November
30, 2007
|
May
31, 2007
|
||||||
Cash
and cash equivalents
|
$
|
188,655
|
$
|
304,107
|
|||
Loans
to members
|
18,261,923
|
18,131,873
|
|||||
Less:
Allowance for loan losses
|
(530,802
|
)
|
(561,663
|
)
|
|||
Loans
to members, net
|
17,731,121
|
17,570,210
|
|||||
Accrued
interest and other receivables
|
286,009
|
291,637
|
|||||
Fixed
assets, net
|
5,692
|
4,555
|
|||||
Debt
service reserve funds
|
54,993
|
54,993
|
|||||
Bond
issuance costs, net
|
36,409
|
45,611
|
|||||
Foreclosed
assets
|
70,145
|
66,329
|
|||||
Derivative
assets
|
211,507
|
222,774
|
|||||
Other
assets
|
22,364
|
14,965
|
|||||
$
|
18,606,895
|
$
|
18,575,181
|
||||
See
accompanying notes.
|
November
30, 2007
|
May
31, 2007
|
|||||||
Short-term
debt
|
$
|
6,492,588
|
$
|
4,427,123
|
||||
Accrued
interest payable
|
281,556
|
281,458
|
||||||
Long-term
debt
|
9,275,267
|
11,295,219
|
||||||
Deferred
income
|
25,044
|
27,990
|
||||||
Guarantee
liability
|
14,681
|
18,929
|
||||||
Other
liabilities
|
29,860
|
27,611
|
||||||
Derivative
liabilities
|
169,928
|
71,934
|
||||||
Subordinated
deferrable debt
|
311,440
|
311,440
|
||||||
Members'
subordinated certificates:
|
||||||||
Membership
subordinated certificates
|
649,424
|
649,424
|
||||||
Loan
and guarantee subordinated certificates
|
759,053
|
732,023
|
||||||
Total
members' subordinated certificates
|
1,408,477
|
1,381,447
|
||||||
Commitments
and contingencies
|
||||||||
Minority
interest
|
15,933
|
21,989
|
||||||
Equity:
|
||||||||
Retained
equity
|
570,248
|
697,837
|
||||||
Accumulated
other comprehensive income
|
11,873
|
12,204
|
||||||
Total
equity
|
582,121
|
710,041
|
||||||
$
|
18,606,895
|
$
|
18,575,181
|
|||||
See
accompanying notes.
|
Three
months ended
|
Six
months ended
|
||||||||||||||
November
30,
|
November
30,
|
||||||||||||||
2007
|
2006
(As
restated)*
|
2007
|
2006
(As
restated)*
|
||||||||||||
Interest
income
|
$
|
263,287
|
$
|
260,244
|
$
|
531,241
|
$
|
524,933
|
|||||||
Interest
expense
|
(240,017
|
)
|
(248,591
|
)
|
(487,342
|
)
|
(504,595
|
)
|
|||||||
Net
interest income
|
23,270
|
11,653
|
43,899
|
20,338
|
|||||||||||
Recovery
of loan losses
|
14,301
|
-
|
14,301
|
-
|
|||||||||||
Net
interest income after recovery of loan losses
|
37,571
|
11,653
|
58,200
|
20,338
|
|||||||||||
Non-interest
income:
|
|||||||||||||||
Rental
and other income
|
352
|
308
|
703
|
625
|
|||||||||||
Derivative
cash settlements
|
11,507
|
16,493
|
19,836
|
31,748
|
|||||||||||
Results
of operations of foreclosed assets
|
1,856
|
2,989
|
3,816
|
5,991
|
|||||||||||
Total
non-interest income
|
13,715
|
19,790
|
24,355
|
38,364
|
|||||||||||
Non-interest
expense:
|
|||||||||||||||
Salaries
and employee benefits
|
(8,828
|
)
|
(8,209
|
)
|
(17,651
|
)
|
(16,761
|
)
|
|||||||
Other
general and administrative expenses
|
(5,929
|
)
|
(4,568
|
)
|
(10,416
|
)
|
(8,744
|
)
|
|||||||
Recovery
of (provision for) guarantee liability
|
1,200
|
(1,800
|
)
|
3,300
|
(400
|
)
|
|||||||||
Derivative
forward value
|
(75,412
|
)
|
(53,239
|
)
|
(109,012
|
)
|
(116,590
|
)
|
|||||||
Foreign
currency adjustments
|
-
|
(20,620
|
)
|
-
|
(17,299
|
)
|
|||||||||
Loss
on sale of loans
|
-
|
-
|
(518
|
)
|
-
|
||||||||||
Total
non-interest expense
|
(88,969
|
)
|
(88,436
|
)
|
(134,297
|
)
|
(159,794
|
)
|
|||||||
Loss
prior to income taxes and minority interest
|
(37,683
|
)
|
(56,993
|
)
|
(51,742
|
)
|
(101,092
|
)
|
|||||||
Income
taxes
|
2,912
|
486
|
4,011
|
1,200
|
|||||||||||
Loss
prior to minority interest
|
(34,771
|
)
|
(56,507
|
)
|
(47,731
|
)
|
(99,892
|
)
|
|||||||
Minority
interest
|
4,545
|
312
|
6,123
|
678
|
|||||||||||
Net
loss
|
$
|
(30,226
|
)
|
$
|
(56,195
|
)
|
$
|
(41,608
|
)
|
$
|
(99,214
|
)
|
|||
See
accompanying notes.
|
|||||||||||||||
*See
Note 1(i)
|
Patronage
Capital
|
|||||||||||||||||||||||||||||||||||||
Accumulated
|
Allocated
|
||||||||||||||||||||||||||||||||||||
Other
|
Subtotal
|
Members'
|
General
|
||||||||||||||||||||||||||||||||||
Comprehensive
|
Retained
|
Membership
|
Unallocated
|
Education
|
Capital
|
Reserve
|
|||||||||||||||||||||||||||||||
Total
|
Income
(Loss)
|
Equity
|
Fees
|
Net
Income
|
Fund
|
Reserve
|
Fund
|
Other
|
|||||||||||||||||||||||||||||
Six
months ended November 30, 2007:
|
|||||||||||||||||||||||||||||||||||||
Balance
as of May 31, 2007
|
$
|
710,041
|
$
|
12,204
|
$
|
697,837
|
$
|
997
|
$
|
131,528
|
$
|
1,406
|
$
|
158,308
|
$
|
498
|
$
|
405,100
|
|||||||||||||||||||
Patronage
capital retirement
|
(85,494
|
)
|
-
|
(85,494
|
)
|
-
|
-
|
-
|
-
|
-
|
(85,494
|
)
|
|||||||||||||||||||||||||
Loss
prior to income taxes and
minority
interest
|
(51,742
|
)
|
-
|
(51,742
|
)
|
-
|
(51,742
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||
Other
comprehensive loss
|
(331
|
)
|
(331
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||
Income
taxes
|
4,011
|
-
|
4,011
|
-
|
4,011
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
Minority
interest
|
6,123
|
-
|
6,123
|
-
|
6,123
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
Other
|
(487
|
)
|
-
|
(487
|
)
|
(1
|
)
|
1
|
(487
|
)
|
40
|
-
|
(40
|
)
|
|||||||||||||||||||||||
Balance
as of November 30, 2007
|
$
|
582,121
|
$
|
11,873
|
$
|
570,248
|
$
|
996
|
$
|
89,921
|
$
|
919
|
$
|
158,348
|
$
|
498
|
$
|
319,566
|
|||||||||||||||||||
Six
months ended November 30, 2006:
|
|||||||||||||||||||||||||||||||||||||
Balance
as of May 31, 2006
|
$
|
784,408
|
$
|
13,208
|
$
|
771,200
|
$
|
994
|
$
|
225,849
|
$
|
1,281
|
$
|
156,844
|
$
|
497
|
$
|
385,735
|
|||||||||||||||||||
Patronage
capital retirement
|
(84,247
|
)
|
-
|
(84,247
|
)
|
-
|
-
|
-
|
-
|
-
|
(84,247
|
)
|
|||||||||||||||||||||||||
Loss
prior to income taxes and
minority
interest (As restated)*
|
(101,092
|
)
|
-
|
(101,092
|
)
|
-
|
(101,092
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||
Other
comprehensive loss
|
(502
|
)
|
(502
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||
Income
taxes
|
1,200
|
-
|
1,200
|
-
|
1,200
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
Minority
interest
|
678
|
-
|
678
|
-
|
678
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||
Other
|
(481
|
)
|
-
|
(481
|
)
|
(1
|
)
|
-
|
(480
|
)
|
-
|
-
|
-
|
||||||||||||||||||||||||
Balance
as of November 30, 2006 (As restated)*
|
$
|
599,964
|
$
|
12,706
|
$
|
587,258
|
$
|
993
|
$
|
126,635
|
$
|
801
|
$
|
156,844
|
$
|
497
|
$
|
301,488
|
|||||||||||||||||||
See
accompanying notes.
|
|||||||||||||||||||||||||||||||||||||
*See
Note 1(i)
|
2007
|
2006
(As
restated)*
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net
loss
|
$
|
(41,608
|
)
|
$
|
(99,214
|
)
|
|
Add
(deduct):
|
|||||||
Amortization
of deferred income
|
(4,240
|
)
|
(7,840
|
)
|
|||
Amortization
of bond issuance costs and deferred charges
|
11,463
|
9,510
|
|||||
Depreciation
|
1,118
|
1,105
|
|||||
Recovery
of loan losses
|
(14,301
|
)
|
-
|
||||
(Recovery
of) provision for guarantee liability
|
(3,300
|
)
|
400
|
||||
Results
of operations of foreclosed assets
|
(3,816
|
)
|
(5,991
|
)
|
|||
Derivative
forward value
|
109,012
|
116,590
|
|||||
Foreign
currency adjustments
|
-
|
17,299
|
|||||
Loss
on sale of loans
|
518
|
-
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Accrued
interest and other receivables
|
(9,068
|
)
|
(18,141
|
)
|
|||
Accrued
interest payable
|
98
|
27,765
|
|||||
Other
|
(5,264
|
)
|
(6,271
|
)
|
|||
Net
cash provided by operating activities
|
40,612
|
35,212
|
|||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Advances
made on loans
|
(3,595,700
|
)
|
(3,347,118
|
)
|
|||
Principal
collected on loans
|
3,403,193
|
3,550,432
|
|||||
Net
investment in fixed assets
|
(744
|
)
|
(333
|
)
|
|||
Net
cash provided by foreclosed assets
|
-
|
56,831
|
|||||
Net
proceeds from sale of foreclosed assets
|
-
|
487
|
|||||
Net
proceeds from sale of loans
|
39,580
|
-
|
|||||
Net
cash (used in) provided by investing activities
|
(153,671
|
)
|
260,299
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
(Repayments
of) proceeds from issuances of short-term debt, net
|
(103,653
|
)
|
136,133
|
||||
Proceeds
from issuance of long-term debt, net
|
668,890
|
111,154
|
|||||
Payments
for retirement of long-term debt
|
(346,590
|
)
|
(478,913
|
)
|
|||
Payments
for retirement of subordinated deferrable debt
|
(175,000
|
)
|
(150,000
|
)
|
|||
Proceeds
from issuance of members' subordinated certificates
|
43,189
|
18,710
|
|||||
Payments
for retirement of members' subordinated certificates
|
(11,851
|
)
|
(17,322
|
)
|
|||
Payments
for retirement of National Rural patronage capital
|
(77,378
|
)
|
(74,094
|
)
|
|||
|
|||||||
Net
cash used in financing activities
|
(2,393
|
)
|
(454,332
|
)
|
|||
NET
DECREASE IN CASH AND CASH EQUIVALENTS
|
(115,452
|
)
|
(158,821
|
)
|
|||
BEGINNING
CASH AND CASH EQUIVALENTS
|
304,107
|
260,338
|
|||||
ENDING
CASH AND CASH EQUIVALENTS
|
$
|
188,655
|
$
|
101,517
|
|||
See
accompanying notes.
|
|||||||
*See
Note 1(i)
|
2007
|
2006
(As
restated)*
|
|||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Cash
paid for interest
|
$
|
475,781
|
$
|
467,321
|
||||
Cash
paid for income taxes
|
767
|
982
|
||||||
See
accompanying notes.
