UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549

 FORM

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended May 31, 2025
 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
 __________________________

 (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 Class
 Trading Symbol(s)
 Name of Each Exchange on Which Registered

 7.35% Collateral Trust Bonds, due 2026
 NRUC 26
 New York Stock Exchange

 5.50% Subordinated Notes, due 2064
 NRUC
 New York Stock Exchange

 Securities Registered Pursuant to Section 12(g) of the Act: None

 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No
 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No x
 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report.
 If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
 Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officer's during the relevant recovery period pursuant to §240.10D-1(b).
 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 no t issue capital stock.

 Page

 Item 1.

 Business

 Our Business

 Members

 Loan and Guarantee Programs

 Investment Policy

 Industry

 Lending Competition

 Regulation

 Human Capital Management

 Corporate Responsibility

 Available Information

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 Reserved

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")

 Introduction

 Non-GAAP Financial Measures

 Executive Summary

 Consolidated Results of Operations

 Consolidated Balance Sheet Analysis

 Enterprise Risk Management

 Credit Risk

 Liquidity Risk

 Market Risk

 Operational Risk

 Critical Accounting Estimates

 Recent Accounting Changes and Other Developments

 Non-GAAP Financial Measures and Reconciliations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Report of Independent Registered Public Accounting Firm

 Consolidated Statements of Operations

 Consolidated Statements of Comprehensive Income (Loss)

 Consolidated Balance Sheets

 i

 Page

 Consolidated Statements of Changes in Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 Note 1 — Summary of Significant Accounting Policies

 Note 2 — Interest Income and Interest Expense

 Note 3 — Investment Securities

 Note 4 — Loans

 Note 5 — Allowance for Credit Losses

 Note 6 — Short-Term Borrowings

 Note 7 — Long-Term Debt

 Note 8 — Subordinated Deferrable Debt

 Note 9 — Members' Subordinated Certificates

 Note 10 — Derivative Instruments and Hedging Activities

 Note 11 — Equity

 Note 12 — Employee Benefits

 Note 13 — Guarantees

 Note 14 — Fair Value Measurement

 Note 15 — Variable Interest Entities

 Note 16 — Business Segments

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accountant Fees and Services

 Item 15.

 Exhibits and Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 SIGNATURES

 ii

 CROSS REFERENCE INDEX OF MD&A TABLES

 Table
 Page

 Net Income and TIER

 Reconciliation of Net Income

 Adjusted Net Income and Adjusted TIER

 Reconciliation of Adjusted Net Income

 Average Balances, Interest Income/Interest Expense and Average Yield/Cost

 Rate/Volume Analysis of Changes in Interest Income/Interest Expense

 Non-Interest Income

 Derivative Gains (Losses)

 Comparative Swap Curves

 Non-Interest Expense

 Loans—Outstanding Amount by Member Class and Loan Type

 Debt—Debt Product Types

 Debt—Total Debt Outstanding and Weighted-Average Interest Rates

 Debt—Member Investments

 Loans—Loan Portfolio Security Profile

 Loans—Loan Exposure to 20 Largest Borrowers

 Loans—Loan Geographic Concentration

 Allowance for Credit Losses by Borrower Member Class and Evaluation Methodology

 Available Liquidity

 Liquidity Coverage Ratios

 Committed Bank Revolving Line of Credit Agreements

 Short-Term Borrowings—Outstanding Amount and Weighted-Average Interest Rates

 Short-Term Borrowings—Funding Sources

 Long-Term and Subordinated Debt— Issuances and Repayments

 Collateral Pledged

 Loans—Unencumbered Loans

 Loans—Scheduled Principal Payments

 Contractual Obligations

 Projected Long-Term Sources and Uses of Funds

 Credit Ratings

 Interest Rate Sensitivity Analysis

 Adjusted Net Income

 TIER and Adjusted TIER

 Adjusted Total Debt Outstanding and Equity—Prior Versus Revised Methodology

 Adjusted Total Debt Outstanding and Equity

 Debt-to-Equity Ratio and Adjusted Debt-to-Equity Ratio

 Members' Equity

 iii

 FORWARD-LOOKING STATEMENTS

 This Annual Report on Form 10-K for the fiscal year ended May 31, 2025 ("this Report" or "2025 Form 10-K") 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 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.

 Item 1. Business

 OVERVIEW

 Our financial statements include the consolidated accounts of National Rural Utilities Cooperative Finance Corporation ("CFC") and National Cooperative Services Corporation ("NCSC"). 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.

 The business affairs of CFC and NCSC are governed by separate boards of directors for each entity. We provide information on CFC's corporate governance in "Item 10. Directors, Executive Officers and Corporate Governance." We provide information on the members of each of these entities below in "Item 1. Business—Members" and describe the financing products offered to members by each entity under "Item 1. Business—Loan and Guarantee Programs." Information on the financial performance of our business segments is disclosed in "Note 16—Business Segments." 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.

 CFC

 CFC is a member-owned, nonprofit finance cooperative association incorporated under the laws of the District of Columbia in April 1969. CFC's principal purpose is to provide its members and associates with financing 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 providing reliable, affordable power to the customers they serve. CFC also provides its members and associates with credit enhancements in the form of letters of credit and guarantees of debt obligations. As a cooperative, CFC is owned by and exclusively serves its membership, which consists of not-for-profit entities or subsidiaries or affiliates of not-for-profit entities. CFC is exempt from federal income taxes under Section 501(c)(4) of the Internal Revenue Code. As a member-owned cooperative, CFC's objective is not to maximize profit, but rather to offer members cost-based financial products and services. As described below under "Allocation and Retirement of Patronage Capital," CFC annually allocates its net earnings, which consist of net income excluding the effect of certain noncash accounting entries, to (i) a cooperative educational fund; (ii) a general reserve, if necessary; (iii) members based on each member's patronage of CFC's loan programs during the year; and (iv) a members' capital reserve. CFC funds its activities primarily through a combination of public and private issuances of debt securities, member investments and retained equity. As a Section 501(c)(4) tax-exempt, member-owned cooperative, CFC cannot issue equity securities.

 NCSC

 NCSC is a taxable cooperative incorporated in 1981 in the District of Columbia as a member-owned cooperative association. The principal purpose of NCSC is to provide financing to its members and associates, which consist of two classes: NCSC electric and NCSC telecommunications. NCSC electric members and associates consist of members of CFC, entities eligible to be members of CFC, government or quasi-government entities that own electric utility systems that meet the Rural Electrification Act definition of "rural," and the for-profit and not-for-profit entities that are owned, operated or controlled by, or provide significant benefit to, Class A, B and C members of CFC. NCSC telecommunications members and associates consist of rural telecommunications members and their affiliates. See "Members" below for a description of our member classes. CFC, which is the primary source of funding for NCSC, manages NCSC's business operations under a management agreement that is automatically renewable on an annual basis unless terminated by either party. NCSC pays CFC a fee and, in exchange, CFC reimburses NCSC for loan losses under a guarantee agreement. As a taxable cooperative, NCSC pays income tax based on its reported taxable income and deductions. NCSC is headquartered with CFC in Dulles, Virginia.

 OUR BUSINESS

 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

 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. 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. 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.

 Maintain Diversified Funding Sources

 We strive to maintain diversified funding sources beyond capital market offerings of debt securities. 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. 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. 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"). We provide additional information on our funding sources in "Item 7. MD&A—Liquidity Risk."

 MEMBERS

 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.

 CFC

 CFC lends to its members and associates and also provides credit enhancements in the form of letters of credit and guarantees of debt obligations. Membership in CFC is limited to cooperative or not-for-profit rural electric systems that are eligible to borrow from RUS under its Electric Loan Program and affiliates of those entities. CFC categorizes its members, all of which are not-for-profit entities or subsidiaries or affiliates of not-for-profit entities, into classes based on member type because the demands and needs of each member class differ. Affiliates represent holding companies, subsidiaries and other entities that are owned, controlled or operated by members. Members are not required to have outstanding loans from RUS as a condition of borrowing from CFC. CFC membership consists of members in 50 states and three U.S. territories. In addition to members, CFC has associates that are nonprofit groups or entities organized on a cooperative basis that are owned, controlled or operated by members and are engaged in or plan to engage in furnishing non-electric services primarily for the benefit of the ultimate consumers of CFC members. Associates are not eligible to vote on matters put to a vote of the membership. CFC's members, by member class, and associates were as follows as of May 31, 2025.

 CFC Member

 Member Type
 Class

 Distribution systems
 A

 Power supply systems
 B

 Statewide and regional associations, including NCSC
 C

 National association of cooperatives(1)

 D

 Total CFC members

 Associates

 Total CFC members and associates
 1,016

 (1)National Rural Electric Cooperative Association is our sole class D member.

 NCSC

 Membership in NCSC consists of two classes: Class E (Electric) and Class T (Telecommunications). Class E membership includes organizations that are Class A, B and C members of CFC, or eligible for such membership, and are approved for membership by the NCSC Board of Directors. Class E associates may include members of CFC, entities eligible to be members of CFC and for-profit and not-for-profit entities owned, controlled or operated by, or provide significant benefit to, Class A, B and C members of CFC. Class T membership includes cooperative corporations, not-for-profit corporations, private corporations, public corporations, utility districts and other public bodies that are approved by the NCSC Board of Directors and are actively borrowing or are eligible to borrow from RUS's traditional infrastructure loan program. These companies must be engaged directly or indirectly in furnishing telephone services as the licensed incumbent carrier. 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.

 CFC Member

 Member Type
 Class

 Class E

 Distribution systems
 A

 Power supply systems
 B

 Statewide associations
 C

 Class T

 Associates

 Total NCSC members and associates
 1,166

 LOAN AND GUARANTEE PROGRAMS

 CFC lends to its members and associates and also provides credit enhancements in the form of letters of credit and guarantees of debt obligations. NCSC also lends and provides credit enhancements to its members and associates. For information on the membership of CFC and NCSC, see "Item 1. Business—Members."

 CFC and NCSC loan commitments generally contain provisions that restrict borrower advances or trigger an event of default if there is any material adverse change in the business or condition, financial or otherwise, of the borrower. Below is additional information on the loan and guarantee programs offered by CFC and NCSC.

 CFC Loan Programs

 Long-Term Loans

 CFC's long-term loans generally have the following characteristics:

 • terms of up to 35 years on a senior secured basis and terms of up to five years on an unsecured basis;
 • amortizing, bullet maturity or serial payment structures;
 • the property, plant and equipment financed by and securing the long-term loan has a useful life generally equal to or in excess of the loan maturity;
 • flexibility for the borrower to select a fixed interest rate for periods of one to 35 years or a variable interest rate; and
 • the ability for the borrower to select various tranches with either a fixed or variable interest rate for each tranche.

 Borrowers typically have the option of selecting a fixed or variable interest rate at the time of each advance on long-term loan facilities. When selecting a fixed rate, the borrower has the option to choose a fixed rate for a term of one year through the final maturity of the loan. When the selected fixed interest rate term expires, the borrower may select another fixed rate for a term of one year through the remaining loan maturity or the current variable rate. The fixed rate on a loan generally is determined on the day the loan is advanced or repriced based on the term selected.

 To be in compliance with the covenants in the loan agreement and eligible for loan advances, distribution systems generally must maintain an average modified debt service coverage ratio, as defined in the loan agreement, of 1.35 or greater. CFC may make long-term loans to distribution systems, on a case-by-case basis, that do not meet this general criterion. Power supply systems generally are required (i) to maintain an average debt service coverage ratio, as defined in the loan agreement, of 1.00 or greater; (ii) to establish and collect rates and other revenue in an amount to yield margins for interest, as defined in an indenture, in each fiscal year sufficient to equal at least 1.00; or (iii) both. CFC may make long-term loans to power supply systems, on a case-by-case basis, that may include other requirements, such as maintenance of a minimum equity level.

 Line of Credit Loans

 Line of credit loans are designed primarily to assist borrowers with liquidity and cash management and are generally advanced at variable interest rates. Line of credit loans are typically revolving facilities. 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. Line of credit loans are generally unsecured and may be conditional or unconditional facilities.

 Line of credit loans can be made on an emergency basis when financing is needed quickly to address weather-related or other unexpected events and can also be made available as interim financing when a member either receives RUS approval to obtain a loan and is awaiting its initial advance of funds or submits a loan application that is pending approval from RUS (sometimes referred to as "bridge loans"). In these cases, when the borrower receives the RUS loan advance, the funds must be used to repay the bridge loans.

 Syndicated Line of Credit and Term Loans

 Syndicated line of credit and term loans are typically large financings offered by a group of lenders that work together to provide funds for a single borrower. Syndicated loans are generally unsecured, variable-rate loans that can be provided on a revolving or term basis for tenors that range from several months to five years. Syndicated financings are arranged for borrowers on a case-by-case basis. CFC may act as lead lender, arranger and/or administrative agent for the syndicated loans. CFC will syndicate these loans on a best effort basis.

 NCSC Electric Loan Programs

 NCSC makes loans to electric cooperatives and their subsidiaries that provide non-electric services in the energy and telecommunication industries as well as to entities that provide substantial benefit to CFC members, including eligible solar energy providers and investor-owned utilities. Loans to NCSC associates may require a guarantee of repayment to NCSC from the CFC member cooperative with which it is affiliated.

 Long-Term Loans

 NCSC's electric long-term loans have characteristics similar to CFC's long-term loans as described herein, with the exception that senior secured long-term loans have terms up to 30 years.

 Line of Credit Loans

 NCSC also provides revolving line of credit loans to assist electric borrowers with liquidity and cash management on terms similar to those provided by CFC as described herein.

 Leases

 NCSC offers both its electric and telecommunications members and associates equipment financing for leased assets, such as vehicles, with flexible payment terms and the option to purchase the equipment for a Terminal Rental Adjustment Clause ("TRAC") value at the end of the lease term. CFC unconditionally guarantees full indemnification for any losses of NCSC in financing leased assets to its members pursuant to a guarantee agreement with NCSC.

 Project Finance

 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. NCSC also purchases assignments in such projects. 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. The construction and term loan is secured by the project's assets and/or the developer's interest in the project. Any tax equity bridge loans are repaid with tax equity investment funds. 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. Securities and Exchange Commission ("SEC"). Cooperative Securities is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. 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.

 NCSC Telecommunications ("Telecom") Loan Programs

 NCSC's telecom portfolio consists primarily of long-term loans to rural local exchange carriers or holding companies of rural local exchange carriers for debt refinancing, construction or upgrades of infrastructure, acquisitions and other corporate purposes. Most of these rural telecommunications companies have diversified their operations and also provide broadband services.

 Long-Term Loans

 NCSC's telecom long-term loans have characteristics similar to CFC's long-term loans as described herein, with the exception that senior secured long-term loans have terms up to 10 years.

 Line of Credit Loans

 NCSC also provides revolving line of credit loans to assist telecom borrowers with liquidity and cash management on terms similar to those provided by CFC as described herein.

 Loan Features and Options

 Interest Rates

 As a member-owned cooperative finance organization, CFC is a cost-based lender. As such, our interest rates are set based on a yield that we believe will generate a reasonable level of earnings and cover our cost of funding, general and administrative expenses and provision for credit losses. Long-term fixed rates are set daily for new loan advances and loans that reprice. The fixed rate on each loan is generally determined on the day the loan is advanced or repriced based on the term selected. The variable rate is established monthly. Various standardized discounts may reduce the stated interest rates for borrowers meeting certain criteria such as performance, collateral and equity requirements.

 Conversion Option

 Generally, a borrower may convert a long-term loan from a variable interest rate to a fixed interest rate at any time without a fee and convert a long-term loan from a fixed rate to another fixed rate or to a variable rate at any time, generally subject to a make-whole premium.

 Prepayment Option

 Generally, borrowers may prepay long-term fixed-rate loans at any time, subject to payment of an administrative fee and a make-whole premium, and prepay long-term variable-rate loans at any time, subject to payment of an administrative fee. Line of credit loans may be prepaid at any time without a fee.

 Loan Security

 Long-term loans made by CFC typically are senior secured on parity with other secured lenders (primarily RUS), if any, by all assets and revenue of the borrower, subject to standard liens typical in utility mortgages such as those related to taxes, worker's compensation awards, mechanics' and similar liens, rights-of-way and governmental rights. We are able to obtain liens on parity with liens for the benefit of RUS because RUS' form of mortgage expressly provides for other lenders such as CFC to have a parity lien position if the borrower satisfies certain conditions or obtains a written lien accommodation from RUS. When we make loans to borrowers that have existing loans from RUS, we generally require those borrowers to either obtain such a lien accommodation or satisfy the conditions necessary for our loan to be secured on parity under the mortgage with the loan from RUS. As noted above, CFC line of credit loans generally are unsecured.

 We provide additional information on our loan programs in the sections "Item 7. MD&A—Consolidated Balance Sheet Analysis," and "Item 7. MD&A—Credit Risk."

 Guarantee Programs

 When we guarantee our members' debt obligations, we use the same credit policies and monitoring procedures for guarantees as for loans. If a member system defaults on its obligation to pay debt service, then we are obligated to pay any required amounts under our guarantees. Meeting our guarantee obligations satisfies the underlying obligation of our member systems and prevents the exercise of remedies by the guarantee beneficiary based upon a payment default by a member system. The member system is required to repay any amount advanced by us with interest pursuant to the documents evidencing the member system's reimbursement obligation.

 Letters of Credit

 In exchange for a fee, we issue irrevocable letters of credit to support members' obligations to energy marketers, other third parties and to the USDA Rural Business-Cooperative Service. Each letter of credit is supported by a reimbursement agreement with the member on whose behalf the letter of credit was issued. In the event a beneficiary draws on a letter of credit, the agreement generally requires the member to reimburse us within one year from the date of the draw, with interest accruing from the draw date at our line of credit variable interest rate.

 Guarantees of Long-Term Tax-Exempt Bonds

 We guarantee debt issued for our members' construction or acquisition of pollution control, solid waste disposal, industrial development and electric distribution facilities through government-issued, tax-exempt bonds. Governmental authorities issue such debt on a nonrecourse basis and the interest thereon is exempt from federal taxation. The proceeds of the offering are made available to the member system, which in turn is obligated to pay the governmental authority amounts sufficient to service the debt.

 If a system defaults for failure to make the debt payments and any available debt service reserve funds have been exhausted, we are obligated to pay scheduled debt service under our guarantee. Such payment will prevent the occurrence of a payment default that would otherwise permit acceleration of the bond issue. The system is required to repay any amount that we advance pursuant to our guarantee plus interest on that advance. This repayment obligation, together with the interest thereon, is typically senior secured on parity with other lenders (including, in most cases, RUS), by a lien on substantially all of the system's assets. If the security instrument is a common mortgage with RUS, then in general, we may not exercise remedies for up to two years following default. However, if the debt is accelerated under the common mortgage because of a determination that the related interest is not tax-exempt, the system's obligation to reimburse us for any guarantee payments will be treated as a long-term loan. The system is required to pay us initial and/or ongoing guarantee fees in connection with these transactions.

 Certain guaranteed long-term debt bears interest at variable rates that are adjusted at intervals of one to 270 days, including weekly, every five weeks or semiannually to a level favorable to their resale or auction at par. If funding sources are available, the member that issued the debt may choose a fixed interest rate on the debt. When the variable rate is reset, holders of variable-rate debt have the right to tender the debt for purchase at par. In some transactions, we have committed to purchase this debt as liquidity provider if it cannot otherwise be remarketed. If we hold the securities, the member cooperative pays us the interest earned on the bonds or interest calculated based on our short-term variable interest rate, whichever is greater. The system is required to pay us stand-by liquidity fees in connection with these transactions.

 Other Guarantees

 We may provide other guarantees as requested by our members. Other guarantees are generally unsecured with guarantee fees payable to us.

 We provide additional information on our guarantee programs and outstanding guarantee amounts as of May 31, 2025 and 2024 in "Note 13—Guarantees."

 INVESTMENT POLICY

 We invest funds in accordance with policies adopted by our board of directors. Pursuant to our current investment policy, an Investment Management Committee was established to oversee and administer our investments with the objective of seeking returns consistent with the preservation of principal and to provide a supplementary source of liquidity. The Investment Management Committee may direct funds to be invested in direct obligations of, or obligations guaranteed by, the United States ("U.S.") or agencies thereof and investments in relatively short-term U.S. dollar-denominated fixed-income securities such as government-sponsored enterprises, certain financial institutions in the form of overnight investment products and Eurodollar deposits, bankers' acceptances, certificates of deposit, working capital acceptances or other deposits. Other permitted investments include highly rated obligations, such as commercial paper, certain obligations of foreign governments, municipal securities, asset-backed securities, mortgage-backed securities and certain corporate bonds. In addition, we may invest in overnight or term repurchase agreements. Investments are denominated in U.S. dollars exclusively. All of these investments are subject to requirements and limitations set forth in our board investment policy.

 INDUSTRY

 Our rural electric cooperative members operate primarily in the energy sector, which is one of 16 critical infrastructure sectors identified by the U.S. government because the services provided by each sector, all of which have an impact on other sectors, are deemed essential in supporting and maintaining the overall functioning of the U.S. economy. Rural electric cooperatives are an integral part of the U.S. electric utility industry, a sub-sector of the energy sector. 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 approximately 56% of the nation's land mass. Based on the latest annual data reported by the U.S. Energy Information Administration, a statistical and analytical agency within the U.S. Department of Energy, the electric utility industry had revenue of approximately $491 billion in 2023.

 CFC was established by electric utility cooperatives to serve as a supplemental financing source to RUS loan programs and to mitigate uncertainty related to government funding. CFC aggregates the combined strength of its rural electric member cooperatives to access the public capital markets and other funding sources. CFC works cooperatively with RUS; however, CFC is not a federal agency or a government-sponsored enterprise. CFC meets the financial needs of its rural electric members by:

 • providing financing to RUS-eligible rural electric utility systems for infrastructure, including for those facilities that are not eligible for financing from RUS;
 • providing bridge loans required by borrowers in anticipation of receiving RUS funding;
 • providing financial products not otherwise available from RUS, including lines of credit, letters of credit, guarantees on tax-exempt financing, weather-related emergency lines of credit, unsecured loans and investment products such as commercial paper, select notes, medium-term notes and member capital securities; and
 • meeting the financing needs of those rural electric systems that repay or prepay their RUS loans and replace the government loans with private capital.

