2025-11-17T13:42:51-06:00 2024-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2024-01-01 740783753 MID-SOUTH ELECTRIC COOPERATIVE ASSOCIATION MID- 9368255100 PO BOX 970 NAVASOTA TX 778680970 ANDREW DALLMEYER SR. VICE PRESIDENT 9368255100 2025-11-15 1 0 WILLIAM M MILLER P00439459 8067473806 2025-11-15 X 2024 2025-03-06 01:10:19Z MID-SOUTH SYNERGY KERRY KELTON PO BOX 970 NAVASOTA TX 778680970 160748426 0 X WWW.MIDSOUTHSYNERGY.COM X 1940 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 8 6 245 0 0 0 0 0 145361894 154863636 -275566 208121 6065016 5422510 151151344 160494267 0 0 7787218 0 11843043 11837695 0 0 0 129026153 153064361 148656414 164902056 2494930 -4407789 562970321 611805119 405144419 458114473 157825902 153690646 THE COOPERATIVE'S AND ITS SUBSIDIARIES' MISSION IS TO PROVIDE QUALITY SERVICE (ELECTRICITY, WATER, WASTEWATER, INTERNET, & SOLAR) AT A REASONABLE PRICE, BRINGING VITAL SERVICES TO INCREASE BOTH THE QUALITY OF LIFE AND ECONOMIC HEALTH IN THE MID-SOUTH SYNERGY SERVICE AREA. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 41,766 ACTIVE SERVICES AT YEAR END. COMMUNICATIONS DIVISION:PROVIDING BROADBAND INTERNET SERVICES THROUGH THE CONSTRUCTION OF A FIBER OPTIC NETWORK. WHEN CUMULATIVE NET MARGINS DERIVED FROM MEMBER SALES OF BROADBAND INTERNET SERVICES EXCEED CUMULATIVE NET LOSSES FROM SUCH SALES, THE COOPERATIVE WILL ALLOCATE PATRONAGE CAPITAL TO THE MEMBERS. THERE WERE 15,866 SUBSCRIBERS AT YEAR END. 0 0 0 0 0 0 0 1 0 1 0 1 0 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 0 0 0 0 0 1 1 1 1 0 1 108 0 245 1 1 1 0 0 0 0 155894047 3166837 0 0 0 X 8 6 1 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X ANDREW DALLMEYER SR VICE PRESIDENT 9368255175 7625 HIGHWAY 6 NAVASOTA TX 77868 X DENNIS MCWHORTER DIRECTOR 6.50 1.00 X 24049 0 0 JAMES MORRISON VICE PRESIDENT 5.40 1.00 X X 17884 0 0 KENNETH MCDOUGALD SECRETARY/TREASURER 2.70 1.00 X X 12403 0 0 MARSHALL SHIRLEY PRESIDENT 9.90 1.00 X X 32761 0 0 PAUL MALEK DIRECTOR 4.10 1.00 X 14782 0 0 ROBERT PIERCE DIRECTOR (JAN-FEB) 1.00 1.00 X 800 0 0 RUSSELL WATSON DIRECTOR 5.80 1.00 X 20952 0 0 STEVE DRIVER DIRECTOR 9.20 1.00 X 29798 0 0 AIMEE PAVELOCK DIRECTOR (MAY-DEC) 4.70 1.00 X 15288 0 0 KERRY KELTON GENERAL MANAGER/CEO 60.00 1.00 X 614127 0 147462 TROY MORRIS SR. VICE PRESIDENT 55.00 X 373919 0 109663 MICHAEL MCDOUGALD SR. VICE PRESIDENT 50.00 1.00 X 379682 0 111927 ANDREW DALLMEYER SR. VICE PRESIDENT 50.00 1.00 X 396182 0 91802 RUSSELL SMITH SR. VICE PRESIDENT 50.00 X 319635 0 27751 DAVID WILLIAMS VP - OPERATIONS 45.00 X 263395 0 82705 BRANDON NORTHCUT VP - TECHNOLOGY 50.00 X 257695 0 64701 JUSTIN STAPELTON VP - GOVERNMENT RELATIONS 40.00 X 190749 0 54402 CATHY BARKER VP - HR & SAFETY 55.00 X 202762 0 51641 MELANIE CABALLERO VP - COMPLIANCE 60.00 X 200463 0 93105 3367326 0 835159 86 0 1 0 LINETEC SERVICES LLC 3921 INDEPENDENCE DR STE 104 ALEXANDRIA LA 71303 OVERHEAD LINE CONTRACTOR 6006309 BURLIN POWER LINES LLC 9225 N HWY 77 LEXINGTON TX 78947 OVERHEAD LINE CONTRACTOR 3714699 CM JOSLIN COMPANY LLC PO BOX 647 CONROE TX 77305 RIGHT OF WAY 2757349 FINWAY 3517 N FRAZIER ST CONROE TX 77303 OVERHEAD AND FIBER LINE CONTRACTOR 1697412 MCCORD ENGINEERING 916 SOUTHWEST PKWY EAST COLLEGE STATION TX 77840 ENGINEERING SERVICES 1564611 32 SALES OF ELECTRICITY 221000 132309908 132309908 BROADBAND REVENUE 517000 18805205 18805205 PATRONAGE DIVIDENDS 221000 3017154 3017154 SERVICE FEES 221000 688705 688705 OTHER PROGRAM REVENUE 221000 42664 42664 154863636 154152 154152 220171 10527 209644 209644 209644 288005 234036 53969 53969 53969 11734 9596 2138 2138 POLE ATTACHMENT INCOME 221000 5124495 5124495 BOND