2023-11-09T14:30:59-06:00 2022-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2022-01-01 750230385 DEAF SMITH ELECTRIC COOPERATIVE INC DEAF 8063641166 PO BOX 753 HEREFORD TX 79045 TIMOTHY BURKHALTER PRESIDENT/GENERAL MANAGER 8063641166 2023-11-08 1 TIMOTHY BURKHALTER 999009999 0 WILLIAM M MILLER P00439459 8067473806 2023-11-07 X 2 AAL1 IAL1 2022 2023-04-26 12:10:37Z TIMOTHY BURKHALTER PO BOX 753 HEREFORD TX 79045 86716385 0 X WWW.DEAFSMITH.COOP X 1937 TX TO PROVIDE ELECTRICITY TO RURAL AREAS AT COST ON A COOPERATIVE BASIS. 7 7 59 0 0 0 0 0 78047034 86450606 167787 251539 1235476 14240 79450297 86716385 5392 11529 7335991 6447232 5258408 4955767 0 0 0 66850506 75301857 79450297 86716385 0 0 131981381 130870300 22598947 20916838 109382434 109953462 TO PROCURE, DEVELOP, AND DISTRIBUTE RELIABLE ELECTRIC ENERGY TO OUR CUSTOMERS THROUGH A WELL BUILT AND MAINTAINED FACILITY, AND TO PROVIDE SUPPORTING SERVICES WHICH ENHANCE OUR CONSUMERS AND EMPLOYEES SAFETY AND QUALITY OF LIFE. 0 0 SALE OF ELECTRIC ENERGY TO MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 15,159 CONNECTED METERS AT YEAR END. 0 0 0 0 0 0 0 1 0 1 0 1 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 0 0 0 0 0 0 0 0 0 1 14 0 59 1 0 0 0 0 0 85670196 1689814 0 0 0 X 7 7 0 0 0 0 1 1 1 1 0 0 0 1 1 1 0 1 1 1 1 0 X TIMOTHY BURKHALTER GENERAL MANAGER 8063641166 1501 E FIRST STREET HEREFORD TX 79045 X STEVE OLSON VICE CHAIRMAN 4.00 X X 28405 0 0 VICK CHRISTIAN DIRECTOR 5.00 X 34157 0 0 JIM HOELTING CHAIRMAN 6.00 X X 34011 0 0 DANNY HAND SECRETARY/TREASURER 4.30 X X 31036 0 0 MELVIN BETZEN DIRECTOR 4.50 X 32680 0 0 MICHAEL CARLSON DIRECTOR 5.00 X 34195 0 0 ROBERT BOOZER DIRECTOR 5.30 X 29327 0 0 TIMOTHY BURKHALTER PRESIDENT/GENERAL MANAGER 45.00 X 189554 0 82698 JUANITA ALEJANDRE ACCOUNTING MANAGER 40.00 X 148436 0 63822 WILLIAM STEFFENS JOURNEYMAN LINEMAN 40.00 X 127112 0 49504 JOHNNY BELTRAN LINE SUPERINTENDENT 40.00 X 126288 0 57184 JERRY BAIRD JOURNEYMAN LINEMAN 40.00 X 123246 0 42519 BEAU HARMON FOREMAN JOURNEYMAN LINEMAN 40.00 X 120651 0 43257 1059098 0 338984 23 0 1 0 TRI-STATE GENERAL CONTRACTING GROUP LLC 208 CROCKETT ST AMARILLO TX 79106 ROOF REPAIR CONTRACTOR 308977 NISC ONE INNOVATIVE CIRCLE LAKE SAINT LOUIS MO 63367 INFORMATION TECHNOLOGY 145137 2 X SALES OF ELECTRICITY 221000 84750737 84750737 PATRONAGE DIVIDENDS 221000 1699869 1699869 86450606 134072 134072 117467 0 117467 117467 117467 POLE ATTACHMENT INCOME 221000 14240 14240 14240 86716385 86568073 0 148312 X 11529 6447232 496063 3015837 523175 666554 254138 258933 3974445 PURCHASED POWER 67531518 DISTRIBUTION EXPENSE 1377625 ADMIN & GENERAL EXPENSE 1298693 OPERATING TAXES 565812 294831 86716385 X 675554 706624 4750000 5550000 3677272 3041286 1153295 1717269 10761126 9124874 106829084 61889283 45040198 44939801 1126 1126 65507213 65518076 415597 271244 131981381 130870300 3555049 3830960 68614 63599 11933882 10069242 7041402 6953037 22598947 20916838 X 0 0 0 0 109382434 109953462 109382434 109953462 