x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES |
EXCHANGE ACT OF 1934 | |
For the quarterly period ended June 30, 2017 | |
OR | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES |
EXCHANGE ACT OF 1934 | |
For the transition period from __________ to __________. | |
Commission File Number 001-31303 |
Black Hills Corporation | |
Incorporated in South Dakota | IRS Identification Number 46-0458824 |
625 Ninth Street | |
Rapid City, South Dakota 57701 | |
Registrant’s telephone number (605) 721-1700 | |
Former name, former address, and former fiscal year if changed since last report | |
NONE |
Yes x | No o |
Yes x | No o |
Large accelerated filer x | Accelerated filer o | |||
Non-accelerated filer o | (Do not check if a smaller reporting company) | |||
Smaller reporting company o | ||||
Emerging growth company o |
Yes o | No x |
Class | Outstanding at July 31, 2017 | ||
Common stock, $1.00 par value | 53,475,190 | shares |
TABLE OF CONTENTS | |||
Page | |||
Glossary of Terms and Abbreviations | |||
PART I. | FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | ||
Condensed Consolidated Statements of Income - unaudited | |||
Three and Six Months Ended June 30, 2017 and 2016 | |||
Condensed Consolidated Statements of Comprehensive Income - unaudited | |||
Three and Six Months Ended June 30, 2017 and 2016 | |||
Condensed Consolidated Balance Sheets - unaudited | |||
June 30, 2017, December 31, 2016 and June 30, 2016 | |||
Condensed Consolidated Statements of Cash Flows - unaudited | |||
Six Months Ended June 30, 2017 and 2016 | |||
Notes to Condensed Consolidated Financial Statements - unaudited | |||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | ||
Item 4. | Controls and Procedures | ||
PART II. | OTHER INFORMATION | ||
Item 1. | Legal Proceedings | ||
Item 1A. | Risk Factors | ||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | ||
Item 4. | Mine Safety Disclosures | ||
Item 5. | Other Information | ||
Item 6. | Exhibits | ||
Signatures | |||
Index to Exhibits |
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., a direct, wholly-owned subsidiary of Black Hills Gas Inc. |
Stockton Storage | Arkansas Gas storage facility |
ARMRP | At-Risk Meter Relocation Program |
ASC | Accounting Standards Codification |
ASU | Accounting Standards Update issued by the FASB |
ATM | At-the-market equity offering program |
Availability | The availability factor of a power plant is the percentage of the time that it is available to provide energy. |
Bbl | Barrel |
BHC | Black Hills Corporation; the Company |
Black Hills Gas | Black Hills Gas, LLC, a subsidiary of Black Hills Gas Holdings, which was previously named SourceGas LLC |
Black Hills Gas Holdings | Black Hills Gas Holdings, LLC, a subsidiary of Black Hills Utility Holdings, which was previously named SourceGas Holdings LLC |
Black Hills Electric Generation | Black Hills Electric Generation, LLC, a direct, wholly-owned subsidiary of Black Hills Non-regulated Holdings |
Black Hills Energy | The name used to conduct the business of our utility companies |
Black Hills Energy Arkansas Gas | Includes the acquired SourceGas utility Black Hills Energy Arkansas, Inc. utility operations |
Black Hills Energy Colorado Electric | Includes Colorado Electric’s utility operations |
Black Hills Energy Colorado Gas | Includes Black Hills Energy Colorado Gas utility operations, as well as the acquired SourceGas utility Black Hills Gas Distribution’s Colorado gas operations and RMNG |
Black Hills Energy Iowa Gas | Includes Black Hills Energy Iowa gas utility operations |
Black Hills Energy Kansas Gas | Includes Black Hills Energy Kansas gas utility operations |
Black Hills Energy Nebraska Gas | Includes Black Hills Energy Nebraska gas utility operations, as well as the acquired SourceGas utility Black Hills Gas Distribution’s Nebraska gas operations |
Black Hills Energy South Dakota Electric | Includes Black Hills Power operations in South Dakota, Wyoming and Montana |
Black Hills Energy Wyoming Electric | Includes Cheyenne Light’s electric utility operations |
Black Hills Energy Wyoming Gas | Includes Cheyenne Light’s natural gas utility operations, as well as the acquired SourceGas utility Black Hills Gas Distribution’s Wyoming gas operations |
Black Hills Gas Distribution | Black Hills Gas Distribution, LLC, a company acquired in the SourceGas Acquisition that conducts the gas distribution operations in Colorado, Nebraska and Wyoming. It was formerly named SourceGas Distribution LLC. |
Black Hills Non-regulated Holdings | Black Hills Non-regulated Holdings, LLC, a direct, wholly-owned subsidiary of Black Hills Corporation |
Black Hills Power | Black Hills Power, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation (doing business as Black Hills Energy) |
Black Hills Utility Holdings | Black Hills Utility Holdings, Inc., a direct, wholly-owned subsidiary of Black Hills Corporation (doing business as Black Hills Energy) |
Black Hills Wyoming | Black Hills Wyoming, LLC, a direct, wholly-owned subsidiary of Black Hills Electric Generation |
Btu | British thermal unit |
CAPP | Customer Appliance Protection Plan |
Ceiling Test | Related to our Oil and Gas subsidiary, capitalized costs, less accumulated amortization and related deferred income taxes, are subject to a ceiling test which limits the pooled costs to the aggregate of the discounted value of future net revenue attributable to proved natural gas and crude oil reserves using prices and a discount rate defined by the SEC plus the lower of cost or market value of unevaluated properties. |
