Name
of each
|
Name
of each
|
||||||
exchange
on
|
exchange
on
|
||||||
Title
of each class
|
which
registered
|
Title
of each class
|
which
registered
|
||||
5.70%
Collateral Trust Bonds, due 2010
|
NYSE
|
6.75%
Subordinated Notes, due 2043
|
NYSE
|
||||
7.20%
Collateral Trust Bonds, due 2015
|
NYSE
|
6.10%
Subordinated Notes, due 2044
|
NYSE
|
||||
6.55%
Collateral Trust Bonds, due 2018
|
NYSE
|
5.95%
Subordinated Notes, due 2045
|
NYSE
|
||||
7.35%
Collateral Trust Bonds, due 2026
|
NYSE
|
||||||
TABLE OF CONTENTS
|
|||||||
Part No.
|
Item No.
|
Page
|
|||||
I.
|
1.
|
Business
|
1
|
||||
General
|
1
|
||||||
Members
|
2
|
||||||
Distribution
Systems
|
3
|
||||||
Power
Supply Systems
|
3
|
||||||
Service
Organizations and Associate Systems
|
4
|
||||||
Telecommunications
Systems
|
4
|
||||||
Loan
Programs
|
4
|
||||||
Interest
Rates on Loans
|
5
|
||||||
National
Rural Loan Programs
|
5
|
||||||
RTFC
Loan Programs
|
6
|
||||||
NCSC
Loan Programs
|
6
|
||||||
RUS
Guaranteed Loans for Rural Electric Systems
|
7
|
||||||
Conversion
of Loans
|
7
|
||||||
Prepayment
of Loans
|
7
|
||||||
Loan
Security
|
7
|
||||||
Guarantee
Programs
|
7
|
||||||
Guarantees
of Long-Term Tax-Exempt Bonds
|
8
|
||||||
Guarantees
of Tax Benefit Transfers
|
8
|
||||||
Letters
of Credit
|
8
|
||||||
Other
Guarantees
|
8
|
||||||
Member
Regulation and Competition
|
9
|
||||||
Disaster
Recovery
|
12
|
||||||
Tax
Status
|
13
|
||||||
Investment
Policy
|
13
|
||||||
Employees
|
13
|
||||||
1A.
|
Risk
Factors
|
13
|
|||||
1B.
|
Unresolved
Staff Comments
|
15
|
|||||
2.
|
Properties
|
16
|
|||||
3.
|
Legal
Proceedings
|
16
|
|||||
4.
|
Submission
of Matters to a Vote of Security Holders
|
16
|
|||||
II.
|
5.
|
Market
for Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of
|
|||||
Equity
Securities
|
17
|
||||||
6.
|
Selected
Financial Data
|
17
|
|||||
7.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
18
|
|||||
Business
Overview
|
18
|
||||||
Financial
Overview
|
19
|
||||||
Critical
Accounting Estimates
|
22
|
||||||
New
Accounting Pronouncements
|
25
|
||||||
Results
of Operations
|
26
|
||||||
Ratio
of Earnings to Fixed Charges
|
33
|
||||||
Financial
Condition
|
33
|
||||||
Off-Balance
Sheet Obligations
|
45
|
||||||
Liquidity
and Capital Resources
|
47
|
||||||
Market
Risk
|
51
|
||||||
Non-GAAP
Financial Measures
|
56
|
||||||
7A.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
60
|
|||||
8.
|
Financial
Statements and Supplementary Data
|
60
|
|||||
9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
60
|
|||||
9A(T).
|
Controls
and Procedures
|
61
|
|||||
9B.
|
Other
Information
|
62
|
|||||
III.
|
10.
|
Directors,
Executive Officers and Corporate Governance
|
63
|
||||
11.
|
Executive
Compensation
|
68
|
|||||
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder
|
||||||
Matters
|
79
|
||||||
13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
79
|
|||||
14.
|
Principal
Accounting Fees and Services
|
81
|
|||||
IV.
|
15.
|
Exhibits,
Financial Statement Schedules
|
83
|
||||
Signatures
|
87
|
Item
1.
|
Business.
|
·
|
829
distribution systems and 68 generation and transmission ("power supply")
systems, totaling 897 utility members, the majority of which are
consumer-owned electric
cooperatives;
|
·
|
498
telecommunications members;
|
·
|
66
service members; and
|
·
|
61
associates.
|
·
|
Class
A - cooperative or not-for-profit distribution systems that receive
or are eligible to receive loans or other assistance from
RUS;
|
·
|
Class
B - cooperative or not-for-profit power supply
systems;
|
·
|
Class
C - statewide and regional associations wholly-owned or controlled by
Class A or Class B members; and
|
·
|
Class
D - national associations of
cooperatives.
|
State/Territory
|
Number
of
Members
|
Loan
%
|
Loan
and
Guarantee
%
|
State/Territory
|
Number
of
Members
|
Loan
%
|
Loan
and
Guarantee
%
|
|||||||||||
Alabama
|
30
|
2.13
|
%
|
2.93
|
%
|
Missouri
|
64
|
3.94
|
%
|
4.03
|
%
|
|||||||
Alaska
|
30
|
1.69
|
1.61
|
Montana
|
39
|
0.64
|
0.66
|
|||||||||||
American
Samoa
|
1
|
-
|
-
|
Nebraska
|
40
|
0.07
|
0.06
|
|||||||||||
Arizona
|
26
|
1.22
|
1.29
|
Nevada
|
7
|
0.85
|
0.97
|
|||||||||||
Arkansas
|
30
|
3.05
|
2.90
|
New
Hampshire
|
4
|
0.66
|
0.73
|
|||||||||||
California
|
10
|
0.18
|
0.20
|
New
Jersey
|
1
|
0.09
|
0.09
|
|||||||||||
Colorado
|
39
|
4.68
|
4.65
|
New
Mexico
|
25
|
0.16
|
0.16
|
|||||||||||
Connecticut
|
1
|
0.99
|
0.93
|
New
York
|
20
|
0.07
|
0.07
|
|||||||||||
Delaware
|
1
|
0.18
|
0.17
|
North
Carolina
|
40
|
2.32
|
2.67
|
|||||||||||
District
of Columbia
|
4
|
0.05
|
0.12
|
North
Dakota
|
32
|
0.34
|
0.35
|
|||||||||||
Florida
|
19
|
3.23
|
3.05
|
Ohio
|
42
|
2.20
|
2.10
|
|||||||||||
Georgia
|
67
|
7.85
|
7.49
|
Oklahoma
|
49
|
2.48
|
2.33
|
|||||||||||
Guam
|
1
|
-
|
-
|
Oregon
|
39
|
1.50
|
1.55
|
|||||||||||
Hawaii
|
1
|
0.03
|
0.04
|
Pennsylvania
|
23
|
1.86
|
1.84
|
|||||||||||
Idaho
|
17
|
0.78
|
0.75
|
South
Carolina
|
38
|
2.30
|
2.16
|
|||||||||||
Illinois
|
52
|
3.28
|
3.47
|
South
Dakota
|
46
|
0.71
|
0.66
|
|||||||||||
Indiana
|
53
|
4.16
|
3.91
|
Tennessee
|
29
|
0.38
|
0.38
|
|||||||||||
Iowa
|
118
|
2.45
|
2.33
|
Texas
|
107
|
16.51
|
16.53
|
|||||||||||
Kansas
|
49
|
3.97
|
3.93
|
Utah
|
11
|
2.78
|
2.65
|
|||||||||||
Kentucky
|
33
|
2.34
|
2.63
|
Vermont
|
7
|
0.39
|
0.37
|
|||||||||||
Louisiana
|
17
|
1.92
|
1.81
|
Virgin
Islands
|
-
|
2.59
|
2.44
|
|||||||||||
Maine
|
5
|
0.02
|
0.02
|
Virginia
|
27
|
1.00
|
0.95
|
|||||||||||
Maryland
|
2
|
1.07
|
1.25
|
Washington
|
19
|
0.80
|
0.84
|
|||||||||||
Massachusetts
|
1
|
-
|
-
|
West
Virginia
|
4
|
0.01
|
0.01
|
|||||||||||
Michigan
|
27
|
1.38
|
1.33
|
Wisconsin
|
60
|
2.08
|
1.95
|
|||||||||||
Minnesota
|
73
|
3.93
|
3.70
|
Wyoming
|
15
|
0.60
|
0.59
|
|||||||||||
Mississippi
|
27
|
2.09
|
2.35
|
Total
|
1,522
|
100.00
|
%
|
100.00
|
%
|
2009
|
2008
|
||||||||||||||||
Weighted-
average
|
Weighted-
average
|
Weighted-
average
|
Weighted-
average
|
||||||||||||||
loans
outstanding
|
interest
rate
|
loans
outstanding
|
interest
rate
|
||||||||||||||
(dollar
amounts in thousands)
|
|||||||||||||||||
Total
by loan type: (1)
|
|||||||||||||||||
Long-term
fixed-rate loans
|
$
|
14,710,754
|
5.93
|
%
|
$
|
14,573,227
|
5.90
|
%
|
|||||||||
Long-term
variable-rate loans
|
1,654,355
|
5.34
|
1,170,017
|
6.94
|
|||||||||||||
Loans
guaranteed by RUS
|
246,789
|
5.09
|
252,788
|
5.49
|
|||||||||||||
Short-term
loans
|
2,034,736
|
4.05
|
1,310,313
|
5.89
|
|||||||||||||
Non-performing
loans
|
495,014
|
-
|
504,310
|
0.01
|
|||||||||||||
Restructured
loans
|
556,892
|
0.63
|
589,662
|
0.64
|
|||||||||||||
Total
loans
|
$
|
19,698,540
|
5.38
|
|
$
|
18,400,317
|
5.63
|
|
|||||||||
Total
by segment:
|
|||||||||||||||||
National
Rural
|
$
|
17,579,888
|
5.43
|
%
|
$
|
16,167,441
|
5.67
|
%
|
|||||||||
RTFC
|
1,693,123
|
4.50
|
1,791,100
|
4.96
|
|||||||||||||
NCSC
|
425,529
|
6.59
|
441,776
|
7.10
|
|||||||||||||
Total
|
$
|
19,698,540
|
5.
38
|
|
$
|
18,400,317
|
5.63
|
|
(dollar
amounts in thousands)
|
|||||||||||||||||||||||||
State/Territory
|
2009
|
2008
|
2007
|
State/Territory
|
2009
|
2008
|
2007
|
||||||||||||||||||
Alabama
|
$
|
430,065
|
$
|
414,961
|
$
|
347,723
|
Montana
|
$
|
128,563
|
$
|
133,655
|
$
|
132,603
|
||||||||||||
Alaska
|
340,861
|
371,768
|
335,352
|
Nebraska
|
13,844
|
18,756
|
16,447
|
||||||||||||||||||
American
Samoa
|
489
|
769
|
769
|
Nevada
|
171,754
|
155,625
|
147,401
|
||||||||||||||||||
Arizona
|
246,171
|
206,558
|
178,659
|
New
Hampshire
|
132,741
|
143,417
|
149,496
|
||||||||||||||||||
Arkansas
|
615,429
|
522,018
|
518,273
|
New
Jersey
|
18,806
|
17,747
|
18,217
|
||||||||||||||||||
California
|
37,270
|
25,968
|
27,283
|
New
Mexico
|
32,254
|
36,636
|
32,344
|
||||||||||||||||||
Colorado
|
944,938
|
942,179
|
922,558
|
New
York
|
14,523
|
19,735
|
19,844
|
||||||||||||||||||
Connecticut
|
200,000
|
200,000
|
200,000
|
North
Carolina
|
468,240
|
487,249
|
519,214
|
||||||||||||||||||
Delaware
|
36,253
|
37,950
|
39,582
|
North
Dakota
|
68,758
|
69,120
|
77,072
|
||||||||||||||||||
District
of Columbia
|
9,298
|
9,514
|
9,717
|
Ohio
|
444,565
|
455,491
|
390,350
|
||||||||||||||||||
Florida
|
651,564
|
677,365
|
617,010
|
Oklahoma
|
500,189
|
483,623
|
480,536
|
||||||||||||||||||
Georgia
|
1,584,178
|
1,567,108
|
1,566,308
|
Oregon
|
303,926
|
303,166
|
305,506
|
||||||||||||||||||
Hawaii
|
6,443
|
6,804
|
7,157
|
Pennsylvania
|
375,549
|
357,337
|
376,193
|
||||||||||||||||||
Idaho
|
158,013
|
157,703
|
168,253
|
South
Carolina
|
464,125
|
484,733
|
476,139
|
||||||||||||||||||
Illinois
|
661,632
|
600,571
|
543,389
|
South
Dakota
|
142,582
|
147,916
|
161,247
|
||||||||||||||||||
Indiana
|
839,473
|
530,008
|
481,243
|
Tennessee
|
76,553
|
107,575
|
96,073
|
||||||||||||||||||
Iowa
|
493,722
|
465,056
|
482,513
|
Texas
|
3,332,283
|
3,044,117
|
2,618,010
|
||||||||||||||||||
Kansas
|
801,389
|
878,630
|
849,864
|
Utah
|
561,050
|
570,971
|
565,768
|
||||||||||||||||||
Kentucky
|
472,693
|
363,720
|
355,503
|
Vermont
|
79,131
|
74,957
|
75,905
|
||||||||||||||||||
Louisiana
|
388,490
|
333,984
|
320,765
|
Virgin
Islands
|
523,758
|
491,706
|
492,795
|
||||||||||||||||||
Maine
|
4,093
|
4,566
|
9,884
|
Virginia
|
201,798
|
235,916
|
184,986
|
||||||||||||||||||
Maryland
|
216,468
|
224,754
|
206,491
|
Washington
|
161,099
|
122,674
|
110,907
|
||||||||||||||||||
Michigan
|
279,490
|
265,116
|
271,541
|
West
Virginia
|
2,341
|
6,109
|
5,355
|
||||||||||||||||||
Minnesota
|
792,863
|
655,576
|
731,883
|
Wisconsin
|
418,898
|
384,748
|
369,427
|
||||||||||||||||||
Mississippi
|
422,625
|
395,423
|
366,989
|
Wyoming
|
121,011
|
133,087
|
117,374
|
||||||||||||||||||
Missouri
|
795,956
|
682,860
|
630,289
|
Total
|
$
|
20,188,207
|
$
|
19,026,995
|
$
|
18,128,207
|
|||||||||||||||
·
|
terms
of up to 35 years on a senior secured
basis;
|
·
|
either
amortizing or bullet loans with serial payment
structures;
|
·
|
used
to finance electric plant and equipment which typically have a useful life
equal to or in excess of the loan
maturity;
|
·
|
borrower
can select a fixed interest rate for periods of one to 35 years or a
variable rate; and
|
·
|
may
be divided into various tranches with either a fixed or variable interest
rate for each tranche.
|
·
|
terms
not exceeding 10 years on a senior secured
basis;
|
·
|
borrower
can select a fixed interest rate for periods from one year to the final
loan maturity or a variable interest
rate;
|
·
|
may
be divided into various tranches with either a fixed or variable interest
rate for each tranche.
|
(dollar
amounts in thousands)
|
2009
|
2008
|
|||||||||||||||||||
Total
by loan type:
|
Secured
|
%
|
Unsecured
|
%
|
Secured
|
%
|
Unsecured
|
%
|
|||||||||||||
Long-term
fixed-rate loans
|
$
|
14,044,469
|
96
|
%
|
$
|
557,896
|
4
|
%
|
$
|
14,732,058
|
97
|
%
|
$
|
472,556
|
3
|
%
|
|||||
Long-term
variable-rate loans
|
2,835,451
|
87
|
408,265
|
13
|
1,728,803
|
92
|
153,292
|
8
|
|||||||||||||
Loans
guaranteed by RUS
|
243,997
|
100
|
-
|
-
|
250,169
|
100
|
-
|
-
|
|||||||||||||
Short-term
loans
|
233,179
|
11
|
1,864,950
|
89
|
165,226
|
10
|
1,524,891
|
90
|
|||||||||||||
Total
loans
|
$
|
17,357,096
|
86
|
$
|
2,831,111
|
14
|
$
|
16,876,256
|
89
|
$
|
2,150,739
|
11
|
|||||||||
Total
by segment:
|
|||||||||||||||||||||
National
Rural
|
$
|
15,562,761
|
86
|
%
|
$
|
2,528,572
|
14
|
%
|
$
|
15,021,067
|
89
|
%
|
$
|
1,865,340
|
11
|
%
|
|||||
RTFC
|
1,443,395
|
86
|
236,759
|
14
|
1,497,487
|
87
|
229,027
|
13
|
|||||||||||||
NCSC
|
350,940
|
84
|
65,780
|
16
|
357,702
|
86
|
56,372
|
14
|
|||||||||||||
Total
loans
|
$
|
17,357,096
|
86
|
$
|
2,831,111
|
14
|
$
|
16,876,256
|
89
|
$
|
2,150,739
|
11
|
(dollar
amounts in thousands)
|
2009
|
2008
|
|||||||||
Long-term
tax-exempt bonds
|
$
|
644,540
|
$
|
498,495
|
|||||||
Indemnifications
of tax benefit transfers
|
81,574
|
94,821
|
|||||||||
Letters
of credit
|
450,659
|
343,424
|
|||||||||
Other
guarantees
|
98,682
|
100,400
|
|||||||||
Total
|
$
|
1,275,455
|
$
|
1,037,140
|
(dollar
amounts in thousands)
|
|||||||||||||||
National
Rural:
|
2009
|
2008
|
|||||||||||||
Distribution
|
$
|
264,084
|
21
|
%
|
$
|
184,459
|
18
|
%
|
|||||||
Power
supply
|
945,624
|
74
|
786,455
|
76
|
|||||||||||
Statewide
and associate
|
23,625
|
2
|
22,785
|
2
|
|||||||||||
National
Rural Total
|
1,233,333
|
97
|
993,699
|
96
|
|||||||||||
RTFC
|
500
|
-
|
260
|
-
|
|||||||||||
NCSC
|
41,622
|
3
|
43,181
|
4
|
|||||||||||
Total
|
$
|
1,275,455
|
100
|
%
|
$
|
1,037,140
|
100
|
%
|
(dollar
amounts in thousands)
|
|||||||||||||||||||||||||||
State/Territory
|
2009
|
2008
|
2007
|
State/Territory
|
2009
|
2008
|
2007
|
||||||||||||||||||||
Alabama
|
$
|
198,506
|
$
|
72,070
|
$
|
72,348
|
Missouri
|
$
|
68,363
|
$
|
75,102
|
$
|
85,268
|
||||||||||||||
Alaska
|
3,860
|
1,900
|
1,900
|
Montana
|
12,772
|
9,056
|
9,029
|
||||||||||||||||||||
Arizona
|
29,869
|
33,745
|
38,301
|
Nebraska
|
7
|
4
|
6
|
||||||||||||||||||||
Arkansas
|
6,166
|
8,008
|
12,027
|
Nevada
|
37,452
|
5,400
|
5,400
|
||||||||||||||||||||
California
|
6,247
|
6,110
|
1,010
|
New
Hampshire
|
24,763
|
32,767
|
34,550
|
||||||||||||||||||||
Colorado
|
52,690
|
53,467
|
54,236
|
New
Mexico
|
1,036
|
1,048
|
1,020
|
||||||||||||||||||||
Delaware
|
8
|
-
|
-
|
New
York
|
113
|
-
|
-
|
||||||||||||||||||||
District
of Columbia
|
16,000
|
17,448
|
20,998
|
North
Carolina
|
105,905
|
99,729
|
100,630
|
||||||||||||||||||||
Florida
|
2,851
|
3,725
|
4,623
|
North
Dakota
|
5,825
|
6,474
|
7,115
|
||||||||||||||||||||
Georgia
|
23,718
|
26,775
|
26,027
|
Ohio
|
7,000
|
8,000
|
5,500
|
||||||||||||||||||||
Hawaii
|
1,300
|
Oklahoma
|
764
|
754
|
3,056
|
||||||||||||||||||||||
Idaho
|
3,173
|
3,173
|
3,173
|
Oregon
|
28,511
|
29,034
|
29,439
|
||||||||||||||||||||
Illinois
|
82,927
|
229
|
219
|
Pennsylvania
|
18,747
|
17,416
|
17,519
|
||||||||||||||||||||
Indiana
|
23
|
13
|
7
|
South
Carolina
|
506
|
6,300
|
7,819
|
||||||||||||||||||||
Iowa
|
6,961
|
8,271
|
8,240
|
South
Dakota
|
19
|
20
|
6
|
||||||||||||||||||||
Kansas
|
41,318
|
60,797
|
55,472
|
Tennessee
|
3,939
|
1,460
|
296
|
||||||||||||||||||||
Kentucky
|
91,741
|
102,423
|
124,013
|
Texas
|
216,443
|
194,214
|
152,307
|
||||||||||||||||||||
Louisiana
|
501
|
389
|
4,733
|
Utah
|
6,961
|
13,495
|
17,193
|
||||||||||||||||||||
Maine
|
4
|
2
|
1
|
Vermont
|
1,350
|
1,250
|
3,500
|
||||||||||||||||||||
Maryland
|
52,078
|
11,725
|
25,266
|
Virginia
|
2,874
|
3,447
|
3,935
|
||||||||||||||||||||
Michigan
|
5,236
|
2,232
|
2,123
|
Washington
|
19,050
|
19,050
|
23,171
|
||||||||||||||||||||
Minnesota
|
1,601
|
3,025
|
10,585
|
Wisconsin
|
305
|
320
|
32
|
||||||||||||||||||||
Mississippi
|
81,143
|
83,549
|
88,312
|
Wyoming
|
4,829
|
13,724
|
13,969
|
||||||||||||||||||||
Total
|
$
|
1,275,455
|
$
|
1,037,140
|
$
|
1,074,374
|
|
·
|
Utilities
in many states may still be regulated regarding rates on non-competitive
services, such as distribution;
|
|
·
|
20
states regulate the securities issued by utilities, including
cooperatives;
|
|
·
|
FERC
regulation of rates as well as terms and conditions of transmission
service;
|
|
·
|
The
fact that few competitors have demonstrated much interest in providing
electric energy to residential or rural
customers;
|
·
|
Distribution
systems own the lines to the customer and it would not be feasible for a
competitor to build a second line to serve the same customers in almost
all situations. Therefore, the distribution systems will still
be charging a fee or access tariff for the service of delivering power,
regardless of who supplies the
power.
|
(dollar amounts in
millions)
|
2008
|
2007
|
||||||||
National
Rural
|
$
|
16,787
|
27
|
%
|
$
|
15,888
|
27
|
%
|
||
RUS
|
32,238
|
51
|
30,884
|
53
|
||||||
Other
lenders
|
13,841
|
22
|
11,924
|
20
|
||||||
Total
|
$
|
62,866
|
100
|
%
|
$
|
58,696
|
100
|
%
|
(dollar amounts in
millions)
|
2008
|
2007
|
|||
Total
by type:
|
|||||
Distribution
|
$
|
12,710
|
$
|
12,226
|
|
Power
supply
|
2,895
|
2,678
|
|||
Total
loans outstanding
|
15,605
|
14,904
|
|||
Guarantees
|
1,182
|
984
|
|||
Total
long-term exposure
|
$
|
16,787
|
$
|
15,888
|
1.
|
Competition
- to be achieved by requiring all carriers to interconnect with all others
and requiring LECs to provide competitors with access to elements of their
networks.
|
2.
|
Universal
service - that is, a mandate that telecommunications service in rural
areas of the U.S. be comparable in quality and price to service in urban
areas.
|
3.
|
Deregulation
– reducing the regulatory burden on incumbent LECs to allow them to
compete with new, largely unregulated
entities.
|
4.
|
Fostering
advanced telecommunications and information technologies – the dynamic
environment created by a competitive telecommunications marketplace should
result in new products and
services.
|
Item
1A.
|
Risk
Factors.
|
·
|
we
extended additional loans and/or guarantees to the current ten largest
borrowers;
|
·
|
our
total loans and/or guarantees outstanding decreased, with a
disproportionately large share of the decrease to borrowers not in the
current ten largest; or
|
·
|
we
advanced large new loans and/or guarantees to one of the borrowers below
the ten largest.
|
Item
1B.
|
Unresolved
Staff Comments.
|
Item
2.
|
Properties
|
Item
3.
|
Legal
Proceedings.
|
Item
4.
|
Submission
of Matters to a Vote of Security
Holders.
|
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.
|
Item
6.
|
Selected
Financial Data.
