2019 OPERATION ROUND UP

REPORT

In 2010, Burke-Divide Electric Cooperative began a charitable giving pro-gram called Operation Round Up intended to benefit organizations and com-munities across the cooperative’s service territory.

Through Operation Round Up, cooperative members “round up” theirelectric bills to the next whole dollar each month with the extra pennies go-ing to the Operation Round Up fund. Burke-Divide Electric employees alsocontribute by “rounding down” their paychecks each month.

11 grants totaling $7,900 were awarded to the following area organiza-tions in 2019:

City of Columbus Lil Ranchers Daycare

$500—Playground $1,000—Playground

Crosby Blue Line Club Noonan Rural Fire District

$500—Skate Sharpener $1,000—Breathing Apparatus

Divide County Fair Powers Lake Civic Club

$1,000—Portable Bleachers $500—Main Street Flowers

Divide County Historical Society Powers Lake FFA

$1,000—Lunchroom Updates $900—Leadership Conference

Divide County Library Prairie Tumbleweeds $500—Summer Reading Program $500—Building Repair

Donnybrook Rural Fire District

$500—Hoses for Trucks

Non-profit and community organizations in Burke-Divide Electric’s ser-vice area are eligible to apply for Operation Round Up funds. A board of five trustees manages the distribution of Operation Round Up funds. Since the program began in 2010, 92 grants totaling more than $74,000 have been awarded to area organizations.

Currently, 84 percent of Burke-Divide Electric Cooperative’s membership participates in the Operation Round Up program.

BOARD OF TRUSTEES

Robin James, President………………………………….………..District 3 LuAnn Unhjem, Vice President…………………………….…..District 1 Lorna Carlson, Secretary…………………………….……………..At-large Roxi Iverson…………………...……………………………....……...District 2 Hal Ross………………………………………………….…………….….At-large

Est. 1945

Board of Directors

Kent Haugland Vice President

District 1

Lynn Jacobson Secretary/Treasurer

Statewide Director & NRECA Director District 1

Kurt Koppelsloen District 2

David Sigloh President District 3

Jeff Dahlin District 3

2020 Scholarship Winners

Ethan Bakken

Burke-Divide Electric Memorial—$500

Ethan is a 2020 graduate of Burke Central High School and is the son of Traci and Grady Bakken of Lignite. Ethan plans to study agronomy at Bismarck State College.

Elizabeth Hinds

Basin Electric Power Cooperative—$500

Elizabeth is a 2020 graduate of Bowbells High School and is the daughter of Monica and Jerome Hinds of Bowbells. Elizabeth plans to study special education and psychology at Minnesota State University—Moorhead.

Ashley Bauer

Basin Electric Power Cooperative—$500

Ashley is a 2020 graduate of Kenmare High School and is the daughter of Gerilyn and Todd Bauer of Kenmare. Ashley plans to study nursing at the Univer-sity of North Dakota.

2020 Youth Tour Winner

Brynn Oppegaard

Brynn Oppegaard was selected to represent the Cooperative on this year’s National Rural Electric Cooperative Youth Tour to Washington, D.C. Brynn will be a senior at Divide County High School in the fall and is the daughter of Heather and Mark Oppegaard of Crosby.

Lane Titus District 2

Steven Overlee Asst. Secretary/Treasurer

District 2

PRESIDENT AND MANAGER’S REPORT

Due to the Coronavirus (COVID-19) pandemic we are disappointed to share with you that your Annual Meeting for June has been postponed. This decision by the Board was not an easy one, but we felt it made sense to not put our membership in harm’s way by bringing you together in a public setting at this time. It is our hope that we can schedule it for later in the year, so we can complete our business meeting and elect the director positions. We will let you know if and when that can happen as soon as possible. Currently, we have locked the front doors of the Cooperative and made easy access for the membership to drop off payments at the Columbus headquarters if that’s your wish. We have suspended our tradition of notarizing documents and making copies to keep you and our employees safe. If you need to do any business or share comments please use our email, bdec@bdec.coop, or call us at 701-939-6671 or 1-800-472-2983. You can always fax us as well at 1-701-939-6666 if need be. Also, you can pay online through our website www.bdec.coop or through our SmartHub application. We are happy to share with you that 2019 was another solid year for Burke-Divide Electric Cooperative with net margins just over $2 million dollars. The chart below highlights some changes the cooperative has seen over the past ten years.

