2019-09-05T14:37:25-05:00 2018-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2018-01-01 740811772 NUECES ELECTRIC COOPERATIVE INC NUEC 3613872581 14353 COOPERATIVE AVE ROBSTOWN TX 78380 VARZAVAND IRANI CEO 3613872581 2019-09-04 1 WILLIAM M MILLER P00439459 8067473806 2019-09-04 X 65.182.80.152 2019-09-04 11:03:27 CD P 2EBFA2265763A01132BE48D36E167D9476E1DDEB 587A88673713A033F58E04FDF6801CBB1F7DD2F2 2018 2019-02-21 02:37:17Z VARZAVAND IRANI 14353 COOPERATIVE AVE ROBSTOWN TX 78380 116070290 0 X WWW.NUECESELECTRIC.ORG X 1939 TX TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS AT COST ON A COOPERATIVE BASIS. 10 10 92 0 0 0 0 0 111209870 114405662 887194 860701 64738 67360 112161802 115333723 52936 64945 12307101 12324006 6057022 5910965 0 0 0 92810003 97425365 111227062 115725281 934740 -391558 186837286 192520741 94375264 91515952 92462022 101004789 THE MISSION OF NUECES ELECTRIC COOPERATIVE, INC, A MEMBER-OWNED COOPERATIVE, IS TO HELP OUR MEMBERS CONTINUALLY IMPROVE THEIR QUALITY OF LIFE BY PROVIDING RELIABLE AND COST EFFECTIVE ELECTRIC SERVICE IN A CULTURE WHERE SAFETY IS A PRIORITY. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 43,994 ACTIVE SERVICES AT YEAR END WERE PROVIDED ELECTRICITY ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. 0 0 0 0 0 0 0 1 0 1 1 1 0 1 1 1 0 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 1 96 0 92 1 0 0 0 0 0 111355857 2389219 0 0 0 X 10 10 0 0 0 0 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 0 X X ADRIANA PENA CFO 3613872581 14353 COOPERATIVE AVE ROBSTOWN TX 78380 X BRIAN MENKING PRESIDENT 3.40 X X 21325 0 0 LOUIS W HARTMAN VICE PRESIDENT 5.70 X X 19225 0 0 DAVID ROSSE SECRETARY/TREASURER 9.10 1.00 X X 18000 0 0 TOMMY ERMIS ASST SECRETARY/TREASURER 9.00 X X 18025 0 0 DONALD WAYNE HERRMANN DIRECTOR 5.00 X 18825 0 0 MAXINE STEWART DIRECTOR 1.40 1.00 X 15600 0 0 RUMALDO JUAREZ DIRECTOR 4.40 X 18900 0 0 GREGG TRUESDALE DIRECTOR 4.20 X 18300 0 0 GLADYS LIPPINCOTT DIRECTOR 3.50 X 17125 0 0 JUAN ALVARADO DIRECTOR 6.00 1.00 X 18300 0 0 TRACE L MCCUAN CEO 45.00 X 241873 0 67055 ADRIANA PENA CFO 44.00 X 123015 0 69014 VARZAVAND IRANI COO 50.00 X 150236 0 49218 SARAH FISHER CCO 48.00 1.00 X 142401 0 72102 FRANK WILSON CRO 43.00 X 115758 0 61323 MANUEL MAYORGA LINE SUPPORT 52.00 X 104925 0 55414 ROBERT HOLLOWAY JOURNEY LINEMAN 48.00 X 135180 0 38597 RAYMUNDO PINA JOURNEY LINEMAN 52.00 X 107095 0 35641 JUAN RIVERA JOURNEY LINEMAN 45.00 X 133481 0 41450 ROLAND TREVINO JOURNEY LINEMAN 46.00 X 108123 0 42831 1545712 0 532645 16 0 1 0 LINETEC SERVICES INC PO BOX 13650 ALEXANDRIA LA 71315 LINE CONSTRUCTION 2333110 SOUTH TEXAS ELECTRIC CO-OP INC PO BOX 119 NURSERY TX 77976 RETAIL BILLING 1379021 MOREHEAD DOTTS & ASSOCIATES 545 N UPPER BROADWAY CORPUS CHRISTI TX 78401 ADVERTISING 959736 NISC PO BOX 1147 MANDAN ND 58554 COMPUTER HOSTING/ SERVICES 462384 ENERGY SERVICES GROUP LLC 141 LONGWATER DR SUITE 113 NORWELL MA 02061 COMPUTER HOSTING/ SERVICES 442539 15 X SALES OF ELECTRICITY 221000 108036395 108036395 PATRONAGE DIVIDENDS 221000 4696225 4696225 DISTRIBUTION SERVICES 221000 922063 922063 SERVICE FEES 221000 741115 741115 OTHER PROGRAM REVENUE 221000 9864 9864 114405662 844075 844075 1925 0 1925 1925 1925 673791 657165 16626 16626 16626 99748 79402 20346 20346 POLE ATTACHMENT INCOME 221000 45089 45089 45089 115333723 114426008 0 907715 X 64945 12324006 1275620 3114340 442387 783786 294832 2866987 4264834 PURCHASED POWER 78647383 ADMIN & GENERAL EXPENSE 3609361 CONSUMER EXPENSE 3397330 DISTRIBUTION EXPENSE 2520432 2119038 115725281 1950333 2798737 4390705 