Otter Tail Corporation (NASDAQ:OTTR) today announced financial
results for the year ended December 31, 2017.
2017 Summary:
|
4Q17 |
4Q16 |
|
2017 |
|
2016 |
Operating Revenues (in millions) |
$ |
206.7 |
$ |
196.6 |
$ |
849.3 |
$ |
803.5 |
Diluted Earnings Per
Share – Continuing Operations |
$ |
0.45 |
$ |
0.44 |
$ |
1.81 |
$ |
1.60 |
Add Back: Impact of Tax Reform |
|
0.05 |
|
-- |
|
0.05 |
|
-- |
Adjusted
Diluted Earnings Per Share – Continuing Operations1 |
$ |
0.50 |
$ |
0.44 |
$ |
1.86 |
$ |
1.60 |
2017 Highlights
- Consolidated net income from continuing operations increased to
$72.1 million, or $1.81 per diluted share, from $62.0 million, or
$1.60 per diluted share, in 2016.
- Consolidated net income totaled $72.4 million, or $1.82
per diluted share, compared with $62.3 million and $1.61 per
diluted share for 2016.
- The corporation’s board of directors increased the quarterly
common stock dividend to $0.335 per share, an indicated annual
dividend rate of $1.34 per share. This is a $0.06 per share
increase over the 2017 rate. The dividend is payable on March 10,
2018 to shareholders of record on February 15, 2018.
- The corporation expects 2018 diluted earnings per share from
continuing operations to be in a range of $1.80 to $1.95.
1 This release includes measures of financial performance and
presentations of financial information that are not defined by
generally accepted accounting principles (GAAP). Management
believes that presenting consolidated net income and diluted
earnings per share and net income by segment on a Non-GAAP basis by
excluding the impact of the 2017 tax reform tax rate reduction on
deferred tax values from consolidated net income and diluted
earnings per share and net income by segment will assist investors
in making an evaluation of our performance against prior periods on
a comparable basis. Management understands that there are material
limitations on the use of non-GAAP measures. Non-GAAP measures are
not substitutes for GAAP measures for the purpose of analyzing
financial performance. These non-GAAP measures are not in
accordance with, or an alternative for, measures prepared in
accordance with generally accepted accounting principles and may be
different from non-GAAP measures used by other companies. In
addition, these non-GAAP measures are not based on any
comprehensive set of accounting rules or principles. This
information should not be construed as an alternative to the
reported results, which have been determined and provided in
accordance with GAAP.
CEO Overview“Our dedicated employees again
proved to be our strongest asset as they delivered 2017 diluted
earnings per share from continuing operations of $1.81,” said
President and CEO Chuck MacFarlane. “These excellent results
include a positive $0.09 per diluted share estimated impact from
our Plastics segment’s response to hurricane-related market
dynamics.
“Our results also include a reduction of $0.05 per diluted share
from a change in value of net deferred tax assets related to the
Tax Cuts and Jobs Act signed into law on December 22, 2017. This
reduction from the new tax law was not contemplated when we updated
our 2017 diluted earnings per share guidance to $1.75 - $1.85. Our
adjusted diluted earnings per share before the tax impact was
$1.86.
“Operationally, Otter Tail Power Company continued its strong
performance, equaling 2016 for its lowest number of OSHA recordable
injuries on record and continuing high customer satisfaction scores
as measured by J.D. Power and Associates.
“Otter Tail Power Company also made excellent progress on two
key growth projects in 2017: Big Stone South-Brookings and Big
Stone South-Ellendale, two 345 kilovolt transmission projects that
the Midcontinent Independent System Operator has designated as
Multi-Value Projects. We are a 50 percent owner in both projects.
The Big Stone South-Brookings project was completed in September on
time and under budget. The Big Stone South-Ellendale project, which
Otter Tail Power Company manages, is scheduled for completion in
2019. Otter Tail expects its investment in the two projects to be
approximately $200 million.
“Looking forward, Otter Tail Power Company has a strong rate
base growth plan driven by our renewable energy and natural gas
generation projects. Both projects made good progress in their
development in 2017. The Minnesota Public Utilities Commission
approved our resource plan and the North Dakota Public Service
Commission granted Advance Determinations of Prudence for the
Merricourt wind and Astoria natural gas-fired generation projects.
Overall, Otter Tail Power Company plans to spend approximately $901
million on capital projects from 2018 through 2022, including these
investments in renewable energy, natural gas-fired generation and
regional transmission projects.
“Tax reform will benefit Otter Tail Power Company’s rate base
growth. Prior to tax reform, we were forecasting a 7.2 percent
compound annual growth rate between 2016 and 2021. With tax reform
we are projecting this will move to 9.0 percent for the timeframe
2017 through 2022.
“Also important is a positive outcome in the rate case Otter
Tail Power Company filed with the North Dakota Public Service
Commission in November, seeking permission to increase non-fuel
base rates by approximately $13 million, or 8.72 percent. The North
Dakota Public Service Commission granted an 8.64 percent interim
rate increase beginning January 1, 2018, while it considers the
overall request. We expect an adjustment related to tax reform
legislation and a final determination by the end of this year.
“Business conditions are showing signs of improvement for our
manufacturing companies.
“BTD Manufacturing, our custom metal fabricator, achieved
year-over-year net earnings improvement. The company’s customer
base in agriculture, energy, and recreational utility vehicles has
begun to show economic recovery.
“T. O. Plastics, our plastics thermoforming manufacturer,
achieved 8 percent overall revenue growth from increased sales
through deeper penetration into its primary market, horticulture
containers, and a renewed focus on the life sciences market.
“Northern Pipe Products and Vinyltech, our PVC pipe
manufacturing companies, sold more pounds and earned higher
margins, partly due to the previously mentioned hurricane-related
market dynamics, which we do not expect to repeat in 2018. But
general market conditions for PVC pipe also improved, and our pipe
manufacturers are efficient, low cost operators.
