Toggle SGML Header (+)


Section 1: 10-Q (FORM 10-Q)

ottr20200331_10q.htm
0001466593 Otter Tail Corp false --12-31 Q1 2020 1,500,000 1,500,000 0 0 0 0 1,000,000 1,000,000 0 0 0 0 5 5 50,000,000 50,000,000 40,376,448 40,157,591 0.37 0.35 0 6 2040 2020 3.55 3.55 December 15, 2026 December 15, 2026 4.63 4.63 December 1, 2021 December 1, 2021 6.15 6.15 August 20, 2022 6.37 6.37 August 20, 2027 August 20, 2022 4.68 4.68 February 27, 2029 August 20, 2027 February 27, 2029 3.07 3.07 October 10, 2029 October 10, 2029 3.22 3.22 February 25, 2030 February 25, 2030 6.47 6.47 August 20, 2037 August 20, 2037 3.52 3.52 October 10, 2039 October 10, 2039 3.62 3.62 February 25, 2040 February 25, 2040 5.47 5.47 February 27, 2044 February 27, 2044 4.07 4.07 February 7, 2048 February 7, 2048 3.82 3.82 October 10, 2049 October 10, 2049 3.92 3.92 February 25, 2050 February 25, 2050 2.54 2.54 March 18, 2021 March 18, 2021 3.55 3.55 December 15, 2026 December 15, 2026 4.63 4.63 December 1, 2021 December 1, 2021 6.15 6.15 August 20, 2022 August 20, 2022 6.37 6.37 August 20, 2027 August 20, 2027 4.68 4.68 February 27, 2029 February 27, 2029 3.07 3.07 October 10, 2029 October 10, 2029 6.47 6.47 August 20, 2037 August 20, 2037 3.52 3.52 October 10, 2039 October 10, 2039 5.47 5.47 February 27, 2044 February 27, 2044 4.07 4.07 February 7, 2048 February 7, 2048 3.82 3.82 October 10, 2049 October 10, 2049 2.54 2.54 March 18, 2021 March 18, 2021 1.50 2016 2017 2018 2019 2016 2017 2018 2019 2016 2017 2018 2019 Holder is COBANK, a cooperative lender. Interest payments are subject to cash credits which may result in a lower effective interest rate. Corporate cost included in nonservice cost components of postretirement benefits. Amortization of prior service costs and net actuarial losses from other comprehensive income are included in nonservice cost components of postretirement benefits. Allocation of Costs: Service costs included in OTP capital expenditures $ 118 $ 91 Service costs included in electric operation and maintenance expenses 333 223 Service costs included in other nonelectric expenses 11 7 Nonservice costs capitalized as regulatory assets 122 333 Nonservice costs included in nonservice cost components of postretirement benefits 355 840 Costs subject to recovery without a rate of return. Allocation of costs: Service costs included in OTP capital expenditures $ 423 $ 390 Service costs included in electric operation and maintenance expenses 1,192 950 Service costs included in other nonelectric expenses 40 33 Nonservice costs capitalized as regulatory assets 11 (150 ) Nonservice costs included in nonservice cost components of postretirement benefits 33 (379 ) Amount eligible for recovery under an alternative revenue program which includes an incentive or rate of return. Allocation of Costs: Service costs included in electric operation and maintenance expenses $ - $ 26 Service costs included in other nonelectric expenses 45 79 Nonservice costs included in nonservice cost components of postretirement benefits 471 557 25 25 00014665932020-01-012020-03-31 xbrli:shares 00014665932020-04-30 thunderdome:item iso4217:USD 00014665932020-03-31 00014665932019-12-31 0001466593ottr:CumulativePreferredSharesMember2020-03-31 0001466593ottr:CumulativePreferredSharesMember2019-12-31 iso4217:USDxbrli:shares 0001466593ottr:CumulativePreferenceSharesMember2020-03-31 0001466593ottr:CumulativePreferenceSharesMember2019-12-31 0001466593us-gaap:ElectricityMember2020-01-012020-03-31 0001466593us-gaap:ElectricityMember2019-01-012019-03-31 0001466593us-gaap:ProductMember2020-01-012020-03-31 0001466593us-gaap:ProductMember2019-01-012019-03-31 00014665932019-01-012019-03-31 0001466593us-gaap:ElectricityPurchasedMember2020-01-012020-03-31 0001466593us-gaap:ElectricityPurchasedMember2019-01-012019-03-31 0001466593us-gaap:CommonStockMember2019-12-31 0001466593us-gaap:AdditionalPaidInCapitalMember2019-12-31 0001466593us-gaap:RetainedEarningsMember2019-12-31 0001466593us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-31 0001466593us-gaap:CommonStockMember2020-01-012020-03-31 0001466593us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-31 0001466593us-gaap:RetainedEarningsMember2020-01-012020-03-31 0001466593us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-31 0001466593us-gaap:CommonStockMember2020-03-31 0001466593us-gaap:AdditionalPaidInCapitalMember2020-03-31 0001466593us-gaap:RetainedEarningsMember2020-03-31 0001466593us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-31 0001466593us-gaap:CommonStockMember2018-12-31 0001466593us-gaap:AdditionalPaidInCapitalMember2018-12-31 0001466593us-gaap:RetainedEarningsMember2018-12-31 0001466593us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-31 00014665932018-12-31 0001466593us-gaap:CommonStockMember2019-01-012019-03-31 0001466593us-gaap:AdditionalPaidInCapitalMember2019-01-012019-03-31 0001466593us-gaap:RetainedEarningsMember2019-01-012019-03-31 0001466593us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-03-31 0001466593us-gaap:CommonStockMember2019-03-31 0001466593us-gaap:AdditionalPaidInCapitalMember2019-03-31 0001466593us-gaap:RetainedEarningsMember2019-03-31 0001466593us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-31 00014665932019-03-31 0001466593us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquityFundsMember2020-03-31 0001466593us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2020-03-31 0001466593us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberottr:GovernmentBackedAndGovernmentSponsoredEnterprisesDebtSecuritiesMember2020-03-31 0001466593us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberottr:MoneyMarketAndMutualFundsMember2020-03-31 0001466593us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-03-31 0001466593us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-03-31 0001466593us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquityFundsMember2019-12-31 0001466593us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2019-12-31 0001466593us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberottr:GovernmentBackedAndGovernmentSponsoredEnterprisesDebtSecuritiesMember2019-12-31 0001466593us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberottr:MoneyMarketAndMutualFundsMember2019-12-31 0001466593us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2019-12-31 0001466593us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2019-12-31 0001466593us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2020-03-31 xbrli:pure 0001466593us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2020-01-012020-03-31 0001466593us-gaap:CustomerRelationshipsMember2020-03-31 utr:M 0001466593us-gaap:CustomerRelationshipsMembersrt:MinimumMember2020-01-012020-03-31 0001466593us-gaap:CustomerRelationshipsMembersrt:MaximumMember2020-01-012020-03-31 0001466593us-gaap:OtherIntangibleAssetsMember2020-03-31 0001466593us-gaap:OtherIntangibleAssetsMembersrt:MinimumMember2020-01-012020-03-31 0001466593us-gaap:OtherIntangibleAssetsMembersrt:MaximumMember2020-01-012020-03-31 0001466593us-gaap:CustomerRelationshipsMember2019-12-31 0001466593us-gaap:CustomerRelationshipsMembersrt:MinimumMember2019-01-012019-12-31 0001466593us-gaap:CustomerRelationshipsMembersrt:MaximumMember2019-01-012019-12-31 0001466593us-gaap:OtherIntangibleAssetsMember2019-12-31 0001466593us-gaap:OtherIntangibleAssetsMembersrt:MinimumMember2019-01-012019-12-31 0001466593us-gaap:OtherIntangibleAssetsMembersrt:MaximumMember2019-01-012019-12-31 0001466593us-gaap:SalesRevenueSegmentMemberus-gaap:CustomerConcentrationRiskMember2019-01-012019-12-31 0001466593us-gaap:SalesRevenueSegmentMemberus-gaap:CustomerConcentrationRiskMemberottr:ElectricMember2019-01-012019-12-31 0001466593us-gaap:SalesRevenueSegmentMemberus-gaap:CustomerConcentrationRiskMemberottr:CustomerThatManufacturesAndSellsRecreationalVehiclesMemberottr:ManufacturingMember2019-01-012019-12-31 0001466593us-gaap:SalesRevenueSegmentMemberus-gaap:CustomerConcentrationRiskMemberottr:CustomerThatManufacturesAndSellsLawnAndGardenEquipmentMemberottr:ManufacturingMember2019-01-012019-12-31 0001466593us-gaap:SalesRevenueSegmentMemberus-gaap:CustomerConcentrationRiskMemberottr:ManufacturingMember2019-01-012019-12-31 0001466593us-gaap:SalesRevenueSegmentMemberus-gaap:CustomerConcentrationRiskMemberottr:PlasticsMember2019-01-012019-12-31 0001466593us-gaap:SalesRevenueSegmentMemberus-gaap:CustomerConcentrationRiskMemberottr:CustomerOneMemberottr:PlasticsMember2019-01-012019-12-31 0001466593us-gaap:SalesRevenueSegmentMemberus-gaap:CustomerConcentrationRiskMemberottr:CustomerTwoMemberottr:PlasticsMember2019-01-012019-12-31 0001466593us-gaap:SalesRevenueNetMembercountry:US2020-01-012020-03-31 0001466593us-gaap:SalesRevenueNetMembercountry:US2019-01-012019-03-31 0001466593us-gaap:OperatingSegmentsMemberus-gaap:RetailMemberottr:ElectricMember2020-01-012020-03-31 0001466593us-gaap:OperatingSegmentsMemberus-gaap:RetailMemberottr:ElectricMember2019-01-012019-03-31 0001466593us-gaap:OperatingSegmentsMemberus-gaap:ElectricTransmissionMemberottr:ElectricMember2020-01-012020-03-31 0001466593us-gaap:OperatingSegmentsMemberus-gaap:ElectricTransmissionMemberottr:ElectricMember2019-01-012019-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:WholesaleMemberottr:ElectricMember2020-01-012020-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:WholesaleMemberottr:ElectricMember2019-01-012019-03-31 0001466593us-gaap:OperatingSegmentsMemberus-gaap:ProductAndServiceOtherMemberottr:ElectricMember2020-01-012020-03-31 0001466593us-gaap:OperatingSegmentsMemberus-gaap:ProductAndServiceOtherMemberottr:ElectricMember2019-01-012019-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:ElectricMember2020-01-012020-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:ElectricMember2019-01-012019-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:MetalPartsAndToolingMemberottr:ManufacturingMember2020-01-012020-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:MetalPartsAndToolingMemberottr:ManufacturingMember2019-01-012019-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:PlasticProductsMemberottr:ManufacturingMember2020-01-012020-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:PlasticProductsMemberottr:ManufacturingMember2019-01-012019-03-31 0001466593us-gaap:OperatingSegmentsMemberus-gaap:ManufacturedProductOtherMemberottr:ManufacturingMember2020-01-012020-03-31 0001466593us-gaap:OperatingSegmentsMemberus-gaap:ManufacturedProductOtherMemberottr:ManufacturingMember2019-01-012019-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:ManufacturingMember2020-01-012020-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:ManufacturingMember2019-01-012019-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:PlasticsMember2020-01-012020-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:PlasticsMember2019-01-012019-03-31 0001466593us-gaap:IntersegmentEliminationMember2020-01-012020-03-31 0001466593us-gaap:IntersegmentEliminationMember2019-01-012019-03-31 0001466593ottr:CorporateAndEliminationsMember2020-01-012020-03-31 0001466593ottr:CorporateAndEliminationsMember2019-01-012019-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:ElectricMember2020-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:ElectricMember2019-12-31 0001466593us-gaap:OperatingSegmentsMemberottr:ManufacturingMember2020-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:ManufacturingMember2019-12-31 0001466593us-gaap:OperatingSegmentsMemberottr:PlasticsMember2020-03-31 0001466593us-gaap:OperatingSegmentsMemberottr:PlasticsMember2019-12-31 0001466593ottr:CorporateAndEliminationsMember2020-03-31 0001466593ottr:CorporateAndEliminationsMember2019-12-31 0001466593ottr:MerricourtProjectMemberottr:EDFMemberottr:OtterTailPowerCompanyMember2016-11-162016-11-16 0001466593ottr:MerricourtProjectMemberottr:EDFMemberottr:OtterTailPowerCompanyMember2019-06-112019-06-11 0001466593ottr:MerricourtProjectMemberottr:EDFMemberottr:OtterTailPowerCompanyMember2019-07-162019-07-16 0001466593ottr:MerricourtProjectMemberottr:EDFMemberottr:OtterTailPowerCompanyMember2020-01-012020-03-31 0001466593ottr:AstoriaStationProjectMemberottr:OtterTailPowerCompanyMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:The2016GeneralRateCaseMemberottr:MinnesotaPublicUtilitiesCommissionMember2017-05-01 0001466593ottr:OtterTailPowerCompanyMemberottr:The2010GeneralRateCaseMemberottr:NorthDakotaPublicServiceCommissionMember2017-11-02 