2011 Scorecard &annual report

We measure our success by how well we:

Seward Co-op will sustain a healthy community that has:

Cultivate a diverse, respectful, and caring workplace.

Reduce waste and conserve our natural resources.

Commit to financial goals that allow us to maximize our profits

in the support of our values and community.

Build respectful relationships with customers that cultivate

trust within our cooperative.

Equitable economic relationships;

Positive environmental impacts; and

Inclusive, socially responsible practices.

Scorecard

endS Statement

Letter from the GM .................................. 3

Letter from the President ....................... 4

Workplace Culture................................... 5

Environment ...............................................7

Customer ................................................... 9

Financial .....................................................11

Financial Statements .............................13

2011 Scorecard &annual report

taBle oF contentS

To read more, including additional Scorecard

results, visit the Annual Report & Scorecard

online: www.seward.coop/scorecard

| 3 |

Fiscal year 2011 was an exceptional

year for Seward Cooperative

Grocery and Deli. After a few years

of dramatic change, the co-op

has stabilized into a dynamic and

profitable business. The numbers

tell the story best. Our membership

grew from 7,500 to over 8,700.

Sales topped out at $24.7 million

— reflecting a 16 percent increase.

Sales to members were over 74

percent of total sales. At its August

meeting, the board of directors

declared a $664,545 patronage

refund for the year. As in past

years, the co-op distributed 20

percent of this refund in cash; the

remaining amount was allocated to

members’ Class B stock accounts.

This retainage of member equity

helps build a stronger co-op. It

provides the cash needed to pay

down debt and build a nest egg

for future co-op development.

Since the mid-1980s, the board

has determined each year that

allocating 80 percent of the

patronage refund to equity (also

known as Class B stock in the

co-op) is the best approach. This

decision is driven by the nature of

our consumer ownership and the

long-term perspective that we are

building a sustainable, community-

owned business. As member-

owners of our business, we all

should continue to reinvest in our

co-op, so that it becomes less

indebted and continues to thrive

and prosper. The equity portion

of each member’s patronage

refund is aggregated with those

of all other members — putting

the co-op in a stronger financial

position and enabling it to be

here for generations to come.

In a June 2011 Sprout! article,

I referred to this retainage as

“building commonwealth for our

co-op in order to better sustain our

community.”

In April, we launched a major new

initiative: SEED. This is a donation

program that invites customers to

round up their purchase total at

the register, with the money going

to a worthy cause or organization

every month. Between the

program’s launch on April 1 and

June 30 we raised $34,274 for

local organizations and disaster

relief. In July 2011, SEED donations

supplemented the Seward

Community Fund (SCF). Grants that

Seward Co-op awards annually

come from SCF and its associated

endowment fund. In fiscal year

2011, we granted $48,682 to

a wide range of organizations.

Additionally, members and the

co-op donated more than $10,000

to the endowment fund itself. It

now has over $40,000 in principal.

Because of the co-op’s success

this past year, we decided to keep

the interest earnings in the fund.

The financial success of our co-op

is the result of the hard work of

our employees. In the past year,

we added 29 new employees.

At fiscal year-end, Seward Co-op

employed 208 people. Currently,

63 percent are full-time. This

year, our Front End staff deserves

special thanks for their efforts in

bringing the SEED program to life.

The extra effort that cashiers have

given to promoting SEED on behalf

of our local nonprofits has made

a real difference for our co-op’s

community.

Support of nonprofits in our

community is one of many data

points we track with our Scorecard

on a quarterly and annual basis.

All of the data can be found on

our website at www.seward.coop/

scorecard. This year represents

our fifth year of keeping score.

These symbolic measures help

us identify how well we are

growing our co-op’s purpose.

As a cooperative community, we

aspire not only to serve our mutual

needs, but also to be a crucial link

to a more healthy and sustainable

society, as articulated in our

Ends Statement. The Scorecard

measures our progress in this

effort. The dedication that our staff

and board have to these multiple

bottom lines is the foundation of

our success as a co-op. Both our

staff and board members deserve

praise for their hard work.

