Good day, ladies and gentlemen, and welcome to the Black Hills Corporation 2011 Fourth Quarter and Full Year Earnings Conference Call. My name is Chaneda, and I will be your coordinator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to Mr. Jerome Nichols, Director of Investor Relations and Corporate Communications of Black Hills Corporation. Please proceed, sir.

Thank you, Chaneda. Good morning, everyone, and welcome to the Black Hills Corporation 2011 Fourth Quarter and Full Year Earnings Call. With me today are David Emery, Chairman, President and Chief Executive Officer; and Tony Cleberg, Executive Vice President and Chief Financial Officer. 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 2 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 David Emery.

Thank you, Jerome. Good morning, everyone. Thanks for your attendance this morning. For those of you following along on the webcast presentation, we will give slide numbers periodically, so you'll know which slide we're speaking from. On Slide 3, an agenda here, similar to previous calls, I'll cover fourth quarter and full year highlights and review of our accomplishments. Tony Cleberg will go over the financials for both the quarter and the full year, and then I'll talk about strategy and forward-looking information on new projects. But before I start with a specific discussion of some of the webcast slides, I want to comment on our 2011 earnings as disclosed in our earnings press release issued late yesterday. As a result of our January 18 announcement regarding the pending sale of our Energy Marketing business, our 2011 financial statements will reflect Energy Marketing as discontinued operations. However, since the announcement of that sale occurred subsequent to year-end. In our earnings release, we also presented a non-GAAP adjusted earnings per share number for 2011 that included Energy Marketing results. We did that for the purposes of more accurately comparing 2011 results against the prior year and also against our previously issued earnings guidance. So on that basis, our 2011 earnings per share as adjusted and including Energy Marketing was $1.92 per share, a 6% increase compared to $1.81 in the previous year. As you might recall, following a real challenging first quarter of 2011, we revised our initial earnings guidance of $1.90 to $2.15, downward $0.20 per share to $1.70 to $1.95. We later even narrowed that range further. We're very pleased with the achievement of $1.92 per share, which not only represents the 6% improvement against 2010, but it's also within the lower end of our original guidance range, I…

Thank you, Dave. Good morning. From a financial standpoint, our full year for 2011 improved over 2010 even with the earnings shortfall that we saw in the first quarter. Our first quarter earnings per share as adjusted and excluding Energy Marketing, was $0.10 below the prior year. So we feel good about our progress over the last 3 quarters, and the fact that we finished $0.02 ahead of 2010. In my comments, I will continue to address both the fourth quarter and the full year. Moving to the earnings per share analysis on Slide 11. Consistent with prior periods, we adjusted our net income to display a non-GAAP earnings measure that we feel better communicates our relevant performance. Special gain on loss items are excluded to compute net income or earnings per share as adjusted. This slide displays the last 5 quarters and the full year for 2011 and compared to 2010. The only special item included in the fourth quarter of 2011 was the addition of $0.02 for the non-cash unrealized mark-to-market loss on the $250 million of interest rate swaps. So with that adjustment, the quarter's earnings per share as adjusted from continuing operations was $0.46 per share compared to $0.44 for 2010. Looking at last year's fourth quarter, the reconciliation included a $0.44 reduction for a unrealized mark-to-market gain on the same interest rate swaps. Our full year continuing operations as adjusted was $1.69 compared to $1.67 for 2010. The discontinued operation line includes our Energy Marketing segment, which we're divesting. And also the discontinued operation excludes indirect corporate expenses related to Energy Marketing. These are now charged or reclassified to continuing operations, which is a GAAP requirement. At the bottom of this slide, the earnings per share impact is shown for reclassified expenses. So with these…

