OTTR Otter Tail Corporation

Otter Tail Corporation (Nasdaq: OTTR) today announced financial results for the quarter and year ended December 31, 2023.

 

2023 SUMMARY

 

(in millions, except per share amounts)

Q4 2023

 

Q4 2022

 

2023

 

2022

Operating Revenues

$

314.3

 

$

301.4

 

$

1,349.2

 

$

1,460.2

Net Income

$

57.8

 

$

42.0

 

$

294.2

 

$

284.2

Diluted Earnings Per Share

$

1.37

 

$

1.00

 

$

7.00

 

$

6.78

Compared to the year ended December 31, 2022:

• Consolidated operating revenues decreased 8% to $1.3 billion.
• Consolidated net income increased 4% to $294.2 million.
• Diluted earnings per share increased 3% to $7.00 per share.
• The corporation achieved a consolidated return on equity of 22.1% on an equity ratio of 61.4%.

The corporation’s board of directors increased the quarterly common stock dividend to $0.4675 per share, an indicated annual dividend rate of $1.87 per share in 2024, a 7% increase from $1.75 per share in 2023.

CEO OVERVIEW

“Otter Tail Corporation, through the efforts of our employees and the strength of our diversified business model, produced record earnings in 2023, beating the record set last year,” said President and CEO Chuck MacFarlane. "Electric segment earnings grew 6 percent compared to 2022, driven by the recovery of rate base investments and increased commercial and industrial sales. Manufacturing segment earnings increased modestly from 2022. Plastics segment earnings fell 4 percent from 2022 primarily due to a decrease in sales volumes. While Plastics segment earnings declined slightly from the extraordinary results produced in 2022, this segment continues to capitalize on favorable industry conditions and produce strong financial results compared to pre-2021 levels. A significant reduction in our corporate costs also drove 2023 earnings as we benefited from returns on our short-term investments funded by the significant cash flows our businesses have generated over the last three years.

“We continue to identify opportunities to reinvest in our businesses. In 2023, Otter Tail Power completed the purchase of Ashtabula III, a 62 MW wind facility, and placed Hoot Lake Solar, a 49 MW solar facility, into service. Expansion projects are underway for both BTD Manufacturing and Vinyltech as we add capacity to support our customers and future growth opportunities.

“We updated our Electric segment’s 5 year capital expenditure plan to $1.3 billion, an increase of approximately $200 million from our previous plan. Our updated plan is expected to produce rate base growth at a compounded annual rate of 7.7 percent.

“We ended 2023 in a position of financial strength, with a strong balance sheet and ample liquidity. We expect to fund our capital expenditures and fuel our earnings growth over the next five years without the need for additional equity financing.

“Our long-term focus remains unchanged - executing our strategy to grow our business and achieve operational, commercial and talent excellence to strengthen our position in the markets we serve. We believe our businesses are well-positioned to achieve our objectives and to deliver on our financial targets, including producing a compounded annual growth rate in consolidated earnings per share of 5 to 7 percent over the long-term based on an earnings mix of approximately 65 percent from our Electric segment and 35 percent from our Manufacturing and Plastics segments.

“We are initiating our 2024 diluted earnings per share guidance range of $5.13 to $5.43. Our 2024 guidance reflects Electric segment earnings growth of approximately 7 percent and a decline in our Plastics segment earnings, driven by a continuing downward trend in sales prices and resin spreads, but partially offset by increased sales volumes. We expect declines in sales prices and resin spreads will occur throughout 2024 and into 2025."

CASH FLOWS AND LIQUIDITY

Our consolidated cash provided by operating activities was a record $404.5 million in 2023, compared to $389.3 million in 2022, with the increase primarily due to a $10.0 million increase in net income and a decrease in pension plan contributions due to the plan's funded status, partially offset by an increase in working capital. Investing activities included capital expenditures of $287.1 million in 2023, primarily related to capital investments within our Electric segment, including the purchase of the Ashtabula III wind farm and investments in our Hoot Lake Solar and wind repowering projects. Financing activities in 2023 included net short-term borrowings of $73.2 million and dividend payments of $73.1 million.

