Otter Tail Corporation Announces Strong First Quarter Earnings and Reaffirms 2013 Earnings Guidance

Otter Tail Corporation Announces Strong First Quarter Earnings and Reaffirms
2013 Earnings Guidance

FERGUS FALLS, Minn., May 6, 2013 (GLOBE NEWSWIRE) -- Otter Tail Corporation
(Nasdaq:OTTR) today announced financial results for the quarter ended March
31, 2013.

Summary:

  *Consolidated net income and diluted earnings from continuing operations
    totaled $15.2 million and $0.41 per share, respectively, compared with
    $10.2 million and $0.28 per share for the first quarter of 2012.
  *Consolidated net income and diluted earnings from continuing and
    discontinued operations totaled $15.4 million and $0.41 per share,
    respectively, compared with $7.2 million and $0.20 per share for the first
    quarter of 2012.
  *Consolidated revenues from continuing operations were $218.0 million
    compared with $219.9 million for the first quarter of 2012.

CEO Overview

"We are pleased with our 2013 first quarter results," said Otter Tail
Corporation President and CEO Jim McIntyre. "We have continued the execution
of our strategy to reduce the number of platforms and operating companies. Our
initiatives to drive operational excellence and improved financial performance
within this much tighter and stronger portfolio of companies are beginning to
pay off.

"Earnings from our Electric segment met our expectations as a result of more
seasonally normal weather in the first quarter of 2013 compared with the
unusually mild winter of 2012. Net income for the Electric segment was up 8.3%
over 2012 as a result of the impact of the weather on sales and increased
revenues from returns on investments in CapX2020 and Midwest Transmission
System Operator (MISO) Multi-Value Projects (MVPs).

"Our Plastics segment, which includes PVC pipe manufacturers Northern Pipe
Products and Vinyltech, had a very strong quarter, experiencing
higher-than-expected sales volumes and net income, with slightly improved
margins. Sales volume from our Vinyltech plant in Arizona increased 11.1% as
housing markets began to show improvement in South Central and Southwest
regions of the United States. Sales volume from Northern Pipe Products in
Fargo increased 2.0%, despite the harsh winter in the region.

"Our Construction segment reported a $3.1 million reduction in net losses
quarter over quarter. Foley, our mechanical and prime contractor on industrial
projects, which had experienced cost overruns in 2012, showed substantial
improvement due mainly to modifications of Foley's internal bidding and
estimating project review procedures, and deployment of additional resources.
The adverse weather throughout the Midwest has resulted in delays and higher
project costs for Aevenia, our electrical contractor. Consequently, despite
the overall stronger execution by Foley, first quarter Construction segment
performance fell short of our expectations.

"Earnings from our Manufacturing segment were down slightly compared with
first quarter 2012, but in line with management's expectations. Despite
revenues decreasing 10.5% from first quarter 2012, segment net income was down
by only 4.2%, due to continued improvement in operations at BTD and T.O.
Plastics.

McIntyre concluded, "Based on continued strong results from our plastic pipe
companies, which far exceeded our expectations for the first quarter of 2013,
we are adjusting our earnings guidance by segment but reaffirming our overall
guidance for 2013 diluted earnings per share from continuing operations of
$1.30 to $1.55. With a solid first quarter behind us, we remain confident we
are on course and on strategy for the year."

Cash Flow from Operations, Liquidity and Financing

The corporation's consolidated cash flow from continuing operations for the
quarter ended March 31, 2013 was $10.2 million compared with $9.0 million for
the quarter ended March 31, 2012. The following table presents the status of
the corporation's lines of credit as of March 31, 2013:

                              In Use On Restricted due to       Available on
(in thousands)     Line Limit March 31, Outstanding Letters of  March 31, 2013
                              2013      Credit
Otter Tail
Corporation Credit $ 150,000  $ --      $ 733                   $ 149,267
Agreement
Otter Tail Power
Company Credit     170,000    1,271     3,264                   165,465
Agreement
Total              $ 320,000  $ 1,271   $ 3,997                 $ 314,732

On March 1, 2013 Otter Tail Power Company entered into a Credit Agreement with
JPMorgan Chase Bank, N.A. providing for a $40.9 million unsecured term loan
due June 1, 2014, which was fully drawn on March 1, 2013, with $25.1 million
of the proceeds used to fund the redemption of all the 4.65% Grant County,
South Dakota Pollution Control Refunding Revenue Bonds and 4.85% Mercer
County, North Dakota Pollution Control Refunding Revenue Bonds outstanding on
that date. Also on March 1, 2013, Otter Tail Power Company utilized
approximately $15.7 million of loan proceeds to satisfy an intercompany note
to the corporation that represented the corporation's cumulative preferred
shares which were redeemed on March 1, 2013. Borrowings under the Credit
Agreement bear interest at LIBOR plus 0.875%.