|
(dollar
amounts in thousands)
|
2009
|
2008 (10)
|
2007 (10)
|
2006 (10)
|
2005 (10)
|
|||||||||||||||||
For
the year ended May 31:
|
||||||||||||||||||||||
Interest
income
|
$
|
1,070,764
|
$
|
1,051,393
|
$
|
1,039,650
|
$
|
995,882
|
$
|
988,174
|
||||||||||||
Net
interest income
|
135,743
|
120,125
|
47,896
|
18,682
|
46,776
|
|||||||||||||||||
Derivative
cash settlements (1)
|
112,989
|
27,033
|
86,442
|
80,883
|
78,287
|
|||||||||||||||||
Derivative
forward value (1)
|
(160,017
|
)
|
(98,743
|
)
|
(79,281
|
)
|
28,805
|
25,849
|
||||||||||||||
Foreign
currency adjustments (2)
|
-
|
-
|
(14,554
|
)
|
(22,594
|
)
|
(22,893
|
)
|
||||||||||||||
(Loss)
income prior to income taxes, minority
interest
(3)
|
(78,871
|
)
|
36,311
|
16,541
|
105,762
|
126,561
|
||||||||||||||||
Net
(loss) income
|
(69,870
|
)
|
45,745
|
11,701
|
95,497
|
122,503
|
||||||||||||||||
Fixed
charge coverage ratio (TIER) (4)(5)
|
-
|
1.05
|
1.01
|
1.10
|
1.13
|
|||||||||||||||||
Adjusted
fixed charge coverage ratio
|
||||||||||||||||||||||
(Adjusted
TIER)
(6)
|
1.10
|
1.15
|
1.12
|
1.11
|
1.14
|
|||||||||||||||||
As
of May 31:
|
||||||||||||||||||||||
Loans
to members
|
$
|
20,192,309
|
$
|
19,029,040
|
$
|
18,131,873
|
$
|
18,363,954
|
$
|
18,974,108
|
||||||||||||
Allowance
for loan losses
|
(622,960
|
)
|
(514,906
|
)
|
(561,663
|
)
|
(611,443
|
)
|
(589,749
|
)
|
||||||||||||
Assets
|
20,982,705
|
19,379,381
|
18,575,181
|
19,179,621
|
20,060,314
|
|||||||||||||||||
Short-term
debt (7)
|
4,867,864
|
6,327,453
|
4,427,123
|
5,343,824
|
7,952,579
|
|||||||||||||||||
Long-term
debt (8)
|
12,720,055
|
10,173,587
|
11,295,219
|
10,642,028
|
8,701,955
|
|||||||||||||||||
Subordinated
deferrable debt (9)
|
311,440
|
311,440
|
311,440
|
486,440
|
685,000
|
|||||||||||||||||
Members'
subordinated certificates
|
1,740,054
|
1,406,779
|
1,381,447
|
1,427,960
|
1,490,750
|
|||||||||||||||||
Members'
equity (1)
|
604,316
|
613,082
|
566,286
|
545,351
|
523,583
|
|||||||||||||||||
Total
equity
|
508,938
|
665,965
|
710,041
|
784,408
|
764,934
|
|||||||||||||||||
Guarantees
|
1,275,455
|
1,037,140
|
1,074,374
|
1,078,980
|
1,157,752
|
|||||||||||||||||
Leverage
ratio (5)
|
42.71
|
29.64
|
26.64
|
24.80
|
26.71
|
|||||||||||||||||
Adjusted
leverage ratio (6)
|
7.11
|
7.50
|
6.81
|
6.38
|
6.50
|
|||||||||||||||||
Debt
to equity ratio (5)
|
40.21
|
28.08
|
25.13
|
23.42
|
25.20
|
|||||||||||||||||
Adjusted
debt to equity ratio (6)
|
6.63
|
7.06
|
6.37
|
5.97
|
6.07
|
Item
7.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations.
|
·
|
fixed-rate
or variable-rate secured collateral trust
bonds;
|
·
|
fixed-rate
or variable-rate unsecured medium-term notes including retail
notes;
|
·
|
commercial
paper;
|
·
|
bank
bid note agreements; and
|
·
|
fixed-rate
subordinated deferrable debt.
|
·
|
The
$2,707 million increase in average debt outstanding at May 31, 2009
compared with May 31, 2008.
|
·
|
Higher
interest rates on our collateral trust bonds. In October 2008,
we issued $1 billion of collateral trust bonds at a rate of 10.375 percent
which was significantly higher than the $900 million five-year collateral
trust bonds issued at a rate of 5.50 percent in June 2008 due to the
severe credit environment in the fall of calendar year
2008.
|
·
|
For
a short period of time during the latter part of calendar year 2008, the
cost of issuing commercial paper increased because of disruptions in the
financial markets.
|
·
|
The
lower interest rate environment: Lower interest rates on our
variable-rate debt and commercial paper funding particularly in the latter
half of the fiscal year.
|
·
|
Lower
cost funding from Federal Agricultural Mortgage Corporation (“Farmer
Mac”): Notes issued under note purchase agreements with Farmer
Mac totaling $700 million at a blended spread over three-month LIBOR of
119 basis points and $500 million at a blended fixed rate of 3.871 percent
between December 2008 and May 2009.
|
·
|
Lower
cost funding from the Rural Economic Development Loan and Grant (“REDLG”)
program: In September 2008, $500 million was
advanced to us under the REDLG program at an interest rate of 57.5 basis
points above the comparable U.S. Treasury
rate.
|
·
|
Lower
cost retail notes: Retail notes increased $783 million from May 31, 2008
to May 31, 2009. We issued retail notes at spread levels well below the
indicative collateral trust bond funding levels with a weighted-average
interest rate of 4.50 percent.
|
·
|
the
review of the borrower's audited financial statements and interim
financial statements if available,
|
·
|
the
borrower's payment history,
|
·
|
communication
with the borrower,
|
·
|
economic
conditions in the borrower's service
territory,
|
·
|
pending
legal action involving the
borrower,
|
·
|
restructure
agreements between us and the borrower,
and
|
·
|
estimates
of the value of the borrower's assets that have been pledged as collateral
to secure our loans.
|
·
|
the
borrower has a history of late
payments;
|
·
|
the
borrower's financial results do not satisfy loan financial
covenants;
|
·
|
the
borrower contacts us to discuss pending financial difficulties;
or
|
·
|
for
some other reason, we believe the borrower's financial results could
deteriorate resulting in an elevated potential for
loss.
|
·
|
the
borrower's financial condition;
|
·
|
the
borrower’s payment history;
|
·
|
our
estimate of the collateral value;
|
·
|
pending
litigation, if any; and
|
·
|
other
factors.
|
·
|
changes
in collateral value;
|
·
|
deterioration
in financial condition;
|
·
|
bankruptcy
of the borrower;
|
·
|
payment
default on our loans; and
|
·
|
other
factors.
|
·
|
Internal
risk ratings - We maintain risk ratings for each credit facility
outstanding to our borrowers. The ratings are updated at least
annually and are based on the
following:
|
-
|
general
financial condition of the
borrower;
|
-
|
our
estimated value of the collateral securing our
loans;
|
-
|
our
judgment of the borrower's
management;
|
-
|
our
judgment of the borrower's competitive position within its service
territory and industry;
|
-
|
our
estimate of potential impact of proposed regulation and litigation;
and
|
-
|
other
factors specific to individual borrowers or classes of
borrowers.
|
·
|
Standard
corporate bond default table - The table provides expected default rates
based on rating level and the remaining maturity of the
bond. We use the standard default table for all corporate bonds
published by Standard and Poor's Corporation to assist in estimating our
reserve levels because we have limited history from which to develop loss
expectations and because we have been unable to identify utility specific
default rates.
|
·
|
Recovery
rates - Estimated recovery rates based on historical experience of loan
balance at the time of default compared with the total loss on the loan to
date.
|
(dollar
amounts in thousands)
|
2009
|
2008
|
|||
Balance
Sheet:
|
|||||
Total
equity, as previously reported
|
$
|
508,938
|
$
|
665,965
|
|
Increase
for SFAS 160 reclassification
|
|||||
of
noncontrolling interests
|
10,162
|
14,247
|
|||
Total
equity, as adjusted
|
$
|
519,100
|
$
|
680,212
|
For
the year ended May 31,
|
Increase/
|
|||||||||||||||
(dollar
amounts in thousands)
|
2009
|
2008
|
(Decrease)
|
|||||||||||||
Interest
income
|
$
|
1,070,764
|
$
|
1,051,393
|
$
|
19,371
|
||||||||||
Interest
expense
|
(935,021
|
)
|
(931,268
|
)
|
(3,753
|
)
|
||||||||||
Net
interest income
|
135,743
|
120,125
|
15,618
|
|||||||||||||
(Provision
for) recovery of loan losses
|
(113,699
|
)
|
30,262
|
(143,961
|
)
|
|||||||||||
Net
interest income after (provision for) recovery of loan
losses
|
22,044
|
150,387
|
(128,343
|
)
|
||||||||||||
Non-interest
income:
|
||||||||||||||||
Fee
and other income
|
13,163
|
19,608
|
(6,445
|
)
|
||||||||||||
Derivative
cash settlements
|
112,989
|
27,033
|
85,956
|
|||||||||||||
Results
of operations of foreclosed assets
|
3,774
|
7,528
|
(3,754
|
)
|
||||||||||||
Total
non-interest income
|
129,926
|
54,169
|
75,757
|
|||||||||||||
Non-interest
(expense) income:
|
||||||||||||||||
Salaries
and employee benefits
|
(36,865
|
)
|
(36,428
|
)
|
(437
|
)
|
||||||||||
Other
general and administrative expenses
|
(23,977
|
)
|
(24,041
|
)
|
64
|
|||||||||||
(Provision
for) recovery of guarantee liability
|
(1,615
|
)
|
3,104
|
(4,719
|
)
|
|||||||||||
Market
adjustment on foreclosed assets
|
(8,014
|
)
|
(5,840
|
)
|
(2,174
|
)
|
||||||||||
Derivative
forward value
|
(160,017
|
)
|
(98,743
|
)
|
(61,274
|
)
|
||||||||||
Loss
on sale of loans
|
-
|
(676
|
)
|
676
|
||||||||||||
Loss
on early extinguishment of debt
|
-
|
(5,509
|
)
|
5,509
|
||||||||||||
Other
|
(353
|
)
|
(112
|
)
|
(241
|
)
|
||||||||||
Total
non-interest expense
|
(230,841
|
)
|
(168,245
|
)
|
(62,596
|
)
|
||||||||||
(Loss)
income prior to income taxes and minority interest
|
(78,871
|
)
|
36,311
|
(115,182
|
)
|
|||||||||||
Income
tax benefit
|
5,101
|
3,335
|
1,766
|
|||||||||||||
Minority
interest, net of income taxes
|
3,900
|
6,099
|
(2,199
|
)
|
||||||||||||
Net
(loss) income
|
$
|
(69,870
|
)
|
$
|
45,745
|
$
|
(115,615
|
)
|
||||||||
TIER
(1)
|
-
|
1.05
|
||||||||||||||
Adjusted
TIER (2)
|
1.10
|
1.15
|
Average
volume
|
Interest
income
|
Average
yield
|
|||||||||||||||||
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
||||||||||
Long-term
fixed-rate loans (1)
|
$
|
15,052,425
|
$
|
14,782,141
|
$
|
14,542,951
|
$
|
890,367
|
$
|
872,488
|
$
|
833,247
|
5.92
|
%
|
5.90
|
%
|
5.73
|
%
|
|
Long-term
variable-rate loans (1)
|
2,255,538
|
1,803,553
|
2,086,792
|
92,975
|
86,787
|
114,786
|
4.12
|
4.81
|
5.50
|
||||||||||
Short-term
loans (1)
|
1,895,563
|
1,310,313
|
1,028,585
|
75,604
|
77,145
|
72,632
|
3.99
|
5.89
|
7.06
|
||||||||||
Non-performing
loans
|
495,014
|
504,310
|
534,701
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||
Total
|
19,698,540
|
18,400,317
|
18,193,029
|
1,058,946
|
1,036,420
|
1,020,665
|
5.38
|
5.63
|
5.61
|
||||||||||
Investments
(2)
|
489,228
|
234,831
|
215,409
|
5,683
|
7,394
|
9,662
|
1.16
|
3.15
|
4.49
|
||||||||||
Fee
income
|
-
|
-
|
-
|
6,135
|
7,579
|
9,323
|
-
|
-
|
-
|
||||||||||
Total
|
$
|
20,187,768
|
$
|
18,635,148
|
$
|
18,408,438
|
$
|
1,070,764
|
$
|
1,051,393
|
$
|
1,039,650
|
5.30
|
%
|
5.64
|
%
|
5.65
|
%
|
|
Average
volume
|
Interest
expense
|
Average
cost
|
|||||||||||||||||
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
||||||||||
Commercial
paper and bank bid
|
|||||||||||||||||||
notes
(1)
|
$
|
3,188,189
|
$
|
2,719,598
|
$
|
3,170,196
|
$
|
58,688
|
$
|
122,786
|
$
|
178,687
|
1.84
|
%
|
4.51
|
%
|
5.64
|
%
|
|
Medium-term
notes (1)
|
5,278,445
|
4,101,955
|
5,336,846
|
326,313
|
330,193
|
363,760
|
6.18
|
8.05
|
6.82
|
||||||||||
Collateral
trust bonds (1)
|
5,232,731
|
4,880,885
|
4,226,306
|
290,152
|
243,579
|
218,523
|
5.54
|
4.99
|
5.17
|
||||||||||
Subordinated
deferrable debt (1)
|
294,592
|
301,771
|
476,764
|
19,663
|
19,663
|
33,089
|
6.67
|
6.52
|
6.94
|
||||||||||
Subordinated
certificates (1)
|
1,428,083
|
1,326,216
|
1,317,373
|
55,330
|
48,717
|
47,852
|
3.87
|
3.67
|
3.63
|
||||||||||
Long-term
private debt (1)
|
3,595,048
|
2,980,097
|
2,499,501
|
164,306
|
151,694
|
130,568
|
4.57
|
5.09
|
5.22
|
||||||||||
Total
|
19,017,088
|
16,310,522
|
17,026,986
|
914,452
|
916,632
|
972,479
|
4.81
|
5.62
|
5.71
|
||||||||||
Debt
issuance costs (2)
|
-
|
-
|
-
|
10,158
|
9,605
|
12,328
|
-
|
-
|
-
|
||||||||||
Fee
expense (3)
|
-
|
-
|
-
|
10,411
|
5,031
|
6,947
|
-
|
-
|
-
|
||||||||||
Total
|
$
|
19,017,088
|
$
|
16,310,522
|
$
|
17,026,986
|
$
|
935,021
|
$
|
931,268
|
$
|
991,754
|
4.92
|
%
|
5.71
|
%
|
5.82
|
%
|
|
Derivative
cash settlements (4)
|
$
|
12,764,394
|
$
|
13,055,651
|
$
|
12,631,758
|
$
|
112,989
|
$
|
27,033
|
$
|
86,442
|
0.89
|
%
|
0.21
|
%
|
0.68
|
%
|
|
Adjusted
interest expense (5)
|
19,017,088
|
16,310,522
|
17,026,986
|
822,032
|
904,235
|
905,312
|
4.32
|
5.54
|
5.32
|
||||||||||
Net
interest income/Net yield
|
$
|
135,743
|
$
|
120,125
|
$
|
47,896
|
0.38
|
%
|
(0.07
|
)%
|
(0.17
|
)%
|
|||||||
Adjusted
net interest
|
|||||||||||||||||||
income/Adjusted
net yield (5)
|
248,732
|
147,158
|
134,338
|
0.98
|
0.10
|
0.33
|
Analysis
of changes in net interest income
|
||||||||||||||||||
2009
vs. 2008
|
2008
vs. 2007
|
|||||||||||||||||
Increase
(decrease)
due
to change in:
|
Increase
(decrease)
due
to change in:
|
|||||||||||||||||
(dollar
amounts in thousands)
|
Average
volume
(1)
|
Average
rate
(2)
|
Net
change
|
Average
volume
(1)
|
Average
rate
(2)
|
Net
change
|
||||||||||||
Increase
(decrease) in interest income:
|
||||||||||||||||||
Long-term
fixed-rate loans
|
$
|
15,952
|
$
|
1,927
|
$
|
17,879
|
$
|
13,705
|
$
|
25,536
|
$
|
39,241
|
||||||
Long-term
variable-rate loans
|
21,750
|
(15,562
|
)
|
6,188
|
(15,580
|
)
|
(12,419
|
)
|
(27,999
|
)
|
||||||||
Short-term
loans
|
34,457
|
(35,998
|
)
|
(1,541
|
)
|
19,894
|
(15,381
|
)
|
4,513
|
|||||||||
Total
interest income on loans
|
72,159
|
(49,633
|
)
|
22,526
|
18,019
|
(2,264
|
)
|
15,755
|
||||||||||
Investments
|
8,010
|
(9,721
|
)
|
(1,711
|
)
|
871
|
(3,139
|
)
|
(2,268
|
)
|
||||||||
Fee
income
|
-
|
(1,444
|
)
|
(1,444
|
)
|
-
|
(1,744
|
)
|
(1,744
|
)
|
||||||||
Total
interest income
|
$
|
80,169
|
$
|
(60,798
|
)
|
$
|
19,371
|
$
|
18,890
|
$
|
(7,147
|
)
|
$
|
11,743
|
||||
Increase
(decrease) in interest expense:
|
||||||||||||||||||
Commercial
paper and bank bid notes
|
$
|
21,156
|
$
|
(85,254
|
)
|
$
|
(64,098
|
)
|
$
|
(25,398
|
)
|
$
|
(30,503
|
)
|
$
|
(55,901
|
)
|
|
Medium-term
notes
|
94,703
|
(98,583
|
)
|
(3,880
|
)
|
(84,170
|
)
|
50,603
|
(33,567
|
)
|
||||||||
Collateral
trust bonds
|
17,559
|
29,014
|
46,573
|
33,845
|
(8,789
|
)
|
25,056
|
|||||||||||
Subordinated
deferrable debt
|
(468
|
)
|
468
|
-
|
(12,145
|
)
|
(1,281
|
)
|
(13,426
|
)
|
||||||||
Subordinated
certificates
|
3,742
|
2,871
|
6,613
|
321
|
544
|
865
|
||||||||||||
Long-term
private debt
|
31,303
|
(18,691
|
)
|
12,612
|
25,105
|
(3,979
|
)
|
21,126
|
||||||||||
Total
interest expense on debt
|
167,995
|
(170,175
|
)
|
(2,180
|
)
|
(62,442
|
)
|
6,595
|
(55,847
|
)
|
||||||||
Debt
issuance costs
|
-
|
553
|
553
|
-
|
(2,723
|
)
|
(2,723
|
)
|
||||||||||
Fee
expense
|
-
|
5,380
|
5,380
|
-
|
(1,916
|
)
|
(1,916
|
)
|
||||||||||
Total
interest expense
|
167,995
|
(164,242
|
)
|
3,753
|
(62,442
|
)
|
1,956
|
(60,486
|
)
|
|||||||||
Net
interest income
|
$
|
(87,826
|
)
|
$
|
103,444
|
$
|
15,618
|
$
|
81,332
|
$
|
(9,103
|
)
|
$
|
72,229
|
||||
Derivative
cash settlements (3)
|
$
|
(603
|
)
|
$
|
86,559
|
$
|
85,956
|
$
|
2,901
|
$
|
(62,310
|
)
|
$
|
(59,409
|
)
|
|||
Adjusted
interest expense (4)
|
150,049
|
(232,252
|
)
|
(82,203
|
)
|
(38,094
|
)
|
37,017
|
(1,077
|
)
|
For
the year ended May 31,
|
Increase/
|
||||||||||||||||
(dollar
amounts in thousands)
|
2008
|
2007
|
(Decrease)
|
||||||||||||||
Interest
income
|
$
|
1,051,393
|
$
|
1,039,650
|
$
|
11,743
|
|||||||||||
Interest
expense
|
(931,268
|
)
|
(991,754
|
)
|
60,486
|
||||||||||||
Net
interest income
|
120,125
|
47,896
|
72,229
|
||||||||||||||
Recovery
of loan losses
|
30,262
|
6,922
|
23,340
|
||||||||||||||
Net
interest income after recovery of loan losses
|
150,387
|
54,818
|
95,569
|
||||||||||||||
Non-interest
income:
|
|||||||||||||||||
Fee
and other income
|
19,608
|
16,106
|
3,502
|
||||||||||||||
Derivative
cash settlements
|
27,033
|
86,442
|
(59,409
|
)
|
|||||||||||||
Results
of operations of foreclosed assets
|
7,528
|
9,758
|
(2,230
|
)
|
|||||||||||||
Total
non-interest income
|
54,169
|
112,306
|
(58,137
|
)
|
|||||||||||||
Non-interest
(expense) income:
|
|||||||||||||||||
Salaries
and employee benefits
|
(36,428
|
)
|
(33,817
|
)
|
(2,611
|
)
|
|||||||||||
Other
general and administrative expenses
|
(24,041
|
)
|
(18,072
|
)
|
(5,969
|
)
|
|||||||||||
Recovery
of guarantee liability
|
3,104
|
1,700
|
1,404
|
||||||||||||||
Market
adjustment on foreclosed assets
|
(5,840
|
)
|
-
|
(5,840
|
)
|
||||||||||||
Derivative
forward value
|
(98,743
|
)
|
(79,281
|
)
|
(19,462
|
)
|
|||||||||||
Foreign
currency adjustments
|
-
|
(14,554
|
)
|
14,554
|
|||||||||||||
Loss
on sale of loans
|
(676
|
)
|
(1,584
|
)
|
908
|
||||||||||||
Loss
on early extinguishment of debt
|
(5,509
|
)
|
(4,806
|
)
|
(703
|
)
|
|||||||||||
Other
|
(112
|
)
|
(169
|
)
|
(57
|
)
|
|||||||||||
Total
non-interest expense
|
(168,245
|
)
|
(150,583
|
)
|
(17,662
|
)
|
|||||||||||
Income
prior to income taxes and minority interest
|
36,311
|
16,541
|
19,770
|
||||||||||||||
Income
tax benefit (expense)
|
3,335
|
(2,396
|
)
|
5,731
|
|||||||||||||
Minority
interest, net of income taxes
|
6,099
|
(2,444
|
)
|
8,543
|
|||||||||||||
Net
income
|
$
|
45,745
|
$
|
11,701
|
$
|
34,044
|
|||||||||||
TIER
|
1.05
|
1.01
|
|||||||||||||||
Adjusted
TIER (1)
|
1.15
|
1.12
|
For
the year ended May 31,
|
|||||||||||
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
||||||||
(Loss)
income prior to cumulative effect of
|
|||||||||||
change
in accounting principle
|
$
|
(69,870
|
)
|
$
|
45,745
|
$
|
11,701
|
||||
Add:
fixed charges
|
935,194
|
931,268
|
991,754
|
||||||||
Less:
interest capitalized
|
(173
|
)
|
-
|
-
|
|||||||
Earnings
available for fixed charges
|
$
|
865,151
|
$
|
977,013
|
$
|
1,003,455
|
|||||
Total
fixed charges:
|
|||||||||||
Interest
on all debt (including amortization of
|
|||||||||||
discount
and issuance costs)
|
$
|
935,021
|
$
|
931,268
|
$
|
991,754
|
|||||
Interest
capitalized
|
173
|
-
|
-
|
||||||||
Total
fixed charges
|
$
|
935,194
|
$
|
931,268
|
$
|
991,754
|
|||||
Ratio
of earnings to fixed charges (1)
|
-
|
1.05
|
1.01
|
(dollar
amounts in millions)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||||||||
Loans
by type:
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
||||||||||||||||
Long-term
loans (1):
|
||||||||||||||||||||||||||
Long-term
fixed-rate loans
|
$
|
14,813
|
74
|
%
|
$
|
15,419
|
81
|
%
|
$
|
14,881
|
82
|
%
|
$
|
14,763
|
80
|
%
|
$
|
12,936
|
68
|
%
|
||||||
Long-term
variable-rate loans
|
3,277
|
16
|
1,918
|
10
|
2,032
|
11
|
2,570
|
14
|
5,009
|
27
|
||||||||||||||||
Total
long-term loans
|
18,090
|
90
|
17,337
|
91
|
16,913
|
93
|
17,333
|
94
|
17,945
|
95
|
||||||||||||||||
Short-term
loans (2)
|
2,098
|
10
|
1,690
|
9
|
1,215
|
7
|
1,028
|
6
|
1,027
|
5
|
||||||||||||||||
Total
loans
|
$
|
20,188
|
100
|
%
|
$
|
19,027
|
100
|
%
|
$
|
18,128
|
100
|
%
|
$
|
18,361
|
100
|
%
|
$
|
18,972
|
100
|
%
|
||||||
Loans
by segment:
|
||||||||||||||||||||||||||
National
Rural:
|
||||||||||||||||||||||||||
Distribution
|
$
|
13,730
|
68
|
%
|
$
|
13,438
|
71
|
%
|
$
|
12,828
|
71
|
%
|
$
|
12,859
|
70
|
%
|
$
|
12,729
|
67
|
%
|
||||||
Power
supply
|
4,268
|
21
|
3,339
|
17
|
2,858
|
16
|
2,811
|
15
|
2,641
|
14
|
||||||||||||||||
Statewide
and associate
|
93
|
1
|
109
|
1
|
119
|
1
|
125
|
1
|
135
|
1
|
||||||||||||||||
National
Rural total
|
18,091
|
90
|
16,886
|
89
|
15,805
|
88
|
15,795
|
86
|
15,505
|
82
|
||||||||||||||||
RTFC
|
1,680
|
8
|
1,727
|
9
|
1,860
|
10
|
2,162
|
12
|
2,992
|
16
|
||||||||||||||||
NCSC
|
417
|
2
|
414
|
2
|
463
|
2
|
404
|
2
|
475
|
2
|
||||||||||||||||
Total
|
$
|
20,188
|
100
|
%
|
$
|
19,027
|
100
|
%
|
$
|
18,128
|
100
|
%
|
$
|
18,361
|
100
|
%
|
$
|
18,972
|
100
|
%
|
Increase/
|
|||||||||||||||
(dollar
amounts in thousands)
|
2009
|
2008
|
|||||||||||||
National
Rural:
|
Amount
|
%
of Total
|
Amount
|
%
of Total
|
(Decrease)
|
||||||||||
Distribution
|
$
|
13,994,595
|
65
|
%
|
$
|
13,622,829
|
68
|
%
|
$
|
371,766
|
|||||
Power
supply
|
5,213,868
|
24
|
4,125,567
|
20
|
1,088,301
|
||||||||||
Statewide
and associate
|
116,203
|
1
|
131,710
|
1
|
(15,507
|
)
|
|||||||||
National
Rural total
|
19,324,666
|
90
|
17,880,106
|
89
|
1,444,560
|
||||||||||
RTFC
|
1,680,654
|
8
|
1,726,774
|
9
|
(46,120
|
)
|
|||||||||
NCSC
|
458,342
|
2
|
457,255
|
2
|
1,087
|
||||||||||
Total
|
$
|
21,463,662
|
100
|
%
|
$
|
20,064,135
|
100
|
%
|
$
|
1,399,527
|
Increase/
|
||||||||||||||||
2009
|
2008
|
|||||||||||||||
(dollar
amounts in thousands)
|
Amount
|
%
of Total
|
Amount
|
%
of Total
|
(Decrease)
|
|||||||||||
Rural
local exchange carriers
|
$
|
1,476,402
|
88
|
%
|
$
|
1,518,197
|
88
|
%
|
$
|
(41,795
|
)
|
|||||
Cable
television providers
|
152,326
|
9
|
153,539
|
9
|
(1,213
|
)
|
||||||||||
Fiber
optic network providers
|
8,126
|
1
|
16,884
|
1
|
(8,758
|
)
|
||||||||||
Competitive
local exchange carriers
|
37,294
|
2
|
29,871
|
2
|
7,423
|
|||||||||||
Wireless
providers
|
3,924
|
-
|
4,579
|
-
|
(655
|
)
|
||||||||||
Other
|
2,582
|
-
|
3,704
|
-
|
(1,122
|
)
|
||||||||||
Total
|
$
|
1,680,654
|
100
|
%
|
$
|
1,726,774
|
100
|
%
|
$
|
(46,120
|
)
|
·
|
loans
outstanding, excluding loans guaranteed by
RUS;
|
·
|
our
guarantees of the borrower's
obligations;
|
·
|
unadvanced
loan commitments;
|
·
|
borrower
guarantees to us of another borrower's debt;
and
|
·
|
any
other indebtedness with us, unless guaranteed by the U.S.
