Otter Tail Corp (OTTR) 2025 Q1 法說會逐字稿

Good morning, and welcome to Otter Tail Corporation's first-quarter 2025 earnings conference call. Today's call is being recorded. We will hold a question-and-answer session after the prepared remarks.

早安，歡迎參加 Otter Tail Corporation 2025 年第一季財報電話會議。今天的通話正在錄音。我們將在準備好的演講後舉行問答環節。

I will now turn the call over to the company for their opening comments.

我現在將電話轉給公司，請他們發表開場評論。

Good morning, and welcome to our first-quarter earnings conference call. My name is Tyler Nelson. I'm Otter Tail Corporation's Vice President of Finance. 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.

早上好，歡迎參加我們的第一季財報電話會議。我的名字是泰勒·尼爾森。我是 Otter Tail Corporation 的財務副總裁。昨晚，我們公佈了第一季的財務表現。您可以在我們的網站 ottertail.com 上查閱完整的收益報告和本次電話會議的投影片。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 are Chuck MacFarlane, Otter Tail Corporation's President and CEO; and Todd Wahlund, Otter Tail Corporation's Vice President and CFO. Before we begin, I want to remind you that we will be making forward-looking statements during the course of this call.

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。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。

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.

如投影片 2 所示，這些陳述代表了我們目前對未來事件的看法和期望。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示的結果不同。因此，請注意不要過度依賴這些聲明。

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 (technical difficulty)

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、發展而更新或修改前瞻性聲明的任何義務（技術難度）

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。

Well, thank you, Tyler, and good morning, and welcome to our first-quarter earnings call. Please refer to slide 4 as I begin my remarks with an overview of our first quarter highlights. I am proud of our team's effort and execution during the first quarter of the year. Our financial results in Q1 met our expectations, and we are on target to achieve our annual earnings guidance. Otter Tail Power officially completed its North Dakota rate case, implementing base rates in March.

好吧，謝謝你，泰勒，早上好，歡迎參加我們的第一季財報電話會議。請參閱投影片 4，我將以第一季亮點概述開始我的演講。我為我們團隊在今年第一季的努力和執行感到自豪。我們第一季的財務表現符合預期，並且我們有望實現年度獲利預期。Otter Tail Power 正式完成了北達科他州的利率案，並於三月實施了基準利率。

In addition, the team achieved an important milestone in working towards bringing a new large load onto our electric system. And during the quarter, we also completed the expansion of our BTD Georgia facility, an important project to enable future growth in our Southeast market.

此外，該團隊在為我們的電力系統帶來新的大負載方面取得了重要的里程碑。本季度，我們也完成了 BTD 喬治亞州工廠的擴建，這是一項重要項目，有利於推動我們東南市場的未來成長。

Slide 5 provides a summary of our first-quarter financial results and the expectations for the remainder of the year. We produced diluted earnings per share of $1.62 in the first quarter, a decline from the first quarter of last year, but in line with our expectations and on target to achieve our 2025 annual earnings guidance.

幻燈片 5 概述了我們的第一季財務業績以及對今年剩餘時間的預期。我們第一季的每股攤薄收益為 1.62 美元，較去年第一季有所下降，但符合我們的預期，並有望實現 2025 年年度收益指引。

Our Electric segment produced earnings growth in Q1, but as expected, earnings from our Manufacturing and Plastics segments declined based on industry conditions impacting these businesses.

我們的電氣部門在第一季實現了獲利成長，但正如預期的那樣，由於行業狀況對這些業務產生了影響，我們的製造和塑膠部門的利潤出現下降。

Our businesses are faced with a heightened level of uncertainty as we monitor developments in the US trade policy and macroeconomic conditions. Overall, we are well positioned to weather this period of uncertainty given the strength of our balance sheet, including ample liquidity and an experienced management team.

隨著我們監測美國貿易政策和宏觀經濟狀況的發展，我們的業務面臨高度的不確定性。整體而言，鑑於我們資產負債表的強勁，包括充足的流動性和經驗豐富的管理團隊，我們完全有能力度過這段不確定的時期。

Despite this uncertainty, we are affirming our 2025 earnings guidance with a midpoint of $5.88 per share. In a moment, Todd will provide a more detailed discussion of our first-quarter financial results as well as our outlook for the remainder of the year.

儘管存在不確定性，我們仍確認 2025 年獲利預測中位數為每股 5.88 美元。稍後，托德將更詳細地討論我們的第一季財務業績以及今年剩餘時間的展望。

Slide 6 outlines the uncertainty present in the current operating environment and the potential impacts to our business. We are actively monitoring the landscape of trade and tax policy and will respond to changes as necessary with the goal of minimizing the disruption to our businesses but also taking advantage of potential opportunities.

投影片 6 概述了目前營運環境中的不確定性及其對我們業務的潛在影響。我們正在積極關注貿易和稅收政策的情況，並將根據需要對變化做出反應，以盡量減少對我們業務的干擾，同時也利用潛在的機會。

The tariff exposure to Otter Tail Power is primarily on the materials and components used in our capital investments. Increased costs could impact the timing or the requested amount of recovery on our investments. Any customer impact would be spread over the life of the asset.

