Merger progress and data center deal shape Black Hills (NYSE: BKH) Q1 2026
Black Hills Corporation reported first-quarter 2026 revenue of $780.7 million and diluted earnings per share of $1.73, compared with $805.2 million and $1.87 a year earlier. Net income available for common stock was $131.0 million versus $134.3 million.
Electric Utilities operating income rose to $59.9 million on new rates and rider recovery, while Gas Utilities operating income eased to $146.5 million on milder weather despite recent rate approvals. Operating cash flow was $176.2 million, funding $259.8 million of capital expenditures, largely at Electric Utilities.
The company advanced its all-stock merger with NorthWestern, with shareholder approvals obtained, key regulatory applications filed, and antitrust clearance under the HSR Act completed. It also signed a 1.8 GW data center generation reservation agreement in Wyoming and a 200 MW solar PPA in Colorado to support its Clean Energy Plan.
Positive
- None.
Negative
- None.
Insights
Results were stable overall, with modestly lower earnings and continued strategic expansion.
Black Hills Corporation delivered Q1 2026 diluted EPS of $1.73, down from $1.87, as revenue slipped to $780.7M. Electric Utilities benefited from new rates and rider recovery, while Gas Utilities saw weaker weather-driven demand partially offset by recently implemented rate increases.
Cash from operations of $176.2M funded elevated capital spending of $259.8M, mainly at Electric Utilities, including transmission, generation and storage projects. The balance sheet showed total debt (including current maturities) of $4.40B and a Consolidated Indebtedness to Capitalization Ratio of 0.54 to 1.00, within covenant limits.
Strategically, the all-stock merger with NorthWestern progressed through shareholder approvals, HSR clearance and multiple regulatory settlements, with closing targeted in the second half of 2026. Growth initiatives included a 1.8 GW data center generation reservation agreement under the LPCS Tariff and a 200 MW solar PPA supporting Colorado’s Clean Energy Plan, with key milestones extending into 2027 and beyond.
Key Figures
Key Terms
Blockchain Interruptible Service (BCIS) Tariff financial
Clean Energy Plan financial
Large Power Contract Service (LPCS) Tariff financial
Consolidated Indebtedness to Capitalization Ratio financial
Production Tax Credit financial
Wildfire Mitigation Plan (WMP) financial
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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TABLE OF CONTENTS
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Glossary of Terms and Abbreviations |
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Forward-Looking Information |
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PART I. FINANCIAL INFORMATION |
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Financial Statements - unaudited |
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Consolidated Statements of Comprehensive Income |
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Consolidated Balance Sheets |
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Consolidated Statements of Cash Flows |
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Consolidated Statements of Equity |
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Condensed Notes to Consolidated Financial Statements |
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Note 1. Management’s Statement |
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Note 2. Regulatory Matters |
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Note 3. Commitments, Contingencies and Guarantees |
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Note 4. Revenue |
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Note 6. Earnings Per Share |
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Note 7. Risk Management and Derivatives |
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Note 9. Other Comprehensive Income |
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Note 10. Employee Benefit Plans |
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Note 11. Income Taxes |
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Note 12. Business Segment Information |
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Note 13. Selected Balance Sheet Information |
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Note 14. Pending Merger with NorthWestern |
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Note 15. Subsequent Events |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Executive Summary |
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Recent Developments |
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Results of Operations |
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Consolidated Summary and Overview |
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Non-GAAP Financial Measure |
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Electric Utilities |
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Gas Utilities |
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Corporate and Other |
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Consolidated Interest Expense, Other Income and Income Tax Expense |
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Liquidity and Capital Resources |
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Cash Flow Activities |
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Capital Resources |
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Credit Ratings |
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Capital Requirements |
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Controls and Procedures |
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Risk Factors |
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GLOSSARY OF TERMS AND ABBREVIATIONS
The following terms and abbreviations appear in the text of this report and have the definitions described below:
AFUDC |
Allowance for Funds Used During Construction |
AOCI |
Accumulated Other Comprehensive Income (Loss) |
APSC |
Arkansas Public Service Commission |
Arkansas Gas |
Black Hills Energy Arkansas, Inc., an indirect, wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas services to customers in Arkansas (doing business as Black Hills Energy). |
ASU |
Accounting Standards Update as issued by the FASB |
ATM |
At-the-market equity offering program |
BHC |
Black Hills Corporation; the Company |
BHSC |
Black Hills Service Company, LLC, a direct, wholly-owned subsidiary of Black Hills Corporation (doing business as Black Hills Energy) |
Black-box Settlement |
Settlement with a utility's commission where the revenue requirement is agreed upon, but the specific adjustments used by each party to arrive at the amount are not specified in public rate orders. |
Black Hills Electric Generation |
Black Hills Electric Generation, LLC, a direct, wholly-owned subsidiary of Black Hills Non-regulated Holdings, providing wholesale electric capacity and energy primarily to our affiliate utilities. |
Black Hills Electric Parent Holdings |
Black Hills Electric Utility Holdings, LLC., a direct, wholly-owned subsidiary of Black Hills Corporation |
Black Hills Energy |
The name used to conduct the business of our Utilities |
Black Hills Energy Services |
Black Hills Energy Services Company, an indirect, wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas commodity supply for the Choice Gas Programs (doing business as Black Hills Energy). |
Black Hills Non-regulated Holdings |
Black Hills Non-regulated Holdings, LLC, a direct, wholly-owned subsidiary of Black Hills Corporation |
Black Hills Utility Holdings |
Black Hills Utility Holdings, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation (doing business as Black Hills Energy) |
Blockchain Interruptible Service (BCIS) Tariff |
A WPSC-approved tariff applicable to prospective new Wyoming Electric blockchain customers. The tariff allows customers to negotiate rates and terms and conditions for interruptible electric utility service of 10 MW or greater that would be interconnected with Wyoming Electric’s system. Agreements under the BCIS tariff must be filed with the WPSC prior to the first customer billing, be at least 2 years in duration and include specific pricing for all electricity purchased (with pricing terms subject to renegotiation every three years). BCIS customers shall not participate in the PCA to the extent of service received under the tariff. |
Choice Gas Program |
Regulator-approved programs in Wyoming and Nebraska that allow certain utility customers to select their natural gas commodity supplier, providing for the unbundling of the commodity service from the distribution delivery service. |
Chief Operating Decision Maker (CODM) |
Chief Executive Officer |
CIAC |
Contribution in aid of construction |
Clean Energy Plan |
2030 Ready Plan that establishes a roadmap and preferred resource portfolio for Colorado Electric to achieve the State of Colorado's requirement calling upon electric utilities to reduce greenhouse gas emissions by a minimum of 80% from 2005 levels by 2030. |
Colorado Electric |
Black Hills Colorado Electric, LLC, a direct, wholly-owned subsidiary of Black Hills Electric Parent Holdings, providing electric services to customers in Colorado (doing business as Black Hills Energy). |
Colorado Gas |
Black Hills Colorado Gas, Inc., an indirect, wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas services to customers in Colorado (doing business as Black Hills Energy). |
Consolidated Indebtedness to Capitalization Ratio |
Any indebtedness outstanding at such time, divided by capital at such time. Capital being consolidated net worth (excluding non-controlling interest) plus consolidated indebtedness (including letters of credit and certain guarantees issued) as defined within the current Revolving Credit Facility. |
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Cooling Degree Day |
A cooling degree day is equivalent to each degree that the average of the high and the 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. |
CP Program |
Commercial Paper Program |
CPUC |
Colorado Public Utilities Commission |
Dth |
Dekatherm. A unit of energy equal to 10 therms or one million British thermal units (MMBtu) |
FASB |
Financial Accounting Standards Board |
FCC |
Federal Communications Commission |
FERC |
Federal Energy Regulatory Commission |
GAAP |
Accounting principles generally accepted in the United States of America |
GSRS |
Gas System Reliability Surcharge is a monthly charge that recovers Kansas Gas's costs associated with pipeline safety and government-mandated projects. |
GW |
Gigawatts |
GWh |
Gigawatt Hours |
Heating Degree Day |
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. |
HomeServe |
We offer HomeServe products to our natural gas residential customers interested in purchasing additional home repair service plans. |
HSR Act |
Hart-Scott-Rodino Antitrust Improvements Act of 1976 |
Integrated Generation |
Non-regulated power generation and mining businesses (Black Hills Electric Generation and WRDC) that are vertically integrated within our Electric Utilities segment. |
Iowa Gas |
Black Hills Iowa Gas Utility Company, LLC, a direct, wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas services to customers in Iowa (doing business as Black Hills Energy). |
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, providing natural gas services to customers in Kansas (doing business as Black Hills Energy). |
KCC |
Kansas Corporation Commission |
Lange II |
A dual fuel (natural gas and diesel oil) electric generation project in Rapid City, South Dakota with an estimated total capacity of 99 MW. This facility will be owned and operated by South Dakota Electric and will be located adjacent to the Lange CT generation facility. This project is expected to be in service by the second half of 2026. The addition of these resources will replace generation facilities planned for retirement and support updated planning reserve margin requirements. |
Large Power Contract Service (LPCS) Tariff |
Wyoming Electric offers service under the LPCS tariff approved by the Wyoming Public Service Commission. The LPCS Tariff provides a cost-based rate structure for customers with very large electric loads, typically data centers or other high-demand facilities.This Tariff is designed to ensure that service to LPCS customers is fully self-supporting and does not shift costs to other customer classes. |
Merger |
Merger Sub merging with and into NorthWestern |
Merger Agreement |
The Agreement and Plan of Merger, dated August 18, 2025, by and among BHC, Merger Sub, and NorthWestern |
Merger Sub |
River Merger Sub Inc., a Delaware corporation and direct, wholly owned subsidiary of BHC |
MMBtu |
Million British thermal units |
Moody's |
Moody's Ratings |
MPSC |
Montana Public Service Commission |
MW |
Megawatts |
MWh |
Megawatt-hours |
N/A |
Not applicable |
N/M |
Not meaningful |
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Nebraska Gas |
Black Hills Nebraska Gas, LLC, an indirect, wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas services to customers in Nebraska (doing business as Black Hills Energy). |
NorthWestern |
NorthWestern Energy Group, Inc., a Delaware corporation |
NPSC |
Nebraska Public Service Commission |
OCI |
Other Comprehensive Income |
PPA |
Power Purchase Agreement |
PTC |
Production Tax Credit |
Ready Wyoming |
A 260-mile, multi-phase transmission expansion project in Wyoming which was fully completed and placed in service in 2025. The project provides customers long-term price stability and greater flexibility as power markets develop in the western United States. This project is also expected to enable economic growth in Wyoming, expand access to renewable resources and facilitate additional renewable development across wind- and sun-rich resource areas. |
Revolving Credit Facility |
Our $750 million credit facility used to fund working capital needs, letters of credit and other corporate purposes, which was amended on May 31, 2024, and will terminate on May 31, 2030. This facility includes an accordion feature that allows us to increase total commitments up to $1.0 billion with the consent of the administrative agent, the issuing agents and each bank increasing or providing a new commitment. |
SDPUC |
South Dakota Public Utilities Commission |
SEC |
United States Securities and Exchange Commission |
Service Guard Comfort Plan |
Appliance protection plan that provides home appliance repair services through ongoing monthly service agreements to residential utility customers. |
S&P |
S&P Global Ratings, a division of S&P Global Inc. |
South Dakota Electric |
Black Hills Power, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation, providing electric service to customers in Montana, South Dakota and Wyoming (doing business as Black Hills Energy). |
SSIR |
System Safety and Integrity Rider is a mechanism that allows us to recover the costs associated with certain pipeline safety and integrity investments, including the replacement of higher risk pipe, the improvement of the data management system, and the mitigation of other safety issues identified on our natural gas system. |
Tech Services |
Non-regulated product lines delivered by our Utilities 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-owned gas infrastructure facilities, typically through one-time contracts. |
Utilities |
Black Hills' Electric and Gas Utilities |
Winter Storm Uri |
February 2021 winter weather event that caused extreme cold temperatures in the central United States and led to unprecedented fluctuations in customer demand and market pricing for natural gas and energy. |
Wildfire Mitigation Plan (WMP) |
Our three-layered approach to manage wildfire risks driven by asset-based risk assessments that include asset programs, integrity programs and operational response. |
WPSC |
Wyoming Public Service Commission |
WRDC |
Wyodak Resources Development Corp., a coal mine which is a direct, wholly-owned subsidiary of Black Hills Non-regulated Holdings, providing coal supply primarily to five on-site, mine-mouth generating facilities at our Gillette Energy Complex (doing business as Black Hills Energy). |
Wygen III |
A mine-mouth, coal-fired power plant operated by South Dakota Electric with a total capacity of 116 MW located at our Gillette Energy Complex. South Dakota Electric owns 52% of the power plant, MDU owns 25%, and the City of Gillette owns the remaining 23%. |
Wyoming Electric |
Cheyenne Light, Fuel and Power Company, a direct, wholly-owned subsidiary of Black Hills Corporation, providing electric service to customers in the Cheyenne, Wyoming area (doing business as Black Hills Energy). |
Wyoming Gas |
Black Hills Wyoming Gas, LLC, an indirect, wholly-owned subsidiary of Black Hills Utility Holdings, providing natural gas services to customers in Wyoming (doing business as Black Hills Energy). |
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FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q includes “forward-looking statements” as defined by the SEC. Forward-looking statements are all statements other than statements of historical fact, including without limitation those statements that are identified by the words “anticipates,” “estimates,” “expects,” “intends,” “plans,” “predicts” and similar expressions, and include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, including without limitation, the risk factors described in Item 1A of Part I of our 2025 Annual Report on Form 10-K, Part II, Item 1A of this Quarterly Report on Form 10-Q, and other reports that we file with the SEC from time to time, and the following:
New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time-to-time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BLACK HILLS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(unaudited) |
Three Months Ended |
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2025 |
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Revenue |
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Operating expenses: |
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Fuel, purchased power and cost of natural gas sold |
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Operations and maintenance |
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Depreciation and amortization |
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Taxes other than income taxes |
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Total operating expenses |
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Operating income |
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Other income (expense): |
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Interest expense incurred net of amounts capitalized |
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Interest income |
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Other income, net |
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Total other (expense) |
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Income before income taxes |
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Income tax (expense) |
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Net income |
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Net income attributable to non-controlling interest |
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Net income available for common stock |
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Earnings per share of common stock: |
