2011-05-16T14:19:42-05:00 2010-12-31 BOLINGER SEGARS GILBERT AND MOSS LLP 8215 NASHVILLE AVENUE LUBBOCK TX 79423 990 2010-01-01 730375825 NORTHWESTERN ELECTRIC COOPERATIVE INC NORT 5802567425 PO BOX 2707 WOODWARD OK 73802 TYSON LITTAU 5802567425 2011-05-16 1 WILLIAM M MILLER 8067473806 2011-05-16 2010 2016-02-24 21:20:13Z TYSON LITTAU PO BOX 2707 WOODWARD OK 73802 28447638 0 X WWW.NWECOK.COOP X 1940 OK TO PROVIDE ELECTRIC POWER TO RURAL AREAS AT COST ON A COOPERATIVE BASIS. 9 8 60 0 78150 -2569 0 0 25459695 28096566 130407 133704 14575 105051 25604677 28335321 0 0 0 0 3225742 3622331 0 0 0 21100275 22479749 24326017 26102080 1278660 2233241 56841762 60676419 35849256 38238359 20992506 22438060 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 - 11,287 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 1 0 1 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 0 0 0 0 0 0 0 0 0 1 32 0 60 1 1 1 0 0 0 0 27485737 356285 0 X 9 8 0 0 1 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 OK X TYSON LITTAU 5802567425 2925 WILLIAMS AVENUE WOODWARD OK 73801 KENNETH KNOWLES 5.40 X X 15532 0 0 RAY SMITH 1.60 X X 14077 0 0 JOHN BRUCE JR 8.30 X X 16775 0 0 GILBERT PERKINS 5.30 X 15782 0 0 LEE R HUCKABY 5.20 X 4080 0 0 CHARLES HARPER 4.20 X 4442 0 0 DUANE HENDERSON 3.40 X 14375 0 0 CLAIR CRAIGHEAD 5.20 X 15007 0 0 DEAN STONE 2.80 X 9445 0 0 WAYNE HALL 5.00 X 3909 0 0 TYSON LITTAU 40.00 X 102592 0 41042 216016 0 41042 1 0 0 0 RIGGS TREE SERVICE PO BOX 453225 GROVE OK 74345 TREE SERVICE 502825 CHAPEL MAPPING 315 SECOND AVENUE WARREN PA 16365 GPS MAPPING PROJECT 237644 HAMLIN ELECTRICAL CONST LLC 1406 NEPTUNE DRIVE CLINTON OK 73601 CONSTRUCTION 103194 3 ELECTRIC ENERGY 221000 26895503 26895503 PATRONAGE DIVIDENDS 221000 1073250 1073250 CONNECT AND OTHER FEES 221000 68245 68245 DISTRIBUTION LINE LEAS 221000 59568 59568 28096566 122794 122794 3210 3210 8694 8694 8694 3426 5268 82692 71782 10910 10910 10910 45323 40535 4788 4788 BILLING REVENUE 221000 78150 78150 MISCELLANEOUS 561499 10209 10209 88359 28335321 28114989 78150 142182 257058 2013064 467552 730322 154335 1497115 1818364 PURCHASED POWER 16166734 DISTRIBUTION EXPENSE 1273994 ADMIN AND GENERAL 634691 TAXES 535945 CUSTOMER ACCOUNTS 475840 77066 26102080 1701384 3104905 2935039 3051218 678 528 523454 417763 563507 580850 620364 701379 66410114 21988730 43140862 44421384 7348164 8390082 8310 8310 56841762 60676419 1623202 1742056 33543571 35769248 682483 727055 35849256 38238359 X 72980 73190 1592564 1958845 19326962 20406025 20992506 22438060 56841762 60676419 X 2233241 -787687 X X 0 1 0 X 0 241697 241697 2213174 709562 1503612 63790886 21279168 42511718 164357 164357 44421384 PATRONAGE CAPITAL - WESTERN FARMERS ELECTRIC COOP 7407784 C PATRONAGE CAPITAL - NRUCFC 35757 C PATRONAGE CAPITAL - ARKANSAS ELECTRIC COOPERATIVE 54553 C PATRONAGE CAPITAL - SEDC 52145 C PATRONAGE CAPITAL - COBANK 127731 C MEMBERSHIPS 20442 C CAPITAL TERM CERTIFICANTS - CFC 691670 C 8390082 CONSUMER DEPOSITS 123025 ACCRUED EMPLOYEE COMPENSATED ABSENCES 287933 OTHER CURRENT ACCRUED LIABILITIES 3877 