x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended
|
September 30, 2012
|
o
|
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)
|
Large accelerated filer x | Accelerated filer o |
Non-accelerated filer o | Smaller reporting company o |
Page No.
|
||
2 & 3
|
||
4
|
||
5
|
||
6
|
||
7-32
|
||
33-52
|
||
52-54
|
||
54
|
||
55
|
||
55
|
||
56
|
||
56
|
Otter Tail Corporation
|
||
(not audited)
|
(in thousands)
|
September 30,
2012
|
December 31,
2011
|
||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and Cash Equivalents
|
$ | -- | $ | 14,652 | ||||
Accounts Receivable:
|
||||||||
Trade—Net
|
133,674 | 116,522 | ||||||
Other
|
5,488 | 18,807 | ||||||
Inventories
|
73,430 | 77,983 | ||||||
Deferred Income Taxes
|
12,325 | 12,307 | ||||||
Accrued Utility Revenues
|
11,029 | 13,719 | ||||||
Costs and Estimated Earnings in Excess of Billings
|
23,900 | 67,109 | ||||||
Regulatory Assets
|
21,084 | 27,391 | ||||||
Other
|
17,766 | 21,414 | ||||||
Assets of Discontinued Operations
|
730 | 29,692 | ||||||
Total Current Assets
|
299,426 | 399,596 | ||||||
Investments
|
9,920 | 11,093 | ||||||
Other Assets
|
26,628 | 26,997 | ||||||
Goodwill
|
39,119 | 39,406 | ||||||
Other Intangibles—Net
|
14,549 | 15,286 | ||||||
Deferred Debits
|
||||||||
Unamortized Debt Expense
|
4,866 | 6,458 | ||||||
Regulatory Assets
|
117,537 | 124,137 | ||||||
Total Deferred Debits
|
122,403 | 130,595 | ||||||
Plant
|
||||||||
Electric Plant in Service
|
1,409,729 | 1,372,534 | ||||||
Nonelectric Operations
|
219,537 | 310,320 | ||||||
Construction Work in Progress
|
71,017 | 54,439 | ||||||
Total Gross Plant
|
1,700,283 | 1,737,293 | ||||||
Less Accumulated Depreciation and Amortization
|
642,402 | 659,744 | ||||||
Net Plant
|
1,057,881 | 1,077,549 | ||||||
Total Assets
|
$ | 1,569,926 | $ | 1,700,522 | ||||
See accompanying notes to consolidated financial statements.
|
Otter Tail Corporation
|
||
Consolidated Balance Sheets
|
||
(not audited)
|
(in thousands, except share data)
|
September 30,
2012
|
December 31,
2011
|
||||||
LIABILITIES AND EQUITY
|
||||||||
Current Liabilities
|
||||||||
Short-Term Debt
|
$ | 12,417 | $ | -- | ||||
Current Maturities of Long-Term Debt
|
173 | 3,033 | ||||||
Accounts Payable
|
103,108 | 115,514 | ||||||
Accrued Salaries and Wages
|
24,360 | 19,043 | ||||||
Accrued Taxes
|
10,359 | 11,841 | ||||||
Derivative Liabilities
|
18,869 | 18,770 | ||||||
Other Accrued Liabilities
|
6,923 | 5,540 | ||||||
Liabilities of Discontinued Operations
|
164 | 13,763 | ||||||
Total Current Liabilities
|
176,373 | 187,504 | ||||||
Pensions Benefit Liability
|
99,534 | 106,818 | ||||||
Other Postretirement Benefits Liability
|
49,876 | 48,263 | ||||||
Other Noncurrent Liabilities
|
21,806 | 19,002 | ||||||
Commitments and Contingencies (note 9)
|
||||||||
Deferred Credits
|
||||||||
Deferred Income Taxes
|
152,340 | 177,264 | ||||||
Deferred Tax Credits
|
31,822 | 33,182 | ||||||
Regulatory Liabilities
|
69,396 | 69,106 | ||||||
Other
|
449 | 520 | ||||||
Total Deferred Credits
|
254,007 | 280,072 | ||||||
Capitalization
|
||||||||
Long-Term Debt, Net of Current Maturities
|
421,725 | 471,915 | ||||||
Cumulative Preferred Shares
Authorized 1,500,000 Shares Without Par Value;
Outstanding 2012 and 2011 – 155,000 Shares
|
15,500 | 15,500 | ||||||
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, 2012—36,164,598 Shares; 2011—36,101,695 Shares
|
180,823 | 180,509 | ||||||
Premium on Common Shares
|
253,225 | 253,123 | ||||||
Retained Earnings
|
100,198 | 141,248 | ||||||
Accumulated Other Comprehensive Loss
|
(3,141 | ) | (3,432 | ) | ||||
Total Common Equity
|
531,105 | 571,448 | ||||||
Total Capitalization
|
968,330 | 1,058,863 | ||||||
Total Liabilities and Equity
|
$ | 1,569,926 | $ | 1,700,522 | ||||
See accompanying notes to consolidated financial statements.
|
Otter Tail Corporation
|
||||
(not audited)
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
(in thousands, except share and per-share amounts)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Operating Revenues
|
||||||||||||||||
Electric
|
$ | 88,518 | $ | 85,118 | $ | 257,365 | $ | 254,622 | ||||||||
Nonelectric
|
188,625 | 197,255 | 581,076 | 560,197 | ||||||||||||
Total Operating Revenues
|
277,143 | 282,373 | 838,441 | 814,819 | ||||||||||||
Operating Expenses
|
||||||||||||||||
Production Fuel - Electric
|
20,622 | 19,080 | 48,501 | 55,737 | ||||||||||||
Purchased Power - Electric System Use
|
8,138 | 7,488 | 34,624 | 27,759 | ||||||||||||
Electric Operation and Maintenance Expenses
|
28,717 | 27,323 | 91,137 | 84,718 | ||||||||||||
Cost of Goods Sold - Nonelectric (excludes depreciation; included below)
|
158,703 | 171,157 | 489,305 | 490,737 | ||||||||||||
Other Nonelectric Expenses
|
16,438 | 19,114 | 51,118 | 49,204 | ||||||||||||
Asset Impairment Charge
|
-- | -- | 46,005 | -- | ||||||||||||
Exit and Disposal Costs – DMI Industries, Inc.
|
4,400 | -- | 4,400 | -- | ||||||||||||
Depreciation and Amortization
|
15,951 | 17,604 | 50,122 | 52,262 | ||||||||||||
Property Taxes - Electric
|
2,833 | 2,601 | 8,120 | 7,427 | ||||||||||||
Total Operating Expenses
|
255,802 | 264,367 | 823,332 | 767,844 | ||||||||||||
Operating Income
|
21,341 | 18,006 | 15,109 | 46,975 | ||||||||||||
Loss on Early Retirement of Debt
|
13,106 | -- | 13,106 | -- | ||||||||||||
Interest Charges
|
7,904 | 8,696 | 24,997 | 27,310 | ||||||||||||
Other Income
|
689 | 408 | 2,423 | 1,544 | ||||||||||||
Income (Loss) from Continuing Operations Before Income Taxes
|
1,020 | 9,718 | (20,571 | ) | 21,209 | |||||||||||
Income Tax (Benefit) Expense – Continuing Operations
|
(858 | ) | 2,382 | (15,054 | ) | 3,535 | ||||||||||
Net Income (Loss) from Continuing Operations
|
1,878 | 7,336 | (5,517 | ) | 17,674 | |||||||||||
Discontinued Operations
|
||||||||||||||||
(Loss) Income - net of Income Tax (Benefit) Expense of
($2), ($307), $571, and $261 for the respective periods
|
(5 | ) | (514 | ) | 821 | 420 | ||||||||||
(Loss) Gain on Disposition - net of Income Tax (Benefit) Expense of
$0, ($302), ($169), and $3,213 for the respective periods
|
-- | (454 | ) | (3,544 | ) | 12,798 | ||||||||||
Net (Loss) Income from Discontinued Operations
|
(5 | ) | (968 | ) | (2,723 | ) | 13,218 | |||||||||
Net Income (Loss)
|
1,873 | 6,368 | (8,240 | ) | 30,892 | |||||||||||
Preferred Dividend Requirements and Other Adjustments
|
183 | 184 | 551 | 874 | ||||||||||||
Earnings Available for Common Shares
|
$ | 1,690 | $ | 6,184 | $ | (8,791 | ) | $ | 30,018 | |||||||
Average Number of Common Shares Outstanding—Basic
|
36,061,002 | 35,933,003 | 36,043,276 | 35,911,993 | ||||||||||||
Average Number of Common Shares Outstanding—Diluted
|
36,252,765 | 36,171,555 | 36,043,276 | 36,150,545 | ||||||||||||
Basic Earnings Per Common Share:
|
||||||||||||||||
Continuing Operations
|
$ | 0.05 | $ | 0.20 | $ | (0.17 | ) | $ | 0.48 | |||||||
Discontinued Operations
|
-- | (0.03 | ) | (0.07 | ) | 0.36 | ||||||||||
$ | 0.05 | $ | 0.17 | $ | (0.24 | ) | $ | 0.84 | ||||||||
Diluted Earnings Per Common Share:
|
||||||||||||||||
Continuing Operations
|
$ | 0.05 | $ | 0.20 | $ | (0.17 | ) | $ | 0.47 | |||||||
Discontinued Operations
|
-- | (0.03 | ) | (0.07 | ) | 0.36 | ||||||||||
$ | 0.05 | $ | 0.17 | $ | (0.24 | ) | $ | 0.83 | ||||||||
Dividends Declared Per Common Share
|
$ | 0.2975 | $ | 0.2975 | $ | 0.8925 | $ | 0.8925 | ||||||||
See accompanying notes to consolidated financial statements.
|
Otter Tail Corporation
|
||||
(not audited)
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Net Income (Loss)
|
$ | 1,873 | $ | 6,368 | $ | (8,240 | ) | $ | 30,892 | |||||||
Other Comprehensive Income (Loss):
|
||||||||||||||||
Unrealized Gain on Available-for-Sale Securities:
|
||||||||||||||||
Gain (Loss) Arising During Period
|
72 | (3 | ) | 180 | 11 | |||||||||||
Income Tax Expense
|
(29 | ) | 1 | (72 | ) | (5 | ) | |||||||||
Unrealized Gain on Available-for-Sale Securities – net-of-tax
|
43 | (2 | ) | 108 | 6 | |||||||||||
Foreign Currency Translation Adjustment:
|
||||||||||||||||
Unrealized Net Change During Period
|
-- | -- | -- | 303 | ||||||||||||
Reversal of Previously Recognized Gains Realized on the Sale of Idaho Pacific Holdings, Inc. (IPH)
|
-- | -- | -- | (6,068 | ) | |||||||||||
Income Tax Benefit
|
-- | -- | -- | 1,788 | ||||||||||||
Foreign Currency Translation Adjustment – net-of-tax
|
-- | -- | -- | (3,977 | ) | |||||||||||
Pension and Postretirement Benefit Plans:
|
||||||||||||||||
Actuarial Loss -- Regulatory Allocation Adjustment (ESSRP)
|
-- | -- | -- | (1,621 | ) | |||||||||||
Amortization of Unrecognized Postretirement Benefit Losses and Costs
|
101 | 79 | 305 | 963 | ||||||||||||
Income Tax (Expense) Benefit
|
(41 | ) | (32 | ) | (122 | ) | 263 | |||||||||
Pension and Postretirement Benefit Plans – net-of-tax
|
60 | 47 | 183 | (395 | ) | |||||||||||
Total Other Comprehensive Income (Loss)
|
103 | 45 | 291 | (4,366 | ) | |||||||||||
Total Comprehensive Income (Loss)
|
$ | 1,976 | $ | 6,413 | $ | (7,949 | ) | $ | 26,526 | |||||||
See accompanying notes to consolidated financial statements.
