WEST CENTRAL AG SERVICES - Microsoft · 4334 18th Avenue S. Ste 101 Fargo, ND 58103-7414 Phone: 701.237.6022 Toll Free: 888.237.6022 Fax: 701.280.1495 widmerroelcpa.com Member of

WEST CENTRAL AG SERVICES

ULEN, MINNESOTA

FINANCIAL STATEMENTS DECEMBER 31, 2019 AND 2018

ANNUAL MEMBERS’ MEETING

MARCH 19, 2020

OFFICERS AND DIRECTORS

Duane Brendemuhl . . . . . . . . . . . . . . . . . . . . .President

Kim Syverson . . . . . . . . . . . . . . . . . . . . Vice President

Brian Olek. . . . . . . . . . . . . . . . . . . . . . . . . . . .Secretary

Dwight Heitman . . . . . . . . . . Director Daryl Moore . . . . . . . . . . . Director

Evan Skaurud . . . . . . . . . . . Director Jim Amundson . . . . . . . . . . Director

Robert Braseth . . . . . . . . . . . Director Scott Tollefson . . . . . . . . . .Director

4334 18th Avenue S.

Ste 101

Fargo, ND 58103-7414

Phone: 701.237.6022

Toll Free: 888.237.6022

Fax: 701.280.1495

widmerroelcpa.com

Member of

1

INDEPENDENT AUDITOR’S REPORT Board of Directors West Central Ag Services Ulen, Minnesota We have audited the accompanying financial statements of West Central Ag Services (a Cooperative), which comprise the balance sheets as of December 31, 2019 and 2018, and the related statements of operations, changes in patrons’ equity, and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management 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 Responsibility Our 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. 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 effectiveness 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 significant 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. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of West Central Ag Services as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

2

Change in Accounting Principle As discussed in Note 1 to the financial statements, the cooperative has adopted the provisions of FASB Accounting Standards Codification 606, Revenue from Contracts with Customers, as of Jan 1, 2019 there will be no cumulative effect needed to be recorded in patrons’ equity. Our opinion is not modified with respect to this matter.

Fargo, North Dakota March 11, 2020


BALANCE SHEETS

DECEMBER 31, 2019 AND 2018

ASSETS 2019 2018

CURRENT ASSETS

Cash and cash equivalents

Cash on hand and in banks $ 14,264,188 $ 2,578,274

Money market mutual fund 17,443,975 -

31,708,163 2,578,274

Receivables

Trade accounts receivable, net of allowances 1,281,134 6,300,729

Grain in transit, net of advances 876,127 3,838,751

Futures and options 535,034 376,069

Patron advances 6,510,993 6,655,057

Other receivables 2,335,743 2,029,422

11,539,031 19,200,028

Inventory

Grain inventory, at local market 51,395,703 75,050,980

Merchandise inventories, at net realizable value,

principally first in, first out, or market 90,578,481 89,334,812

141,974,184 164,385,792

Prepaid expenses

Prepaid income taxes 287,343 554,883

Prepaid expense 438,476 436,216

725,819 991,099

Total current assets 185,947,197 187,155,193

OTHER ASSETS

Investment in other cooperatives 25,811,395 25,851,579

Investment in Alton Agronomy, LLC 696,657 696,657

Investment in Central Plains Ag Services, LLC 13,170,956 13,344,918

39,679,008 39,893,154

PROPERTY, PLANT AND EQUIPMENT, at cost

Land 4,081,629 4,081,629

Buildings and equipment 165,921,745 163,879,795

New construction 44,518 183,143

170,047,892 168,144,567

Accumulated depreciation (74,111,977) (65,734,882)

95,935,915 102,409,685

Total assets $ 321,562,120 $ 329,458,032

See Notes to Financial Statements 3

LIABILITIES AND PATRONS' EQUITY 2019 2018

CURRENT LIABILITIES

Seasonal loan payable

Outstanding drafts in excess seasonal loan account $ 6,355,729 $ 18,259,074

Notes and contracts payable

Deferred payment contracts 14,830,956 23,738,130Grain payable 64,359,702 64,881,542

Current portion of long-term liabilities 2,352,515 2,341,001

81,543,173 90,960,673

Accounts payable

Accounts payable 22,077,416 8,669,051

Patrons' credit balances 29,231,948 28,257,568

Patronage dividends payable 2,646,914 3,993,246

Other accounts payable 474,306 2,009,799

54,430,584 42,929,664

Taxes and expenses accrued or payable

Other accrued expenses 112,000 112,000

Grain, sales and payroll taxes payable 691,871 751,690

Accrued interest 350,284 450,181

Property tax payable 113,413 113,429

1,267,568 1,427,300

Total current liabilities 143,597,054 153,576,711

LONG-TERM LIABILITIES

Long-term debt 15,000,000 15,000,000

Long-term capital leases 19,260,145 21,785,961

Deferred tax liability 2,166,624 1,577,849

36,426,769 38,363,810

Less current maturities listed above (2,352,515) (2,341,001)

