Transcription

1 Iowa Lakes Electric Cooperative 702 South 1st St. Estherville, IA The Mission of Iowa Lakes Electric Cooperative is to be the leading utility provider of energy and technology services for the 21st century. Our commitment is to offer these services with vision, integrity and pride.

2 Board of Directors Directors and Officers General Manager's Comments Impacting the Communities We Live In President's Message Financial Statements Balance Sheets Statements of Operations Statements of Cash Flows The Power of Human Connections Iowa Lakes Electric Cooperative has joined more than 600 distribution and generation and transmission cooperatives across the nation as a Touchstone Energy partner -- the BRAND initiated to distinguish electric cooperatives from other investorowned or municipal utilities. Few companies can boast a way of doing business in which the customers have a voice in the operation, whose board members and employees are rooted in the local community, and in which the quality of service, not the bottom line, is the driving force of their philosophy. Touchstone Energy stands for Integrity, accountability, innovation and commitment to community. Touchstone Energy is widely recognized as a trustworthy, dependable neighbor who not only supplies energy at a competitive price, but also improves the quality of life in the local community! Cherokee Dickinson Clay Buena Vista Emmet Palo Alto Pocahontas Kossuth Local, Personal Service Our service centers located in Estherville, Swea City, Emmetsburg, Pocahontas, Storm Lake, Spencer and Cherokee are your local link for prompt service and swift outage response. Iowa Lakes owns 4,652 miles of line and serves over 11,800 meters connected to farms, homes and businesses in Northwest Iowa.

3 8 Statements of Cash Flows For the years ended December Cash Flows from Operating Activities Net Margins...$ 2,955,898 $ 1,325,066 Adjustments to Reconcile Net Margins to Net Cash Provided by Operating Activities Depreciation...$ 2,283,164 $ 2,223,393 Amortization of RUS Buyout Discount... (94,069) (99,732) G & T and Other Capital Credits... (570,769) (134,603) (Increase) Decrease in Deferred Debits... (4,892) (9,077) Increase (Decrease) in Deferred Credits... (186,186) 57,989 Changes in Assets and Liabilities (Increase) Decrease in: Accounts Receivable... (1,293,014) 19,522 Materials and Supplies Inventory... (118,233) 112,037 Other Accrued Assets... (130,881) 81,861 Increase (Decrease) in: Accounts Payable ,423 (363,111) Other Current and Accrued Liabilities ,002 (78,996) Net Cash Provided by Operating Activities...$ 3,762,443 $ 3,134,349 Cash Flows from Investing Activities Construction and Acquisition of Plant...$ (3,246,346) $ (3,384,682) (Increase) Decrease in Other Property and Investments... (125,287) 86,490 Net Cash (Used) by Investing Activities...$ (3,371,633) $ (3,298,192) Cash Flows from Financing Activities Principal Payments on Long-Term Debt...$ (1,806,015) $ (1,583,123) Proceeds from Issuance of Long-Term Debt... 2,224,155 1,558,273 Increase (Decrease) in Notes Payable... (199,425) 139,466 Retirement of Capital Credits, Net of Donated Capital... (555,161) (379,818) Increase (Decrease) in Consumer Deposits ,405 Net Cash Provided (Used) by Financing Activities...$ (336,038) $ (250,797) Net Increase (Decrease) in Cash and Cash Equivalents...$ 54,772 $ (414,640) Cash and Cash Equivalents Beginning...$ 1,128,339 $ 1,542,979 Cash and Cash Equivalents Ending...$ 1,183,111 $ 1,128,339 Supplementary Disclosures of Cash Flow Information Cash Payments for Interest...$ 1,198,007 $ 1,204,480 Non-Cash Transactions: Change in Asset Valuation and Equity for Unrealized Gain/(Loss) on Available for Sale Investments...$ (5,694) $ 20,861 Sale of DBS Exclusive Distribution Rights and Subscribers: Contract Receivable DIRECTV...$ 5,432,879 $ Deferred Revenue Sale of DBS Franchise...$ (5,432,879) $ B OARD OF D IRECTORS L. KIRBY RANGE ALAN MADDEN DENNIS KNONER JAMES HULTGREN MILFORD RINGSTED SWEA CITY ALTA PRESIDENT VICE PRESIDENT SECRETARY TREASURER JERRY BECK HANS CLAUSEN GERALD FUERSTENAU PETER HANSEN SPENCER HAVELOCK MALLARD RUTHVEN RICHARD HANSON S. VANCE HJELM RODNEY MEYER ESTHERVILLE LAKE PARK MALLARD TOM MORTENSON STEVEN WILLIAMS VERNON WINTERHOF CHEROKEE STORM LAKE AURELIA DISTRICT I JERRY BECK PETER HANSEN S. VANCE HJELM L. KIRBY RANGE DISTRICT II JAMES HULTGREN TOM MORTENSON STEVEN WILLIAMS VERNON WINTERHOF DISTRICT III HANS CLAUSEN GERALD FUERSTENAU RODNEY MEYER DISTRICT IV RICHARD HANSON DENNIS KNONER ALAN MADDEN O FFICERS: President L. Kirby Range Vice President Alan Madden Secretary Dennis Knoner Treasurer James Hultgren Executive Vice President Terry L. Bruns Corn Belt Power Cooperative Representative: L. Kirby Range Northwest Iowa Power Cooperative Representative: Vernon Winterhof 1

