Ladies and gentlemen, thank you for standing by. Welcome to the Black Hills Corporation's full year and quarterly earnings call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. The instructions will be given at that time. (Operator Instructions). As a reminder, this conference is being recorded. And I would now like to turn the conference over to our host, Director of Investor Relations, Mr. Jason Ketchum. Please go ahead.

Thank you, Laurie. Good morning everyone. Before I turn the call over to our Chairman and CEO, Dave Emery, I need to remind you that during the course of this call some of the comments we make may contain forward-looking statements as defined by the Securities and Exchange Commission and there are a number of uncertainties inherent in such comments. Although we believe that our expectations and beliefs are based on reasonable assumptions, actual results may differ materially. We direct you to our Earnings Release, slide two of the investor presentation on our website, and our most recent Form 10-K and Form 10-Q filed the Securities and Exchange Commission for a list of some of the factors that could cause future results to differ materially from our expectations. I will now turn the call over to Dave Emery.

Thank you, Jason. Good morning everyone. Thanks for being with us today. We'll go over several things today. I will cover kind of a full year and quarterly review of essentially operations highlights and then turn it over to our CFO, Tony Cleberg, for a financial review of both the quarter and the year. And then I'll wrap it up with some comments on overall strategic objectives and our progress towards meeting those objectives. Before I do, a quick note here. We have modified the format of our webcast presentation slightly. And rather than go through each individual subsidiary, we're really going to focus on the highlights of our utilities, highlights of our non-regulated energy group, and do it that way, as far as the call itself goes. But we have continued to include all the detail on the subsidiaries in the appendix to the presentation, so the information will still be available. 2009 was an extraordinary year for Black Hills. It was also a year I think that could be characterized by extremes. One extreme I think from the standpoint of strategic achievement, it was a year of tremendous accomplishment for our employee group. 2009 was the first full year of operations for the five utilities that we acquired from Aquila in July 2008, and now operate under the name Black Hills Energy. And we made meaningful progress integrating those utilities, improving our efficiencies and reducing our expenses. We also advanced several large capital growth projects during the year that will contribute to meaningful earnings growth for shareholders in the future. Namely, the construction of three power plant projects, with the total projected capital spending of nearly $700 million. We also reduced our short-term debt substantially, by completing several key financings during the year at favorable terms, particularly considering…

Thank you, Dave and good morning. 2009 has been a stress test for our company and our portfolio of businesses and although we're not satisfied with our absolute earnings, we are pleased with the way our diversified platform performed considering the economic issues and the collapse of natural gas prices. As Dave mentioned, we've moved forward on a number of key initiatives that continue to strengthen our businesses and position us for longer term growth. Today I'll discuss financial performance both for the fourth quarter and the total year. Moving to slide 12, we see the earnings drivers in the fourth quarter. Our income from continuing operations reflected strong performance in the gas utilities and the gas utilities were up strongly and our electric utilities were about flat. That demonstrates good cost control in both utilities and the good cost control in electric utilities really offset the shortfall in the off-system sales. On the non-regulated side, the low natural gas prices significantly impacted our results in both oil and gas and energy marketing segments. We have continued to minimize our CapEx spending in oil and gas because of the low prices and increased our emphasis on lowering our costs. For energy marketing, the realized margins declined slightly year-over-year, but the negative changes in the unrealized mark-to-market margins decreased substantially from 2008. Slide 13, we're moving to our EPS analysis, and we adjusted our fourth quarter reported income from continuing operations to identify the impact of some of the unique items recorded during the quarter. The first adjustment subtracts the mark-to-market gain on our outstanding interest rate swaps. This amounted to an $11.6 million or $0.30 per share which is a non-cash and reflects an improvement in the swap spreads during the quarter. This compares to a net loss of $61.4…

All right. Thank you, Tony. Looking to the future from a strategic perspective, we are very, very well positioned. We've discussed it several times, but we have a very clearly defined capital spending and growth plan for the next several years. This year, 2010, in particular, we have a capital spending forecast of approximately $475 million, roughly 70% of that will be on utility investments, another almost 20% on non-regulated power generation assets. So a huge amount of capital being invested in good, long-term earnings stable projects, so very excited about what the future holds there. As Tony said, we've got a great balance sheet, we’ve demonstrated good access to the capital markets. So we're very well-positioned to take advantage of the growth opportunities that we have today. Moving on to slide 25, this is a look we've been showing you for a little over a year now, really highlighting not all of our capital expenditure plans, but just the projects that we consider to be growth opportunities or outside of normal, routine capital expenditures. Again, a billion dollars plus of investment over a several-year period there with an awful lot of that capital yet to be spent in 2010 and 2011. As that capital spend, as those assets are converted to production and start returning earnings for shareholders, should drive considerable earnings growth in the future. Wygen III on slide 26, we are still ahead of schedule and under budget, very, very pleased with our construction progress there. Construction is about 98% complete, almost done. Commissioning all the individual systems in the plant is about 70% complete. We've achieved some very key milestones in the last 30 to 45 days, one of which is we did do our first (inaudible) on gas in December. We've completed all our boiler…

