2015 Annual Report

2015

ANNUAL REPORT

2

Timeline

LETTER TO THE

Table of Contents

Power Quality & Reliability Price

Dear SECO Energy Members,

6

In 2015, our cooperative achieved amazing milestones with solid fiscal results. Currently, we serve almost 00,000 accounts, making SECO the third largest electric cooperative in Florida and si th largest in the nation.

8

Billing & Payment

10

Corporate Citizenship Communications

4

MEMBERS

SECO Energy has dropped the cost of electricity six times in months a . percent drop in a power cost ad ustment nown as “Hot uc s. In November, we returned a record $ .6 million in Capital Credits to our members, and since inception, we’ve returned over $ .3 million to members.

12

Customer Service

14

Board of Trustees

16

Management Team Financial Statements

Our service area covers 2,000 square miles with 48 substations, 12,000 miles of line and a facilities investment of $ million. e’ve made significant improvements in our substation, distribution and transmission infrastructure. Our vegetation management program has dramatically reduced tree-related outages.

I’m honored that in 0 . . Power ran ed SECO Energy highest in customer satisfaction among midsize utilities in the South. . . Power ran s in si factors power quality and reliability; price; billing and payment; corporate citizenship; communications and customer service. e elaborate on each factor in the pages that follow.

18

I extend my gratitude to the Board of Trustees and to our employees for their commitment to quality service on your behalf. It is our privilege to serve as your energy provider.

Best regards,

19 im uncan, CEO

Corporate Highlights

24

Year of Excellence!

OCT 2014

$117.20

JAN 2014

$118.20

$120.70

$130 $128 $126 $124 $122 $120 $118 $116 $114 $112

$127.75

Bill Decrease

JUNE 2015

AUG 2015

Based on 1,000 kWh

» » 2015 Timeline » » » » » » » » » » » » » » JAN

Scholarship applications reach area schools.

Members rate SECO 89 in satisfaction for the 2014 American Customer Satisfaction Index (ACSI).

FEB

SECO/Seminole launch survey seeking member opinion on interest in solar energy.

Trustees are elected for Districts 7, 8 and 9.

Employees stand against heart disease in Go Red for Women.

MARCH

SECO rolls out a public awareness campaign called “Stop the Bushnell Power Grab.”

More than 3,000 members and guests gather for Annual Meeting; grand prize winner receives a 2004 Dodge Dakota 4x4.

APRIL

Members receive results on the Solar Energy Survey.

Twelve scholarship winners are announced and awarded $3,000 each.

»»»»»»»»»»»»»»»»

MAY

AUG

Lady Lake substation transformer is upgraded.

J.D. Power ranks SECO Energy “highest in customer satisfaction among midsize utilities in the South.”

SECO lowers members’ bills through a power cost adjustment called Hot Bucks.

JUNE

Trustee James Holtz steps down and new Trustee Richard Dennison is elected for District 4.

JULY

Convoy heads to Florida Panhandle to help sister co-op Talquin Electric with emergency restoration efforts.

Hot Bucks adjustment again results in bill decrease.

SECO Energy showcases new logo to strengthen brand identity.

SEPT

Capital Credits are allocated to members’ records.

OCT

SECO Energy and the International Brotherhood of Electrical Workers reach five-year labor agreement.

Another Hot Bucks bill decrease implemented.

NOV

Bushnell citizens’ successfully petition to vote on the sale of the City’s electric distribution system to SECO Energy.

SECO employees pledge $43,748 to United Way agencies throughout SECO’s seven counties.

A record $4.6 million in Capital Credit retirements approved by the Board in October were posted to members’ bills.

DEC

SECO drops the cost of electricity for the sixth time in two years. Hurray!

2015 Annual Report 3

»

and Reliability

Power Quality

THE

FACTS

2015

SECO is the third largest electric co-op in Florida and sixth largest nationally. To serve our members reliably, our 2,000 square mile service territory is home to 48 substations, 12,000 miles of line and a $775 million investment in electric facilities.

3RD

LARGEST ELECTRIC CO-OP IN FLORIDA

2,000 SQUARE MILES OF SERVICE TERRITORY

THE POWER OF

RELIABILITY In 2015, members consumed 3 billion kilowatt hours of energy. It takes a robust, well-maintained system to support the reliable delivery of that power. We must continually inspect, maintain and upgrade existing facilities – distribution and transmission poles, underground equipment and substation infrastructure. And we must expand to meet the increasing power demand.

