Exhibit 12.1
OTTER TAIL CORPORATION
CALCULATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
Year Ended December 31, | ||||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | ||||||||||||||||
Earnings | ||||||||||||||||||||
Pretax income from continuing operations | $ | 77,855,302 | $ | 81,928,914 | $ | 50,161,916 | $ | 21,425,878 | $ | 2,606,949 | ||||||||||
Plus fixed charges (see below) | 26,458,342 | 32,389,334 | 36,082,847 | 36,304,519 | 41,828,320 | |||||||||||||||
Total earnings (1) | $ | 104,313,644 | $ | 114,318,248 | $ | 86,244,763 | $ | 57,730,397 | $ | 44,435,269 | ||||||||||
Fixed Charges | ||||||||||||||||||||
Interest charges | $ | 18,789,945 | $ | 22,384,136 | $ | 28,094,844 | $ | 27,622,443 | $ | 34,253,607 | ||||||||||
Amortization of debt expense, premium and discount | 945,397 | 1,138,198 | 1,020,003 | 2,127,076 | 2,854,713 | |||||||||||||||
Estimated interest component of operating leases | 6,723,000 | 8,867,000 | 6,968,000 | 6,555,000 | 4,720,000 | |||||||||||||||
Total fixed charges (2) | $ | 26,458,342 | $ | 32,389,334 | $ | 36,082,847 | $ | 36,304,519 | $ | 41,828,320 | ||||||||||
Preferred Dividend Requirement* | $ | 1,043,125 | $ | 1,033,385 | $ | 981,547 | $ | 633,832 | $ | 1,118,843 | * | |||||||||
Total Fixed Charges and Preferred Dividend Requirement (3) | $ | 27,501,467 | $ | 33,422,719 | $ | 37,064,394 | $ | 36,938,351 | $ | 42,947,163 | ||||||||||
Ratio of Earnings to Fixed Charges (1) Divided by (2) | 3.94 | 3.53 | 2.39 | 1.59 | 1.06 | |||||||||||||||
Ratio of Earnings to Fixed Charges and Preferred Dividends (1) Divided by (3) | 3.79 | 3.42 | 2.33 | 1.56 | 1.03 |
* | The preferred dividend requirement represents the amount of pre-tax earnings required to cover preferred stock dividend requirements, with a tax gross-up adjustment based on the Company’s ratio of income before income taxes to net income. In 2010, because of income tax adjustments, the Company recorded a net after-tax loss while its income before income taxes was positive, resulting in a ratio of income before income taxes to net income of (194%). For 2010, a 40.0% incremental tax rate from ongoing operations was used to calculate the tax gross-up adjustment instead of the ratio of income before income taxes to net income. |
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