Government.
|
|
|
2009
|
|
|
2008
|
Increase/
|
|||||||||
(dollar
amounts in thousands)
|
Amount
|
%
of Total
|
Amount
|
%
of Total
|
(Decrease)
|
||||||||||
Total
by type:
|
|||||||||||||||
Loans
|
$
|
3,686,956
|
17
|
%
|
$
|
3,395,865
|
17
|
%
|
$
|
291,091
|
|||||
Guarantees
|
363,883
|
2
|
164,740
|
1
|
199,143
|
||||||||||
Total
credit exposure to ten largest borrowers
|
$
|
4,050,839
|
19
|
%
|
$
|
3,560,605
|
18
|
%
|
$
|
490,234
|
|||||
Total
by segment:
|
|||||||||||||||
National
Rural
|
$
|
3,497,331
|
16
|
%
|
$
|
3,043,905
|
15
|
%
|
$
|
453,426
|
|||||
RTFC
|
523,758
|
3
|
491,700
|
3
|
32,058
|
||||||||||
NCSC
|
29,750
|
-
|
25,000
|
-
|
4,750
|
||||||||||
Total
credit exposure to ten largest borrowers
|
$
|
4,050,839
|
19
|
%
|
$
|
3,560,605
|
18
|
%
|
$
|
490,234
|
|
|
2009
|
|
|
2008
|
Increase/
|
|||||||||
(dollar
amounts in thousands)
|
Amount
|
%
of Total
|
Amount
|
%
of Total
|
(Decrease)
|
||||||||||
Total
by type:
|
|||||||||||||||
Loans
|
$
|
2,831,111
|
13
|
%
|
$
|
2,150,739
|
10
|
%
|
$
|
680,372
|
|||||
Guarantees
|
347,325
|
2
|
235,816
|
1
|
111,500
|
||||||||||
Total
unsecured credit exposure
|
$
|
3,178,436
|
15
|
%
|
$
|
2,386,555
|
11
|
%
|
$
|
791,881
|
|||||
Total
by segment:
|
|||||||||||||||
National
Rural
|
$
|
2,875,396
|
14
|
%
|
$
|
2,100,676
|
10
|
%
|
$
|
774,720
|
|||||
RTFC
|
237,259
|
1
|
229,287
|
1
|
7,972
|
||||||||||
NCSC
|
65,781
|
-
|
56,592
|
-
|
9,189
|
||||||||||
Total
unsecured credit exposure
|
$
|
3,178,436
|
15
|
%
|
$
|
2,386,555
|
11
|
%
|
$
|
791,881
|
·
|
distribution
and power supply loans typically amortize, while the debt issued under the
collateral trust bond indenture, the Farmer Mac debt issuance agreements
and the REDLG program have bullet
maturities;
|
·
|
individual
loans may become ineligible for various reasons, some of which may be
temporary; and
|
·
|
distribution
and power supply borrowers have the ability to prepay their
loans.
|
(dollar
amounts in thousands)
|
2008
|
2007
|
||||
Total
loans to members
|
$
|
20,188,207
|
$
|
19,026,995
|
||
Less:
Total secured debt or debt requiring
|
||||||
collateral
on deposit
|
(9,390,000
|
)
|
(8,115,000
|
)
|
||
Less:
Excess collateral pledged or on deposit
|
(2,566,723
|
)
|
(1,241,554
|
)
|
||
Unencumbered
loans
|
$
|
8,231,484
|
$
|
9,670,441
|
||
Unencumbered
loans as a percentage of total loans
|
41
|
%
|
51
|
%
|
·
|
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.
|
(dollar
amounts in thousands)
|
2004
|
2005
|
2006
|
2007
|
2008
|
2009
|
||||||||||||
Total
loans outstanding
|
$
|
20,488,523
|
$
|
18,972,068
|
$
|
18,360,905
|
$
|
18,128,207
|
$
|
19,026,995
|
$
|
20,188,207
|
||||||
Unpaid
principal balance:
|
||||||||||||||||||
Loans
>60 and < 90
|
||||||||||||||||||
days
past due
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||
Loans
> 90 days past due
|
-
|
480,963
|
488,392
|
492,795
|
499,234
|
523,758
|
||||||||||||
ICC
|
-
|
479,196
|
488,392
|
492,795
|
491,706
|
523,758
|
||||||||||||
Delinquency
rates:
|
||||||||||||||||||
Loans
>60 and < 90 days
|
||||||||||||||||||
past
due
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
||||||
Loans
> 90 days past due
|
0.00
|
2.54
|
2.66
|
2.72
|
2.62
|
2.59
|
||||||||||||
Delinquency
rates less ICC:
|
||||||||||||||||||
Loans
>60 and < 90 days
|
||||||||||||||||||
past
due
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
||||||
Loans
> 90 days past due
|
0.00
|
0.01
|
0.00
|
0.00
|
0.04
|
0.00
|
||||||||||||
Delinquency
information:
|
||||||||||||||||||
Loans
>30
|
$
|
-
|
$
|
480,963
|
$
|
488,392
|
$
|
492,795
|
$
|
499,234
|
$
|
523,758
|
||||||
Delinquency
rate >30
|
0.00
|
%
|
2.54
|
%
|
2.66
|
%
|
2.72
|
%
|
2.62
|
%
|
2.59
|
%
|
||||||
Delinquency
info less ICC:
|
||||||||||||||||||
Loans
>30
|
$
|
-
|
$
|
1,767
|
$
|
-
|
$
|
-
|
$
|
7,528
|
$
|
-
|
||||||
Delinquency
rate >30
|
0.00
|
%
|
0.01
|
%
|
0.00
|
%
|
0.00
|
%
|
0.04
|
%
|
0.00
|
%
|
·
|
interest
rates,
|
·
|
court
rulings,
|
·
|
changes
in collateral values,
|
·
|
changes
in economic conditions in the area in which the cooperative
operates,
|
·
|
changes
to the industry in which the cooperative operates,
and
|
·
|
likelihood
of repayment amount and timing.
|
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Non-performing loans
(1)
|
$
|
523,758
|
$
|
506,864
|
$
|
501,864
|
$
|
577,869
|
$
|
616,626
|
||||||||||
Percent
of loans outstanding
|
2.59
|
%
|
2.67
|
%
|
2.77
|
%
|
3.15
|
%
|
3.25
|
%
|
||||||||||
Percent
of loans and guarantees outstanding
|
2.44
|
2.52
|
2.61
|
2.97
|
3.06
|
|||||||||||||||
Restructured
loans
|
$
|
537,587
|
$
|
577,111
|
$
|
603,305
|
$
|
630,354
|
$
|
600,926
|
||||||||||
Percent
of loans outstanding
|
2.66
|
%
|
3.03
|
%
|
3.33
|
%
|
3.43
|
%
|
3.17
|
%
|
||||||||||
Percent
of loans and guarantees outstanding
|
2.50
|
2.88
|
3.14
|
3.24
|
2.99
|
|||||||||||||||
Total
non-performing and restructured loans
|
$
|
1,061,345
|
$
|
1,083,975
|
$
|
1,105,169
|
$
|
1,208,223
|
$
|
1,217,552
|
||||||||||
Percent
of loans outstanding
|
5.25
|
%
|
5.70
|
%
|
6.10
|
%
|
6.58
|
%
|
6.42
|
%
|
||||||||||
Percent
of loans and guarantees outstanding
|
4.94
|
5.40
|
5.75
|
6.21
|
6.05
|
|||||||||||||||
Total
non-accrual loans
|
$
|
1,014,585
|
$
|
1,026,121
|
$
|
1,046,561
|
$
|
1,147,009
|
$
|
1,210,210
|
||||||||||
Percent
of loans outstanding
|
5.03
|
%
|
5.39
|
%
|
5.77
|
%
|
6.25
|
%
|
6.38
|
%
|
||||||||||
Percent
of loans and guarantees outstanding
|
4.73
|
5.11
|
5.45
|
5.90
|
6.01
|
|||||||||||||||
For
the year ended May 31,
|
|||||||||||||||||||
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||
Beginning
balance
|
$
|
514,906
|
$
|
561,663
|
$
|
611,443
|
$
|
589,749
|
$
|
573,939
|
|||||||||
Provision
for (recovery of) loan losses
|
113,699
|
(30,262
|
)
|
(6,922
|
)
|
23,240
|
16,402
|
||||||||||||
Net
charge-offs
|
(5,645
|
)
|
(16,495
|
)
|
(42,858
|
)
|
(1,546
|
)
|
(592
|
)
|
|||||||||
Ending
balance
|
$
|
622,960
|
$
|
514,906
|
$
|
561,663
|
$
|
611,443
|
$
|
589,749
|
|||||||||
`
|
|||||||||||||||||||
Loan
loss allowance by segment:
|
|||||||||||||||||||
National
Rural
|
$
|
622,851
|
$
|
514,626
|
$
|
561,113
|
$
|
610,617
|
$
|
588,365
|
|||||||||
NCSC
|
109
|
280
|
550
|
826
|
1,384
|
||||||||||||||
Total
|
$
|
622,960
|
$
|
514,906
|
$
|
561,663
|
$
|
611,443
|
$
|
589,749
|
|||||||||
As
a percentage of total loans outstanding
|
3.09
|
%
|
2.71
|
%
|
3.10
|
%
|
3.33
|
%
|
3.11
|
%
|
|||||||||
As
a percentage of total non-performing loans outstanding
|
118.94
|
101.59
|
111.95
|
105.71
|
95.62
|
||||||||||||||
As
a percentage of total restructured loans outstanding
|
115.88
|
89.22
|
93.20
|
96.98
|
98.17
|
||||||||||||||
As
a percentage of total loans on non-accrual
|
61.40
|
50.18
|
53.67
|
53.31
|
48.73
|
(dollar
amounts in thousands)
|
2009
|
2008
|
Increase/
(Decrease)
|
|||||||||
Short-term
debt:
|
||||||||||||
Commercial
paper (1)
|
$
|
1,833,273
|
$
|
3,050,264
|
$
|
(1,216,991
|
)
|
|||||
Bank
bid notes
|
255,000
|
100,000
|
155,000
|
|||||||||
Term
loan
|
200,000
|
-
|
200,000
|
|||||||||
Long-term
debt with remaining maturities less than one year
|
2,579,591
|
3,177,189
|
(597,598
|
)
|
||||||||
Total
short-term debt
|
4,867,864
|
6,327,453
|
(1,459,589
|
)
|
||||||||
Long-term
debt:
|
||||||||||||
Collateral
trust bonds
|
4,968,771
|
2,886,580
|
2,082,191
|
|||||||||
Notes
payable
|
4,064,211
|
2,956,403
|
1,107,808
|
|||||||||
Medium-term
notes
|
3,687,073
|
4,330,604
|
(643,531
|
)
|
||||||||
Total
long-term debt
|
12,720,055
|
10,173,587
|
2,546,468
|
|||||||||
Subordinated
deferrable debt
|
311,440
|
311,440
|
-
|
|||||||||
Members'
subordinated certificates:
|
||||||||||||
Membership
certificates
|
642,960
|
649,465
|
(6,505
|
)
|
||||||||
Loan
certificates
|
692,806
|
654,047
|
38,759
|
|||||||||
Guarantee
certificates
|
126,193
|
103,267
|
22,926
|
|||||||||
Member
capital securities
|
278,095
|
-
|
278,095
|
|||||||||
Total
members' subordinated certificates
|
1,740,054
|
1,406,779
|
333,276
|
|||||||||
Total
debt outstanding
|
$
|
19,639,413
|
$
|
18,219,259
|
$
|
1,420,155
|
||||||
Percentage
of fixed-rate debt (2)
|
87
|
%
|
82
|
%
|
||||||||
Percentage
of variable-rate debt (3)
|
13
|
18
|
||||||||||
Percentage
of long-term debt
|
75
|
65
|
||||||||||
Percentage
of short-term debt
|
25
|
35
|
Debt
Instrument
|
Maturity
Range
|
Rate
Options
|
Market
|
Security
|
Credit
Rating (1)
|
Daily
liquidity fund
|
Demand
note
|
Rate
may change daily
|
Members
|
Unsecured
|
NA
|
Bank
bid notes
|
Up
to 3 months
|
Fixed
rate
|
Bank
institutions
|
Unsecured
|
NA
|
Commercial
paper
|
1
to 270 days
|
Fixed
rate
|
Public
capital markets and members
|
Unsecured
|
P-1,
A-1, F-1
|
Collateral
trust bonds
|
Range
from 2 years to 30 years
|
Fixed
or Variable rate
|
Public
capital markets
|
Secured
(2)
|
A1,
A+, A+
|
Medium-term
notes
|
Range
from 9 months to 30 years
|
Fixed
or Variable rate
|
Public
capital markets and members
|
Unsecured
|
A2,
A, A
|
Notes
payable
|
Range
from 1 year to 30 years
|
Fixed
or Variable rate
|
Private
placement
|
Varies
(3)
|
Varies
(3)
|
Subordinated
deferrable debt (4)
|
Up
to 39 yrs
|
Fixed
or Variable rate
|
Public
capital markets
|
Unsecured
(5)
|
A3,
BBB, A-
|
Subordinated
certificates
|
Up
to 100 years (6)
|
Varies
|
Members
|
Unsecured
(7)
|
NA
|
2009
|
2008
|
2007
|
||||||||||||||
(dollar
amounts in thousands)
|
Debt
Outstanding
|
Effective
Interest
Rate
|
Debt
Outstanding
|
Effective
Interest
Rate
|
Debt
Outstanding
|
Effective
Interest
Rate
|
||||||||||
Short-term
debt:
|
||||||||||||||||
Commercial
paper sold through dealers, net of discounts
|
$
|
594,533
|
0.33
|
%
|
$
|
1,511,953
|
2.33
|
%
|
$
|
1,017,879
|
5.36
|
%
|
||||
Commercial
paper sold directly to members, at par
|
934,897
|
0.35
|
1,275,809
|
2.31
|
1,383,090
|
5.29
|
||||||||||
Commercial
paper sold directly to non-members, at par
|
12,502
|
1.58
|
11,752
|
4.26
|
133,087
|
5.31
|
||||||||||
Total
commercial paper
|
1,541,932
|
0.35
|
2,799,514
|
2.33
|
2,534,056
|
5.32
|
||||||||||
Daily
liquidity fund sold directly to members
|
291,341
|
0.22
|
250,750
|
2.05
|
250,563
|
5.23
|
||||||||||
Term
loan
|
200,000
|
3.31
|
-
|
-
|
-
|
-
|
||||||||||
Bank
bid notes
|
255,000
|
1.49
|
100,000
|
2.80
|
100,000
|
5.43
|
||||||||||
Subtotal
short-term debt
|
2,288,273
|
0.72
|
3,150,264
|
2.32
|
2,884,619
|
5.32
|
||||||||||
Long-term
debt maturing within one year:
|
||||||||||||||||
Medium-term
notes sold through dealers
|
1,674,760
|
4.88
|
558,776
|
4.40
|
133,801
|
4.47
|
||||||||||
Medium-term
notes sold to members
|
502,396
|
4.65
|
288,634
|
4.77
|
231,158
|
5.37
|
||||||||||
Secured
collateral trust bonds
|
209,985
|
5.71
|
1,824,995
|
3.27
|
999,560
|
4.65
|
||||||||||
Secured
notes payable
|
187,800
|
1.20
|
500,000
|
4.66
|
-
|
-
|
||||||||||
Subordinated
deferrable debt (1)
|
-
|
-
|
-
|
-
|
175,000
|
7.65
|
||||||||||
Unsecured
notes payable
|
4,650
|
5.22
|
4,784
|
5.50
|
2,985
|
8.52
|
||||||||||
Total
long-term debt maturing within one year
|
2,579,591
|
4.64
|
3,177,189
|
3.83
|
1,542,504
|
5.09
|
||||||||||
Total
short-term debt
|
$
|
4,867,864
|
2.79
|
$
|
6,327,453
|
3.08
|
$
|
4,427,123
|
5.24
|
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
|||||||||
Weighted-average
maturity outstanding at year-end:
|
||||||||||||
Short-term
debt (1)
|
41
days
|
26
days
|
25
days
|
|||||||||
Long-term
debt maturing within one year
|
131
days
|
116
days
|
192
days
|
|||||||||
Total
|
89
days
|
71
days
|
83
days
|
|||||||||
Average
amount outstanding during the year:
|
||||||||||||
Short-term
debt (1)
|
$
|
3,280,895
|
$
|
2,892,202
|
$
|
3,372,639
|
||||||
Long-term
debt maturing within one year
|
2,688,165
|
2,961,714
|
1,692,083
|
|||||||||
Total
|
$
|
5,969,060
|
$
|
5,853,916
|
$
|
5,064,722
|
||||||
Maximum
amount outstanding at any month-end during the year:
|
||||||||||||
Short-term
debt (1)
|
$
|
4,183,905
|
$
|
3,259,556
|
$
|
3,847,814
|
||||||
Long-term
debt maturing within one year
|
4,224,816
|
3,981,567
|
2,549,356
|
·
|
$900
million of collateral trust bonds issued in June 2008 and due
2013;
|
·
|
$400
million of floating-rate collateral trust bonds issued in June 2008 and
due 2010;
|
·
|
$1,000
million of collateral trust bonds issued in October 2008 and due
2018;
|
·
|
$200
million term loan issued in January 2009 and paid off early in June
2009;
|
·
|
$500
million in fixed-rate notes to Farmer Mac with maturities through
2014;
|
·
|
$300
million in variable-rate notes to Farmer Mac with maturities through
2014;
|
·
|
$500
million from the FFB under a loan facility with a guarantee of repayment
by the RUS as part of the REDLG program issued in September 2008 and due
2028;
|
·
|
$400
million refinance of notes sold to Farmer Mac in March 2008 with
maturities through 2014; and
|
·
|
$1,565
million of various member and dealer MTNs including retail
notes.
|
(dollar
amounts in thousands)
|
2009
|
2008
|
Increase/
(Decrease)
|
||||||||||
Membership
fees
|
$
|
990
|
$
|
993
|
$
|
(3
|
)
|
||||||
Education
fund
|
1,592
|
1,484
|
108
|
||||||||||
Members'
capital reserve
|
187,098
|
187,409
|
(311
|
)
|
|||||||||
Allocated
net income
|
420,834
|
423,249
|
(2,415
|
)
|
|||||||||
Unallocated
net loss (1)
|
(6,198
|
)
|
(53
|
)
|
(6,145
|
)
|
|||||||
Total
members' equity
|
604,316
|
613,082
|
(8,766
|
)
|
|||||||||
Prior
years cumulative derivative forward
|
|||||||||||||
value
and foreign currency adjustments
|
44,056
|
131,551
|
(87,495
|
)
|
|||||||||
Year-to-date
derivative forward value loss (2)
|
(147,549
|
)
|
(87,495
|
)
|
(60,054
|
)
|
|||||||
Total
retained equity
|
500,823
|
657,138
|
(156,315
|
)
|
|||||||||
Accumulated
other comprehensive income
|
8,115
|
8,827
|
(712
|
)
|
|||||||||
Total
equity
|
$
|
508,938
|
$
|
665,965
|
$
|
(157,027
|
)
|
More
than 5
|
|||||||||||||||||||||||||||||
(dollar
amounts in millions)
|
2010
|
2011
|
2012
|
2013
|
2014
|
Years
|
Total
|
||||||||||||||||||||||
Long-term
debt due in less than one year
|
$
|
2,580
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
2,580
|
|||||||||||||||
Long-term
debt
|
-
|
1,831
|
1,948
|
123
|
2,181
|
6,637
|
12,720
|
||||||||||||||||||||||
Subordinated
deferrable debt
|
-
|
-
|
-
|
-
|
-
|
311
|
311
|
||||||||||||||||||||||
Members'
subordinated certificates
(1)
|
17
|
15
|
55
|
23
|
15
|
1,374
|
1,499
|
||||||||||||||||||||||
Operating
leases (2)
|
4
|
4
|
1
|
-
|
-
|
-
|
9
|
||||||||||||||||||||||
Contractual
interest on long-term debt (3)
|
851
|
772
|
708
|
613
|
547
|
7,437
|
10,928
|
||||||||||||||||||||||
Total
contractual obligations
|
$
|
3,452
|
$
|
2,622
|
$
|
2,712
|
$
|
759
|
$
|
2,743
|
$
|
15,759
|
$
|
28,047
|
(dollar
amounts in thousands)
|
2009
|
2008
|
Increase/
(Decrease)
|
|||||||||
Total
by type:
|
||||||||||||
Long-term
tax-exempt bonds
|
$
|
644,540
|
$
|
498,495
|
$
|
146,045
|
||||||
Indemnifications
of tax benefit transfers
|
81,574
|
94,821
|
(13,247
|
)
|
||||||||
Letters
of credit
|
450,659
|
343,424
|
107,235
|
|||||||||
Other
guarantees
|
98,682
|
100,400
|
(1,718
|
)
|
||||||||
Total
|
$
|
1,275,455
|
$
|
1,037,140
|
$
|
238,315
|
||||||
Total
by segment:
|
||||||||||||
National
Rural
|
$
|
1,233,333
|
$
|
993,699
|
$
|
239,634
|
||||||
RTFC
|
500
|
260
|
240
|
|||||||||
NCSC
|
41,622
|
43,181
|
(1,559
|
)
|
||||||||
Total
|
$
|
1,275,455
|
$
|
1,037,140
|
$
|
238,315
|
Principal
Amortization and Maturities
|
|||||||||||||||||||||||||||||||||||||||||
Outstanding
|
Remaining
|
||||||||||||||||||||||||||||||||||||||||
(dollar
amounts in thousands)
|
Balance
|
2010
|
2011
|
2012
|
2013
|
2014
|
Years
|
||||||||||||||||||||||||||||||||||
Guarantees
(1)
|
$
|
1,275,455
|
$
|
326,570
|
$
|
214,291
|
$
|
81,035
|
$
|
120,596
|
$
|
51,089
|
$
|
481,874
|
·
|
electric
cooperatives typically execute loan contracts, but do not advance the
funds at the inception of the loan, to cover multi-year work
plans;
|
·
|
electric
cooperatives generate a significant amount of cash from the collection of
invoices from their customers, so they usually do not need to draw down on
loan commitments for operating cash flows;
and
|
·
|
unadvanced
commitments generally expire within five years of the first advance on a
loan.
