2023-11-15T23:50:20-06:00 2022-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2022-01-01 710139955 PETIT JEAN ELECTRIC COOPERATIVE CORPORATION PETI 5017452493 PO BOX 37 CLINTON AR 72031 DONNIE COLLINS PRESIDENT 5017452493 2023-11-15 1 DONNIE COLLINS 999009999 0 WILLIAM M MILLER P00439459 8067473806 2023-10-25 X 2 AAL1 IAL1 2022 2023-04-26 12:10:37Z MICHAEL KIRKLAND PO BOX 37 CLINTON AR 72031 46750045 0 X WWW.PJECC.COM X 1940 AR TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS AT COST ON A COOPERATIVE BASIS. 9 9 80 0 3331049 0 0 0 38642372 42689747 468739 402735 1621888 3654850 40732999 46747332 6838 6803 2194902 3601291 5770494 6217237 0 0 0 32425136 36172092 40397370 45997423 335629 749909 119449116 166442334 75104956 118982668 44344160 47459666 TO PROVIDE RELIABLE AND QUALITY ELECTRIC SERVICE AT FAIR AND COMPETITIVE PRICES. WE PROVIDE LEADERSHIP WITHIN LOCAL COMMUNITIES TO FACILITATE POSITIVE GROWTH WITHIN OUR SERVICE AREA. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 20,778 ACTIVE SERVICES AT YEAR END. 0 0 0 0 0 0 0 0 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 0 0 0 0 0 0 1 0 0 0 1 50 0 80 1 0 0 0 0 0 42962017 4740300 0 0 0 X 9 9 1 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X MARIANNE PYEATT MANAGER OF FINANCE AND ACCOUNTING 5017452493 270 QUALITY DR CLINTON AR 72031 X RICHARD COLLINS JR DIRECTOR 9.00 X 38305 0 0 FREDERICK HERMAN SECRETARY/TREASURER 4.50 X X 34233 0 0 DARRELL ALLEN DIRECTOR 6.50 X 30514 0 0 TERRY KIRKENDOLL DIRECTOR 5.20 X 28851 0 0 WILLIAM DERICKSON DIRECTOR 1.90 X 28618 0 0 DONNIE COLLINS PRESIDENT 3.30 X X 28283 0 0 ADDISON WOOD DIRECTOR 4.50 X 27964 0 0 JEREL BROWN DIRECTOR 3.50 X 25355 0 0 GILBERT LEWIS DIRECTOR (JUNE-DEC) 6.10 X 16995 0 0 MICHAEL KIRKLAND CEO/GENERAL MANAGER 55.00 X 356581 0 315239 MARIANNE PYEATT MANAGER OF FINANCE AND ACC 60.00 X 124788 0 61864 JOHNNY MOORE MANAGER OF OPERATIONS 50.00 X 122580 0 97806 MICHAEL GARBOW MANAGER OF ENGINEERING 46.70 X 128090 0 88055 WILLIAM GREEN BROADBAND MANAGER 72.00 X 134315 0 72768 WILLIAM TESTER BRANCH MANAGER 60.00 X 124169 0 82139 SHAWN BIGGS SYSTEM ENGINEER 47.00 X 111445 0 41142 1361086 0 759013 10 0 1 0 MDR CONSTRUCTION 321 EAST BAYLIS CHAPEL ROAD COLUMBIA MS 39429 MAKE READY CONSTRUCTION FIBER 10981940 ERVIN CABLE PO BOX 932157 ATLANTA GA 31193 CONSTRUCTION FIBER 5447830 CONEXON LLC 2001 GRAND BLVD STE 700 KANSAS CITY MO 64108 FIBER PROJECT MANAGEMENT 3793630 ARKANSAS ELECTRIC COOPERATIVE INC PO BOX 190257 LITTLE ROCK AR 72219 CONSTRUCTION/ROW 2675154 TECHLINE INC PO BOX 674005 DALLAS TX 75267 CONSTRUCTION FIBER 2218232 16 X SALES OF ELECTRICITY 221000 41996754 41996754 PATRONAGE DIVIDENDS 221000 486746 486746 SERVICE FEES 221000 179825 179825 OTHER PROGRAM REVENUE 221000 26422 26422 42689747 402735 402735 15948 15948 4591 2713 1878 1878 BROADBAND INTERNET SALES 517000 3422101 3422101 POLE ATTACHMENT INCOME 221000 305975 305975 BROADBAND P'SHIP LOSS 221000 -91052 -91052 3637024 46747332 42691625 3331049 724658 X 6803 3601291 1117590 3099554 885893 854166 260034 2741197 4655917 PURCHASED POWER 23533335 DISTRIBUTION EXPENSE 2625728 ADMIN & GENERAL EXPENSE 1130683 OPERATING TAXES 753295 731937 45997423 1131763 1789722 4702708 109400 3384368 4110721 2961079 4618915 540236 192572 180723522 39036126 93571026 141687396 12188201 12036525 220686 222399 749049 1674684 119449116 166442334 5928724 12558136 62649678 100623942 6526554 5800590 75104956 118982668 X 322050 325180 0 0 44022110 47134486 44344160 47459666 119449116 166442334 