 50,000 | $ | i 18,313 | $ | i — | $ | i 22,311 | ||||
CP
Program | i 244,900 | — | i 185,620 | — | ||||||||
Total | $ | i 294,900 | $ | i 18,313 | $ | i 185,620 | $ | i 22,311 |
• | Repay the $ i 400 million
Corporate term loan under the Amended and Restated Credit Agreement due June 17, 2021; |
• |
• | Repay
a portion of short-term debt. |
Notional (MMBtus) | Maximum Term (months) (a) | Notional (MMBtus) | Maximum
Term (months) (a) | ||||||
Natural gas futures purchased | i 2,350,000 | i 15 | i 4,000,000 | i 24 | |||||
Natural
gas options purchased, net | i 8,580,000 | i 6 | i 4,320,000 | i 13 | |||||
Natural
gas basis swaps purchased | i 2,090,000 | i 15 | i 3,960,000 | i 24 | |||||
Natural
gas over-the-counter swaps, net (b) | i 5,460,000 | i 25 | i 3,660,000 | i 24 | |||||
Natural
gas physical contracts, net (c) | i 23,459,639 | i 6 | i 18,325,852 | i 30 |
(a) | Term
reflects the maximum forward period hedged. |
(b) |
(c) | Volumes exclude contracts that qualify for the normal purchase, normal sales exception. |
Three
Months Ended September 30, 2019 | ||||||
(in thousands) | ||||||
Derivatives in Cash Flow Hedging Relationships | Location of Reclassifications from AOCI into Income | Amount of Gain/(Loss) Reclassified from AOCI into Income | ||||
Interest rate swaps | Interest
expense | $ | ( i 713 | ) | ||
Commodity
derivatives | Fuel, purchased power and cost of natural gas sold | ( i 129 | ) | |||
Total | $ | ( i 842 | ) |
Three
Months Ended September 30, 2018 | ||||||
(in thousands) | ||||||
Derivatives in Cash Flow Hedging Relationships | Location of Reclassifications from AOCI into Income | Amount of Gain/(Loss) Reclassified from AOCI into Income | ||||
Interest rate swaps | Interest
expense | $ | ( i 712 | ) | ||
Commodity
derivatives | Fuel, purchased power and cost of natural gas sold | ( i 18 | ) | |||
Total | $ | ( i 730 | ) |
Nine Months Ended September 30, 2019 | ||||||
(in thousands) | ||||||
Derivatives in Cash Flow Hedging Relationships | Location
of Reclassifications from AOCI into Income | Amount of Gain/(Loss) Reclassified from AOCI into Income | ||||
Interest rate swaps | Interest expense | $ | ( i 2,139 | ) | ||
Commodity
derivatives | Fuel, purchased power and cost of natural gas sold | i 508 | ||||
Total | $ | ( i 1,631 | ) |
Nine
Months Ended September 30, 2018 | ||||||
(in thousands) | ||||||
Derivatives in Cash Flow Hedging Relationships | Location of Reclassifications from AOCI into Income | Amount of Gain/(Loss) Reclassified from AOCI into Income | ||||
Interest rate swaps | Interest
expense | $ | ( i 2,138 | ) | ||
Commodity
derivatives | Fuel, purchased power and cost of natural gas sold | ( i 802 | ) | |||
Total | $ | ( i 2,940 | ) |
Three
Months Ended September 30, | |||||||
2019 | 2018 | ||||||
(in thousands) | |||||||
Increase (decrease) in fair value: | |||||||
Forward commodity contracts | $ | ( i 150 | ) | $ | i 30 | ||
Recognition
of (gains) losses in earnings due to settlements: | |||||||
Interest rate swaps | i 713 | i 712 | |||||
Forward
commodity contracts | i 129 | i 18 | |||||
Total
other comprehensive income (loss) from hedging | $ | i 692 | $ | i 760 |
Nine
Months Ended September 30, | |||||||
2019 | 2018 | ||||||
(in thousands) | |||||||
Increase (decrease) in fair value: | |||||||
Forward commodity contracts | $ | ( i 434 | ) | $ | ( i 219 | ) | |
Recognition
of (gains) losses in earnings due to settlements: | |||||||
Interest rate swaps | i 2,139 | i 2,138 | |||||
Forward
commodity contracts | ( i 508 | ) | i 802 | ||||
Total
other comprehensive income (loss) from hedging | $ | i 1,197 | $ | i 2,721 |
Three
Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Derivatives Not Designated as Hedging Instruments | Location of Gain/(Loss) on Derivatives Recognized in Income | Amount of Gain/(Loss) on Derivatives Recognized in Income | Amount of Gain/(Loss) on Derivatives
Recognized in Income | |||||
Commodity derivatives | Fuel, purchased power and cost of natural gas sold | $ | ( i 20 | ) | $ | ( i 96 | ) | |
Commodity
derivatives | Other income (expense), net | i 142 | i — | |||||
$ | i 122 | $ | ( i 96 | ) |
Nine
Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Derivatives Not Designated as Hedging Instruments | Location of Gain/(Loss) on Derivatives Recognized in Income | Amount of Gain/(Loss) on Derivatives Recognized in Income | Amount of Gain/(Loss) on Derivatives
Recognized in Income | |||||
Commodity derivatives | Fuel, purchased power and cost of natural gas sold | $ | ( i 1,180 | ) | $ | i 929 | ||
Commodity
derivatives | Other income (expense), net | $ | i 142 | $ | i — | |||
$ | ( i 1,038 | ) | $ | i 929 |
As of September 30, 2019 | ||||||||||||||||
Level 1 | Level 2 | Level
3 | Cash Collateral and Counterparty Netting | Total | ||||||||||||
(in thousands) | ||||||||||||||||
Assets: | ||||||||||||||||
Commodity
derivatives — Utilities | $ | i — | $ | i 2,750 | $ | i — | $ | ( i 2,335 | ) | $ | i 415 | |||||
Total | $ | i — | $ | i 2,750 | $ | i — | $ | ( i 2,335 | ) | $ | i 415 | |||||
Liabilities: | ||||||||||||||||
Commodity
derivatives — Utilities | $ | i — | $ | i 6,080 | $ | i — | $ | ( i 3,471 | ) | $ | i 2,609 | |||||
Total | $ | i — | $ | i 6,080 | $ | i — | $ | ( i 3,471 | ) | $ | i 2,609 |
As of December 31, 2018 | ||||||||||||||||
Level
1 | Level 2 | Level 3 | Cash Collateral and Counterparty Netting | Total | ||||||||||||
(in thousands) | ||||||||||||||||
Assets: | ||||||||||||||||
Commodity
derivatives — Utilities | $ | i — | $ | i 2,927 | $ | i — | $ | ( i 1,408 | ) | $ | i 1,519 | |||||
Total | $ | i — | $ | i 2,927 | $ | i — | $ | ( i 1,408 | ) | $ | i 1,519 | |||||
Liabilities: | ||||||||||||||||
Commodity
derivatives — Utilities | $ | i — | $ | i 6,801 | $ | i — | $ | ( i 5,794 | ) | $ | i 1,007 | |||||
Total | $ | i — | $ | i 6,801 | $ | i — | $ | ( i 5,794 | ) | $ | i 1,007 |
Balance Sheet Location | ||||||||
Derivatives
designated as hedges: | ||||||||
Asset derivative instruments: | ||||||||
Current commodity derivatives | Derivative assets — current | $ | i — | $ | i 415 | |||
Noncurrent
commodity derivatives | Other assets, non-current | i 2 | i 18 | |||||
Liability
derivative instruments: | ||||||||
Current commodity derivatives | Derivative liabilities — current | ( i 427 | ) | ( i 114 | ) | |||
Noncurrent
commodity derivatives | Other deferred credits and other liabilities | ( i 70 | ) | ( i 4 | ) | |||
Total
derivatives designated as hedges | $ | ( i 495 | ) | $ | i 315 | |||
Derivatives
not designated as hedges: | ||||||||
Asset derivative instruments: | ||||||||
Current commodity derivatives | Derivative assets — current | $ | i 412 | $ | i 1,085 | |||
Noncurrent
commodity derivatives | Other assets, non-current | i 1 | i 1 | |||||
Liability
derivative instruments: | ||||||||
Current commodity derivatives | Derivative liabilities — current | ( i 1,969 | ) | ( i 833 | ) | |||
Noncurrent
commodity derivatives | Other deferred credits and other liabilities | ( i 143 | ) | ( i 56 | ) | |||
Total
derivatives not designated as hedges | $ | ( i 1,699 | ) | $ | i 197 |
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||
