2023-11-06T16:12:25-06:00 2022-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2022-01-01 750263046 FARMERS ELECTRIC COOPERATIVE INC FARM 9034551715 2000 I-30 EAST GREENVILLE TX 75402 MARK STUBBS CEO/GENERAL MANAGER 9034551715 2023-10-26 1 MARK STUBBS 999009999 0 WILLIAM M MILLER P00439459 8067473806 2023-10-26 X 2 AAL1 IAL1 2022 2023-04-26 12:10:37Z MARK STUBBS 2000 I-30 EAST GREENVILLE TX 75402 223838513 0 X WWW.FARMERSELECTRIC.COOP X 1937 TX TO PROVIDE QUALITY ELECTRIC SERVICE TO MEMBER-OWNERS AT A REASONABLE COST. 9 9 191 0 10 0 0 0 162007065 222604716 94859 160724 3688915 1055914 165790839 223821354 18346 28533 15533312 18235475 13137876 13685560 0 0 0 133888326 187710533 162577860 219660101 3212979 4161253 380713687 432838169 211358407 244494947 169355280 188343222 TO PROVIDE QUALITY ELECTRIC SERVICE TO MEMBER-OWNERS AT A REASONABLE COST. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 88,070 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 1 0 1 0 0 0 0 1 0 0 0 0 0 0 1 1 0 0 1 24 0 191 1 0 0 0 0 0 222277596 5563592 0 0 0 X 9 9 0 0 1 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X KATHY SCROGGINS CFO 9034551715 2000 I-30 EAST GREENVILLE TX 75402 X MARTIN ALLAIN DIRECTOR 5.40 1.00 X 28062 0 0 WAYNE DOUGLAS DIRECTOR 3.60 1.00 X 27368 0 0 TOMMY PULLIAM VICE PRESIDENT 5.90 1.00 X X 29430 0 0 BOB MIDDLETON JR SECRETARY/TREASURER 6.50 1.00 X X 31402 0 0 DON PHILLIPS DIRECTOR 3.90 1.00 X 27378 0 0 BILL SAMUELS PRESIDENT 7.00 1.00 X X 28053 0 0 MARVIN FULLER DIRECTOR 6.30 1.00 X 28135 0 0 PAUL TALLANT DIRECTOR 5.10 1.00 X 29239 0 0 LARRY LANE JUNE-DEC DIRECTOR 2.90 1.00 X 17421 0 0 MARK STUBBS CEO/GENERAL MANAGER 55.00 1.00 X 571488 0 186588 KATHY SCROGGINS CFO/DIRECTOR OF FINANCE 48.00 X 276986 0 144386 BRIAN GREEN DIRECTOR OF ENGINEERING/OP 50.00 X 344521 0 157312 SAMANTHA CROUCH BAXTER GENERAL COUNSEL/SR DIRECTOR OF PS & ES 50.00 X 327016 0 112110 DAVID MARK LYLES DIRECTOR OF ADMINISTRATION 55.00 X 269462 0 126275 DAVID EARLS MANAGER OF OPERATIONS 60.00 X 177071 0 90600 ANTHONY GRANT MANAGER OF INFORMATION TEC 50.00 X 173653 0 100641 SHAUN CHRONISTER MANAGER OF ENGINEERING 50.00 X 160006 0 81776 MICHAEL HALE MANAGER OF POWER QUALITY 50.00 X 162019 0 88281 ROSA GARMON MANAGER OF MEMBER CARE 52.00 X 151284 0 90770 TABITHA BRYANT MGR OF HR & DEVELOPMENT 50.00 X 136480 0 53225 JAMES NIMMO MGR OF COMMUNICATIONS 50.00 X 135974 0 73511 MITCHELL KELLOGG LINE SUPERINTENDENT 53.00 X 134501 0 63969 CRAIG ANDERSON CREW FOREMAN 47.00 X 133327 0 50496 GARY GILES LINE SUPERINTENDENT 53.00 X 126830 0 81142 3527106 0 1501082 52 0 1 0 TEXAS LINE CLEARANCE LLC 617 EAST ST TEXARKANA AR 71854 ROW CONTRACTOR 3983145 J&L UTILITY SERVICE PO BOX 407 EDGEWOOD TX 75117 LINE AND ROW CONTRACTOR 3503251 PCI UTILITIES INC PO BOX 2967 MCKINNEY TX 75070 LINE CONTRACTOR 2721698 TEXAS STATE UTILITIES INC 3112 WICHITA CT FT WORTH TX 76140 LINE CONTRACTOR 2655040 RE-CON COMPANY 12 NE 52ND ST OKLAHOMA CITY OK 73105 SUBSTATION CONTRACTOR 2373414 19 X SALES OF ELECTRICITY 221000 200710392 200710392 SERVICE FEES 221000 13119173 13119173 PATRONAGE DIVIDENDS 221000 7174892 7174892 OTHER PROGRAM REVENUE 221000 882540 882540 TRANSMISSION WHEELING 221000 717719 717719 222604716 159990 159990 9500 0 9500 9500 9500 17878 17144 734 734 734 25 15 10 10 BOND SECURITIZATION P'SHIP INCOME 221000 789019 789019 POLE ATTACHMENT INCOME 221000 257385 257385 1046404 223821354 223394469 10 426875 X 28533 18235475 4038733 7134156 636281 1276749 599641 7589360 13469750 PURCHASED POWER 147935699 