Good day, ladies and gentlemen, and welcome to the Black Hills Corp. 2012 Second Quarter Earnings Conference Call. My name is Bree, and I will be your coordinator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would like to now turn the conference over to Mr. Jerome Nichols, Director of Investor Relations of Black Hills Corp. Please proceed, sir.

Thank you, Bree. Good morning, everyone, and welcome to the Black Hills Corp. 2012 Second Quarter 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 the call over, 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 joining us today. Consistent with prior calls, I will give a quick update on the quarter, followed by a financial update by Tony and then I will come back on for an overview of our go-forward strategy. For those of you following along on the webcast presentation, I will be starting on Slide 5. We had a strong second quarter. Earnings per share as adjusted were up 55% compared to the same quarter in 2011. Several items impacted our business during the quarter, we had record-breaking warm weather across our utility territories, which hurt our Gas Utilities in the spring and helped our Electric Utilities during June. Lower natural gas and crude oil prices impacted our Oil & Gas business, and multiple wild fires in Wyoming, Colorado and South Dakota impacted both our Utility and Oil and Gas operations. We turned off gas service to several Colorado communities, we shut in Oil and Gas wells in the Piceance basin in Colorado and we had impacts to portions of our electric transmission system here in the Black Hills. But in total, there was minimal impact to operating income from the fires during the quarter. On the Utilities side, our Cheyenne Prairie Generating Station received approval on July 31 from the Wyoming Public Service Commission. At Colorado Electric, our new plant, which was placed in service on January 1, continued to operate well with greater than 91% availability during the quarter. New rates were implemented as compared to the prior year. Also at Colorado Electric, our new 29-megawatt wind project is 80% complete and on schedule and on budget. Cheyenne Light on July 1 received approval to implement a $4.3 million increase in electric and natural gas rates, and we set new peak loads…

Thank you, Dave. Good morning. As Dave described, our second quarter performance improved significantly over the previous year. For a shoulder quarter, we're very pleased with our EPS as adjusted and the 55% improvement over the previous year. Excluding the ceiling test impairment, earnings from our Utilities compromised 84% of our operating income. So with the decline in the Gas Utilities due to weather, we achieved solid utility performance. On a GAAP basis, we had some large noncash charges that I'll describe later. Moving to Slide 10, we've reconciled earnings from continued operations on a GAAP basis to earnings per share as adjusted, which is a non-GAAP measure. We feel by adding and subtracting special items to the GAAP earnings, the resulting earnings per share as adjusted better communicates our relevant performance. This slide displays the last 5 quarters, and during the second quarter of 2012, we had 2 noncash special items. The first special item was the addition of $0.23 for a noncash unrealized mark-to-market loss on our $250 million of interest rate swaps. This is the result of continued decline in long-term interest rates. The second special item was the addition of a noncash ceiling test impairment charge recorded to lower the value of our oil and gas properties. The decline in the value was driven by low natural gas prices. So considering these 2 special items, the quarter's earnings per share as adjusted from continuing ops was $0.34 compared to $0.22 for 2011. Looking at last year's second quarter, the reconciliation included a $0.13 addition for the unrealized mark-to-market loss on the same interest rate swaps. Slide 11 displays our second quarter income statement for 2012 compared to 2011. On later slides, I'll discuss the revenue and operating income in detail, but here, I'll describe several other…

All right. Thank you, Tony. Moving on to Slide 19 and talk about long-term strategic objectives, which remain essentially the same. We intend to continue our focus on growth from our core businesses and especially our Utilities within the Midwest and Rocky Mountain regions. We want to improve profitability in all of our businesses and we're going to do that by growing through investment and rate-based assets and ensuring timely recovery of that invested capital on our operating expenses. We want to focus on proving up the tremendous potential value of our existing Oil and Gas assets, particularly in the Mancos Shale; selectively growing our IPP business as opportunities become available; and especially through controlling costs via continuous improvement and operational excellence initiatives. As Tony said, we want to target our long-term debt-to-cap ratio of less than 55% and improve our long-term -- improve our investment credit ratings. Slide 20 illustrates our planned capital investments by business segments for 2012 through 2014 as disclosed in our 10-Q. It's very notable that this forecast includes more than $1.2 billion in growth capital over that 3-year period. Slide 21 provides additional detail on our capital spending plans, including details on several announced projects and also planned spending for some of those projects beyond 2014. Moving on to Slide 22, our 29-megawatt Colorado Electric wind project is progressing on budget and on schedule for completion prior to year end. At the end of June, construction was 80% complete and is continuing to proceed as planned. Slide 23 is an update on recent regulatory proceedings in our Utilities. Our Cheyenne Prairie Generating Station is progressing according to plan. During a hearing on July 31 with the Wyoming Public Service Commission, they approved our Certificate of Public Convenience and Necessity for the $237 million, 132-megawatt…

[Operator Instructions] Your first question comes from the line of Kevin Cole with Crédit Suisse. Kevin Cole - Crédit Suisse AG, Research Division: I guess, first on the regulated growth. Can you help me make sure I'm fully understanding where the Black Hills Power Cheyenne Light is versus the needed approvals from Wyoming and South Dakota. And so, first, I guess, is it correct that basically you've reached -- you received all the approvals required from Wyoming to move forward on the project? And in South Dakota, there is no, I guess, pre-approval process, but given the EPA closures and I guess that should satisfy the need component? And maybe the CWIP ask will help -- will kind of be like a pre-approval process?