“Our strategic initiatives to grow our businesses, achieve
operational and commercial excellence, and develop our talent are
strengthening our position in the markets we serve. We remain
confident in our ability to grow earnings per share from continuing
operations in the range of 4 to 7 percent compounded annually from
$1.81 in 2017, the base year.”
Cash Flow from Operations and Liquidity
The corporation’s consolidated net cash provided by continuing
operations in 2017 was $173.6 million compared with
$163.5 million in 2016. The $10.1 million increase in cash
provided by continuing operations between the years includes a
$10.1 million increase in net income from continuing operations and
a $10.0 million reduction in discretionary contributions to
our pension plan. Changes in long-term assets and liabilities,
including deferred taxes, totaling $17.4 million were more than
offset by a $27.0 million increase in cash used for working capital
items. The increase in cash used for working capital between the
periods is primarily due to a $19.1 million increase in cash
used for payables and other current liabilities between the years
at Otter Tail Power Company related to the timing of payments as
cash use decreased $10.3 million in 2016 compared to an increase of
$8.8 million in cash used for payables and other current
liabilities in 2017. Cash used for inventories increased $6.2
million between the years primarily due to increased levels of
inventory in each of our business segments.
The following table presents the status of our lines of credit
as of December 31, 2017:
(in
thousands) |
Line Limit |
In Use OnDecember 31, 2017 |
Restricted due to Outstanding Letters of Credit |
Available onDecember 31, 2017 |
Available onDecember 31, 2016 |
Otter Tail Corporation
Credit Agreement |
$ |
130,000 |
$ |
-- |
$ |
-- |
$ |
130,000 |
$ |
130,000 |
Otter
Tail Power Company Credit Agreement |
|
170,000 |
|
112,371 |
|
300 |
|
57,329 |
|
127,067 |
Total |
$ |
300,000 |
$ |
112,371 |
$ |
300 |
$ |
187,329 |
$ |
257,067 |
|
|
|
|
|
|
|
|
|
|
|
On October 31, 2017 both the Otter Tail Corporation and the
Otter Tail Power Company Credit Agreements were amended to extend
the expiration dates by one year from October 29, 2021 to October
31, 2022.
On November 14, 2017 Otter Tail Power Company entered into a
Note Purchase Agreement, pursuant to which it agreed to issue to
the purchasers, in a private placement transaction,
$100 million aggregate principal amount of its 4.07% Series
2018A Senior Unsecured Notes due February 7, 2048 (the 2018 Notes).
The 2018 Notes were issued on February 7, 2018. Proceeds from the
2018 Notes were used to repay $100 million in outstanding
borrowings under the Otter Tail Power Company Credit Agreement. The
borrowings under the Otter Tail Power Credit Agreement were used to
retire its $33.0 million in 5.95% Senior Unsecured Series A Notes
at maturity on August 20, 2017 and to finance portions of its
investments in the Big Stone South-Brookings and Big Stone
South-Ellendale, 345-kilovolt transmission projects.
2017 Segment Performance
Summary
Electric
($s in
thousands) |
|
2017 |
|
|
2016 |
Change |
% Change |
Retail Electric
Revenues |
$ |
374,931 |
|
$ |
376,610 |
$ |
(1,679 |
) |
(0.4 |
) |
Wholesale Electric
Revenues |
|
5,173 |
|
|
4,584 |
|
589 |
|
12.8 |
|
Other
Electric Revenues |
|
54,433 |
|
|
46,189 |
|
8,244 |
|
17.8 |
|
Total Electric Revenues |
$ |
434,537 |
|
$ |
427,383 |
$ |
7,154 |
|
1.7 |
|
Net Income before
Impact of Tax Reform1 |
$ |
49,904 |
|
$ |
49,829 |
$ |
75 |
|
0.2 |
|
Impact of
Tax Reform |
|
(458 |
) |
|
-- |
|
(458 |
) |
-- |
|
Net
Income |
$ |
49,446 |
|
$ |
49,829 |
$ |
(383 |
) |
(0.8 |
) |
Heating Degree
Days |
|
5,931 |
|
|
5,314 |
|
617 |
|
11.6 |
|
Cooling Degree
Days |
|
380 |
|
|
451 |
|
(71 |
) |
(15.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
The following table shows heating and cooling degree days as a
percent of normal:
|
2017 |
2016 |
Heating Degree
Days |
93.9% |
84.1% |
Cooling Degree
Days |
82.1% |
97.4% |
|
|
|
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 2017 and 2016 and between the
years:
|
2017 vs Normal |
2016 vs Normal |
2017 vs 2016 |
Effect on Diluted
Earnings Per Share |
$(0.04) |
$(0.07) |
$ 0.03 |
|
|
|
|
Retail electric revenues decreased $1.7 million as a result
of:
- A $5.3 million increase in retail revenue related to the
recovery of increased fuel and purchased power costs due to a 1.4%
increase in kwhs sold and a 4.8% increase in fuel and purchased
power costs per kwh.
- A $4.2 million increase in Minnesota base rate revenue mainly
due to the transfer of recovery of environmental and transmission
costs and investments from riders to base rates.
- A $2.0 million increase in revenues due to increased
consumption related to colder weather in 2017 reflected in the
11.6% increase in heating degree days between the years.
- A $1.0 million increase in North Dakota Transmission Cost
Recovery (TCR) rider revenues as a result of increased investment
in transmission assets qualifying for revenue recovery through the
TCR rider.
offset by:
- A $7.1 million reduction in Minnesota Environmental Cost
Recovery (ECR) rider and TCR rider revenues due to the transfer of
qualifying costs from rider recovery into base rates, and due to
declining revenue requirements related to lower asset values due to
accumulated depreciation. Additionally, a lower return on equity in
the Midcontinent Independent System Operator (MISO) transmission
tariff related to complaints currently under judicial review
resulted in lower TCR revenues in Minnesota.
