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FERGUS FALLS, Minn.--(BUSINESS WIRE)--Feb 13, 2023--
Otter Tail Corporation (Nasdaq: OTTR) today announced financial results for the quarter and year ended December 31, 2022.
2022 SUMMARY
(in millions, except per share amounts) | Q4 2022 |
| Q4 2021 |
|
| 2022 |
|
| 2021 | ||
Operating Revenues | $ | 301.4 |
| $ | 333.2 |
| $ | 1,460.2 |
| $ | 1,196.8 |
Net Income | $ | 42.0 |
| $ | 51.6 |
| $ | 284.2 |
| $ | 176.8 |
Diluted Earnings Per Share | $ | 1.00 |
| $ | 1.23 |
| $ | 6.78 |
| $ | 4.23 |
Compared to the year ended December 31, 2021:
The corporation’s board of directors increased the quarterly common stock dividend to $0.4375 per share, an indicated annual dividend rate of $1.75 per share in 2023, a 6.1% increase from $1.65 per share in 2022.
CEO OVERVIEW
“Otter Tail Corporation, through the collective efforts of our employees and the strength of our diversified business model, achieved record annual financial results in 2022,” said President and CEO Chuck MacFarlane. “Each operating segment produced double digit annual earnings growth in 2022. Our Plastics segment completed another extraordinary year, producing $195 million of earnings in 2022, as operating margins benefited from elevated spreads of PVC pipe sale prices over resin input costs. Although our Plastics segment had an extraordinary year, demand for PVC pipe sharply declined in the second half of 2022 as contractors delayed projects due to supply chain issues, the housing market outlook continued to soften, and resin price reductions contributed to pipe distributors and contractors reducing PVC pipe purchases in an effort to manage their inventory levels.
“Electric segment earnings increased 10% compared to 2021, driven by increased commercial and industrial sales volumes, increasing rate base and favorable weather conditions. Otter Tail Power accomplished its key regulatory objectives in 2022, including a successful general rate case outcome in Minnesota and all regulatory approvals necessary to complete the Ashtabula III wind farm acquisition in early 2023. Our Manufacturing segment produced earnings growth of 22% compared to 2021, driven by increased sales volumes from strong customer demand across most end markets.
“Looking forward, our long-term focus remains on executing our strategy to grow our business and achieving operational, commercial and talent excellence to strengthen our position in the markets we serve. Our Electric segment anticipates approximately $1 billion in capital expenditures over the next 5 years, which results in a compounded annual growth rate in rate base of 6.4% from the end of 2022 to the end of 2027. We remain confident in our ability to achieve a compounded annual growth rate in earnings per share in the range of 5% to 7% using 2024 as the base year.
“We are initiating our 2023 earnings per share guidance range of $3.76 to $4.06. We anticipate Plastics segment earnings to recede from its record level in 2022 as we expect industry conditions will normalize throughout the year. We continue to expect an earnings mix of approximately 65% from our Electric segment and 35% from our manufacturing platform beginning in 2024.”
FOURTH QUARTER HIGHLIGHTS AND UPDATES
CASH FLOWS AND LIQUIDITY
Our consolidated cash provided by operating activities was $389.3 million in 2022 compared to $231.2 million in 2021, with the increase primarily due to a $95.9 million increase in net income and a lower level of working capital needs compared to the previous year. Investing activities included capital expenditures of $171.1 million in 2022, primarily related to capital investments within our Electric segment, including our Hoot Lake Solar project. Financing activities in 2022 included the issuance of $90.0 million of long-term debt and the maturity and repayment of $30.0 million of debt at Otter Tail Power, net repayments of short-term borrowings of $83.0 million and dividend payments of $68.8 million.
As of December 31, 2022, we had $322.2 million of available liquidity under our credit facilities and $119.0 million of available cash and cash equivalents, for total available liquidity of $441.2 million.
