Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Otter Tail Corp | |
Entity Central Index Key | 1,466,593 | |
Trading Symbol | ottr | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock Shares Outstanding | 38,116,348 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets (no
Consolidated Balance Sheets (not audited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and Cash Equivalents | ||
Accounts Receivable: | ||
Trade - Net | $ 73,521 | $ 62,974 |
Other | 7,104 | 9,073 |
Inventories | 85,410 | 85,416 |
Unbilled Revenues | 16,476 | 17,869 |
Income Taxes Receivable | 4,000 | |
Regulatory Assets | 18,636 | 18,904 |
Other | 8,746 | 8,453 |
Total Current Assets | 209,893 | 206,689 |
Investments | 8,411 | 8,284 |
Other Assets | 33,014 | 32,784 |
Goodwill | 39,732 | 39,732 |
Other Intangibles - Net | 15,266 | 15,673 |
Regulatory Assets | 124,933 | 127,707 |
Plant | ||
Electric Plant in Service | 1,824,137 | 1,820,763 |
Nonelectric Operations | 207,757 | 201,343 |
Construction Work in Progress | 98,995 | 79,612 |
Total Gross Plant | 2,130,889 | 2,101,718 |
Less Accumulated Depreciation and Amortization | 728,781 | 713,904 |
Net Plant | 1,402,108 | 1,387,814 |
Total Assets | 1,833,357 | 1,818,683 |
Current Liabilities | ||
Short-Term Debt | 42,936 | 80,672 |
Current Maturities of Long-Term Debt | 52,457 | 52,422 |
Accounts Payable | 89,826 | 89,499 |
Accrued Salaries and Wages | 13,192 | 16,182 |
Accrued Taxes | 15,985 | 14,827 |
Other Accrued Liabilities | 16,401 | 15,416 |
Liabilities of Discontinued Operations | 2,098 | 2,098 |
Total Current Liabilities | 232,895 | 271,116 |
Pensions Benefit Liability | 95,122 | 104,912 |
Other Postretirement Benefits Liability | 48,923 | 48,730 |
Other Noncurrent Liabilities | $ 23,181 | $ 23,854 |
Commitments and Contingencies (note 9) | ||
Deferred Credits | ||
Deferred Income Taxes | $ 213,049 | $ 207,669 |
Deferred Tax Credits | 24,092 | 24,506 |
Regulatory Liabilities | 78,007 | 77,432 |
Other | 10,567 | 11,595 |
Total Deferred Credits | 325,715 | 321,202 |
Capitalization | ||
Long-Term Debt-Net | 493,801 | 443,846 |
Common Shares, Par Value $5 Per Share-Authorized, 50,000,000 Shares; Outstanding, 2016-38,071,418 Shares; 2015-37,857,186 Shares | 190,357 | 189,286 |
Premium on Common Shares | 298,465 | 293,610 |
Retained Earnings | 128,656 | 126,025 |
Accumulated Other Comprehensive Loss | (3,758) | (3,898) |
Total Common Equity | 613,720 | 605,023 |
Total Capitalization | 1,107,521 | 1,048,869 |
Total Liabilities and Equity | $ 1,833,357 | $ 1,818,683 |
Cumulative Preferred Shares | ||
Capitalization | ||
Cumulative Shares | ||
Cumulative Preference Shares | ||
Capitalization | ||
Cumulative Shares |
Consolidated Balance Sheets (n3
Consolidated Balance Sheets (not audited) (Parentheticals) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Common shares, par value (in dollars per share) | $ 5 | $ 5 |
Common shares, authorized | 50,000,000 | 50,000,000 |
Common shares, outstanding | 38,071,418 | 37,857,186 |
Cumulative Preferred Shares | ||
Cumulative shares, authorized | 1,500,000 | 1,500,000 |
Cumulative shares, without par value (in dollars per share) | ||
Cumulative shares, outstanding | 0 | 0 |
Cumulative Preference Shares | ||
Cumulative shares, authorized | 1,000,000 | 1,000,000 |
Cumulative shares, without par value (in dollars per share) | ||
Cumulative shares, outstanding | 0 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income (not audited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating Revenues | ||
Electric | $ 112,985 | $ 113,533 |
Product Sales | 93,257 | 89,308 |
Total Operating Revenues | 206,242 | 202,841 |
Operating Expenses | ||
Production Fuel - Electric | 15,700 | 14,599 |
Purchased Power - Electric | 16,886 | 23,692 |
Electric Operation and Maintenance Expenses | 40,018 | 37,527 |
Cost of Products Sold (depreciation included below) | 72,639 | 71,498 |
Other Nonelectric Expenses | 11,455 | 12,463 |
Depreciation and Amortization | 18,289 | 14,535 |
Property Taxes - Electric | 3,679 | 3,502 |
Total Operating Expenses | 178,666 | 177,816 |
Operating Income | 27,576 | 25,025 |
Interest Charges | 7,994 | 7,743 |
Other Income | 400 | 572 |
Income Before Income Taxes - Continuing Operations | 19,982 | 17,854 |
Income Tax Expense - Continuing Operations | 5,492 | 4,073 |
Net Income from Continuing Operations | 14,490 | 13,781 |
Discontinued Operations | ||
Income (Loss) - net of Income Tax Expense (Benefit) of $20 and ($1,376) for the respective periods | $ 30 | (2,072) |
Impairment Loss - net of Income Tax Benefit of $0 for the three months ended March 31, 2015 | (1,000) | |
Gain on Disposition - net of Income Tax Expense of $4,816 for the three months ended March 31, 2015 | 7,226 | |
Net Income from Discontinued Operations | $ 30 | 4,154 |
Net Income | $ 14,520 | $ 17,935 |
Average Number of Common Shares Outstanding-Basic | 37,936,943 | 37,243,118 |
Average Number of Common Shares Outstanding-Diluted | 38,045,208 | 37,497,881 |
Basic Earnings Per Common Share: | ||
Continuing Operations (in dollars per share) | $ 0.38 | $ 0.37 |
Discontinued Operations (in dollars per share) | 0.11 | |
Earnings Per Share, Basic, Total (in dollars per share) | $ 0.38 | 0.48 |
Diluted Earnings Per Common Share: | ||
Continuing Operations (in dollars per share) | $ 0.38 | 0.37 |
Discontinued Operations (in dollars per share) | 0.11 | |
Earnings Per Share, Diluted, Total (in dollars per share) | $ 0.38 | 0.48 |
Dividends Declared Per Common Share (in dollars per share) | $ 0.3125 | $ 0.3075 |
Consolidated Statements of Inc5
Consolidated Statements of Income (not audited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Income tax expense (benefit) on income (loss) from discontinued operation | $ 20 | $ (1,376) |
Income tax (benefit) expense on impairment | 0 | |
Income tax (benefit) expense on gain (loss) from disposition | $ 4,816 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (not audited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement Of Income and Comprehensive Income [Abstract] | ||
Net Income | $ 14,520 | $ 17,935 |
Unrealized Gains on Available-for-Sale Securities: | ||
Reversal of Previously Recognized Gains Realized on Sale of Investments and Included in Other Income During Period | (3) | |
Gains Arising During Period | 73 | 32 |
Income Tax Expense | (26) | (10) |
Change in Unrealized Gains on Available-for-Sale Securities - net-of-tax | 47 | 19 |
Pension and Postretirement Benefit Plans: | ||
Amortization of Unrecognized Postretirement Benefit Losses and Costs (note 11) | 154 | 204 |
Income Tax Expense | (61) | (82) |
Pension and Postretirement Benefit Plans - net-of-tax | 93 | 122 |
Total Other Comprehensive Income | 140 | 141 |
Total Comprehensive Income | $ 14,660 | $ 18,076 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (not audited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash Flows from Operating Activities | ||
Net Income | $ 14,520 | $ 17,935 |
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities: | ||
Net Gain from Sale of Discontinued Operations | (7,226) | |
Net (Income) Loss from Discontinued Operations | (30) | 3,072 |
Depreciation and Amortization | 18,289 | 14,535 |
Deferred Tax Credits | (414) | (470) |
Deferred Income Taxes | 5,330 | 7,038 |
Change in Deferred Debits and Other Assets | 2,825 | 3,538 |
Discretionary Contribution to Pension Plan | (10,000) | (10,000) |
Change in Noncurrent Liabilities and Deferred Credits | 3,363 | 41 |
Allowance for Equity/Other Funds Used During Construction | (95) | (256) |
Change in Derivatives Net of Regulatory Deferral | (59) | |
Stock Compensation Expense-Equity Awards | 489 | 623 |
Other - Net | 15 | 206 |
Cash (Used for) Provided by Current Assets and Current Liabilities: | ||
Change in Receivables | (7,478) | (11,288) |
Change in Inventories | 6 | 688 |
Change in Other Current Assets | (773) | 1,270 |
Change in Payables and Other Current Liabilities | (5,840) | (20,185) |
Change in Interest and Income Taxes Receivable/Payable | 2,400 | (1,549) |
Net Cash Provided by (Used in) Continuing Operations | 22,607 | (2,087) |
Net Cash Provided by (Used in) Discontinued Operations | 30 | (6,263) |
Net Cash Provided by (Used in) Operating Activities | 22,637 | (8,350) |
Cash Flows from Investing Activities | ||
Capital Expenditures | (24,855) | (35,738) |
Net Proceeds from Disposal of Noncurrent Assets | 682 | 1,292 |
Cash Used for Investments and Other Assets | (1,425) | (3,492) |
Net Cash Used in Investing Activities - Continuing Operations | $ (25,598) | (37,938) |
Net Proceeds from Sale of Discontinued Operations | 21,343 | |
Net Cash Used in Investing Activities - Discontinued Operations | (1,759) | |
Net Cash Used in Investing Activities | $ (25,598) | (18,354) |
Cash Flows from Financing Activities | ||
Change in Checks Written in Excess of Cash | (666) | (1,236) |
Net Short-Term (Repayments) Borrowings | (37,736) | 37,798 |
Proceeds from Issuance of Common Stock - net of Issuance Expenses | 3,415 | 4,697 |
Payments for Retirement of Capital Stock | (53) | (1,239) |
Proceeds from Issuance of Long-Term Debt | 50,000 | |
Short-Term and Long-Term Debt Issuance Expenses | (58) | (4) |
Payments for Retirement of Long-Term Debt | (52) | (49) |
Dividends Paid and Other Distributions | (11,889) | (11,498) |
Net Cash Provided by Financing Activities - Continuing Operations | $ 2,961 | 28,469 |
Net Cash Used in Financing Activities - Discontinued Operations | (1,178) | |
Net Cash Provided by Financing Activities | $ 2,961 | 27,291 |
Net Change in Cash and Cash Equivalents - Discontinued Operations | (430) | |
Net Change in Cash and Cash Equivalents | $ 157 | |
Cash and Cash Equivalents at Beginning of Period | ||
Cash and Cash Equivalents at End of Period | $ 157 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Revenue Recognition Due to the diverse business operations of the Company, revenue recognition depends on the product produced and sold or service performed. The Company recognizes revenue when the earnings process is complete, evidenced by an agreement with the customer, there has been delivery and acceptance, the price is fixed or determinable and collectability is reasonably assured. In cases where significant obligations remain after delivery, revenue recognition is deferred until such obligations are fulfilled. Provisions for sales returns and warranty costs are recorded at the time of the sale based on historical information and current trends. In the case of derivative instruments, such as Otter Tail Power Company (OTP) 2015 forward energy contracts, marked-to-market and realized gains and losses are recognized on a net basis in revenue in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 815, Derivatives and Hedging For the Company’s operating companies recognizing revenue on certain products when shipped, those operating companies have no further obligation to provide services related to such product. The shipping terms used in these instances are FOB shipping point. Warranty Reserves Certain products previously sold by the Company carried one to fifteen year warranties. Although the Company engaged in extensive product quality programs and processes, the Company’s warranty obligations have been and may in the future be affected by product failure rates, repair or field replacement costs and additional development costs incurred in correcting product failures. The warranty reserve balances as of March 31, 2016 and December 31, 2015 relate entirely to products that were produced by entities the Company no longer owns prior to the Company selling the assets of those companies. The warranty reserve balance is included in liabilities of discontinued operations. See note 16 to consolidated financial statements. Fair Value Measurements The Company follows ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820), for recurring fair value measurements. ASC 820 provides a single definition of fair value, requires enhanced disclosures about assets and liabilities measured at fair value and establishes a hierarchal framework for disclosing the observability of the inputs utilized in measuring assets and liabilities at fair value. The three levels defined by the hierarchy and examples of each level are as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed by the New York Stock Exchange and commodity derivative contracts listed on the New York Mercantile Exchange (NYMEX). Level 2 – Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities included in Level 2 are typically either comparable to actively traded securities or contracts, such as treasury securities with pricing interpolated from recent trades of similar securities, or priced with models using highly observable inputs, such as commodity options priced using observable forward prices and volatilities. Level 3 – Significant inputs to pricing have little or no observability as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation and may include complex and subjective models and forecasts. The following tables present, for each of the hierarchy levels, the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015: March 31, 2016 (in thousands) Level 1 Level 2 Level 3 Assets: Current Assets – Other: Money Market Escrow Accounts – AEV, Inc. and Foley Company Dispositions $ 2,000 Investments: Government-Backed and Government-Sponsored Enterprises’ Debt Securities $ 4,315 Corporate Debt Securities – Held by Captive Insurance Company 3,903 Other Assets: Money Market and Mutual Funds – Nonqualified Retirement Savings Plan 293 Total Assets $ 2,293 $ 8,218 Liabilities: Other Accrued Liabilities: Derivative Liabilities – Forward Gasoline Purchase Contracts $ 107 Total Liabilities $ 107 December 31, 2015 (in thousands) Level 1 Level 2 Level 3 Assets: Current Assets – Other: Money Market Escrow Accounts – AEV, Inc. and Foley Company Dispositions $ 2,000 Investments: Government-Backed and Government-Sponsored Enterprises’ Debt Securities $ 4,235 Corporate Debt Securities – Held by Captive Insurance Company 3,858 Other Assets: Money Market and Mutual Funds – Nonqualified Retirement Savings Plan 196 Total Assets $ 2,196 $ 8,093 Liabilities: Other Accrued Liabilities: Derivative Liabilities – Forward Gasoline Purchase Contracts $ 199 Total Liabilities $ 199 The valuation techniques and inputs used for the Level 2 fair value measurements in the table above are as follows: Forward Gasoline Purchase Contracts Government-Backed and Government-Sponsored Enterprises’ and Corporate Debt Securities Held by the Company’s Captive Insurance Company Inventories Inventories consist of the following: March 31, December 31, (in thousands) 2016 2015 Finished Goods $ 26,440 $ 25,971 Work in Process 12,110 12,821 Raw Material, Fuel and Supplies 46,860 46,624 Total Inventories $ 85,410 $ 85,416 Goodwill and Other Intangible Assets On September 1, 2015 Miller Welding & Iron Works, Inc. (BTD-Illinois), a wholly owned subsidiary of BTD Manufacturing, Inc. (BTD), acquired the assets of Impulse Manufacturing, Inc. (Impulse) of Dawsonville, Georgia. The newly acquired business operates under the name BTD-Georgia. Based on the preliminary purchase price allocation, the difference in the fair value of assets acquired and the price paid for Impulse resulted in an initial estimate of acquired goodwill of $8,244,000. An assessment of the carrying amounts of the remaining goodwill of the Company’s reporting units reported under continuing operations as of December 31, 2015 indicated the fair values are substantially in excess of their respective book values and not impaired. The following table summarizes changes to goodwill by business segment during 2016: (in thousands) Gross Balance Accumulated Balance (net of Adjustments Balance (net of Manufacturing $ 20,430 $ — $ 20,430 $ — $ 20,430 Plastics 19,302 — 19,302 — 19,302 Total $ 39,732 $ — $ 39,732 $ — $ 39,732 Intangible assets with finite lives are amortized over their estimated useful lives and reviewed for impairment in accordance with requirements under ASC Topic 360-10-35, Property, Plant, and Equipment—Overall—Subsequent Measurement The following table summarizes the components of the Company’s intangible assets at March 31, 2016 and December 31, 2015: March 31, 2016 (in thousands) Gross Carrying Accumulated Net Carrying Remaining Amortizable Intangible Assets: Customer Relationships $ 21,681 $ 6,987 $ 14,694 45-233 months Covenant not to Compete 620 121 499 29 months Other Intangible Assets 639 575 64 6 months Emission Allowances 9 NA 9 Expensed as used Total $ 22,949 $ 7,683 $ 15,266 December 31, 2015 (in thousands) Amortizable Intangible Assets: Customer Relationships $ 21,681 $ 6,714 $ 14,967 48-236 months Covenant not to Compete 620 69 551 32 months Other Intangible Assets 639 543 96 9 months Emission Allowances 59 NA 59 Expensed as used Total $ 22,999 $ 7,326 $ 15,673 The amortization expense for these intangible assets was: Three Months Ended March 31, (in thousands) 2016 2015 Amortization Expense – Intangible Assets $ 357 $ 244 The estimated annual amortization expense for these intangible assets for the next five years is: (in thousands) 2016 2017 2018 2019 2020 Estimated Amortization Expense – Intangible Assets $ 1,395 $ 1,299 $ 1,230 $ 1,093 $ 1,059 Supplemental Disclosures of Cash Flow Information As of March 31, (in thousands) 2016 2015 Noncash Investing Activities: Transactions Related to Capital Additions not Settled in Cash $ 24,618 $ 25,284 Coyote Station Lignite Supply Agreement – Variable Interest Entity Under the LSA, all development period costs of the Coyote Creek coal mine incurred during the development period will be recovered from the Coyote Station owners over the full term of the production period, which commences with the initial delivery of coal to Coyote Station (anticipated in May 2016), by being included in the cost of production. The development fee and the capital charge incurred during the development period will be recovered from the Coyote Station owners over the first 52 months of the production period by being included in the cost of production during those months. The LSA was amended on March 16, 2015 to provide, among other things, that during any period between December 31, 2016 and any subsequent date on which CCMC makes initial delivery of coal, the Coyote Station owners will pay the following costs of production as advance payments for lignite: depreciation and amortization charges on capital assets and CCMC’s obligations under its loans and leases. In addition, if the LSA terminates prior to the expiration of its term or the production period terminates prior to December 31, 2040 and the Coyote Station owners purchase all of the outstanding membership interests of CCMC as required by the LSA, the owners will satisfy, or (if permitted by CCMC’s applicable lender) assume, all of CCMC’s obligations owed to CCMC’s lenders under its loans and leases. The Coyote Station owners have limited rights to assign their rights and obligations under the LSA without the consent of CCMC’s lenders during any period in which CCMC’s obligations to its lenders remain outstanding. OTP’s 35% share of development period costs, development fees and capital charges incurred by CCMC through March 31, 2016 is $60.3 million. In the event the contract is terminated because regulations or legislation render the burning of coal cost prohibitive and the assets worthless, OTP’s maximum exposure to loss as a result of its involvement with CCMC as of March 31, 2016 could be as high as $60.3 million. New Accounting Standards ASU 2014-09 Revenue from Contracts with Customers (Topic 606) (ASC 606) Amendments to the ASC in ASU 2014-09, as amended, are effective for fiscal years beginning after December 15, 2017. Early adoption is permitted, but not any earlier than January 1, 2017. Application methods permitted are: (1) full retrospective, (2) retrospective using one or more practical expedients and (3) retrospective with the cumulative effect of initial application recognized at the date of initial application. The Company is currently reviewing ASU 2014-09, identifying key impacts to its businesses, reviewing revenue streams and contracts to determine areas where the amendments in ASU 2014-09 will be applicable and evaluating transition options. The Company does not plan to adopt the updated guidance prior to January 1, 2018. ASU 2015-03 Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for interim and annual reporting periods beginning after December 15, 2015 and must be applied retrospectively to balance sheets presented for periods prior to adoption. The Company adopted the updated standards in ASU 2015-03 in the first quarter of 2016. In conjunction with implementing this update, the Company is reclassifying the remaining balance of unamortized line of credit issuance costs from the deferred debit section of its consolidated balance sheet to other assets, eliminating the deferred debits section of its consolidated balance sheet and displaying long-term regulatory assets as a separate line item on its consolidated balance sheet. The effects of applying the guidance in ASU 2015-03 retrospectively to the Company’s December 31, 2015 consolidated balance sheet and of the associated reclassification of unamortized line of credit issuance costs are shown in the following table: (in thousands) Previously Adjustments Restated Other Assets $ 31,108 $ 1,676 $ 32,784 Unamortized Debt Expense 3,897 (3,897 ) — Total Assets 1,820,904 (2,221 ) 1,818,683 Current Liabilities Current Maturities of Long-Term Debt 52,544 (122 ) 52,422 Total Current Liabilities 271,238 (122 ) 271,116 Capitalization Long-Term Debt—Net 445,945 (2,099 ) 443,846 Total Capitalization 1,050,968 (2,099 ) 1,048,869 Total Liabilities and Equity 1,820,904 (2,221 ) 1,818,683 ASU 2015-11 Inventory (Topic 330): Simplifying the Measurement of Inventory, ASU 2016-02 Leases (Topic 842) ASU 2016-09 Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , |
Business Combinations and Segme
Business Combinations and Segment Information | 3 Months Ended |
Mar. 31, 2016 | |
Acquisition And Segment Information [Abstract] | |
Business Combinations and Segment Information | 2. Business Combinations and Segment Information Business Combinations On September 1, 2015 BTD-Illinois, a wholly owned subsidiary of BTD, acquired the assets of Impulse of Dawsonville, Georgia for $30.8 million in cash, subject to a post-closing adjustment. Impulse is a full-service metal fabricator located 30 miles north of Atlanta, Georgia. The newly acquired business offers a wide range of metal fabrication services ranging from simple laser cutting services and high volume stamping to complex weldments and assemblies for metal fabrication buyers and original equipment manufacturers and is operating under the name BTD-Georgia. In addition to serving some of BTD’s existing customers from a location closer to the customers’ manufacturing facilities, this acquisition will provide opportunities for growth in new and existing markets for BTD, and complementing production capabilities will expand the capacity of services offered by BTD. Pro forma results of operations have not been presented for this acquisition because the effect of the acquisition was not material to the Company. Below is condensed balance sheet information, at the date of the business combination, disclosing the preliminary allocation of the purchase price assigned to each major asset and liability category of BTD-Georgia: (in thousands) Assets: Current Assets $ 4,906 Goodwill 8,244 Other Intangible Assets 5,490 Other Amortizable Assets 1,380 Fixed Assets 13,649 Total Assets $ 33,669 Liabilities: Current Liabilities $ 2,852 Lease Obligation 11 Total Liabilities $ 2,863 Cash Paid $ 30,806 The assignment of asset values is subject to adjustment based on determination of the final purchase price. In the fourth quarter of 2015, the Company elected to early adopt ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, Segment Information The Company's businesses have been classified into three segments to be consistent with its business strategy and the reporting and review process used by the Company’s chief operating decision makers. Electric includes the production, transmission, distribution and sale of electric energy in Minnesota, North Dakota and South Dakota by OTP. In addition, OTP is a participant in the Midcontinent Independent System Operator, Inc. (MISO) markets. OTP’s operations have been the Company’s primary business since 1907. Manufacturing consists of businesses in the following manufacturing activities: contract machining, metal parts stamping, fabrication and painting, and production of material and handling trays and horticultural containers. These businesses have manufacturing facilities in Georgia, Illinois and Minnesota and sell products primarily in the United States. Plastics consists of businesses producing polyvinyl chloride (PVC) pipe at plants in North Dakota and Arizona. The PVC pipe is sold primarily in the upper Midwest and Southwest regions of the United States. OTP is a wholly owned subsidiary of the Company. All of the Company’s other businesses are owned by its wholly owned subsidiary, Varistar Corporation (Varistar). The Company’s corporate operating costs include items such as corporate staff and overhead costs, the results of the Company’s captive insurance company and other items excluded from the measurement of operating segment performance. Corporate assets consist primarily of cash, prepaid expenses, investments and fixed assets. Corporate is not an operating segment. Rather, it is added to operating segment totals to reconcile to totals on the Company’s consolidated financial statements. No single customer accounted for over 10% of the Company’s consolidated revenues in 2015. All of the Company’s long-lived assets are within the United States and 97.6% and 96.3% of its operating revenues for the respective three month periods ended March 31, 2016 and 2015 came from sales within the United States. The Company evaluates the performance of its business segments and allocates resources to them based on earnings contribution and return on total invested capital. Information for the business segments for the three months ended March 31, 2016 and 2015 and total assets by business segment as of March 31, 2016 and December 31, 2015 are presented in the following tables: Operating Revenue Three Months Ended March 31, (in thousands) 2016 2015 Electric $ 112,994 $ 113,547 Manufacturing 59,820 56,759 Plastics 33,437 32,552 Intersegment Eliminations (9 ) (17 ) Total $ 206,242 $ 202,841 Interest Charges Three Months Ended March 31, (in thousands) 2016 2015 Electric $ 6,284 $ 6,121 Manufacturing 992 832 Plastics 244 246 Corporate and Intersegment Eliminations 474 544 Total $ 7,994 $ 7,743 Income Taxes Three Months Ended March 31, (in thousands) 2016 2015 Electric $ 4,612 $ 4,221 Manufacturing 1,019 504 Plastics 1,367 1,264 Corporate (1,506 ) (1,916 ) Total $ 5,492 $ 4,073 Net Income (Loss) Three Months Ended March 31, (in thousands) 2016 2015 Electric $ 12,538 $ 13,178 Manufacturing 1,853 1,184 Plastics 2,152 2,120 Corporate (2,053 ) (2,701 ) Discontinued Operations 30 4,154 Total $ 14,520 $ 17,935 Identifiable Assets March 31, December 31, (in thousands) 2016 2015 Electric $ 1,528,157 $ 1,520,887 Manufacturing 179,745 173,860 Plastics 87,077 81,624 Corporate 38,378 42,312 Total $ 1,833,357 $ 1,818,683 |
Rate and Regulatory Matters
Rate and Regulatory Matters | 3 Months Ended |
Mar. 31, 2016 | |
Rate and Regulatory Matters [Abstract] | |
Rate and Regulatory Matters | 3. Rate and Regulatory Matters Below are descriptions of OTP’s major capital expenditure projects that have had, or will have, a significant impact on OTP’s revenue requirements, rates and alternative revenue recovery mechanisms, followed by summaries of specific electric rate or rider proceedings with the Minnesota Public Utilities Commission (MPUC), the North Dakota Public Service Commission (NDPSC), the South Dakota Public Utilities Commission (SDPUC) and the Federal Energy Regulatory Commission (FERC), impacting OTP’s revenues in 2016 and 2015. Major Capital Expenditure Projects Big Stone Plant Air Quality Control System (AQCS) Fargo–Monticello 345 kiloVolt ( kV Capacity Expansion 2020 (CapX2020) Project (the Fargo Project) Brookings–Southeast Twin Cities 345 kV CapX2020 MISO Open Access Transmission, Energy and Operating Reserve Markets Tariff ( MVPs are designed to enable the region to comply with energy policy mandates and to address reliability and economic issues affecting multiple areas within the MISO region. The cost allocation is designed to ensure the costs of transmission projects with regional benefits are properly assigned to those who benefit. The Big Stone South–Brookings MVP and CapX2020 MVP MISO Tariff OTP’s capitalized costs on this project as of March 31, 2016 were approximately $29.6 million, which includes assets that are 100% owned by OTP. The Big Stone South–Ellendale MVP OTP’s capitalized costs on this project as of March 31, 2016 were approximately $20.0 million, which includes assets that are 100% owned by OTP. Recovery of OTP’s major transmission investments is through the MISO Tariff (several as MVPs) and, currently, Minnesota, North Dakota and South Dakota Transmission Cost Recovery (TCR) Riders. Minnesota 2016 General Rate Case 2010 General Rate Case Minnesota Conservation Improvement Programs (MNCIP) On July 9, 2015 the MPUC granted approval of OTP’s 2014 financial incentive of $3.0 million along with an updated surcharge with an effective date of October 1, 2015. Based on results from the 2015 MNCIP program year, OTP recognized a financial incentive of $4.2 million in 2015. The 2015 MNCIP program resulted in approximately a 39% increase in energy savings compared to 2014 program results. The MNDOC has proposed changes to the MNCIP financial incentive mechanism. OTP’s position is that minimal changes to the MNCIP financial incentive are required as the incentive will naturally be reduced by lower energy savings potential and lower avoided costs. A hearing date for a decision on this docket has not been set by the MPUC. The MNDOC opened an additional docket to investigate how investor-owned utilities calculate their avoided costs pertaining to generation capacity, energy, transmission and distribution. OTP has responded to information requests and submitted comments and reply comments within this docket. Transmission Cost Recovery Rider — The Minnesota Public Utilities Act provides a mechanism for automatic adjustment outside of a general rate proceeding to recover the costs, plus a return on investment at the level approved in a utility’s last general rate case, of new transmission facilities that meet certain criteria. On February 18, 2015 the MPUC approved OTP’s 2014 TCR rider annual update with an effective date of March 1, 2015. OTP filed an annual update to its Minnesota TCR rider on September 30, 2015 requesting revenue recovery of approximately $7.8 million. A supplemental filing to the update was made on December 21, 2015 to address an issue surrounding the proration of accumulated deferred income taxes and, in an unrelated adjustment, the TCR rider update revenue request was reduced to $7.2 million. On March 9, 2016 the MPUC issued an order approving OTP’s annual update to its TCR rider, with an effective date of April 1, 2016. OTP will be filing an update to its TCR rider on or before May 1, 2016 to incorporate the impact of bonus depreciation for income taxes, an adjusted rate of return on rate base and allocation factors to align with its 2016 general rate case request. Environmental Cost Recovery Rider —On December 18, 2013 the MPUC granted approval of OTP’s Minnesota ECR rider for recovery of OTP’s Minnesota jurisdictional share of the revenue requirements of its investment in the Big Stone Plant AQCS effective January 1, 2014. The ECR rider recoverable revenue requirements include a current return on the project’s construction work in progress (CWIP) balance at the level approved in OTP’s most recent general rate case. The MPUC approved OTP’s 2014 ECR rider annual update request on November 24, 2014 with an effective date of December 1, 2014. OTP filed its 2015 annual update on July 31, 2015, with a request to keep the 2014 annual update rate in place. On December 21, 2015 OTP filed a supplemental filing with updated financial information. The MPUC issued an order on March 9, 2016 approving OTP’s request to leave the 2014 annual update rate in place. On April 29, 2016 OTP filed an update to its ECR rider to incorporate the impact of bonus depreciation for income taxes, an adjusted rate of return on rate base and allocation factors to align with its 2016 general rate case filing. North Dakota General Rates Pursuant to the order, OTP’s allowed rate of return on rate base was set at 8.62%, and its allowed rate of return on equity was set at 10.75%. Renewable Resource Adjustment On March 25, 2015 the NDPSC approved OTP’s 2014 annual update to the NDRRA rider, including a change in rate design from an amount per kwh consumed to a percentage of a customer’s bill, with an effective date of April 1, 2015. OTP submitted its 2015 annual update to the NDRRA rider rate on December 31, 2015 with a requested implementation date of April 1, 2016. On February 25, 2016 OTP made a supplemental filing to address the impact of bonus depreciation for income taxes and related deferred tax assets on the NDRRA, as well as an adjustment to the estimated amount of PTC used. The NDPSC held a hearing on this matter on April 27, 2016. The Commission is expected to rule on the requested update before the end of the second quarter of 2016. Transmission Cost Recovery Rider The NDPSC approved OTP’s 2014 annual update to its TCR rider rate on December 17, 2014 with an effective date of January 1, 2015. On August 31, 2015 OTP filed its 2015 annual update to its North Dakota TCR rider rate requesting recovery of approximately $10.2 million for 2016 compared with $8.5 million for 2015, including costs assessed by the MISO as well as new costs from the Southwest Power Pool (SPP) that OTP began incurring January 1, 2016. These new costs are associated with OTP’s load connected to the transmission system of Central Power Electric Cooperative (CPEC) that will become subject to SPP transmission-related charges when CPEC transmission assets are added to the SPP. The NDPSC approved OTP’s 2015 annual update to its TCR rider rate on December 16, 2015, with an effective date of January 1, 2016. Environmental Cost Recovery Rider — On February 8, 2013 OTP filed a request with the NDPSC for an ECR rider to recover OTP’s North Dakota jurisdictional share of the revenue requirements associated with its investment in the Big Stone Plant AQCS. On December 18, 2013 the NDPSC approved OTP’s North Dakota ECR rider based on revenue requirements through the 2013 calendar year and thereafter, with rates effective for bills rendered on or after January 1, 2014. The ECR provides for a current return on CWIP and a return on investment at the level approved in OTP’s most recent general rate case. The NDPSC approved OTP’s 2014 ECR rider annual update request on July 10, 2014 with an August 1, 2014 implementation date. On March 31, 2015 OTP filed its annual update to the ECR. This update included a request to increase the ECR rider rate from 7.531% to 9.193% of base rates. The NDPSC approved the annual update on June 17, 2015 with an effective date of July 1, 2015, along with the approval of recovery of OTP’s North Dakota jurisdictional share of Hoot Lake Plant Mercury and Air Toxics Standards (MATS) project costs. On March 31, 2016 OTP filed its annual update to the ECR rider requesting a reduction in the rate from 9.193% to 7.904% of base rates, or a revenue requirement reduction from $12.2 million to $10.4 million, effective July 1, 2016. The rate reduction request is primarily due to the Company’s 2015 bonus depreciation election for income taxes, which reduces revenue requirements. Reagent Costs and Emission Allowances South Dakota 2010 General Rate Case Transmission Cost Recovery Rider On February 12, 2016, the SDPUC approved OTP’s annual update to its TCR rider, with an effective date of March 1, 2016. This update included the recovery of new SPP transmission costs OTP began to incur on January 1, 2016. Environmental Cost Recovery Rider —On November 25, 2014 the SDPUC approved OTP’s ECR rider request to recover OTP’s South Dakota jurisdictional share of revenue requirements associated with its investment in the Big Stone Plant AQCS and Hoot Lake Plant MATS projects, with an effective date of December 1, 2014. On August 31, 2015 OTP filed its annual update to the South Dakota ECR requesting recovery of approximately $2.7 million in annual revenue. The SDPUC approved the request on October 15, 2015 with an effective date of November 1, 2015. Reagent Costs and Emission Allowances Revenues Recorded under Rate Riders The following table presents revenue recorded by OTP under rate riders in place in Minnesota, North Dakota and South Dakota for the three month periods ended March 31: Rate Rider (in thousands) 2016 2015 Minnesota Conservation Improvement Program Costs and Incentives 1 $ 2,506 $ 1,928 Transmission Cost Recovery 2,276 1,615 Environmental Cost Recovery 3,082 2,557 North Dakota Renewable Resource Adjustment 2,059 1,883 Transmission Cost Recovery 2,236 1,936 Environmental Cost Recovery 2,811 2,156 South Dakota Transmission Cost Recovery 651 363 Environmental Cost Recovery 633 504 Conservation Improvement Program Costs and Incentives 159 140 1 FERC Multi-Value Transmission Projects On December 16, 2010 the FERC approved the cost allocation for a new classification of projects in the MISO region called MVPs. Effective January 1, 2012 the FERC authorized OTP to recover 100% of prudently incurred CWIP and Abandoned Plant Recovery on two projects approved by MISO as MVPs in MISO’s 2011 Transmission Expansion Plan: the Big Stone South–Brookings MVP and the Big Stone South–Ellendale MVP. On November 12, 2013 a group of industrial customers and other stakeholders filed a complaint with the FERC seeking to reduce the return on equity (ROE) component of the transmission rates that MISO transmission owners, including OTP, may collect under the MISO Tariff. The complainants are seeking to reduce the current 12.38% ROE used in MISO’s transmission rates to a proposed 9.15%. On October 16, 2014 the FERC issued an order finding that the current MISO ROE may be unjust and unreasonable and setting the issue for hearing. An initial decision by the presiding administrative law judge (ALJ) was issued on December 22, 2015 finding that the MISO transmission owners’ ROE should be 10.32%. The FERC is expected to issue its order later in 2016. On November 6, 2014 a group of MISO transmission owners, including OTP, filed for a FERC incentive of an additional 50-basis points for Regional Transmission Organization participation (RTO Adder). On January 5, 2015 the FERC granted the request, deferring collection of the RTO Adder until the FERC issues its order in the ROE complaint proceeding. On February 12, 2015 another group of stakeholders filed a complaint with the FERC seeking to reduce the ROE component of the transmission rates that MISO transmission owners, including OTP, may collect under the MISO Tariff from the current 12.38% to a proposed 8.67%. The FERC issued an order on June 18, 2015 setting the complaint for hearing and hearings were held the week of February 16, 2016. The ALJ is scheduled to issue an initial decision by June 30, 2016. A decision by the FERC is not expected until 2017. Based on a potential reduction by the FERC in the ROE component of the MISO Tariff, OTP recorded reductions in revenue of $0.3 million and $0.6 million in the three month periods ended March 31, 2016 and 2015, respectively, and has a $1.4 million liability on its balance sheet as of March 31, 2016, representing OTP’s best estimate of a refund obligation, net of amounts that would be subject to recovery under state jurisdictional TCR riders. |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Regulatory Assets and Liabilities | 4. Regulatory Assets and Liabilities As a regulated entity, OTP accounts for the financial effects of regulation in accordance with ASC Topic 980, Regulated Operations March 31, 2016 Remaining (in thousands) Current Long-Term Total Refund Period Regulatory Assets: Prior Service Costs and Actuarial Losses on Pensions and Other Postretirement Benefits 1 $ 7,439 $ 97,908 $ 105,347 see below Deferred Marked-to-Market Losses 1 4,063 9,515 13,578 57 months Conservation Improvement Program Costs and Incentives 2 2,789 5,065 7,854 27 months Accumulated ARO Accretion/Depreciation Adjustment 1 — 5,791 5,791 asset lives Big Stone II Unrecovered Project Costs – Minnesota 1 826 2,634 3,460 60 months North Dakota Renewable Resource Rider Accrued Revenues 2 1,501 305 1,806 21 months Debt Reacquisition Premiums 1 351 1,451 1,802 198 months Deferred Income Taxes 1 — 1,351 1,351 asset lives MISO Schedule 26/26A Transmission Cost Recovery Rider True-up 2 763 227 990 24 months Big Stone II Unrecovered Project Costs – South Dakota 2 100 618 718 86 months Minnesota Deferred Rate Case Expenses Subject to Recovery 1 559 — 559 12 months South Dakota Transmission Cost Recovery Rider Accrued Revenues 2 245 — 245 12 months Minnesota Renewable Resource Rider Accrued Revenues 2 — 68 68 12 months Total Regulatory Assets $ 18,636 $ 124,933 $ 143,569 Regulatory Liabilities: Accumulated Reserve for Estimated Removal Costs – Net of Salvage $ — $ 75,468 $ 75,468 asset lives Refundable Fuel Clause Adjustment Revenues 3,294 — 3,294 12 months Revenue for Rate Case Expenses Subject to Refund – Minnesota — 1,403 1,403 24 months Deferred Income Taxes — 1,043 1,043 asset lives Minnesota Environmental Cost Recovery Rider Accrued Refund 982 — 982 12 months North Dakota Environmental Cost Recovery Rider Accrued Refund 787 — 787 12 months North Dakota Transmission Cost Recovery Rider Accrued Refund 602 — 602 12 months South Dakota Environmental Cost Recovery Rider Accrued Refund 342 — 342 12 months Minnesota Transmission Cost Recovery Rider Accrued Refund 183 — 183 12 months Deferred Gain on Sale of Utility Property – Minnesota Portion 6 93 99 213 months Total Regulatory Liabilities $ 6,196 $ 78,007 $ 84,203 Net Regulatory Asset Position $ 12,440 $ 46,926 $ 59,366 1 2 December 31, 2015 Remaining (in thousands) Current Long-Term Total Refund Period Regulatory Assets: Prior Service Costs and Actuarial Losses on Pensions and Other Postretirement Benefits 1 $ 7,439 $ 99,293 $ 106,732 see below Deferred Marked-to-Market Losses 1 4,063 10,530 14,593 60 months Conservation Improvement Program Costs and Incentives 2 4,411 4,266 8,677 18 months Accumulated ARO Accretion/Depreciation Adjustment 1 — 5,672 5,672 asset lives Big Stone II Unrecovered Project Costs – Minnesota 1 942 2,620 3,562 84 months Debt Reacquisition Premiums 1 351 1,539 1,890 201 months Deferred Income Taxes 1 — 1,455 1,455 asset lives North Dakota Renewable Resource Rider Accrued Revenues 2 — 1,266 1,266 15 months MISO Schedule 26/26A Transmission Cost Recovery Rider True-up 2 698 355 1,053 24 months Big Stone II Unrecovered Project Costs – South Dakota 2 100 643 743 89 months Minnesota Transmission Cost Recovery Rider Accrued Revenues 2 576 — 576 12 months Minnesota Deferred Rate Case Expenses Subject to Recovery 1 291 — 291 12 months Minnesota Renewable Resource Rider Accrued Revenues 2 — 68 68 see below South Dakota Transmission Cost Recovery Rider Accrued Revenues 2 33 — 33 12 months Total Regulatory Assets $ 18,904 $ 127,707 $ 146,611 Regulatory Liabilities: Accumulated Reserve for Estimated Removal Costs – Net of Salvage $ — $ 74,948 $ 74,948 asset lives Refundable Fuel Clause Adjustment Revenues 1,834 — 1,834 12 months Revenue for Rate Case Expenses Subject to Refund – Minnesota — 1,279 1,279 see below Deferred Income Taxes — 1,110 1,110 asset lives Minnesota Environmental Cost Recovery Rider Accrued Refund 777 — 777 12 months North Dakota Environmental Cost Recovery Rider Accrued Refund 321 — 321 12 months South Dakota Environmental Cost Recovery Rider Accrued Refund 185 — 185 12 months North Dakota Transmission Cost Recovery Rider Accrued Refund 132 — 132 12 months Deferred Gain on Sale of Utility Property – Minnesota Portion 5 95 100 216 months North Dakota Renewable Resource Rider Accrued Refund 68 — 68 12 months Total Regulatory Liabilities $ 3,322 $ 77,432 $ 80,754 Net Regulatory Asset Position $ 15,582 $ 50,275 $ 65,857 1 2 The regulatory asset related to prior service costs and actuarial losses on pensions and other postretirement benefits represents benefit costs and actuarial losses subject to recovery through rates as they are expensed over the remaining service lives of active employees included in the plans. These unrecognized benefit costs and actuarial losses are required to be recognized as components of Accumulated Other Comprehensive Income in equity under ASC Topic 715, Compensation—Retirement Benefits All Deferred Marked-to-Market Losses recorded as of March 31, 2016 relate to forward purchases of energy scheduled for delivery through December 2020. Conservation Improvement Program Costs and Incentives represent mandated conservation expenditures and incentives recoverable through retail electric rates. The Accumulated Asset Retirement Obligation (ARO) Accretion/Depreciation Adjustment will accrete and be amortized over the lives of property with asset retirement obligations. Big Stone II Unrecovered Project Costs – Minnesota are the Minnesota share of generation and transmission plant-related costs incurred by OTP related to its participation in the abandoned Big Stone II project. North Dakota Renewable Resource Rider Accrued Revenues relate to qualifying renewable resource costs incurred to serve North Dakota customers that have not been billed to North Dakota customers as of March 31, 2016. Debt Reacquisition Premiums are being recovered from OTP customers over the remaining original lives of the reacquired debt issues, the longest of which is 198 months. The regulatory assets and liabilities related to Deferred Income Taxes result from changes in statutory tax rates accounted for in accordance with ASC Topic 740, Income Taxes MISO Schedule 26/26A Transmission Cost Recovery Rider True-up relates to the over/under collection of revenue based on comparison of the expected versus actual construction on eligible projects in the period. The true-up also includes the state jurisdictional portion of MISO Schedule 26/26A for regional transmission cost recovery that was included in the calculation of the state transmission riders and subsequently adjusted to reflect actual billing amounts in the schedule. Big Stone II Unrecovered Project Costs – South Dakota are the South Dakota share of generation and transmission plant-related costs incurred by OTP related to its participation in the abandoned Big Stone II project. Minnesota Deferred Rate Case Expenses Subject to Recovery relate to costs incurred in conjunction with OTP’s 2016 rate case in Minnesota that will be subject to recovery after new rates go into effect subsequent to the completion of the rate case. The South Dakota Transmission Cost Recovery Rider Accrued Revenues relate to revenues earned on qualifying transmission system facilities that have not been billed to South Dakota customers as of March 31, 2016. Minnesota Renewable Resource Rider Accrued Revenues relate to revenues earned on qualifying renewable resource costs incurred to serve Minnesota customers that have not been billed to Minnesota customers. On April 4, 2013 the MPUC approved OTP’s request to set the rider rate to zero effective May 1, 2013 and authorized that any unrecovered balance be retained as a regulatory asset to be recovered during the current interim rate period. The Accumulated Reserve for Estimated Removal Costs – Net of Salvage is reduced as actual removal costs, net of salvage revenues, are incurred. Revenue for Rate Case Expenses Subject to Refund – Minnesota relates to revenues collected under general rates to recover costs related to prior rate case proceedings in excess of the actual costs incurred, which are subject to refund. The Minnesota Environmental Cost Recovery Rider Accrued Refund relates to amounts collected on the Minnesota share of OTP’s investment in the Big Stone Plant AQCS project that are refundable to Minnesota customers as of March 31, 2016. The North Dakota Environmental Cost Recovery Rider Accrued Refund relates to amounts collected on the North Dakota share of OTP’s investments in the Big Stone Plant AQCS and Hoot Lake Plant MATS projects that are refundable to North Dakota customers as of March 31, 2016. The North Dakota Transmission Cost Recovery Rider Accrued Refund relates to amounts collected for qualifying transmission system facilities and operating costs incurred to serve North Dakota customers that are refundable to North Dakota customers as of March 31, 2016. The South Dakota Environmental Cost Recovery Rider Accrued Refund relates to amounts collected on the South Dakota share of OTP’s investments in the Big Stone Plant AQCS and Hoot Lake Plant MATS projects that are refundable to South Dakota customers as of March 31, 2016. Minnesota Transmission Cost Recovery Rider Accrued Refund relates to amounts collected for qualifying renewable resource costs incurred to serve Minnesota customers that are refundable to Minnesota customers as of March 31, 2016. If for any reason OTP ceases to meet the criteria for application of guidance under ASC 980 for all or part of its operations, the regulatory assets and liabilities that no longer meet such criteria would be removed from the consolidated balance sheet and included in the consolidated statement of income as an expense or income item in the period in which the application of guidance under ASC 980 ceases. |
Open Contract Positions Subject
Open Contract Positions Subject to Legally Enforceable Netting Arrangements | 3 Months Ended |
Mar. 31, 2016 | |
Open Contract Positions Subject To Legally Enforceable Netting Arrangements [Abstract] | |
Open Contract Positions Subject to Legally Enforceable Netting Arrangements | 5. Open Contract Positions Subject to Legally Enforceable Netting Arrangements OTP has certain derivative contracts that are designated as normal purchases. Individual counterparty exposures for these contracts can be offset according to legally enforceable netting arrangements. However, the Company does not net offsetting assets and liabilities under legally enforceable netting arrangements on the face of its consolidated balance sheet. The following table shows forward contract positions subject to legally enforceable netting arrangements as of March 31, 2016 and December 31, 2015: (in thousands) March 31, December 31, Open Contract Gain Positions Subject to Legally Enforceable Netting Arrangements $ — $ — Open Contract Loss Positions Subject to Legally Enforceable Netting Arrangements (18,264 ) (16,070 ) Net Balance Subject to Legally Enforceable Netting Arrangements $ (18,264 ) $ (16,070 ) The following table provides a breakdown of OTP’s credit risk standing on forward energy contracts in loss positions as of March 31, 2016 and December 31, 2015: Loss Position (in thousands) March 31 , 2016 December 31, Loss Contracts Covered by Deposited Funds or Letters of Credit $ 107 $ 199 Contracts Requiring Cash Deposits if OTP’s Credit Falls Below Investment Grade 1 18,157 15,871 Loss Contracts with No Ratings Triggers or Deposit Requirements — — Loss Position $ 18,264 $ 16,070 1 Contracts Requiring Cash Deposits if OTP’s Credit Falls Below Investment Grade $ 18,157 $ 15,871 Offsetting Gains with Counterparties under Master Netting Agreements — — Reporting Date Deposit Requirement if Credit Risk Feature Triggered $ 18,157 $ 15,871 |
Reconciliation of Common Shareh
Reconciliation of Common Shareholders' Equity, Common Shares and Earnings Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders Equity and Earnings Per Share [Abstract] | |
Reconciliation of Common Shareholders' Equity, Common Shares and Earnings Per Share | 6. Reconciliation of Common Shareholders’ Equity, Common Shares and Earnings Per Share Reconciliation of Common Shareholders’ Equity (in thousands) Par Value, Premium Retained Accumulated Total Balance, December 31, 2015 $ 189,286 $ 293,610 $ 126,025 $ (3,898 ) $ 605,023 Common Stock Issuances, Net of Expenses 1,080 4,410 5,490 Common Stock Retirements (9 ) (44 ) (53 ) Net Income 14,520 14,520 Other Comprehensive Income 140 140 Employee Stock Incentive Plans Expense 489 489 Common Dividends ($0.3125 per share) (11,889 ) (11,889 ) Balance, March 31, 2016 $ 190,357 $ 298,465 $ 128,656 $ (3,758 ) $ 613,720 Shelf Registration The Company’s shelf registration statement filed with the Securities and Exchange Commission on May 11, 2015, under which the Company may offer for sale, from time to time, either separately or together in any combination, equity, debt or other securities described in the shelf registration statement, including common shares of the Company, expires on May 11, 2018. On May 11, 2015, the Company entered into a Distribution Agreement with J.P. Morgan Securities (JPMS) under which it may offer and sell its common shares from time to time in an At-the-Market offering program through JPMS, as its distribution agent, up to an aggregate sales price of $75 million. Common Shares Following is a reconciliation of the Company’s common shares outstanding from December 31, 2015 through March 31, 2016: Common Shares Outstanding, December 31, 2015 37,857,186 Issuances: Executive Stock Performance Awards (2013 and 2014 shares earned) 54,700 Automatic Dividend Reinvestment and Share Purchase Plan: Dividends Reinvested 49,635 Cash Invested 49,281 Employee Stock Purchase Plan: Cash Invested 21,819 Dividends Reinvested 7,153 Employee Stock Ownership Plan 23,837 Vesting of Restricted Stock Units 9,675 Retirements: Shares Withheld for Individual Income Tax Requirements (1,868 ) Common Shares Outstanding, March 31, 2016 38,071,418 Earnings Per Share The numerator used in the calculation of both basic and diluted earnings per common share is net income for the three month periods ended March 31, 2016 and 2015. The denominator used in the calculation of basic earnings per common share is the weighted average number of common shares outstanding during the period excluding nonvested restricted shares granted to the Company’s directors and employees, which are considered contingently returnable and not outstanding for the purpose of calculating basic earnings per share. The denominator used in the calculation of diluted earnings per common share is derived by adjusting basic shares outstanding for the items listed in the following reconciliation for the three month periods ended March 31: 2016 2015 Weighted Average Common Shares Outstanding – Basic 37,936,943 37,243,118 Plus Outstanding Share Awards net of Share Reductions for Unrecognized Stock-Based Compensation Expense and Excess Tax Benefits: Shares Expected to be Awarded for Stock Performance Awards Granted to Executive Officers based on Measurement Period-to-Date Performance 46,885 137,460 Underlying Shares Related to Nonvested Restricted Stock Units Granted to Employees 39,841 42,540 Nonvested Restricted Shares 17,776 49,998 Shares Expected to be Issued Under the Deferred Compensation Program for Directors 3,763 24,277 Potentially Dilutive Stock Options — 488 Total Dilutive Shares 108,265 254,763 Weighted Average Common Shares Outstanding – Diluted 38,045,208 37,497,881 The effect of dilutive shares on earnings per share for the three month periods ended March 31, 2016 and 2015, resulted in no differences greater than $0.01 between basic and diluted earnings per share in total or from continuing or discontinued operations in either period. |
Share-Based Payments
Share-Based Payments | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | |
Share-Based Payments | 7. Share-Based Payments Stock Incentive Awards On February 4, 2016 the following stock incentive awards were granted to the Company’s executive officers under the 2014 Stock Incentive Plan: Award Shares/ Weighted Vesting Restricted Stock Units Granted to Executive Officers 22,000 $ 28.915 25% per year through February 6, 2020 Stock Performance Awards Granted to Executive Officers 81,500 $ 24.03 December 31, 2018 The vesting of restricted stock units is accelerated in the event of a change in control, disability, death or retirement, subject to proration on retirement in certain cases. All restricted stock units granted to executive officers are eligible to receive dividend equivalent payments on all unvested awards over the awards’ respective vesting periods, subject to forfeiture under the terms of the restricted stock unit award agreements. The grant-date fair value of each restricted stock unit was the average of the high and low market price per share on the date of grant. Under the 2016 performance share award agreements the aggregate award for performance at target is 81,500 shares. For target performance the Company’s executive officers would earn an aggregate of 54,333 common shares based on the Company’s total shareholder return relative to the total shareholder return of the companies that comprise the Edison Electric Institute Index over the performance measurement period of January 1, 2016 through December 31, 2018, with the beginning and ending share values based on the average closing price of a share of the Company’s common stock for the 20 trading days immediately following January 1, 2016 and the average closing price for the 20 trading days immediately preceding January 1, 2019, respectively. The Company’s executive officers would also earn an aggregate of 27,167 common shares for achieving the target set for the Company’s 3-year average adjusted return on equity. Actual payment may range from zero to 150% of the target amount, or up to an aggregate of 122,250 common shares. The executive officers have no voting or dividend rights related to these shares until the shares, if any, are issued at the end of the performance measurement period. The terms of these awards are such that the entire award will be classified and accounted for as a liability, as required under ASC Topic 718, Compensation—Stock Compensation Under the 2016 performance share award agreements, payment and the amount of payment in the event of retirement, resignation for good reason or involuntary termination without cause is to be made at the end of the performance period based on actual performance, subject to proration in certain cases, except that the payment of performance awards granted to certain officers who are parties to executive employment agreements with the Company is to be made at the target amount at the date of any such event. The vesting of these performance share award agreements is accelerated and paid out at target in the event of a change in control, disability or death (and on retirement at or after the age of 62 for certain officers who are parties to executive employment agreements with the Company). The end of the period over which compensation expense is recognized for the above share-based awards for the individual grantees is the shorter of the indicated vesting period for the respective awards or the date the grantee becomes eligible for retirement as defined in their award agreement. As of March 31, 2016 the remaining unrecognized compensation expense related to outstanding, unvested stock-based compensation was approximately $4.5 million (before income taxes) which will be amortized over a weighted-average period of 2.7 years. Amounts of compensation expense recognized under the Company’s six stock-based payment programs for the three month periods ended March 31, 2016 and 2015 are presented in the table below: Three months ended March 31, (in thousands) 2016 2015 Stock Performance Awards Granted to Executive Officers $ 537 $ 1,020 Restricted Stock Units Granted to Executive Officers 245 253 Restricted Stock Granted to Executive Officers 29 157 Restricted Stock Granted to Directors 107 98 Restricted Stock Units Granted to Non-Executive Employees 64 66 Employee Stock Purchase Plan (15% discount) 44 49 Totals $ 1,026 $ 1,643 |
Retained Earnings Restriction
Retained Earnings Restriction | 3 Months Ended |
Mar. 31, 2016 | |
Retained Earnings Restrictions [Abstract] | |
Retained Earnings Restriction | 8. Retained Earnings Restriction The Company is a holding company with no significant operations of its own. The primary source of funds for payments of dividends to the Company’s shareholders is from dividends paid or distributions made by the Company’s subsidiaries. As a result of certain statutory limitations or regulatory or financing agreements, restrictions could occur on the amount of distributions allowed to be made by the Company’s subsidiaries. Both the Company and OTP credit agreements contain restrictions on the payment of cash dividends upon a default or event of default. An event of default would be considered to have occurred if the Company did not meet certain financial covenants. As of March 31, 2016 the Company was in compliance with these financial covenants. See note 10 to the Company’s consolidated financial statements on Form 10-K for the year ended December 31, 2015 for further information on the covenants. Under the Federal Power Act, a public utility may not pay dividends from any funds properly included in a capital account. What constitutes “funds properly included in a capital account” is undefined in the Federal Power Act or the related regulations; however, FERC has consistently interpreted the provision to allow dividends to be paid as long as (1) the source of the dividends is clearly disclosed, (2) the dividend is not excessive and (3) there is no self-dealing on the part of corporate officials. The MPUC indirectly limits the amount of dividends OTP can pay to the Company by requiring an equity-to-total-capitalization ratio between 46.9% and 57.3%. OTP’s equity to total capitalization ratio including short-term debt was 52.0% as of March 31, 2016. Total capitalization for OTP cannot currently exceed $1,056,300,000. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Construction and Other Purchase Commitments At December 31, 2015 OTP had commitments under contracts, including its share of construction program commitments extending into 2019, of approximately $89.6 million. At March 31, 2016 OTP had commitments under contracts, including its share of construction program commitments, extending into 2019, of approximately $102.9 million. Electric Utility Capacity and Energy Requirements and Coal and Delivery Contracts OTP has commitments for the purchase of capacity and energy requirements under agreements extending into 2040. OTP has contracts providing for the purchase and delivery of a significant portion of its current coal requirements. OTP’s current coal purchase agreements, under which OTP is committed to the minimum purchase amounts or to make payments in lieu thereof, expire in 2016, 2017 and 2040. In January 2016, OTP entered into an agreement with Cloud Peak Energy Resources LLC for the purchase of subbituminous coal for Hoot Lake Plant for the period of January 1, 2016 through December 31, 2023. OTP has no fixed minimum purchase requirements under the agreement but all of Hoot Lake Plant’s coal requirements for the period covered must be purchased under this agreement. Operating Leases OTP has obligations to make future operating lease payments primarily related to land leases and coal rail-car leases. The Company’s nonelectric companies have obligations to make future operating lease payments primarily related to leases of buildings and manufacturing equipment. Contingencies Contingencies, by their nature, relate to uncertainties that require the Company’s management to exercise judgment both in assessing the likelihood a liability has been incurred as well as in estimating the amount of potential loss. The most significant contingencies impacting the Company’s consolidated financial statements are those related to environmental remediation, risks associated with indemnification obligations under divestitures of discontinued operations and litigation matters. Should all of these known items result in liabilities being incurred, the loss could be as high as $1.0 million. Based on a potential reduction by the FERC in the ROE component of the MISO Tariff, OTP has recorded a $1.4 million liability on its balance sheet as of March 31, 2016, representing OTP’s best estimate of a refund obligation, net of amounts that would be subject to recovery under state jurisdictional TCR riders. In 2014, the EPA published proposed standards of performance for CO2 emissions from new fossil fuel-fired power plants, proposed CO2 emission guidelines for existing fossil fuel-fired power plants and proposed CO2 standards of performance for CO2 emissions from reconstructed and modified fossil fuel-fired power plants under section 111 of the Clean Air Act, essentially requiring that such plants install updated control technology when constructing, modifying or reconstructing to reduce their emissions. The EPA published final rules for each of these proposals on October 23, 2015. On February 9, 2016 the U.S. Supreme Court granted a stay of the CO2 emission guidelines for existing fossil fuel-fired power plants, pending disposition of petitions for review in the D.C. Circuit and disposition of a petition for a writ of certiorari seeking review by the U.S. Supreme Court, if such a writ is sought. Oral argument before the D.C. Circuit is scheduled for June 2016. Uncertainty regarding the status of the rules will likely continue for some time. OTP is actively engaged with the stakeholder processes in each of its states that have continued to move forward with planning efforts during the stay. Other The Company is a party to litigation and regulatory enforcement matters arising in the normal course of business. The Company regularly analyzes current information and, as necessary, provides accruals for liabilities that are probable of occurring and that can be reasonably estimated. The Company believes the effect on its consolidated results of operations, financial position and cash flows, if any, for the disposition of all matters pending as of March 31, 2016 will not be material. |
