Otter Tail Corp
For the period ended Sep 30, 2026. Filed Nov 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 4, 2026
OTTR$78.44-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001466593-26-000071
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0001466593-26-000081
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 142 previous paragraphs and 162 current paragraphs.
66 unchanged; 56 reworded; 37 added; 16 removed; 4 previous and 3 current paragraphs rearranged.
Tables are not compared: 22 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (37)
Current report
Interest Expense increased $1.4 million primarily due to the issuance of an additional $170.0 million of long-term debt at OTP during the year, the proceeds of which were primarily used to fund capital investments.
Current report
Income Tax Expense decreased $8.3 million primarily due to higher PTCs at OTP resulting from increased wind generation eligible for such credits. PTCs reduce both operating revenues and income tax expense.
Current report
Operating Revenues decreased $3.6 million primarily due to:
Current report
•A $3.6 million increase in PTCs, as described below.
Current report
•A decrease in certain rider revenues and lower commercial and industrial sales volumes.
Current report
•A $5.9 million increase in retail revenue driven by an interim rate increase in Minnesota that became effective in January 2026 as part of our ongoing rate case and increased final base rates in South Dakota that became effective in April 2026.
Current report
•A $2.3 million increase due to the impact of favorable weather.
Current report
Production Fuel costs decreased $4.3 million primarily driven by lower generation from our coal-fired facilities. The Minnesota jurisdictional share of one of our coal-fired facilities, Coyote Station, was designated to be operated as an emergency only resource beginning June 1, 2026. The Minnesota jurisdictional share of the facility will only generate energy during a MISO declared emergency event. This designation resulted in a reduction of overall generation from Coyote Station compared to the same period last year.
Current report
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.
Current report
Cost of Products Sold increased $13.2 million primarily due to higher steel costs, increased sales volumes, and higher labor and other operating costs, including freight, supplies, and equipment repairs. Labor costs increased as staffing levels were expanded to support customer demand. In addition, productivity was negatively impacted by the time required for newly hired employees to reach targeted productivity levels.
Current report
Selling, General, and Administrative Expenses increased $2.1 million, primarily due to increased compensation costs, driven by increased headcount and wage inflation, higher insurance costs, increased external services provider expenses, and inflationary increases in other operating costs.
Current report
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.
Current report
Cost of Products Sold increased $5.1 million primarily due to a 10% increase in PVC resin and other input material costs, largely driven by global PVC resin supply and demand dynamics, as well as increases in freight, labor, and overhead costs. These cost increases were partially offset by a decrease in sales volumes, as described above.
Current report
Other Income (Expense), net decreased $0.7 million primarily due to lower investment income driven by lower amounts of cash available for investment.
Current report
Interest Expense increased $3.6 million primarily due to the issuance of additional $170.0 million of long-term debt during the year, the proceeds of which were primarily used to fund our capital investments.
Current report
Other Income (Expense), net increased $4.0 million primarily due to higher AFUDC in our Electric segment, reflecting continued investments in our Abercrombie and Solway solar projects.
Current report
Operating Revenues increased $5.1 million primarily due to:
Current report
•A $13.2 million increase in PTCs, as described below.
Current report
•A decrease in rider revenues associated with our wind facilities, driven by lower operating costs at those facilities.
Current report
Other Income (Expense), net increased $4.7 million primarily due to an increase in AFUDC driven by capital investments in our Abercrombie and Solway solar projects.
Current report
Cost of Products Sold increased $23.1 million primarily due to higher steel costs, increased sales volumes, and higher labor and other operating costs, including freight, supplies, and equipment repairs. Labor costs increased as staffing levels were expanded to support customer demand. In addition, productivity was impacted by the time required for newly hired employees to reach targeted productivity levels.
Current report
Depreciation and Amortization decreased $2.0 million, as certain assets previously placed into service have become fully depreciated.
Current report
Other Income (Expense), net decreased $0.7 million primarily due to lower investment income driven by lower amounts of cash available for investment.
