Latest news with #OtterTailPower
Business Wire
4 days ago
- Business
- Business Wire
Otter Tail Power Company Requests Rate Review in South Dakota
FERGUS FALLS, Minn.--(BUSINESS WIRE)--Otter Tail Power Company, a wholly owned subsidiary of Otter Tail Corporation (Nasdaq: OTTR), filed a request with the South Dakota Public Utilities Commission (PUC) for permission to increase its electric rates. This request is a result of rising costs to maintain a safe and reliable system while meeting customers' growing electricity demand as economically as possible. 'We understand rising electric costs can be challenging, and we remain focused on managing these increases through smart investments and streamlined operations that allow us to be one of the lowest-cost providers in the nation,' said Otter Tail Power President Tim Rogelstad. 'Our goal is to continue serving our customers with the safe, reliable, and cost-effective energy they depend on while navigating these challenges together.' The net effect of Otter Tail Power's request is an increase to rates of approximately $5.7 million. If the PUC approves the overall request as filed, the average net increase to customers would be approximately 12.5%. Otter Tail Power last requested a rate review in South Dakota in 2018. Proposed rates may take effect December 1 The filing starts a process often referred to as a rate case. During this time, the PUC reviews costs the company incurs to provide customers with energy and related services and then determines appropriate prices for customers using that energy. This independent, public process helps ensure transparent rate setting for all customers. The PUC will establish a schedule for making its decision on the company's request. If the PUC doesn't issue its decision within 180 days, Otter Tail Power can increase rates on an interim basis beginning December 1, 2025. If final rates are lower than interim rates, Otter Tail Power would refund customers the difference with interest. If final rates are higher than interim rates, the company would not collect the difference. Rate information, including example monthly bill impacts, and updates related to the company's request will be available online at Forward-Looking Statements Except for historical information contained here, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words 'anticipate,' 'believe,' 'can,' 'could,' 'estimate,' 'expect,' 'future,' 'goal,' 'intend,' 'likely,' 'may,' 'opportunity,' 'outlook,' 'plan,' 'possible,' 'potential,' 'predict,' 'probable,' 'projected,' 'should,' 'target,' 'will,' 'would' and similar words and expressions are intended to identify forward-looking statements. Such statements are based upon the current beliefs and expectations of management. Forward-looking statements made herein, which may include statements regarding 2025 earnings and earnings per share, long-term earnings, earnings per share growth and earnings mix, anticipated levels of energy generation from renewable resources, anticipated reductions in carbon dioxide emissions, future investments and capital expenditures, rate base levels and rate base growth, future raw materials costs, future raw materials availability and supply constraints, future operating revenues and operating results, and expectations regarding regulatory proceedings, as well as other assumptions and statements, involve known and unknown risks and uncertainties that may cause our actual results in current or future periods to differ materially from the forecasted assumptions and expected results. The Company's risks and uncertainties include, among other things, uncertainty of future investments and capital expenditures; rate base levels and rate base growth; risks associated with energy markets; the availability and pricing of resource materials; inflationary cost pressures; attracting and maintaining a qualified and stable workforce; changing macroeconomic and industry conditions that impact the demand for our products, pricing and margin; long-term investment risk; seasonal weather patterns and extreme weather events; future business volumes with key customers; reductions in our credit ratings; our ability to access capital markets on favorable terms; assumptions and costs relating to funding our employee benefit plans; our subsidiaries' ability to make dividend payments; cybersecurity threats or data breaches; the impact of government legislation and regulation including foreign trade policy and environmental; health and safety laws and regulations; changes in tax laws and regulations; the impact of climate change including compliance with legislative and regulatory changes to address climate change; expectations regarding regulatory proceedings, assigned service areas, the construction of major facilities, capital structure, and allowed customer rates; actual and threatened claims or litigation; and operational and economic risks associated with our electric generating and manufacturing facilities. These and other risks are more fully described in our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K, as updated in subsequently filed Quarterly Reports on Form 10-Q, as applicable. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information. About the Corporation Otter Tail Corporation, a member of the S&P SmallCap 600 Index, has interests in diversified operations that include an electric utility and manufacturing businesses. Otter Tail Corporation stock trades on the Nasdaq Global Select Market under the symbol OTTR. The latest investor and corporate information is available at Corporate offices are in Fergus Falls, Minnesota, and Fargo, North Dakota.