2211736 2276501 1989330 1536269 1379013 140043375 25016522 113561486 115026853 22257151 24586492 35173384 39305018 5691457 5223562 186837286 192520741 8155751 8648329 5821670 5969291 317733 356793 74398374 71349775 5681736 5191764 94375264 91515952 X 424450 431525 0 0 92037572 100573264 92462022 101004789 186837286 192520741 X -391558 8934325 X X 0 1 X 1 0 0 1 X 1264178 1264178 26566486 3583118 22983368 112098918 21433404 90665514 113793 113793 115026853 TREASURY STRIPS 24586492 C 24586492 CAPITAL TERM CERTIFICATES 738569 C PATRONAGE CAPITAL - STEC 33657882 C PATRONAGE CAPITAL - CFC 241089 C PATRONAGE CAPITAL - TEC 752495 C PATRONAGE CAPITAL - NISC 158366 C PATRONAGE CAPITAL - COBANK 1708581 C PATRONAGE CAPITAL - FEDERATED 431645 C PATRONAGE CAPITAL - CRC 26283 C PATRONAGE CAPITAL - NRTC 108448 C OTHER INVESTMENTS - RESTRICTED ENERGY DEPOSIT & SCHOLARSHIP FUND 1479525 C MEMBERSHIPS IN ASSOCIATED ORGANIZATIONS 2135 C 39305018 CONSUMER DEPOSITS 2058621 ADVANCES FOR CONSTRUCTION 2140824 UNCLAIMED PATRONAGE CAPITAL PAYABLE 615671 ACCRUED OPERATING TAXES 376648 5191764 X 114764892 45000 45000 114719892 613831 613831 115333723 102832444 45000 45000 102787444 12937837 12937837 115725281 PART IV, LINE 2B: PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED A RURAL SCHOLARSHIP FUND WITH AMOUNTS DESIGNATED UNCLAIMED UNDER STATE LAW. THE AMOUNTS DEPOSITED INTO THE RURAL SCHOLARSHIP FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED FOR SCHOLARSHIPS TO ENABLE STUDENTS FROM RURAL AREAS TO ATTEND COLLEGE, TECHNICAL SCHOOL OR OTHER POST SECONDARY EDUCATION INSTITUTION. ANY AMOUNTS SO DEPOSITED INTO THE RURAL SCHOLARSHIP FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. PART X, LINE 2: THE COOPERATIVE ADOPTED THE "UNCERTAIN TAX POSITIONS" PROVISIONS OF ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA. 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 POSITION 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: OFFSET OF INTER-DIVISIONAL RENT REVENUE AND EXPENSE 45,000. PART XI, LINE 4B - OTHER ADJUSTMENTS: NON-OPERATING EXPENSE RECLASSIFIED AS FORM 990 EXPENSE 613,831. PART XII, LINE 2D - OTHER ADJUSTMENTS: OFFSET OF INTER-DIVISIONAL RENT REVENUE AND EXPENSE 45,000. PART XII, LINE 4B - OTHER ADJUSTMENTS: NON-OPERATING EXPENSE RECLASSIFIED AS FORM 990 EXPENSE 613,831. PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 12,324,006. 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. THEREFORE, IN ACCORDANCE WITH IRS INSTRUCTIONS, SCHEDULE D, PART IX HAS BEEN LEFT BLANK. 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 CAPITAL 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 IN THE "NON-PROFIT OPERATION" ARTICLE OF THE COOPERATIVE'S BYLAWS. 0 BUCCANEER COMMISSION INC PO BOX 30404 CORPUS CHRISTI TX 78463 741144093 501(C)(3) 7500 2018 BUC DAYS MILITARY APPRECIATION NIGHT SPONSORSHIP AMERICAN CANCER SOCIETY 210 S CARANCAHUA SUITE 301 CORPUS CHRISTI TX 78401 131788491 501(C)(3) 6500 RELAY FOR LIFE 2 PART II: ALL GRANTS, SPONSORSHIPS AND/OR DONATIONS ARE MADE TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA, AND ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. X X X X 0 0 0 TRACE L MCCUAN CEO 217280 0 14383 0 10210 0 55160 0 11895 0 308928 0 0 0 ADRIANA PENA CFO 114705 0 7745 0 565 0 42797 0 26217 0 192029 0 0 0 VARZAVAND IRANI COO 139679 0 7484 0 3073 0 22502 0 26716 0 199454 0 0 0 SARAH FISHER CCO 135940 0 5110 0 1351 0 44985 0 27117 0 214503 0 0 0 FRANK WILSON CRO 109771 0 5478 0 509 0 35444 0 25879 0 177081 0 0 0 MANUEL MAYORGA LINE SUPPORT 98905 0 3171 0 2849 0 31541 