6 unchanged sentences
Our business strategy includes major capital investments at our operating companies.
−Removed: These capital projects are planned years in advance of their in-service dates and are subject to various risks including:
−Removed: adverse changes in regulatory treatment or public policy;
+Added: These capital projects are planned years in advance of their in-service dates and are subject to various risks including adverse changes in regulatory treatment or public policy;
changes in commodity pricing or construction costs;
16 unchanged sentences
These acute events could result in the interruption of our business operations and damage to our facilities.
−Removed: An extreme weather event within our utility service area could directly affect our capital assets, causing disruption in service to customers, and result in reduced operating revenues and repair or replacement costs, due to downed wires and poles or damage to other operating equipment.
+Added: We may not have sufficient insurance coverage to avoid adverse impacts to our operating results or financial condition from damage to our facilities or an interruption in our business.
+Added: An extreme weather event within our utility service area could directly affect our capital assets, causing disruption in service to customers, and result in reduced operating revenues and additional repair or replacement costs, due to downed wires and poles or damage to other operating equipment.
In the past, severe weather events in the Gulf Coast region of the U.S.
6 unchanged sentences
We may experience transition risks in moving towards low carbon generation and manufacturing.
−Removed: For example, we may face challenges with the adoption of new technologies, meeting changing customer expectations and committing to voluntary GHG emissions reduction goals, as well as complying with evolving local, state or federal regulatory requirements intended to reduce GHG emissions.
−Removed: The loss of, or significant reduction in revenue from, any of our key customers could have an adverse effect on our operating results.
−Removed: While no single customer provided more than 10% of our consolidated operating revenues, each of our segments have customers which accounted for over 10% of the segment’s operating revenues.
−Removed: In 2023, two customers accounted for 21% of Electric segment revenues, two customers combined to account for 30% of Manufacturing segment operating revenues and two customers combined to account for 36% of Plastics segment operating revenues.
−Removed: The loss of any one of these customers or a significant decline in sales to these customers, would have a significant negative impact on the segment's financial condition and operating results, and could have a significant negative impact on the Company’s consolidated financial condition, operating results and liquidity.
−Removed: We are subject to counterparty credit risk.
−Removed: We extend credit to our customers in the ordinary course of business in each of our operating segments.
−Removed: Our customers' ability to pay depends on a variety of factors including macroeconomic conditions, local economic conditions including unemployment rates, and industry conditions in which our customers operate.
−Removed: Increased customer delinquencies and bad debts could adversely impact our operating results and liquidity.
−Removed: T able of Contents
+Added: For example, we may face challenges with the adoption of new technologies, meeting changing customer expectations, ensuring reliability of electric service, and committing to voluntary GHG emissions reduction goals, as well as complying with evolving local, state or federal regulatory requirements intended to reduce GHG emissions.
Our operations are subject to environmental, health and safety laws and regulations.
7 unchanged sentences
Regulators have recently proposed additional chemicals be designated as hazardous substances, including a proposal to designate perfluorooctanesulfonic acid and perfluorooctanoic acid, two of the most common PFAS chemicals, as hazardous substances, which could have wide-ranging impacts on companies across various industries, including ours.
−Removed: We are investigating whether PFAS compounds are used in our manufacturing or operating processes that occur in our various businesses.
At this time, we cannot predict the outcome or the severity of the impact, if any, of future laws or regulations enacted to address PFAS.
+Added: Claims, litigation, government investigations and other proceedings may adversely affect our business, operating results and liquidity.
+Added: We are periodically subject to actual and threatened claims, litigation, investigations and other proceedings, including proceedings by governments and regulatory authorities, involving utilities regulation, competition and antitrust, product quality matters, and liability claims.
+Added: Any of these proceedings, including the currently ongoing proceedings related to our Plastics segment businesses, could have an adverse effect on our financial condition, operating results and liquidity.
+Added: It is possible that a resolution of one or more proceedings, including as a result of a settlement, could involve damages, sanctions, consent decrees or orders requiring us to make substantial future payments, prevent us from offering certain products or services, require us to change our business practices in a manner materially adverse to our business, otherwise disrupt our business, divert management resources, damage our reputation or otherwise have a material effect on our operations.
+Added: The outcomes of these matters are inherently unpredictable and subject to significant uncertainties, and we are unable to determine the likelihood of an outcome or estimate a range of reasonably possible losses, if any, arising from the proceedings at this time.
A cyber incident, security breach or system failure could adversely affect our business and operating results.
−Removed: The operation of our business is dependent on the secure functioning of our computer hardware and software systems, as well as that of third-party service providers and vendors we use to electronically process certain of our business transactions.