Current report
ENVIRONMENTAL REGULATION
Current report
Regional Haze Rule (RHR)
Current report
The Environmental Protection Agency (EPA) adopted the RHR in an effort to improve visibility in national parks and wilderness areas. The RHR requires states, in coordination with the EPA and other governmental agencies, to develop and implement state implementation plans (SIPs) that work towards achieving natural visibility conditions by the year 2064; to set goals to ensure reasonable progress is being made; and to periodically evaluate whether those goals and progress are on track or whether additional emission reductions are necessary. RHR compliance is to be monitored through several implementation periods, the second of which covers the years 2018-2028.
Current report
Coyote Station is subject to assessment in this implementation period. The ND Department of Environmental Quality submitted the ND State Implementation Plan (SIP) in August 2022. In December 2024, the EPA published its ruling on the ND SIP, partially approving and partially disapproving of the plan. Specific to Coyote, the EPA ruled that the ND SIP relied on non-statutory methods to reject the implementation of emission controls. The EPA has two years from the date of publication of its partial disapproval to publish a Federal Implementation Plan, which could include additional emission controls at Coyote Station.
Current report
On April 30, 2025, the EPA granted the Coyote Station co-owners’ request to reconsider the partial disapproval of the ND SIP.
Current report
On September 9, 2026, the EPA published a proposed rule repealing its December 2024 partial disapproval of the ND SIP. Based on its reconsideration, the EPA is proposing to agree with North Dakota’s conclusion that no additional emission control measures are necessary.
Current report
At this time, the final resolution of regional haze compliance in North Dakota, and specifically the impact, if any, on the operations of Coyote Station, is uncertain.
Current report
Clean Air Act
Current report
In May 2024, the EPA finalized new regulations under Section 111 of the Clean Air Act to regulate greenhouse gas (GHG) emissions from existing and new fossil fuel-based power plants. The rule establishes CO 2 emission reduction requirements of existing coal-fired power plants based on the date the plant will cease operations. Coyote Station and Big Stone Plant are within the scope of the regulation.
Current report
On June 17, 2025, the EPA published a proposed rule that would repeal all GHG emission standards for fossil fuel-fired power plants. As an alternative, the EPA also proposed to repeal only the emission guidelines applicable to existing fossil fuel-fired steam generating units.
Current report
On September 17, 2026, the EPA published a final rule repealing most provisions of the 2024 GHG rule, thereby eliminating the emission guidelines for existing fossil fuel-fired power plants. However, following the issuance of the new regulations, several industry groups filed lawsuits challenging the regulation. At this time, whether the final rule will be upheld, and the ultimate impact on the operations of Coyote Station and Big Stone Plant is uncertain.
Current report
Also on September 17, 2026, the EPA released a supplemental proposal to repeal all remaining GHG emission requirements for power plants promulgated under Section 111 of the Clean Air Act. As a basis for a full repeal, EPA proposes to find that Section 111 of the Clean Air Act does not authorize it to regulate emissions from power plants in response to global climate change. The proposed rule has not yet been finalized.
Current report
Each of the three settlement agreements received final court approval and following approval was subject to 30-day appeal period. As of the date of this filing, the appeal periods for all three settlement agreements have expired and no appeals were filed. Upon the expiration of the applicable appeal periods, the $103.5 million of settlement funds were no longer subject to restriction, and the related settlement obligations were satisfied.
Current report
During the second quarter of 2026, the Company entered into settlement agreements in the U.S. PVC pipe antitrust class action lawsuit and agreed to pay an aggregate of $103.5 million to resolve all claims asserted against it. All settlement agreements have received final court approval, and following approval were each subject to a 30-day appeal period. As of the date of this filing, the appeal periods for all settlement agreements have expired and no appeals were filed. Upon the expiration of the applicable appeal periods, the $103.5 million of settlement funds previously deposited in escrow were no longer subject to restriction and the related settlement obligations were satisfied.
Removed paragraphs (16)
Previous report
Income Tax (Benefit) Expensewas a benefit of $23.3 million for the three months ended June 30, 2026, compared to income tax expense of $13.7 million for the same period in 2025. The change was primarily attributable to a $26.3 million tax benefit recognized as a result of the litigation settlements executed during the period, as referenced above. The Company's effective tax rate for the period also benefited from increased PTCs generated by our wind facilities following the completion of repowering projects in late 2025 and early 2026.
