CURRENT REPORT | |
PURSUANT TO SECTION 13 OR 15(d) OF THE | |
SECURITIES EXCHANGE ACT OF 1934 |
Black Hills Corporation | |
(Exact name of registrant as specified in its charter) | |
South Dakota | |
(State or other jurisdiction of incorporation) | |
001-31303 | 46-0458824 | |
(Commission File Number) | (IRS Employer Identification No.) | |
625 Ninth Street | ||
Rapid City, South Dakota | 57709-1400 | |
(Address of principal executive offices) | (Zip Code) | |
605.721-1700 | ||
(Registrants telephone number, indicating area code) | ||
Not Applicable | ||
(Former name or former address, if changed since last report) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
Soliciting materials pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(d)) | ||
Pre-commencement communications pursuant to Rule 13e-e(c) under the Exchange Act (17 CFR 240.13e-4(c) | ||
Exhibit No. | Description | ||
99 | Press release dated | February 2, 2016 |
• | Sixth consecutive year of increased earnings, as adjusted |
• | 46th consecutive year of increased dividend |
• | SourceGas acquisition regulatory approval process progressing |
Three Months Ended Dec. 31, | Twelve Months Ended Dec. 31, | |||||||||||
(in millions, except per share amounts) | 2015 | 2014 | 2015 | 2014 | ||||||||
Non-GAAP:* | ||||||||||||
Net income, as adjusted (Non-GAAP) | $ | 33.5 | $ | 34.5 | $ | 135.0 | $ | 130.9 | ||||
Earnings per share, as adjusted (Non-GAAP) | $ | 0.71 | $ | 0.77 | $ | 2.98 | $ | 2.93 | ||||
GAAP: | ||||||||||||
Net income (loss) | $ | (14.2 | ) | $ | 34.5 | $ | (32.1 | ) | $ | 130.9 | ||
Earnings (loss) per share, diluted | $ | (0.30 | ) | $ | 0.77 | $ | (0.71 | ) | $ | 2.93 | ||
* An accompanying schedule for the GAAP to Non-GAAP adjustment reconciliation is provided below. |
• | Black Hills Corp. has received regulatory approvals for the acquisition of SourceGas LLC in Arkansas, Nebraska and Wyoming. Closing of the transaction will occur upon receipt of regulatory approval in Colorado. |
• | On Jan. 13, 2016, Black Hills Corp. finalized the permanent financing needed to fund the SourceGas transaction by completing a $550 million public debt offering. The company issued $250 million of senior unsecured notes due 2019 and $300 million of senior unsecured notes due 2026. |
• | On Nov. 23, Black Hills Corp. completed public offerings of common stock and equity units. The company sold 6.325 million shares of its common stock at $40.25 per share, for total net proceeds of approximately $246 million. The company also sold 5.980 million equity units for net proceeds of $290 million. |
• | On Jan. 25, 2016, Black Hills Power received approval from the Wyoming Public Service Commission to begin construction on the first segment of the new 144-mile, $54 million electric transmission line from northeastern Wyoming to Rapid City, South Dakota. |
• | On Dec. 28, Cheyenne Light, Fuel & Power recorded a new winter peak load of 202 megawatts compared to the prior winter peak load of 197 megawatts on Dec. 30, 2014. On July 27, Cheyenne Light, Fuel & Power recorded an all-time electric peak load of 212 megawatts. The previous peak load of 198 megawatts was recorded on July 21, 2014. |
• | On Oct. 21, Colorado Electric received approval from the Colorado Public Utilities Commission to purchase the $109 million, 60-megawatt Peak View Wind Project located near Colorado Electric's Busch Ranch wind farm. Construction by a wind developer is expected to commence in the first quarter and the project is expected to be in service by the end of 2016. |
