2021-06-14T16:34:03-05:00 2020-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2020-01-01 730375825 NORTHWESTERN ELECTRIC COOPERATIVE INC NORT 5802567425 PO BOX 2707 WOODWARD OK 73802 TYSON LITTAU CEO 5802567425 2021-06-11 1 TYSON LITTAU 999009999 WILLIAM M MILLER P00439459 8067473806 2021-06-11 X 2 AAL1 IAL1 2020 2022-09-23 18:48:47Z TYSON LITTAU PO BOX 2707 WOODWARD OK 73802 33508257 0 X WWW.NWECOK.COOP X 1940 OK TO PROVIDE ELECTRIC POWER TO RURAL AREAS AT COST ON A COOPERATIVE BASIS. 9 9 58 0 74415 0 0 0 33908232 33154949 106062 95000 90551 90665 34104845 33340614 27146 23364 1480957 1764441 5470570 5592379 0 0 0 27126172 25960430 34104845 33340614 0 0 102650185 112170840 71125365 79133812 31524820 33037028 THE COOPERATIVE'S RESPONSIBILITY AND AIM IS TO PROVIDE EXCELLENT AND INNOVATIVE CUSTOMER SERVICE AS REFLECTED IN TOP QUALITY ELECTRIC SERVICE RELIABILITY, AFFORDABLE RATES, EMPLOYEE TEAMWORK AND THE HIGHEST DEGREE OF INTEGRITY IN ALL COOPERATIVE ENDEAVORS. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 11,829 ACTIVE SERVICES AT YEAR END WERE PROVIDED ELECTRICITY ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. 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 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 46 0 58 1 1 1 0 0 0 0 33113219 765224 0 0 0 X 9 9 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 0 0 OK X TYSON LITTAU CEO 5802567425 2925 WILLIAMS AVENUE WOODWARD OK 73801 X TYSON LITTAU CEO 50.00 X 227005 0 125159 JARET DOWLER DIRECTOR OF ENGINEERING/OPERATIONS 50.00 X 134129 0 92871 JAMIE RUBLE DIRECTOR OF FINANCE & ADMINISTRATION 43.70 X 123988 0 83394 BRENT MCDOWELL DIRECTOR OF SAFETY 50.00 X 108264 0 112802 KURT HALLING LINE FOREMAN 49.00 X 109617 0 36102 ROBERT BOHLING JOURNEYMAN LINEMAN 48.00 X 105160 0 71890 MARVIN WILKINSON TRUSTEE 4.40 X 24476 0 0 JEFF MCINTOSH TRUSTEE 3.00 X 19846 0 0 JOHN BRUCE JR SECRETARY/TREASURER 3.50 X X 19560 0 0 KENNETH KNOWLES PRESIDENT 4.00 X X 19246 0 0 DARLA YOUNG TRUSTEE 4.20 X 18946 0 0 CLAIR CRAIGHEAD TRUSTEE 3.70 X 18796 0 0 RAY SMITH VICE PRESIDENT 2.50 X X 18796 0 0 DUANE HENDERSON TRUSTEE 2.80 X 18660 0 0 GILBERT PERKINS TRUSTEE 3.70 X 12126 0 0 978615 0 522218 8 0 1 0 RES SYSTEM 3 LLC 1610 ARDEN WAY STE 280 SACRAMENTO CA 95815 ELECTRIC DISTRIBUTION 19158154 POWER CONSULTING ASSOCIATES 880 GREEN LEA BLVD STE B GALLATIN TN 37066 INSPECTIONS 1499825 RMA ENGINEERING LLC 2975 BLOSSER DR CONCORDIA KS 66901 STAKING 653666 RIGGS TREE SERVICE INC PO BOX 453225 GROVE OK 74345 TREE TRIMMING AND RIGHT OF WAY MAINT. 522678 COX MCCLAIN ENVIRONMENTAL CONSULTING 8401 SHOAL CREEK BLVD AUSTIN TX 78757 ENVIRONMENTAL 429550 6 X SALES OF ELECTRICITY 221000 32383654 32383654 PATRONAGE DIVIDENDS 221000 649828 649828 DISTRIBUTION LINE LEASE 221000 66786 66786 SERVICE FEES 221000 41595 41595 OTHER PROGRAM REVENUE 221000 13086 13086 33154949 51518 51518 24 24 176425 132943 43482 43482 43482 41028 34700 6328 6328 BILLING REVENUE 561499 74415 74415 POLE ATTACHMENT INCOME 221000 9898 9898 84313 33340614 33161277 74415 104922 X 17114 6250 1764441 522616 3140319 776798 914539 238107 2272302 3050218 PURCHASED POWER 17809889 ADMIN & GENERAL EXPENSE 869094 DISTRIBUTION EXPENSE 742165 OPERATING TAXES 735129 481633 33340614 1721200 1279127 4098136 2506989 375201 659526 928364 927567 966334 786195 112100514 21547566 79317086 90552948 14371206 14568992 872658 889496 102650185 112170840 2814267 3997457 65858490 73400728 2452608 1735627 71125365 79133812 X 0 0 4895717 5056995 26629103 27980033 31524820 33037028 102650185 112170840 X 0 1512208 X X 0 1 X 0 1 1 243393 243393 7198139 2893163 4304976 97273353 18654403 78618950 7385629 7385629 90552948 PATRONAGE CAPITAL - WFEC 12776388 C PATRONAGE CAPITAL - CFC 200121 C PATRONAGE CAPITAL - AEC 258913 C PATRONAGE CAPITAL - SEDC 117119 C PATRONAGE CAPITAL - COBANK 389736 C PATRONAGE CAPITAL - OTHER 153505 C MEMBERSHIPS IN ASSOCIATED ORGANIZATIONS 11700 C CAPITAL TERM CERTIFICATES - CFC 661510 C 14568992 CONSUMER DEPOSITS 92045 ACCUMULATED PROVISION FOR PENSIONS & BENEFITS 1519040 DEFERRED CREDITS - LINE EXTENSIONS 124542 1735627 X 33273636 0 33273636 66978 66978 33340614 31509195 0 31509195 1831419 1831419 33340614 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 THEIR TAX POSITIONS 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 IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 66,978. PART XII, LINE 4B - OTHER ADJUSTMENTS: EXPENSES IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 66,978. PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 1,764,441. 