|
Otter Tail Corporation
|
||
(not audited)
|
Nine Months Ended
September 30,
|
||||||||
(in thousands)
|
2012
|
2011
|
||||||
Cash Flows from Operating Activities
|
||||||||
Net (Loss) Income
|
$ | (8,240 | ) | $ | 30,892 | |||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
|
||||||||
Net Loss (Gain) from Sale of Discontinued Operations
|
3,544 | (12,798 | ) | |||||
Income from Discontinued Operations
|
(821 | ) | (420 | ) | ||||
Depreciation and Amortization
|
50,122 | 52,262 | ||||||
Asset Impairment Charge
|
46,005 | -- | ||||||
Premium Paid for Early Retirement of Long-Term Debt
|
12,500 | -- | ||||||
Deferred Tax Credits
|
(1,568 | ) | (1,834 | ) | ||||
Deferred Income Taxes
|
(3,513 | ) | 10,117 | |||||
Change in Deferred Debits and Other Assets
|
16,493 | 11,976 | ||||||
Discretionary Contribution to Pension Plan
|
(10,000 | ) | -- | |||||
Change in Noncurrent Liabilities and Deferred Credits
|
7,129 | 1,690 | ||||||
Allowance for Equity (Other) Funds Used During Construction
|
(518 | ) | (576 | ) | ||||
Change in Derivatives Net of Regulatory Deferral
|
752 | (177 | ) | |||||
Stock Compensation Expense – Equity Awards
|
930 | 1,760 | ||||||
Other—Net
|
821 | 1,107 | ||||||
Cash (Used for) Provided by Current Assets and Current Liabilities:
|
||||||||
Change in Receivables
|
(3,815 | ) | (36,575 | ) | ||||
Change in Inventories
|
4,552 | (11,866 | ) | |||||
Change in Other Current Assets
|
43,202 | 10,225 | ||||||
Change in Payables and Other Current Liabilities
|
2,748 | 6,472 | ||||||
Change in Interest and Income Taxes Receivable/Payable
|
(12,263 | ) | 280 | |||||
Net Cash Provided by Continuing Operations
|
148,060 | 62,535 | ||||||
Net Cash Provided by Discontinued Operations
|
1,322 | 17,837 | ||||||
Net Cash Provided by Operating Activities
|
149,382 | 80,372 | ||||||
Cash Flows from Investing Activities
|
||||||||
Capital Expenditures
|
(96,548 | ) | (60,431 | ) | ||||
Proceeds from Disposal of Noncurrent Assets
|
5,478 | 1,859 | ||||||
Net (Increase) Decrease in Other Investments
|
(1,385 | ) | 334 | |||||
Net Cash Used in Investing Activities - Continuing Operations
|
(92,455 | ) | (58,238 | ) | ||||
Net Proceeds from Sale of Discontinued Operations
|
24,278 | 84,330 | ||||||
Net Cash Used in Investing Activities - Discontinued Operations
|
(11,705 | ) | (15,875 | ) | ||||
Net Cash (Used in) Provided by Investing Activities
|
(79,882 | ) | 10,217 | |||||
Cash Flows from Financing Activities
|
||||||||
Change in Checks Written in Excess of Cash
|
4,402 | (8,464 | ) | |||||
Net Short-Term Borrowings (Repayments)
|
12,417 | (40,415 | ) | |||||
Payments for Retirement of Common Stock and Common Stock Issuance Expenses
|
(291 | ) | (152 | ) | ||||
Proceeds from Issuance of Long-Term Debt
|
-- | 2,007 | ||||||
Short-Term and Long-Term Debt Issuance Expenses
|
(14 | ) | (1,577 | ) | ||||
Payments for Retirement of Long-Term Debt
|
(53,051 | ) | (368 | ) | ||||
Premium Paid for Early Retirement of Long-Term Debt
|
(12,500 | ) | -- | |||||
Dividends Paid and Other Distributions
|
(33,033 | ) | (33,011 | ) | ||||
Net Cash Used in Financing Activities - Continuing Operations
|
(82,070 | ) | (81,980 | ) | ||||
Net Cash Used in Financing Activities - Discontinued Operations
|
(1,409 | ) | (1,681 | ) | ||||
Net Cash Used in Financing Activities
|
(83,479 | ) | (83,661 | ) | ||||
Net Change in Cash and Cash Equivalents - Discontinued Operations
|
(673 | ) | 921 | |||||
Effect of Foreign Exchange Rate Fluctuations on Cash – Discontinued Operations
|
-- | (324 | ) | |||||
Net Change in Cash and Cash Equivalents
|
(14,652 | ) | 7,525 | |||||
Cash and Cash Equivalents at Beginning of Period
|
14,652 | -- | ||||||
Cash and Cash Equivalents at End of Period
|
$ | -- | $ | 7,525 | ||||
See accompanying notes to consolidated financial statements.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Percentage-of-Completion Revenues
|
34.5 | % | 39.0 | % | 34.3 | % | 37.6 | % |
September 30,
|
December 31,
|
|||||||
(in thousands)
|
2012
|
2011
|
||||||
Costs Incurred on Uncompleted Contracts
|
$ | 448,039 | $ | 583,346 | ||||
Less Billings to Date
|
(454,803 | ) | (550,070 | ) | ||||
Plus Estimated Earnings Recognized
|
17,091 | 24,478 | ||||||
Net Costs Incurred in Excess of Billings and Accrued Revenues on Uncompleted Contracts
|
$ | 10,327 | $ | 57,754 |
September 30,
|
December 31,
|
|||||||
(in thousands)
|
2012
|
2011
|
||||||
Costs and Estimated Earnings in Excess of Billings
|
$ | 23,900 | $ | 67,109 | ||||
Billings in Excess of Costs and Estimated Earnings
|
(13,573 | ) | (9,355 | ) | ||||
Net Costs Incurred in Excess of Billings and Accrued Revenues on Uncompleted Contracts
|
$ | 10,327 | $ | 57,754 |
September 30,
|
December 31,
|
|||||||
(in thousands)
|
2012
|
2011
|
||||||
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts - DMI
|
$ | 17,609 | $ | 54,541 |
(in thousands)
|
||||
Warranty Reserve Balance, December 31, 2011
|
$ | 3,170 | ||
Provision for Warranties Issued During the Year
|
761 | |||
Settlements Made During the Year
|
(880 | ) | ||
Adjustments to Warranty Estimates for Prior Years
|
(71 | ) | ||
Warranty Reserve Balance, September 30, 2012
|
$ | 2,980 |
September 30,
|
December 31,
|
|||||||
(in thousands)
|
2012
|
2011
|
||||||
Accounts Receivable Retained by Customers
|
$ | 13,224 | $ | 13,526 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Accounts Receivable Sold
|
$ | - | $ | 20,662 | $ | 32,115 | $ | 48,802 |
September 30, 2012 (in thousands)
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Assets:
|
|||||||||||
Current Assets – Other:
|
|||||||||||
Forward Energy Contracts
|
$ | -- | $ | 977 | $ | 1,242 | |||||
Forward Gasoline Purchase Contracts
|
192 | ||||||||||
Money Market Fund - Escrow Account IPH Sale
|
1,500 | ||||||||||
Money Market and Mutual Funds - Nonqualified Retirement Savings Plan
|
110 | ||||||||||
Investments:
|
|||||||||||
Corporate Debt Securities – Held by Captive Insurance Company
|
8,028 | ||||||||||
U.S. Government Debt Securities – Held by Captive Insurance Company
|
1,312 | ||||||||||
Other Assets:
|
|||||||||||
Money Market and Mutual Funds - Nonqualified Retirement Savings Plan
|
107 | ||||||||||
Equity Securities - Nonqualified Retirement Savings Plan
|
129 | ||||||||||
Total Assets
|
$ | 1,846 | $ | 10,509 | $ | 1,242 | |||||
Liabilities:
|
|||||||||||
Derivative Liabilities:
|
|||||||||||
Forward Energy Contracts
|
$ | -- | $ | 3,413 | $ | 15,456 | |||||
Total Liabilities
|
$ | -- | $ | 3,413 | $ | 15,456 | |||||
In 2012, the Company’s investments in forward gasoline contracts and U.S. government debt securities were moved to level 2 of the fair value hierarchy and the regulatory assets and liabilities are no longer included in the fair value table.
|
December 31, 2011 (in thousands)
|
Level 1
|
Level 2
|
Level 3
|
||||||
Assets:
|
|||||||||
Current Assets – Other:
|
|||||||||
Forward Energy Contracts
|
$ | -- | $ | 3,803 | |||||
Forward Gasoline Purchase Contracts
|
9 | ||||||||
Money Market Fund - Escrow Account IPH Sale
|
1,500 | ||||||||
Money Market and Mutual Funds - Nonqualified Retirement Savings Plan
|
110 | ||||||||
Regulatory Assets – Current:
|
|||||||||
Deferred Mark-to-Market Losses on Forward Energy Contracts
|
5,208 | ||||||||
Investments:
|
|||||||||
Corporate Debt Securities – Held by Captive Insurance Company
|
8,083 | ||||||||
U.S. Government Debt Securities – Held by Captive Insurance Company
|
707 | ||||||||
Money Market Fund - Escrow Account IPH Sale
|
1,501 | ||||||||
Other Assets:
|
|||||||||
Money Market and Mutual Funds - Nonqualified Retirement Savings Plan
|
254 | ||||||||
Regulatory Assets – Deferred:
|
|||||||||
Deferred Mark-to-Market Losses on Forward Energy Contracts
|
10,749 | ||||||||
Total Assets
|
$ | 4,081 | $ | 27,843 | |||||
Liabilities:
|
|||||||||
Derivative Liabilities - Forward Energy Contracts
|
$ | -- | $ | 18,770 | |||||
Regulatory Liabilities – Current:
|
|||||||||
Deferred Mark-to-Market Gains on Forward Energy Contracts
|
96 | ||||||||
Total Liabilities
|
$ | -- | $ | 18,866 |
September 30,
|
December 31,
|
|||||||
(in thousands)
|
2012
|
2011
|
||||||
Finished Goods
|
$ | 20,306 | $ | 21,373 | ||||
Work in Process
|
11,302 | 11,951 | ||||||
Raw Material, Fuel and Supplies
|
41,822 | 44,659 | ||||||
Total Inventories
|
$ | 73,430 | $ | 77,983 |
(in thousands)
|
||||
Long-Lived Assets
|
$ | 90,846 | ||
Accumulated Depreciation – Long-Lived Assets
|
(45,561 | ) | ||
Goodwill
|
288 | |||
Total Asset Impairment Charges
|
$ | 45,573 |
(in thousands)
|
Gross Balance
December 31,
2011
|
Accumulated
Impairments |
Balance (net of
impairments) December 31,
2011
|
Adjustments
to Goodwill in 2012 |
Balance (net of
impairments) September 30,
2012
|
|||||||||||||||
Electric
|
$ | 240 | $ | (240 | ) | $ | -- | $ | -- | $ | -- | |||||||||
Wind Energy
|
288 | -- | 288 | (288 | ) | -- | ||||||||||||||
Manufacturing
|
24,445 | (12,259 | ) | 12,186 | -- | 12,186 | ||||||||||||||
Construction
|
7,630 | -- | 7,630 | 1 | 7,631 | |||||||||||||||
Plastics
|
19,302 | -- | 19,302 | -- | 19,302 | |||||||||||||||
Total
|
$ | 51,905 | $ | (12,499 | ) | $ | 39,406 | $ | (287 | ) | $ | 39,119 |
September 30, 2012 (in thousands)
|
Gross Carrying
Amount |
Accumulated
Amortization |
Net Carrying
Amount
|
Amortization
Periods
|
|||||||||
Amortizable Intangible Assets:
|
|||||||||||||
Customer Relationships
|
$ | 16,811 | $ | 3,873 | $ | 12,938 |
15 – 25 years
|
||||||
Other Intangible Assets Including Contracts
|
1,092 | 581 | 511 |
5 – 30 years
|
|||||||||
Total
|
$ | 17,903 | $ | 4,454 | $ | 13,449 | |||||||
Indefinite-lived Intangible Assets:
|
|||||||||||||
Trade Name
|
$ | 1,100 | -- | $ | 1,100 | ||||||||
December 31, 2011 (in thousands)
|
|||||||||||||
Amortizable Intangible Assets:
|
|||||||||||||
Customer Relationships
|
$ | 16,811 | $ | 3,236 | $ | 13,575 |
15 – 25 years
|
||||||
Covenants Not to Compete
|
713 | 709 | 4 |
3 – 5 years
|
|||||||||
Other Intangible Assets Including Contracts
|
1,092 | 485 | 607 |
5 – 30 years
|
|||||||||
Total
|
$ | 18,616 | $ | 4,430 | $ | 14,186 | |||||||
Indefinite-lived Intangible Assets:
|
|||||||||||||
Trade Name
|
$ | 1,100 | -- | $ | 1,100 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Amortization Expense – Intangible Assets
|
$ | 244 | $ | 215 | $ | 737 | $ | 657 |
(in thousands)
|
2012
|
2013
|
2014
|
2015
|
2016
|
|||||||||||||||
Estimated Amortization Expense – Intangible Assets
|
$ | 981 | $ | 977 | $ | 977 | $ | 977 | $ | 945 |
As of September 30,
|
||||||||
(in thousands)
|
2012
|
2011
|
||||||
Noncash Investing Activities:
|
||||||||
Accounts Payable Outstanding Related to Capital Additions1
|
$ | 5,979 | $ | 2,878 | ||||
1Amounts are included in cash used for capital expenditures in subsequent periods when payables are settled.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
United States of America
|
98.1 | % | 98.2 | % | 97.8 | % | 98.3 | % | ||||||||
Canada
|
1.0 | % | 1.3 | % | 1.4 | % | 1.4 | % | ||||||||
All Other Countries
|
0.9 | % | 0.5 | % | 0.8 | % | 0.3 | % |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Electric
|
$ | 88,564 | $ | 85,172 | $ | 257,530 | $ | 254,799 | ||||||||
Wind Energy
|
55,025 | 52,595 | 169,745 | 154,608 | ||||||||||||
Manufacturing
|
53,567 | 55,625 | 183,142 | 168,306 | ||||||||||||
Construction
|
37,931 | 53,247 | 111,482 | 139,895 | ||||||||||||
Plastics
|
42,217 | 36,231 | 118,582 | 99,082 | ||||||||||||
Corporate Revenues and Intersegment Eliminations
|
(161 | ) | (497 | ) | (2,040 | ) | (1,871 | ) | ||||||||
Total
|
$ | 277,143 | $ | 282,373 | $ | 838,441 | $ | 814,819 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Electric
|
$ | 4,880 | $ | 4,796 | $ | 14,493 | $ | 14,874 | ||||||||
Wind Energy
|
1,499 | 1,775 | 4,813 | 5,334 | ||||||||||||
Manufacturing
|
1,279 | 1,229 | 3,968 | 3,695 | ||||||||||||
Construction
|
305 | 251 | 868 | 698 | ||||||||||||
Plastics
|
342 | 411 | 1,034 | 1,176 | ||||||||||||
Corporate and Intersegment Eliminations
|
(401 | ) | 234 | (179 | ) | 1,533 | ||||||||||
Total
|
$ | 7,904 | $ | 8,696 | $ | 24,997 | $ | 27,310 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Electric
|
$ | 2,995 | $ | 3,364 | $ | 3,817 | $ | 5,972 | ||||||||
Wind Energy
|
(114 | ) | (383 | ) | (16,081 | ) | (4,106 | ) | ||||||||
Manufacturing
|
574 | 780 | 3,701 | 4,132 | ||||||||||||
Construction
|
(879 | ) | (115 | ) | (4,819 | ) | (195 | ) | ||||||||
Plastics
|
2,216 | 1,295 | 7,113 | 3,198 | ||||||||||||
Corporate
|
(5,650 | ) | (2,559 | ) | (8,785 | ) | (5,466 | ) | ||||||||
Total
|
$ | (858 | ) | $ | 2,382 | $ | (15,054 | ) | $ | 3,535 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Electric
|
$ | 10,206 | $ | 10,900 | $ | 26,413 | $ | 29,428 | ||||||||
Wind Energy
|
(2,974 | ) | (2,770 | ) | (28,597 | ) | (15,568 | ) | ||||||||
Manufacturing
|
833 | 1,366 | 5,464 | 6,793 | ||||||||||||
Construction
|
(1,325 | ) | (179 | ) | (7,252 | ) | (320 | ) | ||||||||
Plastics
|
3,309 | 1,970 | 10,629 | 4,908 | ||||||||||||
Corporate
|
(8,354 | ) | (4,135 | ) | (12,725 | ) | (8,119 | ) | ||||||||
