2023-11-14T09:46:29-06:00 2022-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2022-01-01 750233075 DENTON COUNTY ELECTRIC COOPERATIVE INC DENT 9403217800 7701 SOUTH STEMMONS FREEWAY CORINTH TX 76210 BRENT BISHOP SENIOR VP & CFO 9403217800 2023-11-09 1 BRENT BISHOP 999009999 0 WILLIAM M MILLER P00439459 8067473806 2023-11-09 X 2 AAL1 IAL1 2022 2023-04-26 12:10:37Z COSERV ELECTRIC DONALD CLARY 7701 SOUTH STEMMONS FREEWAY CORINTH TX 76210 827182264 0 X WWW.COSERV.COM X 1938 TX TO PROVIDE ELECTRIC POWER TO MEMBERS AT COST ON A COOPERATIVE BASIS. 7 7 466 0 49979 48979 0 0 637249543 823330632 466341 929990 1366631 1884231 639082515 826144853 53139 50937 65502626 41035517 43722066 45736351 0 0 0 529237942 738088441 638515773 824911246 566742 1233607 1535737864 2042962594 811786151 1264582796 723951713 778379798 TO DELIVER EXCELLENT SERVICE TO OUR MEMBERS AND CUSTOMERS BY PROVIDING SAFE AND RELIABLE ENERGY SOLUTIONS. 0 0 SALES OF ELECTRICITY AND RELATED SERVICES TO MEMBERS WERE PROVIDED AT COST ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THE COOPERATIVE PROVIDED ELECTRICITY TO 294,353 ACTIVE MEMBER SERVICES AT YEAR END. 0 0 0 0 0 0 0 1 0 1 1 1 0 1 1 0 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 1 1 1 1 0 1 190 0 466 1 1 1 0 0 0 0 845248034 28326446 0 0 0 X 7 7 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 0 1 1 0 X BRENT BISHOP SENIOR VP & CFO 9403217800 7701 SOUTH STEMMONS FREEWAY CORINTH TX 76210 X BILL RAGSDALE CHAIRMAN 9.90 X X 44400 0 0 CHRISTOPHER MCCRAW VICE CHAIRMAN 10.30 X X 43400 0 0 TRISHA SHEFFIELD SECRETARY/TREASURER 10.90 X X 45900 0 0 LEON PELZEL DIRECTOR 8.50 X 40400 0 0 RICHARD MUIR DIRECTOR 8.60 X 39900 0 0 MARK RUTLEDGE DIRECTOR 12.10 X 49400 0 0 JARETT ADAIR DIRECTOR 8.80 X 40900 0 0 DONALD CLARY PRESIDENT & CEO 50.00 1.00 X 926842 0 392779 DENISE SMITHERS SENIOR VP - CUSTOMER EXPERIENCE 45.00 1.50 X 351839 0 157000 BRENT BISHOP SENIOR VP & CFO 50.00 2.00 X 344895 0 152091 ROBBY HAMLIN SENIOR VP - ENGINEERING SERVICES 45.00 X 327964 0 209297 GREG WARD SENIOR VP - BUSINESS DEV. & STRATEGY 50.00 1.00 X 339037 0 161353 JEFFREY MCNEAL SENIOR VP - INFORMATION TECHNOLOGY 45.00 1.00 X 339704 0 168998 DYAN JAMES VP - EMPLOYEE RELATIONS 45.00 1.00 X 276745 0 59877 PHILIP HASSELL VP - FIELD OPERATIONS 45.00 1.00 X 278087 0 132263 GARY FRANZEN VP - ENERGY RESOUCES 50.00 X 246327 0 92857 WAYNE FRANCIS DIRECTOR - IT INFRASTRUCTURE & SECURITY 45.00 X 203414 0 53083 JACKIE GRASS DIRECTOR - ACCOUNTING 45.00 X 189897 0 71354 CHAD LUIG DIRECTOR - CORPORATE COMPLIANCE 45.00 X 187982 0 71146 GREG RICE DIRECTOR - IT ENTERPRISE APPLICATION 45.00 X 189707 0 99478 CHARLES TURNER DIRECTOR - FINANCE 45.00 X 208715 0 82543 4715455 0 1904119 149 0 1 0 TEXAS STATE UTILITIES INC 3112 WICHITA COURT FORT WORTH TX 76140 UTILITY LINE CONTRACTOR 12517588 PRIMORIS T&D SERVICES LLC 115 WEST 7TH ST SUITE 1410 FORT WORTH TX 76102 UTILITY LINE CONTRACTOR 10673153 MCDERMOTT WILL & EMERY LLP 2501 N HARWARD ST SUITE 1900 DALLAS TX 75201 LEGAL SERVICES 7055347 PCI UTILITIES LLC PO BOX 2967 MCKINNEY TX 75070 UTILITY LINE CONTRACTOR 6377475 STANDARD UTILITY CONSTRUCTION 2630 WEST FREEWAY SUITE 200 FORT WORTH TX 76102 UTILITY LINE