(Operator Instructions). We have a question from the line of [Chris Ellinghaus] with Wellington Shields. Please go ahead.

Dave, did you get a PV-10 value at the end of the year?

Yeas, we haven't published it yet, Chris. That will be in our K.

Tony, you were talking about some of the cost reductions in coal mining for the quarter and ongoing benefits. Can you just characterize what we should be expecting going forward in terms of lower expenses?

Well, from the reclamation studies, I would think that we would get at least a couple million bucks a year with the studies the way they came back. So expect that improvement next year. We picked up most of it in 2009, so comparatively speaking that should roll forward.

Was that like a true-up at all in the fourth quarter?

Yes, it was. We did the study for the year.

Given sort of the performance of E&P in '09 and the trajectory of production, can you characterize at all sort of what your expectations for E&P are for '10 in the absence of better pricing?

Yes, we put our projected production range in the earnings guidance, Chris. I would say our spending is going to continue to be pretty conservative there. We said we would probably spend a little bit more than we did in 2009 when we only spent something around $20 million. We expect to increase that some, but it is going to be price dependent. At E&P, we scrutinize every project, project by project, and depending on the prices at that particular location and what the project looks like, we make the decision to drill. I would say we're focusing maybe a little bit more on some of our oil opportunities, just because oil prices are pretty good relative to where gas is, but it's not going to be a huge driver for production or spending. As gas prices improve, we will do some more drilling. We have a few drilling opportunities that we'll do at these lower prices, but there's not a lot.

Is it still going to be pretty challenging to make a material income at E&P in the coming year?

Yes, I think we talked about that a little bit in our earnings guidance. I don't think we expect a huge improvement there. Hopefully we're past the point where we have these big impairments and things. As long as prices keep coming up you never know. But it is going to be challenging at E&P. Prices are still relatively low. We do have a little bit of benefit of reduced cost basis in our E&P properties because of the impairments, but we've also reduced our reserves. So when you look at it from a depletion calculation perspective, the net of those two means it's not really that positive.

Tony, I think I caught you saying that there was a $20 million mark-to-market swing in marketing in the fourth quarter? Is that correct?

Yes.

Can you disclose what the fourth quarter mark-to-market loss was?

Yes, the mark-to-market, the unrealized mark-to-market in the fourth quarter was $20 million. Different, not $20 million in total. We had a gain in 2008.

Right, so the swing was $20 million.

So $20 million is the difference.

How about the absolute for the fourth quarter?

We haven't disclosed that.

Okay. Would it be in the K?

Yes.

Lastly, I think Tony you were alluding to trying to push off equity. Are you suggesting that you may try to push it out of '10 or are you just suggesting you'll try to push it as late in the year as possible?

I'm suggesting that we push it as late as we can. I think we want to be very responsible and keep a strong balance sheet, but if there's ways that we can just defer cash on a lot of things then we would certainly push it as long as we can.

Chris, our philosophy on equity has kind of stayed the same as we’ve talked about for a while and in a nutshell, issue as little as possible, as late as possible. We're still very focused on that.

Our next question from the line of Michael Worms with BMO.

Just a quick question on the E&P spending. You said it was going to be higher this year than last year, yet it looks like production levels are expected to be lower. So can you kind of just explain what's driving the higher spend?

What we anticipate is the spending will be higher if prices recover. And so what that typically means is you don't start a lot of your drilling until summer or later, and so the impact that it has on current year production is relatively low, even if we do the spending. So it shows up kind of late in the year and early in the year after. So that would be the reconciliation there. We may spend more, but it's probably going to be in the third and fourth quarters primarily, some in the second quarter, and then that production doesn't show up until kind of late in the year and earlier the following year.

On the electric utility side in the fourth quarter, can you kind of quantify what impact weather may have had on earnings?

Hard to quantify, I would say we had a little bit colder than normal weather during some periods, but we also had still relatively weak off-system sales, so I would say the net effect of that isn't a huge swing on earnings one way or the other.

