Good day, ladies and gentlemen and welcome to the Black Hills Corporation 2010 Third Quarter Earnings Conference Call. My name is Regina [ph] and I will be your coordinator for today. At this time, all participants are in listen-only mode. Following the prepared remarks, there will be a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to Mr. Jason Ketchum, Director of Investor Relations of Black Hills Corporation. Please proceed, sir.

Thank you, Regina. Good morning, everyone and welcome to the Black Hills Corporation 2010 third quarter earnings call. With me today are Dave Emery, Chairman and CEO and Tony Cleberg, CFO. Before I turn over the call, 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 with the Securities and Exchange Commission, for a list of some of the factors that could cause future results to differ materially from our expectations. I will now turn the call over to Dave Emery.

Thank you, Jason. Good morning, everyone. Thanks for being with us today. We want to cover several things today. Obviously, a review of the quarter which I will do, Tony will then cover financials, I’ll speak a little to forward-looking strategic issues and then Tony will provide an update on our guidance for both 2010 and new guidance for 2011. Moving on, some of you, I know, might be following along on the webcast presentation and if you are I will try to cite some page numbers periodically, so you can know where we are at. Moving on to slide five, we had an excellent third quarter. A substantial improvement in adjusted income from continuing operations as compared to the third quarter of 2009, essentially $0.38 a share this year as compared to $0.07 a share for the same period last year. Utility results are up nearly $11 million, primarily driven by a gain on sale of a 23% interest in Wygen III plant and also an increase in revenues from several completed rate cases. On the non-regulated energy side, results are up approximately $6 million, driven by improved performance in energy marketing and oil and gas, partially offset by slightly lower coal mining reserves. Moving on to utility highlights, several key things going on in the utility side of our business in this last quarter. First item is construction is well under way on our utility gas fire and generation facilities for our Colorado Electric utility. That plant, which is located in Pueblo, Colorado is progressing very well. We’ve made a tremendous amount of progress since construction began in late July. We have completed four rate cases year-to-date for a total annual revenue increase of approximately $44 million. We recently reached a settlement in an Iowa gas rate case…

Thank you, Dave. Good morning. As Dave indicated since our last quarterly, we have been focused on a number of initiatives, more importantly we have accomplished a number of key milestones that continue to position us for growth. From an earnings standpoint, we are very pleased with the third quarter performance. Highlights include a nice gain on the Wygen sale. Another highlight was a strong performance by the utility segment reflecting both rate case settlements and cost reductions. Operating income, excluding the Wygen gain increased 92% in utilities year-over-year. Another highlight was the improved performance of buyer energy marketing segment reflecting solid performance in coal marketing. Another highlight includes a successful outcome on tax issues. Overall, our operating income, excluding the Wygen gain improved a 147% year-over-year. On the challenged side, the continued decline in long-term interest rates negatively impacted the interest rate swap during the quarter. But overall, per shoulder quarter, we are very pleased with our performance, particularly pleased with the strength in the utilities. Moving to slide 10, to the quarterly EPS analysis. This is consistent with past quarters. We adjust our income from continuing operations to display non-GAAP earnings measure to better communicate the relevant performance. The non-GAAP measure excludes a special gains and losses recorded during each quarter. This slide displays last five quarters with the third quarter amounts for 2009 in the boxed – two outside boxed columns. Focusing on the column for the 2010 third quarter, the first special item included a $0.23 edition for the non-cash unrealized loss on interest rate swaps. Since quarter end, there has been a $0.13 recovery already but the long-term rates do remain extraordinarily low. The first special gain item subtracted was the sale of the 23% interest in Wygen III, which netted $0.10 per share and…

