2022-11-15T08:22:32-06:00 2021-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2021-01-01 750233075 DENTON COUNTY ELECTRIC COOPERATIVE INC DENT 9403217800 7701 SOUTH STEMMONS FREEWAY CORINTH TX 76210 BRENT BISHOP SENIOR VP & CFO 9403217800 2022-11-14 1 BRENT BISHOP 999009999 WILLIAM M MILLER P00439459 8067473806 2022-11-14 X 3 AAL1 IAL1 2021 2022-09-23 18:48:47Z COSERV ELECTRIC DONALD CLARY 7701 SOUTH STEMMONS FREEWAY CORINTH TX 76210 639915607 0 X WWW.COSERV.COM X 1938 TX TO PROVIDE ELECTRIC POWER TO MEMBERS AT COST ON A COOPERATIVE BASIS. 7 7 451 0 50183 49183 0 0 553496319 637249543 901104 466341 1468023 1366631 555865446 639082515 20148 53139 56555286 65502626 42386788 43722066 0 0 0 455908197 529237942 554870419 638515773 995027 566742 1353458568 1535737864 702937520 811786151 650521048 723951713 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 280,324 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 1 183 0 451 1 1 1 0 0 0 0 581026653 17843023 0 0 0 X 7 7 0 0 1 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 MARK RUTLEDGE DIRECTOR 11.90 X 51900 0 0 CHRISTOPHER MCCRAW VICE CHAIRMAN 9.50 X X 44400 0 0 RICHARD MUIR DIRECTOR 8.70 X 41400 0 0 LEON PELZEL DIRECTOR 8.00 X 39900 0 0 CURTIS TALLY DIRECTOR (JAN-NOV) 8.10 X 37450 0 0 BILL RAGSDALE CHAIRMAN 10.20 X X 46400 0 0 TRISHA SHEFFIELD SECRETARY/TREASURER 9.30 X X 42400 0 0 JARETT ADAIR DIRECTOR (DEC) 7.00 X 3450 0 0 DONALD CLARY PRESIDENT & CEO 45.00 1.00 X 867405 0 361801 DENISE SMITHERS SENIOR VP- CUSTOMER EXPERIENCE 46.00 1.00 X 332418 0 144719 BRENT BISHOP SENIOR VP & CFO 45.00 1.00 X 325308 0 133503 ROBBY HAMLIN SENIOR VP- ENGINEERING SERVICES 45.00 1.00 X 319789 0 204778 GREG WARD SENIOR VP- BUSINESS DEV. & STRATEGY 45.00 1.00 X 320069 0 175938 JEFFREY MCNEAL SENIOR VP- INFORMATION TECHNOLOGY 45.00 1.00 X 322136 0 154573 DYAN JAMES VP - EMPLOYEE RELATIONS 45.00 X 185294 0 63922 PHILIP HASSEL VP - FIELD OPERATIONS 45.00 X 183721 0 128444 BRUCE BOUTILIER SR DIRECTOR OF GOVERNMENT AFFAIRS 45.00 X 213785 0 120394 CHARLES TURNER DIRECTOR OF FINANCE 40.00 X 204569 0 82539 WAYNE FRANCIS DIRECTOR OF IT- INFRA. & SECURITY 40.00 X 196598 0 110643 VICKI SARGENT DIRECTOR OF COMMUNITY ENGAGEMENT 50.00 X 194537 0 60779 GARY FRANZEN DIRECTOR OF ENERGY SERVICE 40.00 X 208352 0 82784 4181281 0 1824817 142 0 1 0 TEXAS STATE UTILITIES INC 3112 WICHITA COURT FORT WORTH TX 76140 UTILITY LINE CONTRACTOR 11252032 PRIMORIS T&D SERVICES LLC 115 WEST 7TH ST SUITE 1410 FORT WORTH TX 76102 UTILITY LINE CONTRACTOR 9732501 PCI UTILITIES LLC PO BOX 2967 MCKINNEY TX 75070 UTILITY LINE CONTRACTOR 4881254 MCDERMOTT WILL & EMERY LLP 2501 N HARWARD ST SUITE 1900 DALLAS TX 75201 LEGAL SERVICES 3680357 NATIONAL INFORMATION SOLUTIONS PO BOX 1147 MANDAN ND 58554 PRINTING/COMPUTER SOFTWARE 3050138 55 X SALES OF ELECTRICITY 221000 599795196 599795196 PATRONAGE DIVIDENDS 221000 32867194 32867194 SERVICE FEES 221000 4587153 4587153 637249543 107954 107954 1484963 45324 614682 0 870281 45324 915605 544725 50183 320697 576797 218410 358387 358387 358387 POLE ATTACHMENT INCOME 221000 451018 451018 MISCELLANEOUS NON-OPERATING 221000 8 8 451026 639082515 638152663 50183 879669 X 53139 65502626 4531118 23848245 4787342 7842603 2712758 28807088 37291398 PURCHASED POWER 433673331 ADMIN & GENERAL EXPENSE 15808921 TAXES - PROPERTY/OTHER 7853685 