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It's a challenging time to be in the energy business.
The availability of abundant and affordable energy
we have enjoyed in the past is threatened in todays
global economy. We have entered a period of skyrock-
eting crude oil prices and increasing electric rates. Our
cooperative feels the impact from these increases just
as you do on your personal budget.
Electric utilities across the nation are dealing with
growing demand, rising fuel prices and increasing
environmental regulation. Concurrently, the world-
wide market is driving up the price for equipment and
materials used in all types of construction, including
the massive amounts of steel used in power plant
construction. All of these factors are coming together
at the same time to create what's being referred to as
the Perfect Storm.
Since the energy industry is so volatile, it's more
important than ever to have good communication
between the cooperative and our member-owners.
Change is typically easier to accept when you know
the reasons behind the decisions that are being made.
We are committed to continue open and honest com-
munication with you. We also are committed to the
communities we serve by improving your quality of
life and providing reliable electricity at the lowest
possible cost. Our involvements in the communities
where you live are highlighted throughout this year's
annual report.
These are challenging times. But Boone Electric
Cooperative has faced challenges before in its 72-year
history. We've always persevered. With input from
you, our informed members, and our steadfast
commitment to the cooperative's core values of
accountability, integrity, innovation and commitment
to community, we will continue to manage change
and move forward.
2007 In Review
Connected meters: 28,777
Residential: 27,890
Commercial: 887
677 meters added in 2007
Total miles of line: 2,947
Members per mile of line: 9.76
Full-time employees: 107
495,216,279 kwh delivered in 2007
Total assets in 2007: $104,835,778
Net investment in plant: $79,718,195
Todd Culley
CEO & General Manager
Joel Bullard
Board President
MESSAGE
to our
MEMBERS A
u d i t o r s
R
e p o r t
Consolidated Balance Sheets
ASSETS
2007
2006
UTILITY PLANT
Electric plant
$104,835,778
$100,430,502
Depreciation
25,117,583
23,248,816
Depreciated value
79,718,195
77,181,686
INVESTMENTS AND OTHER PROPERTY
16,341,281
16,164,062
CURRENT ASSETS
Cash and cash equivalents
4,262,898
5,980,697
Receivables 2,990,146
2,881,992
Materials
1,585,508
1,076,924
Prepayments
205,224
200,255
Total
9,043,776
10,139,868
DEFERRED DEBITS
171,634
225,460
TOTAL ASSETS
$105,274,886
$103,711,076
CAPITAL EQUITIES
Patronage capital
$46,252,234
$43,440,932
Other equities
2,760,341
3,214,325
Total
49,012,575
46,655,257
LONG-TERM LIABILITIES
48,990,056
50,203,869
CURRENT LIABILITIES
Current maturities of long-term debt
1,265,100
1,190,500
Accounts payable
1,452,246
1,225,751
Accrued expenses
2,290,623
2,006,209
Accrued taxes
242,357
222,464
Customer deposits
740,222
673,045
Total
5,990,548
5,317,969
DEFERRED CREDITS
1,281,707
1,533,981
COMMITMENTS
TOTAL LIABILITIES AND CAPITAL
$105,274,886
$103,711,076
I N D E P E N D E N T A U D I T O R S R E P O R T
To the Board of Directors of Boone Electric Cooperative:
We have audited the accompanying consolidated balance sheets of Boone Electric Cooperative and subsidiaries as of December
31, 2007 and 2006, and the related consolidated statements of revenue and patronage capital and cash flows for the years then ended.
These consolidated statements are the responsibility of Boone Electric Cooperatives management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Boone Electric Cooperative and subsidiaries as of December 31, 2007 and 2006, and the
results of operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United
States of America.