Discontinued Operations
|
(5 | ) | (968 | ) | (2,723 | ) | 12,896 | |||||||||
Total
|
$ | 1,690 | $ | 6,184 | $ | (8,791 | ) | $ | 30,018 |
September 30,
|
December 31,
|
|||||||
(in thousands)
|
2012
|
2011
|
||||||
Electric
|
$ | 1,179,472 | $ | 1,170,449 | ||||
Wind Energy
|
47,610 | 149,234 | ||||||
Manufacturing
|
149,715 | 154,908 | ||||||
Construction
|
67,342 | 69,453 | ||||||
Plastics
|
86,445 | 72,200 | ||||||
Corporate
|
38,612 | 54,586 | ||||||
Discontinued Operations
|
730 | 29,692 | ||||||
Total
|
$ | 1,569,926 | $ | 1,700,522 |
September 30, 2012
|
Remaining Recovery/ |
||||||||||||
(in thousands)
|
Current
|
Long-Term
|
Total
|
Refund Period
|
|||||||||
Regulatory Assets:
|
|||||||||||||
Unrecognized Transition Obligation, Prior Service Costs and Actuarial Losses on Pensions and Other Postretirement Benefits
|
$ | 7,047 | $ | 90,046 | $ | 97,093 |
see notes
|
||||||
Deferred Marked-to-Market Losses
|
6,722 | 11,170 | 17,892 |
75 months
|
|||||||||
Conservation Improvement Program Accrued Revenues & Incentives
|
1,211 | 4,282 | 5,493 |
21 months
|
|||||||||
Accumulated ARO Accretion/Depreciation Adjustment
|
-- | 4,015 | 4,015 |
asset lives
|
|||||||||
Debt Reacquisition Premiums
|
270 | 2,046 | 2,316 |
240 months
|
|||||||||
Big Stone II Unrecovered Project Costs – Minnesota
|
518 | 1,753 | 2,271 |
48 months
|
|||||||||
North Dakota Renewable Resource Rider Accrued Revenues
|
852 | 1,009 | 1,861 |
18 months
|
|||||||||
Deferred Income Taxes
|
-- | 1,836 | 1,836 |
asset lives
|
|||||||||
Minnesota Renewable Resource Rider Accrued Revenues
|
784 | 579 | 1,363 |
18 months
|
|||||||||
Big Stone II Unrecovered Project Costs – North Dakota
|
1,254 | -- | 1,254 |
10 months
|
|||||||||
Accrued Cost-of-Energy Revenues
|
1,101 | -- | 1,101 |
12 months
|
|||||||||
Big Stone II Unrecovered Project Costs – South Dakota
|
100 | 736 | 836 |
100 months
|
|||||||||
North Dakota Transmission Rider Accrued Revenues
|
614 | -- | 614 |
12 months
|
|||||||||
General Rate Case Recoverable Expenses
|
431 | 24 | 455 |
16 months
|
|||||||||
Deferred Holding Company Formation Costs
|
55 | 41 | 96 |
21 months
|
|||||||||
MISO Schedule 26 Transmission Cost Recovery Rider True-up
|
63 | -- | 63 |
3 months
|
|||||||||
MISO Schedule 16 and 17 Deferred Administrative Costs - ND
|
62 | -- | 62 |
2 months
|
|||||||||
Total Regulatory Assets
|
$ | 21,084 | $ | 117,537 | $ | 138,621 | |||||||
Regulatory Liabilities:
|
|||||||||||||
Accumulated Reserve for Estimated Removal Costs – Net of Salvage
|
$ | -- | $ | 65,272 | $ | 65,272 |
asset lives
|
||||||
Deferred Income Taxes
|
-- | 2,752 | 2,752 |
asset lives
|
|||||||||
Deferred Marked-to-Market Gains
|
24 | 1,259 | 1,283 |
72 months
|
|||||||||
Minnesota Transmission Rider Accrued Refund
|
273 | -- | 273 |
12 months
|
|||||||||
Deferred Gain on Sale of Utility Property – Minnesota Portion
|
6 | 113 | 119 |
255 months
|
|||||||||
South Dakota – Nonasset-Based Margin Sharing Excess
|
64 | -- | 64 |
3 months
|
|||||||||
South Dakota Transmission Rider Accrued Refund
|
61 | -- | 61 |
3 months
|
|||||||||
Total Regulatory Liabilities
|
$ | 428 | $ | 69,396 | $ | 69,824 | |||||||
Net Regulatory Asset Position
|
$ | 20,656 | $ | 48,141 | $ | 68,797 |
December 31, 2011
|
Remaining Recovery/ |
||||||||||||
(in thousands)
|
Current
|
Long-Term
|
Total
|
Refund Period
|
|||||||||
Regulatory Assets:
|
|||||||||||||
Unrecognized Transition Obligation, Prior Service Costs and Actuarial Losses on Pensions and Other Postretirement Benefits
|
$ | 6,304 | $ | 96,074 | $ | 102,378 |
see notes
|
||||||
Deferred Marked-to-Market Losses
|
5,208 | 10,749 | 15,957 |
44 months
|
|||||||||
Conservation Improvement Program Accrued Revenues & Incentives
|
5,234 | 2,208 | 7,442 |
18 months
|
|||||||||
Accrued Cost-of-Energy Revenue
|
4,043 | -- | 4,043 |
12 months
|
|||||||||
Accumulated ARO Accretion/Depreciation Adjustment
|
-- | 3,662 | 3,662 |
asset lives
|
|||||||||
Minnesota Renewable Resource Rider Accrued Revenues
|
1,461 | 1,306 | 2,767 |
33 months
|
|||||||||
Big Stone II Unrecovered Project Costs – Minnesota
|
495 | 2,144 | 2,639 |
57 months
|
|||||||||
Debt Reacquisition Premiums
|
280 | 2,246 | 2,526 |
249 months
|
|||||||||
Deferred Income Taxes
|
-- | 2,382 | 2,382 |
asset lives
|
|||||||||
Big Stone II Unrecovered Project Costs – North Dakota
|
1,340 | 862 | 2,202 |
19 months
|
|||||||||
North Dakota Renewable Resource Rider Accrued Revenues
|
785 | 1,325 | 2,110 |
24 months
|
|||||||||
General Rate Case Recoverable Expenses
|
721 | 285 | 1,006 |
25 months
|
|||||||||
Big Stone II Unrecovered Project Costs – South Dakota
|
100 | 811 | 911 |
109 months
|
|||||||||
North Dakota Transmission Rider Accrued Revenue
|
518 | -- | 518 |
12 months
|
|||||||||
MISO Schedule 16 and 17 Deferred Administrative Costs - ND
|
343 | -- | 343 |
11 months
|
|||||||||
MISO Schedule 26 Transmission Cost Recovery Rider True-up
|
252 | -- | 252 |
12 months
|
|||||||||
Deferred Holding Company Formation Costs
|
55 | 83 | 138 |
30 months
|
|||||||||
South Dakota – Asset-Based Margin Sharing Shortfall
|
138 | -- | 138 |
2 months
|
|||||||||
South Dakota Transmission Rider Accrued Revenues
|
114 | -- | 114 |
12 months
|
|||||||||
Total Regulatory Assets
|
$ | 27,391 | $ | 124,137 | $ | 151,528 | |||||||
Regulatory Liabilities:
|
|||||||||||||
Accumulated Reserve for Estimated Removal Costs – Net of Salvage
|
$ | -- | $ | 65,610 | $ | 65,610 |
asset lives
|
||||||
Deferred Income Taxes
|
-- | 3,379 | 3,379 |
asset lives
|
|||||||||
Deferred Gain on Sale of Utility Property – Minnesota Portion
|
6 | 117 | 123 |
264 months
|
|||||||||
Deferred Marked-to-Market Gains
|
96 | -- | 96 |
12 months
|
|||||||||
South Dakota – Nonasset-Based Margin Sharing Excess
|
54 | -- | 54 |
12 months
|
|||||||||
Minnesota Transmission Rider Accrued Refund
|
28 | -- | 28 |
see notes
|
|||||||||
Total Regulatory Liabilities
|
$ | 184 | $ | 69,106 | $ | 69,290 | |||||||
Net Regulatory Asset Position
|
$ | 27,207 | $ | 55,031 | $ | 82,238 |
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Other Current Asset – Derivative Asset
|
$ | 2,219 | $ | 3,803 | ||||
Regulatory Asset – Current Deferred Marked-to-Market Loss
|
6,722 | 5,208 | ||||||
Regulatory Asset – Long-Term Deferred Marked-to-Market Loss
|
11,170 | 10,749 | ||||||
Total Assets
|
20,111 | 19,760 | ||||||
Derivative Liability
|
(18,869 | ) | (18,770 | ) | ||||
Regulatory Liability – Current Deferred Marked-to-Market Gain
|
(24 | ) | (96 | ) | ||||
Regulatory Liability – Long-Term Deferred Marked-to-Market Gain
|
(1,259 | ) | -- | |||||
Total Liabilities
|
(20,152 | ) | (18,866 | ) | ||||
Fair Value Adjustments Included in Earnings
|
$ | (41 | ) | $ | 894 |
(in thousands)
|
Year-to-Date
September 30, 2012
|
Year-to-Date
September 30, 2011
|
||||||
Cumulative Fair Value Adjustments Included in Earnings - Beginning of Year
|
$ | 894 | $ | 763 | ||||
Less: Amounts Realized on Settlement of Contracts Entered into in Prior Periods
|
(781 | ) | (253 | ) | ||||
Changes in Fair Value of Contracts Entered into in Prior Periods
|
(33 | ) | (86 | ) | ||||
Cumulative Fair Value Adjustments in Earnings of Contracts Entered into in Prior Years at End of Period
|
80 | 424 | ||||||
Changes in Fair Value of Contracts Entered into in Current Period
|
(121 | ) | 550 | |||||
Cumulative Fair Value Adjustments Included in Earnings - End of Period
|
$ | (41 | ) | $ | 974 |
(in thousands)
|
4th Qtr
2012
|
1st Qtr
2013
|
Total
|
|||||||||
Net (Loss) Gain
|
$ | (44 | ) | $ | 3 | $ | (41 | ) |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Net Gains (Losses) on Forward Electric Energy Contracts
|
$ | (274 | ) | $ | 456 | $ | (130 | ) | $ | 587 |
September 30, 2012
|
December 31, 2011
|
|||||||||||||||
(in thousands)
|
Exposure
|
Counterparties
|
Exposure
|
Counterparties
|
||||||||||||
Net Credit Risk on Forward Energy Contracts
|
$ | 322 | 7 | $ | 1,677 | 10 | ||||||||||
Net Credit Risk to Single Largest Counterparty
|
$ | 195 | $ | 737 |
Current Liability – Marked-to-Market Loss (in thousands)
|
September 30,
2012
|
December 31,
2011
|
||||||
Loss Contracts Covered by Deposited Funds or Letters of Credit
|
$ | 2,000 | $ | 3,423 | ||||
Contracts Requiring Cash Deposits if OTP’s Credit Falls Below Investment Grade1
|
16,869 | 15,347 | ||||||
Loss Contracts with No Ratings Triggers or Deposit Requirements
|
-- | -- | ||||||
Total Current Liability – Marked-to-Market Loss
|
$ | 18,869 | $ | 18,770 | ||||
1Certain OTP derivative energy contracts contain provisions that require an investment grade credit rating from each of the major credit rating agencies on OTP’s debt. If OTP’s debt ratings were to fall below investment grade, the counterparties to these forward energy contracts could request the immediate deposit of cash to cover contracts in net liability positions.
|
||||||||
Contracts Requiring Cash Deposits if OTP’s Credit Falls Below Investment Grade
|
$ | 16,869 | $ | 15,347 | ||||
Offsetting Gains with Counterparties under Master Netting Agreements
|
(2,107 | ) | (3,471 | ) | ||||
Reporting Date Deposit Requirement if Credit Risk Feature Triggered
|
$ | 14,762 | $ | 11,876 |
Common Shares Outstanding, December 31, 2011
|
36,101,695 | |||
Issuances:
|
||||
Restricted Stock Issued to Employees
|
24,500 | |||
Restricted Stock Issued to Nonemployee Directors
|
24,000 | |||
Vesting of Restricted Stock Units
|
21,300 | |||
Retirements:
|
||||
Shares Withheld for Individual Income Tax Requirements
|
(5,072 | ) | ||
Forfeiture of Unvested Restricted Stock
|
(1,825 | ) | ||
Common Shares Outstanding, September 30, 2012
|
36,164,598 |
Three Months Ended September 30,
|
Options Outstanding
|
Range of Exercise Prices
|
2012
|
92,497
|
$24.93 – $27.25
|
2011
|
170,960
|
$24.93 – $31.34
|
Nine Months Ended September 30,
|
Options Outstanding
|
Range of Exercise Prices
|
2012
|
92,497
|
$24.93 – $27.25
|
2011
|
170,960
|
$24.93 – $31.34
|
Award
|
Shares/Units
Granted |
Grant-Date
Fair Value per Share |
Vesting
|
||||||
Restricted Stock Granted to Nonemployee Directors
|
24,000 | $ | 21.32 |
25% per year through April 8, 2016
|
|||||
Restricted Stock Granted to Executive Officers
|
24,500 | $ | 21.32 |
25% per year through April 8, 2016
|
|||||
Stock Performance Awards Granted to Executive Officers
|
80,800 | $ | 21.75 |
December 31, 2014
|
|||||
Restricted Stock Units Granted to Employees
|
12,800 | $ | 17.14 |
100% on April 8, 2016
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Employee Stock Purchase Plan (15% discount)
|
$ | 31 | $ | 51 | $ | 119 | $ | 185 | ||||||||
Restricted Stock Granted to Directors
|
139 | 185 | 413 | 571 | ||||||||||||
Restricted Stock Granted to Employees
|
87 | 511 | 232 | 759 | ||||||||||||
Restricted Stock Units Granted to Employees
|
60 | 92 | 165 | 244 | ||||||||||||
Stock Performance Awards Granted to Executive Officers
|
146 | 1,766 | 439 | 1,766 | ||||||||||||
Totals
|
$ | 463 | $ | 2,605 | $ | 1,368 | $ | 3,525 |
(in thousands)
|
Line Limit
|
In Use on
September 30,
2012 |
Restricted due to
Outstanding Letters of Credit |
Available on
September 30,
2012 |
Available on
December 31,
2011 |
|||||||||||||||
Otter Tail Corporation Credit Agreement
|
$ | 200,000 | $ | -- | $ | 733 | $ | 199,267 | $ | 198,776 | ||||||||||
OTP Credit Agreement
|
170,000 | 12,417 | 3,050 | 154,533 | 165,950 | |||||||||||||||
Total
|
$ | 370,000 | $ | 12,417 | $ | 3,783 | $ | 353,800 | $ | 364,726 |
September 30, 2012 (in thousands)
|
OTP
|
Varistar
|
Otter Tail
Corporation |
Otter Tail
Corporation Consolidated |
||||||||||||
Short-Term Debt
|
$ | 12,417 | $ | -- | $ | -- | $ | 12,417 | ||||||||
Long-Term Debt:
|
||||||||||||||||
9.000% Notes, due December 15, 2016
|
$ | 100,000 | $ | 100,000 | ||||||||||||
Senior Unsecured Notes 5.95%, Series A, due August 20, 2017
|
$ | 33,000 | 33,000 | |||||||||||||
Grant County, South Dakota Pollution Control
Refunding Revenue Bonds 4.65%, due September 1, 2017
|
5,065 | 5,065 | ||||||||||||||
Senior Unsecured Note 8.89%, due November 30, 20171
|
-- | -- | ||||||||||||||
Senior Unsecured Notes 4.63%, due December 1, 2021
|
140,000 | 140,000 | ||||||||||||||
Senior Unsecured Notes 6.15%, Series B, due August 20, 2022
|
30,000 | 30,000 | ||||||||||||||
Mercer County, North Dakota Pollution Control
Refunding Revenue Bonds 4.85%, due September 1, 2022
|
20,070 | 20,070 | ||||||||||||||
Senior Unsecured Notes 6.37%, Series C, due August 20, 2027
|
42,000 | 42,000 | ||||||||||||||
Senior Unsecured Notes 6.47%, Series D, due August 20, 2037
|
50,000 | 50,000 | ||||||||||||||
Other Obligations - Various up to 3.95% at September 30, 2012
|
1,767 | 1,767 | ||||||||||||||
Total
|
$ | 320,135 | $ | -- | $ | 101,767 | $ | 421,902 | ||||||||
Less: Current Maturities
|
-- | -- | 173 | 173 | ||||||||||||
Unamortized Debt Discount
|
-- | -- | 4 | 4 | ||||||||||||
Total Long-Term Debt
|
$ | 320,135 | $ | -- | $ | 101,590 | $ | 421,725 | ||||||||
Total Short-Term and Long-Term Debt (with current maturities)
|
$ | 332,552 | $ | -- | $ | 101,763 | $ | 434,315 | ||||||||
1Repaid in full on July 13, 2012.