Short-Term and Long-Term Borrow
Short-Term and Long-Term Borrowings | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Short-Term and Long-Term Borrowings | 10. Short-Term and Long-Term Borrowings The following table presents the status of our lines of credit as of March 31, 2016 and December 31, 2015: (in thousands) Line Limit In Use on Restricted due to Available on Available on Otter Tail Corporation Credit Agreement $ 150,000 $ 20,880 $ — $ 129,120 $ 90,334 OTP Credit Agreement 170,000 22,056 — 147,944 148,694 Total $ 320,000 $ 42,936 $ — $ 277,064 $ 239,028 Debt Issuances and Retirements On February 5, 2016 the Company entered into a Term Loan Agreement (the Term Loan Agreement) with the Banks named therein, JPMorgan Chase Bank, N.A., as administrative agent, and JPMS, as Lead Arranger and Book Runner. The Term Loan Agreement provides for an unsecured term loan with an aggregate commitment of $50 million that the Company may use for purposes of funding working capital, capital expenditures and other corporate purposes of the Company and certain of our subsidiaries. Under the Term Loan Agreement, the Company may, on up to two occasions, enter into additional tranches of term loans in minimum increments of $10 million, subject to the consent of the lenders and so long as the aggregate amount of outstanding term loans does not exceed $100 million at any time. Borrowings under the Term Loan Agreement will bear interest at either (1) LIBOR plus 0.90% or (2) the greater of (a) the Prime Rate, (b) the Federal Reserve Bank of New York Rate plus 0.50% and (c) LIBOR multiplied by the Statutory Reserve Rate plus 1%. The applicable interest rate will depend on the Company’s election of whether to make the advance a LIBOR advance. The Term Loan Agreement terminates on February 5, 2018. The Term Loan Agreement contains a number of restrictions on the Company, Varistar and certain subsidiaries of Varistar, including restrictions on their ability to merge, sell assets, make investments, create or incur liens on assets, guarantee the obligations of any other party and engage in transactions with related parties. The Term Loan Agreement also contains affirmative covenants and events of default, and certain financial covenants. Specifically, the Company must not permit the ratio of its Interest-bearing Debt to Total Capitalization to be greater than 0.60 to 1.00 or permit its Interest and Dividend Coverage Ratio to be less than 1.50 to 1.00 (each measured on a consolidated basis), as provided in the Term Loan Agreement. The Term Loan Agreement does not include provisions for the termination of the agreement or the acceleration of repayment of amounts outstanding due to changes in the Company’s credit ratings. The Company’s obligations under the Term Loan Agreement are guaranteed by Varistar and certain of its subsidiaries. On February 5, 2016 the Company borrowed $50 million under the Term Loan Agreement at an interest rate based on the 30 day LIBOR plus 90 basis points and used the proceeds to pay down borrowings under the Otter Tail Corporation Credit Agreement that were used to fund the expansion of BTD’s Minnesota facilities in 2015 and to fund the September 1, 2015 acquisition of BTD-Georgia. The following tables provide a breakdown of the assignment of the Company’s consolidated short-term and long-term debt outstanding as of March 31, 2016 and December 31, 2015: March 31, 2016 (in thousands) OTP Otter Tail Otter Tail Short-Term Debt $ 22,056 $ 20,880 $ 42,936 Long-Term Debt: 9.000% Notes, due December 15, 2016 $ 52,330 $ 52,330 Term Loan, LIBOR plus 0.90%, due February 5, 2018 50,000 50,000 Senior Unsecured Notes 5.95%, Series A, due August 20, 2017 $ 33,000 33,000 Senior Unsecured Notes 4.63%, due December 1, 2021 140,000 140,000 Senior Unsecured Notes 6.15%, Series B, due August 20, 2022 30,000 30,000 Senior Unsecured Notes 6.37%, Series C, due August 20, 2027 42,000 42,000 Senior Unsecured Notes 4.68%, Series A, due February 27, 2029 60,000 60,000 Senior Unsecured Notes 6.47%, Series D, due August 20, 2037 50,000 50,000 Senior Unsecured Notes 5.47%, Series B, due February 27, 2044 90,000 90,000 North Dakota Development Note, 3.95%, due April 1, 2018 163 163 Partnership in Assisting Community Expansion (PACE) Note, 2.54%, due March 18, 2021 944 944 Total $ 445,000 $ 103,437 $ 548,437 Less: Current Maturities net of Unamortized Debt Issuance Costs 52,457 52,457 Unamortized Long-Term Debt Issuance Costs 2,039 140 2,179 Total Long-Term Debt net of Unamortized Debt Issuance Costs $ 442,961 $ 50,840 $ 493,801 Total Short-Term and Long-Term Debt (with current maturities) $ 465,017 $ 124,177 $ 589,194 December 31, 2015 (in thousands) OTP Otter Tail Otter Tail Short-Term Debt $ 21,006 $ 59,666 $ 80,672 Long-Term Debt: 9.000% Notes, due December 15, 2016 $ 52,330 $ 52,330 Senior Unsecured Notes 5.95%, Series A, due August 20, 2017 $ 33,000 33,000 Senior Unsecured Notes 4.63%, due December 1, 2021 140,000 140,000 Senior Unsecured Notes 6.15%, Series B, due August 20, 2022 30,000 30,000 Senior Unsecured Notes 6.37%, Series C, due August 20, 2027 42,000 42,000 Senior Unsecured Notes 4.68%, Series A, due February 27, 2029 60,000 60,000 Senior Unsecured Notes 6.47%, Series D, due August 20, 2037 50,000 50,000 Senior Unsecured Notes 5.47%, Series B, due February 27, 2044 90,000 90,000 North Dakota Development Note, 3.95%, due April 1, 2018 182 182 Partnership in Assisting Community Expansion (PACE) Note, 2.54%, due March 18, 2021 977 977 Total $ 445,000 $ 53,489 $ 498,489 Less: Current Maturities net of Unamortized Debt Issuance Costs 52,422 52,422 Unamortized Long-Term Debt Issuance Costs 2,099 122 2,221 Total Long-Term Debt net of Unamortized Debt Issuance Costs $ 442,901 $ 945 $ 443,846 Total Short-Term and Long-Term Debt (with current maturities) $ 463,907 $ 113,033 $ 576,940 |
Pension Plan and Other Postreti
Pension Plan and Other Postretirement Benefits | 3 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension Plan and Other Postretirement Benefits | 11. Pension Plan and Other Postretirement Benefits Pension Plan Three Months Ended March 31, (in thousands) 2016 2015 Service Cost—Benefit Earned During the Period $ 1,382 $ 1,500 Interest Cost on Projected Benefit Obligation 3,522 3,325 Expected Return on Assets (4,867 ) (4,600 ) Amortization of Prior-Service Cost: From Regulatory Asset 47 47 From Other Comprehensive Income 1 1 1 Amortization of Net Actuarial Loss: From Regulatory Asset 1,227 1,633 From Other Comprehensive Income 1 31 40 Net Periodic Pension Cost $ 1,343 $ 1,946 1 Cash flows Executive Survivor and Supplemental Retirement Plan Three Months Ended March 31, (in thousands) 2016 2015 Service Cost—Benefit Earned During the Period $ 63 $ 47 Interest Cost on Projected Benefit Obligation 417 381 Amortization of Prior-Service Cost: From Regulatory Asset 4 4 From Other Comprehensive Income 1 9 10 Amortization of Net Actuarial Loss: From Regulatory Asset 73 83 From Other Comprehensive Income 2 112 151 Net Periodic Pension Cost $ 678 $ 676 1 Electric Operation and Maintenance Expenses $ 4 $ 4 Other Nonelectric Expenses 5 6 2 Electric Operation and Maintenance Expenses $ 68 $ 78 Other Nonelectric Expenses 44 73 Postretirement Benefits Three Months Ended March 31, (in thousands) 2016 2015 Service Cost—Benefit Earned During the Period $ 306 $ 375 Interest Cost on Projected Benefit Obligation 541 550 Amortization of Prior-Service Cost: From Regulatory Asset 33 51 From Other Comprehensive Income 1 1 1 Amortization of Net Actuarial Loss: From Regulatory Asset — 48 From Other Comprehensive Income 1 — 1 Net Periodic Postretirement Benefit Cost $ 881 $ 1,026 Effect of Medicare Part D Subsidy $ (257 ) $ (450 ) 1 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 12. Fair Value of Financial Instruments The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Short-Term Debt Long-Term Debt including Current Maturities March 31, 2016 December 31, 2015 (in thousands) Carrying Fair Value Carrying Fair Value Short-Term Debt (42,936 ) (42,936 ) (80,672 ) (80,672 ) Long-Term Debt including Current Maturities (546,258 ) (623,484 ) (496,268 ) (561,245 ) |
Income Tax Expense Continuing
Income Tax Expense Continuing Operations | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Expense - Continuing Operations | 14. Income Tax Expense – Continuing Operations The following table provides a reconciliation of income tax expense calculated at the net composite federal and state statutory rate on income from continuing operations before income taxes and income tax expense for continuing operations reported on the Company’s consolidated statements of income for the three month periods ended March 31, 2016 and 2015: Three Months Ended March 31, (in thousands) 2016 2015 Income Before Income Taxes – Continuing Operations $ 19,982 $ 17,854 Tax Computed at Company’s Net Composite Federal and State Statutory Rate (39%) 7,793 6,963 Increases (Decreases) in Tax from: Federal Production Tax Credits (1,686 ) (2,054 ) North Dakota Wind Tax Credit Amortization – Net of Federal Taxes (212 ) (212 ) Section 199 Domestic Production Activities Deduction (104 ) (362 ) Employee Stock Ownership Plan Dividend Deduction (158 ) (172 ) Corporate Owned Life Insurance (64 ) (80 ) AFUDC Equity (37 ) (100 ) Other Items – Net (40 ) 90 Income Tax Expense – Continuing Operations $ 5,492 $ 4,073 Effective Income Tax Rate – Continuing Operations 27.5 % 22.8 % The following table summarizes the activity related to our unrecognized tax benefits: (in thousands) 2016 2015 Balance on January 1 $ 468 $ 222 Increases Related to Tax Positions for Prior Years — — Increases Related to Tax Positions for Current Year 16 44 Uncertain Positions Resolved During Year — — Balance on March 31 $ 484 $ 266 The balance of unrecognized tax benefits as of March 31, 2016 would reduce the Company’s effective tax rate if recognized. The total amount of unrecognized tax benefits as of March 31, 2016 is not expected to change significantly within the next 12 months. The Company classifies interest and penalties on tax uncertainties as components of the provision for income taxes in its consolidated statement of income. There was no amount accrued for interest on tax uncertainties as of March 31, 2016. The Company and its subsidiaries file a consolidated U.S. federal income tax return and various state income tax returns. As of March 31, 2016, with limited exceptions, the Company is no longer subject to examinations by taxing authorities for tax years prior to 2012 for federal and North Dakota state income taxes and for tax years prior to 2013 for Minnesota state income taxes. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 16. Discontinued Operations On April 30, 2015 the Company sold Foley Company (Foley), its On February 28, 2015 the Company sold the assets of AEV, Inc. its . On February 8, 2013 the Company completed the sale of substantially all the assets of its former dock and boat lift company and on November 30, 2012 the Company completed the sale of the assets of its former wind tower manufacturing business. The Company’s Construction and Wind Energy segments were eliminated as a result of the sales of Foley, AEV, Inc. and its former wind tower manufacturing business. The financial position, results of operations and cash flows of Foley, AEV, Inc., the Company’s former dock and boatlift company and its former wind tower manufacturing business are reported as discontinued operations in the Company’s consolidated financial statements. Following are summary presentations of the results of discontinued operations for the three month periods ended March 31: (in thousands) 2016 2015 Operating Revenues $ — $ 18,724 Operating Expenses (50 ) 22,141 Goodwill Impairment Charge — 1,000 Operating Income (Loss) 50 (4,417 ) Other Deductions — (31 ) Income Tax Expense (Benefit) 20 (1,376 ) Net Income (Loss) from Operations 30 (3,072 ) Gain on Disposition Before Taxes — 12,042 Income Tax Expense on Disposition — 4,816 Net Gain on Disposition — 7,226 Net Income $ 30 $ 4,154 Foley and AEV, Inc. Following are summary presentations of the major components of liabilities of discontinued operations as of March 31, 2016 and December 31, 2015: (in thousands) March 31, December 31, Current Liabilities $ 2,098 $ 2,098 Liabilities of Discontinued Operations $ 2,098 $ 2,098 Included in current liabilities of discontinued operations are warranty reserves. Details regarding the warranty reserves follow: (in thousands) 2016 2015 Warranty Reserve Balance, January 1 $ 2,103 $ 2,527 Additional Provision for Warranties Made During the Year — — Settlements Made During the Year — (6 ) Decrease in Warranty Estimates for Prior Years — — Warranty Reserve Balance, March 31 $ 2,103 $ 2,521 The warranty reserve balances as of March 31, 2016 relate entirely to products produced by the Company’s former wind tower and dock and boatlift manufacturing companies. Expenses associated with remediation activities of these companies could be substantial. Although the assets of these companies have been sold and their operating results are reported under discontinued operations in the Company’s consolidated statements of income, the Company retains responsibility for warranty claims related to the products they produced prior to the sales of these companies. For wind towers, the potential exists for multiple claims based on one defect repeated throughout the production process or for claims where the cost to repair or replace the defective part is highly disproportionate to the original cost of the part. For example, if the Company is required to cover remediation expenses in addition to regular warranty coverage, the Company could be required to accrue additional expenses and experience additional unplanned cash expenditures which could adversely affect the Company’s consolidated results of operations and financial condition. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition Due to the diverse business operations of the Company, revenue recognition depends on the product produced and sold or service performed. The Company recognizes revenue when the earnings process is complete, evidenced by an agreement with the customer, there has been delivery and acceptance, the price is fixed or determinable and collectability is reasonably assured. In cases where significant obligations remain after delivery, revenue recognition is deferred until such obligations are fulfilled. Provisions for sales returns and warranty costs are recorded at the time of the sale based on historical information and current trends. In the case of derivative instruments, such as Otter Tail Power Company (OTP) 2015 forward energy contracts, marked-to-market and realized gains and losses are recognized on a net basis in revenue in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 815, Derivatives and Hedging For the Company’s operating companies recognizing revenue on certain products when shipped, those operating companies have no further obligation to provide services related to such product. The shipping terms used in these instances are FOB shipping point. |
Warranty Reserves | Warranty Reserves Certain products previously sold by the Company carried one to fifteen year warranties. Although the Company engaged in extensive product quality programs and processes, the Company’s warranty obligations have been and may in the future be affected by product failure rates, repair or field replacement costs and additional development costs incurred in correcting product failures. The warranty reserve balances as of March 31, 2016 and December 31, 2015 relate entirely to products that were produced by entities the Company no longer owns prior to the Company selling the assets of those companies. The warranty reserve balance is included in liabilities of discontinued operations. See note 16 to consolidated financial statements. |
Fair Value Measurements | Fair Value Measurements The Company follows ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820), for recurring fair value measurements. ASC 820 provides a single definition of fair value, requires enhanced disclosures about assets and liabilities measured at fair value and establishes a hierarchal framework for disclosing the observability of the inputs utilized in measuring assets and liabilities at fair value. The three levels defined by the hierarchy and examples of each level are as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed by the New York Stock Exchange and commodity derivative contracts listed on the New York Mercantile Exchange (NYMEX). Level 2 – Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities included in Level 2 are typically either comparable to actively traded securities or contracts, such as treasury securities with pricing interpolated from recent trades of similar securities, or priced with models using highly observable inputs, such as commodity options priced using observable forward prices and volatilities. Level 3 – Significant inputs to pricing have little or no observability as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation and may include complex and subjective models and forecasts. The following tables present, for each of the hierarchy levels, the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015: March 31, 2016 (in thousands) Level 1 Level 2 Level 3 Assets: Current Assets – Other: Money Market Escrow Accounts – AEV, Inc. and Foley Company Dispositions $ 2,000 Investments: Government-Backed and Government-Sponsored Enterprises’ Debt Securities $ 4,315 Corporate Debt Securities – Held by Captive Insurance Company 3,903 Other Assets: Money Market and Mutual Funds – Nonqualified Retirement Savings Plan 293 Total Assets $ 2,293 $ 8,218 Liabilities: Other Accrued Liabilities: Derivative Liabilities – Forward Gasoline Purchase Contracts $ 107 Total Liabilities $ 107 December 31, 2015 (in thousands) Level 1 Level 2 Level 3 Assets: Current Assets – Other: Money Market Escrow Accounts – AEV, Inc. and Foley Company Dispositions $ 2,000 Investments: Government-Backed and Government-Sponsored Enterprises’ Debt Securities $ 4,235 Corporate Debt Securities – Held by Captive Insurance Company 3,858 Other Assets: Money Market and Mutual Funds – Nonqualified Retirement Savings Plan 196 Total Assets $ 2,196 $ 8,093 Liabilities: Other Accrued Liabilities: Derivative Liabilities – Forward Gasoline Purchase Contracts $ 199 Total Liabilities $ 199 The valuation techniques and inputs used for the Level 2 fair value measurements in the table above are as follows: Forward Gasoline Purchase Contracts Government-Backed and Government-Sponsored Enterprises’ and Corporate Debt Securities Held by the Company’s Captive Insurance Company |
Inventories | Inventories Inventories consist of the following: March 31, December 31, (in thousands) 2016 2015 Finished Goods $ 26,440 $ 25,971 Work in Process 12,110 12,821 Raw Material, Fuel and Supplies 46,860 46,624 Total Inventories $ 85,410 $ 85,416 |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets On September 1, 2015 Miller Welding & Iron Works, Inc. (BTD-Illinois), a wholly owned subsidiary of BTD Manufacturing, Inc. (BTD), acquired the assets of Impulse Manufacturing, Inc. (Impulse) of Dawsonville, Georgia. The newly acquired business operates under the name BTD-Georgia. Based on the preliminary purchase price allocation, the difference in the fair value of assets acquired and the price paid for Impulse resulted in an initial estimate of acquired goodwill of $8,244,000. An assessment of the carrying amounts of the remaining goodwill of the Company’s reporting units reported under continuing operations as of December 31, 2015 indicated the fair values are substantially in excess of their respective book values and not impaired. The following table summarizes changes to goodwill by business segment during 2016: (in thousands) Gross Balance Accumulated Balance (net of Adjustments Balance (net of Manufacturing $ 20,430 $ — $ 20,430 $ — $ 20,430 Plastics 19,302 — 19,302 — 19,302 Total $ 39,732 $ — $ 39,732 $ — $ 39,732 Intangible assets with finite lives are amortized over their estimated useful lives and reviewed for impairment in accordance with requirements under ASC Topic 360-10-35, Property, Plant, and Equipment—Overall—Subsequent Measurement The following table summarizes the components of the Company’s intangible assets at March 31, 2016 and December 31, 2015: March 31, 2016 (in thousands) Gross Carrying Accumulated Net Carrying Remaining Amortizable Intangible Assets: Customer Relationships $ 21,681 $ 6,987 $ 14,694 45-233 months Covenant not to Compete 620 121 499 29 months Other Intangible Assets 639 575 64 6 months Emission Allowances 9 NA 9 Expensed as used Total $ 22,949 $ 7,683 $ 15,266 December 31, 2015 (in thousands) Amortizable Intangible Assets: Customer Relationships $ 21,681 $ 6,714 $ 14,967 48-236 months Covenant not to Compete 620 69 551 32 months Other Intangible Assets 639 543 96 9 months Emission Allowances 59 NA 59 Expensed as used Total $ 22,999 $ 7,326 $ 15,673 The amortization expense for these intangible assets was: Three Months Ended March 31, (in thousands) 2016 2015 Amortization Expense – Intangible Assets $ 357 $ 244 The estimated annual amortization expense for these intangible assets for the next five years is: (in thousands) 2016 2017 2018 2019 2020 Estimated Amortization Expense – Intangible Assets $ 1,395 $ 1,299 $ 1,230 $ 1,093 $ 1,059 |