- A $3.7 million decrease in Minnesota Conservation Improvement
Program (MNCIP) incentive and cost recovery revenues related to a
$2.5 million reduction in incentives earned due to lower incentive
rates and a $1.2 million reduction in spending on MNCIP programs.
In 2017 Otter Tail Power Company began operating under a new MNCIP
program that was authorized by the Minnesota Public Utilities
Commission. This new program lowered the incentive payout by 50% in
2017. The $1.2 million reduction in spending was due to a delay in
regulatory approval for the implementation of an LED streetlight
project.
- A $1.9 million decrease in revenue due to a change in estimate
that reduced unbilled revenues.
- A $1.5 million decrease in North Dakota and South Dakota ECR
rider revenues resulting from lower values on qualifying assets due
to accumulated depreciation.
A $0.6 million increase in revenue from wholesale electric sales
from company-owned generation was mostly offset by a $0.4 million
increase in fuel costs for wholesale generation.
Other electric revenues increased $8.2 million as a result
of:
- A $7.8 million increase in MISO transmission tariff revenues,
mainly driven by increased investment in regional transmission
lines and revenues earned from the use of those lines by other
electric service providers.
- A $0.4 million increase in other revenues, mainly steam sales
at Big Stone Plant.
Production fuel costs increased $4.9 million as a result of a
4.0% increase in kwhs generated. This was due to increased
generation from Coyote Station and Hoot Lake Plant because of
Coyote Station’s greater availability, increased demand due to
colder weather in 2017 and higher market prices for electricity
that resulted in increased dispatch of Hoot Lake Plant.
The cost of purchased power to serve retail customers increased
$1.6 million despite a 3.4% decrease in kwhs purchased. This was a
result of higher market prices for electricity driven by increased
demand in 2017 due, in part, to colder weather in 2017 than in
2016.
Electric operating and maintenance expenses increased $0.1
million as a result of:
- A $3.2 million increase in labor and benefit costs due to
increased wages and higher medical benefit payments.
offset by:
- A $1.2 million decrease in transmission expenditures to
independent system operators in 2017.
- A $1.2 million decrease in MNCIP expenditures due to a delay in
regulatory approval of an LED streetlight project planned for
2017.
- A $0.7 million net reduction in other operating expenses.
Depreciation and amortization expense decreased $0.5 million due
to lower depreciation rates.
Property tax expense increased $0.8 million mainly due to
transmission line additions in South Dakota related to the
construction of the Big Stone South-Ellendale and Big Stone
South-Brookings 345-kV transmission projects.
Electric segment income tax expenses increased $0.6 million,
mainly due to $0.5 million in tax expense resulting from the effect
of tax reform on deferred taxes on a portion of supplemental
retirement program costs not subject to rate recovery.
Manufacturing
(in
thousands) |
|
2017 |
|
2016 |
Change |
% Change |
Operating
Revenues |
$ |
229,738 |
$ |
221,289 |
$ |
8,449 |
3.8 |
Net Income before
Impact of Tax Reform1 |
$ |
8,413 |
$ |
5,694 |
$ |
2,719 |
47.8 |
Impact of
Tax Reform |
|
2,637 |
|
-- |
|
2,637 |
-- |
Net
Income |
$ |
11,050 |
$ |
5,694 |
$ |
5,356 |
94.1 |
At BTD Manufacturing, Inc. (BTD), revenues increased $5.9
million. This is due to a $3.3 million increase in product sales to
manufacturers of recreational and lawn and garden equipment from
BTD’s Minnesota and Georgia manufacturing facilities offset by
lower sales in the energy end-use market at the Illinois facility.
Scrap revenues increased $2.6 million due to higher volume and
higher scrap-metal prices. Cost of products sold increased
$2.3 million and operating expenses increased $1.8 million
between the years. Collectively, these items resulted in improved
operating margins of $1.9 million in 2017 compared with 2016. A
$1.4 million decrease in interest expense as a result of the
December 2016 refinancing of long-term debt at lower interest rates
was mostly offset by a $1.0 million increase in income tax
expense. This resulted in a $2.3 million increase in
year-over-year income at BTD before recording the effects of $2.6
million in tax savings related to a reduction in deferred tax
liabilities as a result of lower tax rates from tax reform.
At T.O. Plastics, Inc. (T.O. Plastics), revenues increased $2.5
million, including increases of $1.3 million from sales of life
science products, $1.0 million from sales of horticultural products
and $0.2 million from sales of industrial products. Costs of
products sold increased $2.4 million due to the increase in sales
while operating expenses decreased $0.1 million. Depreciation
expense was down $0.3 million due to certain assets reaching the
ends of their depreciable lives in 2017. A $0.3 million
decrease in interest expense as a result of the December 2016
refinancing of long-term debt at lower interest rates was more than
offset by a $0.4 million increase in income tax expense related to
a $0.8 million increase in income before income taxes, resulting in
a $0.4 million increase in year-over-year income at T.O.
Plastics.
