Otter Tail Corp (OTTR) 2024 Q1 法說會逐字稿

Good morning, and welcome to Otter Tail Corporation first-quarter 2024 earnings conference call. Today's call is being recorded, and we will hold a question-and-answer session after the prepared remarks. I'll now turn the call over to company for their opening comments.

早安，歡迎參加 Otter Tail Corporation 2024 年第一季財報電話會議。今天的電話會議正在錄音，我們將在準備好的發言後舉行問答環節。我現在將電話轉給公司，請他們發表開場評論。

Good morning, everyone, and welcome to our first-quarter 2024 earnings conference call. My name Beth Eiken, and I'm Otter Tail Corporation's Manager of Investor Relations. Last night, we announced our first-quarter financial results. Our complete earnings release and slides accompanying this call are available on our website at OtterTail.com. A recording of this call will be available on our website later today.

大家早安，歡迎參加我們的 2024 年第一季財報電話會議。我叫 Beth Eiken，是 Otter Tail 公司的投資人關係經理。昨晚，我們公佈了第一季的財務表現。您可在我們的網站 OtterTail.com 上查閱我們的完整收益報告和本次電話會議的幻燈片。此次通話的錄音將於今天稍晚在我們的網站上發布。

With me on the call today are Chuck MacFarlane, Otter Tail Corporation's President and CEO; and Todd Wahlund, Otter Tail Corporation's Vice President and CFO.

今天與我一起參加電話會議的還有 Otter Tail Corporation 總裁兼執行長 Chuck MacFarlane；以及 Otter Tail Corporation 副總裁兼財務長 Todd Wahlund。

Before we begin, I want to remind you that we will be making forward-looking statements during the course of this call. As noted on slide 2, these statements represent our current views and expectations of future events. They are subject to risks and uncertainties, which may cause actual results to differ from those presented here, so please be advised against placing undue reliance on any of these statements.

在我們開始之前，我想提醒您，我們將在本次電話會議期間做出前瞻性陳述。如幻燈片 2 所示，這些陳述代表了我們對未來事件的當前觀點和期望。它們受風險和不確定性的影響，可能導致實際結果與此處所述的結果不同，因此請注意不要過度依賴任何這些陳述。

Our forward-looking statements are described in more detail in our filings with the Securities and Exchange Commission, which we encourage you to review. Otter Tail Corporation disclaims any duty to update or revise our forward-looking statements due to new information, future events, developments, or otherwise.

我們向美國證券交易委員會提交的文件中對前瞻性陳述進行了更詳細的描述，我們鼓勵您閱讀這些文件。Otter Tail Corporation 不承擔因新資訊、未來事件、發展或其他情況而更新或修改我們的前瞻性陳述的責任。

I will now turn the call over to Otter Tail Corporation's President and CEO, Mr. Chuck MacFarlane.

現在我將把電話轉給 Otter Tail Corporation 的總裁兼執行長 Chuck MacFarlane 先生。

Thank you, Beth. Good morning, and welcome to our first-quarter 2024 earnings call. Please refer to side 4 as I begin my comments on our quarterly performance.

謝謝你，貝絲。早上好，歡迎參加我們的 2024 年第一季財報電話會議。當我開始評論我們的季度業績時，請參閱第 4 頁。

We are pleased with our overall first-quarter financial results. Diluted earnings per share increased nearly 20% to $1.77 per share compared to the same time last year, driven by strong financial performance within our plastics segment.

我們對第一季的整體財務表現感到滿意。得益於塑膠部門強勁的財務表現，每股攤薄收益與去年同期相比成長近 20%，至每股 1.77 美元。

The Plastics segment earnings increased 39% from the first quarter of 2023 due to higher sales volumes driven by customer sales, volume growth, and strong distributor and end market demand. Electric segment earnings decreased modestly, primarily driven by weather-related headwinds. Manufacturing segment earnings decreased 23% due to lower sales volumes.

由於客戶銷售、銷售成長以及強勁的經銷商和終端市場需求推動銷售量增加，塑膠部門的收益較 2023 年第一季成長了 39%。電力部門獲利略有下降，主要受天氣相關不利因素影響。由於銷售量下降，製造部門收益下降了 23%。

Our corporate costs decreased due to returns earned on our short-term investments, driven by a larger cash balance and higher interest rates. We are increasing our 2024 earnings guidance by $1.10 per share to a range of $6.23 to $6.53 due to the stronger-than-expected plastics segment performance in Q1 and our revised expectations for the remainder of the year.