4 Statements of operations Terry L. Bruns General Manager Executive Vice President G ENERAL M ANAGER S C OMMENTS Impacting the Communities We Live In Your Cooperative not only delivers safe, affordable, reliable and environmentally responsible electricity but also is committed to the Iowa counties and communities where you live and we serve. The Iowa Lakes Electric Cooperative employee team worked 145,500 hours and drove 527,910 miles to better serve you, the customer-owner. Not only is the employee team and Board of Directors dedicated to providing you with the best service possible they also care about the communities that you work and live in. Commitment to Community is a guiding principle for your Cooperative, the employee team and your Board of Directors. In 2004, the employee team and your Board of Directors gave back to their local communities by donating 6,089 hours of volunteer time. During the last year your Cooperative entered into a unique partnership with KICD/KLLT radio stations in Spencer, Iowa, to sponsor an enhanced and up to date new Doppler Radar weather system which will improve Northwest Iowa s public awareness of severe weather situations. Your Cooperative is dedicated to providing not only customer-owners but local citizens with technological innovations that enhance the communities we live in. Starting later this year in 2005, your Cooperative is beginning a three-year deployment of a power line carrier based automated meter reading system or AMR. This multiple year project is budgeted to cost $2.8 million and will provide significant benefits, convenience and cost savings for the benefit of every customerowner of the Cooperative. There will be no rate increase to the Cooperative s customer-owners for the implementation of this exciting new technology. Your Cooperative continually participates in research and implementation For the years ended December Operating Revenues...$ 25,342,807 $22,446,090 Operating Expenses Cost of Power...$ 14,916,366 $13,456,548 Distribution Expense Operations... 1,699,151 1,483,623 Distribution Expense Maintenance... 1,030, ,084 Consumer Account Expense , ,817 Consumer Sales Expense , ,522 Administrative and General Expense... 1,321,291 1,246,286 Depreciation and Amortization Expense... 2,283,164 2,223,393 Taxes... 25,382 31,555 Other Deductions (Income)... 55,528 37,335 Total Operating Expenses...$ 22,772,765 $20,681,163 Operating Margins Before Fixed Charges...$ 2,570,042 $ 1,764,927 Interest on Long-Term Debt...$ 1,068,055 $ 1,077,370 Operating Margins After Fixed Charges...$ 1,501,987 $ 687,557 Generation and Transmission and Other Capital Credits... $ 570,769 $ 134,603 Net Operating Margins...$ 2,072,756 $ 822,160 Non-Operating Margins (Loss) Interest Income...$ 330,919 $ 128,332 Net Revenue from Satellite Services , ,117 Net Revenue (Loss) from Merchandising... (30,552) (31,360) Other Non-Operating Margins (Loss) ,698 60,817 Total Non-Operating Margins...$ 883,142 $ 502,906 Net Margins...$ 2,955,898 $ 1,325,066 In 2004, $466,832 was refunded to the general membership for patronage credits earned in previous years. Margins for 2004 were allocated in accordance with the Iowa Code and the Cooperative s bylaws by the Board of Directors on March 24, In the interest of space, the consolidated financial statements of Iowa Lakes Electric Cooperative and its subsidiary do not include Notes to Consolidated Financial Statements which are considered an integral part of accepted financial statement presentation. A complete copy of the Cooperative s audited financial statements are available upon request. 2 7

