Black Hills Corporation

Good day and thank you for standing by. Welcome to the second quarter of 2025 Black Hills Corporation Earnings Conference Call. At this time all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation there will be a question and answer session. To ask a question please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1-1 again. I would now like to hand the conference over to your speaker today, Sal Diaz, Director of Investor Relations.

Thank you, operator. Good morning and welcome to Black Hills Corporation's second quarter 2025 Earnings Conference Call. You can find our earnings release and materials for our call this morning on our website at blackhillscorp.com under an investor relations heading. Leading our quarterly earnings call are Lynn Evans, President and Chief Executive Officer, Kimberly Nooney, Senior Vice President and Chief Financial Officer, and Moiny Jones, Senior Vice President and Chief Utility Officer. During our earnings discussion today, 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 are based on reasonable assumptions, actual results may differ materially. We direct you to our earnings release, slide 2 of the investor presentation on our website, and our most recent form 10-K and 10-Q filed with the Securities and Exchange Commission for a list of some of the factors that could cause future results to differ materially from our expectations. With that, I will now turn the call over to Lynn Evans.

Thank you, Sal. Good morning and thank you all for joining us today. I'll begin on slide 3 with a summary of our quarter and our strategic outlook. Kimberly will provide our financial update and Moiny will discuss our operational performance and strategic progress. Among our key stakeholder commitments for the year are first, deliver on our financial commitments including a -over-year earnings growth of 5% at the midpoint of guidance. Second, execute on our regulatory and growth initiatives including our $1 billion capital plan to support key projects that serve the growing needs of our customers. And third, provide excellent operational performance including top quartile reliability and above industry average safety performance. I'm pleased to report we made strong progress on these three commitments in the second quarter and I'm proud of the relentless drive of our team as we execute our customer-focused strategy. Together, we delivered on our financial commitments and made great progress on several large initiatives through the first half of 2025. We're on track to achieve our earnings guidance for the full year due to three primary drivers new base rates, rider recovery, and customer growth. And we continue to maintain a healthy balance sheet to help us execute on our strategic growth plan. We continue to make excellent progress in our regulatory strategy including our recently approved Kansas gas rate review and our active rate review in Nebraska. Our seven rate reviews since the beginning of 2024 reflect the strength and skill within our team to execute multiple rate reviews annually. Collectively, these rate reviews represent the recovery of over $1.3 billion of new system investments made to serve our customers. Our rider mechanisms are also instrumental in recovering investments in a timely manner and support our path to achieve our earnings guidance. We also made strong progress on near-term projects that will drive growth including our ready Wyoming transmission expansion, our Lang 2 generation project, and our Colorado clean energy plan. Additionally, customer growth including growing demand from data center and blockchain customers and economic development in our service territories are providing solid contributions to earnings. Representing that customer growth, Wyoming Electric recorded four distinct all-time peak loads during the first half of this year. The newest peak of 379 megawatts set in June is a 21% increase over the peak recorded in 2024 and a 10% increase over a peak customer load that was set earlier in the second quarter, reflecting ongoing growth in data center and blockchain demand. As we leverage our growth opportunities, we're also mitigating risk for our business and our customers. At the end of June, we established an emergency public safety power shutoff program across all three of our electric utilities to mitigate wildfire risk and keep our customers safe. The program reflects extensive engagement with a variety of stakeholders to craft the framework for a plan that makes sense in our local service territories. In summary, our team continues to deliver consistent results for our stakeholders on our regulatory and growth initiatives while keeping customer safety and reliability top of mind. Thank you to our employees and partners listening today. I'm proud of what we have achieved together and I'm grateful for your dedication to our mission of improving life with energy every day. Our financial outlook is provided on slide four. With earnings meeting our expectations to date and strong ongoing customer demand opportunities ahead, we are reaffirming our 2025 earnings guidance range of $4 to $4.26, which is a 5% growth rate at the midpoint over our 2024 EPS. Looking ahead, with excellent progress on our regulatory and growth initiatives, we are successfully executing on our plan to deliver in the upper half of our 4% to 6% long-term EPS growth target starting in 2026. Our confidence in our long-term growth target is driven by our $4.7 billion capital plan and further reinforced by strong customer demand, including data center and blockchain demand opportunities. Slide five helps illustrate our $4.7 billion capital plan. The base investment level in our business currently ranges from $700 to $750 million annually, prioritizing the core needs of our customers for safety, reliability, and supporting growth. In addition, our transformative infrastructure expansion investments will cost-effectively enhance the resiliency of our system and support growing demand and evolving system requirements. Our ongoing capital projects include our ready Wyoming transmission expansion that is on target to be completed by year end, our 99-megawatt Lang 2 generation project in South Dakota that we expect to place in service in the second half of 2026, and our solar and battery projects to comply with the Colorado Clean Energy Plan to be placed in service in 2027 to 2028. These investments further capitalize on our strength as a vertically integrated electric and gas infrastructure company operating in eight constructive states. Our confidence in our earnings guidance and our long-term growth is reinforced by the tech-driven industrial demand we are witnessing as outlined on slide six. For more than a decade, we have served Microsoft's increasing hyperscale data center demand on top of our core residential and commercial customer growth. Meta, which we announced last year as a customer, is now in the process of constructing its new data center site, which we expect to begin taking data center load beginning in 2026. As Meta ramps up and as Microsoft continues its growth, we expect data centers to contribute more than 10% of our total EPS in 2028. By the end of 2029, our current forecast includes approximately 500 megawatts of data center demand being served through our innovative tariffs and market energy procurement model that provide valuable speed to market advantages for our customers. And looking ahead, our pipeline of data center demand continues to solidify and grow. We are developing our plans to serve more than one gigawatt of demand. We are engaging in meaningful conversations with a growing and diverse group of select customers that recognize the value of our unique offerings and the ideal attributes of our service territory as a choice location for our data center operations. As an example, we are engaged with multiple potential data center customers, including a recent announcement by Crusoe and Tallgrass for a data center to be located in southeast Wyoming. To be clear, this would be additive to the 500 megawatts of data center load in our current five-year financial forecast. Keeping with our normal practices, we would announce additional details when contracted. This pipeline of demand will further drive growth and revenues from our innovative tariff using our minimal capital model and create traditional investment opportunities, both of which generate utility-like returns. Marnie's comments will address our operational construct and capabilities to serve this tech-driven demand. With that update, I'll turn it over to Kimberly for our financial update. Kimberly?