Board of Directors Declared Quarterly Dividends

As previously announced, on May 3, 2013 the corporation's Board of Directors
declared a quarterly common stock dividend of $0.2975 per share. This dividend
is payable June 10, 2013 to shareholders of record on May 15, 2013.

Segment Performance Summary

Electric

Electric revenues and net income were $101.0 million and $11.9 million,
respectively, compared with $90.0 million and $11.0 million for the first
quarter of 2012. Electric retail revenues increased $10.9 million, as a result
of:

  *a $6.6 million increase in revenue related to an 8.8% increase in retail
    kilowatt-hour (kwh) sales resulting from colder weather in the first
    quarter of 2013 compared with the first quarter of 2012, as evidenced by a
    33.8% increase in heating-degree days between the quarters,
  *a $3.6 million increase in revenue related to higher fuel and purchased
    power prices, in part due to increased market demand for electricity
    caused by the colder winter and in part due to having to use higher cost
    generation sources and power purchases to meet the increased demand,
  *a $0.5 million increase in Transmission Cost Recovery Rider revenues in
    Minnesota as a result of increased investment in transmission assets, and
  *a $0.2 million increase in Renewable Resource Cost Recovery Rider revenue
    in North Dakota.

Wholesale electric revenues from company-owned generation decreased $0.4
million, despite a 16.4% increase in wholesale electric prices, mainly as a
result of a 32.5% decrease in wholesale kwh sales, as a greater proportion of
available generation was used to serve retail load.

Other electric operating revenues increased $0.6 million as a result of:

  *a $1.3 million increase in MISO Schedules 26 and 26A transmission tariff
    revenue, driven in part by returns on and recovery of CapX2020 and
    MISO-designated MVP investment costs and operating expenses,

offset by:

  *a $0.7 million reduction in MISO Schedule 1 transmission tariff revenue
    related to a tariff change that went into effect on August 28, 2012.

Net margins on forward energy contracts decreased $0.1 million between the
quarters.

Fuel costs increased $2.5 million as a result of an 11.4% increase in kwhs
generated from Otter Tail Power Company's steam-powered and combustion turbine
generators, combined with a 4.5% increase in the cost of fuel per kwh
generated. Generation levels increased in response to higher demand due to
more seasonal weather in the first quarter of 2013 compared to the first
quarter of 2012. The average cost of fuel per kwh of generation increased, in
part, because Otter Tail Power Company's Coyote Station was shut down for
generator repairs during the first seven weeks of 2013.

The cost of purchased power for retail sales increased $2.5 million as a
result of a 14.9% increase in kwhs purchased, combined with a 2.3% increase in
the cost per kwh purchased. The increase in kwhs purchased was driven by
increased demand due to the colder weather in 2013.

Electric operating and maintenance expenses increased $2.7 million mainly due
to the following:

  *a $1.1 million increase in MISO Schedules 26 and 26A transmission service
    charges related to increasing investments in regional CapX2020 and
    MISO-designated MVPs,
  *a $0.9 million increase in labor and benefit expenses related to increases
    in pension and retirement health benefit costs resulting from reductions
    in the discount rates related to projected benefit obligations,
  *a $0.3 million Minnesota Pollution Control Agency annual operations fee
    paid in the first quarter of 2013 (this annual fee was paid in the second
    quarter in 2012), and
  *a $0.3 million increase in property tax expense related to recent
    investments in transmission and distribution property, mainly in
    Minnesota.

Otter Tail Energy Services Company (OTESCO) recorded a $0.4 million asset
impairment charge related to wind farm development rights at its Sheridan
Ridge and Stutsman County sites in North Dakota in the first quarter of 2012
as a potential sale of the rights did not occur as expected. OTESCO reported
no activity in the first quarter of 2013.

Income taxes in the Electric segment increased $2.5 million mainly as a result
of a $3.4 million increase in income before income taxes.

Manufacturing

Manufacturing revenues and net income were $53.2 million and $3.3 million,
respectively, compared with $59.4 million and $3.5 million for the first
quarter of 2012.

