|
Schedule I Disclosures for Parent Company Only
|
12 Months Ended |
|
Dec. 31, 2013
|
|
Condensed Statement of Income [Member]
|
|
| Condensed Financial Statements, Captions [Line Items] |
|
| Condensed Financial Information of Parent Company Only Disclosure [Text Block] |
BLACK HILLS CORPORATION (PARENT COMPANY) CONDENSED STATEMENTS OF INCOME
| | | | | | | | | | | | 2013 | 2012 | 2011 | | (in thousands) | | | | | Revenue | $ | — |
| $ | — |
| $ | — |
| Operating expenses | 1,339 |
| 831 |
| 772 |
| Operating income (loss) | (1,339 | ) | (831 | ) | (772 | ) | | | | | Other income (expense): | | | | Equity income (loss) in earnings of subsidiaries | 100,690 |
| 93,479 |
| 87,150 |
| Interest expense | (7,827 | ) | (19,665 | ) | (15,229 | ) | Unrealized gain (loss) on interest rate swaps, net | 30,169 |
| 1,882 |
| (42,010 | ) | Interest income | 30 |
| 32 |
| 3 |
| Other income (expense), net | (3 | ) | 49 |
| (42 | ) | Total other income (expense) | 123,059 |
| 75,777 |
| 29,872 |
| Income (loss) before income taxes | 121,720 |
| 74,946 |
| 29,100 |
| Income tax benefit (expense) | (6,758 | ) | 6,582 |
| 20,630 |
| Net income (loss) available for common stock | $ | 114,962 |
| $ | 81,528 |
| $ | 49,730 |
|
The accompanying notes to condensed financial statements are an integral part of these condensed financial statements. |
|
Condensed Statement of Comprehensive Income [Member]
|
|
| Condensed Financial Statements, Captions [Line Items] |
|
| Condensed Financial Information of Parent Company Only Disclosure [Text Block] |
BLACK HILLS CORPORATION (PARENT COMPANY) CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| | | | | | | | | | | Years ended (in thousands) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | | | | | Net income (loss) available for common stock | $ | 114,962 |
| $ | 81,528 |
| $ | 49,730 |
| | | | | Other comprehensive income (loss), net of tax: | | | | Benefit plan liability adjustments - net gain (loss) (net of tax of $(3,813), $296 and $4,135, respectively) | 8,237 |
| (542 | ) | (7,609 | ) | Benefit plan liability adjustments - prior service (costs) (net of tax of $185, $86 and $176, respectively) | (406 | ) | (157 | ) | (325 | ) | Reclassification adjustment of benefit plan liability - net gain (loss) (net of tax of $(971), $0 and $0) | 1,820 |
| — |
| — |
| Reclassification adjustment of benefit plan liability - prior service cost (net of tax of $88, $0 and $0) | (165 | ) | — |
| — |
| Fair value adjustment on derivatives designated as cash flow hedges (net of tax of $(2,445), $887 and $1,708, respectively) | 4,534 |
| (1,268 | ) | (2,831 | ) | Reclassification adjustment of cash flow hedges settled and included in net income (loss) (net of tax of $(2,016), $534 and $(709), respectively) | 4,046 |
| (643 | ) | 1,468 |
| Other comprehensive income (loss), net of tax, including earnings (loss) of consolidated subsidiaries | 18,066 |
| (2,610 | ) | (9,297 | ) | | | | | Comprehensive income (loss) | $ | 133,028 |
| $ | 78,918 |
| $ | 40,433 |
|
The accompanying notes to condensed financial statements are an integral part of these condensed financial statements. |
|
Condensed Balance Sheet [Member]
|
|
| Condensed Financial Statements, Captions [Line Items] |
|
| Condensed Financial Information of Parent Company Only Disclosure [Text Block] |