Previous report
Operating Revenues decreased $7.4 million primarily due to:
Previous report
•A $6.2 million increase in PTCs, the benefit of which is passed on to customers, as described below.
Previous report
•A decrease in wholesale revenue due to lower excess generation available to sell into the wholesale market driven by a planned outage at one of our coal-fired facilities, and a decrease in rider revenue due to certain non-recurring benefits recognized in the same period last year and changes in jurisdictional allocation factors.
Previous report
•The recovery of additional rate base investments, higher commercial and industrial sales volumes, and the impact of favorable weather.
Previous report
Cost of Products Sold increased $6.7 million primarily due to higher steel costs and sales volumes, partially offset by improved absorption of fixed manufacturing costs attributable to the higher production volumes.
Previous report
Operating Revenues decreased $1.0 million compared to the same period last year, primarily due to a 14% decrease in average sales prices. The impact of lower pricing was largely offset by a 15% increase in sales volumes, primarily driven by customer purchasing activity ahead of announced PVC resin cost increases and additional production capacity recently added at our Phoenix facility.
Previous report
Income Tax (Benefit) Expense was a $9.7 million tax benefit in the current year compared to an $18.7 million tax expense in the same period last year. Income tax benefit for the three months ended June 30, 2026 included discrete tax benefits of $26.3 million recognized in connection with the settlement agreements executed in the period.
Previous report
General and Administrative Expenses increased $1.4 million primarily driven by higher employee compensation costs.
Previous report
Other Income (Expense), net increased $2.5 million primarily due to an increase in AFUDC in our Electric segment, driven by our continued investments in our Abercrombie and Solway solar projects.
Previous report
Operating Revenues increased $8.7 million primarily due to:
Previous report
•A $9.6 million increase in PTCs, the benefit of which is passed on to customers, as described below.
Previous report
•A decrease in wholesale revenue due to lower excess generation available to sell into the wholesale market driven by a planned outage at one of our coal-fired facilities, as well as lower fuel recovery revenues as a result of the outage, and the impact of unfavorable weather.
Previous report
Cost of Products Sold increased $9.9 million primarily due to higher steel costs and sales volumes, partially offset by improved absorption of fixed manufacturing costs attributable to the higher production volumes.
Previous report
Cost of Products Sold increased $5.7 million primarily due to an increase in sales volumes, as described above. The cost of input materials, including PVC resin, decreased 7% compared to the prior year, driven by global supply and demand dynamics which resulted in elevated resin supply, partially offsetting the impact of increased sales volumes.
Previous report
During the second quarter of 2026, the Company entered into agreements with each of the three putative classes in the ongoing U.S. PVC pipe antitrust class action lawsuit. Under the terms of the agreements, the Company agreed to pay an aggregate of $103.5 million to resolve all claims asserted against it in the litigation. The Company deposited $73.5 million into settlement fund escrow accounts in June 2026, and the remaining $30.0 million in July 2026. The deposited funds remain restricted in escrow pending final court approval and completion of the settlement process.
Reworded paragraphs (56)
Previous wording
Provided below are a summary and discussion of our operating results on a consolidated basis followed by a discussion of the operating results of each of our segments: Electric, Manufacturing and Plastics. In addition to the segment results, we provide an overview of our Corporate costs. Our Corporate costs do not constitute a reportable segment, but rather consist of unallocated general corporate expenses, such as corporate staff and overhead costs, the results of our captive insurance company and other items excluded from the measurement of segment performance. Corporate costs are added to operating segment totals to reconcile to totals on our consolidated statements of operations.
Current wording
Provided below are a summary and discussion of our operating results on a consolidated basis followed by a discussion of the operating results of each of our segments: Electric, Manufacturing, and Plastics. In addition to the segment results, we provide an overview of our Corporate costs. Our Corporate costs do not constitute a reportable segment, but rather consist of unallocated general corporate expenses, such as corporate staff and overhead costs, the results of our captive insurance company, and other items excluded from the measurement of segment performance. Corporate costs are added to operating segment totals to reconcile to totals on our consolidated statements of income.