  *At BTD, revenues decreased $6.2 million and net income decreased $0.4
    million as a result of lower sales volume mainly due to reduced demand
    from customers in end markets serving the construction, energy and lawn
    and garden equipment industries. The decline in sales and its negative
    impact on net income was partially mitigated by a $0.6 million decrease in
    incentive compensation related to the reduction in sales.
  *At T.O. Plastics, revenues decreased by $0.1 million while net income
    increased $0.2 million as a result of favorable raw material pricing and
    continuing productivity improvements.

Construction

Construction revenues and net loss were $26.4 million and $1.1 million,
respectively, compared with $35.6 million and $4.2 million for the first
quarter of 2012.

  oFoley revenues decreased $5.3 million, while its net loss decreased by
    $3.6 million. Cost overruns and increased losses on certain major projects
    in progress in 2012 resulted in $6.5 million in pretax losses at Foley in
    the first quarter of 2012. This compares with only $0.5 million in
    additional losses in the first quarter of 2013 on the remaining major
    projects carried over from 2012. All of these projects were substantially
    complete by the end 2012.
  oAevenia's revenues decreased $3.9 million and its net loss increased $0.5
    million due in part to a harsher winter in 2013 delaying the start of many
    construction projects relative to the early start to construction that was
    facilitated by extremely mild weather in the first quarter of 2012.
    Aevenia's first quarter 2012 revenues also included $1.3 million from
    Moorhead Electric, Inc., an Aevenia subsidiary that was sold in October
    2012.

Plastics

Plastics revenues and net income were $37.4 million and $3.9 million,
respectively, compared with $34.9 million and $3.3 million for the first
quarter of 2012. The increase in revenue is the result of a 6.7% increase in
pounds of PVC pipe sold and a 0.5% increase in the price per pound of pipe
sold. Sales volume increased as construction and housing markets improved in
the South Central and Southwest regions of the United States. Sales volume
increases in these regions were partially offset by lower sales in the North
Central United States due to a harsher winter in this region in 2013. The
sales and price increases in combination with a 1.0% decrease in the cost per
pound of pipe sold were the main factors contributing to the $0.6 million
increase in Plastics segment net income.

Corporate

Corporate expenses, net-of-tax, decreased $0.6 million between the quarters,
as a result of lower interest expenses related to the July 2012 early
redemption of the corporation's $50 million, 8.89% senior unsecured note and
decreases in professional and contracted services expenses. These lower costs
were partially offset by increases totaling $1.1 million in labor and benefit
costs related to staffing additions to support the manufacturing and
infrastructure platforms and stock incentive award accruals resulting from the
strong performance of the corporation's common stock price as measured against
the stock performances of the corporation's peer group of companies in the
Edison Electric Institute Index in the first quarter of 2013.

Discontinued Operations

On February 8, 2013 the corporation closed on the sale of substantially all
the assets of ShoreMaster for approximately $13.0 million in cash plus a
future working capital true up of approximately $2.3 million expected to be
received within 180 days of closing. In the first quarter of 2013, the
corporation paid approximately $0.8 million in expenses related to the sale of
ShoreMaster and also paid a $1.7 million working capital settlement to the
purchaser of DMS Health Technologies, Inc., which was sold in February 2012.

2013-2017 Capital Expenditures

The corporation plans to invest in generation and transmission projects for
the Electric segment that are expected to positively impact the corporation's
earnings and returns on capital. In addition to the Big Stone Plant air
quality control system project, current Electric segment projects include
investment in three MISO-determined MVP transmission projects, one of which is
a CapX2020 project, and investment in one other CapX2020 transmission project.

The corporation has revised its consolidated capital expenditures expectation
for 2013 from the range of $200 million to $210 million anticipated in its
initial capital budget to a range of $165 million to $175 million. In the
first quarter of 2013 Otter Tail Power Company revised downward its estimates
of its share of capital expenditures required for the construction of the new
air quality control system at Big Stone Plant from $265 million to $218
million as a result of a reduction in expected costs due to prudent design
changes, low bids in a buyer's market and in-house project management. In
addition there have been changes to Big Stone area transmission project
capital costs. The following table shows the corporation's initial and revised
2013 through 2017 anticipated capital expenditures and electric utility
average rate base:

From February 2013 Earnings Release
(in millions)                     2012 Actual 2013  2014  2015   2016   2017
Capital Expenditures:                                              
Electric Segment:                                                  
Transmission                                 $60  $45  $56   $69   $118
Environmental                                89    99    72     1      --
Other                                        33    41    42     43     43
Total Electric Segment            $ 102       $ 182 $ 185 $170  $113  $161
Manufacturing and Infrastructure  14          22    19    19     15     20
Segments
Total Capital Expenditures        $ 116       $ 204 $ 204 $189  $128  $181
Total Electric Utility Average    $ 694       $ 789 $ 919 $1,061 $1,134 $1,197
Rate Base

