2020-11-16T16:45:33-06:00 2019-12-31 750882037 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2019-01-01 743023938 GUADALUPE VALLEY ELECTRIC COOPERATIVE INC GUAD 8308571200 PO BOX 118 GONZALES TX 78629 DARREN SCHAUER CEO 8308571200 2020-11-13 1 WILLIAM M MILLER P00439459 8067473806 2020-11-13 X 65.182.80.152 2020-11-13 12:42:45 CS P 93747BBE803527A59C7AA0A113D32836965EB064 587A88673713A033F58E04FDF6801CBB1F7DD2F2 2019 2022-01-07 14:23:13Z DARREN SCHAUER PO BOX 118 GONZALES TX 78629 244874099 0 X WWW.GVEC.ORG X 1938 TX TO PROVIDE RELIABLE ELECTRIC & INTERNET SERVICE ON A COOPERATIVE BASIS. 11 10 401 0 8324938 126122 0 0 236517580 238625104 809510 1087042 4517818 5121119 241844908 244833265 23445 14038 16333088 16581513 22039736 23692107 0 0 0 204026080 204925794 242422349 245213452 -577441 -380187 588088968 623150948 283827524 295545923 304261444 327605025 BUILDING ON OUR HERITAGE & HAVING CONFIDENCE IN THE FUTURE, GUADALUPE VALLEY ELECTRIC COOPERATIVE IS A TEAM OF PROFESSIONALS COMMITTED TO EXCEEDING OUR MEMBERS' EXPECTATIONS BY IDENTIFYING & INVESTING IN PRODUCTS & SERVICES THAT FULFILL THE NEEDS OF THOSE WE SERVE. 0 0 ELECTRIC DIVISION:SALE OF ELECTRIC POWER TO MEMBERS ON A COOPERATIVE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL. THERE WERE 85,349 ACTIVE SERVICES AT YEAR END. INTERNET/BROADBAND SERVICE DIVISION:PROVIDING FIBER INTERNET SERVICES TO ITS MEMBERS THROUGH A COMBINATION OF WIRELESS AND FIBER-TO-THE-HOME TECHNOLOGIES. SERVICES OF THIS DIVISION WILL BE PROVIDED TO MEMBERS ON A PATRONAGE BASIS THROUGH THE ALLOCATION OF PATRONAGE CAPITAL TO THE EXTENT OF MARGINS FOR SUCH DIVISION. FIBER AND WIRELESS INTERNET IS ALSO PROVIDED TO NON-MEMBERS ON A NON-PATRONAGE BASIS. 0 0 0 0 0 0 0 1 0 1 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 0 0 0 0 0 0 1 1 1 0 1 137 0 401 1 1 1 0 0 0 0 227648535 13383555 0 0 0 X 11 10 1 0 0 0 1 1 1 1 0 0 0 1 0 1 0 1 1 0 X GARY KORN CFO 8308571200 825 E SARAH DEWITT DR GONZALES TX 78629 X DARREN SCHAUER CEO 60.00 1.00 X 623255 0 57783 SEAN ALVAREZ COO 50.00 1.00 X 351126 0 42636 ROBERT CHRISTMAS SR EXEC MGR - COMPLIANCE 60.00 X 209565 0 42646 CEASON BARNICK SR EXEC MGR - CUSTOMER RELATIONS 50.00 X 205664 0 46038 MIKE ABSHER SENIOR EXECUTIVE MANAGER 40.00 X 226010 0 19035 GARY KORN CFO 50.00 1.00 X 200373 0 42273 JEFFREY STRAHL EXEC MGR - INFORMATION TECHNOLOGY 55.00 X 178075 0 42998 ASHLEY COBURN EXEC MGR - EMPOLYEE DEV & HR 45.00 X 170360 0 41242 ZACHARY TAYLOR EXEC MGR - ENGINEERING 45.00 X 162175 0 39942 ROBERT RUSSELL EXEC ENGINEER - COMMUNICATION TECH 50.00 X 166662 0 17893 STEVE BYONE CFO (JAN-MAY) 55.00 1.00 X 137121 0 23288 LEWIS