Previous wording
Operating Revenues increased $1.3 million primarily due to higher sales volumes in our Plastics and Manufacturing segments, higher steel costs passed through to customers in our Manufacturing segment and increased electric rates in our Electric segment. These increases were largely offset by lower sales prices in the Plastics segment, and higher PTCs, the benefit of which is passed on to customers, and lower fuel recovery revenues in the Electric segment. See the segment discussions below for additional information regarding period-over-period changes in operating revenues.
Current wording
Operating Revenues decreased $5.1 million primarily due to lower sales prices and sales volumes in our Plastics segment, as well as lower fuel recovery revenues and increased PTCs in our Electric segment, as the benefit of PTCs is passed through to customers. These decreases were partially offset by higher sales volumes and steel costs, which are passed through to customers, in our Manufacturing segment, as well as increased electric rates in our Electric segment. See the segment discussions below for additional information regarding period-over-period changes in operating revenues.
Previous wording
Operating Expenses increased $19.5 million primarily due to increased operating and maintenance expenses in the Electric segment and additional expenses driven by higher sales volumes in the Plastics and Manufacturing segments. These factors were partially offset by lower fuel and purchased power costs in the Electric segment. See our segment disclosures below for additional discussion of items impacting operating expenses.
Current wording
Operating Expenses increased $22.7 million primarily due to increased sales volumes and steel costs in our Manufacturing segment, increased operating and maintenance expenses in our Electric segment, and higher PVC resin costs in our Plastics segment. These increases were partially offset by lower fuel and purchased power costs in our Electric segment. See the segment discussions below for additional discussion of items impacting operating expenses.
Previous wording
Other Income (Expense), net increased $2.5 million primarily due to an increase in allowance for funds used during construction (AFUDC) in our Electric segment, driven by our continued investments in our Abercrombie and Solway solar projects.
Current wording
Other Income (Expense), net increased $1.6 million primarily due to higher allowance for funds used during construction (AFUDC) in our Electric segment, reflecting continued investment in our Abercrombie and Solway solar projects.
Previous wording
•A $6.4 million increase from the recovery of our additional rate base investments.
Current wording
•A $2.7 million increase from the recovery of our additional rate base investments over the period.
Previous wording
Purchased Power costs decreased $2.2 million primarily due to a 36% decrease in the price of purchased power, driven by lower market energy costs, partially offset by a 33% increase in purchased power volumes primarily driven by the planned outage at one of our facilities.
Current wording
Purchased Power costs decreased $4.0 million primarily due to a 59% decrease in the price of purchased power, driven by lower market energy costs, partially offset by a 44% increase in purchased power volumes primarily driven by the favorable price of market energy and the reduced generation from Coyote Station.
Previous wording
Operating and Maintenance expenses increased $7.9 million primarily due to higher labor costs, increased vegetative management expenses, plant outage-related expenses and an increase in insurance costs.
Current wording
Operating and Maintenance expenses increased $9.0 million primarily due to higher labor costs, driven by a lower level of labor capitalization resulting from the timing of construction project activity, increased vegetative management expenses, plant outage-related costs, and an increase in insurance costs.
Previous wording
Depreciation and Amortization expense increased $1.9 million as additional assets, including certain wind generation, distribution and transmission assets, were placed in service.
Current wording
Depreciation and Amortization expense increased $1.5 million as additional assets, including certain wind generation, distribution, and transmission assets, were placed in service.
Previous wording
Interest Expense increased $1.2 million primarily due to the issuance of additional long-term debt in the current year totaling $170.0 million, the proceeds of which were primarily used to fund our capital investments.
Current wording
Interest Expense increased $1.4 million primarily due to the issuance of additional long-term debt during the year totaling $170.0 million, the proceeds of which were primarily used to fund our capital investments.
Previous wording
Other Income (Expense), net increased $2.1 million primarily due to an increase in AFUDC driven by our continued investments in our Abercrombie and Solway solar projects.
Current wording
Other Income (Expense), net increased $2.2 million primarily due to an increase in AFUDC driven by capital investments in our Abercrombie and Solway solar projects.
