##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

|                               |                |                                                                                          | 
|------------------------------ | -------------- | ---------------------------------------------------------------------------------------- | 
|(Mark One)                     |                |                                                                                          | 
|[X]                            |                | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 
|                               |                |                                                                                         
|For the quarterly period ended | March 31, 2003
|                               |                |                                                                                          | 
|                               |                |                                                                                         
|OR                            
|                               |                |                                                                                         
|[   ]                          |                | 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

---

(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Minnesota                                                      |  | 41-0462685                          
|                                                              
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                               |  |                                     
|215 South Cascade Street, Box 496, Fergus Falls, Minnesota     |  | 56538-0496                          
|                                                              
|(Address of principal executive offices)                       |  | (Zip Code)                          

866-410-8780

---

(Registrants telephone number, including area code)




---

(Former name, former address and former fiscal year, if changed since last report.)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [   ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2
of the Exchange Act). YES [X] NO [   ]

Indicate the number of shares outstanding of each of the issuers classes of
Common Stock, as of the latest practicable date:

April 30, 2003  25,683,168 Common Shares ($5 par value)





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TABLE OF CONTENTS



|                                                   |                                                                                               |                                       |  |  |  |  |  | 
|-------------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                     
|                                                   | Item 1. Financial Statements                                                                 
|                                                   |                                                                                               | Consolidated Balance Sheets          
|                                                   |                                                                                               | Consolidated Statements of Income    
|                                                   |                                                                                               | Consolidated Statements of Cash Flows
|                                                   | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                   | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                                                   | Item 4. Controls and Procedures                                                              
|PART II. OTHER INFORMATION                        
|                                                   | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                        
|CERTIFICATIONS                                    
|EXHIBIT INDEX                                     
|EX-99.A Certification Pursuant to 18 USC Sec. 1350
|EX-99.B Certification Pursuant to 18 USC Sec. 1350



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##### Table of Contents



OTTER TAIL CORPORATION

INDEX

|                              |                                                                                               |                                                                                                |       |          |      | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | ----- | -------- | ---- | 
|                              |                                                                                               |                                                                                                |       | Page No.
|                              |                                                                                               |                                                                                                |       |         
|Part I. Financial Information |                                                                                               |                                                                                                |       |         
|                              | Item 1. Financial Statements                                                                  |                                                                                                |       |          |     
|                              |                                                                                               | Consolidated
Balance Sheets  March 31, 2003
and December 31, 2002 (Unaudited)                 |       |          | 2&3  | 
|                              |                                                                                               | Consolidated Statements of Income  Three Months
Ended March 31, 2003 and 2002 (Unaudited)     |       |          | 4    | 
|                              |                                                                                               | Consolidated Statements of Cash Flows  Three Months
Ended March 31, 2003 and 2002 (Unaudited) |       |          | 5    | 
|                              |                                                                                               | Notes to Consolidated Financial Statements (Unaudited)                                         |       |          | 6-11 | 
|                              | Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations |                                                                                                |       | 12-19    |     
|                              | Item 3. Quantitative and Qualitative Disclosures about
Market Risk                            |                                                                                                |       | 19       |     
|                              | Item 4. Controls and Procedures                                                               |                                                                                                |       | 20       |     
|Part II. Other Information    |                                                                                               |                                                                                                |       |         
|                              | Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                                |       | 20       |     
|Signatures                    |                                                                                               |                                                                                                | 20    |         
|Certifications                |                                                                                               |                                                                                                | 21-22 |         





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##### Table of Contents






PART I. FINANCIAL INFORMATION




Item 1. Financial Statements




Otter Tail Corporation
Consolidated Balance Sheets
(Unaudited)-Assets-

|                                                    |             |                                                        |         |        |                        |         |              |        |           |         | 
|--------------------------------------------------- | ----------- | ------------------------------------------------------ | ------- | ------ | ---------------------- | ------- | ------------ | ------ | --------- | ------- | 
|                                                    |             |                                                        |         |        | March 31,              |         | December 31,
|                                                    |             |                                                        |         |        | 2003                   |         | 2002        
|                                                    |             |                                                        |         |        |                        |         |             
|                                                    |             |                                                        |         |        | (Thousands of dollars)
|Current assets:                                     |             |                                                        |         |        |                        |         |              |       
|Cash and cash equivalents                           |             | $                                                      | 884     |        |                        | $       | 9,937        |       
|Accounts receivable:                                |             |                                                        |         |        |                        |         |              |       
|                                                    | Trade  net |                                                        |         | 86,682 |                        |         |              | 81,670 |          
|                                                    | Other       |                                                        |         | 1,458  |                        |         |              | 1,466  |          
|Inventories                                         |             |                                                        | 53,691  |        |                        |         | 44,154       |       
|Deferred income taxes                               |             |                                                        | 4,489   |        |                        |         | 4,487        |       
|Accrued utility revenues                            |             |                                                        | 11,208  |        |                        |         | 11,633       |       
|Other                                               |             |                                                        | 14,251  |        |                        |         | 10,866       |       
|                                                    |             |                                                        |         |        |                        |         |              |       
|                                                    |             | Total current assets                                   |         |        | 172,663                |         |              |        | 164,213   |        
|Investments                                         |             |                                                        | 20,000  |        |                        |         | 19,314       |       
|Goodwill  net                                      |             |                                                        | 64,557  |        |                        |         | 64,557       |       
|Other intangibles  net                             |             |                                                        | 5,899   |        |                        |         | 5,592        |       
|Other assets                                        |             |                                                        | 16,962  |        |                        |         | 16,821       |       
|Deferred debits:                                    |             |                                                        |         |        |                        |         |              |       
|Unamortized debt expense and reacquisition premiums |             |                                                        | 8,679   |        |                        |         | 8,895        |       
|Regulatory assets                                   |             |                                                        | 11,822  |        |                        |         | 10,238       |       
|Other                                               |             |                                                        | 464     |        |                        |         | 1,220        |       
|                                                    |             |                                                        |         |        |                        |         |              |       
|                                                    |             | Total deferred debits                                  |         |        | 20,965                 |         |              |        | 20,353    |        
|Plant:                                              |             |                                                        |         |        |                        |         |              |       
|Electric plant in service                           |             |                                                        | 837,018 |        |                        |         | 835,382      |       
|Nonelectric operations                              |             |                                                        | 178,958 |        |                        |         | 178,656      |       
|                                                    |             |                                                        |         |        |                        |         |              |       
|                                                    |             | Total plant                                            |         |        | 1,015,976              |         |              |        | 1,014,038 |        
|Less accumulated depreciation and amortization      |             |                                                        | 475,675 |        |                        |         | 467,759      |       
|                                                    |             |                                                        |         |        |                        |         |              |       
|                                                    |             | Plantnet of accumulated depreciation and amortization |         |        | 540,301                |         |              |        | 546,279   |        
|Construction work in progress                       |             |                                                        | 51,022  |        |                        |         | 41,607       |       
|                                                    |             |                                                        |         |        |                        |         |              |       
|                                                    |             | Net plant                                              |         |        | 591,323                |         |              |        | 587,886   |        
|                                                    |             |                                                        |         |        |                        |         |              |       
|                                                    |             |                                                        | Total   |        | $                      | 892,369 |              |        | $         | 878,736 | 
|                                                    |             |                                                        |         |        |                        |         |              |       

See accompanying notes to consolidated financial statements

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Otter Tail Corporation
Consolidated Balance Sheets
(Unaudited)-Liabilities-

