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•	Board of directors approves quarterly dividend of $0.475 per share

•	2018 earnings guidance revised

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On Sept. 22, the Mountain West Transmission Group, which includes the company’s three electric utilities and seven other electricity providers, formally expressed an interest in joining the Southwest Power Pool regional transmission organization. If the group can reach an acceptable agreement with SPP, filings with the Federal Energy Regulatory Commission and state public utility commissions would be expected in mid-2018 with integration into the SPP in late 2019.

•	On Aug. 4, Colorado Electric received bids related to its request for proposals for an additional 60 megawatts of renewable energy resources to be in service by 2019 to meet Colorado’s renewable energy requirements. Colorado Electric is currently evaluating the bids and plans to present the results to the Colorado Public Utilities Commission on Feb. 9, 2018.

•	On July 19, Wyoming Electric set a new all-time peak load of 249 megawatts, surpassing the previous peak load of 236 megawatts set in July 2016.

•	On June 16, South Dakota Electric entered into an agreement with the South Dakota Public Utilities Commission staff to stabilize rates for customers through a six-year base rate moratorium effective July 1, 2017, through July 1, 2023.

•	On May 30, South Dakota Electric completed construction and placed in service the final segment of a 144-mile transmission line from northeast Wyoming to Rapid City, South Dakota.

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On Dec. 15, Arkansas Gas filed a rate review with the Arkansas Public Service Commission to recover more than $160 million of investments for maintaining and/or enhancing the safety and integrity of its pipeline system. The filing seeks to increase annual revenues by approximately $30 million and requests a 10.2 percent return on equity and a capital structure of 54.7 percent equity and 45.3 percent debt. The filing seeks to implement new rates in the fourth quarter of 2018. Black Hills is reviewing the impact of tax reform as it applies to the filing.

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On Nov. 17, Wyoming Gas filed a rate review with the Wyoming Public Service Commission to recover safety, reliability and system integrity investments made in Northwest Wyoming since 2015 in its natural gas transmission and distribution pipeline system. The filing seeks to increase annual revenues by approximately $1.4 million and requests a 10.2 percent return on equity and a capital structure of 54.0 percent equity and 46.0 percent debt. The filing seeks to implement new rates in the third quarter of 2018. Black Hills is reviewing the impact of tax reform as it applies to the filing.

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On Oct. 3, Rocky Mountain Natural Gas, an intrastate natural gas pipeline in Colorado, filed a rate review with the Colorado Public Utilities Commission to recover investments for maintaining and/or enhancing the safety and integrity of its pipeline system during the last three years. The filing seeks to increase annual revenues by approximately $2.0 million and requests a 12.3 percent return on equity and a capital structure of 46.6 percent equity and 53.4 percent debt. The filing seeks to implement new rates in the second quarter of 2018. Black Hills is reviewing the impact of tax reform as it applies to the filing.

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On Jan. 31, 2018, the board of directors declared a dividend of $0.475 per share, equivalent to an annual dividend rate of $1.90 per share. This annual equivalent rate represents an increase of 5 percent over the total 2017 dividend of $1.81 per share and the 48th consecutive annual dividend increase. Common shareholders of record at the close of business on Feb. 15, 2018, will receive $0.475 per share, payable March 1, 2018.

•	On Dec. 12, Moody’s Investors Service affirmed its corporate credit rating of Black Hills Corp. at Baa2 with a stable outlook.

•	On Oct. 4, Fitch Ratings affirmed its corporate credit rating of Black Hills Corp. at BBB+ with a stable outlook.

•	On Aug. 4, a new shelf registration statement was filed with the Securities and Exchange Commission. In conjunction with the shelf registration statement, the company renewed its At-the-Market equity offering program under which it may sell, from time to time, shares of its common stock with an aggregate value of up to $300 million.

•	On July 21, S&P Global Ratings affirmed its corporate credit rating of Black Hills Corp. at BBB with a stable outlook.

•	During the first quarter, Black Hills began issuing commercial paper under a program implemented in late 2016. The company utilized favorable short-term rates on its commercial paper program to repay $100 million of corporate term loan borrowings due in 2019 with principal payments of $50 million paid in May and an additional $50 million paid in July.

•	On Apr. 1, Robert Myers, senior vice president and chief human resources officer, retired after nine years of service. Jennifer Landis, previously vice president of human resources and 15-year veteran of the company, was appointed senior vice president and chief human resources officer, effective Feb. 1, 2017.

•	Effective Jan. 1, 2017, Robert P. Otto joined Black Hills’ board of directors

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As of Jan. 29, 2018, Black Hills has either closed transactions or signed contracts to sell more than 90 percent of its oil and gas properties for an aggregate value of approximately $75 million. The company has executed agreements to sell all its operated properties, and has only non-operated assets with minimal value left to divest. The company plans to conclude the sale of all remaining assets by mid-year 2018.

•	On Nov. 1, Black Hills’ board of directors authorized the sale of all oil and gas assets and the exit of the business. Black Hills began reporting the segment as discontinued operations in the fourth quarter of 2017.

