2012 Annual Report

“We can chart our future clearly and wisely only when we know the path which has led to the present.”

– Adlai Stevenson

2012 Annual ReportSumter Electric Cooperative, Inc.

CELEBRATING 75 YEARS OF SERVICE

Cooperative Highlights for 2012

Operating Revenue $ 330,987,476

Net Margins $ 13,101,866

Total Assets $ 614,109,991

Patronage Capital Distributed $ 2,170,993

Kilowatt-Hours Sold 2,771,265,503

Miles of Energized Line 11,723

Substations 47

New Services 4,061

Number of Members 178,776

Full-Time Employees 397

Your cooperative had a very active year in 2012 and as we entered 2013, we officially began a celebration of our 75th year of service to our members and communities. SECO’s ser-

vice territory has undergone momentous changes in the last 75 years and we have been truly privileged to have played an important role in the progress we have seen.

Imagine a time when there was no electricity in our part of Central Florida. A pall of darkness covered the land. What little light there was came from dim kero-sene lamps. Life was absolute drudgery. People began work on the farm and in the home before the sun came up and the work wasn’t done until after the sun went down in the evening.

Children studied, women sewed, and men milked the cows by kerosene lamp light. Milking was done early in the morning so that every precious moment of

daylight could be spent outdoors doing the farm work. There were no refrigerators to keep

the milk fresh and there often wasn’t enough ice to preserve

the milk long enough to sell it.

Everyone in the family had to carry water and wood for all kinds of chores. It was hard, hot, and often back-breaking work.

Back then the sun beat down

mercilessly on met-al-roofed houses.

Despite the oppressive heat, women had to tend the fires in their wood stoves to keep the constant tempera-tures needed for cooking and canning. The stoves were hot, dirty, and smoky. Fruits and vegetables had to be canned as soon as they became ripe, so canning was a summer-long process.

Wash was often done outside in large pots of boiling water hung over a fire. Clothes would be scrubbed on a washboard with harsh soaps and the dirty water wrung out. Then, of course, more water was needed for rinsing.

Ironing was probably the most hated chore of the women folk of the time. The metal irons (which often weighed six or seven pounds) were heated on the wood stove. Wood handles or cloth potholders would often become dislodged and the woman’s hand would be blis-tered by the intense heat. To add insult to injury, the soot from the stove would have to be cleaned off the irons to keep it from soiling the clothes.

Farming was most often done by hand or behind a horse. Irrigating the crops was another very diffi-cult chore without the power of electricity to get the job done.

The great stock market crash of 1929 led to the Great Depression of the ’30s. Jobs were scarce and money even scarcer. This, too, added to the miseries of the time. These were not the “good ole days.” However, hope was on the horizon and a change for the better was on the way.

The year was 1937 and a small, but intrepid band of local residents got together to advance the idea of cre-ating a rural electrification project to bring electricity to our part of Florida. The first organizational meeting was held in June of that year and was attended by about 250 average citizens who knew that the investor-owned

1878 Thomas Edison establishes

the Edison Electric Light Company in New York City and makes electricity available

for household usage. 1906 The first radio set advertises for $7.50, with claims to receive signals up to one mile.

1932 Jack Benny makes his radio debut.

1922 A presidential address is broadcast on radio for the first time as President Calvin Coolidge speaks to a joint session of Congress. 1913 Ford introduces the

assembly line, revolutionizing mass production.

1914 The first electric

traffic lights are installed in

Cleveland, Ohio.

1902 The Electric Theater in Los Angeles becomes America’s first moving picture cinema.

Moments in Time

[ ]][

CELEBRATING 75 YEARS OF SERVICE | 3

Tragedy struck our nation on December 7, 1941 when the Japanese bombed Pearl Harbor and plunged the nation into war.

Sumter Electric employees did their part in the war effort at the new headquarters in Sumter-ville. Volunteering as enemy plane spotters, they took turns working for the Aircraft Warning Ser-vice. An employee had to climb out onto the head-quarters roof and used binoculars to identify the type of aircraft flying overhead. They reported the type and direction of the aircraft to the U.S.

Defense Department. In an effort to ease their bur-

den, the local community built a lookout tower through volunteer labor and donated materials as the employees shared responsiblity of listening and watching for planes in the civil defense effort until the end of WWII.

electric companies of that era had no interest in serving the more rural parts of the state. If things were to change and life were to get better, they would have to take mat-ters into their own hands.

In 1938, Sumter Electric Cooperative was born. The cooperative business model was chosen because it was not-for-profit and member-owned. Member/customers had a direct say in how the cooperative functioned. The entire focus of the fledgling co-op would be on the very people and communities it served.

Construction of the first power lines was completed in 1938 near Webster, Florida and with hard work, elec-tricity began to flow. As time passed, more and more lines stretched out to other parts of the service territory and the aforementioned pall of darkness was lifted.

1935 Hoover Dam is complete after eight years of planning and construction.

1938 Sumter Electric Cooperative’s first construction lines are energized near Webster, Florida.

1939 NBC-TV debuts black- and-white television at the New York World’s Fair with the first public television demonstration.

1935 Rural Electrification Administration was created soon

after for-profit utilities rejected the idea of bringing electric power

to rural America. Franklin D. Roosevelt carries out an executive

order establishing the REA.

[ ]1945

The Andrew Sisters announce the end of WWII to 5,000 GI’s in Italy who were preparing to

head to the Pacific.

2012 SECO ENERGY ANNUAL REPORT

1945 The first computer (ENIAC) built by the University of Pennsylvania for the U.S. Army heralded as “Giant Brain” weighed 27 tons, measure 8' x

3' x 100' and consumed 150 kW of power.

1950 The first modern credit

card is introduced in New York

City called the Diners Club.

1950 Animated character Willie Wiredhand steps into the spotlight as an ambassador for rural electric cooperatives across America.

1955 The first “Walk & Don’t Walk” lighted street signals are installed. [

[ ]

]

1957 The first commercial nuclear power plant begins operating in Shippingport, PA.

1955 Rosa Parks is arrested for

refusal to leave her seat.