Supplemental Disclosures of Cash Flow Information | Supplemental Disclosures of Cash Flow Information As of March 31, (in thousands) 2016 2015 Noncash Investing Activities: Transactions Related to Capital Additions not Settled in Cash $ 24,618 $ 25,284 |
Coyote Station Lignite Supply Agreement - Variable Interest Entity | Coyote Station Lignite Supply Agreement – Variable Interest Entity Under the LSA, all development period costs of the Coyote Creek coal mine incurred during the development period will be recovered from the Coyote Station owners over the full term of the production period, which commences with the initial delivery of coal to Coyote Station (anticipated in May 2016), by being included in the cost of production. The development fee and the capital charge incurred during the development period will be recovered from the Coyote Station owners over the first 52 months of the production period by being included in the cost of production during those months. The LSA was amended on March 16, 2015 to provide, among other things, that during any period between December 31, 2016 and any subsequent date on which CCMC makes initial delivery of coal, the Coyote Station owners will pay the following costs of production as advance payments for lignite: depreciation and amortization charges on capital assets and CCMC’s obligations under its loans and leases. In addition, if the LSA terminates prior to the expiration of its term or the production period terminates prior to December 31, 2040 and the Coyote Station owners purchase all of the outstanding membership interests of CCMC as required by the LSA, the owners will satisfy, or (if permitted by CCMC’s applicable lender) assume, all of CCMC’s obligations owed to CCMC’s lenders under its loans and leases. The Coyote Station owners have limited rights to assign their rights and obligations under the LSA without the consent of CCMC’s lenders during any period in which CCMC’s obligations to its lenders remain outstanding. OTP’s 35% share of development period costs, development fees and capital charges incurred by CCMC through March 31, 2016 is $60.3 million. In the event the contract is terminated because regulations or legislation render the burning of coal cost prohibitive and the assets worthless, OTP’s maximum exposure to loss as a result of its involvement with CCMC as of March 31, 2016 could be as high as $60.3 million. |
New Accounting Standards | New Accounting Standards ASU 2014-09 Revenue from Contracts with Customers (Topic 606) (ASC 606) Amendments to the ASC in ASU 2014-09, as amended, are effective for fiscal years beginning after December 15, 2017. Early adoption is permitted, but not any earlier than January 1, 2017. Application methods permitted are: (1) full retrospective, (2) retrospective using one or more practical expedients and (3) retrospective with the cumulative effect of initial application recognized at the date of initial application. The Company is currently reviewing ASU 2014-09, identifying key impacts to its businesses, reviewing revenue streams and contracts to determine areas where the amendments in ASU 2014-09 will be applicable and evaluating transition options. The Company does not plan to adopt the updated guidance prior to January 1, 2018. ASU 2015-03 Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for interim and annual reporting periods beginning after December 15, 2015 and must be applied retrospectively to balance sheets presented for periods prior to adoption. The Company adopted the updated standards in ASU 2015-03 in the first quarter of 2016. In conjunction with implementing this update, the Company is reclassifying the remaining balance of unamortized line of credit issuance costs from the deferred debit section of its consolidated balance sheet to other assets, eliminating the deferred debits section of its consolidated balance sheet and displaying long-term regulatory assets as a separate line item on its consolidated balance sheet. The effects of applying the guidance in ASU 2015-03 retrospectively to the Company’s December 31, 2015 consolidated balance sheet and of the associated reclassification of unamortized line of credit issuance costs are shown in the following table: (in thousands) Previously Adjustments Restated Other Assets $ 31,108 $ 1,676 $ 32,784 Unamortized Debt Expense 3,897 (3,897 ) — Total Assets 1,820,904 (2,221 ) 1,818,683 Current Liabilities Current Maturities of Long-Term Debt 52,544 (122 ) 52,422 Total Current Liabilities 271,238 (122 ) 271,116 Capitalization Long-Term Debt—Net 445,945 (2,099 ) 443,846 Total Capitalization 1,050,968 (2,099 ) 1,048,869 Total Liabilities and Equity 1,820,904 (2,221 ) 1,818,683 ASU 2015-11 Inventory (Topic 330): Simplifying the Measurement of Inventory, ASU 2016-02 Leases (Topic 842) ASU 2016-09 Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of assets and liabilities that are measured at fair value on a recurring basis | March 31, 2016 (in thousands) Level 1 Level 2 Level 3 Assets: Current Assets – Other: Money Market Escrow Accounts – AEV, Inc. and Foley Company Dispositions $ 2,000 Investments: Government-Backed and Government-Sponsored Enterprises’ Debt Securities $ 4,315 Corporate Debt Securities – Held by Captive Insurance Company 3,903 Other Assets: Money Market and Mutual Funds – Nonqualified Retirement Savings Plan 293 Total Assets $ 2,293 $ 8,218 Liabilities: Other Accrued Liabilities: Derivative Liabilities – Forward Gasoline Purchase Contracts $ 107 Total Liabilities $ 107 December 31, 2015 (in thousands) Level 1 Level 2 Level 3 Assets: Current Assets – Other: Money Market Escrow Accounts – AEV, Inc. and Foley Company Dispositions $ 2,000 Investments: Government-Backed and Government-Sponsored Enterprises’ Debt Securities $ 4,235 Corporate Debt Securities – Held by Captive Insurance Company 3,858 Other Assets: Money Market and Mutual Funds – Nonqualified Retirement Savings Plan 196 Total Assets $ 2,196 $ 8,093 Liabilities: Other Accrued Liabilities: Derivative Liabilities – Forward Gasoline Purchase Contracts $ 199 Total Liabilities $ 199 |
Schedule of inventories | March 31, December 31, (in thousands) 2016 2015 Finished Goods $ 26,440 $ 25,971 Work in Process 12,110 12,821 Raw Material, Fuel and Supplies 46,860 46,624 Total Inventories $ 85,410 $ 85,416 |
Schedule of changes to goodwill by business segment | (in thousands) Gross Balance Accumulated Balance (net of Adjustments Balance (net of Manufacturing $ 20,430 $ — $ 20,430 $ — $ 20,430 Plastics 19,302 — 19,302 — 19,302 Total $ 39,732 $ — $ 39,732 $ — $ 39,732 |
Schedule of components of intangible assets | March 31, 2016 (in thousands) Gross Carrying Accumulated Net Carrying Remaining Amortizable Intangible Assets: Customer Relationships $ 21,681 $ 6,987 $ 14,694 45-233 months Covenant not to Compete 620 121 499 29 months Other Intangible Assets 639 575 64 6 months Emission Allowances 9 NA 9 Expensed as used Total $ 22,949 $ 7,683 $ 15,266 December 31, 2015 (in thousands) Amortizable Intangible Assets: Customer Relationships $ 21,681 $ 6,714 $ 14,967 48-236 months Covenant not to Compete 620 69 551 32 months Other Intangible Assets 639 543 96 9 months Emission Allowances 59 NA 59 Expensed as used Total $ 22,999 $ 7,326 $ 15,673 |
Schedule of amortization expense for intangible assets | Three Months Ended March 31, (in thousands) 2016 2015 Amortization Expense – Intangible Assets $ 357 $ 244 |
Schedule of estimated annual amortization expense for intangible assets | (in thousands) 2016 2017 2018 2019 2020 Estimated Amortization Expense – Intangible Assets $ 1,395 $ 1,299 $ 1,230 $ 1,093 $ 1,059 |
Schedule of supplemental disclosure of cash flow information | As of March 31, (in thousands) 2016 2015 Noncash Investing Activities: Transactions Related to Capital Additions not Settled in Cash $ 24,618 $ 25,284 |
Schedule of effects of applying the guidance and reclassification of unamortized line of credit issuance costs | (in thousands) Previously Adjustments Restated Other Assets $ 31,108 $ 1,676 $ 32,784 Unamortized Debt Expense 3,897 (3,897 ) — Total Assets 1,820,904 (2,221 ) 1,818,683 Current Liabilities Current Maturities of Long-Term Debt 52,544 (122 ) 52,422 Total Current Liabilities 271,238 (122 ) 271,116 Capitalization Long-Term Debt—Net 445,945 (2,099 ) 443,846 Total Capitalization 1,050,968 (2,099 ) 1,048,869 Total Liabilities and Equity 1,820,904 (2,221 ) 1,818,683 |
Business Combinations and Seg24
Business Combinations and Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Acquisition And Segment Information [Abstract] | |
Schedule of business combination disclosing the preliminary allocation of purchase price to each major asset and liability | (in thousands) Assets: Current Assets $ 4,906 Goodwill 8,244 Other Intangible Assets 5,490 Other Amortizable Assets 1,380 Fixed Assets 13,649 Total Assets $ 33,669 Liabilities: Current Liabilities $ 2,852 Lease Obligation 11 Total Liabilities $ 2,863 Cash Paid $ 30,806 |
Schedule of information by business segments | Operating Revenue Three Months Ended March 31, (in thousands) 2016 2015 Electric $ 112,994 $ 113,547 Manufacturing 59,820 56,759 Plastics 33,437 32,552 Intersegment Eliminations (9 ) (17 ) Total $ 206,242 $ 202,841 Interest Charges Three Months Ended March 31, (in thousands) 2016 2015 Electric $ 6,284 $ 6,121 Manufacturing 992 832 Plastics 244 246 Corporate and Intersegment Eliminations 474 544 Total $ 7,994 $ 7,743 Income Taxes Three Months Ended March 31, (in thousands) 2016 2015 Electric $ 4,612 $ 4,221 Manufacturing 1,019 504 Plastics 1,367 1,264 Corporate (1,506 ) (1,916 ) Total $ 5,492 $ 4,073 Net Income (Loss) Three Months Ended March 31, (in thousands) 2016 2015 Electric $ 12,538 $ 13,178 Manufacturing 1,853 1,184 Plastics 2,152 2,120 Corporate (2,053 ) (2,701 ) Discontinued Operations 30 4,154 Total $ 14,520 $ 17,935 Identifiable Assets March 31, December 31, (in thousands) 2016 2015 Electric $ 1,528,157 $ 1,520,887 Manufacturing 179,745 173,860 Plastics 87,077 81,624 Corporate 38,378 42,312 Total $ 1,833,357 $ 1,818,683 |
Rate and Regulatory Matters (Ta
Rate and Regulatory Matters (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Rate and Regulatory Matters [Abstract] | |
Schedule of revenues recorded under rate riders | Rate Rider (in thousands) 2016 2015 Minnesota Conservation Improvement Program Costs and Incentives 1 $ 2,506 $ 1,928 Transmission Cost Recovery 2,276 1,615 Environmental Cost Recovery 3,082 2,557 North Dakota Renewable Resource Adjustment 2,059 1,883 Transmission Cost Recovery 2,236 1,936 Environmental Cost Recovery 2,811 2,156 South Dakota Transmission Cost Recovery 651 363 Environmental Cost Recovery 633 504 Conservation Improvement Program Costs and Incentives 159 140 1 |
Regulatory Assets and Liabili26
Regulatory Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Schedule of amount of regulatory assets and liabilities | March 31, 2016 Remaining (in thousands) Current Long-Term Total Refund Period Regulatory Assets: Prior Service Costs and Actuarial Losses on Pensions and Other Postretirement Benefits 1 $ 7,439 $ 97,908 $ 105,347 see below Deferred Marked-to-Market Losses 1 4,063 9,515 13,578 57 months Conservation Improvement Program Costs and Incentives 2 2,789 5,065 7,854 27 months Accumulated ARO Accretion/Depreciation Adjustment 1 — 5,791 5,791 asset lives Big Stone II Unrecovered Project Costs – Minnesota 1 826 2,634 3,460 60 months North Dakota Renewable Resource Rider Accrued Revenues 2 1,501 305 1,806 21 months Debt Reacquisition Premiums 1 351 1,451 1,802 198 months Deferred Income Taxes 1 — 1,351 1,351 asset lives MISO Schedule 26/26A Transmission Cost Recovery Rider True-up 2 763 227 990 24 months Big Stone II Unrecovered Project Costs – South Dakota 2 100 618 718 86 months Minnesota Deferred Rate Case Expenses Subject to Recovery 1 559 — 559 12 months South Dakota Transmission Cost Recovery Rider Accrued Revenues 2 245 — 245 12 months Minnesota Renewable Resource Rider Accrued Revenues 2 — 68 68 12 months Total Regulatory Assets $ 18,636 $ 124,933 $ 143,569 Regulatory Liabilities: Accumulated Reserve for Estimated Removal Costs – Net of Salvage $ — $ 75,468 $ 75,468 asset lives Refundable Fuel Clause Adjustment Revenues 3,294 — 3,294 12 months Revenue for Rate Case Expenses Subject to Refund – Minnesota — 1,403 1,403 24 months Deferred Income Taxes — 1,043 1,043 asset lives Minnesota Environmental Cost Recovery Rider Accrued Refund 982 — 982 12 months North Dakota Environmental Cost Recovery Rider Accrued Refund 787 — 787 12 months North Dakota Transmission Cost Recovery Rider Accrued Refund 602 — 602 12 months South Dakota Environmental Cost Recovery Rider Accrued Refund 342 — 342 12 months Minnesota Transmission Cost Recovery Rider Accrued Refund 183 — 183 12 months Deferred Gain on Sale of Utility Property – Minnesota Portion 6 93 99 213 months Total Regulatory Liabilities $ 6,196 $ 78,007 $ 84,203 Net Regulatory Asset Position $ 12,440 $ 46,926 $ 59,366 1 2 December 31, 2015 Remaining (in thousands) Current Long-Term Total Refund Period Regulatory Assets: Prior Service Costs and Actuarial Losses on Pensions and Other Postretirement Benefits 1 $ 7,439 $ 99,293 $ 106,732 see below Deferred Marked-to-Market Losses 1 4,063 10,530 14,593 60 months Conservation Improvement Program Costs and Incentives 2 4,411 4,266 8,677 18 months Accumulated ARO Accretion/Depreciation Adjustment 1 — 5,672 5,672 asset lives Big Stone II Unrecovered Project Costs – Minnesota 1 942 2,620 3,562 84 months Debt Reacquisition Premiums 1 351 1,539 1,890 201 months Deferred Income Taxes 1 — 1,455 1,455 asset lives North Dakota Renewable Resource Rider Accrued Revenues 2 — 1,266 1,266 15 months MISO Schedule 26/26A Transmission Cost Recovery Rider True-up 2 698 355 1,053 24 months Big Stone II Unrecovered Project Costs – South Dakota 2 100 643 743 89 months Minnesota Transmission Cost Recovery Rider Accrued Revenues 2 576 — 576 12 months Minnesota Deferred Rate Case Expenses Subject to Recovery 1 291 — 291 12 months Minnesota Renewable Resource Rider Accrued Revenues 2 — 68 68 see below South Dakota Transmission Cost Recovery Rider Accrued Revenues 2 33 — 33 12 months Total Regulatory Assets $ 18,904 $ 127,707 $ 146,611 Regulatory Liabilities: Accumulated Reserve for Estimated Removal Costs – Net of Salvage $ — $ 74,948 $ 74,948 asset lives Refundable Fuel Clause Adjustment Revenues 1,834 — 1,834 12 months Revenue for Rate Case Expenses Subject to Refund – Minnesota — 1,279 1,279 see below Deferred Income Taxes — 1,110 1,110 asset lives Minnesota Environmental Cost Recovery Rider Accrued Refund 777 — 777 12 months North Dakota Environmental Cost Recovery Rider Accrued Refund 321 — 321 12 months South Dakota Environmental Cost Recovery Rider Accrued Refund 185 — 185 12 months North Dakota Transmission Cost Recovery Rider Accrued Refund 132 — 132 12 months Deferred Gain on Sale of Utility Property – Minnesota Portion 5 95 100 216 months North Dakota Renewable Resource Rider Accrued Refund 68 — 68 12 months Total Regulatory Liabilities $ 3,322 $ 77,432 $ 80,754 Net Regulatory Asset Position $ 15,582 $ 50,275 $ 65,857 1 2 |
Open Contract Positions Subje27
Open Contract Positions Subject to Legally Enforceable Netting Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Open Contract Positions Subject To Legally Enforceable Netting Arrangements [Abstract] | |
Schedule of derivative asset and liability balances subject to legally enforceable netting arrangements | (in thousands) March 31, December 31, Open Contract Gain Positions Subject to Legally Enforceable Netting Arrangements $ — $ — Open Contract Loss Positions Subject to Legally Enforceable Netting Arrangements (18,264 ) (16,070 ) Net Balance Subject to Legally Enforceable Netting Arrangements $ (18,264 ) $ (16,070 ) |
Schedule of breakdown of OTP's credit risk standing on forward energy contracts in marked-to-market loss positions | Loss Position (in thousands) March 31 , 2016 December 31, Loss Contracts Covered by Deposited Funds or Letters of Credit $ 107 $ 199 Contracts Requiring Cash Deposits if OTP’s Credit Falls Below Investment Grade 1 18,157 15,871 Loss Contracts with No Ratings Triggers or Deposit Requirements — — Loss Position $ 18,264 $ 16,070 1 Contracts Requiring Cash Deposits if OTP’s Credit Falls Below Investment Grade $ 18,157 $ 15,871 Offsetting Gains with Counterparties under Master Netting Agreements — — Reporting Date Deposit Requirement if Credit Risk Feature Triggered $ 18,157 $ 15,871 |
Reconciliation of Common Shar28
Reconciliation of Common Shareholders' Equity, Common Shares and Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders Equity and Earnings Per Share [Abstract] | |
Schedule of reconciliation of common shareholders' equity | (in thousands) Par Value, Premium Retained Accumulated Total Balance, December 31, 2015 $ 189,286 $ 293,610 $ 126,025 $ (3,898 ) $ 605,023 Common Stock Issuances, Net of Expenses 1,080 4,410 5,490 Common Stock Retirements (9 ) (44 ) (53 ) Net Income 14,520 14,520 Other Comprehensive Income 140 140 Employee Stock Incentive Plans Expense 489 489 Common Dividends ($0.3125 per share) (11,889 ) (11,889 ) Balance, March 31, 2016 $ 190,357 $ 298,465 $ 128,656 $ (3,758 ) $ 613,720 |
Schedule of common shares outstanding from December 31, 2015 through March 31, 2016 | Common Shares Outstanding, December 31, 2015 37,857,186 Issuances: Executive Stock Performance Awards (2013 and 2014 shares earned) 54,700 Automatic Dividend Reinvestment and Share Purchase Plan: Dividends Reinvested 49,635 Cash Invested 49,281 Employee Stock Purchase Plan: Cash Invested 21,819 Dividends Reinvested 7,153 Employee Stock Ownership Plan 23,837 Vesting of Restricted Stock Units 9,675 Retirements: Shares Withheld for Individual Income Tax Requirements (1,868 ) Common Shares Outstanding, March 31, 2016 38,071,418 |
Schedule of reconciliation of weighted average common shares outstanding - basic to weighted average common shares outstanding - diluted | 2016 2015 Weighted Average Common Shares Outstanding – Basic 37,936,943 37,243,118 Plus Outstanding Share Awards net of Share Reductions for Unrecognized Stock-Based Compensation Expense and Excess Tax Benefits: Shares Expected to be Awarded for Stock Performance Awards Granted to Executive Officers based on Measurement Period-to-Date Performance 46,885 137,460 Underlying Shares Related to Nonvested Restricted Stock Units Granted to Employees 39,841 42,540 Nonvested Restricted Shares 17,776 49,998 Shares Expected to be Issued Under the Deferred Compensation Program for Directors 3,763 24,277 Potentially Dilutive Stock Options — 488 Total Dilutive Shares 108,265 254,763 Weighted Average Common Shares Outstanding – Diluted 38,045,208 37,497,881 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | |
Schedule of stock incentive awards granted | Award Shares/ Weighted Vesting Restricted Stock Units Granted to Executive Officers 22,000 $ 28.915 25% per year through February 6, 2020 Stock Performance Awards Granted to Executive Officers 81,500 $ 24.03 December 31, 2018 |
Schedule of compensation expense under stock-based payment programs | Three months ended March 31, (in thousands) 2016 2015 Stock Performance Awards Granted to Executive Officers $ 537 $ 1,020 Restricted Stock Units Granted to Executive Officers 245 253 Restricted Stock Granted to Executive Officers 29 157 Restricted Stock Granted to Directors 107 98 Restricted Stock Units Granted to Non-Executive Employees 64 66 Employee Stock Purchase Plan (15% discount) 44 49 Totals $ 1,026 $ 1,643 |
Short-Term and Long-Term Borr30
Short-Term and Long-Term Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of lines of credit | (in thousands) Line Limit In Use on Restricted due to Available on Available on Otter Tail Corporation Credit Agreement $ 150,000 $ 20,880 $ — $ 129,120 $ 90,334 OTP Credit Agreement 170,000 22,056 — 147,944 148,694 Total $ 320,000 $ 42,936 $ — $ 277,064 $ 239,028 |
Schedule of short-term and long-term debt outstanding | March 31, 2016 (in thousands) OTP Otter Tail Otter Tail Short-Term Debt $ 22,056 $ 20,880 $ 42,936 Long-Term Debt: 9.000% Notes, due December 15, 2016 $ 52,330 $ 52,330 Term Loan, LIBOR plus 0.90%, due February 5, 2018 50,000 50,000 Senior Unsecured Notes 5.95%, Series A, due August 20, 2017 $ 33,000 33,000 Senior Unsecured Notes 4.63%, due December 1, 2021 140,000 140,000 Senior Unsecured Notes 6.15%, Series B, due August 20, 2022 30,000 30,000 Senior Unsecured Notes 6.37%, Series C, due August 20, 2027 42,000 42,000 Senior Unsecured Notes 4.68%, Series A, due February 27, 2029 60,000 60,000 Senior Unsecured Notes 6.47%, Series D, due August 20, 2037 50,000 50,000 Senior Unsecured Notes 5.47%, Series B, due February 27, 2044 90,000 90,000 North Dakota Development Note, 3.95%, due April 1, 2018 163 163 Partnership in Assisting Community Expansion (PACE) Note, 2.54%, due March 18, 2021 944 944 Total $ 445,000 $ 103,437 $ 548,437 Less: Current Maturities net of Unamortized Debt Issuance Costs 52,457 52,457 Unamortized Long-Term Debt Issuance Costs 2,039 140 2,179 Total Long-Term Debt net of Unamortized Debt Issuance Costs $ 442,961 $ 50,840 $ 493,801 Total Short-Term and Long-Term Debt (with current maturities) $ 465,017 $ 124,177 $ 589,194 December 31, 2015 (in thousands) OTP Otter Tail Otter Tail Short-Term Debt $ 21,006 $ 59,666 $ 80,672 Long-Term Debt: 9.000% Notes, due December 15, 2016 $ 52,330 $ 52,330 Senior Unsecured Notes 5.95%, Series A, due August 20, 2017 $ 33,000 33,000 Senior Unsecured Notes 4.63%, due December 1, 2021 140,000 140,000 Senior Unsecured Notes 6.15%, Series B, due August 20, 2022 30,000 30,000 Senior Unsecured Notes 6.37%, Series C, due August 20, 2027 42,000 42,000 Senior Unsecured Notes 4.68%, Series A, due February 27, 2029 60,000 60,000 Senior Unsecured Notes 6.47%, Series D, due August 20, 2037 50,000 50,000 Senior Unsecured Notes 5.47%, Series B, due February 27, 2044 90,000 90,000 North Dakota Development Note, 3.95%, due April 1, 2018 182 182 Partnership in Assisting Community Expansion (PACE) Note, 2.54%, due March 18, 2021 977 977 Total $ 445,000 $ 53,489 $ 498,489 Less: Current Maturities net of Unamortized Debt Issuance Costs 52,422 52,422 Unamortized Long-Term Debt Issuance Costs 2,099 122 2,221 Total Long-Term Debt net of Unamortized Debt Issuance Costs $ 442,901 $ 945 $ 443,846 Total Short-Term and Long-Term Debt (with current maturities) $ 463,907 $ 113,033 $ 576,940 |
