2019-11-01T14:11:37-05:00 2018-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2018-01-01 710056715 FIRST ELECTRIC COOPERATIVE CORPORATION FIRS 5019824545 1000 S JP WRIGHT LOOP ROAD JACKSONVILLE AR 720765264 MELISSA WOOD CFO 5019824545 2019-10-22 1 WILLIAM M MILLER P00439459 8067473806 2019-10-22 X 65.182.80.152 2019-10-22 13:40:43 CD P 2EBFA2265763A01132BE48D36E167D9476E1DDEB 590F824A1294C374D71CDA6C5E46FE76A8EEF636 2018 2020-03-31 21:24:44Z DON CRABBE 1000 S JP WRIGHT LOOP ROAD JACKSONVILLE AR 720765264 202516126 0 X WWW.FIRSTELECTRIC.COOP X 1937 AR TO PROVIDE QUALITY, RELIABLE AND AFFORDABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 9 9 242 0 776 152 0 0 183439240 197593670 3283561 3577100 1219911 1171838 187942712 202342608 20203 15244 12866137 21622494 21329854 22230819 0 0 0 153726518 158474051 187942712 202342608 0 0 489619222 494344521 241929980 231939574 247689242 262404947 FIRST ELECTRIC, IMPROVING QUALITY OF LIFE. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 94,319 ACTIVE SERVICES AT YEAR END. ALL SERVICES THAT WERE ACTIVE DURING THE YEAR 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 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 1 283 0 242 1 1 1 0 0 0 0 193578655 8283954 0 0 0 X 9 9 1 0 1 0 1 1 1 1 0 0 0 1 1 1 1 1 0 1 1 0 X MELISSA WOOD CFO 5019824545 1000 S JP WRIGHT LOOP ROAD JACKSONVILLE AR 720765264 X RICK LOVE CHAIRMAN 9.10 X X 39773 0 0 TRACY HUDSPETH VICE CHAIRMAN 6.60 X X 41667 0 0 ROBERT MAERTENS SECRETARY/TREASURER 6.90 X X 32320 0 11000 TOM HASTY JR DIRECTOR 6.00 X 38598 0 0 ROBERT HILL DIRECTOR 6.50 X 40903 0 0 DAVID LUEBKE DIRECTOR 6.60 X 43031 0 0 KARISSA RUSHING DIRECTOR 8.20 X 41531 0 2400 LARRY WOOD DIRECTOR 8.50 X 51226 0 0 TODD PROTHRO DIRECTOR 7.80 X 40452 0 0 DON CRABBE PRESIDENT/CEO 49.00 X 667886 0 221689 BRUCE ANDREWS CFO (JAN - MAR) 40.00 X 99161 0 11847 MELISSA WOOD CFO 45.00 X 159921 0 31241 BRAD FORD COO (JAN) 40.00 X 42456 0 8951 JERRY DRISKILL VP - OPERATIONS 45.00 X 173605 0 106750 DANIEL RIEDEL VP - ENGINEERING 45.00 X 177597 0 88763 ASHLEY GARRINGER VP - ADMINISTRATION 45.00 X 160609 0 50741 TONYA SEXTON VP - MARKETING 45.00 X 152675 0 22393 KAREN SOUTHERLAND DISTRICT MANAGER 45.00 X 149126 0 127128 RANDY EVERETT VP - OPERATIONS 45.00 X 146111 0 64547 THEODORE DEWEESE JR SERVICEMAN 45.00 X 139257 0 48282 JAMES BRANSCUM DISTRICT MANAGER 45.00 X 134495 0 77716 2572400 0 873448 24 0 1 0 UTILITY LINES CONSTRUCTION INC PO BOX 827464 PHILADELPHIA PA 19182 POWERLINE CONSTRUCTION 3212214 ASPLUNDH TREE EXPERT CO PO BOX 827464 PHILADELPHIA PA 19182 RIGHT OF WAY CLEARING 3002392 APPLE TREE SERVICE INC 316 N CEDAR STREET NORTH LITTLE ROCK AR 72114 RIGHT OF WAY CLEARING 2406944 PENSKE TRUCK LEASING CO LP PO BOX 827380 PHILADELPHIA PA 19182 FLEET MANAGEMENT SERVICE 1294021 THE FISHEL COMPANY INC DEPARTMENT L-2478 COLUMBUS OH 43260 POWERLINE CONSTRUCTION 775033 13 X SALES OF ELECTRICITY 221000 191630652 191630652 PATRONAGE DIVIDENDS 221000 4230190 4230190 SERVICE FEES 221000 1567550 1567550 SURGE PROTECTOR REVENUE 221000 116368 116368 OTHER PROGRAM REVENUE 221000 48910 48910 197593670 3458082 3458082 3050 3050 776 0 776 776 776 268849 149831 119018 119018 119018 22007 23687 -1680 -1680 POLE ATTACHMENT INCOME 221000 1169692 1169692 1169692 202342608 197591990 776 