−Removed: Information systems, both ours and those of third parties, are vulnerable to security breaches by computer hackers and cyber terrorists, and the negligent or intentional breach of established controls and procedures, or mismanagement of confidential information by employees.
+Added: The operation of our business is dependent on the secure functioning of our computer hardware and software systems, as well as that of third-party service providers and vendors.
+Added: Information systems, both ours and those of third parties, are vulnerable to security breaches by computer hackers and cyber terrorists, system failures, the negligent or intentional breach of established controls and procedures or mismanagement of confidential information by employees.
Cyber-attacks or other security breaches may also be perpetrated through the use of artificial intelligence, which could introduce additional complexity to such an attack or breach.
While we employ a defense-in-depth strategy and regularly conduct cybersecurity assessments, we cannot be certain our information security systems and protocols and those of our vendors and other third parties are sufficient to withstand a cyber-attack or other security breach.
+Added: A system failure could result in a disruption to our business including, but not limited to, the inability to produce products or serve our customers.
+Added: A prolonged system failure could negatively impact our operating results.
A major cyber incident could result in significant expenses to investigate and repair security breaches or system damage, and could lead to litigation, fines, other remedial action, heightened regulatory scrutiny and damage to our reputation.
4 unchanged sentences
However, damage and claims arising from such incidents may not be covered or may exceed the amount of any available insurance.
+Added: The loss of or significant reduction in revenue from any of our key customers could have an adverse effect on our operating results.
+Added: In 2024, a single customer provided more than 10% of our consolidated operating revenues, and each of our segments have customers which accounted for over 10% of the segment’s operating revenues.
+Added: In 2024, two customers combined to account for 19% of Electric segment 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 more than 10% of our consolidated operating revenues.
+Added: The loss of any one of these customers or a significant decline in sales to these customers, would have a significant negative impact on the segment's financial condition and operating results, and could have a significant negative impact on the Company’s consolidated financial condition, operating results and liquidity.
The inability to attract and retain a qualified workforce could have an adverse effect on our operations.
2 unchanged sentences
The inability to attract and retain a skilled and stable workforce at necessary staffing levels, whether due to decreases in hiring rates, increases in employee retirements, increases in terminations, or any combination thereof, may negatively affect our ability to service our customers, manufacture products or successfully manage our business and achieve our objectives.
−Removed: Our acquisition or divestiture strategies are subject to risk and could adversely impact our financial position and operating results.
−Removed: As part of our business strategy, we continually assess our mix of businesses and potential strategic acquisitions or divestitures.
−Removed: This investment strategy is subject to various risks, including the ability to identify appropriate acquisition candidates, or successfully negotiate and finance any acquisitions.
−Removed: In addition, difficulties in integrating the operations, services, products and personnel of the acquired business, and the potential loss of key employees, customers and suppliers of the acquired business could adversely impact our financial condition and operating results.
FINANCIAL RISKS
3 unchanged sentences
If we are unable to access capital on acceptable terms and at reasonable costs, our ability to implement our business plans may be adversely affected.
−Removed: In addition, higher market interest rates on outstanding variable-rate, short-term indebtedness could also impact our operating results.
−Removed: In 2023, rising market interest rates caused the applicable rate of interest on our short-term indebtedness to increase significantly.
−Removed: However, the impact to our operating results was not significant due to our low level of outstanding borrowings on our short-term indebtedness.
−Removed: Our operating results could be
−Removed: T able of Contents
−Removed: impacted if we significantly increase our short-term borrowings or issue new long-term debt, and interest rates remain elevated or continue to increase.
+Added: In addition, higher market interest rates on outstanding variable-rate indebtedness could also impact our operating results.
A decrease in our credit ratings could increase our borrowing costs and result in additional contractual costs.
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A downgrade of our credit ratings could result in higher borrowing costs thereby negatively impacting our operating results and limiting our ability to access capital markets, which may negatively impact our ability to implement our business plans.
−Removed: In addition, OTP is a party to contracts that require the posting of collateral or settlement of applicable contracts if credit ratings fall below certain levels.
+Added: In addition, OTP is a party to contracts that require the posting of collateral or settlement of applicable contracts if credit ratings fall below certain levels, which may negatively impact our financial condition or liquidity.
Our pension and other postretirement benefit plans are subject to investment and interest rate risks.
4 unchanged sentences
We rely on our subsidiaries to provide sufficient earnings and cash flows to allow us to meet our financial obligations and pay dividends to our shareholders.
−Removed: Otter Tail Corporation is a holding company with no significant operations of its own.
+Added: OTC is a holding company with no significant operations of its own.
The primary source of funds for payment of our financial obligations and dividends to our shareholders is from cash provided by our subsidiary companies.
