SEC Company Response from BLACK HILLS (BKH) — Sep 29, 2015
BLACK HILLS CORP /SD/ (BKH) (CIK 0001130464)
Date: Sept. 29, 2015 · CIK: 0001130464 · Accession: 0001130464-15-000155
AI Filing Summary & Sentiment
Reasoning
Letter
Office of Consumer Products Division of Corporation Finance United States Securities and Exchange Commission Form 8-K filed August 5, 2015 Amendment No. 1 to Form 10-K for Fiscal Year Ended December 31, 2014 Filed August 7, 2015 File No. 1-31303
Dear Mr. Thompson:
The purpose of this letter is to respond to your comments as set forth in your letter of September 15, 2015. The headings used herein are the same as those set forth in your letter. For ease of reference, we have set forth your comment before each response.
We have carefully considered your comments. Our responses provide the details of how we intend to comply with your comments by enhancing and, in some respects, clarifying our disclosures, and we have provided details surrounding our qualitative and quantitative assessment of materiality as it relates to our recently amended filings.
In connection with our response to your comments, we also acknowledge the following:
•
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.
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources, page 99
Comment No. 1:
Reference is made to the first financing risk factor disclosed on page 61 which states a credit rating downgrade could result in counterparties requiring you to post additional collateral under existing contracts. Please tell us your consideration of disclosing the nature of these contracts, collateral posted, and incremental collateral requirements resulting from a potential credit rating downgrade in your discussion of liquidity and capital resources.
Improving life with energy
www.blackhillscorp.com
William H. Thompson
U.S. Securities and Exchange Commission
September 29, 2015
Page 2
Company's Response:
In determining our disclosures related to additional collateral requirements under existing contracts which could be required in the event of a credit rating downgrade, the Company considered the following factors:
1)
The amount of potential collateral calls under existing contracts which could be required in the event of a credit rating downgrade to below investment-grade. We estimated at December 31, 2014, an aggregate total of approximately $62.3 million of additional collateral could be requested under such a downgrade.
2)
The amount of the potential collateral calls noted above relative to the $390 million of available liquidity at December 31, 2014 under our revolving credit facility as disclosed on page 102 of our 2014 Form 10-K.
3)
The additional measures the Company could take to prevent our corporate credit ratings from being downgraded to below investment-grade, including potential asset sales, capital markets transactions and changes to our dividend policy.
Considering these factors, we determined that we had sufficient liquidity to cover the additional collateral that could be required. We acknowledge that including information in the Liquidity and Capital Resources discussion surrounding this risk would enhance our disclosures. In response to the Staff’s comment, in future filings beginning with our 2015 third quarter 10-Q, we will expand the disclosure in Liquidity and Capital Resources, Significant Factors Affecting Liquidity to provide additional detail surrounding collateral requirements, including the nature of such contracts, collateral posted, and incremental collateral requirements. This risk does not apply to the Cash Collateral disclosure on page 101 of our 2014 Form 10-K as these contracts do not include these performance assurance provisions.
In future annual and quarterly filings, we will include the expanded disclosure shown below. We include the expanded discussion below (additional text shown in italics) to show what this disclosure would have looked like if it had been provided as of December 31, 2014:
Liquidity and Capital Resources
Significant Factors Affecting Liquidity
Although we believe we have sufficient resources to fund our cash requirements, there are many factors with the potential to influence our cash flow position, including seasonality, commodity prices, significant capital projects and acquisitions, requirements imposed by state and federal agencies and economic market conditions. We have implemented risk mitigation programs, where possible, to stabilize cash flow; however, the potential for unforeseen events affecting cash needs will continue to exist.
Our Utilities maintain wholesale commodity contracts for the purchases and sales of electricity and natural gas which have performance assurance provisions that allow the counterparty to require collateral postings under certain conditions, including when requested on a reasonable basis due to a deterioration in our financial condition or nonperformance. A significant downgrade in our credit ratings, such as a downgrade to a level below investment grade, could result in counterparties requiring collateral postings under such adequate assurance provisions. The amount of credit support that the Company may be required to provide at any point in the future is dependent on the amount of the initial transaction, changes in the market price, open positions and the amounts owed by or to the counterparty.
