8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 1, 2007

OTTER TAIL CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota (State or other jurisdiction of incorporation)	0-00368 (Commission File Number)	41-0462685 (I.R.S. Employer Identification No.)
215 South Cascade Street, P.O. Box 496, Fergus Falls, MN (Address of principal executive offices)		56538-0496 (Zip Code)

Registrant’s telephone number, including area code: (866) 410-8780

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Press Release

Item 2.02 Results of Operations and Financial Condition

     On November 1, 2007 Otter Tail Corporation issued a press release concerning consolidated financial results for the third quarter of 2007, a copy of which is furnished herewith as Exhibit 99.1.

Item 9.01 Financial Statement and Exhibits

 (c) Exhibits

     99.1 Press Release issued November 1, 2007

Signature

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	OTTER TAIL CORPORATION
Date: November 5, 2007
	By	/s/ Kevin G. Moug
		Kevin G. Moug Chief Financial Officer and Treasurer

2

EXHIBIT INDEX

Exhibit	Description of Exhibit
99.1	Press release, dated November 1, 2007

3

EX-99.1

Exhibit 99.1

NEWS RELEASE

Media contact:
Investor contact: Amy Richardson, Director of Communications, (701) 451-3580 or (866) 410-8780
Loren Hanson, Director of Shareholder Services, (218) 739-8481 or (800) 664-1259

Dateline:
For release: Fergus Falls, Minnesota
November 1, 2007 Financial Media

Otter Tail Corporation Announces Third Quarter Earnings and Maintains 2007 Earnings Guidance; Board of Directors Declares Dividend

Otter Tail Corporation (NASDAQ: OTTR) announced financial results for the quarter ended September 30, 2007 with the following highlights:

• Record third quarter revenues of $302.2 million.

• Consolidated net income of $13.3 million for the third quarter of 2007 compared with $13.5 million for the third quarter of 2006.

• Diluted earnings per share of $0.44 for the third quarter of 2007 compared with $0.45 for the third quarter of 2006.

Announcements:

• On November 1, 2007 the Board of Directors declared a quarterly common stock dividend of 29.25 cents per share, payable December 10. The Board also declared quarterly dividends on the corporation’s four series of preferred stock, payable December 1. Dividends are payable to shareholders of record as of November 15.

• The corporation reaffirms its 2007 diluted earnings per share guidance from continuing operations to be in the range of $1.60 to $1.80.

“Our third quarter financial results were in line with our expectations,” said John Erickson, president and chief executive officer of Otter Tail Corporation. “Electric segment earnings were consistent with the same quarter a year ago, and increased profits from our manufacturing and food ingredient processing segments offset the anticipated reduction in earnings from our plastics segment. DMI Industries, our manufacturer of wind towers, produced excellent growth for the quarter. We reaffirm our 2007 earnings per share guidance to be within the range of $1.60 to $1.80.”

1

For the nine months ended September 30, 2007 net income from continuing operations was $39.8 million compared with $39.5 million for the nine months ended September 30, 2006. Diluted earnings per share from continuing operations were $1.31 for both the nine months ended September 30, 2007 and September 30, 2006.

Segment Performance Summary

Electric
Electric revenues increased 1.3% to $72.1 million in the third quarter of 2007 compared with $71.2 million in the third quarter of 2006 due to increases of $0.6 million in other electric revenues, $0.2 million in retail electric revenues and $0.1 million in net revenues from wholesale sales and energy trading activities, including mark-to-market losses on forward energy contracts. Electric segment third quarter 2007 net income of $6.5 million was unchanged from third quarter 2006 net income.