Pension Plan and Other Postre31
Pension Plan and Other Postretirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Pension Plan | |
Schedule of components of net periodic postretirement benefit cost | Three Months Ended March 31, (in thousands) 2016 2015 Service Cost—Benefit Earned During the Period $ 1,382 $ 1,500 Interest Cost on Projected Benefit Obligation 3,522 3,325 Expected Return on Assets (4,867 ) (4,600 ) Amortization of Prior-Service Cost: From Regulatory Asset 47 47 From Other Comprehensive Income 1 1 1 Amortization of Net Actuarial Loss: From Regulatory Asset 1,227 1,633 From Other Comprehensive Income 1 31 40 Net Periodic Pension Cost $ 1,343 $ 1,946 1 |
Executive Survivor and Supplemental Retirement Plan | |
Schedule of components of net periodic postretirement benefit cost | Three Months Ended March 31, (in thousands) 2016 2015 Service Cost—Benefit Earned During the Period $ 63 $ 47 Interest Cost on Projected Benefit Obligation 417 381 Amortization of Prior-Service Cost: From Regulatory Asset 4 4 From Other Comprehensive Income 1 9 10 Amortization of Net Actuarial Loss: From Regulatory Asset 73 83 From Other Comprehensive Income 2 112 151 Net Periodic Pension Cost $ 678 $ 676 1 Electric Operation and Maintenance Expenses $ 4 $ 4 Other Nonelectric Expenses 5 6 2 Electric Operation and Maintenance Expenses $ 68 $ 78 Other Nonelectric Expenses 44 73 |
Postretirement Benefits | |
Schedule of components of net periodic postretirement benefit cost | Three Months Ended March 31, (in thousands) 2016 2015 Service Cost—Benefit Earned During the Period $ 306 $ 375 Interest Cost on Projected Benefit Obligation 541 550 Amortization of Prior-Service Cost: From Regulatory Asset 33 51 From Other Comprehensive Income 1 1 1 Amortization of Net Actuarial Loss: From Regulatory Asset — 48 From Other Comprehensive Income 1 — 1 Net Periodic Postretirement Benefit Cost $ 881 $ 1,026 Effect of Medicare Part D Subsidy $ (257 ) $ (450 ) 1 |
Fair Value of Financial Instr32
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of long-term debt including current maturities | March 31, 2016 December 31, 2015 (in thousands) Carrying Fair Value Carrying Fair Value Short-Term Debt (42,936 ) (42,936 ) (80,672 ) (80,672 ) Long-Term Debt including Current Maturities (546,258 ) (623,484 ) (496,268 ) (561,245 ) |
Income Tax Expense - Continuing
Income Tax Expense - Continuing Operations (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of income from continuing operations before income taxes and income tax expense | Three Months Ended March 31, (in thousands) 2016 2015 Income Before Income Taxes – Continuing Operations $ 19,982 $ 17,854 Tax Computed at Company’s Net Composite Federal and State Statutory Rate (39%) 7,793 6,963 Increases (Decreases) in Tax from: Federal Production Tax Credits (1,686 ) (2,054 ) North Dakota Wind Tax Credit Amortization – Net of Federal Taxes (212 ) (212 ) Section 199 Domestic Production Activities Deduction (104 ) (362 ) Employee Stock Ownership Plan Dividend Deduction (158 ) (172 ) Corporate Owned Life Insurance (64 ) (80 ) AFUDC Equity (37 ) (100 ) Other Items – Net (40 ) 90 Income Tax Expense – Continuing Operations $ 5,492 $ 4,073 Effective Income Tax Rate – Continuing Operations 27.5 % 22.8 % |
Schedule of activity related to unrecognized tax benefits | (in thousands) 2016 2015 Balance on January 1 $ 468 $ 222 Increases Related to Tax Positions for Prior Years — — Increases Related to Tax Positions for Current Year 16 44 Uncertain Positions Resolved During Year — — Balance on March 31 $ 484 $ 266 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Income and Gains and Losses from Disposition of Discontinued Operations and Schedule of Major Components of Assets and Liabilities of Discontinued Operations | (in thousands) 2016 2015 Operating Revenues $ — $ 18,724 Operating Expenses (50 ) 22,141 Goodwill Impairment Charge — 1,000 Operating Income (Loss) 50 (4,417 ) Other Deductions — (31 ) Income Tax Expense (Benefit) 20 (1,376 ) Net Income (Loss) from Operations 30 (3,072 ) Gain on Disposition Before Taxes — 12,042 Income Tax Expense on Disposition — 4,816 Net Gain on Disposition — 7,226 Net Income $ 30 $ 4,154 (in thousands) March 31, December 31, Current Liabilities $ 2,098 $ 2,098 Liabilities of Discontinued Operations $ 2,098 $ 2,098 |
Schedule of warranty reserves | (in thousands) 2016 2015 Warranty Reserve Balance, January 1 $ 2,103 $ 2,527 Additional Provision for Warranties Made During the Year — — Settlements Made During the Year — (6 ) Decrease in Warranty Estimates for Prior Years — — Warranty Reserve Balance, March 31 $ 2,103 $ 2,521 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Assets and liabilities measured at fair value on recurring basis (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Liabilities: | ||
Derivative Liabilities | $ 107,000 | $ 199,000 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Total Assets | 2,293,000 | 2,196,000 |
Fair Value, Measurements, Recurring | Level 1 | Money Market Deposit Escrow | ||
Assets: | ||
Money Market Escrow Accounts - AEV, Inc. and Foley Company Sales | 2,000,000 | 2,000,000 |
Fair Value, Measurements, Recurring | Level 1 | Money Market and Mutual Funds | ||
Assets: | ||
Other Assets - Nonqualified Retirement Savings Plan | 293,000 | 196,000 |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Total Assets | 8,218,000 | 8,093,000 |
Liabilities: | ||
Total Liabilities | 107,000 | 199,000 |
Fair Value, Measurements, Recurring | Level 2 | Government-Backed and Government-Sponsored Enterprises' Debt Securities | ||
Assets: | ||
Investments - Held by Captive Insurance Company | 4,315,000 | 4,235,000 |
Fair Value, Measurements, Recurring | Level 2 | Corporate Debt Securities | ||
Assets: | ||
Investments - Held by Captive Insurance Company | 3,903,000 | 3,858,000 |
Fair Value, Measurements, Recurring | Level 2 | Forward Gasoline Purchase Contracts | ||
Liabilities: | ||
Derivative Liabilities | $ 107,000 | $ 199,000 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Inventories (Details 1) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Finished Goods | $ 26,440 | $ 25,971 |
Work in Process | 12,110 | 12,821 |
Raw Material, Fuel and Supplies | 46,860 | 46,624 |
Total Inventories | $ 85,410 | $ 85,416 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Summary of changes to goodwill by business segment (Details 2) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Goodwill [Roll Forward] | |
Gross Balance December 31, 2015 | $ 39,732 |
Accumulated Impairments | |
Balance (net of impairments) December 31, 2015 | $ 39,732 |
Adjustments to Goodwill in 2016 | |
Balance (net of impairments) March 31, 2016 | $ 39,732 |
Manufacturing | |
Goodwill [Roll Forward] | |
Gross Balance December 31, 2015 | $ 20,430 |
Accumulated Impairments | |
Balance (net of impairments) December 31, 2015 | $ 20,430 |
Adjustments to Goodwill in 2016 | |
Balance (net of impairments) March 31, 2016 | $ 20,430 |
Plastics | |
Goodwill [Roll Forward] | |
Gross Balance December 31, 2015 | $ 19,302 |
Accumulated Impairments | |
Balance (net of impairments) December 31, 2015 | $ 19,302 |
Adjustments to Goodwill in 2016 | |
Balance (net of impairments) March 31, 2016 | $ 19,302 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Components of intangible assets (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Amortizable Intangible Assets: | ||
Gross Carrying Amount | $ 22,949 | $ 22,999 |
Accumulated Amortization | 7,683 | 7,326 |
Net Carrying Amount | 15,266 | 15,673 |
Customer Relationships | ||
Amortizable Intangible Assets: | ||
Gross Carrying Amount | 21,681 | 21,681 |
Accumulated Amortization | 6,987 | 6,714 |
Net Carrying Amount | $ 14,694 | $ 14,967 |
Customer Relationships | Minimum | ||
Amortizable Intangible Assets: | ||
Remaining Amortization Periods | 45 months | 48 months |
Customer Relationships | Maximum | ||
Amortizable Intangible Assets: | ||
Remaining Amortization Periods | 233 months | 236 months |
Covenant not to Compete | ||
Amortizable Intangible Assets: | ||
Gross Carrying Amount | $ 620 | $ 620 |
Accumulated Amortization | 121 | 69 |
Net Carrying Amount | $ 499 | $ 551 |
Remaining Amortization Periods | 29 months | 32 months |
Other Intangible Assets Including Contracts | ||
Amortizable Intangible Assets: | ||
Gross Carrying Amount | $ 639 | $ 639 |
Accumulated Amortization | 575 | 543 |
Net Carrying Amount | $ 64 | $ 96 |
Remaining Amortization Periods | 6 months | 9 months |
Emission Allowances | ||
Amortizable Intangible Assets: | ||
Gross Carrying Amount | $ 9 | $ 59 |
Net Carrying Amount | $ 9 | $ 59 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Amortization expense for intangible assets (Details 4) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accounting Policies [Abstract] | ||
Amortization Expense - Intangible Assets | $ 357 | $ 244 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Estimated amortization expense for intangible assets (Details 5) $ in Thousands | Mar. 31, 2016USD ($) |
Accounting Policies [Abstract] | |
2,016 | $ 1,395 |
2,017 | 1,299 |
2,018 | 1,230 |
2,019 | 1,093 |
2,020 | $ 1,059 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Supplemental disclosure of cash flow information (Details 6) - USD ($) $ in Thousands | Mar. 31, 2016 | Mar. 31, 2015 |
Noncash Investing Activities: | ||
Transactions Related to Capital Additions not Settled in Cash | $ 24,618 | $ 25,284 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Effect of applying the guidance in ASU 2015-17 retrospectively to consolidated balance sheet (Details 7) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Other Assets | $ 33,014 | $ 32,784 |
Unamortized Debt Expense | ||
Total Assets | 1,833,357 | $ 1,818,683 |
Current Liabilities | ||
Current Maturities of Long-Term Debt | 52,457 | 52,422 |
Total Current Liabilities | 232,895 | 271,116 |
Capitalization | ||
Long-Term Debt - Net | 493,801 | 443,846 |
Total Capitalization | 1,107,521 | 1,048,869 |
Total Liabilities and Equity | $ 1,833,357 | 1,818,683 |
Previously Stated | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Other Assets | 31,108 | |
Unamortized Debt Expense | 3,897 | |
Total Assets | 1,820,904 | |
Current Liabilities | ||
Current Maturities of Long-Term Debt | 52,544 | |
Total Current Liabilities | 271,238 | |
Capitalization | ||
Long-Term Debt - Net | 445,945 | |
Total Capitalization | 1,050,968 | |
Total Liabilities and Equity | 1,820,904 | |
Adjustments | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Other Assets | 1,676 | |
Unamortized Debt Expense | (3,897) | |
Total Assets | (2,221) | |
Current Liabilities | ||
Current Maturities of Long-Term Debt | (122) | |
Total Current Liabilities | (122) | |
Capitalization | ||
Long-Term Debt - Net | (2,099) | |
Total Capitalization | (2,099) | |
Total Liabilities and Equity | $ (2,221) |
Summary of Significant Accoun43
Summary of Significant Accounting Policies (Detail Textuals) | 3 Months Ended |
Mar. 31, 2016 | |
Minimum | |
Significant Accounting Policies [Line Items] | |
Product warranty period (in years) | 1 year |
Maximum | |
Significant Accounting Policies [Line Items] | |
Product warranty period (in years) | 15 years |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Detail Textuals 1) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Significant Accounting Policies [Line Items] | |
Acquired goodwill | $ 8,244,000 |
Coyote Creek Mining Company, L.L.C. (CCMC) | Lignite Sales Agreement | Otter Tail Power Company | |
Significant Accounting Policies [Line Items] | |
Amortization period | 52 months |
Percentage of development period costs, development fees and capital charge incurred by CCMC | 35.00% |
Amount of development period costs, development fees and capital charges incurred by CCMC | $ 60,300,000 |
Maximum exposure to loss as a result of involvement with CCMC | $ 60,300,000 |
Business Combinations and Seg45
Business Combinations and Segment Information - Summary of major asset and liability category of BTD Georgia (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 01, 2015 |
Assets: | |||
Goodwill | $ 39,732 | $ 39,732 | |
BTD-Georgia | |||
Assets: | |||
Current Assets | $ 4,906 | ||
Goodwill | 8,244 | ||
Other Intangible Assets | 5,490 | ||
Other Amortizable Assets | 1,380 | ||
Fixed Assets | 13,649 | ||
Total Assets | 33,669 | ||
Liabilities: | |||
Current Liabilities | 2,852 | ||
Lease Obligation | 11 | ||
Total Liabilities | 2,863 | ||
Cash Paid | $ 30,806 |
Business Combinations and Seg46
Business Combinations and Segment Information - Information on continuing operations for business segments (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Operating Revenue | $ 206,242 | $ 202,841 |
Interest Charges | 7,994 | 7,743 |
Income Taxes | 5,492 | 4,073 |
Net Income (Loss) | 14,520 | 17,935 |
Intersegment Eliminations | ||
Segment Reporting Information [Line Items] | ||
Operating Revenue | (9) | (17) |
Corporate and Intersegment Eliminations | ||
Segment Reporting Information [Line Items] | ||
Interest Charges | 474 | 544 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Income Taxes | (1,506) | (1,916) |
Net Income (Loss) | (2,053) | (2,701) |
Discontinued Operations | ||
Segment Reporting Information [Line Items] | ||
Net Income (Loss) | 30 | 4,154 |
Electric | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Operating Revenue | 112,994 | 113,547 |
Interest Charges | 6,284 | 6,121 |
Income Taxes | 4,612 | 4,221 |
Net Income (Loss) | 12,538 | 13,178 |
Manufacturing | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Operating Revenue | 59,820 | 56,759 |
Interest Charges | 992 | 832 |
Income Taxes | 1,019 | 504 |
Net Income (Loss) | 1,853 | 1,184 |
Plastics | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Operating Revenue | 33,437 | 32,552 |
Interest Charges | 244 | 246 |
Income Taxes | 1,367 | 1,264 |
Net Income (Loss) | $ 2,152 | $ 2,120 |
Business Combinations and Seg47
Business Combinations and Segment Information - Total assets by business segment (Details 2) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Segment Reporting Information [Line Items] | ||
Assets | $ 1,833,357 | $ 1,818,683 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Assets | 38,378 | 42,312 |
Electric | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 1,528,157 | 1,520,887 |
Manufacturing | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | 179,745 | 173,860 |
Plastics | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 87,077 | $ 81,624 |
Business Combinations and Seg48
Business Combinations and Segment Information (Detail Textuals) - USD ($) $ in Millions | Sep. 01, 2015 | Mar. 31, 2016 | Mar. 31, 2015 |
Operating revenues | UNITED STATES | |||
Business Acquisition [Line Items] | |||
Operating revenues, percentage | 97.60% | 96.30% | |
BTD-Georgia | |||
Business Acquisition [Line Items] | |||
Cash | $ 30.8 |
Business Combinations and Seg49
Business Combinations and Segment Information (Detail Textuals 1) | 3 Months Ended |
Mar. 31, 2016Segment | |
Acquisition And Segment Information [Abstract] | |
Number of reportable segments | 3 |
Rate and Regulatory Matters - S
Rate and Regulatory Matters - Summary of revenues recorded under rate riders (Details 1) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Regulatory Matters [Line Items] | |||
Revenues recorded under rate riders | $ 206,242 | $ 202,841 | |
Otter Tail Power Company | Minnesota | Conservation Improvement Program Costs and Incentives | |||
Regulatory Matters [Line Items] | |||
Revenues recorded under rate riders | [1] | 2,506 | 1,928 |
Otter Tail Power Company | Minnesota | Transmission Cost Recovery Rider | |||
Regulatory Matters [Line Items] | |||
Revenues recorded under rate riders | 2,276 | 1,615 | |
Otter Tail Power Company | Minnesota | Environmental Cost Recovery Rider | |||
Regulatory Matters [Line Items] | |||
Revenues recorded under rate riders | 3,082 | 2,557 | |
Otter Tail Power Company | North Dakota | Renewable Resource Adjustment | |||
Regulatory Matters [Line Items] | |||
Revenues recorded under rate riders | 2,059 | 1,883 | |
Otter Tail Power Company | North Dakota | Transmission Cost Recovery Rider | |||
Regulatory Matters [Line Items] | |||
Revenues recorded under rate riders | 2,236 | 1,936 | |
Otter Tail Power Company | North Dakota | Environmental Cost Recovery Rider | |||
Regulatory Matters [Line Items] | |||
Revenues recorded under rate riders | 2,811 | 2,156 | |
Otter Tail Power Company | South Dakota | Conservation Improvement Program Costs and Incentives | |||
Regulatory Matters [Line Items] | |||
Revenues recorded under rate riders | 159 | 140 | |
Otter Tail Power Company | South Dakota | Transmission Cost Recovery Rider | |||
Regulatory Matters [Line Items] | |||
Revenues recorded under rate riders | 651 | 363 | |
Otter Tail Power Company | South Dakota | Environmental Cost Recovery Rider | |||
Regulatory Matters [Line Items] | |||
Revenues recorded under rate riders | $ 633 | $ 504 | |
[1] | Includes MNCIP costs recovered in base rates. |
Rate and Regulatory Matters (De
Rate and Regulatory Matters (Detail Textuals) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016USD ($)kVsmi | Dec. 31, 2011kVsmi | |
Otter Tail Power Company | Big Stone South - Brookings MVP | ||
Regulatory Matters [Line Items] | ||
Project costs incurred to date | $ 29.6 | |
Percentage of assets of project | 100.00% | |
Expanded capacity of projects | kVs | 345 | |
Extended distance of transmission line | mi | 70 | |
Otter Tail Power Company | Big Stone South - Ellendale MVP | Minimum | ||
Regulatory Matters [Line Items] | ||
Extended distance of transmission line | mi | 160 | |
Otter Tail Power Company | Big Stone South - Ellendale MVP | Maximum | ||
Regulatory Matters [Line Items] | ||
Extended distance of transmission line | mi | 170 | |
Otter Tail Power Company | Big Stone South - Ellendale MVP | Federal Energy Regulatory Commission | ||
Regulatory Matters [Line Items] | ||
Project costs incurred to date | $ 20 | |
Percentage of assets of project | 100.00% | |
Expanded capacity of projects | kVs | 345 | |
Big Stone AQCS Project BART - compliant AQCS | ||
Regulatory Matters [Line Items] | ||
Project costs incurred to date | $ 368 | |
Big Stone AQCS Project BART - compliant AQCS | Otter Tail Power Company | ||
Regulatory Matters [Line Items] | ||
Project costs incurred to date | $ 198 | |
Percentage of projected cost | 53.90% | |
Capacity Expansion 2020 | Otter Tail Power Company | Brookings Project | ||
Regulatory Matters [Line Items] | ||
Investment to acquire ownership interest | $ 26.7 | |
Percentage of ownership interest acquired in transmission line | 4.80% | |
Distance of transmission line | mi | 250 | |
Capacity Expansion 2020 | Otter Tail Power Company | Fargo-Monticello Project | ||
Regulatory Matters [Line Items] | ||
Investment to acquire ownership interest | $ 81.8 | |
Percentage of ownership interest acquired in transmission line | 14.20% | |
Distance of transmission line | mi | 240 | |
Percentage of assets of project | 100.00% |
Rate and Regulatory Matters (52
Rate and Regulatory Matters (Detail Textuals 1) - Otter Tail Power Company - Minnesota Public Utilities Commission - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Feb. 16, 2016 | Dec. 21, 2015 | Sep. 30, 2015 | Apr. 25, 2011 | Dec. 31, 2015 | Apr. 14, 2016 | Jul. 09, 2015 | |
Conservation Improvement Program | |||||||
Regulatory Matters [Line Items] | |||||||
Financial incentives recognized during period | $ 4,200,000 | ||||||
Percentage Increase In Energy Savings | 39.00% | ||||||
Conservation Improvement Program | Fiscal Year 2014 | |||||||
Regulatory Matters [Line Items] | |||||||
Financial incentive request approved | $ 3,000,000 | ||||||
Transmission Cost Recovery Rider | |||||||
Regulatory Matters [Line Items] | |||||||
Seeking revenue recovery | $ 7,200,000 | $ 7,800,000 | |||||
2010 General Rate Case | |||||||
Regulatory Matters [Line Items] | |||||||
General rate revenue increase requested | $ 5,000,000 | ||||||
Percentage of increase in base rate revenue requested | 1.60% | ||||||
Public Utilities Allowed Rate Of Return On Rate Base | 8.07% | ||||||
Public Utilities Allowed Rate Of Return On Equity Increase In Base Rate | 10.40% | ||||||
Percentage Of Capital | 52.50% | ||||||
Public utilities allowed rate of return on rate base prior to approval of increase in base rate | 8.33% | ||||||
Public utilities allowed rate of return on rate base subsequent to approval of increase in base rate | 8.61% | ||||||
Public utilities allowed rate of return on equity prior to approval of increase in base rate | 10.43% | ||||||
Public utilities allowed rate of return on equity subsequent to approval of increase in base rate | 10.74% | ||||||
2016 General Rate Case | |||||||
Regulatory Matters [Line Items] | |||||||
General rate revenue increase requested | $ 19,300 | ||||||
