Good day, ladies and gentlemen, and welcome to the Black Hills Corporation 2014 First Quarter Earnings Conference Call. My name is Whitley and I’ll be your operator 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 Ms. Val Simpson, Finance Manager of Black Hills Corporation. Please proceed.

Thank you, Whitley. Good morning, everyone. Welcome to Black Hills Corporation’s first quarter earnings call for 2014. With me today are David Emery, Chairman, President and Chief Executive Officer as well as Tony Cleberg, Executive Vice President and Chief Financial Officer. Before I turn over the call, I need to remind everyone 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 David Emery.

Thank you, Val. Good morning, everyone. Thank you for joining us today. I’ll start on slide three of the webcast presentation for those of you who are following along. And today’s discussion format will be similar to previous quarters. I’ll cover the quarter and highlight; Tony Cleberg, our Chief Financial Officer, will cover the financial update for the quarter; and then I will come back on and discuss some strategic go-forward issues. Moving to Slide 5, highlights from the quarter. From a business perspective, we experienced colder than normal weather really throughout most of our utility service territories compared to both last year and to normal weather, primarily providing a positive impact to our gas utility segment. Highlights on the Utilities side of the business, where we had a lot of activity in our utilities during the quarter, our Cheyenne Prairie Generating Station construction remains on schedule and within budget, still expected to begin commercial operation in October. Black Hills Power filed a rate request at the end of March with the South Dakota Public Utilities Commission for a $14.6 million revenue increase to cover increased expenses and infrastructure investments to serve customers, primarily related to the Cheyenne Prairie Generating Station, the South Dakota customer portion of that plant. On March 21, Black Hills Power retired three older coal fired power plants due to the Federal Environmental Regulations namely the EPA Boiler MACT rules. On January 17, Black Hills Power filed a rate case with Wyoming Public Service Commission for $2.8 million in revenue, again primarily related to the Cheyenne Prairie Generating Station the share of that will be dedicated to our Wyoming customers. Moving on to Slide 6, the continuation of our Utility highlights, Cheyenne Light last December filed both electric and gas rate cases with the Wyoming Public…

Thank you, Dave. Good morning. As Dave mentioned, the first quarter performance is very strong, due primarily to the effective operational performance and the unusually cold weather in our gas utility territories. Compared to 2013, our EPS increased 24% year-over-year to $1.8 for the quarter. Moving to Slide 11, we report GAAP earnings and reconcile the earnings, as adjusted, in non-GAAP measure. We do this each quarter to isolate special items and communicate earnings that better indicate our ongoing performance. This slide displays our last five quarters. During the first quarter of 2014, we had no special items. So our GAAP EPS of $1.08 compares to the 2013 as adjusted EPS of $0.87. The 2013 as adjusted EPS excluded $0.11 non-cash mark-to-market gain on interest rate swaps and those were settled in the fourth quarter of 2013. Slide 12 displays our first quarter revenue and operating income. I’ll later explain the differences between the years. But here the main point is we are predominantly regulated, generating 88% of our operating income from the electric and gas utilities in the first quarter. Our operating income was strong increasing $9.8 million or 12% compared to the same period in 2013. The cold weather in 2014 accounted for about two-thirds of the improvement in operating income. Slide 13 displays our first quarter income statement. On later slides, I’ll discuss the segment revenue and operating income in more detail. Here, I want to mention a couple of things that are noteworthy that impacted our first quarter performance. The first item, interest expense declined by $6.1 million, as a result of the refinancing debt at lower rate and settling the $250 million worth of interest rate swaps in the fourth quarter of 2013. Settling the swaps eliminated monthly interest expense charges. The second noteworthy item…

