SEC Comment Letter for BLACK HILLS (BKH) — Sep 23, 2016
BLACK HILLS CORP /SD/
Date: Sept. 23, 2016 · CIK: 0001130464 · Accession: 0000000000-16-094344
AI Filing Summary & Sentiment
Letter
Mail Stop 3561 September 23 , 2016 David R. Emery Chairman and Chief Executive Officer Black Hills Corporation 625 Ninth Street Rapid City, South Dakota 57701
Re: Black Hills Corporation Form 10-K for Fiscal Year Ended December 31, 2015 Filed February 25, 2016 Form 10 -Q for Fiscal Quarter Ended June 30, 2016 Filed August 5, 2016 Amendment No. 1 to Form 8 -K Filed March 18, 2016 File No. 1-31303
Dear Mr. Emery :
We have limited our review of your filing to the financial statements and related disclosures and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have additional comments.
Form 10 -K for Fiscal Year Ended December 31, 2015
Consolidated Balance Sheets, page 127
1. Please tell us whether there are any items included in other current assets that exceed five percent of total current assets . If so, please state separately, in the balance sheets or in the notes thereto, any item in excess of five percent of total current assets . Refer to Rule 5 - 02.8 of Regulation S -X.
(12) Stock, page 165
2. Please tell us your consideration to disclose the weighted -average grant date fair value for stock options pursuant to ASC 718 -10-50-2(c)(2). Please also tell us your consideration
David R. Emery Black Hills Corporation September 23, 2016 Page 2
to disclose the method and assumptions used to estimate the fair value of s tock options pursuant to ASC 718 -10-50-2(f).
3. Please disclose in future filings your accounting policy with respe ct to stock -based compensation.
Form 10 -Q for Fiscal Quarter Ended June 30, 2016
Notes to Condensed Consolidated Financial Statements
(2) Acquisition
Acquisition of SourceGas
Seller’s non -controlling interest, page 16
4. We note your disclosure that one of the sellers retained 0.5% of the outstanding equity interest of SourceGas under the terms of the purchase agreement, and the agreemen t contains both a call option to purchase the remaining interest and a put option to sell the retained interest. It appears that the purchase price allocation includes 100% of SourceGas net assets and the value of the 0.5% equity interest is reflected as Redeemable NCI. Please clarify for us and disclose how you accounted for the NCI and the related call and put options. In doing so, please also tell us whether the exercise price for the call and put options are fixed and similar or not significantly dif ferent. Refer to ASC 480 -10- 55-59 through 55 -62.
Amendment No. 1 to Form 8 -K Filed March 18, 2016
Exhibit 99.2
(4) Pro Forma Allocation of Purchase Price, page 7
5. While we understand that the non -controlling interest is subject to valuation adjustme nts that have not been made, please tell us you r consideration to disclose the equity interest of SourceGas acquired by the company and retained by the seller, and to disclose the non-controlling interest call and put options contained in the purchase agre ement.
(5) Pro Forma Adjustments, page 9
6. Please tell us and disclose in future filings how you determined the estimated fair value of the long -term gas supply contract held by SourceGas’ non -regulated subsidiary in pro forma adjustment (J) on page 12.
David R. Emery Black Hills Corporation September 23, 2016 Page 3
7. Please tell us the nature of the one -time and non -recurring expense associated with the acquisition in pro forma adjustment (L) on page 12.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the compa ny and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of t he disclosures they have made.
In responding to our comments, please provide a written statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
You may contact Yolanda Guoba dia, Staff Accountant, at (202) 551 -3562, Donna Di Silvio, Staff Accountant, at (202) 551 -3202 or me at (202) 551 -3344 if you have questions regarding our comment s or any other questions.
Sincerely,
/s/ William H. Thompson
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Mail Stop 3561 September 23 , 2016 David R. Emery Chairman and Chief Executive Officer Black Hills Corporation 625 Ninth Street Rapid City, South Dakota 57701 Re: Black Hills Corporation Form 10-K for Fiscal Year Ended December 31, 2015 Filed February 25, 2016 Form 10 -Q for Fiscal Quarter Ended June 30, 2016 Filed August 5, 2016 Amendment No. 1 to Form 8 -K Filed March 18, 2016 File No. 1-31303 Dear Mr. Emery : We have limited our review of your filing to the financial statements and related disclosures and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Form 10 -K for Fiscal Year Ended December 31, 2015 Consolidated Balance Sheets, page 127 1. Please tell us whether there are any items included in other current assets that exceed five percent of total current assets . If so, please state separately, in the balance sheets or in the notes thereto, any item in excess of five percent of total current assets . Refer to Rule 5 - 02.8 of Regulation S -X. (12) Stock, page 165 2. Please tell us your consideration to disclose the weighted -average grant date fair value for stock options pursuant to ASC 718 -10-50-2(c)(2). Please also tell us your consideration David R. Emery Black Hills Corporation September 23, 2016 Page 2 to disclose the method and assumptions used to estimate the fair value of s tock options pursuant to ASC 718 -10-50-2(f). 3. Please disclose in future filings your accounting policy with respe ct to stock -based compensation. Form 10 -Q for Fiscal Quarter Ended June 30, 2016 Notes to Condensed Consolidated Financial Statements (2) Acquisition Acquisition of SourceGas Seller’s non -controlling interest, page 16 4. We note your disclosure that one of the sellers retained 0.5% of the outstanding equity interest of SourceGas under the terms of the purchase agreement, and the agreemen t contains both a call option to purchase the remaining interest and a put option to sell the retained interest. It appears that the purchase price allocation includes 100% of SourceGas net assets and the value of the 0.5% equity interest is reflected as Redeemable NCI. Please clarify for us and disclose how you accounted for the NCI and the related call and put options. In doing so, please also tell us whether the exercise price for the call and put options are fixed and similar or not significantly dif ferent. Refer to ASC 480 -10- 55-59 through 55 -62. Amendment No. 1 to Form 8 -K Filed March 18, 2016 Exhibit 99.2 (4) Pro Forma Allocation of Purchase Price, page 7 5. While we understand that the non -controlling interest is subject to valuation adjustme nts that have not been made, please tell us you r consideration to disclose the equity interest of SourceGas acquired by the company and retained by the seller, and to disclose the non-controlling interest call and put options contained in the purchase agre ement. (5) Pro Forma Adjustments, page 9 6. Please tell us and disclose in future filings how you determined the estimated fair value of the long -term gas supply contract held by SourceGas’ non -regulated subsidiary in pro forma adjustment (J) on page 12. David R. Emery Black Hills Corporation September 23, 2016 Page 3 7. Please tell us the nature of the one -time and non -recurring expense associated with the acquisition in pro forma adjustment (L) on page 12. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the compa ny and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of t he disclosures they have made. In responding to our comments, please provide a written statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. You may contact Yolanda Guoba dia, Staff Accountant, at (202) 551 -3562, Donna Di Silvio, Staff Accountant, at (202) 551 -3202 or me at (202) 551 -3344 if you have questions regarding our comment s or any other questions. Sincerely, /s/ William H. Thompson William H. Thompson Accounting Branch Chief Office of Consumer Products