2018-11-12T11:08:11-06:00 2017-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2017-01-01 850096243 LEA COUNTY ELECTRIC COOPERATIVE INC LEAC 5753963631 PO BOX 1447 LOVINGTON NM 882601447 BOBBY FERRIS EVP & GENERAL MANAGER 5753963631 2018-11-08 1 WILLIAM M MILLER P00439459 8067473806 2018-10-23 X 65.182.80.152 2018-11-08 10:58:03 CS P 587A88673713A033F58E04FDF6801CBB1F7DD2F2 587A88673713A033F58E04FDF6801CBB1F7DD2F2 2017 2019-02-21 02:37:17Z BOBBY FERRIS PO BOX 1447 LOVINGTON NM 882601447 95180255 0 X WWW.LCECNET.COM X 1949 NM TO PROVIDE ELECTRIC ENERGY TO RURAL AREAS AT COST ON A COOPERATIVE BASIS. 9 9 93 0 110396 108896 0 0 83689450 93631952 882124 944389 159471 322838 84731045 94899179 21513 28170 3318439 7185758 6844284 6685216 0 0 0 74546809 81000035 84731045 94899179 0 0 197895517 203854853 107670510 108078454 90225007 95776399 NONE 0 0 SALE OF ELECTRIC POWER TO MEMBERS - 15,831 CONNECTED METERS WERE PROVIDED POWER AT YEAR END AT COST ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. 0 0 0 0 0 0 0 0 0 1 0 1 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 1 57 0 93 1 1 1 0 0 0 0 98125797 2293353 0 X 9 9 0 0 0 0 1 1 1 1 0 0 0 1 0 0 0 1 0 0 X BOBBY FERRIS EVP & GENERAL MANAGER 5753963631 1300 W AVENUE D LOVINGTON NM 882601447 X JOHN GRAHAM PRESIDENT 11.30 X X 25027 0 0 ROBERT CAUDLE VICE PRESIDENT 12.00 X X 31103 0 0 DAN HARDIN SECRETARY/TREASURER 3.30 X X 23817 0 0 RANDALL MCCORMICK TRUSTEE 6.40 X 25949 0 0 KENNY WALLACE TRUSTEE 2.60 X 23027 0 0 TRAVIS GLENN TRUSTEE 3.40 X 19549 0 0 CHARLES KINSOLVING TRUSTEE 7.40 X 24027 0 0 CHARLES GARNER JR TRUSTEE 3.30 X 22027 0 0 TERRY DAVIS TRUSTEE 2.00 X 19184 0 0 GARY HURSE EVP & GENERAL MANAGER 60.00 X 789717 0 99994 BOBBY KIMBRO SYSTEM OPERATING MANAGER 50.00 X 194634 0 91989 JOHN BENARD DISTRIBUTION MANAGER 50.00 X 143051 0 97586 MICHAEL FARIS ACCOUNTING MANAGER 50.00 X 155520 0 117416 JANETTE FARIS ADMIN SERVICE MANAGER 50.00 X 136432 0 102990 DOUG GRUENWALD LINE FOREMAN 50.00 X 131850 0 75692 1764914 0 585667 9 0 1 0 ARC POWER LINE CONSTRUCTION 6551-4 SEVEN RIVERS HWY ARTESIA NM 88210 DISTRIBUTION LINE CONSTRUCTION 1205258 HIGHER POWER 14201 CALIBER DR STE 300 OKLAHOMA CITY OK 73134 DISTRIBUTION LINE CONSTRUCTION 738454 BIRD ELECTRIC ENTERPRISES 8787 IH 20 EASTLAND TX 76470 DISTRIBUTION LINE CONSTRUCTION 425378 HARGRAVE POWER 1608 MARGARET STREET HOUSTON TX 77093 SUBSTATION MAINTENANCE 306670 RE-CON COMPANY 12 NE 52ND STREET OKLAHOMA CITY OK 73105 SUBSTATION MAINTENANCE 300495 10 X SALES OF ELECTRICITY 221000 91493936 91493936 PATRONAGE DIVIDENDS 221000 1924991 1924991 SERVICE FEES 221000 124175 124175 OTHER PROGRAM REVENUE 221000 88850 88850 93631952 1041579 1041579 6450 0 6450 6450 6450 143400 240590 -97190 -97190 103946 -201136 43570 40486 3084 3084 POLE ATTACHMENT INCOME 221000 313304 313304 313304 94899179 93635036 110396 1153747 X 28170 7185758 1103421 4002581 817678 443521 318015 1920729 3867650 PURCHASED POWER 69865786 DISTRIBUTION EXPENSE 2255944 COST OF REMOVAL, NET 1246766 ADMIN & GENERAL EXPENSE 988155 855005 94899179 1364454 944269 14239348 17943682 9286873 7756706 2261262 2801546 1976120 1475966 160792892 69611991 83537324 91180901 44475851 40941420 799110 857942 28176451 29953111 11778724 9999310 