##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended December 31, 2006
 o
    
    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission File Number 0-368
 OTTER TAIL CORPORATION
  MINNESOTA
(State or other jurisdiction of incorporation or organization)
    
    41-0462685
(I.R.S. Employer Identification No.)
 215 SOUTH CASCADE STREET, BOX 496,
FERGUS FALLS, MINNESOTA
(Address of principal executive offices)
    
    56538-0496
(Zip Code)
 866-410-8780
  Title of each class
    
    Name of each exchange on which registeredCOMMON SHARES, par value $5.00 per share
    
    The NASDAQ Stock Market LLC
  CUMULATIVE PREFERRED SHARES, without par value
 þ o
 o þ
 þ o
 þ
  þ o o
 o þ
 $784,855,944.
 29,551,401 Common Shares ($5 par value) as of February 15, 2007.
  2006 Annual Report to Shareholders-Portions incorporated by reference into Parts I and II
Proxy Statement for the 2007 Annual Meeting-Portions incorporated by reference into Part III




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TABLE OF CONTENTS  PART IItem 1. BUSINESSItem 1A. RISK FACTORSItem 1B. UNRESOLVED STAFF COMMENTSItem 2. PROPERTIESItem 3. LEGAL PROCEEDINGSItem 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSItem 4A. EXECUTIVE OFFICERS OF THE REGISTRANT (AS OF MARCH 1, 2007)PART IIItem 5. MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESItem 6. SELECTED FINANCIAL DATAItem 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSItem 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKItem 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAItem 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREItem 9A. CONTROLS AND PROCEDURESItem 9B. OTHER INFORMATIONPART IIIItem 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEItem 11. EXECUTIVE COMPENSATIONItem 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSItem 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEItem 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESPART IVItem 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULESSIGNATURESRestated Bylaws, as amendedExhibit 10.N.2APortions of 2006 Annual Report of ShareholdersSubsidiariesConsent of Deloitte & Touche LLPPowers of Attorney302 Certification of Chief Executive Officer302 Certification of Chief Financial Officer906 Certification of Chief Executive Officer906 Certification of Chief Financial Officer    Table of Contents  
  
 BUSINESS
 General Development of Business
 th
     
    
    ability to provide returns on invested capital that exceed the Companys weighted
average cost of capital over the long term; and
    
    assessment of an operating companys business and potential for future earnings
growth.
  1




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##### Table of Contents




    
    Electric (the Utility) includes the production, transmission, distribution
and sale of electric energy in Minnesota, North Dakota and South Dakota under the name
Otter Tail Power Company. In addition the Utility is an active wholesale participant in
the Midwest Independent Transmission System Operator (MISO) markets. Electric utility
operations have been the Companys primary business since incorporation.
    
    Plastics consists of businesses producing polyvinyl chloride and
polyethylene pipe in the Upper Midwest and Southwest regions of the United States.
    
    Manufacturing consists of businesses in the following manufacturing
activities: production of waterfront equipment, wind towers, material and handling
trays and horticultural containers, contract machining, and metal parts stamping and
fabrication. These businesses have manufacturing facilities in Minnesota, North Dakota,
South Carolina, Missouri, California, Florida and Ontario, Canada and sell products
primarily in the United States.
    
    Health Services consists of businesses involved in the sale of diagnostic
medical equipment, patient monitoring equipment and related supplies and accessories.
These businesses also provide equipment maintenance, diagnostic imaging services and
rental of diagnostic medical imaging equipment to various medical institutions located
throughout the United States.
    
    Food Ingredient Processing consists of Idaho Pacific Holdings, Inc. (IPH),
which owns and operates potato dehydration plants in Ririe, Idaho; Center, Colorado and
Souris, Prince Edward Island, Canada. IPH produces dehydrated potato products that are
sold in the United States, Canada, Europe, the Middle East, the Pacific Rim and Central
America. Approximately 32% of IPHs sales are to customers outside of the United
States.
    
    Other Business Operations consists of businesses in residential, commercial
and industrial electric contracting industries, fiber optic and electric distribution
systems, wastewater and HVAC systems construction, transportation and energy services,
as well as the portion of corporate general and administrative expenses that are not
allocated to other segments. These businesses operate primarily in the Central United
States, except for the transportation company which operates in 48 states and 6
Canadian provinces.
   