Revised - May 2013
(in millions)                      2012 Actual 2013  2014  2015  2016   2017
Capital Expenditures:                                              
Electric Segment:                                                  
Transmission                                  $51  $61  $45  $105  $62
Environmental                                 74    79    55    1      --
Other                                         34    36    37    36     39
Total Electric Segment             $ 102       $ 159 $ 176 $137 $142  $101
Manufacturing and Infrastructure   14          12    19    19    15     20
Segments
Total Capital Expenditures         $ 116       $ 171 $ 195 $156 $157  $121
Total Electric Utility Average     $ 694       $ 767 $ 890 $999 $1,067 $1,133
Rate Base

Execution on the currently anticipated electric utility capital expenditure
plan is expected to grow rate base and be a key driver in increasing utility
earnings over the 2013 through 2017 timeframe. The corporation's 2013 through
2017 electric utility capital expenditures are subject to periodic review and
revision, and actual construction costs may be lower or higher than these
estimates due to numerous factors.Some of the factors include:the cost and
efficiency of construction labor, equipment and materials; project scope and
design changes; changes in construction schedules; business and economic
conditions; the cost and availability of capital; and environmental
requirements.Changes in the estimates to the actual construction costs could
have an impact on the growth in the utility's rate base and future earnings.
The corporation intends to maintain its equity-to-total capitalization ratio
near its present level of 52% in its Electric segment and will seek to earn
the electric utility's authorized overall return on equity of approximately
10.5% in its regulatory jurisdictions.

2013 Business Outlook

The corporation is reaffirming its consolidated earnings per share from
continuing operations guidance for 2013 to be in the range of $1.30 to $1.55.
This guidance reflects the current mix of businesses owned by the corporation
and considers the cyclical nature of some of the corporation's businesses. It
also reflects challenges presented by current economic conditions, as well as
the corporation's plans and strategies for improving future operating results.

Segment components of the corporation's 2013 earnings per share guidance range
are as follows:

                                                   
                         Previous 2013 EPS Guidance Current 2013 EPS Guidance
                         Low           High         Low          High
Electric                  $1.06         $1.11        $1.02        $1.07
Manufacturing             $0.31         $0.36        $0.28        $0.33
Construction              $0.06         $0.11        $0.06        $0.11
Plastics                  $0.16         $0.21        $0.25        $0.30
Corporate                 ($0.29)       ($0.24)      ($0.31)      ($0.26)
Total – Continuing        $1.30         $1.55        $1.30        $1.55
Operations

Contributing to the earnings guidance for 2013 are the following items:

  *The corporation is reducing its previous guidance for 2013 in its Electric
    segment. The change is primarily based on an updated capital expenditure
    plan which is lower than original expectations. As a result of the
    reduction in anticipated capital expenditures, the Electric segment is now
    expecting lower rider recovery revenues and lower AFUDC earnings in 2013.
    Also, the Electric segment continues to expect lower conservation
    improvement program incentives and increases in operating and maintenance
    expenses due to higher benefit and administrative costs. Otter Tail Power
    Company's pension benefit costs for the corporation's noncontributory
    funded pension plan are expected to increase in 2013 as a result of a
    change in the assumed rate of return on pension plan assets from 8.0% in
    2012 to 7.75% in 2013 and a decrease in the estimated discount rate used
    to determine annual benefit cost accruals from 5.15% in 2012 to 4.50% in
    2013.
    
  *The corporation is also reducing its previous guidance for 2013 from its
    Manufacturing segment due to the following factors:

    *Order volume across the end markets of the construction, energy and lawn
      and garden industries have softened for the remainder of 2013 affecting
      BTD's customers in these industries.
    *Lower earnings are now expected in 2013 at T.O. Plastics, primarily due
      to a key customer announcing plans to produce certain products in house
      rather than outsource the work to T.O. Plastics.
    *Backlog for the manufacturing companies is approximately $97million for
      2013 compared with $103million one year ago.

  *The corporation is maintaining its 2013 earnings per share guidance for
    its Construction segment.Segment net income is expected to be higher in
    2013 than 2012 due to improved cost control processes in construction
    management and selective bidding on projects with the potential for higher
    margins. Foley's performance on certain large projects negatively impacted
    2012 results. These projects were substantially completed in 2012 and
    Foley's internal bidding and estimating project review procedures have
    been improved such that the corporation does not expect to see similar
    losses in 2013. Backlog in place for the construction businesses is $100
    million for 2013 compared with $83 million one year ago.
    