Long-term debt, including current maturities (a) (b) | $ | i 3,054,978 | $ | i 3,424,747 | $ | i 2,956,578 | $ | i 3,039,108 |
(a) | Long-term
debt is valued based on observable inputs available either directly or indirectly for similar liabilities in active markets and therefore is classified in Level 2 in the fair value hierarchy. |
(b) | Carrying amount of long-term debt is net of deferred financing costs. |
(13) | i OTHER
COMPREHENSIVE INCOME (LOSS) |
Location on the Condensed Consolidated Statements of Income | Amount Reclassified from AOCI | |||||||||||||
Three
Months Ended | Nine Months Ended | |||||||||||||
Gains and (losses) on cash flow hedges: | ||||||||||||||
Interest
rate swaps | Interest expense | $ | ( i 713 | ) | $ | ( i 712 | ) | $ | ( i 2,139 | ) | $ | ( i 2,138 | ) | |
Commodity
contracts | Fuel, purchased power and cost of natural gas sold | ( i 129 | ) | ( i 18 | ) | i 508 | ( i 802 | ) | ||||||
( i 842 | ) | ( i 730 | ) | ( i 1,631 | ) | ( i 2,940 | ) | |||||||
Income
tax | Income tax benefit (expense) | i 170 | i 149 | i 358 | i 643 | |||||||||
Total
reclassification adjustments related to cash flow hedges, net of tax | $ | ( i 672 | ) | $ | ( i 581 | ) | $ | ( i 1,273 | ) | $ | ( i 2,297 | ) | ||
Amortization
of components of defined benefit plans: | ||||||||||||||
Prior service cost | Operations and maintenance | $ | i 20 | $ | i 44 | $ | i 59 | $ | i 133 | |||||
Actuarial
gain (loss) | Operations and maintenance | ( i 84 | ) | ( i 621 | ) | ( i 525 | ) | ( i 1,865 | ) | |||||
( i 64 | ) | ( i 577 | ) | ( i 466 | ) | ( i 1,732 | ) | |||||||
Income
tax | Income tax benefit (expense) | i 89 | i 128 | i 184 | i 380 | |||||||||
Total
reclassification adjustments related to defined benefit plans, net of tax | $ | i 25 | $ | ( i 449 | ) | $ | ( i 282 | ) | $ | ( i 1,352 | ) | |||
Total
reclassifications | $ | ( i 647 | ) | $ | ( i 1,030 | ) | $ | ( i 1,555 | ) | $ | ( i 3,649 | ) |
Interest
Rate Swaps | Commodity Derivatives | Employee Benefit Plans | Total | |||||||||
As of December 31, 2018 | $ | ( i 17,307 | ) | $ | i 328 | $ | ( i 9,937 | ) | $ | ( i 26,916 | ) | |
Other
comprehensive income (loss) | ||||||||||||
before reclassifications | i — | ( i 334 | ) | i — | ( i 334 | ) | ||||||
Amounts
reclassified from AOCI | i 1,639 | ( i 366 | ) | i 282 | i 1,555 | |||||||
As
of September 30, 2019 | $ | ( i 15,668 | ) | $ | ( i 372 | ) | $ | ( i 9,655 | ) | $ | ( i 25,695 | ) |
Interest
Rate Swaps | Commodity Derivatives | Employee Benefit Plans | Total | |||||||||
As of December 31, 2017 | $ | ( i 19,581 | ) | $ | ( i 518 | ) | $ | ( i 21,103 | ) | $ | ( i 41,202 | ) |
Other
comprehensive income (loss) | ||||||||||||
before reclassifications | i — | ( i 168 | ) | i — | ( i 168 | ) | ||||||
Amounts
reclassified from AOCI | i 1,682 | i 615 | i 1,352 | i 3,649 | ||||||||
Reclassifications
of certain tax effects from AOCI | i 15 | i — | i 3 | i 18 | ||||||||
As
of September 30, 2018 | $ | ( i 17,884 | ) | $ | ( i 71 | ) | $ | ( i 19,748 | ) | $ | ( i 37,703 | ) |
Nine Months Ended | |||||||
(in thousands) | |||||||
Non-cash investing and financing activities — | |||||||
Property, plant and equipment acquired with accrued liabilities | $ | i 86,661 | $ | i 49,631 | |||
Cash
(paid) refunded during the period — | |||||||
Interest (net of amounts capitalized) | $ | ( i 99,375 | ) | $ | ( i 104,035 | ) | |
Income
taxes | $ | i 2,255 | $ | ( i 14,842 | ) |
Three
Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Service cost | $ | i 1,346 | $ | i 1,708 | $ | i 4,037 | $ | i 5,125 | |||||
Interest
cost | i 4,344 | i 3,867 | i 13,031 | i 11,602 | |||||||||
Expected
return on plan assets | ( i 6,100 | ) | ( i 6,185 | ) | ( i 18,300 | ) | ( i 18,555 | ) | |||||
Prior
service cost | i 6 | i 15 | i 19 | i 44 | |||||||||
Net
loss (gain) | i 941 | i 2,158 | i 2,822 | i 6,473 | |||||||||
Net
periodic benefit cost | $ | i 537 | $ | i 1,563 | $ | i 1,609 | $ | i 4,689 |
Three Months Ended September 30, | Nine Months Ended September
30, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Service cost | $ | i 454 | $ | i 573 | $ | i 1,362 | $ | i 1,718 | |||||
Interest
cost | i 560 | i 521 | i 1,683 | i 1,563 | |||||||||
Expected
return on plan assets | ( i 57 | ) | ( i 57 | ) | ( i 172 | ) | ( i 170 | ) | |||||
Prior
service cost (benefit) | ( i 99 | ) | ( i 99 | ) | ( i 298 | ) | ( i 297 | ) | |||||
Net
loss (gain) | i — | i 54 | i — | i 162 | |||||||||
Net
periodic benefit cost | $ | i 858 | $ | i 992 | $ | i 2,575 | $ | i 2,976 |
Three Months Ended September 30, | Nine
Months Ended September 30, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Service cost | $ | i 429 | $ | i 632 | $ | i 2,406 | $ | i 1,347 | |||||
Interest
cost | i 324 | i 293 | i 972 | i 878 | |||||||||
Prior
service cost | i — | i — | i 1 | i 1 | |||||||||
Net
loss (gain) | i 134 | i 250 | i 402 | i 750 | |||||||||
Net
periodic benefit cost | $ | i 887 | $ | i 1,175 | $ | i 3,781 | $ | i 2,976 |
Contributions Made | Contributions Made | Additional Contributions | Contributions | |||||||||
Three
Months Ended September 30, 2019 | Nine Months Ended September 30, 2019 | Anticipated for 2019 | Anticipated for 2020 | |||||||||
Defined Benefit Pension Plan | $ | i 12,700 | $ | i 12,700 | $ | i — | $ | i 12,700 | ||||
Non-pension
Defined Benefit Postretirement Healthcare Plans | $ | i 1,109 | $ | i 3,326 | $ | i 1,109 | $ | i 4,815 | ||||
Supplemental
Non-qualified Defined Benefit and Defined Contribution Plans | $ | i 366 | $ | i 1,098 | $ | i 366 | $ | i 1,406 |
• | On June 26, 2019, Colorado Electric entered into a PPA with Platte River Power Authority to purchase up to i 60
MW of wind energy upon construction completion of a new wind project, which is expected in mid-2020. This agreement will expire May 31, 2030. |
• | On June 26, 2019, Colorado Electric entered into a PPA with Platte River Power Authority to purchase i 25
MW of unit contingent energy. This agreement was effective September 1, 2019 and will expire June 30, 2024. |
2019 | $ | i 1,369 | |
2020 | $ | i 5,475 | |
2021 | $ | i 5,475 | |
2022 | $ | i 5,475 | |
2023 | $ | i 5,475 | |
Thereafter | $ | i 2,738 |
Accrued employee compensation, benefits and withholdings | $ | i 57,313 | $ | i 63,742 | ||
Accrued
property taxes | i 38,937 | i 42,510 | ||||
Customer
deposits and prepayments | i 56,220 | i 43,574 | ||||
Accrued
interest and contract adjustment payments | i 35,100 | i 31,759 | ||||
Other
(none of which is individually significant) | i 30,262 | i 33,916 | ||||
Total
accrued liabilities | $ | i 217,832 | $ | i 215,501 |
Income Statement Location | Three Months Ended September
30, 2019 | Nine Months Ended September 30, 2019 | |||||
Operating lease cost | Operations and maintenance | $ | i 380 | $ | i 1,076 | ||
Finance
lease cost: | |||||||
Amortization of right-of-use asset | Depreciation, depletion and amortization | i 28 | i 72 | ||||
Interest
on lease liabilities | Interest expense incurred net of amounts capitalized (including amortization of debt issuance costs, premiums and discounts) | i 5 | i 14 | ||||
Total
lease cost | $ | i 413 | $ | i 1,162 |
Balance Sheet Location | As of September 30, 2019 | |||
Assets: | ||||
Operating lease assets | Other assets, non-current | $ | i 4,864 | |