131981381 130870300 X 0 571028 X X 0 1 X 0 0 0 1 X 230235 230235 1158358 972279 186079 105306848 60917004 44389844 133643 133643 44939801 PATRONAGE CAPITAL - CFC 305990 C PATRONAGE CAPITAL - TEC 418657 C PATRONAGE CAPITAL - GSEC 63475479 C CAPITAL TERM CERTIFICATES - CFC 1126193 C OTHER INVESTMENTS IN ASSOC. ORGS. 191757 C 65518076 CONSUMER DEPOSITS 298977 ACCUMULATED PROVISION FOR POST RETIREMENT BENEFITS 2137635 POWER COST RECOVERY - OVERCOLLECTED 2744416 ACCRUED OPERATING TAXES 36005 OTHER ACCRUED LIABILITIES 1282124 DEFERRED CREDITS - UNCLAIMED CHECKS 453880 6953037 X 86712140 -4245 -4245 86716385 0 86716385 80264908 0 80264908 6451477 6451477 86716385 PART IV, LINE 2B: PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED A RURAL SCHOLARSHIP FUND WITH AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. THE AMOUNTS DEPOSITED INTO THE RURAL SCHOLARSHIP FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED FOR SCHOLARSHIPS TO ENABLE STUDENTS FROM RURAL AREAS TO ATTEND COLLEGE, TECHNICAL SCHOOL OR OTHER POST SECONDARY EDUCATION INSTITUTION. ANY AMOUNTS SO DEPOSITED INTO THE RURAL SCHOLARSHIP FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. PART X, LINE 2: THE COOPERATIVE HAS ADOPTED THE "UNCERTAIN TAX POSITIONS" PROVISIONS OF ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA. THE PRIMARY TAX POSITION OF THE COOPERATIVE IS ITS FILING STATUS AS A TAX EXEMPT ENTITY. THE COOPERATIVE DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT ITS TAX POSITION WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE (IRS) AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XI, LINE 2D - OTHER ADJUSTMENTS: MERCHANDISING EXPENSE RECLASSIFIED TO PART IX, LINE 24E -4,245. PART XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 6,447,232. MERCHANDISING EXPENSE RECLASSIFIED FROM REVENUE TO PART IX, LINE 24E 4,245. PART VII: THE AMOUNT OF INVESTMENTS - OTHER SECURITIES ON FORM 990, PAGE 11, PART X, LINE 12 DOES NOT EQUAL OR EXCEED 5% OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY, IN ACCORDANCE WITH IRS INSTRUCTIONS, SCHEDULE D, PART VII HAS BEEN LEFT BLANK. PART IX: THE AMOUNT OF OTHER ASSETS ON FORM 990, PAGE 11, PART X, LINE 15 DOES NOT EQUAL OR EXCEED 5% OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY, IN ACCORDANCE WITH IRS INSTRUCTIONS, SCHEDULE D, PART IX HAS BEEN LEFT BLANK. PART XII, LINE 4B: FOR THE AUDITED FINANCIAL STATEMENTS, THE AMOUNT OF PATRONAGE DIVIDENDS ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS IS REPORTED AS AN INCREASE IN EQUITY AND NOT AS AN EXPENSE. THEREFORE, NET INCOME PER THE AUDITED FINANCIAL STATEMENTS IS REPORTED GROSS OF THE AMOUNT OF PATRONAGE DIVIDENDS THAT ARE EITHER ALLOCATED OR TO BE ALLOCATED AT THE TIME THE AUDITED FINANCIAL STATEMENTS ARE PREPARED. HOWEVER, BECAUSE THE ALLOCATION OF PATRONAGE DIVIDENDS IS ONE ASPECT OF HOW THE COOPERATIVE FULFILLS ITS TAX EXEMPT PURPOSE OF OPERATING ON A COOPERATIVE BASIS, THE AMOUNT OF PATRONAGE DIVIDENDS EITHER ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS IS REPORTED ON FORM 990, PART IX, LINE 4 AS "BENEFITS PAID TO MEMBERS". X 1 1 X X 0 0 0 TIMOTHY BURKHALTER PRESIDENT/GENERAL MANAGER 183866 0 2244 0 3444 0 59544 0 23154 0 272252 0 0 0 JUANITA ALEJANDRE ACCOUNTING MANAGER 140401 0 1767 0 6268 0 52313 0 11509 0 212258 0 0 0 JOHNNY BELTRAN LINE SUPERINTENDENT 119210 0 1556 0 5522 0 34030 0 23154 0 183472 0 0 0 WILLIAM STEFFENS JOURNEYMAN LINEMAN 122062 0 1262 0 3788 0 25000 0 24504 0 176616 0 0 0 JERRY BAIRD JOURNEYMAN LINEMAN 118797 0 1250 0 3199 0 22008 0 20511 0 165765 0 0 0 BEAU HARMON FOREMAN JOURNEYMAN LINEMAN 116420 0 1256 0 2975 0 20103 0 23154 0 163908 0 0 0 PART I, LINE 1A TRAVEL FOR COMPANIONS - THE COOPERATIVE WILL PAY FOR THE TRAVEL EXPENSES OF EACH DIRECTOR'S SPOUSE TO ACCOMPANY THEM DURING A BUSINESS TRIP FOR THE BENEFIT OF THE COOPERATIVE. FIVE INDIVIDUALS REPORTED ON FORM 990, PART VII (CHRISTIAN, HOELTING, BETZEN, CARLSON, AND BOOZER) RECEIVED THIS BENEFIT DURING THE YEAR. PART II, COLUMN C: INCLUDED IN THIS AMOUNT IS THE INCREASE IN ACTUARIAL VALUE OF BENEFITS PAYABLE UNDER A DEFINED BENEFIT RETIREMENT PLAN. THE CONTRIBUTION RATE FOR PARTICIPANTS IN THE NRECA R&S DEFINED BENEFIT PENSION PLAN ARE THE SAME FOR ALL INDIVIDUALS IN THIS MULTI-EMPLOYER PLAN. THE CHANGE IN ACTUARIAL VALUE FOR EACH PARTICIPANT, HOWEVER, VARIES WITH AGE. IN OTHER WORDS, THE OLDER A PLAN PARTICIPANT IS, THE GREATER THE INCREASE IN THAT INDIVIDUAL'S CHANGE IN ACTUARIAL VALUE, ALL OTHER THINGS BEING EQUAL. BECAUSE THIS RELATES TO A MULTI-EMPLOYER PLAN, CASH CONTRIBUTIONS TO THE PLAN IN LIEU OF THE ACTUARIAL INCREASE ARE EXPENSED IN THE FINANCIAL STATEMENTS. TIMOTHY BURKHALTER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 42,744 EMPLOYER CONTRIBUTION TO 401(K) PLAN 16,800 TOTAL REPORTED IN COLUMN C $ 59,544 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (42,744) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 22,757 EXPENSE TO THE COOPERATIVE $ 39,557 JANIE ALEJANDRE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 39,677 EMPLOYER CONTRIBUTION TO 401(K) PLAN 12,636 TOTAL REPORTED IN COLUMN C $ 52,313 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (39,677) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 17,118 EXPENSE TO THE COOPERATIVE $ 29,754 JOHNNY BELTRAN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 23,049 EMPLOYER CONTRIBUTION TO 401(K) PLAN 10,981 TOTAL REPORTED IN COLUMN C $ 34,030 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (23,049) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 14,315 EXPENSE TO THE COOPERATIVE $ 25,296 WILLIAM STEFFENS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 16,373 EMPLOYER CONTRIBUTION TO 401(K) PLAN 8,627 TOTAL REPORTED IN COLUMN C $ 25,000 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (16,373) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 11,228 EXPENSE TO THE COOPERATIVE $ 19,855 JERRY BAIRD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 