6 unchanged sentences
Changes in tax laws, regulations and interpretations could have an adverse effect on our financial condition and operating results.
−Removed: Tax law changes that reduce or eliminate production or investment tax credits (ITCs), or the ability to transfer or sell these credits, may impact the economics of constructing certain electric generation resources, which may impact our planned investments, and could adversely affect our financial condition and operating results.
+Added: Tax law changes that reduce or eliminate production or investment tax credits (ITCs), or the ability to transfer or sell these credits, or a failure to meet the compliance requirements to receive these credits, may impact the economics of constructing certain electric generation resources, which may impact our planned investments, and could adversely affect our financial condition and operating results.
ELECTRIC SEGMENT RISKS
−Removed: General economic and industry conditions impact our business.
−Removed: Several factors, many of which are beyond our control, may contribute to reduced demand for energy from our customers or increase the cost of providing energy to our customers.
−Removed: These risks include economic growth or decline in our service areas, demographic changes in our customer base and changes in customer demand or load growth due to, among other items, proliferation of distributed generation, energy efficiency initiatives and technological advancements.
−Removed: In addition, customer demand could be impacted by increased competition in our service territories or the loss of a service territory or franchise.
−Removed: Other risks include increased transmission or interconnection costs, generation curtailment and changes in the manner in which wholesale power is purchased and sold.
−Removed: A decrease in revenues or an increase in expenses related to our electric operations could negatively impact our financial condition, operating results and liquidity.
Our utility business is significantly impacted by government legislation and regulation.
OTP is subject to federal and state legislation and comprehensive regulation by federal and state regulatory agencies, including the public utility commissions in each of the three states in which OTP operates, and by the FERC.
−Removed: State utility commissions regulate, among other matters, the establishment of assigned service areas, the siting and construction of major facilities, the capital structure of the utility business, and the allowed rates to charge customers for providing energy and utility service.
−Removed: Each state utility commission operates independent of one another;
−Removed: therefore, OTP is subject to and must adhere to the decisions of each independent state commission.
−Removed: The FERC regulates, among other matters, wholesale energy transactions, hydroelectric licensing, transmission and sale of electric energy in interstate commerce, and the interconnection of electric facilities.
Our financial condition, operating results and liquidity are significantly impacted by and dependent upon our ability to recover the costs associated with providing utility service and earn a return on our utility capital investments.
7 unchanged sentences
An adverse decision by one or more regulatory authorities or any prolonged delay in rendering a decision in a rate or other proceeding could adversely impact our financial condition, operating results and liquidity.
−Removed: T able of Contents
Inflationary cost pressures have increased the cost of constructing our utility assets and operating our utility business.
2 unchanged sentences
Such limitations could negatively impact our financial position, operating results and liquidity.
−Removed: Our generating facilities are subject to risks that could result in early closure or the sale of our ownership interest.
−Removed: Changes in operational or economic factors, environmental regulation or risks of litigation could result in the early closure or the sale of our interest in a generating facility.
−Removed: In the event of an early closure, a significant asset impairment charge could be required, and we would be obligated to pay for our share of the costs of closure of the generating facility, including costs associated with decommissioning, remediation, reclamation and restoration of the property, and any costs of terminating contracts associated with the generating facility, such as coal supply arrangements.
−Removed: In the event of a sale of our interest in a generating facility, we may not be able to negotiate the sale on favorable terms, which could result in the recognition of a loss on the sale and other potential liabilities.
−Removed: There can be no assurance that we would be authorized by any of our state utility commissions to recover any costs or losses associated with the early closure of or sale of our interest in a generating facility.
−Removed: The loss of a major generating facility would require OTP to identify and obtain approval for other sources of generation for its customers, if available, and potentially expose us to higher purchased power costs.
−Removed: In addition, OTP may not be able to obtain timely regulatory approval for new generation resources to replace closed or sold facilities.
−Removed: Our IRP, as revised in two supplemental filings in 2023, outlined our plan to withdraw from our 35% ownership interest in Coyote Station, a jointly owned coal-fired generation plant, in the event we are required to make a major, non-routine capital investment in the plant.
−Removed: In the event we were to withdraw from our ownership, we will seek to recover all costs related to the withdrawal from Coyote Station;
−Removed: however, there is a risk we may not be granted recovery of such costs.
−Removed: A full or partial denial of recovery of the costs of withdrawal could significantly impact our operating results, financial condition and liquidity.
−Removed: Joint ownership of coal-fired generation facilities could impact our ability to manage changing regulations and economic conditions.
−Removed: We own our coal-fired generation facilities jointly with other co-owners with varying ownership interests in such facilities.