 Regulatory Oversight of Electric Cooperatives

 There are 11 states in which some or all electric cooperatives are subject to state regulatory oversight of their rates and tariffs by state utility commissions and do not have a right to opt out of regulation. Those states are Arizona, Arkansas, Hawaii, Kentucky, Louisiana, Maine, Maryland, New Mexico, Vermont, Virginia and West Virginia. Regulatory jurisdiction by state commissions generally includes rate and tariff regulation, the issuance of securities and the enforcement of service territory as provided for by state law.

 The Federal Energy Regulatory Commission ("FERC") has regulatory authority over three aspects of electric power, as provided for under Parts II and III of the Federal Power Act ("FPA"):

 • the transmission of electric energy in interstate commerce;
 • the sale of electric energy at wholesale in interstate commerce; and
 • the approval and enforcement of reliability standards affecting all users, owners and operators of the bulk power system.

 In addition, FERC regulates the issuance of securities by public utilities under the FPA in the event the applicable state commission does not.

 Our electric distribution and power supply members are subject to regulation by various federal, regional, state and local authorities with respect to the environmental effects of their operations. At the federal level, the U.S. Environmental Protection Agency ("EPA") from time to time proposes rulemakings that could force the electric utility industry to incur capital costs to comply with potential new regulations and possibly retire coal-fired generating capacity. 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.

 On April 25, 2024, the EPA announced carbon pollution standards for coal and gas-fired power plants. 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. 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. 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

 Many electric cooperatives are making investments in fiber to support core electric plant communications. Some of these electric cooperatives are leveraging these fiber assets to offer broadband services, either directly or through partnering with local telecommunication companies and others. Over 30 electric cooperatives were awarded approximately $250 million in federal funding through the Connect America Fund Phase II auction ("CAF II") process by the Federal Communications Commission ("FCC") that was held in 2018. The awarded funds are being distributed over a 10-year period. More than 190 electric cooperatives, many of which are already offering or building out projects, were awarded approximately $1.6 billion though the FCC's Rural Development Opportunity Fund ("RDOF") in 2021. Those funds also will be distributed over a 10-year period. 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. Our aggregate loans outstanding to CFC electric distribution cooperative members relating to broadband projects, which we started tracking in October 2017, was approximately $3,441 million and $3,103 million as of May 31, 2025 and 2024, respectively.

 LENDING COMPETITION

 RUS is the largest lender to electric cooperatives, providing them with long-term secured loans. CFC provides financial products and services to its members, primarily in the form of long-term secured and short-term unsecured loans, to supplement RUS financing, to provide loans to members that have elected not to borrow from RUS and to bridge long-term financing provided by RUS. We also offer other financing options, such as credit support in the form of letters of credit and guarantees, loan syndications and loan participations. Our credit products are tailored to meet the specific needs of each borrower, and we often offer specific transaction structures that our competitors do not provide. CFC also offers certain risk-mitigation products and interest rate discounts on secured, long-term loans for its members that meet certain criteria, such as performance, collateral and equity requirements.

 Primary Lending Competitors

 CFC's primary competitor is CoBank, ACB, a federally chartered instrumentality of the U.S. that is a member of the Farm Credit System. CFC also competes with banks, other financial institutions and the capital markets to provide loans and other financial products to our members. As a result, we are competing with the customer service, pricing and funding options our members are able to obtain from these sources. We attempt to minimize the effect of competition by offering a variety of loan options and value-added services and by leveraging the working relationships developed with the majority of our members over the past 56 years. In addition to leveraging these working relationships, we differentiate ourselves from other financial institutions by focusing on customer service and product flexibility. We also allocate substantially all net earnings to members (i) in the form of patronage capital, which reduces our members' effective cost of borrowing, and (ii) through the members' capital reserve. The value-added services that we provide include, but are not limited to, benchmarking tools, financial models, rate studies, publications and various conferences, meetings, facilitation services and training workshops.

 We are not able to specifically identify the amount of debt our members have outstanding to CoBank, ACB from either the annual financial and statistical reports our members file with us or from CoBank, ACB's public disclosure; however, we believe CoBank, ACB is the additional lender, along with CFC and RUS, with significant long-term debt outstanding to rural electric cooperatives.

 Rural Electric Lending Market

 Most of our rural electric borrowers are not-for-profit, private companies owned by the members they serve. As such, there is limited publicly available information to accurately determine the overall size of the rural electric lending market. We utilize the annual financial and statistical reports submitted to us by our members to estimate the overall size of the rural electric lending market. The substantial majority of our members have a fiscal year-end that corresponds with the calendar year-end. Therefore, the annual information we use to estimate the size of the rural electric market is typically based on the calendar year-end rather than CFC's fiscal year-end.

 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. 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.

 December 31,

 2024
 2023

 Debt
 Debt

 Total long-term debt reported by members:(1)

 $
 70,171,733
 $
 64,946,249

 54,140,111
 52,533,144

 Less: Long-term debt funded by RUS
 (54,346,548)
 (50,834,010)

 Members' non-RUS long-term debt
 $
 69,965,296
 $
 66,645,383

 Funding sources of members' long-term debt:

 Long-term debt funded by CFC by member class:

 $
 25,487,966
 %
 $
 24,145,067
 %

 5,091,415
 5,259,127

 Long-term debt funded by CFC
 30,579,381
 29,404,194

 Long-term debt funded by other lenders
 39,385,915
 37,241,189

 Members' non-RUS long-term debt
 $
 69,965,296
 %
 $
 66,645,383
 %

 (1) Reported amounts are based on member-provided financial information, which may not have been subject to audit by an independent accounting firm.

 While we believe our estimates of the overall size of the rural electric lending market serve as a useful tool in gauging the size of this lending sector, they should be viewed as estimates rather than precise measures as there are certain limitations in our estimation methodology, including, but not limited to, the following:

 • Although certain underlying data included in the financial and statistical reports provided to us by members may have been audited by an independent accounting firm, our accumulation of the data from these reports has not been subject to a review for accuracy by an independent accounting firm.
 • The data presented are not necessarily inclusive of all members because in some cases our receipt of annual member financial and statistical reports may be delayed and not received in a timely manner to incorporate into our market estimates.
 • The financial and statistical reports submitted by members include information on indebtedness to RUS, but the reports do not include comprehensive data on indebtedness to other lenders and are not on a consolidated basis.

 REGULATION

 General

 CFC and NCSC are not subject to direct federal regulatory oversight or supervision with regard to lending. CFC and NCSC are subject to state and local jurisdiction commercial lending and tax laws that pertain to business conducted in each state, including but not limited to lending laws, usury laws and laws governing mortgages. These state and local laws regulate the manner in which we make loans and conduct other types of transactions. The statutes, regulations and policies to which the companies are subject may change at any time. In addition, the interpretation and application by regulators of the laws and regulations to which we are subject may change from time to time. Certain of our contractual arrangements, such as those pertaining to funding obtained through the Guaranteed Underwriter Program, provide for the Federal Financing Bank and RUS to periodically review and assess CFC's compliance with program terms and conditions.

 As a member of the Financial Industry Regulatory Authority ("FINRA"), Cooperative Securities is subject to FINRA rules and regulations pertaining to broker-dealers and their customer-related activities.

 Derivatives Regulation

 CFC engages in over-the-counter ("OTC") derivative transactions, primarily interest rate swaps, to hedge interest rate risk. As an end user of derivative financial instruments, CFC is subject to regulations that apply to derivatives generally. The Dodd-Frank Act ("DFA"), enacted July 2010, resulted in, among other things, comprehensive regulation of the OTC derivatives market. The DFA provides for an extensive framework for the regulation of OTC derivatives, including mandatory clearing, exchange trading and transaction reporting of certain OTC derivatives. Subsequent to the enactment of the DFA, the U.S. Commodity Futures Trading Commission ("CFTC") issued a final rule, "Clearing Exemption for Certain Swaps Entered into by Cooperatives," which created an exemption from mandatory clearing for cooperatives. The CFTC's final rule, "Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants," includes an exemption from margin requirements for uncleared swaps for cooperatives that are financial end users. CFC is an exempt cooperative end user of derivative financial instruments and does not participate in the derivatives markets for speculative, trading or investing purposes and does not make a market in derivatives.

 HUMAN CAPITAL MANAGEMENT

 CFC's success in providing industry expertise and responsive service to meet the needs of our members across the U.S. is dependent on the quality of service provided by our employees and their relationships with our members. We therefore strive to align our human capital management strategy with our member-focused mission and core values of service, integrity and excellence. 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

 CFC's executive leadership team and board of directors work together to provide oversight on most human capital matters. The compensation committee of the board of directors meets quarterly to review updates to our compensation programs, including our salary structure, incentive plans and executive compensation. Our board is provided with periodic updates on succession planning efforts, current human capital management risks and mitigation efforts in addition to any other matters that affect our ability to attract, develop and maintain the talent needed to execute on our corporate objectives.

 Recruiting and Retaining Talent

 As a financial services organization, our recruitment goal is to attract and retain a highly skilled workforce in a highly competitive talent market. 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.

 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. 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.

 Because many of our business operations involve significant member-facing interaction with a relatively stable base of long-standing member-borrowers, we place a priority on the retention of high-performing employees who have extensive, in-depth experience serving the needs of our members. Our turnover rate for fiscal year 2025 was 9.5%. 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. We welcomed 59 new hires this fiscal year and employed 317 staff members as of May 31, 2025, all of which are located in the U.S. The majority of our workforce is headquartered in Dulles, Virginia.

 Employee Engagement and Development

 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. 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. Results were analyzed and reported at the corporate and group levels to collaborate on ways to promote employee engagement throughout CFC. 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. 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. 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. 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. 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.

 CFC also completed a corporate-wide training program called E3: 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

 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. 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

 Attracting, developing, rewarding and retaining high-level talent is a key component of our human capital objectives, so we seek to provide a competitive Total Rewards package consisting of base pay, an annual incentive opportunity, and benefits packages. CFC's compensation program includes a base salary range structure to provide flexibility in meeting labor market demands and the ability to differentiate pay based on experience and performance. The salary ranges are structured in zones aligned with median market pay for the positions in each zone. We continue to evaluate and make adjustments to our merit increase budget in order to retain and attract exceptional staff in a highly competitive talent market.

 Our annual incentive plan is based on (i) attainment of our targeted corporate scorecard goals as established at the beginning of the fiscal year and (ii) individual performance ratings from our annual review process. Attainment of the annual scorecard goals requires the collective engagement and effort of employees across the company, which we believe incentivizes teamwork and fosters a collaborative working environment. The individual performance component enables the organization to differentiate a portion of the incentive compensation, which demonstrates the value of a high-performance culture on behalf of our members.

 The employee benefits components of our Total Rewards package include the following: vacation and leave programs; health, dental, vision, life and disability insurance coverage; and flexible spending and health savings plans, most of which are funded in whole or in part by CFC. We make investments in the future financial security of our employees by offering retirement plans that consist of a 401(k) plan with a company match component and an employer-funded defined benefit retirement plan in which CFC makes an annual contribution in an amount that approximates 20% of each employee's base salary, which we believe helps in our efforts to engage employees, retain high-performing employees and reduce turnover. We also offer programs and resources intended to promote work-life balance, assist in navigating life events and improve employee well-being, such as flexible work schedules, remote work options, parental leave, an employee assistance program, legal insurance and identity theft coverage services.

 Open-Door Communications

 CFC maintains a strong focus on our core value of integrity in pursuit of our mission. To promote open communication, we maintain an open-door policy and provide multiple avenues for employees to voice their concerns and offer suggestions. Employees are encouraged to report any issues to their manager, senior vice president, corporate compliance, Human Resources or our corporate ethics helpline. All new employees receive Code of Conduct & Business Ethics training, and all employees complete an annual Code of Conduct & Business Ethics training to foster a culture of integrity and accountability.

 CORPORATE RESPONSIBILITY

 For more than half a century, CFC has helped electric cooperatives provide essential services to rural America. 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.

 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. 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"). Under this framework, we issued sustainability bonds and used the proceeds to finance or refinance projects to enhance access to broadband services and renewable energy projects that provide positive environmental and social impact in rural America. 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. Today, CFC is proud to support electric cooperatives by providing approximately $3,441 million in outstanding 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.

 True to our core values of service, integrity and excellence, CFC continues to help electric cooperatives support the communities that created them, whether it's through contributions from the CFC Educational Fund or helping them access capital from the USDA's Rural Economic Development Loan and Grant ("REDL&G") program, which fosters economic development. Over the past 20 years, CFC has contributed an estimated $262 million to the REDL&G program.

 CFC and electric cooperatives operate under seven cooperative principles: open and voluntary membership; democratic member control; members' economic participation; autonomy and independence; education, training and information; cooperation among cooperatives; and concern for community. Through our "Commitment to Excellence" workshops, CFC has trained electric cooperative directors and executive staff on governance best practices, including how electric cooperative leaders should demonstrate principled leadership, financial stewardship, and effective governance and management risk oversight.

 With these efforts, CFC empowers electric cooperatives to fulfill their historic mission of service and contribute to sustainability efforts.

 AVAILABLE INFORMATION

 Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports, are available for free at www.nrucfc.coop as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. These reports also are available for free on the SEC's website at www.sec.gov. Information posted on our website is not incorporated by reference into this Form 10-K.

 Item 1A. Risk Factors

 Our financial condition, results of operations and liquidity are subject to various risks and uncertainties, some of which are inherent in the financial services industry and others of which are more specific to our own business. The discussion below addresses the most significant risks, of which we are currently aware, that could have a material adverse impact on our business, financial condition, results of operations or liquidity. However, other risks and uncertainties, including those not currently known to us, could also negatively impact our business, financial condition, results of operations and liquidity. Therefore, the following should not be considered a complete discussion of all the risks and uncertainties we may face. For information on how we manage our key risks, see "Item 7. MD&A—Enterprise Risk Management." You should consider the following risks together with all of the other information in this Report.

 RISK FACTORS

 Credit Risks

 We are subject to credit risk given that borrowers may not be able to meet their contractual obligations in accordance with agreed-upon terms, which could have a material adverse effect on our financial condition, results of operations and liquidity. Because we lend primarily to U.S. rural electric utility systems, we also are inherently subject to single-industry and single-obligor concentration risks.
 As a lender, our primary credit risk arises from the extension of credit to borrowers. Our loan portfolio, which represents the largest component of assets on our balance sheet, accounts for the substantial majority of our credit risk exposure. Loans

 outstanding to electric utility organizations represented approximately 98% of our total loans outstanding as of May 31, 2025. We had 899 borrowers with loans outstanding as of May 31, 2025, and our 20 largest borrowers accounted for 19% of total loans outstanding as of May 31, 2025. The largest total exposure to a single borrower or controlled group represented 1% of total loans outstanding as of May 31, 2025. Texas historically has had the largest number of borrowers with loans outstanding and the largest loan concentration in any one state. Loans outstanding to Texas borrowers represented 16% of total loans outstanding as of May 31, 2025.

 We face the risk that the principal of, or interest on, a loan will not be paid on a timely basis or at all or that the value of any underlying collateral securing a loan will be insufficient to cover our outstanding exposure. A deterioration in the financial condition of a borrower or underlying collateral could impair the ability of a borrower to repay a loan or our ability to recover unpaid amounts from the underlying collateral. We maintain an internal borrower risk rating system in which we assign a rating to each borrower and credit facility that is intended to reflect the ability of a borrower to repay its obligations and assess the probability of default and loss given default. The borrower risk rating system comprises both quantitative metrics and qualitative considerations. Each component is risk weighted in accordance with its importance. Unforeseen events and developments that affect specific borrowers or that occur in a region where we have a high concentration of credit risk may result in risk rating downgrades. Such an event may result in an increase in any or all of the following: in the allowance for credit losses; delinquent, nonperforming and criticized loans; net charge-offs; and our credit risk.

 We establish an allowance for credit losses based on management's current estimate of credit losses that are expected to occur over the remaining life of the loans in our portfolio. Because the process for determining our allowance for credit losses requires informed judgments about the ability of borrowers to repay their loans, we identify the estimation of our allowance for credit losses as a critical accounting estimate. Our borrower risk ratings are a key input in establishing our allowance for credit losses. Therefore, the deterioration in the financial condition of a borrower may result in a significant increase in our allowance for credit losses and provision for credit losses and may have a material adverse impact on our results of operations, financial condition and liquidity. In addition, we might underestimate expected credit losses and have credit losses in excess of the established allowance for credit losses if we fail to timely identify a deterioration in a borrower's financial condition or due to other factors. These other factors include if the methodology and process we use in assigning borrower risk ratings and making judgments in extending credit to our borrowers does not accurately capture the level of our credit risk exposure or our historical loss experience proves to be not indicative of our expected future losses.

 Adverse changes, developments or uncertainties in the rural electric utility industry could adversely impact the operations or financial performance of our member electric cooperatives, which, in turn, could have an adverse impact on our financial results.
 Our focus as a member-owned finance cooperative is on lending to our rural member electric utility cooperatives, which is the primary source of our revenue. As a result of lending primarily to our members, we have a loan portfolio with single-industry concentration. Loans to rural electric utility cooperatives accounted for approximately 98% of our total loans outstanding as of May 31, 2025. While we historically have experienced limited defaults and very low credit losses in our electric utility loan portfolio, factors that may have a negative impact on the operations of our member rural electric cooperatives include but are not limited to, the price and availability of distributed energy resources; whether these resources will be sufficient to serve electric demand at its peak; the operational reliability and resilience of their power grids; cyber-related attacks or other breaches of their operating systems and network infrastructure; regulatory or compliance factors related to managing greenhouse gas emissions (including the potential for stranded assets); and extreme weather conditions leading to events such as hurricanes, tornadoes and wildfires, including weather conditions related to climate change. The factors listed above, individually or in combination, could result in declining sales or increased power supply and operating costs and could potentially cause a deterioration in the financial performance of our members and the value of the collateral securing their loans. This could impair their ability to repay us in accordance with the terms of their loans. In such cases, it may lead to risk rating downgrades, which may result in an increase in our allowance for credit losses and a decrease in our net income.

 The threat of weather-related events or shifts in climate patterns resulting from climate change, including, but not limited to, increases in storm intensity, number of intense storms and temperature extremes in areas in which our member rural electric cooperatives operate, could result in increased power supply and operating costs, adversely impacting our members' results of operations, liquidity and ability to make payments to us. While our members have traditionally largely been reimbursed by Federal Emergency Management Agency ("FEMA") relief programs for eligible storm-related damages, in January 2025, an executive order established the FEMA Review Council with the intent of implementing significant reforms to FEMA and

 its reimbursement programs. Ongoing organizational and policy reforms at FEMA, including leadership changes, staffing reductions and evolving federal and state roles, may present a risk to the eligibility and timing of disaster cost reimbursements. As a result, the programs on which our members have relied upon may not be implemented in their current forms or payments may not be received on a timely basis. Further, FEMA does not provide relief for events caused by human error and, as a result, the majority of wildfires may not be covered events. For increased power costs, although we believe our members have the ability to pass through increased costs to their members, in some cases it may be difficult to pass through the entire costs on a timely basis if they are significant. To the extent CFC makes bridge loans to members as they wait for FEMA payments, changes to FEMA programs or delays in payments from FEMA could adversely impact the quality of our loan portfolio and our financial condition. Additionally, our member rural electric cooperatives are subject to evolving local, state and federal laws, regulations and expectations regarding the environment. These requirements and expectations may increase the time and costs of efforts to monitor and comply with such obligations and expose them to liability. The impacts of climate change present notable risks, including damage to the assets of our members, which could adversely impact the quality of our loan portfolio and our financial condition.

 Advances in technology may change the way electricity is generated and transmitted or the way broadband is deployed, which could adversely affect the business operations of our members and negatively impact the credit quality of our loan portfolio and financial results.
 Advances in technology could reduce demand for power supply systems and distribution services. The development of alternative technologies that produce electricity, including solar cells, wind power and microturbines, has expanded and could ultimately provide affordable alternative sources of electricity and permit end users to adopt distributed generation systems that would allow them to generate electricity for their own use. As these and other technologies, including energy conservation measures, are created, developed and improved, the quantity and frequency of electricity usage by rural customers could decline. As with any internet service provider, rural electric cooperatives may face the risk of being outpaced by technological advancements. While fiber broadband is currently a leading technology, the rise of 5G satellite internet, and other emerging technology, could potentially disrupt the broadband market. Advances in technology and conservation that cause our electric system members' power supply, transmission and/or distribution facilities to become obsolete prior to the maturity of loans secured by these assets could have an adverse impact on the ability of our members to repay such loans, which could result in an increase in nonperforming or restructured loans. These conditions could negatively impact the credit quality of our loan portfolio and financial results.

 We may obtain entities or other assets through foreclosure, which would subject us to the same performance and financial risks as any other owner or operator of similar businesses or assets.
 As a financial institution, from time to time we may obtain entities and assets of borrowers in default through foreclosure proceedings. If we become the owner and operator of entities or assets obtained through foreclosure, we are subject to the same performance and financial risks as any other owner or operator of similar assets or entities. In particular, the value of the foreclosed assets or entities may deteriorate and have a negative impact on our results of operations. We assess foreclosed assets, if any, for impairment periodically as required under generally accepted accounting principles in the U.S. ("U.S. GAAP"). Impairment charges, if required, represent a reduction to earnings in the period of the charge. There may be substantial judgment used in the determination of whether such assets are impaired and in the calculation of the amount of the impairment. In addition, when foreclosed assets are sold to a third party, the sale price we receive may be below the amount previously recorded in our financial statements, which will result in a loss being recorded in the period of the sale.

