2025-11-13T14:11:43-06:00 2024-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2024-01-01 740779023 MEDINA ELECTRIC COOPERATIVE INC MEDI 8666323532 PO BOX 370 HONDO TX 78861 HERBERT GREBE III CEO 8666323532 2025-09-24 1 0 WILLIAM M MILLER P00439459 8067473806 2025-09-24 X 2024 2025-03-06 01:10:19Z HERBERT GREBE III PO BOX 370 HONDO TX 78861 158114619 0 X WWW.MEDINAEC.ORG X 1938 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 8 8 157 0 0 0 0 0 160082550 157003218 263427 296761 250427 245362 160596404 157545341 120110 95199 14737238 10976274 15065386 16308713 0 0 0 131171724 129228348 161094458 156608534 -498054 936807 328349312 358650184 188005458 208352189 140343854 150297995 EXCEED MEMBER EXPECTATIONS IN EVERYTHING WE DO. 0 0 SALES OF ELECTRIC POWER TO MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 37,645 ACTIVE SERVICES AT YEAR END. 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 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 78 0 157 1 0 0 0 0 0 160535346 2080737 0 0 0 X 8 8 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X LAURIE VAN DAMME CFO 8666323532 2308 18TH STREET HONDO TX 78861 X JAMES CRAWFORD DIRECTOR (OCT-NOV) 3.30 X 2850 0 0 JODENE FOLEY DIRECTOR 4.80 X 17850 0 0 JOSE LUIS GONZALEZ DIRECTOR 6.00 X 18750 0 0 MICHAEL HOLZHAUS DIRECTOR (OCT-DEC) 3.50 X 3600 0 0 LARRY HUESSER VICE PRESIDENT 6.40 X X 18450 0 0 JAMES RAINES DIRECTOR 4.80 X 19200 0 0 RODOLFO RODRIGUEZ DIRECTOR 5.00 X 17250 0 0 WAYNE SCHOLTZ DIRECTOR (JAN-OCT) 2.20 X 9750 0 0 ANNETTE SORRELLS SECRETARY/TREASURER 4.60 X X 17100 0 0 KENNETH WEYNAND PRESIDENT (OCT-DEC) 7.20 X X 26150 0 0 KENNETH G WHITE PRESIDENT (JAN-OCT) 5.70 X X 17050 0 0 HEBERT OTT GREBE III CHIEF EXECUTIVE OFFICER 50.00 X 226344 0 102721 KEITH CALLE CHIEF ENGINEERING DIVISION OFFICER 45.00 X 182520 0 52762 LEONARD GEYER CHIEF OPERATIONS DIVISION 40.00 X 149412 0 93433 PATRICIA TAYLOR CHIEF ADMINISTRATIVE OFFICER 45.00 X 159419 0 113103 DOUG KINDRED CHIEF IT OFFICER 70.00 X 161181 0 84081 LAURIE VAN DAMME CHIEF FINANCIAL OFFICER 45.00 X 160412 0 87633 ZACHARY LYLE MANAGER OF SYSTEM OPS 40.00 X 130833 0 42100 PATRICIO GARZA JOURNEYMAN 52.00 X 124506 0 56715 SEAN KRAUSE MANAGER OF ENGINEERING 40.00 X 127249 0 49286 MARIO MOLINA WORKING FOREMAN 54.00 X 127751 0 36816 BRETT WILLIAMS MANAGER OF FINANCE 40.00 X 132852 0 51034 1850479 0 769684 38 0 1 0 LINETEC SERVICESINC PO BOX 13650 ALEXANDRIA LA 71315 CONSTRUCTION CONTRACTOR 7744916 COOPERATIVE BUILDING SOLUTIONS 77 WESTPOINT PLAZA SUITE 250 ST LOUIS MO 63146 HEADQUARTERS CONTRACTOR 1960109 CEDAR BEETLE INC PO BOX 1044 HONDO TX 78861 ROW CLEARING CONTRACTOR 1826365 SCHNEIDER ENGINEERING INC 191 MENGER SPRINGS PARKWAY BOERNE TX 78006 ENGINEERING CONTRACTOR 1808297 PANNELL CONTRACTING LLC PO BOX 2107 LEAKEY TX 78873 ROW CLEARING CONTRACTOR 1624231 19 X SALES OF ELECTRICITY 221000 147603695 147603695 PATRONAGE DIVIDENDS 221000 9047499 9047499 SERVICE FEES 221000 323770 323770 OTHER PROGRAM REVENUE 221000 19128 19128 ELECTRIC TRANSMISSION REVENUE 221000 9126 9126 157003218 292542 292542 6960 900 0 0 6960 900 7860 900 6960 30579 26360 4219 4219 4219 599667 542918 56749 56749 POLE ATTACHMENT INCOME 221000 180753 180753 180753 157545341 157045958 0 499383 X 95199 10976274 1741021 9974850 1886303 1912821 793718 5417210 8124658 PURCHASED POWER 101560924 DISTRIBUTION EXPENSE 9521640 ADMIN & GENERAL EXPENSE 3366732 CONSUMER EXPENSE 1128062 109122 156608534 1755733 1443675 3600000 4678918 4127104 77786 38808 374979 484514 296557760 41892308 236507203 254665452 79615884 88011413 5338809 6279218 328349312 358650184 18996757 16117650 2389 124535 122075208 129421134 46931104 62688870 188005458 