_____________________________________________________________________
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
11-K
ANNUAL
REPORT
PURSUANT
TO SECTION 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
_________________________________________________
For
the
fiscal year ended December 31, 2004
Commission
File Number 001-31303
BLACK
HILLS CORPORATION
RETIREMENT
SAVINGS PLAN
BLACK
HILLS CORPORATION
625
NINTH
STREET
PO
BOX
1400
RAPID
CITY, SOUTH DAKOTA 57709
______________________________________________________________________
|
Black
Hills Corporation Retirement Savings Plan
Financial
Statements for the Years Ended
December 31,
2004 and 2003, Supplemental
Schedule
as of December 31, 2004, and Report of
Independent
Registered Public Accounting Firm
|
BLACK
HILLS CORPORATION RETIREMENT SAVINGS PLAN
TABLE
OF CONTENTS
|
Page
|
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
1
|
|
FINANCIAL
STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2004 AND
2003:
|
|
|
Statements
of Net Assets Available for Benefits
|
2
|
|
Statements
of Changes in Net Assets Available for Benefits
|
3
|
|
Notes
to Financial Statements
|
4-6
|
|
SUPPLEMENTAL
SCHEDULE AS OF DECEMBER 31, 2004—
|
|
|
Schedule
H, Line 4i—Schedule of Assets (Held At End of Year)
|
8
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Plan
Administrator and Participants
Black
Hills Corporation Retirement Savings Plan
Rapid
City, South Dakota
We
have
audited the accompanying statements of net assets available for benefits of
the
Black Hills Corporation Retirement Savings Plan (the “Plan”) as of
December 31, 2004 and 2003, and the related statements of changes in
net
assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan’s management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Plan is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in
the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining,
on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In
our
opinion, such financial statements present fairly, in all material respects,
the
net assets available for benefits of the Plan as of December 31, 2004
and
2003, and the changes in net assets available for benefits for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.
Our
audit
was conducted for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedule of assets held as of
December 31, 2004, is presented for the purpose of additional analysis
and
is not a required part of the basic financial statements, but is supplementary
information required by the Department of Labor’s Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act
of
1974. This schedule is the responsibility of the Plan’s management. Such
schedule has been subjected to the auditing procedures applied in our audit
of
the 2004 basic financial statements and, in our opinion, is fairly stated in
all
material respects when considered in relation to the 2004 basic financial
statements taken as a whole.
DELOITTE
& TOUCHE LLP
Minneapolis,
Minnesota
June
15,
2005
|
BLACK
HILLS CORPORATION RETIREMENT SAVINGS PLAN
|
|||||||
|
STATEMENTS
OF NET ASSETS AVAILABLE FOR BENEFITS
|
|||||||
|
DECEMBER
31, 2004 AND 2003
|
|||||||
|
2004
|
2003
|
||||||
|
CASH
|
$
|
63,860
|
$
|
409
|
|||
|
PARTICIPANT-DIRECTED
INVESTMENTS—At market value
|
43,451,093
|
37,000,373
|
|||||
|
CONTRIBUTIONS
RECEIVABLE:
|
|||||||
|
Employee
|
-
|
94,501
|
|||||
|
Employer
|
-
|
41,308
|
|||||
|
INVESTMENT
TRANSACTIONS PENDING
|
18,186
|
1,452
|
|||||
|
SETTLEMENTS
PAYABLE
|
-
|
(148,351
|
)
|
||||
|
NET
ASSETS AVAILABLE FOR BENEFITS
|
$
|
43,533,139
|
$
|
36,989,692
|
|||
|
See
notes to financial statements.
