Otter Tail (OTTR) Q3 2025 Earnings Transcript

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DATE

Tuesday, November 4, 2025 at 11:00 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Charles S. MacFarlane
• Vice President and Chief Financial Officer — Todd M. Wahlund

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TAKEAWAYS

• Diluted Earnings Per Share -- $1.86, a decrease of 8%, driven primarily by lower Plastics segment sales prices and earnings.
• Plastics Segment Average Sales Price -- Declined 17%, continuing a downward trend since mid-2022, partially offset by a 4% increase in sales volumes and a 16% decrease in material input costs.
• 2025 Earnings Guidance Midpoint -- Raised to $6.47 from $6.26 per share, with the range narrowed to $6.32 to $6.62, reflecting stronger-than-expected Plastics segment financial results and revised margin expectations.
• South Dakota Rate Case Interim Rates -- $5.7 million annually, with interim rates to commence December 1, 2025; final resolution expected first half of 2026 unless settled earlier.
• Minnesota Rate Case Request -- Net revenue increase of $44.8 million based on a 10.65% requested ROE and a 53.5% equity layer, driven by infrastructure investments, inflation, and accelerated recovery of Coyote Station.
• Plastics Segment Capacity Expansion -- Second phase of Vinyltech project on track to add 26 million pounds of capacity by early next year, totaling a 15% increase in production capacity through the multiyear investment plan.
• Electric Segment Capital Investment Plan -- Updated 5-year plan increased by 35%, now totaling $1.9 billion, with annual rate base compound growth targeted at 10% and anticipated near 1:1 alignment with earnings per share growth long-term.
• Long-Term Earnings Per Share Growth Target -- Updated to 7%-9%, with an expected total shareholder return of 10%-12% once Plastics segment earnings normalize in 2028.
• Manufacturing Segment Dynamics -- BTD sales volumes remained below historical levels, especially in lawn, garden, and agricultural markets, but month-over-month stabilization in Q3 may indicate the business cycle has bottomed; low demand expected to persist through most of 2026.
• Electric Segment Earnings -- Decreased $0.03 per share, impacted by unfavorable weather and timing differences in North Dakota rates, partially offset by higher volumes (excluding weather) and lower operating and maintenance expenses.
• Manufacturing Segment Earnings -- Increased $0.04 per share, driven by cost alignment, enhanced production efficiencies, and timing of steel cost fluctuations, partially offset by lower sales volumes and higher SG&A expense.
• Plastics Segment Earnings -- Declined $0.26 per share, mainly due to lower average sales prices, partially offset by higher sales volumes and lower material costs.
• Corporate Costs -- Improved $0.08 per share, due to increased income tax benefits, reduced workers' compensation, and lower employee health claims.
• Large Load Addition -- 155-megawatt load (3 megawatts firm, 152 megawatts nonfirm) expected online in coming weeks, with positive but not significant earnings contribution starting in 2026; structured as highly interruptible with minimal new investment.
• Balance Sheet -- $325 million in cash, industry-leading 16% return on equity (equity layer near 64%), and no projected need for external equity through at least 2030.
• Wind Repowering Project -- Nearly complete, projected to add approximately 40 megawatts and increase output by over 20% when all sites are finished later this year.
• Long-Term Financing Strategy -- No equity issuance anticipated; annual utility debt issuance planned and retirement of $80 million in parent level debt expected in late 2026, leaving no parent level debt outstanding.
• Regulatory Recovery -- Approximately 90% of the updated 5-year utility capital plan expected to be recovered through existing rates or riders.
• Segment Earnings Mix Target -- Anticipated 2028 mix is 70% Electric platform, 30% Manufacturing platform, following Plastics earnings normalization and Manufacturing rebound.
• Ongoing Antitrust Litigation -- During the quarter, the Department of Justice intervened to stay discovery in a U.S. civil antitrust case; the company filed a motion to dismiss and anticipates a court decision in 2026, with a similar class action complaint active in British Columbia, Canada.