BORGFELD CHAIRMAN 9.50 3.00 X X 50757 0 0 JOSEPH CASTILLEJA DIRECTOR 4.50 2.00 X 43405 0 0 HENRY SCHMIDT DIRECTOR 8.90 3.00 X 43203 0 0 MARK ROBERTS DIRECTOR 8.50 2.00 X 41205 0 0 MORRIS HARVEY DIRECTOR 5.50 2.00 X 40053 0 0 GARY BIRDWELL DIRECTOR 10.50 2.00 X 39583 0 0 SHAWN MARTINEZ DIRECTOR 6.00 2.00 X 38455 0 0 MELVIN STREY VICE PRESIDENT 7.00 3.00 X X 37345 0 0 ROBERT WERNER DIRECTOR 4.80 2.00 X 31503 0 0 DAVID WARZECHA DIRECTOR 4.50 2.00 X 31395 0 0 DON WILLIAMS SECRETARY/TREASURER 4.30 3.00 X X 30598 0 0 3057888 0 415774 51 0 1 0 VOLT POWER 2910 HWY 31 NW HARTSELLE AL 35640 CONSTRUCTION CONTRACTOR 3661061 SENDERO POWERLINE INC PO BOX 2209 VICTORIA TX 77905 LINE CONSTRUCTION 2282087 TLT CONSTRUCTION CO INC PO BOX 1086 SHERMAN TX 75091 LINE CONSTRUCTION 2240840 SEI 12971 RR 1631 FREDERICKSBURG TX 78624 FIBER CONTRACTOR 1466602 LAMBDA CONSTRUCTION LTD 211 JESSES CIRCLE NEW BRAUNFELS TX 78132 SUBSTATION SITE WORK 1415736 40 X SALES OF ELECTRICITY 221000 206259867 206259867 TRANSMISSION ACCESS 221000 14642032 14642032 SALES FROM INTERNET OPERATIONS 517000 11726743 7890925 3835818 TRANSMISSION LEASE 221000 2632260 2632260 SERVICE FEES & OTHER CHARGES 221000 2332718 2332718 1031484 1018606 12878 238625104 883750 883750 21300 0 21300 21300 21300 244126 40834 203292 203292 203292 INTERCOMPANY MANAGEMENT INCOME 561000 4032407 4032407 MAINTENANCE REVENUE 561000 443835 443835 POLE ATTACHMENT INCOME 221000 432853 432853 190724 190724 5099819 244833265 234967132 8324938 1541195 X 14038 16581513 2368661 15256404 1374532 3440994 1251516 9416948 26967007 PURCHASED POWER 144111537 INTERNET EXPENSE 11217516 ADMIN & GENERAL EXPENSE 8491726 DISTRIBUTION EXPENSE 3650260 1070800 245213452 26264198 32339974 6821702 423354 13422507 13136370 4789600 3462657 82788 84517 9438609 14368723 806829467 267609894 505581934 539219573 12691183 12243901 8996447 7871879 588088968 623150948 25064971 24997470 40150 30057 223474501 242759278 35247902 27759118 283827524 295545923 X 2060928 2536130 0 0 302200516 325068895 304261444 327605025 588088968 623150948 X -380187 23723768 X X 0 1 X 0 1 1 0 1 X 18197098 18197098 69730932 36077214 33653718 659904678 231532680 428371998 58996759 58996759 539219573 DEFERRED CREDITS - ADVANCES FOR CONSTRUCTION 4320291 DEFERRED CREDITS - OTHER 338078 CONSUMER DEPOSITS 3886125 ACCRUED OPERATING TAXES 1558641 ACCUMULATED PROVISION FOR POST RETIREMENT BENEFITS 16887118 ACCUMULATED DEFERRED FIT/UBIT 759475 OTHER LIABILITIES 9390 27759118 X PART IV, LINE 2B: ALSO PURSUANT TO SECTION 74.3013 OF THE TEXAS PROPERTY CODE, THE COOPERATIVE HAS ESTABLISHED AN ECONOMIC DEVELOPMENT FUND WITH RETIREMENTS OF PATRONAGE