    
    Emerging or middle market company;
    
    Proven entrepreneurial management team that will remain after the acquisition;
    
    Preference for 100% ownership of the acquired company;
    
    Products and services intended for commercial rather than retail consumer use; and
    
    The potential to provide immediate earnings and future growth.
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##### Table of Contents



Accounting
for the Impairment of Disposal of Long-Lived Assets
   Financial Information About Industry Segments
  Narrative Description of Business
 ELECTRIC
 General
  State
    
    2006
    
    2005Minnesota
    
    
    51.5
    %
    
    
    50.3
    %North Dakota
    
    
    39.8
    
    
    
    40.9South Dakota
    
    
    8.7
    
    
    
    8.8Total
    
    
    100.0
    %
    
    
    100.0
    %
  3




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##### Table of Contents



Customer category
    
    2006
    
    2005Commercial
    
    
    35.6
    %
    
    
    33.5
    %Residential
    
    
    30.5
    
    
    
    28.1Industrial
    
    
    23.0
    
    
    
    20.9All other sources
    
    
    10.9
    
    
    
    17.5Total
    
    
    100.0
    %
    
    
    100.0
    %
    Capability and Demand
  Base load net plant capability
    
    2006
    
    2005Big Stone Plant
    
    
    256,025
    kW
    
    
    256,025
    kWCoyote Station
    
    
    149,450
    
    
    
    149,450Hoot Lake Plant
    
    
    143,875
    
    
    
    153,700Co-generation plant  Bemidji, MN (contract)
    
    
    
    
    
    
    5,862Co-generation plant  Perham, MN (contract)
    
    
    1,281
    
    
    
    1,242Total
    
    
    550,631
    kW
    
    
    566,279
    kW
  4




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Big Stone II
   5




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##### Table of Contents



Fuel Supply
   2006
    
    2005Net Kilowatt Hours
    
    
    
    
    
    Net Kilowatt HoursGenerated
    
    % of Total Kilowatt
    
    Generated
    
    % of Total KilowattSources
    
    (Thousands)
    
    Hours Generated
    
    (Thousands)
    
    Hours GeneratedSubbituminous Coal
    
    
    2,539,723
    
    
    
    71.1
    %
    
    
    2,410,719
    
    
    
    68.6
    %Lignite Coal
    
    
    981,478
    
    
    
    27.5
    
    
    
    1,043,020
    
    
    
    29.7Hydro
    
    
    18,363
    
    
    
    .5
    
    
    
    23,446
    
    
    
    .7Natural Gas and Oil
    
    
    31,846
    
    
    
    .9
    
    
    
    36,520
    
    
    
    1.0Total
    
    
    3,571,410
    
    
    
    100.0
    %
    
    
    3,513,705
    
    
    
    100.0
    %
 6




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##### Table of Contents



Plant
    
    Coal Supplier
    
    Type of Coal
    
    Expiration DateBig Stone Plant
    
    Arch Coal Sales Company, Inc.
    
    Wyoming subbituminous
    
    December 31, 2007Big Stone Plant
    
    Kennecott Coal Sales Company
    
    Wyoming subbituminous
    
    December 31, 2007Hoot Lake Plant
    
    Kennecott Coal Sales Company
    
    Wyoming subbituminous
    
    December 31, 2007Coyote Station
    
    Dakota Westmoreland Corporation
    
    North Dakota lignite
    
    2016
     7




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##### Table of Contents



General Regulation
   2006
    
    2005% of
    
    % of
    
    % of
    
    % ofElectric
    
    kWh
    
    Electric
    
    kWhRates
    
    Regulation
    
    Revenues
    
    Sales
    
    Revenues
    
    SalesMN retail sales
    
    MN Public Utilities
Commission
    
    
    33.6
    %
    
    
    30.8
    %
    
    
    31.2
    %
    
    
    30.2
    %ND retail sales
    
    ND Public Service
Commission
    
    
    25.9
    
    
    
    22.7
    
    
    
    25.3
    
    
    
    22.9SD retail sales
    
    SD Public Utilities
Commission
    
    
    5.7
    
    
    
    5.4
    
    
    
    5.5
    
    
    
    5.2Transmission & wholesale
    
    Federal Energy Regulatory Commission
    
    
    34.8
    
    
    
    41.1
    
    
    
    38.0
    
    
    
    41.7100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    Minnesota
 8




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9




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10




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##### Table of Contents



North Dakota
   11




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##### Table of Contents



South Dakota
   FERC
 12
    Table of Contents      
    
    The Public Utility Holding Company Act of 1935 (PUHCA) was repealed effective February
8, 2006. PUHCA significantly restricted mergers and acquisitions in the electric utility
sector.
    
    FERC appointed the Electric Reliability Organization (ERO) formerly known as North
American Electric Reliability Council (NERC) as an electric reliability organization to
establish and enforce mandatory reliability rules regarding the interstate electric
transmission system. On January 1, 2007 the ERO began operating.
    
    The FERC established incentives for transmission companies, such as performance based
rates, recovery of costs to comply with reliability rules and accelerated depreciation for
investments in transmission infrastructure.
    