|
||||||||
*See
Note 1(i)
|
(1)
|
General
Information and Accounting Policies
|
For
the six months ended November
30,
|
Year
ended
|
||||||||||
(in
thousands)
|
2007
|
2006
|
May
31,
2007
|
||||||||
Balance
at beginning of period
|
$
|
561,663
|
$
|
611,443
|
$
|
611,443
|
|||||
Recovery
of loan losses
|
(14,301
|
)
|
-
|
(6,922
|
)
|
||||||
Write-offs
|
(16,755
|
)
|
(304
|
)
|
(44,668
|
)
|
|||||
Recoveries
of prior write-offs
|
195
|
219
|
1,810
|
||||||||
Balance
at end of period
|
$
|
530,802
|
$
|
611,358
|
$
|
561,663
|
For
the three months ended November 30,
|
For
the six months ended November 30,
|
|||||||||||||||
(in
thousands)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Interest
on long-term fixed rate loans (1)
|
$
|
215,183
|
$
|
206,054
|
$
|
429,743
|
$
|
411,627
|
||||||||
Interest
on long-term variable rate loans (1)
|
22,690
|
30,546
|
47,239
|
62,171
|
||||||||||||
Interest
on short-term loans (1)
|
19,244
|
17,877
|
39,592
|
35,930
|
||||||||||||
Interest
on investments (2)
|
1,900
|
1,421
|
4,836
|
3,449
|
||||||||||||
Conversion
fees (3)
|
1,735
|
2,442
|
3,509
|
4,954
|
||||||||||||
Make-whole
and prepayment fees
(4)
|
65
|
382
|
1,754
|
825
|
||||||||||||
Commitment
and guarantee fees
(5)
|
1,385
|
1,260
|
2,920
|
5,469
|
||||||||||||
Other
fees
|
1,085
|
262
|
1,648
|
508
|
||||||||||||
Total
interest income
|
$
|
263,287
|
$
|
260,244
|
$
|
531,241
|
$
|
524,933
|
For
the three months ended November 30,
|
For
the six months ended November 30,
|
|||||||||||||||
(in
thousands)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Interest
expense - commercial
paper and bid notes (1)
|
$
|
33,192
|
$
|
49,068
|
$
|
71,478
|
$
|
96,002
|
||||||||
Interest
expense - medium-term
notes (1)
|
83,681
|
93,307
|
166,867
|
188,174
|
||||||||||||
Interest
expense - collateral
trust bonds (1)
|
63,405
|
49,488
|
128,755
|
100,560
|
||||||||||||
Interest
expense - subordinated
deferrable debt (1)
|
4,916
|
8,153
|
9,831
|
16,783
|
||||||||||||
Interest
expense - subordinated
certificates (1)
|
12,030
|
11,876
|
24,154
|
23,916
|
||||||||||||
Interest
expense - long-term
private debt (1)
|
34,960
|
30,022
|
65,743
|
60,304
|
||||||||||||
Debt
issuance costs (2)
|
2,767
|
2,067
|
5,297
|
4,102
|
||||||||||||
Commitment
and guarantee fees (3)
|
4,605
|
4,000
|
8,675
|
8,014
|
||||||||||||
Loss
on extinguishment of debt (4)
|
-
|
-
|
5,509
|
4,806
|
||||||||||||
Other
fees
|
461
|
610
|
1,033
|
1,934
|
||||||||||||
Total
interest expense
|
$
|
240,017
|
$
|
248,591
|
$
|
487,342
|
$
|
504,595
|
For
the three months ended
November
30,
|
For
the six months ended
November
30,
|
|||||||||||||||
(in
thousands)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Net
loss
|
$
|
(30,226
|
)
|
$
|
(56,195
|
)
|
$
|
(41,608
|
)
|
$
|
(99,214
|
)
|
||||
Other
comprehensive
income:
|
||||||||||||||||
Reclassification
adjustment for
|
||||||||||||||||
realized
gain on derivatives
|
(256
|
)
|
(251
|
)
|
(331
|
)
|
(502
|
)
|
||||||||
Comprehensive
loss
|
$
|
(30,482
|
)
|
$
|
(56,446
|
)
|
$
|
(41,939
|
)
|
$
|
(99,716
|
)
|
For
the three months ended November 30, 2006
|
|||||||||
(in
thousands)
|
As
previously reported
|
Adjustment
|
As
restated
|
||||||
Interest
expense
|
$
|
(245,261
|
)
|
$
|
(3,330
|
)
|
$
|
(248,591
|
)
|
Net
interest income
|
14,983
|
(3,330
|
)
|
11,653
|
|||||
Net
interest income after provision for loan losses
|
14,983
|
(3,330
|
)
|
11,653
|
|||||
Derivative
cash settlements
|
13,163
|
3,330
|
16,493
|
||||||
Total
non-interest income
|
16,460
|
3,330
|
19,790
|
||||||
Derivative
forward value
|
(49,080
|
)
|
(4,159
|
)
|
(53,239
|
)
|
|||
Total
non-interest expense
|
(84,277
|
)
|
(4,159
|
)
|
(88,436
|
)
|
|||
Loss
prior to income taxes and minority interest
|
(52,834
|
)
|
(4,159
|
)
|
(56,993
|
)
|
|||
Loss
prior to minority interest
|
(52,348
|
)
|
(4,159
|
)
|
(56,507
|
)
|
|||
Net
loss
|
(52,036
|
)
|
(4,159
|
)
|
(56,195
|
)
|
For
the six months ended November 30, 2006
|
|||||||||
(in
thousands)
|
As
previously reported
|
Adjustment
|
As
restated
|
||||||
Interest
expense
|
$
|
(497,716
|
)
|
$
|
(6,879
|
)
|
$
|
(504,595
|
)
|
Net
interest income
|
27,217
|
(6,879
|
)
|
20,338
|
|||||
Net
interest income after provision for loan losses
|
27,217
|
(6,879
|
)
|
20,338
|
|||||
Derivative
cash settlements
|
24,869
|
6,879
|
31,748
|
||||||
Total
non-interest income
|
31,485
|
6,879
|
38,364
|
||||||
Derivative
forward value
|
(109,534
|
)
|
(7,056
|
)
|
(116,590
|
)
|
|||
Total
non-interest expense
|
(152,738
|
)
|
(7,056
|
)
|
(159,794
|
)
|
|||
Loss
prior to income taxes and minority interest
|
(94,036
|
)
|
(7,056
|
)
|
(101,092
|
)
|
|||
Loss
prior to minority interest
|
(92,836
|
)
|
(7,056
|
)
|
(99,892
|
)
|
|||
Net
loss
|
(92,158
|
)
|
(7,056
|
)
|
(99,214
|
)
|
(2)
|
Loans
and Commitments
|
November
30, 2007
|
May
31, 2007
|
||||||||||||||
Loans
|
Unadvanced
|
Loans
|
Unadvanced
|
||||||||||||
(in
thousands)
|
Outstanding
|
Commitments
(1)
|
Outstanding
|
Commitments
(1)
|
|||||||||||
Total
by loan type (2):
|
|||||||||||||||
Long-term
fixed rate loans
|
$
|
14,806,429
|
$
|
-
|
$
|
14,663,340
|
$
|
-
|
|||||||
Long-term
variable rate loans
|
1,918,327
|
5,646,720
|
1,993,534
|
5,703,313
|
|||||||||||
Loans
guaranteed by RUS
|
252,087
|
491
|
255,903
|
491
|
|||||||||||
Short-term
loans
|
1,281,060
|
7,462,247
|
1,215,430
|
7,200,156
|
|||||||||||
Total
loans outstanding
|
18,257,903
|
13,109,458
|
18,128,207
|
12,903,960
|
|||||||||||
Deferred
origination fees
|
4,020
|
-
|
3,666
|
-
|
|||||||||||
Less:
Allowance for loan losses
|
(530,802
|
)
|
-
|
(561,663
|
)
|
-
|
|||||||||
Net
loans
|
$
|
17,731,121
|
$
|
13,109,458
|
$
|
17,570,210
|
$
|
12,903,960
|
|||||||
Total
by segment:
|
|||||||||||||||
National
Rural:
|
|||||||||||||||
Distribution
|
$
|
12,881,373
|
$
|
9,191,590
|
$
|
12,827,772
|
$
|
9,176,686
|
|||||||
Power
supply
|
3,007,262
|
2,998,166
|
2,858,040
|
2,798,124
|
|||||||||||
Statewide
and associate
|
114,081
|
120,737
|
119,478
|
139,156
|
|||||||||||
National
Rural total
|
16,002,716
|
12,310,493
|
15,805,290
|
12,113,966
|
|||||||||||
RTFC
|
1,791,504
|
508,336
|
1,860,379
|
473,762
|
|||||||||||
NCSC
|
463,683
|
290,629
|
462,538
|
316,232
|
|||||||||||
Total
loans outstanding
|
$
|
18,257,903
|
$
|
13,109,458
|
$
|
18,128,207
|
$
|
12,903,960
|
November
30, 2007
|
May
31, 2007
|
|||||||||||||||
Loans
|
Unadvanced
|
Loans
|
Unadvanced
|
|||||||||||||
(in
thousands)
|
Outstanding
|
Commitments
(1)
|
Outstanding
|
Commitments
(1)
|
||||||||||||
Non-performing
and restructured
loans (3):
|
||||||||||||||||
Non-performing
loans (2):
|
||||||||||||||||
RTFC:
|
||||||||||||||||
Long-term
fixed rate loans
|
$
|
219,734
|
$
|
-
|
$
|
212,984
|
$
|
-
|
||||||||
Long-term
variable rate loans
|
253,480
|
2,160
|
261,081
|
-
|
||||||||||||
Short-term
loans
|
29,984
|
-
|
27,799
|
418
|
||||||||||||
Total
non-performing loans
|
$
|
503,198
|
$
|
2,160
|
$
|
501,864
|
$
|
418
|
||||||||
Restructured
loans (2):
|
||||||||||||||||
National
Rural:
|
||||||||||||||||
Long-term
fixed rate loans
|
$
|
52,420
|
$
|
-
|
$
|
52,420
|
$
|
-
|
||||||||
Long-term
variable rate loans
|
532,476
|
186,673
|
544,697
|
186,673
|
||||||||||||
Short-term
loans
|
-
|
12,500
|
-
|
12,500
|
||||||||||||
National
Rural total restructured loans
|
584,896
|
199,173
|
597,117
|
199,173
|
||||||||||||
RTFC:
|
||||||||||||||||
Long-term
fixed rate loans
|
5,872
|
-
|
6,188
|
-
|
||||||||||||
Total
restructured loans
|
$
|
590,768
|
$
|
199,173
|
$
|
603,305
|
$
|
199,173
|
(Dollar
amounts in thousands)
|
November
30, 2007
|
May
31, 2007
|
|||||||||||||||
Total
by loan program:
|
Secured
|
%
|
Unsecured
|
%
|
Secured
|
%
|
Unsecured
|
%
|
|||||||||
Long-term
fixed rate loans
|
$
|
14,382,726
|
97%
|
$
|
423,703
|
3%
|
$
|
14,180,956
|
97%
|
$
|
482,384
|
3%
|
|||||
Long-term
variable rate loans
|
1,771,391
|
92%
|
146,936
|
8%
|
1,865,821
|
94%
|
127,713
|
6%
|
|||||||||
Loans
guaranteed by RUS
|
252,087
|
100%
|
-
|
-
|
255,903
|
100%
|
-
|
-
|
|||||||||
Short-term
loans
|
206,952
|
16%
|
1,074,108
|
84%
|
191,231
|
16%
|
1,024,199
|
84%
|
|||||||||
Total
loans
|
$
|
16,613,156
|
91%
|
$
|
1,644,747
|
9%
|
$
|
16,493,911
|
91%
|
$
|
1,634,296
|
9%
|
|||||
Total
by segment:
|
|||||||||||||||||
National
Rural
|
$
|
14,642,961
|
92%
|
$
|
1,359,755
|
8%
|
$
|
14,462,448
|
92%
|
$
|
1,342,842
|
8%
|
|||||
RTFC
|
1,564,352
|
87%
|
227,152
|
13%
|
1,630,079
|
88%
|
230,300
|
12%
|
|||||||||
NCSC
|
405,843
|
88%
|
57,840
|
12%
|
401,384
|
87%
|
61,154
|
13%
|
|||||||||
Total
loans
|
$
|
16,613,156
|
91%
|
$
|
1,644,747
|
9%
|
$
|
16,493,911
|
91%
|
$
|
1,634,296
|
9%
|
(3)
|
Loan
Securitizations
|
Six
months ended November 30,
|
Year
ended
|
||||||||||
(in
thousands)
|
2007
|
2006
|
May
31, 2007
|
||||||||
Beginning
balance
|
$
|
66,329
|
$
|
120,889
|
$
|
120,889
|
|||||
Results
of operations
|
3,816
|
5,991
|
9,758
|
||||||||
Net
cash provided by foreclosed assets
|
-
|
(56,831
|
)
|
(63,831
|
)
|
||||||
Sale
of foreclosed assets
|
-
|
(487
|
)
|
(487
|
)
|
||||||
Ending
balance of foreclosed assets
|
$
|
70,145
|
$
|
69,562
|
$
|
66,329
|
(in
thousands)
|
November
30, 2007
|
May
31, 2007
|
||||||
Short-term
debt:
|
||||||||
Commercial
paper sold through dealers, net of discounts
|
$
|
911,616
|
$
|
1,017,879
|
||||
Commercial
paper sold directly to members, at par
|
1,325,776
|
1,383,090
|
||||||
Commercial
paper sold directly to non-members, at par
|
144,879
|
133,087
|
||||||
Total
commercial paper
|
2,382,271
|
2,534,056
|
||||||
Daily
liquidity fund
|
298,694
|
250,563
|
||||||
Bank
bid notes
|
100,000
|
100,000
|
||||||
Subtotal
short-term debt
|
2,780,965
|
2,884,619
|
||||||
Long-term
debt maturing within one year:
|
||||||||
Medium-term
notes sold through dealers
|
355,605
|
133,801
|
||||||
Medium-term
notes sold to members
|
256,088
|
231,158
|
||||||
Secured
collateral trust bonds
|
2,596,890
|
999,560
|
||||||
Secured
notes payable
|
500,000
|
-
|
||||||
Subordinated
deferrable debt (1)
|
-
|
175,000
|
||||||
Unsecured
notes payable
|
3,040
|
2,985
|
||||||
Total
long-term debt maturing within one year
|
3,711,623
|
1,542,504
|
||||||
Total
short-term debt
|
$
|
6,492,588
|
$
|
4,427,123
|
||||
(1)
Redeemed in June 2007.