  *The corporation now expects an increase in Plastics segment net income in
    2013 based on the strength of its first quarter performance.
    
  *Corporate general and administrative costs are expected to increase from
    the previous 2013 guidance due to an expected increase in employee benefit
    costs associated with stock incentive awards based on the strong
    performance of the corporation's common stock price as measured against
    the stock performances of the corporation's peer group of companies in the
    Edison Electric Institute Index in the first quarter of 2013.

The corporation will continue to review its portfolio of companies to see
where additional opportunities may exist to improve its risk profile, improve
credit metrics and generate additional sources of cash to support the future
capital expenditure plans of its Electric segment. This will result in a
larger percentage of the corporation's earnings coming from Otter Tail Power
Company, its most stable and relatively predictable business, and is
consistent with the strategy to grow this business given its current
investment opportunities.

CONFERENCE CALL AND WEBCAST

The corporation will host a live webcast on Tuesday, May 7, 2013, at 10:00
a.m. CDT to discuss the company's financial and operating performance.

The presentation will be posted on the corporation's website before the
webcast. To access the live webcast go to www.ottertail.com/presentations.cfm
and select "Webcast". Please allow extra time prior to the call to visit the
site and download any necessary software that may be needed to listen to the
webcast.An archived copy of the webcast will be available on our website
shortly following the call.

If you are interested in asking a question during the live webcast, the
Dial-In Number is:877-312-8789.

Risk Factors and Forward-Looking Statements that Could Affect Future Results

The information in this release includes certain forward-looking information,
including 2013 expectations, made under the Safe Harbor provisions of the
Private Securities Litigation Reform Act of 1995. Although the corporation
believes its expectations are based on reasonable assumptions, actual results
may differ materially from those expectations. The following factors, among
others, could cause actual results for the corporation to differ materially
from those discussed in the forward-looking statements:

  *Federal and state environmental regulation could require the corporation
    to incur substantial capital expenditures and increased operating costs.
    
  *Volatile financial markets and changes in the corporation's debt ratings
    could restrict its ability to access capital and could increase borrowing
    costs and pension plan and postretirement health care expenses.
    
  *The corporation relies on access to both short- and long-term capital
    markets as a source of liquidity for capital requirements not satisfied by
    cash flows from operations. If the corporation is not able to access
    capital at competitive rates, its ability to implement its business plans
    may be adversely affected.
    
  *Disruptions, uncertainty or volatility in the financial markets can also
    adversely impact the corporation's results of operations, the ability of
    its customers to finance purchases of goods and services, and its
    financial condition, as well as exert downward pressure on stock prices
    and/or limit its ability to sustain its current common stock dividend
    level.
    
  *The corporation made a $10.0 million discretionary contribution to its
    defined benefit pension plan in January 2013. The corporation could be
    required to contribute additional capital to the pension plan in the
    future if the market value of pension plan assets significantly declines,
    plan assets do not earn in line with the corporation's long-term rate of
    return assumptions or relief under the Pension Protection Act is no longer
    granted.
    
  *Any significant impairment of the corporation's goodwill would cause a
    decrease in its asset values and a reduction in its net operating income.
    
  *A sustained decline in the corporation's common stock price below book
    value or declines in projected operating cash flows at any of its
    operating companies may result in goodwill impairments that could
    adversely affect its results of operations and financial position, as well
    as financing agreement covenants.
    
  *The corporation currently has $7.3 million of goodwill and a $1.1 million
    indefinite-lived trade name recorded on its consolidated balance sheet
    related to the acquisition of Foley Company in 2003. Foley Company
    generated a large operating loss in 2012 due to significant cost overruns
    on certain construction projects. If operating margins do not meet the
    corporation's projections, the reductions in anticipated cash flows from
    Foley Company may indicate that its fair value is less than its book
    value, resulting in an impairment of some or all of the goodwill and
    indefinite-lived trade name associated with Foley along with a
    corresponding charge against earnings.
    
  *The inability of the corporation's subsidiaries to provide sufficient
    earnings and cash flows to allow the corporation to meet its financial
    obligations and debt covenants and pay dividends to its shareholders could
    have an adverse effect on the corporation.
    
  *Economic conditions could negatively impact the corporation's businesses.
    
  *If the corporation is unable to achieve the organic growth it expects, its
    financial performance may be adversely affected.
    
  *The corporation's plans to grow and realign its business mix through
    capital projects, acquisitions and dispositions may not be successful,
    which could result in poor financial performance.
    