The main contributor to the increase in other electric revenues was an increase in revenue from electric construction work performed for other companies. The increase in retail revenues reflects $0.5 million related to a 4.1% increase in retail kilowatt-hour (kwh) sales, offset by a $0.3 million decrease in Fuel Clause Adjustment (FCA) revenues related to a 6.6% decrease in fuel and purchased power costs per kwh generated and purchased for system use. The increase in retail kwh sales reflects increased consumption by commercial and pipeline customers. Electric operating expenses, including fuel and purchased power, increased $0.3 million between the quarters mainly as a result of increases of $0.8 million in material costs related to construction work performed for others and $0.4 million in property taxes and depreciation expense related to an increase in plant in service between the quarters, offset by a $0.9 million reduction in fuel and purchased power expenses.

Plastics
The plastics segment’s revenues and net income were $37.0 million and $1.4 million, respectively, in the quarter ended September 30, 2007 compared with $45.9 million and $4.6 million in the quarter ended September 30, 2006. The decrease in revenues and net income is mainly the result of a 19% decline in sales prices between the quarters. The decrease in pipe prices reflects a continuing but anticipated softening of the pipe market.

Manufacturing
The manufacturing segment’s revenues and net income were $95.3 million and $3.5 million, respectively, in the quarter ended September 30, 2007 compared with $76.7 million and $2.5 million in the quarter ended September 30, 2006. DMI Industries, Inc. recorded increases of $15.0 million in revenue and $0.7 million in net income between the quarters as a result of increased production levels and productivity gains. DMI’s third quarter 2007 operating expenses include $0.3 million in pre-production start-up costs for its new plant in Tulsa,

2

Oklahoma. At ShoreMaster, Inc., revenues increased $2.6 million and net losses decreased $0.2 million between the quarters as a result of strong commercial sales. The Aviva Sports product line, acquired by ShoreMaster in February 2007, contributed $0.5 million to the increase in revenues. At BTD Manufacturing, Inc., revenues increased $0.6 million while net income decreased $0.1 million between the quarters. The increase in revenues is primarily related to the acquisition of Pro Engineering in May 2007. Increases in payroll costs and depreciation expenses at BTD more than offset a $0.3 million increase in gross margins on sales, resulting in the reduction in net income between the quarters. At T.O. Plastics, Inc., revenues increased $0.5 million and net income increased $0.3 million as a result of increased sales volume between the quarters.

Health Services
The health services segment’s revenues and net income were $31.4 million and $0.1 million, respectively, in the quarter ended September 30, 2007 compared with $35.4 million and $0.3 million in the quarter ended September 30, 2006. Revenues from scanning and other related services decreased $2.2 million as a result of fewer interim installations and a 2.8% decrease in scan revenues. Revenues from equipment sales and servicing decreased $1.9 million between the quarters. Cost of goods sold decreased $3.9 million between the quarters. The decrease in equipment sales revenues and cost of goods sold reflect a change in mix between the quarters to more commission-based compensation for sales to customers from traditional dealership distribution of products. A $0.2 million increase in operating and depreciation expenses contributed to the decrease in health services net income between the quarters.

Food Ingredient Processing
The food ingredient processing segment recorded revenues of $15.7 million and net income of $1.0 million in the quarter ended September 30, 2007 compared with revenues of $11.5 million and a net loss of $1.1 million in the quarter ended September 30, 2006. The increase in revenue was the result of an increase in pounds of product sold combined with an increase in the price per pound of product sold. The increase in revenue combined with a decrease in the cost per pound of product sold due to lower potato and natural gas prices were the main factors contributing to the increase in net income between the quarters.

Other Business Operations Other business operations had revenues of $52.0 million and net income of $0.9 million in the quarter ended September 30, 2007 compared with revenues of $40.7 million and net income of $0.7 million in the quarter ended September 30, 2006. Revenues and net income from the corporation’s construction companies increased $11.4 million and $0.4 million, respectively, between the quarters as a result of an increase in construction activity between the quarters. Net income at the corporation’s flatbed trucking company decreased $0.2 million between the quarters.