CONTRACTOR 5788604 50 X SALES OF ELECTRICITY 221000 815941253 815941253 SERVICE FEES 221000 7175405 7175405 PATRONAGE DIVIDENDS 221000 213974 213974 823330632 688377 688377 1935539 45324 613738 0 1321801 45324 1367125 999977 49979 317169 665286 423673 241613 241613 241613 POLE ATTACHMENT INCOME 221000 502005 502005 MISCELLANEOUS NON-OPERATING 221000 15101 15101 517106 826144853 824587323 49979 1507551 X 50937 41035517 5262255 24993138 4896047 7689835 2895076 30272267 39023181 PURCHASED POWER 633678468 ADMIN & GENERAL EXPENSE 17510948 TAXES - PROPERTY/OTHER 8603136 UBIT EXPENSE 6139 8994302 824911246 X 84258282 75295528 48460016 39582256 841311 0 101531339 552162430 1335812626 351194278 920164686 984618348 111237393 118787572 248323546 248374296 20921291 24142164 1535737864 2042962594 59815846 73245291 438195 539263 687390000 1123083260 64142110 67714982 811786151 1264582796 X 3668879 3872185 148969851 148969851 571312983 625537762 723951713 778379798 1535737864 2042962594 X 1233607 53194478 X X 0 1 X 1 0 0 1 X 3541982 2871967 6413949 2517042 37808107 16999520 23325629 1212238935 334194758 878044177 45015 76789578 76834593 984618348 INVESTMENT IN SUBSIDIARY CORPORATION - EQUITY METHOD 118787572 C 118787572 MEMBERSHIP - ASSOC. ORGS 12168 C PATRONAGE CAPITAL - BEPCI 245650376 C PATRONAGE CAPITAL - CFC 357632 C PATRONAGE CAPITAL - COBANK 620491 C PATRONAGE CAPITAL - NRTC 2452 C PATRONAGE CAPITAL - TEC 1531101 C PATRONAGE CAPITAL - NISC 196033 C PATRONAGE CAPITAL - CRC 4043 C 248374296 POST RETIREMENT MEDICAL BENEFITS 10611307 DEFERRED COMPENSATION 832793 CONSUMER DEPOSITS 4738952 ACCRUED OPERATING TAXES & FEES 25521982 ACCRUED UNBILLED POWER COST 15036193 DEFERRED CREDITS 6294555 CAPITAL LEASE OBLIGATION 4529744 OTHER ACCRUED LIABILITIES 149456 67714982 X PART IV, LINE 2B: PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED A SCHOLARSHIP FUND WITH AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. THE AMOUNTS DEPOSITED INTO THE SCHOLARSHIP FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED FOR SCHOLARSHIPS TO ENABLE STUDENTS WITHIN AREAS SERVED BY THE COOPERATIVE TO ATTEND COLLEGE, TECHNICAL SCHOOL OR OTHER POST SECONDARY EDUCATION INSTITUTION. ANY AMOUNTS SO DEPOSITED INTO THE 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 AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. THE AMOUNTS DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED FOR THE STIMULATION AND IMPROVEMENT OF BUSINESS AND COMMERCIAL ACTIVITY FOR ECONOMIC DEVELOPMENT WITHIN AREAS SERVED BY THE COOPERATIVE. 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 AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. THE AMOUNTS DEPOSITED INTO THE ENERGY EFFICIENCY ASSISTANCE FUND ARE APPROVED BY 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 AND SUBSIDIARIES FOLLOW 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 PRIMARY TAX POSITIONS FOR THE SUBSIDIARIES ARE THE TIMING DIFFERENCES IMPACTING TAXABLE INCOME. THE COOPERATIVE AND SUBSIDIARIES DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT THEIR TAX POSITIONS WILL BE SUSTAINED UPON EXAMINATION BY THE INTERNAL REVENUE SERVICE 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. 