Otter Tail Corporation (OTTR): Business Model Canvas [Dec-2025 Updated]

You're looking at Otter Tail Corporation (OTTR), and what makes their strategy interesting is that it's a true hybrid, balancing the predictable stability of a regulated electric utility-serving over 137,000 customers-with the higher growth potential of their manufacturing and plastics segments, which are set to account for 64% of their 2025 earnings. This means they are simultaneously executing a massive $1.9 billion capital plan for the grid while navigating the input costs for PVC resin in their non-utility side, all aiming for that $6.47 per share 2025 EPS midpoint. Honestly, to truly value this company, you need to see how these two distinct worlds connect across the nine building blocks of their operation, so let's dive into the specifics below.

Otter Tail Corporation (OTTR) - Canvas Business Model: Key Partnerships

You're looking at the essential external relationships Otter Tail Corporation relies on to keep both its regulated utility and its manufacturing/plastics businesses running smoothly. These aren't just vendors; they are critical enablers for capital deployment and cost management. Let's break down the key players Otter Tail Corporation partners with.

Regulatory Bodies and Rate Approvals

The regulated utility side, Otter Tail Power Company, absolutely depends on State Public Utility Commissions (PUCs) for its financial health. These commissions review and approve the costs Otter Tail Power incurs to provide service, which directly impacts the rates customers pay. Without their sign-off, major capital investments can't be recovered in a timely manner, creating regulatory lag.

For instance, Otter Tail Power Company filed a request with the Minnesota Public Utilities Commission (PUC) to increase electric rates for its Minnesota customers, requesting a net increase of approximately $44.8 million, or 17.7% if fully approved. Separately, they sought permission from the South Dakota Public Utilities Commission (PUC) for a rate increase that would result in a net increase to rates of approximately $5.7 million, or about 12.5% if approved as filed. Also, the Minnesota PUC approved the company's Solway and Abercrombie Solar Projects.

Capital Plan Execution Partners

Building out the utility infrastructure requires significant external expertise. Otter Tail Corporation partners with Engineering, Procurement, and Construction (EPC) firms to execute its massive investment schedule. The company increased its targeted five-year capital investment plan to $1.9 billion, which is expected to drive a rate base compounded annual growth rate of 10% through 2028.

This partnership with EPC firms is vital for deploying capital into assets like wind and solar resources, transmission, and distribution upgrades. The ability to fund this $1.9 billion plan without external equity through at least 2030 hinges on the efficient execution provided by these construction partners.

Energy and Fuel Suppliers

For its electric generation, Otter Tail Corporation relies on a diverse set of suppliers for fuel and power. The utility owns 138 MW of wind generation and purchases an additional 45 MW of wind power, totaling 183 MW of wind power capacity. Their operations also involve securing fuel, fuel transportation, and fuel reagents (like pebble lime, powdered carbon, and anhydrous ammonia) for their coal-fired plants. Furthermore, they secure capacity and energy from other utilities and the MISO energy market through purchased power agreements.

Plastics Segment Input Cost Management

The profitability of the Plastics segment, which includes Vinyltech Corporation, is heavily influenced by the cost of its primary raw material: PVC resin. A key partnership strategy here is benefiting from favorable input cost dynamics. In the third quarter of 2025, Otter Tail Corporation noted that the cost of PVC resin decreased by 16% year-over-year due to global supply and demand dynamics. This lower resin cost, combined with increased sales volumes of 4% in Q3 2025, helped the segment outperform internal expectations despite lower PVC pipe sales prices.

Here's a quick look at some of the key financial metrics tied to these external relationships as of late 2025:

Partner Category	Key Metric/Amount	Associated Segment/Activity
PUCs (MN & SD)	$44.8 million requested annual revenue increase (MN)	Electric Utility Rate Base Approval
PUCs (MN & SD)	17.7% potential final rate increase (MN)	Electric Utility Rate Base Approval
EPC Firms	$1.9 billion updated 5-year capital plan	Utility Capital Investment
PVC Resin Suppliers	16% year-over-year decrease in resin cost (Q3 2025)	Plastics Segment Input Costs
Fuel/Power Suppliers	183 MW total wind power (owned and purchased)	Electric Generation Mix

The company's ability to manage these external dependencies-from regulatory approvals to resin pricing-is what drives the updated long-term EPS growth target of 7% to 9% through 2028. Finance: draft 13-week cash view by Friday.