BLACK HILLS CORPORATION (PARENT COMPANY) CONDENSED BALANCE SHEETS | | | | | | | | At Dec. 31, | 2013 | 2012 | | (in thousands) | ASSETS | | | Current assets: | | | Cash and cash equivalents | $ | 1,664 |
| $ | 1,266 |
| Accounts receivable — affiliates, current | 1,000 |
| 2,194 |
| Notes receivable — affiliates, current | 393,586 |
| 637,586 |
| Income tax receivable, net | 14,530 |
| 5,843 |
| Deferred income tax assets, net, current | — |
| 29,779 |
| Other current assets | 4,705 |
| 4,887 |
| Total current assets | 415,485 |
| 681,555 |
| | | | Property and Equipment | 6,259 |
| 1,135 |
| | | | Investments in subsidiaries | 1,237,876 |
| 1,194,501 |
| | | | Notes receivable — affiliate, non-current | 685,000 |
| 250,000 |
| Deferred income tax assets, net, non-current | 67,958 |
| 41,494 |
| Other assets, non-current | 9,256 |
| 4,014 |
| Total other assets, non-current | 762,214 |
| 295,508 |
| | | | TOTAL ASSETS | $ | 2,421,834 |
| $ | 2,172,699 |
| | | | LIABILITIES AND STOCKHOLDERS’ EQUITY | | | Current liabilities: | | | Accounts payable - affiliate, current | $ | 372 |
| $ | 565 |
| Derivative liabilities, current | 3,474 |
| 91,617 |
| Deferred income taxes | 12,775 |
| — |
| Notes payable | 82,500 |
| 277,000 |
| Notes payable — affiliate, current | — |
| 1,032 |
| Current maturities of long-term debt | — |
| 100,000 |
| Other current liabilities | 9,351 |
| 9,943 |
| Total current liabilities | 108,472 |
| 480,157 |
| | | | Derivative liabilities, non-current | 5,614 |
| 9,252 |
| | | | Long-term debt, net of current maturities | 1,000,000 |
| 450,000 |
| Note payable — affiliate, non-current | — |
| 781 |
| Total long-term debt | 1,000,000 |
| 450,781 |
| | | | Total stockholders’ equity | 1,307,748 |
| 1,232,509 |
| | | | TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,421,834 |
| $ | 2,172,699 |
|
The accompanying notes to condensed financial statements are an integral part of these condensed financial statements. |
|
Condensed Statement of Cash Flows [Member]
|
|
| Condensed Financial Statements, Captions [Line Items] |
|
| Condensed Financial Information of Parent Company Only Disclosure [Text Block] |
BLACK HILLS CORPORATION (PARENT COMPANY) CONDENSED STATEMENTS OF CASH FLOWS
| | | | | | | | | | | Years ended Dec. 31, | 2013 | 2012 | 2011 | | (in thousands) | Operating activities: | | | | Net income (loss) available for common stock | $ | 114,962 |
| $ | 81,528 |
| $ | 49,730 |
| Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities — | | | | Equity in earnings of subsidiaries | (100,690 | ) | (93,479 | ) | (87,150 | ) | Dividend from subsidiaries | — |
| — |
| 14,500 |
| Stock compensation | 12,595 |
| 8,271 |
| 5,643 |
| Unrealized gain (loss) on interest rate swaps, net | (30,169 | ) | (1,882 | ) | 42,010 |
| Deferred income taxes | 10,504 |
| (8,116 | ) | 2,599 |
| Other adjustments, net | 3,099 |
| 3,909 |
| 4,376 |
| Change in certain operating assets and liabilities: | | | | Accounts receivable and other current assets | (3,184 | ) | 6,541 |
| (5,141 | ) | Accounts payable and other current liabilities | (7,881 | ) | (6,764 | ) | 3,550 |
| Other operating activities | 20,386 |
| (7,816 | ) | 2,841 |
| Net cash provided by (used in) operating activities | 19,622 |
| (17,808 | ) | 32,958 |
| | | | | Investing activities: | | | | Property, plant and equipment additions | (5,124 | ) | — |
| (1,135 | ) | Decrease (increase) in advances to affiliates | (133,685 | ) | 96,073 |
