Our financial statements include the consolidated accounts of National Rural Utilities Cooperative Finance Corporation (“CFC”) and National Cooperative Services Corporation (“NCSC”).
−Removed: 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 and are discussed below.
+Added: Our principal operations are currently organized for management reporting purposes into two business segments, which are based on the accounts of the CFC and NCSC entities included in our consolidated financial statements and are discussed below.
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”) and was subsequently dissolved.
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NCSC is headquartered with CFC in Dulles, Virginia.
−Removed: CFC was established by and for the rural electric cooperative network to provide affordable financing alternatives to electric cooperatives.
+Added: CFC was established by and for the rural electric cooperative network to provide financing solutions to electric cooperatives.
While our business strategy and policies are set by the CFC Board of Directors and may be amended or revised from time to time, the fundamental goal of our overall business model is to work with our members to ensure that CFC is able to meet their financing needs, as well as provide industry expertise and strategic services to aid them in delivering affordable and reliable essential services to their communities.
Focus on Electric Lending
−Removed: As a member-owned, nonprofit finance cooperative, our primary objective is to provide our members with the credit products they need to fund their operations.
−Removed: As such, we primarily focus on lending to electric systems and securing access to capital through diverse funding sources at rates that allow us to offer cost-based credit products to our members.
−Removed: Rural electric cooperatives, most of which are not-for-profit entities, were established to provide electricity in rural areas historically deemed too costly to be served by investor-owned utilities.
−Removed: As such, our electric cooperative members experience limited competition because they generally operate in exclusive territories, the majority of which are not rate regulated.
−Removed: Loans to electric utility organizations accounted for approximately 98% and 99% of our total loans outstanding as of May 31, 2024 and 2023, respectively.
+Added: As a member-owned, nonprofit finance cooperative association, our primary objective is to provide our members with the credit products they need to fund their operations.
+Added: As such, we primarily focus on lending to electric systems and securing access to capital through diverse funding sources that allow us to offer cost-based credit products to our members.
+Added: Loans to electric utility organizations accounted for approximately 98% of our total loans outstanding as of both May 31, 2025 and 2024.
Substantially all of our electric cooperative borrowers continued to demonstrate stable operating performance and strong financial ratios as of May 31, 2025.
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We strive to maintain diversified funding sources beyond capital market offerings of debt securities.
−Removed: We offer various short- and long-term unsecured investment products to our members and their affiliates, including commercial paper, select notes,
−Removed: daily liquidity fund notes, medium-term notes and subordinated certificates.
−Removed: We continue to issue debt securities, such as secured collateral trust bonds, unsecured medium-term notes and dealer commercial paper, in the capital markets.
−Removed: We also have access to funds through bank revolving line of credit arrangements, government-guaranteed programs such as funding from the Federal Financing Bank that is guaranteed by RUS through the Guaranteed Underwriter Program of the USDA (the “Guaranteed Underwriter Program”), as well as a note purchase agreement with the Federal Agricultural Mortgage Corporation (“Farmer Mac”).
+Added: We offer various short- and long-term unsecured investment products to our members and their affiliates, including commercial paper, select notes, daily liquidity fund notes, medium-term notes and subordinated certificates.
+Added: We continue to issue debt securities, such as secured collateral trust bonds, unsecured medium-term notes, subordinated deferrable interest notes and dealer commercial paper, in the capital markets.
+Added: We also have access to funds through bank revolving line of credit arrangements, government-
+Added: guaranteed programs such as funding from the Federal Financing Bank that is guaranteed by RUS through the Guaranteed Underwriter Program of the USDA (the “Guaranteed Underwriter Program”), as well as a note purchase agreement with the Federal Agricultural Mortgage Corporation (“Farmer Mac”).
We provide additional information on our funding sources in “Item 7.
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Our consolidated membership, after taking into consideration entities that are members of both CFC and NCSC and eliminating overlapping members between CFC and NCSC, totaled 1,176 members and 540 associates as of May 31, 2025, compared with 1,167 members and 512 associates as of May 31, 2024.
−Removed: The changes in the number of consolidated members and associates were primarily due to the withdrawal of RTFC members following the RTFC sale transaction and the transfer of certain RTFC entities to associate status.
CFC lends to its members and associates and also provides credit enhancements in the form of letters of credit and guarantees of debt obligations.
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These companies must be engaged directly or indirectly in furnishing telephone services as the licensed incumbent carrier.
−Removed: associates include organizations that provide non-telephone or non-telecommunications companies and holding companies, subsidiaries and other organizations that are owned, controlled or operated by Class T members.
+Added: Class T associates include organizations that provide non-telephone or non-telecommunications companies and holding companies, subsidiaries and other organizations that are owned, controlled or operated by Class T members.
NCSC’s members and associates were as follows as of May 31, 2025.
