2025-11-17T23:28:29-06:00 2024-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2024-01-01 750458545 NAVARRO COUNTY ELECTRIC COOPERATIVE INC NAVA 9038747411 PO BOX 616 CORSICANA TX 75151 TRENA QUINN GENERAL MANAGER/CEO 9038747411 2025-11-12 1 0 WILLIAM M MILLER P11439459 8067473806 2025-11-11 X 2024 2025-03-06 01:10:19Z TRENA QUINN PO BOX 616 CORSICANA TX 75151 65585865 0 X WWW.NAVARROEC.COM X 1937 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS AT COST ON A COOPERATIVE BASIS. 7 7 49 0 0 0 0 0 68722937 64711122 681743 717624 760847 157119 70165527 65585865 565 0 3987419 1575425 4138198 4380443 0 0 0 62039345 59629997 70165527 65585865 0 0 117808267 118999631 42314950 43805730 75493317 75193901 TO PROVIDE ELECTRICITY TO OUR MEMBERS IN THE RURAL COMMUNITIES WE SERVE. 0 0 SALE OF ELECTRIC POWER TO OUR MEMBERS AT COST ON COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 20,262 ACTIVE SERVICES AT YEAR END. 0 0 0 0 0 0 0 1 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 37 0 49 1 0 0 0 0 0 67836589 876676 0 0 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 NAVARRO COUNTY ELECTRIC COOPERATIVE ACCOUNTING DEPARTMENT 9038747411 PO BOX 616 CORSICANA TX 75151 X BENNY MELTON DIRECTOR 2.00 X 37312 0 0 BILLY SOUTHARD DIRECTOR 2.00 X 36883 0 0 GARY MURPHY DIRECTOR 2.00 X 32882 0 0 GEORGE SMITH SECRETARY/TREASURER 2.00 X X 36334 0 0 JULIE MRAZ DIRECTOR 2.00 X 20058 0 0 ROBERT SHEFFIELD VICE PRESIDENT 2.00 X X 38904 0 0 RON BUCKLEY PRESIDENT 2.00 X X 38841 0 0 BILLY JONES GENERAL MANAGER/CEO (JAN) 40.00 X 59107 0 2872 COURTNEY SADBERRY GENERAL MANAGER/CEO 40.00 X 198324 0 54736 LINDY SHAW MANAGER OF ADMINISTRATION 40.00 X 184748 0 71923 MIKE LAWRENCE MANAGER OF CONSTRUCTION & OPERATIONS 40.00 X 147995 0 87753 BARBARA SIVILS MANAGER OF METER READERS 40.00 X 114692 0 45847 KIMBERLY DERDEN CFO 40.00 X 114692 0 12732 MARK RASH MANAGER OF MEMBER SERVICES 40.00 X 150056 0 50324 JERAD TAYLOR SUPERINTENDENT/SAFETY MANAGER 40.00 X 139979 0 30314 LARRY HARRISON LINEMAN 40.00 X 128037 0 48722 CLARENCE BARBER LINEMAN 40.00 X 127615 0 32014 MATTHEW CUNNINGHAM LINEMAN 40.00 X 127226 0 31165 ALBERT FISHER LINEMAN 40.00 X 124325 0 41994 1858010 0 510396 18 0 1 0 NORTHEAST SERVICE INC PO BOX 1185 KINNEDALE TX 76060 TREE TRIMMING 1746171 S&H POWERLINE CONSTRUCTION 725 BELLVIEW CRAWFORD TX 76638 LINE CONSTRUCTION 716559 PREMIER POWER LINE LLC 1006 W BROADWAY ST ANDREWS TX 79714 UTILITY CONSTRUCTION 437474 SOURCE POWER LLC PO BOX 691348 SAN ANTONIO TX 78269 UTILITY CONSTRUCTION 422588 OSMOSE UTILITIES SERVICES INC PO BOX 114284 ATLANTA GA 30368 POLE INSPECTION 304527 9 X SALES OF ELECTRICITY 221000 63893059 63893059 SERVICE FEES 221000 560844 560844 PATRONAGE DIVIDENDS 221000 257219 257219 64711122 717624 717624 POLE ATTACHMENT INCOME 221000 104398 104398 BOND SECURITIZATION P'SHIP INCOME 221000 49330 49330 MISCELLANEOUS REVENUE 221000 3391 3391 157119 65585865 64763843 0 822022 X 1575425 1537015 1956680 193495 342897 350356 1123596 3613890 PURCHASED POWER 49422304 DISTRIBUTION EXPENSE 3504370 ADMIN & GENERAL EXPENSE 1297281 CONSUMER EXPENSE 655204 13352 65585865 507758 758892 10801099 11506733 8362116 7676349 1201602 1130051 286326 276011 93380702 27339354 65082882 66041348 31256419 31463473 310065 146774 117808267 118999631 5898961 6242249 31374959 30061524 5041030 7501957 42314950 43805730 X 147525 151505 0 0 75345792 75042396 75493317 75193901 117808267 118999631 X 0 -299416 X X 0 1 X 0 0 0 1 X 363238 363238 2024645 1165035 859610 90744812 26174319 64570493 248007 248007 66041348 PATRONAGE CAPITAL - CFC 212590 C CAPITAL TERM CERTIFICATES - CFC 411035 C PATRONAGE CAPITAL - TEC 747366 C PATRONAGE CAPITAL - BRAZOS 27251040 C PATRONAGE CAPITAL - NISC 118581 C MEMBERSHIPS 1080 C OTHER INVESTMENTS 13693 C MEMBER CAPITAL SECURITIES - CFC 2000000 C INVESTMENT IN BOND SECURITIZATION P'SHIP 708088 C 31463473 ADVANCES FOR CONSTRUCTION 1277097 RETURNED CHECKS - ESCHEATABLE 921382 BRUSHIE SUBSTATION 2698431 SCHOLARSHIP RESTRICTED FUNDS 305758 OTHER DEFERRED CREDITS 42265 POWER COST OVER COLLECTED 2257024 7501957 X 65572513 0 65572513 13352 13352 65585865 63997088 0 63997088 1588777 1588777 65585865 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 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. PART X, LINE 2: THE COOPERATIVE UTILIZES 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 (IRS), OR OTHER STATE TAXING AUTHORITY AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XI, LINE 4B - OTHER ADJUSTMENTS: RECLASSIFY OTHER DEDUCTIONS TO PART IX, LINE 24E 13,352. PART XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 1,575,425. RECLASSIFY OTHER DEDUCTIONS TO PART IX, LINE 24E 13,352. 