SECURITIZATION P'SHIP INCOME 221000 86233 86233 5210728 160494267 155215620 0 5278647 X 2740867 6058549 1169334 1211826 657119 16471214 19470813 PURCHASED POWER 90607660 ADMIN & GENERAL EXPENSE 9840689 DISTRIBUTION EXPENSE 9479785 CONSUMER EXPENSE 5039478 2154722 164902056 2688498 2536449 8155908 18566425 73630 73630 975941 999290 3537097 4633819 575686050 65613345 471814812 510072705 65143693 66455809 10580742 8466992 562970321 611805119 20347670 30675857 10655586 11055914 29537 29537 355700426 401681085 18411200 14672080 405144419 458114473 X 4162635 4471095 0 0 153663267 149219551 157825902 153690646 562970321 611805119 X -4407789 272533 X X 0 1 X 0 0 0 1 X 9454754 9454754 59003625 8430127 50573498 463666614 57183218 406483396 43561057 43561057 510072705 PATRONAGE CAPITAL - CFC 794012 C PATRONAGE CAPITAL - TEC 1019213 C PATRONAGE CAPITAL - BEPC 36261827 C PATRONAGE CAPITAL - OTHER 450039 C CAPITAL TERM CERTIFICATES - CFC 481833 C COBANK E-STOCK 8746619 C SCHOLARSHIP FUND 10412 C ECONOMIC DEVELOPMENT FUND 11363 C OTHER INVESTMENTS 88562 C INVESTMENTS IN AFFILIATED COMPANY - MSEC 17354125 C INVESTMENTS IN BOND SECURITIZATION PARTNERSHIP 1237804 C 66455809 CONSUMER DEPOSITS 3610281 OTHER CURRENT AND ACCRUED LIABILITIES 2395707 DEFERRED CREDIT - UNCLAIMED PROPERTY 183919 DUE TO AFFILIATED COMPANIES 116285 ACCRUED OPERATING TAXES 2089587 POWER COST RECOVERY - OVERCOLLECTED 5521973 DEFERRED DEPOSITS 754328 14672080 X PART IV, LINE 2B: PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED A RURAL SCHOLARSHIP FUND WITH RETIREMENTS OF PATRONAGE CAPITAL, WHICH HAVE REMAINED UNCLAIMED FOR A PERIOD OF THREE YEARS. THE AMOUNTS DEPOSITED INTO THE RURAL SCHOLARSHIP FUND ARE REPORTED TO 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. ALSO PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED AN ECONOMIC DEVELOPMENT FUND WITH RETIREMENTS OF PATRONAGE CAPITAL, WHICH HAVE REMAINED UNCLAIMED FOR A PERIOD OF THREE YEARS. THE AMOUNTS DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE REPORTED TO THE STATE OF TEXAS AND CAN ONLY BE USED FOR THE STIMULATION AND IMPROVEMENT OF BUSINESS AND COMMERCIAL ACTIVITY FOR ECONOMIC DEVELOPMENT IN RURAL COMMUNITIES. ANY AMOUNTS SO DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. ALSO PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED AN ENERGY EFFICIENCY ASSISTANCE FUND WITH RETIREMENTS OF PATRONAGE CAPITAL, WHICH HAVE REMAINED UNCLAIMED FOR A PERIOD OF THREE YEARS. THE AMOUNTS DEPOSITED INTO THE ENERGY EFFICIENCY ASSISTANCE FUND ARE REPORTED TO THE STATE OF TEXAS AND CAN ONLY BE USED TO ASSIST MEMBERS OF AN ELECTRIC COOPERATIVE IN REDUCING THEIR ENERGY CONSUMPTION AND ELECTRICITY BILLS. ANY AMOUNTS SO DEPOSITED INTO THE ENERGY EFFICIENCY ASSISTANCE FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. PART X, LINE 2: THE COOPERATIVE FOLLOWS THE "UNCERTAIN TAX POSITIONS" PROVISIONS OF ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA. THE PRIMARY TAX POSITION OF THE COOPERATIVE IS ITS FILING STATUS AS A TAX EXEMPT ENTITY. THE COOPERATIVE DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT ITS TAX POSITION WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE (IRS), OR OTHER STATE TAXING AUTHORITY, AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. 