Cheyenne Light | Cheyenne Light, Fuel and Power Company, a direct, wholly-owned subsidiary of Black Hills Corporation (doing business as Black Hills Energy) |
CIAC | Contribution In Aid of Construction |
City of Gillette | Gillette, Wyoming |
Colorado Electric | Black Hills Colorado Electric Utility Company, LP, an indirect, wholly-owned subsidiary of Black Hills Utility Holdings (doing business as Black Hills Energy) |
Colorado Gas | Black Hills Colorado Gas Utility Company, LP, an indirect, wholly-owned subsidiary of Black Hills Utility Holdings (doing business as Black Hills Energy) |
Colorado IPP | Black Hills Colorado IPP, LLC a 50.1% owned subsidiary of Black Hills Electric Generation |
Consolidated Indebtedness to Capitalization Ratio | Any Indebtedness outstanding at such time, divided by Capital at such time. Capital being Consolidated Net-Worth (excluding noncontrolling interest and including the aggregate outstanding amount of RSNs) plus Consolidated Indebtedness (including letters of credit, certain guarantees issued and excluding RSNs) as defined within the current Credit Agreement. |
Cooling Degree Day | A cooling degree day is equivalent to each degree that the average of the high and low temperature 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 over a 30-year average. |
Cost of Service Gas Program (COSG) | Proposed Cost of Service Gas Program designed to provide long-term natural gas price stability for the Company’s utility customers, along with a reasonable expectation of customer savings over the life of the program. |
CP Program | Commercial Paper Program |
CPUC | Colorado Public Utilities Commission |
CVA | Credit Valuation Adjustment |
Dodd-Frank | Dodd-Frank Wall Street Reform and Consumer Protection Act |
DSM | Demand Side Management |
Dth | Dekatherm. A unit of energy equal to 10 therms or one million British thermal units (MMBtu) |
ECA | Energy Cost Adjustment - adjustments that allow us to pass the prudently-incurred cost of fuel and purchased energy through to customers. |
Equity Unit | Each Equity Unit has a stated amount of $50, consisting of a purchase contract issued by BHC to purchase shares of BHC common stock and a 1/20, or 5% undivided beneficial ownership interest in $1,000 principal amount of BHC RSNs due 2028. |
FASB | Financial Accounting Standards Board |
FERC | United States Federal Energy Regulatory Commission |
Fitch | Fitch Ratings |
GAAP | Accounting principles generally accepted in the United States of America |
Global Settlement | Settlement with a utilities commission where the dollar figure is agreed upon, but the specific adjustments used by each party to arrive at the figure are not specified in public rate orders. |
GSRS | Gas System Reliability Surcharge |
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 over a 30-year average. |
Iowa Gas | Black Hills Iowa Gas Utility Company, LLC, a direct, wholly-owned subsidiary of Black Hills Utility Holdings (doing business as Black Hills Energy) |
IPP | Independent power producer |
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 (doing business as Black Hills Energy) |
KCC | Kansas Corporation Commission |
kV | Kilovolt |
LIBOR | London Interbank Offered Rate |
LOE | Lease Operating Expense |
Mcf | Thousand cubic feet |
Mcfe | Thousand cubic feet equivalent |
MMBtu | Million British thermal units |
Moody’s | Moody’s Investors Service, Inc. |
MRP | Meter Relocation Program |
MW | Megawatts |
MWh | Megawatt-hours |
Nebraska Gas | Black Hills Nebraska Gas Utility Company, LLC, a direct, wholly-owned subsidiary of Black Hills Utility Holdings (doing business as Black Hills Energy) |
NGL | Natural Gas Liquids (1 barrel equals 6 Mcfe) |
NOL | Net Operating Loss |
NPSC | Nebraska Public Service Commission |
NYMEX | New York Mercantile Exchange |
NYSE | New York Stock Exchange |
Peak View Wind Project | $109 million 60 MW wind generating project for Colorado Electric, adjacent to Busch Ranch wind farm |
PPA | Power Purchase Agreement |
Revolving Credit Facility | Our $750 million credit facility used to fund working capital needs, letters of credit and other corporate purposes, which matures in 2021. |
RMNG | Rocky Mountain Natural Gas, a regulated gas utility acquired in the SourceGas Acquisition that provides regulated transmission and wholesale natural gas service to Black Hills Gas in western Colorado (doing business as Black Hills Energy) |
RSNs | Remarketable junior subordinated notes, issued on November 23, 2015 |
SDPUC | South Dakota Public Utilities Commission |
SEC | U. S. Securities and Exchange Commission |
SourceGas | SourceGas Holdings LLC and its subsidiaries, a gas utility owned by funds managed by Alinda Capital Partners and GE Energy Financial Services, a unit of General Electric Co. (NYSE:GE) that was acquired on February 12, 2016, and is now named Black Hills Gas Holdings, LLC (doing business as Black Hills Energy) |
SourceGas Acquisition | The acquisition of SourceGas Holdings, LLC by Black Hills Utility Holdings |
SourceGas Transaction | On February 12, 2016, Black Hills Utility Holdings acquired SourceGas pursuant to a purchase and sale agreement executed on July 12, 2015 for approximately $1.89 billion, which included the assumption of $760 million in debt at closing. |
S&P | Standard and Poor’s, a division of The McGraw-Hill Companies, Inc. |
South Dakota Electric | Includes Black Hills Power operations in South Dakota, Wyoming and Montana |
SSIR | System Safety and Integrity Rider |