 The nonperformance of our derivative counterparties could impair our financial results.
 We use interest rate swaps to manage interest rate risk. There is a risk that the counterparties to these agreements will not perform as agreed, which could adversely affect our results of operations. The nonperformance of a counterparty on an agreement would result in the derivative no longer being an effective risk-management tool, which could negatively affect our overall interest rate risk position. In addition, if a counterparty fails to perform on a derivative obligation, we could incur a financial loss to replace the derivative with another counterparty and/or a loss through the failure of the counterparty to pay us amounts owed. After taking into consideration master netting agreements for our interest rate swaps, we were in a net receivable position of $506 million and a net payable position of $2 million as of May 31, 2025.

 A decline in our credit rating could trigger payments under our derivative agreements, which could impair our financial results.
 We have certain interest rate swaps that contain credit risk-related contingent features referred to as rating triggers. Under certain rating triggers, if the credit rating for either counterparty falls to the level specified in the agreement, the other counterparty may, but is not obligated to, terminate the agreement. If either counterparty terminates the agreement, a net payment may be due from one counterparty to the other based on the prevailing fair value, excluding credit risk, of the underlying derivative instrument. In the event that we are required to make a payment as a result of a rating trigger, it could have a material adverse impact on our financial results. These rating triggers are based on our senior unsecured credit ratings by Moody's Investors Service ("Moody's") and S&P Global Inc. ("S&P"). Based on our interest rate swap agreements subject to rating triggers, if our senior unsecured ratings fell to or below Baa2 by Moody's or below BBB by S&P, and the agreements were consequently terminated as of May 31, 2025, all agreements for which we owe amounts when netted for each counterparty pursuant to a master netting agreement were in a net payable position of approximately $2 million as of that date.

 Liquidity Risks

 If we are unable to access the capital markets or other external sources for funding, our liquidity position may be negatively affected and we may not have sufficient funds to meet all of our financial obligations as they become due.
 We depend on access to the capital markets and other sources of financing, such as bank revolving credit agreements, investments from our members, private debt issuances through Farmer Mac and the Guaranteed Underwriter Program, to fund new loan advances, refinance our long- and short-term debt and, if necessary, to fulfill our obligations under our guarantee and repurchase agreements. Prolonged market disruptions, downgrades to our long-term and/or short-term debt ratings, adverse changes in our business or performance, downturns in the electric industry and other events over which we have no control may deny or limit our access to the capital markets and/or subject us to higher costs for such funding. Our access to other sources of funding also could be limited by the same factors, by adverse changes in the business or performance of our members, by the banks committed to our revolving credit agreements or Farmer Mac, or by changes in federal law or the Guaranteed Underwriter Program. Our funding needs are determined primarily by scheduled short- and long-term debt maturities and the amount of our loan advances to our borrowers relative to the scheduled payment amortization of loans previously made by us. If we are unable to timely issue debt in the capital markets or obtain funding from other sources, we may not have the funds to meet all of our obligations as they become due.

 A reduction in the credit ratings for our debt could adversely affect our liquidity and/or cost of debt.
 Our credit ratings are important to maintaining our liquidity position. We currently contract with three nationally recognized statistical rating organizations to receive ratings for our secured and unsecured debt and our commercial paper. In order to access the commercial paper markets at current levels, we believe that we need to maintain our short-term ratings at the current level from Moody's and Fitch Ratings ("Fitch"). Changes in rating agencies' rating methodology, actions by governmental entities or others, deterioration in the credit quality of our loan portfolios, increased leverage and other factors could adversely affect the credit ratings on our debt. A reduction in our credit ratings could adversely affect our liquidity, increase our borrowing costs or limit our access to the capital markets and the sources of financing available to us. A significant increase in our cost of borrowings and interest expense could impact our competitive position within the industry.

 Our ability to maintain compliance with the covenants related to our revolving credit agreements, collateral trust bond and medium-term note indentures and debt agreements could affect our ability to retire patronage capital, result in the acceleration of the repayment of certain debt obligations, adversely impact our credit ratings and hinder our ability to obtain financing.
 We must maintain compliance with all covenants and conditions related to our revolving credit agreements and debt indentures. We are required to maintain a minimum average adjusted times interest earned ratio ("TIER") for the six most recent fiscal quarters of 1.025 and an adjusted leverage ratio of no more than 10-to-1. In addition, we must maintain loans pledged as collateral for various debt issuances at or below 150% of the related secured debt outstanding as a condition to borrowing under our revolving credit agreements. If we were unable to borrow under the revolving credit agreements, our short-term debt ratings would likely decline, and our ability to issue commercial paper could become significantly impaired. Our revolving credit agreements also require that we earn a minimum annual adjusted TIER of 1.05 in order to retire patronage capital to members. See "Item 7. MD&A—Non-GAAP Financial Measures and Reconciliations" for additional

 information on our non-GAAP financial measures and a reconciliation to the most comparable U.S. GAAP financial measures.

 Pursuant to our collateral trust bond indentures, we are required to maintain eligible pledged collateral at least equal to 100% of the principal amount of the bonds issued under the indenture. Pursuant to one of our collateral trust bond indentures and our medium-term note indenture, we are required to limit senior indebtedness to 20 times the sum of our members' equity, subordinated deferrable debt and members' subordinated certificates. If we were in default under our collateral trust bond or medium-term note indentures, the existing holders of these securities have the right to accelerate the repayment of the full amount of the outstanding debt of the security before the stated maturity of such debt. That acceleration of debt repayments poses a significant liquidity risk, as we might not have enough cash or committed credit available to repay the debt. In addition, if we are not in compliance with the collateral trust bond and medium-term note covenants, we would be unable to issue new debt securities under such indentures. If we were unable to issue new collateral trust bonds and medium-term notes, our ability to fund new loan advances and refinance maturing debt would be impaired.

 We are required to pledge eligible distribution system or power supply system loans as collateral equal to at least 100% of the outstanding balance of debt issued under a revolving note purchase agreement with Farmer Mac. We also are required to pledge distribution or power supply loans as collateral equal to at least 100% of the outstanding balance of debt under the Guaranteed Underwriter Program. Collateral coverage less than 100% for either of these debt programs constitutes an event of default, which if not cured within 30 days, could result in creditors accelerating the repayment of the outstanding debt principal before the stated maturity. An acceleration of the repayment of debt could pose a liquidity risk if we had insufficient cash or committed credit available to repay the debt. In addition, we would be unable to issue new debt securities under the applicable debt agreement, which could impair our ability to fund new loan advances and refinance maturing debt.

 Market Risks

 Changes in the level and direction of interest rates or our ability to successfully manage interest rate risk could adversely affect our financial results and condition.
 Our primary strategies for managing interest rate risk include the use of derivatives in order to manage the timing of cash flows between interest-earning assets and interest-bearing liabilities. We face the risk that changes in interest rates could reduce our net interest income and our earnings. Fluctuations in interest rates, including changes in the relationship between short-term rates and long-term rates, may affect the pricing of loans to borrowers and our cost of funds, which could adversely affect the difference between the interest that we earn on assets and the interest we pay on liabilities used to fund assets. Such changes may also result in increased costs to hedge existing interest rate risk, which may have an adverse impact on the net interest income, earnings and cash flows. See "Item 7. MD&A—Market Risk" for additional information.

 Operations and Business Risks

 Damage to our reputation could harm our business, including our ability to attract highly skilled employees and our competitive position.
 Our ability to attract business from our members and investors as well as our ability to attract highly skilled employees is impacted by our reputation. Harm to our reputation can be attributed to various sources including, but not limited to, actual or perceived activities such as fraud, misconduct or unethical behavior of our officers, directors, employees, contractors and other representatives. Further, reputation damage may result from human error or systems failures viewed as having harmed our members without involving misconduct, including service disruptions or negative perceptions regarding our ability to maintain the security of our technology systems and protect member data. Negative publicity concerning actual or alleged conduct in activities such as lending practices, data security, corporate governance and failure to deliver minimum or required standards of service or quality may result in negative public opinion and may damage our reputation, which could result in the loss of business.

 Cybersecurity incidents affecting our information technology systems, or those managed by third parties, may damage relationships with our members or subject us to reputational, financial, legal or operational consequences.

 We use our IT networks and related systems to access, store, transmit and manage or support a variety of our business processes and information, as well as that of our members. We face risks associated with cybersecurity incidents and other disruptions of our IT networks and related systems. Cybersecurity incidents pose a risk to the security of our members' strategic business information and the confidentiality and integrity of our data, which include strategic and proprietary information. This risk continues to increase and cyberattack methods continue to evolve in sophistication, velocity and frequency. The use of new and emerging technologies through artificial intelligence and machine learning may intensify this risk as adversaries may leverage artificial intelligence to craft more sophisticated phishing schemes, automate social engineering attacks or generate malware with increased speed. Cybersecurity incidents may occur from a variety of sources, such as foreign governments, hackers or other well-financed entities, and may originate from less regulated and remote areas of the world. Employee errors, malfeasance, technology failures and other irregularities may also contribute to these events. Any such cybersecurity incident can result in a loss of our own business information or information we process on behalf of our members or others, a loss of integrity of such information, a delay or inability to provide service of affected products to our members, material harm to our financial condition or cash flows, damage to our reputation, including a loss of confidence in the security of our products and services, and significant legal and financial exposure, including regulatory scrutiny or enforcement, litigation and damage to our stakeholder relationships. Because the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently, we may be unable to anticipate these techniques or implement adequate preventative measures. As a result, cyber-related attacks may remain undetected for an extended period and may be costly to remediate.

 Our business depends on the reliable and secure operation of computer systems, network infrastructure and other information technology managed by third parties including, but not limited to, our service providers for external storage and processing of our information on cloud-based systems; our consulting and advisory firms and contractors that have access to our confidential and proprietary data; and administrators for our employee payroll and benefits management. We have limited control and visibility over third-party systems that we rely on for our business. The occurrence of a cybersecurity incident could result in damage to our third parties' operations. The failure of third parties to provide services agreed upon through service-level agreements, whether as a result of the occurrence of a cybersecurity incident or other event, could result in the loss of access to our data, the loss of integrity of our data, disruptions to our corporate functions, loss of business opportunities or reputational damage, or otherwise adversely impact our financial results and cause significant costs and liabilities. While we may be entitled to damages if our third-party service providers fail to satisfy their security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.

 While CFC maintains insurance coverage that, subject to policy terms and conditions, covers certain aspects of cyber risks, including business interruptions caused by cybersecurity incidents on information technology systems managed by third parties, such insurance coverage may be insufficient to cover all losses. Our failure to comply with applicable laws, regulations or standards regarding data security and privacy could result in fines, sanctions and litigation. Additionally, new or increased laws, regulations, enforcement activity and regulatory guidance in the areas of data security and privacy may increase our costs and our members' costs, limit our ability to grow our business or otherwise harm our business.

 Our elected directors also serve as officers or directors of certain of our individual member cooperatives, which may result in a potential conflict of interest with respect to loans, guarantees and extensions of credit that we may make to or on behalf of such member cooperatives.
 In accordance with our charter documents and the purpose for which we were formed, we lend only to our members and associates. CFC's directors are elected or appointed from our membership, with 10 director positions filled by directors of members, 10 director positions filled by general managers or chief executive officers of members, two positions appointed by NRECA until June 2027 and one at-large position that must, among other things, be a director, financial officer, general manager or chief executive of one of our members. Upon the termination of the two positions appointed by NRECA in June 2027, two at-large positions will be filled by an executive staff member of our Class B members and a director of our Class D members. CFC currently has loans outstanding to members that are affiliated with CFC directors and may periodically extend new loans to such members. The relationship of CFC's directors to our members may give rise to conflicts of interests from time to time. See "Item 13. Certain Relationships and Related Transactions, and Director Independence—

 Review and Approval of Transactions with Related Persons" for a description of our policies with regard to approval of loans to members affiliated with CFC directors.

 Natural or man-made disasters, including widespread health emergencies, or other external events beyond our control such as acts of terrorism or war, could disrupt our business and adversely affect our results of operations and financial condition.

 Our operations may be subject to disruption due to the occurrence of natural disasters, acts of terrorism or war, public health emergencies, or other unexpected or disastrous conditions, events or emergencies beyond our control, some of which may be intensified by the effects of a government response to the event, or climate change.

 Labor shortages and supply chain complications exacerbated by, among other things, the invasion of Ukraine by Russia and subsequent sanctions and export controls against Russia and increased geopolitical tensions between the United States and Canada, China and Mexico, has contributed to continuing inflationary pressures. While general inflation in the United States has decreased from peak levels in 2022, it remains at levels not experienced in recent decades. Certain utility assets of our members, such as transformers and solar panels, are highly sensitive to supply chain complications. Rising energy prices, interest rates and wages, and the pending tariffs to be imposed by the United States on imported goods may increase our operating costs, as well as both the operating and borrowing costs of our members, potentially disrupting our business.

 Although we have implemented a business continuity management program that we enhance on an ongoing basis, there can be no assurance that the program will adequately mitigate the risks of business disruptions. Further, events such as natural disasters and public health emergencies may divert our attention away from normal operations and limit necessary resources. We generally must resume operations promptly following any interruption. If we were to suffer a disruption or interruption and were not able to resume normal operations within a period consistent with industry standards, our business, financial condition or results of operations could be adversely affected in a material manner. In addition, depending on the nature and duration of the disruption or interruption, we might become vulnerable to fraud, additional expense or other losses, or to a loss of business.

 Competition from other lenders could adversely impact our financial results.
 We compete with other lenders for the portion of the rural utility loan demand for which RUS will not lend and for loans to members that have elected not to borrow from RUS. The primary competition for the non-RUS loan volume is from CoBank, ACB, a federally chartered instrumentality of the U.S. that is a member of the Farm Credit System. As a government-sponsored enterprise, CoBank, ACB has the benefit of an implied government guarantee with respect to its funding. Competition may limit our ability to raise rates to adequately cover increases in costs, which could have an adverse impact on our results of operations.

 The failure to attract, retain or motivate highly skilled and qualified employees could impair our ability to successfully execute our strategic plan and otherwise adversely affect our business.

 We rely on our employees' depth of knowledge of CFC and its related industries to run our business operations successfully. Because many of our business operations involve significant member-facing interaction with a relatively stable base of long-standing member-borrowers, we place a priority on the retention of high-performing employees with extensive experience in the rural utility industry. Our ability to implement our strategic plan and our future success depends on our ability to attract, retain and motivate highly skilled and qualified employees. The failure to attract or retain, including due to retirement, or replace a sufficient number of appropriately skilled and key employees could place us at a significant competitive disadvantage and prevent us from successfully implementing our strategy. Further, the marketplace for skilled employees is becoming more competitive, which means the cost of hiring, incentivizing and retaining skilled employees may continue to increase. The failure to attract, retain or motivate skilled employees, along with the increased costs, could impair our ability to achieve our performance targets and otherwise have a material adverse effect on our business, financial condition and results of operations.

 Regulatory and Compliance Risks

 Loss of our tax-exempt status could adversely affect our earnings.
 CFC has been recognized by the Internal Revenue Service as an organization for which income is exempt from federal taxation under Section 501(c)(4) of the Internal Revenue Code (other than any income from an unrelated trade or business). In order to maintain CFC's tax-exempt status, it must continue to operate exclusively for the promotion of social welfare by operating on a cooperative basis for the benefit of its members by providing them cost-based financial products and services consistent with sound financial management, and no part of CFC's net earnings may inure to the benefit of any private shareholder or individual other than the allocation or return of net earnings or capital to its members in accordance with CFC's bylaws and incorporating statute in effect in 1996.

 If CFC were to lose its status as a 501(c)(4) organization, it would become a taxable cooperative and would be required to pay income tax based on its taxable income. If this event occurred, we would evaluate all options available to modify CFC's structure and/or operations to minimize any potential tax liability.

 As a tax-exempt cooperative and nonbank financial institution, our lending activities are not subject to the regulations and oversight of U.S. financial regulators such as the Federal Reserve, the Federal Deposit Insurance Corporation or the Office of Comptroller of Currency. Because we are not under the purview of such regulation, we could engage in activities that could expose us to greater credit, market and liquidity risk, reduce our safety and soundness and adversely affect our financial results.
 Financial institutions subject to regulations, oversight and monitoring by U.S. financial regulators are required to maintain specified levels of capital and may be restricted from engaging in certain lending-related and other activities that could adversely affect the safety and soundness of the financial institution or are considered conflicts of interest. As a tax-exempt, nonbank financial institution, we are not subject to the same oversight and supervision. There is no federal financial regulator that monitors compliance with our risk policies and practices or that identifies and addresses potential deficiencies that could adversely affect our financial results. Without regulatory oversight and monitoring, there is a greater potential for us to engage in activities that could pose a risk to our safety and soundness relative to regulated financial institutions.

 Changes in accounting standards or assumptions in applying accounting policies could materially impact our financial statements.
 Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Some of these policies require the use of estimates and assumptions that may affect the reported carrying amount of our assets or liabilities and our results of operations. We consider the accounting policies that require management to make difficult, subjective and complex judgments about matters that are inherently uncertain as our most critical accounting estimates. The use of reasonably different estimates and assumptions could have a material impact on our financial statements or if the assumptions, estimates or judgments were incorrectly made, we could be required to correct and restate prior-period financial statements. In addition, from time to time, the Financial Accounting Standards Board ("FASB") and the SEC change the accounting and reporting standards that govern the preparation of our financial statements. These changes can be hard to predict and can materially impact how CFC records and reports its financial condition and results of operations. We could be required to apply a new or revised standard retroactively or apply an existing standard differently, on a retroactive basis, in each case potentially resulting in restating prior-period financial statements. For information on what we consider to be our most critical accounting estimates and recent accounting changes, see "Item 7. MD&A—Critical Accounting Estimates" and "Note 1—Summary of Significant Accounting Policies" to our consolidated financial statements.

 Item 1B. Unresolved Staff Comments

 None.

 Item 1C. Cybersecurity

 Cybersecurity risk management is a core component of our enterprise risk-management framework. Cybersecurity incidents and threats pose a risk to the disruption of our business operations, including the confidentiality, integrity and availability of data and information. CFC's cybersecurity program is designed to manage operational risks associated with the ever-evolving nature of cybersecurity threats. Because these risks could have a material adverse impact on our operations and reputation, both management and the CFC Board of Directors are actively engaged in the oversight of the cybersecurity program and our continuous efforts in monitoring, measuring and managing the risks.

 Risk Management and Strategy

 The primary goal of CFC's cybersecurity operations is to prevent, identify, mitigate and respond on a timely basis to cybersecurity threats in order to reduce operational risk and business impact. Our strategy encompasses technology, process and people. The technology components are designed to provide multiple layers of system security, controls and monitors for our infrastructure, data and applications. Our security infrastructure and resources are focused on the monitoring of threats and the defense of our external and internal networks, endpoints, data resources and identity management.

 We use risk-based processes to prioritize the resources that manage vulnerabilities, threats, incident responses and operational changes. The risk-based approach ensures we are taking action on the threats, events and incidents that have the highest likelihood of impacting our business and members. We maintain cybersecurity incident procedures that identify the activities, responses and escalation procedures to be executed upon detection of a potential cybersecurity incident. These procedures are a critical component of CFC's Crisis Management Plan and business continuity efforts.

 We continue to invest in our cybersecurity program to help ensure that we have the necessary resources to execute our business operations and that our workforce is prepared to work in an active cyber-threat environment. These resources also include external service providers with experience in third-party risk monitoring and cybersecurity threat intelligence, detection and response. Mandatory training is required on a quarterly basis for all CFC employees to promote leading practices in protecting information, data and operations in a continually changing environment. We established requirements regarding the use of company-approved generative artificial intelligence tools to ensure that all employees utilize such tools in a manner that safeguards sensitive information and aligns with legal requirements and CFC's ethical standards.

 The effectiveness of our cybersecurity operations is regularly examined and tested by third-party vendors who specialize in cybersecurity risk management. We regularly employ such vendors to test the effectiveness of our security controls, including penetration testing. External vendors are engaged at least on an annual basis to facilitate incident response exercises and training. We use external risk management services to assess and monitor cybersecurity risk associated with third-party service providers. Finally, we review the maturity of our program's design and control environment's effectiveness through regular internal assessments and examinations.

 Governance

 Our board of directors oversees the company's cybersecurity risk-management program. Management reports at least quarterly to the board on matters related to CFC's security operations, potential threats, industry-wide trends and any other related information requested by the board. The reports include information on significant cybersecurity incidents, if any, and management actions to protect CFC. We promptly notify the board of directors upon the occurrence of a significant cybersecurity incident so it may properly evaluate the incident, including management's remediation plan.

 In addition to the regular cybersecurity program reports, the board monitors cybersecurity risk and program effectiveness through internal audit and our enterprise risk management reporting framework. On an annual basis, members of our staff responsible for cybersecurity provide the board an overview of the company's technology strategy and planned activities to continually improve the cybersecurity program, as well as threats and cybersecurity incidents. Further, on at least an annual basis, the board of directors reviews management reports concerning the disclosure controls and procedures in place to enable CFC to make accurate and timely disclosures about any material cybersecurity incidents.

 Role of Management

 Management is directly involved in steering the company's cybersecurity program employing a multi-disciplinary approach that operates through a "three lines of defense" model. Management's approach helps ensure the organization works collaboratively to monitor, assess and respond to cybersecurity incidents at all levels and functions consistent with our incident response procedures and corporate practices.

 Our first line of defense includes our cybersecurity team lead by our Director, Information Security, who work to ensure that the day-to-day execution of the company's technology and security operations are in alignment with corporate policies and procedures. Our Director, Information Security, who reports to our Chief Operating Officer ( " COO"), has over a decade of information security management experience and is a Certified Information Systems Security Professional. Our COO and Director, Information Security are also responsible for information security policies, organizational readiness and the escalation of certain cybersecurity incidents from our cybersecurity personnel to senior management based on our incident response procedures.

 Our second line of defense includes our Cybersecurity Committee and the enterprise risk-management framework under the direction of the Chief Risk Officer to monitor cybersecurity functions and risk management. Our Cybersecurity Committee is composed of members of management including, but not limited to, the COO, Chief Risk Officer, General Counsel and Vice President, Internal Audit. The Cybersecurity Committee helps ensure corporate policy compliance and reports directly to the board of directors regarding material cybersecurity incidents and emerging threats.