由於現金餘額增加和利率上升，我們的短期投資獲得回報，導致公司成本下降。由於第一季塑膠部門的表現優於預期，且我們對今年剩餘時間的預期進行了修正，我們將 2024 年獲利預期上調 1.10 美元/股，至 6.23 美元至 6.53 美元之間。

In a moment, Todd will provide a more detailed discussion of our first-quarter financial results and our updated earnings expectations for 2024. Slide 5 shows our expected five-year compounded annual growth rate and earnings per share with and without the impact of our plastics segment through the end of 2024, based on the midpoint of our updated earnings guidance.

稍後，托德將更詳細地討論我們的第一季財務業績和我們對 2024 年的最新獲利預期。投影片 5 顯示了基於我們更新後的獲利預測中點，到 2024 年底，我們預期的五年複合年增長率和每股盈餘（包括和不包括塑膠部門的影響）。

Even without the impact of the extraordinary results generated by our plastics segment over the last few years, we expect to produce a compounded annual growth rate in earnings per share from 2019 through 2024 of 8.5%.

即使沒有過去幾年塑膠部門創造的非凡業績的影響，我們預計 2019 年至 2024 年每股收益的複合年增長率將達到 8.5%。

Turning to our electric segment, slide 7 provides an overview of our electric operations. Our regulated electric utility announced a sizable five-year capital spending plan earlier this year with significant amounts being allocated to renewable resources, transmission investment, and technology.

談到我們的電力部門，幻燈片 7 概述了我們的電力業務。我們監管的電力公司今年稍早宣布了一項規模龐大的五年資本支出計劃，其中大部分資金將用於再生資源、輸電投資和技術。

In addition to Otter Tail Power's rate base growth, we also have the opportunity for new large loads. This potential load growth is primarily driven by crypto mining, high-performance computing, and clean-fuel-related opportunities. At this time, we have not made any adjustments to our load growth forecast for these opportunities but continue to engage with companies showing an interest in entering our service territory.

除了 Otter Tail Power 的費率基礎成長之外，我們還有機會獲得新的大負荷。這種潛在負載成長主要由加密挖掘、高效能運算和清潔燃料相關機會推動。目前，我們尚未對這些機會的負載成長預測做出任何調整，但會繼續與有興趣進入我們服務領域的公司合作。

Slide 8 summarizes Otter Tail Power's five-year capital spending plan. The plan includes $1.3 billion of capital investment over the next five-year period and is expected to produce a rate base growth of 7.7%. Otter Tail Power has a strong track record of translating rate base growth into earnings growth.

投影片 8 總結了 Otter Tail Power 的五年資本支出計畫。該計劃包括未來五年 13 億美元的資本投資，預計將產生 7.7% 的利率基準成長率。Otter Tail Power 在將費率基礎成長轉化為獲利成長方面有著良好的記錄。

In the previous five-year period, we converted an average rate base growth into earnings growth at a one-to-one ratio, a sign of a high-performing regulated utility. Over the long term, we expect to continue to convert our rate base growth into earnings growth near a one-to-one ratio.

在過去五年期間，我們以一比一的比例將平均費率基礎成長轉化為收益成長，這是受監管公用事業公司高績效的標誌。從長期來看，我們預計將繼續以接近一比一的比例將利率基礎成長轉化為獲利成長。

I will now provide a few details on several projects within the existing five-year planning period and beyond. Slide 9 summarizes Otter Tail Power's advanced metering infrastructure project with a total investment of approximately $60 million.

現在，我將介紹現有五年規劃期內及以後的幾個項目的一些細節。投影片 9 總結了 Otter Tail Power 的先進計量基礎設施項目，總投資約為 6000 萬美元。

Advanced metering infrastructure or AMI should allow us to better understand peak energy use so that we can offer energy and cost-saving options to customers and improve our customers' experience. We are targeting to upgrade more than 174,000 meters across our service territory and anticipate completing the project in 2025. We expect this project will reduce operating expenses through lower meter-reading costs and technology-enabled savings.

先進的計量基礎設施或 AMI 應該使我們能夠更好地了解峰值能源使用情況，以便我們可以為客戶提供節能和節省成本的選擇並改善客戶體驗。我們的目標是升級服務區域內的超過 174,000 米，並預計於 2025 年完成該專案。我們預計該項目將透過降低抄表成本和技術支援的節約來減少營運費用。

Turning to slide 10, we have commenced repowering our four legacy wind farms with an investment of approximately $230 million. Once complete, this project is expected to be equivalent to adding 40 megawatts of new wind generation with a 50% capacity factor.

第 10 頁，我們已經開始對四個傳統風電場進行改造，投資約 2.3 億美元。該工程建成後預計相當於新增40兆瓦風電發電量，容量係數為50%。

In March, we received approval for rider recovery of the project costs from the North Dakota Commission and anticipate a decision from the Minnesota Commission in mid-2024. We anticipate requesting phase-in rider recovery in South Dakota this summer.