Plastics
(in
thousands) |
|
2017 |
|
2016 |
Change |
% Change |
Operating
Revenues |
$ |
185,132 |
$ |
154,901 |
$ |
30,231 |
19.5 |
Net Income before
Impact of Tax Reform1 |
$ |
18,433 |
$ |
10,628 |
$ |
7,805 |
73.4 |
Impact of
Tax Reform |
|
3,263 |
|
-- |
|
3,263 |
-- |
Net
Income |
$ |
21,696 |
$ |
10,628 |
$ |
11,068 |
104.1 |
Plastics segment revenues and net income increased $30.2 million
and $11.1 million, respectively, as a result of a 7.2% increase in
pounds of polyvinyl chloride (PVC) pipe sold and an 11.5% increase
in PVC pipe prices between the years. Cost of products sold
increased $16.6 million due to the increase in sales volume and a
5.9% increase in the cost per pound of pipe sold. Year-over-year
improvement in our normal business operations provided
approximately $4.4 million, or $0.11 per diluted share, of the
segment’s increase in net income. The remaining increase in net
income and earnings per diluted share is due to two
items. First, increased sales and pricing were affected by
hurricanes in the Gulf Coast region of the United States, where the
major U.S. resin production plants are located. Major resin
suppliers shut down production facilities which impacted raw
material availability. Distributors and contractors became
concerned about pipe availability. This accelerated pipe demand and
created positive sales price pressure in the market. Even though
hurricanes impacted raw material availability, our pipe companies
had sufficient raw materials to run their plants and meet the
additional demand. The impact of Hurricane Harvey on 2017 net
income and diluted earnings per share is estimated to be $3.4
million and $0.09, respectively. Second, the Plastics segment
recorded $3.3 million in tax savings, $0.08 in diluted earnings per
share, related to a reduction in deferred tax liabilities as a
result of lower tax rates from tax reform.
Corporate
(in
thousands) |
|
2017 |
|
|
2016 |
|
Change |
% Change |
Net Loss |
$ |
(10,073 |
) |
$ |
(4,114 |
) |
$ |
(5,959 |
) |
144.8 |
|
Add back:
Impact of Tax Reform |
|
(7,198 |
) |
|
-- |
|
|
(7,198 |
) |
-- |
|
Net Loss
(net-of-tax) before Impact of Tax Reform1 |
$ |
(2,875 |
) |
$ |
(4,114 |
) |
$ |
1,239 |
|
(30.1 |
) |
Corporate costs net-of-tax before impact of tax reform1
decreased $1.2 million between the years mainly due to a $0.7
million excess tax benefit related to the accounting treatment of
stock-based performance awards, a $0.3 million net-of-tax
increase in the level of corporate costs allocated to the
corporation’s operating companies and a $0.3 million reduction
in labor costs due to a reduction in the number of corporate
employees. Corporate recorded $7.2 million in additional
income tax expense due to the impact of lower tax rates under tax
reform reducing the value of deferred tax assets.
Fourth Quarter 2017 Consolidated Results
(in
thousands, except per share amounts) |
4th Quarter 2017 |
4th Quarter 2016 |
Change |
% Change |
Revenues – Continuing
Operations |
$ |
206,690 |
$ |
196,640 |
$ |
10,050 |
5.1 |
Operating
Income – Continuing Operations |
$ |
32,135 |
$ |
29,156 |
$ |
2,979 |
10.2 |
Net Income – Continuing
Operations |
$ |
18,100 |
$ |
17,397 |
$ |
703 |
4.0 |
Add back: Impact of Tax Reform |
|
1,756 |
|
-- |
|
1,756 |
-- |
Net
Income – Continuing Operations before Impact of Tax Reform1 |
$ |
19,856 |
$ |
17,397 |
$ |
2,459 |
14.1 |
Diluted EPS –
Continuing Operations |
$ |
0.45 |
$ |
0.44 |
$ |
0.01 |
2.3 |
Add back: Impact of Tax Reform on Diluted EPS |
|
0.05 |
|
-- |
|
0.05 |
-- |
Diluted
EPS – Continuing Operations before Impact of Tax Reform1 |
$ |
0.50 |
$ |
0.44 |
$ |
0.06 |
13.6 |
The increase in fourth quarter 2017 net income from continuing
operations compared with the fourth quarter 2016 was driven by
improved results in our Plastics and Manufacturing segments.
PlasticsPlastics segment net income increased $5.9 million,
which includes a $3.3 million reduction in income tax expense due
to tax reform. Plastics segment net income before the impact of tax
reform1 increased $2.6 million due to a 26.2% increase in
revenue per pound of PVC pipe sold, offset by a 4.3% decrease in
pounds of pipe sold. The increase in PVC pipe prices was partially
offset by an 11.1% increase in the cost per pound of pipe sold.
Pipe prices were up at the beginning of the fourth quarter of 2017
due to increased demand resulting from third quarter 2017
hurricanes in the Gulf Coast region of the United States. Cost of
goods sold increased $1.5 million as a result of higher resin
prices. Operating expenses increased $1.3 million, mainly due to
increased incentives earned related to 2017 financial
performance.
ManufacturingManufacturing segment net income increased $4.7
million, which includes a $2.6 million reduction in income tax
expense at BTD due to tax reform. Manufacturing segment net income
before the impact of tax reform1 increased $2.1 million
between the quarters due to improved quarter over quarter
performance at BTD. Revenues at BTD increased $6.4 million due to
increased product sales in Minnesota and Georgia to manufacturers
of recreational and lawn and garden equipment and also due to $0.7
million in increased scrap revenues related to increased volume and
higher scrap-metal prices. Net income at BTD before the impact of
tax reform1 increased $2.4 million as a result of increased
sales volume, while net income at T.O. Plastics decreased $0.3
million.
ElectricElectric segment net income decreased $2.7 million,
which includes a $0.5 million increase in income tax expense due to
tax reform. Electric segment net income before the impact of tax
reform1 decreased $2.3 million between the quarters. Operating
revenues decreased $3.4 million as a result of the following:
- A $3.5 million increase in MISO transmission tariff revenues
driven by increased investment in regional transmission lines and
revenues earned from the use of those lines by other electric
service providers.
- A $1.6 million increase in retail revenues due to colder
weather in the fourth quarter of 2017.
- A $0.8 million increase in retail revenues due to increases in
residential and industrial kwh sales.
- A $0.5 million increase in other electric revenues, mainly
steam sales at Big Stone Plant.
