10-Q 1 nruc-20240229.htm NRU FY2024 Q3 FORM 10-Q nruc-20240229
00000705025/312024Q3false00000705022023-06-012024-02-290000070502nruc:A735CollateralTrustBondsDue2026Member2023-06-012024-02-290000070502nruc:A550SubordinatedNotesDue2064Member2023-06-012024-02-2900000705022024-02-29xbrli:shares00000705022023-12-012024-02-29iso4217:USD00000705022022-12-012023-02-2800000705022022-06-012023-02-2800000705022023-05-310000070502nruc:RetainedEarningsAppropriatedMembershipFeesAndEducationFundMember2023-11-300000070502nruc:RetainedEarningsAppropriatedPatronageCapitalAllocatedMember2023-11-300000070502nruc:RetainedEarningsAppropriatedCapitalReserveMember2023-11-300000070502us-gaap:RetainedEarningsUnappropriatedMember2023-11-300000070502us-gaap:RetainedEarningsMember2023-11-300000070502us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-11-300000070502us-gaap:ParentMember2023-11-300000070502us-gaap:NoncontrollingInterestMember2023-11-3000000705022023-11-300000070502us-gaap:RetainedEarningsUnappropriatedMember2023-12-012024-02-290000070502us-gaap:RetainedEarningsMember2023-12-012024-02-290000070502us-gaap:ParentMember2023-12-012024-02-290000070502us-gaap:NoncontrollingInterestMember2023-12-012024-02-290000070502us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-012024-02-290000070502nruc:RetainedEarningsAppropriatedPatronageCapitalAllocatedMember2023-12-012024-02-290000070502nruc:RetainedEarningsAppropriatedCapitalReserveMember2023-12-012024-02-290000070502nruc:RetainedEarningsAppropriatedMembershipFeesAndEducationFundMember2023-12-012024-02-290000070502nruc:RetainedEarningsAppropriatedMembershipFeesAndEducationFundMember2024-02-290000070502nruc:RetainedEarningsAppropriatedPatronageCapitalAllocatedMember2024-02-290000070502nruc:RetainedEarningsAppropriatedCapitalReserveMember2024-02-290000070502us-gaap:RetainedEarningsUnappropriatedMember2024-02-290000070502us-gaap:RetainedEarningsMember2024-02-290000070502us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-02-290000070502us-gaap:ParentMember2024-02-290000070502us-gaap:NoncontrollingInterestMember2024-02-290000070502nruc:RetainedEarningsAppropriatedMembershipFeesAndEducationFundMember2023-05-310000070502nruc:RetainedEarningsAppropriatedPatronageCapitalAllocatedMember2023-05-310000070502nruc:RetainedEarningsAppropriatedCapitalReserveMember2023-05-310000070502us-gaap:RetainedEarningsUnappropriatedMember2023-05-310000070502us-gaap:RetainedEarningsMember2023-05-310000070502us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-05-310000070502us-gaap:ParentMember2023-05-310000070502us-gaap:NoncontrollingInterestMember2023-05-310000070502us-gaap:RetainedEarningsUnappropriatedMember2023-06-012024-02-290000070502us-gaap:RetainedEarningsMember2023-06-012024-02-290000070502us-gaap:ParentMember2023-06-012024-02-290000070502us-gaap:NoncontrollingInterestMember2023-06-012024-02-290000070502us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-012024-02-290000070502nruc:RetainedEarningsAppropriatedPatronageCapitalAllocatedMember2023-06-012024-02-290000070502nruc:RetainedEarningsAppropriatedCapitalReserveMember2023-06-012024-02-290000070502nruc:RetainedEarningsAppropriatedMembershipFeesAndEducationFundMember2023-06-012024-02-290000070502nruc:RetainedEarningsAppropriatedMembershipFeesAndEducationFundMember2022-11-300000070502nruc:RetainedEarningsAppropriatedPatronageCapitalAllocatedMember2022-11-300000070502nruc:RetainedEarningsAppropriatedCapitalReserveMember2022-11-300000070502us-gaap:RetainedEarningsUnappropriatedMember2022-11-300000070502us-gaap:RetainedEarningsMember2022-11-300000070502us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-11-300000070502us-gaap:ParentMember2022-11-300000070502us-gaap:NoncontrollingInterestMember2022-11-3000000705022022-11-300000070502us-gaap:RetainedEarningsUnappropriatedMember2022-12-012023-02-280000070502us-gaap:RetainedEarningsMember2022-12-012023-02-280000070502us-gaap:ParentMember2022-12-012023-02-280000070502us-gaap:NoncontrollingInterestMember2022-12-012023-02-280000070502us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-012023-02-280000070502nruc:RetainedEarningsAppropriatedMembershipFeesAndEducationFundMember2022-12-012023-02-280000070502nruc:RetainedEarningsAppropriatedMembershipFeesAndEducationFundMember2023-02-280000070502nruc:RetainedEarningsAppropriatedPatronageCapitalAllocatedMember2023-02-280000070502nruc:RetainedEarningsAppropriatedCapitalReserveMember2023-02-280000070502us-gaap:RetainedEarningsUnappropriatedMember2023-02-280000070502us-gaap:RetainedEarningsMember2023-02-280000070502us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-02-280000070502us-gaap:ParentMember2023-02-280000070502us-gaap:NoncontrollingInterestMember2023-02-2800000705022023-02-280000070502nruc:RetainedEarningsAppropriatedMembershipFeesAndEducationFundMember2022-05-310000070502nruc:RetainedEarningsAppropriatedPatronageCapitalAllocatedMember2022-05-310000070502nruc:RetainedEarningsAppropriatedCapitalReserveMember2022-05-310000070502us-gaap:RetainedEarningsUnappropriatedMember2022-05-310000070502us-gaap:RetainedEarningsMember2022-05-310000070502us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-05-310000070502us-gaap:ParentMember2022-05-310000070502us-gaap:NoncontrollingInterestMember2022-05-3100000705022022-05-310000070502us-gaap:RetainedEarningsUnappropriatedMember2022-06-012023-02-280000070502us-gaap:RetainedEarningsMember2022-06-012023-02-280000070502us-gaap:ParentMember2022-06-012023-02-280000070502us-gaap:NoncontrollingInterestMember2022-06-012023-02-280000070502us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-012023-02-280000070502nruc:RetainedEarningsAppropriatedPatronageCapitalAllocatedMember2022-06-012023-02-280000070502nruc:RetainedEarningsAppropriatedMembershipFeesAndEducationFundMember2022-06-012023-02-280000070502srt:ParentCompanyMembernruc:RetainedEarningsAppropriatedPatronageCapitalAllocatedMember2023-12-012024-02-290000070502us-gaap:RetainedEarningsMembersrt:ParentCompanyMember2023-12-012024-02-290000070502nruc:RetainedEarningsAppropriatedCapitalReserveMembersrt:ParentCompanyMember2023-12-012024-02-2900000705022023-12-012023-12-010000070502us-gaap:LoansReceivableMember2023-12-012024-02-290000070502us-gaap:LoansReceivableMember2022-12-012023-02-280000070502us-gaap:LoansReceivableMember2023-06-012024-02-290000070502us-gaap:LoansReceivableMember2022-06-012023-02-280000070502us-gaap:LongTermDebtMember2023-12-012024-02-290000070502us-gaap:LongTermDebtMember2022-12-012023-02-280000070502us-gaap:LongTermDebtMember2023-06-012024-02-290000070502us-gaap:LongTermDebtMember2022-06-012023-02-280000070502us-gaap:SubordinatedDebtMember2023-12-012024-02-290000070502us-gaap:SubordinatedDebtMember2022-12-012023-02-280000070502us-gaap:SubordinatedDebtMember2023-06-012024-02-290000070502us-gaap:SubordinatedDebtMember2022-06-012023-02-280000070502us-gaap:CorporateDebtSecuritiesMember2024-02-290000070502us-gaap:CorporateDebtSecuritiesMember2023-05-310000070502us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2024-02-290000070502us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2023-05-310000070502us-gaap:USStatesAndPoliticalSubdivisionsMember2024-02-290000070502us-gaap:USStatesAndPoliticalSubdivisionsMember2023-05-310000070502us-gaap:ForeignGovernmentDebtMember2024-02-290000070502us-gaap:ForeignGovernmentDebtMember2023-05-310000070502us-gaap:AssetBackedSecuritiesMember2024-02-290000070502us-gaap:AssetBackedSecuritiesMember2023-05-310000070502us-gaap:SeriesCPreferredStockMemberus-gaap:NoncumulativePreferredStockMember2024-02-290000070502us-gaap:SeriesCPreferredStockMemberus-gaap:NoncumulativePreferredStockMember2023-05-310000070502us-gaap:CommonStockMember2024-02-290000070502us-gaap:CommonStockMember2023-05-310000070502nruc:DistributionSystemsMembersrt:ParentCompanyMember2024-02-29xbrli:pure0000070502nruc:DistributionSystemsMembersrt:ParentCompanyMember2023-05-310000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMember2024-02-290000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMember2023-05-310000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMember2024-02-290000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMember2023-05-310000070502srt:ParentCompanyMember2024-02-290000070502srt:ParentCompanyMember2023-05-310000070502nruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502nruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502nruc:TelecommunicationsMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502nruc:TelecommunicationsMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502nruc:NationalCooperativeServicesCorporationMember2024-02-290000070502nruc:NationalCooperativeServicesCorporationMember2023-05-310000070502nruc:UnamortizedLoanCommitmentAndOriginationFeesMember2024-02-290000070502nruc:UnamortizedLoanCommitmentAndOriginationFeesMember2023-05-310000070502nruc:LongTermFixedRateLoansMember2024-02-290000070502nruc:LongTermFixedRateLoansMember2023-05-310000070502nruc:LongTermVariableRateLoansMember2024-02-290000070502nruc:LongTermVariableRateLoansMember2023-05-310000070502nruc:LongTermLoansMember2024-02-290000070502nruc:LongTermLoansMember2023-05-310000070502nruc:LineOfCreditLoansMember2024-02-290000070502nruc:LineOfCreditLoansMember2023-05-310000070502nruc:LoansReceivableCommercialAndIndustrialMemberus-gaap:CreditConcentrationRiskMembernruc:ElectricUtilityMemberus-gaap:AccountsReceivableMember2024-02-290000070502nruc:LoansReceivableCommercialAndIndustrialMemberus-gaap:CreditConcentrationRiskMembernruc:ElectricUtilityMemberus-gaap:AccountsReceivableMember2023-05-310000070502us-gaap:CreditConcentrationRiskMembernruc:ElectricUtilityMemberus-gaap:LoansAndFinanceReceivablesMemberus-gaap:AccountsReceivableMember2023-06-012024-02-290000070502us-gaap:CreditConcentrationRiskMembernruc:ElectricUtilityMemberus-gaap:LoansAndFinanceReceivablesMemberus-gaap:AccountsReceivableMember2022-06-012023-05-310000070502nruc:LoansGuaranteedByRuralUtilitiesServiceMember2024-02-290000070502nruc:LoansGuaranteedByRuralUtilitiesServiceMember2023-05-310000070502nruc:LoansReceivableCommercialAndIndustrialMemberus-gaap:CustomerConcentrationRiskMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2024-02-29nruc:borrower0000070502nruc:LoansReceivableCommercialAndIndustrialMemberus-gaap:CustomerConcentrationRiskMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2023-05-310000070502nruc:LoansReceivableCommercialAndIndustrialMemberus-gaap:CustomerConcentrationRiskMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2022-06-012023-05-310000070502nruc:LoansReceivableCommercialAndIndustrialMemberus-gaap:CustomerConcentrationRiskMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2023-06-012024-02-290000070502nruc:LoansReceivableCommercialAndIndustrialMemberus-gaap:CustomerConcentrationRiskMembernruc:DistributionSystemsMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2024-02-29nruc:distribution_system0000070502nruc:LoansReceivableCommercialAndIndustrialMemberus-gaap:CustomerConcentrationRiskMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMembernruc:PowerSupplySystemsMember2024-02-29nruc:power_supply_system0000070502nruc:LoansReceivableCommercialAndIndustrialMemberus-gaap:CustomerConcentrationRiskMembernruc:DistributionSystemsMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2023-05-310000070502nruc:LoansReceivableCommercialAndIndustrialMemberus-gaap:CustomerConcentrationRiskMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMembernruc:PowerSupplySystemsMember2023-05-310000070502nruc:LoansReceivableCommercialAndIndustrialMembernruc:LargestSingleBorrowerOrControlledGroupMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2023-06-012024-02-290000070502nruc:LoansReceivableCommercialAndIndustrialMembernruc:LargestSingleBorrowerOrControlledGroupMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2022-06-012023-05-310000070502nruc:LoansGuaranteedbyFarmerMacMember2024-02-290000070502nruc:LoansGuaranteedbyFarmerMacMember2023-05-310000070502us-gaap:CustomerConcentrationRiskMembernruc:LoansGuaranteedbyFarmerMacMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2024-02-290000070502us-gaap:CustomerConcentrationRiskMembernruc:LoansGuaranteedbyFarmerMacMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2023-05-310000070502us-gaap:CreditConcentrationRiskMembernruc:LoansGuaranteedbyFarmerMacMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2024-02-290000070502us-gaap:CreditConcentrationRiskMembernruc:LoansGuaranteedbyFarmerMacMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2023-05-310000070502us-gaap:CreditConcentrationRiskMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2024-02-290000070502us-gaap:CreditConcentrationRiskMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2023-05-310000070502us-gaap:CreditConcentrationRiskMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2022-06-012023-05-310000070502us-gaap:CreditConcentrationRiskMembernruc:TwentyLargestBorrowersMemberus-gaap:AccountsReceivableMember2023-06-012024-02-29nruc:loannruc:state00000705022022-06-012023-05-310000070502nruc:PowerSupplySystemsMember2024-02-290000070502nruc:PowerSupplySystemsMember2023-05-310000070502nruc:DistributionSystemsMembersrt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2024-02-290000070502nruc:DistributionSystemsMembersrt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2023-06-012024-02-290000070502nruc:DistributionSystemsMembersrt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2023-05-310000070502nruc:DistributionSystemsMembersrt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2022-06-012023-05-310000070502srt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:PowerSupplySystemsMember2024-02-290000070502srt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:PowerSupplySystemsMember2023-06-012024-02-290000070502srt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:PowerSupplySystemsMember2023-05-310000070502srt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:PowerSupplySystemsMember2022-06-012023-05-310000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2024-02-290000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2023-06-012024-02-290000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2023-05-310000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2022-06-012023-05-310000070502srt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2024-02-290000070502srt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2023-06-012024-02-290000070502srt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2023-05-310000070502srt:ParentCompanyMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2022-06-012023-05-310000070502nruc:ElectricUtilityMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502nruc:ElectricUtilityMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:NationalCooperativeServicesCorporationMember2023-06-012024-02-290000070502nruc:ElectricUtilityMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502nruc:ElectricUtilityMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:NationalCooperativeServicesCorporationMember2022-06-012023-05-310000070502us-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2024-02-290000070502us-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2023-06-012024-02-290000070502us-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2023-05-310000070502us-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2022-06-012023-05-310000070502us-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502us-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:NationalCooperativeServicesCorporationMember2023-06-012024-02-290000070502us-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502us-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMembernruc:NationalCooperativeServicesCorporationMember2022-06-012023-05-310000070502us-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2024-02-290000070502us-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2023-06-012024-02-290000070502us-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