2025-09-15T08:14:40-05:00 2024-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2024-01-01 740880083 SAN BERNARD ELECTRIC COOPERATIVE INC SANB 9798653171 PO BOX 1208 BELLVILLE TX 77418 MIKE ABLES CEO/MANAGER 9798653171 2025-08-01 1 0 WILLIAM M MILLER P00439459 8067473806 2025-08-01 X 2024 2025-03-06 01:10:19Z MIKE ABLES PO BOX 1208 BELLVILLE TX 77418 106127777 0 X WWW.SBEC.ORG X 1939 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 9 9 116 0 2647 366 0 0 106243845 105489008 144990 217610 112857 158222 106501692 105864840 73017 60661 11209022 10566472 8044876 8253894 0 0 0 87189254 86920489 106516169 105801516 -14477 63324 266819265 280283668 158349118 163187605 108470147 117096063 SBEC PROVIDES AFFORDABLE, RELIABLE ELECTRICITY AND INNOVATIVE AND PERSONALIZED ENERGY SERVICES FOR OUR MEMBER-OWNERS. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 32,861 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 0 1 0 0 0 0 1 0 0 0 0 0 0 0 0 0 1 69 0 116 1 1 1 0 0 0 0 106164696 1162782 0 0 0 X 9 9 0 0 1 0 1 1 1 1 0 0 0 1 1 1 1 0 0 1 1 0 X JARED JANICEK BUS GROUP MANAGERCFO 9798653171 309 WEST MAIN STREET BELLVILLE TX 77418 X LARRY CHANEY DIRECTOR 9.00 X 18310 0 0 SAMMY CONDRA PRESIDENT 12.00 X X 32364 0 0 DAVID EHLER DIRECTOR (MAY-DEC) 5.00 X 11306 0 0 VANCE R ELLIOTT SECRETARY/TREASURER 10.00 X X 22210 0 0 COLT HAACK DIRECTOR 10.00 X 32764 0 0 JASON JOHNSON DIRECTOR 7.00 X 19911 0 0 NORMAN KIECKE VICE PRESIDENT 9.00 X X 27787 0 0 CHARLES MATULA SECRETARY/TREASURER (JAN-MAY) 3.00 X X 7504 0 0 KARL N MICKLITZ DIRECTOR 8.50 X 20403 0 0 LORI WALKER 3RD CHAIR 10.00 X X 17110 0 0 MICHAEL ABLES CEO/GM 55.00 X 243719 0 172992 JARED JANICEK BUS GROUP MANAGER/CFO 42.00 X 156299 0 74673 JAMES JOUETT ELECTRIC SYSTEMS GROUP MGR 50.00 X 200180 0 96685 SHAWN BARD IT GROUP MANAGER 41.00 X 154646 0 68528 ROGER HAYES LINE CREW LEADER 46.00 X 133846 0 85749 ROBERT HROMADKA LINE CREW LEADER 52.00 X 160259 0 90281 JAMES PHILLIPS 1ST CLASS LINE TECH 57.00 X 148054 0 69788 JOHN SPIESS MEMBER SERVICES MANAGER 44.00 X 147564 0 86520 1554236 0 745216 36 0 1 0 D & J POWER INC 20207 ROLLING VISTA DR CYPRESS TX 77433 LINE MAINTENANCE & CONSTRUCTION 6022576 OVER & UNDER LLC 15483 CR 424 SOMERVILLE TX 77879 LINE MAINTENANCE & CONSTRUCTION 1429118 ABC PROFESSIONAL TREE SERVICES INC 201 FLINT RIDGE RD WEBSTER TX 77598 ROW CLEARING 1063932 CM JOSLIN CO INC PO BOX 647 CONROE TX 77305 ROW CLEARING 1034324 LINETEC SERVICES LLC 19820 N 7TH AVE STE 120 PHOENIX AZ 85207 LINE MAINTENANCE & CONSTRUCTION 961092 15 X SALES OF ELECTRICITY 221000 99148565 99148565 PATRONAGE DIVIDENDS 221000 5555499 5555499 SERVICE FEES 221000 692029 692029 OTHER PROGRAM REVENUE 221000 84415 84415 LEASE INCOME FROM LCRA 221000 8500 8500 105489008 127362 127362 90248 0 90248 90248 90248 354292 262937 91355 88708 2647 POLE ATTACHMENT INCOME 221000 52468 52468 OTHER NON-OPERATING INCOME 221000 14399 14399 66867 105864840 105682363 2647 179830 X 60661 10566472 1154217 4895916 859535 982248 361978 5384766 7712760 PURCHASED POWER 65538544 DISTRIBUTION EXPENSE 5328192 CONSUMER EXPENSE 1308926 ADMIN & GENERAL EXPENSE 953232 694069 105801516 1139938 700272 3696970 4219942 48015 29108 4582639 