0001466593ottr:OtterTailPowerCompanyMemberottr:The2017GeneralRateCaseMemberottr:NorthDakotaPublicServiceCommissionMember2018-03-232018-03-23 0001466593ottr:OtterTailPowerCompanyMemberottr:The2017GeneralRateCaseMemberottr:NorthDakotaPublicServiceCommissionMember2018-03-23 0001466593ottr:OtterTailPowerCompanyMemberottr:The2017GeneralRateCaseMemberottr:NorthDakotaPublicServiceCommissionMember2018-09-262018-09-26 0001466593ottr:OtterTailPowerCompanyMemberottr:The2017GeneralRateCaseMemberottr:NorthDakotaPublicServiceCommissionMember2018-09-26 0001466593ottr:OtterTailPowerCompanyMemberottr:The2017GeneralRateCaseMemberottr:NorthDakotaPublicServiceCommissionMember2019-04-012019-04-30 0001466593ottr:OtterTailPowerCompanyMemberottr:The2018GeneralRateCaseMemberottr:SouthDakotaPublicUtilitiesCommissionMember2018-04-202018-04-20 0001466593ottr:OtterTailPowerCompanyMemberottr:The2018GeneralRateCaseMemberottr:SouthDakotaPublicUtilitiesCommissionMember2018-04-20 0001466593ottr:OtterTailPowerCompanyMemberottr:The2018GeneralRateCaseMemberottr:SouthDakotaPublicUtilitiesCommissionMember2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:The2018GeneralRateCaseMemberottr:SouthDakotaPublicUtilitiesCommissionMember2019-05-30 0001466593ottr:OtterTailPowerCompanyMemberottr:The2018GeneralRateCaseMemberottr:SouthDakotaPublicUtilitiesCommissionMember2019-05-302019-05-30 0001466593ottr:OtterTailPowerCompanyMemberottr:The2018GeneralRateCaseMemberottr:SouthDakotaPublicUtilitiesCommissionMember2019-07-092019-07-09 0001466593ottr:OtterTailPowerCompanyMemberus-gaap:SubsequentEventMember2020-05-012020-05-01 0001466593ottr:OtterTailPowerCompanyMemberottr:LitigationCaseWithMinnesotaCustomersMember2019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:RenewableResourceAdjustmentMemberottr:Minnesota1Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:RenewableResourceAdjustmentMemberottr:Minnesota1Member2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:ConservationImprovementProgramCostsAndIncentivesMemberottr:Minnesota1Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:ConservationImprovementProgramCostsAndIncentivesMemberottr:Minnesota1Member2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:Minnesota1Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:Minnesota1Member2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:EnvironmentalCostRecoveryRiderMemberottr:Minnesota1Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:EnvironmentalCostRecoveryRiderMemberottr:Minnesota1Member2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:NorthDakota1Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:NorthDakota1Member2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:RenewableResourceAdjustmentMemberottr:NorthDakota1Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:RenewableResourceAdjustmentMemberottr:NorthDakota1Member2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:GenerationCostRecoveryMemberottr:NorthDakota1Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:GenerationCostRecoveryMemberottr:NorthDakota1Member2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:EnvironmentalCostRecoveryRiderMemberottr:NorthDakota1Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:EnvironmentalCostRecoveryRiderMemberottr:NorthDakota1Member2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:PhaseInRatePlanMemberottr:SouthDakota1Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:PhaseInRatePlanMemberottr:SouthDakota1Member2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:SouthDakota1Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:SouthDakota1Member2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:ConservationImprovementProgramCostsAndIncentivesMemberottr:SouthDakota1Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:ConservationImprovementProgramCostsAndIncentivesMemberottr:SouthDakota1Member2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:EnvironmentalCostRecoveryRiderMemberottr:SouthDakota1Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:EnvironmentalCostRecoveryRiderMemberottr:SouthDakota1Member2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMember2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:ConservationImprovementProgramCostsAndIncentivesMemberottr:Minnesota1Memberottr:The2019IncentiveAndCostRecoveryMember2020-01-012020-03-31 utr:kWh 0001466593ottr:OtterTailPowerCompanyMemberottr:ConservationImprovementProgramCostsAndIncentivesMemberottr:Minnesota1Memberottr:The2018IncentiveAndCostRecoveryMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:ConservationImprovementProgramCostsAndIncentivesMemberottr:Minnesota1Memberottr:The2017IncentiveAndCostRecoveryMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:Minnesota1Memberottr:The2018AnnualUpdateScenarioAMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:Minnesota1Memberottr:The2018AnnualUpdateScenarioBMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:Minnesota1Memberottr:The2017RateResetMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:EnvironmentalCostRecoveryRiderMemberottr:Minnesota1Memberottr:The2018AnnualUpdateMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:RenewableResourceAdjustmentMemberottr:Minnesota1Memberottr:The2019AnnualUpdateRevisedMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:RenewableResourceAdjustmentMemberottr:Minnesota1Memberottr:The2018AnnualUpdateMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:RenewableResourceAdjustmentMemberottr:NorthDakota1Memberottr:The2020AnnualUpdateMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:RenewableResourceAdjustmentMemberottr:NorthDakota1Memberottr:The2019AnnualUpdateMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:RenewableResourceAdjustmentMemberottr:NorthDakota1Memberottr:The2018RateResetForEffectOfTCJAMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:NorthDakota1Memberottr:The2019AnnualUpdateMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:NorthDakota1Memberottr:The2018SupplementalUpdateMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:NorthDakota1Memberottr:The2018RateResetForEffectOfTCJAMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:EnvironmentalCostRecoveryRiderMemberottr:NorthDakota1Memberottr:The2019AnnualUpdateMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:EnvironmentalCostRecoveryRiderMemberottr:NorthDakota1Memberottr:The2018AnnualUpdateMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:EnvironmentalCostRecoveryRiderMemberottr:NorthDakota1Memberottr:The2018RateResetForEffectOfTCJAMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:GenerationCostRecoveryMemberottr:NorthDakota1Memberottr:The2020AnnualUpdateMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:GenerationCostRecoveryMemberottr:NorthDakota1Memberottr:The2019InitialRequestMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:SouthDakota1Memberottr:The2020AnnualUpdateMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:SouthDakota1Memberottr:The2019RateResetMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:SouthDakota1Memberottr:The2019AnnualUpdateMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:TransmissionCostRecoveryRiderMemberottr:SouthDakota1Memberottr:The2018InterimRateResetMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:EnvironmentalCostRecoveryRiderMemberottr:SouthDakota1Memberottr:The2018InterimRateResetMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:PhaseInRatePlanMemberottr:SouthDakota1Memberottr:The2019InitialRequestMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:FederalEnergyRegulatoryCommissionMember2013-11-122013-11-12 0001466593ottr:OtterTailPowerCompanyMemberottr:FederalEnergyRegulatoryCommissionMember2015-12-012015-12-22 0001466593ottr:OtterTailPowerCompanyMemberottr:FederalEnergyRegulatoryCommissionMember2016-09-282016-09-28 0001466593ottr:OtterTailPowerCompanyMemberottr:FederalEnergyRegulatoryCommissionMember2014-11-062014-11-06 0001466593ottr:OtterTailPowerCompanyMemberottr:FederalEnergyRegulatoryCommissionMember2016-09-28 0001466593ottr:OtterTailPowerCompanyMemberottr:FederalEnergyRegulatoryCommissionMember2015-02-122015-02-12 0001466593ottr:OtterTailPowerCompanyMemberottr:FederalEnergyRegulatoryCommissionMember2016-06-012016-06-30 0001466593ottr:OtterTailPowerCompanyMemberottr:FederalEnergyRegulatoryCommissionMember2020-03-31 0001466593ottr:FederalEnergyRegulatoryCommissionMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:FirstComplaintPeriodMemberottr:FederalEnergyRegulatoryCommissionMember2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:FirstComplaintPeriodMemberottr:FederalEnergyRegulatoryCommissionMember2016-09-282016-09-28 0001466593ottr:OtterTailPowerCompanyMemberottr:FirstComplaintPeriodMemberottr:FederalEnergyRegulatoryCommissionMember2019-01-012019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:FirstComplaintPeriodMemberottr:FederalEnergyRegulatoryCommissionMember2015-01-052015-01-05 0001466593ottr:OtterTailPowerCompanyMemberottr:SecondComplaintPeriodMemberottr:FederalEnergyRegulatoryCommissionMember2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SecondComplaintPeriodMemberottr:FederalEnergyRegulatoryCommissionMember2016-09-282016-09-28 0001466593ottr:OtterTailPowerCompanyMemberottr:SecondComplaintPeriodMemberottr:FederalEnergyRegulatoryCommissionMember2019-11-212019-11-21 0001466593ottr:OtterTailPowerCompanyMemberottr:SecondComplaintPeriodMemberottr:FederalEnergyRegulatoryCommissionMember2015-01-052015-01-05 0001466593ottr:PriorServiceCostsAndActuarialLossesOnPensionsAndOtherPostretirementBenefitsMember2020-03-31 0001466593ottr:AccumulatedAssetRetirementObligationAROAccretiondepreciationAdjustmentMember2020-03-31 0001466593ottr:MinnesotaTransmissionCostRecoveryRiderAccruedRevenuesMember2020-03-31 0001466593ottr:MinnesotaTransmissionCostRecoveryRiderAccruedRevenuesMember2020-01-012020-03-31 0001466593ottr:ConservationImprovementProgramCostsAndIncentivesMember2020-03-31 0001466593ottr:ConservationImprovementProgramCostsAndIncentivesMember2020-01-012020-03-31 0001466593ottr:MISOSchedule2626ATransmissionCostRecoveryRiderTrueUpMember2020-03-31 0001466593ottr:MISOSchedule2626ATransmissionCostRecoveryRiderTrueUpMember2020-01-012020-03-31 0001466593ottr:NonserviceCostsComponentsOfPostretirementBenefitsCapitalizedForRatemakingPurposesAndSubjectToDeferredRecoveryMember2020-03-31 0001466593ottr:BigStoneIIUnrecoveredProjectCostsMinnesotaMember2020-03-31 0001466593ottr:BigStoneIIUnrecoveredProjectCostsMinnesotaMember2020-01-012020-03-31 0001466593ottr:DebtReacquisitionPremiumsMember2020-03-31 0001466593ottr:DebtReacquisitionPremiumsMember2020-01-012020-03-31 0001466593ottr:DeferredMarkedToMarketLossesMember2020-03-31 0001466593ottr:DeferredMarkedToMarketLossesMember2020-01-012020-03-31 0001466593ottr:BigStoneIIUnrecoveredProjectCostsSouthDakotaMember2020-03-31 0001466593ottr:BigStoneIIUnrecoveredProjectCostsSouthDakotaMember2020-01-012020-03-31 0001466593ottr:MinnesotaRenewableResourceRiderAccruedRevenuesMember2020-03-31 0001466593ottr:MinnesotaRenewableResourceRiderAccruedRevenuesMember2020-01-012020-03-31 0001466593ottr:SouthDakotaDeferredRateCaseExpensesSubjectToRecoveryMember2020-03-31 0001466593ottr:SouthDakotaDeferredRateCaseExpensesSubjectToRecoveryMember2020-01-012020-03-31 0001466593ottr:NorthDakotaDeferredRateCaseExpensesSubjectToRecoveryMember2020-03-31 0001466593ottr:NorthDakotaDeferredRateCaseExpensesSubjectToRecoveryMember2020-01-012020-03-31 0001466593ottr:MinnesotaSppTransmissionCostRecoveryTrackerMember2020-03-31 0001466593ottr:SouthDakotaPhaseinRatePlanRiderAccruedRefundMember2020-03-31 0001466593ottr:SouthDakotaPhaseinRatePlanRiderAccruedRefundMember2020-01-012020-03-31 0001466593ottr:DeferredLeaseExpensesMember2020-03-31 0001466593ottr:DeferredLeaseExpensesMember2020-01-012020-03-31 0001466593ottr:MinnesotaEnvironmentalCostRecoveryRiderAccruedRevenuesMember2020-03-31 0001466593ottr:MinnesotaEnvironmentalCostRecoveryRiderAccruedRevenuesMember2020-01-012020-03-31 0001466593ottr:DeferredIncomeTaxesMember2020-03-31 0001466593ottr:AccumulatedReserveForEstimatedRemovalCostsNetOfSalvageMember2020-03-31 0001466593ottr:RefundableFuelClauseAdjustmentRevenuesMember2020-03-31 0001466593ottr:RefundableFuelClauseAdjustmentRevenuesMember2020-01-012020-03-31 0001466593ottr:NorthDakotaTransmissionCostRecoveryRiderAccruedRefundMember2020-03-31 0001466593ottr:NorthDakotaTransmissionCostRecoveryRiderAccruedRefundMember2020-01-012020-03-31 