2018-11-13T11:20:06-06:00 2017-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2017-01-01 710027635 CARROLL ELECTRIC COOPERATIVE CORPORATION CARR 8704232161 PO BOX 4000 BERRYVILLE AR 72616 ROB BOAZ PRESIDENT/CEO 8704232161 2018-11-05 1 WILLIAM M MILLER P00439459 8067473806 2018-11-05 X 65.182.80.152 2018-11-05 11:41:07 CS P B203D40F61B6B7195294B4E759D44885CEF08510 587A88673713A033F58E04FDF6801CBB1F7DD2F2 2017 2019-02-21 02:37:17Z ROB BOAZ PO BOX 4000 BERRYVILLE AR 72616 179622135 0 X WWW.CARROLLECC.COM X 1937 AR TO SERVE OUR MEMBERS WITH SAFE, RELIABLE, AND AFFORADABLE ELECTRICITY. 9 9 287 0 0 0 0 0 176240968 174698689 3674983 3557075 1039867 1071384 180955818 179327148 30171 28768 12332008 8809349 19297506 20889792 0 0 0 149296133 149599239 180955818 179327148 0 0 552556509 562634209 315863212 317379842 236693297 245254367 WE EXIST TO SERVE OUR MEMBERS WITH SAFE, RELIABLE, AND AFFORDABLE ELECTRICITY. 0 0 SALES OF ELECTRIC POWER TO MEMBERS - 98,282 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 0 0 1 0 1 0 1 1 0 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 1 126 0 287 1 0 0 0 0 0 171168973 8583755 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 CHAD ALLEN 8704232161 920 HWY 62 SPUR BERRYVILLE AR 72616 ALAN HUNNICUTT CHAIRMAN 7.90 X X 27346 0 413 CARLA HATHORN VICE CHAIRMAN 7.50 X X 29605 0 643 WINFRED PRIER SECRETARY/TREASURER 3.60 X X 34081 0 0 J NEFF BASORE DIRECTOR 5.80 X 27466 0 422 KRISTY NOBLE DIRECTOR 4.90 X 40076 0 831 DAVID GLASS DIRECTOR 8.10 X 47881 0 1137 CHARLES R SHINN DIRECTOR 3.80 X 27326 0 400 JOSEPH R SPIVEY DIRECTOR 6.20 X 37856 0 998 BOBBY G RAULSTON DIRECTOR 5.40 X 36216 0 683 ROB BOAZ PRESIDENT/CEO 50.00 X 458958 0 283634 CHAD ALLEN VP FINANCIAL SERVICES 45.00 X 167435 0 106293 JAMES SANDERS VP EXECUTIVE SERVICES 45.00 X 253663 0 111097 KEAN STEELY VP ENGINEERING & OPERATION 40.00 X 221050 0 96399 MICHAEL DODGE VP BENTONVILLE DISTRICT 50.00 X 211669 0 111321 DAVID BROCK VP OFFICE SERVICES 47.00 X 169812 0 89726 JOHN WORLEY VP BENTON COUNTY LINES SERVICES 55.00 X 145005 0 107140 1935445 0 911137 30 0 1 0 ARKANSAS ELECTRIC COOPERATIVEINC PO BOX 194208 LITTLE ROCK AR 72219 CONSTRUCTION 4918474 BARROWS EXCAVATION INC 49 CR 404 BERRYVILLE AR 72616 CONSTRUCTION 1810353 BLACK & MCDONALD 6001 FRONT STREET KANSAS CITY MO 64120 ENGINEERING SERVICES 945300 ALLGEIER MARTIN & ASSOCIATES INC PO BOX 2627 JOPLIN MO 64803 ENGINEERING SERVICES 763339 PROGRESSIVE SOLUTIONS LLC PO BOX 825124 PHILADELPHIA PA 19182 ROW VEGETATION MANAGEMENT 607877 12 X SALES OF ELECTRICITY 221000 169128781 169128781 PATRONAGE DIVIDENDS 221000 4216687 4216687 SERVICE FEES 221000 922881 922881 SURGE SUPPRESSOR REVENUE 221000 222753 222753 OTHER PROGRAM REVENUE 221000 207587 207587 174698689 3465178 3465178 5940 0 5940 5940 5940 223974 132077 91897 