Financial Performance & Outlook - Q2 2023 operating revenues were $337.7 million, compared to $400.0 million in Q2 2022[27] - Q2 2023 net income was $82.0 million, down from $85.9 million in Q2 2022[28] - Q2 2023 diluted EPS decreased by 5%[28] - The company anticipates diluted EPS for 2023 to be in the range of $5.70 to $6.00[167] - The company targets a long-term EPS growth rate of 5-7%[179] Segment Performance - The electric segment earnings increased by 4% year-to-date[28] - The manufacturing segment earnings decreased by 21% year-to-date[29] - The plastics segment earnings are expected to decline from record Q2 2022 levels, down 9% year-to-date[28] Capital Investments & Rate Base - The company plans $1.1 billion in capital spending for the electric segment from 2023 to 2027[70] - The company projects a rate base CAGR of 6.5% from 2022 to 2027[69] - Approximately 41% of the company's five-year capital expenditures are planned to be recovered through riders[76] ESG & Renewable Energy - The company targets a 50% reduction in carbon emissions from owned generation resources below 2005 levels by 2025[42] - The company aims for more than 50% of owned and contracted energy generation to be renewable by 2025[42]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Exact name of registrant as specified in its charter) Minnesota (State or other jurisdiction of incorporation or organization) 215 South Cascade Street, Box 496, Fergus Falls, Minnesota (Address of principal executive offices) (I.R.S. Employer Identification No.) 56538-0496 (Zip Code) (Mark One) ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 0 ...

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.49 for Q1 2023, a decline compared to the record earnings of the previous year, primarily due to lower earnings from the Plastics segment [16][45] - The earnings guidance for 2023 has been increased to a range of $4.55 to $4.85 per share, reflecting a 20% increase from the previous guidance [17][49] Business Segment Data and Key Metrics Changes - The Electric segment net earnings increased by $4 million or approximately 21% compared to Q1 2022, driven by higher commercial and industrial sales volumes [35] - The Manufacturing segment earnings increased by $2.8 million or 68% over the same period, supported by a 19% increase in sales volumes at BTD [37] - The Plastics segment saw a decrease in net earnings of $17.2 million or 34% compared to 2022, with sales volumes declining by 46% [47] Market Data and Key Metrics Changes - Steel prices were 21% lower in Q1 2023 compared to the previous year, impacting revenues but not earnings due to pass-through pricing [46] - PVC pipe prices remained near historic highs, increasing approximately 7% from the first quarter of last year [38] Company Strategy and Development Direction - The company is targeting a 50% reduction in carbon emissions from its own generation resources by 2025 and 97% by 2050 [20] - A capital investment plan of $1.1 billion over the next five years has been established, with a focus on renewable energy projects [13][30] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about inflationary pressures and rising interest rates impacting earnings in 2023, particularly related to variable rate debt [41] - The company anticipates a decline in profitability in the latter half of 2023, with potential upside in Plastics segment earnings if market conditions improve [63] Other Important Information - The company has a consolidated equity layer of 59% as of March 31, 2023, which is expected to increase further [55] - The company is actively managing the impacts of inflation across all operating companies [41] Q&A Session Summary Question: What conditions could cause plastic pricing to be more resilient than expected? - Management indicated that if sales prices remain strong, there could be potential upside, but they have not reflected this in guidance [70] Question: What is the contract structure for BTD? - The backlog for BTD is approximately $289 million as of March 31, 2023, down from $339 million a year ago, influenced by steel price differences [76] Question: Is there visibility into distributor orders for PVC pipe? - Management noted that visibility into orders varies, with distributors managing inventory tightly and placing orders based on specific needs [80] Question: Have there been signs of new competition in the PVC market? - Management stated that there have not been any new competitors entering the market due to the significant cost of building a PVC pipe plant [81]

Q1 2023 Earnings Conference Call May 2, 2023 Company Overview ACCENT 5 140, 41, 32 Electric Platform Electric 65% 3 | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ACCENT 1 | | | | | | | | | | | | | | | | | | | | | | | | Default Color 0, 123, 195 | | | | | | | | | | | | | | | | | | | | | ACCENT 4 245, 122, 30 ACCENT 6 48, 138, 35 | --- | ...