Otter Tail Power 的關稅風險主要在於我們資本投資中使用的材料和組件。成本增加可能會影響我們投資的回收時間或要求的回收金額。任何對客戶的影響都會分散到資產的整個生命週期。

Many major components are sourced domestically or from suppliers with some degree of supply chain flexibility. Certain components are sourced from Mexico or Canada and are currently exempted from additional tariffs as they are covered under the USMCA. We are working with our supplier partners to minimize tariff impacts.

許多主要零件均來自國內或具有一定供應鏈彈性的供應商。某些零件來自墨西哥或加拿大，由於受到 USMCA 的保護，目前可免徵額外關稅。我們正在與供應商合作夥伴合作，盡量減少關稅的影響。

Substantially, all of the raw material inputs used in our Manufacturing and Plastics segment businesses are domestically sourced, thus limiting our tariff exposure. Domestic steel prices have increased following the implementation of tariffs on imported steel.

基本上，我們的製造和塑膠部門業務使用的所有原材料投入都來自國內，這限制了我們的關稅風險。進口鋼材關稅實施後，國內鋼材價格上漲。

We expect higher steel prices will impact our raw material costs in the second half of 2025, but the earnings impact should be minimal as we are able to pass this cost increase on to our customers. We are monitoring for end market demand changes if tariffs produce elevated inflation or broad economic disruption.

我們預期鋼鐵價格上漲將影響我們 2025 年下半年的原物料成本，但由於我們能夠將成本上漲轉嫁給客戶，因此獲利影響應該很小。如果關稅導致通貨膨脹加劇或大規模經濟混亂，我們將監測終端市場需求的變化。

Turning to tax policy changes. We are closely monitoring for changes in the tax credit legislation expanded by the Inflation Reduction Act or IRA. Thus far, there has been a certain level of bipartisan support in Congress for maintaining renewable energy credits under the IRA. Our current expectation is that a partial repeal of the IRA is possible.

談到稅收政策變化。我們正在密切關注通貨膨脹削減法案（IRA）擴大的稅收抵免立法的變化。到目前為止，國會兩黨在一定程度上支持維持 IRA 下的再生能源信用額度。我們目前的預期是，愛爾蘭共和軍的部分廢除是可能的。

At this point, we are uncertain as to how the tax policy may change, but we are not expecting potential changes to impact our near-term renewable investments including our wind repowering projects and our Solway solar project as we expect these investments to qualify under existing technology-specific rules.

目前，我們不確定稅收政策將如何變化，但我們預計潛在的變化不會影響我們近期的再生能源投資，包括我們的風力發電項目和我們的 Solway 太陽能項目，因為我們預計這些投資符合現有的特定技術規則。

Tax credit transferability may be a component of the IRA that is at risk to be modified. As a reminder, all benefits of tax credits, including when transferred, are fully returned to our retail customers. To this point, we have not needed to transfer any tax credits and don't expect to in the near term.

稅收抵免可轉移性可能是 IRA 中面臨修改風險的一個組成部分。提醒一下，所有稅收抵免的優惠，包括轉移時的優惠，都將全額退還給我們的零售客戶。到目前為止，我們不需要轉移任何稅收抵免，並且預計短期內也不會轉移。

We are able to monetize tax credits generated by Otter Tail Power to offset the tax obligations of other businesses, flowing these tax credits back to Otter Tail Power's customers. We anticipate transferability will continue to be available for existing and in-process projects.

我們能夠將 Otter Tail Power 產生的稅收抵免貨幣化，以抵消其他企業的稅務義務，並將這些稅收抵免回饋給 Otter Tail Power 的客戶。我們預計現有和正在進行的項目將繼續具有可轉移性。

Over the long term, I am confident our team will effectively respond to any changes in tax policy, ensuring we continue to select the appropriate capital investments to provide reliable and affordable energy to our customers.

從長遠來看，我相信我們的團隊將有效應對稅收政策的任何變化，確保我們繼續選擇適當的資本投資，為我們的客戶提供可靠且負擔得起的能源。

Now turning to an update on our electric platform on slide 8. As I mentioned, Otter Tail Power concluded its North Dakota general rate case with a final compliance filing and implementation of final rates in March. As we have previously discussed, this was a fully settled case that was approved by the North Dakota Commission late last year. Overall, we view the outcome of the case to be constructive, balancing the interests of all stakeholders.

現在轉到幻燈片 8 上有關我們電動平台的更新。正如我所提到的，Otter Tail Power 已於 3 月結束了其在北達科他州的一般費率案件，並提交了最終合規申請並實施了最終費率。正如我們之前所討論的，這是一個已完全解決的案件，並在去年年底獲得了北達科他州委員會的批准。總體而言，我們認為該案件的結果是建設性的，平衡了所有利害關係人的利益。

As we look forward, we anticipate a rate case filing in South Dakota in the middle of 2025. In addition, our team is currently evaluating the potential filing in Minnesota, which if filed, would most likely happen late this year. We last filed a rate case in South Dakota in 2018 and in Minnesota in 2020.