FAST FACTS 2019 2009 Total Utility Plant $84,507,774 $26,997,451 Total Operating Revenue $25,005,905 $6,522,908 Total kWh Sold 228,431,951 73,352,088 System kW Demand 40,104 16,184 Number of Meters 3,541 2,843 Number of Members 1,410 1,340 Miles of Line 2,641 2,193 Number of Employees 35 20

We have finished implementing our old work plan and have started our new one. This is a four-year, $17 million dollar plan that includes a substation and

STATEMENT OF OPERATIONS & PATRONAGE CAPITAL

OPERATING REVENUES 2019 2018 Electric $24,778,829 $24,943,631 Other 227,076 120,694 Total operating revenues 25,005,905 25,064,325 OPERATING EXPENSES Cost of Power 12,963,941 12,920,835 Transmission-operation and maintenance 56,925 126,668 Distribution – operation 2,183,679 2,059,544 Distribution – maintenance 1,282,561 1,185,072 Customer accounts 198,652 247,314 Customer service and informational 63,012 68,256 Sales expense 106,822 105,631 Administrative and general 2,043,657 2,014,209 Depreciation 2,397,619 2,272,506 Depreciation –plant retirement reserve 524,822 513,016 Taxes 211,420 312,482 Interest on long-term debt 1,465,998 1,309,676 Other 34,402 - Total operating expenses 23,533,510 23,135,209 OPERATING MARGINS BEFORE CAPITAL CREDITS 1,472,395 1,929,116 OTHER COOPERATIVE CAPITAL CREDITS 523,780 1,839,160 NET OPERATING MARGINS 1,996,175 3,768,276 NONOPERATING MARGINS (LOSSES) Merchandising, less costs and expenses (230,249) (214,493) Interest income 74,818 29,124 Loss on sale of non utility property (25,068) (130,411) Other Income 198,166 216,565 Total nonoperating (losses) margins 17,667 (99,215) NET MARGINS $2, 013,842 $3,669,061

2019 Annual Report — Page 8 2019 Annual Report — Page 1

Jerry King General Manager

David Sigloh President

numerousloopingandtielinestoimproveserviceforthemembership.As you know, a significant part of our member revenue comes from the oilassociated loads thatweserve inour footprint.Rightnow, theoil marketshavefallen considerably and these member loads have shut down or reduceddramatically,hopefullyforjustashorttime,buttheynegativelyaffectourbusinesswhentheyareoff.NotknowingwhereweareheadedhereinthenearfuturewithCOVID‐19,wehave cut down on spending all across the Cooperative and are holding off onbudgeteditemsthatcanwaitforalatertime.Wedoplantoallocate2019’smarginstothemembers,butwedon’tplantoretirecapitalcreditsatthistimetoensurethatthecooperativecanoperateeffectively.Wearedoingthisincasethingsgetworse.Wecontinuetoworkhardforyouanddoourverybesttokeepratesaslowaspossible, but we are here to share with you that with the extraordinarycircumstancesthatweareworkinginthatitislikelybynextyearthatwewillneedto take a hard look at our rate structure and increases to themembership arepossible.Commitment to Community is an important part of the cooperative businessmodel. We are very proud of our grant programs and Community ServiceDaywhere we take a day each summer and help out with a project in one of ourcommunities.Pastcommunityserviceprojectsincludeinstallationofplaygroundequipment,parkmaintenance,andmovingafoodpantry.Wetakeprideinthetimeour employees spend volunteering their personal time on fire departments,ambulanceservices, citycouncils,andeconomicdevelopmentboardswithinourcommunities. We also provide cooperative education and electrical safetydemonstrationstoschools,businesses,andcommunitygroups.Wehaveanumberofgrantsavailableforcommunityprojectsandorganizationsthrough our Operation Round Up program, CoBank’s Sharing Success Grantprogram, Basin Electric Power Cooperative’s matching donation fund, and theRuralDevelopmentFinanceCorporation’scommunitygrantprogram.Informationon these grants is available on ourwebsite and in our local pages in theNorthDakotaLivingMagazine.Ethan Bakken, Ashley Bauer, and Elizabeth Hinds are our 2020 scholarshiprecipients.BrynnOppegaardisourYouthTourwinner.Unfortunately,thisyear’sYouthTourhasbeencancelledduetotheCOVID‐19pandemic.We are excited to announce our participation in the Touchstone EnergyCooperative’sCo‐opConnectionsCardprogram.Theprogramoffersdiscountsonprescriptions,travel,andanumberofotherproductsandservices.DownloadtheCo‐opConnectionsapponyoursmartphoneorvisittheconnections.coopwebsitetolearnmoreaboutthisfreesavingsprogram.Weencourageyoutoreachouttouswithanyquestionsyouhaveregardingthe2019financialreportoryourcooperativeingeneral.Welookforwardtoseeingyouat the75thAnnualMeeting, ifandwhenwearesafelyabletohosttheevent.

INDEPENDENTAUDITOR’SREPORTWe have audited the accompanying financial statements of Burke‐Divide

ElectricCooperative,Inc.,whichcomprisethebalancesheets asofDecember31,2019and2018,andthe relatedstatementsof operations,equities,andcashflowsforthe yearsthenended,and therelatednotestothefinancialstatements.In our opinion, the financial statements referred to present fairly, in allmaterialrespects,thefinancialpositionof Burke‐DivideElectricCooperative,Inc.asofDecember31,2019 and2018,andtheresultsofitsoperationsanditscashflows for the years then ended in accordance with accounting principlesgenerallyacceptedintheUnitedStatesofAmerica.

