MINUTES OF LINCOLN ELECTRIC SYSTEM ADMINISTRATIVE BOARD Minutes of regular meeting held at 9:30 a.m., Friday, August 17, 2018, at the offices of Lincoln Electric System, 1040 O Street, Lincoln, Nebraska. Board Members Present: Layne Sup, Tammy Ward, DaNay Kalkowski, Andy Hunzeker, Sarah Peetz, Lucas Sabalka, Vicki Huff, Jerry Hudgins Board Members Absent: Vacant Board Seat LES Staff Present: Kevin Wailes, Shelley Sahling-Zart, Laura Kapustka, Jason Fortik, Dan Pudenz, Paul Crist, Lisa Hale, Trish Owen, Lacy Stockdale, Jim Rigg, Melissa Palmer, Jonathan Jakub, J.D. Linscott, Lucas Fahrer, Kent Koerber, Dennis Florom, Michael Reed, Kelley Porter, Giao Nguyen, Emily Koenig, Bryan Willnerd, Dave Auman, Troy Hopkins, Marc Shkolnick, Scott Benson, Dustan Daniel, Cindy Potter, Eric Ruskamp Others Present: Josh Miller, Steph Reed News Media Present: None Chair Layne Sup called the meeting to order at approximately 9:30 a.m. A safety briefing was provided. He noted that LES conducts its meetings in compliance with the Nebraska Open Meetings Act, and noted that copies of the Act are located near the entrance to the Board room. Chair Sup asked for approval of the minutes of the meeting of July 20, 2018. Sarah Peetz moved their approval. Vicki Huff seconded the motion. The vote for approval of the minutes was: Aye: Sup, Ward, Kalkowski, Hunzeker, Peetz, Sabalka, Huff, Hudgins Nay: None Absent: Vacant Board Seat Michael Reed, Crew Leader, Transportation, Corporate Operations, was recognized by the Board for 20 years of service to LES. Call to Order Approval of Minutes Introduction and Recognition of Staff
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MINUTES OF LINCOLN ELECTRIC SYSTEM ADMINISTRATIVE BOARD Minutes of regular meeting held at 9:30 a.m., Friday, August 17, 2018, at the offices of
Lincoln Electric System, 1040 O Street, Lincoln, Nebraska. Board Members Present: Layne Sup, Tammy Ward, DaNay Kalkowski, Andy
Hunzeker, Sarah Peetz, Lucas Sabalka, Vicki Huff, Jerry Hudgins
Board Members Absent: Vacant Board Seat LES Staff Present: Kevin Wailes, Shelley Sahling-Zart, Laura Kapustka, Jason
Fortik, Dan Pudenz, Paul Crist, Lisa Hale, Trish Owen, Lacy Stockdale, Jim Rigg, Melissa Palmer, Jonathan Jakub, J.D. Linscott, Lucas Fahrer, Kent Koerber, Dennis Florom, Michael Reed, Kelley Porter, Giao Nguyen, Emily Koenig, Bryan Willnerd, Dave Auman, Troy Hopkins, Marc Shkolnick, Scott Benson, Dustan Daniel, Cindy Potter, Eric Ruskamp
Others Present: Josh Miller, Steph Reed News Media Present: None Chair Layne Sup called the meeting to order at approximately
9:30 a.m. A safety briefing was provided. He noted that LES conducts its meetings in compliance with the Nebraska Open Meetings Act, and noted that copies of the Act are located near the entrance to the Board room.
Chair Sup asked for approval of the minutes of the meeting of
July 20, 2018. Sarah Peetz moved their approval. Vicki Huff seconded the motion. The vote for approval of the minutes was:
Michael Reed, Crew Leader, Transportation, Corporate Operations,
was recognized by the Board for 20 years of service to LES.
Call to Order Approval of Minutes Introduction and Recognition of Staff
- 2 -
Sarah Peetz, Chair of the Operations & Power Supply Committee, reported on Committee discussion which included the following: 1) an overview of the Right of Way Assurance Program; 2) an update on the LES Operations Center (LOC) construction; 3) 2019 power cost review; 4) 2018 second quarter generation revenue and cost report; and 5) a generation and environmental discussion.