4757894 65542087 60722388 256658216 83865293 160080354 172792923 30323255 35591811 1406007 1469330 266819265 280283668 7242595 8778513 38203 19460 139371865 142057373 11696455 12332259 158349118 163187605 X 48650 47075 0 0 108421497 117048988 108470147 117096063 266819265 280283668 X 63324 8562592 X X 0 1 X 1 1 1 0 1 X 195332 195332 6688976 4590970 2098006 240092097 79274323 160817774 9681811 9681811 172792923 PATRONAGE CAPITAL - CFC 3167415 C PATRONAGE CAPITAL - TEC 794409 C PATRONAGE CAPITAL - NISC 164139 C PATRONAGE CAPITAL - COBANK 119660 C PATRONAGE CAPITAL - PRODUCERS 147409 C PATRONAGE CAPITAL - NRTC 74990 C PATRONAGE CAPITAL - STEC 11679532 C PATRONAGE CAPITAL - FEDERATED 179316 C CAPITAL TERM CERTIFICATES - CFC 1240496 C CONTRIBUTED CAPITAL - STEC 18021860 C MEMBERSHIPS IN ASSOC. ORGS. 2585 C 35591811 ACCUMULATED PROVISION FOR POST RETIREMENT BENEFITS 3247044 CONSUMER DEPOSITS 889270 DEFERRED CREDITS - UNCLAIMED CAPITAL CREDITS 1467076 DEFERRED CREDITS - ADVANCES FOR CONSTRUCTION 2290507 DEFERRED CREDITS - ENERGY PREPAYMENTS 484348 DEFERRED CREDITS - OTHER 15 POWER COST ADJUSTMENT - OVER COLLECTED 3889295 OTHER LIABILITIES 64704 12332259 X 105864840 0 105864840 0 105864840 95235044 0 95235044 10566472 10566472 105801516 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. THE COOPERATIVE HAS PUT INTO PLACE AN "OPERATION ROUNDUP" PLAN. MEMBERS WHO WISH TO PARTICIPATE IN THE PLAN VOLUNTARILY ROUND THEIR ELECTRIC BILLS UP TO THE NEAREST WHOLE DOLLAR. THE DIFFERENCE IS USED TO FUND THE PLAN. THE "OPERATION ROUNDUP" FUNDS ARE MAINTAINED IN A SEPARATE ACCOUNT AND USED TO SUPPORT EDUCATION PROJECTS, YOUTH PROJECTS, COMMUNITY PROJECTS AND EMERGENCY ASSISTANCE WITHIN THE COMMUNITIES AND AREAS SERVED BY THE COOPERATIVE. 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 ITS FILING STATUS AS A TAX EXEMPT ENTITY. THE COOPERATIVE DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT ITS TAX POSITIONS 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 XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 10,566,472. 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. 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". 0 AUSTIN COUNTY FAIR ASSOCIATION PO BOX 141 BELLVILLE TX 77418 741048551 501(C)(3) 6990 0 2024 DONATION COLORADO COUNTY FAIR ASSOCIATION INC 316 SPRING ST COLUMBUS TX 78934 742181450 501(C)(3) 5150 0 2024 DONATION WALLER COUNTY FAIR ASSOCIATION 21988 FM 359 HEMPSTEAD TX 77445 741481196 501(C)(3) 14775 0 2024 DONATION 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 X X X 0 0 0 MICHAEL ABLES CEO/GM 232682 0 5000 0 6037 0 145494 0 27498 0 416711 0 0 0 JAMES JOUETT ELECTRIC SYSTEMS GROUP MGR 191185 0 2733 0 6262 0 78924 0 17761 0 296865 0 0 0 ROBERT HROMADKA LINE CREW LEADER 154383 0 2203 0 3673 0 64009 0 26272 0 250540 0 0 0 JOHN SPIESS MEMBER SERVICES MANAGER 141153 0 2026 0 4385 0 74138 0 12382 0 234084 0 0 0 JARED JANICEK BUS GROUP MANAGER/CFO 153388 0 2256 0 655 0 46264 0 28409 0 230972 0 0 0 SHAWN BARD IT GROUP MANAGER 148877 0 2213 0 3556 0 40090 0 28438 0 223174 0 0 0 ROGER HAYES LINE CREW LEADER 129526 0 1946 0 2374 0 54597 0 31152 0 219595 0 0 0 JAMES PHILLIPS 1ST CLASS LINE TECH 142711 0 