• | On Sept. 30, the company's utility subsidiaries submitted applications seeking approval for a cost of service gas program in Iowa, Kansas, Nebraska, South Dakota and Wyoming. A similar application was filed in Colorado on Nov. 2. |
• | On July 1, the company closed the $17 million purchase of a natural gas utility with 6,700 customers in northwest Wyoming and certain nearby pipeline assets. The new gas utility customers were fully integrated onto Black Hills’ systems immediately upon closing of the transaction. |
• | On June 1, construction commenced on a $65 million, 40-megawatt, natural gas-fired turbine at Colorado Electric’s Pueblo Airport Generating Station. The new turbine is expected to be in service by the end of 2016. |
• | In the fourth quarter of 2015, the company initiated a process to explore the sale of a minority interest in its Colorado IPP generating assets. The process is ongoing and a decision is expected in the first quarter of 2016. |
• | The oil and gas business finished drilling the last of 13 horizontal Mancos Shale natural gas wells for its 2014/2015 southern Piceance Basin drilling program. Nine of the 13 wells are on production, while completion activities for the final four wells have been deferred. |
• | Financial results for oil and gas were negatively impacted by lower average prices received for crude oil and natural gas. Due to low commodity prices, the oil and gas segment recorded $45 million and $158 million after-tax noncash impairments of crude oil and natural gas properties for the fourth quarter and full year, respectively. |
• | On Jan. 27, 2016, the Black Hills Corp. board of directors approved an increase in the quarterly dividend of $0.015 per common share to $0.42 per share, equivalent to an annual increase of $0.06 and dividend rate of $1.68 per share. This represents the 46th consecutive annual dividend increase. Common shareholders of record at the close of business on Feb. 16, 2016, will receive $0.42 per share, payable March 1, 2016. |
• | On Jan. 20, 2016, the company entered into $150 million of interest rate swaps to mitigate interest rate risk associated with anticipated future debt refinancing activity. In the fourth quarter, the company entered into $250 million of interest rate swaps for similar purposes. |
• | On June 26, the company extended its $500 million, unsecured revolving credit facility, including the $250 million accordion feature. The credit facility has a maturity date of June 26, 2020, with a cost of borrowing based on the company's credit rating, which is currently LIBOR plus a spread of 112.5 basis points. |
• | On April 13, Black Hills closed a new $300 million unsecured term loan. The loan has a maturity date of April 12, 2017, with a cost of borrowing based on LIBOR plus a spread of 90 basis points. The proceeds of the term loan were used to repay a $275 million term loan due June 19, 2015, and for other corporate purposes. |
(in millions, except per share amounts) | Three Months Ended Dec. 31, | Twelve Months Ended Dec. 31, | |||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
Net income (loss): | |||||||||||||
Utilities: | |||||||||||||
Electric | $ | 20.7 | $ | 15.4 | $ | 79.3 | $ | 59.6 | |||||
Gas | 10.8 | 13.6 | 37.8 | 41.9 | |||||||||
Total Utilities Group | 31.5 | 29.0 | 117.1 | 101.5 | |||||||||
Non-regulated Energy: | |||||||||||||
Power generation | 7.9 | 5.4 | 32.7 | 28.5 | |||||||||
Coal mining | 2.8 | 3.3 | 11.9 | 10.5 | |||||||||
Oil and gas (a) (b) | (49.9 | ) | (3.3 | ) | (180.0 | ) | (8.5 | ) | |||||
Total Non-regulated Energy Group | (39.2 | ) | 5.4 | (135.4 | ) | 30.4 | |||||||
Corporate and Eliminations (c) | (6.4 | ) | 0.1 | (13.8 | ) | (1.0 | ) | ||||||
