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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2022 or
    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number 0-53713 
OTTER TAIL CORPORATION
(Exact name of registrant as specified in its charter) 
Minnesota
(State or other jurisdiction of incorporation or organization)
27-0383995
(I.R.S. Employer Identification No.)
215 South Cascade Street, Box 496, Fergus Falls, Minnesota
(Address of principal executive offices)
56538-0496
(Zip Code)
Registrant's telephone number, including area code: 866-410-8780
Securities registered pursuant to Section 12(b) of the Act: 
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, par value $5.00 per shareOTTRThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes      No   
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes       No   
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): 
 
Large Accelerated Filer
Accelerated Filer
 
Non-Accelerated Filer
Smaller Reporting Company
Emerging Growth Company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No  
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date:
41,630,799 Common Shares ($5 par value) as of July 27, 2022. 



TABLE OF CONTENTS

1

DEFINITIONS
The following abbreviations or acronyms are used in the text.
AGIAdvanced Grid Infrastructure RiderOTCOtter Tail Corporation
ARPAlternative Revenue ProgramOTPOtter Tail Power Company
BTDBTD Manufacturing, Inc.NDDEQNorth Dakota Department of Environmental Quality
CIPConservation Improvement ProgramPIRPhase-In Rider
EPAEnvironmental Protection AgencyPSLRAPrivate Securities Litigation Reform Act of 1995
ESSRPExecutive Survivor and Supplemental Retirement PlanPTCProduction Tax Credits
FERCFederal Energy Regulatory CommissionPVCPolyvinyl chloride
GCRGeneration Cost Recovery RiderRHRRegional Haze Rule
ISOIndependent System OperatorROEReturn on equity
IRPIntegrated Resource PlanRRRRenewable Resource Rider
kwhkilowatt-hourSECSecurities and Exchange Commission
MerricourtMerricourt Wind Energy CenterT.O. PlasticsT.O. Plastics, Inc.
MISOMidcontinent Independent System Operator, Inc.TCRTransmission Cost Recovery Rider
MPUCMinnesota Public Utilities Commission
FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). When used in this Form 10-Q and in future filings by Otter Tail Corporation (the "Company") with the Securities and Exchange Commission (SEC), in the Company’s press releases and in oral statements, words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” "future," "goal," “intend,” "likely," “may,” “outlook,” “plan,” “possible,” “potential,” "probable," "projected," “should,” "target," “will,” “would” or similar expressions are intended to identify forward-looking statements within the meaning of the PSLRA. Such statements are based on current expectations and assumptions and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. The Company’s risks and uncertainties include, among other things, uncertainty of the impact and duration of the COVID-19 pandemic, uncertainty of future investments and capital expenditures, rate base levels and rate base growth, long-term investment risk, seasonal weather patterns and extreme weather events, counterparty credit risk, future business volumes with key customers, reductions in our credit ratings, our ability to access capital markets on favorable terms, assumptions and costs relating to funding our employee benefit plans, our subsidiaries’ ability to make dividend payments, cyber security threats or data breaches, the impact of government legislation and regulation including foreign trade policy and environmental laws and regulations, the impact of climate change including compliance with legislative and regulatory changes to address climate change, operational and economic risks associated with our electric generating and manufacturing facilities, risks associated with energy markets, the availability and pricing of resource materials, inflation rates, attracting and maintaining a qualified and stable workforce, expectations regarding regulatory proceedings, and changing macroeconomic and industry conditions. These and other risks and uncertainties are more fully described in our filings with the SEC, including our most recently filed Annual Report on Form 10-K. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information.
PART I. FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS