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 PAID OR 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". PATRONAGE DIVIDENDS ARE ALLOCATED ON A PATRONAGE BASIS AND DONE SO PURSUANT TO A PRE-EXISTING OBLIGATION AS PROVIDED FOR IN THE "NON-PROFIT OPERATION" ARTICLE OF THE COOPERATIVE'S BYLAWS. 1 SCHOLARSHIPS TO AREA STUDENTS 12 6250 PART I, LINE 2: THE COOPERATIVE AWARDS SCHOLARSHIPS TO APPLICANTS WHO SATISFY THE ELIGIBILITY REQUIREMENTS AND ARE SELECTED BY THE SCHOLARSHIP COMMITTEE OF THE COOPERATIVE'S BOARD OF TRUSTEES. TO BE ELIGIBLE, STUDENTS MUST BE A SENIOR AND RESIDE IN A HOUSEHOLD SERVED BY THE COOPERATIVE. X X 1 1 X X 0 0 0 TYSON LITTAU CEO 219061 0 1583 0 6361 0 92661 0 32498 0 352164 0 0 0 JARET DOWLER DIRECTOR OF ENGINEERING/OPERATIONS 128180 0 1703 0 4246 0 60850 0 32021 0 227000 0 0 0 JAMIE RUBLE DIRECTOR OF FINANCE & ADMINISTRATION 117316 0 1583 0 5089 0 51692 0 31702 0 207382 0 0 0 BRENT MCDOWELL DIRECTOR OF SAFETY 103865 0 1703 0 2696 0 87371 0 25431 0 221066 0 0 0 ROBERT BOHLING JOURNEYMAN LINEMAN 98670 0 1823 0 4667 0 60143 0 11747 0 177050 0 0 0 PART I, LINE 1A PURSUANT TO APPLICABLE TRAVEL POLICIES, THE COOPERATIVE WILL ONLY PAY FOR REGISTRATION FEES INCURRED BY A TRUSTEES' SPOUSE. TRUSTEES MAY ONLY ATTEND ONE NATIONAL MEETING PER YEAR. ALSO PURSUANT TO THE CURRENT POLICY, THE COOPERATIVE WILL PAY FOR REGISTRATION FEES, TRAVEL AND MEALS INCURRED BY AN EMPLOYEE'S SPOUSE IF INVITED TO ATTEND AN NRECA REGIONAL OR NATIONAL MEETING. DURING THE YEAR, ONE INDIVIDUAL REPORTED ON FORM 990, PART VII - TYSON LITTAU - RECEIVED THIS BENEFIT. SINCE THE COOPERATIVE CONSIDERS THE REIMBURSEMENT TO BE CONSISTENT TO A BONA FIDE BUSINESS PURPOSE, SUCH REIMBURSEMENTS WERE TREATED AS EXPENSES EXCLUDED FROM THE REPORTABLE COMPENSATION OF EACH. PURSUANT TO THE EMPLOYEE WELLNESS PROGRAM, EMPLOYEES PARTICIPATING IN THE COOPERATIVE SPONSORED HEALTH INSURANCE PLAN RECEIVE UP TO $50 PER MONTH, LIMITED TO $600 PER YEAR, FOR THE COST OF HEALTH CLUB DUES. 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. TYSON LITTAU: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 88,103 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,558 TOTAL REPORTED IN COLUMN C $ 92,661 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (88,103) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 67,767 EXPENSE TO THE COOPERATIVE $ 72,325 JARET DOWLER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 58,101 EMPLOYER CONTRIBUTION TO 401(K)PLAN 2,749 TOTAL REPORTED IN COLUMN C $ 60,850 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (58,101) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 40,789 EXPENSE TO THE COOPERATIVE $ 43,538 JAMIE RUBLE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 49,163 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,529 TOTAL REPORTED IN COLUMN C $ 51,692 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (49,163) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 37,582 EXPENSE TO THE COOPERATIVE $ 40,111 BRENT MCDOWELL: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 85,143 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,228 TOTAL REPORTED IN COLUMN C $ 87,371 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (85,143) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 33,182 EXPENSE TO THE COOPERATIVE $ 35,410 ROBERT BOHLING: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 58,550 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,593 TOTAL REPORTED IN COLUMN C $ 60,143 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (58,550) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 23,494 EXPENSE TO THE COOPERATIVE $ 25,087 FORM 990, PART III, LINES 1 & 4: THE COOPERATIVE FULFILLS ITS MISSION AND EXEMPT PURPOSE BY OPERATING ACCORDING TO ITS MEMBER APPROVED BYLAWS AND BOARD APPROVED OPERATING POLICIES. THE BOARD AND MANAGEMENT STRIVE TO ADHERE TO THESE DOCUMENTS IN A FAIR AND EQUITABLE MANNER FOR MEMBERS, EMPLOYEES, AND TRUSTEES. 