 Our third line of defense is the internal audit function led by our Vice President, Internal Audit, which plays a crucial role by providing independent and objective assurances on the design and operating effectiveness of our cybersecurity risk management and internal controls through the performance of audits and reviews. Internal Audit engages external consultants and subject matter experts as appropriate to assist in the assessment of management's cybersecurity program and reports the results directly to the b oard.

 We have not experienced any material cybersecurity incidents that have impacted our business, results of operations or financial condition to date. See "Item 1A. Risk Factors" for a discussion of our risks related to cybersecurity.

 Item 2. Properties

 CFC owns an office building, with approximately 141,000 gross square footage, in Loudoun County, Virginia, that serves as its headquarters.

 Item 3. Legal Proceedings

 From time to time, CFC is subject to certain legal proceedings and claims in the ordinary course of business, including litigation with borrowers related to enforcement or collection actions. Management presently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm our financial position, liquidity or results of operations. CFC establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Accordingly, no reserve has been recorded with respect to any legal proceedings at this time.

 Item 4. Mine Safety Disclosures

 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6. Reserved

 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")

 INTRODUCTION

 Our financial statements include the consolidated accounts of CFC and NCSC. 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 information on the business structure, mission, principal purpose and core business activities of each of these entities under "Item 1. Business." Unless stated otherwise, references to "we," "our" or "us" relate to CFC and its consolidated entities.

 The following MD&A is intended to enhance the understanding of our consolidated financial statements by providing 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, our audited consolidated financial statements and related notes for the fiscal year ended May 31, 2025 included in this Report and additional information contained elsewhere in this Report, including the risk factors discussed under "Item 1A. Risk Factors."

 Our fiscal year begins on June 1 and ends on May 31. References to "FY2025," "FY2024" and "FY2023" refer to the fiscal years ended May 31, 2025, 2024 and 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 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 and total equity to exclude the non-cash impact of the accounting for derivative financial instruments; (iii) adjusting total debt outstanding to exclude members' subordinated certificates and 50% of the subordinated deferrable debt; (iv) adjusting total equity to include members' subordinated certificates and 50% of the subordinated deferrable debt, and exclude cumulative derivative forward value gains (losses) and the amounts of accumulated other comprehensive income (loss) ("AOCI"); and (v) adjusting CFC equity to exclude derivative forward value gains (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 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

 Table 1 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." See "Item 7. MD&A—Consolidated Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended May 31, 2024 ("2024 Form 10-K") for a comparative discussion of our consolidated results of operations between FY2024 and FY2023.

 Table 1: Net Income and TIER

 Variance

 2025
 2024
 2023
 2025 versus 2024

 2024 versus 2023

 $
 $
 $
 $
 (414,302)
 $
 52,729

 TIER(1)

 1.10
 1.41
 1.48
 (0.31)
 (0.07)

 (1)Calculated based on net income (loss) plus interest expense for the period divided by interest expense for the period.

 Table 2 below presents a reconciliation of net income between FY2025 and FY2024.

 Table 2: Reconciliation of Net Income

 FY2025 versus FY2024—Key Highlights

 • A shift to losses from gains was recorded on our derivatives portfolio of $398 million, as we recorded derivative losses of $6 million for FY2025, primarily attributable to decreases in interest rates across the swap curve, with the exception of the 30-year swap rate, which increased slightly during FY2025. In comparison, we recorded derivative gains of $392 million for FY2024, primarily due to increases in the medium- and longer-term swap interest rates during FY2024.
 • Operating and other expenses increased by $21 million for FY2025 compared with FY2024, primarily driven by higher expenses recorded for salaries and employee benefits, general and administrative, and an impairment loss of $8 million on an equity investment.
 • Gains recorded on our investment securities decreased by $5 million, primarily due to period-to-period market fluctuations in fair value.
 • Net interest income increased by $7 million, attributable to an increase in average interest-earning assets of $1,772 million, or 5%, partially offset by a decrease in the net interest yield of 2 basis points, or 3%, to 0.72%.
 • We recorded a benefit for credit losses of $8 million for FY2025, resulting primarily from a decrease in the asset-specific allowance for a nonperforming loan attributable to higher actual than expected payments received on this loan during FY2025. In comparison, we recorded a benefit for credit losses of $5 million for 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.
 • The decrease in TIER for FY2025 compared with FY2024 was driven by the combined impact of a decrease in net income primarily attributable to our derivative portfolio forward value change as discussed above and an increase in interest expense during FY2025.

 Debt-to-Equity Ratio

 During FY2025, we refined our methodology for calculating the debt-to-equity ratio to revise from total liabilities divided by total equity to total debt outstanding divided by total equity. This change was driven by a change in our methodology for calculating the adjusted debt-to-equity ratio, which is discussed in more detail under the section "Non-GAAP Financial Measures and Reconciliations" in this Report. The debt-to-equity ratio under the revised methodology was 11.20 and 10.86 as of May 31, 2025 and 2024, respectively. The increase in the debt-to-equity ratio during FY2025 was due to an increase in debt to fund loan growth, partially offset by an increase in total equity. The increase in total equity was primarily driven by our reported net income of $140 million for FY2025, partially offset by the CFC Board of Directors' authorized patronage capital retirement of $47 million in July 2024.

 Non-GAAP Adjusted Results

 Adjusted Net Income and Adjusted TIER

 Table 3 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." See "Item 7. MD&A—Consolidated Results of Operations" in our 2024 Form 10-K for a comparative discussion of our consolidated results of operations between FY2024 and FY2023.

 Table 3: Adjusted Net Income and Adjusted TIER

 Variance

 2025
 2024
 2023
 2025 versus 2024

 2024 versus 2023

 Adjusted net income

 $
 245,084
 $
 289,445
 $
 249,320
 $
 (44,361)
 $
 40,125

 Adjusted TIER
 1.18
 1.24
 1.25
 (0.06)
 (0.01)

 Table 4 below presents a reconciliation of adjusted net income between FY2025 and FY2024.

 Table 4: Reconciliation of Adjusted Net Income

 FY2025 versus FY2024—Key Highlights

 • Adjusted net interest income decreased by $21 million for FY2025 compared with FY2024, driven by a decrease in the adjusted net interest yield of 11 basis points, or 10%, to 1.00%, partially offset by an increase in average interest-earning assets of $1,772 million, or 5%.
 • We discuss the variances in the other components above under our net income key highlights.
 • The decrease in adjusted TIER for FY2025 compared with FY2024 was primarily driven by the increased adjusted interest expense and operating and other expenses during FY2025.

 Adjusted Debt-to-Equity Ratio

 During FY2025, we refined our methodology for calculating the adjusted debt-to-equity ratio. Consequently, we revised our internally established adjusted debt-to-equity threshold from 6-to-1 to 8.5-to-1. The adjusted debt-to-equity ratio under the revised methodology was 7.39 and 7.27 as of May 31, 2025 and 2024, respectively. The increase in the adjusted debt-to-equity ratio during FY2025 was due to an increase in adjusted total debt outstanding resulting from additional borrowings to fund growth in our loan portfolio, partially offset by an increase in adjusted total equity. The increase in adjusted total equity was primarily due to a combined impact of our adjusted net income of $245 million for FY2025 and issuances of

 subordinated deferrable debt during FY2025, partially offset by a decrease in equity of $47 million attributable to the CFC Board of Directors' authorized patronage capital retirement in July 2024, as discussed above.

 We provide a more detailed discussion of the revised methodology for calculating the adjusted debt-to-equity ratio and a reconciliation of our non-GAAP adjusted measures to the most directly comparable U.S. GAAP measures under the section "Non-GAAP Financial Measures and Reconciliations" in this Report.

 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 telecom.

 Loans to members totaled $37,080 million as of May 31, 2025, an increase of $2,538 million, or 7%, from May 31, 2024, reflecting net increases in long-term and line of credit loans of $1,405 million and $1,130 million, respectively. Of the increase in line of credit loans, 78% was attributable to borrowings under emergency line of credit loans by our members primarily for recovery costs for Hurricane Helene, which impacted the Southeastern United States in September 2024. The remaining 22% was primarily attributable to funding provided for member working capital and NCSC renewable project financing. Our loan portfolio composition remained largely unchanged from May 31, 2024 with 79% of loans outstanding to CFC distribution borrowers, 16% to CFC power supply borrowers, 3% to NCSC electric borrowers and 2% to NCSC telecom borrowers as of May 31, 2025.

 The overall credit quality of our loan portfolio remained strong as of May 31, 2025. We had no loan charge-offs during FY2025 and FY2024. We recorded $1 million in net loan recoveries to previously charged-off loan amounts during FY2024.

 We had one loan totaling $26 million and $49 million classified as nonperforming as of May 31, 2025 and 2024, respectively. The reduction in the nonperforming loan was due to payments received on this loan during FY2025.

 Our allowance for credit losses and allowance coverage ratio decreased to $41 million and 0.11%, respectively, as of May 31, 2025, from $49 million and 0.14%, respectively, as of May 31, 2024. The $8 million decrease in the allowance for credit losses was attributable to a reduction in the asset-specific allowance due to higher actual than expected payments received on a nonperforming loan during FY2025.

 Financing and Liquidity

 Total debt outstanding increased by $2,051 million, or 6%, to $34,769 million as of May 31, 2025, compared with May 31, 2024, primarily due to borrowings to fund the increase in loans to our members. During FY2025, we issued:

 • Unsecured long-term dealer medium-term notes totaling approximately $2,400 million, of which $1,800 million was at a weighted average fixed interest rate of 4.65% with an average term of four years, and $600 million was at floating interest rates with an average term of two years; and
 • Secured long-term debt totaling $1,450 million at a weighted average fixed interest rate of 4.94% with an average term of 16 years.

 In addition, during FY2025, we issued a total of $44 million of 30-year subordinated deferrable interest notes ("subordinated notes") under a new subordinated debt program that was launched in November 2024. Subsequent to FY2025, we issued $525 million of dealer medium-term notes at a floating interest rate with a term of 18 months.

 During FY2025, Moody's Investors Service ("Moody's"), Fitch Ratings ("Fitch") and S&P Global Inc.("S&P") affirmed CFC's credit ratings and stable outlook. On June 2, 2025, at our request, S&P withdrew its "A-2" short-term issue ratings on CFC's commercial paper program. The "A-" long-term issuer credit rating, the stable outlook and the long-term issue ratings are unchanged as of the date of this Report.

 Our available liquidity consists of cash and cash equivalents, investments in debt securities, availability under committed bank revolving line of credit agreements, committed loan facilities under the Guaranteed Underwriter Program of the United

 States Department of Agriculture ("USDA") (the "Guaranteed Underwriter Program"), and a revolving note purchase agreement with Federal Agricultural Mortgage Corporation ("Farmer Mac"). As of May 31, 2025, our available liquidity totaled $7,612 million and was $1,158 million less than our total scheduled debt obligations over the next 12 months of $8,770 million. In addition to our existing available liquidity, we expect to receive $1,668 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 $2,885 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 $3,363 million over the last 12 fiscal quarter-end reporting periods. Our available liquidity as of May 31, 2025 was $1,727 million in excess of, or 1.3 times, our total scheduled debt obligations, excluding member short-term investments, over the next 12 months of $5,885 million.

 Electric Cooperative Industry Trends and Developments

 Emerging developments and trends in the electric cooperative sector continue to present opportunities as well as challenges for our electric cooperative members. These trends include (i) changing federal government programs and policies for electric utilities; (ii) increased electricity demand; (iii) grid reliability risk; and (iv) expanded investments by many electric cooperatives to deploy broadband services.

 Changing Federal Government Programs and Policies

 Following the 2024 election, the new Administration and Congress are changing policies related to the electric utility industry. Congress previously created various funding opportunities that electric cooperatives may take advantage of when deploying renewable energy and other clean energy technologies through the 2022 Inflation Reduction Act ("IRA"), Congress recently passed the One Big Beautiful Bill Act, which significantly reduces federal incentives for renewable energy development. These changes are expected to make it more challenging for electric cooperatives to affordably expand renewable energy generation within their portfolios. In contrast, incentives for technologies such as battery storage and carbon capture remain largely unchanged. Congress is also attempting to pass permitting reform, which will streamline the permitting process and reduce costs of grid infrastructure improvements.

 The federal government is undergoing a deregulatory push that seeks to reduce the amount of federal review and other requirements for grid investments. For example, the Environmental Protection Agency ("EPA") is in the process of revising greenhouse gas emission requirements for new and existing coal and natural gas power plants. This may impact coal plant retirement schedules and provide certainty surrounding building new natural gas plants to meet growing electricity demand. The Administration is assessing the Federal Emergency Management Agency ("FEMA"), including how to improve efficiencies and the appropriate role of federal and state governments in the allocation and distribution of disaster relief. Finally, the Administration is in the process of introducing tariffs on imported goods in order to improve the trade deficit and boost domestic manufacturing. Certain utility assets, such as transformers, solar panels and batteries, are highly sensitive to global supply chain changes. While tariffs may increase short-term costs and lead times for key assets, they may also catalyze long-term supply chain resilience and encourage domestic manufacturing of utility assets. CFC and electric cooperative partners are monitoring the potential impact to cooperatives of these evolving changes in federal policy.

 Increased Electricity Demand

 According to S&P Global Inc., electricity demand is forecasted to grow substantially in all U.S. regions through 2040. Demand growth is driven primarily by new data centers and new manufacturing facilities in the coming decade followed by electric vehicle growth and beneficial electrification trends. The rapid expansion of artificial intelligence and cloud computing technologies is the primary driver of new data center construction, further accelerating electricity demand.

 Rural electric cooperatives have become increasingly supportive of beneficial electrification, which refers to the replacement of fossil fuel-powered systems with electrical ones, such as electric vehicles and heat pumps, in a way that reduces overall emissions, while providing benefits to the environment and to households. The increased support among electric cooperatives reflects an expectation that beneficial electrification will result in increased sales, while also saving money for members and reducing carbon emissions.

 Certain areas of the country will experience more growth than others, but we can expect significant investments in new power supply, transmission and other related infrastructure in order to meet this expected demand.

 Grid Reliability Risk

 The 2024 Long-Term Reliability Assessment by the North American Electric Reliability Corporation ("NERC") highlights the key risks to grid reliability. The report emphasizes challenges such as increased electricity demand and retirements of baseload power plants. It also highlights the risk of the transition to renewable energy sources, which presents reliability concerns due to their intermittent nature during a period of increased electricity demand.

 Other grid reliability risks include extreme weather events, including hurricanes, winter storms and heat waves, which can strain grid infrastructure and cause widespread outages. We have observed an increase in capital investments by electric cooperatives to proactively strengthen existing electric systems as well as replace systems in the aftermath of damage from weather-related incidents. The adverse impact on electric systems from weather-related incidents has resulted in a heightened awareness by electric cooperatives of the need to focus attention on making infrastructure upgrades to improve both the resiliency and reliability of electric systems. Cybersecurity threats also loom large, with increasing sophistication in attacks targeting critical infrastructure. Electric cooperatives are investing in operational resilience, including workforce training, cybersecurity preparedness and enhanced situational awareness tools.

 Expanded Investments to Deploy Broadband Services

 Many rural electric distribution cooperatives have made or are making infrastructure investments that include building fiber optic lines to improve electric grid system reliability, efficiency and cost savings, as fiber operations offer enhanced communication to monitor electric systems, identify outages and speed restoration. Some of these electric cooperatives are leveraging these fiber assets to offer access to broadband services to the communities they serve, either directly or by partnering with local telecommunication companies and others. We are currently aware of 216 broadband projects by different CFC member cooperatives, and we have financed or are financing 130 of these 216 broadband projects. Capital expenditures for the completion of these 216 broadband projects are expected to total approximately $13,680 million. We believe that the capital expenditures for the completion of the broadband projects that we have financed or are financing will total approximately $5,537 million. Our aggregate loans outstanding to CFC electric distribution cooperative members relating to broadband projects, which we started tracking in October 2017, increased to approximately $3,441 million as of May 31, 2025, from approximately $3,103 million as of May 31, 2024. The three states with the largest CFC loans outstanding for broadband projects were Arkansas, Indiana and Missouri, and broadband loans outstanding for these states totaled $411 million, $373 million and $356 million, respectively, as of May 31, 2025. Many of these broadband projects are also financially supported by various states and the federal government through grant programs, which reduces the investment risk for our electric cooperative members. Although we expect our member electric cooperatives to continue in their efforts to expand broadband access to unserved and underserved communities, their investment in broadband projects has slowed down in the recent year and is expected to increase at a slower rate.

 We believe the above trends and current investment priorities of our electric cooperative members will require funding and may result in an increased demand for capital from CFC.

 Outlook

 Macroeconomic Outlook

 Following its meeting held in June 2025, the Federal Open Market Committee ("FOMC") of the Federal Reserve kept its target for the federal funds rate unchanged at a range of 4.25%–4.50%. The FOMC reiterated that (i) the U.S. economy continues to expand at a solid pace, (ii) the unemployment rate remains low and (iii) inflation remains somewhat elevated. The Federal Reserve's June 2025 median projection for gross domestic product ("GDP") annual growth rate in 2025 is 1.4%, down from 1.7% in March 2025. Its median projection for Personal Consumption Expenditures ("PCE") inflation in 2025 is at 3.0%, up from 2.7% in March 2025, and for U.S. unemployment in 2025 is 4.5%, up from 4.4% in March 2025. As of June 2025, federal funds futures markets anticipated three 25 basis point rate cuts: one in the fourth quarter of 2025,

 another in the first quarter of 2026 and a final one in the second quarter of 2026. This would bring the target rate range to 3.50%–3.75% by mid-2026. Overall, the market expects interest rates to decline, with a steepening yield curve ahead.

 Projected Reported Results

 Based on our current forecast assumptions, including the yield curve forecast noted above, we project increases in our reported net interest income and net interest yield over the next 12 months compared with the 12-month period ended May 31, 2025. 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:
 • An increase in our adjusted net interest income over the next 12 months relative to the 12-month period ended May 31, 2025, primarily driven by an increase in interest-earning assets due to projected loan growth.
 • A slight decrease in adjusted net interest yield over the next 12 months, primarily due to the current shape of the yield curve, our baseline interest rates forecast and that our interest-earning assets, primarily lines of credit, are repricing faster than our interest-bearing liabilities. Additionally, lower-cost debt maturing in the near term will need to be refinanced at a forecasted higher interest rate. See "Market Risk—Interest Rate Risk Assessment" in this Report for an additional discussion.
 • A decrease in our adjusted net income over the next 12 months, primarily due to an increase in projected operating expenses.
 • A decrease in adjusted TIER over the next 12 months, primarily attributable to increases in projected adjusted interest expense and operating expenses.
 • An increase in our adjusted debt-to-equity, 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 14 years as of May 31, 2025, the unrealized periodic derivative forward value gains (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.

 Projected Loan Portfolio

 Based on our current forecast assumptions, we anticipate net loan growth of $2,059 million over the next 12 months. Historically line of credit loans activity has been fairly unpredictable due to the short-term and dynamic usage patterns of these facilities. Our baseline forecast scenario takes into account known likely near-term activity as well as historical analysis.

 CONSOLIDATED RESULTS OF OPERATIONS

 This section provides a comparative discussion of our consolidated results of operations between FY2025 and FY2024. Following this section, we provide a discussion and analysis of material changes in amounts reported on our consolidated balance sheet as of May 31, 2025 and 2024. 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. See "Item 7. MD&A—Consolidated Results of Operations" in our 2024 Form 10-K for a comparative discussion of our consolidated results of operations between FY2024 and FY2023.

 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 5 presents average balances for FY2025, FY2024 and FY2023, and 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 5 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."