Total long-term liabilities 34,074,254 36,022,809

Total liabilities 177,671,308 189,599,520

PATRONS' EQUITY

Local patronage credits 42,712,016 41,891,334

Local patrons' reserve 343,845 343,845

Regional patronage credits 21,325,132 21,828,998

Unallocated capital reserve 79,509,819 75,794,335

Total patrons' equity 143,890,812 139,858,512

$ 321,562,120 $ 329,458,032


STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

See Noted to Financial Statements 4

2019 2018

SALES

Grain $ 318,772,879 $ 327,901,727

Merchandise 130,099,343 143,242,298

Total sales 448,872,222 471,144,025

COST OF SALES

Grain 302,109,807 311,250,274

Merchandise 104,860,205 114,954,628

Total cost of sales 406,970,012 426,204,902

Gross profit on sales 41,902,210 44,939,123

OTHER PROCEEDS

Freight and delivery income 2,430,517 2,729,309

Patron and other services 1,982,720 2,598,180

Storage and handling 1,928,552 1,076,331

Drying income 1,685,038 2,705,548

Partnership income 735,944 1,370,487

Finance charges and interest 278,859 286,148

Gain on disposal of property, plant and equipment 193,318 2,904,974

Total other proceeds 9,234,948 13,670,977

Gross operating proceeds 51,137,158 58,610,100

EXPENSES

Operating expenses 29,923,440 30,599,176

Depreciation 9,209,359 8,845,333

Interest 2,060,462 2,718,375

Total expenses 41,193,261 42,162,884

LOCAL NET INCOME 9,943,897 16,447,216

PATRONAGE FROM OTHER COOPERATIVES, net 2,637,705 2,524,548

NET INCOME BEFORE INCOME TAX 12,581,602 18,971,764

INCOME TAX PROVISION 1,294,260 1,142,523

NET INCOME $ 11,287,342 $ 17,829,241

DISTRIBUTION OF NET INCOME

Patronage dividends payable $ 2,646,914 $ 3,993,246

Local patronage credits 4,916,846 7,416,031

Unallocated capital reserve 3,723,582 6,419,964

$ 11,287,342 $ 17,829,241


STATEMENTS OF CHANGES IN PATRONS’ EQUITY



Regional

Patron Capital Patron Capital

Credits Reserve Credits Reserve Total

Balance, December 31, 2017 $ 41,729,292 $ 343,845 $ 22,407,779 $ 69,374,371 $ 133,855,287

Adjustment to prior year

estimated patronage allocation (962) - - - (962)

Redemption of patrons' equity (7,253,027) - (578,781) - (7,831,808)

Cash patronage dividends (3,993,246) - - - (3,993,246)

Net income 11,409,277 - - 6,419,964 17,829,241

Balance, December 31, 2018 41,891,334 343,845 21,828,998 75,794,335 139,858,512

Adjustment to prior year

estimated patronage allocation 4,018 - (38) (8,098) (4,118)

Equity cancelations net of

accounts receivable off-sets (652,666) - (162,525) - (815,191)

Redemption of patrons' equity (3,447,516) - (341,303) - (3,788,819)

Cash patronage dividends (2,646,914) - - - (2,646,914)

Net income 7,563,760 - - 3,723,582 11,287,342

Balance, December 31, 2019 $ 42,712,016 $ 343,845 $ 21,325,132 $ 79,509,819 $ 143,890,812

Local


STATEMENTS OF CASH FLOWS


See Notes to Financial Statements

(Continued)

6

2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES

Net income $ 11,287,342 $ 17,829,241

Adjustments to reconcile net income to net cash

provided by (used in) operating activities

Depreciation 9,209,359 8,845,333

Patronage refunds received in the

form of allocations, net (227,614) (260,559)

Gain on disposal of property, plant and equipment (193,318) (2,904,974)

Partnership income 735,944 (1,370,487)

Allocation adjustments and equity cancelations (4,118) (1,519)

Changes in assets and liabilities

Receivables 6,845,806 9,703,310

Inventory 22,411,608 (9,113,154)

Prepaid expenses 265,280 (167,207)

Notes and contracts payable (9,429,014) 2,661,488

Accounts payable 12,847,252 (4,112,445)

Taxes and expenses accrued or payable (159,732) (955,769)

Deferred tax liability 588,775 406,204

Net cash provided by operating activities 54,177,570 20,559,462

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from retirement of equity

held in other cooperatives 267,798 153,761

Distributions received from partnerships (561,982) 1,403,734

Proceeds from disposal of property, plant and equipment (452,577) 5,132,560

Capital expenditures (2,089,694) (6,641,726)

Net cash provided by (used in) investing activities (2,836,455) 48,329

CASH FLOWS FROM FINANCING ACTIVITIES

Changes in seasonal loan, net (11,903,345) (8,733,487)

Increase in long-term debt 112,508,190 102,663,524

Payments on long-term debt (115,034,006) (112,950,408)

Cash portion of patronage allocation, prior year (3,993,246) (4,114,878)

Redemption of patrons' equity (3,788,819) (7,831,251)

Net cash used in financing activities (22,211,226) (30,966,500)

NET CHANGE IN CASH AND CASH EQUIVALENTS 29,129,889 (10,358,709)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 2,578,274 12,936,983

CASH AND CASH EQUIVALENTS AT END OF YEAR $ 31,708,163 $ 2,578,274


STATEMENTS OF CASH FLOWS



2019 2018

SUPPLEMENTAL DISCLOSURE OF CASH FLOW

INFORMATIONCash paid for interest $ 2,160,359 $ 3,381,356

Cash paid for income taxes, net $ 437,945 $ 980,000

SUPPLEMENTAL DISCLOSURE OF

NON-CASH TRANSACTIONSPatronage dividends payable $ 2,646,914 $ 3,993,246

Debt acquisition of property and equipment $ - $ 1,017,486

Cancellation of patron equity $ 815,191 $ -


NOTES TO FINANCIAL STATEMENTS


(Continued) 8

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

West Central Ag Services, a Minnesota corporation, operates as an agricultural Cooperative. The Cooperative is

engaged in purchasing and marketing of grains and sales of crop nutrients, crop protection products and other farm

supply products to individuals and businesses (principally patrons) located in its trade area. The Cooperative has

facilities in the central region of western Minnesota and the central region of eastern North Dakota; the

Cooperative’s headquarters are in Ulen, Minnesota.

Cash and Cash Equivalents

For the purpose of cash flows, the Cooperative considers all highly liquid investments with a maturity of three

months or less when purchased to be “cash equivalents”.

Money Market Mutual Fund

The Cooperative’s money market mutual funds consist of U.S. treasuries and bonds, agency debentures, corporate

bonds and other similar assets that have a readily determinable fair market value. Since the Company does not

intend to hold these securities to maturity and does not intend to sell them in the near term, these securities are

classified as available for sale and accordingly, are valued based on unadjusted quoted prices in active market for

identical assets, with realized gains and loss on all marketable securities charged or credited to current earnings.

Accounts Receivable

Accounts receivable are stated at the contractual amount billed to the customer plus any accrued and unpaid finance

charges. Customer account balances that do not have special financing terms with invoices dated over 90 days old

are considered past due. Interest continues to accrue on past due accounts until the age of any invoices exceeds 180

days at which time the account is placed on nonaccrual status. When a customer balance is placed on nonaccrual

status, the Cooperative reverses any accrued but uncollected interest previously recognized through interest income.