EideBailly,LLPMay1,2020

BALANCESHEETSASOFDECEMBER31,2019AND2018EQUITIESANDLIABILITIES

EQUITIES 2019 2018Patronagecapital $32,241,960 $33,234,100

Otherequities 5,538,280 5,538,154Totalequities 37,780,240 38,772,254

LONG‐TERMDEBT,LESSCURRENTMATURITIES 49,773,584 42,668,653

CURRENTLIABILITIESCurrentmaturitiesoflong‐termdebt 1,886,895 1,627,514Accountspayable 1,536,477 1,591,699Customerdeposits 85,549 88,453Taxesaccrued 171,155 292,739Accruedinterest 19,612 20,359Accruedcompensatedabsences 119,319 123,591Totalcurrentliabilities 3,819,007 3,744,355

DEFERREDCREDITSCustomerenergy prepayments 37,540 43,822

Uncashedcapitalcreditchecks 6,066 5,317Customerconstructionprepayments 629,483 333,110Deferredgainondispositionofallowances 244,817 ‐

Deferredcompensation 295,000 268,100Estimatedinstallationcosts‐specialequipment 523,908 420,794Totaldeferredcredits 1,736,814 1,071,143

$93,109,645 $86,256,405

2019AnnualReport—Page2 2019AnnualReport—Page7

BALANCESHEETSASOFDECEMBER31,2019and2018ASSETS

ELECTRIC PLANT 2019 2018Inservice $83,579,779 $81,616,537Underconstruction 927,995 829,279

Totalelectricplant 84,507,774 82,445,816

Lessaccumulateddepreciation 18,478,999 16,301,460

Electricplant–net 66,028,775 66,144,356

OTHERPROPERTY ANDINVESTMENTSInvestmentsinassociatedcompanies 7,766,791 7,516,478Otherinvestments 565,795 651,356Revolvingloanpool 173,980 173,812Specialfunds 295,000 268,100Totalotherpropertyand

investments 8,801,566 8,609,746

CURRENTASSETSCashandcashequivalents 13,878,298 7,001,275Accountsreceivable,lessallowance

foruncollectable accounts(2019—$800,000;2018—$917,669) 1,911,672 1,672,094Currentportionofotherinvestments 111,111 111,111Materialsandsupplies 1,771,267 2,028,970Prepayments 290,412 274,088

Interestreceivable 8,985 4,687

Totalcurrentassets 17,971,745 11,092,225

DEFERREDDEBITS 307,559 410,078$93,109,645 $86,256,405

2019AnnualReport—Page32019AnnualReport—Page6

The 74th Annual Meeting of the members of Burke-Divide Electric Cooperative, Inc., was held at the Burke-Divide Electric Cooperative Crosby Outpost in Crosby, North Dakota, on June 12, 2019. CALL TO ORDER: President David Sigloh called the meeting to order at 6:30 p.m. APPROVAL OF AGENDA: The Annual Meeting Agenda was presented for the membership’s review. It was moved, seconded, & carried to approve the Annual Meeting Agenda as presented. INVOCATION: George Knutson led the group in the invocation. NATIONAL ANTHEM: The group stood and saluted the American flag during the Pledge of Allegiance and the National Anthem. QUORUM: Vice President Kent Haugland reported that 108 members were registered for the meeting and that a quorum was present. PARLIAMENTARIAN: President Sigloh appointed the cooperative’s attorney, Debra L. Hoffarth, to act as parliamentarian for the meeting. ELECTION TELLERS: Sigloh announced the appointment of election tellers from all three districts to count ballots for the election of directors. The tellers include: District 1–Gene Olson; District 2-Darryl Dihle; and District 3–Otto Folkers. NOTICE OF MEETING: It was moved, seconded and carried to approve the Notice of Meeting in the form mailed to the members and to dispense with the reading of it. INTRODUCTION OF GUESTS: President David Sigloh introduced guests of the Cooperative attending the Annual Meeting. MINUTES: It was moved, seconded, and carried to dispense with the reading of the minutes of the 2018 Annual Meeting. It was moved, seconded, and carried to approve the 2018 Annual Meeting Minutes in the form presented. FINANCIAL REPORT: Jean Luke Arel, Eide Bailly, LLP, presented the cooperative’s financial report. Eide Bailly, LLP, of Fargo, North Dakota, audited the balance sheets for the year ending December 31, 2018. The cooperative received an unmodified (“clean”) audit opinion. Burke-Divide’s financial statements have been prepared using accounting principles generally accepted in the United States of America and do not contain material misstatements and are fairly presented. The cooperative had no compliance findings. Arel discussed assets, liabilities, revenues, expenses, and financial ratios. It was moved, seconded, and carried to approve the 2018 Financial Report. PRESIDENT & MANAGER’S REPORT: President Sigloh introduced the Board of Directors and General Manager of the Cooperative. President Sigloh thanked the Board of Directors. Vice President Kent Haugland presented a service award to David Sigloh for 30 years of service. President Sigloh and Manager Jerry King presented a report on the past year of operations. At the Annual Meeting, the Cooperative retired the Cooperative’s portion of Capital Credits for the years 2011-2012 in the amount of $2,940,000. G&T capital credits will be retired when the Cooperative receives retirement from the G&T. As of 2018, the Cooperative has retired nearly $19,000,000 in capital credits to its members since the Cooperative was formed in 1945. Burke-Divide Electric Cooperative, Inc.’s growth leveled out in 2016, with the trend continuing into 2019. The Cooperative completed Strategic Planning and continues to work to keep rates stable. Burke-Divide purchases its power from Upper Missouri Cooperative, with generation coming from Western Area Power Administration and Basin Electric Power Cooperative. The Cooperative is working on a new Construction Work Plan to update the Cooperative’s system. General Manager King discussed the late winter/early spring storm that left half of Burke-Divide’s system without power and discussed the response by cooperative staff to restore power. The Cooperative’s employees are encouraged to be active in the communities and volunteer. Each summer, the Cooperative office closes one day to participate in “Community Service Day.” In 2018, the employees did a community project at the Bowbells Park playground. Burke-Divide Electric Cooperative, Inc. participates in the Rural Development Finance Corporation (“RDFC”) grant and will award two $1000 grants to eligible projects in the Cooperative’s service territory. Burke-

