<PAGE>
Rule No. 424B5
Registration No. 33-54329
PROSPECTUS SUPPLEMENT
(To Prospectus dated July 13, 1994)
$15,000,000
BLACK HILLS CORPORATION
FIRST MORTGAGE BONDS
6 1/2% SERIES AD DUE 2002
----------------
INTEREST PAYABLE JANUARY 15 AND JULY 15
----------------
The First Mortgage Bonds (the "Offered Bonds") may not be redeemed prior to
their maturity and do not provide for any sinking fund. The Company has agreed
not to request the application of any Trust Moneys toward the redemption of
the Offered Bonds. See "Certain Terms of the Offered Bonds" in this Prospectus
Supplement and "Description of the Offered Bonds" in the accompanying
Prospectus.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Underwriting
Price to Discounts and Proceeds to
Public (1) Commissions (2) Company (1)(3)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Offered Bond . . . . . . . . . . . . . . . . . . . . . . . . . 100% .625% 99.375%
- -----------------------------------------------------------------------------------------------------------------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,000,000 $93,750 $14,906,250
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from July 14, 1995.
(2) See "Underwriting."
(3) Before deducting estimated expenses of $66,500 payable by the Company.
----------------
The Offered Bonds are offered by the Underwriter, subject to prior sale,
when, as and if delivered to and accepted by the Underwriter, and subject to
its right to reject orders in whole or in part. It is expected that delivery
of the Offered Bonds will be made in New York City on or about July 14, 1995.
----------------
PAINEWEBBER INCORPORATED
----------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS JULY 11, 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
HEREBY OFFERED AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
DOCUMENTS INCORPORATED BY REFERENCE
Reference is made to "Incorporation of Certain Documents by Reference" in
the accompanying Prospectus. At the date of this Prospectus Supplement, the
Incorporated Documents include, in addition to those listed in the Prospectus,
the Company's Annual Report on Form 10-K for the year ended December 31, 1994,
the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1995, and the Company's current reports on Form 8-K dated February 3, 1995,
June 1, 1995 and June 30, 1995.
----------------
RECENT FINANCIAL DATA
(IN THOUSANDS OF DOLLARS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
12 MONTHS ENDED
-----------------------
MARCH 31, MARCH 31,
1995 1994
RESULTS OF OPERATIONS: ---------- ----------
<S> <C> <C>
REVENUES:
Electric.................................................... $104,909 $99,385
Coal Mining................................................. 28,353 29,682
Oil and Gas................................................. 12,419 11,591
-------- --------
$145,681 $140,658
======== ========
NET INCOME:
Electric.................................................... $12,818 $11,371
Coal Mining................................................. 9,742 10,583
Oil and Gas................................................. 1,445 688
-------- --------
$24,005 $22,642
======== ========
EARNINGS PER SHARE............................................ $1.67 $1.62
RATIO OF EARNINGS TO FIXED CHARGES/(1)/....................... 4.0 4.6
</TABLE>
<TABLE>
<CAPTION>
AS OF
MARCH 31,
1995 %
---------- -----
<S> <C> <C>
CAPITAL STRUCTURE:
Long-Term Debt................................................. $158,368 47.2
Common Equity.................................................. 176,810 52.8
-------- -----
$335,178 100.0
======== =====
CURRENT MATURITIES OF LONG-TERM DEBT AND SHORT-TERM DEBT......... $4,260 --
</TABLE>
/(1)/Ratio of Earnings to Fixed Charges for year ending December 31, 1994 and
for the three-month period ending March 31, 1995 were 4.3 and 3.4,
respectively.
S-2
<PAGE>
CERTAIN TERMS OF THE OFFERED BONDS
The following information concerning the Offered Bonds supplements and
should be read in conjunction with the statements under "Description of the
Offered Bonds" in the accompanying Prospectus.
GENERAL
The Offered Bonds will be issued as a new series of the Company's First
Mortgage Bonds under the Mortgage, as supplemented and amended by various
supplemental indentures, including the Thirty First Supplemental Indenture
dated July 1, 1995 relating to the Offered Bonds.
INTEREST, MATURITY AND PAYMENT
The Offered Bonds are to bear interest from July 14, 1995, at the rate shown
in their title, payable January 15 and July 15 in each year, commencing
January 15, 1996, and are to be due July 15, 2002. Interest will be paid to
the persons in whose names the Offered Bonds are registered at the close of
business on January 1 or July 1 (whether or not a business day) next preceding
the interest payment date, except for defaulted interest and unmatured accrued
interest on the Offered Bonds called for redemption on a date other than an
interest payment date. Principal and interest are payable in New York City.
REDEMPTION
The Offered Bonds may not be redeemed either by the Company or the Holder
prior to maturity.
The Company has agreed not to request the Trustee to apply any Trust Moneys
deposited with the Trustee to the redemption of the Offered Bonds prior to
maturity. See--DESCRIPTION OF THE OFFERED BONDS--Withdrawal of Trust Moneys or
Retirement of Bonds with Trust Moneys in the accompanying Prospectus.
ADOPTION OF TWENTY EIGHTH SUPPLEMENTAL INDENTURE
The accompanying Prospectus under "DESCRIPTION OF THE OFFERED BONDS"
describes the Bonds as Consent Bonds under which the Holders of the Bonds are
deemed to have consented to the adoption of the Twenty Eighth Supplemental
Indenture, referenced as the "Proposed Supplement" in the Prospectus. Since
the date of the Prospectus, the Company has issued sufficient Consent Bonds
under the Mortgage and has otherwise received sufficient consents from other
Bondholders to constitute the consent of over 66-2/3 percent in principal of
all outstanding Bonds for the adoption of the Twenty Eighth Supplemental
Indenture. Thereupon, upon application of the Company and agreement of the
Trustee, the Twenty Eighth Supplemental Indenture was adopted as of March 15,
1995, and the Mortgage was amended pursuant to the provisions thereof.
