2018-10-17T14:59:16-05:00 2017-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2017-01-01 740667584 HAMILTON COUNTY ELECTRIC COOPERATIVE ASSOCIATION HAMI 2543863123 PO BOX 753 HAMILTON TX 76531 STEVE YOUNG GENERAL MANAGER/CEO 2543863123 2018-10-12 1 WILLIAM M MILLER P00439459 8067473806 2018-10-12 X 65.182.80.152 2018-10-12 16:24:08 CD P B203D40F61B6B7195294B4E759D44885CEF08510 587A88673713A033F58E04FDF6801CBB1F7DD2F2 2017 2018-06-14 16:35:46Z STEVE YOUNG PO BOX 753 HAMILTON TX 76531 25709646 0 X WWW.HAMILTONELECTRIC.COOP X 1938 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 7 7 44 0 0 0 0 0 23514001 24886113 290124 -283368 23141 23712 23827266 24626457 5444 9888 1252016 1568069 2420384 2525402 0 0 0 19859298 20806466 23537142 24909825 290124 -283368 82457158 83594144 45385536 46878762 37071622 36715382 IT IS THE MISSION OF HAMILTON COUNTY ELECTRIC COOPERATIVE ASSOCIATION TO PROVIDE SAFE, RELIABLE, QUALITY ELECTRIC SERVICE TO OUR MEMBERS AT AN AFFORDABLE PRICE. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 18,007 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 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 57 0 44 1 0 0 0 0 0 24693449 1389267 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 CODY LASATER ASST GENERAL MANAGER 2543863123 420 NORTH RICE HAMILTON TX 76531 X PM GERALD JR PRESIDENT 1.60 X X 5719 0 0 SAM CAMPBELL VICE PRESIDENT 1.40 X X 5100 0 0 BOB GARDNER SECRETARY/TREASURER 1.60 X X 5719 0 0 MELVIN EILERS JR DIRECTOR 1.30 X 5100 0 0 ERVIN KOERTH DIRECTOR 1.80 X 5719 0 0 HENRY LANGFORD DIRECTOR 1.40 X 4975 0 0 DUSTIN DUNCAN DIRECTOR 1.80 X 5241 0 0 STEVE YOUNG GENERAL MANAGER/CEO 40.00 X 159522 0 71214 CODY LASATER ASST. GENERAL MANAGER 40.00 X 119628 0 33990 WILLIAM A PAFFORD LINE SUPERINTENDENT 40.00 X 109307 0 40894 426030 0 146098 3 0 1 0 NORTHEAST SERVICES INC PO BOX 1185 KENNEDALE TX 76060 TREE TRIMMING 694267 NISC PO BOX 1147 MANDAN ND 58554 BILLING & IT SERVICES 161808 2 X SALES OF ELECTRICITY 221000 23553835 23553835 PATRONAGE DIVIDENDS 221000 1241508 1241508 SERVICE FEES 221000 90770 90770 24886113 650923 650923 148898 1083189 -934291 -934291 -934291 POLE ATTACHMENT INCOME 221000 23712 23712 23712 24626457 24886113 0 -259656 X 9888 1568069 421927 1362487 352860 265012 123116 2017256 2369667 PURCHASED POWER 13952059 DISTRIBUTION EXPENSES 1536062 ADMIN & GENERAL EXPENSE 500310 CONSUMER EXPENSE 351413 79699 24909825 1185533 944302 146115 693804 2211399 1938754 131813 138072 1213002 1082105 79775527 14393948 64901992 65381579 12641721 13374401 25583 41127 82457158 83594144 2286776 1877262 47308 56037 40148900 42762057 2902552 2183406 45385536 46878762 X 112995 115210 0 0 36958627 36600172 37071622 36715382 82457158 83594144 X -283368 -72872 X X 0 1 X 0 0 0 1 X 53576 53576 996860 475716 521144 78488526 13918232 64570294 236565 236565 65381579 PATRONAGE CAPITAL - CFC 202512 C PATRONAGE CAPITAL - TEC 590760 C PATRONAGE CAPITAL - BEC 12017391 C PATRONAGE CAPITAL - NISC 115126 C PATRONAGE CAPITAL - CTTC 8943 C MEMBERSHIPS IN ASSOCIATED ORGANIZATIONS 2140 C CAPITAL TERM CERTIFICATES - CFC 437529 C 13374401 POST-RETIREMENT BENEFIT OBLIGATION 1313588 CUSTOMER DEPOSITS 375075 DEFERRED CREDITS - UNCLAIMED CAPITAL CREDITS 104021 DEFERRED CREDITS - OTHER 79299 ACCRUED OPERATING TAXES 311423 2183406 X 24626457 0 24626457 0 24626457 23341756 0 23341756 1568069 1568069 24909825 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. 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 ITS TAX POSITION WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE, OR OTHER STATE TAXING AUTHORITY AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ASSIGNABLE 1,568,069. PART IX: THE AMOUNT OF OTHER ASSETS ON FORM 990, PAGE 11, PART X, LINE 15 DOES NOT EQUAL OR EXCEED 5 PERCENT 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 STEVE YOUNG GENERAL MANAGER/CEO 154513 0 54 0 4955 0 55361 0 15853 0 230736 0 0 0 CODY LASATER ASST. GENERAL MANAGER 116541 0 2054 0 1033 0 16658 0 17332 0 153618 0 0 0 WILLIAM A PAFFORD LINE SUPERINTENDENT 98493 0 5054 