September Allocation Letter

The notice you received in September, 2015 is the notice of your share of the 2014 Allocation for Filer Mutual Telephone Company. The Board will determine the timing and amount of any retirement (check to you related to this or former allocations) when the company has sufficient funds to cut checks for those amounts that have not yet been retired.

Question: What is a cooperative?

Answer: Filer Mutual is a cooperative that you have a membership interest in. We are a business organization owned and operated by a group of individuals (our members) for your mutual benefit. We have a Board of Directors that provides the direction for management to meet the needs of you, our members.

Question: What is a margin?

Answer: A margin is the amount of money in excess of expenses that is allocated back to the membership based on patronage. Most businesses have net income from operations. We have margins that get allocated back to our members and the letter you received is your share of the 2014 margins that were allocated.

Question: What is patronage?

Answer: Patronage is the amount of the cooperative’s services the members have used. This amount is used to calculate how the margins are divided among the members if there are margins to be distributed to the members.

Question: What are capital credits?

Answer: Capital Credits are the amount of patronage margins retained by the cooperative to be retired at a future date. Each member has an amount that is credited to their account each year that the cooperative has a margin to allocate.

Question: When are capital credits retired and what does that mean?

Answer: Capital Credits are retired when the Board of Directors determines that it is in the best interest of the cooperative to do so. The Board of Directors has a responsibility to ensure the viability of the cooperative and make sure that the cooperative has enough reserves to meet future needs.

We hope that this will help you to understand the value of being a cooperative member. We are pleased to announce that we expect to retire a portion of the remaining capital credit balance later this year! Thank you for supporting us, your local telecommunications cooperative.