Otter Tail Corp (OTTR) 2025 Q3 法說會逐字稿

Good morning and welcome to Otter Tail Corporation's 3rd quarter 2025 earnings conference call. Today's call is being recorded. We will hold a question-and-answer session after the prepared remarks. I will now turn this call over to the company for their opening comments.

早安，歡迎參加 Otter Tail 公司 2025 年第三季財報電話會議。今天的通話將會被錄音。在發言結束後，我們將進行問答環節。現在我將把電話轉交給該公司，請他們作開場白。

Good morning and welcome to our 3rd quarter of 2025 earnings conference call. My name is Beth Eiken, and I'm Otter Corporation's manager of investor relations. Last night we announced our 3rd 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.

早安，歡迎參加我們2025年第三季財報電話會議。我叫貝絲‧艾肯，是奧特公司投資人關係經理。昨晚我們公佈了第三季財務業績。我們的完整收益報告和本次電話會議的幻燈片可在我們的網站 ottertail.com 上查看。本次通話的錄音將於今日稍晚發佈在我們的網站上。

With me on the caller, Chuck McFarlane, Otter Tail Corporation's President and CEO, and Todd Wahlund, Otter Tail Corporation's Vice President and CFO.

與我一同通話的還有 Otter Tail Corporation 的總裁兼執行長 Chuck McFarlane，以及 Otter Tail Corporation 的副總裁兼財務長 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 risk and uncertainties, which may cause the actual results to differ from those presented here. So please be advised against placing undue reliance on any of these statements. Our forward-looking statements are described in more detail in our filings of the Securities and Exchange Commission, which we encourage you to review. Auto Corporation disclaims any duty to update or revise or forward-looking statements due to new information, future events, developments, or otherwise. I will now turn the call over to Otter Tail Corporation's President and CEO, Mr. Chuck MacFarlane.

在開始之前，我想提醒各位，我們將在本次電話會議中發表一些前瞻性聲明。如投影片 2 所示，這些陳述代表了我們目前的觀點和期望。關於未來事件。它們存在風險和不確定性，因此實際結果可能與此處呈現的結果有所不同。因此，請勿過度依賴這些說法。我們在提交給美國證券交易委員會的文件中對前瞻性聲明進行了更詳細的描述，我們鼓勵您查閱這些文件。汽車公司聲明，由於新資訊、未來事件、發展或其他原因，公司沒有義務更新或修改前瞻性聲明。現在我將把電話轉交給 Otter Tail 公司的總裁兼執行長先生。查克·麥克法蘭。

Thank you, Beth. Good morning and welcome to our 3rd quarter earnings call. Please refer to slide 4 as I begin my remarks with a summary of quarterly highlights. We are pleased with our Q3 financial results as they outpaced our expectations. Our team members continue to execute well on our growth plan despite dynamic market conditions. Otter Tail Power continues to deliver on its regulatory priorities. Our South Dakota rape case, previously filed in June of this year, continues to progress, and in late October, we filed a rape case with the Minnesota Public Utilities Commission.

謝謝你，貝絲。早上好，歡迎參加我們第三季財報電話會議。請參考投影片4，我將首先概述本季的亮點。我們對第三季的財務業績感到滿意，因為業績超出了預期。儘管市場環境瞬息萬變，我們的團隊成員依然出色地執行了成長計畫。奧特泰爾電力公司也持續履行其監管方面的各項職責。我們先前在今年 6 月提起的南達科他州強暴案仍在繼續推進，10 月下旬，我們又向明尼蘇達州公共事業委員會提起了一起強暴案。

The second phase of Vinyltech's expansion project is progressing well. We continue to target early next year for adding another $26 million pounds of capacity. Once complete, we will have increased our plastic segment total production capacity by 15% through our multi-year investment plan. We are also introducing our updated 5-year capital spending plan today. Otter Tail Power's new capital investment plan totals $1.9 billion and is expected to produce a rate-based compounded annual growth rate of 10%.

Vinyltech公司擴建工程的第二階段進展順利。我們仍計劃於明年初新增價值2,600萬磅的產能。工程完成後，透過我們多年的投資計劃，塑膠業務的總產能將提升15%。今天，我們也將推出更新後的五年資本支出計畫。 Otter Tail Power公司的新資本投資計畫總額為19億美元，預計將達到10%的年複合成長率（以費率計算）。

With our updated capital investment plan, we are increasing our targeted long-term earnings per share growth rate to 9 to 7% from 6 to 8% up a 2028 base year. This results in a targeted total shareholder return of 10 to 12%. Slide 5 provides a summary of our quarter to date and year-to-date earnings. We generated $1.06 of diluted earnings per share in the third quarter, a decrease of 8% from the same time last year. This expected decline in earnings was driven by the continued decline in plastic segments, sales prices and earnings.