Sean Doyle,GEnERAL MAnAGER

General ManaGer

– Sean Doyle,

General Manager

| 4 |

2011 was proof, yet again, that

we have a healthy, successful

cooperative. And the success

is not one-dimensional. Sales

topped out at $24.7 million. We

gained 1,249 new member-owners,

bringing the grand total to more

than 8,700. Twin Cities Business

presented us with a “Small

Business Success” award in the

area of community building, and

the Star Tribune named us a Top

100 Workplace in Minnesota. We

received the Howard K. Bowers

Fund Cooperative Excellence

Award from our food co-op peers.

The diversity and breadth of these

record numbers and awards show

that we are working toward our

Ends to have a healthy community

in many different ways.

As owners of that business, we

should be immensely proud of

the work that has been done.

This great work happens because

the owners make it a priority. We

understand that we are a part

of more than just a place to get

our groceries. We are a part of

a business that cares about our

health, our environment, our

economy and our community.

As a board, we recognize that the

cooperative business model is

unique and powerful. This year,

we chose to focus our energy

on learning more deeply about

this cooperative, its application

in other sectors, the strength of

the patronage refund and the

importance of our member-owners.

We first looked at the broader

cooperative community. Locally,

nationally and internationally, there

is a strong cooperative presence.

In industries such as agriculture,

banking, social services, health

care and beyond — there are

cooperatives around every corner.

We invited Louis Doering to speak

to the board about this broad-

reaching movement. Doering is

a current board member of the

national Cooperative Business

Association and a longtime

contributor to the cooperative

community. He talked to us

about the trends he has seen

over the years, the role of co-ops

throughout the world and the laws

that govern cooperatives.

The patronage refund is central

to ownership in a profitable

cooperative business. It is clear

when you look around the store,

meet the employees and hear

about the work we do, that our

individual contributions are

collectively very powerful. As a

board, we explored more deeply

the patronage refund, its history,

laws and intricacies. It is clear to

us that we all need to understand

how our patronage refund goes to

work on our behalf. Our success

is, in no small part, due to our

collective ownership and collective

responsibility to grow the business

together.

Finally, member-owner

engagement is essential to

cooperatives. During part of

our annual board retreat, we

explored how to broaden our

communication with you, the

member-owners. We connect

with member-owners through the

Sprout!, with publications such as

this Scorecard and Annual Report,

and at our annual meeting, but

we also recognize that we want

to do more. To achieve this end,

we created “Face-to-Face with

the Board.” Over the past several

months, we board members

have set up a space at the co-op

during business hours to chat

with customers and owners about

whatever it is that is on their

minds. This has been a wonderful

opportunity for us to continue

to learn about owner needs and

wants, and for owners to learn

more about the co-op.

We look forward to seeing you all

at the annual meeting on Oct. 25

at the Profile Event Center. Thank

you for a great 2011!

Madeline Kastler,BOARD PRESIDEnT

Board of directors

– Madeline Kastler,

Board President

| 5 |

WorkplacecultureSeward Co-op implemented a

community service program five

years ago. Our staff earns paid

time, based on hours worked, to

use in volunteering at farms, other

co-ops and nonprofit organizations.

Each employee can earn up to 30

hours annually, and in fiscal year

2011, 495 community service hours

were redeemed by staff.

As part of this program, we sought

to support employees serving on

the co-op’s board of directors. In

the past, when employee directors

were committed to regularly

scheduled evening shifts at the

co-op, they found themselves

needing to voluntarily cut their

hours or use their PTO hours in

order to attend board meetings.

By having community service

hours to draw on, employees can

volunteer time to serve on the

co-op’s board without losing pay

from missed shifts.

In the last year, 20 staff used

community service hours to

volunteer at 16 different co-ops/

organizations. These include:

Minnesota Literacy Council,

Open Arms, Kinship of Rivers,

Southside Family School, American

Indian OIC, Alley newspaper,

The Aliveness Project, Joint

Replacement Center at Abbott

northwestern Hospital, Brian

Coyle Center, new Bohemian Arts

Cooperative, Land Stewardship

Project, Springboard for the Arts;

Seward Co-op (staff garden and

board of directors), Family Tree

Clinic, Seward Child Care Center

and Youth Link.

