Dear IVIember,Once again, Petit Jean Electric Cooperative

Corporation continued its commitment to member

service in a financially responsible manner. Our total

margins of $1,134,593 were adequate to meet the

requirements of mortgage agreements. Member

equity in the system was 38.4 percent at the end

of the year. Members were refunded $1,100,000 in

cash to redeem patronage capital credits. The 2017

redemption brings the total capital credits refunded to

members to $19,160,000.

Bolinger, Segars, Gilbert & Moss, LLP audited our

financial records. You are welcome to examine that

report.

System statistics of interest include: average meters

served, 19,931, a net increase of 66 meters; more

than 3,500 miles of power lines; 275,974,708

kilowatt-hours used by members, down 16,937,867

kilowatt-hours from the previous year; a system peakdemand of 85,003 kilowatts, recorded in the month

of January; and a net plant valuation of $76,827,799

at year's end.

Additional financial data and operations information

is available in this annual report. Ifyou have any

questions concerning your electric cooperative, we are

happy to answer them.

^-^^^ (S/<£^¬t^»-Donnie Collins, President

Charles Wood, Secretary-Treasurer

Y

Annual Meeting Official NoticeNotice is hereby given that the Annual Membership

Meeting of Petit Jean Electric Cooperative

Corporation will be held on Thursday, May 24,

2018, at the headquarters in Clinton, Van Buren

County, Arkansas, beginning at 1:00 p.m., for the

following purposes:

1. To pass on reports for the previous fiscal year;

2. To elect two directors for the cooperative to

serve terms of five years each; and,

3. To transact such other business as may properlycome before the meeting.

Charles Wood, Secretary-Treasurer

Dated at Clinton, Arkansas, this 1st day of May,

2018.

PetitJeanElectricCooperative Corporation

Program

Bill CorTTne, CEO/General Manager

Registration: 12:30 -1:00 p.m.Business Session: 1:00 p.m.

This will be a business session only.

No attendance prizes will be awarded and there will beno entertainment.

2017 Annual Report

PetitJeanElectricCooperative Corporation

THE POWER TO SERVEPetit Jean Electric Cooperative is muchmore than just the "local electriccompany." The cooperative businessmodel centers around seven principles:voluntary and open membership;democratic member control; members'economlc partlclpation; autonomyand independence; education,training and information; cooperationamong cooperatives; and concern forcommunity. These principles guide PetitJean Electric Cooperative and the state'sother electric cooperatives. As a not-for-profit business, Petit Jean ElectricCooperative is motivated to serve localmembers, not out-of-state stockholders.

The Power to Serve Your HomePetit Jean Electric Cooperative is committed to

promoting the efficient use of electricity to meetthe growing energy requirements of members.Educating members about the efficient useof energy resources helps members manageenergy costs and helps protect naturalresources. A comprehensive resource list isavailable at www.smartenergytips.org. Our goal isto help members save money without sacrificingcomfort or convenience.

The Power to Serve As Your VoiceOur business model has guided Petit JeanElectric Cooperative through many years of growthand change. And, since the formation ofyour localelectric cooperative, we have worked as advocates

for our members. Petit Jean Electric Cooperativeknows this is more important than ever as we worktogether to provide you with reliable, affordableelectricity in a responsible manner.

The Power to Serve Your CommunityMore than 75 years ago, the Arkansas' electriccooperatives took on a great challenge to notjust bein the business of electricity, but to serve the greaterpurpose of making lives and communities better.Petit Jean Electric Cooperative sponsors communityfundraising and assists with economic developmentand service events, while employees devote hundredsof volunteer hours to projects.

The Power to Serve Your Farm and BusinessPetit Jean Electric Cooperative works with newand existing businesses to support economic

opportunities and improve the qualityof life throughout its service area. PetitJean Electric Cooperative's directors andemployees serve as advocates for thefarms and businesses with their local,state and federal officials.

The Power to Serve Youth ProgramsAECC heips prepare today's youth forleadership by partnering with 4-H andFFA, and sponsoring the Washington,D.C. Youth Tour and STEM-orientededucational programs.

The Power to Serve ArkansasCollectively, Arkansas' local electric

cooperatives represent the largest private businessin Arkansas and serve more than 1.2 millionmembers. This success is powered by boardmembers and employees who understand andimplement the member-owned business model whichallows them to focus on serving the needs of theirmembers. This mission and structure is the essenceand lifeblood ofthe electric cooperative businessmodel and community. Employees of Petit JeanElectric Cooperative are your friends and neighbors,and your local energy partners.

PetitJeanElectricCooperative Corporation

PetitJeanElectricCooperative Corporation

2017 Annual ReportPetit Jean Electric Cooperative CorporationREVENUE AND EXPENSE STATEMENr As of December 31

REVENUES

jEjectric energy salesOther electric revenue

$29,355,850 $29,936,037 $30,408,208677,961

Total Qperating Revenue579,504 374,983

$30,033,811 $30,515,541 $30,783,191

EXPENSESPurchased powerInterest on debt to RUS / CFC / COBANKDepreciation / amortization

$16,120,329 $16,381,816 $16,223,5831,894,166 1,920,916 2,054,3303,114,724 3,037,174 2,944,560

Operatiory maintenance / transmission expense^Consymer accounting / collecting / information