Financial Performance - Total operating revenues for 2022 reached $1,460,209,000, a 22% increase from $1,196,844,000 in 2021[306]. - Net income for 2022 was $284,184,000, representing a 61% increase compared to $176,769,000 in 2021[307]. - Basic earnings per share increased to $6.83 in 2022, up from $4.26 in 2021, reflecting a 60% growth[306]. - Operating income for 2022 was $390,439,000, a 56.4% increase from $249,708,000 in 2021[306]. - The company reported a total comprehensive income of $291,623,000 for 2022, compared to $178,752,000 in 2021, marking a 63.1% increase[307]. - Total assets as of December 31, 2022, were $2,901,661,000, an increase of 5.3% from $2,754,830,000 in 2021[305]. - Total current liabilities decreased significantly to $237,636,000 in 2022, down 38.6% from $387,699,000 in 2021[305]. - Shareholders' equity increased to $1,217,317,000 in 2022, a 22.9% rise from $990,777,000 in 2021[305]. - Net cash provided by operating activities increased to $389,309,000 in 2022 from $231,243,000 in 2021, representing a 68.4% growth[309]. Segment Performance - The Electric segment generated $549,699,000 in revenue for 2022, up 14% from $480,321,000 in 2021[357]. - The Plastics segment saw a revenue increase of 35% in 2022, reaching $512,527,000 compared to $380,229,000 in 2021[357]. - The Manufacturing segment earns revenue from the production and delivery of custom-made or standardized parts, recognizing revenue at the point of shipment[317]. - The Electric segment generates revenue primarily from the sale of electricity to retail customers at rates approved by state regulatory commissions[316]. - The Plastics segment generates revenue predominantly from the sale of standardized PVC pipe products, with revenue recognized at the point of shipment[319]. Debt and Financing - As of December 31, 2022, the company had $8.2 million and $91.2 million of short-term debt outstanding, with a one percentage point change in interest rates potentially impacting interest charges by approximately $0.3 million[290]. - Long-term debt, net of current maturities, rose to $823,821,000 in 2022, up from $734,014,000 in 2021[305]. - The company issued $90.0 million of Series 2022A Senior Unsecured Notes in 2022, which were used to repay short-term borrowings and fund capital expenditures[383]. - OTP's total outstanding short- and long-term borrowings amounted to $832.0 million as of December 31, 2022, compared to $855.2 million in 2021[379]. - The weighted-average interest rate on all outstanding borrowings as of December 31, 2022, was 5.61%, compared to 1.42% in 2021[381]. Asset Management - Total inventories decreased to $145,952,000 in 2022 from $148,490,000 in 2021, a decline of 1.0%[324]. - Receivables decreased to $146,041,000 in 2022 from $176,789,000 in 2021, reflecting a reduction in trade receivables[358]. - Identifiable assets increased to $2,901,661,000 in 2022 from $2,754,830,000 in 2021, showing growth in asset base[354]. - Cash and cash equivalents at the end of 2022 were $118,996,000, up from $1,537,000 at the end of 2021[309]. Risk Management - The Electric segment's exposure to commodity price risk is largely mitigated by the ratemaking process, allowing recovery of purchased power and fuel costs from electric customers[285]. - The Manufacturing segment is exposed to commodity price risk from raw materials like steel and aluminum, with potential impacts on operating revenues if cost management efforts are unsuccessful[287]. - The Plastics segment is sensitive to PVC resin price volatility, affecting sales volumes and gross profit margins significantly[288]. - The company does not engage in hedging activities for commodity price risk within its Manufacturing and Plastics segments[289]. - The company has not used hedging instruments to manage interest rate risk, maintaining a ratio of fixed-rate debt to total debt within a specified range[292]. Pension and Employee Benefits - The company’s pension plan assets totaled $313.8 million as of December 31, 2022, down from $387.2 million in 2021[395]. - The actual allocation for Return Enhancement investments was 48% in 2022, within the permitted range of 35% to 60%[393]. - The net periodic benefit cost for the pension plan was $3.1 million in 2022, down from $7.7 million in 2021, representing a decrease of approximately 60%[398]. - The accumulated benefit obligation of the pension plan was $283.2 million in 2022, down from $378.3 million in 2021, a decrease of about 25%[396]. - The company contributed $20 million to the pension plan in 2022, up from $10 million in 2021[396]. Taxation - The total provision for income taxes in 2022 was $73.351 million, with an effective tax rate of 20.5%, compared to $36.052 million and 16.9% in 2021[405]. - The company has deferred tax assets totaling $168.098 million and deferred tax liabilities of $389.400 million as of December 31, 2022, resulting in deferred income taxes of $(221.302) million[406]. Investments and Acquisitions - The company acquired the Ashtabula III wind farm for $50.6 million on January 3, 2023, enhancing its renewable energy portfolio[408]. - OTP's construction work in progress increased to $113.9 million in 2022 from $74.9 million in 2021, reflecting ongoing investments[371]. Compliance and Governance - The company maintains effective internal control over financial reporting, as confirmed by independent auditors[294]. - Financial covenants require a maximum debt to total capitalization ratio of 0.60 to 1.00 and a minimum interest and dividend coverage ratio of 1.50 to 1.00; as of December 31, 2022, the company was in compliance[386].