|                                                                                                                        |                           |                      |         |         |                        |         |              |         |         |         | 
|----------------------------------------------------------------------------------------------------------------------- | ------------------------- | -------------------- | ------- | ------- | ---------------------- | ------- | ------------ | ------- | ------- | ------- | 
|                                                                                                                        |                           |                      |         |         | March 31,              |         | December 31,
|                                                                                                                        |                           |                      |         |         | 2003                   |         | 2002        
|                                                                                                                        |                           |                      |         |         |                        |         |             
|                                                                                                                        |                           |                      |         |         | (Thousands of dollars)
|Current liabilities                                                                                                     |                           |                      |         |         |                        |         |              |        
|Short-term debt                                                                                                         |                           | $                    | 37,000  |         |                        | $       | 30,000       |        
|Current maturities of long-term debt                                                                                    |                           |                      | 7,919   |         |                        |         | 7,690        |        
|Accounts payable                                                                                                        |                           |                      | 54,646  |         |                        |         | 52,430       |        
|Accrued salaries and wages                                                                                              |                           |                      | 9,432   |         |                        |         | 18,194       |        
|Accrued federal and state income taxes                                                                                  |                           |                      | 3,001   |         |                        |         |             |        
|Other accrued taxes                                                                                                     |                           |                      | 10,651  |         |                        |         | 10,150       |        
|Other accrued liabilities                                                                                               |                           |                      | 7,839   |         |                        |         | 5,760        |        
|                                                                                                                        |                           |                      |         |         |                        |         |              |        
|                                                                                                                        | Total current liabilities |                      |         | 130,488 |                        |         |              | 124,224 |        
|Noncurrent liabilities                                                                                                  |                           |                      | 46,951  |         |                        |         | 43,821       |        
|Deferred credits                                                                                                        |                           |                      |         |         |                        |         |              |        
|Deferred income taxes                                                                                                   |                           |                      | 95,273  |         |                        |         | 94,147       |        
|Deferred investment tax credit                                                                                          |                           |                      | 12,494  |         |                        |         | 12,782       |        
|Regulatory liabilities                                                                                                  |                           |                      | 8,956   |         |                        |         | 9,133        |        
|Other                                                                                                                   |                           |                      | 8,413   |         |                        |         | 7,435        |        
|                                                                                                                        |                           |                      |         |         |                        |         |              |        
|                                                                                                                        | Total deferred credits    |                      |         | 125,136 |                        |         |              | 123,497 |        
|Capitalization                                                                                                          |                           |                      |         |         |                        |         |              |        
|Long-term debt, net of current maturities                                                                               |                           |                      | 258,263 |         |                        |         | 258,229      |        
|Cumulative preferred shares
authorized 1,500,000 shares without par value;
outstanding 2003 and 2002  155,000 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
authorized 50,000,000 shares;
outstanding 2003  25,588,408 and 2002  25,592,160 |                           |                      | 127,942 |         |                        |         | 127,961      |        
|Premium on common shares                                                                                                |                           |                      | 23,877  |         |                        |         | 24,135       |        
|Unearned compensation                                                                                                   |                           |                      | (1,790  | )       |                        |         | (1,946       | )      
|Retained earnings                                                                                                       |                           |                      | 178,072 |         |                        |         | 175,304      |        
|Accumulated other comprehensive loss                                                                                    |                           |                      | (12,070 | )       |                        |         | (11,989      | )      
|                                                                                                                        |                           |                      |         |         |                        |         |              |        
|                                                                                                                        | Total common equity       |                      |         | 316,031 |                        |         |              | 313,465 |        
|                                                                                                                        |                           | Total capitalization |         |         | 589,794                |         |              |         | 587,194 |        
|                                                                                                                        |                           |                      |         |         |                        |         |              |        
|                                                                                                                        |                           |                      | Total   |         | $                      | 892,369 |              |         | $       | 878,736 | 
|                                                                                                                        |                           |                      |         |         |                        |         |              |        

See accompanying notes to consolidated financial statements

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Otter Tail Corporation
Consolidated Statements of Income
(Unaudited)

|                                                      |                          |   |                             |         |      |   |            |         | 
|----------------------------------------------------- | ------------------------ | - | --------------------------- | ------- | ---- | - | ---------- | ------- | 
|                                                      |                          |   | Three months ended         
|                                                      |                          |   | March 31,                  
|                                                      |                          |   |                            
|                                                      |                          |   | 2003                        |         | 2002
|                                                      |                          |   |                             |         |     
|                                                      |                          |   | (in thousands, except share
|                                                      |                          |   | and per share amounts)     
|Operating revenues                                    |                          |   |                             |         |      |   |            |        
|Electric                                              |                          | $ | 93,967                      |         |      | $ | 74,401     |        
|Plastics                                              |                          |   | 22,935                      |         |      |   | 15,875     |        
|Manufacturing                                         |                          |   | 34,719                      |         |      |   | 31,328     |        
|Health services                                       |                          |   | 21,818                      |         |      |   | 21,119     |        
|Other business operations                             |                          |   | 24,681                      |         |      |   | 15,010     |        
|                                                      |                          |   |                             |         |      |   |            |        
|                                                      | Total operating revenues |   |                             | 198,120 |      |   |            | 157,733 | 
|Operating expenses                                    |                          |   |                             |         |      |   |            |        
|Production fuel                                       |                          |   | 12,977                      |         |      |   | 11,517     |        
|Purchased power                                       |                          |   | 35,583                      |         |      |   | 18,934     |        
|Other electric operation and maintenance expenses     |                          |   | 19,406                      |         |      |   | 19,972     |        
|Cost of goods sold                                    |                          |   | 78,568                      |         |      |   | 59,136     |        
|Other nonelectric expenses                            |                          |   | 19,529                      |         |      |   | 16,520     |        
|Depreciation and amortization                         |                          |   | 11,156                      |         |      |   | 10,184     |        
|Property taxes                                        |                          |   | 2,599                       |         |      |   | 2,535      |        
|                                                      |                          |   |                             |         |      |   |            |        
|                                                      | Total operating expenses |   |                             | 179,818 |      |   |            | 138,798 | 
|Operating income (loss)                               |                          |   |                             |         |      |   |            |        
|Electric                                              |                          |   | 16,951                      |         |      |   | 15,293     |        
|Plastics                                              |                          |   | 2,694                       |         |      |   | 1,892      |        
|Manufacturing                                         |                          |   | 1,278                       |         |      |   | 1,906      |        
|Health services                                       |                          |   | 133                         |         |      |   | 2,437      |        
|Other business operations                             |                          |   | (2,754                      | )       |      |   | (2,593     | )      
|                                                      |                          |   |                             |         |      |   |            |        
|                                                      | Total operating income   |   |                             | 18,302  |      |   |            | 18,935  | 
|Other income  net                                    |                          |   | 330                         |         |      |   | 51         |        
|Interest charges                                      |                          |   | 4,392                       |         |      |   | 4,324      |        
|                                                      |                          |   |                             |         |      |   |            |        
|Income before income taxes                            |                          |   | 14,240                      |         |      |   | 14,662     |        
|Income taxes                                          |                          |   | 4,378                       |         |      |   | 4,630      |        
|                                                      |                          |   |                             |         |      |   |            |        
|Net income                                            |                          |   | 9,862                       |         |      |   | 10,032     |        
|Preferred dividend requirements                       |                          |   | 184                         |         |      |   | 184        |        
|                                                      |                          |   |                             |         |      |   |            |        
|Earnings available for common shares                  |                          | $ | 9,678                       |         |      | $ | 9,848      |        
|                                                      |                          |   |                             |         |      |   |            |        
|Basic earnings per average common share:              |                          | $ | 0.38                        |         |      | $ | 0.40       |        
|                                                      |                          |   |                             |         |      |   |            |        
|Diluted earnings per average common share:            |                          | $ | 0.38                        |         |      | $ | 0.40       |        
|                                                      |                          |   |                             |         |      |   |            |        
|Average number of common shares outstanding  basic   |                          |   | 25,592,361                  |         |      |   | 24,667,956 |        
|Average number of common shares outstanding  diluted |                          |   | 25,729,714                  |         |      |   | 24,919,068 |        
|Dividends per common share                            |                          | $ | 0.270                       |         |      | $ | 0.265      |        

See accompanying notes to consolidated financial statements

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##### Table of Contents






Otter Tail Corporation
Consolidated Statements of Cash Flows
(Unaudited)