  *The corporation may, from time to time, sell assets to provide capital to
    fund investments in its electric utility business or for other corporate
    purposes, which could result in the recognition of a loss on the sale of
    any assets sold and other potential liabilities. The sale of any of the
    corporation's businesses could expose the corporation to additional risks
    associated with indemnification obligations under the applicable sales
    agreements and any related disputes.
    
  *The corporation's plans to grow and operate its manufacturing and
    infrastructure businesses could be limited by state law.
    
  *Significant warranty claims and remediation costs in excess of amounts
    normally reserved for such items could adversely affect the corporation's
    results of operations and financial condition.
    
  *The corporation is subject to risks associated with energy markets.
    
  *The corporation is subject to risks and uncertainties related to the
    timing and recovery of deferred tax assets which could have a negative
    impact on the corporation's net income in future periods.
    
  *The corporation relies on its information systems to conduct its business,
    and failure to protect these systems against security breaches could
    adversely affect its business and results of operations. Additionally, if
    these systems fail or become unavailable for any significant period of
    time, the corporation's business could be harmed.
    
  *The corporation may experience fluctuations in revenues and expenses
    related to its electric operations, which may cause its financial results
    to fluctuate and could impair its ability to make distributions to its
    shareholders or scheduled payments on its debt obligations, or to meet
    covenants under its borrowing agreements.
    
  *Actions by the regulators of the corporation's electric operations could
    result in rate reductions, lower revenues and earnings or delays in
    recovering capital expenditures.
    
  *Otter Tail Power Company's electric generating facilities are subject to
    operational risks that could result in unscheduled plant outages,
    unanticipated operation and maintenance expenses and increased power
    purchase costs.
    
  *Changes to regulation of generating plant emissions, including but not
    limited to carbon dioxide (CO[2]) emissions, could affect Otter Tail Power
    Company's operating costs and the costs of supplying electricity to its
    customers.
    
  *Competition from foreign and domestic manufacturers, the price and
    availability of raw materials and general economic conditions could affect
    the revenues and earnings of our manufacturing businesses.
    
  *A significant failure or an inability to properly bid or perform on
    projects or contracts by the corporation's construction businesses could
    lead to adverse financial results and could lead to the possibility of
    delay or liquidated damages.
    
  *The corporation's construction subsidiaries enter into contracts which
    could expose them to unforeseen costs and costs not within their control,
    which may not be recoverable and could adversely affect the corporation's
    results of operations and financial condition.
    
  *The corporation's Plastics segment is highly dependent on a limited number
    of vendors for PVC resin, many of which are located in the Gulf Coast
    regions, and a limited supply of resin. The loss of a key vendor, or an
    interruption or delay in the supply of PVC resin, could result in reduced
    sales or increased costs for this segment.
    
  *The corporation's plastic pipe companies compete against a large number of
    other manufacturers of PVC pipe and manufacturers of alternative products.
    Customers may not distinguish the pipe companies' products from those of
    its competitors.
    
  *Reductions in PVC resin prices can negatively impact PVC pipe prices,
    profit margins on PVC pipe sales and the value of PVC pipe held in
    inventory.

For a further discussion of other risk factors and cautionary statements,
refer to reports the corporation files with the Securities and Exchange
Commission.

About The Corporation: Otter Tail Corporation has interests in diversified
operations that include an electric utility, manufacturing, and infrastructure
businesses. Otter Tail Corporation stock trades on the NASDAQ Global Select
Market under the symbol OTTR. The latest investor and corporate information is
available at www.ottertail.com. Corporate offices are located in Fergus Falls,
Minnesota, and Fargo, North Dakota.

See Otter Tail Corporation's results of operations for the three months ended
March 31, 2013 and 2012 in the following financial statements: Consolidated
Statements of Income, Consolidated Balance Sheets – Assets, Consolidated
Balance Sheets – Liabilities and Equity, and Consolidated Statements of Cash
Flows.