今年 3 月，我們獲得了北達科他州委員會對專案成本附加追償的批准，預計明尼蘇達州委員會將在 2024 年中期做出決定。我們預計今年夏天將在南達科他州要求分階段實施乘客恢復計畫。

This wind repowering project qualifies for renewed production tax credits under the Inflation Reduction Act. These tax credits, along with the incremental energy produced at these repowered wind farms, are anticipated to lower customer bills, demonstrating our continued focus and commitment to customer affordability.

根據《通貨膨脹削減法案》，該風力發電項目有資格獲得新的生產稅收抵免。這些稅收抵免，加上這些重新發電的風力發電場所產生的增量能源，預計將降低客戶的帳單，這表明我們持續專注並致力於降低客戶的負擔能力。

Slide 11 summarizes Otter Tail Power's investments under Tranche 1 of MISO's long-range transmission plan. Otter Tail Power will co-own two Tranche 1 projects, the Jamestown-Ellendale and Big Stone South-Alexandria-Big Oaks 345-kV transmission projects. Both projects have FERC approval for construction work in progress recovery, ensuring a timely recovery of our capital investment.

投影片 11 總結了 Otter Tail Power 在 MISO 遠端輸電計畫第 1 部分下的投資。Otter Tail Power 將共同擁有兩個 Tranche 1 項目，分別是 Jamestown-Ellendale 和 Big Stone South-Alexandria-Big Oaks 345-kV 輸電項目。這兩個項目均已獲得聯邦能源管理委員會 (FERC) 的在建工程回收批准，確保及時收回我們的資本投資。

In total, we estimate our capital investment in these projects to be approximately $420 million. These investments are expected to have a very limited impact on our retail customer rates as they are allocated across the entire MISO North footprint.

總體而言，我們估計對這些項目的資本投資約為 4.2 億美元。由於這些投資分佈在整個 MISO North 地區，因此預計對我們的零售客戶利率的影響非常有限。

In March of 20241, MISO released their initial draft proposal for the Tranche 2 portfolio of projects. We continue to engage with and provide feedback to MISO as they work to refine the portfolio before putting it in front of the MISO Board of Directors later this year. Our current investment opportunity based on the initial draft proposal is limited, but it's still subject to change.

20241 年 3 月，MISO 發布了第二批專案組合的初步草案提案。在 MISO 努力完善投資組合並於今年稍後提交給 MISO 董事會之前，我們將繼續與 MISO 合作並提供回饋。我們目前基於初步草案的投資機會有限，但仍可能發生變化。

We and others continue to advocate to MISO for additional transmission investment in the Dakotas and Western Minnesota to meet the original objectives of Tranche 2. MISO has recognized that additional regional transmission investment is required to meet the needs Tranche 2 was intended to resolve. Tranche 2-related investment is not currently included in our capital spending plan.

我們和其他人繼續向 MISO 倡議在達科他州和明尼蘇達州西部增加輸電投資，以實現第二批計畫的最初目標。MISO 已經意識到，需要額外的區域輸電投資才能滿足第二階段計畫解決的需求。第二部分相關投資目前尚未納入我們的資本支出計畫。

In addition to the transmission investment opportunities available through MISO's long-range transmission plan, MISO and the Southwest Power Pool or SPP partnered to develop the Joint Targeted Interconnection Queue or JTIQ portfolio projects focused on improving the interconnection log along the MISO SPPC.

除了透過 MISO 的遠端輸電計畫提供的輸電投資機會之外，MISO 還與西南電力聯盟 (SPP) 合作開發了聯合目標互連隊列 (JTIQ) 投資組合項目，重點是改善 MISO SPPC 沿線的互連日誌。

We expect to co-develop one of the five projects with Xcel Energy. 25% of project costs will be funded by a DOE grant. While the recovery of these projects still needs approval from FERC, we are optimistic about the potential investment opportunity, which we estimate to range from approximately $350 million to $400 million. This investment is also not included in our current five-year capital spending plan and represents some incremental opportunity.

我們期望與Xcel Energy共同開發這五個項目中的一個。 25% 的專案成本將由能源部撥款資助。雖然這些項目的恢復仍需獲得聯邦能源管理委員會的批准，但我們對潛在的投資機會持樂觀態度，我們估計投資機會約為 3.5 億至 4 億美元。這項投資也不包含在我們目前的五年資本支出計畫中，並且代表了一些增量機會。

Turning to slide 12, we will continue to focus on identifying opportunities for capital investments to support safe, reliable, and increasingly clean electric service to our customers. Affordability remains one of our top priorities. From 2018 through 2023, Otter Tail Power's electric rates have consistently remained well below the national and regional averages. Slide 13 summarizes Otter Tail Power's key regulatory matters in 2024. I will give a more detailed update on our integrated resource plan and North Dakota rate case.