TCA | Transmission Cost Adjustment -- adjustments passed through to the customer based on transmission costs that are higher or lower than the costs approved in the rate case. |
VIE | Variable interest entity |
Winter Storm Atlas | An October 2013 blizzard that impacted South Dakota Electric. It was the second most severe blizzard in Rapid City’s history. |
WRDC | Wyodak Resources Development Corp., a direct, wholly-owned subsidiary of Black Hills Non-regulated Holdings |
Wyodak Plant | Wyodak, a 362 MW mine-mouth coal-fired plant in Gillette, Wyoming, is owned 80% by Pacificorp and 20% by Black Hills Energy South Dakota. Our WRDC mine supplies all of the fuel for the plant. |
Wyoming Electric | Includes Cheyenne Light’s electric utility operations |
Wyoming Gas | Includes Cheyenne Light’s natural gas utility operations, as well as the acquired SourceGas utility Black Hills Gas Distribution’s Wyoming gas operations |
(unaudited) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
(in thousands, except per share amounts) | ||||||||||||
Revenue | $ | 347,978 | $ | 325,441 | $ | 901,981 | $ | 775,400 | ||||
Operating expenses: | ||||||||||||
Fuel, purchased power and cost of natural gas sold | 98,164 | 84,489 | 317,941 | 256,345 | ||||||||
Operations and maintenance | 117,374 | 112,541 | 239,504 | 219,603 | ||||||||
Depreciation, depletion and amortization | 48,663 | 47,305 | 97,310 | 91,712 | ||||||||
Taxes - property, production and severance | 13,743 | 12,760 | 27,712 | 24,877 | ||||||||
Impairment of long-lived assets | — | 25,497 | — | 39,993 | ||||||||
Other operating expenses | 1,168 | 7,551 | 3,137 | 33,982 | ||||||||
Total operating expenses | 279,112 | 290,143 | 685,604 | 666,512 | ||||||||
Operating income | 68,866 | 35,298 | 216,377 | 108,888 | ||||||||
Other income (expense): | ||||||||||||
Interest charges - | ||||||||||||
Interest expense incurred (including amortization of debt issuance costs, premiums and discounts) | (35,098 | ) | (34,609 | ) | (70,194 | ) | (66,683 | ) | ||||
Allowance for funds used during construction - borrowed | 822 | 754 | 1,308 | 1,255 | ||||||||
Capitalized interest | 130 | 268 | 299 | 503 | ||||||||
Interest income | 257 | 946 | 298 | 1,601 | ||||||||
Allowance for funds used during construction - equity | 794 | 982 | 1,286 | 1,689 | ||||||||
Other income (expense), net | (58 | ) | (47 | ) | (160 | ) | 641 | |||||
Total other income (expense), net | (33,153 | ) | (31,706 | ) | (67,163 | ) | (60,994 | ) | ||||
Income before income taxes | 35,713 | 3,592 | 149,214 | 47,894 | ||||||||
Income tax benefit (expense) | (10,402 | ) | (309 | ) | (43,757 | ) | (4,561 | ) | ||||
Net income | 25,311 | 3,283 | 105,457 | 43,333 | ||||||||
Net income attributable to noncontrolling interest | (3,116 | ) | (2,614 | ) | (6,739 | ) | (2,662 | ) | ||||
Net income available for common stock | $ | 22,195 | $ | 669 | $ | 98,718 | $ | 40,671 | ||||
Earnings per share of common stock: | ||||||||||||
Earnings per share, Basic | $ | 0.42 | $ | 0.01 | $ | 1.86 | $ | 0.79 | ||||
Earnings per share, Diluted | $ | 0.40 | $ | 0.01 | $ | 1.79 | $ | 0.78 | ||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 53,229 | 51,514 | 53,191 | 51,279 | ||||||||
Diluted | 55,384 | 52,986 | 55,179 | 52,454 | ||||||||
Dividends declared per share of common stock | $ | 0.445 | $ | 0.420 | $ | 0.890 | $ | 0.840 |
(unaudited) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
(in thousands) | ||||||||||||
Net income (loss) | $ | 25,311 | $ | 3,283 | $ | 105,457 | $ | 43,333 | ||||
Other comprehensive income (loss), net of tax: | ||||||||||||
Reclassification adjustments of benefit plan liability - prior service cost (net of tax (expense) benefit of $18 and $19 for the three months ended June 30, 2017 and 2016 and $35 and $38 for the six months ended June 30, 2017 and 2016, respectively) | (31 | ) | (36 | ) | (62 | ) | (72 | ) | ||||
Reclassification adjustments of benefit plan liability - net gain (loss) (net of tax (expense) benefit of $(146) and $(173) for the three months ended June 30, 2017 and 2016 and $(300) and $(346) for the six months ended June 30, 2017 and 2016, respectively) | 268 | 321 | 528 | 643 | ||||||||
Derivative instruments designated as cash flow hedges: | ||||||||||||
Net unrealized gains (losses) on interest rate swaps (net of tax of $0 and $4,440 for the three months ended June 30, 2017 and 2016 and $0 and $10,767 for the six months ended June 30, 2017 and 2016, respectively) | — | (8,174 | ) | — | (19,898 | ) | ||||||
Reclassification of net realized (gains) losses on settled/amortized interest rate swaps (net of tax of $(249) and $(294) for the three months ended June 30, 2017 and 2016 and $(530) and $(592) for the six months ended June 30, 2017 and 2016, respectively) | 464 | 546 | 985 | 1,098 | ||||||||
Net unrealized gains (losses) on commodity derivatives (net of tax of $(194) and $906 for the three months ended June 30, 2017 and 2016 and $(536) and $98 for the six months ended June 30, 2017 and 2016, respectively) | 331 | (1,546 | ) | 915 | (168 | ) | ||||||
Reclassification of net realized (gains) losses on settled commodity derivatives (net of tax of $143 and $1,176 for the three months ended June 30, 2017 and 2016 and $249 and $2,476 for the six months ended June 30, 2017 and 2016, respectively) | (243 | ) | (2,050 | ) | (424 | ) | (4,312 | ) | ||||
Other comprehensive income (loss), net of tax | 789 | (10,939 | ) | 1,942 | (22,709 | ) | ||||||
Comprehensive income (loss) | 26,100 | (7,656 | ) | 107,399 | 20,624 | |||||||
