2025-10-16T10:13:27-07:00 2024-12-31 990 2024-01-01 750384046 LAMAR COUNTY ELECTRIC COOPERATIVE ASSOCIATION LAMA 9037844303 PO Box 68 Blossom TX 754160068 BRYAN STORY GENERAL MANAGER AND CEO 9037834903 2025-09-25 1 2024 2025-03-06 01:10:19Z LAMAR ELECTRIC COOPERATIVE Bryan Story PO Box 68 Blossom TX 754160068 37205639 0 X www.lamarelectric.coop X 1938 TX LAMAR ELECTRIC COOPERATIVE PROVIDES QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 9 9 45 0 -24784 0 0 0 36141250 35830607 141003 865009 141758 461656 36424011 37157272 8000 6000 478388 2032305 3579407 3844793 0 0 0 32366216 31280174 36432011 37163272 -8000 -6000 60763330 78378702 31867060 47712026 28896270 30666676 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 - 13,739 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 0 0 0 0 1 0 1 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 43 0 1 45 1 0 0 0 0 0 34820050 1217561 0 0 0 X 9 9 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 0 1 1 0 TX X X BRYAN STORY 9037844303 PO Box 68 Blossom TX 754160068 X BRYAN STORY CHIEF EXECUTIVE OFFICER 40 0 X 200114 0 59919 JEFFREY S SANSOM OPERATIONS MANAGER 40 0 X 150735 0 80195 WILL ARMSTRONG WORKING FOREMAN 40 0 X 114361 0 90152 RONNIE BRIDGES WORKING FOREMAN 40 0 X 114574 0 71048 DREW CONDER RIGHT-OF-WAY SUPERINTENDENT 40 0 X 117415 0 52818 RYAN DEAN ENGINEERING AND TRANSMISSION TECHNICIAN 40 0 X 123140 0 18140 GEORGE M WOOD PRESIDENT 1.55 0 X 9600 0 598 JEREMY HAMIL DIRECTOR 1.18 0 X 9000 0 598 LYLE D YODER VICE PRESIDENT 1.18 0 X 9000 0 598 RON E TIPPIT DIRECTOR 1.45 0 X 8400 0 598 JAMES FLOYD DIRECTOR 1.45 0 X 8400 0 598 BARBARA GOLDEN DIRECTOR 1.32 0 X 8400 0 598 MATTHEW ALBUS DIRECTOR 1.1 0 X 7800 0 598 MICHAEL WILLIAMS SECRETARY/TREASURER 1.3 0 X 7200 0 598 JOSH HOSTETLER DIRECTOR 1.04 0 X 7200 0 498 895339 0 377554 6 0 1 0 BREXAN LLC 102 N COLLEGE AVE SUITE 610 TYLER TX 75702 UTILITY CONSTRUCTION 1569556 J & J PROFESSIONAL TREE SERVICES MARIA VILLANUEVA 5340 DALLAS AVE FORT WORTH TX 76112 RIGHT-OF-WAY MAINTENANCE 384418 ELECTRIC POWER ENGINEERS 5301 SOUTHWEST PKWY SUITE 150 AUSTIN TX 78735 ENGINEERING FIRM 360162 PLATINUM LAND AND DIRT SERVICES 6330 OLSON LANE PASADENA TX 77505 ROW CONTRACTOR 328800 WITHERS CONSTRUCTION CODY WITHERS 1202 COUNTY ROAD 44850 BLOSSOM TX 75416 RIGHT OF WAY CONTRACTOR 1235326 5 X 0 35830607 35830607 0 0 35830607 447367 0 0 447367 0 0 0 0 0 0 0 0 23583 53440 48367 0 -24784 53440 28656 0 -24784 53440 0 417642 0 0 0 417642 417642 0 0 417642 16058 0 16058 0 0 16058 Extraordinary Income 221120 416942 416942 0 0 0 0 0 0 416942 37157272 36247549 -24784 934507 X 0 6000 0 2032305 1056407 0 1685606 380584 593014 129182 1422273 3121113 Purchased Power 21197951 Distribution Expense 3975501 Admin & General Expenses 1085702 Customer Accounts Expense 239755 237879 37163272 0 0 0 24469 1413096 0 0 0 0 2785529 3469815 0 0 0 0 0 0 68845 85768 390268 385481 98699599 39977872 54954966 58721727 0 0 2539253 14302815 0 0 60763330 