Percentage of increase in base rate revenue requested | 9.80% | ||||||
Annualized interim rate increase | $ 16,800,000 | ||||||
Increase to base rate portion of customer bills | 9.56% |
Rate and Regulatory Matters (53
Rate and Regulatory Matters (Detail Textuals 2) - Otter Tail Power Company - North Dakota Public Service Commission - USD ($) $ in Millions | Jul. 01, 2015 | Aug. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Nov. 25, 2009 |
Transmission Cost Recovery Rider | |||||
Regulatory Matters [Line Items] | |||||
Jurisdictional capital and operating costs recovery | $ 8.5 | ||||
Transmission Cost Recovery Rider | Fiscal Year 2016 | |||||
Regulatory Matters [Line Items] | |||||
Jurisdictional capital and operating costs recovery | $ 10.2 | ||||
Environmental Cost Recovery Rider | |||||
Regulatory Matters [Line Items] | |||||
Percentage of ECR rider rate | 9.193% | 7.904% | 7.531% | ||
Revenue requirement | $ 12.2 | $ 10.4 | |||
2010 General Rate Case | |||||
Regulatory Matters [Line Items] | |||||
Revenue increase approved by rate authority | $ 3.6 | ||||
Percentage of increase in base rate revenue requested | 3.00% | ||||
Percentage of allowed rate of return on rate base | 8.62% | ||||
Percentage of allowed rate of return on equity | 10.75% |
Rate and Regulatory Matters (54
Rate and Regulatory Matters (Detail Textuals 3) - USD ($) | Feb. 12, 2015 | Nov. 06, 2014 | Nov. 12, 2013 | Dec. 22, 2015 | Aug. 31, 2015 | Apr. 21, 2011 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Jan. 01, 2012 |
Regulatory Matters [Line Items] | ||||||||||
Regulatory Liabilities | $ 84,203,000 | $ 80,754,000 | ||||||||
Otter Tail Power Company | South Dakota Public Utilities Commission | Environmental Cost Recovery Rider | ||||||||||
Regulatory Matters [Line Items] | ||||||||||
Annual revenue requesting recovery | $ 2,700,000 | |||||||||
Otter Tail Power Company | South Dakota Public Utilities Commission | 2010 General Rate Case | ||||||||||
Regulatory Matters [Line Items] | ||||||||||
Revenue increase approved by rate authority | $ 643,000 | |||||||||
Percentage of increase in base rate revenue requested | 2.32% | |||||||||
Otter Tail Power Company | South Dakota Public Utilities Commission | 2010 General Rate Case | Big Stone II Cost Recovery | ||||||||||
Regulatory Matters [Line Items] | ||||||||||
Public utilities allowed rate of return on rate base subsequent to approval of increase in base rate | 8.50% | |||||||||
Otter Tail Power Company | Federal Energy Regulatory Commission | ||||||||||
Regulatory Matters [Line Items] | ||||||||||
Percentage of prudently incurred costs of construction work in progress, authorized for recovery by formula transmission rate | 100.00% | |||||||||
Current return on equity used in transmission rates | 12.38% | 10.32% | ||||||||
Proposed reduced return on equity used in transmission rates | 8.67% | 9.15% | ||||||||
Additional Incentive Basis Point | 50-basis points | |||||||||
Reductions in revenue | 300,000 | $ 600,000 | ||||||||
Estimated liability of refund obligation | 1,400,000 | |||||||||
Regulatory Liabilities | $ 1,400,000 |
Regulatory Assets and Liabili55
Regulatory Assets and Liabilities - Amount of regulatory assets and liabilities recorded on consolidated balance sheet (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2015 | |||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | $ 18,636 | $ 18,904 | ||
Regulatory Liability - Current | 6,196 | 3,322 | ||
Net Regulatory Assets Position - Current | 12,440 | 15,582 | ||
Regulatory Assets - Long-Term | 124,933 | 127,707 | ||
Regulatory Liabilities - Long-Term | 78,007 | 77,432 | ||
Net Regulatory Asset Position - Long-Term | 46,926 | 50,275 | ||
Regulatory Assets - Total | 143,569 | 146,611 | ||
Regulatory Liabilities - Total | 84,203 | 80,754 | ||
Net Regulatory Asset Position - Total | 59,366 | 65,857 | ||
Prior Service Costs and Actuarial Losses on Pensions and Other Postretirement Benefits | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | [1] | 7,439 | 7,439 | |
Regulatory Assets - Long-Term | [1] | 97,908 | 99,293 | |
Regulatory Assets - Total | [1] | $ 105,347 | $ 106,732 | |
Regulatory Assets - Remaining Recovery/Refund Period | [1] | see below | see below | |
Deferred Marked-to-Market Loss | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | $ 4,063 | [1] | $ 4,063 | |
Regulatory Assets - Long-Term | 9,515 | [1] | 10,530 | |
Regulatory Assets - Total | $ 13,578 | [1] | $ 14,593 | |
Regulatory Assets - Remaining Recovery/Refund Period | 57 months | [1] | 60 months | |
Conservation Improvement Program Costs and Incentives | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | [2] | $ 2,789 | $ 4,411 | |
Regulatory Assets - Long-Term | [2] | 5,065 | 4,266 | |
Regulatory Assets - Total | [2] | $ 7,854 | $ 8,677 | |
Regulatory Assets - Remaining Recovery/Refund Period | [2] | 27 months | 18 months | |
Accumulated ARO Accretion/Depreciation Adjustment | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | [1] | |||
Regulatory Assets - Long-Term | [1] | $ 5,791 | $ 5,672 | |
Regulatory Assets - Total | [1] | $ 5,791 | $ 5,672 | |
Regulatory Assets - Remaining Recovery/Refund Period | [1] | asset lives | asset lives | |
Big Stone II Unrecovered Project Costs - Minnesota | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | [1] | $ 826 | $ 942 | |
Regulatory Assets - Long-Term | [1] | 2,634 | 2,620 | |
Regulatory Assets - Total | [1] | $ 3,460 | $ 3,562 | |
Regulatory Assets - Remaining Recovery/Refund Period | [1] | 60 months | 84 months | |
Minnesota Transmission Cost Recovery Rider Accrued Revenues | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | [2] | $ 576 | ||
Regulatory Assets - Long-Term | [2] | |||
Regulatory Assets - Total | [2] | $ 576 | ||
Regulatory Assets - Remaining Recovery/Refund Period | [2] | 12 months | ||
North Dakota Renewable Resource Rider Accrued Revenues | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | [2] | $ 1,501 | ||
Regulatory Assets - Long-Term | [2] | 305 | $ 1,266 | |
Regulatory Assets - Total | [2] | $ 1,806 | $ 1,266 | |
Regulatory Assets - Remaining Recovery/Refund Period | [2] | 21 months | 15 months | |
Debt Reacquisition Premiums | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | [1] | $ 351 | $ 351 | |
Regulatory Assets - Long-Term | [1] | 1,451 | 1,539 | |
Regulatory Assets - Total | [1] | $ 1,802 | $ 1,890 | |
Regulatory Assets - Remaining Recovery/Refund Period | [1] | 198 months | 201 months | |
Deferred Income Taxes | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | [1] | |||
Regulatory Liability - Current | ||||
Regulatory Assets - Long-Term | [1] | $ 1,351 | $ 1,455 | |
Regulatory Liabilities - Long-Term | 1,043 | 1,110 | ||
Regulatory Assets - Total | [1] | 1,351 | 1,455 | |
Regulatory Liabilities - Total | $ 1,043 | $ 1,110 | ||
Regulatory Assets - Remaining Recovery/Refund Period | [1] | asset lives | asset lives | |
Regulatory Liabilities - Remaining Recovery/Refund Period | asset lives | asset lives | ||
MISO Schedule 26/26A Transmission Cost Recovery Rider True-up | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | [2] | $ 763 | $ 698 | |
Regulatory Assets - Long-Term | [2] | 227 | 355 | |
Regulatory Assets - Total | [2] | $ 990 | $ 1,053 | |
Regulatory Assets - Remaining Recovery/Refund Period | [2] | 24 months | 24 months | |
Big Stone II Unrecovered Project Costs - South Dakota | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | [2] | $ 100 | $ 100 | |
Regulatory Assets - Long-Term | [2] | 618 | 643 | |
Regulatory Assets - Total | [2] | $ 718 | $ 743 | |
Regulatory Assets - Remaining Recovery/Refund Period | [2] | 86 months | 89 months | |
Minnesota Environmental Cost Recovery Rider Accrued Refund | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Liability - Current | $ 982 | $ 777 | ||
Regulatory Liabilities - Long-Term | ||||
Regulatory Liabilities - Total | $ 982 | $ 777 | ||
Regulatory Liabilities - Remaining Recovery/Refund Period | 12 months | 12 months | ||
Minnesota Renewable Resource Rider Accrued Revenues | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | [2] | |||
Regulatory Assets - Long-Term | [2] | $ 68 | $ 68 | |
Regulatory Assets - Total | [2] | $ 68 | $ 68 | |
Regulatory Assets - Remaining Recovery/Refund Period | [2] | see below | ||
Regulatory Assets - Remaining Recovery/Refund Period | [2] | 12 months | ||
Accumulated Reserve for Estimated Removal Costs - Net of Salvage | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Liability - Current | ||||
Regulatory Liabilities - Long-Term | $ 75,468 | $ 74,948 | ||
Regulatory Liabilities - Total | $ 75,468 | $ 74,948 | ||
Regulatory Liabilities - Remaining Recovery/Refund Period | asset lives | asset lives | ||
North Dakota Renewable Resource Rider Accrued Refund | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Liability - Current | $ 68 | |||
Regulatory Liabilities - Long-Term | ||||
Regulatory Liabilities - Total | $ 68 | |||
Regulatory Liabilities - Remaining Recovery/Refund Period | 12 months | |||
Revenue for Rate Case expenses Subject to Refund - Minnesota | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Liability - Current | ||||
Regulatory Liabilities - Long-Term | $ 1,403 | $ 1,279 | ||
Regulatory Liabilities - Total | $ 1,403 | $ 1,279 | ||
Regulatory Liabilities - Remaining Recovery/Refund Period | see below | |||
Regulatory Liabilities - Remaining Recovery/Refund Period | 24 months | |||
Deferred Gain on Sale of Utility Property - Minnesota Portion | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Liability - Current | $ 6 | $ 5 | ||
Regulatory Liabilities - Long-Term | 93 | 95 | ||
Regulatory Liabilities - Total | $ 99 | $ 100 | ||
Regulatory Liabilities - Remaining Recovery/Refund Period | 213 months | 216 months | ||
South Dakota Environmental Cost Recovery Rider Accrued Refund | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Liability - Current | $ 342 | $ 185 | ||
Regulatory Liabilities - Long-Term | ||||
Regulatory Liabilities - Total | $ 342 | $ 185 | ||
Regulatory Liabilities - Remaining Recovery/Refund Period | 12 months | 12 months | ||
Minnesota Deferred Rate Case Expenses Subject to Recovery | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | [1] | $ 559 | $ 291 | |
Regulatory Assets - Long-Term | [1] | |||
Regulatory Assets - Total | [1] | $ 559 | $ 291 | |
Regulatory Assets - Remaining Recovery/Refund Period | [1] | 12 months | 12 months | |
South Dakota Transmission Cost Recovery Rider Revenues | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Asset - Current | [2] | $ 245 | $ 33 | |
Regulatory Assets - Long-Term | [2] | |||
Regulatory Assets - Total | [2] | $ 245 | $ 33 | |
Regulatory Assets - Remaining Recovery/Refund Period | [2] | 12 months | 12 months | |
Refundable Fuel Clause Adjustment Revenues | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Liability - Current | $ 3,294 | $ 1,834 | ||
Regulatory Liabilities - Long-Term | ||||
Regulatory Liabilities - Total | $ 3,294 | $ 1,834 | ||
Regulatory Liabilities - Remaining Recovery/Refund Period | 12 months | 12 months | ||
North Dakota Transmission Cost Recovery Rider Accrued Refund | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Liability - Current | $ 602 | $ 132 | ||
Regulatory Liabilities - Long-Term | ||||
Regulatory Liabilities - Total | $ 602 | $ 132 | ||
Regulatory Liabilities - Remaining Recovery/Refund Period | 12 months | 12 months | ||
North Dakota Environmental Cost Recovery Rider Accrued Refund | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Liability - Current | $ 787 | $ 321 | ||
Regulatory Liabilities - Long-Term | ||||
Regulatory Liabilities - Total | $ 787 | $ 321 | ||
Regulatory Liabilities - Remaining Recovery/Refund Period | 12 months | 12 months | ||
Minnesota Transmission Cost Recovery Rider Accrued Refund | ||||
Schedule of Regulatory Assets and Liabilities [Line Items] | ||||
Regulatory Liability - Current | $ 183 | |||
Regulatory Liabilities - Long-Term | ||||
Regulatory Liabilities - Total | $ 183 | |||
Regulatory Liabilities - Remaining Recovery/Refund Period | 12 months | |||
[1] | Costs subject to recovery without a rate of return. | |||
[2] | Amount eligible for recovery under an alternative revenue program which includes an incentive or rate of return. |
Regulatory Assets and Liabili56
Regulatory Assets and Liabilities (Detail Textuals) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Reacquisition Premiums | |
Schedule of Regulatory Assets and Liabilities [Line Items] | |
Regulatory assets - long term, remaining recovery/refund period | 198 months |
Open Contract Positions Subje57
Open Contract Positions Subject to Legally Enforceable Netting Arrangements - Amount of derivative asset and derivative liability balances subject to legally enforceable netting arrangements (Details) - Legally enforceable netting arrangements - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Open Contract Gain Positions Subject to Legally Enforceable Netting Arrangements | ||
Open Contract Loss Positions Subject to Legally Enforceable Netting Arrangements | $ (18,264) | $ (16,070) |
Net Balance Subject to Legally Enforceable Netting Arrangements | $ (18,264) | $ (16,070) |
Open Contract Positions Subje58
Open Contract Positions Subject to Legally Enforceable Netting Arrangements - Breakdown of OTP's credit risk standing on forward energy contracts in marked-to-market loss positions (Details 4) - Otter Tail Power Company - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | |
Current Liability - Marked-to-Market Loss (in thousands) | |||
Loss Contracts Covered by Deposited Funds or Letters of Credit | $ 107 | $ 199 | |
Contracts Requiring Cash Deposits if OTP's Credit Falls Below Investment Grade | [1] | $ 18,157 | $ 15,871 |
Loss Contracts with No Ratings Triggers or Deposit Requirements | |||
Loss Position | $ 18,264 | $ 16,070 | |
[1] | Certain OTP derivative energy contracts contain provisions that require an investment grade credit rating from each of the major credit rating agencies on OTP's debt. If OTP's debt ratings were to fall below investment grade, the counterparties to these forward energy contracts could request the immediate deposit of cash to cover contracts in net liability positions. Contracts Requiring Cash Deposits if OTP's Credit Falls Below Investment Grade $ 18,157 $ 15,871 Offsetting Gains with Counterparties under Master Netting Agreements -- -- Reporting Date Deposit Requirement if Credit Risk Feature Triggered $ 18,157 $ 15,871 |
Open Contract Positions Subje59
Open Contract Positions Subject to Legally Enforceable Netting Arrangements - Breakdown of OTP's credit risk standing on forward energy contracts in marked-to-market loss positions (Parenthetical) (Details 1) - Otter Tail Power Company - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | |
Credit Derivatives [Line Items] | |||
Contracts Requiring Cash Deposits if OTP's Credit Falls Below Investment Grade | [1] | $ 18,157 | $ 15,871 |
Offsetting Gains with Counterparties under Master Netting Agreements | |||
Reporting Date Deposit Requirement if Credit Risk Feature Triggered | $ 18,157 | $ 15,871 | |
[1] | Certain OTP derivative energy contracts contain provisions that require an investment grade credit rating from each of the major credit rating agencies on OTP's debt. If OTP's debt ratings were to fall below investment grade, the counterparties to these forward energy contracts could request the immediate deposit of cash to cover contracts in net liability positions. Contracts Requiring Cash Deposits if OTP's Credit Falls Below Investment Grade $ 18,157 $ 15,871 Offsetting Gains with Counterparties under Master Netting Agreements -- -- Reporting Date Deposit Requirement if Credit Risk Feature Triggered $ 18,157 $ 15,871 |
Reconciliation of Common Shar60
Reconciliation of Common Shareholders' Equity, Common Shares and Earnings Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance, Beginning of Period | $ 605,023 | |
Common Stock Issuances, Net of Expenses | 5,490 | |
Common Stock Retirements | (53) | |
Net Income | 14,520 | $ 17,935 |
Other Comprehensive Income | 140 | |
Employee Stock Incentive Plans Expense | 489 | |
Common Dividends ($0.3125 per share) | (11,889) | |
Balance, End of Period | 613,720 | |
Common Shares | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance, Beginning of Period | 189,286 | |
Common Stock Issuances, Net of Expenses | 1,080 | |
Common Stock Retirements | (9) | |
Balance, End of Period | 190,357 | |
Premium on Common Shares | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance, Beginning of Period | 293,610 | |
Common Stock Issuances, Net of Expenses | 4,410 | |
Common Stock Retirements | (44) | |
Employee Stock Incentive Plans Expense | 489 | |
Balance, End of Period | 298,465 | |
Retained Earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance, Beginning of Period | 126,025 | |
Net Income | 14,520 | |
Common Dividends ($0.3125 per share) | (11,889) | |
Balance, End of Period | 128,656 | |
Accumulated Other Comprehensive Income/(Loss) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance, Beginning of Period | (3,898) | |
Other Comprehensive Income | 140 | |
Balance, End of Period | $ (3,758) |
Reconciliation of Common Shar61
Reconciliation of Common Shareholders' Equity, Common Shares and Earnings Per Share (Parenthetical) (Details 1) - $ / shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Stockholders Equity and Earnings Per Share [Abstract] | ||
Dividends Declared Per Common Share (in dollars per share) | $ 0.3125 | $ 0.3075 |
Reconciliation of Common Shar62
Reconciliation of Common Shareholders' Equity, Common Shares and Earnings Per Share - Reconciliation of common shares outstanding (Details 1) | 3 Months Ended |
Mar. 31, 2016shares | |
Schedule Of Common Stock Outstanding [Roll Forward] | |
Common Shares Outstanding, December 31, 2015 | 37,857,186 |
Issuances: | |
Executive Stock Performance Awards (2013 and 2014 shares earned) | 54,700 |
Automatic Dividend Reinvestment and Share Purchase Plan: | |
Dividends Reinvested | 49,635 |
Cash Invested | 49,281 |
Employee Stock Purchase Plan: | |
Cash Invested | 21,819 |
Dividends Reinvested | 7,153 |
Employee Stock Ownership Plan | 23,837 |
Vesting of Restricted Stock Units | 9,675 |
Retirements: | |
Shares Withheld for Individual Income Tax Requirements | (1,868) |
Common Shares Outstanding, March 31, 2016 | 38,071,418 |
Reconciliation of Common Shar63
Reconciliation of Common Shareholders' Equity, Common Shares and Earnings Per Share - Reconciliation of weighted average common shares outstanding - basic to weighted average common shares outstanding - diluted (Details 2) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Stockholders Equity and Earnings Per Share [Abstract] | ||
Weighted Average Common Shares Outstanding - Basic | 37,936,943 | 37,243,118 |
Plus Outstanding Share Awards net of Share Reductions for Unrecognized Stock-Based Compensation Expense and Excess Tax Benefits: | ||
Shares Expected to be Awarded for Stock Performance Awards Granted to Executive Officers based on Measurement Period-to-Date Performance | 46,885 | 137,460 |
Underlying Shares Related to Nonvested Restricted Stock Units Granted to Employees | 39,841 | 42,540 |
Nonvested Restricted Shares | 17,776 | 49,998 |
Shares Expected to be Issued Under the Deferred Compensation Program for Directors | 3,763 | 24,277 |
Potentially Dilutive Stock Options | 488 | |
Total Dilutive Shares | 108,265 | 254,763 |
Weighted Average Common Shares Outstanding - Diluted | 38,045,208 | 37,497,881 |
Reconciliation of Common Shar64
Reconciliation of Common Shareholders' Equity, Common Shares and Earnings Per Share (Detail Textuals) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | May. 11, 2015 | |
Stockholders Equity Note [Line Items] | |||
Maximum per share differences between basic and diluted earnings per share in total or from continuing or discontinued operations | $ 0.01 | $ 0.01 | |
Distribution Agreement | J.P. Morgan Securities Inc. (JPMS) | |||
Stockholders Equity Note [Line Items] | |||
Agreement To Sell Shares Value | $ 75 |
Share-Based Payments - Stock in
Share-Based Payments - Stock incentive awards to executive officers (Details) - Executive Officers | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares/Units Granted | shares | 22,000 |
Weighted Average Grant-Date Fair Value per Award | $ / shares | $ 28.915 |
Vesting Percentage | 25.00% |
Vesting Date | February 6, 2020 |
Stock Performance Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares/Units Granted | shares | 81,500 |
Weighted Average Grant-Date Fair Value per Award | $ / shares | $ 24.03 |
Vesting Date | December 31, 2018 |
Share-Based Payments - Amounts
Share-Based Payments - Amounts of compensation expense recognized under stock-based payment programs (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation expense | $ 1,026 | $ 1,643 |
Stock Performance Awards | Executive Officers | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation expense | 537 | 1,020 |
Restricted Stock Units (RSUs) | Executive Officers | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation expense | 245 | 253 |
Restricted Stock Units (RSUs) | Nonexecutive Employees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation expense | 64 | 66 |
Restricted Stock | Executive Officers | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation expense | 29 | 157 |
Restricted Stock | Directors | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation expense | 107 | 98 |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock compensation expense | $ 44 | $ 49 |
Share-Based Payments - Amount67
Share-Based Payments - Amounts of compensation expense recognized under stock-based payment programs (Parentheticals) (Details 2) | 3 Months Ended |
Mar. 31, 2016 | |
Employee Stock Purchase Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock compensation expense, discount rate | 15.00% |
Share-Based Payments (Detail Te