The material amendments of the Mortgage included in the Twenty Eighth
Supplemental Indenture are now in effect as described in the accompanying
Prospectus as becoming effective when the Proposed Supplement is adopted.
USE OF PROCEEDS
The proceeds from the sale of the Offered Bonds will be used to redeem all
of the issued and outstanding First Mortgage Bonds, Series O, 8.05%, due June
1, 1999, and Series X, 8.375%, due October 1, 1998, and to finance capital
expenditures, including the construction of Neil Simpson Unit #2, an 80 MW
coal-fired electric plant which has been constructed adjacent to Wyodak
Resources' coal mine near Gillette, Wyoming, and is now being performance
tested for expected commercial operation beginning August 1, 1995, or to repay
outstanding short-term borrowings for such purposes and for general corporate
purposes. The average interest rate of the short-term indebtedness expected to
be discharged with the proceeds is 7.37 percent as of July 11, 1995, and the
maturity of such indebtedness is less than 12 months.
S-3
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement") between the Company and PaineWebber
Incorporated (the "Underwriter"), the Company has agreed to sell to the
Underwriter and the Underwriter has agreed to purchase the Offered Bonds.
In the Underwriting Agreement, the Underwriter has agreed, subject to the
terms and conditions set forth therein, to purchase all of the Offered Bonds
if any Offered Bonds are purchased. The Company has been advised by the
Underwriter that the Underwriter proposes initially to offer the Offered Bonds
to the public at the public offering price set forth on the cover page of this
Prospectus Supplement, and to certain dealers at such price less a concession
not in excess of .375% of the principal amount. The Underwriter may allow, and
such dealers may reallow, a discount not in excess of .25% of the principal
amount to certain other dealers. After the initial public offering the public
offering price, concession and discount may be changed.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
There is at present no trading market for the Offered Bonds. The Underwriter
is not obligated to make a market in the Offered Bonds, and the Company cannot
predict whether a trading market for the Offered Bonds will develop or, if
developed, will be maintained.
S-4
<PAGE>
PROSPECTUS
$100,000,000
BLACK HILLS CORPORATION
FIRST MORTGAGE BONDS
-----------
Black Hills Corporation (the "Company") intends from time to time or at one
time, to issue up to $100,000,000 aggregate principal amount of its First
Mortgage Bonds in one or more series, on terms for each series to be determined
when the agreement to sell is made or at the time of sale, as the case may be.
For each issue of First Mortgage Bonds for which this Prospectus is being
delivered (the "Offered Bonds"), there will be an accompanying Prospectus
Supplement ("Prospectus Supplement") that will set forth the series
designation, aggregate principal amount of the issue, maturity, rates and times
of payment of interest, and redemption terms, if any, credit enhancement terms,
if any, and other special terms of each series of Offered Bonds offered
thereby, as well as any plans for application to list the Offered Bonds on a
stock exchange.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
The Company may sell the Offered Bonds through underwriters, dealers or
agents, or directly to one or more purchasers. The applicable Prospectus
Supplement will set forth the names of underwriters, dealers or agents, if any,
any applicable commissions or discounts and the net proceeds to the Company
from any such sale. See "Plan of Distribution" herein.
-----------
THE DATE OF THIS PROSPECTUS IS JULY 13, 1994.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and in accordance therewith
files reports and other information with the Securities and Exchange
Commission ("Commission"). Such reports and other information may be inspected
and copied at the offices of the Commission at 450 Fifth Street, N.W.,
Washington, DC 20549, Seven World Trade Center, New York, New York 10048 and
500 West Madison Street, Chicago, Illinois 60661. Copies of this material can
also be obtained at prescribed rates from the Public Reference Section of the
Commission at its principal office at 450 Fifth Street, N.W., Washington, DC
20549. In addition, the Common Stock of the Company is listed on The New York
Stock Exchange, 20 Broad Street, New York, NY 10005, where reports and other
information concerning the Company may be inspected.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference into this Prospectus.
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1993.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994.
3. The Company's current report on Form 8-K dated June 7, 1994.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference in this Prospectus and to be made a part hereof from
the date of filing of such documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement herein or in
any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all of the documents referred to above which have been or may be incorporated
in this Prospectus by reference, other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference. Requests for such
copies should be directed to: Treasurer's Office, Black Hills Corporation,
P.O. Box 1400, Rapid City, SD 57709, or telephone (605) 348-1700.
THE COMPANY
The Company was incorporated under the laws of South Dakota in 1941 under
the name Black Hills Power and Light Company. In 1986 the Company changed its
name to Black Hills Corporation; however, the Company continues to operate its
investor-owned utility operations under the name of Black Hills Power and
Light Company. The Company's wholly-owned subsidiary, Wyodak Resources
Development Corp. ("Wyodak Resources"), a Delaware corporation, and Wyodak
Resources' wholly-owned subsidiary, Western Production Company, a Wyoming
corporation, are engaged in the business of coal mining and oil and gas
production, respectively.
2
<PAGE>
USE OF PROCEEDS
The proceeds from the sale of the Offered Bonds will be used to finance
capital expenditures, including the construction of Neil Simpson Unit #2, an
80 MW coal-fired electric generating plant now under construction adjacent to
Wyodak Resources' coal mine near Gillette, Wyoming, and to repay outstanding
short-term borrowings for such purposes and for general corporate purposes,
including the possible redemption, in whole or in part of the Company's
existing Bonds or other debt securities. The average interest rate of the
short-term indebtedness expected to be discharged with the proceeds is 4.8
percent as of May 31, 1994, and the maturity of such indebtedness is less than
12 months.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for each of the periods
indicated is as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 12 MONTHS ENDED QUARTER ENDED
--------------------------------- MARCH 31, 1994 MARCH 31, 1994
1989 1990 1991 1992 1993 --------------- --------------
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
5.1 5.0 4.6 4.6 4.6 4.6 4.8
</TABLE>
The ratio of earnings to fixed charges represents, on a pretax basis, the
number of times earnings cover fixed charges. Earnings consist of net income
to which has been added fixed charges and taxes based on income of the Company
and its subsidiaries. Fixed charges consist of interest charges and an
interest factor in rentals.