ANNUAL SEGMENT OPERATING RESULTS
Electric Segment
($ in thousands) |
| 2022 |
|
| 2021 |
| $ Change |
| % Change | |||
|
|
|
|
|
|
|
| |||||
Operating Revenues | $ | 549,699 |
| $ | 480,321 |
| $ | 69,378 |
|
| 14.4 | % |
Net Income |
| 79,974 |
|
| 72,458 |
|
| 7,516 |
|
| 10.4 |
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
| |||||
Retail MWh Sales |
| 5,592,368 |
|
| 4,789,879 |
|
| 802,489 |
|
| 16.8 | % |
Heating Degree Days |
| 7,122 |
|
| 5,794 |
|
| 1,328 |
|
| 22.9 |
|
Cooling Degree Days |
| 531 |
|
| 704 |
|
| (173 | ) |
| (24.6 | ) |
|
|
|
|
|
|
|
|
The following table shows heating and cooling degree days as a percent of normal.
| 2022 |
|
| 2021 |
|
|
|
|
| ||
Heating Degree Days | 112.5 | % |
| 91.3 | % |
Cooling Degree Days | 113.5 | % |
| 151.7 | % |
|
|
|
|
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 2022 and 2021.
| 2022 vs Normal |
| 2022 vs 2021 |
| 2021 vs Normal | |||
|
|
|
|
|
| |||
Effect on Diluted Earnings Per Share | $ | 0.11 |
| $ | 0.10 |
| $ | 0.01 |
|
|
|
|
|
|
Operating Revenues increased $69.4 million primarily due to increased fuel recovery revenues and higher sales volumes. The increase in fuel recovery revenues was the result of higher purchased power and production fuel costs arising from increased natural gas and market energy costs, as well as higher purchased power volumes arising from plant outages at both Coyote Station and Big Stone Plant during the year. Sales volumes increased compared to the previous year as a result of increased demand from commercial and industrial customers, including a new commercial customer load in North Dakota. Operating revenues also benefited from the impact of favorable weather conditions.
Net Income increased $7.5 million primarily due to the increased operating revenues driven by higher sales volumes and impacts of favorable weather described above, partially offset by increased operating and maintenance expenses. Increased operating and maintenance expenses included increases in maintenance and other costs related to the outages at Coyote Station and Big Stone Plant, increases in labor and employee benefit costs, higher transmission tariff expenses, and increased travel and other expenses.
Manufacturing Segment
(in thousands) |
| 2022 |
|
| 2021 |
| $ Change |
| % Change | ||
|
|
|
|
|
|
|
| ||||
Operating Revenues | $ | 397,983 |
| $ | 336,294 |
| $ | 61,689 |
| 18.3 | % |
Net Income |
| 20,950 |
|
| 17,186 |
|
| 3,764 |
| 21.9 |
|
|
|
|
|
|
|
|
|
Operating Revenues increased $61.7 million primarily due to a combination of increased sales volumes and increased material costs at BTD Manufacturing, our contract metal fabricator. Sales volumes increased 12% compared to the previous year due to strong customer and end market demand. Material costs, which are passed through to customers, increased 8%, as steel prices increased from the previous year. Steel prices increased drastically in 2021, peaking in the fourth quarter, and remained elevated compared to historical levels throughout most of 2022. Increases in sales volumes and prices were partially offset by a $2.5 million decrease in scrap revenues due to a decrease in both scrap metal prices and scrap volumes. Increases in sales prices and volumes at T.O. Plastics, our plastics thermoforming manufacturer, due to continued strong customer demand, also contributed to the segment increase in operating revenues.
Net Income increased $3.8 million due to increased operating revenues, as described above, and favorable cost absorption at T.O. Plastics, partially offset by higher labor, material, and overhead costs.
Plastics Segment
(in thousands) |
| 2022 |
|
| 2021 |
| $ Change |
| % Change | ||
|
|
|
|
|
|
|
| ||||
Operating Revenues | $ | 512,527 |
| $ | 380,229 |
| $ | 132,298 |
| 34.8 | % |
Net Income |
| 195,374 |
|
| 97,823 |
|
| 97,551 |
| 99.7 |
|
|
|
|
|
|
|
|
|
Operating Revenues increased $132.3 million primarily due to a 66% increase in the price per pound of PVC pipe sold, as sales prices remained high and continued to increase in 2022, due to a continuation of extraordinary market conditions first experienced in the previous year. Sales volumes decreased 19% due to raw material constraints in the first half of 2022 and softening customer demand during the second half of 2022 driven by contractors delaying projects due to supply chain issues, softening housing market outlook, and customers reducing purchases of PVC pipe in order to use up existing on hand inventory.
