2016-05-12T14:00:02-05:00 2015-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2015-01-01 730375825 NORTHWESTERN ELECTRIC COOPERATIVE INC NORT 5802567425 PO BOX 2707 WOODWARD OK 73802 TYSON LITTAU CEO 5802567425 2016-05-09 1 CELINDA J LEVERETT P01455941 8067473806 2016-05-09 2015 2016-09-27 15:27:22Z TYSON LITTAU PO BOX 2707 WOODWARD OK 73802 34483680 0 X WWW.NWECOK.COOP X 1940 OK TO PROVIDE ELECTRIC POWER TO RURAL AREAS AT COST ON A COOPERATIVE BASIS. 9 9 62 0 71855 -325 0 0 38899421 34217826 132511 109060 93016 95084 39124948 34421970 25043 27298 3132007 2228123 4099981 4497334 0 0 0 31867917 27669215 39124948 34421970 0 0 76866635 80803783 48578996 51278192 28287639 29525591 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 - 11,909 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 48 0 62 1 1 1 0 0 0 0 33423426 1265315 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 5.29 X X 21717 0 0 RAY SMITH VICE PRESIDENT 2.47 X X 18497 0 0 JOHN BRUCE JR SECRETARY-TREASURER 5.22 X X 22365 0 0 GILBERT PERKINS TRUSTEE 4.25 X 20757 0 0 LEE R HUCKABY TRUSTEE 2.50 X 5329 0 0 DUANE HENDERSON TRUSTEE 3.33 X 18315 0 0 CLAIR CRAIGHEAD TRUSTEE 3.60 X 18883 0 0 MARVIN WILKINSON TRUSTEE 3.10 X 27127 0 0 WAYNE HALL TRUSTEE 3.66 X 7082 0 0 TYSON LITTAU CEO 40.00 X 208048 0 95399 MONTY GOODMAN DIRECTOR OF PURCHASING & ENGINEERING 40.00 X 108256 0 119250 JOHN KIRKWOOD DIRECTOR OF SAFETY & OPERATIONS 40.00 X 106881 0 97941 BRENT MCDOWELL FOREMAN 50.00 X 104410 0 48400 JAMIE RUBLE DIRECTOR OF FINANCE & ADMINISTRATION 40.00 X 104301 0 47533 791968 0 408523 5 0 1 0 R&R POWERLINE CONSTRUCTION INC PO BOX 246 SAYRE OK 73662 CONSTRUCTION 917355 RIGGS TREE SERVICE PO BOX 453225 GROVE OK 74345 RIGHT OF WAY TREE TRIMMING 597648 JOE D HALL GENERAL CONTRACTORS LLC PO BOX 100 ELK CITY OK 73648 CONSTRUCTION 446572 SOUTHEASTERN DATA COOPERATIVE 100 ASHFORD CENTER NORTH STE 500 ATLANTA GA 30338 SOFTWARE, IT SERVICES & TRAINING 169170 4 X ELECTRIC ENERGY 221000 32605651 32605651 PATRONAGE DIVIDENDS 221000 1452318 1452318 SERVICE FEES 221000 92879 92879 DISTRIBUTION LINE LEASE 221000 64091 64091 OTHER PROGRAM REVENUE 221000 2887 2887 34217826 95547 95547 698 698 41202 27689 13513 13513 13513 46714 34021 12693 12693 BILLING REVENUE 561499 71855 71855 POLE ATTACHMENT INCOME 221000 9838 9838 81693 34421970 34230519 71855 119596 X 16298 11000 2228123 463519 2339444 498356 1007553 188462 1739305 2790037 PURCHASED POWER 19626816 DISTRIBUTION EXPENSE 1391346 ADMIN AND GENERAL 963153 OPERATING TAXES 754688 403870 34421970 X 2253657 2769140 3405290 2923367 489131 652908 1018068 1106248 1898986 1679299 85359773 26615876 55398940 58743897 12394253 12920614 8310 8310 76866635 80803783 2709659 2520784 44835926 47468111 1033411 1289297 48578996 51278192 X 0 0 2982454 3230999 25305185 26294592 28287639 29525591 76866635 80803783 X 0 1237952 X 0 1 X 0 0 242818 242818 1667582 908876 758706 82716560 25707000 57009560 732813 732813 58743897 PATRONAGE CAPITAL - WFEC 11596656 C PATRONAGE CAPITAL - CFC 87120 C PATRONAGE CAPITAL - AEC 161701 C PATRONAGE CAPITAL - SEDC 100159 C PATRONAGE CAPITAL - COBANK 243021 C MEMBERSHIPS & OTHER 67197 C CAPITAL TERM CERTIFICATES - CFC 664760 C 12920614 CONSUMER DEPOSITS 73275 PATRONAGE CAPITAL PAYABLE 56622 ACCUMULATED PROVISION FOR PENSIONS & BENEFITS 1112476 DEFERRED CREDITS - LINE EXTENSIONS 46924 1289297 X 34356324 0 34356324 65646 65646 34421970 32128201 0 32128201 2293769 2293769 34421970 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 65,646. Part XII, Line 4b - Other Adjustments: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 65,646. PATRONAGE CAPITAL ASSIGNABLE 2,228,123. 