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Earnings per share, Basic |
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Earnings per share, Diluted |
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Weighted average common shares outstanding: |
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The accompanying Condensed Notes to Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.
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BLACK HILLS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited) |
Three Months Ended |
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2025 |
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Net income |
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Other comprehensive income (loss), net of tax; |
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Reclassification of benefit plan liability |
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Derivative instruments designated as cash flow hedges: |
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Reclassification of settled/amortized interest rate swaps |
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Unrealized gain on commodity derivatives |
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Reclassification of settled commodity derivatives |
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Other comprehensive income (loss), net of tax |
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Comprehensive income |
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Less: comprehensive income attributable to non-controlling interest |
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Comprehensive income available for common stock |
$ |
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$ |
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See Note 9 for additional disclosures.
The accompanying Condensed Notes to Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.
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BLACK HILLS CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited) |
As of |
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March 31, 2026 |
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December 31, 2025 |
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(in millions) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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Restricted cash and equivalents |
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Accounts receivable, net |
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Materials, supplies and fuel |
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Income tax receivable, net |
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Regulatory assets, current |
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Other current assets |
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Total current assets |
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Property, plant and equipment |
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Less: accumulated depreciation |
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Total property, plant and equipment, net |
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Other assets: |
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Goodwill |
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Intangible assets, net |
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Regulatory assets, non-current |
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Other assets, non-current |
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Total other assets, non-current |
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TOTAL ASSETS |
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$ |
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The accompanying Condensed Notes to Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.
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BLACK HILLS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Continued)
(unaudited) |
As of |
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March 31, 2026 |
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December 31, 2025 |
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Accounts payable |
$ |
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$ |
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Accrued liabilities |
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Derivative liabilities, current |
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Regulatory liabilities, current |
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Notes payable |
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Current maturities of long-term debt |
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Total current liabilities |
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Long-term debt, net of current maturities |
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Deferred credits and other liabilities: |
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Deferred income tax liabilities, net |
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Regulatory liabilities, non-current |
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Benefit plan liabilities |
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Other deferred credits and other liabilities |
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Total deferred credits and other liabilities |
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Commitments, contingencies and guarantees (Note 3) |
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Equity: |
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Stockholder's equity - |
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Common stock $ |
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Additional paid-in capital |
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Retained earnings |
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Treasury stock, at cost - |
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Accumulated other comprehensive (loss) |
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Total stockholders' equity |
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Non-controlling interest |
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Total equity |
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TOTAL LIABILITIES AND TOTAL EQUITY |
$ |
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$ |
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The accompanying Condensed Notes to Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.
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Table of Contents
BLACK HILLS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited) |
Three Months Ended March 31, |
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2026 |
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2025 |
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Operating activities: |
(in millions) |
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Net income |
$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
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Deferred financing cost amortization |
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Stock compensation |
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Deferred income taxes |
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Employee benefit plans |
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Other adjustments |
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Changes in certain operating assets and liabilities: |
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Materials, supplies and fuel |
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Accounts receivable and other current assets |
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( |
) |
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Accounts payable and other current liabilities |
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( |
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( |
) |
Regulatory assets |
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Other operating activities, net |
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( |
) |
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( |
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Net cash provided by operating activities |
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Investing activities: |
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Property, plant and equipment additions |
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( |
) |
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( |
) |
Other investing activities |
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( |
) |
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( |
) |
Net cash (used in) investing activities |
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( |
) |
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( |
) |
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Financing activities: |
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Dividends paid on common stock |
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( |
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( |
) |
Common stock issued |
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Net borrowings (payments) of Revolving Credit Facility and CP Program |
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( |
) |
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Long-term debt - repayments |
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( |
) |
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Distributions to non-controlling interests |
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( |
) |
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( |
) |
Other financing activities |
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( |
) |
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( |
) |
Net cash (used in) financing activities |
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( |
) |
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( |
) |
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Net change in cash, restricted cash and cash equivalents |
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( |
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( |
) |
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Cash, restricted cash, and cash equivalents beginning of period |
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Cash, restricted cash, and cash equivalents end of period |
$ |
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$ |
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Supplemental cash flow information: |
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Cash (paid) received during the period: |
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Interest (net of amounts capitalized) |
$ |
( |
) |
$ |
( |
) |
Income taxes, net of transferred tax credits (Note 11) |
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Non-cash investing and financing activities: |
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Accrued property, plant, and equipment purchases at March 31, |
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The accompanying Condensed Notes to Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.
11
Table of Contents
BLACK HILLS CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited) |
Common Stock |
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Treasury Stock |
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Shares |
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Value |
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Shares |
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Value |
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Additional Paid in Capital |
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Retained Earnings |
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AOCI |
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Non-controlling Interest |
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Total |
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(in millions except share amounts) |
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December 31, 2025 |
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$ |
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$ |
( |
) |
$ |
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$ |
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$ |
( |
) |
$ |
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$ |
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|||||||
Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive income, net of tax |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Dividends on common stock ($ |
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— |
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— |
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— |
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— |
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— |
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( |
) |
|
— |
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— |
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( |
) |
Share-based compensation |
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( |
) |
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— |
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— |
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— |
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Issuance of common stock |
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— |
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— |
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— |
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— |
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— |
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Issuance costs |
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— |
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— |
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— |
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— |
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( |
) |
|
— |
|
|
— |
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|
— |
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|
( |
) |
Distributions to non-controlling interest |
|
— |
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— |
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— |
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— |
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— |
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|
— |
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|
— |
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( |
) |
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( |
) |
March 31, 2026 |
|
|
$ |
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|
|
$ |
( |
) |
$ |
|
$ |
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$ |
( |
) |
$ |
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$ |
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(unaudited) |
Common Stock |
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Treasury Stock |
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Shares |
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Value |
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Shares |
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Value |
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Additional Paid in Capital |
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Retained Earnings |
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AOCI |
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Non-controlling Interest |
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Total |
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(in millions except share amounts) |
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December 31, 2024 |
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$ |
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$ |
( |
) |
$ |
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$ |
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$ |
( |
) |
$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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|
— |
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— |
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Other comprehensive income, net of tax |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Dividends on common stock ($ |
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— |
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— |
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— |
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— |
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— |
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( |
) |
|
— |
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— |
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|
( |
) |
Share-based compensation |
|
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|
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|
( |
) |
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|
( |
) |
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— |
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— |
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— |
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Issuance of common stock |
|
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— |
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— |
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— |
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— |
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— |
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Issuance costs |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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( |
) |
Distributions to non-controlling interest |
|
— |
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— |
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— |
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— |
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— |
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— |
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|
— |
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|
( |
) |
|
( |
) |
March 31, 2025 |
|
|
$ |
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|
$ |
( |
) |
$ |
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$ |
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$ |
( |
) |
$ |
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$ |
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12
Table of Contents
BLACK HILLS CORPORATION
Condensed Notes to Consolidated Financial Statements
(unaudited)
(Reference is made to Notes to Consolidated Financial Statements
included in the Company’s 2025 Annual Report on Form 10-K)
The unaudited Consolidated Financial Statements included herein have been prepared by Black Hills Corporation (together with our subsidiaries the “Company”, “us”, “we”, or “our”), pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, we believe that the footnotes adequately disclose the information presented. These Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and the notes included in our 2025 Annual Report on Form 10-K.