6TH

19,923

DISTRIBUTION POLES INSPECTED

DISTRIBUTION POLES REPLACED

12,104

10,956

764

LARGEST ELECTRIC CO-OP NATIONALLY

MILES OF LINE

UNDERGROUND INSPECTIONS

3,208

PIECES OF EQUIPMENT REPLACED

2,757

DISTRIBUTION POLES REQUIRED MAINTENANCE

$8M

ANNUALLY ON VEGETATION MANAGEMENT

Honing a comprehensive vegetation management program dramatically reduces outages. SECO Energy spends about $8 million annually on vegetation management, every dollar is money well spent to reduce tree-related outages.

New fiber optic line improves data communication between the equipment in our substations and our headquarters and operations divisions. It means that when an operational anomaly occurs in your area, our notification and response is instantaneous.

3B

KWH SOLD

48

SUBSTATIONS

SECO Energy has over 270 contractors and Operations employees dedicated to providing you with reliable power (see their photos on inside back cover).

70.2

MILES OF FIBER OPTIC INSTALLED

271

CONTRACTORS & EMPLOYEES

2015 Annual Report 5

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From January 2014 to December 2015,

which means lower bills for our members.

$47.3M

Bill Decrease (1,000 kWh)

JAN ’14

NOV ’14

JUN ’15

AUG ’15

OCT ’15

Price

SECO Energy dropped the cost of electricity SIX times –

Capital Credits Retired

DEC ’15

TO MEMBERS 1980 - 2015

$127.75

$120.70

$118.20

$117.20

$116.20

$115.60

Six decreases in two years

The decrease is formally called a Power Cost Adjustment or PCA – but it is known to you as “Hot Bucks.” It is a line item component on your bill representing positive reductions in our cost of power. The latest 2015 reduction equates to a 9.5 percent decrease over the past 24 months.

SECO Energy returned a record $4.6 million in Capital Credits to members in November. Since our inception, we’ve returned over $47.3 million to you, our members.

MEMBERS’

Capital Credit Retirements $4.6 M

2015 2014

$4.2M

2013

$2.9M

2012 As of December 1, 2015, our residential cost dropped to $115.60 based on 1,000 kWh used which is average consumption for a SECO member.

The decrease means that SECO members pay one of the lowest residential rates in Central Florida.

$2.2M

2011

$3M

2010

$3.4M

2009 O

.5

1

1.5

2 2.5 3 Millions of Dollars

3.5

4

4.5

5

Capital credit retirements demonstrate that we’re controlling costs, maintaining healthy equity, returning excess margins like a true co-op should and providing low rates.

2015 Annual Report 7

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MYWAY PREPAY

Billing & Payment

Paying your bill is easy!

Pay for your energy before you use it; sign up for the MyWay PrePay program. Members can find the enrollment form at SECOEnergy.com.

Once enrolled, you’ll register for an online account through SmartHub to view your daily energy usage and pay your account online. Visit the website today or call SECO at (352) 793-3801 for more information about the MyWay PrePay program.

Whether it’s online, by phone, or in person, SECO offers members seven convenient ways to pay.

Pay ONLINE (via SmartHub)

Using your computer or mobile device, SECO is making online account management easier than ever with SmartHub. Register at SECOEnergy.com through SmartHub today. Members can view and pay their bill, sign up for automatic bank draft, update phone numbers, change mailing addresses and compare energy usage by month or year. All SmartHub subscribers automatically receive an electronic billing notification in addition to their paper bill. Want to discontinue the paper bill? Just select that option in SmartHub under My Profile.

Pay By

BANK DRAFT

Want to simplify your life? Your monthly electric bill can be drafted from a bank account of your choice. Register at SECOEnergy.com through SmartHub and sign up for bank draft today. Or call and ask us to mail a form to you.

PAY NOW Need to make a payment now without registering for an online account? With just one click, you can access PayNow through SECOEnergy.com to pay online without registering for an online account.

Pay By

Pay By

MAIL You can also send your payments by mail to: SECO Energy PO Box 31634 Tampa, FL 33631-3634

Pay In

PERSON SECO has five locations to serve our members.

All office locations have walk-in and drive-thru facilities available. Find one of SECO Energy’s five office locations at SECOEnergy.com.