CAPITAL, WHICH HAVE REMAINED UNCLAIMED FOR A PERIOD OF THREE YEARS. THE AMOUNTS DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE APPROVED BY THE STATE OF TEXAS AND CAN ONLY BE USED FOR THE STIMULATION AND IMPROVEMENT OF BUSINESS AND COMMERCIAL ACTIVITY FOR ECONOMIC DEVELOPMENT IN RURAL COMMUNITIES. ANY AMOUNTS SO DEPOSITED INTO THE ECONOMIC DEVELOPMENT FUND ARE STILL PAYABLE TO THE PERSON TO WHOM THE ORIGINAL PAYMENT WAS MADE BUT UNCLAIMED. PART X, LINE 2: THE COOPERATIVE AND ITS AFFILIATES FOLLOW 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 AND AFFILIATES DETERMINED THAT IT IS MORE LIKELY THAN NOT THAT THEIR TAX POSITIONS 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. X X X X X 0 1 0 DARREN SCHAUER CEO 470192 0 137284 0 15779 0 28000 0 29783 0 681038 0 0 0 SEAN ALVAREZ COO 285995 0 51204 0 13927 0 30477 0 12159 0 393762 0 0 0 ROBERT CHRISTMAS SR EXEC MGR - COMPLIANCE 180291 0 11400 0 17874 0 20406 0 22240 0 252211 0 0 0 CEASON BARNICK SR EXEC MGR - CUSTOMER RELATIONS 180772 0 11413 0 13479 0 20106 0 25932 0 251702 0 0 0 MIKE ABSHER SENIOR EXECUTIVE MANAGER 100994 0 1850 0 123166 0 10886 0 8149 0 245045 0 0 0 GARY KORN CFO 181749 0 4000 0 14624 0 19453 0 22820 0 242646 0 0 0 JEFFREY STRAHL EXEC MGR - INFORMATION TECHNOLOGY 163882 0 1350 0 12843 0 17488 0 25510 0 221073 0 0 0 ASHLEY COBURN EXEC MGR - EMPOLYEE DEV & HR 146793 0 11228 0 12339 0 16495 0 24747 0 211602 0 0 0 ZACHARY TAYLOR EXEC MGR - ENGINEERING 148455 0 1225 0 12495 0 15634 0 24308 0 202117 0 0 0 ROBERT RUSSELL EXEC ENGINEER - COMMUNICATION TECH 152271 0 1250 0 13141 0 10664 0 7229 0 184555 0 0 0 STEVE BYONE CFO (JAN-MAY) 128621 0 350 0 8150 0 13450 0 9838 0 160409 0 0 0 LEWIS BORGFELD FAMILY RELATIONSHIP 50757 LEWIS BORGFELD RECEIVED COMPENSATION AS A BOARD MEMBER OF THE COOPERATIVE. HE AND SEAN ALVEREZ, OFFICER OF THE COOPERATIVE, ARE FAMILY MEMBERS PER THE 990 DEFINITION OF FAMILY MEMBERS. 0 SEAN ALVEREZ FAMILY RELATIONSHIP 351126 SEAN ALVEREZ RECEIVED COMPENSATION AS AN OFFICER OF THE COOPERATIVE. HE AND LEWIS BORGFELD, BOARD CHAIRMAN, ARE FAMILY MEMBERS PER THE 990 DEFINITION OF FAMILY MEMBERS. 0 FORM 990, PART I, LINE 19: REVENUE LESS EXPENSES AS REPORTED ON PAGE 1, PART I, LINE 19 DIFFERS FROM THE TOTAL NET MARGINS REPORTED ON THE COOPERATIVE'S AUDITED FINANCIAL STATEMENTS DUE TO BOOK TO TAX ADJUSTMENTS REQUIRED TO CONFORM TO THE FORM 990 INSTRUCTIONS. THE EQUITY METHOD INCOME IS RECORDED ON THE COOPERATIVE'S BOOKS AND INCLUDED IN TOTAL NET MARGINS. U.S. GAAP REQUIRES THE COOPERATIVE TO RECORD ON ITS BOOKS THE EQUITY METHOD INCOME FROM ITS WHOLLY OWNED SUBSIDIARY. EQUITY METHOD INCOME IS NOT INCOME