Use of Estimates and Basis of Presentation
The information furnished in the accompanying Consolidated Financial Statements reflects certain estimates required and all adjustments, including accruals, which are, in the opinion of management, necessary for a fair presentation of the March 31, 2026, December 31, 2025, and March 31, 2025, financial information. Certain lines of business in which we operate are highly seasonal and our interim results of operations are not necessarily indicative of the results of operations to be expected for an entire year.
Recently Issued Accounting Standards
Disaggregation of Income Statement Expenses, ASU 2024-03
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures, and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Clarifying the Effective Date. ASU 2024-03 requires public entities to disclose, in the notes to financial statements, certain costs and expenses, such as purchases of inventory, employee compensation, and costs related to depreciation and amortization. ASU 2024-03, as clarified by ASU 2025-01, is effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2027, and subsequent interim periods, with early adoption permitted. We are currently evaluating the impact of these standards on our consolidated financial statement disclosures.
Targeted Improvements to the Accounting for Internal-Use Software, ASU 2025-06
In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, which amends the accounting guidance for internal-use software under ASC 350-40. The amendments are intended to modernize the recognition and capitalization framework to better reflect current software development practices, particularly agile methodologies. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of ASU 2025-06 on our consolidated financial statements and related disclosures.
13
Table of Contents
We had the following regulatory assets and liabilities:
|
As of |
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As of |
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|
March 31, 2026 |
|
December 31, 2025 |
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|
(in millions) |
|
||||
Regulatory assets |
|
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|
||
Winter Storm Uri |
$ |
|
$ |
|
||
Deferred energy and fuel cost adjustments |
|
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Deferred gas cost adjustments |
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Gas price derivatives |
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Deferred taxes on AFUDC |
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Employee benefit plans and related deferred taxes |
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Environmental |
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Loss on reacquired debt |
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Deferred taxes on flow through accounting |
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Other regulatory assets |
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Total regulatory assets |
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Less current regulatory assets |
|
( |
) |
|
( |
) |
Regulatory assets, non-current |
$ |
|
$ |
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||
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Regulatory liabilities |
|
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Deferred energy and fuel cost adjustments |
|
|
$ |
|
||
Deferred gas cost adjustments |
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Employee benefit plan costs and related deferred taxes |
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Cost of removal |
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Excess deferred income taxes |
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Colorado renewable energy |
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Other regulatory liabilities |
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Total regulatory liabilities |
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Less current regulatory liabilities |
|
( |
) |
|
( |
) |
Regulatory liabilities, non-current |
$ |
|
$ |
|
||
Recent Rate Review Activity
Arkansas Gas
On December 5, 2025, Arkansas Gas filed a rate review with the APSC seeking recovery of infrastructure investments in its natural gas pipeline system. The rate review requested $
Kansas Gas
On February 3, 2025, Kansas Gas filed a rate review with the KCC seeking recovery of infrastructure investments and increased operations and maintenance costs driven by inflation and operational needs to serve customers. On July 24, 2025, Kansas Gas received final approval from the KCC for a Black-box Settlement agreement for a general rate increase expected to generate $
14
Table of Contents
Nebraska Gas
On May 1, 2025, Nebraska Gas filed a rate review with the NPSC seeking recovery of infrastructure investments and increased operations and maintenance costs driven by inflation and operational needs to serve customers. On December 9, 2025, Nebraska Gas received final approval from the NPSC for a settlement agreement for a general rate increase. The settlement is expected to generate $
South Dakota Electric
On February 19, 2026, South Dakota Electric filed a rate review with the SDPUC seeking recovery of infrastructure investments and increased operations and maintenance costs driven by inflation and operational needs to serve customers since its last rate review in 2014. The rate review requested $
On March 18, 2026, South Dakota Electric filed a rate review with the WPSC seeking recovery of infrastructure investments and increased operations and maintenance costs driven by inflation and operational needs to serve customers since its last rate review in 2014 The company is seeking an annual base rate increase to retail electric service rates of $
Deborah Ferrari et al. v. Colorado Electric, Case No. 2024CV31889 (District Court for the City and County of Denver, Colorado)
During the year ended December 31, 2025, Colorado Electric settled a legal matter involving an auto accident. As part of the settlement, Colorado Electric recognized a legal liability of $
Generation Reservation Agreement with Prospective Data Center Customer
On April 22, 2026, Wyoming Electric entered into a generation reservation agreement with a prospective new customer seeking to construct a
Power Purchase Agreement for Clean Energy Plan
On February 18, 2026, Colorado Electric executed a PPA with Honors Energy, LLC to purchase up to
15
Table of Contents
The following tables depict the disaggregation of revenue, including intercompany revenue, from contracts with customers by customer type and timing of revenue recognition for each of the reportable segments for the three months ended March 31, 2026, and 2025. Sales tax and other similar taxes are excluded from revenues.
Three Months Ended March 31, 2026 |
Electric Utilities |
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Gas Utilities |
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Inter-segment Eliminations |
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Total |
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Customer types: |
(in millions) |
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Retail |
$ |
|
$ |
|
$ |
|
$ |
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Transportation |
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( |
) |
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Wholesale |
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Market - off-system sales |
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Transmission |
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Other revenues |
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( |
) |
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Revenue from contracts with customers |
$ |
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$ |
|
$ |
( |
) |
$ |
|
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Alternative revenue and other |
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Total revenues |
$ |
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$ |
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$ |
( |
) |
$ |
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Timing of revenue recognition: |
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Services transferred at a point in time |
$ |
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$ |
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$ |
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$ |
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Services transferred over time |
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( |
) |
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Revenue from contracts with customers |
$ |
|
$ |
|
$ |
( |
) |
$ |
|
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Three Months Ended March 31, 2025 |
Electric Utilities |
|
Gas Utilities |
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Inter-segment Eliminations |
|
Total |
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Customer types: |
(in millions) |
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Retail |
$ |
|
$ |
|
$ |
|
$ |
|
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Transportation |
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( |
) |
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Wholesale |
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Market - off-system sales |
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Transmission |
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Other revenues |
|
|
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|
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( |
) |
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|
|||
Revenue from contracts with customers |
$ |
|
$ |
|
$ |
( |
) |
$ |
|
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Alternative revenue and other |
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Total revenues |
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||
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Timing of revenue recognition: |
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|
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Services transferred at a point in time |
$ |
|
$ |
|
$ |
|
$ |
|
||||
Services transferred over time |
|
|
|
|
|
( |
) |
|
|
|||
Revenue from contracts with customers |
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||
Short-term Debt
Revolving Credit Facility and CP Program
Our Revolving Credit Facility and CP Program, which are classified as Notes payable on the Consolidated Balance Sheets, had the following borrowings, outstanding letters of credit, and available capacity as of:
|
March 31, 2026 |
|
December 31, 2025 |
|
||
|
(dollars in millions) |
|
||||
Amount outstanding |
$ |
|
$ |
|
||
Letters of credit (a) |
|
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Available capacity |
|
|
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|
||
Weighted average interest rates |
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% |
N/A |
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||
16
Table of Contents
Revolving Credit Facility and CP Program borrowing activity was as follows:
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
|
(dollars in millions) |
|
||||
Maximum amount outstanding (based on daily outstanding balances) |
$ |
|
$ |
|
||
Average amount outstanding (based on daily outstanding balances) |
|
|
|
|
||
Weighted average interest rates |
|
% |
|
% |
||
Long-term Debt
On October 2, 2025, we completed a public debt offering of $
Financial Covenants
Revolving Credit Facility
We were in compliance with all of our Revolving Credit Facility covenants as of March 31, 2026. We are required to maintain a Consolidated Indebtedness to Capitalization Ratio not to exceed
Wyoming Electric
Wyoming Electric was in compliance with all covenants within its financing agreements as of March 31, 2026. Wyoming Electric is required to maintain a debt to capitalization ratio of no more than
Equity
ATM
ATM activity was as follows:
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
June 16, 2023 ATM Program |
(in millions, except Average price per share amounts) |
|
||||
Proceeds, (net of issuance costs of $ |
$ |
|
$ |
|
||
Number of shares issued |
|
|
|
|
||
|
|
|
|
|
||
May 8, 2025 ATM Program |
|
|
|
|
||
Proceeds, (net of issuance costs of $( |
$ |
|
$ |
|
||
Number of shares issued |
|
|
|
|
||
|
|
|
|
|
||
Total activity under both ATM Programs |
|
|
|
|
||
Proceeds, (net of issuance costs of $( |
$ |
|
$ |
|
||
Number of shares issued |
|
|
|
|
||
Average price per share |
$ |
|
$ |
|
||
17
Table of Contents
A reconciliation of share amounts used to compute earnings per share in the accompanying Consolidated Statements of Income was as follows:
|
Three Months Ended March 31, |
|
||||
|
2026 |
|
2025 |
|
||
|
(in millions, except per share amounts) |
|
||||
Net income available for common stock |
$ |
|
$ |
|
||
|
|
|
|
|
||
Weighted average shares - basic |
|
|
|
|
||
Dilutive effect of equity compensation |
|
|
|
|
||
Weighted average shares - diluted |
$ |
|
$ |
|
||
|
|
|
|
|
||
Net income available for common stock, per share - Diluted |
$ |
|
$ |
|
||
Anti-dilutive shares excluded from the diluted earnings per share computation were not material for the three months ended March 31, 2026, and 2025.
Market and Credit Risk Disclosures
Our activities in the energy industry expose us to a number of risks in the normal operations of our businesses. Depending on the activity, we are exposed to varying degrees of market risk and credit risk.
Market Risk
Market risk is the potential loss that may occur as a result of an adverse change in market price, rate or supply. We are exposed but not limited to, the following market risks:
Credit Risk
Credit risk is the risk of financial loss resulting from non-performance of contractual obligations by a counterparty.
We attempt to mitigate our credit exposure by conducting business primarily with high credit quality entities, setting tenor and credit limits commensurate with counterparty financial strength, obtaining master netting agreements, and mitigating credit exposure with less creditworthy counterparties through parental guarantees, cash collateral requirements, letters of credit, and other security agreements.
We perform periodic credit evaluations of our customers and adjust credit limits based upon payment history and the customers’ current creditworthiness, as determined by review of their current credit information. We maintain a provision for estimated credit losses based upon historical experience, changes in current market conditions, expected losses, and any specific customer collection issue that is identified.
