2017-05-12T11:06:53-05:00 2016-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2016-01-01 730375825 NORTHWESTERN ELECTRIC COOPERATIVE INC NORT 5802567425 PO BOX 2707 WOODWARD OK 73802 TYSON LITTAU CEO 5802567425 2017-05-11 1 William M Miller P00439459 8067473806 2017-05-11 X 65.182.80.152 2017-05-11 22:40:57 CD P 98E5BFD407E458CB66AD4DE82C963311B75E62FD F0386CC26C6342DC84D81AE4EA5654BB7B3BC3F2 2016 2021-01-29 14:40:06Z TYSON LITTAU PO BOX 2707 WOODWARD OK 73802 33690913 0 X WWW.NWECOK.COOP X 1940 OK TO PROVIDE ELECTRIC POWER TO RURAL AREAS AT COST ON A COOPERATIVE BASIS. 9 9 61 0 77457 -619 0 0 34217826 33342854 109060 119914 95084 100179 34421970 33562947 27298 24637 2228123 1849586 4497334 4880481 0 0 0 27669215 26808243 34421970 33562947 0 0 80803783 86390600 51278192 55995349 29525591 30395251 THE COOPERATIVE'S RESPONSIBILITY AND AIM IS TO PROVIDE EXCELLENT AND INNOVATIVE CUSTOMER SERVICE AS REFLECTED IN TOP QUALITY ELECTRIC SERVICE RELIABILITY, AFFORDABLE RATES, EMPLOYEE TEAMWORK AND THE HIGHEST DEGREE OF INTEGRITY IN ALL COOPERATIVE ENDEAVORS. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 11,886 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 0 0 1 0 1 0 1 1 1 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 47 0 61 1 1 1 0 0 0 0 32611748 768669 0 X 9 9 1 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 OK X TYSON LITTAU 5802567425 2925 WILLIAMS AVENUE WOODWARD OK 73801 X KENNETH KNOWLES PRESIDENT 6.60 X X 24673 0 0 RAY SMITH VICE PRESIDENT 2.50 X X 18621 0 0 JOHN BRUCE JR SECRETARY-TREASURER 5.50 X X 24112 0 0 GILBERT PERKINS TRUSTEE 5.40 X 24472 0 0 LEE R HUCKABY TRUSTEE 3.20 X 5700 0 0 DUANE HENDERSON TRUSTEE 3.30 X 19162 0 0 CLAIR CRAIGHEAD TRUSTEE 5.00 X 22084 0 0 MARVIN WILKINSON TRUSTEE 3.20 X 26631 0 0 WAYNE HALL TRUSTEE 3.40 X 7109 0 0 TYSON LITTAU CEO 40.00 X 212273 0 106329 MONTY GOODMAN RETIRED 3116 DIR. OF PURCHASING & ENGINEERING 40.00 X 134745 0 4933 JOHN KIRKWOOD DIR. OF SAFETY & OPERATIONS 40.00 X 107852 0 110085 BRENT MCDOWELL FOREMAN 47.50 X 105335 0 54725 JAMIE RUBLE DIR. OF FINANCE & ADMINISTRATION 40.00 X 103988 0 51644 CLINTON LEFORCE LINE FOREMAN 49.20 X 101556 0 36743 938313 0 364459 6 0 1 0 JOE D HALL GENERAL CONTRACTORS LLC PO BOX 100 ELK CITY OK 73648 CONSTRUCTION 1505119 R&R POWERLINE CONSTRUCTION INC PO BOX 246 SAYRE OK 73662 CONSTRUCTION 1149162 RIGGS TREE SERVICE PO BOX 453225 GROVE OK 74345 RIGHT OF WAY TREE TRIMMING 614602 SOUTHEASTERN DATA COOPERATIVE 100 ASHFORD CENTER NORTH STE 500 ATLANTA GA 30338 SOFTWARE, IT SERVICES & TRAINING 198616 NORLEM TECHNOLOGY CONSULTING INC 10830 E 45 ST SOUTH TULSA OK 74146 IT CONSULTING & SERVICES 174987 6 X SALES OF ELECTRICITY 221000 32076130 32076130 PATRONAGE DIVIDENDS 221000 1105663 1105663 SERVICE FEES 221000 85494 85494 DISTRIBUTION LINE LEASE 221000 71727 71727 OTHER PROGRAM REVENUE 221000 3840 3840 33342854 72031 72031 124 124 127013 79130 47883 47883 47883 61596 48836 12760 12760 BILLING REVENUE 561499 77457 77457 POLE ATTACHMENT INCOME 221000 9838 9838 87295 33562947 33355614 77457 129876 X 15887 8750 1849586 