The Company also maintains interest rate swap transactions under which we could be required to post collateral on the value of such swaps in the event of an adverse change in our financial condition, including a credit downgrade to below investment-grade.
At December 31, 2014 we had $4.5 million of collateral posted related to our wholesale commodity contracts transactions, and no collateral posted related to our interest rate swap transactions. At December 31, 2014, we had sufficient liquidity to cover any additional collateral that could be required to be posted under these contracts.
Improving life with energy
www.blackhillscorp.com
William H. Thompson
U.S. Securities and Exchange Commission
September 29, 2015
Page 3
CASH GENERATION AND CASH REQUIREMENTS
Cash Collateral
Under contractual agreements and exchange requirements, BHC or its subsidiaries have collateral requirements, which if triggered, require us to post cash collateral positions with the counterparty to meet these obligations.
We have posted the following amounts of cash collateral with counterparties at December 31 (in thousands):
Purpose of Cash Collateral
Natural Gas Futures and Basis Swaps Pursuant to Utility Commission Approved Hedging Programs
$
20,007
$
10,123
Oil and Gas Derivatives
4,392
2,501
Total Cash Collateral Positions
$
24,399
$
12,624
FORM 8-K FILED AUGUST 5, 2015
Exhibit 99
Comment No. 2:
Reference is made to your disclosure of fiscal 2015 earnings, as adjusted, guidance in the range of $2.80 to $3.00 per share. Please tell us your consideration of providing disclosure pursuant to Item 10(e)(1)(i)(A) and (B) of Regulation S-K.
Company's Response:
From time to time, we may provide guidance on non-GAAP Earnings per share, which reflects certain adjustments from our expected GAAP Earnings per share, because our investors are interested in understanding our expectations for the Company’s core operating performance. Examples of the types of adjustments may include non-budgeted events, non-cash impairments of assets and acquisition and disposition costs. In periods where we provide such forward-looking non-GAAP guidance, we will comply with Item 10(e)(1)(i)(A) and (B) of Regulation S-K and provide a reconciliation to the comparable GAAP guidance. If a reconciliation cannot be provided without unreasonable effort, we will identify the information that is not available without unreasonable effort, and disclose its probable significance.
We had adjustments or special items in the August earnings release; therefore, we should have identified the Earnings per share, as adjusted, guidance we provided at the time for the year ended December 31, 2015 as a Non-GAAP financial measure and disclosed our GAAP Earnings per share guidance and provided a reconciliation. Accordingly, we should have included the following to show the reconciliation as of June 30, 2015:
Improving life with energy
www.blackhillscorp.com
William H. Thompson
U.S. Securities and Exchange Commission
September 29, 2015
Page 4
RECONCILIATION OF NON-GAAP GUIDANCE
Low
High
GAAP Diluted Earnings Per Share
$
0.98
$
1.18
Adjustments, after tax:
Ceiling test impairment
1.73
1.73
Impairment of equity investments
0.08
0.08
Acquisition costs
0.01
0.01
Total Adjustments
1.82
1.82
Earnings per share, As Adjusted (Non-GAAP)
$
2.80
$
3.00
In future releases of earnings guidance or updates to our earnings guidance, we will include a reconciliation such as the one set forth above or, if a reconciliation cannot be provided without unreasonable effort, we will state the following:
Earnings per share, as adjusted, is a Non-GAAP financial measure. Earnings per share, as adjusted, is defined as GAAP Earnings per share, 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, impairment of assets, acquisition and disposition costs, and other adjustments noted in the earnings reconciliation table in this release. The Company is not able to provide a forward-looking quantitative GAAP to Non-GAAP reconciliation for this financial measure because we do not know the unplanned or unique events that may occur later during the year.