2023-05-310000070502us-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2022-06-012023-05-310000070502nruc:LoansGuaranteedbyFarmerMacMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2024-02-290000070502nruc:LoansGuaranteedbyFarmerMacMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2023-06-012024-02-290000070502nruc:LoansGuaranteedbyFarmerMacMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2023-05-310000070502nruc:LoansGuaranteedbyFarmerMacMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2022-06-012023-05-310000070502nruc:LoansReceivableCommercialAndIndustrialNotCoveredByFarmerMacStandbyRepurchaseAgreementMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2024-02-290000070502nruc:LoansReceivableCommercialAndIndustrialNotCoveredByFarmerMacStandbyRepurchaseAgreementMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2023-06-012024-02-290000070502nruc:LoansReceivableCommercialAndIndustrialNotCoveredByFarmerMacStandbyRepurchaseAgreementMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2023-05-310000070502nruc:LoansReceivableCommercialAndIndustrialNotCoveredByFarmerMacStandbyRepurchaseAgreementMemberus-gaap:GeographicConcentrationRiskMemberstpr:TXus-gaap:AccountsReceivableMember2022-06-012023-05-310000070502nruc:DistributionSystemsMembersrt:ParentCompanyMemberus-gaap:FinancialAssetNotPastDueMember2024-02-290000070502nruc:FinancingReceivables30to89DaysPastDueMembernruc:DistributionSystemsMembersrt:ParentCompanyMember2024-02-290000070502nruc:DistributionSystemsMembersrt:ParentCompanyMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2024-02-290000070502nruc:DistributionSystemsMembersrt:ParentCompanyMemberus-gaap:FinancialAssetPastDueMember2024-02-290000070502srt:ParentCompanyMemberus-gaap:FinancialAssetNotPastDueMembernruc:PowerSupplySystemsMember2024-02-290000070502nruc:FinancingReceivables30to89DaysPastDueMembersrt:ParentCompanyMembernruc:PowerSupplySystemsMember2024-02-290000070502srt:ParentCompanyMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembernruc:PowerSupplySystemsMember2024-02-290000070502srt:ParentCompanyMemberus-gaap:FinancialAssetPastDueMembernruc:PowerSupplySystemsMember2024-02-290000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMemberus-gaap:FinancialAssetNotPastDueMember2024-02-290000070502nruc:StatewideAndAssociateMembernruc:FinancingReceivables30to89DaysPastDueMembersrt:ParentCompanyMember2024-02-290000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2024-02-290000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMemberus-gaap:FinancialAssetPastDueMember2024-02-290000070502srt:ParentCompanyMemberus-gaap:FinancialAssetNotPastDueMember2024-02-290000070502nruc:FinancingReceivables30to89DaysPastDueMembersrt:ParentCompanyMember2024-02-290000070502srt:ParentCompanyMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2024-02-290000070502srt:ParentCompanyMemberus-gaap:FinancialAssetPastDueMember2024-02-290000070502nruc:ElectricUtilityMemberus-gaap:FinancialAssetNotPastDueMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502nruc:FinancingReceivables30to89DaysPastDueMembernruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502nruc:ElectricUtilityMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502nruc:ElectricUtilityMemberus-gaap:FinancialAssetPastDueMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502us-gaap:FinancialAssetNotPastDueMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2024-02-290000070502nruc:FinancingReceivables30to89DaysPastDueMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2024-02-290000070502us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2024-02-290000070502us-gaap:FinancialAssetPastDueMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2024-02-290000070502us-gaap:FinancialAssetNotPastDueMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502nruc:FinancingReceivables30to89DaysPastDueMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502us-gaap:FinancialAssetPastDueMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502us-gaap:FinancialAssetNotPastDueMember2024-02-290000070502nruc:FinancingReceivables30to89DaysPastDueMember2024-02-290000070502us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2024-02-290000070502us-gaap:FinancialAssetPastDueMember2024-02-290000070502nruc:DistributionSystemsMembersrt:ParentCompanyMemberus-gaap:FinancialAssetNotPastDueMember2023-05-310000070502nruc:FinancingReceivables30to89DaysPastDueMembernruc:DistributionSystemsMembersrt:ParentCompanyMember2023-05-310000070502nruc:DistributionSystemsMembersrt:ParentCompanyMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-05-310000070502nruc:DistributionSystemsMembersrt:ParentCompanyMemberus-gaap:FinancialAssetPastDueMember2023-05-310000070502srt:ParentCompanyMemberus-gaap:FinancialAssetNotPastDueMembernruc:PowerSupplySystemsMember2023-05-310000070502nruc:FinancingReceivables30to89DaysPastDueMembersrt:ParentCompanyMembernruc:PowerSupplySystemsMember2023-05-310000070502srt:ParentCompanyMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembernruc:PowerSupplySystemsMember2023-05-310000070502srt:ParentCompanyMemberus-gaap:FinancialAssetPastDueMembernruc:PowerSupplySystemsMember2023-05-310000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMemberus-gaap:FinancialAssetNotPastDueMember2023-05-310000070502nruc:StatewideAndAssociateMembernruc:FinancingReceivables30to89DaysPastDueMembersrt:ParentCompanyMember2023-05-310000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-05-310000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMemberus-gaap:FinancialAssetPastDueMember2023-05-310000070502srt:ParentCompanyMemberus-gaap:FinancialAssetNotPastDueMember2023-05-310000070502nruc:FinancingReceivables30to89DaysPastDueMembersrt:ParentCompanyMember2023-05-310000070502srt:ParentCompanyMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-05-310000070502srt:ParentCompanyMemberus-gaap:FinancialAssetPastDueMember2023-05-310000070502nruc:ElectricUtilityMemberus-gaap:FinancialAssetNotPastDueMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502nruc:FinancingReceivables30to89DaysPastDueMembernruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502nruc:ElectricUtilityMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502nruc:ElectricUtilityMemberus-gaap:FinancialAssetPastDueMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502us-gaap:FinancialAssetNotPastDueMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2023-05-310000070502nruc:FinancingReceivables30to89DaysPastDueMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2023-05-310000070502us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2023-05-310000070502us-gaap:FinancialAssetPastDueMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2023-05-310000070502us-gaap:FinancialAssetNotPastDueMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502nruc:FinancingReceivables30to89DaysPastDueMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502us-gaap:FinancialAssetPastDueMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502us-gaap:FinancialAssetNotPastDueMember2023-05-310000070502nruc:FinancingReceivables30to89DaysPastDueMember2023-05-310000070502us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-05-310000070502us-gaap:FinancialAssetPastDueMember2023-05-310000070502srt:ParentCompanyMemberus-gaap:FinancialAssetPastDueMembernruc:BrazosSandyCreekElectricCooperativeIncMembernruc:PowerSupplySystemsMember2023-05-310000070502nruc:BrazosElectricPowerCooperativeAndBrazosSandyCreekElectricCooperativeIncMembernruc:PowerSupplySystemsMember2023-06-012023-08-310000070502nruc:BrazosElectricPowerCooperativeAndBrazosSandyCreekElectricCooperativeIncMembernruc:PowerSupplySystemsMember2023-05-310000070502nruc:BrazosElectricPowerCooperativeAndBrazosSandyCreekElectricCooperativeIncMembernruc:PowerSupplySystemsMember2023-06-012024-02-29nruc:modification0000070502nruc:TelecommunicationsMembernruc:NationalCooperativeServicesCorporationMember2023-06-012024-02-290000070502us-gaap:ExtendedMaturityMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2024-02-290000070502nruc:TelecommunicationsMembernruc:NationalCooperativeServicesCorporationMember2023-12-012024-02-290000070502nruc:DistributionSystemsMembernruc:TroubledDebtRestructuringFinancingReceivableMembersrt:ParentCompanyMember2022-06-012023-05-310000070502nruc:DistributionSystemsMembernruc:TroubledDebtRestructuringFinancingReceivableMembersrt:ParentCompanyMember2023-05-310000070502nruc:TroubledDebtRestructuringFinancingReceivableMembersrt:ParentCompanyMembernruc:PowerSupplySystemsMember2022-06-012023-05-310000070502nruc:TroubledDebtRestructuringFinancingReceivableMembersrt:ParentCompanyMembernruc:PowerSupplySystemsMember2023-05-310000070502nruc:TroubledDebtRestructuringFinancingReceivableMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2022-06-012023-05-310000070502nruc:TroubledDebtRestructuringFinancingReceivableMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2023-05-310000070502nruc:TroubledDebtRestructuringFinancingReceivableMember2022-06-012023-05-310000070502nruc:TroubledDebtRestructuringFinancingReceivableMember2023-05-310000070502nruc:PerformingTroubledDebtRestructuringLoansMember2022-06-012023-05-310000070502nruc:PerformingTroubledDebtRestructuringLoansMember2023-05-310000070502nruc:NonperformingTroubledDebtRestructuringloansMember2022-06-012023-05-310000070502nruc:NonperformingTroubledDebtRestructuringloansMember2023-05-310000070502nruc:BrazosElectricPowerCooperativeMember2023-05-310000070502nruc:BrazosElectricPowerCooperativeMember2023-06-012023-08-310000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMemberus-gaap:NonperformingFinancingReceivableMember2024-02-290000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMemberus-gaap:NonperformingFinancingReceivableMember2023-05-310000070502us-gaap:NonperformingFinancingReceivableMember2024-02-290000070502us-gaap:NonperformingFinancingReceivableMember2023-05-310000070502nruc:PowerSupplySystemsMemberus-gaap:NonperformingFinancingReceivableMember2022-06-012023-05-310000070502nruc:BrazosSandyCreekElectricCooperativeIncMemberus-gaap:NonperformingFinancingReceivableMember2023-06-012023-08-310000070502us-gaap:SubsequentEventMemberus-gaap:NonperformingFinancingReceivableMember2024-03-012024-03-310000070502us-gaap:SubsequentEventMemberus-gaap:NonperformingFinancingReceivableMember2024-03-310000070502nruc:BrazosElectricPowerCooperativeAndBrazosSandyCreekElectricCooperativeIncMembernruc:PowerSupplySystemsMemberus-gaap:NonperformingFinancingReceivableMember2022-06-012023-05-310000070502nruc:RuralTelephoneFinanceCooperativeMembernruc:LoanDefaultsMember2024-02-290000070502nruc:ElectricUtilityMembernruc:LoanDefaultsMember2024-02-290000070502nruc:RuralTelephoneFinanceCooperativeMember2017-06-012024-02-290000070502nruc:ElectricUtilityMember2013-06-012024-02-290000070502us-gaap:PassMembernruc:DistributionSystemsMembersrt:ParentCompanyMember2024-02-290000070502us-gaap:PassMembernruc:DistributionSystemsMembersrt:ParentCompanyMember2023-05-310000070502us-gaap:PassMembersrt:ParentCompanyMembernruc:PowerSupplySystemsMember2024-02-290000070502us-gaap:PassMembersrt:ParentCompanyMembernruc:PowerSupplySystemsMember2023-05-310000070502nruc:StatewideAndAssociateMemberus-gaap:PassMembersrt:ParentCompanyMember2024-02-290000070502nruc:StatewideAndAssociateMemberus-gaap:PassMembersrt:ParentCompanyMember2023-05-310000070502us-gaap:PassMembersrt:ParentCompanyMember2024-02-290000070502us-gaap:PassMembersrt:ParentCompanyMember2023-05-310000070502us-gaap:PassMembernruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502us-gaap:PassMembernruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502us-gaap:PassMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2024-02-290000070502us-gaap:PassMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2023-05-310000070502us-gaap:PassMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502us-gaap:PassMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502us-gaap:PassMember2024-02-290000070502us-gaap:PassMember2023-05-310000070502us-gaap:SpecialMentionMembernruc:DistributionSystemsMembersrt:ParentCompanyMember2024-02-290000070502us-gaap:SpecialMentionMembernruc:DistributionSystemsMembersrt:ParentCompanyMember2023-05-310000070502nruc:StatewideAndAssociateMemberus-gaap:SpecialMentionMembersrt:ParentCompanyMember2024-02-290000070502nruc:StatewideAndAssociateMemberus-gaap:SpecialMentionMembersrt:ParentCompanyMember2023-05-310000070502us-gaap:SpecialMentionMembersrt:ParentCompanyMember2024-02-290000070502us-gaap:SpecialMentionMembersrt:ParentCompanyMember2023-05-310000070502us-gaap:SpecialMentionMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2024-02-290000070502us-gaap:SpecialMentionMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2023-05-310000070502us-gaap:SpecialMentionMember2024-02-290000070502us-gaap:SpecialMentionMember2023-05-310000070502us-gaap:SubstandardMember2024-02-290000070502us-gaap:SubstandardMember2023-05-310000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMemberus-gaap:DoubtfulMember2024-02-290000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMemberus-gaap:DoubtfulMember2023-05-310000070502us-gaap:DoubtfulMember2024-02-290000070502us-gaap:DoubtfulMember2023-05-310000070502us-gaap:CriticizedMember2024-02-290000070502us-gaap:CriticizedMember2023-05-310000070502us-gaap:CriticizedMember2023-12-012024-02-290000070502us-gaap:SpecialMentionMembernruc:DistributionSystemsMembersrt:ParentCompanyMembernruc:CFCElectricDistributionBorrowerAndSubsidiaryMember2023-05-310000070502us-gaap:SpecialMentionMembernruc:DistributionSystemsMembersrt:ParentCompanyMembernruc:CFCElectricDistributionBorrowerAndSubsidiaryMember2024-02-290000070502us-gaap:SpecialMentionMembernruc:DistributionSystemsMembersrt:ParentCompanyMembernruc:CFCElectricDistributionBorrowerMember2024-02-290000070502us-gaap:SpecialMentionMembernruc:DistributionSystemsMembersrt:ParentCompanyMembernruc:CFCElectricDistributionBorrowerMember2023-05-31nruc:hurricane0000070502nruc:OneCFCElectricPowerSupplyBorrowerMembernruc:PowerSupplySystemsMemberus-gaap:NonperformingFinancingReceivableMember2023-05-310000070502nruc:BrazosElectricPowerCooperativeAndBrazosSandyCreekElectricCooperativeIncMembernruc:PowerSupplySystemsMemberus-gaap:NonperformingFinancingReceivableMember2023-05-310000070502us-gaap:CommitmentsToExtendCreditMembernruc:DistributionSystemsMembersrt:ParentCompanyMember2024-02-290000070502us-gaap:CommitmentsToExtendCreditMembernruc:DistributionSystemsMembersrt:ParentCompanyMember2023-05-310000070502us-gaap:CommitmentsToExtendCreditMembersrt:ParentCompanyMembernruc:PowerSupplySystemsMember2024-02-290000070502us-gaap:CommitmentsToExtendCreditMembersrt:ParentCompanyMembernruc:PowerSupplySystemsMember2023-05-310000070502us-gaap:CommitmentsToExtendCreditMembernruc:StatewideAndAssociateMembersrt:ParentCompanyMember2024-02-290000070502us-gaap:CommitmentsToExtendCreditMembernruc:StatewideAndAssociateMembersrt:ParentCompanyMember2023-05-310000070502us-gaap:CommitmentsToExtendCreditMembersrt:ParentCompanyMember2024-02-290000070502us-gaap:CommitmentsToExtendCreditMembersrt:ParentCompanyMember2023-05-310000070502us-gaap:CommitmentsToExtendCreditMembernruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502us-gaap:CommitmentsToExtendCreditMembernruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502us-gaap:CommitmentsToExtendCreditMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2024-02-290000070502us-gaap:CommitmentsToExtendCreditMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2023-05-310000070502us-gaap:CommitmentsToExtendCreditMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502us-gaap:CommitmentsToExtendCreditMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502us-gaap:CommitmentsToExtendCreditMember2024-02-290000070502us-gaap:CommitmentsToExtendCreditMember2023-05-310000070502us-gaap:CommitmentsToExtendCreditMembernruc:LongTermFixedRateLoansMember2024-02-290000070502us-gaap:CommitmentsToExtendCreditMembernruc:LongTermFixedRateLoansMember2023-05-310000070502nruc:LongTermVariableRateLoansMemberus-gaap:CommitmentsToExtendCreditMember2024-02-290000070502nruc:LongTermVariableRateLoansMemberus-gaap:CommitmentsToExtendCreditMember2023-05-310000070502nruc:LongTermLoansMemberus-gaap:CommitmentsToExtendCreditMember2024-02-290000070502nruc:LongTermLoansMemberus-gaap:CommitmentsToExtendCreditMember2023-05-310000070502us-gaap:CommitmentsToExtendCreditMembernruc:LineOfCreditLoansMember2024-02-290000070502us-gaap:CommitmentsToExtendCreditMembernruc:LineOfCreditLoansMember2023-05-310000070502nruc:LongTermVariableRateLoansMemberus-gaap:CommitmentsToExtendCreditMember2023-06-012024-02-290000070502nruc:CommitmentsToExtendCreditSubjectToMaterialAdverseChangeClauseMember2024-02-290000070502nruc:CommitmentsToExtendCreditSubjectToMaterialAdverseChangeClauseMember2023-05-310000070502nruc:CommitmentsToExtendCreditNotSubjectToMaterialAdverseChangeClauseMember2024-02-290000070502nruc:CommitmentsToExtendCreditNotSubjectToMaterialAdverseChangeClauseMember2023-05-310000070502nruc:CollateralTrustBonds2007IndentureMember2024-02-290000070502nruc:CollateralTrustBonds2007IndentureMember2023-05-310000070502nruc:DistributionSystemsMemberus-gaap:MortgageReceivablesMembernruc:CollateralTrustBonds2007IndentureMember2024-02-290000070502nruc:DistributionSystemsMemberus-gaap:MortgageReceivablesMembernruc:CollateralTrustBonds2007IndentureMember2023-05-310000070502nruc:LoansGuaranteedByRuralUtilitiesServiceMembernruc:CollateralTrustBonds2007IndentureMember2024-02-290000070502nruc:LoansGuaranteedByRuralUtilitiesServiceMembernruc:CollateralTrustBonds2007IndentureMember2023-05-310000070502nruc:CollateralTrustBonds1994IndentureMember2024-02-290000070502nruc:CollateralTrustBonds1994IndentureMember2023-05-310000070502nruc:CollateralTrustBonds1994IndentureMembernruc:DistributionSystemsMemberus-gaap:MortgageReceivablesMember2024-02-290000070502nruc:CollateralTrustBonds1994IndentureMembernruc:DistributionSystemsMemberus-gaap:MortgageReceivablesMember2023-05-310000070502nruc:FederalFinancingBankMembernruc:SecuredNotesPayableMember2024-02-290000070502nruc:FederalFinancingBankMembernruc:SecuredNotesPayableMember2023-05-310000070502us-gaap:MortgageReceivablesMembernruc:FederalFinancingBankMembernruc:DistributionAndPowerSupplySystemMember2024-02-290000070502us-gaap:MortgageReceivablesMembernruc:FederalFinancingBankMembernruc:DistributionAndPowerSupplySystemMember2023-05-310000070502nruc:SecuredNotesPayableMembernruc:FederalAgriculturalMortgageCorporationMember2024-02-290000070502nruc:SecuredNotesPayableMembernruc:FederalAgriculturalMortgageCorporationMember2023-05-310000070502us-gaap:MortgageReceivablesMembernruc:DistributionAndPowerSupplySystemMembernruc:FederalAgriculturalMortgageCorporationMember2024-02-290000070502us-gaap:MortgageReceivablesMembernruc:DistributionAndPowerSupplySystemMembernruc:FederalAgriculturalMortgageCorporationMember2023-05-310000070502nruc:CleanRenewableEnergyBondsSeries2009AMember2024-02-290000070502nruc:CleanRenewableEnergyBondsSeries2009AMember2023-05-310000070502nruc:CleanRenewableEnergyBondsSeries2009AMemberus-gaap:MortgageReceivablesMembernruc:DistributionAndPowerSupplySystemMember2024-02-290000070502nruc:CleanRenewableEnergyBondsSeries2009AMemberus-gaap:MortgageReceivablesMembernruc:DistributionAndPowerSupplySystemMember2023-05-310000070502nruc:DistributionSystemsMembersrt:ParentCompanyMember2023-11-300000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMember2023-11-300000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMember2023-11-300000070502srt:ParentCompanyMember2023-11-300000070502nruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2023-11-300000070502nruc:TelecommunicationsMembernruc:NationalCooperativeServicesCorporationMember2023-11-300000070502nruc:NationalCooperativeServicesCorporationMember2023-11-300000070502nruc:DistributionSystemsMembersrt:ParentCompanyMember2023-12-012024-02-290000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMember2023-12-012024-02-290000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMember2023-12-012024-02-290000070502srt:ParentCompanyMember2023-12-012024-02-290000070502nruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2023-12-012024-02-290000070502nruc:NationalCooperativeServicesCorporationMember2023-12-012024-02-290000070502nruc:DistributionSystemsMembersrt:ParentCompanyMember2022-11-300000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMember2022-11-300000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMember2022-11-300000070502srt:ParentCompanyMember2022-11-300000070502nruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2022-11-300000070502nruc:TelecommunicationsMembernruc:NationalCooperativeServicesCorporationMember2022-11-300000070502nruc:NationalCooperativeServicesCorporationMember2022-11-300000070502nruc:DistributionSystemsMembersrt:ParentCompanyMember2022-12-012023-02-280000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMember2022-12-012023-02-280000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMember2022-12-012023-02-280000070502srt:ParentCompanyMember2022-12-012023-02-280000070502nruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2022-12-012023-02-280000070502nruc:TelecommunicationsMembernruc:NationalCooperativeServicesCorporationMember2022-12-012023-02-280000070502nruc:NationalCooperativeServicesCorporationMember2022-12-012023-02-280000070502nruc:DistributionSystemsMembersrt:ParentCompanyMember2023-02-280000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMember2023-02-280000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMember2023-02-280000070502srt:ParentCompanyMember2023-02-280000070502nruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2023-02-280000070502nruc:TelecommunicationsMembernruc:NationalCooperativeServicesCorporationMember2023-02-280000070502nruc:NationalCooperativeServicesCorporationMember2023-02-280000070502nruc:DistributionSystemsMembersrt:ParentCompanyMember2023-06-012024-02-290000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMember2023-06-012024-02-290000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMember2023-06-012024-02-290000070502srt:ParentCompanyMember2023-06-012024-02-290000070502nruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2023-06-012024-02-290000070502nruc:NationalCooperativeServicesCorporationMember2023-06-012024-02-290000070502nruc:DistributionSystemsMembersrt:ParentCompanyMember2022-05-310000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMember2022-05-310000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMember2022-05-310000070502srt:ParentCompanyMember2022-05-310000070502nruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2022-05-310000070502nruc:TelecommunicationsMembernruc:NationalCooperativeServicesCorporationMember2022-05-310000070502nruc:NationalCooperativeServicesCorporationMember2022-05-310000070502nruc:DistributionSystemsMembersrt:ParentCompanyMember2022-06-012023-02-280000070502srt:ParentCompanyMembernruc:PowerSupplySystemsMember2022-06-012023-02-280000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMember2022-06-012023-02-280000070502srt:ParentCompanyMember2022-06-012023-02-280000070502nruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2022-06-012023-02-280000070502nruc:TelecommunicationsMembernruc:NationalCooperativeServicesCorporationMember2022-06-012023-02-280000070502nruc:NationalCooperativeServicesCorporationMember2022-06-012023-02-280000070502nruc:DistributionSystemsMembersrt:ParentCompanyMembernruc:CollectiveAllowanceMember2024-02-290000070502srt:ParentCompanyMembernruc:CollectiveAllowanceMembernruc:PowerSupplySystemsMember2024-02-290000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMembernruc:CollectiveAllowanceMember2024-02-290000070502srt:ParentCompanyMembernruc:CollectiveAllowanceMember2024-02-290000070502nruc:ElectricUtilityMembernruc:CollectiveAllowanceMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502nruc:CollectiveAllowanceMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2024-02-290000070502nruc:CollectiveAllowanceMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502nruc:CollectiveAllowanceMember2024-02-290000070502nruc:AssetSpecificAllowanceMembernruc:DistributionSystemsMembersrt:ParentCompanyMember2024-02-290000070502nruc:AssetSpecificAllowanceMembersrt:ParentCompanyMembernruc:PowerSupplySystemsMember2024-02-290000070502nruc:StatewideAndAssociateMembernruc:AssetSpecificAllowanceMembersrt:ParentCompanyMember2024-02-290000070502nruc:AssetSpecificAllowanceMembersrt:ParentCompanyMember2024-02-290000070502nruc:AssetSpecificAllowanceMembernruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502nruc:AssetSpecificAllowanceMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2024-02-290000070502nruc:AssetSpecificAllowanceMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502nruc:AssetSpecificAllowanceMember2024-02-290000070502nruc:DistributionSystemsMembersrt:ParentCompanyMembernruc:CollectiveAllowanceMember2023-05-310000070502srt:ParentCompanyMembernruc:CollectiveAllowanceMembernruc:PowerSupplySystemsMember2023-05-310000070502nruc:StatewideAndAssociateMembersrt:ParentCompanyMembernruc:CollectiveAllowanceMember2023-05-310000070502srt:ParentCompanyMembernruc:CollectiveAllowanceMember2023-05-310000070502nruc:ElectricUtilityMembernruc:CollectiveAllowanceMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502nruc:CollectiveAllowanceMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2023-05-310000070502nruc:CollectiveAllowanceMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502nruc:CollectiveAllowanceMember2023-05-310000070502nruc:AssetSpecificAllowanceMembernruc:DistributionSystemsMembersrt:ParentCompanyMember2023-05-310000070502nruc:AssetSpecificAllowanceMembersrt:ParentCompanyMembernruc:PowerSupplySystemsMember2023-05-310000070502nruc:StatewideAndAssociateMembernruc:AssetSpecificAllowanceMembersrt:ParentCompanyMember2023-05-310000070502nruc:AssetSpecificAllowanceMembersrt:ParentCompanyMember2023-05-310000070502nruc:AssetSpecificAllowanceMembernruc:ElectricUtilityMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502nruc:AssetSpecificAllowanceMembernruc:NationalCooperativeServicesCorporationMembernruc:TelecommunicationsMember2023-05-310000070502nruc:AssetSpecificAllowanceMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502nruc:AssetSpecificAllowanceMember2023-05-310000070502nruc:AssetSpecificAllowanceMember2023-06-012024-02-290000070502nruc:CollectiveAllowanceMember2023-06-012024-02-290000070502us-gaap:ShortTermDebtMember2023-06-012024-02-290000070502us-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMemberus-gaap:ShortTermDebtMember2023-06-012024-02-290000070502us-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMemberus-gaap:ShortTermDebtMember2022-06-012023-05-310000070502nruc:CommercialPaperSoldThroughDealersNetOfDiscountsMember2024-02-290000070502nruc:CommercialPaperSoldThroughDealersNetOfDiscountsMemberus-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMember2023-06-012024-02-290000070502nruc:CommercialPaperSoldThroughDealersNetOfDiscountsMember2023-05-310000070502nruc:CommercialPaperSoldThroughDealersNetOfDiscountsMemberus-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMember2022-06-012023-05-310000070502nruc:CommercialPaperSoldDirectlyToMembersAtParMember2024-02-290000070502nruc:CommercialPaperSoldDirectlyToMembersAtParMemberus-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMember2023-06-012024-02-290000070502nruc:CommercialPaperSoldDirectlyToMembersAtParMember2023-05-310000070502nruc:CommercialPaperSoldDirectlyToMembersAtParMemberus-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMember2022-06-012023-05-310000070502us-gaap:CommercialPaperMember2024-02-290000070502us-gaap:DebtMemberus-gaap:CommercialPaperMemberus-gaap:CreditAvailabilityConcentrationRiskMember2023-06-012024-02-290000070502us-gaap:CommercialPaperMember2023-05-310000070502us-gaap:DebtMemberus-gaap:CommercialPaperMemberus-gaap:CreditAvailabilityConcentrationRiskMember2022-06-012023-05-310000070502nruc:SelectNotesMember2024-02-290000070502us-gaap:DebtMembernruc:SelectNotesMemberus-gaap:CreditAvailabilityConcentrationRiskMember2023-06-012024-02-290000070502nruc:SelectNotesMember2023-05-310000070502us-gaap:DebtMembernruc:SelectNotesMemberus-gaap:CreditAvailabilityConcentrationRiskMember2022-06-012023-05-310000070502nruc:DailyLiquidityFundNotesSoldDirectlyToMember2024-02-290000070502us-gaap:DebtMembernruc:DailyLiquidityFundNotesSoldDirectlyToMemberus-gaap:CreditAvailabilityConcentrationRiskMember2023-06-012024-02-290000070502nruc:DailyLiquidityFundNotesSoldDirectlyToMember2023-05-310000070502us-gaap:DebtMembernruc:DailyLiquidityFundNotesSoldDirectlyToMemberus-gaap:CreditAvailabilityConcentrationRiskMember2022-06-012023-05-310000070502nruc:MediumTermNotesSoldToMembersMember2024-02-290000070502nruc:MediumTermNotesSoldToMembersMemberus-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMember2023-06-012024-02-290000070502nruc:MediumTermNotesSoldToMembersMember2023-05-310000070502nruc:MediumTermNotesSoldToMembersMemberus-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMember2022-06-012023-05-310000070502nruc:FarmerMacNotesPayableMember2024-02-290000070502us-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMembernruc:FarmerMacNotesPayableMember2023-06-012024-02-290000070502nruc:FarmerMacNotesPayableMember2023-05-310000070502us-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMembernruc:FarmerMacNotesPayableMember2022-06-012023-05-310000070502nruc:ThreeYearAgreementMatureOnNov282025Memberus-gaap:RevolvingCreditFacilityMember2023-06-012024-02-290000070502nruc:ThreeYearAgreementMatureOnNov282025Memberus-gaap:RevolvingCreditFacilityMember2024-02-290000070502nruc:ThreeYearAgreementMatureOnNov282026Memberus-gaap:RevolvingCreditFacilityMember2023-06-012024-02-290000070502nruc:ThreeYearAgreementMatureOnNov282026Memberus-gaap:RevolvingCreditFacilityMember2024-02-290000070502nruc:ThreeYearAgreementMemberus-gaap:RevolvingCreditFacilityMember2023-06-012024-02-290000070502nruc:ThreeYearAgreementMemberus-gaap:RevolvingCreditFacilityMember2024-02-290000070502us-gaap:RevolvingCreditFacilityMembernruc:FourYearAgreementMatureOnNov282026Member2023-06-012024-02-290000070502us-gaap:RevolvingCreditFacilityMembernruc:FourYearAgreementMatureOnNov282026Member2024-02-290000070502us-gaap:RevolvingCreditFacilityMembernruc:FourYearAgreementMatureOnNov282027Member2024-02-290000070502us-gaap:RevolvingCreditFacilityMembernruc:FourYearAgreementMatureOnNov282027Member2023-06-012024-02-290000070502us-gaap:RevolvingCreditFacilityMembernruc:FourYearAgreementMember2023-06-012024-02-290000070502us-gaap:RevolvingCreditFacilityMembernruc:FourYearAgreementMember2024-02-290000070502us-gaap:RevolvingCreditFacilityMember2024-02-290000070502nruc:SwinglineFacilityMembernruc:FourYearAgreementMember2023-11-200000070502nruc:ThreeYearAgreementMembernruc:SwinglineFacilityMember2023-11-200000070502nruc:ThreeYearAgreementMemberus-gaap:RevolvingCreditFacilityMember2023-11-200000070502us-gaap:RevolvingCreditFacilityMembernruc:FourYearAgreementMember2023-11-200000070502nruc:ThreeYearAgreementMatureOnNov282025Memberus-gaap:RevolvingCreditFacilityMember2023-11-200000070502us-gaap:RevolvingCreditFacilityMembernruc:FourYearAgreementMatureOnNov282026Member2023-11-20nruc:facility0000070502us-gaap:LongTermDebtMemberus-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMember2023-06-012024-02-290000070502us-gaap:LongTermDebtMemberus-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMember2023-06-012023-08-310000070502nruc:CollateralTrustBondsMember2024-02-290000070502nruc:CollateralTrustBondsMember2023-05-310000070502nruc:GuaranteedUnderwriterProgramNotesPayableMember2024-02-290000070502nruc:GuaranteedUnderwriterProgramNotesPayableMember2023-05-310000070502nruc:FederalAgriculturalMortgageCorporationNotesPayableMember2024-02-290000070502nruc:FederalAgriculturalMortgageCorporationNotesPayableMember2023-05-310000070502nruc:OtherSecuredNotesPayableMember2024-02-290000070502nruc:OtherSecuredNotesPayableMember2023-05-310000070502nruc:SecuredNotesPayableMember2024-02-290000070502nruc:SecuredNotesPayableMember2023-05-310000070502us-gaap:SecuredDebtMember2024-02-290000070502us-gaap:SecuredDebtMember2023-05-310000070502nruc:MediumTermNotesSoldThroughDealersMember2024-02-290000070502nruc:MediumTermNotesSoldThroughDealersMember2023-05-310000070502nruc:MediumTermNotesSoldToMembersMember2024-02-290000070502nruc:MediumTermNotesSoldToMembersMember2023-05-310000070502nruc:UnsecuredMediumTermNotesMember2024-02-290000070502nruc:UnsecuredMediumTermNotesMember2023-05-310000070502nruc:OtherUnsecuredNotesPayableMember2024-02-290000070502nruc:OtherUnsecuredNotesPayableMember2023-05-310000070502nruc:UnsecuredNotesPayableMember2024-02-290000070502nruc:UnsecuredNotesPayableMember2023-05-310000070502us-gaap:UnsecuredDebtMember2024-02-290000070502us-gaap:UnsecuredDebtMember2023-05-310000070502us-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMemberus-gaap:SecuredDebtMember2023-06-012024-02-290000070502us-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMemberus-gaap:SecuredDebtMember2022-06-012023-05-310000070502nruc:CollateralTrustBondsMember2023-06-012024-02-290000070502nruc:GuaranteedUnderwriterProgramNotesPayableMembernruc:CommittedLoanFacilityMember2023-06-012024-02-290000070502nruc:GuaranteedUnderwriterProgramNotesPayableMembernruc:CommittedLoanFacilityMember2024-02-290000070502nruc:GuaranteedUnderwriterProgramNotesPayableMembernruc:CommittedLoanFacilityMember2023-12-190000070502nruc:GuaranteedUnderwriterProgramNotesPayableMembersrt:MaximumMembernruc:CommittedLoanFacilityMember2023-12-192023-12-190000070502nruc:GuaranteedUnderwriterProgramNotesPayableMember2023-06-012024-02-290000070502nruc:FederalAgriculturalMortgageCorporationMember2024-02-290000070502nruc:FederalAgriculturalMortgageCorporationMember2023-06-012024-02-290000070502nruc:FarmerMacNotesPayableMembernruc:FederalAgriculturalMortgageCorporationMember2023-06-012024-02-290000070502nruc:FarmerMacNotesPayableMembernruc:FederalAgriculturalMortgageCorporationMember2024-02-290000070502us-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMemberus-gaap:UnsecuredDebtMember2023-06-012024-02-290000070502us-gaap:DebtMemberus-gaap:CreditAvailabilityConcentrationRiskMemberus-gaap:UnsecuredDebtMember2022-06-012023-05-310000070502nruc:MediumTermNotes5.03PercentMemberus-gaap:MediumTermNotesMember2024-02-290000070502nruc:MediumTermNotes5.03PercentMemberus-gaap:MediumTermNotesMember2023-06-012024-02-290000070502nruc:MediumTermNotesFloatingRateMemberus-gaap:MediumTermNotesMember2024-02-290000070502nruc:MediumTermNotesFloatingRateMemberus-gaap:MediumTermNotesMember2023-06-012024-02-290000070502us-gaap:MediumTermNotesMember2023-06-012024-02-290000070502nruc:SubordinatedDeferrableNotesDue2043Member2023-06-262023-06-260000070502nruc:SubordinatedDeferrableNotesDue2043Member2023-06-260000070502nruc:SubordinatedDeferrableNotesDue2053Member2024-02-080000070502nruc:SubordinatedDeferrableNotesDue2053Member2024-02-082024-02-080000070502nruc:SubordinatedDeferrableNotesDue2053Membernruc:U.STreasuryInterestRateMember2024-02-082024-02-080000070502srt:MaximumMember2024-02-082024-02-08nruc:period0000070502nruc:PayFixedReceiveVariableSwapsMember2024-02-290000070502nruc:PayFixedReceiveVariableSwapsMember2023-05-310000070502nruc:PayVariableReceiveFixedSwapsMember2024-02-290000070502nruc:PayVariableReceiveFixedSwapsMember2023-05-310000070502us-gaap:InterestRateSwapMember2024-02-290000070502us-gaap:InterestRateSwapMember2023-05-310000070502us-gaap:ForwardContractsMember2024-02-290000070502us-gaap:ForwardContractsMember2023-05-3100000705022023-11-03nruc:agreement0000070502us-gaap:CashFlowHedgingMemberus-gaap:TreasuryLockMember2023-11-030000070502nruc:FarmerMacNotesPayableMember2023-11-072023-11-070000070502us-gaap:CashFlowHedgingMemberus-gaap:TreasuryLockMember2023-11-0700000705022023-01-310000070502us-gaap:CashFlowHedgingMemberus-gaap:TreasuryLockMember2023-01-310000070502us-gaap:CashFlowHedgingMemberus-gaap:TreasuryLockMember2023-02-280000070502us-gaap:CashFlowHedgingMemberus-gaap:TreasuryLockMember2023-12-012024-02-290000070502us-gaap:InterestRateSwapMember2023-12-012024-02-290000070502us-gaap:InterestRateSwapMember2022-12-012023-02-280000070502us-gaap:InterestRateSwapMember2023-06-012024-02-290000070502us-gaap:InterestRateSwapMember2022-06-012023-02-280000070502nruc:InterestRateSwapRatingTriggerMembernruc:MoodysA3RatingStandardPoorsAMinusRatingMember2024-02-290000070502nruc:InterestRateSwapRatingTriggerMembernruc:MoodysBaa1RatingStandardPoorsBBBPlusRatingMember2024-02-290000070502nruc:InterestRateSwapRatingTriggerMembernruc:MoodysBaa2RatingStandardPoorsBBBRatingMember2024-02-290000070502nruc:InterestRateSwapRatingTriggerMember2024-02-29nruc:counterparty0000070502nruc:InterestRateSwapSubjectToRatingTriggerAndEarlyTerminationProvisionMember2024-02-290000070502us-gaap:InterestRateSwapMembernruc:DerivativeCounterpartyConcentrationRiskMemberus-gaap:DerivativeMember2023-06-012024-02-290000070502us-gaap:InterestRateSwapMembernruc:DerivativeCounterpartyConcentrationRiskMemberus-gaap:DerivativeMember2022-06-012023-05-310000070502srt:ParentCompanyMembernruc:RetainedEarningsAppropriatedMembershipFeesAndEducationFundMember2023-05-012023-05-310000070502srt:ParentCompanyMembernruc:RetainedEarningsAppropriatedPatronageCapitalAllocatedMember2023-07-012023-07-310000070502nruc:RetainedEarningsAppropriatedCapitalReserveMembersrt:ParentCompanyMember2023-07-012023-07-310000070502nruc:RetainedEarningsAppropriatedPatronageCapitalAllocatedAndRetiredMembersrt:ParentCompanyMember2023-07-012023-07-310000070502srt:ParentCompanyMembernruc:RetainedEarningsAllocationofFiftyPercentofPriorYearPatronageCapitalAllocationMember2023-07-012023-07-310000070502srt:ParentCompanyMembernruc:RetainedEarningsAllocationHeldforTwentyFiveYearsMember2023-07-012023-07-310000070502nruc:RetainedEarningsAppropriatedPatronageCapitalAllocatedAndRetiredMembersrt:ParentCompanyMember2023-09-012023-09-300000070502us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-11-300000070502us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMember2023-11-300000070502us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-11-300000070502us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMember2022-11-300000070502us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-12-012024-02-290000070502us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMember2023-12-012024-02-290000070502us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-12-012023-02-280000070502us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMember2022-12-012023-02-280000070502us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-02-290000070502us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMember2024-02-290000070502us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-02-280000070502us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMember2023-02-280000070502us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-05-310000070502us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMember2023-05-310000070502us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-05-310000070502us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMember2022-05-310000070502us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-06-012024-02-290000070502us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMember2023-06-012024-02-290000070502us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-06-012023-02-280000070502us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetTransitionAssetObligationMember2022-06-012023-02-280000070502us-gaap:CashFlowHedgingMember2023-06-012024-02-290000070502nruc:LongTermTaxExemptBondsMember2024-02-290000070502nruc:LongTermTaxExemptBondsMember2023-05-310000070502us-gaap:LetterOfCreditMember2024-02-290000070502us-gaap:LetterOfCreditMember2023-05-310000070502us-gaap:GuaranteeTypeOtherMember2024-02-290000070502us-gaap:GuaranteeTypeOtherMember2023-05-310000070502us-gaap:PerformanceGuaranteeMembernruc:HybridLetterOfCreditMember2024-02-290000070502nruc:StatewideAndAssociateMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2024-02-290000070502nruc:StatewideAndAssociateMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2023-05-310000070502us-gaap:PerformanceGuaranteeMembernruc:MasterLetterOfCreditMember2024-02-290000070502nruc:GuaranteeTypeOtherSecuredMember2023-05-310000070502nruc:GuaranteeTypeOtherSecuredMember2024-02-290000070502us-gaap:FinancialStandbyLetterOfCreditMembernruc:AdjustableAndFloatingRateTaxExemptBondsMember2024-02-290000070502us-gaap:FinancialStandbyLetterOfCreditMembernruc:AdjustableAndFloatingRateTaxExemptBondsMember2023-05-310000070502us-gaap:FairValueInputsLevel1Member2024-02-290000070502us-gaap:FairValueInputsLevel2Member2024-02-290000070502us-gaap:FairValueInputsLevel3Member2024-02-290000070502us-gaap:FairValueInputsLevel1Member2023-05-310000070502us-gaap:FairValueInputsLevel2Member2023-05-310000070502us-gaap:FairValueInputsLevel3Member2023-05-310000070502us-gaap:FairValueMeasurementsRecurringMember2024-02-290000070502us-gaap:FairValueMeasurementsRecurringMember2023-05-310000070502us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2024-02-290000070502us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-02-290000070502us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2023-05-310000070502us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-05-310000070502us-gaap:FairValueMeasurementsNonrecurringMember2024-02-290000070502us-gaap:FairValueMeasurementsNonrecurringMember2023-05-310000070502us-gaap:VariableInterestEntityPrimaryBeneficiaryMembernruc:NationalCooperativeServicesCorporationMember2024-02-29nruc:directornruc:vote0000070502us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2024-02-290000070502us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2023-05-310000070502us-gaap:VariableInterestEntityPrimaryBeneficiaryMemberus-gaap:RevolvingCreditFacilityMembernruc:NationalCooperativeServicesCorporationMember2023-05-310000070502us-gaap:VariableInterestEntityPrimaryBeneficiaryMembernruc:NationalCooperativeServicesCorporationMembernruc:RevolvingTermLoanMember2023-05-310000070502nruc:RuralTelephoneFinanceCooperativeMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMemberus-gaap:RevolvingCreditFacilityMember2023-05-310000070502nruc:RuralTelephoneFinanceCooperativeMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMembernruc:RevolvingTermLoanMember2023-05-310000070502us-gaap:VariableInterestEntityPrimaryBeneficiaryMemberus-gaap:RevolvingCreditFacilityMembernruc:NationalCooperativeServicesCorporationMember2024-02-290000070502us-gaap:VariableInterestEntityPrimaryBeneficiaryMembernruc:NationalCooperativeServicesCorporationMembernruc:RevolvingTermLoanMember2024-02-2900000705022023-06-012023-11-30nruc:segment0000070502nruc:NationalRuralUtilitiesCooperativeFinanceCorporationMemberus-gaap:OperatingSegmentsMember2023-12-012024-02-290000070502us-gaap:OperatingSegmentsMembernruc:NationalCooperativeServicesCorporationAndRuralTelephoneFinanceCooperativeMember2023-12-012024-02-290000070502us-gaap:OperatingSegmentsMember2023-12-012024-02-290000070502us-gaap:MaterialReconcilingItemsMember2023-12-012024-02-290000070502us-gaap:IntersegmentEliminationMember2023-12-012024-02-290000070502nruc:NationalRuralUtilitiesCooperativeFinanceCorporationMemberus-gaap:InterestRateSwapMemberus-gaap:OperatingSegmentsMember2023-12-012024-02-290000070502us-gaap:InterestRateSwapMemberus-gaap:OperatingSegmentsMembernruc:NationalCooperativeServicesCorporationAndRuralTelephoneFinanceCooperativeMember2023-12-012024-02-290000070502us-gaap:InterestRateSwapMemberus-gaap:OperatingSegmentsMember2023-12-012024-02-290000070502us-gaap:MaterialReconcilingItemsMemberus-gaap:InterestRateSwapMember2023-12-012024-02-290000070502us-gaap:InterestRateSwapMemberus-gaap:IntersegmentEliminationMember2023-12-012024-02-290000070502nruc:NationalRuralUtilitiesCooperativeFinanceCorporationMemberus-gaap:OperatingSegmentsMember2022-12-012023-02-280000070502us-gaap:OperatingSegmentsMembernruc:NationalCooperativeServicesCorporationAndRuralTelephoneFinanceCooperativeMember2022-12-012023-02-280000070502us-gaap:OperatingSegmentsMember2022-12-012023-02-280000070502us-gaap:MaterialReconcilingItemsMember2022-12-012023-02-280000070502us-gaap:IntersegmentEliminationMember2022-12-012023-02-280000070502nruc:NationalRuralUtilitiesCooperativeFinanceCorporationMemberus-gaap:InterestRateSwapMemberus-gaap:OperatingSegmentsMember2022-12-012023-02-280000070502us-gaap:InterestRateSwapMemberus-gaap:OperatingSegmentsMembernruc:NationalCooperativeServicesCorporationAndRuralTelephoneFinanceCooperativeMember2022-12-012023-02-280000070502us-gaap:InterestRateSwapMemberus-gaap:OperatingSegmentsMember2022-12-012023-02-280000070502us-gaap:MaterialReconcilingItemsMemberus-gaap:InterestRateSwapMember2022-12-012023-02-280000070502us-gaap:InterestRateSwapMemberus-gaap:IntersegmentEliminationMember2022-12-012023-02-280000070502nruc:NationalRuralUtilitiesCooperativeFinanceCorporationMemberus-gaap:OperatingSegmentsMember2023-06-012024-02-290000070502us-gaap:OperatingSegmentsMembernruc:NationalCooperativeServicesCorporationAndRuralTelephoneFinanceCooperativeMember2023-06-012024-02-290000070502us-gaap:OperatingSegmentsMember2023-06-012024-02-290000070502us-gaap:MaterialReconcilingItemsMember2023-06-012024-02-290000070502us-gaap:IntersegmentEliminationMember2023-06-012024-02-290000070502nruc:NationalRuralUtilitiesCooperativeFinanceCorporationMemberus-gaap:InterestRateSwapMemberus-gaap:OperatingSegmentsMember2023-06-012024-02-290000070502us-gaap:InterestRateSwapMemberus-gaap:OperatingSegmentsMembernruc:NationalCooperativeServicesCorporationAndRuralTelephoneFinanceCooperativeMember2023-06-012024-02-290000070502us-gaap:InterestRateSwapMemberus-gaap:OperatingSegmentsMember2023-06-012024-02-290000070502us-gaap:MaterialReconcilingItemsMemberus-gaap:InterestRateSwapMember2023-06-012024-02-290000070502us-gaap:InterestRateSwapMemberus-gaap:IntersegmentEliminationMember2023-06-012024-02-290000070502nruc:NationalRuralUtilitiesCooperativeFinanceCorporationMemberus-gaap:OperatingSegmentsMember2024-02-290000070502us-gaap:OperatingSegmentsMembernruc:NationalCooperativeServicesCorporationAndRuralTelephoneFinanceCooperativeMember2024-02-290000070502us-gaap:OperatingSegmentsMember2024-02-290000070502us-gaap:MaterialReconcilingItemsMember2024-02-290000070502us-gaap:IntersegmentEliminationMember2024-02-290000070502nruc:NationalRuralUtilitiesCooperativeFinanceCorporationMemberus-gaap:OperatingSegmentsMember2022-06-012023-02-280000070502us-gaap:OperatingSegmentsMembernruc:NationalCooperativeServicesCorporationAndRuralTelephoneFinanceCooperativeMember2022-06-012023-02-280000070502us-gaap:OperatingSegmentsMember2022-06-012023-02-280000070502us-gaap:MaterialReconcilingItemsMember2022-06-012023-02-280000070502us-gaap:IntersegmentEliminationMember2022-06-012023-02-280000070502nruc:NationalRuralUtilitiesCooperativeFinanceCorporationMemberus-gaap:InterestRateSwapMemberus-gaap:OperatingSegmentsMember2022-06-012023-02-280000070502us-gaap:InterestRateSwapMemberus-gaap:OperatingSegmentsMembernruc:NationalCooperativeServicesCorporationAndRuralTelephoneFinanceCooperativeMember2022-06-012023-02-280000070502us-gaap:InterestRateSwapMemberus-gaap:OperatingSegmentsMember2022-06-012023-02-280000070502us-gaap:MaterialReconcilingItemsMemberus-gaap:InterestRateSwapMember2022-06-012023-02-280000070502us-gaap:InterestRateSwapMemberus-gaap:IntersegmentEliminationMember2022-06-012023-02-280000070502nruc:NationalRuralUtilitiesCooperativeFinanceCorporationMemberus-gaap:OperatingSegmentsMember2023-02-280000070502us-gaap:OperatingSegmentsMembernruc:NationalCooperativeServicesCorporationAndRuralTelephoneFinanceCooperativeMember2023-02-280000070502us-gaap:OperatingSegmentsMember2023-02-280000070502us-gaap:MaterialReconcilingItemsMember2023-02-280000070502us-gaap:IntersegmentEliminationMember2023-02-28