3

2007 Expectations

Otter Tail Corporation anticipates 2007 diluted earnings per share from continuing operations to be in a range from $1.60 to $1.80. Contributing to the earnings guidance for 2007 are the following items:

• The corporation expects electric segment earnings in the range of $19.0 million to $24.0 million in 2007, which is consistent with 2007 prior guidance. A major maintenance shutdown of Big Stone Plant planned for the third quarter of 2007 was rescheduled for the fourth quarter of 2007, resulting in a shift in anticipated expenditures and plant availability between the quarters.

• The corporation expects the plastics segment’s earnings performance to be in the range of $6.0 million to $8.5 million, which is consistent with 2007 prior guidance.

• Continued enhancements in productivity and capacity utilization and strong backlogs are expected to result in increased net income in the manufacturing segment in 2007.

• The corporation expects flat to slightly declining earnings in the health services segment in 2007 primarily due to lower sales at the diagnostic imaging services company. This is a change from prior guidance of moderate net income growth from this segment in 2007.

• The corporation expects its food ingredient processing business to generate net income in the range of $3.0 million to $4.5 million in 2007, a change from prior guidance of $2.5 million to $4.5 million.

• The other business operations segment is expected to have lower earnings in 2007 compared with 2006 due to an expected return to more normal corporate cost levels. The construction companies are expected to have a strong 2007 given performance in the first nine months of 2007 and current backlogs.

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

The information in this release includes certain forward-looking information, including 2007 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:

• The corporation is subject to federal and state legislation, regulations and actions that may have a negative impact on its business and results of operations.

• Future operating results of the electric segment will be impacted by the outcome of a rate case filed in Minnesota on October 1, 2007, requesting an overall increase in Minnesota rates of 6.66%. The filing includes a request for an interim rate increase of 5.41% beginning November 30, 2007. If approved by the Minnesota Public Utilities Commission (MPUC), interim rates will remain in effect for all Minnesota customers until the MPUC makes a final determination on the electric utility’s request, which is expected by

4

August 1, 2008. If final rates are lower than interim rates, the electric utility will refund Minnesota customers the difference with interest.

• Certain costs currently included in the Fuel Clause Adjustment (FCA) in retail rates may be excluded from recovery through the FCA but may be subject to recovery through rates established in a general rate case. Further, all, or portions of, gross margins on asset-based wholesale electric sales may become subject to refund through the FCA as a result of a general rate case.

• Weather conditions or changes in weather patterns can adversely affect the corporation’s operations and revenues.

• Electric wholesale margins could be further reduced as the Midwest Independent Transmission System Operator market becomes more efficient.

• Electric wholesale trading margins could be reduced or eliminated by losses due to trading activities.

• The corporation’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.

• Wholesale sales of electricity from excess generation could be affected by reductions in coal shipments to the Big Stone and Hoot Lake plants due to supply constraints or rail transportation problems beyond the corporation’s control.

• The corporation’s electric segment has capitalized $8.1 million in costs related to the planned construction of a second electric generating unit at its Big Stone Plant site as of September 30, 2007. Should approvals of permits not be received on a timely basis, the project could be at risk. If the project is abandoned for permitting or other reasons, these capitalized costs and others incurred in future periods may be subject to expense and may not be recoverable.

• The corporation’s manufacturer of wind towers operates in a market that has been dependent on the Federal Production Tax Credit. This tax credit is currently in place through December 31, 2008. Should this tax credit not be renewed, the revenues and earnings of this business could be reduced.

• Federal and state environmental regulation could cause the corporation to incur substantial capital expenditures which could result in increased operating costs.

• Existing or new laws or regulations addressing climate change or reductions of greenhouse gas emissions by federal or state authorities, such as mandated levels of renewable generation or mandatory reductions in carbon dioxide (CO₂) emission levels or taxes on CO₂ emissions, that result in increases in electric service costs could negatively impact the corporation’s net income, financial position and operating cash flows if such costs cannot be recovered through rates granted by ratemaking authorities in the states where the electric utility provides service or through increased market prices for electricity.

5

• The corporation’s plans to grow and diversify through acquisitions may not be successful and could result in poor financial performance.

• The corporation’s plan to grow its nonelectric businesses could be limited by state law.