展望未來，我們預計南達科他州將於 2025 年中期提起費率訴訟。此外，我們的團隊目前正在評估在明尼蘇達州提交申請的可能性，如果提交，很可能在今年稍後進行。我們上一次提起費率訴訟是在 2018 年在南達科他州，2020 年在明尼蘇達州。

Turning to slide 9. We are affirming our electric segment capital investment and rate base growth projections through 2029. We expect this customer-focused investment plan to produce a compounded annual growth rate and rate base of 9%, and we expect to convert that rate base growth into earnings per share growth and an approximate 1:1 ratio.

翻到第 9 張投影片。我們確認了到 2029 年電力部門資本投資和費率基準成長預測。我們預計這項以客戶為中心的投資計劃將產生 9% 的複合年增長率和利率基數，並且我們預計將該利率基數增長轉化為每股收益增長和大約 1：1 的比例。

Slides 10 and 11 provide an overview of ongoing and future capital projects. I will now touch on a few key updates. Our advanced metering infrastructure project is substantially complete as we have updated over 170,000 meters, allowing us to offer energy and cost saving options to our customers and improving their overall service experience.

投影片 10 和 11 概述了正在進行的和未來的資本項目。現在我將談及一些重要的更新。我們的先進計量基礎設施項目已基本完工，我們已更新了超過 170,000 個電錶，這使我們能夠為客戶提供節能和節省成本的選擇，並改善他們的整體服務體驗。

Our wind repowering project continues to progress well. We completed the equipment upgrades at the first of four owned wind energy centers in the fourth quarter last year and construction continues with expected completion of the other three by the end of this year. We continue to anticipate the project will lower customer bills through available tax credits and increased energy output. An excellent example of investing capital that serves both our customers and investors.

我們的風力發電專案持續進展順利。我們在去年第四季完成了四個自有風能中心中第一個中心的設備升級，目前建設工作仍在繼續，預計其餘三個中心將於今年年底完工。我們繼續預計該項目將透過可用的稅收抵免和增加能源輸出來降低客戶帳單。這是為我們的客戶和投資者服務的投資資本的絕佳範例。

Project development and work on regulatory planning continues on our two solar projects, which collectively will add up to 345 megawatts of solar generation to our portfolio. We believe these solar facilities fit the requirements of our approved Minnesota Integrated Resource Plan and represent an opportunity to provide increasingly clean electric service that is also cost effective to our customers.

我們的兩個太陽能專案的專案開發和監管規劃工作仍在繼續，這兩個專案將為我們的投資組合增加高達 345 兆瓦的太陽能發電量。我們相信這些太陽能設施符合我們批准的明尼蘇達州綜合資源計劃的要求，並代表著為我們的客戶提供日益清潔且具有成本效益的電力服務的機會。

Turning to slide 11. Development work continues on three MISO Tranche 1 projects Otter Tail Power will co-own. We've encountered some landowner and local government resistance to siting and certain permitting for one of the projects, which has delayed our development progress. Our team continues to engage with landowners, seeking their feedback and input while working towards a solution. Our team is scrutinizing the project time line to maintain our planned completion date.

翻到第 11 張投影片。Otter Tail Power 將共同擁有的三個 MISO Tranche 1 項目的開發工作仍在繼續。我們遇到了一些土地所有者和當地政府對其中一個項目的選址和某些許可的抵制，這延誤了我們的開發進度。我們的團隊繼續與土地所有者接觸，尋求他們的回饋和意見，同時努力尋求解決方案。我們的團隊正在仔細審查專案時間表以確保按計劃完成。

Development work has begun on our MISO Tranche 2.1 projects. We are working closely with our co-owners on project planning and regulatory matters including filing the first -- right of first refusal notices with our state commissions in the first quarter. These projects continue to be important developments to enhance the reliability and efficiency of the electric grid. These investments are expected to have very limited impact on our retail customer rates as these costs are allocated across the entire MISO footprint.

我們的 MISO Tranche 2.1 專案的開發工作已經開始。我們正在與我們的共同所有者就專案規劃和監管事宜進行密切合作，包括在第一季向我們的州委員會提交優先購買權通知。這些項目對於提高電網的可靠性和效率持續發揮重要作用。這些投資預計對我們的零售客戶費率的影響非常有限，因為這些成本分攤到了整個 MISO 業務範圍內。

Turning to slide 12. Otter Tail Power remains well positioned to attract and support large loads. We have over 1,000 megawatts of potential new large loads in our pipeline. This is a significant opportunity relative to our existing 1,000-megawatt system.

翻到第 12 張投影片。Otter Tail Power 仍然能夠很好地吸引和支撐大負載。我們的管道中有超過 1,000 兆瓦的潛在新大負載。相對於我們現有的 1,000 兆瓦系統而言，這是一個重大機會。

We aim to bring one to two large customers online in the next one to three years with the goal to grow with them in support of their electric service needs. As I previously mentioned, we did receive an important milestone in the first quarter, executing a service agreement with a new customer. We are now working to receive regulatory approval for this new load along with other steps necessary to commence service. We are excited about the opportunity to support this unique customer locating next to our Big Stone Plant.