In addition, the Cooperative discontinues the accrual of interest and does not resume these accruals unless the

account first ceases to be classified as past due and then subsequently requalifies for accrual status.

The Cooperative reduces the carrying amount of accounts receivable by an allowance for bad debts that reflects its

best estimate of the amounts that will not be collected. The Cooperative individually reviews each customer balance

where all or a portion of the balance exceeds 90 days from the invoice date. Based on the assessment of the

customer’s current creditworthiness, the Cooperative estimates the portion, if any, of the balance that will not be

collected.

Inventory

Grain inventory and stored grain outstanding are priced at local market, including adjustments to market for open

sales and purchase contracts. Fertilizer inventory is priced at local market, including adjustments to market for

open sales and purchase contracts. Merchandise inventory is priced at net realizable value (first-in, first-out method)

or market.




(Continued) 9

The Cooperative performed a physical measurement and count of all station grain and merchandise inventory for

the periods ended December 31, 2019 and 2018. Variances with perpetual inventory records were determined due

to normal operations and appropriate adjustments were approved for recognition in the current period.

Property and Equipment

Property and equipment are stated at cost. Additions, renewals and betterments are capitalized, whereas,

expenditures for maintenance and repairs are charged to expense. The cost and related accumulated depreciation

of assets retired or sold are removed from the appropriate asset and depreciation accounts and the resulting gain or

loss is reflected in income.

It is the policy of the Cooperative to evaluate for capitalization all fixed asset purchases over $5,000 and to provide

depreciation and amortization over the estimated useful life of the individual asset, ranging from 5 to 40 years.

Investments

Cash paid investments are stated at cost and investments incurred from patronage dividends are recorded as written

notices of allocation received by the Cooperative.

The patronage earnings and/or losses from other Cooperatives vary substantially from period to period, and interim

operating results are not available. Accordingly, patronage allocations of earnings and/or losses for which

notifications have not been received cannot be reasonably determined.

Patronage allocations are credited to patronage refunds received and are not considered in determining local net

income.

The Cooperative believes it is not practicable to estimate the fair value of the securities of these Cooperatives

without incurring excessive costs because there is no established market for the securities and it is inappropriate to

estimate future cash flows which are largely dependent on future patronage earnings of these Cooperatives.

Grain Payable and Deferred Payment Contracts

Grain payable includes contracted grain payable and delayed pricing contract grain. Contracted grain payables

represent grain that title has passed to the Cooperative through receipt of grain under a fixed price, hedge to arrive

or basis fixed agreement. Delayed pricing contracts represent grain that title has passed to the Cooperative through

receipt of grain with the price to be determined at a later date. Deferred payment contracts represent grain that title

has passed to the Cooperative through receipt of grain under a contract with the payment due at a specified future

date.

Revenue Recognition and Performance Obligations

The Cooperative provides a wide variety of products and services to its patrons, commission companies and others.

Product sales include agricultural inputs such as farm supplies and agronomy products, to agricultural outputs that

include grain. The Cooperative derives its revenues through origination and marketing of grain, including activities

conducted at rail and truck terminals; through retail and wholesale sales of agronomy products and retail sales of

farm supplies.




(Continued) 10

Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied,

which generally occurs when control of the goods has transferred to customers. For the majority of the

Cooperative’s contracts with customers, control transfers to customers at a point-in-time when goods and or services

have been delivered, as that is generally when legal title, physical possession and risks and rewards of goods and or

services transfer to the customer.

Revenue is recognized as the transaction price the Cooperative expects to be entitled to in exchange for transferring

goods or services to a customer, excluding amounts collected on behalf of third parties. The Cooperative follows a

policy of recognizing revenue at the point-in-time that the Cooperative satisfies its performance obligation by

transferring control of a product or service to a customer in accordance with the underlying contract. The majority

of the revenues are attributable to forward commodity sales contracts, which are considered to be physically settled

derivatives under ASC 815, Derivatives and Hedging (Topic 815). For physically settled derivative sales contracts

that are outside the scope of the revenue guidance, the Cooperative recognize revenue when control of the inventory

is transferred within the meaning of ASC Topic 606 as adopted in 2019.

The amount of revenues recognized during the year ended December 31, 2019, for performance obligations that

were fully satisfied in previous periods was not material, there will be no cumulative effect needed to be recorded

in patrons’ equity.

Income Taxes

The effective income tax rate for fiscal 2019 and 2018 is less than the statutory rate, primarily due to the issuance

of patronage refunds, which are deductible for tax purposes but treated as a distribution for financial reporting

purposes. Statutory rates are further reduced by provisions available under IRS Section 199A. The Cooperative

files nonexempt federal and state income tax returns wherein it is subject to tax on income from non-patronage

sources and undistributed patronage sourced income.

Income tax expense is primarily the tax calculated for the current period. Uncertain tax positions are recorded in a

threshold evaluation and measurement process. Management has determined that the Cooperative does not have

any uncertain tax positions.

Commodity Derivatives

The Cooperative uses derivative financial instruments including forward contracts and exchange traded commodity

futures and options contracts to manage its exposure to market fluctuations in commodity values. These derivatives

are not designated as hedging instruments under FASB Codification subtopic 815-20 and are recorded through cost

of sales and included in net income. Futures and options used for hedging are traded through regulated commodity

exchanges. The Cooperative’s use of commodity contracts and the corresponding freight bookings is a hedge to

reduce the risks associated with adverse price movements and market volatility. In its normal course of operations,

the Cooperative has exposure to commodity inventory values that may not be fully hedged, due, in part, to the lack

of derivative financial instruments for certain commodities. The effect of derivative instruments are identified as

commodity contracts and are recorded at fair value.

Advertising Costs

Advertising and promotion costs are expensed as incurred. Total advertising costs totaled $75,100 and $75,104 for

the years ended December 31, 2019 and 2018, respectively.




(Continued) 11

Use of Estimates

The 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 reporting period. Actual results could differ from these estimates.