491166 2744112 605957 828044 211202 1817886 3015227 PURCHASED POWER 18757556 DISTRIBUTION EXPENSE 1138235 ADMIN AND GENERAL 916976 OPERATING TAXES 721771 440592 33562947 X 2769140 1680576 2122895 2584744 652908 636085 1106248 789452 1683038 1963374 92398999 28116122 58743897 64282877 12920614 13605666 805043 847826 80803783 86390600 2520784 2310697 47468111 51899913 1289297 1784739 51278192 55995349 X 0 0 3230999 3379582 26294592 27015669 29525591 30395251 80803783 86390600 X 0 869660 X 0 1 X 0 0 242882 242882 6704084 1487162 5216922 85235613 26628960 58606653 216420 216420 64282877 PATRONAGE CAPITAL - WFEC 12214701 C PATRONAGE CAPITAL - CFC 102462 C PATRONAGE CAPITAL - AEC 161701 C PATRONAGE CAPITAL - SEDC 100827 C PATRONAGE CAPITAL - COBANK 272545 C MEMBERSHIPS & OTHER 88670 C CAPITAL TERM CERTIFICATES - CFC 664760 C 13605666 CONSUMER DEPOSITS 77135 ACCUMULATED PROVISION FOR PENSIONS & BENEFITS 1601895 DEFERRED CREDITS - LINE EXTENSIONS 105709 1784739 X 33491294 0 33491294 71653 71653 33562947 31641708 0 31641708 1921239 1921239 33562947 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 XI, Line 4b - Other Adjustments: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 71,653. Part XII, Line 4b - Other Adjustments: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 71,653. PATRONAGE CAPITAL ASSIGNABLE 1,849,586. SCHEDULE D 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. SCHEDULE D PART XII, LINE 4B FOR THE AUDITED FINANCIAL STATEMENTS, THE AMOUNT OF PATRONAGE CAPITAL ASSIGNABLE (HEREINAFTER REFERRED TO AS 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. 1 FANNING-FUSSELL COLLEGE SCHOLARSHIPS PAID DIRECTLY TO EDUCATIONAL INSTITUTION ON BEHALF OF RECIPIENT 15 8750 Part I, Line 2: THE COOPERATIVE USES A SCHOLARSHIP APPLICATION BASED ON GRADES, LETTERS OF RECOMMENDATIONS AND AN ESSAY. A SEPARATE SELECTION COMMITTEE REVIEWS THE APPLICATIONS AND SELECTS THE RECIPIENTS PURSUANT TO THE REQUIREMENTS IN THE APPLICATION. X X 1 1 X X 0 0 0 TYSON LITTAU CEO 204141 0 2050 0 6082 0 80067 0 26262 0 318602 0 0 0 JOHN KIRKWOOD DIR. OF SAFETY & OPERATIONS 104077 0 2020 0 1755 0 90485 0 19600 0 217937 0 0 0 BRENT MCDOWELL FOREMAN 100097 0 2340 0 2898 0 35339 0 19386 0 160060 0 0 0 JAMIE RUBLE DIR. OF FINANCE & ADMINISTRATION 101408 0 1900 0 680 0 32060 0 19584 0 155632 0 0 0 Part I, Line 1a PURSUANT TO APPLICABLE TRAVEL POLICIES, THE COOPERATIVE WILL PAY FOR REGISTRATION FEES, TRAVEL, AND MEALS INCURRED BY THE TRUSTEES AND/OR EMPLOYEES' SPOUSE WHILE ATTENDING OFFICIAL MEETINGS OR ON OFFICIAL AND AUTHORIZED TRAVEL FOR THE COOPERATIVE. THE CURRENT POLICY STATES THAT DIRECTOR AND SPOUSE TRAVEL WILL ONLY BE REIMBURSED FOR ONE NATIONAL MEETING PER YEAR. ONE INDIVIDUAL REPORTED ON FORM 990, PART VII (LITTAU) RECEIVED THIS BENEFIT DURING THE YEAR. PURSUANT TO THE EMPLOYEE WELLNESS PROGRAM, THE COOPERATIVE SHARES THE COST OF HEALTH CLUB DUES WITH EMPLOYEES OF THE COOPERATIVE. FORM 990, SCHEDULE J, 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. TYSON LITTAU: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 75,867 