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM 10-Q
__________________________________

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 29, 2024
or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             
Commission File Number: 1-7102
__________________________________
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
__________________________________
District of Columbia 52-0891669
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
20701 Cooperative Way,Dulles,
Virginia,
20166
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (703) 467-1800
__________________________________
Securities registered pursuant to Section 12(b) of the Act:
 
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
7.35% Collateral Trust Bonds, due 2026 NRUC 26New York Stock Exchange
5.50% Subordinated Notes, due 2064NRUCNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x      No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes x      No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨     Accelerated filer ¨     Non-accelerated filer x     Smaller reporting company ¨     Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No x
The Registrant is a tax-exempt cooperative and therefore does not issue capital stock.





TABLE OF CONTENTS
  Page

i

CROSS REFERENCE INDEX OF MD&A TABLES


Table DescriptionPage
1Net Income and TIER
2Adjusted Net Income and Adjusted TIER
3Average Balances, Interest Income/Interest Expense and Average Yield/Cost
4Rate/Volume Analysis of Changes in Interest Income/Interest Expense11 
5
Non-Interest Income (Loss)
14 
6Derivative Gains (Losses)14 
7Comparative Swap Curves15 
8Non-Interest Expense16 
9Debt—Total Debt Outstanding18 
10Debt—Member Investments19 
11Equity20 
12Loans—Loan Portfolio Security Profile23 
13Loans—Loan Exposure to 20 Largest Borrowers24 
14Allowance for Credit Losses by Borrower Member Class and Evaluation Methodology27 
15Available Liquidity30 
16Liquidity Coverage Ratios31 
17Committed Bank Revolving Line of Credit Agreements33 
18Short-Term Borrowings—Funding Sources34 
19Long-Term and Subordinated Debt—Issuances and Repayments35 
20
Long-Term and Subordinated Debt—Scheduled Principal Maturities and Amortization
35 
21Collateral Pledged36 
22Loans—Unencumbered Loans37 
23Liquidity—Projected Long-Term Sources and Uses of Funds38 
24Credit Ratings38 
25Interest Rate Sensitivity Analysis40 
26Adjusted Net Income43 
27TIER and Adjusted TIER43 
28Adjusted Liabilities and Equity44 
29Debt-to-Equity Ratio and Adjusted Debt-to-Equity Ratio44 
30Members’ Equity45 


ii

PART I—FINANCIAL INFORMATION

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for the quarterly period ended February 29, 2024 (“this Report”) contains certain statements that are considered “forward-looking statements” as defined in and within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not represent historical facts or statements of current conditions. Instead, forward-looking statements represent management’s current beliefs and expectations, based on certain assumptions and estimates made by, and information available to, management at the time the statements are made, regarding our future plans, strategies, operations, financial results or other events and developments, many of which, by their nature, are inherently uncertain and outside our control. Forward-looking statements are generally identified by the use of words such as “intend,” “plan,” “may,” “should,” “will,” “project,” “estimate,” “anticipate,” “believe,” “expect,” “continue,” “potential,” “opportunity” and similar expressions, whether in the negative or affirmative. All statements about future expectations or projections, including statements about loan volume, the adequacy of the allowance for credit losses, operating income and expenses, leverage and debt-to-equity ratios, borrower financial performance, impaired loans, and sources and uses of liquidity, are forward-looking statements. Although we believe the expectations reflected in our forward-looking statements are based on reasonable assumptions, actual results and performance may differ materially from our forward-looking statements. Therefore, you should not place undue reliance on any forward-looking statement and should consider the risks and uncertainties that could cause our current expectations to vary from our forward-looking statements, including, but not limited to, legislative changes that could affect our tax status and other matters, demand for our loan products, lending competition, changes in the quality or composition of our loan portfolio, changes in our ability to access external financing, changes in the credit ratings on our debt, valuation of collateral supporting impaired loans, charges associated with our operation or disposition of foreclosed assets, nonperformance of counterparties to our derivative agreements, economic conditions and regulatory or technological changes within the rural electric industry, the costs and impact of legal or governmental proceedings involving us or our members, general economic conditions, governmental monetary and fiscal policies, the occurrence and effect of natural disasters, including severe weather events or public health emergencies, and the factors listed and described under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023 (“2023 Form 10-K”), as well as any risk factors identified under “Part II—Item 1A. Risk Factors” in this Report. Forward-looking statements speak only as of the date they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect the impact of events, circumstances or changes in expectations that arise after the date any forward-looking statement is made.

INTRODUCTION

As of February 29, 2024, our financial statements included the consolidated accounts of National Rural Utilities Cooperative Finance Corporation (“CFC”) and National Cooperative Services Corporation (“NCSC”). On December 1, 2023, Rural Telephone Finance Cooperative (“RTFC”), which was consolidated into our financial statements in prior periods, completed the sale of its business to NCSC (hereon referred to as the “RTFC sale transaction”). The sale was accounted for pursuant to ASC 805-50 “Transactions between Entities under Common Control.” Following the RTFC sale transaction, our principal operations are currently organized for management reporting purposes into two business segments, which are based on the accounts of each of the legal entities included in our consolidated financial statements: CFC and NCSC. We provide additional information on the RTFC sale transaction under “Note 1—Summary of Significant Accounting Policies.”

CFC is a member-owned, nonprofit finance cooperative association with a principal purpose of providing financing to its members to supplement the loan programs of the Rural Utilities Service (“RUS”) of the United States Department of Agriculture (“USDA”). CFC extends loans to its rural electric members for construction, acquisitions, system and facility repairs and maintenance, enhancements and ongoing operations to support the goal of electric distribution and generation and transmission (“power supply”) systems of providing reliable, affordable power to the customers they service. CFC also provides its members and associates with credit enhancements in the form of letters of credit and guarantees of debt obligations. As a Section 501(c)(4) tax-exempt, member-owned cooperative, CFC’s objective is not to maximize profit, but rather to offer members cost-based financial products and services. The interest rates on lending products offered to our
1

member borrowers reflect our funding costs plus a spread to cover operating expenses and estimated credit losses, while also generating sufficient earnings to cover interest owed on our debt obligations and achieve certain financial target goals. Because CFC is a tax-exempt cooperative, we cannot issue equity securities as a source of funding. CFC’s primary funding sources consist of a combination of public and private issuances of debt securities, member investments and retained equity.

NCSC is a member-owned taxable cooperative that is permitted to provide financing to two types of members: NCSC electric and NCSC telecommunication. NCSC electric members consist of members of CFC, government or quasi-government entities which own electric utility systems that meet the Rural Electrification Act definition of “rural,” and for-profit and nonprofit entities that are owned, operated or controlled by, or provide significant benefits to certain members of CFC. NCSC telecommunication members, formerly RTFC members, consist of rural telecommunications members and their affiliates. See “Item 1. Business” in our 2023 Form 10-K for additional information on the business structure, principal purpose, members and core business activities of each of these classes of members. Unless stated otherwise, references to “we,” “our” or “us” relate to CFC and its consolidated entities. All references to members within this document include members, associates and affiliates of CFC and its consolidated entities, except where indicated otherwise.

The following MD&A is intended to enhance the understanding of our consolidated financial statements by providing material information that we believe is relevant in evaluating our results of operations, financial condition and liquidity and the potential impact of material known events or uncertainties that, based on management’s assessment, are reasonably likely to cause the financial information included in this Report not to be necessarily indicative of our future financial performance. Management monitors a variety of key indicators and metrics to evaluate our business performance. We discuss these key measures and factors influencing changes from period to period. Our MD&A is provided as a supplement to, and should be read in conjunction with, the unaudited consolidated financial statements included in this Report, our audited consolidated financial statements and related notes for the fiscal year ended May 31, 2023 (“fiscal year 2023”) included in our 2023 Form 10-K and additional information, including the risk factors discussed under “Item 1A. Risk Factors,” contained in our 2023 Form 10-K, as well as additional information contained elsewhere in this Report.

Our fiscal year begins on June 1 and ends on May 31. Reference to “Q3 FY2024” and “YTD FY2024” refer to three and nine months ended February 29, 2024, respectively. Reference to “Q3 FY2023” and “YTD FY2023” refer to three and nine months ended February 28, 2023, respectively.

Non-GAAP Financial Measures

Our reported financial results are determined in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) and are subject to period-to-period volatility due to changes in market conditions and differences in the way our financial assets and liabilities are accounted for under U.S. GAAP. Our financial assets and liabilities expose us to interest-rate risk, therefore we use derivatives, primarily interest rate swaps, to economically hedge and manage the interest-rate sensitivity mismatch between our financial assets and liabilities. We are required under U.S. GAAP to carry derivatives at fair value on our consolidated balance sheets; however, the financial assets and liabilities for which we use derivatives to economically hedge are carried at amortized cost. Changes in interest rates and the shape of the swap curve result in periodic fluctuations in the fair value of our derivatives, which may cause volatility in our earnings because we do not apply hedge accounting for our interest rate swaps. As a result, the mark-to-market changes in our interest rate swaps are recorded in earnings. The majority of our derivative portfolio consists of pay-fixed swaps with longer maturities, leading to derivative losses when interest rates decline and derivative gains when interest rates rise. This earnings volatility generally is not indicative of the underlying economics of our business, as the derivative forward fair value gains or losses recorded each period may or may not be realized over time, depending on the terms of our derivative instruments and future changes in market conditions that impact the periodic cash settlement amounts of our interest rate swaps.

Therefore, management uses non-GAAP financial measures, which we refer to as “adjusted” measures, to evaluate financial performance. Our key non-GAAP financial measures are adjusted net income, adjusted net interest income, adjusted interest expense, adjusted net interest yield, adjusted times interest earned ratio (“TIER”), adjusted debt-to-equity ratio and members’ equity. The most comparable U.S. GAAP financial measures are net income, net interest income, interest expense, net interest yield, TIER, debt-to-equity ratio, and CFC equity, respectively. The primary adjustments we make to calculate these non-GAAP financial measures consist of (i) adjusting interest expense and net interest income to include the impact of net periodic derivative cash settlements income (expense) amounts; (ii) adjusting net income, total liabilities and total equity to exclude the non-cash impact of the accounting for derivative financial instruments; (iii) adjusting total
2

liabilities to exclude the amount that funds CFC member loans guaranteed by RUS, subordinated deferrable debt and members’ subordinated certificates; (iv) adjusting total equity to include subordinated deferrable debt and members’ subordinated certificates and exclude cumulative derivative forward value gains and losses and accumulated other comprehensive income (“AOCI”); and (v) adjusting CFC equity to exclude derivative forward value gains and losses and AOCI.

We believe our non-GAAP financial measures, which should not be considered in isolation or as a substitute for measures determined in conformity with U.S. GAAP, provide meaningful information and are useful to investors because management evaluates performance based on these metrics for purposes of (i) establishing short- and long-term performance goals; (ii) budgeting and forecasting; (iii) comparing period-to-period operating results, analyzing changes in results and identifying potential trends; and (iv) making compensation decisions. In addition, certain of the financial covenants in our committed bank revolving line of credit agreements and debt indentures are based on non-GAAP financial measures, as the forward fair value gains and losses related to our interest rate swaps that are excluded from our non-GAAP financial measures do not affect our cash flows, liquidity or ability to service our debt. Our non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated. We provide a reconciliation of our non-GAAP adjusted measures to the most directly comparable U.S. GAAP measures in the section “Non-GAAP Financial Measures and Reconciliations.”