Payment kiosks are also available ‒ some kiosks accept payments 24 hours a day, 7 days a week. Get directions to a kiosk near you by visiting SECOEnergy. com and clicking on the home page map.

PHONE

Would you like to make a payment by phone?

It’s easy. Call (877) 371-9382; available 24 hours a day, 7 days a week. Pay by Visa, MasterCard, Discover, debit card or electronic check.

EUSTIS

50 W. Ardice Ave. Eustis, FL 32726

GROVELAND

850 Howey Road Groveland, FL 34736

INVERNESS

610 US Hwy 41 South Inverness, FL 34450

OCALA

4872 SW 60th Ave. Ocala, FL 34474

SUMTERVILLE

293 S. U.S. Hwy 301 Sumterville, FL 33585

2015 Annual Report 9

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As a not-for-profit utility, SECO is guided by the Seven Cooperative Principles.

Our Pennies from Heaven Program offers funding to area social service agencies to provide financial assistance to members in need. This assistance may be in the form of help with an electric bill, recovery from unique hardships such as fire or tornado damage, or other unforeseeable circumstances that may cause a member to be faced with the choice of paying the electric bill and eating or buying medication. If you’d like to be a part of this program and contribute a few pennies each month, you can enroll at SECOEnergy.com.

In addition to Pennies from Heaven, SECO supports our area chambers of commerce, municipal events, kids’ athletics, charitable causes, and a wide variety of other worthy initiatives. We sponsor the Sumter Scenic Byways project, are a nineyear Tree Line USA award winner and carefully follow all requirements for ensuring that endangered wildlife is as safe as possible near our electric equipment.

Environmental approach is a clear reflection on corporate citizenship. As the price of solar energy generation comes down, SECO has communicated frequently about the pros and cons of investing in rooftop residential solar. The Florida Office on Economic and Demographic Research reports that SECO has the highest number of solar interconnections of any electric cooperative or municipal utility in Florida with 271 installations.

We are an advocate for members who choose to invest in solar and will conduct a free evaluation of a home’s solar suitability upon request.

Corporate

Annually, SECO offers $36,000 in scholarships to deserving high school seniors who live in our service area. We are proud to support our youth and continuing education in our community. These scholarships can be used for community college, a university or a technical/trade school, and we hope that some of these students have a career in their future at SECO Energy once they’re out of school.

Citizenship

The Principle of Commitment to Community is nearest and dearest to our hearts, and there are many tangible examples of SECO’s community outreach.

2015 Annual Report 11

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Communications

2015 was a BIG Year for Awards and milestones.

J.D. Power ranked our company highest in customer satisfaction among midsize utilities in the South. With that honor, we rolled out a new logo to enhance our brand and brighten up our communications.

We have a deeply rooted past as Sumter Electric Cooperative, founded in 1938 with a mission of rural electrification. In an effort to enhance our image as a utility serving seven Central Florida counties, the cooperative is officially doing business as “SECO Energy.”

The logo colors are unchanged. We preserved the concept of an electric plug as a tribute to the old logo. The arc over the top speaks to our presence in The Sunshine State – sunrise, sunset, solar energy, Florida oranges, etc.

Keep in mind that today you can report a power outage online using the current Storm Center application from the home page of SECOEnergy.com or by phone via our automated outage management system.

To use the systems effectively, we must have an updated primary phone number that corresponds with your account.

Update your number today through your SmartHub account, send a message through SECOEnergy.com or call us.

Stay up-to-date on outages, safety, energy efficiency, corporate citizenship efforts and more on social media.

Visit SECOEnergy.com and click on any of the seven icons.

You’ll find us on Facebook, Twitter, Google+, LinkedIn, Pinterest, YouTube and Instagram.

Along with the logo, we took a fresh approach to SECO News and redesigned our website on a user-friendly platform that performs on a variety of mobile devices and browsers.

You’ll find home page access to the most frequently visited features. Members are one click away from reporting an outage, online account (SmartHub) access, bill payment, social media updates and a variety of intuitive Contact Us web forms.

Frequently asked questions are updated and categorized.

We’ve added a dedicated solar section, and developed a video gallery and a blog in the Newsroom. On the Contact Us page, you can report an area light problem, request an energy audit, inquire about community presentations, let us know you’re moving or ask a question about your bill.

