Otter Tail: Second Quarter 2026 Earnings Conference Call Presentation

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

Investment Thesis

3

Key Highlights

Financial Results

• Reported quarterly diluted loss per share of $0.18 and adjusted diluted EPS of $1.661

• 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 $6.081

  
  
  

  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)

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

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 LRTP1

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

JTIQ2

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

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 Averages1

5-Year

2021 2022 2023 2024 2025

CAGR

(23)% (23)%

Otter Tail Power's 2025 rates: 19% below regional average 34% below national average

(29)% (30)%

(34)%

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 Pipe1

2026 Year-Over-Year Trends1

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

$0.03

$0.11

$0.08

$(0.02)

$(0.04)

$0.06

QTD Diluted EPS

Segment Level Detail

$0.21

$1.26

$0.02

$1.12

$(0.35) $(0.02)

Q2 2025

Diluted EPS

Sales

Volume

Product

Pricing

Material

Cost

SG&A

Expense

Q2 2026

Adjusted Diluted EPS*

$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