Less: comprehensive income attributable to noncontrolling interest | (3,116 | ) | (2,614 | ) | (6,739 | ) | (2,662 | ) | ||||
Comprehensive income (loss) available for common stock | $ | 22,984 | $ | (10,270 | ) | $ | 100,660 | $ | 17,962 |
(unaudited) | As of | ||||||||||
June 30, 2017 | December 31, 2016 | June 30, 2016 | |||||||||
(in thousands) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 11,590 | $ | 13,580 | $ | 61,859 | |||||
Restricted cash and equivalents | 2,534 | 2,274 | 1,975 | ||||||||
Accounts receivable, net | 169,957 | 263,289 | 150,227 | ||||||||
Materials, supplies and fuel | 99,126 | 107,210 | 85,189 | ||||||||
Derivative assets, current | 1,148 | 4,138 | 4,030 | ||||||||
Regulatory assets, current | 53,061 | 49,260 | 54,856 | ||||||||
Other current assets | 21,840 | 27,063 | 30,652 | ||||||||
Total current assets | 359,256 | 466,814 | 388,788 | ||||||||
Investments | 12,761 | 12,561 | 12,363 | ||||||||
Property, plant and equipment | 6,533,581 | 6,412,223 | 6,209,816 | ||||||||
Less: accumulated depreciation and depletion | (1,981,880 | ) | (1,943,234 | ) | (1,819,886 | ) | |||||
Total property, plant and equipment, net | 4,551,701 | 4,468,989 | 4,389,930 | ||||||||
Other assets: | |||||||||||
Goodwill | 1,299,454 | 1,299,454 | 1,303,453 | ||||||||
Intangible assets, net | 7,972 | 8,392 | 9,164 | ||||||||
Regulatory assets, non-current | 244,099 | 246,882 | 220,556 | ||||||||
Derivative assets, non-current | 37 | 222 | 226 | ||||||||
Other assets, non-current | 13,812 | 12,130 | 15,438 | ||||||||
Total other assets, non-current | 1,565,374 | 1,567,080 | 1,548,837 | ||||||||
TOTAL ASSETS | $ | 6,489,092 | $ | 6,515,444 | $ | 6,339,918 |
(unaudited) | As of | ||||||||||
June 30, 2017 | December 31, 2016 | June 30, 2016 | |||||||||
(in thousands, except share amounts) | |||||||||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND TOTAL EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 99,970 | $ | 153,477 | $ | 115,203 | |||||
Accrued liabilities | 201,993 | 244,034 | 218,250 | ||||||||
Derivative liabilities, current | 719 | 2,459 | 28,855 | ||||||||
Accrued income taxes, net | 5,160 | 12,552 | 10,624 | ||||||||
Regulatory liabilities, current | 17,305 | 13,067 | 34,275 | ||||||||
Notes payable | 107,975 | 96,600 | 75,000 | ||||||||
Current maturities of long-term debt | 5,743 | 5,743 | 930,743 | ||||||||
Total current liabilities | 438,865 | 527,932 | 1,412,950 | ||||||||
Long-term debt | 3,160,302 | 3,211,189 | 2,221,347 | ||||||||
Deferred credits and other liabilities: | |||||||||||
Deferred income tax liabilities, net, non-current | 589,189 | 535,606 | 530,746 | ||||||||
Derivative liabilities, non-current | 88 | 274 | 231 | ||||||||
Regulatory liabilities, non-current | 199,005 | 193,689 | 195,166 | ||||||||
Benefit plan liabilities | 176,102 | 173,682 | 173,347 | ||||||||
Other deferred credits and other liabilities | 135,510 | 138,643 | 122,015 | ||||||||
Total deferred credits and other liabilities | 1,099,894 | 1,041,894 | 1,021,505 | ||||||||
Commitments and contingencies (See Notes 8, 10, 15, 16) | |||||||||||
Redeemable noncontrolling interest | — | 4,295 | 4,171 | ||||||||
Equity: | |||||||||||
Stockholders’ equity — | |||||||||||
Common stock $1 par value; 100,000,000 shares authorized; issued 53,513,521; 53,397,467; and 52,299,075 shares, respectively | 53,514 | 53,397 | 52,299 | ||||||||
Additional paid-in capital | 1,145,493 | 1,138,982 | 1,072,927 | ||||||||
Retained earnings | 512,498 | 457,934 | 469,940 | ||||||||
Treasury stock, at cost – 39,329; 15,258; and 18,900 shares, respectively | (2,325 | ) | (791 | ) | (975 | ) | |||||
Accumulated other comprehensive income (loss) | (32,941 | ) | (34,883 | ) | (31,764 | ) | |||||
Total stockholders’ equity | 1,676,239 | 1,614,639 | 1,562,427 | ||||||||
Noncontrolling interest | 113,792 | 115,495 | 117,518 | ||||||||
Total equity | 1,790,031 | 1,730,134 | 1,679,945 | ||||||||
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND TOTAL EQUITY | $ | 6,489,092 | $ | 6,515,444 | $ | 6,339,918 |
(unaudited) | Six Months Ended June 30, | |||||
2017 | 2016 | |||||
Operating activities: | (in thousands) | |||||
Net income (loss) | $ | 105,457 | $ | 40,671 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||
Depreciation, depletion and amortization | 97,310 | 91,712 | ||||
Deferred financing cost amortization | 4,138 | 2,857 | ||||
Impairment of long-lived assets | — | 39,993 | ||||
Stock compensation | 6,589 | 7,054 | ||||
Deferred income taxes | 51,153 | 32,606 | ||||
Employee benefit plans | 5,717 | 7,782 | ||||
Other adjustments, net | (6,515 | ) | (6,332 | ) | ||
Changes in certain operating assets and liabilities: | ||||||
Materials, supplies and fuel | 7,720 | 17,722 | ||||
Accounts receivable, unbilled revenues and other operating assets | 97,902 | 82,361 | ||||
Accounts payable and other operating liabilities | (113,541 | ) | (124,695 | ) | ||
Regulatory assets - current | 3,086 | 1,862 | ||||
Regulatory liabilities - current | 5,908 | 2,994 | ||||
Contributions to defined benefit pension plans | — | (10,200 | ) | |||
Other operating activities, net | (2,055 | ) | (2,884 | ) | ||
Net cash provided by (used in) operating activities | 262,869 | 183,503 | ||||
Investing activities: | ||||||
Property, plant and equipment additions | (163,768 | ) | (199,854 | ) | ||
Acquisition, net of long term debt assumed | — | (1,124,238 | ) | |||
Other investing activities | (22 | ) | (649 | ) | ||
Net cash provided by (used in) investing activities | (163,790 | ) | (1,324,741 | ) | ||