78378702 2024945 3076177 0 0 32119 9585274 0 0 0 0 0 0 24933787 31625988 0 0 4876209 3424587 31867060 47712026 X 242310 246935 0 0 28653960 30419741 28896270 30666676 60763330 78378702 X -6000 0 0 0 0 1776406 X X 0 1 X 1 0 1198273 0 1198273 8292560 0 1090760 7201800 0 0 0 0 85113242 0 38887112 46226130 4095524 0 0 4095524 58721727 INVEST. IS ASSOC. ORG. CFC MEDIUM TERM NOTES 10273283 C INVEST. IN ASSOC. ORG. - PAT CAPITAL 1887173 C INVEST. IN ASSOC. ORG. - OTHER 10000 C SPECIAL FUNDS 85274 C TEMPORARY INVESTMENTS 2047085 C 14302815 0 ACCUMULATED PROVISION FOR PENSION AND BENEFITS 981535 ACCRUED PAYROLL LIABILITIES 549521 CONSUMER DEPOSITS 457316 ACCRUED STATE AND LOCAL TAXES AND FEES 487986 ACCRUED INTEREST 153391 LINES OF CREDIT 0 POWER COST RECOVERY 794838 3424587 X 37157272 0 0 0 0 0 37157272 0 0 0 37157272 37163272 0 0 0 0 0 37163272 0 0 0 37163272 Schedule D, Part VI, Line 1e CONSTRUCTION WORK IN PROGRESS $4,095,524. Schedule D, Part X, Line 2 UNCERTAIN TAX POSTIONS - THE COOPERATIVE IS EXEMPT FROM FEDERAL INCOME TAX UNDER THE PROVISIONS OF SECTION 501(C)(12) OF THE INTERNAL REVENUE CODE. ACCORDINGLY, NO PROVISION FOR INCOME TAXES HAS BEEN MADE IN THE FINANACIAL STATEMENTS. THE ANNUAL FORMS 990 ARE FILED ON CALENDAR YEAR BASIS AND ARE GENERALLY NO LONGER SUBJECT TO EXAMINATIONS FOR YEARS BEFORE 2021. THE FINANCIAL ACCOUNTING STANDARDS BOARD CODIFICATION SECTION 740 REQUIRES RECOGNITION, MEASUREMENT, AND DISCLOSURE OF UNCERTAIN TAX POSITIONS. THE COOPERATIVE CURRENTLY ACCOUNTS FOR UNCERTAIN TAX POSITIONS BASED ON THE ESTIMATED LIKELIHOOD OF ASSESSMENT AND HAS NOT DETERMINED ANY POSITIONS REQUIRE AN ACCRUAL BASED ON CURRENT STANDARDS OF ACCOUNTING. Schedule D, Part XII, Line 4b OTHER AMOUNTS INCLUDED ON FORM 990, PART IX, LINE 25 BUT NOT ON SCHEDULE D, PART XII, LINE 1 - PATRONAGE CAPITAL ASSIGNABLE $2,032,305.28; SCHOLARSHIPS AWARDED/PAID $6,000 = $2,038,305.28. FOR THE AUDITED FINANCIAL STATEMENTS, THE AMOUNT OF PATRONAGE DIVIDENDS PAID OR ALLOCATED TO THE MEMBERS IS REPORTED AS EQUITY IN ACCORDANCE WITH GENERLLY ACCEPTED ACCOUNTING PRINCIPLES (US GAAP) AND NOT AS EXPENSE; THEREFORE, NET INCOME PER THE AUDITED FINANCIAL STATEMENTS IS REPORTED GROSS OF THE AMOUNT OF PATRONAGE DIVIDENDS EITHER ALLOCATED OR TO BE ALLOCATED AT THE TIME THE AUDITED FINANCIAL STATEMENTS ARE PREPARED. 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 THE 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. THE COOPERATIVE OPERATES A SCHOLARSHIP PROGRAM WHICH IS FUNDED WITH UNCLAIMED PROPERTY IN ACCORDANCE WITH TEXAS PROPERTY CODE SECTION 74.3013. FOR THE AUDITED FINANCIAL STATEMENTS, THE COOPERATIVE RECORDS THE SCHOLARSHIP FUND BALANCE AND EXPENSES ON THE BALANCE SHEET AS DEFERRED CREDITS IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (US GAAP). SCHOLARSHIPS EXPENSES ARE REPORTED ON FORM 990, PART IX, LINE 2 AS GRANTS AND OTHER ASSISTANCE TO INDIVIDUALS IN THE U.S. 1 SCHOLARSHIP AWARDS 6 6000 0 Schedule I, Part