|
December 31, 2011 (in thousands)
|
OTP
|
Varistar
|
Otter Tail
Corporation |
Otter Tail
Corporation Consolidated |
||||||||||||
Short-Term Debt
|
$ | -- | $ | -- | $ | -- | $ | -- | ||||||||
Long-Term Debt:
|
||||||||||||||||
9.000% Notes, due December 15, 2016
|
$ | 100,000 | $ | 100,000 | ||||||||||||
Senior Unsecured Notes 5.95%, Series A, due August 20, 2017
|
$ | 33,000 | 33,000 | |||||||||||||
Grant County, South Dakota Pollution Control
Refunding Revenue Bonds 4.65%, due September 1, 2017
|
5,090 | 5,090 | ||||||||||||||
Senior Unsecured Note 8.89%, due November 30, 2017
|
50,000 | 50,000 | ||||||||||||||
Senior Unsecured Notes 4.63%, due December 1, 2021
|
140,000 | 140,000 | ||||||||||||||
Senior Unsecured Notes 6.15%, Series B, due August 20, 2022
|
30,000 | 30,000 | ||||||||||||||
Mercer County, North Dakota Pollution Control
Refunding Revenue Bonds 4.85%, due September 1, 2022
|
20,105 | 20,105 | ||||||||||||||
Senior Unsecured Notes 6.37%, Series C, due August 20, 2027
|
42,000 | 42,000 | ||||||||||||||
Senior Unsecured Notes 6.47%, Series D, due August 20, 2037
|
50,000 | 50,000 | ||||||||||||||
Other Obligations - Various up to 3.95% at December 31, 2011
|
$ | 2,868 | 1,889 | 4,757 | ||||||||||||
Total
|
$ | 320,195 | $ | 2,868 | $ | 151,889 | $ | 474,952 | ||||||||
Less: Current Maturities
|
-- | 2,868 | 165 | 3,033 | ||||||||||||
Unamortized Debt Discount
|
-- | -- | 4 | 4 | ||||||||||||
Total Long-Term Debt
|
$ | 320,195 | $ | -- | $ | 151,720 | $ | 471,915 | ||||||||
Total Short-Term and Long-Term Debt (with current maturities)
|
$ | 320,195 | $ | 2,868 | $ | 151,885 | $ | 474,948 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Service Cost—Benefit Earned During the Period
|
$ | 1,271 | $ | 961 | $ | 3,813 | $ | 3,311 | ||||||||
Interest Cost on Projected Benefit Obligation
|
3,116 | 3,150 | 9,349 | 9,500 | ||||||||||||
Expected Return on Assets
|
(3,608 | ) | (3,530 | ) | (10,823 | ) | (10,605 | ) | ||||||||
Amortization of Prior-Service Cost
|
103 | 125 | 307 | 325 | ||||||||||||
Amortization of Net Actuarial Loss
|
1,260 | 663 | 3,780 | 1,963 | ||||||||||||
Net Periodic Pension Cost
|
$ | 2,142 | $ | 1,369 | $ | 6,426 | $ | 4,494 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Service Cost—Benefit Earned During the Period
|
$ | 11 | $ | 20 | $ | 34 | $ | 61 | ||||||||
Interest Cost on Projected Benefit Obligation
|
370 | 407 | 1,109 | 1,223 | ||||||||||||
Amortization of Prior-Service Cost
|
18 | 18 | 55 | 55 | ||||||||||||
Amortization of Net Actuarial Loss
|
82 | 62 | 245 | 184 | ||||||||||||
Net Periodic Pension Cost
|
$ | 481 | $ | 507 | $ | 1,443 | $ | 1,523 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Service Cost—Benefit Earned During the Period
|
$ | 449 | $ | 425 | $ | 1,349 | $ | 1,275 | ||||||||
Interest Cost on Projected Benefit Obligation
|
875 | 850 | 2,625 | 2,550 | ||||||||||||
Amortization of Transition Obligation
|
187 | 187 | 561 | 561 | ||||||||||||
Amortization of Prior-Service Cost
|
53 | 50 | 158 | 150 | ||||||||||||
Amortization of Net Actuarial Loss
|
379 | 213 | 1,138 | 639 | ||||||||||||
Effect of Medicare Part D Expected Subsidy
|
(509 | ) | (525 | ) | (1,529 | ) | (1,575 | ) | ||||||||
Net Periodic Postretirement Benefit Cost
|
$ | 1,434 | $ | 1,200 | $ | 4,302 | $ | 3,600 |
September 30, 2012
|
December 31, 2011
|
|||||||||||||||
(in thousands)
|
Carrying
Amount |
Fair Value
|
Carrying
Amount |
Fair Value
|
||||||||||||
Cash and Cash Equivalents
|
$ | -- | $ | -- | $ | 14,652 | $ | 14,652 | ||||||||
Long-Term Debt (including current maturities)
|
$ | (421,898 | ) | $ | (492,431 | ) | $ | (474,948 | ) | $ | (528,074 | ) |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Income (Loss) Before Income Taxes – Continuing Operations
|
$ | 1,020 | $ | 9,718 | $ | (20,571 | ) | $ | 21,209 | |||||||
Add Back Canadian Losses not Subject to Income Tax Benefits
|
3,072 | 2,174 | 4,440 | 8,954 | ||||||||||||
Income (Loss) Before Income Taxes – Continuing Operations, Subject to Taxes
|
4,092 | 11,892 | (16,131 | ) | 30,163 | |||||||||||
Income Tax Expense (Benefit) Computed at the Company’s Net Composite Federal and State Statutory Rate (39%)
|
1,596 | 4,638 | (6,291 | ) | 11,764 | |||||||||||
Increases (Decreases) in Tax from:
|
||||||||||||||||
Federal Production Tax Credits
|
(1,239 | ) | (1,394 | ) | (5,057 | ) | (5,299 | ) | ||||||||
Accrual (Reversal) of Interest on Cost Capitalization Audit Issue
|
-- | 275 | (676 | ) | 275 | |||||||||||
North Dakota Wind Tax Credit Amortization – Net of Federal Taxes
|
(297 | ) | (220 | ) | (668 | ) | (775 | ) | ||||||||
Medicare Part D Subsidy
|
(196 | ) | (165 | ) | (587 | ) | (526 | ) | ||||||||
Employee Stock Ownership Plan Dividend Deduction
|
(190 | ) | (192 | ) | (571 | ) | (576 | ) | ||||||||
Canadian Revenue Authority Audit Settlement
|
-- | -- | -- | 156 | ||||||||||||
Investment Tax Credit
|
(180 | ) | (214 | ) | (540 | ) | (641 | ) | ||||||||
Corporate Owned Life Insurance
|
(118 | ) | 85 | (503 | ) | (181 | ) | |||||||||
Section 199 - Domestic Production Activities Deduction
|
-- | (178 | ) | -- | (573 | ) | ||||||||||
Other Items – Net
|
(234 | ) | (253 | ) | (161 | ) | (89 | ) | ||||||||
Income Tax (Benefit) Expense – Continuing Operations
|
$ | (858 | ) | $ | 2,382 | $ | (15,054 | ) | $ | 3,535 | ||||||
Effective Income Tax Rate – Continuing Operations
|
(84.1 | )% | 24.5 | % | 73.2 | % | 16.7 | % |
(in thousands)
|
2012
|
|||
Balance on January 1
|
$ | 12,138 | ||
Increases Related to Tax Positions for Prior Years
|
-- | |||
Uncertain Positions Resolved During Year
|
(8,354 | ) | ||
Balance on September 30
|
$ | 3,784 |
For the Three Months
Ended September 30, |
For the Nine Months
Ended September 30, |
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Operating Revenues
|
$ | -- | $ | 33,385 | $ | 16,352 | $ | 132,845 | ||||||||
Operating Expenses
|
7 | 34,255 | 14,935 | 133,598 | ||||||||||||
Operating (Loss) Income
|
(7 | ) | (870 | ) | 1,417 | (753 | ) | |||||||||
Interest Charges
|
-- | 12 | 147 | 43 | ||||||||||||
Other Income
|
-- | 61 | 122 | 1,477 | ||||||||||||
Income Tax (Benefit) Expense
|
(2 | ) | (307 | ) | 571 | 261 | ||||||||||
Net (Loss) Income from Operations
|
(5 | ) | (514 | ) | 821 | 420 | ||||||||||
(Loss) Gain on Disposition Before Taxes
|
-- | (756 | ) | (3,713 | ) | 16,011 | ||||||||||
Income Tax (Benefit) Expense on Disposition
|
-- | (302 | ) | (169 | ) | 3,213 | ||||||||||
Net (Loss) Gain on Disposition
|
-- | (454 | ) | (3,544 | ) | 12,798 | ||||||||||
Net (Loss) Income
|
$ | (5 | ) | $ | (968 | ) | $ | (2,723 | ) | $ | 13,218 |
(in thousands)
|
September 30,
2012 |
December 31,
2011 |
||||||
Current Assets
|
$ | 730 | $ | 29,320 | ||||
Net Plant
|
-- | 372 | ||||||
Assets of Discontinued Operations
|
$ | 730 | $ | 29,692 | ||||
Current Liabilities
|
$ | 164 | $ | 14,740 | ||||
Deferred Income Taxes
|
-- | (1,811 | ) | |||||
Deferred Credits - Other
|
-- | 119 | ||||||
Long-Term Debt
|
-- | 715 | ||||||
Liabilities of Discontinued Operations
|
$ | 164 | $ | 13,763 |
Award
|
Shares/Units
Granted |
Grant-Date
Fair Value per Share |
Vesting
|
||||||
Restricted Stock Granted to Executive Officer
|
1,620 | $ | 23.93 |
25% on April 8th of each year 2013 – 2016
|
|||||
Restricted Stock Units Granted to Employees
|
3,000 | $ | 19.87 |
100% on April 8, 2016
|
(in thousands)
|
Line Limit
|
In Use On
October 31, 2012
|
Restricted due to
Outstanding Letters of Credit |
Available on
October 31, 2012
|
||||||||||||
Otter Tail Corporation Credit Agreement
|
$ | 150,000 | $ | -- | $ | 733 | $ | 149,267 | ||||||||
OTP Credit Agreement
|
170,000 | 5,464 | 3,175 |
161,361
|
||||||||||||
Total
|
$ | 320,000 | $ | 5,464 | $ | 3,908 | $ | 310,628 |
Intersegment Eliminations (in thousands)
|
Three Months Ended
September 30, 2012
|
Three Months Ended
September 30, 2011
|
||||||
Operating Revenues:
|
||||||||
Electric
|
$ | 46 | $ | 54 | ||||
Nonelectric
|
115 | 443 | ||||||
Cost of Goods Sold
|
148 | 461 | ||||||
Other Nonelectric Expenses
|
13 | 36 |
Three Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Retail Sales Revenue
|
$ | 74,622 | $ | 73,766 | $ | 856 | 1.2 | |||||||||
Wholesale Revenue – Company Generation
|
5,347 | 6,107 | (760 | ) | (12.4 | ) | ||||||||||
Net Revenue – Energy Trading Activity
|
241 | 592 | (351 | ) | (59.3 | ) | ||||||||||
Other Revenue
|
8,354 | 4,707 | 3,647 | 77.5 | ||||||||||||
Total Operating Revenues
|
$ | 88,564 | $ | 85,172 | $ | 3,392 | 4.0 | |||||||||
Production Fuel
|
20,622 | 19,080 | 1,542 | 8.1 | ||||||||||||
Purchased Power – System Use
|
8,138 | 7,488 | 650 | 8.7 | ||||||||||||
Other Operation and Maintenance Expenses
|
28,717 | 27,323 | 1,394 | 5.1 | ||||||||||||
Depreciation and Amortization
|
10,504 | 10,046 | 458 | 4.6 | ||||||||||||
Property Taxes
|
2,833 | 2,601 | 232 | 8.9 | ||||||||||||
Operating Income
|
$ | 17,750 | $ | 18,634 | $ | (884 | ) | (4.7 | ) |
Three Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
Electric kwh Sales (in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Retail kilowatt-hour (kwh) Sales
|
1,002,921 | 965,414 | 37,507 | 3.9 | ||||||||||||
Wholesale kwh Sales – Company Generation
|
170,589 | 168,579 | 2,010 | 1.2 | ||||||||||||
Wholesale kwh Sales – Purchased Power Resold
|
15,202 | 13,877 | 1,325 | 9.5 |
|
●
|
a $1.4 million increase in revenues related to a 3.9% increase in retail kwh sales, mainly to commercial customers,
|
|
●
|
a $1.4 million increase in revenue for the recovery of fuel and purchased power costs incurred to serve retail customers related to the increase in retail kwh sales,
|
|
●
|
a $0.5 million increase in transmission cost recovery rider revenues as a result of increased investment in transmission assets,
|
|
●
|
a $2.4 million decrease in revenue mainly related to rate design changes implemented in October 2011, in conjunction with Otter Tail Power Company’s (OTP) 2010 Minnesota general rate case, that shifted recovery of a portion of annual revenue requirements from summer to winter, reducing the amount of a seasonal rate differential in effect prior to October 2011.
|
Three Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Revenues
|
$ | 55,025 | $ | 52,595 | $ | 2,430 | 4.6 | |||||||||
Cost of Goods Sold
|
49,326 | 48,945 | 381 | 0.8 | ||||||||||||
Operating Expenses
|
2,182 | 2,294 | (112 | ) | (4.9 | ) | ||||||||||
Exit and Disposal Costs - DMI
|
4,400 | -- | 4,400 | -- | ||||||||||||
Depreciation and Amortization
|
742 | 2,822 | (2,080 | ) | (73.7 | ) | ||||||||||
Operating Loss
|
$ | (1,625 | ) | $ | (1,466 | ) | $ | (159 | ) | (10.8 | ) |
Three Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Operating Revenues
|
$ | 53,567 | $ | 55,625 | $ | (2,058 | ) | (3.7 | ) | |||||||
Cost of Goods Sold
|
41,835 | 42,977 | (1,142 | ) | (2.7 | ) | ||||||||||
Operating Expenses
|
5,797 | 6,049 | (252 | ) | (4.2 | ) | ||||||||||
Depreciation and Amortization
|
3,270 | 3,228 | 42 | 1.3 | ||||||||||||
Operating Income
|
$ | 2,665 | $ | 3,371 | $ | (706 | ) | (20.9 | ) |
|
●
|
Revenues at BTD Manufacturing, Inc. (BTD), our metal parts stamping and fabrication company, decreased $0.5 million due to a reduction in sales to energy related customers and less revenue from scrap-metal sales as a result of lower prices due to reduced demand for steel.
