Otter Tail (OTTR) investor relations material

Executive summary

• Q3 2025 diluted EPS was $1.86, exceeding expectations but down from $2.03 in Q3 2024, with net income at $78.3 million, down 8.4% year-over-year, mainly due to lower Plastics segment sales prices and Manufacturing volumes.

• Five-year capital spending plan increased to $1.9 billion, targeting a 10% electric utility rate base CAGR and long-term EPS growth rate of 7%-9%.

• 2025 EPS guidance midpoint raised to $6.47, with Electric and Plastics segments driving growth and a 12.3% dividend increase declared.

• Growth plan execution remains strong, with regulatory progress in Minnesota and South Dakota rate cases, and major capital projects underway.

• Cash position and liquidity remain strong, with no external equity needs anticipated through at least 2030.

Financial highlights

• Q3 2025 net income was $78.3 million, down 8.4% year-over-year; diluted EPS was $1.86, down from $2.03 in Q3 2024.

• Operating revenues for Q3 2025 were $325.6 million, a 3.7% decrease from Q3 2024.

• Manufacturing segment earnings increased $0.04 per share due to cost alignment and efficiency gains, with net income up 80.1% year-over-year despite lower volumes.

• Plastics segment sales prices declined 17% year-over-year, but sales volumes rose 4%; net income fell 20.2%.

• Corporate costs improved $0.08 per share, driven by tax benefits and lower insurance claims.

Outlook and guidance

• 2025 EPS guidance midpoint raised to $6.47, with a new range of $6.32-$6.62, and long-term EPS growth target increased to 7%-9%.

• Five-year capital plan totals $1.9 billion, focused on electric utility investments and major projects.

• Total shareholder return targeted at 10%-12%, with dividend payout ratio for 2025 at 26% and a 12.3% dividend increase.

• Guidance increase driven by better-than-expected Plastics segment results and lower projected raw material costs.

• Interim rates in Minnesota and South Dakota expected to commence in 2026, pending regulatory approval.