Exhibit 12.1
OTTER TAIL CORPORATION
CALCULATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
Year Ended December 31, | ||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | ||||||||||||||||
Earnings | ||||||||||||||||||||
Pretax income from continuing operations | $ | 71,470,896 | $ | 47,142,602 | $ | 19,341,943 | $ | (11,808,010 | ) | $ | 19,205,944 | |||||||||
Plus fixed charges (see below) | 28,025,370 | 30,785,207 | 31,761,177 | 39,435,307 | 38,767,710 | |||||||||||||||
Total earnings (1) | $ | 99,496,266 | $ | 77,927,809 | $ | 51,103,120 | $ | 27,627,297 | $ | 57,973,654 | ||||||||||
Fixed Charges | ||||||||||||||||||||
Interest charges | $ | 22,359,811 | $ | 28,094,844 | $ | 27,555,741 | $ | 34,191,232 | $ | 34,212,298 | ||||||||||
Amortization of debt expense, premium and discount | 1,108,559 | 990,363 | 2,097,436 | 2,825,076 | 2,233,412 | |||||||||||||||
Estimated interest component of operating leases | 4,557,000 | 1,700,000 | 2,108,000 | 2,419,000 | 2,322,000 | |||||||||||||||
Total fixed charges (2) | $ | 28,025,370 | $ | 30,785,207 | $ | 31,761,177 | $ | 39,435,308 | $ | 38,767,710 | ||||||||||
Preferred Dividend Requirement* | $ | 1,033,385 | $ | 981,547 | $ | 633,832 | $ | (954,325 | )* | $ | 332,627 | |||||||||
Total Fixed Charges and Preferred Dividend Requirement (3) | $ | 29,058,754 | $ | 31,766,754 | $ | 32,395,010 | $ | 38,480,982 | $ | 39,100,336 | ||||||||||
Ratio of Earnings to Fixed Charges (1) Divided by (2) | 3.55 | 2.53 | 1.61 | 0.70 | ** | 1.50 | ||||||||||||||
Ratio of Earnings to Fixed Charges and Preferred Dividends (1) Divided by (3) | 3.42 | 2.45 | 1.58 | 0.72 | 1.48 |
* | 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. |
** | To increase ratio to 1:1, Total earnings would need to increase by $11,808,010. |
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