根據我們更新後的資本投資計劃，我們將2028年基準年的長期每股盈餘成長率目標從6%至8%提高至9%至7%。這將帶來10%至12%的目標股東總回報率。幻燈片5概述了我們本季及年初至今的收益情況。第三季度，我們實現了每股攤薄收益1.06美元，較去年同期下降8%。這項預期的收益下降主要受塑膠業務、銷售價格和收益持續下滑的影響。

Despite the year over year decrease, our results outpaced our expectations. We are increasing the midpoint of our 2025 earnings guidance to $6.47 from $6.26 per share. The increase in guidance is primarily due to better-than-expected plastic segment financial results in Q3 and our revised expectations for the remainder of the year.

儘管同比有所下降，但我們的業績仍超出預期。我們將2025年每股盈餘預期中位數從6.26美元上調至6.47美元。此次上調主要得益於第三季塑膠業務部門超越預期的財務業績，以及我們對今年剩餘時間業績預期的調整。

In a moment, Todd will provide a more detailed discussion of our quarterly financial results and our updated 2025 outlook. Transitioning now to an operational update for Otter Tail Power, as noted on slide 7, we filed a request with the Minnesota Public Utilities Commission for a net revenue increase of $44.8 million. This is based on a requested ROE of 10.65% and an equity layer of 53.5%. The increase is driven by investments in infrastructure and grid resilience, the impact of inflation since our last rape case filed 5 years ago.

稍後，Todd 將更詳細地討論我們的季度財務表現和更新後的 2025 年展望。現在，讓我們來看看 Otter Tail Power 的運作情況。如幻燈片 7 所示，我們已向明尼蘇達州公共事業委員會提交申請，要求增加 4,480 萬美元的淨收入。這基於 10.65% 的淨資產收益率 (ROE) 和 53.5% 的權益層。收入成長主要得益於對基礎設施和電網韌性的投資，以及自 5 年前我們上次提起訴訟以來通貨膨脹的影響。

And accelerated recovery of the Minnesota portion of Coyote Station. We requested accelerated recovery of Coyote Station as the Minnesota Public Utilities Commission directed us to no longer serve our Minnesota customers with power from Coyote beyond 2031 as part of our integrated resource plan. Even with the proposed increase, Otter Tail power is expected to continue to have some of the lowest electric rates in the region and country. Affordability remains a priority for us, and we are committed to selecting cost effective investments to serve our customers with reliable energy while prudently managing our operating costs.

我們要求加快科約特電站明尼蘇達州部分的電力回收。由於明尼蘇達州公共事業委員會指示我們根據綜合資源計劃，在2031年後停止向明尼蘇達州客戶提供科約特電站的電力，因此我們要求加快科約特電站的電力回收。即使考慮到擬議的漲價，奧特泰爾電力公司的電價預計仍將是該地區乃至全美最低的電價之一。我們始終將電價的可負擔性放在首位，並致力於選擇具有成本效益的投資，在審慎管理營運成本的同時，為客戶提供可靠的能源。

Our updated 5 year capital spending plan is expected to have limited impact on our customer rates due to lower fuel costs associated with renewable generation, as well as the favorable impact of renewable tax credits. Additionally, a significant portion of our capital spending plan relates to regional transmission projects. The cost of these projects will be allocated to either new generation interconnection customers. Or across the entire MISO footprint of which our customers comprise only a small portion.

由於再生能源發電的燃料成本較低，以及再生能源稅收抵免政策的利好，我們更新後的五年資本支出計劃預計對客戶電價的影響有限。此外，我們資本支出計劃的很大一部分用於區域輸電項目。這些專案的成本將分攤到新一代互聯用戶，或分攤到整個MISO覆蓋區域，而我們的客戶只佔該區域的一小部分。

We continue to partner with our customers to identify ways to save, whether through energy efficiency programs or innovative pricing solutions. Turning to slide 8, our South Dakota rate case is progressing. The procedural schedule has been established, and we expect a decision in the first half of 2026 unless the settlement is reached in advance of that date.

我們持續與客戶合作，尋找節能途徑，例如透過節能專案或創新定價方案。請翻到第8張投影片，了解我們在南達科他州的費率調整方案進度。程序時間表已經確定，除非在此日期之前達成和解，否則我們預計將在 2026 年上半年做出決定。

Interim rates, which amount to $5.7 million on an annual basis, will commence on December 1st of 2025. Turning to slide 9, Audit Power updated its 5 years. Rate-based CAGR to 10%. We continue to expect Otter Tail Power to convert its rate-based growth into earnings per share growth near a 1 to 1 ratio over the long-term. This is made possible by identifying high-quality customer focused projects, effective project execution, efficient financing, and reducing regulatory lag.

臨時費率，每年570萬美元，將於2025年12月1日生效。請參閱第9張投影片，Audit Power更新了其五年費率複合年增長率（CAGR）為10%。我們仍然預期，從長遠來看，Otter Tail Power 的電價成長能夠以接近 1:1 的比例轉化為每股盈餘成長。這得益於其精準識別以客戶為中心的高品質專案、高效的專案執行、有效的融資以及縮短監管滯後。

We currently expect approximately 90%. Of our updated 5-year capital spending plan to be recovered through existing rates or riders allowing for timely recovery of our capital investments. 10 and 11 provide an overview of ongoing future capital projects. Our wind repowering project is nearly complete. We finished upgrading the wind towers at our Laverne Wind Energy Center in Q3 and expect to complete the remaining two repower sites later this year.