|
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 (1)
|
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
|
Fitch
Ratings
|
|||
Senior
secured debt
|
A
|
||
Senior
unsecured debt
|
A-
|
||
Subordinated
deferrable debt
|
BBB
|
||
Commercial
paper
|
F-2
|
(dollar
amounts in thousands)
|
Amortization
(1)
|
||
2010 (2)
|
$
|
1,106,754
|
|
2011
|
860,033
|
||
2012
|
1,451,411
|
||
2013
|
863,403
|
||
2014
|
858,133
|
||
Thereafter
|
12,483,880
|
||
Total
|
$
|
17,623,614
|
(dollar
amounts in thousands)
|
2009
|
2008
|
Termination
Date
|
Facility
fee per
year
(1)
|
|||||||
Five-year
agreement (2)
|
$
|
1,125,000
|
$
|
1,125,000
|
March
16, 2012
|
6
basis points
|
|||||
Five-year
agreement (2)
|
1,025,000
|
1,025,000
|
March
22, 2011
|
6
basis points
|
|||||||
364-day
agreement
|
1,000,000
|
-
|
March
12, 2010
|
12.5
basis points
|
|||||||
364-day
agreement
|
-
|
1,500,000
|
March
13, 2009
|
5
basis points
|
|||||||
Total
|
$
|
3,150,000
|
$
|
3,650,000
|
·
|
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
|
2009
|
2008
|
||||||
Minimum
average adjusted TIER over the six most recent fiscal
quarters
|
1.025
|
1.18
|
1.16
|
|||||
Minimum
adjusted TIER at fiscal year end (1)
|
1.05
|
1.10
|
1.15
|
|||||
Maximum
ratio of senior debt to total equity
|
10.00
|
6.90
|
7.33
|
2009
|
2008
|
Increase/
|
|||||||||||
(dollar
amounts in thousands)
|
Amount
|
%
of Total (1)
|
Amount
|
%
of Total (1)
|
(Decrease)
|
||||||||
Commercial
paper (2)
|
$
|
1,226,238
|
67
|
%
|
$
|
1,526,559
|
50
|
%
|
$
|
(300,321
|
)
|
||
Medium-term
notes
|
723,009
|
12
|
392,739
|
8
|
330,270
|
||||||||
Members'
subordinated certificates
|
1,740,054
|
100
|
1,406,779
|
100
|
333,275
|
||||||||
Members'
equity (3)
|
604,316
|
100
|
613,082
|
100
|
(8,766
|
)
|
|||||||
Total
|
$
|
4,293,617
|
$
|
3,939,159
|
$
|
354,458
|
|||||||
Percentage
of total assets
|
20.5
|
%
|
20.3
|
%
|
|||||||||
Percentage
of total assets less derivative assets (3)
|
20.8
|
20.6
|
Amount
|
Weighted-Average
|
|||||
(dollar
amounts in thousands)
|
Maturing
(1)
|
Interest
Rate
|
||||
2010
|
$
|
2,596,768
|
4.48
|
%
|
||
2011
|
1,845,606
|
3.86
|
||||
2012
|
2,003,512
|
6.28
|
||||
2013
|
145,877
|
3.82
|
||||
2014
|
2,195,993
|
4.81
|
||||
Thereafter
|
8,322,455
|
6.10
|
||||
Total
|
$
|
17,110,211
|
5.45
|
%
|
·
|
To
pay down commercial paper and refinance maturing extendible collateral
trust bonds, we issued $1 billion in collateral trust bonds in October
2008. These bonds were not swapped to a variable rate due to
the high floating-rate credit spreads to swap fixed-rate debt to a
variable rate. The floating-rate note market was not accessible
due to the disruption in the credit markets at the time when we issued the
collateral trust bonds.
|
·
|
The
termination of certain receive fixed, pay variable interest rate swaps
with notional amounts totaling $583 million created a larger prefund
position than was originally
anticipated.
|
·
|
The
success of our retail notes program and member capital securities, which
are both fixed-rate debt instruments. During the fiscal year
ended May 31, 2009, we sold $278 million in member capital securities and
retail notes increased by $734
million.
|
·
|
The
decrease in commercial paper of $1.3 billion compared to the prior year as
a result of prefunding floating-rate debt maturing in the first quarter of
fiscal year 2010 with long-term fixed-rate funding. As part of
our ongoing efforts to manage the liquidity risks associated with maturing
debt, we regularly pre-fund large expected debt obligations prior to the
maturity to ensure the availability of
funds.
|
Interest
Rate Gap Analysis
|
(Fixed-rate
Assets/Liabilities)
|
As
of May 31, 2009
|
May
31,
|
June
1,
|
June
1,
|
June
1,
|
June
1,
|
|||||||||||||||||||||||||||||||||||||
2010
|
2010
to
|
2012
to
|
2014
to
|
2019
to
|
Beyond
|
||||||||||||||||||||||||||||||||||||
or
|
May
31,
|
May
31,
|
May
31,
|
May
31,
|
June
1,
|
||||||||||||||||||||||||||||||||||||
(dollar
amounts in millions)
|
prior
|
2012
|
2014
|
2019
|
2029
|
2029
|
Total
|
||||||||||||||||||||||||||||||||||
Assets
amortization and repricing
|
$
|
1,937
|
$
|
3,860
|
$
|
2,341
|
$
|
3,257
|
$
|
2,400
|
$
|
1,015
|
$
|
14,810
|
|||||||||||||||||||||||||||
Liabilities
and members' equity:
|
|||||||||||||||||||||||||||||||||||||||||
Long-term
debt
|
$
|
1,655
|
$
|
4,705
|
$
|
2,245
|
$
|
4,391
|
$
|
662
|
$
|
913
|
$
|
14,571
|
|||||||||||||||||||||||||||
Subordinated
certificates
|
17
|
58
|
27
|
48
|
1,013
|
289
|
1,452
|
||||||||||||||||||||||||||||||||||
Members'
equity (1)
|
-
|
-
|
-
|
15
|
206
|
132
|
353
|
||||||||||||||||||||||||||||||||||
Total
liabilities and members' equity
|
$
|
1,672
|
$
|
4,763
|
$
|
2,272
|
$
|
4,454
|
$
|
1,881
|
$
|
1,334
|
$
|
16,376
|
|||||||||||||||||||||||||||
Gap
(2)
|
$
|
265
|
$
|
(903
|
)
|
$
|
69
|
$
|
(1,197
|
)
|
$
|
519
|
$
|
(319
|
)
|
$
|
(1,566
|
)
|
|||||||||||||||||||||||
Cumulative
gap
|
265
|
(638
|
)
|
(569
|
)
|
(1,766
|
)
|
(1,247
|
)
|
(1,566
|
)
|
||||||||||||||||||||||||||||||
Cumulative
gap as a % of total assets
|
1.26
|
%
|
(3.04
|
)%
|
(2.71
|
)%
|
(8.42
|
)%
|
(5.94
|
)%
|
(7.46
|
)%
|
|||||||||||||||||||||||||||||
Cumulative gap as a % of adjusted total
assets (3)
|
1.29
|
(3.10
|
)
|
(2.76
|
)
|
(8.57
|
)
|
(6.05
|
)
|
(7.60
|
)
|
2009
|
2008
|
|||||||||||||
(dollar
amounts in thousands)
|
Notional
Amount
|
Weighted-
Average
Rate
Paid
|
Weighted-
Average
Rate
Received
|
Notional
Amount
|
Weighted-
Average
Rate
Paid
|
Weighted-
Average
Rate
Received
|
||||||||
Pay
fixed, receive variable
|
$
|
6,506,603
|
4.67
|
%
|
0.62
|
%
|
$
|
7,659,973
|
4.59
|
%
|
2.64
|
%
|
||
Pay
variable, receive fixed
|
5,323,239
|
1.39
|
5.82
|
5,256,440
|
3.50
|
6.15
|
||||||||
Total
|
$
|
11,829,842
|
3.20
|
2.96
|
$
|
12,916,413
|
4.15
|
4.07
|
(dollar
amounts in thousands)
|
Notional
|
Required
Company
|
Amount
Company
|
Net
|
|||||||||
Rating
Level:
|
Amount
|
Payment
|
Would
Collect
|
Total
|
|||||||||
Mutual
rating trigger if ratings fall to Baa1/BBB+
|
|||||||||||||
and
below (1)
|
$
|
6,917,396
|
$
|
(141,453
|
)
|
$
|
21,194
|
$
|
(120,259
|
)
|
|||
Counterparty
may terminate if ratings fall below
|
|||||||||||||
Baa1/BBB+
(2)
|
938,064
|
(5,503
|
)
|
-
|
(5,503
|
)
|
|||||||
Total
|
$
|
7,855,460
|
$
|
(146,956
|
)
|
$
|
21,194
|
$
|
(125,762
|
)
|
|||
Principal
Amortization and Maturities
|
|||||||||||||||||||||||||||||||||
(dollar
amounts in millions)
|
Outstanding
|
Remaining
|
|||||||||||||||||||||||||||||||
Instrument
|
Balance
|
Fair
Value
|
2010
|
2011
|
2012
|
2013
|
2014
|
Years
|
|||||||||||||||||||||||||
Assets:
|
|||||||||||||||||||||||||||||||||
Investments
in preferred stock
|
$
|
47
|
$
|
47
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
47
|
|||||||||||||||||
Long-term
fixed-rate loans (1)
|
14,757
|
14,107
|
698
|
719
|
1,160
|
721
|
713
|
10,746
|
|||||||||||||||||||||||||
Average
rate
|
6.21
|
%
|
5.98
|
%
|
6.00
|
%
|
5.80
|
%
|
6.07
|
%
|
6.11
|
%
|
6.30
|
%
|
|||||||||||||||||||
Long-term
variable-rate loans (2)
|
$
|
2,297
|
$
|
2,297
|
$
|
395
|
$
|
126
|
$
|
276
|
$
|
127
|
$
|
129
|
$
|
1,244
|
|||||||||||||||||
Average
rate (3)
|
5.42
|
%
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||
Short-term
loans (4)
|
$
|
2,041
|
$
|
2,041
|
$
|
2,041
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||||||||||
Average
rate (3)
|
3.51
|
%
|
3.51
|
%
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
RUS
Guaranteed FFB Refinance
|
$
|
33
|
$
|
33
|
$
|
2
|
$
|
3
|
$
|
3
|
$
|
3
|
$
|
4
|
$
|
18
|
|||||||||||||||||
Average
rate (3)
|
0.57
|
%
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||
Non-performing
loans (5)
|
$
|
524
|
$
|
174
|
$
|
524
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||||||||||
Average
rate (5)
|
-
|
%
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||
Restructured
loans (5)
|
$
|
538
|
$
|
324
|
$
|
11
|
$
|
12
|
$
|
12
|
$
|
12
|
$
|
13
|
$
|
478
|
|||||||||||||||||
Average
rate (5)
|
0.54
|
%
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||
Liabilities
and equity:
|
|||||||||||||||||||||||||||||||||
Short-term
debt (6)
|
$
|
4,868
|
$
|
4,886
|
$
|
4,868
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||||||||||
Average
rate
|
2.71
|
%
|
2.71
|
%
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Medium-term
notes
|
$
|
3,687
|
$
|
3,743
|
$
|
-
|
$
|
846
|
$
|
1,695
|
$
|
39
|
$
|
60
|
$
|
1,047
|
|||||||||||||||||
Average
rate
|
6.61
|
%
|
-
|
4.54
|
%
|
6.92
|
%
|
4.73
|
%
|
5.54
|
%
|
7.91
|
%
|
||||||||||||||||||||
Collateral
trust bonds
|
$
|
4,969
|
$
|
5,134
|
$
|
-
|
$
|
906
|
$
|
5
|
$
|
5
|
$
|
1,504
|
$
|
2,549
|
|||||||||||||||||
Average
rate
|
6.08
|
%
|
-
|
3.34
|
%
|
7.35
|
%
|
7.35
|
%
|
5.21
|
%
|
7.53
|
%
|
||||||||||||||||||||
Long-term
notes payable
|
$
|
4,064
|
$
|
4,284
|
$
|
-
|
$
|
79
|
$
|
248
|
$
|
79
|
$
|
617
|
$
|
3,041
|
|||||||||||||||||
Average
rate
|
4.35
|
%
|
-
|
2.44
|
%
|
2.29
|
%
|
3.14
|
%
|
3.77
|
%
|
4.72
|
%
|
||||||||||||||||||||
Subordinated
deferrable debt
|
$
|
311
|
$
|
275
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
311
|
|||||||||||||||||
Average
rate
|
6.31
|
%
|
-
|
-
|
-
|
-
|
-
|
6.31
|
%
|
||||||||||||||||||||||||
Membership
sub certificates (7)
|
$
|
1,499
|
$
|
1,499
|
$
|
17
|
$
|
15
|
$
|
55
|
$
|
23
|
$
|
15
|
$
|
1,374
|
|||||||||||||||||
Average
rate
|
4.99
|
%
|
3.25
|
%
|
4.17
|
%
|
4.35
|
%
|
3.84
|
%
|
4.43
|
%
|
5.07
|
%
|
(dollar
amounts in millions)
|
Notional
|
Notional
Amortization and Maturities
|
|||||||||||||||||||||||||||||||
Principal
|
Remaining
|
||||||||||||||||||||||||||||||||
Instruments
|
Amount
|
Fair
Value
|
2010
|
2011
|
2012
|
2013
|
2014
|
Years
|
|||||||||||||||||||||||||
Interest
rate exchange agreements
|
$
|
11,830
|
$
|
(112
|
)
|
$
|
2,360
|
$
|
454
|
$
|
2,962
|
$
|
888
|
$
|
1,312
|
$
|
3,854
|
||||||||||||||||
Average
rate paid
|
3.20
|
%
|
|||||||||||||||||||||||||||||||
Average
rate received
|
2.96
|
For
the year ended May 31,
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
(dollar
amounts in thousands)
|
|||||||||||||||||||
Interest
expense
|
$
|
(935,021
|
)
|
$
|
(931,268
|
)
|
$
|
(991,754
|
)
|
$
|
(977,200
|
)
|
$
|
(941,398
|
)
|
||||
Derivative
cash settlements
|
112,989
|
27,033
|
86,442
|
80,883
|
78,287
|
||||||||||||||
Adjusted
interest expense
|
$
|
(822,032
|
)
|
$
|
(904,235
|
)
|
$
|
(905,312
|
)
|
$
|
(896,317
|
)
|
$
|
(863,111
|
)
|
||||
Net
interest income
|
$
|
135,743
|
$
|
120,125
|
$
|
47,896
|
$
|
18,682
|
$
|
46,776
|
|||||||||
Derivative
cash settlements
|
112,989
|
27,033
|
86,442
|
80,883
|
78,287
|
||||||||||||||
Adjusted
net interest income
|
$
|
248,732
|
$
|
147,158
|
$
|
134,338
|
$
|
99,565
|
$
|
125,063
|
|||||||||
(Loss)
income prior to income taxes and minority interest
|
$
|
(78,871
|
)
|
$
|
36,311
|
$
|
16,541
|
$
|
105,762
|
$
|
126,561
|
||||||||
Derivative
forward value
|
160,017
|
98,743
|
79,281
|
(28,805
|
)
|
(25,849
|
)
|
||||||||||||
Foreign
currency adjustments
|
-
|
-
|
14,554
|
22,594
|
22,893
|
||||||||||||||
Adjusted
income prior to income taxes and
|
|||||||||||||||||||
minority
interest
|
$
|
81,146
|
$
|
135,054
|
$
|
110,376
|
$
|
99,551
|
$
|
123,605
|
|||||||||
Net
(loss) income prior to cumulative effect of change in accounting
principle
|
$
|
(69,870
|
)
|
$
|
45,745
|
$
|
11,701
|
$
|
95,497
|
$
|
122,503
|
||||||||
Minority
interest net (loss) income
|
(3,900
|
)
|
(6,099
|
)
|
2,444
|
7,089
|
2,540
|
||||||||||||
Derivative
forward value
|
160,017
|
98,743
|
79,281
|
(28,805
|
)
|
(25,849
|
)
|
||||||||||||
Foreign
currency adjustments
|
-
|
-
|
14,554
|
22,594
|
22,893
|
||||||||||||||
Adjusted
net income
|
$
|
86,247
|
$
|
138,389
|
$
|
107,980
|
$
|
96,375
|
$
|
122,087
|
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
|
For
the year ended May 31,
|
|||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||||
TIER (1)
|
-
|
1.05
|
1.01
|
1.10
|
1.13
|
||||||||||||||||
Adjusted
TIER
|
1.10
|
1.15
|
1.12
|
1.11
|
1.14
|
||||||||||||||||
(1)
For the year ended May 31, 2009, we reported a net loss prior to the
cumulative effect of change in accounting principle of $70 million, thus
the TIER calculation results in a value below
1.00.
|
The
leverage and debt to equity ratios using GAAP financial measures are
calculated as follows:
|
Leverage
ratio =
|
Liabilities
+ guarantees outstanding
|
||
Total
equity
|
|||
Debt
to equity ratio =
|
Liabilities
|
||
Total
equity
|
The
adjusted leverage and 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
|
·
|
subtract
debt used to fund loans that are guaranteed by RUS from total
liabilities;
|
·
|
subtract
from total liabilities, and add to total equity, debt with equity
characteristics issued to our members and in the capital
markets;
|
·
|
include
minority interest as equity; and
|
·
|
exclude
the non-cash impact of derivative financial instruments and foreign
currency adjustments from total liabilities and total
equity.
|
The
accounting guidance governing variable interest entities requires that
National Rural consolidate the results of operations and financial
condition of RTFC and NCSC even though we have no financial interest or
voting control over either company. In consolidation, the amount of the
subsidiary equity that is owned or due to investors other than the parent
company is shown as minority interest. Before accounting
guidance required that we consolidate RTFC, the RTFC members' equity was
combined with our equity and therefore included in total
equity. For computing compliance with our revolving credit
agreement covenants, we are required to adjust total equity to include
minority interest. The leverage and debt to equity ratio
adjusted to treat minority interest as equity reflect management's
perspective on our operations and therefore, we believe that these are
useful financial measures for
investors.
|
May
31,
|
|||||||||||||||||||||
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
Liabilities
|
$
|
20,463,605
|
$
|
18,699,169
|
$
|
17,843,151
|
$
|
18,373,319
|
$
|
19,276,728
|
|||||||||||
Less:
|
|||||||||||||||||||||
Derivative
liabilities
|
(493,002
|
)
|
(171,390
|
)
|
(71,934
|
)
|
(85,198
|
)
|
(78,471
|
)
|
|||||||||||
Foreign
currency valuation account
|
-
|
-
|
-
|
(244,955
|
)
|
(260,978
|
)
|
||||||||||||||
Debt
used to fund loans guaranteed by RUS
|
(243,997
|
)
|
(250,169
|
)
|
(255,903
|
)
|
(261,330
|
)
|
(258,493
|
)
|
|||||||||||
Subordinated
deferrable debt (2)
|
(311,440
|
)
|
(311,440
|
)
|
(486,440
|
)
|
(636,440
|
)
|
(685,000
|
)
|
|||||||||||
Subordinated
certificates
|
(1,740,054
|
)
|
(1,406,779
|
)
|
(1,381,447
|
)
|
(1,427,960
|
)
|
(1,490,750
|
)
|
|||||||||||
Adjusted
liabilities
|
$
|
17,675,112
|
$
|
16,559,391
|
$
|
15,647,427
|
$
|
15,717,436
|
$
|
16,503,036
|
|||||||||||
Total
equity
|
$
|
508,938
|
$
|
665,965
|
$
|
710,041
|
$
|
784,408
|
$
|
764,934
|
|||||||||||
Less:
|
|||||||||||||||||||||
Prior
year cumulative derivative forward
|
|||||||||||||||||||||
value
and foreign currency adjustments
|
(44,056
|
)
|
(131,551
|
)
|
(225,849
|
)
|
(225,730
|
)
|
(221,868
|
)
|
|||||||||||
Year-to-date
derivative forward value (income)
|
|||||||||||||||||||||
loss
(1)
|
147,549
|
87,495
|
79,744
|
(22,713
|
)
|
(26,755
|
)
|
||||||||||||||
Current
period foreign currency adjustments
|
-
|
-
|
14,554
|
22,594
|
22,893
|
||||||||||||||||
Accumulated
other comprehensive loss
|
(8,115
|
)
|
(8,827
|
)
|
(12,204
|
)
|
(13,208
|
)
|
(15,621
|
)
|
|||||||||||
Subtotal
members' equity
|
604,316
|
613,082
|
566,286
|
545,351
|
523,583
|
||||||||||||||||
Plus:
|
|||||||||||||||||||||
Subordinated
certificates
|
1,740,054
|
1,406,779
|
1,381,447
|
1,427,960
|
1,490,750
|
||||||||||||||||
Subordinated
deferrable debt (2)
|
311,440
|
311,440
|
486,440
|
636,440
|
685,000
|
||||||||||||||||
Minority
interest
|
10,162
|
14,247
|
21,989
|
21,894
|
18,652
|
||||||||||||||||
Adjusted
equity
|
$
|
2,665,972
|
$
|
2,345,548
|
$
|
2,456,162
|
$
|
2,631,645
|
$
|
2,717,985
|
|||||||||||
Guarantees
|
$
|
1,275,455
|
$
|
1,037,140
|
$
|
1,074,374
|
$
|
1,078,980
|
$
|
1,157,752
|
May
31,
|
|||||||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||||||||
Leverage
ratio
|
42.71
|
29.64
|
26.64
|
24.80
|
26.71
|
||||||||||||||||||||
Adjusted
leverage ratio
|
7.11
|
7.50
|
6.81
|
6.38
|
6.50
|
||||||||||||||||||||
Debt
to equity ratio
|
40.21
|
28.08
|
25.13
|
23.42
|
25.20
|
||||||||||||||||||||
Adjusted
debt to equity ratio
|
6.63
|
7.06
|
6.37
|
5.97
|
6.07
|
Item
7A.
|
Quantitative
and Qualitative Disclosures About Market
Risk.
|
Item
8.
|
Financial
Statements and Supplementary Data.
|
Item
9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure.
|
Item
9A(T).
|
Controls
and Procedures
|
(i)
|
pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the
assets;
|
(ii)
|
provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with U.S. generally
accepted accounting principles, and that receipts and expenditures of ours
are being made only in accordance with authorizations of management and
our directors; and
|
(iii)
|
provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or dispositions of our
assets.
|
By:
|
/s/
SHELDON C. PETERSEN
|
By:
|
/s/
STEVEN L. LILLY
|
||
Sheldon
C. Petersen
|
Steven
L. Lilly
|
||||
Governor
and Chief Executive Officer
|
Senior
Vice President and Chief Financial Officer
|
||||
August
17, 2009
|
August
17, 2009
|
||||
By:
|
/s/
ROBERT E. GEIER
|
||||
Robert
E. Geier
|
|||||
Vice
President and Controller
|
|||||
August
17, 2009
|
Item
9B.
|
Other
Information.
|
Item
10.
|
Directors,
Executive Officers and Corporate
Governance.
|
(a)
Directors
|
||||||||||
Director
|
Date
present
|
|||||||||
Age
|
since
|
term
expires
|
||||||||
Darryl
Schriver (President of National Rural)
|
44
|
2004
|
2010
|
|||||||
Reuben
McBride (Vice President of National Rural)
|
62
|
2005
|
2011
|
|||||||
J.
David Wasson, Jr. (Secretary – Treasurer of National
Rural)
|
63
|
2006
|
2012
|
|||||||
Fred
Anderson
|
57
|
2008
|
2011
|
|||||||
Charles
Ayers
|
67
|
2009
|
2012
|
|||||||
Fred
Brog
|
64
|
2009
|
2012
|
|||||||
Raphael
A. Brumbeloe
|
68
|
2007
|
2010
|
|||||||
Delbert
Cranford
|
65
|
2007
|
2010
|
|||||||
Joel
Cunningham
|
55
|
2009
|
2012
|
|||||||
Jim
L. Doerstler
|
61
|
2008
|
2011
|
|||||||
Jimmy
Ewing, Jr.
|
61
|
2007
|
2010
|
|||||||
Michael
J. Guidry
|
60
|
2009
|
2010
|
|||||||
Christopher
L. Hamon
|
46
|
2009
|
2012
|
|||||||
Scott
W. Handy
|
51
|
2009
|
2012
|
|||||||
Jim
Herron
|
52
|
2005
|
2011
|
|||||||
Martin
Hillert, Jr.
|
54
|
2004
|
2010
|
|||||||
William
A. Kopacz
|
62
|
2006
|
2012
|
|||||||
Burns
E. Mercer
|
58
|
2008
|
2011
|
|||||||
Glenn
Miller
|
45
|
2009
|
2012
|
|||||||
Randy
D. Renth
|
45
|
2009
|
2012
|
|||||||
Dwight
Rossow
|
47
|
2008
|
2011
|
|||||||
R.
Wayne Stratton
|
61
|
2007
|
2010
|
|||||||
F.
E. Wolski
|
58
|
2007
|
2010
|
·
|
20
directors including one general manager and one director of a member
system from each of ten districts;
|
·
|
two
directors designated by the National Rural Electric Cooperative
Association; and
|
·
|
one
at-large director who satisfies the requirements of an audit committee
financial expert as defined by the Sarbanes-Oxley Act of 2002 and must be
a trustee, director, manager, Chief Executive Officer or Chief Financial
Officer of a member.
|
(b)
Executive Officers
|
||||||||
Held
present
|
||||||||
Title
|
Name
|
Age
|
office
since
|
|||||
President
and Director
|
Darryl
Schriver
|
44
|
2009
|
|||||
Vice
President and Director
|
Reuben
McBride
|
62
|
2009
|
|||||
Secretary
– Treasurer and Director
|
J.
