CFC’s Initial 2021 Key Ratio Trend Analysis Results Demonstrate Cooperatives’ Financial Strength
June 17 2022 - 5:07PM
The National Rural Utilities Cooperative Finance Corporation (CFC)
has analyzed preliminary data for its 2021 Key Ratio Trend Analysis
(KRTA) report, an annual assessment of financial trends among
electric distribution cooperatives nationwide. The results show
electric cooperatives have maintained strong financial metrics and
are experiencing growth across a number of measures, including
consumers, sales, margins and utility plant.
“Rural electric distribution cooperatives’ disciplined
management and their focus on improving the quality of life in the
communities they serve is a testament to the cooperative business
model,” CFC Senior Vice President and Chief Corporate Affairs
Officer Brad Captain said.
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 equity as a
percentage of assets continued to trend upward. TIER rose from 2.80
to 2.95 while equity as a percentage of assets also trended higher
to 45.97 percent, compared with 45.80 percent in 2020.
Consumer growth exceeded 1 percent, the highest in more than a
decade, with nearly 93 percent of cooperatives showing increases,
including notable pockets of greater than 2 percent consumer growth
in Arizona, California, Idaho, Nevada and Utah.
Investment in utility plant also sustained its four-year growth
trend, as demonstrated by an increase in the total utility plant
ratio, which rose 3.95 percent in 2021 compared with 3.79 percent
in 2020. “Electric cooperatives continue to invest in plant and
utility infrastructure, including renewables and fiber, to ensure
they provide their consumers with reliable, affordable and
sustainable electricity into the future,” CFC Senior Vice President
of Strategic Services Mark Snowden said.
In another positive sign, after a slight increase in 2020, both
accounts receivable over 60 days and write-offs declined to
pre-pandemic levels. Accounts receivable fell to 0.09 percent of
operating revenue from 0.13 percent in 2020, and write-offs fell to
0.07 percent of revenue from 0.08 percent in 2020.
Preliminary KRTA results are based on data submitted by 812
electric distribution cooperatives for the year ending Dec. 31,
2021. 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 $30 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
CaptainCorporate Relations
Grouppublicrelations@nrucfc.coop800-424-2954
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