5 balance sheets December 31 Assets Utility Plant (At Cost) Electric Plant in Service...$ 68,056,143 $ 66,509,647 Construction Work in Progress... 1,084,901 21,406 Total...$ 69,141,044 $ 66,531,053 Less Accumulated Provision for Depreciation... (23,087,785) (21,440,976) Net Utility Plant...$ 46,053,259 $ 45,090,077 Other Property and Investments Investments in Associated Organizations...$ 5,072,791 $ 4,506,566 Other Investments... 8,221,940 2,656,904 Non-Utility Property-Net of Accumulated Depreciation , ,182 Total Other Property and Investments...$ 13,639,894 $ 7,516,652 Current Assets Cash and Cash Equivalents...$ 1,183,111 $ 1,128,339 Accounts Receivable Less Provision for Uncollectible Accounts... 4,009,421 2,716,407 Materials and Supplies Inventory at Average Cost , ,369 Other Current and Accrued Assets , ,552 Total Current Assets...$ 6,227,567 $ 4,630,667 Deferred Debits...$ 241,301 $ 252,507 Total Assets...$ 66,162,021 $ 57,489,903 Equities and Liabilities Equities Patronage Capital...$ 6,834,556 $ 5,391,713 Other Equities... 24,788,340 23,829,388 Total Equities...$ 31,622,896 $ 29,221,101 Long-Term Debt (Less Current Maturities) NRUCFC Mortgage Notes...$ 22,895,599 $ 22,048,944 Other Notes Payable... 47,679 48,091 Total Long-Term Debt...$ 22,943,278 $ 22,097,035 Current Liabilities Current Maturities of Long-Term Debt...$ 1,236,900 $ 1,681,100 Notes Payable... 38, ,002 Accounts Payable... 2,641,440 1,935,769 Consumer Deposits , ,025 Other Current and Accrued Liabilities... 1,226,645 1,017,643 Total Current Liabilities...$ 5,270,995 $ 4,999,539 Deferred Credits...$ 6,324,852 $ 1,172,228 Total Equities and Liabilities...$ 66,162,021 $ 57,489,903 focused on community of innovations that provide beneficial customer-owner results. Your Cooperative as well as 34 other electric cooperatives in Iowa wanted to better understand the impact that Iowa s cooperatives bring to the economic vitality of Iowa. In 2004, a study was conducted by the Iowa Association of Electric Cooperatives and a nationally recognized group of economists from the Midwest Harvey Siegelman and Dan Otto. They reviewed the entire spectrum of cooperative activities for the 2003 calendar year everything from how Iowa s cooperatives improve the quality of life for customer-owners to how much we spend at the local gas stations for diesel fuel. In 2003, Iowa Lakes, your local Cooperative: Generated over $29 million in economic output Contributed $671,400 to the development of your local communities Invested seed money that created $773,000 of local community and business projects stimulating more than $1.5 million of additional local spending Managed a $25.7 million business that affected the jobs of 211 local residents generating $7.1 million in local income and drove $29 million of local spending Invested an average of $663,100 in new electric generation and distribution capacity to meet your growing electric needs Returned more than $365,400 in patronage dividends to you, the customer-owner These economists also calculated the added value of all of the goods, services and labor in every cooperative s service area that could be attributed to the cooperative s service area. The total came to more than $900 million. To put this in perspective, consider that this total economic impact of Iowa s electric cooperatives is almost twice the dollar amount envisioned for the Iowa Values Fund. Your Cooperative is powerfully dedicated to serve you, the customer owner, yesterday, today and tomorrow! 6 Terry L. Bruns, General Manager Executive Vice President 3

