CFC Releases Updated Equity Management Publication

CFC’s newly revised publication, “Considering Equity Management: A Distribution Cooperative’s Guide to Equity Management Planning,” is now available to download on the CFC Member Website and will soon be available for members to order print copies. 

The 42-page publication provides a wealth of information to assist electric cooperative leaders and directors with a deeper understanding of equity and how to manage it through a strategic lens. More specifically, the publication explores the factors that increase and decrease equity, capital credit retirement strategies and different scenarios that electric cooperatives may face in managing equity.

“By learning more about equity management, electric cooperatives can be better positioned to achieve their financial goals,” CFC Senior Vice President and Chief Banking Officer Joel Allen said. “The content in this publication has been newly revised and restructured to better address current equity management challenges.”

The first edition of “Considering Equity Management” was published in 2012. Some of the fresh content featured in the 2024 edition includes: 

• A new section focusing on strategic planning and the equity management plan, and how strategies and actions outlined in these plans can help cooperatives meet their goals.
• Enhanced use of KRTA throughout the publication, including combined KRTA ratios to explore the connection between effective equity management and strong financial performance.
• A new “Cooperative Strategies vs. Personal Finance” section that looks at how cooperative directors must take into account factors in their fiduciary decision-making that are different from personal financial decision-making. 
• Six new case studies that highlight equity-related challenges that are relevant to electric cooperatives in today’s increasingly complex operating environment.  
• An updated Appendix that includes a revised step-by-step guide to developing an equity management plan; revised information on the Modified Goodwin Formula and Boatman Theorem; a new FAQ section; and an expanded and revised Glossary.

Members will be able to request print copies of the new publication in January 2025.