Otter Tail Corporation Announces Third Quarter Earnings and Narrows 2013 Earnings Guidance; Board of Directors Declares

Otter Tail Corporation Announces Third Quarter Earnings and Narrows 2013
Earnings Guidance; Board of Directors Declares Quarterly Dividend

FERGUS FALLS, Minn., Nov. 4, 2013 (GLOBE NEWSWIRE) -- Otter Tail Corporation
(Nasdaq:OTTR) today announced financial results for the quarter ended
September 30, 2013.

Summary:

  *Consolidated revenues from continuing operations were $229.8 million
    compared with $215.3 million for the third quarter of 2012.
  *Consolidated net income and diluted earnings per share from continuing
    operations totaled $14.8 million and $0.41, respectively, compared with
    $4.8 million and $0.13 for the third quarter of 2012.
  *Consolidated net income for the third quarter of 2012 includes a $7.9
    million ($0.22 diluted earnings per share) after-tax charge related to the
    July 13, 2012 early retirement of the corporation's then outstanding $50
    million, 8.89% Senior Unsecured Note due November 30, 2017.
  *Consolidated net income and diluted earnings per share from continuing and
    discontinued operations totaled $15.1 million and $0.42, respectively,
    compared with $1.9 million and $0.05 per share for the third quarter of
    2012.
  *The corporation is narrowing its earnings guidance range to $1.38 to $1.50
    per diluted share from its previously issued guidance of $1.30 to $1.50
    per diluted share.

CEO Overview

"Strong third quarter results from our Manufacturing and Infrastructure
businesses under Varistar continue to reflect execution of our strategic
direction," said Otter Tail Corporation President and CEO Jim McIntyre. "These
businesses are seeing the benefits of a more "hands-on" approach to improving
operational excellence, and a committed focus on execution.

"Sales and net income in our Electric segment were lower in this year's third
quarter, impacted by weather and higher general and administrative expenses.
These anomalies do not reflect the growing earnings power of our utility as it
continues to successfully execute its rate base growth strategy. The utility's
significant environmental upgrades and transmission projects continue on
schedule and within budget.

"In our Construction segment, Foley, our mechanical and prime contractor on
industrial projects, continues to improve profitability, generating positive
net income compared to a significant loss in the same quarter last year.
Aevenia, our electrical contractor, reported positive net income in the third
quarter of 2013, after being hampered by delays resulting from adverse weather
throughout the Midwest in the first half of 2013.

"Earnings from our Manufacturing segment were up 55% compared with third
quarter 2012 mainly as a result of increased sales and research and
development tax credits earned at BTD Manufacturing.

"Our Plastics segment, which includes PVC pipe manufacturers Northern Pipe
Products and Vinyltech, continues with its exceptional performance as robust
sales volume has partially mitigated a reduction in margins compared with
third quarter 2012. Sales volume from our Vinyltech plant in Arizona increased
21% over third quarter 2012 sales. Northern Pipe Products' sales volume
improved 5% over the third quarter of 2012.

"As a result of our overall improved outlook, and a further indication of
reducing risk across our mix of businesses, all three rating agencies have
recently upgraded their ratings or outlooks for both Otter Tail Corporation
and Otter Tail Power Company.

"Based on strong third quarter and year-to-date results from our Manufacturing
and Infrastructure businesses under Varistar, and the continued execution of
the utility's rate base growth strategy, we are narrowing our earnings
guidance for 2013 diluted earnings per share from continuing operations to a
range of $1.38 to $1.50."