    Federal support was made available for certain clean coal power initiatives, nuclear
power projects and renewable energy technologies.
  MAPP
 MEMA
 MRO
 13




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##### Table of Contents



MISO
  Other:
 Competition, Deregulation and Legislation
     14




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Environmental Regulation
 Impact of Environmental Laws
 Air Quality
      15
    Table of Contents      .
 16
    Table of Contents      Water Quality
   Solid Waste
 17
    Table of Contents      Capital Expenditures
   18




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##### Table of Contents



Franchises
  Employees
  PLASTICS
 General
   Northern Pipe Products, Inc.
 Vinyltech Corporation
  Customers
  Competition
 19
    Table of Contents     Manufacturing and Resin Supply
    Capital Expenditures
  Employees
  20




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##### Table of Contents



MANUFACTURING
 General
   BTD Manufacturing, Inc. (BTD)
 DMI Industries, Inc. (DMI)
 ShoreMaster, Inc. (ShoreMaster),
 T. O. Plastics, Inc. (T.O. Plastics)
 Competition
   21




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##### Table of Contents



Raw Materials Supply
  Legislation
  Capital Expenditures
  Employees
  HEALTH SERVICES
 General
   DMS Health Technologies, Inc. (DMSHT)
 22




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##### Table of Contents



DMS Imaging, Inc.
 
    
    DMS Imaging  provides shared diagnostic medical imaging services
(primarily mobile) for MR, CT, nuclear medicine, PET, PET/CT, ultrasound,
mammography and bone density analysis.
    
    DMS Interim Solutions  offers interim and rental options for
diagnostic imaging services.
    
    DMS MedSource Partners  develops long-term relationships with
healthcare providers to offer dedicated in-house diagnostic imaging
services.
    
    DMS Portable X-Ray  delivers portable x-ray, ultrasound and
electrocardiography services to nursing homes and other facilities.
  Regulation
    23
    Table of Contents        24
    Table of Contents      Reimbursement
   Competition
  25




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##### Table of Contents



Environmental, Health or Safety Laws
  Capital Expenditures
  Employees
  FOOD INGREDIENT PROCESSING
 General
   Customers
  Competition
 26
    Table of Contents    Potato Supply
  Regulations
  Capital Expenditures
  Employees
  OTHER BUSINESS OPERATIONS
 General
  27
    Table of Contents    Foley Company
 Midwest Construction Services, Inc. (MCS)
 Otter Tail Energy Services Company
 E. W. Wylie Corporation (Wylie)
 Competition
   Capital Expenditures
  28




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##### Table of Contents



Employees
  Forward-Looking Information  Safe Harbor Statement Under the  Private Securities Litigation Reform Act of 1995
   
    
    The Company is subject to federal and state legislation, government regulations and
regulatory actions that may have a negative impact on its business and results of
operations.
    
    The Company may not be able to respond effectively to deregulation initiatives in the
electric industry, which could result in reduced revenues and earnings.
    
    Future operating results of the Electric segment will be impacted by the outcome of a
rate case to be filed in Minnesota in late 2007.
    
    Certain MISO-related costs currently included in the FCA in Minnesota retail rates may
be excluded from recovery through the FCA and subject to future recovery through rates
established in a general rate case.
    
    Weather conditions can adversely affect the Companys operations and revenues.
    
    Electric wholesale margins could be further reduced as the MISO market becomes more
efficient.
    
    Electric wholesale trading margins could be reduced or eliminated by losses due to
trading activities.
    
    The 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.
    
    Wholesale sales of electricity from excess generation could be reduced by reductions in
coal shipments to the Big Stone and Hoot Lake plants due to supply constraints or rail
transportation problems beyond the Companys control
    
    The Utility has capitalized $6.1 million in costs related to the planned construction
of a second electric generating unit at its Big Stone Plant site as of December 31, 2006.
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.
 29




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##### Table of Contents




    
    DMI Industries 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 extended or renewed, the revenues and earnings of this business and the
Companys electrical contractor could be adversely effected.
    
    Federal and state environmental regulation could cause the Company to incur substantial
capital expenditures which could result in increased operating costs.
    
    The Companys plans to grow and diversify through acquisitions may not be successful
and could result in poor financial performance.
    
    The Companys plan to grow its nonelectric businesses could be limited by state law.
    
    Competition is a factor in all of the Companys businesses.
    
    Economic uncertainty could have a negative impact on the Companys future revenues and
earnings.
    
    Volatile financial markets could restrict the Companys ability to access capital and
could increase borrowing costs and pension plan expenses.
    
    The price and availability of raw materials could affect the revenues and earnings of
the Companys Manufacturing segment.
    
    The Company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 Companys Plastics segment is highly dependent on a limited number of vendors for
PVC resin, many of which are located in the Gulf Coast region, 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. 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 methods 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 Companys Health Services
segment.
    
    The Company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
Companys construction businesses could lead to adverse financial results.
  