Otter Tail Corporation
Consolidated Statements of Income
In thousands, except share and per share amounts
(not audited)

                                                      Quarter Ended March 31,
                                                      2013        2012
Operating Revenues by Segment                                     
Electric                                               $101,010   $90,003
Manufacturing                                          53,166      59,434
Construction                                           26,425      35,617
Plastics                                               37,400      34,875
Corporate Revenue and Intersegment Eliminations        (47)        (39)
Total Operating Revenues                               217,954     219,890
Operating Expenses                                                
Fuel and Purchased Power                               34,592      29,582
Nonelectric Cost of Goods Sold (depreciation included  92,062      110,296
below)
Electric Operating and Maintenance Expense             35,363      32,630
Nonelectric Operating and Maintenance Expense          13,778      13,902
Asset Impairment Charge                                --          432
Depreciation and Amortization                          14,920      14,793
Total Operating Expenses                               190,715     201,635
Operating Income (Loss) by Segment                                
Electric                                               20,424      16,959
Manufacturing                                          6,349       6,703
Construction                                           (1,699)     (6,790)
Plastics                                               6,717       5,752
Corporate                                              (4,552)     (4,369)
Total Operating Income                                 27,239      18,255
Interest Charges                                       6,980       8,594
Other Income                                           861         982
Income Tax Expense – Continuing Operations             5,886       468
Net Income (Loss) by Segment – Continuing Operations              
Electric                                               11,931      11,016
Manufacturing                                          3,318       3,465
Construction                                           (1,092)     (4,171)
Plastics                                               3,887       3,253
Corporate                                              (2,810)     (3,388)
Net Income from Continuing Operations                  15,234      10,175
Discontinued Operations                                           
(Loss) Income - net of Income Tax (Benefit) Expense of (81)        157
($205) in 2013 and $413 in 2012
Gain (Loss) on Disposition - net of Income Tax Expense 210         (3,089)
(Benefit) of $6 in 2013 and ($134) in 2012
Net Income (Loss) from Discontinued Operations         129         (2,932)
Net Income                                             15,363      7,243
Preferred Dividend Requirement and Other Adjustments   513         184
Balance for Common                                     $14,850   $7,059
Average Number of Common Shares Outstanding                       
Basic                                                  36,075,131  35,995,179
Diluted                                                36,259,115  36,129,192
                                                                 
Basic Earnings Per Common Share:                                  
Continuing Operations (net of preferred dividend       $0.41      $0.28
requirement and other adjustments)
Discontinued Operations                                --         (0.08)
                                                      $0.41      $0.20
Diluted Earnings Per Common Share:                                
Continuing Operations (net of preferred dividend       $0.41     $0.28
requirement and other adjustments)
Discontinued Operations                                --         (0.08)
                                                      $0.41      $0.20



Otter Tail Corporation
Consolidated Balance Sheets
ASSETS
in thousands
(not audited)
                                                  March 31,  December 31,
                                                  2013       2012
                                                            
Current Assets                                               
Cash and Cash Equivalents                          $37,532   $52,362
Accounts Receivable:                                         
Trade—Net                                          102,259    91,170
Other                                              10,018     7,684
Inventories                                        73,398     69,336
Deferred Income Taxes                              19,306     30,964
Unbilled Revenues                                  14,836     15,701
Costs and Estimated Earnings in Excess of Billings 3,588      3,663
Regulatory Assets                                  21,326     25,499
Other                                              14,085     8,161
Assets of Discontinued Operations                  4,585      19,092
Total Current Assets                               300,933    323,632
                                                            
Investments                                        9,417      9,471
Other Assets                                       26,783     26,222
Goodwill                                           38,971     38,971
Other Intangibles—Net                              14,060     14,305
                                                            
Deferred Debits                                              
Unamortized Debt Expense                           4,638      5,529
Regulatory Assets                                  129,049    134,755
Total Deferred Debits                              133,687    140,284
                                                            
Plant                                                        
Electric Plant in Service                          1,429,549  1,423,303
Nonelectric Operations                             187,646    186,094
Construction Work in Progress                      88,848     77,890
Total Gross Plant                                  1,706,043  1,687,287
Less Accumulated Depreciation and Amortization     648,150    637,835
Net Plant                                          1,057,893  1,049,452
Total                                              $1,581,744 $ 1,602,337




Otter Tail Corporation
Consolidated Balance Sheets
LIABILITIES AND EQUITY
in thousands
(not audited)
                                                  March 31,   December 31,
                                                  2013        2012
                                                             
Current Liabilities                                           
Short-Term Debt                                    $1,335    $--
Current Maturities of Long-Term Debt               179         176
Accounts Payable                                   87,240      88,406
Accrued Salaries and Wages                         11,627      20,571
Billings In Excess Of Costs and Estimated Earnings 19,132      16,204
Accrued Taxes                                      12,726      12,047
Derivative Liabilities                             14,009      18,234
Other Accrued Liabilities                          7,160       6,334
Liabilities of Discontinued Operations             5,551       11,156
Total Current Liabilities                          158,959     173,128
                                                             
Pensions Benefit Liability                         107,440     116,541
Other Postretirement Benefits Liability            59,508      58,883
Other Noncurrent Liabilities                       23,464      22,244
                                                             