91897 91897 189228 162910 26318 26318 POLE ATTACHMENT INCOME 221000 1039126 1039126 1039126 179327148 174725007 0 4602141 X 15268 13500 8809349 1329700 12580405 2851276 3173635 954776 10138858 17008979 PURCHASED POWER 109163338 DISTRIBUTION EXPENSE 7381938 ADMIN & GENERAL EXPENSE 5121862 CONSUMER EXPENSE 396076 388188 179327148 1196206 762868 12682894 3373398 15661772 14562748 4050278 4366363 6740595 5960894 609702851 158905262 429765060 450797589 66579183 66896612 15880521 15913737 552556509 562634209 14747301 10731878 284737357 287413302 16378554 19234662 315863212 317379842 X 1825925 1893043 0 0 234867372 243361324 236693297 245254367 552556509 562634209 X 0 8561070 X X 0 0 0 0 0 6902117 6902117 65015470 5738543 59276927 500247900 153166719 347081181 37537364 37537364 450797589 CAPITAL TERM CERTIFICATES 1809827 C PATRONAGE CAPITAL - AECC 58483556 C PATRONAGE CAPITAL - AECI 3749065 C PATRONAGE CAPITAL - CFC 1029328 C PATRONAGE CAPITAL - COBANK 648277 C PATRONAGE CAPITAL - FEDERATED 910307 C PATRONAGE CAPITAL - ARESIT 262437 C MEMBERSHIPS & OTHER 3420 C PATRONAGE CAPITAL - FARMERS 354 C PATRONAGE CAPITAL - SOUTH COOP 41 C 66896612 ACCUMULATED PROVISION FOR POST RETIREMENT BENEFITS 5581985 CONSUMER DEPOSITS 5629343 ACCRUED OPERATING TAXES 5401696 DEFERRED CREDITS 2621638 19234662 X 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 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. 1 SCHOLARSHIPS FOR POST-SECONDARY EDUCATION 26 13500 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. EACH GRANT, SPONSORSHIP AND/OR DONATION MADE DURING THE YEAR WAS BELOW THE REPORTING THRESHOLD OF SCHEDULE I, PART II. PART III: EACH HIGH SCHOOL IN THE COOPERATIVE'S SERVICE TERRITORY SELECTS ONE SCHOLARSHIP RECIPIENT THAT IS CHOSEN BY THE COUNSELOR OF EACH RESPECTIVE HIGH SCHOOL. UPON ENROLLMENT BY THE SCHOLARSHIP RECIPIENT, THE COOPERATIVE PAYS THE COLLEGE OR UNIVERSITY DIRECTLY. X 1 1 X X X 0 1 0 ROB BOAZ PRESIDENT/CEO 448337 0 5396 0 5225 0 264544 0 19090 0 742592 0 0 0 CHAD ALLEN VP FINANCIAL SERVICES 160651 0 5843 0 941 0 87946 0 18347 0 273728 0 0 0 JAMES SANDERS VP EXECUTIVE SERVICES 216208 0 5564 0 31891 0 92375 0 18722 0 364760 0 26400 0 KEAN STEELY VP ENGINEERING & OPERATION 215053 0 3787 0 2210 0 77691 0 18708 0 317449 0 0 0 MICHAEL DODGE VP BENTONVILLE DISTRICT 206450 0 3786 0 1433 0 92669 0 18652 0 322990 0 0 0 DAVID BROCK VP OFFICE SERVICES 161621 0 6821 0 1370 0 71373 0 18353 0 259538 0 0 0 JOHN WORLEY VP BENTON COUNTY LINES SERVICES 142799 0 741 0 1465 0 89030 0 18110 0 252145 0 0 0 PART II, COLUMNS B, C, & D: THE AMOUNTS REPORTED ON SCHEDULE J ARE NOT ALL EXPENSE ITEMS TO THE COOPERATIVE IN THE FILING PERIOD, AND IF REPORTED ON A CASH OR ACCRUAL BASIS, THESE AMOUNTS WOULD VARY. THE AMOUNTS REPORTED IN SCHEDULE J, AS REQUIRED BY THE IRS, MEASURE