0001466593ottr:PriorServiceCostsAndActuarialLossesOnPensionsAndOtherPostretirementBenefitsMember2020-03-31 0001466593ottr:PriorServiceCostsAndActuarialLossesOnPensionsAndOtherPostretirementBenefitsMember2020-01-012020-03-31 0001466593ottr:RevenueForRateCaseExpensesSubjectToRefundMinnesotaMember2020-03-31 0001466593ottr:NorthDakotaRenewableResourceRecoveryRiderAccruedRefundMember2020-03-31 0001466593ottr:NorthDakotaRenewableResourceRecoveryRiderAccruedRefundMember2020-01-012020-03-31 0001466593ottr:MinnesotaEnergyIntensiveTradeExposedRiderAccruedRefundMember2020-03-31 0001466593ottr:MinnesotaEnergyIntensiveTradeExposedRiderAccruedRefundMember2020-01-012020-03-31 0001466593ottr:SouthDakotaTransmissionCostRecoveryRiderAccruedRefundMember2020-03-31 0001466593ottr:SouthDakotaTransmissionCostRecoveryRiderAccruedRefundMember2020-01-012020-03-31 0001466593ottr:NorthDakotaGenerationCostRecoveryRiderAccruedRefundMember2020-03-31 0001466593ottr:NorthDakotaGenerationCostRecoveryRiderAccruedRefundMember2020-01-012020-03-31 0001466593ottr:OtherMember2020-03-31 0001466593ottr:OtherMember2020-01-012020-03-31 0001466593ottr:PriorServiceCostsAndActuarialLossesOnPensionsAndOtherPostretirementBenefitsMember2019-12-31 0001466593ottr:AccumulatedAssetRetirementObligationAROAccretiondepreciationAdjustmentMember2019-12-31 0001466593ottr:MinnesotaTransmissionCostRecoveryRiderAccruedRevenuesMember2019-12-31 0001466593ottr:MinnesotaTransmissionCostRecoveryRiderAccruedRevenuesMember2019-01-012019-12-31 0001466593ottr:ConservationImprovementProgramCostsAndIncentivesMember2019-12-31 0001466593ottr:ConservationImprovementProgramCostsAndIncentivesMember2019-01-012019-12-31 0001466593ottr:MISOSchedule2626ATransmissionCostRecoveryRiderTrueUpMember2019-12-31 0001466593ottr:MISOSchedule2626ATransmissionCostRecoveryRiderTrueUpMember2019-01-012019-12-31 0001466593ottr:NonserviceCostsComponentsOfPostretirementBenefitsCapitalizedForRatemakingPurposesAndSubjectToDeferredRecoveryMember2019-12-31 0001466593ottr:BigStoneIIUnrecoveredProjectCostsMinnesotaMember2019-12-31 0001466593ottr:BigStoneIIUnrecoveredProjectCostsMinnesotaMember2019-01-012019-12-31 0001466593ottr:DebtReacquisitionPremiumsMember2019-12-31 0001466593ottr:DebtReacquisitionPremiumsMember2019-01-012019-12-31 0001466593ottr:DeferredMarkedToMarketLossesMember2019-12-31 0001466593ottr:DeferredMarkedToMarketLossesMember2019-01-012019-12-31 0001466593ottr:BigStoneIIUnrecoveredProjectCostsSouthDakotaMember2019-12-31 0001466593ottr:BigStoneIIUnrecoveredProjectCostsSouthDakotaMember2019-01-012019-12-31 0001466593ottr:MinnesotaRenewableResourceRiderAccruedRevenuesMember2019-12-31 0001466593ottr:MinnesotaRenewableResourceRiderAccruedRevenuesMember2019-01-012019-12-31 0001466593ottr:SouthDakotaDeferredRateCaseExpensesSubjectToRecoveryMember2019-12-31 0001466593ottr:SouthDakotaDeferredRateCaseExpensesSubjectToRecoveryMember2019-01-012019-12-31 0001466593ottr:NorthDakotaDeferredRateCaseExpensesSubjectToRecoveryMember2019-12-31 0001466593ottr:NorthDakotaDeferredRateCaseExpensesSubjectToRecoveryMember2019-01-012019-12-31 0001466593ottr:MinnesotaSppTransmissionCostRecoveryTrackerMember2019-12-31 0001466593ottr:DeferredLeaseExpensesMember2019-12-31 0001466593ottr:DeferredLeaseExpensesMember2019-01-012019-12-31 0001466593ottr:MinnesotaEnvironmentalCostRecoveryRiderAccruedRevenuesMember2019-12-31 0001466593ottr:MinnesotaEnvironmentalCostRecoveryRiderAccruedRevenuesMember2019-01-012019-12-31 0001466593ottr:SouthDakotaTransmissionCostRecoveryRiderAccruedRevenuesMember2019-12-31 0001466593ottr:SouthDakotaTransmissionCostRecoveryRiderAccruedRevenuesMember2019-01-012019-12-31 0001466593ottr:DeferredIncomeTaxesMember2019-12-31 0001466593ottr:AccumulatedReserveForEstimatedRemovalCostsNetOfSalvageMember2019-12-31 0001466593ottr:RefundableFuelClauseAdjustmentRevenuesMember2019-12-31 0001466593ottr:RefundableFuelClauseAdjustmentRevenuesMember2019-01-012019-12-31 0001466593ottr:NorthDakotaTransmissionCostRecoveryRiderAccruedRefundMember2019-12-31 0001466593ottr:NorthDakotaTransmissionCostRecoveryRiderAccruedRefundMember2019-01-012019-12-31 0001466593ottr:PriorServiceCostsAndActuarialLossesOnPensionsAndOtherPostretirementBenefitsMember2019-12-31 0001466593ottr:PriorServiceCostsAndActuarialLossesOnPensionsAndOtherPostretirementBenefitsMember2019-01-012019-12-31 0001466593ottr:RevenueForRateCaseExpensesSubjectToRefundMinnesotaMember2019-12-31 0001466593ottr:NorthDakotaRenewableResourceRecoveryRiderAccruedRefundMember2019-12-31 0001466593ottr:NorthDakotaRenewableResourceRecoveryRiderAccruedRefundMember2019-01-012019-12-31 0001466593ottr:MinnesotaEnergyIntensiveTradeExposedRiderAccruedRefundMember2019-12-31 0001466593ottr:MinnesotaEnergyIntensiveTradeExposedRiderAccruedRefundMember2019-01-012019-12-31 0001466593ottr:NorthDakotaGenerationCostRecoveryRiderAccruedRefundMember2019-12-31 0001466593ottr:NorthDakotaGenerationCostRecoveryRiderAccruedRefundMember2019-01-012019-12-31 0001466593ottr:OtherMember2019-12-31 0001466593ottr:OtherMember2019-01-012019-12-31 0001466593ottr:SouthDakotaPhaseinRatePlanRiderAccruedRefundMember2019-12-31 0001466593ottr:SouthDakotaPhaseinRatePlanRiderAccruedRefundMember2019-01-012019-12-31 0001466593ottr:DistributionAgreementWithKeybancMember2019-11-08 0001466593ottr:AtTheMarketOfferingMember2020-01-012020-03-31 0001466593ottr:PerformanceAwards2016Member2020-01-012020-03-31 0001466593ottr:February32020Memberus-gaap:RestrictedStockUnitsRSUMemberottr:The2014StockIncentivePlanMembersrt:ManagementMember2020-01-012020-03-31 0001466593ottr:February122020Memberus-gaap:RestrictedStockUnitsRSUMemberottr:The2014StockIncentivePlanMembersrt:ExecutiveOfficerMember2020-01-012020-03-31 0001466593ottr:February122020Memberus-gaap:PerformanceSharesMemberottr:The2014StockIncentivePlanMember2020-01-012020-03-31 0001466593ottr:February122020Memberus-gaap:PerformanceSharesMemberottr:The2014StockIncentivePlanUnderLegacyAgreementMember2020-01-012020-03-31 0001466593ottr:StockPerformanceAwardsMemberottr:The2014StockIncentivePlanMembersrt:ExecutiveOfficerMember2020-03-31 0001466593ottr:StockPerformanceAwardsMemberottr:The2014StockIncentivePlanMembersrt:ExecutiveOfficerMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2020-03-31 utr:Y 0001466593ottr:StockPerformanceAwardsMemberottr:The2014StockIncentivePlanMembersrt:ExecutiveOfficerMember2020-01-012020-03-31 0001466593ottr:StockPerformanceAwardsMemberottr:The2014StockIncentivePlanMembersrt:ExecutiveOfficerMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2020-03-31 utr:D 0001466593ottr:StockPerformanceAwardsMemberottr:The2014StockIncentivePlanMembersrt:MinimumMembersrt:ExecutiveOfficerMember2020-01-012020-03-31 0001466593ottr:StockPerformanceAwardsMemberottr:The2014StockIncentivePlanMembersrt:MaximumMembersrt:ExecutiveOfficerMember2020-01-012020-03-31 0001466593ottr:StockPerformanceAwardsMembersrt:ExecutiveOfficerMember2020-01-012020-03-31 0001466593ottr:StockPerformanceAwardsMembersrt:ExecutiveOfficerMember2019-01-012019-03-31 0001466593us-gaap:RestrictedStockUnitsRSUMemberottr:ExecutiveOfficersAndKeyEmployeesMember2020-01-012020-03-31 0001466593us-gaap:RestrictedStockUnitsRSUMemberottr:ExecutiveOfficersAndKeyEmployeesMember2019-01-012019-03-31 0001466593us-gaap:RestrictedStockMembersrt:DirectorMember2020-01-012020-03-31 0001466593us-gaap:RestrictedStockMembersrt:DirectorMember2019-01-012019-03-31 0001466593us-gaap:RestrictedStockUnitsRSUMemberottr:NonExecutiveEmployeesMember2020-01-012020-03-31 0001466593us-gaap:RestrictedStockUnitsRSUMemberottr:NonExecutiveEmployeesMember2019-01-012019-03-31 0001466593ottr:EmployeeStockPurchasePlanMember2020-01-012020-03-31 0001466593ottr:EmployeeStockPurchasePlanMember2019-01-012019-03-31 0001466593ottr:OtterTailPowerCompanyMembersrt:MinimumMemberottr:MinnesotaPublicUtilitiesCommissionMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMembersrt:MaximumMemberottr:MinnesotaPublicUtilitiesCommissionMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMember2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:ConstructionProgramsMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:ConstructionProgramsMember2019-01-012019-12-31 0001466593ottr:TOPlasticsMemberottr:SupplyAgreementMember2019-10-012019-10-01 0001466593ottr:OtterTailPowerCompanyMemberottr:CoalPurchaseCommitments2Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:CoalPurchaseCommitments3Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:OTPLandEasementsMember2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMember2019-08-302019-08-30 0001466593ottr:OtterTailCorporationCreditAgreementMember2020-03-31 0001466593ottr:OtterTailCorporationCreditAgreementMember2019-12-31 0001466593ottr:OTPCreditAgreementMember2020-03-31 0001466593ottr:OTPCreditAgreementMember2019-12-31 0001466593ottr:The2019NotePurchaseAgreementMemberottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNoteMember2019-09-12 0001466593ottr:Series2019ASeniorUnsecuredNoteDueOctober102029Memberottr:OtterTailPowerCompanyMember2019-09-12 0001466593ottr:Series2019BSeniorUnsecuredNoteDueOctober102039Memberottr:OtterTailPowerCompanyMember2019-09-12 0001466593ottr:Series2019CSeniorUnsecuredNoteDueOctober102049Memberottr:OtterTailPowerCompanyMember2019-09-12 0001466593ottr:Series2020ASeniorUnsecuredNotesDueFebruary252030Memberottr:OtterTailPowerCompanyMember2019-09-12 0001466593ottr:Series2020BSeniorUnsecuredNotesDueAugust202030Memberottr:OtterTailPowerCompanyMember2019-09-12 0001466593ottr:Series2020CSeniorUnsecuredNotesDueFebruary252040Memberottr:OtterTailPowerCompanyMember2019-09-12 0001466593ottr:Series2020DSeniorUnsecuredNotesDueFebruary252050Memberottr:OtterTailPowerCompanyMember2019-09-12 0001466593ottr:The2019NotePurchaseAgreementMemberottr:OtterTailPowerCompanyMember2020-02-252020-02-25 0001466593ottr:The2019NotePurchaseAgreementMemberottr:OtterTailPowerCompanyMember2020-03-31 0001466593ottr:The2019NotePurchaseAgreementMemberottr:OtterTailPowerCompanyMember2020-01-012020-03-31 0001466593srt:ParentCompanyMember2020-03-31 0001466593srt:ParentCompanyMemberottr:The355GuaranteedSeniorNotesDueDecember152026Member2020-03-31 0001466593ottr:The355GuaranteedSeniorNotesDueDecember152026Member2020-03-31 0001466593srt:ParentCompanyMemberottr:The355GuaranteedSeniorNotesDueDecember152026Member2020-01-012020-03-31 0001466593ottr:The355GuaranteedSeniorNotesDueDecember152026Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes463Series2011aDueDecember12021Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes463Series2011aDueDecember12021Member2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes463Series2011aDueDecember12021Member2020-01-012020-03-31 0001466593ottr:SeniorUnsecuredNotes463Series2011aDueDecember12021Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes615Series2007bDueAugust202022Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes615Series2007bDueAugust202022Member2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes615Series2007bDueAugust202022Member2020-01-012020-03-31 0001466593ottr:SeniorUnsecuredNotes637SeriesCDueAugust202027Member2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes637SeriesCDueAugust202027Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes637SeriesCDueAugust202027Member2020-01-012020-03-31 0001466593ottr:SeniorUnsecuredNotes615Series2007bDueAugust202022Member2020-01-012020-03-31 0001466593ottr:SeniorUnsecuredNotes468Series2013aDueFebruary272029Member2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes468Series2013aDueFebruary272029Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes468Series2013aDueFebruary272029Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes637SeriesCDueAugust202027Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes468Series2013aDueFebruary272029Member2020-01-012020-03-31 0001466593ottr:SeniorUnsecuredNotes307Series2019aDueOctober102029Member2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes307Series2019aDueOctober102029Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes307Series2019aDueOctober102029Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes307Series2019aDueOctober102029Member2020-01-012020-03-31 0001466593ottr:SeniorUnsecuredNotes322Series2020aDueFebruary252030Member2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes322Series2020aDueFebruary252030Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes322Series2020aDueFebruary252030Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes322Series2020aDueFebruary252030Member2020-01-012020-03-31 