- A $0.4 million increase in revenue from a 27.4% increase in
wholesale kwh sales.
offset by
- A $6.3 million decrease in retail revenues due to a change in
estimate that reduced unbilled revenues by $1.9 million and a
reduction in revenue related to the recovery of fuel and purchased
power costs of $4.4 million.
- A $2.7 million decrease in MNCIP incentive and cost recovery
revenues related to a $1.7 million reduction in incentives earned
due to lower incentive rates and a $1.0 million reduction in
spending on MNCIP programs.
- A $1.3 million decrease in net revenue due to receiving higher
interim rates in the fourth quarter of 2016 compared with revenue
under final rates that went into effect in the fourth quarter of
2017.
Fuel and purchased power costs to serve retail customers
decreased $3.8 million, mainly as a result of a reduction in kwhs
purchased, while fuel costs for wholesale sales increased $0.4
million as a result of the increase in wholesale kwh sales.
Electric segment operating expenses increased $2.8 million,
including:
- A $1.1 million increase in medical insurance costs.
- A $0.7 million increase in material and supply costs.
- A $0.5 million increase in transmission service expenses.
- A $0.3 million increase in property tax expense mainly due to
transmission asset additions in South Dakota related to the
construction of the Big Stone South-Ellendale and Big Stone
South-Brookings 345 kV transmission projects.
- A $1.0 million decrease in MNCIP costs offset by $1.0 million
increase in various other expenses, including rate-case-related
expenses.
CorporateCorporate net losses increased by $7.2 million. The
entire increase in net losses resulted from a $7.2 million increase
in income tax expense due to tax reform.
Tax ReformDeferred tax assets and liabilities were reduced in
value as a result of the tax rate reduction included in the 2017
Tax Cuts and Jobs Act. Following is the impact by segment on income
tax expense for the quarter ended December 31, 2017:
(in
thousands) |
Decrease/(Increase) |
Electric |
$ |
(458 |
) |
Manufacturing |
|
2,637 |
|
Plastics
|
|
3,263 |
|
Corporate |
|
(7,198 |
) |
Total |
$ |
(1,756 |
) |
2018 Business Outlook
We anticipate 2018 diluted earnings per share to be in the range
of $1.80 to $1.95. This guidance reflects the current mix of
businesses we own, strategies for improving future operating
results, the cyclical nature of some of our businesses, and current
regulatory factors and economic challenges facing our Electric,
Manufacturing and Plastics segments. Due to the tax rate reduction
in the 2017 Tax Cuts and Jobs Act, we expect 2018 earnings for our
Manufacturing and Plastics segments to be positively impacted by
$0.09 per share offset by $0.04 per share in our corporate cost
center. We expect capital expenditures for 2018 to be
$110 million compared with actual cash used for capital
expenditures of $133 million in 2017. Our planned expenditures for
2018 include $33 million for the Big Stone South-Ellendale
transmission line project, which positively impacts earnings by
providing an immediate return on invested funds through rider
recovery mechanisms.
Segment components of our 2018 earnings per share guidance range
compared with 2017 actual earnings are as follows:
|
2017 EPS by Segment |
2018 EPS Guidance |
|
GAAP-Basis |
Impact of Tax Reform |
Before Impactof Tax Reform1 |
Low |
High |
Electric |
$1.24 |
$0.02 |
$1.26 |
$1.34 |
$1.37 |
Manufacturing |
$0.28 |
($0.07) |
$0.21 |
$0.26 |
$0.30 |
Plastics |
$0.54 |
($0.08) |
$0.46 |
$0.36 |
$0.40 |
Corporate |
($0.25) |
$0.18 |
($0.07) |
($0.16) |
($0.12) |
Total – Continuing Operations |
$1.81 |
$0.05 |
$1.86 |
$1.80 |
$1.95 |
Return on Equity |
10.6% |
|
10.8% |
10.1% |
10.9% |
Contributing to our earnings guidance for 2018 are the following
items:
• We expect 2018 Electric segment net income to be higher
than 2017 segment net income based on:
- Normal weather for 2018. Milder than normal weather in 2017
negatively impacted diluted earnings per share by an estimated
$0.04 compared to normal.
- Constructive outcome of a rate case filed in North Dakota on
November 2, 2017 with a full year of increased interim rates in
2018. Our ability to obtain final rates similar to interim rates
and reasonable rates of return depends on regulatory action under
applicable statutes and regulations. We expect the effects of any
reduction in interim or final rates as a result of lower tax rates
in the new tax law to be offset by lower tax expenses. We cannot
provide assurance our interim rates will become final.
- Increase in transmission investments and other revenues.
offset by:
- Increased operating and maintenance expenses due to a planned
maintenance outage at our Big Stone Plant of $0.05 per share and
$0.09 for increasing costs of pension, medical, workers
compensation and retiree medical benefits. The increase in pension
costs is a result of a decrease in the discount rate from 4.60% to
3.90%.
- Higher depreciation and property tax expense due to large
capital projects being put into service.
- Increased interest expense related to replacing short-term debt
at an average annual rate of 2.4% with long-term debt at rate of
4.07% along with an increase in combined short-term and long-term
borrowings to finance a portion of 2018 planned capital
expenditures.
• We expect 2018 net income from our Manufacturing
segment to increase over 2017 based on the following:
- Sales at BTD Manufacturing are expected to be flat year over
year, however, earnings are expected to improve based on stronger
year-over-year operating margins achieved through cost reductions
and improved productivity.
- An increase in earnings from T.O. Plastics mainly driven by
year-over-year sales growth in our horticulture, life science and
industrial markets.
- Lower income taxes of approximately $0.04 per share as a result
of the lower federal tax rates implemented as part of the new tax
law.
- Backlog for the manufacturing companies of approximately $166
million for 2018 compared with $118 million one year ago.