我們目前預計，更新後的五年資本支出計畫中約90%的資金將透過現有費率或附加費收回，從而確保我們的資本投資能夠及時收回。第10和11部分概述了正在進行的未來資本項目。我們的風力發電改造計畫已接近完工。我們在第三季完成了拉文風能中心風塔的升級改造，預計今年稍後完成剩餘兩個改造項目的建設。

Once finished, we expect the increased energy production from these facilities to total approximately 40 megawatts of new generation, which equates to over a 20% output increase. Our two solar development projects also continue to progress. During the quarter we transitioned solway solar from a project development to the start of construction. And look forward to adding additional cost-effective solar generation to our portfolio. Development work continues on our MISO 1 and 2.1 portfolio projects as well as our JTIQ project.

工程完成後，我們預計這些設施將新增約40兆瓦的發電量，相當於發電量成長超過20%。我們的兩個太陽能開發項目也在持續進行中。本季度，我們已將Solway太陽能專案從開發階段轉為開工建設階段。我們期待為我們的投資組合增加更多經濟高效的太陽能發電項目。我們的MISO 1和2.1專案以及JTIQ專案的開發工作也在持續進行中。

We are working through landowner and local government resistance associated with sighting and certain permits for one of the tranche 1 projects. Additionally, in July, a complaint was filed at FERC against ISO's tranche 2.1 projects, citing a concern with benefit calculations. North Dakota, one of the jurisdictions in which we operate, joined the complaint.

我們正在努力克服土地所有者和地方政府在選址和某些許可證方面的阻力，這些阻力與第一期項目之一有關。此外，7月份，有人向聯邦能源管理委員會（FERC）投訴ISO的第二期.1期項目，理由是其效益計算存在問題。我們營運所在的北達科他州也加入了投訴。

We are closely monitoring developments around the FERC complaint docket, and at this time continue to expect these projects to move forward due to their reliability-related benefits, but some delays are possible. Turning to Mike to slide 12, a power remains well positioned to attract and support large loads. Our team continues to engage with companies looking to add new large loads to our system.

我們正密切關注聯邦能源監管委員會（FERC）投訴案的進展，目前仍預計這些項目會因其與可靠性相關的益處而繼續推進，但也不排除出現一些延誤的可能性。請看第12張投影片，Mike指出，電力系統仍具備吸引和支援大負荷的良好條件。我們的團隊將繼續與有意向我們的系統增加新大負載的公司進行溝通。

In the coming weeks, we look forward to bringing online the 155 megawatt load secured earlier this year. The 155-megawatt load is comprised of 3 megawatts of firm load and approximately 152 megawatts of non-firm load. We expect this low to positively contribute to earnings starting next year. We have and will continue to be thoughtful in our negotiations to ensure we are appropriately mitigating potential adverse implications of adding new large loads to our existing customer base. Adding new loads, if appropriately managed, would not only benefit us but also our current customers, as it enables us to spread out existing fixed costs.

未來幾週，我們期待著將今年早些時候預定的155兆瓦負荷投入使用。這155兆瓦負荷包括3兆瓦的穩定負荷和約152兆瓦的非穩定負荷。我們預計，從明年開始，這部分負荷將對公司獲利產生正面影響。我們過去一直並將繼續在談判中保持謹慎，以確保我們能夠妥善降低新增大負荷可能對現有客戶群帶來的不利影響。如果管理得當，新增負載不僅有利於我們自身，也有利於我們現有的客戶，因為它能夠幫助我們分攤現有的固定成本。

In what isn't a challenging economic environment for many, affordability has become increasingly important. As shown on slide 13, Otter Trail power's electric rates have remained well below the national and regional average for many years, and we expect Otter Trail power rates to remain among the lowest in the nation. However, we know that our customers still feel the impact of rate increases. We're deeply focused on identifying cost effective investment projects and are committed to prudently managing costs. We aim to partner with our customers to continue to identify ways for them to save. Transitioning to our manufacturing platform, slide 15 provides an overview of industry conditions impacting our manufacturing segment. BTD continues to face and market demand related headwinds. Sales volumes remain below historic levels after sharply declining in the 3rd quarter of last year.

在經濟環境對許多人來說並不艱難的情況下，電價的可負擔性變得日益重要。正如第13頁幻燈片所示，多年來，奧特特雷爾電力公司的電價一直遠低於全國和地區平均水平，我們預計奧特特雷爾電力公司的電價將繼續保持在全國最低水平之列。然而，我們也知道，我們的客戶仍然會感受到電價上漲的影響。我們專注於尋找具有成本效益的投資項目，並致力於審慎地控製成本。我們旨在與客戶合作，持續尋找幫助他們節省成本的方法。關於我們的製造平台，第15頁概述了影響我們製造業務的產業狀況。 BTD持續面臨市場需求方面的挑戰。繼去年第三季銷量大幅下滑之後，銷量仍低於歷史水準。

The lawn and garden and agricultural and markets continue to be most heavily impacted. Recreational vehicle and construction have shown signs of improvement, and the industrial and market remains strong as our products are ultimately used to support the growing data center energy demand. While the down cycle impacting BTV's volume continues, we saw some month over month stabilization in volumes during the 3rd quarter. This could indicate reaching the bottom of the business cycle.