PATRONAGE CAPITAL PAYABLE 197338 ACCRUED INTEREST PAYABLE 114882 727055 28335321 26102080 2233241 -787687 -787687 1445554 28258255 0 28258255 77066 77066 28335321 26025014 0 26025014 77066 77066 26102080 Description of Uncertain Tax Positions Under FIN 48: Part X: ON JANUARY 1, 2009, 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 THEIR 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 8 - Other Adjustments: PATRONAGE CAPITAL RETIRED -594,626. OTHER COMPREHENSIVE INCOME PROVISION FOR PENSION AND BENEFITS -291,363. UNCLAIMED PATRONAGE CAPITAL RETIREMENT CHECKS 98,092. NET INCREASE IN MEMBERSHIPS 210. Part XII, Line 4b - Other Adjustments: RECLASSIFIED AIR EVAC EXPENSES 77,066. Part XIII, Line 4b - Other Adjustments: RECLASSIFIED AIR EVAC EXPENSES 77,066. 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. X 0 0 0 TYSON LITTAU LOAN TO PURCHASE COMPUTER; LOAN MADE PURSUANT POLICY COVERING ALL EMPLOYEES X 1621 528 0 1 1 528 WESTERN FARMERS ELECTRIC COOPERATIVE A BOARD MEMBER OF THE COOPERATIVE SERVES ON THE BOARD OF WESTERN FARMERS 16166734 COOPERATIVE PURCHASES ELECTRICITY FROM WESTERN FARMERS. 0 Form 990, Part VI, Section A, line 4 THE MEMBERS AMENDED ARTICLE IV OF THE COOPERATIVE'S BYLAWS TO ADD A NEW ELIGIBILITY REQUIREMENT FOR MEMBERS OF THE BOARD OF TRUSTEES. THE NEW ELIGIBILITY REQUIREMENT OF ARITICLE IV, SECTION 2.16 DISQUALIFIES A PERSON FROM BECOMING OR REMAINING A TRUSTEE IF THAT PERSON "HAS BEEN EMPLOYED BY THE COOPERATIVE WITHIN FIVE YEARS OF HIS/HER EMPLOYMENT TERMINATION DATE AND THE SCHEDULED DISTRICT MEETING FOR WHICH MEMBER DESIRES TO RUN." 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; AND 4.AMENDMENTS TO THE COOPERATIVE'S BYLAWS. Form 990, Part VI, Section B, line 11 MANAGEMENT E-MAILED A COPY OF THE FORM 990 TO THE BOARD PRIOR TO FILING. MANAGEMENT PRESENTS THE FORM 990 TO THE BOARD FOR DISCUSSION AND APPROVAL AT THE MEETING SUBSEQUENT TO FILING. Form 990, Part VI, Section B, line 12c THE BOARD OF DIRECTORS AND OFFICERS ARE REQUIRED TO REVIEW AND BE FAMILIAR WITH THE POLICIES OUTLINED IN THE COOPERATIVE'S CONFLICT OF INTEREST POLICY. THE BOARD OF 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. THE CONFLICT OF INTEREST POLICY IS REVIEWED AND REDISTRIBUTED TO EACH EMPLOYEE, OFFICER AND DIRECTOR AT LEAST ONCE EVERY THREE YEARS. 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 GENERAL MANAGERS FROM SIMILARLY SITUATED COOPERATIVES LOCATED IN OKLAHOMA AND THE NATION. THE CEO AND AN INDEPENDENT COMPENSATION COMMITTEE 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 SIMILARLY SITUATED COOPERATIVES THROUGHOUT OKLAHOMA AND THE NATION. Form 990, Part VI, Section C, line 19 THE COOPERATIVE WILL PROVIDE A COMPLETE COPY OF ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND AUDITED FINANCIAL STATEMENTS TO ANY MEMBER WHO REQUESTS A COPY OF ANY SUCH DOCUMENT. ANNUALLY THE COOPERATIVE PROVIDES THE YEAR END BALANCE SHEET AND INCOME STATEMENT TO THE MEMBERS OF THE COOPERATIVE WITH THE ANNUAL REPORT. THE OPERATING REPORT IS ALSO PROVIDED TO THE MEMBERS VIA MONTHLY NEWSLETTER. Changes