I, Line 2 GRANTS AND OTHER ASSISTANCE TO INDIVIDUALS IN THE US - THE COOPERATIVE OPERATES A SCHOLARSHIP PROGRAM WHICH IS FUNDED BY UNCLAIMED PROPERTY IN ACCORDANCE WITH TEXAS PROPERTY CODE SECTION 74.3013. THE COOPERATIVE RECORDS THE SCHOLARSHIP FUND BALANCE AND EXPENSES ON THE BALANCE SHEET AS DEFERRED CREDITS IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (US GAAP). SCHOLARSHIP PAYMENTS ARE AN EXPENSE FOR FORM 990 REPORTING. FOR 2024, SCHOLARSHIP PAYMENTS OF $6,000 ARE REPORTED ON PART IX, LINE 2. X X 0 0 0 BRYAN STORY CHIEF EXECUTIVE OFFICER 200114 0 0 0 0 0 31395 0 28524 0 260033 0 JEFFREY S SANSOM OPERATIONS MANAGER 150735 0 0 0 0 0 51979 0 28216 0 230930 0 DREW CONDER RIGHT-OF-WAY SUPERINTENDENT 117415 0 0 0 0 0 24733 0 28084 0 170232 0 WILL ARMSTRONG WORKING FOREMAN 114361 0 0 0 0 0 62106 0 28046 0 204513 0 RONNIE BRIDGES WORKING FOREMAN 114574 0 0 0 0 0 43001 0 28046 0 185621 0 Form 990, Part I, Line 14 BENEFITS PAID TO MEMBERS - THE COOPERATIVE HAS A PRE-EXISTING OBLIGATION TO ALLOCATE, AND DOES ALLOCATE, PATRONAGE DIVIDENDS TO IT'S MEMBERS FOR EACH YEAR. THE AMOUNT OF PATRONAGE DIVIDENDS PAID AND/OR ALLOCATED TO THE COOPERATIVE'S MEMBERS FOR THE CALENDAR YEAR IS $2,032,305. Form 990, Part VI, Section A, Line 6 MEMBERS - 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 ELECTION OF THE GOVERNING BODY - THE MEMBERS OF THE COOPERATIVE VOTE TO ELECT THE BOARD OF DIRECTORS. ELECTIONS ARE HELD ON A ONE MEMBER ONE VOTE BASIS. Form 990, Part VI, Section A, Line 7b DECISIONS RESERVED FOR MEMBERS - THE FOLLOWING DECISIONS 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. Form 990, Part VI, Section B, Line 11b REVIEW OF FORM 990 - MANAGEMENT PRESENTED A COPY OF THE FORM 990 TO THE BOARD OF DIRECTORS FOR REVIEW AT THE TIME OF FILING. Form 990, Part VI, Section B, Line 12c CONFLICT OF INTEREST POLICY - OFFICERS, DIRECTORS, AND ALL COOPERATIVE EMPLOYEES ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE COOPERATIVE'S CONFLICT OF INTEREST POLICIES. OFFICERS, DIRECTORS, AND ALL EMPLOYEES ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION WHICH MIGHT VIOLATE THE POLICY TO THEIR SUPERVISORS, THE GENERAL MANAGER, OR THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. ADDITIONALLY, THE OFFICERS AND DIRECTORS REVIEW ANNUALLY THE DUTIES AND STANDARDS OF CONDUCT, INCLUDING CONFLICT OF INTEREST, IN THE PRESENCE OF THE COOPERATIVE'S LEGAL COUNSEL AND DISCUSS ANY PERSONAL LIABILITY IMPLICATIONS RESULTING FROM VIOLATIONS. Form 990, Part VI, Section B, Line 13 WHISTLEBLOWER POLICY - THE COOPERATIVE HAS A POLICY IN PLACE FOR HANDLING COMPLAINTS BY EMPLOYEES ABOUT POLICIES, ACCOUNTING, INTERNAL ACCOUNTING CONTROLS, AUDITING MATTERS, OR ILLEGAL OR UNETHICAL CONDUCT BY OTHER LAMAR ELECTRIC EMPLOYEES OR DIRECTORS. THE POLICY PROVIDES FOR PROTECTION AGAINST DISCIPLINARY OR RETALIATORY ACTION FOR SUCH REPORTING WHEN THE EMPLOYEE REASONABLY BELIEVES CONDUCT CONSTITUTES ILLEGAL OR UNETHICAL BEHAVIOR. Form 