|
|
●
|
Revenues at T.O. Plastics, Inc. (T.O. Plastics), our manufacturer of thermoformed plastic and horticultural products, decreased by $0.2 million.
|
|
●
|
Revenues at ShoreMaster, Inc. (ShoreMaster), our waterfront equipment business, decreased $1.4 million mainly due mainly to a decrease in sales of commercial products.
|
|
●
|
Cost of goods sold at BTD decreased $0.4 million mainly as a result of decreased material costs related to lower steel prices and reduction in tooling costs for new products.
|
|
●
|
Cost of goods sold at T.O. Plastics decreased $0.6 million mainly as a result of improved productivity and efficiencies and more selective bidding practices, but also due to a decrease in costs associated with the decrease in sales.
|
|
●
|
Cost of goods sold at ShoreMaster decreased $0.1 million.
|
|
●
|
Operating expenses at BTD decreased $0.4 million due to reductions in incentive compensation and promotional expenses.
|
|
●
|
Operating expenses at T.O. Plastics were unchanged between the quarters.
|
|
●
|
Operating expenses at ShoreMaster increased $0.1 million between the quarters.
|
Three Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Operating Revenues
|
$ | 37,931 | $ | 53,247 | $ | (15,316 | ) | (28.8 | ) | |||||||
Cost of Goods Sold
|
36,184 | 49,740 | (13,556 | ) | (27.3 | ) | ||||||||||
Operating Expenses
|
3,105 | 3,063 | 42 | 1.4 | ||||||||||||
Depreciation and Amortization
|
550 | 523 | 27 | 5.2 | ||||||||||||
Operating Loss
|
$ | (1,908 | ) | $ | (79 | ) | $ | (1,829 | ) | -- |
|
●
|
Revenues at Foley Company, a mechanical and prime contractor on industrial projects, decreased $20.1 million due to a decrease in work volume and the effect of cost overruns on estimated revenues recognized under percentage-of-completion accounting.
|
|
●
|
Revenues at Aevenia, Inc. (Aevenia), our electrical design and construction services company, increased $4.8 million mainly as a result of an increase in electrical transmission, distribution and substation work in the oil patch region of western North Dakota.
|
|
●
|
Cost of goods sold at Foley Company decreased $16.3 million. The decrease reflects reductions in material and subcontractor costs due to a decrease in work volume, partially offset by the recognition of additional costs of $3.1 million in the third quarter of 2012 and $1.6 million in the third quarter of 2011, resulting from increases in estimated costs on certain projects in excess of previous period estimates under percentage-of-completion accounting.
|
|
●
|
Cost of goods sold at Aevenia increased $2.8 million as a result of the increase in electrical transmission, distribution and substation work. Improved performance resulted in an increase gross margin between the quarters at Aevenia.
|
Three Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Operating Revenues
|
$ | 42,217 | $ | 36,231 | $ | 5,986 | 16.5 | |||||||||
Cost of Goods Sold
|
31,506 | 29,956 | 1,550 | 5.2 | ||||||||||||
Operating Expenses
|
2,869 | 1,757 | 1,112 | 63.3 | ||||||||||||
Depreciation and Amortization
|
764 | 850 | (86 | ) | (10.1 | ) | ||||||||||
Operating Income
|
$ | 7,078 | $ | 3,668 | $ | 3,410 | 93.0 |
Three Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Operating Expenses
|
$ | 2,498 | $ | 5,987 | $ | (3,489 | ) | (58.3 | ) | |||||||
Depreciation and Amortization
|
121 | 135 | (14 | ) | (10.4 | ) |
Three Months Ended September 30,
|
||||||||
(in thousands)
|
2012
|
2011
|
||||||
Income Before Income Taxes – Continuing Operations
|
$ | 1,020 | $ | 9,718 | ||||
Add Back Canadian Losses not Subject to Income Tax Benefits
|
3,072 | 2,174 | ||||||
Income Before Income Taxes – Continuing Operations, Subject to Taxes
|
4,092 | 11,892 | ||||||
Income Tax Expense Computed at the Company’s Net Composite Federal and State Statutory Rate (39%)
|
1,596 | 4,638 | ||||||
Increases (Decreases) in Tax from:
|
||||||||
Federal Production Tax Credits (PTCs)
|
(1,239 | ) | (1,394 | ) | ||||
North Dakota Wind Tax Credit Amortization – Net of Federal Taxes
|
(297 | ) | (220 | ) | ||||
Medicare Part D Subsidy
|
(196 | ) | (165 | ) | ||||
Employee Stock Ownership Plan Dividend Deduction
|
(190 | ) | (192 | ) | ||||
Investment Tax Credit
|
(180 | ) | (214 | ) | ||||
Corporate Owned Life Insurance
|
(118 | ) | 85 | |||||
Section 199 - Domestic Production Activities Deduction
|
-- | (178 | ) | |||||
Accrual of Interest on Cost Capitalization Audit Issue
|
-- | 275 | ||||||
Other Items – Net
|
(234 | ) | (253 | ) | ||||
Income Tax (Benefit) Expense – Continuing Operations
|
$ | (858 | ) | $ | 2,382 | |||
Effective Income Tax Rate – Continuing Operations
|
(84.1 | )% | 24.5 | % |
For the Three Months
Ended September 30, |
||||||||
(in thousands)
|
2012
|
2011
|
||||||
Operating Revenues
|
$ | -- | $ | 33,385 | ||||
Operating Expenses
|
7 | 34,255 | ||||||
Operating Loss
|
(7 | ) | (870 | ) | ||||
Interest Charges
|
-- | 12 | ||||||
Other Income
|
-- | 61 | ||||||
Income Tax Benefit
|
(2 | ) | (307 | ) | ||||
Net Loss from Operations
|
(5 | ) | (514 | ) | ||||
Loss on Disposition Before Taxes
|
-- | (756 | ) | |||||
Income Tax Benefit on Disposition
|
-- | (302 | ) | |||||
Net Loss on Disposition
|
-- | (454 | ) | |||||
Net Loss
|
$ | (5 | ) | $ | (968 | ) |
(in thousands)
|
||||
Long-Lived Assets
|
$ | 90,846 | ||
Accumulated Depreciation – Long-lived Assets
|
(45,561 | ) | ||
Goodwill
|
288 | |||
Total Asset Impairment Charge
|
$ | 45,573 |
Intersegment Eliminations (in thousands)
|
Nine Months Ended
September 30, 2012 |
Nine Months Ended
September 30, 2011 |
||||||
Operating Revenues:
|
||||||||
Electric
|
$ | 165 | $ | 177 | ||||
Nonelectric
|
1,875 | 1,694 | ||||||
Cost of Goods Sold
|
1,923 | 1,561 | ||||||
Other Nonelectric Expenses
|
117 | 310 |
Nine Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Retail Sales Revenue
|
$ | 224,763 | $ | 224,371 | $ | 392 | 0.2 | |||||||||
Wholesale Revenue – Company Generation
|
9,454 | 12,406 | (2,952 | ) | (23.8 | ) | ||||||||||
Net Revenue – Energy Trading Activity
|
1,214 | 1,570 | (356 | ) | (22.7 | ) | ||||||||||
Other Revenue
|
22,099 | 16,452 | 5,647 | 34.3 | ||||||||||||
Total Operating Revenues
|
$ | 257,530 | $ | 254,799 | $ | 2,731 | 1.1 | |||||||||
Production Fuel
|
48,501 | 55,737 | (7,236 | ) | (13.0 | ) | ||||||||||
Purchased Power – System Use
|
34,624 | 27,759 | 6,865 | 24.7 | ||||||||||||
Other Operation and Maintenance Expenses
|
91,137 | 84,718 | 6,419 | 7.6 | ||||||||||||
Asset Impairment Charge
|
432 | -- | 432 | -- | ||||||||||||
Depreciation and Amortization
|
31,351 | 30,105 | 1,246 | 4.1 | ||||||||||||
Property Taxes
|
8,120 | 7,427 | 693 | 9.3 | ||||||||||||
Operating Income
|
$ | 43,365 | $ | 49,053 | $ | (5,688 | ) | (11.6 | ) |
Nine Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
Electric kwh Sales (in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Retail kwh Sales
|
3,115,055 | 3,223,064 | (108,009 | ) | (3.4 | ) | ||||||||||
Wholesale kwh Sales – Company Generation
|
337,344 | 414,635 | (77,291 | ) | (18.6 | ) | ||||||||||
Wholesale kwh Sales – Purchased Power Resold
|
80,234 | 106,610 | (26,376 | ) | (24.7 | ) |
|
●
|
a $2.6 million increase in transmission costs recovery rider revenue as a result of increased investment in transmission assets,
|
|
●
|
a $2.3 million increase in revenue mainly related to rate design changes implemented in Minnesota in October 2011 on finalization of OTP’s 2010 general rate case, and
|
|
●
|
a $1.8 million revenue reduction in the first half of 2011 related to accruing a refund for a portion of revenues collected under interim rates in 2010 during OTP’s most recent Minnesota rate case,
|
|
●
|
a $4.5 million decrease in revenue, mainly due to a 3.4% reduction in retail kwh sales resulting from significantly milder weather in the first half of 2012 as heating degree days were down 27.8% compared with the first half of 2011,
|
|
●
|
a $1.1 million reduction in accrued conservation program cost recovery revenue related to the timing of the recognition of conservation costs and incentives recovered through the Minnesota Conservation Improvement Program surcharge, and
|
|
●
|
a $0.7 million decrease in revenue related to the recovery of fuel and purchased power costs.
|
|
●
|
a $2.5 million increase in labor and benefit expenses mainly due to increases in pension and retirement health benefit costs resulting from a reduction in the discount rate related to projected benefit obligations,
|
|
●
|
a $2.5 million increase in MISO transmission service charges, mainly MISO Schedule 26 charges related to increased investment in transmission facilities by MISO member companies,
|
|
●
|
a $1.1 million increase in maintenance expenses at Coyote Station related to its second quarter 2012 seven-week scheduled major maintenance shutdown,
|
|
●
|
a $0.7 million increase in maintenance costs at Big Stone Plant, and
|
|
●
|
a $0.7 million increase in vegetation management expenses,
|
|
●
|
a $1.1 million reduction in incurred conservation program costs, commensurate with a reduction in accrued revenues related to the future recovery of those costs.
|
Nine Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Revenues
|
$ | 169,745 | $ | 154,608 | $ | 15,137 | 9.8 | |||||||||
Cost of Goods Sold
|
148,900 | 152,841 | (3,941 | ) | (2.6 | ) | ||||||||||
Operating Expenses
|
5,969 | 7,888 | (1,919 | ) | (24.3 | ) | ||||||||||
Asset Impairment Charge
|
45,573 | -- | 45,573 | -- | ||||||||||||
Exit and Disposal Costs - DMI
|
4,400 | -- | 4,400 | -- | ||||||||||||
Depreciation and Amortization
|
4,897 | 8,132 | (3,235 | ) | (39.8 | ) | ||||||||||
Operating Loss
|
$ | (39,994 | ) | $ | (14,253 | ) | $ | (25,741 | ) | (180.6 | ) |
Nine Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Operating Revenues
|
$ | 183,142 | $ | 168,306 | $ | 14,836 | 8.8 | |||||||||
Cost of Goods Sold
|
140,749 | 127,424 | 13,325 | 10.5 | ||||||||||||
Operating Expenses
|
19,688 | 16,648 | 3,040 | 18.3 | ||||||||||||
Depreciation and Amortization
|
9,685 | 9,630 | 55 | 0.6 | ||||||||||||
Operating Income
|
$ | 13,020 | $ | 14,604 | $ | (1,584 | ) | (10.8 | ) |
|
●
|
Revenues at BTD increased $18.5 million as a result of higher sales volume due to improved customer demand.
|
|
●
|
Revenues at T.O. Plastics increased $1.1 million due to increased sales of industrial and medical packaging products.
|
|
●
|
Revenues at ShoreMaster decreased $4.8 million, reflecting a $5.5 million decrease in commercial sales, partially offset by a $0.7 million increase in residential sales.
|
|
●
|
Cost of goods sold at BTD increased $15.0 million as a result of increased sales volume.
|
|
●
|
Cost of goods sold at T.O. Plastics increased $0.9 million as a result of costs associated with the increase in sales of industrial and medical packaging products, offset by a $1.1 million decrease in costs related to improved productivity and efficiencies and more selective bidding practices.
|
|
●
|
Cost of goods sold at ShoreMaster decreased $1.5 million as a result of a $2.3 million decrease in costs related to the reduction in commercial sales, offset by $0.8 million in severance and relocation costs incurred in 2012 related to shutting down ShoreMaster’s commercial production operations in Camdenton, Missouri and moving parts and equipment to its Fergus Falls, Minnesota and St. Augustine, Florida locations.
|
|
●
|
Operating expenses at BTD increased $1.6 million mainly due to increased benefit expenses related to employee incentives, but also due to increased salary and benefit expenses related to workforce expansion and increases in expenditures for contracted services and insurance.
|
|
●
|
Operating expenses at T.O. Plastics decreased $0.2 million between the periods, mainly due to decreases in labor and benefit expenses.
|
|
●
|
Operating expenses at ShoreMaster increased $1.6 million, reflecting a $0.6 million increase in expenses for outside professional services, a first quarter 2011 expense reduction of $0.7 million from the collection of a receivable written off as uncollectible prior to 2011, and a $0.2 million gain on a first quarter 2011 asset sale.
|
Nine Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Operating Revenues
|
$ | 111,482 | $ | 139,895 | $ | (28,413 | ) | (20.3 | ) | |||||||
Cost of Goods Sold
|
111,869 | 129,137 | (17,268 | ) | (13.4 | ) | ||||||||||
Operating Expenses
|
9,415 | 9,184 | 231 | 2.5 | ||||||||||||
Depreciation and Amortization
|
1,454 | 1,463 | (9 | ) | (0.6 | ) | ||||||||||
Operating (Loss) Income
|
$ | (11,256 | ) | $ | 111 | $ | (11,367 | ) | -- |
|
●
|
Revenues at Foley Company decreased $42.6 million, due to a decrease in work volume and the effect of cost overruns on estimated revenues recognized under percentage-of-completion accounting.
|
|
●
|
Revenues at Aevenia increased $14.2 million between the periods as a result an increase in electrical transmission, distribution and substation work in the oil patch region of western North Dakota, which was facilitated, in part, by better weather and improved access to construction sites in the first half of 2012 compared with the first half of 2011.
|
|
●
|
Cost of goods sold at Foley Company decreased $27.6 million. The decrease reflects reductions in material and subcontractor costs due to a decrease in work volume between periods, partially offset by the recognition of additional costs of $11.3 million in the nine months ended September 30, 2012 and $1.9 million in the nine months ended September 30, 2011, resulting from increases in estimated costs on certain projects in excess of previous period estimates under percentage-of-completion accounting.
|
|
●
|
Cost of goods sold at Aevenia increased $10.3 million between the periods as a result of the increase in electrical transmission, distribution and substation work.