|
|||||||
-
2
-
|
BLACK
HILLS CORPORATION RETIREMENT SAVINGS PLAN
|
|||||||
|
STATEMENTS
OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
|
|||||||
|
YEARS
ENDED DECEMBER 31, 2004 AND 2003
|
|||||||
|
2004
|
2003
|
||||||
|
NET
ASSETS AVAILABLE FOR BENEFITS—
|
|||||||
|
Beginning
of year
|
$
|
36,989,692
|
$
|
28,838,806
|
|||
|
INCREASES
(DECREASES) DURING THE YEAR:
|
|||||||
|
Participant
contributions
|
3,628,243
|
3,615,855
|
|||||
|
Employer
matching contributions
|
1,376,414
|
1,382,581
|
|||||
|
Investment
interest and dividends
|
1,083,743
|
1,052,910
|
|||||
|
Net
realized and unrealized gain in fair value of investments
|
2,516,545
|
4,714,352
|
|||||
|
Administrative
expenses
|
(10,160
|
)
|
(8,070
|
)
|
|||
|
Distributions
to participants
|
(2,112,087
|
)
|
(2,509,735
|
)
|
|||
|
Other
|
60,749
|
(97,007
|
)
|
||||
|
Net
increase during the year
|
6,543,447
|
8,150,886
|
|||||
|
NET
ASSETS AVAILABLE FOR BENEFITS—End of year
|
$
|
43,533,139
|
$
|
36,989,692
|
|||
|
See
notes to financial statements.
|
|||||||
-
3
-
BLACK
HILLS CORPORATION RETIREMENT SAVINGS PLAN
NOTES
TO FINANCIAL STATEMENTS
YEARS
ENDED DECEMBER 31, 2004 AND 2003
|
1.
|
DESCRIPTION
OF THE PLAN
|
The
following is not a comprehensive description of the Black Hills Corporation
Retirement Savings Plan (the “Plan”) and, therefore, does not include all
situations and limitations covered by the Plan. Participants should refer to
the
plan agreement for more complete information.
General—The
Plan
is a defined contribution plan for eligible employees of Black Hills Corporation
and certain subsidiary companies (the “Company”). The eligible employees may
have a percentage of their compensation withheld and contributed to the Plan,
subject to limitations, as defined. The Plan is subject to the provisions of
the
Employment Retirement Income Security Act of 1974 (“ERISA”) and is designed to
comply with the provisions of Section 401(k) of the Internal Revenue Code (the
“Code”).
Merrill
Lynch serves as the asset custodian and recordkeeper. The Plan is administered
by the Black Hills Corporation Benefits Committee (the “Committee”). The
Committee is the trustee of the Plan.
Plan
Expenses—Administrative
fees of approximately $47,675 and $58,604 were paid by the Company in 2004
and
2003, respectively. Administrative expenses for loan fees are paid by the
individual plan participants.
Eligibility
and Vesting—Employees
are eligible to participate in the Plan on the first day of
employment.
Participants
are immediately vested in the value of their pretax salary reduction
contributions. Participants vest 20% per year in employer matching contributions
until reaching five years of service. At that time, participants are 100% vested
in employer matching contributions. Participants also become fully vested in
employer matching contributions if their employment with the Company is
terminated due to retirement at or after attainment of age 65, total and
permanent disability, or death.
Forfeitures
from participants who have terminated from the Plan prior to attaining 100%
vesting rights are used to reduce the Company’s annual matching contributions.
During 2004 and 2003, forfeitures of $99,551and $61,878, respectively, were
used
to reduce the Company’s annual matching contribution.
Contributions—The
maximum percentage of compensation an employee may contribute to the Plan is
20%, with an annual maximum contribution of $13,000 for 2004, as provided by
the
Code. There is no limit to how often participants may change their contribution
percentages. Amounts contributed are invested at the discretion of plan
participants in any of the 21 investment options or individual investments
as
directed by the participant.
Effective
January 1, 2000 (May 1, 2000, for employees covered by a collective
bargaining agreement), the Plan was amended to include a dollar-for-dollar
company matching contribution, up to a maximum of 3% of an individual
participant’s compensation. Effective April 1, 2001, there is an automatic
enrollment provision in which eligible employees who are employed on or after
April 1, 2001, shall be deemed to have made an automatic election to
participate in the Plan at a rate of 3%.
-
4
-
Rollover
Contributions—The
Plan
received $142,824 and $238,563 in rollover transfers from other qualified plans
in 2004 and 2003, respectively, which are included in participant contributions
on the statements of changes in net assets available for benefits.
Participant
Loans—The
Plan
contains a loan provision that allows participants to borrow a minimum of $1,000
and a maximum equal to the lesser of $50,000 or 50% of their vested account
balances at an interest rate of 1% over the prime interest rate and to repay
the
loan through payroll deductions, with a maximum repayment period of five years.
