Exhibit 12.1
OTTER TAIL CORPORATION
CALCULATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
Year Ended December 31, | ||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | ||||||||||||||||
Earnings | ||||||||||||||||||||
Pretax income from continuing operations | $ | 15,510,015 | $ | 29,510,344 | $ | 39,030,509 | $ | 54,205,367 | $ | 73,970,740 | ||||||||||
Plus fixed charges (see below) | 31,220,902 | 39,162,792 | 38,373,189 | 34,797,851 | 30,463,083 | |||||||||||||||
Total earnings (1) | $ | 46,760,918 | $ | 68,673,135 | $ | 77,403,698 | $ | 89,003,218 | $ | 104,433,823 | ||||||||||
Fixed Charges | ||||||||||||||||||||
Interest charges | $ | 27,233,466 | $ | 34,099,716 | $ | 34,022,777 | $ | 31,059,849 | $ | 26,824,680 | ||||||||||
Amortization of debt expense, premium and discount | 2,097,436 | 2,825,076 | 2,233,412 | 1,501,002 | 1,155,403 | |||||||||||||||
Estimated interest component of operating leases | 1,890,000 | 2,238,000 | 2,117,000 | 2,237,000 | 2,483,000 | |||||||||||||||
Total fixed charges (2) | $ | 31,220,902 | $ | 39,162,792 | $ | 38,373,189 | $ | 34,797,851 | $ | 30,463,083 | ||||||||||
Preferred Dividend Requirement* | $ | 633,832 | $ | 1,118,671 | * | $ | 1,138,375 | $ | 2,101,550 | $ | 650,239 | |||||||||
Total Fixed Charges and Preferred Dividend Requirement (3) | $ | 31,854,735 | $ | 40,281,462 | $ | 39,511,564 | $ | 36,899,401 | $ | 31,113,322 | ||||||||||
Ratio of Earnings to Fixed Charges (1) Divided by (2) | 1.50 | 1.75 | 2.02 | 2.56 | 3.43 | |||||||||||||||
Ratio of Earnings to Fixed Charges and Preferred Dividends (1) Divided by (3) | 1.47 | 1.70 | 1.96 | 2.41 | 3.36 |
* | 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. |
All outstanding cumulative preferred shares were redeemed on March 1, 2013 for $15.7 million, including $0.2 million in call premiums charged to equity and included as preferred dividends paid and as part of our preferred dividend requirement for the year ended December 31, 2013.
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