DISTRIBUTION EXPENSE 12795200 ADMIN & GENERAL EXPENSE 3878683 CONSUMER EXPENSE 1985750 56091 219660101 2790392 3001615 1047315 2486964 5715753 6605953 95296 119970 4703293 3614318 464336213 114527253 310983107 349808960 46312245 54194537 9066286 13005852 380713687 432838169 39911094 67669203 67952 81025 163238657 167561533 8140704 9183186 211358407 244494947 X 1236248 1346188 0 0 168119032 186997034 169355280 188343222 380713687 432838169 X 4161253 14826689 X X 0 1 X 1 0 0 1 X 3310638 3310638 10765197 4925154 5840043 419752162 109602099 310150063 30508216 30508216 349808960 PATRONAGE CAPITAL - CFC 1402656 C PATRONAGE CAPITAL - TEC 3166542 C PATRONAGE CAPITAL - RCEC 39999026 C PATRONAGE CAPITAL - NISC 252051 C PATRONAGE CAPITAL - CRC 35531 C PATRONAGE CAPITAL - COBANK 5225674 C PATRONAGE CAPITAL - NRTC 7371 C MEMBERSHIPS IN ASSOC. ORGANIZATIONS 13075 C CAPITAL TERM CERTIFICATES 969973 C MEMBER CAPITAL SECURITIES - CFC 1000000 C INVESTMENT IN BOND SECURITIZATION PARTNERSHIP 2122638 C 54194537 POST-RETIREMENT BENEFIT OBLIGATION 1611765 CONSUMER DEPOSITS 2270786 DEFERRED CREDITS - UNAMORTIZED GAIN ON REACQUIRED DEBT 87976 DEFERRED CREDITS - UNCLAIMED CAPITAL CREDITS 1631256 DEFERRED CREDITS - OTHER 199375 OTHER ACCRUED LIABILITIES 181580 ACCRUED OPERATING TAXES 3200448 9183186 X 223821354 0 223821354 0 223821354 201424626 0 201424626 18235475 18235475 219660101 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 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 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 XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 18,235,475. PART XII, LINE 4B: FOR THE AUDITED FINANCIAL STATEMENTS, THE AMOUNT OF PATRONAGE DIVIDENDS ALLOCATED OR TO BE 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". 0 HUNT COUNTY FAIR & LIVESTOCK SHOW PO BOX 1403 GREENVILLE TX 75403 745475100 501(C)(3) 6294 0 SUPPORT COMMUNITY YOUTH AT LIVESTOCK SHOW. RAINS COUNTY FAIR ASSOCIATION PO BOX 278 EMORY TX 75440 752195165 501(C)(3) 6495 0 SUPPORT COMMUNITY YOUTH AT LIVESTOCK SHOW. WYLIE SHOW & SALE PO BOX 1435 WYLIE TX 75098 831299389 501(C)(3) 6016 0 SUPPORT COMMUNITY YOUTH AT LIVESTOCK SHOW 3 PART II: ALL GRANTS, SPONSORSHIPS, AND/OR DONATIONS ARE MADE TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA, AND ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. X 1 1 X X X X 0 0 0 MARK STUBBS CEO/GENERAL MANAGER 485403 0 3400 0 82685 0 150062 0 36526 0 758076 0 0 0 BRIAN GREEN DIRECTOR OF ENGINEERING/OP 284438 0 10400 0 49683 0 123412 0 33900 0 501833 0 0 0 SAMANTHA CROUCH BAXTER GENERAL COUNSEL/SR DIRECTOR OF PS & 271332 0 10400 0 45284 0 79235 0 32875 0 439126 0 0 0 KATHY SCROGGINS CFO/DIRECTOR OF FINANCE 226891 0 10400 0 39695 0 111585 0 32801 0 421372 0 0 0 DAVID MARK LYLES DIRECTOR OF ADMINISTRATION 232141 0 10400 0 26921 0 111197 0 15078 0 395737 0 0 0 ANTHONY GRANT MANAGER OF INFORMATION TEC 155593 0 2650 0 15410 0 65895 0 34746 0 274294 0 0 0 DAVID EARLS MANAGER OF OPERATIONS 160266 0 1400 0 15405 0 60261 0 30339 0 267671 0 0 0 MICHAEL HALE MANAGER OF POWER QUALITY 135247 0 400 0 26372 0 53742 0 34539 0 250300 0 0 0 ROSA GARMON MANAGER OF MEMBER CARE 129152 0 3400 0 18732 0 63554 0 27216 0 242054 0 0 0 SHAUN CHRONISTER MANAGER OF ENGINEERING 156734 0 1400 0 1872 0 49807 0 31969 0 241782 0 0 0 JAMES NIMMO MGR OF COMMUNICATIONS 121688 0 1400 0 12886 0 40093 0 33418 0 209485 0 0 0 GARY GILES LINE SUPERINTENDENT 109711 0 650 0 16469 0 52616 0 28526 0 207972 0 0 0 MITCHELL KELLOGG LINE SUPERINTENDENT 113665 0 800 0 20036 0 32073 0 31896 0 198470 0 0 0 TABITHA BRYANT MGR OF HR & DEVELOPMENT 121110 0 1700 0 13670 0 23823 0 29402 0 189705 0 0 0 CRAIG ANDERSON CREW FOREMAN 131359 0 890 0 1078 0 26224 0 24272 0 183823 0 0 0 PART I, LINE 1A A MINIMUM AMOUNT OF COMPENSATION IS PROVIDED IN CONJUCTION WITH THE COOPERATIVE'S WELLNESS PROGRAM. THE COOPERATIVE WILL PAY UP TO $300 ANNUALLY TO A FITNESS CENTER ON BEHALF OF THE EMPLOYEE AND IS AVAILABLE TO ALL EMPLOYEES AND BOARD MEMBERS. 