草坪園藝和農業市場仍然受到最嚴重的衝擊。休閒車和建築業已出現好轉跡象，而工業市場仍然強勁，因為我們的產品最終用於支持日益增長的資料中心能源需求。儘管影響BTV銷量的下行週期仍在持續，但我們在第三季看到銷量出現了一些環比穩定的跡象。這可能表示我們已經觸底反彈。

At this time we expect our current low demand environment to continue through most of 2026. And we'll give a fulsome update regarding 2026 expectations during our Q4 call. We have seen some improvement at Teo plastics, horticulture and market, but low-cost import competition remains a challenge for our team. We continue to monitor the tariff environment to determine what impact, if any, it will have. However, in the meantime, we remain focused on aligning costs with current demand across our manufacturing segment. I want to take a moment to recognize and thank our manufacturing team members for their commitment and efforts during challenging market conditions.

目前，我們預期低迷的需求環境將持續到2026年的大部分時間。我們將在第四季財報電話會議上提供2026年預期情況的全面更新。 Teo塑膠、園藝和市場業務已有所改善，但低成本進口產品的競爭仍然是我們團隊面臨的挑戰。我們將繼續密切關注關稅環境，以確定其可能產生的影響。同時，我們將繼續專注於使製造部門的成本與當前需求保持一致。在此，我要特別感謝我們製造團隊的成員在充滿挑戰的市場環境下所付出的努力和奉獻。

Flight 16 provides an overview of our plastic segments, pricing and volume trends. Our sales prices of PVC pipe continue to steadily decline, decreasing 17% from the same time last year. Sales volumes increased 4% due in part to capacity added to Vinyltech late last year. We also continue to benefit from lower material input costs, including resin. The cost of PVC resin has decreased from the same time last year due to global supply and demand dynamics resulting in elevated domestic supply.

第16期報告概述了我們的塑膠業務板塊、價格和銷售趨勢。 PVC管材的銷售價格持續穩定下降，較去年同期下降17%。銷售量成長4%，部分原因是去年底Vinyltech新增產能。此外，我們也持續受益於原料成本（包括樹脂）的下降。由於全球供需動態導致國內供應增加，PVC樹脂的成本較去年同期下降。

Turning to slide 17, our manufacturing platform remains well positioned for future growth opportunities. Our BTD Georgia facility is ready to support our customers in the Southeast once market conditions improve. Phase two of our vinyl tech expansion is progressing well. Once complete, we will have increased our total production capacity for the plastic segment by approximately 50 million pounds over the past 2 years.

翻到第 17 頁，我們的製造平台仍為未來的成長機會做好了充分準備。一旦市場狀況好轉，我們位於喬治亞州的BTD工廠已做好準備，為我們在東南部的客戶提供支援。我們乙烯基技術擴建工程的第二期工程進展順利。工程完成後，過去兩年中，我們在塑膠領域的總產能將增加約5,000萬磅。

I wiil now turn it over to Todd to provide his financial.

現在我將把這個任務交給托德，讓他提供財務資訊。

Thank you, Chuck, and good morning, everyone. Turning to slide 19, our quarterly financial results exceeded expectations. We generated $1.86 of diluted earnings per share compared to $2.03 during the same time last year. Please follow along on slides 20 and 21 as I provide an overview of quarterly financial segment results by segment. Electric segment earnings decreased $0.03 per share in the 3rd quarter. The decrease in earnings was primarily driven by unfavorable weather and the impact of seasonal rate differences between interim and final rates in North Dakota.

謝謝查克，大家早安。請看第19張投影片，我們的季度財務表現超乎預期。我們每股攤薄收益為1.86美元，去年同期為2.03美元。請繼續看第20和21張投影片，我將以業務板塊概述季度財務業績。電力業務部門第三季每股收益下降0.03美元。收益下降的主要原因是天氣不利以及北達科他州中期和最終電價之間的季節性差異。

This timing effect does not impact our revenue on an annual basis. These drivers were partially offset by higher quarterly sales volumes, excluding the impact of weather, as well as lower operating and maintenance expenses. Manufacturing segment earnings increased $0.04 per share. The increase in earnings was primarily driven by a lower cost structure following our efforts over the last year to align the costs in our business with the current demand environment.

這種時間因素不會影響我們的年度收入。這些不利因素部分被季度銷售成長（不計天氣影響）以及營運和維護費用降低所抵消。製造部門每股收益成長 0.04 美元。收益成長主要得益於成本結構的降低，這是我們在過去一年中努力使業務成本與當前需求環境相符的結果。

We also benefited from enhanced production efficiencies with a smaller but more skilled workforce. The timing of pass through steel cost fluctuations and the selling of lower cost inventory also contributed to improved profit margins. These drivers were partially offset by the impact of lower sales volumes and higher SG&A expense. During the slide 21, plastic segment earnings decreased $0.26 per share compared to the same time last year.