SUMMARY

Otter Tail Corporation delivered quarterly financial results that surpassed internal forecasts despite an 8% year-over-year earnings per share decline, prompting an upward revision of full-year guidance. Management advanced major regulatory initiatives, filing significant rate cases in both Minnesota and South Dakota that, if approved, are set to materially increase infrastructure investment recovery and shape future revenue streams. The capital expenditure plan for the utility business was increased by 35%, with a sharpened focus on transmission projects and minimal expected rate pressure for customers due to renewable energy advantages and tax credit allocations. Product pricing pressure persisted in the Plastics segment, where both sales prices and input costs declined, but volume gains partially cushioned the earnings impact amid ongoing capacity expansion. The manufacturing segment continued to face subdued demand, though emerging stabilization and cost discipline provided margin support, and a significant new interruptible electric load is set to contribute meaningfully beginning next year without requiring major incremental investment.

• Management reported, "We increased our long-term earnings per share growth rate to 7% to 9% and also increased our targeted total shareholder return to 10% to 12%."
• Corporate capital allocation priorities remain focused on funding internal utility growth and maintaining an elevated dividend, with merger and acquisition opportunities limited to potential bolt-ons rather than new platforms.
• Todd M. Wahlund said, "Our balance sheet remains very strong, and we are positioned well to fund the utilities updated customer-focused growth plan without the need for external equity through at least 2030."
• The company expects an approximate 23% compounded annual consolidated earnings growth rate over the upcoming five years, reflecting projected performance across all business lines and recent guidance updates.
• The earnings normalization timeline projects Plastics segment returns to stabilize by 2028, with management noting the volatility and unpredictability of that path but reaffirming segment importance for cash flow and accretive growth.
• Regulatory events, including the Department of Justice's intervention in pending antitrust litigation and a motion to dismiss, introduce legal uncertainty, with no near-term resolution expected.

INDUSTRY GLOSSARY

• MISO (Midcontinent Independent System Operator): A regional transmission organization responsible for operating the electric grid and managing wholesale electricity markets across the Midwest U.S. and parts of Canada.
• Coyote Station: A specific coal-fired power generation facility referenced for accelerated cost recovery in the company's regulatory filings.
• SG&A (Selling, General, and Administrative): Costs incurred for the day-to-day operations not directly tied to production or sales volume.
• Rider: A regulatory mechanism that allows utility companies to adjust rates outside of a general rate case to recover specific costs.
• Tranche: A portion or segment of a set of projects or financial assets, often designated in phases, as in "MISO Tranche 1" for specific transmission development projects.

Full Conference Call Transcript

Chuck MacFarlane: Thank you, Beth. Good morning, and welcome to our third quarter earnings call. Please refer to Slide 4 as I begin my remarks with a summary of quarterly highlights. . We are pleased with our Q3 financial results as they outpaced our expectations. Our team members continue to execute well on our growth plan despite dynamic market conditions. Otter Tail Power continues to deliver on its regulatory priorities. Our South Dakota rate case, previously filed in June of this year, continues to progress; and in late October, we filed a rate case with the Minnesota Public Utilities Commission. The second phase of Vinyltech's expansion project is progressing well.

We continue to target early next year for adding another 26 million pounds of capacity. Once complete, we will have increased our Plastics segment total production capacity by 15% through our multiyear investment plan. We are also introducing our updated 5-year capital spending plan today. Otter Tail Power's new capital investment plan totals $1.9 billion and is expected to produce a rate base compounded annual growth rate of 10%. With our updated capital investment plan, we are increasing our targeted long-term earnings per share growth rate to 9% to 7% from 6% to 8% of a 2028 base year. This results in a targeted total shareholder return of 10% to 12%.

Slide 5 provides a summary of our quarter-to-date and year-to-date earnings. We generated $1.86 of diluted earnings per share in the third quarter, a decrease of 8% from the same time last year. This expected decline in earnings was driven by the continued decline in Plastics segment sales prices and earnings. Despite the year-over-year decrease, our results outpaced our expectations. We are increasing the midpoint of our 2025 earnings guidance to $6.47 from $6.26 per share. The increase in guidance is primarily due to better-than-expected Plastics segment financial results in Q3 and our revised expectations for the remainder of the year.

In a moment, Todd will provide a more detailed discussion of our quarterly financial results and our updated 2025 outlook. Transitioning now to an operational update for Otter Tail Power. As noted on Slide 7, we filed a request with the Minnesota Public Utilities Commission for a net revenue increase of $44.8 million. This is based on a requested ROE of 10.65% and an equity layer of 53.5%. The increase is driven by investments in infrastructure and grid resilience, the impact of inflation since our last rate case filed 5 years ago and accelerated recovery of the Minnesota portion of Coyote Station.