• We expect 2018 net income from the Plastics segment to
be lower than 2017 because 2017 results included sales driven by
customer reaction to the hurricanes that occurred in the Gulf of
Mexico. This had an estimated impact on earnings of $0.09 per
diluted share in 2017. We also expect lower operating margins in
2018 due to lower expected sales prices and increasing resin prices
on similar sales volumes in 2018 compared to 2017 excluding the
effect of the hurricanes on 2017 sales. Plastics net income for
2018 will be positively affected by lower effective tax rates in
2018 as a result of the new tax law.
• Corporate costs, net of tax, are expected to be higher
in 2018 than in 2017 when excluding the effect of tax reform on
2017 net losses in the corporate cost center. The higher net-of-tax
costs expected in 2018 are due, in part, to the lower tax rate that
will be in effect in 2018.
The impact of 2017 tax reform legislation on future results is
based on reasonable estimates reflecting the anticipated impact of
tax reform, and is subject to adjustment upon obtaining additional
information or to reflect future changes resulting from future
legislation, rules, regulations or interpretations impacting tax
reform. We will continue to analyze the impact of the 2017 tax
reform legislation to assess the full effects on our future
business and results.
The following table shows our 2017 capital expenditures and 2018
through 2022 anticipated capital expenditures and electric utility
average rate base:
(in
millions) |
|
2017 |
|
2018 |
|
2019 |
|
2020 |
|
2021 |
|
2022 |
Total |
Capital
Expenditures: |
|
|
|
|
|
|
|
Electric
Segment: |
|
|
|
|
|
|
|
Renewables and Natural Gas Generation |
|
$ |
1 |
$ |
308 |
$ |
102 |
$ |
50 |
$ |
1 |
$ |
462 |
Transformative Technology and Infrastructure |
|
|
-- |
|
22 |
|
32 |
|
43 |
|
39 |
|
136 |
Transmission |
|
|
45 |
|
12 |
|
9 |
|
7 |
|
7 |
|
80 |
Other |
|
|
49 |
|
40 |
|
42 |
|
45 |
|
47 |
|
223 |
Total
Electric Segment |
$ |
119 |
$ |
95 |
$ |
382 |
$ |
185 |
$ |
145 |
$ |
94 |
$ |
901 |
Manufacturing and Plastics Segments |
|
14 |
|
15 |
|
14 |
|
15 |
|
14 |
|
14 |
|
72 |
Total Capital Expenditures |
$ |
133 |
$ |
110 |
$ |
396 |
$ |
200 |
$ |
159 |
$ |
108 |
$ |
973 |
Total Electric Utility Average Rate Base |
$ |
1,055 |
$ |
1,091 |
$ |
1,297 |
$ |
1,480 |
$ |
1,568 |
$ |
1,625 |
|
The consolidated capital expenditure plan for the 2018-2022 time
period calls for $973 million based on the need for additional wind
and solar in rate base and capital spending for Astoria Station, a
natural gas-fired plant that is expected to replace Hoot Lake Plant
when it is retired in 2021. Given the increased capital expenditure
plan, our compounded annual growth rate in rate base is projected
to be 9.0% over the 2017 to 2022 timeframe.
Execution on the currently anticipated electric utility capital
expenditure plan is expected to grow rate base and be a key driver
in increasing utility earnings over the 2018 through 2022
timeframe.
CONFERENCE CALL AND WEBCAST The corporation
will host a live webcast on Tuesday, February 13, 2018, 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.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, otherwise
the listen only mode can be accessed by dialing
866-634-1342.
Risk Factors and Forward-Looking Statements that Could
Affect Future ResultsThe information in this release
includes certain forward-looking information, including 2018
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.
- Four of our operating companies have single customers that
provide a significant portion of the individual operating company’s
and the business segment’s revenue. The loss of, or significant
reduction in revenue from, any one of these customers would have a
significant negative financial impact on the operating company and
its business segment, and could have a significant negative
financial impact on us.
- 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 quarters and years ended December 31, 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 December
31, |
Year-to-Date December
31, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Operating
Revenues by Segment |
|
|
|
|
Electric |
$ |
110,351 |
|
$ |
113,741 |
|
$ |
434,537 |
|
$ |
427,383 |
|
Manufacturing |
|
57,662 |
|
|
50,846 |
|
|
229,738 |
|
|
221,289 |
|
Plastics |
|
38,716 |
|
|
32,060 |
|
|
185,132 |
