Black Hills (BKH) risk factors, FY2025 10-K

Black Hills's FY2025 10-K, filed Feb 11, 2026, lists 49 risk factors in 5 groups. Against the prior year's 24: 28 new, 3 dropped, 7 substantially reworded.

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Risk factors listed
495 groups
New this year
28vs 24 last year
Dropped
3since the prior 10-K
Substantially reworded
7of those kept
Section length
13k wordsItem 1A

What the changes say

  • Integration risks from the pending merger with NorthWestern dominate this year's filing.
  • Wildfire liability protections were added in Wyoming and Montana.
  • Supply chain constraints now highlight data center expansion demands.

What changed since the prior 10-K

New

  • NewREGULATORY, LEGISLATIVE, AND LEGAL RISKS

    Our financial performance depends on the successful operation of electric generating facilities, electric and natural gas transmission and distribution systems, natural gas storage facilities and a coal mine

  • NewRISKS RELATED TO MERGER WITH NORTHWESTERN

    There can be no assurance that a challenge to the Merger on antitrust grounds will not be made or, if such a challenge is made, of the result of such challenge

    Antitrust challenges or regulatory blocks could delay, alter, or prevent the Merger between BHC and NorthWestern.

  • NewRISKS RELATED TO MERGER WITH NORTHWESTERN

    the parties may be liable for damages to one another, or have to pay a termination fee, under the Merger Agreement

    Failure to satisfy closing conditions could result in termination fees or damages under the Merger Agreement.

  • NewRISKS RELATED TO MERGER WITH NORTHWESTERN

    The Merger Agreement contains provisions that limit BHC's ability to pursue alternatives to the Merger, could discourage a potential acquirer of BHC from making a favorable alternative transaction proposal and, in certain circumstances, could require BHC to pay a termination fee to NorthWestern

    The Merger Agreement restricts BHC from pursuing alternative acquisition proposals and requires a termination fee in certain circumstances.

  • NewRISKS RELATED TO MERGER WITH NORTHWESTERN

    Members of the management and the boards of directors of BHC and NorthWestern have interests in the Merger that are different from, or in addition to, those of other shareholders and that could have influenced their decisions to support or approve the Merger

    Management and directors have financial interests in the Merger, such as accelerated equity vesting and change-of-control payments, that differ from shareholders.

  • NewRISKS RELATED TO MERGER WITH NORTHWESTERN

    Uncertainties associated with the Merger may cause a loss of management personnel and other key employees of BHC and NorthWestern, which could adversely affect the future business and operations of the combined company following the Merger

    Uncertainty surrounding the Merger may cause key management and personnel to leave, disrupting future operations.

  • NewRISKS RELATED TO MERGER WITH NORTHWESTERN

    The business relationships of BHC and NorthWestern may be subject to disruption due to uncertainty associated with the Merger, which could have a material effect on the business, financial condition, cash flows and results of operations of BHC or NorthWestern pending the combined company and following the Merger

    Third parties such as customers, suppliers, and vendors may delay or alter business relationships due to Merger uncertainty.

  • NewRISKS RELATED TO MERGER WITH NORTHWESTERN

    BHC is subject to risk of the Merger having an adverse impact on its credit rating, both while the Merger is pending and following completion of the Merger

    The Merger or its failure could result in credit rating downgrades, increasing borrowing costs and impacting capital access.

  • NewRISKS RELATED TO MERGER WITH NORTHWESTERN

    The market prices of BHC common stock and other securities may be subject to fluctuation while the Merger is pending and after the Merger is completed

    BHC common stock price may fluctuate due to Merger pendency and a fixed exchange ratio linked to NorthWestern shares.

  • NewRISKS RELATED TO MERGER WITH NORTHWESTERN

    BHC is subject to contractual restrictions in the Merger Agreement that may hinder its operations while the Merger is pending. The corollary restrictions applicable to NorthWestern may not prevent NorthWestern from taking actions that are adverse to BHC or its shareholders

    Contractual restrictions in the Merger Agreement may prevent BHC from pursuing attractive business opportunities prior to closing.

  • NewRISKS RELATED TO MERGER WITH NORTHWESTERN

    BHC will incur significant transaction and other costs in connection with the Merger

    BHC will incur significant transaction and integration costs regardless of whether the Merger is completed.