As of December 31, 2023, we had $249.4 million of available liquidity under our credit facilities and $230.4 million of available cash and cash equivalents, for total available liquidity of $479.8 million.

 

ANNUAL SEGMENT OPERATING RESULTS

 

Electric Segment

($ in thousands)

2023

 

2022

 

$ Change

 

% Change

Operating Revenues

$

528,359

 

$

549,699

 

$

(21,340

)

 

(3.9

) %

Net Income

 

84,424

 

 

79,974

 

 

4,450

 

 

5.6

 

 

 

 

 

 

 

 

 

Retail MWh Sales

 

5,772,215

 

 

5,592,368

 

 

179,847

 

 

3.2

%

Heating Degree Days

 

6,259

 

 

7,122

 

 

(863

)

 

(12.1

)

Cooling Degree Days

 

590

 

 

531

 

 

59

 

 

11.1

 

 

The following table shows heating and cooling degree days as a percent of normal.

 

 

2023

 

2022

Heating Degree Days

98.4

%

 

112.5

%

Cooling Degree Days

127.2

%

 

113.5

%

 

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 2023 and 2022.

 

 

2023 vs Normal

 

2023 vs 2022

 

2022 vs Normal

Effect on Diluted Earnings Per Share

$

0.02

 

$

(0.09

)

 

$

0.11

 

Operating Revenues decreased $21.3 million primarily due to decreased fuel recovery and wholesale revenues, and the impact of unfavorable weather, partially offset by increased commercial and industrial sales volumes and rider revenue. The decrease in fuel recovery revenues was primarily due to lower purchased power and fuel costs arising from decreased market energy costs and natural gas prices. Wholesale revenues decreased due to a decrease in wholesale electric prices, largely driven by decreased fuel costs. Commercial and industrial sales volumes increased compared to the previous year as a result of increased demand, including a new commercial customer load in North Dakota added during 2022. The increase in rider revenue was driven by the recovery of costs from the acquisition of the Ashtabula III wind farm and our Hoot Lake Solar project, which were completed during the year.

Net Income increased $4.5 million primarily due to increased rider revenue, increased commercial and industrial sales, and lower pension and other postretirement benefit costs, partially offset by increased operating and maintenance expenses, increased depreciation expense, and the impact of unfavorable weather. Increased operating and maintenance expenses included strategic spending on customer reliability initiatives, increased labor and employee benefit costs, and increased insurance expenses.

 

Manufacturing Segment

 

(in thousands)

2023

 

2022

 

$ Change

 

% Change

Operating Revenues

$

402,781

 

$

397,983

 

$

4,798

 

1.2

%

Net Income

 

21,454

 

 

20,950

 

 

504

 

2.4

 

 

Operating Revenues increased $4.8 million primarily due to a 12% increase in sales volumes at BTD Manufacturing (BTD), our contract metal fabricator, driven by strong end market demand in the construction, industrial, and agricultural segments. Operating revenues also benefited from sales price increases implemented in response to labor and non-steel material cost inflation. Sales price increases and sales volume growth were partially offset by decreased steel prices, resulting in an 11% decrease in material costs, which are passed through to customers. Operating revenues at T.O. Plastics, our plastics thermoforming manufacturer, decreased primarily due to decreased sales volumes of horticulture products, as order and delivery lead times for these products have begun to normalize after volatility experienced in the previous year and customers reduced their order demand and are beginning to return to normal seasonal buying patterns.

Net Income increased $0.5 million due to increased operating revenues at BTD, partially offset by lower sales volumes at T.O. Plastics, increased depreciation expense, and increased operating expenses due to inflationary cost pressures and increased variable operating costs.