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 X X 0 0 0 KERRY KELTON GENERAL MANAGER/CEO 413638 0 25527 0 174962 0 115346 0 32116 0 761589 0 0 0 MICHAEL MCDOUGALD SR. VICE PRESIDENT 294660 0 18564 0 66458 0 79824 0 32103 0 491609 0 0 0 ANDREW DALLMEYER SR. VICE PRESIDENT 288798 0 18545 0 88839 0 58202 0 33600 0 487984 0 0 0 TROY MORRIS SR. VICE PRESIDENT 295860 0 18542 0 59517 0 77547 0 32116 0 483582 0 0 0 RUSSELL SMITH SR. VICE PRESIDENT 227364 0 35054 0 57217 0 27751 0 0 0 347386 0 0 0 DAVID WILLIAMS VP - OPERATIONS 183895 0 11612 0 67888 0 52977 0 29728 0 346100 0 0 0 BRANDON NORTHCUT VP - TECHNOLOGY 191523 0 12224 0 53948 0 32585 0 32116 0 322396 0 0 0 MELANIE CABALLERO VP - COMPLIANCE 137761 0 9421 0 53281 0 65064 0 28041 0 293568 0 0 0 CATHY BARKER VP - HR & SAFETY 156996 0 10318 0 35448 0 26846 0 24795 0 254403 0 0 0 JUSTIN STAPELTON VP - GOVERNMENT RELATIONS 142609 0 9402 0 38738 0 23759 0 30643 0 245151 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. KERRY KELTON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 82,571 EMPLOYER CONTRIBUTION TO 401(K) PLAN 32,775 TOTAL REPORTED IN COLUMN C $ 115,346 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (82,571) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 55,718 EXPENSE TO THE COOPERATIVE $ 88,493 MICHAEL MCDOUGALD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 53,826 EMPLOYER CONTRIBUTION TO 401(K) PLAN 25,998 TOTAL REPORTED IN COLUMN C $ 79,824 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (53,826) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 37,772 EXPENSE TO THE COOPERATIVE $ 63,770 ANDREW DALLMEYER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 35,202 EMPLOYER CONTRIBUTION TO 401(K) PLAN 23,000 TOTAL REPORTED IN COLUMN C $ 58,202 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (35,202) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 34,681 EXPENSE TO THE COOPERATIVE $ 57,681 TROY MORRIS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 48,647 EMPLOYER CONTRIBUTION TO 401(K) PLAN 28,900 TOTAL REPORTED IN COLUMN C $ 77,547 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (48,647) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 37,726 EXPENSE TO THE COOPERATIVE $ 66,626 RUSSELL SMITH: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 8,442 EMPLOYER CONTRIBUTION TO 401(K) PLAN 19,309 TOTAL REPORTED IN COLUMN C $ 27,751 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (8,442) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 29,676 EXPENSE TO THE COOPERATIVE $ 48,985 DAVID WILLIAMS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 38,073 EMPLOYER CONTRIBUTION TO 401(K) PLAN 14,904 TOTAL REPORTED IN COLUMN C $ 52,977 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (38,073) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 28,127 EXPENSE TO THE COOPERATIVE $ 43,031 BRANDON NORTHCUT: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 12,374 EMPLOYER CONTRIBUTION TO 401(K) PLAN 20,211 TOTAL REPORTED IN COLUMN C $ 32,585 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (12,374) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 28,263 EXPENSE TO THE COOPERATIVE $ 48,474 MELANIE CABALLERO: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 49,401 EMPLOYER CONTRIBUTION TO 401(K) PLAN 15,663 TOTAL REPORTED IN COLUMN C $ 65,064 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (49,401) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 23,038 EXPENSE TO THE COOPERATIVE $ 38,701 CATHY BARKER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 21,844 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,002 TOTAL REPORTED IN COLUMN C $ 26,846 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (21,844) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,496 EXPENSE TO THE COOPERATIVE $ 26,498 JUSTIN STAPELTON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 9,864 EMPLOYER CONTRIBUTION TO 401(K) PLAN 13,895 TOTAL REPORTED IN COLUMN C $ 23,759 