David Wasson, Jr
|
63
|
2009
|
|||||
Governor
and Chief Executive Officer
|
Sheldon
C. Petersen
|
56
|
1995
|
|||||
Senior
Vice President of Member Services and General Counsel
|
John
J. List
|
62
|
1997
|
|||||
Senior
Vice President and Chief Financial Officer
|
Steven
L. Lilly
|
59
|
1994
|
|||||
Senior
Vice President of Operations
|
John
T. Evans
|
59
|
1997
|
|||||
Senior
Vice President of Corporate Relations
|
Richard
E. Larochelle
|
56
|
1998
|
|||||
Senior
Vice President of RTFC
|
Lawrence
Zawalick
|
51
|
2000
|
|||||
Senior
Vice President of Credit Risk Management
|
John
M. Borak
|
64
|
2002
|
o
|
Annual
base pay, generally targeted at the 50th
percentile of market for similar
positions
|
o
|
An
annual cash incentive which is based on the achievement of short-term
(one-year) corporate goals
|
o
|
A
three year cash incentive which is based on the achievement of longer-term
corporate goals
|
o
|
Retirement,
health and welfare and other benefit programs provided generally to all
National Rural employees
|
Rating
|
A+
|
AA-
|
AA
|
||||
Outlook
|
negative
|
stable
|
positive
|
negative
|
stable
|
positive
|
|
Numerical
Score
|
1
|
2
|
3
|
4
|
5
|
6
|
|
Plan
Pay-Out Unit Value
|
$0
|
$40
|
$60
|
$60
|
$100
|
$120
|
$150
|
Name and Principal
Position
|
Year
|
Salary
|
Non-Equity
Incentive
Plan
Compensation
(1)
|
Change
in
Pension
Value and
Nonqualified
Deferred Compensation Earnings (2)
|
All
Other
Compensation
(3)
|
Total
|
|||||||
Sheldon
C. Petersen
|
2009
|
$
|
720,354
|
$
|
162,289
|
$
|
601,402
|
$
|
124,465
|
$
|
1,608,510
|
||
Governor
& CEO
|
2008
|
689,583
|
162,681
|
475,626
|
112,698
|
1,440,588
|
|||||||
2007
|
643,125
|
204,212
|
428,799
|
132,577
|
1,408,713
|
||||||||
Steven
L. Lilly
|
2009
|
397,700
|
91,084
|
353,179
|
10,311
|
852,274
|
|||||||
Senior
Vice President &
|
2008
|
378,750
|
92,759
|
294,967
|
14,219
|
780,695
|
|||||||
Chief
Financial Officer
|
2007
|
364,000
|
117,513
|
266,788
|
50,938
|
799,239
|
|||||||
John
J. List
|
2009
|
397,700
|
91,084
|
539,927
|
14,785
|
1,043,496
|
|||||||
Senior
Vice President of
|
2008
|
378,750
|
92,759
|
523,478
|
9,848
|
1,004,835
|
|||||||
Member
Services and
|
2007
|
364,000
|
113,233
|
477,364
|
51,830
|
1,006,427
|
|||||||
General
Counsel
|
|||||||||||||
John
T. Evans
|
2009
|
397,700
|
91,084
|
206,755
|
14,785
|
710,324
|
|||||||
Senior
Vice President of
|
2008
|
378,750
|
92,759
|
167,845
|
14,218
|
653,572
|
|||||||
Operations
|
2007
|
364,000
|
113,233
|
146,285
|
16,833
|
640,351
|
|||||||
Richard
E. Larochelle
|
2009
|
397,700
|
81,244
|
361,225
|
16,069
|
856,238
|
|||||||
Senior
Vice President of
|
2008
|
276,000
|
67,610
|
180,744
|
12,189
|
536,543
|
|||||||
Corporate
Relations
|
2007
|
265,500
|
85,507
|
161,864
|
18,581
|
531,452
|
|||||||
Lawrence
Zawalick (4)
|
2009
|
289,800
|
66,408
|
255,055
|
12,646
|
623,909
|
|||||||
Senior
Vice President of
|
2008
|
276,000
|
67,610
|
177,749
|
12,189
|
533,548
|
|||||||
RTFC
|
2007
|
265,500
|
85,507
|
147,479
|
46,494
|
544,980
|
|||||||
John
M. Borak (4)
|
2009
|
254,950
|
58,416
|
64,880
|
11,955
|
390,201
|
|||||||
Senior
Vice President of
|
2008
|
242,800
|
59,547
|
69,951
|
11,535
|
383,833
|
|||||||
Credit
Risk Management
|
2007
|
233,500
|
75,927
|
106,490
|
10,860
|
426,777
|
|||||||
Name
|
Year
|
Short-term
Incentive Plan
|
Long-term
Incentive
Plan
|
||||
Sheldon
C. Petersen
|
2009
|
$$
|
99,049
|
$$
|
63,240
|
||
2008
|
105,161
|
57,520
|
|||||
2007
|
150,732
|
53,480
|
|||||
Steven
L. Lilly
|
2009
|
54,684
|
36,400
|
||||
2008
|
57,759
|
35,000
|
|||||
2007
|
85,313
|
32,200
|
|||||
John
J. List
|
2009
|
54,684
|
36,400
|
||||
2008
|
57,759
|
35,000
|
|||||
2007
|
85,313
|
27,920
|
|||||
John
T. Evans
|
2009
|
54,684
|
36,400
|
||||
2008
|
57,759
|
35,000
|
|||||
2007
|
85,313
|
27,920
|
|||||
Richard
E. Larochelle
|
2009
|
54,684
|
26,560
|
||||
2008
|
42,090
|
25,520
|
|||||
2007
|
62,227
|
23,280
|
|||||
Lawrence
Zawalick (4)
|
2009
|
39,848
|
26,560
|
||||
2008
|
42,090
|
25,520
|
|||||
2007
|
62,227
|
23,280
|
|||||
John
M. Borak (4)
|
2009
|
35,056
|
23,360
|
||||
2008
|
37,027
|
22,520
|
|||||
2007
|
54,727
|
21,200
|
Estimated
Future Payouts Under
Non-Equity
Incentive Plan Awards
|
||||||||
Threshold
|
Target
|
Maximum
|
||||||
Sheldon
C. Petersen
|
||||||||
Long-term
Incentive Plan (1)
|
$
|
-
|
$
|
177,500
|
$
|
266,250
|
||
Short-term
Incentive Plan (2)
|
-
|
180,089
|
180,089
|
|||||
Steven
L. Lilly
|
||||||||
Long-term
Incentive Plan (1)
|
-
|
99,400
|
149,100
|
|||||
Short-term
Incentive Plan (2)
|
-
|
99,425
|
99,425
|
|||||
John
J. List
|
||||||||
Long-term
Incentive Plan (1)
|
-
|
99,400
|
149,100
|
|||||
Short-term
Incentive Plan (2)
|
-
|
99,425
|
99,425
|
|||||
John
T. Evans
|
||||||||
Long-term
Incentive Plan (1)
|
-
|
99,400
|
149,100
|
|||||
Short-term
Incentive Plan (2)
|
-
|
99,425
|
99,425
|
|||||
Richard
E. Larochelle
|
||||||||
Long-term
Incentive Plan (1)
|
-
|
99,400
|
149,100
|
|||||
Short-term
Incentive Plan (2)
|
-
|
99,425
|
99,425
|
|||||
Lawrence
Zawalick
|
||||||||
Long-term
Incentive Plan (1)
|
-
|
72,500
|
108,750
|
|||||
Short-term
Incentive Plan (2)
|
-
|
72,450
|
72,450
|
|||||
John
M. Borak
|
||||||||
Long-term
Incentive Plan (1)
|
-
|
63,700
|
95,550
|
|||||
Short-term
Incentive Plan (2)
|
-
|
63,738
|
63,738
|
|||||
Name
|
Plan Name
|
Number
of Years
Credited Service (1)
|
Present
Value of
Accumulated Benefit (2)
|
Payments
During
Last
Fiscal Year (3)
|
|||
Sheldon
C. Petersen
|
NRECA
Retirement Security Plan
|
25.75
|
$
|
1,757,852
|
$
|
1,160,354
|
|
Steven
L. Lilly
|
NRECA
Retirement Security Plan
|
24.58
|
1,639,852
|
410,162
|
|||
John
J. List (4)
|
NRECA
Retirement Security Plan
|
0.92
|
93,009
|
3,160,888
|
|||
John
T. Evans
|
NRECA
Retirement Security Plan
|
10.50
|
724,047
|
121,264
|
|||
Richard
E. Larochelle
|
NRECA
Retirement Security Plan
|
25.00
|
1,397,537
|
61,965
|
|||
Lawrence
Zawalick
|
NRECA
Retirement Security Plan
|
28.67
|
1,314,095
|
63,187
|
|||
John
M. Borak (5)
|
NRECA
Retirement Security Plan
|
2.92
|
187,709
|
2,308
|
Name
|
Executive
Contributions
in
Last
Fiscal
Year
(1)
|
Registrant
Contributions
in
Last
Fiscal
Year
|
Aggregate
Earnings
in Last
Fiscal
Year
|
Aggregate
Withdrawals/
Distributions
|
Aggregate
Balance
at Last
Fiscal
Year End
|
|||||||
Sheldon
C. Petersen
|
||||||||||||
National
Rural Deferred Compensation
|
$15,917
|
$$
|
-
|
$
|
$(87,966
|
)
|
$$
|
-
|
$198,894
|
|||
RTFC
Deferred Compensation (2)
|
-
|
30,000
|
45,399
|
-
|
723,947
|
(3)
|
||||||
Steven
L. Lilly
|
||||||||||||
National
Rural Deferred Compensation
|
9,729
|
-
|
(61,927
|
)
|
-
|
132,072
|
||||||
John
J. List
|
||||||||||||
National
Rural Deferred Compensation
|
15,500
|
-
|
(21,782
|
)
|
-
|
56,946
|
||||||
John
T. Evans
|
||||||||||||
National
Rural Deferred Compensation
|
20,500
|
-
|
(31,590
|
)
|
-
|
115,788
|
||||||
Richard
E. Larochelle
|
||||||||||||
National
Rural Deferred Compensation
|
15,917
|
-
|
(31,418
|
)
|
-
|
197,180
|
||||||
Lawrence
Zawalick
|
||||||||||||
National
Rural Deferred Compensation
|
15,500
|
-
|
(34,588
|
)
|
-
|
84,554
|
||||||
John
M. Borak
|
||||||||||||
National
Rural Deferred Compensation
|
12,375
|
-
|
9
|
-
|
69,780
|
Name
|
Fees
Earned
|
Total
|
||
Darryl
Schriver
|
$
|
37,050
|
$
|
37,050
|
Reuben
McBride
|
37,200
|
37,200
|
||
J.
David Wasson, Jr.
|
37,800
|
37,800
|
||
Fred
Anderson
|
37,650
|
37,650
|
||
Roger
Arthur
|
33,350
|
33,350
|
||
Charles
Ayers
|
8,000
|
8,000
|
||
Roger
A. Ball
|
36,600
|
36,600
|
||
Raphael
A. Brumbeloe
|
37,800
|
37,800
|
||
Fred
Brog
|
8,000
|
8,000
|
||
Delbert
Cranford
|
36,900
|
36,900
|
||
Joel
Cunningham
|
8,150
|
8,150
|
||
Jim
L. Doerstler
|
38,100
|
38,100
|
||
Jimmy
Ewing Jr.
|
37,800
|
37,800
|
||
Harold
Foley
|
12,600
|
12,600
|
||
Michael
J. Guidry
|
4,000
|
4,000
|
||
Steven
J. Haaven
|
32,750
|
32,750
|
||
Christopher
Hamon
|
8,000
|
8,000
|
||
Scott
Handy
|
8,150
|
8,150
|
||
Jim
Herron
|
32,300
|
32,300
|
||
Martin
Hillert, Jr.
|
37,350
|
37,350
|
||
William
A. Kopacz
|
33,500
|
33,500
|
||
Burns
Mercer
|
37,800
|
37,800
|
||
Glenn
Miller
|
8,150
|
8,150
|
||
Randy
D. Renth
|
8,000
|
8,000
|
||
Gale
Rettkowski
|
32,750
|
32,750
|
||
Dwight
Rossow
|
36,750
|
36,750
|
||
Ronald
P. Salyer
|
32,000
|
32,000
|
||
R.
Wayne Stratton
|
38,150
|
38,150
|
||
Charles
Wayne Whitaker
|
32,150
|
32,150
|
||
Jack
F. Wolfe, Jr.
|
24,000
|
24,000
|
||
F.
E. Wolski
|
29,500
|
29,500
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
|
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence.
|
·
|
Each
director and executive officer is required to promptly notify the General
Counsel in writing of any material interest that such person or an
immediate family member of such person had, has or will have in a related
person transaction.
|
·
|
The
General Counsel of National Rural is responsible for the review, approval
or ratification of any related person transaction, unless the General
Counsel refers any related person transaction to the Board of Directors
for its review,
|
·
|
The
General Counsel will notify the Board of Directors at each regularly
scheduled Board meeting of any action taken by the General Counsel with
respect to a related person transaction since the last regularly scheduled
meeting of the Board of Directors.
|
·
|
In
the event the General Counsel becomes aware of a related person
transaction that has not been approved under the Board policy before its
consummation, the General Counsel will notify the Board of Directors. The
Board of Directors will consider all of the relevant facts and
circumstances with respect to such transaction, and will evaluate all
options available to National Rural, including ratification, revision or
termination of such transaction, and shall take such course of action as
the Board of Directors deems appropriate under the
circumstances.
|
·
|
The
General Counsel will determine whether a related person has a material
interest in a transaction based on the significance of the information to
investors in National Rural securities in light of all the circumstances.
Factors to be considered in determining whether a related person’s
interest in a transaction is material may include the importance of the
interest to the related person (financially or otherwise), the
relationship of the related person to the transaction and of related
persons with each other, and the dollar amount involved in the
transaction.
|
·
|
The
General Counsel, and where applicable, the Board of Directors, will not
approve or ratify a related person transaction unless the General Counsel,
or the Board, as the case may be, reasonably determines, based on a review
of the available information, that the transaction is fair and reasonable
to National Rural and consistent with the best interests of National
Rural.
|
·
|
Factors
to be taken into account in making the determination may include (i) the
business purpose of the transaction, (ii) whether the transaction is
entered into on an arms-length basis on terms fair to National Rural, and
(iii) whether such a transaction would violate other National Rural
policies.
|
|
(i)
|
the
director is, or has been within the last three years, an employee of
National Rural, or an immediate family member is, or has been within the
last three years, an executive officer of National
Rural;
|
|
(ii)
|
the
director has received, or has an immediate family member who has received,
during any twelve-month period within the last three years, more than
$120,000 in direct compensation from National Rural, other than director
and committee fees and pension or other forms of deferred compensation for
prior service (provided that such compensation is not contingent in any
way on continued service);
|
|
(iii)
|
(a)
the director or an immediate family member is a current partner of a firm
that is National Rural’s internal or external auditor; (b) the director is
a current employee of such a firm; (c) the director has an immediate
family member who is a current employee of such a firm and personally
works on National Rurals’audit; or (d) the director or an immediate family
member was within the last three years (but is no longer) a partner or
employee of such a firm and personally worked on National Rural’s audit
within that time;
|
|
(iv)
|
the
director or an immediate family member is, or has been within the last
three years, employed as an executive officer of another company where any
of National Rural’s present executive officers at the same time serves or
served on that company’s compensation committee;
or
|
|
(v)
|
the
director is a current employee, or an immediate family member is a current
executive officer, of a company that has made payments to, or received
payments from, National Rural for property or services in an amount which,
in any of the last three fiscal years, exceeds the greater of $1 million,
or 2 percent of such other company’s consolidated gross
revenues.
|
Independent
Directors
|
||
Roger
Arthur (1)
|
Jimmy
Ewing Jr.
|
Randy
D. Renth
|
Charles
Ayers
|
Harold
Foley (1)
|
Gale
Rettkowski (1)
|
Roger
A. Ball (1)
|
Michael
J. Guidry
|
Dwight
Rossow
|
Raphael
A. Brumbeloe
|
Steven
J. Haaven (1)
|
R.
Wayne Stratton
|
Fred
Brog
|
Jim
Herron
|
J.
David Wasson, Jr.
|
Delbert
Cranford
|
Reuben
McBride
|
Jack
F. Wolfe, Jr.
(1)
|
Joel
Cunningham
|
Glenn
Miller
|
F.
E. Wolski
|
Jim
L. Doerstler
|
||
(1)
These directors served during the year ended May 31, 2009, however they
were no longer a director at May 31,
2009.
|
Item
14.
|
Principal
Accounting Fees and Services.
|
2009
|
2008
|
||||||||
Audit
fees (1)
|
$
|
1,736,488
|
$
|
1,641,790
|
|||||
Audit-related
fees
|
-
|
-
|
|||||||
Tax
fees (2)
|
63,710
|
111,571
|
|||||||
All
other fees (3)
|
15,000
|
28,500
|
|||||||
Total
|
$
|
1,815,198
|
$
|
1,781,861
|
Item
15.
|
Exhibits,
Financial Statement Schedules.
|
(a)
|
Documents
filed as a part of this report.
|
|||
1.
|
Consolidated
financial statements
|
Page
|
||
Report
of Independent Registered Public Accounting Firm
|
89
|
|||
Consolidated
Balance Sheets
|
90
|
|||
Consolidated
Statements of Operations
|
92
|
|||
Consolidated
Statements of Changes in Equity
|
93
|
|||
Consolidated
Statements of Cash Flows
|
94
|
|||
Notes
to Consolidated Financial Statements
|
96
|
|||
2.
|
Financial
statement schedules
|
3.
|
Exhibits
|
||
3.1
|
-
|
Articles
of Incorporation. Incorporated by reference to Exhibit 3.1
to Registration Statement No. 2-46018, filed October 12,
1972.
|
|
3.2
|
-
|
Amended
Bylaws as approved by National Rural’s board of directors and members on
March 1, 2005. Incorporated by reference to Exhibit 3.2 to
National Rural’s Form 10-Q filed on April 15, 2005.
|
|
4.1
|
-
|
Form
of Capital Term Certificate. Incorporated by reference to
Exhibit 4.3 to Registration Statement No. 2-46018 filed October 12,
1972.
|
|
4.2
|
-
|
Indenture
dated as of February 15, 1994, between the Registrant and U.S. Bank
National Association, successor trustee. Incorporated by
reference to Exhibit 4.2 to National Rural’s Form 10-Q filed on October
15, 2007.
|
|
4.3
|
-
|
Revolving
Credit Agreement dated as of March 22, 2006 for $1,000,000,000 maturing on
March 22, 2011. Incorporated by reference to Exhibit 4.3 to
National Rural’s Form 10-Q filed on April 14, 2006.
|
|
4.4
|
-
|
Revolving
Credit Agreement dated as of March 16, 2007 for $1,125,000,000 maturing on
March 16, 2012. Incorporated by reference to Exhibit 4.4 to
National Rural’s Form 10-Q filed on April 12, 2007.
|
|
4.5
|
-
|
Revolving
Credit Agreement dated as of March 13, 2009 for $1,000,000,000 expiring on
March 12, 2010. Incorporated by reference to Exhibit 4.5 to
National Rural’s Form 10-Q filed on April 8, 2009.
|
|
4.6
|
-
|
Indenture
between National Rural and Mellon Bank, N.A., as Trustee. Incorporated by
reference to Exhibit 4.1 to Registration Statement on Form S-3 filed on
November 14, 1995 (Registration No. 33-64231).
|
|
4.7
|
-
|
Indenture
between National Rural and Chemical Bank, as
Trustee. Incorporated by reference to Exhibit 4.1 to
Registration Statement on Form S-3ASR filed on November 24, 2008
(Registration No. 33-155631).
|
|
4.8
|
-
|
First
Supplemental Indenture between National Rural and Chemical Bank, as
Trustee. Incorporated by reference to Exhibit 4.8 to
Registration Statement on Form S-3 filed on October 1, 1990 (Registration
No. 33-58445).
|
|
4.9
|
-
|
Bond
Purchase Agreement between the Registrant, Federal Financing Bank and
Rural Utilities Service dated as of April 28, 2006 for up to
$1,500,000,000. Incorporated by reference to Exhibit 4.11 to
National Rural’s Form 10-K filed on August 25, 2006.
|
|
4.10
|
-
|
Series
B Bond Guarantee Agreement between the Registrant and the Rural Utilities
Service dated as of April 28, 2006 for up to
$1,500,000,000. Incorporated by reference to Exhibit 4.12 to
National Rural’s Form 10-K filed on August 25, 2006.
|
|
4.11
|
-
|
Pledge
Agreement dated as of April 28, 2006, between the Registrant, the Rural
Utilities Service and U.S. Bank Trust National
Association. Incorporated by reference to Exhibit 4.13 to
National Rural’s Form 10-K filed on August 25, 2006.
|
|
4.12
|
-
|
Series
B Future Advance Bond from the Registrant to the Federal Financing Bank
dated as of April 28, 2006 for up to $1,500,000,000 maturing on July 15,
2029. Incorporated by reference to Exhibit 4.14 to National
Rural’s Form 10-K filed on August 25, 2006.
|
|
4.13
|
-
|
Bond
Purchase Agreement between the Registrant, Federal Financing Bank and
Rural Utilities Service dated as of June 14, 2005 for up to
$1,000,000,000. Incorporated by reference to Exhibit 4.12 to
National Rural’s Form 10-K filed on August 24, 2005.
|
|
4.14
|
-
|
Series
A Bond Guarantee Agreement between the Registrant and the Rural Utilities
Service dated as of June 14, 2005 for up to
$1,000,000,000. Incorporated by reference to Exhibit 4.13 to
National Rural’s Form 10-K filed on August 24,
2005.
|
4.15
|
-
|
Pledge
Agreement dated as of June 14, 2005, between the Registrant, the Rural
Utilities Service and U.S. Bank Trust National
Association. Incorporated by reference to Exhibit 4.14 to
National Rural’s Form 10-K filed on August 24, 2005.
|
|
4.16
|
-
|
Series
A Future Advance Bond from the Registrant to the Federal Financing Bank
dated as of June 14, 2005 for up to $1,000,000,000 maturing on July 15,
2028. Incorporated by reference to Exhibit 4.15 to National
Rural’s Form 10-K filed on August 24, 2005.
|
|
4.17
|
-
|
Form
of Fixed-Rate MTN. Incorporated by reference to Exhibit 4.3 to
National Rural’s Form 8-K filed on November 26, 2008.
|
|
4.18
|
-
|
Form
of Floating-Rate MTN. Incorporated by reference to Exhibit 4.4
to National Rural’s Form 8-K filed on November 26,
2008.
|
|
4.19
|
-
|
Form
of Fixed-Rate Internotes. Incorporated by reference to Exhibit
4.5 to National Rural’s Form 8-K filed on November 26,
2008.
|
|
4.20
|
-
|
Form
of Floating-Rate Internotes. Incorporated by reference to
Exhibit 4.6 to National Rural’s Form 8-K filed on November 26,
2008.
|
|
4.21
|
-
|
Indenture
dated as of May 15, 2000, between the Registrant and Bank One Trust
Company, National Association, as trustee. Incorporated by
reference to Exhibit 4.1 to Registration Statement on Form S-3 filed on
May 25, 2000 (Registration No. 333-37940).
|
|
4.22
|
-
|
First
Supplemental Indenture dated as of March 12, 2007, between the Registrant
and U.S. Bank National Association, as trustee. Incorporated by
reference to Exhibit 4.2 to Registration Statement on Form S-3ASR filed on
April 19, 2007 (Registration No. 333-142230).
|
|
4.23
|
-
|
Indenture
for Clean Renewable Energy Bonds, Tax Credit Series dated as of January 1,
2008, between the Registrant and U.S. Bank Trust National
Association. The Indenture has been omitted and will be
furnished supplementally to the Securities and Exchange Commission upon
request. Incorporated by reference to Exhibit 4.21 to National
Rural’s Form 10-Q filed on April 14, 2008.
|
|
4.24
|
-
|
Note
Purchase Agreement dated as of March 23, 2009, for $400,000,000 between
the Registrant and Federal Agricultural Mortgage Corporation. Incorporated
by reference to Exhibit 4.24 to National Rural’s Form 10-Q filed on April
8, 2009.
|
|
4.25
|
-
|
Pledge
Agreement dated as of March 23, 2009, between the Registrant, Federal
Agricultural Mortgage Corporation and U.S. Bank Trust National
Association. Incorporated by reference to Exhibit 4.25 to National Rural’s
Form 10-Q filed on April 8, 2009.
|
|
4.26
|
-
|
Indenture
dated as of October 25, 2007, between the Registrant and U.S. Bank
National Association, as trustee. Incorporated by reference to
Exhibit 4.1 to Registration Statement on Form S-3ASR filed on October 26,
2007 (Registration No. 333-146960).
|
|
4.27
|
-
|
Bond
Purchase Agreement between the Registrant, Federal Financing Bank and
Rural Utilities Service dated as of September 19, 2008 for up to
$500,000,000. Incorporated by reference to Exhibit 4.29 to
National Rural’s Form 10-Q filed on October 14, 2008.
|
|
4.28
|
-
|
Series
C Bond Guarantee Agreement between the Registrant and the Rural Utilities
Service dated as of September 19, 2008 for up to
$500,000,000. Incorporated by reference to Exhibit 4.30 to
National Rural’s Form 10-Q filed on October 14, 2008.
|
|
4.29
|
-
|
Pledge
Agreement dated as of September 19, 2008, between the Registrant, the
Rural Utilities Service and U.S. Bank Trust National
Association. Incorporated by reference to Exhibit 4.31 to
National Rural’s Form 10-Q filed on October 14, 2008.
|
|
4.30
|
-
|
Series
C Future Advance Bond from the Registrant to the Federal Financing Bank
dated as of September 19, 2008 for up to $500,000,000 maturing on October
15, 2031. Incorporated by reference to Exhibit 4.32 to National
Rural’s Form 10-Q filed on October 14, 2008.
|
|
4.31
|
-
|
Amendment
No. 1 dated as of September 19, 2008 to the Pledge Agreement dated as of
April 28, 2006, between the Registrant, the Rural Utilities Service and
U.S. Bank Trust National Association. Incorporated by reference
to Exhibit 4.33 to National Rural’s Form 10-Q filed on October 14,
2008.
|
|
4.32
|
-
|
Amendment
No. 2 dated as of December 9, 2008 to the Revolving Credit Agreement dated
as of March 16, 2007 for $1,125,000,000 expiring on March 16,
2012. Incorporated by reference to Exhibit 4.35 to National
Rural’s Form 10-Q filed on January 9, 2009.