4749842 X 15244 21622494 2384118 12598415 2652334 3583558 1012394 9097311 15199222 PURCHASED POWER 113747622 DISTRIBUTION EXPENSE 15216778 CONSUMER EXPENSE 2624856 ADMIN & GENERAL EXPENSE 2199000 389262 202342608 5793769 4188380 5328471 12268098 13060995 13539029 267391 256739 15836060 14782985 522337909 171881803 349435898 350456106 89015062 88415788 10881576 10437396 489619222 494344521 6958121 5408551 198256177 189698304 36715682 36832719 241929980 231939574 X 745665 754070 0 0 246943577 261650877 247689242 262404947 489619222 494344521 X 0 14715705 X X 0 1 X 1 0 4555902 4555902 22371473 7227761 15143712 492026633 164654042 327372591 3383901 3383901 350456106 PATRONAGE CAPITAL - CFC 7648032 C PATRONAGE CAPITAL - AECC 61679680 C PATRONAGE CAPITAL - AECI 5867426 C PATRONAGE CAPITAL - NISC 499630 C PATRONAGE CAPITAL - NRTC 62039 C PATRONAGE CAPITAL - CRC 39454 C CAPITAL TERM CERTIFICATES - CFC 11095488 C ACCUMULATED DIVIDENDS - ARESIT 249796 C MEMBERSHIPS 3200 C ENERGY EFFICIENCY LOANS 26062 C EXECUTIVE COMPENSATION OFFSET 830070 C IRRIGATION LINE EXTENSION 414911 C 88415788 CONSUMER DEPOSITS AND PREPAYMENTS 5412163 ACCUMULATED PROVISION FOR PENSIONS AND OTHER POST-RETIREMENT BENEFITS 26860115 DEFERRED CREDITS 802934 ACCRUED PROPERTY TAXES 3201000 ACCRUED OPERATING TAXES - OTHER 556507 36832719 X 202344994 2386 2386 202342608 0 202342608 180722500 2386 2386 180720114 21622494 21622494 202342608 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 XI, LINE 2D - OTHER ADJUSTMENTS: GENERAL EXPENSES RECLASSIFIED TO NON-OPERATING MARGINS 2,386. PART XII, LINE 2D - OTHER ADJUSTMENTS: GENERAL EXPENSES RECLASSIFIED TO NON-OPERATING MARGINS 2,386. PART XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 21,622,494. 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. 0 FIRST ELECTRIC TRUST 1000 S JP WRIGHT LOOP ROAD JACKSONVILLE AR 72076 311586917 501(C)(3) 13226 TO PAY FOR DIRECT OPERATING EXPENSES FOR THE TRUST. 1 SCHEDULE I, PART II: ALL GRANTS, SPONSORSHIPS AND 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. X X X 0 1 0 DON CRABBE PRESIDENT/CEO 465530 0 769 0 201587 0 198118 0 23571 0 889575 0 0 0 MELISSA WOOD CFO 156853 0 2294 0 774 0 16094 0 15147 0 191162 0 0 0 JERRY DRISKILL VP - OPERATIONS 165735 0 2668 0 5202 0 84583 0 22167 0 280355 0 0 0 DANIEL RIEDEL VP - ENGINEERING 167895 0 2410 0 7292 0 82088 0 6675 0 266360 0 0 0 ASHLEY GARRINGER VP - ADMINISTRATION 157213 0 2785 0 611 0 32670 0 18071 0 211350 0 0 0 TONYA SEXTON VP - MARKETING 149656 0 2045 0 974 0 15056 0 7337 0 175068 0 0 0 KAREN SOUTHERLAND DISTRICT MANAGER 141906 0 3279 0 3941 0 111929 0 15199 0 276254 0 0 0 RANDY EVERETT VP - OPERATIONS 142967 0 2215 0 929 0 45488 0 19059 0 210658 0 0 0 THEODORE DEWEESE JR SERVICEMAN 135175 0 1988 0 2094 0 26365 0 21917 0 187539 0 0 0 JAMES BRANSCUM DISTRICT MANAGER 122529 0 2118 0 9848 0 58669 0 19047 0 212211 0 0 0 PART I, LINE 4B DON CRABBE PARTICIPATES IN TWO SECTION 457(F) NON-QUALIFIED DEFERRED COMPENSATION (NQDC) PLANS. BENEFITS UNDER THE FIRST PLAN ARE CURRENTLY ACCRUED AND FULLY VESTED IN THE SAME YEAR; TOTAL BENEFITS PAID AND INCLUDED AS W-2 WAGES DURING THE YEAR WERE $96,180. BENEFITS ACCRUED UNDER THE SECOND PLAN FOR 2018 WAS $100,000 AND WILL BE PAID AS BENEFITS BECOME VESTED. 