2022-08-31T08:34:48-05:00 2021-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2021-01-01 850036237 FARMERS ELECTRIC COOPERATIVE INC OF NEW MEXICO FARM 5757624466 PO BOX 550 CLOVIS NM 881020550 ANTONIO SANCHEZ JR CEO 5757624466 2022-08-30 1 ANTONIO SANCHEZ JR 999009999 WILLIAM M MILLER P00439459 8067473806 2022-08-30 X 3 AAL1 IAL1 2021 2022-09-23 18:48:47Z ANTONIO SANCHEZ JR PO BOX 550 CLOVIS NM 881020550 42708107 0 X WWW.FECNM.ORG X 1937 NM TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 7 7 55 0 0 0 0 0 39814487 42307699 454404 394606 929 5802 40269820 42708107 5681 11156 4501392 2631099 4891693 4966699 0 0 0 30822417 34444067 40221183 42053021 48637 655086 135828689 139799971 80725584 82949446 55103105 56850525 NONE 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 15,957 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 0 1 1 0 0 1 53 0 55 1 0 0 0 0 0 42187673 520027 0 0 0 X 7 7 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X X SUZETTE HOWARD ACCOUNTING MANAGER 5757624466 3701 NORTH THORNTON ST CLOVIS NM 881020550 X GEORGE DODGE JR VICE PRESIDENT 2.20 0.30 X X 3712 0 0 DONNIE BIDEGAIN SECRETARY/TREASURER 4.00 0.30 X X 3112 0 0 MICHAEL B WEST PRESIDENT 4.40 0.30 X X 3088 0 0 JUDY SMITH DIRECTOR 3.30 0.30 X 3086 0 0 JUSTIN BARNES DIRECTOR 2.30 0.30 X 2912 0 0 ERNEST RILEY DIRECTOR 4.20 0.30 X 2808 0 0 JOHN PAT WOODS DIRECTOR 2.20 0.30 X 2667 0 0 LANCE R ADKINS GENERAL MANAGER 50.00 X 172260 0 21374 THOMAS J MOORE DIRECTOR OF MEMBER SERVICES 45.00 X 111168 0 59613 SUZETTE HOWARD ACCOUNTING MANAGER 45.00 X 104654 0 64278 DARREL B GOMEZ LINE SUPERINTENDENT 50.00 X 114510 0 148761 BARRY T BASS LINE SUPERINTENDENT 50.00 X 107272 0 116027 HELEN JO WALLIN CUSTOMER SERVICE/HR MANAGER 45.00 X 104967 0 79434 MICHAEL L MCCORD ENGINEERING MANAGER 50.00 X 108177 0 53016 RODRICK W RAGLAND LINE FOREMAN 47.00 X 112894 0 40255 957287 0 582758 10 0 1 0 R & R LINE SERVICES 6022 QUAY ROAD SAN JON NM 88434 LINE CONSTRUCTION 1194339 SGS ENGINEERING LLC 401 50TH STREET LUBBOCK TX 79404 ENGINEERING SERVICES 580849 DD GRID LLC PO BOX 1613 CANYON TX 79015 SUBSTATION CONTRACTOR 502778 SOUTHWEST POWER SOLUTIONS 1912 S 6TH ST TUCUMCARI NM 88401 LINE CONSTRUCTION 474089 LECTRA TECH 5820 MABRY DR CLOVIS NM 88101 INDUSTRIAL ELECTRIC SERVICES 190414 8 X SALES OF ELECTRICITY 221000 41604697 41604697 PATRONAGE DIVIDENDS 221000 688535 688535 SERVICE FEES 221000 14467 14467 42307699 394606 394606 POLE ATTACHMENT INCOME 221000 4302 4302 MISCELLANEOUS REVENUES - HOLE DIG 221000 1500 1500 5802 42708107 42309199 0 398908 X 11156 2631099 554732 2670495 777850 735992 227630 2120699 3708624 PURCHASED POWER 25126383 DISTRIBUTION EXPENSE 2303516 CONSUMER EXPENSE 495839 ADMIN & GENERAL EXPENSE 425330 263676 42053021 1124163 1240378 3250098 3589024 3204245 3463117 2373140 2643977 1107544 909907 145861052 43711018 96329572 102150034 1542731 1845630 25808187 22132052 1089009 1825852 135828689 139799971 4448412 4198676 73970363 76663257 2306809 2087513 80725584 82949446 X 0 0 0 0 55103105 56850525 55103105 56850525 135828689 139799971 X 655086 1092334 X X 0 1 X 1 0 752877 752877 3412811 1140221 2272590 134741206 42570797 92170409 6954158 6954158 102150034 CFC - MEDIUM TERM NOTES 9300000 C PATRONAGE CAPITAL - OTHERS 250715 C PATRONAGE CAPITAL - CFC 298601 C PATRONAGE CAPITAL - FEDERATED 358387 C PATRONAGE CAPITAL - WFEC 1803903 C PATRONAGE CAPITAL - COBANK 29596 C CFC - CAPITAL TERM CERTIFICATES 733108 C INVESTMENTS IN OTHER ASSOCIATED ORGANIZATIONS 5386 C MEMBERSHIPS - OTHER 3710 C MEMBERSHIPS - WFEC 9348646 C 22132052 CONSUMER DEPOSITS 285264 DEFERRED CREDITS - ADVANCES FOR CONSTRUCTION 885479 ACCRUED OPERATING TAXES 916770 2087513 X 42706817 0 42706817 1290 1290 42708107 39420632 0 39420632 2632389 2632389 42053021 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), OR OTHER STATE TAXING AUTHORITY AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XI, LINE 4B - OTHER ADJUSTMENTS: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSE ON FORM 990 1,290. PART XII, LINE 4B - OTHER ADJUSTMENTS: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSE ON FORM 990 1,290. PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 2,631,099. 