Communication tools for mobile devices are so important in our tech-savvy world today, especially during a power outage. Now that the website is redesigned, we will begin enhancing our Storm Center outage map with a communications suite that supports text and email.

2015 Annual Report 13

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2015

62

LOCAL EMPLOYEES STAND READY TO RESPOND TO YOUR CALLS AND EMAILS.

~

62

CUSTOMER SERVICE EMPLOYEES

307,008 CALLS HANDLED

3,589

NEW CONSTRUCTION METERS ENERGIZED

87,280

Our call center is local. When you call or email us, the folks you’re communicating with are from around here. If you request a free energy audit, an Energy Services Specialist will arrive on time at your door with a smile and a commitment to helping you save energy. Out in the field, you may come in contact with one of our linemen, meter readers or project engineers. Chances are they were born in Central Florida and have deep family roots here. Many of our employees are your fellow members. They understand the high level of service that you expect and deserve.

SERVICE ORDERS INITIATED

244,802 SERVICE CENTER TRANSACTIONS

SECO Energy’s 2015 J.D. Power award makes us all the more committed to enhancing the service our members receive.

Awards like this are an honor because they mean we are serving your interests well. Thank you, SECO members, for rating us high. More important, thank you for the privilege of serving your family’s energy needs.

Customer Service

Customer service and satisfaction are important in any business, but at SECO Energy, you’re not just a customer.

You’re a member of a not-for-profit electric cooperative dedicated to ensuring that each interaction with you is timely, responsive and friendly.

2015 Annual Report 15

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DISTRICT MAP BOARD OF TRUSTEES 27

Levy

41

40

Ocala

Ocala Service Center 200

Scott D. Boyatt District 1

Dillard B. Boyatt District 2

75

Richard J. Belles District 3

Lake Weir 19

Marion Citrus

Umatilla

301

Wildwood

44

Inverness Service Center

Ray F. Vick District 5 President

Earl Muffett District 6

District 1

Lake Apopka

301

D Boyatt

Belles

Eustis Service Center

Lake Harris

Sumterville

S Boyatt

District 2 District 3

Leesburg

Lake Eustis

44

Service Center & Headquarters

48

Richard Dennison District 4

Lake Griffin 441

Lake Panasoffkee

41

Lake

50

Groveland Service Center

Hernando

District 4

Clermont

471

Dennison

District 5

Vick

District 6

Pasco

Sumter

33

27

Muffett

District 7

Henion

District 8

Rob Henion District 7 Secretary-Treasurer

Bill James District 8

Jerry D. Hatfield District 9 Vice President

James

District 9

Hatfield

2015 Annual Report 17

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MANAGEMENT ˜

TEAM

˜

Board of Directors Sumter Electric Cooperative, Inc. Sumterville, Florida

INDEPENDENT AUDITORS’ REPORT

Report on the Financial Statements We have audited the accompanying financial statements of Sumter Electric Cooperative, Inc. (the Cooperative), which comprise the balance sheets as of December 31, 2015 and 2014, 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 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.

STANDING

(L to R)

John LaSelva, VP of Operations; Nora Brown, Sr. Executive Assistant; Kathryn Gloria, VP of Corporate Communications & Energy Services; Gene Kanikovsky, Chief Financial Officer SEATED

(L to R)

Ben Brickhouse, VP of Engineering; Jim Duncan, Chief Executive Officer; Gregg Morrell, VP of Corporate Services & Human Resources

OUR PURPOSE

OUR VALUES

To provide exceptional

• Commitment to the Cooperative Purpose

service to our customers, co-workers and communities.

• Honesty & Integrity • Safety • Strong Work Ethic

Auditors’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 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 auditors’ 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 the Cooperative, as of December 31, 2015 and 2014, 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.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 5, 2016, 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, and 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 in considering the Cooperative’s internal control over financial reporting and compliance.

Other Reporting Required by 7 CFR Part 1773 In accordance with 7 CFR Part 1773, Policy on Audits of Rural Utilities Service Borrowers, §1773.33 and clarified in the RUS policy memorandum dated February 7, 2014 (the regulatory requirements for electric borrowers), we have also issued our report dated February 5, 2016, on our consideration of the Cooperative’s compliance with the terms, covenants, provisions, or conditions of their loan, grant, and security instruments as set forth in the regulatory requirements for electric borrowers, insofar as they relate to accounting matters enumerated therein. The purpose of that report is to describe the scope of our testing of the Cooperative’s compliance with the regulatory requirements for electric borrowers and the results of that testing, and not to provide an opinion on the Cooperative’s compliance with the regulatory requirements for electric borrowers. That report is an integral part of an audit in considering the Cooperative’s internal control over financial reporting and compliance.