THE VESTING OF BENEFITS PAYABLE AND NOT THE ACTUAL EXPENSE TO THE COOPERATIVE. IN EARLY YEARS OF EMPLOYMENT, VESTING IS LOW. IN LATER YEARS, AS EMPLOYEES APPROACH RETIREMENT, VESTING IS HIGH. WITH VERY LIMITED EXCEPTION, ALL RETIREMENT PLANS IN COLUMN C ARE THE SAME PLANS OFFERED TO ALL EMPLOYEES OF THE COOPERATIVE. THE ACTUAL COST AND/OR EXPENSE OF REPORTABLE COMPENSATION TO THE COOPERATIVE FOR THE FORM 990 FILING PERIOD IS DISPLAYED AS FOLLOWS: ROB BOAZ: COLUMN B (I-III) - BOX 5, W-2 WAGES $ 458,958 COLUMN C - EMPLOYER RETIREMENT PLAN EXPENSE $ 153,017 COLUMN D - EMPLOYER PROVIDED NON-TAXABLE BENEFITS EXPENSE $ 19,090 CHAD ALLEN: COLUMN B (I-III) - BOX 5, W-2 WAGES $ 167,435 COLUMN C - EMPLOYER RETIREMENT PLAN EXPENSE $ 57,742 COLUMN D - EMPLOYER PROVIDED NON-TAXABLE BENEFITS EXPENSE $ 18,347 JAMES SANDERS: COLUMN B (I-III) - BOX 5, W-2 WAGES $ 253,663 COLUMN C - EMPLOYER RETIREMENT PLAN EXPENSE $ 77,681 COLUMN D - EMPLOYER PROVIDED NON-TAXABLE BENEFITS EXPENSE $ 18,722 KEAN STEELY: COLUMN B (I-III) - BOX 5, W-2 WAGES $ 221,050 COLUMN C - EMPLOYER RETIREMENT PLAN EXPENSE $ 76,920 COLUMN D - EMPLOYER PROVIDED NON-TAXABLE BENEFITS EXPENSE $ 18,708 MICHAEL DODGE: COLUMN B (I-III) - BOX 5, W-2 WAGES $ 211,669 COLUMN C - EMPLOYER RETIREMENT PLAN EXPENSE $ 73,976 COLUMN D - EMPLOYER PROVIDED NON-TAXABLE BENEFITS EXPENSE $ 18,652 DAVID BROCK: COLUMN B (I-III) - BOX 5, W-2 WAGES $ 169,812 COLUMN C - EMPLOYER RETIREMENT PLAN EXPENSE $ 58,016 COLUMN D - EMPLOYER PROVIDED NON-TAXABLE BENEFITS EXPENSE $ 18,353 JOHN WORLEY: COLUMN B (I-III) - BOX 5, W-2 WAGES $ 145,005 COLUMN C - EMPLOYER RETIREMENT PLAN EXPENSE $ 45,696 COLUMN D - EMPLOYER PROVIDED NON-TAXABLE BENEFITS EXPENSE $ 18,110 PART I, LINE 1A: TRAVEL FOR COMPANIONS - PURSUANT TO COOPERATIVE POLICY, THE PRESIDENT/CEO (R. BOAZ) RECEIVES THE TRAVEL FOR COMPANION BENEFIT AS APPROVED BY THE BOARD ON AN AS NEEDED BASIS. TRAVEL FOR COMPANION EXPENSES PAID DURING THE YEAR TOTALED $404. PART I, LINE 4B: QUALIFYING DIRECTORS AND THE PRESIDENT/CEO (R. BOAZ) PARTICIPATE IN A PLAN PURSUANT TO BOARD POLICY. BENEFITS VEST BASED ON CONDITIONS WITHIN THE POLICY AND BOARD APPROVAL AT THAT TIME. THE ACTUARIAL INCREASE OF BENEFITS POTENTIALLY PAYABLE UNDER THE PLAN ARE REPORTED ON FORM 990, PART VII, SECTION A, COLUMN F AND ARE SUMMARIZED AS FOLLOWS: DIRECTORS $ 5,527 PRESIDENT/CEO 156 TOTAL ACCRUED UNDER THE PLAN $ 5,683 BECAUSE CERTAIN EMPLOYEES ARE PROHIBITED BY IRS RULES FROM FULLY PARTICIPATING IN CONVENTIONAL RETIREMENT PLANS, THE COOPERATIVE SPONSORS A SECTION 457(F) NON-QUALIFIED DEFERRED COMPENSATION (NQDC) PLAN WHERE, FOR PLAN PARTICIPANTS, BENEFITS UNDER THE PLAN ARE CURRENTLY ACCRUED AND PARTIALLY VESTED IN THE SAME YEAR. TOTAL BENEFITS PAID TO VP EXECUTIVE SERVICES (J. SANDERS) DURING THE YEAR WERE $26,400. THE