 
 RISK FACTORS
  30




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UNRESOLVED STAFF COMMENTS
  
 PROPERTIES
        
 LEGAL PROCEEDINGS
  31




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SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 EXECUTIVE OFFICERS OF THE REGISTRANT (AS OF MARCH 1, 2007)
  NAME AND AGE
    
    DATES ELECTED TO OFFICE
    

PRESENT
POSITION AND BUSINESS EXPERIENCEJohn D. Erickson (48)
    
    4/8/02
    
    Present:
    
    President and Chief
Executive Officer

Prior to
4/8/02
    
    PresidentGeorge A. Koeck (54)
    
    4/10/00
    
    Present:
    
    Corporate Secretary
and General CounselLauris N. Molbert (49)
    
    6/10/02
    
    Present:
    
    Executive Vice President and
Chief Operating OfficerPrior to
6/10/02
    
    Executive Vice President, Corporate Development
and Varistar President and Chief
Operating OfficerKevin G. Moug (47)
    
    4/9/01
    
    Present:
    
    Chief Financial Officer and
TreasurerCharles S. MacFarlane (42)
    
    5/1/03
    
    President, Otter Tail Power Company6/1/02
    
    Interim President, Otter Tail Power Company1/29/02
    
    Director, Finance & Strategic Planning,
Otter Tail Power CompanyPrior to
1/20/02
    
    Director, Finance Planning,
Otter Tail Power Company
  32




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##### Table of Contents



MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
  
  
 2001
    
    2002
    
    2003
    
    2004
    
    2005
    
    2006OTC
    
    $
    100
    
    
    $
    95.83
    
    
    $
    99.11
    
    
    $
    98.72
    
    
    $
    116.59
    
    
    $
    130.37EEI
    
    $
    100
    
    
    $
    85.27
    
    
    $
    105.29
    
    
    $
    129.34
    
    
    $
    150.10
    
    
    $
    181.25NASDAQ
    
    $
    100
    
    
    $
    69.13
    
    
    $
    103.36
    
    
    $
    112.49
    
    
    $
    114.88
    
    
    $
    126.22
 
 SELECTED FINANCIAL DATA
  33




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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
  
 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
  
 CONTROLS AND PROCEDURES
    34




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##### Table of Contents



OTHER INFORMATION
  
  
 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
   
 EXECUTIVE COMPENSATION
  
 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
  35




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##### Table of Contents



Number ofsecuritiesremaining availableNumber of
    
    
    
    
    
    for future issuancesecurities to be
    
    
    
    
    
    under equityissued upon
    
    Weighted-average
    
    compensation plansexercise of
    
    exercise price of
    
    (excludingoutstanding
    
    outstanding
    
    securitiesoptions, warrants
    
    options, warrants
    
    reflected in columnPlan Category
    
    and rights
    
    and rights
    
    (a))(a)
    
    
    
    (b)
    
    
    
    (c)Equity compensation
plans approved by
security holders1999 Stock
Incentive Plan
    
    
    1,328,291
    (1)
    
    $
    21.15
    
    
    
    1,338,508
    (2)1999 Employee
Stock Purchase Plan
    
    
    
    
    
    
    N/A
    
    
    
    449,842
    (3)Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    1,328,291
    
    
    $
    21.15
    
    
    
    1,788,380
 
 (1)
    
    Includes 88,050, 75,150 and 23,500 performance based share awards made in 2006, 2005 and
2004, respectively, 38,615 restricted stock units granted in 2006 and 11,738 phantom shares
as part of the deferred director compensation program and excludes 64,441 shares of restricted
stock issued under the 1999 Stock Incentive Plan.(2)
    
    The 1999 Stock Incentive Plan provides for the issuance of any shares available under the
plan in the form of restricted stock, performance awards and other types of stock-based
awards, in addition to the granting of options, warrants or stock appreciation rights.(3)
    
    Shares are issued based on employees election to participate in the plan. 
 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 PRINCIPAL ACCOUNTANT FEES AND SERVICES
  36




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EXHIBITS, FINANCIAL STATEMENT SCHEDULES
     37




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##### Table of Contents



OTTER TAIL CORPORATIONBy
    /s/ Kevin G. MougKevin G. MougChief Financial Officer and TreasurerDated:
    March 1, 2007  Signature and Title
 John D. Erickson
    
    
    )President and Chief Executive Officer
    
    
    )(principal executive officer)
    
    
    ))Kevin G. Moug
    
    
    )Chief Financial Officer and Treasurer
    
    
    )(principal financial and accounting officer)
    
    
    ))
    
    
    By
    
    /s/ John D. EricksonJohn C. MacFarlane
    
    
    )
    
    
    
    
    John D. EricksonChairman of the Board and Director
    
    
    )
    
    
    
    
    Pro Se and Attorney-in-Fact)
    
    
    
    
    Dated March 1, 2007Karen M. Bohn, Director
    
    
    ))Dennis R. Emmen, Director
    
    
    ))Arvid R. Liebe, Director
    
    
    ))Edward J. McIntyre, Director
    
    
    ))Joyce Nelson Schuette, Director
    
    
    ))Kenneth L. Nelson, Director
    
    
    ))Nathan I. Partain, Director
    
    
    ))Gary J. Spies, Director
    
    
    )
 38




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##### Table of Contents



TABLE OF CONTENTS
 
  Page inAnnualReport toShareholdersFinancial Statements:Managements Report Regarding Internal Controls Over Financial Reporting
    
