2021-11-15T21:48:13-06:00 2020-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2020-01-01 751668526 RAYBURN COUNTRY ELECTRIC COOPERATIVE INC RAYB 4694022100 PO BOX 37 ROCKWALL TX 75087 DAVID BRAUN CFO 4694022100 2021-11-15 1 DAVID BRAUN 999009999 WILLIAM M MILLER P00439459 8067473806 2021-11-13 X 2 AAL1 IAL1 2020 2022-09-23 18:48:47Z DAVID NAYLOR PO BOX 37 ROCKWALL TX 75087 326479261 0 X WWW.RAYBURNELECTRIC.COM X 1979 TX TO PROVIDE WHOLESALE POWER SUPPLY AND REGULATORY REPRESENTATION ON BEHALF OF ITS MEMBERS. 4 4 47 0 28854 28154 0 0 368132335 325485730 932326 726783 49208 131078 369113869 326343591 2067 6450 3817120 8411586 5117957 6219869 0 0 0 360147943 311606721 369085087 326244626 28782 98965 450181484 478936506 338394884 358789645 111786600 120146861 TO MAXIMIZE THE VALUE OF OUR MEMBERS' INVESTMENT WHILE MAINTAINING COMPETITIVE WHOLESALE POWER COSTS AS WE EXEMPLIFY INTEGRITY AND EXCELLENCE. 0 0 PROVIDING WHOLESALE ELECTRIC ENERGY TO 4 DISTRIBUTION COOPERATIVE MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. 0 0 0 0 0 0 0 0 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 65 0 47 1 1 1 0 0 0 0 321571880 4512979 0 0 0 X 4 4 1 0 0 0 1 1 1 1 0 0 0 0 1 1 1 1 1 1 1 0 X DAVID BRAUN CFO 4694022100 950 SIDS ROAD ROCKWALL TX 75032 X DAVID MCGINNIS VICE CHAIRMAN 10.00 X X 4158 0 0 JOHN ED SHINPAUGH SECRETARY/TREASURER 1.75 X X 3498 0 0 MARK STUBBS CHAIRMAN 6.00 X X 2843 0 0 JEFF LANE DIRECTOR 1.70 X 2600 0 0 HOWARD TILLISON ALTERNATE DIRECTOR 1.10 X 2576 0 0 STEVE COLLIDA ALTERNATE DIRECTOR 1.00 X 2529 0 0 BILL SAMUELS ALTERNATE DIRECTOR 1.50 X 1862 0 0 PAUL KIRKLAND MAY-DEC ALTERNATE DIRECTOR 1.50 X 1633 0 0 RAY HOUSTON JAN-APR ALTERNATE DIRECTOR 1.30 X 781 0 0 DAVID NAYLOR PRESIDENT/CEO 40.00 X 597287 0 85679 DAVID BRAUN CFO 40.00 X 273890 0 73569 STEPHEN GEIGER COO 40.00 X 244548 0 67943 JENNIFER EDMONDSON GENERAL COUNSEL 40.00 X 235666 0 68826 CHASE SNUFFER VICE PRESIDENT, CIO 40.00 X 211577 0 64225 FRANK OWENS DIRECTOR OF COMPLIANCE 40.00 X 176727 0 59935 RICKY GILLEAN OPERATIONS MANAGER 40.00 X 158803 0 57030 JOHNNY ALRID DIRECTOR OF INFORMATION SECURITY 40.00 X 154297 0 56793 SCOTT DONHAM SYSTEMS ENGINEER II 40.00 X 151936 0 56055 STEPHANIE HUNT CONTROLLER 40.00 X 150877 0 50926 2378088 0 640981 22 0 1 0 RE-CON COMPANY 12 NORTHEAST 52ND OKLAHOMA CITY OK 73105 CONSTRUCTION SERVICES 7189162 VOLT POWER 2910 HWY 31 NW HARTSELLE AL 35640 CONSTRUCTION SERVICES 5715125 TRI-CON SERVICES INC PO BOX 472867 GARLAND TX 75047 CONSTRUCTION SERVICES 2876749 R-DELTA ENGINEERS INC 618 MAIN STREET GARLAND TN 75040 ENGINEERING SERVICES 2839172 HUFFMAN COMMUNICATION SALES PO BOX 1753 CORSICANA TX 75151 COMMUNICATIONS 2813079 23 X SALES OF ELECTRICITY 221000 324582652 324582652 PATRONAGE DIVIDENDS 221000 897113 897113 OTHER PROGRAM REVENUE 221000 5965 5965 325485730 801470 801470 18800 41671 0 8617 18800 33054 51854 23000 28854 52366 127053 -74687 -74687 -74687 OTHER PASS-THROUGH INVESTMENT 523000 79224 79224 79224 326343591 325587954 28854 726783 X 6450 8411586 1945690 2730681 313003 947373 283122 11844178 15143159 PURCHASED POWER 197766845 TRANSMISSION EXPENSE 43100510 POWER GENERATION 37255197 UNRELATED BUS. INC. TAX 4310 6492522 326244626 18050767 17886713 20562661 21918938 1500543 1068489 53971535 34668477 548317588 161722004 338815450 386595584 17140312 16669717 140216 128588 450181484 478936506 23721211 27534651 290540247 324701311 24133426 6553683 338394884 358789645 X 0 0 5929429 