197895517 203854853 8433787 9270864 194100 105451 54579021 51462123 44463602 47240016 107670510 108078454 X 35215 35640 0 0 90189792 95740759 90225007 95776399 197895517 203854853 X 0 5551392 X X 0 1 X 0 0 46482 471645 518127 6075248 2503604 3571644 151867312 67108387 84758925 2332205 2332205 91180901 EQUITY CONTRIBUTION - WFEC 24263432 C PATRONAGE CAPITAL - WFEC 4389495 C PATRONAGE CAPITAL - FEDERATED 670898 C PATRONAGE CAPITAL - CFC 209390 C PATRONAGE CAPITAL - TEC 197119 C PATRONAGE CAPITAL - COBANK 75987 C CAPITAL TERM CERTIFICATES - CFC 144814 C OTHER INVESTMENTS IN ASSOCIATED ORGANIZATIONS 1976 C 29953111 COST OF REMOVAL LIABILITY 39146351 CONSUMER DEPOSITS 2732819 DEFERRED CREDITS 4588028 ACCRUED OPERATING TAXES 772818 47240016 X 94899179 0 94899179 0 94899179 87713421 0 87713421 7185758 7185758 94899179 PART X, LINE 2: THE COOPERATIVE HAS 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 OR OTHER STATE TAXING AUTHORITY AND THAT ALL TAX BENEFITS ARE LIKELY TO BE REALIZED UPON SETTLEMENT WITH TAXING AUTHORITIES. PART XII, LINE 4B - OTHER ADJUSTMENTS: PATRONAGE CAPITAL ASSIGNABLE 7,185,758. PART VII: THE AMOUNT OF INVESTMENTS - OTHER SECURITIES ON FORM 990, PAGE 11, PART X, LINE 12 DOES NOT EQUAL OR EXCEED 5% OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY, IN ACCORDANCE WITH IRS INSTRUCTIONS SCHEDULE D, PART VII HAS BEEN LEFT BLANK. 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. CONSEQUENTLY, 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 DIVIDENDS 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. X X 1 1 X X 0 0 0 GARY HURSE EVP & GENERAL MANAGER 766325 0 1638 0 21754 0 77446 0 22548 0 889711 0 0 0 BOBBY KIMBRO SYSTEM OPERATING MANAGER 187286 0 1623 0 5725 0 80022 0 11967 0 286623 0 0 0 JOHN BENARD DISTRIBUTION MANAGER 134212 0 1725 0 7114 0 78606 0 18980 0 240637 0 0 0 MICHAEL FARIS ACCOUNTING MANAGER 141421 0 1623 0 12476 0 98770 0 18646 0 272936 0 0 0 JANETTE FARIS ADMIN SERVICE MANAGER 126022 0 1732 0 8678 0 101607 0 1383 0 239422 0 0 0 DOUG GRUENWALD LINE FOREMAN 116040 0 1732 0 14078 0 54100 0 21592 0 207542 0 0 0 PART I, LINE 1A TRAVEL FOR COMPANIONS - PURSUANT TO APPLICABLE TRAVEL POLICIES, THE COOPERATIVE WILL REIMBURSE TRUSTEES AND EMPLOYEES FOR THE COST OF HIS/HER SPOUSE TO ACCOMPANY HIM/HER ON OFFICIAL BUSINESS OF THE COOPERATIVE. NO REIMBURSEMENTS WERE REPORTED DURING 2017. HEALTH OR SOCIAL CLUB DUES - PURSUANT TO THE COOPERATIVE'S WELLNESS POLICY, THE COOPERATIVE WILL PAY UP TO $600 ANNUALLY FOR THE COST OF AN EMPLOYEE'S GYM MEMBERSHIP. TWO EMPLOYEES REPORTED ON PART VII, SECTION A RECEIVED THIS BENEFIT DURING THE YEAR. 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 ENVIRONMENT. 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. GARY HURSE: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 63,421 EMPLOYER CONTRIBUTION TO 401(K) PLAN 14,025 TOTAL REPORTED IN COLUMN C $ 77,446 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (63,421) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 125,714 EXPENSE TO COOPERATIVE $ 139,739 BOBBY KIMBRO: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 74,400 EMPLOYER CONTRIBUTION TO 401(K) PLAN 5,622 TOTAL REPORTED IN COLUMN C $ 80,022 