|
|
154,901 |
|
Intersegment Eliminations |
|
(39 |
) |
|
(7 |
) |
|
(57 |
) |
|
(34 |
) |
Total Operating Revenues |
|
206,690 |
|
|
196,640 |
|
|
849,350 |
|
|
803,539 |
|
Operating
Expenses |
|
|
|
|
Fuel and
Purchased Power |
|
30,607 |
|
|
34,053 |
|
|
124,497 |
|
|
118,018 |
|
Nonelectric Cost of Products Sold (depreciation included
below) |
|
71,042 |
|
|
66,229 |
|
|
316,562 |
|
|
295,222 |
|
Electric
Operating and Maintenance Expense |
|
38,520 |
|
|
36,019 |
|
|
151,319 |
|
|
151,225 |
|
Nonelectric Operating and Maintenance Expense |
|
11,705 |
|
|
9,374 |
|
|
43,240 |
|
|
40,264 |
|
Depreciation and Amortization |
|
18,856 |
|
|
18,317 |
|
|
72,545 |
|
|
73,445 |
|
Property
Taxes - Electric |
|
3,825 |
|
|
3,492 |
|
|
15,053 |
|
|
14,266 |
|
Total Operating Expenses |
|
174,555 |
|
|
167,484 |
|
|
723,216 |
|
|
692,440 |
|
Operating
Income (Loss) by Segment |
|
|
|
|
Electric |
|
23,440 |
|
|
26,757 |
|
|
90,392 |
|
|
90,131 |
|
Manufacturing |
|
2,520 |
|
|
(273 |
) |
|
14,101 |
|
|
11,769 |
|
Plastics |
|
8,004 |
|
|
4,203 |
|
|
29,644 |
|
|
18,142 |
|
Corporate |
|
(1,829 |
) |
|
(1,531 |
) |
|
(8,003 |
) |
|
(8,943 |
) |
Total Operating Income |
|
32,135 |
|
|
29,156 |
|
|
126,134 |
|
|
111,099 |
|
Interest
Charges |
|
7,222 |
|
|
7,890 |
|
|
29,604 |
|
|
31,886 |
|
Other
Income |
|
935 |
|
|
474 |
|
|
2,632 |
|
|
2,905 |
|
Income Tax
Expense – Continuing Operations |
|
7,748 |
|
|
4,343 |
|
|
27,043 |
|
|
20,081 |
|
Net Income
(Loss) by Segment – Continuing Operations |
|
|
|
|
Electric |
|
12,883 |
|
|
15,630 |
|
|
49,446 |
|
|
49,829 |
|
Manufacturing |
|
4,315 |
|
|
(414 |
) |
|
11,050 |
|
|
5,694 |
|
Plastics |
|
8,530 |
|
|
2,645 |
|
|
21,696 |
|
|
10,628 |
|
Corporate |
|
(7,628 |
) |
|
(464 |
) |
|
(10,073 |
) |
|
(4,114 |
) |
Net Income from
Continuing Operations |
|
18,100 |
|
|
17,397 |
|
|
72,119 |
|
|
62,037 |
|
Discontinued
Operations |
|
|
|
|
Income - net of Income Tax Expense of $160, $24, $213 and
$138 for the respective periods |
|
242 |
|
|
113 |
|
|
320 |
|
|
284 |
|
Net Income |
$ |
18,342 |
|
$ |
17,510 |
|
$ |
72,439 |
|
$ |
62,321 |
|
Average Number
of Common Shares Outstanding: |
|
|
|
|
Basic |
|
39,507,796 |
|
|
39,236,861 |
|
|
39,457,261 |
|
|
38,546,459 |
|
Diluted |
|
39,854,801 |
|
|
39,551,835 |
|
|
39,748,347 |
|
|
38,731,010 |
|
|
|
|
|
|
Basic Earnings
Per Common Share: |
|
|
|
|
Continuing Operations |
$ |
0.45 |
|
$ |
0.45 |
|
$ |
1.83 |
|
$ |
1.61 |
|
Discontinued Operations |
|
0.01 |
|
|
-- |
|
|
0.01 |
|
|
0.01 |
|
|
$ |
0.46 |
|
$ |
0.45 |
|
$ |
1.84 |
|
$ |
1.62 |
|
Diluted
Earnings Per Common Share: |
|
|
|
|
Continuing Operations |
$ |
0.45 |
|
$ |
0.44 |
|
$ |
1.81 |
|
$ |
1.60 |
|
Discontinued Operations |
|
0.01 |
|
|
-- |
|
|
0.01 |
|
|
0.01 |
|
|
$ |
0.46 |
|
$ |
0.44 |
|
$ |
1.82 |
|
$ |
1.61 |
|
Otter Tail Corporation |
Consolidated Balance Sheets |
Assets |
in thousands |
(not audited) |
|
December 31, |
|
|
2017 |
|
2016 |
|
|
|
Current
Assets |
|
|
Cash and
Cash Equivalents |
$ |
16,216 |
$ |
-- |
Accounts
Receivable: |
|
|
Trade—Net |
|
68,466 |
|
68,242 |
Other |
|
7,761 |
|
5,850 |
Inventories |
|
88,034 |
|
83,740 |
Unbilled
Revenues |
|
22,427 |
|
20,080 |
Income
Taxes Receivable |
|
1,181 |
|
662 |
Regulatory Assets |
|
22,551 |
|
21,297 |
Other |
|
12,491 |
|
8,144 |
Total Current Assets |
|
239,127 |
|
208,015 |
|
|
|
Investments |
|
8,629 |
|
8,417 |
Other
Assets |
|
36,006 |
|
34,104 |
Goodwill |
|
37,572 |
|
37,572 |
Other
Intangibles—Net |
|
13,765 |
|
14,958 |
Regulatory
Assets |
|
129,576 |
|
132,094 |
|
|
|
Plant |
|
|
Electric
Plant in Service |
|
1,981,018 |
|
1,860,357 |
Nonelectric Operations |
|
216,937 |
|
211,826 |
Construction Work in Progress |
|
141,067 |
|
153,261 |
Total Gross Plant |
|
2,339,022 |
|
2,225,444 |
Less Accumulated Depreciation and Amortization |
|
799,419 |
|
748,219 |
Net Plant |
|
1,539,603 |
|
1,477,225 |
Total |
$ |
2,004,278 |
$ |
1,912,385 |
Otter Tail Corporation |
Consolidated Balance Sheets |
Liabilities and Equity |
in thousands |
(not audited) |
|
December 31, |
|
|
2017 |
|
|
2016 |
|
|
|
|
Current
Liabilities |
|
|
Short-Term Debt |
$ |
112,371 |
|
$ |
42,883 |
|
Current
Maturities of Long-Term Debt |
|
186 |
|
|
33,201 |
|
Accounts
Payable |
|
84,185 |
|
|
89,350 |
|
Accrued
Salaries and Wages |
|
21,534 |
|
|
17,497 |
|
Accrued
Taxes |
|
16,808 |
|
|
16,000 |
|
Regulatory Liabilities |