0 23873 0 160339 0 0 0 ROBERT HOLLOWAY JOURNEY LINEMAN 134409 0 466 0 305 0 14940 0 23657 0 173777 0 0 0 JUAN RIVERA JOURNEY LINEMAN 132938 0 256 0 287 0 17793 0 23657 0 174931 0 0 0 ROLAND TREVINO JOURNEY LINEMAN 107544 0 274 0 305 0 19174 0 23657 0 150954 0 0 0 PART II, COLUMN C: INCLUDED IN THIS AMOUNT IS THE INCREASE IN ACTUARIAL VALUE OF BENEFITS PAYABLE UNDER A DEFINED BENEFIT RETIREMENT PLAN. THE CONTRIBUTION RATE FOR PARTICIPANTS IN THE NRECA R&S DEFINED BENEFIT PENSION PLAN ARE THE SAME FOR ALL INDIVIDUALS IN THIS MULTI-EMPLOYER PLAN. THE CHANGE IN ACTUARIAL VALUE FOR EACH PARTICIPANT, HOWEVER, VARIES WITH AGE, YEARS OF SERVICE AND THE CURRENT INTEREST RATE ENVIORNMENT. IN OTHER WORDS, THE OLDER A PLAN PARTICIPANT IS, THE GREATER THE INCREASE IN THAT INDIVIDUAL'S CHANGE IN ACTUARIAL VALUE, ALL OTHER THINGS BEING EQUAL. BECAUSE THIS RELATES TO A MULTI-EMPLOYER PLAN, CASH CONTRIBUTIONS TO THE PLAN IN LIEU OF THE ACTUARIAL INCREASE ARE EXPENSED IN THE FINANCIAL STATEMENTS. TRACE MCCUAN: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 48,110 EMPLOYER CONTRIBUTION TO 401(K) PLAN 7,050 TOTAL REPORTED IN COLUMN C $ 55,160 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (48,110) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 36,670 EXPENSE TO THE COOPERATIVE $ 43,720 ADRIANA PENA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 38,949 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,848 TOTAL REPORTED IN COLUMN C $ 42,797 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (38,949) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 20,532 EXPENSE TO THE COOPERATIVE $ 24,380 VARZAVAND IRANI: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 17,838 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,664 TOTAL REPORTED IN COLUMN C $ 22,502 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (17,838) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 24,970 EXPENSE TO THE COOPERATIVE $ 29,634 SARAH FISHER: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 40,428 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,557 TOTAL REPORTED IN COLUMN C $ 44,985 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (40,428) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 22,884 EXPENSE TO THE COOPERATIVE $ 27,441 FRANK WILSON: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 31,767 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,677 TOTAL REPORTED IN COLUMN C $ 35,444 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (31,767) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 19,821 EXPENSE TO THE COOPERATIVE $ 23,498 MANUEL MAYORGA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 28,265 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,276 TOTAL REPORTED IN COLUMN C $ 31,541 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (28,265) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 17,583 EXPENSE TO THE COOPERATIVE $ 20,859 ROBERT HOLLOWAY: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 12,353 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,587 TOTAL REPORTED IN COLUMN C $ 14,940 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (12,353) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 13,428 EXPENSE TO THE COOPERATIVE $ 16,015 JUAN RIVERA: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 15,217 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,576 TOTAL REPORTED IN COLUMN C $ 17,793 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (15,217) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 13,428 EXPENSE TO THE