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Segment Information
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Segment Information Segment Information
Our business is comprised of three reportable segments, Electric, Manufacturing and Plastics, consistent with our business strategy, organizational structure and our internal reporting and review processes. Our chief operating decision maker (CODM) is our Chief Executive Officer. Segment net income is the sole measure of segment profit or loss used by our CODM in assessing segment performance and allocating resources to our segments. Our CODM uses segment net income in assessing financial performance on a monthly basis, reviewing and approving annual operating budgets and periodic forecasts, allocating capital or financial resources to our segments, making strategic decisions and measuring returns on equity in comparison to internal thresholds or peer entities.
The operations of our three reportable segments are further described below. We have aggregated two operating segments within our Manufacturing reportable segment based on the similarity between these businesses and their economic characteristics.
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 MISO markets. OTP’s operations have been our primary business since 1907.
Manufacturing consists of businesses in the following manufacturing activities: contract machining, metal parts stamping, fabrication and painting, and production of plastic thermoformed horticultural containers, life science and industrial packaging, and material handling components. These businesses have manufacturing facilities in Georgia, Illinois and Minnesota and sell products primarily in the United States.
Plastics consists of businesses producing PVC pipe at plants in North Dakota and Arizona. The PVC pipe is sold primarily in the western half of the United States and Canada.
Segment Profit or Loss
Information about each segment, including significant expenses and net income of each segment, for the years ended December 31, 2024, 2023 and 2022 are as follows:
Electric Segment
(in thousands)202420232022
Operating Revenue$524,515 $528,359 $549,699 
Production Fuel and Purchased Power122,506 138,631 165,391 
Operating and Maintenance Expenses190,422 191,263 181,378 
Depreciation and Amortization82,136 75,330 72,050 
Property Taxes15,662 16,614 17,742 
Interest Expense38,216 33,864 31,950 
Income Tax Expense (Benefit)
(1,544)1,648 5,065 
Other Segment Items(1)
(13,846)(13,415)(3,851)
Net Income$90,963 $84,424 $79,974 
(1) Other segment items includes nonservice components of postretirement benefits, allowance for funds used during construction, and other expenses (income).
Manufacturing Segment
(in thousands)202420232022
Operating Revenue$342,592 $402,781 $397,983 
Cost of Goods Sold283,390 324,245 327,228 
Selling, General, and Administrative Expenses40,110 49,396 41,690 
Interest Expense2,516 2,295 2,796 
Income Tax Expense2,895 5,390 5,321 
Other Segment Items— 1 (2)
Net Income$13,681 $21,454 $20,950 
Plastics Segment
(in thousands)202420232022
Operating Revenue$463,441 $418,026 $512,527 
Cost of Goods Sold166,628 143,521 227,571 
Selling, General, and Administrative Expenses24,908 20,103 20,378 
Interest Expense590 602 585 
Income Tax Expense70,644 66,066 68,688 
Other Segment Items(76)(14)(69)
Net Income$200,747 $187,748 $195,374 
Capital Expenditures and Identifiable Assets
The following provides capital expenditures for each reportable segment and our corporate cost center for the years ended December 31, 2024, 2023 and 2022:
(in thousands)202420232022
Capital Expenditures
Electric301,454 240,695 147,869 
Manufacturing32,159 23,284 17,954 
Plastics24,749 23,029 5,245 
Corporate288 126 66 
Total
$358,650 $287,134 $171,134 
The following provides the identifiable assets by segment and corporate assets as of December 31, 2024 and 2023:
(in thousands)20242023
Identifiable Assets
Electric$2,785,522 $2,533,831 
Manufacturing254,445 251,343 
Plastics186,043 164,179 
Corporate426,072 293,215 
Total
$3,652,082 $3,242,568 
Corporate assets consist primarily of cash and cash equivalents, prepaid expenses, investments and fixed assets.
Reconciliation to Consolidated Amounts
Certain costs are not allocated to our operating segments. Corporate operating costs include items such as corporate staff and overhead costs, the results of our captive insurance company and other items excluded from the measurement of operating segment performance. Corporate is not an operating segment, rather it is added to operating segment totals to reconcile to consolidated amounts.
Included below is a reconciliation of certain segment information and our unallocated corporate costs to consolidated amounts for the years ended December 31, 2024, 2023 and 2022:
(in thousands)202420232022
Depreciation and Amortization
Electric$82,136 $75,330 $72,050 
Manufacturing20,393 18,495 16,202 
Plastics4,494 4,027 4,205 
Corporate98 102 140 
Total
107,121 97,954 92,597 
Interest Expense
Total Interest Expense of Reportable Segments41,322 36,761 35,331 
Corporate Interest Expense493 916 685 
Total
41,815 37,677 36,016 
Income Tax Expense (Benefit)
Total Income Tax Expense of Reportable Segments71,995 73,104 79,074 
Corporate Income Tax Benefit(6,765)(3,806)(5,723)
Total
65,230 69,298 73,351 
Net Income (Loss)
Total Net Income of Reportable Segments305,391 293,626 296,298 
Corporate Net Income (Loss)(3,729)565 (12,114)
Total
301,662 294,191 284,184 
Concentrations
Our Plastics segment businesses use PVC resin as a critical component within their PVC pipe manufacturing process. There are a limited number of PVC resin suppliers in the U.S., and in 2024 we sourced all of our PVC resin needs from four vendors. Although there are a limited number of PVC resin suppliers, we believe that other suppliers could provide PVC resin on comparable terms. Additionally, most U.S. resin production plants are located in the Gulf Coast region. These plants are subject to the risk of damage and production shutdowns because of exposure to hurricanes or other extreme weather events that occur in this region. The loss of a key vendor, or any interruption or delay in the supply of PVC resin could cause production delays, a possible loss of sales or result in increased costs to secure resin, all of which would adversely affect our operating results.
For the year ended December 31, 2024, two customers combined accounted for 19% of Electric segment operating revenues, two customers combined to account for 36% of Manufacturing segment operating revenues and two customers combined to account for 52% of Plastics segment operating revenues, with one of those customers providing 11% of our consolidated operating revenues.
Entity-Wide Information
All of our long-lived assets are located within the United States and substantially all of our operating revenues are from customers located within the United States.