2186 0 3157 0 41786 0 28002 0 217842 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. MICHAEL ABLES: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 131,394 EMPLOYER CONTRIBUTION TO 401(K) PLAN 14,100 TOTAL REPORTED IN COLUMN C $ 145,494 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (131,394) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 52,448 EXPENSE TO THE COOPERATIVE $ 66,548 JAMES JOUETT: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 67,679 EMPLOYER CONTRIBUTION TO 401(K) PLAN 11,245 TOTAL REPORTED IN COLUMN C $ 78,924 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (67,679) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 44,105 EXPENSE TO THE COOPERATIVE $ 55,350 ROBERT HROMADKA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 57,362 EMPLOYER CONTRIBUTION TO 401(K) PLAN 6,647 TOTAL REPORTED IN COLUMN C $ 64,009 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (57,362) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 25,706 EXPENSE TO THE COOPERATIVE $ 32,353 JOHN SPIESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 65,782 EMPLOYER CONTRIBUTION TO 401(K) PLAN 8,356 TOTAL REPORTED IN COLUMN C $ 74,138 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (65,782) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 31,725 EXPENSE TO THE COOPERATIVE $ 40,081 JARED JANICEK: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 36,844 EMPLOYER CONTRIBUTION TO 401(K) PLAN 9,420 TOTAL REPORTED IN COLUMN C $ 46,264 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (36,844) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 34,522 EXPENSE TO THE COOPERATIVE $ 43,942 SHAWN BARD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 30,951 EMPLOYER CONTRIBUTION TO 401(K) PLAN 9,139 TOTAL REPORTED IN COLUMN C $ 40,090 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (30,951) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 35,343 EXPENSE TO THE COOPERATIVE $ 44,482 ROGER HAYES: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 47,982 EMPLOYER CONTRIBUTION TO 401(K) PLAN 6,615 TOTAL REPORTED IN COLUMN C $ 54,597 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (47,982) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 25,577 EXPENSE TO THE COOPERATIVE $ 32,192 JAMES PHILLIPS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 36,331 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,455 TOTAL REPORTED IN COLUMN C $ 41,786 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (36,331) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 21,020 EXPENSE TO THE COOPERATIVE $ 26,475 CHRISTINE JOUETT FAMILY RELATIONSHIP - KEY EMPLOYEE (J. JOUETT) 107394 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 INCOME OF $63,324, WHICH IS THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE. 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 EQUAL TO THE NET INCREASE IN ACCRUED UNBILLED REVENUE OR A NET LOSS EQUAL TO THE NET DECREASE IN UNBILLED REVENUE. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: ADD: UNBILLED REVENUE 12/31/24 $ 1,438,762 LESS: UNBILLED REVENUE 12/31/23 (1,375,438) (A) - NET INCREASE EQUALS NET INCOME ON PAGE I, LINE 19 $ 63,324 (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $10,566,472 TOTAL 2024 NET MARGIN (A + B) $10,629,796 FORM 990, PART VI, SECTION A, LINE 1A THE COOPERATIVE HAD 9 BOARD MEMBERS AT YEAR END; ALL 9 ARE ALLOWED TO VOTE, HOWEVER, THE BOARD CHAIRMAN VOTES ONLY IN THE CASE OF A TIE. FORM 990, PART VI, SECTION A, LINE 4 DURING THE YEAR THE COOPERATIVE'S BYLAWS WERE AMENDED. THE FOLLOWING IS A SUMMARY OF THE CHANGES: ARTICLE VI OFFICERS; MISCELLANEOUS SECTION 6.12 COMPENSATION WAS REMOVED AND REPLACED WITH THE FOLLOWING. "SECTION 6.12. COMPENSATION; INDEMNIFICATION; INSURANCE. SECTION 6.12A. COMPENSATION. THE COMPENSATION, IF ANY, OF ANY OFFICER, AGENT OR EMPLOYEE WHO IS ALSO A DIRECTOR OR CLOSE RELATIVE OF A DIRECTOR SHALL BE DETERMINED AS PROVIDED IN SECTION 4.10 OF THESE BYLAWS, AND THE POWERS, DUTIES AND COMPENSATION OF ANY OTHER OFFICERS, AGENTS AND EMPLOYEES SHALL BE FIXED OR A PLAN THEREFORE APPROVED BY THE BOARD OF DIRECTORS. SECTION 6.12B. INDEMNIFICATION. AS DETERMINED BY THE BOARD:(A)INDEMNIFICATION DIRECTOR OR OFFICER. THE COOPERATIVE SHALL INDEMNIFY:(1) AN INDIVIDUAL WHO IS OR WAS A DIRECTOR OR OFFICER (INCLUDING THE CEO/GENERAL MANAGER), EMPLOYEE, AGENT, OR REPRESENTATIVE ("COOPERATIVE OFFICIAL");(2)AN INDIVIDUAL WHO, WHILE A DIRECTOR OR OFFICER, IS OR WAS SERVING AT THE COOPERATIVE'S REQUEST AS A DIRECTOR, OFFICER, PARTNER, TRUSTEE, EMPLOYEE, OR AGENT OF ANOTHER ENTITY; OR (3) THE ESTATE OR PERSONAL REPRESENTATIVE OF SUCH AN INDIVIDUAL (COLLECTIVELY, "INDEMNIFICATION DIRECTOR OR OFFICER") IN DEFENDING A THREATENED, PENDING, OR COMPLETED ACTION, SUIT, OR PROCEEDING WHETHER CIVIL, CRIMINAL, ADMINISTRATIVE, OR INVESTIGATIVE, AND WHETHER FORMAL OR INFORMAL ("INDEMNIFICATION PROCEEDING") TO WHICH THE INDEMNIFICATION DIRECTOR OR OFFICER WAS, IS, OR IS THREATENED TO BE MADE A NAMED DEFENDANT OR RESPONDENT ("INDEMNIFICATION PARTY") BECAUSE THE INDEMNIFICATION DIRECTOR OR OFFICER IS OR WAS A DIRECTOR OR OFFICER. THIS INDEMNIFICATION IS AGAINST REASONABLE EXPENSES, INCLUDING ATTORNEY FEES ("INDEMNIFICATION EXPENSES") INCURRED BY THE INDEMNIFICATION DIRECTOR OR OFFICER IN CONNECTION WITH THE INDEMNIFICATION PROCEEDING.(B) INDEMNIFICATION INDIVIDUAL. THE COOPERATIVE SHALL INDEMNIFY AN INDIVIDUAL WHO IS OR WAS A COOPERATIVE OFFICIAL ("INDEMNIFICATION INDIVIDUAL") AND WAS MADE, BECAUSE THE INDEMNIFICATION INDIVIDUAL IS OR WAS A COOPERATIVE OFFICIAL, AN INDEMNIFICATION PARTY TO AN INDEMNIFICATION PROCEEDING OTHER THAN AN INDEMNIFICATION PROCEEDING:(1) BY OR IN THE RIGHT OF THE COOPERATIVE IN WHICH THE INDEMNIFICATION INDIVIDUAL WAS ADJUDGED LIABLE TO THE COOPERATIVE, EXCEPT FOR REASONABLE EXPENSES INCURRED IN CONNECTION WITH THE INDEMNIFICATION PROCEEDING IF IT IS DETERMINED THAT THE INDEMNIFICATION INDIVIDUAL MET THE INDEMNIFICATION STANDARD OF CONDUCT; OR (2) CHARGING, AND IN WHICH THE INDEMNIFICATION INDIVIDUAL WAS ADJUDGED LIABLE FOR RECEIVING, IMPROPER PERSONAL BENEFIT OR FINANCIAL BENEFIT TO WHICH THE INDEMNIFICATION INDIVIDUAL WAS NOT ENTITLED, WHETHER OR NOT INVOLVING ACTION IN THE INDEMNIFICATION INDIVIDUAL'S OFFICIAL CAPACITY. THIS INDEMNIFICATION IS AGAINST REASONABLE INDEMNIFICATION EXPENSES INCURRED IN CONNECTION WITH