Black Hills Corp. — Third Quarter 2026 Earnings Summary

Financial Performance

• GAAP net income available for common stock was $41.0 million for the three months ended Sept. 30, 2026, compared to $24.9 million in the same period in 2025; for the nine months ended Sept. 30, 2026, it was $210.2 million compared to $186.6 million in 2025.
• GAAP diluted EPS was $0.54 for the three months ended Sept. 30, 2026, versus $0.34 in 2025; year-to-date diluted EPS was $2.76 compared to $2.58 in 2025.
• Adjusted earnings were $43.6 million for the three months ended Sept. 30, 2026, compared to $32.5 million in 2025; year-to-date adjusted earnings were $220.2 million compared to $194.2 million in 2025.
• Adjusted diluted EPS was $0.57 for the three months ended Sept. 30, 2026, versus $0.45 in 2025; year-to-date adjusted diluted EPS was $2.89 compared to $2.68 in 2025.
• Revenue was $466.1 million for the three months ended Sept. 30, 2026, compared to $430.2 million in 2025; year-to-date revenue was $1,699.6 million compared to $1,674.5 million in 2025.
• Operating expenses for the nine months ended Sept. 30, 2026, were $1,302.5 million, compared to $1,308.4 million in 2025.
• Net interest expense was $50.1 million for the three months ended Sept. 30, 2026, compared to $49.4 million in 2025; year-to-date net interest expense was $153.7 million compared to $149.6 million in 2025.
• Merger-related costs were $0.03 per share for the three months ended Sept. 30, 2026, and $0.13 per share for the nine months ended Sept. 30, 2026.

Guidance and Future Outlook

• Reaffirmed 2026 adjusted EPS guidance in the range of $4.25 to $4.45 per share, excluding merger-related costs.
• Guidance assumes normal weather, constructive regulatory outcomes, an effective tax rate of approximately 14%, and equity issuance between $50 million and $70 million.
• Expects to deliver in the upper half of its 4% to 6% long-term EPS growth target supported by the current plan for 2026 to 2030.
• Anticipates earnings from the Google data center project to begin mid-2027, increasing to approximately $150 million of net income in 2030.
• Plans to provide a comprehensive update for 2027 to 2031 in the year-end earnings release.

Business Segments and Product Lines

• Electric Utilities:
  • South Dakota Electric received approval for a settlement providing $27.4 million in new annual revenue with a four-year rate moratorium until August 2030; new rates effective December 2026.
  • Wyoming Electric received approval for a settlement providing $4.0 million in new annual revenue; new rates effective December 2026.
  • Signed definitive agreements to serve Google's planned data center in Cheyenne, Wyoming, with terms through 2048; project involves $1.8 billion in 564 MW of new generation and management of 2.1 GW of third-party resources.
  • Requested CPCNs for $686 million of transmission expansion investments ($80 million South Cheyenne project and $606 million Aeolus project) to serve large-load opportunities.
  • Lange II generation facility (99 MW, $320 million) is on track for service in the fourth quarter of 2026.
  • Recorded four new all-time customer load peaks in 2026, with the most recent peak of 439 MW on July 20, 2026, representing a 16% increase over the 2025 peak.
  • Colorado Electric filed a 2026 Clean Energy Plan targeting an 80% greenhouse gas emission reduction by 2030, proposing 100 MW of wind, 200 MW of battery storage, and 125 MW of natural gas generation.
  • Wyoming Electric filed an Integrated Resource Plan identifying a 95 MW capacity shortfall beginning in 2027, recommending 36 MW of new natural gas engines and 50 MW of battery storage.
• Gas Utilities:
  • Arkansas Gas received final approval for new rates recovering $147 million of system investments, providing $17.9 million in new annual revenue; rates effective October 12, 2026.
  • Colorado Electric filed a rate review request seeking approval to recover $184 million of critical investments, requesting $26.7 million in new annual revenue.
• Corporate and Other:
  • Board approved a quarterly dividend of $0.703 per share payable December 1, 2026, marking 56 consecutive years of increases.
  • Issued 1.0 million shares of new common stock under the at-the-market equity offering program for net proceeds of $69 million year-to-date.

Market and Competitive Landscape

• Wyoming Electric reported 20 consecutive years of increasing electric demand in the Cheyenne, Wyoming region, driven primarily by large-load data center demand.
• The company serves more than 1.37 million natural gas and electric utility customers across eight states: Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming.
• Large-load opportunities in Wyoming represent significant upside to the current five-year plan, with a total investment of $2.5 billion in generation and transmission.

Risks and Challenges

• Pending merger with NorthWestern Energy is subject to final regulatory approval from the Montana Public Service Commission; the transaction is expected to close by year-end 2026.
• Forward-looking statements involve risks including the accuracy of earnings guidance assumptions, ability to obtain regulatory approvals, execution of capital investment programs, and access to capital markets.
• Potential risks include inflation, interest rates, commodity prices, supply chain constraints, labor availability, severe weather, wildfire, and cybersecurity incidents.
• Specific risks relate to the Google data center project, including construction milestones, financing, regulatory approvals, and customer demand forecasts.

Management Commentary and Tone

• Linn Evans, President and CEO, described third-quarter results as "excellent" and noted significant progress on strategic initiatives.
• Management highlighted strong earnings, maintained solid investment-grade credit ratings, and expressed excitement regarding the Google data center agreement.
• Evans stated that the team expects to deliver in the upper half of the long-term EPS growth target supported by current plans and significant upside from large-load growth.

Other Key Points

• The merger with NorthWestern Energy is a tax-free, all-stock transaction expected to close by year-end 2026, subject to Montana regulatory approval; all other approvals and conditions have been received or satisfied.
• Wyoming Electric filed a request for a new Large Customer Transmission Cost Adjustment Mechanism (LCTCAM) tariff to recover transmission investment costs from large-load customers.
• Both Wyoming Electric and South Dakota Electric completed regulatory requirements for wildfire liability protections outlined in legislation enacted in 2025 and 2026.
• Adjusted EPS results benefited from $0.15 per share of new rates and rider recovery and $0.06 per share of weather favorability in the third quarter of 2026.
• Year-to-date adjusted EPS results benefited from $0.63 per share of new rates and rider recovery and customer growth, offset by $0.12 per share from mild weather.