|
(Dollar
amounts in thousands)
|
November
30, 2007
|
May
31, 2007
|
Termination
Date
|
Facility
fee per annum (1)
|
||||||
364-day
agreement (2)
|
$
|
1,125,000
|
$
|
1,125,000
|
March
14, 2008
|
0.05
of 1%
|
||||
Five-year
agreement
|
1,125,000
|
1,125,000
|
March
16, 2012
|
0.06
of 1%
|
||||||
Five-year
agreement
|
1,025,000
|
1,025,000
|
March
22, 2011
|
0.06
of 1%
|
||||||
Total
|
$
|
3,275,000
|
$
|
3,275,000
|
·
|
guarantees
for members where the long-term unsecured debt of the member is rated
at
least BBB+ by Standard & Poor's Corporation or Baa1 by Moody's
Investors Service; and
|
·
|
the
payment of principal and interest by the member on the guaranteed
indebtedness if covered by insurance or reinsurance provided by an
insurer
having an insurance financial strength rating of AAA by Standard
&
Poor's Corporation or a financial strength rating of Aaa by Moody's
Investors Service.
|
Actual
|
|||||||
Requirement
|
November
30, 2007
|
May
31, 2007
|
|||||
Minimum
average adjusted TIER over the six most recent fiscal
quarters
|
1.025
|
1.13
|
1.09
|
||||
Minimum
adjusted TIER at fiscal year end (1)
|
1.05
|
1.12
|
1.12
|
||||
Maximum
ratio of senior debt to total equity
|
10.00
|
7.30
|
6.65
|
(in
thousands)
|
November
30,
2007
|
May
31,
2007
|
|||||
Unsecured
long-term debt:
|
|||||||
Medium-term
notes, sold through dealers
|
$
|
4,437,049
|
$
|
4,676,176
|
|||
Medium-term
notes, sold directly to members
|
96,611
|
76,464
|
|||||
Subtotal
|
4,533,660
|
4,752,640
|
|||||
Unamortized
discount
|
(6,466
|
)
|
(7,408
|
)
|
|||
Total
unsecured medium-term notes
|
4,527,194
|
4,745,232
|
|||||
Unsecured
notes payable
|
2,532,355
|
2,032,630
|
|||||
Total
unsecured long-term debt
|
7,059,549
|
6,777,862
|
|||||
Secured
long-term debt:
|
|||||||
Collateral
trust bonds
|
2,219,927
|
4,021,953
|
|||||
Unamortized
discount
|
(4,209
|
)
|
(4,596
|
)
|
|||
Total
secured collateral trust bonds
|
2,215,718
|
4,017,357
|
|||||
Secured
notes payable
|
-
|
500,000
|
|||||
Total
secured long-term debt
|
2,215,718
|
4,517,357
|
|||||
Total
long-term debt
|
$
|
9,275,267
|
$
|
11,295,219
|
(Dollar
amounts in thousands)
|
November
30,
2007
|
May
31,
2007
|
||||||
6.75%
due 2043 (1)
|
$
|
125,000
|
$
|
125,000
|
||||
6.10%
due 2044
(2)
|
88,201
|
88,201
|
||||||
5.95%
due 2045 (3)
|
98,239
|
98,239
|
||||||
Total
|
$
|
311,440
|
$
|
311,440
|
Notional
Amounts Outstanding
|
||||
(in
thousands)
|
November
30, 2007
|
May
31, 2007
|
||
Pay
fixed and receive variable
|
$
|
7,630,351
|
$
|
7,276,473
|
Pay
variable and receive fixed
|
5,756,440
|
5,256,440
|
||
Total
interest rate exchange agreements
|
$
|
13,386,791
|
$
|
12,532,913
|
Three
months ended
|
Six
months ended
|
|||||||
November
30,
|
November
30,
|
|||||||
(in
thousands)
|
2007
|
2006
|
2007
|
2006
|
Statement
of Operations Impact
|
||||||||||||||||
Agreements
that do not qualify for hedge accounting
|
||||||||||||||||
Derivative
cash settlements
|
$
|
11,507
|
$
|
13,822
|
$
|
19,836
|
$
|
26,002
|
||||||||
Derivative
forward value
|
(75,412
|
)
|
(72,223
|
)
|
(109,012
|
)
|
(126,548
|
)
|
||||||||
Total
loss on interest rate exchange agreements
|
$
|
(63,905
|
)
|
$
|
(58,401
|
)
|
$
|
(89,176
|
)
|
$
|
(100,546
|
)
|
||||
Comprehensive
Income Impact
|
||||||||||||||||
Agreements
that qualify for hedge accounting:
|
||||||||||||||||
Amortization
of transition adjustment
|
$
|
(256
|
)
|
$
|
(251
|
)
|
$
|
(331
|
)
|
$
|
(502
|
)
|
||||
Total
comprehensive loss
|
$
|
(256
|
)
|
$
|
(251
|
)
|
$
|
(331
|
)
|
$
|
(502
|
)
|
||||
Three
months ended
|
Six
months ended
|
|||||||
November
30,
|
November
30,
|
|||||||
(in
thousands)
|
2007
|
2006
|
2007
|
2006
|
Statement
of Operations Impact
|
||||||||||||||||
Agreements
that do not qualify for hedge accounting
|
||||||||||||||||
Derivative
cash settlements
|
$
|
-
|
$
|
2,671
|
$
|
-
|
$
|
5,746
|
||||||||
Derivative
forward value
|
-
|
18,984
|
-
|
9,958
|
||||||||||||
Total
gain on interest rate exchange agreements
|
$
|
-
|
$
|
21,655
|
$
|
-
|
$
|
15,704
|
||||||||
(in
thousands)
|
Notional
Amount
|
Required
Company Payment
|
Amount
Company Would Collect
|
Net
Total
|
||||||||||||
Rating
Level:
|
||||||||||||||||
Fall
to Baa1/BBB+
|
$
|
1,685,509
|
$
|
(16,470
|
)
|
$
|
49,590
|
$
|
33,120
|
|||||||
Fall
below Baa1/BBB+
|
7,705,622
|
(85,166
|
)
|
80,569
|
(4,597
|
)
|
||||||||||
Total
|
$
|
9,391,131
|
$
|
(101,636
|
)
|
$
|
130,159
|
$
|
28,523
|
|||||||
(in
thousands)
|
November
30,
2007
|
May
31,
2007
|
||||||
Membership
fees
|
$
|
996
|
$
|
997
|
||||
Education
fund
|
919
|
1,406
|
||||||
Members'
capital reserve
|
158,348
|
158,308
|
||||||
Allocated
net income
|
320,064
|
405,598
|
||||||
Unallocated
net income
|
55,717
|
(23
|
)
|
|||||
Total
members' equity
|
536,044
|
566,286
|
||||||
Prior
years cumulative derivative forward
|
||||||||
value
and foreign currency adjustments
|
131,551
|
225,849
|
||||||
Current
period derivative forward value (1)
|
(97,347
|
)
|
(79,744
|
)
|
||||
Current
period foreign currency adjustments
|
-
|
(14,554
|
)
|
|||||
Total
retained equity
|
570,248
|
697,837
|
||||||
Accumulated
other comprehensive income
|
11,873
|
12,204
|
||||||
Total
equity
|
$
|
582,121
|
$
|
710,041
|
For
the six months ended November 30,
|
Year
ended
|
|||||||||
(in
thousands)
|
2007
|
2006
|
May
31, 2007
|
|||||||
Beginning
balance
|
$
|
18,929
|
$
|
16,750
|
$
|
16,750
|
||||
Net
change in non-contingent liability
|
(948
|
)
|
1,575
|
3,879
|
||||||
(Recovery
of) provision for contingent guarantee losses
|
(3,300
|
)
|
400
|
(1,700
|
)
|
|||||
Ending
balance
|
$
|
14,681
|
$
|
18,725
|
$
|
18,929
|
||||
Liability
as a percentage of total guarantees
|
1.35
|
%
|
1.64
|
%
|
1.76
|
%
|
(in
thousands)
|
November
30, 2007
|
May
31, 2007
|
|||||
Total
by type:
|
|||||||
Long-term
tax exempt bonds (1)
|
$$
|
510,715
|
$$
|
526,185
|
|||
Indemnifications
of tax benefit transfers (2)
|
102,419
|
107,741
|
|||||
Letters
of credit (3)
|
395,296
|
365,766
|
|||||
Other
guarantees (4)
|
79,688
|
74,682
|
|||||
Total
|
$$
|
1,088,118
|
$$
|
1,074,374
|
|||
Total
by segment:
|
|||||||
National
Rural:
|
|||||||
Distribution
|
$$
|
218,000
|
$$
|
211,320
|
|||
Power
supply
|
774,264
|
797,009
|
|||||
Statewide
and associate
|
|
23,553
|
25,359
|
||||
National
Rural total
|
1,015,817
|
1,033,688
|
|||||
RTFC
|
260
|
-
|
|||||
NCSC
|
72,041
|
40,686
|
|||||
Total
|
$$
|
1,088,118
|
$$
|
1,074,374
|
(in
thousands)
|
November
30, 2007
|
May
31, 2007
|
November
30, 2006
|
||||
Non-performing
loans
|
$
|
503,198
|
$
|
501,864
|
$
|
539,117
|
|
Restructured
loans
|
590,768
|
603,305
|
615,832
|
||||
Total
|
$
|
1,093,966
|
$
|
1,105,169
|
$
|
1,154,949
|
Three
months ended
|
Six
months ended
|
||||||
November
30,
|
November
30,
|
||||||
(in
thousands)
|
2007
|
2006
|
2007
|
2006
|
Non-performing
loans
|
$
|
8,513
|
$
|
10,429
|
$
|
17,727
|
$
|
20,903
|
|||||||
Restructured
loans
|
8,970
|
9,972
|
18,311
|
19,812
|
|||||||||||
Total
|
$
|
17,483
|
$
|
20,401
|
$
|
36,038
|
$
|
40,715
|
|||||||
·
|
court
rulings,
|
·
|
changes
to collateral values, and
|
·
|
changes
to expected future cash flows both as to timing and
amount.
