2013-11-01T16:59:40-05:00 2012-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2012-01-01 880089964 VALLEY ELECTRIC ASSOCIATION INC VALL 7757275312 PO BOX 237 PAHRUMP NV 89041 DANIEL TILLMAN 7757275312 2013-10-23 1 Matt R Willis P00419741 8067473806 2013-10-23 2012 2016-03-07 17:11:31Z TOM HUSTED PO BOX 237 PAHRUMP NV 89041 53255445 0 X WWW.VEA.COOP X 1965 NV TO PROVIDE QUALITY AND RELIABLE ELECTRIC SERVICE TO MEMBERS OF THE COOPERATIVE. 6 6 134 0 105082 0 0 0 54228483 52499583 26178 24925 66188 83280 54320849 52607788 62642 74095 4751626 0 6601120 6882433 0 0 0 43053326 52841241 54468714 59797769 -147865 -7189981 192051257 232814500 147693124 196109155 44358133 36705345 THE COOPERATIVE'S RESPONSIBILITY AND AIM IS TO PROVIDE EXCELLENT AND INNOVATIVE CUSTOMER SERVICE AS REFLECTED IN TOP QUALITY ELECTRIC SERVICE RELIABILITY, AFFORDABLE RATES, EMPLOYEE TEAMWORK AND THE HIGHEST DEGREE OF INTEGRITY IN ALL COOPERATIVE ENDEAVORS. 0 0 PROVIDING ELECTRIC ENERGY TO OUR MEMBERS - 20,645 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 0 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 1 34 0 134 1 1 1 0 0 0 0 52793941 1439258 0 X 6 6 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 0 X MINDY MORROW ACCOUNTING MANAGER 7757275312 800 E HWY 372 PAHRUMP NV 89048 X JOHN MAURER 11.10 X X 14800 0 0 DAVID DAWSON 8.20 X X 14800 0 0 DAVE LOWE 10.70 X X 13700 0 0 PETE GAZSY 10.20 X X 14800 0 0 RICK JOHNSON 11.10 X X 14800 0 0 SHIELA RAU 10.50 X 14800 0 0 TOM HUSTED 60.00 X 280849 0 101085 RICK ECKERT 60.00 X 177103 0 57849 DANIEL TILLMAN 50.00 X 55836 0 59342 BRENT FLAMING 70.00 X 168868 0 79820 CURT LEDFORD 50.00 X 166733 0 41094 JASON HIGGINS 50.00 X 155301 0 10922 ANTHONY CIPOLLINI 50.00 X 148482 0 66441 JOHN T WHARTON 50.00 X 142349 0 22950 1383221 0 439503 34 0 1 0 PAR ELECTRICAL CONTRACTORS INC PO BOX 846234 DALLAS TX 75824 ELECTRICAL LINE CONSTRUCTION 12707398 POWER ENGINEERS 6940 GLENBROOK DR HAILEY ID 83333 ELECTRICAL ENGINEERING 3167161 ELECTRICAL CONSULTANTS INC 3521 GABEL RD BILLINGS MT 59102 ELECTRICAL ENGINEERING 1931490 SOUTHERN NEVADA ENVIRONMENTAL STE 1 6295 MCLEOD DR LAS VEGAS NV 89120 BIOLOGICAL MONITORING 1923225 LASKOWSKI CONSTRUCTION PO BOX 6420 PAHRUMP NV 89041 SOLAR WATER HEATER INSTALLATIONS 1270788 17 X ELECTRIC ENERGY SALES 221000 51798881 51798881 PATRONAGE DIVIDENDS 221000 481954 480873 1081 WHEELING INCOME 221000 218748 218748 52499583 24925 24925 45745 100652 0 0 45745 100652 146397 8021 138376 480539 647657 -167118 -167118 SATELLITE INTERNET 519100 103820 103820 LONG DISTANCE SERVICE 517000 181 181 104001 52607788 52339405 105082 163301 X 34058 40037 819764 3701132 872087 1160738 328712 4469029 4255793 PURCHASED POWER 34331943 DISTRIBUTION EXPENSE 4949155 ADMIN. & GENERAL EXP 1839224 TRANSMISSION EXPENSE 1426838 1569259 59797769 11273958 1567066 5343531 3114319 2475326 2703566 1874787 2074539 4288660 7143215 261522623 52036130 162161966 209486493 3726058 3955823 906971 2769479 192051257 232814500 5670087 17726244 135534239 171251507 6488798 