12,504 EMPLOYER CONTRIBUTION TO 401(K) PLAN 9,504 TOTAL REPORTED IN COLUMN C $ 22,008 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (12,504) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 12,357 EXPENSE TO THE COOPERATIVE $ 21,861 BEAU HARMON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 10,636 EMPLOYER CONTRIBUTION TO 401(K) PLAN 9,467 TOTAL REPORTED IN COLUMN C $ 20,103 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (10,636) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 12,357 EXPENSE TO THE COOPERATIVE $ 21,824 ELAINA BURKHALTER FAMILY RELATIONSHIP - OFFICER (T. BURKHALTER) 28628 EMPLOYMENT 0 FORM 990, PART VI, SECTION A, LINE 6 THE COOPERATIVE WAS FORMED BY THE MEMBERS TO PROVIDE ELECTRIC SERVICE AT COST ON A COOPERATIVE BASIS. FORM 990, PART VI, SECTION A, LINE 7A THE MEMBERS OF THE COOPERATIVE VOTE ON THE BOARD OF DIRECTORS. ELECTIONS ARE DONE ON A ONE MEMBER ONE VOTE BASIS. FORM 990, PART VI, SECTION A, LINE 7B THE FOLLOWING ACTS REQUIRE APPROVAL OF THE MEMBERS OF THE COOPERATIVE: 1. AMENDMENTS TO THE ARTICLES OF INCORPORATION 2. DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS 3. DISSOLUTION/LIQUIDATION OF THE COOPERATIVE 4. MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION FORM 990, PART VI, SECTION A, LINE 8B THE COOPERATIVE HAS NO COMMITTEES WITH AUTHORITY TO ACT ON BEHALF OF THE GOVERNING BODY. THEREFORE, AND PURSUANT TO FORM 990 INSTRUCTIONS, THE QUESTION HAS BEEN ANSWERED "NO". FORM 990, PART VI, SECTION B, LINE 11B MANAGEMENT PRESENTED A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION AND REVIEW PRIOR TO FILING. THE DISCUSSION AND REVIEW WAS PERFORMED AT THE BOARD MEETING IMMEDIATELY BEFORE THE FILING OF THE FORM 990. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD UTILIZES INTERNAL RESOURCES AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S GENERAL MANAGER AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT TEXAS AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. THE COOPERATIVE MAILS A COPY OF THE AUDITED BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE IN THE ANNUAL MEETING NOTICE. FORM 990, PART VII, COLUMN F: IN ORDER TO PROVIDE RETIREMENT BENEFITS TO ITS EMPLOYEES, THE COOPERATIVE HAS ESTABLISHED A DEFINED CONTRIBUTION PLAN UNDER SECTION 401(K) OF THE INTERNAL REVENUE CODE. EMPLOYER CONTRIBUTIONS TO THE PLAN ARE MADE PURSUANT TO THE PLAN DOCUMENT. ADDITIONALLY, THE COOPERATIVE PARTICIPATES IN A MULTI-EMPLOYER DEFINED BENEFIT PLAN. CONTRIBUTIONS TO THIS PLAN ARE BASED ON THE FULL FUNDING LIMITATION OF SUCH PLAN. EMPLOYER CONTRIBUTIONS FOR BOTH PLANS ARE AVAILABLE TO PARTICIPATING EMPLOYEES, INCLUDING OFFICERS AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH, DENTAL, AND LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS AND HIGHLY COMPENSATED EMPLOYEES, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICER OR HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE TOTAL AMOUNT CONTRIBUTED BY THE