Cash Flow from Operations, Liquidity and Financing

The corporation's consolidated cash flow from continuing operations for the
nine months ended September 30, 2013 was $95.8 million compared with $100.7
million for the nine months ended September 30, 2012. The following table
presents the status of the corporation's lines of credit as of September 30,
2013:

                                  In Use on                   Available on
                                  September 30, Restricted due September 30,
                                                  to
(in thousands)         Line Limit 2013          Letters of    2013
                                                  Credit
Otter Tail Corporation  $150,000    $--          $680           $149,320
Credit Agreement
Otter Tail Power
Company Credit          170,000     40,335        1,189          128,476
Agreement
Total                  $320,000    $40,335       $1,869         $277,796

Otter Tail Power Company used line of credit borrowings in the third quarter
of 2013 to fund portions of its significant expenditures for the construction
of Big Stone Plant's new air quality control system (AQCS) and for two major
CapX2020 transmission lines being constructed in Minnesota and the eastern
Dakotas.

Otter Tail Power Company entered into a Note Purchase Agreement for the
private placement of $150 million of senior unsecured debt on August14, 2013,
priced as follows:

Principal Amount Term     Rate
$60 million      15 years 4.68%
$90 million      30 years 5.47%

Proceeds from the issuance, scheduled to fund on February 27, 2014, will be
used for planned construction program expenditures, to pay down Otter Tail
Power Company's line of credit borrowings and to retire early its
$40.9million unsecured term loan included in long-term debt.

On October 7, 2013 Moody's Investors Service (Moody's) changed its rating
outlook for Otter Tail Corporation to positive from stable, reflecting
management's continued strategy to realign and simplify its non-regulated
activities to reduce business risk and its renewed focus on the regulated
utility enhancing the corporation's overall financial performance. At the same
time, Moody's changed its rating outlook for Otter Tail Power Company to
stable from negative, prompted by the utility's reduced capital expenditure
program related to its Big Stone Plant AQCS project, and supportive regulatory
environments.

On October 29, 2013 both the Otter Tail Corporation and the Otter Tail Power
Company credit agreements were amended to extend the expiration dates by one
year from October 29, 2017 to October 29, 2018.

Board of Directors Declared Quarterly Dividend

On November 4, 2013 the corporation's Board of Directors declared a quarterly
common stock dividend of $0.2975 per share. This dividend is payable December
10, 2013 to shareholders of record on November15, 2013.

Segment Performance Summary

Electric

Electric revenues and net income were $86.3 million and $8.8 million,
respectively, compared with $88.6million and $10.2 million for the third
quarter of 2012. Electric retail revenues decreased $1.9 million as a result
of:

  *a $1.1 million decrease in Fuel Clause Adjustment revenues and fuel and
    purchased power costs recovered in base rates as a result of a 7.3%
    reduction in fuel costs per kilowatt-hour (kwh) generated at Otter Tail
    Power Company's steam-powered and combustion turbine generators in
    combination with a 2.0% decrease in retail kwh sales,
  *a $1.0 million decrease in revenues related to the 2.0% decrease in retail
    kwh sales due, in part, to milder weather as evidenced by a decrease in
    both heating and cooling degree days of 29.0% and 15.3%, respectively,
    between the quarters, and
  *a $1.0 million decrease in various environmental, renewable, regulatory
    and conservation cost recovery related revenues driven by commensurate
    increases in other revenues or reductions in costs that are components of
    these alternative revenue recovery mechanisms,

offset by:

  *a $1.2 million increase in Transmission Cost Recovery Rider revenues
    resulting from increased investment in transmission lines.

Other electric operating revenues decreased $0.4 million mainly as a result of
a reduction in revenues from electric construction work completed for other
regional utilities.

Fuel costs decreased $1.8 million as a result of a 7.3% decrease in the cost
of fuel per kwh generated combined with a 1.7% decrease in kwhs generated from
Otter Tail Power Company's steam-powered and combustion turbine generators.
The decrease in the average cost of fuel per kwh of generation reflects a
10.8% decrease in the cost of fuel per kwh generated at Otter Tail Power
Company's Big Stone Plant and a 5.0% decrease in the cost of fuel per kwh
generated at Otter Tail Power Company's Hoot Lake Plant as a result of
reductions in contracted coal prices.