1960 The first telecommunications and television weather satellites, Echo I and Tiros I are launched by NASA.

1959 REA kicks off its 25th year having made $3.8 billion in loans to 1,030 electric systems, providing new or improved service to 4.5 million consumers across the U.S.

In the beginning, most peo-ple who received electricity only

had a single 25 watt light bulb in the middle of each room. To some

it was a special gift. To others it was a miracle. Many humorous stories still cir-

culate today about the time when the lights came on. Electricity was so new it took some ad-

justing as to how it worked.One man who had been at work when his power was

turned on didn’t know how to turn the light in his bed-room out. To solve the problem he took a metal bucket and propped the bucket over the light bulb with a stick so he could go to sleep. The next day he figured out how to turn the light off.

Yet another man didn’t quite trust the electrifica-tion of his house so he put firecrackers up in his attic. He said, “If the electricity causes my house to catch fire at least the noise of the firecrackers will wake me up so I can escape.”

It wasn’t long, however, before people became comfortable with the electrons flowing into their homes. It revolutionized their lifestyles. As the years passed, they found more and more benefits from electric conve-niences like refrigerators, irons, irriga-

tion pumps and the like. They didn’t have cell phones or iPads yet, but they did have that miracle of the airways – radio. It connected people with the news of the day and families gathered around those old tube-style radios to hear the popular shows of the era.

Yes, when the lights came on, that ushered in a transformation which continues to this very day. More-over, the principles upon which Sumter Electric Coop-erative was founded back in 1938 are as strong as ever. We’ve never lost sight of the fact that we exist solely to provide our members with the most reliable, lowest cost electricity possible with exceptional customer ser-vice. Here you are not just an account number, you are a member of the co-op family.

As a member of Sumter Electric you get to vote for who represents you on the SECO Board of Trustees every three years, and on any proposed changes to the bylaws which govern how the co-op operates. It’s one man/woman, one vote and represents the purest form of democracy.

1947 U.S. Air Force Captain “Chuck” Yeager becomes the first person to fly faster than the speed of sound as he tests the X-1 rocket-powered research plane in the Mojave Desert.

S E N I O R S T A F F

BARRY BOWMANDirector of Corporate Communications &

Energy Services

BEN BRICKHOUSEDirector

of Engineering

JOHN LASELVADirector of

Reliability & Operations

ALEX MARKLEYDirector of

Human Resources & Corporate Services

TED PURSERDirector of Financial

& Administrative Services


1961 Astronaut Alan B. Shepard, Jr. becomes America’s first space traveler as he makes a 15-minute sub-orbital flight launched from Cape Canaveral.

Developed and drawn by Howell Hobson of Leesburg, Sumter Electric Cooperative’s first business headquarters was established in Sum-terville and constructed by youth associated with the National Youth Administration (NYA) in the early 1940s.

A few directors and key personnel gather in front of the new building. Standing from left to right are D.W. Smith, Curtis Oree Pitts, J.P. Lynch, Joe Traylor, W.H. Proctor, Kitty Barlow, R.W. Eldridge, Jettie Pearl Mickler, J.G. Spark-man, Jackie Hagle, and the young girl is Mr. Lynch’s daughter.

Because we are a not-for-profit organization, unlike other types of electric companies, SECO members get to share in any excess margins the co-op may have each year in the form of capital credits. We are not concerned with providing quarterly dividends to some far away group of stockholders. These credits are returned each November and are much appreciated by the members.

In 2012, SECO members received $2,170,993 in capital credit returns. And, in the last sixteen years your co-op has given back over $22,000,000 in capital credits to the membership-at-large.

As a SECO member you have access to the SECO Angel Fund if you are in financial difficulty through no fault of your own. This humanitarian fund has helped

literally thousands upon thousands of people since it was first founded and has made a positive contribution to the human condition in SECO’s service territory.

You and your family can also benefit, if needed, from the voluntary and very substantial donations SECO em-ployees give to such worthwhile causes as United Way, American Cancer Society and a host of other humani-tarian efforts. SECO and its employees share a deep-rooted commitment to those less fortunate.

Keeping you informed is a very high priority for all of us at SECO. Having robust two-way communication ve-hicles that meet various modern lifestyle needs is essen-tial. Today you can stay on top of SECO programs, work projects, energy saving tips, events and more with ease. You can be involved by reading your printed monthly newsletter SECO News, joining our electronic headline news service SECO eNews, visiting our Facebook page, viewing our videos on YouTube and you can sign up for electronic emergency and storm alerts. If we are working on major improvements in your area you’ll likely receive a letter or a telephone call letting you know exactly what we are doing to enhance your electric service.

In addition to all of that, SECO members are ran-domly selected to voice their thoughts and opinions when the co-op conducts its annual member satisfaction survey each fall.

1966 NRECA creates the Action Committee for Rural Electrification, a bipartisan political action committee that provides financial support to congressional and state legislative candidates who are friendly to electric cooperatives.

1964 The Beatles make their first live American television

appearance on The Ed Sullivan Show, and are watched by a

record-setting 73.7 million people.

1962 The first BASIC program is run on a computer in Dartmouth.

1969 First human to walk on the moon Neil Armstrong said, “That’s one small step for man, one giant leap for mankind.”

[ ]

1959 Hawaii officially becomes the fiftieth state of the union.

E X E C U T I V E

JAMES DUNCANCEO &

General Manager

NORA BROWNSr. Executive Assistant


“Willie Wiredhand” always has a friendly smile. His hips and legs display an electrical-plug, his wire body and light socket head has a push-button nose. His big gloves symbolize hired hands deemed necessary for helping our nation’s farmers. This rural electric mascot was created in 1950 by artist Andrew McLay for the National Rural Electric Cooperative Association represent-ing over 900 rural electric co-ops across America.

McLay’s design happened when cartoon char-acters provided big personalities for product ad-vertisement used to increase production and sales. Common icons of the day were Mr. Peanut, Mr. Clean, Jolly Green Giant, Tony the Tiger and even Willie’s arch nemesis Reddy Kilowatt.

The animated ambassa-dor Willie was found in comic books, newspapers ads, on ciga-rette lighters, coffee mugs, lapel pins, billboards, utility trucks, and even political cartoons do-ing anything and everything to connect with the public.