Jerry Hudgins, Chair of the Finance & Audit Committee, reported on
Committee discussion which included the following: 1) a physical security update; 2) an ERM specific risk overview – health insurance; 3) the semi-annual investment report; 4) Internal Audit’s second quarter report; and 5) an update on District Energy Corporation (DEC) and Nebraska Utility Corporation (NUCorp).
Vicki Huff, Chair of the Personnel & Organization Committee,
reported on Committee discussion which included the following: 1) an update on LES’ networking and employee development group, PluggedIn; 2) an ERM specific risk overview – health insurance; 3) an update regarding incident reporting and worker’s compensation through the second quarter of 2018; 4) an occupational health and wellness update; 5) a mid-year review of health and dental claims; and 6) miscellaneous updates.
Eric Ruskamp, Manager, Regulatory Compliance, presented the
Board with a North American Electric Reliability Corporation (NERC) overview and compliance update. (Exhibit I) As a refresher, Ruskamp went over the history of NERC, regulatory hierarchy, reliability standards and compliance enforcement. Ruskamp also noted audits and assessments on the horizon for LES.
Dennis Florom, Manager, Energy & Environmental Operations, gave
the Board an overview of the Southwest Power Pool (SPP). (Exhibit II) Nebraska was integrated in 2009 and the Integrated Marketplace launched in 2014. As a refresher, Florom reviewed the functions and services of the SPP Regional Transmission Organization (RTO).
J.D. Linscott, Manager, Facilities Operation, presented the Board
with an update on the LES Operations Center (LOC). (Exhibit III) Currently, all structures of Phase 1 are up and mostly enclosed, DEC services have started and permanent
Operations & Power Supply Committee Finance &Audit Committee Personnel & Organization Committee North American Electric Reliability Corporation (NERC) Overview and Compliance Update Southwest Power Pool LES Operations Center (LOC) Update
- 3 -
site fencing is being installed. The design portion of Phase 2 should be completed in the fall of 2018. Linscott noted that as of January 5, 2018, 93% of sub contracts were awarded to local or Nebraska companies
gave the Board an overview of LES’ recent Sustainable Living Festival (SLF). (Exhibit IV) LES held its annual Sustainable Living Festival on Saturday, July 28, 2018, in the Railyard. It was estimated that more than 1,000 people attended the event. LES had approximately 400 entries for the bike giveaway and also gave away a Wi-Fi-enabled thermostat to promote LES’ newly launched Peak Rewards program. The SLF hosted 45 community partners, 10 of which were new this year. Nebraska Recycles collected 4,000 pounds of electronic waste and raised $400 for Bright Lights Summer Learning Adventures.
The Monthly Financial and Power Supply Reports were distributed to
the Board and staff was available to answer questions. (Exhibit V)
The next regular meeting of the LES Administrative Board is
scheduled for Friday, September 21, 2018, at 9:30 a.m. There being no further business before the Board, Layne Sup
declared the meeting adjourned at approximately 11:45 p.m
Sustainable Living Festival Report Monthly Financial and Power Supply Reports Next Meeting Adjournment
transmission loading relief outage coordination real-time assessments model development system operator training system protection underfrequency load shedding generator capability coordination operations planning transmission planning voltage control
2019-2020 Compliance Reviews• Performance of LES’ Inherent Risk Assessment in 2019• Offsite audit in May 2019• Onsite audit in 2020• 11 guided Self Certs in 2019
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LES.com
Compliance Update
SPP RE Dissolution
32
LES.com
Compliance Update
NERC and MRO Dues
33
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
2007 2009 2011 2013 2015 2017 2019
MRO
NERC
Total
• MRO dues to reduce 14.6% • NERC dues to increase 10.3%
LES.com
Compliance Update
Leadership changes• Jim Robb – President & CEO of NERC, April 2018• Sara Patrick – President & CEO of MRO, June 2018
services end of 2019• SPP and Cal ISO are exploring
RC certification
LES.com
Compliance Update
Large Financial Penalty• An unidentified entity received a $2.7 million penalty for the violation of
2 NERC requirements.• A third-party contractor exceeded its authorized access by improperly
copying data from the entity to its own server. Though trained, the contractor failed to properly protect the data which included 30,000 asset records, including IP addresses, server host names, cryptographic information for usernames and passwords (which could aid a malicious attacker in decoding passwords). The data was accessible online without user ID or password for 70 days.