我們也受惠於生產效率的提升，這得益於規模更小但技能更高的員工隊伍。鋼材成本波動帶來的轉嫁效應以及低價庫存的銷售也促進了利潤率的提高。這些利多因素部分被銷售下降及銷售、管理及行政費用增加所抵銷。截至第21頁，塑膠業務板塊的每股盈餘較去年同期下降了0.26美元。

Plastic segment earnings exceeded our expectation for the 3rd quarter even as we continue to progress towards a more normalized earnings level. The decrease in earnings was driven by lower average sales prices, partially offset by lower input material costs and higher sales volumes. The average sales price of PVC pipe declined 17% compared to the third quarter of 2024. This continues the downward trend experienced in the sales prices of our PVC pipe since it reached its peak in mid 2022.

儘管我們正朝著更正常的獲利水準邁進，但塑膠業務板塊第三季的獲利仍超出預期。獲利下降主要受平均銷售價格走低的影響，但部分被原物料成本下降和銷售成長所抵銷。 PVC管材的平均銷售價格較2024年第三季下降了17%。自2022年年中達到高峰以來，PVC管材的銷售價格一直呈下降趨勢，而此次下降延續了這一趨勢。

Partially offsetting the decline in pricing are lower material input costs, which decreased 16% from the same time last year. Our plastic segment earnings also benefited from a 4% increase in sales volumes, largely driven by the incremental volume from the capacity added at BTech. Finally, our corporate costs improved $0.08 per share in the 3rd quarter from the same time last year.

部分抵銷價格下跌的是原物料投入成本的降低，較去年同期下降了16%。塑膠業務的獲利也受惠於銷售成長4%，主要得益於BTech新增產能帶來的銷售成長。最後，第三季公司成本較去年同期降低了0.08美元/股。

This improvement was driven by an increase in income tax benefits, lower workers' compensation expenses, and lower employee health insurance claims. During the slide 22, our balance sheet remains very strong, and we are positioned well to fund the utility's updated customer focused growth plan without the need for external equity through at least 2030.

這項改善主要得益於所得稅優惠增加、工傷賠償支出減少以及員工健康保險索賠降低。如第22頁所示，我們的資產負債表依然非常穩健，我們完全有能力為公司更新後的以客戶為中心的成長計畫提供資金，至少到2030年無需外部股權融資。

We have $325 million of cash on hand and continue to produce a utility sector leading return on equity of 16% on an equity layer of nearly 64%. On slide 23, we are increasing and narrowing our 2025 diluted earnings per share guidance to a range of $6.32 to $6.62. We are increasing our 2025 earnings guidance primarily due to a better-than-expected plastic segment financial results in the third quarter. As well as our revised margin expectations for the remainder of the year. We are increasing our margin expectations as we expect raw material costs to be lower than previously projected for the remainder of the year.

我們目前持有3.25億美元現金，並繼續保持公用事業行業領先的16%的股本回報率（權益資本充足率接近64%）。在第23頁，我們將2025年稀釋後每股盈餘預期上調並縮小至6.32美元至6.62美元的區間。我們上調2025年獲利預期的主要原因是第三季塑膠業務的財務表現優於預期，以及我們調整了今年剩餘時間的利潤率預期。我們上調利潤率預期是因為我們預計今年剩餘時間的原材料成本將低於先前的預期。

We are also increasing the midpoint of our electric segment earnings guidance and narrowed the range. Our updated guidance is primarily based on better than expected financial results in the third quarter of 2025, which was largely driven by higher than anticipated sales volumes. We are maintaining the midpoint of our 2025 earnings guidance for a manufacturing segment but are narrowing the range. We are also narrowing the guidance range for our corporate cost center.

我們上調了電力業務板塊獲利預期中位數，並縮小了預期範圍。此次更新的預期主要基於2025年第三季超出預期的財務業績，而這主要得益於高於預期的銷售量。我們維持了製造業業務板塊2025年獲利預期中位數不變，但縮小了預期範圍。此外，我們也縮小了公司成本中心的獲利預期範圍。

With the increase to our 2025 earnings guidance, we are forecasting our consolidated 5 year compounded annual growth rate to be approximately 23%. As shown on slide 24, we have a proven track record of delivering outstanding earnings per share growth with and without the impact of plastic segment earnings. Our updated capital investment plan for 2026 through 2023 is included on slide 25. Our electric segments revised 5-year capital spending plan increased by approximately 35% and now totals $1.9 billion.

隨著我們上調2025年獲利預期，預計未來五年綜合複合年增長率約為23%。如第24頁投影片所示，無論是否計入塑膠業務的獲利影響，我們都擁有實現卓越每股盈餘成長的良好記錄。第25頁投影片包含我們更新後的2023年至2026年的資本投資計畫。我們修訂後的五年電氣業務資本支出計畫增加了約35%，總額達到19億美元。

The increase is primarily driven by moving into the construction phase of our previously discussed regional transmission projects. It is important to highlight that our updated capital plan does not include any investment to serve new large loads.

