NCC 72nd Annual Meeting Booklet

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2023

72ND ANNUAL MEETING MAKING CONNECTIONS

72ND ANNUAL MEETING 2023 MAKING CONNECTIONS

2023 ANNUAL MEETING OF MEMBERS

JUNE 20TH, 2023 I RAY, NORTH DAKOTA

AGENDA

5:00 P.M.

• REGISTRATION

• MEAL BEGINS

• KIDS ACTIVITIES

• DEMONSTRATION BOOTHS

• LIVE MUSIC

BUSINESS MEETING – 6:00 P.M.

• CALL TO ORDER

• REPORT OF QUORUM

• NATIONAL ANTHEM

• READING OF THE MINUTES OF 2022 MEETING

• ATTORNEY’S REPORT

BYLAW AMENDMENTS

• ELECTION OF TWO (2) DIRECTORS

• FINANCIAL REPORT

• INTRODUCTIONS

• PRESIDENT AND GENERAL MANAGER’S REPORT

• UNFINISHED BUSINESS

• NEW BUSINESS

• REPORT OF ELECTION

• ADJOURNMENT

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2022 MINUTES OF THE ANNUAL MEETING OF NORTHWEST COMMUNICATIONS COOPERATIVE

The 2022 Annual Meeting of the members of the Northwest Communications Cooperative (NCC) was held in Ray, North Dakota on Tuesday, June 21, 2022. The Annual Meeting was attended in person by 245 people, including 152 voting members. The meeting was also broadcast live on television and via Facebook. At the meeting’s close, cash and prizes donated by merchants and the Cooperative were awarded to the members through drawings.

CALL TO ORDER

The meeting was called to order at 6:00 p.m. by President AJ Cvancara. President Cvancara declared that a quorum was present and proper notice of the annual meeting had been given in accordance with the By-Laws of the Cooperative. The national anthem was then played.

PRESENTATION OF MINUTES OF 2021 ANNUAL MEETING

President Cvancara drew attention to the 2021 Annual Meeting Minutes contained in the Annual Report booklet and requested approval of the same.

MOTION: Duly made, seconded and unanimously carried to dispense with the reading of the June 15, 2021 Annual Meeting Minutes and approve to the Minutes as printed in the 2022 Annual Report booklet, pages 3-4.

ATTORNEY’S REPORT:

Attorney Jennifer Gjovig reported on By-Law changes made in the last year. These changes were published on the screen for viewing by the membership while Attorney Gjovig discussed them.

FINANCIAL REPORT:

CFO Jen Bingeman presented NCC’s 2021 Financial Report as shown in the 2022 Annual Report booklet, pages 5-6.

MOTION: Duly made, seconded, and unanimously carried to accept the audited 2021 Financial Report as shown in the 2021 Annual Report booklet, pages 5-6.

ELECTION OF DIRECTORS

Secretary/Treasurer Roger Manger presented the Certificate of Director Nominations, verifying that the following members were nominated by petition as Directors for three-year terms:

Leslie Grubb – District 5

Lorena Lambrecht – District 6

INTRODUCTION OF CANDIDATES AND ELECTION

President Cvancara indicated that the By-Laws of NCC require that candidates for election as Directors must be nominated by petition. Because there was no contest for District 5 or District 6 Director positions, President Cvancara entertained a motion from the floor to caste a unanimous ballot for Leslie Grubb for Director from District 5 and Lorena Lambrecht for Director from District 6.

MOTION: Duly made, seconded and unanimously carried that Secretary/Treasurer Manger cast a unanimous ballot for Leslie Grubb as Director of District 5 and Lorena Lambrecht for Director of District 6.