• Competition is a factor in all of the corporation’s businesses.

• Economic uncertainty could have a negative impact on the corporation’s future revenues and earnings.

• Volatile financial markets and changes in the corporation’s debt rating could restrict the corporation’s ability to access capital and could increase borrowing costs and pension plan expenses.

• The price and availability of raw materials could affect the revenue and earnings of the corporation’s manufacturing segment.

• The corporation’s food ingredient processing segment operates in a highly competitive market and is dependent on adequate sources of raw materials for processing. Should the supply of these raw materials be affected by poor growing conditions, this could negatively impact the results of operations for this segment. This segment could also be impacted by foreign currency changes between Canadian and United States currency and prices of natural gas.

• 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 business. Reductions in PVC resin prices could negatively impact PVC pipe prices, profit margins on PVC pipe sales and the value of PVC pipe held in inventory.

• Changes in the rates or method of third-party reimbursements for diagnostic imaging services could result in reduced demand for those services or create downward pricing pressure, which would decrease revenues and earnings for the corporation’s health services segment.

• The corporation’s health services businesses may not be able to retain or comply with the dealership arrangement and other agreements with Philips Medical.

• A significant failure or an inability to properly bid or perform on projects by the corporation’s construction businesses could lead to adverse financial results.

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, health services, food ingredient processing and infrastructure businesses which include plastics, construction and transportation. 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, 2007 and 2006 in the attached financial statements.

Consolidated Statements of Income, Consolidated Balance Sheets — Assets, Consolidated Balance Sheets — Liabilities and Equity

6

Otter Tail Corporation
Consolidated Statements of Income
For the three and nine months ended September 30, 2007 and 2006
In thousands, except share and per share amounts
(not audited)

	Quarter Ended September 30,						Year-to-date September 30,
	2007			2006			2007			2006
Operating revenues by segment:
Electric	$	72,110		$	71,206		$	232,662		$	227,308
Plastics		36,975			45,941			114,319			136,731
Manufacturing		95,330			76,667			286,341			226,555
Health services		31,360			35,432			96,775			100,341
Food ingredient processing		15,714			11,474			53,612			30,635
Other business operations		51,956			40,739			129,012			99,397
Intersegment eliminations		(1,210	)		(917	)		(3,521	)		(2,714	)
Total operating revenues		302,235			280,542			909,200			818,253
Operating expenses:
Fuel and purchase power		23,493			24,436			91,027			87,098
Nonelectric cost of goods sold (excludes depreciation; included below)		179,868			161,148			521,500			449,905
Electric operating and maintenance expense		29,750			28,693			88,329			85,318
Nonelectric operating and maintenance expense		30,211			29,543			92,346			85,097
Depreciation and amortization		13,366			12,552			39,406			37,155
Total operating expenses		276,688			256,372			832,608			744,573
Operating income (loss) by segment:
Electric		12,286			11,647			33,805			35,658
Plastics		2,515			7,792			13,383			24,046
Manufacturing		7,953			5,944			25,098			19,793
Health services		348			749			3,631			2,693
Food ingredient processing		1,979			(1,602	)		5,064			(4,792	)
Other business operations		466			(360	)		(4,389	)		(3,718	)
Total operating income — continuing operations		25,547			24,170			76,592			73,680
Interest charges		4,927			5,078			14,821			14,622
Other income		619			1,060			1,232			2,147
Income taxes — continuing operations		7,907			6,676			23,160			21,737
Net income (loss) by segment — continuing operations:
Electric		6,493			6,494			17,491			19,485
Plastics		1,384			4,578			7,610			14,177
Manufacturing		3,477			2,456			11,351			8,861
Health services		53			300			1,709			1,141
Food ingredient processing		993			(1,078	)		2,985			(3,504	)
Other business operations		932			726			(1,303	)		(692	)
Total net income — continuing operations		13,332			13,476			39,843			39,468
Discontinued operations
Income from discontinued operations net of taxes of $0; $0; $0 and $28 for the respective periods		—			—			—			26
Net gain on disposition of discontinued operations — net of taxes of $0; $0; $0 and $224 for the respective periods		—			—			—			336
Net income from discontinued operations		—			—			—			362
Total net income		13,332			13,476			39,843			39,830
Preferred stock dividend		184			183			552			551
Balance for common:	$	13,148		$	13,293		$	39,291		$	39,279
Average number of common shares outstanding—basic		29,745,600			29,412,526			29,644,866			29,377,158
Average number of common shares outstanding—diluted		29,995,660			29,805,897			29,887,510			29,764,752
Basic earnings per common share:
Continuing operations (net of preferred dividend requirement)	$	0.44		$	0.45		$	1.33		$	1.33
Discontinued operations	$	—		$	—		$	—		$	0.01
	$	0.44		$	0.45		$	1.33		$	1.34
Diluted earnings per common share:
Continuing operations (net of preferred dividend requirement)	$	0.44		$	0.45		$	1.31		$	1.31
Discontinued operations	$	—		$	—		$	—		$	0.01
	$	0.44		$	0.45		$	1.31		$	1.32