|
(14)
|
Segment
Information
|
(in
thousands)
|
National
Rural
|
RTFC
|
NCSC
|
Consolidated
|
|||||||||||
Statement
of Operations:
|
|||||||||||||||
Interest
income
|
$
|
465,790
|
$
|
47,366
|
$
|
18,085
|
$
|
531,241
|
|||||||
Interest
expense
|
(427,164
|
)
|
(44,551
|
)
|
(15,627
|
)
|
(487,342
|
)
|
|||||||
Net
interest income
|
38,626
|
2,815
|
2,458
|
43,899
|
|||||||||||
Recovery
of loan losses
|
14,301
|
-
|
-
|
14,301
|
|||||||||||
Net
interest income after recovery of loan losses
|
52,927
|
2,815
|
2,458
|
58,200
|
|||||||||||
Non-interest
income:
|
|||||||||||||||
Rental
and other income
|
389
|
-
|
314
|
703
|
|||||||||||
Derivative
cash settlements
|
19,679
|
-
|
157
|
19,836
|
|||||||||||
Results
of operations of foreclosed assets
|
3,816
|
-
|
-
|
3,816
|
|||||||||||
Total
non-interest income
|
23,884
|
-
|
471
|
24,355
|
|||||||||||
Non-interest
expense:
|
|||||||||||||||
General
and administrative expenses
|
(23,854
|
)
|
(2,379
|
)
|
(1,834
|
)
|
(28,067
|
)
|
|||||||
Recovery
of guarantee liability
|
3,300
|
-
|
-
|
3,300
|
|||||||||||
Derivative
forward value
|
(97,347
|
)
|
-
|
(11,665
|
)
|
(109,012
|
)
|
||||||||
Loss
on sale of loans
|
(518
|
)
|
-
|
-
|
(518
|
)
|
|||||||||
Total
non-interest expense
|
(118,419
|
)
|
(2,379
|
)
|
(13,499
|
)
|
(134,297
|
)
|
|||||||
(Loss)
income prior to income taxes and minority
|
|||||||||||||||
interest
|
(41,608
|
)
|
436
|
(10,570
|
)
|
(51,742
|
)
|
||||||||
Income
taxes
|
-
|
(1
|
)
|
4,012
|
4,011
|
||||||||||
Net
(loss) income per segment reporting
|
$
|
(41,608
|
)
|
$
|
435
|
$
|
(6,558
|
)
|
$
|
(47,731
|
)
|
||||
Reconciliation
of net loss:
|
|||||||||||||||
Net
loss per segment reporting
|
$
|
(47,731
|
)
|
||||||||||||
Minority
interest, net of income taxes
|
6,123
|
||||||||||||||
Net
loss per consolidated statement of operations
|
$
|
(41,608
|
)
|
||||||||||||
Assets:
|
|||||||||||||||
Total
loans
|
$
|
16,002,716
|
$
|
1,791,504
|
$
|
463,683
|
$
|
18,257,903
|
|||||||
Deferred
origination fees
|
4,020
|
-
|
-
|
4,020
|
|||||||||||
Less: Allowance
for loan losses
|
(530,313
|
)
|
-
|
(489
|
)
|
(530,802
|
)
|
||||||||
Loans
to members, net
|
15,476,423
|
1,791,504
|
463,194
|
17,731,121
|
|||||||||||
Other
assets
|
626,539
|
194,850
|
54,385
|
875,774
|
|||||||||||
Total
assets
|
$
|
16,102,962
|
$
|
1,986,354
|
$
|
517,579
|
$
|
18,606,895
|
(in
thousands)
|
National
Rural
|
RTFC
|
NCSC
|
Consolidated
|
|||||||||||
Statement
of Operations:
|
|||||||||||||||
Interest
income
|
$
|
454,239
|
$
|
55,402
|
$
|
15,292
|
$
|
524,933
|
|||||||
Interest
expense
|
(438,958
|
)
|
(52,054
|
)
|
(13,583
|
)
|
(504,595
|
)
|
|||||||
Net
interest income
|
15,281
|
3,348
|
1,709
|
20,338
|
|||||||||||
Provision
for loan losses
|
-
|
-
|
-
|
-
|
|||||||||||
Net
interest income after provision for loan losses
|
15,281
|
3,348
|
1,709
|
20,338
|
|||||||||||
Non-interest
income:
|
|||||||||||||||
Rental
and other income
|
307
|
-
|
318
|
625
|
|||||||||||
Derivative
cash settlements
|
31,556
|
-
|
192
|
31,748
|
|||||||||||
Results
of operations of foreclosed assets
|
5,991
|
-
|
-
|
5,991
|
|||||||||||
Total
non-interest income
|
37,854
|
-
|
510
|
38,364
|
|||||||||||
Non-interest
expense:
|
|||||||||||||||
General
and administrative expenses
|
(21,260
|
)
|
(2,540
|
)
|
(1,705
|
)
|
(25,505
|
)
|
|||||||
Provision
for guarantee liability
|
(400
|
)
|
-
|
-
|
(400
|
)
|
|||||||||
Derivative
forward value
|
(113,390
|
)
|
-
|
(3,200
|
)
|
(116,590
|
)
|
||||||||
Foreign
currency adjustments
|
(17,299
|
)
|
-
|
-
|
(17,299
|
)
|
|||||||||
Total
non-interest expense
|
(152,349
|
)
|
(2,540
|
)
|
(4,905
|
)
|
(159,794
|
)
|
|||||||
(Loss)
income prior to income taxes and minority
|
|||||||||||||||
interest
|
(99,214
|
)
|
808
|
(2,686
|
)
|
(101,092
|
)
|
||||||||
Income
taxes
|
-
|
180
|
1,020
|
1,200
|
|||||||||||
Net
(loss) income per segment reporting
|
$
|
(99,214
|
)
|
$
|
988
|
$
|
(1,666
|
)
|
$
|
(99,892
|
)
|
||||
Reconciliation
of net loss:
|
|||||||||||||||
Net
loss per segment reporting
|
$
|
(99,892
|
)
|
||||||||||||
Minority
interest
|
678
|
||||||||||||||
Net
loss per consolidated statement of operations
|
$
|
(99,214
|
)
|
||||||||||||
Assets:
|
|||||||||||||||
Loans
to members
|
$
|
15,738,645
|
$
|
2,016,915
|
$
|
401,946
|
$
|
18,157,506
|
|||||||
Deferred
origination fees
|
3,249
|
-
|
-
|
3,249
|
|||||||||||
Less: Allowance
for loan losses
|
(610,725
|
)
|
-
|
(633
|
)
|
(611,358
|
)
|
||||||||
Loans
to members, net
|
15,131,169
|
2,016,915
|
401,313
|
17,549,397
|
|||||||||||
Other
assets
|
840,198
|
215,451
|
33,300
|
1,088,949
|
|||||||||||
Total
assets
|
$
|
15,971,367
|
$
|
2,232,366
|
$
|
434,613
|
$
|
18,638,346
|
(in
thousands)
|
National
Rural
|
RTFC
|
NCSC
|
Consolidated
|
|||||||||||
Statement
of Operations:
|
|||||||||||||||
Interest
income
|
$
|
230,984
|
$
|
23,337
|
$
|
8,966
|
$
|
263,287
|
|||||||
Interest
expense
|
(210,403
|
)
|
(21,921
|
)
|
(7,693
|
)
|
(240,017
|
)
|
|||||||
Net
interest income
|
20,581
|
1,416
|
1,273
|
23,270
|
|||||||||||
Recovery
of loan losses
|
14,301
|
-
|
-
|
14,301
|
|||||||||||
Net
interest income after recovery of loan losses
|
34,882
|
1,416
|
1,273
|
37,571
|
|||||||||||
Non-interest
income:
|
|||||||||||||||
Rental
and other income
|
200
|
-
|
152
|
352
|
|||||||||||
Derivative
cash settlements
|
11,514
|
-
|
(7
|
)
|
11,507
|
||||||||||
Results
of operations of foreclosed assets
|
1,856
|
-
|
-
|
1,856
|
|||||||||||
Total
non-interest income
|
13,570
|
-
|
145
|
13,715
|
|||||||||||
Non-interest
expense:
|
|||||||||||||||
General and administrative expenses
|
(12,593
|
)
|
(1,200
|
)
|
(964
|
)
|
(14,757
|
)
|
|||||||
Provision
for guarantee losses
|
1,200
|
-
|
-
|
1,200
|
|||||||||||
Derivative forward value
|
(67,285
|
)
|
-
|
(8,127
|
)
|
(75,412
|
)
|
||||||||
Total
non-interest expense
|
(78,678
|
)
|
(1,200
|
)
|
(9,091
|
)
|
(88,969
|
)
|
|||||||
(Loss)
income prior to income taxes and minority
interest
|
(30,226
|
)
|
216
|
(7,673
|
)
|
(37,683
|
)
|
||||||||
Income
taxes
|
-
|
-
|
2,912
|
2,912
|
|||||||||||
Net
(loss) income per segment reporting
|
$
|
(30,226
|
)
|
$
|
216
|
$
|
(4,761
|
)
|
$
|
(34,771
|
)
|
||||
Reconciliation
of net loss:
|
|||||||||||||||
Net
loss per segment reporting
|
$
|
(34,771
|
)
|
||||||||||||
Minority
interest
|
4,545
|
||||||||||||||
Net
loss per consolidated statement of operations
|
$
|
(30,226
|
)
|
(in
thousands)
|
National
Rural
|
RTFC
|
NCSC
|
Consolidated
|
|||||||||||
Statement
of Operations:
|
|||||||||||||||
Interest
income
|
$
|
225,247
|
$
|
27,289
|
$
|
7,708
|
$
|
260,244
|
|||||||
Interest
expense
|
(216,214
|
)
|
(25,546
|
)
|
(6,831
|
)
|
(248,591
|
)
|
|||||||
Net
interest income
|
9,033
|
1,743
|
877
|
11,653
|
|||||||||||
Provision
for loan losses
|
-
|
-
|
-
|
-
|
|||||||||||
Net
interest income after provision for loan losses
|
9,033
|
1,743
|
877
|
11,653
|
|||||||||||
Non-interest
income:
|
|||||||||||||||
Rental
and other income
|
154
|
-
|
154
|
308
|
|||||||||||
Derivative
cash settlements
|
16,404
|
-
|
89
|
16,493
|
|||||||||||
Results
of operations of foreclosed assets
|
2,989
|
-
|
-
|
2,989
|
|||||||||||
Total
non-interest income
|
19,547
|
-
|
243
|
19,790
|
|||||||||||
Non-interest
expense:
|
|||||||||||||||
General
and administrative expenses
|
(10,614
|
)
|
(1,214
|
)
|
(949
|
)
|
(12,777
|
)
|
|||||||
Provision
for guarantee liability
|
(1,800
|
)
|
-
|
-
|
(1,800
|
)
|
|||||||||
Derivative
forward value
|
(51,741
|
)
|
-
|
(1,498
|
)
|
(53,239
|
)
|
||||||||
Foreign
currency adjustments
|
(20,620
|
)
|
-
|
-
|
(20,620
|
)
|
|||||||||
Total
non-interest expense
|
(84,775
|
)
|
(1,214
|
)
|
(2,447
|
)
|
(88,436
|
)
|
|||||||
(Loss)
income prior to income taxes and minority
interest
|
(56,195
|
)
|
529
|
(1,327
|
)
|
(56,993
|
)
|
||||||||
Income
taxes
|
-
|
(18
|
)
|
504
|
486
|
||||||||||
Net
(loss) income per segment reporting
|
$
|
(56,195
|
)
|
$
|
511
|
$
|
(823
|
)
|
$
|
(56,507
|
)
|
||||
Reconciliation
of net loss:
|
|||||||||||||||
Net
loss per segment reporting
|
$
|
(56,507
|
)
|
||||||||||||
Minority
interest
|
312
|
||||||||||||||
Net
loss per consolidated statement of operations
|
$
|
(56,195
|
)
|
(15)
|
Subsequent
Event
|
For
the six months ended
November
30,
|
Increase/
|
|||||||||||
(Dollar
amounts in millions)
|
2007
|
2006
|
(Decrease)
|
|||||||||
Interest
income
|
$
|
531
|
$
|
525
|
$
|
6
|
||||||
Interest
expense
|
(487
|
)
|
(505
|
)
|
18
|
|||||||
Net
interest income
|
44
|
20
|
24
|
|||||||||
Recovery
of loan losses
|
14
|
-
|
14
|
|||||||||
Net
interest income after recovery of loan losses
|
58
|
20
|
38
|
|||||||||
Non-interest
income:
|
||||||||||||
Rental
and other income
|
1
|
1
|
-
|
|||||||||
Derivative
cash settlements
|
20
|
32
|
(12
|
)
|
||||||||
Results
of operations of foreclosed assets
|
4
|
6
|
(2
|
)
|
||||||||
Total
non-interest income
|
25
|
39
|