FOR IRS FORM 990 PURPOSES AND AS SUCH HAS BEEN REPORTED AS AN OTHER CHANGE IN NET ASSETS. FORM 990, PART VI, SECTION A, LINE 1 THE COOPERATIVE HAS 11 BOARD MEMBERS; ALL 11 ARE ALLOWED TO VOTE; HOWEVER, THE BOARD CHAIRMAN VOTES ONLY IN THE CASE OF A TIE. PER IRS FORM 990 INSTRUCTIONS, THE BOARD CHAIRMAN IS NOT AN INDEPENDENT DIRECTOR DUE TO A FAMILY RELATIONSHIP WITH AN EMPLOYEE OF THE COOPERATIVE. FORM 990, PART VI, SECTION A, LINE 2 A FAMILY RELATIONSHIP EXISTS BETWEEN LEWIS BORGFELD, CHAIRMAN OF THE BOARD, AND SEAN ALVAREZ, OFFICER. 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 BY DISTRICT. 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 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 12 THE COOPERATIVE DOES NOT HAVE A FORMAL CONFLICT OF INTEREST POLICY, HOWEVER, LIMITATIONS ON THE BOARD OF DIRECTORS ARE DEFINED IN THE COOPERATIVE'S BYLAWS. THE ORGANIZATION REGULARLY AND CONSISTENTLY MONITORS AND ENFORCES COMPLIANCE WITH SUCH POLICIES. A QUESTIONNAIRE WAS ANSWERED BY ALL BOARD MEMBERS. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF DIRECTORS USE THE EXPERTISE OF AN INDEPENDENT COMPENSATION CONSULTANT, A COMPENSATION SURVEY AND COMPARE COMPENSATION REPORTED ON OTHER COOPERATIVE'S IRS FORMS 990 WHEN DETERMINING THE COMPENSATION OF THE CEO. THE SURVEY SHOWS COMPARATIVE SALARIES FOR GENERAL MANAGERS/CEOS 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'S BYLAWS, ANNUAL REPORT AND FINANCIAL STATEMENTS ARE AVAILABLE ON ITS WEBSITE AT WWW.GVEC.ORG. 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. EMPLOYER CONTRIBUTIONS TO THE PLAN ARE AVAILABLE TO PARTICIPATING EMPLOYEES, INCLUDING OFFICERS, KEY EMPLOYEES AND HIGHLY COMPENSATED EMPLOYEES, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE COOPERATIVE ALSO PROVIDES HEALTH AND LIFE INSURANCE TO ALL EMPLOYEES THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICERS, KEY AND HIGHLY COMPENSATED EMPLOYEES ARE COMPRISED OF THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN AND THE INSURANCE PREMIUMS PAID FOR THEIR BENEFIT. 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. 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. FORM 990, PART IX: THE ACCOUNTING RECORDS OF THE COOPERATIVE ARE MAINTAINED IN ACCORDANCE WITH THE RUS UNIFORM SYSTEM OF ACCOUNTS (USOA) AS PRESCRIBED BY THE FEDERAL ENERGY REGULATORY COMMISSION FOR CLASS A AND B ELECTRIC UTILITIES. 