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Line of credit loans are typically revolving facilities.
−Removed: Certain line of credit loans require the borrower to pay off the principal balance for at least five consecutive business days at least once during each 12-month period.
+Added: Certain line of credit loans require
+Added: the borrower to pay off the principal balance for at least five consecutive business days at least once during each 12-month period.
Line of credit loans are generally unsecured and may be conditional or unconditional facilities.
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CFC unconditionally guarantees full indemnification for any losses of NCSC in financing leased assets to its members pursuant to a guarantee agreement with NCSC.
+Added: Project Finance
+Added: NCSC participates with other lenders on a syndicated basis in the origination of financing focused on power generation and transmission projects, including solar, wind and battery projects sponsored by developers with extensive experience developing, financing, constructing and operating power projects.
+Added: NCSC also purchases assignments in such projects.
+Added: Generally, the construction and permanent financing is documented under a single financing agreement that includes a construction and term loan and a tax equity/credit bridge loan.
+Added: The construction and term loan is secured by the project’s assets and/or the developer’s interest in the project.
+Added: Any tax equity bridge loans are repaid with tax equity investment funds.
+Added: In some cases, the sponsors are required to provide guarantees as credit enhancement for the financings.
Private Placements
NCSC’s wholly owned subsidiary, Cooperative Securities LLC (“Cooperative Securities”), is a broker-dealer registered with the U.S.
−Removed: Securities Exchange Commission (“SEC ”).
+Added: Securities and Exchange Commission (“SEC”).
Cooperative Securities is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation.
−Removed: Cooperative Securities offers institutional debt placement services, which may include advising, arranging and structuring private debt financing transactions, to rural electric cooperatives, including NCSC’s electric members and associates.
+Added: Cooperative Securities offers institutional debt
+Added: placement services, which may include advising, arranging and structuring private debt financing transactions, to rural electric cooperatives, including NCSC’s electric members and associates.
NCSC Telecommunications (“Telecom”) Loan Programs
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electric utility industry, a sub-sector of the energy sector.
−Removed: According to a report published in April 2024 by the National Rural Electric Cooperative Association (“NRECA”), electric cooperatives serve as power providers for approximately 42 million people, including over 22 million businesses, homes, schools and farms across 48 states.
+Added: According to a report published in June 2025 by the National Rural Electric Cooperative Association (“NRECA”), electric cooperatives serve as power providers for approximately 42 million people, including over 22 million businesses, homes, schools and farms across 48 states.
Electric cooperatives provide power to approximate ly 56% of the nation’s land mass .
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Since there are only 11 states in which some or all electric cooperatives are subject to state regulatory oversight of their rates and tariffs, in most cases any associated costs of compliance can be passed on to cooperative consumers without additional regulatory approval.
−Removed: On April 25, 2024, the EPA announced the final carbon pollution standards for coal and gas-fired power plants.
−Removed: The final rules set carbon dioxide limits for new gas-fired combustion turbines and carbon dioxide emission guidelines for existing coal, oil and gas-fired steam generating units.
−Removed: On June 28, 2024, the U.S.
−Removed: Supreme Court issued a ruling in Loper Bright Enterprises v.
−Removed: Raimondo that ended the use of the Chevron doctrine when courts analyze federal regulation.
−Removed: The Chevron doctrine required courts to defer to the reasonable interpretation of agencies when deciding if a regulation reflected the intent of Congress.
−Removed: The end of Chevron is likely to make the EPA rule on carbon pollution standards, and other agency rules, more susceptible to legal challenges.
−Removed: Certain states and electric and other industry groups are challenging the standards in federal litigation.
+Added: On April 25, 2024, the EPA announced carbon pollution standards for coal and gas-fired power plants.
+Added: The rules set carbon dioxide limits for new gas-fired combustion turbines and carbon dioxide emission guidelines for existing coal, oil and gas-fired steam generating units.
+Added: On June 11, 2025, the EPA issued a proposed rule that will eliminate existing limits on greenhouse gas emissions from coal and gas-fired power plants promulgated under Section 111 of the Clean Air Act.
+Added: The proposed rule, which is in a comment period, will face scrutiny from legal advocates and environmental organizations.
Facilitation of Rural Broadband Expansion by Electric Cooperatives
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As federal and state governments increase funding opportunities for electric cooperatives in order to offer broadband services, we will continue to increase our credit support, which may include loans and/or letters of credit, to borrowers who participate in CAF II, RDOF and other programs designed to increase broadband services in rural areas.
−Removed: Our aggregate loans outstanding to CFC electric distribution cooperative members relating to broadband projects, which we started tracking in October 2017, increased to approximately $3,103 million as of May 31, 2024, from approximately $2,355 million as of May 31, 2023.
+Added: Our aggregate loans outstanding to CFC electric distribution cooperative members relating to broadband projects, which we started tracking in October 2017, was approxi mately $3,441 million and $3,103 million as of May 31, 2025 and 2024, respectively.
