2018-11-13T08:35:37-06:00 2017-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2017-01-01 750597925 TAYLOR ELECTRIC COOPERATIVE INC TAYL 3257938500 PO BOX 250 MERKEL TX 79536 NANCY BRISCO CFO 3257938500 2018-11-05 1 WILLIAM M MILLER P00439459 8067473806 2018-11-05 X 65.182.80.152 2018-11-05 11:45:41 CS P 42ED200D52007B62D8CC0AE4B3D86240094B8D48 587A88673713A033F58E04FDF6801CBB1F7DD2F2 2017 2019-02-21 02:37:17Z RYAN BARTLETT PO BOX 250 MERKEL TX 79536 44293291 0 X WWW.TAYLORELECTRIC.COM X 1939 TX TO PROVIDE ELECTRIC POWER TO RURAL AREAS AT COST ON A COOPERATIVE BASIS. 7 7 90 0 60443 0 0 0 39226074 43574370 1357989 341995 -262169 263893 40321894 44180258 0 62230 1016027 4870660 5982417 6770515 0 0 0 33212138 32941657 40210582 44645062 111312 -464804 137831968 139309463 83795631 81646400 54036337 57663063 NONE 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 17,573 ACTIVE SERVICES WERE PROVIDED POWER AT YEAR END AT COST ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. 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 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 1 115 0 90 1 1 1 0 0 0 0 0 0 43291422 1670627 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 NANCY BRISCO CFO 3257938500 226 CR 287 MERKEL TX 79536 X CECIL DAVIS CHAIRMAN 3.20 X X 20000 0 0 LELAND ROBINSON VICE CHAIRMAN 2.10 X X 19000 0 0 PARKS THOMAS SECRETARY/TREASURER 2.40 X X 19000 0 0 GARLAND CARTER DIRECTOR 3.40 X 19000 0 0 DAVID MCFALL DIRECTOR 4.00 X 19000 0 0 RICHARD PETREE DIRECTOR 3.10 X 23000 0 0 KATHRYN RAINEY DIRECTOR 3.70 X 19000 0 0 RYAN BARTLETT PRESIDENT/CEO 58.00 X 189441 0 63725 NANCY BRISCO CFO 50.00 X 164023 0 69891 LANCE MAEDA DIRECTOR OF INFORMATION TECHNOLOGY 40.00 X 138972 0 76380 DAVID THOMAS CONSTRUCTION OPERATIONS MANAGER 40.00 X 132997 0 113926 KEN WELLS DIRECTOR OF BUSINESS DEVELEOPMENT 40.00 X 125975 0 124788 SEAN KRAUSE DIRECTOR OF ENGINEERING 40.00 X 112182 0 20131 ROBERT STEPHENS WORKING FOREMAN 48.00 X 103983 0 62320 1105573 0 531161 9 0 1 0 LOWER COLORADO RIVER AUTHORITY PO BOX 301142 DALLAS TX 75303 SUBSTATION CONSTRUCTION CONTRACTORS 1352528 ABB INC PO BOX 88868 CHICAGO IL 60695 CONSTRUCTION CONTRACTORS 568558 ANIXTER INC PO BOX 842584 DALLAS TX 75284 METER CONTRACTORS 173861 PRIMARY UTILITY SERVICES LLC 4231 CR 230 SNYDER TX 79549 CONSTRUCTION CONTRACTORS 154588 4 X SALES OF ELECTRICITY 221000 41734949 41734949 PATRONAGE DIVIDENDS 221000 1408238 1408238 SERVICE FEES 221000 369212 369212 OTHER PROGRAM REVENUE 221000 55233 55233 TRANSMISSION ACCESS 221000 6738 6738 43574370 168142 168142 58100 175000 22406 0 35694 175000 210694 207179 3515 178289 4436 173853 173853 173853 67537 86191 -18654 -18654 INTERNET SERVICE REVENUE 517000 44733 44733 AIR EVAC REVENUE 524298 15710 15710 POLE ATTACHMENT INCOME 221000 7942 7942 3468 3468 71853 44180258 43766363 60443 353452 X 62230 4870660 625080 3658193 908797 1282724 295721 3772723 4641892 PURCHASED POWER 20553743 ADMIN & GENERAL EXPENSE 1458584 CONSUMER EXPENSE 801239 DISTRIBUTION EXPENSE 411840 1301636 44645062 X 5374927 3708879 361000 3841829 3253307 7258 1530 2022509 2865637 146865732 45294905 97433215 101570827 27475985 27668540 1315245 240743 137831968 139309463 3592913 3418188 102757 77681472 76028777 2521246 2096678 83795631 81646400 X 110420 111555 310323 141446 53615594 57410062 54036337 57663063 137831968 139309463 X -464804 4091530 X X 0 1 X 0 0 0 1 X 2072956 2072956 7913997 2281604 5632393 135358962 42826315 92532647 344796 1175021 186986 1332831 101570827 PATRONAGE CAPITAL - GSEC 21105142 C PATRONAGE CAPITAL - TEC 879413 C PATRONAGE CAPITAL - NISC 56911 C PATRONAGE CAPITAL - CFC 3208310 C PATRONAGE CAPITAL - NRTC 4499 C PATRONAGE CAPITAL - SEDC 107611 C PATRONAGE CAPITAL - CRC 7096 C PATRONAGE CAPITAL - FEDERATED 31326 C PATRONAGE CAPITAL - OTHER 9794 C CASH SURRENDER VALUE OF EMPLOYEE INS 58438 C MEMBER CAPITAL SECURITIES 2200000 C 27668540 ACCRUED OPERATING TAXES 71984 CUSTOMER DEPOSITS 1133722 ACCUMULATED PROVISION FOR PENSIONS/BENEFITS 238136 DEFERRED CREDITS - UNCLAIMED CAPITAL CREDITS 554635 DEFERRED CREDITS - OTHER 98201 2096678 X 43417048 0 43417048 763210 763210 44180258 39011192 0 39011192 5633870 5633870 44645062 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. ALSO PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED AN ECONOMIC DEVELOPMENT FUND WITH AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. THE