Derivatives and Hedging Activity
Our derivative and hedging activities included in the accompanying Consolidated Balance Sheets, Consolidated Statements of Income, and Consolidated Statements of Comprehensive Income are detailed below and in Note 8.
18
Table of Contents
The operations of our Utilities, including natural gas sold by our Gas Utilities and natural gas used by our Electric Utilities’ generation plants or those plants under PPAs where our Electric Utilities must provide the generation fuel (tolling agreements), expose our utility customers to natural gas price volatility. Therefore, as allowed or required by state utility commissions, we have entered into commission approved hedging programs utilizing natural gas futures, options, over-the-counter swaps, and basis swaps to reduce our customers’ underlying exposure to these fluctuations. These transactions are considered derivatives, and in accordance with accounting standards for derivatives and hedging, mark-to-market adjustments are recorded as Derivative assets or Derivative liabilities on the accompanying Consolidated Balance Sheets, net of balance sheet offsetting as permitted by GAAP.
For our regulated Utilities’ hedging plans, unrealized and realized gains and losses, as well as option premiums and commissions on these transactions, are recorded as Regulatory assets or Regulatory liabilities in the accompanying Consolidated Balance Sheets in accordance with the state regulatory commission guidelines. When the related costs are recovered through our rates, the hedging activity is recognized in the Consolidated Statements of Income.
Through Black Hills Energy Services, our non-regulated natural gas commodity supplier, we buy, sell, and deliver natural gas in Nebraska and Wyoming at competitive prices by managing commodity price risk. As a result of these activities, this area of our business is exposed to risks associated with changes in the market price of natural gas. We manage our exposure to such risks using over-the-counter and exchange traded options and swaps with counterparties in anticipation of forecasted purchases and sales through September 2028. A portion of our over-the-counter swaps have been designated as cash flow hedges to mitigate the commodity price risk associated with deliveries under fixed price forward contracts to deliver gas to our Choice Gas Program customers. The gain or loss on these designated derivatives is reported in AOCI in the accompanying Consolidated Balance Sheets and reclassified into earnings in the same period that the underlying hedged item is recognized in earnings. Effectiveness of our hedging position is evaluated at least quarterly.
The contract or notional amounts and terms of the electric and natural gas derivative commodity instruments held at our Utilities are composed of both long and short positions. We had the following net long and (short) positions as of:
|
March 31, 2026 |
December 31, 2025 |
||||||
|
Notional Amounts (MMBtus) |
|
Maximum Term (months) (a) |
Notional Amounts (MMBtus) |
|
Maximum Term (months) (a) |
||
Natural gas futures purchased |
|
— |
|
N/A |
|
|
||
Natural gas options purchased, net |
|
— |
|
N/A |
|
|
||
Natural gas basis swaps purchased |
|
— |
|
N/A |
|
|
||
Natural gas over-the-counter swaps, net (b) |
|
|
|
|
||||
Natural gas physical contracts, net (c) |
|
( |
) |
|
|
|||
We have certain derivative contracts which contain credit provisions. These credit provisions may require the Company to post collateral when credit exposure to the Company is in excess of a negotiated line of unsecured credit. At March 31, 2026, the Company had no amount related to such provisions, which would be included in Other current assets on the Consolidated Balance Sheets.
Derivatives by Balance Sheet Classification
The following table presents the fair value and balance sheet classification of our derivative instruments as of:
|
Balance Sheet Location |
March 31, |
|
December 31, |
|
||
|
|
(in millions) |
|
||||
Derivatives designated as hedges: |
|
|
|
|
|
||
Liability derivative instruments: |
|
|
|
|
|
||
Current commodity derivatives |
Derivative liabilities, current |
$ |
( |
) |
$ |
( |
) |
Total derivatives designated as hedges |
|
$ |
( |
) |
$ |
( |
) |
|
|
|
|
|
|
||
Derivatives not designated as hedges: |
|
|
|
|
|
||
Liability derivative instruments: |
|
|
|
|
|
||
Current commodity derivatives |
Derivative liabilities, current |
$ |
( |
) |
$ |
( |
) |
Total derivatives not designated as hedges |
|
$ |
( |
) |
$ |
( |
) |
19
Table of Contents
Derivatives Designated as Hedge Instruments
The impact of cash flow hedges on our Consolidated Statements of Comprehensive Income and Consolidated Statements of Income are presented below for the three months ended March 31, 2026, and 2025. Note that this presentation does not reflect the gains or losses arising from the underlying physical transactions; therefore, it is not indicative of the economic profit or loss we realized when the underlying physical and financial transactions were settled.
|
Three Months Ended |
|
|
Three Months Ended |
|
||||||||
|
2026 |
|
2025 |
|
|
2026 |
|
2025 |
|
||||
Derivatives in Cash Flow Hedging Relationships |
Amount of Gain/(Loss) Recognized in OCI |
|
Income Statement Location |
Amount of Gain/(Loss) Reclassified from AOCI into Income |
|
||||||||
|
(in millions) |
|
|
(in millions) |
|
||||||||
Interest rate swaps |
$ |
|
$ |
|
Interest expense |
$ |
( |
) |
$ |
( |
) |
||
Commodity derivatives |
|
|
|
|
Fuel, purchased power, and cost of natural gas sold |
|
( |
) |
|
( |
) |
||
Total |
$ |
|
$ |
|
|
$ |
( |
) |
$ |
( |
) |
||
As of March 31, 2026, $
Derivatives Not Designated as Hedge Instruments
The following table summarizes the impacts of derivative instruments not designated as hedge instruments on our Consolidated Statements of Income for the three months ended March 31, 2026, and 2025. Note that this presentation does not reflect the expected gains or losses arising from the underlying physical transactions; therefore, it is not indicative of the economic profit or loss we realized when the underlying physical and financial transactions were settled.
|
|
Three Months Ended March 31, |
|
||||
|
|
2026 |
|
2025 |
|
||
Derivatives Not Designated as Hedging Instruments |
Location of Gain/(Loss) on Derivatives Recognized in Income |
Amount of Gain/(Loss) on Derivatives Recognized in Income |
|
||||
|
|
(in millions) |
|
||||
Commodity derivatives |
Fuel, purchased power, and cost of natural gas sold |
$ |
|
$ |
|
||
|
|
$ |
|
$ |
|
||
As discussed above, financial instruments used in our regulated Gas Utilities are not designated as cash flow hedges. However, there is no earnings impact because the unrealized gains and losses arising from the use of these financial instruments are recorded as Regulatory assets or Regulatory liabilities. The net unrealized losses included in our Regulatory asset accounts related to these financial instruments were $
We use the following fair value hierarchy for determining inputs for our financial instruments. Our assets and liabilities for financial instruments are classified and disclosed in one of the following fair value categories:
Level 1 — Unadjusted quoted prices available in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities. Level 1 instruments primarily consist of highly liquid and actively traded financial instruments with quoted pricing information on an ongoing basis.
Level 2 — Pricing inputs include quoted prices for identical or similar assets and liabilities in active markets other than quoted prices in Level 1, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from, or corroborated by, observable market data by correlation or other means.
20
Table of Contents
Level 3 — Pricing inputs are generally less observable from objective sources. These inputs reflect management’s best estimate of fair value using its own assumptions about the assumptions a market participant would use in pricing the asset or liability.
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels. We record transfers, if necessary, between levels at the end of the reporting period for all of our financial instruments.
Transfers into Level 3, if any, occur when significant inputs used to value the derivative instruments become less observable, such as a significant decrease in the frequency and volume in which the instrument is traded, negatively impacting the availability of observable pricing inputs. Transfers out of Level 3, if any, occur when the significant inputs become more observable, such as when the time between the valuation date and the delivery date of a transaction becomes shorter, positively impacting the availability of observable pricing inputs.
Recurring Fair Value Measurements
Derivatives
The commodity contracts for our Utilities segments are valued using the market approach and include forward strip pricing at liquid delivery points, exchange-traded futures, options, basis swaps, and over-the-counter swaps and options (Level 2) for wholesale electric energy and natural gas contracts. For exchange-traded futures, options, and basis swap assets and liabilities, fair value was derived using broker quotes validated by the exchange settlement pricing for the applicable contract. For over-the-counter instruments, the fair value is obtained by utilizing a nationally recognized service that obtains observable inputs to compute the fair value, which we validate by comparing our valuation with the counterparty. The fair value of these swaps includes a credit valuation adjustment based on the credit spreads of the counterparties when we are in an unrealized gain position or on our own credit spread when we are in an unrealized loss position. For additional information, see Note 1 of our Notes to the Consolidated Financial Statements in our 2025 Annual Report on Form 10-K.
The following tables set forth, by level within the fair value hierarchy, our gross assets and gross liabilities and related offsetting as permitted by GAAP that were accounted for at fair value on a recurring basis for derivative instruments.
|
As of March 31, 2026 |
|
|||||||||||||
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Cash Collateral and Counterparty Netting (a) |
|
Total |
|
|||||
|
(in millions) |
|
|||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|||||
Commodity derivatives - Gas Utilities |
$ |
|
$ |
— |
|
$ |
|
$ |
— |
|
$ |
|
|||
Total |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|||||
Commodity derivatives - Gas Utilities |
$ |
|
$ |
|
$ |
|
$ |
— |
|
$ |
|
||||
Total |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||
|
As of December 31, 2025 |
|
|||||||||||||
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Cash Collateral and Counterparty Netting (a) |
|
Total |
|
|||||
|
(in millions) |
|
|||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|||||
Commodity derivatives - Gas Utilities |
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
||||
Total |
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|||||
Commodity derivatives - Gas Utilities |
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
||||
Total |
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
||||
21
Table of Contents
Pension and Postretirement Plan Assets
The fair value of our pension and postretirement plan assets is presented in Note 13 to the Consolidated Financial Statements included in our 2025 Annual Report on Form 10-K.
Captive Insurance Cell Investments
We have investments in the Captive that may be used to pay insurance losses in the event of certain insured loss events. The Captive may hold investment assets in cash, cash equivalents, and equity and fixed income instruments. These investments are restricted for insured loss events. Additional information regarding the Captive is presented in Note 12 to the Consolidated Financial Statements included in our 2025 Annual Report on Form 10-K.
Other Fair Value Measures
The carrying amount of cash and cash equivalents, restricted cash and equivalents, and short-term borrowings approximates fair value due to their liquid or short-term nature. Cash, cash equivalents, and restricted cash are classified in Level 1 in the fair value hierarchy. Notes payable consist of commercial paper borrowings and are not traded on an exchange; therefore, they are classified as Level 2 in the fair value hierarchy.