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. MARK STUBBS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 140,912 EMPLOYER CONTRIBUTION TO 401(K) PLAN 9,150 TOTAL REPORTED IN COLUMN C $ 150,062 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLANS (140,912) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 58,195 EXPENSE TO THE COOPERATIVE $ 67,345 BRIAN GREEN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 114,262 EMPLOYER CONTRIBUTION TO 401(K) PLAN 9,150 TOTAL REPORTED IN COLUMN C $ 123,412 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (114,262) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 53,595 EXPENSE TO THE COOPERATIVE $ 62,745 SAMANTHA CROUCH BAXTER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 70,085 EMPLOYER CONTRIBUTION TO 401(K) PLAN 9,150 TOTAL REPORTED IN COLUMN C $ 79,235 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (70,085) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 48,236 EXPENSE TO THE COOPERATIVE $ 57,386 KATHY SCROGGINS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 103,427 EMPLOYER CONTRIBUTION TO 401(K) PLAN 8,158 TOTAL REPORTED IN COLUMN C $ 111,585 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (103,427) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 42,876 EXPENSE TO THE COOPERATIVE $ 51,034 DAVID MARK LYLES: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 103,427 EMPLOYER CONTRIBUTION TO 401(K) PLAN 7,770 TOTAL REPORTED IN COLUMN C $ 111,197 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (103,427) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 42,876 EXPENSE TO THE COOPERATIVE $ 50,646 ANTHONY GRANT: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 60,561 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,334 TOTAL REPORTED IN COLUMN C $ 65,895 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (60,561) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 30,351 EXPENSE TO THE COOPERATIVE $ 35,685 DAVID EARLS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 55,060 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,201 TOTAL REPORTED IN COLUMN C $ 60,261 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (55,060) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 29,836 EXPENSE TO THE COOPERATIVE $ 35,037 MICHAEL HALE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 48,866 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,876 TOTAL REPORTED IN COLUMN C $ 53,742 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (48,866) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 27,098 EXPENSE TO THE COOPERATIVE $ 31,974 ROSA GARMON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 58,956 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,598 TOTAL REPORTED IN COLUMN C $ 63,554 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (58,956) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 25,371 EXPENSE TO THE COOPERATIVE $ 29,969 SHAUN CHRONISTER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 44,945 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,862 TOTAL