Otter Tail Corporation (NASDAQ:OTTR) today announced financial
results for the quarter ended June 30, 2017.
Summary:
- Consolidated operating revenues were $212.1 million compared
with $203.5 million for the second quarter of 2016.
- Consolidated net income and diluted earnings from continuing
operations totaled $16.7 million and $0.42 per share, respectively,
compared with $15.6 million and $0.41 per share for the second
quarter of 2016.
- Given our strong first half 2017 results we are raising our
2017 consolidated earnings guidance range to $1.65 - $1.80 per
diluted share from $1.60 - $1.75 per diluted share.
CEO Overview“Employees across the organization
improved operations to deliver second quarter earnings per share of
$0.42 compared with $0.41 in the second quarter of 2016,” said
Otter Tail Corporation President and CEO Chuck MacFarlane. “Our
Electric and Plastics segments drove the earnings improvement. The
utility had higher transmission service revenues and lower
generating plant operating and maintenance costs this quarter
compared to second quarter last year and the PVC pipe companies
earned higher margins. Our second quarter Manufacturing segment
results and corporate costs were in line with our expectations,
although unfavorable to last year’s second quarter results, which
included favorable product mix in the Manufacturing segment and
nontaxable benefit proceeds from corporate-owned life insurance
that did not occur in 2017.
“Highlights this quarter included two special acknowledgements
for the utility. In May a Regulatory Research Associates report
recognized Otter Tail Power Company as one of the five lowest price
providers among utility operating companies. In June the Edison
Electric Institute presented Otter Tail Power Company with the
association’s Emergency Recovery Award for its outstanding
restoration efforts after a snow and ice storm hit South Dakota on
Christmas Day. We are proud of employees for these efforts.
“We also are pleased that two 345-kilovolt transmission projects
under construction and designated as Multi-Value Projects by the
Midcontinent Independent System Operator remain on schedule and on
budget. We are a 50 percent owner in both the Big Stone
South-Brookings line, scheduled for completion later this year, and
the Big Stone South-Ellendale line, scheduled for completion in
2019. Otter Tail Power Company, manager on the Big Stone
South-Ellendale project, has obtained all easements for the route
and set approximately a third of the structures. Our combined
investment in these two projects will be approximately $250
million.
“Otter Tail Power Company expects to invest $862 million from
2017 through 2021, including investments in these two regional
transmission projects as well as new natural gas and wind
generation associated with the company’s approved integrated
resource plan. This will produce a projected compounded annual
growth rate of 7.5 percent in utility rate base from 2015 through
2021.
“BTD, our custom metal fabricator, continues to make steady
improvement in its Minnesota plants with improved plant flow,
reduced logistics costs and added paint capabilities. BTD’s
Illinois plant continues to perform well despite a reduction in
wind fixture work compared with last year, and its Georgia plant,
acquired in September 2015, continues to be integrated into BTD’s
operations. The Georgia plant along with the other BTD’s facilities
are on a common technology platform that facilitates common
estimating, production scheduling, and inventory management. T.O.
Plastics, our thermoforming manufacturer, also continues to improve
operations and experienced increased sales in all its major end
markets this quarter.
“These results provide a foundation for raising our 2017
earnings guidance range to $1.65 - $1.80 per diluted share from
$1.60 - $1.75 per diluted share.”
Cash Flow from Operations, and Liquidity
Consolidated cash provided by continuing operations for the six
months ended June 30, 2017 was $69.3 million compared with $64.2
million for the six months ended June 30, 2016. Contributing to the
$5.1 million increase in cash provided by continuing operations
between the periods was a $10.0 million reduction in discretionary
contributions to the corporation’s funded pension plan and a $6.2
million increase in net income from continuing operations. These
increases were partially offset by an $8.6 million increase in cash
used for working capital items, a $1.1 million decrease in
depreciation expense and $1.0 million less in deferred income taxes
between periods. The increase in cash used for working capital
items between the periods is primarily due to a $7.7 million
increase in cash used to build inventories between the periods. All
operating segments experienced increases in inventories in the
first six months of 2017 compared with decreases in the first six
months of 2016.
The following table presents the status of the corporation’s
lines of credit:
(in
thousands) |
Line Limit |
In Use On June 30, 2017 |
Restricted due to Outstanding Letters of
Credit |
Available on June 30, 2017 |
Available on December 31, 2016 |
Otter Tail Corporation
Credit Agreement |
$ |
130,000 |
$ |
117 |
$ |
-- |
$ |
129,883 |
$ |
|
130,000 |
Otter
Tail Power Company Credit Agreement |
|
170,000 |
|
58,000 |
|
300 |
|
111,700 |
|
|
127,067 |
Total |
$ |
300,000 |
$ |
58,117 |
$ |
300 |
$ |
241,583 |
$ |
|
257,067 |
Board of Directors Declared Quarterly Dividend
On August 3, 2017 the corporation’s Board of Directors declared a
quarterly common stock dividend of $0.32 per share. This dividend
is payable September 9, 2017 to shareholders of record on
August 15, 2017.