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 ENVIORNMENT. 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. DON CRABBE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 92,618 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,500 DEFERRED RETENTION BONUS 100,000 TOTAL REPORTED IN COLUMN C $ 198,118 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT & NQDC PLANS (92,618) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT & NQDC PLANS 157,703 EXPENSE TO THE COOPERATIVE $ 163,203 MELISSA WOOD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 0 EMPLOYER CONTRIBUTION TO 401(K) PLAN 16,094 TOTAL REPORTED IN COLUMN C $ 16,094 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (0) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 0 EXPENSE TO THE COOPERATIVE $ 16,094 JERRY DRISKILL: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 81,107 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,476 TOTAL REPORTED IN COLUMN C $ 84,583 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (81,107) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 55,900 EXPENSE TO THE COOPERATIVE $ 59,376 DANIEL RIEDEL: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 78,712 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,376 TOTAL REPORTED IN COLUMN C $ 82,088 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (78,712) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 53,510 EXPENSE TO THE COOPERATIVE $ 56,886 ASHLEY GARRINGER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 29,442 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,228 TOTAL REPORTED IN COLUMN C $ 32,670 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (29,442) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 41,166 EXPENSE TO THE COOPERATIVE $ 44,394 TONYA SEXTON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 0 EMPLOYER CONTRIBUTION TO 401(K) PLAN 15,056 TOTAL REPORTED IN COLUMN C $ 15,056 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (0) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 0 EXPENSE TO THE COOPERATIVE $ 15,056 KAREN SOUTHERLAND: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 109,012 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,917 TOTAL REPORTED IN COLUMN C $ 111,929 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (109,012) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 48,408 EXPENSE TO THE COOPERATIVE $ 51,325 RANDY EVERETT: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 42,530 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,958 TOTAL REPORTED IN COLUMN C $ 45,488 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (42,530) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 39,447 EXPENSE TO THE COOPERATIVE $ 42,405 THEODORE DEWEESE, JR.: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 24,684 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,681 TOTAL REPORTED IN COLUMN C $ 26,365 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (24,684) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 28,438 EXPENSE TO THE COOPERATIVE $ 30,119 JAMES BRANSCUM: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 56,120 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,549 TOTAL REPORTED IN COLUMN C $ 58,669 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (56,120) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 