 Table 5: Average Balances, Interest Income/Interest Expense and Average Yield/Cost

 2025
 2024
 2023

 Average Balance
 Interest Income/Expense
 Average Yield/Cost
 Average Balance
 Interest Income/Expense
 Average Yield/Cost
 Average Balance
 Interest Income/Expense
 Average Yield/Cost

 Long-term fixed-rate loans(1)

 $
 30,836,680
 $
 1,378,808
 4.47
 %
 $
 29,430,001
 $
 1,269,716
 4.31
 %
 $
 27,743,512
 $
 1,139,604
 4.11
 %

 Long-term variable-rate loans
 950,923
 60,737
 6.39
 900,005
 64,050
 7.12
 868,087
 46,045
 5.30

 3,970,042
 253,782
 6.39
 3,346,109
 234,387
 7.00
 2,842,700
 146,031
 5.14

 Other, net(2)

 —
 (1,984)
 —
 —
 (1,704)
 —
 —
 (1,536)
 —

 Total loans
 35,757,645
 1,691,343
 4.73
 33,676,115
 1,566,449
 4.65
 31,454,299
 1,330,144
 4.23

 Cash, time deposits and investment securities

 389,179
 11,890
 3.06
 699,185
 26,902
 3.85
 783,340
 21,585
 2.76

 Total interest-earning assets
 $
 36,146,824
 $
 4.71
 %
 $
 34,375,300
 $
 4.64
 %
 $
 32,237,639
 $
 4.19
 %

 Other assets, less allowance for credit losses(3)

 1,134,626
 1,103,602
 942,621

 Total assets(3)

 $
 37,281,450
 $
 35,478,902
 $
 33,180,260

 $
 2,233,253
 $
 109,565
 4.91
 %
 $
 2,412,511
 $
 132,746
 5.50
 %
 $
 2,718,934
 $
 98,751
 3.63
 %

 Other short-term borrowings
 1,628,653
 75,447
 4.63
 1,763,308
 92,147
 5.23
 2,102,341
 67,210
 3.20

 Short-term borrowings(4)

 3,861,906
 185,012
 4.79
 4,175,819
 224,893
 5.39
 4,821,275
 165,961
 3.44

 Medium-term notes
 10,338,977
 485,051
 4.69
 7,829,126
 327,014
 4.18
 6,206,717
 198,711
 3.20

 Collateral trust bonds(5)

 6,949,417
 275,593
 3.97
 7,223,988
 275,956
 3.82
 7,366,266
 271,247
 3.68

 6,360,355
 207,620
 3.26
 6,766,949
 216,379
 3.20
 6,364,870
 185,097
 2.91

 3,657,598
 149,380
 4.08
 3,694,975
 158,627
 4.29
 3,166,098
 108,557
 3.43

 Other notes payable
 4,610
 5.47
 2,219
 4.78
 3,424
 2.57

 1,303,900
 86,354
 6.62
 1,222,951
 82,611
 6.76
 991,488
 53,119
 5.36

 Subordinated certificates
 1,191,593
 53,016
 4.45
 1,209,490
 53,502
 4.42
 1,230,625
 53,728
 4.37

 Total interest-bearing liabilities
 $
 33,668,356
 $
 1,442,279
 4.28
 %
 $
 32,125,517
 $
 1,339,088
 4.17
 %
 $
 30,150,763
 $
 1,036,508
 3.44
 %

 Other liabilities(3)

 640,788
 533,544
 618,422

 Total liabilities(3)

 34,309,144
 32,659,061
 30,769,185

 Total equity(3)

 2,972,306
 2,819,841
 2,411,075

 Total liabilities and equity(3)

 $
 37,281,450
 $
 35,478,902
 $
 33,180,260

 Net interest spread(6)

 0.43
 %
 0.47
 %
 0.75
 %

 Impact of non-interest-bearing funding(7)

 0.29
 0.27
 0.23

 Net interest income/net interest yield(8)

 $
 260,954
 0.72
 %
 $
 254,263
 0.74
 %
 $
 315,221
 0.98
 %

 Adjusted net interest income/adjusted net interest yield:

 $
 4.71
 %
 $
 4.64
 %
 $
 4.19
 %

 1,442,279
 4.28
 1,339,088
 4.17
 1,036,508
 3.44

 Add: Net periodic derivative cash settlements interest (income) expense(9)

 (99,219)
 (1.36)
 (127,166)
 (1.67)
 (33,577)
 (0.44)

 Adjusted interest expense/adjusted average cost(10)

 $
 1,343,060
 3.99
 %
 $
 1,211,922
 3.77
 %
 $
 1,002,931
 3.33
 %

 Adjusted net interest spread(6)

 0.72
 %
 0.87
 %
 0.86
 %

 Impact of non-interest-bearing funding(7)

 0.28
 0.24
 0.22

 Adjusted net interest income/adjusted net interest yield(11)

 $
 360,173
 1.00
 %
 $
 381,429
 1.11
 %
 $
 348,798
 1.08
 %

 (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.
 (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 5 consist of commercial paper, select notes and daily liquidity fund notes. 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 5. 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 5, totaled $451 million, $1,021 million and $367 million as of May 31, 2025, 2024 and 2023, respectively.
 (5)Collateral trust bonds represent secured obligations sold to investors in the capital markets including also those issued in a private placement transaction.
 (6)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.
 (7)Includes other liabilities and equity.
 (8)Net interest yield is calculated based on net interest income for the period divided by total average interest-earning assets for the period.
 (9)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 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 $7,274 million, $7,597 million and $7,668 million for FY2025, FY2024 and FY2023, respectively.
 (10)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 in our consolidated statements of operations as a component of derivative gains (losses). Adjusted average cost is calculated based on the adjusted interest expense for the period divided by total average interest-bearing liabilities during the period.
 (11)Adjusted net interest yield is calculated based on adjusted net interest income for the period divided by total average interest-earning assets for the period.

 Table 6 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.

 Table 6: Rate/Volume Analysis of Changes in Interest Income/Interest Expense

 2025 versus 2024

 2024 versus 2023

 Total
 Variance Due To:(1)

 Total
 Variance Due To:(1)

 Variance
 Volume
 Rate
 Variance
 Volume
 Rate

 Interest income:

 Long-term fixed-rate loans
 $
 109,092
 $
 60,689
 $
 48,403
 $
 130,112
 $
 69,275
 $
 60,837

 Long-term variable-rate loans
 (3,313)
 3,624
 (6,937)
 18,005
 1,693
 16,312

 19,395
 43,705
 (24,310)
 88,356
 25,860
 62,496

 Other, net
 (280)
 —
 (280)
 (168)
 —
 (168)

 Total loans
 124,894
 108,018
 16,876
 236,305
 96,828
 139,477

 Cash, time deposits and investment securities

 (15,012)
 (11,928)
 (3,084)
 5,317
 (2,319)
 7,636

 Total interest income
 $
 109,882
 $
 96,090
 $
 13,792
 $
 241,622
 $
 94,509
 $
 147,113

 Interest expense:

 $
 (23,181)
 $
 (9,863)
 $
 (13,318)
 $
 33,995
 $
 (11,129)
 $
 45,124

 Other short-term borrowings
 (16,700)
 (7,037)
 (9,663)
 24,937
 (10,839)
 35,776

 (39,881)
 (16,900)
 (22,981)
 58,932
 (21,968)
 80,900

 Medium-term notes
 158,037
 104,834
 53,203
 128,303
 51,942
 76,361

 Collateral trust bonds
 (363)
 (10,489)
 10,126
 4,709
 (5,239)
 9,948

 (8,759)
 (13,001)
 4,242
 31,282
 11,693
 19,589

 (9,247)
 (1,605)
 (7,642)
 50,070
 18,134
 31,936

 Other notes payable
 (31)

 3,743
 5,468
 (1,725)
 29,492
 12,401
 17,091

 Subordinated certificates
 (486)
 (792)
 (226)
 (923)

 Total interest expense
 103,191
 67,629
 35,562
 302,580
 66,009
 236,571

 $
 6,691
 $
 28,461
 $
 (21,770)
 $
 (60,958)
 $
 28,500
 $
 (89,458)

 Adjusted net interest income:

 $
 109,882
 $
 96,090
 $
 13,792
 $
 241,622
 $
 94,509
 $
 147,113

 103,191
 67,629
 35,562
 302,580
 66,009
 236,571

 Net periodic derivative cash settlements interest (income) expense(2)

 27,947
 5,413
 22,534
 (93,589)
 (93,898)

 Adjusted interest expense(3)

 131,138
 73,042
 58,096
 208,991
 66,318
 142,673

 Adjusted net interest income(3)

 $
 (21,256)
 $
 23,048
 $
 (44,304)
 $
 32,631
 $
 28,191
 $
 4,440

 (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" in this Report for additional information on our adjusted non-GAAP financial measures.

 Reported Net Interest Income

 Reported net interest income of $261 million for FY2025 increased by $7 million, or 3%, from FY2024, driven by an increase in average interest-earning assets of $1,772 million, or 5%, partially offset by a decrease in the net interest yield of 2 basis points, or 3%, to 0.72%.

 • Average Interest-Earning Assets: The increase in average interest-earning assets of 5% during FY2025 was primarily attributable to growth in average total loans of $2,082 million, or 6%, partially offset by a decrease of $310 million in our average total investments, which include cash, time deposits and investment securities. The average loans increase was driven primarily by an increase in average long-term fixed-rate loans of $1,407 million and an increase in average line of credit loans of $624 million, as members continued to advance loans to fund capital expenditures and for working capital purposes. In addition, the increase in line of credit loans during FY2025 was also attributable to borrowings under emergency line of credit loans by our members primarily for Hurricane Helene recovery costs.

 • Net Interest Yield: The decrease in the net interest yield of 2 basis points, or 3%, was primarily attributable to the combined impact of an increase in our average cost of borrowings of 11 basis points to 4.28%, which was partially offset by an increase in the average yield on interest-earning assets of 7 basis points to 4.71% and an increase in the benefit from non-interest-bearing funding of 2 basis point to 0.29%. The increase in average yields on long-term fixed-rate loans was the primary driver for the increase in the average yield on interest-earning assets, while the interest rates for variable-rate and line of credit loans decreased due to the federal funds rate cuts during FY2025. Meanwhile, our average cost of borrowings increased due to the long-term debt issued at higher interest rates after May 31, 2024.

 Adjusted Net Interest Income

 Adjusted net interest income of $360 million for FY2025 decreased by $21 million, or 6%, from FY2024, driven by a decrease in the adjusted net interest yield of 11 basis points, or 10%, to 1.00%, partially offset by an increase in average interest-earning assets of $1,772 million, or 5%.

 • Average Interest-Earning Assets: The increase in average interest-earning assets was driven by the growth in average total loans, as discussed above.

 • Adjusted Net Interest Yield: The decrease in the adjusted net interest yield of 11 basis points, or 10%, was attributable to an increase in our adjusted average cost of borrowings of 22 basis points to 3.99%, which was partially offset by the combined impact of an increase in the average yield on interest-earning assets of 7 basis points to 4.71% and an increase in the benefit from non-interest-bearing funding of 4 basis points to 0.28%. The increase in adjusted average cost of borrowings was attributable to the long-term debt issued at higher interest rates after May 31, 2024, and a lower average yield earned on our interest rate swaps as discussed below under the "Derivatives Cash Settlements" section. We discussed above the primary drivers for the increases in the average yield on interest-earning assets.

 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 $99 million, $127 million and $34 million for FY2025, FY2024 and FY2023, respectively.

 The decrease in derivative cash settlements interest income between FY2025 and FY2024 was due to the lower net interest rates received on our pay-fixed swaps in FY2025, compared with FY2024, due to the federal funds rate cuts during FY2025 and an $8 million gain related to treasury locks recorded in FY2024. See "Note 10—Derivative Instruments and Hedging Activities" in this Report for additional information on our treasury locks activity.

 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 (Benefit) for Credit Losses

 Our provision (benefit) for credit losses for 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 $41 million and 0.11%, respectively, as of May 31, 2025. In comparison, our allowance for credit losses and allowance coverage ratio was $49 million and 0.14%, respectively, as of May 31, 2024.

 We recorded a benefit for credit losses of $8 million for FY2025, resulting from a reduction in the asset-specific allowance for a nonperforming loan attributable to higher actual than expected payments received on this loan during FY2025. Our collective allowance decreased slightly during FY2025, primarily due to an improved recovery rate on our power supply loan portfolio, partially offset by an increase attributable to loan portfolio growth. In comparison, we recorded a benefit for credit losses of $5 million for 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 on the previously charged-off loans, partially offset by an increase of $4 million in the collective allowance. The increase in the collective allowance for FY2024 was due to the growth in our loan portfolio, a slight decline in the overall credit quality of our loan portfolio and slightly higher expected default rates derived from third-party utility sector default data used in estimating the allowance for credit losses.

 We discuss our methodology for estimating the allowance for credit losses in "Note 1—Summary of Significant Accounting Policies—Allowance for Credit Losses—Loan Portfolio." 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.

 Non-Interest Income

 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 consist of both unrealized and realized gains and losses.

 Table 7 presents the components of non-interest income recorded in our consolidated statements of operations.

 Table 7: Non-Interest Income

 2025
 2024
 2023

 Non-interest income components:

 $
 23,597
 $
 22,792
 $
 18,134

 Derivative gains (losses)

 (5,851)

 Investment securities gains (losses)

 5,674
 (4,974)

 Total non-interest income
 $
 23,420
 $
 425,601
 $
 299,004

 The significant variance in non-interest income between fiscal years was primarily attributable to changes in the derivative gains (losses) recognized in our consolidated statements of operations. In addition, we experienced a decrease in gains recorded on our debt and equity investment securities of $5 million for FY2025 compared with FY2024. 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 in our consolidated statements of operations.

 Derivative Gains (Losses)

 As of May 31, 2025 and 2024, our derivatives portfolio included interest rate swap agreements not designated for hedge accounting, composed of pay-fixed swaps and receive-fixed swaps, with a majority of the benchmark variable rate for the floating-rate payments based on daily compounded Secured Overnight Financing Rate ("SOFR") as of May 31, 2025.

 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. We did not have any derivatives designated as accounting hedges as of May 31, 2025 and 2024. See "Note 10—Derivative Instruments and Hedging Activities" in this Report for detailed information on our cash flow hedge activities during FY2025, FY2024 and FY2023.

 The total notional amount for our interest rate swaps was $7,252 million and $7,366 million as of May 31, 2025 and 2024, respectively. The portfolio was primarily composed of longer-dated pay-fixed swaps, which accounted for approximately 80% and 79% of the outstanding notional amount as of May 31, 2025 and 2024, 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 May 31, 2025, the average remaining maturity of our pay-fixed and receive-fixed swaps was 16 years and two years, respectively, compared with 18 years and two years, respectively, as of May 31, 2024.

 Table 8 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 8: Derivative Gains (Losses)

 2025
 2024
 2023

 Derivative gains (losses) attributable to:

 $
 $
 $

 Derivative forward value gains (losses)

 (105,070)

 Derivative gains (losses)

 $
 (5,851)
 $
 $

 We recorded derivative losses of $6 million for FY2025, attributable to decreases in interest rates across the swap curve, with the exception of the 30-year swap rate, which increased slightly during FY2025. In comparison, we recorded derivative gains of $392 million for FY2024, primarily attributable to increases in the medium- and longer-term swap interest rates during FY2024.

 We present comparative swap curves, which depict the relationship between swap rates at varying maturities, for our reported periods in Table 9 below.

 Comparative Swap Curves

 Table 9 provides comparative swap curves as of May 31, 2025, 2024, 2023 and 2022.

 Table 9: Comparative Swap Curves

 Benchmark rates obtained from Bloomberg.

 See "Note 1—Summary of Significant Accounting Policies—Derivative Instruments" and "Note 10—Derivative Instruments and Hedging Activities" in this Report for additional information on our derivative instruments. Also refer to "Note 14—Fair Value Measurement" 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 and other miscellaneous expenses.

 Table 10 presents the components of non-interest expense recorded in our consolidated statements of operations.

 Table 10: Non-Interest Expense

 2025
 2024
 2023

 Non-interest expense components:

 Salaries and employee benefits
 $
 (72,171)
 $
 (67,401)
 $
 (59,011)

 Other general and administrative expenses
 (70,944)
 (58,970)
 (50,620)

 Operating expenses
 (143,115)
 (126,371)
 (109,631)

 Other non-interest expense
 (9,168)
 (3,189)
 (1,604)

 $
 (152,283)
 $
 (129,560)
 $
 (111,235)

 Non-interest expense of $152 million for FY2025, increased by $23 million, or 18%, from FY2024, primarily attributable to an increase in operating expenses, driven by higher expenses recorded for salaries and employee benefits, consulting, depreciation and amortization, member relations and board expenses. In addition, during FY2025, we recorded an $8 million

 non-interest expense from an impairment loss on our equity investment in Riesel HoldCo, LLC obtained in FY2023 as part of the Brazos Sandy Creek Electric Cooperative Inc. bankruptcy filing. See "Note 4—Loans" in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023 for a detailed discussion of this equity investment.

 Net Income (Loss) Attributable to Noncontrolling Interests

 We recorded a net income attributable to noncontrolling interests of less than $1 million for FY2025, which represented 100% of the results of operations of NCSC, as the members of NCSC own or control 100% of the interest in its company during FY2025. In comparison, we recorded a net income attributable to noncontrolling interests of $1 million for FY2024 and less than $1 million for FY2023, which represented 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 during FY2024 and FY2023. On December 1, 2023, we completed the RTFC sale transaction and RTFC was subsequently dissolved. 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.

 CONSOLIDATED BALANCE SHEET ANALYSIS

 Total assets increased by $2,147 million, or 6%, in FY2025 to $38,325 million as of May 31, 2025, primarily due to growth in our loan portfolio. We experienced an increase in total liabilities of $2,056 million, or 6%, to $35,222 million as of May 31, 2025, largely due to issuances of debt to fund the growth in our loan portfolio. Total equity increased by $91 million to $3,103 million as of May 31, 2025, primarily attributable to our reported net income of $140 million for FY2025, partially offset by the CFC Board of Directors' authorized patronage capital retirement of $47 million during FY2025.

 Below is a discussion of changes in the major components of our assets and liabilities during FY2025. 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. 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 this Report.

 Loans Outstanding

 Table 11 presents loans outstanding by legal entity, member class and loan product type as of May 31, 2025 and 2024.

 Table 11: Loans—Outstanding Amount by Member Class and Loan Type

 2025
 2024

 Change

 CFC:

 $
 %
 $
 %
 $
 2,158,032

 253,602

 —
 13,979

 2,425,613

 NCSC:

 132,883

 (23,132)

 $
 109,751

 2,535,364

 Deferred loan origination costs—CFC(2)

 —
 —
 2,329

 $
 %
 $
 %
 $
 2,537,693

 $
 31,388,313
 %
 $
 30,266,043
 %
 $
 1,122,270

 1,122,250
 839,458
 282,792

 32,510,563
 31,105,501
 1,405,062

 4,552,985
 3,422,683
 1,130,302

 2,535,364

 Deferred loan origination costs—CFC(2)

 —
 —
 2,329

 $
 %
 $
 %
 $
 2,537,693

 (1)Represents the unpaid principal balance, net of discounts, charge-offs and recoveries, of loans as of the end of each period.
 (2)Deferred loan origination costs are recorded at CFC segment.

 The increase in loans to members of $2,538 million, or 7%, from May 31, 2024, was primarily attributable to net increases in long-term and line of credit loans of $1,405 million and $1,130 million, respectively. Of the increase in line of credit loans, 78% was attributable to borrowings under emergency line of credit loans by our members primarily for Hurricane Helene recovery costs. The remaining 22% was primarily attributable to funding provided for member working capital and NCSC renewable project financing.

 Long-term loan advances totaled $3,109 million during FY2025, of which approximately 90% was provided to members for capital expenditures, 7% was provided for bridge financing, 2% was provided for the refinancing of loans made by other lenders and 1% was provided for other purposes. In comparison, long-term loan advances totaled $3,371 million during FY2024, of which approximately 93% was provided to members for capital expenditures, 1% was provided for the refinancing of loans made by other lenders and 6% was provided for other purposes, primarily business acquisitions. Of the $3,109 million total long-term loans advanced during FY2025, $2,635 million were fixed-rate loan advances with a weighted average fixed-rate term of eight years. In comparison, of the $3,371 million total long-term loans advanced during FY2024, $3,155 million were fixed-rate loan advances with a weighted average fixed-rate term of 11 years. The weighted average term selected by our members on the long-term fixed-rate loans has continued to decline due to the elevated interest rate environment.

 We provide information on the credit performance and risk profile of our loan portfolio below under the section "Credit Risk—Loan Portfolio Credit Risk" in this Report. Also refer to "Item 1. Business—Loan and Guarantee Programs" and "Note 4—Loans" in this Report for addition information on our loans to members."

 Debt

 We utilize both secured and unsecured 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 private funding sources. Our funding strategy consists of various products and programs across markets to manage funding concentrations and reduce our liquidity or debt rollover risk.

 Debt Product Types

 We offer various short- and long-term unsecured debt securities to our members and their affiliates, including commercial paper, select notes, daily liquidity fund notes, medium-term notes and subordinated certificates. We also issue commercial paper, medium-term notes and collateral trust bonds in the capital markets. Additionally, we have access to funds under borrowing arrangements with banks, other noncapital markets and U.S. government agencies. Table 12 displays our primary funding sources and their selected key attributes.

 Table 12: Debt—Debt Product Types

 Debt Product Type
 Maturity Range
 Market
 Secured/Unsecured

 Short-term funding programs:

 1 to 270 days
 Capital markets, members and affiliates

 Select notes
 30 to 270 days
 Members and affiliates

 Daily liquidity fund notes
 Demand note
 Members and affiliates

 Securities sold under repurchase agreements
 1 to 90 days

 Other funding programs:

 Medium-term notes
 9 months to 30 years
 Capital markets, members and affiliates

 Collateral trust bonds(1)

 Up to 30 years

 Guaranteed Underwriter Program notes payable(2)

 Up to 30 years
 U.S. government

 Farmer Mac notes payable(3)

 Up to 30 years
 Other noncapital markets

 Subordinated deferrable debt(4)

 Up to 45 years

 Members' subordinated certificates(5)

 Up to 100 years
 Members

 Revolving credit agreements
 Up to 5 years
 Bank institutions

 (1)Collateral trust bonds are secured by the pledge of permitted investments and eligible mortgage notes from distribution system borrowers in an amount at least equal to the outstanding principal amount of collateral trust bonds. Collateral trust bonds also include those issued in a private placement transaction.
 (2)Represents notes payable under the Guaranteed Underwriter Program, which supports the Rural Economic Development Loan and Grant program. The Federal Financing Bank provides the financing for these notes, and Rural Utilities Service ("RUS") provides a guarantee of repayment. We are required to pledge eligible mortgage notes from distribution and power supply system borrowers in an amount at least equal to the outstanding principal amount of the notes payable.
 (3)We are required to pledge eligible mortgage notes from distribution and power supply system borrowers in an amount at least equal to the outstanding principal amount under the note purchase agreement with Farmer Mac.
 (4)Subordinated deferrable debt is subordinate and junior to senior debt and debt obligations we guarantee, but senior to subordinated certificates. We have the right at any time, and from time to time, during the term of the subordinated deferrable debt to suspend interest payments for a certain number of consecutive interest payment periods, as defined in the respective prospectus supplements. To date, we have not exercised our option to suspend interest payments. We also have the right to call the subordinated deferrable debt, in whole or in part, at par, either at certain intervals or any time five or 10 years after the issuance. The specific terms are detailed in each respective subordinated deferrable debt's prospectus supplement.
 (5)Members' subordinated certificates consist of membership subordinated certificates, loan and guarantee certificates and member capital securities, and are subordinated and junior to senior debt, subordinated debt and debt obligations we guarantee. Membership subordinated certificates generally mature 100 years subsequent to issuance. Loan and guarantee subordinated certificates have the same maturity as the related long-term loan. Some certificates also may amortize annually based on the outstanding loan balance. Member capital securities mature 30 years subsequent to issuance. Member capital securities are callable at par beginning either five or 10 years subsequent to the issuance and anytime thereafter.

 Debt Outstanding

 Table 13 displays the composition, by product type, of our outstanding debt and the weighted average interest rate as of May 31, 2025 and 2024. Table 13 also displays the composition of our debt based on several additional selected attributes.