As a youngster in ’56, Willie Wiredhand was challenged in U.S. District Court of Appeals Fourth Circuit by Reddy Kilowatt for infringement rights of a trademark. Reddy symbolized and promoted private power companies. Unlike Willie, Reddy’s body was composed of jagged lines of lightning bolts and a rounded head with a light bulb nose and plug-in socket ears. The two cartoon char-acters simply did not look alike; however, they both symbolized the same thing – electricity. Wil-lie was a mascot for rural electric cooperatives; Reddy represented investor-owned utilities. Be-cause the plaintiff made zero claims to any suf-fering, damage, or loss of revenue or customers, Reddy did not have a foot to stand on. In 1957, the three-judge panel Soper, Sobeloff, and Ches-nut issued an unanimous decision in favor of Wil-lie. Willie came out shining brighter than ever. Infringement rights were dropped and he left the courtroom with a satisfied twinkle in his eye.

Still a spokes character for many co-ops to this day, Willie Wiredhand has become a legend and an American icon.

1970 Millions of Americans observe the first “Earth Day.”

1979 The U.S. House of Representatives begins regular television broadcasts of its day-to-day business via the C-SPAN.

1996 Dolly the female sheep is the first mammal to be cloned from an adult somatic cell.

1994 IBM introduces Simon as the first cellular phone with all the features of a “smartphone.”

1974 Hank Aaron breaks Babe

Ruth’s lifetime RBI record

of 2,209.

1977 The first personal computer, the Apple II, goes on sale.

1980s Shifting into the Information Age, digital technology is born with the mass production of computers, cable television, gaming consoles, and communication devices.

1969 The Internet is born when the government links universities, military and defense contractors together.

The members gave the co-op very high marks in the 2012 telephone survey which was conducted on our be-half by NRECA Market Research Services.

The co-op was rated over 4.50 on a 5.00 scale in each of the following categories:

• having friendly, courteous employees• having highly trained and professional employees• providing accurate, easy to understand bills• supporting the local community• having convenient payment options• operating with concern for the environment• keeping longer outages to a minimum• being easy to reach• resolving any issues or problems• restoring power quickly after an outage• keeping blinks and momentary outages to a minimum

• communicating with members and keeping them informed• having consumers’ best interests at heart• delivering good value for the money

Another measurement which was contained in the survey was a series of questions that compared SECO to other types of companies who seek to rank themselves on the nationally recognized American Customer Satis-faction Index (ACSI).

SECO’s 2012 ACSI score of 89 was one of the high-est scores for any type of electric utility in the entire na-tion. And, it far exceeded the ACSI scores of the large investor-owned utilities here in Florida. Additionally, J.D. Power and Associates independently ranked SECO as having some of the highest customer satisfaction scores in the country throughout 2012.


2001 Enron files Chapter 11

making it the largest bankruptcy filing in

U.S. history.

2005 Hurricane Katrina is deemed as one of the worst disasters in U.S. history.

2003 Largest blackout in the country’s history darkens

the Northeast and Midwest.

1997 A 22-pound rover is carried on the NASA Pathfinder and becomes the first to explore the Martian surface.

1997 The first mass- produced-hybrid vehicle was the Toyota Prius with an estimated fuel economy of 52 miles per gallon. The original hybrid car was actually built by Ferdinand Porsche in 1900. SECO’s first hybrid truck was added to the fleet in 2005.

1998 Touchstone Energy begins a national alliance to provide strength and resources to electric cooperatives across the nation.

2011 The world’s largest photovoltaic solar-

generating facility project is Agua Caliente Solar Project in Arizona, and is projected

to reach full capacity of 397 MW by 2014.

The exceptional customer satisfaction scores SECO received from the members this year were most gratify-ing. What the members are saying and thinking about their co-op helps us stay on top of what is important to them. It assures that we are still meeting their expec-tations when it comes to delivering reliable, affordable electric power and that we have not discounted the high premium our members place on real customer service.

2012 also brought about the formation of the SECO Power Posse. This highly trained group of energy ex-perts provided members with free energy audits of their homes and businesses. They also did a record number of community presentations to a wide variety of groups in the service territory on many different topics. And, because of the increasing number of scams being perpe-trated upon SECO members, they actively took on the role of helping to identify the scammers and protecting our members’ hard-earned money and retirement funds.

As of the publication date of this annual report, we are well into 2013. More innovations are on the horizon for SECO members. We never stand still and we take nothing for granted because we know that electricity isn’t a luxury commodity. It is essential to modern life. The responsibility of providing that critical necessity is, for us, a most serious obligation.

It has been our high honor to have served our members and communities for 75 years. It is a mile-stone anniversary. It could not have been achieved without the dedication of SECO employees and the strong support of our great members. Thanks to all those who came before us and to the SECO family of today.

2001 2,976 Americans are murdered and 6,000 plus are wounded when terrorists crash two passenger aircrafts into the World Trade Center, crash another passenger aircraft into the Pentagon, and cause United Airlines Flight 93 to crash before reaching its intended target of the U.S. Capitol.[ ]

Prints/photographs courtesy of Wikimedia Commons, Library of Congress, and National Rural Electric Cooperative Association.

“While it is well enough to leave footprints on the sands of time, it is even more important to make sure they point

in a commendable direction.”– \James Cabell


INDEPENDENT AUDITORS’ REPORTBoard of Directors

Sumter Electric Cooperative, Inc.Sumterville, Florida

Report on the Financial StatementsWe have audited the accompanying balance sheets of Sumter Electric Cooperative, Inc. (the Coopera-tive), as of December 31, 2012 and 2011, and the related statements of revenues and patronage capital and cash flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the ef-fectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of signifi-cant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Cooperative, as of December 31, 2012 and 2011, and the results of its opera-tions and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States.

Other Reporting Required by Government Auditing StandardsIn accordance with Government Auditing Standards, we have also issued our report dated, February 15, 2013, on our consideration of the Cooperative’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance, and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and important for assessing the results of our audits.