208352189 X 105030 107220 0 0 140238824 150190775 140343854 150297995 328349312 358650184 X 936807 9017334 X X 0 1 X 1 0 0 1 X 1871918 1871918 23820757 4853604 18967153 244202674 37038704 207163970 26662411 26662411 254665452 PATRONAGE CAPITAL - SMEC 2495338 C PATRONAGE CAPITAL - COBANK 406820 C PATRONAGE CAPITAL - TEC 6398214 C PATRONAGE CAPITAL - STEC 70928889 C CONTRIBUTED CAPITAL - STEC 5659516 C CAPITAL TERM CERTIFICATES - CFC 816071 C PATRONAGE CAPITAL - CFC 791987 C PATRONAGE CAPITAL - NRTC 216253 C PATRONAGE CAPITAL - NISC 183453 C CONTRIBUTED CAPITAL - FEDERATED 86665 C OTHER INVESTMENTS IN ASSOC ORGS. 17057 C MEMBERSHIPS IN ASSOC ORGS. 11150 C 88011413 CONSUMER DEPOSITS 3173568 ACCUMULATED PROVISION FOR PENSIONS AND BENEFITS 3149096 ACCRUED OPERATING TAXES 381232 DEFERRED CREDIT - SUBSTATION FACILITIES AGREEMENTS 31300000 DEFERRED CREDIT - OTHER 25006 UNAPPLIED AID TO CONSTRUCTION 23998408 POWER COST OVER COLLECTION 661560 62688870 X 157545341 0 157545341 0 157545341 145632260 0 145632260 10976274 10976274 156608534 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 REPORTED TO 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. 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), OR OTHER STATE TAXING AUTHOIRTY AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 10,976,274. 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. X X X 0 0 0 HEBERT OTT GREBE III CHIEF EXECUTIVE OFFICER 222628 0 0 0 3716 0 73651 0 29070 0 329065 0 0 0 PATRICIA TAYLOR CHIEF ADMINISTRATIVE OFFICER 153140 0 3997 0 2282 0 84733 0 28370 0 272522 0 0 0 LAURIE VAN DAMME CHIEF FINANCIAL OFFICER 155818 0 3335 0 1259 0 58442 0 29191 0 248045 0 0 0 DOUG KINDRED CHIEF IT OFFICER 158153 0 2360 0 668 0 60981 0 23100 0 245262 0 0 0 LEONARD GEYER CHIEF OPERATIONS DIVISION 144147 0 4252 0 1013 0 63812 0 29621 0 242845 0 0 0 KEITH CALLE CHIEF ENGINEERING DIVISION OFFICER 179317 0 2755 0 448 0 20823 0 31939 0 235282 0 0 0 BRETT WILLIAMS MANAGER OF FINANCE 130217 0 2243 0 392 0 21080 0 29954 0 183886 0 0 0 PATRICIO GARZA JOURNEYMAN 120362 0 3484 0 660 0 38253 0 18462 0 181221 0 0 0 SEAN KRAUSE MANAGER OF ENGINEERING 124508 0 2161 0 580 0 28391 0 20895 0 176535 0 0 0 ZACHARY LYLE MANAGER OF SYSTEM OPS 129628 0 771 0 434 0 15796 0 26304 0 172933 0 0 0 MARIO MOLINA WORKING FOREMAN 126861 0 771 0 119 0 10637 0 26179 0 164567 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. HEBERT OTT GREBE III: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 66,714 EMPLOYER CONTRIBUTION TO 401(K) PLAN 6,937 TOTAL REPORTED IN COLUMN C $ 73,651 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (66,714) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 52,666 EXPENSE TO THE COOPERATIVE $ 59,603 PATRICIA TAYLOR: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 79,881 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,852 TOTAL REPORTED IN COLUMN C $ 84,733 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (79,881) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 35,677 EXPENSE TO THE COOPERATIVE $ 40,529 LAURIE VAN DAMME: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 53,590 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,852 TOTAL REPORTED IN COLUMN C $ 58,442 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (53,590) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 35,677 EXPENSE TO THE COOPERATIVE $ 40,529 DOUG KINDRED: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 56,168 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,813 TOTAL REPORTED IN COLUMN C $ 60,981 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (56,168) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 35,328 