UBIT EXPENSE 17180 5786339 638515773 14305424 84258282 18162471 0 22734513 48460016 914193 841311 101757978 101531339 1266693434 346528748 871995994 920164686 90597436 111237393 215715906 248323546 17274653 20921291 1353458568 1535737864 60979671 59815846 321155 438195 582715000 687390000 58921694 64142110 702937520 811786151 X 3423040 3668879 148956754 148969851 498141254 571312983 650521048 723951713 1353458568 1535737864 X 566742 72863923 X X 0 1 X 1 0 0 1 X 3541982 2871967 6413949 2517042 36704937 15820988 23400991 1153554695 330707760 822846935 45015 67457796 67502811 920164686 INVESTMENT IN SUBSIDIARY CORPORATION - EQUITY METHOD 111237393 C 111237393 MEMBERSHIPS IN ASSOCIATED ORGANIZATIONS 12168 C PATRONAGE CAPITAL - BEPCI 245650376 C PATRONAGE CAPITAL - CFC 357632 C PATRONAGE CAPITAL - COBANK 635592 C PATRONAGE CAPITAL - NRTC 2452 C PATRONAGE CAPITAL - TEC 1467246 C PATRONAGE CAPITAL - NISC 195878 C PATRONAGE CAPITAL - CRC 2202 C 248323546 POST RETIREMENT HEALTH INSURANCE BENEFITS 14220905 DEFERRED COMPENSATION 1080538 CONSUMER DEPOSITS 4413405 ACCRUED OPERATING TAXES & MUNICIPAL FRANCHISE FEES 19977613 ACCRUED UNBILLED POWER COST 13215930 DEFERRED CREDITS 9552881 OTHER CURRENT & ACCRUED LIABILITIES 1680838 64142110 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) 52639 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 517395 0 40000 0 310010 0 332882 0 28919 0 1229206 0 284638 0 ROBBY HAMLIN SENIOR VP- ENGINEERING SERVICES 289112 0 14661 0 16016 0 167710 0 37068 0 524567 0 0 0 GREG WARD SENIOR VP- BUSINESS DEV. & STRATEGY 290483 0 14661 0 14925 0 140866 0 35072 0 496007 0 0 0 DENISE SMITHERS SENIOR VP- CUSTOMER EXPERIENCE 301181 0 15188 0 16049 0 107602 0 37117 0 477137 0 0 0 JEFFREY MCNEAL SENIOR VP- INFORMATION TECHNOLOGY 293233 0 14661 0 14242 0 120251 0 34322 0 476709 0 0 0 BRENT BISHOP SENIOR VP & CFO 295940 0 14923 0 14445 0 96536 0 36967 0 458811 0 0 0 BRUCE BOUTILIER SR DIRECTOR OF GOVERNMENT AFFAIRS 187738 0 9902 0 16145 0 85939 0 34455 0 334179 0 0 0 PHILIP HASSEL VP - FIELD OPERATIONS 171681 0 8518 0 3522 0 94826 0 33618 0 312165 0 0 0 WAYNE FRANCIS DIRECTOR OF IT- INFRA. & SECURITY 181422 0 9507 0 5669 0 83860 0 26783 0 307241 0 0 0 GARY FRANZEN DIRECTOR OF ENERGY SERVICE 192423 0 10140 0 5789 0 54001 0 28783 0 291136 0 0 0 CHARLES TURNER DIRECTOR OF FINANCE 188177 0 9847 0 6545 0 56284 0 26255 0 287108 0 0 0 VICKI SARGENT DIRECTOR OF COMMUNITY ENGAGEMENT 170706 0 8462 0 15369 0 48748 0 12031 0 255316 0 0 0 DYAN JAMES VP - EMPLOYEE RELATIONS 173593 0 8646 0 3055 0 29743 0 34179 0 249216 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 $ 211,209 TOTAL BENEFITS PAID AND INCLUDED AS W-2 WAGES DURING THE YEAR WERE $284,638 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 $ 112,973 ACTUARIAL INCREASE IN NQDC PLAN 211,209 401(K) EMPLOYER CONTRIBUTION 8,700 TOTAL COLUMN C $ 332,882 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT & NQDC PLANS (324,182) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT & NQDC PLANS 78,687 EXPENSE TO THE COOPERATIVE $ 87,387 ROBBY HAMLIN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 158,831 401(K) EMPLOYER CONTRIBUTION 8,879 TOTAL COLUMN C $ 167,710 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (158,831) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 44,632 EXPENSE TO THE