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,200 TOTAL REPORTED IN COLUMN C 80,067 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (75,867) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 63,105 EXPENSE TO THE COOPERATIVE $ 67,305 JOHN KIRKWOOD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 88,296 EMPLOYER CONTRIBUTION TO 401(K)PLAN 2,189 TOTAL REPORTED IN COLUMN C 90,485 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (88,296) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 43,164 EXPENSE TO THE COOPERATIVE $ 45,353 BRENT MCDOWELL: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 33,692 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,647 TOTAL REPORTED IN COLUMN C 35,339 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (33,692) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 32,495 EXPENSE TO THE COOPERATIVE $ 34,142 JAMIE RUBLE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 29,909 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,151 TOTAL REPORTED IN COLUMN C 32,060 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (29,909) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 42,376 EXPENSE TO THE COOPERATIVE $ 44,527 Form 990, Part VI, Section A, line 2 TYSON LITTAU (CEO) AND RAY SMITH (VICE PRESIDENT) BOTH SERVED ON THE BOARD OF WESTERN FARMERS ELECTRIC COOPERATIVE 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 TRUSTEES. 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.AMENDMENTS TO THE ARTICLES OF INCORPORATION; AND 5.AMENDMENTS TO THE BYLAWS. Form 990, Part VI, Section A, line 8b FROM TIME TO TIME THE ENTIRE BOARD WILL GO INTO EXECUTIVE SESSION FOR DISCUSSING ITEMS OF A SENSITIVE AND CONFIDENTIAL NATURE. WHEN THIS OCCURS MANAGEMENT AND OTHERS IN ATTENDANCE ARE REMOVED FROM THE MEETING ROOM. ITEMS DISCUSSED IN EXECUTIVE SESSION ARE NOT DOCUMENTED. HOWEVER, ACTIONS TAKEN BY THE BOARD AFTER EXECUTIVE SESSIONS ARE ADJOURNED ARE FULLY DOCUMENTED IN THE WRITTEN MINUTES. Form 990, Part VI, Section B, line 11b MANAGEMENT PRESENTED A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION AND APPROVAL 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 THE BOARD OF TRUSTEES AND OFFICERS ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY. THE BOARD OF TRUSTEES AND OFFICERS ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF TRUSTEES AS SOON AS POSSIBLE. THE CONFLICT OF INTEREST POLICY IS REVIEWED AND REDISTRIBUTED TO EACH EMPLOYEE, OFFICER AND DIRECTOR AT LEAST ONCE EVERY OTHER YEAR. Form 990, Part VI, Section B, line 15 THE BOARD OF TRUSTEES USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR CEOS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN OKLAHOMA AND THE NATION. THE CEO, BOARD OF TRUSTEES, AND AN INDEPENDENT COMPENSATION CONSULTANT USE A COMPENSATION SURVEY 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 OKLAHOMA AND THE NATION. Form 990, Part VI, Section C, line 19 THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF ITS GOVERNING DOCUMENTS, EXTERNAL POLICIES, AND AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. ANNUALLY THE COOPERATIVE PROVIDES THE YEAR END BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE WITH THE ANNUAL MEETING NOTICE AND ANNUAL REPORT. ADDITIONALLY AN OPERATING REPORT, WHICH SUMMARIZES VARIOUS FINANCIAL STATISTICS, IS PUBLISHED IN AND DISTRIBUTED TO THE MEMBERS VIA MONTHLY NEWSLETTER. THE COOPERATIVE'S BYLAWS ARE ALSO MADE AVAILABLE ON THE COOPERATIVE'S WEBSITE. 