2015-10-06T08:38:34-05:00 2014-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2014-01-01 590247095 FLORIDA KEYS ELECTRIC COOPERATIVE ASSOCIATION INC FLOR 3058522431 91630 OVERSEAS HWY TAVERNIER FL 330700377 CRIS BEATY CFO 3058522431 2015-09-21 1 William M Miller P00439459 8067473806 2015-09-21 2014 2016-03-07 17:11:31Z SCOTT NEWBERRY 91630 OVERSEAS HWY TAVERNIER FL 330700377 86341220 0 X WWW.FKEC.COM X 1940 FL TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 9 9 128 0 64454 63454 0 0 78057969 85447029 100247 98831 717076 710708 78875292 86256568 33415 29390 4287974 4310821 10613185 10828249 0 0 0 63940718 71088108 78875292 86256568 0 0 142456734 145765294 88592967 89723945 53863767 56041349 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 - 32,304 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 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 13 0 1 128 1 1 1 0 0 0 0 80649439 962648 0 X 9 9 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 0 0 0 X CRIS BEATY 3058522431 91630 OVERSEAS HIGHWAY TAVERNIER FL 33070 X JAMES BOILINI PRESIDENT 7.00 X X 29050 0 0 GRETCHEN HOLLAND VICE PRESIDENT 5.00 X X 30400 0 0 MICHAEL PUTO SECRETARY 24.90 X X 24550 0 0 HAL BARRETT TREASURER (1/2014 - 9/2014) 4.00 X X 18850 0 0 FRANK HAWKINS JR TREASURER 3.10 X X 24850 0 0 DAVID RITZ DIRECTOR 6.20 X 28300 0 0 CRAIG BELCHER DIRECTOR 6.80 X 32200 0 0 GEORGE HERTEL DIRECTOR 6.70 X 27950 0 0 KARL WAGNER DIRECTOR 7.90 X 28100 0 0 CALE SMITH DIRECTOR (11/2014 - 12/2014) 2.50 X 4550 0 0 SCOTT NEWBERRY GENERAL MANAGER/CEO 40.00 X 231343 0 63076 CRIS BEATY CFO 44.00 X 167669 0 48375 JOHN STUART COO 45.00 X 169254 0 62455 DENNIS MINTON SUPPLY & DELIVERY 40.00 X 150061 0 48580 DARRELL DAVIS CREW LEADER 40.00 X 147466 0 44875 RUDY VEGA JOURNEYMAN LINEMAN 40.00 X 130450 0 23232 JUAN CASTANO JOURNEYMAN LINEMAN 40.00 X 129929 0 23628 NICOLE KRAUS DIRECTOR OF HR 40.00 X 126562 0 21887 1501534 0 336108 48 0 1 0 PIKE ENTERPRISES INC PO BOX 37904 DEPT 116 CHARLOTTE NC 282370116 SUBSTATION UPGRADE HARDWARE/INSTALLATION 5102097 ASPLUNDH TREE EXPERT CO PO BOX 532729 ATLANTA GA 303532729 TREE TRIMMING 1122023 LEIDOS ENGINEERING SVCS LLC PO BOX 223058 PITTSBURGH PA 15251 ENGINEERING INSPECTIONS/CONSTRUCTION MON 366004 CAPUTO ELECTRIC INC 98535 OVERSEAS HIGHWAY KEY LARGO FL 33037 INSTALL UG CONDUIT/CONDUCTOR 141691 HAVERFIELD CORPORATION 1750 EMMITSBURG ROAD GETTYSBURG PA 17325 AERIAL LINE INPSECTIONS 132855 6 X ELECTRICITY SALES 221000 79756427 79756427 ELECTRICITY WHEELING 221000 4796213 4796213 PATRONAGE DIVIDENDS 221000 593939 593939 SERVICE FEES 221000 300450 300450 85447029 100594 100594 164936 543865 0 12941 164936 530924 695860 64454 631406 1763 -1763 -1763 -1763 84796 69948 14848 14848 86256568 85461877 64454 730237 X 29390 4310821 990972 6171781 1285992 1872083 507421 3603299 4653535 PURCHASED POWER 54105061 DISTRIBUTION EXPENSE 2822135 ADMIN & GENERAL EXP 2248672 UNRELATED BUS. INC. TAX 13915 3641491 86256568 1142824 3068134 10098961 8687173 2664654 2802641 7246270 6800255 158046522 39996691 115034025 118049831 5236401 5430347 1033599 926913 142456734 145765294 7300761 7158366 73915225 75396104 7376981 7169475 88592967 89723945 X 0 0 3113205 3631204 50750562 52410145 53863767 56041349 142456734 145765294 X 0 2177582 X X 0 1 X 1 0 1535609 1535609 21568875 3889391 17679484 128502690 36107300 92395390 6439348 6439348 118049831 CONSUMER DEPOSITS 5781117 ACCRUED EMPLOYEE COMPENSATED ABSENCES 1300873 DEFERRED CREDIT - UNAMORTIZED DISCOUNT OF REACQUIRED DEBT 63549 OTHER DEF CREDIT - FORFEITED DEPOSITS 23936 7169475 X 85449750 12941 12941 85436809 819759 819759 86256568 81138929 12941 12941 81125988 5130580 5130580 86256568 