Segment Performance
Summary
Electric
|
|
Three Months ended June 30, |
|
|
|
($s in
thousands) |
|
2017 |
|
2016 |
Change |
% Change |
|
Retail Electric
Revenues |
$ |
86,255 |
$ |
85,985 |
$ |
270 |
|
0.3 |
|
|
Wholesale Electric
Revenues |
|
1,184 |
|
859 |
|
325 |
|
37.8 |
|
|
Other
Electric Revenues |
|
14,797 |
|
11,081 |
|
3,716 |
|
33.5 |
|
|
Total Electric Revenues |
$ |
102,236 |
$ |
97,925 |
$ |
4,311 |
|
4.4 |
|
|
Net Income |
$ |
10,134 |
$ |
9,148 |
$ |
986 |
|
10.8 |
|
|
Heating Degree
Days |
|
420 |
|
455 |
|
(35 |
) |
(7.7 |
) |
|
Cooling Degree
Days |
|
96 |
|
133 |
|
(37 |
) |
(27.8 |
) |
The following table shows heating and cooling degree days as a
percent of normal:
|
|
Three Months ended June 30, |
|
|
2017 |
|
2016 |
|
|
Heating Degree Days
|
80.9 |
% |
87.7 |
% |
|
Cooling Degree
Days |
90.6 |
% |
125.5 |
% |
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 the second quarters of 2017 and
2016 and between the quarters:
|
|
Three Months ended June 30, |
|
|
2017 vs Normal |
2016 vs Normal |
2017 vs 2016 |
|
Effect on Diluted
Earnings Per Share |
$ |
(0.01 |
) |
$ |
0.00 |
($ |
0.01 |
) |
The $0.3 million increase in retail electric revenues
includes:
- A $3.4 million increase in retail revenue related to the
recovery of increased fuel and purchased power costs due to an
increase in the price per kwh purchased and an increase in fuel
costs per kwh generated to serve retail customers.
- A $0.9 million increase in revenue due to increased kwh sales
to commercial and industrial customers.
offset by:
- A $1.5 million net decrease in retail revenue primarily due to
an increase in the interim rate refund accrual in the second
quarter of 2017 related to the final order in Otter Tail Power
Company’s 2016 Minnesota general rate case.
- A $0.8 million decrease in Environmental Costs Recovery rider
revenue mainly due to a reduction in the unrecovered balance of
environmental upgrades due to depreciation.
- A $0.6 million negative price variance related to increased
sales of electricity to customers with lower rate tariffs.
- A $0.6 million decrease in Transmission Cost Recovery rider
revenue due to a reduction in transmission services and costs from
another regional transmission provider.
- A $0.4 million decrease in revenue related to decreased
consumption due to milder weather in the second quarter of 2017,
evidenced by a 7.7% decrease in heating degree days and a 27.8%
decrease in cooling degree days between the quarters.
- A $0.1 million decrease in North Dakota Renewable Resource
Adjustment rider revenue mainly due to an increase in Production
Tax Credits that reduces rider revenue requirements.
Other electric revenues increased $3.7 million, primarily due to
a $3.3 million increase in Midcontinent Independent System
Operator, Inc. (MISO) transmission tariff revenues related to
increased investment in regional transmission lines.
Production fuel costs increased $2.5 million as a result of a
23.5% increase in kwhs generated combined with a 1.1% increase in
the cost of fuel per kwh generated from our steam-powered and
combustion turbine generators. The increase in generation was
mainly at Coyote Station, which was down for maintenance for eight
weeks of the second quarter of 2016 but fully operational during
the second quarter of 2017.
The cost of purchased power to serve retail customers increased
$1.2 million, despite an 11.2% decrease in kwh purchases, as a
result of a 21.9% increase in the cost per kwh purchased due to
higher market prices and increased prices for energy purchases
under a long‑term contract.
Other electric operating and maintenance expenses decreased $1.1
million as a result of:
- A $1.2 million reduction in external service costs mostly due
to a decrease in costs related to a maintenance shutdown at Coyote
Station in April and May of 2016 in conjunction with the Coyote
Creek Coal Mine tie-in project.