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 AND LIFE INSURANCE TO ALL ELIGIBLE EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICER 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 BENEFIT 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 THE BOARD OF TRUSTEES CONSIDERS THE CEO TO BE BOTH THE TOP MANAGEMENT OFFICIAL AND THE TOP FINANCIAL OFFICIAL. THEREFORE, ONLY THE CEO IS LISTED AS AN EMPLOYEE OFFICER. 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 ORGANIZATION 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 AS PRESCRIBED RUS ELECTRIC BORROWERS. THE UNIFORM SYSTEM OF ACCOUNTS 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 UNIFORM SYSTEM OF ACCOUNTS. 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 THE AMOUNTS REPORTED ON LINES 5-7 TO TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 3,235,278 LESS TRUSTEES FEES REPORTED ON 1099-MISC (172,564) LESS EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (106,329) PLUS SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS 777 PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 840,754 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 96,484 TOTAL WAGES ACCRUED AND/OR PAID $3,894,400 Form 990, Part IX, Line 24 ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: OFFICE SUPPLIES AND EXPENSES $ 303,993 OUTSIDE SERVICES EMPLOYED 69,085 EMPLOYEE EXPENSE 93,030 TRUSTEES' EXPENSE 54,893 INJURIES AND DAMAGES 49,424 PROPERTY & GENERAL LIABILITY INSURANCE 92,765 DUES TO ASSOCIATED ORGANIZATIONS 97,179 ANNUAL AND DISTRICT MEETING EXPENSE 74,240 MISCELLANEOUS GENERAL EXPENSE 62,016 MAINTENANCE OF GENERAL PLANT 20,351 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $ 916,976 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 2016 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. ALL DONATIONS ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. EACH GRANT, SCHOLARSHIP AND/OR DONATION MADE DURING THE YEAR WAS BELOW THE REPORTING THRESHOLD OF SCHEDULE I, PART II. FORM 990, PART X, LINES 4 & 25 THE COOPERATIVE PREVIOUSLY INCLUDED ACCRUED REVENUE AS A COMPONENT OF ACCOUNTS RECEIVABLE ON LINE 4 OF PART X. HOWEVER, FOR THE 2016 CALENDAR YEAR, THE COOPERATIVE BEGAN REPORTING THIS AMOUNT ON LINE 15. TO INCREASE CONSISTENCY, ACCRUED REVENUE IN THE AMOUNT OF $796,733 FOR THE 2015 CALENDAR YEAR HAS BEEN RECLASSED FROM LINE 4 TO LINE 15. Form 990, Part XI, line 9: NET CHANGE IN POST-RETIREMENT BENEFIT -484,873. PATRONAGE CAPITAL ASSIGNABLE 1,849,586. PATRONAGE CAPITAL RETIRED - TOTAL -643,636. PATRONAGE CAPITAL RETIRED - DISCOUNT 25,304. UNCLAIMED PATRONAGE CAPITAL RETIREMENT CHECKS 123,279. 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.