East Central Energy

“The organization is a member owned cooperative.”

“There is one class of membership and members elect the board of directors.”

“The members vote on bylaw changes and any other decisions as specified in the bylaws.”

“Copies of form 990 are provided to the board of directors for their review and discussed at the east central energy board meeting.”

“East central energy enforces what is in the employee handbook related to conflicts of interest.”

“Human resource department gathers market compensation data for all employees and the board of directors performs a review and determines the ceo compensation. Other key employee compesnation is determined by the ceo.”

“Governing documents and the financial statements are available on east central energy's website and by request. The conflict of interest statement is in the employee handbook and is not available to the public.”

“Included in column (f), estimated amount of other compensation, is the estimated annual increase in the actuarial value of the defined benefit plan. The estimated increase for steve shurts is $75,355, $145,750 for cheryl hagfors, $94,192 for vern johnson, $18,327 for mark machovec and $44,361 for joseph diethelm. These amounts are estimates in the increase of the value of the plan and are not current year expenses of the cooperative. The current year expense for this defined benefit plan was $63,662, $50,162, $50,406, $20,946 and $20,946, respectively.”

“As required by form 990 instructions, form 990, part ix, line 4 (benefits paid to or for members) includes patronage dividends paid. This amount is an expense for purposes of form 990, but is not recognized as an expense under g.a.a.p. Reporting requirements, which are used for book income. The result is a book to tax difference which is disclosed on part xi. In reference to part ix, line 4, the cooperative has interpreted "patronage dividends paid" as capital credits allocated to members under the preexisting obligations pursuant to the bylaws of the cooperative.”

“Northland connect broadband k-1 - t -3,105. Local access network k-1 - tax to b -50,210. Retirement of capital credits -4,641,655. Allocated capital credits 11,338,767.”