Deferred Credits                                              
Deferred Income Taxes                              166,460     171,787
Deferred Tax Credits                               30,817      31,299
Regulatory Liabilities                             69,575      68,835
Other                                              477         466
Total Deferred Credits                             267,329     272,387
                                                             
Capitalization                                                
Long-Term Debt, Net of Current Maturities          437,399     421,680
                                                             
Cumulative Preferred Shares                        --          15,500
                                                             
Cumulative Preference Shares                       --          --
                                                             
Common Equity                                                 
Common Shares, Par Value $5 Per Share              181,063     180,842
Premium on Common Shares                           254,589     253,296
Retained Earnings                                  96,310      92,221
Accumulated Other Comprehensive Loss               (4,317)     (4,385)
Total Common Equity                                527,645     521,974
Total Capitalization                               965,044     959,154
Total                                              $ 1,581,744 $ 1,602,337




Otter Tail Corporation
Consolidated Statements of Cash Flows
In thousands
(not audited)
                                         For the Three Months Ended March 31,
In thousands                              2013               2012
Cash Flows from Operating Activities                        
Net Income                                $15,363           $7,243
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating                              
Activities:
Net (Gain) Loss from Sale of Discontinued (210)              3,089
Operations
Loss (Income) from Discontinued           81                 (157)
Operations
Depreciation and Amortization             14,920             14,793
Asset Impairment Charge                   --                 432
Deferred Tax Credits                      (483)              (522)
Deferred Income Taxes                     6,139              (7,717)
Change in Deferred Debits and Other       4,800              7,872
Assets
Discretionary Contribution to Pension     (10,000)           (10,000)
Plan
Change in Noncurrent Liabilities and      1,975              9,299
Deferred Credits
Allowance for Equity (Other) Funds Used   (293)              (162)
During Construction
Change in Derivatives Net of Regulatory   378                281
Deferral
Stock Compensation Expense – Equity       392                287
Awards
Other—Net                                 25                 1,855
Cash (Used for) Provided by Current                         
Assets and Current Liabilities:
Change in Receivables                     (13,423)           (14,897)
Change in Inventories                     (4,062)            (5,029)
Change in Other Current Assets            (3,025)            (2,614)
Change in Payables and Other Current      (3,440)            6,841
Liabilities
Change in Interest and Income Taxes       1,076              (1,884)
Receivable/Payable
Net Cash Provided by Continuing           10,213             9,010
Operations
Net Cash Used in Discontinued Operations  (2,400)            (1,159)
Net Cash Provided by Operating Activities 7,813              7,851
Cash Flows from Investing Activities                        
Capital Expenditures                      (23,327)           (35,511)
Proceeds from Disposal of Noncurrent      729                1,234
Assets
Net Increase in Other Investments         (923)              (1,321)
Net Cash Used in Investing Activities -   (23,521)           (35,598)
Continuing Operations
Net Proceeds from Sale of Discontinued    10,465             24,362
Operations
Net Cash Used in Investing Activities -   (208)              (11,925)
Discontinued Operations
Net Cash Used in Investing Activities     (13,264)           (23,161)
Cash Flows from Financing Activities                        
Change in Checks Written in Excess of     --                 10,546
Cash
Net Short-Term Borrowings                 1,335              3,311
Proceeds from Issuance of Common Stock    1,156              --
Payments for Retirement of Preferred      (15,500)           --
Stock
Proceeds from Issuance of Long-Term Debt  40,900             --
Short-Term and Long-Term Debt Issuance    (7)                (10)
Expenses
Payments for Retirement of Long-Term Debt (25,178)           (34)
Dividends Paid and Other Distributions    (11,307)           (11,037)
Net Cash (Used in) Provided by Financing  (8,601)            2,776
Activities - Continuing Operations
Net Cash Used in Financing Activities -   --                 (1,445)
Discontinued Operations
Net Cash (Used in) Provided by Financing  (8,601)            1,331
Activities
Net Change in Cash and Cash Equivalents – (778)              (2,015)
Discontinued Operations
Net Change in Cash and Cash Equivalents   (14,830)           (15,994)
Cash and Cash Equivalents at Beginning of 52,362             15,994
Period
Cash and Cash Equivalents at End of       $37,532           $--
Period

CONTACT: Media contact:
         Michael J. Olsen
         Sr. Vice President of Corporate Communications
         (701) 451-3580 or (866) 410-8780
        
         Investor contact:
         Loren Hanson
         Manager of Investor Relations
         (218) 739-8481 or (800) 664-1259

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