AN INDEMNIFICATION PROCEEDING BY OR IN THE RIGHT OF THE COOPERATIVE; OR AGAINST THE OBLIGATION TO PAY A JUDGMENT, SETTLEMENT, PENALTY, FINE, OR REASONABLE EXPENSE, INCLUDING ATTORNEY FEES, ACTUALLY INCURRED IN CONNECTION WITH ANY OTHER INDEMNIFICATION PROCEEDING, IF THE INDEMNIFICATION INDIVIDUAL: (1) ACTED IN GOOD FAITH; (2) REASONABLY BELIEVED: (A) FOR CONDUCT AS A COOPERATIVE OFFICIAL, THAT THE INDEMNIFICATION INDIVIDUAL'S CONDUCT WAS IN THE COOPERATIVE'S BEST INTEREST; AND (B) FOR ALL OTHER CONDUCT, THAT THE INDEMNIFICATION INDIVIDUAL'S CONDUCT WAS NOT OPPOSED TO THE COOPERATIVE'S BEST INTERESTS; AND (3) IN THE CASE OF ANY CRIMINAL INDEMNIFICATION PROCEEDING, HAD NO REASONABLE CAUSE TO BELIEVE THE INDEMNIFICATION INDIVIDUAL'S CONDUCT WAS UNLAWFUL (COLLECTIVELY, "INDEMNIFICATION STANDARD OF CONDUCT"). TO PROVIDE THIS INDEMNIFICATION, A MAJORITY VOTE OF THE DIRECTOR QUORUM, EXCLUDING DIRECTORS CURRENTLY INDEMNIFICATION PARTIES TO THE INDEMNIFICATION PROCEEDING ("INDEMNIFICATION DIRECTOR QUORUM"), MUST DETERMINE: (1) THAT THE INDEMNIFICATION INDIVIDUAL MET THE INDEMNIFICATION STANDARD OF CONDUCT; AND (2) REASONABLE INDEMNIFICATION EXPENSES. (C) ADVANCE FOR EXPENSES. BEFORE THE FINAL DISPOSITION OF AN INDEMNIFICATION PROCEEDING, THE COOPERATIVE SHALL PAY FOR, OR REIMBURSE, THE REASONABLE INDEMNIFICATION EXPENSES INCURRED BY AN INDEMNIFICATION DIRECTOR, OFFICER, OR INDIVIDUAL WHO IS AN INDEMNIFICATION PARTY TO THE INDEMNIFICATION PROCEEDING ("INDEMNIFICATION ADVANCE") IF: (1) THE INDEMNIFICATION DIRECTOR, OFFICER, OR INDIVIDUAL FURNISHES THE COOPERATIVE A WRITTEN OR ELECTRONIC:(A) AFFIRMATION OF THE INDEMNIFICATION DIRECTOR, OFFICER, OR INDIVIDUAL'S GOOD FAITH BELIEF THAT THE INDEMNIFICATION DIRECTOR, OFFICER, OR INDIVIDUAL HAS MET THE INDEMNIFICATION STANDARD OF CONDUCT; AND (B) UNLIMITED GENERAL OBLIGATION OF THE INDEMNIFICATION DIRECTOR, OFFICER, OR INDIVIDUAL, WHICH NEED NOT BE SECURED, MAY BE ACCEPTED WITHOUT REFERENCE TO FINANCIAL ABILITY TO REPAY, MAY BE EXECUTED PERSONALLY OR ON THE INDEMNIFICATION DIRECTOR, OFFICER, OR INDIVIDUAL'S BEHALF, AND OBLIGATES THE INDEMNIFICATION DIRECTOR, OFFICER, OR INDIVIDUAL TO REPAY THE INDEMNIFICATION ADVANCE IF A MAJORITY OF THE INDEMNIFICATION DIRECTOR QUORUM ULTIMATELY DETERMINES THAT THE INDEMNIFICATION DIRECTOR, OFFICER, OR INDIVIDUAL DID NOT MEET THE INDEMNIFICATION STANDARD OF CONDUCT; AND (2) A MAJORITY OF THE INDEMNIFICATION DIRECTOR QUORUM DETERMINES THAT THE FACTS THEN KNOWN TO THEM WOULD NOT PRECLUDE INDEMNIFICATION FOR THE INDEMNIFICATION DIRECTOR, OFFICER, OR INDIVIDUAL UNDER THIS BYLAW. SECTION 6.12C. INSURANCE. REGARDLESS OF INDEMNIFICATION AUTHORITY OR REQUIREMENT, THE COOPERATIVE MAY PURCHASE AND MAINTAIN INSURANCE ON BEHALF OF AN INDIVIDUAL WHO IS OR WAS A COOPERATIVE OFFICIAL. THIS INSURANCE IS AGAINST A LIABILITY, INCLUDING JUDGMENT, SETTLEMENT, OR OTHERWISE, OR REASONABLE EXPENSES, INCLUDING REASONABLE ATTORNEY FEES, ASSERTED AGAINST OR INCURRED BY THE COOPERATIVE OR THE INDIVIDUAL IN HIS OR HER INDIVIDUAL CAPACITY, OR ARISING FROM THE INDIVIDUAL'S STATUS, AS A COOPERATIVE OFFICIAL." A COMPLETE COPY OF THE BYLAWS CAN BE FOUND ON THE COOPERATIVE'S WEBSITE: WWW.SBEC.ORG/BYLAWS. 