DESCRIPTION OF THE OFFERED BONDS
GENERAL
The Offered Bonds will be issued in one or more series as fully registered
bonds, without coupons, under an Indenture of Mortgage and Deed of Trust,
dated as of September 1, 1941, between the Company and Chemical Bank (the
"Trustee," successor by merger to the original and succeeding Trustees). The
Indenture of Mortgage and Deed of Trust, as supplemented by twenty-seven
Supplemental Indentures, is herein referred to as the "Mortgage." The Mortgage
and the twenty-seven Supplemental Indentures are filed with the Securities and
Exchange Commission with either the Registration Statement of which this
Prospectus is a part or with other previously filed registration statements as
referenced.
The summaries of the Mortgage herein contained do not purport to be complete
and are subject to the detailed provisions of the Mortgage. Capitalized terms
used herein which are not otherwise defined in this Prospectus shall have the
meanings ascribed thereto in the Mortgage. Whenever particular provisions of
the Mortgage or terms defined therein are referred to, such provisions or
definitions are incorporated by reference as a part of the statements made
herein, and such statements are qualified in their entirety by such reference.
References to article and section numbers in this description of the Offered
Bonds, unless otherwise indicated, are references to articles and section
numbers of the Mortgage.
Reference is made to the Prospectus Supplement relating to any particular
series of Offered Bonds and any supplement thereto for the following terms,
which will be determined at the time or times of sale: (i) the designation of
such series; (ii) the aggregate principal amount of the Offered Bonds of such
series; (iii) the price (expressed as a percentage of the principal amount) at
which such Offered Bonds will be issued; (iv) the date(s) on which such
Offered Bonds mature; (v) the rate(s) per annum at which such Offered Bonds
will bear interest; (vi) the date(s) from which such interest will accrue, the
dates on which such interest will be payable, the date(s) on which such
payments will commence, and the record dates for such payments; (vii) the
terms, if any, upon which such Offered Bonds will be redeemable, whether at
the option of the Company or pursuant to any mandatory redemption provisions,
including without limitation redemption prices and any provisions for call
protection; and (viii) any other special terms.
3
<PAGE>
CONSENT BONDS--PROPOSED SUPPLEMENT
The Company has prepared and filed as an exhibit to the Registration
Statement of which this Prospectus is a part the Proposed Twenty Eighth
Supplemental Indenture ("Proposed Supplement"), undated and unsigned. If
adopted, the Proposed Supplement would amend the Mortgage in various respects
as summarized in this Prospectus. The summaries of the Proposed Supplement
herein do not purport to be complete and are subject to the detailed
provisions of the Proposed Supplement. Whenever particular provisions of the
Proposed Supplement or terms defined therein are referred to, such provisions
or definitions are incorporated by reference as a part of the statements made
herein, and such statements are qualified in their entirety by such reference.
The Proposed Supplement will not go into effect until the Company and the
Trustee execute the same. Under Article Eighteen of the Mortgage, the Trustee
does not have the authority to execute the Proposed Supplement without the
affirmative consent of the Holders of not less than 66 2/3 percent in
principal amount of the Bonds outstanding. The consent of the Bondholders is
manifested either at a meeting of Bondholders or, as provided by Section 18.11
of the Mortgage, by written consent without the necessity of holding a meeting
of the Bondholders.
The Company has determined that the Supplemental Indenture for each series
of the Offered Bonds and all additional Bonds hereafter issued under the
Mortgage until such time that the Proposed Supplement has been adopted will
include a consent provision to be substantially worded as follows:
THE HOLDERS, INCLUDING ANY SUCCESSOR HOLDERS, OF THE SERIES BONDS
TO BE ISSUED UNDER THE TERMS OF THIS SUPPLEMENTAL INDENTURE, BY BECOMING
SUCH HOLDERS SHALL BE DEEMED TO HAVE CONSENTED TO THE TWENTY EIGHTH
SUPPLEMENTAL INDENTURE ("PROPOSED SUPPLEMENT"), A COPY OF WHICH IS
ATTACHED HERETO AS EXHIBIT A. THIS PROVISION DOES HEREBY CONSTITUTE A
WRITTEN CONSENT OF THE HOLDERS, INCLUDING ALL SUCCESSOR HOLDERS, OF THE
SERIES BONDS TO THE EXECUTION AND ADOPTION OF THE PROPOSED
SUPPLEMENT UNDER THE PROVISIONS OF SECTION 18.11 OF THE INDENTURE, AND
SUCH CONSENT IS RECEIVED BY THE TRUSTEE AS A CONSENT FOR THE TRUSTEE TO
EXECUTE THE PROPOSED SUPPLEMENT IN LIEU OF THE HOLDING OF A MEETING OF
BONDHOLDERS PURSUANT TO ARTICLE EIGHTEEN OF THE INDENTURE.
At such time that the aggregate of (i) the principal amount of the Offered
Bonds outstanding and all additional Bonds hereafter issued ("Consent Bonds")
and (ii) the principal amount of all Bonds outstanding issued prior to said
date, the Holders of which have consented in writing to the adoption of the
Proposed Supplement, will equal or exceed 66 2/3 percent in principal amount
of all Bonds outstanding under the Mortgage at such time, the Trustee and the
Company will execute the Proposed Supplement causing the Twenty Eighth
Supplemental Indenture to be effective; provided, in case one or more but less
than all of the series of Bonds outstanding at such time are to be affected by
the Proposed Supplement, the Trustee may not execute the Proposed Supplement
until the Holders of 66 2/3 percent of each of the series affected have
approved the Proposed Supplement. Assuming the expected amount of Consent
Bonds are issued and certain existing Bonds are redeemed, the Company believes
that the Consent Bonds will constitute over 66 2/3 percent in principal of all
outstanding Bonds by March 1, 1998, even without any of the existing
Bondholders consenting to the Proposed Supplement. By that time, it is
expected that the Proposed Supplement will affect all outstanding issues of
Bonds, and the Company and Trustee will execute the Proposed Supplement, and
the Mortgage will be amended accordingly. If sufficient consents are received
from existing Bondholders, the Proposed Supplement will be executed and become
effective at an earlier date.