INTRODUCTION

President Cvancara introduced the following parties and also recognized former Directors, Veterans and non-member guests in attendance:

District 1 – (Grenora, Marmon & Round Prairie) Roger Manger & MaryLou

District 2 – (Ray & Epping) Troy Donnelly & Deanna

District 3 – (Wildrose, Alamo, McGregor, & Noonan) AJ Cvancara & Katy

District 4 – (Flaxton, Lignite, & Bowbells) Nate Jepsen & Lenell

District 5 – (Powers Lake & Columbus) Leslie Grubb & Tyler

District 6 – (Tioga) Lorena Lambrecht & Daren

District 7 – (Crosby) Jim Simonson & Sandra

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Continued on next page

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PRESIDENT AND MANAGER’S REPORT

President Cvancara thanked Kickin’ It Entertainment for dj and equipment services, DMJ for the entertainment and National Anthem, Ray Fire Department for help with cleanup efforts, Ray FBLA Students for assisting with childcare, Ronda Rustad for coordinating children’s activities, Pour Some Sugar Bakery and Thoresons’s Meat for food preparation and all the NCC’s employees for their hard work for the annual meeting and serving dinner. He then called the members’ attention to the General Manager’s Report in the Annual Report booklet on page 8-9 and introduced GM/CEO Jeremy Becker.

GENERAL MANAGER’S REPORT

GM/CEO Becker drew attention to the joint General Manager and Board President’s Report in the 2022 Annual Report booklet on pages 8-9. He addressed federal programs for the industry, noted infrastructure and service improvements at NCC, as well as highlighted NCC’s community contributions and overall financial health, the latter of which allowed for $1.5 million dollars in capital credit retirement.

UNFINISHED BUSINESS

President Cvancara called for unfinished business and none was presented.

NEW BUSINESS

President Cvancara called for new business and none was presented

ADJOURNMENT

Following the completion of the Agenda, President Cvancara announced that the Directors, General Manager, attorney and employees would be available after the meeting to answer any questions. President Cvancara then called for a motion to adjourn the meeting.

MOTION: Duly made, seconded and unanimously carried to adjourn the meeting.

Respectfully submitted, -ROGER MANGER, Secretary ATTEST: AJ CVANCARA, President

2022 minutes continued NUMBERS YOUR NCC SMART RURAL COMMUNITY BY THE of the premises in NCC’s service area are eligible for internet service of premises are eligible for Gigabit speeds 8 11+ SCHOOLS Advanced connectivity and unlimited educational opportunities to all 8 schools in Williams, Divide, and Burke Counties 99% 98% MORE THAN (AND GROWING!) Services to 7 medical clinics, 2 hospitals, 2 long term care facilities and several non-proﬁts 43 EMPLOYEES 7 BOARD OF DIRECTORS 15,000 PEOPLE ABOUT 3,500 SQUARE MILES SERVED • Farm Service Agencies • 911-PSAP Centers • County and City Government O ces • Ambulance Service Stations • Law Enforcement Facilities Senior and Community Centers • Chamber of Commerce and Economic Development E orts • Extension O ces • Veterans A airs O ces NCC’s broadband service is essential to community-based government entities like: NCC SERVICE AREA MAP Grenora Marmon Alamo Crosby Noonan Columbus Columbus Ray Epping Tioga McGregor Powers Lake Bowbells Flaxton Lignite Portal Round Prairie Created by Pivot 4

2022 FINANCIAL REPORT

ASSETS

5 2022 2021

CURRENT ASSETS: Cash and Cash Equivalents $6,874,425 $1,835,756 Accounts Receivable $1,773,503 $ 953,647 Other Accounts Receivable $4,483 $81,105 Notes Receivable, Current Portion $1,161 $ 4,494 Income Tax Receivable $25,313Materials and Supplies $619,924 $392,266 Debt Securities, Current Portion $220,222 $71,133 Equity Securities $5,710,684 $10,069,956 Other Current Assets $269,337 $333,380 Total Current Assets $15,499,052 $13,741,737 NON-CURRENT ASSETS: Investment in Affiliates $6,402,543 $6,166,186 Investments in Nonaffiliates $565,673 $591,654 Debt Securities $2,104,126 $2,421,366 Notes Receivable, Long-Term Portion $5,000 $10,416 Intangible Assets $55,939 $25,939 Deferred Tax Assets $368,824Total Non-Current Assets $9,502,105 $9,215,5612 PROPERTY, PLANT & EQUIPMENT: Regulated Telecommunications Plant in Service $87,523,999 $85,994,499 Regulated Telecommunications Plant under Construction $409,637 $813,320 Nonregulated Plant in Service $7,850,458 $8,131,850 Total Investment in Plant $95,784,094 $94,939,669 Less Accumulated Depreciation and Amortization $43,232,168 $39,715,038 Net Property, Plant, and Equipment $52,551,926 $55,224,631 TOTAL ASSETS: $77,553,083 $78,181,929

