2015-08-17T11:02:22-05:00 2014-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2014-01-01 850036237 FARMERS ELECTRIC COOPERATIVE INC OF NEW MEXICO FARM 5757624466 PO BOX 550 CLOVIS NM 881020550 LANCE R ADKINS GENERAL MANAGER 5757624466 2015-08-13 1 William M Miller P00439459 8067473806 2015-08-13 2014 2016-04-25 22:37:26Z LANCE R ADKINS PO BOX 550 CLOVIS NM 881020550 38116789 0 X WWW.FECNM.ORG X 1937 NM TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 7 7 56 0 0 0 0 0 36726683 37075530 608733 1040290 10842 969 37346258 38116789 22724 11798 3019010 1574487 4373663 4478903 0 0 0 29930861 31313889 37346258 37379077 0 737712 103045396 107458275 63602775 65918339 39442621 41539936 TO PROVIDE ELECTRIC POWER TO RURAL AREAS AT COST TO MEMBERS ON A COOPERATIVE BASIS. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 12,428 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 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 1 48 0 56 1 0 0 0 0 0 38049023 1119725 0 X 7 7 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X X LANCE R ADKINS 5757624466 3701 NORTH THORNTON ST CLOVIS NM 881020550 X MICHAEL B WEST PRESIDENT 5.00 0.30 X X 3524 0 0 GEORGE DODGE JR VICE-PRESIDENT 2.50 0.30 X X 2224 0 0 ERNEST RILEY SECRETARY/TREASURER 11.00 0.30 X X 7077 0 0 JOHN PAT WOODS TRUSTEE 2.50 0.30 X 21589 0 0 PAUL QUINTANA TRUSTEE 4.80 0.30 X 4217 0 0 WILLIAM TATE TRUSTEE 2.20 0.30 X 22120 0 0 DONNIE BIDEGAIN TRUSTEE 4.30 0.30 X 3924 0 0 LANCE R ADKINS GENERAL MANAGER 50.00 X 132161 0 72497 THOMAS J MOORE DIRECTOR OF MEMBER SERVICES 44.00 X 86850 0 47263 SUZETTE HOWARD ACCOUNTING MANAGER 45.00 X 68350 0 30954 352036 0 150714 1 0 1 0 R & R LINE SERVICES 6022 QUAY ROAD SAN JON NM 88434 LINE CONSTRUCTION 812033 ARROWHEAD LINE LLC PO BOX 755 CANYON TX 79015 LINE CONSTRUCTION 663959 SGS ENGINEERING LLC 401 50TH STREET LUBBOCK TX 79404 ENGINEERING SERVICES 192347 3 X ELECTRIC SALES 221000 35466031 35466031 POWER SUPPLY REVENUE - WFEC 221000 1476488 1476488 PATRONAGE DIVIDENDS 221000 133011 133011 37075530 1040290 1040290 MISCELLANEOUS REVENUE 221000 969 969 969 38116789 37076499 0 1040290 X 11798 1574487 502750 2069346 608516 1091697 206594 2530132 2820414 PURCHASED POWER 22885966 DISTRIBUTION 1675696 CUSTOMER SERVICE 457591 ADMIN. & GENERAL 448195 495895 37379077 1960 515666 2314495 2199450 2807067 2881629 9122 10883 2809948 2733043 112575282 35436202 74978870 77139080 3505010 1929605 14812124 18835389 1806800 1213530 103045396 107458275 2014727 2248084 56206396 58215535 5381652 5454720 63602775 65918339 X 0 0 0 0 39442621 41539936 39442621 41539936 103045396 107458275 X 737712 1359603 X X 0 1 X 0 0 675901 675901 2672743 829716 1843027 104504796 34606486 69898310 4721842 4721842 77139080 CFC - MEDIUM TERM NOTES 11500000 C PATRONAGE CAPITAL - OTHERS 146319 C PATRONAGE CAPITAL - CFC 205058 C PATRONAGE CAPITAL - FEDERATED 169180 C PATRONAGE CAPITAL - WFEC 35310 C PATRONAGE CAPITAL - COBANK 4489 C CFC - CAPITAL TERM CERTIFICATES 769698 C INVESTMENTS IN OTHER ASSOCIATED ORGANIZATIONS 5386 C MEMBERSHIPS - OTHER 3710 C MEMBERSHIPS - WFEC 5996239 C 18835389 ACCRUED EMPLOYEE COMPENSATED ABSENCES 698921 OTHER CURRENT AND ACCRUED LIABILITIES 876244 CUSTOMER DEPOSITS AND PREPAYMENTS 168037 ADVANCES FOR CONSTRUCTION AND PREPAYMENTS 3711132 POWER COST