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (9,864) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,349 EXPENSE TO THE COOPERATIVE $ 35,244 MICHAEL MCDOUGALD FAMILY RELATIONSHIP - DIRECTOR (K. MCDOUGALD) 379682 EMPLOYMENT 0 KENNETH MCDOUGALD FAMILY RELATIONSHIP - OFFICER (M. MCDOUGALD) 12403 DIRECTOR 0 STACEY FORGASON FAMILY RELATIONSHIP - DIRECTOR (A. PAVELOCK) 121232 EMPLOYMENT 0 FORM 990, PART I: 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 LOSS OF $4,407,789, WHICH IS THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE AND POWER COST AND THE RETENTION OF NON-OPERATING MARGINS. THE GAAP BASIS FINANCIAL STATEMENTS INCLUDE AN ACCRUAL FOR UNBILLED REVENUE AND POWER COST 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 AND POWER COST, PAGE 1, PART I, LINE 19 ANNUALLY REPORTS NET INCOME EQUAL TO THE NET INCREASE IN ACCRUED UNBILLED REVENUE AND POWER COST OR A NET LOSS EQUAL TO THE NET DECREASE IN UNBILLED REVENUE AND POWER COST. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: ADD: UNBILLED REVENUE 12/31/24 $ 8,129,316 LESS: UNBILLED REVENUE 12/31/23 (9,973,000) NET DECREASE IN UNBILLED REVENUE AND POWER COST (1,843,684) ADD: RETENTION OF NON-OPERATING MARGINS (2,564,105) (A) - NET INCOME ON PAGE 1, PART I, LINE 19 $(4,407,789) (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $ (0) 2024 NET MARGIN PER FINANCIAL STATEMENTS (A + B) $(4,407,789) FORM 990, PART VI, SECTION A, LINE 2 KENNETH MCDOUGALD, DIRECTOR, HAS A FAMILY RELATIONSHIP WITH MICHAEL MCDOUGALD, EMPLOYEE OFFICER. AIMEE PAVELOCK, DIRECTOR, HAS A FAMILY RELATIONSHIP WITH STACEY FORGASON, EMPLOYEE. 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. 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. FORM 990, PART VI, SECTION B, LINE 12C ON AN ANNUAL BASIS, THE COOPERATIVE WILL REQUIRE THE BOARD OF DIRECTORS AND ITS OFFICERS TO COMPLETE AND SIGN A CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM. THE BOARD OF DIRECTORS WILL ALSO COMPLETE AND SIGN THE FORM 990 DISCLOSURE QUESTIONNAIRE. THE SIGNED COPIES WILL BE KEPT IN THE PERSONNEL FILE FOR EACH INDIVIDUAL. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT, A COMPENSATION SURVEY AND COMPARE COMPENSATION REPORTED ON OTHER COOPERATIVE'S IRS FORMS 990 WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER/CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS/CEOS FROM COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE GENERAL MANAGER/CEO USES THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT, A COMPENSATION SURVEY AND COMPARE COMPENSATION REPORTED ON OTHER COOPERATIVE'S 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 SIMILAR COOPERATIVES THROUGHOUT TEXAS AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 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, PARTS VI & VII: THE COOPERATIVE ANNUALLY PROVIDES EACH DIRECTOR WHO SERVED ON THE BOARD DURING THE YEAR A QUESTIONNAIRE AND TIME LOG. THE COMPLETED QUESTIONNAIRES AND TIME LOGS 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 AND/OR TIME LOG, THE COOPERATIVE RELIED UPON THE COMPLETED INFORMATION FOR THE PRIOR YEAR. DIRECTOR PIERCE RESIGNED FROM THE BOARD DURING 2024. THE COOPERATIVE RELIED UPON HIS PRIOR YEAR QUESTIONNAIRE WHILE PREPARING THE FORM 990. THERE WERE NO KNOWN CHANGES FROM 2023 TO 2024. 