990, Part VI, Section B, Line 14 DOCUMENT RETENTION AND DESTRUCTION - THE COOPERATIVE DOES NOT HAVE A FORMAL WRITTEN DOCUMENT RETENTION AND DESTRUCTION POLICY IN PLACE, BUT IT DOES FOLLOW A SET OF GUIDELINES REGARDING DOCUMENT RETENTION AND DESTRUCTION. Form 990, Part VI, Section B, Line 15 COMPARIBILITY OF COMPENSATION - THE BOARD OF DIRECTORS USES A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN TEXAS 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 OFFICER AND KEY EMPLOYEE, IF ANY. THE SURVEY INCLUDES SALARIES FROM SIMILAR COOPERATIVES THROUGHOUT TEXAS AND THE NATION. THE COOPERATIVE OBTAINS AN UPDATED SURVEY EACH YEAR. Form 990, Part VI, Section C, Line 19 PUBLIC AVAILABILITY OF DOCUMENTS - THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE FINANCIAL STATEMENTS 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 REQUESTS A COPY. Form 990, Part VII, Section A, Line 1a GENERAL MANAGER'S RESPONSIBILITIES - 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. COLUMN (F) - ESTIMATED OTHER COMPENSATION FROM THE ORGANIZATION - 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 SALARY IF THE EMPLOYEE CONTRIBUTES 3%. EMPLOYEES ARE FULLY VESTED IN THE 401(K) PLAN BEGINNING THE DAY THEY BECOME ELIGIBLE TO PARTICIPATE. ADDITIONALLY, THE COOPERATIVE PARTICIPATES IN A MULTI-EMPLOYER DEFINED BENEFIT PLAN. CONTRIBUTIONS TO THE PLAN ARE BASED ON THE FULL FUNDING LIMITATIONS OF SUCH PLANS. EMPLOYEES ARE VESTED IN THE PLAN BASED ON YEARS OF SERVICE AND BECOME FULLY VESTED AT FIVE YEARS. EMPLOYER CONTRIBUTIONS FOR BOTH PLANS ARE AVAILABLE TO EMPLOYEES, INCLUDING OFFICERS, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH AND LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS, THROUGH A QUALIFIED PLAN. THE AMOUNT REPORTED IN PART VII, COLUMN (F) ARE COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN FOR THE INDIVIDUAL, THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLANS, THE COOPERATIVE ALSO PROVIDES POST - RETIREMENT HEALTH INSURANCE BENEFITS THROUGH AN UNFUNDED WELFARE PLAN. THE VALUE OF THESE BENEFITS HAS NOT BEEN INCLUDED IN PART VII OF THE FORM 990. Form 990, Part VIII, Line 2a - 2e PATRONAGE DIVIDENDS - PATRONAGE DIVIDEND REVENUES RESULT FROM THE PAYMENT OF INTEREST FROM COOPERATIVE BANKS AND FROM 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 THE COST OF ELECTRIC SERVICE PROVIDED BY THE ORGANIZATION TO ITS MEMBERS. Form 990, Part VIII, Line 11a 11b 11c EXTRAORDINARY INCOME IN THE AMOUNT OF $416,942 WAS REPORTED ON LINE 11A AND THIS INCOME WAS A RESULT OF THE SALE OF OUR PREVIOUS OFFICE HEADQUARTERS. Form 990, Part IX, Line 1 ACCOUNTING SYSTEM - THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (US GAAP) ADAPTED 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 NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION (CFC). THE UNIFORM SYSTEM OF ACCOUNTS DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1-23. THE COOPERATIVE WILL BREAK OUT SALARIES