 

Plastics Segment

 

(in thousands)

2023

 

2022

 

$ Change

 

% Change

Operating Revenues

$

418,026

 

$

512,527

 

$

(94,501

)

 

(18.4

)%

Net Income

 

187,748

 

 

195,374

 

 

(7,626

)

 

(3.9

)

 

Operating Revenues decreased $94.5 million primarily due to a 14% decrease in sales volumes. Sales volume decreases were attributable to softer end market demand coupled with distributor inventory management, as these customers reduced their inventory levels during the first half of the year after previously building higher inventory levels in response to market uncertainty and supply chain challenges. Operating revenue decreases were also the result of a 5% decrease in sales prices, as prices in 2023 decreased from record highs in 2022.

Net Income decreased $7.6 million due to decreased operating revenues, as described above, partially offset by an increase in gross profit margins, as decreases in the cost of PVC resin and other input materials outpaced decreases in sales prices.

 

Corporate

 

(in thousands)

2023

 

2022

 

$ Change

 

% Change

Net Income (Loss)

$

565

 

$

(12,114

)

 

$

12,679

 

104.7

%

 

Net Income at our corporate cost center increased $12.7 million, from a $12.1 million loss in the prior year primarily due to increased investment income earned on our short-term cash equivalent investments, lower health care costs related to our self-funded health insurance program, and investment gains from our corporate-owned life insurance policies.

 

FOURTH QUARTER OPERATING RESULTS

 

Consolidated Results

 

(in thousands, except per share amounts)

2023

 

2022

 

$ Change

 

% Change

Operating Revenues

$

314,313

 

$

301,409

 

$

12,904

 

 

4.3

%

Operating Expenses

 

244,233

 

 

246,468

 

 

(2,235

)

 

(0.9

)

Operating Income

 

70,080

 

 

54,941

 

 

15,139

 

 

27.6

 

Other Expense

 

1,109

 

 

5,728

 

 

(4,619

)

 

(80.6

)

Income Before Income Taxes

 

68,971

 

 

49,213

 

 

19,758

 

 

40.1

 

Income Tax Expense

 

11,205

 

 

7,208

 

 

3,997

 

 

55.5

 

Net Income

$

57,766

 

$

42,005

 

$

15,761

 

 

37.5

 

Diluted Earnings Per Share

$

1.37

 

$

1.00

 

$

0.37

 

 

37.0

%

 

Electric Segment

Electric segment net income was $17.0 million, which was consistent with the fourth quarter of 2022. Compared to last year, operating revenues decreased primarily due to lower fuel recovery revenues driven by lower purchased power costs, the impact of unfavorable weather, and decreased transmission revenue, partially offset by an increase in rider revenue. Operating and maintenance expenses increased compared to last year including increases in labor and employee benefit cost, vegetative maintenance, and insurance expenses. The decrease in operating revenues and increase in operating and maintenance expenses were largely offset by lower pension and other postretirement benefit costs.

Manufacturing Segment

Manufacturing segment net income was $1.2 million, a $1.9 million decrease from the fourth quarter of 2022. The decrease was primarily due to decreased sales volumes of horticulture products at T.O. Plastics and increased operating expenses, partially offset by increased sales volumes and sales price increases implemented in response to labor and non-steel material cost inflation at BTD, as well as a $0.6 million increase in scrap revenues, driven primarily by higher scrap metal prices.

Plastics Segment

Plastics segment net income was $39.5 million, a $14.9 million increase from the fourth quarter of 2022, primarily due to a 59% increase in sales volumes. In the fourth quarter of 2022, demand for PVC pipe was lower as distributor customers strategically managed their inventory levels and made efforts to sell through higher-priced inventories. The increase in sales volumes was partially offset by decreased sales prices, as sales prices decreased 14% from the fourth quarter of 2022.

Corporate

Corporate net income was $0.1 million, a $2.8 million increase from a $2.7 million loss in the fourth quarter of 2022, primarily due investment income earned on our short-term cash equivalent investments and lower health care costs related to our self-funded health insurance program.