“Our community service program

is notable because it demonstrates

Seward’s support of staff who

volunteer with organizations that

matter to them,” said Liz Liddiard

Wozniak, Human Resources

Manager. “Wherever people’s

passion lie — whether that’s

with the arts, gender issues, or

environmental organizations

— we support their work and

acknowledge that volunteering

contributes to employees’ overall

well-being.”

nancy LaLiberte, an employee in

the co-op’s Deli, was once head

chef at Open Arms of Minnesota

— a community-based nonprofit

that prepares and delivers free,

nutritious meals to those living

with life-threatening illnesses in

the Twin Cities. now she stays

connected to the program that’s

always been near and dear to her

heart by volunteering two and a

half hours a week at Open Arms.

“Open Arms is such a great

program, and the people there

are wonderful to work with. When

I started, they served 85 meals

per day. After my eight or nine

years with them, we increased the

number of meals to 325 a day,”

LaLiberte said.

now, nearly 800 meals a day

are available to anyone with a

life-threatening illness, and the

community served by Open Arms

has expanded from people with

We cultivate a diverse, respectful and caring workplace.

community service hours were redeemed by staff.

I volunteer using my community service hours from the co-op because of the feeling I

get from doing it, and the organizational mission; it’s not just about getting paid.

— nancy LaLiberte, Deli employee and Open Arms volunteer

| 6 |

AIDS to those living with other

diseases, such as breast cancer,

ALS and MS. They recently started

delivering weekly five-packs of

frozen meals, as well.

In 2011, Open Arms installed a

two-acre organic vegetable garden

called Open Farms, located at

the Prairie Oaks Institute in Belle

Plaine, Minn. In the garden, use

of synthetic chemicals is avoided,

and natural, ecological processes

manage fertilization and pest

control. The farm is awaiting

organic certification by the Midwest

Organic Services Association.

During the growing season, Open

Farms provided a healthy portion

of the vegetable needs for the

Open Arms kitchen. Enthusiastic

staff and volunteers, including

LaLiberte, prepared this local food

and then delivered it as nutritious

meals to hundreds of households

all over the Twin Cities area.

“Volunteering is such a feeling

of giving,” says LaLiberte. “My

opinion is: if you get, give. If you

learn something, teach it. Everyone

needs to be inspired that what

you give comes back. I volunteer

using my community service hours

from the co-op because of the

feeling I get from doing it and the

organizational mission. It’s not just

about getting paid.”

If you get, give. If you learn something, teach it.

— nancy LaLiberte, Deli employee and Open Arms volunteer

Minnesota Literacy Council

Open Arms

Kinship of Rivers

Southside Family School

American Indian OIC

Alley newspaper

The Aliveness Project

Abbott northwestern Hospitals

Brian Coyle Center

new Bohemian Arts Cooperative

Land Stewardship Project

Springboard for the Arts

Seward Co-op

Family Tree Clinic

Community Child Care Center

Youth Link

seward co-op staff volunteer at these co-ops and orGanizations

Open Arms staff and volunteers at Open Farms (nancy LaLiberte, center).

| 7 |

Seward Co-op’s LEED Gold-

Certified building offers many

examples of our commitment to

operating a sustainable business.

Surrounding the store are gardens

comprised of native plants. The

parking lot is designed to flow at

least 90 percent of stormwater

into our gardens. Our Hourcar

promotes car-sharing, and plenty

of bike parking is available for staff

and members. Inside, daylight-

harvesting technology optimizes

power usage. In our seating

area, clearly marked containers

for paper, bottles/cans, compost

and trash encourage recycling.

On the roof, 140 solar panels

defray our electricity usage. We

even produce our own nontoxic

cleaning products to reduce plastic

waste, shipping costs and overall

environmental impact.

While we’re proud of these

initiatives, we also believe we can

continue to improve. We’re always

interested in new opportunities

in sustainability. Seward Co-op’s

Operations Manager, Leo Sanders,

tracks several day-to-day practices

for the Scorecard. In turn, he uses

that data to evaluate the co-op’s

success as a sustainable business

and determine areas in which we

can improve.

“The Scorecard is a tool to monitor

progress,” Sanders said. “Each

quarter, we review the hard data.

It would not take long to notice

a trend moving away from our

values.”

For five consecutive years, the

Scorecard has provided criteria

by which the success of new

programs and plans are measured.