X 749909 2365597 X X 0 1 X 0 0 2600271 2600271 3904196 1357369 2546827 123633865 37678757 85955108 50585190 50585190 141687396 PATRONAGE CAPITAL - AECC 9674156 C PATRONAGE CAPITAL - AECI 477156 C PATRONAGE CAPITAL - CFC 306858 C PATRONAGE CAPITAL - FEDERATED 348840 C PATRONAGE CAPITAL - NISC 205107 C CAPITAL TERM CERTIFICATES - CFC 754935 C ARKANSAS RURAL ELECTRIC SELF-INS TRUST 58834 C DIAMOND STATE NETWORK 204815 C OTHER INVESTMENTS IN ASSOCIATED ORGANIZATIONS 5824 C 12036525 ACCUMULATED PROVISION FOR POST RETIREMENT BENEFITS 2150613 CONSUMER DEPOSITS 1607419 ACCRUED PROPERTY TAXES 765900 REFUNDABLE AID TO CONSTRUCTION 103257 UNCLAIMED CAPITAL CREDITS 1173401 5800590 X 46747332 0 46747332 0 46747332 42396132 0 42396132 3601291 3601291 45997423 PART X, LINE 2: THE COOPERATIVE FOLLOWS 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 XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 3,601,291. 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 X 0 0 0 MICHAEL KIRKLAND CEO/GENERAL MANAGER 348254 0 118 0 8209 0 289418 0 25821 0 671820 0 0 0 JOHNNY MOORE MANAGER OF OPERATIONS 116251 0 330 0 5999 0 75827 0 21979 0 220386 0 0 0 MICHAEL GARBOW MANAGER OF ENGINEERING 122612 0 276 0 5202 0 63829 0 24226 0 216145 0 0 0 WILLIAM GREEN BROADBAND MANAGER 132697 0 157 0 1461 0 45815 0 26953 0 207083 0 0 0 WILLIAM TESTER BRANCH MANAGER 114178 0 347 0 9644 0 56596 0 25543 0 206308 0 0 0 MARIANNE PYEATT MANAGER OF FINANCE AND ACC 123192 0 119 0 1477 0 36043 0 25821 0 186652 0 0 0 SHAWN BIGGS SYSTEM ENGINEER 109027 0 114 0 2304 0 11103 0 30039 0 152587 0 0 0 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, YEARS OF SERVICE AND THE CURRENT INTEREST RATE ENVIRONMENT. 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. MICHAEL KIRKLAND: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 271,956 EMPLOYER CONTRIBUTION TO 401(K) PLAN 17,462 TOTAL REPORTED IN COLUMN C $ 289,418 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (271,956) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 97,552 EXPENSE TO THE COOPERATIVE $ 115,014 JOHNNY MOORE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 69,757 EMPLOYER CONTRIBUTION TO 401(K) PLAN 6,070 TOTAL REPORTED IN COLUMN C $ 75,827 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (69,757) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 42,763 EXPENSE TO THE COOPERATIVE $ 48,833 MICHAEL GARBOW: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 57,329 EMPLOYER CONTRIBUTION TO 401(K) PLAN 6,500 TOTAL REPORTED IN COLUMN C $ 63,829 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (57,329) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 47,381 EXPENSE TO THE COOPERATIVE $ 53,881 WILLIAM GREEN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 38,975 EMPLOYER CONTRIBUTION TO 401(K) PLAN 6,840 TOTAL REPORTED IN COLUMN C $ 45,815 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (38,975) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 40,582 EXPENSE TO THE COOPERATIVE $ 47,422 WILLIAM TESTER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 50,753 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,843 TOTAL REPORTED IN COLUMN C $ 56,596 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (50,753) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 42,763 EXPENSE TO THE COOPERATIVE $ 48,606 MARIANNE PYEATT: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 29,735 EMPLOYER CONTRIBUTION TO 401(K) PLAN 6,308 TOTAL REPORTED IN COLUMN C $ 36,043 