AMENDMENT NO. 1 TO FORM 10-K FOR FISCAL YEAR ENDED DECEMBER 31, 2014
Item 8. Financial Statements and Supplementary Data
Notes to Consolidated Financial Statements
(1) Business Description and Significant Accounting Policies
Correction of Immaterial Errors, page 65
Comment No. 3:
Please provide us with your qualitative and quantitative assessment of materiality which supports a conclusion that the year ended December 31, 2012 adjustments were not material to your year ended December 31, 2012 financial statements. In addition, please explain why the audit report date refers to a "restatement" while there is no reference to a restatement in the audited financial statements and notes to financial statements. Further, reference is made to Amendment No. 1 to Form 10-Q for the quarterly period ended March 31, 2015. Please provide a similar analysis for your conclusion that the three months ended March 31, 2015 adjustments were not material to your three months ended March 31, 2015 financial statements.
Company's Response:
Our response to the Staff’s Comment No. 3 is separated in sections below, beginning with a brief background of the issue which required the correction of immaterial errors and continuing with the specific portion of the Staff Comment being addressed stated in italics prior to the specific response.
Improving life with energy
www.blackhillscorp.com
William H. Thompson
U.S. Securities and Exchange Commission
September 29, 2015
Page 5
Background
Under the full cost method of accounting used to account for our oil and gas activities, as defined in SEC Reg S-X, Rule 4-10, all costs attributable to these activities are capitalized. These capitalized costs, less accumulated amortization and related deferred income taxes, are subject to a ceiling test that limits the pooled costs to the aggregate of the discounted value of future net revenue attributable to proved natural gas and crude oil reserves using a discount rate defined by the SEC plus the lower of cost or market value of unevaluated properties. Any costs in excess of the ceiling are written-off as a non-cash charge.
The model applied in performing our oil and gas ceiling test impairment calculation was developed prior to 2008 and has been applied consistently each quarter in assessing the need to record an impairment and to calculate the amount of the impairment, if applicable. In preparing our financial statements for the quarter ended June 30, 2015, we determined that we had not appropriately accounted for income taxes associated with the ceiling test impairment within the model. This error in the model resulted in us incorrectly calculating and consequently understating the ceiling test impairment charge recorded in 2008, 2009 and 2012, and the quarter ended March 31, 2015. In addition, this error resulted in depletion expense being overstated in all periods subsequent to 2008, and the 2012 calculation of gain recognized on the sale of oil and gas producing property being understated (see also footnote disclosure from 2012 Form 10K for further explanation regarding gain recognition under full-cost accounting).
In considering the impacts of these errors, we considered the primary users of our financial statements, including investors, banks/lenders, analysts, and regulatory agencies. We also evaluated the quantitative and qualitative aspects of materiality as explained further in this response. We concluded the errors were immaterial thus not requiring a restatement of historical information. We also concluded that correcting the cumulative effect of the errors in the second quarter of 2015 via a larger impairment charge would materially misstate the second quarter 2015 financial statements. However, based on a reassessment of the effectiveness of our internal controls over financial reporting, we concluded that there was a material weakness as of December 31, 2014 related to a deficiency in the level of training in performing the control over the full cost ceiling test write-down impairment calculation, specifically related to evaluating and correctly accounting for the treatment of tax amounts associated with the calculation. Accordingly, we amended both our 2014 Form 10-K (“2014 10-K/A”) and Form 10-Q for the period ended March 31, 2015 (“2015 Form 10-Q/A) to reflect this material weakness. In connection with amending our 2014 Form 10-K we corrected the errors by recording an adjustment to opening retained earnings as of January 1, 2012 equal to the cumulative amount of the errors attributable to periods prior to 2012, and then revised the presentation of the subsequent periods ending December 31, 2012, 2013 and 2014 and March 31, 2015.
•
Please provide us with your qualitative and quantitative assessment of materiality which supports a conclusion that the year ended December 31, 2012 adjustments were not material to your year ended December 31, 2012 financial statements. Further, reference is made to Amendment No. 1 to Form 10-Q for the quarterly period ended March 31, 2015. Please provide a similar analysis for your conclusion that the three months ended March 31, 2015 adjustments were not material to your three months ended March 31, 2015 financial statements.