  • NewRISKS RELATED TO MERGER WITH NORTHWESTERN

    The Merger may not be accretive to BHC's or NorthWestern’s earnings and may cause dilution to BHC's or NorthWestern’s earnings per share, which may negatively affect the current or future market price of BHC common stock or other securities

    The Merger may not be accretive to earnings per share and could dilute earnings or negatively impact stock prices.

  • NewRISKS RELATED TO MERGER WITH NORTHWESTERN

    BHC and/or NorthWestern may be subject to litigation challenging the Merger while it is pending, and an unfavorable judgment or ruling in any such lawsuits could prevent or delay the consummation of the Merger and/or result in substantial costs

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    Failure to successfully combine the businesses of BHC and NorthWestern in the expected time frame or at all may adversely affect the future results of the combined company, and, consequently, the value of the BHC common stock after the Merger

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    higher than expected costs required to achieve the anticipated benefits of the Merger

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    BHC shareholders will have a reduced ownership and voting interest after the Merger and will exercise less influence over management

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    The market price of BHC common stock after the completion of the Merger may be affected by factors different from those that historically have affected or currently affect BHC common stock

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    The failure to integrate the businesses and operations of BHC and NorthWestern successfully in the expected time frame may adversely affect the combined company’s future results

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    establishing the combined company’s headquarters in Rapid City, South Dakota

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    Each of BHC and NorthWestern may have liabilities that are not known to the other party

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    The combined company’s debt service obligations could have an adverse impact on its earnings and cash flows for as long as the indebtedness is outstanding

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    require that additional or more stringent terms, conditions or covenants be placed on BHC

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    The combined company may fail to realize all of the anticipated benefits of the Merger

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    The future results of the combined company following the Merger will suffer if the combined company does not effectively manage its expanded operations

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    There is no guarantee regarding dividends following the Merger

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    The combined company is expected to record a significant amount of goodwill as a result of the Merger, and such goodwill could become impaired in the future

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    BHC's ability to utilize its and/or NorthWestern’s historic net operating loss carryforwards and certain other tax attributes may be limited

  • NewRISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

    Future sales or issuances of BHC common stock could have a negative impact on the BHC common stock price

Dropped

  • DroppedREGULATORY, LEGISLATIVE, AND LEGAL RISKS

    Operating hazards. Operating hazards such as leaks, mechanical problems and accidents, including fires or explosions, could impact employee and public safety, reliability, and customer confidence

  • DroppedREGULATORY, LEGISLATIVE, AND LEGAL RISKS

    Equipment and processes. Breakdown or failure of equipment or processes, unavailability, or increased cost of equipment, and performance below expected levels of output or efficiency

  • DroppedREGULATORY, LEGISLATIVE, AND LEGAL RISKS

    Operational limitations. Operational limitations imposed by environmental and other regulatory requirements and contractual agreements, including those that restrict the timing of generation plant scheduled outages

Reworded

  • 51% rewrittenREGULATORY, LEGISLATIVE, AND LEGAL RISKS

    Our business segments are subject to numerous environmental laws and regulations affecting many aspects of present and future operations, including air emissions (i.e., SO2, NOx, volatile organic compounds, particulate matter, and GHG), water quality, wastewater discharges, solid waste, and hazardous waste

    Text formatting or non-substantive changes were made to environmental law and regulation descriptions.

  • 44% rewrittenREGULATORY, LEGISLATIVE, AND LEGAL RISKS

    Liability from fires could have a negative impact on our operations or financial performance, and our protocols may not prevent such liability

    Added the establishment of the Emergency PSPS program in 2025 and material liability protections enacted in Wyoming and Montana for utilities complying with wildfire mitigation plans.

  • 30% rewrittenREGULATORY, LEGISLATIVE, AND LEGAL RISKS

    Supply chain challenges could negatively impact our operations

    Added rising demand for key materials such as transformers, generation units, and equipment to meet rapid expansion for data center customers.

  • 28% rewrittenREGULATORY, LEGISLATIVE, AND LEGAL RISKS

    Our operations are subject to various conditions that can result in fluctuations in customer usage, including customer growth and general economic conditions in our service territories, weather conditions, and responses to price increases and technological improvements

    Added the risk of losing large-load industrial customers, specifically including data center facilities.