Financing activities: | ||||||
Dividends paid on common stock | (47,544 | ) | (43,265 | ) | ||
Common stock issued | 2,965 | 57,490 | ||||
Sale of noncontrolling interest | — | 216,370 | ||||
Net (payments) borrowings of short-term debt | 11,375 | (1,800 | ) | |||
Long-term debt - issuances | — | 574,672 | ||||
Long-term debt - repayments | (52,871 | ) | (41,436 | ) | ||
Distributions to noncontrolling interest | (8,335 | ) | — | |||
Other financing activities | (6,659 | ) | 205 | |||
Net cash provided by (used in) financing activities | (101,069 | ) | 762,236 | |||
Net change in cash and cash equivalents | (1,990 | ) | (379,002 | ) | ||
Cash and cash equivalents, beginning of period | 13,580 | 440,861 | ||||
Cash and cash equivalents, end of period | $ | 11,590 | $ | 61,859 |
Three Months Ended June 30, 2016 | Six Months Ended June 30, 2016 | |||||
(in thousands, except per share amounts) | ||||||
Revenue | $ | 325,441 | $ | 854,362 | ||
Net income (loss) available for common stock | $ | 4,658 | $ | 72,978 | ||
Earnings (loss) per share, Basic | $ | 0.09 | $ | 1.42 | ||
Earnings (loss) per share, Diluted | $ | 0.09 | $ | 1.39 |
Three Months Ended June 30, 2017 | External Operating Revenue | Inter-company Operating Revenue | Net Income (Loss) Available for Common Stock | |||||||||
Segment: | ||||||||||||
Electric | $ | 165,517 | $ | 2,936 | $ | 18,832 | ||||||
Gas | 166,439 | 8 | (272 | ) | ||||||||
Power Generation (b) | 1,470 | 20,325 | 5,332 | |||||||||
Mining | 8,403 | 6,543 | 2,681 | |||||||||
Oil and Gas | 6,149 | — | (1,946 | ) | ||||||||
Corporate activities (c) | — | — | (2,432 | ) | ||||||||
Inter-company eliminations | — | (29,812 | ) | — | ||||||||
Total | $ | 347,978 | $ | — | $ | 22,195 |
Three Months Ended June 30, 2016 | External Operating Revenue | Inter-company Operating Revenue | Net Income (Loss) Available for Common Stock | |||||||||
Segment: | ||||||||||||
Electric. | $ | 158,560 | $ | 2,921 | $ | 19,229 | ||||||
Gas | 153,767 | (1,806 | ) | 987 | ||||||||
Power Generation (b) | 1,546 | 20,168 | 5,683 | |||||||||
Mining | 3,922 | 7,125 | 724 | |||||||||
Oil and Gas (e) | 7,646 | — | (19,424 | ) | ||||||||
Corporate activities (c) | — | — | (6,530 | ) | ||||||||
Inter-company eliminations | — | (28,408 | ) | — | ||||||||
Total | $ | 325,441 | $ | — | $ | 669 |
Six Months Ended June 30, 2017 | External Operating Revenue | Inter-company Operating Revenue | Net Income (Loss) Available for Common Stock | |||||||||
Segment: | ||||||||||||
Electric | $ | 337,687 | $ | 6,790 | $ | 41,062 | ||||||
Gas (a) | 531,340 | 17 | 45,738 | |||||||||
Power Generation (b) | 3,572 | 41,790 | 11,862 | |||||||||
Mining | 16,758 | 14,734 | 5,571 | |||||||||
Oil and Gas | 12,624 | — | (4,897 | ) | ||||||||
Corporate activities (c)(d) | — | — | (618 | ) | ||||||||
Inter-company eliminations | — | (63,331 | ) | — | ||||||||
Total | $ | 901,981 | $ | — | $ | 98,718 |
Six Months Ended June 30, 2016 | External Operating Revenue | Inter-company Operating Revenue | Net Income (Loss) Available for Common Stock | |||||||||
Segment: | ||||||||||||
Electric | $ | 322,091 | $ | 6,666 | $ | 38,444 | ||||||
Gas (a) | 422,434 | — | 32,914 | |||||||||
Power Generation (b) | 3,398 | 41,624 | 14,265 | |||||||||
Mining | 11,456 | 15,873 | 3,662 | |||||||||
Oil and Gas (e) | 16,021 | — | (26,448 | ) | ||||||||
Corporate activities (c)(d) | — | — | (22,166 | ) | ||||||||
Inter-company eliminations | — | (64,163 | ) | — | ||||||||
Total | $ | 775,400 | $ | — | $ | 40,671 |
(a) | Gas Utility revenue increased for the six months ended June 30, 2017 compared to the same periods in the prior year primarily due to the addition of the SourceGas utilities on February 12, 2016. |
(b) | Net income (loss) available for common stock for the three and six months ended June 30, 2017 was net of net income attributable to noncontrolling interests of $3.1 million and $6.6 million, respectively, and $2.6 million for both the three and six months ended June 30, 2016. |
(c) | Net income (loss) available for common stock for the three and six months ended June 30, 2017 and June 30, 2016 included incremental, non-recurring acquisition costs, net of tax of $0.3 million and $1.2 million, and $4.1 million and $20 million respectively. The three and six months ended June 30, 2016 also included $2.0 million and $5.7 million, respectively, of after-tax internal labor costs attributable to the acquisition. |
(d) | Net income (loss) available for common stock for the six months ended June 30, 2017 included a $1.4 million tax benefit recognized from carryback claims for specified liability losses involving prior tax years. Net income (loss) available for common stock for the six months ended June 30, 2016 included tax benefits of approximately $4.4 million as a result of the re-measurement of the liability for uncertain tax positions predicated on an agreement reached with IRS Appeals in early 2016. See Note 18. |
(e) | Net income (loss) available for common stock for the three and six months ended June 30, 2016 included non-cash after-tax impairments of oil and gas properties of $16 million and $25 million. See Note 17 to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q. |
Total Assets (net of inter-company eliminations) as of: | June 30, 2017 | December 31, 2016 | June 30, 2016 | ||||||||
Segment: | |||||||||||
Electric (a) | $ | 2,901,570 | $ | 2,859,559 | $ | 2,755,695 | |||||
Gas | 3,242,461 | 3,307,967 | 3,118,626 | ||||||||
Power Generation (a) | 66,292 | 73,445 | 80,360 | ||||||||
