2015-09-08T09:11:09-05:00 2014-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2014-01-01 590472323 SUWANNEE VALLEY ELECTRIC COOPERATIVE INC SUWA 3863622226 PO BOX 160 LIVE OAK FL 320640160 MICHAEL MCWATERS EXECUTIVE VP/CEO 3863622226 2015-09-05 1 William M Miller P00439459 8067473806 2015-09-05 X 2014 2016-02-25 16:41:14Z MICHAEL MCWATERS PO BOX 160 LIVE OAK FL 320640160 58692909 0 X WWW.SVEC-COOP.COM X 1937 FL TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 9 9 94 0 -505 -505 0 0 53913389 58160920 235753 268162 133112 88249 54282254 58517331 8107 0 2129215 2706397 5177742 5591731 0 0 0 46753354 50219203 54068418 58517331 213836 0 108289734 114694207 63637762 67772993 44651972 46921214 THE COOPERATIVE'S RESPONSIBILITY AND AIM AS A MEMBER OWNED ORGANIZATION IS TO PROVIDE EXCELLENT AND RELIABLE CUSTOMER SERVICE WITH COMPETITIVE RATES WHILE ENHANCING THE QUALITY OF LIFE OF RESIDENTS IN THE SUWANNEE RIVER VALLEY. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 25,423 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 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 28 0 94 1 0 0 0 0 0 58127222 419205 0 X 9 9 1 0 0 0 1 1 1 1 0 0 0 1 1 1 1 0 1 1 1 0 X MICHAEL MCWATERS CEO 3863622226 11340 100TH ST LIVE OAK FL 32060 X SIDNEY LORD PRESIDENT 1.20 X X 6500 0 0 JERRY GOFF VICE PRESIDENT 1.50 X X 6000 0 0 HUGH HUNTER TREASURER 2.70 X X 7000 0 0 WILLIAM HART SECRETARY 6.40 X X 15000 0 0 ALTON BLAIR DIRECTOR 3.90 X 11000 0 0 TYLER PUTNAL DIRECTOR 4.30 X 13750 0 0 ANDY WALKER DIRECTOR 2.10 X 6500 0 0 SAM ROBERSON JR DIRECTOR 1.40 X 6500 0 0 TIMOTHY STEICHEN DIRECTOR 1.10 X 6000 0 0 JOHN MARTZ FORMER CEO (JAN) 45.00 X 81613 0 5178 MICHAEL MCWATERS EXECUTIVE VP/CEO (FEB - DEC) 50.00 X 144318 0 43636 TUCKER LEMLEY CFO 48.00 X 108272 0 17671 KURT MILLER DIRECTOR OF ENGINEERING 44.00 X 121368 0 47938 533821 0 114423 3 0 1 0 MUSGROVE CONSTRUCTION 8708 US HWY 90 LIVE OAK FL 32060 CONSTRUCTION 867940 BRYANT TREE SERVICES INC 9368 132ND TERRACE LIVE OAK FL 32060 RIGHT OF WAY CLEARING 580995 OSMOSE UTILITIES SERVICES INC PO BOX 8000 BUFFALO NY 14267 POLE INSPECTION 122392 3 X ELECTRICITY SALES 221000 57253861 57253861 PATRONAGE DIVIDENDS 221000 677188 677188 CONSUMER SERVICE FEES 221000 228051 228051 OTHER PROGRAM REVENUE 221000 1820 1820 58160920 213769 213769 93949 5400 88549 88549 25115 63434 190250 135857 54393 54393 54393 33996 34321 -325 180 -505 MISC NON-OPERATING INCOME 221000 25 25 25 58517331 58186240 -505 331596 X 2706397 478938 3261352 722519 853584 275338 2506956 4251118 PURCHASED POWER 38218963 DISTRIBUTION EXPENSE 3415393 ADMIN & GENERAL EXPENSE 1225438 CUSTOMER SERVICE 516312 85023 58517331 X 2937503 5700217 3266958 3640281 7561 809 554327 593655 2642342 2371898 129058199 37020226 89624466 92037973 9201771 9760517 54806 588857 108289734 114694207 3304494 3598627 52734621 55717447 7598647 8456919 63637762 67772993 X 90960 91345 0 0 44561012 46829869 44651972 46921214 108289734 114694207 X 0 2269242 X X 0 1 X 0 0 424634 424634 3006216 1444037 1562179 124574723 35576189 88998534 1052626 1052626 92037973 CAPITAL TERM CERTIFICATES - CFC 979240 C MEMBERSHIPS 10792 C MEMBER CAPITAL SECURITY PROGRAM - CFC 100000 C PATRONAGE CAPITAL - CFC 473761 C PATRONAGE CAPITAL - COBANK 76870 C PATRONAGE CAPITAL - FREI 242873 C PATRONAGE CAPITAL - GRE 491106 C PATRONAGE CAPITAL - NISC 117782 C PATRONAGE CAPITAL - SECI 7083804 C PATRONAGE CAPITAL - OTHER 