EXPENSE TO THE COOPERATIVE $ 40,141 LEONARD GEYER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 59,293 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,519 TOTAL REPORTED IN COLUMN C $ 63,812 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (59,293) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 32,925 EXPENSE TO THE COOPERATIVE $ 37,444 KEITH CALLE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 15,194 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,629 TOTAL REPORTED IN COLUMN C $ 20,823 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (15,194) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 41,230 EXPENSE TO THE COOPERATIVE $ 46,859 BRETT WILLIAMS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 16,894 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,186 TOTAL REPORTED IN COLUMN C $ 21,080 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (16,894) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 32,386 EXPENSE TO THE COOPERATIVE $ 36,572 PATRICIO GARZA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 35,276 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,977 TOTAL REPORTED IN COLUMN C $ 38,253 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (35,276) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,551 EXPENSE TO THE COOPERATIVE $ 24,528 SEAN KRAUSE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 24,537 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,854 TOTAL REPORTED IN COLUMN C $ 28,391 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (24,537) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 31,349 EXPENSE TO THE COOPERATIVE $ 35,203 ZACHARY LYLE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 15,255 EMPLOYER CONTRIBUTION TO 401(K) PLAN 541 TOTAL REPORTED IN COLUMN C $ 15,796 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (15,255) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 32,765 EXPENSE TO THE COOPERATIVE $ 33,306 MARIO MOLINA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 7,762 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,875 TOTAL REPORTED IN COLUMN C $ 10,637 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (7,762) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 20,956 EXPENSE TO THE COOPERATIVE $ 23,831 FORM 990, PART I, LINE 19: 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 NET INCOME OF $936,807, WHICH IS THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE. 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 12/31/24 $ 6,267,342 LESS: UNBILLED REVENUE 12/31/23 (5,330,536) (A) - INCREASE EQUALS AMOUNT ON PART I, LINE 19 $ 936,807 (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $10,976,274 TOTAL 2024 NET MARGIN PER FINANCIAL STATEMENTS (A + B) $11,913,081 FORM 990, PART VI, SECTION A, LINE 1A THE COOPERATIVE HAD 8 BOARD MEMBERS AT YEAR END; ALL 8 ARE ALLOWED TO VOTE, HOWEVER, THE BOARD PRESIDENT VOTES ONLY IN THE CASE OF A TIE. 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. THE DISCUSSION AND REVIEW WAS PERFORMED AT THE BOARD MEETING IMMEDIATELY BEFORE FILING THE FORM 990. FORM 990, PART VI, SECTION B, LINE 12C BOARD MEMBERS AND OFFICERS ARE REQUIRED TO BE FAMILIAR WITH THE COOPERATIVE'S CONFLICT OF INTEREST POLICY. BOARD MEMBERS AND OFFICERS ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY MONTHLY TO THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. ALSO, THE FINANCE COMMITTEE REVIEWS FOR POTENTIAL CONFLICTS QUARTERLY. FORM 990, PART VI, SECTION B, LINE 15 IN GENERAL, THE BOARD OF DIRECTORS ANNUALLY APPROVE A MARKET BASED, PERFORMANCE DRIVEN COMPENSATION SCALE FOR THE CEO. SPECIFICALLY, THE BOARD OF DIRECTORS USE AN INDEPENDENT COMPENSATION CONSULTANT AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE BOARD AND THE GENERAL MANAGER USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER. THE SURVEY INCLUDES SALARIES FROM SIMILARLY SITUATED COOPERATIVES THROUGHOUT TEXAS AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING. THE COOPERATIVE'S ARTICLES OF INCORPORATION AND BYLAWS CAN BE FOUND ON ITS WEBSITE. 