Otter Tail (OTTR) investor relations material

Strategic vision and business model

• Focus on building top-performing companies with a diversified structure anchored by a regulated electric utility and robust manufacturing platforms.

• Strategic diversification enhances consolidated ROE and cash flow, with no external equity needs anticipated through at least 2030.

• Targeted total shareholder return (TSR) of 10-12% driven by balanced income and growth from both electric and manufacturing segments.

• Emphasis on operational excellence, customer value, and employee empowerment.

Electric utility operations and growth

• Electric utility serves about 134,000 customers across MN, ND, and SD, with a vertically integrated and regulated structure.

• Five-year capital spending plan of $1.9B, targeting a 10% rate base CAGR from 2025-2030.

• Long-term earnings mix target is 70% electric, with rate base growth historically converting to earnings growth at a near 1:1 ratio.

• Investments in renewable generation, storage, and transmission, including major solar and battery projects and regional transmission upgrades.

• Focus on reliability, affordability, and a 90% CO₂ reduction target by 2050.

Regulatory and customer environment

• Operates in constructive regulatory jurisdictions with favorable cost recovery mechanisms and timely investment recovery.

• Minnesota rate case seeks a $42.3M net revenue increase and a higher allowed ROE of 10.65%.

• Electric rates are 19% below regional and 34% below national averages, with customer bill CAGR expected at 3-4%.

• Load growth opportunities from data centers, clean fuel, and agriculture processing, with large load tariffs filed in all jurisdictions.