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The new tax law required revaluation of federal deferred tax assets and liabilities using the new lower corporate tax rate of 21 percent. The revaluation for the utilities required the creation of a regulatory liability of approximately $300 million and an offsetting reduction in deferred tax liability. This regulatory liability will generally be amortized over the remaining life of the related assets as specifically prescribed in the TCJA. On a consolidated financial statement basis, the revaluation resulted in a one-time, non-cash, income tax benefit of approximately $15 million in 2017.

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Tax reform will be beneficial to our utility customers primarily as a result of the reduction in the corporate income tax rate. The lower tax rate will negatively impact the company’s cash flows by approximately $35 million to $45 million annually for the next several years. We are working with utility regulators in each of the states we serve to provide the benefits from tax reform to our customers.

•	The TCJA includes provisions limiting interest deductibility in certain circumstances. Black Hills expects to maintain deductibility of interest expense. However, the lower tax rate reduces the tax benefits on holding company debt. This effect will be largely offset by the impact of the lower tax rate on non-utility earnings.

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(a)

Income from continuing operations available for common stock for 2017 includes a net tax benefit of $15 million from the revaluation of deferred tax balances due to the decrease in the statutory Federal income tax rate as a result of the TCJA. The impact to our operating segments included: a tax benefit at Electric Utilities of $23 million, Power Generation $24 million and Mining $2.7 million; and tax expense at Gas Utilities of $6.8 million, and Corporate and Other of $28 million.

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•	Capital spending of $431 million;

•	Normal weather conditions within our utility service territories including temperatures, precipitation levels and wind conditions;

•	Normal operations for planned construction, maintenance and/or capital investment projects;

•	Successful completion of rate reviews for electric and gas utilities;

•	No significant unplanned outages at any of our power generation facilities;

•	No planned equity financing under our At-the-Market equity offering program;

•	Conversion of equity units prior to Nov. 1, 2018;

•	Lower tax benefits on holding company debt (due to the lower tax rate), which are largely offset by the benefit of the lower tax rate on non-utility earnings;

•	No significant acquisitions or divestitures; and

•	Oil and gas segment reported as discontinued operations

*

Earnings per share from continuing operations, as adjusted, is defined as GAAP Earnings per share from continuing operations, 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 2018 earnings guidance, as adjusted, because we do not know the unplanned or unique events that may occur.

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(a)	The generating facility located in Pueblo, Colorado, is accounted for as a capital lease under GAAP; therefore, depreciation expense for the original cost of the facility is recorded at the Electric Utility segment.

(b)	On April 14, 2016, Black Hills Electric Generation sold a 49.9%, noncontrolling interest in Black Hills Colorado IPP.

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(a)	Represents the revaluation of deferred tax balances not attributable to our operating segments or discontinued operations due to the decrease in the statutory Federal income tax rate as a result of the TCJA.

(b)	Acquisition and transition costs attributed to the SourceGas Acquisition including incremental transaction costs consisting of professional fees, financing fees, employee-related expenses and other miscellaneous costs and internal labor costs attributable to the acquisition that would otherwise have been charged to the other business segments.

(c)

Reallocated indirect corporate operating costs and interest expenses previously allocated to BHEP which are not reclassified to discontinued operations in accordance with GAAP as these costs will have a continuing impact on the Company. In 2017 the indirect corporate operating costs have been allocated to our other business segments; after-tax 2017 operating expenses of approximately $2.0 million were reallocated to our other business segments in 2017.

(d)	We recognized a $4.4 million tax benefit during 2016 as a result of an agreement reached with IRS Appeals relating to the release of the reserve for after-tax interest expense previously accrued with respect to the liability for uncertain tax positions involving a like-kind exchange transaction from 2008.

•	Tax expense of $28 million not attributable to our operating segments reflecting the revaluation of deferred tax balances as a result of the TCJA;

•	A decrease in acquisition and transition expenses of approximately $5.8 million driven by lower external acquisition costs and lower internal labor attributed to the SourceGas Acquisition;

•	As a result of the Oil and Gas segment being reported as discontinued operations in 2017, indirect operating costs that would have been charged to this segment were reallocated to other business segments in 2017. These same costs in 2016 are reported as Corporate and Other; and

•	A net increase in other corporate (expenses) income of $3.6 million.

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•	Tax expense of $28 million not attributable to our operating segments reflecting the revaluation of deferred tax balances as a result of the TCJA;

•	A decrease in acquisition and transition expenses of approximately $36 million driven by lower external acquisition costs and lower internal labor attributed to the SourceGas Acquisition;

•	As a result of the Oil and Gas segment being reported as discontinued operations in 2017, indirect operating costs of $2.0 million, after-tax, that would have been charged to this segment were reallocated to other business segments in 2017. These same costs in 2016 are reported as Corporate and Other;

•	A decrease of approximately $4.4 million in tax benefits; and

•	A net decrease in other corporate (expenses) income.

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•	The accuracy of our assumptions on which our earnings guidance is based;

•	The impacts of the TCJA on customers, rate base, valuation of deferred tax assets and liabilities, interest expense and cash flow;

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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, the timing in which new rates would go into effect and the results of regulatory proceedings regarding the effects of the TCJA;

•	Our ability to complete our capital program in a cost-effective and timely manner;

•	The impact of future governmental regulation; and

•	Other factors discussed from time to time in our filings with the SEC.

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*	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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*	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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*	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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*	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.