LIABILITIES AND EQUITIES CURRENT LIABILITIES: Accounts Payable, General $271,170 $454,362 Advance Billing and Customer Deposits $26,074 $25,175 Current Maturities of Long-Term Debt $1,789,622 $1,745,958 Income Taxes Payable - $29,658 Other Accrued Liabilities $318,694 $301,054 Total Current Liabilities $2,405,560 $2,556,207 NONCURRENT LIABILITIES: Long-term Debt, Net of Current Maturities $25,394,875 $27,184,498 MEMBER’S EQUITY: Total Member’s Equity $49,752,648 $48,441,224 TOTAL LIABILITIES & EQUITY: $77,553,083 $78,181,929

2022 2021

OPERATING STATEMENT

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Northwest Communications Cooperative and subsidiary as of December 31, 2022 and 2021, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Adams, LLP- Spokane, Washington - 2023

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2022 2021 OPERATING REVENUES: Wireline $13,900,699 $12,923,066 Internet $4,580,449 $4,441,446 Video $2,117,571 $2,148,294 Miscellaneous $2,484,734 $2,658,946 TOTAL OPERATING REVENUES $23,083,453 $22,171,752 OPERATING EXPENSES: Plant-Specific Operations $3,160,042 $2,765,898 Plant-Nonspecific Operations $1,481,676 $1,350,260 Depreciation and Amortization $4,474,993 $4,453,666 Customer Operations $596,518 $601,694 Corporate Operations $2,353,917 $2,106,153 Other Operating Taxes $34,293 $37,834 Nonregulated $6,802,983 $6,695,026 TOTAL OPERATING EXPENSES $18,904,422 $18,010,531 NET OPERATING MARGINS: $4,179,031 $4,161,221 NON OPERATING REVENUE (EXPENSE): Interest and Dividend Income $740.929 $688,191 Loss on Disposal of Plant $(689) $(302,537) Investment Income $(1,450,352) $206,214 Gain on Debt Forgiveness - $1,087,500 Interest Expense $(706,530) $(771,122) Allowance for funds used during construction (AFUDC) $9,686 $12,187 Income from Affiliates $668,798 $1,009,127 Other Nonoperating Expense ($15,572) $46,916 TOTAL NON OPERATING REVENUE ($753,730) $1,976,476 MARGINS BEFORE INCOME TAXES $3,425,301 $6,137,697 INCOME TAX EXPENSE: ($246,740) $101,411 NET MARGINS $3,672,041 $6,036,286

Moss

DIRECTOR CANDIDATES

AJ CVANCARA CANDIDATE FOR DISTRICT #3 WILDROSE, ALAMO, McGREGOR, & NOONAN

AJ graduated from Wildrose-Alamo High School. He received an AS degree from Bismarck State College and a BA Degree from Dickinson State University.

AJ is currently farming with his Dad in the Wildrose area. He and his wife Katy have three children, Austyn, Bridger, and Lainy. AJ is currently President of the NCC Board of Directors, Secretary/Treasurer for the Wildrose Fire Protection District and also Serves on the Ray Ambulance District Board.

In his spare time, AJ enjoys spending time on the water in the summer and the ice in the winter.

JIM SIMONSON CANDIDATE FOR DISTRICT #7 CROSBY

The District #7 incumbent is Jim Simonson of Crosby.

Jim is a retired farmer (20 years) and retired agent for Farmers Union Insurance (15 years). Besides enjoying serving on the NCC Board of Directors, Jim currently is the President of “Northwest Holdings LLC” (a 24-unit apartment complex), Secretary of “Grow Crosby LLC”, which is an investment group who owns “The Guardian Inn” (a 63-unit Hotel) and “The Bypass Bar & Grill”, all located in Crosby. He is a past member of the Divide County School Board, the Divide County Dollars for Scholars Board and Concordia Lutheran Church Council, all of Crosby.