1 COSERV CHARITABLE FOUNDATION 7701 SOUTH STEMMONS FREEWAY CORINTH TX 76210 134281766 501(C)(3) 45672 0 TO SUPPORT THE FOUNDATION'S OPERATIONS. 1 PART I, LINE 2: ALL DONATIONS WERE MADE TO A NON-PROFIT ORGANIZATION; AS SUCH, ALL DONATIONS MADE TO THE ORGANIZATION SUPPORT THE FOUNDATION'S OPERATIONS. X X X X 0 1 0 DONALD CLARY PRESIDENT & CEO 568887 0 48000 0 309955 0 363592 0 29187 0 1319621 0 289477 0 ROBBY HAMLIN SENIOR VP - ENGINEERING SERVICES 291724 0 20679 0 15561 0 173184 0 36113 0 537261 0 0 0 DENISE SMITHERS SENIOR VP - CUSTOMER EXPERIENCE 313531 0 22714 0 15594 0 119594 0 37406 0 508839 0 0 0 JEFFREY MCNEAL SENIOR VP - INFORMATION TECHNOLOGY 305165 0 20739 0 13800 0 134342 0 34656 0 508702 0 0 0 GREG WARD SENIOR VP - BUSINESS DEV. & STRATEGY 302058 0 22239 0 14740 0 123947 0 37406 0 500390 0 0 0 BRENT BISHOP SENIOR VP & CFO 307930 0 22475 0 14490 0 114685 0 37406 0 496986 0 0 0 PHILIP HASSELL VP - FIELD OPERATIONS 247376 0 15405 0 15306 0 104184 0 28079 0 410350 0 0 0 GARY FRANZEN VP - ENERGY RESOUCES 227315 0 13858 0 5154 0 57470 0 35387 0 339184 0 0 0 DYAN JAMES VP - EMPLOYEE RELATIONS 248121 0 15514 0 13110 0 34884 0 24993 0 336622 0 0 0 CHARLES TURNER DIRECTOR - FINANCE 194025 0 8660 0 6030 0 56167 0 26376 0 291258 0 0 0 GREG RICE DIRECTOR - IT ENTERPRISE APPLICATION 173694 0 10759 0 5254 0 64387 0 35091 0 289185 0 0 0 JACKIE GRASS DIRECTOR - ACCOUNTING 179819 0 7891 0 2187 0 47197 0 24157 0 261251 0 0 0 CHAD LUIG DIRECTOR - CORPORATE COMPLIANCE 178365 0 7982 0 1635 0 36028 0 35118 0 259128 0 0 0 WAYNE FRANCIS DIRECTOR - IT INFRASTRUCTURE & SECUR 187063 0 8360 0 7991 0 26376 0 26707 0 256497 0 0 0 PART I, LINE 4B 4B: THE FOLLOWING INDIVIDUAL PARTICIPATES IN A SECTION 457(F) NON-QUALIFIED DEFERRED COMPENSATON (NQDC) PLAN, AND THE AMOUNT LISTED REPRESENTS THE ACTUARIAL INCREASE OF UNVESTED BENEFITS ASSOCIATED WITH PARTICIPATION IN THE PLAN: DONALD CLARY $ 220,950 TOTAL BENEFITS PAID AND INCLUDED AS W-2 WAGES DURING THE YEAR WERE $289,477 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 CONTRIBUTIONS TO THE PLAN IN LIEU OF THE ACTUARIAL INCREASE ARE EXPENSED IN THE FINANCIAL STATEMENTS. DONALD CLARY: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 133,492 ACTUARIAL INCREASE IN NQDC PLAN 220,950 401(K) EMPLOYER CONTRIBUTION 9,150 TOTAL COLUMN C $ 363,592 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT & NQDC PLANS (354,442) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT & NQDC PLANS 88,036 EXPENSE TO THE COOPERATIVE $ 97,186 ROBBY HAMLIN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 164,238 401(K) EMPLOYER CONTRIBUTION 8,946 TOTAL COLUMN C $ 173,184 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (164,328) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 46,459 EXPENSE TO THE COOPERATIVE $ 55,405 JEFFREY MCNEAL: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 125,192 401(K) EMPLOYER CONTRIBUTION 9,150 TOTAL COLUMN C $ 134,342 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (125,192) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 47,740 EXPENSE TO THE COOPERATIVE $ 56,890 DENISE SMITHERS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 110,444 401(K) EMPLOYER