Throughout this Description of the Offered Bonds, references will be made to
the Mortgage as it exists at the date of this Prospectus and how the Mortgage
will be amended by the Proposed Supplement if adopted.
PAYMENT OF BONDS; TRANSFERS; EXCHANGES
Except as may be provided in the applicable Prospectus Supplement, interest
on each Offered Bond payable on each interest payment date will be paid by
check mailed to the registered holder of such Offered Bond on the record date
related to such interest payment date; provided, interest payable at maturity
will be paid to the person to whom principal is paid.
4
<PAGE>
Principal of and premium, if any, and interest on the Offered Bonds due at
maturity will be payable upon presentation of the Bonds at the principal
office of the Trustee which has been designated by the Company as its office
or agency for such payment.
The transfer of Offered Bonds will be registered, and Bonds may be exchanged
for other Bonds, upon the surrender thereof at the principal office of the
Trustee which has been designated by the Company as its office or agency for
such purposes. Unless otherwise indicated in the applicable Prospectus
Supplement, no service charge will be made for any transfer or exchange other
than any tax or other governmental charge incident thereto.
WITHDRAWAL OF TRUST MONEYS OR RETIREMENT OF BONDS WITH TRUST MONEYS
Under the Mortgage, cash (Trust Moneys) is deposited with the Trustee under
certain conditions, including the taking of property by governmental
authorities under the right of eminent domain, the deposit of cash for the
release of property, the deposit of cash in exchange for the issuance of new
Bonds, and the deposit of the proceeds of insurance. The Mortgage provides
that the Company, under certain conditions, may withdraw these Trust Moneys by
certifying Property Additions or by depositing previously issued Bonds.
(Sections 8.02, 8.03 and 8.04 of the Mortgage.) The Company may cause the
Trustee under certain conditions to apply Trust Moneys in payment of the
principal of Bonds upon redemption or upon tender. (Section 8.05 of the
Mortgage.) Trust Moneys from insurance proceeds may be withdrawn for the
purpose of repairing, restoring or replacing the property destroyed. (Section
8.06 of the Mortgage.) Trust Moneys may further be withdrawn for the purposes
of paying the Company's income tax obligations arising from the disposition of
properties or securities. (Section 8.07 of the Mortgage.)
Under the Mortgage, the Trustee is obligated to apply Trust Moneys for the
redemption of Bonds if the Trustee holds Trust Moneys in excess of $25,000,
exclusive of monies received from the proceeds of insurance, and the amount of
Trust Moneys on deposit with the Trustee exceeded such amount at all times
during the preceding two years. The Trustee is also obligated to apply Trust
Moneys derived from the sale and release of, or the taking by government
through eminent domain or purchase by a public authority of either the entire
Trust Estate or substantially all of the business of distributing electricity
in Rapid City, South Dakota toward the redemption of Bonds. The Trustee is
obligated to apply the Trust Moneys pro rata as between the several series of
Bonds then outstanding in the ratio of the respective aggregate principal
amounts in each such series outstanding at the time. Redemption shall be made
in such manner and upon such notice as may be specified in respect of the
Bonds of each series or the Mortgage or applicable supplements thereto.
(Section 8.08(a), as amended by Section 1.03 of the Fifteenth Supplemental
Indenture, and Section 8.08(b) of the Mortgage.)
Section 1.15 of the Proposed Supplement would amend Section 8.08(b) of the
Mortgage to delete the provision requiring the proceeds of a public taking of
the Company's electric business at Rapid City, South Dakota to be applied
toward the redemption of Bonds.
REDEMPTION OF THE OFFERED BONDS
Any terms for the optional or mandatory redemption of Offered Bonds will be
set forth in the Prospectus Supplement. Except as shall otherwise be provided
in the applicable Prospectus Supplement with respect to Offered Bonds
redeemable at the option of the Holder, Offered Bonds will be redeemable only
upon notice by mail not less than 30 days prior to the date fixed for
redemption, and, if less than all the Offered Bonds of a series are to be
redeemed, the particular Offered Bonds to be redeemed will be selected by such
method as shall be provided for in the particular series, or in the absence of
any such provision, by lot as the Trustee deems fair and appropriate. (Section
10.03 of the Mortgage.)
SECURITY
The Offered Bonds, together with all other Bonds now or hereafter issued
under the Mortgage, will be secured by the Mortgage, which constitutes a first
mortgage lien on substantially all of the present properties
5
<PAGE>
of the Company (except as stated below), subject to Permitted Encumbrances as
defined at Section 4.01E of the Mortgage. Excepted Property (defined in the
Sixteenth Granting Clause of the Mortgage) is not subject to the lien of the
Mortgage and includes all cash and securities, all contracts (other than
contracts for the purchase or exchange of electric energy or for the making of
connections for exchange of energy or service, contracts and rights for the
crossing of railroad rights-of-way, and all joint pole contracts and rights,
agreements and understandings for the use of the property, facilities and
rights of way of other public utilities), rents, incomes or profits,
electricity, materials, supplies and merchandise offered for sale in the
ordinary course of business, fuel and other consumables; and motor vehicles;
provided, the Company may cause any of such Excepted Property to become
subject to the lien of the Mortgage. The Company's 20 percent interest in the
330 MW coal-fired Wyodak Plant near Gillette, Wyoming is not now subject to
the Mortgage. (Article One of the Eighteenth Supplemental Indenture.) However,
the Company will certify its interest in the Wyodak Plant as Property
Additions for the first series of Bonds to be issued under this Prospectus and
thus subject such interest to the lien of the Mortgage.
The Proposed Supplement, if adopted, would delete the Eleventh, Twelfth and
Thirteenth Granting Clauses of the Mortgage and thereby remove from the lien
of the Indenture all contracts and agreements, all leases and all franchises.