前往第 12 張投影片，我們將繼續專注於尋找資本投資機會，為我們的客戶提供安全、可靠、日益清潔的電力服務。可負擔性仍然是我們的首要任務之一。從 2018 年到 2023 年，Otter Tail Power 的電價一直遠低於全國和地區平均值。投影片 13 總結了 Otter Tail Power 2024 年的關鍵監管事項。我將更詳細地介紹我們的綜合資源計劃和北達科他州利率案例。

Turning to Slide 14, in April, Otter Tail Power, the Minnesota Department of Commerce, and three labor organizations entered into a settlement agreement on our integrated resource plan or IRP.

翻到第 14 張投影片，4 月份，Otter Tail Power、明尼蘇達州商務部和三個勞工組織就我們的綜合資源計畫（IRP）達成了和解協議。

The settlement parties recommend the Minnesota Public Utilities Commission approved the following: adding and directly assigning 2 to 300 megawatts of solar generation and 150 to 200 megawatts of wind generation to Minnesota customers, adding on-site liquefied natural gas storage at Astoria Station, limiting the dispatch of Minnesota's portion of Coyote Station to emergency events, and beginning to withdraw from the Minnesota portion of Coyote Station should a major non-routine capital investment be required.

和解各方建議明尼蘇達州公用事業委員會批准以下事項：增加並直接分配2至300兆瓦的太陽能發電和150至200兆瓦的風力發電給明尼蘇達州的客戶，在阿斯托利亞電站增加現場液化天然氣儲存，限制在緊急事件時調度明尼蘇達州部分的土狼電站，如果需要進行重大非常規投資，則開始撤出明尼蘇達州部分的明尼蘇達州。

We are pleased with the terms of the settlement agreement as it largely aligns with our preferred plan. Involved parties that were not signatory to the settlement prefer to post 2028 exit of Coyote with batteries as a replacement resource and did not support Astoria on-site fuel. These parties are supportive of the renewable build-out.

我們對和解協議的條款感到滿意，因為它與我們的首選計劃基本一致。未簽署和解協議的相關方傾向於在 2028 年之後退出 Coyote 項目，並使用電池作為替代資源，並且不支援 Astoria 使用現場燃料。這些政黨支持再生能源建設。

A hearing before the Minnesota Commission is set scheduled on May 28, and we anticipate a decision soon thereafter. The North Dakota Public Service Commission supports the continued use of existing resources and does not anticipate needing any additional resources in the next five years. As such, we do not anticipate any additional IRP filings or steps to be taken in North Dakota.

明尼蘇達州委員會定於 5 月 28 日舉行聽證會，我們預計聽證會後很快就會做出決定。北達科他州公共服務委員會支持繼續使用現有資源，並且預計未來五年不需要任何額外資源。因此，我們預計北達科他州不會提交任何額外的 IRP 文件或採取任何措施。

Turning to slide 15, we filed a general rate case with the North Dakota Public Service Commission in November of '23. In our rate case filing, we proposed to increase net revenues by approximately $17 million or 8.4% based on a requested ROE of 10.6% on an equity layer of 53.5%. An evidentiary hearing has been scheduled in late July, and we anticipate the final outcome of the case will occur in Q3 of 2024.

翻到第 15 張投影片，我們於 1923 年 11 月向北達科他州公共服務委員會提交了一份一般費率案件。在我們的利率案例文件中，我們提議在股權層為 53.5% 且要求 ROE 為 10.6% 的基礎上，將淨收入增加約 1,700 萬美元或 8.4%。證據聽證會已安排於 7 月下旬舉行，我們預計案件的最終結果將在 2024 年第三季公佈。

Separately, in April, the EPA finalized new regulations under Section 111b of the Clean Air Act in an effort to reduce greenhouse gas emissions from electric generating units. Our two co-owned coal facilities are within the scope of these regulations. We are evaluating the impact compliance will have on our operations. It is anticipated that the regulation will be legally challenged or could be modified if there is a change in administration.

另外，今年4月，美國環保署根據《清潔空氣法》第111b條制定了新的法規，旨在減少發電機組的溫室氣體排放。我們共同擁有的兩個煤炭設施都屬於這些法規的範圍。我們正在評估合規性對我們的營運的影響。預計如果政府發生變動，該法規將面臨法律挑戰或可能被修改。

The EPA also finalized in April new regulations for mercury and air toxins and the management of discharge water and coal ash at our coal-fired power plants. While we continue to review and evaluate the regulations, we do not anticipate compliance will have a material impact on our operations.

