CFC’s Initial 2020 Key Ratio Trend Analysis Results Demonstrate Cooperatives’ Financial Strength
July 19 2021 - 12:54PM
The National Rural Utilities Cooperative Finance Corporation (CFC)
has analyzed preliminary data for its 2020 Key Ratio Trend Analysis
(KRTA) report, an annual assessment of financial trends among
electric distribution cooperatives nationwide. The results show the
majority of electric cooperatives have maintained strong financial
metrics and have successfully managed through last year’s economic
downturn.
“Rural electric distribution cooperatives’ disciplined
management and their ability to navigate the challenges created by
the pandemic is a testament to the community-based electric
cooperative business model,” CFC Senior Vice President and Chief
Corporate Affairs Officer Brad Captain said. “Members ended 2020
with solid financials, consumer growth and stable operations
positioning them to continue to help improve the quality of life in
rural America well into the future.”
Financial performance was strong year-over-year as demonstrated
by coverage ratios, which assess ability to repay debt, and equity
levels. Both times interest earned ratio (TIER) and modified debt
service coverage (MDSC) ratios experienced slight increases. TIER
rose from 2.64 to 2.80 and MDSC rose from 1.91 to 1.96. Equity as a
percentage of assets also trended higher to 45.80 percent, compared
with 45.61 percent in 2019.
Consumer growth was positive in 2020 with nearly 90 percent of
cooperatives showing increases, including notable pockets of high
consumer growth in Texas, Tennessee, Georgia and Florida.
Despite the economic challenges and less than 2 percent declines
in both kilowatt-hour sales and revenue, cooperative leaders held
accounts receivable over 60 days and write-offs steady from 2019 as
well as continued to benefit from the low-interest rate environment
with average interest rates on outstanding debt down to 3.69
percent in 2020 from 3.98 percent in both 2018 and 2019.
Preliminary KRTA results are based on data submitted by 812
electric distribution cooperatives for the year ending Dec. 31,
2020. CFC calculates 145 financial and operational ratios for each
cooperative and provides a report showing the cooperative’s ratio
compared with the U.S. median value. Median reporting minimizes the
effect of outliers and provides a clearer picture of cooperative
performance.
About CFCCreated and owned by America’s
electric cooperative network, the National Rural Utilities
Cooperative Finance Corporation (CFC)—a nonprofit finance
cooperative with more than $29 billion in assets—provides
unparalleled industry expertise, flexibility and responsiveness to
serve the needs of our member-owners. CFC is an equal opportunity
provider. Visit us online
at www.nrucfc.coop.
About KRTACFC has published KRTA—an annual
report that tracks the median value of 145 financial and
operational ratios for participating electric distribution
cooperatives over the previous five years—since 1975. Based on
unaudited data reported by electric distribution cooperatives, KRTA
provides electric cooperative CEOs and directors/trustees with a
complete picture of their system’s financial performance.
Contact: |
Brad Captain |
|
Corporate Relations |
|
publicrelations@nrucfc.coop |
|
800-424-2954 |
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