We requested accelerated recovery of Coyote Station as the Minnesota Public Utilities Commission directed us to no longer serve our Minnesota customers with power from Coyote beyond 2031, as part of our integrated resource plan. Even with the proposed increase, Otter Tail Power is expected to continue to have some of the lowest electric rates in the region and country. Affordability remains a priority for us, and we are committed to selecting cost-effective investments to serve our customers with reliable energy while prudently managing our operating costs.

Our updated 5-year capital spending plan is expected to have limited impact on our customer rates due to lower fuel costs associated with renewable generation as well as the favorable impact of renewable tax credits. Additionally, a significant portion of our capital spending plan relates to regional transmission projects. The cost of these projects will be allocated to either new generation interconnection customers or across the entire MISO footprint, of which our customers comprise only a small portion. We continue to partner with our customers to identify ways to save, whether through energy efficiency programs or innovative pricing solutions. Turning to Slide 8. Our South Dakota rate case is progressing.

The procedural schedule has been established, and we expect a decision in the first half of 2026 unless a settlement is reached in advance of that date. Interim rates, which amount to $5.7 million on an annual basis, will commence on December 1, 2025. Turning to Slide 9, Otter Tail Power updated its 5-year rate base CAGR to 10%. We continue to expect Otter Tail Power to convert its rate base growth into earnings per share growth near a 1:1 ratio over the long term. This is made possible by identifying high-quality customer-focused projects, effective project execution, efficient financing and reducing regulatory lag.

We currently expect approximately 90% of our updated 5-year capital spending plan to be recovered through existing rates or riders allowing for timely recovery of our capital investments. Slide 10 and 11 provide an overview of ongoing future capital projects. Our Wind Repowering project is nearly complete. We finished upgrading the wind towers at our Luverne Wind Energy Center in Q3 and expect to complete the remaining 2 repower sites later this year. Once finished, we expect the increased energy production from these facilities to total approximately 40 megawatts of new generation, which equates to over a 20% output increase. Our 2 solar development projects also continue to progress.

During the quarter, we transitioned Solway Solar from a project development to start of construction and look forward to adding additional cost-effective solar generation to our portfolio. Development work continues on our MISO Tranche 1 and 2.1 portfolio projects as well as our JTIQ project. We are working through landowner and local government resistance associated with citing and certain permits for one of the Tranche 1 projects. Additionally, in July, a complaint was filed at FERC against MISO's Tranche 2.1 projects, citing a concern with benefit calculations. North Dakota, in one of the jurisdictions in which we operate, joined the complaint.

We are closely monitoring developments around the FERC complaint docket, and at this time, continue to expect these projects to move forward due to their reliability-related benefits, but some delays are possible. Turning to Slide 12. Otter Tail Power remains well positioned to attract and support large load. Our team continues to engage with companies looking to add new large loads to our system. In the coming weeks, we look forward to bringing online the 155-megawatt load secured earlier this year. The 155-megawatt load is comprised of 3 megawatts of firm load and approximately 152 megawatts of nonfirm loan. We expect this load to positively contribute to earnings starting next year.

We have and will continue to be thoughtful in our negotiations to ensure we are appropriately mitigating potential adverse implications of adding new large loads to our existing customer base. Adding new loads, if appropriately managed, would not only benefit us, but also our current customers as it enables us to spread out existing fixed costs. In what is a challenging economic environment for many, affordability has become increasingly important. As shown on Slide 13, Otter Tail Power's electric rates have remained well below the national and regional average for many years, and we expect Otter Tail power rates to remain among the lowest in the nation. However, we know that our customers still feel the impact of rate increases.

We're deeply focused on identifying cost-effective investment projects and are committed to prudently managing costs. We aim to partner with our customers to continue to identify ways for them to save. Transitioning to our manufacturing platform. Slide 15 provides an overview of industry conditions impacting our Manufacturing segment. BTD continues to face end market demand related headwinds. Sales volumes remain below historic levels after sharply declining in the third quarter of last year. The lawn and garden and agricultural end markets continue to be most heavily impacted. Recreational vehicle and construction have shown signs of improvement and the industrial end market remains strong as our products are ultimately used to support the growing data center energy demand.