Previous wording
Income Tax Benefit increased $9.8 million primarily due to an increase in PTCs driven by increased wind generation that qualified for PTCs compared to the same period last year. Our wind repowering projects were completed in the first quarter of 2026. The completion of these facility repowering projects resulted in the commencement of PTCs earned from the generation from these facilities as they were placed back into service. PTCs are credited to customers, resulting in a reduction of both operating revenue and income taxes.
Current wording
Income Tax Benefit increased $5.1 million primarily due to an increase in PTCs driven by increased wind generation that qualified for tax credits compared to the same period last year. Our wind repowering projects were completed in late 2025 and early 2026. The completion of these repowering projects resulted in the commencement of PTCs earned on the generation from these facilities as they were placed back into service. The income tax benefit of PTCs is credited to customers and recognized as a reduction of operating revenue. Accordingly, PTCs generally do not impact net income.
Previous wording
Income Tax Expense increased $1.4 million primarily due to the increase in income before income taxes.
Current wording
Income Tax Expense decreased $5.1 million due to a decrease in income before income taxes.
Previous wording
Income Tax (Benefit) Expense reflected income tax expense of $0.3 million for the three months ended June 30, 2026, compared to income tax benefit of $1.5 million in the same period last year due to the internal allocation of interim tax expense.
Current wording
Income Tax Benefit decreased $2.3 million compared to the same period last year due to the internal allocation of interim tax expense.
Previous wording
The following table summarizes consolidated operating results for the six months ended June 30, 2026 and 2025:
Current wording
The following table summarizes consolidated operating results for the nine months ended September 30, 2026 and 2025:
Previous wording
Operating Revenues increased $11.0 million primarily due to higher sales volumes in our Plastics segment and increased revenues from our Electric segment driven by recent rate increases. In addition, higher steel costs, which are passed on to customers, and increased sales volumes in our Manufacturing segment also contributed to the increase in operating revenues. These increases were largely offset by lower sales prices in our Plastics segment and increased PTCs in our Electric segment, the benefit of which is passed on to customers. See our segment disclosures below for additional discussion of items impacting operating revenues.
Current wording
Operating Revenues increased $6.0 million primarily due to higher revenues from our Electric segment driven by recent rate increases, increased sales volumes in our Plastics segment, and higher steel costs and sales volumes in our Manufacturing segment. These increases were largely offset by lower sales prices in our Plastics segment and lower fuel recovery revenues in our Electric segment. See the segment discussions below for additional information regarding the period-over-period changes in operating revenues.
Previous wording
Operating Expenses increased $27.9 million primarily due to increased operating and maintenance expenses in the Electric segment, as well as increased expenses driven by higher sales volumes in the Plastics segment and higher material costs in the Manufacturing segment. These factors were partially offset by lower purchased power costs in the Electric segment. See our segment disclosures below for additional discussion of items impacting operating expenses.
Current wording
Operating Expenses increased $50.6 million primarily due to higher operating and maintenance expenses in our Electric segment, higher sales volumes and steel costs in our Manufacturing segment, and higher sales volumes in our Plastics segment. These increases were partially offset by lower fuel and purchased power costs in our Electric segment. See the segment discussions below for additional discussion of items impacting operating expenses.
Previous wording
Legal Settlement Expenses reflect a $103.5 million estimated loss contingency recognized in the Plastics segment related to the ongoing U.S. PVC pipe antitrust class action lawsuit and settlement agreements entered into during the period. See Note 10 to the consolidated financial statements for additional information regarding the lawsuit and related settlements.
Current wording
Legal Settlement Expenses reflect a $103.5 million estimated loss contingency recognized in the Plastics segment related to the U.S. PVC pipe antitrust class action lawsuit and settlement agreements entered into during the second quarter. See Note 10 to the consolidated financial statements for additional information regarding the lawsuit and related settlements.
Previous wording
Income Tax (Benefit) Expensewas a benefit of $18.4 million for the six months ended June 30, 2026, compared to income tax expense of $23.7 million for the same period in 2025. The change was primarily attributable to a $26.3 million tax benefit recognized as a result of the litigation settlements executed during the period, as referenced above. Our effective tax rate decreased in 2026 compared with 2025 primarily as a result of the discrete tax benefits described above. The decrease was also attributable to higher PTCs generated by the Company's wind generation facilities following the completion of repowering projects at certain facilities in late 2025 and early 2026.