Net Income increased $97.6 million due to the increased operating revenues described above, and an increase in gross profit margins, as the increase in sales prices exceeded the increased cost of PVC resin and other input materials.
Corporate Costs
(in thousands) |
| 2022 |
|
| 2021 |
| $ Change |
| % Change | ||
|
|
|
|
|
|
|
| ||||
Net Loss | $ | 12,114 |
| $ | 10,698 |
| $ | 1,416 |
| 13.2 | % |
Net Loss at our corporate cost center increased $1.4 million due to increased operating expenses including external service provider costs and employee compensation costs. Investment losses related to our corporate-owned life insurance policies and the investments of our captive insurance entity also contributed to our increased net loss. The increased expenses and investment losses were partially offset by a decrease in interest expense due to lower average borrowings on our corporate credit facility.
FOURTH QUARTER OPERATING RESULTS
Consolidated Results
(in thousands, except per share amounts) |
| 2022 |
|
| 2021 |
| $ Change |
| % Change | |||
Operating Revenues | $ | 301,409 |
| $ | 333,233 |
| $ | (31,824 | ) |
| (9.6 | )% |
Operating Expenses |
| 246,468 |
|
| 262,074 |
|
| (15,606 | ) |
| (6.0 | ) |
Operating Income |
| 54,941 |
|
| 71,159 |
|
| (16,218 | ) |
| (22.8 | ) |
Other Expense |
| 5,728 |
|
| 8,871 |
|
| (3,143 | ) |
| (35.4 | ) |
Income Before Income Taxes |
| 49,213 |
|
| 62,288 |
|
| (13,075 | ) |
| (21.0 | ) |
Income Tax Expense |
| 7,208 |
|
| 10,671 |
|
| (3,463 | ) |
| (32.5 | ) |
Net Income | $ | 42,005 |
| $ | 51,617 |
| $ | (9,612 | ) |
| (18.6 | ) |
Diluted Earnings Per Share | $ | 1.00 |
| $ | 1.23 |
| $ | (0.23 | ) |
| (18.7 | )% |
Electric Segment
Electric segment net income was $17.0 million, a $0.1 million increase from the fourth quarter of 2021, due to an 11% increase in operating revenues, which was largely offset by an increase in operating and maintenance expenses and the impacts of non-operating income and expense. The increase in operating revenues was due to increased retail, transmission, and wholesale revenues. Retail revenues increased due to increased fuel recovery revenues, higher sales volumes, and the impacts of favorable weather. The increase in fuel recovery revenues was the result of higher market energy costs and higher purchased power volumes arising from an outage at Big Stone Plant. Sales volumes increased compared to the previous year as a result of increased demand from commercial and industrial customers, as discussed above. Transmission revenues increased primarily due to increased transmission volumes and formula rate adjustments. Wholesale revenues increased due to higher energy market prices compared to the same period last year.
Increased operating and maintenance expenses included increases in maintenance and other costs related to an outage at Big Stone Plant, increased labor and employee benefit costs, and higher transmission tariff expenses.
Manufacturing Segment
Manufacturing segment net income was $3.1 million, a $1.2 million increase from the fourth quarter of 2021. Sales volumes at BTD in the fourth quarter of 2022 increased 24% over the same period last year due to strong customer demand. This increase was partially offset by a $1.6 million decrease in scrap revenues, driven by lower scrap metal prices and lower scrap volumes. Increased sales volumes and sales prices resulted in increased profit margins at T.O. Plastics, contributing to increased segment earnings.
