Otter Tail Corp Files 2023 Annual Report on Form 10-K

TL;DR

<b>Otter Tail Corporation has submitted its 2023 annual report detailing its financial performance and operations.</b>

AI Summary

Otter Tail Corp (OTTR) filed a Annual Report (10-K) with the SEC on February 14, 2024. Otter Tail Corporation filed its annual report for the fiscal year ended December 31, 2023. The filing covers the period from January 1, 2023, to December 31, 2023. The company's principal business is Electric Services, SIC code 4911. Otter Tail Corp is incorporated in Minnesota (MN). The filing was submitted on February 14, 2024.

Why It Matters

For investors and stakeholders tracking Otter Tail Corp, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Otter Tail's financial health and strategic direction for investors and stakeholders. Understanding the details within this report is crucial for assessing the company's performance in the electric services sector and its future outlook.

Risk Assessment

Risk Level: low — Otter Tail Corp shows low risk based on this filing. The filing is a standard annual report (10-K) and does not contain immediate, significant negative news, indicating a routine disclosure.

Analyst Insight

Review the detailed financial statements and risk factors within the 10-K to understand Otter Tail Corp's performance and potential challenges in the electric services sector.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-02-14 — Filing Date (Date of submission)
• 4911 — SIC Code (Electric Services)

Key Players & Entities

• Otter Tail Corp (company) — Filer name
• Otter Tail Holding Co (company) — Former company name
• MN (location) — State of incorporation
• 2023-12-31 (date) — Fiscal year end
• 2024-02-14 (date) — Filing date

FAQ

Industry Context

Otter Tail Corporation operates within the electric services industry, providing essential utility services.

Regulatory Implications

The company is subject to regulations typical for electric utility providers in its operating regions.

What Investors Should Do

1. Analyze Otter Tail Corp's revenue streams and operational costs for the fiscal year 2023.
2. Review any disclosed risk factors related to the electric utility sector and regulatory environment.
3. Examine the company's balance sheet and cash flow statements for financial health indicators.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K filing.
• 2024-02-14: Filing Date — Date Otter Tail Corp submitted its 10-K filing.

Year-Over-Year Comparison

This is the initial 10-K filing for the fiscal year 2023, following previous filings for prior periods.

Key Financial Figures

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• $230 million — lities at a total cost of approximately $230 million. Once complete, we expect the increased

Filing Documents

• ottr-20231231.htm (10-K) — 3003KB
• a2023ex1015nonqualifiedret.htm (EX-10.15) — 268KB
• a2023ex1020summaryofnonxem.htm (EX-10.20) — 8KB
• a2023ex1025changeinctrlsev.htm (EX-10.25) — 49KB
• a2023ex1026changeinctrlsev.htm (EX-10.26) — 48KB
• a2023ex1028ottertailcorpor.htm (EX-10.28) — 51KB
• a2023ex10312023performance.htm (EX-10.31) — 51KB
• a2023ex10322023restricteds.htm (EX-10.32) — 35KB
• a2023ex1033consultingagree.htm (EX-10.33) — 36KB
• a2023ex21subsidiariesofreg.htm (EX-21) — 6KB
• a2023ex23consentofindepend.htm (EX-23) — 2KB
• a2023ex24powerofattorney.htm (EX-24) — 12KB
• a202310-kex311.htm (EX-31.1) — 9KB
• a202310-kex312.htm (EX-31.2) — 9KB
• a202310-kex321.htm (EX-32.1) — 4KB
• a202310-kex322.htm (EX-32.2) — 4KB
• a2023ex97incentivecompensa.htm (EX-97) — 39KB
• image_0.jpg (GRAPHIC) — 0KB
• image_1.jpg (GRAPHIC) — 5KB
• ottr-20231231_g1.jpg (GRAPHIC) — 39KB
• ottr-20231231_g2.jpg (GRAPHIC) — 30KB
• ottr-20231231_g3.jpg (GRAPHIC) — 34KB
• ottr-20231231_g4.jpg (GRAPHIC) — 28KB
• ottr-20231231_g5.jpg (GRAPHIC) — 29KB
• ottr-20231231_g6.jpg (GRAPHIC) — 29KB
• ottr-20231231_g7.jpg (GRAPHIC) — 30KB
• ottr-20231231_g8.jpg (GRAPHIC) — 58KB
• ottr-20231231_g9.jpg (GRAPHIC) — 54KB
• 0001466593-24-000039.txt (&nbsp;) — 17561KB
• ottr-20231231.xsd (EX-101.SCH) — 103KB
• ottr-20231231_cal.xml (EX-101.CAL) — 137KB
• ottr-20231231_def.xml (EX-101.DEF) — 501KB
• ottr-20231231_lab.xml (EX-101.LAB) — 1156KB
• ottr-20231231_pre.xml (EX-101.PRE) — 788KB
• ottr-20231231_htm.xml (XML) — 3191KB

Risk Factors

ITEM 1A. Risk Factors 16

Unresolved Staff Comments

ITEM 1B. Unresolved Staff Comments 23

Cybersecurity

ITEM 1C. Cybersecurity 23

Properties

ITEM 2. Properties 24

Legal Proceedings

ITEM 3. Legal Proceedings 25

Information About Our Executive Officers (as of February 14, 2024)

