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Preliminary Data Out from 2009 Key Ratio Trend Analysis

FOR IMMEDIATE RELEASE


For Release: April 19, 2010

Contact: Mike O’Brien, Andrew Don

HERNDON, VA—National Rural Utilities Cooperative Finance Corporation (CFC) (NYSE: NRU) (NYSE: NRN) (NYSE: NRC) announced today preliminary findings from its annual Key Ratio Trend Analysis (KRTA), based on the 2009 operational results of 630 electric distribution cooperatives compared to a sample of the same cooperatives last year. The final KRTA report, which is expected to include results from approximately 820 distribution cooperatives, will be available in August.
“Although 2009 was a tough year for the U.S. economy, the preliminary KRTA numbers show that co-ops once again performed very well. The median financial ratios all showed an improvement over the prior year,” said Claudia Phillips, CFC vice president of Programs and Planning Analysis and KRTA manager. “While these are not final KRTA results, this preliminary report of 630 systems is a significant sample.”
The KRTA report is based on data taken from Form 7 reports—financial and statistical reports that distribution cooperatives provide annually—for the period ending December 31, 2009.
Phillips pointed to three ratios that show electric cooperatives are maintaining their financial strength during the economic downturn: Equity as a Percentage of Assets, Times Interest Earned Ratio (TIER) and Modified Debt Service Coverage (MDSC). For the median distribution cooperative among the 630 reporting, these three financial ratios were:

Equity as a Percentage of Assets, which increased to 41.0 percent in 2009 from 40.5 in 2008.

  • TIER, which rose to 2.29 in 2009 from 2.25 in 2008.
  • MDSC, which increased slightly in 2009 to 1.82 from 1.81 the previous year.

The preliminary KRTA data show there were increases in operating costs in 2009, but revenue and margins also increased, which indicates cooperatives are successfully passing through cost increases to consumers.

  • Power Cost per kwh Sold (mills) increased to 64.34 in 2009 from 63.05 in 2008, a 2-percent increase.
  • Total Operating Expense per kwh Sold (mills)—increased to 20.16 mills from 19.43 mills in 2008, a 3.75-percent increase.
  • Total Operating Revenue per kwh Sold (mills), increased 4 percent in 2009, compared to a 6.5-percent increase in 2008. The median number for 2009 was 100.35 mills compared to 96.58 mills in 2008.
  • Total Margins per kwh Sold (mills) were up a strong 11 percent in the preliminary numbers to 6.58 mills in 2009 from 5.92 mills the year before.
    Considering current economic conditions it was not surprising that the median electric cooperative in the preliminary KRTA numbers reported two declines in 2009:
  • The median number of consumers served by electric cooperatives increased by only 0.46 percent, down from 0.99 percent in 2008—and compared to a historic median consumer growth of about 1.5 percent.
  • Total kilowatt-hours sold decreased by 1.21 percent compared to a 1.20-percent increase in 2008. This is far less than the 4-percent decline in retail sales of electricity to all types of customers in the entire electric utility industry sector in 2009 (as cited by the U.S. Energy Information Administration).

The preliminary KRTA numbers for two ratios related to consumer payments were stable. This shows that electric cooperative consumers are paying their bills on time, even during difficult economic conditions.

  • Accounts Receivable Over 60 Days as a Percentage of Operating Revenue was just 0.17 percent—unchanged from 2008.
  • Amount Written Off as a Percentage of Operating Revenue increased only slightly to 0.20 percent in 2009 from 0.18 percent in 2008.
    Loans to distribution cooperatives comprise 69 percent of CFC’s loan portfolio.

About CFC

National Rural Utilities Cooperative Finance Corporation (CFC) is a cooperative that serves the nation's rural utility systems. With more than $20 billion in assets, CFC provides its member-owners with an assured source of market-priced capital and financial products and services.

CFC’s 2008 and 2009 Preliminary KRTA Data
All numbers are medians

Equity as % of Assets
2008: 40.5%
2009: 41.0%

TIER
2008: 2.25
2009: 2.29

MDSC
2008: 1.81
2009: 1.82

Power Cost per Total kwh Sold (mills)
2008: 63.05
2009: 64.34

Total Operating Expense per kwh Sold (mills)
2008: 19.43
2009: 20.16

Total Operating Revenue per kwh Sold (mills)
2008: 96.58
2009: 100.35

Total Margins per kwh Sold (mills)
2008: 5.92
2009: 6.58

Annual Growth in Number of Consumers (%)
2008: 0.99%
2009: 0.46%

Annual Growth in kwh Sold (%)
2008: 1.20%
2009: -1.21%

Accounts Receivable Over 60 Days as % of Operating Revenue
2008: 0.17%
2009: 0.17%

Amount Written Off as % of Operating Revenue
2008: 0.18%
2009: 0.20%

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Press Contact

All media inquiries are directed to:

Mike O'Brien
Vice President, Corporate Communications
703-467-1800 or 800-424-2954
PublicRelations@nrucfc.coop

Investor Relations Contact

Andrew Don
Senior Vice President and Treasurer
703-467-1800 or 800-424-2954
InvestorRelations@nrucfc.coop