REPORTED IN COLUMN C $ 49,807 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (44,945) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 30,035 EXPENSE TO THE COOPERATIVE $ 34,897 JAMES NIMMO: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 35,931 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,162 TOTAL REPORTED IN COLUMN C $ 40,093 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (35,931) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 23,852 EXPENSE TO THE COOPERATIVE $ 28,014 GARY GILES: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 48,710 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,906 TOTAL REPORTED IN COLUMN C $ 52,616 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (48,710) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,424 EXPENSE TO THE COOPERATIVE $ 25,330 MITCHELL KELLOGG: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 28,053 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,020 TOTAL REPORTED IN COLUMN C $ 32,073 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (28,053) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,302 EXPENSE TO THE COOPERATIVE $ 25,322 TABITHA BRYANT: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 19,728 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,095 TOTAL REPORTED IN COLUMN C $ 23,823 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (19,728) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,497 EXPENSE TO THE COOPERATIVE $ 25,592 CRAIG ANDERSON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 22,146 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,078 TOTAL REPORTED IN COLUMN C $ 26,224 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (22,146) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 18,625 EXPENSE TO THE COOPERATIVE $ 22,703 ANTHONY GRANT FAMILY RELATIONSHIP - KEY EMPLOYEE (ROSA GARMON) 173653 EMPLOYMENT 0 FORM 990, PART I, LINE 19: IN GENERAL, WHEN AN ELECTRIC COOPERATIVE BASES THE PATRONAGE DIVIDEND CALCULATION ON ITS NET BOOK INCOME/(LOSS), PAGE 1, PART I, LINE 19 - REVENUE LESS EXPENSES - WILL BE $0. FOR THE CURRENT YEAR, PAGE 1, PART I, LINE 19 REPORTS NET INCOME OF $4,161,253, WHICH IS THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE PLUS THE RETENTION OF NON-OPERATING MARGINS. THE GAAP BASIS FINANCIAL STATEMENTS INCLUDE AN ACCRUAL FOR UNBILLED REVENUE BECAUSE THE COOPERATIVE'S BILLING CYCLE DOES NOT END ON THE LAST DAY OF THE MONTH. THEREFORE, IT HAS REVENUE IN DECEMBER OF EACH YEAR THAT IT HAS EARNED BUT WILL NOT BILL UNTIL THE FIRST BILLING CYCLE OF THE FOLLOWING YEAR. THE COOPERATIVE ESTIMATES THIS REVENUE AND RECORDS IT AS ACCRUED UNBILLED REVENUE IN ORDER TO MATCH THE REVENUE WITH THE YEAR EARNED. HOWEVER, THE COOPERATIVE ALLOCATES THE REVENUE TO MEMBERS IN THE YEAR IT IS BILLED RATHER THAN WHEN ACCRUED. THIS TIMING DIFFERENCE IS FAIR AND EQUITABLE BECAUSE IT MATCHES THE PATRONAGE DIVIDEND ALLOCATED WITH THE BILLING RECORDS USED TO ALLOCATE THE MARGINS. DUE TO THE TIMING OF WHEN THE COOPERATIVE ALLOCATES ACCRUED UNBILLED REVENUE, PAGE 1, PART I, LINE 19 ANNUALLY REPORTS NET INCOME/(LOSS) AS FOLLOWS: 1) NET INCREASE/(DECREASE) IN ACCRUED UNBILLED REVENUE PLUS 2) NON-OPERATING MARGINS TRANSFERRED TO OTHER EQUITIES FOR OFSETTING PRIOR YEAR UNALLOCATED LOSSES. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: ADD: UNBILLED REVENUE 12/31/22 $ 11,479,000 LESS: UNBILLED REVENUE 12/31/21 (8,271,000) NET INCREASE IN ACCRUED UNBILLED REVENUE $ 3,208,000 ADD: NON-OPERATING MARGINS RETAINED FOR LOSS OFFSET 953,253 (A) - NET INCOME ON PAGE, 1, PART I, LINE 19 $ 4,161,253 (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $ 18,235,475 TOTAL 2022 NET MARGIN (A + B) $ 22,396,728 FORM 990, PART VI, SECTION A, LINE 4 DURING 2022, THE COOPERATIVE MADE AMENDMENTS TO ITS BYLAWS. THESE INCLUDED: ARTICLE III, MEETINGS OF MEMBERS, SECTIONS 3.06, QUALIFICATIONS AND ELECTION COMMITTEE, HAS BEEN REVISED TO SAY, "THE BOARD OF DIRECTORS SHALL, NOT EARLIER THAN - ONE HUNDRED EIGHTY (180) DAYS AND NOT LATER THAN NINETY (90) DAYS BEFORE ANY MEETING OF THE MEMBERS AT WHICH ELECTION RESULTS ARE TO BE ANNOUNCED, APPOINT A QUALIFICATIONS AND ELECTION COMMITTEE." ARTICLE III, MEETINGS OF MEMBERS, SECTION 3.08, MEMBER ACTION WITHOUT A MEMBER MEETING, WAS AMENDED TO SAY, "EXCEPT AS OTHERWISE PROVIDED IN THESE BYLAWS, MEMBERS MAY NOT ACT IN THE ABSENCE OF A MEETING OF THE MEMBERS." ARTICLE IV, DIRECTORS, SECTION 4.02, QUALIFICATIONS, HAS BEEN REVISED IN PART (A) TO SAY, "BE A NATURAL PERSON." IT HAS ALSO BEEN REVISED IN PART (E) TO SAY, "WHILE A DIRECTOR AND DURING THE THREE (3) YEARS IMMEDIATELY PRIOR TO BECOMING A DIRECTOR, NOT BE A PARTY OR HAVE A CLOSE RELATIVE WHO IS A PARTY IN A MEDIATION, ARBITRATION, LAWSUIT, OR OTHER LEGAL PROCEEDING OR ACTION AGAINST OR INVOLVING THE COOPERATIVE;" IT HAS ALSO BEEN REVISED IN PART (F) TO SAY, "WHILE A DIRECTOR AND DURING THE THREE (3) YEARS IMMEDIATELY PRIOR TO BECOMING A DIRECTOR, NOT BE EMPLOYED BY, CONTROL, OWN MORE THAN TEN (10) PERCENT OF, SERVE AS A DIRECTOR OR OFFICER OF, OR RECEIVE MORE THAN TEN (10) PERCENT OF ANNUAL GROSS INCOME OR HAVE A CLOSE RELATIVE WHO IS EMPLOYED BY, CONTROLS, OWNS MORE THAN TEN (10) PERCENT OF, SERVES AS A DIRECTOR OR OFFICER OF, OR RECEIVES MORE THAN TEN (10) PERCENT OF ANNUAL GROSS INCOME FROM AN ENTITY THAT: (I) ADVANCES THE ENTITY'S PECUNIARY INTEREST BY PROVIDING A GOOD OR SERVICE SIMILAR TO A GOOD OR SERVICE PROVIDED BY THE COOPERATIVE WITHIN THE SAME GEOGRAPHIC AREA AS THE COOPERATIVE; OR (II) IS A PARTY IN A MEDIATION, ARBITRATION, LAWSUIT, OR OTHER LEGAL PROCEEDING OR ACTION AGAINST OR INVOLVING THE COOPERATIVE; OR (III) RECEIVES MORE THAN TEN (10) PERCENT OF ITS ANNUAL GROSS INCOME DIRECTLY OR INDIRECTLY FROM THE COOPERATIVE;" ARTICLE IV, DIRECTORS, SECTION 4.05, DIRECTORATE DISTRICTS, WAS AMENDED FOR DISTRIC ONE TO SAY, "HOPKINS COUNTY SERVICE AREA WEST OF STATE HIGHWAY 154 AND NORTH OF FARM TO MARKET ROAD 1567; DELTA COUNTY SERVICE AREA WEST OF STATE HIGHWAY 19; HUNT COUNTY SERVICE AREA NORTH OF FARM TO MARKET ROAD 1567 AND NORTHEAST OF STATE HIGHWAY 69; FANNIN COUNTY SERVICE AREA." IT WAS ALSO AMENDED FOR DISTRICT TWO TO SAY, "HOPKINS COUNTY SERVICE AREA SOUTH OF FARM TO MARKET ROAD 1567 AND WEST OF STATE HIGHWAY 154; HUNT COUNTY SERVICE AREA SOUTH OF FARM TO MARKET ROAD 1567, EAST OF STATE HIGHWAY 36, NORTH OF STATE HIGHWAY 276, SOUTH OF INTERSTATE 30, AND SOUTHWEST OF STATE HIGHWAY 69; RAINS COUNTY SERVICE AREA NORTHEAST OF STATE HIGHWAY 69; WOOD COUNTY SERVICE AREA WEST OF STATE HIGHWAY 154." IT WAS ALSO AMENDED FOR DISTRICT THREE TO SAY, "ROCKWALL COUNTY SERVICE AREA NORTH OF INTERSTATE 30, WEST OF FARM TO MARKET ROAD 548, AND NORTH OF STATE HIGHWAY 66; ROCKWALL COUNTY SERVICE AREA SOUTH OF INTERSTATE 30, NORTH OF FARM TO MARKET ROAD 550, WEST OF FARM TO MARKET ROAD 548, AND SOUTH OF STATE HIGHWAY 276 AND EAST OF STATE HIGHWAY 205; HUNT COUNTY SERVICE AREA SOUTH OF STATE HIGHWAY 276 AND WEST OF FARM TO MARKET ROAD 1565; AND KAUFMAN COUNTY SERVICE AREA EAST OF COUNTY ROAD 245 AND