|                                                 |                                                                                   |                                                             |                                                     |   |                        |         |         |   |         |         |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | ----------------------------------------------------------- | --------------------------------------------------- | - | ---------------------- | ------- | ------- | - | ------- | ------- | -
|                                                 |                                                                                   |                                                             |                                                     |   | Three months ended    
|                                                 |                                                                                   |                                                             |                                                     |   | March 31,             
|                                                 |                                                                                   |                                                             |                                                     |   |                       
|                                                 |                                                                                   |                                                             |                                                     |   | 2003                   |         | 2002   
|                                                 |                                                                                   |                                                             |                                                     |   |                        |         |        
|                                                 |                                                                                   |                                                             |                                                     |   | (Thousands of dollars)
|Cash flows from operating activities:            |                                                                                   |                                                             |                                                     |   |                        |         |         |  
|Net income                                       |                                                                                   | $                                                           | 9,862                                               |   |                        | $       | 10,032  |  
|                                                 | Adjustments to reconcile net income to net cash
provided by operating activities: |                                                             |                                                     |   |                        |         |         |   |        
|                                                 |                                                                                   | Depreciation and amortization                               |                                                     |   | 11,156                 |         |         |   | 10,184  |        
|                                                 |                                                                                   | Deferred investment tax credit  net                        |                                                     |   | (288                   | )       |         |   | (288    | )      
|                                                 |                                                                                   | Deferred income taxes                                       |                                                     |   | 502                    |         |         |   | (471    | )      
|                                                 |                                                                                   | Change in deferred debits and other assets                  |                                                     |   | 141                    |         |         |   | (1,194  | )      
|                                                 |                                                                                   | Change in noncurrent liabilities and deferred credits       |                                                     |   | 2,538                  |         |         |   | 1,594   |        
|                                                 |                                                                                   | Allowance for equity (other) funds used during construction |                                                     |   | (395                   | )       |         |   | (432    | )      
|                                                 |                                                                                   | Other  net                                                 |                                                     |   | 346                    |         |         |   | 358     |        
|                                                 | Cash provided by (used for) current assets & current liabilities:                 |                                                             |                                                     |   |                        |         |         |   |        
|                                                 |                                                                                   | Change in receivables and inventories                       |                                                     |   | (14,707                | )       |         |   | (2,070  | )      
|                                                 |                                                                                   | Change in other current assets                              |                                                     |   | (3,971                 | )       |         |   | (5,248  | )      
|                                                 |                                                                                   | Change in payables and other current liabilities            |                                                     |   | (5,855                 | )       |         |   | (6,521  | )      
|                                                 |                                                                                   | Change in interest and income taxes payable                 |                                                     |   | 5,866                  |         |         |   | 5,544   |        
|                                                 |                                                                                   |                                                             |                                                     |   |                        |         |         |  
|                                                 |                                                                                   |                                                             | Net cash provided by operating activities           |   |                        | 5,195   |         |   |         | 11,488  |  
|Cash flows from investing activities:            |                                                                                   |                                                             |                                                     |   |                        |         |         |  
|                                                 |                                                                                   | Capital expenditures                                        |                                                     |   | (13,591                | )       |         |   | (20,983 | )      
|                                                 |                                                                                   | Proceeds from disposal of noncurrent assets                 |                                                     |   | 154                    |         |         |   | 808     |        
|                                                 |                                                                                   | (Purchase)/sale of other investments                        |                                                     |   | (815                   | )       |         |   | 1,016   |        
|                                                 |                                                                                   |                                                             |                                                     |   |                        |         |         |  
|                                                 |                                                                                   |                                                             | Net cash used in investing activities               |   |                        | (14,252 | )       |   |         | (19,159 | )
|Cash flows from financing activities:            |                                                                                   |                                                             |                                                     |   |                        |         |         |  
|                                                 |                                                                                   | Net borrowings under line of credit                         |                                                     |   | 7,000                  |         |         |   | 5,393   |        
|                                                 |                                                                                   | Proceeds from employee stock plans                          |                                                     |   | 31                     |         |         |   | 485     |        
|                                                 |                                                                                   | Proceeds from issuance of long-term debt                    |                                                     |   | 2,169                  |         |         |   |        |        
|                                                 |                                                                                   | Payments for retirement of long-term debt                   |                                                     |   | (1,941                 | )       |         |   | (2,865  | )      
|                                                 |                                                                                   | Dividends paid and other distributions                      |                                                     |   | (7,255                 | )       |         |   | (6,720  | )      
|                                                 |                                                                                   |                                                             |                                                     |   |                        |         |         |  
|                                                 |                                                                                   |                                                             | Net cash provided by (used in) financing activities |   |                        | 4       |         |   |         | (3,707  | )
|Net change in cash and cash equivalents          |                                                                                   |                                                             | (9,053                                              | ) |                        |         | (11,378 | )
|Cash and cash equivalents at beginning of period |                                                                                   |                                                             | 9,937                                               |   |                        |         | 11,378  |  
|                                                 |                                                                                   |                                                             |                                                     |   |                        |         |         |  
|Cash and cash equivalents at end of period       |                                                                                   | $                                                           | 884                                                 |   |                        | $       |        |  
|                                                 |                                                                                   |                                                             |                                                     |   |                        |         |         |  
|Supplemental
cash flow information               |                                                                                   |                                                             |                                                     |   |                        |         |         |  
|                                                 | Cash paid for interest and income taxes:                                          |                                                             |                                                     |   |                        |         |         |   |        
|                                                 |                                                                                   | Interest                                                    |                                                     | $ | 2,152                  |         |         | $ | 2,920   |        
|                                                 |                                                                                   | Income taxes                                                |                                                     | $ | 218                    |         |         | $ | 289     |        

See accompanying notes to consolidated financial statements

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OTTER TAIL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

In the opinion of management, Otter Tail Corporation (the Company) has included
all adjustments (including normal recurring accruals) necessary for a fair
presentation of the consolidated results of operations for the periods
presented. The consolidated financial statements and notes thereto should be
read in conjunction with the consolidated financial statements and notes for
the years ended December 31, 2002, 2001 and 2000 included in the Companys 2002
Annual Report to the Securities and Exchange Commission on Form 10-K. Because
of seasonal and other factors, the earnings for the three-month period ended
March 31, 2003, should not be taken as an indication of earnings for all or any
part of the balance of the year.

Revenue Recognition

Due to the diverse business operations of the Company, revenue recognition
depends on the product produced or sold. The Company recognizes revenue when
the earnings process is complete, evidenced by an agreement with the customer,
there has been delivery and acceptance, and the price is fixed and
determinable. In cases where significant obligations remain after delivery,
revenue is deferred until such obligations are fulfilled. Provisions for sale
returns and warranty costs are recorded at the time of sale based on historical
information and current trends.

For those operating businesses recognizing revenue when shipped, the operating
businesses have no further obligation to provide services related to such
product. The shipping terms used in these instances are FOB shipping point.

Some of the operating businesses enter into fixed-price construction contracts.
Revenues under these contracts are recognized on a percentage-of-completion
basis. The method used to determine the progress of completion is based on the
ratio of costs incurred to total estimated costs. The following summarizes
costs incurred and billings on uncompleted contracts:

|                                        |  |           |         |              |  |   |         |  
|--------------------------------------- |  | --------- | ------- | ------------ |  | - | ------- | -
|                                        |  | March 31, |         | December 31,
|(in thousands)                          |  | 2003      |         | 2002        
|                                        |  |           |         |             
|Costs incurred on uncompleted contracts |  | $         | 43,739  |              |  | $ | 42,768  |  
|Less billings to date                   |  |           | (47,468 | )            |  |   | (44,572 | )
|Plus earnings recognized                |  |           | 6,513   |              |  |   | 6,340   |  
|                                        |  |           |         |              |  |   |         |  
|                                        |  | $         | 2,784   |              |  | $ | 4,536   |  
|                                        |  |           |         |              |  |   |         |  

The following costs incurred and billings are included in the Companys
consolidated balance sheet under Other Current Assets and Accounts Payable:

|                                                     |  |           |        |              |  |   |       |  
|---------------------------------------------------- |  | --------- | ------ | ------------ |  | - | ----- | -
|                                                     |  | March 31, |        | December 31,
|(in thousands)                                       |  | 2003      |        | 2002        
|                                                     |  |           |        |             
|Costs in excess of billings on uncompleted
contracts |  | $         | 4,017  |              |  | $ | 5,529 |  
|Billings in excess of costs on uncompleted
contracts |  |           | (1,233 | )            |  |   | (993  | )
|                                                     |  |           |        |              |  |   |       |  
|                                                     |  | $         | 2,784  |              |  | $ | 4,536 |  
|                                                     |  |           |        |              |  |   |       |  

The percent of revenue recognized under the percentage-of-completion method
compared to total consolidated revenues for the three months ended March 31,
2003 was 8.4% compared with 9.7% for the three months ended March 31, 2002.

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Stock-based compensation

The Company has elected to follow the accounting provisions of Accounting
Principle Board Opinion No. 25, Accounting for Stock Issued to Employees, for
stock-based compensation and to furnish the pro forma disclosures required
under SFAS No. 123, Accounting for Stock-Based Compensation.

Had compensation costs for the stock options issued been determined based on
estimated fair value at the award dates, as prescribed by SFAS No. 123, the
Companys net income for three month periods ended March 31, 2003 and March 31,
2002 would have decreased as presented in the table below. This may not be
representative of the pro forma effects for future periods if additional
options are granted.

|                           |             |                                                                                                                                    |   |                    |      |   |   |        |      |  
|-------------------------- | ----------- | ---------------------------------------------------------------------------------------------------------------------------------- | - | ------------------ | ---- | - | - | ------ | ---- | -
|                           |             |                                                                                                                                    |   | Three months ended
|                           |             |                                                                                                                                    |   | March 31,         
|(in thousands)             |             | 2003                                                                                                                               |   | 2002              
|                           |             |                                                                                                                                    |   |                   
|Net income                 |             |                                                                                                                                    |   |                    |      |   |   |       
|                           | As reported |                                                                                                                                    | $ | 9,862              |      |   | $ | 10,032 |     
|                           |             | Total stock-based employee compensation
expense determined under fair value
based method for all awards net of
related tax effects |   |                    | (218 | ) |   |        | (260 | )
|                           |             |                                                                                                                                    |   |                    |      |   |   |       
|                           | Pro forma   |                                                                                                                                    | $ | 9,644              |      |   | $ | 9,772  |     
|                           |             |                                                                                                                                    |   |                    |      |   |   |       
|Basic earnings per share   |             |                                                                                                                                    |   |                    |      |   |   |       
|                           | As reported |                                                                                                                                    | $ | 0.38               |      |   | $ | 0.40   |     
|                           | Pro forma   |                                                                                                                                    | $ | 0.37               |      |   | $ | 0.39   |     
|Diluted earnings per share |             |                                                                                                                                    |   |                    |      |   |   |       
|                           | As reported |                                                                                                                                    | $ | 0.38               |      |   | $ | 0.40   |     
|                           | Pro forma   |                                                                                                                                    | $ | 0.37               |      |   | $ | 0.38   |     

Reclassifications

Certain prior year amounts have been reclassified to conform to 2003
presentation. Such reclassifications had no impact on net income, shareholders
equity or cash provided by operating activities.