While the down cycle impacting BTD's volume continues, we saw some month-over-month stabilization in volumes during the third quarter. This could indicate reaching the bottom of the business cycle. At this time, we expect our current low demand environment to continue through most of 2026 and we'll give a fulsome update regarding 2026 expectations during our Q4 call. We have seen some improvement at T.O. Plastics horticulture end market, but low-cost import competition remains a challenge for our team. We continue to monitor the tariff environment to determine what impact, if any, it will have. However, in the meantime, we remain focused on aligning costs with current demand across our Manufacturing segment.

I want to take a moment to recognize and thank our Manufacturing team members for their commitment and efforts during challenging market conditions. Slide 16 provides an overview of our Plastics segment's pricing and volume trends. Our sales prices of PVC pipe continue to steadily decline, decreasing 17% from the same time last year. Sales volumes increased 4% due in part to capacity added to Vinyltech late last year. We also continue to benefit from lower material input costs, including resin. The cost of PVC resin has decreased from the same time last year due to global supply and demand dynamics resulting in elevated domestic supply. Turning to Slide 17. Our manufacturing platform remains well positioned for future growth opportunities.

Our BTD Georgia facility is ready to support our customers in the Southeast once market conditions improve. Phase 2 of our Vinyltech expansion is progressing well. Once complete, we will have increased our total production capacity for the Plastics segment by approximately 50 million pounds over the past 2 years. I'll now turn it over to Todd to provide his financial update.

Todd Wahlund: Thank you, Chuck, and good morning, everyone. Turning to Slide 19. Our quarterly financial results exceeded expectations. We generated $1.86 of diluted earnings per share compared to $2.03 during the same time last year. Please follow along on Slides 20 and 21 as I provide an overview of quarterly financial segment results by segment. Electric segment earnings decreased $0.03 per share in the third quarter. The decrease in earnings was primarily driven by unfavorable weather and the impact of seasonal rate differences between interim and final rates in North Dakota. This timing effect does not impact our revenue on an annual basis.

These drivers were partially offset by higher quarterly sales volumes, excluding the impact of weather, as well as lower operating and maintenance expenses. Manufacturing segment earnings increased $0.04 per share. The increase in earnings was primarily driven by a lower cost structure following our efforts over the last year to align the costs in our business with the current demand environment. We also benefited from enhanced production efficiencies with a smaller but more skilled workforce. The timing of pass-through steel cost fluctuations and the selling of lower cost inventory also contributed to improved profit margins. These drivers were partially offset by the impact of lower sales volumes and higher SG&A expense. Turning to Slide 21.

Plastics segment earnings decreased $0.26 per share compared to the same time last year. Plastics segment earnings exceeded our expectation for the third quarter, even as we continue to progress towards a more normalized earnings level. The decrease in earnings was driven by lower average sales prices, partially offset by lower input material costs and higher sales volumes. The average sales price of PVC pipe declined 17% compared to the third quarter of 2024. This continues the downward trend experienced in the sales prices of our PVC pipe since it reached its peak in mid-2022. Partially offsetting the decline in pricing are lower material input costs, which decreased 16% from the same time last year.

Our Plastics segment earnings also benefited from a 4% increase in sales volumes, largely driven by the incremental volume from the capacity added at Vinyltech. Finally, our corporate costs improved $0.08 per share in the third quarter from the same time last year. This improvement was driven by an increase in income tax benefits, lower workers' compensation expenses and lower employee health insurance claims. Turning to Slide 22. Our balance sheet remains very strong, and we are positioned well to fund the utilities updated customer-focused growth plan without the need for external equity through at least 2030.

We have $325 million of cash on hand and continue to produce a utility sector leading return on equity of 16% on an equity layer of nearly 64%. On Slide 23, we are increasing and narrowing our 2025 diluted earnings per share guidance to a range of $6.32 to $6.62. We are increasing our 2025 earnings guidance primarily due to a better-than-expected Plastics segment financial results in the third quarter as well as our revised margin expectations for the remainder of the year. We are increasing our margin expectations as we expect raw material costs to be lower than previously projected for the remainder of the year.