COOPERATIVE TO THE DEFINED CONTRIBUTION PLAN AND INSURANCE PAID ON BEHALF OF AND FOR THEIR BENEFIT. IN ADDITION TO THE ABOVE PENSION PLANS, THE COOPERATIVE ALSO PROVIDES POST-RETIREMENT HEALTH INSURANCE BENEFITS THROUGH AN UNFUNDED WELFARE BENEFIT PLAN. THE VALUE OF THESE BENEFITS HAS NOT ESTIMATED. FORM 990, PART VII, SECTION A: THE BOARD OF DIRECTORS CONSIDER THE GENERAL MANAGER TO BE BOTH THE TOP MANAGEMENT OFFICIAL AND THE TOP FINANCIAL OFFICIAL. THEREFORE, ONLY THE GENERAL MANAGER IS LISTED AS AN EMPLOYEE OFFICER. FORM 990, PART VIII, LINE 2B: PATRONAGE DIVIDENDS RESULT FROM THE PURCHASE OF WHOLESALE POWER FROM A GENERATION & TRANSMISSION COOPERATIVE. PATRONAGE DIVIDENDS ALSO RESULT FROM THE PAYMENT OF INTEREST FROM COOPERATIVE BANKS AND THE PURCHASE OF SUPPLIES AND SERVICES FROM OTHER COOPERATIVE ORGANIZATIONS. THE EXPENSES ASSOCIATED WITH PURCHASES FROM AND PAYMENTS TO SUCH COOPERATIVE ORGANIZATIONS ARE A DIRECT COMPONENT OF COST OF THE ELECTRIC SERVICE PROVIDED BY THE COOPERATIVE TO ITS MEMBERS. FORM 990, PART IX: ALTHOUGH THE COOPERATIVE IS NO LONGER AN RUS BORROWER, ITS ACCOUNTING RECORDS ARE MAINTAINED IN ACCORDANCE WITH THE RUS UNIFORM SYSTEM OF ACCOUNTS (USOA) PRESCRIBED FOR RUS ELECTRIC BORROWERS. THE USOA DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1-23. THE COOPERATIVE SEPARATELY REPORTS SALARIES AND WAGES, EMPLOYEE BENEFITS AND PAYROLL TAXES THAT ARE ALLOCATED IN ACCORDANCE WITH ITS ACCOUNTING SYSTEM, BUT OTHER EXPENSES THAT ARE DESCRIBED IN LINES 1-23 ARE REPORTED ON LINE 24 UNDER THE EXPENSE CATEGORIES REQUIRED BY THE USOA. FORM 990, PART IX, LINE 4: PURSUANT TO THE FORM 990 INSTRUCTIONS, THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE MEMBERS (HEREINAFTER REFERRED TO AS "PATRONS") SHOULD BE REPORTED ON PART IX, LINE 4. THE PHRASE "PATRONAGE DIVIDENDS PAID" REFERS TO THE PROCESS, SUBSEQUENT TO YEAR-END, BY WHICH THE COOPERATIVE ALLOCATES PATRONAGE CAPITAL TO AND, THEREFORE, OPERATES AT COST WITH ITS PATRONS. THE COOPERATIVE'S TAX EXEMPT PURPOSE IS TO PROVIDE ELECTRICITY TO ITS PATRONS AND TO DO SO ON A COOPERATIVE BASIS. TAX LAW DEFINES "OPERATING ON A COOPERATIVE BASIS" AS SUBORDINATION OF CAPITAL, DEMOCRATIC CONTROL, AND OPERATION AT COST. THE COOPERATIVE OPERATES AT COST THROUGH THE ALLOCATION OF TRUE PATRONAGE DIVIDENDS (ALSO REFERRED TO AS ALLOCATIONS OF PATRONAGE CAPITAL) TO ITS PATRONS. PATRONAGE DIVIDENDS ARE CONSIDERED PAID IF THE ALLOCATION IS MADE (1) PURSUANT TO A PRE-EXISTING OBLIGATION, (2) FROM THE MARGINS PRODUCED FROM THE TRANSACTIONS DONE WITH OR FOR PATRONS, AND (3) IN A FAIR AND EQUITABLE MANNER ON THE BASIS OF PATRONAGE (I.E. PURCHASES). ADDITIONALLY, THE ALLOCATION OF PATRONAGE DIVIDENDS SHOULD BE MADE WITHIN A REASONABLE TIME PERIOD AFTER THE CLOSE OF THE COOPERATIVE'S YEAR-END OF DECEMBER 31. EACH ONE OF THESE REQUIREMENTS FOR A TRUE PATRONAGE DIVIDEND IS PROVIDED FOR IN THE NON-PROFIT OPERATION ARTICLE OF THE COOPERATIVE'S BYLAWS. THE AMOUNT REPORTED ON PART IX, LINE 4 