|
9,688 |
|
|
3,294 |
|
Other
Accrued Liabilities |
|
11,389 |
|
|
12,083 |
|
Liabilities of Discontinued Operations |
|
492 |
|
|
1,363 |
|
Total Current Liabilities |
|
256,653 |
|
|
215,671 |
|
|
|
|
Pensions
Benefit Liability |
|
109,708 |
|
|
97,627 |
|
Other
Postretirement Benefits Liability |
|
69,774 |
|
|
62,571 |
|
Other
Noncurrent Liabilities |
|
22,769 |
|
|
21,706 |
|
|
|
|
Deferred
Credits |
|
|
Deferred
Income Taxes |
|
100,501 |
|
|
226,591 |
|
Deferred
Tax Credits |
|
21,379 |
|
|
22,849 |
|
Regulatory Liabilities |
|
232,893 |
|
|
82,433 |
|
Other |
|
3,329 |
|
|
7,492 |
|
Total Deferred Credits |
|
358,102 |
|
|
339,365 |
|
|
|
|
Capitalization |
|
|
Long-Term
Debt—Net |
|
490,380 |
|
|
505,341 |
|
|
|
|
Cumulative Preferred Shares |
|
-- |
|
|
-- |
|
|
|
|
Cumulative Preference Shares |
|
-- |
|
|
-- |
|
|
|
|
Common Equity |
|
|
Common
Shares, Par Value $5 Per Share |
|
197,787 |
|
|
196,741 |
|
Premium
on Common Shares |
|
343,450 |
|
|
337,684 |
|
Retained
Earnings |
|
161,286 |
|
|
139,479 |
|
Accumulated Other Comprehensive Loss |
|
(5,631 |
) |
|
(3,800 |
) |
Total Common Equity |
|
696,892 |
|
|
670,104 |
|
Total Capitalization |
|
1,187,272 |
|
|
1,175,445 |
|
Total |
$ |
2,004,278 |
|
$ |
1,912,385 |
|
Otter Tail Corporation |
Consolidated Statements of Cash
Flows |
In thousands |
(not audited) |
|
|
For the Year Ended December 31, |
|
|
2017 |
|
|
2016 |
|
Cash Flows from
Operating Activities |
|
|
Net
Income |
$ |
72,439 |
|
$ |
62,321 |
|
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities: |
|
|
Net
Income from Discontinued Operations |
|
(320 |
) |
|
(284 |
) |
Depreciation and Amortization |
|
72,545 |
|
|
73,445 |
|
Deferred
Tax Credits |
|
(1,470 |
) |
|
(1,657 |
) |
Deferred
Income Taxes |
|
24,001 |
|
|
19,124 |
|
Change in
Deferred Debits and Other Assets |
|
(2,173 |
) |
|
(10,090 |
) |
Discretionary Contribution to Pension Plan |
|
-- |
|
|
(10,000 |
) |
Change in
Noncurrent Liabilities and Deferred Credits |
|
19,257 |
|
|
14,685 |
|
Allowance
for Equity/Other Funds Used During Construction |
|
(986 |
) |
|
(857 |
) |
Stock
Compensation Expense – Equity Awards |
|
3,642 |
|
|
3,178 |
|
Other—Net |
|
10 |
|
|
7 |
|
Cash
(Used for) Provided by Current Assets and Current Liabilities: |
|
|
Change in
Receivables |
|
(2,135 |
) |
|
(944 |
) |
Change in
Inventories |
|
(4,294 |
) |
|
1,874 |
|
Change in
Other Current Assets |
|
(3,060 |
) |
|
(2,541 |
) |
Change in
Payables and Other Current Liabilities |
|
(2,667 |
) |
|
11,941 |
|
Change in Interest Payable and Income Taxes Receivable/Payable |
|
(1,186 |
) |
|
3,339 |
|
Net Cash
Provided by Continuing Operations |
|
173,603 |
|
|
163,541 |
|
Net Cash Used in Discontinued Operations |
|
(26 |
) |
|
(155 |
) |
Net Cash Provided by Operating Activities |
|
173,577 |
|
|
163,386 |
|
Cash Flows from
Investing Activities |
|
|
Capital
Expenditures |
|
(132,913 |
) |
|
(161,259 |
) |
Proceeds
from Disposal of Noncurrent Assets |
|
4,491 |
|
|
4,837 |
|
Acquisition Purchase Price Cash Received |
|
-- |
|
|
1,500 |
|
Cash Used for Investments and Other Assets |
|
(4,168 |
) |
|
(4,402 |
) |
Net Cash Used in Investing Activities |
|
(132,590 |
) |
|
(159,324 |
) |
Cash Flows from
Financing Activities |
|
|
Change in
Checks Written in Excess of Cash |
|
2,434 |
|
|
(3,363 |
) |
Net
Short-Term Borrowings (Repayments) |
|
69,488 |
|
|
(37,789 |
) |
Proceeds
from Issuance of Common Stock – net of Issuance Expenses |
|
4,349 |
|
|
43,873 |
|
Payments
for Retirement of Capital Stock |
|
(1,799 |
) |
|
(104 |
) |
Proceeds
from Issuance of Long-Term Debt |
|
-- |
|
|
130,000 |
|
Short-Term and Long-Term Debt Issuance Expenses |
|
(380 |
) |
|
(888 |
) |
Payments
for Retirement of Long-Term Debt |
|
(48,231 |
) |
|
(87,547 |
) |
Dividends Paid and Other Distributions |
|
(50,632 |
) |
|
(48,244 |
) |
Net Cash Used in Financing Activities |
|
(24,771 |
) |
|
(4,062 |
) |
Net Change in
Cash and Cash Equivalents |
|
16,216 |
|
|
-- |
|
Cash and Cash Equivalents at Beginning of
Period |
|
-- |
|
|
-- |
|
Cash and Cash Equivalents at End of Period |
$ |
16,216 |
|
$ |
-- |
|
|
|
Media
contact: |
Cris Oehler,
Vice President, Corporate Communication, (218) 531-0099 or (866)
410-8780 |
Investor
contact: |
Loren Hanson,
Manager of Investor Relations, (218) 739-8481 or (800)
664-1259 |
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