COOPERATIVE $ 16,004 ROLAND TREVINO: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 16,685 EMPLOYER CONTRIBUTION TO 401(K) PLAN 2,489 TOTAL REPORTED IN COLUMN C $ 19,174 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (16,685) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 13,428 EXPENSE TO THE COOPERATIVE $ 15,917 FORM 990, PART I: IN GENERAL, WHEN AN ELECTRIC COOPERATIVE BASES THE PATRONAGE DIVIDEND CALCULATION ON ITS NET BOOK INCOME/(LOSS), PAGE 1, PART I, LINE 19 - REVENUE LESS EXPENSES - WILL BE $0. FOR THE CURRENT YEAR, PAGE 1 , PART I, LINE 19 REPORTS A NET LOSS OF $391,558, WHICH IS THE INCOME STATEMENT EFFECT OF ACCRUED UNBILLED REVENUE. THE GAAP BASIS FINANCIAL STATEMENTS INCLUDE AN ACCRUAL FOR UNBILLED REVENUE BECAUSE THE COOPERATIVE'S BILLING CYCLE DOES NOT END ON THE LAST DAY OF THE MONTH. THEREFORE, IT HAS REVENUE IN DECEMBER OF EACH YEAR THAT IT HAS EARNED BUT WILL NOT BILL UNTIL THE FIRST BILLING CYCLE OF THE FOLLOWING YEAR. THE COOPERATIVE ESTIMATES THIS REVENUE AND RECORDS IT AS ACCRUED UNBILLED REVENUE IN ORDER TO MATCH THE REVENUE WITH THE YEAR EARNED. HOWEVER, THE COOPERATIVE ALLOCATES THE REVENUE TO MEMBERS IN THE YEAR IT IS BILLED RATHER THAN WHEN ACCRUED. THIS TIMING DIFFERENCE IS FAIR AND EQUITABLE BECAUSE IT MATCHES THE PATRONAGE DIVIDEND ALLOCATED WITH THE BILLING RECORDS USED TO ALLOCATE THE MARGINS. DUE TO THE TIMING OF WHEN THE COOPERATIVE ALLOCATES ACCRUED UNBILLED REVENUE, PAGE 1 , PART I, LINE 19 ANNUALLY REPORTS NET INCOME EQUAL TO THE NET INCREASE IN ACCRUED UNBILLED REVENUE OR A NET LOSS EQUAL TO THE NET DECREASE IN UNBILLED REVENUE. THE FOLLOWING SCHEDULE IS PROVIDED TO FURTHER EXPLAIN THE IMPACT OF THIS TRANSACTION: ADD: UNBILLED REVENUE 12/31/18 $ 5,214,275 LESS: UNBILLED REVENUE 12/31/17 (5,605,833) (A) - DECREASE EQUALS NET LOSS ON PAGE 1 $ (391,558) (B) - BENEFITS PAID TO MEMBERS (I.E. PATRONAGE DIVIDENDS), PART I, LINE 14 $12,324,006 TOTAL 2018 NET MARGIN (A + B) $11,932,448 FORM 990, PART VI, SECTION A, LINE 6 THE COOPERATIVE WAS FORMED BY THE MEMBERS TO PROVIDE ELECTRIC SERVICE AT COST ON A COOPERATIVE BASIS. FORM 990, PART VI, SECTION A, LINE 7A THE MEMBERS OF THE COOPERATIVE VOTE ON THE BOARD OF DIRECTORS. ELECTIONS ARE DONE ON A ONE MEMBER ONE VOTE BASIS. FORM 990, PART VI, SECTION A, LINE 7B THE FOLLOWING ACTS REQUIRE APPROVAL OF THE MEMBERS OF THE COOPERATIVE: 1. AMENDMENT TO THE ARTICLES OF INCORPORATION 2. DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS 3. DISSOLUTION AND LIQUIDATION OF THE COOPERATIVE 4. MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION 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 FOR DISCUSSION AND REVIEW PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C DIRECTORS, OFFICERS AND KEY EMPLOYEES ARE REQUIRED TO DISCLOSE IMMEDIATELY ANY RELATIONSHIPS CONSIDERED TO BE A POSSIBLE CONFLICT OF INTEREST. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT AND A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR CEOS/GENERAL MANAGERS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN TEXAS AND THE NATION. THE BOARD AND THE CEO USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT AND 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 WILL PROVIDE A COMPLETE COPY OF ITS CONFLICT OF INTEREST POLICY TO ANY MEMBER REQUESTING A COPY. THE COOPERATIVE ALSO ANNUALLY PROVIDES A COPY OF THE AUDITED BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE WITH THE ANNUAL REPORT. ADDITIONALLY, THE BYLAWS, ARTICLES OF INCORPORATION, AND FULL COPY OF AUDITED FINANCIAL STATEMENTS (INCLUDING FOOTNOTES) ARE ALSO POSTED TO THE COOPERATIVE'S WEBSITE FOR THE MOST RECENTLY COMPLETED CALENDAR YEARS. 