Divide Electric Cooperative also participates in Co-Bank’s Sharing Success matching grant program in 2019 for certified 501(c)(3) non-profit organizations, schools, or fire departments. The employees of Burke-Divide Electric Cooperative, Inc. introduced themselves to the membership. King and Sigloh thanked the employees for their work at the cooperative and its members. Sigloh and King closed the report by thanking members for their continued support. SERVICE AWARDS: President Sigloh and Manager Jerry King thanked the employees and presented service awards to the following: 5 years—Colton Maruskie, Ashley Throntveit, Jodi Nelson, Terry Knutson, and Jerry King; 10 years—Pete Stroklund and Joe Thomas; 25 years—Tom Rasmusson. Dave Nelson was recognized for earning his journeyman lineworker certification. NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION NRECA REPORT: Director Lynn Jacobson presented a report on the activities of NRECA. Lynn Jacobson is the NRECA Director for North Dakota. NRECA is dedicated to representing the national interests of electric cooperatives and their consumer-members. NRECA supports Burke-Divide’s mission to provide electricity to its members through outreach, advocacy, workforce development, safety resources, business/operational strategies, and provision of employee benefits. YOUTH TOUR AND SCHOLARSHIPS: Heidi Haugen-Grohs reported on the Youth Tour and Scholarship programs sponsored by Burke-Divide Electric Cooperative, Inc. Kiah Nelson is the 2019 recipient of the $500 Burke-Divide Electric Memorial Scholarship. Jeneca Kostad and Taylor Schoemer are the 2019 recipients of the $500 Basin Electric Scholarships. Ethan Bakken received the 2019 Youth Tour to Washington, DC. OPERATION ROUND UP REPORT: Heidi Haugen-Grohs reported on the Operation Round Up Program, a charitable giving program. Haugen-Grohs introduced the members of the Operation Round-Up Board and thanked them for their service. Heidi Haugen-Grohs reported that six grants, totaling $8,100, were awarded to area organizations in 2018. Operation Round Up has awarded 81 grants, totaling more than $66,000 since its start. Heidi Haugen-Grohs thanked members and employees for their participation in the program. ELECTION OF DIRECTORS: Attorney Debra L. Hoffarth conducted the election of directors. District 1: Ms. Hoffarth noted that the members were to elect a director for District 1. Ms. Hoffarth noted that Kent Haugland has filed a petition for the District 1 Director Seat, which he currently holds. Ms. Hoffarth called for other nominations from the floor for District 1; there were no further nominations from the floor. It was moved, seconded, and carried to direct the Secretary to cast a unanimous ballot for Kent Haugland as District 1 Director. District 2: Ms. Hoffarth noted that the members were to elect a director for District 2. Ms. Hoffarth noted that Lane Titus has filed a petition for the District 2 Director Seat, which he currently holds. Ms. Hoffarth called for other nominations from the floor for District 2; there were no further nominations from the floor. It was moved, seconded, and carried to direct the Secretary to cast a unanimous ballot for Lane Titus as District 2 Director. District 3: Ms. Hoffarth noted that the members were to elect a director for District 3. Ms. Hoffarth noted that David Sigloh has filed a petition for the District 3 Director Seat, which he currently holds. Ms. Hoffarth called for other nominations from the floor for District 3; there were no further nominations from the floor. It was moved, seconded, and carried to direct the Secretary to cast a unanimous ballot for David Sigloh as District 3 Director. OLD BUSINESS: President Sigloh called on members for old business. There was none. NEW BUSINESS: President Sigloh called on members for new business. There was none. QUESTIONS AND COMMENTS: President Sigloh called for questions or comments from the membership. There were none. ADJOURNMENT: There being no further business to conduct, the meeting was adjourned at 7:40 p.m.

