2015-11-13T16:13:42-06:00 2014-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2014-01-01 880106922 MT WHEELER POWER INC MTWH 7752898981 PO BOX 151000 ELY NV 89315 RANDY EWELL GENERAL MANAGER/CEO 7752898981 2015-11-12 1 William M Miller P00439459 8067473806 2015-11-12 X 2014 2016-04-25 22:37:26Z RANDY EWELL PO BOX 151000 ELY NV 89315 33981104 0 X WWW.MWPOWER.NET X 1963 NV TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 9 9 38 0 254668 31281 0 0 33995098 33362393 176386 162392 353175 430317 34524659 33955102 16082 29319 733054 2308951 2829004 2984539 0 0 0 30946519 29009133 34524659 34331942 0 -376840 48654216 56795620 20735609 28022406 27918607 28773214 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 - 7,457 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 0 1 0 1 1 1 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 0 0 1 0 0 0 0 0 0 0 0 0 1 56 0 38 1 1 1 0 0 0 0 38650581 842042 0 X 9 9 1 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X RANDY EWELL 7752898981 1600 GREAT BASIN BLVD ELY NV 89301 X JERALD ANDERSON PRESIDENT 15.30 X X 13200 0 0 DON PHILLIPS VICE PRESIDENT 2.90 X X 8600 0 0 WILMA SANFORD SECRETARY 2.50 X X 10800 0 0 SANDRA GREEN TREASURER 5.10 X X 11100 0 0 BOB SWETICH DIRECTOR 1.50 X 8800 0 0 FRANK LEON DIRECTOR 1.40 X 8600 0 0 RICK HENDRIX DIRECTOR 4.00 X 10400 0 0 JERRY MORRILL DIRECTOR 1.60 X 8200 0 0 RON MILLER DIRECTOR 6.90 X 13800 0 0 RANDY EWELL GENERAL MANAGER/CEO 40.00 X 171640 0 48125 KEVIN ROBISON ASST GENERAL MANAGER 60.00 X 135781 0 44366 JESSE MURDOCK ENGINEERING MANAGER 40.00 X 114800 0 44016 BILL RICCI OPERATIONS MANAGER 40.00 X 115145 0 41968 JODI PINTAR FOREMAN/LINEMAN 45.00 X 102579 0 40465 733445 0 218940 5 0 1 0 CACHE VALLEY ELECTRIC PO BOX 405 LOGAN UT 84323 LINE CONSTRUCTION 1010423 EPC SERVICES COMPANY 3521 GABEL ROAD BILLINGS MT 59102 PROJECT MANAGEMENT 486165 ELECTRICAL CONSULTANTS INC 3521 GABEL ROAD BILLINGS MT 59102 SYSTEM ENGINEERING 461744 BASIN ENGINEERING 1070 E AULTMAN ST ELY NV 89301 SURVEYING 121790 OSMOSE UTILITIES SERVICES INC 980 ELLICOTT STREET BUFFALO NY 14209 POLE TESTING 119230 6 X ELECTRICITY SALES 221000 33241875 33241875 PATRONAGE DIVIDENDS 221000 120518 116934 3584 33362393 162705 43576 119129 3690 220752 0 0 3690 220752 224442 224442 313 -313 -313 -313 22423 25689 -3266 -1633 -1633 INTERNET SERVICE 519100 203365 203365 SECURITY SYSTEMS 561700 5776 5776 209141 33955102 33357176 254668 343258 X 22482 6837 2308951 493412 1573646 163233 612328 141920 946228 1871514 PURCHASED POWER 23415173 DISTRIBUTION EXPENSE 864268 ADMIN & GENERAL EXPENSE 661086 UBI TAX 29498 1221366 34331942 2652312 5798975 600000 0 729015 901112 4005054 5419177 87 3347 73119653 33242473 35574426 39877180 4928369 4620353 164953 175476 48654216 56795620 2448553 3199027 521126 610209 15841372 16617911 1924558 7595259 20735609 28022406 X 522813 593774 0 0 27395794 28179440 27918607 28773214 48654216 56795620 X -376840 1231447 X X 0 1 X 0 0 0 1 X 377801 377801 4723143 2159580 2563563 63758508 31082893 32675615 4260201 4260201 39877180 PATRONAGE CAPITAL - CFC 800754 C PATRONAGE CAPITAL - COOPERATIVE RESPONSE CENTER 5001 C PATRONAGE CAPITAL - NISC 17612 C PATRONAGE CAPITAL - NRTC 86927 C PATRONAGE CAPITAL - FEDERATED 93079 C PATRONAGE CAPITAL - DESERET GENERATION & TRANSMISSION 2815132 C CAPITAL