ITEM 3A. Information About Our Executive Officers (as of February 14, 2024) 25

Mine Safety Disclosures

ITEM 4. Mine Safety Disclosures 26 PART II

Market for Registrant's Common Equity, Related Stockholder Matters And Issuer Purchases of Equity Securities

ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters And Issuer Purchases of Equity Securities 27

[Reserved]

ITEM 6. [Reserved] 27

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

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 27

Quantitative and Qualitative Disclosures About Market Risk

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 39

Financial Statements

ITEM 8. Financial Statements: Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 40 Consolidated Balance Sheets 42 Consolidated Statements of Income 43 Consolidated Statements of Comprehensive Income 44 Consolidated Statements of Shareholders' Equity 45 Consolidated Statements of Cash Flows 46

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 47

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 73

Controls and Procedures

ITEM 9A. Controls and Procedures 73

Other Information

ITEM 9B. Other Information 73

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

ITEM 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 73 PART III

Directors, Executive Officers and Corporate Governance

ITEM 10. Directors, Executive Officers and Corporate Governance 74

Executive Compensation

ITEM 11. Executive Compensation 74

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 74

Certain Relationships and Related Transactions, and Director Independence

ITEM 13. Certain Relationships and Related Transactions, and Director Independence 74

Principal Accountant Fees and Services

ITEM 14. Principal Accountant Fees and Services 74 PART IV

Exhibits and Financial Statement Schedules

ITEM 15. Exhibits and Financial Statement Schedules 75

Form 10-K Summary

ITEM 16. Form 10-K Summary 83

Signatures

Signatures 84 1 T able of Contents DEFINITIONS The following abbreviations or acronyms are used in the text. AFUDC Allowance for Funds Used During Construction kwh kilowatt-hour AME Available Maximum Energy LSA Lignite Sales Agreement ARO Asset Retirement Obligation MDT Metering and Distribution Technology ARP Alternative Revenue Program MISO Midcontinent Independent System Operator ASC Accounting Standards Codification MW Megawatt BTD BTD Manufacturing, Inc. MPUC Minnesota Public Utilities Commission CCMC Coyote Creek Mining Company, L.L.C. NAV Net Asset Value CCS Carbon Capture and Sequestration NDDEQ North Dakota Department of Environmental Quality CDD Cooling Degree Day NDPSC North Dakota Public Service Commission CIS Critical Security Controls NERC North American Electric Reliability Corporation CO 2 Carbon dioxide Northern Pipe Northern Pipe Products, Inc. COSO Committee of Sponsoring Organizations of the Treadway Commission OTC Otter Tail Corporation ECO Energy Conservation and Optimization Rider OTP Otter Tail Power Company EEI Edison Electric Institute Paris Agreement United Nations Framework Convention on Climate Change EEP Energy Efficiency Plan PFAS Polyfluoroalkyl substances EGU Electric Generating Unit PIR Phase-in Rider EPA Environmental Protection Agency PSLRA Private Securities Litigation Reform Act of 1995 ERISA Employee Retirement Income Security Act of 1974 PTCs Production tax credits ESSRP Executive Survivor and Supplemental Retirement Plan PVC Polyvinyl chloride EUIC Electric Utility Infrastructure Costs Rider RHR Regional Haze Rule FASB Financial Accounting Standards Board ROE Return on equity FCA Fuel Clause Adjustment REC Renewable Energy Certificate FERC Federal Energy Regulatory Commission RRR Renewable Resource Rider FOB Free on Board SDPUC South Dakota Public Utilities Commission GCR Generation Cost Recovery Rider SEC Securities and Exchange Commission GHG Greenhouse Gas SIP State impleme

BUSINESS

ITEM 1. BUSINESS Otter Tail Corporation (OTC) has interests in diversified operations that include an electric utility and manufacturing and plastic pipe businesses with corporate offices located in Fergus Falls, Minnesota and Fargo, North Dakota. We classify our five operating companies into three reportable segments consistent with our business strategy and management structure. The following table depicts our three segments and the subsidiary entities included within each segment: ELECTRIC SEGMENT MANUFACTURING SEGMENT PLASTICS SEGMENT Otter Tail Power Company (OTP) BTD Manufacturing, Inc. (BTD) Northern Pipe Products, Inc. (Northern Pipe) T.O. Plastics, Inc. (T.O. Plastics) Vinyltech Corporation (Vinyltech) Electric includes the generation, purchase, transmission, distribution and sale of electric energy in western Minnesota, eastern North Dakota and northeastern South Dakota. Otter Tail Power (OTP), our largest operating subsidiary and primary business since 1907, serves more than 133,000 customers in more than 400 communities across a predominantly rural and agricultural service territory. Manufacturing consists of businesses engaged 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, material handling components and extruded raw material stock. These businesses have manufacturing facilities in Georgia, Illinois and Minnesota and sell products primarily in the United States. Plastics consists of businesses producing polyvinyl chloride (PVC) pipe at plants in North Dakota and Arizona. The PVC pipe is sold primarily in the western half of the United States and Canada. Throughout the remainder of this report, we use the terms "Company", "us", "our", or "we" to refer to OTC and its subsidiaries collectively. We will also refer to our Electric, Manufacturing and Plastics segments and our indiv