    
    33Report of Independent Registered Public Accounting Firm
    
    
    34Consolidated Statements of Income for the Three Years Ended December 31, 2006
    
    
    35Consolidated Balance Sheets, December 31, 2006 and 2005
    
    
    36 & 37Consolidated Statements of Common Shareholders Equity for the Three Years Ended
December 31, 2006
    
    
    38Consolidated Statements of Cash Flows for the Three Years Ended December 31, 2006
    
    
    39Consolidated Statements of Capitalization, December 31, 2006 and 2005
    
    
    40Notes to Consolidated Financial Statements
    
    
    41-61Selected Consolidated Financial Data for the Five Years Ended December 31, 2006
    
    
    17Quarterly Data for the Two Years Ended December 31, 2006
    
    
    61
  39




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Exhibit Index
to
Annual Report
on Form 10-K
For Year Ended December 31, 2006
 Previously FiledAsExhibitFile No.
    
    
    No.3-A
    
    
    8-K
filed 4/10/01
    
    
    3
    
    
    Restated Articles of Incorporation, as amended (including
resolutions creating outstanding series of Cumulative
Preferred Shares).3-B
    
    
    
    
    
    
    
    
    Restated Bylaws, as amended.4-A-1
    
    
    10-K for year
ended 12/31/01
    
    
    4-D-7
    
    
    Note Purchase Agreement dated as of December 1, 2001.4-A-2
    
    
    10-K for year
ended 12/31/02
    
    
    4-D-4
    
    
    First Amendment dated as of December 1, 2002 to Note
Purchase Agreement dated as of December 1, 2001.4-A-3
    
    
    10-Q for quarter
ended 9/30/04
    
    
    4.2
    
    
    Second Amendment dated as of October 1, 2004 to Note
Purchase Agreement dated as of December 1, 2001.4-B
    
    
    8-K filed
5/02/06
    
    
    4.1
    
    
    Credit Agreement, dated as of April 26, 2006, among the
Company, the Banks named therein, U.S. Bank National
Association, as Agent, JPMorgan Chase Bank, N.A., as
Syndication Agent, and Wells Fargo Bank, National
Association, as Documentation Agent.4-C
    
    
    8-K filed 9/06/06
    
    
    4.1
    
    
    Credit Agreement dated as of September 1, 2006, between
Otter Tail Corporation, dba Otter Tail Power Company, and
U.S. Bank National Association.4-D
    
    
    8-K filed
2/28/07
    
    
    4.1
    
    
    Note Purchase Agreement, dated as of February 23, 2007,
between Otter Tail Corporation and Cascade Investment L.L.C.10-A
    
    
    2-39794
    
    
    4-C
    
    
    Integrated Transmission Agreement dated August 25, 1967,
between Cooperative Power Association and the Company.10-A-1
    
    
    10-K for year
ended 12/31/92
    
    
    10-A-1
    
    
    Amendment No. 1, dated as of September 6, 1979, to
Integrated Transmission Agreement, dated as of August 25,
1967, between Cooperative Power Association and the Company.10-A-2
    
    
    10-K for year
ended 12/31/92
    
    
    10-A-2
    
    
    Amendment No. 2, dated as of November 19, 1986, to
Integrated Transmission Agreement between Cooperative Power
Association and the Company.
 -40-




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##### Table of Contents



Previously FiledAsExhibitFile No.
    
    
    No.10-C-1
    
    
    2-55813
    
    
    5-E
    
    
    Contract dated July 1, 1958, between Central Power Electric
Corporation, Inc., and the Company.10-C-2
    
    
    2-55813
    
    
    5-E-1
    
    
    Supplement Seven dated November 21, 1973. (Supplements Nos.
One through Six have been superseded and are no longer in
effect.)10-C-3
    
    
    2-55813
    
    
    5-E-2
    
    
    Amendment No. 1 dated December 19, 1973, to
Supplement Seven.10-C-4
    
    
    10-K for year
ended 12/31/91
    
    
    10-C-4
    
    
    Amendment No. 2 dated June 17, 1986, to
Supplement Seven.10-C-5
    
    
    10-K for year
ended 12/31/92
    
    
    10-C-5
    
    
    Amendment No. 3 dated June 18, 1992, to
Supplement Seven.10-C-6
    
    
    10-K for year
ended 12/31/93
    
    
    10-C-6
    
    
    Amendment No. 4 dated January 18, 1994 to
Supplement Seven.10-D
    
    
    2-55813
    
    
    5-F
    
    
    Contract dated April 12, 1973, between the Bureau of
Reclamation and the Company.10-E-1
    
    
    2-55813
    
    
    5-G
    
    
    Contract dated January 8, 1973, between East River Electric
Power Cooperative and the Company.10-E-2
    