In evaluating the errors for the year ended December 31, 2012, and for the three months ended March 31, 2015, and in concluding that the errors were not material to the year ended December 31, 2012 financial statements or the three months ended March 31, 2015 financial
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CORRESP 1 filename1.htm CORRESP 625 Ninth Street / P.O. Box 1400 P: 605.721.1700 Rapid City, SD 57709-1400 www.blackhillscorp.com September 29, 2015 William H. Thompson Accounting Branch Chief Office of Consumer Products Division of Corporation Finance United States Securities and Exchange Commission Washington, D.C. 20549 Re: Black Hills Corporation (the “Company”, “we”, “our” or “us”) Form 10-K for the Fiscal Year Ended December 31, 2014 Filed February 25, 2015 Form 8-K filed August 5, 2015 Amendment No. 1 to Form 10-K for Fiscal Year Ended December 31, 2014 Filed August 7, 2015 File No. 1-31303 Dear Mr. Thompson: The purpose of this letter is to respond to your comments as set forth in your letter of September 15, 2015. The headings used herein are the same as those set forth in your letter. For ease of reference, we have set forth your comment before each response. We have carefully considered your comments. Our responses provide the details of how we intend to comply with your comments by enhancing and, in some respects, clarifying our disclosures, and we have provided details surrounding our qualitative and quantitative assessment of materiality as it relates to our recently amended filings. In connection with our response to your comments, we also acknowledge the following: • 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. FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources, page 99 Comment No. 1: Reference is made to the first financing risk factor disclosed on page 61 which states a credit rating downgrade could result in counterparties requiring you to post additional collateral under existing contracts. Please tell us your consideration of disclosing the nature of these contracts, collateral posted, and incremental collateral requirements resulting from a potential credit rating downgrade in your discussion of liquidity and capital resources. Improving life with energy www.blackhillscorp.com William H. Thompson U.S. Securities and Exchange Commission September 29, 2015 Page 2 Company's Response: In determining our disclosures related to additional collateral requirements under existing contracts which could be required in the event of a credit rating downgrade, the Company considered the following factors: 1) The amount of potential collateral calls under existing contracts which could be required in the event of a credit rating downgrade to below investment-grade. We estimated at December 31, 2014, an aggregate total of approximately $62.3 million of additional collateral could be requested under such a downgrade. 2) The amount of the potential collateral calls noted above relative to the $390 million of available liquidity at December 31, 2014 under our revolving credit facility as disclosed on page 102 of our 2014 Form 10-K. 3) The additional measures the Company could take to prevent our corporate credit ratings from being downgraded to below investment-grade, including potential asset sales, capital markets transactions and changes to our dividend policy. Considering these factors, we determined that we had sufficient liquidity to cover the additional collateral that could be required. We acknowledge that including information in the Liquidity and Capital Resources discussion surrounding this risk would enhance our disclosures. In response to the Staff’s comment, in future filings beginning with our 2015 third quarter 10-Q, we will expand the disclosure in Liquidity and Capital Resources, Significant Factors Affecting Liquidity to provide additional detail surrounding collateral requirements, including the nature of such contracts, collateral posted, and incremental collateral requirements. This risk does not apply to the Cash Collateral disclosure on page 101 of our 2014 Form 10-K as these contracts do not include these performance assurance provisions. In future annual and quarterly filings, we will include the expanded disclosure shown below. We include the expanded discussion below (additional text shown in italics) to show what this disclosure would have looked like if it had been provided as of December 31, 2014: Liquidity and Capital Resources Significant Factors Affecting Liquidity Although we believe we have sufficient resources to fund our cash requirements, there are many factors with the potential to influence our cash flow position, including seasonality, commodity prices, significant capital projects and acquisitions, requirements imposed by state and federal agencies and economic market conditions. We have implemented risk mitigation programs, where possible, to stabilize cash flow; however, the potential for unforeseen events affecting cash needs will continue to exist. Our Utilities maintain wholesale commodity contracts for the purchases and sales of electricity and natural gas which have