5929429 105857171 114217432 111786600 120146861 450181484 478936506 X 98965 8261296 X X 0 1 X 0 0 24643803 24643803 60159069 1209289 58949780 278659708 112806167 165853541 184855008 47706548 137148460 386595584 ACCUMLATED PROVISION FOR POST-RETIREMENT BENEFITS 1462045 DEFERRED CREDITS - RATE REFUND (LONG TERM) -68324 ACCRUED PROPERTY TAXES 688429 RATE REFUND (SHORT TERM) 4471533 6553683 X 326248933 8617 8617 326240316 103275 103275 326343591 317837347 8617 8617 317828730 8415896 8415896 326244626 PART X, LINE 2: THE COOPERATIVE FOLLOWS THE PROVISIONS OF UNCERTAIN TAX POSITIONS AS ADDRESSED IN FASB ACCOUNTING STANDARDS CODIFICATION 740-10-65-1. 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 (IRS), OR OTHER STATE TAXING AUTHORITY, AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XI, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES RECLASSIFIED FOR FORM 990 REPORTING 8,617. PART XI, LINE 4B - OTHER ADJUSTMENTS: PARTNERSHIP PASS-THROUGH NET K-1 INCOME 98,965. EXPENSE RECLASSIFIED FROM NON-OPERATING MARGINS 4,310. PART XII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES RECLASSIFIED FOR FORM 990 REPORTING 8,617. PART XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 8,411,586. EXPENSE RECLASSIFIED FROM NON-OPERATING MARGINS 4,310. PART VIII: THE AMOUNT OF INVESTMENTS - PROGRAM RELATED ON FORM 990, PAGE 11, PART X, LINE 13 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 VIII HAS BEEN LEFT BLANK. 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 XI, LINE 4B: FORM 990 IS REPORTING THE INVESTMENT INCOME REPORTED TO THE COOPERATIVE ON SCHEDULE K-1. THE AUDITED FINANCIAL STATEMENTS ARE REPORTING THIS INVESTMENT UNDER THE COST METHOD OF ACCOUNTING AND ONLY REPORTING INCOME WHEN DISTRIBUTIONS ARE RECEIVED. 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". PATRONAGE DIVIDENDS ARE ALLOCATED ON A PATRONAGE BASIS AND DONE SO PURSUANT TO A PRE-EXISTING OBLIGATION AS PROVIDED FOR THE IN THE "NON-PROFIT OPERATION" ARTICLE OF THE COOPERATIVE'S BYLAWS. X X 0 0 0 DAVID NAYLOR PRESIDENT/CEO 550128 0 10481 0 36678 0 45703 0 39976 0 682966 0 0 0 DAVID BRAUN CFO 254138 0 4945 0 14807 0 34879 0 38690 0 347459 0 0 0 STEPHEN GEIGER COO 232308 0 4712 0 7528 0 29664 0 38279 0 312491 0 0 0 JENNIFER EDMONDSON GENERAL COUNSEL 230495 0 4485 0 686 0 30547 0 38279 0 304492 0 0 0 CHASE SNUFFER VICE PRESIDENT, CIO 199776 0 3962 0 7839 0 26486 0 37739 0 275802 0 0 0 FRANK OWENS DIRECTOR OF COMPLIANCE 171055 0 3302 0 2370 0 22666 0 37269 0 236662 0 0 0 RICKY GILLEAN OPERATIONS MANAGER 151690 0 2928 0 4185 0 20100 0 36930 0 215833 0 0 0 JOHNNY ALRID DIRECTOR OF INFORMATION SECURITY 150139 0 3077 0 1081 0 19918 0 36875 0 211090 0 0 0 SCOTT DONHAM SYSTEMS ENGINEER II 136001 0 2625 0 13310 0 19395 0 36660 0 207991 0 0 0 STEPHANIE HUNT CONTROLLER 146928 0 2885 0 1064 0 14086 0 36840 0 201803 0 0 0 FORM 990, PART VI, SECTION A, LINE 1 THE COOPERATIVE HAS 4 BOARD MEMBERS, AND 4 ALTERNATE BOARD MEMBERS. EACH ALTERNATE REPRESENTS THE SAME ORGANIZATION FOR WHOM THEY ARE THE ALTERNATE. ALTERNATES ONLY VOTE IF THEIR REGULAR BOARD MEMBER IS NOT IN ATTENDANCE. FORM 990, PART VI, SECTION A, LINE 2 A BUSINESS RELATIONSHIP EXISTS BETWEEN DAVID MCGINNIS, DIRECTOR, AND DAVID NAYLOR, PRESIDENT/CEO. BOTH SERVE ON THE BOARD OF ALLIANCE FOR COOPERATIVE ENERGY SERVICES POWER MARKETING, LLC (ACES) AT THE REQUEST OF AND FOR THE BENEFIT OF THE COOPERATIVE. FORM 990, PART VI, SECTION A, LINE 6 THE COOPERATIVE WAS FORMED BY THE MEMBERS TO PROVIDE WHOLESALE POWER AND TRANSMISSION SERVICES AT COST ON A COOPERATIVE BASIS. FORM 990, PART VI, SECTION A, LINE 7A THE MEMBERS OF THE COOPERATIVE EACH APPOINT A REPRESENTATIVE TO SERVE ON THE BOARD OF DIRECTORS. 