|
|
4.33
|
-
|
Amendment
No. 4 dated as of December 9, 2008 to the Revolving Credit Agreement dated
as of March 22, 2006 for $1,000,000,000 expiring on March 22,
2011. Incorporated by reference to Exhibit 4.36 to National
Rural’s Form 10-Q filed on January 9,
2009.
|
4.34
|
-
|
Amendment
No. 3 dated as of December 19, 2008 to the Revolving Credit Agreement
dated as of March 16, 2007 for $1,125,000,000 expiring on March 16,
2012. Incorporated by reference to Exhibit 4.40 to National
Rural’s Form 10-Q filed on January 9, 2009.
|
|
4.35
|
-
|
Amendment
No. 5 dated as of December 19, 2008 to the Revolving Credit Agreement
dated as of March 22, 2006 for $1,000,000,000 expiring on March 22,
2011. Incorporated by reference to Exhibit 4.41 to National
Rural’s Form 10-Q filed on January 9, 2009.
|
|
4.36
|
-
|
Term
Loan Credit Agreement dated as of January 21, 2009 for $200,000,000
expiring on January 21, 2010. Incorporated by reference to
Exhibit 4.42 to National Rural’s Form 10-Q filed on April 8,
2009.
|
|
4.37
|
-
|
Note
Purchase Agreement dated as of December 15, 2008 for $500,000,000 between
the Registrant and Federal Agricultural Mortgage
Corporation. Incorporated by reference to Exhibit 4.37 to
National Rural’s Form 10-Q filed on January 9, 2009.
|
|
4.38
|
-
|
Pledge
Agreement dated as of December 15, 2008, between the Registrant, Federal
Agricultural Mortgage Corporation and U.S. Bank Trust National
Association. Incorporated by reference to Exhibit 4.38 to
National Rural’s Form 10-Q filed on January 9, 2009.
|
|
4.39
|
-
|
Note
Purchase Agreement dated as of February 5, 2009 for $500,000,000, between
the Registrant and Federal Agricultural Mortgage
Corporation. Incorporated by reference to Exhibit 4.43 to
National Rural’s Form 10-Q filed on April 8, 2009.
|
|
4.40
|
-
|
Pledge
Agreement dated as of February 5, 2009, between the Registrant, Federal
Agricultural Mortgage Corporation and U.S. Bank Trust National
Association. Incorporated by reference to Exhibit 4.44 to
National Rural’s Form 10-Q filed on April 8, 2009.
|
|
4.41
|
-
|
Form
of Fixed Rate Member Capital Securities Certificate. Incorporated by
reference to Exhibit 4.1 to National Rural’s Form 10-Q filed on April 8,
2009.
|
|
4.42
|
-
|
Form
of Floating Rate Member Capital Securities Certificate. Incorporated by
reference to Exhibit 4.2 to National Rural’s Form 10-Q filed on April 8,
2009.
|
|
4.43
|
-
|
Note
Purchase Agreement dated as of May 22, 2009 for $1,000,000,000 between the
Registrant and Federal Agricultural Mortgage
Corporation.
|
|
4.44
|
-
|
Pledge
Agreement dated as of May 22, 2009, between the Registrant, Federal
Agricultural Mortgage Corporation and U.S. Bank Trust National
Association.
|
|
4.45
|
-
|
Amendment
No. 1 dated as of July 13, 2009 to the Note Purchase Agreement dated as of
December 15, 2008 for $500,000,000 between the Registrant and Federal
Agricultural Mortgage Corporation.
|
|
4.46
|
-
|
Amendment
No. 1 dated as of July 13, 2009 to the Note Purchase Agreement dated as of
February 5, 2009 for $500,000,000, between the Registrant and Federal
Agricultural Mortgage Corporation.
|
|
4.47
|
-
|
Master
Sale and Servicing Agreement dated as of July 24, 2009, between the
Registrant and Federal Agricultural Mortgage
Corporation.
|
|
-
|
Registrant
agrees to furnish to the Commission a copy of all other instruments
defining the rights of holders of its long-term debt upon
request.
|
||
10.1
|
-
|
Plan
Document for National Rural’s Deferred Compensation Program amended and
restated as of July 1, 2003. Incorporated by reference to
Exhibit 10.1 to National Rural’s Form 10-K filed on August 24, 2005.*
|
|
10.2
|
-
|
Employment
Contract between National Rural and Sheldon C. Petersen, effective as of
January 1, 2008. Incorporated by reference to Exhibit 10.2 to
National Rural’s Form 10-Q filed on January 11, 2008. *
|
|
10.3
|
-
|
Supplemental
Benefit Agreement between Rural Telephone Finance Cooperative and Sheldon
C. Petersen, dated as of July 22, 2004. Incorporated by
reference to Exhibit 10.3 to National Rural’s Form 10-K filed on August
20, 2004.
*
|
|
10.4
|
-
|
Amended
and Restated Supplemental Benefit Agreement between RTFC and Sheldon C.
Petersen, dated as of December 4, 2006. Incorporated by
reference to Exhibit 10.4 to National Rural’s Form 10-K filed on August
27, 2008.*
|
|
10.5
|
-
|
First
Amendment to Amended and Restated Supplemental Agreement between Rural
Telephone Finance Cooperative and Sheldon C. Petersen, effective as of
January 1, 2008. Incorporated by reference to Exhibit 10.5 to
National Rural’s Form 10-Q filed on January 11, 2008. *
|
|
10.6
|
-
|
Employment
Contract between National Rural and John T. Evans, dated as of September
17, 1997 including termination of employment
arrangement. Incorporated by reference to Exhibit 10.4 to
National Rural’s Form 10-K filed on August 27, 2007. *
|
|
10.7
|
-
|
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. Incorporated by reference to Exhibit 10.6 to National
Rural’s Form 10-Q filed on January 11, 2008.
|
|
10.8
|
-
|
First
Amendment to Agreement of Purchase and Sale between National Rural and
Loudoun Land Venture, LLC dated as of December 17,
2007. Incorporated by reference to Exhibit 10.7 to National
Rural’s Form 10-Q filed on January 11,
2008.
|
10.9
|
-
|
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. Incorporated by reference to Exhibit 10.8 to National
Rural’s Form 10-Q filed on January 11, 2008.
|
|
10.10
|
-
|
Agreement
of Purchase and Sale between National Rural and DTC Partners, LLC dated as
of May 2, 2008. Exhibits A, E and G to the Agreement of
Purchase and Sale have been omitted and will be furnished supplementally
to the Securities and Exchange Commission upon
request. Incorporated by reference to Exhibit 10.10 to National
Rural’s Form 10-K filed on August 27, 2008.
|
|
10.11
|
-
|
First
Amendment to Agreement of Purchase and Sale between National Rural and DTC
Partners, LLC dated as of June 30, 2008. Incorporated by
reference to Exhibit 10.11 to National Rural’s Form 10-K filed on August
27, 2008.
|
|
10.12
|
-
|
Second
Amendment to Agreement of Purchase and Sale between National Rural and DTC
Partners, LLC dated as of July 29, 2008. Incorporated by
reference to Exhibit 10.12 to National Rural’s Form 10-K filed on August
27, 2008.
|
|
10.13
|
-
|
Third
Amendment to Agreement of Purchase and Sale between National Rural and DTC
Partners, LLC dated as of August 25, 2008. Graphics to the
Third Amendment to Agreement of Purchase and Sale have been omitted and
will be furnished supplementally to the Securities and Exchange Commission
upon request. Incorporated by reference to Exhibit 10.13 to
National Rural’s Form 10-Q filed on October 14, 2008.
|
|
10.14
|
-
|
Fourth
Amendment to Agreement of Purchase and Sale between National Rural and DTC
Partners, LLC dated as of December 3, 2008. Incorporated by
reference to Exhibit 10.14 to National Rural’s Form 10-Q filed on January
9, 2009.
|
|
10.15
|
-
|
Second
Amendment to Amended and Restated Supplemental Agreement between Rural
Telephone Finance Cooperative and Sheldon C. Petersen, effective as of May
19, 2009.*
|
|
10.16
|
-
|
Plan
Document for National Rural’s Deferred Compensation Pension Restoration
Plan dated as of January 1, 2005.*
|
|
12
|
-
|
Computations
of ratio of margins to fixed charges.
|
|
23
|
-
|
Consent
of Deloitte & Touche LLP.
|
|
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.
|
|
*
Identifies a management contract or compensatory plan or
arrangement.
|
|||
Signature
|
Title
|
Date
|
|||
/s/ SHELDON
C. PETERSEN
|
Governor
and Chief Executive Officer
|
||||
Sheldon
C. Petersen
|
|||||
/s/ STEVEN
L. LILLY
|
Senior
Vice President and Chief Financial
|
||||
Steven
L. Lilly
|
Officer
|
||||
/s/ ROBERT
E. GEIER
|
Vice
President and Controller
|
||||
Robert
E. Geier
|
|||||
/s/ DARRYL
SCHRIVER
|
President
and Director
|
||||
Darryl
Schriver
|
|||||
/s/ REUBEN
MCBRIDE
|
Vice
President and Director
|
||||
Reuben
McBride
|
|||||
/s/ J.
DAVID WASSON, JR.
|
Secretary-Treasurer
and Director
|
||||
J.
David Wasson, Jr.
|
|||||
/s/ FRED
ANDERSON
|
Director
|
August
17, 2009
|
|||
Fred
Anderson
|
|||||
/s/ CHARLES
AYERS
|
Director
|
||||
Charles
Ayers
|
|||||
/s/ FRED
BROG
|
Director
|
||||
Fred
Brog
|
|||||
/s/ RAPHAEL
A. BRUMBELOE
|
Director
|
||||
Raphael
A. Brumbeloe
|
|||||
/s/ DELBERT
CRANFORD
|
Director
|
||||
Delbert
Cranford
|
|||||
/s/ JOEL
CUNNIGHAM
|
Director
|
||||
Joel
Cunningham
|
|||||
/s/ JIM
L. DOERSTLER
|
Director
|
||||
Jim
L. Doerstler
|
|||||
Signature
|
Title
|
Date
|
|||
/s/ JIMMY
EWING, JR.
|
Director
|
||||
Jimmy
Ewing, Jr.
|
|||||
/s/ MICHAEL
J. GUIDRY
|
Director
|
||||
Michael
J. Guidry
|
|||||
/s/ CHRISTOPHER
L. HAMON
|
Director
|
||||
Christopher
L. Hamon
|
|||||
/s/ SCOTT
W. HANDY
|
Director
|
||||
Scott
W. Handy
|
|||||
/s/ JIM
HERRON
|
Director
|
||||
Jim
Herron
|
|||||
/s/ MARTIN
HILLERT, JR.
|
Director
|
||||
Martin
Hillert, Jr.
|
August
17, 2009
|
||||
/s/ WILLIAM
A. KOPACZ
|
Director
|
||||
William
A. Kopacz
|
|||||
/s/ BURNS
E. MERCER
|
Director
|
||||
Burns
E. Mercer
|
|||||
/s/ GLENN
MILLER
|
Director
|
||||
Glenn
Miller
|
|||||
/s/ RANDY
D. RENTH
|
Director
|
||||
Randy
D. Renth
|
|||||
/s/ DWIGHT
ROSSOW
|
Director
|
||||
Dwight
Rossow
|
|||||
/s/ WAYNE
STRATTON
|
Director
|
||||
R.
Wayne Stratton
|
|||||
/s/ F.
E. WOLSKI
|
Director
|
||||
F.
E. Wolski
|
|||||
2009
|
2008
|
|||||||
Cash
and cash equivalents
|
$
|
504,999
|
$
|
177,809
|
||||
Restricted
cash
|
8,207
|
14,460
|
||||||
Investments
in preferred stock
|
47,000
|
-
|
||||||
Loans
to members
|
20,192,309
|
19,029,040
|
||||||
Less: Allowance
for loan losses
|
(622,960
|
)
|
(514,906
|
)
|
||||
Loans
to members, net
|
19,569,349
|
18,514,134
|
||||||
Accrued
interest and other receivables
|
260,428
|
258,315
|
||||||
Fixed
assets, net
|
43,162
|
21,045
|
||||||
Debt
service reserve funds
|
46,662
|
54,993
|
||||||
Bond
issuance costs, net
|
50,414
|
39,618
|
||||||
Foreclosed
assets, net
|
48,721
|
58,961
|
||||||
Derivative
assets
|
381,356
|
220,514
|
||||||
Other
assets
|
22,407
|
19,532
|
||||||
$
|
20,982,705
|
$
|
19,379,381
|
See
accompanying notes.
|
2009
|
2008
|
||||||||
Short-term
debt
|
$
|
4,867,864
|
$
|
6,327,453
|
|||||
Accrued
interest payable
|
249,601
|
244,299
|
|||||||
Long-term
debt
|
12,720,055
|
10,173,587
|
|||||||
Deferred
income
|
18,962
|
21,971
|
|||||||
Guarantee
liability
|
29,672
|
15,034
|
|||||||
Other
liabilities
|
32,955
|
27,216
|
|||||||
Derivative
liabilities
|
493,002
|
171,390
|
|||||||
Subordinated
deferrable debt
|
311,440
|
311,440
|
|||||||
Members'
subordinated certificates:
|
|||||||||
Membership
subordinated certificates
|
642,960
|
649,465
|
|||||||
Loan
and guarantee subordinated certificates
|
818,999
|
757,314
|
|||||||
Member
capital securities
|
278,095
|
-
|
|||||||
Total
members' subordinated certificates
|
1,740,054
|
1,406,779
|
|||||||
Commitments
and contingencies
|
|||||||||
Minority
interest
|
10,162
|
14,247
|
|||||||
Equity:
|
|||||||||
Retained
equity
|
500,823
|
657,138
|
|||||||
Accumulated
other comprehensive income
|
8,115
|
8,827
|
|||||||
Total
equity
|
508,938
|
665,965
|
|||||||
$
|
20,982,705
|
$
|
19,379,381
|
||||||
See
accompanying notes.
|
2009
|
2008
|
2007
|
|||||||||
Interest
income
|
$
|
1,070,764
|
$
|
1,051,393
|
$
|
1,039,650
|
|||||
Interest
expense
|
(935,021
|
)
|
(931,268
|
)
|
(991,754
|
)
|
|||||
Net
interest income
|
135,743
|
120,125
|
47,896
|
||||||||
(Provision
for) recovery of loan losses
|
(113,699
|
)
|
30,262
|
6,922
|
|||||||
Net
interest income after (provision for) recovery of loan
losses
|
22,044
|
150,387
|
54,818
|
||||||||
Non-interest
income:
|
|||||||||||
Fee
and other income
|
13,163
|
19,608
|
16,106
|
||||||||
Derivative
cash settlements
|
112,989
|
27,033
|
86,442
|
||||||||
Results
of operations of foreclosed assets
|
3,774
|
7,528
|
9,758
|
||||||||
Total
non-interest income
|
129,926
|
54,169
|
112,306
|
||||||||
Non-interest
expense:
|
|||||||||||
Salaries
and employee benefits
|
(36,865
|
)
|
(36,428
|
)
|
(33,817
|
)
|
|||||
Other
general and administrative expenses
|
(23,977
|
)
|
(24,041
|
)
|
(18,072
|
)
|
|||||
(Provision
for) recovery of guarantee liability
|
(1,615
|
)
|
3,104
|
1,700
|
|||||||
Market
adjustment on foreclosed assets
|
(8,014
|
)
|
(5,840
|
)
|
-
|
||||||
Derivative
forward value
|
(160,017
|
)
|
(98,743
|
)
|
(79,281
|
)
|
|||||
Foreign
currency adjustments
|
-
|
-
|
(14,554
|
)
|
|||||||
Loss
on sale of loans
|
-
|
(676
|
)
|
(1,584
|
)
|
||||||
Loss
on early extinguishment of debt
|
-
|
(5,509
|
)
|
(4,806
|
)
|
||||||
Other
|
(353
|
)
|
(112
|
)
|
(169
|
)
|
|||||
Total
non-interest expense
|
(230,841
|
)
|
(168,245
|
)
|
(150,583
|
)
|
|||||
(Loss)
income prior to income taxes and minority interest
|
(78,871
|
)
|
36,311
|
16,541
|
|||||||
Income
tax benefit (expense)
|
5,101
|
3,335
|
(2,396
|
)
|
|||||||
(Loss)
income prior to minority interest
|
(73,770
|
)
|
39,646
|
14,145
|
|||||||
Minority
interest, net of income taxes
|
3,900
|
6,099
|
(2,444
|
)
|
|||||||
Net
(loss) income
|
$
|
(69,870
|
)
|
$
|
45,745
|
$
|
11,701
|
||||
See
accompanying notes.
|
Patronage
Capital
|
|||||||||||||||||||||||||||||||||
Accumulated
|
Allocated
|
||||||||||||||||||||||||||||||||
Other
|
Subtotal
|
Unallocated
|
Members'
|
General
|
|||||||||||||||||||||||||||||
Comprehensive
|
Retained
|
Membership
|
Net
|
Education
|
Capital
|
Reserve
|
|||||||||||||||||||||||||||
Total
|
(Loss)
Income
|
Equity
|
Fees
|
Income
(Loss)
|
Fund
|
Reserve
|
Fund
|
Other
|
|||||||||||||||||||||||||
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
|
)
|
|||||||||||||||||||||
Income
prior to income taxes and
|
|||||||||||||||||||||||||||||||||
minority
interest
|
16,541
|
-
|
16,541
|
-
|
(89,481
|
)
|
945
|
1,464
|
1
|
103,612
|
|||||||||||||||||||||||
Other
comprehensive loss
|
(1,004
|
)
|
(1,004
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Income
tax expense
|
(2,396
|
)
|
-
|
(2,396
|
)
|
-
|
(2,396
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Minority
interest
|
(2,444
|
)
|
-
|
(2,444
|
)
|
-
|
(2,444
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Other
|
(817
|
)
|
-
|
(817
|
)
|
3
|
-
|
(820
|
)
|
-
|
-
|
-
|
|||||||||||||||||||||
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
|
)
|
|||||||||||||||||||||
Income
prior to income taxes and
|
|||||||||||||||||||||||||||||||||
minority
interest
|
36,311
|
-
|
36,311
|
-
|
(96,959
|
)
|
1,024
|
29,061
|
(2
|
)
|
103,187
|
||||||||||||||||||||||
Other
comprehensive loss
|
(3,377
|
)
|
(3,377
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Income
tax expense
|
3,335
|
-
|
3,335
|
-
|
3,335
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Minority
interest
|
6,099
|
-
|
6,099
|
-
|
6,099
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Other
|
(950
|
)
|
-
|
(950
|
)
|
(4
|
)
|
-
|
(946
|
)
|
40
|
-
|
(40
|
)
|
|||||||||||||||||||
Balance
as of May 31, 2008
|
$
|
665,965
|
$
|
8,827
|
$
|
657,138
|
$
|
993
|
$
|
44,003
|
$
|
1,484
|
$
|
187,409
|
$
|
496
|
$
|
422,753
|
|||||||||||||||
Patronage
capital retirement
|
(85,526
|
)
|
-
|
(85,526
|
)
|
-
|
-
|
-
|
(217
|
)
|
-
|
(85,309
|
)
|
||||||||||||||||||||
Loss
prior to income taxes and
|
|||||||||||||||||||||||||||||||||
minority
interest
|
(78,871
|
)
|
-
|
(78,871
|
)
|
-
|
(162,695
|
)
|
1,024
|
(94
|
)
|
-
|
82,894
|
||||||||||||||||||||
Other
comprehensive loss
|
(712
|
)
|
(712
|
)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Income
tax benefit
|
5,101
|
-
|
5,101
|
-
|
5,101
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Minority
interest
|
3,900
|
-
|
3,900
|
-
|
3,900
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Other
|
(919
|
)
|
-
|
(919
|
)
|
(3
|
)
|
-
|
(916
|
)
|
-
|
-
|
-
|
||||||||||||||||||||
Balance
as of May 31, 2009
|
$
|
508,938
|
$
|
8,115
|
$
|
500,823
|
$
|
990
|
$
|
(109,691
|
)
|
$
|
1,592
|
$
|
187,098
|
$
|
496
|
$
|
420,338
|
See
accompanying notes.
|
2009
|
2008
|
2007
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||||
Net
(loss) income
|
$
|
(69,870
|
)
|
$
|
45,745
|
$
|
11,701
|
||
Add
(deduct):
|
|||||||||
Amortization
of deferred income
|
(6,125
|
)
|
(6,954
|
)
|
(12,248
|
)
|
|||
Amortization
of bond issuance costs and deferred charges
|
11,431
|
16,241
|
17,406
|
||||||
Depreciation
|
2,284
|
2,274
|
2,182
|
||||||
Provision
for (recovery of) loan losses
|
113,699
|
(30,262
|
)
|
(6,922
|
)
|
||||
Provision
for (recovery of) guarantee liability
|
1,615
|
(3,104
|
)
|
(1,700
|
)
|
||||
Results
of operations of foreclosed assets
|
(3,774
|
)
|
(7,528
|
)
|
(9,758
|
)
|
|||
Market
adjustment on foreclosed assets
|
8,014
|
5,840
|
-
|
||||||
Derivative
forward value
|
160,017
|
98,743
|
79,281
|
||||||
Purchases
of investment in trading securities
|
(71,405
|
)
|
-
|
-
|
|||||
Sales
of investments in trading securities
|
71,405
|
-
|
-
|
||||||
Foreign
currency adjustments
|
-
|
-
|
14,554
|
||||||
Loss
on sale of loans
|
-
|
676
|
1,584
|
||||||
Restricted
interest earned on restricted cash
|
(138
|
)
|
(123
|
)
|
-
|
||||
Changes
in operating assets and liabilities:
|
|||||||||
Accrued
interest and other receivables
|
(12,249
|
)
|
24,816
|
27,203
|
|||||
Accrued
interest payable
|
5,302
|
(37,159
|
)
|
(21,501
|
)
|
||||
Other
|
5,917
|
(7,696
|
)
|
(702
|
)
|
||||
Net
cash provided by operating activities
|
216,123
|
101,509
|
101,080
|
||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||||
Advances
made on loans
|
(9,541,927
|
)
|
(8,013,327
|
)
|
(7,228,143
|
)
|
|||
Principal
collected on loans
|
8,371,234
|
7,019,075
|
7,052,334
|
||||||
Net
investment in fixed assets
|
(20,940
|
)
|
(17,253
|
)
|
(591
|
)
|
|||
Net
cash provided by foreclosed assets
|
6,000
|
9,056
|
63,831
|
||||||
Net
proceeds from sale of foreclosed assets
|
-
|
-
|
487
|
||||||
Net
proceeds from sale of loans
|
-
|
73,972
|
364,100
|
||||||
Net
investment in preferred stock
|
(47,000
|
)
|
-
|
-
|
|||||
Change
in restricted cash
|
6,253
|
(12,428
|
)
|
-
|
|||||
Net
cash provided by (used in) investing activities
|
(1,226,380
|
)
|
(940,905
|
)
|
252,018
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||||
Proceeds
from (repayments of) issuances of short-term debt, net
|
(861,991
|
)
|
265,645
|
(470,591
|
)
|
||||
Proceeds
from issuance of long-term debt, net
|
5,138,404
|
2,061,744
|
2,066,332
|
||||||
Payments
for retirement of long-term debt
|
(3,208,325
|
)
|
(1,380,423
|
)
|
(1,645,848
|
)
|
|||
Payments
for retirement of subordinated deferrable debt
|
-
|
(175,000
|
)
|
(150,000
|
)
|
||||
Proceeds
from issuance of members' subordinated certificates
|
387,557
|
76,589
|
45,605
|
||||||
Payments
for retirement of members' subordinated certificates
|
(38,048
|
)
|
(48,308
|
)
|
(68,319
|
)
|
|||
Payments
for retirement of patronage capital
|
(78,479
|
)
|
(77,378
|
)
|
(74,094
|
)
|
|||
Payments
for retirement of RTFC patronage capital
|
(1,671
|
)
|
(9,771
|
)
|
(12,414
|
)
|
|||
Net
cash provided by financing activities
|
1,337,447
|
713,098
|
(309,329
|
)
|
|||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
327,190
|
(126,298
|
)
|
43,769
|
|||||
BEGINNING
CASH AND CASH EQUIVALENTS
|
177,809
|
304,107
|
260,338
|
||||||
ENDING
CASH AND CASH EQUIVALENTS
|
$
|
504,999
|
$
|
177,809
|
$
|
304,107
|
|||
See
accompanying notes.
|
2009
|
2008
|
2007
|
|||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|||||||||
Cash
paid for interest
|
$
|
918,288
|
$
|
957,806
|
$
|
1,000,826
|
|||
Cash
paid for income taxes
|
419
|
1,429
|
1,376
|
||||||
Non-cash
financing and investing activities:
|
|||||||||
Subordinated
certificates applied against loan balance
|
1,447
|
-
|
-
|
||||||
Patronage
capital applied against loan balances
|
87
|
-
|
-
|
||||||
Minority
interest patronage capital applied against loan balances
|
43
|
-
|
-
|
||||||
Net
decrease in debt service reserve funds/debt service
|
|||||||||
reserve
certificates
|
(8,331
|
)
|
-
|
(25,166
|
)
|
||||
|
See
accompanying notes.
|
·
|
829
distribution systems and 68 generation and transmission ("power supply")
systems, totaling 897 utility members, the majority of which are
consumer-owned electric
cooperatives;
|
·
|
498
telecommunications members;
|
·
|
66
service members; and
|
·
|
61
associates.