Finance
lease assets | Other assets, non-current | i 493 | ||
Total lease assets | $ | i 5,357 | ||
Liabilities: | ||||
Current: | ||||
Operating
leases | Accrued liabilities | $ | i 970 | |
Finance lease | Accrued liabilities | i 80 | ||
Noncurrent: | ||||
Operating
leases | Other deferred credits and other liabilities | i 4,252 | ||
Finance lease | Other deferred credits and other liabilities | i 419 | ||
Total
lease liabilities | $ | i 5,721 |
Nine
Months Ended September 30, 2019 | |||
Cash paid included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ | i 895 | |
Operating
cash flows from finance lease | $ | i 14 | |
Financing cash flows from finance lease | $ | i 66 | |
Right-of-use
assets obtained in exchange for lease obligations: | |||
Operating leases | $ | i 2,775 | |
Finance lease | $ | i 67 |
As
of September 30, 2019 | ||
Weighted average remaining lease term (years): | ||
Operating leases | i 8 years | |
Finance lease | i 4
years | |
Weighted average discount rate: | ||
Operating leases | i 4.27 | % |
Finance
lease | i 4.19 | % |
Operating Leases | Finance Lease | Total | |||||||
2019 (a) | $ | i 368 | $ | i 32 | $ | i 400 | |||
2020 | i 992 | i 126 | i 1,118 | ||||||
2021 | i 855 | i 126 | i 981 | ||||||
2022 | i 736 | i 126 | i 862 | ||||||
2023 | i 714 | i 126 | i 840 | ||||||
Thereafter | i 2,682 | i 10 | i 2,692 | ||||||
Total
lease payments (b) | $ | i 6,347 | $ | i 546 | $ | i 6,893 | |||
Less
imputed interest | i 1,125 | i 47 | i 1,172 | ||||||
Present
value of lease liabilities | $ | i 5,222 | $ | i 499 | $ | i 5,721 |
(a) | Includes
lease liabilities for the remaining three months of 2019. |
(b) | Lease payments exclude payments to landlords for common area maintenance, real estate taxes, and insurance. |
Operating Leases | |||
2019 | $ | i 1,052 | |
2020 | i 464 | ||
2021 | i 344 | ||
2022 | i 224 | ||
2023 | i 216 | ||
Thereafter | i 1,776 | ||
Total
lease payments | $ | i 4,076 |
Income Statement Location | Three
Months Ended September 30, 2019 | Nine Months Ended September 30, 2019 | |||||
Operating lease income | Revenue | $ | i 544 | $ | i 1,749 |
Operating Leases | |||
2019 (a) | $ | i 551 | |
2020 | i 2,035 | ||
2021 | i 1,857 | ||
2022 | i 1,793 | ||
2023 | i 1,799 | ||
Thereafter | i 55,481 | ||
Total
lease receivables | $ | i 63,516 |
(a) | Includes
lease receivables for the remaining three months of 2019. |
Investment in privately held oil and gas company | $ | i 8,359 | $ | i 28,100 | |||
Cash
surrender value of life insurance contracts | i 12,907 | i 12,812 | |||||
Other
investments | i 317 | i 101 | |||||
Total
investments | $ | i 21,583 | $ | i 41,013 |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
See Forward-Looking Information in the Liquidity and Capital Resources section of this Item 2, beginning on Page 58. |
Three
Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||
(in millions, except per share amounts) | Income | EPS | Income | EPS | Income | EPS | Income | EPS | |||||||||||||||||||
Net
income from continuing operations available for common stock | $ | 11.7 | $ | 0.19 | $ | 17.8 | $ | 0.32 | $ | 130.1 | $ | 2.15 | $ | 177.5 | $ | 3.26 | |||||||||||
Net
(loss) from discontinued operations | — | — | (0.9 | ) | (0.02 | ) | — | — | (5.6 | ) | (0.10 | ) | |||||||||||||||
Net
income available for common stock | $ | 11.7 | $ | 0.19 | $ | 17.0 | $ | 0.31 | $ | 130.1 | $ | 2.15 | $ | 171.9 | $ | 3.15 |
• | Electric Utilities’ adjusted operating income increased $7.3 million primarily due to the prior year Wyoming Electric PCA settlement, warmer summer weather in Colorado and Wyoming,
increased industrial demand, and increased rider revenues partially offset by higher operating expenses driven by outside services and employee costs; |
• | Gas Utilities’ adjusted operating income increased $0.5 million primarily due to new rates, increased transport and transmission, and customer growth partially offset by lower heating demand from warmer weather, reduced irrigation demand due to heavy precipitation and higher operating expenses driven by outside services and employee costs; |
• | Power
Generation’s adjusted operating income decreased $1.3 million primarily due to higher depreciation and property taxes from new wind assets partially offset by higher revenue from increased wind MWh sold and higher PPA prices; |
• | Mining’s adjusted operating income decreased $1.2 million primarily due to lower tons sold driven by unplanned generating facility outages partially offset by lower operating expenses; |
• | A $20 million non-cash
impairment of our investment in equity securities of a privately held oil and gas company; and |
• | A prior year $5.3 million income tax expense associated with changes in the previously estimated impact of tax reform on deferred income taxes. |
• | Electric Utilities’ adjusted operating income increased $2.1 million primarily due to reduced power capacity charges, the prior year Wyoming Electric PCA settlement and increased rider revenues partially offset by higher operating expenses driven by outside services and employee costs; |
• | Gas Utilities’ adjusted operating income increased $0.4 million
primarily due to new rates offset by higher operating expenses driven by outside services and employee costs; |
• | Power Generation’s adjusted operating income increased $0.2 million primarily due to higher revenue from increased wind MWh sold partially offset by higher depreciation and property taxes from new wind assets; |
• | Mining’s adjusted operating income decreased $3.3 million primarily due to lower tons sold driven by planned
and unplanned generating facility outages partially offset by lower operating expenses; |
• | Corporate and Other expenses decreased $2.3 million primarily due to prior year expenses related to the oil and gas segment that were not reclassified to discontinued operations; |
• | A $20 million non-cash impairment of our investment in equity securities of a privately held oil and gas company; |
• | A
prior year $49 million tax benefit resulting from legal entity restructuring partially offset by a prior year $7.5 million income tax expense associated with changes in the previously estimated impact of tax reform on deferred income taxes; and |
• | A lower current year effective tax rate primarily due to $5.0 million of federal production tax credits and related state investment tax credits associated with new wind assets and a $1.0 million tax benefit for deferred tax amortization related to tax reform. |
Three Months Ended September 30, | Nine Months Ended September
30, | |||||||||||||||||
2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||
Revenue | ||||||||||||||||||
Revenue | $ | 363,491 | $ | 358,258 | $ | 5,233 | $ | 1,368,748 | $ | 1,361,102 | $ | 7,646 | ||||||
Inter-company
eliminations | (37,943 | ) | (36,279 | ) | (1,664 | ) | (111,502 | ) | (108,030 | ) | (3,472 | ) | ||||||
$ | 325,548 | $ | 321,979 | $ | 3,569 | $ | 1,257,246 | $ | 1,253,072 | $ | 4,174 | |||||||
Adjusted
operating income (a) | ||||||||||||||||||
Electric Utilities | $ | 50,653 | $ | 43,393 | $ | 7,260 | $ | 125,219 | $ | 123,073 | $ | 2,146 | ||||||
Gas
Utilities | 4,736 | 4,240 | 496 | 116,607 | 116,168 | 439 | ||||||||||||