我們的目標是在未來一到三年內讓一到兩位大客戶上線，並與他們共同成長，滿足他們的電力服務需求。正如我之前提到的，我們在第一季確實取得了一個重要的里程碑，與一位新客戶簽訂了服務協議。我們目前正在努力獲得此新負載的監管部門批准以及開始提供服務所需的其他步驟。我們很高興有機會為這家位於我們大石材廠旁的獨特客戶提供支援。

Customer load is expected to be approximately 155 megawatts comprised of 3 megawatts of firm load and approximately 152 megawatts of nonfirm load. The firm load will be supplied by Otter Tail Power generation through the electric grid. The nonfirm load will be served by market energy and operate during certain periods. We are targeting an in-service date later this year subject to obtaining required regulatory approvals and construction of the distribution assets necessary to serve the load.

預計客戶負載約為 155 兆瓦，其中包括 3 兆瓦的固定負載和約 152 兆瓦的非固定負載。穩定負載將由 Otter Tail Power 發電公司透過電網提供。非固定負載將由市場能源提供服務並在特定時期運作。我們計劃在今年稍後投入使用，但前提是獲得必要的監管部門批准，並建立滿足負載需求所需的配電資產。

We have and we will continue to be thoughtful in our negotiations to ensure that we are appropriately mitigating any potential adverse implications of adding new large load to our existing customer base. Adding new loads, if appropriately managed, will not only benefit us, but also our current customers as it enables us to spread out our existing fixed costs and thereby benefiting our existing customers.

我們已經並將繼續在談判中深思熟慮，以確保我們能夠適當減輕為現有客戶群增加新的大負荷所帶來的任何潛在不利影響。如果管理得當，增加新負載不僅會使我們受益，而且會使我們現有的客戶受益，因為它使我們能夠分攤現有的固定成本，從而使我們現有的客戶受益。

We remain committed to maintaining affordable electric service rates for our customers and have demonstrated the ability to do so for many years. As slide 13 illustrates, Otter Tail Power has some of the lowest electric rates in the nation with our 2024 rates, 30% below the national average and 16% below our regional peers.

我們始終致力於為客戶維持可負擔的電力服務價格，並且多年來已經證明了我們有能力做到這一點。如投影片 13 所示，Otter Tail Power 的 2024 年電價是全國最低的電價之一，比全國平均低 30%，比我們地區的同行低 16%。

I will now transition to our manufacturing platform, starting on slide 15, with an overview of industry conditions served by our manufacturing segment. Both BTD and T.O. Plastics continue to confront end market demand headwinds in most of the markets we serve. We are seeing some stabilization in the construction and lawn and garden end markets as dealer inventories are normalizing.

現在，我將從第 15 張投影片開始轉到我們的製造平台，概述我們的製造部門所服務的產業狀況。BTD 和 T.O.在我們服務的大多數市場中，塑膠繼續面臨終端市場需求的阻力。隨著經銷商庫存恢復正常，我們看到建築、草坪和花園終端市場穩定。

The recreational vehicle and agriculture markets continue to be challenged with a high level of new and used inventories in the channel and softening commodity prices weighing on farm income specifically impacting the ag economy. The horticulture market served by T.O. Plastics has also stabilized. However, the extent and timing of sales volume recovery remains unclear.

休閒車和農業市場持續面臨挑戰，通路中新舊庫存水準高，大宗商品價格疲軟對農場收入造成壓力，尤其影響了農業經濟。T.O. 服務的園藝市場塑膠價格也已趨於穩定。然而，銷量復甦的程度和時間仍不明確。

Distributor and customer inventories are at low levels and our business is well positioned to respond as demand returns. Low-priced import competition continues to be a challenge, tariffs on these products may create an opportunity for increased sales volumes. We continue to monitor end market conditions along with the general economic environment.

經銷商和客戶的庫存處於較低水平，隨著需求的回升，我們的業務已做好充分準備。低價進口競爭仍然是一個挑戰，對這些產品徵收關稅可能為增加銷售量創造機會。我們將繼續監測終端市場狀況以及總體經濟環境。

While there is a heightened level of uncertainty, our management teams are experienced in operating through periods of dynamic microeconomic and industry conditions. We continue to tightly manage costs and be prudent in our capital spending while we're also being ready to respond when market conditions improve.

儘管存在較大的不確定性，但我們的管理團隊在動態的微觀經濟和產業條件時期擁有豐富的營運經驗。我們將繼續嚴格管理成本，審慎進行資本支出，同時也做好在市場狀況改善時做出反應的準備。

Despite this downturn cycle, we remain confident in the segment's long-term fundamentals. We expect to focus on reshoring manufacturing operations to the US, which could be aided by changes in tariff policy as well as the existing housing shortage and power demand growth to support volumes over the long term. Additionally, we expect large equipment manufacturers to continue to look to outsource an increasing portion of their work once end market conditions improve.

儘管經歷了這個低迷週期，我們仍然對該行業的長期基本面充滿信心。我們預計將重點關注將製造業務轉移回美國，關稅政策的變化以及現有的住房短缺和電力需求成長可能有助於長期支持產量。此外，我們預計，一旦終端市場條件改善，大型設備製造商將繼續尋求將越來越多的工作外包。

Slide 16 provides an overview of our Plastics segment's pricing and volume trends. Our sales prices of PVC pipe have steadily declined since peaking in mid-2022, decreasing 11% in the first quarter of 2025 compared to the same period last year.