0001466593ottr:SeniorUnsecuredNotes647Series2007dDueAugust202037Member2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes647Series2007dDueAugust202037Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes647Series2007dDueAugust202037Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes647Series2007dDueAugust202037Member2020-01-012020-03-31 0001466593ottr:SeniorUnsecuredNotes352Series2019bDueOctober102039Member2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes352Series2019bDueOctober102039Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes352Series2019bDueOctober102039Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes352Series2019bDueOctober102039Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes362Series2020cDueFebruary252040Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes362Series2020cDueFebruary252040Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes362Series2020cDueFebruary252040Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes362Series2020cDueFebruary252040Member2020-01-012020-03-31 0001466593ottr:SeniorUnsecuredNotes547Series2013bDueFebruary272044Member2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes547Series2013bDueFebruary272044Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes547Series2013bDueFebruary272044Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes547Series2013bDueFebruary272044Member2020-01-012020-03-31 0001466593ottr:SeniorUnsecuredNotes407Series2018ADueFebruary72048Member2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes407Series2018ADueFebruary72048Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes407Series2018ADueFebruary72048Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes407Series2018ADueFebruary72048Member2020-01-012020-03-31 0001466593ottr:SeniorUnsecuredNotes382Series2019cDueOctober102049Member2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes382Series2019cDueOctober102049Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes382Series2019cDueOctober102049Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes382Series2019cDueOctober102049Member2020-01-012020-03-31 0001466593ottr:SeniorUnsecuredNotes392Series2020dDueFebruary252050Member2020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes392Series2020dDueFebruary252050Member2020-03-31 0001466593ottr:SeniorUnsecuredNotes392Series2020dDueFebruary252050Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes392Series2020dDueFebruary252050Member2020-01-012020-03-31 0001466593ottr:PaceNote254DueMarch182021Member2020-03-31 0001466593srt:ParentCompanyMemberottr:PaceNote254DueMarch182021Member2020-03-31 0001466593ottr:PaceNote254DueMarch182021Member2020-01-012020-03-31 0001466593srt:ParentCompanyMemberottr:PaceNote254DueMarch182021Member2020-01-012020-03-31 0001466593ottr:OtterTailPowerCompanyMember2020-03-31 0001466593srt:ParentCompanyMember2019-12-31 0001466593ottr:The355GuaranteedSeniorNotesDueDecember152026Member2019-12-31 0001466593srt:ParentCompanyMemberottr:The355GuaranteedSeniorNotesDueDecember152026Member2019-12-31 0001466593ottr:The355GuaranteedSeniorNotesDueDecember152026Member2019-01-012019-12-31 0001466593srt:ParentCompanyMemberottr:The355GuaranteedSeniorNotesDueDecember152026Member2019-01-012019-12-31 0001466593ottr:SeniorUnsecuredNotes463Series2011aDueDecember12021Member2019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes463Series2011aDueDecember12021Member2019-12-31 0001466593ottr:SeniorUnsecuredNotes463Series2011aDueDecember12021Member2019-01-012019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes463Series2011aDueDecember12021Member2019-01-012019-12-31 0001466593ottr:SeniorUnsecuredNotes615Series2007bDueAugust202022Member2019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes615Series2007bDueAugust202022Member2019-12-31 0001466593ottr:SeniorUnsecuredNotes615Series2007bDueAugust202022Member2019-01-012019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes615Series2007bDueAugust202022Member2019-01-012019-12-31 0001466593ottr:SeniorUnsecuredNotes637SeriesCDueAugust202027Member2019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes637SeriesCDueAugust202027Member2019-12-31 0001466593ottr:SeniorUnsecuredNotes637SeriesCDueAugust202027Member2019-01-012019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes637SeriesCDueAugust202027Member2019-01-012019-12-31 0001466593ottr:SeniorUnsecuredNotes468Series2013aDueFebruary272029Member2019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes468Series2013aDueFebruary272029Member2019-12-31 0001466593ottr:SeniorUnsecuredNotes468Series2013aDueFebruary272029Member2019-01-012019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes468Series2013aDueFebruary272029Member2019-01-012019-12-31 0001466593ottr:SeniorUnsecuredNotes307Series2019aDueOctober102029Member2019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes307Series2019aDueOctober102029Member2019-12-31 0001466593ottr:SeniorUnsecuredNotes307Series2019aDueOctober102029Member2019-01-012019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes307Series2019aDueOctober102029Member2019-01-012019-12-31 0001466593ottr:SeniorUnsecuredNotes647Series2007dDueAugust202037Member2019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes647Series2007dDueAugust202037Member2019-12-31 0001466593ottr:SeniorUnsecuredNotes647Series2007dDueAugust202037Member2019-01-012019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes647Series2007dDueAugust202037Member2019-01-012019-12-31 0001466593ottr:SeniorUnsecuredNotes352Series2019bDueOctober102039Member2019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes352Series2019bDueOctober102039Member2019-12-31 0001466593ottr:SeniorUnsecuredNotes352Series2019bDueOctober102039Member2019-01-012019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes352Series2019bDueOctober102039Member2019-01-012019-12-31 0001466593ottr:SeniorUnsecuredNotes547Series2013bDueFebruary272044Member2019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes547Series2013bDueFebruary272044Member2019-12-31 0001466593ottr:SeniorUnsecuredNotes547Series2013bDueFebruary272044Member2019-01-012019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes547Series2013bDueFebruary272044Member2019-01-012019-12-31 0001466593ottr:SeniorUnsecuredNotes407Series2018ADueFebruary72048Member2019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes407Series2018ADueFebruary72048Member2019-12-31 0001466593ottr:SeniorUnsecuredNotes407Series2018ADueFebruary72048Member2019-01-012019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes407Series2018ADueFebruary72048Member2019-01-012019-12-31 0001466593ottr:SeniorUnsecuredNotes382Series2019cDueOctober102049Member2019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes382Series2019cDueOctober102049Member2019-12-31 0001466593ottr:SeniorUnsecuredNotes382Series2019cDueOctober102049Member2019-01-012019-12-31 0001466593ottr:OtterTailPowerCompanyMemberottr:SeniorUnsecuredNotes382Series2019cDueOctober102049Member2019-01-012019-12-31 0001466593ottr:PaceNote254DueMarch182021Member2019-12-31 0001466593srt:ParentCompanyMemberottr:PaceNote254DueMarch182021Member2019-12-31 0001466593ottr:PaceNote254DueMarch182021Member2019-01-012019-12-31 0001466593srt:ParentCompanyMemberottr:PaceNote254DueMarch182021Member2019-01-012019-12-31 0001466593ottr:OtterTailPowerCompanyMember2019-12-31 0001466593us-gaap:PensionPlansDefinedBenefitMember2020-01-012020-03-31 0001466593us-gaap:PensionPlansDefinedBenefitMember2019-01-012019-03-31 0001466593ottr:CostsIncludedInOTPCapitalExpendituresMemberus-gaap:PensionPlansDefinedBenefitMember2020-01-012020-03-31 0001466593ottr:CostsIncludedInOTPCapitalExpendituresMemberus-gaap:PensionPlansDefinedBenefitMember2019-01-012019-03-31 0001466593ottr:CostsIncludedInElectricOperationAndMaintenanceExpensesMemberus-gaap:PensionPlansDefinedBenefitMember2020-01-012020-03-31 0001466593ottr:CostsIncludedInElectricOperationAndMaintenanceExpensesMemberus-gaap:PensionPlansDefinedBenefitMember2019-01-012019-03-31 0001466593ottr:CostsIncludedInOtherNonelectricExpensesMemberus-gaap:PensionPlansDefinedBenefitMember2020-01-012020-03-31 0001466593ottr:CostsIncludedInOtherNonelectricExpensesMemberus-gaap:PensionPlansDefinedBenefitMember2019-01-012019-03-31 0001466593ottr:NonserviceCostsCapitalizedAsRegulatoryAssetsMemberus-gaap:PensionPlansDefinedBenefitMember2020-01-012020-03-31 0001466593ottr:NonserviceCostsCapitalizedAsRegulatoryAssetsMemberus-gaap:PensionPlansDefinedBenefitMember2019-01-012019-03-31 0001466593ottr:NonserviceCostsIncludedInNonserviceCostComponentsOfPostretirementBenefitsMemberus-gaap:PensionPlansDefinedBenefitMember2020-01-012020-03-31 0001466593ottr:NonserviceCostsIncludedInNonserviceCostComponentsOfPostretirementBenefitsMemberus-gaap:PensionPlansDefinedBenefitMember2019-01-012019-03-31 0001466593us-gaap:PensionPlansDefinedBenefitMember2020-01-012020-01-31 0001466593ottr:ExecutiveSurvivorAndSupplementalRetirementPlanMember2020-01-012020-03-31 0001466593ottr:ExecutiveSurvivorAndSupplementalRetirementPlanMember2019-01-012019-03-31 0001466593ottr:CostsIncludedInElectricOperationAndMaintenanceExpensesMemberottr:ExecutiveSurvivorAndSupplementalRetirementPlanMember2020-01-012020-03-31 0001466593ottr:CostsIncludedInElectricOperationAndMaintenanceExpensesMemberottr:ExecutiveSurvivorAndSupplementalRetirementPlanMember2019-01-012019-03-31 0001466593ottr:CostsIncludedInOtherNonelectricExpensesMemberottr:ExecutiveSurvivorAndSupplementalRetirementPlanMember2020-01-012020-03-31 0001466593ottr:CostsIncludedInOtherNonelectricExpensesMemberottr:ExecutiveSurvivorAndSupplementalRetirementPlanMember2019-01-012019-03-31 0001466593ottr:NonserviceCostsIncludedInNonserviceCostComponentsOfPostretirementBenefitsMemberottr:ExecutiveSurvivorAndSupplementalRetirementPlanMember2020-01-012020-03-31 0001466593ottr:NonserviceCostsIncludedInNonserviceCostComponentsOfPostretirementBenefitsMemberottr:ExecutiveSurvivorAndSupplementalRetirementPlanMember2019-01-012019-03-31 0001466593us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-01-012020-03-31 0001466593us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2019-01-012019-03-31 0001466593ottr:CostsIncludedInOTPCapitalExpendituresMemberus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-01-012020-03-31 0001466593ottr:CostsIncludedInOTPCapitalExpendituresMemberus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2019-01-012019-03-31 0001466593ottr:CostsIncludedInElectricOperationAndMaintenanceExpensesMemberus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-01-012020-03-31 0001466593ottr:CostsIncludedInElectricOperationAndMaintenanceExpensesMemberus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2019-01-012019-03-31 0001466593ottr:CostsIncludedInOtherNonelectricExpensesMemberus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-01-012020-03-31 0001466593ottr:CostsIncludedInOtherNonelectricExpensesMemberus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2019-01-012019-03-31 0001466593ottr:NonserviceCostsCapitalizedAsRegulatoryAssetsMemberus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-01-012020-03-31 0001466593ottr:NonserviceCostsCapitalizedAsRegulatoryAssetsMemberus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2019-01-012019-03-31 0001466593ottr:NonserviceCostsIncludedInNonserviceCostComponentsOfPostretirementBenefitsMemberus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-01-012020-03-31 0001466593ottr:NonserviceCostsIncludedInNonserviceCostComponentsOfPostretirementBenefitsMemberus-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2019-01-012019-03-31 0001466593ottr:OtterTailCorporationCreditAgreementMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-01-012020-03-31 0001466593ottr:OtterTailCorporationCreditAgreementMemberus-gaap:LondonInterbankOfferedRateLIBORMember2019-01-012019-12-31 0001466593us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-03-31 0001466593us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-03-31 0001466593us-gaap:CarryingReportedAmountFairValueDisclosureMember2019-12-31 0001466593us-gaap:EstimateOfFairValueFairValueDisclosureMember2019-12-31 0001466593us-gaap:DomesticCountryMemberus-gaap:SubsequentEventMember2020-05-012020-05-01 0001466593us-gaap:StateAndLocalJurisdictionMemberottr:NorthDakotaDepartmentOfRevenueMemberus-gaap:SubsequentEventMember2020-05-012020-05-01 0001466593us-gaap:StateAndLocalJurisdictionMemberottr:MinnesotaDepartmentOfRevenueMemberus-gaap:SubsequentEventMember2020-05-012020-05-01
 