| (258,117 | ) | Other investing activities | — |
| 450 |
| — |
| Net cash provided by (used in) investing activities | (138,809 | ) | 96,523 |
| (259,252 | ) | | | | | Financing activities: | | | | Dividends paid on common stock | (67,587 | ) | (65,262 | ) | (59,202 | ) | Common stock issued | 4,356 |
| 4,726 |
| 123,041 |
| Short-term borrowings -- repayments | (532,150 | ) | (271,753 | ) | (821,300 | ) | Short-term borrowings -- issuances | 337,650 |
| 203,753 |
| 1,017,300 |
| Increase (decrease) in notes payable to affiliates | (1,813 | ) | 275,806 |
| (25,302 | ) | Long-term debt — issuance | 800,000 |
| — |
| — |
| Long-term debt — repayment | (350,000 | ) | (225,000 | ) | — |
| De-designated interest swap settlement | (63,939 | ) | — |
| — |
| Other financing activities | (6,932 | ) | (2,833 | ) | (5,348 | ) | Net cash provided by (used in) financing activities | 119,585 |
| (80,563 | ) | 229,189 |
| Net change in cash and cash equivalents | 398 |
| (1,848 | ) | 2,895 |
| | | | | Cash and cash equivalents beginning of year | 1,266 |
| 3,114 |
| 219 |
| Cash and cash equivalents end of year | $ | 1,664 |
| $ | 1,266 |
| $ | 3,114 |
|
| | | | | | | | | | | Supplemental Cash Flow Information | | | | Years ended | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | | (in thousands) | Non-cash investing and financing activities- | | | | Non-cash adjustment to notes receivable from affiliates | $ | 57,315 |
| $ | 40,039 |
| $ | — |
| Non-cash adjustment to notes payable to affiliates | $ | — |
| $ | (277,560 | ) | $ | — |
| Non-cash dividend, net of non-cash contributions, from affiliates | $ | (57,315 | ) | $ | 237,521 |
| $ | — |
| | | | | Cash (paid) refunded during the period for- | | | | Interest | $ | (6,638 | ) | $ | (18,550 | ) | $ | (14,667 | ) | Income taxes | $ | (4,510 | ) | $ | 3,911 |
| $ | 23,830 |
|
The accompanying notes to condensed financial statements are an integral part of these condensed financial statements. |
|
Condensed Footnotes Of Parent [Member]
|
|
| Condensed Financial Statements, Captions [Line Items] |
|
| Condensed Financial Information of Parent Company Only Disclosure [Text Block] |
NOTES TO BLACK HILLS CORPORATION (PARENT COMPANY) CONDENSED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
Pursuant to rules and regulations of the SEC, the unconsolidated condensed financial statements of Black Hills Corporation do not reflect all of the information and notes normally included with financial statements prepared in accordance with GAAP. Therefore, these condensed financial statements should be read in conjunction with the consolidated financial statements and related notes included in this Annual Report on Form 10-K.
Dividends paid and distributed to Black Hills Corporation (the Parent) from its subsidiaries were as follows (in thousands): | | | | | | | | | | | | 2013 | 2012 | 2011 | Cash dividends paid to Parent by subsidiaries | $ | — |
| $ | — |
| $ | 14,500 |
| Non-Cash dividends, net of non-cash contributions, distributed to Parent by subsidiaries | $ | (57,315 | ) | $ | 237,521 |
| $ | — |
|
(2) NOTES RECEIVABLE AND NOTES PAYABLE
Black Hills Corporation has notes receivable and notes payable with affiliates under Utility Money Pool Agreements and Non-Utility Money Pool Agreements. Borrowings under these agreements bear interest at the weighted average daily cost of external funds as defined under the agreements.