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 22 11000 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 203918 0 2220 0 1910 0 75138 0 20261 0 303447 0 0 0 MONTY GOODMAN DIRECTOR OF PURCHASING & ENGINEERING 104220 0 2345 0 1691 0 99756 0 19494 0 227506 0 0 0 JOHN KIRKWOOD DIRECTOR OF SAFETY & OPERATIONS 102842 0 2345 0 1694 0 78463 0 19478 0 204822 0 0 0 BRENT MCDOWELL FOREMAN 73732 0 2470 0 28208 0 29140 0 19260 0 152810 0 0 0 JAMIE RUBLE DIRECTOR OF FINANCE & ADMINISTRATION 101428 0 2220 0 653 0 28055 0 19478 0 151834 0 0 0 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 $ 70,946 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,192 TOTAL REPORTED IN COLUMN C 75,138 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (70,946) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 60,120 EXPENSE TO THE COOPERATIVE $ 64,312 MONTY GOODMAN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 97,573 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,183 TOTAL REPORTED IN COLUMN C 99,756 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (97,573) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 31,384 EXPENSE TO THE COOPERATIVE $ 33,567 JOHN KIRKWOOD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 76,315 EMPLOYER CONTRIBUTION TO 401(K)PLAN 2,148 TOTAL REPORTED IN COLUMN C 78,463 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (76,315) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 30,720 EXPENSE TO THE COOPERATIVE $ 32,868 BRENT MCDOWELL: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 27,555 EMPLOYER CONTRIBUTION TO 401(K) PLAN 1,585 TOTAL REPORTED IN COLUMN C 29,140 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (27,555) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 22,560 EXPENSE TO THE COOPERATIVE $ 24,145 JAMIE RUBLE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 25,908 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,147 TOTAL REPORTED IN COLUMN C 28,055 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (25,908) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN 30,846 EXPENSE TO THE COOPERATIVE $ 32,993 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 BY VOTING 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.AMENDMENTS TO THE ARTICLES OF INCORPORATION; AND 5.AMENDMENTS TO THE COOPERATIVE'S 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 11 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 OFFICER 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 $ 2,802,963 LESS TRUSTEES FEES REPORTED ON 1099-MISC (160,072) LESS EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (95,399) PLUS SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS 452 PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 867,464 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 369,161 TOTAL WAGES ACCRUED AND/OR PAID $3,784,569 Form 990, Part IX, Line 24 ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: OFFICE SUPPLIES AND EXPENSES $ 311,552 OUTSIDE SERVICES EMPLOYED 52,340 EMPLOYEE EXPENSE 138,406 TRUSTEES' EXPENSE 56,716 INJURIES AND DAMAGES 62,817 PROPERTY & GENERAL LIABILITY INSURANCE 92,016 DUES TO ASSOCIATED ORGANIZATIONS 102,680 ANNUAL AND DISTRICT MEETING EXPENSE 78,788 MISCELLANEOUS GENERAL EXPENSE 33,137 MAINTENANCE OF GENERAL PLANT 34,701 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $ 963,153 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. EXCESS OF OPERATING COSTS AND EXPENSES PROPERLY CHARGEABLE AGAINST SUCH SERVICES (I.E. MARGINS FROM THE PROVISION OF ELECTRIC ENERGY). 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 IX, Line 24E OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: CUSTOMER SERVICE $ 338,224 OTHER DEDUCTIONS 65,646 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 403,870 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 17 AND 25 THE COOPERATIVE PREVIOUSLY INCLUDED "ACCRUED PAYROLL AND COMPENSATED ABSENCES AND "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 IN ACCORDANCE WITH FORM 99O INSTRUCTIONS. TO INCREASE CONSISTENCY, THE AMOUNT OF $298,298 FOR "ACCRUED PAYROLL AND COMPENSATED ABSENCES AND $3,070 FOR "OTHER CURRENT ACCRUED LIABILITES" FOR THE 2014 CALENDAR YEAR HAVE BEEN RECLASSED FROM LINE 25 TO LINE 17. Form 990, Part XI, line 9: NET CHANGE IN MEMBERSHIPS -203,369. PATRONAGE CAPITAL ASSIGNABLE 2,228,123. PATRONAGE CAPITAL RETIRED - TOTAL -1,035,347. PATRONAGE CAPITAL RETIRED - DISCOUNT 22,680. UNCLAIMED PATRONAGE CAPITAL RETIREMENT CHECKS 225,865. Service 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.