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. 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, VISION 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 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 VII, SECTION A: PURSUANT TO COOPERATIVE'S BYLAWS AND POLICIES, THE BOARD OF DIRECTORS ARE PAID OR REIMBURSED A FIXED FEE AND EXPENSES FOR ATTENDING A: 1) BOARD MEETING, 2) FUNCTION, MEETING, OR EVENT INVOLVING/RELATING THE COOPERATIVE, OR 3) FUNCTION, MEETING, OR EVENT INVOLVING/RELATING TO OR ENHANCING THE DIRECTOR'S ABILITY TO SERVE IN THE ROLE OF DIRECTOR. THE COMPENSATION IS PAID ON A FAIR AND EQUITABLE BASIS FOR TIME DEVOTED AND SPENT ATTENDING THE EVENTS LISTED. THE FOLLOWING DATA IS SUPPLEMENTAL INFORMATION RELATED TO THE BOARD OF DIRECTORS' HOURS AND COMPENSATION: TOTAL DIRECTOR COMPENSATION $ 168,000 TOTAL NUMBER OF DIRECTORS 9 TOTAL AVERAGE COMPENSATION PAID $ 18,667 TOTAL AVERAGE HOURS PER WEEK 4.90 AVERAGE COMPENSATION PER HOUR $ 73.26 TOTAL DIRECTOR COMPENSATION AS A % OF REVENUE 0.11% 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 RURAL UTILITIES SERVICE (RUS) UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED FOR 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 RECONCILES AMOUNTS REPORTED ON LINES 5-7 TO TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 11,715,871 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (168,000) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (533,733) PLUS: LABOR ALLOCATED TO POWER 50,757 PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGIN 4,192 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 2,186,373 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 120,184 TOTAL WAGES ACCRUED AND/OR PAID $ 13,375,644 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 2,008,785 OFFICE SUPPLIES 563,786 OUTSIDE SERVICES 387,726 INSURANCES 406,520 DIRECTORS 276,369 INSTITUTIONAL AND GOODWILL ADVERTISING 458,481 DUES TO ASSOCIATED ORGANIZATIONS 118,635 ANNUAL MEETING 94,790 MISCELLANEOUS GENERAL 1,873,910 REGULATORY COMMISSION 245,049 MAINTENANCE OF GENERAL PLANT 913,058 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 7,347,109 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (168,000) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (2,601,500) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (1,210,877) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 3,366,732 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 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). THE ALLOCATION OF PATRONAGE DIVIDENDS SHOULD BE MADE WITHIN A REASONABLE PERIOD OF TIME 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 FOR THE 2024 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 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 10,976,274. PATRONAGE CAPITAL RETIRED - TOTAL -2,249,889. PATRONAGE CAPITAL RETIRED - DISCOUNT 180,502. NET CHANGE IN MEMBERSHIPS 2,190. OTHER COMPREHENSIVE INCOME - ADJUSTMENT FOR POSTRETIREMENT BENEFITS 108,257. FORM 990, PART XII, LINE 2C: THE BOARD OF DIRECTORS HAVE ASSIGNED BOARD MEMBERS TO AN AUDIT COMMITTEE (FINANCE COMMITTEE) FOR OVERSEEING THE FINANCIAL STATEMENT AUDIT AND SELECTING THE INDEPENDENT AUDITOR. PROCEDURAL CHANGES DID NOT OCCUR DURING THE YEAR.