For example, when we adjusted

our waste-stream requirements,

our vendors, strategies and

resources had to meet those

requirements. The Scorecard

data tell us whether or not this is

happening.

Due to Seward Co-op’s recent

growth, we are developing

strategies to better manage our

waste. “All the options we consider

involve maintaining recycling

or composting rates around 90

percent,” Sanders said. “We’re

always planning and evaluating

new research and concepts.”

In addition to being an innovator,

the co-op also serves as a model

for the community. Through

our practices and educational

environmentWe reduce waste and conserve our natural resources.

natural food co-ops, weary of excessive packaging, started by selling bulk food,

and we continue as pioneers of organic, fair trade, P6 and local food. Our Scorecard

captures this continued innovation and is motivating for us.

— Leo Sanders, Operations Manager

how do we compost?

The proper disposal of refuse is built into our workplace culture. On their first day of the job, all new staff are

oriented on recycling procedures. Signage throughout the store makes it easy to determine where waste goes.

1. Compost begins when

scraps are collected into

a compost bin in our

dining area.

2. Housekeeping staff

transfer compost to our

collection bin in the

loading dock.

3. Troje’s Trucking, Inc.,

takes our compost to our

recycling vendor, Eureka

Recycling.

4. Eureka transfers the

waste to a commercial

composter to be turned

into compost.

| 8 |

program, we introduce ideas for

better environmental practices.

Last year, Seward Co-op staff

formed a Scorecard Environmental

“How Team,” focused on

teaching and promoting resource

conservation. Based on the team’s

recommendations, we promote

reusable bags and offer incentives

for using them.

We also teach members and

customers the values of a reduced

carbon footprint. We do this

through our newsletter, the Sprout!,

and classes offered throughout the

year (such as an energy workshop

series, courses on seasonal

eating and a green architecture

presentation).

Becoming a more sustainable

business is an ongoing endeavor.

We continue to look for new ideas

and, with the help of the Scorecard,

improve our processes. “We’re still

learning,” Sanders says. “Hopefully,

the Scorecard reflects that.”

TOP: Rooftop solar panels at Seward Co-op. BELOW: Seward Co-op’s rain gardens in full bloom.

of co-op waste was recycled or composted.

| 9 |

Because Seward Co-op is

committed to building an economy

that reflects and promotes the

interests of both consumers

and of local and international

small producers, we launched

a breakthrough new initiative in

fiscal year 2011 called Principle Six

(P6): the Co-op Trade Movement.

Equal Exchange (a worker-owned

cooperative) and six consumer

co-operatives — including

Seward Co-op — created P6 to

promote small farmers/producers,

cooperative/nonprofit businesses,

and local farmers/producers. P6

empowers consumers to use

their purchasing dollars to create

an economy that embodies our

highest values.

local: is defined as products

grown or produced in the five-state

region, or which have value added

in that region.

co-op: is defined by cooperative

ownership of the business or its

nonprofit status.

small producer: is defined using

these guidelines: a) Independently

owned and operated; and

b) Selling direct to store or through

a local distributor with a regional

distribution area.

If a producer/farmer meets two

of the three above criteria, their

products receive the P6 label.

Seward Co-op’s Scorecard guides

staff to provide quality products

for our customers and verify the

means by which they arrive at our

store. Our staff of 20 buyers and

replenishment buyers work hard

to learn about the vendors and

companies that supply us. Our

buyers’ determination of whether

or not to carry a particular item

is partially informed by the P6

criteria. By using the Scorecard to

measure the number of P6 options

available at our store, Seward

Co-op ensures conscientious

decisions about products we sell,

and in turn, builds trust among our

customers.

Since the launch of P6 in

October 2010, we’ve also heard

encouraging feedback from

producers whose products bear

the P6 label.

rochdale farmsAccording to Mary Bess Michaletz

of Rochdale Farms, “The P6

initiative has been an extremely

effective tool to help co-op

shoppers pinpoint products that

are in line with their values and

preferences. The program directly

supports the local farmers we

work with, our cooperatively

owned distributor and the

Rochdale Farms brand.

cuStomercommitmentWe build respectful relationships with customers that

cultivate trust within our cooperative.