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 PER DISTRICT. 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 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. FORM 990, PART VI, SECTION B, LINE 14: THE COOPERATIVE DOES NOT HAVE A WRITTEN DOCUMENT RETENTION AND DESTRUCTION POLICY IN PLACE, BUT FOLLOWS THE RUS RECOMMENDATIONS REGARDING DOCUMENT RETENTION AND DESTRUCTION. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS AND A COMPENSATION COMMITTEE COMPARE FORMS 990 OF OTHER COOPERATIVES AND USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE CEO/GM. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE CEO/GM UTILIZES AN INDEPENDENT COMPENSATION CONSULTANT, FORMS 990 OF OTHER COOPERATIVES, AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF 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 PROVIDES A SUMMARIZED COPY OF THE AUDITED 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. FINALLY, THE COOPERATIVE'S FINANCIAL STATEMENTS AND BYLAWS CAN BE FOUND ON ITS WEBSITE. 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 IS COMPRISED OF 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. IN ADDITION TO THE ABOVE PENSION PLANS, 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, ITS ACCOUNTING RECORDS ARE MAINTAINED IN ACCORDANCE WITH THE RUS UNIFORM SYSTEM OF ACCOUNTS (USOA) AS 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 $ 6,050,133 LESS: DIRECTORS FEES REPORTED ON FORM 1099-NEC (209,669) LESS: OFFICER & KEY EMPLOYEE BENEFITS INCLUDED IN LINE 5 (344,350) PLUS: SALARIES & WAGES ALLOCATED TO POWER 52,658 PLUS: SALARIES & WAGES ALLOCATED TO NONOPERATING MARGINS 1,070 PLUS: SALARIES & WAGES CAPITALIZED DIRECTLY TO PLANT 3,961,318 PLUS: SALARIES & WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 433,720 TOTAL WAGES ACCRUED AND/OR PAID $ 9,944,880 FORM 990, PART IX, LINE 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: TAXES - PROPERTY & OTHER $ 489,714 TRANSMISSION 204,355 TOTAL OTHER EXPENSES PER FORM 990, LINE 24E $ 694,069 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 IS 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 ARE NOT AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, HOWEVER. FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 1,299,366 OFFICE SUPPLIES 263,047 OUTSIDE SERVICES EMPLOYED 74,119 REGULATORY COMMISSION 167,177 DUPLICATE CHARGES (CREDIT) (96,254) DIRECTORS 300,268 DUES PAID TO ASSOCIATED ORGANIZATIONS 100,374 MISCELLANEOUS GENERAL 663,241 MAINTENANCE OF GENERAL PLANT 302,687 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 3,074,025 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (59,826) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (209,669) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,268,690) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (582,608) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 953,232 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 10,566,472. PATRONAGE CAPITAL RETIRED - TOTAL -2,681,588. PATRONAGE CAPITAL RETIRED - DISCOUNT 544,013. NET CHANGE IN MEMBERSHIPS -1,575. OTHER COMPREHENSIVE INCOME-PROVISION FOR POST-RETIREMENT BENEFIT OBLIGATION 135,270.