TERM CERTIFICATES - CFC 604298 C INVESTMENT IN MEMBERSHIPS 12000 C ENERGY CONSERVATION LOANS 85550 C MEMBER CAPITAL SECURITIES - CFC 100000 C 4620353 CONSUMER DEPOSITS 493814 ACCRUED OTHER COMPENSATED ABSENCES 603198 OTHER CURRENT AND ACCRUED LIABILITIES 150412 DEFERRED CREDITS 6347835 7595259 X 33650266 0 33650266 304836 304836 33955102 31718155 0 31718155 2613787 2613787 34331942 Part IV, Line 2b: PURSUANT TO SECTION 81.507 OF THE NEVADA REVISED STATUTES CODE AND THE COOPERATIVE'S BYLAWS, THE COOPERATIVE CAN RETAIN ANY CAPITAL CREDIT OF A MEMBER, WHO IS RESIDENT OF NEVADA, WHICH REMAINED UNCLAIMED FOR A PERIOD OF ONE YEAR. THE COOPERATIVE HAS CHOSEN TO APPLY THESE UNCLAIMED PATRONAGE CAPITAL CREDITS TOWARDS GRANTS, SPONSORSHIPS AND DONATIONS TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA. UTAH MEMBER-RESIDENTS' UNCLAIMED CAPITAL CREDITS ARE ALSO HELD BY THE COOPERATIVE TO (A) ASSIST LOW-INCOME PERSONS TO PAY THEIR UTILITY BILLS, AND (B) TO PROVIDE SCHOLARSHIPS TO LOCAL GRADUATING HIGH SCHOOL SENIORS. IN THE STATE OF UTAH, PURSUANT TO UTAH'S UNIFORM AGRICULTURAL COOPERATIVE ASSOCIATION ACT (TITLE 3, CHAPTER 1, SECTION 11), THE COOPERATIVE CAN RETAIN CAPITAL CREDITS GIVEN TO ITS MEMBERS THAT REMAIN UNCLAIMED FOR A PERIOD OF THREE YEARS, BUT CAN ONLY APPLY THESE UNCLAIMED CAPITAL CREDITS TO UTILITY BILL ASSISTANCE OF LOW-INCOME PERSONS AND SCHOLARSHIPS FOR HIGH-SCHOOL SENIORS. 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 THEIR 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 4b - Other Adjustments: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 304,836. Part XII, Line 4b - Other Adjustments: EXPENSES RECORDED IN NON-OPERATING MARGINS RECLASSED TO EXPENSES 304,836. PATRONAGE CAPITAL ASSIGNABLE 2,308,951. 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. SCHEDULE D 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. 0 CHRISTMAS PRESENTS FOR LOCAL CHILDREN AND FAMILILES IN NEED; 32 FAMILIES SERVED INCLUDING 75 CHILDREN. 75 6837 SCHEDULE I, PART II 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 X X 0 0 0 RANDY EWELL GENERAL MANAGER/CEO 157097 0 0 0 14543 0 19320 0 28805 0 219765 0 0 0 KEVIN ROBISON ASST GENERAL MANAGER 125675 0 2150 0 7956 0 15600 0 28766 0 180147 0 0 0 JESSE MURDOCK ENGINEERING MANAGER 104955 0 2200 0 7645 0 13333 0 30683 0 158816 0 0 0 BILL RICCI OPERATIONS MANAGER 107209 0 2200 0 5736 0 13333 0 28635 0 157113 0 0 0 KAYSIE EWELL KAYSIE IS A FAMILY MEMBER OF GENERAL MANAGER 22872 KAYSIE IS AN EMPLOYEE OF THE COOPERATIVE. 0 0 Form 990, Part VI, Section A, line 2 A BUSINESS RELATIONSHIP EXISTS BETWEEN JERALD ANDERSON, BOARD PRESIDENT, AND RANDY EWELL, GENERAL MANAGER. BOTH INDIVIDUALS SERVE ON THE BOARDS OF DESERET GENERATION & TRANSMISSION 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. 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. 