The cost of purchased power for retail sales increased $0.6million as a
result of an 8.3% increase in kwhs purchased, partially offset by a 1.4%
decrease in the cost per kwh purchased. The increase in kwhs purchased made up
for a decrease in kwhs generated from company-owned plants to serve retail
customers.

Electric operating and maintenance expenses increased $2.2 million mainly due
to the following:

  *a $1.0 million increase in Midcontinent Independent System Operator, Inc.
    (MISO) transmission tariff charges related to increasing investments in
    regional CapX2020 and MISO-designated Multi-Value transmission projects,
  *a $0.9 million increase in general and administrative expenses, mostly
    related to a $0.7million increase in corporate costs allocated to the
    Electric segment due, in part, to changes in allocation factors resulting
    from the corporation's recent divestitures, and
  *a $0.3 million increase in property tax expense related to higher property
    value assessments in Minnesota and South Dakota.

Electric segment interest charges decreased $0.9 million in third quarter 2013
compared with third quarter 2012 as a result of an increase in capitalized
interest expense related to the construction of the new AQCS at Big Stone
Plant and as a result of Otter Tail Power Company's $40.9 million debt
refinancing on March 1, 2013.

Other income increased by $0.7 million due to an increase in allowance for
equity funds used during construction (AFUDC) related to costs incurred in the
construction of the new AQCS at Big Stone Plant.

Income tax expense decreased $0.4 million mainly as a result of a $1.8 million
decrease in income before income taxes.

Manufacturing

Manufacturing revenues and net income were $49.3 million and $3.0 million,
respectively, compared with $46.6million and $1.9 million for the third
quarter of 2012.

  *At BTD, revenues increased $2.3 million as a result of higher sales volume
    due to increased demand from customers in end markets serving the
    recreational equipment and agricultural industries. BTD's net income
    increased $0.8 million as a result of the increase in sales revenue and
    the recording of $0.5million in research and development tax credits
    recorded in conjunction with the filing of the corporation's 2012 extended
    federal tax return. The Research and Development Tax Credit expired at the
    end of 2011 and had not been extended as of December 31, 2012. The
    American Taxpayer Relief Act of 2012, signed into law on January 2, 2013,
    extended the credits retroactively through the end of 2013. 
  *At T.O. Plastics, revenues increased by $0.4 million and net income
    increased $0.2 million as a result of increases in product sales and
    tooling revenues.

Construction

Construction revenues and net income were $47.5 million and $1.8 million,
respectively, compared with revenues of $37.9million and a net loss of $1.3
million for the third quarter of 2012.

  oFoley revenues increased $15.6 million and Foley recorded $0.8 million in
    net income in the third quarter of 2013 compared to a net loss of $2.5
    million for the third quarter of 2012 resulting from cost overruns and
    losses incurred on certain major projects in progress in the third quarter
    of 2012. In the third quarter of 2013, Foley recognized more revenue on
    several large projects initiated in 2012.
  oAevenia's revenues decreased $6.0 million while its net income decreased
    by $0.2 million quarter over quarter. The decline in revenue is a result
    of a strategic reduction in the volume of telecommunications jobs pursued
    in 2013 and a delay in securing and initiating new substation
    construction. Also, Aevenia's third quarter 2012 results included revenues
    of $1.7 million and net income of $0.1 million from Moorhead Electric,
    Inc., an Aevenia subsidiary that was sold in October 2012.

Plastics

Plastics revenues and net income were $46.7 million and $3.4million,
respectively, compared with $42.2million and $3.3 million for the third
quarter of 2012. The $4.5 million increase in revenue is the result of a 12.1%
increase in pounds of PVC pipe sold, partially offset by a 1.4% decrease in
the price per pound of pipe sold. Sales volume increased as construction and
housing markets continued to improve in the South Central and Southwest
regions of the United States and construction activity increased in the North
Central United States as favorable weather allowed contractors to make up for
a slow start due to a colder and wetter spring in 2013. The revenue increase
was more than offset by a $5.8 million increase in the cost of PVC pipe sold
due to the increased sales volume in combination with a 5.5% increase in the
cost per pound of PVC pipe sold related to higher PVC resin costs driven by
high global demand and an increase in the cost of ethylene, a key ingredient
in the production of PVC resin.