AMOUNTS DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED FOR THE STIMULATION AND IMPROVEMENT OF BUSINESS AND COMMERCIAL ACTIVITY FOR ECONOMIC DEVELOPMENT IN RURAL COMMUNITIES. ANY AMOUNTS SO DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. ALSO PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED AN ENERGY EFFICIENCY ASSISTANCE FUND WITH AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. THE AMOUNTS DEPOSITED INTO THE ENERGY EFFICIENCY ASSISTANCE FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED TO ASSIST MEMBERS OF AN ELECTRIC COOPERATIVE IN REDUCING THEIR ENERGY CONSUMPTION AND ELECTRICITY BILLS. ANY AMOUNTS SO DEPOSITED INTO THE ENERGY EFFICIENCY ASSISTANCE FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. PART X, LINE 2: THE COOPERATIVE IS EXEMPT FROM FEDERAL INCOME TAXES UNDER SECTION 501(C)(12) OF THE INTERNAL REVENUE CODE. MORE THAN 85% OF THE GROSS INCOME IS COLLECTED FROM MEMBERS. PART XI, LINE 4B - OTHER ADJUSTMENTS: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 763,210. PART XII, LINE 4B - OTHER ADJUSTMENTS: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 763,210. PATRONAGE CAPITAL ASSIGNABLE 4,870,660. 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 DISABILITY RESOURCES INC PO BOX 1880 ABILENE TX 79604 752157839 501(C)(3) 5700 CHARITABLE EVENT HENDRICK MEDICAL CENTER 1900 PINE ST ABILENE TX 79601 237413284 GOVERNMENT 5900 CHARITABLE EVENT 1 1 PART II: 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. X 0 0 0 RYAN BARTLETT PRESIDENT/CEO 181306 0 5504 0 2631 0 28394 0 35331 0 253166 0 0 0 NANCY BRISCO CFO 150409 0 10504 0 3110 0 50521 0 19370 0 233914 0 0 0 LANCE MAEDA DIRECTOR OF INFORMATION TECHNOLOGY 128575 0 6304 0 4093 0 48178 0 28202 0 215352 0 0 0 DAVID THOMAS CONSTRUCTION OPERATIONS MANAGER 120802 0 11349 0 846 0 82932 0 30994 0 246923 0 0 0 KEN WELLS DIRECTOR OF BUSINESS DEVELEOPMENT 110424 0 13150 0 2401 0 93749 0 31039 0 250763 0 0 0 ROBERT STEPHENS WORKING FOREMAN 100898 0 2759 0 326 0 29280 0 33040 0 166303 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. RYAN BARTLETT: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 20,994 EMPLOYER CONTRIBUTION TO 401(K) PLAN 7,400 TOTAL REPORTED IN COLUMN C $ 28,394 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (20,994) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 50,491 EXPENSE TO THE COOPERATIVE $ 57,891 NANCY BRISCO: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 44,392 EMPLOYER CONTRIBUTION TO 401(K) PLAN 6,129 TOTAL REPORTED IN COLUMN C $ 50,521 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (44,392) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 41,577 EXPENSE TO THE COOPERATIVE $ 47,706 LANCE MAEDA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 42,910 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,268 TOTAL REPORTED IN COLUMN C $ 48,178 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (42,910) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 35,946 EXPENSE TO THE COOPERATIVE $ 41,214 DAVID THOMAS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 78,132 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,800 TOTAL REPORTED IN COLUMN C $ 82,932 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (78,132) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 32,751 EXPENSE TO THE COOPERATIVE $ 37,551 KEN WELLS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 89,346 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,403 TOTAL REPORTED IN COLUMN C $ 93,749 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (89,346) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 30,042 EXPENSE TO THE COOPERATIVE $ 34,445 ROBERT STEPHENS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 26,221 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,059 TOTAL REPORTED IN COLUMN C $ 29,280 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (26,221) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 20,960 EXPENSE TO THE COOPERATIVE $ 24,019 PART I, LINE 15: ON THE 2017 FORM 990, PART I, LINE 15, THE COOPERATIVE SEPARATELY STATED SALARIES AND WAGES, EMPLOYEE BENEFITS, AND PAYROLL TAXES THAT ARE ALLOCATED IN ACCORDANCE WITH THEIR ACCOUNTING SYSTEM. ON THE 2016 RETURN THE COOPERATIVE DID NOT SEPARATELY STATE THESE EXPENSES. THE 2016 RETURN IS COMPLETE AND ACCURATE, BUT THE COOPERATIVE BELIEVES BY SEPARATELY STATING THESE EXPENSES ON THE 2017 RETURN A READER OF THE FORM 990 WILL BE MORE INFORMED. FUTURE RETURNS FILED BY THE COOPERATIVE WILL SEPARATELY STATE SALARIES AND WAGES, EMPLOYEE BENEFITS, AND PAYROLL TAXES, MAKING THE COMPARISON ON PAGE 1 MORE MEANINGFUL. 