Inventories

Inventories consist of the following:

|                                |  |           |        |              |  |   |        | 
|------------------------------- |  | --------- | ------ | ------------ |  | - | ------ | 
|                                |  | March 31, |        | December 31,
|(in thousands)                  |  | 2003      |        | 2002        
|                                |  |           |        |             
|Finished goods                  |  | $         | 17,294 |              |  | $ | 15,795 | 
|Work in process                 |  |           | 8,429  |              |  |   | 1,438  | 
|Raw material, fuel and supplies |  |           | 27,968 |              |  |   | 26,921 | 
|                                |  |           |        |              |  |   |        | 
|                                |  | $         | 53,691 |              |  | $ | 44,154 | 
|                                |  |           |        |              |  |   |        | 

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Goodwill and Other Intangible Assets

There were no changes in the carrying amount of goodwill during the three
months ended March 31, 2003.

The following table summarizes the components of the Companys intangible
assets at March 31, 2003 and December 31, 2002.

|                                 |                                             |                       |       |                          |                |                     |                   |                       |   |                          |   |                     |       |       |   |       |       |       |   |       |   |       |   |       |       |       | 
|-------------------------------- | ------------------------------------------- | --------------------- | ----- | ------------------------ | -------------- | ------------------- | ----------------- | --------------------- | - | ------------------------ | - | ------------------- | ----- | ----- | - | ----- | ----- | ----- | - | ----- | - | ----- | - | ----- | ----- | ----- | 
|                                 |                                             |                       |       |                          | March 31, 2003 |                     | December 31, 2002
|                                 |                                             |                       |       |                          |                |                     |                  
|(in thousands)                   |                                             | Gross
carrying
amount |       | Accumulated
amortization |                | Net
carrying
amount |                   | Gross
carrying
amount |   | Accumulated
amortization |   | Net
carrying
amount
|                                 |                                             |                       |       |                          |                |                     |                   |                       |   |                          |   |                    
|Amortized intangible assets:     |                                             |                       |       |                          |                |                     |                   |                       |   |                          |   |                     |       |       |   |       |       |       |   |       |   |       |   |      
|                                 | Covenants not to compete                    |                       | $     | 2,070                    |                |                     | $                 | 1,206                 |   |                          | $ | 864                 |       |       | $ | 1,920 |       |       | $ | 1,143 |   |       | $ | 777   |      
|                                 | Other intangible assets including
contracts |                       |       | 2,314                    |                |                     |                   | 899                   |   |                          |   | 1,415               |       |       |   | 2,079 |       |       |   | 884   |   |       |   | 1,195 |      
|                                 |                                             |                       |       |                          |                |                     |                   |                       |   |                          |   |                     |       |       |   |       |       |       |   |       |   |       |   |      
|                                 |                                             |                       | Total |                          | $              | 4,384               |                   |                       | $ | 2,105                    |   |                     | $     | 2,279 |   |       | $     | 3,999 |   |       | $ | 2,027 |   |       | $     | 1,972 | 
|                                 |                                             |                       |       |                          |                |                     |                   |                       |   |                          |   |                     |       |       |   |       |       |       |   |       |   |       |   |      
|Non-amortized intangible assets: |                                             |                       |       |                          |                |                     |                   |                       |   |                          |   |                     |       |       |   |       |       |       |   |       |   |       |   |      
|                                 |                                             | Brandname             |       | $                        | 3,620          |                     |                   | $                     |  |                          |   | $                   | 3,620 |       |   | $     | 3,620 |       |   | $     |  |       |   | $     | 3,620 |      
|                                 |                                             |                       |       |                          |                |                     |                   |                       |   |                          |   |                     |       |       |   |       |       |       |   |       |   |       |   |      

Intangible assets with finite lives are being amortized over average lives
ranging from one to five years. The amortization expense for these intangible
assets was $132,000 for the three months ended March 31, 2003 compared to
$123,000 for the three months ended March 31, 2002. The estimated annual
amortization expense for these intangible assets for the next five years is:
$583,000 for 2003, $608,000 for 2004, $399,000 for 2005, $244,000 for 2006 and
$132,000 for 2007.

New Accounting Standards

The FASB has issued SFAS No. 143, Accounting for Asset Retirement Obligations
(ARO), which provides accounting requirements for retirement obligations
associated with tangible long-lived assets. This statement is effective for
fiscal years beginning after June 15, 2002. The Company adopted SFAS No. 143 on
January 1, 2003. Retirement obligations associated with long-lived assets
included within the scope of SFAS No. 143 are those for which there is a legal
obligation to settle under existing or enacted law, statute, written or oral
contract or by legal constructions under the doctrine of promissory estoppel.
Adoption of SFAS No. 143 changed the accounting for ARO costs of the utilitys
generating plants. Currently, estimated net salvage amounts are part of
depreciation expense accruals collected in the utilitys rates and reported in
accumulated depreciation. As of March 31, 2003 the Company estimates it has
approximately $14.7 million related to net salvage costs recorded in
accumulated depreciation on assets with ARO. SFAS No. 143 requires the present
value of the future decommissioning cost to be recognized as a liability on the
balance sheet with an offsetting amount being added to the capitalized cost of
the related long-lived asset. The liability will be accreted to its present
value each period and the capitalized cost will be depreciated over the useful
life of the related asset.

The Companys asset retirement obligations include site restoration, the
closure of ash pits and the removal of storage tanks and asbestos at certain
electric utility generating plants. The Company has legal obligations
associated with retirement of other long-lived assets used in its electric
operations that cannot be reasonably estimated because the useful lives of
those assets are indeterminate. There are no assets legally restricted for the
settlement of any of the Companys asset retirement obligations.

The present value of the legal asset retirement obligations as of March 31,
2003 of $1,515,000 is included in Noncurrent liabilities on the Companys March
31, 2003 balance sheet. The $1,515,000 liability includes the original
obligation of $377,000 plus accumulated accretion expense of $1,113,000 from
the date the obligation arose through January 1, 2003, plus $25,000 of
additional accumulated accretion expense for the three months

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ended March 31, 2003. Since the recovery of these estimated removal costs,
which includes accretion, has been provided for through the recovery of
depreciation expense included as a component of current rates, there is no
cumulative effect on income to be recorded related to the adoption of this
accounting principle. All accumulated accretion expenses will be classified as
regulatory assets until the actual cost to settle the asset retirement
obligation has been incurred, at which time the associated accumulated
accretion removal cost will be transferred to accumulated reserve for
depreciation as dictated by regulatory accounting practices. The effects of the
noncash transactions described above are not reflected in the Companys
consolidated statement of cash flows for the three months ended March 31, 2003.

The following table shows the amount of the asset retirement obligation
liability that would have been included in Noncurrent liabilities in prior
periods had the requirements of SFAS No. 143 been in effect in those periods.

|               |  |                 |       |                    |  |      |       |      |  |   |       |  |  |   |       | 
|-------------- |  | --------------- | ----- | ------------------ |  | ---- | ----- | ---- |  | - | ----- |  |  | - | ----- | 
|               |  | As of March 31, |       | As of December 31,
|(in thousands) |  | 2003            |       | 2002               |  | 2002 |       | 2001
|               |  |                 |       |                    |  |      |       |     
|As reported    |  | $               | 1,515 |                    |  |      |      |      |  |   |      |  |  |   |      | 
|Pro forma      |  | $               | 1,515 |                    |  | $    | 1,416 |      |  | $ | 1,490 |  |  | $ | 1,392 | 

Segment Information

The Companys business operations consist of five segments based on products
and services. Electric includes the electric utility operating in Minnesota,
North Dakota and South Dakota. Plastics consists of businesses involved in the
production of polyvinyl chloride (PVC) pipe in the Upper Midwest and Southwest
regions of the United States. Manufacturing consists of businesses involved in
the production of waterfront equipment, wind towers, frame-straightening
equipment and accessories for the auto repair industry, custom plastic pallets,
material and handling trays, horticultural containers, fabrication of steel
products, contract machining, and metal parts stamping and fabrication located
in the Upper Midwest, Missouri and Utah. Health services include businesses
involved in the sale of diagnostic medical equipment, supplies and accessories.
These businesses also provide service maintenance, mobile diagnostic imaging,
mobile positron emission tomography and nuclear medicine imaging, portable
x-ray imaging and rental of diagnostic medical imaging equipment to various
medical institutions located in 40 states. Other business operations consists
of businesses in electrical and telephone construction contracting,
transportation, telecommunications, entertainment, energy services, and natural
gas marketing, as well as the portion of corporate administrative and general
expenses that are not allocated to other segments. The electrical and
telephone construction contracting companies and energy services and natural
gas marketing business operate primarily in the Upper Midwest. The
telecommunications companies operate in central and northeast Minnesota and the
transportation company operates in 48 states and 6 Canadian provinces. The
Company evaluates the performance of its business segments and allocates
resources to them based on earnings contribution and return on total invested
capital.