Corporate

Corporate expenses, net-of-tax, decreased $7.2 million, which reflects a $7.9
million after-tax charge incurred in the third quarter of 2012 related to the
July 13, 2012 early retirement of the corporation's then outstanding $50
million, 8.89% Senior Unsecured Note due November 30, 2017. The decrease
related to the 2012 debt-retirement premium was partially offset by increases
in employee benefit expenses and higher insurance costs.

Discontinued Operations

Disposals and settlements of remaining assets and liabilities of discontinued
operations resulted in $0.3 million in net income from discontinued operations
in the third quarter of 2013 compared to a net loss of $2.9 million in the
third quarter of 2012, reflecting operating losses of $2.1 million at our wind
tower manufacturing business and $0.8million at our waterfront equipment
manufacturing business.

2013 Business Outlook

The corporation is narrowing its consolidated earnings per share from
continuing operations guidance for 2013 to be in the range of $1.38 to $1.50
from its previous guidance of $1.30 to $1.50. This guidance reflects the
current mix of businesses owned by the corporation and considers the cyclical
nature of some of the corporation's businesses.

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                  $1.02         $1.06        $1.02        $1.04
Manufacturing             $0.27         $0.31        $0.30        $0.33
Construction              $0.01         $0.05        $0.03        $0.05
Plastics                  $0.31         $0.35        $0.35        $0.37
Corporate                 ($0.31)       ($0.27)      ($0.32)      ($0.29)
Total – Continuing       $1.30         $1.50        $1.38        $1.50
Operations

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

  *The corporation is narrowing its previous 2013 guidance for its Electric
    segment based on third quarter 2013 results and current expectations for
    fourth quarter earnings.
  *The corporation is increasing and narrowing the range of its previous 2013
    guidance for its Manufacturing segment reflecting the following factors:
    -- Increasing productivity improvements and better than expected third
    quarter results at BTD, combined with the expectation of recording
    additional research and development tax credits for the 2013 tax year in
    the fourth quarter of 2013.
    -- Stronger than expected third quarter sales at T.O. Plastics, combined
    with a reduction in expected labor costs.
    -- Backlog for the manufacturing companies is approximately $47million
    for 2013 compared with $45million one year ago.
  *The corporation is narrowing the range of its previous 2013 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 expects Foley to be profitable in
    2013. The change in guidance from the second quarter in this segment is
    also due to improved business conditions at Aevenia. Backlog in place for
    the construction businesses is $34 million for 2013 compared with $39
    million one year ago.
  *The corporation is increasing and narrowing the range of its previous 2013
    guidance for its Plastics segment based on the strength of its performance
    through the first nine months of 2013.
  *The corporation now expects a minor increase in corporate general and
    administrative costs in the fourth quarter of 2013 and has adjusted its
    previous 2013 guidance accordingly.

CONFERENCE CALL AND WEBCAST

The corporation will host a live webcast on Tuesday, November 5, 2013, at
10:00 a.m. CT to discuss the corporation'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:

  oFederal and state environmental regulation could require the corporation
    to incur substantial capital expenditures and increased operating costs.
  oVolatile 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.
  oThe 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.
  oDisruptions, 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.
  oThe 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.
  oAny significant impairment of the corporation's goodwill would cause a
    decrease in its asset values and a reduction in its net operating income.
  oA 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.
  oThe 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.
  oThe 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.
  oEconomic conditions could negatively impact the corporation's businesses.
  oIf the corporation is unable to achieve the organic growth it expects, its
    financial performance may be adversely affected.
  oThe 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.
  oThe 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.
  oThe corporation's plans to grow and operate its manufacturing and
    infrastructure businesses could be limited by state law.
  oSignificant 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.
  oThe corporation is subject to risks associated with energy markets.
  oThe 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.
  oThe 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.
  oThe 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.
  oActions by the regulators of the corporation's electric operations could
    result in rate reductions, lower revenues and earnings or delays in
    recovering capital expenditures.
  oOtter 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.
  oChanges 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.
  oCompetition 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.
  oA 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.
  oThe 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.
  oThe 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.
  oThe 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.
  oReductions 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 and nine
months ended September 30, 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 September 30, Year-to-Date September 30,
                       2013          2012          2013          2012
Operating Revenues by                                          
Segment
Electric                $86,283     $88,564     $270,155    $257,530
Manufacturing           49,323       46,618       152,282      159,091
Construction            47,509       37,931       108,928      111,482
Plastics                46,659       42,217       128,820      118,582
Corporate Revenue and
Intersegment            (6)           (14)          (74)          (78)
Eliminations
Total Operating         229,768      215,316      660,111      646,607
Revenues
Operating Expenses                                             
Fuel and Purchased      27,476       28,760       88,916       83,125
Power
Nonelectric Cost of
Goods Sold              115,475      103,152      311,474      321,874
(depreciation included
below)
Electric Operating and  33,789       31,550       107,966      99,257
Maintenance Expense
Nonelectric Operating   12,857       12,424       38,811       39,305
and Maintenance Expense
Asset Impairment Charge --           --           --           432
- Electric
Depreciation and        15,039       15,057       44,794       44,740
Amortization
Total Operating         204,636      190,943      591,961      588,733
Expenses
Operating Income (Loss) by Segment                              
Electric                14,231       17,750       41,183       43,365
Manufacturing           4,908        4,072        15,489       15,791
Construction            3,104        (1,908)       1,554        (11,256)
Plastics                5,906        7,078        19,431       19,950
Corporate               (3,017)       (2,619)       (9,507)       (9,976)
Total Operating Income  25,132       24,373       68,150       57,874
Interest Charges        6,574        7,904        20,431       24,970
Loss on Early           --           13,106       --           13,106
Retirement of Debt
Other Income            1,401        653          2,958        2,279
Income Tax Expense
(Benefit) – Continuing  5,133        (785)         13,113       200
Operations
Net Income (Loss) by Segment – Continuing                        
Operations
Electric                8,787        10,206       24,301       26,413
Manufacturing           2,970        1,914        8,333        7,880
Construction            1,784        (1,325)       716          (7,252)
Plastics                3,403        3,309        11,215       10,629
Corporate               (2,118)       (9,303)       (7,001)       (15,793)
Net Income from         14,826       4,801        37,564       21,877
Continuing Operations
Discontinued Operations                                        
Income (Loss) - net of
Income Tax Expense
(Benefit) of $39,       312          (2,928)       428          886
($75), ($35) and $3,431
for the respective
periods
Impairment Loss - net
of Income Tax (Benefit)
of $0, $0, $0 and       --           --           --           (27,459)
($18,114) for the
respective periods
Gain (Loss) on
Disposition - net of
Income Tax Expense      --           --           210          (3,544)
(Benefit) of $0, $0,
$6, and ($169) for the
respective periods
Net Income (Loss) from  312          (2,928)       638          (30,117)
Discontinued Operations
Net Income (Loss)       15,138       1,873        38,202       (8,240)
Preferred Dividend
Requirement and Other   --           183          513          551
Adjustments
Balance for Common      $15,138     $1,690      $37,689     $(8,791)
Average Number of Common Shares                                 
Outstanding
Basic                   36,179,507   36,061,002   36,141,664   36,043,276
Diluted                 36,381,900   36,252,765   36,344,063   36,235,039
                                                              