此次成長主要源自於我們之前討論過的區域輸電項目進入建設階段。需要強調的是，我們更新後的資本計畫並未包含任何用於滿足新增大負載需求的投資。

Additionally, we project approximately $350 million of potential incremental utility capital investments to our base plan. The incremental opportunity includes the wind generation and battery storage projects previously approved in our Minnesota integrated Resource plan. As well as delivery related investments for any new large loads added to our system.

此外，我們預計在基本規劃的基礎上，將新增約 3.5 億美元的潛在公用事業資本投資。新增投資機會包括先前在明尼蘇達州綜合資源規劃中獲準的風力發電和電池儲能項目，以及為應對系統新增的任何大型負載而進行的輸配電相關投資。

We estimate that for every $100 million of incremental capital investment, our rate-based compounded annual growth rate would increase by approximately 65 basis points. Slide 26 summarizes our updated 5-year financing plan. Even with our updated utility capital spending plan, we expect to finance our growth without any equity issuances.

我們預計，每增加1億美元的資本投資，我們基於費率的複合年增長率將提高約65個基點。第26頁投影片概述了我們更新後的五年融資計畫。即使採用我們更新的公用事業資本支出計劃，我們預計也能在不發行任何股權的情況下為成長提供資金。

We plan to issue debt at Otter Tail Power on an annual basis to help fund the investment plan and maintain the authorized capital structure. We have $80 million in parent level debt that matures in late 2026 and expect to retire this debt. We will have no outstanding parent level debt upon retirement. As included on Flight 27, our long-term expectations of normalized plastic segment earnings remains unchanged. We believe plastic segment earnings will continue to decline through the end of 2027 such that 2028 is our first full year of normalized earnings.

我們計劃每年在 Otter Tail Power 發行債券，以資助投資計劃並維持授權資本結構。我們有 8,000 萬美元的母公司層級債務將於 2026 年底到期，預計將償還這筆債務。屆時，我們將不再有任何未償還的母公司層面債務。如 Flight 27 所述，我們對塑膠業務正常化收益的長期預期保持不變。我們認為塑膠業務收益將持續下降至 2027 年底，因此 2028 年將是我們實現正常化收益的第一個完整年度。

This assumption is based on the average sales price of our PVC pipe falling at a rate similar to what we have experienced since late 2022. Increase sales volumes due to our expansion projects at Vinyltech. And cost changes generally in line with the rate of inflation. Due to seasonality and other factors, the rate of margin compression could vary from period to period.

這個假設基於以下幾點：一是我們PVC管材的平均售價將以與2022年底以來類似的速度下降；二是由於Vinyltech的擴建項目導致銷量增長；三是成本變化基本上與通貨膨脹率保持一致。由於季節性和其他因素的影響，利潤率壓縮的幅度可能會因時期而異。

Additionally, it continues to be difficult to predict with certainty long-term plastic segment earnings. And the timing or level of earnings could vary materially from this projection. However, the plastic segment remains an important component to our overall strategy due to the enhanced returns and earnings it generates. Even as earnings normalize over the coming years, we expect the segment to produce an accretive return and incremental cash to help fund our electric utilities rate-based growth plan.

此外，長期塑膠業務的獲利預測仍難以準確掌握，實際獲利的時間和水準可能與此預測有顯著差異。然而，鑑於塑膠業務能夠帶來更高的回報和獲利，它仍然是我們整體策略的重要組成部分。即使未來幾年獲利趨於正常化，我們預計該業務仍將產生增值回報和額外現金流，以支持我們基於電力公用事業費率的成長計劃。

Flight 28 summarizes our uplifted investment targets. We increased our long-term earnings per share growth rate to 7 to 9%. And also increased our targeted total shareholder return to 10 to 12%. We anticipate delivering on these targets once plastic segment earnings normalize in 2028. Our long-term earnings mix target has also been updated. \We now expect 70% of our earnings to be driven by our electric platform and 30% from our manufacturing platform. We anticipate reaching this earnings mix in 2028 as electric segment earnings continue to grow in line with its rate-based growth rate of 10%.

第28期簡報總結了我們上調後的投資目標。我們將長期每股盈餘成長率上調至7%至9%，並將目標股東總回報率上調至10%至12%。我們預計，一旦塑膠業務的收益在2028年恢復正常，這些目標即可實現。此外，我們的長期收益組成目標也已更新。我們現在預計，70%的收益將來自我們的電動平台，30%將來自我們的製造平台。我們預計，隨著電動業務的收益繼續以10%的成長率成長，我們將在2028年實現這一收益構成目標。

Plastic segment earnings have normalized, and the manufacturing segment has rebounded from the current down cycle. As we continue to execute on our customer focused growth plan, we are well positioned to deliver on our revised investment targets over the long-term.

