1. University of Wisconsin Center for Cooperatives March 30, 2006
Capital & Equity Management Survey Iowa, Minnesota & Wisconsin Agricultural Cooperatives
University of Wisconsin
Center for Cooperatives
March 30, 2006

2. Survey was planned and prepared by the planning committee.
Thank you for survey mailing assistance to:
Wisconsin Federation of Cooperatives
Minnesota Association of Cooperatives
Iowa Institute of Cooperatives

3. 73% were farm supply/grain handling
Survey mailing
651 cooperatives
147 returned
22.6% response rate
73% were farm supply/grain handling

4. Annual gross income
10 surveys did not indicate whether they were from MN or WI

5. Merger in the last five years

6. Reasons for merger: Top Four Reasons: Improve profitability
Reduce operating costs
Avoid or reduce duplication of facilities, equipment, services
Strengthen balance sheet

7. Other reasons for merger:
Access additional products or services
Expand economic development
Expand trade territory

8. Did the merger achieve these goals?
See comments in handout

9. Average local net margin last 5 years by size of cooperative:
Annual gross revenue:

13. Average local margin compared to 5-years ago by size of cooperative:
Annual gross revenue:

14. Number of years with negative local net margin by size of cooperative.
Annual gross revenue:

18. Capitalization:
Percent of total assets locally owned (member equity):

19. Percentage of total assets locally owned (member equity)
5-years ago:

20. Member Equity Allocation
Type of equity
# Co-ops having type
% Co-ops having type
Average % equity held by type
Qualified allocated
138
94%
71%
Non-qualified allocated 41
28%
38%
Un-allocated
114
78%
33%

21. Co-ops having preferred stock:
28 co-ops (21%) had equity held as preferred stock.
For these co-ops, the average percent of equity held as preferred stock was 47%.

22. Changes in equity structure past 5=years:
See handout for comments.

23. Current active members 75%
Percentage of equity held by active and past members and outside investors
Equity held by:
Average percent held
Current active members
75%
Past members
27%
Outside investors
10%

24. % Co-ops with higher percentage % Co-ops with lower percentage
In past 10-years, has there been changes in percentage of equity held by active and past members and outside investors?
Equity held by:
% Co-ops with higher percentage
% Co-ops with lower percentage
% Co-ops with no change
Current active members
29%
26%
44%
Past members
24%
28%
47%
Outside investors 3% 1%
96%

25. Is non-member business an important source for building un-allocated or permanent equity?
Co-op Type :
(Gross revenue $ in millions)
No.
Yes % No
Less than 25 30
37% 52
63%
25 to 74.99 19
53% 14
42%
75 and above 7
50%
No info on revenue 4
All co-ops 60
44% 77
56%

26. See handout for comments on
equity from non-members.

27. Who receives distribution of earnings
Who receives distribution of earnings? By size of co-op (Million $ gross revenue)
Gross revenue
Number Members only
% members only
Number members & non-members
% members & non-members
Less than 25 68
78% 19
22%
25 to 74.99 28
80% 7
20%
75 and above 12 3
No info
88% 1
13%
All co-ops
115
79% 30

28. Gross revenue No. Yes % Yes No. No No Less than 25 73 84% 14 16%
Does the co-op have an equity redemption policy? By size of co-op (million $ gross revenue)
Gross revenue
No. Yes %
Yes
No. No No
Less than 25 73
84% 14
16%
25 to 74.99 25
76% 8
24%
75 and above 13
87% 2
13%
No info 7
88% 1
All co-ops
118
83%
17%

29. Equity redemption practices by size of co-op:
Annual gross revenue (million $)

33. See handout for comments on
equity redemption practices.

34. Years of revolvement & ability to consistently maintain that period
Gross revenue (million $)
Range in years
Average years
No. Able to maintain
% Able to maintain
Less than 25
1 to 30
17.9 31
62%
25 to 74.99
5 to 31 8
47%
75 and above
10 to 25
14.4 4
33%
No info
15 to 29
22.3 0%
All co-ops
1 to 31
18.2 43
52%

35. With current equity practices, will the co-op be
able to fully fund redemption obligations?

36. With current equity practices, will the co-op be
able to maintain adequate equity capital for
business growth?

37. Do the co-op’s equity redemption practices provide
a positive image of the co-op to members?

38. Have active/past members expressed concern with
the co-op’s equity redemption practices?

39. See handout for member concerns
about equity practices.

40. Were there changes to equity redemption practices
in the last 5-years?

41. See handout for comments on changes
in equity redemption practices.

42. Cooperatives currently considering changes in
equity redemption practices.

43. Change in equity redemption practice being
Considered.

44. See handout on discount equity
practice being considered

45. See handout on other concerns about equity
and equity redemption issues.