Net income (loss) | $ | (14.2 | ) | $ | 34.5 | $ | (32.1 | ) | $ | 130.9 | |||
Weighted average common shares outstanding - Diluted | 47.3 | 44.6 | 45.3 | 44.6 | |||||||||
Diluted - | |||||||||||||
Total Diluted Earnings (loss) Per Share | $ | (0.30 | ) | $ | 0.77 | $ | (0.71 | ) | $ | 2.93 |
(a) | Financial results for the three months and twelve months ended Dec. 31, 2015 included non-cash after-tax ceiling test impairments of $45 million and $158 million, respectively. |
(b) | Financial results for the twelve months ended Dec. 31, 2015 include a non-cash after-tax equity investment impairment charge of $2.9 million. |
(c) | Financial results for the three and twelve months ended Dec. 31, 2015 included external acquisition costs (net of tax) of $3.7 million and $6.7 million, respectively, and after-tax internal labor costs attributable to the acquisition that otherwise would have been charged to other business segments of $1.5 million and $3.0 million, respectively. |
* | Earnings per share, as adjusted, is defined as GAAP Earnings per share, adjusted for expenses and gains that the company believes do not reflect the company’s core operating performance. Examples of these types of adjustments may include unique one-time non-budgeted events, impairing of assets, and acquisition and disposition costs. The company is not able to provide forward-looking quantitative GAAP to non-GAAP reconciliation for the 2016 earnings guidance, as adjusted, because we do not know the unplanned or unique events that may occur. |
Three Months Ended Dec. 31, | Twelve Months Ended Dec. 31, | ||||||||||||||||||||||||||||||
(In millions, except per share amounts) | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||||||
(after-tax) | Income | EPS | Income | EPS | Income | EPS | Income | EPS | |||||||||||||||||||||||
Net Income (loss) | $ | (14.2 | ) | $ | (0.30 | ) | $ | 34.5 | $ | 0.77 | $ | (32.1 | ) | $ | (0.71 | ) | $ | 130.9 | $ | 2.93 | |||||||||||
Adjustments, after-tax: | |||||||||||||||||||||||||||||||
Ceiling test impairment | 44.5 | 0.94 | — | — | 157.5 | 3.48 | — | — | |||||||||||||||||||||||
Impairment of equity investments | (0.5 | ) | (0.01 | ) | — | — | 2.9 | 0.06 | — | — | |||||||||||||||||||||
External acquisition costs | 3.7 | 0.08 | — | — | 6.7 | 0.15 | — | — | |||||||||||||||||||||||
Rounding | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Total adjustments | 47.7 | 1.01 | — | — | 167.1 | 3.69 | — | — | |||||||||||||||||||||||
Net income (loss) (Non-GAAP) | $ | 33.5 | $ | 0.71 | $ | 34.5 | $ | 0.77 | $ | 135.0 | $ | 2.98 | $ | 130.9 | $ | 2.93 |
Three Months Ended Dec. 31, | Increase (Decrease) | Twelve Months Ended Dec. 31, | Increase (Decrease) | ||||||||||||||||
2015 | 2014 | 2015 vs. 2014 | 2015 | 2014 | 2015 vs. 2014 | ||||||||||||||
(in millions) | |||||||||||||||||||
Gross margin | $ | 108.1 | $ | 101.9 | $ | 6.2 | $ | 432.4 | $ | 382.7 | $ | 49.7 | |||||||
Operations and maintenance | 42.3 | 43.7 | (1.4 | ) | 173.8 | 165.6 | 8.2 | ||||||||||||
Depreciation and amortization | 21.6 | 21.4 | 0.2 | 84.3 | 79.4 | 4.9 | |||||||||||||
Operating income | 44.1 | 36.7 | 7.4 | 174.3 | 137.7 | 36.6 | |||||||||||||
Interest expense, net | (13.0 | ) | (13.2 | ) | 0.2 | (53.5 | ) | (48.8 | ) | (4.7 | ) | ||||||||
Other (expense) income, net | 0.4 | 0.2 | 0.2 | 1.2 | 1.2 | — | |||||||||||||
Income tax benefit (expense) | (10.8 | ) | (8.3 | ) | (2.5 | ) | (42.8 | ) | (30.5 | ) | (12.3 | ) | |||||||
Net income (loss) | $ | 20.7 | $ | 15.4 | $ | 5.3 | $ | 79.3 | $ | 59.6 | $ | 19.7 |
Three Months Ended Dec. 31, | Twelve Months Ended Dec. 31, | ||||||||
Operating Statistics: | 2015 | 2014 | 2015 | 2014 | |||||