COOPERATIVE $ 53,511 GREG WARD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 131,920 401(K) EMPLOYER CONTRIBUTION 8,946 TOTAL COLUMN C $ 140,866 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (131,920) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 44,632 EXPENSE TO THE COOPERATIVE $ 53,511 DENISE SMITHERS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 98,902 401(K) EMPLOYER CONTRIBUTION 8,700 TOTAL COLUMN C $ 107,602 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (98,902) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 44,632 EXPENSE TO THE COOPERATIVE $ 53,332 JEFFREY MCNEAL: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 112,346 401(K) EMPLOYER CONTRIBUTION 7,905 TOTAL COLUMN C $ 120,251 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (112,346) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 44,632 EXPENSE TO THE COOPERATIVE $ 52,537 BRENT BISHOP: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 88,593 401(K) EMPLOYER CONTRIBUTION 7,943 TOTAL COLUMN C $ 96,536 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (88,593) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 44,632 EXPENSE TO THE COOPERATIVE $ 52,575 BRUCE BOUTILIER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 80,076 401(K) EMPLOYER CONTRIBUTION 5,863 TOTAL COLUMN C $ 85,939 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (80,076) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 29,505 EXPENSE TO THE COOPERATIVE $ 35,368 PHILIP HASSEL: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 89,485 401(K) EMPLOYER CONTRIBUTION 5,341 TOTAL COLUMN C $ 94,826 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (89,485) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 25,750 EXPENSE TO THE COOPERATIVE $ 31,091 WAYNE FRANCIS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 78,211 401(K) EMPLOYER CONTRIBUTION 5,649 TOTAL COLUMN C $ 83,860 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (78,211) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 28,327 EXPENSE TO THE COOPERATIVE $ 33,976 GARY FRANZEN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 48,016 401(K) EMPLOYER CONTRIBUTION 5,985 TOTAL COLUMN C $ 54,001 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (48,016) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 30,011 EXPENSE TO THE COOPERATIVE $ 35,996 CHARLES TURNER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 50,433 401(K) EMPLOYER CONTRIBUTION 5,851 TOTAL COLUMN C $ 56,284 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (50,433) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 29,342 EXPENSE TO THE COOPERATIVE $ 35,193 VICKI SARGENT: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 43,590 401(K) EMPLOYER CONTRIBUTION 5,158 TOTAL COLUMN C $ 48,748 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (43,590) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 25,481 EXPENSE TO THE COOPERATIVE $ 30,639 DYAN JAMES: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 24,328 401(K) EMPLOYER CONTRIBUTION 5,415 TOTAL COLUMN C $ 29,743 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (24,328) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 26,137 EXPENSE TO THE COOPERATIVE $ 31,552 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 4 DURING THE YEAR, THE COOPERATIVE'S BYLAWS WERE