美國環保署也於四月最終確定了針對汞和空氣毒素以及燃煤電廠廢水和煤灰管理的新法規。雖然我們會繼續審查和評估法規，但我們預計合規性不會對我們的營運產生重大影響。

Looking now to our manufacturing segment on slide 18, BTD and T.O. Plastics are navigating changing market conditions negatively impacting sales volumes. In response, they are taking actions to manage costs and drive operational efficiencies.

現在看第 18 張投影片上的製造部分，BTD 和 T.O.塑膠正在隨著市場環境的變化而變化，對銷售量產生負面影響。作為回應，他們正在採取行動管理成本並提高營運效率。

Turning to our end market outlook on slide 20, many of the end markets BTD serves are softening. And during the first quarter of 2024, we start to see some customers looking to in-source work to put excess capacity to use. Despite this softness, we expect programs we were previously awarded for new products to partially offset lower sales volumes in existing products and continue to expect productivity-related gains throughout the year.

回顧第 20 頁的終端市場展望，BTD 服務的許多終端市場正在走軟。在 2024 年第一季度，我們開始看到一些客戶尋求內部工作以利用過剩產能。儘管存在這種疲軟表現，但我們預計，先前獲得的新產品項目將部分抵消現有產品銷售的下降，並預計全年生產力將繼續上漲。

While the outlook for T.O. Plastics' primary end-market horticulture remains relatively stable for the ultimate end users, distributors continue to work through inventory previously purchased in response to select supply-chain-related concerns, thus negatively impacting our sales volumes. We currently expect sales volumes to return to more normal levels in the second half of 2024.

雖然 T.O. 的前景塑膠的主要終端市場園藝對於最終用戶來說仍然相對穩定，經銷商繼續處理先前購買的庫存以應對與供應鏈相關的選擇問題，從而對我們的銷售產生負面影響。我們目前預計銷售量將在 2024 年下半年恢復到更正常的水平。

Slide 21 provides an overview of our plastics segment. Sales volumes increased significantly in the first quarter of 2024 compared to the same time last year due to customer sales, volume growth, and distributor and end market demand.

幻燈片 21 概述了我們的塑膠部門。由於客戶銷售、銷售成長以及經銷商和終端市場的需求，2024 年第一季的銷售量與去年同期相比大幅成長。

It's important to note that while sales volumes were much higher quarter over quarter, sales volumes during Q1 2023 were well below normal levels as distributors were largely focused on destocking efforts. Further, sales volumes in Q1 of this year were still below the 2018 to 2022 historic levels.

值得注意的是，雖然銷售量較上季大幅成長，但由於經銷商主要致力於去庫存工作，2023 年第一季的銷售量遠低於正常水準。此外，今年第一季的銷售量仍低於 2018 年至 2022 年的歷史水準。

Slide 22 highlights historical sales prices of PVC pipe and the cost of resin. during the first quarter of 2024, the sales price of PVC pipe decreased more rapidly than the cost of resin and other input materials, resulting in lower spreads. Additionally, our Vinyltech site improvement and expansion project continues to progress well, and we look forward to bringing on our first installment of additional capacity online later this year.

幻燈片 22 重點介紹了 PVC 管的歷史銷售價格和樹脂成本。 2024年第一季度，PVC管銷售價格下降速度快於樹脂和其他投入材料成本的下降速度，導致價差縮小。此外，我們的 Vinyltech 站點改善和擴建項目繼續進展順利，我們期待在今年稍後上線第一批額外產能。

The capacity will be for large-diameter pipe, which Vinyltech has historically had to source from Northern Pipe Products. We're excited to bring these capabilities to Vinyltech to better serve our Southern customers while simultaneously freeing up large-diameter pipe capacity at our Northern Pipe Products facility.

該產能將用於生產大口徑管道，而 Vinyltech 先前一直從 Northern Pipe Products 採購此類管道。我們很高興將這些功能帶給 Vinyltech，以便更好地服務我們的南方客戶，同時釋放我們北方管道產品工廠的大口徑管道產能。

I will now turn it over to Todd to provide additional commentary on our first-quarter financial results and our expectations for the remainder of the year.

現在，我將把時間交給托德，讓他對我們的第一季財務表現和今年剩餘時間的預期提供進一步的評論。

Thank you, Chuck. And good morning, everyone. We delivered diluted earnings per share of $1.77 in the first quarter of 2024, nearly a 20% increase over the same time last year despite headwinds experienced within our electric and manufacturing segments.

謝謝你，查克。大家早安。2024 年第一季度，我們實現的每股攤薄收益為 1.77 美元，儘管我們的電力和製造部門遭遇阻力，但仍比去年同期增長了近 20%。

Our Plastics segment produced stronger-than-anticipated financial results in the first quarter of 2024. And due to its performance and our revised expectations for the remainder of the year, we have increased the midpoint of our 2024 earnings guidance by 21%.

