Earnings release
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Press Release November 2, 2026 Otter Tail Corporation Announces Third Quarter Results and Affirms the Midpoint of Annual Earnings Guidance FERGUS FALLS, Minnesota - Otter Tail Corporation (Nasdaq: OTTR) today announced financial results for the quarter ended September 30, 2026. SUMMARY • Produced quarterly diluted earnings per share of $1.41. • Affirmed the midpoint of our annual earnings guidance and narrowed the range. CEO OVERVIEW “Our team members continue to deliver on our strategic growth plan and near-term priorities amidst a challenging operating environment,” said CEO Chuck MacFarlane. “Otter Tail Power continues to perform well, as our team is executing on our regulatory priorities and robust rate base growth plan. We are making progress on our ongoing Minnesota rate case and our integrated resource plan filed with the Minnesota Public Utilities Commission earlier this year. Our team is advancing our ongoing renewable generation and transmission capital investment projects despite increasing challenges in transmission development. We are focused on strong project execution for the benefit of our customers and shareholders. “We are encouraged by increasing sales volumes within our Manufacturing segment. End market demand continues to improve and our team is effectively executing on our strategy of providing value-added service to our customers. Our businesses are being impacted by inflationary cost pressures and the challenge of responding to increasing customer demand. “As expected, Plastics segment financial results for the quarter were negatively impacted by lower sales volumes and a continued decline in the average sales price of our PVC pipe. Sales volumes decreased as our customers advanced their purchases of our PVC pipe earlier this year in response to announced resin price increases. In addition, a softening housing market also contributed to the decline in volumes for the period. Despite the quarterly decrease, our team continues to effectively leverage the large diameter capacity added at our PVC pipe facility in Arizona, helping to offset the decrease. “We remain well positioned to deliver on our financial objectives for the year. We are maintaining the midpoint and narrowing the range of our 2026 annual earnings guidance. “The fundamentals of our diversified portfolio remain strong, and we are confident in our ability to deliver on our strategic growth plan over the long-term. We continue to target a long-term earnings per share growth rate of 7 to 9 percent and a total shareholder return of 10 to 12 percent.” QUARTERLY DIVIDEND On November 2, 2026, the corporation’s Board of Directors declared a quarterly common stock dividend of $0.5775 per share. This dividend is payable on December 10, 2026 to shareholders of record on November 13, 2026. CASH FLOWS AND LIQUIDITY Consolidated cash provided by operating activities was $307.9 million for the nine months ended September 30, 2026, compared with $288.9 million for the same period in 2025. The increase was primarily driven by lower working capital requirements, largely reflecting the timing of the recovery of fuel costs and rider revenues from our utility customers. Investing activities for the nine months ended September 30, 2026 included $451.6 million of capital expenditures. Our capital investments were largely within our Electric segment and primarily related to our Abercrombie and Solway solar projects, wind repowering initiative, and transmission and distribution system investments. Financing activities for the nine months ended September 30, 2026 included the issuance of $170.0 million of long-term debt by Otter Tail Power, the proceeds of which were used to repay short-term borrowings, fund capital investments, and support operating activities. Financing activities for the period also included $72.8 million of dividend payments and $31.5 million of net repayments of short-terms borrowings. As of September 30, 2026 available liquidity totaled $601.8 million, consisting of $170.0 million and $178.5 million available under our Otter Tail Corporation and Otter Tail Power credit facilities, respectively, and $253.3 million of cash, cash equivalents and marketable securities.