AMENDED. THE FOLLOWING IS A SUMMARY OF THE CHANGES: ARTICLE III - MEETINGS OF MEMBERS SECTION 3.5. QUORUM, WAS AMENDED TO STATE "IF THE BOARD DETERMINES, THAT ONE OR MORE OTHER METHODS OF VOTING IN ADDITION TO MAIL BALLOT ARE TO BE USED, THE MEMBERS SHALL BE INFORMED OF THE METHOD(S) OF VOTING TO BE USED AT THE MEETING." PARAGRAPH (C) WAS ADDED TO THE SECTION AND STATES "IN CONNECTION WITH ANY MATTER OF BUSINESS OF THE COOPERATIVE, INCLUDING THE ELECTION OF DIRECTORS, SUBMITTED TO A VOTE AT A MEETING OF THE MEMBERS WHERE THE MEMBERS ARE ALLOWED TO VOTE BY ELECTRONIC BALLOT, THE BOARD SHALL CAUSE INSTRUCTIONS ON HOW TO ACCESS AND CAST ELECTRONIC BALLOTS TO BE PREPARED AND SUBMITTED TO THE MEMBERS (AS OF THE RECORD DATE) FOR THEIR ACTION. THE ELECTRONIC BALLOTS SHALL SPECIFY THE MEMBER MEETING TO WHICH THEY CORRESPOND, LIST EACH ISSUE OR QUESTION SUBMITTED AND, IF DIRECTORS ARE TO BE ELECTED, LIST THE NAMES OF PERSON(S) NOMINATED FOR DIRECTORS, AND EACH ELECTRONIC BALLOT SHALL CONTAIN AND PROVIDE A PLACE WHERE THE MEMBER MAY INDICATE SUCH MEMBER'S VOTE. EACH MEMBER SHALL BE INSTRUCTED THAT SUCH MEMBER'S ELECTRONIC BALLOT MUST BE RECEIVED BY 5:00 P.M. (LOCAL TIME) AT THE LOCATION DETERMINED BY THE BOARD OR, IF NO SUCH DETERMINATION IS MADE, AT THE COOPERATIVE'S PRINCIPAL OFFICE, AT LEAST FIVE (5) DAYS BEFORE THE DATE OF THE MEETING. IF MEMBERS ARE ALSO ALLOWED TO VOTE IN PERSON AT THE MEMBER MEETING TO WHICH SUCH ELECTRONIC BALLOT CORRESPONDS, THEN MEMBERS SUBMITTING A COMPLETED ELECTRONIC BALLOT MAY NOT VOTE IN PERSON AT SUCH MEETING REGARDING ANY MATTER DESCRIBED IN SUCH BALLOT. IF VOTING BY ELECTRONIC BALLOT, EACH ELECTRONIC BALLOT SHALL BE SIGNED OR SIMILARLY AUTHENTICATED BY THE MEMBER AND SUBMITTED THROUGH THE ELECTRONIC SYSTEM SELECTED BY THE BOARD FOR THE SUBMISSION OF SUCH ELECTRONIC BALLOTS." THE PREVIOUS PART (C) WAS AMENDED TO PART (D) AND ADDED ELECTRONIC BALLOTS AS A METHOD OF VOTING. ARTICLE IV - BOARD OF DIRECTORS SECTION 4.2. ELECTION AND TENURE, WAS AMENDED TO STATE "THE PERSONS SERVING AS DIRECTORS OF THE COOPERATIVE SHALL COMPOSE THE BOARD UNTIL THEIR RESPECTIVE TERMS HAVE EXPIRED AND THEIR RESPECTIVE SUCCESSORS DULY QUALIFIED. THE DIRECTORS SHALL EACH BE ASSIGNED A DISTRICT. THE DISTRICTS SHALL BE NUMBER SO THAT DIRECTOR ELECTIONS SHALL OCCUR, AND DIRECTOR TERMS SHALL EXPIRE AS FOLLOWS: (A) DISTRICTS 1 AND 5, ELECTIONS FOR FOUR-YEAR TERMS IN 2021, 2025, AND EVERY FOUR (4) YEARS THEREAFTER; (B) DISTRICTS 2 AND 7, ELECTIONS FOR FOUR-YEAR TERMS IN 2022, 2026, AND EVERY FOUR (4) YEARS THEREAFTER; (C) DISTRICTS 3 AND 6, ELECTIONS FOR FOUR-YEAR TERMS IN 2023, 2027, AND EVERY FOUR (4) YEARS THEREAFTER; AND (D) DISTRICT 4, AN ELECTION FOR ONE FIVE-YEAR TERM IN 2023, THEN ELECTIONS FOR FOUR -YEAR TERMS IN 2028, 2032, AND EVERY FOUR (4) YEARS THEREAFTER." SECTION 4.3. VOTING DISTRICTS, WAS AMENDED TO STATE THAT ONE MEMBER FROM EACH DISTRICT SHALL BE ELECTED TO THE BOARD AND THE BOARD SHALL REVIEW THE COMPOSITION OF THE DISTRICTS AT LEAST ONCE EVERY THREE (3) YEARS. SECTION 4.4. TERMS OF DIRECTORS, WAS AMENDED TO STATE THAT "DIRECTORS SHALL BE ELECTED BY THE MEMBERS FOR A TERM OF FOUR (4) YEARS (EXCEPT FOR A SINGLE FIVE-YEAR TERM FOR DISTRICT 4, THEN FOUR-YEAR TERMS, AS DESCRIBED FURTHER IN SECTION 4.2)". SECTION 4.8. ELECTION OF DIRECTORS, WAS AMENDED TO ALLOW