BUILDINGOur Future

Centra Sota Cooperative • Annual Report 2013

A MESSAGE TO OUR MEMBERS...

The theme of this year's Annual Statement, “Building Our Future”, very accurately describes what is taking place at Centra Sota Cooperative. The pictures in this year's annual statement show some of the activity currently taking place for the long-term at your cooperative.

As you will see in this year's financial statement, your cooperative achieved the best results in our 91 year history. Revenue for 2013 exceeded $177 million and earnings of $6.8 million both are unprecedented for Centra Sota (see statement of operations on page 4). In addition, sales volume records were set in all of the product areas that we provide our patrons (see chart on page 6). Also noteworthy is we returned over $1.9 million in cash this year to members in cash patronage and equity retirements and plan to return even more in 2014. These results are the direct result of a total commitment of our employees and patrons working together to achieve a common goal. Our goal is simple – do whatever we can to help make our patrons more successful. If we can accomplish this then Centra Sota will also be more successful.

Production agriculture, as we previously knew it, has changed and is not going back to what we knew it as. Gone are the 6-row planters and they are being replaced with 24 or 36-row units. Our spring season to deliver fertilizer has shrunk from weeks to days. This was very evident in the spring of 2013. Even with all of the investments your cooperative has made in recent years to increase our capacity, more is needed! Depending on market and weather conditions, these investments may or may not be necessary for 2014, but we are not planning just for next year. We are looking further ahead and positioning your cooperative to be able to provide our members with what they will need to support their future operations.

2

The bottom line is really pretty simple – Centra Sota Cooperative is in the business of supplying agricultural supplies and services to our patrons. Our patrons also own this company as cooperative patrons. Therefore, we believe based on these two statements, investing in helping service your needs better only makes good, sound sense. The price of these investments is high, around $5 million over the next few years, but we are confident this needs to be done.

As significant as these investments are, we feel the best investment we make is in our people. The employee team at Centra Sota is the real difference maker in setting us apart from other choices you have for a supplier. We will continue to invest in people – hiring, developing, and retaining people to add value to your operation.

All of the investments Centra Sota makes in facilities, equipment or people, are made in direct alignment with the brand vision of your company: To be the partner you can count on, providing real solutions, for today and tomorrow.

Doug TriplettChairman, Board of Directors

Jeff JohnsonCEO/General Manager

OFFICERS & DIRECTORS

AnnandaleEden ValleyBuffaloSt. CloudSt. CloudMontroseBrainerdLittle FallsUpsalaPaynesvilleAlbany

Douglas TriplettDave RuhlandBill HolthausDennis LiethaTom HammerRodney DomjahnSteve SievekKen WelleRoger RoerickDon ThomesVern WillenbringJeff JohnsonDan Malinski

ChairmanVice ChairmanSecretaryDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorCEO/GMCFO

Waverly

Buffalo

Maple Lake

Clear Lake

Santiago

Watertown

Cokato

Annandale

WatkinsEden Valley

St. Martin

AlbanySauk Centre

UpsalaLittle Falls

Harding

To be the partner you can count on, providing real solutions for today and tomorrow.

To be the partner you can count on, providing real solutions for today and tomorrow.

Our Vision:

SERVING THESE LOCATIONS:

STATEMENT OF OPERATIONS

This summarized financial information has been extracted from the complete financial statements and auditor's opinions which are on file in the cooperative's offices.