WEST OF COUNTY ROAD 331." IT WAS ALSO AMENDED FOR DISTRICT FOUR TO SAY, "COLLIN COUNTY SERVICE AREA EAST OF MCCREARY ROAD, NORTH OF FARM TO MARKET ROAD 544, NORTH OF STATE HIGHWAY 78, EAST OF STATE HIGHWAY 205, WEST OF FARM TO MARKET ROAD 1138, AND NORTH OF FARM TO MARKET ROADS 1778 AND 547." IT WAS ALSO AMENDED FOR DISTRICT FIVE TO SAY, "HOPKINS COUNTY SERVICE AREA EAST OF STATE HIGHWAY 154; DELTA COUNTY SERVICE AREA EAST OF STATE HIGHWAY 19; FRANKLIN COUNTY SERVICE AREA; WOOD COUNTY SERVICE AREA EAST OF STATE HIGHWAY 154." IT WAS ALSO AMENDED FOR DISTRICT SIX TO SAY, "ROCKWALL COUNTY SERVICE AREA EAST OF FARM TO MARKET ROAD 548, NORTH OF STATE HIGHWAY 276 AND SOUTH OF STATE HIGHWAY 66; COLLIN COUNTY SERVICE AREA EAST OF FARM TO MARKET ROAD 1138 AND SOUTH OF FARM TO MARKET ROADS 1778 AND 547; HUNT COUNTY SERVICE AREA SOUTH OF INTERSTATE 30, NORTH OF STATE HIGHWAY 276, AND WEST OF FARM TO MARKET ROAD 36; HUNT COUNTY SERVICE AREA NORTH OF INTERSTATE 30, WEST OF STATE HIGHWAY 34." IT WAS ALSO AMENDED FOR DISTRICT SEVEN TO SAY, "COLLIN COUNTY SERVICE AREA WEST OF MCCREARY ROAD, SOUTH OF FARM TO MARKET ROAD 544, SOUTH OF STATE HIGHWAY 78 AND WEST OF STATE HIGHWAY 205; ROCKWALL COUNTY SERVICE AREA WEST OF LAKE RAY HUBBARD; DALLAS COUNTY SERVICE AREA NORTH OF INTERSTATE 30." IT WAS ALSO AMENDED FOR DISTRICT EIGHT TO SAY, "KAUFMAN COUNTY SERVICE AREA WEST OF COUNTY ROAD 245; ROCKWALL COUNTY SERVICE AREA SOUTH OF FARM TO MARKET ROAD 550 AND WEST OF STATE HIGHWAY 205; AND DALLAS COUNTY SERVICE AREA SOUTH OF INTERSTATE 30." IT WAS ALSO AMENDED FOR DISTRICT NINE TO SAY, "HUNT COUNTY SERVICE AREA EAST OF FARM TO MARKET ROAD 1565 AND SOUTH OF STATE HIGHWAY 276; RAINS COUNTY SERVICE AREA SOUTHWEST OF STATE HIGHWAY 69; KAUFMAN COUNTY SERVICE AREA EAST OF COUNTY ROAD 331; VAN ZANDT COUNTY SERVICE AREA." ARTICLE IV, DIRECTORS, SECTION 4.09, VACANCIES, WAS REVISED TO SAY, "EXCEPT IN INSTANCES OF ALTERATIONS FOR THAT DIRECTORATE DISTRICT BOUNDARIES CONTEMPORANEOUSLY WITH THE VACANCY, SUCH DIRECTOR SHALL BE FROM OR WITH RESPECT TO THE SAME DIRECTORATE DISTRICT AS WAS THE DIRECTOR WHOSE OFFICE WAS VACATED." ARTICLE IV, DIRECTORS, SECTION 4.10, COMPENSATION; EXPENSES, WAS AMENDED TO SAY, "A DIRECTOR IS NOT AN EMPLOYEE OF THE COOPERATIVE." ARTICLE IV, DIRECTORS, SECTION 4.13, "CLOSE RELATIVE" DEFINED, WAS REVISED TO SAY, "AS USED IN THESE BYLAWS, "CLOSE RELATIVE" MEANS A PERSON WHO (A) BY BLOOD OR IN LAW, INCLUDING HALF, FOSTER, STEP AND ADOPTIVE KIN, IS A SPOUSE, CHILD, GRANDCHILD, PARENT, GRANDPARENT, BROTHER, SISTER, AUNT, UNCLE, NEPHEW OR NIECE OF THE PRINCIPAL OR (B) RESIDES IN THE SAME RESIDENCE." ARTICLE V, MEETINGS OF DIRECTORS, SECTION 5.02, SPECIAL MEETINGS, WAS AMENDED TO SAY, "SPECIAL MEETINGS, UPON PROPER NOTICE AS OTHERWISE PROVIDED IN SECTION 5.03, MAY ALSO BE HELD VIA TELEPHONE CONFERENCE CALL OR OTHER ELECTRONIC MEANS, WITHOUT REGARD TO THE ACTUAL LOCATION OF THE DIRECTORS AT THE TIME OF SUCH MEETING, IF ALL THE DIRECTORS CONSENT THERETO." ARTICLE V, MEETINGS OF DIRECTORS, SECTION 5.045, COMMITTEES, WAS AMENDED TO SAY, "THE BOARD MAY CREATE A COMMITTEE OF THE BOARD AND APPOINT DIRECTORS TO SERVE ON THE BOARD COMMITTEE. A BOARD COMMITTEE MUST CONSIST OF TWO OR MORE DIRECTORS AND SERVES AT THE BOARD'S DISCRETION. (A) CREATION AND APPOINTMENT OF COMMITTEES. THE CREATION OF A BOARD COMMITTEE MAY BE ACCOMPLISHED BY ACTION OF (1) A MAJORITY OF DIRECTORS CURRENTLY IN OFFICE OR (2) THE PRESIDENT OF THE BOARD. (B) COMMITTEE AUTHORITY. THE BOARD MAY NOT AUTHORIZE A BOARD COMMITTEE TO EXERCISE BOARD AUTHORITY." ARTICLE VI, OFFICERS, MISCELLANEOUS, SECTION 6.06, VICE PRESIDENT, WAS REVISED TO SAY, "IN THE ABSENCE OF THE PRESIDENT, OR IN THE EVENT OF HIS OR HER DEATH, DISABILITY, INABILITY OR REFUSAL TO ACT, THE VICE PRESIDENT SHALL PERFORM THE DUTIES OF THE PRESIDENT." 