Current wording
Income Tax (Benefit) Expensewas a benefit of $11.8 million for the nine months ended September 30, 2026, compared to income tax expense of $36.6 million for the same period last year. The change was primarily attributable to a $26.3 million tax benefit recognized in connection with the litigation settlements entered into during the second quarter, as discussed above. In addition, the Company's effective tax rate decreased in 2026 compared with 2025 due to higher PTCs generated by its wind generation facilities following the completion of repowering projects at certain facilities in late 2025 and early 2026.
Previous wording
The following table summarizes Electric segment operating results for the six months ended June 30, 2026 and 2025:
Current wording
The following table summarizes Electric segment operating results for the nine months ended September 30, 2026 and 2025:
Previous wording
The operating results of our Electric segment are impacted by fluctuations in weather conditions and the resulting demand for electricity for heating and cooling. The following table shows heating and cooling degree days as a percent of normal for the six months ended June 30, 2026 and 2025.
Current wording
The operating results of our Electric segment are impacted by fluctuations in weather conditions and the resulting demand for electricity for heating and cooling. The following table shows heating and cooling degree days as a percent of normal for the nine months ended September 30, 2026 and 2025.
Previous wording
The following table summarizes the estimated effect on diluted earnings per share of the difference in retail kwh sales under actual weather conditions and expected retail kwh sales under normal weather conditions for the six months ended June 30, 2026 and 2025, and between those periods.
Current wording
The following table summarizes the estimated effect on diluted earnings per share of the difference in retail kwh sales under actual weather conditions and expected retail kwh sales under normal weather conditions for the nine months ended September 30, 2026 and 2025, and between those periods.
Previous wording
•A $6.4 million increase from higher rates, reflecting interim and final base rate increases in Minnesota and South Dakota. Interim rates in Minnesota and South Dakota became effective in January 2026 and December 2025, respectively, and final base rates in South Dakota went into effect in April 2026.
Current wording
•A $20.1 million increase from higher rates, reflecting interim and final base rate increases in Minnesota and South Dakota. Interim rates in Minnesota and South Dakota became effective in January 2026 and December 2025, respectively, and new final base rates in South Dakota went into effect in April 2026.
Previous wording
•A $5.4 million increase from higher commercial and industrial sales volumes.
Current wording
•A $5.1 million increase from higher commercial and industrial sales volumes.
Previous wording
•A $6.5 million decrease in fuel recovery revenues, driven by a planned outage at one of our coal-fired facilities, which resulted in lower coal consumption. In addition, lower market energy prices, as described below, also contributed to reduced fuel recovery revenues.
Current wording
•A $14.2 million decrease in fuel recovery revenues, driven by a decrease in generation from of our coal-fired facilities which resulted in lower coal consumption, as well as lower market energy prices, as described below.
Previous wording
Production Fuel costs decreased $5.7 million primarily driven by lower generation from our coal-fired facilities, as a planned outage at one of our facilities during the period resulted in lower fuel consumption.
Current wording
Production Fuel costs decreased $3.6 million primarily driven by lower generation from our coal-fired facilities, as a planned outage at one of our facilities during the period resulted in lower fuel consumption.
Previous wording
Purchased Power costs decreased $6.1 million primarily due to an 11% decrease in the price of purchased power due to decreased market energy costs.
Current wording
Purchased Power costs decreased $10.0 million primarily due to a 24% decrease in the price of purchased power due to decreased market energy costs.
Previous wording
Operating and Maintenance expenses increased $9.3 million, primarily due to higher labor costs, driven by a lower level of labor capitalization resulting from the timing of construction project activity, as well as higher insurance and vegetation management costs.
Current wording
Operating and Maintenance expenses increased $18.3 million, primarily due to higher labor costs, driven by a lower level of labor capitalization resulting from the timing of construction project activity. Additional increases included higher vegetation management costs, plant outage-related expenses, insurance costs, and software costs.
Previous wording
Depreciation and Amortization increased $3.0 million due to additional assets, including certain wind, transmission and distribution assets, being placed in service.