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (74,400) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 46,539 EXPENSE TO COOPERATIVE $ 52,161 JOHN BENARD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 74,495 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,111 TOTAL REPORTED IN COLUMN C $ 78,606 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (74,495) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 33,570 EXPENSE TO COOPERATIVE $ 37,681 MICHAEL FARIS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 94,445 EMPLOYER CONTRIBUTION TO 401(K) PLAN 4,325 TOTAL REPORTED IN COLUMN C $ 98,770 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (94,445) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 32,245 EXPENSE TO COOPERATIVE $ 36,570 JANETTE FARIS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 97,765 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,842 TOTAL REPORTED IN COLUMN C $ 101,607 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (97,765) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 30,041 EXPENSE TO COOPERATIVE $ 33,883 DOUG GRUENWALD: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ 50,581 EMPLOYER CONTRIBUTION TO 401(K) PLAN 3,519 TOTAL REPORTED IN COLUMN C $ 54,100 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN (50,581) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN 23,885 EXPENSE TO COOPERATIVE $ 27,404 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 TRUSTEES. 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. DISSOLUTION/LIQUIDATION OF THE COOPERATIVE 2. MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION 3. DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS 4. AMENDMENT TO THE ARTICLES OF INCORPORATION 5. AMENDMENT TO THE BYLAWS 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. THE DISCUSSION AND REVIEW WAS PERFORMED AT THE BOARD MEETING IMMEDIATELY BEFORE FILING THE FORM 990. FORM 990, PART VI, SECTION B, LINE 15A THE BOARD OF TRUSTEES USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE GENERAL MANAGER. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN NEW MEXICO AND THE NATION. OTHER THAN THE GENERAL MANAGER, THE COOPERATIVE DID NOT HAVE ANY EMPLOYEES MEETING THE DEFINITION OF OFFICER OR KEY EMPLOYEE. THEREFORE, AND PURSUANT TO FORM 990 INSTRUCTIONS, LINE 15B HAS BEEN ANSWERED "NO". FORM 990, PART VI, SECTION C, LINE 19 THE COOPERATIVE PROVIDES A COMPLETE COPY OF ITS GOVERNING DOCUMENTS AND AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. ANNUALLY, THE COOPERATIVE MAILS A COPY OF THE AUDITED BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE WITH THE ANNUAL REPORT. 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 OFFICERS AND HIGHLY COMPENSATED EMPLOYEES ARE COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN, THE EMPLOYER CONTRIBUTIONS TO THE 401(K) PENSION PLAN AND THE INSURANCE PAID ON BEHALF OF AND FOR THEIR BENEFIT. IN ADDITION TO THE ABOVE PENSION PLANS, THE COOPERATIVE ALSO PROVIDES POST-RETIREMENT HEALTH INSURANCE BENEFITS THROUGH A FUNDED WELFARE BENEFIT PLAN. THE VALUE OF THESE BENEFITS HAS NOT BEEN ESTIMATED. FORM 990, PART VII, SECTION A: THE BOARD OF TRUSTEES CONSIDERS THE GENERAL MANAGER TO BE BOTH THE TOP MANAGEMENT OFFICIAL AND THE TOP FINANCIAL