performance assurance provisions that allow the counterparty to require collateral postings under certain conditions, including when requested on a reasonable basis due to a deterioration in our financial condition or nonperformance. A significant downgrade in our credit ratings, such as a downgrade to a level below investment grade, could result in counterparties requiring collateral postings under such adequate assurance provisions. The amount of credit support that the Company may be required to provide at any point in the future is dependent on the amount of the initial transaction, changes in the market price, open positions and the amounts owed by or to the counterparty. The Company also maintains interest rate swap transactions under which we could be required to post collateral on the value of such swaps in the event of an adverse change in our financial condition, including a credit downgrade to below investment-grade. At December 31, 2014 we had $4.5 million of collateral posted related to our wholesale commodity contracts transactions, and no collateral posted related to our interest rate swap transactions. At December 31, 2014, we had sufficient liquidity to cover any additional collateral that could be required to be posted under these contracts. Improving life with energy www.blackhillscorp.com William H. Thompson U.S. Securities and Exchange Commission September 29, 2015 Page 3 CASH GENERATION AND CASH REQUIREMENTS Cash Collateral Under contractual agreements and exchange requirements, BHC or its subsidiaries have collateral requirements, which if triggered, require us to post cash collateral positions with the counterparty to meet these obligations. We have posted the following amounts of cash collateral with counterparties at December 31 (in thousands): Purpose of Cash Collateral 2014 2013 Natural Gas Futures and Basis Swaps Pursuant to Utility Commission Approved Hedging Programs $ 20,007 $ 10,123 Oil and Gas Derivatives 4,392 2,501 Total Cash Collateral Positions $ 24,399 $ 12,624 FORM 8-K FILED AUGUST 5, 2015 Exhibit 99 Comment No. 2: Reference is made to your disclosure of fiscal 2015 earnings, as adjusted, guidance in the range of $2.80 to $3.00 per share. Please tell us your consideration of providing disclosure pursuant to Item 10(e)(1)(i)(A) and (B) of Regulation S-K. Company's Response: From time to time, we may provide guidance on non-GAAP Earnings per share, which reflects certain adjustments from our expected GAAP Earnings per share, because our investors are interested in understanding our expectations for the Company’s core operating performance. Examples of the types of adjustments may include non-budgeted events, non-cash impairments of assets and acquisition and disposition costs. In periods where we provide such forward-looking non-GAAP guidance, we will comply with Item 10(e)(1)(i)(A) and (B) of Regulation S-K and provide a reconciliation to the comparable GAAP guidance. If a reconciliation cannot be provided without unreasonable effort, we will identify the information that is not available without unreasonable effort, and disclose its probable significance. We had adjustments or special items in the August earnings release; therefore, we should have identified the Earnings per share, as adjusted, guidance we provided at the time for the year ended December 31, 2015 as a Non-GAAP financial measure and disclosed our GAAP Earnings per share guidance and provided a reconciliation. Accordingly, we should have included the following to show the reconciliation as of June 30, 2015: Improving life with energy www.blackhillscorp.com William H. Thompson U.S. Securities and Exchange Commission September 29, 2015 Page 4 RECONCILIATION OF NON-GAAP GUIDANCE Low High GAAP Diluted Earnings Per Share $ 0.98 $ 1.18 Adjustments, after tax: Ceiling test impairment 1.73 1.73 Impairment of equity investments 0.08 0.08 Acquisition costs 0.01 0.01 Total Adjustments 1.82 1.82 Earnings per share, As Adjusted (Non-GAAP) $ 2.80 $ 3.00 In future releases of earnings guidance or updates to our earnings guidance, we will include a reconciliation such as the one set forth above or, if a reconciliation cannot be provided without unreasonable effort, we will state the following: Earnings per share, as adjusted, is a Non-GAAP financial measure. Earnings per share, as adjusted, is defined as GAAP Earnings per share, 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, impairment of assets, acquisition and disposition costs, and other adjustments noted in the earnings reconciliation table in this release. The Company is not able to provide a forward-looking quantitative GAAP to Non-GAAP reconciliation for this financial measure because we do not know the unplanned or unique events that may occur later during the year. AMENDMENT NO. 1 TO FORM 10-K FOR FISCAL YEAR ENDED DECEMBER 31, 2014 Item 8. Financial Statements and Supplementary Data Notes to Consolidated Financial Statements (1) Business Description and Significant Accounting Policies Correction of Immaterial Errors, page 65 Comment No. 3: Please provide us with your qualitative and quantitative assessment