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 ITS 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 $17,625,065 LESS: DIRECTOR FEES REPORTED ON FORMS 1099-MISC (427,502) LESS: EMPLOYEE OFFICER BENEFITS INCLUDED IN LINE 5 (165,980) LESS: KEY EMPLOYEE BENEFITS INCLUDED IN LINE 5 (87,280) PLUS: SALARIES & WAGES CAPITALIZED DIRECTLY TO PLANT 6,672,188 PLUS: SALARIES & WAGES CAPITALIZED/EXPENSED INDIRECTLY THROUGH CLEARING & OTHER ACCOUNTS 970,236 TOTAL WAGES ACCRUED AND/OR PAID $24,586,727 FORM 990, PART IX, LINE 24: ADMINISTRATIVE AND GENERAL EXPENSE IS COMPRISED OF THE FOLLOWING: ADMINISTRATIVE & GENERAL $ 2,209,486 OFFICE SUPPLIES 1,036,905 OUTSIDE SERVICES EMPLOYED 913,173 INJURIES & DAMAGES 1,232,693 PENSIONS & BENEFITS 3,080,758 REGULATORY COMMISSION 599,164 ADVERTISING 962,271 MISCELLANEOUS GENERAL 576,491 DISTRICT & ANNUAL MEETINGS 212,954 DUES TO ASSOCIATED ORGANIZATIONS 173,629 DIRECTORS 454,923 UTILITIES 882,914 MAINTENANCE OF GENERAL PLANT 1,583,431 TOTAL ADMIN & GENERAL EXP PER FINANCIAL STATEMENTS $13,918,792 LESS: RECLASS OF DIRECTOR FEES TO PART IX, LINE 5 (427,502) LESS: RECLASS OF LABOR TO PART IX, LINES 5 & 7 (3,641,329) LESS: RECLASS OF BENEFITS TO PART IX, LINES 8-10 (1,358,235) TOTAL ADMIN & GENERAL EXPENSE PER FORM 990, PART IX $ 8,491,726 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 2019 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 ALLOCATED OR TO BE ALLOCATED 16,581,513. PATRONAGE CAPITAL RETIRED - TOTAL -437,749. PATRONAGE CAPITAL RETIRED - DISCOUNT 327,660. OCI - PENSION & BENEFITS 6,848,240. EQUITY METHOD INCOME FROM SUBSIDIARIES 380,187. NET CHANGE IN MEMBERSHIPS 23,917. GVECNET LLC PO BOX 525 GONZALES TX 78629 INACTIVE TX 0 0 GUADALUPE VALLEY ELECTRIC COOPERATIVE INC GVEC CHARITABLE FOUNDATION 825 E SARAH DEWITT DR GONZALES TX 78629 453420216 TO PROVIDE FUNDING FOR LOCAL NON-PROFITS AND NEEDY INDIVIDUALS TX 501(C)(3) 7 GUADALUPE VALLEY ELECTRIC COOPERATIVE INC 1 GVEC HOME SERVICES INC PO BOX B GONZALES TX 78629 742766073 HVAC, SOLAR & ELECTRICIAN SALES AND SERVICES TX GUADALUPE VALLEY ELECTRIC COOPERATIVE INC C 2921994 4926064 1.00000 1 GUADALUPE VALLEY DEVELOPMENT CORPORATION PO BOX 1546 GONZALES TX 78629 742490616 INVESTMENT COMPANY TX GUADALUPE VALLEY ELECTRIC COOPERATIVE INC C 9131 916466 1.00000 1 1 0 0 1 0 0 0 0 0 0 0 0 0 1 1 0 1 0 1 GVEC CHARITABLE FOUNDATION N N/A - LESS THAN $50,000 GVEC CHARITABLE FOUNDATION O N/A - LESS THAN $50,000 GVEC HOME SERVICES INC N 3182152 INVOICES & OTHER RECORDS GVEC HOME SERVICES INC Q 3049131 INVOICES & OTHER RECORDS GUADALUPE VALLEY DEVELOPMENT CORPORATION A 53935 INVOICES & OTHER RECORDS GUADALUPE VALLEY DEVELOPMENT CORPORATION D 55000 LOAN AGREEMENT GUADALUPE VALLEY DEVELOPMENT CORPORATION N N/A - LESS THAN $50,000 GUADALUPE VALLEY DEVELOPMENT CORPORATION Q N/A - LESS THAN $50,000 GUADALUPE VALLEY DEVELOPMENT CORPORATION S 395000 PRINCIPAL PAYMENT