2024 BUSINESS OUTLOOK

We anticipate 2024 diluted earnings per share to be in the range of $5.13 to $5.43, with an earnings mix of approximately 41% from our Electric segment and 59% from our Manufacturing and Plastics segments, net of corporate costs. This anticipated mix deviates from our long-term expected earnings mix of approximately 65% Electric/35% non-Electric as we expect Plastics segment earnings to remain elevated in 2024 compared to our long-term view of normal earnings for this segment.

The segment components of our 2024 diluted earnings per share guidance compared with actual earnings for 2023 are as follows:

 

 

 

 

2023 EPS by Segment

 

2024 EPS Guidance

 

 

 

Low

 

High

Electric

 

 

$

2.01

 

 

$

2.13

 

 

$

2.17

 

Manufacturing

 

 

 

0.51

 

 

 

0.51

 

 

 

0.55

 

Plastics

 

 

 

4.47

 

 

 

2.62

 

 

 

2.81

 

Corporate

 

 

 

0.01

 

 

 

(0.13

)

 

 

(0.10

)

Total

 

 

$

7.00

 

 

$

5.13

 

 

$

5.43

 

Return on Equity

 

 

 

22.1

%

 

 

14.3

%

 

 

15.1

%

The following items contribute to our 2024 earnings guidance:

Electric Segment - We expect segment earnings to increase 7% over 2023 based on the following key assumptions:

• Normal weather conditions in 2024.
• Returns generated from an increase in average rate base of 8.5% in 2024, compared to 2023.
• Interim revenue increase, which commenced January 1, 2024, resulting from the general rate case filed in North Dakota.
• Lower operating and maintenance expenses driven by lower anticipated employee benefit cost and discretionary spending.
• Increased depreciation expense resulting from our capital expenditures.
• Increased interest expense from increased borrowings to fund our capital investments.

Manufacturing Segment - We expect segment earnings in 2024 to increase 4% over 2023 based on the following key assumptions:

• Higher sales volumes and favorable product mix, improved productivity and lower incentive costs at BTD, partially offset by continued cost pressures in the business.
• Product pricing pressures and increased manufacturing cost at T.O. Plastics driving a decline in earnings in 2024.

Plastics Segment - We expect segment earnings to decline in 2024 based on the following key assumptions:

• Anticipated margin compression resulting from a continued downward trend in product prices over the course of 2024.
• Increased sales volumes as distributor purchasing normalizes in 2024 after destocking and inventory management in 2023.

Corporate Costs - We anticipate corporate costs will increase in 2024 primarily due to the following:

• Lower anticipated market-based gains on our corporate investments.
• Expected increase in claims in our self-insured health plan.
• Lower incentive compensation cost.
• Higher earnings on cash equivalent investments from an anticipated increase in our average investment balance.

CAPITAL EXPENDITURES

The following provides a summary of actual capital expenditures for the year ended December 31, 2023, 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)

 

 

 

2023

 

 

2024

 

2025

 

2026

 

2027

 

2028

 

Total 2024 - 2028

Electric Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renewables

 

 

 

 

 

 

$

118

 

 

$

93

 

 

$

33

 

 

$

113

 

 

$

129

 

 

$

486

Transmission

 

 

 

 

 

 

 

51

 

 

 

85

 

 

 

111

 

 

 

98

 

 

 

100

 

 

 

445

Distribution

 

 

 

 

 

 

 

38

 

 

 

39

 

 

 

36

 

 

 

38

 

 

 

39

 

 

 

190

Other

 

 

 

 

 

 

 

67

 

 

 

37

 

 

 

30

 

 

 

27

 

 

 

25

 

 

 

186

Total Electric Segment

 

 

 

$

241

 

 

 

$

274

 

 

$

254

 

 

$

210

 

 

$

276

 

 

$

293

 

 

$

1,307

Manufacturing and Plastics Segments

 

 

 

 

46

 

 

 

 

79

 

 

 

35

 

 

 

27

 

 

 

25

 

 

 

26

 

 

 

192

Total Capital Expenditures

 

 

 

$

287

 