OVERBILLED 386 5454720 X 37793190 0 37793190 323599 323599 38116789 35480991 0 35480991 1898086 1898086 37379077 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. Part XI, Line 4b - Other Adjustments: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSE ON FORM 990 1,652. EXPENSES NETTED WITH INVESTMENT INCOME RECLASSED TO EXPENSE ON FORM 990 321,947. Part XII, Line 4b - Other Adjustments: EXPENSES NETTED WITH INVESTMENT INCOME RECLASSED TO EXPENSE ON FORM 990 321,947. EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSE ON FORM 990 1,652. PATRONAGE CAPITAL ASSIGNABLE 1,574,487. SCHEDULE D, PART IX 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. Part XII, Line 4B PATRONAGE CAPITAL ASSIGNABLE FOR CURRENT YEAR - $1,574,487 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. 0 SCHEDULE I 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. X X 0 0 0 LANCE R ADKINS GENERAL MANAGER 109807 0 0 0 22354 0 46348 0 26149 0 204658 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. LANCE R. ADKINS ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 45,040 401(K) EMPLOYER MATCH 1,308 TOTAL COLUMN C: $ 46,348 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (45,040) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 38,525 EXPENSE TO COOPERATIVE $ 39,833 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 THE BOARD OF DIRECTORS DO NOT HAVE ANY COMMITTEES WITH AUTHORITY TO ACT ON BEHALF OF THE BOARD. FROM TIME TO TIME THE ENTIRE BOARD WILL GO INTO EXECUTIVE SESSION. WHEN THIS OCCURS MANAGEMENT AND THE PUBLIC ARE REMOVED FROM THE MEETING ROOM. ITEMS DISCUSSED IN EXECUTIVE SESSION ARE NOT DOCUMENTED. 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 THE FILING OF THE FORM 990. Form 990, Part VI, Section B, line 12c EACH TRUSTEE SHALL ANNUALLY SIGN A STATEMENT WHICH AFFIRMS SUCH PERSON: A. HAS RECEIVED A COPY OF THE CONFLICT OF INTEREST POLICY; B. HAS READ AND UNDERSTANDS THE POLICY; AND C. HAS AGREED TO COMPLY WITH THE POLICY. Form 990, Part VI, Section B, line 15 THE BOARD OF DIRECTORS USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN NEW MEXICO AND THE NATION. THE GENERAL MANAGER USES A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICERS AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT NEW MEXICO AND THE NATION. Form 990, Part VI, Section C, line 19 THE COOPERATIVE MAILS AN ANNUAL REPORT TO ALL MEMBERS. INCLUDED IN THE REPORT IS A COPY OF THE THE AUDITED BALANCE SHEET AND INCOME STATEMENT. THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF THE AUDITED FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY AND GOVERNING DOCUMENTS TO ANY MEMBER WHO MAKES A WRITTEN REQUEST FOR A COPY OF ANY SUCH DOCUMENT. THE MEMBER SHALL MAKE A REQUEST FOR INFORMATION AND/OR DOCUMENTS BY SUBMITTING A "MEMBER INFORMATION REQUEST" FORM. THIS PROCEDURE IS CONSISTENT WITH COOPERATIVE POLICY VII-1. FINALLY, THE BY-LAWS, FINANCIAL INFORMATION AND A COPY OF THE FORM 990 CAN BE FOUND ON THE COOPERATIVE'S WEBSITE WWW.FECNM.ORG. Form 990, Part VII THE BOARD OF DIRECTORS CONSIDERS THE GENERAL MANAGER TO BE BOTH THE TOP MANAGEMENT OFFICIAL AND THE TOP FINANCIAL OFFICIAL. THEREFORE, ONLY THE GENERAL MANAGER IS LISTED AS AN EMPLOYEE OFFICER. 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. 