LENDING COMPETITION
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Based on financial data submitted to us by our electric utility members, we present the long-term debt outstanding to CFC by member class, RUS and other lenders in the electric cooperative industry as of December 31, 2024 and 2023 in the table below.
−Removed: The data presented as of December 31, 2023, were based on information reported by 807 distribution systems and 52 power supply systems.
−Removed: The data presented as of December 31, 2022, were based on information reported by 809 distribution systems and 53 power supply systems.
+Added: The data presented as of December 31, 2024 and 2023 were based on information reported by 807 distribution systems and 52 power supply systems for both periods.
(Dollars in thousands) Debt
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We therefore strive to align our human capital management strategy with our member-focused mission and core values of service, integrity and excellence.
−Removed: Our objectives are (i) to attract, develop and retain a highly qualified workforce with diverse backgrounds and experience in multiple areas whose skills and strengths are consistent with CFC’s mission, and (ii) to create an engaged, inclusive and collaborative work culture, which we believe are critical to deliver exceptional service to our members.
+Added: Our objectives are (i) to attract, develop and retain a highly qualified workforce with backgrounds and experience in multiple areas whose skills and strengths are consistent with CFC’s mission, and (ii) to create an engaged and collaborative work culture, which we believe is critical to deliver exceptional service to our members.
Governance of Human Capital
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As a financial services organization, our recruitment goal is to attract and retain a highly skilled workforce in a highly competitive talent market.
−Removed: We strive to provide both external candidates and internal employees who are seeking a different role with challenging and stimulating career opportunities ranging from entry-level to management and executive positions.
−Removed: We use a variety of methods to attract highly talented and engaged professionals, including outreach to local universities, recruitment job boards, including sites focusing on diversity, a referral bonus program and targeted industry-related job posting sites.
+Added: We strive to provide both external candidates and internal employees with meaningful career opportunities ranging from entry-level to expert-level professional, management and executive positions.
+Added: We use a variety of methods to attract talent, including outreach to local universities, recruitment job boards, a referral bonus program and targeted industry-related job posting sites.
When appropriate, we engage with recruiting firms to ensure that we have surveyed a broad scope of active and passive candidates for certain critical positions.
−Removed: We strive to ensure that our employment value proposition presented to candidates accurately reflects the features of working for a mission-driven cooperative like CFC so that we can attract individuals who are highly engaged with our vision to be our members’ most trusted financial resource.
+Added: We strive to ensure that CFC’s employment value proposition reflects a mission-driven cooperative so that we can attract individuals who are highly engaged with our vision to be our members’ most trusted financial resource.
One of our talent and culture strategic initiatives in fiscal year 2025 focused on assessing and updating our employment branding to ensure it remains relevant and engaging to potential candidates for employment.
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Our turnover rate for fiscal year 2025 was 9.5%.
−Removed: Our average employee tenure was 7.6 years with more than a quarter of our workforce having 10 or more years of service with CFC.
+Added: Our average employee tenure was eight years with more than a quarter of our workforce having 10 or more years of service with CFC.
Given the ongoing challenges of the professional talent market, we feel that CFC’s employee pool represents a balanced mix of long-term and new staff to serve our members.
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Employee Engagement and Development
−Removed: CFC launched several talent and culture initiatives in our fiscal year 2024-2026 strategic plan with a focus on instilling a positive organizational culture characterized by high levels of employee satisfaction and engagement.
−Removed: We conducted an employee engagement survey requesting feedback on drivers of employee satisfaction and contribution;
+Added: In fiscal year 2025, CFC continued talent and culture initiatives with a focus on instilling a positive organizational culture characterized by high levels of employee satisfaction and engagement.
+Added: We also conducted an employee engagement survey soliciting feedback on drivers of employee satisfaction and leadership contribution;
83% of our staff participated in the survey.
−Removed: Results were analyzed at all levels of the company with corporate, group and team meetings to collaborate on ways to promote employee engagement throughout CFC.
−Removed: Action items have been identified and we are moving forward with making updates and changes in response to input from staff.
−Removed: As part of our efforts to promote an engaged, inclusive and collaborative workplace culture, we encourage employees to expand their capabilities and enhance their career potential through employer-funded onsite training, external training, tuition assistance and professional events.
−Removed: In fiscal year 2024, CFC employees completed more than 3,500 training hours through our internal corporate development programs and over 700 hours of external professional training opportunities, such as professional certifications, industry seminars and workshops.
−Removed: We seek to create and tailor our training programs to meet our required skill sets and employee interests, while also addressing key risks and compliance matters.
−Removed: In fiscal year 2024, CFC launched a new Leadership Development Program designed to serve managers at all levels by providing training opportunities aligned to CFC’s core leadership competencies.