Must meet two of three:

Local

Cooperatively-owned

Small producer

The p6 CriTeria

| 10 |

Rochdale Farms dairy products

are made at K&K Creamery in

Cashton, Wis., and sold exclusively

at co-ops. The milk for their

cheese comes from small dairy

farms, which include nearly 300

Amish family farms. Average

herd size is 12 cows, which are

hand-milked, and milk is then

transported by hand in milk cans.

“Food has become complicated

in too many ways,” Michaletz

said. “The P6 initiative allows

consumers to quickly identify that

our products are sourced locally,

are healthful, and are consistent

with cooperative principles and

values. Whether shoppers see the

P6 logo on a demo sign or in the

dairy or cheese case, immediately

many of their questions get

answered.”

Michaletz said that in a world

abuzz with marketing messages,

she sees the P6 logo as a

clear tool that helps guide and

assure shoppers that with their

purchases, they directly support

an ethical and sustainable local

food economy.

“The P6 initiative is exactly why

Rochdale Farms exists — to

cooperatively build the kind of

world where we want to live,” she

said. “It’s not easy to rebuild a

local food system. The P6 initiative

is a solid step in a good direction.”

alaffiaAlaffia is a producer cooperative

in Togo, West Africa, and a

supplier to Seward Co-op. Their

skin and body care products (for

adults and children) are sold in

our Wellness department. The

women of the Alaffia Shea Butter

Cooperative hand-craft shea butter

and other raw ingredients using

traditional, sustainable methods.

These fair trade items are sold to

conscientious retailers acround

the world and, in the process,

members of the cooperative are

empowered and their communities

become more sustainable. Early

in 2011, Alaffia featured the P6

program in their e-newsletter.

“P6 reminds us that every time you

grab a product off the store shelf,

your choice has big implications

because a lot of companies

vie for that one piece of shelf

space,” the article read. “This new

initiative helps us to see beyond

the packaging by supporting

organizations and products that

meet the P6 criteria. We know

that while these are organizations

without large marketing budgets to

promote their products, they often

are the most interesting. And we

feel good about supporting them.”

The article goes on to say, “The

hope is that the more P6 products

we all buy, the more demand we

create for new P6 farmers and

businesses.”

of total sales were p6.

Through intentional

sourcing, we provide

quality products for our

customers.

Rochdale Farmslocal // small producer // co-op

Alaffiasmall producer // co-op

| 11 |

Every year, Seward Co-op

supports nonprofit organizations

of importance to our membership

through donations, sponsorships,

the Seward Community Grant Fund

(SCF), and matching funds raised

through our new SEED program.

While these organizations are

usually centered on our own

local community, they do vary

in size, mission, and location.

All together, the co-op and our

members and shoppers donated

close to $170,000 of our collective

resources to area nonprofits.

In fiscal year 2011, Seward Co-op

assisted recipients as far away

as Japan, when we donated to

tsunami relief. nearer to home

were the victims of the north

Minneapolis tornado. And year-

round, we contribute to the

ongoing campaigns to stock the

Brian Coyle Community Food Shelf

in Minneapolis’ West Bank.

This past year, we also have

supported environmental causes,

provided funds to organizations

helping people recover from

tragedy and contributed to the

foundations that celebrate our

local artistic talents.

donationsThe Seward Co-op donation

program provides funds (in

the form of Seward Co-op gift

vouchers) to community nonprofits,

enabling them to purchase food

for fundraising or volunteer events

for their organizations.

Donation recipients have included:

national night Out block clubs;

In the Heart of the Beast Puppet

and Mask Theatre; the Joy Project;

Empty Bowls; the Powderhorn

Arts Fair; and area school events

at Seward Montessori, Dowling

School, City of Lakes Waldorf,

Lake Country Montessori,

Augsburg College, the University

of Minnesota and St. Catherine

University.

FinancialWe commit to financial goals that allow us to maximize our

profits in the support of our values and community.

Empty Bowls is an international grassroots effort dedicated

to fighting hunger. The premise is simple: potters and other

craftspeople work with the community to create handcrafted

bowls. Guests are then invited to a meal of soup and bread

in exchange for a cash donation. As a memento, the guests

receive the handmade bowl. The money raised is donated to

organizations working to end hunger and food shortages.