塑膠業務板塊的獲利已恢復正常，製造業板塊也已從目前的下行週期中反彈。隨著我們繼續推動以客戶為中心的成長計劃，我們完全有能力在長期內實現修訂後的投資目標。

Otter Tail continues to be a high performing electric utility, converting its rate-based growth into earnings per share growth at an approximate 1 to 1 ratio. Our manufacturing and plastic pipe businesses consistently produce accretive returns and incremental cash which will be used to help fund our rate-based growth plan without any equity needs. It is this combination of companies and performance that has, and we project continuing to provide excellent benefits for our customers and our investors. We look forward to what the future holds and are grateful for your interest and investment in Otter Tail Corporation.

奧特泰爾電力公司持續保持卓越的業績，電價成長與每股盈餘成長的轉換率接近1:1。我們的製造和塑膠管道業務持續創造增值收益和額外現金流，這些資金將用於支持我們基於電價的成長計劃，而無需任何股權融資。正是這些公司及其業績的組合，已經並將繼續為我們的客戶和投資者帶來卓越的收益。我們對未來充滿期待，並衷心感謝您對奧特泰爾公司的關注和投資。

You are now ready to take your questions.

現在可以開始回答你們的問題了。

Thank you. To ask a question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Our first call comes from Michael Patel from Keylock Capital Markets. Your line is now open.

謝謝。如有任何疑問，請按電話上的 11 鍵，然後等待播報您的名字。如需撤回您的問題，請再按11。我們第一個接聽電話的是來自Keylock Capital Markets的Michael Patel。您的線路現已開通。

Hey, good morning. Congrats on the update this morning.

嘿，早安。恭喜你今天早上收到更新。

Thanks, Michael. Good morning.

謝謝你，麥可。早安.

I am just curious on the updated EPF long-term growth rate there just on the shaping of it and kind of expect that to grow linearly or any movement on a year to year basis?

我只是對更新後的EPF長期成長率感到好奇，想看看它的走勢，並預期它會呈線性成長，還是會逐年波動？

Over the long-term we do expect our utility earnings to grow in line with our rate base. There will be year to year fluctuations depending upon the timing of recovery, but over the long-term we do expect our earnings for the utility to be in line with the rate-based growth plan, and we do provide the rate-based projections by year. And certainly, as we're going through the manufacturing, on the plastic side, we're we're seeing that normalized and then on.

從長遠來看，我們預計公用事業收益將與我們的費率基數同步成長。每年的收益都會根據復甦的時機而有所波動，但從長遠來看，我們預計公用事業的收益將與基於費率的成長計劃保持一致，我們也會按年提供基於費率的預測。當然，隨著我們對塑膠製造環節的逐步恢復，我們看到情況正在改善。

The manufacturing segment we're in a down cycle right now, so we will have some fluctuations year to year, but beyond 2028 when we reach that normal level of plastics earnings and through the manufacturing down cycle, we expect to achieve the 7 to 9% long-term.

目前製造業正處於下行週期，因此每年都會有一些波動，但到 2028 年以後，當我們達到塑膠盈利的正常水平並度過製造業下行週期後，我們預計能夠實現 7% 到 9% 的長期增長目標。

And just a quick modeling question, but what are you currently assuming for your 2025 tax rate? How are you tracking towards that and has there been any change in your assumption since your initial guidance this year?

另外，還有一個關於建模的小問題，您目前對 2025 年的稅率作了哪些假設？您目前的進度如何？自今年最初的指導意見以來，您的假設是否有任何變化？

Just to make sure I understood that, Michael, our tax rate. Is that what you're asking about? I don't know that I have that specific information in front of me.

邁克爾，我確認一下，您說的是我們的稅率嗎？我手頭好像沒有這方面的資訊。

Okay. And then, just on the antitrust case and curious if you could provide any update there, and then how does the Department of Justice's involvement affect the proceedings or timeline?

好的。另外，關於反壟斷案件，您能否提供一些最新進展？司法部的介入對訴訟程序或時間表有何影響？

Michael, this is Chuck. During the quarter, there were amended complaints filed in the class action. Lawsuits in the US, as you mentioned in October, the DOJ intervened to stay the discovery in the civil litigation, which is not uncommon when there's a parallel investigation going on. There's also a class action complaint filed in British Columbia, Canada. With similar allegations to the civil complaint in the United States. And then finally last week defendants filed a motion to dismiss in the civil litigation. We argue that the complaint should be dismissed in their entirety. There is no deadline for the court to make that decision, but we anticipate that in calendar year 26.

邁克爾，我是查克。本季度，集體訴訟中提交了修改後的起訴狀。正如您在十月提到的，美國司法部介入了民事訴訟，中止了證據開示程序，這在進行平行調查時並不罕見。此外，在加拿大不列顛哥倫比亞省也提起了一項集體訴訟，其指控與美國的民事訴​​訟類似。上週，被告方提交了駁回民事訴訟的動議。我們認為該訴訟應全部駁回。法院沒有做出裁決的最後期限，但我們預計在本年度第26個日曆年內做出裁決。

Got it. Thanks for your time and look forward to seeing you in Florida in a few days.

知道了。感謝您抽出時間，期待幾天後在佛羅裡達見到您。

Thank you.

謝謝。

Our next call comes from Tim Winter of Gabelli Funds. Your line is now open.