Our next question from the line of James Bellessa with D.A. Davidson.

The gas utility, surprises on the upside and partly due to the colder fourth quarter. What would have happened if weather had been normal in temperatures?

Well, you certainly wouldn't have had the same degree of sales that we did. There's two drivers on the gas utility performance. One is very good cost control, that group worked very, very hard this year, keeping their spending down, even capital spending down and certainly reducing expenses. So the combination of that, which was a meaningful part of the difference in appreciation there, and the weather were the drivers. We haven't really disclosed the amount of each of those two. Certainly, if the weather hadn't been there, they wouldn't have done quite as well. But a lot of that benefit was driven by cost control and some of the other efforts we made there.

Jim, the other thing is that we had a very cold fourth quarter in 2008 and we were even colder this fourth quarter. So it was very beneficial for us.

Are we talking about as much as $4 million of profits, increase, because of the cold weather or that was the increase in income?

No, I think there is a sharing of that of expense reductions and cold weather. From a year-over-year standpoint, I think it's probably half now.

Your slide for CapEx showed $475 million estimated for 2010. But your earnings guidance calls were 425 to 475. What's the difference?

A lot of it's timing, Jim. We think we will spend the 475 if the timing works out on our power plant construction the way we think. It's really going to depend on what date we get those air permits in Colorado. If we get them earlier, we'll spend a little more, if we get them later, we'll spend a little less. It won't change the total CapEx for the project. It will just change the amount that gets spent in 2010 versus 2011 and that's the primary driver of that potential difference.

We have a question from the line of Eric Beaumont with Copia Capital.

Are you guys going to break out what your earned ROE was in each of the utilities just so we can get feeling for headroom as opposed to consolidation. Obviously with how the Wyoming works with the Wygen and some of the opportunity sales, that can make overall-earned ROE look maybe more robust than it’s for the individual layers.

We historically have not published those numbers, Eric, and probably don't plan to. We've talked through consistently with investors, related to what's been reported on FERC forms, as far as the amount of capital we have in utilities and that's a number that you can figure out by using the FERC forms, but it's not something we typically publish and wouldn't anticipate changing that.

Secondly, just with regards to all the refinancings, can you give us a feel for what the apparent debt load is at this point and weighted average cost of debt, or are we going to have to wait for the K on that?

Well, if you look at my capitalization chart, you've got the amount of debt. From an interest rate standpoint, the fourth quarter is pretty representative, but it's probably a little higher run rate because we issued the first mortgage bonds and the project financing, just a little later and so there's a switch between a revolver at LIBOR plus 70 versus even a great rate at 6 1/8.

But the K will have all the detail of the particular financings.

If we look at page 17, obviously you have income from continuing ops and then as adjusted is 143 and understand all those adjustments. When you give your '10 guidance, you give it assuming kind of no adjustments and just where things probably sit in energy marketing, given you took good advantage of some of the storage spreads which have weakened a little bit since then. Should we think that there is any adjustments being in kind of the guidance number or those will be separate as far as mark-to-market and things that might be backed out and [nonrecurring]?

We were fairly specific in the guidance about our assumptions related to energy marketing, mark-to-market, our assumptions related to mark-to-market on the interest rate swaps, those things that would be unique items as we describe them on slide 17. We were pretty specific with what our assumptions were there. So if you see conditions that are different than what our assumptions are, then you could come to the conclusion that we may have some of those unique items again this year, as long as those conditions hold true that we list in our assumptions and then I think you can continue to believe that we won't have a lot of those unique items again. It's just going to depend on how the year plays out, relative to that published list of assumptions we have.

I understand that, David. When you had the Analyst Day, you were talking in large part about energy marketing (inaudible) with respect to the pickup and how storage spreads were looking better and you anticipate some other returns to more normal market. When we look at this quarter and you had mark-to-market hit and we go forward, I'm just trying to figure out given that the storage weren’t as robust as they were, if there's anything to impute there or you guys were able to accelerate things and how that may look?

I would say our outlook hasn't changed dramatically there. When we talked in the fall and in previous quarters here, we said that we did expect better earnings from storage in our energy marketing unit this year because the spreads from last summer to this winter were quite favorable and we had booked a lot of that return already. That's still the same. We did not expect a lot of earnings from our transport business. The Rockies Transport in particular is out of the money in a lot of cases because the basis differential is so low. So we don't expect a lot there. Our producer services segment in the marketing unit is pretty consistent. That's more of a fee-based piece. And then the proprietary trading piece is really going to depend on market conditions and volatility and things. So it's tough to predict, especially what the mark-to-market impacts will be. It's almost impossible to predict the unrealized mark-to-market gains and losses. But I think our view on the year is probably pretty consistent with what it was last quarter as far as how we see the marketing year shaping up.