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SEGMENT PERFORMANCE Electric Segment Three Months Ended September 30, ($ in thousands) 2026 2025 Change % Change Operating Revenues $ 134,979 $ 138,597 $ (3,618) (2.6) % Net Income 27,418 27,308 110 0.4 Retail MWh Sales 1,385,582 1,373,054 12,528 0.9 % Heating Degree Days 7 25 (18) (72.0) Cooling Degree Days 460 326 134 41.1 The following table shows heating degree days and cooling degree days as a percent of normal. Three Months Ended September 30, 2026 2025 Heating Degree Days 17.1 % 61.0 % Cooling Degree Days 131.4 % 93.1 % The following table summarizes the estimated effect on diluted earnings per share of the difference in retail kilowatt-hour (kwh) sales under actual weather conditions and expected retail kwh sales under normal weather conditions for the three months ended September 30, 2026 and 2025. 2026 vs Normal 2026 vs 2025 2025 vs Normal Effect on Diluted Earnings Per Share $ 0.03 $ 0.04 $ (0.01) Operating Revenues decreased $3.6 million, primarily due to an $11.9 million aggregate decrease in fuel recovery revenues and the impact of increased production tax credits, neither of which affects net income. These decreases were partially offset by a $5.9 million increase from rate increases in Minnesota and South Dakota, a $2.7 million increase from the recovery of additional rate base investments, and a $2.3 million increase from favorable weather. Net Income increased $0.1 million as the benefits of interim rate increases, favorable weather, the recovery of additional rate base investments, and higher allowance for funds used during construction associated with continued investments in our large solar projects were largely offset by higher operating and maintenance expenses, including increased labor, vegetation management, and plant outage-related costs, as well as higher depreciation and interest expense associated with rate base growth. Manufacturing Segment Three Months Ended September 30, (in thousands) 2026 2025 $ Change % Change Operating Revenues $ 89,709 $ 76,951 $ 12,758 16.6 % Net Income 2,569 3,916 (1,347) (34.4) Operating Revenues increased $12.8 million primarily due to higher sales volumes and the pass through of increased steel costs. Sales volumes increased 13%, reflecting improved demand in the construction, recreational vehicle, lawn and garden, and industrial markets after experiencing softer market conditions and customer inventory reduction efforts during the same period last year. Net Income decreased $1.3 million driven by higher selling, general, and administrative expenses and lower gross profit margins. Gross margins were negatively impacted by inflationary cost pressures and lower productivity as we added headcount to meet growing demand. These impacts were partially offset by higher sales volumes and increased scrap sales.
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Plastics Segment Three Months Ended September 30, (in thousands) 2026 2025 $ Change % Change Operating Revenues $ 95,825 $ 110,015 $ (14,190) (12.9) % Net Income 28,970 43,495 (14,525) (33.4) Operating Revenues decreased $14.2 million compared to the same period last year, reflecting a 9% decrease in average sales prices and a 5% decrease in sales volumes. Average sales prices continued to moderate from the peak level reached in late 2022. Lower sales volumes were primarily driven by the timing of customer purchases, including purchases made earlier in the year ahead of announced PVC resin cost increases, and softer demand for our products in certain regional markets due, in part, to softness in the housing market. Increased production capacity at our Phoenix facility partially offset the volume declines. Net Income decreased $14.5 million, primarily due to lower sales prices and volumes, as discussed above, and a 10% increase in PVC resin and other input material costs, primarily driven by global PVC resin supply and demand dynamics. Corporate Three Months Ended September 30, (in thousands) 2026 2025 $ Change % Change Net Income $ 506 $ 3,573 $ (3,067) (85.8) % Net Income decreased $3.1 million compared to the same period last year, primarily due to lower income tax benefits recognized during the quarter and lower investment income resulting from a decrease in short-term investment balances. 