Yes, essentially we have an approved CPCN in Wyoming for both Cheyenne Light and Black Hills Power. We would like to go ahead with CWIP rider which will essentially allows us to gradually increase rates during construction, avoid a little bit of the total capitalized cost because we're not capitalizing the interest for construction. And I think we got generally a good feeling about that proposal, but the Commission would really rather deal with that in a separate proceeding where they can focus on that and only that. So we intend to file that. So Wyoming is pretty much taken care of. We have the go-ahead that we need to start construction once we get our air permits, which we hope to get this quarter. Now South Dakota, as I said before, there is no CPCN or pre-approval process there. We believe that the demonstration of need is very simple when we're retiring 82 megawatts of coal-fired generation, so we're not concerned about proceeding with the project. However, similar to Wyoming, we like the idea of doing some kind of a construction work in progress rider in South Dakota in the last legislative session really approved a piece of legislation that would allow us to do that. So we intend to pursue it and we think it would be favorably received. You'll never know until you make the actual filing what we believe they'll be supportive of that. It certainly mitigates the rate shock to rate payers of having one large increase all at once and allows again to reduce the capitalized cost of the whole project. We would probably proceed even in the absence of that hard to say until we were to have any kind of an adverse ruling. But we have what we need to proceed. We intend to proceed with the project and hopefully, we can work our way through these CWIP riders in both states which will just make the whole rate case process a little smoother. You made the comment, Kevin, that perhaps the South Dakota one would be a pre-approval of sorts. There is no pre-approval statute really in South Dakota, but you certainly wouldn't think they would allow you to raise rates for a project if they weren't going to allow the project and rate base after its completion. So I guess in some aspects, that would be a form of pre-approval. Kevin Cole - Crédit Suisse AG, Research Division: Great. And then on the funding of this project, I guess given your balance sheet just in pretty healthy today, is it reasonable to assume that you'll take a similar approach as you did with the Colorado projects where you'll seek to take the dilution closer to when the projects come into service, or do you see other growth projects being adequate enough that you can kind of issue the equity sooner?

Well, I think as we said previously, particularly upon the sale of our Enserco Energy Marketing business that we expect to begin well through this year and hopefully even a little farther before we have to issue additional equity. I think during construction, we've had conversations with rating agencies and I don't think for a regulated facilities, they have a problem with letting that debt-to-cap ratio creep up a few percentage points, 58%, 59% when it's for regulated projects. And then we would look -- if we have to do equity financing, we would look to do it opportunistically in that during construction or late construction phases as needed. But certainly, we don't want to do it any sooner than necessary. Kevin Cole - Crédit Suisse AG, Research Division: Okay. And then I guess moving to the E&P business. Is it correct to assume that the dollars that you're once allocating towards the Mancos development are now being aimed, I guess, towards the more relevant Bakken oil play today?

Yes, we haven't announced the change in our E&P capital spending for the year. We do have some other projects relatively small and probably not worth mentioning by name, but we do have several other projects that will use up a little bit of that capital, and then certainly the Bakken development continues to consume capital as well. Kevin Cole - Crédit Suisse AG, Research Division: So when you say pursue new crude oil opportunities, is that the Bakken play?

No, not necessarily. We're always looking for new projects and particularly, crude oil projects kind of like everyone else in the industry. But we do have some opportunities around some of our existing operations, say, in the Powder River basin and elsewhere that we might focus a little more attention on because they're good economical crude projects. Kevin Cole - Crédit Suisse AG, Research Division: So the strategy here to develop that for the economics of today or to prove it up than to maybe monetize it?

Well, clearly, we're developing it for the economics of today. I think we've demonstrated with other businesses that if we can get a very strong value for our business or an asset that we're willing to divest it and capture that value for shareholders, and so we'll continue to do both, I guess. Kevin Cole - Crédit Suisse AG, Research Division: And then I guess on the impairment test for the rest of the year, you mentioned the $2.50 NYMEX price?

Yes. Kevin Cole - Crédit Suisse AG, Research Division: Why are you using that price given that third quarter looks to be $2.90, the fourth quarter looks to be $3.10, so the full year will be $2.75, and even in '13, we're starting to see $3.62, then '14 we're seeing good recovery $4 range again? I guess why are you using such a low number for that test?

Well, just from a projection standpoint, we still don't know what the gas price will be even though you have a strip in the futures market. So we just use $2.50 to ballpark where we'd end up, Kevin.

Essentially gives you hopefully a worst case scenario. Kevin Cole - Crédit Suisse AG, Research Division: Yes. What sort of sensitivity if that $2.50 ended being closer to $2.75? Do you have that by any chance?

We don't. No, we don't.

We don't really have that, Kevin. Kevin Cole - Crédit Suisse AG, Research Division: Do you think that would materially change the number, or if we're just kind of same ballpark?

No, it will come down. Kevin Cole - Crédit Suisse AG, Research Division: Okay. And then I guess, David, just kind of an I guess overall kind of conversation on the growth profile of the business. I guess, now since you've -- I guess you've sold the pesky energy trading business and your earnings are I guess, for the most part, locked in now through 2015 with the advancements of the CapEx program on the last week or so, would you consider kind of giving an EPS growth rate to help us kind of I guess regauge for your now, I guess, higher-quality consolidated business is going?

That's something we would consider, Kevin, and historically, we haven't done that. We just typically give our guidance in November for the subsequent year, and we've contemplated making changes to that but not too seriously at this point in time. We do lay out in kind of great detail our capital spending plans, which should provide the information necessary to calculate that growth rate.

Again -- there are no further questions at this time. [Operator Instructions] There are no questions at this time. I would like to turn the conference back over to Mr. David Emery for any closing remarks.

All right. Well, thank you. Thanks for your attendance today. We sincerely appreciate it, and thanks for your continued interest in Black Hills Corp. And we're excited about the quarter and looking forward to the rest of the year. Have a great day.

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