Power Generation | 11,822 | 13,079 | (1,257 | ) | 33,945 | 33,731 | 214 | |||||||||||
Mining | 3,374 | 4,551 | (1,177 | ) | 9,351 | 12,647 | (3,296 | ) | ||||||||||
Corporate
and Other | (34 | ) | (178 | ) | 144 | (439 | ) | (2,709 | ) | 2,270 | ||||||||
Operating income | 70,551 | 65,085 | 5,466 | 284,683 | 282,910 | 1,773 | ||||||||||||
Interest
expense, net | (33,487 | ) | (35,297 | ) | 1,810 | (102,469 | ) | (104,826 | ) | 2,357 | ||||||||
Impairment of
investment | (19,741 | ) | — | (19,741 | ) | (19,741 | ) | — | (19,741 | ) | ||||||||
Other income (expense), net | 580 | (510 | ) | 1,090 | 55 | (1,923 | ) | 1,978 | ||||||||||
Income
tax benefit (expense) | (2,508 | ) | (7,477 | ) | 4,969 | (22,078 | ) | 11,784 | (33,862 | ) | ||||||||
Income from
continuing operations | 15,395 | 21,801 | (6,406 | ) | 140,450 | 187,945 | (47,495 | ) | ||||||||||
Net
(loss) from discontinued operations | — | (857 | ) | 857 | — | (5,627 | ) | 5,627 | ||||||||||
Net
income | 15,395 | 20,944 | (5,549 | ) | 140,450 | 182,318 | (41,868 | ) | ||||||||||
Net income attributable
to noncontrolling interest | (3,655 | ) | (3,994 | ) | 339 | (10,319 | ) | (10,447 | ) | 128 | ||||||||
Net income
available for common stock | $ | 11,740 | $ | 16,950 | $ | (5,210 | ) | $ | 130,131 | $ | 171,871 | $ | (41,740 | ) |
(a) | In
2019, we changed our measure of segment performance to adjusted operating income, which impacted our segment disclosures for all periods presented. See Note 3 of the Notes to Condensed Consolidated Financial Statements for additional information. |
• | Cooling degree days for the three and nine months ended September 30,
2019 were 27% and 14% higher than normal compared to 9% and 29% higher than normal for the same periods in 2018. |
• | On September 17, 2019, South Dakota Electric completed construction on the final 94-mile segment of a 175-mile electric transmission line from Rapid City, South Dakota, to Stegall, Nebraska. The first 48-mile segment was placed in service on July 25, 2018, and the second 33-mile segment was placed in service on November 20, 2018. |
• | Colorado
Electric and Wyoming Electric set new all-time and summer peak loads: |
• | On July 19, 2019, Colorado Electric set a new peak load of 422 MW, exceeding the previous peak of 413 MW set in June 2018. |
• | On July 19, 2019, Wyoming Electric set a new peak load of 265 MW, exceeding the previous peak of 254 MW set in July 2018. |
• | South Dakota Electric and Wyoming Electric received approvals for the Renewable Ready Service Tariffs and related jointly-filed CPCN to construct the $57 million, 40 MW Corriedale Wind Energy Project. The wind project will be jointly owned by the two electric utilities to deliver renewable energy for large commercial, industrial and governmental agency customers. The project is expected to be in service by the end of 2020. In September 2019, the customer
subscription period was completed with customer interest fulfilling the 40 MW of available energy. On November 1, 2019, South Dakota Electric filed with the SDPUC an amendment seeking approval to increase the generating capacity under the tariff for the South Dakota portion by 12.5 MW to a total of 32.5 MW. |
• | Heating degree days for the three and nine months ended September 30,
2019 were 62% lower and 7% higher than normal, compared to 27% lower and 0% higher than normal for the same periods in 2018. |
• | Regulatory activity: |
◦ | On October
29, 2019, Nebraska Gas received approval from the NPSC to merge its two gas distribution companies in Nebraska. A rate review is expected to be filed by mid-year 2020 to consolidate the rates, tariffs and services of its two existing gas distribution companies. |
◦ | On June 3, 2019, Wyoming Gas filed a rate review application with the WSPC to consolidate the rates, tariffs and services of its four existing gas distribution territories in Wyoming. The rate review requests $16 million in new revenue to recover investments in safety, reliability and system integrity. Wyoming Gas is also requesting a new rider mechanism to recover future safety
and integrity investments in its system. A settlement was recently reached with the intervening parties in the rate review filing and filed with the WPSC on November 1, 2019. The stipulation and agreement are subject to review and approval by the WPSC, with a decision expected by the end of 2019. See Note 5 of the Notes to Condensed Consolidated Financial Statements for additional details. |
◦ | On February 1, 2019, Colorado Gas filed a rate review with the CPUC requesting approval to consolidate rates, tariffs and services of its two existing gas distribution territories in Colorado. The rate
review requests $2.5 million in new revenue to recover investments in safety, reliability and system integrity. Colorado Gas is also requesting a new rider mechanism to recover future safety and integrity investments in its system. A decision from the CPUC is expected by March 2020. |
• | On May 10, 2019, Wyoming Gas commenced construction on the $54 million, 35-mile Natural Bridge pipeline project to enhance supply reliability and delivery capacity for customers in central Wyoming. The new 12-inch steel pipeline will interconnect from a supply point near Douglas, Wyoming, to existing facilities near Casper, Wyoming. Construction of the pipeline
is nearly complete and the project is expected to be in service by the end of 2019, with the associated investment included in the Wyoming Gas rate review filed on June 3, 2019. |
• | On August 2, 2019 Black Hills Wyoming and Wyoming Electric jointly filed a request with FERC for approval of a new 60 MW PPA. If approved, Black Hills Wyoming will continue to deliver 60 MW of energy to Wyoming Electric from its Wygen I power plant starting January
1, 2023, and for 20 additional years. A decision from FERC is pending. |
• | On March 11, 2019, Black Hills Electric Generation commenced construction on the $71 million, 60 MW Busch Ranch II Wind Farm. The project is expected to be fully in service by mid-November 2019. |
• | In
October, negotiations were completed for the price reopener in the contract with Wyodak Plant. The new price was reset at $17.94 per ton effective July 1, 2019, compared to the prior contract price of $18.25 per ton. |
• | On
October 15, 2019, Moody’s affirmed South Dakota Electric’s credit rating at A1. |
• | On October 3, 2019, we completed a public debt offering of $700 million in senior unsecured notes. Proceeds were used to repay the $400 million Corporate term loan due June 17, 2021, retire the $200 million 5.875% senior notes due July 15, 2020 and repay a portion of short-term debt. |
• | During
the nine months ended September 30, 2019, we issued a total of 1,328,332 shares of common stock under the ATM equity offering program for net proceeds of $99 million. |
• | On August 29, 2019, Fitch affirmed our BBB+ rating and maintained a Stable outlook. |
• | On
June 17, 2019, we amended our Corporate term loan due July 30, 2020. This amendment increased total commitments to $400 million from $300 million and extended the term through June 17, 2021 on substantially similar terms and covenants. The net proceeds were used to pay down short-term debt. Proceeds from the October 3, 2019 debt transaction were used to repay this term loan. |