All right. Thank you, Tony. Moving on to slide 21 in the strategic objectives. As we discussed in some detail at our October Analyst Day in New York City, we’ve grouped our major strategic goals into four major categories with the overall objective of being an industry leader and essentially all that we do. Those four major goal categories include Profitable Growth, Valued Service, Better Everyday and a Great Workplace. Moving on to slide 22, in the profitable growth category, strong capital spending drives our earnings growth. And we expect to spend about $1.2 billion in 2014 to 2016 with CapEx projected to be far and excess of depreciation, much of that capital expenditure will be directed towards our utilities at continuing to provide excellent service to our customers by adding necessary infrastructure to serve their needs. Slide 23, provides detail in both historical and projected capital spending by individual business unit and also breaks out our electric utilities into a few subcategories, generation and transmission being the notable ones broken up. On slide 24, which is the subset of slide 23, we just provide more detail for select major utility projects and also give you some indication of some spending in the 2016 and beyond time period. Slide 25, are helping drive our strong earnings growth in the next couple of years, as our Cheyenne Prairie Generating Station, again that’s a $222 million, 132 megawatt plant jointly owned by two of our utilities, Cheyenne Light and Black Hills Power. And as I said earlier, it will be in service by October and we expect it to continue to be on time and on budget. As you can see from the photos on that slide, we’re making great progress on the project. On slide 26, from a value upside perspective,…

(Operator Instructions) And your first question comes from the line of Dan Eggers with Credit Suisse. Please proceed. Dan L. Eggers – Credit Suisse: Hi. Good morning, guys.

Hi. Good morning, Dan.

Good morning. Dan L. Eggers – Credit Suisse: Dave, we appreciate the data on those two wells kind of running or being up and running at least for a month in the quarter. Can you maybe help us, or is there a way to help us fair it out. You made the weather performance would have been in the quarter if the process and equipment would have worked like it was supposed to?

I don’t know how much harder we would have pulled those wells, Dan. I mean we had one of the wells flowing at a rate of up around 8 million a day, but one of the things we learned when we completed some of our earlier wells in the 2011 program is by bringing the wells on a little bit slower, we seem to have better estimated ultimate reserves. And if you look at our San Juan Basin data, which in our appendix we always put that production information in there that shows our well relative to a couple of offset wells drilled another company. We believe pretty strongly that the way we brought that well on, which was a little slower initially, it’s going to result in a quite a bit better ultimate recovery. So, why we pulled the wells a little harder in the first quarter, and may have done it a little bit harder, if the plant had stayed operating continuously, I don’t think we have pulled them that much harder.

And because we think, we’ll get better ultimate results. Dan L. Eggers – Credit Suisse: Do you have a view on when you’ll have I mean, more perspective watching these performances as to what the reserve recovery is going to be out of these wells?

Yeah, realistically, you need at least few months of production to have a real good estimate, because until your production rate actually starts, the declines start to flatten a little, you’re just basically using a type curve based on other wells to project your reserves. So that really is going to take a while. Now that being said, I don’t think we’re seeing any behavior in these wells that we would view as abnormal compared to expectations. So, we’re happy with what we see, and assume they’ll perform as we expected. And we do have a type curve in the back for Piceance Basin wells based on the lateral lengths that we have, and we would expect these to perform according to that based on what we know today. Dan L. Eggers – Credit Suisse: So, you’d expect them to, I mean, the 8 million a day if you ran them at those wells, I guess, people talked about kind of wells performance in that area 10, maybe a little over 10 a day. If you would have pulled them hard as that, do you think you would have performed at those levels in such a state their preference is to reserve recovery strategy, or did your wells kind of give a different look have you seen at other folks?

Yeah. No, we were very pleased with the way the wells performed, and the production rate is really a function of two things, one is preference not to pull them too hard, and then the other kind of the up and down nature of the trial plant, which of course was beyond our ability to control. Dan L. Eggers – Credit Suisse: And then, Dave, do you think, if you’ve few more months between now and say, second quarter results, are you going to be able to talk more about kind of reserve recovery potential out of these wells once you see more performance, or does the agreement limit, what you’ll be able to say on that front?

Well, the agreement significantly limits what we’ll be able to say, and you know we did have some discussions with our partner there at least related to releasing some production information, and they agreed to let us do that, but that doesn’t necessarily mean they all agreed to let us release additional information if we ask. So, we may or may not be able to give you that data in the next quarter. I know that’s not what you want to hear, but we’ve got to get corporation from the third party to release anything. So we’ll continue to try to give you what we can under the terms of the confidentiality agreement. Dan L. Eggers – Credit Suisse: And then what’s kind of vary the decision on how many wells actually get drilled this year, maybe up to six, is there some delineation but, I think we get nine months left, so I’d assume you have to have kind of view on how many of those six get done?

