Note 12 - Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Fair Value Disclosures [Text Block]

12. Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash Equivalents—The carrying amount approximates fair value because of the short-term maturity of those instruments.

Short-Term Debt—The carrying amount approximates fair value because the debt obligations are short-term and the balances outstanding as of June 30, 2020 and December 31, 2019 related to the Otter Tail Corporation Credit Agreement were subject to variable interest rates of LIBOR plus 1.50%, which approximate market rates.

Long-Term Debt including Current Maturities—The fair value of the Company's and OTP’s long-term debt is estimated based on the current market indications of rates available to the Company for the issuance of debt. The fair value measurements of the Company’s long-term debt issues fall into level 2 of the fair value hierarchy set forth in ASC 820.

	June 30, 2020						December 31, 2019
(in thousands)	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Cash and Cash Equivalents	$	39,512		$	39,512		$	21,199		$	21,199
Short-Term Debt		(41,239	)		(41,239	)		(6,000	)		(6,000	)
Long-Term Debt including Current Maturities		(724,650	)		(795,995	)		(689,764	)		(742,279	)