Presentation of Grain Taxes

The State of Minnesota imposes a grain tax on all of the Cooperative’s purchases from nonexempt producers. The

Cooperative withholds that grain tax from customers and remits the entire amount to the State. The Cooperative’s

accounting policy is to exclude the tax collected and remitted to the State from revenues and cost of sales.

Reclassification of Financial Statement Presentation

Certain reclassifications may have been made to the 2018 financial statements to conform to 2019 financial

statement presentation. Such reclassifications had no effect on net income as previously reported.

NOTE 2 – CONCENTRATION OF CREDIT RISK

Due to the nature of its business operations, the Cooperative grants unsecured credit to its patrons and customers,

substantially all of who are local residents engaged in agri-business. In addition, as a member affiliate, the

Cooperative markets a substantial amount of its commodities to CHS, Inc.

Other financial instruments that potentially subject the Cooperative to concentration of credit risk consist principally

of local bank deposits in excess of federally insured limits, the uninsured deposits in CoBank and hedging accounts.

The Cooperative is at risk for funds in excess of the FDIC insurance limits with regard to financial institutions in

the amount of $19,140,234 and $185,850 as of December 31, 2019 and 2018, respectively.

NOTE 3 – MONEY MARKET MUTUAL FUND

A financial asset’s classification within the fair value hierarchy is determined based on the lowest level input that

is significant to the fair value measurement. Level 1 is quoted market prices in active markets, level 2 is significant

other observable inputs and level 3 is significant unobservable inputs.

Following is a description of the valuation methodologies used for assets measure at fair value. There have been

no changes in the methodologies used at December 31, 2019 and 2018.

Money market funds are the money held in money market liquidity funds whose value is based on unadjusted quoted

prices in active exchanges and are classified as level 1 inputs. Changes in fair market value of these marketable

securities are recognized in the Cooperative’s statement of operations. Money market funds in Invesco Premier

U.S. Government Money Portfolio are stated at fair value. The Cooperative owns shares of IUGXX. The fair

values for December 31, 2019 is 1.00 per share.




12

Invesco Premier U.S. Government Money Portfolio – Valued at the end of the trading day market value. The values,

as provided by the NASDAQ stock exchange, is an unadjusted quoted price for identical assets and liabilities.

Unrealized Unrealized Fair

Cost Gains Losses Value

Invesco Premier U.S. GovernmentIUGXX $ 17,433,975 $ - $ - $ 17,433,975

2019

Management evaluates securities for other-than-temporary impairment on an annual basis and more frequently

when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the

extent to which the fair value has been less than cost and the intent and ability of the Cooperative to retain its

investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. As

management has the ability to hold investments for the foreseeable future if classified as available-for-sale, no

declines are deemed other than temporary.

NOTE 4 – TRADE ACCOUNTS RECEIVABLE

The aging classification of trade accounts receivable is as follows as of December 31:

2019 2018

Current $ 3,075,557 $ 8,006,822

31 to 60 days 18,395 45,784

61 to 90 days 39,846 25,097

91 to 120 days 119,641 66,299

121 to 365 days 274,816 227,838

Over 1 year 4,879 60,889

3,533,134 8,432,729

Allowance for doubtful accounts (2,252,000) (2,132,000)

$ 1,281,134 $ 6,300,729




13

NOTE 5 – GRAIN INVENTORY AND STORAGE OBLIGATIONS

Stored grain inventory is deducted from gross inventories to reflect the net value of the grain inventory owned by

the Cooperative. The Cooperative acts as warehouseman insofar as the stored inventory is concerned and its only

liability is to deliver the warehouse receipted grain when it is called for. A summary of grain inventory, stored

grain liability and alternative disclosure of trading activities is presented as follows as of December 31:

2019

Warehouse Receipt and

Total Grain Inventory Open Stored Grain Cash Grain Position

Amount Bu./Cwt. Amount Bu./Cwt. Amount Bu./Cwt.

Spring wheat $ 21,677,234 3,866,232 $ - - $ 21,677,234 3,866,232

Soybeans 19,252,949 2,280,811 - - 19,252,949 2,280,811

Corn 14,420,522 4,267,434 - - 14,420,522 4,267,434

Commodity contracts (3,955,002) - - - (3,955,002) -

$ 51,395,703 $ - $ 51,395,703

2018

Warehouse Receipt and

Total Grain Inventory Open Stored Grain Cash Grain Position

Amount Bu./Cwt. Amount Bu./Cwt. Amount Bu./Cwt.

Spring wheat $ 14,044,769 2,765,531 $ - - $ 14,044,769 2,765,531

Soybeans 38,091,147 4,884,963 - - 38,091,147 4,884,963

Corn 25,621,511 7,889,204 - - 25,621,511 7,889,204

Commodity contracts (2,706,447) - - - (2,706,447) -

$ 75,050,980 $ - $ 75,050,980

NOTE 6 – MERCHANDISE INVENTORY

The major classifications of merchandise inventory on hand were as follows as of December 31:

2019 2018

Prepaid merchandise $ 22,146,138 $ 37,075,412

Chemicals 26,338,298 20,606,985

Dry fertilizer 27,296,476 14,426,576

Seed 10,636,078 12,832,515

Liquid fertilizer 2,810,172 2,536,741

Nutritionals 1,123,744 1,260,906

Other merchandise 121,042 454,033

Tires and tubes 92,000 95,783

Oil and grease 11,675 24,537

Batteries and antifreeze 2,858 21,324

$ 90,578,481 $ 89,334,812




(Continued) 14

NOTE 7 – OTHER ASSETS INVESTMENTS IN OTHER COOPERATIVES

The principal investments held in other Cooperatives, consisting of allocated equities and cash investments, were

as follows as of December 31:

2019 2018

CHS, Inc. $ 21,027,122 $ 21,263,270

Land O'Lakes, Inc. 4,101,327 3,925,873

All others 682,946 662,436

$ 25,811,395 $ 25,851,579

NOTE 8 – OTHER ASSETS INVESTMENTS IN PARTNERSHIPS

The principal other assets held by the Cooperative consists of investments in other companies.