我們的塑膠部門在 2024 年第一季取得了優於預期的財務表現。而由於其表現以及我們對今年剩餘時間的修正預期，我們將 2024 年獲利預期中位數提高了 21%。

Please follow along on Slide 26 as I begin with an overview of our first-quarter financial results by segment. Electric segment earnings decreased $751,000 or 3% from the first quarter of 2023, driven by the impact of unfavorable weather, higher operating and maintenance expenses, primarily relating to higher labor costs and increased depreciation expense.

請繼續關注投影片 26，我將首先按部門概述我們第一季的財務表現。電力部門收益較 2023 年第一季減少 751,000 美元或 3%，主要原因是惡劣天氣的影響、更高的營運和維護費用（主要與更高的勞動力成本和增加的折舊費用有關）。

These items were partially offset by increased rider revenue, the interim rate increase in North Dakota stemming from our general rate case filing, and higher commercial and industrial sales. Quarter over quarter, the impact of unfavorable weather was $0.09 per share as our service territory experienced a much warmer start to the year. For example, temperatures in March were about 12 degrees warmer than in 2023.

這些項目被附加條款收入的增加、由於我們提交一般費率案件而導致的北達科他州臨時費率上調以及商業和工業銷售額的增加部分抵消。與上一季相比，由於我們服務區域年初的氣溫明顯升高，不利天氣的影響為每股 0.09 美元。例如，3月份的氣溫比2023年高出約12度。

Manufacturing segment earnings decreased $1.6 million or 23% compared to the first quarter of 2023, primarily due to the lower sales volumes at both of our manufacturing businesses.

製造部門的收益與 2023 年第一季相比減少了 160 萬美元，即 23%，這主要是由於我們兩家製造業務的銷售量均有所下降。

The decrease in sales volumes and earnings quarter over quarter was largely driven by T.O. Plastics customers continuing to work through inventory previously purchased in response to supply-chain-related challenges. We are forecasting a rebound in sales volumes later this year as we anticipate customers being through their destocking efforts in advance of the next seasonal purchasing period.

銷售量和收益環比下降主要是由於 T.O. 導致的。塑膠客戶繼續利用先前購買的庫存來應對與供應鏈相關的挑戰。我們預測今年稍後銷售量將反彈，因為我們預計客戶將在下一個季節性採購期之前完成去庫存工作。

BTD experienced a slight decrease in sales volumes quarter over quarter due to softening end market demand across multiple sectors, but we continue to benefit from diversity in end markets and customers. In response to the headwinds experienced at both manufacturing businesses, we are taking actions to tightly manage costs in an effort to mitigate the impact to overall 2024 earnings.

由於多個領域的終端市場需求疲軟，BTD 的銷售量較上季略有下降，但我們繼續受益於終端市場和客戶的多樣性。為了應對兩家製造業所面臨的阻力，我們正在採取措施嚴格管理成本，以盡量減輕對 2024 年整體收益的影響。

Plastics segment earnings increased $13 million or approximately 39% from the first quarter of 2023. Higher sales volumes led to the increase in earnings, and this was partially offset by margin compression with PVC pipe prices continuing to gradually decline.

塑膠部門的收益較 2023 年第一季增加了 1,300 萬美元，增幅約 39%。銷售量增加導致獲利增加，但由於 PVC 管價格持續逐步下降導致利潤率壓縮，部分抵消了銷售量增加的影響。

Sales volumes increased 56% compared to the same period last year due to customer sales volume growth and strong distributor and end market demand. Milder weather seems to have contributed to higher sales volumes as it allowed for construction work to begin earlier than normal.

由於客戶銷售量成長以及經銷商和終端市場需求強勁，銷售量與去年同期相比成長了56%。天氣變暖似乎推動了銷售量的上升，因為這使得建築工作比平常更早開始。

Additionally, sales volumes in the first quarter of 2023 were much lower than usual as distributors, our primary customers, were focused on destocking efforts after purchasing higher levels of inventory in 2022 in response to supply-chain-related disruption and challenges.

此外，2023 年第一季的銷售量遠低於平常，因為分銷商（我們的主要客戶）在 2022 年為應對供應鏈相關的中斷和挑戰而購買了更多庫存後，專注於去庫存。

Gross profit margins declined in the first quarter of 2024 as PVC pipe sales prices declined more than the change in the cost of resin and other input material costs. Sales prices of PVC pipe declined 15% from the same time last year.

2024 年第一季毛利率下降，因為 PVC 管線銷售價格的下降幅度超過樹脂成本和其他投入材料成本的變化。PVC管銷售價格較去年同期下降15%。

Corporate costs declined nearly $1.2 million from the first quarter of 2023, primarily driven by returns earned on our short-term investments as our cash balance is higher and interest rates have increased. We continue to have a very solid balance sheet with a higher level of earnings and cash generated from the operations of our diversified portfolio of businesses.