Otter Tail Corporation
Consolidated Balance Sheets
Assets
In thousands
(not audited)

	September 30,		December 31,
	2007		2006
Current assets
Cash and cash equivalents	$	704	$	6,791
Accounts receivable:
Trade—net		161,684		135,011
Other		12,713		10,265
Inventories		97,757		103,002
Deferred income taxes		8,221		8,069
Accrued utility revenues		12,693		23,931
Costs and estimated earnings in excess of billings		44,055		38,384
Other		13,637		9,611
Assets of discontinued operations		—		289
Total current assets		351,464		335,353
Investments and other assets		32,959		29,946
Goodwill—net		99,242		98,110
Other intangibles—net		20,698		20,080
Deferred debits:
Unamortized debt expense and reacquisition premiums		5,813		6,133
Regulatory assets and other deferred debits		46,882		50,419
Total deferred debits		52,695		56,552
Plant
Electric plant in service		946,727		930,689
Nonelectric operations		255,913		239,269
Total		1,202,640		1,169,958
Less accumulated depreciation and amortization		503,295		479,557
Plant—net of accumulated depreciation and amortization		699,345		690,401
Construction work in progress		86,621		28,208
Net plant		785,966		718,609
Total	$	1,343,024	$	1,258,650

Otter Tail Corporation
Consolidated Balance Sheets
Liabilities and Equity
In thousands
(not audited)

	September 30,		December 31,
	2007		2006
Current liabilities
Short-term debt	$	78,781	$	38,900
Current maturities of long-term debt		3,019		3,125
Accounts payable		111,550		120,195
Accrued salaries and wages		26,660		28,653
Accrued federal and state income taxes		4,308		2,383
Other accrued taxes		10,075		11,509
Other accrued liabilities		13,843		10,495
Liabilities of discontinued operations		—		197
Total current liabilities		248,236		215,457
Pensions benefit liability		42,260		44,035
Other postretirement benefits liability		33,335		32,254
Other noncurrent liabilities		21,581		18,866
Deferred credits
Deferred income taxes		114,843		112,740
Deferred investment tax credit		7,328		8,181
Regulatory liabilities		64,614		63,875
Other		255		281
Total deferred credits		187,040		185,077
Capitalization
Long-term debt, net of current maturities		278,378		255,436
Class B stock options of subsidiary		1,255		1,255
Cumulative preferred shares		15,500		15,500
Cumulative preference shares — authorized 1,000,000 shares without par value; outstanding — none		—		—
Common shares, par value $5 per share		149,139		147,609
Premium on common shares		107,502		99,223
Retained earnings		258,129		245,005
Accumulated other comprehensive income (loss)		669		(1,067	)
Total common equity		515,439		490,770
Total capitalization		810,572		762,961
Total	$	1,343,024	$	1,258,650