The Cooperative holds a 50% interest in Central Plains Ag Services, LLC, a 16.67% interest in Alton Agronomy,

LLC and an immaterial percentage of ownership in all other investments. Due to the Cooperative’s ability to

exercise significant influence as a result of ongoing patron contact and relationships, these investments are

accounted for under the equity method of accounting. The Cooperative recognized $600,481 and $1,236,753 from

Central Plains Ag, LLC and $135,463 and $133,734 from Alton Agronomy, LLC for the years ended December 31,

2019 and 2018, respectively.

The Cooperative’s investment in Central Plains Ag Services, LLC is reflected on the accompanying balance sheets

as investments in LLC’s and on the accompanying statements of operations as partnership income. The following

is a summary of the financial position and results of operations for Central Plains Ag Services, LLC for the years

ended December 31:

2019 2018

Current assets $ 62,280,702 $ 87,157,490

Noncurrent assets 26,504,352 29,719,734

$ 88,785,054 $ 116,877,224

Current liabilities $ 54,184,580 $ 81,662,165

Noncurrent liabilities 8,258,563 8,525,224

Equity 26,341,911 26,689,835

$ 88,785,054 $ 116,877,224

The Cooperative's 50% interest in equity is

reflected on the balance sheets as follows: $ 13,170,956 $ 13,344,918




15

2019 2018

Total revenue $ 156,954,919 $ 123,602,658

Total expenses 155,753,958 121,129,152

Net income $ 1,200,961 $ 2,473,506

The Cooperative's 50% interest in net income is

reflected on the statements of operations as follows: $ 600,481 $ 1,236,753

NOTE 9 – RELATED PARTY TRANSACTIONS

The Cooperative is a membership cooperative with one member, one vote. The Board of Directors, each serving

three year staggered terms, is elected from among its membership each year at the patrons’ annual meeting. Director

compensation is established by the Board and consists of $500 per month and $200 per meeting for both its President

and Secretary and $150 for all remaining directors. The Cooperative purchases commodities and sells products and

services to members of the Board of Directors in the ordinary course of business.

Transactions between West Central Ag Services and related parties were principally the result of the purchase of

grain and the sale of agronomy products in the ordinary course of business with the Board of Directors. Related

party transactions for the years ended December 31, 2019 and 2018 were as follows, net:

2019 2018

Sales to $ 15,597,719 $ 8,685,650 Purchases from 897,570 16,789,972

Related party receivables and payables resulting from transactions in the ordinary course of business as of December

31, 2019 and 2018 were as follows:

2019 2018

Due to $ 2,923,645 $ 4,248,716 Due from 2,676 172,960




(Continued) 16

NOTE 10 – NOTES PAYABLE AND LONG-TERM DEBT

The Cooperative was indebted on seasonal loans and long-term financing on December 31, 2019 and 2018 as

follows:

The Cooperative has seasonal loan commitment from CoBank which matures on July 1st of each year the

commitments is in effect. Interest is payable at a variable rate, currently 3.64%, determined by CoBank on any

outstanding balance. Advances on the seasonal loan shall be limited to $50,000,000. The loan is secured by all

accounts receivable, inventories, personal property and fixtures owned by the Cooperative. The balances

outstanding on the seasonal loan as of December 31, 2019 and 2018 were $-0- and $17,406,119, respectively.

Under terms of the special term loan agreement with CoBank the Cooperative was granted a term-loan commitment

to be repaid at final maturity on June 20, 2021. Interest is payable at a variable rate, currently 3.89%, determined

by CoBank. Advances on the seasonal loan shall be limited to $15,000,000. The Cooperative has a clearing account

utilized for the processing of cleared checks. This account is utilized for short-term funds before transactions are

processed and drawn against the CoBank term and seasonal loans. The CoBank special term loan is secured by a

first real estate mortgage covering all real property and a security interest in all personal property and fixtures owned

by the Cooperative. The balances outstanding on the term loan account as of December 31, 2019 and 2018 were

$15,000,000 and $15,000,000, respectively.

Final

Assigned as Interest Maturity

Payee Collateral Rate Date 2019 2018

CoBank Security 4.61% 6/20/2021 15,000,000 15,000,000

Agreement

(see above)

While the loan agreement is in effect, the Cooperative has agreed to comply with (among others) the following

conditions placed on them by CoBank:

Mergers and Acquisitions

The Cooperative will not Merge or consolidate with any other entity or acquire all or a material part of the assets of

any other person or entity, or form or create any new Subsidiary, or commence operations under any other name,

organization, or entity, including any joint venture.

Transfer of Assets

The Cooperative shall not sell, transfer, lease, or otherwise dispose of any of its assets, except: (a) in the ordinary

course of business; and (b) the sale, transfer or disposal of any obsolete or worn-out assets that are no longer

necessary or required in the conduct of the Borrower's business.

Change in Business

The Cooperative shall not engage in any business activities or operations substantially different from or unrelated

to present business activities or operations.




17

Use of Proceeds

The Cooperative shall not use the proceeds of any loan made by CoBank, whether directly or indirectly, and whether

immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of

the Board) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund

indebtedness originally incurred for such purpose.

Working Capital

The Borrower will have at the end of each period for which financial statements are required to be furnished

pursuant to this Agreement an excess of consolidated current assets over consolidated current liabilities of not less

than $15,000,000, except that in determining consolidated current assets, any amount available under any revolving

term promissory note with Lender hereunder (less the amount that would be considered a current liability if fully

advanced) may be included (all as determined in accordance with the Accounting Standards).

Local Net Worth

The Borrower will have at the end of each period for which financial statements are required to be furnished

pursuant to this Agreement an excess of consolidated total assets over consolidated total liabilities, minus

investments in other cooperatives and joint ventures, of not less than $82,000,000 (the "Minimum Local Net Worth

Requirement"). The Minimum Local Net Worth Requirement shall be increased, on a cumulative basis, at the end

of fiscal year 2018 of the Borrower and at the end of each fiscal year of the Borrower thereafter by an amount equal

to 30.00% of the Borrower's net income, if positive, as calculated as of the end of such fiscal year (all as determined

in accordance with the Accounting Standards). The Minimum Local Net Worth Requirement shall not be decreased

if the Borrower has a net loss at the end of any fiscal year of the Borrower. The Cooperative was in compliance

with all covenants for the fiscal year ended 2019 and all other periods for which the financial statements were

required to be furnished.