Otter Tail Corporation (OTTR) - Canvas Business Model: Key Activities

You're looking at the core engine of Otter Tail Corporation, the essential things they must do well to keep the whole model running, especially balancing the regulated utility side with the cyclical manufacturing operations. Here's the quick math on what that looks like as of late 2025.

Regulated Generation, Transmission, and Distribution of Electricity

This is the stability anchor. Otter Tail Power is focused on keeping the lights on while growing its asset base through regulated investments. For instance, in the third quarter of 2025, the Electric segment brought in operating revenues of $138.6 million, though net income for that quarter was $27.3 million. You see the push-and-pull of regulation and operations in their recent regulatory wins, like the North Dakota general rate case finalized in March 2025, which secured a net annual revenue requirement increase of $13.1 million based on a return on equity of 10.1 percent. They are actively managing rate cases; for example, a Minnesota filing requested a net revenue increase of $44.8 million with a target ROE of 10.65%. The utility segment is expected to deliver approximately 7% earnings growth in 2025.

Here's a snapshot of the utility's recent operational performance and regulatory footing:

Metric	Value (Latest Available 2025 Data)	Context/Period
Electric Segment Q3 2025 Operating Revenues	$138.6 million	Q3 2025
Electric Segment Q3 2025 Net Income	$27.3 million	Q3 2025
Utility Sector Leading Return on Equity (ROE)	16%	As of September 30, 2025
Utility Sector Equity Layer	Nearly 64%	As of September 30, 2025
North Dakota Rate Case Approved ROE	10.1 percent	Rates implemented March 2025

Executing the 5-year, 10% Rate Base Growth Capital Investment Plan

This activity is about funding the future of the utility business. Otter Tail Power introduced an updated 5-year capital spending plan totaling $1.9 billion. The goal here is clear: produce a rate base compounded annual growth rate (CAGR) of 10%. This is an increase from their prior plan of $1.4 billion targeting a 9% CAGR. Honestly, the balance sheet strength supports this; they have enough liquidity to fund this growth plan without needing external equity through at least 2030.

Key components driving this capital deployment include:

• Total new 5-year capital plan: $1.9 billion
• Targeted rate base CAGR: 10%
• Advancing two solar developments (totaling 345 MW)
• Nearing completion of the Wind Repowering project
• Expected new load contribution starting next year: 155-megawatt

Manufacturing Custom Metal Fabrication and Precision Plastic Parts

This segment, which includes BTD for metal fabrication, is navigating a down-cycle, but it's a necessary activity that generates cash to help fund the utility's growth. In Q3 2025, the Manufacturing segment posted operating revenues of $77.0 million and net income of $3.9 million. You have to look closely at the drivers; for example, in Q1 2025, revenues dropped 17.8% year-over-year due to lower sales volumes in agricultural and recreational vehicle markets. Still, management is focused on cost alignment and leveraging fixed costs, as seen by the 80.1% increase in net income in Q3 2025 despite revenue decline, thanks to improved efficiencies and margins. The long-term expectation is for this platform to contribute 30% of earnings once normalized (by 2028).

Producing and Selling Large Diameter PVC Pipe for Infrastructure and Construction

This is the Plastics segment, which has been a significant earnings driver, though subject to price volatility. In Q3 2025, this segment generated operating revenues of $110.0 million and net income of $43.5 million. While sales prices were down 17% year-over-year in Q3 2025, volumes were up 13% in Q1 2025, aided by new capacity. The company completed the first phase of the Vinyltech expansion, adding large-diameter PVC pipe production capability. To be fair, the second phase is on track to add another 26 million pounds of capacity early next year, which increases total Plastics segment capacity by 15%. The global market for PVC pipes is expected to grow at a CAGR of 9% between 2025-2031.