• | On April 30, 2019, S&P affirmed South Dakota Electric’s credit rating
at A. |
• | On February 28, 2019, S&P affirmed our BBB+ rating and maintained a Stable outlook. |
Three
Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||
(in thousands) | ||||||||||||||||||
Revenue | $ | 191,384 | $ | 184,790 | $ | 6,594 | $ | 540,665 | $ | 531,961 | $ | 8,704 | ||||||
Total
fuel and purchased power | 71,593 | 74,638 | (3,045 | ) | 207,004 | 209,317 | (2,313 | ) | ||||||||||
Gross
margin (non-GAAP) | 119,791 | 110,152 | 9,639 | 333,661 | 322,644 | 11,017 | ||||||||||||
Operations
and maintenance | 47,172 | 45,307 | 1,865 | 143,049 | 135,501 | 7,548 | ||||||||||||
Depreciation
and amortization | 21,966 | 21,453 | 513 | 65,393 | 64,070 | 1,323 | ||||||||||||
Total
operating expenses | 69,138 | 66,760 | 2,378 | 208,442 | 199,571 | 8,871 | ||||||||||||
Adjusted
operating income (a) | $ | 50,653 | $ | 43,392 | $ | 7,261 | $ | 125,219 | $ | 123,073 | $ | 2,146 |
(a) | Due
to the changes in our segment disclosures discussed in Note 3 of the Notes to Condensed Consolidated Financial Statements, Electric Utilities’ Adjusted operating income was revised for the three and nine months ended September 30, 2018, which resulted in an increase of $1.6 million and $4.8 million, respectively. |
(in millions) | |||
Prior year Wyoming Electric PCA Stipulation settlement | $ | 3.4 | |
Weather | 1.8 | ||
Increased
industrial demand | 1.7 | ||
Reduction in power capacity charges | 1.7 | ||
Rider recovery | 1.3 | ||
Other | (0.3 | ) | |
Total increase in Gross margin (non-GAAP) | $ | 9.6 |
(in millions) | |||
Reduction in power capacity charges | $ | 4.9 | |
Prior
year Wyoming Electric PCA Stipulation settlement | 3.7 | ||
Rider recovery | 2.0 | ||
Decreased residential customer usage | (0.9 | ) | |
Decreased commercial and industrial demand | (0.2 | ) | |
Weather | (0.1 | ) | |
Other | 1.6 | ||
Total
increase in Gross margin (non-GAAP) | $ | 11.0 |
Electric
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, | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Residential | $ | 58,919 | $ | 58,122 | $ | 162,257 | $ | 163,979 | 384,735 | 372,623 | 1,075,394 | 1,084,531 | ||||||||||
Commercial | 65,732 | 65,794 | 186,434 | 192,680 | 560,547 | 550,791 | 1,556,449 | 1,560,911 | ||||||||||||||
Industrial | 33,937 | 31,939 | 98,074 | 93,959 | 462,809 | 429,133 | 1,335,260 | 1,248,438 | ||||||||||||||
Municipal | 4,792 | 4,582 | 13,184 | 13,389 | 46,106 | 43,972 | 121,025 | 122,953 | ||||||||||||||
Subtotal
Retail Revenue - Electric | 163,380 | 160,437 | 459,949 | 464,007 | 1,454,197 | 1,396,519 | 4,088,128 | 4,016,833 | ||||||||||||||
Contract
Wholesale | 8,211 | 8,256 | 23,335 | 25,497 | 229,369 | 221,327 | 646,611 | 677,163 | ||||||||||||||
Off-system/Power
Marketing Wholesale | 6,452 | 9,059 | 16,592 | 18,142 | 160,357 | 206,791 | 436,298 | 514,686 | ||||||||||||||
Other | 13,341 | 7,038 | 40,789 | 24,315 | — | — | — | — | ||||||||||||||
Total
Revenue and Energy Sold | 191,384 | 184,790 | 540,665 | 531,961 | 1,843,923 | 1,824,637 | 5,171,037 | 5,208,682 | ||||||||||||||
Other
Uses, Losses or Generation, net | — | — | — | — | 112,172 | 121,478 | 299,038 | 337,939 | ||||||||||||||
Total
Revenue and Energy | 191,384 | 184,790 | 540,665 | 531,961 | 1,956,095 | 1,946,115 | 5,470,075 | 5,546,621 | ||||||||||||||
Less
cost of fuel and purchased power (a) | 71,593 | 74,638 | 207,004 | 209,317 | ||||||||||||||||||
Gross
Margin (non-GAAP) (a) | $ | 119,791 | $ | 110,152 | $ | 333,661 | $ | 322,644 |
(a) | Due
to the changes in our segment disclosures discussed in Note 3 of the Notes to Condensed Consolidated Financial Statements, cost of fuel and purchased power was revised for the three and nine months ended September 30, 2018, which resulted in an increase of $1.6 million and $4.8 million, respectively. There were corresponding decreases to Gross margin for each period. |
Three
Months Ended September 30, | Electric Revenue (in thousands) | Gross Margin (non-GAAP) (in thousands) | Quantities Sold (MWh) (a) | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||
Colorado
Electric (b) | $ | 70,771 | $ | 68,052 | $ | 41,916 | $ | 38,449 | 634,098 | 610,079 | |||||||||
South
Dakota Electric | 77,022 | 78,067 | 55,217 | 52,860 | 835,725 | 874,962 | |||||||||||||
Wyoming
Electric | 43,591 | 38,671 | 22,658 | 18,843 | 486,272 | 461,074 | |||||||||||||
Total
Electric Revenue, Gross Margin (non-GAAP), and Quantities Sold | $ | 191,384 | $ | 184,790 | $ | 119,791 | $ | 110,152 | 1,956,095 | 1,946,115 |
Nine
Months Ended September 30, | Electric Revenue (in thousands) | Gross Margin (non-GAAP) (in thousands) | Quantities Sold (MWh) (a) | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||
Colorado
Electric (b) | $ | 186,030 | $ | 188,937 | $ | 104,411 | $ | 105,997 | 1,611,126 | 1,639,607 | |||||||||
South
Dakota Electric | 225,309 | 222,558 | 162,390 | 154,158 | 2,438,366 | 2,541,082 | |||||||||||||
Wyoming
Electric | 129,326 | 120,466 | 66,860 | 62,489 | 1,420,583 | 1,365,932 | |||||||||||||
Total
Electric Revenue, Gross Margin (non-GAAP), and Quantities Sold | $ | 540,665 | $ | 531,961 | $ | 333,661 | $ | 322,644 | 5,470,075 | 5,546,621 |
(a) | Total
MWh for 2019 includes Other Uses, Losses or Generation, net, which are approximately 6%, 5%, and 6% for Colorado Electric, South Dakota Electric, and Wyoming Electric, respectively. |
(b) | Due to the changes in our segment disclosures discussed in Note 3 of the Notes to Condensed Consolidated Financial Statements, Gross margin was revised for the three and nine months ended September 30, 2018, which resulted in a decrease of $(1.6) million and $(4.8)
million, respectively. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
Quantities Generated and Purchased (MWh) | 2019 | 2018 | 2019 | 2018 | ||||
Coal-fired | 564,220 | 608,417 | 1,621,355 | 1,772,750 | ||||
Natural
Gas and Oil | 234,366 | 199,351 | 445,498 | 345,978 | ||||
Wind | 55,407 | 54,450 | 167,331 | 196,932 | ||||
Total
Generated | 853,993 | 862,218 | 2,234,184 | 2,315,660 | ||||
Purchased | 1,102,102 | 1,083,897 | 3,235,891 | 3,230,961 | ||||
Total
Generated and Purchased | 1,956,095 | 1,946,115 | 5,470,075 | 5,546,621 |
Three
Months Ended September 30, | Nine Months Ended September 30, | |||||||
Quantities Generated and Purchased (MWh) | 2019 | 2018 | 2019 | 2018 | ||||
Generated: | ||||||||
Colorado
Electric | 149,509 | 163,276 | 341,925 | 388,251 | ||||
South Dakota Electric | 489,042 | 469,680 | 1,262,336 | 1,293,713 | ||||
Wyoming
Electric | 215,442 | 229,262 | 629,923 | 633,696 | ||||
Total Generated | 853,993 | 862,218 | 2,234,184 | 2,315,660 | ||||
Purchased: | ||||||||
Colorado
Electric | 484,589 | 446,803 | 1,269,201 | 1,251,356 | ||||
South Dakota Electric | 346,683 | 405,282 | 1,176,030 | 1,247,369 | ||||
Wyoming
Electric | 270,830 | 231,812 | 790,660 | 732,236 | ||||
Total Purchased | 1,102,102 | 1,083,897 | 3,235,891 | 3,230,961 | ||||
Total
Generated and Purchased | 1,956,095 | 1,946,115 | 5,470,075 | 5,546,621 |
Three
