Exhibit 12.1
OTTER TAIL CORPORATION
CALCULATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
Year Ended December 31, | ||||||||||||||||||||
2010 | 2011 | 2012 | 2013 | 2014 | ||||||||||||||||
Earnings | ||||||||||||||||||||
Pretax income from continuing operations | $ | 29,960,244 | $ | 41,773,754 | $ | 66,313,503 | $ | 71,363,651 | $ | 73,440,180 | ||||||||||
Plus fixed charges (see below) | 39,119,620 | 38,291,760 | 34,618,369 | 30,219,768 | 32,091,737 | |||||||||||||||
Total earnings (1) | $ | 69,079,864 | $ | 80,065,514 | $ | 100,931,872 | $ | 101,583,419 | $ | 105,531,917 | ||||||||||
Fixed Charges | ||||||||||||||||||||
Interest charges | $ | 34,093,544 | $ | 34,020,348 | $ | 31,057,367 | $ | 26,820,365 | $ | 29,241,350 | ||||||||||
Amortization of debt expense, premium and discount | 2,825,076 | 2,233,412 | 1,501,002 | 1,155,403 | 1,095,387 | |||||||||||||||
Estimated interest component of operating leases | 2,201,000 | 2,038,000 | 2,060,000 | 2,244,000 | 1,755,000 | |||||||||||||||
Total fixed charges (2) | $ | 39,119,620 | $ | 38,291,760 | $ | 34,618,369 | $ | 30,219,768 | $ | 32,091,737 | ||||||||||
Preferred Dividend Requirement* | $ | 1,118,671 | * | $ | 1,138,375 | $ | 2,101,550 | $ | 650,239 | $ | - | |||||||||
Total Fixed Charges and Preferred Dividend Requirement (3) | $ | 40,238,291 | $ | 39,430,135 | $ | 36,719,919 | $ | 30,870,007 | $ | 32,091,737 | ||||||||||
Ratio of Earnings to Fixed Charges (1) Divided by (2) | 1.77 | 2.09 | 2.92 | 3.36 | 3.29 | |||||||||||||||
Ratio of Earnings to Fixed Charges and Preferred Dividends (1) Divided by (3) | 1.72 | 2.03 | 2.75 | 3.29 | 3.29 |
* 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.