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 THEIR 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 2d - Other Adjustments: TOWER RENTAL EXPENSES ALLOCATED TO RENTAL INCOME 12,941. Part XI, Line 4b - Other Adjustments: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 819,759. Part XII, Line 2d - Other Adjustments: TOWER RENTAL EXPENSES ALLOCATED TO RENTAL INCOME 12,941. Part XII, Line 4b - Other Adjustments: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 819,759. PATRONAGE CAPITAL ASSIGNABLE 4,310,821. SCHEDULE D Part VIII THE AMOUNT OF INVESTMENTS - PROGRAM RELATED ON FORM 990, PAGE 11, PART X, LINE 13 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 VIII HAS BEEN LEFT BLANK. 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. 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. 1 Part I, Line 2: THE BOARD OF DIRECTORS HAS DISCRETION TO DONATE TO EXEMPT 501(C)(3)CHARITABLE NON-PROFIT ORGANIZATIONS. PRIOR TO DONATING, THE BOARD REVIEWS THE ORGANIZATIONS' INFORMATION AND REQUEST FOR FUNDING. 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 INDIVIDUAL REPORTING THRESHOLDS OF PART II. X X 0 0 0 SCOTT NEWBERRY GENERAL MANAGER/CEO 187969 0 16000 0 27374 0 46445 0 16631 0 294419 0 0 0 CRIS BEATY CFO 150632 0 904 0 16133 0 32932 0 15443 0 216044 0 0 0 JOHN STUART COO 143440 0 865 0 24949 0 47012 0 15443 0 231709 0 0 0 DENNIS MINTON SUPPLY & DELIVERY 131845 0 1500 0 16716 0 33616 0 14964 0 198641 0 0 0 DARRELL DAVIS CREW LEADER 132124 0 1639 0 13703 0 31029 0 13846 0 192341 0 0 0 RUDY VEGA JOURNEYMAN LINEMAN 118567 0 860 0 11023 0 9579 0 13653 0 153682 0 0 0 JUAN CASTANO JOURNEYMAN LINEMAN 117821 0 870 0 11238 0 9975 0 13653 0 153557 0 0 0 FORM 990, 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. SCOTT NEWBERRY ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $37,945 401(K) EMPLOYER MATCH 8,500 TOTAL COLUMN C: 46,445 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (37,945) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 44,183 EXPENSE TO COOPERATIVE $52,683 CRIS BEATY ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $26,283 401(K) EMPLOYER MATCH 6,649 TOTAL COLUMN C: 32,932 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (26,283) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 34,409 EXPENSE TO COOPERATIVE $41,058 JOHN STUART ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $40,364 401(K) EMPLOYER MATCH 6,648 TOTAL COLUMN C: 47,012 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (40,364) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 34,409 EXPENSE TO COOPERATIVE $41,057 DENNIS MINTON ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $27,752 401(K) EMPLOYER MATCH 5,864 TOTAL COLUMN C: 33,616 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (27,752) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 30,432 EXPENSE TO COOPERATIVE $36,296 DARRELL DAVIS ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $26,993 401(K) EMPLOYER MATCH 4,036 TOTAL COLUMN C: 31,029 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (26,993) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 21,225 EXPENSE TO COOPERATIVE $25,261 RUDY VEGA ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $5,775 401(K) EMPLOYER MATCH 3,804 TOTAL COLUMN C: 9,579 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (5,775) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 19,610 EXPENSE TO COOPERATIVE $23,414 JUAN CASTANO ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 6,163 401(K) EMPLOYER MATCH 3,812 TOTAL COLUMN C: 9,975 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (6,163) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 19,610 EXPENSE TO COOPERATIVE $23,422 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 BY 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. THE DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS. 