- A $0.6 million decrease in Southwest Power Pool and MISO
transmission service charges, with the MISO decrease mainly related
to a decrease in the return on equity component of the MISO tariff
from 12.38% to 10.82%.
offset by:
- A $0.3 million increase in labor costs mainly related to work
required to respond to storm outages.
- A $0.3 million increase in filing expenses related to the 2016
Minnesota general rate case.
Depreciation and amortization expense decreased $0.3 million as
a result of extending the depreciable lives of certain assets and
other assets reaching the end of their depreciable lives in
2016.
Income tax expense in the Electric segment increased $0.5
million mainly as a result of a $1.5 million increase in income
before income taxes.
Manufacturing
|
|
Three Months ended June 30, |
|
|
|
(in
thousands) |
|
2017 |
|
2016 |
Change |
% Change |
|
Operating Revenues
|
$ |
59,304 |
$ |
58,452 |
$ |
852 |
|
1.5 |
|
|
Net Income |
|
2,955 |
|
3,009 |
|
(54 |
) |
(1.8 |
) |
At BTD Manufacturing, Inc. (BTD), revenues increased $0.2
million as a result of a $0.5 million increase in scrap revenue
mainly due to higher scrap metal prices and a $0.2 million increase
in revenue from parts sales, offset by a $0.5 million reduction in
tooling revenue. Operating margins were lower in the second quarter
of 2017 compared with the second quarter of 2016 due to unfavorable
product mix in our Minnesota and Illinois plants compared to the
second quarter of 2016 along with increased costs for scrapped
parts and obsolete inventory in the second quarter of 2017. A
$0.4 million decrease in interest expense as a result of the
December 2016 refinancing of long-term debt at lower interest rates
and a $0.4 million decrease in income tax expense related to the
reduction in BTD’s income before income taxes resulted in a $0.4
million decrease in quarter-over-quarter net income at BTD.
At T.O. Plastics, Inc. (T.O. Plastics), revenues increased $0.6
million with increases in all end markets served. Costs of products
sold remained flat quarter over quarter as a result of lower
material costs in the second quarter of 2017, resulting in improved
margins and a $0.4 million increase in net income at T.O.
Plastics.
Plastics
|
|
Three Months ended June 30, |
|
|
|
(in
thousands) |
|
2017 |
|
2016 |
Change |
% Change |
|
Operating Revenues
|
$ |
50,551 |
$ |
47,112 |
$ |
3,439 |
7.3 |
|
Net Income |
|
4,637 |
|
3,485 |
|
1,152 |
33.1 |
Plastics segment revenues and net income increased $3.4 million
and $1.2 million, respectively. Revenues increased despite a 1.9%
decrease in pounds of polyvinyl chloride (PVC) pipe sold as a
result of a 9.4% increase in PVC pipe prices between the quarters.
The increase in revenue more than offset a $1.6 million increase in
cost of products sold, which was primarily due to a 6.3% increase
in the cost per pound of PVC pipe sold.
Corporate
Corporate’s $0.9 million increase in net-of-tax costs reflects
the receipt of $0.9 million in nontaxable corporate-owned life
insurance benefit proceeds in the second quarter of 2016 while no
similar benefit proceeds were received in the second quarter of
2017.
2017 Business Outlook
We are raising our 2017 consolidated earnings guidance range to
$1.65 - $1.80 per diluted share from $1.60 ‑ $1.75 per
diluted share. This guidance reflects the current mix of businesses
we own, considers the cyclical nature of some of our businesses,
and reflects current regulatory factors and economic challenges
facing our Electric, Manufacturing and Plastics segments and
strategies for improving future operating results. We expect
capital expenditures for 2017 to be $149 million compared with
actual cash used for capital expenditures of $161 million in 2016.
Major projects in our planned expenditures for 2017 include
investments in two large transmission line projects for the
Electric segment, which positively impact earnings by providing an
immediate return on invested funds through rider recovery
mechanisms.