Retail sales - MWh | 1,238,059 | 1,212,592 | 4,990,594 | 4,775,808 | |||||
Contracted wholesale sales - MWh | 45,774 | 89,930 | 260,893 | 340,871 | |||||
Off-system sales - MWh | 227,886 | 284,808 | 1,000,085 | 1,118,641 | |||||
Total electric sales - MWh | 1,511,719 | 1,587,330 | 6,251,572 | 6,235,320 | |||||
Total gas sales - Cheyenne Light - Dth | 1,972,115 | 1,435,290 | 5,502,036 | 4,537,995 | |||||
Regulated power plant availability: | |||||||||
Coal-fired plants (a) (b) | 89.2 | % | 98.1 | % | 91.5 | % | 93.8 | % | |
Other plants (c) | 95.8 | % | 93.0 | % | 95.4 | % | 90.2 | % | |
Total availability | 93.4 | % | 94.8 | % | 94.0 | % | 91.5 | % |
(a) | The 3 and 12 months ended Dec. 31, 2015 reflect a planned outage at Wygen III. |
(b) | The 12 months ended Dec. 31, 2014 reflect a planned overhaul on Neil Simpson II for emissions controls upgrades. |
(c) | The 12 months ended Dec. 31, 2014 reflect planned overhauls for control system upgrades to meet NERC cyber security regulations on the Ben French CT's 1-4. |
Three Months Ended Dec. 31, | Increase (Decrease) | Twelve Months Ended Dec. 31, | Increase (Decrease) | ||||||||||||||||
2015 | 2014 | 2015 vs. 2014 | 2015 | 2014 | 2015 vs. 2014 | ||||||||||||||
(in millions) | |||||||||||||||||||
Gross margin | $ | 59.7 | $ | 63.3 | $ | (3.6 | ) | $ | 229.6 | $ | 236.9 | $ | (7.3 | ) | |||||
Operations and maintenance | 31.0 | 32.2 | (1.2 | ) | 127.8 | 132.6 | (4.8 | ) | |||||||||||
Depreciation and amortization | 7.5 | 6.8 | 0.7 | 29.0 | 26.5 | 2.5 | |||||||||||||
Operating income | 21.3 | 24.3 | (3.0 | ) | 72.8 | 77.8 | (5.0 | ) | |||||||||||
Interest expense, net | (3.9 | ) | (3.9 | ) | — | (14.9 | ) | (15.3 | ) | 0.4 | |||||||||
Other (expense) income, net | — | — | — | 0.5 | — | 0.5 | |||||||||||||
Income tax (expense) | (6.6 | ) | (6.8 | ) | 0.2 | (20.7 | ) | (20.7 | ) | — | |||||||||
Net income (loss) | $ | 10.8 | $ | 13.6 | $ | (2.8 | ) | $ | 37.8 | $ | 41.9 | $ | (4.1 | ) |
Three Months Ended Dec. 31, | Twelve Months Ended Dec. 31, | ||||||||
Operating Statistics: | 2015 | 2014 | 2015 | 2014 | |||||
Total gas sales - Dth | 13,603,877 | 17,429,853 | 51,136,263 | 60,323,416 | |||||
Total transport volumes - Dth | 16,277,106 | 17,077,837 | 65,721,718 | 67,463,143 |
Three Months Ended Dec. 31, | Increase (Decrease) | Twelve Months Ended Dec. 31, | Increase (Decrease) | ||||||||||||||||
2015 | 2014 | 2015 vs. 2014 | 2015 | 2014 | 2015 vs. 2014 | ||||||||||||||
(in millions) | |||||||||||||||||||
Revenue | $ | 22.6 | $ | 21.2 | $ | 1.4 | $ | 90.8 | $ | 87.6 | $ | 3.2 | |||||||
Operations and maintenance | 8.4 | 9.4 | (1.0 | ) | 32.1 | 33.1 | (1.0 | ) | |||||||||||
Depreciation and amortization | 1.0 | 1.1 | (0.1 | ) | 4.3 | 4.5 | (0.2 | ) | |||||||||||
Operating income | 13.2 | 10.7 | 2.5 | 54.3 | 49.9 | 4.4 | |||||||||||||
Interest expense, net | (0.8 | ) | (0.9 | ) | 0.1 | (3.2 | ) | (3.7 | ) | 0.5 | |||||||||
Other income (expense), net | — | — | — | 0.1 | — | 0.1 | |||||||||||||
Income tax benefit (expense) | (4.5 | ) | (4.4 | ) | (0.1 | ) | (18.5 | ) | (17.7 | ) | (0.8 | ) | |||||||
Net income (loss) | $ | 7.9 | $ | 5.4 | $ | 2.5 | $ | 32.7 | $ | 28.5 | $ | 4.2 |
Three Months Ended Dec. 31, | Twelve Months Ended Dec. 31, | ||||||||
Contracted Fleet Power Plant Availability | 2015 | 2014 | 2015 | 2014 | |||||
Gas-fired plants | 99.3 | % | 98.8 | % | 99.1 | % | 99.0 | % | |
Coal-fired plants (a) | 99.1 | % | 84.5 | % | 98.4 | % | 94.7 | % | |
Total availability | 99.2 | % | 95.0 | % | 98.9 | % | 97.8 | % |
(a) | Availability was impacted by a planned outage at Wygen I occurring during the three months ended Dec. 31, 2014. |