幻燈片 16 概述了我們塑膠部門的定價和銷售趨勢。我們的 PVC 管銷售價格自 2022 年中期達到高峰以來穩定下降，2025 年第一季與去年同期相比下降了 11%。

Sales volumes increased 13% in the quarter from the combination of strong distributor and end market demand and the incremental volume from our capacity expansion completed in late 2024. Our new large diameter line at our Phoenix location is operating as we expected and we are pleased with the output in the first full quarter of operations.

由於經銷商和終端市場需求強勁，加上我們在 2024 年底完成的產能擴張帶來的增量，本季銷售量成長了 13%。我們位於鳳凰城工廠的新型大直徑生產線的運作符合我們的預期，我們對第一個完整季度的產量感到滿意。

Our first quarter results also benefited from lower resin costs, which was driven by increased domestic supply of PVC resin. We are monitoring end market conditions that could negatively impact our sales volumes, specifically those that impact residential or commercial development.

我們第一季的業績也受惠於樹脂成本的下降，這是由於國內 PVC 樹脂供應增加所致。我們正在監控可能對我們的銷售量產生負面影響的終端市場狀況，特別是那些影響住宅或商業開發的市場狀況。

Turning to slide 17. Our manufacturing platform remains well positioned to support future growth opportunities. Work continues on the second phase of our expansion at our Phoenix facility. We are on track to bring the second extrusion line and related infrastructure online early next year. This will add an additional 26 million pounds of capacity, which, along with the Phase 1 line will increase our total capacity by approximately 15%.

翻到第 17 張投影片。我們的製造平台仍處於有利地位，可以支持未來的成長機會。我們鳳凰城工廠擴建的第二階段工程仍在繼續。我們計劃於明年初將第二條擠壓生產線和相關基礎設施投入使用。這將增加 2,600 萬磅的產能，加上第一階段的生產線，將使我們的總產能增加約 15%。

We are pleased to have completed our BTD Georgia facility expansion project in the first quarter of the year. The project was completed on time and on budget. We expect all manufacturing equipment to be installed and ramping up to full production capacity over the remainder of the year. This project positions us well to grow with our customers that are expanding in the Southeast market. We anticipate the project will increase production capacity up to $35 million in incremental annual sales.

我們很高興在今年第一季完成了 BTD 喬治亞州工廠擴建工程。此項目按時、按預算完成。我們預計所有製造設備將在今年剩餘時間內安裝並達到滿載生產能力。該項目使我們能夠與在東南市場不斷擴張的客戶一起成長。我們預計該項目將使生產能力增加至每年 3500 萬美元的增量銷售額。

I'll now turn it over to Todd to provide his financial update.

現在我將把時間交給托德來提供他的財務更新。

Thank you, Chuck, and good morning, everyone. As illustrated on slide 19, we produced diluted earnings per share of $1.62 in the first quarter of the year, an 8% decline from the same period last year. Please follow along on slides 20 and 21 as I provide an overview of our first quarter results by segment.

謝謝你，查克，大家早安。如投影片 19 所示，今年第一季度，我們的每股攤薄收益為 1.62 美元，比去年同期下降了 8%。請繼續關注投影片 20 和 21，我將按部門概述我們的第一季業績。

Electric segment earnings increased 10% in the first quarter, driven by favorable weather conditions compared to the same period last year, an increase in sales volumes and increased rider revenues from the recovery of our ongoing capital investments.

第一季度，電動部門獲利成長了 10%，這得益於與去年同期相比有利的天氣條件、銷量的成長以及我們持續資本投資的恢復帶來的乘客收入的增加。

Heating degree days in the first quarter of 2025 approximated normal levels, but were elevated compared to the first quarter of last year, which was unseasonably warm in our service territory. These increases in revenues were partially offset by increased depreciation and interest expense from our capital investments and associated financing costs.

2025 年第一季的暖氣度日數接近正常水平，但與去年第一季相比有所升高，去年第一季我們服務區域的氣溫異常溫暖。這些收入的成長部分被我們資本投資和相關融資成本的折舊和利息支出的增加所抵銷。

Manufacturing segment earnings decreased $0.09 per share, primarily due to lower sales volumes, along with increased production costs and unfavorable product mix and the impact of product pricing pressures. As Chuck mentioned, we continue to see soft end market demand, especially for recreational vehicles and agricultural equipment.

製造部門每股收益下降 0.09 美元，主要原因是銷售量下降，生產成本增加，產品結構不利以及產品定價壓力的影響。正如查克所提到的，我們繼續看到軟端市場需求，尤其是休閒車和農業設備。

Our team is focused on managing costs in the business, aligning our cost structure with the current demand environment. Despite the down cycle, the fundamentals of this segment remain strong, and we continue to benefit from the incremental earnings and cash flow generated by these businesses.