Plastics Segment
Plastics segment net income was $24.6 million, a $13.1 million decrease from the fourth quarter of 2021, primarily due to a 57% decrease in sales volumes as customer demand for PVC pipe was lower as customers continued to work through high priced inventories during the quarter to better manage their inventory levels. The decrease in sales volumes was partially offset by increased sales prices and profit margins, as the average PVC pipe sales prices increased 29% from the fourth quarter of 2021.
Corporate Costs
Corporate net loss was $2.7 million, a $2.2 million decrease from the fourth quarter of 2021, primarily due to lower health care costs related to our self-funded health insurance program, as well as gains on our corporate-owned life insurance policy investments and the favorable impact of death benefit proceeds from our corporate-owned life insurance.
2023 BUSINESS OUTLOOK
We anticipate 2023 diluted earnings per share to be in the range of $3.76 to $4.06. We expect our earnings mix in 2023 to be approximately 51% from our Electric segment and 49% from our Manufacturing and Plastics segments, net of corporate costs. This anticipated mix deviates from our long-term expected earnings mix of approximately 65%/35% as we expect Plastics segment earnings in 2023 to remain elevated relative to our expectations of ongoing, normalized earnings of this segment.
The segment components of our 2023 diluted earnings per share compared with actual earnings for 2022 are as follows:
|
|
| 2022 EPS by Segment |
| 2023 EPS Guidance | ||||||||
|
|
| Low |
| High | ||||||||
|
|
|
|
|
|
|
| ||||||
Electric |
|
| $ | 1.91 |
|
| $ | 2.00 |
|
| $ | 2.04 |
|
Manufacturing |
|
|
| 0.50 |
|
|
| 0.43 |
|
|
| 0.47 |
|
Plastics |
|
|
| 4.66 |
|
|
| 1.57 |
|
|
| 1.76 |
|
Corporate |
|
|
| (0.29 | ) |
|
| (0.24 | ) |
|
| (0.21 | ) |
Total |
|
| $ | 6.78 |
|
| $ | 3.76 |
|
| $ | 4.06 |
|
Return on Equity |
|
|
| 25.6 | % |
|
| 12.7 | % |
|
| 13.6 | % |
The following items contribute to our 2023 earnings guidance:
Electric Segment - We expect segment earnings to increase 6% over 2022 based on the following key assumptions:
Manufacturing Segment - We expect segment earnings to decline 10% from 2022 given overall concerns about a slowing manufacturing sector given the continued decline in overall industrial production as our customers continue to experience slower demand for products. Our guidance is also based on the following key assumptions:
Plastics Segment - We expect segment earnings to recede from the record level in 2022 based on the following key assumptions:
Corporate Costs - We anticipate corporate costs will be lower in 2023 primarily based on the following:
CAPITAL EXPENDITURES
The following provides a summary of actual capital expenditures for the year ended December 31, 2022, and anticipated capital expenditures for the next five years, along with average rate base and annual rate base growth of our Electric segment:
(in millions) |
|
|
|
| 2022 |
|
|
|
| 2023 |