(14
|
)
|
||||||||
Non-interest
expense:
|
||||||||||||
Salaries
and employee benefits
|
(18
|
)
|
(17
|
)
|
(1
|
)
|
||||||
Other
general and administrative expenses
|
(10
|
)
|
(9
|
)
|
(1
|
)
|
||||||
Recovery
of guarantee liability
|
3
|
-
|
3
|
|||||||||
Derivative
forward value
|
(109
|
)
|
(117
|
)
|
8
|
|||||||
Foreign
currency adjustments
|
-
|
(17
|
)
|
17
|
||||||||
Loss
on sale of loans
|
(1
|
)
|
-
|
(1
|
)
|
|||||||
Total
non-interest expense
|
(135
|
)
|
(160
|
)
|
25
|
|||||||
Loss
prior to income taxes and minority interest
|
(52
|
)
|
(101
|
)
|
49
|
|||||||
Income
taxes
|
4
|
1
|
3
|
|||||||||
Minority
interest, net of income taxes
|
6
|
1
|
5
|
|||||||||
Net
loss
|
$
|
(42
|
)
|
$
|
(99
|
)
|
$
|
57
|
||||
TIER
(1)
|
-
|
-
|
||||||||||
Adjusted
TIER (2)
|
1.13
|
1.07
|
For
the six months ended
November
30,
|
Increase/
|
||||||||||||
2007
|
2006
|
(Decrease)
|
|||||||||||
Interest
income
|
5.85
|
%
|
5.72
|
%
|
0.13
|
%
|
|||||||
Interest
expense
|
(5.37
|
)%
|
(5.50
|
)%
|
0.13
|
%
|
|||||||
Net
interest income
|
0.48
|
%
|
0.22
|
%
|
0.26
|
%
|
|||||||
Recovery
of loan losses
|
0.16
|
%
|
-
|
0.16
|
%
|
||||||||
Net
interest income after recovery of loan losses
|
0.64
|
%
|
0.22
|
%
|
0.42
|
%
|
|||||||
Non-interest
income:
|
|||||||||||||
Rental
and other income
|
0.01
|
%
|
0.01
|
%
|
-
|
||||||||
Derivative
cash settlements
|
0.22
|
%
|
0.35
|
%
|
(0.13
|
)%
|
|||||||
Results
of operations of foreclosed assets
|
0.05
|
%
|
0.07
|
%
|
(0.02
|
)%
|
|||||||
Total
non-interest income
|
0.28
|
%
|
0.43
|
%
|
(0.15
|
)%
|
|||||||
-
|
|||||||||||||
Non-interest
expense:
|
|||||||||||||
Salaries
and employee benefits
|
(0.20
|
)%
|
(0.19
|
)%
|
(0.01
|
)%
|
|||||||
Other
general and administrative expenses
|
(0.11
|
)%
|
(0.10
|
)%
|
(0.01
|
)%
|
|||||||
Recovery
of guarantee liability
|
0.03
|
%
|
-
|
0.03
|
%
|
||||||||
Derivative
forward value
|
(1.20
|
)%
|
(1.27
|
)%
|
0.07
|
%
|
|||||||
Foreign
currency adjustments
|
-
|
(0.19
|
)%
|
0.19
|
%
|
||||||||
Loss
on sale of loans
|
(0.01
|
)%
|
-
|
(0.01
|
)%
|
||||||||
Total
non-interest expense
|
(1.49
|
)%
|
(1.75
|
)%
|
0.26
|
%
|
|||||||
Loss
prior to income taxes and minority interest
|
(0.57
|
)%
|
(1.10
|
)%
|
0.53
|
%
|
|||||||
Income
taxes
|
0.04
|
%
|
0.01
|
%
|
0.03
|
%
|
|||||||
Minority
interest, net of income taxes
|
0.07
|
%
|
0.01
|
%
|
0.06
|
%
|
|||||||
Net
loss
|
(0.46
|
)%
|
(1.08
|
)%
|
0.62
|
%
|
|||||||
Adjusted
net interest income (1)
|
0.70
|
%
|
0.57
|
%
|
0.13
|
%
|
|||||||
Adjusted
loss prior to income taxes and minority interest (2)
|
0.63
|
%
|
0.36
|
%
|
0.27
|
%
|
For
the six months ended November 30,
|
|||||||||||||||||||||||||
2007
|
2006
|
Change
due to
|
|||||||||||||||||||||||
Average
Loan
Balance
|
Income
/ (Cost)
|
Rate
|
Average
Loan
Balance
|
Income
/ (Cost)
|
Rate
|
Volume
(1)
|
Rate
(2)
|
Total
|
|||||||||||||||||
Interest
income
|
|||||||||||||||||||||||||
National
Rural
|
$
|
15,818
|
$
|
466
|
5.87
|
%
|
$
|
15,870
|
$
|
454
|
5.71
|
%
|
$
|
(1
|
)
|
$
|
13
|
$
|
12
|
||||||
RTFC
|
1,831
|
47
|
5.16
|
%
|
2,044
|
55
|
5.41
|
%
|
(6
|
)
|
(2
|
)
|
(8
|
)
|
|||||||||||
NCSC
|
462
|
18
|
7.80
|
%
|
398
|
16
|
7.66
|
%
|
2
|
-
|
2
|
||||||||||||||
Total
|
$
|
18,111
|
$
|
531
|
5.85
|
%
|
$
|
18,312
|
$
|
525
|
5.72
|
%
|
$
|
(5
|
)
|
$
|
11
|
$
|
6
|
||||||
Interest
expense
|
|||||||||||||||||||||||||
National
Rural
|
$
|
15,818
|
$
|
(427
|
)
|
(5.39
|
)%
|
$
|
15,870
|
$
|
(439
|
)
|
(5.52
|
)%
|
$
|
1
|
$
|
11
|
$
|
12
|
|||||
RTFC
|
1,831
|
(44
|
)
|
(4.85
|
)%
|
2,044
|
(52
|
)
|
(5.08
|
)%
|
6
|
2
|
8
|
||||||||||||
NCSC
|
462
|
(16
|
)
|
(6.74
|
)%
|
398
|
(14
|
)
|
(6.81
|
)%
|
(2
|
)
|
-
|
(2
|
)
|
||||||||||
Total
|
$
|
18,111
|
$
|
(487
|
)
|
(5.37
|
)%
|
$
|
18,312
|
$
|
(505
|
)
|
(5.50
|
)%
|
$
|
5
|
$
|
13
|
$
|
18
|
|||||
Net
interest income
|
|||||||||||||||||||||||||
National
Rural
|
$
|
15,818
|
$
|
39
|
0.48
|
%
|
$
|
15,870
|
$
|
15
|
0.19
|
%
|
$
|
-
|
$
|
24
|
$
|
24
|
|||||||
RTFC
|
1,831
|
3
|
0.31
|
%
|
2,044
|
3
|
0.33
|
%
|
-
|
-
|
-
|
||||||||||||||
NCSC
|
462
|
2
|
1.06
|
%
|
398
|
2
|
0.85
|
%
|
-
|
-
|
-
|
||||||||||||||
Total
|
$
|
18,111
|
$
|
44
|
0.48
|
%
|
$
|
18,312
|
$
|
20
|
0.22
|
%
|
$
|
-
|
$
|
24
|
$
|
24
|
|||||||
Derivative
cash settlements (3)
|
|||||||||||||||||||||||||
National
Rural
|
$
|
12,786
|
$
|
20
|
0.31
|
%
|
$
|
12,635
|
$
|
32
|
0.50
|
%
|
$
|
-
|
$
|
(12
|
)
|
$
|
(12
|
)
|
|||||
NCSC
|
208
|
-
|
-
|
95
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||
Total
|
$
|
12,994
|
$
|
20
|
0.31
|
%
|
$
|
12,730
|
$
|
32
|
0.50
|
%
|
$
|
-
|
$
|
(12
|
)
|
$
|
(12
|
)
|
|||||
Adjusted
interest expense (4)
|
|||||||||||||||||||||||||
Total
|
$
|
18,111
|
$
|
(467
|
)
|
(5.15
|
)%
|
$
|
18,312
|
$
|
(473
|
)
|
(5.15
|
)%
|
$
|
5
|
$
|
1
|
$
|
6
|
For
the six months ended November 30,
|
|||||||||||||||
2007
|
2006
|
||||||||||||||
(Dollar
amounts in millions)
|
Amount
|
Rate
|
Amount
|
Rate
|
Increase/
(Decrease)
|
||||||||||
Interest
on long-term fixed rate loans (1)
|
$
|
430
|
$
|
412
|
$
|
18
|
|||||||||
Interest
on long-term variable rate loans (1)
|
47
|
62
|
(15
|
)
|
|||||||||||
Interest
on short-term loans (1)
|
39
|
36
|
3
|
||||||||||||
Total
interest income on loans
|
516
|
5.69
|
%
|
510
|
5.56
|
%
|
6
|
||||||||
Interest
on investments (2)
|
5
|
0.06
|
%
|
3
|
0.03
|
%
|
2
|
||||||||
Conversion
fees (3)
|
3
|
0.03
|
%
|
5
|
0.06
|
%
|
(2
|
)
|
|||||||
Make-whole
and prepayment fees (4)
|
2
|
0.02
|
%
|
1
|
0.01
|
%
|
1
|
||||||||
Commitment
and guarantee fees (5)
|
3
|
0.03
|
%
|
5
|
0.05
|
%
|
(2
|
)
|
|||||||
Other
fees
|
2
|
0.02
|
%
|
1
|
0.01
|
%
|
1
|
||||||||
Total
interest
income
|
$
|
531
|
5.85
|
%
|
$
|
525
|
5.72
|
%
|
$
|
6
|
For
the six months ended November 30,
|
||||||||||||||||
2007
|
2006
|
|||||||||||||||
(Dollar
amounts in millions)
|
Amount
|
Rate
|
Amount
|
Rate
|
Increase/
(Decrease)
|
|||||||||||
Interest
expense - commercial paper and bid notes (1)
|
$
|
71
|
$
|
96
|
$
|
(25
|
)
|
|||||||||
Interest
expense - medium-term notes (1)
|
167
|
188
|
(21
|
)
|
||||||||||||
Interest
expense - collateral trust bonds (1)
|
129
|
101
|
28
|
|||||||||||||
Interest
expense - subordinated deferrable debt (1)
|
10
|
17
|
(7
|
)
|
||||||||||||
Interest
expense - subordinated certificates (1)
|
24
|
24
|
-
|
|||||||||||||
Interest
expense - long-term private debt (1)
|
66
|
60
|
6
|
|||||||||||||
Total
interest expense on debt
|
467
|
5.14
|
%
|
486
|
5.29
|
%
|
(19
|
)
|
||||||||
Debt
issuance costs (2)
|
5
|
0.06
|
%
|
4
|
0.05
|
%
|
1
|
|||||||||
Commitment
and guarantee fees (3)
|
8
|
0.09
|
%
|
8
|
0.09
|
%
|
-
|
|||||||||
Loss
on extinguishment of debt (4)
|
6
|
0.07
|
%
|
5
|
0.05
|
%
|
1
|
|||||||||
Other
fees
|
1
|
0.01
|
%
|
2
|
0.02
|
%
|
(1
|
)
|
||||||||
Total
interest expense
|
$
|
487
|
5.37
|
%
|
$
|
505
|
5.50
|
%
|
$
|
(18
|
)
|
For
the three months ended
November
30,
|
Increase/
|
|||||||||||
(Dollar
amounts in millions)
|
2007
|
2006
|
(Decrease)
|
|||||||||
Interest
income
|
$
|
263
|
$
|
260
|
$
|
3
|
||||||
Interest
expense
|
(240
|
)
|
(249
|
)
|
9
|
|||||||
Net
interest income
|
23
|
11
|
12
|
|||||||||
Recovery
of loan losses
|
14
|
-
|
14
|
|||||||||
Net
interest income after recovery of loan losses
|
37
|
11
|
26
|
|||||||||
Non-interest
income:
|
||||||||||||
Rental
and other income
|
1
|
1
|
-
|
|||||||||
Derivative
cash settlements
|
12
|
17
|
(5
|
)
|
||||||||
Results
of operations of foreclosed assets
|
2
|
3
|
(1
|
)
|
||||||||
Total
non-interest income
|
15
|
21
|
(6
|
)
|
||||||||
Non-interest
expense:
|
||||||||||||
Salaries
and employee benefits
|
(9
|
)
|
(8
|
)
|
(1
|
)
|
||||||
Other
general and administrative expenses
|
(6
|
)
|
(5
|
)
|
(1
|
)
|
||||||
Recovery
of (provision for) guarantee liability
|
1
|
(2
|
)
|
3
|
||||||||
Derivative
forward value
|
(76
|
)
|
(54
|
)
|
(22
|
)
|
||||||
Foreign
currency adjustments
|
-
|
(20
|
)
|
20
|
||||||||
Total
non-interest expense
|
(90
|
)
|
(89
|
)
|
(1)
|
|||||||
Loss
prior to income taxes and minority interest
|
(38
|
)
|
(57
|
)
|
19
|
|||||||
Income
taxes
|
3
|
-
|
3
|
|||||||||
Minority
interest, net of income taxes
|
5
|
1
|
4
|
|||||||||
Net
loss
|
$
|
(30
|
)
|
$
|
(56
|
)
|
$
|
26
|
||||
TIER
(1)
|
-
|
-
|
||||||||||
Adjusted
TIER (2)
|
1.18
|
1.07
|
For
the three months ended
November
30,
|
Increase/
|
|||||||||||||
2007
|
2006
|
(Decrease)
|
||||||||||||
Interest
income
|
5.83
|
%
|
5.71
|
%
|
0.12
|
%
|
||||||||
Interest
expense
|
(5.32
|
)%
|
(5.47
|
)%
|
0.15
|
%
|
||||||||
Net
interest income
|
0.51
|
%
|
0.24
|
%
|
0.27
|
%
|
||||||||
Recovery
of loan losses
|
0.31
|
%
|
-
|
0.31
|
%
|
|||||||||
Net
interest income after recovery of loan losses
|
0.82
|
%
|
0.24
|
%
|
0.58
|
%
|
||||||||
Non-interest
income:
|
||||||||||||||
Rental
and other income
|
0.02
|
%
|
0.02
|
%
|
-
|
|||||||||
Derivative
cash settlements