MINUTES OF THE 2019 ANNUAL MEETING OF BURKE-DIVIDE ELECTRIC COOPERATIVE, INC. JUNE 14, 2019

2019 Annual Report — Page 4 2019 Annual Report — Page 5

The 74th Annual Meeting of the members of Burke-Divide Electric Cooperative, Inc., was held at the Burke-Divide Electric Cooperative Crosby Outpost in Crosby, North Dakota, on June 12, 2019. CALL TO ORDER: President David Sigloh called the meeting to order at 6:30 p.m. APPROVAL OF AGENDA: The Annual Meeting Agenda was presented for the membership’s review. It was moved, seconded, & carried to approve the Annual Meeting Agenda as presented. INVOCATION: George Knutson led the group in the invocation. NATIONAL ANTHEM: The group stood and saluted the American flag during the Pledge of Allegiance and the National Anthem. QUORUM: Vice President Kent Haugland reported that 108 members were registered for the meeting and that a quorum was present. PARLIAMENTARIAN: President Sigloh appointed the cooperative’s attorney, Debra L. Hoffarth, to act as parliamentarian for the meeting. ELECTION TELLERS: Sigloh announced the appointment of election tellers from all three districts to count ballots for the election of directors. The tellers include: District 1–Gene Olson; District 2-Darryl Dihle; and District 3–Otto Folkers. NOTICE OF MEETING: It was moved, seconded and carried to approve the Notice of Meeting in the form mailed to the members and to dispense with the reading of it. INTRODUCTION OF GUESTS: President David Sigloh introduced guests of the Cooperative attending the Annual Meeting. MINUTES: It was moved, seconded, and carried to dispense with the reading of the minutes of the 2018 Annual Meeting. It was moved, seconded, and carried to approve the 2018 Annual Meeting Minutes in the form presented. FINANCIAL REPORT: Jean Luke Arel, Eide Bailly, LLP, presented the cooperative’s financial report. Eide Bailly, LLP, of Fargo, North Dakota, audited the balance sheets for the year ending December 31, 2018. The cooperative received an unmodified (“clean”) audit opinion. Burke-Divide’s financial statements have been prepared using accounting principles generally accepted in the United States of America and do not contain material misstatements and are fairly presented. The cooperative had no compliance findings. Arel discussed assets, liabilities, revenues, expenses, and financial ratios. It was moved, seconded, and carried to approve the 2018 Financial Report. PRESIDENT & MANAGER’S REPORT: President Sigloh introduced the Board of Directors and General Manager of the Cooperative. President Sigloh thanked the Board of Directors. Vice President Kent Haugland presented a service award to David Sigloh for 30 years of service. President Sigloh and Manager Jerry King presented a report on the past year of operations. At the Annual Meeting, the Cooperative retired the Cooperative’s portion of Capital Credits for the years 2011-2012 in the amount of $2,940,000. G&T capital credits will be retired when the Cooperative receives retirement from the G&T. As of 2018, the Cooperative has retired nearly $19,000,000 in capital credits to its members since the Cooperative was formed in 1945. Burke-Divide Electric Cooperative, Inc.’s growth leveled out in 2016, with the trend continuing into 2019. The Cooperative completed Strategic Planning and continues to work to keep rates stable. Burke-Divide purchases its power from Upper Missouri Cooperative, with generation coming from Western Area Power Administration and Basin Electric Power Cooperative. The Cooperative is working on a new Construction Work Plan to update the Cooperative’s system. General Manager King discussed the late winter/early spring storm that left half of Burke-Divide’s system without power and discussed the response by cooperative staff to restore power. The Cooperative’s employees are encouraged to be active in the communities and volunteer. Each summer, the Cooperative office closes one day to participate in “Community Service Day.” In 2018, the employees did a community project at the Bowbells Park playground. Burke-Divide Electric Cooperative, Inc. participates in the Rural Development Finance Corporation (“RDFC”) grant and will award two $1000 grants to eligible projects in the Cooperative’s service territory. Burke-