2026 OUTLOOK We are affirming the midpoint and narrowing our 2026 diluted earnings per share guidance range to $3.89 to $4.19 and our 2026 adjusted diluted earnings per share guidance range to $5.73 to $6.03. The segment components of our 2026 guidance compared with actual earnings for 2025 are as follows: August 3, 2026 November 2, 2026 2025 EPS by Segment 2026 EPS Guidance 2026 Adjusted EPS Guidance(1) 2026 EPS Guidance 2026 Adjusted EPS Guidance(1) Low High Low High Low High Low High Electric $ 2.32 $ 2.61 $ 2.69 $ 2.61 $ 2.69 $ 2.62 $ 2.68 $ 2.62 $ 2.68 Manufacturing 0.27 0.32 0.38 0.32 0.38 0.32 0.36 0.32 0.36 Plastics 4.05 1.13 1.35 2.97 3.19 1.11 1.27 2.95 3.11 Corporate (0.09) (0.22) (0.18) (0.22) (0.18) (0.16) (0.12) (0.16) (0.12) Total $ 6.55 $ 3.84 $ 4.24 $ 5.68 $ 6.08 $ 3.89 $ 4.19 $ 5.73 $ 6.03 Return on Equity 15.6 % 8.7 % 9.5 % n/a n/a 8.7 % 9.3 % n/a n/a Adjusted Return on Equity(1) n/a n/a n/a 12.5 % 13.3 % n/a n/a 12.5 % 13.1 % (1) Adjusted Diluted EPS and Adjusted Return on Equity are non-GAAP financial measures or metrics. Adjusted Diluted EPS Guidance, for both the Plastics segment and on a consolidated basis, can be reconciled to GAAP diluted EPS Guidance by excluding an adjustment of $1.84 which reflects the impact of legal settlement expenses recorded during the nine months ended September 30, 2026. Adjusted Return on Equity can be reconciled to anticipated return on equity calculated using a GAAP basis net income and GAAP basis shareholders’ equity, by excluding the impact of legal settlement expenses recorded during the nine months ended September 30, 2026 from anticipated net income and average shareholders’ equity for the annual period, which increases anticipated return on equity by 380 basis points. CONFERENCE CALL AND WEBCAST The corporation will host a live webcast on Tuesday, November 3, 2026 at 10:00 a.m. CT to discuss its financial and operating performance. The presentation will be posted on our website before the webcast. To access the live webcast, go to the Events and Presentations section of the www.ottertail.com website and select “Webcast.” Please allow time prior to the call to visit the site and download any software needed to listen in. An archived copy of the webcast will be available on our website shortly after the call. If you are interested in asking a question during the live webcast, visit and follow the link provided in the press release announcing the upcoming conference call. NON-GAAP FINANCIAL MEASURES This press release includes certain adjusted financial measures (non-GAAP financial measures). The Company believes these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide more information to assist investors in evaluating current period performance and in assessing future performance. For these reasons, internal management reporting also includes non-GAAP financial measures.
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We use Adjusted Net Income, Adjusted Earnings per Share, and Adjusted Return on Equity in evaluating the operating performance and profitability of our business. Management believes that these measures provide useful information to investors by facilitating period-to-period comparisons of operating results excluding the effects of the legal settlement expense and related income tax benefit. We define Adjusted Net Income as net income excluding legal settlement expenses and the related income tax benefit. We define Adjusted Earnings per Share as diluted net income per share excluding the per share impact of legal settlement expenses and the related income tax benefit. We define Adjusted Return on Equity as annual Adjusted Net Income divided by the average of total consolidated shareholders’ equity excluding the impact of legal settlement