我們的團隊專注於管理業務成本，使我們的成本結構與當前的需求環境保持一致。儘管處於下行週期，但該部門的基本面依然強勁，我們繼續受益於這些業務產生的增量收益和現金流。

Turning to slide 21. Our Plastics segment produced diluted earnings per share of $1.03 in the first quarter of 2025, a decrease of 7% compared to the first-quarter last year. This expected decline was driven by the continued reduction in product prices. The average sales price of PVC pipe declined 11% compared to the first quarter of 2024. This continues the downward trend we have experienced since the middle of 2022 after PVC pipe pricing reached its high point.

翻到第 21 張投影片。我們的塑膠部門在 2025 年第一季的每股攤薄收益為 1.03 美元，與去年第一季相比下降了 7%。這項預期下降是由於產品價格持續下降所致。PVC管的平均銷售價格與2024年第一季相比下降了11%。這延續了自 2022 年中期 PVC 管線價格達到高點以來所經歷的下降趨勢。

Partially offsetting the decline in pricing was a 13% increase in sales volumes. The large diameter pipe capacity we added late last year contributed to this increased sales volume and we continue to see strong distributor and end market demand across our territory.

銷售量成長 13%，部分抵銷了價格的下降。我們去年年底增加的大口徑管道產能促進了銷售量的成長，我們繼續看到整個地區的分銷商和終端市場需求強勁。

First-quarter earnings also benefited from lower material costs as resin prices have declined due to increased domestic supply levels stemming from new resin production capacity and a soft export market for PVC resin. Finally, our corporate costs were higher in the first quarter of 2025 primarily due to an increase in employee medical claim levels under our self-insured plan.

第一季的收益也受惠於材料成本的降低，因為新樹脂生產能力增加導致國內供應水準下降，以及 PVC 樹脂出口市場疲軟。最後，2025 年第一季我們的公司成本較高，主要是由於我們的自保計劃下員工醫療索賠水準增加。

Turning to slide 22. Our balance sheet remains very strong. Our consolidated equity layer as of March 31 was 62%. We have available borrowing capacity on both the parent and Otter Tail Power credit facilities, which, along with our $280 million of cash and equivalents, provides for a total available liquidity of over $600 million.

翻到第 22 張投影片。我們的資產負債表依然非常強勁。截至 3 月 31 日，我們的合併股權層級為 62%。我們擁有母公司和 Otter Tail Power 信貸機構的可用借貸能力，加上我們的 2.8 億美元現金和等價物，總計可提供超過 6 億美元的可用流動資金。

Our position of financial strength ensures we are well positioned to weather a period of economic uncertainty to deliver on our growth strategy and consistently deliver long-term shareholder value.

我們的財務實力確保我們能夠安然度過一段經濟不確定時期，實現我們的成長策略並持續為股東創造長期價值。

On slide 23, we are affirming our 2025 diluted earnings per share guidance range of $5.68 to $6.08, which is expected to produce a return on equity near 14%. Our guidance reflects Electric segment earnings growth of approximately 7% and a continued decline in Plastics segment earnings as PVC pipe prices continue to decline. In addition, manufacturing segment earnings are anticipated to decline as end market conditions remain challenging.

在第 23 張投影片上，我們確認 2025 年每股攤薄收益指引範圍為 5.68 美元至 6.08 美元，預計股本回報率將接近 14%。我們的預期反映出電氣部門獲利成長約 7%，而隨著 PVC 管道價格持續下跌，塑膠部門獲利將持續下降。此外，由於終端市場狀況依然嚴峻，製造業部門的獲利預計也將下降。

I will now advance to slide 24. With a combination of a high-growth electric utility and a manufacturing platform that provides enhanced returns and incremental cash flows, we have a proven track record of delivering outstanding growth levels for our investors. Based on the midpoint of our 2025 guidance range, we are forecasting our consolidated five-year compounded annual growth rate in earnings per share to be over 20%. Even without the impact of plastic segment earnings, we expect this growth rate to exceed 8%.

我現在看第 24 張投影片。憑藉高成長電力事業和提供增強回報和增量現金流的製造平台，我們已為投資者提供了出色的成長水平，並擁有良好的業績記錄。根據我們 2025 年指引範圍的中點，我們預測每股盈餘的綜合五年複合年增長率將超過 20%。即使不考慮塑膠部門獲利的影響，我們預計這一成長率將超過8%。

Slide 25 presents our customer-focused capital investment plan for years 2025 through 2029. The $1.4 billion of capital investments in our Electric segment will benefit our customers and investors and will be a key driver of earnings growth for this business over the five-year period. Beyond our base five-year capital spending plan, we project up to $650 million of incremental capital investment opportunity at Otter Tail Power.

第 25 張投影片展示了我們 2025 年至 2029 年以客戶為中心的資本投資計畫。我們在電力部門的 14 億美元資本投資將使我們的客戶和投資者受益，並將成為該業務五年內獲利成長的主要驅動力。除了我們的基本五年資本支出計劃之外，我們還預計 Otter Tail Power 的增量資本投資機會將高達 6.5 億美元。

Our base capital plan for 2025 through 2029 does not currently include any capital investment for wind generation approved in our Minnesota Integrated Resource Plan as we continue to evaluate whether building and owning a new facility or contracting the energy through a purchase power agreement is most beneficial to our customers.