EXECUTIVE SUMMARY

Reported Results

Net Income and TIER

The table below shows our net income and TIER for the periods presented and the variance between these periods. We provide a more detailed discussion of our reported results under the section “Consolidated Results of Operations.”

Table 1: Net Income and TIER

(Dollars in thousands)Q3 FY2024Q3 FY2023
Change
YTD FY2024YTD FY2023
Change
Net income
$31,189 $163,217 $(132,028)$407,508 $514,855 $(107,347)
TIER
1.091.58(0.49)1.411.70(0.29)

Q3 FY2024 versus Q3 FY2023

The decrease in net income was primarily driven by:
An unfavorable shift from gains to losses recorded in our derivative portfolio of $121 million, primarily attributable to decreases in interest rates across the entire swap curve during Q3 FY2024. In comparison, the interest rates across the swap curve increased during Q3 FY2023;
A decrease in net interest income of $7 million, attributable to a decrease in the net interest yield of 14 basis points, or 16%, to 0.74%, partially offset by an increase in average interest-earning assets of $2,266 million, or 7%;
A reduction in the benefit for credit losses of $5 million. We recorded a benefit for credit losses of $6 million for Q3 FY2024 compared to $11 million for Q3 FY2023, resulting primarily from decreases in the asset-specific allowance for both periods; and
An increase in operating and other non-interest expenses of $5 million;
Partially offset by:
A favorable shift from losses to gains recorded on our investment securities of $6 million, primarily due to period-to-period market fluctuations in fair value.

3

YTD FY2024 versus YTD FY2023

The decrease in net income was primarily driven by:
A decrease in derivative gains of $64 million, primarily attributable to less pronounced increases in the medium- and longer-term swap interest rates during YTD FY2024 compared to YTD FY2023;
A decrease in net interest income of $53 million, attributable to a decrease in the net interest yield of 28 basis points, or 27%, to 0.76%, partially offset by an increase in average interest-earning assets of $2,243 million, or 7%; and
An increase in operating and other non-interest expenses of $16 million;
Partially offset by:
A favorable shift from provision to benefit for credit losses of $9 million. We recorded a benefit for credit losses of $5 million for YTD FY2024, resulting primarily from a decrease in the asset-specific allowance, partially offset by an increase in the collective allowance due to loan portfolio growth. In comparison, we recorded a provision for credit losses of $4 million for YTD FY2023, driven primarily by increases in the collective allowance and in the asset-specific allowance;
A favorable shift from losses to gains recorded on our investment securities of $14 million, primarily due to period-to-period market fluctuations in fair value; and an increase in fee and other income of $3 million.

The decreases in TIER for Q3 FY2024 and YTD FY2024, compared to Q3 FY2023 and YTD FY2023, were primarily driven by increased interest expense during Q3 FY2024 and YTD FY2024.

Debt-to-Equity Ratio

Our debt-to-equity ratio decreased to 11.52 as of February 29, 2024, from 12.14 as of May 31, 2023, primarily due to an increase in equity resulting from our reported net income of $408 million for YTD FY2024, which was partially offset by a decrease in equity of $10 million from CFCs deconsolidation of RTFC and $113 million from CFC Board of Directors’ authorized patronage capital retirements, of which $72 million was paid to members in September 2023 and $41 million was paid from CFC to RTFC in December 2023 in connection with the RTFC sale transaction, which is discussed further under “Note 1—Summary of Significant Accounting Policies.”

Non-GAAP Adjusted Results

Adjusted Net Income and Adjusted TIER

The table below shows our adjusted net income and adjusted TIER for the periods presented and the variance between these periods. Our financial goals focus on earning an annual minimum adjusted TIER of 1.10. We provide a more detailed discussion of our non-GAAP adjusted results under the section “Consolidated Results of Operations.”

Table 2: Adjusted Net Income and Adjusted TIER

(Dollars in thousands)Q3 FY2024Q3 FY2023
Change
YTD FY2024YTD FY2023
Change
Adjusted Net income
$88,006 $79,543 $8,463 $224,136 $184,820 $39,316 
Adjusted TIER
1.291.30(0.01)1.251.26(0.01)

Q3 FY2024 versus Q3 FY2023

The increase in adjusted net income was primarily driven by:
An increase in adjusted net interest income of $13 million, driven by the combined impact of an increase in average interest-earning assets of $2,266 million, or 7%, and an increase in the adjusted net interest yield of 7 basis points, or 6%, to 1.18%; and
A favorable shift from losses to gains recorded on our investment securities of $6 million;
4

Partially offset by:
A reduction in the benefit for credit losses of $5 million; and
An increase in operating and other non-interest expenses of $5 million.

YTD FY2024 versus YTD FY2023

The increase in adjusted net income was primarily driven by:
An increase in adjusted net interest income of $29 million, driven by the combined impact of an increase in average interest-earning assets of $2,243 million, or 7%, and an increase in the adjusted net interest yield of 4 basis points, or 4%, to 1.13%;
A favorable shift from losses to gains recorded on our investment securities of $14 million;
A favorable shift from provision to benefit for credit losses of $9 million; and an increase in fee and other income of $3 million;
Partially offset by:
An increase in operating and other non-interest expenses of $16 million.

Adjusted Debt-to-Equity Ratio

Our financial goals focus on maintaining an adjusted debt-to-equity ratio at approximately 6-to-1 or below. The adjusted debt-to-equity ratio increased to 6.29 as of February 29, 2024 from 6.04 as of May 31, 2023, due to an increase in adjusted liabilities resulting from additional borrowings to fund growth in our loan portfolio, partially offset by an increase in adjusted equity. The increase in adjusted equity was primarily due to our adjusted net income of $224 million for YTD FY2024, partially offset by a decrease in equity of $10 million from CFCs deconsolidation of RTFC and $113 million from CFC Board of Directors’ authorized patronage capital retirements, as discussed above.

Lending and Credit Quality

We segregate our loan portfolio into segments based on the borrower member class, which consists of CFC distribution, CFC power supply, CFC statewide and associate, NCSC electric and NCSC telecommunications (“telecom”). Prior to the RTFC sale transaction on December 1, 2023, NCSC electric and NCSC telecom were referred to as NCSC and RTFC, respectively.

Loans to members totaled $34,412 million as of February 29, 2024, an increase of $1,880 million, or 6%, from May 31, 2023, reflecting net increases in long-term and line of credit loans of $1,473 million and $407 million, respectively. Our loan portfolio composition remained largely unchanged from May 31, 2023 with 78% of loans outstanding to CFC distribution borrowers, 16% to CFC power supply borrowers, 3% to NCSC electric borrowers, 2% to NCSC telecom borrowers, and 1% to CFC statewide and associate borrowers as of February 29, 2024.

We believe the overall credit quality of our loan portfolio remained strong as of February 29, 2024. We had no loan charge-offs or recoveries during Q3 FY2024 and Q3 FY2023. We recorded $1 million in net loan recoveries to previously charged-off loan amounts during YTD FY2024. In comparison, we experienced net charge-offs totaling $15 million during YTD FY2023, which resulted in an annualized net charge-off rate of 0.06% for YTD FY2023.

We had one loan totaling $85 million classified as nonperforming as of February 29, 2024. In comparison, we had two loans totaling $89 million classified as nonperforming as of May 31, 2023. The reduction was due to the receipt of $4 million in payments to pay off one nonperforming loan. In March 2024, we received a $36 million payment on the outstanding nonperforming loan, which reduced its balance to $49 million as of the date of this Report.

Our allowance for credit losses and allowance coverage ratio decreased to $49 million and 0.14%, respectively, as of February 29, 2024, from $53 million and 0.16%, respectively, as of May 31, 2023. The $4 million decrease in the allowance for credit losses reflected a reduction in the asset-specific allowance of $8 million, partially offset by an increase in the collective allowance of $4 million.

5

Financing and Liquidity

Total debt outstanding increased $1,542 million, or 5%, to $32,541 million as of February 29, 2024, primarily due to borrowings to fund the increase in loans to members. We issued an aggregate principal amount of long-term dealer medium-term notes totaling $1,850 million during Q3 FY2024, of which $1,550 million was at an average fixed interest rate of 4.87% with an average term of five years and $300 million was at a floating interest rate with a term of three years. We also issued $100 million of 7.125% subordinated deferrable debt due in 2053 during Q3 FY2024. Outstanding dealer commercial paper was $899 million as of February 29, 2024.

During YTD FY2024, Fitch Ratings (“Fitch”), S&P Global Inc.(“S&P”) and Moody’s Investors Service (“Moody’s”) affirmed CFC’s credit ratings and stable outlook.

Our available liquidity consists of cash and cash equivalents, investments in debt securities and availability under committed bank revolving line of credit agreements, committed loan facilities under the USDA Guaranteed Underwriter Program (“Guaranteed Underwriter Program”), and a revolving note purchase agreement with the Federal Agricultural Mortgage Corporation (“Farmer Mac”). As of February 29, 2024, our available liquidity totaled $6,595 million and was $358 million below our total scheduled debt obligations over the next 12 months of $6,953 million. In addition to our existing available liquidity, we expect to receive $1,535 million from scheduled long-term loan principal payments over the next 12 months.

We believe we can continue to roll over our member short-term investments of $3,206 million based on our expectation that our members will continue to reinvest their excess cash primarily in short-term investment products offered by CFC. Our members historically have maintained a relatively stable level of short-term investments in CFC. Member short-term investments in CFC have averaged $3,543 million over the last 12 fiscal quarter-end reporting periods. Our available liquidity as of February 29, 2024 was $2,848 million in excess of, or 1.8 times over, our total scheduled debt obligations, excluding member short-term investments, over the next 12 months of $3,747 million.

Outlook

As further described below in the “Liquidity Risk—Projected Near-Term Sources and Uses of Funds” section, we currently anticipate net long-term loan growth of $1,847 million over the next 12 months. We also expect that our variable-rate line of credit loans outstanding will remain at approximately the current level over the same period.

In March 2024, the Federal Open Market Committee (“FOMC”) of the Federal Reserve signaled the expectation of no additional increases in the federal funds rate. The FOMC expects the U.S. economy to remain strong in 2024, with the median projected Gross Domestic Product (“GDP”) growth rate at 2.1% in 2024, up from 1.4% in its December 2023 projection. In addition, the Federal Reserve revised higher its inflation expectations and lowered its expected unemployment rate in 2024. Despite an improved economic outlook and inflation remaining above the 2% long-term target, the FOMC projects 75 basis points of federal funds rate cuts in 2024, bringing the target rate to 4.6% by December 31, 2024. Consensus market outlook for interest rates indicates declining interest rates across the yield curve in 2024. Although the yield curve is expected to remain inverted throughout calendar year 2024, given the expected drop in short-term interest rates, the yield curve inversion is expected to narrow in 2024.

Projected Reported Results

Based on our current forecast assumptions, including the yield curve forecast noted above, we project:
A slight increase in our reported net interest income. However, we expect a decrease in our reported net interest yield over the next 12 months compared to the 12-month period ended February 29, 2024. See “Market Risk—Interest Rate Risk Assessment” for an additional discussion.

Projected Non-GAAP Adjusted Results

Based on our current forecast assumptions, including the yield curve forecast noted above, we project:
Decreases in our adjusted net interest income and adjusted net interest yield over the next 12 months relative to the 12-month period ended February 29, 2024, primarily due to the current yield curve assumptions and our balance sheet position. See “Market Risk—Interest Rate Risk Assessment” for an additional discussion.
6

Decreases in our adjusted net income and adjusted TIER over the next 12 months, primarily attributable to increased operating expenses and a projected decrease in adjusted net interest income.
Our adjusted debt-to-equity ratio will remain above our target of 6-to-1, primarily due to the projected increase in total debt outstanding to fund anticipated growth in our loan portfolio.

As stated above, we exclude the impact of unrealized derivative forward fair value gains and losses from our non-GAAP financial measures. As the majority of our swaps are long-term with an average remaining life of approximately 15 years as of February 29, 2024, the unrealized periodic derivative forward value gains and losses are largely based on future expected changes in longer-term interest rates, which we are unable to accurately predict for each reporting period over the next 12 months. Due to the difficulty in predicting these unrealized amounts, we are unable to provide without unreasonable effort a reconciliation of our forward-looking adjusted financial measures to the most directly comparable GAAP financial measures.

CONSOLIDATED RESULTS OF OPERATIONS

This section provides a comparative discussion of our consolidated results of operations between Q3 FY2024 and Q3 FY2023, and between YTD FY2024 and YTD FY2023. Following this section, we provide a discussion and analysis of material changes between amounts reported on our consolidated balance sheets as of February 29, 2024 and May 31, 2023. You should read these sections together with our “Executive Summary—Outlook” where we discuss trends and other factors that we expect will affect our future results of operations.

Net Interest Income

Net interest income, which is our largest source of revenue, represents the difference between the interest income earned on our interest-earning assets and the interest expense on our interest-bearing liabilities. Our net interest yield represents the difference between the yield on our interest-earning assets and the cost of our interest-bearing liabilities plus the impact of non-interest bearing funding. We expect net interest income and our net interest yield to fluctuate based on changes in interest rates and changes in the amount and composition of our interest-earning assets and interest-bearing liabilities. We do not fund each individual loan with specific debt. Rather, we attempt to minimize costs and maximize efficiency by proportionately funding large aggregated amounts of loans.

Table 3 presents average balances for each major category of our interest-earning assets and interest-bearing liabilities, the interest income earned or interest expense incurred, and the average yield or cost. Table 3 also presents non-GAAP adjusted interest expense, adjusted net interest income and adjusted net interest yield, which reflect the inclusion of net accrued periodic derivative cash settlements expense in interest expense. We provide reconciliations of our non-GAAP financial measures to the most comparable U.S. GAAP financial measures under “Non-GAAP Financial Measures and Reconciliations.”