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 AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH AND LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS AND HIGHLY COMPENSATED EMPLOYEES, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE EMPLOYEE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF THE ACTUARIAL INCREASE 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. ALL BENEFITS ARE FOR EMPLOYEES ONLY. THE BOARD OF DIRECTORS DO NOT RECEIVE ANY OF THE BENEFITS LISTED ABOVE. FORM 990, PART VIII, LINE 2: PATRONAGE DIVIDENDS RESULT FROM THE PAYMENT OF INTEREST FROM COOPERATIVE BANKS AND THE PURCHASE OF SUPPLIES AND SERVICES FROM 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, ITS ACCOUNTING RECORDS ARE MAINTAINED IN ACCORDANCE WITH THE RUS UNIFORM SYSTEM OF ACCOUNTS (USOA) PRESCRIBED FOR RUS ELECTRIC BORROWERS. THE USOA 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 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 $ 8,799,416 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (168,717) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (488,605) PLUS: SALARIES AND WAGES ALLOCATED TO PURCHASED POWER 480,452 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 6,604,552 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 5,267,434 TOTAL WAGES ACCRUED AND/OR PAID $20,494,532 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 4,519,658 OFFICE SUPPLIES 277,516 OUTSIDE SERVICES 252,958 DIRECTORS 369,257 SAFETY/TRAINING 1,689,234 MEETINGS 258,200 REGULATORY COMMISSION EXPENSES 213,511 MAINTENANCE OF GENERAL PLANT 1,742,906 MISCELLANEOUS GENERAL EXPENSE 4,697,223 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $14,020,463 LESS: RECLASS OF TOWER EXPENSE TO PART VIII, LINE 6B (677) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (168,717) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (2,798,263) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (1,212,117) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 9,840,689 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 24E: OTHER EXPENSES ARE COMPRISED OF THE FOLLOWING: INTERNET EXPENSE - MSEC $ 29,654 SALES 715,112 TAXES 60,814 WIRE INVENTORY ADJUSTMENT 516,567 OTHER DEDUCTIONS 832,575 TOTAL OTHER EXPENSES PER FROM 990, LINE 24E $ 2,154,722 FORM 990, PART XI, LINE 9: NET CHANGE IN MEMBERSHIPS 308,460. NET INCOME FROM EQUITY METHOD INVESTMENTS -35,931. OTHER CHANGES IN EQUITIES 4. 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. MSEC WHOLESALE SERVICES LLC 7625 HIGHWAY 6 NAVASOTA TX 77868 WHOLESALE WATER SALES TX 0 0 MID-SOUTH ELECTRIC COOPERATIVE ASSOCIATION MSEC COMMUNICATIONS LLC 7625 HIGHWAY 6 NAVASOTA TX 77868 INTERNET TX 18891263 36414683 MID-SOUTH ELECTRIC COOPERATIVE ASSOCIATION MID-SOUTH SYNERGY CHARITABLE FOUNDATION 7625 HWY 6 NAVASOTA TX 77868 274376574 GRANTS AND SCHOLARSHIPS TX 501(C)(3) LINE 7 MID-SOUTH ELECTRIC COOPERATIVE ASSOCIATION 1 MSEC ENTERPRISES INC & SUBSIDIARY PO BOX 970 NAVASOTA TX 77868 742847683 WATER DISTRIBUTION; RETRO FITTING METERS TX MID-SOUTH ELECTRIC COOPERATIVE C 10334829 81081911 1.00000 1 MSEC WASTE WATER PO BOX 970 NAVASOTA TX 77868 843511128 WASTE WATER (SEWER) TX MID-SOUTH ELECTRIC COOPERATIVE C 506960 7892776 1.00000 1 0 1 1 0 0 0 0 0 0 1 1 1 1 0 1 0 0 1 0 MID-SOUTH SYNERGY CHARITABLE FOUNDATION INC O N/A - LESS THAN $50,000 MID-SOUTH SYNERGY CHARITABLE FOUNDATION INC R 357581 BILLING & COLLECTING FOR SUB MSEC ENTERPRISES INC & SUBSIDIARY J N/A - LESS THAN $50,000 MSEC ENTERPRISES INC & SUBSIDIARY K N/A - LESS THAN $50,000 MSEC ENTERPRISES INC & SUBSIDIARY L 646890 INVOICES & OVERHEAD MSEC ENTERPRISES INC & SUBSIDIARY M N/A - LESS THAN $50,000 MSEC ENTERPRISES INC & SUBSIDIARY O 2924784 DIRECT LABOR $ & HOURS MSEC ENTERPRISES INC & SUBSIDIARY R 14992136 BILLING & COLLECTING FOR SUB MSEC WASTERWATER L 50084 INVOICES & OVERHEAD MSEC WASTERWATER M 0 N/A - LESS THAN $50,000 MSEC WASTERWATER O 204230 DIRECT LABOR $ & HOURS MSEC WASTERWATER R 492336 BILLING & COLLECTIONS