|
Nine Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Operating Revenues
|
$ | 118,582 | $ | 99,082 | $ | 19,500 | 19.7 | |||||||||
Cost of Goods Sold
|
89,710 | 82,896 | 6,814 | 8.2 | ||||||||||||
Operating Expenses
|
6,560 | 4,414 | 2,146 | 48.6 | ||||||||||||
Depreciation and Amortization
|
2,362 | 2,517 | (155 | ) | (6.2 | ) | ||||||||||
Operating Income
|
$ | 19,950 | $ | 9,255 | $ | 10,695 | 115.6 |
Nine Months Ended
|
||||||||||||||||
September 30,
|
%
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
Change
|
Change
|
||||||||||||
Operating Expenses
|
$ | 9,603 | 11,380 | $ | (1,777 | ) | (15.6 | ) | ||||||||
Depreciation and Amortization
|
373 | 415 | (42 | ) | (10.1 | ) |
Nine Months Ended September 30,
|
||||||||
(in thousands)
|
2012
|
2011
|
||||||
(Loss) Income Before Income Taxes – Continuing Operations
|
$ | (20,571 | ) | $ | 21,209 | |||
Add Back Canadian Losses not Subject to Income Tax Benefits
|
4,440 | 8,954 | ||||||
(Loss) Income Before Income Taxes – Continuing Operations, Subject to Taxes
|
(16,131 | ) | 30,163 | |||||
Income Tax (Benefit) Expense Computed at the Company’s Net Composite Federal and State Statutory Rate (39%)
|
(6,291 | ) | 11,764 | |||||
Increases (Decreases) in Tax from:
|
||||||||
Federal PTCs
|
(5,057 | ) | (5,299 | ) | ||||
(Reversal) Accrual of Interest on Cost Capitalization Audit Issue
|
(676 | ) | 275 | |||||
North Dakota Wind Tax Credit Amortization – Net of Federal Taxes
|
(668 | ) | (775 | ) | ||||
Medicare Part D Subsidy
|
(587 | ) | (526 | ) | ||||
Employee Stock Ownership Plan Dividend Deduction
|
(571 | ) | (576 | ) | ||||
Canadian Revenue Authority Audit Settlement
|
-- | 156 | ||||||
Investment Tax Credit
|
(540 | ) | (641 | ) | ||||
Corporate Owned Life Insurance
|
(503 | ) | (181 | ) | ||||
Section 199 - Domestic Production Activities Deduction
|
-- | (573 | ) | |||||
Other Items - Net
|
(161 | ) | (89 | ) | ||||
Income Tax (Benefit) Expense – Continuing Operations
|
$ | (15,054 | ) | $ | 3,535 | |||
Effective Income Tax Rate – Continuing Operations
|
73.2 | % | 16.7 | % |
For the Nine Months
Ended September 30, |
||||||||
(in thousands)
|
2012
|
2011
|
||||||
Operating Revenues
|
$ | 16,352 | $ | 132,845 | ||||
Operating Expenses
|
14,935 | 133,598 | ||||||
Operating Income (Loss)
|
1,417 | (753 | ) | |||||
Interest Charges
|
147 | 43 | ||||||
Other Income
|
122 | 1,477 | ||||||
Income Tax Expense
|
571 | 261 | ||||||
Net Income from Operations
|
821 | 420 | ||||||
(Loss) Gain on Disposition Before Taxes
|
(3,713 | ) | 16,011 | |||||
Income Tax (Benefit) Expense on Disposition
|
(169 | ) | 3,213 | |||||
Net (Loss) Gain on Disposition
|
(3,544 | ) | 12,798 | |||||
Net (Loss) Income
|
$ | (2,723 | ) | $ | 13,218 |
(in thousands)
|
Line Limit
|
In Use on
September 30,
2012
|
Restricted due to
Outstanding
Letters of Credit
|
Available on
September 30,
2012
|
Available on
December 31,
2011
|
|||||||||||||||
Otter Tail Corporation Credit Agreement
|
$ | 200,000 | $ | -- | $ | 733 | $ | 199,267 | $ | 198,776 | ||||||||||
OTP Credit Agreement
|
170,000 | 12,417 | 3,050 | 154,533 | 165,950 | |||||||||||||||
Total
|
$ | 370,000 | $ | 12,417 | $ | 3,783 | $ | 353,800 | $ | 364,726 |
(in thousands)
|
Line Limit
|
In Use on
October 31,
2012
|
Restricted due to
Outstanding
Letters of Credit
|
Available on
October 31,
2012
|
||||||||||||
Otter Tail Corporation Credit Agreement
|
$ | 150,000 | $ | -- | $ | 733 | $ | 149,267 | ||||||||
OTP Credit Agreement
|
170,000 | 5,464 | 3,175 | 161,361 | ||||||||||||
Total
|
$ | 320,000 | $ | 5,464 | $ | 3,908 | $ | 310,628 |
●
|
Under the Otter Tail Corporation Credit Agreement, we may not permit the ratio of our Interest-bearing Debt to Total Capitalization to be greater than 0.60 to 1.00 or permit our Interest and Dividend Coverage Ratio to be less than 1.50 to 1.00 (each measured on a consolidated basis).
|
●
|
Under the OTP Credit Agreement, OTP may not permit the ratio of its Interest-bearing Debt to Total Capitalization to be greater than 0.60 to 1.00.
|
●
|
Under the 2007 Note Purchase Agreement, the 2011 Note Purchase Agreement and the financial guaranty insurance policy with Ambac Assurance Corporation relating to certain pollution control refunding bonds, OTP may not permit the ratio of its Consolidated Debt to Total Capitalization to be greater than 0.60 to 1.00 or permit its Interest and Dividend Coverage Ratio to be less than 1.50 to 1.00, in each case as provided in the related borrowing or insurance agreement. In addition, under the 2007 Note Purchase Agreement and the 2011 Note Purchase Agreement, OTP may not permit its Priority Debt to exceed 20% of its Total Capitalization, as provided in the related agreement.
|
Previous 2012 Earnings Per Share
Guidance Range
|
Updated 2012 Earnings Per Share
Guidance Range
|
|||||
Low
|
High
|
Low
|
High
|
|||
Electric
|
$1.00
|
$1.05
|
Electric
|
$1.01
|
$1.06
|
|
Manufacturing
|
$0.25
|
$0.30
|
Manufacturing
|
$0.18
|
$0.23
|
|
Construction
|
($0.18)
|
($0.13)
|
Construction
|
($0.23)
|
($0.18)
|
|
Plastics
|
$0.24
|
$0.29
|
Plastics
|
$0.32
|
$0.37
|
|
Corporate –Recurring Costs
|
($0.25)
|
($0.20)
|
Corporate –Recurring Costs
|
($0.22)
|
($0.17)
|
|
Subtotal
|
$1.06
|
$1.31
|
Subtotal
|
$1.06
|
$1.31
|
|
Corporate – Debt Extinguishment
|
($0.22)
|
($0.22)
|
Corporate – Debt Extinguishment
|
($0.22)
|
($0.22)
|
|
Total – Continuing Operations
|
$0.84
|
$1.09
|
Total – Continuing Operations
|
$0.84
|
$1.09
|
|
Discontinued Operations:
|
Discontinued Operations:
|
|||||
DMI Asset Impairment Charge
|
($0.81)
|
($0.76)
|
DMI Asset Impairment Charge
|
($0.76)
|
($0.76)
|
|
Net Loss from Disc. Ops.
|
($0.19)
|
($0.12)
|
Net Loss from Discontinued Operations
|
($0.24)
|
($0.19)
|
|
Total
|
($0.16)
|
$0.21
|
Total
|
($0.16)
|
$0.14
|
●
|
We expect net income in our Electric segment to be slightly improved over previous guidance.
|
●
|
We now expect 2012 earnings from our Manufacturing segment to be lower than previous guidance primarily due to lower earnings at ShoreMaster and BTD. Continued reductions in commercial revenues at ShoreMaster, along with higher than expected commercial operating expenses, are the primary reason for the revised outlook. BTD expects lower earnings compared to previous guidance due to reduction in sales volume at its Illinois plant and lower scrap prices for steel in the second half of 2012 compared with the first half of 2012. Backlog in place for the manufacturing companies is $50 million for 2012 compared with $34 million one year ago.
|
●
|
We expect a larger net loss from our Construction segment in 2012, compared with our previous guidance, due to the continued cost overruns incurred by Foley on certain major projects in 2012. Backlog in place for the construction businesses is $39 million for 2012 compared with $47 million one year ago.
|
●
|
We are increasing the earning guidance for our Plastics segment net income in 2012, compared with previous guidance, based on the strength of its performance in the first nine months of 2012 and current market conditions.
|
●
|
We expect corporate general and administrative costs to be slightly lower than previous guidance due to lower employee benefit costs and outside professional service costs.
|
●
|
We expect to complete a sale of our Wind Energy segment assets on November 30, 2012 and, therefore, expect DMI’s 2012 results to be included in discontinued operations. DMI has been able to stabilize production and improve productivity in 2012. Order backlog is expected to continue to generate revenues, earnings and cash flows for the remainder of 2012 but DMI’s 2012 noncash asset impairment charge and exit and disposal costs will have a negative impact on consolidated results in 2012.
|
●
|
We are subject to federal and state legislation, regulations and actions that may have a negative impact on our business and results of operations.
|
●
|
Federal and state environmental regulation could require us to incur substantial capital expenditures and increased operating costs.
|
●
|
Volatile financial markets and changes in our debt ratings could restrict our ability to access capital and could increase our borrowing costs and pension plan and postretirement health care expenses.
|
●
|
We rely on access to both short- and long-term capital markets as a source of liquidity for capital requirements not satisfied by cash flows from operations. If we are not able to access capital at competitive rates, our ability to implement our business plans may be adversely affected.
|
●
|
We may, from time to time, sell assets to provide capital to fund investments in our electric utility business or for other corporate purposes, which could result in the recognition of a loss on the sale of any assets sold. The sale of any of our businesses could expose us to additional risks associated with indemnification obligations under the applicable sales agreements and any related disputes.
|
●
|
We may experience fluctuations in revenues and expenses related to our operations, which may cause our financial results to fluctuate and could impair our ability to make distributions to our shareholders or scheduled payments on our debt obligations, or to meet covenants under our borrowing agreements.
|
●
|
Disruptions, uncertainty or volatility in the financial markets can also adversely impact our results of operations, the ability of our customers to finance purchases of goods and services, and our financial condition, as well as exert downward pressure on stock prices and/or limit our ability to sustain our current common stock dividend level.
|
●
|
We made a $10.0 million discretionary contribution to our defined benefit pension plan in January 2012. We could be required to contribute additional capital to the pension plan in the future if the market value of pension plan assets significantly declines, plan assets do not earn in line with our long-term rate of return assumptions or relief under the Pension Protection Act is no longer granted.
|
●
|
Any significant impairment of our goodwill would cause a decrease in our asset values and a reduction in our net operating income.
|
●
|
We currently have $7.3 million of goodwill and a $1.1 million indefinite-lived trade name recorded on our balance sheet related to the acquisition of Foley Company in 2003. Foley Company has generated a large operating loss for the nine months ended September 30, 2012 due to significant cost overruns on certain construction projects. If operating margins do not improve according to our projections, the reductions in anticipated cash flows from Foley Company may indicate that its fair value is less than its book value, resulting in an impairment of some or all of the goodwill and indefinite-lived intangible assets associated with Foley along with a corresponding charge against earnings.
|
●
|
A sustained decline in our common stock price below book value or declines in projected operating cash flows at any of our operating companies may result in goodwill impairments that could adversely affect our results of operations and financial position, as well as financing agreement covenants.
|
●
|
The inability of our subsidiaries to provide sufficient earnings and cash flows to allow us to meet our financial obligations and debt covenants and pay dividends to our shareholders could have an adverse effect on us.
|
●
|
Economic conditions could negatively impact our businesses.
|
●
|
If we are unable to achieve the organic growth we expect, our financial performance may be adversely affected.
|
●
|
Our plans to grow and realign our diversified business mix through capital projects, acquisitions and dispositions may not be successful, which could result in poor financial performance.
|
●
|
Our plans to grow and operate businesses outside of our electric utility, while also owning a regulated utility, could be limited by state law.
|
●
|
Our subsidiaries enter into production and construction contracts, including contracts for new product designs, which could expose them to unforeseen costs and costs not within their control, which may not be recoverable and could adversely affect our results of operations and financial condition.
|
●
|
Significant warranty claims and remediation costs in excess of amounts normally reserved for such items could adversely affect our results of operations and financial condition.
|
●
|
We are subject to risks associated with energy markets.
|
●
|
We are subject to risks and uncertainties related to the timing and recovery of deferred tax assets which could have a negative impact on our net income in future periods.
|
●
|
Certain of our operating companies sell products to consumers that could be subject to recall.
|
●
|
Competition is a factor in all of our businesses.
|
●
|
We rely on our information systems to conduct our business, and failure to protect these systems against security breaches could adversely affect our business and results of operations. Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed.
|
●
|
Actions by the regulators of our electric operations could result in rate reductions, lower revenues and earnings or delays in recovering capital expenditures.
|
●
|
OTP’s electric generating facilities are subject to operational risks that could result in unscheduled plant outages, unanticipated operation and maintenance expenses and increased power purchase costs.
|
●
|
Changes to regulation of generating plant emissions, including but not limited to carbon dioxide (CO2) emissions, could affect OTP’s operating costs and the costs of supplying electricity to its customers.
|
●
|
Competition from foreign and domestic manufacturers, cost management in a fixed price contract project environment, the price and availability of raw materials, the ability of suppliers to deliver materials at contracted prices, fluctuations in foreign currency exchange rates and general economic conditions could affect the revenues and earnings of our manufacturing businesses. |
●
|
A significant failure or an inability to properly bid or perform on projects by our wind energy, construction or manufacturing businesses could lead to adverse financial results and could lead to the possibility of delay or liquidated damages.
|
Our Plastics segment is highly dependent on a limited number of vendors for PVC resin, many of which are located in the Gulf Coast regions, and a limited supply of resin. The loss of a key vendor, or an interruption or delay in the supply of PVC resin, could result in reduced sales or increased costs for this segment.
|
●
|
Our plastic pipe companies compete against a large number of other manufacturers of PVC pipe and manufacturers of alternative products. Customers may not distinguish the pipe companies’ products from those of its competitors.
|
●
|
Reductions in PVC resin prices can negatively impact PVC pipe prices, profit margins on PVC pipe sales and the value of PVC pipe held in inventory.
|
(in thousands)
|
September 30, 2012
|
December 31, 2011
|
||||||
Other Current Asset – Derivative Asset
|
$ | 2,219 | $ | 3,803 | ||||
Regulatory Asset – Current Deferred Marked-to-Market Loss
|
6,722 | 5,208 | ||||||
Regulatory Asset – Long-Term Deferred Marked-to-Market Loss
|
11,170 | 10,749 | ||||||
Total Assets
|
20,111 | 19,760 | ||||||
Derivative Liability
|
(18,869 | ) | (18,770 | ) | ||||
Regulatory Liability – Current Deferred Marked-to-Market Gain
|
(24 | ) | (96 | ) | ||||
Regulatory Liability – Long-Term Deferred Marked-to-Market Gain
|
(1,259 | ) | -- | |||||
Total Liabilities
|
(20,152 | ) | (18,866 | ) | ||||
Fair Value Adjustments Included in Earnings
|
$ | (41 | ) | $ | 894 |
(in thousands)
|
Year-to-Date
September 30, 2012
|
Year-to-Date
September 30, 2011
|
||||||
Cumulative Fair Value Adjustments Included in Earnings - Beginning of Year
|
$ | 894 | $ | 763 | ||||
Less: Amounts Realized on Settlement of Contracts Entered into in Prior Periods
|
(781 | ) | (253 | ) | ||||
Changes in Fair Value of Contracts Entered into in Prior Periods
|
(33 | ) | (86 | ) | ||||
Cumulative Fair Value Adjustments in Earnings of Contracts Entered into in Prior Years at End of Period
|
80 | 424 | ||||||
Changes in Fair Value of Contracts Entered into in Current Period
|
(121 | ) | 550 | |||||
Cumulative Fair Value Adjustments Included in Earnings - End of Period
|
$ | (41 | ) | $ | 974 |
(in thousands)
|
4th Qtr
2012
|
1st Qtr
2013
|
Total
|
|||||||||
Net (Loss) Gain
|
$ | (44 | ) | $ | 3 | $ | (41 | ) |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Net Gains (Losses) on Forward Electric Energy Contracts
|
$ | (274 | ) | $ | 456 | $ | (130 | ) | $ | 587 |
Exhibits
|
||
31.1
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
10.1
|
Otter Tail Corporation Executive Restoration Plus Plan (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed by Otter Tail Corporation on August 9, 2012).
|
|
101.INS
|
XBRL Instance Document.