Basic Earnings (Loss) Per Common                                
Share:
Continuing Operations
(net of preferred       $0.41       $0.13       $1.02       $0.59
dividend requirement
and other adjustments)
Discontinued Operations 0.01         (0.08)        0.02         (0.83)
                       $0.42       $0.05       $1.04       $(0.24)
Diluted Earnings (Loss) Per Common                              
Share:
Continuing Operations
(net of preferred       $0.41       $0.13       $1.02       $0.59
dividend requirement
and other adjustments)
Discontinued Operations 0.01         (0.08)        0.02         (0.83)
                       $0.42       $0.05       $1.04       $(0.24)
                                                              

                                                               
Otter Tail Corporation
Consolidated Balance Sheets
ASSETS
in thousands
(not audited)
                                                  September 30, December 31,
                                                  2013          2012
                                                               
Current Assets                                                  
Cash and Cash Equivalents                          $59,117     $52,362
Accounts Receivable:                                            
Trade—Net                                          98,164       91,170
Other                                              15,215       7,684
Inventories                                        72,658       69,336
Deferred Income Taxes                              19,696       30,964
Unbilled Revenues                                  12,304       15,701
Costs and Estimated Earnings in Excess of Billings 4,858        3,663
Regulatory Assets                                  17,754       25,499
Other                                              10,167       8,161
Assets of Discontinued Operations                  432          19,092
Total Current Assets                               310,365      323,632
                                                               
Investments                                        9,325        9,471
Other Assets                                       27,696       26,222
Goodwill                                           38,971       38,971
Other Intangibles—Net                              13,572       14,305
                                                               
Deferred Debits                                                 
Unamortized Debt Expense                           4,341        5,529
Regulatory Assets                                  131,921      134,755
Total Deferred Debits                              136,262      140,284
                                                               
Plant                                                           
Electric Plant in Service                          1,438,543    1,423,303
Nonelectric Operations                             194,636      186,094
Construction Work in Progress                      159,202      77,890
Total Gross Plant                                  1,792,381    1,687,287
Less Accumulated Depreciation and Amortization     670,298      637,835
Net Plant                                          1,122,083    1,049,452
Total                                              $ 1,658,274  $ 1,602,337
                                                               

                                                               
Otter Tail Corporation
Consolidated Balance Sheets
LIABILITIES AND EQUITY
in thousands
(not audited)
                                                  September 30, December 31,
                                                  2013          2012
                                                               
Current Liabilities                                             
Short-Term Debt                                    $40,335     $--
Current Maturities of Long-Term Debt               185          176
Accounts Payable                                   109,604      88,406
Accrued Salaries and Wages                         18,122       20,571
Billings In Excess Of Costs and Estimated Earnings 16,202       16,204
Accrued Taxes                                      10,609       12,047
Derivative Liabilities                             12,707       18,234
Other Accrued Liabilities                          7,734        6,334
Liabilities of Discontinued Operations             4,080        11,156
Total Current Liabilities                          219,578      173,128
                                                               
Pensions Benefit Liability                         109,139      116,541
Other Postretirement Benefits Liability            59,477       58,883
Other Noncurrent Liabilities                       25,746       22,244
                                                               
Deferred Credits                                                
Deferred Income Taxes                              177,248      171,787
Deferred Tax Credits                               28,791       31,299
Regulatory Liabilities                             70,446       68,835
Other                                              643          466
Total Deferred Credits                             277,128      272,387
                                                               
Capitalization                                                  
Long-Term Debt, Net of Current Maturities          437,306      421,680
                                                               
Cumulative Preferred Shares                        --           15,500
                                                               
Cumulative Preference Shares                       --           --
                                                               
Common Equity                                                   
Common Shares, Par Value $5 Per Share              181,347      180,842
Premium on Common Shares                           255,167      253,296
Retained Earnings                                 97,569       92,221
Accumulated Other Comprehensive Loss               (4,183)       (4,385)
Total Common Equity                                529,900      521,974
Total Capitalization                               967,206      959,154
Total                                              $ 1,658,274  $ 1,602,337
                                                               

