2015-11-04T08:11:41-06:00 2014-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2014-01-01 840185658 DELTA MONTROSE ELECTRIC ASSOCIATION DELT 9702494572 PO BOX 910 MONTROSE CO 81402 JASEN BRONEC CEO 9702494572 2015-10-07 1 William M Miller P00439459 8067473806 2015-10-07 X 2014 2016-03-07 17:11:31Z JASEN BRONEC PO BOX 910 MONTROSE CO 81402 67981078 0 X WWW.DMEA.COM X 1938 CO WE ENERGIZE AND SERVE OUR COMMUNITIES. 9 9 102 0 437052 0 0 0 68478512 67016811 -103172 337402 557242 610772 68932582 67964985 2065 500 268384 972450 6752112 6905849 0 0 0 58315848 57299228 65338409 65178027 3594173 2786958 181487328 180408440 87631927 84795181 93855401 95613259 X WE ENERGIZE AND SERVE OUR COMMUNITIES BY ENSURING THE SAFETY OF OUR MEMBERS AND EMPLOYEES; PROVIDING MEMBERS WITH COMPETITIVE RATES, BALANCED WITH QUALITY SERVICE AND RELIABILITY; MAXIMIZING EFFICIENCIES, OPERATIONALLY AND THROUGH ENERGY EFFICIENCY AND CONSERVATION; PROMOTING LOCAL ECONOMIC DEVELOPMENT; AND BEING NIMBLE AS WE INVESTIGATE AND PURSUE ENERGY OPTIONS. 0 0 SALE OF ELECTRIC POWER TO MEMBERS - 32,424 ACTIVE SERVICES WERE PROVIDED POWER AT YEAR END AT COST 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 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 1 91 0 102 1 1 1 0 0 0 0 66451945 3297683 0 X 9 9 0 1 1 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 X X COREY THURLOW MANAGER OF FINANCE & ACCOUNTING 9702494572 11925 6300 ROAD MONTROSE CO 81402 X OLEN LUND PRESIDENT 8.10 X X 16675 0 0 BRENT HINES VICE PRESIDENT 4.50 X X 12500 0 0 JOHN GAVAN JUNE - DEC SECRETARY/TREASURER 5.60 X X 9625 0 0 TONY PRENDERGAST ASST. SECRETARY/TREASURER 4.80 X X 13375 0 0 TERRY BROWN DIRECTOR 5.90 X 12775 0 0 MARSHALL COLLINS DIRECTOR 6.40 X 13000 0 0 MARK ECKHART JUNE - DEC DIRECTOR 6.00 X 7150 0 0 JIM ELDER DIRECTOR 13.60 X 15900 0 0 NANCY HOVDE JAN - DEC DIRECTOR (JANUARY - JUNE 2014) 24.60 X 8025 0 0 WILLIAM PATTERSON DIRECTOR 11.80 X 15300 0 0 JASEN BRONEC MAY - DEC CEO 40.00 X 105235 0 28476 COREY THURLOW MANAGER OF FINANCE & ACCOUNTING 40.00 X 106723 0 10877 STEVEN METHENY CHIEF OPERATIONS MANAGER 40.00 X 154687 0 51490 KENT DAVENPORT ENGINEERING MANAGER 40.00 X 135397 0 65679 DOUGLAS COX OPERATIONS MANAGER 40.00 X 125907 0 65994 ROBERT CLARK IT MANAGER 40.00 X 124160 0 68447 IVOR AYERS LINE FOREMAN 40.00 X 114896 0 27862 DON MARKER JAN - APR INTERIM CEO (MANAGEMENT CO) 40.00 X 0 0 0 991330 0 318825 7 0 1 0 ASPLUNDH TREE EXPERT CO 1700 SOLUTIONS CENTER CHICAGO IL 606771007 TREE TRIMMING 509140 APEIRON UTILITY CONSTRUCTION LLC 633 34 ROAD CLIFTON CO 81520 LINE CONSTRUCTION BORES 118897 HOLLAND & HART ATTORNEYS PO BOX 17283 DENVER CO 802170283 LEGAL 116259 ELWOOD STAFFING PO BOX 27008 SALT LAKE CITY UT 841270008 ENGINEERING 113897 SBS INSPECTIONS INC 404 N 4TH STREET OLATHE CO 81425 POLE INSPECTION & FORTIFICATION 106500 6 X ELECTRIC ENERGY 221000 62805347 62805347 PATRONAGE DIVIDENDS 221000 2652082 2652082 SERVICE FEES 