Long-term debt maturities are as follows:

2021 $ 15,000,000




18

NOTE 11 – LONG-TERM CAPITAL LEASES

Property held under capital lease, included with owned property on the balance sheets, consists of the following,

net of insurance proceeds received as of December 31:

2019 2018

Case Floaters $ 2,430,152 $ 2,430,152

Peterbuilt Tender Trucks 1,415,000 1,415,000

Timpte Trailers 508,550 508,550

Freightliners 2,218,397 2,218,397

Ulen storage expansion 4,853,327 4,853,327

Beltrami storage expansion 16,897,180 16,897,180

28,322,606 28,322,606

Accumulated depreciation (7,282,602) (5,403,094)

Equipment under capital lease, net $ 21,040,004 $ 22,919,512

Capital lease obligations consist of the following as of December 31:

Non-cancelable equipment leases expiring through May of 2028, payable in installments aggregating approximately

$2,352,515, annually, including imputed interest at various rates ranging from 3.25% to 4.79%, secured by

equipment under lease.

2019 2018

Total capital lease obligations $ 19,260,145 $ 21,785,961

Current portion of capital lease (2,352,515) (2,341,001)

Long-term capital lease obligations, net $ 16,907,630 $ 19,444,960

The following is a schedule of future lease payments under capital lease as of the periods ending December 31:

2020 $ 2,925,105

2021 2,641,717

2022 2,464,130

2023 2,394,714

2024 2,171,807

Thereafter 9,617,378

22,214,851

Amount representing interest (2,954,706)

19,260,145

Current portion (2,352,515)

Long-term lease obligations, net $ 16,907,630




19

NOTE 12 – INCOME TAXES AND DEFERRED TAX LIABILITY

The provision for income taxes consisted of the following at December 31:

2019 2018

Currently payable $ 477,635 $ 736,319

Tax effect of timing differences 816,625 406,204

Income tax provision $ 1,294,260 $ 1,142,523

The income tax provision for the years ended December 31, 2019 and 2018, was reduced as a result of the

Cooperative utilizing certain deductions available to Cooperative’s pursuant to the internal revenue code.

The deferred tax liability resulting from temporary differences consisted of the following at December 31:

2019 2018

Deferred tax liability

Accelerated tax depreciation $ 1,447,899 $ 1,115,101

Allowance for doubtful accounts (360,320) (255,840)

Accelerated partnership tax depreciation 1,188,645 796,588

Section 263a adjustment (109,600) (78,000)

Total deferred tax liability $ 2,166,624 $ 1,577,849

NOTE 13 – PATRONAGE DIVIDENDS AND PATRONAGE CREDITS

The Board of Directors determines annually the cash dividends to be paid to the patrons from current period net

income. The balance of patronage credits represents accumulated patronage dividends allocated to patrons but not

paid in cash.

NOTE 14 – RETIREMENT PLANS

The Cooperative participates in the defined and cash balance multiple employer pension plans for all employees of

member Cooperatives of CHS, Inc. All employees who work over 1,000 hours per year and have at least one year

of service are covered by the plan. The plan is greater than 120% funded as reported on the Annual Report of

Employee Benefit Plan, IRS form 5500. Contributions made by the Cooperative are determined on an actuarial

basis. Benefits are funded by an unallocated group annuity contract. Employer contributions to the plan for the

years ended December 31, 2019 and 2018 totaled $1,087,434 and $1,065,742, respectively.

The Cooperative provides a 401(k) plan for its employees. All employees who work over 1,000 hours per year, are

at least 21 years of age and have at least 1,000 hours of service are eligible to participate in the plan. The

Cooperative matches employee contributions up to 4% for each individual that participates in the plan. For the

years ended December 31, 2019 and 2018, contributions made by the Cooperative totaled $402,208 and $483,451,

respectively.




20

NOTE 15 – COMMITMENT AND CONTINGENCIES

Any gain or loss that may be realized from weight, grade or quality variations on open grain sales, purchase and

hedging contracts are not necessarily reflected in these financial statements. The Cooperative is contingently liable

for any weight, grade or quality deficiencies that may occur at settlement of stored grain obligations and delayed

pricing grain contracts payable.

The Cooperative is party to various leases classified as operating leases. Rents paid for sites, storage and equipment

totaled $209,930 and $686,840 for the years ended December 31, 2019 and 2018, respectively.

Future minimum lease payments on such operating leases are as follows:

2020 $ 44,300

2021 44,300

2022 7,300

$ 95,900

The Cooperative is subject to federal and state regulations regarding the care, delivery and containment of

petroleum, agronomy and other products the Cooperative handles or has handled. The Cooperative is contingently

liable for any cleanup costs resulting from contamination which could arise from the handling, delivery and

containment of these products.

NOTE 16 – GRAIN RECEIPTS AND SALES IN UNITS

The major commodities handled by the Cooperative were as follows for the years ended December 31:

2019 2018

Units received

Wheat Bu. 13,495,167 14,218,786

Soybeans Bu. 14,483,494 14,195,718

Corn Bu. 21,655,712 36,722,457

Total 49,634,373 65,136,961

2019 2018

Units sold

Wheat Bu. 12,394,466 14,755,762

Soybeans Bu. 17,087,646 9,692,385

Corn Bu. 25,277,482 41,253,830

Total 54,759,594 65,701,977




(Continued) 21

NOTE 17 – FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value estimates, methods, and assumptions are set forth below for the Cooperative’s financial instruments. The

hierarchy includes three levels and is based upon the valuation techniques used to measure assets and liabilities.

This note contains information related to all other fair value notes disclosed in this financial statement. The three

levels are as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Cooperative

has the ability to access at the measurement date. These assets and liabilities include the Cooperative’s exchange

traded derivative contracts and available-for-sale investments.

Level 2: Inputs are other than quoted prices included within Level 1; the inputs are observable for the asset or

liability, either directly or indirectly.