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. X X 0 0 0 LINDY SHAW MANAGER OF ADMINISTRATION 164240 0 2166 0 18342 0 50137 0 21786 0 256671 0 0 0 COURTNEY SADBERRY GENERAL MANAGER/CEO 192425 0 2098 0 3801 0 32551 0 22185 0 253060 0 0 0 MIKE LAWRENCE MANAGER OF CONSTRUCTION & OPERATIONS 139670 0 2166 0 6159 0 65219 0 22534 0 235748 0 0 0 MARK RASH MANAGER OF MEMBER SERVICES 140482 0 2166 0 7408 0 26885 0 23439 0 200380 0 0 0 LARRY HARRISON LINEMAN 124024 0 2166 0 1847 0 27130 0 21592 0 176759 0 0 0 JERAD TAYLOR SUPERINTENDENT/SAFETY MANAGER 129746 0 7166 0 3067 0 9449 0 20865 0 170293 0 0 0 ALBERT FISHER LINEMAN 120892 0 2166 0 1267 0 21960 0 20034 0 166319 0 0 0 BARBARA SIVILS MANAGER OF METER READERS 104499 0 2166 0 8027 0 22982 0 22865 0 160539 0 0 0 CLARENCE BARBER LINEMAN 124981 0 2166 0 468 0 11155 0 20859 0 159629 0 0 0 MATTHEW CUNNINGHAM LINEMAN 124148 0 2166 0 912 0 10524 0 20641 0 158391 0 0 0 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, YEARS OF SERVICE AND THE CURRENT INTEREST RATE ENVIRONMENT. 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 CONTRIBUTIONS TO THE PLAN IN LIEU OF THE ACTUARIAL INCREASE ARE EXPENSED IN THE FINANCIAL STATEMENTS. LINDY SHAW: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 50,137 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (50,137) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 33,774 EXPENSE TO THE COOPERATIVE $ 33,774 COURTNEY SADBERRY: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 32,551 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (32,551) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 40,438 EXPENSE TO THE COOPERATIVE $ 40,438 MIKE LAWRENCE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 65,219 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (65,219) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 28,886 EXPENSE TO THE COOPERATIVE $ 28,886 MARK RASH: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 26,885 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (26,885) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 28,886 EXPENSE TO THE COOPERATIVE $ 28,886 LARRY HARRISON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 27,130 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (27,130) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 20,336 EXPENSE TO THE COOPERATIVE $ 20,336 JERAD TAYLOR: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 9,449 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (9,449) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 25,553 EXPENSE TO THE COOPERATIVE $ 25,553 ALBERT FISHER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 21,960 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (21,960) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 20,336 EXPENSE TO THE COOPERATIVE $ 20,336 BARBARA SIVILS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 22,982 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (22,982) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,109 EXPENSE TO THE COOPERATIVE $ 21,109 CLARENCE BARBER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 11,155 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (11,155) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,288 EXPENSE TO THE COOPERATIVE $ 21,288 MATTHEW CUNNINGHAM: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 10,524 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (10,524) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,288 EXPENSE TO THE COOPERATIVE $ 21,288 FORM 990, PART VI, SECTION A, LINE 1A THE COOPERATIVE HAS 7 BOARD MEMBERS; ALL 7 ARE ALLOWED TO VOTE. 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 TRUSTEES. 