Eric, we do see quite an improvement in the energy marketing. We don't expect to repeat 2009. So we do see quite an improvement.

When you saw decent spreads and you were contracting them for the summer, winter spreads, were those just kind of single season or did you take that multiple years just so we know that there will be adjustments on that, given the move.

Some of it we do, park and loan storage which is a one time deal. The other things, some of our storage facilities we have a long-term lease positions in those facilities. So some of those positions we can choose to roll forward, if market conditions continue to improve, rather than withdraw the gas this winter. So I think we've got a lot of flexibility there.

We have a question from the line of [Vedula Murti with CDPUS].

Can you tell us for the fourth quarter, what was DD&A for the fourth quarter in terms for consolidated company cash flow?

That will be in the K.

Can you tell me what the third quarter was?

It's $29.8 million in the third quarter.

If we basically say DD&A next year runs on a quarterly basis, somewhere between $30 million and $35 million a quarter, okay. That gives us about $130 million. If you take about the midpoint of your earnings guidance, that generates about $75 million in net income. I'm not sure about any other major positive cash flow items. When you use your CapEx and your current dividend rate, it would look like that we have operating cash somewhere in the 2, 2 1/4 range and we have cash expenditures, dividends and CapEx of about 500. I'm making sure I'm in the right ballpark, we have a $300 million delta that's going to be filled through a combination of debt and equity. Am I thinking about this properly?

You could think of it that way. I would hope that we can do better on the spend plans.

Let's say then the spend plans are at the low end, so let's call it 250 then. Okay?

Okay.

Should we assume, then, that in terms of capitalization, that we ought to be thinking about this like 50/50 in terms of how it's done externally.

50/50 is a good long-term assumption. Short-term, when we're looking at construction of power plants and particularly utility property, the debt number may get a little higher than that prior to doing permanent financing. So we may let our debt run up say 53, 54, you knows some percent like, maybe even up as high as 55% before we do some of our financings. Long-term, 50/50 is a pretty good assumption but short-term it may fluctuate some.

Okay. And as part of your earnings guidance, do you have an assumption as to what the average shares outstanding are for the year for 2010?

We have not disclosed that. I guess one comment on that. Thank you. We did say in our earnings guidance that if we issue equity, we had assumed that that was included in our earnings guidance.

Thank you. And we will move on to our next question and one moment. We go next to the line of Tim Winter with Gabelli & Company. Please go ahead. Tim Winter - Gabelli & Company: I do sort of have a follow-up question to Eric's questions on the earnings walk in the marketing business. If you go take the $1.43 adjusted for 2009 up to the 2010 range, can you give me some sort of idea what is expected from the trading and marketing business. I guess I'm backing into a range of somewhere in the $0.30 to $0.50. Is that accurate?

Yeah, we haven't put a specific number out by business unit in our guidance. What we did say last fall related to marketing is we kind of expect things to get back to a more normal year. Now, what's normal mean? I think if you kind of look at our past history and take out the real highs and lows, probably a good neighborhood to think about, but we haven't disclosed segment guidance and wouldn't anticipate doing so. Tim Winter - Gabelli & Company: Okay. Are there certain mark-to-market gains that you're expecting that are included in that guidance?

If we knew how to predict mark-to-market gains, we wouldn't be doing this.

Our assumption basically says, Tim that we expect no meaningful mark-to-market gains or losses in the guidance itself. Just don't have any way to predict those.

And we have a question from the line of Michael Chapman with Private Capital Management. Please go ahead.

Thanks. Just a quick question about taxes for you guys. Was reading one of the FERC filings that in the Wygen build-out you get accelerated depreciation on that. Does that also apply to the Colorado build-out and if it does apply, is it applicable at the parent level or only at the utility level? Thanks.

I mean, utility level is where you take the write-off. The accelerated depreciation was really a function of the way the tax law is right now. I don't know if that will be extended by the time that we put the Colorado Electric in play.

Does the Wygen build-out have enough to protect most of your income this coming year? Because I think it's 47% is what they said you were allowed to take on depreciation in the first year.

I'm not sure, are you trying to get at a cash tax number or…

Yeah.

While we're doing very well on cash taxes and we expect to do very well on cash taxes in 2010, and I think that's all I can really say at this point.