|
0.27
|
%
|
0.37
|
%
|
(0.10
|
)%
|
||||||||
Results
of operations of foreclosed assets
|
0.04
|
%
|
0.07
|
%
|
(0.03
|
)%
|
||||||||
Total
non-interest income
|
0.33
|
%
|
0.46
|
%
|
(0.13
|
)%
|
||||||||
Non-interest
expense:
|
||||||||||||||
Salaries
and employee benefits
|
(0.20
|
)%
|
(0.18
|
)%
|
(0.02
|
)%
|
||||||||
Other
general and administrative expenses
|
(0.13
|
)%
|
(0.11
|
)%
|
(0.02
|
)%
|
||||||||
Recovery
of (provision for) guarantee liability
|
0.02
|
%
|
(0.04
|
)%
|
0.06
|
%
|
||||||||
Derivative
forward value
|
(1.69
|
)%
|
(1.19
|
)%
|
(0.50
|
)%
|
||||||||
Foreign
currency adjustments
|
-
|
(0.44
|
)%
|
0.44
|
%
|
|||||||||
Total
non-interest expense
|
(2.00
|
)%
|
(1.96
|
)%
|
(0.04
|
)%
|
||||||||
Loss
prior to income taxes and minority interest
|
(0.85
|
)%
|
(1.26
|
)%
|
0.41
|
%
|
||||||||
Income
taxes
|
0.07
|
%
|
-
|
0.07
|
%
|
|||||||||
Minority
interest, net of income taxes
|
0.11
|
%
|
0.02
|
%
|
0.09
|
%
|
||||||||
Net
loss
|
(0.67
|
)%
|
(1.24
|
)%
|
0.57
|
%
|
||||||||
Adjusted
net interest income (1)
|
0.78
|
%
|
0.61
|
%
|
0.17
|
%
|
||||||||
Adjusted
income prior to income taxes and minority interest (2)
|
0.84
|
%
|
0.37
|
%
|
0.47
|
%
|
Volume
Rate Variance Table
|
|||||||||||||||||||||||||
(Dollar
amounts in millions)
|
|||||||||||||||||||||||||
For
the three months ended November 30,
|
|||||||||||||||||||||||||
2007
|
2006
|
Change
due to
|
|||||||||||||||||||||||
Average
Loan
Balance
|
Income
/ (Cost)
|
Rate
|
Average
Loan Balance
|
Income
/ (Cost)
|
Rate
|
Volume
(1)
|
Rate
(2)
|
Total
|
|||||||||||||||||
Interest
income
|
|||||||||||||||||||||||||
National
Rural
|
$
|
15,816
|
$
|
231
|
5.86
|
%
|
$
|
15,845
|
$
|
225
|
5.70
|
%
|
$
|
-
|
$
|
6
|
$
|
6
|
|||||||
RTFC
|
1,806
|
23
|
5.18
|
%
|
2,023
|
27
|
5.41
|
%
|
(3
|
)
|
(1
|
)
|
(4
|
)
|
|||||||||||
NCSC
|
463
|
9
|
7.77
|
%
|
399
|
8
|
7.75
|
%
|
1
|
-
|
1
|
||||||||||||||
Total
|
$
|
18,085
|
$
|
263
|
5.83
|
%
|
$
|
18,267
|
$
|
260
|
5.71
|
%
|
$
|
(2
|
)
|
$
|
5
|
$
|
3
|
||||||
Interest
expense
|
|||||||||||||||||||||||||
National
Rural
|
$
|
15,816
|
$
|
(210
|
)
|
(5.34
|
)%
|
$
|
15,845
|
$
|
(217
|
)
|
(5.47
|
)%
|
$
|
1
|
$
|
6
|
$
|
7
|
|||||
RTFC
|
1,806
|
(22
|
)
|
(4.87
|
)%
|
2,023
|
(25
|
)
|
(5.06
|
)%
|
3
|
-
|
3
|
||||||||||||
NCSC
|
463
|
(8
|
)
|
(6.67
|
)%
|
399
|
(7
|
)
|
(6.87
|
)%
|
(1
|
)
|
-
|
(1
|
)
|
||||||||||
Total
|
$
|
18,085
|
$
|
(240
|
)
|
(5.32
|
)%
|
$
|
18,267
|
$
|
(249
|
)
|
(5.47
|
)%
|
$
|
3
|
$
|
6
|
$
|
9
|
|||||
Net
interest income
|
|||||||||||||||||||||||||
National
Rural
|
$
|
15,816
|
$
|
21
|
0.52
|
%
|
$
|
15,845
|
$
|
8
|
0.23
|
%
|
$
|
2
|
$
|
11
|
$
|
13
|
|||||||
RTFC
|
1,806
|
1
|
0.31
|
%
|
2,023
|
2
|
0.35
|
%
|
(1
|
)
|
-
|
(1
|
)
|
||||||||||||
NCSC
|
463
|
1
|
1.10
|
%
|
399
|
1
|
0.88
|
%
|
-
|
-
|
-
|
||||||||||||||
Total
|
$
|
18,085
|
$
|
23
|
0.51
|
%
|
$
|
18,267
|
$
|
11
|
0.24
|
%
|
$
|
1
|
$
|
11
|
$
|
12
|
|||||||
Derivative
cash settlements (3)
|
|||||||||||||||||||||||||
National
Rural
|
$
|
13,152
|
$
|
12
|
0.35
|
%
|
$
|
12,828
|
$
|
17
|
0.51
|
%
|
$
|
-
|
$
|
(5
|
)
|
$
|
(5
|
)
|
|||||
NCSC
|
205
|
-
|
-
|
93
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||
Total
|
$
|
13,357
|
$
|
12
|
0.35
|
%
|
$
|
12,921
|
$
|
17
|
0.51
|
%
|
$
|
-
|
$
|
(5
|
)
|
$
|
(5
|
)
|
|||||
Adjusted
interest expense (4)
|
|||||||||||||||||||||||||
Total
|
$
|
18,085
|
$
|
(228
|
)
|
(5.05
|
)%
|
$
|
18,267
|
$
|
(232
|
)
|
(5.10
|
)%
|
$
|
3
|
$
|
1
|
$
|
4
|
For
the three months ended November 30,
|
||||||||||||||||||
2007
|
2006
|
|||||||||||||||||
(Dollar
amounts in millions)
|
Amount
|
Rate
|
Amount
|
Rate
|
Increase/
(Decrease)
|
|||||||||||||
Interest
on long-term fixed rate loans (1)
|
$
|
215
|
$
|
206
|
$
|
9
|
||||||||||||
Interest
on long-term variable rate loans (1)
|
23
|
31
|
(8
|
)
|
||||||||||||||
Interest
on short-term loans (1)
|
19
|
18
|
1
|
|||||||||||||||
Total
interest income on loans
|
257
|
5.71
|
%
|
255
|
5.60
|
%
|
2
|
|||||||||||
Interest
on investments (2)
|
2
|
0.04
|
%
|
1
|
0.02
|
%
|
1
|
|||||||||||
Conversion
fees (3)
|
2
|
0.04
|
%
|
3
|
0.07
|
%
|
(1
|
)
|
||||||||||
Commitment
and guarantee fees (4)
|
1
|
0.02
|
%
|
1
|
0.02
|
%
|
-
|
|||||||||||
Other
fees
|
1
|
0.02
|
%
|
-
|
-
|
1
|
||||||||||||
Total
interest
income
|
$
|
263
|
5.83
|
%
|
$
|
260
|
5.71
|
%
|
$
|
3
|
For
the three months ended November 30,
|
||||||||||||||||||
2007
|
2006
|
|||||||||||||||||
(Dollar
amounts in millions)
|
Amount
|
Rate
|
Amount
|
Rate
|
Increase/
(Decrease)
|
|||||||||||||
Interest
expense - commercial paper and bid notes (1)
|
$
|
33
|
$
|
49
|
$
|
(16
|
)
|
|||||||||||
Interest
expense - medium-term notes (1)
|
84
|
93
|
(9
|
)
|
||||||||||||||
Interest
expense - collateral trust bonds (1)
|
63
|
50
|
13
|
|||||||||||||||
Interest
expense - subordinated deferrable debt (1)
|
5
|
8
|
(3
|
)
|
||||||||||||||
Interest
expense - subordinated certificates (1)
|
12
|
12
|
-
|
|||||||||||||||
Interest
expense - long-term private debt (1)
|
35
|
30
|
5
|
|||||||||||||||
Total
interest expense on debt
|
232
|
5.14
|
%
|
242
|
5.31
|
%
|
(10
|
)
|
||||||||||
Debt
issuance costs (2)
|
3
|
0.07
|
%
|
2
|
0.05
|
%
|
1
|
|||||||||||
Commitment
and guarantee fees (3)
|
5
|
0.11
|
%
|
4
|
0.09
|
%
|
1
|
|||||||||||
Other
fees
|
-
|
-
|
1
|
0.02
|
%
|
(1
|
)
|
|||||||||||
Total
interest expense
|
$
|
240
|
5.32
|
%
|
$
|
249
|
5.47
|
%
|
$
|
(9
|
)
|
Three
months ended
November
30,
|
Six
months ended
November
30,
|
||||||||||||||
(Dollar
amounts in thousands)
|
2007
|
2006
|
2007
|
2006
|
|||||||||||
Loss
prior to cumulative effect of
|
|||||||||||||||
change
in accounting principle
|
$
|
(30,226
|
)
|
$
|
(56,195
|
)
|
$
|
(41,608
|
)
|
$
|
(99,214
|
)
|
|||
Add:
fixed charges
|
240,017
|
248,591
|
487,342
|
504,595
|
|||||||||||
Earnings
available for fixed charges
|
$
|
209,791
|
$
|
192,396
|
$
|
445,734
|
$
|
405,381
|
|||||||
Total
fixed charges:
|
|||||||||||||||
Interest
on all debt (including amortization of
|
|||||||||||||||
discount
and issuance costs)
|
$
|
240,017
|
$
|
248,591
|
$
|
487,342
|
$
|
504,595
|
|||||||
Ratio
of earnings to fixed charges (1)
|
-
|
-
|
-
|
-
|
Increase/
|
|||||||||||||||||||||
(Dollar
amounts in millions)
|
November
30, 2007
|
May
31, 2007
|
(Decrease)
|
||||||||||||||||||
Loans
by
type:
|
|||||||||||||||||||||
Long-term
loans (1):
|
|||||||||||||||||||||
Long-term
fixed
rate loans
|
$
|
15,022
|
82%
|
$
|
14,881
|
82%
|
$
|
141
|
|||||||||||||
Long-term
variable rate loans
|
1,955
|
11%
|
2,032
|
11%
|
(77
|
)
|
|||||||||||||||
Total
long-term loans
|
16,977
|
93%
|
16,913
|
93%
|
64
|
||||||||||||||||
Short-term
loans (2)
|
1,281
|
7%
|
1,215
|
7%
|
66
|
||||||||||||||||
Total
loans
|
$
|
18,258
|
100%
|
$
|
18,128
|
100%
|
$
|
130
|
|||||||||||||
National
Rural:
|
|||||||||||||||||||||
Distribution
|
$
|
12,881
|
71%
|
$
|
12,828
|
71%
|
$
|
53
|
|||||||||||||
Power
supply
|
3,007
|
16%
|
2,858
|
16%
|
149
|
||||||||||||||||
Statewide
and associate
|
114
|
1%
|
119
|
1%
|
(5
|
)
|
|||||||||||||||
National
Rural total
|
16,002
|
88%
|
15,805
|
88%
|
197
|
||||||||||||||||
RTFC
|
1,792
|
10%
|
1,860
|
10%
|
(68
|
)
|
|||||||||||||||
NCSC
|
464
|
2%
|
463
|
2%
|
1
|
||||||||||||||||
Total
loans
|
$
|
18,258
|
100%
|
$
|
18,128
|
100%
|
$
|
130
|
(Dollar
amounts in millions)
|
November
30, 2007
|
May
31, 2007
|
Increase/
Decrease
|
|||||||||||||||||
National
Rural:
|
||||||||||||||||||||
Distribution
|
$
|
13,099
|
68%
|
$
|
13,039
|
68%
|
$
|
60
|
||||||||||||
Power
supply
|
3,781
|
19%
|
3,655
|
19%
|
126
|
|||||||||||||||
Statewide
and associate
|
138
|
1%
|
145
|
1%
|
(7
|
)
|
||||||||||||||
National
Rural Total
|
17,018
|
88%
|
16,839
|
88%
|
179
|
|||||||||||||||
RTFC
|
1,792
|
9%
|
1,860
|
10%
|
(68
|
)
|
||||||||||||||
NCSC
|
536
|
3%
|
503
|
2%
|
33
|
|||||||||||||||
Total
|
$
|
19,346
|
100%
|
$
|
19,202
|
100%
|
$
|
144
|
(Dollar
amounts in
millions)
|
November
30, 2007
|
May
31, 2007
|
Increase/
Decrease
|
|||||||||||||||||||
Rural
local exchange
carriers
|
$
|
1,568
|
88%
|
$
|
1,630
|
88%
|
$
|
(62
|
)
|
|||||||||||||
Cable
television
providers
|
154
|
9%
|
155
|
8%
|
(1
|
)
|
||||||||||||||||
Fiber
optic network
providers
|
34
|
2%
|
37
|
2%
|
(3
|
)
|
||||||||||||||||
Competitive
local exchange
carriers
|
26
|
1%
|
21
|
1%
|
5
|
|||||||||||||||||
Wireless
providers
|
3
|
-
|
4
|
-
|
(1
|
)
|
||||||||||||||||
Long
distance
carriers
|
-
|
-
|
9
|
1%
|
(9
|
)
|
||||||||||||||||
Other
|
7
|
-
|
4
|
-
|
3
|
|||||||||||||||||
Total
|
$
|
1,792
|
100%
|
$
|
1,860
|
100%
|
$
|
(68
|
)
|
·
|
loans
outstanding, excluding loans guaranteed by
RUS,
|
·
|
the
Company's guarantees of the borrower's
obligations,
|
·
|
unadvanced
loan commitments,
|
·
|
borrower
guarantees to the Company of another borrower's debt,
and
|
·
|
other
indebtedness of any kind unless guaranteed by the U.S.