 Table 13: Debt—Total Debt Outstanding and Weighted-Average Interest Rates

 2025
 2024

 Change

 Debt product type:

 Commercial Paper:

 Members, at par
 $
 785,608
 3.98
 %
 $
 1,158,020
 5.08
 %
 $
 (372,412)

 Dealer, net of discounts
 2,206,451
 4.47
 504,631
 5.41
 1,701,820

 Total commercial paper
 2,992,059
 4.34
 1,662,651
 5.18
 1,329,408

 Select notes to members
 1,304,240
 4.22
 1,274,066
 5.36
 30,174

 Daily liquidity fund notes to members
 343,916
 3.75
 375,191
 4.60
 (31,275)

 Medium-term notes:

 Members, at par
 870,849
 4.61
 879,626
 5.39
 (8,777)

 Dealer, net of discounts
 9,611,038
 4.64
 8,947,076
 4.38
 663,962

 Total medium-term notes
 10,481,887
 4.64
 9,826,702
 4.47
 655,185

 Collateral trust bonds
 6,895,702
 3.68
 6,739,921
 3.49
 155,781

 6,456,852
 3.31
 6,491,814
 3.27
 (34,962)

 3,780,461
 4.00
 3,863,510
 4.34
 (83,049)

 1,329,485
 6.36
 1,286,861
 6.63
 42,624

 Members' subordinated certificates:

 Membership subordinated certificates
 628,637
 4.96
 628,625
 4.96

 Loan and guarantee subordinated certificates
 309,914
 3.02
 322,863
 3.02
 (12,949)

 Member capital securities
 5.01
 5.01
 —

 Total members' subordinated certificates
 4.46
 4.44
 (12,937)

 Total debt outstanding
 $
 34,769,316
 4.14
 %
 $
 32,718,367
 4.17
 %
 $
 2,050,949

 Security type:

 Secured debt
 %
 %

 Unsecured debt

 Total
 %
 %

 Funding source:

 Members
 %
 %

 Other non-capital markets:

 Total other non-capital markets

 Total
 %
 %

 Interest rate type:

 Fixed-rate debt
 %
 %

 Variable-rate debt

 Total
 %
 %

 Interest rate type including swaps impact:

 Fixed-rate debt(1)

 %

 %

 Variable-rate debt(2)

 Total
 %
 %

 Maturity classification:(3)

 %

 %

 Long-term and subordinated debt(4)

 Total
 %
 %

 (1)Includes variable-rate debt that has been swapped to a fixed rate, net of any fixed-rate debt that has been swapped to a variable rate.
 (2)Includes fixed-rate debt that has been swapped to a variable rate, net of any variable-rate debt that has been swapped to a fixed rate. Also includes commercial paper notes, which generally have maturities of less than 90 days. The interest rate on commercial paper notes does not change once the note has been issued; however, the interest rate for new commercial paper issuances changes daily.
 (3)Borrowings with an original contractual maturity of one year or less are classified as short-term borrowings. Borrowings with an original contractual maturity of greater than one year are classified as long-term debt.
 (4)Consists of long-term debt, subordinated deferrable debt and total members' subordinated debt reported on our consolidated balance sheets. Maturity classification is based on the original contractual maturity as of the date of issuance of the debt.

 We issue debt primarily to fund growth in our loan portfolio. As such, our debt outstanding generally increases and decreases in response to member loan demand. Debt outstanding totaled $34,769 million as of May 31, 2025, which increased by $2,051 million, or 6%, from May 31, 2024, due to borrowings to fund the increase in loans to members. We provide additional information on our financing activities for FY2025 in the below section "Liquidity Risk" of this Report.

 Member Investments

 Debt securities issued to our members represent an important, stable source of funding. Table 14 displays member debt outstanding, by product type, as of May 31, 2025 and 2024.

 Table 14: Debt—Member Investments

 Change

 2025
 2024

 % of Total(1)

 % of Total(1)

 Member investment product type:

 $
 785,608
 %
 $
 1,158,020
 %
 $
 (372,412)

 Select notes
 1,304,240
 1,274,066
 30,174

 Daily liquidity fund notes
 343,916
 375,191
 (31,275)

 Medium-term notes
 870,849
 879,626
 (8,777)

 (12,937)

 Total member investments
 $
 4,489,327

 $
 4,884,554

 $
 (395,227)

 Percentage of total debt outstanding
 %

 %

 (1)Represents outstanding debt attributable to members for each debt product type as a percentage of the total outstanding debt for each debt product type.

 Member investments accounted for 13% and 15% of total debt outstanding as of May 31, 2025 and 2024, respectively. The decrease in member investments of $395 million as of May 31, 2025 compared with the prior year, was primarily due to a reduction in member commercial paper investments as our members used funds from these investments to finance capital expenditure programs and operating needs. Over the last three fiscal years, our member investments, including both short-term and long-term investments, have averaged $4,920 million, calculated based on outstanding member investments as of the end of each fiscal quarter during the period.

 Short-Term Borrowings

 Short-term borrowings consist of borrowings with an original contractual maturity of one year or less and do not include the current portion of long-term debt. Short-term borrowings increased to $5,091 million as of May 31, 2025, from $4,333 million as of May 31, 2024, primarily driven by an increase in outstanding dealer commercial paper of $1,702 million, partially offset by a repayment of $500 million in short-term notes payable under the Farmer Mac revolving note purchase agreement and a decrease in short-term member investments of $444 million during FY2025. Short-term borrowings accounted for 15% and 13% of total debt outstanding as of May 31, 2025 and 2024, respectively. See "Liquidity Risk" below and "Note 6—Short-Term Borrowings" for information on the composition of our short-term borrowings.

 Long-Term and Subordinated Debt

 Long-term debt, defined as debt with an original contractual maturity term of greater than one year, primarily consists of medium-term notes, collateral trust bonds, notes payable under the Guaranteed Underwriter Program and notes payable under the Farmer Mac revolving note purchase agreement. Subordinated debt consists of subordinated deferrable debt and members' subordinated certificates. Our subordinated deferrable debt and members' subordinated certificates have original contractual maturity terms of greater than one year.

 Long-term and subordinated debt increased to $29,678 million as of May 31, 2025, from $28,386 million as of May 31, 2024, primarily due to net increases of $724 million in dealer and member medium-term notes, $417 million in notes payable under the Farmer Mac revolving note purchase agreement, $156 million in collateral trust bonds, $43 million in subordinated deferrable debt, partially offset by decreases of $35 million in notes payable under the Guaranteed Underwriter Program and $13 million in members' subordinated certificates during FY2025. Long-term and subordinated debt accounted for 85% and 87% of total debt outstanding as of May 31, 2025 and 2024, respectively. We provide additional information on our long-term debt below under the section "Liquidity Risk" and "Note 7—Long-Term Debt" and "Note 8—Subordinated Deferrable Debt" in this Report.

 Table 15 presents the components of total CFC equity and total equity as of May 31, 2025 and 2024.

 Table 15: Equity
 Change

 2025
 2024

 Equity components:

 Membership fees and educational fund:

 Membership fees
 $
 $
 $
 (2)

 Educational fund
 2,658
 2,608

 Total membership fees and educational fund
 3,624
 3,576

 Patronage capital allocated
 948,526
 928,232
 20,294

 Members' capital reserve
 1,631,609
 1,455,564
 176,045

 Total allocated equity
 2,583,759
 2,387,372
 196,387

 Unallocated net income:

 Prior fiscal year-end cumulative derivative forward value gains(1)

 342,624
 263,591

 Fiscal year derivative forward value gains (losses)(1)

 (104,552)
 263,591
 (368,143)

 Fiscal year-end cumulative derivative forward value gains(1)

 501,663
 (104,552)

 Other unallocated net loss

 (709)
 (709)
 —

 Unallocated net income
 500,954
 605,506
 (104,552)

 CFC retained equity
 3,084,713
 2,992,878
 91,835

 (2,236)
 (1,416)
 (820)

 Total CFC equity
 91,015

 Noncontrolling interests
 20,989
 20,707

 $
 $
 $
 91,297

 (1)Represents derivative forward value gains (losses) for CFC only, as total CFC equity does not include the noncontrolling interests of the variable interest entities, which we are required to consolidate. We present the consolidated total derivative forward value gains (losses) in Table 36 in the "Non-GAAP Financial Measures and Reconciliations" section below. Also, see "Note 16—Business Segments" in this Report for the statements of operations for CFC.

 The increase in total equity of $91 million to $3,103 million as of May 31, 2025 compared with May 31, 2024 was attributable to our reported net income of $140 million for FY2025, partially offset by the CFC Board of Directors' authorized patronage capital retirements of $47 million during FY2025.

 Allocation and Retirement of Patronage Capital

 We are subject to District of Columbia law governing cooperatives, under which CFC is required to make annual allocations of net earnings, if any, in accordance with the provisions of the District of Columbia statutes. District of Columbia cooperative law requires cooperatives to allocate net earnings to patrons, to a general reserve in an amount sufficient to maintain a balance of at least 50% of paid-up capital and to a cooperative educational fund. In addition, the District of Columbia cooperative law permits additional allocations to board-approved reserves. District of Columbia cooperative law also requires that a cooperative's net earnings be allocated to all patrons in proportion to their individual patronage and each patron's allocation be distributed to the patron unless the patron agrees that the cooperative may retain its share as additional capital. Pursuant to these provisions, the CFC Board of Directors is required to make annual allocations of net earnings, if any. CFC's net earnings for determining allocations are based on non-GAAP adjusted net income, which excludes the impact of derivative forward value gains (losses). We provide a reconciliation of our adjusted net income to our reported net income and an explanation of the adjustments below in "Non-GAAP Financial Measures and Reconciliations."

 In May 2025, the CFC Board of Directors authorized the allocation of $1 million of net earnings for FY2025 to the cooperative educational fund. In July 2025, the CFC Board of Directors authorized the allocation of FY2025 adjusted net income as follows: $67 million to members in the form of patronage capital and $176 million to the members' capital reserve. In July 2025, the CFC Board of Directors also authorized the retirement of patronage capital totaling $53 million, of which $34 million represented 50% of the patronage capital allocation for FY2025 and $19 million represented the portion of the allocation from fiscal year 2000 net earnings that had been held for 25 years pursuant to the CFC Board of Directors' policy. We expect to return the authorized patronage capital retirement amount of $53 million to members in cash in the second quarter of fiscal year 2026. The remaining portion of the patronage capital allocation for FY2025 will be retained by CFC for 25 years pursuant to the guidelines adopted by the CFC Board of Directors in June 2009.

 In May 2024, the CFC Board of Directors authorized the allocation of $1 million of net earnings for FY2024 to the cooperative educational fund. In July 2024 the CFC Board of Directors authorized the allocation of FY2024 adjusted net income as follows: $61 million to members in the form of patronage capital and $228 million to the members' capital reserve. In July 2024, the CFC Board of Directors also authorized the retirement of patronage capital totaling $47 million, of which $30 million represented 50% of the patronage capital allocation for FY2024 and $17 million represented the portion of the allocation from fiscal year 1999 net earnings that had been held for 25 years pursuant to the CFC Board of Directors' policy. This amount was returned to members in cash in September 2024. The remaining portion of the patronage capital allocation for FY2024 will be retained by CFC for 25 years pursuant to the guidelines adopted by the CFC Board of Directors in June 2009.

 In connection with the RTFC sale transaction, the CFC Board of Directors approved the early retirement of $66 million of allocated but unretired CFC patronage capital to RTFC at a discounted amount of $41 million, which was paid from CFC to RTFC in December 2023, and the remaining $25 million was allocated to the CFC members' capital reserve during FY2024.

 The CFC Board of Directors is required to make annual allocations of adjusted net income, if any. CFC has made annual retirements of allocated net earnings in 45 of the last 46 fiscal years; however, future retirements of allocated amounts are determined based on CFC's financial condition. The CFC Board of Directors has the authority to change the current practice for allocating and retiring net earnings at any time, subject to applicable laws. During FY2024, the CFC Board of Directors approved a change in the allocation of net earnings that would allow us to retain additional earnings and help in effectively managing our adjusted debt-to-equity ratio. As a result of this change, we retained 79% of adjusted net income for FY2024 in members' capital reserve, compared with 56% for FY2023.

 ENTERPRISE RISK MANAGEMENT

 CFC has an Enterprise Risk Management ("ERM") framework that is designed to identify, assess, monitor and manage the risks we assume in conducting our activities to serve the financial needs of our members. We face a variety of potential internal and external risks that can significantly affect our financial condition, liquidity position, reputation and ability to meet the expectations of our members, investors and other stakeholders. As a financial services company, the major categories of risk exposures inherent in our business activities include credit risk, liquidity risk, market risk and operational risk. These risk categories are summarized below.

 • Credit risk is the risk that a borrower or other counterparty will be unable to meet its obligations in accordance with agreed-upon terms.

 • Liquidity risk is the risk that we will be unable to fund our operations and meet our contractual financial obligations or that we will be unable to fund new loans to borrowers at a reasonable cost and tenor in a timely manner.

 • Market risk is the risk that changes in market variables, such as movements in interest rates, may adversely affect the match between the timing of the contractual maturities, repricing and prepayments of our financial assets and the related financial liabilities funding those assets.

 • Operational risk is the risk of loss resulting from inadequate or failed internal controls, processes, systems, human error or external events, including natural disasters or public health emergencies, such as the COVID-19 pandemic. Operational risk also includes cybersecurity risk, compliance risk, fiduciary risk, reputational risk and litigation risk.

 Effective risk management is critical to our overall operations and to achieving our primary objective of providing cost-based financial products to our rural electric members while maintaining the sound financial results required to retain our investment-grade credit ratings on our rated debt instruments. In line with this, we have established a risk-management framework designed to oversee the key risks encountered in our operations and the maximum level of risk we are prepared to undertake, known as risk tolerance. This also includes risk limits and guidelines that are in alignment with CFC's mission and strategic objectives.

 Risk-Management Framework

 Our ERM framework consists of a defined policy and process for managing key risks in alignment with CFC's mission and the CFC Board of Director's strategic objectives. The board of directors has responsibility for the oversight and strategic direction of the ERM framework and has adopted a comprehensive risk-management policy that describes the roles and responsibilities of the board and management within this framework for identifying and managing risks. In fulfilling its risk-management oversight duties, the board of directors receives periodic reports on business activities and risk-management activities from management, and periodically reviews important trends and emerging developments across key risks determined by management at its meetings. The CFC board also establishes CFC's loan policies and has established a Loan Committee of the board comprising no fewer than six directors that reviews the performance of the loan portfolio in accordance with those policies. For additional information about the role of the CFC Board of Directors in risk governance and oversight, see "Item 10. Directors, Executive Officers and Corporate Governance."

 The Enterprise Risk Group reports to the Chief Risk Officer and collectively provides independent oversight and support in the establishment of CFC's ERM framework, and is responsible for establishing and maintaining internal controls to mitigate key risks. In addition, we have a number of management-level risk oversight committees across the organization and groups within the organization that have a defined set of authorities and responsibilities specific to one or more risk types, including the Corporate Credit Committee, Asset Liability Committee, Cybersecurity Committee, Investment Management Committee, Information Technology Steering Committee and Disclosure Committee. The Chief Risk Officer provides reports to the CFC Board of Directors at each regularly scheduled board meeting, and more frequently as requested by the board of directors, relating to, among other things, the ongoing progress of managing key risks at CFC given the ERM framework; management's responses and mitigation plan for any critical business risk trending negatively or

 exceeding prevailing risk limits and guidelines as identified during the risk assessment process; the status of any gaps or deficiencies in the ERM process; CFC's overall risk universe profile and important trends; and emerging risks and opportunities previously not identified or reported.

 CREDIT RISK

 Our loan portfolio, which represents the largest component of assets on our balance sheet, accounts for the substantial majority of our credit risk exposure. We also engage in certain nonlending activities that may give rise to counterparty credit risk, such as entering into derivative transactions to manage interest rate risk and investment in debt and equity securities.

 Credit Risk Management

 We manage credit risk related to our loan portfolio consistent with credit policies established by the CFC Board of Directors and through credit underwriting, approval and monitoring processes and practices adopted by management. Our board-established credit policies include guidelines regarding the types of credit products we offer, limits on credit we extend to individual borrowers, approval authorities delegated to management, and use of syndications and loan sales. We maintain an internal risk rating system in which we assign a rating to each borrower and credit facility. We review and update the risk ratings at least annually. Assigned risk ratings inform our credit approval, borrower monitoring and portfolio review processes. Our Corporate Credit Committee approves individual credit actions within its own authority and, together with our Enterprise Risk Group, establishes standards for credit underwriting, oversees credits deemed to be higher risk, reviews assigned risk ratings for accuracy, and monitors the overall credit quality and performance statistics of our loan portfolio.

 Loan Portfolio Credit Risk

 Our primary credit exposure is loans to rural electric cooperatives, which provide essential electric services to end-users, the majority of which are residential customers. We also have a limited portfolio of loans to not-for-profit and for-profit telecommunication companies. The substantial majority of loans to our borrowers are long-term fixed-rate loans with terms of up to 35 years. Long-term fixed-rate loans accounted for 85% and 88% of total loans outstanding as of May 31, 2025 and 2024, respectively.

 Because we lend primarily to our rural electric utility cooperative members, we have had a loan portfolio inherently subject to single-industry and single-obligor credit concentration risk since our inception in 1969. We historically, however, have experienced limited defaults and losses in our electric utility loan portfolio due to several factors. First, the majority of our electric cooperative borrowers operate in states where electric cooperatives are not subject to rate regulation. Thus, they are able to make rate adjustments to pass along increased costs to the end customer without first obtaining state regulatory approval, allowing them to cover operating costs and generate sufficient earnings and cash flows to service their debt obligations. Second, electric cooperatives face limited competition, as they tend to operate in exclusive territories not serviced by public investor-owned utilities. Third, electric cooperatives typically are consumer-owned, not-for-profit entities that provide an essential service to end-users, the majority of which are residential customers. As not-for-profit entities, rural electric cooperatives, unlike investor-owned utilities, generally are eligible to apply for assistance from federal and/or state agencies to help recover from major disasters or emergencies. Fourth, electric cooperatives tend to adhere to a conservative core business strategy model that has historically resulted in a relatively stable, resilient operating environment and overall strong financial performance and credit strength for the electric cooperative network. Finally, we generally lend to our members on a senior secured basis, which reduces the risk of loss in the event of a borrower default.

 Below we provide information on the credit risk profile of our loan portfolio, including security provisions, credit concentration, credit quality indicators and our allowance for credit losses.

 Security Provisions

 Except when providing line of credit loans, we generally lend to our members on a senior secured basis. Long-term loans are generally secured on parity with other secured lenders (primarily RUS), if any, by all assets and revenue of the borrower with exceptions typical in utility mortgages. Line of credit loans are generally unsecured. In addition to the collateral pledged to secure our loans, distribution and power supply borrowers also are required to set rates charged to customers to

 achieve certain specified financial ratios. Table 16 presents, by legal entity and member class and by loan type, secured and unsecured loans in our loan portfolio as of May 31, 2025 and 2024. Of our total loans outstanding, 89% and 92% were secured as of May 31, 2025 and 2024, respectively.

 Table 16: Loans—Loan Portfolio Security Profile

 Total

 CFC:

 $
 26,376,425
 %
 $
 2,886,070
 %
 $

 4,771,255
 1,124,245

 238,596
 12,729

 31,386,276
 4,023,044

 NCSC:

 1,064,125
 14,638

 561,132
 14,333

 1,625,257
 28,971

 $
 33,011,533
 $
 4,052,015
 $

 $
 31,269,102
 %
 $
 119,211
 —
 %
 $
 31,388,313

 911,573
 210,677
 1,122,250

 32,180,675
 329,888
 32,510,563

 830,858
 3,722,127
 4,552,985

 $
 33,011,533
 $
 4,052,015
 $

 Total

 CFC:

 $
 25,114,323
 %
 $
 1,990,140
 %
 $

 4,836,612
 805,286

 215,229
 22,117

 30,166,164
 2,817,543

 NCSC:

 921,321
 24,559

 554,797
 43,800

 1,476,118
 68,359

 $
 31,642,282
 $
 2,885,902
 $

 $
 30,118,544
 %
 $
 147,499
 —
 %
 $
 30,266,043

 838,045
 1,413
 —
 839,458

 30,956,589
 148,912
 —
 31,105,501

 685,693
 2,736,990
 3,422,683

 $
 31,642,282
 $
 2,885,902
 $

 (1)Represents the unpaid principal balance, net of discounts, charge-offs and recoveries of loans as of the end of each period. Excludes unamortized deferred loan origination costs of $16 million and $14 million as of May 31, 2025 and 2024, respectively.

 Credit Concentration

 Concentrations of credit may exist when a lender has large credit exposures to single borrowers, large credit exposures to borrowers in the same industry sector or engaged in similar activities, or large credit exposures to borrowers in a geographic region that would cause the borrowers to be similarly impacted by economic or other conditions in the region. As discussed above under "Credit Risk—Loan Portfolio Credit Risk," because we lend primarily to our rural electric utility cooperative members, our loan portfolio is inherently subject to single-industry and single-obligor credit concentration risk. Loans outstanding to electric utility organizations totaled $36,488 million and $33,930 million as of May 31, 2025 and 2024, respectively, and represented approximately 98% of our total loans outstanding as of both the dates. Our credit exposure is partially mitigated by long-term loans guaranteed by RUS, which totaled $105 million and $114 million as of May 31, 2025 and 2024, respectively.

 Single-Obligor Concentration

 Table 17 displays the outstanding loan exposure for our 20 largest borrowers, by legal entity and member class, as of May 31, 2025 and 2024. Our 20 largest borrowers consisted of 14 distribution systems and six power supply systems as of May 31, 2025, compared with 13 distribution systems and seven power supply systems as of May 31, 2024. The largest total exposure to a single borrower or controlled group represented approximately 1% of total loans outstanding as of both May 31, 2025 and 2024.

