Otter Tail Corporation announced financial results for the quarter and year ended December 31, 2025.

Otter Tail Corporation (Nasdaq: OTTR) today announced financial results for the quarter and year ended December 31, 2025.

SUMMARY

Produced annual diluted earnings per share of $6.55.

Achieved a consolidated return on equity of 16% on an equity ratio of 63%.

Initiated 2026 diluted earnings per share guidance range of $5.22 to $5.62, a return on equity projection of 12% at the midpoint.

CEO OVERVIEW

"We are pleased with our 2025 financial results as they exceeded our expectations for the year," said President and CEO Chuck MacFarlane. "Our results are fueled by our team members' efforts, and I am proud of the ways they delivered for our customers and shareholders amidst dynamic market conditions.

"Throughout 2025, Otter Tail Power navigated a full agenda and our team members rose to the occasion. We made significant progress on a number of our capital projects, including our wind repowering, solar development and large regional transmission projects, all while executing on our regulatory priorities. We filed rate cases in South Dakota and Minnesota for the first time since 2018 and 2020, respectively. Even with the proposed increases, Otter Tail Power will continue to have some of the lowest electric rates in the region and country.

"Otter Tail Power's capital spending plan for 2026 through 2030 remains robust. We have identified a pipeline of high-quality projects that provide safe, reliable and increasingly clean electric service for our customers. We are reaffirming our five-year rate base compounded annual growth rate of 10 percent.

"Our Manufacturing segment businesses continued to face soft end market demand following a sharp decline in sales volumes beginning in the third quarter of 2024. Our team members did an excellent job aligning our cost structure with the current demand environment while ensuring we remained well-positioned to respond when conditions improved. This positioning became important towards the end of 2025 as customer order activity picked up, enabling us to end the year with momentum.

"Our Plastics segment businesses continued to provide significant value to our organization even as segment earnings receded from record levels last year, and I am proud of how our team members navigated these changing market conditions. We benefitted from increased sales volumes enabled by the incremental production capacity and large-diameter capability added at Vinyltech in late 2024, partially offsetting the impact of lower PVC pipe sales prices. We expect to complete the second phase of our Vinyltech expansion project in early 2026.

"We are initiating our 2026 diluted earnings per share guidance range of $5.22 to $5.62 and affirming our long-term financial targets. The fundamentals of our business and diversified portfolio remain strong and we are confident in our ability to deliver on our growth plan for the benefit of our customers and shareholders. We continue to target a long-term earnings per share growth rate of 7 to 9 percent, resulting in a total shareholder return of 10 to 12 percent."

CASH FLOWS AND LIQUIDITY

Our consolidated cash provided by operating activities was $386.0 million in 2025, compared to $452.7 million in 2024. The decrease was primarily driven by higher working capital requirements, including the timing of fuel cost and rider recoveries from our utility customers, and lower earnings.

Investing activities during the year included capital expenditures of $288.1 million. These expenditures were primarily within our Electric segment and included investments in our wind repowering initiatives, solar facilities, and other projects.

Financing activities in 2025 included the issuance of $100.0 million of long-term debt at Otter Tail Power, with the proceeds used to repay short-term borrowings, fund capital investments, and support operating activities. Other financing activities during the year included dividend payments of $88.1 million.

As of December 31, 2025, we had $319.3 million of available liquidity under our credit facilities and $386.2 million of available cash and cash equivalents, for total available liquidity of $705.5 million.

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