We are also increasing the midpoint of our Electric segment earnings guidance and narrowed the range. Our updated guidance is primarily based on better-than-expected financial results in the third quarter of 2025, which was largely driven by higher-than-anticipated sales volumes. We are maintaining the midpoint of our 2025 earnings guidance for our Manufacturing segment, but are narrowing the range. We are also narrowing the guidance range for our corporate cost center. With the increase to our 2025 earnings guidance, we are forecasting our consolidated 5-year compounded annual growth rate to be approximately 23%. As shown on Slide 24, we have a proven track record of delivering outstanding earnings per share growth with and without the impact of Plastics segment earnings.

Our updated capital investment plan for 2026 through 2030 is included on Slide 25. Our Electric segment's revised 5-year capital spending plan increased by approximately 35% and now totals $1.9 billion. The increase is primarily driven by moving into the construction phase of our previously discussed regional transmission projects. It is important to highlight that our updated capital plan does not include any investment to serve new large loads. Additionally, we project approximately $350 million of potential incremental utility capital investments to our base plan. The incremental opportunity includes the wind generation and battery storage projects previously approved in our Minnesota integrated resource plan as well as delivery-related investments for any new large loads added to our system.

We estimate that for every $100 million of incremental capital investment, our rate base compound annual growth rate would increase by approximately 65 basis points. Slide 26 summarizes our updated 5-year financing plan. Even with our updated utility capital spending plan, we expect to finance our growth without any equity issuances. We plan to issue debt at Otter Tail Power on an annual basis to help fund the investment plan and maintain the authorized capital structure. We have $80 million in parent level debt that matures in late 2026 and expect to retire this debt. We will have no outstanding parent level debt upon retirement. As included on Slide 27, our long-term expectations of normalized Plastics segment earnings remains unchanged.

We believe Plastics segment earnings will continue to decline through the end of 2027 such that 2028 is our first full year of normalized earnings. This assumption is based on the average sales price of our PVC pipe falling at a rate similar to what we have experienced since late 2022, increased sales volumes due to our expansion projects at Vinyltech and cost changes generally in line with the rate of inflation. Due to seasonality and other factors, the rate of margin compression could vary from period to period. Additionally, it continues to be difficult to predict with certainty long-term Plastics segment earnings and the timing or level of earnings could vary materially from this projection.

However, the Plastics segment remains an important component to our overall strategy due to the enhanced returns and earnings it generates. Even as earnings normalize over the coming years, we expect the segment to produce an accretive return and incremental cash to help fund our electric utilities rate base growth plan. Slide 28 summarizes our uplifted investment targets. We increased our long-term earnings per share growth rate to 7% to 9% and also increased our targeted total shareholder return to 10% to 12%. We anticipate delivering on these targets once Plastics segment earnings normalize in 2028. Our long-term earnings mix target has also been updated.

We now expect 70% of our earnings to be driven by our Electric platform and 30% from our Manufacturing platform. We anticipate reaching this earnings mix in 2028, as Electric segment earnings continue to grow in line with its rate base growth rate of 10%, Plastics segment earnings have normalized, and the Manufacturing segment has rebounded from the current down cycle. As we continue to execute on our customer-focused growth plan, we are well positioned to deliver on our revised investment targets over the long term. Otter Tail Power continues to be a high-performing electric utility, converting its rate base growth and earnings per share growth at an approximate 1:1 ratio.

Our manufacturing and plastic pipe businesses consistently produce accretive returns and incremental cash, which will be used to help fund our rate base growth plan without any equity needs. It is this combination of companies and performance that has and we project continuing to provide excellent benefits for our customers and our investors. We look forward to what the future holds and are grateful for your interest and investment in Otter Tail Corporation. We are now ready to take your questions.

Operator: [Operator Instructions] Our first call comes from Michael Pelletier from KeyBanc Capital Markets.

Michael Pelletier: Congrats on the updates this morning.

Chuck MacFarlane: Thanks, Michael.

Todd Wahlund: Good morning, Michael.

Michael Pelletier: Just curious on the updated EPS long-term growth rate there, just on the shaping of it and kind of expect that to grow linearly or any movement on a year-to-year basis?

Todd Wahlund: Yes. Over the long term, we do expect our utility earnings to grow in line with our rate base. There will be year-to-year fluctuations depending upon timing of recovery. But over the long term, we do expect our earnings for the utility to be in line with the rate base growth plan, and we do provide the rate base projections by year. And certainly, as we're going through the manufacturing and on the Plastics side, we're seeing that normalize and on then the Manufacturing segment, we're in a down cycle right now.