7131404 147693124 196109155 X 165240 166850 0 0 44192893 36538495 44358133 36705345 192051257 232814500 X -7189981 -462807 X X 0 1 X 0 0 6557462 6557462 7813057 2667949 5145108 201454691 49368181 152086510 45697413 45697413 209486493 CONSUMER DEPOSITS 722603 DEFERRED CREDIT - CONSUMER ADVANCES FOR LINE CONSTRUCTION 717295 ACCUMULATED PROVISION FOR POST-RETIREMENT HEALTH BENEFITS 4129500 ACCRUED COMPENSATED ABSCENCES 975747 OTHER CURRENT AND ACCRUED LIABILITIES 586259 7131404 X Description of Uncertain Tax Positions Under FIN 48: Part X, Line 2: VEA HAS ADOPTED THE "UNCERTAIN TAX POSITIONS" PROVISIONS OF ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA. THE PRIMARY TAX POSITION OF VEA IS ITS FILING STATUS AS A TAX EXEMPT ENTITY. VEA DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT THEIR 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 VIII THE AMOUNT OF INVESTMENTS - PROGRAM RELATED ON FORM 990, PAGE 11, PART X, LINE 13 DOES NOT EQUAL OR EXCEED 5 PERCENT OF THE TOTAL ASSETS ON FORM 990, PAGE 11, PART X, LINE 16, COLUMN B. CONSEQUENTLY IN ACCORDANCE WITH IRS INSTRUCTIONS SCHEDULE D, PART VIII 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 PERCENT 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. 1 TO ASSIST INDIVIDUALS IN NEED WITH THEIR ELECTRIC BILL 1063 32037 SECONDARY EDUCATION SCHOLARSHIPS FOR COOPERATIVE MEMBERS AND/OR THEIR DEPENDENTS 8 8000 Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: INDIVIDUALS SEEKING ASSISTANCE WITH ELECTRIC BILLS MUST SUBMIT AN APPLICATION FORM TO THEIR LOCAL SOCIAL SERVICE AGENCY. APPLICANTS WILL BE ASKED THE FOLLOWING: A) WHAT ARE THE UNUSUAL CIRCUMSTANCES THAT REQUIRE YOU TO SEEK ASSISTANCE? B) IF YOU RECEIVE ASSISTANCE, WILL YOU BE ABLE TO KEEP CURRENT ON FUTURE UTILITY BILLS? C) DO YOU LIVE IN ANY FORM OF SUBSIDIZED HOUSING? D) HAVE YOU ENTERED INTO A BILL PAYMENT ARRANGEMENT WITH THE COOPERATIVE? E) HAVE YOU APPLIED FOR ASSISTANCE FROM ANY OTHER STATE OR FEDERAL LOW INCOME ENERGY ASSISTANCE PROGRAM BEFORE APPLYING HERE? FUNDS MAY BE USED TO PAY PAST DUE BILL OR RESTORE SERVICE IF SERVICE WAS TERMINATED. FUNDS MAY NOT BE USED FOR DEPOSITS, RETURNED CHECK FEES, DAMAGE CHARGES, ENERGY THEFT CHARGES, FINAL BILLS OR IRRIGATION AND GENERAL SERVICE ACCOUNTS. TWO FULL-TIME ACADEMIC, TWO FULL-TIME VOCATIONAL, AND TWO PART-TIME CONTINUING EDUCATION SCHOLARSHIPS WILL BE AWARDED ANNUALLY TO ASSIST QUALIFIED INDIVIDUALS IN FURTHERING THEIR EDUCATION. TO BE ELIGIBLE A CANDIDATE OR CANDIDATE'S PARENTS OR LEGAL GUARDIAN MUST BE AN ACTIVE MEMBER OF VALLEY ELECTRIC ASSOCIATION. APPLICANT MUST ENROLL OR BE ENROLLED AT AN ACCREDITED EDUCATIONAL OR TRAINING INSTITUTION. SCHOLARSHIPS WILL BE AWARDED BY THE VOLUNTEER SCHOLARSHIP COMMITTEE AND WILL BE BASED ON GRADE POINT AVERAGE, SCHOOL/COMMUNITY INVOLVEMENT, SUBMITTED 500 WORD ESSAY AND OTHER MISCELLANEOUS CRITERIA. FOR MORE INFORMATION REGARDING THE SCHOLARSHIPS VISIT WWW.VEA.COOP. ALL GRANTS, SPONSORSHIPS AND DONATIONS ARE MADE TO NON-PROFIT AND CIVIC ORGANIZATIONS