Segment components of our 2017 earnings per share guidance range
compared with 2016 actual earnings are as follows:
Diluted Earnings Per Share |
2016 EPS by Segment |
2017 GuidanceFebruary 6, 2017 |
2017 GuidanceMay 1, 2017 |
2017 GuidanceAugust 7, 2017 |
Low |
High |
Low |
High |
Low |
High |
Electric |
$ |
1.29 |
|
$ |
1.31 |
|
$ |
1.34 |
|
$ |
1.31 |
|
$ |
1.34 |
|
$ |
1.31 |
|
$ |
1.34 |
|
Manufacturing |
$ |
0.15 |
|
$ |
0.17 |
|
$ |
0.21 |
|
$ |
0.17 |
|
$ |
0.21 |
|
$ |
0.17 |
|
$ |
0.21 |
|
Plastics |
$ |
0.27 |
|
$ |
0.26 |
|
$ |
0.30 |
|
$ |
0.26 |
|
$ |
0.30 |
|
$ |
0.31 |
|
$ |
0.35 |
|
Corporate |
($ |
0.11 |
) |
($ |
0.14 |
) |
($ |
0.10 |
) |
($ |
0.14 |
) |
($ |
0.10 |
) |
($ |
0.14 |
) |
($ |
0.10 |
) |
Total –
Continuing Operations |
$ |
1.60 |
|
$ |
1.60 |
|
$ |
1.75 |
|
$ |
1.60 |
|
$ |
1.75 |
|
$ |
1.65 |
|
$ |
1.80 |
|
Return on Equity |
|
9.8 |
% |
|
9.3 |
% |
|
10.2 |
% |
|
9.3 |
% |
|
10.2 |
% |
|
9.7 |
% |
|
10.5 |
% |
Contributing to our earnings guidance for 2017 are the following
items:
• We expect 2017 Electric segment net income to be higher
than 2016 segment net income based on:
- Normal weather for the remainder of 2017. Milder than normal
weather in 2016 negatively impacted diluted earnings per share by
$0.07. Milder than normal weather has negatively impacted diluted
earnings per share by $0.03 through the six months ended June 30,
2017.
- A full year of increased rates compared with 8.5 months in
2016. In March 2017, the Minnesota Public Utilities Commission
granted Otter Tail Power Company a revenue increase of
approximately 6.2% with a 9.41% return on equity.
- Rider recovery increases primarily from transmission riders
related to the Electric segment’s continuing investments in its
share of the Multi-Value Transmission Projects in South
Dakota.
- Expected increases in sales to industrial and commercial
customers.
offset by:
- Increased operating and maintenance expenses of $0.04 per share
due to inflationary increases and increasing benefit costs.
Included is an increase in pension costs as a result of a decrease
in the discount rate from 4.76% to 4.60% and a decrease in the
assumed long-term rate of return on plan assets from 7.75% to
7.50%.
- Higher property tax expense due to large capital projects being
put into service.
- Lower Conservation Improvement Program (CIP) incentives of
$0.03 per share in Minnesota as a result of program changes made by
the Minnesota Department of Commerce that reduced the CIP incentive
cap by 32.5% compared to 2016.
- Increased costs related to contractual price increases in
certain capacity agreements.
• We expect 2017 net income from our Manufacturing
segment to increase over 2016 due to:
- A slight increase in sales at BTD due to higher lawn and garden
end market sales offset by lower end market recreational vehicle
sales, capturing new business with existing customers and higher
scrap sales.
- Improved margins on parts and tooling sales at BTD combined
with lower interest costs as a result of the refinancing of
long-term debt at a lower interest rate in the fourth quarter of
2016.
- An increase in earnings from T.O. Plastics mainly driven by
year-over-year sales growth in our horticulture, life science and
industrial markets and lower interest costs as a result of the
refinancing of long-term debt at a lower interest rate in the
fourth quarter of 2016.
- Backlog for the manufacturing companies of approximately $84
million for 2017 compared with $81 million one year ago.
• We are raising our 2017 net income expectations
from the Plastics segment to be higher than our original plan,
primarily due to our strong second quarter results. The Plastics
segment also benefits from lower interest costs as a result of the
refinancing of long-term debt completed in the fourth quarter of
2016.
• Corporate costs in 2017 are expected to be in line
with 2016 costs.
CONFERENCE CALL AND WEBCAST The corporation
will host a live webcast on Tuesday, August 8, 2017 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.cfm and select “Webcast.” Please
allow extra time prior to the call to visit the site and download
any software needed to listen to the webcast. An archived copy of
the webcast will be available on our website shortly following the
call.
If you are interested in asking a question during the
live webcast, the Dial-In Number
is: 877-312-8789.
Risk Factors and Forward-Looking Statements that Could
Affect Future ResultsThe information in this release
includes certain forward-looking information, including 2017
expectations, made under the Safe Harbor provisions of the Private
Securities Litigation Reform Act of 1995. Although we believe our
expectations are based on reasonable assumptions, actual results
may differ materially from those expectations. The following
factors, among others, could cause our actual results to differ
materially from those discussed in the forward-looking
statements:
- Federal and state environmental regulation could require us to
incur substantial capital expenditures and increased operating
costs.
- Volatile financial markets and changes in our debt ratings
could restrict our ability to access capital and increase borrowing
costs and pension plan and postretirement health care
expenses.