Purvis, Gray and Company, LLPFebruary 15, 2013Ocala, Florida

RAY F. VICKPresident District 5

JERRY D. HATFIELDVice President

District 9

BILL JAMESDistrict 8

EARL MUFFETTDistrict 6

ROB HENIONDistrict 7

JAMES D. HOLTZDistrict 4

DILLARD B. BOYATTDistrict 2

DONALD W. SANTEEDistrict 1

BARRY R. EVANSSecretary-Treasurer

District 3

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Balance Sheets December 31, 2012 and 2011

ASSETS

2012 2011

Electric Plant

Distribution and Transmission Plant $ 646,827,200 $ 610,454,568

Construction Work in Progress 18,960,157 18,233,049

Total Electric Plant 665,787,357 628,687,617

(Accumulated Provision for Depreciation and

Amortization) (141,120,857) (133,665,031)

Total Electric Plant - Cost Less Depreciation and

Amortization 524,666,500 495,022,586

Investments

Investments in Associated Organizations and

Other Special Funds 52,560,705 49,647,064

Current Assets

Cash and Cash Equivalents 2,902,853 6,476,813

Accounts Receivable - Consumers (Less Provision

for Doubtful Accounts 2012 -$1,090,118

2011 - $1,054,565) 11,202,684 9,712,323

Other Receivables 809,587 905,023

Unbilled Electric Revenues and Under Collection of Power Costs 8,542,102 9,042,369

Inventories 12,775,117 11,961,095

Prepayments and Other Current Assets 456,276 1,285,586

Total Current Assets 36,688,619 39,383,209

Deferred Charges 194,167 325,316

Total Assets 614,109,991 584,378,175

EQUITIES AND LIABILITIES

Equities

Memberships 777,954 761,634

Patronage Capital 191,674,089 180,743,216

Other Equities 2,632,933 2,632,933

Total Equities 195,084,976 184,137,783

Noncurrent Liabilities

Long-term Debt 353,221,567 340,579,894

Deferred Compensation Liability 515,006 374,178

Total Noncurrent Liabilities 353,736,573 340,954,072

Current Liabilities

Long-term Debt - Portion Due Within One Year (Less

Cushion of Credit 2012 - $0; 2011 - $1,280,097) 11,791,021 9,995,959

Accounts Payable 25,429,940 23,417,903

Consumer Deposits 13,531,347 12,212,786

Other Current or Accrued Liabilities 7,724,282 7,870,133

Total Current Liabilities 58,476,590 53,496,781

Deferred Credits 6,811,852 5,789,539

Total Equities and Liabilities $ 614,109,991 $ 584,378,175

See accompanying notes


Statements of Revenues and Patronage Capital December 31, 2012 and 2011

2012 2011

Operating Revenues $ 330,987,476 $ 329,999,283

Operating Expenses

Cost of Power 228,823,441 228,015,257

Transmission Expense 206,204 188,284

Distribution Expense - Operations 15,082,074 14,387,277

Distribution Expense - Maintenance 20,377,766 21,428,766

Consumer Accounts Expense 9,429,595 10,512,172

Customer Service and Informational Expense 1,525,739 1,612,793

Administrative, General, and Other Expense 11,861,624 11,881,069

Depreciation Expense 20,317,197 19,042,403

Taxes - Expense 58,102 56,204

Other Expense 352,156 266,978

(Total Operating Expenses) (308,033,898) (307,391,203)

Operating Margins Before Fixed Charges 22,953,578 22,608,080

Fixed Charges

Interest on Long-term Debt (13,392,785) (13,813,829)

Operating Margins After Fixed Charges 9,560,793 8,794,251

Other Margins

G&T Cooperative Capital Credits 2,052,289 5,068,962

Other Capital Credits and Margins 1,230,717 1,151,602

Total Other Margins 3,283,006 6,220,564

Net Operating Margins 12,843,799 15,014,815

Nonoperating Margins

Interest Income 130,439 291,318

Other Nonoperating Income 127,628 133,395

Total Nonoperating Margins 258,067 424,713

Net Margins 13,101,866 15,439,528

Patronage Capital, Beginning of Year 180,743,216 168,308,033

(Retirement of Capital Credits) (2,170,993) (3,004,345)

Patronage Capital, End of Year $ 191,674,089 $ 180,743,216



Statements of Cash Flows December 31, 2012 and 2011

2012 2011

Cash Flows from Operating Activities

Net Margins $ 13,101,866 $ 15,439,528

Adjustments to Reconcile Net Margins to Net

Cash Provided by (Used in) Operations:

Capital Credits and Patronage Dividend

Certificates Assigned (3,283,006) (6,220,564)

Depreciation 22,182,827 20,880,794

Provision for Uncollectible Accounts 366,400 480,000

Changes in Assets - Decrease (Increase) and

Liabilities - Increase (Decrease):

Accounts Receivable (1,261,058) 12,218,035

Prepayments and Other Current Assets 829,310 1,178,018

Deferred Charges 131,149 (133,553)

Accounts Payable 2,012,037 (8,094,843)

Consumer Deposits 1,318,561 814,471

Other Current Liabilities (145,851) 452,690

Deferred Compensation Liability 140,828 110,921

Deferred Credits 1,022,313 4,004,773

Total Adjustments 23,313,510 25,690,742

Net Cash Provided by (Used in) Operating Activities 36,415,376 41,130,270

Cash Flows from Investing Activities

Change in Inventory - Net of Salvage (814,022) (231,064)

Contributions in Aid of Construction Received 6,406,679 9,922,954

Proceeds from Disposition of Property 220,198 132,853

Proceeds from Redemption of Patronage Capital

Certificate 464,238 485,418

Proceeds from Redemption of Other Investments 45,955 43,318

Purchase of Other Investments (140,828) (110,922)

Extension and Replacement of Plant (55,328,267) (53,352,202)

Plant Removal Cost (3,125,351) (3,021,084)

Net Cash Provided by (Used in) Investing Activities (52,271,398) (45,130,729)

Cash Flows from Financing Activities

Line of Credit (Net) 24,669,817 (28,060,440)

Proceeds on Long-term Debt 0 68,500,000

Payments on Long-term Debt (11,513,179) (26,356,142)

Cushion of Credit 1,280,097 (1,280,097)

Membership Fees 16,320 13,030

Retirement of Capital Credits (2,170,993) (3,004,345)