7

Table 3: Average Balances, Interest Income/Interest Expense and Average Yield/Cost

Q3 FY2024Q3 FY2023
(Dollars in thousands)Average BalanceInterest Income/ExpenseAverage Yield/CostAverage BalanceInterest Income/ExpenseAverage Yield/Cost
Assets:
Long-term fixed-rate loans(1)
$29,833,708 $324,528 4.38 %$27,985,457 $288,200 4.18 %
Long-term variable-rate loans860,320 15,296 7.15 916,868 13,648 6.04 
Line of credit loans3,562,227 62,298 7.03 3,165,591 45,653 5.85 
Other, net(2)
 (431) — (389)— 
Total loans34,256,255 401,691 4.72 32,067,916 347,112 4.39 
Cash, time deposits and investment securities
910,430 10,144 4.48 833,024 6,180 3.01 
Total interest-earning assets$35,166,685 $411,835 4.71 %$32,900,940 $353,292 4.35 %
Other assets, less allowance for credit losses(3)
1,160,625 1,041,947 
Total assets(3)
$36,327,310 $33,942,887 
Liabilities:
Commercial paper$3,051,437 $42,348 5.58 %$2,901,375 $31,943 4.47 %
Other short-term borrowings1,637,296 21,682 5.33 2,047,112 18,696 3.70 
Short-term borrowings(4)
4,688,733 64,030 5.49 4,948,487 50,639 4.15 
Medium-term notes7,968,782 84,224 4.25 6,423,373 57,056 3.60 
Collateral trust bonds 7,069,156 67,561 3.84 7,614,181 70,859 3.77 
Guaranteed Underwriter Program notes payable
6,869,399 54,962 3.22 6,378,600 46,477 2.96 
Farmer Mac notes payable3,894,223 42,497 4.39 3,225,962 30,469 3.83 
Other notes payable2,112 28 5.33 2,557 15 2.38 
Subordinated deferrable debt 1,209,070 20,411 6.79 986,642 12,881 5.29 
Subordinated certificates1,201,360 13,306 4.45 1,228,253 13,313 4.40 
Total interest-bearing liabilities$32,902,835 $347,019 4.24 %$30,808,055 $281,709 3.71 %
Other liabilities(3)
544,225 614,711 
Total liabilities(3)
33,447,060 31,422,766 
Total equity(3)
2,880,250 2,520,121 
Total liabilities and equity(3)
$36,327,310 $33,942,887 
Net interest spread(5)
0.47 %0.64 %
Impact of non-interest bearing funding(6)
0.27 0.24 
Net interest income/net interest yield(7)
$64,816 0.74 %$71,583 0.88 %
Adjusted net interest income/adjusted net interest yield:
Interest income$411,835 4.71 %$353,292 4.35 %
Interest expense347,019 4.24 281,709 3.71 
Add: Net periodic derivative cash settlements interest income(8)
(38,342)(2.04)(18,634)(1.00)
Adjusted interest expense/adjusted average cost(9)
$308,677 3.77 %$263,075 3.46 %
Adjusted net interest spread(7)
0.94 0.89 
Impact of non-interest bearing funding(6)
0.24 0.22 
Adjusted net interest income/adjusted net interest yield(10)
$103,158 1.18 %$90,217 1.11 %



8

YTD FY2024YTD FY2023
(Dollars in thousands)Average BalanceInterest Income/ExpenseAverage Yield/CostAverage BalanceInterest Income/ExpenseAverage Yield/Cost
Assets:
Long-term fixed-rate loans(1)
$29,170,484 $937,316 4.29 %$27,592,829 $845,270 4.10 %
Long-term variable-rate loans924,997 49,117 7.09 833,137 29,965 4.81 
Line of credit loans3,330,579 174,089 6.98 2,718,099 94,533 4.65 
Other, net(2)
 (1,253) — (1,139)— 
Total loans33,426,060 1,159,269 4.63 31,144,065 968,629 4.16 
Cash, time deposits and investment securities
763,748 22,509 3.94 803,120 15,835 2.64 
Total interest-earning assets$34,189,808 $1,181,778 4.62 %$31,947,185 $984,464 4.12 %
Other assets, less allowance for credit losses(3)
1,104,821 938,222 
Total assets(3)
$35,294,629 $32,885,407 
Liabilities:
Commercial paper$2,524,302 $103,923 5.50 %$2,886,202 $70,735 3.28 %
Other short-term borrowings1,820,469 71,056 5.21 2,160,816 45,299 2.80 
Short-term borrowings(4)
4,344,771 174,979 5.38 5,047,018 $116,034 3.07 
Medium-term notes7,372,069 222,095 4.02 5,991,902 134,477 3.00 
Collateral trust bonds
7,387,453 210,911 3.81 7,295,834 199,421 3.65 
Guaranteed Underwriter Program notes payable6,801,552 161,862 3.18 6,236,285 133,107 2.85 
Farmer Mac notes payable3,634,622 116,259 4.27 3,086,668 74,601 3.23 
Other notes payable2,130 72 4.52 4,015 72 2.40 
Subordinated deferrable debt
1,201,501 60,831 6.76 986,589 38,656 5.24 
Subordinated certificates1,213,384 40,136 4.42 1,233,109 40,253 4.36 
Total interest-bearing liabilities$31,957,482 $987,145 4.13 %$29,881,420 $736,621 3.30 %
Other liabilities(3)
557,082 663,999 
Total liabilities(3)
32,514,564 30,545,419 
Total equity(3)
2,780,065 2,339,988 
Total liabilities and equity(3)
$35,294,629 $32,885,407 
Net interest spread(5)
0.49 %0.82 %
Impact of non-interest bearing funding(6)
0.27 0.22 
Net interest income/net interest yield(7)
$194,633 0.76 %$247,843 1.04 %
Adjusted net interest income/adjusted net interest yield:
Interest income$1,181,778 4.62 %$984,464 4.12 %
Interest expense987,145 4.13 736,621 3.30 
Add: Net periodic derivative cash settlements interest (income) expense(8)
(94,978)(1.65)(12,650)(0.22)
Adjusted interest expense/adjusted average cost(9)
$892,167 3.73 %$723,971 3.24 %
Adjusted net interest spread(7)
0.89 0.88 
Impact of non-interest bearing funding(6)
0.24 0.21 
Adjusted net interest income/adjusted net interest yield(10)
$289,611 1.13 %$260,493 1.09 %
___________________________
(1)Interest income on long-term, fixed-rate loans includes loan conversion fees, which are generally deferred and recognized as interest income using the effective interest method.
(2)Consists of late payment fees and net amortization of deferred loan fees and loan origination costs.
(3)The average balance represents average monthly balances, which is calculated based on the month-end balance as of the beginning of the reporting period and the balances as of the end of each month included in the specified reporting period.
9

(4)Short-term borrowings reported on our consolidated balance sheets consist of borrowings with an original contractual maturity of one year or less. However, short-term borrowings presented in Table 3 consist of commercial paper, select notes, daily liquidity fund notes and secured borrowings under repurchase agreements. Short-term borrowings presented on our consolidated balance sheets related to medium-term notes, Farmer Mac notes payable and other notes payable are reported in the respective category for presentation purposes in Table 3. The period-end amounts reported as short-term borrowings on our consolidated balances sheets, which are excluded from the calculation of average short-term borrowings presented in Table 3, totaled $982 million and $853 million as of February 29, 2024 and February 28, 2023, respectively.
(5)Net interest spread represents the difference between the average yield on total average interest-earning assets and the average cost of total average interest-bearing liabilities. Adjusted net interest spread represents the difference between the average yield on total average interest-earning assets and the adjusted average cost of total average interest-bearing liabilities.
(6)Includes other liabilities and equity.
(7)Net interest yield is calculated based on annualized net interest income for the period divided by total average interest-earning assets for the period.
(8)Represents the impact of net periodic contractual interest amounts on our interest rate swaps during the period. This amount is added to interest expense to derive non-GAAP adjusted interest expense. The average (benefit)/cost associated with derivatives is calculated based on the annualized net periodic swap settlement interest amount during the period divided by the average outstanding notional amount of derivatives during the period. The average outstanding notional amount of interest rate swaps was $7,568 million and $7,555 million for Q3 FY2024 and Q3 FY2023, respectively. The average outstanding notional amount of interest rate swaps was $7,675 million and $7,762 million for the YTD FY2024 and YTD FY2023, respectively.
(9)Adjusted interest expense consists of interest expense plus net periodic derivative cash settlements interest income (expense) during the period. Net periodic derivative cash settlements interest income (expense) is reported on our consolidated statements of operations as a component of derivative gains (losses). Adjusted average cost is calculated based on annualized adjusted interest expense for the period divided by total average interest-bearing liabilities during the period.
(10)Adjusted net interest yield is calculated based on annualized adjusted net interest income for the period divided by total average interest-earning assets for the period.

Table 4 displays the change in net interest income between periods and the extent to which the variance for each category of interest-earning assets and interest-bearing liabilities is attributable to: (i) changes in volume, which represents the change in the average balances of our interest-earning assets and interest-bearing liabilities or volume and (ii) changes in the rate, which represents the change in the average interest rates of these assets and liabilities. The table also presents the change in adjusted net interest income between periods.

10

Table 4: Rate/Volume Analysis of Changes in Interest Income/Interest Expense

Q3 FY2024
versus
Q3 FY2023YTD FY2024
versus
YTD FY2023
 Total
Variance Due To:(1)
Total
Variance Due To:(1)
(Dollars in thousands)VarianceVolumeRateVarianceVolumeRate
Interest income:      
Long-term fixed-rate loans$36,328 $21,599 $14,729 $92,046 $49,152 $42,894 
Long-term variable-rate loans1,648 (735)2,383 19,152 3,335 15,817 
Line of credit loans16,645 6,149 10,496 79,556 21,408 58,148 
Other, net(42) (42)(114) (114)
Total loans54,579 27,013 27,566 190,640 73,895 116,745 
Cash, time deposits and investment securities
3,964 631 3,333 6,674 (762)7,436 
Total interest income58,543 27,644 30,899 197,314 73,133 124,181 
Interest expense:  
Commercial paper10,405 1,933 8,472 33,188 (8,812)42,000 
Other short-term borrowings2,986 (3,618)6,604 25,757 (7,100)32,857 
Short-term borrowings13,391 (1,685)15,076 58,945 (15,912)74,857 
Medium-term notes27,168 14,318 12,850 87,618 31,128 56,490 
Collateral trust bonds(3,298)(4,523)1,225 11,490 2,690 8,800 
Guaranteed Underwriter Program notes payable8,485 3,994 4,491 28,755 12,199 16,556 
Farmer Mac notes payable12,028 6,619 5,409 41,658 13,324 28,334 
Other notes payable13 (3)16  (34)34 
Subordinated deferrable debt7,530 3,036 4,494 22,175 8,464 13,711 
Subordinated certificates(7)(183)176 (117)(607)490 
Total interest expense65,310 21,573 43,737 250,524 51,252 199,272 
Net interest income (expense)
$(6,767)$6,071 $(12,838)$(53,210)$21,881 $(75,091)
Adjusted net interest income:
Interest income$58,543 $27,644 $30,899 $197,314 $73,133 $124,181 
Interest expense65,310 21,573 43,737 250,524 51,252 199,272 
Net periodic derivative cash settlements interest expense (income)(2)
(19,708)(188)(19,520)(82,328)130 (82,458)
Adjusted interest expense(3)
45,602 21,385 24,217 168,196 51,382 116,814 
Adjusted net interest income$12,941 $6,259 $6,682 $29,118 $21,751 $7,367 
____________________________
(1)The changes for each category of interest income and interest expense represent changes in either average balances (volume) or average rates for both interest-earning assets and interest-bearing liabilities. We allocate the amount attributable to the combined impact of volume and rate to the rate variance.
(2)For the net periodic derivative cash settlements interest amount, the variance due to average volume represents the change in the net periodic derivative cash settlements interest amount resulting from the change in the average notional amount of derivative contracts outstanding. The variance due to average rate represents the change in the net periodic derivative cash settlements amount resulting from the net difference between the average rate paid and the average rate received for interest rate swaps during the period.
(3)See “Non-GAAP Financial Measures and Reconciliations” for additional information on our adjusted non-GAAP financial measures.

11

Reported Net Interest Income

Reported net interest income of $65 million for Q3 FY2024 decreased $7 million, or 9%, from Q3 FY2023, driven by a decrease in the net interest yield of 14 basis points, or 16%, to 0.74%, partially offset by an increase in average interest-earning assets of $2,266 million, or 7%.

Average Interest-Earning Assets: The increase in average interest-earning assets of 7% was attributable to growth in average total loans of $2,188 million, or 7%, driven primarily by an increase in average long-term fixed-rate loans of $1,848 million and an increase in average line of credit loans of $397 million, as members continued to advance loans to fund capital expenditures and for working capital purposes.

Net Interest Yield: The decrease in the net interest yield of 14 basis points, or 16%, was primarily attributable to the combined impact of an increase in our average cost of borrowings of 53 basis points to 4.24%, which was partially offset by an increase in the average yield on interest-earning assets of 36 basis points to 4.71% and an increase in the benefit from non-interest bearing funding of 3 basis points to 0.27%. Our average yield on interest-earning assets and average cost of borrowings rose mainly due to the sustained increase in the federal funds rate, which increased 75 basis points since February 28, 2023. The increase in average yields on line of credit and variable-rate loans was the primary driver for the increase in the average yield on interest-earning assets. Meanwhile, our average cost of borrowings increased due to higher interest rates on our short-term and variable-rate borrowings.

Reported net interest income of $195 million for YTD FY2024 decreased $53 million, or 21%, from YTD FY2023, driven by a decrease in the net interest yield of 28 basis points, or 27%, to 0.76%, partially offset by an increase in average interest-earning assets of $2,243 million, or 7%.

Average Interest-Earning Assets: The increase in average interest-earning assets of 7% was attributable to growth in average total loans of $2,282 million, or 7%, driven primarily by an increase in average long-term fixed-rate loans of $1,578 million and an increase in average line of credit loans of $612 million, as members continued to advance loans to fund capital expenditures and for working capital purposes.

Net Interest Yield: The decrease in the net interest yield of 28 basis points, or 27%, was primarily attributable to the combined impact of an increase in our average cost of borrowings of 83 basis points to 4.13%, which was partially offset by an increase in the average yield on interest-earning assets of 50 basis points to 4.62% and an increase in the benefit from non-interest bearing funding of 5 basis points to 0.27%. As mentioned above, the increases in the average cost of borrowings and average yield on interest-earning assets were driven by the continued increase in the federal funds rate.

Adjusted Net Interest Income

Adjusted net interest income of $103 million for Q3 FY2024 increased $13 million, or 14%, from Q3 FY2023, driven by the combined impact of an increase in average interest-earning assets of $2,266 million, or 7%, and an increase in the adjusted net interest yield of 7 basis points, or 6%, to 1.18%.

Average Interest-Earning Assets: The increase in average interest-earning assets of 7% during Q3 FY2024 was driven by the growth in average total loans of $2,188 million, or 7%, attributable primarily to the increases in average long-term fixed-rate and line of credit loans as discussed above.

Adjusted Net Interest Yield: The adjusted net interest yield increased to 1.18%, reflecting the combined impact of an increase in the average yield on interest-earning assets of 36 basis points to 4.71% and an increase in the benefit from non-interest bearing funding of 2 basis points to 0.24%, partially offset by an increase in our adjusted average cost of borrowings of 31 basis points to 3.77%. The increases in both average yield on interest-earning assets and adjusted average cost of borrowings were attributable to the continued high interest-rate environment since February 28, 2023, as discussed above.

Adjusted net interest income of $290 million for YTD FY2024 increased $29 million, or 11%, from YTD FY2023, driven by the combined impact of an increase in average interest-earning assets of $2,243 million, or 7%, and an increase in the adjusted net interest yield of 4 basis points, or 4%, to 1.13%.
12

Average Interest-Earning Assets: The increase in average interest-earning assets of 7% during YTD FY2024 was driven by the growth in average total loans of $2,282 million, or 7%, attributable primarily to increases in average long-term fixed-rate and line of credit loans as discussed above.

Adjusted Net Interest Yield: The increase in the adjusted net interest yield of 4 basis points, or 4%, reflected the combined impact of an increase in the average yield on interest-earning assets of 50 basis points to 4.62% and an increase in the benefit from non-interest bearing funding of 3 basis points to 0.24%, partially offset by an increase in our adjusted average cost of borrowings of 49 basis points to 3.73%. We discuss above the primary drivers for the increases in the average yield on interest-earning assets and adjusted average cost of borrowings.