- We rely on access to both short- and long-term capital markets
as a source of liquidity for capital requirements not satisfied by
cash flows from operations. If we are unable to access capital at
competitive rates, our ability to implement our business plans may
be adversely affected.
- Disruptions, uncertainty or volatility in the financial markets
can also adversely impact our results of operations, the ability of
customers to finance purchases of goods and services, and our
financial condition, as well as exert downward pressure on stock
prices and/or limit our ability to sustain our current common stock
dividend level.
- We could be required to contribute additional capital to the
pension plan in the future if the market value of pension plan
assets significantly declines, plan assets do not earn in line with
our long-term rate of return assumptions or relief under the
Pension Protection Act is no longer granted.
- Any significant impairment of our goodwill would cause a
decrease in our asset values and a reduction in our net operating
income.
- Declines in projected operating cash flows at BTD or the
Plastics segment may result in goodwill impairments that could
adversely affect our results of operations and financial position,
as well as financing agreement covenants.
- The inability of our subsidiaries to provide sufficient
earnings and cash flows to allow us to meet our financial
obligations and debt covenants and pay dividends to our
shareholders could have an adverse effect on us.
- We rely on our information systems to conduct our business and
failure to protect these systems against security breaches or
cyber-attacks could adversely affect our business and results of
operations. Additionally, if these systems fail or become
unavailable for any significant period of time, our business could
be harmed.
- Economic conditions could negatively impact our
businesses.
- If we are unable to achieve the organic growth we expect, our
financial performance may be adversely affected.
- Our plans to grow and realign our business mix through capital
projects, acquisitions and dispositions may not be successful,
which could result in poor financial performance.
- We may, from time to time, sell assets to provide capital to
fund investments in our electric utility business or for other
corporate purposes, which could result in the recognition of a loss
on the sale of any assets sold and other potential liabilities. The
sale of any of our businesses could expose us to additional risks
associated with indemnification obligations under the applicable
sales agreements and any related disputes.
- Significant warranty claims and remediation costs in excess of
amounts normally reserved for such items could adversely affect our
results of operations and financial condition.
- We are subject to risks associated with energy markets.
- Changes in tax laws, as well as judgments and estimates used in
the determination of tax-related asset and liability amounts, could
materially adversely affect our business, financial condition,
results of operations and prospects.
- We may experience fluctuations in revenues and expenses related
to our electric operations, which may cause our financial results
to fluctuate and could impair our ability to make distributions to
our shareholders or scheduled payments on our debt obligations, or
to meet covenants under our borrowing agreements.
- Actions by the regulators of our electric operations could
result in rate reductions, lower revenues and earnings or delays in
recovering capital expenditures.
- Otter Tail Power Company’s operations are subject to an
extensive legal and regulatory framework under federal and state
laws as well as regulations imposed by other organizations that may
have a negative impact on our business and results of
operations.
- Otter Tail Power Company’s electric transmission and generation
facilities could be vulnerable to cyber and physical attack that
could impair its ability to provide electrical service to its
customers or disrupt the U.S. bulk power system.
- Otter Tail Power Company’s electric generating facilities are
subject to operational risks that could result in unscheduled plant
outages, unanticipated operation and maintenance expenses and
increased power purchase costs.
- Changes to regulation of generating plant emissions, including
but not limited to carbon dioxide emissions, could affect our
operating costs and the costs of supplying electricity to our
customers.
- Competition from foreign and domestic manufacturers, the price
and availability of raw materials, prices and supply of scrap or
recyclable material and general economic conditions could affect
the revenues and earnings of our manufacturing businesses.
- Our plastics operations are highly dependent on a limited
number of vendors for PVC resin and a limited supply of resin. The
loss of a key vendor, or any interruption or delay in the supply of
PVC resin, could result in reduced sales or increased costs for
this segment.
- We compete against a large number of other manufacturers of PVC
pipe and manufacturers of alternative products. Customers may not
distinguish the pipe companies’ products from those of our
competitors.
- Changes in PVC resin prices can negatively affect our plastics
business.
For a further discussion of other risk factors and cautionary
statements, refer to reports we file with the Securities and
Exchange Commission.
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 located
in Fergus Falls, Minnesota, and Fargo, North Dakota.
See Otter Tail Corporation’s results of
operations for the three and six months ended June 30, 2017 and
2016 in the following financial statements: Consolidated Statements
of Income, Consolidated Balance Sheets – Assets, Consolidated
Balance Sheets – Liabilities and Equity, and Consolidated
Statements of Cash Flows.