  • 24% rewrittenFINANCIAL RISKS

    We may be unable to obtain insurance coverage, and the coverage we currently have may not apply or may be insufficient to cover a significant loss

    Added disclosure that BHC takes certain insurance risks, including transmission and employment practice liabilities, through its captive insurance cell.

  • 23% rewrittenSTRATEGIC RISK

    Our continued success is dependent on execution of our business plan and growth strategy, including our capital investment program

    Text formatting or non-substantive changes were made to business plan and growth strategy descriptions.

  • 21% rewrittenREGULATORY, LEGISLATIVE, AND LEGAL RISKS

    Cybersecurity incidents, terrorism, or other malicious acts targeting our key technology systems could disrupt our operations, lead to a loss or misuse of confidential and proprietary information, or cause reputational or other harm

    Text formatting or non-substantive changes were made to cybersecurity and terrorist threat descriptions.

All 49 risk factors

Headings as the filing states them, in filing order.

STRATEGIC RISK

  1. 01Our continued success is dependent on execution of our business plan and growth strategy, including our capital investment program23% rewritten

REGULATORY, LEGISLATIVE, AND LEGAL RISKS

  1. 02We may be subject to unfavorable or untimely federal and state regulatory outcomes
  2. 03Municipal governments may seek to limit or deny our franchise privileges
  3. 04Our business segments are subject to numerous environmental laws and regulations affecting many aspects of present and future operations, including air emissions (i.e., SO2, NOx, volatile organic compounds, particulate matter, and GHG), water quality, wastewater discharges, solid waste, and hazardous waste51% rewritten
  4. 05Legislative and regulatory requirements may result in compliance penalties
  5. 06Changes in Federal income tax policy or our inability to use or generate tax credits may adversely affect our financial condition, results of operations, and cash flows, as well as our credit ratings
  6. 07Cybersecurity incidents, terrorism, or other malicious acts targeting our key technology systems could disrupt our operations, lead to a loss or misuse of confidential and proprietary information, or cause reputational or other harm21% rewritten
  7. 08Liability from fires could have a negative impact on our operations or financial performance, and our protocols may not prevent such liability44% rewritten
  8. 09Failure to attract and retain an appropriately qualified and engaged workforce could have a negative impact on our operations and long-term business strategy
  9. 10Supply chain challenges could negatively impact our operations30% rewritten
  10. 11Our financial performance depends on the successful operation of electric generating facilities, electric and natural gas transmission and distribution systems, natural gas storage facilities and a coal mineNew
  11. 12Public opposition. Opposition by members of public or special-interest groups could negatively impact our ability to operate our businesses
  12. 13The nature of our business subjects us to climate-related risk, stemming from both physical risk and transition risk of climate change, over varying time horizons
  13. 14Our operations are subject to various conditions that can result in fluctuations in customer usage, including customer growth and general economic conditions in our service territories, weather conditions, and responses to price increases and technological improvements28% rewritten
  14. 15If macroeconomic or other conditions adversely affect operations or require us to make changes to our strategic business plan, we may be forced to record a non-cash goodwill impairment charge

FINANCIAL RISKS

  1. 16A sub-investment grade credit rating could impact our ability to access capital markets
  2. 17We may be unable to obtain financing on reasonable terms needed to refinance debt, fund planned capital expenditures or otherwise execute our operating strategy
  3. 18We may be unable to obtain insurance coverage, and the coverage we currently have may not apply or may be insufficient to cover a significant loss24% rewritten
  4. 19Costs associated with our healthcare plans and other benefits could increase significantly
  5. 20We have a holding company corporate structure with multiple subsidiaries. Corporate dividends and debt payments are dependent upon cash distributions to the holding company from the subsidiaries
  6. 21Market performance or changes in key valuation assumptions could require us to make significant unplanned contributions to our pension plan and other retiree benefit plans
  7. 22Our use of derivative financial instruments as hedges against commodity prices and financial market risks could result in material financial losses