 

 

$

353

 

 

$

289

 

 

$

237

 

 

$

301

 

 

$

319

 

 

$

1,499

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Electric Utility Average Rate Base

 

 

 

$

1,742

 

 

 

$

1,890

 

 

$

2,080

 

 

$

2,200

 

 

$

2,350

 

 

$

2,520

 

 

 

Annual Rate Base Growth

 

 

 

 

7.3

%

 

 

 

8.5

%

 

 

10.1

%

 

 

5.8

%

 

 

6.8

%

 

 

7.2

%

 

 

 

Our updated capital expenditure plan for the next five years (2024-2028) 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 7.7% over the next five years and will serve as a key driver in increasing Electric segment earnings over this timeframe. Our previous five year capital expenditure plan (2023-2027) had a compounded annual growth rate on average rate base of 6.5%. Our capital expenditure plan in our Manufacturing and Plastics segments includes investments to bring additional capacity to our operations, which will provide an opportunity for organic growth within these segments.

CONFERENCE CALL AND WEBCAST

The corporation will host a live webcast on Tuesday, February 13, 2024, 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 www.ottertail.com/presentations 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,” “could,” “estimate,” “expect,” “future,” “goal,” “intend,” “likely,” “may,” “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 2024 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, long-term investment risk, seasonal weather patterns and extreme weather events, counterparty credit risk, 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, 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 www.ottertail.com. 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)

2023

 

2022

 

2023

 

2022

Operating Revenues

 

 

 

 

 

 

 

Electric

$

132,362

 

 

$

145,587

 

 

$

528,359

 

 

$

549,699

 

Product Sales

 

181,951

 

 

 

155,822

 

 

 

820,807

 

 

 

910,510

 

Total Operating Revenues

 

314,313

 

 

 

301,409

 

 

 

1,349,166

 

 

 

1,460,209

 

Operating Expenses

 

 

 

 

 

 

 

Electric Production Fuel

 

14,410

 

 

 

10,572

 

 

 

60,339

 

 

 

65,110

 

Electric Purchased Power

 

20,360

 

 

 

35,677

 

 

 

78,292

 

 

 

100,281

 

Electric Operating and Maintenance Expense

 

56,659

 

 

 

54,917

 

 

 

191,263

 

 

 

181,378

 

Cost of Products Sold (excluding depreciation)

 

102,793

 

 

 

99,358

 

 

 

454,122

 

 

 

542,944

 

Nonelectric Selling, General, and Administrative Expenses

 

21,230

 

 

 

18,738

 

 

 

72,663

 

 

 

69,718

 

Depreciation and Amortization

 

25,319

 

 

 

22,768

 

 

 

97,954

 

 

 

92,597

 

Electric Property Taxes

 

3,462

 

 

 

4,438

 

 

 

16,614

 

 

 

17,742

 

Total Operating Expenses

 

244,233

 

 

 

246,468

 

 

 

971,247

 

 

 

1,069,770

 

Operating Income

 

70,080

 

 

 

54,941

 

 

 

377,919

 

 

 

390,439

 

Other Income and (Expense)

 

 

 

 

 

 

 

Interest Expense

 

(9,392

)

 

 

(8,818

)

 

 

(37,677

)

 

 

(36,016

)

Nonservice Components of Postretirement Benefits

 

3,475

 

 

 

250

 

 

 

10,597

 

 

 

1,075

 

Other Income (Expense), net

 

4,808

 

 

 

2,840

 

 

 

12,650

 

 

 

2,037

 

Income Before Income Taxes

 

68,971

 

 

 

49,213

 

 

 

363,489

 

 

 

357,535

 

Income Tax Expense

 

11,205

 

 

 

7,208

 

 

 

69,298

 

 

 

73,351

 

Net Income

$

57,766

 

 

$

42,005

 

 

$

294,191

 

 

$

284,184

 

 

 

 

 

 

 

 

 

Weighted-Average Common Shares Outstanding:

 

 

 

 

 