THAT ARE LOCATED IN THE COOPERATIVE'S SERVICE AREA. ALL DONATIONS ARE INTENDED TO IMPROVE THE COMMUNITIES IN WHICH OUR MEMBERS RESIDE. X 1 1 X X 0 0 0 TOM HUSTED 262536 0 0 0 18313 0 72408 0 28677 0 381934 0 0 0 RICK ECKERT 174808 0 0 0 2295 0 30086 0 27763 0 234952 0 0 0 BRENT FLAMING 147732 0 0 0 21136 0 51772 0 28048 0 248688 0 0 0 CURT LEDFORD 164233 0 0 0 2500 0 13517 0 27577 0 207827 0 0 0 JASON HIGGINS 95257 0 59543 0 501 0 0 0 10922 0 166223 0 0 0 ANTHONY CIPOLLINI 116823 0 4490 0 27169 0 39534 0 26907 0 214923 0 0 0 JOHN T WHARTON 84569 0 57394 0 386 0 700 0 22250 0 165299 0 0 0 Supplemental Information Part III 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. 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 CONTRIBUTION TO THE PLAN IN LIEU OF THE ACTUARIAL INCREASE ARE EXPENSED IN THE FINANCIAL STATEMENTS. TOM HUSTED ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $72,408 401(K) EMPLOYER MATCH -0- TOTAL COLUMN C: $72,408 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (72,408) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 79,589 TOTAL COOPERATIVE CASH CONTRIBUTION $79,589 RICK ECKERT ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $30,086 401(K) EMPLOYER MATCH -0- TOTAL COLUMN C: $30,086 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (30,086) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 38,468 TOTAL COOPERATIVE CASH CONTRIBUTION $38,468 BRENT FLAMING ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $48,772 401(K) EMPLOYER MATCH 3,000 TOTAL COLUMN C: $51,772 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (48,772) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 31,820 TOTAL COOPERATIVE CASH CONTRIBUTION $34,820 CURT LEDFORD ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $10,517 401(K) EMPLOYER MATCH 3,000 TOTAL COLUMN C: $13,517 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (10,517) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 52,280 TOTAL COOPERATIVE CASH CONTRIBUTION $55,280 JASON HIGGINS ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ -0- 401(K) EMPLOYER MATCH -0- TOTAL COLUMN C: $ -0- LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (-0-) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: -0- TOTAL COOPERATIVE CASH CONTRIBUTION $ -0- ANTHONY CIPOLLINI ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $36,534 401(K) EMPLOYER MATCH 3,000 TOTAL COLUMN C: $39,534 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (36,534) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 32,969 TOTAL COOPERATIVE CASH CONTRIBUTION $35,969 JOHN T WHARTON ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN $ -0- 401(K) EMPLOYER MATCH 700 TOTAL COLUMN C: $ 700 LESS: ACTUARIAL INCREASE IN DEFINED BENEFIT PLAN: (-0-) ADD: CASH CONTRIBUTION TO DEFINED BENEFIT PLAN: 22,266 TOTAL COOPERATIVE CASH CONTRIBUTION $22,966 Part II Column B(III) Other Compensation INCLUDED IN COLUMN B (III) ARE DEFERRED COMPENSATION PAYMENTS RELATED TO THE POST-RETIREMENT HEALTH INSURANCE PLAN ADMENDMENT