Derivative Cash Settlements

We include the net periodic derivative cash settlements interest income (expense) amounts on our interest rate swaps in the calculation of our adjusted average cost of borrowings, which, as a result, also impacts the calculation of adjusted net interest income and adjusted net interest yield. Because our derivative portfolio consists of a higher proportion of pay-fixed swaps than receive-fixed swaps, the net periodic derivative cash settlements interest income (expense) amounts generally change based on changes in the floating interest amount received each period. When floating rates increase during the period, the floating interest amounts received on our pay-fixed swaps increase and, conversely, when floating rates decrease, the floating interest amounts received on our pay-fixed swaps decrease. We recorded net periodic derivative cash settlements interest income of $38 million for Q3 FY2024 compared with $19 million for Q3 FY2023, and net periodic derivative cash settlements interest income of $95 million for YTD FY2024 compared with $13 million for YTD FY2023. The increases in derivative cash settlements interest income were due to the higher floating rates in Q3 FY2024 and YTD FY2024, compared to Q3 FY2023 and YTD FY2023, respectively.

See “Non-GAAP Financial Measures and Reconciliations” for additional information on our non-GAAP financial measures, including a reconciliation of these measures to the most comparable U.S. GAAP financial measures.

Provision for Credit Losses

Our provision for credit losses each period is driven by changes in our measurement of lifetime expected credit losses for our loan portfolio recorded in the allowance for credit losses. Our allowance for credit losses and allowance coverage ratio was $49 million and 0.14%, respectively, as of February 29, 2024. In comparison, our allowance for credit losses and allowance coverage ratio was $53 million and 0.16%, respectively, as of May 31, 2023.

We recorded a benefit for credit losses of $6 million and $11 million for Q3 FY2024 and Q3 FY2023, respectively, primarily from reductions in the asset-specific allowances for a nonperforming CFC power supply loan attributable to increases in the expected payments on the loan for both periods.

We recorded a benefit for credit losses of $5 million for YTD FY2024, resulting from a decrease of $8 million in the asset-specific allowance for a nonperforming CFC power supply loan and a recovery of $1 million attributable to additional loan payments received from Brazos Electric Power Cooperative, Inc. (“Brazos”) and its wholly-owned subsidiary Brazos Sandy Creek Electric Cooperative Inc. (“Brazos Sandy Creek”), partially offset by an increase of $4 million in the collective allowance due to loan portfolio growth and a slight decline in the overall credit quality and risk profile of our loan portfolio.
We recorded a provision for credit losses of $4 million for YTD FY2023, driven primarily by increases in the collective allowance, primarily due to loan portfolio growth, and in the asset-specific allowance for loans to Brazos, Brazos Sandy Creek, and for a nonperforming CFC power supply loan.

We discuss our methodology for estimating the allowance for credit losses in “Note 1—Summary of Significant Accounting Policies—Allowance for Credit Losses—Current Methodology” in our 2023 Form 10-K. We also provide additional information on our allowance for credit losses below under section “Credit Risk—Allowance for Credit Losses” and “Note 5—Allowance for Credit Losses” in this Report.

13

Non-Interest Income (Loss)

Non-interest income consists of fee and other income, gains and losses on derivatives not accounted for in hedge accounting relationships and gains and losses on equity and debt investment securities, which consists of both unrealized and realized gains and losses.

Table 5 presents the components of non-interest income (loss) recorded in our consolidated statements of operations.

Table 5: Non-Interest Income (Loss)

(Dollars in thousands)Q3 FY2024Q3 FY2023YTD FY2024YTD FY2023
Non-interest income components:
Fee and other income$5,025 $5,326 $16,173 $13,548 
Derivative gains (losses)
(18,475)102,308 278,350 342,685 
Investment securities gains (losses)
4,140 (1,402)8,916 (5,574)
Total non-interest income (loss)
$(9,310)$106,232 $303,439 $350,659 

The variance in non-interest income was primarily attributable to changes in the derivative gains (losses) recognized in our consolidated statements of operations. In addition, we experienced a favorable shift from losses to gains recorded on our debt and equity investment securities of $6 million and $14 million for Q3 FY2024 and YTD FY2024, respectively, compared with Q3 FY2023 and YTD FY2023. We expect period-to-period market fluctuations in the fair value of our equity and debt investment securities, which we report together with realized gains and losses from the sale of investment securities on our consolidated statements of operations.

Derivative Gains (Losses)

As of February 29, 2024 and May 31, 2023, our derivatives portfolio included interest rate swap agreements not designated for hedge accounting, comprised of pay-fixed swaps and receive-fixed swaps, with the benchmark variable rate for the floating rate payments based on daily compounded SOFR as of February 29, 2024. Additionally, Treasury locks may be used to manage the interest rate risk associated with future debt issuance or repricing and are typically designated as cash flow hedges.

The total notional amount for our interest rate swaps was $7,345 million and $7,816 million as of February 29, 2024 and May 31, 2023, respectively. The portfolio was primarily composed of longer-dated pay-fixed swaps, which accounted for approximately 81% and 78% of the outstanding notional amount as of February 29, 2024 and May 31, 2023, respectively. Consequently, changes in medium- and longer-term swap rates generally have a more pronounced impact on the net fair value of our swap portfolio. As of February 29, 2024, the average remaining maturity of our pay-fixed and receive-fixed swaps was 18 years and two years, respectively, compared to 19 years and three years, respectively, as of February 28, 2023.

Table 6 presents the components of net derivative gains (losses) recorded in our consolidated statements of operations. Derivative cash settlements interest income (expense) represents the net periodic contractual interest amount for our interest-rate swaps during the reporting period. Derivative forward value gains (losses) represent the change in fair value of our interest rate swaps during the applicable reporting period due to changes in expected future interest rates over the remaining life of our derivative contracts.

Table 6: Derivative Gains (Losses)

(Dollars in thousands)Q3 FY2024Q3 FY2023YTD FY2024YTD FY2023
Derivative gains attributable to:
Derivative cash settlements interest income
$38,342 $18,634 $94,978 $12,650 
Derivative forward value gains (losses)
(56,817)83,674 183,372 330,035 
Derivative gains (losses)
$(18,475)$102,308 $278,350 $342,685 

14

We recorded derivative losses of $18 million for Q3 FY2024, primarily attributable to decreases in interest rates across the entire swap curve during Q3 FY2024. In comparison, we recorded derivative gains of $102 million for Q3 FY2023, attributable to increases in interest rates across the entire swap curve during the period.

We recorded derivative gains of $278 million for YTD FY2024, primarily attributable to increases in the medium- and longer-term swap interest rates during YTD FY2024. In comparison, we recorded derivative gains of $343 million for YTD FY2023, attributable to more pronounced increases in interest rates across the entire swap curve during the period.

In January 2023, we executed two Treasury lock agreements with an aggregate notional amount of $300 million to hedge interest rate risk on anticipated debt issuances. The agreements, which were scheduled to mature on December 2023, were designated as a cash flow hedge of a forecasted transaction. In February 2023, we terminated the Treasury locks and recorded a settlement gain of $8 million in AOCI. As the hedged forecasted transaction did not occur in the time period specified in the hedge documentation, we reclassified the $8 million gain from AOCI to earnings as a component of derivative gains (losses) on our consolidated statements of operations during Q3 FY2024.

We present comparative swap curves, which depict the relationship between swap rates at varying maturities, for our reported periods in Table 7 below.

Comparative Swap Curves

Table 7 below provides comparative swap curves as of February 29, 2024, November 30, 2023, May 31, 2023, February 28, 2023, November 30, 2022, and May 31, 2022.

Table 7: Comparative Swap Curves

21799
____________________________
Benchmark rates obtained from Bloomberg.
15

See “Note 9—Derivative Instruments and Hedging Activities” for additional information on our derivative instruments. Also refer to “Note 14—Fair Value Measurement” to the Consolidated Financial Statements in our 2023 Form 10-K for information on how we measure the fair value of our derivative instruments.

Non-Interest Expense

Non-interest expense consists of salaries and employee benefit expense, general and administrative expenses, gains and losses on the early extinguishment of debt and other miscellaneous expenses. Table 8 presents the components of non-interest expense recorded in our consolidated statements of operations.

Table 8: Non-Interest Expense

(Dollars in thousands)Q3 FY2024Q3 FY2023YTD FY2024YTD FY2023
Non-interest expense components:
Salaries and employee benefits$(16,706)$(14,808)$(49,126)$(42,792)
Other general and administrative expenses(13,283)(10,507)(43,878)(35,289)
Operating expenses(29,989)(25,315)(93,004)(78,081)
Losses on early extinguishment of debt(33)— (998)— 
Other non-interest expense(287)(298)(715)(975)
Total non-interest expense$(30,309)$(25,613)$(94,717)$(79,056)

Non-interest expense of $30 million and $95 million for Q3 FY2024 and YTD FY2024, respectively, increased $5 million, or 18% and $16 million, or 20%, respectively, from Q3 FY2023 and YTD FY2023, primarily attributable to an increase in operating expenses, driven by higher expenses recorded for salaries and benefits, information technology, and depreciation and amortization expenses. During the three months ended August 31, 2023 (“Q1 FY2024”), we redeemed $100 million of our $400 million subordinated deferrable debt due 2043, at par plus accrued interest. As a result, we recognized $1 million of losses on early extinguishment of debt related to the unamortized debt issuance costs.

Net Income (Loss) Attributable to Noncontrolling Interests

Net income (loss) attributable to noncontrolling interests represents 100% of the results of operations of NCSC and RTFC, as the members of NCSC and RTFC own or control 100% of the interest in their respective companies. On December 1, 2023, RTFC completed the sale of its business to NCSC and subsequently CFC concluded that it is no longer the primary beneficiary of RTFC and accordingly, deconsolidated RTFC from its consolidated financial statements. The fluctuations in net income (loss) attributable to noncontrolling interests are primarily due to changes in the fair value of NCSC’s derivative instruments recognized in NCSC’s earnings.

We recorded net loss attributable to noncontrolling interests of less than $1 million for both Q3 FY2024 and YTD FY2024. In comparison, we recorded net income attributable to noncontrolling interests of less than $1 million and $1 million for Q3 FY2023 and YTD FY2023, respectively.

CONSOLIDATED BALANCE SHEET ANALYSIS

Total assets increased $1,880 million, or 6%, to $35,892 million as of February 29, 2024, primarily due to growth in our loan portfolio. We experienced an increase in total liabilities of $1,601 million, or 5%, to $33,024 million as of February 29, 2024, largely due to the issuances of debt to fund the growth in our loan portfolio. Total equity increased $279 million to $2,868 million as of February 29, 2024, primarily attributable to our reported net income of $408 million for YTD FY2024, which was partially offset by a decrease in equity of $10 million from CFCs deconsolidation of RTFC and $113 million from CFC Board of Directors’ authorized patronage capital retirements during the period.

16

Below is a discussion of changes in the major components of our assets and liabilities during YTD FY2024. Period-end balance sheet amounts may vary from average balance sheet amounts due to liquidity and balance sheet management activities that are intended to manage our liquidity requirements and market risk exposure in accordance with our risk appetite framework.

Loan Portfolio

We segregate our loan portfolio into segments, by legal entity, based on the borrower member class, which consists of CFC distribution, CFC power supply, CFC statewide and associate, NCSC electric and NCSC telecom. We offer both long-term and line of credit loans to our borrowers. Under our long-term loan facilities, a borrower may select a fixed interest rate or a variable interest rate at the time of each loan advance. Line of credit loans are revolving loan facilities and generally have a variable interest rate. We describe and provide additional information on our member classes under “Item 1. Business—Members” and information about our loan programs and loan product types under “Item 1. Business—Loan and Guarantee Programs” in our 2023 Form 10-K.

Loans Outstanding

Loans to members totaled $34,412 million and $32,532 million as of February 29, 2024 and May 31, 2023, respectively. Loans to CFC distribution, power supply, and statewide and associate borrowers accounted for 95% and 96% of total loans to members as of February 29, 2024 and May 31, 2023, respectively. The increase in loans to members of $1,880 million, or 6%, from May 31, 2023, was primarily attributable to net increases in long-term and line of credit loans of $1,473 million and $407 million, respectively. The $407 million increase in line of credit loans was primarily attributable to funding provided for higher working capital requirements from our members and bridge loan financing. We experienced increases in CFC distribution loans, CFC power supply loans, CFC statewide and associate loans, NCSC electric and NCSC telecom loans of $1,439 million, $294 million, $58 million, $28 million and $61 million, respectively.

Long-term loan advances totaled $2,680 million during YTD FY2024, of which approximately 95% was provided to members for capital expenditures and approximately 5% was provided for other purposes, primarily business acquisitions. In comparison, long-term loan advances totaled $2,460 million during YTD FY2023, of which approximately 94% was provided to members for capital expenditures and approximately 2% was provided for the refinancing of loans made by other lenders. Of the $2,680 million total long-term loans advanced during the YTD FY2024, $2,494 million were fixed-rate loan advances with a weighted average fixed-rate term of 12 years. In comparison, of the $2,460 million total long-term loans advanced during YTD FY2023, $2,135 million were fixed-rate loan advances with a weighted average fixed-rate term of 18 years.

Our aggregate loans outstanding to CFC electric distribution cooperative members relating to broadband projects, which we started tracking in October 2017, increased to an estimated $2,867 million as of February 29, 2024, from approximately $2,355 million as of May 31, 2023.

We provide information on the credit performance and risk profile of our loan portfolio below under the section “Credit Risk—Loan Portfolio Credit Risk.” Also refer to “Note 4—Loans” for addition information on our loans to members.

Debt

We utilize both short-term borrowings and long-term debt as part of our funding strategy and asset/liability interest rate risk management. We seek to maintain diversified funding sources, including our members, affiliates, the capital markets and other funding sources, across products, programs and markets to manage funding concentrations and reduce our liquidity or debt rollover risk. Our funding sources include a variety of secured and unsecured debt securities, in a wide range of maturities, to our members, affiliates, the capital markets and other funding sources.

Debt Outstanding

Table 9 displays the composition, by product type, of our outstanding debt as of February 29, 2024 and May 31, 2023. Table 9 also displays the composition of our debt based on several additional selected attributes.

17

Table 9: Debt—Total Debt Outstanding

(Dollars in thousands)February 29, 2024May 31, 2023Change
Debt product type:
Commercial paper:
Members, at par
$1,158,861 $1,017,431 $141,430 
Dealer, net of discounts
898,956 1,293,167 (394,211)
Total commercial paper2,057,817 2,310,598 (252,781)
Select notes to members
1,285,682 1,630,799 (345,117)
Daily liquidity fund notes to members
279,548 238,329 41,219 
Medium-term notes:
Members, at par819,406 731,809 87,597 
Dealer, net of discounts8,151,720 6,131,608 2,020,112 
Total medium-term notes8,971,126 6,863,417 2,107,709 
Collateral trust bonds6,735,700 7,577,973 (842,273)
Guaranteed Underwriter Program notes payable
6,843,623 6,720,643 122,980 
Farmer Mac notes payable3,882,761 3,149,898 732,863 
Other notes payable 1,166 (1,166)
Subordinated deferrable debt1,286,872 1,283,436 3,436 
Members’ subordinated certificates:
Membership subordinated certificates628,620 628,614 
Loan and guarantee subordinated certificates323,332 348,349 (25,017)
Member capital securities246,163 246,163 — 
Total members’ subordinated certificates1,198,115 1,223,126 (25,011)
Total debt outstanding$32,541,244 $30,999,385 $1,541,859 
Security type:
Secured debt54 %56 %
Unsecured debt46 44 
Total100 %100 %
Funding source:
Members15 %16 %
Other non-capital market:
Guaranteed Underwriter Program notes payable21 22 
Farmer Mac notes payable12 10 
Total other non-capital market33