    
    2-62815
    
    
    5-E-1
    
    
    Supplement One dated February 20, 1978.10-E-3
    
    
    10-K for year
ended 12/31/89
    
    
    10-E-3
    
    
    Supplement Two dated June 10, 1983.10-E-4
    
    
    10-K for year
ended 12/31/90
    
    
    10-E-4
    
    
    Supplement Three dated June 6, 1985.10-E-5
    
    
    10-K for year
ended 12/31/92
    
    
    10-E-5
    
    
    Supplement No. Four, dated as of September 10, 1986.10-E-6
    
    
    10-K for year
ended 12/31/92
    
    
    10-E-6
    
    
    Supplement No. Five, dated as of January 7, 1993.10-E-7
    
    
    10-K for year
ended 12/31/93
    
    
    10-E-7
    
    
    Supplement No. Six, dated as of December 2, 199310-F
    
    
    10-K for year
ended 12/31/89
    
    
    10-F
    
    
    Agreement for Sharing Ownership of Generating Plant by and
between the Company, Montana-Dakota Utilities Co., and
Northwestern Public Service Company (dated as of
January 7, 1970).
 -41-




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##### Table of Contents



Previously FiledAsExhibitFile No.
    
    
    No.10-F-1
    
    
    10-K for year
ended 12/31/89
    
    
    10-F-1
    
    
    Letter of Intent for purchase of share of Big Stone Plant
from Northwestern Public Service Company (dated as of
May 8, 1984).10-F-2
    
    
    10-K for year
ended 12/31/91
    
    
    10-F-2
    
    
    Supplemental Agreement No. 1 to Agreement for Sharing
Ownership of Big Stone Plant (dated as of July 1, 1983).10-F-3
    
    
    10-K for year
ended 12/31/91
    
    
    10-F-3
    
    
    Supplemental Agreement No. 2 to Agreement for Sharing
Ownership of Big Stone Plant (dated as of March 1, 1985).10-F-4
    
    
    10-K for year
ended 12/31/91
    
    
    10-F-4
    
    
    Supplemental Agreement No. 3 to Agreement for Sharing
Ownership of Big Stone Plant (dated as of March 31, 1986).10-F-5
    
    
    10-Q for quarter
ended 9/30/03
    
    
    10.1
    
    
    Supplemental Agreement No. 4 to Agreement for Sharing
Ownership of Big Stone Plant (dated as of April 24, 2003).10-F-6
    
    
    10-K for year
ended 12/31/92
    
    
    10-F-5
    
    
    Amendment I to Letter of Intent dated May 8, 1984, for
purchase of share of Big Stone Plant.10-G
    
    
    10-Q for quarter
ended 06/30/04
    
    
    10.3
    
    
    Master Coal Purchase and Sale Agreement by and between the
Company, Montana-Dakota Utilities Co., Northwestern
Corporation and Kennecott Coal Sales Company-Big Stone Plant
(dated as of June 1, 2004).10-G-1
    
    
    10-Q for quarter
ended 06/30/04
    
    
    10.4
    
    
    Coal Supply Confirmation Letter by and between the Company,
Montana-Dakota Utilities Co., Northwestern Corporation and
Kennecott Coal Sales Company for shipments of coal from
January 1, 2005 through
December 31, 2007  Big Stone Plant (dated as of
July 14, 2004).10-G-2
    
    
    10-Q for quarter
ended 06/30/04
    
    
    10.5
    
    
    Coal Supply Agreement by and between the Company,
Montana-Dakota Utilities Co., Northwestern Corporation and
Arch Coal Sales Company, Inc. for the period January 1, 2005
through December 31, 2007  Big Stone Plant (dated as of July
22, 2004).10-H
    
    
    2-61043
    
    
    5-H
    
    
    Agreement for Sharing Ownership of Coyote Station
Generating Unit No. 1 by and between the Company, Minnkota
Power Cooperative, Inc., Montana-Dakota Utilities Co.,
Northwestern Public Service Company and Minnesota Power &
Light Company (dated as of July 1, 1977).10-H-1
    
    
    10-K for year
ended 12/31/89
    
    
    10-H-1
    
    
    Supplemental Agreement No. One dated as of November 30,
1978, to Agreement for Sharing Ownership of Coyote Generating
Unit No. 1.
 -42-




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##### Table of Contents



Previously FiledAsExhibitFile No.
    
    
    No.10-H-2
    
    
    10-K for year
ended 12/31/89
    
    
    10-H-2
    
    
    Supplemental Agreement No. Two dated as of March 1, 1981,
to Agreement for Sharing Ownership of Coyote Generating Unit
No. 1 and Amendment No. 2 dated March 1, 1981, to Coyote
Plant Coal Agreement.10-H-3
    
    
    10-K for year
ended 12/31/89
    
    
    10-H-3
    
    
    Amendment dated as of July 29, 1983, to Agreement for
Sharing Ownership of Coyote Generating Unit No. 1.10-H-4
    
    
    10-K for year
ended 12/31/92
    
    
    10-H-4
    
    
    Agreement dated as of September 5, 1985, containing
Amendment No. 3 to Agreement for Sharing Ownership of Coyote
Generating Unit No.1, dated as of July 1, 1977, and Amendment
No. 5 to Coyote Plant Coal Agreement, dated as of January 1,
1978.10-H-5
    