Divide Electric Cooperative also participates in Co-Bank’s Sharing Success matching grant program in 2019 for certified 501(c)(3) non-profit organizations, schools, or fire departments. The employees of Burke-Divide Electric Cooperative, Inc. introduced themselves to the membership. King and Sigloh thanked the employees for their work at the cooperative and its members. Sigloh and King closed the report by thanking members for their continued support. SERVICE AWARDS: President Sigloh and Manager Jerry King thanked the employees and presented service awards to the following: 5 years—Colton Maruskie, Ashley Throntveit, Jodi Nelson, Terry Knutson, and Jerry King; 10 years—Pete Stroklund and Joe Thomas; 25 years—Tom Rasmusson. Dave Nelson was recognized for earning his journeyman lineworker certification. NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION NRECA REPORT: Director Lynn Jacobson presented a report on the activities of NRECA. Lynn Jacobson is the NRECA Director for North Dakota. NRECA is dedicated to representing the national interests of electric cooperatives and their consumer-members. NRECA supports Burke-Divide’s mission to provide electricity to its members through outreach, advocacy, workforce development, safety resources, business/operational strategies, and provision of employee benefits. YOUTH TOUR AND SCHOLARSHIPS: Heidi Haugen-Grohs reported on the Youth Tour and Scholarship programs sponsored by Burke-Divide Electric Cooperative, Inc. Kiah Nelson is the 2019 recipient of the $500 Burke-Divide Electric Memorial Scholarship. Jeneca Kostad and Taylor Schoemer are the 2019 recipients of the $500 Basin Electric Scholarships. Ethan Bakken received the 2019 Youth Tour to Washington, DC. OPERATION ROUND UP REPORT: Heidi Haugen-Grohs reported on the Operation Round Up Program, a charitable giving program. Haugen-Grohs introduced the members of the Operation Round-Up Board and thanked them for their service. Heidi Haugen-Grohs reported that six grants, totaling $8,100, were awarded to area organizations in 2018. Operation Round Up has awarded 81 grants, totaling more than $66,000 since its start. Heidi Haugen-Grohs thanked members and employees for their participation in the program. ELECTION OF DIRECTORS: Attorney Debra L. Hoffarth conducted the election of directors. District 1: Ms. Hoffarth noted that the members were to elect a director for District 1. Ms. Hoffarth noted that Kent Haugland has filed a petition for the District 1 Director Seat, which he currently holds. Ms. Hoffarth called for other nominations from the floor for District 1; there were no further nominations from the floor. It was moved, seconded, and carried to direct the Secretary to cast a unanimous ballot for Kent Haugland as District 1 Director. District 2: Ms. Hoffarth noted that the members were to elect a director for District 2. Ms. Hoffarth noted that Lane Titus has filed a petition for the District 2 Director Seat, which he currently holds. Ms. Hoffarth called for other nominations from the floor for District 2; there were no further nominations from the floor. It was moved, seconded, and carried to direct the Secretary to cast a unanimous ballot for Lane Titus as District 2 Director. District 3: Ms. Hoffarth noted that the members were to elect a director for District 3. Ms. Hoffarth noted that David Sigloh has filed a petition for the District 3 Director Seat, which he currently holds. Ms. Hoffarth called for other nominations from the floor for District 3; there were no further nominations from the floor. It was moved, seconded, and carried to direct the Secretary to cast a unanimous ballot for David Sigloh as District 3 Director. OLD BUSINESS: President Sigloh called on members for old business. There was none. NEW BUSINESS: President Sigloh called on members for new business. There was none. QUESTIONS AND COMMENTS: President Sigloh called for questions or comments from the membership. There were none. ADJOURNMENT: There being no further business to conduct, the meeting was adjourned at 7:40 p.m.

2019 Annual Report — Page 4 2019 Annual Report — Page 5

BALANCESHEETSASOFDECEMBER31,2019and2018ASSETS

ELECTRICPLANT 2019 2018Inservice $83,579,779 $81,616,537Underconstruction 927,995 829,279

Totalelectricplant 84,507,774 82,445,816

Lessaccumulateddepreciation 18,478,999 16,301,460

Electricplant–net 66,028,775 66,144,356

OTHERPROPERTYANDINVESTMENTSInvestmentsinassociatedcompanies 7,766,791 7,516,478Otherinvestments 565,795 651,356Revolvingloanpool 173,980 173,812Specialfunds 295,000 268,100Totalotherpropertyand

investments 8,801,566 8,609,746

CURRENTASSETSCashandcashequivalents 13,878,298 7,001,275Accountsreceivable,lessallowanceforuncollectableaccounts

(2019—$800,000;2018—$917,669) 1,911,672 1,672,094Currentportionofotherinvestments 111,111 111,111Materialsandsupplies 1,771,267 2,028,970Prepayments 290,412 274,088Interestreceivable 8,985 4,687