During 2004 and 2003, interest rates on outstanding participant loans ranged
from 5.0% to 10.5%. Loans are prohibited for terminated employees.
Distributions
to Participants—Employee
account balances are distributable upon retirement, disability, death,
termination from the Company, or hardship. Upon the occurrence of one of these
events, a participant (or the participant’s beneficiary in the case of death)
may receive his or her account balance as a lump-sum payment or as installment
payments over a period of no more than 10 years.
Amendments
and Termination—The
Company reserves the right to amend or terminate the Plan at any time. Upon
termination of the Plan, participants become 100% vested, and all assets will
be
distributed among the participants in accordance with plan
provisions.
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES
|
Basis
of Accounting—The
financial statements have been prepared using the accrual basis of
accounting.
Investment
Valuation and Income Recognition—Investments
of the Plan are stated at market value. Shares of registered investment
companies are valued at quoted market prices, which represent the net asset
value of shares held by the Plan at year-end. Realized gains and losses on
sales
of investments represent the difference between the net proceeds from the sale
of investments and their beginning-of-year market value. Unrealized appreciation
or depreciation of the investments represents changes in the market value of
investments.
Purchases
and sales of securities are reflected on a trade-date basis. Interest income
is
recognized when earned. Dividend income is recorded on the ex-dividend
date.
Use
of Estimates—The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of net assets
available for benefits at the date of the financial statements and the reported
amounts of changes in net assets available for benefits during the reporting
period. Ultimate results could differ from those estimates.
|
3.
|
INVESTMENTS
|
The
investment options of the Plan at December 31, 2004, include collective
trusts of Merrill Lynch, mutual funds, common stock of the Company, and other
investments as self-directed by participants. Units (shares) of the various
investment funds are valued daily at net asset value (which equals market
value). The investment options are participant-directed and participants may
change their investment elections daily.
-
5
-
The
following presents investments that represent 5% or more of the Plan’s net
assets as of December 31:
|
2004
|
2003
|
||||||
|
Black
Hills Corporation common stock
|
$
|
8,541,399
|
$
|
8,878,939
|
|||
|
Merrill
Lynch Retirement Preservation Trust
|
8,505,513
|
7,186,669
|
|||||
|
Merrill
Lynch Equity Index Trust 1
|
6,300,542
|
3,652,670
|
|||||
|
Davis
New York Venture Fund
|
3,735,918
|
2,198,338
|
|||||
|
PIMCO
Total Return Fund
|
2,720,990
|
2,304,993
|
|||||
|
Templeton
Foreign Fund
|
2,658,281
|
2,086,183
|
|||||
During
2004 and 2003, the Plan’s investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value as
follows:
|
2004
|
2003
|
||||||
|
Common
stock
|
$
|
244,596
|
$
|
1,003,093
|
|||
|
Mutual
funds
|
1,665,801
|
2,845,722
|
|||||
|
Common
collective trusts
|
606,148
|
865,537
|
|||||
|
$
|
2,516,545
|
$
|
4,714,352
|
||||
|
4.
|
TAX
STATUS
|
The
Plan
obtained its latest determination letter on October 9, 2001, in which
the
Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Code. The Plan has been
amended since receiving the determination letter; however, the plan
administrator and the Plan’s legal counsel believe that the Plan is currently
designed and being operated in compliance with the applicable requirements
of
the Code and, as a result, no provision for income tax is believed
necessary.
|
5.
|
PARTY-IN-INTEREST
TRANSACTIONS
|
The
Plan
invests in Merrill Lynch funds and Black Hills Corporation stock. These
transactions qualify as exempt party-in-interest transactions.
|
6.
|
RISKS
AND UNCERTAINTIES
|
The
Plan
provides for investment in a variety of investment funds. Investments in general
are exposed to various risks, such as interest rate, credit, and overall market
volatility. Due to the level of risk associated with certain investments, it
is
reasonably possible that changes in the values of the investments will occur
in
the near term and that such changes could materially affect participants’
account balances and the amounts reported in the statements of net assets
available for benefits.