48710 C DEFERRED COMPENSATION INVESTMENTS - HOMESTEAD FUNDS 135579 F 9760517 CONSUMER DEPOSITS 1320929 ACCUMULATED POST RETIREMENT BENEFIT OBLIGATION 720610 ACCRUED COMPENSATED ABSENCES 1311072 ACCRUED CURRENT LIABILITIES - OTHER 255537 ACCRUED TAXES 131275 DEFERRED COMPENSATION 135579 DEFERRED CREDIT - UNCLAIMED PROPERTY 672945 DEFERRED CREDIT - ADVANCES ON CONSTRUCTION 32436 DEFERRED CREDIT - OTHER 69513 OVERBILLED WHOLESALE POWER COST ADJUSTMENT 3807023 8456919 X 58500723 0 58500723 16608 16608 58517331 55794327 0 55794327 2723004 2723004 58517331 Part X, Line 2: ON JANUARY 1, 2009, THE COOPERATIVE 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. Part XI, Line 4b - Other Adjustments: EXPENSE RECLASSIFICATION FROM NON-OPERATING MARGINS 16,608. Part XII, Line 4b - Other Adjustments: EXPENSE RECLASSIFICATION FROM NON-OPERATING MARGINS 16,608. PATRONAGE CAPITAL ASSIGNABLE 2,706,396. 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 X X 0 0 0 MICHAEL MCWATERS EXECUTIVE VP/CEO (FEB - DEC) 142992 0 100 0 1226 0 20524 0 23112 0 187954 0 0 0 KURT MILLER DIRECTOR OF ENGINEERING 110474 0 0 0 10894 0 24186 0 23752 0 169306 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. 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. MICHAEL MCWATERS ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: $ 13,501 401(K) EMPLOYER MATCH: 7,023 TOTAL COLUMN C: $ 20,524 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (13,501) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 35,221 EXPENSE TO THE COOPERATIVE: $ 42,244 KURT MILLER ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: $ 18,600 401(K) EMPLOYER MATCH: 5,586 TOTAL COLUMN C: $ 24,186 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (18,600) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 27,038 EXPENSE TO THE COOPERATIVE: $ 32,624 Form 990, Part VI, Section A, line 2 BUSINESS RELATIONSHIP: FORMER CEO JOHN MARTZ (PRIOR TO HIS RETIREMENT), CURRENT CEO MICHAEL MCWATERS (SUBSEQUENT TO THE FORMER CEO'S RETIREMENT), DIRECTOR WILLIAM HART AND DIRECTOR HUGH HUNTER SERVED ON THE BOARD OF SEMINOLE ELECTRIC COOPERATIVE, INC. 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 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; 4. AMENDMENTS TO THE ARTICLES OF INCORPORATION; AND 5. AMENDMENTS TO THE BY-LAWS. 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, 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 ANNUALLY, AT A DATE AND TIME TO BE DETERMINED BY THE BOARD, EACH TRUSTEE WILL AFFIRM BY WRITTEN STATEMENT FILED WITH THE COOPERATIVE, THAT HE OR SHE IS IN COMPLIANCE WITH THE CONFLICT OF INTEREST POLICY. Form 990, Part VI, Section B, line 15 THE BOARD OF DIRECTORS HIRES A COMPENSATION CONSULTANT TO STUDY AND PREPARE A SALARY SCHEDULE FOR GENERAL MANAGERS AND CEO'S OF ELECTRIC COOPERATIVE ORGANIZATIONS OF SIMILAR SIZE AND OPERATIONS TO THAT OF THE COOPERATIVE. THE BOARD USES THIS SALARY SCHEDULE TO SET THE COMPENSATION FOR THE COOPERATIVE'S CEO. A COPY OF THE INDEPENDENT CONSULTANT'S RECOMMENDATION AND SALARY SCHEDULE IS FILED IN THE APPLICABLE PERSONNEL FILES AS DOCUMENTATION OF THE PROCESS USED BY THE BOARD OF DIRECTORS FOR SETTING THE COMPENSATION FOR THE CEO. THE CEO AND BOARD OF DIRECTORS USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER OR KEY EMPLOYEE, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILARLY SITUATED COOPERATIVES THROUGOUT FLORIDA AND THE NATION. Form 990, Part VI, Section C, line 19 EACH NEW MEMBER IS PROVIDED A COPY OF THE COOPERATIVE'S BY-LAWS. EACH YEAR THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING. THE COOPERATIVE ALSO PROVIDES 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 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 MATCHING CONTRIBUTION UP TO 3% OF A PARTICIPATING EMPLOYEE'S SALARY. 