• Team Oriented • Open Communication

February 5, 2016 Ocala, Florida

Certified Public Accountants Laurel Ridge Professional Center • 2347 S.E. 17th Street • Ocala, Florida 34471 • (352) 732-3872 • (352) 732-0542 MEMBERS OF AMERICAN AND FLORIDA INSTITUTES OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES AND S.E.C. PRACTIVE SECTIONS

Sumter Electric Cooperative, Inc.

For the years ended December 31, 2015 and 2014

Sumter Electric Cooperative, Inc.

Balance Sheets

Statement of Revenues and Patronage Capital 2015

ASSETS

2015

2014 Operating Revenues

Electric Plant Distribution, Transmission, and General Plant

$

Construction Work in Progress Total Electric Plant (Accumulated Provision for Depreciation and Amortization) Total Electric Plant - Cost Less Depreciation and Amortization

742,178,283

$

707,809,361

32,886,891

28,001,667

775,065,174

735,811,028

(166,792,787)

(153,507,530)

608,272,387

582,303,498

71,197,453

63,781,444

Investments Investments in Associated Organizations and Other Special Funds Current Assets Cash and Cash Equivalents

2,217,998

3,267,124

$

Cost of Power

2014 - $1,203,007)

9,549,371

10,954,021

Other Receivables

2,669,564

1,956,071

Unbilled Electric Revenues

6,489,472

8,943,451

15,442,853

12,099,129

166,895

199,395

36,536,153

37,419,191

8,703,751

9,828,687

724,709,744

693,332,820

Inventories Prepayments and Other Current Assets Total Current Assets Deferred Charges Total Assets

2015

EQUITIES AND LIABILITIES

Patronage Capital Other Equities

852,235

829,990

233,902,330

218,247,571

3,011,677

2,638,856

237,766,242

221,716,417

406,316,901

384,880,930

1,001,878

380,863

661,885

736,603

407,980,664

385,998,396

12,774,242

13,968,400

179,576

67,756

Accounts Payable

32,810,144

34,251,863

Consumer Deposits

14,901,953

13,939,509

Total Equities Noncurrent Liabilities Long-term Debt Capital Lease Obligation Deferred Compensation Liability Total Noncurrent Liabilities Current Liabilities Long-term Debt - Portion Due Within One Year Capital Lease Obligation - Portion Due Within One Year

Other Current or Accrued Liabilities Total Current Liabilities Deferred Credits $

8,486,189

11,845,062

69,152,104

74,072,590

9,810,734

11,545,417

724,709,744

$

$

363,727,345

254,026,879

364,064

344,558

Distribution Expense - Operations

15,118,744

15,237,772

Distribution Expense - Maintenance

22,287,657

22,375,004

Consumer Accounts Expense

11,704,114

10,879,822

Customer Service and Informational Expense

1,493,882

1,396,091

Administrative, General, and Other Expense

14,343,236

13,486,358

Depreciation Expense

22,674,846

22,491,045

68,396

67,193

619,528

242,795

(350,003,579)

(340,547,517)

24,432,621

23,179,828

(13,254,866)

(12,971,756)

11,177,755

10,208,072

G&T Cooperative Capital Credits

6,650,621

6,384,891

Other Capital Credits and Margins

1,569,487

1,625,247

8,220,108

8,010,138

19,397,863

18,218,210

Interest Income

728,422

503,042

Other Nonoperating Income

113,917

177,423

Total Nonoperating Margins

842,339

680,465

Net Margins

20,240,202

18,898,675

Patronage Capital, Beginning of Year

218,247,571

203,547,670

(4,585,443)

(4,198,774)

(Total Operating Expenses) Operating Margins Before Fixed Charges Fixed Charges Interest on Long-term Debt Operating Margins After Fixed Charges Other Margins

2014

Equities Memberships

374,436,200

261,329,112

Transmission Expense

Other Expense

for Doubtful Accounts 2015 - $1,367,924

2014

Operating Expenses

Taxes - Expense

Accounts Receivable - Consumers (Less Provision

Total Equities and Liabilities

For the years ended December 31, 2015 and 2014

Total Other Margins Net Operating Margins Nonoperating Margins

(Retirement of Capital Credits) Patronage Capital, End of Year

$

233,902,330

$

218,247,571

693,332,820

2015 Annual Report 21

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Sumter Electric Cooperative, Inc.