43,271 EXPENSE TO THE COOPERATIVE $ 45,820 FORM 990, PART VI, SECTION A, LINE 2 BUSINESS RELATIONSHIP: DON CRABBE (PRESIDENT/CEO) AND DAVID LUEBKE (DIRECTOR) BOTH SERVE ON THE BOARD OF ARKANSAS ELECTRIC COOPERATIVE CORPORATION (AECC) AT THE REQUEST OF AND FOR THE BENEFIT OF THE COOPERATIVE. DON CRABBE (PRESIDENT/CEO) AND RICK LOVE (CHAIRMAN) BOTH SERVE 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 4 BECAUSE THE BYLAWS GOVERN HOW THE ORGANIZATION OPERATES ON A COOPERATIVE BASIS WITH ITS MEMBERS, THE BOARD OF DIRECTORS PERIODICALLY INITIATES A REVIEW OF THE BYLAWS BY LEGAL COUNSEL IN ORDER TO CLARIFY THE RIGHTS AND RESPONSIBILITIES OF THE MEMBERS, THE BOARD OF DIRECTORS AND THE COOPERATIVE AS A WHOLE. DURING THE FALL OF 2018, THE BOARD OF DIRECTORS INITIATED SUCH A REVIEW OF THE COOPERATIVE'S BYLAWS. THE REVIEW RESULTED IN THE FOLLOWING SUMMARIZED CHANGES. TO ASSIST WITH THE INTERPRETATION AND IMPLEMENTATION OF THE BYLAWS, COMMON TERMS THAT WERE USED THROUGHOUT ARE NOW DEFINED AND CAPITALIZED IN ARTICLE I "DEFINITIONS", WHICH IS A NEW ARTICLE. THIS PROVIDES ONE CENTRAL LOCATION FOR THE DEFINITION OF THESE TERMS AND RESULTED IN OTHER ARTICLES AND SECTIONS BEING AMENDED AS THE DEFINITIONS FOR DEFINED TERMS WERE MOVED TO ARTICLE I. THE MEMBERSHIP ARTICLE WAS AMENDED TO INCLUDE LANGUAGE RECOGNIZING THE IMPORTANCE OF THE RELATIONSHIP BETWEEN THE MEMBERS AND THE COOPERATIVE AND THAT THE BYLAWS ARE A CONTRACT AMONG AND BETWEEN BOTH. THIS "CONTRACT LANGUAGE" WAS MOVED FROM THE NON-PROFIT OPERATION ARTICLE TO THE MEMBERSHIP ARTICLE SO THAT IT APPLIES TO ALL ACTIVITIES BETWEEN AND AMONG THE MEMBERS AND THE COOPERATIVE AND NOT JUST TO THE ACTIVITIES REQUIRED FOR NON-PROFIT OPERATION, SUCH AS THE ALLOCATION AND RETIREMENT OF PATRONAGE CAPITAL. ADDITIONALLY, THE REQUIREMENT FOR MEMBERS TO PURCHASE ELECTRICITY AND TO CONTRIBUTE CAPITAL TO THE COOPERATIVE WAS MOVED FROM THE MEMBERSHIP ARTICLE TO THE RIGHTS, LIABILITIES AND OBLIGATIONS ARTICLE. THE RIGHTS AND LIABILITIES OF MEMBERS ARTICLE WAS EXPANDED TO ALSO INCLUDE OBLIGATIONS, SUCH AS THE REQUIREMENT TO PURCHASE ELECTRIC ENERGY AND TO PROVIDE CAPITAL TO THE COOPERATIVE. IT IS NOW ENTITLED "RIGHTS, LIABILITIES AND OBLIGATIONS OF MEMBERS". IN ADDITION TO INCLUDING THE REQUIREMENT TO PURCHASE ELECTRIC ENERGY AND TO PROVIDE CAPITAL, IN THE FORM OF CAPITAL CREDITS AS PROVIDED FOR IN THE NON-PROFIT OPERATION ARTICLE, TO THE COOPERATIVE, THE EXPANDED ARTICLE NOW ADDRESSES AND CLARIFIES RIGHTS AND OBLIGATIONS RELATED TO INTERRUPTION OF SERVICE, SAFE OPERATION OF THE COOPERATIVE, PROTECTED OPERATION OF THE COOPERATIVE, MEMBER EQUIPMENT CONNECTED TO COOPERATIVE EQUIPMENT, SUSPENSION AND TERMINATION OF SERVICE, USE OF SERVICES PROVIDED BY THE COOPERATIVE, PAYMENT OF COOPERATIVE SERVICES, AND WHEN SUCH SERVICES ARE FOR SALE AND CAN BE REDUCED. SEE ARTICLE III, SECTION 4 AND SECTION 5 OF THE BYLAWS FOR THE SPECIFIC REQUIREMENTS. THE RIGHTS, LIABILITIES AND OBLIGATIONS PERTAIN TO THE REQUIREMENTS THE COOPERATIVE HAS TO PROVIDE ELECTRIC ENERGY AND OTHER SERVICES ON A PATRONAGE BASIS AND THE RELATIONSHIP BETWEEN THE RIGHT TO PROVIDE THESE SERVICES AND THE RIGHTS AND RESPONSIBILITIES THE MEMBERS HAVE IN PURCHASING THESE SERVICES. SECTION 7 OF THE BOARD