Here is how the Plastics segment stacked up recently:

Metric	Value (Latest Available 2025 Data)	Context/Period
Plastics Segment Q3 2025 Operating Revenues	$110.0 million	Q3 2025
Plastics Segment Q3 2025 Net Income	$43.5 million	Q3 2025
PVC Pipe Sales Price Change	Down 17%	Q3 2025 vs. prior year
PVC Pipe Volume Change	Up 13%	Q1 2025 vs. prior year
Vinyltech Expansion Capacity Addition	26 million pounds	Targeted early 2026

Finance: draft the 13-week cash view incorporating the $1.9 billion capital plan by Friday.

Otter Tail Corporation (OTTR) - Canvas Business Model: Key Resources

You're looking at the core assets that power Otter Tail Corporation's dual-engine model-stable utility returns funding industrial growth. Here's the quick math on what they own as of late 2025, based on their Q3 2025 disclosures.

The foundation is definitely the regulated electric utility rate base assets and infrastructure. Otter Tail Corporation is executing a new five-year capital spending plan totaling $1.9 billion, which is aimed at achieving a 10% compounded annual growth rate (CAGR) in that rate base. This aggressive growth trajectory projects the rate base expanding from $1.89 billion in 2024 to $3.41 billion by 2030. To support this, they filed a Minnesota rate case seeking a net revenue increase of $44.8 million, representing a 17.7% increase, and a South Dakota case requesting $5.7 million (12.5%). The physical network includes owning over 5,000 miles (8,000 km) of electrical power transmission lines.

The diversified generation fleet provides the necessary stability, with the Electric segment contributing 36% of expected 2025 earnings. They are actively transitioning this fleet. Otter Tail Power Company plans to add 345 MW of solar generation, split between the 50 MW Solway Solar facility and the 295 MW Abercrombie Solar facility. Furthermore, they planned to repower most existing wind facilities in 2024 and 2025, which was expected to add around 40 MW of wind generation at a 50% capacity factor. For thermal assets, the company noted a potential plan to sell its 35% ownership stake in the 425 MW Coyote Station coal-fired power plant by 2028.

The manufacturing side brings specialized production lines through subsidiaries like BTD Manufacturing and Vinyltech Corporation. The Vinyltech expansion is a key resource, set to increase the Plastics segment's production capacity by 15% through a multi-phase project. Separately, the BTD Georgia facility, which was completed in Q1 2025, is ramping up to full production capability, holding the potential to generate up to $35 million in incremental annual revenue.

Finally, the balance sheet provides the necessary fuel for these capital-intensive plans. Otter Tail Corporation reported strong financial liquidity, totaling $705.3 million as of Q3 2025. This liquidity is supported by $325.8 million in cash and cash equivalents on the same date. The CFO noted this strong position supports the $1.9 billion utility investment plan with no external equity needed through at least 2030.

Here's a snapshot of the key financial and operational metrics supporting the resource base as of the third quarter of 2025:

Resource Metric	Value / Amount	Reference Period / Target
Total Available Liquidity	$705.3 million	Q3 2025
Cash and Cash Equivalents	$325.8 million	September 30, 2025
Five-Year Utility Capex Plan	$1.9 billion	Through 2030
Targeted Electric Rate Base CAGR	10%	Five-Year Plan
Projected Rate Base (2030)	$3.41 billion	2030 Target
Vinyltech Capacity Increase	15%	Plastics Segment
BTD Georgia Incremental Revenue Potential	$35 million	Annual
New Solar Capacity Planned	345 MW	Total

You can see the direct impact of these resources across the segments in the quarterly breakdown:

• - Electric segment operating revenues: $138.6 million in Q3 2025.
• - Manufacturing segment operating revenues: $77.0 million in Q3 2025.
• - Plastics segment operating revenues: $110.0 million in Q3 2025.
• - Expected 2025 Earnings Mix (Electric): Approximately 36%.

Finance: draft 13-week cash view by Friday.

Otter Tail Corporation (OTTR) - Canvas Business Model: Value Propositions

You're looking at Otter Tail Corporation (OTTR) and trying to pin down exactly what they promise their different customers and investors. It's not just one thing; it's a mix of regulated utility stability and industrial performance. Here's the quick math on what they are delivering as of late 2025.