The following table presents the carrying amounts and fair values of financial instruments not recorded at fair value on the Consolidated Balance Sheets as of:
|
March 31, 2026 |
|
December 31, 2025 |
|
||||||||
|
Carrying Amount |
|
Fair Value |
|
Carrying Amount |
|
Fair Value |
|
||||
|
(in millions) |
|
||||||||||
Long-term debt, including current maturities (a) |
$ |
|
$ |
|
$ |
|
$ |
|
||||
We record deferred gains (losses) in AOCI related to interest rate swaps designated as cash flow hedges, commodity contracts designated as cash flow hedges, and the amortization of components of our defined benefit plans. Deferred gains (losses) for our commodity contracts designated as cash flow hedges are recognized in earnings upon settlement, while deferred gains (losses) related to our interest rate swaps are recognized in earnings as they are amortized.
The following table details reclassifications out of AOCI and into Net income. The amounts in parentheses below indicate decreases to Net income in the Consolidated Statements of Income for the period, net of tax:
|
|
Amount Reclassified from AOCI |
|
||||
|
|
Three Months Ended March 31, |
|
||||
|
Location on the Consolidated Statements of Income |
2026 |
|
2025 |
|
||
|
|
(in millions) |
|
||||
Gains and (losses) on cash flow hedges: |
|
|
|
|
|
||
Interest rate swaps |
Interest expense |
$ |
( |
) |
$ |
( |
) |
Commodity contracts |
Fuel, purchased power, and cost of natural gas sold |
|
( |
) |
|
( |
) |
|
|
$ |
( |
) |
$ |
( |
) |
Income tax |
Income tax (expense) benefit |
|
|
|
|
||
Total reclassification adjustments related to cash flow hedges, net of tax |
|
$ |
( |
) |
$ |
( |
) |
|
|
|
|
|
|
||
Amortization of components of defined benefit plans: |
|
|
|
|
|
||
Actuarial (loss) |
Operations and maintenance |
|
( |
) |
|
|
|
Total reclassification adjustments related to defined benefit plans, net of tax |
|
$ |
( |
) |
$ |
|
|
Total reclassifications |
|
$ |
( |
) |
$ |
( |
) |
22
Table of Contents
Balances by classification included within AOCI, net of tax on the accompanying Consolidated Balance Sheets were as follows:
|
Derivatives Designated as Cash Flow Hedges |
|
|
|
|
|
||||||
|
Interest Rate Swaps |
|
Commodity Derivatives |
|
Employee Benefit Plans |
|
Total |
|
||||
|
(in millions) |
|
||||||||||
As of December 31, 2025 |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
Other comprehensive income (loss) before reclassifications |
|
|
|
|
|
|
|
|
||||
Amounts reclassified from AOCI |
|
|
|
|
|
|
|
|
||||
As of March 31, 2026 |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
|
Derivatives Designated as Cash Flow Hedges |
|
|
|
|
|
||||||
|
Interest Rate Swaps |
|
Commodity Derivatives |
|
Employee Benefit Plans |
|
Total |
|
||||
|
(in millions) |
|
||||||||||
As of December 31, 2024 |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
Other comprehensive income (loss) before reclassifications |
|
|
|
|
|
|
|
|
||||
Amounts reclassified from AOCI |
|
|
|
|
|
|
|
|
||||
As of March 31, 2025 |
$ |
( |
) |
$ |
|
$ |
( |
) |
$ |
( |
) |
|
Components of Net Periodic Expense
The components of net periodic expense were as follows:
|
Defined Benefit Pension Plan |
|
Supplemental Non-qualified Defined Benefit Plans |
|
Non-pension Defined Benefit Postretirement Healthcare Plan |
|
||||||||||||
Three Months Ended March 31, |
2026 |
|
2025 |
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||||
|
(in millions) |
|
||||||||||||||||
Service cost |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Interest cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Expected return on plan assets |
|
( |
) |
|
( |
) |
|
|
|
|
|
( |
) |
|
( |
) |
||
Net amortization of prior service costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Recognized net actuarial loss |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net periodic expense |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||
Plan Contributions
Contributions made in the first three months of 2026 and additional contributions anticipated for the remainder of 2026 are as follows:
|
Contributions |
|
Additional Contributions |
|
||
|
Three Months Ended March 31, 2026 |
|
Anticipated for 2026 |
|
||
|
(in millions) |
|
||||
Defined Benefit Pension Plan |
$ |
|
$ |
|
||
Non-pension Defined Benefit Postretirement Healthcare Plan |
|
|
|
|
||
Supplemental Non-qualified Defined Benefit and Defined Contribution Plans |
|
|
|
|
||
23
Table of Contents
Transfers of Production Tax Credits
In January 2025 and 2026, we entered into agreements with a third party to sell 2024 and 2025 generated PTCs for $
Income Tax (Expense) and Effective Tax Rates
Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025
Income tax (expense) for the three months ended March 31, 2026, was $(
We are a holding company that, through our subsidiaries, conducts our operations through the following
Our operating segments, which are equivalent to our reportable segments, are based on our method of internal reporting, which is generally segregated by differences in products and services. All of our operations and assets are located within the United States.
Our Electric Utilities segment includes the operating results of the regulated electric utility operations of Colorado Electric, South Dakota Electric, and Wyoming Electric, which supply regulated electric utility services to areas in Colorado, Montana, South Dakota, and Wyoming. We also own and operate non-regulated power generation and mining businesses that are vertically integrated with our Electric Utilities.
Our Gas Utilities segment consists of the operating results of our regulated natural gas utility subsidiaries in Arkansas, Colorado, Iowa, Kansas, Nebraska, and Wyoming.
Corporate and Other consists of certain unallocated expenses for administrative activities that support our operating segments. Corporate and Other also includes our captive insurance cell, business development activities that are not part of our operating segments, and inter-segment eliminations.
24
Table of Contents
Segment information was as follows:
|
Consolidating Income Statement |
|
|||||||||||||
Three Months Ended March 31, 2026 |
Electric Utilities |
|
Gas Utilities |
|
Total Reportable Segments |
|
Corporate |
|
Total |
|
|||||
|
(in millions) |
|
|||||||||||||
Revenue - |
|
|
|
|
|
|
|
|
|
|
|||||
External Customers |
$ |
|
$ |
|
$ |
|
$ |
— |
|
$ |
|
||||
Inter-segment |
|
|
|
|
|
|
|
( |
) |
|
— |
|
|||
Total revenue |
|
|
|
|
|
|
|
( |
) |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel, purchased power and cost of natural gas sold |
|
|
|
|
|
|
|
( |
) |
|
|
||||
Operations and maintenance (a) - |
|
|
|
|
|
|
|
|
|
|
|||||
Direct |
|
|
|
|
|
|
|
|
|
|
|||||
Allocated |
|
|
|
|
|
|
|
— |
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
— |
|
|
|
||||
Taxes other than income taxes |
|
|
|
|
|
|
|
— |
|
|
|
||||
Operating income (loss) |
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
( |
) |
||||
Other income, net |
|
|
|
|
|
|
|
|
|
|
|||||
Income tax (expense) |
|
|
|
|
|
|
|
|
|
( |
) |
||||
Net income |
|
|
|
|
|
|
|
|
|
|
|||||
Net income attributable to non-controlling interest |
|
|
|
|
|
|
|
|
|
( |
) |
||||
Net income available for common stock |
|
|
|
|
|
|
|
|
$ |
|
|||||
|
Consolidating Income Statement |
|
|||||||||||||
Three Months Ended March 31, 2025 |
Electric Utilities |
|
Gas Utilities |
|
Total Reportable Segments |
|
Corporate |
|
Total |
|
|||||
|
(in millions) |
|
|||||||||||||
Revenue - |
|
|
|
|
|
|
|
|
|
|
|||||
External Customers |
$ |
|
$ |
|
$ |
|
$ |
— |
|
$ |
|
||||
Inter-segment |
|
|
|
|
|
|
|
( |
) |
|
— |
|
|||
Total revenue |
|
|
|
|
|
|
|
( |
) |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Fuel, purchased power and cost of natural gas sold |
|
|
|
|
|
|
|
( |
) |
|
|
||||
Operations and maintenance (a) - |
|
|
|
|
|
— |
|
|
|
|
|
||||
Direct |
|
|
|
|
|
|
|
( |
) |
|
|
||||
Allocated |
|
|
|
|
|
|
|
— |
|
|
|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
— |
|
|
|
||||
Taxes other than income taxes |
|
|
|
|
|
|
|
— |
|
|
|
||||
Operating income (loss) |
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
( |
) |
||||
Other income, net |
|
|
|
|
|
|
|
|
|
|
|||||
Income tax (expense) |
|
|
|
|
|
|
|
|
|
( |
) |
||||
Net income |
|
|
|
|
|
|
|
|
|
|
|||||
Net income attributable to non-controlling interest |
|
|
|
|
|
|
|
|
|
( |
) |
||||
Net income available for common stock |
|
|
|
|
|
|
|
|
$ |
|
|||||
25
Table of Contents
Capital Expenditures (a) for the three months ended March 31, |
2026 |
|
2025 |
|
||
|
(in millions) |
|
||||
Electric Utilities |
$ |
|
$ |
|
||
Gas Utilities |
|
|
|
|
||
Corporate and Other |
|
|
|
|
||
Total capital expenditures |
$ |
|
$ |
|
||
Accounts Receivable and Allowance for Credit Losses
Following is a summary of Accounts receivable, net included in the accompanying Consolidated Balance Sheets as of:
|
March 31, 2026 |
|
December 31, 2025 |
|
||
|
(in millions) |
|
||||
Billed Accounts Receivable |
$ |
|
$ |
|
||
Unbilled Revenue |
|
|
|
|
||
Less: Allowance for Credit Losses |
|
( |
) |
|
( |
) |
Account Receivable, net |
$ |
|
$ |
|
||
Changes to allowance for credit losses for the three months ended March 31, 2026, and 2025, respectively, were as follows:
|
Balance at Beginning of Year |
|
Additions Charged to Costs and Expenses |
|
Recoveries and Other Additions |
|
Write-offs and Other Deductions |
|
Balance at March 31, |
|
|||||
|
(in millions) |
|
|||||||||||||
2026 |
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
||||
2025 |
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
||||
Materials, Supplies and Fuel
The following amounts by major classification are included in Materials, supplies, and fuel on the accompanying Consolidated Balance Sheets as of:
|
March 31, 2026 |
|
December 31, 2025 |
|
||
|
(in millions) |
|
||||
Materials and supplies |
$ |
|
$ |
|
||
Fuel - Electric Utilities |
|
|
|
|
||
Natural gas in storage |
|
|
|
|
||
Total materials, supplies, and fuel |
$ |
|
$ |
|
||
Accrued Liabilities
The following amounts by major classification are included in Accrued liabilities on the accompanying Consolidated Balance Sheets as of:
|
March 31, 2026 |
|
December 31, 2025 |
|
||
|
(in millions) |
|
||||
Accrued employee compensation, benefits, and withholdings |
$ |
|
$ |
|
||
Accrued property taxes |
|
|
|
|
||
Customer deposits and prepayments |
|
|
|
|
||
Accrued interest |
|
|
|
|
||
Other (none of which is individually significant) |
|
|
|
|
||
Total accrued liabilities |
$ |
|
$ |
|
||
26
Table of Contents
On August 18, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”), with NorthWestern and Merger Sub. The Merger Agreement provides for Merger Sub to merge with and into NorthWestern (the “Merger”), with NorthWestern continuing as the surviving entity and a direct wholly owned subsidiary of Black Hills Corporation, which will assume a new corporate name as the resulting parent company of the combined corporate group. At the effective time of the Merger (the “Effective Time”), each share of common stock of NorthWestern, par value $
The Merger Agreement, which was unanimously approved on August 18, 2025, by both the board of directors of Black Hills Corporation and the board of directors of NorthWestern, provides for a tax-free, all-stock business combination of Black Hills Corporation and NorthWestern upon the terms and subject to the conditions set forth therein. Such conditions include, among other things, clearance under the HSR Act, consent of the FCC, approval from each company's shareholders, and regulatory approvals, including approval from the SDPUC, NPSC and MPSC, as well as the FERC. To date, the status of these matters is as follows:
We anticipate the transaction closing in the second half of 2026, subject to the satisfaction of certain closing conditions including receipt of certain regulatory approvals as mentioned above.