OF DIRECTORS ARTICLE CLARIFIES THE RELATIONSHIP BETWEEN THE DIRECTORS AND THE COOPERATIVES. IT RECOGNIZES THAT A DIRECTOR IS NOT AN EMPLOYEE OF THE COOPERATIVE BUT THAT DIRECTORS MAY BE PROVIDED REASONABLE COMPENSATION FOR THE TIME, RESPONSIBILITIES UNDERTAKEN AND DUTIES PERFORMED AS A DIRECTOR. SUCH COMPENSATION MUST BE APPROVED, HOWEVER, BY THE BOARD OF DIRECTORS. DUE TO THE FACT THE BYLAWS ARE CONSIDERED A CONTRACT BETWEEN THE MEMBERS AND THE COOPERATIVE, NEW ARTICLES ON GOVERNING LAW, TITLES AND HEADINGS, PARTIAL INVALIDITY, CUMULATIVE REMEDIES, ENTIRE AGREEMENT, SUCCESSORS AND ASSIGNS, WAIVER AND LACK OF NOTICE WERE ADDED AS NEW SECTIONS UNDER THE MISCELLANEOUS ARTICLE. THE PURPOSE OF THESE NEW SECTIONS TO ALLOWS THE BYLAWS TO FUNCTION AS A CONTRACT. PURSUANT TO THESE NEW ARTICLES, THE LAWS OF THE STATE OF ARKANSAS AND APPLICABLE FEDERAL LAW ARE CONTROLLING. THE INVALIDATION OF ONE BYLAW PROVISION BY AN ENTITY POSSESSING PROPER JURISDICTION AND AUTHORITY DOES NOT INVALIDATE ALL PROVISIONS OF THE BYLAWS RIGHTS AND REMEDIES PROVIDED IN THE BYLAWS ARE CUMULATIVE AND DO NOT PRECLUDE A MEMBERS OR THE COOPERATIVE FROM ASSERTING OTHER RIGHTS AND REMEDIES. THE DUTIES, RESPONSIBILITIES, LIABILITIES AND OBLIGATIONS FOR THE MEMBERS AND THE COOPERATIVE ARE BINDING UPON SUCH MEMBERS AND COOPERATIVE'S SUCCESSORS AND ASSIGNS. THE GOVERNING DOCUMENTS, AS SUCH TERM IS DEFINED IN THE BYLAWS AND WHICH INCLUDES (BUT NOT LIMITED TO) SERVICE AGREEMENTS, PRICE SCHEDULES, RULES AND REGULATIONS PRESCRIBED BY THE BOARD OF DIRECTORS) REPRESENT THE FULL AGREEMENT BETWEEN THE COOPERATIVE AND ITS MEMBERS. THE FAILURE TO ASSERT A RIGHT DOES WAIVE A RIGHT OR REMEDY PROVIDED IN THE BYLAWS. ADDITIONALLY, THESE CHANGES PROVIDE THAT THE FAILURE OF A MEMBER OR A DIRECTOR TO RECEIVE A NOTICE OF A MEETING OF ACTION OR VOTE DOES NOT INVALIDATE THE ACTION APPROVED BY THE MEMBERS OR THE BOARD OF DIRECTORS. FOR A COMPLETE SET OF THE COOPERATIVE'S BYLAWS, PLEASE VISIT THE COOPERATIVE'S WEBSITE AT WWW.FIRSTELECTRIC.COOP/BYLAWS-NONDISCRIMINATION. 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. 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. INCREASE IN BONDED INDEBTEDNESS 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, REVIEW AND APPROVAL PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C ON AN ANNUAL BASIS, THE COOPERATIVE WILL REQUIRE THE BOARD OF DIRECTORS AND ITS OFFICERS TO COMPLETE AND SIGN A CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM AND SUBMIT THEM TO THE PRESIDENT/CEO AND BOARD CHAIRMAN. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE THE EXPERTISE OF AN INDEPENDENT CONSULTANT AS WELL AS A RETENTION AND COMPENSATION PLAN COMMITTEE WHEN DETERMINING THE COMPENSATION OF THE PRESIDENT/CEO. THE CEO USES THE EXPERTISE OF AN INDEPENDENT CONSULTANT AS WELL AS A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEE. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT ARKANSAS AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENTS TO ALL MEMBERS OF THE COOPERATIVE PRIOR TO THE ANNUAL MEETING. THE COOPERATIVE'S BYLAWS AND ANNUAL REPORT ARE ALSO AVAILABLE ON THE COOPERATIVE'S WEBSITE. THE COOPERATIVE MAKES A COMPLETE COPY OF THE AUDITED FINANCIAL STATEMENTS AVAILABLE AT THE ANNUAL MEETING AND UPON REQUEST OF ANY MEMBER. 