CONTRIBUTION 9,150 TOTAL COLUMN C $ 119,594 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (110,444) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 47,740 EXPENSE TO THE COOPERATIVE $ 56,890 GREG WARD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 114,797 401(K) EMPLOYER CONTRIBUTION 9,150 TOTAL COLUMN C $ 123,947 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (114,797) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 47,740 EXPENSE TO THE COOPERATIVE $ 56,890 BRENT BISHOP: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 105,535 401(K) EMPLOYER CONTRIBUTION 9,150 TOTAL COLUMN C $ 114,685 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (105,535) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 47,740 EXPENSE TO THE COOPERATIVE $ 56,890 PHILIP HASSEL: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 96,554 401(K) EMPLOYER CONTRIBUTION 7,630 TOTAL COLUMN C $ 104,184 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (96,554) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 27,498 EXPENSE TO THE COOPERATIVE $ 35,128 GARY FRANZEN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 50,420 401(K) EMPLOYER CONTRIBUTION 7,050 TOTAL COLUMN C $ 57,470 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (50,420) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 31,437 EXPENSE TO THE COOPERATIVE $ 38,487 DYAN JAMES: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 27,254 401(K) EMPLOYER CONTRIBUTION 7,630 TOTAL COLUMN C $ 34,884 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (27,254) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 27,912 EXPENSE TO THE COOPERATIVE $ 35,542 CHARLES TURNER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 50,140 401(K) EMPLOYER CONTRIBUTION 6,027 TOTAL COLUMN C $ 56,167 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (50,140) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 30,737 EXPENSE TO THE COOPERATIVE $ 36,764 GREG RICE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 58,945 401(K) EMPLOYER CONTRIBUTION 5,442 TOTAL COLUMN C $ 64,387 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (58,945) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 27,537 EXPENSE TO THE COOPERATIVE $ 32,979 JACKIE GRASS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 41,679 401(K) EMPLOYER CONTRIBUTION 5,518 TOTAL COLUMN C $ 47,197 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (41,679) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 28,038 EXPENSE TO THE COOPERATIVE $ 33,556 CHAD LUIG: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 30,446 401(K) EMPLOYER CONTRIBUTION 5,582 TOTAL COLUMN C $ 36,028 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (30,446) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 28,361 EXPENSE TO THE COOPERATIVE $ 33,943 WAYNE FRANCIS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 20,558 401(K) EMPLOYER CONTRIBUTION 5,818 TOTAL COLUMN C $ 26,376 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (20,558) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 29,673 EXPENSE TO THE COOPERATIVE $ 35,491 FORM 990, PART I, LINE 19: REVENUE LESS EXPENSES AS REPORTED ON PAGE 1, PART I, LINE 