Jim has served as President of the NCC Board and the President of the State Association of Rural Telephone Cooperatives, currently known as BAND.

Jim and his wife, Sandra have five grown children. They enjoy camping, golfing and traveling to visit their children who live between Great Falls, MT, and Iowa City, IA. They reside on their farm located three miles west of Crosby.

DOUG ANDERSON

CANDIDATE FOR DISTRICT #7 CROSBY

Doug is a multi-generational resident of Divide County. He graduated from Divide County High School and received a BS degree in Organizational Administration from Northwestern College in St. Paul, MN.

Doug serves on several boards both locally and regionally including Assembly of God Church, Burke Divide Williams Water, Northwest Rural Water District, Western Area Water Supply Authority, and ND Rural Water Users Association. He is on his third term as a Crosby City Councilman. In the past, Doug served in various entities both locally and statewide in the field of Emergency Services.

Doug currently works as a substitute teacher in Divide County School District as well as Grenora and Williston. He looks forward to serving in a broader capacity in our region however that may look.

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PRESIDENT AND MANAGER’S REPORT

MAKING CONNECTIONS

JEREMY BECKER General Manager/CEO

WELCOME TO OUR 72ND ANNUAL MEETING!

The Annual Meeting is one of the highlights of our year—a chance to interact with our valued members and owners and celebrate our accomplishments. We are honored to share with you today our annual report from 2022.

YOU’RE LIVING IN A SMART RURAL COMMUNITY

NCC is proud to be certified as a Smart Rural Provider by NTCA - The Rural Broadband Association—making the communities in our service area Smart Rural Communities! It’s an important designation we share with 100+ other Smart Rural Providers across the country who share our mission to bring fiber internet and other cutting-edge communications services to small-town America.

Here are just a few ways Smart Rural Communities like ours are building a brighter future:

• Enabling telehealth in rural areas, which have 25% fewer local physicians than urban areas

• Opening the door to telework, which can save workers an average of $2,500-4,000 in travel costs per year

Working together with community leaders and local businesses, we’re helping to grow the towns we serve and create opportunities that help our neighbors thrive.

Did you know?

Rural North Dakotans are more likely to have access to fiber broadband and Gigabit speeds than rural Americans in other states.*

*According to a 2020 report by the Institute for Local Self Reliance (ILSR)

A NEW ADDITION TO THE NCC COMMUNITY

In September of 2022, NCC signed a letter of intent to purchase the assets of the Portal Exchange. On April 3, 2023, this transaction became official, and NCC began serving Portal customers with communication services previously offered by RTC Networks. The Portal acquisition brought nearly 50 internet subscribers and roughly 90 landlines to the NCC network. We are excited to welcome the Portal Community to the NCC family!

As you know, NCC completed its fiber build out in 2020, which allows us to bring reliable and scalable high-speed broadband to all of our members. Although Portal has approximately one-third of the community already served with fiber, the existing two-thirds will be no exception to the rule, as NCC has committed to overbuild the remaining copper infrastructure with fiber. NCC has been awarded an ARPA Grant to help complete the Portal Fiber Project. We are hopeful to begin placing fiber during this year’s construction season, with work ending by the fall of 2024.

INTERNET YOU CAN DEPEND ON

Reliable high-speed internet plays an essential role in how we work, learn, communicate, and live our everyday lives. Year after year,

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AJ CVANCARA President

demand increases for internet service as our dependency on this essential technology continues to grow. In 2022, a study by Deloitte* found that the average number of entertainment and smart devices per home was 22.

Here at NCC, we live by the mantra, “our members depend on it.” For this reason, we are continuously monitoring and improving our network to meet ever-growing demand for broadband internet. We have been working to upgrade in-home electronics, increasing the capacity of our transport rings as well as adding another layer of redundancy with an additional internet route to the world wide web. These changes enhance network capacity and reliability.

• Almost 60% of NCC Internet subscribers has 5 to 14 devices in their home with (31) being the highest number of devices connected in a home with NCC Internent service.

• Greatest amount of bandwidth being consumed by a residential customer is 2.7 TB in a month timeframe.

Did you know?

Did you know that more than 98% (and growing) homes & businesses in NCC’s service area are eligible for Gigabit speeds?