AND CURTAILMENT THE ASSOCIATION ENTERED INTO WITH CERTAIN EMPLOYEES. IN EXCHANGE FOR FOREGOING THEIR POST-RETIREMENT HEALTH INSURANCE BENEIFT, THE EMPLOYEES ARE ELIGIBLE FOR CASH PAYMENTS TO BE PAID IN 2008 THROUGH 2012, BASED ON YEARS OF SERVICE, ONGOING EMPLOYMENT AND OTHER FACTORS. BELOW IS THE AMOUNT OF DERFERRED COMPENSATION PAYMENTS MADE TO EACH EMPLOYEE LISTED ON SCHEDULE J PART II. TOM HUSTED $ 1,978 BRENT FLAMING $15,387 ANTHONY CIPOLLINI $19,783 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. DISSOLUTION/LIQUIDATION OF THE COOPERATIVE. 2. MERGER OR CONSOLIDATION OF THE COOPERATIVE WITH ANOTHER ORGANIZATION. 3. THE DISPOSAL OF A SUBSTANTIAL PORTION OF THE COOPERATIVE'S ASSETS. 4. BYLAW AMENDMENTS. Form 990, Part VI, Section B, line 11 MANAGEMENT PRESENTED A COPY OF THE FORM 990 TO THE BOARD FOR DISCUSSION, REVIEW AND APPROVAL 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 12c DIRECTORS AND OFFICERS ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY. THE CONFLICT OF INTEREST POLICY IS EXPLAINED TO ALL NEW DIRECTORS COMING ON THE BOARD. DIRECTORS AND OFFICERS ARE REQUIRED TO DISCLOSE ANY ACTION OR SITUATION THAT MIGHT VIOLATE THE POLICY TO THE FULL BOARD OF DIRECTORS AS SOON AS POSSIBLE. BOARD MINUTES ARE NOTED WHEN A DIRECTOR HAS A CONFLICT OF INTEREST. Form 990, Part VI, Section B, line 15 THE BOARD OF DIRECTORS USE A COMPENSATION SURVEY WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR CEO'S FROM COOPERATIVES LOCATED IN NEVADA AND THE NATION. THE BOARD AND CEO USE 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 SIMILAR COOPERATIVES THROUGHOUT NEVADA AND THE NATION. Form 990, Part VI, Section C, line 19 THE COOPERATIVE PROVIDES A SUMMARIZED COPY OF THE AUDITED FINANCIAL STATEMENTS TO THE MEMBERS OF THE COOPERATIVE AT THE ANNUAL MEETING. THE COOPERATIVE'S BYLAWS, ARTICLES OF INCORPORATION AND SEVERAL YEARS OF ANNUAL REPORTS ARE ALSO AVAILABLE ON THE COOPERATIVE'S WEBSITE. THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF THE AUDITED FINANCIAL STATEMENTS, CONFLICT OF INTEREST POLICY, OR GOVERNING DOCUMENTS TO ANY MEMBER WHO REQUESTS A COPY. TO PROVIDE DETAIL REGARDING OFFICER'S OTHER COMPENSATION 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. AS PART OF THE PLAN DOCUMENT, THE COOPERATIVE PROVIDES A MATCHING CONTRIBUTION UP TO $3,000 OF A PARTICIPATING EMPLOYEE'S SALARY. 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 EMPLOYEES, INCLUDING OFFICERS, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICER OR HIGHLY COMPENSATED EMPLOYEES IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN FOR THE OFFICER OR HIGHLY COMPENSATED EMPLOYEES, THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN AND THE INSURANCE PREMIUMS PAID FOR THE BENEFIT OF THE OFFICER OR HIGHLY COMPENSATED EMPLOYEE. IN ADDITION TO THE ABOVE PENSION PLANS, THE COOPERATIVE ALSO PROVIDES POST-RETIREMENT HEALTH INSURANCE BENEFITS THROUGH AN UNFUNDED WELFARE BENEFIT PLAN. THE VALUE OF THESE BENEFITS HAS NOT BEEN ESTIMATED. PATRONAGE DIVIDENDS