公司成本較 2023 年第一季下降了近 120 萬美元，主要原因是我們的現金餘額較高且利率上升，導致我們短期投資獲得的回報減少。我們的資產負債表繼續非常穩健，多元化業務組合的營運創造了更高的利潤和現金水準。

Turning to slide 27, our consolidated equity layer as of March 31, 2024, was 61.3%, and our return on equity over the last 12 months was 22.1%. We continue to be in an enviable position with a strong balance sheet and ample liquidity to fund growth opportunities without having to issue additional equity.

前往投影片 27，截至 2024 年 3 月 31 日，我們的合併股權層為 61.3%，過去 12 個月的股本回報率為 22.1%。我們繼續處於令人羨慕的地位，擁有強勁的資產負債表和充足的流動性，可以為成長機會提供資金，而無需發行額外的股權。

Turning to slide 28, we are increasing our 2024 diluted earnings per share guidance to a range of $6.23 to $6.53 from our initial range of $5.13 to $5.43 due to stronger-than-expected Plastics segment performance in Q1 and our revised expectations for the segment throughout the remainder of the year. This increases the midpoint of our guidance to $6.38 or $1.10 increase per share.

轉到幻燈片 28，我們將 2024 年攤薄每股收益預期從最初的 5.13 美元至 5.43 美元上調至 6.23 美元至 6.53 美元，原因是第一季度塑料部門的業績好於預期，且我們對今年剩餘時間該部門的預期進行了修訂。這將我們的預期中位數提高至 6.38 美元，即每股增加 1.10 美元。

We are maintaining our electric segment and corporate cost center earnings guidance for 2024. Despite the impact of unfavorable weather in the first quarter, our electric segment has positioned well to overcome these headwinds based on updated estimates for sales volumes and the impact of our sales decoupling mechanism in Minnesota.

我們維持 2024 年電力部門和企業成本中心獲利預測不變。儘管第一季受到不利天氣的影響，但根據最新的銷售量估計和我們在明尼蘇達州的銷售脫鉤機制的影響，我們的電氣部門已經準備好克服這些不利因素。

We are increasing our plastics segment earnings guidance as the sales price of PVC pipe has been more stable than we originally anticipated for 2024. Sales prices continued to recede but at a much more gradual rate than was assumed in our initial 2024 guidance, and relatively small changes in pipe prices significantly impact plastics segment earnings. Additionally, with strong end market demand, we expect sales volumes to be higher than assumed in our initial 2024 guidance.

由於 PVC 管的銷售價格比我們最初預期的 2024 年更加穩定，我們上調了塑膠部門的獲利預期。銷售價格繼續下降，但下降速度比我們最初的 2024 年指引中假設的要緩慢得多，管道價格的相對較小的變化對塑膠部門的收益產生了重大影響。此外，由於終端市場需求強勁，我們預期銷售量將高於我們最初的 2024 年指引中的假設。

We are decreasing our 2024 earnings guidance for our manufacturing segment due to lower expected sales volumes, compressed operating margins, and reduced research and development tax credits for BTD. Compared to 2023, we anticipate lower sales volumes in the horticulture, lawn and garden, recreational vehicle, and agriculture end markets. This reduction in sales volumes, combined with fixed manufacturing costs, negatively impacts operating margins.

由於預期銷售量下降、營業利潤率壓縮以及 BTD 研發稅收抵免減少，我們正在下調製造部門 2024 年盈利預期。與 2023 年相比，我們預計園藝、草坪和花園、休閒車和農業終端市場的銷售量將下降。銷售量的減少加上固定製造成本對營業利潤率產生了負面影響。

With the changes made to our earnings guidance for the year, we anticipate our earnings mix for 2024 to be 34% electric and 66% non-electric, net of corporate costs. While this anticipated mix deviates from our long-term expected earnings mix of approximately 65% electric and 35% non-electric, the incremental cash flow will further position us to execute well on our growth strategies without the need for additional equity.

隨著我們對今年獲利預測的變化，我們預計 2024 年的獲利結構將為 34% 電力和 66% 非電力（扣除企業成本）。雖然這一預期組合偏離了我們長期預期的約 65% 電力和 35% 非電力的盈利組合，但增量現金流將進一步使我們能夠良好地執行我們的成長策略，而無需額外的股權。

Our five-year capital spending plan, which is a key driver of earnings growth for our electric segment, is included in more detail on slide 29. No changes have been made to this plan since it was first announced earlier this year during our year-end earnings call.