For their utility customers, the core value is dependable power that doesn't break the bank. Otter Tail Corporation provides reliable, low-cost electricity service to over 137,000 customers. They actively manage costs, which is why even with recent rate adjustments-like the approved 6.18% net increase in North Dakota rates and the 17.7% requested increase in Minnesota-they still aim to keep their service rates competitive, noting that their North Dakota rates remain among the lowest in the nation.

For investors, the proposition is a balanced, diversified earnings stream designed for stability. Otter Tail Corporation offers a diversified earnings stream for investors, with an expected earnings mix for 2025 showing 36% from the Electric segment and 64% from Non-Electric segments. This split helps smooth out the cyclical nature of their industrial businesses. You can see this diversification clearly in the Q3 2025 revenue snapshot:

Segment	Q3 2025 Operating Revenues	Value Proposition Link
Electric	$138.6 million	Regulated Utility Stability
Manufacturing	$77.0 million	Custom Fabrication & Industrial Output
Plastics	$110.0 million	Infrastructure Product Supply

The Manufacturing segment delivers custom, precision metal fabrication for Original Equipment Manufacturers (OEMs). While this segment faced headwinds, with Q3 2025 operating revenues at $77.0 million, the value remains in their specialized production capabilities, which even saw net income jump by 80.1% in that quarter due to better production efficiencies.

The Plastics segment provides high-quality PVC pipe products essential for water and sewer infrastructure. This business delivered $110.0 million in operating revenues in the third quarter of 2025. A key part of this value proposition is their investment in capacity, such as the Vinyltech expansion adding large-diameter PVC pipe production to better serve the Southwest market.

To summarize the key offerings Otter Tail Corporation is pushing:

• - Reliable, low-cost electricity service to over 137,000 customers.
• - Diversified earnings stream for investors (36% Electric, 64% Non-Electric in 2025).
• - Custom, precision metal fabrication for Original Equipment Manufacturers (OEMs), evidenced by the Manufacturing segment's $77.0 million in Q3 2025 revenue.
• - High-quality PVC pipe products for water and sewer infrastructure, supported by the Plastics segment's $110.0 million in Q3 2025 revenue.

Finance: draft 13-week cash view by Friday.

Otter Tail Corporation (OTTR) - Canvas Business Model: Customer Relationships

You're looking at how Otter Tail Corporation (OTTR) manages its relationship with the customers it serves across its utility and manufacturing platforms. For the regulated utility side, the relationship is heavily defined by the commission structure and long-term service agreements. For the B2B manufacturing side, it's about deep, direct engagement with industrial clients.

Regulated Service Obligation and Long-Term Utility Contracts

The Electric segment, which is a wholly-owned subsidiary, Otter Tail Power Company, operates under the direct oversight of state and federal utilities commissions. This means your service obligation is baked into approved tariffs and long-term capital plans. You're not just selling power; you're executing an approved plan to maintain and grow the grid for over 220,000 electric customers across Minnesota, North Dakota, and South Dakota.

The commitment to infrastructure is substantial, as shown by the updated five-year capital spending plan for Otter Tail Power, which totals $1.4 billion. This spending is designed to support a targeted rate base compounded annual growth rate (CAGR) of 9.0 percent through 2029. This long-term investment directly underpins the reliability you promise your customers.

To give you a sense of the competitive positioning, Otter Tail Power highlighted in Q2 2025 that its 2024 rates were 16% below the regional average and 30% below the national average. This cost advantage is a key part of the value proposition to the residential and commercial customers who rely on you.

Here's a quick look at the scale of the utility platform's expected contribution to the overall company earnings mix:

Metric	2024 Actual Contribution (Net Income)	2025 Projected Contribution (Diluted EPS)	Long-Term Target Mix (by 2028)
Electric Segment Share	30.15%	Approximately 39%	65%
Manufacturing/Plastics Share	Approximately 71% (66.55% Plastics + 4.5% Manufacturing)	Approximately 61%	35%

Direct, Long-Term B2B Relationships with Key Manufacturing Clients

The relationship with industrial customers in the Manufacturing and Plastics segments is more transactional but still relies on long-term supply agreements and market positioning. For instance, in 2019, a single customer represented 11.9% of the Electric segment's revenue, showing the significance of key industrial load centers. The company serves a diverse set of industries, including agriculture, municipal water systems, and industrial packaging, through products like PVC pipes and metal fabrication services.