    
    10-Q for quarter
ended 9/30/01
    
    
    10-A
    
    
    Amendment dated as of June 14, 2001, to Agreement for
Sharing Ownership of Coyote Generating Unit No. 1.10-H-6
    
    
    10-Q for quarter
ended 9/30/03
    
    
    10.2
    
    
    Amendment dated as of April 24, 2003, to Agreement for
Sharing Ownership of Coyote Generating Unit No. 1.10-I
    
    
    2-63744
    
    
    5-I
    
    
    Coyote Plant Coal Agreement by and between the Company,
Minnkota Power Cooperative, Inc., Montana-Dakota Utilities
Co., Northwestern Public Service Company, Minnesota Power &
Light Company, and Knife River Coal Mining Company (dated as
of January 1, 1978).10-I-1
    
    
    10-K for year
ended 12/31/92
    
    
    10-I-1
    
    
    Addendum, dated as of March 10, 1980, to Coyote Plant Coal
Agreement.10-I-2
    
    
    10-K for year
ended 12/31/92
    
    
    10-I-2
    
    
    Amendment (No. 3), dated as of May 28, 1980, to Coyote
Plant Coal Agreement.10-I-3
    
    
    10-K for year
ended 12/31/92
    
    
    10-I-3
    
    
    Fourth Amendment, dated as of August 19, 1985 to Coyote
Plant Coal Agreement.10-I-4
    
    
    10-Q for quarter
ended 6/30/93
    
    
    19-A
    
    
    Sixth Amendment, dated as of February 17, 1993 to Coyote
Plant Coal Agreement.10-I-5
    
    
    10-K for year
ended 12/31/01
    
    
    10-I-5
    
    
    Agreement and Consent to Assignment of the Coyote Plant
Coal Agreement.10-J-1
    
    
    10-Q for quarter
ended 06/30/05
    
    
    10.1
    
    
    Big Stone II Power Plant Participation Agreement by and
among the Company, Central Minnesota Municipal Power Agency,
Great River Energy, Heartland Consumers Power District,
Montana-Dakota Utilities Co., a division of MDU Resources
Group, Inc., Southern Minnesota Municipal Power Agency and
Western Minnesota Municipal Power Agency, as Owners (dated as
of June 30, 2005).
 -43-




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##### Table of Contents



Previously FiledAsExhibitFile No.
    
    
    No.10-J-1a
    
    
    10-Q for quarter
ended 6/30/06
    
    
    10.6
    
    
    Amendment No. 1, dated as of June 1, 2006, to
Participation Agreement (dated as of June 30, 2005).10-J-1b
    
    
    8-K filed 8/31/06
    
    
    10.1
    
    
    Amendment No. 2, dated as of August 18, 2006, to
Participation Agreement (dated as of June 30, 2005).10-J-1c
    
    
    8-K filed 10/11/06
    
    
    10.1
    
    
    Amendment No. 3, effective September 1, 2006, to
Participation Agreement (dated as of June 30, 2005).10-J-2
    
    
    10-Q for quarter
ended 06/30/05
    
    
    10.2
    
    
    Big Stone II Power Plant Operation & Maintenance Services
Agreement by and among the Company, Central Minnesota
Municipal Power Agency, Great River Energy, Heartland
Consumers Power District, Montana-Dakota Utilities Co., a
division of MDU Resources Group, Inc., Southern Minnesota
Municipal Power Agency and Western Minnesota Municipal Power
Agency, as Owners, and the Company, as Operator (dated as of
June 30, 2005).10-J-3
    
    
    10-Q for quarter
ended 06/30/05
    
    
    10.3
    
    
    Big Stone I and Big Stone II 2005 Joint Facilities
Agreement by and among the Company, Central Minnesota
Municipal Power Agency, Great River Energy, Heartland
Consumers Power District, Montana-Dakota Utilities Co., a
division of MDU Resources Group, Inc., NorthWestern
Corporation dba NorthWestern Energy, Southern Minnesota
Municipal Power Agency and Western Minnesota Municipal Power
Agency, as Owners (dated as of June 30, 2005).10-J-3a
    
    
    8-K filed 8/25/06
    
    
    10.1
    
    
    Amendment No. 1, dated as of July 13, 2006, to Joint
Facilities Agreement (dated as of June 30, 2005).10-K-1
    
    
    10-Q for quarter
ended 9/30/99
    
    
    10
    
    
    Power Sales Agreement between the Company and Manitoba
Hydro Electric Board (dated as of July 1, 1999).10-L
    
    
    10-K for year
ended 12/31/91
    
    
    10-L
    
    
    Integrated Transmission Agreement by and between the
Company, Missouri Basin Municipal Power Agency and Western
Minnesota Municipal Power Agency (dated as of March 31,
1986).10-L-1
    
    
    10-K for year
ended 12/31/88
    
    
    10-L-1
    
    
    Amendment No. 1, dated as of December 28, 1988, to
Integrated Transmission Agreement (dated as of
March 31, 1986).10-M
    
    
    10-Q for quarter
ended 06/30/04
    
    
    10.1
    
    
    Master Coal Purchase Agreement by and between the Company
and Kennecott Coal Sales Company  Hoot Lake Plant (dated as
of December 31, 2001).
 -44-




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##### Table of Contents



Previously FiledAsExhibitFile No.
    