Financial Data and Key Metrics Changes - Consolidated revenues increased approximately 22% to $1.46 billion, and consolidated earnings were $284 million, with diluted earnings per share of $6.78, a 60% increase from 2021 [10][15][40] - Return on equity in 2022 was 25.6%, compared to 19.2% in 2021 [40] - Corporate costs were impacted by increased employee healthcare costs and professional service expenses, but were partially offset by lower interest expenses [26][49] Business Segment Data and Key Metrics Changes - Electric segment earnings improved by 10%, driven by increased revenues from commercial and industrial customers [10][23] - Manufacturing segment net earnings increased by $3.8 million, with an 18% increase in revenues due to higher sales volumes [24] - Plastics segment net earnings increased by $97.6 million, with revenues up approximately 35% due to significant increases in sales price per pound of PVC pipe [25][39] Market Data and Key Metrics Changes - The recreational vehicle and lawn & garden markets are expected to soften in 2023, while agriculture, power generation, and horticulture markets are anticipated to remain strong [21] - The backlog for the Manufacturing segment as of December 31, 2022, was approximately $388 million, compared to $391 million a year ago [28] Company Strategy and Development Direction - The company is targeting to reduce carbon emissions from owned generation resources by approximately 50% from 2005 levels by 2025 and 97% by 2050 [17] - A capital investment plan of $1.1 billion over the next five years is expected to produce a 6.4% annual compounded growth rate in rate base [37] - The company expects to produce compound growth in earnings per share of 5% to 7% off a base of 2024 earnings [69] Management's Comments on Operating Environment and Future Outlook - Management anticipates a transitional year in 2023 as industry conditions within the PVC pipe industry normalize, with expected earnings per share in the range of $3.76 to $4.06 [44][80] - The company is actively managing the impacts of inflation across all operating companies and monitoring various economic indicators [29][50] Other Important Information - The company completed the purchase of the Ashtabula III wind farm, providing a lower-cost alternative than maintaining the purchase power agreement [19] - The Inflation Reduction Act has increased the investment tax credit on the Hoot Lake Solar project from 26% to 40% [6] Q&A Session Summary Question: How is the balance sheet affecting strategic plans for the utility? - Management noted that the strong balance sheet provides additional flexibility for future rate base projects, with an uplift in the capital plan driven by the Inflation Reduction Act [34][35] Question: Can you provide details on the Plastics expansion? - The total costs for the Plastics expansion, including a second line, are expected to be around $50 million, with the expansion timeline set for 2027 [36][73] Question: What is the outlook for the utility and rate cases? - Management does not anticipate any rate cases in 2023, with the possibility of one in North Dakota [63] Question: What are the expectations for earnings in 2023? - Earnings for the Manufacturing segment are expected to decline by 10% due to a slowing manufacturing sector, while earnings at T.O. Plastics are expected to be flat year-over-year [46][47] Question: How is the company managing inflationary pressures? - The company expects lower corporate costs in 2023, but inflationary increases in salary and benefit costs are anticipated [49]

2022 Earnings Conference Call February 14, 2023 Forward-Looking Statement Except for historical information contained here, the statements in this presentation 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" ...