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 DARREL B GOMEZ LINE SUPERINTENDENT 109035 0 541 0 4934 0 145598 0 3163 0 263271 0 0 0 BARRY T BASS LINE SUPERINTENDENT 104201 0 541 0 2530 0 113648 0 2379 0 223299 0 0 0 LANCE R ADKINS GENERAL MANAGER 162394 0 1522 0 8344 0 17585 0 3789 0 193634 0 0 0 HELEN JO WALLIN CUSTOMER SERVICE/HR MANAGER 99582 0 541 0 4844 0 74326 0 5108 0 184401 0 0 0 THOMAS J MOORE DIRECTOR OF MEMBER SERVICES 105157 0 541 0 5470 0 56090 0 3523 0 170781 0 0 0 SUZETTE HOWARD ACCOUNTING MANAGER 97844 0 541 0 6269 0 57585 0 6693 0 168932 0 0 0 MICHAEL L MCCORD ENGINEERING MANAGER 102303 0 541 0 5333 0 46275 0 6741 0 161193 0 0 0 RODRICK W RAGLAND LINE FOREMAN 107184 0 433 0 5277 0 38171 0 2084 0 153149 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. 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 CONTRIBUTION TO THE PLAN IN LIEU OF THE ACTUARIAL INCREASE ARE EXPENSED IN THE FINANCIAL STATEMENTS. DARREL B. GOMEZ: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 144,544 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,054 TOTAL REPORTED IN COLUMN C $ 145,598 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (144,544) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 36,505 EXPENSE TO THE COOPERATIVE $ 37,559 BARRY BASS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 112,500 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,148 TOTAL REPORTED IN COLUMN C $ 113,648 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (112,500) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 39,349 EXPENSE TO THE COOPERATIVE $ 40,497 LANCE R. ADKINS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 15,921 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,664 TOTAL REPORTED IN COLUMN C $ 17,585 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (15,921) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 58,421 EXPENSE TO THE COOPERATIVE $ 60,085 HELEN JO WALLIN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 43,700 EMPLOYER CONTRIBUTION TO 401(K) PLAN 30,626 TOTAL REPORTED IN COLUMN C $ 74,326 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (43,700) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 36,219 EXPENSE TO THE COOPERATIVE $ 66,845 THOMAS J. MOORE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 54,994 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,096 TOTAL REPORTED IN COLUMN C $ 56,090 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (54,994) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 37,515 EXPENSE TO THE COOPERATIVE $ 38,611 SUZETTE HOWARD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 56,497 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,088 TOTAL REPORTED IN COLUMN C $ 57,585 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (56,497) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 38,244 EXPENSE TO THE COOPERATIVE $ 39,332 MICHAEL MCCORD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 45,142 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,133 TOTAL REPORTED IN COLUMN C $ 46,275 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (45,142) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 39,032 EXPENSE TO THE COOPERATIVE $ 40,165 RODRICK RAGLAND: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 37,251 EMPLOYER CONTRIBUTION TO 401(K) PLAN 920 TOTAL REPORTED IN COLUMN C $ 38,171 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (37,251) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 32,021 EXPENSE TO THE COOPERATIVE $ 32,941 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 A NET INCOME OF $655,086, WHICH IS THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE. NET INCOME REPORTED ON LINE 19 IS ALSO THE RESULT OF THE TRANSFER OF NON-OPERATING MARGINS TO OTHER EQUITIES. 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 THIS TRANSACTION: ADD: UNBILLED REVENUE 12/31/21 $ 944,119 LESS: UNBILLED REVENUE 12/31/20 (689,299) ADD: TRANSFER MARGINS TO OTHER EQUITIES 400,266 (A) - INCREASE EQUALS NET INCOME ON PAGE 1, LINE 19 $ 655,086 (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $ 2,631,099 TOTAL 2021 NET MARGIN PER FINANCIAL STATEMENTS (A + B) $ 3,286,185 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 TRUSTEES. ELECTIONS ARE DONE ON A ONE MEMBER ONE VOTE BASIS BY DISTRICT. 