接下來接聽電話的是 Gabelli Funds 的 Tim Winter。您的線路已開通。

Good morning, gentlemen, and congrats on the quarter. Thanks for taking my question.

各位先生，早安，恭喜你們本季取得佳績。謝謝您回答我的問題。

I know you guys talked a little bit about the 64% equity ratio and the $8 of cash on the balance sheet, with, some near term need to take out that $80 million in debt, but I was just wondering if you could talk a little more how you're thinking about using that cash, long-term. I know you have plenty to use the utility over the long-term, but over the near term, just wondering if there's if that's the best way to maximize the cash or what your thinking is regarding that?

我知道你們之前討論過64%的權益比率和資產負債表上8美元的現金，以及短期內需要償還8000萬美元的債務。但我更想了解的是，你們打算如何長期利用這筆現金。我知道從長遠來看，你們有足夠的資金來使用這筆現金，但就短期而言，我想知道這是否是最大化利用現金的最佳方式，或者你們對此有什麼想法？

Good morning, Tim. Yeah, so in terms of our capital allocation priorities, certainly our priority is investing in our businesses and with the significant rate-based growth we have with Otter Tail Power, we do expect that cash balance will decline over the five-year period as we invest and provide equity for that. We don't have any external equity needs. We'll be able to fund that with our cash that we have on hand.

早安，提姆。是的，就我們的資本配置優先事項而言，當然是投資於我們的業務，而隨著奧特泰爾電力公司基於費率的顯著增長，我們預計在未來五年內，隨著我們進行投資並提供股權，現金餘額將會下降。我們沒有任何外部股權融資需求。我們可以用手邊的現金來支付這筆費用。

Beyond that, certainly looking at the dividend payout ratio, we did increase our dividend payout ratio or our dividend by 12% earlier this year. Beyond that, we would look at, are there opportunistic M&A opportunities or opportunistic returns to shareholders, but our primary focus is on the first two with funding the utility growth plan as well as providing capital back to our shareholders through the dividend.

除此之外，就股利支付率而言，我們今年稍早確實將股利支付率提高了12%。除此之外，我們還會考慮是否有併購機會或股東回報機會，但我們的首要任務是前兩項，即為公用事業成長計畫提供資金，並透過股利向股東返還資本。

Okay, great, and on the M&A opportunities, what sorts of things are priorities of yours. As you look at the environment out there.

好的，太好了。關於併購機會，您認為在當前市場環境下，哪些方面是您的優先事項？

We would look on the utility side. Some potential assets from M&A we've not put a lot of focus on that right now due to our internal growth opportunities available at the utility in the manufacturing or plastic segments we would review bolt on opportunities, but we are not currently looking to. Add in any additional platforms or New companies that way. They would be smaller add-ons like we have done with BTD over time.

我們會關注公用事業領域。目前，由於公用事業領域內部在製造業或塑膠產業存在成長機會，我們尚未過度關注併購方面的潛在資產。我們會考慮一些附加機會，但目前沒有這方面的計畫。我們也不會透過其他方式收購任何額外的平台或新公司。它們會像我們之前在 BTD 中所做的那樣，是一些較小的附加元件。

I just add, Tim, that you know we're positioned very well to execute on our growth plan without M&A for scale. We are positioned well to attract large loads. We've got the cash to fund our growth plan that's very significant.

提姆，我還要補充一點，你知道我們目前的情況非常理想，無需透過併購就能達到成長規模。我們完全有能力吸引大量訂單。我們有足夠的資金來實施我們意義重大的成長計劃。

Okay, and if I could just ask one more, could you talk just a little bit about the large load customer and maybe how the electric service agreement is structured, that 155. Megawatt customer.

好的，如果我可以再問一個問題，您能否談談大負荷客戶以及電力服務協議的結構，例如155兆瓦的客戶。

Yeah, it's a customer that is interruptible type load and so we have very minimal capacity needs and the site location. The customer had limited interconnection costs, primarily distribution at that point, so it's a customer that will use low-cost energy in a storage function and we don't see a large capacity need or a large investment need right at this point, so it's not driving significant earnings in the 2026-time frame, but it is. Reducing fixed costs across a big amount with that type of load.

是的，這是一個可中斷負載類型的客戶，因此我們的容量需求非常低，而且該客戶的站點位置也比較特殊。該客戶的併網成本有限，當時主要是配電成本，所以他們會使用低成本的儲能能源。目前我們預計他們不需要很大的容量或大量的投資，因此在2026年左右不會帶來顯著的收益，但確實如此。這種類型的負載可以大幅降低固定成本。

Okay, all right, thank you guys, and we'll see you in sunny Florida.

好的，謝謝大家，我們陽光明媚的佛羅裡達見。

Thanks. Good to talk to you.

謝謝。很高興和你聊天。

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

由於隊列中沒有剩餘的問題，我將把電話轉回給他，看看他是否還有總結發言。

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，並感謝您對 Otter Tail 公司的關注。如有任何疑問，請聯絡我們的投資者關係團隊，我們期待下季與您進一步交流。

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

感謝您參加今天的會議。程式到此結束，您可以斷開連線了。