Update: Electric Distribution Cooperatives Report Strong Financial Results During Economic Downturn
August 03 2009 - 10:10AM
Marketwired
National Rural Utilities Cooperative Finance Corporation (National
Rural) (NYSE: NRU) (NYSE: NRN) (NYSE: NRC) announced today final
results from its annual Key Ratio Trend Analysis (KRTA), an annual
assessment of financial trends among electric distribution
cooperatives nationwide. This year's KRTA shows that distribution
cooperatives maintained their overall financial strength during
challenging economic times.
"The nation's electric distribution cooperatives again reported
strong financial results. They did a good job of piloting their
systems through difficult economic waters in 2008. Revenue kept
pace with higher costs and margins remained strong, keeping
financial ratios stable," said National Rural Governor and CEO
Sheldon C. Petersen.
The KRTA report is based on data submitted by 819 distribution
cooperatives for the year ending Dec. 31, 2008. Petersen identified
three major findings in the data:
-- Revenues kept pace with rising fuel costs in 2008. Total operating
revenue per kilowatt hour (kwh) sold shows a nearly 6.5-percent increase
compared with 2007, an indication that distribution cooperatives are taking
the necessary steps -- using fuel adjustments or increasing rates -- to
meet expenses.
During 2008, distribution cooperative wholesale power and other costs
increased, with power costs per kwh sold increasing 7.2 percent over
the prior year while total operating expenses per kwh sold went up 2.9
percent. "Overall, revenue increases were sufficient to overcome rising
costs," Petersen said.
-- Primary financial ratios -- such as equity as a percent of assets,
times interest earned ratio (TIER), modified debt service coverage (MDSC) -
and aggregate cash and cash equivalent numbers remained stable. The equity
as a percent of assets median ratio for 2008 remained healthy at 40.62
percent.
TIER was up slightly at 2.27; this is well above the 1.25 TIER required
by systems that borrow from the USDA Rural Utilities Service. MDSC,
National Rural's primary coverage ratio, was 1.82, well above the 1.35
level required by National Rural.
In addition, the aggregate cash and cash equivalents for distribution
cooperatives totaled a strong $2.8 billion at Dec. 31, 2008. "The
primary financial ratios and total cash levels remained healthy and
stable," Petersen said.
-- Median growth -- in terms of both consumers and kwh sales -- remained
positive in 2008, and consumers were paying their bills on time. The
consumer growth rate -- the number of new consumers -- was nearly 1 percent
for distribution cooperatives. As a result, the consumer growth rate for
distribution cooperatives remained nearly double that of municipal and
investor-owned utilities, according to information from the U.S. Energy
Information Administration. While electricity demand fluctuates in the
short term in response to business cycles, weather events and prices, the
median growth rate for kwh sales also remained positive in 2008 at 1.22
percent.
Although the United States was in recession in 2008, distribution
cooperative consumers continued to pay their bills. According to data
from the KRTA information, the number of accounts receivable written
off as a percentage of operating revenue was only 0.18 percent --
unchanged from the previous year. Moreover, the number of accounts
receivable past due more than 60 days as percentage of operating
revenue actually declined slightly from the prior year to 0.17 percent.
Other key findings in the 2008 financial highlights of electric
distribution cooperatives include the following KRTA composite
numbers:
-- The aggregate total megawatt hour (mwh) sales of all 819 rural
electric distribution systems grew 1.91 percent in 2008 to reach
396,832,711 mwh.
-- In 2008, total mwh sales by class of service showed residential
consumers at 56 percent, commercial accounts at 19 percent, industrial
accounts at 20 percent, irrigation at about 2 percent and other at about 2
percent.
-- Distribution cooperatives added a total of 267,042 new residential
households in 2008.
-- Distribution cooperatives' gross utility plant investment totaled more
than $78 billion in 2008.
The following median numbers also are included in the 2008 KRTA
data:
-- Total operating revenue per kwh sold in 2008 increased to 97.15 mills.
(One mill equals one-tenth of one cent.)
-- Total operating expenses per kwh sold in 2008 rose slightly to 19.60
mills.
-- Total margins per kwh sold in 2008 rose slightly to 6.13 mills.
National Rural is a cooperative that serves the nation's rural
utility systems, the majority of which are electric cooperatives.
With approximately $20 billion in assets, National Rural provides
its member-owners with an assured source of market-priced capital
and financial products and services.
Contact: Mike O'Brien Vice President Corporate Communications
703-709-6709 Email Contact Andrew Don Vice President Capital Market
Relations 703-709-6869 Email Contact
Natl Rural Util 6.75 (NYSE:NRN)
Historical Stock Chart
From Apr 2024 to May 2024
Natl Rural Util 6.75 (NYSE:NRN)
Historical Stock Chart
From May 2023 to May 2024