Thank you, Tony. Moving on to slide 16 and looking to the future here, we continue to be well positioned for growth. We’ve a strong well defined capital spending plan. As Tony mentioned still a strong balance sheet and demonstrated access to the capital market. Tony also alluded to the fact that we are increasing our projected 2010 capital spending to about $512 million. Essentially accelerating some planned 2011 spending into 2010 in order to take advantage of some of the bonus depreciation tax benefits. Slide 17 outlines our major growth capital investments. We’ve shown you this slide for a couple of years now. This year and next year, we are looking at $570 million to $600 million of investments in growth capital projects, not including our base maintenance capital or those types of expenditures, so exciting growth opportunities that we’ve continued to talk about in the last couple of years. Slide 18 just outlines a timeline of events and major projects. We continue to update this every quarter based on new news and updates in each of the things that we have already identified on this schedule. Moving on to slide 19, as I said earlier, two Colorado generation projects are progressing very well, both are on schedule and on budget. The Colorado Electric utility generation project, a 180 megawatts, $250 million to $260 million project, we are really excited about the progress to date. We are getting close to having all of our procurement construction contracts rewarded and we’ve spent $131 million to date. Notably, our first turbine and generator step-up transformer arrived last week and were delivered to the site and set in place. So real excited about that progress and the second turbine will soon be on the way, so exciting progress. Slide 20 shows a…

Thank you, Dave. As you saw, I'm on slide 28 – as you saw in the press release, we tightened our 2010 guidance, excluding special items to the range of $1.80 to $1.95. So far in October we have seen continued price decline in natural gas. And this – which impact both our oil and gas segment, our off-system sales and our energy marketing segment. So we hope to improve year-over-year but we are being very cautious in our guidance here, because of the low natural gas prices. I might add that our expected operating performance for the fourth quarter is an improvement in the electric utilities and actually a decline in our non-regulated segments. Looking ahead, on slide 29, for 2011, as you have seen in our press release, we are projecting a range of $1.90 to $2.15. We’ve listed a number of major assumptions in the press release and I don't plan to repeat them here. But realizing the difficulty for other parties to estimate energy marketing earnings, we would like to share with you how we think about this segment in our guidance. We only expect modest improvement in this segment in 2011, driven by improvements in marketing coal, oil and the addition of environmental and power marketing. That combined with a natural gas market similar to 2010. In addition with bonus depreciation for assets acquired in 2010 and placed in service by the end of 2011, we expect a very low cash tax rate next year. So the assumed equity of 125 to 150 million is expected to be sufficient to complete the Colorado generation build out and have the appropriate debt-to-cap ratios by year-end. So with that guidance, I will turn it back to Dave.

We will be happy to entertain any questions if anyone has any.

Ladies and gentlemen, at this time we are ready to open up the lines for your questions. (Operator Instructions) Your first question today comes from the line of Dan Eggers with Credit Suisse. Dan Eggers – Credit Suisse: Hey, good morning guys.

Good morning, Dan. Dan Eggers – Credit Suisse: I guess my – your first question is on the CapEx increase for this year, looks like that’s all at your power gen, so I assume that’s Colorado based. Can you just give me a little color on what’s getting that CapEx up?

Yeah, it’s absolutely what we are trying to do, Dan, is just accelerate delivery of some of the major components for the facility, turbines, generations step-up transformers things like that. We need to take title to them this year and have them in service next year in order to qualify for the bonus depreciation, so anything that we can accelerate and then most of that really in our IPP project, a lot of it because it's a little farther behind on the schedule on the utility plant and that's essentially most of the difference. We are looking at every business and things like our AMI project and other things if we can accelerate a little to 2010. We are trying to do that but that's the primary driver. Dan Eggers – Credit Suisse: Okay. And then how much bonus depreciation are you guys expecting to get out of this year, next year? If we were to quantify how much cash is coming in?

I think we are going to be very, very low cash tax rate. Sort of the map on it, Dan, is we have about $200 million that’s going to go into play this year. So it's 50% turns 35%. And then if you look at next year and say that we will probably have around $300million that we have this year that will be placed into service next year. And, again, if you go through the math of 50% turns 35%, those are the kind of numbers that we are looking at. And that might actually add to a little more than what we have for federal income tax. So the only place we will really have tax is probably at the state level. Dan Eggers – Credit Suisse: Okay. And then the comments on the Colorado renewable energy standard efforts, I guess it's a series of dates. We are going to have new plans on indifferent resource needs in Colorado, so you are going to be busy there. But on the renewable site, is there a feasible way to get anywhere near that 30% level as you guys are also confronted with a 3% rate cap, given where your rates are today?