AND WAGES, EMPLOYEE BENEFITS AND PAYROLL TAXES WHICH ARE ALLOCATED IN ACCORDANCE WITH THEIR ACCOUNTING SYSTEM, BUT OTHER EXPENSES 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, Line 2 GRANTS AND OTHER ASSISTANCE TO INDIVIDUALS IN THE US - THE COOPERATIVE OPERATES A SCHOLARSHIP PROGRAM WHICH IS FUNDED BY UNCLAIMED PROPERTY IN ACCORDANCE WITH TEXAS PROPERTY CODE SECTION 74.3013. THE COOPERATIVE RECORDS THE SCHOLARSHIP FUND BALANCE AND EXPENSES ON THE BALANCE SHEET AS DEFERRED CREDITS IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (US GAAP). SCHOLARSHIP PAYMENTS ARE AN EXPENSE FOR FORM 990 REPORTING. FOR 2024, SCHOLARSHIP PAYMENTS OF $6,000 ARE REPORTED ON PART IX, LINE 2. Form 990, Part IX, Line 4 BENEFITS PAID TO MEMBERS - THE FORM 990 INSTRUCTIONS INDICATE PARTONAGE DIVIDENDS PAID TO 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 CAPTIAL TO AND; THEREFORE, OPERATES AT COST WITH ITS MEMBERS. THE COOPERATIVE'S TAX-EXEMPT PURPOSE IS TO PROVIDE ELECTRICITY TO IT'S MEMBERS ON A COOPERATIVE BASIS. TAX LAW DEFINES "OPERATING ON A COOPERATIVE BASIS" AS SUBORDINATION OF CAPITAL, DEMOCRATIC CONTROL, AND OPERATING AT COST. THE COOPERATIVE OPERATES AT COST THROUGH THE ALLOCATION OF TRUE PATRONAGE DIVIDENDS (ALSO REFERRED TO AS ALLOCATION OF PATRONAGE CAPITAL) TO IT'S 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 THE MEMBERS, AND (3) IN ORDER TO INDUCE PATRONAGE AND INSURE THE COOPERATIVE WILL OPERATE ON A NON-PROFIT BASIS. THE COOPERATIVE IS OBLIGATED TO ACCOUNT ON A PATRONAGE BASIS TO ALL OF 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 ON THE UNDERSTANDING 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) SUCH AMOUNT CREDITED TO THE CAPITAL ACCOUNT FOR EACH MEMBER FOR ALL STATUS AS THOUGH THEY HAD BEEN PAID TO THE MEMBER IN CASH IN PURSUANCE OF A LEGAL OBLIGATION TO DO SO AND THE MEMBER HAS THEN FURNISHED TO THE COOPERATIVE CORRESPONDING AMOUNTS OF CAPITAL. THE AMOUNT REPORTED ON PART IX, LINE 4 REPRESENTS THE AMOUNT OF PATRONAGE CAPITAL EITHER ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2024 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 AMOUNT ALLOCATED ARE REPRESENTATIVE OF THE MARGINS FROM THE PROVISION OF ELECTRIC ENERGY TO THE MEMBERS AND ARE DONE PURSUANT TO THE OBLIGATION WHICH EXISTED IN THE BYLAWS PRIOR TO THE COOPERATIVE PROVIDING ELECTRICITY TO ITS MEMBERS; THEREFORE, THESE AMOUNTS MEET THE DEFINITION OF PATRONAGE DIVIDENDS PAID. PLEASE NOTE, HOWEVER, BECAUSE PATRONAGE DIVIDENDS IS THE PROCESS BY WHICH THE COOPERATIVE OPERATES AT COST WITH ITS MEMBERS AND THEREBY A KEY COMPONENT OF ACCOMPLISHING ITS TAX-EXEMPT PURPOSE, THE COOPERATIVE HAS REPORTED THE AMOUNT OF ITS 2024 MARGIN WHICH HAS BEEN OR IS TO BE ALLOCATED TO THE MEMBERS SUBSEQUENT TO YEAR-END. SUCH AMOUNTS ARE AN EXPENSE FOR FORM 990 REPORTING AND ARE NOT AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (US GAAP). AS A RESULT, THE DIFFERENCE BETWEEN THE COOPERATIVE'S (US GAAP) BASIS