 

Table of Contents

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended

March 31, 2020

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from

 

to

 

 

Commission file number

           0-53713

 

OTTER TAIL CORPORATION

(Exact name of registrant as specified in its charter)

 

              Minnesota

27-0383995

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

 

215 South Cascade Street, Box 496, Fergus Falls, Minnesota    

56538-0496

(Address of principal executive offices)

(Zip Code)

 

866-410-8780

(Registrant's telephone number, including area code)

 

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares, par value $5.00 per share

OTTR

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes  ☑     No  ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑       No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

     

Large accelerated filer Accelerated filer ☐  
     
Non-accelerated filer ☐  Smaller reporting company    Emerging growth company

 

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act  ☐

 

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).

Yes     No ☑

 

Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date:

 

April 30, 2020 40,416,779 Common Shares ($5 par value)

 

 

 

 

OTTER TAIL CORPORATION

 

INDEX

 

Part I. Financial Information

Page No.

   

Item 1.

Financial Statements

 
     
 

Consolidated Balance Sheets – March 31, 2020 and December 31, 2019 (not audited)

2 & 3

     
 

Consolidated Statements of Income – Three Months Ended March 31, 2020 and 2019 (not audited)

4

     
 

Consolidated Statements of Comprehensive Income – Three Months Ended March 31, 2020 and 2019 (not audited)

5

     
 

Consolidated Statements of Common Shareholders’ Equity – Three Months Ended March 31, 2020 and 2019 (not audited)

6

     
 

Consolidated Statements of Cash Flows – Three Months Ended March 31, 2020 and 2019 (not audited)

7

     
 

Condensed Notes to Consolidated Financial Statements (not audited)

8-33

     

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

34-49

     

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

49

     

Item 4.

