Note 7 - Retained Earnings and Dividend Restriction	12 Months Ended
Dec. 31, 2018
Notes to Financial Statements
Retained Earnings Restrictions [Text Block]	7 . Retained Earnings and Dividend Restriction The Company is a holding company with no significant operations of its own. The primary source of funds for payments of dividends to the Company’s shareholders is from dividends paid or distributions made by the Company’s subsidiaries. As a result of certain statutory limitations or regulatory or financing agreements, restrictions could occur on the amount of distributions allowed to be made by the Company’s subsidiaries. Both the Company and OTP credit agreements contain restrictions on the payment of cash dividends upon a default or event of default. An event of default would be considered to have occurred if the Company did not meet certain financial covenants. As of December 31, 2018, the Company was in compliance with these financial covenants. Under the Federal Power Act, a public utility may not pay dividends from any funds properly included in a capital account. What constitutes “funds properly included in a capital account” is undefined in the Federal Power Act or the related regulations; however, the FERC has consistently interpreted the provision to allow dividends to be paid as long as ( 1 ) the source of the dividends is clearly disclosed, ( 2 ) the dividend is not excessive and ( 3 ) there is no self-dealing on the part of corporate officials. The MPUC indirectly limits the amount of dividends OTP can pay to the Company by requiring an equity-to-total-capitalization ratio between 47.9% and 58.5% based on OTP’s 2018 capital structure petition effective by order of the MPUC on October 18, 2018. As of December 31, 2018, OTP’s equity-to-total-capitalization ratio including short-term debt was 53.2% and its net assets restricted from distribution totaled approximately $477 million. Total capitalization for OTP cannot currently exceed $1.2 billion.

. Retained Earnings

and Dividend

Restriction

The Company is a holding company with

significant operations of its own. The primary source of funds for payments of dividends to the Company’s shareholders is from dividends paid or distributions made by the Company’s subsidiaries. As a result of certain statutory limitations or regulatory or financing agreements, restrictions could occur on the amount of distributions allowed to be made by the Company’s subsidiaries.

Both the Company and OTP credit agreements contain restrictions on the payment of cash dividends upon a default or event of default. An event of default would be considered to have occurred if the Company did

not

meet certain financial covenants. As of

December 31, 2018,

the Company was in compliance with these financial covenants.

Under the Federal Power Act, a public utility

may

not

pay dividends from any funds properly included in a capital account. What constitutes “funds properly included in a capital account” is undefined in the Federal Power Act or the related regulations; however, the FERC has consistently interpreted the provision to allow dividends to be paid as long as (

) the source of the dividends is clearly disclosed, (

) the dividend is

not

excessive and (

) there is

self-dealing on the part of corporate officials.

The MPUC indirectly limits the amount of dividends OTP can pay to the Company by requiring an equity-to-total-capitalization ratio between

47.9%

and

58.5%

based on OTP’s

2018

capital structure petition effective by order of the MPUC on

October 18, 2018.

As of

December 31, 2018,

OTP’s equity-to-total-capitalization ratio including short-term debt was

53.2%

and its net assets restricted from distribution totaled approximately

$477

million. Total capitalization for OTP cannot currently exceed

$1.2

billion.