|
|
| 2024 |
|
|
| 2025 |
|
|
| 2026 |
|
|
| 2027 |
|
| Total | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Electric Segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Renewables and Natural Gas Generation |
|
|
|
|
|
| $ | 88 |
|
| $ | 119 |
|
| $ | 88 |
|
| $ | 79 |
|
| $ | 10 |
|
| $ | 384 | ||
Technology and Infrastructure |
|
|
|
|
|
|
| 33 |
|
|
| 30 |
|
|
| 6 |
|
|
| 5 |
|
|
| 1 |
|
|
| 75 | ||
Distribution Plant Replacements |
|
|
|
|
|
|
| 33 |
|
|
| 37 |
|
|
| 38 |
|
|
| 38 |
|
|
| 43 |
|
|
| 189 | ||
Transmission (includes replacements) |
|
|
|
|
|
|
| 34 |
|
|
| 36 |
|
|
| 46 |
|
|
| 87 |
|
|
| 78 |
|
|
| 281 | ||
Other |
|
|
|
|
|
|
| 26 |
|
|
| 25 |
|
|
| 30 |
|
|
| 25 |
|
|
| 22 |
|
|
| 128 | ||
Total Electric Segment |
|
|
| $ | 148 |
|
|
| $ | 214 |
|
| $ | 247 |
|
| $ | 208 |
|
| $ | 234 |
|
| $ | 154 |
|
| $ | 1,057 |
Manufacturing and Plastics Segments |
|
|
|
| 23 |
|
|
|
| 48 |
|
|
| 53 |
|
|
| 29 |
|
|
| 25 |
|
|
| 24 |
|
|
| 179 |
Total Capital Expenditures |
|
|
| $ | 171 |
|
|
| $ | 262 |
|
| $ | 300 |
|
| $ | 237 |
|
| $ | 259 |
|
| $ | 178 |
|
| $ | 1,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Electric Utility Average Rate Base |
|
|
| $ | 1,624 |
|
|
| $ | 1,750 |
|
| $ | 1,850 |
|
| $ | 1,990 |
|
| $ | 2,110 |
|
| $ | 2,210 |
|
|
| |
Annual Rate Base Growth |
|
|
|
| 3.1 | % |
|
|
| 7.8 | % |
|
| 5.7 | % |
|
| 7.6 | % |
|
| 6.0 | % |
|
| 4.7 | % |
|
|
Our capital expenditure plan for the next five years includes Electric segment investments in wind and solar resources, transmission and distribution assets, and investments in system reliability and technology. Our Electric segment capital plan produces a compounded annual growth rate in average rate base of 6.4% 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 investments to bring additional capacity to our operations, providing an opportunity for organic growth within these segments.
CONFERENCE CALL AND WEBCAST
The corporation will host a live webcast on Tuesday, February 14, 2023, at 10:00 a.m. CDT 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 include statements regarding 2023 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, 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, cyber security threats or data breaches, the impact of government legislation and regulation including foreign trade policy and environmental, health and safety laws and regulations, the impact of climate change including compliance with legislative and regulatory changes to address climate change, 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 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) | |||||||||||||
| Quarter Ended December 31, |
| Year Ended December 31, | ||||||||||
(in thousands, except per-share amounts) |
| 2022 |
|
|
| 2021 |
|
| 2022 |
|
|
| 2021 |
|
|
|
|
|
|
|
| ||||||
Operating Revenues |
|
|
|
|
|
|
| ||||||
Electric | $ | 145,587 |
|
| $ | 131,692 |
| $ | 549,699 |
|
| $ | 480,321 |
Product Sales |
| 155,822 |
|
|
| 201,541 |
