Black Hills Corporation

Ladies and gentlemen, and welcome to the Black Hills Corporation fourth quarter and full year 2020 earnings conference call. My name is Gigi, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. Following the prepared remarks, there will be a question and answer session. If you would like to participate in this portion of the call, please press star followed by one at any time during the conference. If assistance is needed any time during the call, please press star followed by zero at and a coordinator will be happy to assist you. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to Mr. Jerome Nichols, Director of Investor Relations of Black Hills Corporation. Please proceed, sir.

Thank you, Gigi. Good morning, everyone. Welcome to Black Hills Corporation's fourth quarter and full year 2020 earnings conference calls. Leading our quarterly earnings discussion today are Lynn Evans, President and Chief Executive Officer, and Rich Kinsley, Senior Vice President and Chief Financial Officer. During our earnings discussion today, some of the comments we make may contain forward-looking statements as defined by the Securities and Exchange Commission, and there are a number of uncertainties inherent in such comments. Although we believe that our expectations and beliefs are based on reasonable assumptions, Actual results may differ materially. We direct you to our earnings release, slide two of the investor presentation on our website, and our most recent Form 10-K and Form 10-Q filed with Securities and Exchange Commission for a list of some of the factors that could cause future results to differ materially from our expectations. I will now turn the call over to Lynn Evans.

Thank you, Jerome. Good morning, everyone, and thank you for joining us today. As we look back at 2020, I couldn't be prouder of what our team has accomplished. Throughout an uncertain and disruptive year, I admired how the Black Hills Energy team rose to every challenge head on. I'm especially pleased how our team always kept their health and safety and our customers' health and safety at the forefront as we successfully executed our customer-focused utility strategy. all while delivering strong financial performance that exceeded our guidance. I believe most of us will look back on 2020 as a year of seemingly endless challenge, and yet it's these challenges that prove the character and resilience of an organization and make us stronger. Like those before us for the past 137 years at Black Hills, we adapted, we rallied together, and we worked hard, truly exemplifying our ready-to-serve commitment to and the incredible spirit within our team. The Black Hills Energy team once again delivered a long list of accomplishments for our stakeholders throughout 2020. Slides four through six highlight the success of consistently delivering on what we said we would do, what I like to refer to as delivering a high say-do ratio. Safety is our number one priority at Black Hills each and every day, and it's this priority and our genuine concern for our fellow coworkers, our customers, and our communities that gave us a solid foundation upon which to confront the pandemic and build a stronger future. For the seventh consecutive year, our safety culture produced an injury incident rate better than the utility average, demonstrating progress on our goal to become the safest utility in the industry. Our team, combined with our resilient infrastructure, advanced our reputation of delivering industry-leading reliability for our customers. As outages occurred, I was impressed throughout the year as my coworkers delivered a remarkable response, safely and efficiently restoring service with a ready-to-serve attitude and dedication. We produced strong fourth quarter and full-year financial results as the economies in our Midwestern states continued to improve. We are fortunate to operate in stable and growing territories where most of our communities remained open during the pandemic. As we said we would, we have provided greater clarity into our longer-term earnings outlook. We increased our 2021 guidance. We initiated 2022 guidance, and we announced long-term earnings and dividend growth targets. Rich will cover these targets in more detail during his comments. I'm pleased that we successfully and safely executed on our customer-focused investment program. Through solid planning and collaboration with contractors and suppliers, our team deployed $755 million in capital projects to further harden and modernize our energy systems. These investments included our $79 million, 52.5 megawatt Corydale wind project, which we constructed in our strong wind resource area near Cheyenne, Wyoming. The project now serves customers in South Dakota and Wyoming through our innovative and voluntary customer subscription-based renewable ready program. We also made terrific regulatory progress with the Nebraska and Wyoming commissions approving our consolidation applications and our rate reviews on constructive terms. Both commissions approved our applications to consolidate multiple rate structures into a single statewide rate structure. These approvals will help streamline our regulatory strategies in both states and provide efficiencies as we continuously improve how we serve and how we interact with our customers in those states. In addition to receiving constructive revenue increases in both states, both states also approved riders to support our programmatic investment for safety and reliability. Throughout the pandemic, we maintained our strong financial position and investment-grade credit ratings executing upon our debt and equity financing needs on favorable terms during the year. And our time-tested staying power is a result of environmental, social, and governance matters always being a core focus. In 2020, we provided greater transparency into our ESG profile and journey. We published new qualitative and quantitative reports. We issued an updated corporate sustainability report and we announced our goals to reduce greenhouse gas emissions intensity. For our electric operations, we are on track to achieve a 40% reduction by 2030 and a 70% reduction by 2040 off a 2005 baseline. We are currently developing our integrated resource plans for South Dakota and Wyoming, which we will complete this summer and then next year for Colorado. These resource plans will provide detail regarding how we will achieve these goals, including options for our current resources and potential investment opportunities to meet customer demand. For our natural gas utilities, we expect to cut greenhouse gas emissions intensity by 50% by 2035. Again, that's off of a 2005 baseline. We have already cut our gas utility emissions by one-third since 2005. Slide 7 shows that we plan to invest over $600 million annually during the next five years, for a total of over $3 billion. Our base forecast of over $2.7 billion, represented by the orange bars, relates to projects that are fully planned and in progress. As incremental projects are more refined for timing, cost, and other factors, we will add them to our base forecast. Incremental projects we are working on include additional electric generation and transmission projects, gas pipeline projects, and additional programmatic investment. Slides 27 through 32 in the appendix provide additional details related to our capital investment plan. In addition, our dedicated growth team is aggressively pursuing new growth opportunities. We are powering data centers and technology growth within our service territories. And with more people moving into our service territories, we are ready to serve our growing customer demand. We are adding to our reputation of delivering innovative solutions, products, and technologies, including the expansion of renewables and cleaner technologies such as electric vehicles and renewable natural gas. Across all of our business, we continue to focus on cost discipline, along with our better everyday culture, to drive greater efficiency and value through continuous improvements. Looking forward, we are confident in our future. We are well positioned as an integrated, pure play utility serving a strong and growing region and jurisdictions with constructive regulatory environments. I'm excited to work alongside our highly engaged team, executing our proven strategy to continue delivering strong results for all of our stakeholders. Just like all of you, we are hopeful for a brighter year ahead, especially for our families and friends whose lives were deeply affected by the virus. While the pandemic remains a serious issue, our business fundamentals remain strong, and we are applying what we learned in 2020 to become more efficient, more responsive, and more technology-enabled. I'll now turn it over to Rich for the financial update. Rich?