|
|
(c)
|
Cash
and Cash Equivalents
|
|
(d)
|
Restricted
Cash
|
·
|
Cash
proceeds from the issuance of CREBs that may only be used for the funding
of CREBs loan advances to participating members to reimburse them for
costs related to construction, refinancing, and reimbursement of capital
expenditures related to qualifying projects. We may invest these funds and
the interest earned on the invested cash is restricted as it may only be
used to fund qualifying projects.
|
·
|
Cash
proceeds from the issuance of CREBs that may only be used to reimburse us
for the costs of issuing the CREBs. These funds are held by the
trustee and are only released to us to cover the costs of issuance, for
which we must submit invoices for reimbursement. We may invest
these funds and the interest earned on the invested cash is restricted and
may only be used to cover issuance expenses and to fund qualifying
projects.
|
·
|
Cash
from principal payments from members on CREBs loans that may only be used
to make debt service payments to bond investors. We collect principal and
interest payments from borrowers quarterly. We may withdraw the
interest collected on CREBs loans at any time. We may invest
these funds and the interest earned on the invested cash is not restricted
and may be withdrawn at any time.
|
(e)
|
Investments
|
(f)
|
Loan
Securitizations
|
·
|
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.
|
|
(j)
|
Impairment
of Loans
|
·
|
the
review of the borrower's audited financial statements and interim
financial statements if available,
|
·
|
the
borrower's payment history,
|
·
|
communication
with the borrower,
|
·
|
economic
conditions in the borrower's service
territory,
|
·
|
pending
legal action involving the
borrower,
|
·
|
restructure
agreements between us and the borrower,
and
|
·
|
estimates
of the value of the borrower's assets that have been pledged as collateral
to secure our loans.
|
(dollar
amounts in thousands)
|
2009
|
2008
|
||||||||||||
Furniture,
fixtures, equipment and other
|
$
|
19,452
|
$
|
16,361
|
||||||||||
Less:
accumulated depreciation
|
(13,666
|
)
|
(11,489
|
)
|
||||||||||
Land
|
31,367
|
16,173
|
||||||||||||
Construction-in-progress,
building and software
|
6,009
|
-
|
||||||||||||
Fixed
assets
|
$
|
43,162
|
$
|
21,045
|
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
|||||||||||
Interest
on long-term fixed-rate loans (1)
|
$
|
890,367
|
$
|
872,488
|
$
|
833,247
|
||||||||
Interest
on long-term variable-rate loans (1)
|
92,975
|
86,787
|
114,786
|
|||||||||||
Interest
on short-term loans (1)
|
75,604
|
77,145
|
72,632
|
|||||||||||
Interest
on investments (2)
|
5,683
|
7,394
|
9,662
|
|||||||||||
Fee
income
|
6,135
|
7,579
|
9,323
|
|||||||||||
Total
interest income
|
$
|
1,070,764
|
$
|
1,051,393
|
$
|
1,039,650
|
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
|||||||||||
Commercial
paper and bank bid notes interest expense (1)
|
$
|
58,688
|
$
|
122,786
|
$
|
178,687
|
||||||||
Medium-term
notes interest expense (1)
|
326,313
|
330,193
|
363,760
|
|||||||||||
Collateral
trust bonds interest expense (1)
|
290,152
|
243,579
|
218,523
|
|||||||||||
Subordinated
deferrable debt interest expense (1)
|
19,663
|
19,663
|
33,089
|
|||||||||||
Subordinated
certificates interest expense (1)
|
55,330
|
48,717
|
47,852
|
|||||||||||
Long-term
private debt interest expense (1)
|
164,306
|
151,694
|
130,568
|
|||||||||||
Debt
issuance costs (2)
|
10,158
|
9,605
|
12,328
|
|||||||||||
Fee
expense (3)
|
10,411
|
5,031
|
6,947
|
|||||||||||
Total
interest expense
|
$
|
935,021
|
$
|
931,268
|
$
|
991,754
|
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
||||||||||
Net
(loss) income
|
$
|
(69,870
|
)
|
$
|
45,745
|
$
|
11,701
|
||||||
Other
comprehensive loss:
|
|||||||||||||
Reclassification
adjustment for realized gains on derivatives
|
(712
|
)
|
(3,377
|
)
|
(1,004
|
)
|
|||||||
Comprehensive
(loss) income
|
$
|
(70,582
|
)
|
$
|
42,368
|
$
|
10,697
|
(dollar
amounts in thousands)
|
2010
|
2011
|
2012
|
|||
Lease
Payments (1)
|
$
|
3,503
|
$
|
3,520
|
$
|
1,322
|
(dollar
amounts in thousands)
|
2009
|
2008
|
|||
Balance
Sheet:
|
|||||
Total
equity, as previously reported
|
$
|
508,938
|
$
|
665,965
|
|
Increase
for SFAS 160 reclassification
|
|||||
of
noncontrolling interests
|
10,162
|
14,247
|
|||
Total
equity, as adjusted
|
$
|
519,100
|
$
|
680,212
|
2009
|
2008
|
||||||||||||||||
(dollar
amounts in thousands)
|
Loans
Outstanding
|
Unadvanced
Commitments
(1)
|
Loans
Outstanding
|
Unadvanced
Commitments
(1)
|
|||||||||||||
Total
by loan type (2)
(3):
|
|||||||||||||||||
Long-term
fixed-rate loans (4)
|
$
|
14,602,365
|
$
|
-
|
$
|
15,204,614
|
$
|
-
|
|||||||||
Long-term
variable-rate loans (4)
|
3,243,716
|
5,609,977
|
1,882,095
|
5,975,541
|
|||||||||||||
Loans
guaranteed by RUS
|
243,997
|
-
|
250,169
|
491
|
|||||||||||||
Short-term
loans
|
2,098,129
|
7,941,146
|
1,690,117
|
7,597,712
|
|||||||||||||
Total
loans outstanding
|
20,188,207
|
13,551,123
|
19,026,995
|
13,573,744
|
|||||||||||||
Deferred
origination fees
|
4,102
|
-
|
2,045
|
-
|
|||||||||||||
Less:
Allowance for loan losses
|
(622,960
|
)
|
-
|
(514,906
|
)
|
-
|
|||||||||||
Net
loans outstanding
|
$
|
19,569,349
|
$
|
13,551,123
|
$
|
18,514,134
|
$
|
13,573,744
|
|||||||||
Total
by segment (2):
|
|||||||||||||||||
National
Rural:
|
|||||||||||||||||
Distribution
|
$
|
13,730,511
|
$
|
9,472,849
|
$
|
13,438,370
|
$
|
9,579,213
|
|||||||||
Power
supply
|
4,268,244
|
3,178,471
|
3,339,112
|
2,960,693
|
|||||||||||||
Statewide
and associate
|
92,578
|
152,701
|
108,925
|
158,293
|
|||||||||||||
National
Rural total
|
18,091,333
|
12,804,021
|
16,886,407
|
12,698,199
|
|||||||||||||
RTFC
|
1,680,154
|
457,022
|
1,726,514
|
562,389
|
|||||||||||||
NCSC
|
416,720
|
290,080
|
414,074
|
313,156
|
|||||||||||||
Total
loans outstanding
|
$
|
20,188,207
|
$
|
13,551,123
|
$
|
19,026,995
|
$
|
13,573,744
|
2009
|
2008
|
|||||||||||||||
(dollar
amounts in thousands)
|
Loans
|
Unadvanced
|
Loans
|
Unadvanced
|
||||||||||||
Outstanding
|
Commitments
(1)
|
Outstanding
|
Commitments
(1)
|
|||||||||||||
Non-performing
and restructured loans:
|
||||||||||||||||
Non-performing
loans (2):
|
||||||||||||||||
RTFC:
|
||||||||||||||||
Long-term
fixed-rate loans
|
$
|
8,960
|
$
|
-
|
$
|
219,912
|
$
|
-
|
||||||||
Long-term
variable-rate loans
|
457,504
|
-
|
261,109
|
-
|
||||||||||||
Short-term
loans
|
57,294
|
-
|
25,843
|
-
|
||||||||||||
Total
non-performing loans
|
$
|
523,758
|
$
|
-
|
$
|
506,864
|
$
|
-
|
||||||||
Restructured
loans (2):
|
||||||||||||||||
National
Rural:
|
||||||||||||||||
Long-term fixed-rate loans
(3)
|
$
|
41,907
|
$
|
-
|
$
|
52,309
|
$
|
-
|
||||||||
Long-term
variable-rate loans (3)
|
490,827
|
186,673
|
519,257
|
186,673
|
||||||||||||
Short-term
loans
|
-
|
12,500
|
-
|
12,500
|
||||||||||||
National
Rural total restructured loans
|
532,734
|
199,173
|
571,566
|
199,173
|
||||||||||||
RTFC:
|
||||||||||||||||
Long-term
fixed-rate loans
|
4,853
|
-
|
5,545
|
-
|
||||||||||||
Total
restructured loans
|
$
|
537,587
|
$
|
199,173
|
$
|
577,111
|
$
|
199,173
|
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
|||||||||
Balance
at beginning of year
|
$
|
514,906
|
$
|
561,663
|
$
|
611,443
|
||||||
(Recovery of) provision for loan losses
|
113,699
|
(30,262
|
)
|
(6,922
|
)
|
|||||||
Charge-offs
|
(5,988
|
)
|
(16,911
|
)
|
(44,668
|
)
|
||||||
Recoveries
|
343
|
416
|
1,810
|
|||||||||
Balance
at end of year
|
$
|
622,960
|
$
|
514,906
|
$
|
561,663
|
2009
|
2008
|
||||||||||
(dollar
amounts in thousands)
|
Amount
|
%
|
Amount
|
%
|
|||||||
Total
by type:
|
|||||||||||
Loans
|
$
|
3,686,956
|
17
|
%
|
$
|
3,395,865
|
17
|
%
|
|||
Guarantees
|
363,883
|
2
|
164,740
|
1
|
|||||||
Total
credit exposure to ten largest borrowers
|
$
|
4,050,839
|
19
|
%
|
$
|
3,560,605
|
18
|
%
|
|||
Total
by segment:
|
|||||||||||
National
Rural
|
$
|
3,497,331
|
16
|
%
|
$
|
3,043,905
|
15
|
%
|
|||
RTFC
|
523,758
|
3
|
491,700
|
3
|
|||||||
NCSC
|
29,750
|
-
|
25,000
|
-
|
|||||||
Total
credit exposure to ten largest borrowers
|
$
|
4,050,839
|
19
|
%
|
$
|
3,560,605
|
18
|
%
|
2009
|
2008
|
||||||||||
(dollar
amounts in thousands)
|
Average
Loans
Outstanding
|
Weighted-
Average
Interest
Rate
|
Average
Loans
Outstanding
|
Weighted-
Average
Interest
Rate
|
|||||||
Total
by loan type:
|
|||||||||||
Long-term
fixed rate
|
$
|
14,710,754
|
5.93
|
%
|
$
|
14,573,227
|
5.90
|
%
|
|||
Long-term
variable rate
|
1,654,355
|
5.34
|
1,170,017
|
6.94
|
|||||||
Loans
guaranteed by RUS
|
246,789
|
5.09
|
252,788
|
5.49
|
|||||||
Short-term
|
2,034,736
|
4.05
|
1,310,313
|
5.89
|
|||||||
Non-performing
|
495,014
|
-
|
504,310
|
0.01
|
|||||||
Restructured
|
556,892
|
0.63
|
589,662
|
0.64
|
|||||||
Total
|
$
|
19,698,540
|
5.38
|
|
$
|
18,400,317
|
5.63
|
|
|||
Total
by segment:
|
|||||||||||
National
Rural
|
$
|
17,579,888
|
5.43
|
%
|
$
|
16,167,441
|
5.67
|
%
|
|||
RTFC
|
1,693,123
|
4.50
|
1,791,100
|
4.96
|
|||||||
NCSC
|
425,529
|
6.59
|
441,776
|
7.10
|
|||||||
Total
|
$
|
19,698,540
|
5.38
|
|
$
|
18,400,317
|
5.63
|
|
(dollar
amounts in thousands)
|
Amount
Repricing
|
Weighted-Average
Interest
Rate
|
|||||
2010
|
$
|
1,272,180
|
5.67
|
%
|
|||
2011
|
1,215,472
|
5.84
|
|||||
2012
|
1,135,457
|
6.25
|
|||||
2013
|
765,228
|
6.07
|
|||||
2014
|
625,021
|
6.17
|
|||||
Thereafter
|
2,127,232
|
6.36
|
(dollar
amounts in thousands)
|
Amortization
(1)
|
|||
2010
|
$
|
1,573,218
|
||
2011
|
860,033
|
|||
2012
|
1,451,411
|
|||
2013
|
863,403
|
|||
2014
|
858,133
|
|||
Thereafter
|
12,483,880
|
|||
Total
|
$
|
18,090,078
|
(dollar
amounts in thousands)
|
2009
|
2008
|
|||||||||||||||||||
Total
by loan type:
|
Secured
|
%
|
Unsecured
|
%
|
Secured
|
%
|
Unsecured
|
%
|
|||||||||||||
Long-term
fixed-rate loans
|
$
|
14,044,469
|
96
|
%
|
$
|
557,896
|
4
|
%
|
$
|
14,732,058
|
97
|
%
|
$
|
472,556
|
3
|
%
|
|||||
Long-term
variable-rate loans
|
2,835,451
|
87
|
408,265
|
13
|
1,728,803
|
92
|
153,292
|
8
|
|||||||||||||
Loans
guaranteed by RUS
|
243,997
|
100
|
-
|
-
|
250,169
|
100
|
-
|
-
|
|||||||||||||
Short-term
loans
|
233,179
|
11
|
1,864,950
|
89
|
165,226
|
10
|
1,524,891
|
90
|
|||||||||||||
Total
loans
|
$
|
17,357,096
|
86
|
$
|
2,831,111
|
14
|
$
|
16,876,256
|
89
|
$
|
2,150,739
|
11
|
|||||||||
Total
by segment:
|
|||||||||||||||||||||
National
Rural
|
$
|
15,562,761
|
86
|
%
|
$
|
2,528,572
|
14
|
%
|
$
|
15,021,067
|
89
|
%
|
$
|
1,865,340
|
11
|
%
|
|||||
RTFC
|
1,443,395
|
86
|
236,759
|
14
|
1,497,487
|
87
|
229,027
|
13
|
|||||||||||||
NCSC
|
350,940
|
84
|
65,780
|
16
|
357,702
|
86
|
56,372
|
14
|
|||||||||||||
Total
loans
|
$
|
17,357,096
|
86
|
$
|
2,831,111
|
14
|
$
|
16,876,256
|
89
|
$
|
2,150,739
|
11
|
(dollar
amounts in thousands)
|
2009
|
2008
|
|||
Collateral
trust bonds:
|
|||||
2007
indenture
|
|||||
Distribution
system mortgage notes
|
$
|
4,176,760
|
$
|
917,925
|
|
Collateral
trust bonds
|
3,000,000
|
700,000
|
|||
1994
indenture
|
|||||
Distribution
system mortgage notes
|
$
|
2,308,713
|
$
|
3,989,443
|
|
RUS
guaranteed loans qualifying as permitted investments
|
211,337
|
215,329
|
|||
Total
pledged collateral
|
$
|
2,520,050
|
$
|
4,204,772
|
|
Collateral
trust bonds
|
2,190,000
|
4,015,000
|
|||
1972
indenture
|
|||||
Cash
|
$
|
2,032
|
$
|
2,032
|
|
Collateral
trust bonds
|
1,736
|
1,927
|
|||
Farmer
Mac:
|
|||||
Utility
system notes
|
$
|
1,488,929
|
$
|
1,042,564
|
|
Farmer
Mac notes payable
|
1,200,000
|
900,000
|
(dollar
amounts in thousands)
|
2009
|
2008
|
||
Utility
system mortgage notes on deposit
|
$
|
3,770,983
|
$
|
3,191,292
|
REDLG
notes payable
|
3,000,000
|
2,500,000
|
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
|||||||||
Beginning
balance
|
$
|
58,961
|
$
|
66,329
|
$
|
120,889
|
||||||
Results
of operations
|
3,774
|
7,528
|
9,758
|
|||||||||
Net
cash provided by foreclosed assets
|
(6,000
|
)
|
(9,056
|
)
|
(63,831
|
)
|
||||||
Market
adjustment
|
(8,014
|
)
|
(5,840
|
)
|
-
|
|||||||
Sale
of foreclosed assets
|
-
|
-
|
(487
|
)
|
||||||||
Ending
balance
|
$
|
48,721
|
$
|
58,961
|
$
|
66,329
|
2009
|
2008
|
||||||||||
(dollar
amounts in thousands)
|
Debt
Outstanding
|
Effective
Interest
Rate
|
Debt
Outstanding
|
Effective
Interest
Rate
|
|||||||
Short-term
debt:
|
|||||||||||
Commercial
paper sold through dealers, net of discounts
|
$
|
594,533
|
0.33
|
%
|
$
|
1,511,953
|
2.33
|
%
|
|||
Commercial
paper sold directly to members, at par
|
934,897
|
0.35
|
1,275,809
|
2.31
|
|||||||
Commercial
paper sold directly to non-members, at par
|
12,502
|
1.58
|
11,752
|
4.26
|
|||||||
Total
commercial paper
|
1,541,932
|
0.35
|
2,799,514
|
2.33
|
|||||||
Daily
liquidity fund sold directly to members
|
291,341
|
0.22
|
250,750
|
2.05
|
|||||||
Term
loan
|
200,000
|
3.31
|
-
|
-
|
|||||||
Bank
bid notes
|
255,000
|
1.49
|
100,000
|
2.80
|
|||||||
Subtotal
short-term debt
|
2,288,273
|
0.72
|
3,150,264
|
2.32
|
|||||||
Long-term
debt maturing within one year:
|
|||||||||||
Medium-term
notes sold through dealers
|
1,674,760
|
4.88
|
558,776
|
4.40
|
|||||||
Medium-term
notes sold to members
|
502,396
|
4.65
|
288,634
|
4.77
|
|||||||
Secured
collateral trust bonds
|
209,985
|
5.71
|
1,824,995
|
3.27
|
|||||||
Secured
notes payable
|
187,800
|
1.20
|
500,000
|
4.66
|
|||||||
Unsecured
notes payable
|
4,650
|
5.22
|
4,784
|
5.50
|
|||||||
Total
long-term debt maturing within one year
|
2,579,591
|
4.64
|
3,177,189
|
3.83
|
|||||||
Total
short-term debt
|
$
|
4,867,864
|
2.79
|
$
|
6,327,453
|
3.08
|
(dollar
amounts in thousands)
|
2009
|
2008
|
Termination
Date
|
Facility
fee per
year
(1)
|
||||||||
Five-year
agreement (2)
|
$
|
1,125,000
|
$
|
1,125,000
|
March
16, 2012
|
6
basis points
|
||||||
Five-year
agreement (2)
|
1,025,000
|
1,025,000
|
March
22, 2011
|
6
basis points
|
||||||||
364-day
agreement
|
1,000,000
|
-
|
March
12, 2010
|
12.5
basis points
|
||||||||
364-day
agreement
|
-
|
1,500,000
|
March
13, 2009
|
5
basis points
|
||||||||
Total
|
$
|
3,150,000
|
$
|
3,650,000
|
·
|
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
|
2009
|
2008
|
||||||||
Minimum
average adjusted TIER over the six most recent fiscal
quarters
|
1.025
|
1.18
|
1.16
|
|||||||
Minimum
adjusted TIER at fiscal year end (1)
|
1.05
|
1.10
|
1.15
|
|||||||
Maximum
ratio of senior debt to total equity
|
10.00
|
6.90
|
7.33
|
|||||||
2009
|
2008
|
|||||||||||||||||
Debt
|
Effective
|
Debt
|
Effective
|
|||||||||||||||
(dollar
amounts in thousands)
|
Outstanding
|
Interest
Rate
|
Outstanding
|
Interest
Rate
|
||||||||||||||
Unsecured
long-term debt:
|
||||||||||||||||||
Medium-term
notes, sold through dealers (1)
|
$
|
3,469,580
|
6.87
|
%
|
$
|
4,231,982
|
6.70
|
%
|
||||||||||
Medium-term
notes, sold to members (2)
|
220,613
|
4.65
|
104,105
|
4.77
|
||||||||||||||
Subtotal
|
3,690,193
|
6.74
|
4,336,087
|
6.65
|
||||||||||||||
Unamortized
discount
|
(3,120
|
)
|
(5,483
|
)
|
||||||||||||||
Total
unsecured medium-term notes
|
3,687,073
|
4,330,604
|
||||||||||||||||
Unsecured
notes payable
|
3,053,705
|
4.17
|
2,558,362
|
5.09
|
||||||||||||||
Unamortized
discount
|
(1,694
|
)
|
(1,959
|
)
|
||||||||||||||
Total
unsecured notes payable
|
3,052,011
|
2,556,403
|
||||||||||||||||
Total
unsecured long-term debt
|
6,739,084
|
5.58
|
6,887,007
|
6.07
|
||||||||||||||
Secured
long-term debt:
|
||||||||||||||||||
Collateral
trust bonds:
|
||||||||||||||||||
Floating
Rate Bonds, due 2009 (3)
|
-
|
-
|
5,000
|
2.93
|
||||||||||||||
5.70%,
Bonds, due 2010 (3)
|
-
|
-
|
200,000
|
5.80
|
||||||||||||||
Floating
Rate Bonds, Series E-2, due 2010
|
1,736
|
7.50
|
1,927
|
7.50
|
||||||||||||||
Floating
Rate Bonds, due 2010
|
400,000
|
2.18
|
-
|
|||||||||||||||
4.375%,
Bonds, due 2010
|
500,000
|
4.60
|
500,000
|
4.60
|
||||||||||||||
5.50%,
Bonds, due 2013
|
900,000
|
5.68
|
-
|
-
|
||||||||||||||
4.75%,
Bonds, due 2014
|
600,000
|
4.84
|
600,000
|
4.84
|
||||||||||||||
7.20%,
Bonds, due 2015
|
50,000
|
7.32
|
50,000
|
7.32
|
||||||||||||||
5.45%,
Bonds, due 2017
|
570,000
|
5.58
|
570,000
|
5.58
|
||||||||||||||
5.45%,
Bonds, due 2018
|
700,000
|
5.57
|
700,000
|
5.57
|
||||||||||||||
6.55%,
Bonds, due 2018
|
175,000
|
6.68
|
175,000
|
6.68
|
||||||||||||||
10.375%,
Bonds, due 2018
|
1,000,000
|
10.61
|
-
|
|||||||||||||||
7.35%,
Bonds, due 2026 (4)
|
85,000
|
7.45
|
90,000
|
7.45
|
||||||||||||||
Subtotal
|
4,981,736
|
6.23
|
2,891,927
|
5.42
|
||||||||||||||
Unamortized
discount
|
(12,965
|
)
|
(5,347
|
)
|
||||||||||||||
Total
secured collateral trust bonds
|
4,968,771
|
2,886,580
|
||||||||||||||||
Secured
notes payable
|
1,012,200
|
2.82
|
400,000
|
3.38
|
||||||||||||||
Total
secured long-term debt
|
5,980,971
|
5.66
|
3,286,580
|
5.17
|
||||||||||||||
Total
long-term debt
|
$
|
12,720,055
|
5.62
|
$
|
10,173,587
|
5.78
|
Amount
|
Weighted-Average
|
|||||||||
(dollar
amounts in thousands)
|
Maturing
|
Interest
Rate
|
||||||||
2010
(1)
|
$
|
2,579,591
|
4.49
|
%
|
||||||
2011
|
1,830,742
|
3.86
|
||||||||
2012
|
1,948,230
|
6.33
|
||||||||
2013
|
123,210
|
3.82
|
||||||||
2014
|
2,180,966
|
4.81
|
||||||||
Thereafter
|
6,636,907
|
6.30
|
||||||||
Total
|
$
|
15,299,646
|
5.48
|
2009
|
2008
|
|||||||||||||||||
Amounts
|
Effective
|
Amounts
|
Effective
|
|||||||||||||||
(dollar
amounts in thousands)
|
Outstanding
|
Interest
Rate
|
Outstanding
|
Interest
Rate
|
||||||||||||||
6.75%
due 2043 (1)
|
$
|
125,000
|
7.00
|
%
|
$
|
125,000
|
7.00
|
%
|
||||||||||
6.10% due 2044
(2)
|
88,201
|
6.33
|
88,201
|
6.33
|
||||||||||||||
5.95% due 2045
(3)
|
98,239
|
6.14
|
98,239
|
6.14
|
||||||||||||||
Total
|
$
|
311,440
|
6.54
|
$
|
311,440
|
6.54
|
Notional
Amounts Outstanding
|
||||
(dollar
amounts in thousands)
|
2009
|
2008
|
||
Pay
fixed-receive variable
|
$
|
6,506,603
|
$
|
7,659,973
|
Pay
variable-receive fixed
|
5,323,239
|
5,256,440
|
||
Total
interest rate swaps
|
$
|
11,829,842
|
$
|
12,916,413
|
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
||||||
Statement
of operations:
|
|||||||||
Agreements
that do not qualify for hedge accounting:
|
|||||||||
Derivative
cash settlements
|
$
|
112,989
|
$
|
27,033
|
$
|
77,342
|
|||
Derivative
forward value
|
(160,017
|
)
|
(98,743
|
)
|
(83,322
|
)
|
|||
Total
loss on interest rate swaps
|
$
|
(47,028
|
)
|
$
|
(71,710
|
)
|
$
|
(5,980
|
)
|
Comprehensive
income:
|
|||||||||
Amortization
of transition adjustment
|
$
|
(712
|
)
|
$
|
(3,377
|
)
|
$
|
(1,004
|
)
|
Total
comprehensive loss
|
$
|
(712
|
)
|
$
|
(3,377
|
)
|
$
|
(1,004
|
)
|
(dollar
amounts in thousands)
|
2007
|
||
Statement
of operations:
|
|||
Agreements
that do not qualify for hedge accounting:
|
|||
Derivative
cash settlements
|
$
|
9,100
|
|
Derivative
forward value
|
4,041
|
||
Total
gain on cross currency interest rate swaps
|
$
|
13,141
|
Notional
|
Required
Company
|
Amount
Company
|
Net
|
||||||||||
(dollar
amounts in thousands)
|
Amount
|
Payment
|
Would
Collect
|
Total
|
|||||||||
Rating
Level:
|
|||||||||||||
Mutual
rating trigger if ratings fall to
|
|||||||||||||
Baa1/BBB+
and below (1)
|
$
|
6,917,396
|
$
|
(141,453
|
)
|
$
|
21,194
|
$
|
(120,259
|
)
|
|||
Counterparty
may terminate if ratings
|
|||||||||||||
fall
below Baa1/BBB+ (2)
|
938,064
|
(5,503
|
)
|
-
|
(5,503
|
)
|
|||||||
Total
|
$
|
7,855,460
|
$
|
(146,956
|
)
|
$
|
21,194
|
$
|
(125,762
|
)
|
|||
2009
|
2008
|
||||||||||||||||
Weighted-
|
Weighted-
|
||||||||||||||||
Amounts
|
Average
|
Amounts
|
Average
|
||||||||||||||
(dollar
amounts in thousands)
|
Outstanding
|
Interest
Rate
|
Outstanding
|
Interest
Rate
|
|||||||||||||
Number
of subscribing members
|
897
|
898
|
|||||||||||||||
Membership
subordinated certificates:
|
|||||||||||||||||
Certificates
maturing 2020 through 2095
|
$
|
628,988
|
$
|
628,471
|
|||||||||||||
Subscribed
and unissued (1)
|
13,972
|
20,994
|
|||||||||||||||
Total
membership subordinated certificates
|
642,960
|
4.90
|
%
|
649,465
|
4.88
|
%
|
|||||||||||
Loan
and guarantee subordinated certificates:
|
|||||||||||||||||
3%
certificates maturing through 2040
|
111,095
|
111,095
|
|||||||||||||||
3%
to 12% certificates maturing through 2042
|
314,456
|
239,079
|
|||||||||||||||
Non-interest
bearing certificates maturing through 2044
|
352,581
|
362,085
|
|||||||||||||||
Subscribed
and unissued (1)
|
40,867
|
45,055
|
|||||||||||||||
Total
loan and guarantee subordinated certificates
|
818,999
|
2.52
|
757,314
|
2.24
|
|||||||||||||
Member
capital securities:
|
|||||||||||||||||
7.50%
securities maturing through 2044
|
278,095
|
7.50
|
-
|
-
|
|||||||||||||
Total
members' subordinated certificates
|
$
|
1,740,054
|
4.20
|
$
|
1,406,779
|
3.46
|
(dollar
amounts in thousands)
|
2009
|
2008
|
|||||||
Membership
fees
|
$
|
990
|
$
|
993
|
|||||
Education
fund
|
1,592
|
1,484
|
|||||||
Members'
capital reserve
|
187,098
|
187,409
|
|||||||
Allocated
net income
|
420,834
|
423,249
|
|||||||
Unallocated
net loss (1)
|
(6,198
|
)
|
(53
|
)
|
|||||
Total
members' equity
|
604,316
|
613,082
|
|||||||
Prior
years cumulative derivative forward
|
|||||||||
value
and foreign currency adjustments
|
44,056
|
131,551
|
|||||||
Year-to-date
derivative forward value loss (2)
|
(147,549
|
)
|
(87,495
|
)
|
|||||
Total
retained equity
|
500,823
|
657,138
|
|||||||
Accumulated
other comprehensive income
|
8,115
|
8,827
|
|||||||
Total
equity
|
$
|
508,938
|
$
|
665,965
|
(dollar
amounts in thousands)
|
2009
|
2008
|
||||
Total
by type:
|
||||||
Long-term
tax-exempt bonds (1)
|
$
|
644,540
|
$
|
498,495
|
||
Indemnifications
of tax benefit transfers (2)
|
81,574
|
94,821
|
||||
Letters
of credit (3)
|
450,659
|
343,424
|
||||
Other
guarantees (4)
|
98,682
|
100,400
|
||||
Total
|
$
|
1,275,455
|
$
|
1,037,140
|
||
Total
by segment:
|
||||||
National
Rural:
|
||||||
Distribution
|
$
|
264,084
|
$
|
184,459
|
||
Power
supply
|
945,624
|
786,455
|
||||
Statewide
and associate
|
23,625
|
22,785
|
||||
National
Rural total
|
1,233,333
|
993,699
|
||||
RTFC
|
500
|
260
|
||||
NCSC
|
41,622
|
43,181
|
||||
Total
|
$
|
1,275,455
|
$
|
1,037,140
|
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
||||||
Beginning
balance
|
$
|
15,034
|
$
|
18,929
|
$
|
16,750
|
|||
Net
change in non-contingent liability
|
13,023
|
(791
|
)
|
3,879
|
|||||
Provision
for (recovery of) contingent guarantee losses
|
1,615
|
(3,104
|
)
|
(1,700
|
)
|
||||
Ending
balance
|
$
|
29,672
|
$
|
15,034
|
$
|
18,929
|
|||
Liability
as a percentage of total guarantees
|
2.33
|
%
|
1.45
|
%
|
1.76
|
%
|
(dollar
amounts in thousands)
|
Amount
|
|
2010
|
$
|
326,570
|
2011
|
214,291
|
|
2012
|
81,035
|
|
2013
|
120,596
|
|
2014
|
51,089
|
|
Thereafter
|
481,874
|
|
Total
|
$
|
1,275,455
|
·
|
Level
1 – Quoted prices for identical instruments in active
markets.