COOPERATIVE ALSO SPONSORS A SECTION 457(F) NON-QUALIFIED DEFERRED COMPENSATION (NQDC) PLAN WHERE, FOR THE PLAN PARTICIPANT, BENEFITS ACCRUE ANNUALLY BUT ARE NOT VESTED/PAYABLE UNTIL NORMAL RETIREMENT AGE. THE ACTUARIAL INCREASE ASSOCIATED WITH PARTICIPATION IN THE PLAN FOR PRESIDENT/CEO (R. BOAZ) IS $164,026. SCHEDULE J: THE FOLLOWING DISCLOSURES ARE AN INTEGRAL PART OF UNDERSTANDING COMPENSATION REPORTED IN SCHEDULE J. THESE ADDITIONAL DISCLOSURES FURTHER EXPLAIN BENEFITS PROVIDED BY THE COOPERATIVE TO ITS EMPLOYEES AND, IN GENERAL, AMOUNTS ACCRUED UNDER APPLICABLE PLANS. PLEASE NOTE, HOWEVER, WITH RESPECT TO CERTAIN RETIREMENT BENEFITS, THE AMOUNTS REPORTED PURSUANT TO FORM 990 INSTRUCTIONS ARE NOT REPRESENTATIVE OF THE ACTUAL COST/EXPENSE TO THE COOPERATIVE. FORM 990, PART VI, SECTION A, LINE 1 THE COOPERATIVE HAS 9 BOARD MEMBERS; ALL 9 ARE ALLOWED TO VOTE, HOWEVER THE BOARD CHAIRMAN VOTES ONLY IN THE CASE OF A TIE. FORM 990, PART VI, SECTION A, LINE 2 BUSINESS RELATIONSHIP: ALAN HUNNICUTT (DIRECTOR) AND KRISTY NOBLE (DIRECTOR) SHARE A BUSINESS RELATIONSHIP. ROB BOAZ (PRESIDENT/CEO) AND ALAN HUNNICUTT (DIRECTOR) BOTH SERVED ON THE BOARD OF ARKANSAS ELECTRIC COOPERATIVE CORPORATION AT THE REQUEST OF AND FOR THE BENEFIT OF THE COOPERATIVE. ROB BOAZ (PRESIDENT/CEO) AND CARLA HATHORN (DIRECTOR) BOTH SERVED ON THE BOARD OF ARKANSAS ELECTRIC COOPERATIVE, INC. 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. ELECTIONS ARE DONE VIA UNITED STATES MAIL ON A ONE MEMBER ONE VOTE BASIS. MEMBERS COMPLETE AND RETURN WRITTEN BALLOTS IN A SEALED ENVELOPE ADDRESSED TO THE SECRETARY OF THE COOPERATIVE. 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 PROVIDED A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION AND REVIEW PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C OFFICIALS MUST COMPLETE AND SIGN A CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM ATTACHED TO THE CONFLICT OF INTEREST POLICY. EACH OFFICIAL IS RESPONSIBLE FOR ENSURING THAT THE FORM IS KEPT CURRENT AND MUST IMMEDIATELY SUBMIT AN UPDATED FORM TO THE APPROPRIATE ETHICS COMMITTEE IF THERE IS ANY MATERIAL CHANGE TO ANY OF THE INFORMATION CONTAINED IN THE FORM. PER THE POLICY DEFINITION, OFFICIAL MEANS A DIRECTOR, OFFICER, AN EMPLOYEE WHO IS RESPONSIBLE FOR THE PROCUREMENT OF GOODS AND SERVICES INCLUDING THE SELECTION, AWARD, OR ADMINISTRATION OF CONTRACTS DURING NORMAL OR EMERGENCY SITUATIONS, OR KEY EMPLOYEE AS DEFINED BY THE INTERNAL REVENUE SERVICE. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE A COMPENSATION SURVEY AND COMPARE COMPENSATION REPORTED ON OTHER COOPERATIVES' IRS FORMS 990 WHEN DETERMINING THE COMPENSATION OF THE PRESIDENT/CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR PRESIDENTS/CEOS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN ARKANSAS AND THE NATION. THE BOARD AND THE PRESIDENT/CEO USE A COMPENSATION SURVEY AND COMPARE COMPENSATION REPORTED ON OTHER COOPERATIVES' IRS FORMS 990 WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILARLY SITUATED COOPERATIVES THROUGHOUT ARKANSAS AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE ARTICLES OF INCORPORATION AND THE BYLAWS OF THE COOPERATIVE ARE PROVIDED IN WRITTEN OR ELECTRONIC FORM UPON REQUEST. THE BYLAWS ARE AVAILABLE ON THE COOPERATIVE'S WEBSITE. THE ANNUAL FINANCIAL REPORT IS DISTRIBUTED TO ALL MEMBERS IMMEDIATELY PRIOR TO THE ANNUAL MEETING OF THE MEMBERS. ANY MEMBER, UPON REQUEST, IS PROVIDED A COMPLETE COPY OF THE COOPERATIVE'S AUDIT REPORT. FORM 990, PART VIII, LINE 2B: 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 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, 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 $13,910,105 LESS: DIRECTOR FEES REPORTED ON FORM 1099-MISC (307,853) LESS: DIRECTOR RETIREMENT BENEFITS INCLUDED IN LINE 5 (5,527) LESS: OFFICER BENEFITS REPORTED ON LINE 5 (389,927) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 6,049,256 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 1,440,764 TOTAL WAGES ACCRUED AND/OR PAID: $20,696,818 FORM 990, PART IX, LINE 24: ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 3,978,393 OFFICE SUPPLIES 1,044,550 OUTSIDE SERVICES 184,505 PENSION & BENEFITS 1,169,348 REGULATORY COMMISION 300,329 DUPLICATE CHARGES (CREDIT) (137,440) MISCELLANEOUS GENERAL 3,023,423 DIRECTORS 374,245 MAINTENANCE OF GENERAL PLANT 1,736,452 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $11,673,805 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (28,768) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (313,380) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (3,985,704) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (2,224,091) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 5,121,862 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 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 24E: OTHER EXPENSES ARE COMPRISED OF THE FOLLOWING: TRANSMISSION $ 372,009 OTHER DEDUCTIONS 16,179 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 388,188 FORM 990, PART XI, LINE 9: NET CHANGE IN MEMBERSHIPS 67,118. PATRONAGE CAPITAL ASSIGNED 8,809,349. PATRONAGE CAPITAL RETIRED - DECLARED -1,859,794. UNCLAIMED PATRONAGE RETIREMENTS RETAINED PER STATE LAW 2,558,966. OTHER COMPREHENSIVE INCOME(LOSS) -1,014,569. FORM 990, PART XII, LINE 2B: AUDITED FINANCIAL STATEMENTS WERE PREPARED BY AN INDEPENDENT ACCOUNTANT FOR THE COOPERATIVE'S FINANCIAL STATEMENT AUDIT YEAR END OF FEBRUARY 28TH. THE TAX RETURN HAS BEEN AND CONTINUES TO BE PREPARED BASED ON A CALENDAR TAX YEAR END OF DECEMBER 31. 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.