−Removed: Our ability to make determinations on our IRP in order to best navigate changing environmental regulations and economic conditions may be impacted by our rights and obligations under the co-ownership agreements and related agreements, and our ability to reconcile a divergence in the interests of OTP and the co-owners of these generation facilities.
−Removed: Such a divergence could impair our ability to effectively manage these changing conditions to meet our strategic objectives and could adversely impact our financial condition, operating results and liquidity.
−Removed: Federal and state environmental regulation could require us to incur substantial capital expenditures, increased operating costs or make it no longer economically viable to operate some of our facilities.
+Added: We may be unable to fully recover costs of our co-owned coal-fired generating facilities.
+Added: Changes in regulatory, operational or economic factors could result in the early closure or sale of or withdrawal from our interest in a coal-fired generating facility.
+Added: In the event of an early closure, a significant asset impairment charge could be required, and we would be obligated to pay for our share of the costs of closure of the generating facility.
+Added: In the event of a sale of our interest in a generating facility, we may be unable to negotiate the sale on favorable terms, which could result in the recognition of a loss on the sale.
+Added: There can be no assurance that we would be authorized by any of our state utility commissions to recover any costs or losses associated with the early closure or sale of our interest in a generating facility.
+Added: Our IRP, approved in Minnesota by the MPUC in May 2024, directs OTP to commence activities to no longer serve Minnesota customers with capacity or energy from Coyote Station as early as 2029.
+Added: The discontinuation of service to Minnesota customers from Coyote Station could result in stranded costs, which may significantly impact our operating results, financial condition and liquidity.
+Added: Environmental regulation could require us to incur substantial capital expenditures, increased operating costs or make it no longer economically viable to operate some of our facilities.
We are subject to federal, state and local environmental laws and regulations relating to air quality, water quality, waste management, natural resources and health safety.
3 unchanged sentences
Failure to comply with environmental laws and regulations, even if caused by factors beyond our control, may result in civil or criminal liabilities, penalties and fines.
−Removed: Coyote Station, one of OTP's jointly owned coal-fired power plants, is subject to assessment under the second implementation period of RHR as part of the state of North Dakota's RHR SIP.
−Removed: We cannot predict with certainty the impact the SIP may have on our business until the plan has been approved or otherwise acted on by the EPA, including its potential implementation of an alternative federal implementation plan.
−Removed: However, significant emission control investments could be required.
−Removed: Alternatively, investments in emission control equipment may prove to be uneconomic and result in the early closure or the sale of, or withdrawal from, our interest in Coyote Station.
+Added: Coyote Station, one of OTP's jointly owned coal-fired power plants, is subject to assessment under the second planning period of the RHR as part of the state of North Dakota's RHR SIP.
+Added: In December 2024, the EPA partially disapproved the North Dakota SIP related to Coyote Station and now must promulgate a Federal Implementation Plan.
+Added: The federal plan may include emission controls required to satisfy the requirements of the RHR.
+Added: We cannot predict with certainty the final resolution of regional haze compliance in North Dakota and specifically the impact, if any, on the operations of Coyote Station.
+Added: However, significant emission control investments could be required which may have a material impact on our operating results, financial condition and liquidity.
+Added: Alternatively, such investments may prove to be uneconomic and result in the early closure, sale of, or withdrawal from, our interest in Coyote Station.
Existing environmental laws or regulations may be revised, and new laws or regulations may be adopted or become applicable to us.
The multiple jurisdictions that govern our electric utility business may not agree as to the appropriate resource mix, which may lead to costs incurred to comply with one jurisdiction that are not recoverable across all jurisdictions served by the same assets.
−Removed: Revised or additional regulations which result in increased compliance costs or additional operating restrictions, particularly if those costs are not fully recoverable from customers, could have a material effect on our financial condition, operating results and liquidity, making the operation of some of our facilities no longer economically viable.
−Removed: Legislation, regulation, litigation or other actions related to climate change and greenhouse gas emissions could materially impact us.
−Removed: Current and future federal, state, regional and international regulations to address global climate change and reduce GHG emissions, including measures such as mandated levels of renewable generation, mandatory reductions in CO 2 emission levels, taxes on CO 2 emissions, or cap-and-trade regimes, could require us to incur significant costs which could negatively impact our financial condition, operating results and liquidity if such costs cannot be recovered through rates granted by rate-making authorities or through increased market prices for electricity.
−Removed: In 2021, the Biden Administration introduced new targets aimed at reducing economy-wide net GHG emissions by 50% to 52% from 2005 levels by 2030.
−Removed: In addition, the Administration set a goal to reach 100% carbon pollution-free electricity by 2035.
−Removed: As a part of achieving these targets, the EPA proposed new regulations in May 2023 under Section 111 of the Clean Air Act to regulate GHG emissions from existing and new fossil fuel-based EGUs.