221000 1181389 1181389 RENEWABLE ENERGY CREDITS 221000 290843 290843 ELECTRIC WHEELING 221000 46166 46166 40984 40984 67016811 317883 317883 126796 0 126796 126796 126796 35612 16093 19519 19519 19519 DISPATCHING REVENUE 517000 437052 437052 SALES TAX DISCOUNTS 221000 46924 46924 483976 67964985 67063735 437052 464198 X 500 972450 581813 4196422 608361 1169188 350065 2767473 5526684 PURCHASED POWER 42012678 DISTRIBUTION EXPENSES 2508316 ADMIN AND GENERAL 2353042 CUSTOMER ACCOUNTS 902922 1228113 65178027 X 1797652 1563389 7108232 7091420 5017420 4246755 287567 243324 2713070 2490541 96606 460268 173296693 64344213 110018594 108952480 48237100 49396724 6211087 5963539 181487328 180408440 5021485 5211485 594513 468496 76816051 71942787 5199878 7172413 87631927 84795181 X 0 0 0 0 93855401 95613259 93855401 95613259 181487328 180408440 X 2786958 -1029100 X X 0 1 X 1 0 0 1 X 1889111 1889111 10530863 1396134 9134729 157855319 62948079 94907240 3021400 3021400 108952480 CAPITAL TERM CERTIFICATES 1634990 C PATRONAGE CAPITAL - CFC 393655 C PATRONAGE CAPITAL - FEDERATED INSURANCE 201428 C PATRONAGE CAPITAL - NISC 147720 C PATRONAGE CAPITAL - TSG&T 45727457 C PATRONAGE CAPITAL - WUESC 965726 C PATRONAGE CAPITAL - OTHER 1841 C MEMBERSHIPS - ASSOCIATED CO-OPS 1000 C INVESTMENT IN SUBSIDIARY COMPANY 322907 C 49396724 CONSUMER ADVANCES FOR CONSTRUCTION 316599 CUSTOMER ENERGY PRE-PAYMENTS 218261 UNCLAIMED CAPITAL CREDITS 1076549 OTHER ACCRUED LIABILITIES 136013 ACCUMULATED PROVISION FOR SICK LEAVE 351486 ACCRUED TAXES 957322 ACCRUED INTEREST PAYABLE 94941 ACCRUED PAYROLL AND COMPENSATED ABSENCES 1084343 REGULATORY LIABILITIES 2500000 DELTA ACQUISITION PREPAID REVENUE 436899 7172413 X Part IV, Line 2b: PURSUANT TO THE BYLAWS OF THE COOPERATIVE, A PATRON IS DEEMED TO HAVE CONTRIBUTED HIS/HER/ITS PATRONAGE CAPITAL RETIREMENT IF THE RESPECTIVE CHECK OR OTHER FORM OF PAYMENT HAS BEEN UNCLAIMED FOR A PERIOD OF FIVE YEARS AND SIX MONTHS AND FOR WHICH PROPER NOTIFICATION TO THE PATRON HAS BEEN MADE. SUCH UNCLAIMED PATRONAGE CAPITAL RETIREMENTS ARE USED TO ESTABLISH A FUND FOR EDUCATIONAL, CHARITABLE, ALTERNATIVE OR ENERGY PURPOSES AND FOR OTHER ACTIVITIES APPROVED BY THE BOARD OF DIRECTORS THAT WILL BENEFIT THE COOPERATIVE'S SERVICE TERRITORY. THE APPLICABLE BOARD POLICY PROVIDES SPECIFIC GUIDANCE REGARDING THE ELIGIBLE GRANTS AND SCHOLARSHIPS. 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, AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. 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. X 1 1 X X 0 0 0 STEVEN METHENY CHIEF OPERATIONS MANAGER 143123 0 2500 0 9064 0 31586 0 19904 0 206177 0 0 0 KENT DAVENPORT ENGINEERING MANAGER 131072 0 0 0 4325 0 39726 0 25953 0 201076 0 0 0 DOUGLAS COX OPERATIONS MANAGER 121633 0 0 0 4274 0 44152 0 21842 0 191901 0 0 0 ROBERT CLARK IT MANAGER 112573 0 0 0 11587 0 43043 0 25404 0 192607 0 0 0 PART II, COLUMN C INCLUDED IN THE AMOUNT IS THE 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 THE PLAN. THE CHANGE IN ACTUARIAL VALUE FOR EACH PARTICIPANT, HOWEVER, VARIES WITH AGE. 