2015-11-16T08:36:11-06:00 2014-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2014-01-01 750405473 LYNTEGAR ELECTRIC COOPERATIVE INC LYNT 8065614588 PO BOX 970 TAHOKA TX 79373 RAY BOX CFO 8065614588 2015-11-15 1 WILLIAM M MILLER P00439459 8067473806 2015-10-20 X 2014 2016-02-25 16:41:14Z GREG HENLEY PO BOX 970 TAHOKA TX 79373 82685774 0 X WWW.LYNTEGAR.COOP X 1938 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 7 5 121 0 119823 0 0 0 76422822 80346962 1335063 1337098 551061 497008 78308946 82181068 24085 6374 6642584 5256452 6785183 7002891 0 0 0 63485528 68545786 76937380 80811503 1371566 1369565 201496098 212426314 98444648 105812304 103051450 106614010 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 - 22,575 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 1 1 0 1 1 0 1 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 1 1 0 0 0 0 0 1 0 0 0 1 56 0 121 1 1 1 0 0 0 0 77095542 3333615 0 X 7 5 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 X RAY BOX CFO 8065614588 1807 MAIN STREET TAHOKA TX 79373 X EARL J BROWN JR PRESIDENT 4.80 X X 26335 0 0 WAYNE T HOWARD VICE PRESIDENT 2.80 X X 20658 0 0 BILLY WEAVER SECRETARY-TREASURER 3.90 X X 23644 0 0 HR BARRON DIRECTOR 1.90 X 21403 0 0 RICKY DAY DIRECTOR 2.20 X 19008 0 0 BENJAMIN FRANKLIN DIRECTOR 1.70 X 18758 0 0 KEVIN MITCHELL DIRECTOR 1.70 X 19258 0 0 GREG HENLEY CEO 45.00 X 176495 0 50503 RAY BOX CFO 45.00 X 118663 0 40917 GARY CARTWRIGHT BRANCH MANAGER 40.00 X 148165 0 30475 GLENN ANDERSON LINE DEPARTMENT MANAGER 40.00 X 117379 0 37109 WILLIAM ATEN MANAGER OF ENGINEERING 40.00 X 111928 0 38565 BARRY PITTMAN MANAGER MEMBER SERVICES 40.00 X 106107 0 38134 927801 0 235703 6 0 1 0 SANDIA CONSTRUCTION 2723 81ST STREET LUBBOCK TX 79493 BUILDING CONSTRUCTION 3313036 PLASKA PO BOX 7630 AMARILLO TX 78224 LINE CONSTRUCTION 1631324 JENKINS ELECTRIC PO BOX 156 IDALOU TX 79329 LINE CONSTRUCTION 1363602 BIRD ELECTRIC PO BOX 6565 LUBBOCK TX 79493 LINE CONSTRUCTION 543880 QUICK STRIPE PAVING INC 11002 US-87 LUBBOCK TX 79423 LINE CONSTRUCTION 122883 5 X ELECTRICITY SALES 221000 76310421 76310421 PATRONAGE DIVIDENDS 221000 4036541 3994253 42288 80346962 937807 937807 5 5 16502 13635 3896 0 12606 13635 26241 9998 16243 365897 244675 0 211281 365897 33394 399291 399291 246147 289529 -43382 -43382 OTHER PASS-THRU INVESTMENT INCOME 523000 416390 120917 295473 OTHER INVESTMENT INCOME 523000 97754 97754 514144 82181068 80314672 119823 1746573 X 6374 5256452 535642 4449550 353891 1325317 338491 3645208 5998862 PURCHASED POWER 53308491 DISTRIBUTION EXPENSE 3243818 ADMIN. & GENERAL 1603549 CUSTOMER SERVICE 322636 423222 80811503 457856 387053 3116278 796275 3800397 4455000 2993363 2515536 22827 36817 176605833 49060320 117392407 127545513 21650690 21776813 51461239 54299277 601041 614030 201496098 212426314 4244154 4848907 149524 141516 88698360 95473068 5352610 5348813 98444648 105812304 X 26635 26740 0 0 103024815 106587270 103051450 106614010 201496098 212426314 X 1369565 2192995 X X 0 1 X 0 0 0 1 X 188486 188486 1950600 1130017 820583 166684239 47930303 118753936 7782508 7782508 127545513 COMMON STOCKS 4585235 F ALTERNATIVE INVESTMENTS 4959763 F MUTUAL FUNDS 8951830 F CORPORATE BONDS 7729 F EXCHANGE-TRADED FUNDS (ETF) & CLOSED-END FUNDS (CEF) 3272256 F 21776813 PATRONAGE CAPITAL - CFC 1720376 C PATRONAGE CAPITAL - NISC 35197 C PATRONAGE CAPITAL - NRTC 442136 C PATRONAGE CAPITAL - TEC 666924 C PATRONAGE CAPITAL - GSEC 39028645 C PATRONAGE CAPITAL - OTHER 2040 C CONTRIBUTED CAPITAL - GSEC 4789988 C CAPITAL TERM CERTIFICATES - CFC 2609311 C MEMBER CAPITAL SECURITIES - CFC 5000000 C OTHER INVESTMENTS - MEMBERSHIPS 4660 C 54299277 ACCRUED COMPENSATED ABSENCES 2687805 ACCRUED INTEREST 304209 ACCRUED EXPENSES - OTHER 24106 POWER COST OVER RECOVERY 655084 ACCUMULATED POST RETIREMENT BENEFIT OBLIGATION 673624 UNCLAIMED