expenses and the related income tax benefit. These non-GAAP financial measures should be considered in addition to, and not superior to or as a substitute for, the GAAP financial measures presented in this release and the Company's financial statements and other publicly filed reports. Non-GAAP financial measures presented in this release may not be comparable to similarly titled measures used by other companies. Investors are encouraged to review the reconciliations of adjusted financial measures used in this release to their most directly comparable GAAP financial measures. Adjusted Net Income and Adjusted Diluted Earnings per Share are reconciled to their most directly comparable GAAP measures in the non-GAAP Reconciliations section. Guidance for Adjusted Diluted Earnings per Share and Adjusted Return on Equity are forward-looking non-GAAP financial measures that are reconciled to their respective most directly comparable GAAP financial measures in footnote (1) under 2026 Outlook. FORWARD-LOOKING STATEMENTS Except for historical information contained here, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “can,” “confident,” “could,” “estimate,” “expect,” “future,” “goal,” “intend,” “likely,” “may,” “optimistic,” “opportunity,” “outlook,” “plan,” “possible,” “position,” “potential,” “predict,” “probable,” “projected,” “should,” “target,” “will,” “would,” and similar words and expressions are intended to identify forward-looking statements. Such statements are based upon the current beliefs and expectations of management. Forward-looking statements made herein, which may include statements regarding 2026 earnings and earnings per share, long-term earnings, earnings-per-share growth and earnings mix, anticipated levels of energy generation from renewable resources, anticipated reductions in carbon dioxide emissions, future investments and capital expenditures, rate base levels and rate base growth, future raw materials costs, future raw materials availability and supply constraints, future operating revenues and operating results, and expectations regarding regulatory proceedings, as well as other assumptions and statements, involve known and unknown risks and uncertainties that may cause our actual results in current or future periods to differ materially from the forecasted assumptions and expected results. The Company’s risks and uncertainties include, among other things, uncertainty of future investments and capital expenditures; rate base levels and rate base growth; risks associated with energy markets; the availability and pricing of resource materials; inflationary cost pressures; attracting and maintaining a qualified and stable workforce; changing macroeconomic and industry conditions that impact the demand for our products, pricing, and margin; long-term investment risk; seasonal weather patterns and extreme weather events; future business volumes with key customers; reductions in our credit ratings; our ability to access capital markets on favorable terms; assumptions and costs relating to funding our employee benefit plans; our subsidiaries’ ability to make dividend payments; cybersecurity threats or data breaches; the impact of government executive orders, legislation and regulation including foreign trade policy; environmental, health and safety laws and regulations; changes in tax laws and regulations; the impact of climate change including compliance with legislative and regulatory changes to address climate change; expectations regarding regulatory proceedings, assigned service areas, the construction of major facilities, capital structure, and allowed customer rates; actual and threatened claims or litigation; and operational and economic risks associated with our electric generating and manufacturing facilities. These and other risks are more fully described in our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K, as updated in subsequently filed Quarterly Reports on Form 10-Q, as applicable. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information. Category: Earnings About the Corporation: Otter Tail Corporation, a member of the S&P SmallCap 600 Index, has interests in diversified operations that include an electric utility and manufacturing businesses. Otter Tail Corporation stock trades on the Nasdaq Global Select Market under the symbol OTTR. The latest investor and corporate information is available at www.ottertail.com. Corporate offices are in Fergus Falls, Minnesota, and Fargo, North Dakota. Investor Contacts: Beth Eiken, Manager of Investor Relations, (701) 451-3571 Media Contact: Stephanie Hoff, Director of Corporate Communications, (218) 739-8535
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OTTER TAIL CORPORATION CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per-share amounts) 2026 2025 2026 2025 Operating Revenues Electric $ 134,979 $ 138,597 $ 422,167 $ 417,048 Product Sales 185,534 186,966 579,755 578,911 Total Operating Revenues 320,513 325,563 1,001,922 995,959 Operating Expenses Electric Production Fuel 21,114 25,442 52,499 56,055 Electric Purchased Power 5,539 9,495 45,821 55,862 Electric Operating and Maintenance Expense 50,174 41,144 155,123 136,830 Cost of Products Sold (excluding depreciation) 119,465 101,198 345,411 311,551 Nonelectric Selling, General, and Administrative Expenses 20,067 17,792 64,007 56,434 Depreciation and Amortization 30,608 29,554 91,398 88,376 Electric Property Taxes 4,649 4,333 14,232 12,788 Legal Settlement Expenses — — 103,500 — Total Operating Expenses 251,616 228,958 871,991 717,896 Operating Income 68,897 96,605 129,931 278,063 Other Income and (Expense) Interest Expense (13,141) (11,790) (38,667) (35,063) Nonservice Components of Postretirement Benefits 668 304 2,161 2,441 Other Income (Expense), net 7,542 5,990 19,262 15,231 Income Before Taxes 63,966 91,109 112,687 260,672 Income Tax Expense (Benefit) 4,503 12,817 (11,777) 36,553 Net Income $ 59,463 $ 78,292 $ 124,464 $ 224,119 Weighted-Average Common Shares Outstanding: Basic 41,959 41,877 41,939 41,859 Diluted 42,168 42,138 42,123 42,106 Earnings Per Share: Basic $ 1.42 $ 1.87 $ 2.97 $ 5.35 Diluted $ 1.41 $ 1.86 $ 2.95 $ 5.32
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OTTER TAIL CORPORATION CONSOLIDATED BALANCE SHEETS (unaudited) September 30, December 31, (in thousands) 2026 2025 Assets Current Assets Cash and Cash Equivalents $ 205,829 $ 386,193 Restricted Cash 103,500 — Receivables, net of allowance for credit losses 172,566 145,496 Inventories 178,145 158,598 Investments 1,205 54,311 Regulatory Assets 21,244 20,437 Other Current Assets 69,178 34,690 Total Current Assets 751,667 799,725 Noncurrent Assets Investments 130,303 78,823 Property, Plant and Equipment, net of accumulated depreciation 3,243,986 2,876,685 Regulatory Assets 91,225 86,062 Intangible Assets, net of accumulated amortization 3,836 4,642 Goodwill 37,572 37,572 Other Noncurrent Assets 103,547 80,770 Total Noncurrent Assets 3,610,469 3,164,554 Total Assets $ 4,362,136 $ 3,964,279 Liabilities and Shareholders' Equity Current Liabilities Short-Term Debt $ 28,727 $ 60,242 Current Maturities of Long-Term Debt 121,966 79,951 Accounts Payable 127,118 93,606 Accrued Salaries and Wages 40,549 35,666 Accrued Taxes 16,320 18,460 Regulatory Liabilities 62,510 16,600 Other Current Liabilities 150,239 46,433 Total Current Liabilities 547,429 350,958 Noncurrent Liabilities and Deferred Credits Pension Benefit Liability 31,802 32,376 Other Postretirement Benefits Liability 32,861 31,813 Regulatory Liabilities 311,100 297,398 Deferred Income Taxes 294,639 305,931 Deferred Tax Credits 14,094 14,321 Other Noncurrent Liabilities 126,591 106,156 Total Noncurrent Liabilities and Deferred Credits 811,087 787,995 Commitments and Contingencies Capitalization Long-Term Debt 1,090,985 963,566 Shareholders’ Equity Common Shares 209,928 209,528 Additional Paid-In Capital 433,609 434,195 Retained Earnings 1,269,234 1,217,567 Accumulated Other Comprehensive Income (Loss) (136) 470 Total Shareholders' Equity 1,912,635 1,861,760 Total Capitalization 3,003,620 2,825,326 Total Liabilities and Shareholders' Equity $ 4,362,136 $ 3,964,279