For the years ended December 31, 2015 and 2014

Sumter Electric Cooperative, Inc.

Statements of Cash Flows

For the years ended December 31, 2015 and 2014

Statements of Cash Flows

2015

2014

2015

Cash Flows from Operating Activities Net Margins

$

20,240,202 $

2014

18,898,675 Supplemental Disclosures of Cash Flow Information

Adjustments to Reconcile Net Margins to Net Cash Provided by (Used in) Operations: Capital Credits and Patronage Dividend Certificates Assigned

(8,220,108)

(8,010,138)

24,575,062

24,438,351

378,400

360,000

1,148,029

1,148,029

2,766,736

(704,685)

32,500

202,839

Deferred Charges

(23,093)

(381,985)

Accounts Payable

(1,441,719)

4,567,640

962,444

(191,963)

(3,358,873)

3,094,434

(74,718)

86,113

(1,734,683)

2,225,350

15,009,977 35,250,179

Depreciation Provision for Uncollectible Accounts Amortization of Prepaid Pension Changes in Assets - Decrease (Increase) and

Cash Paid During the Year for:

Interest

$

13,281,329

$

13,064,973

12,434,856

$

23,316,903

Liabilities - Increase (Decrease): Accounts Receivable Prepayments and Other Current Assets

Consumer Deposits Other Current Liabilities Deferred Compensation Liability Deferred Credits Total Adjustments Net Cash Provided by (Used in) Operating Activities

Supplemental Schedule of Noncash Investing & Financing Activities

The Cooperative Retired Certain Assets from its Plant Records as Follows: Cost of Assets Retired

$

Plant Removal Costs

3,530,281

3,574,249

26,833,985

Material Salvaged

1,538,969

1,565,766

45,732,660

Net Reduction in Accumulated Depreciation

$

17,504,106

$

28,456,918

Amounts not Included in Proceeds from Capital Lease Obligation

$

842,674

$

473,944

Amounts not Included in Extension and Replacement of Plant

$

842,674

$

473,944

Cash Flows from Investing Activities Change in Inventory - Net of Salvage

(3,343,724)

443,906

Contributions in Aid of Construction Received

3,490,233

9,590,793

Proceeds from Disposition of Property

257,488

422,470

671,265

809,076

Proceeds from Redemption of Other Investments

58,116

219,883

Purchase of Other Investments

74,718

(86,113)

(49,918,717)

(63,050,780)

(3,530,281)

(3,574,249)

(52,240,902)

(55,225,014)

Proceeds from Redemption of Patronage Capital Certificate

Extension and Replacement of Plant Plant Removal Cost Net Cash Provided by (Used in) Investing Activities

The Cooperative Financed Certain Equipment Using a Capital Lease:

Financial notes available to members upon request.

Cash Flows from Financing Activities Line of Credit (Net)

(24,140,686)

(2,211,965)

Proceeds on Long-term Debt

60,000,000

30,000,000

Payments on Long-term Debt

(13,882,483)

(13,082,834)

Payment to Cushion of Credit

(1,735,019)

Payments on Capital Lease Obligation Other Equities Membership Fees Retirement of Capital Credits Net Cash Provided by (Used in) Financing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year

(109,838)

(25,326)

372,821

5,923

22,245

20,611

(4,585,443)

(4,198,774)

15,941,597

10,507,635

(1,049,126)

1,015,281

3,267,124 $

2,217,998

2,251,843 $

3,267,124

2015 Annual Report 23

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2015

Cooperative Highlights OPERATING REVENUE

KWH CONSUMED

$374,436,200

3,149,363,130 ACTIVE ACCOUNTS

193,110

NEW SERVICES

3,589

MILES OF ENERGIZED LINE

12,104

NET MARGINS

$20,240,202

TOTAL ASSETS

$724,709,744 FULL-TIME EMPLOYEES

405

PATRONAGE CAPITAL DISTRIBUTED

$4,585,443

“Highest in Customer Satisfaction among Midsize Utilities in the South ”

SECOEnergy.com

PO Box 301, Sumterville, Florida 33585-0301 352.793.3801