Otter Tail Corporation |
Consolidated Statements of
Income |
In thousands, except share and per share amounts |
(not audited) |
|
|
Quarter Ended June 30, |
Year-to-Date June 30, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Operating
Revenues by Segment |
|
|
|
|
Electric |
$ |
102,236 |
|
$ |
97,925 |
|
$ |
220,787 |
|
$ |
210,919 |
|
Manufacturing |
|
59,304 |
|
|
58,452 |
|
|
117,721 |
|
|
118,272 |
|
Plastics |
|
50,551 |
|
|
47,112 |
|
|
87,708 |
|
|
80,549 |
|
Intersegment Eliminations |
|
(5 |
) |
|
(7 |
) |
|
(13 |
) |
|
(16 |
) |
Total Operating Revenues |
|
212,086 |
|
|
203,482 |
|
|
426,203 |
|
|
409,724 |
|
Operating
Expenses |
|
|
|
|
Fuel and
Purchased Power |
|
28,853 |
|
|
25,117 |
|
|
64,423 |
|
|
57,703 |
|
Nonelectric Cost of Products Sold (depreciation included
below) |
|
84,013 |
|
|
80,949 |
|
|
159,290 |
|
|
153,588 |
|
Electric
Operating and Maintenance Expense |
|
37,850 |
|
|
38,981 |
|
|
76,229 |
|
|
78,999 |
|
Nonelectric Operating and Maintenance Expense |
|
10,164 |
|
|
9,238 |
|
|
20,602 |
|
|
20,693 |
|
Depreciation and Amortization |
|
17,908 |
|
|
18,525 |
|
|
35,762 |
|
|
36,814 |
|
Property Taxes - Electric |
|
3,709 |
|
|
3,589 |
|
|
7,507 |
|
|
7,268 |
|
Total Operating Expenses |
|
182,497 |
|
|
176,399 |
|
|
363,813 |
|
|
355,065 |
|
Operating
Income (Loss) by Segment |
|
|
|
|
Electric |
|
18,730 |
|
|
16,806 |
|
|
46,468 |
|
|
40,034 |
|
Manufacturing |
|
5,049 |
|
|
5,805 |
|
|
8,805 |
|
|
9,660 |
|
Plastics |
|
7,635 |
|
|
6,005 |
|
|
11,591 |
|
|
9,752 |
|
Corporate |
|
(1,825 |
) |
|
(1,533 |
) |
|
(4,474 |
) |
|
(4,787 |
) |
Total Operating Income |
|
29,589 |
|
|
27,083 |
|
|
62,390 |
|
|
54,659 |
|
Interest
Charges |
|
7,527 |
|
|
7,976 |
|
|
14,989 |
|
|
15,970 |
|
Other
Income |
|
552 |
|
|
1,532 |
|
|
1,105 |
|
|
1,932 |
|
Income Tax
Expense – Continuing Operations |
|
5,897 |
|
|
5,083 |
|
|
12,260 |
|
|
10,575 |
|
Net Income
(Loss) by Segment – Continuing Operations |
|
|
|
|
Electric |
|
10,134 |
|
|
9,148 |
|
|
25,694 |
|
|
21,686 |
|
Manufacturing |
|
2,955 |
|
|
3,009 |
|
|
5,127 |
|
|
4,862 |
|
Plastics |
|
4,637 |
|
|
3,485 |
|
|
7,074 |
|
|
5,637 |
|
Corporate |
|
(1,009 |
) |
|
(86 |
) |
|
(1,649 |
) |
|
(2,139 |
) |
Net Income from
Continuing Operations |
|
16,717 |
|
|
15,556 |
|
|
36,246 |
|
|
30,046 |
|
Income from
Discontinued Operations - net of Income Tax
Expense of $40, $80, $78 and $100 for the respective
periods |
|
61 |
|
|
119 |
|
|
117 |
|
|
149 |
|
Net Income |
$ |
16,778 |
|
$ |
15,675 |
|
$ |
36,363 |
|
$ |
30,195 |
|
Average Number
of Common Shares Outstanding |
|
|
|
|
Basic |
|
39,462,865 |
|
|
38,179,371 |
|
|
39,406,834 |
|
|
38,058,157 |
|
Diluted |
|
39,702,499 |
|
|
38,321,289 |
|
|
39,671,612 |
|
|
38,183,249 |
|
|
|
|
|
|
Basic Earnings
Per Common Share: |
|
|
|
|
Continuing Operations |
$ |
0.43 |
|
$ |
0.41 |
|
$ |
0.92 |
|
$ |
0.79 |
|
Discontinued Operations |
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
$ |
0.43 |
|
$ |
0.41 |
|
$ |
0.92 |
|
$ |
0.79 |
|
Diluted
Earnings Per Common Share: |
|
|
|
|
Continuing Operations |
