Woodruff Electric Cooperative Corp

“MEMBERS”

“The members elect the members of the governing body.”

“The members approve significant decisions of the documents or bylaws regarding compensation of officers and governing body.”

“Internal review by accounting staff, president/ceo, and governing body.”

“Our policy requires directors and employees to report any potential conflict of interest. Any observed and not reported conflict of interest by other staff or directors will be addressed for compliance.”

“Available to the public at their request.”

“Form 990, part ix, line 4: pursuant to the form 990 instructions, the amount of patronage dividends paid to members (hereinafter referred to as "patronage dividends paid") refers to the process, subsequent to year-end, by which the cooperative allocates partronage 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 calendar tax 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 cooeprative's by-laws. 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 current 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.”

“Cost of power 25,253,933 0 0 transmission-maintenance 31,400 0 0 distribution-operation 5,608,011 0 0 distribution-maintenance 4,097,152 0 0 customer accounts expense 1,251,367 0 0 customer services & info 460,461 0 0 admin & general expense 2,983,113 0 0 taxes 299 0 0 other deductions -1,989 0 0 employee comp reported above -6,611,172 0 0 total 33,072,575 0 0”

“Retirement of capital credits, change in memberships, and other misc.”

“Temp diff between allocated and retired cap credit 4,094,965 change in memberships -635 total 4,094,330”