2

OTTER TAIL CORPORATION
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share data)June 30,
2022
December 31,
2021
Assets  
Current Assets  
Cash and Cash Equivalents$61,989 $1,537 
Receivables, net of allowance for credit losses225,838 174,953 
Inventories146,964 148,490 
Regulatory Assets20,675 27,342 
Other Current Assets15,923 17,032 
Total Current Assets471,389 369,354 
Noncurrent Assets
Investments53,555 56,690 
Property, Plant and Equipment, net of accumulated depreciation2,149,919 2,124,605 
Regulatory Assets121,954 125,508 
Intangible Assets, net of accumulated amortization8,493 9,044 
Goodwill37,572 37,572 
Other Noncurrent Assets32,618 32,057 
Total Noncurrent Assets2,404,111 2,385,476 
Total Assets$2,875,500 $2,754,830 
Liabilities and Shareholders' Equity
Current Liabilities
Short-Term Debt$ $91,163 
Current Maturities of Long-Term Debt29,996 29,983 
Accounts Payable133,287 135,089 
Accrued Salaries and Wages24,803 31,704 
Accrued Taxes22,037 19,245 
Regulatory Liabilities19,458 24,844 
Other Current Liabilities58,572 55,671 
Total Current Liabilities288,153 387,699 
Noncurrent Liabilities
Pension Benefit Liability51,783 73,973 
Other Postretirement Benefits Liability66,665 66,481 
Regulatory Liabilities235,456 234,430 
Deferred Income Taxes213,919 188,268 
Deferred Tax Credits16,288 16,661 
Other Noncurrent Liabilities62,994 62,527 
Total Noncurrent Liabilities647,105 642,340 
Commitments and Contingencies (Note 9)
Capitalization
Long-Term Debt, net of current maturities823,699 734,014 
Shareholders' Equity
Common Shares: 50,000,000 shares authorized, $5 par value; 41,630,799 and 41,551,524 outstanding
at June 30, 2022 and December 31, 2021
208,154 207,758 
Additional Paid-In Capital421,951 419,760 
Retained Earnings493,351 369,783 
Accumulated Other Comprehensive Loss(6,913)(6,524)
Total Shareholders' Equity1,116,543 990,777 
Total Capitalization1,940,242 1,724,791 
Total Liabilities and Shareholders' Equity$2,875,500 $2,754,830 
See accompanying notes to consolidated financial statements.
3

OTTER TAIL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in thousands, except per-share amounts)2022202120222021
Operating Revenues  
Electric$130,949 $106,155 $261,365 $229,855 
Product Sales269,091 179,453 513,579 317,463 
Total Operating Revenues400,040 285,608 774,944 547,318 
Operating Expenses
Electric Production Fuel14,714 12,164 29,567 26,878 
Electric Purchased Power24,162 11,135 44,691 30,395 
Electric Operating and Maintenance Expenses42,379 36,729 86,659 78,150 
Cost of Products Sold (excluding depreciation)152,466 122,578 304,225 224,555 
Other Nonelectric Expenses17,252 15,669 34,457 29,362 
Depreciation and Amortization23,566 23,169 47,113 45,295 
Electric Property Taxes4,435 4,342 8,866 8,662 
Total Operating Expenses278,974 225,786 555,578 443,297 
Operating Income121,066 59,822 219,366 104,021 
Other Income and Expense
Interest Charges8,991 9,555 17,939 18,953 
Nonservice Cost Components of Postretirement Benefits(751)624 (772)1,006 
Other Income (Expense), net(889)734 (629)1,892 
Income Before Income Taxes111,937 50,377 201,570 85,954 
Income Tax Expense26,000 8,308 43,630 13,556 
Net Income$85,937 $42,069 $157,940 $72,398 
Weighted-Average Common Shares Outstanding:
Basic41,597 41,500 41,573 41,478 
Diluted41,944 41,818 41,907 41,759 
Earnings Per Share:
Basic$2.07 $1.01 $3.80 $1.75 
Diluted$2.05 $1.01 $3.77 $1.73 
See accompanying notes to consolidated financial statements.
4

OTTER TAIL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Net Income$85,937 $42,069 $157,940 $72,398 
Other Comprehensive Income (Loss):
Unrealized Loss on Available-for-Sale Securities, net of tax benefit of $20, $10, $81, and $20
(74)(40)(305)(75)
Pension and Other Postretirement Benefits, net of tax benefit (expense) of $(37), $(50), $29, and $(103)
106 141 (84)291 
Total Other Comprehensive Income (Loss)32 101 (389)216 
Total Comprehensive Income$85,969 $42,170 $157,551 $72,614 
See accompanying notes to consolidated financial statements.
5