−Removed: As detailed above, this proposal would require states to implement stringent emissions standards for most coal-fired steam generating units and certain larger natural gas combustion plants.
−Removed: Until the EPA takes final action on this rulemaking, we are unable to evaluate the precise impacts;
−Removed: however, the proposed rule has the potential to impact the emissions controls needed at OTP’s coal-fired power plants, which could have an impact on our operating results, financial condition and liquidity.
−Removed: The EPA may implement additional new regulations targeting power plants to
−Removed: T able of Contents
−Removed: support its aforementioned economy-wide GHG reduction goals, which could impose substantial costs on and impact the operations of our utility business, which may materially impact our financial condition, operating results and liquidity.
+Added: or additional regulations which result in increased compliance costs or additional operating restrictions, particularly if those costs are not fully recoverable from customers, could have a material effect on our financial condition, operating results and liquidity, making the operation of some of our facilities no longer economically viable.
+Added: Actions to address climate change and greenhouse gas emissions could materially impact us.
+Added: Current and future federal, state, regional and international legislation and regulations to address global climate change and reduce GHG emissions, including measures such as mandated levels of renewable generation, mandatory reductions in CO 2 emission levels, taxes on CO 2 emissions, or cap-and-trade regimes, could require us to incur significant costs, which could negatively impact our financial condition, operating results and liquidity if such costs cannot be recovered through rates granted by rate-making authorities or through increased market prices for electricity.
+Added: In May 2024, the EPA finalized new regulations under Section 111 of the Clean Air Act to regulate GHG emissions from existing and new fossil fuel-based power plants.
+Added: The new regulations require existing coal-fired power plants to achieve certain CO 2 emissions reduction levels, with the amount of reduction dependent upon the remaining operating life of the facility.
+Added: The new regulation has the potential to materially impact the operations of our coal-fired power plants, which could have a material impact on our operating results, financial condition and liquidity.
In addition to complying with legislation and regulation, we could be subject to litigation related to climate change.
−Removed: In recent years, there has been an increase in litigation against electric utilities and fossil fuel producers.
−Removed: If OTP were subjected to such litigation, the costs of such litigation could be significant and an adverse outcome could require substantial capital expenditures, changes in operations and possible payment of penalties or damages which could affect our financial condition, operating results and liquidity if the costs are not recoverable in rates or covered by insurance.
+Added: If we were subjected to such litigation, the costs of such litigation could be significant and an adverse outcome could require substantial capital expenditures, changes in operations and possible payment of penalties or damages, which could affect our financial condition, operating results and liquidity if the costs are not recoverable in rates or covered by insurance.
+Added: General economic and industry conditions impact our business.
+Added: Several factors, many of which are beyond our control, may contribute to reduced demand for energy from our customers or increase the cost of providing energy to our customers.
+Added: These risks include economic growth or decline in our service areas, demographic changes in our customer base and changes in customer demand or load growth due to, among other items, proliferation of distributed generation, energy efficiency initiatives and technological advancements.
+Added: In addition, customer demand could be impacted by increased competition in our service territories or the loss of a service territory or franchise.
+Added: Other risks include increased transmission or interconnection costs, generation curtailment and changes in the manner in which wholesale power is purchased and sold.
+Added: A decrease in revenues or an increase in expenses related to our electric operations could negatively impact our financial condition, operating results and liquidity.
Violations of extensive legal and regulatory compliance requirements could have a negative impact on our business and results of operations.
6 unchanged sentences
However, there is no guarantee our compliance program will be sufficient to ensure against violations.
−Removed: In addition, energy policy initiatives at the state or federal level could increase incentives for distributed generation, or authorize municipal utility formation or acquisition of service territory, or local initiatives could introduce generation or distribution requirements that could change the current integrated utility model.
These laws and regulations significantly influence our operations and may affect our ability to recover costs from our customers.
3 unchanged sentences
Changes in regulations or the imposition of additional regulations could have a material adverse impact on our financial condition, operating results and liquidity.
−Removed: Our transmission and generation facilities could be vulnerable to cyber and physical attack.
−Removed: OTP owns electric transmission and generation facilities subject to mandatory and enforceable standards advanced by the NERC.
+Added: Our generation, transmission and distribution facilities could be vulnerable to cyber and physical attack.
+Added: OTP owns electric transmission, distribution and generation facilities subject to mandatory and enforceable standards advanced by the NERC.
These bulk electric system facilities provide the framework for the electrical infrastructure of OTP’s service territory and interconnected systems, the operation of which is dependent on information technology systems.
6 unchanged sentences
OTP is subject to mandatory cybersecurity and physical security regulatory requirements.