 Table 17: Loans—Loan Exposure to 20 Largest Borrowers

 2025
 2024

 CFC:

 $
 5,054,345
 %
 $
 4,583,422
 %

 1,926,448
 2,090,648

 6,980,793
 6,674,070

 168,063
 —
 177,238

 Total loan exposure to 20 largest borrowers
 7,148,856
 6,851,308

 Less: Loans covered under Farmer Mac standby purchase commitment

 (155,078)
 —
 (226,171)
 (1)

 Net loan exposure to 20 largest borrowers
 $
 6,993,778
 %
 $
 6,625,137
 %

 We entered into a long-term standby purchase commitment agreement with Farmer Mac during fiscal year 2016. Under this agreement, we may designate certain long-term loans to be covered under the commitment, subject to approval by Farmer Mac, and in the event any such loan later goes into payment default for at least 90 days, upon request by us, Farmer Mac must purchase such loan at par value. The aggregate unpaid principal balance of designated and Farmer Mac approved loans was $346 million and $370 million as of May 31, 2025 and 2024, respectively. Loan exposure to our 20 largest borrowers covered under the Farmer Mac agreement totaled $155 million and $226 million as of May 31, 2025 and 2024, respectively, which reduced our exposure to the 20 largest borrowers to $6,994 million and $6,625 million of our total loans outstanding as of each respective date. No loans have been put to Farmer Mac for purchase pursuant to this agreement.

 Geographic Concentration

 Although our organizational structure and mission result in single-industry concentration, we serve a geographically diverse group of electric and telecommunications borrowers throughout the U.S. The consolidated number of borrowers with loans outstanding totaled 899, located in 49 states as of May 31, 2025, compared with 885 borrowers, located in 49 states and the District of Columbia as of May 31, 2024. Of the 899 and 885 borrowers with loans outstanding as of May 31, 2025 and

 2024, respectively, 50 were electric power supply borrowers as of both May 31, 2025 and 2024. Electric power supply borrowers generally require significantly more capital than electric distribution and telecommunications borrowers.

 Texas, which had 68 and 67 borrowers with loans outstanding as of May 31, 2025 and 2024, respectively, accounted for the largest number of borrowers with loans outstanding in any one state as of each respective date, as well as the largest concentration of loan exposure in any one state. Loans outstanding to Texas-based borrowers totaled $6,105 million and $5,768 million as of May 31, 2025 and 2024, respectively, and accounted for approximately 16% and 17% of total loans outstanding as of each respective date. Of the loans outstanding to Texas-based borrowers, $118 million and $126 million as of May 31, 2025 and 2024, respectively, were covered by the Farmer Mac standby repurchase agreement, which reduced our credit risk exposure to Texas-based borrowers to $5,987 million and $5,642 million as of each respective date.

 Table 18 provides a breakdown, by state or U.S. territory, of the total number of borrowers with loans outstanding as of May 31, 2025 and 2024 and the outstanding loan exposure to borrowers in each jurisdiction as a percentage of total loans outstanding of $37,064 million and $34,528 million as of May 31, 2025 and 2024, respectively.

 Table 18: Loans—Loan Geographic Concentration

 2025
 2024

 U.S. State/Territory
 Number of Borrowers
 % of Total Loans
 Number of
Borrowers
 % of Total Loans

 Alabama
 2.57
 %
 2.62
 %

 Alaska
 2.96
 3.19

 Arizona
 1.27
 1.29

 Arkansas
 3.64
 3.77

 California
 0.13
 0.11

 Colorado
 4.77
 5.37

 Delaware
 0.14
 0.18

 District of Columbia
 —
 —
 0.03

 Florida
 5.40
 3.97

 Georgia
 5.96
 5.59

 Hawaii
 0.20
 0.24

 Idaho
 0.36
 0.34

 Illinois
 3.12
 3.12

 Indiana
 4.30
 3.87

 Iowa
 2.22
 2.38

 Kansas
 3.30
 3.28

 Kentucky
 2.41
 2.56

 Louisiana
 1.66
 1.68

 Maine
 0.05
 0.06

 Maryland
 1.33
 1.50

 Massachusetts
 0.16
 0.17

 Michigan
 2.26
 1.90

 Minnesota
 1.70
 1.87

 Mississippi
 1.90
 2.04

 Missouri
 5.60
 5.71

 Montana
 0.86
 0.86

 Nebraska
 0.10
 0.12

 Nevada
 0.53
 0.59

 New Hampshire
 0.60
 0.52

 New Jersey
 0.06
 0.07

 New Mexico
 0.14
 0.16

 New York
 0.46
 0.38

 North Carolina
 2.77
 2.72

 North Dakota
 2.41
 2.49

 Ohio
 1.96
 2.00

 Oklahoma
 3.22
 3.32

 Oregon
 1.20
 1.22

 Pennsylvania
 1.67
 1.75

 Rhode Island
 0.03
 0.03

 South Carolina
 3.16
 2.80

 South Dakota
 0.71
 0.74

 Tennessee
 0.98
 0.95

 Texas
 16.47
 16.71

 Utah
 0.63
 0.65

 Vermont
 0.16
 0.15

 Virginia
 0.93
 1.18

 Washington
 0.85
 0.87

 West Virginia
 0.03
 0.03

 Wisconsin
 1.78
 1.90

 Wyoming
 0.88
 0.95

 Total
 %
 %

 Credit Quality Indicators

 Assessing the overall credit quality of our loan portfolio and measuring our credit risk is an ongoing process that involves tracking payment status, modifications to borrowers experiencing financial difficulty, nonperforming loans, charge-offs, the internal risk ratings of our borrowers and other indicators of credit risk. We monitor and subject each borrower and loan facility in our loan portfolio to an individual risk assessment based on quantitative and qualitative factors. Payment status trends and internal risk ratings are indicators, among others, of the probability of borrower default and overall credit quality of our loan portfolio. We believe the overall credit quality of our loan portfolio remained strong as of May 31, 2025.

 Loan Modifications to Borrowers Experiencing Financial Difficulty

 We had no loan modifications to borrowers experiencing financial difficulty entered during FY2025. We had one loan modification to an NCSC telecom borrower experiencing financial difficulty during FY2024. This loan received a term extension and had an amortized cost of $3 million, representing 1% of the NCSC telecom loan portfolio as of May 31, 2024. The loan has been performing in accordance with the terms of the loan agreement after the modification.

 Nonperforming Loans

 We classify loans as nonperforming at the earlier of the date when we determine: (i) interest or principal payments on the loan are past due 90 days or more; (ii) as a result of court proceedings, the collection of interest or principal payments based on the original contractual terms is not expected; or (iii) the full and timely collection of interest or principal is otherwise uncertain. Once a loan is classified as nonperforming, we generally place the loan on nonaccrual status. Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed against earnings.

 We had a loan to one CFC electric power supply borrower of $26 million and $49 million classified as nonperforming, which represented 0.07% and 0.14% of total loans outstanding as of May 31, 2025 and 2024, respectively. The reduction in the nonperforming loan was due to payments received on this nonperforming loan during FY2025.

 Net Charge-Offs

 Charge-offs represent the amount of a loan that has been removed from our consolidated balance sheet when the loan is deemed uncollectible. Generally, the amount of a charge-off is the recorded investment in excess of the discounted expected cash flows from the loan, or, if the loan is collateral dependent, the fair value of the underlying collateral securing the loan. We report charge-offs net of amounts recovered on previously charged-off loans.

 We had no charge-offs during FY2025 and FY2024. We recorded $1 million in net loan recoveries to previously charged-off loan amounts related to two CFC electric power supply loans during FY2024. Prior to the two CFC electric power supply loan defaults in fiscal years 2021 and 2022, we had not experienced any defaults or charge-offs in our electric utility and telecommunications loan portfolios since fiscal years 2013 and 2017, respectively.

 In our 56-year history, we have experienced only 18 defaults in our electric utility loan portfolio. Of the 18 defaults, one remains unresolved with an expected ultimate resolution date in calendar year 2025; nine resulted in no loss; and eight resulted in cumulative net charge-offs of $100 million. Of this amount, $81 million was attributable to seven electric power supply cooperatives and $19 million was attributable to one electric distribution cooperative. We historically have experienced high recovery rates for our electric loan portfolio. This can be attributed to several factors: (i) the unique organizational structure and operating environment of rural electric utility cooperatives, (ii) our lending policy that typically mandates a senior security position on borrowers' assets and revenue for long-term loans, (iii) the significant investment our member-borrowers have in CFC and (iv) our collaborative approach when working with members in the event of a default. We cite the factors that have historically contributed to the relatively low risk of default by our electric utility cooperatives, our principal lending market, above under "Credit Risk—Loan Portfolio Credit Risk."

 In comparison, since inception in 1987, we have experienced 17 defaults and cumulative net charge-offs of $427 million in our telecommunications loan portfolio, the most significant of which was a charge-off of $354 million in fiscal year 2011.

 Borrower Risk Ratings

 As part of our management of credit risk, we maintain a credit risk-rating framework under which we employ a consistent process for assessing the credit quality of our loan portfolio. We evaluate each borrower and loan facility in our loan portfolio and assign internal borrower and loan facility risk ratings based on consideration of a number of quantitative and qualitative factors. We categorize loans in our portfolio based on our internally assigned borrower risk ratings, which are intended to assess the general creditworthiness of the borrower and probability of default. Our borrower risk ratings align with the U.S. federal banking regulatory agencies' credit risk definitions of pass and criticized categories, with the criticized category further segmented among special mention, substandard and doubtful. Pass ratings reflect relatively low probability of default, while criticized ratings have a higher probability of default. Our internally assigned borrower risk ratings serve as the primary credit quality indicator for our loan portfolio. Because our internal borrower risk ratings provide important information on the probability of default, they are a key input in determining our allowance for credit losses.

 We use our internal risk ratings to measure the credit risk of each borrower and loan facility, identify or confirm problem or potential problem loans in a timely manner, differentiate risk within each of our portfolio segments, assess the overall credit quality of our loan portfolio and manage overall risk levels. Our internally assigned borrower risk ratings, which we map to equivalent credit ratings by external credit rating agencies, serve as the primary credit quality indicator for our loan portfolio.

 Criticized loans totaled $219 million and $249 million as of May 31, 2025 and 2024, respectively, and represented approximately 1% of total loans outstanding as of each respective date. The decrease of $30 million in criticized loans was due primarily to $23 million of payments received from a CFC electric power supply borrower in the doubtful category and a $4 million decrease in loans outstanding to one CFC electric distribution borrower in the special mention category. Each of the borrowers with loans outstanding in the criticized category was current with regard to all principal and interest amounts due to us as of May 31, 2025 and 2024.

 We provide additional information on our borrower risk rating classifications, including the amount of loans outstanding in each of the criticized loan categories of special mention, substandard and doubtful, in "Note 1—Summary of Significant Accounting Policies" and "Note 4—Loans" in this Report.

 Allowance for Credit Losses

 We are required to maintain an allowance based on a current estimate of credit losses that are expected to occur over the remaining contractual term of the loans in our portfolio. Our allowance for credit losses consists of a collective allowance and an asset-specific allowance. The collective allowance is established for loans in our portfolio that share similar risk characteristics and are therefore evaluated on a collective, or pool, basis in measuring expected credit losses. The asset-specific allowance is established for loans in our portfolio that do not share similar risk characteristics with other loans in our portfolio and are therefore evaluated on an individual basis in measuring expected credit losses.

 Table 19 presents, by legal entity and member class, loans outstanding and the related allowance for credit losses and allowance coverage ratio as of May 31, 2025 and 2024 and the allowance components as of each date.

 Table 19: Allowance for Credit Losses by Borrower Member Class and Evaluation Methodology

 2025
 2024

 Loans Outstanding(1)

 Allowance for Credit Losses
 Allowance Coverage Ratio(2)

 Loans Outstanding(1)

 Allowance for Credit Losses
 Allowance Coverage Ratio(2)

 CFC:

 $
 $
 18,473
 0.06
 %
 $
 $
 0.06
 %

 15,456
 0.26
 25,583
 0.45

 1,100
 0.44
 1,189
 0.50

 35,029
 0.10
 42,726
 0.13

 NCSC:

 3,818
 0.35
 3,937
 0.42

 1,768
 0.31
 2,063
 0.34

 5,586
 0.34
 6,000
 0.39

 Total
 $
 $
 40,615
 0.11
 $
 $
 0.14

 Allowance components:

 Collective allowance
 $
 37,031,238
 $
 31,313
 0.08
 %
 $
 34,472,276
 $
 31,556
 0.09
 %

 Asset-specific allowance
 32,310
 9,302
 28.79
 55,908
 17,170
 30.71

 Total
 $
 $
 40,615
 0.11
 $
 $
 0.14

 Allowance coverage ratios:

 Nonaccrual loans(3)

 $
 155.62
 %
 $
 100.12
 %

 (1)Represents the unpaid principal balance, net of discounts, charge-offs and recoveries, of loans as of each period-end. Excludes unamortized deferred loan origination costs of $16 million and $14 million as of May 31, 2025 and 2024, respectively.
 (2)Calculated based on the allowance for credit losses attributable to each member class and allowance components at period-end divided by the related loans outstanding at period-end.
 (3)Calculated based on the total allowance for credit losses at period-end divided by loans outstanding on nonaccrual status at period end. Nonaccrual loans represented 0.07% and 0.14% of total loans outstanding as of May 31, 2025 and 2024, respectively. We provide additional information on our nonaccrual loans in "Note 4—Loans" in this Report.

 The allowance for credit losses and allowance coverage ratio decreased to $41 million and 0.11%, respectively, as of May 31, 2025, from $49 million and 0.14%, respectively, as of May 31, 2024. The $8 million decrease in the allowance for credit losses was attributable to a reduction in the asset-specific allowance due to higher actual than expected payments received on a nonperforming loan during FY2025. Our collective allowance decreased slightly during FY2025, primarily due to an improved recovery rate on our power supply loan portfolio, partially offset by an increase attributable to loan portfolio growth.

 We discuss our methodology for estimating the allowance for credit losses under the current expected credit loss ("CECL") model in "Note 1—Summary of Significant Accounting Policies—Allowance for Credit Losses—Loan Portfolio" and provide information on management's judgment and the uncertainties involved in our determination of the allowance for credit losses in the below section "Critical Accounting Estimates" of this Report. We provide additional information on our loans and allowance for credit losses under "Note 4—Loans" and "Note 5—Allowance for Credit Losses" of this Report.

 Counterparty Credit Risk

 In addition to credit exposure from our borrowers, we enter into other types of financial transactions in the ordinary course of business that expose us to counterparty credit risk, primarily related to transactions involving our cash and cash equivalents, securities held in our investment securities portfolio and derivatives. We mitigate our risk by only entering into these transactions with counterparties with investment-grade ratings, establishing operational guidelines and counterparty

 exposure limits and monitoring our counterparty credit risk position. We evaluate our counterparties based on certain quantitative and qualitative factors, and periodically assign internal risk rating grades to our counterparties.

 Cash and Investments Securities Counterparty Credit Exposure

 Our cash and cash equivalents and investment securities totaled $135 million and $125 million, respectively, as of May 31, 2025. The primary credit exposure associated with investments held in our investment portfolio is that issuers will not repay principal and interest in accordance with the contractual terms. Our cash and cash equivalents with financial institutions generally have an original maturity of less than one year and pursuant to our investment policy guidelines, all fixed-income debt securities, at the time of purchase, must be rated at least investment grade based on external credit ratings from at least two of the leading global credit rating agencies, when available, or the corresponding equivalent, when not available. We therefore believe that the risk of default by these counterparties is low. As of May 31, 2025, our overall counterparty credit risk was deemed to be satisfactory and not materially changed compared with May 31, 2024.

 We provide additional information on the holdings in our investment securities portfolio below under "Liquidity Risk—Investment Securities Portfolio" and in "Note 3—Investment Securities."

 Derivative Counterparty Credit Exposure

 Our derivative counterparty credit exposure relates principally to interest-rate swap contracts. We generally engage in OTC derivative transactions, which expose us to individual counterparty credit risk because these transactions are executed and settled directly between us and each counterparty. We are exposed to the risk that an individual derivative counterparty defaults on payments due to us, which we may not be able to collect or which may require us to seek a replacement derivative from a different counterparty. This replacement may be at a higher cost, or we may be unable to find a suitable replacement.

 We manage our derivative counterparty credit exposure through diversification of our derivative positions among various counterparties and by executing derivative transactions with financial institutions that have investment-grade credit ratings and maintaining enforceable master netting arrangements with these counterparties, which allow us to net derivative assets and liabilities with the same counterparty. We also manage the credit risk associated with our derivative counterparties by using internal credit risk analysis, limits and a monitoring process. We had 12 active derivative counterparties with credit ratings ranging from Aa1 to Baa1 by Moody's as of both May 31, 2025 and 2024, and from AA- to BBB+ by S&P as of both May 31, 2025 and 2024. The total outstanding notional amount of derivatives with these counterparties was $7,252 million and $7,366 million as of May 31, 2025 and 2024, respectively. The highest single derivative counterparty concentration, by outstanding notional amount, accounted for approximately 25% and 24% of the total outstanding notional amount of our derivatives as of May 31, 2025 and 2024, respectively.

 While our derivative agreements include netting provisions that allow for offsetting of all contracts with a given counterparty in the event of default by one of the two parties, we report the fair value of our derivatives on a gross basis by individual contract as either a derivative asset or derivative liability on our consolidated balance sheets. The fair value of our derivatives includes credit valuation adjustments reflecting counterparty credit risk. We estimate our exposure to credit loss on our derivatives by calculating the replacement cost to settle at current market prices, as defined in our derivative agreements, of all outstanding derivatives in a net gain position at the counterparty level where a right of legal offset exists. We provide information on the impact of netting provisions under our master swap agreements and collateral pledged, if any, in "Note 10—Derivative Instruments and Hedging Activities—Impact of Derivatives on Consolidated Balance Sheets." We believe our exposure to derivative counterparty risk, at any point in time, is equal to the amount of our outstanding derivatives in a net gain position, at the individual counterparty level, which totaled $506 million and $611 million as of May 31, 2025 and 2024, respectively.

 We provide additional detail on our derivative agreements, including a discussion of derivative contracts with credit rating triggers and settlement amounts that would be required in the event of a ratings trigger, in "Note 10—Derivative Instruments and Hedging Activities" in this Report.

 See "Item 1A. Risk Factors" in this Report for additional information about credit risks related to our business.

 LIQUIDITY RISK

 We define liquidity as the ability to convert assets into cash quickly and efficiently, maintain access to available funding and roll over or issue new debt under normal operating conditions and periods of CFC-specific and/or market stress, to ensure that we can meet borrower loan requests, pay current and future obligations and fund our operations in a cost-effective manner.

 In addition to cash on hand and investment securities, our primary sources of funds include member loan principal repayments, committed bank revolving lines of credit, committed loan facilities under the Guaranteed Underwriter Program, a revolving note purchase agreement with Farmer Mac and proceeds from debt issuances to members and in the public capital markets. Our primary uses of funds include loan advances to members, principal and interest payments on borrowings, periodic interest settlement payments related to our derivative contracts and operating expenses.

 Liquidity Risk Management

 Our liquidity risk management framework is designed to meet our liquidity objectives of providing a reliable source of funding to members, meet maturing debt and other financial obligations, issue new debt and fund our operations on a cost-effective basis under normal operating conditions as well as under CFC-specific and/or market stress conditions. Our Asset Liability Committee establishes guidelines that are intended to ensure we maintain sufficient, diversified sources of liquidity to cover potential funding requirements as well as unanticipated contingencies. Our Treasury and Finance Group develops strategies to manage our targeted liquidity position, projects our funding needs under various scenarios, including adverse circumstances, and monitors our liquidity position on an ongoing basis.

 Available Liquidity

 As part of our strategy in managing liquidity risk and meeting our liquidity objectives, we seek to maintain various committed sources of funding that are available to meet our near-term liquidity needs. Table 20 presents a comparison between our available liquidity, which consists of cash and cash equivalents, our debt securities investment portfolio and amounts under committed credit facilities as of May 31, 2025 and 2024.

 Table 20: Available Liquidity

 2025
 2024

 Total
 Accessed
 Available
 Total
 Accessed
 Available

 Liquidity sources:

 Cash and investment debt securities:

 Cash and cash equivalents
 $
 $
 —
 $
 $
 $
 —
 $

 Debt securities investment portfolio(1)

 —
 —

 Total cash and investment debt securities
 —
 —

 Committed credit facilities:

 Committed bank revolving line of credit agreements—unsecured(2)

 3,300
 $
 3,293
 2,800
 2,798

 Guaranteed Underwriter Program committed facilities—secured(3)

 10,373
 9,023
 1,350
 9,923
 8,723
 1,200

 Farmer Mac revolving note purchase agreement—secured(4)

 6,500
 3,780
 2,720
 6,000
 3,864
 2,136

 Total committed credit facilities
 20,173
 12,810
 7,363
 18,723
 12,589
 6,134

 Total available liquidity
 $
 20,422
 $
 12,810
 $
 7,612
 $
 19,284
 $
 12,589
 $
 6,695

 (1)Represents the aggregate fair value of our portfolio of debt securities as of period-end. Our portfolio of equity securities consists primarily of preferred stock securities that are not as readily redeemable; therefore, we exclude our portfolio of equity securities from our available liquidity.

 (2)The committed bank revolving line of credit agreements consist of a three-year and a four-year revolving line of credit agreement. The accessed amount of $7 million and $2 million as of May 31, 2025 and 2024, respectively, relates to letters of credit issued pursuant to the four-year revolving line of credit agreement.
 (3)The committed facilities under the Guaranteed Underwriter Program are not revolving.
 (4)Availability subject to market conditions.

 Although as a nonbank financial institution we are not subject to regulatory liquidity requirements, our liquidity management framework includes monitoring our liquidity and funding positions on an ongoing basis and assessing our ability to meet our scheduled debt obligations and other cash flow requirements based on point-in-time metrics as well as forward-looking projections. Our liquidity and funding assessment takes into consideration amounts available under existing liquidity sources, the expected rollover of member short-term investments and scheduled loan principal payment amounts, as well as our continued ability to access the capital markets and other non-capital market-related funding sources.