Three Months Ended Dec. 31, | Increase (Decrease) | Twelve Months Ended Dec. 31, | Increase (Decrease) | ||||||||||||||||
2015 | 2014 | 2015 vs. 2014 | 2015 | 2014 | 2015 vs. 2014 | ||||||||||||||
(in millions) | |||||||||||||||||||
Revenue | $ | 15.4 | $ | 17.6 | $ | (2.2 | ) | $ | 65.1 | $ | 63.4 | $ | 1.7 | ||||||
Operations and maintenance | 10.2 | 11.1 | (0.9 | ) | 41.6 | 41.2 | 0.4 | ||||||||||||
Depreciation, depletion and amortization | 2.4 | 2.5 | (0.1 | ) | 9.8 | 10.3 | (0.5 | ) | |||||||||||
Operating income (loss) | 2.9 | 4.0 | (1.2 | ) | 13.6 | 11.9 | 1.7 | ||||||||||||
Interest (expense) income, net | (0.1 | ) | (0.1 | ) | — | (0.4 | ) | (0.4 | ) | — | |||||||||
Other income (expense) | 0.5 | 0.5 | — | 2.2 | 2.3 | (0.1 | ) | ||||||||||||
Income tax benefit (expense) | (0.5 | ) | (1.1 | ) | 0.6 | (3.6 | ) | (3.3 | ) | (0.3 | ) | ||||||||
Net income (loss) | $ | 2.8 | $ | 3.3 | $ | (0.5 | ) | $ | 11.9 | $ | 10.5 | $ | 1.4 |
Three Months Ended Dec. 31, | Twelve Months Ended Dec. 31, | ||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
Operating Statistics: | (in thousands) | ||||||||||||
Tons of coal sold | 1,004 | 1,085 | 4,140 | 4,317 | |||||||||
Cubic yards of overburden moved | 1,536 | 1,722 | 6,088 | 4,646 | |||||||||
Revenue per ton | $ | 15.38 | $ | 16.26 | $ | 15.71 | $ | 14.68 |
Three Months Ended Dec. 31, | Increase (Decrease) | Twelve Months Ended Dec. 31, | Increase (Decrease) | ||||||||||||||||
2015 | 2014 | 2015 vs. 2014 | 2015 | 2014 | 2015 vs. 2014 | ||||||||||||||
(in millions) | |||||||||||||||||||
Revenue | $ | 9.8 | $ | 11.6 | $ | (1.8 | ) | $ | 43.3 | $ | 55.1 | $ | (11.8 | ) | |||||
Operations and maintenance | 8.7 | 10.9 | (2.2 | ) | 41.6 | 42.7 | (1.1 | ) | |||||||||||
Depreciation, depletion and amortization | 6.8 | 5.2 | 1.6 | 29.3 | 24.2 | 5.1 | |||||||||||||
Impairment of long-lived assets | 71.2 | — | 71.2 | 249.6 | — | 249.6 | |||||||||||||
Operating income (loss) | (77.0 | ) | (4.5 | ) | (72.5 | ) | (277.2 | ) | (11.8 | ) | (265.4 | ) | |||||||
Interest expense, net | (0.9 | ) | (0.4 | ) | (0.5 | ) | (2.5 | ) | (1.7 | ) | (0.8 | ) | |||||||
Other (expense) income, net | — | 0.1 | (0.1 | ) | (0.3 | ) | 0.2 | (0.5 | ) | ||||||||||
Impairment of equity investments | 0.8 | — | 0.8 | (4.4 | ) | — | (4.4 | ) | |||||||||||
Income tax benefit (expense), net | 27.2 | 1.5 | 25.7 | 104.5 | 4.8 | 99.7 | |||||||||||||
Net income (loss) | $ | (49.9 | ) | $ | (3.3 | ) | $ | (46.6 | ) | $ | (180.0 | ) | $ | (8.5 | ) | $ | (171.5 | ) |
Three Months Ended Dec. 31, | Percentage Increase | Twelve Months Ended Dec. 31, | Percentage Increase | |||||||||||||
Operating Statistics: | 2015 | 2014 | (Decrease) | 2015 | 2014 | (Decrease) | ||||||||||
Bbls of crude oil sold | 93,136 | 88,066 | 6 | % | 371,493 | 337,196 | 10 | % | ||||||||
Mcf of natural gas sold | 2,830,432 | 1,698,148 | 67 | % | 10,057,378 | 7,155,076 | 41 | % | ||||||||
Bbls of NGL sold | 20,301 | 32,477 | (37 | )% | 101,684 | 134,555 | (24 | )% | ||||||||
Mcf equivalent sales | 3,511,051 | 2,421,405 | 45 | % | 12,896,440 | 9,985,584 | 29 | % | ||||||||
Depletion expense/Mcfe | $ | 1.58 | $ | 1.57 | 1 | % | $ | 1.91 | $ | 1.84 | 4 | % | ||||
Average price received including hedges: | ||||||||||||||||
Crude Oil | $ | 53.19 | $ | 68.63 | (22 | )% | $ | 60.69 | $ | 79.39 | (24 | )% | ||||
Natural Gas | $ | 1.50 | $ | 2.42 | (38 | )% | $ | 1.78 | $ | 2.91 | (39 | )% |
Dec. 31, 2015 | Dec. 31, 2014 | |||||||||||||||||||||
Oil and Gas Total Proved | Crude Oil | Natural Gas | NGLs | Total | Crude Oil | Natural Gas | NGLs | Total | ||||||||||||||
Reserves: (a) | (Mbbl) | (MMcf) | (Mbbl) | (MMcfe) | (Mbbl) | (MMcf) | (Mbbl) | (MMcfe) | ||||||||||||||