SalesCost of Sales Operating Revenue

Expenses:Employee ExpenseDepreciationInsuranceOther Operating ExpensesTotal Operating Expenses Net Operating Margin

Other Income (Expense)Interest ExpenseCollection/Legal ExpensePartnership Income — MLN, LLC.Other Revenue and Expense Net Other Income (Expense)

Local Net SavingsPatronage IncomeNet Income Before TaxesIncome Taxes

Net Savings

$177,803,168$153,537,532$24,265,636

$9,911,814$1,988,385

$735,192$8,578,382

$21,213,773$3,051,863

($284,300)($253,875)

$96,563 $1,501,207$1,059,595

$4,111,458 $3,578,991

$7,690,449 ($881,362)

$6,809,087

2013

$162,438,205$139,328,175$23,110,030

$9,154,429$1,847,455

$806,637$7,518,042

$19,328,575$3,781,455

($396,389)($257,362)

$151,392 $1,054,411

$552,052

$4,333,507 $2,164,010

$6,497,517 ($743,058)

$5,754,459

2012

4

BALANCE SHEET

ASSETS

LIABILITIES

EQUIT Y

Current Assets:CashReceivablesLess: Allowance for Doubtful AccountsInventory and Other Current Assets Total Current Assets

Other Assets:Fixed AssetsLess: Accumulated DepreciationNet Fixed AssetsInvestments in Other Cooperatives Total Assets

Current Liabilities:Accounts PayablePatronage Dividends PayableOther Current LiabilitiesTotal Current LiabilitiesLong Term Liabilities Total Liabilities

Member EquityCapital Reserve Total Patron Equity Total Liabilities and Patron Equity

$ 123,411 19,605,098 (1,772,343)18,544,046 36,500,212

30,620,915 (19,608,787)

11,012,128 12,533,356 60,045,696

11,318,376 1,566,964 9,356,205

22,241,545 639,760

22,881,305

22,181,512 14,982,87937,164,391

$ 60,045,696

2013

$ 71,326 20,658,356 (1,628,193)29,864,828 48,966,317

29,292,084 (18,668,820)

10,623,264 12,063,320 71,652,901

13,632,859 1,371,187

23,318,841 38,322,887

980,561 39,303,448

20,195,328 12,154,125 32,349,453

$ 71,652,901

2012

HISTORIC SALES VOLUMES

6

Seed

Chemical

20132012201120102009

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

7,48

0,89

9

9,75

3,54

5

8,73

7,40

9

8,10

2,06

1

10,1

35,1

22

9,00

9,27

7

11,6

90,3

33

10,5

86,8

67

13,7

89,9

53

11,1

57,1

22

Seed & Chemical Sales in Dollars

Fertilizer

Feed

Fertilizer & Feed Sales in Tons220,000

200,000

180,000

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

N/A

N/A

20132012201120102009

44,5

83

50,0

68

55,6

79

64,8

90

67,9

48

196,

602

169,

506

188,

387

12,600,000

12,200,000

11,800,000

11,400,000

11,000,000

10,600,00010,978,528 10,894,122 10,886,032 11,637,541 12,389,034

20132012201120102009

Petroleum Sales in Gallons

FIVE YEAR HISTORICAL INFORMATION

Sales

Local Net Savings

Total Net Savings

Cash Returned to Members

Working Capital

Local Return on Local Equity

Ownership Percentage

Local Ownership Percentage

Employee Efficiency Ratio

2013

$177,803,168

$4,111,458

$6,809,087

$1,902,138

$14,258,667

16.04%

61.89%

52.84%

38.32%

2012

$162,438,205

$4,333,507

$5,754,459

$1,511,756

$10,643,430

20.35%

45.15%

35.14%

37.65%

2011

$144,000,380

$2,574,264

$3,234,374

$926,742

$6,996,209

14.97%

51.01%

38.89%

39.12%

$56,703,947

$1,093,831

$2,324,978

$763,006

$5,233,741

8.91%

58.59%

46.15%

40.96%

2010 2009

$59,570,345

$1,122,736

$3,059,848

$801,031

$3,405,133

9.99%

63.61%

50.74%

40.01%

Serving: Albany, Annandale, Buffalo, Clear Lake, Cokato, Eden Valley, Harding, Howard Lake, Little Falls, Maple Lake, Santiago, Sauk Centre, St. Martin, Upsala, Watertown, Watkins, Waverly

Buffalo, MN 55313800.229-1464

www.centrasota.com

To be the partner you can count on, providing real solutions for today and tomorrow.

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