Business Wire
05-05-2025
- Business
- Business Wire
Otter Tail Corporation Announces First Quarter Earnings and Affirms Annual Earnings Guidance
FERGUS FALLS, Minn.--(BUSINESS WIRE)--Otter Tail Corporation (Nasdaq: OTTR) today announced financial results for the quarter ended March 31, 2025. SUMMARY Produced diluted earnings per share of $1.62 in the first quarter of 2025. Affirming consolidated 2025 earnings guidance range of $5.68 to $6.08. Paid quarterly dividend of $0.525 per share, a 12% increase from last year. Available liquidity of $607 million as of March 31, 2025. CEO OVERVIEW 'Overall, we are pleased with our first quarter financial results,' said President and CEO Chuck MacFarlane. 'Each of our businesses are responding to the dynamic market conditions while remaining focused on serving our customers and effectively executing on our near-term strategies. Collectively, we produced earnings of $68.1 million, or $1.62 per diluted share, in line with our expectations and a good start to the year. 'We are actively monitoring the evolving tariff landscape and resulting impact on our business. While there is uncertainty regarding the extent and duration of the economic impacts, with the strength of our balance sheet, including ample liquidity, and an experienced management team, we are well positioned to weather this period of economic turbulence. 'Otter Tail Power finalized its fully settled North Dakota general rate case with a final compliance filing and implementation of new base rates in the first quarter. Overall, we view the outcome of the case to be constructive. In addition, we continue to execute on our investment and regulatory priorities, including development work on our renewable generation and large transmission projects. Finally, we achieved an important milestone in adding a new large customer to our system, reaching an agreement to provide service to a developer locating next to our Big Stone Plant. We are now working to receive regulatory approval for this load along with other steps necessary to commence service. 'Our Manufacturing segment continues to navigate softening end market demand in our served markets. In addition, domestic steel suppliers have announced price increases following the implementation of tariffs on imported steel. While our business has not been significantly impacted by metal price changes to date, we are monitoring for potential future impacts as higher priced metal enters the market. We completed the expansion of our BTD manufacturing facility in Georgia. The project was completed on time and on budget and we are currently ramping up to full production. 'Our Plastics segment continues to benefit from strong product demand and increased sales volumes while product prices continue to decline in line with our expectations. We are pleased with the first quarter performance of our new large diameter production line at Vinyltech, providing us the capability to better serve customers in our southwest market. 'We are maintaining our consolidated 2025 diluted earnings-per-share guidance range of $5.68 to $6.08, which we expect to produce a consolidated return on equity in the range of 13.8% to 14.6%. 'While our businesses are facing uncertainty in the current environment, we remain confident in our long-term strategy of investing in rate base growth opportunities at Otter Tail Power, which we expect to produce a compounded annual growth rate in rate base of 9 percent from 2025 to 2029, and the benefits of a diversified business model to generate incremental earnings and cash flows to fund our capital investment plan without any external equity needs. Over the long term, we expect this strategy to produce earnings-per-share growth of 6 to 8 percent and a total shareholder return of 9 to 11 percent.' QUARTERLY DIVIDEND On May 5, 2025, the corporation's Board of Directors declared a quarterly common stock dividend of $0.525 per share. This dividend is payable June 10, 2025 to shareholders of record on May 15, 2025. CASH FLOWS AND LIQUIDITY Our consolidated cash provided by operating activities for the three months ended March 31, 2025 was $39.5 million compared to $71.9 million for the three months ended March 31, 2024, with the decrease primarily due to the timing of fuel cost and rider recoveries from our utility customers, the timing of payments of operating costs in our Electric segment, and a decrease in earnings. Investing activities for the three months ended March 31, 2025 included capital expenditures of $58.0 million. Capital expenditures during the period were largely within our Electric segment, including investments in our wind repowering, advanced metering infrastructure, and transmission line projects. Financing activities for the three months ended March 31, 2025 included the issuance of $50.0 million of long-term debt at Otter Tail Power; the proceeds of which were used to repay short-term borrowings, fund capital investments, and support operating activities. Financing activities for the three months ended March 31, 2025 also included net repayments of short-term borrowings totaling $10.8 million and dividend payments of $22.0 million. As of March 31, 2025, we had $170.0 million and $152.4 million of available liquidity under our Otter Tail Corporation and Otter Tail Power credit facilities, respectively, along with $284.8 million of available cash and cash equivalents, for total available liquidity of $607.2 million. The following table shows heating degree days as a percent of normal. Three Months Ended March 31, 2025 2024 Heating Degree Days 100.9 % 84.4 % Expand The following table summarizes the estimated effect on diluted earnings per share of the difference in retail kilowatt-hour (kwh) sales under actual weather conditions and expected retail kwh sales under normal weather conditions for the three months ended March 31, 2025 and 2024. Operating Revenues increased $8.2 million primarily due to an increase in fuel recovery revenues from an increase in the volume and price of market energy purchases and the impact of favorable weather compared to the same period last year, as the first quarter in 2024 was unseasonably warm in our service