|
| 910,510 |
|
|
| 716,523 |
Total Operating Revenues |
| 301,409 |
|
|
| 333,233 |
|
| 1,460,209 |
|
|
| 1,196,844 |
Operating Expenses |
|
|
|
|
|
|
| ||||||
Electric Production Fuel |
| 10,572 |
|
|
| 14,751 |
|
| 65,110 |
|
|
| 59,327 |
Electric Purchased Power |
| 35,677 |
|
|
| 25,136 |
|
| 100,281 |
|
|
| 65,409 |
Electric Operating and Maintenance Expense |
| 54,917 |
|
|
| 45,054 |
|
| 181,378 |
|
|
| 159,669 |
Cost of Products Sold (excluding depreciation) |
| 99,358 |
|
|
| 129,603 |
|
| 542,944 |
|
|
| 488,370 |
Other Nonelectric Expenses |
| 18,738 |
|
|
| 19,808 |
|
| 69,718 |
|
|
| 65,394 |
Depreciation and Amortization |
| 22,768 |
|
|
| 23,249 |
|
| 92,597 |
|
|
| 91,358 |
Electric Property Taxes |
| 4,438 |
|
|
| 4,473 |
|
| 17,742 |
|
|
| 17,609 |
Total Operating Expenses |
| 246,468 |
|
|
| 262,074 |
|
| 1,069,770 |
|
|
| 947,136 |
Operating Income |
| 54,941 |
|
|
| 71,159 |
|
| 390,439 |
|
|
| 249,708 |
Other Income and Expense |
|
|
|
|
|
|
| ||||||
Interest Charges |
| 8,818 |
|
|
| 9,169 |
|
| 36,016 |
|
|
| 37,771 |
Nonservice Cost Components of Postretirement Benefits |
| (250 | ) |
|
| 505 |
|
| (1,075 | ) |
|
| 2,016 |
Other Income (Expense), net |
| 2,840 |
|
|
| 803 |
|
| 2,037 |
|
|
| 2,900 |
Income Before Income Taxes |
| 49,213 |
|
|
| 62,288 |
|
| 357,535 |
|
|
| 212,821 |
Income Tax Expense |
| 7,208 |
|
|
| 10,671 |
|
| 73,351 |
|
|
| 36,052 |
Net Income | $ | 42,005 |
|
| $ | 51,617 |
| $ | 284,184 |
|
| $ | 176,769 |
|
|
|
|
|
|
|
| ||||||
Weighted-Average Common Shares Outstanding: |
|
|
|
|
|
|
| ||||||
Basic |
| 41,600 |
|
|
| 41,504 |
|
| 41,586 |
|
|
| 41,491 |
Diluted |
| 41,932 |
|
|
| 41,894 |
|
| 41,931 |
|
|
| 41,818 |
Earnings Per Share: |
|
|
|
|
|
|
| ||||||
Basic | $ | 1.01 |
|
| $ | 1.24 |
| $ | 6.83 |
|
| $ | 4.26 |
Diluted | $ | 1.00 |
|
| $ | 1.23 |
| $ | 6.78 |
|
| $ | 4.23 |
OTTER TAIL CORPORATION | ||||||
CONSOLIDATED BALANCE SHEETS (unaudited) | ||||||
| December 31, | |||||
(in thousands) |
| 2022 |
|
| 2021 |
|
|
|
|
| |||
Assets |
|
|
| |||
Current Assets |
|
|
| |||
Cash and Cash Equivalents | $ | 118,996 |
| $ | 1,537 |
|
Receivables, net of allowance for credit losses |
| 144,393 |
|
| 174,953 |
|
Inventories |
| 145,952 |
|
| 148,490 |
|
Regulatory Assets |
| 24,999 |
|
| 27,342 |
|
Other Current Assets |
| 18,412 |
|
| 17,032 |
|
Total Current Assets |
| 452,752 |
|
| 369,354 |
|
Noncurrent Assets |
|
|
| |||
Investments |
| 54,845 |
|
| 56,690 |
|
Property, Plant and Equipment, net of accumulated depreciation |
| 2,212,717 |
|
| 2,124,605 |
|
Regulatory Assets |
| 94,655 |
|
| 125,508 |
|
Intangible Assets, net of accumulated amortization |
| 7,943 |
|
| 9,044 |
|
Goodwill |
| 37,572 |
|
| 37,572 |
|
Other Noncurrent Assets |
| 41,177 |
|
| 32,057 |
|
Total Noncurrent Assets |
| 2,448,909 |
|
| 2,385,476 |
|
Total Assets | $ | 2,901,661 |
| $ | 2,754,830 |
|
|
|
|
| |||
Liabilities and Shareholders' Equity |
|
|
| |||
Current Liabilities |
|
|
| |||
Short-Term Debt | $ | 8,204 |
| $ | 91,163 |