4,690,014 4,352,553 4,428,104

Administrative1,496,646 1,534,400 1,596,890

Taxes1,992,347 1,976,403 2,012,846

Qther operating deductions630,176 618,670 630,150

Total Expenses65,079 54,733 56,463

$30,003,481 $29,876,665 $29,946,926

MARGINSUperating marginsOther margins and capital creditsNon-operating revenues

$30,330 $638,876 $836,265570,031 423,942 165,210

Total Margins534,232 483,982 522,594

$1,134,593 $1,546,800 $1,524,069* As reported to National Rural Utilities Cooperative Finance Corporation

BALANCE SHEET* As of December 31

ASSETSCash on handInvestments

$592,430 $955,473 $803,362

Investments in associated organizationsAccounts receivable

529,758 4,352,38713,429,397 13,601,168 13,908,108

Inventory3,594,006 3,915,142 2,652,703

Advance payments on insurance, etc.Interest & miscellaneous deferred debits

580,770 504,894 508,173144,471 146,888 138,641

Net utility plant1,250,553 1,500,664 1,752,634

Total Assets76,827,799 67,457,150 66,745,353

$96,419,426 $88,611,137 $90,861,361

LIABILITIESDebt to RUS and / or CFCAccounts payable

$49,020,505 $43,045,473 $44,527,875

Accumulated operating provisions2,241,302 1,808,615 3,313,452

Deposits & advances3,992,384 3,588,864 3,484,805

Other deferred credits and accrued liabilities1,353,999

Total Liabilities2,777,120

1,276,1481,658,081

1,187,2371,954,597

$59,385,310 $51,377,181 $54,467,966

MEMBERS' EQUITY^4embershipsTptal current year margins

$309,775 $308,345 $306,335

Patronage capital1,134,593 1,546,800 1,524,069

Other equities35,063,579 34,616,008 34,236,489

Total Margins & Equities526,169 762,803 326,502

Total Liabilities & Equities$37,034,116 $37,233,956 $36,393,395$96,419,426 $88,611,137 $90,861,361

^ As reported to Rura! Development Electric Programs

THE REVENUE DOLLAR As of December 31

f

OFFICERS&DIREGT^RS

Donnie Collins

President

Carrol D. Bradford

Vice President

Charles Wood

Secretary-Treasurer

Darrell Allen

Director

Jerel H. Brown...^iiSi

Director ^^::iSS

Richard Co///ns;./n fD/rector ::i.::"i',::i|||

William F. "Bill" Derickson

Director

Fred Herman

Director

Terry Kirkendoll

Director

Bill Conine

CEO/General Manager

3—

"

HOWITWASEARNEDFarm / residential

industrialOther sales to public authoritiesStreet/highwaylightingOther electric revenue

Total

HOW IT WAS USEDPower costInterestOperation / maintenance / transmissionDepreciation / amortizationAdministrative / generalCpnsumer accounting / collecting / informationTaxesMiscellaneousOperating margins

Total

SYSTEM STATISTICS As of December 31

ItemAverage number of meters bi[ted_per rnonthAverage number of meters per mile of lineAverage miles of power line in operation

it by cooperative membersAverage monthly kWh usage by all membersAverage monthly farm / home kWh usage^

Ayerage mpnthlYreyenue per member billedAverage revenue per KWh sold to members *Ayerage revenue per farm / home kWh sold *Average power cost adjustment per kWh sold

Total kWh bought by cooperativeTotal cost of power bought tiy_cooperatsve_Average cost per kWh bought by cooperativePpwer (kWh) required for system operationSystem peak demand (kW)Month of system peak demand

$21,435,455 $21,990,692 $22,381,5607,206,442

617,3027,179,065

670,4757,241,491

689,02296,651 95,805 96,135

677,961 579,504 374,983$30,033,811 $30,515,541 $30,783,191

$16,120,329 $16,381,816 $16,223,5831,894,166 1,920,916 2,054,3304,690,014 4,352,553 4,428,1043,114,724 3,037,174 2,944,5601,992,347 1,976,403 2,012,8461,496,646 1,534,400 1,596,890

630,176 618,670 630,15065,079 54,733 56,46330,330 638,876 836,265

$30,033,811 $30,515,541 $30,783,191

19,931 19,8655.55

3,5885.56

19,8195.55

3,576 3,571

275,974,708 292,912,575 300,259,2701,154 1,229 1,263

896 964 998

$122.74 $125.58 $127.8610.641); 10.22t 10.i3<tii.iSt 10.65t 10.50<t

1.28<t 99<t i.19t

302,550,611 317,866,730 324,711,440$16,120,329 $16,381,816 $16,223,583

5.33t 5.15t 5.00t26,575,903 24,954,155 24,452,170

85,003 84,259 95,903January December

Total capital borrowed from RUS / CFC / COBANJ'<_ $104,070,687 $93,870,687 $87,212,652Total amount repaid to RUS / CFC / COBANK $51,222,704 $49,306,667 $40,781,836Total interest paid to RUS / CFC / COBANK $55,336,889 $53,438,532 $51,532,502

Counties served and property taxes_paid^Cleburne $8,700 $8,616 $8,744Conway 61,148 60,709 60,029Faulkner 47,198 46,869 44,709Marion 562 560 555NewtonPope

4,345 4,317 4,3769,347 9,310

Searcy9,309

166,561 161,933 160,250StoneVan Buren

3,704 3,692 3,644317,151 313,443 310,607

Total property taxes paid $618,716 $609,449 $602,223Other taxes paid by the cooperative 1,460 1,460 1,450Taxes accrued 10,000 7,761Other tax expense

26,477$630,176 $618,670 $630,150

*After Patmnage Capital Retirement