Financial Data and Key Metrics Changes - Otter Tail Corporation achieved diluted earnings per share of $2.01, a 60% increase over Q3 2021 [8] - Consolidated revenues increased by 21% and net earnings rose by 60% compared to Q3 2021 [24] - The company experienced a historic 9.8% earnings per share CAGR, excluding the plastics companies [9] Business Segment Data and Key Metrics Changes - The Electric segment net earnings increased by $2.3 million or approximately 10.3% over Q3 2021, driven by an 18.4% increase in retail megawatt hour sales [25] - The Manufacturing segment's net earnings increased by $2 million, supported by a 17% increase in sales volumes at BTD [27] - The Plastics segment's net earnings increased by $27.6 million compared to Q3 2021, although sales volume decreased by 15% due to softening demand [29][22] Market Data and Key Metrics Changes - Demand for PVC pipe began to soften in Q3 as distributors and contractors used up high-priced inventory [21] - Rising interest rates are impacting housing starts, leading to project cancellations or delays into 2023 [36] Company Strategy and Development Direction - The company is targeting a 50% reduction in carbon emissions from owned generation resources by 2025 and 97% by 2050 [11] - Otter Tail Power is actively participating in MISO's long-range transmission planning projects, with an estimated capital investment of $330 million [15] - The company anticipates a shift in earnings mix to approximately 65% from the Electric segment and 35% from the Manufacturing platform by 2024 [40] Management's Comments on Operating Environment and Future Outlook - Management noted a slowdown in overall demand and rising interest rates affecting housing starts [36] - The company expects elevated earnings from the manufacturing platform into 2023, with a normalized earnings range for the Plastics segment projected between $36 million to $41 million [40] - The revised diluted earnings per share guidance for 2022 is now $6.42 to $6.72, down from the previous range of $6.83 to $7.13 [60] Other Important Information - The company is monitoring various economic indicators to ensure preparedness for changes in the market [37] - Corporate costs are expected to increase in 2022 due to investment losses and higher healthcare costs [37] Q&A Session Summary Question: Plastics segment guidance and demand outlook - The revised guidance for the Plastics segment reflects a midpoint of $0.48 for Q4 2022, down from $0.90 in Q4 2021, due to volumetric risks and margin compression from resin price declines [44] Answer: - Management acknowledged the fall-off in demand and resin price reductions impacting performance, with expectations of elevated earnings but lower than current levels moving into 2023 [49][50] Question: Regulated utility earnings growth - Inquiry about whether the step-up in guidance for the utility reflects a new level of earnings power due to ongoing customer demand [51] Answer: - Management confirmed that favorable pricing from a commercial customer contributed to the uplift, but caution was advised regarding the sustainability of margins [51] Question: BTD operational efficiency - Question regarding whether BTD's widening margins are sustainable due to improved operations [53] Answer: - Management indicated that improved customer take rates are leading to better efficiencies and productivity, which should support margins moving forward [55]

Q3 2022 EARNINGS CONFERENCE CALL November 1, 2022 FORWARD-LOOKING STATEMENT Except for historical information contained here, the statements in this presentation 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," "goal," "intend," "may," "outlook," "plan," "possible," "potential," "projected," "should," "will," "would" and similar words and expressions are intended to i ...

Sidoti Fall 2022 Virtual Conference September 21-22, 2022 FORWARD-LOOKING STATEMENT Except for historical information contained here, the statements in this presentation 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," "goal," "intend," "may," "outlook," "plan," "possible," "potential," "projected," "should," "will," "would" and similar words and expressions are inten ...