Operating Income (Loss)

|                          |       |      |                    |        |  |   |        |        | 
|------------------------- | ----- | ---- | ------------------ | ------ |  | - | ------ | ------ | 
|                          |       |      | Three months ended
|                          |       |      | March 31,         
|(in thousands)            |       | 2003 |                    | 2002  
|                          |       |      |                    |       
|Electric                  |       | $    | 16,951             |        |  | $ | 15,293 |       
|Plastics                  |       |      | 2,694              |        |  |   | 1,892  |       
|Manufacturing             |       |      | 1,278              |        |  |   | 1,906  |       
|Health services           |       |      | 133                |        |  |   | 2,437  |       
|Other business operations |       |      | (2,754             | )      |  |   | (2,593 | )     
|                          |       |      |                    |        |  |   |        |       
|                          | Total |      | $                  | 18,302 |  |   | $      | 18,935 | 
|                          |       |      |                    |        |  |   |        |       

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Identifiable Assets

|                          |       |      |           |         |              |   |         |         | 
|------------------------- | ----- | ---- | --------- | ------- | ------------ | - | ------- | ------- | 
|                          |       |      | March 31, |         | December 31,
|(in thousands)            |       | 2003 |           | 2002   
|                          |       |      |           |        
|Electric                  |       | $    | 558,750   |         |              | $ | 550,855 |        
|Plastics                  |       |      | 62,411    |         |              |   | 54,926  |        
|Manufacturing             |       |      | 121,874   |         |              |   | 114,120 |        
|Health services           |       |      | 63,653    |         |              |   | 64,785  |        
|Other business operations |       |      | 85,681    |         |              |   | 94,050  |        
|                          |       |      |           |         |              |   |         |        
|                          | Total |      | $         | 892,369 |              |   | $       | 878,736 | 
|                          |       |      |           |         |              |   |         |        

Substantially all sales and long-lived assets of the Company are within the
United States.

Common Shares and Earnings per Share

Basic earnings per common share are calculated by dividing earnings available
for common shares by the average number of common shares outstanding during the
period. Diluted earnings per common share are calculated by adjusting
outstanding shares, assuming conversion of all potentially dilutive stock
options.

Comprehensive Income

The only elements of comprehensive income for the three months ended March 31,
2003 were net income of
$9.9 million and an additional accumulated comprehensive loss of $81,000
related to the Companys Executive Survivor & Supplemental Retirement Plan, as
compared to $10.0 million of net income for the three months ended
March 31, 2002.

Regulatory Assets and Liabilities

As a regulated entity the Company and the electric utility account for the
financial effects of regulation in accordance with SFAS No. 71, Accounting for
the Effect of Certain Types of Regulation. This statement allows for the
recording of a regulatory asset or liability for costs that will be collected
or refunded through the ratemaking process in the future.

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The following table indicates the amount of regulatory assets and liabilities
recorded on the Companys consolidated balance sheet:

|                              |                                          |      |                              |        |   |           |       |              |   |        |  | 
|----------------------------- | ---------------------------------------- | ---- | ---------------------------- | ------ | - | --------- | ----- | ------------ | - | ------ |  | 
|                              |                                          |      |                              |        |   | March 31, |       | December 31,
|(in thousands)                |                                          | 2003 |                              | 2002  
|                              |                                          |      |                              |       
|Regulatory assets:            |                                          |      |                              |        |   |           |       |             
|                              | Deferred income taxes                    |      | $                            | 10,684 |   |           | $     | 10,238       |  
|                              | Debt expenses and reacquisition premiums |      |                              | 4,203  |   |           |       | 4,323        |  
|                              | Deferred conservation program costs      |      |                              | 567    |   |           |       | 844          |  
|                              | Plant acquisition costs                  |      |                              | 318    |   |           |       | 329          |  
|                              | Accrued cost-of-energy revenue           |      |                              | 2,118  |   |           |       | 768          |  
|                              | Accumulated ARO accretion expenses       |      |                              | 1,138  |   |           |       |             |  
|                              |                                          |      |                              |        |   |           |       |             
|                              |                                          |      | Total regulatory assets      |        | $ | 19,028    |       |              | $ | 16,502 | 
|                              |                                          |      |                              |        |   |           |       |             
|Regulatory liabilities:       |                                          |      |                              |        |   |           |       |             
|                              | Deferred income taxes                    |      | $                            | 8,784  |   |           | $     | 8,960        |  
|                              | Gain on sale of division office building |      |                              | 172    |   |           |       | 173          |  
|                              |                                          |      |                              |        |   |           |       |             
|                              |                                          |      | Total regulatory liabilities |        | $ | 8,956     |       |              | $ | 9,133  | 
|                              |                                          |      |                              |        |   |           |       |             
|Net regulatory asset position |                                          | $    | 10,072                       |        |   | $         | 7,369 |             
|                              |                                          |      |                              |        |   |           |       |             

The regulatory assets and liabilities related to deferred income taxes are the
result of the adoption of SFAS No. 109, Accounting for Income Taxes. Deferred
conservation program costs included in Deferred debits  Other represent
mandated conservation expenditures recoverable through rates over the next 1.5
years. Plant acquisition costs included in Deferred debits  Other will be
amortized over the next eight years. Accrued cost-of-energy revenue included in
Accrued utility revenues will be recovered over the next six months. The
remaining regulatory assets and liabilities are being recovered from electric
customers over the next 32 years.

If for any reason, the Companys regulated businesses cease to meet the
criteria for application of SFAS No. 71 for all or part of their operations,
the regulatory assets and liabilities that no longer meet such criteria would
be removed from the consolidated balance sheet and included in the consolidated
statement of income as an extraordinary expense item in the period in which the
application of SFAS No. 71 ceases.

Subsequent Events

On April 14, 2003 the Companys Board of Directors granted 222,750 stock
options to key management employees and 90,900 shares of restricted stock to
certain key executives and non-employee directors under the 1999 Stock
Incentive Plan. The exercise price of the stock options is equal to the fair
market value per share at the date of the grant. The options vest ratably over
a four-year period and expire ten years after the date of the grant. As of
April 30, 2003 a total of 1,555,894 options were outstanding and a total of
193,094 shares of restricted stock had been issued under the Plan. The Company
accounts for the Plan under Accounting Principles Board Opinion No. 25.

On April 29, 2003 the Company renewed its $50 million line of credit. The terms
of the renewed line of credit are essentially the same as those in place prior
to the renewal. This line is available to support borrowings of the
Companys nonelectric
operations. The Company anticipates that the electric utilitys cash
requirements through April 2004 will be provided for by cash flows from
electric utility operations.

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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

MATERIAL CHANGES IN FINANCIAL POSITION

For the period 2003 through 2007, the Company estimates that funds internally
generated net of forecasted dividend payments, combined with funds on hand,
will be sufficient to meet scheduled debt retirements, provide for its
estimated consolidated capital expenditures and pay off most of its currently
outstanding short-term debt. Reduced demand for electricity or products
manufactured and sold by the Company could have an effect on funds internally
generated. Additional short-term or long-term financing will be required in the
period 2003 through 2007 in the event the Company decides to refund or retire
early any of its presently outstanding debt or cumulative preferred shares, to
complete acquisitions or for other corporate purposes. There can be no
assurance that any additional required financing will be available through bank
borrowings, debt or equity financing or otherwise, or that if such financing is
available, it will be available on terms acceptable to the Company. If adequate
funds are not available on acceptable terms, our business, results of
operations, and financial condition could be adversely affected.

The Company has the ability to issue up to an additional $135 million of
unsecured debt securities from time to time under its shelf registration
statement on file with the SEC.

On April 29, 2003 the Company renewed its $50 million line of credit. The terms
of the renewed line of credit are essentially the same as those in place prior
to the renewal. This line is available to support borrowings of the
Companys nonelectric
operations. The Company anticipates that the electric utilitys cash
requirements through April 2004 will be provided for by cash flows from
electric utility operations. As of March 31, 2003, $37 million of the
$50 million line was in use. The Companys obligations under this line of
credit are guaranteed by a 100%-owned subsidiary of the Company that owns
substantially all of the Companys nonelectric companies.

The line of credit contains a number of covenants that restrict the Companys
ability, with significant exceptions, to: engage in mergers or consolidations;
dispose of assets; create liens on assets; engage in transactions with
affiliates; take any action which would result in a decrease in the ownership
interest in any subsidiary; redeem stock or any subsidiarys stock and pay
dividends on stock; make investments, loans or advances; guaranty the
obligations of other persons or agree to maintain the net worth or working
capital of, or provide funds to satisfy any other financial test applicable to,
any other person; and enter into a contract that requires payment to be made by
the Company whether or not delivery of the materials, supplies or services is
ever made under the contract. In addition, the Company is required to comply
with specified financial covenants, including maintaining a debt-to-total
capitalization ratio not in excess of 60% and an interest and dividend coverage
ratio of at least 1.5 to 1. As of March 31, 2003, the Company was in compliance
with all of the covenants under the line of credit. The interest rate under the
line of credit is subject to adjustment in the event of a change in ratings on
the Companys senior unsecured debt, up to LIBOR plus 0.8% if the ratings on
the Companys senior unsecured debt fall to BBB+ or below (Standard & Poors)
or Baa1 or below (Moodys). The line of credit also provides for accelerated
repayment in the event the Companys long-term unsecured and unsubordinated
debt is rated below BBB- (Standard & Poors) or Baa3 (Moodys).

Cash provided by operating activities of $5.2 million for the three months
ended March 31, 2003 combined with cash on hand of $9.9 million as of December
31, 2002 allowed the Company to pay dividends and fund 58% of its capital
expenditures. Net cash provided by operating activities decreased $6.3 million
for the three months ended
March 31, 2003 compared to the three months ended March 31, 2002 primarily as a
result of an increase in inventories in the first quarter of 2003 of $9.5
million compared to an increase in inventories of only $2.9 million in the
first quarter of 2002. The increase in inventories is mainly due to the
build-up of inventories at the companies that manufacture wind towers and
waterfront equipment to meet projected demand for their products in 2003.