OTTER TAIL CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited)
(in thousands, except common shares outstanding)Common
Shares
Outstanding
Par Value,
Common
Shares
Additional Paid-In CapitalRetained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total Shareholders' Equity
Balance, March 31, 202241,605,884 $208,029 $421,449 $424,605 $(6,945)$1,047,138 
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes24,915 125 (105)— — 20 
Net Income— — — 85,937 — 85,937 
Other Comprehensive Income— — — — 32 32 
Stock Compensation Expense— — 607 — — 607 
Common Dividends ($0.4125 per share)
— — — (17,191)— (17,191)
Balance, June 30, 202241,630,799 $208,154 $421,951 $493,351 $(6,913)$1,116,543 
Balance, March 31, 202141,510,455 $207,552 $416,707 $271,999 $(8,392)$887,866 
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes28,254 142 (123)— — 19 
Stock Issued Under Dividend Reinvestment and Stock Purchase Plans, net of expenses and repurchased shares— — (41)— — (41)
Net Income— — — 42,069 — 42,069 
Other Comprehensive Income— — — — 101 101 
Stock Compensation Expense— — 1,327 — — 1,327 
Common Dividends ($0.39 per share)
— — — (16,218)— (16,218)
Balance, June 30, 202141,538,709 $207,694 $417,870 $297,850 $(8,291)$915,123 
Balance, December 31, 202141,551,524 $207,758 $419,760 $369,783 $(6,524)$990,777 
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes79,275 396 (3,320)— — (2,924)
Net Income— — — 157,940 — 157,940 
Other Comprehensive Loss— — — — (389)(389)
Stock Compensation Expense— — 5,511 — — 5,511 
Common Dividends ($0.825 per share)
— — — (34,372)— (34,372)
Balance, June 30, 202241,630,799 $208,154 $421,951 $493,351 $(6,913)$1,116,543 
Balance, December 31, 202041,469,879 $207,349 $414,246 $257,878 $(8,507)$870,966 
Stock Issued Under Share-Based Compensation Plans, net of shares withheld for employee taxes68,830 345 (1,833)— — (1,488)
Stock Issued Under Dividend Reinvestment and Stock Purchase Plans, net of expenses and repurchased shares— — (67)— — (67)
Net Income— — — 72,398 — 72,398 
Other Comprehensive Income— — — — 216 216 
Stock Compensation Expense— — 5,524 — — 5,524 
Common Dividends ($0.78 per share)
— — — (32,426)— (32,426)
Balance, June 30, 202141,538,709 $207,694 $417,870 $297,850 $(8,291)$915,123 
See accompanying notes to consolidated financial statements.
6

OTTER TAIL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended June 30,
(in thousands)20222021
Operating Activities  
Net Income$157,940 $72,398 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation and Amortization47,113 45,295 
Deferred Tax Credits(373)(372)
Deferred Income Taxes25,160 11,327 
Discretionary Contribution to Pension Plan(20,000)(10,000)
Allowance for Equity Funds Used During Construction(617)(172)
Stock Compensation Expense5,511 5,524 
Other, Net4,893 (2,864)
Changes in Operating Assets and Liabilities:
Receivables(50,885)(49,465)
Inventories2,889 (10,859)
Regulatory Assets5,604 5,753 
Other Assets3,240 (12,920)
Accounts Payable1,933 16,905 
Accrued and Other Liabilities(3,394)(468)
Regulatory Liabilities(3,859)(4,811)
Pension and Other Postretirement Benefits475 3,303 
Net Cash Provided by Operating Activities175,630 68,574 
Investing Activities
Capital Expenditures(70,791)(76,891)
Proceeds from Disposal of Noncurrent Assets2,840 4,562 
Cash Used for Investments and Other Assets(5,944)(4,074)
Net Cash Used in Investing Activities(73,895)(76,403)
Financing Activities
Net Borrowings (Repayments) on Short-Term Debt(91,163)46,960 
Proceeds from Issuance of Long-Term Debt90,000  
Payments for Retirement of Long-Term Debt (169)
Dividends Paid(34,372)(32,426)
Payments for Shares Withheld for Employee Tax Obligations(2,942)(1,507)
Other, net(2,806)(4,712)
Net Cash (Used in) Provided by Financing Activities
(41,283)8,146 
Net Change in Cash and Cash Equivalents60,452 317 
Cash and Cash Equivalents at Beginning of Period1,537 1,163 
Cash and Cash Equivalents at End of Period$61,989 $1,480 
Supplemental Disclosure of Noncash Investing Activities
Accrued Property, Plant and Equipment Additions$11,116 $24,390 
See accompanying notes to consolidated financial statements
7