Mining | 67,365 | 67,347 | 71,319 | ||||||||
Oil and Gas (b) | 103,044 | 96,435 | 171,239 | ||||||||
Corporate activities | 108,360 | 110,691 | 142,679 | ||||||||
Total assets | $ | 6,489,092 | $ | 6,515,444 | $ | 6,339,918 |
(a) | The PPA under which Black Hills Colorado IPP provides generation to support Colorado Electric customers from the Pueblo Airport Generation Station is accounted for as a capital lease. As such, assets owned by our Power Generation segment are recorded at Colorado Electric under accounting for a capital lease. |
(b) | As a result of continued low commodity prices and our decision to divest non-core oil and gas assets, we recorded non-cash impairments of $107 million for the year ended December 31, 2016 and $40 million for the six months ended June 30, 2016. See Note 17 to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q. |
Accounts | Unbilled | Less Allowance for | Accounts | |||||||||
June 30, 2017 | Receivable, Trade | Revenue | Doubtful Accounts | Receivable, net | ||||||||
Electric Utilities | $ | 41,635 | $ | 33,686 | $ | (466 | ) | $ | 74,855 | |||
Gas Utilities | 62,908 | 26,584 | (2,535 | ) | 86,957 | |||||||
Power Generation | 877 | — | — | 877 | ||||||||
Mining | 2,904 | — | — | 2,904 | ||||||||
Oil and Gas | 3,280 | — | (83 | ) | 3,197 | |||||||
Corporate | 1,167 | — | — | 1,167 | ||||||||
Total | $ | 112,771 | $ | 60,270 | $ | (3,084 | ) | $ | 169,957 |
Accounts | Unbilled | Less Allowance for | Accounts | |||||||||
December 31, 2016 | Receivable, Trade | Revenue | Doubtful Accounts | Receivable, net | ||||||||
Electric Utilities | $ | 41,730 | $ | 36,463 | $ | (353 | ) | $ | 77,840 | |||
Gas Utilities | 88,168 | 88,329 | (2,026 | ) | 174,471 | |||||||
Power Generation | 1,420 | — | — | 1,420 | ||||||||
Mining | 3,352 | — | — | 3,352 | ||||||||
Oil and Gas | 3,991 | — | (13 | ) | 3,978 | |||||||
Corporate | 2,228 | — | — | 2,228 | ||||||||
Total | $ | 140,889 | $ | 124,792 | $ | (2,392 | ) | $ | 263,289 |
Accounts | Unbilled | Less Allowance for | Accounts | |||||||||
June 30, 2016 | Receivable, Trade | Revenue | Doubtful Accounts | Receivable, net | ||||||||
Electric Utilities | $ | 40,991 | $ | 34,174 | $ | (716 | ) | $ | 74,449 | |||
Gas Utilities | 47,600 | 23,124 | (2,997 | ) | 67,727 | |||||||
Power Generation | 1,229 | — | — | 1,229 | ||||||||
Mining | 1,114 | — | — | 1,114 | ||||||||
Oil and Gas | 3,094 | — | (13 | ) | 3,081 | |||||||
Corporate | 2,627 | — | — | 2,627 | ||||||||
Total | $ | 96,655 | $ | 57,298 | $ | (3,726 | ) | $ | 150,227 |
Maximum | As of | As of | As of | |||||||
Amortization | June 30, 2017 | December 31, 2016 | June 30, 2016 | |||||||
(in years) | ||||||||||
Regulatory assets | ||||||||||
Deferred energy and fuel cost adjustments - current (a)(d) | 1 | $ | 20,761 | $ | 17,491 | $ | 20,603 | |||
Deferred gas cost adjustments (a)(d) | 1 | 9,060 | 15,329 | 12,122 | ||||||
Gas price derivatives (a) | 3.5 | 11,159 | 8,843 | 11,515 | ||||||
Deferred taxes on AFUDC (b) | 45 | 15,322 | 15,227 | 13,879 | ||||||
Employee benefit plans (c) | 12 | 107,419 | 108,556 | 109,522 | ||||||
Environmental (a) | subject to approval | 1,070 | 1,108 | 1,144 | ||||||
Asset retirement obligations (a) | 44 | 510 | 505 | 505 | ||||||
Loss on reacquired debt (a) | 30 | 21,466 | 22,266 | 3,061 | ||||||
Renewable energy standard adjustment (b) | 5 | 768 | 1,605 | 2,679 | ||||||
Deferred taxes on flow through accounting (c) | 35 | 40,586 | 37,498 | 31,554 | ||||||
Decommissioning costs (e) | 6 | 14,681 | 16,859 | 18,399 | ||||||
Gas supply contract termination | 5 | 22,793 | 26,666 | 28,385 | ||||||
Other regulatory assets (a) (e) | 15 | 31,565 | 24,189 | 22,044 | ||||||
$ | 297,160 | $ | 296,142 | $ | 275,412 | |||||
Regulatory liabilities | ||||||||||
Deferred energy and gas costs (a) (d) | 1 | $ | 16,767 | $ | 10,368 | $ | 32,868 | |||
Employee benefit plan costs and related deferred taxes (c) | 12 | 67,297 | 68,654 | 62,712 | ||||||
Cost of removal (a) | 44 | 125,247 | 118,410 | 126,002 | ||||||
Revenue subject to refund | 1 | 1,518 | 2,485 | 1,616 | ||||||
Other regulatory liabilities (c) | 25 | 5,481 | 6,839 | 6,243 | ||||||
$ | 216,310 | $ | 206,756 | $ | 229,441 |
(a) | We are allowed recovery of costs, but we are not allowed a rate of return. |
(b) | In addition to recovery of costs, we are allowed a rate of return. |
(c) | In addition to recovery or repayment of costs, we are allowed a return on a portion of this amount or a reduction in rate base. |
(d) | Our deferred energy, fuel cost, and gas cost adjustments represent the cost of electricity and gas delivered to our electric and gas utility customers that is either higher or lower than current rates and will be recovered or refunded in future rates. Our electric and gas utilities file periodic quarterly, semi-annual, and/or annual filings to recover these costs based on the respective cost mechanisms approved by their applicable state utility commissions. |
(e) | In accordance with a settlement agreement approved by the SDPUC on June 16, 2017, the amortization of South Dakota Electric’s decommissioning costs of approximately $11 million, vegetation management costs of approximately $14 million, and Winter Storm Atlas costs of approximately $2.0 million will be amortized over 6 years, effective July 1, 2017. Decommissioning costs and Winter Storm Atlas costs were previously amortized over a 10 year period ending September 30, 2024. The vegetation management costs were previously unamortized. The change in amortization periods for these costs will increase annual amortization expense by approximately $2.7 million. |