KEEPING YOU SAFE ONLINE

Along with an increase in internet demand comes an increase in cybersecurity concerns. Cybersecurity education and best practices are a regular curriculum amongst NCC employees and Directors.

In fact, we’d like to share three simple cybersecurity practices that can keep you and your family safer online:

1. Use strong passwords with a large character count and a mix Of numeric digits, upper/lowercase letters, and special characters. Remember: NEVER reuse your passwords!

2. When in doubt, don’t click links or share personal information without first verifying the source is legitimate.

3. Use the myNCC Connect app for built-in protection against viruses and malware, and to manage your network and set parental control guidelines.

Our myNCC Connect app provides not only an added layer of protection against viruses, phishing and malware, but also allows users to monitor and manage devices connected to their home internet and the content available on these devices, providing a safer online experience for children. If you would like to learn more about this app, please stop by our booth, call our office, or visit us online at nccray.com

ANOTHER HEALTHY YEAR

As noted on the financial statements included within this booklet, NCC enjoyed another successful year of growth. We saw a slight increase in our Net Operating Margin over 2021, lowered our LongTerm Debt by nearly $2 million, and posted a $3.6 million Net Margin.

COMMITTED TO OUR COMMUNITY

NCC strives to support the communities we serve through donations, sponsorships, scholarships, and volunteering. In 2022, NCC gave over $70,000 back to the communities we serve.

OUR SINCERE THANKS

We have many reasons to celebrate this year—all thanks to our dedicated employees and loyal members. I would like to personally express my gratitude to our employees for everything they do to provide a reliable and memorable experience to our membership.

And on behalf of all NCC employees and the Board of Directors, we thank you, valued members, for your continued support.

Until we meet again, we wish you health, happiness, and a wonderful year ahead.

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2000 4000 6000 8000 10000 12000 14000 YEAR 2017 2018 2019 2021 2020 Average Total Internet Demand by All Subscribers 2022 2023 (As of May)

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Telephone SUBSCRIBERS Internet 2018 2019 2020 2021 2022 2018 2019 2020 0 1000 2000 3000 4000 5000 6000 2021 2022 4336 4637 4769 4837 4946 SUBSCRIBERS TOTAL INTERNET 5281 4544 4004 3587 3400 TOTAL TELEPHONE

SUBSCRIBER NUMBERS

2018 2019 2020 2021 2022

1851 2153 2168 2168 1953 TOTAL VIDEO MAKING CONNECTIONS 11

Video SUBSCRIBERS

BOARD OF DIRECTORS/ATTORNEY

As telecommunications have changed over recent years, Northwest Communications Cooperative has remained committed to providing cutting-edge communication to northwest North Dakota. We believe in the people we serve, so we offer technology with a healthy dose of human interaction. Our top-of-the-line communications technology is delivered with a handshake and a smile. Whether it’s internet, telephone, video, or security services, you can count on NCC’s commitment to consistency.

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JENNIFER GJOVIG Attorney ROGER MANGER Secretary/Treasurer, District 1 Marmon, Round Prairie & Grenora TROY DONNELLY District 2 Ray & Epping AJ CVANCARA President, District 3 Wildrose, McGregor, Noonan, & Alamo NATE JEPSEN District 4 Bowbells, Flaxton, Lignite & Portal LESLIE GRUBB District 5 Powers Lake & Columbus LORENA LAMBRECHT Vice President, District 6 Tioga

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JIM SIMONSON District 7 Crosby

NCC EMPLOYEES

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ANGELA SCHEPP Chief Marketing Officer BRYAN BENSON Communications Specialist ANGIE VIALL Customer Experience Rep BOB REOPELLE Communications Specialist

MAKING CONNECTIONS

BLANE ZELENY Communications Specialist COURTNEY OLSON Customer Service Supervisor JASON HILL Construction Supervisor JAYME HEIER Customer Experience Rep JEFF ROBILLARD Network Technician JEN BINGEMAN Chief Financial Officer JEREMY BECKER GM/CEO JILENE ZERR Executive Assistant JAMIE HOLMEN Network Specialist GARTH VAAGENE Engineer DINA EDWARDS Operations Administrative Assistant DEAN RUSTAD Chief Operations Officer DAVID JOHNSON Communications Specialist CARRIE PEDERSON Customer Experience Rep BRYAN DAVIS Communications Specialist CHRISTOPHER SYDENSTRICKER Network Technician JOHN HALSETH Construction Utility Tech JON MOBERG Construction Utility Tech KAYTLIN VEJTASA Internet Technician KELLY HEIER Network Supervisor