|
Current Maturities of Long-Term Debt |
| — |
|
| 29,983 |
|
Accounts Payable |
| 104,400 |
|
| 135,089 |
|
Accrued Salaries and Wages |
| 32,327 |
|
| 31,704 |
|
Accrued Taxes |
| 19,340 |
|
| 19,245 |
|
Regulatory Liabilities |
| 17,300 |
|
| 24,844 |
|
Other Current Liabilities |
| 56,065 |
|
| 55,671 |
|
Total Current Liabilities |
| 237,636 |
|
| 387,699 |
|
Noncurrent Liabilities and Deferred Credits |
|
|
| |||
Pensions Benefit Liability |
| 33,210 |
|
| 73,973 |
|
Other Postretirement Benefits Liability |
| 46,977 |
|
| 66,481 |
|
Regulatory Liabilities |
| 244,497 |
|
| 234,430 |
|
Deferred Income Taxes |
| 221,302 |
|
| 188,268 |
|
Deferred Tax Credits |
| 15,916 |
|
| 16,661 |
|
Other Noncurrent Liabilities |
| 60,985 |
|
| 62,527 |
|
Total Noncurrent Liabilities and Deferred Credits |
| 622,887 |
|
| 642,340 |
|
Commitments and Contingencies |
|
|
| |||
Capitalization |
|
|
| |||
Long-Term Debt, net of current maturities |
| 823,821 |
|
| 734,014 |
|
Shareholders’ Equity |
|
|
| |||
Common Shares |
| 208,156 |
|
| 207,758 |
|
Additional Paid-In Capital |
| 423,034 |
|
| 419,760 |
|
Retained Earnings |
| 585,212 |
|
| 369,783 |
|
Accumulated Other Comprehensive Income (Loss) |
| 915 |
|
| (6,524 | ) |
Total Shareholders' Equity |
| 1,217,317 |
|
| 990,777 |
|
Total Capitalization |
| 2,041,138 |
|
| 1,724,791 |
|
Total Liabilities and Shareholders' Equity | $ | 2,901,661 |
| $ | 2,754,830 |
|
OTTER TAIL CORPORATION | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | |||||||
| Year Ended December 31, | ||||||
(in thousands) |
| 2022 |
|
|
| 2021 |
|
|
|
|
| ||||
Operating Activities |
|
|
| ||||
Net Income | $ | 284,184 |
|
| $ | 176,769 |
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |
|
|
| ||||
Depreciation and Amortization |
| 92,597 |
|
|
| 91,358 |
|
Deferred Tax Credits |
| (745 | ) |
|
| (744 | ) |
Deferred Income Taxes |
| 32,424 |
|
|
| 28,896 |
|
Discretionary Contribution to Pension Plan |
| (20,000 | ) |
|
| (10,000 | ) |
Allowance for Equity Funds Used During Construction |
| (1,690 | ) |
|
| (822 | ) |
Stock Compensation Expense |
| 6,814 |
|
|
| 6,908 |
|
Other, net |
| 3,513 |
|
|
| (3,035 | ) |
Change in Operating Assets and Liabilities: |
|
|
| ||||
Receivables |
| 30,560 |
|
|
| (60,994 | ) |
Inventories |
| 5,339 |
|
|
| (54,313 | ) |
Regulatory Assets |
| (2,464 | ) |
|
| (4,803 | ) |
Other Assets |
| (368 | ) |
|
| (14,146 | ) |
Accounts Payable |
| (29,763 | ) |
|
| 38,734 |
|
Accrued and Other Liabilities |
| (5,490 | ) |
|
| 28,386 |
|
Regulatory Liabilities |
| (6,846 | ) |
|
| 1,948 |
|
Pension and Other Postretirement Benefits |
| 1,244 |
|
|
| 7,101 |
|
Net Cash Provided by Operating Activities |
| 389,309 |
|
|
| 231,243 |
|
Investing Activities |
|
|
| ||||
Capital Expenditures |
| (171,134 | ) |
|
| (171,829 | ) |
Proceeds from Disposal of Noncurrent Assets |
| 4,346 |
|
|
| 9,702 |
|
Purchases of Investments and Other Assets |
| (8,283 | ) |
|
| (9,383 | ) |
Net Cash Used in Investing Activities |