Controls and Procedures

49

     

Part II. Other Information

 
     

Item 1.

Legal Proceedings

50

     

Item 1A.

Risk Factors

50

     

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

50

     

Item 6.

Exhibits

51

     

Signatures

51

 

 

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. financial statements

 

Otter Tail Corporation

Consolidated Balance Sheets

(not audited)

 

(in thousands)

 

March 31,

2020

   

December 31,

2019

 
                 

Assets

               
                 

Current Assets

               

Cash and Cash Equivalents

  $ 7,884     $ 21,199  

Accounts Receivable:

               

Trade—Net

    96,158       77,947  

Other

    7,228       8,773  

Inventories

    98,152       97,851  

Unbilled Receivables

    19,057       20,911  

Income Taxes Receivable

    -       1,487  

Regulatory Assets

    20,358       21,650  

Other

    7,347       5,042  

Total Current Assets

    256,184       254,860  
                 

Investments

    9,462       9,894  

Other Assets

    38,252       40,196  

Goodwill

    37,572       37,572  

Other IntangiblesNet

    10,993       11,290  

Regulatory Assets

    142,734       144,138  
                 

Right of Use Assets - Operating Leases

    21,433       21,851  
                 

Plant

               

Electric Plant in Service

    2,211,880       2,212,884  

Nonelectric Operations

    251,804       247,356  

Construction Work in Progress

    234,025       185,238  

Total Gross Plant

    2,697,709       2,645,478  

Less Accumulated Depreciation and Amortization

    908,337       891,684  

Net Plant

    1,789,372       1,753,794  
                 

Total Assets

  $ 2,306,002     $ 2,273,595  

 

See accompanying condensed notes to consolidated financial statements.

 

2

 

Otter Tail Corporation

Consolidated Balance Sheets

(not audited)

 

(in thousands, except share data)

 

March 31,

2020

   

December 31,

2019

 
                 

Liabilities and Equity

               
                 

Current Liabilities

               

Short-Term Debt

  $ 19,893     $ 6,000  

Current Maturities of Long-Term Debt

    306       183  

Accounts Payable

    99,501       120,775  

Accrued Salaries and Wages

    14,889       22,730  

Accrued Taxes

    18,234       17,525  

Regulatory Liabilities

    9,804       7,480  

Current Operating Lease Liabilities

    4,197       4,136  

Other Accrued Liabilities

    8,864       10,912  

Total Current Liabilities

    175,688       189,741  
                 

Pensions Benefit Liability

    87,214       98,970  

Other Postretirement Benefits Liability

    71,580       71,437  

Long-Term Operating Lease Liabilities

    17,755       18,193  

Other Noncurrent Liabilities

    30,912       30,833  
                 

Commitments and Contingencies (note 9)

           
                 

Deferred Credits

               

Deferred Income Taxes

    137,816       131,941  

Deferred Tax Credits

    18,297       18,626  

Regulatory Liabilities

    239,108       239,906  

Other

    3,295       2,885  

Total Deferred Credits

    398,516       393,358  
                 

Capitalization

               

Long-Term Debt—Net

    724,318       689,581  
                 

Cumulative Preferred Shares – Authorized 1,500,000 Shares Without Par Value; Outstanding – None

    -       -  
                 

Cumulative Preference Shares – Authorized 1,000,000 Shares Without Par Value; Outstanding – None

    -       -  
                 

Common Shares, Par Value $5 Per Share—Authorized, 50,000,000 Shares; Outstanding, 2020—40,376,448 Shares; 2019—40,157,591 Shares

    201,882       200,788  

Premium on Common Shares

    372,669       364,790  

Retained Earnings

    231,702       222,341  

Accumulated Other Comprehensive Loss

    (6,234 )     (6,437 )

Total Common Equity

    800,019       781,482  

Total Capitalization

    1,524,337       1,471,063  

Total Liabilities and Equity

  $ 2,306,002     $ 2,273,595  

 

See accompanying condensed notes to consolidated financial statements.

 

3

 

 

Otter Tail Corporation

Consolidated Statements of Income

(not audited)

 

   

Three Months Ended

March 31,

 

(in thousands, except share and per-share amounts)

 

2020

   

2019

 
                 

Operating Revenues

               

Electric:

               

Revenues from Contracts with Customers

  $ 119,957     $ 129,144  

Changes in Accrued Revenues under Alternative Revenue Programs

    (87 )     (1,049 )

Total Electric Revenues

    119,870       128,095  

Product Sales from Contracts with Customers

    114,877       117,877  

Total Operating Revenues

    234,747       245,972  
                 

Operating Expenses

               

Production Fuel – Electric

    13,735       18,920  

Purchased Power – Electric System Use

    18,830       21,952  

Electric Operation and Maintenance Expenses

    40,615       38,382  

Cost of Products Sold (depreciation included below)

    85,879       90,582  

Other Nonelectric Expenses

    11,900       13,477  

Depreciation and Amortization

    20,399       19,131  

Property Taxes – Electric

    4,100       3,959  

Total Operating Expenses

    195,458       206,403  
                 

Operating Income

    39,289       39,569  
                 

Interest Charges

    8,123       7,826  

Nonservice Cost Components of Postretirement Benefits

    871       1,035  

Other (Loss) Income

    (389 )     1,244  

Income Before Income Taxes

    29,906       31,952  

Income Tax Expense

    5,638       5,628  

Net Income

  $ 24,268     $ 26,324  
                 

Average Number of Common Shares Outstanding—Basic

    40,217,141       39,657,321  

Average Number of Common Shares Outstanding—Diluted

    40,444,336       39,903,165  
                 

Basic Earnings Per Common Share

  $ 0.60     $ 0.66  
                 

Diluted Earnings Per Common Share

  $ 0.60     $ 0.66  

 

See accompanying condensed notes to consolidated financial statements.

 

4

 

 

Otter Tail Corporation

Consolidated Statements of Comprehensive Income

(not audited)

 

   

Three Months Ended

March 31,

 

(in thousands)

 

2020

   

2019

 

Net Income

  $ 24,268     $ 26,324  

Other Comprehensive Income:

               

Unrealized Gains on Available-for-Sale Securities:

               

Reversal of Previously Recognized Losses on Available for Sale Securities Included in Other Income During Period

    2       -  

Unrealized Gains Arising During Period

    126       91  

Income Tax Expense

    (27 )     (19 )

Change in Unrealized Gains on Available-for-Sale Securities – net-of-tax

    101       72  

Pension and Postretirement Benefit Plans:

               

Amortization of Unrecognized Postretirement Benefit Losses and Costs (note 11)

    138       130  

Income Tax Expense

    (36 )     (34 )

Pension and Postretirement Benefit Plans – net-of-tax

    102       96  

Total Other Comprehensive Income

    203       168  

Total Comprehensive Income

  $ 24,471     $ 26,492  

 

See accompanying condensed notes to consolidated financial statements.

 

5

 

 

Otter Tail Corporation

Consolidated Statements of Common Shareholders’ Equity

For the Three-Month Periods Ended March 31, 2020 and 2019

(not audited)

 

(in thousands, except common shares outstanding)

 

Common

Shares

Outstanding

   

Par Value, Common

Shares

   

Premium

on

Common

Shares

   

Retained Earnings

   

Accumulated

Other

Comprehensive

Income/(Loss)

   

Total

Common

Equity

 

Balance, December 31, 2019

    40,157,591     $ 200,788     $ 364,790     $ 222,341     $ (6,437 )   $ 781,482  

Common Stock Issuances, Net of Expenses

    257,074       1,285       6,990                       8,275  

Common Stock Retirements

    (38,217 )     (191 )     (1,881 )                     (2,072 )

Net Income

                            24,268               24,268  

Other Comprehensive Income

                                    203       203  

Employee Stock Incentive Plan Expense

                    2,770                       2,770  

Common Dividends ($0.37 per share)

                            (14,907 )             (14,907 )

Balance, March 31, 2020

    40,376,448     $ 201,882     $ 372,669     $ 231,702     $ (6,234 )   $ 800,019  
                                                 

Balance, December 31, 2018

    39,664,884     $ 198,324     $ 344,250     $ 190,433     $ (4,144 )   $ 728,863  

Common Stock Issuances, Net of Expenses

    120,048       601       (601 )                     -  

Common Stock Retirements

    (55,224 )     (276 )     (2,454 )                     (2,730 )

Net Income

                            26,324               26,324  

Other Comprehensive Income

                                    168       168  

ASU 2018-02 2017 TCJA Stranded Tax Transfer

                            784       (784 )     -  

Employee Stock Incentive Plan Expense

                    1,796                       1,796  

Common Dividends ($0.35 per share)

                            (13,922 )             (13,922 )

Balance, March 31, 2019

    39,729,708     $ 198,649     $ 342,991     $ 203,619     $ (4,760 )   $ 740,499  

 

6

 

 

Otter Tail Corporation

Consolidated Statements of Cash Flows

(not audited)

 

   

Three Months Ended

March 31,

 

(in thousands)

 

2020

   

2019

 

Operating Activities

               

Net Income

  $ 24,268     $ 26,324  

Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:

               

Depreciation and Amortization

    20,399       19,131  

Deferred Tax Credits

    (329 )     (337 )

Deferred Income Taxes

    5,812       835  

Change in Deferred Debits and Other Assets

    5,087       1,464  

Discretionary Contribution to Pension Plan

    (11,200 )     (10,000 )

Change in Noncurrent Liabilities and Deferred Credits

    860       8,787  

Allowance for Equity/Other Funds Used During Construction

    (791 )     (330 )

Stock Compensation Expense

    2,770       1,796  

Other—Net

    46       375  

Cash (Used for) Provided by Current Assets and Current Liabilities:

               

Change in Receivables

    (16,666 )     (37,086 )

Change in Inventories

    (301 )     (462 )

Change in Other Current Assets

    (447 )     128  

Change in Payables and Other Current Liabilities

    (7,690 )     4,088  

Change in Interest and Income Taxes Receivable/Payable

    (41 )     2,437  

Net Cash Provided by Operating Activities

    21,777       17,150  

Investing Activities

               

Capital Expenditures

    (75,059 )     (24,687 )

Proceeds from Disposal of Noncurrent Assets

    2,487       509  

Cash Used for Investments and Other Assets

    (2,487 )     (1,258 )

Net Cash Used in Investing Activities

    (75,059 )     (25,436 )

Financing Activities

               

Change in Checks Written in Excess of Cash

    -       8  

Net Short-Term Borrowings

    13,893       25,002  

Proceeds from Issuance of Common Stock

    8,399       -  

Common Stock Issuance Expenses

    (124 )     -  

Payments for Shares Withheld for Employee Tax Obligations

    (2,072 )     (2,730 )

Proceeds from Issuance of Long-Term Debt

    35,000       -  

Short-Term and Long-Term Debt Issuance Expenses

    (177 )     -  

Payments for Retirement of Long-Term Debt

    (45 )     (42 )

Dividends Paid

    (14,907 )     (13,922 )

Net Cash Provided by Financing Activities

    39,967       8,316  

Net Change in Cash and Cash Equivalents

    (13,315 )     30  

Cash and Cash Equivalents at Beginning of Period

    21,199       861  

Cash and Cash Equivalents at End of Period

  $ 7,884     $ 891  

 

See accompanying condensed notes to consolidated financial statements.