DOnATIOn SPOTLIGHT:

Empty Bowls

| 12 |

sponsorshipsSeward Co-op provides monetary

sponsorships for area events

and nonprofits. We helped bring

films from around the world to

the spring Minneapolis/St. Paul

International Film Festival. We

supported events for students at

neighboring Augsburg College and

a series of performances at the

Playwrights’ Center. We donated

funds to the Midwest Organic and

Sustainable Education Service

(MOSES) conference and provided

food for Land Stewardship

Project’s breakfast at the Capitol

in St. Paul. In total, Seward Co-op

gave $30,000 to help promote

local organizations.

seward co-op community fund GrantsThis year, 12 local, nonprofit

organizations were awarded nearly

$49,000 in Seward Community

Fund (SCF) grants. The recipients’

objectives focused on everything

from raising startup money for a

new food co-op to creating an

environmentally sustainable urban

garden; from teaching organic

gardening to providing nurturing

child care; and from promoting

teen social services to building a

culturally diverse theater for young

adults.

seedSeward Co-op’s SEED donation

program began as collaborative

effort with other Twin Cities-area

co-ops to support the Minnesota

Food Share’s annual food drive.

Following the campaign (in which

we raised donations through

customers rounding up their

purchase totals at the registers),

many of our members suggested

that we continue offering the

chance to round up in support of

charitable causes. So, in April we

created SEED, an ongoing means

of supporting our community. In

the first three months of SEED —

through 67,645 donations from

our members and shoppers, along

with contributions from the co-op

— we raised $34,274. Recipients

included local nonprofits the Land

Stewardship Project, the Midtown

Greenway Coalition, and the Brian

Coyle Community Food Shelf, as

well as victims of tornadoes in

Minneapolis and Missouri and the

Japanese tsunami.

We have more good work to do

with our community donation

programs, and through the

generosity of our members and

shoppers, we stand to accomplish

a great deal with SEED.

Wirth Cooperative Grocery

Growing Lots Urban Farm

Midwest Food Connection

Community Design Center

Permaculture Research

Institute Cold Climate

Alliance for Sustainability, Peace

with Justice Organic Gardeners

Volunteers of America

Education Center

Seward Child Care

Seward Longfellow Restorative

Justice Partnership

Bedlam Theater

Pillsbury House Integrated

Health Clinic

Universal Health Care Action

network Minnesota

2010/2011 Grant recipients

SEED SPOTLIGHT:

Brian Coyle Food Shelf

The Brian Coyle Center is located in the Cedar-Riverside

neighborhood of Minneapolis, one of the most densely populated

areas in the state, with approximately 1,800 apartment units on

two city blocks. Its food shelf serves the residents of Cedar-

Riverside, providing thousands of families with food and household

necessities. Brian Coyle Food Shelf is a part of the Pillsbury United

Communities, a nonprofit organization working to create choice,

change and connection for people from all walks of life.

Seward Co-op contributes food to Brian Coyle year-round. This

year, Brian Coyle also was the recipient of our March Food Drive,

sponsored by the Emergency Food Shelf network. During the

month-long drive, the co-op and our members raised nearly 14,000

dollars/pounds of food.

| 13 |

Fiscal year 2011 was remarkably

successful financially for Seward

Co-op, as demonstrated by the

attached financial statements.

Income Statement highlights begin

with sales and gross margin. Half

way through our third year in the

new store, sales growth continues

to be strong. Our gross margin, the

amount of money left to run the

co-op after paying for the products

we sell, was 40 percent of sales.

This improved gross margin is

partly a result of growth in added

value departments, including

Deli and Meat & Seafood, and a

renegotiated purchasing contract

through the national Cooperative

Grocers Association.

Another key measure of success

in 2011 was labor expenses, which

declined as a percent of sales to

24.2 percent. This is a reflection of

our maturing business. As we grow

we are becoming efficient in how

we work. We once again achieved

our goal of paying every qualifying

full-time worker a living wage.

We continue to have a generous

employee gain sharing program.

In fiscal year 2011, Seward Co-op

also generated significant cash.

This allowed us to pay down

nearly $400,000 of debt early,

saving substantial future interest

payments. We are in an excellent

position to begin repaying member

loans as they start to mature in

April 2012. The co-op also had

some debt forgiven by the city of

Minneapolis for creating full-time,

living-wage jobs in our new store.