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Net cash used in investing activities was $14.3 million for the three months
ended March 31, 2003 compared with net cash used in investing activities of
$19.2 million for the three months ended March 31, 2002. A decrease in capital
expenditures of $7.4 million between the periods was offset by a $0.6 million
decrease in proceeds from the sale of noncurrent assets and a $1.8 million
decrease in cash used in the purchase, or generated from the sale, of other
investments. Capital expenditures at the electric utility decreased $3.8
million related to the completion of a major transmission line in the fourth
quarter of 2002 and winding down of construction on the electric utilitys new
gas-fired combustion turbine. Capital expenditures in other segments decreased
by $3.6 between the quarters, reflecting a $2.5 million reduction in equipment
purchases at the Companys wind-tower manufacturing company, a $0.9 million
reduction in equipment purchases at the Companys metal parts stamping and
fabrication company and a $2.0 million decrease in equipment expenditures at
the Companys transportation company, offset by a $2.0 million increase in
capital expenditures at one of the Companys pipe manufacturing companies
related to the construction of a new production facility in Iowa.

Net cash provided by financing activities was slightly positive for the three
months ended March 31, 2003 compared with net cash used in financing activities
of $3.7 million for the three months ended March 31, 2002. The increase in cash
from financing activities reflects a $1.6 million increase in net borrowings
from the Companys line of credit plus a $3.1 million increase in cash from net
long-term debt financing and retirement activities, offset by a
$0.5 million reduction in cash from the issuance of common stock and a $0.5
million increase in dividends paid and other distributions between the periods.

Proceeds from the $7.0 million increase in short-term debt outstanding in the
first quarter of 2003 were mainly used to finance construction and operating
activities at the Companys nonelectric operating companies.

There are no material changes in the Companys contractual obligations on
long-term debt, coal contracts, construction program commitments, capacity and
energy requirements, and operating leases from those reported in the Companys
Annual Report on Form 10-K for the year ended December 31, 2002. For more
information on contractual obligations and commitments, see Item 7 in the
Companys Annual Report on Form 10-K for the year ended December 31, 2002.

The Companys current securities ratings are:

|                      |  |                           |    |          |    |          |   | 
|--------------------- |  | ------------------------- | -- | -------- | -- | -------- | - | 
|                      |  |                           |    |          |    | Standard
|                      |  | Moody's Investors Service |    | & Poor's
|                      |  |                           |    |         
|Senior unsecured debt |  |                           | A2 |          |    |          | A | 
|Preferred stock       |  | Baa1                      |    |          | A- |         
|Outlook               |  | Negative                  |    | Stable  

The Companys disclosure of these securities ratings is not a recommendation to
buy, sell or hold its securities. Downgrades in these securities ratings could
adversely affect the Company. Further downgrades could increase borrowing costs
resulting in possible reductions to net income in future periods and increase
the risk of default on the Companys debt obligations.

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MATERIAL CHANGES IN RESULTS OF OPERATIONS

Comparison of the Three Months Ended March 31, 2003 and 2002

Consolidated Results of Operations

Total operating revenues were $198.1 million for the three months ended March
31, 2003 compared with
$157.7 million for the three months ended March 31, 2002. Operating income was
$18.3 million for the three months ended March 31, 2003 compared with $18.9
million for the three months ended March 31, 2002. The Company recorded diluted
earnings per share of $0.38 for the three months ended March 31, 2003 compared
to $0.40 for the three months ended March 31, 2002.

Following is a discussion of the results of operations by segment.

Electric

|                                                  |  |                    |        |      |  |        |        |  |  |   |        |  
|------------------------------------------------- |  | ------------------ | ------ | ---- |  | ------ | ------ |  |  | - | ------ | -
|                                                  |  | Three months ended |        |      |  |       
|                                                  |  | March 31,          |        |      |  |       
|                                                  |  |                    |        |      |  |       
|(in thousands)                                    |  | 2003               |        | 2002 |  | Change
|                                                  |  |                    |        |      |  |       
|Retail sales revenues                             |  | $                  | 59,250 |      |  | $      | 53,591 |  |  | $ | 5,659  |  
|Wholesale revenues                                |  |                    | 32,351 |      |  |        | 16,022 |  |  |   | 16,329 |  
|Other revenues                                    |  |                    | 2,366  |      |  |        | 4,788  |  |  |   | (2,422 | )
|                                                  |  |                    |        |      |  |        |        |  |  |   |        |  
|Total operating revenues                          |  | $                  | 93,967 |      |  | $      | 74,401 |  |  | $ | 19,566 |  
|Production fuel                                   |  |                    | 12,977 |      |  |        | 11,517 |  |  |   | 1,460  |  
|Purchased power                                   |  |                    | 35,583 |      |  |        | 18,934 |  |  |   | 16,649 |  
|Other electric operation and maintenance expenses |  |                    | 19,406 |      |  |        | 19,972 |  |  |   | (566   | )
|Depreciation and amortization                     |  |                    | 6,451  |      |  |        | 6,150  |  |  |   | 301    |  
|Property taxes                                    |  |                    | 2,599  |      |  |        | 2,535  |  |  |   | 64     |  
|                                                  |  |                    |        |      |  |        |        |  |  |   |        |  
|Operating income                                  |  | $                  | 16,951 |      |  | $      | 15,293 |  |  | $ | 1,658  |  
|                                                  |  |                    |        |      |  |        |        |  |  |   |        |  

The 26.3% increase in electric operating revenues for the three months ended
March 31, 2003 compared with the three months ended March 31, 2002 reflects a
$5.7 million (10.6%) increase in retail electric revenues,
a $16.3 million (101.9%) increase in wholesale power revenues and a $2.4
million (50.6%) decrease in other electric operating revenues.

The increase in retail electric revenue resulted from a 5.0% increase in retail
megawatt-hours sold between the periods combined with a 5.3% increase in
revenue per megawatt-hour (mwh) sold. The increase in retail mwh sales is
mainly the result of colder weather in the first quarter of 2003 compared with
the first quarter of 2002. Heating degree-days increased from 4,090 in the
first quarter of 2002 to 4,583 in the first quarter of 2003. This represents
an increase of 12.1% in heating degree-days over 2002 and a 5.0% increase over
a typical meteorological year in the region. The 5.3% increase in revenue per
retail mwh sold reflects a $3.3 million increase in revenues related to
increased fuel and purchased power costs passed on to most retail customers
through the cost-of-energy adjustment factor included in retail rates.

The increase in wholesale power revenues resulted from a 52.5% increase in
megawatt-hours sold combined with a 32.4% increase in wholesale electric prices
during the three months ended March 31, 2003 compared with the three months
ended March 31, 2002. The increase in mwh sales and higher wholesale prices
reflect increased demand relative to available supply mainly due to colder
weather in the region in the first quarter of 2003 compared with the first
quarter of 2002.

14



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##### Table of Contents



The decrease in other electric operating revenues reflects a $3.2 million
decrease in billings related to the construction of a transmission line in
North Dakota for another area utility that was completed in the fourth quarter
of 2002, offset by $0.6 million in transmission related revenues from control
area service tariffs first recorded in the second quarter of 2002 and $0.2
million in revenue from the sale of steam to an ethanol plant that began
operations in the third quarter of 2002.

Fuel costs increased by 12.7% for the three months ended March 31, 2003
compared with the three months ended March 31, 2002 as a result of an 11.3%
increase in the cost of fuel per mwh generated combined with a 1.3% increase in
generation. The increase in the cost per mwh generated reflects increases in
coal and coal transportation costs at Big Stone and Hoot Lake Plants along with
increased generation from the Companys internal combustion peaking generators
in response to demand caused by the colder weather in the first quarter 2003.

Purchased power expense increased 87.9% for the three months ended March 31,
2003 compared with the three months ended March 31, 2002 as a result of a 40.3%
increase in mwh purchases for retail customers and a
64.4% increase in mwh purchases for wholesale customers combined with a 6.0%
increase in the cost per mwh purchased for retail customers and a 26.7%
increase in the cost per mwh purchased for wholesale customers. Increased
demand for electricity brought on by the colder weather in the first quarter
2003 was the main factor contributing to the increases in the volume and cost
per mwh of purchased power.

The 2.8% decrease in other electric operation and maintenance expenses for the
three months ended March 31, 2003 compared with the three months ended March
31, 2002 reflects a $2.2 million decrease in costs related to the 2002
construction of a transmission line for another area utility and a $0.8 million
decrease in external services expenditures offset by increases of $1.1 million
in labor costs, $0.5 million in material and operating supply expenses, $0.5
million in employee benefits related to postemployment medical costs and $0.3
million in transportation expenses. The decrease in external services expenses
reflects the completion of a strategic sourcing project in 2002 and decreased
use of outside tree-trimmers as a result of using internal resources that were
assigned to transmission line construction projects in 2002. The increase in
labor costs is due to an increase in employee benefit costs included in labor
costs. The increases in material and transportation costs relates to a shifting
of costs from outside construction contracts to internal use following
completion of the transmission line construction project in 2002. The 4.9%
increase in depreciation expense is due to a 3.1% increase in depreciable plant
in 2002.

