Good morning, and welcome to Otter Tail Corporation’s First Quarter 2025 Earnings Conference Call. Today’s call is being recorded. We will hold a question-and-answer session after the prepared remarks. I will now turn the call over to the company for their opening comments.

Good morning and welcome to our first quarter earnings conference call. My name is Tyler Nelson. I’m Otter Tail Corporation’s Vice President of Finance. Last night, we announced our first quarter financial results. Our complete earnings release and slides accompanying this call are available on our website at ottertail.com. A recording of this call will be available on our website later today. With me on the call are Chuck MacFarlane, Otter Tail Corporation’s President and CEO; and Todd Wahlund, Otter Tail Corporation’s Vice President and CFO. Before we begin, I want to remind you that we will be making forward-looking statements during the course of this call. As noted on Slide 2, these statements represent our current views and expectations of future events. They are subject to risks and uncertainties, which may cause actual results to differ from those presented here, so please be advised against placing undue reliance on any of these statements. Our forward-looking statements are described in more detail in our filings with the Securities and Exchange Commission, which we encourage you to review. Otter Tail Corporation disclaims any duty to update or revise our forward-looking statements due to new information, future events, developments or otherwise. I will now turn the call over to Otter Tail Corporation’s President and CEO, Mr. Chuck MacFarlane.

Well, thank you, Tyler, and good morning, and welcome to our first quarter earnings call. Please refer to Slide 4 as I begin my remarks with an overview of our first quarter highlights. I am proud of our team’s effort and execution during the first quarter of the year. Our financial results in Q1 met our expectations, and we are on target to achieve our annual earnings guidance. Otter Tail Power officially completed its North Dakota rate case, implementing base rates in March. In addition, the team achieved an important milestone in working towards bringing a new large load onto our electric system. And during the quarter, we also completed the expansion of our BTD, Georgia facility, an important project to enable future growth in our Southeast market. Slide 5 provides a summary of our first quarter financial results and the expectations for the remainder of the year. We produced diluted earnings per share of $1.62 in the first quarter, a decline from the first quarter of last year, but in line with our expectations and on target to achieve our 2025 annual earnings guidance. Our electric segment produced earnings growth in Q1, but as expected, earnings from our manufacturing and plastics segments declined based on industry conditions impacting these businesses. Our businesses are faced with a heightened level of uncertainty as we monitor developments in the U.S. trade policy and macroeconomic conditions. Overall, we are well positioned to weather this period of uncertainty given the strength of our balance sheet, including ample liquidity and an experienced management team. Despite this uncertainty, we are affirming our 2025 earnings guidance with a midpoint of $5.88 per share. In a moment, Todd will provide a more detailed discussion of our first quarter financial results as well as our outlook for the remainder…

Thank you, Chuck, and good morning, everyone. As illustrated on Slide 19, we produced diluted earnings per share of $1.62 in the first quarter of the year, an 8% decline from the same period last year. Please follow along on Slides 20 and 21 as I provide an overview of our first quarter results by segment. Electric segment earnings increased 10% in the first quarter, driven by favorable weather conditions compared to the same period last year, an increase in sales volumes and increased rider revenues from the recovery of our ongoing capital investments. Heating degree days in the first quarter of 2025 approximated normal levels, but were elevated compared to the first quarter of last year, which was unseasonably warm in our service territory. These increases in revenues were partially offset by increased depreciation and interest expense from our capital investments and associated financing costs. Manufacturing segment earnings decreased $0.09 per share, primarily due to lower sales volumes, along with increased production costs and unfavorable product mix and the impact of product pricing pressures. As Chuck mentioned, we continue to see soft end market demand, especially for recreational vehicles and agricultural equipment. Our team is focused on managing costs in the business, aligning our cost structure with the current demand environment. Despite the down cycle, the fundamentals of this segment remain strong, and we continue to benefit from the incremental earnings and cash flow generated by these businesses. Turning to Slide 21. Our Plastics segment produced diluted earnings per share of $1.03 in the first quarter of 2025, a decrease of 7% compared to the first quarter last year. This expected decline was driven by the continued reduction in product prices. The average sales price of PVC pipe declined 11% compared to the first quarter of 2024. This continues…

[Operator Instructions] Our first question comes from the line of Sophie Karp [indiscernible].

Hi. Good morning. Can you hear me.

Yes.

We hear you well.

Sophie.

Great. So thanks for taking my question. Just wanted to maybe start with the Plastics. I’m just kind of curious what kind of volumes you have assumed in the guidance for this year. Maybe you can help us think about this directionally? And I guess, looking at Slide 27 here, right, so if you have – if you expect to have an inflationary increase in input costs, why would you simultaneously expect the continued product price declines, right? So wouldn’t those factors be kind of like offsetting each other? The inflationary pressures in the industry would – could they be supportive of pricing? Thank you.

Yes. Thank you, Sophie, for the question. I’ll take the first one, and if I miss any of the questions you asked, just ask again here. So in terms of the volume for this year, it’s lower single digits increase in our volume. We had very strong volumes in Q1 increase over 2024. We expect to have strong increases in the second quarter as well, but our guidance reflects a potential downturn in the second half of the year just as we’re looking at housing starts and builder sentiment, we see that there is some risk in the second half of the year. So we factored that into our guidance, but we still expect to be wi based on that potential downturn in the second half of the year. In terms of the inflationary increases. So basically, our core assumption here on our normal Plastics earnings is that we revert back to the same gross margin percentages that we had pre-2021. So, at some point, those converge, and we expect to see that in that end of 2027 time frame. So as costs are increasing, prices are decreasing. Once we get to that gross margin percentage level, we expect that’s when we’ll see the new normal play out. So, we are factoring in basically the continued about 12% decrease in prices per year that we’ve been seeing since September of 2022. Did I catch all your questions, Sophie or did I miss anything?

Yes. Yes. No, I think this is great. And then if I can squeeze one more in. Is it – are you seeing yet any impact from some of your competitors – pipe competitors expanding capacity in your core regions? Or is it too early to kind of see that?

Sophie, we don’t have complete visibility into that, but we anticipate that competitors are doing similar to us in adding incremental line capacity at various sites or debottlenecking the sites that they have. To our knowledge, we’re not seeing new plants or that type of thing. But we anticipate that there are others replacing equipment, upgrading equipment, adding capacity, very similar to what we would be doing.

Got it. Thank you so much. That’s all from me.

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

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.

This concludes today’s conference call. Thank you for participating. You may now disconnect.