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. DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS 4. AMENDMENT TO THE ARTICLES OF INCORPORATION FORM 990, PART VI, SECTION A, LINE 8B THE COOPERATIVE HAS NO COMMITTEES WITH AUTHORITY TO ACT ON BEHALF OF THE GOVERNING BODY. THEREFORE, AND PURSUANT TO FORM 990 INSTRUCTIONS, THE QUESTION HAS BEEN ANSWERED "NO". FORM 990, PART VI, SECTION B, LINE 11B MANAGEMENT PRESENTED A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION AND REVIEW 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 ONCE A CONFLICT OF INTEREST IS DETERMINED TO BE PRESENT, ALL ACTIONS GO THROUGH UPPER MANAGEMENT OR BOARD OF DIRECTORS APPROVAL. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE THE EXPERTISE OF A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE BOARD AND THE GENERAL MANAGER USE THE EXPERTISE OF A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEES, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILARLY SITUATED COOPERATIVES THROUGHOUT TEXAS 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. ANNUALLY, THE COOPERATIVE PROVIDES A COPY OF THE AUDITED BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE WITH THE ANNUAL REPORT. THE ANNUAL REPORT AND BYLAWS CAN ALSO BE FOUND ON THE COOPERATIVE'S WEBSITE: WWW.NAVARROEC.COM. FORM 990, PARTS VI & VII: THE COOPERATIVE ANNUALLY PROVIDES EACH EMPLOYEE OFFICER AND DIRECTOR WHO SERVED ON THE BOARD DURING THE YEAR A QUESTIONNAIRE. THE COMPLETED QUESTIONNAIRES ARE USED TO COMPLETE THE APPLICABLE QUESTIONS ON THE FORM 990 PERTAINING TO BUSINESS RELATIONSHIPS AMONG DIRECTORS, OFFICERS, AND KEY EMPLOYEES, AS WELL AS TO DETERMINE IF THERE ARE ANY TRANSACTIONS WHICH MUST BE REPORTED IN DETAIL ON SCHEDULE L - "TRANSACTIONS WITH INTERESTED PERSONS". IF THE COOPERATIVE WAS UNABLE TO OBTAIN A COMPLETED QUESTIONNAIRE, THE COOPERATIVE RELIED UPON THE COMPLETED INFORMATION FOR THE PRIOR YEAR. THE COOPERATIVE WAS UNABLE TO OBTAIN A COMPLETED QUESTIONNAIRE FOR EMPLOYEE OFFICERS BILLY JONES, COURTNEY SADBERRY, AND KIM DERDEN WHO ARE NO LONGER WITH THE COOPERATIVE. THEREFORE, THEIR PRIOR YEAR QUESTIONNAIRES WERE RELIED UPON WHILE PREPARING THE RETURN. THERE WERE NO KNOWN CHANGES FROM 2023 TO 2024. FORM 990, PART VII, COLUMN F: 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 ELIGIBLE EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN AND INSURANCE PAID ON BEHALF OF AND FOR THEIR BENEFIT. 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: ALTHOUGH THE COOPERATIVE IS NO LONGER AN RUS BORROWER, THE ACCOUNTING RECORDS ARE MAINTAINED IN ACCORDANCE WITH THE RURAL UTILITIES SERVICE (RUS) UNIFORM SYSTEM OF ACCOUNTS (USOA). THE USOA DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1-23. THE COOPERATIVE SEPARETLY 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 USOA. 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 $ 3,493,695 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (241,214) LESS: EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (326,187) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,086,234 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 85,888 TOTAL WAGES ACCRUED AND/OR PAID $ 4,098,416 FORM 990, PART IX, LINE 4: PURSUANT TO THE FORM 990 INSTRUCTIONS, THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE MEMBERS (HEREINAFTER REFERRED TO AS "PATRONS") 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 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. 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 2024 CALENDAR YEAR. BECAUSE PATRONAGE DIVIDENDS ARE 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 SUCH AMOUNTS AS AN EXPENSE FOR FORM 990 REPORTING. PATRONAGE DIVIDENDS ARE NOT AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, HOWEVER. FORM 990, PART IX, LINE 24C: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 668,232 OFFICE SUPPLIES 102,281 OUTSIDE SERVICES 421,747 INSURANCES 74,952 REGULATORY COMMISSION EXPENSE 99,716 MISCELLANEOUS GENERAL 218,300 EMPLOYEE BENEFITS 36,305 UTILITIES 71,480 DIRECTORS 308,488 ANNUAL MEETING 24,588 DUES AND SUBSCRIPTIONS 64,231 MAINTENANCE OF GENERAL PLANT 76,528 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 2,166,848 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (241,214) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (444,223) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (184,130) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 1,297,281 FORM 990, PART XI, LINE 9: NET CHANGE IN MEMBERSHIPS 3,980. PATRONAGE CAPITAL ASSIGNABLE 1,575,425. PATRONAGE CAPITAL RETIRED - TOTAL -1,878,821.