Plastics

|                              |  |                    |        |      |  |        |        |  |  |   |       | 
|----------------------------- |  | ------------------ | ------ | ---- |  | ------ | ------ |  |  | - | ----- | 
|                              |  | Three months ended |        |      |  |       
|                              |  | March 31,          |        |      |  |       
|                              |  |                    |        |      |  |       
|(in thousands)                |  | 2003               |        | 2002 |  | Change
|                              |  |                    |        |      |  |       
|Operating revenues            |  | $                  | 22,935 |      |  | $      | 15,875 |  |  | $ | 7,060 | 
|Cost of goods sold            |  |                    | 18,731 |      |  |        | 12,688 |  |  |   | 6,043 | 
|Operating expenses            |  |                    | 1,038  |      |  |        | 856    |  |  |   | 182   | 
|Depreciation and amortization |  |                    | 472    |      |  |        | 439    |  |  |   | 33    | 
|                              |  |                    |        |      |  |        |        |  |  |   |       | 
|Operating income              |  | $                  | 2,694  |      |  | $      | 1,892  |  |  | $ | 802   | 
|                              |  |                    |        |      |  |        |        |  |  |   |       | 

The 44.5% increase in operating revenues for the three months ended March 31,
2003 compared with the three months ended March 31, 2002 is the result of a
9.3% increase in pounds of polyvinyl chloride (PVC) pipe sold combined with a
32.2% increase in the price per pound of PVC pipe sold. Cost of goods sold
increased 47.6% mainly due to a 35.1% increase in the cost per pound of PVC
pipe sold. The cost per pound of resin, the raw material used to produce PVC
pipe, increased 53.4% between the periods. Operating expenses increased 21.3%
primarily due to increased sales commissions directly related to the increase
in sales. The 7.5% increase in depreciation and amortization expense is due to
a $3.5 million increase in depreciable plant in 2002. The Company does not
expect the strong market conditions to continue through the remainder of the
year.

15



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##### Table of Contents



Manufacturing

|                              |  |                    |        |      |  |        |        |  |  |   |       |  
|----------------------------- |  | ------------------ | ------ | ---- |  | ------ | ------ |  |  | - | ----- | -
|                              |  | Three months ended
|                              |  | March 31,         
|                              |  |                   
|(in thousands)                |  | 2003               |        | 2002 |  | Change
|                              |  |                    |        |      |  |       
|Operating revenues            |  | $                  | 34,719 |      |  | $      | 31,328 |  |  | $ | 3,391 |  
|Cost of goods sold            |  |                    | 26,252 |      |  |        | 23,789 |  |  |   | 2,463 |  
|Operating expenses            |  |                    | 5,308  |      |  |        | 4,186  |  |  |   | 1,122 |  
|Depreciation and amortization |  |                    | 1,881  |      |  |        | 1,447  |  |  |   | 434   |  
|                              |  |                    |        |      |  |        |        |  |  |   |       |  
|Operating income              |  | $                  | 1,278  |      |  | $      | 1,906  |  |  | $ | (628  | )
|                              |  |                    |        |      |  |        |        |  |  |   |       |  

The 10.8% increase in operating revenues for the three months ended March 31,
2003 compared with the three months ended March 31, 2002 reflects $8.2 million
in revenue from the ShoreMaster and Galva Foam acquisitions completed in May
and October of 2002, an increase of $1.3 million in revenue from the metal
parts stamping and fabrication companies and a $1.6 million increase in revenue
from the Companys manufacturer of thermoformed plastic and horticultural
products, offset by a $7.8 million decrease in revenue from the companies that
manufacture equipment for power plants and the wind energy industry.

The 10.4% increase in cost of goods for the three months ended March 31, 2003
compared with the three months ended March 31, 2002 primarily reflects $6.1
million in costs of goods sold at ShoreMaster and Galva Foam combined with
increased costs of $1.5 million from the metal parts stamping and fabrication
companies and
$0.8 million from the Companys manufacturer of thermoformed plastic and
horticultural products, offset by a
$6.0 million reduction in cost of goods sold from the companies that
manufacture equipment for power plants and the wind energy industry.

A $1.8 million increase in operating expenses related to the ShoreMaster and
Galva Foam acquisitions was partially offset by a $0.7 million net reduction in
sales, general and administrative expenses at the Companys other manufacturing
businesses. Depreciation and amortization expenses increased between the
periods as a result of significant plant additions in 2002.

Health Services

|                              |  |                    |        |      |  |        |        |  |  |   |        |  
|----------------------------- |  | ------------------ | ------ | ---- |  | ------ | ------ |  |  | - | ------ | -
|                              |  | Three months ended
|                              |  | March 31,         
|                              |  |                   
|(in thousands)                |  | 2003               |        | 2002 |  | Change
|                              |  |                    |        |      |  |       
|Operating revenues            |  | $                  | 21,818 |      |  | $      | 21,119 |  |  | $ | 699    |  
|Cost of goods sold            |  |                    | 16,590 |      |  |        | 14,687 |  |  |   | 1,903  |  
|Operating expenses            |  |                    | 3,908  |      |  |        | 3,051  |  |  |   | 857    |  
|Depreciation and amortization |  |                    | 1,187  |      |  |        | 944    |  |  |   | 243    |  
|                              |  |                    |        |      |  |        |        |  |  |   |        |  
|Operating income              |  | $                  | 133    |      |  | $      | 2,437  |  |  | $ | (2,304 | )
|                              |  |                    |        |      |  |        |        |  |  |   |        |  

The 3.3% increase in health services operating revenues for the three months
ended March 31, 2003 compared with the three months ended March 31, 2002
reflects $2.0 million in added scan and other service revenue mainly from the
acquisitions that occurred in May and November of 2002, offset by a $1.3
million reduction in revenue from equipment sales. Revenues from the sale of
diagnostic imaging equipment are expected to return to normal levels for the
balance of 2003. The number of scans performed increased 9.3% mainly due to the
2002 acquisitions while the average fee per scan increased 8.4%.

16



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Although revenues from imaging services increased by $2.0 million, the increase
was overshadowed by increases in equipment and infrastructure costs incurred to
support expected revenue growth. Additionally, the May 2002 acquisition of
Computed Imaging Services is not performing in line with expectations. The $2.3
million decrease in health services operating income for the three months ended
March 31, 2003 compared with the three months ended March 31, 2002 reflects a
$0.6 million decrease from reduced equipment sales and a $1.7 million decrease
in operating income from other health services operations. The Company is
taking steps to bring the health services segments operating expenses in line
with its revenues.

Other Business Operations

|                              |  |                    |        |      |  |        |        |   |  |   |       |  
|----------------------------- |  | ------------------ | ------ | ---- |  | ------ | ------ | - |  | - | ----- | -
|                              |  | Three months ended
|                              |  | March 31,         
|                              |  |                   
|(in thousands)                |  | 2003               |        | 2002 |  | Change
|                              |  |                    |        |      |  |       
|Operating revenues            |  | $                  | 24,681 |      |  | $      | 15,010 |   |  | $ | 9,671 |  
|Cost of goods sold            |  |                    | 16,995 |      |  |        | 7,972  |   |  |   | 9,023 |  
|Operating expenses            |  |                    | 9,275  |      |  |        | 8,427  |   |  |   | 848   |  
|Depreciation and amortization |  |                    | 1,165  |      |  |        | 1,204  |   |  |   | (39   | )
|                              |  |                    |        |      |  |        |        |   |  |   |       |  
|Operating (loss)              |  | $                  | (2,754 | )    |  | $      | (2,593 | ) |  | $ | (161  | )
|                              |  |                    |        |      |  |        |        |   |  |   |       |  

The 64.4% increase in operating revenues for the three months ended March 31,
2003 compared with the three months ended March 31, 2002 was mostly due to an
$8.0 million increase in revenues from natural gas sales at the Companys
energy services company related to an increase in natural gas prices while
construction revenues increased by $0.9 million and transportation revenues
increased by $0.9 million between the quarters.
The 113% increase in cost of goods sold reflects a $7.95 million increase in
the cost of natural gas sold by the energy services company and a $1.2 million
increase in construction costs at the construction companies, offset by a
$140,000 decrease in other energy services costs.

The 10.1% increase in operating expenses for the three months ended March 31,
2003 compared with the three months ended March 31, 2002 reflects increased
transportation company operating expenses of $761,000 and increased
construction company operating expenses of $187,000 offset by a $103,000
decrease in energy services operating expenses mainly due to reduced labor
expenses. The sluggish economy continues to adversely impact the transportation
and construction companies.

Other Income  net, Interest Charges and Income Taxes

For the three months ended March 31, 2003 compared with the three months ended
March 31, 2002, other income increased $279,000 due to a reduction in
expenditures related to investigating the feasibility of constructing a second
electricity generating unit at the electric utilitys Big Stone Plant site.

The increase in interest charges is mainly due to higher short-term debt
balances outstanding for the three months ended March 31, 2003 compared with
the three months ended March 31, 2002.