Net Cash Provided by (Used in) Financing Activities 12,282,062 9,812,006

Net Increase (Decrease) in Cash and Cash Equivalents (3,573,960) 5,811,547

Cash and Cash Equivalents, Beginning of Year 6,476,813 665,266

Cash and Cash Equivalents, End of Year $ 2,902,853 $ 6,476,813



Statements of Cash Flows (concluded) December 31, 2012 and 2011

2012 2011

Supplemental Disclosures of Cash Flow Information

Cash Paid During the Year for:

Interest $ 13,324,087 $ 13,871,590

Supplemental Schedule of Noncash Investing and

Financing Activities

The Cooperative Retired Certain Assets from its Plant Records

as Follows:

Cost of Assets Retired $ 14,862,061 $ 11,152,476

Plant Removal Costs 3,162,394 3,021,084

Material Salvaged (3,274,163) (1,572,043)

Net Reduction in Accumulated Depreciation $ 14,750,292 $ 12,601,517

The Cooperative Refinanced Certain Debt with CoBank:

Amounts Not Included in Proceeds on Long-term Debt $ 6,049,168 $13,610,000

Amounts Not Included in Payments on Long-term Debt (6,049,168) (13,610,000)

Net Change in Long-term Debt $ 0 $ 0



Notes to Financial Statements December 31,2012

Note 1 - Summary of Significant Accounting Policies

Sumter Electric Cooperative, Inc. (the Cooperative) is a nonprofit rural electric distribution cooperative organized under the Statutes of the State of Florida. The primary purpose of the Cooperative is to provide electricity to its members located in central Florida through wholesale purchase and subsequent distribution. The Accounting policies of the Cooperative conform to gener-ally accepted accounting principles as applied to utility cooperatives and are in accordance with the accounting requirements of the Rural Utilities Service (RUS).

ReceivablesReceivables are shown at anticipated realizable value. Bad debts are recognized by use of the allowance method. Receivables consist primarily of uncollateralized amounts due from the sale of energy to commercial and residential members of the Coopera-tive and other related items. Receivables may be considered delinquent after thirty days and are written off after approximately one hundred twenty days past due.

Revenue Recognition and Cost of PowerElectric revenues are recognized when billed and are adjusted for unbilled usage through year-end. Power costs are metered and recognized during the period of use. The Cooperative’s retail rates provide for recovery of all power costs incurred.

Utility PlantElectric plant is recorded at original cost with maintenance and repairs charged to expense as incurred. Additions to plant in-clude costs of materials, labor, and certain overhead expenses. Depreciable plant replaced or retired is removed from the appropri-ate asset at average cost; cost being determined by a moving average for identifiable units of property. Such costs, plus removal costs less any salvage values, are charged to accumulated depreciation when normal retirements are made.

DepreciationProvision for depreciation of utility plant in service is based on straight-line composite rates. Depreciation rates are applied by primary account within the plant accounts. Depreciation on general plant assets is based on straight-line rates for specific assets as outlined by RUS ranging from three to fifteen years.

No provision for depreciation is made for construction work in progress until the construction has been completed and the plant is placed into service.

Materials and SuppliesMaterials and supplies inventories are stated at weighted average cost.

Cash and Cash EquivalentsFor purposes of the statements of cash flows, the Cooperative considers all cash and highly liquid investments as cash and cash equivalents. Such investments generally have maturities of three months or less. The Cooperative maintains accounts with several banks in central Florida.

As of December 31, 2012 and 2011, accounts at each bank are fully insured by the FDIC through December 31, 2012, in accor-dance with Section 343 of the Dodd-Frank Act. The provisions of this act related to coverage of non-interest bearing accounts expire on December 31, 2012, after which time the FDIC insures interest bearing and non-interest bearing accounts at each bank up to $250,000.

InvestmentsInvestments in capital term certificates are carried at cost, with cost determined by specific identification. Investments in associ-ated cooperatives are accounted for at original cost plus patronage capital assigned less capital credits received.

Patronage CapitalAccumulated net margins are credited to patronage capital. The net margins are assigned to individual cooperative members’ capital credit accounts based upon their contribution to total patronage capital for the year. Such amounts are assignable to members at year-end; the assignment of capital accounts takes place in subsequent years. Capital credits are returned to members in accordance with the Cooperative’s policies and by-laws.

Income TaxesThe Cooperative is a nonprofit organization exempt from income taxes under the provisions of Internal Revenue Code Section 501(c)(12). Accordingly, there is no provision for income taxes in the financial statements. The Cooperative has adopted Ac-counting Standards Codification (ASC) 740, Accounting for Uncertainty in Income Taxes. The implementation of this standard had no impact on the Cooperative’s financial statements. The Cooperative does not believe it has taken any uncertain tax posi-tions that would have a material effect on the financial statements. The Cooperative’s Form 990’s for the past three years are open to examination by the Internal Revenue Service. For the years ended December 31, 2012 and 2011, the Cooperative filed Form 990T for unrelated rental income on communication towers. The amount paid or accrued was $3,207 and $2,352, respectively.

Compensated AbsencesVacation is accrued monthly as it is earned and sick pay is expensed as it is taken.



Note 1 - Summary of Significant Accounting Policies(concluded)

Accounting EstimatesThe preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

Collective BargainingApproximately 40% of the Cooperative’s work force is covered by a collective bargaining agreement that expires in September 2015.

Subsequent EventsManagement has evaluated subsequent events through February 15, 2013, the date the financial statements were available to be issued.

Note 2 - Electric Plant and Depreciation Rates

The following is a summary of the major classes of electric plant and depreciation rates as of December 31, 2012 and 2011:

Depreciation expense of $20,317,197 (2012) and $19,042,403 (2011) is net of $1,865,630 (2012) and $1,838,391 (2011) charged to clearing accounts, some of which is capitalized.

