Otter Tail : Second Quarter 2026 Earnings Conference Call Presentation

About this update from Otter Tail Corporation

Q2 2026 Earnings Conference Call Company Overview ELECTRIC Founded in 1907 Serve approximately 134,000 customers in MN, ND, SD Regulated and vertically integrated electric utility MANUFACTURING Owned and operated for over 20 years Diverse end-markets High utilization of asset base Investment Thesis Best in class utility : Strong EPS growth and low customer rates 1 Strategic diversification : Enhances consolidated ROE and cash flow 2 Internally financed growth : No external equity needs through at least 2030 3 3 Key Highlights Financial Results Reported quarterly diluted loss per share of $0.18 and adjusted diluted EPS of $1.66 1 Adjusted ROE of 15% 1 (trailing twelve months) on an equity layer of 60% Positioned for Future Growth Secured route permits for two of our large regional transmission projects Filed 15-year integrated resource plan in Minnesota Capitalized on growth opportunities from additional capacity in Georgia and Arizona 2026 Outlook Initiating adjusted diluted EPS guidance range of $5.68 to $6.08 1 1 Adjusted to remove the after-tax impact of the legal settlement expense recognized during Q2 2026. See the non-GAAP reconciliations included in the Appendix 4 Financial Summary $ in millions, except per share data Quarter-to-Date Net Income Diluted EPS Year-to-Date Net Income Diluted EPS $77.7 $69.6 -10% $1.85 $1.66 -2% $3.46 $3.38 $145.8 $142.2 2025 Net Income 2026 Adjusted Net Income* 2025 Diluted EPS 2026 Adjusted Diluted EPS* 2025 Net Income 2026 Adjusted Net Income* 2025 Diluted EPS 2026 Adjusted Diluted EPS* 2026 Adjusted EPS Guidance Midpoint: $5.88 * * Adjusted to remove the after-tax impact of the legal settlement expense recognized during Q2 2026. See the non-GAAP reconciliations included in the Appendix 5 Electric Platform 6 Minnesota Rate Case Docket 25-359 Last rate request filed in 2020 Interim rate revenue of $28.6 million went into effect January 1, 2026, subject to refund Procedural schedule: Intervenor testimony: June 2026 Rebuttal testimony: July 2026 ALJ report: January 2027 Decision expected: April 2027 Amended net revenue increase request to $42.3M from $44.8M as part of rebuttal testimony Final rate implementation expected in the second half of 2027 Amended Request Filed with the Minnesota Public Utilities Commission July 2026 Net revenue increase: $42.3M (16.7% increase) ROE: 10.65% (existing 9.48%) Equity layer: 53.5% (existing 52.5%) 7 Minnesota Integrated Resource Plan Docket E017/RP-26-90 Outlines preferred plan for meeting customers' anticipated capacity and energy needs over 15-year period Requests new resource additions, and reflects projects in development or under construction from previously approved resource plan Anticipate a hearing and final order in Q2 2027 Request Filed with the Minnesota Public Utilities Commission May 2026 Natural Gas 50 MW 2031-2032 Wind 50 MW 2035 Wind 50 MW 2040 8 Rate Base Investment Plan Significant Rate Base Growth $ in billions 10% CAGR $3.42 $3.11 $3.26 $2.77 $2.40 $2.11 1:1 Conversion of rate base growth into Electric EPS growth ~ 90% of our capital investment is expected to be recovered through riders and existing rates 2025 (A) 2026 (F) 2027 (F) 2028 (F) 2029 (F) 2030 (F) 9 Generation and Storage Project Updates Solway Solar Est. investment: $80M Est. completion date: 2027 Recovery mechanism: Approved riders in MN and SD Abercrombie Solar Est. investment: $450M Est. completion date: 2028 Recovery mechanism: Approved riders in MN and SD Hoot Lake Battery Est. investment: $120M Est. completion date: 2028 Recovery mechanism: Approved rider in MN 10 Transmission Project Updates MISO LRTP 1 Tranche 1 Est. investment: $475M Est. completion date: 2030 Recovery mechanism: MISO tariff with state riders MISO LRTP Tranche 2.1 Est. investment: $800M - $1B Est. completion date: 2034 Recovery mechanism: MISO tariff with state riders JTIQ 2 Est. investment: $450M - $500M Est. completion date: 2034 Recovery mechanism: MISO tariff with generator payments 1 Long Range Transmission Plan 11 2 Joint Targeted Interconnection Queue Load Growth Opportunities Well positioned to attract large loads Attractive service territory - low market energy prices and high renewable production Locations identified with minimal delivery costs to site Large load tariff filed in all jurisdictions (MN, ND and SD) Load growth opportunity driven by Data centers Clean fuel Agriculture processing Thermal storage facilities Benefits of adding large loads Distributes fixed costs across larger customer base Capital investment and earnings opportunity Phases to Secure Large Load Existing Opportunity Letter of Intent 1 1,400 MW 35% Data Center 65% Other Term Sheet 2 0 MW Electric Service Agreement 3 0 MW Phase 1 and 2 large load additions not included in load growth or capex forecast 12 Customer Rates and Affordability Proven Track Record Looking Ahead Our Electric Rates Compared to Regional and National Averages 1 5-Year 2021 2022 2023 2024 2025 CAGR (15)% (12)% (14)% (16)% (19)% (23)% (23)% Otter Tail Power's 2025 rates: 19% below regional average 34% below national average (29)% (30)% (34)% Rate Base Growth 10% Affordability enablers: Net MISO system-wide recovery 3 - 4% Renewable energy tax credits 2 - 3% Other (reduced energy purchases, load growth, etc.) 0 - 1% Estimated Customer Bill Impact 3 - 4% Expected customer bill CAGR may vary by state and could be impacted by external factors, including market energy prices 1 Source: Edison Electric Institute, Typical Bills and Average Rates Report, Summer Residential Rates 13 Manufacturing Platform 14 Industry Conditions: Manufacturing BTD Manufacturing and T.O. Plastics Industries Served Industry Conditions Recreational Vehicle Lawn & Garden Construction Agriculture Industrial Horticulture Dealer inventory levels have largely normalized Agriculture industry conditions remain challenged due to weak farm economy Long-term fundamentals remain strong Weak Stable Strong 15 Plastics Pricing and Volume Trends Northern Pipe Products and Vinyltech Corporation Historical Average Sales Price of PVC Pipe 1 2026 Year-Over-Year Trends 1 PVC pipe prices have trended downward since late 2022 Average Sales Prices Sales Volumes Material Input Costs Q2 YTD ↓ 14% ↓ 16% ↑ 15% ↑ 11% ↓ 2% ↓ 7% 2019 2020 2021 2022 2023 2024 2025 2026 1 Internal sales pricing, volumes and material costs only 16 Financial Results 17 QTD Diluted EPS $1.85 $0.03 $(0.01) $(0.14) $1.66 $(0.07) Q2 2025 Diluted EPS Electric Manufacturing Plastics Corporate Q2 2026 Adjusted Diluted EPS* * Adjusted to remove the after-tax impact of the legal settlement expense recognized during Q2 2026. See the non-GAAP reconciliations included in the Appendix 18 QTD Diluted EPS Segment Level Detail $0.11 $0.46 $0.04 $(0.14) $(0.03) $0.45 $(0.02) $(0.04) $0.07 Electric Q2 2025 Diluted EPS Sales Volume Electric Rates Capital Recovery O&M Expense Depreciation Expense Interest Expense Other Q2 2026 Diluted EPS (Riders & AFUDC) $0.03 $0.11 $0.08 $(0.02) $(0.04) Manufacturing $0.06 Q2 2025 Sales Product Pricing Production SG&A Q2 2026 Diluted EPS Volume and Mix Cost Expense Diluted EPS 19 QTD Diluted EPS Segment Level Detail $0.21 $1.26 $0.02 $1.12 $(0.35) $(0.02) Plastics Q2 2025 Diluted EPS Sales Volume Product Pricing Material Cost SG&A Expense Q2 2026 Adjusted Diluted EPS* Corporate $0.05 $(0.03) $0.01 $(0.05) $(0.02) Q2 2025 Diluted EPS SG&A Expense Investment Income Income Taxes & Other Q2 2026 Diluted EPS * Adjusted to remove the after-tax impact of the legal settlement expense recognized during Q2 2026. See the non-GAAP reconciliations included in the Appendix 20 Attention : This is an excerpt of the original content. To continue reading it, access the original document here .

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