So we will have some fluctuations year-to-year, but beyond 2028 when we reach that normal level of Plastics earnings and are through the Manufacturing down cycle, we expect to achieve the 7% to 9% long term.

Michael Pelletier: And then just a quick modeling question, but what are you currently assuming for your 2025 tax rate? And how are you tracking towards that? And has there been any change in your assumption since your initial guidance this year?

Todd Wahlund: Just to make sure I understood that, Michael, our tax rate, is that what you're asking about?

Michael Pelletier: Yes.

Todd Wahlund: I don't know that I have that specific information in front of me.

Michael Pelletier: Okay. And then just on the antitrust case, and just curious if you could provide any update there? And then how does the Department of Justice's involvement affect the proceedings or time line?

Chuck MacFarlane: Michael, this is Chuck. During the quarter, the -- there were amended complaints filed in the class action lawsuits in the U.S. in. As you mentioned, in October, the DOJ intervened to stay the discovery in the civil litigation, which is not uncommon when there's a parallel investigation going on. There is also a class action complaint filed in British Columbia, Canada, with similar allegations to the civil complaint in the United States. And then finally, last week, defendants filed a motion to dismiss in the civil litigation case. We argue that the complaint should be dismissed in their entirety. There's no deadline for the court to make a decision, but we anticipate that in calendar year '26.

Michael Pelletier: Got it. And look forward to seeing you in Florida in a few days.

Chuck MacFarlane: Thank you.

Operator: Our next call comes from Tim Winter of Gabelli Funds.

Timothy Winter: Congrats on the quarter. I know you guys talked a little bit about the 64% equity ratio and the [ $8 ] of cash on the balance sheet with some near-term need to take out that $80 million in debt. But I was just wondering if you could talk a little more how you're thinking about using that cash long term? I know you have plenty to use utility over the long term, but over the near term, just wondering if there's -- if that's the best way to maximize the cash or what your thinking is regarding that?

Todd Wahlund: Yes. So in terms of our capital allocation priorities. Certainly, our priority is investing in our businesses and with the significant rate base growth we have with Otter Tail Power, we do expect that cash balance will decline over the 5-year period as we invest and provide equity for that. We don't have any external equity needs. We'll be able to fund that with our cash that we have on hand. Beyond that, certainly looking at the dividend payout ratio, we did increase our dividend payout ratio or our dividend by 12% earlier this year. Beyond that, we would look at are there opportunistic M&A opportunities or opportunistic returns to shareholders.

But our primary focus is on the first 2 with funding the utility growth plan as well as providing capital back to our shareholders through the dividend.

Timothy Winter: Okay. Great. And on the M&A opportunities, what sorts of things are priorities of yours as you look at the environment out there?

Chuck MacFarlane: We would -- look, on the utility side, some potential assets. From M&A, we've not put a specific -- a lot of focus on that right now due to our internal growth opportunities available at the utility. In the Manufacturing or Plastics segments, we would review bolt-on opportunities, but we are not currently looking to add in any additional platforms or new companies that way. They would be smaller add-ons like we have done with BTD over time.

Todd Wahlund: And I'd just add, Tim, that we're positioned very well to execute on our growth plan without M&A for scale. We're positioned well to attract large loads. We've got the cash to fund our growth plan that's very significant.

Timothy Winter: Okay. And if I could just ask one more. Can you talk just a little bit about the large load customer and maybe how the electric service agreement is structured, that 155-megawatt customer?

Chuck MacFarlane: Yes. Tim, this is Chuck. It's a customer that is an interruptible type load. And so we have very minimal capacity needs. In the site location, the customer had limited interconnection costs, primarily distribution at that point. So it's a customer that will use low-cost energy in a storage function. And we don't see a large capacity need or a large investment need right at this point, so it's not driving significant earnings in the 2026 time frame, but it is reducing fixed costs across a big amount with that type of load.

Timothy Winter: Okay. All right, and we'll see you in sunny Florida.

Chuck MacFarlane: Thanks, Tim. Good to talk to you.

Operator: As there are no remaining questions in the queue, I will turn the call back over to Chuck for his closing remarks.

Chuck MacFarlane: Thank you for joining our call and your interest in Otter Tail Corporation. If you have any questions, please reach out to our Investor Relations team, and we look forward to speaking with you next quarter.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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