territory. Interim revenues in North Dakota increased compared to the same period last year driven by increased customer demand and consumption. These increases in operating revenues were partially offset by a net decrease in rider revenues primarily due to increased production tax credits from our wind generation, which are passed on to customers in the form of lower rates, partially offset by additional recovery of costs associated with our wind repowering projects. Net Income increased $2.2 million primarily due to the increase in revenues, as described above, partially offset by increased depreciation and interest expense related to capital investments and financing costs associated with our rate base investments. Operating Revenues decreased $17.7 million primarily due to a 13% decrease in sales volumes, with the most significant declines experienced in the recreational vehicle, agriculture, and construction end markets. Sales volumes have continued to soften due to lower end market demand and inventory management efforts by manufacturers and dealers. A 3% decrease in steel costs, which are passed through to customers, as well as a 1% decrease in scrap revenue also contributed to the decrease in operating revenues. Net Income decreased $3.7 million primarily due to lower sales volumes and lower scrap metal sales, as described above, as well as a decrease in margins. Decreased profit margins were primarily due to reduced leveraging of fixed manufacturing costs resulting from decreased production and sales volumes. The impacts of decreased operating revenues and profit margins were partially offset by a decrease in general and administrative costs. Operating Revenues decreased $0.3 million due to an 11% decrease in sales prices compared to the same period last year, continuing the steady decline in product pricing due to continuing changes from peak market conditions in late 2022. The impact of decreased sales prices was largely offset by a 13% increase in sales volumes driven by strong distributor and end market demand coupled with increased production capacity after the completion of our expansion project at Vinyltech in late 2024. Active infrastructure investment and construction across our sales territories have continued to contribute to strong distributor and end market demand. Net Income decreased $3.3 million primarily due to decreased sales prices, as described above, as well as increased general and administrative expenses, partially offset by decreased PVC resin cost, driven by elevated domestic resin supply. Net Loss increased $1.4 million primarily due to increased employee benefit expenses, including increases in our employee health insurance claim costs. 2025 OUTLOOK We continue to anticipate 2025 diluted earnings per share to be in the range of $5.68 to $6.08. We expect our earnings mix in 2025 to be approximately 39% from our Electric segment and 61% from our Manufacturing and Plastics segments, net of corporate costs. Our anticipated earnings mix in 2025 deviates from our long-term expected earnings mix of 65% Electric / 35% Non-Electric as we expect Plastics segment earnings to remain elevated in 2025 compared to our long-term view of normal earnings for this segment. The segment components of our 2025 diluted earnings per share guidance compared with actual earnings for 2024 are as follows: CONFERENCE CALL AND WEBCAST The corporation will host a live webcast on Tuesday, May 6, 2025, at 10:00 a.m. CT to discuss its financial and operating performance. The presentation will be posted on our website before the webcast. To access the live webcast, go to and select 'Webcast.' Please allow time prior to the call to visit the site and download any software needed to listen in. An archived copy of the webcast will be available on our website shortly after the call. If you are interested in asking a question during the live webcast, visit and follow the link provided in the press release announcing the upcoming conference call. FORWARD-LOOKING STATEMENTS Except for historical information contained here, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words 'anticipate,' 'believe,' 'can,' 'could,' 'estimate,' 'expect,' 'future,' 'goal,' 'intend,' 'likely,' 'may,' 'opportunity,' 'outlook,' 'plan,' 'possible,' 'potential,' 'predict,' 'probable,' 'projected,' 'should,' 'target,' 'will,' 'would' and similar words and expressions are intended to identify forward-looking statements. Such statements are based upon the current beliefs and expectations of management. Forward-looking statements made herein, which may include statements regarding 2025 earnings and earnings per share, long-term earnings, earnings per share growth and earnings mix, anticipated levels of energy generation from renewable resources, anticipated reductions in carbon dioxide emissions, future investments and capital expenditures, rate base levels and rate base growth, future raw materials costs, future raw materials availability and supply constraints, future operating revenues and operating results, and expectations regarding regulatory proceedings, as well as other assumptions and statements, involve known and unknown risks and uncertainties that may cause our actual results in current or future periods to differ materially from the forecasted assumptions and expected results. The Company's risks and uncertainties include, among other things, uncertainty of future investments and capital expenditures; rate base levels and rate base growth; risks associated with energy markets; the availability and pricing of resource materials; inflationary cost pressures; attracting and maintaining a qualified and stable workforce; changing macroeconomic and industry conditions that impact the demand for our products, pricing and margin; long-term investment risk; seasonal weather patterns and extreme weather events; future business volumes with key customers; reductions in our credit ratings; our ability to access capital markets on favorable terms; assumptions and costs relating to funding our employee benefit plans; our subsidiaries' ability to make dividend payments; cybersecurity threats or data breaches; the impact of government legislation and regulation including foreign trade policy and environmental; health and safety laws and regulations; changes in tax laws and regulations; the impact of climate change including compliance with legislative and regulatory changes to address climate change; expectations regarding regulatory proceedings, assigned service areas, the construction of major facilities, capital structure, and allowed customer rates; actual and threatened claims or litigation; and operational and economic risks associated with our electric generating and manufacturing facilities. These and other risks are more fully described in our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K, as updated in subsequently filed Quarterly Reports on Form 10-Q, as applicable. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information. About the Corporation: Otter Tail Corporation, a member of the S&P SmallCap 600 Index, has interests in diversified operations that include an electric utility and manufacturing businesses. Otter Tail Corporation stock trades on the Nasdaq Global Select Market under the symbol OTTR. The latest investor and corporate information is available at Corporate offices are in Fergus Falls, Minnesota, and Fargo, North Dakota. OTTER TAIL CORPORATION March 31, December 31, (in thousands) 2025 2024 Assets Current Assets Cash and Cash Equivalents $ 284,814 $ 294,651 Receivables, net of allowance for credit losses 184,051 145,964 Inventories 147,695 148,885 Regulatory Assets 11,539 9,962 Other Current Assets 23,175 30,579 Total Current Assets 651,274 630,041 Noncurrent Assets Investments 125,113 121,177 Property, Plant and Equipment, net of accumulated depreciation 2,709,311 2,692,460 Regulatory Assets 99,424 98,673 Intangible Assets, net of accumulated amortization 5,467 5,743 Goodwill 37,572 37,572 Other Noncurrent Assets 68,633 66,416 Total Noncurrent Assets 3,045,520 3,022,041 Total Assets $ 3,696,794 $ 3,652,082 Liabilities and Shareholders' Equity Current Liabilities Short-Term Debt $ 58,853 $ 69,615 Accounts Payable 80,763 113,574 Accrued Salaries and Wages 23,502 34,398 Accrued Taxes 19,804 17,314 Regulatory Liabilities 27,028 29,307 Other Current Liabilities 38,470 45,582 Total Current Liabilities 248,420 309,790 Noncurrent Liabilities and Deferred Credits Pension Benefit Liability 32,406 32,614 Other Postretirement Benefits Liability 26,957 27,385 Regulatory Liabilities 290,678 288,928 Deferred Income Taxes 271,605 267,745 Deferred Tax Credits 14,798 14,990 Other Noncurrent Liabilities 101,056 98,397 Total Noncurrent Liabilities and Deferred Credits 737,500 730,059 Commitments and Contingencies Capitalization Long-Term Debt 993,513 943,734 Shareholders' Equity Common Shares 209,370 209,140 Additional Paid-In Capital 431,423 429,089 Retained Earnings 1,075,834 1,029,738 Accumulated Other Comprehensive Income 734 532 Total Shareholders' Equity 1,717,361 1,668,499 Total Capitalization 2,710,874 2,612,233 Total Liabilities and Shareholders' Equity $ 3,696,794 $ 3,652,082 Expand OTTER TAIL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Three Months Ended March 31, (in thousands) 2025 2024 Operating Activities Net Income $ 68,099 $ 74,338 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 29,375 25,897 Deferred Tax Credits (192 ) (187 ) Deferred Income Taxes 1,797 7,859 Investment Gains 37 (2,385 ) Stock Compensation Expense 5,758 5,514 Other, net (969 ) (874 ) Change in Operating Assets and Liabilities: Receivables (38,087 ) (38,531 ) Inventories 1,526 1,920 Regulatory Assets (3,091 ) 7,338 Other Assets 5,732 537 Accounts Payable (16,360 ) 8,195 Accrued and Other Liabilities (13,888 ) (24,372 ) Regulatory Liabilities 1,652 9,365 Pension and Other Postretirement Benefits (1,920 ) (2,701 ) Net Cash Provided by Operating Activities 39,469 71,913 Investing Activities Capital Expenditures (58,012 ) (74,044 ) Proceeds from Disposal of Noncurrent Assets 1,276 2,499 Purchases of Investments and Other Assets (4,175 ) (4,331 ) Net Cash Used in Investing Activities (60,911 ) (75,876 ) Financing Activities Net Repayments of Short-Term Debt (10,762 ) (81,422 ) Proceeds from Issuance of Long-Term Debt 50,000 120,000 Dividends Paid (22,003 ) (19,553 ) Payments for Shares Withheld for Employee Tax Obligations (3,134 ) (5,754 ) Other, net (2,496 ) (1,523 ) Net Cash Provided by Financing Activities 11,605 11,748 Net Change in Cash and Cash Equivalents (9,837 ) 7,785 Cash and Cash Equivalents at Beginning of Period 294,651 230,373 Cash and Cash Equivalents at End of Period $ 284,814 $ 238,158 Expand SEGMENT RESULTS (unaudited) Three Months Ended March 31, (in thousands) 2025 2024 Operating Revenues Electric $ 149,720 $ 141,488 Manufacturing 81,685 99,380 Plastics 105,948 106,200 Total Operating Revenues $ 337,353 $ 347,068 Operating Income (Loss) Electric $ 29,043 $ 29,042 Manufacturing 2,426 7,413 Plastics 58,876 63,305 Corporate (6,346 ) (4,785 ) Total Operating Income $ 83,999 $ 94,975 Net Income Electric $ 24,708 $ 22,470 Manufacturing 1,532 5,261 Plastics 43,439 46,740 Corporate (1,580 ) (133 ) Total Net Income $ 68,099 $ 74,338 Expand
Yahoo
17-02-2025
- Business
- Yahoo
Otter Tail Corporation Announces Record Annual Earnings and Increases Long-Term Financial Targets
FERGUS FALLS, Minn., February 17, 2025--(BUSINESS WIRE)--Otter Tail Corporation (Nasdaq: OTTR) today announced financial results for the quarter and year ended December 31, 2024. SUMMARY Produced record earnings, with annual diluted earnings per share of $7.17. Achieved a consolidated return on equity of 19.3% on an equity ratio of 62.2%. Updated our electric utility's five-year rate base compounded annual growth rate to 9.0% from 7.7%. Increased our long-term earnings per share growth rate target to 6 to 8%. CEO OVERVIEW "Otter Tail Corporation produced record earnings in 2024, generating diluted earnings per share of $7.17," said President and CEO Chuck MacFarlane. "Executing on our strategy coupled with the hard work and dedication of our team members made this level of success possible and I am grateful for their contributions. "Otter Tail Power continues to perform well, converting our 2024 rate base growth into earnings