The company's strategy is to build strong platforms, and the manufacturing side is expected to produce accretive returns and incremental cash flow to help fund the utility's capital plan, meaning these B2B relationships are critical for financial flexibility. You're definitely seeing the cyclical nature here; for example, the Plastics segment faced headwinds in Q2 2025 from PVC pipe prices falling 15% year-over-year, though sales volumes still managed to increase by 11%.

Proactive Regulatory Engagement for Rate Case Approvals (e.g., North Dakota)

Engaging with regulators is a core, recurring activity that directly impacts customer rates and the company's allowed return. You saw this play out clearly in North Dakota. Otter Tail Power filed its original request for a rate review on November 2, 2023. The North Dakota Public Service Commission (PSC) approved a settlement on December 30, 2024, resulting in a net annual revenue increase of $13.1 million, or an average net increase of about 6.18%.

This process sets the financial terms of the utility-customer relationship. The PSC set the allowed Return on Equity (ROE) at 10.10 percent, which was an increase from the 9.77 percent approved in the last review. Furthermore, the agreement includes an over-earnings sharing mechanism: if the annual ROE goes above 10.20 percent, the company must return 70 percent of those additional earnings back to the customers. The new rates were set to be implemented around March 15, 2025.

Dedicated Customer Service for Power Restoration and Billing Inquiries

For the utility customers, the relationship hinges on reliability and responsiveness when things go wrong. While specific power restoration metrics aren't publically detailed here, the company's stated mission is to provide electricity as reliably as possible and to offer 'timely, courteous customer service'. The financial health supports this; the company maintains a strong Current Ratio of 3.57, which points to solid liquidity for operational needs, including service restoration efforts.

In the broader customer experience landscape for 2025, you know that 45% of consumers expect issues to be resolved in the first interaction, and 80% consider experience as essential as the product itself. For Otter Tail Corporation, meeting these expectations across billing and restoration is key to retaining the approximately 134,000 customers it served at the end of 2024.

Finance: draft 13-week cash view by Friday.

Otter Tail Corporation (OTTR) - Canvas Business Model: Channels

The channels Otter Tail Corporation uses to reach and serve its diverse customer base involve physical infrastructure, direct sales efforts, regulatory interaction, and digital platforms.

For the regulated utility business, Otter Tail Power Company (OTP), the primary channel is its extensive physical grid infrastructure.

Channel Metric	Detail/Value
Electric Service Territory Coverage	70,000 square miles
Communities Served	Over 400 communities
Customer Count (Approximate, 2024)	Approximately 133,900 residential, commercial, and industrial customers
5-Year Capital Spending Plan (Electric)	Totaling $1.4 billion (through 2029)
Projected Rate Base CAGR (2025-2029)	9.0%

The Manufactured Goods and Plastics segments rely on direct commercial channels to move products like PVC pipe.

• The Plastics segment completed the first phase of the Vinyltech expansion project, adding large diameter PVC pipe production capability to better serve customers in the southwest market.
• The company focuses on increasing sales volumes through its distributor and end-market network despite PVC pipe prices being down 11% Year-over-Year (YoY) in a recent period.
• The North America PVC pipes market, where Otter Tail Corporation is a player, was valued at $6.42 billion in 2025.

Interacting with regulatory bodies is a critical channel for ensuring revenue realization and service viability for the utility segment.

• Otter Tail Power Company obtained approval for its fully settled North Dakota general rate case in the fourth quarter of 2024.
• This North Dakota rate case provided for a net annual revenue requirement increase of $13.1 million.
• The approved North Dakota rate increase represented an average net increase of 6.18%.
• The North Dakota rate case was premised on a return on equity of 10.1 percent and an equity layer of 53.5 percent.
• The company records a regulatory asset for certain costs expected to be recovered in future rates, per accounting guidance for regulated operations.

Digital channels support customer interaction for the utility business, aiming for efficiency and better information delivery.

• Otter Tail Power Company implemented a new bill design to make important information easier for customers to find.
• The company has deployed Advanced Metering Infrastructure to lay the groundwork for better meeting customer needs.