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (29,735) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 34,537 EXPENSE TO THE COOPERATIVE $ 40,845 SHAWN BIGGS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 6,175 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,928 TOTAL REPORTED IN COLUMN C $ 11,103 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (6,175) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 11,712 EXPENSE TO THE COOPERATIVE $ 16,640 FORM 990, PART I: IN GENERAL, WHEN AN ELECTRIC COOPERATIVE BASES THE PATRONAGE DIVIDEND CALCULATION ON ITS NET BOOK INCOME/(LOSS), PAGE 1, PART I, LINE 19 - REVENUE LESS EXPENSES - WILL BE $0. FOR THE CURRENT YEAR, PAGE 1, PART I, LINE 19 REPORTS NET INCOME OF $749,909, WHICH IS THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE. THE GAAP BASIS FINANCIAL STATEMENTS INCLUDE AN ACCRUAL FOR UNBILLED REVENUE BECAUSE THE COOPERATIVE'S BILLING CYCLE DOES NOT END ON THE LAST DAY OF THE MONTH. THEREFORE, IT HAS REVENUE IN DECEMBER OF EACH YEAR THAT IT HAS EARNED BUT WILL NOT BILL UNTIL THE FIRST BILLING CYCLE OF THE FOLLOWING YEAR. THE COOPERATIVE ESTIMATES THIS REVENUE AND RECORDS IT AS ACCRUED UNBILLED REVENUE IN ORDER TO MATCH THE REVENUE WITH THE YEAR EARNED. HOWEVER, THE COOPERATIVE ALLOCATES THE REVENUE TO MEMBERS IN THE YEAR IT IS BILLED RATHER THAN WHEN ACCRUED. THIS TIMING DIFFERENCE IS FAIR AND EQUITABLE BECAUSE IT MATCHES THE PATRONAGE DIVIDEND ALLOCATED WITH THE BILLING RECORDS USED TO ALLOCATE THE MARGINS. DUE TO THE TIMING OF WHEN THE COOPERATIVE ALLOCATES ACCRUED UNBILLED REVENUE, PAGE 1, PART I, LINE 19 ANNUALLY REPORTS NET INCOME EQUAL TO THE NET INCREASE IN ACCRUED UNBILLED REVENUE OR A NET LOSS EQUAL TO THE NET DECREASE IN UNBILLED REVENUE. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THESE TRANSACTIONS: ADD: UNBILLED REVENUE 12/31/22 $ 1,490,646 LESS: UNBILLED REVENUE 12/31/21 (740,737) (A) - NET INCREASE IN UNBILLED REVENUE $ 749,909 (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $ 3,601,291 TOTAL 2022 NET MARGIN (A + B) $ 4,351,200 FORM 990, PART VI, SECTION A, LINE 2 BUSINESS RELATIONSHIP: TERRY KIRKENDOLL (DIRECTOR), DARRELL ALLEN (DIRECTOR), JEREL BROWN (DIRECTOR) AND MICHAEL KIRKLAND (CEO) SERVED ON THE BOARD OF ARKANSAS ELECTRIC COOPERATIVE CORPORATION (AECC) AT THE REQUEST OF AND FOR THE BENEFIT OF THE COOPERATIVE. FREDERICK HARMAN (DIRECTOR) AND MICHAEL KIRKLAND (CEO) SERVED ON THE BOARD OF ARKANSAS ELECTRIC COOPERATIVES, INC. (AECI) AT THE REQUEST OF AND FOR THE BENEFIT OF THE COOPERATIVE. 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 THROUGH VOTING DISTRICTS. BASED ON GEOGRAPHICAL LOCATION, THE MEMBERS ARE ASSIGNED TO A DISTRICT AND REPRESENTED BY A DIRECTOR VOTED ON AND LIVING IN THE RESPECTIVE DISTRICT. EVERY FIVE YEARS AT THE END OF THE RESPECTIVE DIRECTOR'S TERM, ELECTIONS ARE DONE ON A ONE MEMBER ONE VOTE BASIS. PURSUANT TO THE REQUIREMENTS OF ARTICLE IV, SECTION 6 OF THE BYLAWS, MEMBERS ALSO HAVE THE ABILITY TO PETITION AND VOTE FOR THE REMOVAL OF A DIRECTOR. FORM 990, PART VI, SECTION A, LINE 7B THE FOLLOWING ACTS REQUIRE APPROVAL OF THE MEMBERS OF THE COOPERATIVE: 1. DISSOLUTION/LIQUIDATION OF THE COOPERATIVE 2. MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION 3. DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS 4. AMENDMENT TO THE ARTICLES OF INCORPORATION 5. MEMBER INITIATED PROPOSALS 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. FORM 990, PART VI, SECTION B, LINE 12C THE BOARD OF DIRECTORS AND OFFICERS ARE RESPONSIBLE TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY. THE BOARD OF DIRECTORS AND OFFICERS ARE REQUIRED TO ANNUALLY COMPLETE A DISCLOSURE OF ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS IS RESPONSIBLE FOR DETERMINING THE COMPENSATION FOR THE CEO BASED ON AN ANNUAL REVIEW. INTERNAL AND/OR EXTERNAL RESOURCES ARE ALSO USED TO COMPARE ANNUAL COMPENSATION WITHIN THE INDUSTRY. THE BOARD OF DIRECTORS AND CEO DETERMINES COMPENSATION FOR OFFICERS OF THE COOPERATIVE ANNUALLY BASED ON A COMPENSATION SURVEY. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE PROVIDES A COPY OF THE BYLAWS AT THE TIME AN APPLICATION FOR SERVICE IS COMPLETED. ADDITIONALLY, THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF ITS GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. ANNUALLY, THE COOPERATIVE MAILS A COPY OF THE ANNUAL REPORT, WHICH INCLUDES FINANCIAL STATEMENTS AND RELEVANT FINANCIAL DATA FOR THE PAST THREE YEARS. ADDITIONAL INFORMATION REPORTED TO THE ARKANSAS PUBLIC SERVICE COMMISSION (APSC) IS AVAILABLE TO THE PUBLIC ON THE ASPC WEBSITE. 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, VISION AND LIFE INSURANCE TO ALL ELIGIBLE EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR OFFICERS AND THE HIGHLY COMPENSATED EMPLOYEE IS COMPRISED OF 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 BEEN ESTIMATED. FORM 990, PART VIII, LINE 2: 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: THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE RURAL UTILITIES SERVICE (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 THEIR 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 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, 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 $ 4,217,144 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (259,118) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (377,103) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 2,082,793 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 265,879 TOTAL WAGES ACCRUED AND/OR PAID $ 5,929,595 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 1,207,291 OFFICE SUPPLIES 229,337 OUTSIDE SERVICES 227,049 INSURANCES 79,959 DIRECTORS 314,384 ANNUAL MEETING 14,674 MISCELLANEOUS GENERAL 186,802 REGULATORY COMMISSION 72,604 MAINTENANCE OF GENERAL PLANT 118,695 PETIT JEAN FIBER EXPENSES 816,598 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 3,267,393 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (3,300) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (259,118) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,126,479) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (747,813) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 1,130,683 FORM 990, PART IX, LINE 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: CONSUMER ACCOUNTS $ 388,273 CUSTOMER SERVICE AND INFORMATION 362,903 TRANSMISSION 28 COST OF FIBER ACCESS 51,715 OTHER DEDUCTIONS 40,805 PROVISION FOR FEDERAL AND STATE INCOME TAXES (111,787) TOTAL OTHER EXPENSES PER FORM 990, PART IX $ 731,937 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 XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 3,601,291. PATRONAGE CAPITAL RETIRED -1,899,282. UNCLAIMED PATRONAGE CAPITAL RETIREMENTS RETAINED PER STATE LAW 435,263. NET CHANGE IN MEMBERSHIPS 3,130. OTHER COMPREHENSIVE INCOME PROVISION FOR POST-RETIREMENT BENEFIT OBLIGATION 225,195. PETIT JEAN FIBER LLC PO BOX 37 CLINTON AR 72031 BROADBAND INTERNET SERVICE AR 3422101 2942548 PETIT JEAN ELECTRIC COOPERATIVE