    
    No.10-M-1
    
    
    10-Q for quarter
ended 06/30/04
    
    
    10.2
    
    
    Coal Supply Confirmation Letter by and between the Company
and Kennecott Coal Sales Company for shipments of coal from
July 1, 2004 through December 31, 2007  Hoot Lake Plant
(dated as of May 26, 2004).10-N-1
    
    
    10-K for year
ended 12/31/02
    
    
    10-N-1
    
    
    Deferred Compensation Plan for Directors, as amended*10-N-2
    
    
    8-K filed
02/04/05
    
    
    10.1
    
    
    Executive Survivor and Supplemental Retirement Plan (2005
Restatement).*10-N-2a
    
    
    
    
    
    
    
    
    First Amendment of Executive Survivor and Supplemental
Retirement Plan (2005 Restatement).*10-N-3
    
    
    10-K for year
ended 12/31/93
    
    
    10-N-5
    
    
    Nonqualified Profit Sharing Plan.*10-N-4
    
    
    10-Q for quarter
ended 3/31/02
    
    
    10-B
    
    
    Nonqualified Retirement Savings Plan, as amended.*10-N-5
    
    
    8-K filed 4/13/06
    
    
    10.3
    
    
    1999 Employee Stock Purchase Plan, As Amended (2006).10-N-6
    
    
    8-K filed 4/13/06
    
    
    10.4
    
    
    1999 Stock Incentive Plan, As Amended (2006).10-N-7
    
    
    10-K for year ended
12/31/05
    
    
    10-N-7
    
    
    Form of Stock Option Agreement*10-N-8
    
    
    10-K for year ended
12/31/05
    
    
    10-N-8
    
    
    Form of Restricted Stock Agreement*10-N-9
    
    
    8-K filed 4/13/06
    
    
    10.2
    
    
    Form of 2006 Performance Award Agreement.*10-N-10
    
    
    8-K filed
04/15/05
    
    
    10.2
    
    
    Executive Annual Incentive Plan (Effective April 1, 2005).*10-N-11
    
    
    10-Q for quarter
ended 6/30/06
    
    
    10.5
    
    
    Form of 2006 Restricted Stock Unit Award Agreement *10-N-12
    
    
    8-K filed 4/13/06
    
    
    10.1
    
    
    Form of Restricted Stock Award Agreement for Directors.10-O-1
    
    
    10-Q for quarter
ended 6/30/02
    
    
    10-A
    
    
    Executive Employment Agreement, John Erickson.*10-O-2
    
    
    10-Q for quarter
ended 6/30/02
    
    
    10-B
    
    
    Executive Employment Agreement and amendment no. 1, Lauris
Molbert.*
 -45-




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##### Table of Contents



Previously FiledAsExhibitFile No.
    
    
    No.10-O-3
    
    
    10-Q for quarter
ended 6/30/02
    
    
    10-C
    
    
    Executive Employment Agreement, Kevin Moug.*10-O-4
    
    
    10-Q for quarter
ended 6/30/02
    
    
    10-D
    
    
    Executive Employment Agreement, George Koeck.*10-P-1
    
    
    10-Q for quarter
ended 6/30/02
    
    
    10-E
    
    
    Change in Control Severance Agreement, John Erickson.*10-P-2
    
    
    10-Q for quarter
ended 6/30/02
    
    
    10-F
    
    
    Change in Control Severance Agreement, Lauris Molbert.*10-P-3
    
    
    10-Q for quarter
ended 6/30/02
    
    
    10-G
    
    
    Change in Control Severance Agreement, Kevin Moug.*10-P-4
    
    
    10-Q for quarter
ended 6/30/02
    
    
    10-H
    
    
    Change in Control Severance Agreement, George Koeck.*13-A
    
    
    
    
    
    
    
    
    Portions of 2006 Annual Report to Shareholders incorporated
by reference in this Form 10-K.21-A
    
    
    
    
    
    
    
    
    Subsidiaries of Registrant.23-A
    
    
    
    
    
    
    
    
    Consent of Deloitte & Touche LLP.24-A
    
    
    
    
    
    
    
    
    Powers of Attorney.31.1
    
    
    
    
    
    
    
    
    Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    
    
    
    
    
    
    Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    
    
    
    
    
    
    Certification of Chief Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    
    
    
    
    
    
    Certification of Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Management contract of compensatory plan or arrangement required to be filed pursuant to Item
601(b)(10)(iii)(A) of Regulation S-K. -46-