Finally, the Balance Sheet shows

more assets, fewer liabilities,

and more equity. Equity can be a

difficult concept to understand.

Essentially, it measures the portion

of all the assets the co-op has that

it actually owns. With the exception

of 2009, when we booked losses

due to our relocation, the co-op

has steadily been growing equity.

Last year, equity increased by

almost $500,000. This equity

has been built primarily through

B stock retained from patronage

refunds, and equity directly

invested by members through the

purchase of memberships and

Class C stock.

Financial StatementS

2011 2010Income Statementnet Sales

Cost of Goods

Gross profit Margin

Wages

Benefits and Taxes

total labor expense

General and Administrative

Depreciation

total expenses

net Operating Income

Other Income

Interest Expense

income Before taxes and patronage Refund

Patronage Refund Declared

Provision for Income Taxes

net income

$ 24,746,872 100.0%

14,855,393 60.0%

$ 9,891,479 40.0%

$ 4,936,594 19.9%

1,057,195 4.3%

$ 5,993,789 24.2%

$ 2,147,443 8.7%

421,084 1.7%

$ 8,562,316 34.6%

$ 1,329,163 5.4%

231,518 0.9%

(662,475) 2.7%

898,206 3.6%

(664,545) 2.7%

81,367 0.3%

$ 152,294 0.6%

$ 21,330,979 100.0%

13,055,444 61.2%

$ 8,275,535 38.8%

$ 4,249,669 19.9%

997,139 4.7%

$ 5,246,808 24.6%

$ 1,768,264 8.3%

399,588 1.9%

$ 7,414,660 34.8%

$ 860,875 4.0%

178,014 0.8%

(664,806) -3.1%

374,083 1.8%

(270,722) 1.1%

30,057 0.1%

$ 73,304 0.3%

Alex Betzenheimer,FInAnCE MAnAGER

| 14 |

The summary financial statements have been audited by Mahoney,

Ulbrich, Christensen, & Russ, CPAs. A complete copy of this audit is

available to members upon request.

2011 2010Balance Sheet

Cash

Debt Service Reserve

Inventory

Other Current Assets

current assets

Property and Equipment

Other Assets

total assets

Current Liabilities

Long-Term Debt

total liabilities

Member Equity

Retained Earnings

Total Equity

total liabilities and equity

Cash Flow

From Operations

net Income

Depreciation & Amortization

(Increase) Decrease in Inventory

(Increase) Decrease in Other Current Assets

Increase (Decrease) in Current Liabilities

cash flow from operations

From Investments

(Increase) Decrease in Fixed Assets

(Increase) Decrease in Other Assets

cash flow from investments

From Financial

Increase (Decrease) in Long Term Liabilities

Increase (Decrease) in Equity

cash flow from financing

Total Cash Flow

Beginning Cash

ending cash

$ 1,715,154

469,110

472,703

179,598

$ 2,836,565

$ 8,882,468

2,299,142

$ 14,018,175

$ 2,385,681

9,815,024

$ 12,200,705

$ 1,714,500

102,970

1,817,470

$ 14,018,175

2011

$ 152,294

421,084

(33,257)

147,172

854,158

$ 1,541,451

(327,619)

(512,600)

$ (840,219)

$ (470,739)

80,483

$ (390,256)

$ 310,976

1,404,178

$ 1,715,154

$ 1,404,178

468,971

439,446

131,260

$ 2,393,755

$ 8,958,507

1,813,911

$ 13,216,273

$ 1,267,993

10,603,367

$ 11,871,360

$ 1,348,912

(3,999)

1,344,913

$ 13,216,273

2010

$ 73,304

399,588

(19,165)

(86,845)

465,331

$ 832,213

(264,498)

(95,539)

$ (360,037)

$ (52,267)

199,418

$ 147,151

$ 619,327

784,851

$ 1,404,178

Dollars in Millions

Sales Growth

2007

2008

20092010

2011

$9

.9

$11.9

$15

.8

$2

1.3

$2

4.7

2823 E. FRAnKLIn AVE. // MInnEAPOLIS // 612-338-2465 // WWW.SEWARD.COOP

Khaiti French of LTD Farm