| (175,071 | ) |
|
| (171,510 | ) |
Financing Activities |
|
|
| ||||
Net Borrowings (Repayments) on Short-Term Debt |
| (82,959 | ) |
|
| 10,166 |
|
Proceeds from Issuance of Common Stock |
| — |
|
|
| 696 |
|
Proceeds from Issuance of Long-Term Debt |
| 90,000 |
|
|
| 140,000 |
|
Payments for Retirement of Long-Term Debt |
| (30,000 | ) |
|
| (140,169 | ) |
Dividends Paid |
| (68,755 | ) |
|
| (64,864 | ) |
Payments for Shares Withheld for Employee Tax Obligations |
| (2,942 | ) |
|
| (1,507 | ) |
Other, net |
| (2,123 | ) |
|
| (3,681 | ) |
Net Cash Used in Financing Activities |
| (96,779 | ) |
|
| (59,359 | ) |
Net Change in Cash and Cash Equivalents |
| 117,459 |
|
|
| 374 |
|
Cash and Cash Equivalents at Beginning of Period |
| 1,537 |
|
|
| 1,163 |
|
Cash and Cash Equivalents at End of Period | $ | 118,996 |
|
| $ | 1,537 |
|
OTTER TAIL CORPORATION | |||||||||||||||
SEGMENT RESULTS (unaudited) | |||||||||||||||
| Quarter Ended December 31, |
| Year Ended December 31, | ||||||||||||
(in thousands) |
| 2022 |
|
|
| 2021 |
|
|
| 2022 |
|
|
| 2021 |
|
|
|
|
|
|
|
|
| ||||||||
Operating Revenues |
|
|
|
|
|
|
| ||||||||
Electric | $ | 145,587 |
|
| $ | 131,692 |
|
| $ | 549,699 |
|
| $ | 480,321 |
|
Manufacturing |
| 91,062 |
|
|
| 86,209 |
|
|
| 397,983 |
|
|
| 336,294 |
|
Plastics |
| 64,760 |
|
|
| 115,332 |
|
|
| 512,527 |
|
|
| 380,229 |
|
Total Operating Revenues | $ | 301,409 |
|
| $ | 333,233 |
|
| $ | 1,460,209 |
|
| $ | 1,196,844 |
|
|
|
|
|
|
|
|
| ||||||||
Operating Income (Loss) |
|
|
|
|
|
|
| ||||||||
Electric | $ | 22,374 |
|
| $ | 24,270 |
|
| $ | 113,138 |
|
| $ | 106,964 |
|
Manufacturing |
| 4,047 |
|
|
| 2,716 |
|
|
| 29,065 |
|
|
| 24,114 |
|
Plastics |
| 33,355 |
|
|
| 51,097 |
|
|
| 264,578 |
|
|
| 132,760 |
|
Corporate |
| (4,835 | ) |
|
| (6,924 | ) |
|
| (16,342 | ) |
|
| (14,130 | ) |
Total Operating Income | $ | 54,941 |
|
| $ | 71,159 |
|
| $ | 390,439 |
|
| $ | 249,708 |
|
|
|
|
|
|
|
|
| ||||||||
Net Income (Loss) |
|
|
|
|
|
|
| ||||||||
Electric | $ | 17,036 |
|
| $ | 16,911 |
|
| $ | 79,974 |
|
| $ | 72,458 |
|
Manufacturing |
| 3,092 |
|
|
| 1,896 |
|
|
| 20,950 |
|
|
| 17,186 |
|
Plastics |
| 24,586 |
|
|
| 37,721 |
|
|
| 195,374 |
|
|
| 97,823 |
|
Corporate |
| (2,709 | ) |
|
| (4,911 | ) |
|
| (12,114 | ) |
|
| (10,698 | ) |
Total Net Income | $ | 42,005 |
|
| $ | 51,617 |
|
| $ | 284,184 |
|
| $ | 176,769 |
|
View source version on businesswire.com:https://www.businesswire.com/news/home/20230213005547/en/
CONTACT: Media Contact: Stephanie Hoff, Director of Corporate Communications, (218) 739-8535
Investor Contact: Tyler Nelson, Vice President of Accounting, (701) 451-3576
KEYWORD: MINNESOTA UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: UTILITIES OIL/GAS OTHER MANUFACTURING ALTERNATIVE ENERGY ENERGY ENGINEERING CHEMICALS/PLASTICS MANUFACTURING
SOURCE: Otter Tail Corporation
Copyright Business Wire 2023.
PUB: 02/13/2023 06:01 PM/DISC: 02/13/2023 06:02 PM
http://www.businesswire.com/news/home/20230213005547/en