Otter Tail (US:OTTR)2022-02-15 20:03Financial Data and Key Metrics Changes - The company achieved earnings per share of $4.23, an increase of 80% over 2020 [10] - Operating revenues for 2021 were $1.196 billion, compared to $890 million in 2020, reflecting growth across all reporting segments [28] - Return on equity for 2021 was 19.2% on an equity ratio of 53.7% [29] Business Segment Data and Key Metrics Changes - The electric segment increased earnings by $5.7 million or 8.5% over 2020, driven by rate-based growth from projects [37] - The manufacturing segment saw net earnings increase by $6.1 million, with sales volumes up 6.8% at BTD [40] - The plastics segment had record earnings of $97.8 million, approximately 250% higher than 2020, driven by higher pipe prices and improved operating results [12] Market Data and Key Metrics Changes - The company experienced strong demand for PVC pipe, leading to increased sales prices above raw material price increases [25] - The backlog for the manufacturing segment was approximately $391 million for 2022, compared to $204 million one year ago [55] Company Strategy and Development Direction - The company plans nearly $1 billion in capital expenditures in the electric segment over the next five years, targeting a compounded annual growth rate in rate base of 5.9% [15] - The Hoot Lake solar project is on schedule for completion in 2023, utilizing existing transmission rights and benefiting Minnesota customers [16][19] - The company aims for a carbon reduction of approximately 50% from its generation resources by 2025 and 97% by 2050 [20] Management's Comments on Operating Environment and Future Outlook - Management expects strong performance in the first quarter of 2022, with market conditions from Q4 2021 continuing [13] - The anticipated earnings per share range for 2022 is $3.78 to $4.08, reflecting a return on equity range of 15.3% to 16.3% [45] - The company acknowledges ongoing supply chain challenges and inflationary costs but remains optimistic about future performance [18][52] Other Important Information - The Board of Directors increased the 2022 indicated annual dividend rate by 5.8% to $0.65 per share [35] - The company plans to make a discretionary contribution of $20 million to its pension plan in February 2022 [12] Q&A Session Summary Question: Details on the 100-megawatt cryptocurrency customer rate - The rate is attractive for the customer but not a large margin for the company due to its interruptible nature [67][69] Question: Operating margins in the plastics segment - Fourth quarter margins were stronger than expected, and conditions are anticipated to continue into the first quarter of 2022 [72][74] Question: Margin compression at BTD - Margin compression is attributed to supply chain challenges and productivity issues due to new employee training [80][82]