SCHMIDT & COMPANY, LLC
March 18, 2008 2007
2006
OPERATING REVENUE
Electric energy revenue & gross sales
$37,430,144
$35,616,455
Miscellaneous revenue
1,521,430
766,413
Total operating revenue
38,951,574
36,382,868
OPERATING REVENUE DEDUCTIONS
Cost of power & goods sold
19,370,742
17,674,729
Operating expenses - distribution
1,666,284
1,557,625
Maintenance of distribution plant
3,142,464
2,837,892
Accounting and collection expenses
1,595,132
1,602,022
Other customer expenses
608,027
569,056
Administrative and general
3,403,715
3,028,209
Depreciation
3,132,989
2,984,595
Total operating revenue deductions
32,919,353
30,254,128
Operating margin before fixed charges
6,032,221
6,128,740
Less: Interest on long-term debt
2,772,762
2,471,043
Operating margin before capital credits
3,259,459
3,657,697
G & T and other capital credits
1,676,905
1,267,392
Operating margin
4,936,364
4,925,089
Interest revenue
345,500
200,493
Other revenue
161,943
33,793
Non-operating margin
507,443
234,286
Extraordinary gain
0
0
Net margin before income taxes
5,443,807
5,159,375
Provision for income taxes
37,210
(56,728)
NET MARGIN
5,406,597
5,216,103
Patronage capital - beginning of year
46,655,257
44,239,591
Prior period adjustment
453
Subtotal
52,061,854 49,455,694
Retirement of capital credits (3,049,279)
(2,641,919)
Transfer (payable to Trust)
(158,518)
PATRONAGE CAPITAL - END OF YEAR
$49,012,575 $46,655,257
A
u d i t o r s
R
e p o r t
Statements of Revenue and Capital
H
o w
Y
o u r
E
l e c t r i c
B
i l l
W
a s
S
p e n t
Cost of Power 51%
Operating Margins 8.3%
Interest 7.5%
Administrative & General
Expenses 6.3%
Depreciation 8.2%
Consumer Account
Expense 5.8%
Operations &
Maintenance 10.9%
Taxes 2% o you know whats going on with energy today? If
not, we need to talk. As a member-owner of an elec-
tric cooperative, you need to know what is driving
up the price you will pay for the electricity you use.
Your electric cooperative is working hard to start a
national dialogue about energy and the future. That dia-
logue needs to take place between your cooperative and its
members, and between those members and the people elect-
ed to represent them in the state and federal governments.
Already electric rates are on the rise for a variety of reasons: The price for fuel to generate electricity coal and
natural gas is increasing. Environmental legislation requires adding emission
control equipment that is costing millions to construct
and operate. Increased demand for electricity from larger homes
and more members means low-cost power must be
supplemented with higher-cost peaking units to meet
demand. That increased demand means more power plants must
be built, and these plants will be extremely expensive. To move that power where its needed, more transmis-
sion lines must be built and existing ones must be
upgraded.
While these factors are pushing rates higher, another
issue looms on the horizon that has the potential to make
electricity unaffordable for most Americans.
Congress is now considering legislation that will limit
emissions of carbon dioxide in response to claims that this
gas is contributing to global warming. Since carbon dioxide
is released from both coal and natural gas fueled power
plants, it is easy to see that any limits on emissions will lead
to higher generation costs.
Boone Electric Cooperative believes Congress can solve
the climate change problem without breaking the economy.
To do this, however, will require major investment into new
technology. It will also take a balanced approach to provid-
ing electricity, using coal, natural gas, nuclear, hydro, wind
and other renewable resources. No single source of power
will meet the goals of ensuring an adequate supply of elec-
tricity at rates consumers can afford.
As Congress debates energy policy in a carbon con-
strained world, we need your help to ensure they get it
right. Future generations depend on this.
You can make a difference. If you have Internet access,
log on to
www.ourenergy.coop
and follow the steps to send
an e-mail to your elected officials. If you dont have Internet
access, contact Boone Electric Cooperative and we will do it
for you. Members will also have the opportunity to contact
legislators at Annual Meeting at the Our Energy, Our Future
information booth.
As we talk about our energy future, we wont be debat-
ing whether global warming is a reality or what source of
electricity is the best. Instead, we are asking our elected offi-
cials to ensure the United States will continue to have
dependable, affordable electricity for all.
Can We Talk (About Energy)?
D
A Dialogue With America
To help out with the
increasing cost of your
growing tots, and a whole
lot more, weve started
the Co-op Connections program. Heres how it
works: Take your Co-op Connections Card with
y