我們的五年資本支出計畫是我們電力部門獲利成長的主要驅動力，第 29 頁對此進行了更詳細的介紹。該計劃自今年稍早在我們年終收益電話會議上首次宣布以來，一直沒有做出任何改變。

As we continue to work towards a decision on our integrated resource plan in Minnesota and additional transmission grid enhancements are advanced, we will determine what updates, if any, are needed to our electric utilities' five-year capital spending plan.

隨著我們繼續努力就明尼蘇達州的綜合資源計劃做出決定，並進一步推進輸電網的改進，我們將確定我們的電力公用事業的五年資本支出計劃是否需要進行更新。

In order to finance our rate base growth at Otter Tail Power, we project issuing debt on an annual basis for the next four years. Slide 30 provides a summary of our financing plan for 2025 through 2028, following our $120 million private placement debt issuance completed in the first quarter of 2024. We continue to expect retiring and not replacing our only outstanding parent-level debt when the $80 million note matures in 2026.

為了資助 Otter Tail Power 的電費基礎成長，我們計劃在未來四年內每年發行債務。投影片 30 概述了我們在 2024 年第一季完成 1.2 億美元私募債務發行後的 2025 年至 2028 年的融資計畫。當 2026 年 8000 萬美元的票據到期時，我們仍然預計會償還而不是替換我們唯一未償還的母公司級債務。

Additionally, due to the significant amount of cash and earnings generated over the past few years, we have no external equity needs over the five-year period, avoiding any resulting dilution in earnings per share.

此外，由於過去幾年產生了大量現金和收益，我們在五年內不需要外部股權，從而避免了每股收益的稀釋。

We believe this differentiates us from many of our peers within the utility space who will need to access the equity markets to fund their rate base growth. We are positioned well to deliver upon our revised 2024 earnings guidance as well as meet our long-term investment targets as summarized on slide 33,

我們相信，這使我們與公用事業領域的許多同行有所區別，他們需要進入股票市場來為其費率基礎增長提供資金。我們已做好準備，實現修訂後的 2024 年獲利預期，並實現第 33 頁總結的長期投資目標。

Our diversified business model continues to produce above-average returns, serving us and our stakeholders well. We have many organic growth opportunities across our segments and are positioned to grow with our customers. We are in excellent position to support this growth with our strong balance sheet, ample access to liquidity, and investment-grade credit ratings.

我們多元化的商業模式持續產生高於平均水準的回報，為我們和我們的利害關係人提供良好的服務。我們在各個領域都有許多有機成長機會，並有能力與客戶共同成長。憑藉強大的資產負債表、充足的流動性和投資等級信用評級，我們完全有能力支持這一成長。

We are now ready to take your questions.

我們現在準備好回答你們的問題。

(Operator Instructions) Tim Winter, Gabelli Funds.

（操作員指示）Tim Winter，Gabelli Funds。

Good morning, gentlemen, and congratulations on another really, really good quarter. It looks like PVC continues to be strong. I'm just inquiring. Some of your neighboring utilities have recently spun off for a partial IPO. They're non-regulated businesses, and they've done very well. Any consideration of such a dynamic for the plastics division, given the strength?

先生們，早安，恭喜您又度過了一個非常非常好的季度。看起來 PVC 將繼續保持強勢。我只是問問。您所在地區的一些公用事業公司最近已剝離出來，進行了部分 IPO。它們是非監管企業，而且經營狀況非常好。考慮到塑膠部門的實力，是否考慮過這種動態？

Yes, Tim, we're in the middle of our strategic planning -- annual strategic planning process. And so as part of that, we do evaluate our portfolio and strategic options. Currently, we view our portfolio of businesses as very solid and our growth strategy is very solid, but we do consider alternatives every year.

是的，提姆，我們正處於策略規劃——年度策略規劃過程的中期。因此，作為其中的一部分，我們確實評估了我們的投資組合和策略選擇。目前，我們認為我們的業務組合非常穩健，我們的成長策略非常穩健，但我們每年都會考慮其他選擇。

Okay. Thank you.

好的。謝謝。

Thank you. I'm showing no further questions at this time. I would now like to turn it over to Chuck for closing comments.

謝謝。我目前沒有其他問題。現在我想將發言權交給查克，請他作最後評論。

We'll give it a second if there are any other questions.

如果還有其他問題，我們會再回覆。

Thank you for joining our call and your interest in Otter Tail Corporation. If you have any questions, please reach out to our Investor Relations team, and we look forward to speaking with you next quarter.

感謝您加入我們的電話會議並關注 Otter Tail Corporation。如果您有任何疑問，請聯絡我們的投資者關係團隊，我們期待下個季度與您交談。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

感謝大家參加今天的會議。該計劃確實結束了。您現在可以斷開連線。