growth at approximately a 1:1 ratio. We continue to execute on our regulatory priorities and obtained approval for our fully settled North Dakota general rate case in the fourth quarter. The outcome of the case provides for a net annual revenue requirement increase of $13.1 million premised on a return on equity of 10.1 percent and an equity layer of 53.5 percent. "Our Manufacturing segment continues to navigate softened end market demand, and we have taken action to mitigate the impact of lower sales volumes on earnings. Despite the down-cycle, this segment continues to produce incremental cash to fund future growth opportunities, and the long-term fundamentals remain intact. "Our Plastics segment produced strong financial results, generating record earnings of $201 million. We continue to benefit from improved end market demand and customers' sales volume growth. We completed the first phase of the Vinyltech expansion project in the fourth quarter, adding large diameter PVC pipe production capability to better serve customers in the southwest market. "We have updated our 5-year capital spending plan and revised our long-term financial targets. Otter Tail Power's updated 5-year capital spending plan totals $1.4 billion and is expected to produce a rate base compounded annual growth rate of 9 percent. We also increased our consolidated long-term earnings per share growth rate target to 6 to 8 percent from 5 to 7 percent, increasing our total shareholder return target to 9 to 11 percent. "With the strength of our balance sheet and the talent excellence we have and continue to cultivate, we feel well positioned to deliver on our revised financial targets over the long-term. We are initiating our 2025 diluted earnings per share guidance range of $5.68 to $6.08. Our guidance reflects Electric segment earnings growth of approximately 7 percent and as expected, a decline in Plastics segment earnings driven by a continued reduction in product sales prices due to changing market conditions. We also expect a decline in Manufacturing segment earnings as end market demand conditions remain challenging." CASH FLOWS AND LIQUIDITY Our consolidated cash provided by operating activities was a record $452.7 million in 2024, compared to $404.5 million in 2023, with the increase primarily due to a decrease in working capital and a $7.5 million increase in net income. Investing activities during the year included capital expenditures of $358.7 million and a $50.1 million long-term investment in U.S. treasuries. Capital expenditures during the year were largely within our Electric segment, including investments in our wind repowering and advanced metering projects, but also included investments in our facility expansion projects within our Manufacturing and Plastics segments. Financing activities in 2024 included the issuance of $120.0 million of long-term debt at Otter Tail Power, the proceeds of which were primarily used to fund capital investments. Other financing activities during the year included dividend payments of $78.3 million. As of December 31, 2024, we had $311.6 million of available liquidity under our credit facilities and $294.7 million of available cash and cash equivalents, for total available liquidity of $606.3 million. ANNUAL SEGMENT OPERATING RESULTS Electric Segment ($ in thousands) 2024 2023 $ Change % Change Operating Revenues $ 524,515 $ 528,359 $ (3,844 ) (0.7 )% Net Income 90,963 84,424 6,539 7.7 Retail MWh Sales 5,681,268 5,772,215 (90,947 ) (1.6 )% Heating Degree Days 5,313 6,259 (946 ) (15.1 ) Cooling Degree Days 440 590 (150 ) (25.4 ) The following table shows heating and cooling degree days as a percent of normal. 2024 2023 Heating Degree Days 83.7 % 98.4 % Cooling Degree Days 93.8 % 127.2 % The following table summarizes the estimated effect on diluted earnings per share of the difference in retail kilowatt-hour (kwh) sales under actual weather conditions and expected retail kwh sales under normal weather conditions in 2024 and 2023. 2024 vs Normal 2024 vs 2023 2023 vs Normal Effect on Diluted Earnings Per Share $ (0.13 ) $ (0.15 ) $ 0.02 Operating Revenues decreased $3.8 million primarily due to decreases in retail and wholesale revenues. The decrease in retail revenue was driven by decreased fuel recovery revenue due to lower market energy costs and the impact of unfavorable weather. These decreases were partially offset by retail revenue increases due to an interim rate increase in North Dakota in connection with our most recent rate case, increased commercial and industrial sales volumes, and increased rider revenue as we recover the cost of and return on our rate base investments. Net Income increased $6.5 million primarily due to increased revenue resulting from the interim rate increase in North Dakota and increased rider revenue, partially offset by unfavorable weather, as discussed above. The revenue increases were partially offset by increased depreciation and interest expense related to capital investments and financing costs associated with our rate base investments. Manufacturing Segment (in thousands) 2024 2023 $ Change % Change Operating Revenues $ 342,592 $ 402,781 $ (60,189 ) (14.9 )% Net Income 13,681 21,454 (7,773 ) (36.2 ) Operating Revenues decreased $60.2 million primarily due to a 15% decrease in sales volumes, with declines experienced in the recreational vehicle, agriculture, construction, lawn and garden, and horticulture end markets. Sales volumes decreased due to lower end market demand and inventory management efforts by manufacturers, distributors, and dealers. A 28% decline in scrap metal revenues, largely driven by lower production volumes, also contributed to the decrease in operating revenues. Net Income decreased $7.8 million primarily due to lower sales volumes, as described above, and a decrease in gross profit margins in our plastics thermoforming business, partially offset by reduced general and administrative expenses. Decreased profit margins were primarily due to a reduced leveraging of fixed manufacturing costs resulting from decreased production and sales volumes. Decreased scrap metal sales, as described above, also contributed to the decrease