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
OTTER TAIL CORPORATION | |||
By: | /s/ Kevin G. Moug | ||
Kevin G. Moug Chief Financial Officer |
|||
(Chief Financial Officer/Authorized Officer) | |||
Exhibit Number
|
Description | |
31.1
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
10.1
|
Otter Tail Corporation Executive Restoration Plus Plan (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed by Otter Tail Corporation on August 9, 2012).
|
|
101.INS
|
XBRL Instance Document.
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
/s/ Edward J. McIntyre | |
Edward J. McIntyre | |
President and Chief Executive Officer
|
/s/ Kevin G. Moug | |
Kevin G. Moug | |
Chief Financial Officer
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Edward J. McIntyre | |
Edward J. McIntyre
President and Chief Executive Officer
November 9, 2012
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Kevin G. Moug | |
Kevin G. Moug
Chief Financial Officer
November 9, 2012
|
Costs and Estimated Earnings in Excess of Billings (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Uncompleted Contracts [Line Items] | ||
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts - DMI | $ 23,900 | $ 67,109 |
DMI Industries, Inc
|
||
Uncompleted Contracts [Line Items] | ||
Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts - DMI | $ 17,609 | $ 54,541 |
Segment Information - Additional Information (Detail)
|
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2012
Segments
|
Dec. 31, 2011
Wind Energy
|
|
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 5 | |
Percentage of revenue by one customer | 10.80% |
Amortization Expense for Intangible Assets (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Summary Of Significant Accounting Policies [Abstract] | ||||
Amortization Expense - Intangible Assets | $ 244 | $ 215 | $ 737 | $ 657 |
Share-Based Payments - Additional Information (Detail) (USD $)
In Millions, except Share data, unless otherwise specified |
9 Months Ended | 0 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2012
Programs
|
Apr. 16, 2012
Performance Shares
Executive Officer
|
Apr. 16, 2012
Performance Shares
Maximum
Executive Officer
|
Apr. 16, 2012
Performance Shares
Minimum
Executive Officer
|
Sep. 30, 2012
Restricted Stock Units (RSUs)
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of share-based payment programs | 5 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 161,600 | ||||
Aggregate target common shares award | 80,800 | ||||
Percentage of actual payment of the target amount | 200.00% | 0.00% | |||
Share-based compensation arrangement by share-based bayment award, award vesting period | 4 years | ||||
Unrecognized amount of compensation expense related to stock-based compensation | $ 3.7 | ||||
Weighted-average period of amortization | 2 years 6 months |
Rate and Regulatory Matters (Detail) (USD $)
|
9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 1 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
|
Sep. 30, 2012
Otter Tail Power Company
Conservation Improvement Program
Minimum
|
Sep. 30, 2012
Otter Tail Power Company
Renewable Resource Cost Recovery Rider
Fiscal Year 2012
|
Sep. 30, 2012
Otter Tail Power Company
Renewable Resource Cost Recovery Rider
Fiscal Year 2016
|
Sep. 30, 2012
Otter Tail Power Company
Renewable Resource Cost Recovery Rider
Fiscal Year 2020
|
Sep. 30, 2012
Otter Tail Power Company
Renewable Resource Cost Recovery Rider
Fiscal Year 2025
|
Sep. 30, 2012
Otter Tail Power Company
Capacity Expansion 2020
Projects
Investors
|
Sep. 30, 2012
Otter Tail Power Company
Fargo Project
Capacity Expansion 2020
kv
|
Sep. 30, 2012
Otter Tail Power Company
Big Stone Project
Air Quality Control
|
Sep. 30, 2012
Otter Tail Power Company
Brookings Project
Capacity Expansion 2020
kv
|
Sep. 30, 2012
Otter Tail Power Company
Bemidji Project
Capacity Expansion 2020
kV
|
Sep. 30, 2012
Otter Tail Power Company
Twin Cities La Crosse
Capacity Expansion 2020
kV
|
Sep. 30, 2012
Otter Tail Power Company
Minnesota Public Utilities Commission
Transmission Cost Recovery Rider
Projects
|
Sep. 30, 2012
Otter Tail Power Company
Minnesota Public Utilities Commission
Conservation Improvement Program
|
Sep. 30, 2011
Otter Tail Power Company
Minnesota Public Utilities Commission
Conservation Improvement Program
|
Sep. 30, 2012
Otter Tail Power Company
Minnesota Public Utilities Commission
Conservation Improvement Program
|
Sep. 30, 2011
Otter Tail Power Company
Minnesota Public Utilities Commission
Conservation Improvement Program
|
Mar. 30, 2012
Otter Tail Power Company
Minnesota Public Utilities Commission
Conservation Improvement Program
|
Jan. 11, 2012
Otter Tail Power Company
Minnesota Public Utilities Commission
Conservation Improvement Program
|
Dec. 31, 2011
Otter Tail Power Company
Minnesota Public Utilities Commission
Conservation Improvement Program
|
Sep. 30, 2012
Otter Tail Power Company
Minnesota Public Utilities Commission
Renewable Energy Standards Conservation Renewable Resource Riders Converted At Base Rate
|
Apr. 25, 2011
Otter Tail Power Company
Minnesota Public Utilities Commission
General Rate Case
Properties
|
Dec. 31, 2011
Otter Tail Power Company
Minnesota Public Utilities Commission
General Rate Case
|
Apr. 02, 2010
Otter Tail Power Company
Minnesota Public Utilities Commission
General Rate Case
|
Sep. 30, 2012
Otter Tail Power Company
Minnesota Public Utilities Commission
Luverne Wind Farm Project
Renewable Resource Cost Recovery Rider
|
Jan. 12, 2010
Otter Tail Power Company
Minnesota Public Utilities Commission
Luverne Wind Farm Project
Renewable Resource Cost Recovery Rider
|
Sep. 30, 2012
Otter Tail Power Company
North Dakota Public Service Commission
Transmission Cost Recovery Rider
|
Sep. 30, 2012
Otter Tail Power Company
North Dakota Public Service Commission
Renewable Resource Cost Recovery Rider
|
Dec. 29, 2011
Otter Tail Power Company
North Dakota Public Service Commission
Renewable Resource Cost Recovery Rider
|
Sep. 30, 2010
Otter Tail Power Company
North Dakota Public Service Commission
Renewable Resource Cost Recovery Rider
|
Sep. 30, 2012
Otter Tail Power Company
South Dakota Public Utilities Commission
Transmission Cost Recovery Rider
|
Apr. 21, 2011
Otter Tail Power Company
South Dakota Public Utilities Commission
General Rate Case
|
Sep. 28, 2010
Otter Tail Power Company
South Dakota Public Utilities Commission
General Rate Case
|
Aug. 20, 2010
Otter Tail Power Company
South Dakota Public Utilities Commission
General Rate Case
|
Aug. 20, 2010
Otter Tail Power Company
South Dakota Public Utilities Commission
General Rate Case
Maximum
|
Sep. 30, 2012
Otter Tail Power Company
Federal Energy Regulatory Commission
Projects
|
Dec. 31, 2010
Otter Tail Power Company
Federal Energy Regulatory Commission
Projects
|
|
Regulatory Matters [Line Items] | ||||||||||||||||||||||||||||||||||||||
General rate increase request | 8.01% | |||||||||||||||||||||||||||||||||||||
General rate revenue increase percentage description | under 10.0% | |||||||||||||||||||||||||||||||||||||
Number of days the proposed rates are suspended for review | 180 days | 1 day | ||||||||||||||||||||||||||||||||||||
Interim rate increase request | 3.80% | |||||||||||||||||||||||||||||||||||||
General rate revenue increase approved | $ 5,000,000 | $ 643,000 | ||||||||||||||||||||||||||||||||||||
Percentage of general rate revenue increase approved | 3.76% | 2.32% | ||||||||||||||||||||||||||||||||||||
Big Stone II Investment cost incurred, recovery period | 5 years | |||||||||||||||||||||||||||||||||||||
Number of transmission lines approved for transfer of investments from rider recovery to base rate recovery | 2 | |||||||||||||||||||||||||||||||||||||
Public utilities overall approximate rate increase to customers | 1.60% | |||||||||||||||||||||||||||||||||||||
Public utilities interim rate increase approved | 3.80% | |||||||||||||||||||||||||||||||||||||
Refundable interim rate difference to customers | 3,900,000 | |||||||||||||||||||||||||||||||||||||
Public utilities allowed rate of return prior to approval of increase in base rate | 8.33% | |||||||||||||||||||||||||||||||||||||
Public utilities allowed rate of return subsequent to approval of increase in base rate | 8.61% | 8.50% | ||||||||||||||||||||||||||||||||||||
Public utilities allowed rate of return on equity prior to approval of increase in base rate | 10.43% | |||||||||||||||||||||||||||||||||||||
Public utilities allowed rate of return on equity subsequent to approval of increase in base rate | 10.74% | |||||||||||||||||||||||||||||||||||||
Long term debt as percentage of aggregate capital used for computation of entitys rate of return | 48.28% | |||||||||||||||||||||||||||||||||||||
Common equity as percentage of aggregate capital used for computation of entitys rate of return | 51.72% | |||||||||||||||||||||||||||||||||||||
Percentage of qualifying renewable energy to be supplied in proportion to aggregate energy supplies | 12.00% | 17.00% | 20.00% | 25.00% | ||||||||||||||||||||||||||||||||||
Regulatory asset | 138,621,000 | 151,528,000 | 5,500,000 | 5,500,000 | 1,400,000 | 600,000 | 1,900,000 | |||||||||||||||||||||||||||||||
Regulatory Liabilities - Total | 69,824,000 | 69,290,000 | 300,000 | 100,000 | ||||||||||||||||||||||||||||||||||
Number of additional transmission related projects | 12 | |||||||||||||||||||||||||||||||||||||
Extended period of new effective rate | 18 months | |||||||||||||||||||||||||||||||||||||
Current balance of unrecovered costs due to extended period for new rate | 0 | |||||||||||||||||||||||||||||||||||||
Expected cost recovery from customers | 17,000,000 | 10,100,000 | 15,600,000 | |||||||||||||||||||||||||||||||||||
Surcharge revenues and financial incentives recognized during period | 1,500,000 | 1,100,000 | 4,800,000 | 5,900,000 | ||||||||||||||||||||||||||||||||||
Percentage of operating revenue from service to be invested in energy conservation | 1.50% | |||||||||||||||||||||||||||||||||||||
Financial incentive filing request | 2,600,000 | |||||||||||||||||||||||||||||||||||||
Financial incentives approved | 2,600,000 | 3,500,000 | ||||||||||||||||||||||||||||||||||||
Conservation improvement programs surcharge | 3.80% | 3.00% | ||||||||||||||||||||||||||||||||||||
General rate revenue increase request | $ 2,800,000 | |||||||||||||||||||||||||||||||||||||
Percentage of prudently incurred costs of construction work in progress, authorized for recovery by formula transmission rate | 100.00% | 100.00% | ||||||||||||||||||||||||||||||||||||
Percentage of prudently incurred costs of cancelled or abandoned transmission facilities, authorized for recovery by formula transmission rate | 100.00% | |||||||||||||||||||||||||||||||||||||
Number of projects authorized for recovery of costs if abandoned | 2 | 3 | ||||||||||||||||||||||||||||||||||||
Number of investor | 11 | |||||||||||||||||||||||||||||||||||||
Number of major transmission projects | 4 | |||||||||||||||||||||||||||||||||||||
Expanded capacity of projects | 345 | 345 | 230 | 345 | ||||||||||||||||||||||||||||||||||
BART compliant air quality control system implementation period | 5 years | |||||||||||||||||||||||||||||||||||||
Required percentage of total retail revenues from customers as proposed surcharge | 3.10% |
Fair Value of Financial Instruments (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Carrying Amount
|
||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Cash and Cash Equivalents | $ 14,652 | |
Long-Term Debt (including current maturities) | (421,898) | (474,948) |
Fair Value
|
||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Cash and Cash Equivalents | 14,652 | |
Long-Term Debt (including current maturities) | $ (492,431) | $ (528,074) |
Income Tax Expense - Continuing Operations (Tables)
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Expense (Benefit) - Continuing Operations Effective Income Tax Rate | The following table provides a reconciliation of income tax expense calculated at the net composite federal and state statutory rate on income from continuing operations before income taxes and income tax expense for continuing operations reported on the Company’s consolidated statements of income for the three and nine month periods ended September 30, 2012 and 2011:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized activity related to unrecognized tax benefits | The following table summarizes the activity related to our unrecognized tax benefits:
|
Breakdown of Assignment of Consolidated Short-Term and Long-Term Debt Outstanding (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
|||
---|---|---|---|---|---|
Debt Instrument [Line Items] | |||||
Short-Term Debt | $ 12,417 | ||||
Long-Term Debt | 421,902 | 474,952 | |||
Less: Current Maturities | 173 | 3,033 | |||
Unamortized Debt Discount | 4 | 4 | |||
Total Long-Term Debt | 421,725 | 471,915 | |||
Total Short-Term and Long-Term Debt (with current maturities) | 434,315 | 474,948 | |||
9.000% Notes, due December 15, 2016
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 100,000 | 100,000 | |||
Senior Unsecured Notes 5.95%, Series A, due August 20, 2017
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 33,000 | 33,000 | |||
Grant County, South Dakota Pollution Control Refunding Revenue Bonds 4.65%, due September 1, 2017
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 5,065 | 5,090 | |||
Senior Unsecured Note 8.89%, due November 30, 2017
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | [1] | 50,000 | |||
Senior Unsecured Notes 4.63 Percent Due December 1, 2021
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 140,000 | 140,000 | |||
Senior Unsecured Notes 6.15%, Series B, due August 20, 2022
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 30,000 | 30,000 | |||
Mercer County, North Dakota Pollution Control Refunding Revenue Bonds 4.85%, due September 1, 2022
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 20,070 | 20,105 | |||
Senior Unsecured Notes 6.37%, Series C, due August 20, 2027
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 42,000 | 42,000 | |||
Senior Unsecured Notes 6.47%, Series D, due August 20, 2037
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 50,000 | 50,000 | |||