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 THE COOPERATIVE REGULARLY REVIEWS BUSINESS RELATIONSHIPS WITH BOARD MEMBERS AND EMPLOYEES TO DETERMINE IF ALL BUSINESS RELATIONSHIPS ARE IN PROPER COMPLIANCE WITH THE CONFLICT OF INTEREST POLICY. DIRECTORS AND EMPLOYEES ARE OBLIGATED TO DISCLOSE TO THE BOARD PRESIDENT, CEO AND THE BOARD ATTORNEY ANY POTENTIAL CONFICT OF INTEREST INVOLVING THEMSELVES, A PEER, OR A FAMILY MEMBER. Form 990, Part VI, Section B, line 15 THE CEO'S PERFORMANCE AND SALARY ARE REVIEWED ANNUALLY BY THE HUMAN RESOURCES COMMITTEE WHICH IS COMPRISED OF THREE BOARD MEMBERS. THE HUMAN RESOURCES COMMITTEE BRINGS A RECOMMENDATION FOR THE CEO'S SALARY ADJUSTMENT AND INCENTIVES TO THE ENTIRE BOARD FOR APPROVAL. Form 990, Part VI, Section C, line 19 THE COOPERATIVE PROVIDES A SUMMARY OF THE AUDITED BALANCE SHEET AND INCOME STATEMENT ON THE COOPERATIVE'S WEBSITE AND ANNUALLLY PUBLISHES THIS SUMMARY IN THE FLORIDA CURRENTS MAGAZINE. 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 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 4% OF A PARTICIPATING EMPLOYEE'S BASE 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 KEY EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH, DENTAL, VISION AND LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS AND KEY EMPLOYEES, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICER OR KEY EMPLOYEE IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN FOR THE OFFICER, THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN AND THE INSURANCE PREMIUMS PAID FOR THE BENEFIT OF THE OFFICER OR KEY EMPLOYEE. Form 990, Part VIII, Line 2 PATRONAGE DIVIDENDS 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 MODIFIED FOR ELECTRIC BORROWERS OF THE RURAL UTILITIES SERVICE(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 WILL BE 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 $7,162,753 LESS DIRECTORS FEES REPORTED ON 1099-MISC (248,800) LESS EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (173,906) PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,925,868 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 1,643,149 TOTAL WAGES ACCRUED AND/OR PAID $10,309,064 Form 990, Part IX, Line 24 ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: OFFICE SUPPLIES AND EXPENSE $118,710 OUTSIDE SERVICES EMPLOYED 406,607 INSURANCE 577,649 MAINTENANCE OF GENERAL PLANT 802,459 MISCELLANEOUS EXPENSE 343,247 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER FORM 990 $2,248,672 Form 990, Part IX, Line 24e ALL OTHER EXPENSES ARE COMPRISED OF THE FOLLOWING: TAXES - OTHER $1,072,100 POWER PRODUCTION 179,128 TRANSMISSION 523,824 AMORTIZATION 65,089 CUSTOMER SERVICE 1,010,981 OTHER DEDUCTIONS - EXTRAORDINARY ITEM RECLASSED 790,369 TOTAL OTHER EXPENSES PER FORM 990 $3,641,491 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. 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 BASIS 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 OLBIGATION 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 IS 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 XI, line 9: UNCLAIMED CAPITAL CREDITS 322,136. RETIREMENT OF PATRONAGE CAPITAL -2,973,376. REALLOCATION OF UNCLAIMED CAPITAL CREDIT RETIREMENTS 518,001. PATRONAGE CAPITAL ASSIGNABLE 4,310,821. Form 990, Part XII, Line 2c THE BOARD OF DIRECTORS HAVE ASSIGNED MEMBERS TO AN AUDIT COMMITTEE TO OVERSEE THE FINANCIAL STATEMENT AUDIT AND SELECT THE INDEPENDENT FINANCIAL STATEMENT AUDITOR.