in net income. Plastics Segment (in thousands) 2024 2023 $ Change % Change Operating Revenues $ 463,441 $ 418,026 $ 45,415 10.9 % Net Income 200,747 187,748 12,999 6.9 Operating Revenues increased $45.4 million primarily due to a 27% increase in sales volumes driven by customer sales volume growth and strong distributor and end market demand. Sales volumes in 2023 were negatively impacted by distributors and contractors reducing purchase volumes in response to uncertain and competitive market conditions. Although market conditions remain somewhat uncertain, infrastructure investment and active construction across our sales territories contributed to increased distributor and end market demand in 2024. The impact of increased sales volumes was partially offset by decreased sales prices. Our sales prices have steadily declined after peaking in late 2022 and decreased 12% in 2024 compared to the prior year due to continuing changes in market conditions. Net Income increased $13.0 million primarily due to the impact of increased sales volumes, as described above. Increased operating revenues, driven by increased sales volumes, were partially offset by a decrease in gross profit margins. Gross profit margins decreased primarily due to decreases in sales prices, as described above. Corporate (in thousands) 2024 2023 $ Change % Change Net Income (Loss) $ (3,729 ) $ 565 $ (4,294 ) n/m Net Income (Loss) at our corporate cost center decreased $4.3 million from $0.6 million of net income in the prior year, primarily due to increased insurance expenses driven by higher claims costs associated with our self-funded insurance programs, as well as increased variable compensation based on the current year financial performance. The increase in expenses was partially offset by increased investment income earned on our short- and long-term investments. FOURTH QUARTER OPERATING RESULTS Consolidated Results (in thousands, except per share amounts) 2024 2023 $ Change % Change Operating Revenues $ 303,111 $ 314,313 $ (11,202 ) (3.6 )% Operating Expenses 236,287 244,233 (7,946 ) (3.3 ) Operating Income 66,824 70,080 (3,256 ) (4.6 ) Other Expense 3,821 1,109 2,712 244.5 Income Before Income Taxes 63,003 68,971 (5,968 ) (8.7 ) Income Tax Expense 8,153 11,205 (3,052 ) (27.2 ) Net Income 54,850 57,766 (2,916 ) (5.0 ) Diluted Earnings Per Share $ 1.30 $ 1.37 $ (0.07 ) (5.1 )% Electric Segment Electric segment net income was $21.5 million, a $4.5 million increase from the fourth quarter of 2023. The increase was primarily due to increased retail revenue driven by an interim rate increase in North Dakota in connection with our most recent rate case, as well as increased rider revenue, combined with a decrease in operating and maintenance expenses. The revenue increases and operating expense decreases were partially offset by increased depreciation and interest expense related to capital investment and financing costs associated with our rate base investments. Manufacturing Segment Manufacturing segment net loss was $0.6 million, a $1.8 million decrease from net income of $1.2 million in the fourth quarter of 2023. The decrease was primarily due to a 25% decrease in sales volumes compared to the same period in the prior year, driven by soft end market demand, and a decrease in gross profit margins in both our contract metal fabrication and our plastics thermoforming business. Sales volume decreases were primarily in the recreational vehicle, agriculture, construction, lawn and garden, and horticulture end markets. Decreased profit margins were primarily due to a reduced leveraging of fixed manufacturing costs resulting from decreased production and sales volumes. The impacts of lower sales volumes were partially offset by reduced general and administrative expenses. Plastics Segment Plastics segment net income was $38.9 million, a $0.6 million decrease from the fourth quarter of 2023. The decrease was primarily due to decreased sales prices and increased general and administrative costs. Sales prices steadily declined throughout the year and decreased 11% compared to the same period last year. The impact of decreased sales prices and increased general and administrative costs was largely offset by the impact of increased sales volumes. Sales volumes increased 23% compared to the same period in the prior year driven by customer sales volume growth and strong distributor and end market demand. Corporate Corporate net loss was $5.0 million, a $5.1 million decrease from $0.1 million of net income in the fourth quarter of 2023, primarily due to increased insurance expense driven by higher claims costs associated with our self-funded insurance programs, as well as increased variable compensation based on the current year financial performance. 2025 OUTLOOK We anticipate 2025 diluted earnings per share to be in the range of $5.68 to $6.08. We expect our earnings mix in 2025 to be approximately 39% from our Electric segment and 61% from our Manufacturing and Plastics segments, net of corporate costs. Our anticipated earnings mix in 2025 deviates from our long-term expected earnings mix of 65% Electric / 35% Non-Electric as we expect Plastics segment earnings to remain elevated in 2025 compared to our long-term view of normal earnings for this segment. The segment components of our 2025 diluted earnings per share guidance compared with actual earnings for 2024 are as follows: 2024 EPS by Segment 2025 EPS Guidance Low High Electric $ 2.16 $ 2.29 $ 2.35 Manufacturing 0.33 0.21 0.27 Plastics 4.77 3.26 3.50 Corporate (0.09 ) (0.08 ) (0.04 ) Total $ 7.17 $ 5.68 $ 6.08 Return on Equity 19.3 % 13.8 % 14.6 % The following items contribute to our 2025 earnings guidance: Electric Segment - We expect segment earnings to increase 7% in 2025 based on the following assumptions: Normal weather conditions in 2025. Returns generated from an increase in average rate base of 12% in 2025 compared to 2024. A planned maintenance outage at Coyote Station in 2025 (there were no planned outages in 2024). Increased depreciation and interest expense from capital expenditures and associated financing. Manufacturing Segment - We expect segment earnings to decline 