Total proved reserves | 3,449 | 73,412 | 1,753 | 104,624 | 4,276 | 65,440 | 1,720 | 101,416 | ||||||||||||||
Well-head reserve prices | $ | 44.72 | $ | 1.27 | $ | 18.96 | $ | 85.80 | $ | 3.33 | 34.81 |
(a) | Oil and gas reserve information is based on reports prepared by Cawley, Gillespie & Associates, Inc. an independent consulting and engineering firm. |
• | The accuracy of our assumptions on which our earnings guidance is based; |
• | Our ability to receive regulatory approval and to implement and integrate the SourceGas transaction; |
• | Our ability to obtain regulatory approval to implement a cost of service gas program; |
• | Our ability to obtain adequate cost recovery for our utility operations through regulatory proceedings and favorable rulings in periodic applications to recover costs for capital additions, plant retirements and decommissioning, fuel, transmission, purchased power and other operating costs, and the timing in which new rates would go into effect; |
• | Our ability to complete our capital program in a cost-effective and timely manner; |
• | The impact of the volatility and extent of changes in commodity prices on our earnings and the underlying value of our oil and gas assets, including the possibility that we may be required to take additional impairment charges under the SEC’s full cost ceiling test for natural gas and oil reserves; and |
• | Other factors discussed from time to time in our filings with the SEC. |
Consolidating Income Statement | ||||||||||||||||||||||||||||||
Three Months Ended Dec. 31, 2015 | Electric Utilities | Gas Utilities | Power Generation | Coal Mining | Oil and Gas | Corporate | Electric Utility Inter-Co Lease Elim* | Power Generation Inter-Co Lease Elim* | Other Inter-Co Eliminations | Total | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||
Revenue | $ | 177.4 | $ | 121.1 | $ | 1.7 | $ | 8.2 | $ | 9.8 | $ | — | $ | — | $ | — | $ | — | $ | 318.3 | ||||||||||
Inter-company revenue | 3.1 | — | 20.9 | 7.2 | — | 58.7 | — | 0.6 | (90.5 | ) | — | |||||||||||||||||||
Fuel, purchased power and cost of gas sold | 72.5 | 61.4 | — | — | — | — | 1.2 | — | (29.0 | ) | 106.1 | |||||||||||||||||||
Gross Margin | 108.1 | 59.7 | 22.6 | 15.4 | 9.8 | 58.7 | (1.2 | ) | 0.6 | (61.5 | ) | 212.2 | ||||||||||||||||||
Operations and maintenance | 42.3 | 31.0 | 8.4 | 10.2 | 8.7 | 61.8 | — | — | (60.3 | ) | 102.2 | |||||||||||||||||||
Depreciation, depletion and amortization | 21.6 | 7.5 | 1.0 | 2.4 | 6.8 | 2.7 | (3.3 | ) | 2.6 | (2.7 | ) | 38.5 | ||||||||||||||||||
Impairment of long-lived assets | — | — | — | — | 71.2 | — | — | — | — | 71.2 | ||||||||||||||||||||
Operating income (loss) | 44.1 | 21.3 | 13.2 | 2.9 | (77.0 | ) | (5.8 | ) | 2.0 | (2.0 | ) | 1.4 | 0.2 | |||||||||||||||||
Interest expense, net | (14.1 | ) | (3.9 | ) | (1.1 | ) | (0.1 | ) | (0.9 | ) | (16.1 | ) | — | — | 12.4 | (23.8 | ) | |||||||||||||
Interest income | 1.1 | — | 0.3 | — | — | 12.6 | — | — | (13.6 | ) | 0.5 | |||||||||||||||||||
Other income (expense) | 0.4 | — | — | 0.5 | — | 17.5 | — | — | (17.8 | ) | 0.7 | |||||||||||||||||||
Impairment of equity investments | — | — | — | — | 0.8 | — | — | — | — | 0.8 | ||||||||||||||||||||
Income tax benefit (expense) | (10.8 | ) | (6.6 | ) | (4.5 | ) | (0.5 | ) | 27.2 | 2.9 | (0.8 | ) | 0.7 | — | 7.5 | |||||||||||||||
Net Income (loss) | $ | 20.7 | $ | 10.8 | $ | 7.9 | $ | 2.8 | $ | (49.9 | ) | $ | 11.0 | $ | 1.3 | $ | (1.2 | ) | $ | (17.5 | ) | $ | (14.2 | ) |