Months Ended September 30, | |||||||||||||
Degree Days | 2019 | 2018 | |||||||||||
Actual | Variance from Normal | Actual
Variance to Prior Year | Actual | Variance from Normal | |||||||||
Heating Degree Days: | |||||||||||||
Colorado
Electric | 4 | (96 | )% | (89)% | 35 | (64 | )% | ||||||
South Dakota Electric | 175 | (22 | )% | (26)% | 236 | 5 | % | ||||||
Wyoming
Electric | 120 | (77 | )% | (52)% | 248 | (19 | )% | ||||||
Combined (a) | 86 | (36 | )% | (41)% | 147 | (20 | )% | ||||||
Cooling
Degree Days: | |||||||||||||
Colorado Electric | 1,079 | 58 | % | 19% | 910 | 33 | % | ||||||
South
Dakota Electric | 366 | (31 | )% | 3% | 356 | (33 | )% | ||||||
Wyoming Electric | 433 | 45 | % | 32% | 328 | 10 | % | ||||||
Combined (a)
| 705 | 27 | % | 17% | 603 | 9 | % |
Nine
Months Ended September 30, | |||||||||||||
2019 | 2018 | ||||||||||||
Heating Degree Days | Actual | Variance from Normal | Actual
Variance to Prior Year | Actual | Variance from Normal | ||||||||
Colorado
Electric | 3,156 | (6 | )% | 9% | 2,901 | (14 | )% | ||||||
South Dakota Electric | 5,370 | 20 | % | 8% | 4,972 | 11 | % | ||||||
Wyoming
Electric | 4,677 | 5 | % | 9% | 4,285 | (9 | )% | ||||||
Combined (a) | 4,198 | 6 | % | 8% | 3,888 | (3 | )% | ||||||
Cooling
Degree Days: | |||||||||||||
Colorado Electric | 1,226 | 37 | % | (13)% | 1,404 | 57 | % | ||||||
South
Dakota Electric | 404 | (36 | )% | (17)% | 488 | (23 | )% | ||||||
Wyoming Electric | 462 | 33 | % | 7% | 430 | 24 | % | ||||||
Combined (a) | 791 | 14 | % | (12)% | 895 | 29 | % |
(a) | Combined
actuals are calculated based on the weighted average number of total customers by state. |
Electric Utilities Power Plant Availability | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2019 | 2018 | 2019 | 2018 | |||||
Coal-fired
plants (a) | 94.6 | % | 95.7 | % | 90.0 | % | 94.0 | % |
Natural gas-fired plants and Other plants (b) | 89.6 | % | 97.0 | % | 89.8 | % | 97.2 | % |
Wind | 93.7 | % | 96.9 | % | 95.0 | % | 96.9 | % |
Total
availability | 91.5 | % | 96.6 | % | 90.3 | % | 96.1 | % |
Wind
capacity factor | 33.8 | % | 33.1 | % | 37.1 | % | 41.8 | % |
(a) | 2019 included planned outages at Neil Simpson II and Wygen III and unplanned outages at Wyodak Plant and Wygen III. |
(b) | 2019
included planned outages at Neil Simpson CT and Lange CT. |
Three
Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||
(in thousands) | ||||||||||||||||||
Revenue: | ||||||||||||||||||
Natural
gas - regulated | $ | 117,549 | $ | 117,070 | $ | 479 | $ | 651,366 | $ | 648,550 | $ | 2,816 | ||||||
Other
- non-regulated services | 13,195 | 14,606 | (1,411 | ) | 55,927 | 58,090 | (2,163 | ) | ||||||||||
Total
revenue | 130,744 | 131,676 | (932 | ) | 707,293 | 706,640 | 653 | |||||||||||
Cost
of sales: | ||||||||||||||||||
Natural gas - regulated | 28,154 | 30,612 | (2,458 | ) | 280,312 | 298,149 | (17,837 | ) | ||||||||||
Other
- non-regulated services | 4,870 | 5,514 | (644 | ) | 16,975 | 15,716 | 1,259 | |||||||||||
Total
cost of sales | 33,024 | 36,126 | (3,102 | ) | 297,287 | 313,865 | (16,578 | ) | ||||||||||
Gross
margin (non-GAAP) | 97,720 | 95,550 | 2,170 | 410,006 | 392,775 | 17,231 | ||||||||||||
Operations
and maintenance | 70,170 | 69,746 | 424 | 225,239 | 212,319 | 12,920 | ||||||||||||
Depreciation
and amortization | 22,814 | 21,564 | 1,250 | 68,160 | 64,288 | 3,872 | ||||||||||||
Total
operating expenses | 92,984 | 91,310 | 1,674 | 293,399 | 276,607 | 16,792 | ||||||||||||
Adjusted
operating income | $ | 4,736 | $ | 4,240 | $ | 496 | $ | 116,607 | $ | 116,168 | $ | 439 |
(in
millions) | |||
New rates | $ | 3.0 | |
Customer growth - distribution | 0.8 | ||
Increased transport and transmission | 0.7 | ||
Weather (a) | (3.4 | ) | |
Other | 1.1 | ||
Total
increase in Gross margin (non-GAAP) | $ | 2.2 |
(in millions) | |||
New rates | $ | 15.5 | |
Customer
growth - distribution | 3.7 | ||
Increased transport and transmission | 1.8 | ||
Decreased mark-to-market on non-utility natural gas commodity contracts | (2.7 | ) | |
Excess deferred taxes returned to customers | (2.5 | ) | |
Weather | (0.6 | ) | |
Other | 2.0 | ||
Total
increase in Gross margin (non-GAAP) | $ | 17.2 |
Gas Revenue (in thousands) | Gross Margin (non-GAAP) (in
thousands) | Gas Utilities Quantities Sold & Transported (Dth) | |||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||
Residential | $ | 57,244 | $ | 58,221 | $ | 43,441 | $ | 42,598 | 3,599,549 | 3,708,196 | |||||||||
Commercial | 19,629 | 19,639 | 11,589 | 10,880 | 2,298,919 | 2,278,304 | |||||||||||||
Industrial | 8,770 | 8,258 | 2,493 | 2,028 | 2,960,930 | 2,304,098 | |||||||||||||
Other
(a) | 2,499 | 487 | 2,499 | 487 | — | — | |||||||||||||
Total
Distribution | 88,142 | 86,605 | 60,022 | 55,993 | 8,859,398 | 8,290,598 | |||||||||||||
Transportation
and Transmission | 29,407 | 30,465 | 29,373 | 30,465 | 31,538,815 | 29,808,567 | |||||||||||||
Total
Regulated | 117,549 | 117,070 | 89,395 | 86,458 | 40,398,213 | 38,099,165 | |||||||||||||
Non-regulated
Services | 13,195 | 14,606 | 8,325 | 9,092 | |||||||||||||||
Total
Gas Revenue & Gross Margin (non-GAAP) | $ | 130,744 | $ | 131,676 | $ | 97,720 | $ | 95,550 |
Gas
Revenue (in thousands) | Gross Margin (non-GAAP) (in thousands) | Gas Utilities Quantities Sold & Transported (Dth) | |||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | Nine
Months Ended September 30, | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||
Residential | $ | 383,466 | $ | 383,972 | $ | 201,168 | $ | 192,072 | 44,356,725 | 42,642,021 | |||||||||
Commercial | 146,752 | 148,675 | 61,673 | 57,890 | 21,484,646 | 20,842,996 | |||||||||||||
Industrial | 18,764 | 20,805 | 5,830 | 5,341 | 5,141,399 | 5,235,417 | |||||||||||||
Other
(a) | (968 | ) | (6,789 | ) | (968 | ) | (6,789 | ) | — | — | |||||||||
Total
Distribution | 548,014 | 546,663 | 267,703 | 248,514 | 70,982,770 | 68,720,434 | |||||||||||||
Transportation
and Transmission | 103,352 | 101,887 | 103,351 | 101,887 | 110,622,285 | 107,388,321 | |||||||||||||
Total
Regulated | 651,366 | 648,550 | 371,054 | 350,401 | 181,605,055 | 176,108,755 | |||||||||||||
Non-regulated
Services | 55,927 | 58,090 | 38,952 | 42,374 | |||||||||||||||
Total
Gas Revenue & Gross Margin | $ | 707,293 | $ | 706,640 | $ | 410,006 | $ | 392,775 |
(a) | Other
revenue reflects the impact of revenue reserved in accordance with the TCJA. |
Revenue (in thousands) | Gross
Margin (non-GAAP) (in thousands) | Gas Utilities Quantities Sold & Transported (Dth) | |||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Three Months
Ended September 30, | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||
Arkansas | $ | 21,387 | $ | 18,743 | $ | 16,249 | $ | 13,415 | 4,094,454 | 4,022,089 | |||||||||
Colorado | 22,632 | 22,362 | 15,667 | 15,210 | 3,806,360 | 2,893,029 | |||||||||||||
Iowa | 16,381 | 16,982 | 13,135 | 12,556 | 5,686,772 | 5,595,205 | |||||||||||||
Kansas | 19,013 | 18,497 | 12,309 | 11,129 | 7,602,758 | 6,164,821 | |||||||||||||
Nebraska | 35,715 | 40,553 | 28,046 | 31,264 | 13,999,302 | 13,831,306 | |||||||||||||
Wyoming | 15,616 | 14,539 | 12,314 | 11,976 | 5,208,567 | 5,592,715 | |||||||||||||
Total