 

7

 

OTTER TAIL CORPORATION

 

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(not audited)

 

In the opinion of management, Otter Tail Corporation (the Company) has included all adjustments (including normal recurring accruals) necessary for a fair presentation of the consolidated financial statements for the periods presented. The consolidated financial statements and condensed notes thereto should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Because of the coronavirus (COVID-19) outbreak, the seasonality of our businesses and other factors, the earnings for the three months ended March 31, 2020 should not be taken as an indication of earnings for all or any part of the balance of the year.

 

 

1. Summary of Significant Accounting Policies

 

Revenue Recognition

Due to the diverse business operations of the Company, recognition of revenue from contracts with customers depends on the product produced and sold or service performed. The Company recognizes revenue from contracts with customers at prices that are fixed or determinable as evidenced by an agreement with the customer, when the Company has met its performance obligation under the contract and it is probable that the Company will collect the amount to which it is entitled in exchange for the goods or services transferred or to be transferred to the customer. Depending on the product produced and sold or service performed and the terms of the agreement with the customer, the Company recognizes revenue either over time, in the case of delivery or transmission of electricity or related services or the production and storage of certain custom-made products, or at a point in time for the delivery of standardized products and other products made to the customer’s specifications where the terms of the contract require transfer of the completed product. Provisions for sales returns, early payment terms discounts, volume-based variable pricing incentives and warranty costs are recorded as reductions to revenue at the time revenue is recognized based on customer history, historical information and current trends.

 

In addition to recognizing revenue from contracts with customers under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606), the Company also records adjustments to Electric segment revenues for amounts subject to future collection under alternative revenue programs (ARPs) as defined in ASC Topic 980, Regulated Operations (ASC 980). The ARP revenue adjustments are recorded on the basis of recoverable costs incurred and returns earned under rate riders on a separate line on the face of the Company’s consolidated statements of income as they do not meet the criteria to be classified as revenue from contracts with customers.

 

Electric Segment Revenues—In the Electric segment, the Company recognizes revenue in two categories: (1) revenues from contracts with customers and (2) adjustments to revenues for amounts collectible under ARPs.

 

Most Electric segment revenues are earned from the generation, transmission and sale of electricity to retail customers at rates approved by regulatory commissions in the states where Otter Tail Power Company (OTP) provides service. OTP also earns revenue from the transmission of electricity for others over the transmission assets it owns separately, or jointly with other transmission service providers, under rate tariffs established by the independent transmission system operator and approved by the Federal Energy Regulatory Commission (FERC). A third source of revenue for OTP comes from the generation and sale of electricity to wholesale customers at contract or market rates. Revenues from all these sources meet the criteria to be classified as revenue from contracts with customers and are recognized over time as energy is delivered or transmitted. Revenue is recognized based on the metered quantity of electricity delivered or transmitted at the applicable rates. For electricity delivered and consumed after a meter is read but prior to the end of the reporting period, OTP records revenue and an unbilled receivable based on estimates of the kilowatt-hours (kwh) of energy delivered to the customer.

 

ARPs provide for adjustments to rates outside of a general rate case proceeding, usually as a surcharge applied to future billings typically through the use of rate riders subject to periodic adjustments, to encourage or incentivize investments in certain areas such as conservation, renewable energy, pollution reduction or control, improved infrastructure of the transmission grid or other programs that provide benefits to the general public under public policy, laws or regulations. ARP riders generally provide for the recovery of specified costs and investments and include an incentive component to provide the regulated utility with a return on amounts invested.

 

OTP has recovered costs and earned incentives or returns on investments subject to recovery under several ARP rate riders, including:

 

 

In Minnesota: Transmission Cost Recovery (TCR), Environmental Cost Recovery (ECR), Renewable Resource Adjustment (RRA), Energy Intensive Trade Exposed and Conservation Improvement Program riders.

 

In North Dakota: TCR, ECR, Renewable Resource Cost Recovery and Generation Cost Recovery (GCR) riders.

 

In South Dakota: TCR, ECR, Phase-in Rate Plan and Energy Efficiency Plan (conservation) riders.

 

 

OTP accrues ARP revenue on the basis of costs incurred, investments made and returns on those investments that qualify for recovery through established riders. Amounts billed under riders in effect at the time of the billing are included in revenues from contracts with customers net of amounts billed that are subject to refund through future rider adjustments. Amounts accrued and subject to recovery through future rider rate updates and adjustments are reported as changes in accrued revenues under ARPs on a separate line in the revenue section of the Company’s consolidated statement of income. See table in note 3 for total revenues billed and accrued under ARP riders for the three-month periods ended March 31, 2020 and 2019.

 

Manufacturing Segment Revenues—Companies in the Manufacturing segment, BTD Manufacturing, Inc. (BTD) and T.O. Plastics, Inc. (T.O. Plastics), earn revenue predominantly from the production and delivery of custom-made or standardized parts to customers across several industries. BTD also earns revenue from the production and sale of tools and dies to other manufacturers. For the production and delivery of standardized products and other products made to customer specifications where the terms of the contract require transfer of the completed product, the operating company has met its performance obligation and recognizes revenue at the point in time when the product is shipped. For revenue recognized on products when shipped, the operating companies have no further obligation to provide services related to such products. The shipping terms used in these instances are FOB shipping point.

 

Plastics Segment Revenues—Companies in our Plastics segment earn revenue predominantly from the sale and delivery of standardized polyvinyl chloride (PVC) pipe products produced at their manufacturing facilities. Revenue from the sale of these products is recognized at the point in time when the product is shipped based on prices agreed to in a purchase order. For revenue recognized on shipped products, there is no further obligation to provide services related to such products. The shipping terms used in these instances are FOB shipping point. The Plastics segment has one customer for which it produces and stores a product made to the customer’s specifications and design under a build and hold agreement. For sales to this customer, the operating company recognizes revenue as the custom-made product is produced, adjusting the amount of revenue for volume rebate variable pricing considerations the operating company expects the customer will earn and applicable early payment discounts the company expects the customer will take. Ownership of the pipe transfers to the customer prior to delivery and the operating company is paid a negotiated fee for storage of the pipe. Revenue for storage of the pipe is also recognized over time as the pipe is stored.

 

See operating revenue table in note 2 for a disaggregation of the Company’s revenues by business segment for the three-month periods ended March 31, 2020 and 2019.

 

Agreements Subject to Legally Enforceable Netting Arrangements

OTP has certain derivative contracts that are designated as normal purchases. Individual counterparty exposures for these contracts can be offset according to legally enforceable netting arrangements. The Company does not offset assets and liabilities under legally enforceable netting arrangements on the face of its consolidated balance sheet. 

 

Fair Value Measurements

The Company follows ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820), for recurring fair value measurements. ASC 820 provides a single definition of fair value, requires enhanced disclosures about assets and liabilities measured at fair value and establishes a hierarchical framework for disclosing the observability of the inputs utilized in measuring assets and liabilities at fair value. The three levels defined by the hierarchy and examples of each level are as follows:

 

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed by the New York Stock Exchange and commodity derivative contracts listed on the New York Mercantile Exchange.

 

Level 2 – Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and liabilities included in Level 2 are typically either comparable to actively traded securities or contracts, such as treasury securities with pricing interpolated from recent trades of similar securities, or priced with models using highly observable inputs, such as commodity options priced using observable forward prices and volatilities.

 

Level 3 – Significant inputs to pricing have little or no observability as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation and may include complex and subjective models and forecasts.

 

 

The following tables present, for each of the hierarchy levels, the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019:

 

March 31, 2020 (in thousands)

 

Level 1

   

Level 2

   

Level 3

 

Assets:

                       

Investments:

                       

Equity Funds – Held by Captive Insurance Company

  $ 1,130                  

Corporate Debt Securities – Held by Captive Insurance Company

          $ 2,842          

Government-Backed and Government-Sponsored Enterprises’ Debt Securities – Held by Captive Insurance Company

            5,379          

Other Assets:

                       

Money Market and Mutual Funds –Retirement Plans

    2,526                  

Total Assets

  $ 3,656     $ 8,221          

 

December 31, 2019 (in thousands)

 

Level 1

   

Level 2

   

Level 3

 

Assets:

                       

Investments:

                       

Equity Funds – Held by Captive Insurance Company

  $ 1,586                  

Corporate Debt Securities – Held by Captive Insurance Company

          $ 2,124          

Government-Backed and Government-Sponsored Enterprises’ Debt Securities – Held by Captive Insurance Company

            6,060          

Other Assets:

                       

Money Market and Mutual Funds –Retirement Plans

    2,363                  

Total Assets

  $ 3,949     $ 8,184          

 

The level 2 fair values for Government-Backed and Government-Sponsored Enterprises’ and Corporate Debt Securities Held by the Company’s Captive Insurance Company are determined on the basis of valuations provided by a third-party pricing service which utilizes industry accepted valuation models and observable market inputs to determine valuation. Some valuations or model inputs used by the pricing service may be based on broker quotes.

 

Coyote Station Lignite Supply Agreement – Variable Interest Entity

In October 2012 the Coyote Station owners, including OTP, entered into a lignite sales agreement (LSA) with Coyote Creek Mining Company, L.L.C. (CCMC), a subsidiary of The North American Coal Corporation, for the purchase of lignite coal to meet the coal supply requirements of Coyote Station for the period beginning in May 2016 and ending in December 2040. The price per ton paid by the Coyote Station owners under the LSA reflects the cost of production, along with an agreed profit and capital charge. CCMC was formed for the purpose of mining coal to meet the coal fuel supply requirements of Coyote Station from May 2016 through December 2040 and, based on the terms of the LSA, is considered a variable interest entity (VIE) due to the transfer of all operating and economic risk to the Coyote Station owners, as the agreement is structured so that the price of the coal would cover all costs of operations as well as future reclamation costs. The Coyote Station owners are required to buy certain assets of CCMC at book value should they terminate the contract prior to the end of the contract term and are providing a guarantee of the value of the equity of CCMC because the Coyote Station owners are required to buy the membership interests of CCMC at the end of the contract term at equity value. Under current accounting standards, the primary beneficiary of a VIE is required to include the assets, liabilities, results of operations and cash flows of the VIE in its consolidated financial statements. No single owner of Coyote Station owns a majority interest in Coyote Station and none, individually, has the power to direct the activities that most significantly impact CCMC. Therefore, none of the owners individually, including OTP, is considered a primary beneficiary of the VIE and the Company is not required to include CCMC in its consolidated financial statements.