Except as described below, there have been no events subsequent to March 31, 2026, which would require recognition in the Consolidated Financial Statements or disclosures.
See Note 3 for information regarding Wyoming Electric's generation reservation agreement.
See Note 14 for information regarding the pending merger with NorthWestern.
27
Table of Contents
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussions should be read in conjunction with the Notes contained herein and Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in our 2025 Annual Report on Form 10-K.
Executive Summary
We are a customer-focused energy solutions provider with a mission of Improving Life with Energy for more than 1.37 million customers and 800+ communities we serve. Our aspiration is to be the trusted energy partner across our growing eight-state footprint, including Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming. Our strategy is centered on four priorities: People & Culture—build a team that wins together, Operational Excellence—relentlessly deliver on our commitment to serve our customers, Transformation—be a simple and connected company and Growth—grow to be a dominant long-term energy provider.
We conduct our business operations through two operating segments: Electric Utilities and Gas Utilities. Certain unallocated corporate expenses that support our operating segments are presented as Corporate and Other. We conduct our utility operations under the name Black Hills Energy predominantly in rural areas of the Rocky Mountains and Midwestern states. We consider ourselves a domestic electric and natural gas utility company.
We have provided energy and served customers for 142 years, since the 1883 gold rush days in Deadwood, South Dakota. Throughout our history, the common thread that unites the past to the present is our commitment to serve our customers and communities. By being responsive and service focused, we can help our customers and communities thrive while meeting rapidly changing customer expectations.
Recent Developments
Pending Merger with NorthWestern
On August 18, 2025, we entered into the Merger Agreement with NorthWestern and Merger Sub. See Note 14 of the Condensed Notes to Consolidated Financial Statements for recent developments surrounding the pending Merger.
Business Segment Recent Developments
Electric Utilities
Gas Utilities
28
Table of Contents
Corporate and Other
Results of Operations
Certain lines of business in which we operate are highly seasonal, and revenue from, and certain expenses for, such operations may fluctuate significantly among quarterly periods. Demand for electricity and natural gas is sensitive to seasonal cooling, heating and industrial load requirements. In particular, the normal peak usage season for our Electric Utilities is June through August while the normal peak usage season for our Gas Utilities is November through March. Significant earnings variances can be expected between the Gas Utilities segment’s peak and off-peak seasons. Due to this seasonal nature, our results of operations for the three months ended March 31, 2026, and 2025, and our financial condition as of March 31, 2026, and December 31, 2025, are not necessarily indicative of the results of operations and financial condition to be expected as of or for any other period or for the entire year.
All amounts are presented on a pre-tax basis unless otherwise indicated. Minor differences in amounts may result due to rounding.
Consolidated Summary and Overview
|
Three Months Ended March 31, |
|
|||||||
|
2026 |
|
2025 |
|
2026 vs 2025 Variance |
|
|||
|
(in millions, except per share amounts) |
|
|||||||
Operating income (loss): |
|
|
|
|
|
|
|||
Electric Utilities |
$ |
59.9 |
|
$ |
54.3 |
|
$ |
5.6 |
|
Gas Utilities |
|
146.5 |
|
|
151.5 |
|
|
(5.0 |
) |
Corporate and Other (a) |
|
(4.5 |
) |
|
(0.8 |
) |
|
(3.7 |
) |
Operating income |
|
201.9 |
|
|
205.0 |
|
|
(3.1 |
) |
|
|
|
|
|
|
|
|||
Interest expense, net |
|
(51.9 |
) |
|
(51.3 |
) |
|
(0.6 |
) |
Other income, net |
|
0.7 |
|
|
0.8 |
|
|
(0.1 |
) |
Income tax (expense) |
|
(17.6 |
) |
|
(18.1 |
) |
|
0.5 |
|
Net income |
|
133.1 |
|
|
136.4 |
|
|
(3.3 |
) |
Net income attributable to non-controlling interest |
|
(2.1 |
) |
|
(2.1 |
) |
|
- |
|
Net income available for common stock |
$ |
131.0 |
|
$ |
134.3 |
|
$ |
(3.3 |
) |
|
|
|
|
|
|
|
|||
Weighted average common shares outstanding, Diluted |
|
75.6 |
|
|
71.8 |
|
|
3.8 |
|
Total earnings per share of common stock, Diluted |
$ |
1.73 |
|
$ |
1.87 |
|
$ |
(0.14 |
) |
Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025:
Segment Operating Results
A discussion of operating results from our business segments follows. Unless otherwise indicated, segment information does not include inter-segment eliminations.
29
Table of Contents
Non-GAAP Financial Measures
The following discussion includes financial information prepared in accordance with GAAP and a “non-GAAP financial measure", Electric and Gas Utility margin. Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. We define Electric and Gas Utility margin as operating revenue less cost of fuel, purchased power and cost of natural gas sold. Electric and Gas Utility margin is a non-GAAP financial measure due to the exclusion of operation and maintenance expenses determined to be directly attributable to revenue-producing activities, depreciation and amortization expenses, and taxes other than income taxes from the measure.
We believe that Gas and Electric Utility margin provides a useful basis for evaluating our segment operating results since our Utilities have regulatory mechanisms that allow them to pass prudently incurred costs of energy through to the customer in current rates. As a result, management uses Gas and Electric Utility margin internally when assessing the financial performance of our operating segments as this measure excludes the majority of revenue fluctuations caused by changes in these costs of energy. Similarly, the presentation of Gas and Electric Utility margin is intended to supplement investors’ understanding of operating performance.
Our Electric and Gas Utility margin measure may not be comparable to other companies’ Electric and Gas Utility margin measures. The following table includes a reconciliation of Electric and Gas Utility margin to Gross margin, the most directly comparable GAAP measure:
|
Electric Utilities |
|
Gas Utilities |
|
||||||||
|
Three Months Ended March 31, |
|
Three Months Ended March 31, |
|
||||||||
|
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
|
(in millions) |
|
||||||||||
Revenue |
$ |
241.6 |
|
$ |
236.7 |
|
$ |
543.1 |
|
$ |
572.4 |
|
Fuel, purchased power and cost of natural gas sold |
|
(66.8 |
) |
|
(67.2 |
) |
|
(271.2 |
) |
|
(292.6 |
) |
Operations and maintenance (a) |
|
(39.2 |
) |
|
(41.9 |
) |
|
(41.1 |
) |
|
(46.2 |
) |
Depreciation and amortization |
|
(40.5 |
) |
|
(37.1 |
) |
|
(34.2 |
) |
|
(32.1 |
) |
Taxes other than income taxes |
|
(9.2 |
) |
|
(9.3 |
) |
|
(8.9 |
) |
|
(8.3 |
) |
Gross margin (GAAP) |
$ |
85.9 |
|
$ |
81.2 |
|
$ |
187.7 |
|
$ |
193.2 |
|
Operations and maintenance (a) |
|
39.2 |
|
|
41.9 |
|
|
41.1 |
|
|
46.2 |
|
Depreciation and amortization |
|
40.5 |
|
|
37.1 |
|
|
34.2 |
|
|
32.1 |
|
Taxes other than income taxes |
|
9.2 |
|
|
9.3 |
|
|
8.9 |
|
|
8.3 |
|
Electric and Gas Utility margin (non-GAAP) |
$ |
174.8 |
|
$ |
169.5 |
|
$ |
271.9 |
|
$ |
279.8 |
|
30
Table of Contents
Electric Utilities
Operating results for the Electric Utilities were as follows:
|
Three Months Ended March 31, |
|
|||||||
|
2026 |
|
2025 |
|
2026 vs 2025 Variance |
|
|||
|
(in millions) |
|
|||||||
Revenue |
$ |
241.6 |
|
$ |
236.7 |
|
$ |
4.9 |
|
Fuel and purchased power |
|
66.8 |
|
|
67.2 |
|
|
(0.4 |
) |
Electric Utility margin (non-GAAP) (a) |
|
174.8 |
|
|
169.5 |
|
|
5.3 |
|
|
|
|
|
|
|
|
|||
Operations and maintenance |
|
65.1 |
|
|
68.8 |
|
|
(3.7 |
) |
Depreciation and amortization |
|
40.6 |
|
|
37.1 |
|
|
3.5 |
|
Taxes other than income taxes |
|
9.2 |
|
|
9.3 |
|
|
(0.1 |
) |
Total operating expenses (excluding Fuel and purchased power) |
|
114.9 |
|
|
115.2 |
|
|
(0.3 |
) |
|
|
|
|
|
|
|
|||
Operating income |
$ |
59.9 |
|
$ |
54.3 |
|
$ |
5.6 |
|
Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025:
|
(in millions) |
|
|
New rates and rider recovery |
$ |
13.3 |
|
Residential and commercial customer usage |
|
(3.6 |
) |
Weather |
|
(3.2 |
) |
Other |
|
(1.2 |
) |
|
$ |
5.3 |
|
31
Table of Contents
Operating Statistics
|
Revenue |
|
Quantities Sold |
|
||||||||
|
Three Months Ended March 31, |
|
Three Months Ended March 31, |
|
||||||||
By Customer Class |
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
|