−Removed: T he program’s aim was to incorporate leadership competencies, such as business acumen, strategic agility, critical thinking skills and more, across a variety of programs, courses and levels to support and grow our leadership bench strength.
+Added: Results were analyzed and reported at the corporate and group levels to collaborate on ways to promote employee engagement throughout CFC.
+Added: As part of our efforts to promote an engaged and collaborative workplace culture, we encourage employees to expand their capabilities and enhance their skills through employer-funded onsite training, external training, tuition assistance and professional events.
+Added: In fiscal year 2025, CFC employees participated in our corporate development programs and took advantage of external professional training opportunities, such as professional certifications, industry seminars and workshops.
+Added: We seek to create and tailor our training programs to meet the skill needs and employee interests, while also addressing key risks and compliance matters.
+Added: We also continued our annual Leadership Development Program, designed for managers at all levels, by providing training opportunities aligned to CFC’s core leadership competencies.
+Added: The program’s aim was to incorporate leadership competencies, such as business acumen, strategic agility, critical thinking skills and more, across a variety of programs, courses and levels to support and grow our leadership bench strength.
Additionally, CFC offered a variety of training opportunities to all staff to enhance their professional and technical skills such as presentation skills, performance management, project management, collaboration skills and more.
This is incorporated in custom-made programs like CFC Learning Bites, which allows staff to engage in knowledge-transfer sessions on various technical skills from CFC’s subject matter experts.
−Removed: CFC recently completed a corporate-wide training program called CFC E3:
−Removed: Products & Services, which is a continuation of the initial launch of the E3 program in our 2023 fiscal year.
−Removed: E3 is an employee engagement and training program aligned with CFC’s Fiscal Year 2024 Corporate Scorecard goal to “Educate existing and/or new employees on CFC’s/NCSC’s full suite of products and services.” CFC also supports employee development through a company-sponsored Toastmasters chapter, guest speakers from cooperative partners and staff visits to local electric cooperatives to allow employees to learn first-hand how their efforts contribute to our members’ success.
+Added: CFC also completed a corporate-wide training program called E3:
+Added: Engage, Enlighten, Excel, which is aligned with CFC’s Fiscal Year 2025 Corporate Scorecard goal “Employee Engagement.” E3 ’ s purpose was to provide educational opportunities for employees to gain a greater overall understanding of CFC ’ s corporate governance, connect with the
+Added: purpose and importance of CFC ’ s member meetings, recognize developments and challenges in the cooperative industry, and be aware of the risks and potential opportunities in the use of artificial intelligence.
+Added: CFC also supports employee development through a company-sponsored Toastmasters chapter, guest speakers from cooperative partners and staff visits to local electric cooperatives to allow employees to learn first-hand how their efforts contribute to our members’ success.
Compensation and Benefits Packages
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Since their creation in the 1930s to bring electricity to rural homes, electric cooperatives have been essential to the economic vitality and quality of life in communities nationwide, including those in persistent poverty counties.
−Removed: As a value-based, financial services cooperative, CFC is engaged in sustaining our environment across multiple fronts—from our Leadership in Energy and Environmental Design (“LEED”) Gold-certified building and 42-acre ecofriendly campus that serves as CFC’s headquarters, to the renewable energy projects we’ve helped finance for the electric cooperative network.
+Added: As a values-based financial services cooperative, CFC is engaged in sustaining our environment across multiple fronts—from our Leadership in Energy and Environmental Design (“LEED”) Gold-certified building and 42-acre ecofriendly campus that serves as CFC’s headquarters, to the renewable energy projects we’ve helped finance for the electric cooperative network.
CFC’s members are moving forward with renewable energy adoption, and we continue to support them by funding renewable energy initiatives that will help build out greater renewable infrastructure in the United States.
−Removed: CFC had project financing loans outstanding to developers of renewable energy projects of approximately $299 million and $268 million as of May 31, 2024 and 2023, respectively.
+Added: CFC had loans outstanding for renewable energy projects of approximately $450 million and $299 million as of May 31, 2025 and 2024, respectively.
In 2020, CFC developed a Sustainability Bond Framework that aligned with the Sustainability Bond Guidelines (“SBG”), as administered by the International Capital Markets Association (“ICMA”).
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CFC issued its first sustainability bond with an aggregate principal amount of $400 million in October 2020, the first sustainability bond issued for the electric cooperative industry, and its second sustainability bond with an aggregate principal amount of $400 million in August 2022.
−Removed: Today, CFC is proud to support electric cooperatives by providing approxi mately $3,103 million in out standing loans to support broadband expansion.
+Added: Today, CFC is proud to support electric cooperatives by providing ap proximately $3,441 million in outstand ing loans to support broadband expansion.
These efforts have opened new opportunities in many rural communities by providing first-ever access to affordable high-speed internet services.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.