Additionally, as of Dec. 31, 2013, Black Hills Corporation has a Revolving Credit Facility and a corporate term loan with various banks. Our credit facility and debt securities contain certain restrictive financial covenants. At Dec. 31, 2013, we were in compliance with all of these covenants. See Note 6 to Notes to Consolidated Financial Statements on this Annual Report on Form 10-K.
(3) LONG-TERM DEBT
Long-term debt outstanding at Dec. 31 was as follows (in thousands): | | | | | | | | | | | | Interest Rate at | | | | Due Date | Dec. 31, 2013 | 2013 | 2012 | | | | | | Senior unsecured notes due 2023 (a) | Nov. 30, 2023 | 4.25% | $ | 525,000 |
| $ | — |
| Senior unsecured notes due 2014 (b) | May 15, 2014 | 9.00% | — |
| 250,000 |
| Senior unsecured notes due 2020 (c) | July 15, 2020 | 5.88% | 200,000 |
| 200,000 |
| Long-term term loan (d) (f) | Sept. 30, 2013 | NA | — |
| 100,000 |
| Corporate term loan due 2015 (e) (f) | June 19, 2015 | 1.31% | 275,000 |
| — |
| Total long-term debt | | | 1,000,000 |
| 550,000 |
| Less current maturities | | | — |
| 100,000 |
| Net long-term debt | | | $ | 1,000,000 |
| $ | 450,000 |
|
_______________ | | (a) | $410 million of this senior unsecured note has been recorded at Black Hills Utility Holdings and is recorded as Notes receivable - affiliate, non-current on the Parent’s Condensed Balance Sheets. |
| | (b) | For 2012, this senior unsecured note was recorded by Black Hills Utility Holdings and was recorded as Notes receivable - affiliate, non-current on the Parent’s Condensed Balance Sheets. This note was redeemed on Dec. 19, 2013 with proceeds from the issuance of the Senior unsecured notes due 2023. |
| | (c) | This senior unsecured note has been recorded by Colorado Electric and is recorded as Notes receivable - affiliate, non-current on the Parent’s Condensed Balance Sheets for 2012 and 2013. |
| | (d) | This term loan was repaid on June 21, 2013, and replaced with the Long-term term loan due June 19, 2015. In 2012, this term loan was recorded by Black Hills Utility Holdings and is recorded as Notes receivable - affiliate, non-current on the Parent’s Condensed Balance Sheets for 2013. |
| | (e) | This debt has been recorded at our Power Generation segment and is recorded as Notes receivable - affiliate, non-current on the Parent’s Condensed Balance Sheets at 2013. |
(f) Variable interest rate.
Certain debt instruments of the Company contain restrictions and covenants, all of which we were in compliance with at Dec. 31, 2013.
Scheduled maturities of long-term debt, excluding amortization of premiums or discounts, for future years are (in thousands): | | | | | 2014 | $ | — |
| 2015 | $ | 275,000 |
| 2016 | $ | — |
| 2017 | $ | — |
| 2018 | $ | — |
| Thereafter | $ | 725,000 |
|
(4) GUARANTEES
We have entered into various agreements providing financial or performance assurance to third parties on behalf of certain of our subsidiaries. The agreements include guarantees of debt obligations, contractual performance obligations and indemnification for reclamation and surety bonds. See Note 19 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for further information.
(5) RISK MANAGEMENT ACTIVITIES AND FAIR VALUE MEASUREMENTS
We engage in activities to manage risks associated with changes in interest rates. We have entered into floating-to-fixed interest rate swap agreements to reduce our exposure to interest rate fluctuations associated with our floating rate debt obligations. See Note 8 and 9 of Notes to Consolidated Financial Statements on this Annual Report on Form 10-K for further information.