Current wording
Depreciation and Amortization increased $4.5 million due to additional assets, including certain wind, transmission, and distribution assets, being placed in service.
Previous wording
Interest Expense increased $2.2 million primarily due to the issuance of additional long-term debt in the current year, totaling $170.0 million, the proceeds of which were primarily used to fund our capital investments.
Current wording
Interest Expense increased $3.6 million primarily due to the issuance of additional long-term debt during the year, totaling $170.0 million, the proceeds of which were primarily used to fund our capital investments.
Previous wording
Income Tax Benefit increased $8.6 million primarily due to an increase in PTCs driven by increased wind generation that qualified for PTCs compared to the same period last year. Our wind repowering projects were completed in the first quarter of 2026. The completion of these facility repowering projects resulted in the commencement of PTCs earned from the generation from these facilities as they were placed back into service. PTCs are credited to customers, resulting in a reduction of both operating revenue and income taxes.
Current wording
Income Tax Benefit increased $14.9 million primarily due to an increase in PTCs driven by increased wind generation that qualified for tax credits compared to the same period last year. Our wind repowering projects were completed in late 2025 and early 2026. The completion of these facility repowering projects resulted in the commencement of PTCs earned from the generation from these facilities as they were placed back into service. The income tax benefits of PTCs are credited to customers and recognized as a reduction of operating revenue. Accordingly, PTCs generally do not impact net income.
Previous wording
The following table summarizes Manufacturing segment operating results for the six months ended June 30, 2026 and 2025:
Current wording
The following table summarizes Manufacturing segment operating results for the nine months ended September 30, 2026 and 2025:
Previous wording
Operating Revenues increased $17.6 million primarily due to steel cost increases which drove a 7% revenue increase, as steel costs are passed on to customers, as well as a 4% increase in sales volumes. Demand improved in certain markets we serve, including the construction, recreational vehicle and horticulture markets, compared to softer demand and tighter inventory management efforts during the same period last year.
Current wording
Operating Revenues increased $30.4 million primarily due to steel cost increases, which drove a 6% revenue increase, as steel costs are passed on to customers, as well as a 7% increase in sales volumes. Demand improved in certain markets we serve, including the energy, construction, recreational vehicle, and lawn and garden markets, compared to softer demand and tighter inventory management efforts during the same period last year.
Previous wording
Selling, General, and Administrative Expenses increased $2.4 million, driven by variable compensation costs associated with financial results during the period and expectations for full-year performance.
Current wording
Selling, General, and Administrative Expenses increased $6.0 million, largely driven by employee compensation cost, including variable compensation associated with financial results during the period and expectations for full-year performance.
Previous wording
The following table summarizes Plastics segment operating results for the six months ended June 30, 2026 and 2025:
Current wording
The following table summarizes Plastics segment operating results for the nine months ended September 30, 2026 and 2025:
Previous wording
Operating Revenues decreased $15.3 million compared to the same period last year, primarily reflecting a 16% decrease in average sales prices. The impact of lower pricing was partially offset by an 11% increase in sales volumes. Higher sales volumes were primarily driven by customer purchasing activity ahead of announced PVC resin cost increases and leveraging the additional capacity recently added at our Phoenix facility.
Current wording
Operating Revenues decreased $29.5 million compared to the same period last year, primarily reflecting a 14% decrease in average sales prices. The impact of lower average sales prices was partially offset by a 6% increase in sales volumes. Higher sales volumes were primarily driven by leveraging the additional capacity added at our Phoenix facility.
Previous wording
Cost of Products Sold increased $5.7 million primarily due to an increase in sales volumes, as described above. The impact of increased sales volumes was partially offset by a 2% decrease in the cost of input materials, including PVC resin.
Current wording
Cost of Products Sold increased $10.8 million primarily due to an increase in sales volumes, as described above, as well as increases in freight, labor, and overhead costs. The cost of PVC resin and other input materials decreased 2%, which partially offset the impact of increased sales volumes.
Previous wording
Legal Settlement Expenses reflect an estimated loss contingency recognized in the period. In the second quarter of 2026, we entered into settlement agreements with each of the three putative classes in the ongoing U.S. PVC pipe antitrust class action lawsuit. In connection with these matters, we recognized an estimated pre-tax loss in the amount of $103.5 million during the period. See Note 10 to the consolidated financial statements for additional information regarding the lawsuit and related settlements.