−Removed: OTP implements the NERC standards for operating its transmission and generation assets and remains abreast of best practices within the business and the utility industry to protect its computers and computer-controlled systems from outside attack.
+Added: OTP implements the NERC standards for operating its transmission and generation assets and remains abreast of best practices within the business and the utility industry to
+Added: protect its computers and computer-controlled systems from outside attack.
We rely on industry-accepted security measures and technology to securely maintain confidential and proprietary information necessary for the operation of our systems.
In an effort to reduce the likelihood and severity of cyber intrusions, we have cybersecurity processes and controls, and disaster recovery plans designed to protect and preserve the confidentiality, integrity and availability of data and systems.
−Removed: We also take prudent and reasonable steps to protect the physical security of our generation and transmission facilities.
+Added: We also take prudent and reasonable steps to protect the physical security of our transmission, distribution and generation facilities.
However, all these measures and technology may not adequately prevent security breaches, ransomware attacks or other cyber-attacks, or enable us to recover effectively from such a breach or attack.
8 unchanged sentences
If the amount of insurance is insufficient or otherwise unavailable, and if we are unable to fully recover in rates the costs of uninsured losses, our financial condition, operating results and liquidity could be materially affected.
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+Added: Joint ownership of coal-fired generation facilities could impact our ability to manage changing regulations and economic conditions.
+Added: We own our coal-fired generation facilities jointly with other co-owners with varying ownership interests in such facilities.
+Added: Our ability to make determinations to best navigate changing environmental regulations and economic conditions may be impacted by our rights and obligations under the co-ownership and related agreements, and our ability to reconcile a divergence in the interests of OTP and the co-owners of these generation facilities.
+Added: Such a divergence could impair our ability to effectively manage these changing conditions to meet our strategic objectives, and could adversely impact our financial condition, operating results and liquidity.
+Added: We are subject to risks associated with energy and capacity markets.
+Added: Our electric business is subject to the risks associated with energy and capacity markets, including changes in market supply, energy and capacity prices.
+Added: If we need to procure market energy and are faced with shortages in market supply, we may be unable to fulfill our contractual obligations to our retail, wholesale and other customers at previously anticipated costs.
+Added: This could force us to obtain alternative energy or fuel supplies at higher costs or suffer increased liabilities for unfulfilled contractual obligations.
+Added: Changes in our own generation capacity or market capacity, including from changes in capacity accreditation, could lead to increased capacity prices.
+Added: Significantly higher than expected energy or capacity costs could negatively affect our financial condition, operating results and liquidity.
We are subject to risks associated with the procurement and transportation of fuel to our coal and natural gas-powered generation facilities.
We rely on a limited number of suppliers to provide coal and a limited number of service providers to transport coal and natural gas to our facilities.
−Removed: A counterparty's failure to perform their obligations may arise due to liquidity challenges or insolvency, operational deficiencies or other circumstances such as severe weather or natural disasters, which could impact our ability to provide service to our customers or require us to seek alternative sources for these products and services, if available.
+Added: A counterparty's failure to perform their obligations may arise due to liquidity challenges or insolvency, operational deficiencies or other circumstances such as severe weather or natural disasters and could impact our ability to provide service to our customers or require us to seek alternative sources for these products and services, if available.
A prolonged failure to perform by one or more of our current suppliers or service providers could lead to increased costs or other consequences, which could negatively impact our financial condition, operating results and liquidity.
−Removed: We are subject to risks associated with energy markets.
−Removed: Our electric business is subject to the risks associated with energy markets, including market supply and changing energy prices.
−Removed: If we are faced with shortages in market supply, we may be unable to fulfill our contractual obligations to our retail, wholesale and other customers at previously anticipated costs.
−Removed: This could force us to obtain alternative energy or fuel supplies at higher costs, or suffer increased liabilities for unfulfilled contractual obligations.
−Removed: Any significantly higher than expected energy or fuel costs could negatively affect our financial condition, operating results and liquidity.
MANUFACTURING SEGMENT RISKS
+Added: We are impacted by our customers' strategies, operational decisions and conditions in the end markets they serve .
+Added: Our manufacturing businesses derive a large amount of their revenues from customers in the following industry sectors:
+Added: recreational vehicle/powersports, lawn and garden, construction, agriculture, industrial, energy and horticulture.
+Added: Factors affecting any of these industries in general could adversely affect our operating results, as growth in our operating revenues is largely dependent on the growth of our customers’ businesses in their respective industries.