$ |
0.42 |
|
$ |
0.41 |
|
$ |
0.92 |
|
$ |
0.79 |
|
Discontinued Operations |
|
-- |
|
|
-- |
|
|
-- |
|
|
-- |
|
|
$ |
0.42 |
|
$ |
0.41 |
|
$ |
0.92 |
|
$ |
0.79 |
|
Otter Tail Corporation |
Consolidated Balance Sheets |
ASSETS |
in thousands |
(not audited) |
|
June 30, |
December 31, |
|
2017 |
2016 |
|
|
|
Current
Assets |
|
|
Cash and
Cash Equivalents |
$ |
-- |
$ |
-- |
Accounts
Receivable: |
|
|
Trade—Net |
|
79,029 |
|
68,242 |
Other |
|
7,895 |
|
5,850 |
Inventories |
|
87,267 |
|
83,740 |
Unbilled
Revenues |
|
15,560 |
|
20,080 |
Income
Taxes Receivable |
|
-- |
|
662 |
Regulatory Assets |
|
16,540 |
|
21,297 |
Other |
|
14,352 |
|
8,144 |
Total Current Assets |
|
220,643 |
|
208,015 |
|
|
|
Investments |
|
8,156 |
|
8,417 |
Other
Assets |
|
35,253 |
|
34,104 |
Goodwill |
|
37,572 |
|
37,572 |
Other
Intangibles—Net |
|
14,391 |
|
14,958 |
Regulatory
Assets |
|
127,479 |
|
132,094 |
|
|
|
Plant |
|
|
Electric
Plant in Service |
|
1,870,928 |
|
1,860,357 |
Nonelectric Operations |
|
214,925 |
|
211,826 |
Construction Work in Progress |
|
188,450 |
|
153,261 |
Total Gross Plant |
|
2,274,303 |
|
2,225,444 |
Less Accumulated Depreciation and Amortization |
|
773,741 |
|
748,219 |
Net Plant |
|
1,500,562 |
|
1,477,225 |
Total |
$ |
1,944,056 |
$ |
1,912,385 |
Otter Tail Corporation |
Consolidated Balance Sheets |
Liabilities and Equity |
in thousands |
(not audited) |
|
June 30, |
December 31, |
|
|
2017 |
|
|
2016 |
|
|
|
|
Current
Liabilities |
|
|
Short-Term Debt |
$ |
58,117 |
|
$ |
42,883 |
|
Current
Maturities of Long-Term Debt |
|
42,200 |
|
|
33,201 |
|
Accounts
Payable |
|
94,353 |
|
|
89,350 |
|
Accrued
Salaries and Wages |
|
15,115 |
|
|
17,497 |
|
Accrued
Taxes |
|
10,954 |
|
|
16,000 |
|
Other
Accrued Liabilities |
|
15,142 |
|
|
15,377 |
|
Liabilities of Discontinued Operations |
|
1,113 |
|
|
1,363 |
|
Total Current Liabilities |
|
236,994 |
|
|
215,671 |
|
|
|
|
Pensions
Benefit Liability |
|
98,297 |
|
|
97,627 |
|
Other
Postretirement Benefits Liability |
|
62,980 |
|
|
62,571 |
|
Other
Noncurrent Liabilities |
|
22,441 |
|
|
21,706 |
|
|
|
|
Deferred
Credits |
|
|
Deferred
Income Taxes |
|
235,554 |
|
|
226,591 |
|
Deferred
Tax Credits |
|
22,115 |
|
|
22,849 |
|
Regulatory Liabilities |
|
83,561 |
|
|
82,433 |
|
Other |
|
5,324 |
|
|
7,492 |
|
Total Deferred Credits |
|
346,554 |
|
|
339,365 |
|
|
|
|
Capitalization |
|
|
Long-Term
Debt—Net |
|
490,386 |
|
|
505,341 |
|
|
|
|
Cumulative Preferred Shares |
|
-- |
|
|
-- |
|
|
|
|
Cumulative Preference Shares |
|
-- |
|
|
-- |
|
|
|
|
Common Equity |
|
|
Common
Shares, Par Value $5 Per Share |
|
197,775 |
|
|
196,741 |
|
Premium
on Common Shares |
|
341,657 |
|
|
337,684 |
|
Retained
Earnings |
|
150,558 |
|
|
139,479 |
|
Accumulated Other Comprehensive Loss |
|
(3,586 |
) |
|
(3,800 |
) |
Total Common Equity |
|
686,404 |
|
|
670,104 |
|
Total Capitalization |
|
1,176,790 |
|
|
1,175,445 |
|
Total |
$ |
1,944,056 |
|
$ |
1,912,385 |
|
Otter Tail Corporation |
Consolidated Statements of Cash
Flows |
In thousands |
(not audited) |
|
|