                                                                 
Otter Tail Corporation
Consolidated Statements of Cash Flows
In thousands
(not audited)
                                                    For the Nine Months Ended
                                                    September 30,
In thousands                                         2013          2012
Cash Flows from Operating Activities                              
Net Income (Loss)                                   $38,202     $(8,240)
Adjustments to Reconcile Net Income to Net Cash Provided by       
Operating Activities:
Net (Gain) Loss from Sale of Discontinued           (210)         3,544
Operations
Net (Income) Loss from Discontinued Operations      (428)         26,573
Depreciation and Amortization                       44,794       44,740
Asset Impairment Charge                             --           432
Premium Paid for Early Retirement of Long-Term Debt --           12,500
Deferred Tax Credits                                (1,422)       (1,568)
Deferred Income Taxes                               15,215       8,320
Change in Deferred Debits and Other Assets          9,817        16,493
Discretionary Contribution to Pension Plan          (10,000)      (10,000)
Change in Noncurrent Liabilities and Deferred       7,318        8,029
Credits
Allowance for Equity-Other Funds Used During        (1,462)       (518)
Construction
Change in Derivatives Net of Regulatory Deferral    120          752
Stock Compensation Expense – Equity Awards          1,116        930
Other—Net                                           813          4,257
Cash (Used for) Provided by Current Assets and Current            
Liabilities:
Change in Receivables                               (9,775)       (16,536)
Change in Inventories                               (3,323)       864
Change in Other Current Assets                      (252)         6,268
Change in Payables and Other Current Liabilities    4,170        15,021
Change in Interest and Income Taxes                 1,156        (11,203)
Receivable/Payable
Net Cash Provided by Continuing Operations          95,849       100,658
Net Cash (Used in) Provided by Discontinued         (2,499)       48,724
Operations
Net Cash Provided by Operating Activities           93,350       149,382
Cash Flows from Investing Activities                              
Capital Expenditures                                (109,690)     (93,653)
Proceeds from Disposal of Noncurrent Assets         2,615        2,380
Net Increase in Other Investments                   (680)         (1,393)
Net Cash Used in Investing Activities - Continuing  (107,755)     (92,666)
Operations
Net Proceeds from Sale of Discontinued Operations   12,842       24,278
Net Cash Provided by (Used in) Investing Activities 505          (11,494)
- Discontinued Operations
Net Cash Used in Investing Activities               (94,408)      (79,882)
Cash Flows from Financing Activities                              
Change in Checks Written in Excess of Cash          --           3,535
Net Short-Term Borrowings                           40,335       12,417
Proceeds from Issuance of Common Stock              1,496        --
Common Stock Issuance Expenses                      --           (181)
Payments for Retirement of Capital Stock            (15,723)      (110)
Proceeds from Issuance of Long-Term Debt            40,900       --
Short-Term and Long-Term Debt Issuance Expenses     (126)         (14)
Payments for Retirement of Long-Term Debt           (25,266)      (50,183)
Premium Paid for Early Retirement of Long-Term Debt --           (12,500)
Dividends Paid and Other Distributions              (33,027)      (33,033)
Net Cash Provided by (Used in) Financing Activities 8,589        (80,069)
- Continuing Operations
Net Cash Used in Financing Activities -             --           (3,410)
Discontinued Operations
Net Cash Provided by (Used in) Financing Activities 8,589        (83,479)
Net Change in Cash and Cash Equivalents –            (776)         (2,015)
Discontinued Operations
Net Change in Cash and Cash Equivalents              6,755        (15,994)
Cash and Cash Equivalents at Beginning of Period     52,362       15,994
Cash and Cash Equivalents at End of Period           $59,117     $--
                                                                 

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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