government.
|
|
|
November
30,
2007
|
|
|
May
31,
2007
|
||||
(Dollar
amounts in
millions)
|
Amount
|
%
of Total
|
Amount
|
%
of
Total
|
|||||
Total
by
type:
|
|||||||||
Loans
|
$
|
3,399
|
$
|
3,307
|
|||||
Guarantees
|
79
|
77
|
|||||||
Total
credit exposure to ten largest borrowers
|
$
|
3,478
|
18%
|
$
|
3,384
|
18%
|
|||
Total
by
segment:
|
|||||||||
National
Rural
|
$
|
2,782
|
$
|
2,691
|
|||||
RTFC
|
696
|
693
|
|||||||
Total
credit exposure to ten largest borrowers
|
$
|
3,478
|
18%
|
$
|
3,384
|
18%
|
|
|
November
30,
2007
|
|
|
May
31,
2007
|
||||
(Dollar
amounts in
millions)
|
Amount
|
%
of Total
|
Amount
|
%
of
Total
|
|||||
Total
by
type:
|
|||||||||
Loans
|
$
|
1,645
|
$
|
1,634
|
|||||
Guarantees
|
221
|
221
|
|||||||
Total
unsecured credit exposure
|
$
|
1,866
|
10%
|
$
|
1,855
|
10%
|
|||
Total
by
segment:
|
|||||||||
National
Rural
|
$
|
1,576
|
$
|
1,559
|
|||||
RTFC
|
228
|
230
|
|||||||
NCSC
|
62
|
66
|
|||||||
Total
unsecured credit exposure
|
$
|
1,866
|
10%
|
$
|
1,855
|
10%
|
·
|
principal
or interest payments on any loan to the borrower are past due 90
days or
more,
|
·
|
as
a result of court proceedings, repayment on the original terms is
not
anticipated, or
|
·
|
for
some other reason, management does not expect the timely repayment
of
principal and interest.
|
·
|
interest
rates,
|
·
|
court
rulings,
|
·
|
changes
in collateral values,
|
·
|
changes
in economic conditions in the area in which the cooperative operates,
and
|
·
|
changes
to the industry in which the cooperative
operates.
|
(Dollar
amounts in millions)
|
November
30, 2007
|
May
31, 2007
|
|||||
Non-performing
loans
|
$
|
503
|
$
|
502
|
|||
Percent
of loans outstanding
|
2.75
|
%
|
2.77
|
%
|
|||
Percent
of loans and guarantees outstanding
|
2.60
|
%
|
2.61
|
%
|
|||
Restructured
loans
|
$
|
591
|
$
|
603
|
|||
Percent
of loans outstanding
|
3.24
|
%
|
3.33
|
%
|
|||
Percent
of loans and guarantees outstanding
|
3.05
|
%
|
3.14
|
%
|
|||
Total
non-performing and restructured loans
|
$
|
1,094
|
$
|
1,105
|
|||
Percent
of loans outstanding
|
5.99
|
%
|
6.10
|
%
|
|||
Percent
of loans and guarantees outstanding
|
5.65
|
%
|
5.75
|
%
|
For
the six months ended
and
as of
|
For
the year ended
and
as of
|
||||||||||
November
30,
|
November
30,
|
May
31,
|
|||||||||
(Dollar
amounts in millions)
|
2007
|
2006
|
2007
|
||||||||
Beginning
balance
|
$
|
562
|
$
|
611
|
$
|
611
|
|||||
Recovery
of loan losses
|
(14
|
)
|
-
|
(7
|
)
|
||||||
Net
write-offs
|
(17
|
)
|
-
|
(42
|
)
|
||||||
Ending
balance
|
$
|
531
|
$
|
611
|
$
|
562
|
|||||
Loan
loss allowance by segment:
|
|||||||||||
National
Rural
|
$
|
530
|
$
|
610
|
$
|
561
|
|||||
NCSC
|
1
|
1
|
1
|
||||||||
Total
|
$
|
531
|
$
|
611
|
$
|
562
|
|||||
As
a percentage of total loans outstanding
|
2.91
|
%
|
3.36
|
%
|
3.10
|
%
|
|||||
As
a percentage of total non-performing loans outstanding
|
105.57
|
%
|
113.36
|
%
|
111.95
|
%
|
|||||
As
a percentage of total restructured loans outstanding
|
89.85
|
%
|
99.19
|
%
|
93.20
|
%
|
(Dollar
amounts in millions)
|
November
30,
2007
|
May
31,
2007
|
Increase/
(Decrease)
|
|||||||||
Short-term
debt:
|
||||||||||||
Commercial
paper (1)
|
$
|
2,681
|
$
|
2,784
|
$
|
(103
|
)
|
|||||
Bank
bid notes
|
100
|
100
|
-
|
|||||||||
Long-term
debt with remaining maturities less than one year
|
3,712
|
1,368
|
2,344
|
|||||||||
Subordinated
deferrable debt with remaining maturities less than one
year
|
-
|
175
|
(175
|
)
|
||||||||
Total
short-term debt
|
6,493
|
4,427
|
2,066
|
|||||||||
Long-term
debt:
|
||||||||||||
Collateral
trust bonds
|
2,216
|
4,017
|
(1,801
|
)
|
||||||||
Notes
payable
|
2,532
|
2,533
|
(1
|
)
|
||||||||
Medium-term
notes
|
4,527
|
4,745
|
(218
|
)
|
||||||||
Total
long-term debt
|
9,275
|
11,295
|
(2,020
|
)
|
||||||||
Subordinated
deferrable debt
|
311
|
311
|
-
|
|||||||||
Members'
subordinated certificates:
|
||||||||||||
Membership
certificates
|
649
|
649
|
-
|
|||||||||
Loan
certificates
|
656
|
625
|
31
|
|||||||||
Guarantee
certificates
|
103
|
107
|
(4
|
)
|
||||||||
Total
members' subordinated certificates
|
1,408
|
1,381
|
27
|
|||||||||
Total
debt outstanding
|
$
|
17,487
|
$
|
17,414
|
$
|
73
|
||||||
Percentage
of fixed rate debt (2)
|
83%
|
83%
|
||||||||||
Percentage
of variable rate debt (3)
|
17%
|
17%
|
||||||||||
Percentage
of long-term debt
|
63%
|
75%
|
||||||||||
Percentage
of short-term debt
|
37%
|
25%
|
(in
millions)
|
November
30, 2007
|
May
31, 2007
|
Increase/
(Decrease)
|
|||||||||
Membership
fees
|
$
|
1
|
$
|
1
|
$
|
-
|
||||||
Education
fund
|
1
|
1
|
-
|
|||||||||
Members'
capital reserve
|
158
|
158
|
-
|
|||||||||
Allocated
net income
|
320
|
406
|
(86
|
)
|
||||||||
Unallocated
net income
|
56
|
-
|
56
|
|||||||||
Total
members' equity
|
536
|
566
|
(30
|
)
|
||||||||
Prior
years cumulative derivative forward
|
||||||||||||
value
and foreign currency adjustments
|
132
|
226
|
(94
|
)
|
||||||||
Current
period derivative forward value (1)
|
(98
|
)
|
(79
|
)
|
(19
|
)
|
||||||
Current
period foreign currency adjustments
|
-
|
(15
|
)
|
15
|
||||||||
Total
retained equity
|
570
|
698
|
(128
|
)
|
||||||||
Accumulated
other comprehensive income
|
12
|
12
|
-
|
|||||||||
Total
equity
|
$
|
582
|
$
|
710
|
$
|
(128
|
)
|
(1)
|
Represents
the derivative forward value loss recorded by National Rural for
the
period.
|
(in
millions)
|
More
than 5
|
||||||||||||||||||||||||||||
Instrument
|
2008
|
2009
|
2010
|
2011
|
2012
|
Years
|
Total
|
||||||||||||||||||||||
Long-term
debt due in less than one year
|
$
|
1,032
|
$
|
2,680
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
3,712
|
|||||||||||||||
Long-term
debt
|
-
|
354
|
1,515
|
539
|
1,526
|
5,341
|
9,275
|
||||||||||||||||||||||
Subordinated
deferrable debt
|
-
|
-
|
-
|
-
|
-
|
311
|
311
|
||||||||||||||||||||||
Members'
subordinated certificates
(1)
|
14
|
10
|
33
|
22
|
5
|
1,054
|
1,138
|
||||||||||||||||||||||
Operating
leases (2)
|
2
|
3
|
2
|
-
|
-
|
-
|
7
|
||||||||||||||||||||||
Contractual
interest on long-term debt (3)
|
362
|
596
|
478
|
431
|
395
|
4,399
|
6,661
|
||||||||||||||||||||||
Total
contractual obligations
|
$
|
1,410
|
$
|
3,643
|
$
|
2,028
|
$
|
992
|
$
|
1,926
|
$
|
11,105
|
$
|
21,104
|
Increase/
|
||||||||||||
(in
millions)
|
November
30, 2007
|
May
31, 2007
|
(Decrease)
|
|||||||||
Total
by type:
|
||||||||||||
Long-term
tax-exempt bonds
|
$
|
511
|
$
|
526
|
$
|
(15
|
)
|
|||||
Indemnifications
of tax benefit transfers
|
102
|
108
|
(6
|
)
|
||||||||
Letters
of credit
|
395
|
366
|
29
|
|||||||||
Other
guarantees
|
80
|
74
|
6
|
|||||||||
Total
|
$
|
1,088
|
$
|
1,074
|
$
|
14
|
||||||
Total
by segment:
|
||||||||||||
National
Rural
|
$
|
1,016
|
$
|
1,034
|
$
|
(18
|
)
|
|||||
NCSC
|
72
|
40
|
32
|
|||||||||
Total
|
$
|
1,088
|
$
|
1,074
|
$
|
14
|
(in
millions)
|
Principal
Amortization and Maturities
|
|||||||||||||||||||||||||||||||||||||||||||
Outstanding
|
Remaining
|
|||||||||||||||||||||||||||||||||||||||||||
Balance
|
2008
|
2009
|
2010
|
2011
|
2012
|
Years
|
||||||||||||||||||||||||||||||||||||||
Guarantees (1) |
$
|
1,088
|
$
|
183
|
$
|
130
|
$
|
157
|
$
|
126
|
$
|
101
|
$
|
391
|
Moody's
Investors
|
Standard
& Poor's
|
||||||||||
Service
|
Corporation
|
Fitch
Ratings
|
|||||||||
Direct:
|
|||||||||||
Senior
secured debt
|
A1
|
A+
|
A+
|
||||||||
Senior
unsecured debt
|
A2
|
A
|
A
|
||||||||
Subordinated
deferrable debt
|
A3
|
BBB+
|
A-
|
||||||||
Commercial
paper
|
P-1
|
A-1
|
F-1
|
||||||||
Guarantees:
|
|||||||||||
Pooled
bonds
|
A1
|
A
|
A
|
||||||||
Other
bonds
|
A2
|
A
|
A
|
||||||||
Short-term
|
P-1
|
A-1
|
F-1
|
(Dollar
amounts in millions)
|
November
30, 2007
|
May
31, 2007
|
Termination
Date
|
Facility
fee per
annum
(1)
|
|||||||||
364-day
agreement (2)
|
$
|
1,125
|
$
|
1,125
|
March
14, 2008
|
0.05
of 1%
|
|||||||
Five-year
agreement
|
1,125
|
1,125
|
March
16, 2012
|
0.06
of 1%
|
|||||||||
Five-year
agreement
|
1,025
|
1,025
|
March
22, 2011
|
0.06
of 1%
|
|||||||||
Total
|
$
|
3,275
|
$
|
3,275
|
·
|
guarantees
for members where the long-term unsecured debt of the member is rated
at
least BBB+ by Standard & Poor's Corporation or Baa1 by
Moody's Investors Service; and
|
·
|
the
payment of principal and interest by the member on the guaranteed
indebtedness if covered by insurance or reinsurance provided by an
insurer
having an insurance financial strength rating of AAA by Standard
&
Poor's Corporation or a financial strength rating of Aaa by Moody's
Investors Service.