0 5760 0 32417 0 8477 0 150201 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. STEVE YOUNG: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 50,637 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,724 TOTAL REPORTED IN COLUMN C $ 55,361 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (50,637) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 52,013 EXPENSE TO THE COOPERATIVE $ 56,737 CODY LASATER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 13,030 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,628 TOTAL REPORTED IN COLUMN C $ 16,658 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (13,030) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 32,723 EXPENSE TO THE COOPERATIVE $ 36,351 WILLIAM A PAFFORD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 29,462 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,955 TOTAL REPORTED IN COLUMN C $ 32,417 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (29,462) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 31,439 EXPENSE TO THE COOPERATIVE $ 34,394 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 BY DISTRICT. 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 ON AN ANNUAL BASIS, THE COOPERATIVE WILL REQUIRE THE BOARD OF DIRECTORS AND OFFICERS TO COMPLETE AND SIGN A CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM. DIRECTORS AND OFFICERS ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER/CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE BOARD OF DIRECTORS MAY ALSO CONSIDER THE CONSUMER PRICE INDEX WHEN DETERMING THE GENERAL MANAGER/CEO'S COMPENSATION. THE BOARD USES A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEE, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT TEXAS AND THE NATION. THE BOARD OF DIRECTORS MAY ALSO CONSIDER THE CONSUMER PRICE INDEX WHEN DETERMING OTHER OFFICERS' COMPENSATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE MAILS TO NEW MEMBERS A COPY OF ITS BYLAWS AND STATEMENT OF NON-DISCRIMINATION. THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENTS TO MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING. ADDITIONALLY, THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY OF 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, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH, LONG TERM DISABILITY, VISION AND LIFE INSURANCE TO ALL ELIGIBLE EMPLOYEES, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS 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 THE 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 RURAL UTILITIES SERVICES (RUS) UNIFORM SYSTEM OF ACCOUNTS (USOA) AS 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 $ 1,784,414 LESS: DIRECTORS FEES REPORTED ON FORM 1099-MISC (37,573) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (105,204) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 882,831 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING OR OTHER ACCOUNTS 392,388 TOTAL WAGES ACCRUED AND/OR PAID $ 2,916,856 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 680,357 OFFICE SUPPLIES 99,337 OUTSIDE SERVICES EMPLOYED 61,335 DIRECTOR'S FEES 37,936 ASSOCIATED DUES 41,253 MISCELLANEOUS GENERAL 232,203 UTLITY COMMISSION RELATED 39,035 MAINTENANCE OF GENERAL PLANT 21,295 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 1,212,751 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (9,888) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (37,573) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (438,798) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (226,182) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 500,310 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 1: 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. 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 ASSIGNABLE 1,568,069. PATRONAGE CAPITAL RETIRED -1,916,002. NET CHANGE IN MEMBERSHIPS 2,215. NET CHANGE IN OTHER EQUITIES 1,046. OTHER COMPREHENSIVE INCOME - PROVISION FOR POST-RETIREMENT HEALTH BENEFITS 271,800. 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.