The $252,000 (5.4%) decrease in income tax expense between the quarters is
primarily the result of a
2.9% decrease in income before income tax for the three months ended March 31,
2003 compared with the three months ended March 31, 2002. The effective tax
rate was 30.7% for the three months ended March 31, 2003 compared to 31.6% for
the three months ended March 31, 2002.

17



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##### Table of Contents



Critical Accounting Policies Involving Significant Estimates

The discussion and analysis of the financial statements and results of
operations are based on the Companys consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these consolidated financial
statements requires management to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities.

The Company uses estimates based on the best information available in recording
transactions and balances resulting from business operations. Estimates are
used for such items as depreciable lives, asset impairment evaluations, tax
provisions, collectability of trade accounts receivable, self insurance
programs, environmental liabilities, unbilled electric revenues, unscheduled
power exchanges, service contract maintenance costs, percentage-of-completion
and actuarially determined benefits costs. As better information becomes
available or actual amounts are known, estimates are revised. Operating results
can be affected by revised estimates. Actual results may differ from these
estimates under different assumptions or conditions. Management has discussed
the application of these critical accounting policies and the development of
these estimates with the audit committee of the board of directors.

On September 1, 1999 the Company acquired the flatbed trucking operations of E.
W. Wylie Corporation (Wylie). The Company currently has $6.7 million of
goodwill recorded on its balance sheet relating to this acquisition. Highly
competitive pricing in the trucking industry in recent years has resulted in
decreased operating margins and lower returns on invested capital for Wylie.
The Companys current projections are for operating margins to increase from
current levels over the next three to five years as demand for shipping
increases relative to available shipping capacity and additional revenues are
generated from added terminal locations. If current conditions persist and
operating margins do not increase according to Company projections, the
reductions in anticipated cash flows from transportation operations may
indicate that the fair value of Wylie is less than its book value resulting in
an impairment of goodwill and a corresponding charge against earnings. At March
31, 2003, assessment of Wylie indicated that its goodwill was not impaired. The
Company will continue to evaluate this reporting unit for impairment as
conditions warrant.

A discussion of critical accounting policies is included in the Companys 2002
Annual Report on Form 10-K. There were no material changes in critical
accounting policies or estimates during the quarter ended March 31, 2003.

Forward Looking Information  Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the Act), the Company has filed cautionary
statements identifying important factors that could cause the Companys actual
results to differ materially from those discussed in forward-looking statements
made by or on behalf of the Company. When used in this Form 10-Q and in future
filings by the Company with the Securities and Exchange Commission, in the
Companys press releases and in oral statements, words such as may, will,
expect, anticipate, continue, estimate, project, believes or
similar expressions are intended to identify some of the forward-looking
statements within the meaning of the Act and are included, along with this
statement, for purposes of complying with the safe harbor provision of the Act.
Factors that might cause such differences include, but are not limited to, the
Companys ongoing involvement in diversification efforts, the timing and scope
of deregulation and open competition, growth of electric revenues, impact of
the investment performance of the utilitys pension plan, changes in the
economy, governmental and regulatory action, weather conditions, fuel and
purchased power costs, environmental issues, resin prices, and other factors
discussed under Factors affecting future earnings on pages 27-28 of the
Companys 2002 Annual Report to Shareholders, which is incorporated by

18



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##### Table of Contents



reference in the Companys Form 10-K for the fiscal year ended December 31,
2002. These factors are in addition to any other cautionary statements,
written or oral, which may be made or referred to in connection with any such
forward-looking statement or contained in any subsequent filings by the Company
with the Securities and Exchange Commission. The Company is not obligated to
publicly update or revise any forward-looking statements.




Item 3. Quantitative and Qualitative Disclosures About Market Risk

At March 31, 2003 the Company had limited exposure to market risk associated
with interest rates and commodity prices and no exposure to market risk
associated with changes in foreign currency exchange rates.

The majority of the Companys long-term debt has fixed interest rates. The
interest rate on variable rate long-term debt is reset on a periodic basis
reflecting current market conditions. The Company manages its interest rate
risk through the issuance of fixed-rate debt with varying maturities, through
economic refunding of debt through optional refundings, limiting the amount of
variable interest rate debt, and utilization of short-term borrowings to allow
flexibility in the timing and placement of long-term debt. As of March 31,
2003, the Company had
$15.2 million of long-term debt subject to variable interest rates. Assuming
no change in the Companys financial structure, if variable interest rates were
to average 1% higher or lower than the average variable rate on
March 31, 2003, interest expense and pre-tax earnings would change by
approximately $152,000 on an annual basis.

The Company has short-term borrowing arrangements to provide financing for
working capital and other purposes for its nonelectric operations. The level of
borrowings under these arrangements varies from period to period, depending
upon, among other factors, operating needs and capital expenditures. On March
31, 2003 the Company had $37 million outstanding short-term borrowings under
these arrangements.

The Company has not used interest rate swaps to manage net exposure to interest
rate changes related to the Companys portfolio of borrowings. The Company
maintains a ratio of fixed rate debt to total debt within a certain range. It
is the Companys policy to enter into interest rate transactions and other
financial instruments only to the extent considered necessary to meet its
stated objectives. The Company does not enter into transactions for
speculative or trading purposes.

The electric utilitys retail portion of fuel and purchased power costs are
subject to cost of energy adjustment clauses that mitigate the commodity price
risk by allowing a pass through of most of the increase or decrease in energy
costs to retail customers. In addition, the electric utility participates in
an active wholesale power market providing access to commodity transactions
that may serve to mitigate price risk. The Company has in place an energy risk
management policy with a goal to manage, through the use of defined risk
management practices, price risk and credit risk associated with wholesale
power purchases and sales.

The Companys energy services subsidiary markets natural gas to approximately
150 retail customers. Some of these customers are served under fixed-price
contracts. There is price risk associated with these limited number of
fixed-price contracts since the corresponding cost of natural gas is not
immediately locked in. This price risk is not considered material to the
Company.

The plastics companies are exposed to market risk related to changes in
commodity prices for PVC resins, the raw material used to manufacture PVC pipe.
The PVC pipe industry is highly sensitive to commodity raw material pricing
volatility. Historically, when resin prices are rising or stable, margins and
sales volume have been higher and when resin prices are falling, sales volumes
and margins have been lower. Gross margins also decline when the supply of PVC
pipe increases faster than demand. Due to the commodity nature of PVC resin
and the dynamic supply and demand factors worldwide, it is very difficult to
predict gross margin percentages or to assume that historical trends will
continue.

19



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##### Table of Contents






Item 4. Controls and Procedures

(a)  Evaluation of Disclosure Controls and Procedures. Under the supervision
and with the participation of the Companys management, including the Chief
Executive Officer and the Chief Financial Officer, the Company evaluated the
effectiveness of the design and operation of its disclosure controls and
procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of
1934) as of a date (the Evaluation Date) within 90 days prior to the filing
date of this report. Based on that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that the Companys disclosure controls and
procedures were effective as of the Evaluation Date.

(b)  Changes in Internal Controls. There were no significant changes in the
Companys internal controls or in other factors that could significantly affect
those controls subsequent to the date of their most recent evaluation.




PART II. OTHER INFORMATION




Item 6. Exhibits and Reports on Form 8-K



|a) |  | Exhibits:
|-- |  | ---------



| | 99-A |  | Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
as to the Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2003, by John D. Erickson, President and Chief
Executive Officer, Otter Tail Corporation.
| | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 99-B |  | Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 as to the Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2003, by Kevin G. Moug, Chief Financial Officer and
Treasurer, Otter Tail Corporation.   



|b) |  | Reports on Form 8-K.
|-- |  | --------------------



| |  |  | No reports on Form 8-K were filed during the first quarter of 2003.
| |  |  | -------------------------------------------------------------------




SIGNATURES

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

By: /s/ Kevin G. Moug

Kevin G. Moug
Chief Financial Officer and Treasurer
(Chief Financial Officer/Authorized Officer)


Dated: May 14, 2003

20



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##### Table of Contents






CERTIFICATIONS

I, John D. Erickson, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Otter Tail
Corporation;                                                                                                                                                                                                                                                 
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;                   
|
| | 4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                     
|

| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation
Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                        

|
|
|

|
|
|
|
|

|
|
|

Date: May 14, 2003

/s/ John D. Erickson
John D. Erickson
President and Chief Executive Officer

21



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##### Table of Contents



I, Kevin G. Moug, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Otter Tail
Corporation;                                                                                                                                                                                                                                                 
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;                   
|
| | 4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                     
|

| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation
Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                        
|

| | 5. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons
performing the equivalent function):
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|

| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        
|

| | 6. |  | The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: May 14, 2003

/s/ Kevin G. Moug
Kevin G. Moug
Chief Financial Officer and Treasurer

22



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##### Table of Contents






EXHIBIT INDEX

|               |  |                                                                                                                                                                                                                                                                                                  
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                                                                                                                                                                                                                      
|               |  |                                                                                                                                                                                                                                                                                                  
|99-A           |  | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 as to the Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 2003, by
John D. Erickson, President and Chief Executive Officer, Otter Tail Corporation.
|               |  |                                                                                                                                                                                                                                                                                                  
|99-B           |  | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 as to the Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 2003, by Kevin G. Moug, Chief Financial Officer and Treasurer, Otter Tail Corporation.