On Dec. 31 our interest rate swaps and related balances were as follows (dollars in thousands): | | | | | | | | | | | | 2013 | 2012 | | Interest Rate Swaps | Interest Rate Swaps | De-designated Interest Rate Swaps (a) (b) | Notional | $ | 75,000 |
| $ | 75,000 |
| $ | 250,000 |
| Weighted average fixed interest rate | 4.97 | % | 4.97 | % | 5.67 | % | Maximum terms in years | 3.0 |
| 4.0 |
| 1.0 |
| Current derivative liabilities | $ | 3,474 |
| $ | 3,469 |
| $ | 88,148 |
| Non-current derivative liabilities | $ | 5,614 |
| $ | 9,252 |
| $ | — |
| Pre-tax accumulated other comprehensive (loss) | (9,088 | ) | $ | (12,721 | ) | $ | — |
| Cash collateral receivable (payable) included in derivatives | $ | — |
| $ | — |
| $ | 5,960 |
|
________________________ | | (a) | Maximum terms in years reflect the amended early termination dates. These swaps were settled in 2013. |
| | (b) | Included on the Condensed Statements of Income of the Parent is the non-cash mark-to-market gains recorded on these De-designated interest rate swaps of $30 million and $1.9 million for the twelve months ended Dec. 31, 2013 and 2012, respectively. |
Based on Dec. 31, 2013 market interest rates and balances, a loss of approximately $3.5 million would be realized and reported in pre-tax earnings during the next 12 months. Estimated and realized losses will change during the future periods as market interest rates fluctuate.
(6) FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of our financial instruments at Dec. 31 were as follows (in thousands): | | | | | | | | | | | | | | | | 2013 | | 2012 | | Carrying Amount | Fair Value | | Carrying Amount | Fair Value | Cash and cash equivalents (a) | $ | 1,664 |
| $ | 1,664 |
| | $ | 1,266 |
| $ | 1,266 |
| Notes payable (a) | $ | 82,500 |
| $ | 82,500 |
| | $ | 277,000 |
| $ | 277,000 |
| Long-term debt (b) | $ | 1,000,000 |
| $ | 1,028,384 |
| | $ | 550,000 |
| $ | 615,239 |
|
______________ | | (a) | Carrying value approximates fair value due to either short-term length of maturity or variable interest rates that approximate prevailing market rates and therefore is classified in Level 1 in the fair value hierarchy. |
| | (b) | Long-term debt is valued based on observable inputs available either directly or indirectly for similar liabilities in active markets and therefore is classified in Level 2 in the fair value hierarchy. |
Cash and Cash Equivalents
Included in cash and cash equivalents is cash, overnight repurchase agreement accounts, money market funds and term deposits. As part of our cash management process, excess operating cash is invested in overnight repurchase agreements with our bank. Repurchase agreements are not deposits and are not insured by the U.S. Government, the FDIC or any other government agency and involve investment risk including possible loss of principal. We believe however, that the market risk arising from holding these financial instruments is minimal.
Notes Payable
2013 Notes Payable represents our Revolving Credit Facility while 2012 also includes certain corporate term loans.
Long-Term Debt
For additional information see Note 3 of these Black Hills Corporation (the Parent) Condensed Financial Statements.
(7) STOCK
Forward Equity Issuance
In November 2011, we settled the equity forward agreement. For additional information see Note 11 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K.
(8) COMMITMENTS AND CONTINGENCIES
In the normal course of business, we are subject to various lawsuits, actions, proceedings, claims and other matters asserted under laws and regulations. We believe the amounts provided in the condensed financial statements are adequate in light of the probable and estimable contingencies. However, there can be no assurance that the actual amounts required to satisfy alleged liabilities from various legal proceedings, claims and other matters discussed, and to comply with applicable laws and regulations, will not exceed the amounts reflected in the condensed financial statements.
In the normal course of business, we enter into agreements that include indemnification in favor of third parties, such as information technology agreements, purchase and sale agreements and lease contracts. We have also agreed to indemnify our directors, officers and employees in accordance with our articles of incorporation, as amended. Certain agreements do not contain any limits on our liability and therefore, it is not possible to estimate our potential liability under these indemnifications. In certain cases, we have recourse against third parties with respect to these indemnities. Further, we maintain insurance policies that may provide coverage against certain claims under these indemnities.
|