|
Actual
|
|||||||
Requirement
|
November
30,
2007
|
May
31,
2007
|
|||||
Minimum
average adjusted TIER over the six most recent fiscal
quarters
|
1.025
|
1.13
|
1.09
|
||||
Minimum
adjusted TIER at fiscal year end (1)
|
1.05
|
1.12
|
1.12
|
||||
Maximum ratio of senior debt to total equity |
|
10.00
|
7.30
|
6.65
|
November
30, 2007
|
May
31, 2007
|
Increase/
|
||||||||||||||||||||||||||
(Dollar
amounts in millions)
|
Amount
|
%
of Total (1)
|
Amount
|
%
of Total (1)
|
(Decrease)
|
|||||||||||||||||||||||
Commercial
paper (2)
|
$
|
1,624
|
61%
|
$
|
1,634
|
59%
|
$
|
(10
|
)
|
|||||||||||||||||||
Medium-term
notes
|
353
|
7%
|
308
|
6%
|
45
|
|||||||||||||||||||||||
Members'
subordinated certificates
|
1,408
|
100%
|
1,381
|
100%
|
27
|
|||||||||||||||||||||||
Members'
equity (3)
|
536
|
100%
|
566
|
100%
|
(30
|
)
|
||||||||||||||||||||||
Total
|
$
|
3,921
|
$
|
3,889
|
$
|
32
|
||||||||||||||||||||||
Percentage
of total assets
|
21.1
|
%
|
20.9
|
%
|
||||||||||||||||||||||||
Percentage
of total assets less derivative assets (3)
|
21.3
|
%
|
21.2
|
%
|
Amount
|
|||
(Dollar
amounts in millions)
|
Maturing
(1)
|
||
2008
|
$
|
1,046
|
|
2009
|
3,044
|
||
2010
|
1,548
|
||
2011
|
561
|
||
2012
|
1,531
|
||
Thereafter
|
6,706
|
||
Total
|
$
|
14,436
|
May
31,
|
June
1,
|
June
1,
|
June
1,
|
June
1,
|
|||||||||||||||||||||||||||||||||||||
2008
|
2008
to
|
2010
to
|
2012
to
|
2017
to
|
Beyond
|
||||||||||||||||||||||||||||||||||||
or
|
May
31,
|
May
31,
|
May
31,
|
May
31,
|
June
1,
|
||||||||||||||||||||||||||||||||||||
(Dollar
amounts in millions)
|
prior
|
2010
|
2012
|
2017
|
2027
|
2027
|
Total
|
||||||||||||||||||||||||||||||||||
Assets:
|
|||||||||||||||||||||||||||||||||||||||||
Amortization
and repricing
|
$
|
1,179
|
$
|
3,424
|
$
|
2,875
|
$
|
3,653
|
$
|
2,588
|
$
|
1,094
|
$
|
14,813
|
|||||||||||||||||||||||||||
Total
assets
|
$
|
1,179
|
$
|
3,424
|
$
|
2,875
|
$
|
3,653
|
$
|
2,588
|
$
|
1,094
|
$
|
14,813
|
|||||||||||||||||||||||||||
Liabilities
and members' equity:
|
|||||||||||||||||||||||||||||||||||||||||
Long-term
debt
|
$
|
979
|
$
|
3,277
|
$
|
3,750
|
$
|
3,684
|
$
|
895
|
$
|
254
|
$
|
12,839
|
|||||||||||||||||||||||||||
Subordinated
certificates
|
25
|
59
|
92
|
88
|
443
|
579
|
1,286
|
||||||||||||||||||||||||||||||||||
Members'
equity (1)
|
13
|
26
|
28
|
121
|
101
|
261
|
550
|
||||||||||||||||||||||||||||||||||
Total
liabilities and members' equity
|
$
|
1,017
|
$
|
3,362
|
$
|
3,870
|
$
|
3,893
|
$
|
1,439
|
$
|
1,094
|
$
|
14,675
|
|||||||||||||||||||||||||||
Gap
(2)
|
$
|
162
|
$
|
62
|
$
|
(995
|
)
|
$
|
(240
|
)
|
$
|
1,149
|
$
|
-
|
$
|
138
|
|||||||||||||||||||||||||
Cumulative
gap
|
$
|
162
|
$
|
224
|
$
|
(771
|
)
|
$
|
(1,011
|
)
|
$
|
138
|
$
|
138
|
|||||||||||||||||||||||||||
Cumulative
gap as a % of total assets
|
0.87
|
%
|
1.20
|
%
|
(4.14
|
)%
|
(5.43
|
)%
|
0.74
|
%
|
0.74
|
%
|
|||||||||||||||||||||||||||||
Cumulative
gap as a % of adjusted total assets (3)
|
0.88
|
%
|
1.22
|
%
|
(4.19
|
)%
|
(5.50
|
)%
|
0.75
|
%
|
0.75
|
%
|
Three
months ended
|
Six
months ended
|
|||||||
November
30,
|
November
30,
|
|||||||
(in
thousands)
|
2007
|
2006
|
2007
|
2006
|
Interest
expense
|
$
|
(240,017
|
)
|
$
|
(248,591
|
)
|
$
|
(487,342
|
)
|
$
|
(504,595
|
)
|
||||
Adjusted
to include: Derivative cash settlements
|
11,507
|
16,493
|
19,836
|
31,748
|
||||||||||||
Adjusted
interest expense
|
$
|
(228,510
|
)
|
$
|
(232,098
|
)
|
$
|
(467,506
|
)
|
$
|
(472,847
|
)
|
||||
Net
interest income
|
$
|
23,270
|
$
|
11,653
|
$
|
43,899
|
$
|
20,338
|
||||||||
Adjusted
to include: Derivative cash settlements
|
11,507
|
16,493
|
19,836
|
31,748
|
||||||||||||
Adjusted
net interest income
|
$
|
34,777
|
$
|
28,146
|
$
|
63,735
|
$
|
52,086
|
||||||||
Loss
prior to income taxes and minority interest
|
$
|
(37,683
|
)
|
$
|
(56,993
|
)
|
$
|
(51,742
|
)
|
$
|
(101,092
|
)
|
||||
Adjusted
to exclude: Derivative forward value
|
75,412
|
53,239
|
109,012
|
116,590
|
||||||||||||
Foreign
currency adjustments
|
-
|
20,620
|
-
|
17,299
|
||||||||||||
Adjusted
income prior to income taxes and minority interest
|
$
|
37,729
|
$
|
16,866
|
$
|
57,270
|
$
|
32,797
|
||||||||
Net
loss
|
$
|
(30,226
|
)
|
$
|
(56,195
|
)
|
$
|
(41,608
|
)
|
$
|
(99,214
|
)
|
||||
Adjusted
to include: Minority interest net income
|
(4,545
|
)
|
(312
|
)
|
(6,123
|
)
|
(678
|
)
|
||||||||
Adjusted
to exclude: Derivative forward value
|
75,412
|
53,239
|
109,012
|
116,590
|
||||||||||||
Foreign
currency adjustments
|
-
|
20,620
|
-
|
17,299
|
||||||||||||
Adjusted
net income
|
$
|
40,641
|
$
|
17,352
|
$
|
61,281
|
$
|
33,997
|
||||||||
Interest
expense + net income prior to cumulative
|
|||
TIER
=
|
effect
of change in accounting principle
|
||
Interest
expense
|
Adjusted
TIER =
|
Adjusted
interest expense + adjusted net income
|
||
Adjusted
interest expense
|
Three
months ended
|
Six
months ended
|
|||||||||||||||
November
30,
|
November
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
TIER
(1)
|
-
|
-
|
-
|
-
|
||||||||||||
Adjusted
TIER
|
1.18
|
1.07
|
1.13
|
1.07
|
(in
thousands)
|
November
30, 2007
|
May
31, 2007
|
|||||||
Liabilities
|
$
|
18,008,841
|
$
|
17,843,151
|
|||||
Less:
|
|||||||||
Derivative
liabilities
|
(169,928
|
)
|
(71,934
|
)
|
|||||
Debt
used to fund loans guaranteed by RUS
|
(252,087
|
)
|
(255,903
|
)
|
|||||
Subordinated
deferrable debt
|
(311,440
|
)
|
(486,440
|
)
|
|||||
Subordinated
certificates
|
(1,408,477
|
)
|
(1,381,447
|
)
|
|||||
Adjusted
liabilities
|
$
|
15,866,909
|
$
|
15,647,427
|
|||||
Total
equity
|
$
|
582,121
|
$
|
710,041
|
|||||
Less:
|
|||||||||
Prior
years cumulative derivative forward value and
|
|||||||||
foreign
currency adjustments
|
(131,551
|
)
|
(225,849
|
)
|
|||||
Current
period derivative forward value (1)
|
97,347
|
79,744
|
|||||||
Current
period foreign currency adjustments
|
-
|
14,554
|
|||||||
Accumulated
other comprehensive income
|
(11,873
|
)
|
(12,204
|
)
|
|||||
Subtotal
members' equity
|
536,044
|
566,286
|
|||||||
Plus:
|
|||||||||
Subordinated
certificates
|
1,408,477
|
1,381,447
|
|||||||
Subordinated
deferrable debt
|
311,440
|
486,440
|
|||||||
Minority
interest
|
15,933
|
21,989
|
|||||||
Adjusted
equity
|
$
|
2,271,894
|
$
|
2,456,162
|
|||||
Guarantees
|
$
|
1,088,118
|
$
|
1,074,374
|
Leverage
ratio =
|
Liabilities
+ guarantees outstanding
|
|||
Total
equity
|
||||
Debt
to equity ratio =
|
Liabilities
|
|||
Total
equity
|
||||
The
adjusted leverage and adjusted debt to equity ratios are calculated
as
follows:
|
||||
Adjusted
leverage ratio =
|
Adjusted
liabilities + guarantees outstanding
|
|||
Adjusted
equity
|
||||
Adjusted
debt to equity ratio =
|
Adjusted
liabilities
|
|||
Adjusted
equity
|
||||
November
30, 2007
|
May
31, 2007
|
|||||||
Leverage
ratio
|
32.81
|
26.64
|
||||||
Adjusted
leverage ratio
|
7.46
|
6.81
|
||||||
Debt
to equity ratio
|
30.94
|
25.13
|
||||||
Adjusted
debt to equity ratio
|
6.98
|
6.37
|
|
10.2
– Employment Contract between National Rural and Sheldon C. Petersen,
effective as of January 1, 2008.
|
|
10.5
– Amendment to Supplemental Agreement between the Rural Telephone Finance
Cooperative and Sheldon C. Petersen, effective as of January 1, 2008.
|
|
10.6
– Agreement of Purchase and Sale between National Rural and Loudoun
Land
Venture, LLC dated as of November 28, 2007. Exhibit C to the
Agreement of Purchase and Sale has been omitted and will be furnished
supplementally to the Securities and Exchange Commission upon request.
|
|
10.7
– First Amendment to Agreement of Purchase and Sale between National
Rural
and Loudoun Land Venture, LLC dated as of December 17, 2007.
|
|
10.8
– Second Amendment to Agreement of Purchase and Sale between National
Rural and Loudoun Land Venture, LLC dated as of December 21,
2007. Exhibits A and C to the Second Amendment to Agreement of
Purchase and Sale have been omitted and will be furnished supplementally
to the Securities and Exchange Commission upon request.
|
|
31.1
– Certification of the Chief Executive Officer required by Section
302 of
the Sarbanes-Oxley Act of 2002.
|
|
31.2
– Certification of the Chief Financial Officer required by Section
302 of
the Sarbanes-Oxley Act of 2002.
|
|
32.1
– Certification of the Chief Executive Officer required by Section
906 of
the Sarbanes-Oxley Act of 2002.
|
|
32.2
– Certification of the Chief Financial Officer required by Section
906 of
the Sarbanes-Oxley Act of 2002.
|