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. 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. AMENDMENTS TO THE ARTICLES OF INCORPORATION 5. AMENDMENTS 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 FILING THE FORM 990. FORM 990, PART VI, SECTION B, LINE 12C THE BOARD OF TRUSTEES AND OFFICERS ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY. THE BOARD OF TRUSTEES AND OFFICERS ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF TRUSTEES AS SOON AS POSSIBLE. THE CONFLICT OF INTEREST POLICY IS REVIEWED AND REDISTRIBUTED TO EACH EMPLOYEE, OFFICER, AND DIRECTOR AT LEAST ANNUALLY. FORM 990, PART VI, SECTION B, LINE 15A THE BOARD OF TRUSTEES USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR CEOS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN OKLAHOMA AND THE NATION. OTHER THAN THE CEO, THE COOPERATIVE DID NOT HAVE ANY EMPLOYEES MEETING THE DEFINITION OF OFFICER OR KEY EMPLOYEE. THEREFORE, AND PURSUANT TO FORM 990 INSTRUCTIONS, LINE 15B HAS BEEN ANSWERED "NO". FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF ITS GOVERNING DOCUMENTS, EXTERNAL POLICIES, AND AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. ANNUALLY, THE COOPERATIVE PROVIDES THE YEAR END BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE WITH THE ANNUAL MEETING NOTICE AND ANNUAL REPORT. ADDITIONALLY, AN OPERATING REPORT WHICH SUMMARIZES VARIOUS FINANCIAL STATISTICS IS PUBLISHED IN AND DISTRIBUTED TO THE MEMBERS VIA MONTHLY NEWSLETTER. THE COOPERATIVE'S BYLAWS ARE ALSO MADE AVAILABLE ON THE COOPERATIVE'S WEBSITE. FORM 990, PART VII: THE BOARD OF TRUSTEES CONSIDERS THE CEO TO BE BOTH THE TOP MANAGEMENT OFFICIAL AND THE TOP FINANCIAL OFFICIAL. THEREFORE, ONLY THE CEO IS LISTED AS AN EMPLOYEE OFFICER. 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 ELIGIBLE EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICER AND HIGHLY COMPENSATED EMPLOYEES 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 BENEFIT 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 ORGANIZATION 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) AS PRESCRIBED 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, LINES 1 & 2: ALL GRANTS, DONATIONS, AND/OR SCHOLARSHIPS ARE MADE TO NON-PROFIT, CIVIC ORGANIZATIONS, AND INDIVIDUALS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA. ALL DONATIONS ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. EACH DONATION MADE DURING THE YEAR WAS BELOW THE REPORTING THRESHOLD OF SCHEDULE I, PART II. 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 2020 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 $ 3,662,935 LESS: TRUSTEE FEES REPORTED ON FORMS 1099-MISC (170,452) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (125,159) PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 990,769 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 135,016 TOTAL WAGES ACCRUED AND/OR PAID $ 4,493,109 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 1,127,012 OFFICE SUPPLIES 370,755 OUTSIDE SERVICES 81,383 EMPLOYEES 111,112 TRUSTEES 192,062 INSURANCES 94,383 DUES 105,969 DONATIONS 17,114 ANNUAL & DISTRICT MEETINGS 63,028 MISCELLANEOUS GENERAL 52,713 MAINTENANCE OF GENERAL PLANT 35,922 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 2,251,453 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (17,114) LESS: RECLASS OF TRUSTEES FEES TO PART IX, LINE 5 (170,452) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (742,034) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (452,759) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 869,094 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 1,764,441. PATRONAGE CAPITAL RETIRED - TOTAL -468,268. PATRONAGE CAPITAL RETIRED - DISCOUNT 26,300. PATRONAGE CAPITAL RETIRED - UNCLAIMED 134,978. NET CHANGE IN POST-RETIREMENT BENEFIT 54,757. 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.