of materiality which supports a conclusion that the year ended December 31, 2012 adjustments were not material to your year ended December 31, 2012 financial statements. In addition, please explain why the audit report date refers to a "restatement" while there is no reference to a restatement in the audited financial statements and notes to financial statements. Further, reference is made to Amendment No. 1 to Form 10-Q for the quarterly period ended March 31, 2015. Please provide a similar analysis for your conclusion that the three months ended March 31, 2015 adjustments were not material to your three months ended March 31, 2015 financial statements. Company's Response: Our response to the Staff’s Comment No. 3 is separated in sections below, beginning with a brief background of the issue which required the correction of immaterial errors and continuing with the specific portion of the Staff Comment being addressed stated in italics prior to the specific response. Improving life with energy www.blackhillscorp.com William H. Thompson U.S. Securities and Exchange Commission September 29, 2015 Page 5 Background Under the full cost method of accounting used to account for our oil and gas activities, as defined in SEC Reg S-X, Rule 4-10, all costs attributable to these activities are capitalized. These capitalized costs, less accumulated amortization and related deferred income taxes, are subject to a ceiling test that limits the pooled costs to the aggregate of the discounted value of future net revenue attributable to proved natural gas and crude oil reserves using a discount rate defined by the SEC plus the lower of cost or market value of unevaluated properties. Any costs in excess of the ceiling are written-off as a non-cash charge. The model applied in performing our oil and gas ceiling test impairment calculation was developed prior to 2008 and has been applied consistently each quarter in assessing the need to record an impairment and to calculate the amount of the impairment, if applicable. In preparing our financial statements for the quarter ended June 30, 2015, we determined that we had not appropriately accounted for income taxes associated with the ceiling test impairment within the model. This error in the model resulted in us incorrectly calculating and consequently understating the ceiling test impairment charge recorded in 2008, 2009 and 2012, and the quarter ended March 31, 2015. In addition, this error resulted in depletion expense being overstated in all periods subsequent to 2008, and the 2012 calculation of gain recognized on the sale of oil and gas producing property being understated (see also footnote disclosure from 2012 Form 10K for further explanation regarding gain recognition under full-cost accounting). In considering the impacts of these errors, we considered the primary users of our financial statements, including investors, banks/lenders, analysts, and regulatory agencies. We also evaluated the quantitative and qualitative aspects of materiality as explained further in this response. We concluded the errors were immaterial thus not requiring a restatement of historical information. We also concluded that correcting the cumulative effect of the errors in the second quarter of 2015 via a larger impairment charge would materially misstate the second quarter 2015 financial statements. However, based on a reassessment of the effectiveness of our internal controls over financial reporting, we concluded that there was a material weakness as of December 31, 2014 related to a deficiency in the level of training in performing the control over the full cost ceiling test write-down impairment calculation, specifically related to evaluating and correctly accounting for the treatment of tax amounts associated with the calculation. Accordingly, we amended both our 2014 Form 10-K (“2014 10-K/A”) and Form 10-Q for the period ended March 31, 2015 (“2015 Form 10-Q/A) to reflect this material weakness. In connection with amending our 2014 Form 10-K we corrected the errors by recording an adjustment to opening retained earnings as of January 1, 2012 equal to the cumulative amount of the errors attributable to periods prior to 2012, and then revised the presentation of the subsequent periods ending December 31, 2012, 2013 and 2014 and March 31, 2015. • Please provide us with your qualitative and quantitative assessment of materiality which supports a conclusion that the year ended December 31, 2012 adjustments were not material to your year ended December 31, 2012 financial statements. Further, reference is made to Amendment No. 1 to Form 10-Q for the quarterly period ended March 31, 2015. Please provide a similar analysis for your conclusion that the three months ended March 31, 2015 adjustments were not material to your three months ended March 31, 2015 financial statements. In evaluating the errors for the year ended December 31, 2012, and for the three months ended March 31, 2015, and in concluding that the errors were not material to the year ended December 31, 2012 financial statements or the three months ended March 31, 2015 financial