RISKS RELATED TO MERGER WITH NORTHWESTERN

  1. 23There can be no assurance that a challenge to the Merger on antitrust grounds will not be made or, if such a challenge is made, of the result of such challengeNew
  2. 24the parties may be liable for damages to one another, or have to pay a termination fee, under the Merger AgreementNew
  3. 25The Merger Agreement contains provisions that limit BHC's ability to pursue alternatives to the Merger, could discourage a potential acquirer of BHC from making a favorable alternative transaction proposal and, in certain circumstances, could require BHC to pay a termination fee to NorthWesternNew
  4. 26Members of the management and the boards of directors of BHC and NorthWestern have interests in the Merger that are different from, or in addition to, those of other shareholders and that could have influenced their decisions to support or approve the MergerNew
  5. 27Uncertainties associated with the Merger may cause a loss of management personnel and other key employees of BHC and NorthWestern, which could adversely affect the future business and operations of the combined company following the MergerNew
  6. 28The business relationships of BHC and NorthWestern may be subject to disruption due to uncertainty associated with the Merger, which could have a material effect on the business, financial condition, cash flows and results of operations of BHC or NorthWestern pending the combined company and following the MergerNew
  7. 29BHC is subject to risk of the Merger having an adverse impact on its credit rating, both while the Merger is pending and following completion of the MergerNew
  8. 30The market prices of BHC common stock and other securities may be subject to fluctuation while the Merger is pending and after the Merger is completedNew
  9. 31BHC is subject to contractual restrictions in the Merger Agreement that may hinder its operations while the Merger is pending. The corollary restrictions applicable to NorthWestern may not prevent NorthWestern from taking actions that are adverse to BHC or its shareholdersNew
  10. 32BHC will incur significant transaction and other costs in connection with the MergerNew
  11. 33The Merger may not be accretive to BHC's or NorthWestern’s earnings and may cause dilution to BHC's or NorthWestern’s earnings per share, which may negatively affect the current or future market price of BHC common stock or other securitiesNew
  12. 34BHC and/or NorthWestern may be subject to litigation challenging the Merger while it is pending, and an unfavorable judgment or ruling in any such lawsuits could prevent or delay the consummation of the Merger and/or result in substantial costsNew

RISKS RELATING TO THE COMBINED COMPANY FOLLOWING COMPLETION OF THE MERGER

  1. 35Failure to successfully combine the businesses of BHC and NorthWestern in the expected time frame or at all may adversely affect the future results of the combined company, and, consequently, the value of the BHC common stock after the MergerNew
  2. 36higher than expected costs required to achieve the anticipated benefits of the MergerNew
  3. 37BHC shareholders will have a reduced ownership and voting interest after the Merger and will exercise less influence over managementNew
  4. 38The market price of BHC common stock after the completion of the Merger may be affected by factors different from those that historically have affected or currently affect BHC common stockNew
  5. 39The failure to integrate the businesses and operations of BHC and NorthWestern successfully in the expected time frame may adversely affect the combined company’s future resultsNew
  6. 40establishing the combined company’s headquarters in Rapid City, South DakotaNew
  7. 41Each of BHC and NorthWestern may have liabilities that are not known to the other partyNew
  8. 42The combined company’s debt service obligations could have an adverse impact on its earnings and cash flows for as long as the indebtedness is outstandingNew
  9. 43require that additional or more stringent terms, conditions or covenants be placed on BHCNew
  10. 44The combined company may fail to realize all of the anticipated benefits of the MergerNew
  11. 45The future results of the combined company following the Merger will suffer if the combined company does not effectively manage its expanded operationsNew
  12. 46There is no guarantee regarding dividends following the MergerNew
  13. 47The combined company is expected to record a significant amount of goodwill as a result of the Merger, and such goodwill could become impaired in the futureNew
  14. 48BHC's ability to utilize its and/or NorthWestern’s historic net operating loss carryforwards and certain other tax attributes may be limitedNew
  15. 49Future sales or issuances of BHC common stock could have a negative impact on the BHC common stock priceNew

Other Black Hills 10-Ks

  • FY2024 10-K risk factors
    24 risks

    Wildfires and PSPS framework implementation represent key emerging operating risks for the utility business. Regulatory rate oversight across eight state commissions dictates financial viability. Capital program execution depends heavily on continuous debt market access and credit ratings.

    Filed Feb 12, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.