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 CONTRIBUTION TO THE PLAN IN LIEU OF THE ACTUARIAL INCREASE ARE EXPENSED IN THE FINANCIAL STATEMENTS. BREAKDOWN OF DEFERRED COMPENSATION REPORTED ON PART II, COLUMN (C): STEVEN METHENY: TOTAL REPORTED IN COLUMN C $ 31,586 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (31,586) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN: 25,003 EXPENSE TO THE COOPERATIVE: $ 25,003 KENT DAVENPORT: TOTAL REPORTED IN COLUMN C $ 39,726 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (39,726) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN: 22,184 EXPENSE TO THE COOPERATIVE: $ 22,184 DOUGLAS COX: TOTAL REPORTED IN COLUMN C $ 44,152 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (44,152) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN: 20,477 EXPENSE TO THE COOPERATIVE: $ 20,477 ROBERT CLARK: TOTAL REPORTED IN COLUMN C $ 43,043 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (43,043) ADD: CASH CONTRIBUTED TO DEFINED BENEFIT PLAN: 21,218 EXPENSE TO THE COOPERATIVE: $ 21,218 FORM 990, PART I, LINE 5 THE NUMBER OF EMPLOYEES REPORTED ON LINE 5 REPRESENTS THE NUMBER OF W-2'S ISSUED BY THE COOPERATIVE AND NOT NECESSARILY THE NUMBER OF EMPLOYEES NORMALLY EMPLOYED BY THE COOPERATIVE AND REPORTED TO RUS. Form 990, Part VI, Section A, line 3 THE COOPERATIVE EMPLOYED DON MARKER THROUGH LEWIS & CLARK SERVICES LLC TO PROVIDE MANAGEMENT SERVICES AS THE ACTING AND INTERIM CEO UNTIL A NEW CEO COULD BE HIRED. THE COOPERATIVE PAID A TOTAL OF $87,150 FOR SUCH SERVICES RENDERED FROM JANUARY 2014 THROUGH APRIL 2014. A NEW, FULL TIME CEO WAS HIRED IN APRIL AND STARTED IN MAY 2014. Form 990, Part VI, Section A, line 4 THE BYLAWS WERE AMENDED SO THAT ATRICLE XIII "CHANGES TO BYLAWS" NOW PROVIDES THAT AMENDMENTS MAY BE MADE BASED ON A SIMPLE MAJORITY OF THE FULL BOARD OF DIRECTORS. 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 TO ELECT 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. THE DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS; 2. THE DISSOLUTION/LIQUIDATION OF THE COOPERATIVE; 3. THE MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION; AND 4. AMENDMENTS TO THE ARTICLES OF INCORPORATION. 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 CONDUCTS AN ANNUAL REVIEW OF THE CONFLICT OF INTEREST POLICY, AND OBTAINS THE SIGNATURE OF EACH BOARD MEMBER ACKNOWLEDGING THE REVIEW OF THE POLICY. Form 990, Part VI, Section B, line 15 THE BOARD OF DIRECTORS USES A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR CEOS FROM COOPERATIVES LOCATED IN COLORADO AND THE NATION. THE MANAGEMENT COMPENSATION PLAN IS APPROVED BY THE BOARD OF DIRECTORS. THE BOARD AND THE CEO USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE ORGANIZATION'S OTHER OFFICERS. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT COLORADO AND THE NATION. Form 990, Part VI, Section C, line 19 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. THIS IS DONE IN COMPLIANCE WITH BOARD POLICY 10, SECTIONS 1-4. ANNUALLY THE COOPERATIVE PROVIDES A COPY OF THE AUDITED BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE WITH THE ANNUAL REPORT. FINALLY, THE COOPERATIVE'S BYLAWS AND FINANCIAL STATEMENTS CAN BE FOUND ON THEIR WEBSITE, WWW.DMEA.COM. Form 990, Part VII, Column F IN ORDER TO PROVIDE RETIREMENT BENEFITS TO ITS EMPLOYEES, 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 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, INCLUDING OFFICERS, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN AND THE INSURANCE PREMIUMS PAID FOR THE BENEFIT OF THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES. Form 990, Part VIII, Line 2B 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 UNIFORM SYSTEM OF ACCOUNTS AS PRESCRIBED BY THE FEDERAL ENERGY REGULATORY COMMISSION FOR CLASS A AND B ELECTRIC UTILITIES. THE UNIFORM SYSTEM OF ACCOUNTING DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1 - 23. THE COOPERATIVE SEPARATELY STATES 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 $ 4,778,235 LESS DIRECTORS FEES REPORTED ON 1099-MISC (124,325) LESS EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (90,843) PLUS SALARIES & WAGES ALLOCATED TO NONOPERATING MARGINS 27,302 PLUS SALARIES & WAGES CAPITALIZED DIRECTLY TO PLANT 1,292,661 PLUS SALARIES & WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 1,792,906 TOTAL WAGES ACCRUED AND/OR PAID $ 7,675,936 FORM 990, PART IX, LINE 24 THE FOLLOWING IS A BREAKDOWN OF THE EXPENSES REPORTED AS ADMINISTRATIVE AND GENERAL EXPENSE ON FORM 990, PART IX, LINE 24 INSURANCE $ 84,164 INJURIES AND DAMAGES 10,417 OUTSIDE SERVICES 207,098 SUPPLIES 137,960 INFORMATION TECHNOLOGY 889,024 ADVERTISING 21,129 ANNUAL MEETING EXPENSE 32,331 MAINTENANCE OF GENERAL PLANT 280,368 MISCELLANEOUS GENERAL AND ADMINISTRATIVE 690,551 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $ 2,353,042 FORM 990, PART IX, LINE 24(E) THE FOLLOWING IS A BREAKDOWN OF EXPENSES REPORTED AS OTHER EXPENSES ON FORM 990, PART IX, LINE 24(E): TAXES $ 259 ECONOMIC DEVELOPMENT 10,000 CAR HITS POLE, MISC JOBS/CONTRACT 10,504 ABANDONMENT LOSS 28,987 SALES EXPENSE 37,639 MISCELLANEOUS - DISPATCHING AND OTHER EXPENSE 433,331 GEOTHERMAL, HYDRO AND TRANSMISSION EXPENSES 707,393 TOTAL OTHER EXPENSES $ 1,228,113 FORM 990, PART IX, LINE 4 THE FORM 990 INSTRUCTIONS REQUIRE THAT THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE MEMBERS 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 MEMBERS. THE COOPERATIVE'S TAX EXEMPT PURPOSE IS TO PROVIDE ELECTRICITY TO ITS MEMBERS 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 MEMBERS. 