Current wording
Legal Settlement Expenses reflect a loss recognized in the period in connection with the U.S. PVC pipe antitrust class action lawsuit. In the second quarter of 2026, we entered into settlement agreements with each of the three putative classes in the U.S. PVC pipe antitrust class action lawsuit. In connection with these matters, we recognized an estimated pre-tax loss in the amount of $103.5 million during the period. See Note 10 to the consolidated financial statements for additional information regarding the lawsuit and related settlements.
Previous wording
Income Tax Expense decreased $32.0 million compared to the same period last year. Income tax expense for the six months ended June 30, 2026, included discrete tax benefits of $26.3 million recognized in connection with the settlement agreements executed in the period.
Current wording
Income Tax Expense decreased $37.1 million compared to the same period last year. Income tax expense for the nine months ended September 30, 2026 included discrete tax benefits of $26.3 million recognized in connection with the settlement agreements executed in the period.
Previous wording
The following table summarizes Corporate operating results for the six months ended June 30, 2026 and 2025:
Current wording
The following table summarizes Corporate operating results for the nine months ended September 30, 2026 and 2025:
Previous wording
On March 10, 2026, the SDPUC approved a settlement agreement between OTP and the commission staff in the general rate case. The key provisions of the order included a net increase in annual revenue of $3.3 million, or 7.7%, based on a return on rate base of 7.09%. Through the settlement of the case, the parties also agreed to a moratorium on increases to base rates until December 1, 2029, with certain exceptions. New base rates in South Dakota went into effect on April 1, 2026, and interim rate refunds totaling $0.8 million were refunded to customers during the three months ended June 30, 2026.
Current wording
On March 10, 2026, the SDPUC approved a settlement agreement between OTP and the commission staff in the general rate case. The key provisions of the order included a net increase in annual revenue of $3.3 million, or 7.7%, based on a return on rate base of 7.09%. Through the settlement of the case, the parties also agreed to a moratorium on increases to base rates until December 1, 2029, with certain exceptions. New base rates in South Dakota went into effect on April 1, 2026, and interim rate refunds totaling $0.8 million were refunded to customers.
Showing the first 40 of 56 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•An $8.3 million decrease in fuel recovery revenues, driven by a decrease in generation from our coal and natural gas facilities which resulted in lower fuel consumption, as well as lower market energy prices, as described below.
Current report — wording carried from elsewhere
•An $8.9 million increase from the recovery of our additional rate base investments over the period.
Current report — wording carried from elsewhere
Income Tax Benefit decreased $2.8 million compared to the same period last year due to the internal allocation of interim tax expense.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Operating Revenues increased $9.7 million primarily due to steel cost increases, which drove a 9% revenue increase, as steel costs are passed on to customers, as well as a 3% increase in sales volumes. Demand improved in certain markets we serve, including the construction, recreational vehicle and horticulture markets, compared to softer demand and tighter inventory management efforts during the same period last year.
Previous report — wording carried elsewhere
Legal Settlement Expenses reflect a $103.5 million estimated loss contingency recognized in the Plastics segment related to the ongoing U.S. PVC pipe antitrust class action lawsuit and settlement agreements entered into during the period. See Note 10 to the consolidated financial statements for additional information regarding the lawsuit and related settlements.
Previous report — wording carried elsewhere
•A $14.2 million increase from higher rates, reflecting interim and final base rate increases in Minnesota and South Dakota. Interim rates in Minnesota and South Dakota became effective in January 2026 and December 2025, respectively, and final base rates in South Dakota went into effect in April 2026.
Previous report — wording carried elsewhere
Legal Settlement Expenses reflect an estimated loss contingency recognized in the period. In the second quarter of 2026, we entered into settlement agreements with each of the three putative classes in the ongoing U.S. PVC pipe antitrust class action lawsuit. In connection with these matters, we recognized an estimated pre-tax loss in the amount of $103.5 million during the period. See Note 10 to the consolidated financial statements for additional information regarding the lawsuit and related settlements.