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 BOARD OF DIRECTORS AND OFFICERS ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY. THE BOARD OF 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. THE CONFLICT OF INTEREST POLICY IS REVIEWED ON AN ANNUAL BASIS. WHEN A CONTRACT OR BUSINESS TRANSACTION IS UNDER CONSIDERATION AND A DIRECTOR OR EMPLOYEE KNOWS THAT HE, SHE, OR A CLOSE RELATIVE HAS A FINANCIAL INTEREST, THIS INTEREST IS REQUIRED TO BE DISCLOSED FULLY TO THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS SHALL DECIDE IF SUCH AN INTEREST SHOULD PREVENT THE COOPERATIVE FROM ENTERING INTO A PARTICULAR TRANSACTION OR CONTRACT. Form 990, Part VI, Section B, line 15 THE BOARD OF DIRECTORS COMPARE COMPENSATION FROM OTHER COOPERATIVE'S FORMS 990 AND LOOK AT OTHER EXTERNAL WRITTEN CONTRACTS OF SIMILARLY SITUATED GENERAL MANAGERS AND OFFICERS, WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. A COMPENSATION SURVEY IS ALSO EMPLOYED THAT SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN NEVADA AND THE NATION. THE BOARD AND THE GENERAL MANAGER USE 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 NEVADA AND THE NATION. Form 990, Part VI, Section C, line 19 THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENT TO THE MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING. THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF THE AUDITED FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY, OR GOVERNING DOCUMENTS TO ANY MEMBER WHO SUBMITS A WRITTEN REQUEST, SUBJECT TO APPROVAL. 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 12% OF A PARTICIPATING EMPLOYEE'S SALARY. EMPLOYER CONTRIBUTIONS ARE AVAILABLE TO PARTICIPATING EMPLOYEES, INCLUDING OFFICERS AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH 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 AMOUNTS CONTRIBUTED TO THE 401(K) PENSION PLAN AND THE INSURANCE PREMIUMS PAID FOR THEIR BENEFIT. 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 ALTHOUGH THE COOPERATIVE IS NO LONGER A BORROWER OF THE RURAL UTILITIES SERVICE (RUS), THE ACCOUNTING RECORDS ARE MAINTAINED IN ACCORDANCE WITH THE UNIFORM SYSTEM OF ACCOUNTS AS PRESCRIBED FOR ELECTRIC BORROWERS OF THE 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 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 $2,067,058 LESS DIRECTORS FEES REPORTED ON 1099-MISC (93,500) LESS EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (92,491) PLUS SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGIN 37,811 PLUS SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 544,547 PLUS SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 534,112 TOTAL WAGES ACCRUED AND/OR PAID $2,997,537 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. OUTSIDE SERVICES EMPLOYED $144,436 INSURANCE 101,054 MAINTENANCE OF GENERAL PLANT 307,845 REGULATORY COMMISSION EXPENSE 945 MISCELLANEOUS GENERAL EXPENSE 106,806 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $661,086 Form 990, Part IX, Line 24e THE FOLLOWING IS A BREAKDOWN OF THE EXPENSES REPORTED AS OTHER EXPENSES ON FORM 990, PART IX, LINE 24E INTERNET EXPENSE 173,509 SECURITY SYSTEM EXPENSE 5,302 CUSTOMER SERVICE 449,518 SALES EXPENSE 43,171 TAX EXPENSE - OTHER 489,218 TRANSMISSION EXPENSE 60,648 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $1,221,366 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 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 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 OBLIGATION 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: NET CHANGE IN MEMBERSHIPS & OTHER EQUITY 70,962. PATRONAGE CAPITAL ASSIGNABLE 2,308,951. PATRONAGE CAPITAL RETIRED -1,148,466. Form 990, Part XII, Line 2c 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.