• A white hat security researcher notified the entity of the exposure. • Logs indicate that only the white hat researcher downloaded the data.
• Drafting teams comprised of industry volunteers• Develop and provide comments and voting recommendations
o 66.66% approval needed• Implement new standards before enforcement date
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LES.com
Compliance Update
Standards Under Development• 13 Projects
o Establishing System Operating Limitso Single Points of Failureo Supply Chain Managemento Training
• Standards Efficiency review
Standards being implemented• 7 implementation plans
o Generator Modeling and Testingo Communications Testing
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LES.com
Compliance Update
NERC 2018 Summer Assessment• Texas has a generation shortfall due in part to 5,000 MW of generation
retirements since last summer. The projected reserve margin is 11%, 3% below their recommended level.
• California is facing a limit on natural gas output due to Aliso Canyon storage facility constraints. Anticipated below normal hydro generation and the need for fast-ramping generation based on high penetration of renewables will also challenge California.
• SPP footprint does not have any emerging reliability issues that are considered unique.
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LES.com
Compliance Update
NERC 2018 State of Reliability Report• The report looks back over the previous year with a view toward solving
future problems.
• In 2017, the bulk power system was able to maintain reliable operations during two Category 5 events (hurricanes Harvey and Irma) and the areas affected from storm-related damage recovered in record time.
• The bulk power system experienced no loss-of-load due to cyber or physical security events despite continually evolving threats.
• Transmission outages caused by failed protection system equipment, substation equipment, or human error all show a decreasing trend for the last five years.
39
LES.com
NERC Overview andCompliance Update
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Eric RuskampManager, Regulatory Compliance
Exhibit II
LES.com
Click to add title
1
Southwest Power Poolwww.spp.org
Dennis FloromManager, Energy & Environmental Operations
8/17/18
LES.com 2
LES.com 3
Southwest Power Pool Regional Transmission Organization (RTO)
Helping our members work together to keep the lights on…today and in the future.
• Headquartered in Little Rock, Arkansas; • Approximately 600 employees• Formed in 1941 for Reliability Coordination• Approved in 2004 as an RTO• Nebraska integrated in 2009• Integrated Marketplace launched in 2014• Integrated System (north of NE) integrated in 2015• 24 X 7 operation with full redundancy and backup• Revenue neutral• Member driven• FERC approved, governing tariff
LES.com 4
SPP Membership Profile
LES.com 5
SPP RTO Functions and Services
• Consolidated Balancing Authority• Energy• Other generator capabilities
Overall Project Budget Update Through Month Ending:
Current Budget Spent to Date Yet to SpendSoft Costs 7,090,469$ 5,182,063$ 2,377,478$ Hard Costs 92,223,914$ 38,994,029$ 53,229,885$ Total 101,111,671$ 45,075,525$ 56,505,219$ Owner Contingency Remaining Above Total Budget 3,607,898.18$
• 4,000 lbs. of electronic waste collected, resulting in $400 raised for Bright Lights Summer Learning Adventures
• 24 paperless billing sign-ups
• 10 EV study sign-ups
• 168 entries for Wi-Fi thermostat giveaway
Snapshot
3
Engaging activities from community partners
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Arbor Day FoundationThe ArtReach ProjectBig Red WormsBikeLNKCity of Lincoln, Autonomous Shuttle City of Lincoln Parks, Planning & Health DepartmentCity of Lincoln Solid Waste ManagementCity of Lincoln Watershed ManagementCommonGround NebraskaCommunity CropsElectric VehiclesEvolution AdvisoryGC ReVOLTHigh Level HappinessHVCcycle Inc.Joslyn Institute for Sustainable CommunitiesLancaster County Extension Master Gardeners Lincoln Children's Museum
Community partners
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Keep Lincoln-Lancaster County BeautifulKZUMMonarch Gardens LLCNebraska Building ProductsNebraska Ethanol BoardNebraskans for SolarNebraska RecyclesNebraska Recycling CouncilNebraska811Pioneers Park Nature CenterSpring Creek Prairie Audubon CenterSustain UNLSWT Energy University of Nebraska State MuseumUNL Bee LabUNL Environmental Studies ProgramWheelie Good Bike Shop
* New community partners in bold
New LES programs
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• LES ENERGIZERS / Kids’ Club• LES Peak Rewards Program• Electric Vehicle Study
7
• Little Lineworkers Rodeo• Electric Vehicles
• LES high-voltage demos• Snap Circuits/Electricity
Retail revenues have been consistently above budget, and through July are 3% above budget. This is primarily due to greater than budgeted use per residential customer combined with colder than average weather throughout the first four months of the year and warmer than average weather in the months since. Wholesale revenue is above budget 12.4% YTD primarily due to higher than budgeted sales into the SPP IM.