* | The generating facility constructed by Black Hills Colorado IPP at our Pueblo Airport Generation site which sells energy and capacity under a 20-year PPA to Colorado Electric is accounted for as a capital lease. Therefore, revenue and expenses of the Electric Utilities and Power Generation segments reflect adjustments for lease accounting which are eliminated in consolidations. |
Consolidating Income Statement | ||||||||||||||||||||||||||||||
Three Months Ended Dec. 31, 2014 | Electric Utilities | Gas Utilities | Power Generation | Coal Mining | Oil and Gas | Corporate | Electric Utility Inter-Co Lease Elim* | Power Generation Inter-Co Lease Elim* | Other Inter-Co Eliminations | Total | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||
Revenue | $ | 175.0 | $ | 177.2 | $ | 2.3 | $ | 12.0 | $ | 11.6 | $ | — | $ | — | $ | — | $ | — | $ | 378.1 | ||||||||||
Inter-company revenue | 3.8 | — | 18.9 | 5.6 | — | 57.9 | — | 0.6 | (86.8 | ) | — | |||||||||||||||||||
Fuel, purchased power and cost of gas sold | 76.9 | 113.9 | — | — | — | — | 1.1 | — | (26.6 | ) | 165.3 | |||||||||||||||||||
Gross Margin | 101.9 | 63.3 | 21.2 | 17.6 | 11.6 | 57.9 | (1.1 | ) | 0.6 | (60.2 | ) | 212.8 | ||||||||||||||||||
Operations and maintenance | 43.7 | 32.2 | 9.4 | 11.1 | 10.9 | 55.6 | — | — | (57.9 | ) | 105.0 | |||||||||||||||||||
Depreciation, depletion and amortization | 21.4 | 6.8 | 1.1 | 2.5 | 5.2 | 2.2 | (3.3 | ) | 3.3 | (2.2 | ) | 37.0 | ||||||||||||||||||
Operating income (loss) | 36.7 | 24.3 | 10.7 | 4.0 | (4.5 | ) | 0.2 | 2.2 | (2.7 | ) | (0.1 | ) | 70.8 | |||||||||||||||||
Interest expense, net | (14.2 | ) | (4.0 | ) | (1.1 | ) | (0.1 | ) | (0.6 | ) | (12.3 | ) | — | — | 13.3 | (18.9 | ) | |||||||||||||
Interest income | 1.0 | — | 0.2 | — | 0.2 | 11.9 | — | — | (12.9 | ) | 0.4 | |||||||||||||||||||
Other income (expense) | 0.2 | — | — | 0.5 | 0.1 | 18.5 | — | — | (18.8 | ) | 0.6 | |||||||||||||||||||
Income tax benefit (expense) | (8.3 | ) | (6.8 | ) | (4.4 | ) | (1.1 | ) | 1.5 | 0.6 | (0.8 | ) | 1.0 | — | (18.4 | ) | ||||||||||||||
Net Income (loss) | $ | 15.4 | $ | 13.6 | $ | 5.4 | $ | 3.3 | $ | (3.3 | ) | $ | 19.0 | $ | 1.4 | $ | (1.7 | ) | $ | (18.5 | ) | $ | 34.5 |
* | The generating facility constructed by Black Hills Colorado IPP at our Pueblo Airport Generation site which sells energy and capacity under a 20-year PPA to Colorado Electric is accounted for as a capital lease. Therefore, revenue and expenses of the Electric Utilities and Power Generation segments reflect adjustments for lease accounting which are eliminated in consolidations. |
Consolidating Income Statement | ||||||||||||||||||||||||||||||
Twelve Months Ended Dec. 31, 2015 | Electric Utilities | Gas Utilities | Power Generation | Coal Mining | Oil and Gas | Corporate | Electric Utility Inter-Co Lease Elim* | Power Generation Inter-Co Lease Elim* | Other Inter-Co Eliminations | Total | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||
Revenue | $ | 712.4 | $ | 507.1 | $ | 7.5 | $ | 34.3 | $ | 43.3 | $ | — | $ | — | $ | — | $ | — | $ | 1,304.6 | ||||||||||
Inter-company revenue | 11.6 | — | 83.3 | 30.8 | — | 227.7 | — | 2.4 | (355.8 | ) | — | |||||||||||||||||||
Fuel, purchased power and cost of gas sold | 291.6 | 277.5 | — | — | — | 0.1 | 4.7 | — | (117.0 | ) | 456.9 | |||||||||||||||||||
Gross Margin | 432.4 | 229.6 | 90.8 | 65.1 | 43.3 | 227.6 | (4.7 | ) | 2.4 | (238.8 | ) | 847.7 | ||||||||||||||||||
Operations and maintenance | 173.8 | 127.8 | 32.1 | 41.6 | 41.6 | 225.7 | — | — | (229.8 | ) | 412.9 | |||||||||||||||||||
Depreciation, depletion and amortization | 84.3 | 29.0 | 4.3 | 9.8 | 29.3 | 9.3 | (13.1 | ) | 11.8 | (9.3 | ) | 155.4 | ||||||||||||||||||
Impairment of long-lived assets | — | — | — | — | 249.6 | — | — | — | — | 249.6 | ||||||||||||||||||||