June 30, 2017 | December 31, 2016 | June 30, 2016 | |||||||||
Materials and supplies | $ | 72,397 | $ | 68,456 | $ | 67,440 | |||||
Fuel - Electric Utilities | 3,106 | 3,667 | 4,659 | ||||||||
Natural gas in storage held for distribution | 23,623 | 35,087 | 13,090 | ||||||||
Total materials, supplies and fuel | $ | 99,126 | $ | 107,210 | $ | 85,189 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||
Net income (loss) available for common stock | $ | 22,195 | $ | 669 | $ | 98,718 | $ | 40,671 | |||||
Weighted average shares - basic | 53,229 | 51,514 | 53,191 | 51,279 | |||||||||
Dilutive effect of: | |||||||||||||
Equity Units (a) | 1,977 | 1,362 | 1,796 | 1,068 | |||||||||
Equity compensation | 178 | 110 | 192 | 107 | |||||||||
Weighted average shares - diluted | 55,384 | 52,986 | 55,179 | 52,454 |
(a) | Calculated using the treasury stock method. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
2017 | 2016 | 2017 | 2016 | ||||||
Equity compensation | — | 4 | — | 10 | |||||
Anti-dilutive shares | — | 4 | — | 10 |
June 30, 2017 | December 31, 2016 | June 30, 2016 | ||||||||||||||||
Balance Outstanding | Letters of Credit | Balance Outstanding | Letters of Credit | Balance Outstanding | Letters of Credit | |||||||||||||
Revolving Credit Facility | $ | — | $ | 24,540 | $ | 96,600 | $ | 36,000 | $ | 75,000 | $ | 24,700 | ||||||
CP Program | 107,975 | — | — | — | — | — | ||||||||||||
Total | $ | 107,975 | $ | 24,540 | $ | 96,600 | $ | 36,000 | $ | 75,000 | $ | 24,700 |
As of June 30, 2017 | Covenant Requirement | |||
Consolidated Indebtedness to Capitalization Ratio | 61% | Less than | 65% |
Six Months Ended June 30, 2017 | Total Stockholders’ Equity | Noncontrolling Interest | Total Equity | ||||||
(in thousands) | |||||||||
Balance at December 31, 2016 | $ | 1,614,639 | $ | 115,495 | $ | 1,730,134 | |||
Net income (loss) | 98,718 | 6,632 | 105,350 | ||||||
Other comprehensive income (loss) | 1,942 | — | 1,942 | ||||||
Dividends on common stock | (47,544 | ) | — | (47,544 | ) | ||||
Share-based compensation | 4,133 | — | 4,133 | ||||||
Issuance of common stock | — | — | — | ||||||
Dividend reinvestment and stock purchase plan | 1,530 | — | 1,530 | ||||||
Redeemable noncontrolling interest | (886 | ) | — | (886 | ) | ||||
Cumulative effect of ASU 2016-09 implementation | 3,714 | — | 3,714 | ||||||
Other stock transactions | (7 | ) | — | (7 | ) | ||||
Distribution to noncontrolling interest | — | (8,335 | ) | (8,335 | ) | ||||
Balance at June 30, 2017 | $ | 1,676,239 | $ | 113,792 | $ | 1,790,031 |
Six Months Ended June 30, 2016 | Total Stockholders’ Equity | Noncontrolling Interest | Total Equity | ||||||
(in thousands) | |||||||||
Balance at December 31, 2015 | $ | 1,465,867 | $ | — | $ | 1,465,867 | |||
Net income (loss) | 40,671 | 2,632 | 43,303 | ||||||
Other comprehensive income (loss) | (22,709 | ) | — | (22,709 | ) | ||||
Dividends on common stock | (43,270 | ) | — | (43,270 | ) | ||||
Share-based compensation | 2,192 | — | 2,192 | ||||||
Issuance of common stock | 55,802 | — | 55,802 | ||||||
Dividend reinvestment and stock purchase plan | 1,478 | — | 1,478 | ||||||
Other stock transactions | (20 | ) | — | (20 | ) | ||||
Sale of noncontrolling interest | 62,416 | 114,886 | 177,302 | ||||||
Balance at June 30, 2016 | $ | 1,562,427 | $ | 117,518 | $ | 1,679,945 |
June 30, 2017 | December 31, 2016 | June 30, 2016 | |||||||||
(in thousands) | |||||||||||
Assets | |||||||||||
Current assets | $ | 12,042 | $ | 12,627 | $ | 12,681 | |||||
Property, plant and equipment of variable interest entities, net | $ | 214,239 | $ | 218,798 | $ | 224,128 | |||||
Liabilities | |||||||||||
Current liabilities | $ | 2,651 | $ | 4,342 | $ | 4,174 |
June 30, 2017 | December 31, 2016 | June 30, 2016 | ||||||||||||||||
Crude Oil Futures | Crude Oil Options | Natural Gas Futures and Swaps | Crude Oil Futures | Crude Oil Options | Natural Gas Futures and Swaps | Crude Oil Futures | Natural Gas Futures and Swaps | |||||||||||
Notional (a) | 72,000 | 18,000 | 1,080,000 | 108,000 | 36,000 | 2,700,000 | 210,000 | 2,530,000 | ||||||||||
Maximum terms in months (b) | 18 | 6 | 6 | 24 | 12 | 12 | 30 | 18 |
(a) | Crude oil futures and call options in Bbls, natural gas in MMBtus. |
(b) | Term reflects the maximum forward period hedged. |
June 30, 2017 | December 31, 2016 | June 30, 2016 | ||||||||||||
Notional (MMBtus) | Maximum Term (months) (a) | Notional (MMBtus) | Maximum Term (months) (a) | Notional (MMBtus) | Maximum Term (months) (a) | |||||||||
Natural gas futures purchased | 11,060,000 | 42 | 14,770,000 | 48 | 18,080,000 | 54 | ||||||||
Natural gas options purchased, net | 1,640,000 | 20 | 3,020,000 | 5 | 3,770,000 | 20 | ||||||||
Natural gas basis swaps purchased | 10,070,000 | 42 | 12,250,000 | 48 | 15,320,000 | 54 | ||||||||
Natural gas over-the-counter swaps, net (b) | 5,200,000 | 23 | 4,622,302 | 28 | 5,029,500 | 23 | ||||||||
Natural gas physical contracts, net | 8,427,119 | 10 | 21,504,378 | 10 | 1,666,800 | 9 |
(a) | Term reflects the maximum forward period hedged. |
(b) | 2,480,000 MMBtus were designated as cash flow hedges for the natural gas fixed for float swaps purchased. |
June 30, 2017 | December 31, 2016 | June 30, 2016 | |||||||||||||||
Designated Interest Rate Swaps | Designated Interest Rate Swap (a) | Designated Interest Rate Swap (b) | Designated Interest Rate Swap (b) | Designated Interest Rate Swaps (a) | |||||||||||||