Share-Based Payments (Detail Textuals) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense related to stock-based compensation | $ | $ 4.5 |
Weighted-average period of amortization | 2 years 8 months 12 days |
Stock Performance Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Targeted aggregate common shares award | 81,500 |
Stock Performance Awards | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of target amount as actual payment | 0.00% |
Stock Performance Awards | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Aggregate common shares award | 122,250 |
Percentage of target amount as actual payment | 150.00% |
Stock Performance Awards | Executive Officers | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Aggregate common shares award | 81,500 |
Targeted aggregate common shares award total shareholder return component | 54,333 |
Targeted aggregate common shares award return on equity component | 27,167 |
Period specified for average adjusted return | 3 years |
Retained Earnings Restriction (
Retained Earnings Restriction (Detail Textuals) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Retained Earnings Restriction [Line Items] | ||
Total Capitalization | $ 1,107,521,000 | $ 1,048,869,000 |
OTP | ||
Retained Earnings Restriction [Line Items] | ||
Equity to total capitalization ratio | 52.00% | |
OTP | Minimum | ||
Retained Earnings Restriction [Line Items] | ||
Equity to total capitalization ratio | 46.90% | |
OTP | Maximum | ||
Retained Earnings Restriction [Line Items] | ||
Equity to total capitalization ratio | 57.30% | |
Total Capitalization | $ 1,056,300,000 |
Commitments and Contingencies (
Commitments and Contingencies (Detail Textuals) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Line Items] | ||
Loss contingency, range of possible loss, maximum | $ 1 | |
Otter Tail Power Company | Federal Energy Regulatory Commission | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Estimated liability of refund obligation | $ 1.4 | |
Otter Tail Power Company | Coal Purchase Commitments | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Contracts expiration year | 2016, 2017 and 2040 | |
Otter Tail Power Company | Construction Programs | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Commitment under contracts aggregate amount | $ 102.9 | $ 89.6 |
Short-Term and Long-Term Borr71
Short-Term and Long-Term Borrowings - Status of lines of credit (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Line of Credit Facility [Line Items] | ||
Line Limit | $ 320,000 | |
In Use | $ 42,936 | |
Restricted due to Outstanding Letters of Credit | ||
Available | $ 277,064 | $ 239,028 |
Otter Tail Corporation Credit Agreement | ||
Line of Credit Facility [Line Items] | ||
Line Limit | 150,000 | |
In Use | $ 20,880 | |
Restricted due to Outstanding Letters of Credit | ||
Available | $ 129,120 | 90,334 |
OTP Credit Agreement | ||
Line of Credit Facility [Line Items] | ||
Line Limit | 170,000 | |
In Use | $ 22,056 | |
Restricted due to Outstanding Letters of Credit | ||
Available | $ 147,944 | $ 148,694 |
Short-Term and Long-Term Borr72
Short-Term and Long-Term Borrowings - Breakdown of assignment of consolidated short-term and long-term debt outstanding (Details 1) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Short-Term Debt | $ 42,936 | $ 80,672 |
Long-Term Debt | 548,437 | 498,489 |
Less: Current Maturities net of Unamortized Debt Issuance Costs | 52,457 | 52,422 |
Unamortized Debt Issuance Costs | 2,179 | 2,221 |
Long-Term Debt-Net | 493,801 | 443,846 |
Total Short-Term and Long-Term Debt (with current maturities) | 589,194 | 576,940 |
9.000% Notes, due December 15, 2016 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 52,330 | 52,330 |
Term Loan, LIBOR plus 0.90%, due February 5, 2018 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 50,000 | |
Senior Unsecured Notes 5.95%, Series A, due August 20, 2017 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 33,000 | 33,000 |
Senior Unsecured Notes 4.63%, due December 1, 2021 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 140,000 | 140,000 |
Senior Unsecured Notes 6.15%, Series B, due August 20, 2022 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 30,000 | 30,000 |
Senior Unsecured Notes 6.37%, Series C, due August 20, 2027 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 42,000 | 42,000 |
Senior Unsecured Notes 4.68%, Series A, due February 27, 2029 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 60,000 | 60,000 |
Senior Unsecured Notes 6.47%, Series D, due August 20, 2037 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 50,000 | 50,000 |
Senior Unsecured Notes 5.47%, Series B, due February 27, 2044 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 90,000 | 90,000 |
North Dakota Development Note, 3.95%, due April 1, 2018 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 163 | 182 |
Partnership in Assisting Community Expansion (PACE) Note, 2.54%, due March 18, 2021 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 944 | 977 |
OTP | ||
Debt Instrument [Line Items] | ||
Short-Term Debt | 22,056 | 21,006 |
Long-Term Debt | 445,000 | 445,000 |
Unamortized Debt Issuance Costs | 2,039 | 2,099 |
Long-Term Debt-Net | 442,961 | 442,901 |
Total Short-Term and Long-Term Debt (with current maturities) | 465,017 | 463,907 |
OTP | Senior Unsecured Notes 5.95%, Series A, due August 20, 2017 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 33,000 | 33,000 |
OTP | Senior Unsecured Notes 4.63%, due December 1, 2021 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 140,000 | 140,000 |
OTP | Senior Unsecured Notes 6.15%, Series B, due August 20, 2022 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 30,000 | 30,000 |
OTP | Senior Unsecured Notes 6.37%, Series C, due August 20, 2027 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 42,000 | 42,000 |
OTP | Senior Unsecured Notes 4.68%, Series A, due February 27, 2029 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 60,000 | 60,000 |
OTP | Senior Unsecured Notes 6.47%, Series D, due August 20, 2037 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 50,000 | 50,000 |
OTP | Senior Unsecured Notes 5.47%, Series B, due February 27, 2044 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 90,000 | 90,000 |
Otter Tail Corporation | ||
Debt Instrument [Line Items] | ||
Short-Term Debt | 20,880 | 59,666 |
Long-Term Debt | 103,437 | 53,489 |
Less: Current Maturities net of Unamortized Debt Issuance Costs | 52,457 | 52,422 |
Unamortized Debt Issuance Costs | 140 | 122 |
Long-Term Debt-Net | 50,840 | 945 |
Total Short-Term and Long-Term Debt (with current maturities) | 124,177 | 113,033 |
Otter Tail Corporation | 9.000% Notes, due December 15, 2016 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 52,330 | 52,330 |
Otter Tail Corporation | Term Loan, LIBOR plus 0.90%, due February 5, 2018 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 50,000 | |
Otter Tail Corporation | North Dakota Development Note, 3.95%, due April 1, 2018 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | 163 | 182 |
Otter Tail Corporation | Partnership in Assisting Community Expansion (PACE) Note, 2.54%, due March 18, 2021 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt | $ 944 | $ 977 |
Short-Term and Long-Term Borr73
Short-Term and Long-Term Borrowings - Breakdown of assignment of consolidated short-term and long-term debt outstanding (Parentheticals) (Details 1) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
9.000% Notes, due December 15, 2016 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 9.00% | 9.00% |
Long-Term Debt, Due Date | Dec. 15, 2016 | Dec. 15, 2016 |
Term Loan, LIBOR plus 0.90%, due February 5, 2018 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 0.90% | |
Long-Term Debt, Due Date | Feb. 5, 2018 | |
Senior Unsecured Notes 5.95%, Series A, due August 20, 2017 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 5.95% | 5.95% |
Long-Term Debt, Due Date | Aug. 20, 2017 | Aug. 20, 2017 |
Senior Unsecured Notes 4.63%, due December 1, 2021 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 4.63% | 4.63% |
Long-Term Debt, Due Date | Dec. 1, 2021 | Dec. 1, 2021 |
Senior Unsecured Notes 6.15%, Series B, due August 20, 2022 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 6.15% | 6.15% |
Long-Term Debt, Due Date | Aug. 20, 2022 | Aug. 20, 2022 |
Senior Unsecured Notes 6.37%, Series C, due August 20, 2027 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 6.37% | 6.37% |
Long-Term Debt, Due Date | Aug. 20, 2027 | Aug. 20, 2027 |
Senior Unsecured Notes 4.68%, Series A, due February 27, 2029 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 4.68% | 4.68% |
Long-Term Debt, Due Date | Feb. 27, 2029 | Feb. 27, 2029 |
Senior Unsecured Notes 6.47%, Series D, due August 20, 2037 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 6.47% | 6.47% |
Long-Term Debt, Due Date | Aug. 20, 2037 | Aug. 20, 2037 |
Senior Unsecured Notes 5.47%, Series B, due February 27, 2044 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 5.47% | 5.47% |
Long-Term Debt, Due Date | Feb. 27, 2044 | Feb. 27, 2044 |
North Dakota Development Note, 3.95%, due April 1, 2018 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 3.95% | 3.95% |
Long-Term Debt, Due Date | Apr. 1, 2018 | Apr. 1, 2018 |
Partnership in Assisting Community Expansion (PACE) Note, 2.54%, due March 18, 2021 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 2.54% | 2.54% |
Long-Term Debt, Due Date | Mar. 18, 2021 | Mar. 18, 2021 |
OTP | Senior Unsecured Notes 5.95%, Series A, due August 20, 2017 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 5.95% | 5.95% |
Long-Term Debt, Due Date | Aug. 20, 2017 | Aug. 20, 2017 |
OTP | Senior Unsecured Notes 4.63%, due December 1, 2021 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 4.63% | 4.63% |
Long-Term Debt, Due Date | Dec. 1, 2021 | Dec. 1, 2021 |
OTP | Senior Unsecured Notes 6.15%, Series B, due August 20, 2022 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 6.15% | 6.15% |
Long-Term Debt, Due Date | Aug. 20, 2022 | Aug. 20, 2022 |
OTP | Senior Unsecured Notes 6.37%, Series C, due August 20, 2027 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 6.37% | 6.37% |
Long-Term Debt, Due Date | Aug. 20, 2027 | Aug. 20, 2027 |
OTP | Senior Unsecured Notes 4.68%, Series A, due February 27, 2029 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 4.68% | 4.68% |
Long-Term Debt, Due Date | Feb. 27, 2029 | Feb. 27, 2029 |
OTP | Senior Unsecured Notes 6.47%, Series D, due August 20, 2037 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 6.47% | 6.47% |
Long-Term Debt, Due Date | Aug. 20, 2037 | Aug. 20, 2037 |
OTP | Senior Unsecured Notes 5.47%, Series B, due February 27, 2044 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 5.47% | 5.47% |
Long-Term Debt, Due Date | Feb. 27, 2044 | Feb. 27, 2044 |
Otter Tail Corporation | 9.000% Notes, due December 15, 2016 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 9.00% | 9.00% |
Long-Term Debt, Due Date | Dec. 15, 2016 | Dec. 15, 2016 |
Otter Tail Corporation | Term Loan, LIBOR plus 0.90%, due February 5, 2018 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 0.90% | |
Long-Term Debt, Due Date | Feb. 5, 2018 | |
Otter Tail Corporation | North Dakota Development Note, 3.95%, due April 1, 2018 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 3.95% | 3.95% |
Long-Term Debt, Due Date | Apr. 1, 2018 | Apr. 1, 2018 |
Otter Tail Corporation | Partnership in Assisting Community Expansion (PACE) Note, 2.54%, due March 18, 2021 | ||
Debt Instrument [Line Items] | ||
Long-Term Debt, Interest Rate | 2.54% | 2.54% |
Long-Term Debt, Due Date | Mar. 18, 2021 | Mar. 18, 2021 |
Short-Term and Long-Term Borr74
Short-Term and Long-Term Borrowings (Detail Textuals) $ in Thousands | Feb. 05, 2016USD ($) | Mar. 31, 2016USD ($) |
Subsequent Event [Line Items] | ||
Aggregate commitment of loan | $ 320,000 | |
Term Loan Agreement | JPMorgan | ||
Subsequent Event [Line Items] | ||
Aggregate commitment of loan | $ 50,000 | |
Minimum increments tranches of term loans | 10,000 | |
Maximum amount of debt outstanding | 100,000 | |
Borrowed amount | $ 50,000 | |
Interest rate base | LIBOR plus 0.90 | |
Term Loan Agreement | JPMorgan | LIBOR | ||
Subsequent Event [Line Items] | ||
Line of credit facility, description of variable rate basis | LIBOR | |
Basis spread on variable rate | 0.90% | |
Term Loan Agreement | JPMorgan | Prime Rate | ||
Subsequent Event [Line Items] | ||
Line of credit facility, description of variable rate basis | Prime Rate | |
Term Loan Agreement | JPMorgan | Federal Reserve Bank of New York Rate | ||
Subsequent Event [Line Items] | ||
Line of credit facility, description of variable rate basis | Federal Reserve Bank of New York Rate | |
Basis spread on variable rate | 0.50% | |
Term Loan Agreement | JPMorgan | Statutory Reserve Rate | ||
Subsequent Event [Line Items] | ||
Line of credit facility, description of variable rate basis | LIBOR multiplied by the Statutory Reserve Rate | |
Basis spread on variable rate | 1.00% | |
Term Loan Agreement | Minimum | JPMorgan | ||
Subsequent Event [Line Items] | ||
Debt to total capitalization ratio | 0.60 | |
Interest and dividend coverage ratio | 1 | |
Term Loan Agreement | Maximum | JPMorgan | ||
Subsequent Event [Line Items] | ||
Debt to total capitalization ratio | 1 | |
Interest and dividend coverage ratio | 1.50 |
Pension Plan and Other Postre75
Pension Plan and Other Postretirement Benefits - Components of net periodic pension benefit cost (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service Cost - Benefit Earned During the Period | $ 1,382 | $ 1,500 | |
Interest Cost on Projected Benefit Obligation | 3,522 | 3,325 | |
Expected Return on Assets | (4,867) | (4,600) | |
Amortization of Prior-Service Cost: | |||
From Regulatory Asset | 47 | 47 | |
From Other Comprehensive Income | [1] | 1 | 1 |
Amortization of Net Actuarial Loss: | |||
From Regulatory Asset | 1,227 | 1,633 | |
From Other Comprehensive Income | [1] | 31 | 40 |
Net Periodic Postretirement Benefit Cost | 1,343 | 1,946 | |
Executive Survivor and Supplemental Retirement Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service Cost - Benefit Earned During the Period | 63 | 47 | |
Interest Cost on Projected Benefit Obligation | 417 | 381 | |
Amortization of Prior-Service Cost: | |||
From Regulatory Asset | 4 | 4 | |
From Other Comprehensive Income | [2] | 9 | 10 |
Amortization of Net Actuarial Loss: | |||
From Regulatory Asset | 73 | 83 | |
From Other Comprehensive Income | [3] | (112) | (151) |
Net Periodic Postretirement Benefit Cost | 678 | 676 | |
Postretirement Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service Cost - Benefit Earned During the Period | 306 | 375 | |
Interest Cost on Projected Benefit Obligation | 541 | 550 | |
Amortization of Prior-Service Cost: | |||
From Regulatory Asset | 33 | 51 | |
From Other Comprehensive Income | [1] | $ 1 | 1 |
Amortization of Net Actuarial Loss: | |||
From Regulatory Asset | 48 | ||
From Other Comprehensive Income | [1] | 1 | |
Net Periodic Postretirement Benefit Cost | $ 881 | 1,026 | |
Effect of Medicare Part D Subsidy | $ (257) | $ (450) | |
[1] | Corporate cost included in Other Nonelectric Expenses. | ||
[2] | Amortization of Prior Service Costs from Other Comprehensive Income Charged to: Electric Operation and MaintenanceExpenses $ 4 $ 4 Other Nonelectric Expenses 5 6 | ||
[3] | Amortization of Net Actuarial Loss from Other Comprehensive Income Charged to: Electric Operation and Maintenance Expenses $ 68 $ 78 Other Nonelectric Expenses 44 73 |
Pension Plan and Other Postre76
Pension Plan and Other Postretirement Benefits - Components of net periodic pension benefit cost (Parentheticals) (Details) - Executive Survivor and Supplemental Retirement Plan - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Defined Benefit Plan Disclosure [Line Items] | |||
Amortization of Prior-Service Cost - From Other Comprehensive Income | [1] | $ 9 | $ 10 |
Amortization of Net Actuarial Loss - From Other Comprehensive Income | [2] | 112 | 151 |
Electric operation and maintenance expenses | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Amortization of Prior-Service Cost - From Other Comprehensive Income | 4 | 4 | |
Amortization of Net Actuarial Loss - From Other Comprehensive Income | 68 | 78 | |
Other nonelectric expenses | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Amortization of Prior-Service Cost - From Other Comprehensive Income | 5 | 6 | |
Amortization of Net Actuarial Loss - From Other Comprehensive Income | $ 44 | $ 73 | |
[1] | Amortization of Prior Service Costs from Other Comprehensive Income Charged to: Electric Operation and MaintenanceExpenses $ 4 $ 4 Other Nonelectric Expenses 5 6 | ||
[2] | Amortization of Net Actuarial Loss from Other Comprehensive Income Charged to: Electric Operation and Maintenance Expenses $ 68 $ 78 Other Nonelectric Expenses 44 73 |
Pension Plan and Other Postre77
Pension Plan and Other Postretirement Benefits (Detail Textuals) - USD ($) | 1 Months Ended | |
Jan. 31, 2016 | Jan. 31, 2015 | |
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discretionary plan contributions | $ 10,000,000 | $ 10,000,000 |
Fair Value of Financial Instr78
Fair Value of Financial Instruments - Summary of fair value of financial instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Carrying Amount | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Short-Term Debt | $ (42,936) | $ (80,672) |
Long-Term Debt including Current Maturities | (546,258) | (496,268) |
Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Short-Term Debt | (42,936) | (80,672) |
Long-Term Debt including Current Maturities | $ (623,484) | $ (561,245) |
Fair Value of Financial Instr79
Fair Value of Financial Instruments (Detail Textuals) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Otter Tail Corporation Credit Agreement | ||
Fair Value Of Financial Instruments [Line Items] | ||
Line of credit facility, description of variable rate basis | LIBOR | LIBOR |
Basis spread on variable rate | 1.75% | 1.75% |
OTP Credit Agreement | ||
Fair Value Of Financial Instruments [Line Items] | ||
Line of credit facility, description of variable rate basis | LIBOR | LIBOR |
Basis spread on variable rate | 1.25% | 1.25% |
Income Tax Expense - Continui80
Income Tax Expense - Continuing operations effective income tax rate (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Income Before Income Taxes - Continuing Operations | $ 19,982 | $ 17,854 |
Tax Computed at Company's Net Composite Federal and State Statutory Rate (39%) | 7,793 | 6,963 |
Increases (Decreases) in Tax from: | ||
Federal Production Tax Credits | (1,686) | (2,054) |
North Dakota Wind Tax Credit Amortization - Net of Federal Taxes | (212) | (212) |
Section 199 Domestic Production Activities Deduction | (104) | (362) |
Employee Stock Ownership Plan Dividend Deduction | (158) | (172) |
Corporate Owned Life Insurance | (64) | (80) |
AFUDC Equity | (37) | (100) |
Other Items - Net | (40) | 90 |
Income Tax Expense - Continuing Operations | $ 5,492 | $ 4,073 |
Effective Income Tax Rate - Continuing Operations | 27.50% | 22.80% |
Income Tax Expense - Continui81
Income Tax Expense - Continuing operations effective income tax rate (Parentheticals) (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Composite Federal and State Statutory Rate | 39.00% | 39.00% |
Income Tax Expense - Continui82
Income Tax Expense - Continuing Operations - Summary of Activity Related to Unrecognized Tax benefit (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance on January 1 | $ 468 | $ 222 |
Increases Related to Tax Positions for Prior Years | ||
Increases Related to Tax Positions for Current Year | $ 16 | $ 44 |
Uncertain Positions Resolved During Year | ||
Balance on March 31 | $ 484 | $ 266 |
Discontinued Operations - Resul
Discontinued Operations - Results of discontinued operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net Income (Loss) from Operations | $ 30 | $ (3,072) |
Income Tax Expense on Disposition | 4,816 | |
Net Gain on Disposition | 7,226 | |
Net Income | $ 30 | 4,154 |
Disposal groups held for sale or disposed of by sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Operating Revenues | 18,724 | |
Operating Expenses | $ (50) | 22,141 |
Goodwill Impairment Charge | 1,000 | |
Operating Income (Loss) | $ 50 | (4,417) |
Other Deductions | (31) | |
Income Tax Expense (Benefit) | $ 20 | (1,376) |
Net Income (Loss) from Operations | $ 30 | (3,072) |
Gain on Disposition Before Taxes | 12,042 | |
Income Tax Expense on Disposition | 4,816 | |
Net Gain on Disposition | 7,226 | |
Net Income | $ 30 | $ 4,154 |
Discontinued Operations - Major
Discontinued Operations - Major components of assets and liabilities of discontinued operations (Details 1) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Liabilities of Discontinued Operations | $ 2,098 | $ 2,098 |
Disposal groups held for sale or disposed of by sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Current Liabilities | 2,098 | 2,098 |
Liabilities of Discontinued Operations | $ 2,098 | $ 2,098 |
Discontinued Operations - Warra
Discontinued Operations - Warranty Reserves (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Warranty Reserve Balance, January 1 | $ 2,103 | $ 2,527 |
Additional Provision for Warranties Made During the Year | ||
Settlements Made During the Year | $ (6) | |
Decrease in Warranty Estimates for Prior Years | ||
Warranty Reserve Balance, March 31 | $ 2,103 | $ 2,521 |
Discontinued Operations (Detail
Discontinued Operations (Detail Textuals) - Disposal groups held for sale or disposed of by sale - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Goodwill Impairment Charge | $ 1,000 | |
Foley | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cost estimates pretax charges | 2,300 | |
Goodwill Impairment Charge | $ 1,000 |