Level 3: Values are generated from unobservable inputs that are supported by little or no market activity and that

are a significant component of the fair value of the assets or liabilities.

The estimated fair values of the Cooperative’s financial instruments were as follows:

Fair Value Level 1 Level 2 Level 3

Financial assets

Cash on hand and in banks $ 1,437,522 $ 1,437,522 $ - $ -

CoBank Surplus Funds 12,826,667 12,826,667 - -

Money market mutual funds 17,443,975 17,443,975 - -

Grain and fertilizer inventory 81,502,351 769,500 80,732,851 -

Financial liabilities

Accrued interest payable 350,284 350,284 - -

Delayed price grain payable 52,290,242 - 52,290,242 -

CoBank debt 15,000,000 15,000,000 - -

Long term capital leases 16,907,630 16,907,630 - -

Off-Balance-Sheet Instruments

Commitments to extend credit 2,340,977 - - 2,340,977


Financial assets

Cash on hand and in banks $ 2,392,424 $ 2,392,424 $ - $ -

CHS Capital Surplus Funds 185,850 185,850 - -

Money market mutual funds - - - -

Grain and fertilizer inventory 92,014,297 1,584,538 90,429,759 -

Financial liabilities

Accrued interest payable 450,181 450,181 - - Delayed price grain payable 44,425,652 - 44,425,652 -

CoBank debt 15,000,000 15,000,000 - -

Long term capital leases 19,444,960 19,444,960 - -

Off-Balance-Sheet Instruments

Commitments to extend credit 2,430,356 - - 2,430,356

2019

2018




22

The following methods and assumptions were used by the Cooperative in estimating fair values of financial

instruments as disclosed herein:

Cash on hand and in banks – The carrying amounts of cash and equivalents approximate their fair value.

CoBank Surplus Funds – Deposits in CoBank surplus approximate their fair value.

Money Market Mutual Funds – Valued at the net asset value (“NAV”) of shares held by the plan at year-end.

Mutual funds held by the plan are open-end funds that are registered with the Securities and Exchange Commission.

These funds are required to publish their daily NAV and transact at that price. The money market mutual funds

held by the plan are deemed to be actively traded.

Grain inventory and contracts – Fair values for grain inventory and contracts to purchase and sell grain are based

on local market prices or quoted market prices based on the contracted instrument. Those instruments approximated

fair value.

Accrued interest payable – The carrying amounts of accrued interest payable approximate their fair values.

Delayed price grain payable – Fair values for delayed price grain payable are based on local market prices and

approximate fair value.

CoBank Debt – The carrying amount of short-term borrowings approximates its fair value. Long-term CoBank

borrowings have a variable interest rate, and approximate their fair value.

Long term capital leases – The carrying amount of long term capital leases approximates the fair value.

Off-balance-sheet instruments – Fair values for off-balance-sheet lending commitments are based on fees currently

charged to enter into similar agreements, taking into account the remaining terms of the agreements and the

counterparties’ credit standing.

The carrying value of the Cooperative’s financial instruments, consisting of cash and cash equivalents, receivables,

inventory, prepaid expenses, lines of credit, payables and other obligations, approximates fair value based on the

short-term maturity of these instruments. The carrying value of long-term obligations approximates its fair value

as interest rates approximate market rates.

Limitations – Fair value estimates are made at a specific point in time, based on relevant market information and

information about the financial instrument. These estimates do not reflect any premium or discount that could result

from offering for sale at one time the Cooperative's entire holdings of a particular financial instrument. Because no

market exists for a significant portion of the Cooperative's financial instruments, fair value estimates are based on

judgments regarding future expected loss experience, current economic conditions, risk characteristics of various

financial instruments, and other factors. These estimates are subjective in nature, involve uncertainties and matters

of significant judgment, and therefore cannot be determined with precision. Changes in assumptions could

significantly affect the estimates.

Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the

value of anticipated future business and the value of assets and liabilities that are not considered financial

instruments. Other significant assets and liabilities that are not considered financial assets or liabilities include the

patron advances receivable, patron accounts receivable, other inventories, property plant and equipment and

accounts payable. In addition, the tax ramifications related to the realization of the unrealized gains and losses can

have a significant effect on fair value estimates and have not been considered in many of the estimates.




(Continued) 23

NOTE 18 – FAIR VALUE MEASUREMENTS

In accordance with the Fair Value Measurements Topic of the FASB Accounting Standards Codification (ASC

820), the Fair Value Measurements table represents the Cooperative’s fair value hierarchy for its financial assets

and liabilities measured at fair value on a recurring basis as of the measurement date. Exchange traded futures and

options are valued based on unadjusted quoted prices in active markets and are classified within Level 1 of Fair

Value Measurements. Forward commodity purchase and sales contracts, flat price or basis fixed contracts and rail

freight contracts are adjusted for local inputs and are classified within Level 2 of Fair Value Measurements. The

Cooperative is required to maximize the use of observable inputs and minimize the use of unobservable inputs when

measuring fair value.

The carrying value of the Cooperative’s financial instruments, grain and fertilizer inventory, forward and future

grain contracts and delayed price grain, approximates fair value based on the short-term maturity of these

instruments.

The following table sets forth the level within the fair value hierarchy of the Cooperative’s assets and liabilities at

fair value as of December 31:


Financial assets

Grain inventory $ 55,350,705 $ - $ 55,350,705 $ -

Grain futures contracts 769,500 769,500 - -

Forward grain contracts (4,724,502) - (4,724,502) -

Fertilizer inventory 30,106,648 - 30,106,648 -

$ 81,502,351 $ 769,500 $ 80,732,851 $ -

Financial liabilitiesDelayed price grain $ 52,290,242 $ - $ 52,290,242 $ -

2019


Financial assets

Grain inventory $ 77,757,427 $ - $ 77,757,427 $ -

Grain futures contracts 1,584,538 1,584,538 - -

Forward grain contracts (4,290,985) - (4,290,985) -

Fertilizer inventory 16,963,317 - 16,963,317 -

$ 92,014,297 $ 1,584,538 $ 90,429,759 $ -

Financial liabilitiesDelayed price grain $ 44,425,652 $ - $ 44,425,652 $ -

2018

Following is a description of the valuation methodologies used for assets measured at fair value. There have been

no changes in the methodologies used at December 31, 2019 and 2018:

Grain futures contracts – Valued at the end of the trading day market value. The values, as provided by

the CME Group Inc. and Minneapolis Grain Exchange, Inc., is an unadjusted quoted price for identical

assets or liabilities.