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, VISION AND LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS AND HIGHLY COMPENSATED EMPLOYEES, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES ARE COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE EMPLOYER CONTRIBUTIONS TO THE 401(K) PENSION PLAN AND THE INSURANCE PREMIUMS PAID. 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 RURAL UTILITIES SERVICES (RUS) UNIFORM SYSTEM OF ACCOUNTS AS PRESCRIBED FOR ELECTRIC BORROWERS OF THE RUS. THE UNIFORM SYSTEM OF ACCOUNTS DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1 - 23. THE COOPERATIVE SEPARATLEY 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 THE TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 3,740,290 LESS DIRECTORS FEES REPORTED ON 1099-MISC (78,250) LESS EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (66,485) PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,108,095 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 854,458 TOTAL WAGES ACCRUED AND/OR PAID $ 5,558,108 FORM 990, PART IX, LINE 24 THE FOLLOWING IS A BREAKDOWN OF ADMINISTRATIVE AND GENERAL EXPENSE ON FORM 990, PART IX, LINE 24. OFFICE SUPPLIES AND EXPENSE $ 388,049 OUTSIDE SERVICES EMPLOYED 112,329 INSURANCE 206,999 MAINTENANCE OF GENERAL PLANT 267,763 MISCELLANEOUS GENERAL EXPENSE 250,298 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE $ 1,225,438 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 AS "BENEFITS PAID TO MEMBERS". 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 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 POWER AND ENERGY IN EXCESS OF OPERATING COSTS AND EXPENSES PROPERLY CHARGEABLE AGAINST SUCH SERVICES (I.E. MARGINS FROM THE PROVISION OF ELECTRIC POWER AND ENERGY). (B) THE MARGINS FROM THE PROVISION OF ELECTRIC POWER AND 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 PATRONS 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 POWER AND 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. 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 IX, LINE 24E THE FOLLOWING IS A BREAKDOWN OF OTHER EXPENSES ON FORM 990, PART IX, LINE 24E SALES EXPENSE $ 23,230 OTHER TAXES 9,091 OTHER DEDUCTIONS - DONATED TIME 7,558 OTHER DEDUCTIONS - ABANDONED WORK ORDERS 45,144 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 85,023 FORM 990, PART X THE COOPERATIVE HAS DETERMINED THAT DEFERRED CREDITS SHOULD BE INCLUDED ON PART X, LINE 25 FOR 2014. TO INCREASE CONSISTENCY, DEFERRED CREDITS FOR THE PRIOR YEAR WERE RECLASSIFIED FROM LINE 19 TO LINE 25. Form 990, Part XI, line 9: NET INCREASE IN MEMBERSHIPS 385. OTHER COMPREHENSIVE INCOME - PROVISION FOR PENSIONS AND BENEFITS 54,600. PATRONAGE CAPITAL ASSIGNABLE - MARGINS 2,706,397. PATRONAGE CAPITAL ASSIGNABLE - UNCLAIMED PROPERTY 60,901. PATRONAGE CAPITAL RETIRED -553,041. FORM 990, PART XII, LINE 2C THE BOARD AS A WHOLE IS RESPONSIBLE FOR OVERSEEING THE FINANCIAL STATEMENT AUDIT AND SELECTING THE INDEPENDENT AUDITOR. NO CHANGES WERE MADE TO THIS PROCESS DURING THE YEAR.