Other Obligations - Various up to 3.95%
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 1,767 | 4,757 | |||
Otter Tail Power Company
|
|||||
Debt Instrument [Line Items] | |||||
Short-Term Debt | 12,417 | ||||
Long-Term Debt | 320,135 | 320,195 | |||
Less: Current Maturities | |||||
Unamortized Debt Discount | |||||
Total Long-Term Debt | 320,135 | 320,195 | |||
Total Short-Term and Long-Term Debt (with current maturities) | 332,552 | 320,195 | |||
Otter Tail Power Company | Senior Unsecured Notes 5.95%, Series A, due August 20, 2017
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 33,000 | 33,000 | |||
Otter Tail Power Company | Grant County, South Dakota Pollution Control Refunding Revenue Bonds 4.65%, due September 1, 2017
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 5,065 | 5,090 | |||
Otter Tail Power Company | Senior Unsecured Notes 4.63 Percent Due December 1, 2021
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 140,000 | 140,000 | |||
Otter Tail Power Company | Senior Unsecured Notes 6.15%, Series B, due August 20, 2022
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 30,000 | 30,000 | |||
Otter Tail Power Company | Mercer County, North Dakota Pollution Control Refunding Revenue Bonds 4.85%, due September 1, 2022
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 20,070 | 20,105 | |||
Otter Tail Power Company | Senior Unsecured Notes 6.37%, Series C, due August 20, 2027
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 42,000 | 42,000 | |||
Otter Tail Power Company | Senior Unsecured Notes 6.47%, Series D, due August 20, 2037
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 50,000 | 50,000 | |||
Varistar Corporation
|
|||||
Debt Instrument [Line Items] | |||||
Short-Term Debt | |||||
Long-Term Debt | 2,868 | ||||
Less: Current Maturities | 2,868 | ||||
Unamortized Debt Discount | |||||
Total Long-Term Debt | |||||
Total Short-Term and Long-Term Debt (with current maturities) | 2,868 | ||||
Varistar Corporation | Other Obligations - Various up to 3.95%
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 2,868 | ||||
Otter Tail Corporation
|
|||||
Debt Instrument [Line Items] | |||||
Short-Term Debt | |||||
Long-Term Debt | 101,767 | 151,889 | |||
Less: Current Maturities | 173 | 165 | |||
Unamortized Debt Discount | 4 | 4 | |||
Total Long-Term Debt | 101,590 | 151,720 | |||
Total Short-Term and Long-Term Debt (with current maturities) | 101,763 | 151,885 | |||
Otter Tail Corporation | 9.000% Notes, due December 15, 2016
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | 100,000 | 100,000 | |||
Otter Tail Corporation | Senior Unsecured Note 8.89%, due November 30, 2017
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | [1] | 50,000 | |||
Otter Tail Corporation | Other Obligations - Various up to 3.95%
|
|||||
Debt Instrument [Line Items] | |||||
Long-Term Debt | $ 1,767 | $ 1,889 | |||
|
Regulatory Assets and Liabilities - Additional Information (Detail)
|
9 Months Ended |
---|---|
Sep. 30, 2012
|
|
Debt Reacquisition Premiums
|
|
Schedule of Regulatory Assets and Liabilities [Line Items] | |
Regulatory Assets - Long Term, Remaining Recovery/Refund Period | 240 months |
South Dakota - Nonasset-Based Margin Sharing Excess
|
|
Schedule of Regulatory Assets and Liabilities [Line Items] | |
Share of actual profit margins on nonasset-based wholesale sales of electricity | 25.00% |
Stock Incentive Awards (Detail) (USD $)
|
1 Months Ended | 0 Months Ended | 1 Months Ended |
---|---|---|---|
Oct. 31, 2012
Performance Shares
Executive Officer
Subsequent Event
|
Apr. 16, 2012
Restricted Stock Units (Rsus)
Employees
|
Oct. 31, 2012
Restricted Stock Units (Rsus)
Employees
Subsequent Event
|
|
Subsequent Event [Line Items] | |||
Shares/Units Granted | 1,620 | 12,800 | 3,000 |
Grant-Date Fair Value per Share | $ 23.93 | $ 17.14 | $ 19.87 |
Vesting Percentage | 25.00% | 100.00% | 100.00% |
Vesting Date | April 8th of each year 2013 - 2016 | April 8, 2016 | April 8, 2016 |
Income Tax Expense - Continuing Operations Unrecognized tax benefits (Detail) (USD $)
In Thousands, unless otherwise specified |
9 Months Ended |
---|---|
Sep. 30, 2012
|
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Balance on January 1 | $ 12,138 |
Increases Related to Tax Positions for Prior Years | |
Uncertain Positions Resolved During Year | (8,354) |
Balance on September 30 | $ 3,784 |
OTP's renewed and extended lines of credit (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
Sep. 30, 2012
Otter Tail Corporation Credit Agreement
|
Dec. 31, 2011
Otter Tail Corporation Credit Agreement
|
Sep. 30, 2012
OTP Credit Agreement
|
Dec. 31, 2011
OTP Credit Agreement
|
Oct. 31, 2012
Subsequent Event
|
Oct. 31, 2012
Subsequent Event
Otter Tail Corporation Credit Agreement
Unsecured revolving credit facility
|
Oct. 31, 2012
Subsequent Event
OTP Credit Agreement
Unsecured revolving credit facility
|
---|---|---|---|---|---|---|---|---|---|
Subsequent Event [Line Items] | |||||||||
Line Limit | $ 370,000 | $ 200,000 | $ 170,000 | $ 320,000 | $ 150,000 | $ 170,000 | |||
In Use | 12,417 | 12,417 | 5,464 | 5,464 | |||||
Restricted due to Outstanding Letters of Credit | 3,783 | 733 | 3,050 | 3,908 | 733 | 3,175 | |||
Available | $ 353,800 | $ 364,726 | $ 199,267 | $ 198,776 | $ 154,533 | $ 165,950 | $ 310,628 | $ 149,267 | $ 161,361 |
Pension Plan and Other Postretirement Benefits - Additional Information (Detail) (USD $)
|
1 Months Ended | |
---|---|---|
Jan. 31, 2012
|
Dec. 31, 2011
|
|
Compensation and Retirement Disclosure [Abstract] | ||
Funding requirement, minimum | $ 3,015,000 | |
Plan contribution | $ 10,000,000 |
Commitments and Contingencies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified |
1 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
Otter Tail Power Company
Construction and Other Purchase Commitments
|
Sep. 30, 2012
Otter Tail Power Company
Construction and Other Purchase Commitments
|
Sep. 30, 2012
Otter Tail Power Company
Capacity and Energy Requirements
|
Sep. 30, 2012
Otter Tail Power Company
Coal and Freight Purchase Commitments
|
Sep. 30, 2012
Otter Tail Power Company
Coal and Freight Purchase Commitments
Minimum
|
Sep. 30, 2012
Otter Tail Power Company
Coal and Freight Purchase Commitments
Maximum
|
|
Commitments and Contingencies Disclosure [Line Items] | |||||||
Long-term Purchase Commitment, Amount | $ 41.0 | $ 27.0 | $ 710.0 | ||||
Additional construction and other purchase commitments, due in remainder of 2012 | 16.5 | ||||||
Construction and other purchase commitments, due in 2013 | 25.3 | ||||||
Construction and other purchase commitments, due in 2014 | 5.2 | ||||||
Construction and other purchase commitments, due in 2015 | 19.9 | ||||||
Contracts expiration year | 2032 | 2012 | 2040 | ||||
Loss Contingency, range of possible loss, maximum | $ 8.0 |
Segment Information (Tables)
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percent of Sales Revenue by Country | The following table presents the percent of consolidated sales revenue by country:
|
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Information on Continuing Operations for Business Segments | 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 and nine month periods ended September 30, 2012 and total assets by business segment as of September 30, 2012 and December 31, 2011 are presented in the following tables:
Operating Revenue
Interest Expense
Income Taxes
Earnings Available for Common Shares
Identifiable Assets
|
Supplemental Disclosure of Cash Flow Information (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Sep. 30, 2011
|
||||
---|---|---|---|---|---|---|
Summary Of Significant Accounting Policies [Abstract] | ||||||
Accounts Payable Outstanding Related to Capital Additions1 | $ 5,979 | [1] | $ 2,878 | [1] | ||
|
Amounts of Accounts Receivable Sold and Discounts, Fees and Commissions Paid (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Receivables [Line Items] | ||||
Accounts Receivable Sold | $ 20,662 | $ 32,115 | $ 48,802 |
Short Term and Long Term Borrowings - Additional Information (Detail) (USD $)
|
0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|---|---|---|---|
Jul. 13, 2012
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
Jul. 13, 2012
8.89% Senior Unsecured Note due November 30, 2017
|
Sep. 30, 2012
Grant County, South Dakota Pollution Control Refunding Revenue Bonds 4.65%, due September 1, 2017
|
Sep. 30, 2012
Mercer County, North Dakota Pollution Control Refunding Revenue Bonds 4.85%, due September 1, 2022
|
Sep. 30, 2012
ShoreMaster, Inc.
|
Dec. 31, 2011
Cascade Investment, L.L.C. (Cascade)
8.89% Senior Unsecured Note due November 30, 2017
|
|
Debt Instrument [Line Items] | ||||||||||
Repayment of capital lease obligation | $ 2,800,000 | |||||||||
Effective interest rate during the period pursuant to the Note Purchase Agreement | 8.89% | |||||||||
Aggregate price paid pursuant to the Note Purchase Agreement | 63,031,000 | |||||||||
Accrued interest pursuant to the Note Purchase Agreement | 531,000 | |||||||||
Negotiated prepayment premium pursuant to the Note Purchase Agreement | 12,500,000 | |||||||||
Unamortized debt expense recognized pursuant to the Note Purchase Agreement | 606,000 | |||||||||
Income (loss) from continuing operations per diluted share | $ (0.22) | $ 0.05 | $ 0.20 | $ (0.17) | $ 0.47 | |||||
Ownership interest in parent by cascade | 9.60% | |||||||||
Prepayment of long-term debt | $ 50,000,000 | $ 25,000 | $ 35,000 |
Summary of Costs Incurred and Billings and Estimated Earnings Recognized on Uncompleted Contracts (Detail) (USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Summary Of Significant Accounting Policies [Abstract] | ||
Costs Incurred on Uncompleted Contracts | $ 448,039 | $ 583,346 |
Less Billings to Date | (454,803) | (550,070) |
Plus Estimated Earnings Recognized | 17,091 | 24,478 |
Net Costs Incurred in Excess of Billings and Accrued Revenues on Uncompleted Contracts | $ 10,327 | $ 57,754 |
Percent of Sales Revenue by Country (Detail)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
United States of America
|
||||
Segment Reporting Information [Line Items] | ||||
Percentage of sales revenue | 98.10% | 98.20% | 97.80% | 98.30% |
Canada
|
||||
Segment Reporting Information [Line Items] | ||||
Percentage of sales revenue | 1.00% | 1.30% | 1.40% | 1.40% |
All Other Countries
|
||||
Segment Reporting Information [Line Items] | ||||
Percentage of sales revenue | 0.90% | 0.50% | 0.80% | 0.30% |
Realized and Unrealized Net (Losses)/Gains on Forward Energy Contracts Included in Electric Operating Revenues (Detail) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Net Gains (Losses) on Forward Electric Energy Contracts | $ (274) | $ 456 | $ (130) | $ 587 |
Segment Information
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | 2. Segment Information
The Company’s businesses have been classified into five reportable segments to be consistent with its business strategy and the reporting and review process used by the Company’s chief operating decision makers. These businesses sell products and provide services to customers primarily in the United States. The five segments are: Electric, Wind Energy, Manufacturing, Construction and Plastics.
Electric includes the production, transmission, distribution and sale of electric energy in Minnesota, North Dakota and South Dakota by OTP. In addition, OTP is an active wholesale participant in the Midwest Independent Transmission System Operator (MISO) markets. OTP’s operations have been the Company’s primary business since 1907. Additionally, the electric segment includes Otter Tail Energy Services Company (OTESCO), which provides technical and engineering services.
Wind Energy consists of DMI, a steel fabrication company primarily involved in the production of wind towers sold in the United States and Canada, with manufacturing facilities in North Dakota and Oklahoma. The Company will discontinue the production of wind towers and expects to complete the sale of DMI’s production facilities and exit the wind tower production business in the fourth quarter of 2012.
Manufacturing consists of businesses in the following manufacturing activities: contract machining, metal parts stamping and fabrication, and production of waterfront equipment, material and handling trays and horticultural containers. These businesses have manufacturing facilities in Florida, Illinois and Minnesota and sell products primarily in the United States.
Construction consists of businesses involved in industrial electric contracting and construction of fiber optic and electric distribution systems, water, wastewater and HVAC systems primarily in the central United States.
Plastics consists of businesses producing polyvinyl chloride (PVC) pipe in the upper Midwest and Southwest regions of the United States.
OTP and OTESCO are wholly owned subsidiaries of the Company. All of the Company’s other businesses are owned by its wholly owned subsidiary, Varistar Corporation (Varistar).
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.
The Company had one customer within the Wind Energy segment that accounted for 10.8% of the Company’s consolidated revenues in 2011. All of the Company’s long-lived assets are located within the United States.
The following table presents the percent of consolidated sales revenue by country:
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 and nine month periods ended September 30, 2012 and total assets by business segment as of September 30, 2012 and December 31, 2011 are presented in the following tables:
Operating Revenue
Interest Expense
Income Taxes
Earnings Available for Common Shares
Identifiable Assets
|
Information on OTP's Credit Risk Exposure on Delivered and Marked-to-Market Forward Contracts (Detail) (Otter Tail Power Company, USD $)
In Thousands, unless otherwise specified |
Sep. 30, 2012
Counterparties
|
Dec. 31, 2011
Counterparties
|
---|---|---|
Net Credit Risk on Forward Energy Contracts
|
||
Derivative [Line Items] | ||
Exposure | $ 322 | $ 1,677 |
Counterparties | 7 | 10 |
Net Credit Risk to Single Largest Counterparty
|
||
Derivative [Line Items] | ||
Exposure | $ 195 | $ 737 |