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 SUBSEQUENT TO TO FILING. FORM 990, PART VI, SECTION B, LINE 12C ON AN ANNUAL BASIS, OFFICERS AND EMPLOYEES ARE REQUIRED TO COMPLETE AND SIGN A CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM. IF POLICIES NEED TO BE UPDATED, THEY ARE DRAFTED AND THEN REVIEWED WITH LEGAL COUNSEL BEFORE PRESENTATION TO THE BOARD OF DIRECTORS FOR THEIR REVIEW AND APPROVAL. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE COOPERATIVE'S PRESIDENT/CEO. THE SURVEY INCLUDES SALARIES FROM SIMILARLY SITUATED COOPERATIVES THROUGHOUT TEXAS AND THE NATION. THE BOARD AND THE PRESIDENT/CEO USE A COMPENSATION SURVEY 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 SIMILARLY SITUATED COOPERATIVES THROUGHOUT TEXAS AND THE NATION. FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE'S GOVERNING DOCUMENTS AND POLICIES ARE AVAILABLE UPON REQUEST. AUDITED FINANCIAL STATEMENTS ARE PROVIDED TO POWER PROVIDERS, MEMBERS AND LENDERS AS REQUIRED BY AGREEMENTS WITH EACH. 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. EMPLOYER CONTRIBUTIONS ARE AVAILABLE TO PARTICIPATING EMPLOYEES, INCLUDING OFFICERS AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF THE PLAN. 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 AND HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF 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 PLAN, 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, PARTS VI & VII: THE COOPERATIVE ANNUALLY PROVIDES EACH DIRECTOR AND EMPLOYEE OFFICER 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. 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 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: THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED BY THE FEDERAL ENERGY REGULATORY COMMISSION. 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, LINE 24E: OTHER EXPENSES IS COMPRISED OF THE FOLLOWING: ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 9,577,400 LESS: RECLASS OF RENTAL EXP TO PART VIII, LINE 6B (7,316) LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (6,450) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (22,480) LESS: RECLASS OF LABOR TO PART IX, LINES 5&7 (2,823,180) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (1,251,755) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990 $ 5,466,219 OPERATING TAXES 1,026,303 TOTAL OTHER EXPENSES PER FORM 990, PART IX, LINE 24E $ 6,492,522 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 $ 4,676,371 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-NEC (22,480) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (360,242) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 539,408 PLUS: SALARIES AND WAGES CAPITALIZED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 361,960 TOTAL WAGES ACCRUED AND/OR PAID $ 5,195,017 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 2020 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 XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 8,411,586. OTHER COMPREHENSIVE INCOME - POST RETIREMENT HEALTH BENEFITS -51,325. BOOK/TAX DIFFERENCE ON PASS-THROUGH PARTNERSHIP INVESTMENT -98,965. 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.