Operating income (loss) | 174.3 | 72.8 | 54.3 | 13.6 | (277.2 | ) | (7.4 | ) | 8.4 | (9.4 | ) | 0.3 | 29.8 | |||||||||||||||||
Interest expense, net | (57.7 | ) | (15.4 | ) | (4.2 | ) | (0.4 | ) | (2.7 | ) | (57.8 | ) | — | — | 54.6 | (83.7 | ) | |||||||||||||
Interest income | 4.2 | 0.5 | 1.0 | — | 0.2 | 48.6 | — | — | (52.9 | ) | 1.6 | |||||||||||||||||||
Other income (expense) | 1.2 | 0.5 | 0.1 | 2.2 | (0.3 | ) | 70.9 | — | — | (72.2 | ) | 2.4 | ||||||||||||||||||
Impairment of equity investments | — | — | — | — | (4.4 | ) | — | — | — | — | (4.4 | ) | ||||||||||||||||||
Income tax benefit (expense) | (42.8 | ) | (20.7 | ) | (18.5 | ) | (3.6 | ) | 104.5 | 2.9 | (3.1 | ) | 3.5 | — | 22.2 | |||||||||||||||
Net Income (loss) | $ | 79.3 | $ | 37.8 | $ | 32.7 | $ | 11.9 | $ | (180.0 | ) | $ | 57.2 | $ | 5.3 | $ | (5.9 | ) | $ | (70.3 | ) | $ | (32.1 | ) |
* | The generating facility constructed by Black Hills Colorado IPP at our Pueblo Airport Generation site which sells energy and capacity under a 20-year PPA to Colorado Electric is accounted for as a capital lease. Therefore, revenue and expenses of the Electric Utilities and Power Generation segments reflect adjustments for lease accounting which are eliminated in consolidations. |
Consolidating Income Statement | ||||||||||||||||||||||||||||||
Twelve Months Ended Dec. 31, 2014 | Electric Utilities | Gas Utilities | Power Generation | Coal Mining | Oil and Gas | Corporate | Electric Utility Inter-Co Lease Elim* | Power Generation Inter-Co Lease Elim* | Other Inter-Co Eliminations | Total | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||
Revenue | $ | 683.2 | $ | 617.8 | $ | 6.4 | $ | 31.1 | $ | 55.1 | $ | — | $ | — | $ | — | $ | — | $ | 1,393.6 | ||||||||||
Inter-company revenue | 14.1 | — | 81.2 | 32.3 | — | 222.5 | — | 2.1 | (352.1 | ) | — | |||||||||||||||||||
Fuel, purchased power and cost of gas sold | 314.6 | 380.9 | — | — | — | 0.1 | 4.1 | — | (117.9 | ) | 581.8 | |||||||||||||||||||
Gross Margin | 382.7 | 236.9 | 87.6 | 63.4 | 55.1 | 222.3 | (4.1 | ) | 2.1 | (234.2 | ) | 811.8 | ||||||||||||||||||
Operations and maintenance | 165.6 | 132.6 | 33.1 | 41.2 | 42.7 | 213.4 | — | — | (225.5 | ) | 403.2 | |||||||||||||||||||
Depreciation, depletion and amortization | 79.4 | 26.5 | 4.5 | 10.3 | 24.2 | 7.7 | (13.1 | ) | 12.8 | (7.7 | ) | 144.7 | ||||||||||||||||||
Operating income (loss) | 137.7 | 77.8 | 49.9 | 11.9 | (11.8 | ) | 1.2 | 8.9 | (10.7 | ) | (1.0 | ) | 263.9 | |||||||||||||||||
Interest expense, net | (53.4 | ) | (15.7 | ) | (4.4 | ) | (0.5 | ) | (2.6 | ) | (50.3 | ) | — | — | 55.9 | (71.0 | ) | |||||||||||||
Interest rate swaps - unrealized (loss) gain | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Interest income | 4.6 | 0.4 | 0.7 | 0.1 | 0.9 | 49.0 | — | — | (53.8 | ) | 1.9 | |||||||||||||||||||
Other income (expense) | 1.2 | — | — | 2.3 | 0.2 | 61.6 | — | — | (62.6 | ) | 2.7 | |||||||||||||||||||
Income tax benefit (expense) | (30.5 | ) | (20.7 | ) | (17.7 | ) | (3.3 | ) | 4.8 | — | (3.3 | ) | 4.0 | 0.1 | (66.6 | ) | ||||||||||||||
Net Income (loss) | $ | 59.6 | $ | 41.9 | $ | 28.5 | $ | 10.5 | $ | (8.5 | ) | $ | 61.5 | $ | 5.6 | $ | (6.8 | ) | $ | (61.4 | ) | $ | 130.9 |
* | The generating facility constructed by Black Hills Colorado IPP at our Pueblo Airport Generation site which sells energy and capacity under a 20-year PPA to Colorado Electric is accounted for as a capital lease. Therefore, revenue and expenses of the Electric Utilities and Power Generation segments reflect adjustments for lease accounting which are eliminated in consolidations. |
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