Business Context and Reporting Period
Company: Black Hills Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: February 23, 2018
Context: The Company is filing its Annual Report on Form 10-K for the year ended December 31, 2017. This 8-K provides an update regarding an additional accounting adjustment related to the revaluation of deferred taxes associated with items in Accumulated Other Comprehensive Income (AOCI) following the adoption of Accounting Standards Update 2018-02 and further evaluation of the Tax Cuts and Jobs Act (TCJA).
Key Financial Metrics
The filing details a revision to previously reported GAAP results for the three and twelve months ended December 31, 2017. There is no impact on cash flows or individual business segment results.
| Metric | Three Months Ended Dec 31, 2017 (Previously Reported) | Three Months Ended Dec 31, 2017 (As Revised) | Twelve Months Ended Dec 31, 2017 (Previously Reported) | Twelve Months Ended Dec 31, 2017 (As Revised) |
|---|---|---|---|---|
| GAAP Income from Continuing Operations ($ millions) | $71.3 | $64.3 | $201.1 | $194.1 |
| GAAP EPS (Diluted) | $1.30 | $1.17 | $3.65 | $3.52 |
| Non-GAAP Income from Continuing Operations ($ millions) | $53.9 | $53.9 | $185.3 | $185.3 |
| Non-GAAP EPS (Diluted) | $0.98 | $0.98 | $3.36 | $3.36 |
Note: The filing does not provide specific data on revenue, total debt, or liquidity ratios in this specific 8-K update.
Material Changes Versus Prior Period
- GAAP Adjustment: An additional adjustment increased deferred tax expense, decreasing GAAP income from continuing operations by $7 million ($0.13 per diluted share) for both the three and twelve months ended December 31, 2017.
- Non-GAAP Stability: There was no impact on "Income from continuing operations, as adjusted" (Non-GAAP) because the benefit from tax reform is excluded from this measure as it does not reflect core operating performance.
- Segment Impact: No impact on the results of individual business segments.
Management Commentary and Risks
Management Commentary: Management utilizes Non-GAAP financial measures to exclude items not indicative of continuing operating results. The adjustment was necessitated by the reclassification of certain tax effects from AOCI under ASU 2018-02 and the TCJA. The filing explicitly states that this information is furnished pursuant to Item 2.02 and is not deemed "filed" for Section 18 liability purposes.
Risks and Contingencies: The filing highlights the accounting complexity surrounding the revaluation of deferred taxes and the impact of recent tax legislation (TCJA) on financial reporting.
Investor Verification Checklist
- Verify the full text of the Form 10-K filed on February 23, 2018, for complete revenue, cash flow, and debt data not included in this 8-K.
- Confirm the specific components of the $7 million deferred tax expense adjustment in the 10-K notes.
- Review the reconciliation of GAAP to Non-GAAP measures to understand the exclusion of tax reform benefits.
- Check for any subsequent filings regarding the impact of ASU 2018-02 on future reporting periods.