I would say it will be increasingly challenging as that threshold continues to increase towards the 30% number and stay underneath that rate limitation. It depends on a lot of other factors, what happens to the price of natural gas, what happens related to some of this other generation, for example, retirements of plants and other things? All those factor into what your total cost is, which then sets the limit on how much you can spend on renewables. So difficult to give a definitive answer, but I do think you're on track and that it will be real challenging in the out-years as you creep up on that 30% number to do that and stay under that rate cap. So it may indeed be a little less than that. Dan Eggers – Credit Suisse: Okay. And I guess one last question. If I look at the 2011 guidance, you've got rate cases done pretty much across the board that all should map out pretty clearly. The power generation and the coalmining businesses are going to be – should be pretty straightforward as far as contractual nature. Is the swing in numbers next year really a function of where Enserco comes out relative to where we're starting today?

Dan, what I mentioned was that we are not expecting much improvement out of energy marketing next year. Dan Eggers – Credit Suisse: Okay.

So what we're really seeing is the rate cases taking hold for the entire year and in effect our utilities improving strongly. And the non-regulated with natural gas prices down in our oil and gas segment, we're not seeing a lot of help from that side of the business. Dan Eggers – Credit Suisse: Okay. All right. Thank you, guys.

You bet. Thank you.

Your next question comes from the line of Gordon Howald with East Shore Partners.

Good morning, Gordon. Gordon Howald – East Shore Partners: Good morning. How are you?

Great. Thank you. Gordon Howald – East Shore Partners: Good. Jim touched on this question, but on the Colorado resource plant, how much of the wind and solar resources do you believe you'd be able to rate base? And maybe a better way to question this is, is there any precedent from utilities thus far in Colorado on that front?

Well, not a whole lot. We are kind of cautiously optimistic that maybe we can justify the rate basing say half of it or so, Gordon. But it's really – you have to work your way through process. So we'll have to file the resource plan, identify specific recommendations for projects, probably go through the process of potentially some competitive bidding analysis of rate basing versus competitive bids and very similar to the process we went through with the gas-fired generation for Pueblo. In that case we were successful essentially having half of it utility-owned and then the other half was contracted and we were able to bid in our own resources on the contracted portion. We would try to do something similar to that. It's just very difficult to predict exactly where you're going to come out and there is not a lot of precedent yet as to how the Colorado Commission is going to handle those facilities on the renewable side, particularly. Gordon Howald – East Shore Partners: Sure. Understood. A follow-up on that, how did the commission in Colorado feel about you repealing the tax incentive offering that you had for solar insulation? But I understand the rationale, but economics and politics don't always go hand in hand. Got an issue?

We're just in the process of – No, I think they were supportive. We met with them before we suspended the program and explained that we just think it's time to evaluate the impact on customers and I don't think there was any dramatic reaction one way or another. I think they appreciate our, kind of, careful cautious approach where we are considering our customer interests first. Clearly though in Colorado there's a big push for increasing renewables. So we are hearing from some folks about wanting us to reinitiate that program, as you might expect. Gordon Howald – East Shore Partners: Sure. And I understand the rationale that for sure. I appreciate it. Thanks, guys.

You bet. Thank you.

Your next question comes from the line of Eric Beaumont with Copia Capital. Eric Beaumont – Copia Capital: Good morning, Dave. Good morning, Tony, How are you?

Good morning. Eric. Eric Beaumont – Copia Capital: A couple of quick questions. One, just kind of a housekeeping how should I think about the AFUDC flowing for the two plants both this year and next year as far as that impact goes?

The AFUDC will increase quite a bit next year on the utility from quarter-over-quarter basis. On the IPP, we don't have it – so in effect we are just capitalizing interest there. Eric Beaumont – Copia Capital: Okay. And LDCs looked great this quarter. One question I really wanted to look at it with all the rate cases you guys did a good job getting good result, has there been a significant shift of few fixed components versus variable on those and did that help drive kind of the shoulder period? Or is it just simply pure rates?

Yeah. Most of that – we continue to try to increase the fixed component in the rate cases that we file, Eric. I would say we are making kind of slow gradual progress, so I don't think that's a huge driver. But it is something we are continuing to work on. We are also continuing to work on thing like capital additions trackers or integrity capital trackers. We requested one of those in Iowa. It's not final that we are going to get it yet, but continuing to do thing to improve our regulatory lag and things like that and promoting energy efficiency programs as well. Eric Beaumont – Copia Capital: Okay. Great. And one last thing, just with regards to the guidance two things, obviously you been for '011, AFUDC you consulted with (inaudible) and on the equity you said 125 to 150 million, I think you said you were assuming a mid-year issuance '11 is that accurate?