So, one of the previous callers was trying to bridge the cash flow number from your CapEx and then your net income plus your DD&A and came up with 250 to 300 number. There is a decent possibility then that the net income number, well, I guess the cash net income number would be a lot higher given the ability to shield that from taxes?

Yes.

Okay, so that could create some of the other areas. Are there any other operations that you or any other financing mechanisms, kind of like the sale of to mend other assets that would lessen the need to issue equity?

Yeah, we would certainly consider other alternatives.

We don't have any planned right now. But we always consider and always look at high grading things.

So the number of shares that you would eventually issue, I know you said you like to keep that to a minimum and I'm assuming you're going to do that equity raise in one tranche, so you'll raise all the equity you'll need to finance the total $980 to $1 billion build-out over the next two years in one offering or would you expect to do it over more than one offering.

We really haven't pinned that down. I mean, we'll take a look at the market, what's the best way to do that at that time. So we don't have a set plan. If we did have a set plan, it could change tomorrow. So I think the general thing that we're trying to do is we're trying to minimize cash flow. We have to go forward on these major projects. We're very committed on those. And we'll look at other ways to in effect minimize our cash expenditures and we'll look at other alternatives to keep as little equity and debt as we have to issue to fund all of these. So that is our strategy.

I think another issue there is, the markets have changed so dramatically over the course of the last 12 months, both equity and debt, is that we're trying to be real flexible with our financing plans because we would like to be able to opportunistic if we've got very favorable terms. For example, on equity, we may choose to go out and do a little more. Kind of to your point, if we don't have those, we're going to delay it as long as possible and do as little as possible. And similarly on debt. If we get some real advantageous terms we may issue a little bit of a long-term debt a little sooner rather than later but the conditions have been so volatile, but seem to be improving on both fronts, debt and equity. I think times at least for awhile is an ally but we want to make sure we take advantage of best we can the optimum conditions in the market.

And then just thinking about Colorado or how should we think about the Colorado build-out for 2012. I mean it looks like you're going to be spending around all-in $500 to $550 million to get that up and going and in your most recent filings with Colorado Electric, the rate on rate base that you're allowed is 9.75 and given the average life of these assets, you kind of back into what an EBITDA number for that spending assuming that while you earn offer that $500 - $500 and it seems like the EBITDA potential from that out in 2012 is relatively substantial in the $75 to $85 million of EBITDA ranges. Is that too far off-base?

Yes, I won't comment on the specific number, but I think the assumption that you're making, remember half of that capital is regulated utility capital. The other half is going to be spent at our IPP subsidiary but the way we look at our IPP business is very utility like as far as how we finance those projects and things. So from an overall assumption basis, I think you can look at it like essentially $0.5 billion worth of utility investment. Both projects will come into the earnings stream on January 1, 2012, assuming successful construction completion. So I think you're looking at it the right way. We haven't put out specific EBITDA numbers and don't intend to do that until probably we put out earnings guidance for 2012.

Okay. But the rate that you have, the return on rate base that you have for Colorado now, you would think a commensurate number would be is what you would expect for the build-out there.

Yes, depends on what the regulatory climate is. We just filed a case in Colorado and we'll see how that case goes. That may give us a more clear indication of what returns we would expect going forward in Colorado. The regulatory environment is a little tougher right now than it has been for a while.

We have no further questions. I'll turn it back to our speakers for any closing remarks.

Laura, well thank you for being on the call today everybody. We appreciate your continued support. As I said before, 2009 was a very challenging year for us but one in which I think we accomplished a great deal towards building future value for the company and our shareholders. So, we'll appreciate your continued support through another year that we expect to be a little bit challenging on the earnings side, but again, I think we'll continue to make very significant progress on these growth capital projects that should set us up very, very well going forward. The economic recovery is going to be key to 2010 earnings, I think. We need gas prices and power prices and things to rebound a little bit, but we're pretty optimistic about where we sit, very happy with our capital structure, access to capital markets and pretty excited about our spending plan. So, thanks for your interest in Black Hills and thanks for being on the call today.

Thank you. Ladies and gentlemen, this conference call is being made available for replay. The replay of the conference begins today at 11:30 am Mountain Time. And we'll run through the date February the 5th at midnight, Mountain Time. You may access the AT&T teleconference replay service by dialing 1-800-475-6701, and please enter the replay access code 139497. That number again, 1-800-475-6701 and the replay access code is 139497 and speakers do you have any additional closing remarks?

No, not from us, thank you.

All right. Well, that will conclude our conference. We thank you for your participation and for using AT&T's executive teleconference. You may disconnect.