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MAGGIE ALBRECHT Customer Experience Rep TODD WATTERUD Engineering Manager

LOCALLY COMMITTED

STEVE HOBSON Communications Specialist SARAH KNOX Accountant TARYN BERGSTROM HR Manager TERRANCE VETTLESON Communications Specialist TANYA WEFLEN Accountant STEPHANIE HODENFIELD Office Support SHERI TORGERSON Customer Experience Rep SHELDON JOHNSON Communications Specialist RYAN OLSON Outside Plant Supervisor RICHEY HOPKINS Construction Utility Tech SAM BONTRAGER Construction Utility Tech ZACH ESSLER Communications Specialist TRAVIS ZIEBARTH Network Specialist LACEY VIALL Assistant Engineer KORY OLSON Network Technician KEVIN MATTOX Construction Utility Tech

SCHOLARSHIP WINNERS

2023 ARTHUR S. JOHNSON SCHOLARSHIP WINNERS

2023 KENNETH LUND JR. SCHOLARSHIP WINNERS

JULE STENSON

Jule Stenson, daughter of Lee and Tammy Stenson, graduated from Divide County High School. In the Fall, she plans to attend Williston State College.

SHELBY KNOX

Shelby Knox, daughter of Donald and Sarah Knox, graduated from Ray High School. In the Fall, she plans to attend the University of North Dakota for a degree in Kinesiology.

LUCAS OLSON

Lucas Olson, son of Ryan Olson and Lisa Olson, graduated from Ray High School. After high school, he plans to attend NDSU to pursue a degree in engineering.

BROOKLYN FORTIER

Brooklyn Fortier, daughter of John and Roxanne Fortier, graduated from Divide County High School. This Fall, she plans to attend Lake Region State College in Devils Lake, ND, majoring in Physical Fitness, and play volleyball at college level.

SAVANNA FREDRICKSON

Savanna Fredrickson, daughter of Nick & Teddi Fredrickson, graduated from Powers Lake High School. This Fall, she plans to attend the University of Mary’s Nursing Academy where she will be on an exceled rate to achieve her Bachelors of Nursing Degree in 2.6 years.

RILEY PEDERSON

Riley Pederson, daughter of Michael and Ronica Pederson, graduated from Tioga High School. Riley plans on attending Williston State College for two years before transferring to the University of North Dakota to major in Civil Engineering and Computer Science for Software Engineering.

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MAKING CONNECTIONS

701.568.3331 I NCCRAY.COM

This institution is an equal opportunity provider and employer.

MAKING CONNECTIONS

YOU’RE LIVING IN A SMART RURAL COMMUNITY

We are proud to be a Smart Rural Community provider as classified by NTCA–The Rural Broadband Association.

A Smart Community is about connecting neighbors to friends, teachers to students, doctors to patients, new businesses to customers, and a community to the world. Connected by broadband, we can achieve more, together.

NTCA’s Smart Communities program recognizes top performing broadband providers and their communities and applauds the way they support innovative economic development, education, health care, government services, public safety and other vital public functions.

As a Smart Rural Community, NCC meets high standards—including fast, reliable broadband connections—and works tirelessly to improve the areas we serve.

YOU’RE LIVING IN A SMART RURAL COMMUNITY

As a Smart Rural Provider, NCC is committed to bringing cutting-edge communications services to small-town America and has helped turn North Dakota into a leading broadband provider in the country. Connected by fiber broadband, we can achieve more—together.

We are proud to be a Smart Rural Community provider as classified by NTCA–The Rural Broadband Association.

A Smart Community is about connecting neighbors to friends, teachers to students, doctors to patients, new businesses to customers, and a community to the world. Connected by broadband, we can achieve more, together.

701.568.3331 I NCCRAY.COM