2) Power Costs 77,946 80,837 (2,891) -4%
Produced Power is 4% below budget on a YTD basis primarily due to LRS operation and maintenance costs. Purchased Power is also 4% below budget primarily due to favorable pricing in SPP IM and lower renewable wind expenses.
3) Other Operating Expenses 41,376 50,005 (8,629) -17%
Other Operating expenses (operation & maintenance, administrative & general) continue to be under budget (-17%) due to the timing of project spending in categories including line clearance, transmission, consulting services, software purchases, and sustainable energy program participation.
NOTE: Federal Energy Regulatory Commission accounting guidance for the Southwest Power Pool Integrated Market (SPP IM) transactions (purchases, sales and other charges) requires netting together these transactions based on the time increments. If, during the time increment, sales to SPP are greater than purchases from SPP, the net amount is recorded as wholesale revenue. If, during the time increment, purchases from SPP are greater than sales to SPP, the net amount is recorded as purchased power cost. Because of this netting process, the energy (MWH’s) amounts no longer directly correlate to wholesale revenue.
REVENUE & EXPENSE STATEMENT JULY 2018 CURRENT MONTH
CURRENT CURRENT LAST YEARDESCRIPTION MONTH MONTH MONTH
BALANCE SHEET JULY 2018ASSETS & DEFERRED OUTFLOWS OF RESOURCES LIABILITIES AND NET POSITION
END OF VARIANCE END OF VARIANCEDESCRIPTION MONTH SINCE DESCRIPTION MONTH SINCE
BALANCE JANUARY 1 BALANCE JANUARY 1CURRENT ASSETS: CURRENT LIABILITIES: 1. Revenue Fund (including CDFUO) $111,019,827 $54,040,433 OTHER LIABILITIES 2. Payments in Lieu of Taxes Fund $5,994,998 ($5,778,693) 1. Accounts Payable $16,773,495 ($4,735,256) 3. Rate Stabilization Fund 34,210,722 379,526 2. Accrued Payments in Lieu of Taxes 7,445,705 (5,890,259) 4. Bond Principal & Interest Funds 28,601,051 14,021,930 3. City Dividend for Utility Ownership Payable 3,111,345 622,269 5. Other Restricted/Designated Funds 3,545,579 570,455 4. Commercial Paper Notes 65,500,000 (30,000,000)
6. Restricted/Designated Funds Total 66,357,352 14,971,911 5. Accrued Liabilities 14,180,774 2,267,355 7. Total Current Asset Funds 183,372,177 63,233,651 6. MBPP-BNSF-STB Settlement 0 0 8. Receivables Less Uncollectible Allowance 23,856,173 3,752,502 7. Total Other Liabilities 107,011,319 (37,735,891) 9. Unbilled Revenue 20,674,616 6,587,826 CURRENT LIABILITIES - RESTRICTED ASSETS10. Accrued Interest Receivable 761,235 410,918 8. Current Portion of Long-Term Debt 19,480,000 011. Materials, Supplies & Fuel Inventory 13,245,887 519,066 9. Accrued Interest 10,687,606 2,460,535 12. Plant Operation Assets 15,716,938 (1,285,213) 10. Other Current Liabilities 1,491,732 93,630 13. Other Current Assets 2,587,310 168,007 11. Total Current Liabilities - Restricted Assets 31,659,338 2,554,165 14. Total Current Assets 260,214,336 73,386,757 12. Total Current Liabilities 138,670,657 (35,181,726)
21. Total Noncurrent Assets 26,460,737 3,826,814 19. Total Revenue Bonds 682,275,000 121,205,000 20. Less Current Maturities 19,480,000 0