Form 990, Part VIII, Line 2 PATRONAGE DIVIDENDS 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. ACCOUNTING SYSTEM Form 990, Part IX THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE UNIFORM SYSTEM OF ACCOUNTS AS PRESCRIBED BY THE FEDERAL ENERGY REGULATORY COMMISSION FOR ELECTRIC UTILITIES. THE UNIFORM SYSTEM OF ACCOUNTS DOES NOT RECORD EXPENSES IN THE GENERAL EXPENSE CATEGORIES PROVIDED ON PART IX LINES 1 - 23. THE COOPERATIVE WILL BREAK OUT 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 WILL BE REPORTED ON LINE 24 UNDER THE EXPENSE CATEGORIES REQUIRED BY THE UNIFORM SYSTEM OF ACCOUNTS. RECONCILIATION OF WAGES PER RETURN TO FORM W-3 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. IN AN EFFORT TO EXPLAIN WHY THE AMOUNTS REPORTED ON LINES 5-7 DO NOT AGREE TO THE W-3 THE FOLLOWING RECONCILIATION IS PROVIDED. TOTAL PER LINES 5-7 $4,520,896 LESS DIRECTORS FEES REPORTED ON 1099-MISC (87,700) LESS OFFICERS BENEFITS INCLUDED IN LINE 5 (218,276) PLUS SALARIES AND WAGES ALLOCATED TO NONOPERATING MARGINS 6,183 PLUS SALARIES AND WAGES ALLOCATED TO ASSET ACCOUNTS 4,890,041 RECONCILIATION TO W-3 $9,111,144 BREAKDOWN OF EXPENSES INCLUDED IN ADMINISTRATIVE AND GENERAL Form 990, Part IX, Line 24 THE FOLLOWING IS A BREAKDOWN OF THE EXPENSES REPORTED AS ADMINISTRATIVE AND GENERAL EXPENSE ON FORM 990, PART IX, LINE 24. OUTSIDE SERVICES EMPLOYED $276,619 OFFICE SUPPLIES AND EXPENSE 261,442 INSURANCE 51,508 GENERAL ADVERTISING 175,150 MEETINGS EXPENSE 153,520 MAINTENANCE OF GENERAL PLANT 57,294 MISCELLANEOUS GENERAL EXPENSE 863,691 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $1,839,224 TO PROVIDE DETAIL REGARDING OTHER EXPENSES Form 990, Part IX, Line 24e dTHE FOLLOWING IS A BREAKDOWN OF THE EXPENSES REPORTED AS OTHER EXPENSES ON FORM 990, PART IX, LINE 24F. CUSTOMER ACCOUNTS $1,202,688 SATELLITE INTERNET EXPENSES 81,828 SALES EXPENSE 277,163 OTHER DEDUCTIONS 7,580 TOTAL OTHER EXPENSES PER FORM 990 LINE 24F $1,569,259 BENEFITS PAID TO MEMBERS Form 990, Part IX, Line 4 THE FORM 990 INSTRUCTIONS SPECIFICALLY STATE THAT THE AMOUNT OF PATRONAGE DIVIDENDS PAID TO THE MEMBERS 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 MEMBERS. THE COOPERATIVE'S TAX EXEMPT PURPOSE IS TO PROVIDE ELECTRICITY TO ITS MEMBERS 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 MEMBERS. 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 MEMBERS, AND (3) IN A FAIR AND EQUITABLE BASIS 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 AND IS SUMMARIZED AS FOLLOWS: (A) IN ORDER TO INDUCE PATRONAGE AND TO ASSURE THAT THE COOPERATIVE WILL OPERATE ON A NONPROFIT BASIS, THE COOPERATIVE IS OBLIGATED TO ACCOUNT ON A PATRONAGE BASIS TO ALL ITS MEMBERS FOR ALL AMOUNTS RECEIVED AND RECEIVABLE FROM THE FURNISHING OF ELECTRIC ENERGY IN EXCESS OF OPERATING COSTS AND EXPENSES PROPERLY CHARGEABLE AGAINST SUCH SERVICES (I.E. MARGINS FROM THE PROVISION OF ELECTRIC ENERGY). (B) THE MARGINS FROM THE PROVISION OF ELECTRIC ENERGY ARE RECEIVED WITH THE UNDERSTANDING THAT THEY ARE FURNISHED