 

If the LSA terminates prior to the expiration of its term or the production period terminates prior to December 31, 2040 and the Coyote Station owners purchase all of the outstanding membership interests of CCMC, the owners will satisfy (or if permitted by CCMC’s applicable lender assume) all of CCMC’s obligations owed to CCMC’s lenders under its loans and leases. The Coyote Station owners have limited rights to assign their rights and obligations under the LSA without the consent of CCMC’s lenders during any period in which CCMC’s obligations to its lenders remain outstanding. In the event the contract is terminated prior to the end of the term due to certain events, OTP’s maximum exposure to additional costs, as a result of its involvement with CCMC, and potential impairment loss if recovery of those costs is denied by regulatory authorities, could be as high as $49.6 million, OTP’s 35% share of CCMC’s unrecovered costs as of March 31, 2020.

 

 

Inventories

Inventories, valued at the lower of cost or net realizable value, consist of the following:

 

   

March 31,

   

December 31,

 

(in thousands)

 

2020

   

2019

 

Finished Goods

  $ 29,996     $ 31,863  

Work in Process

    15,811       16,508  

Raw Material, Fuel and Supplies

    52,345       49,480  

Total Inventories

  $ 98,152     $ 97,851  

 

Intangible Assets

Intangible assets with finite lives are amortized over their estimated useful lives and reviewed for impairment in accordance with requirements under ASC Topic 360-10-35, Property, Plant, and Equipment—Overall—Subsequent Measurement.

 

The following table summarizes the components of the Company’s intangible assets at March 31, 2020 and December 31, 2019:

 

March 31, 2020 (in thousands)

 

Gross Carrying

Amount

   

Accumulated

Amortization

   

Net Carrying

Amount

   

Remaining

Amortization

Periods (months)

 

Amortizable Intangible Assets:

                                 

Customer Relationships

  $ 22,491     $ 11,543     $ 10,948     85 - 185  

Other

    179       134       45     5 - 42  

Total

  $ 22,670     $ 11,677     $ 10,993            

 

December 31, 2019 (in thousands)

 

Gross Carrying

Amount

   

Accumulated

Amortization

   

Net Carrying

Amount

   

Remaining

Amortization

Periods (months)

 

Amortizable Intangible Assets:

                                 

Customer Relationships

  $ 22,491     $ 11,259     $ 11,232     88 - 188  

Other

    179       121       58     8 - 45  

Total

  $ 22,670     $ 11,380     $ 11,290            

 

The amortization expense for these intangible assets was:

 

   

Three Months Ended

 
   

March 31,

 

(in thousands)

 

2020

   

2019

 

Amortization Expense – Intangible Assets

  $ 296     $ 296  

 

The estimated annual amortization expense for these intangible assets for the next five years is:

 

(in thousands)

 

2020

   

2021

   

2022

   

2023

   

2024

 

Estimated Amortization Expense – Intangible Assets

  $ 1,140     $ 1,105     $ 1,105     $ 1,104     $ 1,099  

 

 

Supplemental Disclosures of Cash Flow Information

 

   

As of March 31,

 

(in thousands)

 

2020

   

2019

 

Noncash Investing Activities:

               

Transactions Related to Capital Additions not Settled in Cash

  $ 16,193     $ 4,338  

 

New Accounting Standards Adopted

 

ASU 2016-13—In June 2016 the FASB issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments—Credit Losses (Topic 326) (ASC 326), which changes how entities account for credit losses on receivables and certain other assets effective for interim and annual periods beginning on or after December 31, 2019. The guidance requires use of a current expected credit loss model, which may result in earlier recognition of credit losses than under previous accounting standards. The Company adopted ASC 326 in the first quarter of 2020. Adoption of the new standard did not have a material impact on the Company’s consolidated financial statements and the Company did not record a cumulative effect adjustment to retained earnings on adoption.

 

Accounting Policy

Trade account and unbilled receivables reflected in the Company’s consolidated balance sheets represent the net amounts expected to be collected. An allowance for credit losses is established based on expected losses. Expected losses are estimated by reviewing individual accounts, considering aging, financial condition of the debtor for certain accounts, recent payment history, current and forecasted economic conditions and other relevant factors.

 

Allowance for Credit Losses

Following is a summary of activity in allowances for credit losses on trade and unbilled accounts receivable across the Company:

 

   

Three Months Ended

 
   

March 31,

 

(in thousands)

 

2020

   

2019

 

Beginning Balance

  $ 1,339     $ 1,407  

Additions Charged to Expense (net of recoveries)

    635       247  

Reductions for Amounts Written Off

    (293 )     (121 )

Ending Balance

  $ 1,681     $ 1,533  

 

ASU 2018-15—In August 2018 the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), which amends ASC 350-40, Internal-Use Software, to address a customer's accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The amendments in ASU 2018-15 align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, the amendments in ASU 2018-15 require an entity (customer) in a hosting arrangement that is a service contract to follow the guidance in ASC 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The amendments in ASU 2018-15 also require the entity to present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The entity is also required to present the capitalized implementation costs in the statement of financial position in the same line item that a prepayment for the fees of the associated hosting arrangement would be presented. The amendments in ASU 2018-15 were effective for interim and annual periods beginning on or after December 15, 2019 with early adoption permitted in any interim period. The Company adopted the amendments in ASU 2018-15 in the first quarter of 2020. There was no impact to its consolidated financial statements on adoption, but the Company will begin capitalizing implementation costs incurred in cloud computing arrangements post-adoption.

 

 

 

2. Segment Information

 

The accounting policies of the segments are described under note 1 – Summary of Significant Accounting Policies. The Company's businesses have been classified into three segments to be consistent with its business strategy and the reporting and review process used by the Company’s chief operating decision maker. These businesses sell products and provide services to customers primarily in the United States. The Company’s business structure currently includes the following three segments: Electric, Manufacturing and Plastics. The chart below indicates the companies included in each segment.

 

 

Electric includes the production, transmission, distribution and sale of electric energy in Minnesota, North Dakota and South Dakota by OTP. In addition, OTP is a participant in the Midcontinent Independent System Operator, Inc. (MISO) markets. OTP’s operations have been the Company’s primary business since 1907.

 

Manufacturing consists of businesses in the following manufacturing activities: contract machining, metal parts stamping, fabrication and painting, and production of plastic thermoformed horticultural containers, life science and industrial packaging, and material handling components. These businesses have manufacturing facilities in Georgia, Illinois and Minnesota and sell products primarily in the United States.

 

Plastics consists of businesses producing PVC pipe at plants in North Dakota and Arizona. The PVC pipe is sold primarily in the upper Midwest and Southwest regions of the United States.

 

OTP is a wholly owned subsidiary of the Company. All of the Company’s other businesses are owned by its wholly owned subsidiary, Varistar Corporation. The Company’s Corporate operating costs include items such as corporate staff and overhead costs, the results of the Company’s captive insurance company and other items excluded from the measurement of operating segment performance. Corporate assets consist primarily of cash, prepaid expenses, investments and fixed assets. Corporate is not an operating segment. Rather, it is added to operating segment totals to reconcile to totals on the Company’s consolidated financial statements.

 

While no single customer accounted for over 10% of consolidated revenue in 2019, certain customers provided a significant portion of each business segment’s 2019 revenue. The Electric segment has one customer that provided 11.9% of 2019 segment revenues. The Manufacturing segment has one customer that manufactures and sells recreational vehicles that provided 23.8% of 2019 segment revenues and one customer that manufactures and sells lawn and garden equipment that provided 11.1% of 2019 segment revenues. The Manufacturing segment’s top five revenue-generating customers provided over 54% of 2019 segment revenues. The Plastics segment has two customers that individually provided 25.3% and 20.4% of 2019 segment revenues. The loss of any one of these customers would have a significant negative impact on the financial position and results of operations of the respective business segment and the Company.

 

All of the Company’s long-lived assets are within the United States and 99.1% and 99.0% of its operating revenues for the respective three-month periods ended March 31, 2020 and 2019 came from sales within the United States.

 

 

The Company evaluates the performance of its business segments and allocates resources to them based on earnings contribution and return on total invested capital. Information for the business segments for the three months ended March 31, 2020 and 2019 and total assets by business segment as of March 31, 2020 and December 31, 2019 are presented in the following tables:

 

Operating Revenue

 

   

Three Months Ended

 
   

March 31,

 

(in thousands)

 

2020

   

2019

 

Electric Segment:

               

Retail Sales Revenue from Contracts with Customers

  $ 106,690     $ 114,955  

Changes in Accrued ARP Revenues

    (87 )     (1,049 )

Total Retail Sales Revenue

    106,603       113,906  

Transmission Services Revenue

    10,841       10,862  

Wholesale Revenues – Company Generation

    876       1,527  

Other Revenues

    1,556       1,814  

Total Electric Segment Revenues

    119,876       128,109  

Manufacturing Segment:

               

Metal Parts and Tooling

    57,211       66,724  

Plastic Products and Tooling

    9,883       9,045  

Other

    1,385       2,053  

Total Manufacturing Segment Revenues

    68,479       77,822  

Plastics Segment – Sale of PVC Pipe Products

    46,397       40,058  

Intersegment Eliminations

    (5 )     (17 )

Total

  $ 234,747     $ 245,972  

 

Interest Charges

 

   

Three Months Ended

 
   

March 31,

 

(in thousands)

 

2020

   

2019

 

Electric

  $ 7,384     $ 6,641  

Manufacturing

    554       584  

Plastics

    148       149  

Corporate and Intersegment Eliminations

    37       452  

Total

  $ 8,123     $ 7,826  

 

Income Taxes

 

   

Three Months Ended

 
   

March 31,

 

(in thousands)

 

2020

   

2019

 

Electric

  $ 3,620     $ 4,771  

Manufacturing

    1,461       1,454  

Plastics

    1,917       1,329  

Corporate

    (1,360 )     (1,926 )

Total

  $ 5,638     $ 5,628  

 

Net Income (Loss)

 

   

Three Months Ended

 
   

March 31,

 

(in thousands)

 

2020

   

2019

 

Electric

  $ 16,182     $ 18,700  

Manufacturing

    4,927       4,842  

Plastics

    5,449       3,729  

Corporate

    (2,290 )     (947 )

Total

  $ 24,268     $ 26,324  

 

 

Identifiable Assets

 

   

March 31,

   

December 31,

 

(in thousands)

 

2020

   

2019

 

Electric

  $ 1,955,465     $ 1,931,525  

Manufacturing

    201,892       195,742  

Plastics

    102,654       92,049  

Corporate

    45,991       54,279  

Total

  $ 2,306,002     $ 2,273,595