CAPITAL ASSETS: 21. Less Unamortized Discounts/Premiums (70,156,221) (16,261,398) 22. Utility Plant in Service 1,548,857,032 27,090,277 22. Revolving Credit Agreement 0 (30,000,000) 23. Accumulated Depreciation & Amortization (760,889,588) (26,344,194) 23. Net Long Term Debt 732,951,221 107,466,39824. Construction Work in Progress 130,879,999 15,775,719 24. Liabilities Payable from Segregated Funds 646,137 0 25. Total Capital Assets 918,847,443 16,521,802 25. Other Noncurrent Liabilities 532,436 0
26. Total Liabilities 872,800,451 72,284,672DEFERRED OUTFLOWS OF RESOURCES:26. Deferred Loss on Refunded Debt 14,203,827 (1,250,794) NET POSITION:
27. Net Investment in Capital Assets 131,192,364 (92,352,990)28. Restricted for Debt Service 21,072,753 14,688,36929. Restricted for Employee Health Insurance Claims 400,411 (534,640)30. Unrestricted 194,260,364 98,399,168 31. Total Net Position 346,925,892 20,199,907
27. TOTAL ASSETS & DEFERRED OUTFLOWS OF RESOURCES $1,219,726,343 $92,484,579 32. TOTAL LIABILITIES & NET POSITION $1,219,726,343 $92,484,579
LINCOLN ELECTRIC SYSTEM
STATEMENT OF CASH FLOWS JULY 2018
CURRENT MONTH YEAR-TO-DATECASH FLOW FROM OPERATING ACTIVITIES: 1. Received from Sales to Customers and Users $33,925,284 $191,382,186 2. Paid to Suppliers for Goods & Services (20,599,412) (111,680,645) 3. Paid to Employees for Services (2,753,381) (19,271,423) 4. Cash Flow from Operating Activities (a) 10,572,491 60,430,118
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: 5. Payments in Lieu of Taxes (77,577) (12,807,676) 6. City Dividend for Utility Ownership Payments 0 (3,733,616) 7. Other 0 1 8. Cash Flow from (used for) Non-capital Financing Activities (77,577) (16,541,291)
CASH FLOWS FROM INVESTING ACTIVITIES: 9. Net (Purchases) Sales of Investments (2,898,604) (66,815,543)10. Interest Income 190,757 1,111,633 11. Cash Flow from (used for) Investing Activities (2,707,847) (65,703,910)
CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES:12. Acquisition and Construction of Capital Assets (7,842,608) (45,128,563)13. Salvage on Retirement of Plant 6,874 316,43014. Cost of Removal of Property Retired (71,425) (1,394,120)15. Debt Issuance Cost Paid 0 (538,146)16. Debt Premiums Collected 0 19,612,55217. Net Capital Contributions 86,352 499,18918. Net Proceeds form Issuance of Long-Term Debt 0 121,205,00019. Principal Payments on Long-Term Debt (30,000,000) (60,000,000)20. Interest Payments on Long-Term Debt (242,861) (13,321,757)21. Cash Flow from (used for) Capital Financing Activities (38,063,668) 21,250,585
22. Net Increase (Decrease) in Cash and Cash Equivalents (30,276,601) (564,498)23. Cash and Cash Equivalent Beginning of Period 53,154,290 23,442,187 24. Cash and Cash Equivalent End of Period (b) $22,877,689 $22,877,689
STATEMENT OF CASH FLOW FOOTNOTES(a) Reconciliation of operating income to cash flows from operating activities 1. Net Operating Revenue $13,893,488 $43,276,157 2. Noncash items included in operating income 4,373,363 30,561,901 3. Changes in Assets & Liabilities Increase/(Decrease) (7,694,360) (13,407,940) 4. Net cash flows from operating activities $10,572,491 $60,430,118
(b) Cash and cash equivalents are defined as cash and investments with original maturities of three months or less.