27% in 2025 based on the following assumptions: Lower sales volumes in our contract metal fabrication business as soft end market demand continues, partially offset by some volume recovery in our horticulture plastic products business. Sales mix and product pricing pressure in the current sales volume environment, and lower scrap revenues within our metal fabrication business from lower production volumes. Compressed operating margins from the deleveraging of manufacturing costs due to lower production and sales volumes. Plastics Segment - We expect segment earnings to decline 29% in 2025 based on the following assumptions: Continued decline in product sales prices throughout 2025 as pricing continues to retreat from the 2022 high point. Modest increase in sales volumes driven by new capacity at our Phoenix facility, partially offset by macroeconomic uncertainty. Corporate Costs - We expect our corporate costs to decrease primarily from lower incentive compensation costs compared to 2024. CAPITAL EXPENDITURES The following provides a summary of actual capital expenditures for the year ended December 31, 2024, and anticipated annual capital expenditures for the next five years, along with average rate base and annual rate base growth of our Electric segment: (in millions) 2024 2025 2026 2027 2028 2029 Total 2025 - 2029 Electric Segment: Renewable Generation $ 134 $ 101 $ 127 $ 118 $ 179 $ 4 $ 529 Transmission 60 59 93 162 114 100 528 Distribution 46 37 37 36 37 34 181 Other 61 54 51 31 27 25 188 Total Electric Segment 301 251 308 347 357 163 1,426 Manufacturing and Plastics Segments 58 27 27 27 25 23 129 Total Capital Expenditures $ 359 $ 278 $ 335 $ 374 $ 382 $ 186 $ 1,555 Total Electric Utility Average Rate Base $ 1,892 $ 2,118 $ 2,303 $ 2,524 $ 2,762 $ 2,909 Annual Rate Base Growth 8.6 % 11.9 % 8.7 % 9.6 % 9.4 % 5.3 % Our updated five-year capital expenditure plan includes Electric segment investments in wind and solar resources, transmission and distribution assets, and investments in system reliability and technology. Our Electric segment capital expenditure plan produces a compounded annual growth rate on average rate base of 9.0% over the next five years and will serve as a key driver in increasing Electric segment earnings over this timeframe. Our capital expenditure plan in our Manufacturing and Plastics segments includes a mix of investments to replace and upgrade existing equipment and investments to add additional capacity or productivity to our operations. CONFERENCE CALL AND WEBCAST The corporation will host a live webcast on Tuesday, February 18, 2025, at 10:00 a.m. CT to discuss its financial and operating performance. The presentation will be posted on our website before the webcast. To access the live webcast, go to and select "Webcast." Please allow time prior to the call to visit the site and download any software needed to listen in. An archived copy of the webcast will be available on our website shortly after the call. If you are interested in asking a question during the live webcast, visit and follow the link provided in the press release announcing the upcoming conference call. FORWARD-LOOKING STATEMENTS Except for historical information contained here, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "anticipate," "believe," "can," "could," "estimate," "expect," "future," "goal," "intend," "likely," "may," "opportunity," "outlook," "plan," "possible," "potential," "predict," "probable," "projected," "should," "target," "will," "would" and similar words and expressions are intended to identify forward-looking statements. Such statements are based upon the current beliefs and expectations of management. Forward-looking statements made herein, which may include statements regarding 2025 earnings and earnings per share, long-term earnings, earnings per share growth and earnings mix, anticipated levels of energy generation from renewable resources, anticipated reductions in carbon dioxide emissions, future investments and capital expenditures, rate base levels and rate base growth, future raw materials costs, future raw materials availability and supply constraints, future operating revenues and operating results, and expectations regarding regulatory proceedings, as well as other assumptions and statements, involve known and unknown risks and uncertainties that may cause our actual results in current or future periods to differ materially from the forecasted assumptions and expected results. The Company's risks and uncertainties include, among other things, uncertainty of future investments and capital expenditures; rate base levels and rate base growth; risks associated with energy markets; the availability and pricing of resource materials; inflationary cost pressures; attracting and maintaining a qualified and stable workforce; changing macroeconomic and industry conditions that impact the demand for our products, pricing and margin; long-term investment risk; seasonal weather patterns and extreme weather events; future business volumes with key customers; reductions in our credit ratings; our ability to access capital markets on favorable terms; assumptions and costs relating to funding our employee benefit plans; our subsidiaries' ability to make dividend payments; cybersecurity threats or data breaches; the impact of government legislation and regulation including foreign trade policy and environmental; health and safety laws and regulations; changes in tax laws and regulations; the impact of climate change including compliance with legislative and regulatory changes to address climate change; expectations regarding regulatory proceedings, assigned service areas, the construction of major facilities, capital structure, and allowed customer rates; actual and threatened claims or litigation; and operational and economic risks associated with our electric generating and manufacturing facilities. These and other risks are more fully described in our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K, as updated in subsequently filed Quarterly Reports on Form 10-Q, as applicable. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information. Category: Earnings About the Corporation: Otter Tail Corporation, a member of the S&P SmallCap 600 Index, has interests in diversified operations that include an electric utility and manufacturing businesses. Otter Tail Corporation stock trades on the Nasdaq Global Select Market under the symbol OTTR. The latest investor and corporate information is available at Corporate offices are in Fergus Falls, Minnesota, and Fargo, North Dakota. OTTER TAIL CORPORATION CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three Months Ended December 31, Twelve Months Ended December 31, (in thousands, except per-share amounts) 2024 2023 2024 2023 Operating Revenues Electric $ 139,818 $ 132,362 $ 524,515 $ 528,359 Product Sales 163,293 181,951 806,033 820,807 Total Operating Revenues 303,111 314,313 1,330,548 1,349,166 Operating Expenses Electric Production Fuel 15,936 14,410 60,945 60,339 Electric Purchased Power 19,055 20,360 61,561 78,292 Electric Operating and Maintenance Expense 54,055 56,659 190,422 191,263 Cost of Products Sold (excluding depreciation) 91,560 102,793 434,522 454,122 Nonelectric Selling, General, and Administrative Expenses 24,169 21,230 80,065 72,663 Depreciation and Amortization ...27,541 25,319 107,121 97,954 Electric Property Taxes 3,971 3,462 15,662 16,614 Total Operating Expenses 236,287 244,233 950,298 971,247 Operating Income 66,824 70,080 380,250 377,919 Other Income and (Expense) Interest Expense (10,591 ) (9,392 ) (41,815 ) (37,677 ) Nonservice Components of Postretirement Benefits 2,412 3,475 9,609 10,597 Other Income (Expense), net 4,358 4,808 18,848 12,650 Income Before Income Taxes 63,003 68,971 366,892 363,489 Income Tax Expense 8,153 11,205 65,230 69,298 Net Income $ 54,850 $ 57,766 $ 301,662 $ 294,191 Weighted-Average Common Shares Outstanding: Basic 41,801 41,680 41,778 41,668 Diluted 42,088 42,065 42,072 42,039 Earnings Per Share: Basic $ 1.31 $ 1.39 $ 7.22 $ 7.06 Diluted $ 1.30 $ 1.37 $ 7.17 $ 7.00 OTTER TAIL CORPORATION CONSOLIDATED BALANCE SHEETS (unaudited) December 31, (in thousands) 2024 2023 Assets Current Assets Cash and Cash Equivalents $ 294,651 $ 230,373 Receivables, net of allowance for credit losses 145,964 157,143 Inventories 148,885 149,701 Regulatory Assets 9,962 16,127 Other Current Assets 30,579 16,826 Total Current Assets 630,041 570,170 Noncurrent Assets Investments 121,177 62,516 Property, Plant and Equipment, net of accumulated depreciation 2,692,460 2,418,375 Regulatory Assets 98,673 95,715 Intangible Assets, net of accumulated amortization 5,743 6,843 Goodwill 37,572 37,572 Other Noncurrent Assets 66,416 51,377 Total Noncurrent Assets 3,022,041 2,672,398 Total Assets $ 3,652,082 $ 3,242,568 Liabilities and Shareholders' Equity Current Liabilities Short-Term Debt $ 69,615 $ 81,422 Accounts Payable 113,574 94,428 Accrued Salaries and Wages 34,398 38,134 Accrued Taxes 17,314 26,590 Regulatory Liabilities 29,307 25,408 Other Current Liabilities 45,582 43,775 Total Current Liabilities 309,790 309,757 Noncurrent Liabilities and Deferred Credits Pensions Benefit Liability 32,614 33,101 Other Postretirement Benefits Liability 27,385 27,676 Regulatory Liabilities 288,928 276,547 Deferred Income Taxes 267,745 237,273 Deferred Tax Credits 14,990 15,172 Other Noncurrent Liabilities 98,397 75,977 Total Noncurrent Liabilities and Deferred Credits 730,059 665,746 Commitments and Contingencies Capitalization Long-Term Debt 943,734 824,059 Shareholders' Equity Common Shares 209,140 208,553 Additional Paid-In Capital 429,089 426,963 Retained Earnings 1,029,738 806,342 Accumulated Other Comprehensive Income 532 1,148 Total Shareholders' Equity 1,668,499 1,443,006 Total Capitalization 2,612,233 2,267,065 Total Liabilities and Shareholders' Equity $ 3,652,082 $ 3,242,568 OTTER TAIL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Twelve Months Ended December 31, (in thousands) 2024 2023 Operating Activities Net Income $ 301,662 $ 294,191 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 107,121 97,954 Deferred Tax Credits (182 ) (744 ) Deferred Income Taxes 23,057 13,508 Investment (Gains) Losses (5,482 ) (7,222 ) Stock Compensation Expense 9,529 7,753 Other, net (3,111 ) (423 ) Change in Operating Assets and Liabilities: Receivables 11,179 (12,750 ) Inventories 3,691 (2,450 ) Regulatory Assets 5,194 12,479 Other Assets (11,640 ) 2,817 Accounts Payable 14,826 (9,988 ) Accrued and Other Liabilities (10,371 ) 6 Regulatory Liabilities 16,821 20,973 Pension and Other Postretirement Benefits (9,563 ) (11,605 ) Net Cash Provided by Operating Activities 452,731 404,499 Investing Activities Capital Expenditures (358,650 ) (287,134 ) Proceeds from Disposal of Noncurrent Assets 8,849 6,225 Purchases of Investments and Other Assets (61,573 ) (8,378 ) Net Cash Used in Investing Activities (411,374 ) (289,287 ) Financing Activities Net (Repayments) Borrowings on Short-Term Debt (11,807 ) 73,218 Proceeds from Issuance of Long-Term Debt 120,000 — Dividends Paid (78,266 ) (73,061 ) Payments for Shares Withheld for Employee Tax Obligations (6,457 ) (3,088 ) Other, net (549 ) (904 ) Net Cash Provided by (Used in) Financing Activities 22,921 (3,835 ) Net Change in Cash and Cash Equivalents 64,278 111,377 Cash and Cash Equivalents at Beginning of Period 230,373 118,996 Cash and Cash Equivalents at End of Period $ 294,651 $ 230,373 OTTER TAIL CORPORATION SEGMENT RESULTS (unaudited) Three Months Ended December 31, Twelve Months Ended December 31, (in thousands) 2024 2023 2024 2023 Operating Revenues Electric $ 139,818 $ 132,362 $ 524,515 $ 528,359 Manufacturing 66,632 92,846 342,592 402,781 Plastics 96,661 89,105 463,441 418,026 Total Operating Revenues $ 303,111 $ 314,313 $ 1,330,548 $ 1,349,166 Net Income (Loss) Electric $ 21,478 $ 17,005 $ 90,963 $ 84,424 Manufacturing (590 ) 1,177 13,681 21,454 Plastics 38,919 39,508 200,747 187,748 Corporate (4,957 ) 76 (3,729 ) 565 Total Net Income $ 54,850 $ 57,766 $ 301,662 $ 294,191 View source version on Contacts Media Contact: Stephanie Hoff, Director of Corporate Communications, (218) 739-8535 Investor Contacts: Beth Eiken, Manager of Investor Relations, (701) 451-3571Tyler Nelson, VP of Finance and Treasurer, (701) 451-3576 Sign in to access your portfolio