Gas Revenue & Gross Margin (non-GAAP) | $ | 130,744 | $ | 131,676 | $ | 97,720 | $ | 95,550 | 40,398,213 | 38,099,165 |
Revenue (in
thousands) | Gross Margin (non-GAAP) (in thousands) | Gas Utilities Quantities Sold & Transported (Dth) | |||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||
Arkansas | $ | 127,014 | $ | 116,226 | $ | 79,148 | $ | 65,803 | 21,061,567 | 21,183,322 | |||||||||
Colorado | 135,816 | 125,898 | 73,022 | 66,917 | 23,050,638 | 19,301,834 | |||||||||||||
Iowa | 105,736 | 111,968 | 50,773 | 49,630 | 28,834,731 | 28,527,522 | |||||||||||||
Kansas | 77,609 | 81,880 | 42,385 | 40,896 | 24,336,744 | 23,391,905 | |||||||||||||
Nebraska | 183,827 | 196,307 | 111,828 | 117,925 | 57,815,316 | 58,223,856 | |||||||||||||
Wyoming | 77,291 | 74,361 | 52,850 | 51,604 | 26,506,059 | 25,480,316 | |||||||||||||
Total
Gas Revenue & Gross Margin (non-GAAP) | $ | 707,293 | $ | 706,640 | $ | 410,006 | $ | 392,775 | 181,605,055 | 176,108,755 |
Three
Months Ended September 30, | |||||||||
2019 | 2018 | ||||||||
Heating Degree Days | Actual | Variance from Normal | Actual
Variance to Prior Year | Actual | Variance from Normal | ||||
Arkansas (a) | — | (100)% | (100)% | 12 | (72)% | ||||
Colorado | 68 | (68)% | (38)% | 109 | (49)% | ||||
Iowa | 43 | (69)% | (66)% | 128 | (7)% | ||||
Kansas
(a) | — | (101)% | (100)% | 54 | (2)% | ||||
Nebraska | 22 | (80)% | (78)% | 101 | (7)% | ||||
Wyoming | 183 | (37)% | (22)% | 236 | (23)% | ||||
Combined
(b) | 53 | (62)% | (51)% | 109 | (27)% |
Nine
Months Ended September 30, | |||||||||
2019 | 2018 | ||||||||
Heating Degree Days: | Actual | Variance from Normal | Actual
Variance to Prior Year | Actual | Variance from Normal | ||||
Arkansas (a) | 2,347 | (5)% | (5)% | 2,460 | (1)% | ||||
Colorado | 4,115 | —% | 16% | 3,548 | (14)% | ||||
Iowa | 4,611 | 10% | 3% | 4,460 | 6% | ||||
Kansas
(a) | 3,204 | 8% | 6% | 3,032 | 2% | ||||
Nebraska | 4,169 | 10% | 4% | 4,016 | 6% | ||||
Wyoming | 5,093 | 9% | 12% | 4,552 | (4)% | ||||
Combined
(b) | 4,297 | 7% | 7% | 4,008 | —% |
(a) | Arkansas and Kansas
have weather normalization mechanisms that mitigate the weather impact on gross margins. |
(b) | The combined heating degree days are calculated based on a weighted average of total customers by state excluding Kansas due to its weather normalization mechanism. Arkansas is excluded based on the weather normalization mechanism in effect from November through April. |
Three
Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||
(in thousands) | ||||||||||||||||||
Revenue | $ | 25,811 | $ | 24,491 | $ | 1,320 | $ | 75,764 | $ | 71,173 | $ | 4,591 | ||||||
Operations
and maintenance | 9,229 | 7,434 | 1,795 | 27,750 | 25,520 | 2,230 | ||||||||||||
Depreciation
and amortization | 4,760 | 3,978 | 782 | 14,069 | 11,922 | 2,147 | ||||||||||||
Total
operating expense | 13,989 | 11,412 | 2,577 | 41,819 | 37,442 | 4,377 | ||||||||||||
Adjusted
operating income (a) | $ | 11,822 | $ | 13,079 | $ | (1,257 | ) | $ | 33,945 | $ | 33,731 | $ | 214 |
(a) | Due
to the changes in our segment disclosures discussed in Note 3 of the Notes to Condensed Consolidated Financial Statements, Power Generation Adjusted operating income was revised for the three and nine months ended September 30, 2018, which resulted in a decrease of $(1.4) million and $(4.4) million, respectively. |
Three
Months Ended September 30, | Nine Months Ended September 30, | ||||||||
2019 | 2018 | 2019 | 2018 | ||||||
Quantities Sold, Generated and Purchased (MWh) (a) | |||||||||
Sold | |||||||||
Black
Hills Colorado IPP (b) | 275,867 | 304,102 | 692,156 | 745,365 | |||||
Black Hills Wyoming (c) | 162,668 | 160,011 | 476,430 | 470,072 | |||||
Black
Hills Electric Generation (d) | 30,912 | — | 112,461 | — | |||||
Total Sold | 469,447 | 464,113 | 1,281,047 | 1,215,437 | |||||
Generated | |||||||||
Black
Hills Colorado IPP (b) | 275,867 | 304,102 | 692,156 | 745,365 | |||||
Black Hills Wyoming (c) | 142,219 | 144,476 | 407,001 | 407,324 | |||||
Black
Hills Electric Generation (d) | 30,912 | — | 112,461 | — | |||||
Total Generated | 448,998 | 448,578 | 1,211,618 | 1,152,689 | |||||
Purchased | |||||||||
Black
Hills Wyoming (c) | 16,865 | 16,685 | 56,205 | 65,724 | |||||
Total Purchased | 16,865 | 16,685 | 56,205 | 65,724 |
(a) | Company
uses and losses are not included in the quantities sold, generated, and purchased. |
(b) | Decrease from the prior year is a result of the impact of Colorado Electric’s wind generation replacing natural-gas generation. |
(c) | Under the 20-year economy energy PPA with the City of Gillette effective September 2014, Black Hills Wyoming purchases energy on behalf of the City of Gillette and sells that energy to the City of Gillette. MWh sold may not equal MWh generated and purchased due to a dispatch agreement Black Hills Wyoming
has with South Dakota Electric to cover energy imbalances. |
(d) | Increase from prior year is driven by Black Hills Electric Generation’s acquisition of new wind assets. |
Three
Months Ended September 30, | Nine Months Ended September 30, | ||||||||
2019 | 2018 | 2019 | 2018 | ||||||
Contracted power plant fleet availability: | |||||||||
Coal-fired
plant | 98.0 | % | 97.9 | % | 95.2 | % | 93.9 | % | |
Natural gas-fired plants (a) | 97.6 | % | 99.3 | % | 98.4 | % | 99.4 | % | |
Wind
(b) | 81.9 | % | N/A | 93.4 | % | N/A | |||
Total availability | 93.6 | % | 98.9 | % | 96.5 | % | 98.0 | % | |
Wind
capacity factor (b) | 15.0 | % | N/A | 22.1 | % | N/A |
(a) | 2019
included a planned outage at Pueblo Airport Generating Station. |
(b) | Change from the prior year is driven by Black Hills Electric Generation’s acquisition of new wind assets. |
Three
Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||
(in thousands) | ||||||||||||||||||
Revenue | $ | 15,552 | $ | 17,301 | $ | (1,749 | ) | $ | 45,026 | $ | 51,328 | $ | (6,302 | ) | ||||
Operations
and maintenance | 9,900 | 10,761 | (861 | ) | 28,988 | 32,807 | (3,819 | ) | ||||||||||
Depreciation,
depletion and amortization | 2,278 | 1,989 | 289 | 6,687 | 5,874 | 813 | ||||||||||||
Total
operating expenses | 12,178 | 12,750 | (572 | ) | 35,675 | 38,681 | (3,006 | ) | ||||||||||
Adjusted
operating income | $ | 3,374 | $ | 4,551 | $ | (1,177 | ) | $ | 9,351 | $ | 12,647 | $ | (3,296 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Tons
of coal sold | 969 | 1,078 | 2,720 | 3,119 | |||||||||
Cubic yards of overburden moved | 2,341 | 2,361 | 6,380 | 6,763 | |||||||||
Revenue
per ton | $ | 15.47 | $ | 15.54 | $ | 15.90 | $ | 15.92 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||
(in
thousands) | ||||||||||||||||||
Adjusted operating income (loss) (a) | $ | (34 | ) | $ | (178 | ) | $ | 144 | $ | (439 | ) | $ | (2,709 | ) | $ | 2,270 |
(a) | Due
to the changes in our segment disclosures as discussed in Note 3 of the Notes to Condensed Consolidated Financial Statements, Corporate and Other Adjusted operating income (loss) was revised for the three and nine months ended September 30, 2018, which resulted in a decrease of $(0.2) million and $(0.4) million, respectively. |
Cash provided by (used in): | 2019 | 2018 | Variance | ||||||
Operating activities | $ | 386,075 | $ | 378,722 | $ | 7,353 | |||
Investing
activities | $ | (593,272 | ) | $ | (281,771 | ) | $ | (311,501 | ) |
