Summary of Black Hills Corp. Q3 2025 Earnings Call

1Key Financial Results and Metrics

GAAP EPS: Reported at $0.34, including $0.10 of merger-related costs.

Adjusted EPS: $0.45 for Q3 2025, up from $0.35 in Q3 2024.

Year-to-Date EPS: GAAP EPS of $2.58 (including $0.11 of merger costs), adjusted EPS at $2.68, reflecting a 6.3% increase from the previous year.

Regulatory Contributions: New rates and rider recovery contributed $0.21 per share in Q3.

O&M Costs: Increased by $0.08 per share, primarily due to merger-related expenses, but reduced by $0.02 when excluding these costs.

2Strategic Updates and Business Highlights

Merger with NorthWestern Energy: Joint applications submitted for regulatory approval; expected to enhance scale and financial profile.

Capital Plan: $4.7 billion capital plan with $700 million annual investment focusing on safety and reliability.

Key Projects:

Ready Wyoming transmission expansion on track for completion by year-end.

Lange II generation project in South Dakota commenced construction.

Data Center Demand: Engaged with partners for over 3 gigawatts of demand, with significant contributions expected to EPS by 2028.

3Forward Guidance and Outlook

2025 Earnings Guidance: Reaffirmed adjusted EPS range of $4.00 to $4.20, representing a 5% growth at the midpoint over 2024.

Long-Term Growth: Anticipate achieving upper half of 4% to 6% long-term EPS growth target starting in 2026, supported by strong customer demand and capital investments.

4Bad News, Challenges, or Points of Concern

Weather Impact: Unfavorable weather conditions reduced earnings by $0.07 per share compared to the previous year.

O&M Cost Pressures: Continued increase in operating expenses due to merger-related costs and other factors.

Economic Conditions: While current conditions are stable, the company is monitoring potential economic weaknesses and impacts on service areas.

5Notable Q&A Insights

Data Center Strategy: Flexibility in serving data center demand through various models (utility-owned, contracted, market purchases) is crucial.

Merger Approval Concerns: Management remains optimistic about the merger approval process in Montana despite recent regulatory activity.

Fourth Quarter Outlook: No significant negative issues anticipated, but weather remains a key variable affecting earnings.

Coal Mine Asset: The company is keeping options open regarding its coal mine, acknowledging potential rare earth minerals but not viewing them as a significant monetization opportunity at this time. Overall, Black Hills Corp. reported a strong quarter with solid financial performance and strategic initiatives in place, while also navigating challenges related to weather and operating costs. The merger with NorthWestern Energy is positioned as a key growth driver moving forward.