Totalcurrentassets 17,971,745 11,092,225

DEFERREDDEBITS 307,559 410,078$93,109,645 $86,256,405

2019AnnualReport—Page32019AnnualReport—Page6

numerousloopingandtielinestoimproveserviceforthemembership.As you know, a significant part of our member revenue comes from the oilassociated loads thatweserve inour footprint.Rightnow, theoilmarketshavefallen considerably and these member loads have shut down or reduceddramatically,hopefullyforjustashorttime,buttheynegativelyaffectourbusinesswhentheyareoff.NotknowingwhereweareheadedhereinthenearfuturewithCOVID‐19,wehave cut down on spending all across the Cooperative and are holding off onbudgeteditemsthatcanwaitforalatertime.Wedoplantoallocate2019’smarginstothemembers,butwedon’tplantoretirecapitalcreditsatthistimetoensurethatthecooperativecanoperateeffectively.Wearedoingthisincasethingsgetworse.Wecontinuetoworkhardforyouanddoourverybesttokeepratesaslowaspossible, but we are here to share with you that with the extraordinarycircumstancesthatweareworkinginthatitislikelybynextyearthatwewillneedto take a hard look at our rate structure and increases to themembership arepossible.Commitment to Community is an important part of the cooperative businessmodel. We are very proud of our grant programs and Community ServiceDaywhere we take a day each summer and help out with a project in one of ourcommunities.Pastcommunityserviceprojectsincludeinstallationofplaygroundequipment,parkmaintenance,andmovingafoodpantry.Wetakeprideinthetimeour employees spend volunteering their personal time on fire departments,ambulanceservices, citycouncils,andeconomicdevelopmentboardswithinourcommunities. We also provide cooperative education and electrical safetydemonstrationstoschools,businesses,andcommunitygroups.Wehaveanumberofgrantsavailableforcommunityprojectsandorganizationsthrough our Operation Round Up program, CoBank’s Sharing Success Grantprogram, Basin Electric Power Cooperative’s matching donation fund, and theRuralDevelopmentFinanceCorporation’scommunitygrantprogram.Informationon these grants is available on ourwebsite and in our local pages in theNorthDakotaLivingMagazine.Ethan Bakken, Ashley Bauer, and Elizabeth Hinds are our 2020 scholarshiprecipients.BrynnOppegaardisourYouthTourwinner.Unfortunately,thisyear’sYouthTourhasbeencancelledduetotheCOVID‐19pandemic.We are excited to announce our participation in the Touchstone EnergyCooperative’sCo‐opConnectionsCardprogram.Theprogramoffersdiscountsonprescriptions,travel,andanumberofotherproductsandservices.DownloadtheCo‐opConnectionsapponyoursmartphoneorvisittheconnections.coopwebsitetolearnmoreaboutthisfreesavingsprogram.Weencourageyoutoreachouttouswithanyquestionsyouhaveregardingthe2019financialreportoryourcooperativeingeneral.Welookforwardtoseeingyouatthe75thAnnualMeeting,ifandwhenwearesafelyabletohosttheevent.

INDEPENDENTAUDITOR’SREPORTWe have audited the accompanying financial statements of Burke‐DivideElectricCooperative,Inc.,whichcomprisethebalancesheetsasofDecember31,2019and2018,andtherelatedstatementsofoperations,equities,andcashflowsfortheyearsthenended,andtherelatednotestothefinancialstatements.In our opinion, the financial statements referred to present fairly, in allmaterialrespects,thefinancialpositionofBurke‐DivideElectricCooperative,Inc.asofDecember31,2019and2018,andtheresultsofitsoperationsanditscashflows for the years then ended in accordance with accounting principlesgenerallyacceptedintheUnitedStatesofAmerica.

EideBailly,LLPMay1,2020

BALANCESHEETSASOFDECEMBER31,2019AND2018EQUITIESANDLIABILITIES

EQUITIES 2019 2018Patronagecapital $32,241,960 $33,234,100Otherequities 5,538,280 5,538,154

Totalequities 37,780,240 38,772,254

LONG‐TERMDEBT,LESSCURRENTMATURITIES 49,773,584 42,668,653

CURRENTLIABILITIESCurrentmaturitiesoflong‐termdebt 1,886,895 1,627,514Accountspayable 1,536,477 1,591,699Customerdeposits 85,549 88,453Taxesaccrued 171,155 292,739Accruedinterest 19,612 20,359Accruedcompensatedabsences 119,319 123,591Totalcurrentliabilities 3,819,007 3,744,355

DEFERREDCREDITSCustomerenergyprepayments 37,540 43,822Uncashedcapitalcreditchecks 6,066 5,317Customerconstructionprepayments 629,483 333,110Deferredgainondispositionofallowances 244,817 ‐Deferredcompensation 295,000 268,100Estimatedinstallationcosts‐specialequipment 523,908 420,794Totaldeferredcredits 1,736,814 1,071,143

$93,109,645 $86,256,405

2019AnnualReport—Page2 2019AnnualReport—Page7

PRESIDENT AND MANAGER’S REPORT

Due to the Coronavirus (COVID-19) pandemic we are disappointed to share with you that your Annual Meeting for June has been postponed. This decision by the Board was not an easy one, but we felt it made sense to not put our membership in harm’s way by bringing you together in a public setting at this time. It is our hope that we can schedule it for later in the year, so we can complete our business meeting and elect the director positions. We will let you know if and when that can happen as soon as possible. Currently, we have locked the front doors of the Cooperative and made easy access for the membership to drop off payments at the Columbus headquarters if that’s your wish. We have suspended our tradition of notarizing documents and making copies to keep you and our employees safe. If you need to do any business or share comments please use our email, bdec@bdec.coop, or call us at 701-939-6671 or 1-800-472-2983. You can always fax us as well at 1-701-939-6666 if need be. Also, you can pay online through our website www.bdec.coop or through our SmartHub application. We are happy to share with you that 2019 was another solid year for Burke-Divide Electric Cooperative with net margins just over $2 million dollars. The chart below highlights some changes the cooperative has seen over the past ten years.