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OTTER TAIL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Nine Months Ended September 30, (in thousands) 2026 2025 Operating Activities Net Income $ 124,464 $ 224,119 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 91,398 88,376 Deferred Tax Credits (227) (477) Deferred Income Taxes (14,588) 14,527 Investment Gains (3,893) (5,519) Stock Compensation Expense 9,735 8,106 Legal Settlement Expenses 103,500 — Other, net (8,605) (3,636) Change in Operating Assets and Liabilities: Receivables (27,070) (20,730) Inventories (17,986) (2,837) Regulatory Assets (8,833) (1,429) Other Assets (5,492) 4,985 Accounts Payable 29,580 (8,702) Accrued and Other Liabilities 2,134 (3,530) Regulatory Liabilities 35,773 (363) Pension and Other Postretirement Benefits (1,995) (3,941) Net Cash Provided by Operating Activities 307,895 288,949 Investing Activities Capital Expenditures (451,586) (213,329) Proceeds from Disposal of Investments and Other Assets 61,627 4,957 Purchases of Investments and Other Assets (56,236) (7,642) Net Cash Used in Investing Activities (446,195) (216,014) Financing Activities Net Repayments of Short-Term Debt (31,515) (69,615) Proceeds from Issuance of Long-Term Debt 170,000 100,000 Dividends Paid (72,797) (66,044) Payments for Shares Withheld for Employee Tax Obligations (3,974) (3,134) Other, net (278) (3,007) Net Cash Provided by (Used in) Financing Activities 61,436 (41,800) Net Change in Cash, Cash Equivalents and Restricted Cash (76,864) 31,135 Cash, Cash Equivalents and Restricted Cash at Beginning of Period 386,193 294,651 Cash, Cash Equivalents and Restricted Cash at End of Period $ 309,329 $ 325,786
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OTTER TAIL CORPORATION SEGMENT RESULTS (unaudited) Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2026 2025 2026 2025 Operating Revenues Electric $ 134,979 $ 138,597 $ 422,167 $ 417,048 Manufacturing 89,709 76,951 267,731 237,363 Plastics 95,825 110,015 312,024 341,548 Total Operating Revenues $ 320,513 $ 325,563 $ 1,001,922 $ 995,959 Operating Income (Loss) Electric $ 29,548 $ 35,750 $ 82,868 $ 88,426 Manufacturing 3,806 5,690 16,434 13,184 Plastics 39,342 58,957 44,612 189,867 Corporate (3,799) (3,792) (13,983) (13,414) Total Operating Income $ 68,897 $ 96,605 $ 129,931 $ 278,063 Net Income (Loss) Electric $ 27,418 $ 27,308 $ 81,365 $ 71,211 Manufacturing 2,569 3,916 11,423 8,930 Plastics 28,970 43,495 31,829 140,038 Corporate 506 3,573 (153) 3,940 Total Net Income $ 59,463 $ 78,292 $ 124,464 $ 224,119 Nine Months Ended September 30, 2026 2025 Adjusted Net Income (Loss)1) Electric $ 81,365 $ 71,211 Manufacturing 11,423 8,930 Plastics 109,040 140,038 Corporate (153) 3,940 Total Adjusted Net Income $ 201,675 $ 224,119 (1) No adjustments were made to net income (loss) for three months ended September 30, 2026 and 2025.
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OTTER TAIL CORPORATION NON-GAAP RECONCILIATIONS (unaudited) ADJUSTED NET INCOME (LOSS) AND ADJUSTED DILUTED EARNINGS PER SHARE The following table presents reconciliations of non-GAAP performance measures to the most directly comparable GAAP performance measures for the periods presented: Nine Months Ended September 30, (in thousands) 2026 2025 Plastics Segment Net Income $ 31,829 $ 140,038 Add: Legal Settlement Expense 103,500 — Less: Tax Effect of Adjustment(1) (26,289) — Adjusted Net Income $ 109,040 $ 140,038 Consolidated Net Income $ 124,464 $ 224,119 Add: Legal Settlement Expense 103,500 — Less: Tax Effect of Adjustment(1) (26,289) — Adjusted Net Income $ 201,675 $ 224,119 Consolidated Diluted Earnings Per Share $ 2.95 $ 5.32 Add: Legal Settlement Expense 2.46 — Less: Tax Effect of Adjustment(1) (0.62) — Adjusted Diluted Earnings Per Share $ 4.79 $ 5.32 (1) The tax effect of the adjustment was calculated using a 25.4% tax rate, determined based on a 21.0% federal statutory rate and a 4.4% blended state income tax rate.