 

 

Basic

 

41,680

 

 

 

41,600

 

 

 

41,668

 

 

 

41,586

 

Diluted

 

42,065

 

 

 

41,932

 

 

 

42,039

 

 

 

41,931

 

Earnings Per Share:

 

 

 

 

 

 

 

Basic

$

1.39

 

 

$

1.01

 

 

$

7.06

 

 

$

6.83

 

Diluted

$

1.37

 

 

$

1.00

 

 

$

7.00

 

 

$

6.78

 

 

OTTER TAIL CORPORATION

CONSOLIDATED BALANCE SHEETS (unaudited)

 

 

December 31,

(in thousands)

2023

 

2022

Assets

 

 

 

Current Assets

 

 

 

Cash and Cash Equivalents

$

230,373

 

$

118,996

Receivables, net of allowance for credit losses

 

157,143

 

 

144,393

Inventories

 

149,701

 

 

145,952

Regulatory Assets

 

16,127

 

 

24,999

Other Current Assets

 

16,826

 

 

18,412

Total Current Assets

 

570,170

 

 

452,752

Noncurrent Assets

 

 

 

Investments

 

62,516

 

 

54,845

Property, Plant and Equipment, net of accumulated depreciation

 

2,418,375

 

 

2,212,717

Regulatory Assets

 

95,715

 

 

94,655

Intangible Assets, net of accumulated amortization

 

6,843

 

 

7,943

Goodwill

 

37,572

 

 

37,572

Other Noncurrent Assets

 

51,377

 

 

41,177

Total Noncurrent Assets

 

2,672,398

 

 

2,448,909

Total Assets

$

3,242,568

 

$

2,901,661

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

Current Liabilities

 

 

 

Short-Term Debt

$

81,422

 

$

8,204

Accounts Payable

 

94,428

 

 

104,400

Accrued Salaries and Wages

 

38,134

 

 

32,327

Accrued Taxes

 

26,590

 

 

19,340

Regulatory Liabilities

 

25,408

 

 

17,300

Other Current Liabilities

 

43,775

 

 

56,065

Total Current Liabilities

 

309,757

 

 

237,636

Noncurrent Liabilities and Deferred Credits

 

 

 

Pensions Benefit Liability

 

33,101

 

 

33,210

Other Postretirement Benefits Liability

 

27,676

 

 

46,977

Regulatory Liabilities

 

276,547

 

 

244,497

Deferred Income Taxes

 

237,273

 

 

221,302

Deferred Tax Credits

 

15,172

 

 

15,916

Other Noncurrent Liabilities

 

75,977

 

 

60,985

Total Noncurrent Liabilities and Deferred Credits

 

665,746

 

 

622,887

Commitments and Contingencies

 

 

 

Capitalization

 

 

 

Long-Term Debt

 

824,059

 

 

823,821

Shareholders’ Equity

 

 

 

Common Shares

 

208,553

 

 

208,156

Additional Paid-In Capital

 

426,963

 

 

423,034

Retained Earnings

 

806,342

 

 

585,212

Accumulated Other Comprehensive Income

 

1,148

 

 

915

Total Shareholders' Equity

 

1,443,006

 

 

1,217,317

Total Capitalization

 

2,267,065

 

 

2,041,138

Total Liabilities and Shareholders' Equity

$

3,242,568

 

$

2,901,661

 

OTTER TAIL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 

 

Twelve Months Ended December 31,

(in thousands)

2023

 

2022

Operating Activities

 

 

 

Net Income

$

294,191

 

 

$

284,184

 

Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:

 

 

 

Depreciation and Amortization

 

97,954

 

 

 

92,597

 

Deferred Tax Credits

 

(744

)

 

 

(745

)

Deferred Income Taxes

 

13,508

 

 

 

32,424

 

Discretionary Contribution to Pension Plan

 

—

 

 

 

(20,000

)

Investment (Gains) Losses

 

(7,222

)

 

 

3,296

 

Stock Compensation Expense

 