19 DIFFERS FROM THE TOTAL NET MARGINS REPORTED ON THE COOPERATIVE'S AUDITED FINANCIAL STATEMENTS DUE TO BOOK TO TAX ADJUSTMENTS REQUIRED TO CONFORM TO THE FORM 990 INSTRUCTIONS. THE FIRST ADJUSTMENT IS FOR THE EQUITY METHOD INCOME RECORDED ON THE COOPERATIVE'S BOOKS AND INCLUDED IN TOTAL NET MARGINS. U.S. GAAP REQUIRES THE COOPERATIVE TO RECORD ON ITS BOOKS THE EQUITY METHOD INCOME FROM ITS WHOLLY OWNED SUBSIDIARY. EQUITY METHOD INCOME IS NOT INCOME FOR IRS FORM 990 PURPOSES AND AS SUCH HAS BEEN REPORTED AS AN OTHER CHANGE IN NET ASSETS. THE SECOND ADJUSTMENT IS FOR THE PATRONAGE DIVIDENDS ALLOCATED OR TO BE ALLOCATED BY THE COOPERATIVE TO MEMBERS. WHEREAS THE FORM 990 REQUIRES SUCH AMOUNTS TO BE REPORTED AS AN EXPENSE, PATRONAGE DIVIDENDS ALLOCATED OR TO BE ALLOCATED ARE AN INCREASE IN CAPITAL AND EQUITY, SPECIFICALLY PATRONAGE CAPITAL, ON U.S. GAAP BASIS FINANCIAL STATEMENTS. 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. AMENDMENTS TO THE ARTICLES OF INCORPORATION 2. DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS 3. DISSOLUTION/LIQUIDATION OF THE COOPERATIVE 4. MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION 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 ALL DIRECTORS, OFFICERS, AND EMPLOYEES OF THE COOPERATIVE ARE REQUIRED TO ANNUALLY CERTIFY THAT THEY HAVE COMPLIED WITH THE CODE OF CONDUCT AND ARE NOT AWARE OF ANY UNREPORTED VIOLATIONS OF THE CODE THAT MAY HAVE OCCURRED. FORM 990, PART VI, SECTION B, LINE 15 THE CEO IS SUBJECT TO AN ANNUAL EVALUATION BY A COMPENSATION COMMITTEE, WHICH IS COMPRISED OF THE BOARD OF DIRECTORS. A COMPENSATION SURVEY, FORMS 990 OF OTHER COOPERATIVES, AND AN INDEPENDENT COMPENSATION CONSULTANT ARE USED WHEN DETERMINING COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR CEOS FROM SIMILARLY SITUATED COOPERATIVES, UTILITIES, AND OTHER BUSINESSES LOCATED IN THE DALLAS/FT. WORTH AREA, TEXAS, AND THE NATION. THE CEO USES A WAGE AND SALARY PLAN APPROVED BY THE BOARD, WHICH IS BASED ON A COMPENSATION SURVEY FROM SIMILARLY SITUATED COOPERATIVES, UTILITIES, AND OTHER BUSINESSES LOCATED IN THE DALLAS/FT. WORTH AREA, TEXAS, AND THE NATION WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S OTHER EMPLOYEES MEETING THE DEFINITION OF OFFICER AND KEY EMPLOYEE, IF ANY. FORM 990, PART VI, SECTION C, LINE 19 ANNUALLY, THE COOPERATIVE PROVIDES A CONDENSED SET OF AUDITED FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE BY PUBLISHING THE COOPERATIVE'S ANNUAL REPORT IN THE CO-OP POWER MAGAZINE. THE BY-LAWS AND ANNUAL REPORT, WHICH INCLUDE THE CONDENSED FINANCIAL STATEMENTS, CAN ALSO BE FOUND ON THE COOPERATIVE'S 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 AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH, DENTAL, VISION, LONGTERM DISABILITY, ACCIDENTAL DEATH & DISMEMBERMENT AND GROUP TERM LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS AND HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN AND EMPLOYER PAID INSURANCE PREMIUMS. 