+Added: These factors include:
+Added: • our customers’ failure to successfully market their products, gain or retain widespread commercial acceptance of their products or compete effectively in their industries;
+Added: • loss of market share for our customers’ products, which may lead our customers to reduce or discontinue purchasing our products and components and to reduce prices, thereby exerting pricing pressure on us;
+Added: • economic conditions in the markets in which our customers operate, the United States in particular, including recessionary periods such as a global economic downturn;
+Added: • our customers’ decisions to bring the production of components in-house that have traditionally been outsourced to us;
+Added: • seasonality of demand for our customers’ products, which may cause our manufacturing capacity to be underutilized for periods of time;
+Added: • product design changes or manufacturing process changes that may reduce or eliminate demand for the components we supply.
+Added: We expect future sales will continue to depend on the success of our customers.
+Added: If economic conditions or demand for our customers’ products deteriorates, we may experience a material adverse effect on our financial condition, operating results and liquidity.
The price and availability of raw materials could adversely impact our operating results.
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If we are unable to compete in these and potentially other areas, our business and financial condition, operating results and liquidity could be adversely impacted.
−Removed: Economic conditions in the end markets in which our customers operate could have an adverse impact on our operating results and liquidity .
−Removed: Our manufacturing businesses derive a large amount of their revenues from customers in the following industry sectors:
−Removed: recreational vehicle/powersports, lawn and garden, construction, agriculture, energy and horticulture.
−Removed: Factors affecting any of these industries in general could adversely affect our operating results as growth in our operating revenues is largely dependent on the growth of our customers’ businesses in their respective industries.
−Removed: These factors include:
−Removed: • seasonality of demand for our customers’ products which may cause our manufacturing capacity to be underutilized for periods of time;
−Removed: • our customers’ failure to successfully market their products, gain or retain widespread commercial acceptance of their products or compete effectively in their industries;
−Removed: • loss of market share for our customers’ products which may lead our customers to reduce or discontinue purchasing our products and components and to reduce prices, thereby exerting pricing pressure on us;
−Removed: • economic conditions in the markets in which our customers operate, the United States in particular, including recessionary periods such as a global economic downturn;
−Removed: • our customers’ decisions to bring the production of components in-house that have traditionally been outsourced to us;
−Removed: • product design changes or manufacturing process changes that may reduce or eliminate demand for the components we supply.
−Removed: We expect future sales will continue to depend on the success of our customers.
−Removed: If economic conditions or demand for our customers’ products deteriorates, we may experience a material adverse effect on our financial condition, operating results and liquidity.
Our business may be adversely affected if we are not able to maintain our manufacturing, engineering and technological expertise.
8 unchanged sentences
The acquisition and implementation of new technologies and equipment may require us to incur significant expense and capital investment, which could reduce our margins and affect our operating results.
−Removed: When we establish or acquire new facilities, we may not be able to maintain or develop our manufacturing, engineering and technological expertise due to a lack of trained
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−Removed: personnel, ineffective training of new staff or technical difficulties with machinery.
−Removed: Failure to anticipate and adapt to customers’ changing technological needs and requirements and to maintain manufacturing, engineering and technological expertise may have material adverse effects on our financial condition, operating results and liquidity.
+Added: Failure to anticipate and adapt to customers’ changing technological needs and requirements and to
+Added: maintain manufacturing, engineering and technological expertise may have material adverse effects on our financial condition, operating results and liquidity.
PLASTICS SEGMENT RISKS
−Removed: External factors beyond our control could cause fluctuations in demand for our PVC pipe products and changes in our prices and margins, which could adversely impact our operating results.
+Added: External factors beyond our control could cause fluctuations in demand for and pricing of our PVC pipe products.
Our PVC pipe products, sold through distributors and wholesalers, are primarily used in municipal and rural water projects, wastewater projects, storm drainage systems and reclamation systems.
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• funding shortages for municipal water and wastewater projects.
−Removed: Extraordinary industry supply and demand dynamics beginning in 2021 and continuing through 2023 led to a rapid and significant increase in sales prices for PVC pipe and led to a significant expansion in our operating margins.
−Removed: As industry conditions normalize, sales prices for PVC pipe are expected to moderate from current levels resulting in decreased operating margins prospectively.
−Removed: The pace and magnitude of the decline in product pricing could materially impact our operating results.
+Added: Sales prices for PVC pipe began to significantly increase in 2021, reaching a peak level in mid-2022.
+Added: Pipe prices have since retreated from the high point but remain elevated compared to historic levels.
+Added: Elevated pipe prices led to a significant expansion in our operating margins and cash generation.
+Added: We expect sales prices for PVC pipe to continue to decline, which will cause a decline in operating margins and cash generation prospectively.
+Added: The pace and magnitude of the decline in product pricing could materially impact our operating results and liquidity.
Changes in PVC resin prices could negatively affect our plastics business.