Otter Tail Corporation (OTTR) - Canvas Business Model: Customer Segments

The customer base for Otter Tail Corporation is segmented across its regulated utility and its non-regulated manufacturing and plastics businesses, reflecting a strategy of balancing stable utility returns with cyclical industrial performance.

For the Electric segment, the customer base consists of Residential, Commercial, and Industrial electric customers primarily located within Minnesota, North Dakota, and South Dakota. As of the end of 2024, Otter Tail Power Company served approximately 134,000 customers in its utility service area. This utility segment is actively positioning itself to attract significant new load by emphasizing its competitive pricing structure, with 2024 rates reported as 16% below the regional average and 30% below the national average. The company is executing a strategy to convert rate base growth into earnings growth at approximately a 1:1 ratio.

Electric Segment Customer Metric	Value/Detail	Source Year/Period
Total Utility Customers (Approximate)	134,000	Year-End 2024
Electric Segment Revenue Contribution (Expected)	36%	2025 Guidance
Electric Segment Rate Advantage (vs. National Avg)	30% below	2024 Data
North Dakota Rate Case Net Annual Revenue Requirement Increase	$13.1 million	Q4 2024 Approval

The Manufacturing segment serves customers in cyclical markets, including original equipment manufacturers (OEMs) in the recreational vehicle and agriculture sectors. This segment has experienced volatility, with operating revenues dropping 17.8% in Q1 2025 due to decreased sales volumes in these end markets. Despite this, the segment is working to mitigate volume impacts through improved production efficiencies and better margins, as seen by a net income increase of 80.1% in Q3 2025 despite a 3.7% revenue decline.

For the Plastics segment, customers include municipalities and construction firms requiring PVC pipe. This business has seen significant shifts in pricing dynamics. While sales prices decreased by 17% year-over-year in Q3 2025, sales volumes in Q4 2024 had previously increased by 23% compared to the prior year, driven by customer sales volume growth. The segment completed the first phase of the Vinyltech expansion to better serve customers needing large diameter PVC pipe.

Regarding new, large industrial customer acquisition for the Electric segment, Otter Tail Corporation is actively pursuing significant load additions. The company has a pipeline of over 1,000 MW of potential new large loads it is targeting. These prospects include high-demand industrial clients such as data centers and electric vehicle manufacturers.

Key customer dynamics across the non-regulated segments include:

• - Manufacturing sales volumes declined 8% in Q3 2025.
• - Plastics segment sales prices decreased by 17% in Q3 2025.
• - The Plastics segment's net income fell 20.2% in Q3 2025.
• - The company expects its long-term earnings mix to shift toward 65% from the Electric segment by 2028.

Otter Tail Corporation (OTTR) - Canvas Business Model: Cost Structure

You're looking at the core expenditures that keep Otter Tail Corporation running, which are heavily weighted toward the regulated utility side. Honestly, the utility infrastructure dictates a high fixed cost base, which is what you'd expect from a vertically integrated utility.

The capital intensity is clear when you look at the investment pace. For the first half of 2025, Otter Tail Corporation reported significant capital expenditures, including $124.2 million specifically directed toward renewables and grid modernization projects. This spending is part of a larger, aggressive capital plan. The updated five-year capital spending plan totals $1.9 billion, aiming for a 10% compounded annual growth rate (CAGR) in the rate base through 2029.

These large investments directly translate into ongoing non-operating costs. We see this reflected in the guidance; for instance, the Electric segment's 2025 earnings expectations factored in increased depreciation and interest expense from capital expenditures and associated financing. This is a recurring cost tied directly to asset deployment.

Fuel and purchased power costs for the Electric segment remain a variable, though often recoverable, cost. While Q1 2025 saw a reduction in electric production fuel expenses by 19.1% year-over-year, Q3 2025 saw wholesale revenues increase due to a 48% increase in wholesale prices driven by increased fuel costs, which are generally passed through to customers via fuel recovery revenues. The Electric segment's Q3 2025 operating revenues were $138.6 million.