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 PER INDIVIDUAL HAS NOT BEEN ESTIMATED. FORM 990, PART VIII, LINE 2: FOR 2022, PATRONAGE DIVIDENDS RESULT FROM THE PAYMENT OF INTEREST TO 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 NO LONGER A BORROWER OF THE RURAL UTILITIES SERVICE (RUS), THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED FOR RUS 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 ITS 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 THE TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 30,255,393 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (304,300) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (1,526,515) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 12,520,700 TOTAL WAGES ACCRUED AND/OR PAID $ 40,945,278 FORM 990, PART IX, LINE 24: ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 887,368 OUTSIDE SERVICES 7,910,854 PROPERTY INSURANCE 1,134,339 LOSS/DAMAGES 432,718 MISCELLANEOUS GENERAL EXPENSE 6,830,589 RENTS EXPENSE 306,374 MAINTENANCE OF GENERAL PLANT 8,706 TOTAL ADMIN & GENERAL EXPENSE $ 17,510,948 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 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 GAAP, HOWEVER. FORM 990, PART IX, LINE 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: DISTRIBUTION - OPERATION & MAINTENANCE $ 4,055,391 CUSTOMER SERVICE & INFORMATION 2,061,079 SALES 2,166,180 MISCELLANEOUS 711,652 TOTAL OTHER EXPENSES $ 8,994,302 FORM 990, PART X AND SCHEDULE R, PART I ADDITIONAL INFORMATION PERTAINING TO DISREGARDED ENTITY - COSERV SECURITIZATION 2022 LLC (SEE SCHEDULE R, PART I): THE COOPERATIVE INCURRED EXTRAORDINARY POWER COSTS DURING WINTER STORM URI IN FEBRUARY 2021. DURING 2022, THE COOPERATIVE'S POWER SUPPLIER BILLED THE COOPERATIVE FOR THESE COSTS. PURSUANT TO STATE LAW PERTAINING TO EXTRAORDINARY COSTS CAUSED BY WINTER STORM URI, THE COOPERATIVE'S BOARD OF DIRECTORS APPROVED A FINANCING ORDER ON SEPTEMBER 14, 2022; THE PURPOSE OF WHICH WAS TO (1) CREATE A REGULATORY ASSET AND SECURITIZED PROPERTY RIGHT EQUAL TO THE EXTRAORDINARY WINTER STORM URI COSTS, AND (2) AUTHORIZE THE ISSUANCE OF BONDS IN ORDER TO PAY SUCH EXTRAORDINARY COSTS THROUGH THE RIGHT TO BILL AND COLLECT DEBT SERVICE AND OTHER RELATED EXPENSES THROUGH A MONTHLY CHARGE TO THE MEMBERS OF THE COOPERATIVE, KNOWN AS A SECURITIZATION CHARGE. IN ORDER ISSUE THE BONDS, THE COOPERATIVE CREATED A SINGLE MEMBER LIMITED LIABILITY COMPANY, COSERV SECURITIZATION 2022 LLC (THE LLC). BASED ON THE FINANCING ORDER, THE LLC SOLD BONDS TO THE PURCHASE THE SECURITIZED PROPERTY RIGHT FROM THE COOPERATIVE. THE PROCEEDS WERE THEN USED BY THE COOPERATIVE TO PAY THE POWER SUPPLIER FOR THE EXTRAORDINARY WINTER STORM URI COSTS. THE SECURITIZED PROPERTY RIGHT IS RELATED TO THE FUTURE COLLECTION OF REVENUE FROM THE MEMBERS PURSUANT TO STATE LAW. FOR PURPOSES OF THE BONDS, THE LLC IS A SEPARATE LEGAL ENTITY. THE BONDS ARE PAID FOR THROUGH THE SECURITIZATION CHARGES BILLED TO AND COLLECTED FORM THE MEMBERS OF THE COOPERATIVE. THE BONDS ARE NOT A LIABILITY OF THE COOPERATIVE. THEREFORE, FOR STAND ALONE FINANCIAL STATEMENT REPORTING PURPOSES, ONLY THE INVESTMENT IN THE LLC IS REPORTED. IN GENERAL, THIS IS ALSO HOW FORM 990 IS PREPARED. HOWEVER, SINCE THE LLC IS A SINGLE MEMBER LIMITED LIABILITY COMPANY AND DISREGARDED FOR FEDERAL INCOME TAX REPORTING PURPOSES, INCLUDING FORM 990, THE FORM 990 HAS BEEN