6 focused on innovation L. Kirby Range Board President P RESIDENT S MESSAGE Dedicated to Innovate Technologies A cooperative is a business. Cooperatives range in size from small store-fronts to large Fortune 500 companies. In many ways, they re like any other business; but in several important ways they re unique and different. There are 941 rural electric cooperatives that own and maintain nearly half of the electric distribution lines in the United States of America and cover 75 percent of the land mass as well as providing electricity to 36 million people. Iowa Lakes Electric Cooperative, serving over 11,800 customer-owners is proud to be one of these electric cooperatives. As I stated, cooperatives are unique and different, and so is Iowa Lakes. Cooperatives exist solely for the customer-owners and the communities they live in. Cooperatives empower people to improve their quality of life and enhance their economic opportunities through a self-help process. Iowa Lakes Electric Cooperative is proud to be a Touchstone Energy Cooperative. Touchstone Energy Cooperatives are dedicated to serving the commercial, industrial, agricultural and residential customer-owners with integrity, accountability, innovation and commitment to community. Iowa Lakes Electric Cooperative excels at these four (4) core values. In fact, Iowa Lakes impacts the lives of you, the customer-owners daily by not only providing reliable, cost-efficient service but by also being a responsible partner of the community where we live and serve. Many innovative efforts have been made by your Cooperative in Your Cooperative provides you, the customerowner, with the highest quality technological equipment and services available. For example, during the past year your Cooperative developed the plans for a $2.8 million Automated Meter Reading (AMR) project to be launched in 2005 as well as partnered with the KICD/KLLT radio stations to provide our local communities with a Doppler Radar weather system. Your Cooperative is not motivated by profit margins, but rather by meeting the needs of you, the customer-owners. The planning efforts taking place in 2004 by your Cooperative will allow for the three-year deployment of the Automated Meter Reading (AMR) system beginning in This three-year project will bring many benefits to you, the customer-owner. Your Cooperative is dedicated to progressive research and implements innovative technologies that provide you and your Cooperative with a wide variety of benefits. The AMR project truly captures Iowa Lake s dedication to customer service. Although we, as customer-owners, already receive excellent customer service from a highly trained employee-team, your Cooperative goes above and beyond. New meters will not only automatically read your electric usage, but will send the information back to our office and compute your monthly bill. This amazing technology will greatly improve your level of customer service as well as provide future cost saving benefits to both you and your Cooperative. The partnership with KICD/KLLT radio stations not only brings a technologically advanced weather system to, you, the customer-owners but also to the eight-county service territory we all call home. Your Cooperative s commitment to community is evident through an investment in the Doppler Radar weather system which is an excellent tool for tracking severe thunderstorms and is also a source of an early warning for developing thunderstorms, tornadoes, straight line winds and hail. This investment will help provide advanced protection and warning to you, the customer-owner, your community and the Iowa Lakes employee team. Another exciting service available through your Cooperative this summer is the highly anticipated high-speed wireless Internet service, WildBlue. This service will impact the way in which you will be able to access and use the Internet. The speed and reliability of this service will provide you with yet another exciting product offered through your Cooperative. Iowa Lakes is dedicated in keeping you equipped with the very best in technological innovations available on the market. Your Cooperative consistently finds ways to impact the lives of you and I, the owners. You can trust that your Cooperative is acting in a manner to better our lives whether it is through innovation or commitment to community. You can be assured that the new ideas and projects that your Cooperative is involved with will improve the quality of life and economic vitality of the communities where we live and work. At Iowa Lakes Electric Cooperative the power truly generates from you, the customerowner. Accountability, integrity, innovation and commitment to community are the unique core values that guide the way in which your Cooperative is run. 4 L. Kirby Range, Board President 5