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. ADDITIONALLY, THE COOPERATIVE PARTICIPATES IN A MULTI-EMPLOYER DEFINED BENEFIT PLAN. CONTRIBUTIONS TO THIS PLAN ARE BASED ON THE FULL FUNDING LIMITATION OF SUCH PLAN. EMPLOYER CONTRIBUTIONS FOR BOTH PLANS ARE AVAILABLE TO PARTICIPATING EMPLOYEES, INCLUDING OFFICERS AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. 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 ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE TOTAL AMOUNT CONTRIBUTED BY THE COOPERATIVE TO THE DEFINED CONTRIBUTION PLAN AND INSURANCE PAID ON BEHALF OF AND FOR THEIR BENEFIT. FORM 990, PART VIII, LINE 2B: PATRONAGE DIVIDENDS RESULT FROM THE PURCHASE OF WHOLESALE POWER FROM A GENERATION & TRANSMISSION COOPERATIVE. PATRONAGE DIVIDENDS ALSO 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: ALTHOUGH THE COOPERATIVE IS NO LONGER AN RUS BORROWER, ITS ACCOUNTING RECORDS ARE MAINTAINED IN ACCORDANCE WITH THE RUS UNIFORM SYSTEM OF ACCOUNTS (USOA) PRESCRIBED FOR RUS ELECTRIC BORROWERS. 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, 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 THE TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 4,389,960 LESS: DIRECTOR FEES REPORTED ON FORM 1099-MISC (183,625) LESS: EMPLOYEE OFFICER BENEFITS REPORTED ON LINE 5 (318,712) PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 1,389,442 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING AND OTHER ACCOUNTS 401,389 TOTAL WAGES ACCRUED AND/OR PAID $ 5,678,454 FORM 990, PART IX, LINE 24: ADMINISTRATIVE & GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 1,166,391 OFFICE SUPPLIES 667,484 OUTSIDE SERVICES 189,535 INSURANCES 381,952 REGULATORY COMMISSION 353,142 DIRECTORS 226,664 DUES AND SUBSCRIPTIONS 117,373 ANNUAL MEETING 169,209 ADVERTISING 1,491,940 MISCELLANEOUS GENERAL 320,556 MAINTENANCE OF GENERAL PLANT 372,356 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 5,456,602 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (183,625) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,098,690) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (519,926) LESS: OFFSET OF INTERDIVISION RENT INCOME (45,000) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 3,609,361 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 2018 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 IX, LINE 24E: OTHER EXPENSES ARE COMPRISED OF THE FOLLOWING: OTHER DEDUCTIONS $ 222,315 MILITARY PRIVATIZATION EXPENSES 586,761 PROPERTY AND GROSS RECEIPTS TAXES 1,309,962 TOTAL OTHER EXPENSES PER FORM 990, PART IX $ 2,119,038 FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ALLOCATED OR TO BE ALLOCATED 12,324,006. PATRONAGE CAPITAL RETIRED - TOTAL -3,641,926. PATRONAGE CAPITAL RETIRED - DISCOUNT 245,170. NET CHANGE IN MEMBERSHIPS 7,075. FORM 990, PART XII, LINE 2C: THE BOARD OF DIRECTORS HAVE ASSIGNED MEMBERS TO AN AUDIT COMMITTEE TO OVERSEE THE FINANCIAL STATEMENT AUDIT AND SELECT THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. PROCEDURAL CHANGES DID NOT OCCUR DURING THE YEAR. NUECES ELECTRIC CHARITIES INC 14353 COOPERATIVE AVE ROBSTOWN TX 78380 742756238 BETTERING THE QUALITY OF LIFE OF CITIZENS WITHIN THE SERVICE AREA. TX 501(C)(3) LINE 7 NUECES ELECTRIC COOPERATIVE INC 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 NUECES ELECTRIC CHARITIES INC B N/A - UNDER $50,000 NUECES ELECTRIC CHARITIES INC N N/A - UNDER $50,000 NUECES ELECTRIC CHARITIES INC O N/A - UNDER $50,000