PREPARED ON A CONSOLIDATED BASIS. ACCORDINGLY, THE FOLLOWING ASSETS AND LIABILITIES ARE INCLUDED IN THE FORM 990, PART X BALANCE SHEET AS FOLLOWS: LINE 1- CASH - INCLUDES $4,600,000 LINE 9 - PREPAID AND DEFERRED CHARGES - INCLUDES THE SECURITIZED REGULATORY ASSET OF $461,135,968 LINE 12 - INVESTMENTS IN OTHER SECURITIES - $4,600,000 OF INVESTMENT IN COSERV SECURITIZATION IS ELIMINATED. LINE 17 ACCOUNTS PAYABLE AND ACCRUED EXPENSES - ACCRUED INTEREST ON SECURITIZED BONDS OF $1,135,968 LINE 23 SECURED MORTGAGES AND NOTES PAYABLE OF UNRELATED THIRD PARTIES - SECURITIZED BONDS OF $460,000,000 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED 41,035,517. EQUITY METHOD INCOME (LOSS) FROM SUBSIDIARY COMPANY 6,912,049. NET CHANGE IN MEMBERSHIPS 203,306. OTHER COMPREHENSIVE INCOME - POST EMPLOYMENT BENEFITS & AFFILIATES 5,043,606. FORM 990, PART XII, LINE 2C: PURSUANT TO BOARD POLICY, THE BOARD OF DIRECTORS IS THE AUDIT COMMITTEE AND IS RESPONSIBLE FOR OVERSEEING THE FINANCIAL STATEMENT AUDIT AND SELECTING THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. PROCEDURES REMAINED UNCHANGED DURING THE YEAR. QUAIL RUN REALTY LLC 7701 SOUTH STEMMONS FWY CORINTH TX 76210 REAL ESTATE TX 154032 1372577 DENTON COUNTY ELECTRIC COOPERATIVE INC COSERV PROPERTY HOLDINGS LLC 7701 SOUTH STEMMONS FWY CORINTH TX 76210 REAL ESTATE TX 323993 5747323 DENTON COUNTY ELECTRIC COOPERATIVE INC COSERV SECURITIZATION 2022 LLC 2800 QUAIL RUN SUITE 200 CORINTH TX 76210 SECURITIZED BOND ISSUANCE DE 0 465735968 DENTON COUNTY ELECTRIC COOPERATIVE INC COSERV ELECTRIC GROUP HEALTH BENEFIT PLAN TRUST 7701 SOUTH STEMMONS FWY CORINTH TX 76210 300403374 MEDICAL SELF INSURANCE FUND TX 501(C)(9) N/A DENTON COUNTY ELECTRIC COOPERATIVE INC 1 COSERV CHARITABLE FOUNDATION 7701 SOUTH STEMMONS FWY CORINTH TX 76210 134281766 COMMUNITY CHARITABLE CONTRIBUTIONS TX 501(C)(3) 7 DENTON COUNTY ELECTRIC COOPERATIVE INC 1 COSERV UTILITY SERVICES INC 7701 SOUTH STEMMONS FWY CORINTH TX 76210 752766000 GP FOR COSERV INVESTMENTS TX DENTON COUNTY ELECTRIC COOPERATIVE INC C 1184380 1.00000 1 COSERV INVESTMENTS LP 7701 SOUTH STEMMONS FWY CORINTH TX 76210 752729645 INVESTMENTS TX DENTON COUNTY ELECTRIC COOPERATIVE INC C 89338903 372626467 1.00000 1 1 1 0 0 0 0 0 0 0 0 0 1 0 1 1 0 1 1 0 COSERV INVESTMENTS LP AND SUBSIDIARIES A 434515 INVOICES AND OTHER RECORDS COSERV INVESTMENTS LP AND SUBSIDIARIES Q 10741064 INVOICES AND OTHER RECORDS COSERV INVESTMENTS LP AND SUBSIDIARIES R 225151 INVOICES AND OTHER RECORDS COSERV CHARITABLE FOUNDATION B N/A - LESS THAN $50,000 COSERV CHARITABLE FOUNDATION L N/A - LESS THAN $50,000 COSERV CHARITABLE FOUNDATION N N/A - LESS THAN $50,000 COSERV CHARITABLE FOUNDATION O N/A - LESS THAN $50,000 COSERV ELECTRIC GROUP HEALTH BENEFIT PLAN O N/A - LESS THAN $50,000 COSERV ELECTRIC GROUP HEALTH BENEFIT PLAN R 6283584 INVOICES AND OTHER RECORDS PART IV & V: THE DISCLOSURES PERTAINING TO COSERV INVESTMENTS LP INCLUDE THE FOLLOWING ENTITIES WHICH WERE DISREGARDED OF ITS SOLE OWNER FOR FEDERAL TAX REPORTING PURPOSES, AS OF DECEMBER 31, 2022: COSERV NATURAL, LLC COSERV GAS, LTD RENEWABLE ENERGY ALTERNATIVES, LLC THIRTY SEVEN REALTY GP, LLC THIRTY SEVEN REALTY HOLDINGS LP