PATRONAGE CAPITAL 898304 UNAMORTIZED GAIN ON REACQUIRED DEBT 95970 OTHER DEFERRED CREDITS 5200 ACCRUED TAXES 4511 5348813 X 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 TEXAS 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. ALSO PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED AN ECONOMIC DEVELOPMENT FUND WITH AMOUNTS DESIGNATED UNCLAIMED UNDER TEXAS STATE LAW. THE AMOUNTS DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED FOR THE STIMULATION AND IMPROVEMENT OF BUSINESS AND COMMERCIAL ACTIVITY FOR ECONOMIC DEVELOPMENT IN RURAL COMMUNITIES. ANY AMOUNTS SO DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. ALSO PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED AN ENERGY EFFICIENCY ASSISTANCE FUND WITH AMOUNTS DESIGNED UNCLAIMED UNDER TEXAS STATE LAW. THE AMOUNTS DEPOSITED INTO THE ENERGY EFFICIENCY ASSISTANCE FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED TO ASSIST MEMBERS OF AN ELECTRIC COOPERATIVE IN REDUCING THEIR ENERGY CONSUMPTION AND ELECTRICITY BILLS. ANY AMOUNTS SO DEPOSITED INTO THE ENERGY EFFICIENCY ASSISTANCE 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 THEIR TAX POSITIONS WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE OR OTHER STATE TAX AUTHORITY, AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. FORM 990, PART X, PAGE 11, LINE 15 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. 0 FORM 990, SCHEDULE I, PART IV 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 0 0 0 GREG HENLEY CEO 171716 0 2454 0 2325 0 18417 0 32086 0 226998 0 0 0 RAY BOX CFO 113600 0 2166 0 2897 0 12357 0 28560 0 159580 0 0 0 GARY CARTWRIGHT BRANCH MANAGER 145986 0 0 0 2179 0 7472 0 23003 0 178640 0 0 0 GLENN ANDERSON LINE DEPARTMENT MANAGER 114677 0 0 0 2702 0 10919 0 26190 0 154488 0 0 0 WILLIAM ATEN MANAGER OF ENGINEERING 111406 0 0 0 522 0 11929 0 26636 0 150493 0 0 0 LENDON SCHELLHASE MS. LENDON SCHELLHASE IS RELATED TO EARL J. BROWN, BOARD PRESIDENT. 10622 MS. SCHELLHASE IS AN EMPLOYEE OF THE COOPERATIVE AND ALSO THE DAUGHTER OF EARL J. BROWN, JR, PRESIDENT OF THE BOARD OF DIRECTORS. 0 CODY HOGG MR. CODY HOGG IS RELATED TO KEVIN MITCHELL, DIRECTOR. 30985 MR. HOGG IS AN EMPLOYEE OF THE COOPERATIVE AND ALSO THE SON-IN-LAW OF KEVIN MITCHELL, DIRECTOR. 0 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. THE DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS; AND 4. AMENDMENT TO THE ARTICLES OF INCORPORATION. Form 990, Part VI, Section B, line 11 THE FORM 990 WAS DISCUSSED AND REVIEWED BY THE BOARD AT THE FIRST BOARD MEETING OCCURING SUBSEQUENT TO THE DATE WHEN THE FORM 990 WAS FILED. Form 990, Part VI, Section B, line 12c ON AN ANNUAL BASIS, LEGAL COUNSEL IS REQUIRED TO REVIEW THE CONFLICT OF INTEREST POLICY WITH THE DIRECTORS AND OFFICERS AT THE FIRST MEETING OF THE BOARD OF DIRECTORS FOLLOWING ELECTIONS. EACH DIRECTOR AND OFFICER MUST ALSO COMPLETE AND SIGN A CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM. THEREAFTER, 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/CEOS FROM COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE BOARD AND THE GENERAL MANAGER/CEO USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND HIGHLY COMPENSATED EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT TEXAS AND THE NATION. Form 990, Part VI, Section C, line 19 THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING AND THE COOPERATIVE BY-LAWS ARE AVAILABLE ON THE COOPERATIVE'S WEBSITE. THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF THE AUDITED FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY, OR GOVERNING DOCUMENTS TO ANY MEMBER WHO REQUESTS A COPY. FORM 990, PART VI, SECTION A, LINE 1 THE BOARD OF DIRECTORS IS COMPRISED OF 7 VOTING MEMBERS. HOWEVER, THE BOARD PRESIDENT VOTES ONLY IN THE CASE OF A TIE. 