我們 2025 年至 2029 年的基本資本計畫目前不包括明尼蘇達州綜合資源計畫中批准的任何風力發電資本投資，因為我們正在繼續評估建設和擁有新設施或透過購買電力協議簽訂能源合約是否對我們的客戶最有利。

Further, the plan does not include any capital investment relating to battery storage approved in our IRP or any dual field related projects to address potential changes to MISO capacity requirements. This plan also does not include any delivery investment relating to potential new large loads. For every $100 million of incremental capital investment, we estimate our rate base compounded annual growth rate would increase by approximately 75 basis points.

此外，該計劃不包括任何與我們 IRP 中批准的電池儲存相關的資本投資或任何雙場相關項目，以應對 MISO 容量需求的潛在變化。該計劃也不包括與潛在的新大宗貨物有關的任何運送投資。我們估計，每增加 1 億美元的資本投資，我們的利率基準複合年增長率將增加約 75 個基點。

Slide 26 summarizes our five-year financing plan. Even with our robust capital spending plan, we expect to finance the entire five-year growth plan without any equity issuances, given our current cash balance and cash flow projections over the next five years. Annual debt issuances at Otter Tail Power are planned to help fund our rate base growth plan and maintain our authorized capital structure.

投影片 26 總結了我們的五年融資計畫。即使我們有強勁的資本支出計劃，但考慮到我們目前的現金餘額和未來五年的現金流預測，我們預計無需發行任何股票即可為整個五年增長計劃提供資金。Otter Tail Power 計劃每年發行債券，為我們的費率基準增長計劃提供資金，並維持我們的授權資本結構。

In the first quarter, we completed a $100 million private placement debt issuance with the first $50 million funded in March and the second $50 million to be funded in June of this year. We do not anticipate any further debt issuances in 2025. We have $80 million of total parent-level debt that all matures in late 2026 and we plan to retire this with existing cash and not replace it with new issuances. The value of our portfolio of companies is evident in our financing plan.

今年第一季度，我們完成了1億美元的私募債券發行，其中首筆5,000萬美元已於今年3月發行，第二筆5,000萬美元將於今年6月發行。我們預計 2025 年不會再發行任何債務。我們的母公司層級債務總額為 8,000 萬美元，全部將於 2026 年底到期，我們計劃用現有現金償還這些債務，而不是透過發行新債券來替代。我們的公司組合的價值在我們的融資計劃中顯而易見。

We project being able to eliminate the need for external equity for at least the next five years by investing the incremental cash flow generated by our manufacturing platform into our utilities rate base growth plan.

我們預計，透過將製造平台產生的增量現金流投資到我們的公用事業費率基礎成長計畫中，至少在未來五年內能夠消除對外部股權的需求。

On slide 27, we reaffirm our long-term earnings expectations of our Plastics segment to be in a range of $45 million to $50 million beginning in 2028. We continue to expect earnings to decline through 2027 based on the assumption that our sales prices continue to trend downward at a pace similar to what we have experienced since the latter part of 2022.

在第 27 張投影片上，我們重申塑膠部門的長期獲利預期，從 2028 年開始，獲利將在 4,500 萬美元至 5,000 萬美元之間。基於我們的銷售價格繼續以類似於 2022 年下半年以來所經歷的速度下降的假設，我們預計到 2027 年我們的盈利仍將下降。

Our long-term view of segment earnings also incorporates the impact of incremental sales volume growth and the expectation that raw material costs will generally increase with the rate of inflation. Considering these factors, we expect our gross profit margin percentage in 2028 to approximate the margin percentages we realized from this segment prior to 2021.

我們對分部獲利的長期看法也考慮了增量銷售量成長的影響以及原材料成本將普遍隨著通貨膨脹率而增加的預期。考慮到這些因素，我們預計 2028 年的毛利率百分比將接近 2021 年之前該部門實現的利潤百分比。

Slide 28 summarizes our investment targets. While we are currently navigating a period of heightened economic disruption and uncertainty, we remain confident in our ability to deliver on our investment targets over the long term. We continue to target a long-term earnings mix of 65% electric and 35% manufacturing.

投影片 28 總結了我們的投資目標。雖然我們目前正處於經濟動盪和不確定性加劇的時期，但我們仍然有信心能夠長期實現投資目標。我們繼續將長期獲利結構目標設定為 65% 電力和 35% 製造業。

We anticipate achieving this in 2028 as Electric segment earnings per share grows in line with rate base growth of 9%. The Manufacturing segment recovers from the current down cycle and Plastics segment earnings normalize.

我們預計，隨著電力部門每股收益與 9% 的費率基準成長率保持一致，我們將在 2028 年實現這一目標。製造業部門從目前的下行週期中復甦，塑膠部門的利潤恢復正常。

Following this, we project a long-term EPS growth rate of 6% to 8% that will be driven by our capital investment plan for our electric segment and the recent and planned capacity additions within our manufacturing platform. Our diversified business model continues to produce above average returns and generate sufficient cash to enable us to finance our growth initiatives without any external needs for at least the next five years.