(Section 1.01 of the Proposed Supplement.) The Proposed Supplement would also
amend the definition of Excepted Property in the Sixteenth Granting Clause of
the Mortgage to except certain additional property from the lien of the
Mortgage, including (i) all property not used in the electric utility
business, (ii) all permits, licenses, franchises and rights granted by
governmental entities, (iii) all movable equipment and parts used in
connection therewith, (iv) all office furniture and equipment, communications
equipment and computer equipment, (v) all minerals, crops and timber harvested
or extracted from land and (vi) all leasehold interests. (Section 1.03 of the
Proposed Supplement.)
The Trustee has a lien for its compensation, expenses and indemnity on the
Trust Estate and the proceeds thereof prior to the lien of the Bonds. (Section
15.02(d) of the Mortgage.)
ISSUANCE OF ADDITIONAL BONDS
Requirements for the issuance of additional bonds. The Mortgage provides for
no limitation on the amount of Bonds which may be issued thereunder.
Additional Bonds of any series may be issued from time to time on the basis
of: (i) 60 percent of qualified Property Additions after adjustments to offset
retirements; (ii) 100 percent of previously issued Bonds retired except when
otherwise provided by the Supplemental Indenture authorizing the retired Bonds
and (iii) deposits of cash. With certain exceptions in the case of (ii) and
(iii) above, the issuance of Additional Bonds is subject to Certifiable Net
Earnings being at least equal to two times annual Interest Charges on Long-
Term Debt of the Company for a period of 12 consecutive months within the 15
months prior to the certification. (Paragraph F of Section 4.02 as amended by
Section 1.04 of the Nineteenth Supplemental Indenture.)
The Proposed Supplement would increase from 60 percent to 70 percent the
principal amount of qualified Property Additions that may be used for the
issuance of additional Bonds, would modify the test period for certification
of net earnings to 12 consecutive months out of the preceding 18 months prior
to certification, and would modify the definition of Property Additions and
the formula to determine the interest coverages. (Sections 1.04, 1.07, 1.09
and 1.12 of the Proposed Supplement.)
As of May 1, 1994 the Company had Unbonded Property Additions, including its
20 percent interest in the Wyodak Plant, of approximately $120,000,000 which
may be certified for the purpose of authorizing the issuance of additional
Bonds. These Unbonded Property Additions would allow the issuance of
$72,000,000 of additional Bonds under the present 60 percent requirement.
Taking into account the retroactive effect of Section 1.12 of the Proposed
Supplement explained in the following paragraph, the current Unbonded Property
Additions would allow the issuance of an additional $12,000,000 of Bonds after
the Proposed Supplement has been adopted.
Section 1.12 of the Proposed Supplement would add Section 4.04 to the
Mortgage that would in effect make retroactive to May 1, 1994 the deletion of
the 15 percent maintenance requirements as deleted by Section 1.16
6
<PAGE>
of the Proposed Supplement (See Particular Covenants of the Company--
Maintenance Requirements under DESCRIPTION OF THE OFFERED BONDS) and increase
the ability to issue new Bonds based on Property Additions from 60 percent to
70 percent. After the Proposed Supplement has been adopted, the Company will
be permitted to certify for the purpose of issuing new Bonds 70 percent of (i)
those Property Additions used to satisfy the 15 percent maintenance
requirements since May 1, 1994 and (ii) 14.285 percent of those Property
Additions used to issue new Bonds during the period commencing May 1, 1994 and
ending on the date the Proposed Supplement is adopted.
Property Additions. Under the Mortgage, Property Additions that may be
certified for the issuance of additional Bonds include only Electric
Properties which are used in the generation, transmission, distribution and
sale of electricity in the Electric Business located in the State of South
Dakota or states contiguous to South Dakota, but do not include any of the
Excepted Property (See Security under DESCRIPTION OF OFFERED BONDS), any
properties other than Electric Properties, any going concern value, goodwill
or franchises or governmental permits granted separate and distinct from the
property operated thereunder, any office supplies or office equipment, or any
Additions in the process of construction other than those that are actually
constructed or erected. (Section 4.01 of the Mortgage.) The Proposed
Supplement would change this definition to allow the Company to use all of its
real and personal property wherever located, including Excepted Property that
the Company elects to be included under the lien of the Mortgage, to be
certified as Property Additions for the purpose of issuing additional Bonds.
The Proposed Supplement would also broaden the use of construction work in
progress that may be used as Property Additions to include all construction
work in progress as recorded on the books of account of the Company under
generally accepted accounting principles. (Section 1.04 of the Proposed
Supplement.)
Earnings-to-Interest Coverage Requirements. To issue new Bonds through the
certification of Property Additions and as a condition to issue new Bonds in
exchange for retired Bonds with a lower interest rate than the new Bonds, the
Company's Certifiable Net Earnings must be equal to two times the Annual
Interest Charges on Long-Term Debt during a period of 12 consecutive months
out of the 15 months prior to the date of the application for the new Bonds.
(Subparagraph (3) of Paragraph F of Section 4.02 of the Mortgage as amended by
Section 1.04 of the Nineteenth Supplemental Indenture.) Certifiable Net
Earnings are determined by deducting from the total of the gross operating
revenues of the Company for the 12-month period all operating expenses and
provisions for depreciation and depletion, but excluding income taxes and
interest included in Interest Charges on Long-Term Debt. The depreciation,
obsolescence, depletion and property renewals and placements must be an amount
not less than the greater of the amount actually deducted on the books of the
Company in respect thereof or an amount equal to the excess of 15 percent of
Gross Utility Operating Revenues, less the cost of electric energy, over
actual expenditures for maintenance and repairs during the 12-month period.
(Paragraph O of Section 4.01 as last amended by Section 1.03 of Article One of
the Nineteenth Supplemental Indenture.)