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 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 ALL NEW EMPLOYEES AND DIRECTORS ARE REQUIRED TO SIGN A CONFLICT OF INTEREST CERTIFICATION WHEN THEY BEGIN EMPLOYMENT WITH THE COOPERATIVE. ALL EMPLOYEES, DIRECTORS AND OFFICERS ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY AND ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. THE PRESIDENT/CEO REGULARLY MONITORS AND ENFORCES THIS POLICY. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS UTILIZE INTERNAL AND/OR EXTERNAL RESOURCES WHEN DETERMINING THE COMPENSATION FOR THE PRESIDENT/CEO. THE PRESIDENT/CEO UTILIZES INTERNAL AND/OR EXTERNAL RESOURCES WHEN DETERMINING THE COMPENSATION OF THE ORGANIZATION'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER OR KEY EMPLOYEE, IF ANY. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF AUDITED FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING. THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF THE AUDITED FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY, OR GOVERNING DOCUMENTS TO ANY MEMBER WHO REQUESTS A COPY ANY SUCH DOCUMENT. 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 AND LIFE INSURANCE TO ALL ELIGIBLE EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS 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 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 UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED BY THE FEDERAL ENERGY REGULATORY COMMISSION FOR CLASS A AND B ELECTRIC UTILITIES MODIFIED FOR ELECTRIC BORROWERS OF THE NATIONAL RURAL UTILITIES COOPERATIVE FINANCE COOPERATIVE (CFC). 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 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 $ 4,283,273 LESS: DIRECTOR FEES REPORTED ON FORM 1099-MISC (138,000) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (133,616) PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGIN 275,892 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,405,087 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 565,444 TOTAL WAGES ACCRUED AND/OR PAID $ 6,258,080 FORM 990, PART IX, LINE 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: TAXES $ 93,600 SALES 408,724 OTHER DEDUCTIONS 36,102 FIBER & INTERNET 553,884 AIR EVAC 14,280 ELECTRICIAN 195,046 TOTAL OTHER EXPENSES PER FORM 990, PART IX $ 1,301,636 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 PATRONAGE CAPITAL THAT IS EITHER ALLOCATED OR TO BE ALLOCATED TO THE PATRONS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2017 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 $ 2,119,550 OFFICE SUPPLIES 264,033 OUTSIDE SERVICES 241,383 INJURIES AND DAMAGES 177,056 REGULATORY COMMISSION 70,212 DIRECTORS 156,354 ANNUAL MEETING 137,266 MISCELLANEOUS GENERAL 274,004 WATER HEATER PROGRAM 1,168 MAINTENANCE OF GENERAL PLANT 1,099,536 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 4,540,562 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (138,000) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,780,656) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (1,163,322) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 1,458,584 FORM 990, PART X, LINES 12 AND 13: THE COOPERATIVE PREVIOUSLY INCLUDED PROGRAM RELATED INVESTMENTS AS COMPONENTS OF INVESTMENTS - OTHER SECURITIES ON PART X, LINE 12. HOWEVER, FOR THE 2017 CALENDAR YEAR, THE COOPERATIVE BEGAN REPORTING THESE AMOUNTS ON LINE 13 BECAUSE SUCH AMOUNTS ARE DERIVED FROM PROGRAM SERVICE ACTIVITIES. TO INCREASE CONSISTENCY, THESE INVESTMENTS FOR THE 2016 CALENDAR YEAR HAVE BEEN RECLASSED FROM LINE 12 TO LINE 13. FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ASSIGNABLE 4,870,660. PATRONAGE CAPITAL REITRED -780,265. NET CHANGE IN MEMBERSHIP 1,135. 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. TAYLOR ELECTRIC TRUST PO BOX 250 MERKEL TX 79536 262612715 CHARITY TX 501(C)(3) LINE 10 TAYLOR ELECTRIC COOPERATIVE 1 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 0 0 TAYLOR ELECTRIC TRUST M N/A - LESS THAN $50,000 TAYLOR ELECTRIC TRUST N N/A - LESS THAN $50,000 TAYLOR ELECTRIC TRUST O N/A - LESS THAN $50,000