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. AS PART OF THE PLAN DOCUMENT, THE COOPERATIVE PROVIDES A MATCHING CONTRIBUTION UP TO 10% OF A PARTICIPATING EMPLOYEE'S BASE SALARY FOR ALL EMPLOYEES HIRED IN 2006 OR LATER YEARS. FOR ALL EMPLOYEES HIRED PRIOR TO 2006 THE COOPERATIVE PROVIDES A MATCHING CONTRIBUTION OF UP TO 2% FOR ALL PARTICIPATING EMPLOYEES. 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, KEY EMPLOYEES AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. ONLY EMPLOYEES HIRED PRIOR TO 2006 ARE ELIGIBLE TO PARTICIPATE IN THE MULTI-EMPLOYER DEFINED BENEFIT PLAN. THE COOPERATIVE ALSO PROVIDES HEALTH, DENTAL, VISION AND LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS, KEY EMPLOYEES AND HIGHLY COMPENSATED EMPLOYEES, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) ARE 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 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: ALTHOUGHT 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, 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 $14,982,533 LESS: DIRECTOR FEES & BENEFITS REPORTED ON FORM 1099-MISC (382,901) LESS: OFFICER & KEY EMPLOYEE BENEFITS INCLUDED IN LINE 5 (519,982) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 3,284,497 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 141,646 TOTAL WAGES ACCRUED AND/OR PAID $17,505,793 FORM 990, PART IX, LINE 24E: OTHER EXPENSES ARE COMPRISED OF THE FOLLOWING: TAXES $ 7,655 OTHER DEDUCTIONS 20,593 TRANSMISSION 361,014 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 389,262 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 2018 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 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 3,093,262 OFFICE SUPPLIES 699,590 OUTSIDE SERVICES 107,275 INSURANCES 173,172 EMPLOYEE BENEFITS 606,055 DIRECTORS 547,375 ANNUAL MEETING 70,150 CAPITAL CREDITS 52,287 MISCELLANEOUS GENERAL 384,619 FIBER NETWORK STUDY 18,135 REGULATORY COMMISSION 346,743 MAINTENANCE OF GENERAL PLANT 525,438 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 6,624,101 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (382,901) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (2,604,952) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (1,437,248) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 2,199,000 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 21,622,494. PATRONAGE CAPITAL RETIRED -9,538,078. UNCLAIMED PATRONAGE RETIREMENTS RETAINED UNDER STATE LAW 1,720,162. OTHER COMPREHENSIVE INCOME PROVISION FOR POST-RETIREMENT BENEFIT OBLIGATION 903,138. NET CHANGE IN MEMBERSHIPS 8,405. OTHER CHANGE IN EQUITIES -416. FIRST ELECTRIC TRUST 1000 S JP WRIGHT LOOP ROAD JACKSONVILLE AR 72076 311586917 DISBURSEMENT OF FUNDS FOR CHARITABLE PURPOSES IN THE COOP'S SERVICE AREA AR 501(C)(3) LINE 7 FIRST ELECTRIC COOPERATIVE CORPORATION 1 FIRST ENERGY SERVICES OF ARKANSAS INC PO BOX 5018 JACKSONVILLE AR 72078 621695757 INACTIVE AR FIRST ELECTRIC COOPERATIVE CORPORATION C 1.00000 1 0 1 0 0 0 0 0 0 0 0 0 1 0 1 1 0 1 0 0 FIRST ELECTRIC TRUST B N/A - LESS THAN $50,000 FIRST ELECTRIC TRUST L N/A - LESS THAN $50,000 FIRST ELECTRIC TRUST N N/A - LESS THAN $50,000 FIRST ELECTRIC TRUST O N/A - LESS THAN $50,000 FIRST ELECTRIC TRUST Q N/A - LESS THAN $50,000