Selling, General and Administrative Expenses
Selling, general and administrative expenses were $1,768,840, which is $95,243 or 5.69% higher in the three months ended June 30, 2014 compared to the three months ended June 30, 2013 and was $3,602,348, which is $129,425 or 3.73% higher in the six months ended June 30, 2014 compared to the six months ended June 30, 2013. These increases were primarily due to higher costs associated with professional and consulting services.
Depreciation and Amortization
Depreciation and amortization was $2,374,748, which is $150,591 or 6.77% higher in the three months ended June 30, 2014 compared to the three months ended June 30, 2013 and was $4,706,529, which is $271,872 or 6.13% higher in the six months ended June 30, 2014 compared to the six months ended June 30, 2013. These increases were due to the increase in our assets, which reflects our continual investment in technology and infrastructure in order to meet our customers demands for products and services.
Operating Income
Operating income was $1,129,331, which is $239,834 or 17.52% lower in the three months ended June 30, 2014 compared to the three months ended June 30, 2013 and was $2,407,211, which is $149,061 or 5.83% lower in the six months ended June 30, 2014 compared to the six months ended June 30, 2013. These decreases were primarily due to an increase in expenses, partially offset by an increase in revenues, all of which are described above.
See Consolidated Statements of Income on Page 3 (for discussion below)
Interest Expense and Other Income
Interest expense was $234,797, which is $75,949 or 24.44% lower in the three months ended June 30, 2014 compared to the three months ended June 30, 2013 and was $469,904, which is $411,992 or 46.72% lower in the six months ended June 30, 2014 compared to the six months ended June 30, 2013. These decreases were primarily due to lower outstanding debt balances and the maturing of several of our swap agreements with CoBank, ACB during 2013 as the variable rate we now pay on that portion of our debt is lower than the fixed rate we were previously paying.
Interest income was $17,878, which is $7,588 or 29.80% lower in the three months ended June 30, 2014 compared to the three months ended June 30, 2013. This decrease was primarily due to a decrease in dividend income earned on our investments. Interest income was $104,000, which is $7,807 or 8.12% higher in the six months ended June 30, 2014 compared to the six months ended June 30, 2013. This increase was primarily due to an increase in dividend income earned on our investments for the period ended June 30, 2014 as compared to the period ended June 30, 2013.
Other income for the six months ended June 30, 2014 and 2013, included a patronage credit earned with CoBank, ACB as a result of our debt agreements with them. The patronage credit allocated and
received in 2014 was $435,319, compared to $521,796 allocated and received in 2013. CoBank, ACB determines and pays the patronage credit annually, generally in the first quarter of the calendar year, based on its results from the prior year. We record these patronage credits as income when they are received.