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. AMENDMENT TO THE BYLAWS 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 12C EACH TRUSTEE SHALL ANNUALLY SIGN A STATEMENT WHICH AFFIRMS SUCH PERSON: A.) HAS RECEIVED A COPY OF THE CONFLICT OF INTEREST POLICY B.) HAS READ AND UNDERSTANDS THE POLICY C.) HAS AGREED TO COMPLY WITH THE POLICY FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF TRUSTEES USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN NEW MEXICO AND THE NATION. THE GENERAL MANAGER USES A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICERS AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT NEW MEXICO AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE MAILS AN ANNUAL REPORT TO ALL MEMBERS. INCLUDED IN THE REPORT IS A COPY OF THE THE AUDITED BALANCE SHEET AND INCOME STATEMENT. THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF THE AUDITED FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY AND GOVERNING DOCUMENTS TO ANY MEMBER WHO MAKES A WRITTEN REQUEST FOR A COPY OF ANY SUCH DOCUMENT. THE MEMBER SHALL MAKE A REQUEST FOR INFORMATION AND/OR DOCUMENTS BY SUBMITTING A "MEMBER INFORMATION REQUEST" FORM. THIS PROCEDURE IS CONSISTENT WITH COOPERATIVE POLICY VII-1. THE BYLAWS, FINANCIAL INFORMATION AND A COPY OF THE FORM 990 CAN BE FOUND ON THE COOPERATIVE'S WEBSITE WWW.FECNM.ORG. 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 PALN 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, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH AND LIFE INSURANCE TO ALL ELIGIBLE EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS 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. FORM 990, PART VIII, LINE 2C: 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 VIII, LINE 2B: THE COOPERATIVE AND WESTERN FARMERS ELECTRIC COOPERATIVE (WFEC), A RURAL ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, HAVE ENTERED INTO A WHOLESALE POWER CONTRACT WHERE WFEC WILL PROVIDE THE COOPERATIVE WITH ELECTRIC POWER. AS PART OF THE AGREEMENT THE COOPERATIVE MUST CONTRIBUTE EQUITY TO WFEC IN A MANNER AND AMOUNT SUCH THAT, AS OF JUNE 1, 2026, THE COOPERATIVE HAS CONTRIBUTED EQUITY TO WFEC COMPARABLE TO THE AMOUNT OF EQUITY CONTRIBUTED TO WFEC BY PRIOR EXISTING MEMBERS. THE PURPOSE OF THE CONTRIBUTION IS TO OBTAIN A POWER SUPPLY IN ORDER TO MEET THE TERMS OF THE WHOLESALE PURCHASE CONTRACT. PURUSANT TO APPROVAL BY THE NEW MEXICO PUBLIC REGULATION COMMISSION, THE EQUITY CONTRIBUTION IS RECOVERED MONTHLY FROM THE MEMBERS THROUGH THE SALE OF ELECTRICITY. FORM 990, PART IX: THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE RUS UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED FOR RURAL UTILITIES SERVICE (RUS) ELECTRIC BORROWERS. THE USOA DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1-23. THE COOPERATIVE SEPARETLY 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, 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 $ 3,225,227 LESS: TRUSTEE FEES REPORTED ON FORMS 1099-NEC (21,385) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (145,265) PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING 1,340 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 732,861 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSES INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 220,361 TOTAL WAGES ACCRUED AND OR PAID $ 4,013,139 FORM 990, PART IX, LINE 24: ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 745,931 OFFICE SUPPLIES 111,328 OUTSIDE SERVICES EMPLOYED 25,950 REGULATORY COMMISSION 208,002 MISCELLANEOUS GENERAL 124,375 ASSOCIATION DUES 112,875 CAPITAL CREDIT 27,376 TRUSTEES 46,355 ADVERTISING 38,998 RENTS 800 MAINTENANCE OF GENERAL PLANT 61,991 DUPLICATE CHARGES (CREDIT) (40,660) TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 1,463,321 LESS: RECLASS OF TRUSTEE FEES TO PART IX, LINE 5 (21,385) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (628,752) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (387,854) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 425,330 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 2021 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 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: SALES $ 41,903 TRANSMISSION 218,839 MISCELLANEOUS AND OTHER DEDUCTIONS 2,934 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 263,676 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 2,631,099. PATRONAGE CAPITAL RETIRED - TOTAL -1,574,495. PATRONAGE CAPITAL RETIRED - DISCOUNT 35,981. TRANFERRED EQUITIES -251. FORM 990, PART XII, LINE 2C: FARMERS ELECTRIC COOPERATIVE HAS A SEPARATE AUDIT COMMITTEE RESPONSIBLE FOR OVERSEEING THE FINANCIAL STATEMENT AUDIT AND SELECTING THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. FARMERS ELECTRIC EDUCATION FOUNDATION PO BOX 550 CLOVIS NM 881020550 850348498 TO PROVIDE COLLEGE SCHOLARSHIPS TO ACTIVE MEMBERS AND THEIR FAMILY. NM 501(C)(3) PF FARMERS ELECTRIC COOPERATVIE INC 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 FARMERS ELECTIC EDUCATION FOUNDATION N N/A - LESS THAN $50,000 FARMERS ELECTIC EDUCATION FOUNDATION O N/A - LESS THAN $50,000