Financing activities | $ | 199,827 | $ | (101,949 | ) | $ | 301,776 |
• | Cash earnings (income from continuing operations plus non-cash adjustments) were $19 million higher for the nine months ended September 30, 2019 compared to the same period in the prior year; |
• | Net
cash inflows from changes in operating assets and liabilities were $28 million for the nine months ended September 30, 2019, compared to net cash inflows of $42 million in the same period in the prior year. This $14 million decrease was primarily due to: |
◦ | Cash inflows increased by approximately $48 million primarily as a result of higher collections of accounts receivable
for the nine months ended September 30, 2019 compared to the same period in the prior year; |
◦ | Cash outflows increased by approximately $3 million as a result of decreases in accounts payable and accrued liabilities driven by higher employee costs and other working capital requirements; and |
◦ | Cash
inflows decreased by approximately $66 million as a result of changes in the timing of recovery from fuel cost adjustments as well as revenue reserved in the prior year due to the TCJA tax rate change that has subsequently been returned to customers. |
• | Capital expenditures of approximately $593 million for the nine months ended September 30, 2019 compared to $278 million for the same period in the prior year. Higher current year expenditures are driven by higher programmatic safety, reliability and integrity spending at our Gas Utilities and Electric Utilities segments, the 35-mile Natural Bridge
pipeline project at our Gas Utilities segment, the Busch Ranch II wind project at our Power Generation segment and construction of the final segment of the 175-mile transmission line from Rapid City, South Dakota, to Stegall, Nebraska at our Electric Utilities segment. |
• | A $24 million investment made in the prior year partially offset by an $18 million change in net cash provided by investing activities from discontinued operations primarily due to the prior year sale of assets held for sale. |
• | We
amended our Corporate term loan due July 30, 2020, which increased our debt to $400 million from $300 million; |
• | Current year issuance of common stock for net proceeds of $99 million through our ATM equity offering program; |
• | Current year net short-term borrowings of $109 million driven by increased capital expenditures; |
• | In
the prior year, $99 million of net proceeds from the August 17, 2018 debt transaction was used to repay short-term debt; |
• | $15 million of higher current year dividend payments; and |
• | Payments for other financing activities decreased by $8.4 million, which was primarily driven by prior year financing costs associated with the July
30, 2018 and August 17, 2018 debt transactions. |
Current | Short-term
borrowings at | Letters of Credit at | Available Capacity at | ||||||||||
Credit Facility | Expiration | Capacity | |||||||||||
Revolving Credit Facility and CP Program | $ | 750 | $ | 295 | $ | 18 | $ | 437 |
For the Nine Months Ended September 30, 2019 | |||
Maximum amount outstanding - short-term borrowing (based
on daily outstanding balances) | $ | 295 | |
Average amount outstanding - short-term borrowing (based on daily outstanding balances) | $ | 171 | |
Weighted average interest rates - short-term borrowing | 2.59 | % |
• | We
issued a total of 1,328,332 shares of common stock under the ATM equity offering program for proceeds of $99 million, net of $1.0 million in commissions. As of September 30, 2019, there were no shares that were sold, but not settled. |
• | On June 17, 2019, we amended our Corporate term loan due July 30, 2020. This amendment increased total commitments to $400 million from $300 million, extended the term through June 17, 2021 and continues to have substantially similar terms and covenants as the amended
and restated Revolving Credit Facility. The net proceeds were used to pay down short-term debt. Proceeds from the October 3, 2019 debt transaction were used to repay this term loan. |
• | Short-term borrowings from our CP Program and Revolver. |
Rating Agency | Senior Unsecured Rating | Outlook |
S&P
(a) | BBB+ | Stable |
Moody’s (b) | Baa2 | Stable |
Fitch (c) | BBB+ | Stable |
(a) | On
February 28, 2019, S&P affirmed our BBB+ rating and maintained a Stable outlook. |
(b) | On December 12, 2018, Moody’s affirmed our Baa2 rating and maintained a Stable outlook. |
(c) | On August 29, 2019, Fitch affirmed our BBB+ rating and maintained a Stable outlook. |
Rating Agency | Senior Secured Rating |
S&P (a) | A |
Moody’s
(b) | A1 |
Fitch (c) | A |
(a) | On April 30, 2019, S&P affirmed A rating. |
(b) | On October
15, 2019, Moody’s affirmed A1 rating. |
(c) | On August 29, 2019, Fitch affirmed A rating. |
Actual | Planned | Planned | Planned | Planned | Planned | |||||||||||||
Capital
Expenditures by Segment | Nine Months Ended September 30, 2019 (a) | 2019 (b) | 2020 | 2021 | 2022 | 2023 | ||||||||||||
(in millions) | ||||||||||||||||||
Electric
Utilities (c) | $ | 147 | $ | 215 | $ | 229 | $ | 203 | $ | 170 | $ | 137 | ||||||
Gas
Utilities (c) | 367 | 490 | 361 | 297 | 274 | 303 | ||||||||||||
Power
Generation | 79 | 84 | 7 | 9 | 11 | 6 | ||||||||||||
Mining | 6 | 8 | 8 | 12 | 9 | 9 | ||||||||||||
Corporate
and Other | 15 | 23 | 18 | 22 | 11 | 12 | ||||||||||||
$ | 614 | $ | 820 | $ | 623 | $ | 543 | $ | 475 | $ | 467 |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 1. | Legal Proceedings |
ITEM 4. | Mine Safety Disclosures |
ITEM 6. | Exhibits |
Exhibit Number | Description |
Exhibit
3.1* | |
Exhibit 3.2* | |
Exhibit
4.1* | |
Exhibit 4.2* | |
Exhibit 4.3* | |
Exhibit 4.4* | |
Exhibit
10.1 | |
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) |
* | Previously filed as part of the filing indicated and incorporated by reference herein. |
/s/
Linden R. Evans | ||
Linden R. Evans, President and | ||
Chief Executive Officer | ||
Richard W. Kinzley, Senior Vice President and | ||
Chief Financial Officer | ||
Dated: |
This ‘10-Q’ Filing | Date | Other Filings | ||
---|---|---|---|---|
12/31/31 | ||||
5/31/30 | ||||
10/15/29 | ||||
6/30/24 | ||||
7/30/23 | ||||
1/1/23 | ||||
6/17/21 | ||||
7/30/20 | ||||
7/15/20 | ||||
1/1/20 | ||||
12/15/19 | ||||
12/1/19 | ||||
Filed on: | 11/5/19 | |||
11/1/19 | 3, 8-K | |||
10/31/19 | ||||
10/29/19 | 8-K, 8-K/A | |||
10/15/19 | ||||
10/3/19 | 8-K | |||
For Period end: | 9/30/19 | 424B2 | ||
9/17/19 | ||||
9/1/19 | ||||
8/29/19 | ||||
8/2/19 | ||||
7/19/19 | ||||
7/1/19 | ||||
6/30/19 | 10-Q | |||
6/26/19 | ||||
6/25/19 | 4 | |||
6/17/19 | 8-K | |||
6/13/19 | ||||
6/3/19 | ||||
5/10/19 | ||||
4/30/19 | 8-K | |||
3/31/19 | 10-Q | |||
3/11/19 | 4, SC 13G/A | |||
2/28/19 | 4 | |||
2/1/19 | 5 | |||
1/1/19 | ||||
12/31/18 | 10-K, 11-K, 5, DEF 14A | |||
12/12/18 | ||||
11/20/18 | ||||
11/1/18 | 25-NSE, 8-K | |||
9/30/18 | 10-Q | |||
8/17/18 | 8-K | |||
7/30/18 | 8-K | |||
7/25/18 | ||||
6/30/18 | 10-Q | |||
3/31/18 | 10-Q | |||
1/1/18 | ||||
12/31/17 | 10-K, 11-K, 5 | |||
12/22/17 | ||||
11/1/17 | 4 | |||
8/4/17 | 10-Q, 424B5, 8-K, S-3ASR | |||
11/23/15 | 8-A12B, 8-K, CERTNYS | |||
1/1/12 | ||||
List all Filings |