*
* * * *
*
-
6
-
SUPPLEMENTAL
SCHEDULE
-
7
-
|
BLACK
HILLS CORPORATION RETIREMENT SAVINGS PLAN
|
|||||||
|
(Employer
Identification Number: 46-0458824) (Plan Number:
003)
|
|||||||
|
SCHEDULE
H, LINE 4i—SCHEDULE OF ASSETS (Held At End of
Year)
|
|||||||
|
DECEMBER
31, 2004
|
|||||||
|
Current
|
|||||||
|
Description
|
Cost**
|
Value
|
|||||
|
Collective
trusts:
|
|||||||
|
Merrill
Lynch Equity Index Trust 1*
|
$
|
5,503,680
|
|||||
|
Merrill
Lynch Equity Index Trust 1-GM*
|
796,862
|
||||||
|
Merrill
Lynch Retirement Preservation Trust*
|
8,070,344
|
||||||
|
Merrill
Lynch Retirement Preservation Trust-GM*
|
435,169
|
||||||
|
Total
collective trusts
|
14,806,055
|
||||||
|
Mutual
funds:
|
|||||||
|
AIM
Small Cap Growth Fund Class A
|
535,636
|
||||||
|
PIMCO
Total Return Fund—Class A
|
1,671,442
|
||||||
|
PIMCO
Total Return Fund—Class A-GM
|
1,049,548
|
||||||
|
PIMCO
Mid-Cap Growth Fund—Class A
|
402,003
|
||||||
|
Munder
Framlington Health Care Fund
|
695,914
|
||||||
|
Oppenheimer
Gold & Special Minerals Fund
|
265,891
|
||||||
|
Seligman
Communications Fund
|
1,595,618
|
||||||
|
Oppenheimer
Global Fund
|
1,782,287
|
||||||
|
Templeton
Foreign Fund
|
2,026,657
|
||||||
|
Oppenheimer
US Government Fund
|
210,376
|
||||||
|
Templeton
Foreign Fund-GM
|
631,624
|
||||||
|
Franklin
Balance Sheet Fund
|
1,755,011
|
||||||
|
Massachusetts
Investors Stock Fund—Class A-GM
|
404
|
||||||
|
Davis
New York Venture Fund
|
3,041,486
|
||||||
|
Davis
New York Venture Fund-GM
|
694,432
|
||||||
|
Van
Kampen Real Estate Securities Fund
|
871,445
|
||||||
|
Merrill
Lynch Capital Fund—Class D*
|
1,043,123
|
||||||
|
Total
mutual funds
|
18,272,897
|
||||||
|
Common
stock—
|
|||||||
|
Black
Hills Corporation*
|
8,541,399
|
||||||
|
Self-directed
accounts
|
542,983
|
||||||
|
Pending
Stlmt
|
18,186
|
||||||
|
Participant
loans, with interest rates ranging from 5.0% to 10.5%—
|
|||||||
|
Maturity
dates extending through December 31, 2009*
|
1,287,759
|
||||||
|
$
|
43,469,279
|
||||||
|
*Denotes
party-in-interest
|
|||||||
|
**Cost
is not required for participant-directed accounts
|
|||||||
-
8
-
EXHIBIT
INDEX
Exhibit
Number Description
23 Consent
of Deloitte & Touche LLP
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this Annual Report to be signed on its behalf by the undersigned
hereunto duly authorized.
Black
Hills Corporation
Retirement
Savings Plan
By
/s/
Mark T. Thies
Mark
T.
Thies
Executive
Vice President and Chief Financial Officer
Date:
June 28, 2005
-
9
-
EXHIBIT
INDEX
Exhibit
Number Description
23 Consent
of Deloitte & Touche LLP
Exhibit
23
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
consent to the incorporation by reference in Registration Statement
Nos. 333-101541 and 33-71130 of Black Hills Corporation on Form S-3
and in Registration Statement Nos. 33-63059, 333-17451, 333-61969,
333-82787, 333-30272, and 333-63264 of Black Hills Corporation on Form S-8
of
our report dated June 15, 2005, appearing in this Annual Report on Form
11-K of Black Hills Corporation Retirement Savings Plan for the year ended
December 31, 2004.
Minneapolis,
Minnesota
June
15,
2005