On the non-utility side, raw material costs are a key factor, especially for the Plastics segment. You'll note that the segment benefited from lower input material costs, which management cited as a reason for improved margins despite lower sales prices. Specifically, favorable PVC resin costs helped the Plastics segment's net income reach $43.5 million in Q3 2025, even as operating revenues declined to $110.0 million due to a 17% drop in sales prices.

Here's a quick look at how some of these cost-related items and their resulting expenses factored into the latest reported quarter:

Cost/Expense Driver	Segment/Metric	Latest Reported Amount (Q3 2025 unless noted)
Capital Expenditures (H1 2025)	Total Company (Renewables focus)	$124.2 million
Interest Expense Change (Q1 2025 vs Q1 2024)	Total Company	Up 17.3%
Operating Expenses Impact (Q3 2025)	Electric Segment (Fuel/Maint)	Decreased (partially)
Input Material Cost Impact	Plastics Segment	Favorable/Lower
Long-Term Debt Issued (Q3 2025)	Total Company	$100.0 million

The Manufacturing segment also deals with cost deleveraging when volumes drop. For example, in Q1 2025, they expected compressed operating margins from the deleveraging of manufacturing costs due to lower production and sales volumes. Their Q3 2025 operating revenues were $77.0 million, with net income at $3.9 million.

Financing costs are a constant. The need to fund the capital plan means ongoing interest expense. In Q1 2025, Otter Tail Power issued $50.0 million of long-term debt, and in Q3 2025, the corporation issued another $100.0 million of long-term debt, primarily to fund capital investments and repay short-term borrowings. This debt load directly feeds the depreciation and interest expense line item.

The overall cost structure is managed by balancing the stable, regulated utility costs against the more volatile manufacturing and plastics input costs. The company's 2025 diluted EPS guidance midpoint is $5.88 (based on the initial range of $5.68 to $6.08), but this was later increased to a midpoint of $6.47 based on better-than-expected segment results, suggesting cost management or favorable pricing in the non-utility side is helping offset fixed cost pressures. Finance: draft 13-week cash view by Friday.

Otter Tail Corporation (OTTR) - Canvas Business Model: Revenue Streams

You're looking at the core ways Otter Tail Corporation (OTTR) brings in money as of late 2025. This company runs on a diversified model, anchored by a regulated utility but supplemented by manufacturing and plastics operations, which is key to understanding its revenue profile right now.

The most stable revenue comes from the Regulated electric sales revenue from tariffs and rates generated by the Electric segment, Otter Tail Power. This platform provides predictable earnings through consistent rate base growth. For instance, Otter Tail Corporation filed a request with the Minnesota Public Utilities Commission in October 2025 to increase rates by approximately $44.8 million. Also, they secured approval to recover capital investment for two solar development projects.

The Sales of PVC pipe, which fall under the Plastics segment, are currently noted as being elevated in 2025 compared to the long-term view. This segment's strong performance in the third quarter of 2025 drove an increase in overall guidance. However, this revenue stream is complex; operating revenues saw a 17% decrease in sales prices compared to the same period last year, though this was partially offset by a 4% increase in sales volumes.

Revenue from Contract revenue from metal fabrication and custom manufacturing services comes from the Manufacturing segment. This part of the business is currently navigating headwinds, with sales volumes remaining below historic levels. The company is maintaining the midpoint of its 2025 earnings guidance for this segment.

The overall financial expectation for the year is captured by the updated guidance. The 2025 diluted EPS guidance midpoint is $6.47 per share. This reflects the current revenue performance across the different business lines.

Here's a quick look at the expected earnings contribution mix for 2025, which shows how the elevated Plastics segment is temporarily shifting the revenue profile away from the long-term target:

Segment	Expected 2025 Earnings Mix (Approximate)
Electric Segment	36% to 37%
Manufacturing and Plastics Segments (Combined)	63% to 64%

You can see the utility base is still a major component, but the non-utility side is contributing more this year than the long-term target of 35% suggests.

The company is focused on using the incremental cash generated by the current Plastics segment performance to reinvest into the utility's capital investment plan.

• Regulated electric sales revenue from tariffs and rates.
• Sales of PVC pipe, currently elevated in 2025.
• Contract revenue from metal fabrication services.
• 2025 diluted EPS guidance midpoint is $6.47 per share.

Finance: draft 13-week cash view by Friday.