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The ratings of Black Hills Corporation reflects the relatively predictable earnings and cash flows from the company’s predominately regulated operations. The company’s low-risk business profile can support the current ratings, despite the delayed progress in deleveraging due to the negative impact of Winter Storm URI earlier this year and an elevated capital-spending program. The capital-spending program is focused on utility investments and supports near-term earnings growth with over three-quarters eligible for timely recovery under riders. ���������ֳ� expects Black Hills will reduce leverage to approximately 5.0x on an FFO leverage basis in 2023. Greater than expected regulatory lag, which results in FFO leverage metrics above the 5.0x negative sensitivity threshold in 2023 and beyond, would likely lead to a negative rating action. Low-Risk Business Profile: Black Hills benefits from ownership of several low-risk, regulated utility businesses. The company eliminated the higher risk oil and gas operations in 2018, and expanded the regulated operations with the Black Hills Gas Holdings, LLC (BHGH; formerly SourceGas Holdings LLC) acquisition in 2016. The contribution of regulated utility operations increased to approximately 87% of consolidated EBITDA for 2020 from 80% previously. Black Hills is focusing on organic growth opportunities across its footprint. Nearly all Black Hills’ cash flows and earnings are from regulated activities or nonregulated businesses that have long-term contracts with Black Hills affiliates.