Gross Operating Revenues include revenues from the operation of utility
property and Net Non-Operating Income includes other net income, including,
among other things, interest and designated income including dividends from
Subsidiaries and allowance for funds used during construction and other
miscellaneous non-operating income, but excluding profits or losses from the
sale of capital assets or securities. Interest Charges on Long-Term Debt
include interest on all outstanding Bonds under the Mortgage, the Bonds for
which the application is made, interest on any indebtedness secured by prior
lien to the Mortgage and interest from all other Funded Indebtedness.
(Paragraph F of Section 4.02 of the Mortgage as amended by Section 1.04 of the
Nineteenth Supplemental Indenture.) Funded Indebtedness generally includes all
indebtedness, whether secured or unsecured, having a final maturity more than
one year after the date of the creation thereof except that under certain
circumstances a Financing Lease Obligation would not be included. (Section
4.04 of the Seventeenth Supplemental Indenture as amended by Section 2.01 of
the Eighteenth Supplemental Indenture.)
The Proposed Supplement would retain the two times coverage ratio but would
adopt three substantive changes to the formula. Certifiable Net Earnings would
be determined without deducting depreciation, amortization, all interest and
all nonrecurring charges from earnings. Interest Charges on Long-Term Debt
7
<PAGE>
would become Interest Charges on Bonds and Prior Lien Debt so that Certifiable
Net Earnings would be required to be two times the aggregate amount of annual
interest charges on outstanding Bonds issued under the Mortgage, on Prior Lien
debt and on the new Bonds for which application is being made in order to meet
the coverage test after the adoption of the Proposed Supplement. The Proposed
Supplement also allows the 12-month test period to be chosen from the 18
months prior to the date of the application for the new Bonds rather than 15
months. (Section 1.09 of the Proposed Supplement.)
RELEASE OF PROPERTY FROM MORTGAGE
The Mortgage provides that the Company may from time to time sell or dispose
of property subject to the Mortgage which shall no longer be useful,
necessary, profitable or advantageous in the judicious management and
maintenance of the Trust Estate or in the conduct of the business of the
Company or which is taken or threatened to be taken by governmental
authorities and to cause such property to be released from the lien of the
Mortgage. To accomplish the release of any property above the value of $5,000,
the Company is required to deposit cash or purchase money obligations (any
such purchase money obligations may not exceed 70 percent of the Fair Value)
received in exchange for the property to be released or Property Additions
acquired by the Company within 60 days prior to the date of the application
for the release in an amount equal to the Fair Value of the property being
released. (Section 7.02 of the Mortgage.)
Section 1.13 of the Proposed Supplement is an extensive revision of Section
7.02 of the Mortgage. After its adoption, the Company will no longer have to
certify any reason for requesting property to be released from the lien of the
Mortgage. The Proposed Supplement would provide for three alternative ways for
the Company to obtain the release of property from the lien of the Mortgage.
Each way works independently of the other, and each is conditioned upon there
being no Event of Default.
First, the Proposed Supplement would permit property to be released from the
Mortgage if the Fair Value (as defined by the Proposed Supplement) of the
property to be released is less than 1 percent of the aggregate principal
amount of Bonds outstanding and all property released in any 12-month period
is less than 3 percent of the principal amount of Bonds outstanding. (amended
Section 7.02C of the Mortgage as set forth in Section 1.13 of the Proposed
Supplement.)
Second, any property may be released from the Mortgage under the Proposed
Supplement as long as the Fair Value of all of the Trust Estate remaining
equals or exceeds twenty-fourteenths (20/14) of the principal amount of Bonds
outstanding. (amended Section 7.02B of the Mortgage as set forth in Section
1.13 of the Proposed Supplement.)
Third, amended Section 7.02D as set forth in Section 1.13 of the Proposed
Supplement would substantially retain the present method to release property
from the Mortgage by posting Property Additions, cash or purchase money
obligations equal to the Fair Value of the property to be released; however,
the Proposed Supplement would remove the requirement that the Property
Additions must have been acquired 60 days prior to the date of the application
for the release. Accordingly, any unbonded Property Additions could be used
for the release of property from the Mortgage.
"Fair Value" in the Proposed Supplement is defined to allow the engineer
certifying Fair Value for the purpose of releasing property from the Mortgage
to determine such value without physical inspection by use of accounting and
engineering records and other data maintained by or available to the Company,
and the engineer must opine that the release will not materially adversely
affect the Electric Business and will not impair the security under the
Mortgage. (amended Section 7.02A and 7.02B(2) of the Mortgage as set forth in
Section 1.13 of the Proposed Supplement.)
8
<PAGE>
PARTICULAR COVENANTS OF THE COMPANY
The Mortgage contains certain covenants, agreements and warranties of the
Company, generally described as follows:
General. Included in the covenants, agreements and warranties of the Company
in the Mortgage are the agreement to punctually pay the principal and interest
on the Bonds and the agreement not to extend the time for payment of any
interest on the Bonds. The Company also covenants that it has good title to
the property described in the Granting Clauses except Permitted Encumbrances,
that the Company will pay all taxes and assessments, that the Company will
carry on and conduct the business and keep the property in repair and
maintained in good working order and condition and replace worn-out or injured
property, that the Company will not permit any increase of any Prior Lien
Obligation or default therein, that the Company will keep the Mortgage
properly recorded and the lien perfected, that the Company will deposit all
cash subject to being withdrawn as required by the Indenture, that the Company
will keep records of the accounts of the Bonds outstanding, that the Company
will keep books and records, and that the Company will file with the
Commission and deliver to the Trustee certain reports and that the Company
will certify compliance with the Mortgage annually. (Sections 9.01 through
9.05, 9.07 through 9.09, 9.11 through 9.14, 9.17 through 9.19 and 9.22 of the
Mortgage.) The covenants, agreements and warranties referenced in this
paragraph would not be modified by the Proposed Supplement.