That's what we put in our model. Eric Beaumont – Copia Capital: Okay. So obviously you'll time as market conditions allow but for guidance assumptions we should assume mid-year.

Yes. Eric Beaumont – Copia Capital: Okay. Perfect. Thank you, guys.

Your next question come from the line of Ella Vuernick with RBC Capital Markets. Ella Vuernick – RBC Capital Markets: Good morning. Some of my questions have been answered, but if I could turn, please, to oil and gas. In 2011, it looks like your assumptions included somewhat higher gas price, however pretty constant CapEx at that division and fairly flat to maybe at the high end a little bit higher production guidance. Could you comment a little about that?

Yeah, we've said – for the last couple of years, Ella that in this low-price environment, particularly on the natural gas side. We were only going do projects that we thought made real good economic sense and we are in a position where most of our acreage is held by production so we are just not really doing a whole lot of gas drilling. A little bit as we talked about this Mancos Shale testing a few things like that. But real measured in our capital deployment and a fairly large portion of our planned capital will be related to oil plays such as the Bakken oil play in the Williston Basin in North Dakota. But, we've said for a couple years with prices being somewhat depressed and all the construction we have going on, we are really trying to limit spending at E&P to approximate our cash flow there. So, in that $40 million kind of neighborhood that's not a hard and fast rule, and if we found a really good project, we would potentially entertain the concept of doing it anyway but for planning purposes that's what we are looking at, doing some testing that really sets us up for future as gas prices improve and we have a significant increase in cash flows from operations upon completion of the Colorado power plant. Ella Vuernick – RBC Capital Markets: Okay. Great. Thank you. And then turning to coal, I see that there's still some continued customer plant outages, do you have any visible in to how that might play out for the next year?

Yeah. Well, we don't have the anticipation of large outages – at least unplanned outages like we are having this year. There's been some thing going on at, remote customer facilities outages, long duration outages and even lower demand for power in some of their territories where they are just not running their plants as much. We’re predicting a little more of a normal year next year with planned outages counted in our numbers. Ella Vuernick – RBC Capital Markets: Great. Thank you. The rest of my questions have been answered.

All right. Thank you.

Your next question comes from the line of James Bellessa with D.A. Davidson. James Bellessa – D.A. Davidson: Good morning.

Hi, Jim. James Bellessa – D.A. Davidson: I have, perhaps the wrong figures that I was working with on the gain on the sale of the Wygen III plant. Can you tell us what the dollar amount or the gain was pre-tax and then what tax rate you used or I guess, I can calculate it because you've identified that was a $4.1 million after tax?

It's $6.2 million pre-tax. James Bellessa – D.A. Davidson: Okay. Thank you very much.

We have that rate, yeah.

(Operator Instructions) Your next question comes from the line of Vedula Murti with CDP. Vedula Murti – CDP: Good morning.

Hi, Vedula. Vedula Murti – CDP: A couple of things, one, with regards to the sanction of equity, should we assume this is straight-forward common stock or has any thoughts been given to a mix of common and hybrid?

This is Tony. We are considering all kinds of options of how we do an equity issuance. So, whatever is sort of what we feel the lowest cost approach. Vedula Murti – CDP: Okay. And if we take a look forward to ‘10 and ‘11, I think, your slide show that you, capital expenditures were about $1 billion and $1.1 billion. If we were to move forward given the growth opportunity that you cited here, what – what should we be kind of thinking about ballpark ventures ongoing CapEx in the next couple of years and in the – in throughout years of '12 and '13?

So far we haven't been really specific about some of those plans we are doing based on some of these regulations in particular, I mean, what we may end up doing or coal – these coal plants or the potential House. Bill 1365 in Colorado, renewables in Colorado, really quite a few moving pieces to that. So until we get a better hand on that, probably not comfortable putting numbers out past that '12, '13 timeframe. Vedula Murti – CDP: And for us to get a better handle we really have to understand exactly how this is going to play out. We know what the legislation is, but we just have to make sure we understand how the rest of it plays out.