|
·
|
Level
2 – Quoted prices for similar instruments in active markets; quoted prices
for identical or similar instruments in markets that are not active; and
model-derived valuations whose inputs are observable or whose significant
value drivers are observable.
|
·
|
Level
3 – Instruments whose significant value drivers are
unobservable.
|
(dollar
amounts in thousands)
|
Level
1
|
Level
2
|
Level
3
|
||||
Derivative
assets
|
$
|
-
|
$
|
381,356
|
$
|
-
|
|
Derivative
liabilities
|
-
|
493,002
|
-
|
(dollar
amounts in thousands)
|
Level
3
Fair
Value
|
Total
losses for the
year
ended
May
31, 2009
|
||||
Foreclosed
assets, net
|
$
|
48,721
|
$
|
(8,014
|
)
|
|
Non-performing
loans, net of specific reserves
|
173,880
|
(129,480
|
)
|
2009
|
2008
|
|||||||||||||||||
(dollar
amounts in thousands)
|
Carrying
Value
|
Fair
Value
|
Carrying
Value
|
Fair
Value
|
||||||||||||||
Assets:
|
||||||||||||||||||
Cash
and cash equivalents
|
$
|
504,999
|
$
|
504,999
|
$
|
177,809
|
$
|
177,809
|
||||||||||
Restricted
cash
|
8,207
|
8,207
|
14,460
|
14,460
|
||||||||||||||
Investments
in preferred stock
|
47,000
|
47,000
|
-
|
-
|
||||||||||||||
Loans
to members, net
|
19,569,349
|
18,766,573
|
18,514,134
|
17,659,808
|
||||||||||||||
Debt
service reserve funds
|
46,662
|
46,662
|
54,993
|
54,993
|
||||||||||||||
Interest
rate exchange agreements
|
381,356
|
381,356
|
220,514
|
220,514
|
||||||||||||||
Liabilities:
|
||||||||||||||||||
Short-term
debt
|
4,867,864
|
4,885,919
|
6,327,453
|
6,334,426
|
||||||||||||||
Long-term
debt
|
12,720,055
|
13,160,498
|
10,173,587
|
10,548,133
|
||||||||||||||
Guarantee
liability (1)
|
29,672
|
33,181
|
15,034
|
15,034
|
||||||||||||||
Interest
rate exchange agreements
|
493,002
|
493,002
|
171,390
|
171,390
|
||||||||||||||
Subordinated
deferrable debt
|
311,440
|
274,759
|
311,440
|
291,551
|
||||||||||||||
Members
subordinate certificates
|
1,740,0544
|
1,740,054
|
1,406,779
|
1,406,779
|
||||||||||||||
Off-balance
sheet instruments:
|
||||||||||||||||||
Commitments
|
-
|
-
|
-
|
-
|
(dollar
amounts in thousands)
|
2009
|
2008
|
|||||
Non-performing
loans
|
$
|
523,758
|
$
|
506,864
|
|||
Restructured
loans
|
537,587
|
577,111
|
|||||
Total
|
$
|
1,061,345
|
$
|
1,083,975
|
Reduction
to interest income
|
||||||||||
(dollar
amounts in thousands)
|
2009
|
2008
|
2007
|
|||||||
Non-performing
loans
|
$
|
29,817
|
$
|
33,492
|
$
|
41,448
|
||||
Restructured
loans
|
26,421
|
33,400
|
39,177
|
|||||||
Total
|
$
|
56,238
|
$
|
66,892
|
$
|
80,625
|
For
the year ended May 31, 2009
|
||||||||||||||||
(dollar
amounts in thousands)
|
National
Rural
|
RTFC
|
NCSC
|
Consolidated
|
||||||||||||
Statement
of Operations:
|
||||||||||||||||
Interest
income
|
$
|
965,609
|
$
|
76,138
|
$
|
29,017
|
$
|
1,070,764
|
||||||||
Interest
expense
|
(841,729
|
)
|
(71,514
|
)
|
(21,778
|
)
|
(935,021
|
)
|
||||||||
Net
interest income
|
123,880
|
4,624
|
7,239
|
135,743
|
||||||||||||
(Provision
of) recovery of loan losses
|
(113,764
|
)
|
-
|
65
|
(113,699
|
)
|
||||||||||
Net
interest income after recovery of loan losses
|
10,116
|
4,624
|
7,304
|
22,044
|
||||||||||||
Non-interest
income:
|
||||||||||||||||
Fee
and other income
|
11,662
|
209
|
1,292
|
13,163
|
||||||||||||
Derivative
cash settlements
|
118,566
|
-
|
(5,577
|
)
|
112,989
|
|||||||||||
Results
of operations of foreclosed assets
|
3,774
|
-
|
-
|
3,774
|
||||||||||||
Total
non-interest income
|
134,002
|
209
|
(4,285
|
)
|
129,926
|
|||||||||||
Non-interest
expense:
|
||||||||||||||||
General
and administrative expenses
|
(50,267
|
)
|
(5,923
|
)
|
(4,652
|
)
|
(60,842
|
)
|
||||||||
Recovery
of guarantee liability
|
(1,615
|
)
|
-
|
-
|
(1,615
|
)
|
||||||||||
Market
adjustment on foreclosed assets
|
(8,014
|
)
|
-
|
-
|
(8,014
|
)
|
||||||||||
Derivative
forward value
|
(147,549
|
)
|
-
|
(12,468
|
)
|
(160,017
|
)
|
|||||||||
Other
|
(221
|
)
|
-
|
(132
|
)
|
(353
|
)
|
|||||||||
Total
non-interest expense
|
(207,666
|
)
|
(5,923
|
)
|
(17,252
|
)
|
(230,841
|
)
|
||||||||
Loss
prior to income taxes and minority
interest
|
(63,548
|
)
|
(1,090
|
)
|
(14,233
|
)
|
(78,871
|
)
|
||||||||
Income
tax (expense) benefit
|
(185
|
)
|
(39
|
)
|
5,325
|
5,101
|
||||||||||
Loss
per segment reporting
|
$
|
(63,733
|
)
|
$
|
(1,129
|
)
|
$
|
(8,908
|
)
|
$
|
(73,770
|
)
|
||||
Reconciliation
of net income:
|
||||||||||||||||
Net
loss per segment reporting
|
$
|
(73,770
|
)
|
|||||||||||||
Minority
interest, net of income taxes
|
3,900
|
|||||||||||||||
Net
loss per consolidated statement of operations
|
$
|
(69,870
|
)
|
|||||||||||||
Assets:
|
||||||||||||||||
Total
loans
|
$
|
18,091,333
|
$
|
1,680,154
|
$
|
416,720
|
$
|
20,188,207
|
||||||||
Deferred
origination fees
|
4,102
|
-
|
-
|
4,102
|
||||||||||||
Less: Allowance
for loan losses
|
(622,851
|
)
|
-
|
(109
|
)
|
(622,960
|
)
|
|||||||||
Loans
to members, net
|
17,472,584
|
1,680,154
|
416,611
|
19,569,349
|
||||||||||||
Other
assets
|
1,221,881
|
172,410
|
19,065
|
1,413,356
|
||||||||||||
Total
assets
|
$
|
18,694,465
|
$
|
1,852,564
|
$
|
435,676
|
$
|
20,982,705
|
For
the year ended May 31, 2008
|
||||||||||||||||
(dollar
amounts in thousands)
|
National
Rural
|
RTFC
|
NCSC
|
Consolidated
|
||||||||||||
Statement
of Operations:
|
||||||||||||||||
Interest
income
|
$
|
929,379
|
$
|
88,865
|
$
|
33,149
|
$
|
1,051,393
|
||||||||
Interest
expense
|
(820,572
|
)
|
(83,767
|
)
|
(26,929
|
)
|
(931,268
|
)
|
||||||||
Net
interest income
|
108,807
|
5,098
|
6,220
|
120,125
|
||||||||||||
Recovery
of loan losses
|
30,097
|
-
|
165
|
30,262
|
||||||||||||
Net
interest income after recovery of loan losses
|
138,904
|
5,098
|
6,385
|
150,387
|
||||||||||||
Non-interest
income:
|
||||||||||||||||
Fee
and other income
|
18,005
|
207
|
1,396
|
19,608
|
||||||||||||
Derivative
cash settlements
|
28,416
|
-
|
(1,383
|
)
|
27,033
|
|||||||||||
Results
of operations of foreclosed assets
|
7,528
|
-
|
-
|
7,528
|
||||||||||||
Total
non-interest income
|
53,949
|
207
|
13
|
54,169
|
||||||||||||
Non-interest
expense:
|
||||||||||||||||
General
and administrative expenses
|
(50,976
|
)
|
(5,366
|
)
|
(4,127
|
)
|
(60,469
|
)
|
||||||||
Recovery
of guarantee liability
|
3,104
|
-
|
-
|
3,104
|
||||||||||||
Market
adjustment on foreclosed assets
|
(5,840
|
)
|
-
|
-
|
(5,840
|
)
|
||||||||||
Derivative
forward value
|
(87,496
|
)
|
-
|
(11,247
|
)
|
(98,743
|
)
|
|||||||||
Foreign
currency adjustments
|
-
|
-
|
-
|
-
|
||||||||||||
Loss
on sale of loans
|
(676
|
)
|
-
|
-
|
(676
|
)
|
||||||||||
Loss
on early extinguishment of debt
|
(5,509
|
)
|
-
|
-
|
(5,509
|
)
|
||||||||||
Other
|
285
|
-
|
(397
|
)
|
(112
|
)
|
||||||||||
Total
non-interest expense
|
(147,108
|
)
|
(5,366
|
)
|
(15,771
|
)
|
(168,245
|
)
|
||||||||
Income
(loss) prior to income taxes and minority
interest
|
45,745
|
(61
|
)
|
(9,373
|
)
|
36,311
|
||||||||||
Income
tax (expense) benefit
|
-
|
(231
|
)
|
3,566
|
3,335
|
|||||||||||
Income
(loss) per segment reporting
|
$
|
45,745
|
$
|
(292
|
)
|
$
|
(5,807
|
)
|
$
|
39,646
|
||||||
Reconciliation
of net income:
|
||||||||||||||||
Net
income per segment reporting
|
$
|
39,646
|
||||||||||||||
Minority
interest, net of income taxes
|
6,099
|
|||||||||||||||
Net
income per consolidated statement of operations
|
$
|
45,745
|
||||||||||||||
Assets:
|
||||||||||||||||
Total
loans outstanding
|
$
|
16,886,407
|
$
|
1,726,514
|
$
|
414,074
|
$
|
19,026,995
|
||||||||
Deferred
origination fees
|
2,045
|
-
|
-
|
2,045
|
||||||||||||
Less: Allowance
for loan losses
|
(514,626
|
)
|
-
|
(280
|
)
|
(514,906
|
)
|
|||||||||
Loans
to members, net
|
16,373,826
|
1,726,514
|
413,794
|
18,514,134
|
||||||||||||
Other
assets
|
639,115
|
182,388
|
43,744
|
865,247
|
||||||||||||
Total
assets
|
$
|
17,012,941
|
$
|
1,908,902
|
$
|
457,538
|
$
|
19,379,381
|
For
the year ended May 31, 2007
|
||||||||||||||||
(dollar
amounts in thousands)
|
National
Rural
|
RTFC
|
NCSC
|
Consolidated
|
||||||||||||
Statement
of Operations:
|
||||||||||||||||
Interest
income
|
$
|
903,783
|
$
|
105,427
|
$
|
30,440
|
$
|
1,039,650
|
||||||||
Interest
expense
|
(865,664
|
)
|
(99,224
|
)
|
(26,866
|
)
|
(991,754
|
)
|
||||||||
Net
interest income
|
38,119
|
6,203
|
3,574
|
47,896
|
||||||||||||
Recovery
of loan losses
|
5,499
|
-
|
1,423
|
6,922
|
||||||||||||
Net
interest income after recovery of loan losses
|
43,618
|
6,203
|
4,997
|
54,818
|
||||||||||||
Non-interest
income:
|
||||||||||||||||
Fee
and other income
|
14,017
|
187
|
1,902
|
16,106
|
||||||||||||
Derivative
cash settlements
|
86,040
|
-
|
402
|
86,442
|
||||||||||||
Results
of operations of foreclosed assets
|
9,758
|
-
|
-
|
9,758
|
||||||||||||
Total
non-interest income
|
109,815
|
187
|
2,304
|
112,306
|
||||||||||||
Non-interest
expense:
|
||||||||||||||||
General
and administrative expenses
|
(43,029
|
)
|
(5,373
|
)
|
(3,487
|
)
|
(51,889
|
)
|
||||||||
Recovery
of guarantee liability
|
1,700
|
-
|
-
|
1,700
|
||||||||||||
Derivative
forward value
|
(79,744
|
)
|
-
|
463
|
(79,281
|
)
|
||||||||||
Foreign
currency adjustments
|
(14,554
|
)
|
-
|
-
|
(14,554
|
)
|
||||||||||
Loss
on sale of loans
|
(1,584
|
)
|
-
|
-
|
(1,584
|
)
|
||||||||||
Loss
on early extinguishment of debt
|
(4,806
|
)
|
-
|
-
|
(4,806
|
)
|
||||||||||
Other
|
285
|
(454
|
)
|
(169
|
)
|
|||||||||||
Total
non-interest expense
|
(141,732
|
)
|
(5,373
|
)
|
(3,478
|
)
|
(150,583
|
)
|
||||||||
Income
prior to income taxes and minority
interest
|
11,701
|
1,017
|
3,823
|
16,541
|
||||||||||||
Income
tax expense
|
-
|
(945
|
)
|
(1,451
|
)
|
(2,396
|
)
|
|||||||||
Income
per segment reporting
|
$
|
11,701
|
$
|
72
|
$
|
2,372
|
$
|
14,145
|
||||||||
Reconciliation
of net income:
|
||||||||||||||||
Net
income per segment reporting
|
$
|
14,145
|
||||||||||||||
Minority
interest, net of income taxes
|
(2,444
|
)
|
||||||||||||||
Net
income per consolidated statement of operations
|
$
|
11,701
|
||||||||||||||
Assets:
|
||||||||||||||||
Total
loans
|
$
|
15,805,290
|
$
|
1,860,379
|
$
|
462,538
|
$
|
18,128,207
|
||||||||
Deferred
origination fees
|
3,666
|
-
|
-
|
3,666
|
||||||||||||
Less: Allowance
for loan losses
|
(561,113
|
)
|
-
|
(550
|
)
|
(561,663
|
)
|
|||||||||
Loans
to members, net
|
15,247,843
|
1,860,379
|
461,988
|
17,570,210
|
||||||||||||
Other
assets
|
764,528
|
189,716
|
50,727
|
1,004,971
|
||||||||||||
Total
assets
|
$
|
16,012,371
|
$
|
2,050,095
|
$
|
512,715
|
$
|
18,575,181
|
Fiscal
Year 2009
|
|||||||||||||||
Quarters
Ended
|
|||||||||||||||
(dollar
amounts in thousands)
|
August
31,
|
November
30,
|
February 28,
|
May
31,
|
Total
Year
|
||||||||||
Interest
income
|
$
|
263,117
|
$
|
266,746
|
$
|
268,453
|
$
|
272,448
|
$
|
1,070,764
|
|||||
Interest
expense
|
(220,149
|
)
|
(234,187
|
)
|
(239,744
|
)
|
(240,941
|
)
|
(935,021
|
)
|
|||||
Net
interest income
|
42,968
|
32,559
|
28,709
|
31,507
|
135,743
|
||||||||||
(Provision
for) recovery of loan losses
|
(10,681
|
)
|
(126,311
|
)
|
10,415
|
12,878
|
(113,699
|
)
|
|||||||
Net
interest income after (provision for) recovery of loan losses (1)
|
32,287
|
(93,752
|
)
|
39,124
|
44,385
|
22,044
|
|||||||||
Non-interest
income:
|
|||||||||||||||
Derivative
cash settlements (2)
|
431
|
12,503
|
104,012
|
(3,957
|
)
|
112,989
|
|||||||||
Other
non-interest income
|
4,828
|
3,948
|
4,001
|
4,160
|
16,937
|
||||||||||
Total
non-interest income
|
5,259
|
16,451
|
108,013
|
203
|
129,926
|
||||||||||
Non-interest
expense:
|
|||||||||||||||
Derivative
forward value
|
(11,028
|
)
|
(139,383
|
)
|
(53,046
|
)
|
43,440
|
(160,017
|
)
|
||||||
Other
non-interest expense
|
(14,048
|
)
|
(21,071
|
)
|
(18,828
|
)
|
(16,877
|
)
|
(70,824
|
)
|
|||||
Total
non-interest expense
|
(25,076
|
)
|
(160,454
|
)
|
(71,874
|
)
|
26,563
|
(230,841
|
)
|
||||||
Income
(loss) prior to income taxes and minority interest
|
12,470
|
(237,755
|
)
|
75,263
|
71,151
|
(78,871
|
)
|
||||||||
Income
tax benefit (expense)
|
760
|
6,400
|
(183
|
)
|
(1,876
|
)
|
5,101
|
||||||||
Minority
interest, net of income taxes
|
1,241
|
1,738
|
159
|
762
|
3,900
|
||||||||||
Net
income (loss)
|
$
|
14,471
|
$
|
(229,617
|
)
|
$
|
75,239
|
$
|
70,037
|
$
|
(69,870
|
)
|
|||
Fiscal
Year 2008
|
|||||||||||||||
Quarters
Ended
|
|||||||||||||||
(dollar
amounts in thousands)
|
August
31,
|
November
30,
|
February 28,
|
May
31,
|
Total
Year
|
||||||||||
Interest
income
|
$
|
264,192
|
$
|
261,177
|
$
|
264,594
|
$
|
261,430
|
$
|
1,051,393
|
|||||
Interest
expense
|
(241,688
|
)
|
(239,900
|
)
|
(233,347
|
)
|
(216,333
|
)
|
(931,268
|
)
|
|||||
Net
interest income
|
22,504
|
21,277
|
31,247
|
45,097
|
120,125
|
||||||||||
Recovery
of (provision for) loan losses
|
-
|
14,301
|
33,599
|
(17,638
|
)
|
30,262
|
|||||||||
Net
interest income after recovery of (provision for) loan
losses
|
22,504
|
35,578
|
64,846
|
27,459
|
150,387
|
||||||||||
Non-interest
income:
|
|||||||||||||||
Derivative
cash settlements
|
8,329
|
11,507
|
10,463
|
(3,266
|
)
|
27,033
|
|||||||||
Other
non-interest income
|
6,073
|
4,318
|
4,750
|
11,995
|
27,136
|
||||||||||
Total
non-interest income
|
14,402
|
15,825
|
15,213
|
8,729
|
54,169
|
||||||||||
Non-interest
expense:
|
|||||||||||||||
Derivative
forward value
|
(33,600
|
)
|
(75,412
|
)
|
(64,266
|
)
|
74,535
|
(98,743
|
)
|
||||||
Other
non-interest expense
|
(17,365
|
)
|
(13,674
|
)
|
(20,379
|
)
|
(18,084
|
)
|
(69,502
|
)
|
|||||
Total
non-interest expense
|
(50,965
|
)
|
(89,086
|
)
|
(84,645
|
)
|
56,451
|
(168,245
|
)
|
||||||
(Loss)
income prior to income taxes and minority interest
|
(14,059
|
)
|
(37,683
|
)
|
(4,586
|
)
|
92,639
|
36,311
|
|||||||
Income
tax benefit (expense)
|
1,099
|
2,912
|
2,175
|
(2,851
|
)
|
3,335
|
|||||||||
Minority
interest, net of income taxes
|
1,578
|
4,545
|
2,088
|
(2,112
|
)
|
6,099
|
|||||||||
Net
(loss) income
|
$
|
(11,382
|
)
|
$
|
(30,226
|
)
|
$
|
(323
|
)
|
$
|
87,676
|
$
|
45,745
|
||