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, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICER IS COMPROMISED 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. 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 VIII, LINE 2 THE COOPERATIVE AND WESTERN FARMERS ELECTRIC COOPERATIVE (WFEC), A RURAL ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE, HAVE ENTERED INTO A WHOLESALE POWER CONTRACT WHERE WFEC WILL PROVIDE THE COOPERATIVE WITH ELECTRIC POWER. AS PART OF THE AGREEMENT THE COOPERATIVE MUST CONTRIBUTE EQUITY TO WFEC IN A MANNER AND AMOUNT SUCH THAT, AS OF JUNE 1, 2026, THE COOPERATIVE HAS CONTRIBUTED EQUITY TO WFEC COMPARABLE TO THE AMOUNT OF EQUITY CONTRIBUTED TO WFEC BY PRIOR EXISTING MEMBERS. THE PURPOSE OF THE CONTRIBUTION IS TO OBTAIN A POWER SUPPLY IN ORDER TO MEET THE TERMS OF THE WHOLESALE PURCHASE CONTRACT. PURUSANT TO APPROVAL BY THE NEW MEXICO PUBLIC REGULATION COMMISSION, THE EQUITY CONTRIBUTION IS RECOVERED MONTHLY FROM THE MEMBERS THROUGH THE SALE OF ELECTRICITY. 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 SEPARETLY 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 AMOUNTS REPORTED ON LINES 5-7 TO TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $2,572,096 LESS DIRECTORS FEES REPORTED ON 1099-MISC (64,675) LESS EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (150,714) PLUS SALARIES AND WAGES ALLOCATED TO NONOPERATING 1,009 PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 304,235 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED IDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 144,558 TOTAL WAGES ACCRUED AND OR PAID $2,806,509 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 OFFICE AND SUPPLIES $ 83,300 OUTSIDE SERVICES EMPLOYED 54,122 REGULATORY COMMISSION 181,235 DUPLICATE CHARGES (CREDIT) (25,099) DIRECTORS MILEAGE & EXPENSES 43,994 ASSOCIATION DUES 89,740 CAPITAL CREDIT EXPENSE 20,903 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $ 448,195 FORM 990, PART IX, LINE 4 THE FORM 990 INSTRUCTIONS SPECIFICALLY STATE THAT THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE MEMBERS (HEREINAFTER REFERRED TO AS PATRONS) 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 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 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 OLBIGATION 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 24 THE FOLLOWING IS A BREAKDOWN OF THE EXPENSES REPORTED AS OTHER EXPENSES ON FORM 990, PART IX, LINE 24 SALES 75,425 TRANSMISSION 96,871 MISCELLANEOUS GENERAL EXPENSE 323,599 TOTAL OTHER EXPENSES PER FORM 990, LINE 24 $ 495,895 Form 990, Part XI, line 9: UNREALIZED GAIN ON AVAILABLE FOR SALE SECURITIES 39,181. PATRONAGE CAPITAL RETIREMENTS -393,790. GAIN ON RETIRED CAPITAL CREDITS 139,725. PATRONAGE CAPITAL ASSIGNABLE 1,574,487. Form 990, Part XII Line 2C THE BOARD AS A WHOLE IS RESPONSIBLE FOR OVERSEEING THE AUDIT AND SOLICITING THE CPA WHO WILL PERFORM THE AUDIT. FARMERS ELECTRIC EDUCATION FOUNDATION PO BOX 550 CLOVIS NM 881020550 850348498 TO PROVIDE COLLEGE SCHOLARSHIPS TO ACTIVE MEMBERS AND THEIR FAMILY. NM 501(c)(3) PF FARMERS ELECTRIC COOPERATVIE INC 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 FARMERS ELECTIC EDUCATION FOUNDATION (AMOUNT LESS THAN 50000) O ESTIMATED EMPLOYEE HOURS X RATE