EX-12.1 3 ex12-1.htm EXHIBIT 12.1

Exhibit 12.1
 
OTTER TAIL CORPORATION
CALCULATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
                                         
   
Year Ended December 31,
  
 
  
2009
    
2010
    
2011
    
2012
    
2013
  
Earnings
                              
Pretax income from continuing operations
   $ 15,510,015     $ 29,510,344     $ 39,030,509     $ 54,205,367     $ 73,970,740  
Plus fixed charges (see below)
     31,220,902       39,162,792       38,373,189       34,797,851       30,463,083  
Total earnings (1)
   $ 46,760,918     $ 68,673,135     $ 77,403,698     $ 89,003,218     $ 104,433,823  
Fixed Charges
                                        
Interest charges
   $ 27,233,466     $ 34,099,716     $ 34,022,777     $ 31,059,849     $ 26,824,680  
Amortization of debt expense, premium and discount
     2,097,436       2,825,076       2,233,412       1,501,002       1,155,403  
Estimated interest component of operating leases
     1,890,000       2,238,000       2,117,000       2,237,000       2,483,000  
Total fixed charges (2)
   $ 31,220,902     $ 39,162,792     $ 38,373,189     $ 34,797,851     $ 30,463,083  
                                         
Preferred Dividend Requirement*
   $ 633,832     $ 1,118,671 *   $ 1,138,375     $ 2,101,550     $ 650,239  
                                         
Total Fixed Charges and Preferred Dividend Requirement (3)
   $ 31,854,735     $ 40,281,462     $ 39,511,564     $ 36,899,401     $ 31,113,322  
                                         
Ratio of Earnings to Fixed Charges
(1) Divided by (2)
     1.50       1.75       2.02       2.56       3.43  
Ratio of Earnings to Fixed Charges and Preferred Dividends (1) Divided by (3)
     1.47       1.70       1.96       2.41       3.36  
 
*
The preferred dividend requirement represents the amount of pre-tax earnings required to cover preferred stock dividend requirements, with a tax gross-up adjustment based on the Company’s ratio of income before income taxes to net income. In 2010, because of income tax adjustments, the Company recorded a net after-tax loss while its income before income taxes was positive, resulting in a ratio of income before income taxes to net income of  (194%). For 2010, a 40.0% incremental tax rate from ongoing operations was used to calculate the tax gross-up adjustment instead of the ratio of income before income taxes to net income.

All outstanding cumulative preferred shares were redeemed on March 1, 2013 for $15.7 million, including $0.2 million in call premiums charged to equity and included as preferred dividends paid and as part of our preferred dividend requirement for the year ended December 31, 2013.

1