And a lot of its going to be contingent on resource planning. I mean, we’re – we will have to file, as I mentioned before really two plans, one kind of an abbreviated one in Colorado in February and then a full-blown plan in October or so in Colorado. But we're also coming up on the time to file a resource plans for both Black Hills power in Cheyenne Light, as we look at those future customer needs and customer growth, which we are having in some of our territories. And we're going to have to reassess capital needs there as well. So until we really work our way through this 2011 resource planning process, big moving target as far as how much capital that could require. We are positive that we do think we're going to have some projects come out of the process but very difficult, at this point to ascertain how big they will be and what they will cost. Vedula Murti – CDP: All right. Thank you.

You bet. Thank you.

Your next question comes from the line of Michael Worms with BMO. Michael Worms – BMO: Hi. Good morning, guys.

Good morning.

Good morning, Mike. Michael Worms – BMO: Just a quick question. With regard to the equity offering pushed out to the midpoint of 2011, just wondering what's allowing to you do that because it's a six or seven-month delay from the end of the year and just trying to get a little color as to what is driving the pushout?

Well, I think, if you put it in your model that way, I think that helps, put us into the guidance range that we have proposed. There are various options that we could employee, such as a forward or some type of transaction like that. So there's different types of transactions that make that a reasonable assumption.

The only bottom line Mike is, in order to give you a good guidance number we have to have an assumption that. Michael Worms – BMO: Yeah.

I mean it doesn't mean that that's for sure when we're going to issue, if market conditions are right we could go earlier. We would go a little bit later. I think one point is that it is possible and Tony mentioned this earlier that, I mean, our debt could creep up to over that 55% number as long as we are comfortable that we are ready to go and issue equity and we've got our financing plans in order. So, we are not necessarily driven to say, okay, it's 55% today. So we have to go issue right now. But we've talked about that a little bit, that during construction here that number may creep up just a little bit higher than that. So we don't have a real definitive time but realistically we're going to have to do it sometime in 2011, before the end of '11 and probably, that mid-year assumption was basically as good as I need to put out in order to calculate a guidance number. Michael Worms – BMO: Okay. Fair enough. See you in a couple days.

All right. Thank you. Michael Worms – BMO: Thank you.

Your next question comes from the line of Jeff Gildersleeve with Millennium Partners. Jeff Gildersleeve – Millennium Partners: Good morning. How are you?

Good, Jeff.

Good morning, Jeff. Jeff Gildersleeve – Millennium Partners: Just looking at the lament guidance slide again. The – it says you've assumed a modest increase in energy marketing, but then to earlier question, you said you thought it would be pretty flat, maybe I misunderstood is it?

Yeah. It's how you describe it. I think at some place between flat and modest. Jeff Gildersleeve – Millennium Partners: Okay, okay. But not a big increase?

No.

We earlier, we said we expect a little bit of improvement early in the coal and power, marketing and environmental side and then I think Tony's specific comment was gas we just expected to be flat. We really didn't expect any improvement in gas market conditions. Jeff Gildersleeve – Millennium Partners: Right. I know in the past you've had storage contracts and things, so you have good visibility to at least part of the earnings and marketing. Any color on sort of how – what percentage you have visibility on at this point of that forecast?

Yeah. We don't have the color on the forward look. I think in the Q we'll have statistics on kind of what we've realized and unrealized for earnings from the various pieces of that business that we typically provide some update on. That should be coming out here in next week.

Next week. Jeff Gildersleeve – Millennium Partners: Okay. Good. And then, now to circle back again, but on the equity assumption for financial modeling, you said mid '11. I think, Tony, before you said, sorry, you're still looking end of this year, early '11?

That's right. Jeff Gildersleeve – Millennium Partners: Okay. Okay. Then – okay, so that's sort of the same as what you've said before?

Yes. Jeff Gildersleeve – Millennium Partners: Okay. Thank you.

All right. Thank you, Jeff.

Ladies and gentlemen, this concludes the question-and-answer portion of the call. I would like to turn the call back over to management for closing remarks?

All right. Well, thank you, everybody. We appreciate your attention to Black Hills and for your participation on the call today. As we said before, we're excited about the quarter, it was a good one, and are also very excited about our future prospect. So thanks for your attendance today and thanks for your interest in Black Hills.

Ladies and gentlemen, thank you so much for your participation in today's conference. This concludes the presentation and you may now disconnect. Have a wonderful day.