Page 8
LINCOLN ELECTRIC SYSTEM
DEBT SERVICE COVERAGE JULY 2018
DESCRIPTION ACTUAL BUDGET ACTUAL ACTUAL BUDGET ACTUALTHIS YEAR THIS YEAR LAST YEAR THIS YEAR THIS YEAR LAST YEAR
1. Total Operating Revenues $36,165,776 $38,932,392 $36,514,466 $192,525,241 $185,640,726 $188,543,426
2. Total Operating Expenses 22,272,288 24,993,379 23,451,066 149,249,084 160,494,283 157,686,335 3. Less Depreciation (4,281,209) (4,271,227) (4,261,948) (29,926,424) (29,652,476) (29,586,002) 4. Operating Expense Net of Depreciation 17,991,079 20,722,152 19,189,118 119,322,660 130,841,807 128,100,333
5. Net Operating Revenue for Debt Service 18,174,697 18,210,240 17,325,348 73,202,581 54,798,919 60,443,093 6. Interest Income (a) 295,922 210,778 116,884 1,219,850 1,390,515 700,192 7. Other Income 0 0 0 0 0 0 8. Rate Stabilization Fund 0 0 0 0 0 0
9. AVAILABLE FOR DEBT SERVICE 18,470,619 18,421,018 17,442,232 74,422,431 56,189,434 61,143,285
10. DEBT SERVICE (b) 4,133,317 3,987,031 3,514,177 26,045,571 26,193,487 24,599,239
11. DEBT SERVICE COVERAGE 4.47 4.62 4.96 2.86 2.15 2.49
(a) Excludes interest from Rate Stabilization Fund.(b) Includes Bond Principal & Interest only. Page 9
LINCOLN ELECTRIC SYSTEM
-------- CURRENT MONTH ---------- ---------- YEAR-TO-DATE ----------
INVESTMENT REPORT JULY 2018
PURCHASE MATURITY CPN/DCNT (a) CASH PARFUND / INVESTMENT DATE DATE RATE YIELD EQUIVALENTS SECURITIES VALUE
CASH - REVENUE FUND / WORKING FUND $882,264 $882,264SHORT TERM FEDERAL INVESTMENT TRUST (STFIT) 9,024,428 9,024,428
REVENUE FUND Federated Treasury Obligations Fund * 1.540% 141,798 141,798 Natixis, New York Branch Commercial Paper 03/26/2018 08/20/2018 2.300% 2.322% 3,962,433 4,000,000 Anglesea Funding LLC Commercial Paper 03/29/2018 08/20/2018 2.380% 2.403% 4,952,400 5,000,000 Bank of China (Hong Kong) Ltd. Commercial Paper 04/20/2018 09/21/2018 2.600% 2.629% 5,305,329 5,365,000 Banco de Credito Comercial Paper 06/28/2018 10/22/2018 2.500% 2.520% 7,439,583 7,500,000 Torchmark Corporation Commercial Paper 06/28/2018 11/20/2018 2.530% 2.556% 7,423,573 7,500,000 Hannover Funding Co. LLC Commercial Paper 06/28/2018 12/12/2018 2.750% 2.786% 7,404,323 7,500,000 Korea Development Bank Commercial Paper 06/28/2018 01/04/2019 2.430% 2.462% 7,403,813 7,500,000 Shinhan Bank NY Branch Commercial Paper 06/28/2018 02/22/2019 2.650% 2.697% 7,368,052 7,500,000 Banco Santander SA/NY Commercial Paper 07/26/2018 04/01/2019 2.600% 2.648% 7,482,967 7,620,000 ING (U.S.) Funding LLC Commercial Paper 07/10/2018 04/05/2019 2.530% 2.579% 4,988,869 5,085,000 U.S. Treasury Note 06/28/2018 03/15/2019 1.000% 2.220% 7,435,425 7,500,000 U.S. Treasury Note 06/28/2018 04/30/2019 1.250% 2.301% 7,434,750 7,500,000 U.S. Treasury Note 06/28/2018 05/15/2019 3.125% 2.311% 7,552,800 7,500,000 Federal Home Loan Banks Bond 06/29/2018 06/21/2019 1.125% 2.350% 7,411,692 7,500,000 U.S. Treasury Note 06/28/2018 07/15/2019 0.750% 2.345% 7,376,979 7,500,000 Discount \ (Premium) 28,348
Total Revenue Fund 141,798 100,971,336 102,211,798