Thank you, Tony. Moving on to Slide 16. During the past several years, we've accomplished a major transformation of the company, from being primarily driven by non-regulated assets and earnings, to now being driven by much more stable assets and earnings, our strategic accomplishments over those last several years provide much more focus on our core Utilities, Power Generation and fuel production businesses, which in turn provide more stable future in cash flow and earnings as well as earnings growth for investors. Slide 17 is just an update to our strategic initiatives timeline. This is provided to give you an estimated timing that was with regard to many of our key projects and initiatives. Slide 18. Our clearly defined investment program will drive strong future earnings growth, with nearly $1 billion in capital spending plan for 2012 and 2013. Slide 19 provides the detailed breakdown of our key long-term growth opportunities for the 2012 to 2015 timeframe. This slide doesn't include maintenance capital expenditures or other smaller projects, just primarily focuses on what we would deem large growth-oriented type projects. It's been updated also to provide a little more timing detail for you on some of the announced projects as far as which year those expenditures will occur and to what amounts. Slide 20, regulatory approval in Colorado. We received approval from the Colorado Public Utilities Commission for the rate case associated with our new utility power plant for our Colorado Electric utility. Those rates, as I mentioned earlier, went into effect January 1 of this year, same day as commercial operations of the new power plant. On other fronts in Colorado, we have an electric resource plan that we expect to file in the second quarter there. That resource plan will deal primarily with how we intend to meet…

[Operator Instructions] Your first question comes the line of Michael Worms with BMO.

The question, I have is related to the press release where you discussed the Colorado rate decision. You mentioned that you received an additional $17.5 million for other cost including purchase power and transmission. Now just, I assume the purchase power part of that piece relates to the merchant plant at Pueblo as well. And then the other question would be regarding transmission. Exactly what was the transmission project? And why wouldn't transmission be included in base rates rather than in the other -- the other category?

The answer is on the IPP, the purchase power definitely includes the impact of the new 20-year power purchase agreement that we have with our own IPP subsidiary. And one of the things that we did through the rate case and worked this out with the staff and others that things like additions to transmission, fuel and other things will not be included in base rates. And that we'll deal with them essentially entirely in the riders or cost pass-through mechanisms. So some of the newer transmission projects and things will go through in that account, if you will, or that portion of our rate structure rather than be included in base rates, some of that relates the timing of the projects and other things. And then future additions, if you recalled there in Colorado, there's a provision that allows us to do future additions to the transmission system and recovery a return on those without going back through a general rate case.

Fair enough, thank you. And then the other question I had was regarding the coal business. It looks like in the fourth quarter, O&M expenses went up dramatically over the same period in 2010. And so we can you just kind of discuss that a little? Is that the continuation of the cost pressures you had at the coal mine. And then secondly, I think, Tony was suggesting that earnings would improve for coal in 2012. I was just wondering if you could give us a little bit more color around what will -- what the drivers will be and how we should look at the cost structure at the coal business in 2012?

On the -- I mean, let me take the last question first. The main thing there, Michael, is by in effect having this contract expire at year-end. If you take 4 bucks times 1.7 million tons, we should get that improvement right away. And then we've got ongoing efficiencies, things that we've done to try to reduce cost. So we expect not the same kind of improvement, but some nominal improvement for those also.

As far as fourth quarter expenses, Mike, one of the drivers there is we moved significantly more overburden that quarter than we did in the prior year, coal tonnage was similar. But we did move quite a bit more over burdened in that quarter, which will drive costs.

Yes. I think our stripping ratio went up to 2.9 versus 2.6. So that really gets at it.

One of the things we've done which also I think speaks to 2012 coal mine expectations and we mentioned it briefly in our webcast presentation materials is that, we've applied for a new mining permit at wide act which essentially allows us to reverse the order in which we mine a portion of the coal mine. And what that will do is to allow us to in the next few years mine some lower overburdened areas of the mine. And then in a couple of years, we have a price reopener in one of our larger contracts that we discussed a little bit last year, we'll be back into the higher overburdened areas, but our revenue will be higher as well. So it allows us to kind of matchup the timing of our mining expense with our coal prices at current levels. We're in the process of amending that permit. We hope to have approval in the second quarter and maybe be able to commence different mining operation in the third quarter, which will also reduce expenses primarily just overburdened.

[Operator Instructions] And at this time, I'm showing we have no further questions. I would now like to turn the call back over to Mr. Dave Emery for the closing remarks.

All right. Well, thank you. We certainly appreciate everybody's time today and your interest and your continued interest in Black Hills. Have a good weekend. Thank you.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a good day.