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 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 HAVE THE ABILITY TO ELECT THE COOPERATIVE'S NINE MEMBER BOARD OF DIRECTORS. THE DIRECTORS ARE ELECTED "AT LARGE" AT THE ANNUAL MEETING AND SERVE STAGGERED, THREE YEAR TERMS SO THAT EACH YEAR THREE DIRECTORS ARE ELECTED. DIRECTORS ARE NOMINATED BY A NOMINATING COMMITTEE OR BY NOMINATING PETITION FROM EACH OF THE NINE DIRECTOR DISTRICTS. 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 WITH ANOTHER COOPERATIVE 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 OF DIRECTORS FOR DISCUSSION, REVIEW AND APPROVAL PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C CONFLICTS OF INTEREST INVOLVING DIRECTORS, OFFICERS, AND EMPLOYEES ARE COVERED BY BOTH BOARD AND EMPLOYEE COOPERATIVE POLICIES. THE BOARD OF DIRECTORS REVIEW AND ENFORCE CONFLICTS OF INTEREST INVOLVING DIRECTORS AND THE GENERAL MANAGER. THE GENERAL MANAGER REVIEWS AND ENFORCES CONFLICTS OF INTEREST ARISING FROM EMPLOYEES. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE PROFESSIONAL SALARY SURVEYS AND COMPENSATION EXPERTS FROM THE NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION AND A COMPARISON OF FORMS 990 OF SIMILARLY SITUATED ELECTRIC COOPERATIVES TO DETERMINE THE COMPENSATION (PAY AND BENEFITS) OF THE CEO/GENERAL MANAGER. THE BOARD STRIVES TO HIRE AND RETAIN A MANAGEMENT TEAM THAT IS EXPERIENCED IN THE INDUSTRY AND THE BEST FIT FOR THE COOPERATIVE. THE BOARD PLACES IMPORTANCE ON LONGEVITY AND EXPERIENCE. IT BELIEVES THAT THE RECRUITMENT AND RETENTION OF ALL COMPETENT EMPLOYEES IS CRITICAL TO THE LONG-TERM SUCCESS AND STABILITY OF THE COOPERATIVE. THEREFORE, THE BOARD ATTEMPTS TO MAINTAIN A COMPENSATION STRUCTURE FOR THE CEO/GENERAL MANAGER AND MANAGEMENT LEVEL STAFF THAT IS IN THE THIRD QUARTILE AMONG INDUSTRY PEERS, WHERE APPROPRIATE. THE BOARD ALSO ANNUALLY REVIEWS THE PERFORMANCE OF THE CEO/GENERAL MANAGER. AS PART OF ITS PERFORMANCE REVIEW, THE BOARD TAKES INTO CONSIDERATION THE EMPLOYMENT MARKET, EXPERIENCE OF THE CEO/GENERAL MANAGER, STABILITY OF THE BASE RATES, EMPLOYEE/LABOR RELATIONS, STABILITY AND COST EFFECTIVENESS OF THE WHOLESALE POWER SUPPLY AGREEMENT BY PARTICIPATION ON THE BOARD OF THE RESPECTIVE GENERATION & TRANSMISSION COOPERATIVE, AND INVOLVEMENT AND LEADERSHIP WITHIN THE ELECTRIC UTILITY COOPERATIVE INDUSTRY. THE CEO/GENERAL MANAGER ALSO PROVIDES AN ANNUAL SELF-EVALUATION AND LIST OF ACCOMPLISHMENTS ACHIEVED BY THE COOPERATIVE DURING THE PRIOR YEAR(S). KEY AREAS INCLUDE MEMBER COMMUNICATIONS, OPERATIONS, ELECTRIC UTILITY PLANT CONSTRUCTION, METER GROWTH, RATES, FINANCE, HUMAN RESOURCES, RETIREMENT OF PATRONAGE CAPITAL, PARTICIPATION ON BOARD OF OTHER INDUSTRY RELATED ORGANIZATIONS, AND IMPACT TO WHOLESALE POWER COSTS THROUGH PARTICIPATION ON THE BOARD OF THE COOPERATIVE'S WHOLESALE POWER SUPPLIER COOPERATIVE. KEY ACCOMPLISHMENTS INCLUDE, LOW TURNOVER OF EMPLOYEES, AN ONGOING EQUITY MANAGEMENT PLAN FOR CONSISTENTLY RETIRING PATRONAGE CAPITAL, A DECREASE IN POWER COST, AND NO CHANGE IN THE BASE ELECTRIC RATE SINCE 2007. THE CEO/GENERAL MANAGER USES THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT, A COMPENSATION SURVEY, AND COMPARES COMPENSATION REPORTED ON OTHER COOPERATIVES' IRS FORMS 990 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 COOPERATIVE DOCUMENTS ARE MADE AVAILABLE UPON REQUEST OF MEMBERS, AFTER REVIEW ACCORDING TO COOPERATIVE POLICY. THE COOPERATIVE'S ANNUAL FINANCIAL STATEMENTS ARE ALSO PROVIDED TO THE MEMBERS DURING THE ANNUAL MEETING. 