Note 3 - Investments in Associated Organizations and Other Special FundsInvestments in associated organizations and other special funds consist of the following:

CFC Capital Term Certificates are purchased as a condition of the mortgage agreements with CFC. At December 31, 2012 and 2011, they consist of the following:

2012 2011 Depreciation Rate

Transmission Plant $ 10,438,784 $ 10,529,673 2.75%

Distribution Plant 557,265,686 527,372,557 3.20%

Intangible Plant 347,023 347,022 N/A

General Plant 78,775,707 72,205,316 2%-33.33%

Total Electric Plant in Service 646,827,200 610,454,568

Construction Work in Progress 18,960,157 18,233,049

Total Electric Plant - at Cost $ 665,787,357 $ 628,687,617

2012 2011

Seminole Electric Cooperative, Inc. -

Patronage Capital Assigned $ 39,699,689 $ 37,647,400

National Rural Utilities Cooperative

Finance Corporation (CFC):

Patronage Capital Certificates 1,854,995 1,775,749

Capital Term Certificates 3,539,346 3,585,301

GRESCO Utility Supply, Inc. 5,847,090 5,372,194

Investments in Other Associated Organizations 1,104,579 892,242

Special Funds 515,006 374,178

Total Investments in Associated Organizations

and Other Special Funds $ 52,560,705 $ 49,647,064

2012 2011

Certificates, 5% (Maturing 2070 to 2080) $ 1,902,011 $ 1,902,011

Certificates, 3% (Maturing 2020 to 2030) 471,400 471,400

Certificates, 0% (Maturing at Variable Dates) 1,165,935 1,211,890

Total $ 3,539,346 $ 3,585,301



The patronage capital assigned by Seminole Electric Cooperative, Inc. and the patronage capital certificates with CFC are ex-cluded from ASC 320, Investments—Debt and Equity Securities, as an investment accounted for under the equity method of ac-counting. Capital term certificates are held to maturity under ASC 320 and are excluded from ASC 820, Fair Value Measurements and Disclosures. Investments in Other Associated Organizations includes memberships with related and trade organizations, and are accounted for under the equity method of accounting.

ASC 820, among other things, requires the Cooperative to maximize the use of observable inputs and minimize the use of unob-servable inputs when measuring fair value, and specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the company’s market assumptions. ASC 820 defines the following fair value hierarchy based on these three types of inputs:

Level 1 — Quoted prices for identical instruments in active markets.

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable.

There were no assets recorded at fair value on a recurring basis at December 31, 2012, or December 31, 2011.

Note 4 - Account Receivables

All of the Cooperative’s consumer account receivables are due from consumers in the central Florida area. Each new consumer pays a membership fee and may make a deposit when becoming a consumer. The membership fees and deposits can be retained by the Cooperative in the event of nonpayment of a billing for services. Once a residential consumer establishes a satisfactory credit history, the Cooperative may return the member’s deposit.

Other receivables at December 31, 2012 and 2011, include approximately $314,998 and $307,091, respectively, relating to pole rentals due from other utility companies.

Note 5 - Return of Capital

Under provisions of the long-term debt agreements, unlimited patronage capital distributions to members are allowed provided eq-uities and margins equal or exceed 30% of total assets after distribution. Effective with the 1991 year, the Cooperative suspended for five years the general capital credit retirements. During 1995, the suspension was lifted and the Cooperative began making general retirements of patronage capital. The equities and margins of the Cooperative represent 31.77% and 31.51% of the total assets at December 31, 2012 and 2011, respectively. Capital credit retirements in the amount of $2,170,993 and $3,007,441 were paid in 2012 and 2011, respectively.

Note 6 - Detail of Patronage Capital

Note 7 - Detail of Other Equities

2012 2011

Assignable $ 13,101,866 $ 15,439,528

Assigned 213,357,084 198,750,908

226,458,950 214,190,436

(Retired/Adjusted in Current Year) (2,170,993) (3,004,345)

(Cumulative Amount Retired in Previous Years) (32,613,868) (30,442,875)

Total Patronage Capital $ 191,674,089 $ 180,743,216

2012 2011

Operating Margins (Prior to 1957) $ 32,092 $ 32,092

Nonoperating Margins (Prior to 1964) 19,371 19,371

Capital Gains and Losses (Prior to 1964) 10,533 10,533

Donated Capital 626 626

Discount on Retired Capital Credits 2,570,311 2,570,311

Total Other Equities $ 2,632,933 $ 2,632,933



Note 8 - Noncurrent Liabilities

The Cooperative has the following unsecured lines of credit:

The Cooperative also has an available line of credit with CFC of $12,000,000 in 2012 and 2011.

The Cooperative also had approved, but undrawn long-term loan funds available in the amount of $30,000,000 as of December 31, 2012 and 2011. In accordance with ASC 470, Debt, the line of credit was classified as long-term debt in an amount not exceeding the undrawn loan funds.

The following is a summary of the Cooperative’s long-term debt payable to RUS, FFB, CFC, and CoBank:

2012 2011

CoBank, ACB, Credit Line of $50,000,000

Variable Interest, 2.96% and 3.05% at December 31, 2012

and 2011, Respectively $ 24,669,817 $ 0

Bank of America, Credit Line of $3,000,000

Variable Interest, 1.96%, and 1.97% at December 31, 2012

and 2011, Respectively, Payable on Demand 0 0

Total $ 24,669,817 $ 0

RUS Mortgage Notes 2012 2011

0.875% Notes $ 1,606,283 $ 1,672,384

1.625% Notes 8,078,362 3,574,785

1.750% Notes 6,696,313 0

2.000% Notes 5,604,835 5,788,755

2.125% Notes 873,920 910,705

2.250% Notes 2,540,696 2,653,062

2.375% Notes 1,573,736 1,627,582

2.550% Notes 24,113,360 24,657,846

2.625% Notes 9,391,107 9,679,453

2.750% Notes 3,943,276 1,663,359

3.000% Notes 0 7,149,720

3.125% Notes 4,674,475 4,806,309

3.250% Notes 0 2,379,458

3.500% Notes 11,948,225 12,241,396

3.625% Notes 8,792,712 8,990,891

3.750% Notes 17,506,098 22,446,458

4.000% Notes 3,107,909 3,203,704

4.125% Notes 29,361,762 31,445,114

5.070% Notes 41,967,847 42,574,361

5.500% Notes 0 4,659,137

Total RUS Mortgage Notes 181,780,916 192,124,479

(Current Portion) (4,322,907) (4,367,584)