OFFICIAL. THEREFORE, ONLY THE GENERAL MANAGER IS LISTED AS AN EMPLOYEE OFFICER. FORM 990, PART VIII, LINE 2: 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: THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE RUS UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED RUS ELECTRIC BORROWERS. THE USOA DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1 - 23. THE COOPERATIVE SEPARATELY STATES 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 TOTAL WAGES ACCRUED AND/OR PAID: TOTAL PER LINES 5-7 $ 5,106,002 LESS: TRUSTEE FEES REPORTED ON FORM 1099-MISC (213,710) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (99,994) PLUS: SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS 784 PLUS: SALARIES AND WAGES CAPITALIZED DIRECTLY TO PLANT 664,510 PLUS: SALARIES AND WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 1,479,298 TOTAL WAGES ACCRUED AND/OR PAID $ 6,936,890 FORM 990, PART IX, LINE 24: ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 1,898,844 OFFICE SUPPLIES 340,259 OUTSIDE SERVICES EMPLOYED 124,150 INJURY & DAMAGES 109,426 EMPLOYEE BENEFITS (379,030) REGULATORY COMISSION 286,101 TRUSTEES 314,624 ASSOCIATION DUES 155,049 MISCELLANEOUS GENERAL 37,060 ADVERTISING - CONSERVATION & SAFETY 282,268 ANNUAL MEETING 69,075 CAPITAL CREDIT 1,634 MAINTENANCE OF GENERAL PLANT 207,589 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $ 3,447,049 LESS: RECLASS OF DONATIONS TO PART IX, LINE 1 (28,170) LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (213,710) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (1,826,192) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (390,822) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 988,155 FORM 990, PART IX, LINE 24E: OTHER EXPENSES ARE COMPRISED OF THE FOLLOWING: TRANSMISSION $ 382,090 CUSTOMER ACCOUNTS & SERVICE 378,843 TAXES - PROPERTY & OTHER 84,734 SALES 9,338 TOTAL OTHER EXPENSES PER FORM 990 LINE 24E $ 855,005 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 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 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 2017 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 1: 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. EACH GRANT, SPONSORSHIP AND/OR DONATION MADE DURING THE YEAR WAS BELOW THE REPORTING THRESHOLD OF SCHEDULE I, PART II. FORM 990, PART XI, LINE 9: PATRONAGE CAPITAL ASSIGNABLE 7,185,758. PATRONAGE CAPITAL RETIRED -1,892,291. NET CHANGE IN MEMBERSHIPS 425. OTHER COMPREHENSIVE INCOME PROVISION FOR PENSIONS AND BENEIFTS 257,500. FORM 990, PART XII, LINE 2C: THE BOARD AS A WHOLE IS RESPONSIBLE FOR OVERSEEING THE AUDIT AND SOLICITING THE CPA WHO WILL PERFORM THE AUDIT. PROCEDURAL CHANGES DID NOT OCCUR DURING THE YEAR. LEA COUNTY ELECTRIC EDUCATION FOUNDATION PO BOX 1447 LOVINGTON NM 88260 850351147 TO PROVIDE COLLEGE SCHOLARSHIPS TO MEMBERS OF THE COOPERATIVE. NM 501(C)(3) PF LEA COUNTY ELECTRIC COOPERTIVE INC 1 ENERGY RESEARCH AND DEVELOPMENT INC PO BOX 1447 LOVINGTON NM 88260 850228936 REAL ESTATE NM LEA COUNTY ELECTRIC COOPERTIVE INC C 1.00000 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 LEA COUNTY ELECTRIC EDUCATION FOUNDATION O N/A - LESS THAN $50,000 ENERGY RESEARCH AND DEVELOPMENT INC S N/A - LESS THAN $50,000