ELECTRONIC BALLOTS AS A METHOD OF VOTING AS WELL AS AMEND THE TERM "CANDIDATE" TO "NOMINEE". THE SECTION ALSO ADDED PARAGRAPHS (C)(D) AND (E) WHICH STATE "(C) IN THE EVENT A NOMINEE FROM A GIVEN DISTRICT WITHDRAWS FROM AN ELECTION PRIOR TO OR ON THE LAST DATE THAT THE COOPERATIVE IS ABLE TO REMOVE THE NOMINEE'S NAME FROM THE BALLOT, THE COOPERATIVE WILL REMOVE THE NOMINEE'S NAME FROM THE BALLOT AND, IF THE ELECTION FROM WHICH THE NOMINEE WITHDREW IS A RUN-OFF ELECTION, THE RUN-OFF ELECTION WILL BE BETWEEN THE REMAINING NOMINEES FOR THAT DISTRICT RECEIVING THE HIGHEST AND NEXT HIGHEST NUMBER OF VOTES UPON THE ORIGINAL BALLOT. (D) IN THE EVENT A NOMINEE FROM A GIVEN DISTRICT WITHDRAWS FROM AN ELECTION AFTER THE LAST DATE THAT THE COOPERATIVE IS ABLE TO REMOVE THE NOMINEE'S NAME FROM THE BALLOT, THERE IS MORE THAN ONE OTHER NOMINEE FOR THAT DISTRICT, AND NONE OF THE REMAINING NOMINEES RECEIVES A MAJORITY OF THE VOTES CAST (INCLUDING THE VOTES CAST FOR THE WITHDRAWN NOMINEE) UPON THE ORIGINAL BALLOT, THEN A RUN-OFF ELECTION SHALL BE CONDUCTED BETWEEN THE REMAINING NOMINEES RECEIVING THE HIGHEST AND NEXT HIGHEST NUMBER OF VOTES. (E) IN THE EVENT A NOMINEE FROM A GIVEN DISTRICT WITHDRAWS FROM A RUN-OFF ELECTION AFTER THE LAST DATE THAT THE COOPERATIVE IS ABLE TO REMOVE THE NOMINEE'S NAME FROM THE BALLOT AND THERE IS ONLY ONE OTHER NOMINEE FOR THAT DISTRICT, THE REMAINING NOMINEE SHALL BE CONSIDERED ELECTED AS DIRECTOR." ARTICLE VI - BOARD OFFICERS; OTHER OFFICERS AND AGENTS SECTION 6.S. ELECTION AND TERM OF OFFICE, WAS AMENDED TO STATE "THE TERMS OF SUCH ELECTED OFFICERS SHALL BEGIN THE DAY AFTER THE BOARD MEETING AT WHICH THEY ARE ELECTED, AND EACH OFFICER SHALL HOLD OFFICE UNTIL HIS OR HER SUCCESSOR SHALL HAVE BEEN ELECTED AND SHALL HAVE QUALIFIED." A COMPLETE COPY OF THE BYLAWS CAN BE FOUND ON THE COOPERATIVE'S WEBSITE: HTTPS://WWW.COSERV.COM. 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: PATRONAGE DIVIDENDS RESULT FROM THE PURCHASE OF WHOLESALE POWER FROM A GENERATION & TRANSMISSION COOPERATIVE. PATRONAGE DIVIDENDS ALSO 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 $ 28,379,363 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (307,300) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (1,367,678) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 11,290,505 TOTAL WAGES ACCRUED AND/OR PAID $ 37,994,890 FORM 990, PART IX, LINE 24: ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL SALARIES, BENEFITS, & OTHER $ 1,044,831 OUTSIDE SERVICES 6,019,758 PROPERTY INSURANCE 1,031,671 LOSS/DAMAGES 272,813 MISCELLANEOUS GENERAL EXPENSE 7,266,910 RENTS EXPENSE 163,709 MAINTENANCE OF GENERAL PLANT 9,229 TOTAL ADMIN & GENERAL EXP $ 15,808,921 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 2021 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 $ 4,047,359 SALES 1,696,377 MISCELLANEOUS 42,603 TOTAL OTHER EXPENSES $ 5,786,340 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED 65,502,626. PATRONAGE CAPITAL RETIRED - TOTAL -59,509. PATRONAGE CAPITAL RETIRED - DISCOUNT 13,097. EQUITY METHOD INCOME (LOSS) FROM SUBSIDIARY COMPANY 5,418,922. NET CHANGE IN MEMBERSHIPS 245,839. OTHER COMPREHENSIVE INCOME - POST EMPLOYMENT BENEFITS & AFFILIATES 1,742,948. 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. 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