Long-term Portion $ 177,458,009 $ 187,756,895

FFB Mortgage Notes - RUS Guaranteed

2.480% Notes $ 7,045,455 $ 7,272,727

3.337% Notes 7,045,455 7,272,727

3.813% Notes 7,045,455 7,272,727



FFB Mortgage Notes - RUS Guaranteed (concluded) 2012 2011

3.909% Notes $ 36,723,073 $ 37,907,692

4.019% Notes 7,045,456 7,272,727

Total FFB Mortgage Notes - RUS Guaranteed 64,904,894 66,998,600

(Current Portion) (2,093,706) (2,093,706)


CFC Mortgage Notes

3.050% Notes $ 2,034,669 $ 0

3.250% Notes 5,967,109 0

3.350% Notes 4,091,073 0

3.600% Notes 735,725 0

4.050% Notes 3,024,945 0

4.500% Notes 3,934,948 0

4.550% Notes 3,552,339 0

4.800% Notes 4,629,564 0

4.950% Notes 186,404 424,472

5.150% Notes 975,941 1,298,126

5.250% Notes 884,656 1,035,549

5.300% Notes 6,276,001 6,882,617

6.028% Notes 19,624,042 19,908,757

6.198% Notes 0 296,221

6.250% Notes 0 23,285,270

Total CFC Mortgage Notes 55,917,416 53,131,012

(Current Portion) (3,438,640) (2,952,552)


CoBank Mortgage Notes

1.570% Notes $ 25,597,798 $ 0

1.650% Notes 0 26,280,068

3.260% Notes 12,141,747 13,321,791

Total CoBank Mortgage Notes 37,739,545 39,601,859

(Current Portion) (1,935,768) (1,862,214)


RUS mortgage notes are payable to the United States of America for thirty-five year periods each. Principal and interest are due in monthly installments. Certain notes have provisions for interest rate changes at future dates.

FFB mortgage notes are guaranteed by RUS and are payable quarterly to the United States of America with a maximum of up thirty-five year periods each. Certain notes have provisions for interest rate changes at future dates.

CFC mortgage notes are payable to the National Rural Utilities Cooperative Finance Corporation for thirty-five year periods each. Principal and interest are due in quarterly installments. Certain notes have provisions for interest rate changes at future dates. Certain notes included above are serviced by CFC but have been sold to Farmer MAC. The Farmer MAC loans are payable semi-annually. At December 31, 2012 and 2011, the balance of these notes was $19,624,042 and $20,204,978, respectively. There were no unadvanced CFC loan funds available to the Cooperative as of December 31, 2012 and 2011, respectively.

One CoBank mortgage note is fixed at a 3.26% interest rate for the remaining life of the loan and is paid monthly. The remaining CoBank mortgage notes are payable quarterly for thirty-five year periods each. Interest is calculated based on variable rates that change weekly.


Long-term debt maturing within each of the five years subsequent to December 31, 2012, is as follows:


Note 8 - Noncurrent Liabilities (concluded)

Interest on long-term debt, all of which was charged to expense, follows:

2012 2011

Lines of Credit $ 248,504 $ 113,956

RUS Mortgage Notes 6,825,371 8,059,349

FFB Mortgage Notes - RUS Guaranteed 2,425,345 1,911,185

CFC Mortgage Notes 3,004,571 3,195,777

CoBank Mortgage Notes 888,994 533,562

Totals $ 13,392,785 $ 13,813,829

Mortgage Notes

December 31 RUS CFC CoBank FFB Total

2013 $ 4,322,907 $ 3,438,640 $ 1,935,768 $ 2,093,706 $ 11,791,021

2014 4,475,435 3,397,855 2,012,249 2,093,706 11,979,245

2015 4,624,629 3,407,991 2,091,887 2,093,706 12,218,213

2016 4,775,419 3,124,503 2,174,819 2,093,706 12,168,447

2017 4,954,394 3,265,173 2,261,187 2,093,706 12,574,460

Thereafter 158,628,132 39,283,254 27,263,635 54,436,364 279,611,385

Total $ 181,780,916 $ 55,917,416 $ 37,739,545 $ 64,904,894 $ 340,342,771

Substantially all assets and revenues of the Cooperative are pledged as collateral for these notes. RUS debt covenants require the Cooperative to maintain certain ratios including a Times Interest Earned Ratio (TIER) of 1.25, a Debt Service Coverage (DSC) Ratio of 1.25 in two out of the last three years, and Equity to Total Assets Ratio of not less than .225 to 1.0. As of December 31, 2012 and 2011, the Cooperative achieved a Times Interest Earned Ratio of 2.00 and 2.13, respectively, a Debt Service Coverage Ratio of 1.89 and 1.99, respectively, and an Equity to Total Assets Ratio of .318 and .315, respectively.

Note 9 - Employee Benefit PlansThe group pension plan for employees was merged into the Retirement and Security Program of the National Rural Electric Cooperative Association (NRECA) effective July 1, 2003. The Retirement and Security Plan (RS Plan), administered by the NRECA, is a defined benefit, multi-employer pension plan qualified under Section 401 and exempt from federal income tax under Section 501(a) of the Internal Revenue Code. The plan sponsor’s Employer Identification Number is 53-0116145 and the Plan Number is 333.

A unique characteristic of a multiemployer plan compared to a single employer plan is that all plan assets are available to pay benefits of any plan participant. Separate asset accounts are not maintained for participating employers. This means that assets contributed by one employer may be used to provide benefits to employees of other participating employers.

The Cooperative’s contributions to the RS Plan in 2012 and 2011 represented less than 5% of the total contributions made to the plan by all participating employers. The Cooperative made contributions to the RS Plan totaling $4,269,062 and $4,893,279 in 2012 and 2011, respectively.

In the RS Plan, a “zone status” determination is not required, and therefore not determined, under the Pension Protection Act (PPA) of 2006. In addition, the accumulated benefit obligations and plan assets are not determined or allocated separately by individual employer. In total, the RS Plan was between 65% and 80% funded at January 1, 2012 and January 1, 2011 based on the PPA funding target and PPA actuarial value of assets on those dates.