Yeah. It’s our goal to drill all six. In oil and gas drilling, you always have some unknowns rig availability, frac crew availability, timing of getting certain rights away agreements and things like that. We don’t anticipate any problem, and we hope to get started, kind of late second, early third quarter drilling, and should be able to make pretty good progress on those, but you know, there is always some uncertainty, so we hedge or bet a little bit, let’s say up to six, but it’s our intention to drill six. Whether we’ll get them all completed and producing by year-end, kind of depends on when we get started and some other factors. Dan L. Eggers – Credit Suisse: And I guess, I’ll ask another questions in two of other businesses. Can you just give run down on your any implications of Casper coming back to life or there’s any more attention on coal-ash, can you just remind us where you guys stand on that, and what environmental CapEx obligations you might have to remediate?

Yeah, we really have very little in our fleet, it’s about as modern as they get absent CO2 scrubbing, and we’re but as clean as anybody in the country if not cleaner than most. So, we really don’t have any concerns about that. The coal-ash rule is obviously a little bit of a concern for us. I don’t think it would major issue of us. We dispose of our coal-ash in our pit as part of our mine back-fill, and we have a permit that allows us to do that. We’ve done extensive casting on ground water, leaching and things like that as part of that permit process. But the worst case scenario as if we had to, we might have to line a pit and put the ash in it, and then seal as we reclaim our mine. It wouldn’t be a huge cost driver for us. I mean certainly, it would be some of a cost driver and that would be reflected eventually in our utility rates. But probably not a huge issue for us, and certainly the Casper rules, I don’t think are either. Dan L. Eggers – Credit Suisse: Great. Thank you, guys.

Good. Thank you.

(Operator Instructions) You next question comes from the line of David Arcaro with Sidoti. Please proceed. David K. Arcaro – Sidoti & Co. LLC: Hey, thank you. Good morning, guys.

Good morning, Dave.

Good morning. David K. Arcaro – Sidoti & Co. LLC: I had a quick question. So in the power generation and coal mining segments, operating profit was quite a bit higher than it has been in the last couple of years. Wondering how repeatable are those results, or how repeatable are the drivers of results in those two segments?

We operated at a very high level of availability in the power generation. When you operate that high, unfortunately there is only one more to go. The other side is, each year we have a purchase price adjustments that come into play in the first quarter. Of course some inflationary cost increases. So that helped step it up a little bit too. The coal mining I did mention the $700,000 coal tax adjustment that’s a catch-up. Someone else made a settlement, we made the same arguments, and we were able to get an adjustment for coal tax. And then the other thing is, in the overburden removal, the 0.8 was unusually good for us. So the overburden stripping ratio will increase in the future. But on the same token, David, as you recall we are going into a pricing change for the about 35% of the coal that goes to Pacific Corp. So that should improve margins again later this year. David K. Arcaro – Sidoti & Co. LLC: Got it.

So we’ll have some cost increases in coal mining for the overburden, but we’ll also have an improvement in the margin from a standpoint of this new contract. David K. Arcaro – Sidoti & Co. LLC: But it sounds like on the PPA side, those PPA adjustments that happened in the first quarter, they are good through the end of the year?

Yes. David K. Arcaro – Sidoti & Co. LLC: And then you also, it looked like you posted some pretty strong electric volume growth, wondering if there was anything interesting or unusual driving that?

There was an increase in the industrial load is what really drove it. And so, if you have a business in your area that is cranking up, and responding then we’ll see that type of an industrial mode increase. David K. Arcaro – Sidoti & Co. LLC: And then one more quick question. It look like there was a pretty high level of natural gas liquids that you sold this quarter. What drove that, it look like 30%, I think, quarter-over-quarter growth?

Yeah, lot of it came from the Mancos wells in Piceance Basin, not all, but quite a bit of it did. David K. Arcaro – Sidoti & Co. LLC: Got it. Okay, great. Thanks very much.

All right. Thank you.

(Operator Instructions) There are no further questions in queue. I’d now like to turn the call over to Mr. David Emery. Please proceed, sir.

All right. Thank you. Thanks for your time and attention this morning everyone. We certainly appreciate your continued interest in Black Hills. And as Tony said, and certainly I did as well, we’re pretty excited about our performance in the quarter, and have a great outlook for the rest of the year. So thanks for your continued interest, and for those of you who are going to be at the AGA Conference here in a couple of weeks, we’ll see you there. Have a great day.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Good day.