For the Six Months Ended June 30, |
|
|
2017 |
|
|
2016 |
|
Cash Flows from
Operating Activities |
|
|
Net
Income |
$ |
36,363 |
|
$ |
30,195 |
|
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities: |
|
|
Net
Income from Discontinued Operations |
|
(117 |
) |
|
(149 |
) |
Depreciation and Amortization |
|
35,762 |
|
|
36,814 |
|
Deferred
Tax Credits |
|
(734 |
) |
|
(828 |
) |
Deferred
Income Taxes |
|
8,666 |
|
|
9,679 |
|
Change in
Deferred Debits and Other Assets |
|
8,075 |
|
|
2,680 |
|
Discretionary Contribution to Pension Plan |
|
-- |
|
|
(10,000 |
) |
Change in
Noncurrent Liabilities and Deferred Credits |
|
(695 |
) |
|
6,404 |
|
Allowance
for Equity/Other Funds Used During Construction |
|
(401 |
) |
|
(475 |
) |
Stock
Compensation Expense – Equity Awards |
|
1,920 |
|
|
828 |
|
Other—Net |
|
39 |
|
|
(76 |
) |
Cash
(Used for) Provided by Current Assets and Current Liabilities: |
|
|
Change in
Receivables |
|
(12,832 |
) |
|
(12,673 |
) |
Change in
Inventories |
|
(3,527 |
) |
|
4,218 |
|
Change in
Other Current Assets |
|
2,095 |
|
|
(1,043 |
) |
Change in
Payables and Other Current Liabilities |
|
(5,878 |
) |
|
(5,441 |
) |
Change in Interest and Income Taxes Receivable/Payable |
|
590 |
|
|
4,018 |
|
Net Cash
Provided by Continuing Operations |
|
69,326 |
|
|
64,151 |
|
Net Cash (Used in) Provided by Discontinued Operations |
|
(54 |
) |
|
11 |
|
Net Cash Provided by Operating Activities |
|
69,272 |
|
|
64,162 |
|
Cash Flows from
Investing Activities |
|
|
Capital
Expenditures |
|
(56,354 |
) |
|
(79,158 |
) |
Net
Proceeds from Disposal of Noncurrent Assets |
|
2,167 |
|
|
1,080 |
|
Final
Purchase Price Adjustment – BTD-Georgia Acquisition |
|
-- |
|
|
1,500 |
|
Cash Used for Investments and Other Assets |
|
(2,431 |
) |
|
(1,719 |
) |
Net Cash Used in Investing Activities |
|
(56,618 |
) |
|
(78,297 |
) |
Cash Flows from
Financing Activities |
|
|
Changes
in Checks Written in Excess of Cash |
|
1,043 |
|
|
(2,024 |
) |
Net
Short-Term Borrowings (Repayments) |
|
15,234 |
|
|
(31,398 |
) |
Proceeds
from Issuance of Common Stock – net of Issuance Expenses |
|
4,266 |
|
|
21,645 |
|
Payments
for Retirement of Capital Stock |
|
(1,799 |
) |
|
(104 |
) |
Proceeds
from Issuance of Long-Term Debt |
|
-- |
|
|
50,000 |
|
Short-Term and Long-Term Debt Issuance Expenses |
|
-- |
|
|
(59 |
) |
Payments
for Retirement of Long-Term Debt |
|
(6,114 |
) |
|
(106 |
) |
Dividends Paid |
|
(25,284 |
) |
|
(23,819 |
) |
Net Cash (Used in) Provided by Financing
Activities |
|
(12,654 |
) |
|
14,135 |
|
Net Change in
Cash and Cash Equivalents |
|
-- |
|
|
-- |
|
Cash and Cash Equivalents at Beginning of
Period |
|
-- |
|
|
-- |
|
Cash and Cash Equivalents at End of Period |
$ |
-- |
|
$ |
-- |
|
Media contact: Cris Oehler, Vice President of Corporate Communications, (218) 531-0099 or (866) 410-8780
Investor contact: Loren Hanson, Manager of Investor Relations, (218) 739-8481 or (800) 664-1259
Otter Tail (NASDAQ:OTTR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Otter Tail (NASDAQ:OTTR)
Historical Stock Chart
From Apr 2023 to Apr 2024