OTTER TAIL CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1. Summary of Significant Accounting Policies
Overview
Otter Tail Corporation (OTC) and its subsidiaries (collectively, the "Company", "us", "our" or "we") form a diverse, multi-platform business consisting of a vertically integrated, regulated utility with generation, transmission and distribution facilities complemented by manufacturing businesses providing metal fabrication for custom machine parts and metal components, manufacturing of extruded and thermoformed plastic products, and manufacturing of polyvinyl chloride (PVC) pipe products. We classify our business into three segments: Electric, Manufacturing and Plastics.
Basis of Presentation
The unaudited consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the SEC for interim reporting. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles. In the opinion of management, we have included all adjustments, including normal recurring accruals, necessary for a fair presentation of the consolidated financial statements for the periods presented. The consolidated financial statements and condensed notes thereto should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Because of the seasonality of our businesses and other factors, the earnings for the three and six months ended June 30, 2022 should not be taken as an indication of earnings for all or any part of the balance of the current year or as an indication of earnings for future years.
Use of Estimates
We use estimates based on the best information available in recording transactions and balances resulting from business operations. As better information becomes available or actual amounts are known, the recorded estimates are revised. Consequently, operating results can be affected by revisions to prior accounting estimates.
Reclassifications
Certain reclassifications of amounts previously reported have been made to the accompanying consolidated statements of shareholders' equity and consolidated statements of cash flows to maintain consistency and comparability between periods presented. The reclassifications had no impact on previously reported shareholders' equity, net cash provided by operating activities, net cash used in investing activities, net cash (used in) provided by financing activities, or cash and cash equivalents.
2. Segment Information
We classify our business into three segments, Electric, Manufacturing and Plastics, consistent with our business strategy, organizational structure and our internal reporting and review processes used by our chief operating decision maker to make decisions regarding allocation of resources, to assess operating performance and to make strategic decisions.
Certain assets and costs are not allocated to our operating segments. Corporate operating costs include items such as corporate staff and overhead costs, the results of our 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 consolidated amounts.
Information for each segment and our unallocated corporate costs for the three and six months ended June 30, 2022 and 2021 are as follows:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Operating Revenue
Electric$130,949 $106,155 $261,365 $229,855 
Manufacturing103,196 84,284 208,154 160,107 
Plastics165,895 95,169 305,425 157,356 
Total$400,040 $285,608 $774,944 $547,318 
Net Income (Loss)
Electric$18,858 $15,433 $38,091 $33,019 
Manufacturing7,555 5,705 11,639 11,089 
Plastics63,959 22,544 114,806 31,692 
Corporate(4,435)(1,613)(6,596)(3,402)
Total$85,937 $42,069 $157,940 $72,398 
8

The following provides the identifiable assets by segment and corporate assets as of June 30, 2022 and December 31, 2021:
(in thousands)June 30,
2022
December 31,
2021
Identifiable Assets
Electric$2,309,245 $2,283,776 
Manufacturing267,050 251,044 
Plastics201,724 162,565 
Corporate97,481 57,445 
Total$2,875,500 $2,754,830 
3. Revenue
Presented below are our operating revenues to external customers, in total and by amounts arising from contracts with customers and alternative revenue program (ARP) arrangements, disaggregated by revenue source and segment for the three and six months ended June 30, 2022 and 2021:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Operating Revenues
Electric Segment
Retail: Residential$33,011 $28,709 $73,743 $66,176 
Retail: Commercial and Industrial78,521 58,390 149,527 124,811 
Retail: Other2,071 1,888 3,972 3,706 
  Total Retail113,603 88,987 227,242 194,693 
Transmission11,697 11,840 24,254 23,785 
Wholesale3,537 3,260 6,000 7,767 
Other2,112 2,068 3,869 3,610 
Total Electric Segment130,949 106,155 261,365 229,855 
Manufacturing Segment
Metal Parts and Tooling88,296 71,013 177,869 133,686 
Plastic Products and Tooling11,416 10,131 23,860 20,426 
Scrap Metal Sales3,484 3,140 6,425 5,995 
Total Manufacturing Segment103,196 84,284 208,154 160,107 
Plastics Segment
PVC Pipe165,895 95,169 305,425 157,356 
Total Operating Revenue400,040 285,608 774,944 547,318 
Less: Non-contract Revenues Included Above
Electric Segment - ARP Revenues(4,928)(1,782)(7,388)(2,757)
Total Operating Revenues from Contracts with Customers$404,968 $287,390 $782,332 $550,075 
4. Select Balance Sheet Information
Receivables and Allowance for Credit Losses
Receivables as of June 30, 2022 and December 31, 2021 are as follows:
(in thousands)June 30,
2022
December 31,
2021
Receivables
Trade$200,682 $142,297 
Other7,143 10,591 
Unbilled Receivables19,770 23,901 
Total Receivables227,595 176,789 
Less: Allowance for Credit Losses(1,757)(1,836)
Receivables, net of allowance for credit losses$225,838 $174,953 
9