(in millions) |
|
(in GWh) |
|
||||||||
Retail Revenue - |
|
|
|
|
|
|
|
|
||||
Residential |
$ |
63.1 |
|
$ |
66.4 |
|
|
358.9 |
|
|
406.4 |
|
Commercial |
|
70.0 |
|
|
68.8 |
|
|
492.2 |
|
|
517.2 |
|
Industrial (a) |
|
56.2 |
|
|
48.2 |
|
|
707.4 |
|
|
609.8 |
|
Municipal |
|
4.3 |
|
|
4.5 |
|
|
31.1 |
|
|
34.6 |
|
Other Retail |
|
3.4 |
|
|
3.4 |
|
|
— |
|
|
— |
|
Subtotal Retail Revenue - Electric |
|
197.0 |
|
|
191.3 |
|
|
1,589.6 |
|
|
1,568.0 |
|
Wholesale |
|
6.0 |
|
|
7.1 |
|
|
140.1 |
|
|
147.8 |
|
Market - off-system sales |
|
10.9 |
|
|
11.3 |
|
|
198.3 |
|
|
173.6 |
|
Transmission |
|
12.0 |
|
|
12.1 |
|
|
— |
|
|
— |
|
Other (b) |
|
15.7 |
|
|
14.9 |
|
|
— |
|
|
— |
|
Total Revenue and Quantities Sold |
$ |
241.6 |
|
$ |
236.7 |
|
|
1,928.0 |
|
|
1,889.4 |
|
Other Uses, Losses, or Generation, net (c) |
|
|
|
|
|
103.2 |
|
|
94.1 |
|
||
Total Energy |
|
|
|
|
|
2,031.2 |
|
|
1,983.5 |
|
||
|
Revenue |
|
Quantities Sold |
|
||||||||
|
Three Months Ended March 31, |
|
Three Months Ended March 31, |
|
||||||||
By Business Unit |
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
|
(in millions) |
|
(in GWh) |
|
||||||||
Colorado Electric |
$ |
69.2 |
|
$ |
72.4 |
|
|
495.9 |
|
|
532.3 |
|
South Dakota Electric |
|
86.7 |
|
|
86.9 |
|
|
679.7 |
|
|
682.0 |
|
Wyoming Electric |
|
74.8 |
|
|
66.6 |
|
|
726.6 |
|
|
645.8 |
|
Integrated Generation |
|
10.9 |
|
|
10.8 |
|
|
25.8 |
|
|
29.3 |
|
Total Revenue and Quantities Sold |
$ |
241.6 |
|
$ |
236.7 |
|
|
1,928.0 |
|
|
1,889.4 |
|
|
Three Months Ended March 31, |
|
||||
Quantities Generated and Purchased by Fuel Type |
2026 |
|
2025 |
|
||
|
(in GWh) |
|
||||
Generated: |
|
|
|
|
||
Coal (a) |
|
490.2 |
|
|
599.9 |
|
Natural Gas and Oil |
|
441.7 |
|
|
512.1 |
|
Wind |
|
186.8 |
|
|
175.4 |
|
Total Generated |
|
1,118.7 |
|
|
1,287.4 |
|
Purchased: |
|
|
|
|
||
Coal, Natural Gas, Oil, and Other Market Purchases |
|
562.4 |
|
|
375.7 |
|
Wind and Solar |
|
350.1 |
|
|
320.4 |
|
Total Purchased (b) |
|
912.5 |
|
|
696.1 |
|
|
|
|
|
|
||
Total Generated and Purchased |
|
2,031.2 |
|
|
1,983.5 |
|
32
Table of Contents
|
Three Months Ended March 31, |
|
||||
Quantities Generated and Purchased by Business Unit |
2026 |
|
2025 |
|
||
|
(in GWh) |
|
||||
Generated: |
|
|
|
|
||
Colorado Electric |
|
143.8 |
|
|
184.3 |
|
South Dakota Electric (a) |
|
400.6 |
|
|
478.9 |
|
Wyoming Electric |
|
180.5 |
|
|
219.3 |
|
Integrated Generation |
|
393.8 |
|
|
404.9 |
|
Total Generated |
|
1,118.7 |
|
|
1,287.4 |
|
Purchased: |
|
|
|
|
||
Colorado Electric |
|
104.5 |
|
|
90.2 |
|
South Dakota Electric (a) |
|
300.3 |
|
|
211.3 |
|
Wyoming Electric (b) |
|
491.2 |
|
|
376.1 |
|
Integrated Generation |
|
16.5 |
|
|
18.5 |
|
Total Purchased |
|
912.5 |
|
|
696.1 |
|
|
|
|
|
|
||
Total Generated and Purchased |
|
2,031.2 |
|
|
1,983.5 |
|
|
Three Months Ended March 31, |
|||
|
2026 |
2025 |
||
Degree Days |
Actual |
Variance from Normal |
Actual |
Variance from Normal |
Heating Degree Days: |
|
|
|
|
Colorado Electric |
2,001 |
(21)% |
2,733 |
9% |
South Dakota Electric |
2,567 |
(22)% |
3,438 |
5% |
Wyoming Electric |
2,325 |
(23)% |
3,140 |
5% |
Combined (a) |
2.263 |
(22)% |
3,060 |
7% |
|
|
|
|
|
Cooling Degree Days: |
|
|
|
|
Colorado Electric |
11 |
N/M |
--- |
--- |
South Dakota Electric |
--- |
--- |
--- |
--- |
Wyoming Electric |
--- |
--- |
--- |
--- |
Combined (a) |
5 |
N/M |
--- |
--- |
33
Table of Contents
Gas Utilities
Operating results for the Gas Utilities were as follows:
|
Three Months Ended March 31, |
|
|||||||
|
2026 |
|
2025 |
|
2026 vs 2025 Variance |
|
|||
|
(in millions) |
|
|||||||
Revenue |
$ |
543.1 |
|
$ |
572.4 |
|
$ |
(29.3 |
) |
Cost of natural gas sold |
|
271.2 |
|
|
292.6 |
|
|
(21.4 |
) |
Gas Utility margin (non-GAAP) (a) |
|
271.9 |
|
|
279.8 |
|
|
(7.9 |
) |
|
|
|
|
|
|
|
|||
Operations and maintenance |
|
82.3 |
|
|
87.9 |
|
|
(5.6 |
) |
Depreciation and amortization |
|
34.2 |
|
|
32.1 |
|
|
2.1 |
|
Taxes other than income taxes |
|
8.9 |
|
|
8.3 |
|
|
0.6 |
|
Total operating expenses (excluding Cost of natural gas sold) |
|
125.4 |
|
|
128.3 |
|
|
(2.9 |
) |
|
|
|
|
|
|
|
|||
Operating income |
$ |
146.5 |
|
$ |
151.5 |
|
$ |
(5.0 |
) |
Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025:
|
(in millions) |
|
|
Weather |
$ |
(13.2 |
) |
Retail customer usage |
|
(2.1 |
) |
Mark-to-market on non-utility natural gas commodity contracts |
|
(0.7 |
) |
New rates and rider recovery |
|
8.8 |
|
Other |
|
(0.7 |
) |
|
$ |
(7.9 |
) |
Operating Statistics
|
Revenue |
|
Quantities Sold and Transported |
|
||||||||
|
Three Months Ended March 31, |
|
Three Months Ended March 31, |
|
||||||||
By Customer Class |
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
|
(in millions) |
|
(Dth in millions) |
|
||||||||
Retail Revenue - |
|
|
|
|
|
|
|
|
||||
Residential |
$ |
311.7 |
|
$ |
344.1 |
|
|
25.2 |
|
|
30.7 |
|
Commercial |
|
125.5 |
|
|
134.3 |
|
|
12.2 |
|
|
14.0 |
|
Industrial |
|
6.9 |
|
|
6.6 |
|
|
0.9 |
|
|
1.0 |
|
Other Retail (a) |
|
14.6 |
|
|
14.7 |
|
|
— |
|
|
— |
|
Subtotal Retail Revenue - Gas |
|
458.7 |
|
|
499.7 |
|
|
38.3 |
|
|
45.7 |
|
Transportation |
|
54.5 |
|
|
57.7 |
|
|
46.2 |
|
|
50.4 |
|
Other (b) |
|
29.9 |
|
|
15.0 |
|
|
— |
|
|
— |
|
Total Revenue and Quantities Sold |
$ |
543.1 |
|
$ |
572.4 |
|
|
84.5 |
|
|
96.1 |
|
34
Table of Contents
|
Revenue |
|
Quantities Sold and Transported |
|
||||||||
|
Three Months Ended March 31, |
|
Three Months Ended March 31, |
|
||||||||
By Business Unit |
2026 |
|
2025 |
|
2026 |
|
2025 |
|
||||
|
(in millions) |
|
(Dth in millions) |
|
||||||||
Arkansas Gas |
$ |
122.1 |
|
$ |
124.8 |
|
|
11.5 |
|
|
13.2 |
|
Colorado Gas |
|
90.2 |
|
|
115.8 |
|
|
10.8 |
|
|
13.2 |
|
Iowa Gas |
|
93.8 |
|
|
86.8 |
|
|
14.1 |
|
|
15.2 |
|
Kansas Gas |
|
60.6 |
|
|
66.1 |
|
|
10.2 |
|
|
11.7 |
|
Nebraska Gas |
|
130.9 |
|
|
130.2 |
|
|
26.2 |
|
|
29.6 |
|
Wyoming Gas |
|
45.5 |
|
|
48.7 |
|
|
11.7 |
|
|
13.2 |
|
Total Revenue and Quantities Sold |
$ |
543.1 |
|
$ |
572.4 |
|
|
84.5 |
|
|
96.1 |
|
|
Three Months Ended March 31, |
|||
|
2026 |
2025 |
||
Heating Degree Days |
Actual |
Variance from Normal |
Actual |
Variance from Normal |
Arkansas Gas (a) |
1,572 |
(16)% |
1,957 |
2% |
Colorado Gas |
2,059 |
(27)% |
2,837 |
2% |
Iowa Gas |
2,994 |
(9)% |
3,288 |
(1)% |
Kansas Gas (a) |
2,034 |
(15)% |
2,616 |
10% |
Nebraska Gas (a) |
2,545 |
(15)% |
3,039 |
2% |
Wyoming Gas |
2,464 |
(24)% |
3,323 |
3% |
Combined (b) |
2,513 |
(18)% |
3,082 |
1% |
Corporate and Other
Corporate and Other operating results, including inter-segment eliminations, were as follows:
|
Three Months Ended March 31, |
|
|||||||
|
2026 |
|
2025 |
|
2026 vs 2025 Variance |
|
|||
|
(in millions) |
|
|||||||
Operating income (loss) |
$ |
(4.5 |
) |
$ |
(0.8 |
) |
$ |
(3.7 |
) |
Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025:
Consolidated Interest Expense, Other Income and Income Tax Expense
|
Three Months Ended March 31, |
|
|||||||
|
2026 |
|
2025 |
|
2026 vs 2025 Variance |
|
|||
|
(in millions) |
|
|||||||
Interest expense, net |
$ |
(51.9 |
) |
$ |
(51.3 |
) |
$ |
(0.6 |
) |
Other income, net |
|
0.7 |
|
|
0.8 |
|
|
(0.1 |
) |
Income tax (expense) |
|
(17.6 |
) |
|
(18.1 |
) |
|
0.5 |
|
35
Table of Contents
Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025:
Liquidity and Capital Resources
The following table provides an informational summary of our liquidity and capital structure as of:
|
March 31, 2026 |
|
December 31, 2025 |
|
||
|
(dollars in millions) |
|
||||
Cash and cash equivalents |
$ |
23.6 |
|
$ |
182.8 |
|
Available capacity under Revolving Credit Facility and CP Program (a) |
|
494.6 |
|
|
746.8 |
|
Available liquidity |
$ |
518.2 |
|
$ |
929.6 |
|
|
|
|
|
|
||
Capital structure |
|
|
|
|
||
Short-term debt |
$ |
662.2 |
|
$ |
- |
|
Long-term debt |
|
3,992.5 |
|
|
4,701.1 |
|
Total debt |
|
4,654.7 |
|
|
4,701.1 |
|
Total stockholders' equity (excludes non-controlling interest) |
|
3,945.2 |
|
|
3,823.6 |
|
Total capitalization |
$ |
8,599.9 |
|
$ |
8,524.7 |
|
|
|
|
|
|
||
Debt to capitalization |
|
54.1 |
% |
|
55.1 |
% |
Long-term debt to total debt |
|
85.8 |
% |
|
100.0 |
% |
Future Financing Plans
We plan to fund our capital plan and strategic objectives by using cash generated from operating activities and various financing alternatives, which could include our Revolving Credit Facility, our CP Program, and the issuance of common stock under our ATM or in a secondary offering. Our current shelf registration statement expires in the second quarter of 2026 and we expect to file a new shelf registration statement to replace it. Additionally, we plan to re-finance our $400 million, 3.15%, senior unsecured notes due January 2027, at or before the maturity date.
