2016-11-03T13:18:52-05:00 2015-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2015-01-01 880106922 MT WHEELER POWER INC MTWH 7752898981 PO BOX 151000 ELY NV 89315 RANDY EWELL GENERAL MANAGER/CEO 7752898981 2016-10-12 1 Matt R Willis P00419741 8067473806 2016-10-12 X 2015 2017-02-10 21:41:12Z RANDY EWELL PO BOX 151000 ELY NV 89315 34049009 0 X WWW.MWPOWER.NET X 1963 NV TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 9 9 37 0 194950 -4311 0 0 33362393 33555536 162392 151427 430317 312709 33955102 34019672 29319 17723 2308951 1681318 2984539 3072161 0 0 0 29009133 29625402 34331942 34396604 -376840 -376932 56795620 50520676 28022406 21108331 28773214 29412345 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 - 7,464 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 1 1 1 0 0 0 0 1 0 0 0 0 0 0 0 0 0 1 50 0 37 1 1 1 0 0 0 0 38228401 765326 0 X 9 9 1 0 1 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X RANDY EWELL 7752898981 1600 GREAT BASIN BLVD ELY NV 89301 X JERALD ANDERSON PRESIDENT 17.94 X X 18200 0 0 DON PHILLIPS VICE PRESIDENT 4.14 X X 8400 0 0 RON MILLER SECRETARY 4.35 X X 11600 0 0 SANDRA GREEN TREASURER 4.71 X X 10600 0 0 WILMA SANFORD DIRECTOR 2.85 X 10000 0 0 RICK HENDRIX DIRECTOR 4.65 X 10200 0 0 FRANK LEON DIRECTOR 1.58 X 8200 0 0 JERRY MORRILL DIRECTOR 1.91 X 8200 0 0 BOB SWETICH DIRECTOR 1.50 X 5200 0 0 RANDY EWELL GENERAL MANAGER/CEO 40.00 X 175647 0 50292 KEVIN ROBISON ASST GENERAL MANAGER 50.00 X 152202 0 46340 JESSE MURDOCK ENGINEERING MANAGER 40.00 X 126041 0 45786 BILL RICCI OPERATIONS MANAGER 40.00 X 117711 0 43403 PHILIP HECKETHORN FOREMAN/LINEMAN 45.00 X 102686 0 39326 JOSEPH PINTAR FOREMAN/LINEMAN 45.00 X 101984 0 42045 MICHAEL VENTURINO SUSTATION TECH 45.00 X 100128 0 36179 966999 0 303371 7 0 1 0 EPC SERVICES COMPANY 3521 GABEL ROAD BILLINGS MT 59102 PROJECT MANAGEMENT 4750905 CACHE VALLEY ELECTRIC PO BOX 405 LOGAN UT 84323 LINE CONSTRUCTION 314043 OSMOSE UTILITIES SERVICES INC 980 ELLICOTT STREET BUFFALO NY 14209 POLE TESTING 192395 COPENHAVER & MCCONNELL PC 950 IDAHO STREET ELKO NV 89801 LEGAL SERVICES 117126 RECK BROTHERS PO BOX 151372 ELY NM 89315 CONSTRUCTION 107515 5 X ELECTRICITY SALES 221000 33435266 33435266 PATRONAGE DIVIDENDS 221000 120270 115153 5117 33555536 151427 34087 117340 750 0 750 750 750 33686 29337 4349 4349 JOINT POLE RENTAL INCOME 221000 151864 151864 INTERNET SERVICE 519100 151449 151449 SECURITY SYSTEMS 561700 4297 4297 307610 34019672 33554768 194950 269954 X 9046 8677 1681318 515081 1588490 164028 660029 144533 896097 1953302 PURCHASED POWER 24079643 DISTRIBUTION EXPENSE 892792 ADMIN & GENERAL EXPENSE 613727 CUSTOMER EXPENSE 414054 775787 34396604 X 5798975 3736147 901112 555695 5419177 4297236 3347 1668 72042070 34589136 39877180 37452934 4620353 4297692 175476 179304 56795620 50520676 3952637 3298636 610209 665513 16617911 15286694 6841649 1857488 28022406 21108331 X 593774 655609 0 0 28179440 28756736 28773214 29412345 56795620 50520676 X -376932 1016063 X X 0 1 X 0 0 0 1 X 377801 377801 4775819 2223400 2552419 65476740 32365736 33111004 1411710 1411710 37452934 PATRONAGE CAPITAL - CFC 840553 C PATRONAGE CAPITAL - CRC 5990 C PATRONAGE CAPITAL - NISC 17612 C PATRONAGE CAPITAL - NRTC 89851 C PATRONAGE CAPITAL - FEDERATED 125213 C PATRONAGE CAPITAL - DESERET GENERATION & TRANSMISSION 2438201 C CAPITAL TERM CERTIFICATES - CFC 595143 C INVESTMENT IN MEMBERSHIPS 12000 C ENERGY CONSERVATION LOANS 73129 C MEMBER CAPITAL SECURITIES - CFC 100000 C 4297692 CONSUMER DEPOSITS 684546 DEFERRED CREDITS 1172942 1857488 X 33742083 0 33742083 277589 277589 34019672 32437697 0 32437697 1958907 