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. EMPLOYER CONTRIBUTIONS TO THE PLAN ARE MADE PURSUANT TO THE PLAN DOCUMENT. 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, KEY EMPLOYEES 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, KEY EMPLOYEES AND HIGHLY COMPENSATED EMPLOYEES ARE COMPRISED OF ACTUARIAL INCREASES IN THE DEFINED BENEFIT PLAN, THE TOTAL AMOUNT CONTRIBUTED BY THE COOPERATIVE TO THE DEFINED CONTRIBUTION PLAN AND INSURANCE PAID ON BEHALF OF AND FOR THEIR BENEFIT. IN ADDITION TO THE ABOVE, THE COOPERATIVE ALSO PROVIDES POST-RETIREMENT HEALTH INSURANCE BENEFITS THROUGH AN UNFUNDED WELFARE BENEFIT PLAN. THE VALUE OF THESE BENEFITS HAS NOT BEEN ESTIMATED. 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 RURAL UTILITIES SERVICE (RUS) BORROWER, THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE RUS UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED FOR ELECTRIC BORROWERS OF RUS. THE USOA 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 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 $11,172,889 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (246,488) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (330,974) LESS: KEY EMPLOYEE BENEFITS REPROTED IN LINE 5 (847,765) PLUS: SALARIES AND WAGES ALLOCATED TO PURCHASED POWER 471,364 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 4,992,622 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSES INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 150,433 TOTAL WAGES ACCRUED AND OR PAID $15,362,081 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 2,137,961 OFFICE SUPPLIES 112,941 SALES 593,110 DIRECTORS 301,673 ASSOCIATED DUES 118,878 PENSIONS & BENEFITS 729,963 BANK CHARGES 677,438 MISCELLANEOUS GENERAL 2,023,408 UTILITY COMMISSION 378,280 MAINTENANCE OF GENERAL PLANT 658,994 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 7,732,646 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (246,488) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (2,616,570) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (990,905) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 3,878,683 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 2022 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 XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 18,235,475. PATRONAGE CAPITAL RETIRED - TOTAL -6,006,356. PATRONAGE CAPITAL RETIRED - DISCOUNT 2,487,630. NET CHANGE IN MEMBERSHIPS 109,940. FORM 990,PART XII, LINE 2C: THE BOARD OF DIRECTORS HAVE APPOINTED AN AUDIT COMMITTEE TO OVERSEE THE FINANCIAL STATEMENT AUDIT AND SELECT THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. PROCEDURAL CHANGES DID NOT OCCUR DURING THE YEAR. FARMERS ELECTRIC CHARITABLE FOUNDATION 2000 I-30 E GREENVILLE TX 75402 260749479 CHARITABLE TX 501(C)3 LINE 7 FARMERS ELECTRIC COOPERATIVE TX 1 MULTI-SERVICE UTILITIES INC 2000 I-30 EAST GREENVILLE TX 754029084 752718501 INACTIVE TX FARMERS ELECTRIC COOPERATIVE INC C 1.00000 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 1 FARMERS ELECTRIC CHARITABLE FOUNDATION N N/A - LESS THAN $50,000 FARMERS ELECTRIC CHARITABLE FOUNDATION O N/A - LESS THAN $50,000 FARMERS ELECTRIC CHARITABLE FOUNDATION S 99296 CASH RECEIVED