36
Table of Contents
CASH FLOW ACTIVITIES
The following tables summarize our cash flows for the three months ended March 31, 2026:
Operating Activities:
|
Three Months Ended March 31, |
|
|||||||
|
2026 |
|
2025 |
|
2026 vs 2025 Variance |
|
|||
|
(in millions) |
|
|||||||
Net income |
$ |
133.1 |
|
$ |
136.4 |
|
$ |
(3.3 |
) |
Non-cash adjustments to Net income |
|
115.3 |
|
|
112.9 |
|
|
2.4 |
|
Total earnings |
$ |
248.4 |
|
$ |
249.3 |
|
$ |
(0.9 |
) |
Changes in certain operating assets and liabilities: |
|
|
|
|
|
|
|||
Materials, supplies and fuel, Accounts receivable and other current assets |
|
45.0 |
|
|
(17.3 |
) |
|
62.3 |
|
Accounts payable and other current liabilities |
|
(119.3 |
) |
|
(56.0 |
) |
|
(63.3 |
) |
Regulatory assets |
|
5.4 |
|
|
52.6 |
|
|
(47.2 |
) |
Net inflow (outflow) from changes in certain operating assets and liabilities |
$ |
(68.9 |
) |
$ |
(20.7 |
) |
$ |
(48.2 |
) |
Other operating activities |
|
(3.3 |
) |
|
(0.8 |
) |
|
(2.5 |
) |
Net cash provided by operating activities |
$ |
176.2 |
|
$ |
227.8 |
|
$ |
(51.6 |
) |
Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025
Investing Activities:
|
Three Months Ended March 31, |
|
|||||||
|
2026 |
|
2025 |
|
2026 vs 2025 Variance |
|
|||
|
(in millions) |
|
|||||||
Capital expenditures |
$ |
(267.4 |
) |
$ |
(152.9 |
) |
$ |
(114.5 |
) |
Other investing activities |
|
(2.6 |
) |
|
(2.3 |
) |
|
(0.3 |
) |
Net cash (used in) investing activities |
$ |
(270.0 |
) |
$ |
(155.2 |
) |
$ |
(114.8 |
) |
Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025
37
Table of Contents
Financing Activities:
|
Three Months Ended March 31, |
|
|||||||
|
2026 |
|
2025 |
|
2026 vs 2025 Variance |
|
|||
|
(in millions) |
|
|||||||
Dividends paid on common stock |
$ |
(53.1 |
) |
$ |
(48.6 |
) |
$ |
(4.5 |
) |
Common stock issued |
|
40.7 |
|
|
45.6 |
|
|
(4.9 |
) |
Short-term and long-term debt borrowings (repayments), net |
|
(47.8 |
) |
|
(73.9 |
) |
|
26.1 |
|
Distributions to non-controlling interests |
|
(2.5 |
) |
|
(3.8 |
) |
|
1.3 |
|
Other financing activities |
|
(2.5 |
) |
|
(1.2 |
) |
|
(1.3 |
) |
Net cash provided by (used in) financing activities |
$ |
(65.2 |
) |
$ |
(81.9 |
) |
$ |
16.7 |
|
Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025
CAPITAL RESOURCES
See Note 5 of the Condensed Notes to Consolidated Financial Statements for recent financing updates and financial covenants information.
CREDIT RATINGS
The following table represents the credit ratings and outlook and risk profile of BHC as of the date of this report:
Rating Agency |
Senior Unsecured Rating |
Outlook |
S&P (a) |
BBB+ |
Stable |
Moody's (b) |
Baa2 |
Stable |
The following table represents the credit rating of South Dakota Electric as of the date of this report:
Rating Agency |
Senior Secured Rating |
S&P |
A |
38
Table of Contents
CAPITAL REQUIREMENTS
Capital Expenditures
|
Actual (a) |
Forecasted (b) |
|
||||||||||||||
Capital Expenditures by Segment |
Three Months Ended |
2026 |
|
2027 |
|
2028 |
|
2029 |
|
2030 |
|
||||||
|
(in millions) |
|
|||||||||||||||
Electric Utilities |
$ |
190 |
$ |
471 |
|
$ |
367 |
|
$ |
455 |
|
$ |
356 |
|
$ |
391 |
|
Gas Utilities |
|
68 |
|
396 |
|
|
455 |
|
|
507 |
|
|
591 |
|
|
552 |
|
Corporate and Other |
|
2 |
|
39 |
|
|
22 |
|
|
21 |
|
|
22 |
|
|
25 |
|
|
$ |
260 |
$ |
906 |
|
$ |
844 |
|
$ |
983 |
|
$ |
969 |
|
$ |
968 |
|
Common Stock Dividends
Dividends paid on our common stock totaled $53.1 million for the three months ended March 31, 2026, or $0.703 per share. On April 28, 2026, our board of directors declared a quarterly dividend of $0.703 per share payable June 1, 2026, equivalent to an annual dividend of $2.812 per share. The amount of any future cash dividends to be declared and paid, if any, will depend upon, among other things, our financial condition, funds from operations, the level of our capital expenditures, restrictions under our Revolving Credit Facility, and our future business prospects.
Critical Accounting Estimates
A summary of our critical accounting estimates is included in our 2025 Annual Report on Form 10-K. There were no material changes made as of March 31, 2026.
New Accounting Pronouncements
See Note 1 of the Condensed Notes to Consolidated Financial Statements for a description of recent accounting pronouncements, if any, and our expectation of their impact on our results of operations and financial condition.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes to our quantitative and qualitative disclosures about market risk previously disclosed in Item 7A of our 2025 Annual Report on Form 10-K.
ITEM 4. CONTROLS AND PROCEDURES
Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2026. Based on their evaluation, they have concluded that our disclosure controls and procedures were effective at March 31, 2026.
Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
During the quarter ended March 31, 2026, there have been no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely, to materially affect our internal control over financial reporting.
39
Table of Contents
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For information regarding legal proceedings, see Note 3 of the Condensed Notes to Consolidated Financial Statements and Note 3 in Item 8 of our 2025 Annual Report on Form 10-K.
ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors previously disclosed in Item 1A of Part I in our 2025 Annual Report on Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table contains monthly information about our acquisitions of equity securities for the three months ended March 31, 2026:
Period |
Total Number of Shares Purchased (a) |
|
Average Price Paid per Share |
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs |
|
||||
January 1, 2026 - January 31, 2026 |
|
1 |
|
$ |
69.42 |
|
|
— |
|
|
— |
|
February 1, 2026 - February 28, 2026 |
|
32,951 |
|
|
72.16 |
|
|
— |
|
|
— |
|
March 1, 2026 - March 31, 2026 |
|
1 |
|
|
73.63 |
|
|
— |
|
|
— |
|
Total |
|
32,953 |
|
$ |
72.16 |
|
|
— |
|
|
— |
|
ITEM 4. MINE SAFETY DISCLOSURES
Information concerning mine safety violations or other regulatory matters required by Sections 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is included in Exhibit 95.
ITEM 5. OTHER INFORMATION
None of our directors or officers
ITEM 6. EXHIBITS
Exhibits filed herewithin are designated by an asterisk (*). All exhibits not so designated are incorporated by reference to a prior filing, as indicated. Items constituting a board of director or management compensatory plan are designated by a cross (†).
Exhibit Number |
Description |
10.1*† |
Form of Restricted Stock Unit Award Agreement (Non-Employee Director) effective for awards granted on or after May 1, 2026. |
31.1* |
Certification of Chief Executive Officer pursuant to Rule 13a - 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes - Oxley Act of 2002. |
31.2* |
Certification of Chief Financial Officer pursuant to Rule 13a - 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes - Oxley Act of 2002. |
32.1* |
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of 2002. |
32.2* |
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of 2002. |
95* |
Mine Safety and Health Administration Safety Data. |
101.INS* |
Inline 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* |
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents |
104* |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
40
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
BLACK HILLS CORPORATION
|
|
/s/ Linden R. Evans |
|
|
Linden R. Evans, President and |
|
|
Chief Executive Officer |
|
|
|
|
|
/s/ Kimberly F. Nooney |
|
|
Kimberly F. Nooney, Senior Vice President and |
|
|
Chief Financial Officer |
|
|
|
Dated: |
May 7, 2026 |
|
41