The following is a summary of activity in the allowance for credit losses for the six months ended June 30, 2022 and 2021:
(in thousands)20222021
Beginning Balance, January 1$1,836 $3,215 
Additions Charged to Expense382 284 
Reductions for Amounts Written Off, Net of Recoveries(461)(773)
Ending Balance, June 30$1,757 $2,726 
Inventories
Inventories consist of the following as of June 30, 2022 and December 31, 2021:
(in thousands)June 30,
2022
December 31,
2021
Raw Material, Fuel and Supplies$79,735 $72,882 
Work in Process34,700 35,705 
Finished Goods32,529 39,903 
Total Inventories$146,964 $148,490 
Investments
The following is a summary of our investments as of June 30, 2022 and December 31, 2021:
(in thousands)June 30,
2022
December 31,
2021
Corporate-Owned Life Insurance Policies$37,502 $41,078 
Debt Securities8,351 9,202 
Money Market Funds2,122 949 
Mutual Funds5,546 5,432 
Other Investments34 29 
Total Investments$53,555 $56,690 
The amount of unrealized gains and losses on debt securities as of June 30, 2022 and December 31, 2021 was not material and no unrealized losses were deemed to be other-than-temporary. In addition, the amount of unrealized gains and losses on marketable equity securities still held as of June 30, 2022 and December 31, 2021 was not material.
Property, Plant and Equipment
Major classes of property, plant and equipment as of June 30, 2022 and December 31, 2021 include:
(in thousands)June 30,
2022
December 31,
2021
Electric Plant  
Electric Plant in Service$2,785,850 $2,758,445 
Construction Work in Progress96,763 74,926 
Total Gross Electric Plant2,882,613 2,833,371 
Less Accumulated Depreciation and Amortization843,296 817,302 
Net Electric Plant2,039,317 2,016,069 
Nonelectric Property, Plant and Equipment
Nonelectric Property, Plant and Equipment in Service279,123 273,950 
Construction Work in Progress18,483 16,611 
Total Gross Nonelectric Property, Plant and Equipment297,606 290,561 
Less Accumulated Depreciation and Amortization187,004 182,025 
Net Nonelectric Property, Plant and Equipment110,602 108,536 
Net Property, Plant and Equipment$2,149,919 $2,124,605 
10

5. Regulatory Matters
Regulatory Assets and Liabilities
The following presents our current and long-term regulatory assets and liabilities as of June 30, 2022 and December 31, 2021 and the period we expect to recover or refund such amounts:
Period ofJune 30, 2022December 31, 2021
(in thousands)Recovery/RefundCurrentLong-TermCurrentLong Term
Regulatory Assets
Pension and Other Postretirement Benefit Plans1
Various$7,791 $112,011 $7,791 $114,961 
Alternative Revenue Program Riders2
Up to 2 years
4,695 5,370 11,889 5,564 
Asset Retirement Obligations1
Asset lives 1,238  742 
ISO Cost Recovery Trackers1
Up to 2 years
440 726  1,342 
Unrecovered Project Costs1
Up to 5 years
356 1,136 2,136 1,455 
Deferred Rate Case Expenses1
Various477 943 607 1,131 
Debt Reacquisition Premiums1
Up to 11 years
35 228 100 240 
Fuel Clause Adjustments1
Up to 1 year
6,797  4,819  
Other1
Various84 302  73 
Total Regulatory Assets$20,675 $121,954 $27,342 $