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. AS PART OF THE PLAN DOCUMENT, THE COOPERATIVE PROVIDES A BASE AND A MATCHING CONTRIBUTION. EMPLOYER CONTRIBUTIONS TO THIS PLAN ARE AVAILABLE TO PARTICIPATING EMPLOYEES, INCLUDING OFFICERS AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLAN. THE COOPERATIVE ALSO PROVIDES HEALTH, DENTAL, VISION 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 AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN AND THE INSURANCE PAID ON 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 PER PERSON 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 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 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 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 $ 4,985,192 LESS DIRECTORS FEES REPORTED ON 1099-MISC (149,064) LESS EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (91,420) PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,771,948 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 1,420,709 TOTAL WAGES ACCRUED AND/OR PAID $ 7,937,365 FORM 990, PART IX, LINE 24 ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: SAFETY AND TRAINING $ 114,598 OFFICE SUPPLIES AND EXPENSE 313,445 OUTSIDE SERVICES EMPLOYED 196,008 INJURIES AND DAMAGES 144,258 REGULATORY COMMISSION EXPENSE 142,640 DIRECTOR'S EXPENSES 13,438 DUES PAID ASSOCIATED ORGANIZATIONS 84,405 ANNUAL MEETING 74,678 GENERAL ADVERTISING 71,327 MAINTENANCE OF GENERAL PLANT 295,609 MISCELLANEOUS GENERAL EXPENSE 153,143 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $ 1,603,549 FORM 990, PART IX, LINE 24E OTHER EXPENSE IS COMPRISED OF THE FOLLOWING: SALES EXPENSE $ 982 BROKERAGE FEES ON INVESTMENTS 158,780 TRANSMISSION EXPENSE 11,718 SATELLITE AND INTERNET OPERATING EXPENSES 15,726 INVESTMENT EXPENSES AND DEDUCTIONS 236,016 TOTAL OTHER EXPENSES PER FORM 990 LINE 24E $ 423,222 FORM 990, PART IX, LINE 4 THE FORM 990 INSTRUCTIONS SPECIFICALLY STATE THAT THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE MEMBERS 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 MEMBERS (HEREINAFTER REFERRED TO AS 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 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 PATRONS 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 PATRONS AS CAPITAL. (C) THE COOPERATIVE IS OBLIGATED TO PAY BY CREDITS TO A CAPITAL ACCOUNT FOR EACH PATRON FOR ALL SUCH MARGINS. AND (D) ALL SUCH AMOUNTS CREDITED TO THE CAPITAL ACCOUNT OF ANY PATRON SHALL HAVE THE SAME STATUS AS THOUGH THEY HAD BEEN PAID TO THE PATRON IN CASH IN PURSUANCE OF A LEGAL OBLIGATION TO DO SO AND THE PATRON 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 PATRONS 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 PATRONS AND ARE DONE PURSUANT TO THE OBLIGATION THAT EXISTED IN THE BYLAWS PRIOR TO THE COOPERATIVE PROVIDING ELECTRICITY TO ITS PATRONS. THEREFORE, THESE AMOUNTS MEET THE DEFINITION OF THE TERM "PATRONAGE DIVIDENDS PAID". PLEASE NOTE, HOWEVER, THAT BECAUSE PATRONAGE DIVIDENDS IS 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 THE AMOUNT OF ITS 2014 MARGIN THAT HAS BEEN OR IS TO BE ALLOCATED TO THE PATRONS 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 (GAAP). 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 XI, line 9: NET CHANGE IN MEMBERSHIPS 105. OTHER COMPREHENSIVE INCOME - UNREALIZED HOLDING GAIN ON SECURITIES 82,653. OTHER COMPREHENSIVE INCOME - POST RETIREMENT HEALTH BENEFITS 281,300. OTHER - BOOK/TAX DIFFERENCE ON OTHER INVESTMENT INCOME -395,970. PATRONAGE CAPITAL RETIRED -3,031,545. PATRONAGE CAPITAL ASSIGNABLE 5,256,452. FORM 990, PART XII, LINE 2 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. LEC DEVELOPMENT LLC PO BOX 970 TAHOKA TX 79373 752452483 SATELLITE TV & INTERNET & INVESTMENTS TX 1399718 22999070 LYNTEGAR ELECTRIC COOPERATIVE INC 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NA