FAST FACTS 2019 2009 Total Utility Plant $84,507,774 $26,997,451 Total Operating Revenue $25,005,905 $6,522,908 Total kWh Sold 228,431,951 73,352,088 System kW Demand 40,104 16,184 Number of Meters 3,541 2,843 Number of Members 1,410 1,340 Miles of Line 2,641 2,193 Number of Employees 35 20

We have finished implementing our old work plan and have started our new one. This is a four-year, $17 million dollar plan that includes a substation and

STATEMENT OF OPERATIONS & PATRONAGE CAPITAL

OPERATING REVENUES 2019 2018 Electric $24,778,829 $24,943,631 Other 227,076 120,694 Total operating revenues 25,005,905 25,064,325 OPERATING EXPENSES Cost of Power 12,963,941 12,920,835 Transmission-operation and maintenance 56,925 126,668 Distribution – operation 2,183,679 2,059,544 Distribution – maintenance 1,282,561 1,185,072 Customer accounts 198,652 247,314 Customer service and informational 63,012 68,256 Sales expense 106,822 105,631 Administrative and general 2,043,657 2,014,209 Depreciation 2,397,619 2,272,506 Depreciation –plant retirement reserve 524,822 513,016 Taxes 211,420 312,482 Interest on long-term debt 1,465,998 1,309,676 Other 34,402 - Total operating expenses 23,533,510 23,135,209 OPERATING MARGINS BEFORE CAPITAL CREDITS 1,472,395 1,929,116 OTHER COOPERATIVE CAPITAL CREDITS 523,780 1,839,160 NET OPERATING MARGINS 1,996,175 3,768,276 NONOPERATING MARGINS (LOSSES) Merchandising, less costs and expenses (230,249) (214,493) Interest income 74,818 29,124 Loss on sale of non utility property (25,068) (130,411) Other Income 198,166 216,565 Total nonoperating (losses) margins 17,667 (99,215) NET MARGINS $2, 013,842 $3,669,061

2019 Annual Report — Page 8 2019 Annual Report — Page 1

Jerry King General Manager

David Sigloh President

Board of Directors

Kent Haugland Vice President

District 1

Lynn Jacobson Secretary/Treasurer

Statewide Director & NRECA Director District 1

Kurt Koppelsloen District 2

David Sigloh President District 3

Jeff Dahlin District 3

2020 Scholarship Winners

Ethan Bakken

Burke-Divide Electric Memorial—$500

Ethan is a 2020 graduate of Burke Central High School and is the son of Traci and Grady Bakken of Lignite. Ethan plans to study agronomy at Bismarck State College.

Elizabeth Hinds

Basin Electric Power Cooperative—$500

Elizabeth is a 2020 graduate of Bowbells High School and is the daughter of Monica and Jerome Hinds of Bowbells. Elizabeth plans to study special education and psychology at Minnesota State University—Moorhead.

Ashley Bauer

Basin Electric Power Cooperative—$500

Ashley is a 2020 graduate of Kenmare High School and is the daughter of Gerilyn and Todd Bauer of Kenmare. Ashley plans to study nursing at the Univer-sity of North Dakota.

2020 Youth Tour Winner

Brynn Oppegaard

Brynn Oppegaard was selected to represent the Cooperative on this year’s National Rural Electric Cooperative Youth Tour to Washington, D.C. Brynn will be a senior at Divide County High School in the fall and is the daughter of Heather and Mark Oppegaard of Crosby.

Lane Titus District 2

Steven Overlee Asst. Secretary/Treasurer

District 2

2019 OPERATION ROUND UP

REPORT

In 2010, Burke-Divide Electric Cooperative began a charitable giving pro-gram called Operation Round Up intended to benefit organizations and com-munities across the cooperative’s service territory.

Through Operation Round Up, cooperative members “round up” their electric bills to the next whole dollar each month with the extra pennies go-ing to the Operation Round Up fund. Burke-Divide Electric employees also contribute by “rounding down” their paychecks each month.

11 grants totaling $7,900 were awarded to the following area organiza-tions in 2019:

City of Columbus Lil Ranchers Daycare

$500—Playground $1,000—Playground

Crosby Blue Line Club Noonan Rural Fire District

$500—Skate Sharpener $1,000—Breathing Apparatus

Divide County Fair Powers Lake Civic Club

$1,000—Portable Bleachers $500—Main Street Flowers

Divide County Historical Society Powers Lake FFA

$1,000—Lunchroom Updates $900—Leadership Conference

Divide County Library Prairie Tumbleweeds $500—Summer Reading Program $500—Building Repair

Donnybrook Rural Fire District

$500—Hoses for Trucks

Non-profit and community organizations in Burke-Divide Electric’s ser-vice area are eligible to apply for Operation Round Up funds. A board of five trustees manages the distribution of Operation Round Up funds. Since the program began in 2010, 92 grants totaling more than $74,000 have been awarded to area organizations.

Currently, 84 percent of Burke-Divide Electric Cooperative’s membership participates in the Operation Round Up program.

BOARD OF TRUSTEES

Robin James, President………………………………….………..District 3 LuAnn Unhjem, Vice President…………………………….…..District 1 Lorna Carlson, Secretary…………………………….……………..At-large Roxi Iverson…………………...……………………………....……...District 2 Hal Ross………………………………………………….…………….….At-large

Est. 1945