FINANCIAL STATEMENTS AND THE REVENUE LESS EXPENSES REPORTED ON PART 1, LINE 19 INCLUDES THE AMOUNT OF PATRONAGE DIVIDENDS REPORTED AS BENEFITS PAID TO MEMBERS. Form 990, Part IX, Line 7 RECONCILIATION OF WAGES TO FORM W-3 - SALARIES AND WAGES ARE ALLOCATED TO ASSET, LIABILITY AND EXPENSE ACCOUNTS BASED ON THE COOPERATIVE'S ACCOUNTING SYSTEM AS DESCRIBED ABOVE (SEE FORM 990, PART IX, LINE 1 NOTE). IN AN EFFORT TO EXPLAIN WHY THE AMOUNTS REPORTED ON LINES 5-7 DO NOT AGREE WITH THE FORM W-3, THE FOLLOWING RECONCILIATION IS PROVIDED: TOTAL PER LINES 5-7 $2,742,013, LESS DIRECTORS FEES REPORTED ON FORM 1099-MISC $98,000, LESS ADJUSTMENT OF BENEFITS ON PART VII, SECTION A, COLUMN F TO ACTUAL COST $342,467, PLUS SALARIES AND WAGES ALLOCATED TO ASSET ACCOUNTS $766,336, LESS PRE-TAX BENEFITS $65,002, PLUS TAXABLE BENEFITS $26,469 = $3,236,488 FROM FORM W-3 BOX 5. Form 990, Part IX, Line 24a - 24d BREAKDOWN OF EXPENSES INCLUDED IN ADMINISTRATIVE AND GENERAL - THE FOLLOWINGIS A BREAKDOWN OF THE EXPENSES REPORTED AS ADMINISTRATIVE AND GENERAL EXPENSE ON FORM 990, PART IX, LINES 24A-24D: OFFICE SUPPLIES AND EXPENSE $185,581; OUTSIDE SERVICES EMPLOYED $180,459; DIRECTORS EXPENSE $5,666; ASSOCIATED DUES $60,656; UTILITY COMMISSION RELATED EXPENSE $60,089; MAINTENANCE OF GENERAL PLANT $160,358; MISCELLANEOUS GENERAL EXPENSE $223,458. TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER FORM 990 = $876,195. Form 990, Part XI, Line 9 OTHER CHANGES IN NET ASSETS - PATRONAGE CAPITAL ASSIGNABLE $2,032,305; LESS PATRONAGE CAPITAL RETIRED $178,175; LESS UNCLAIMED/ABANDONED CAPITAL CREDITS $32,703; INCREASE IN MEMBERSHIPS $4,625; CHANGE IN OTHER COMPREHENSIVE INCOME/PROVISION FOR PENSION BENEFITS(55,646); DEFERRED CREDITS FOR SCHOLARSHIPS/SCHOLARSHIPS AWARED AND PAID $6,000. PATRONAGE CAPITAL ASSIGNABLE - AUDITED FINANCIAL STATEMENTS ARE PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (US GAAP) ADAPTED 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 NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION (CFC). THE AMOUNT OF PATRONAGE DIVIDENDS PAID OR ALLOCATED TO THE MEMBERS IS REPORTED AS AN INCREASE IN EQUITY ON THE AUDITED FINANCIAL STATEMENTS WHILE IT IS REPORTED AS EXPENSE ON THE FORM 990, PART IX, LINE 4. SCHOLARSHIPS PAID/AWARDED - THE AMOUNT OF SCHOLARSHIPS PAID/AWARDED IS REPORTED AS A DECREASE IN OTHER DEFERRED CREDITS ON THE AUDITED FINANCIAL STATEMENTS WHILE IT IS REPORTED AS EXPENSE ON THE FORM 990, PART IX, LINE 2. Form 990, Part XII, Line 2b AUDITED FINANCIAL STATEMENTS - THE BOARD OF DIRECTORS APPOINTS AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT TO MAKE A FULL AND COMPLETE AUDIT OF THE ACCOUNTS, BOOKS, AND FINANCIAL CONDITION OF THE COOPERATIVE AT THE END OF EACH FISCAL YEAR. THE AUDIT FIRM PRESENTS A REPORT OF THE AUDIT FINDINGS TO THE FULL BOARD OF DIRECTORS. THE COOPERATIVE ALSO PROVIDES A SUMMARIZED COPY OF THE FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEMBERSHIP MEETING.