1958907 34396604 Part IV, Line 2b: PURSUANT TO SECTION 81.507 OF THE NEVADA REVISED STATUTES CODE AND THE COOPERATIVE'S BYLAWS, THE COOPERATIVE CAN RETAIN ANY CAPITAL CREDIT OF A MEMBER, WHO IS RESIDENT OF NEVADA, WHICH REMAINED UNCLAIMED FOR A PERIOD OF ONE YEAR. THE COOPERATIVE HAS CHOSEN TO APPLY THESE UNCLAIMED PATRONAGE CAPITAL CREDITS TOWARDS GRANTS, SPONSORSHIPS AND DONATIONS TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA. UTAH MEMBER-RESIDENTS' UNCLAIMED CAPITAL CREDITS ARE ALSO HELD BY THE COOPERATIVE TO (A) ASSIST LOW-INCOME PERSONS TO PAY THEIR UTILITY BILLS, AND (B) TO PROVIDE SCHOLARSHIPS TO LOCAL GRADUATING HIGH SCHOOL SENIORS. IN THE STATE OF UTAH, PURSUANT TO UTAH'S UNIFORM AGRICULTURAL COOPERATIVE ASSOCIATION ACT (TITLE 3, CHAPTER 1, SECTION 11), THE COOPERATIVE CAN RETAIN CAPITAL CREDITS GIVEN TO ITS MEMBERS THAT REMAIN UNCLAIMED FOR A PERIOD OF THREE YEARS, BUT CAN ONLY APPLY THESE UNCLAIMED CAPITAL CREDITS TO UTILITY BILL ASSISTANCE OF LOW-INCOME PERSONS AND SCHOLARSHIPS FOR HIGH-SCHOOL SENIORS. Part X, Line 2: THE CORPORATION HAS ADOPTED THE "UNCERTAIN TAX POSITIONS" PROVISIONS OF ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA. THE PRIMARY TAX POSITION OF THE CORPORATION IS ITS FILING STATUS AS A TAX EXEMPT ENTITY. THE CORPORATION DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT ITS TAX POSITION WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE, 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 277,589. Part XII, Line 4b - Other Adjustments: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 277,589. PATRONAGE CAPITAL ASSIGNABLE 1,681,318. SCHEDULE D 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. SCHEDULE D 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 CHRISTMAS PRESENTS FOR LOCAL CHILDREN AND FAMILIES IN NEED, 41 FAMILIES SERVED INCLUDING 93 CHILDREN. 93 8677 SCHEDULE I, PART II 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, SPONSORSHIP AND/OR DONATION MADE DURING THE YEAR WAS BELOW THE REPORTING THRESHOLD OF PART II. X X X X 0 0 0 RANDY EWELL GENERAL MANAGER/CEO 166000 0 0 0 9647 0 21580 0 28712 0 225939 0 0 0 KEVIN ROBISON ASST GENERAL MANAGER 133250 0 13000 0 5952 0 17322 0 29018 0 198542 0 0 0 JESSE MURDOCK ENGINEERING MANAGER 113891 0 2450 0 9700 0 14806 0 30980 0 171827 0 0 0 BILL RICCI OPERATIONS MANAGER 113891 0 2500 0 1320 0 14806 0 28597 0 161114 0 0 0 KAYSIE EWELL KAYSIE IS A FAMILY MEMBER OF GENERAL MANAGER 29896 KAYSIE IS AN EMPLOYEE OF THE COOPERATIVE. 0 Form 990, Part VI, Section A, line 2 A BUSINESS RELATIONSHIP EXISTS BETWEEN JERALD ANDERSON, BOARD PRESIDENT, RICK HENDRIX, BOARD DIRECTOR, AND RANDY EWELL, GENERAL MANAGER. ALL THREE INDIVIDUALS SERVE ON THE BOARD OF DESERET GENERATION & TRANSMISSION AT THE REQUEST OF AND FOR THE BENEFIT OF THE COOPERATIVE. Form 990, Part VI, Section A, line 4 SECTION 11.05 OF THE BYLAWS WAS AMENDED TO ADDRESS HOW MEMBERS WILL GRANT EASEMENTS TO THE COOPERATIVE SO THAT THE COOPERATIVE MAY PROVIDE ELECTRIC SERVICE TO THE MEMBER OR OTHER MEMBERS. 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; 5. AMENDMENT 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. 