Maintenance Requirements. Section 9.06 of the Mortgage requires the Company
to spend each year 15 percent of its Gross Operating Revenues (not including
the purchase of electric energy) on maintenance and repair of its physical
property. To the extent the Company does not spend the 15 percent, the Company
must deposit cash or certify Property Additions. Section 1.16 of the Proposed
Supplement would delete this Section 9.06, and if the Proposed Supplement is
adopted, the Company will no longer be required to certify the amount expended
for repair and maintenance nor post cash or certified Property Additions for
any deficiency. Provisions will remain in the Mortgage obligating the Company
to maintain its business and to keep its property in repair and good working
order and condition. (Section 9.13 and the first paragraph of Section 9.05 of
the Mortgage as will be amended by Section 1.02 of the Proposed Supplement.)
Subsidiaries Prohibited from Engaging in Electric Business. Section 9.20 of
the Mortgage prevents the Company from owning a Subsidiary (where a company
owns over 50 percent of the voting stock) that is engaged in the business of
generating, transmitting, distributing or selling electricity. Section 1.20 of
the Proposed Supplement would remove this restriction, thereby allowing the
Company to establish or acquire a Subsidiary that is engaged in the Electric
Business.
Restrictions on Investments in Affiliates and Subsidiaries. Section 9.20 of
the Mortgage prohibits the Company from making any loans or advances to any
Affiliate (an entity not a Subsidiary but controlled by the Company) of the
Company. Section 9.21 as last amended by Section 1.02 of the Twenty Fourth
Supplemental Indenture prohibits the Company from making any investment in a
Subsidiary in excess of 20 percent of the Company's book equity. Sections 1.20
and 1.21 of the Proposed Supplement would delete Sections 9.20 and 9.21 of the
Mortgage and thereby remove these covenants and restrictions.
Dividend Restrictions. Section 9.16 of the Mortgage as amended by Section
3.06 of the Third Supplemental Indenture, Section 1.06 of the Fifteenth
Supplemental Indenture, Section 1.02 of the Twenty Second Supplemental
Indenture and Section 1.01 of the Twenty Fourth Supplemental Indenture limit
the amount of dividends the Company may declare to the amount that (i) the sum
of $175,000, plus the Net Earnings of the Company Available for Dividends
accrued subsequent to October 31, 1948 plus the cash proceeds from the sale of
stock subsequent to April 30, 1949 exceeds (ii) the sum of the aggregate of
all Stock Payments declared subsequent to October 31, 1948, plus the aggregate
of all cash dividends and payments to any sinking funds made subsequent to
October 31, 1948 plus the aggregate of all investments or advances by the
Company to any Subsidiary. The current amount of retained earnings of the
Company available for dividend distributions as of March 31, 1994 is
$111,167,000.
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<PAGE>
The Proposed Supplement would delete the current dividend restriction and
substitute a provision that would permit dividends to be paid only out of
retained earnings and would prohibit payment of dividends if the Company is
insolvent or would become insolvent if the dividend were paid. (Section 1.19
of Proposed Supplement.)
Insured Loss Retention. The third sentence of Section 9.10 of the Mortgage
as previously amended by Section 1.04 of the Fifteenth Supplemental Indenture
requires the Company to deposit with the Trustee the proceeds of any insurance
for casualty losses that exceed $1,000,000. The Proposed Supplement at Section
1.17 would amend this provision and increase the $1,000,000 to $5,000,000.
Limits on Prior Liens. Subject to minor exceptions, Section 9.15 of the
Mortgage prevents the Company from acquiring any property subject to a lien
prior to the Mortgage (Prior Liens) allowing only purchase price liens not
exceeding 70 percent of the Cost of such property or the Fair Value thereof at
the time of acquisition, whichever is less. The provision further limits the
amount of all Prior Lien Obligations to an aggregate amount not exceeding 15
percent of outstanding Bonds issued under the Mortgage. Section 1.18 of the
Proposed Supplement would delete Section 9.15, and thereby remove these
restrictions.
MODIFICATION
The rights of Bondholders may be modified with the consent of holders of
66 2/3 percent of the Bonds, or, if less than all series of Bonds are adversely
affected, the consent of the holders of 66 2/3 percent of the Bonds of each of
the outstanding series which are adversely affected by the modification. No
modification of the term or alteration shall postpone due dates for payment of
interest or principal, reduce the principal or the rate of interest payable,
reduce the percentage of the principal amount of Bonds required for any
modification or alteration of the Mortgage or modify, without the written
consent of the Trustee, the rights, duties or immunities of the Trustee. The
Proposed Supplement would not affect this provision. (Sections 18.07 and 18.11
of the Mortgage.)
Without any consent of the holders of the Offered Bonds and other
Bondholders, the Company and the Trustee may modify the Mortgage in the
following respects:
(a) To correct descriptions of property and to mortgage additional
properties;
(b) To add to the conditions, limitations and restrictions on the issuance
of Bonds;
(c) To add to the covenants and agreements of the Company or to surrender
any rights or powers conferred upon the Company;
(d) To provide a sinking, amortization, improvement or other analogous fund
for the benefit of any of the Bonds;
(e) To provide the terms and conditions of the exchange of Bonds;
(f) To provide that the principal of Bonds of any series may be converted at
the option of the holders into capital stock or other securities;
(g) To modify the Mortgage in any respect; provided that the modification
shall become effective only when there are no Bonds outstanding
delivered prior to the execution of the supplemental indenture providing
the modification; and
(h) For any purpose not inconsistent with the terms of the Mortgage and
which shall not impair the security of the same or for the purpose of
curing any ambiguity or of curing, correcting, or supplementing any
defective or inconsistent provisions contained therein or in any
Supplemental Indenture. (Section 17.01 of the Mortgage.)
The Proposed Supplement would, in addition to the above powers, authorize
the Trustee to (i) provide for the procedures to permit the Company to
utilize, at its option, a noncertificated system of registration for
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<PAGE>
all or any series of the Bonds and (ii) enter into a restatement of the
Indenture without material modifications and including all amendments
contained in supplements that remain in effect, with authority to reorganize
materials, renumber and letter, include reference headings and remove language
no longer applicable and clarify any ambiguities in the Indenture as amended
without any approval of the Offered Bonds or other Bondholders. (Section 1.23
of the Proposed Supplement.)