7,753

 

 

 

6,814

 

Other, net

 

(423

)

 

 

(1,473

)

Change in Operating Assets and Liabilities:

 

 

 

Receivables

 

(12,750

)

 

 

30,560

 

Inventories

 

(2,450

)

 

 

5,339

 

Regulatory Assets

 

12,479

 

 

 

(2,464

)

Other Assets

 

2,817

 

 

 

(368

)

Accounts Payable

 

(9,988

)

 

 

(29,763

)

Accrued and Other Liabilities

 

6

 

 

 

(5,490

)

Regulatory Liabilities

 

20,973

 

 

 

(6,846

)

Pension and Other Postretirement Benefits

 

(11,605

)

 

 

1,244

 

Net Cash Provided by Operating Activities

 

404,499

 

 

 

389,309

 

Investing Activities

 

 

 

Capital Expenditures

 

(287,134

)

 

 

(171,134

)

Proceeds from Disposal of Noncurrent Assets

 

6,225

 

 

 

4,346

 

Purchases of Investments and Other Assets

 

(8,378

)

 

 

(8,283

)

Net Cash Used in Investing Activities

 

(289,287

)

 

 

(175,071

)

Financing Activities

 

 

 

Net Borrowings (Repayments) on Short-Term Debt

 

73,218

 

 

 

(82,959

)

Proceeds from Issuance of Long-Term Debt

 

—

 

 

 

90,000

 

Payments for Retirement of Long-Term Debt

 

—

 

 

 

(30,000

)

Dividends Paid

 

(73,061

)

 

 

(68,755

)

Payments for Shares Withheld for Employee Tax Obligations

 

(3,088

)

 

 

(2,942

)

Other, net

 

(904

)

 

 

(2,123

)

Net Cash Used in Financing Activities

 

(3,835

)

 

 

(96,779

)

Net Change in Cash and Cash Equivalents

 

111,377

 

 

 

117,459

 

Cash and Cash Equivalents at Beginning of Period

 

118,996

 

 

 

1,537

 

Cash and Cash Equivalents at End of Period

$

230,373

 

 

$

118,996

 

 

OTTER TAIL CORPORATION

SEGMENT RESULTS (unaudited)

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

(in thousands)

2023

 

2022

 

2023

 

2022

Operating Revenues

 

 

 

 

 

 

 

Electric

$

132,362

 

 

$

145,587

 

 

$

528,359

 

 

$

549,699

 

Manufacturing

 

92,846

 

 

 

91,062

 

 

 

402,781

 

 

 

397,983

 

Plastics

 

89,105

 

 

 

64,760

 

 

 

418,026

 

 

 

512,527

 

Total Operating Revenues

$

314,313

 

 

$

301,409

 

 

$

1,349,166

 

 

$

1,460,209

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

 

 

 

 

 

 

Electric

$

18,096

 

 

$

22,374

 

 

$

106,521

 

 

$

113,138

 

Manufacturing

 

2,484

 

 

 

4,047

 

 

 

29,140

 

 

 

29,065

 

Plastics

 

53,565

 

 

 

33,355

 

 

 

254,402

 

 

 

264,578

 

Corporate

 

(4,065

)

 

 

(4,835

)

 

 

(12,144

)

 

 

(16,342

)

Total Operating Income

$

70,080

 

 

$

54,941

 

 

$

377,919

 

 

$

390,439

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

 

 

 

 

 

 

Electric

$

17,005

 

 

$

17,036

 

 

$

84,424

 

 

$

79,974

 

Manufacturing

 

1,177

 

 

 

3,092

 

 

 

21,454

 

 

 

20,950

 

Plastics

 

39,508

 

 

 

24,586

 

 

 

187,748

 

 

 

195,374

 

Corporate

 

76

 

 

 

(2,709

)

 

 

565

 

 

 

(12,114

)

Total Net Income

$

57,766

 

 

$

42,005

 

 

$

294,191

 

 

$

284,184

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240212757074/en/

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