Because the provisions of the PPA do not apply to the NRECA Plan, funding improvement plans and surcharges are not appli-cable. Future contribution requirements are determined each year as part of the actuarial valuation of the plan and may change as a result of plan experience.

All employees of the Cooperative meeting age and service requirements can elect to participate in a 401(k) savings plan (the 401(k) Plan) of the National Rural Electric Cooperative Association. Employees may make contributions to the 401(k) Plan up to the maximum percentage outlined in the 401(k) Plan and the Cooperative will match the employee contributions up to 4.0% of the employee’s salary. Both employee and employer contributions to the 401(k) Plan are funded biweekly. The Cooperative’s contributions to the 401(k) Plan were $1,035,837 and $950,179 in 2012 and 2011, respectively.

Effective January 2006, the Cooperative adopted an executive compensation plan that allows eligible participants to defer com-pensation under Internal Revenue Code Section 457. There is no matching employer contribution. This plan is administered by



the Cooperative and plan assets are subject to the Cooperative’s creditors in the event of bankruptcy or insolvency. Plan assets totaled $515,006 and $374,178 at December 31, 2012 and 2011, respectively.

Self-insured Medical BenefitsThe Cooperative provides a self-insured medical benefits plan for active and retired employees, trustees, and their dependents. Active employees that select dependent or additional coverage are required to pay a premium to cover part of the cost of the cov-erage they select. Retired employees and trustees are required to pay a premium to cover the full cost of the coverage they select. In connection with the plan, the Cooperative maintains specific excess insurance for claims that exceed $175,000 for any covered individual up to the maximum lifetime reimbursement of $1,825,000 and $1,000,000 aggregate excess insurance for claims that exceed $4,881,599 in the plan year. Based upon the results of a prior actuarial review the Cooperative does not have a liability related to its coverage of retired employees.

The Cooperative’s IBNR liability for active employees and part of the employees’ coverage for their dependents as of December 31, 2012 and 2011, is as follows:

Note 10 - Related Party Transactions

The Cooperative is one of ten members of Seminole Electric Cooperative, Inc., an electric generating and transmission coopera-tive. Seminole Electric Cooperative, Inc. is the sole supplier of electricity to the Cooperative and has entered into an agreement to supply power to the Cooperative through 2045. Seminole Electric Cooperative, Inc. has pledged the power supply agreement of its members to secure certain of its notes and mortgages. The following is a summary of all significant transactions between the Cooperative and Seminole Electric Cooperative, Inc.:

2012 2011

Beginning Balance $ 521,734 $ 383,887

Claims Incurred 3,283,711 3,696,002

Claims Paid (3,415,100) (3,558,155)

Ending Balance $ 390,345 $ 521,734

Note 11 - Deferred Charges and Credits

A schedule of deferred charges and credits are as follows:

AmortizationDeferred charges are amortized over periods of one or more years.

2012 2011

Purchased Power Cost $ 228,823,441 $ 228,015,257

Accounts Payable - Power Cost, December 31 $ 19,594,682 $ 17,689,068

Patronage Capital Assigned $ 2,052,289 $ 5,068,962

Patronage Capital, December 31 $ 39,699,689 $ 37,647,400

2012 2011

Deferred Charges

Unamortized:

Dues $ 0 $ 75,615

Deposits on Sales and Use Tax 171,193 202,314

Other 22,974 47,387

Total Deferred Charges $ 194,167 $ 325,316

Deferred Credits

Unclaimed Capital Credits $ 2,083,362 $ 1,898,861

Customer Advances for Construction 4,313,981 3,538,401

Other Deferred Amounts 291,704 232,332

Customer Benevolent Fund 122,805 119,945

Total Deferred Credits $ 6,811,852 $ 5,789,539


Discount Rates

RUS Loans:The RUS variable rate loans are discounted at the RUS insured loan rates as of January 1, 2013, for the corresponding maturity date. The maturity dates range from 1 year to 29 years and the rates range from 0.25% to 3.125%.

FFB Loans:The FFB loans are discounted at the Treasury rates as of January 1, 2013 for the corresponding maturity dates. The maturity dates range from 5 to 30 years and the rates range from 0.81% to 2.67%.

CFC Loans:The CFC loans are fixed rate loans discounted at December 31, 2012, CFC fixed rate using corresponding maturity dates for each loan. The maturity dates range from 3 to 27 years and the rates range from 2.45% to 5.50%.

CoBank Loans:The CoBank loans are variable rate loans discounted at the variable rate as of December 31, 2012. The maturity dates range from 8 to 26 years and the variable rate was 2.96%.

CFC Capital Term Certificates (CTC’s):The Loan CTC’s are discounted based on the corresponding maturity dates of the CFC long-term fixed rates. The rates range from 3.85% to 5.60%.

The subscription CTC’s were discounted using the corresponding interest rates for the years remaining on the CTC ranging from 3.35% to 5.45%.

CFC Member Capital Security:The CFC member capital security is discounted at the 30 year Treasury bond rate of 3.15%.

Note 13 - ContingencyThe Cooperative has been identified as a potentially responsible party in a transformer superfund site. While it is not possible to predict the outcome of this matter, its resolution is not expected to have a material effect on the accompanying financial state-ments.

Notes to Financial Statements (concluded) December 31,2012

Note 12 -Financial Instruments

In accordance with ASC 825, Financial Instruments, the following is a summary of the book and current values of the Coopera-tive’s financial instruments:

Financial Instruments Book Value Current Value

RUS Long-term Debt $ 181,780,916 $ 217,539,103

FFB Long-term Debt 64,904,894 98,233,289

CFC Long-term Debt 55,917,416 58,060,497

CoBank Long-term Debt 37,739,545 31,855,952

CFC Subscription Capital Term Certificates and

Interest-bearing Loan Capital Term Certificates 2,373,411 2,099,710

CFC Loan Capital Term Certificates 865,945 546,541

CFC Member Capital Security 100,000 187,584

Lines of Credit 24,669,817 24,669,817

“History cannot give us a program for the future, but it can give us a fuller understanding of ourselves,

and of our common humanity, so that we can bet ter face the future."

– Robert Penn Warren

Documents

2012 Annual Report