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 MEMBERS, 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 AND IS SUMMARIZED AS FOLLOWS: (A) IN ORDER TO INDUCE PATRONAGE AND TO ASSURE THAT THE COOPERATIVE WILL OPERATE ON A NONPROFIT BASIS, THE COOPERATIVE IS OBLIGATED TO ACCOUNT ON A PATRONAGE BASIS TO ALL ITS MEMBERS FOR ALL AMOUNTS RECEIVED AND RECEIVABLE FROM THE FURNISHING OF ELECTRIC ENERGY IN EXCESS OF OPERATING COSTS AND EXPENSES PROPERLY CHARGEABLE AGAINST SUCH SERVICES (I.E. MARGINS FROM THE PROVISION OF ELECTRIC ENERGY). (B) THE MARGINS FROM THE PROVISION OF ELECTRIC ENERGY ARE RECEIVED WITH THE UNDERSTANDING THAT THEY ARE FURNISHED BY THE MEMBERS AS CAPITAL. (C) THE COOPERATIVE IS OBLIGATED TO PAY BY CREDITS TO A CAPITAL ACCOUNT FOR EACH MEMBER FOR ALL SUCH MARGINS. AND (D) ALL SUCH AMOUNTS CREDITED TO THE CAPITAL ACCOUNT OF ANY MEMBER SHALL HAVE THE SAME STATUS AS THOUGH THEY HAD BEEN PAID TO THE MEMBER IN CASH IN PURSUANCE OF A LEGAL OBLIGATION TO DO SO AND THE MEMBER HAD THEN FURNISHED TO THE COOPERATIVE CORRESPONDING AMOUNTS OF CAPITAL. THE AMOUNT REPORTED ON PART IX, LINE 4 REPRESENTS THE AMOUNT OF PATRONAGE CAPITAL THAT IS EITHER ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2014 CALENDAR YEAR. AS NOTED ABOVE, SUCH AMOUNTS ARE ALLOCATED SUBSEQUENT TO YEAR-END IN A FAIR AND EQUITABLE MANNER ON THE BASIS OF PATRONAGE (I.E. PURCHASES). THE AMOUNTS ALLOCATED ARE REPRESENTATIVE OF THE MARGINS FROM THE PROVISION OF ELECTRIC ENERGY TO THE MEMBERS AND ARE DONE PURSUANT TO THE OBLIGATION THAT EXISTED IN THE BYLAWS PRIOR TO THE COOPERATIVE PROVIDING ELECTRICITY TO ITS MEMBERS. THEREFORE, THESE AMOUNTS MEET THE DEFINITION OF THE TERM "PATRONAGE DIVIDENDS PAID". PLEASE NOTE, HOWEVER, THAT BECAUSE PATRONAGE DIVIDENDS ARE THE PROCESS BY WHICH THE COOPERATIVE OPERATES AT COST WITH ITS MEMBERS AND THEREBY A KEY COMPONENT TO ACCOMPLISHING ITS EXEMPT PURPOSE, THE COOPERATIVE HAS REPORTED THE AMOUNT OF ITS 2014 MARGIN THAT HAS BEEN OR IS TO BE ALLOCATED TO THE MEMBERS SUBSEQUENT TO YEAR-END. SUCH AMOUNTS ARE AN EXPENSE FOR FORM 990 REPORTING AND IS NOT AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. AS A RESULT, THE DIFFERENCE BETWEEN THE COOPERATIVE'S GAAP BASIS FINANCIAL STATEMENTS AND THE REVENUE LESS EXPENSES REPORTED ON PART I, LINE 19 IS THE AMOUNT OF PATRONAGE DIVIDENDS REPORTED AS BENEFITS PAID TO MEMBERS. FORM 990, PART X, LINE 7 THE COOPERATIVE HAS DETERMINED THAT PROGRAM RELATED LOANS AND NOTES RECEIVABLES SHOULD BE INCLUDED ON PART X, LINE 7 FOR 2014. TO INCREASE CONSISTENCY, SUCH LOANS AND NOTES RECEIVABLES FOR THE PRIOR YEAR HAVE BEEN RECLASSIFIED FROM LINE 12 TO LINE 7. Form 990, Part XI, line 9: PATRONAGE CAPITAL RETIRED - TOTAL -2,757,736. PATRONAGE CAPITAL RETIRED - DISCOUNT 761,764. PATRONAGE CAPITAL ASSIGNABLE 972,450. EQUITY METHOD INCOME (LOSS) -5,578. DMEA UTILITIES SERVICES LLC PO BOX 910 MONTROSE CO 81402 841556992 ALTERNATIVE ENERGY INVESTMENTS CO N/A C 38236 540160 1.00000 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 DMEA UTILITIES SERVICES LLC NA - LESS THAN 50000 R CASH