BY THE MEMBERS AS CAPITAL. (C) THE COOPERATIVE IS OBLIGATED TO PAY BY CREDITS TO A CAPITAL ACCOUNT FOR EACH MEMBER FOR ALL SUCH MARGINS. AND (D) ALL SUCH AMOUNTS CREDITED TO THE CAPITAL ACCOUNT OF ANY MEMBER SHALL HAVE THE SAME STATUS AS THOUGH THEY HAD BEEN PAID TO THE MEMBER IN CASH IN PURSUANCE OF A LEGAL OBLIGATION TO DO SO AND THE MEMBER HAD THEN FURNISHED TO THE COOPERATIVE CORRESPONDING AMOUNTS OF CAPITAL. THE AMOUNT REPORTED ON PART IX, LINE 4 REPRESENTS THE AMOUNT OF PATRONAGE CAPITAL THAT IS EITHER ALLOCATED OR TO BE ALLOCATED TO THE MEMBERS RESULTING FROM THEIR PURCHASE OF ELECTRICITY FROM THE COOPERATIVE FOR THE 2012 CALENDAR YEAR. THE ACTUAL ALLOCATION INCLUDES EQUITY EARNINGS OF THE SUBSIDIARY, BUT FOR THE PURPOSE OF THE FORM 990, EQUITY EARNINGS OF THE SUBSIDIARY ARE REPORTED AS AN OTHER CHANGE IN NET ASSETS. AS NOTED ABOVE, SUCH AMOUNTS ARE ALLOCATED SUBSEQUENT TO YEAR-END IN A FAIR AND EQUITABLE MANNER ON THE BASIS OF PATRONAGE (I.E. PURCHASES). THE AMOUNTS ALLOCATED ARE REPRESENTATIVE OF THE MARGINS FROM THE PROVISION OF ELECTRIC ENERGY TO THE MEMBERS AND ARE DONE PURSUANT TO THE OBLIGATION THAT EXISTED IN THE BYLAWS PRIOR TO THE COOPERATIVE PROVIDING ELECTRICITY TO ITS MEMBERS. THEREFORE, THESE AMOUNTS MEET THE DEFINITION OF THE TERM "PATRONAGE DIVIDENDS PAID". PLEASE NOTE, HOWEVER, THAT BECAUSE PATRONAGE DIVIDENDS IS THE PROCESS BY WHICH THE COOPERATIVE OPERATES AT COST WITH ITS MEMBERS AND THEREBY A KEY COMPONENT TO ACCOMPLISHING ITS EXEMPT PURPOSE, THE COOPERATIVE HAS REPORTED THE AMOUNT OF ITS 2012 MARGIN THAT HAS BEEN OR IS TO BE ALLOCATED TO THE MEMBERS SUBSEQUENT TO YEAR-END. SUCH AMOUNTS ARE AN EXPENSE FOR FORM 990 REPORTING AND IS NOT AN EXPENSE FOR FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. AS A RESULT, THE DIFFERENCE BETWEEN THE COOPERATIVE'S GAAP BASIS FINANCIAL STATEMENTS AND THE REVENUE LESS EXPENSES REPORTED ON PART I, LINE 19 IS THE AMOUNT OF PATRONAGE DIVIDENDS REPORTED AS BENEFITS PAID TO MEMBERS. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 9: NET INCREASE IN MEMBERSHIPS 1,610. DISCOUNT FROM ESTATE RETIREMENTS 123,324. RETIREMENT OF CAPITAL CREDITS -232,541. OTHER COMPREHENSIVE INCOME ADJUSTMENT FOR POST-RETIREMENT BENEFITS -355,200. AUDIT COMMITTEE Form 990, Part XII, Line 2c THE BOARD AS A WHOLE IS RESPONSIBLE FOR OVERSEEING THE FINANCIAL STATEMENT AUDIT AND SELECTING THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. VALLEY ELECTRIC TRANSMISSION ASSOCIATION LLC 800 E HIGHWAY 372 PAHRUMP NV 89041 274844226 TRANSMISSION OF ELECTRICITY. NV 6037908 109932123 VALLEY ELECTRIC ASSOCIATION INC VALLEY ELECTRIC CHARITABLE FOUNDATION 800 E HIGHWAY 372 PAHRUMP NV 89048 263157116 TO PROVIDE SCHOLARSHIPS AND GRANTS TO MEMBERS OF THE COOPERATIVE'S AREA. NV 501(c)(3) Line 7 VALLEY ELECTRIC ASSOCIATION INC 0 VEA PAC PO BOX 237 PAHRUMP NV 89041 274721243 LOBBYING AT STATE AND FEDERAL LEVELS FOR RURAL ELECTRIC COOPERATIVES. NV 527 VALLEY ELECTRIC ASSOCIATION INC 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0