Commitment

Centra Sota Cooperative Annual Report 2015

A MESSAGE TO OUR MEMBERS...

The theme of this year's Annual Statement, “Commitment”, very accurately describes what Centra Sota Cooperative is all about. The pictures in this year's annual statement help to illustrate activities taking place for the long-term at your cooperative.

As you can see in the financial statements, we had a very good year. Sales during fiscal 2015 were nearly $160 million and we achieved Net Earnings of $5 million. Both of these reflect lower results as compared to the prior few years as is the case with many companies involved in Agriculture. We are now in the middle of a much lower commodity price environment as compared to 2012-2014. This is not only reflected in our customer's operations, but also in ours. Being an extension of your farm, Centra Sota may also experience lower sales and earnings until the current down cycle reverses itself.

When any industry enters a downward cycle, many companies react by slashing expenses and curtailing investment spending. It seems almost on a daily basis I read an article showing companies laying off employees and closing facilities. This is exactly the opposite approach Centra Sota is taking. We will monitor expenses and keep them in control but at the same time we are making significant investments on your behalf. Over the past 2 years we have invested over $12 million in new equipment and facilities to better serve you. When our current projects in Agronomy at St. Martin, Little Falls, and Watkins are completed we will have invested an additional $7 million. Having replaced our remaining Agronomy facilities in Cokato, Watkins and Santiago in recent years, we now have all state of the art facilities to serve our members for many years to come. In addition, we have upgraded facilities and equipment in our Feed Division and Energy Division to increase capacity for the foreseeable future.

2015 Interns

2

This is our commitment to our member owners to take the very long-term approach, understanding agriculture is a very cyclical industry. We understand commitment through ups and downs.

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

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

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

Jeff JohnsonCEO/General Manager

Dave RuhlandChairman, Board of Directors

OFFICERS & DIRECTORS

Eden ValleyBrainerdBuffaloSt. CloudSt. CloudMontroseBuffaloLittle FallsUpsalaPaynesvilleAlbany

Dave RuhlandSteve SievekBill HolthausDennis LiethaTom HammerRodney DomjahnCharles KrauseKen WelleRoger RoerickDon ThomesVern WillenbringJeff JohnsonDan Malinski

ChairmanVice ChairmanSecretaryDirectorDirectorDirectorDirectorDirectorDirectorDirectorDirectorCEO/GMCFO

Waverly

Buffalo

Maple Lake

Clear Lake

Santiago

Watertown

Cokato

Annandale

WatkinsEden Valley

St. Martin

AlbanySauk Centre

UpsalaLittle Falls

Harding

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

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

Our Vision:

SERVING THESE LOCATIONS:

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STATEMENT OF OPERATIONS

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

SalesCost of Sales Operating Revenue

Expenses:Employee ExpenseDepreciationInsuranceOther Operating ExpensesTotal Operating Expenses Net Operating Margin

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

Local Net SavingsPatronage IncomeNet Income Before TaxesIncome Taxes

Net Savings

2015$159,992,862$134,893,793

$25,099,069

$10,972,864$2,681,783

$709,890$9,508,475

$23,873,012$1,226,057

($322,836)($260,985)

$125,837$1,763,197$1,305,213

$2,531,270$3,345,268

$5,876,538($805,327)

$5,071,211

$168,639,691$144,565,194

$24,074,497

$9,933,083$2,307,853

$557,375$9,067,184

$21,865,495$2,209,002

($267,305)($203,942)

$117,836 $1,316,262

$962,851

$3,171,853$3,010,093

$6,181,946($795,302)

$5,386,644

2014

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BALANCE SHEET

ASSETS

LIABILITIES

EQUITY

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

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

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

Member EquityCapital Reserve Total Patron Equity Total Liabilities and Patron Equity

$ 550,641 19,631,605 (1,958,210)22,669,26540,893,301

40,497,507(23,942,940)

16,554,56713,795,00071,242,868

9,207,5941,253,480

16,706,29527,167,369

123,60027,290,969

24,636,26019,315,63943,951,899

$ 71,242,868

2015 2014

$ 388,608 18,702,716 (1,869,196)24,142,591 41,364,719

37,004,765 (21,801,276)

15,203,489 12,661,994 69,230,202

9,677,235 1,292,822

17,568,965 28,539,022

298,959 28,837,981

23,068,027 17,324,19440,392,221

$ 69,230,202

Fertilizer

Feed

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

2015

11,9

79,2

26

10,2

86,1

36

Seed & Chemical Sales in Dollars

Seed

Chemical

Fertilizer & Feed Sales in Tons220,000

200,000

180,000

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

57,8

24

198,

805

67,9

48

196,

602

55,6

79

169,

506

64,8

90

188,

387

HISTORIC SALES VOLUMES15,500,000

14,500,000

13,500,000

12,500,000

11,500,000

10,500,0002013 201420122011 2015

Petroleum Sales in Gallons

2011 2012

10,1

35,1

22

9,00

9,27

7

2013

11,6

90,3

33

10,5

86,8

67

2014

13,7

89,9

53

11,1

57,1

22

15,250,78715,039,13012,389,03411,637,54110,886,032

2013 201420122011 2015

63,1

82

201,

564

12,5

72,6

03

12,3

16,1

526

FIVE YEAR HISTORICAL INFORMATION

Buffalo, MN 55313800.229-1464

www.centrasota.com

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

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

Sales

Local Net Savings

Total Net Savings

Cash Returned to Members

Working Capital

Local Return on Local Equity

Ownership Percentage

Local Ownership Percentage

Employee Efficiency Ratio

2014

$168,639,691

$3,171,853

$5,386,644

$2,275,954

$12,825,697

11.02%

58.34%

49.94%

38.94%

2013

$177,803,168

$4,111,458

$6,809,087

$1,902,138

$14,258,667

16.04%

61.89%

52.84%

38.32%

2012

$162,438,205

$4,333,507

$5,754,459

$1,511,756

$10,643,430

20.35%

45.15%

35.14%

37.65%

2011

$144,000,380

$2,574,264

$3,234,374

$926,742

$6,996,209

14.97%

51.01%

38.89%

39.12%

$159,992,862

$2,531,270

$5,071,211

$1,470,823

$13,725,932

8.10%

61.69%

53.37%

40.66%

2015