REPRESENTS THE AMOUNT OF PATRONAGE CAPITAL THAT IS EITHER ALLOCATED OR TO BE ALLOCATED TO THE PATRONS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2022 CALENDAR YEAR. BECAUSE PATRONAGE DIVIDENDS ARE THE PROCESS BY WHICH THE COOPERATIVE OPERATES AT COST WITH ITS PATRONS AND THEREBY A KEY COMPONENT TO ACCOMPLISHING ITS EXEMPT PURPOSE, THE COOPERATIVE HAS REPORTED SUCH AMOUNTS AS AN EXPENSE FOR FORM 990 REPORTING. PATRONAGE DIVIDENDS ARE NOT AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, HOWEVER. FORM 990, PART IX, LINE 1: ALL GRANTS, SPONSORSHIPS, AND/OR DONATIONS ARE MADE TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA, AND ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. EACH GRANT, SPONSORSHIP, AND/OR DONATION MADE DURING THE YEAR WAS BELOW THE REPORTING THRESHOLD OF SCHEDULE I, PART II. FORM 990, PART IX, LINES 5-7: SALARIES AND WAGES ARE ALLOCATED TO ASSET, LIABILITY, AND EXPENSE ACCOUNTS BASED ON THE ACCOUNTING SYSTEM DESCRIBED ABOVE. THE FOLLOWING SCHEDULE RECONCILES AMOUNTS REPORTED ON LINES 5-7 TO TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 3,511,900 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (223,811) LESS: EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (82,698) PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGIN 1,348 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,084,306 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 284,492 TOTAL WAGES PAID AND/OR ACCRUED $ 4,575,537 FORM 990, PART IX, LINE 24: ADMINISTRATIVE AND GENERAL EXPENSES IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 604,512 OFFICE SUPPLIES 204,386 OUTSIDE SERVICES EMPLOYED 63,081 PROPERTY INSURANCE 191,366 INJURIES AND DAMAGES 21,874 PENSION AND BENEFITS 472,285 DIRECTORS 310,135 DUES PAID TO ASSOCIATED ORGANIZATIONS 58,228 MISCELLANEOUS GENERAL 118,658 MAINTENANCE OF GENERAL PLANT 395,160 DUPLICATE CHARGES - CREDIT (23,702) TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 2,415,983 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (11,529) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (223,811) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (562,565) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (319,385) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 1,298,693 FORM 990, PART IX, LINE 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: CONSUMER ACCOUNTS $ 120,601 CUSTOMER SERVICE & INFORMATION 67,419 MERCHANDISING EXPENSE 4,245 TRANSMISSION 56,054 SALES EXPENSE 46,512 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 294,831 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 6,447,232. OTHER COMPREHENSIVE INCOME(LOSS) PROVISION FOR PENSIONS AND BENEFITS 1,323,794. PATRONAGE CAPITAL RETIRED - TOTAL -7,199,998. FORM 990, PART XII, LINE 2C: THE BOARD AS A WHOLE IS RESPONSIBLE FOR OVERSEEING THE FINANCIAL STATEMENT AUDIT AND SELECTING THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. PROCEDURAL CHANGES DID NOT OCCUR DURING THE YEAR.