Notional | $ | — | $ | 50,000 | $ | 150,000 | $ | 250,000 | $ | 75,000 | |||||||
Weighted average fixed interest rate | — | % | 4.94 | % | 2.09 | % | 2.29 | % | 4.97 | % | |||||||
Maximum terms in months | 0 | 1 | 10 | 10 | 6 | ||||||||||||
Derivative liabilities, current | $ | — | $ | 90 | $ | 8,553 | $ | 18,500 | $ | 1,505 |
(a) | The $25 million in swaps expired in October 2016 and the $50 million in swaps expired in January 2017. These swaps were designated to borrowings on our Revolving Credit Facility and were priced using three-month LIBOR, matching the floating portion of the related borrowings. |
(b) | These swaps were settled and terminated in August 2016 in conjunction with the refinancing of acquired SourceGas debt. |
Three Months Ended June 30, 2017 | ||||||||||||
Derivatives in Cash Flow Hedging Relationships | Location of Reclassifications from AOCI into Income | Amount of Gain/(Loss) Reclassified from AOCI into Income (Settlements) | Location of Gain/(Loss) Recognized in Income on Derivative (Ineffective Portion) | Amount of Gain/(Loss) Recognized in Income on Derivative (Ineffective Portion) | ||||||||
Interest rate swaps | Interest expense | $ | (713 | ) | Interest expense | $ | — | |||||
Commodity derivatives | Revenue | 430 | Revenue | — | ||||||||
Commodity derivatives | Fuel, purchased power and cost of natural gas sold | (44 | ) | Fuel, purchased power and cost of natural gas sold | — | |||||||
Total | $ | (327 | ) | $ | — |
Three Months Ended June 30, 2016 | ||||||||||||
Derivatives in Cash Flow Hedging Relationships | Location of Reclassifications from AOCI into Income | Amount of Gain/(Loss) Reclassified from AOCI into Income (Settlements) | Location of Gain/(Loss) Recognized in Income on Derivative (Ineffective Portion) | Amount of Gain/(Loss) Recognized in Income on Derivative (Ineffective Portion) | ||||||||
Interest rate swaps | Interest expense | $ | (840 | ) | Interest expense | $ | — | |||||
Commodity derivatives | Revenue | 3,287 | Revenue | — | ||||||||
Commodity derivatives | Fuel, purchased power and cost of natural gas sold | (61 | ) | Fuel, purchased power and cost of natural gas sold | — | |||||||
Total | $ | 2,386 | $ | — |
Six Months Ended June 30, 2017 | ||||||||||||
Derivatives in Cash Flow Hedging Relationships | Location of Reclassifications from AOCI into Income | Amount of Gain/(Loss) Reclassified from AOCI into Income (Settlements) | Location of Gain/(Loss) Recognized in Income on Derivative (Ineffective Portion) | Amount of Gain/(Loss) Recognized in Income on Derivative (Ineffective Portion) | ||||||||
Interest rate swaps | Interest expense | $ | (1,515 | ) | Interest expense | $ | — | |||||
Commodity derivatives | Revenue | 659 | Revenue | — | ||||||||
Commodity derivatives | Fuel, purchased power and cost of natural gas sold | 14 | Fuel, purchased power and cost of natural gas sold | — | ||||||||
Total | $ | (842 | ) | $ | — | |||||||
Six Months Ended June 30, 2016 | ||||||||||||
Derivatives in Cash Flow Hedging Relationships | Location of Reclassifications from AOCI into Income | Amount of Gain/(Loss) Reclassified from AOCI into Income (Settlements) | Location of Gain/(Loss) Recognized in Income on Derivative (Ineffective Portion) | Amount of Gain/(Loss) Recognized in Income on Derivative (Ineffective Portion) | ||||||||
Interest rate swaps | Interest expense | $ | (1,690 | ) | Interest expense | $ | — | |||||
Commodity derivatives | Revenue | 6,939 | Revenue | — | ||||||||
Commodity derivatives | Fuel, purchased power and cost of natural gas sold | (151 | ) | Fuel, purchased power and cost of natural gas sold | — | |||||||
Total | $ | 5,098 | $ | — |
Three Months Ended June 30, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Increase (decrease) in fair value: | |||||||
Interest rate swaps | $ | — | $ | (12,614 | ) | ||
Forward commodity contracts | 525 | (2,452 | ) | ||||
Recognition of (gains) losses in earnings due to settlements: | |||||||
Interest rate swaps | 713 | 840 | |||||
Forward commodity contracts | (386 | ) | (3,226 | ) | |||
Total other comprehensive income (loss) from hedging | $ | 852 | $ | (17,452 | ) |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Increase (decrease) in fair value: | |||||||
Interest rate swaps | $ | — | $ | (30,665 | ) | ||
Forward commodity contracts | 1,451 | (266 | ) | ||||
Recognition of (gains) losses in earnings due to settlements: | |||||||
Interest rate swaps | 1,515 | 1,690 | |||||
Forward commodity contracts | (673 | ) | 6,788 | ||||
Total other comprehensive income (loss) from hedging | $ | 2,293 | $ | (22,453 | ) |
Three Months Ended June 30, | ||||||||
2017 | 2016 | |||||||
Derivatives Not Designated as Hedging Instruments | Location of Gain/(Loss) on Derivatives Recognized in Income | Amount of Gain/(Loss) on Derivatives Recognized in Income | Amount of Gain/(Loss) on Derivatives Recognized in Income | |||||
Commodity derivatives | Revenue | $ | 26 | $ | — | |||
Commodity derivatives | Fuel, purchased power and cost of natural gas sold | (691 | ) | 2,201 | ||||
$ | (665 | ) | $ | 2,201 |
Six Months Ended June 30, | ||||||||
2017 | 2016 | |||||||
Derivatives Not Designated as Hedging Instruments | Location of Gain/(Loss) on Derivatives Recognized in Income | Amount of Gain/(Loss) on Derivatives Recognized in Income | Amount of Gain/(Loss) on Derivatives Recognized in Income | |||||
Commodity derivatives | Revenue | $ | 143 | $ | — | |||
Commodity derivatives | Fuel, purchased power and cost of natural gas sold | (1,500 | ) | 2,835 | ||||
$ | (1,357 | ) | $ | 2,835 |