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 11 MANAGEMENT PRESENTED A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION, REVIEW 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 DIRECTORS AND OFFICERS ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY. THE BOARD OF 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. THE CONFLICT OF INTEREST POLICY IS REVIEWED ON AN ANNUAL BASIS. WHEN A CONTRACT OR BUSINESS TRANSACTION IS UNDER CONSIDERATION AND A DIRECTOR OR EMPLOYEE KNOWS THAT HE, SHE, OR A CLOSE RELATIVE HAS A FINANCIAL INTEREST, THIS INTEREST IS REQUIRED TO BE DISCLOSED FULLY TO THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS SHALL DECIDE IF SUCH AN INTEREST SHOULD PREVENT THE COOPERATIVE FROM ENTERING INTO A PARTICULAR TRANSACTION OR CONTRACT. Form 990, Part VI, Section B, line 15 THE BOARD OF DIRECTORS COMPARE COMPENSATION FROM OTHER COOPERATIVE'S FORMS 990 AND LOOK AT OTHER EXTERNAL WRITTEN CONTRACTS OF SIMILARLY SITUATED GENERAL MANAGERS AND OFFICERS, WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. A COMPENSATION SURVEY IS ALSO EMPLOYED THAT SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN NEVADA AND THE NATION. THE BOARD AND THE GENERAL MANAGER USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICERS AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT NEVADA AND THE NATION. Form 990, Part VI, Section C, line 19 THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENT 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 SUBMITS A WRITTEN REQUEST, SUBJECT TO APPROVAL. 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. EMPLOYER CONTRIBUTIONS 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 EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES ARE COMPRISED OF THE TOTAL AMOUNTS CONTRIBUTED TO THE 401(K) PENSION PLAN AND THE INSURANCE PREMIUMS PAID FOR THEIR BENEFIT. 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 ALTHOUGH THE COOPERATIVE IS NO LONGER A BORROWER OF THE RURAL UTILITIES SERVICE (RUS), THE ACCOUNTING RECORDS ARE MAINTAINED IN ACCORDANCE WITH THE UNIFORM SYSTEM OF ACCOUNTS AS PRESCRIBED FOR ELECTRIC BORROWERS OF THE RUS. THE UNIFORM SYSTEM OF ACCOUNTING 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 AMOUNTS REPORTED ON LINES 5-7 TO TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 2,103,571 LESS DIRECTORS FEES REPORTED ON 1099-MISC (90,600) LESS EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (96,632) PLUS SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGIN 31,866 PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 588,829 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 538,515 TOTAL WAGES ACCRUED AND/OR PAID $ 3,075,549 Form 990, Part IX, Line 24 ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: OUTSIDE SERVICES EMPLOYED $ 115,560 INSURANCE 103,464 MAINTENANCE OF GENERAL PLANT 302,584 REGULATORY COMMISSION EXPENSE 1,001 MISCELLANEOUS GENERAL EXPENSE 91,118 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $ 613,727 Form 990, Part IX, Line 24e OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: BBQ EXPENSE $ 855 INTERNET EXPENSE 163,104 SECURITY SYSTEM EXPENSE 2,070 SALES EXPENSE 58,627 TAX EXPENSE - OTHER 493,481 TRANSMISSION EXPENSE 57,650 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 775,787 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 2015 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 X, Lines 17 and 25 THE COOPERATIVE PREVIOUSLY INCLUDED ACCRUED EXPENSES COMPRISED OF (1) ACCRUED OTHER COMPENSATED ABSENCES AND (2) OTHER CURRENT ACCRUED LIABILITES AS COMPONENTS OF OTHER LIABILITIES ON LINE 25 OF PART X. HOWEVER, FOR THE 2015 CALENDAR YEAR, THE COOPERATIVE BEGAN REPORTING THESE AMOUNTS ON LINE 17. TO INCREASE CONSISTENCY, ACCRUED EXPENSES IN THE AMOUNT OF $753,610 FOR THE 2014 CALENDAR YEAR HAVE BEEN RECLASSED FROM LINE 25 TO LINE 17. Form 990, Part XI, line 9: NET CHANGE IN MEMBERSHIPS & OTHER EQUITY 61,835. PATRONAGE CAPITAL ASSIGNABLE 1,681,318. PATRONAGE CAPITAL RETIRED -727,090. 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.