in Net Assets or Fund Balances: Form 990, Part XI, line 5: PATRONAGE CAPITAL RETIRED -594,626. OTHER COMPREHENSIVE INCOME PROVISION FOR PENSION AND BENEFITS -291,363. UNCLAIMED PATRONAGE CAPITAL RETIREMENT CHECKS 98,092. NET INCREASE IN MEMBERSHIPS 210. Total to Form 990, Part XI, Line 5: -787,687. AUDIT COMMITTEE Form 990, Part XI, Line 2C THE BOARD AS A WHOLE IS RESPONSIBLE FOR OVERSEEING THE FINANCIAL STATEMENT AUDIT AND SELECTING THE INDEPENDENT FINANCIAL STATEMENT AUDITOR. INDEPENDENT DIRECTORS Form 990, Part VI, Line 1b RAY SMITH PER IRS FORM 990 INSTRUCTIONS IS NOT AN INDEPENDENT DIRECTOR BECAUSE HE IS ON THE BOARD OF WESTERN FARMERS COOPERATIVE, INC. THE COOPERATIVE PURCHASES ITS ELECTRIC ENERGY FROM WESTERN FARMERS AND IS ALSO A MEMBER OF WESTERN FARMERS. AS SUCH, MR. SMITH IS THE COOPERATIVE'S REPRESENTATIVE ON WESTERN FARMERS BOARD. MR. SMITH HAS NO OWNERSHIP INTEREST IN WESTERN FARMERS AND RECEIVES NO DIRECT OR INDIRECT BENEFIT FROM THE COOPERATIVE DOING BUSINESS WITH WESTERN FARMERS. 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 CLASS A AND B ELECTRIC UTILITIES MODIFIED FOR ELECTRIC BORROWERS OF THE RURAL UTILITIES SERVICE(RUS). THE UNIFORM SYSTEM OF ACCOUNTING 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. PATRONAGE DIVIDENDS 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 ORGANIZATION TO ITS MEMBERS. 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 $ 2,270,122 LESS DIRECTORS FEES REPORTED ON 1099-MISC (113,423) PLUS SALARIES AND WAGES ALLOCATED TO ASSET ACCOUNTS 846,207 RECONCILIATION TO W-3 $ 3,002,906 CEO RESPONSIBILITIES Form 990, Part VII, Section A THE BOARD OF DIRECTORS CONSIDERS THE CEO TO BE BOTH THE TOP MANAGEMENT OFFICIAL AND THE TOP FINANCIAL OFFICIAL. THEREFORE, ONLY THE CEO IS LISTED AS AN EMPLOYEE OFFICER. 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 OFFICE AND SUPPLIES $ 169,437 OUTSIDE SERVICES EMPLOYED 76,801 EMPLOYEE EXPENSE 43,375 TRUSTEE EXPENSE 59,624 INJURIES & DAMAGES 7,361 PROPERTY & GENERAL LIABILITY INSURANCE 61,729 DUES TO ASSOCIATED ORGANIZATIONS 91,154 COMMUNITY SUPPORT 15,080 ANNUAL & DISTRICT MEETING EXPENSE 64,033 MISCELLANEOUS GENERAL EXPENSE 31,724 MAINTENANCE OF GENERAL PLANT 14,373 TOTAL ADMINISTRATIVE AND GENERAL EXPENSE PER 990 $ 634,691 TO PROVIDE DETAIL REGARDING THE OFFICER BENEFITS 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. 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, MEETING THE ELIGIBILITY REQUIREMENTS OF SUCH PLANS. THE ORGANIZATION ALSO PROVIDES HEALTH AND LIFE INSURANCE TO ALL EMPLOYEES, INCLUDING OFFICERS, THROUGH A QUALIFIED PLAN. THE AMOUNTS REPORTED ON PART VII, COLUMN (F) FOR THE OFFICER IS COMPRISED OF THE ACTUARIAL INCREASE IN THE DEFINED BENEFIT PLAN FOR THE OFFICER, THE TOTAL AMOUNT CONTRIBUTED TO THE 401(K) PENSION PLAN AND THE INSURANCE PREMIUMS PAID FOR THE BENEFIT OF THE OFFICER. IN ADDITION TO THE ABOVE PENSION PLANS, THE ORGANIZATION ALSO PROVIDES POST-RETIREMENT HEALTH INSURANCE BENEFITS THROUGH AN UNFUNDED WELFARE BENEFIT PLAN. THE VALUE OF THESE BENEFITS HAS NOT BEEN ESTIMATED.