−Removed: The PVC pipe industry is highly sensitive to commodity raw material pricing volatility.
−Removed: Historically, when resin prices were rising or stable, margins and sales volumes were higher and when resin prices were falling, sales volumes and margins were lower.
−Removed: Changes in PVC resin prices can negatively affect PVC pipe prices, profit margins on PVC pipe sales and the value of our finished goods inventory.
+Added: The cost of PVC resin is based on global supply and demand conditions, which can create volatile pricing.
+Added: Changes in PVC resin cost prices can negatively affect PVC pipe prices and profit margins on PVC pipe sales.
Our plastics operations are highly dependent on a limited number of vendors and a limited supply of PVC resin and other materials.
We rely on a limited number of vendors to supply the PVC resin used in our plastics businesses.
−Removed: In 2023, we sourced all of our PVC resin needs from three vendors.
+Added: In 2024, we sourced all of our PVC resin needs from four vendors.
In addition, the supply of PVC resin may be limited primarily due to manufacturing capacity and the limited availability of raw material components.
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We generally source these materials from a limited number of suppliers and any significant supply chain constraints or disruptions related to these materials could also disrupt our ability to manufacture or ship products and could result in increased costs.
−Removed: We compete against many other manufacturers of PVC pipe and manufacturers of alternative products.
−Removed: Customers may not distinguish our products from those of our competitors.
−Removed: The plastic pipe industry is fragmented and competitive due to the number of producers and the fungible nature of the product.
−Removed: We compete not only against other plastic pipe manufacturers, but also against ductile iron, steel and concrete pipe manufacturers.
−Removed: Due to shipping costs, competition is usually regional instead of national in scope and the principal areas of competition are a combination of price, service, warranty and product performance.
−Removed: Our inability to compete effectively in each of these areas and to distinguish our plastic pipe products from competing products may adversely affect the financial performance of our plastics businesses.
+Added: We compete against other manufacturers of PVC pipe and manufacturers of alternative products.
+Added: Competition in the plastic pipe industry arises from other PVC pipe manufacturers and the fungible nature of the product.
+Added: Certain of the companies we compete with have a broader geographical reach, integration with PVC resin producers, greater manufacturing capacity and national relationships with key distribution partners.
+Added: In addition to competing with other plastic pipe manufacturers, our products also complete against similar products serving the same end markets, including ductile iron, HDPE, steel and concrete pipe.
+Added: Our inability to compete effectively on product price, customer service and product performance may adversely affect the financial performance of our plastics businesses.
GENERAL RISK FACTORS
−Removed: Economic conditions could negatively impact our businesses.
−Removed: Our businesses are affected by local, national and worldwide economic conditions, including the impact of inflation, tightening of credit in financial markets, economic recessions or other changes in economic conditions.
−Removed: Our businesses may be adversely affected by decreases in the general level of economic activity, such as decreases in business and consumer spending.
−Removed: A decline in the level of economic activity and uncertainty regarding energy and commodity prices could adversely affect our results of operations and our future growth.
−Removed: Inflationary pressures may lead to rising material and commodity costs and increased labor costs.
−Removed: Our operating results and liquidity would be adversely impacted if we were unable to recover these increased costs from our customers.
−Removed: Tightening of credit in financial markets could adversely affect the ability of customers to finance purchases of our goods and services, resulting in decreased orders, cancelled or deferred orders, slower payment cycles, and increased bad debt and customer bankruptcies.
+Added: Changes in economic conditions and economic policies could negatively impact our businesses.
+Added: Our businesses are affected by local, national and worldwide economic conditions.
+Added: Economic recessions, inflation, changes in commodity prices, changes in interest rates and tightening of credit in financial markets could adversely affect our operating results, financial condition and liquidity.
+Added: In addition, changes in government policies, including trade regulations and tariffs, could impact our businesses, including increasing our costs of materials, negatively impacting our supply chain, reducing sales volumes of our products or services, or disrupting the competitive environment in which we operate.
+Added: A broad increase in tariffs may also lead to elevated inflation and increased interest rates, which may negatively impact national economic conditions and impact our operating results, financial condition and liquidity.
If we are unable to achieve the organic growth we expect, our financial performance may be adversely affected.
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To achieve the organic growth we expect, we must have access to the capital markets, be successful with capital expansion programs related to organic growth, develop new products and services, expand our markets and increase efficiencies in our businesses.
−Removed: Competitive and economic factors could adversely
−Removed: T able of Contents
−Removed: affect our ability to do this.
+Added: Competitive and economic factors could adversely affect our ability to do this.
If we are unable to achieve and sustain consistent organic growth, we will be less likely to meet our earnings growth targets, which may adversely affect the market price of our common shares.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.