EVENTS OF DEFAULT AND NOTICE
Events of Default are defined in the Mortgage as: default in payment of
principal; default for 30 days in payment of interest; default for 30 days in
violating the covenant on dividend restrictions; default for 60 days after
notice from the Trustee or 10 percent of the Bondholders in the observance of
any other covenant or condition; and certain events in bankruptcy, insolvency
or reorganization.
The Trustee or the holders of 25 percent of the Bonds may declare the
principal and interest due and payable on an Event of Default. (Section 12.01
of the Mortgage.) No Holder of Bonds may enforce the lien of the Mortgage
unless the holders of a majority in amount of the Bonds then outstanding have
requested the Trustee to act and offered it indemnity satisfactory to the
Trustee against the costs, expenses and liabilities to be incurred thereby and
the Trustee shall have failed to act. (Sections 12.04 and 15.02 of the
Mortgage.)
EVIDENCE OF COMPLIANCE WITH MORTGAGE PROVISIONS
Compliance with the Mortgage provisions is evidenced by written statements
of Company officers or persons selected or paid by the Company. In certain
cases, opinions of counsel and certification of an engineer, accountant,
appraiser or other expert (who in some cases must be independent) must be
furnished. The Company must give the Trustee an annual statement as to whether
or not the Company has fulfilled its obligations under the Mortgage throughout
the preceding calendar year.
DEFEASANCE
The Trustee shall satisfy and discharge the Mortgage upon the Company
furnishing the Trustee cash in trust at or before maturity sufficient to
discharge the entire indebtedness on the Bonds outstanding or to redeem the
Bonds, except that in lieu of cash the Company may deposit the Bonds
outstanding and certain other resolutions, certificates and opinions. (Article
Sixteen of the Mortgage.)
EXPERTS
The audited financial statements and supplemental financial statement
schedules included in the 1993 Annual Report of the Company on Form 10-K,
incorporated herein by reference, have been audited by Arthur Andersen & Co.,
Independent Public Accountants, as stated in their reports. The audited
financial statements and financial statement schedules referred to above have
been incorporated by reference herein in reliance upon the authority of said
firm as experts in giving said reports. Future financial statements of the
Company and the reports thereon of Arthur Andersen & Co. also will be
incorporated by reference in this prospectus in reliance upon the authority of
that firm as expert in giving those reports to the extent said firm has
audited those financial statements and consented to the use of their reports
thereon.
LEGAL OPINIONS
The legality of the securities offered hereby will be passed upon for the
Company by Morrill Brown & Thomas, 625 Ninth Street, Rapid City, South Dakota
57709, general counsel of the Company, and for any underwriter, dealer or
agent by Brown & Wood, One World Trade Center, New York, New York 10048-0557.
All matters pertaining to local law will be passed upon by Morrill Brown &
Thomas. As of May 1, 1994 members and associates of the firm of Morrill Brown
& Thomas owned approximately 8,100 shares of the common stock of the Company.
PLAN OF DISTRIBUTION
The Company may sell the Offered Bonds in any of three ways: (i) through
underwriters or dealers; (ii) directly to a limited number of purchasers or to
a single purchaser; or (iii) through agents. The Prospectus
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Supplement with respect to the Offered Bonds sets forth the terms of the
offering of the Offered bonds, including the name or names of any
underwriters, dealers or agents, the purchase price of such Offered Bonds and
the proceeds to the Company from such sale, any underwriting discounts and
other items constituting underwriters' compensation, any initial public
offering price and any discounts or concessions allowed or reallowed or paid
to dealers. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale, the Offered Bonds will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of the sale. The
underwriter or underwriters with respect to a particular underwritten offering
of Offered bonds are named in the Prospectus Supplement relating to such
offering and, if an underwriting syndicate is used, the managing underwriter
or underwriters are set forth on the cover page of such Prospectus Supplement.
Unless otherwise set forth in the Prospectus Supplement, the obligations of
the underwriters to purchase the Offered Bonds will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all
such Offered Bonds if any are purchased.
Offered Bonds may be sold directly by the Company or through agents
designated by the Company from time to time. The Prospectus Supplement sets
forth the name of any agent involved in the offer or sale of the Offered Bonds
in respect of which the Prospectus Supplement is delivered as well as any
commissions payable by the Company to such agent. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Offered Bonds from the Company at the public offering
price set forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Subject to certain conditions, the Company may agree to indemnify the
several underwriters or agents and their controlling persons against certain
liabilities, including liabilities under the 1933 Act arising out of or based
upon, among other things, any untrue statement or alleged untrue statement of
a material fact contained in the registration statement, this Prospectus, a
Prospectus Supplement or the incorporated documents or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. See the Prospectus Supplement.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON, UNDERWRITER, DEALER OR AGENT.
NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF
OR THEREOF. THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT DOES NOT CONSTITUTE
AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
12
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED
SECURITIES TO WHICH THEY RELATE. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Documents Incorporated by Reference........................................ S-2
Recent Financial Data ..................................................... S-2
Certain Terms of the Offered Bonds......................................... S-3
Adoption of Twenty Eighth Supplemental
Indenture................................................................. S-3
Use of Proceeds............................................................ S-3
Underwriting............................................................... S-4
PROSPECTUS
Available Information...................................................... 2
Documents Incorporated by Reference ....................................... 2
The Company................................................................ 2
Use of Proceeds............................................................ 3
Ratio of Earnings to Fixed Charges......................................... 3
Description of the Offered Bonds........................................... 3
Experts.................................................................... 11
Legal Opinions............................................................. 11
Plan of Distribution....................................................... 11
</TABLE>
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$15,000,000
BLACK HILLS CORPORATION
FIRST MORTGAGE BONDS
6 1/2% SERIES AD
DUE JULY 15, 2002
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PROSPECTUS SUPPLEMENT
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PAINEWEBBER INCORPORATED
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JULY 11, 1995
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