PILOT FUND Federated Treasury Obligations Fund * 1.540% 22,643 22,643 MUFG Bank, Ltd., NY Branch Commercial Paper 04/20/2018 01/14/2019 2.400% 2.444% 864,219 880,000 J.P. Morgan Securities Commercial Paper 05/18/2018 02/11/2019 2.450% 2.496% 962,059 980,000 J.P. Morgan Securities Commercial Paper 06/20/2018 03/15/2019 2.530% 2.579% 946,825 965,000 Natixis, New York Branch Commercial Paper 07/20/2018 04/05/2019 2.480% 2.525% 1,119,660 1,140,000
Federal Home Loan Banks Bond 03/22/2018 04/08/2019 1.150% 2.120% 990,029 1,000,000
U.S. Treasury Note 02/20/2018 04/30/2019 1.625% 2.105% 1,083,869 1,090,000
Discount \ (Premium) 5,694
Total PILOT Fund $22,643 $5,972,355 $6,077,643(a) Cash and cash equivalents are defined as cash & investments with original maturities of three months or less.* Interest rate as of end of month. Page 10a
LINCOLN ELECTRIC SYSTEM
INVESTMENT REPORT JULY 2018
PURCHASE MATURITY CPN/DCNT (a) CASH PARFUND / INVESTMENT DATE DATE RATE YIELD EQUIVALENTS SECURITIES VALUE
BOND RESERVE FUNDS Federated Treasury Obligations Fund * 1.540% $172,921 $172,921 Federal Home Loan Banks Bond 09/01/2016 08/28/2018 1.000% 1.000% 490,000 490,000 Federal Home Loan Banks Bond 09/01/2016 08/28/2018 1.000% 1.000% 2,340,000 2,340,000 Federal National Mortgage Association Bond 05/28/2015 02/01/2019 0.000% 1.650% 1,416,805 1,505,000 Federal Home Loan Mortgage Corporation Bond 06/28/2018 08/15/2019 1.375% 2.400% 2,916,449 2,950,000 Federal National Mortgage Association Bond 09/01/2016 08/28/2019 1.150% 1.150% 355,000 355,000 Federal National Mortgage Association Bond 09/01/2016 08/28/2020 1.400% 1.400% 1,400,000 1,400,000 Federal National Mortgage Association Bond 09/01/2016 08/28/2020 1.400% 1.400% 2,340,000 2,340,000 Federal Home Loan Banks Bond 03/14/2018 08/28/2020 2.400% 2.400% 3,750,000 3,750,000 Federal National Mortgage Association Bond 06/28/2018 06/28/2021 2.800% 2.800% 4,600,000 4,600,000 Discount \ (Premium) 78,745
Total Bond Reserve Funds 172,921 19,686,999 19,902,921
BOND PRINCIPAL & INTEREST FUNDS Federated Treasury Obligations Fund * 1.540% 4,150,284 4,150,284 Alpine Securitization LLC Commercial Paper 01/31/2018 08/03/2018 1.930% 1.949% 1,608,970 1,625,000 Ebury Finance LLC Commercial Paper 04/30/2018 08/07/2018 2.320% 2.335% 1,629,537 1,640,000 Federal Home Loan Banks Bond 11/30/2017 08/08/2018 0.950% 1.541% 1,623,415 1,630,000 Qualcomm Inc. Commercial Paper 06/29/2018 08/28/2018 2.280% 2.289% 1,623,806 1,630,000 Qualcomm Inc. Commercial Paper 06/29/2018 08/28/2018 2.280% 2.289% 2,077,077 2,085,000 MUFG Bank, Ltd., NY Branch Commercial Paper 07/26/2018 08/28/2018 2.050% 2.054% 1,641,909 1,645,000 Bedford Row Funding Corp Commercial Paper 03/29/2018 08/29/2018 2.360% 2.384% 2,034,388 2,055,000 Bedford Row Funding Corp Commercial Paper 03/29/2018 08/29/2018 2.360% 2.384% 1,633,451 1,650,000 U.S. Treasury Note 09/29/2017 08/31/2018 0.750% 1.310% 1,611,729 1,620,000 U.S. Treasury Note 10/31/2017 08/31/2018 0.750% 1.400% 1,621,263 1,630,000 MUFG Bank, Ltd., NY Branch Commercial Paper 04/30/2018 08/31/2018 2.300% 2.318% 2,023,969 2,040,000 First Abu Dhabi Bank Commercial Paper 05/31/2018 08/31/2018 2.280% 2.293% 1,625,473 1,635,000 First Abu Dhabi Bank Commercial Paper 05/31/2018 08/31/2018 2.280% 2.293% 2,023,142 2,035,000 Bayerische Landesbank, NY Branch 07/19/2018 08/31/2018 2.070% 2.075% 1,650,908 1,655,000 Discount \ (Premium) 21,729