在此之後，我們預計長期每股盈餘成長率將達到 6% 至 8%，這將受到我們針對電力部門的資本投資計劃以及我們製造平台內近期和計劃中的產能增加的推動。我們的多元化業務模式繼續產生高於平均水平的回報，並產生足夠的現金，使我們能夠在至少未來五年內無需任何外部需求的情況下為我們的成長計劃提供資金。

Finally, we are committed to a balanced capital allocation strategy, reinvesting in our businesses to support future growth while returning capital to our shareholders through our dividend, which we have paid for 86 consecutive years. The indicated annual dividend increase of 12% announced earlier this year reflects our position of financial strength and our commitment to delivering shareholder value.

最後，我們致力於平衡的資本配置策略，對我們的業務進行再投資以支持未來的成長，同時透過我們已經連續86年支付的股息向股東返還資本。今年稍早宣布的 12% 年度股息成長預期反映了我們的財務實力以及我們致力於實現股東價值的承諾。

We are now ready to take your questions.

我們現在準備好回答你們的問題。

(Operator Instructions) Sophie Karp (technical difficulty)

（操作員指示）Sophie Karp（技術難度）

So just wanted to maybe start with the Plastics. I'm just curious what volumes you have assumed in the guidance for this year. Maybe you can help us think about this directionally. And I guess, looking at slide 27 here, right, if you have -- if you expect to have an inflationary increase in input costs, why would you simultaneously expect the continued product price declines, right? So wouldn't those factors be offsetting each other? The inflationary pressures in the industry would -- could they be supportive of pricing?

所以也許只是想從塑膠開始。我只是好奇您在今年的指導中假設了多少數量。也許您可以幫助我們從方向性思考這個問題。我想，看看這裡的第 27 張投影片，如果您 - 如果您預計投入成本會出現通貨膨脹的增加，那麼您為什麼會同時預期產品價格會持續下降，對嗎？那麼這些因素不會互相抵消嗎？產業的通膨壓力會支持定價嗎？

Thank you, Sophie, for the question. I'll take the first one, and if I miss any of the questions you asked, just ask again here. So in terms of the volume for this year, it's lower single digits increase in our volume. We had very strong volumes in Q1 increase over 2024. We expect to have strong increases in the second quarter as well, but our guidance reflects a potential downturn in the second half of the year just as we're looking at housing starts and builder sentiment, we see that there is some risk in the second half of the year.

謝謝索菲提出的問題。我會回答第一個問題，如果我錯過了你提出的任何問題，請在這裡再次提問。因此，就今年的銷量而言，我們的銷量成長了較低的個位數。與 2024 年相比，我們第一季的銷售成長非常強勁。我們預計第二季度也會有強勁成長，但我們的預期反映了下半年可能出現的下滑，正如我們在觀察新屋開工和建築商情緒時所看到的那樣，我們看到下半年存在一些風險。

So we factored that into our guidance, but we still expect to be within the guidance range based on that potential downturn in the second half of the year. In terms of the inflationary increases, so basically, our core assumption here on our normal Plastics earnings is that we revert back to the same gross margin percentages that we had pre-2021. So at some point, those converge, and we expect to see that in that end of 2027 time frame. So as costs are increasing, prices are decreasing.

因此，我們將其納入了我們的指導範圍，但考慮到下半年的潛在下滑，我們仍然預計該數字將在指導範圍內。就通貨膨脹的成長而言，基本上，我們對正常塑膠收益的核心假設是，我們將恢復到 2021 年之前的毛利率百分比。因此，在某個時候，這些會融合在一起，我們預計會在 2027 年底看到這一點。因此，隨著成本的增加，價格就會下降。

Once we get to that gross margin percentage level, we expect that's when we'll see the new normal play out. So we are factoring in basically the continued about 12% decrease in prices per year that we've been seeing since September of 2022. Did I catch all your questions, Sophie or did I miss anything?

一旦我們達到該毛利率百分比水平，我們預計就會看到新常態的出現。因此，我們基本上將自 2022 年 9 月以來價格每年持續下降約 12% 的情況考慮在內。蘇菲，我是否了解你所有的問題，還是我遺漏了什麼？

Yeah. No, I think this is great. And then if I can squeeze one more in. Is it -- are you seeing yet any impact from some of your pipe competitors expanding capacity in your core regions? Or is it too early to see that?

是的。不，我認為這很棒。然後我是否可以再擠進一個。您是否看到一些管道競爭對手在核心地區擴大產能所產生的影響？還是現在就看出這一點還太早？

Sophie, we don't have complete visibility into that, but we anticipate that competitors are doing similar to us in adding incremental line capacity at various sites or debottlenecking the sites that they have. To our knowledge, we're not seeing new plants or that type of thing. But we anticipate that there are others replacing equipment, upgrading equipment, adding capacity, very similar to what we would be doing.

索菲，我們對此並不完全了解，但我們預計競爭對手也會採取與我們類似的措施，在各個站點增加增量線路容量或消除現有站點的瓶頸。據我們所知，我們沒有看到新植物或類似的東西。但我們預期其他人也會更換設備、升級設備、增加產能，這與我們所做的非常相似。

As there are no remaining questions in the queue, I will turn the call back over to Chuck for his closing remarks.

由於隊列中沒有剩餘問題，我將把電話轉回給查克，請他作最後發言。

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.

感謝您參加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。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。