(Continued) 24

Grain inventory, forward grain contracts and delayed price contracts – Valued at the contract value

of the underlying units, which approximates fair value. Fair value is determined by adjusting the exchange

traded futures and options for local market basis. Basis is defined as the amount in cents per bushel a

specified local cash price is above or below a futures price for a specified delivery month, due to factors

including transportation costs, the cost and availability of storage, and the local demand for the commodity.

Fertilizer inventory – Valued at the contract value of the underlying units, which approximates fair value.

Fair value is determined by adjusting the exchange traded futures and options for local market factors or

secondarily purchase transactions on or near year end. Local market factors include transportation costs,

the cost and availability of product, and the local demand for the product.

NOTE 19 – FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK

In the normal course of business, the Cooperative incurs commitments and contingent liabilities, such as

commitments to extend credit and guarantees of its customers’ third party credit, which are not included in the

accompanying financial statements. As of December 31, 2019 and 2018, the Cooperative had contingent liabilities

associated with third party guarantees totaling $2,340,977 and $2,430,356, respectively.

NOTE 20 – DERIVATIVES

The Cooperatives operations utilize exchange traded futures and options as well as over-the-counter (OTC) cash

forward purchase and sales contracts to manage commodity price risk associated with marketing grain.

Substantially all of the grain sales of the Cooperative are the result of physical delivery of commodities against cash

forward contracts, and substantially all of the grain cost of sales are the result of purchases of commodities on

forward cash contracts, gains and losses from all other commodity derivatives along with the change in value of

grain inventories (non-derivatives) which are recorded at market price. These derivatives meet the definition of

trading activities and may be presented using an alternative disclosure format, which includes disclosing the realized

and unrealized gains and losses on both derivative instruments and non-derivative instruments.

As of December 31, 2019 and 2018, the Cooperative and its subsidiaries had the following quantities outstanding

(on a net basis) on derivative contracts that were entered into as non-designated economic hedges of overall price

risk:

Underlying 2019 2018

Wheat Bu. 11,838 (6,182)

Soybeans Bu. (10) (2,231)

Corn Bu. 5,100 (893)

The effect of open derivatives held as economic hedges but not designated under ASC 815 is shown below, as

reported in the Statements of Operations for the years end December 31, 2019 and 2018, respectively:

Commodity contracts recognized in income 2019 2018

Cost of sales $ (3,955,002) $ (2,706,447)




25

The following table includes the effect of closed trading activities on the Statements of Operations for the years

ended December 31, 2019 and 2018, respectively:

Commodity contracts recognized in income 2019 2018

Cost of sales $ 7,461,143 $ 19,221,704

NOTE 21 – SUBSEQUENT EVENTS

The Cooperative has evaluated subsequent events through the date of the auditor’s report, which is the date the

financial statements were available to be issued. Subsequent to the balance sheet date the Board of Directors

authorized an equity retirement of approximately $3,800,000 as a component of the financing activities due and

payable during the 2020 calendar year.


SUPPLEMENTARY FINANCIAL INFORMATION

DECEMBER 31, 2019 AND 2018

4334 18th Avenue S.

Ste 101

Fargo, ND 58103-7414

Phone: 701.237.6022

Toll Free: 888.237.6022

Fax: 701.280.1495

widmerroelcpa.com

Member of

26

INDEPENDENT AUDITOR’S REPORT ON

SUPPLEMENTARY FINANCIAL INFORMATION

Board of Directors

West Central Ag Services Ulen, Minnesota

We have audited the financial statements of West Central Ag Services (a Cooperative) as of and for the years

ended December 31, 2019 and 2018, and our report thereon dated March 11, 2020, which expressed an unmodified opinion on those financial statements, appears on page 1. Our audits were conducted for the purpose of forming an

opinion on the financial statements as a whole. The supplementary information on page 27 is presented for purposes

of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to

prepare the financial statements. The information has been subjected to the auditing procedures applied in the audits of the financial statements and certain additional procedures, including comparing and reconciling such information

directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in

the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Fargo, North Dakota

March 11, 2020


SCHEDULES OF OPERATING EXPENSES


27

2019 2018

Salaries and wages $ 13,803,591 $ 14,571,010

Payroll taxes 1,044,367 1,093,687

Employee insurance 2,570,199 2,508,083

Employee retirement plans 1,531,784 1,549,193

Total salaries and benefits 18,949,941 19,721,973

Mobile equipment 1,909,190 1,911,389

Repairs and maintenance 1,391,698 1,920,015

Utilities 1,353,821 1,255,372

Insurance and bonds 1,309,481 1,307,929

Property taxes 822,861 666,082

Building, equipment and other rent 784,457 686,841

Dryer fuel 710,182 696,668

Bad debt expense 389,777 141,966

Data processing 385,699 291,850

Meetings, convention and travel 370,796 520,294

General supplies 281,660 255,475

Professional fees 221,631 131,474

Office supplies & postage 197,484 223,383

Telephone 150,004 153,839

Director fees 135,300 78,600

Bank and credit card charges 115,100 113,494

Licenses and fees 88,484 204,789Dues, subscriptions and memberships 86,689 63,291

Market quoter 76,537 68,161

Advertising 75,100 75,104

Miscellaneous 52,883 56,225Contract labor 23,259 20,900

Contributions 21,054 18,481

Safety, training and education 20,352 15,581

10,973,499 10,877,203

$ 29,923,440 $ 30,599,176

NOTES

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Documents

WEST CENTRAL AG SERVICES - Microsoft · 4334 18th Avenue S. Ste 101 Fargo, ND 58103-7414 Phone: 701.237.6022 Toll Free: 888.237.6022 Fax: 701.280.1495 widmerroelcpa.com Member of