Total Bond Principal & Interest Funds 11,143,984 17,457,066 28,725,284
RATE STABILIZATION FUND Federated Treasury Obligations Fund * 1.540% 115,032 115,032 Federal National Mortgage Association Bond 02/10/2017 12/14/2018 1.125% 1.140% 6,323,252 6,325,000 Federal Farm Credit Banks Bond 06/29/2017 06/12/2019 1.375% 1.391% 5,048,485 5,050,000
Federal National Mortgage Association Bond 12/11/2017 11/26/2019 1.750% 1.820% 1,729,662 1,732,000
Federal Home Loan Mortgage Corporation Bond 01/30/2018 11/27/2019 0.500% 2.150% 8,091,809 8,150,000
Federal Farm Credit Banks Bond 12/20/2017 12/12/2019 100.500% 1.916% 5,135,888 5,140,000 Federal Farm Credit Banks Bond 01/12/2018 01/10/2020 100.500% 1.970% 2,549,006 2,550,000 Federal Farm Credit Banks Bond 06/29/2018 06/11/2020 200.500% 2.580% 5,197,014 5,200,000 Discount \ (Premium) 20,576
Total Rate Stabilization Fund $115,032 $34,095,692 $34,262,032(a) Cash and cash equivalents are defined as cash & investments with original maturities of three months or less.* Interest rate as of end of month. Page 10b
LINCOLN ELECTRIC SYSTEM
INVESTMENT REPORT JULY 2018
PURCHASE MATURITY CPN/DCNT (a) CASH PARFUND / INVESTMENT DATE DATE RATE YIELD EQUIVALENTS SECURITIES VALUE
SELF-FUNDED HEALTH & DENTAL CLAIMS FUND Federated Treasury Obligations Fund * 1.540% $917,593 $917,593 Credit Suisse NY Commercial Paper 03/05/2018 09/28/2018 2.240% 2.269% 987,120 1,000,000 Discount \ (Premium)
Total Self-Funded Health & Dental Claims Fund 917,593 987,120 1,917,593
SELF-FUNDED HEALTH & DENTAL RESERVE FUND (INCURRED BUT NOT PRESENTED) Federated Treasury Obligations Fund * 1.540% 8,019 8,019 Federal Farm Credit Banks Bond 01/12/2018 12/14/2018 1.300% 1.781% 527,679 530,000 Discount \ (Premium) 1,382
Total Self-Funded Health & Dental Reserve Fund 8,019 529,061 538,019
SEGREGATED ACCOUNT Federated Treasury Obligations Fund * 1.540% 278,526 278,526 General Electric Company Commercial Paper 04/23/2018 09/17/2018 2.280% 2.301% 371,509 375,000 Federal National Mortgage Association Bond 12/29/2017 12/14/2018 1.125% 1.780% 198,760 200,000 U.S. Treasury Bill 06/29/2018 06/20/2019 2.231% 2.300% 1,271,321 1,300,000 Discount \ (Premium) 758
Total Segregated Account 278,526 1,842,348 2,153,526
Cost of Issuance Account Federated Treasury Obligations Fund * 1.540% 170,481 170,481 Discount \ (Premium)
Total Cost of Issuance Account 170,481 0 170,481
TOTAL $22,877,689 $181,541,977 $205,865,989(a) Cash and cash equivalents are defined as cash & investments with original maturities of three months or less.
* Interest rate as of end of month. Page 10c
LINCOLN ELECTRIC SYSTEM
LES.com
Power Supply Division2018 July Monthly Report
Jason FortikAugust 17, 2018
LES.com
July 2018Monthly Actual vs. Budget
2
$8.46
-$0.33
-$6.27
$5.32
-$1.43
$6.41
$4.76
$10.48
-$0.25
-$4.46
$4.59
-$1.53
$6.59
$5.53
-$8 -$6 -$4 -$2 $0 $2 $4 $6 $8 $10 $12
Net
SPP Other***
SPP IM Market Revenue
SPP IM Load Purchases
Contract Sales**
Owned Asset Power
Non-Owned Asset Power*
Millions ($)
Budget Actual
Revenues Expenses*Non-Owned Asset Power does not include SPP IM Purchased**Contract Sales does not include SPP IM Revenue***SPP Other includes Over-Collected Losses and ARR’s/TCR