 Liquidity Risk Assessment

 We utilize several measures to assess our liquidity risk and ensure we have adequate coverage to meet our liquidity needs. Our primary liquidity measures indicate the extent to which we have sufficient liquidity to cover the payment of scheduled debt obligations over the next 12 months. We calculate our liquidity coverage ratios under several scenarios that take into consideration various assumptions about our near-term sources and uses of liquidity, including the assumption that maturities of member short-term investments will not have a significant impact on our anticipated cash outflows. Our members have historically maintained a relatively stable level of short-term investments in CFC in the form of daily liquidity fund notes, commercial paper, select notes and medium-term notes. As such, we expect that our members will continue to reinvest their excess cash in short-term investment products offered by CFC.

 Table 21 presents our primary liquidity coverage ratios as of May 31, 2025 and 2024 and displays the calculation of each ratio as of these respective dates based on the assumptions discussed above.

 Table 21: Liquidity Coverage Ratios

 2025
 2024

 Liquidity coverage ratio:(1)

 Total available liquidity(2)

 $
 7,612
 $
 6,695

 Debt scheduled to mature over next 12 months:

 5,091
 4,333

 Long-term and subordinated debt scheduled to mature over next 12 months
 3,679
 2,676

 Total debt scheduled to mature over next 12 months
 8,770
 7,009

 Excess (deficit) in available liquidity over debt scheduled to mature over next 12 months
 $
 (1,158)
 $
 (314)

 Liquidity coverage ratio
 0.87
 0.96

 Liquidity coverage ratio, excluding expected maturities of member short-term investments(3)

 Total available liquidity(2)

 $
 7,612
 $
 6,695

 Total debt scheduled to mature over next 12 months
 8,770
 7,009

 Exclude: Member short-term investments(4)

 (2,885)
 (3,328)

 Total debt, excluding member short-term investments, scheduled to mature over next 12 months

 5,885
 3,681

 Excess in available liquidity over total debt, excluding member short-term investments, scheduled to mature over next 12 months
 $
 1,727
 $
 3,014

 Liquidity coverage ratio, excluding expected maturities of member short-term investments
 1.29
 1.82

 (1)Calculated based on available liquidity at period-end divided by total debt scheduled to mature over the next 12 months at period-end.

 (2)Total available liquidity is presented above in Table 20.
 (3)Calculated based on available liquidity at period-end divided by debt, excluding member short-term investments, scheduled to mature over the next 12 months.
 (4)Member short-term investments include commercial paper sold directly to members, select notes, daily liquidity fund notes and short-term medium-term notes sold to members. See Table 23: Short-Term Borrowings—Outstanding Amount and Weighted-Average Interest Rates below for additional information.

 As presented in Table 21 above, our available liquidity of $7,612 million as of May 31, 2025 was $1,158 million less than our total scheduled debt obligations over the next 12 months of $8,770 million, consisting of short-term borrowings and long-term and subordinated debt. The short-term borrowings scheduled maturity amount consists of member investments of $2,885 million and dealer commercial paper of $2,206 million. The long-term and subordinated scheduled debt obligations over the next 12 months of $3,679 million consist of debt maturities and scheduled debt payment amounts, of which, $206 million was from member investments.

 We believe we can continue to roll over our member short-term investments of $2,885 million as of May 31, 2025, based on our expectation that our members will continue to reinvest their excess cash in short-term investment products offered by CFC. As mentioned above, our members historically have maintained a relatively stable level of short-term investments in CFC. Member short-term investments in CFC have averaged $3,363 million over the last 12 fiscal quarter-end reporting periods. Our available liquidity as of May 31, 2025 was $1,727 million in excess of, or 1.3 times over, our total $5,885 million scheduled debt obligations over the next 12 months, excluding member short-term investments. In addition, we expect to receive $1,668 million from scheduled long-term loan principal payments over the next 12 months. While our available liquidity increased by $917 million, or 14% as of May 31, 2025 compared to the prior year, the decline in the liquidity coverage ratio was primarily driven by an increase in debt scheduled to mature over the next 12 months. This was largely due to increased dealer commercial paper issuances to support substantial growth in line of credit loans activity, as well as higher volume of upcoming long-term debt maturities over the next 12 months.

 We expect to continue accessing the dealer commercial paper market as a cost-effective means of satisfying our incremental short-term liquidity needs. To mitigate commercial paper rollover risk, we expect to continue to maintain our committed bank revolving line of credit agreements and be in compliance with the covenants of these agreements so we can draw on these facilities, if necessary, to repay commercial paper that cannot be refinanced with similar debt. Under master repurchase agreements we have with our bank counter parties, we can obtain short-term funding in secured borrowing transactions by selling investment-grade corporate debt securities from our investment securities portfolio subject to an obligation to repurchase the same or similar securities at an agreed-upon price and date.

 The issuance of long-term debt, which represents the most significant component of our funding, allows us to reduce our reliance on short-term borrowings, as well as effectively manage our refinancing and interest rate risk. We expect to continue to issue long-term debt in the public capital markets and under our other non-capital market debt arrangements to meet our funding needs and believe that we have sufficient sources of liquidity to meet our debt obligations and support our operations over the next 12 months.

 Investment Securities Portfolio

 We have an investment portfolio of debt securities classified as trading and equity securities, both of which are reported on our consolidated balance sheets at fair value. Our debt securities investment portfolio totaled $114 million and $281 million as of May 31, 2025 and 2024, respectively, and is intended to serve as an additional source of liquidity. Under master repurchase agreements that we have with counterparties, we can obtain short-term funding by selling investment-grade corporate debt securities from our investment portfolio subject to an obligation to repurchase the same or similar securities at an agreed-upon price and date. Because we retain effective control over the transferred securities, transactions under these repurchase agreements are accounted for as collateralized financing agreements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a component of our short-term borrowings on our consolidated balance sheets. The aggregate fair value of debt securities underlying repurchase transactions is parenthetically disclosed on our consolidated balance sheets. We had no borrowings under repurchase agreements outstanding as of both May 31, 2025 and 2024; therefore, we had no debt securities in our investment portfolio pledged as collateral as of each respective date.

 Our investment portfolio also included equity securities with a fair value of $11 million as of May 31, 2025, consisting of common stock, and $37 million as of May 31, 2024, consisting primarily of preferred stock securities that are not as readily

 redeemable; therefore, we excluded the equity securities from our available liquidity. We provide additional information on our investment securities portfolio in "Note 3—Investment Securities" in this Report.

 Borrowing Capacity Under Various Credit Facilities

 The aggregate borrowing capacity under our committed bank revolving line of credit agreements, committed loan facilities under the Guaranteed Underwriter Program and revolving note purchase agreement with Farmer Mac totaled $20,173 million and $18,723 million as of May 31, 2025 and 2024, respectively, and the aggregate amount available for access totaled $7,363 million and $6,134 million as of each respective date. The following is a discussion of our borrowing capacity and key terms and conditions under each of these credit facilities.

 Committed Bank Revolving Line of Credit Agreements—Unsecured

 Our committed bank revolving lines of credit may be used for general corporate purposes; however, we generally rely on them as a backup source of liquidity for our commercial paper. On December 5, 2024, we amended our three-year and four-year committed bank revolving line of credit agreements to extend the maturity dates to November 28, 2027 and November 28, 2028, respectively, and to increase commitments by $250 million (excluding the $150 million commitment termination described below) under each of the three-year and four-year revolving credit agreements. Commitments of $150 million that were scheduled to mature on November 28, 2025 were terminated under the three-year revolving credit agreement and commitments of $150 million will continue to expire at the prior maturity date of November 28, 2026 under the four-year revolving credit agreement. As of May 31, 2025, the total commitment amount under the three-year facility and the four-year facility was $1,595 million and $1,705 million, respectively, resulting in a combined total commitment amount under the two facilities of $3,300 million. Under our current committed bank revolving line of credit agreements, we have the ability to request up to $300 million of letters of credit, which would result in a reduction in the remaining available amount under the facilities.

 Table 22 presents the total commitment amount under our committed bank revolving line of credit agreements, outstanding letters of credit and the amount available for access as of May 31, 2025.

 Table 22: Committed Bank Revolving Line of Credit Agreements

 Total Commitment
 Letters of Credit Outstanding
 Amount Available for Access
 Maturity
 Annual Facility Fee (1)

 Bank revolving agreements:

 3-year agreement

 $
 1,595
 $
 —
 $
 1,595
 November 28, 2027
 7.5 bps

 Total 3-year agreement

 1,595
 —
 1,595

 4-year agreement

 —
 November 28, 2026
 10.0 bps

 4-year agreement

 1,555
 1,548
 November 28, 2028
 10.0 bps

 Total 4-year agreement

 1,705
 1,698

 Total
 $
 3,300
 $
 $
 3,293

 (1)Facility fee based on CFC's senior unsecured credit ratings in accordance with the established pricing schedules at the inception of the related agreement.

 We did not have any outstanding borrowings under our committed bank revolving line of credit agreements as of May 31, 2025; however, we had letters of credit outstanding of $7 million under the four-year committed bank revolving agreement as of this date.

 Although our committed bank revolving line of credit agreements do not contain a material adverse change clause or rating triggers that would limit the banks' obligations to provide funding under the terms of the agreements, we must be in compliance with the covenants to draw on the facilities. We have been and expect to continue to be in compliance with the covenants under our committed bank revolving line of credit agreements. As such, we could draw on these facilities to repay commercial paper that cannot be rolled over.

 Guaranteed Underwriter Program Committed Facilities—Secured

 Under the Guaranteed Underwriter Program, we can borrow from the U.S. Treasury Department's Federal Financing Bank ("FFB") and use the proceeds to extend new loans to our members and refinance existing member debt. As part of the program, we pay fees based on our outstanding borrowings that are intended to help fund the USDA Rural Economic Development Loan and Grant program and thereby support additional investment in rural economic development projects. The borrowings under this program are guaranteed by RUS. Each advance is subject to quarterly amortization and a final maturity not longer than 30 years from the date of the advance.

 On December 18, 2024, we closed on a $450 million Series V committed loan facility from the FFB under the Guaranteed Underwriter Program. Pursuant to this facility, we may borrow any time before July 15, 2029. Each advance is subject to quarterly amortization and a final maturity not longer than 30 years from the date of the advance.

 As displayed in Table 20, we had accessed $9,023 million under the Guaranteed Underwriter Program and up to $1,350 million was available for borrowing as of May 31, 2025. Of the $1,350 million available borrowing amount, $450 million is available for advance through July 15, 2027, $450 million is available for advance through July 15, 2028 and $450 million is available for advance through July 15, 2029. We are required to pledge eligible distribution system loans or power supply system loans as collateral in an amount at least equal to our total outstanding borrowings under the Guaranteed Underwriter Program committed loan facilities, which totaled $6,457 million as of May 31, 2025.

 The notes payable to FFB and guaranteed by RUS under the Guaranteed Underwriter Program contain a provision that if during any portion of the fiscal year, our senior secured credit ratings do not have at least two of the following ratings: (i) A3 or higher from Moody's, (ii) A- or higher from S&P, (iii) A- or higher from Fitch or (iv) an equivalent rating from a successor rating agency to any of the above rating agencies, we may not make cash patronage capital distributions in excess of 5% of total patronage capital.

 Farmer Mac Revolving Note Purchase Agreement—Secured

 We have a revolving note purchase agreement with Farmer Mac that allows us to borrow, repay and re-borrow funds at any time through maturity, provided the outstanding principal does not exceed the agreement limit. On January 14, 2025, we amended the revolving note purchase agreement with Farmer Mac to increase the maximum borrowing availability to $6,500 million from $6,000 million, and extend the draw period from June 30, 2027 to January 14, 2030, with successive one-year renewals upon 60 days' notice by CFC, subject to approval by Farmer Mac and Farmer Mac Mortgage Securities Corporation. Under this agreement, we had outstanding secured notes payable totaling $3,780 million and $3,864 million as of May 31, 2025 and 2024, respectively. We borrowed $500 million in long-term notes payable, and repaid $500 million in short-term and $83 million in long-term notes payable under this note purchase agreement with Farmer Mac during FY2025. As displayed in Table 20, the amount available for borrowing under this agreement was $2,720 million as of May 31, 2025. We are required to pledge eligible electric distribution system or electric power supply system loans as collateral in an amount at least equal to the total principal amount of notes outstanding under this agreement.

 We provide additional information on pledged collateral below under "Pledged Collateral" in this section and "Note 4—Loans."

 Short-Term Borrowings

 Our short-term borrowings, which we rely on to meet our daily, near-term funding needs, consist of commercial paper, which we offer to members and dealers, select notes and daily liquidity fund notes offered to members, medium-term notes offered to members and dealers, and funds from repurchase secured borrowing transactions.

 Table 23: Short-Term Borrowings—Outstanding Amount and Weighted-Average Interest Rates

 2025
 2024

 Short-term borrowings:

 Commercial paper:

 Commercial paper sold through dealers, net of discounts
 $
 2,206,451
 4.47
 %
 $
 504,631
 5.41
 %

 Commercial paper sold directly to members, at par
 785,608
 3.98
 1,158,020
 5.08

 Total commercial paper
 2,992,059
 4.34
 1,662,651
 5.18

 Select notes to members
 1,304,240
 4.22
 1,274,066
 5.36

 Daily liquidity fund notes to members

 343,916
 3.75
 375,191
 4.60

 Medium-term notes sold to members
 451,201
 4.62
 520,782
 5.79

 Farmer Mac notes payable(1)

 —
 —
 5.87

 Total short-term borrowings outstanding
 $
 4.30
 $
 5.34

 (1)Advanced under the revolving note purchase agreement with Farmer Mac dated March 24, 2011. See "Note 7—Long-Term Debt" in this Report for additional information on this revolving note purchase agreement with Farmer Mac.

 Short-term borrowings increased by $758 million to $5,091 million as of May 31, 2025, from $4,333 million as of May 31, 2024, and accounted for 15% and 13% of total debt outstanding as of each respective date. The weighted-average cost of our outstanding short-term borrowings decreased to 4.30% as of May 31, 2025, from 5.34% as of May 31, 2024 due to the federal funds rate cuts during FY2025. The weighted-average maturity of our short-term borrowings decreased to 41 days as of May 31, 2025, from 49 days as of May 31, 2024.

 Table 24 displays the composition, by funding source, of our short-term borrowings as of May 31, 2025 and 2024. As indicated in Table 24, members' investments represented 57% and 77% of our outstanding short-term borrowings as of May 31, 2025 and 2024, respectively.

 Table 24: Short-Term Borrowings—Funding Sources

 2025
 2024

 % of Total Short-Term Borrowings
 % of Total Short-Term Borrowings

 Funding source:

 Members

 $
 2,884,965
 %
 $
 3,328,059
 %

 —
 —

 2,206,451
 504,631

 Total

 $
 %
 $
 %

 Member investments have historically been our primary source of short-term borrowings. The decrease in short-term member investments of $443 million as of May 31, 2025 compared with the prior year, was primarily due to a reduction in member commercial paper investments as our members used funds from these investments to finance capital expenditure programs and operating needs. Dealer commercial paper outstanding increased to $2,206 million as of May 31, 2025 from $505 million as of May 31, 2024, due to issuances to fund our loan portfolio growth. See "Note 6—Short-Term Borrowings" in this Report for additional information on our short-term borrowings.

 Long-Term and Subordinated Debt

 Long-term and subordinated debt, which represents the most significant source of our funding, totaled $29,678 million and $28,386 million as of May 31, 2025 and 2024, respectively, and accounted for 85% and 87% of total debt outstanding as of

 each respective date. See Table 25 below for a summary of our long-term and subordinated debt issuances and repayments during FY2025. Subsequent to FY2025, we issued $525 million of dealer medium-term notes at a floating interest rate with a term of 18 months.

 On November 1, 2024, we entered into an agency agreement with InspereX LLC, Citigroup Global Markets Inc., RBC Capital Markets, LLC and Wells Fargo Clearing Services, LLC, as agents, to launch a program through which we may offer and sell, from time to time, an unlimited aggregate principal amount of our subordinated deferrable interest notes. On November 1, 2024, we filed a prospectus supplement with the U.S. Securities and Exchange Commission ("SEC") related to these subordinated notes, which are issued under our effective shelf registration statement filed with the SEC in October 2023.

 These subordinated notes are unsecured and rank subordinate in right of payment to all of our current and future senior indebtedness. The subordinated notes are senior to our members' subordinated certificates and rank equal in right of payment and upon liquidation to our outstanding subordinated deferrable debt and any other equally ranked subordinated notes we may issue. During FY2025, we issued an aggregate principal amount of $44 million in subordinated notes that mature in 30 years under this new program.

 The issuance of long-term debt allows us to reduce our reliance on short-term borrowings and effectively manage our refinancing and interest rate risk, due in part to the multi-year contractual maturity structure of long-term debt. Pursuant to Rule 405 of the Securities Act, we are classified as a "well-known seasoned issuer." Under our effective shelf registration statements filed with the SEC, we may offer and issue the following debt securities:

 • an unlimited amount of collateral trust bonds and senior and subordinated debt securities, including medium-term notes, member capital securities and subordinated deferrable debt, until October 2026; and
 • daily liquidity fund notes up to $20,000 million in the aggregate—with a $3,000 million limit on the aggregate principal amount outstanding at any time—until March 2028.

 Although we register member capital securities and the daily liquidity fund notes with the SEC, these securities are not available for sale to the general public. Medium-term notes are available for sale to both the general public and members. Notwithstanding the foregoing, we have contractual limitations with respect to the amount of senior indebtedness we may incur.

 In addition to issuances of unlimited debt in the public capital markets under our shelf registrations discussed above, we also have access to private debt facilities. In January 2025, we settled $300 million of collateral trust bonds at a fixed rate of 5.23% with a weighted average term of 13.3 years in a private placement transaction, which is an unregistered debt offering.

 Long-Term Debt and Subordinated Debt—Issuances and Repayments

 Table 25 summarizes long-term and subordinated debt issuances and repayments during FY2025.

 Table 25: Long-Term and Subordinated Debt—Issuances and Repayments

 Year Ended May 31, 2025

 Issuances
 Repayments(1)

 Debt product type:

 Collateral trust bonds(2)

 $
 650,000
 $
 505,000

 334,962

 83,049

 Medium-term notes sold to members
 195,276
 134,472

 Medium-term notes sold to dealers
 2,410,147
 1,753,083

 43,811
 —

 12,949

 Total
 $
 4,099,246
 $
 2,823,515

 (1)Repayments include principal maturities, scheduled amortization payments, repurchases and redemptions.
 (2)Amount also includes the collateral trust bonds issued in a private placement transaction.

 We provide additional information on our financing activities under the above section "Consolidated Balance Sheet Analysis—Debt" and on the weighted-average interest rates on our long-term debt and subordinated certificates in "Note 7—Long-Term Debt," "Note 8—Subordinated Deferrable Debt" and "Note 9—Members' Subordinated Certificates" in this Report.

 Pledged Collateral

 Under our secured borrowing agreements, we are required to pledge loans, investment debt securities or other collateral and maintain certain pledged collateral ratios. Of our total debt outstanding of $34,769 million as of May 31, 2025, $17,133 million, or 49%, was secured by pledged loans totaling $20,516 million. In comparison, of our total debt outstanding of $32,718 million as of May 31, 2024, $17,095 million, or 52%, was secured by pledged loans totaling $21,403 million. The following provides additional information on the collateral pledging requirements for our secured borrowing agreements.

 Secured Borrowing Agreements—Pledged Loan Requirements

 We are required to pledge loans or other collateral in transactions under our collateral trust bond indentures, bond agreements under the Guaranteed Underwriter Program and note purchase agreement with Farmer Mac. Total debt outstanding is presented on our consolidated balance sheets net of unamortized discounts and issuance costs. Our collateral pledging requirements are based, however, on the face amount of secured outstanding debt, which excludes net unamortized discounts and issuance costs. However, as discussed below, we typically maintain pledged collateral in excess of the required percentage. Under the provisions of our committed bank revolving line of credit agreements, the excess collateral that we are allowed to pledge cannot exceed 150% of the outstanding borrowings under our collateral trust bond 2007 indentures, the Guaranteed Underwriter Program or the Farmer Mac note purchase agreements as of May 31, 2025.

 Table 26 displays the collateral coverage ratios pursuant to these secured borrowing agreements as of May 31, 2025 and 2024.

 Table 26: Collateral Pledged

 Requirement Coverage Ratios
 Actual Coverage Ratios(1)

 Minimum Debt Indentures
 Maximum Committed Bank Revolving Line of Credit Agreements

 2025
 2024

 Secured borrowing agreement type:

 Collateral trust bonds 1994 indenture(2)

 %
 N/A
 %
 %

 Collateral trust bonds 2007 indenture

 (1)Calculated based on the amount of collateral pledged divided by the face amount of outstanding secured debt.
 (2)In December 2024, our committed bank revolving line of credit agreements were amended to exclude collateral pledged under the collateral trust bonds 1994 indenture from the maximum coverage ratio required under the agreements. The required maximum coverage ratio was 150% prior to the amendments.

 Table 27 displays the unpaid principal balance of loans pledged for secured debt, the excess collateral pledged and unencumbered loans as of May 31, 2025 and 2024.

 Table 27: Loans—Unencumbered Loans

 2025
 2024

 $
 $

 Less: Loans required to be pledged under secured debt agreements(2)

 (17,320,024)
 (17,293,035)

 Loans pledged in excess of required amount(2)(3)

 (3,195,994)
 (4,110,051)

 Total pledged loans

 (20,516,018)
 (21,403,086)

 Unencumbered loans
 $
 16,547,530
 $
 13,125,098

 Unencumbered loans as a percentage of total loans outstanding
 %
 %

 (1)Represents the unpaid principal balance of loans as of the end of each period. Excludes unamortized deferred loan origination costs of $16 million and $14 million as of May 31, 2025 and 2024, respectively.
 (2)Reflects unpaid principal balance of pledged loans.
 (3)If there is an event of default under most of our indentures, we can only withdraw the excess collateral if we substitute cash or permitted investments of equal value.

 As displayed above in Table 27, we had excess loans pledged as collateral totaling $3,196 million and $4,110 million as of May 31, 2025 and 2024, respectively. To ensure that we do not fall below the minimum collateral coverage ratio requirement, we typically pledge loans in excess of the required amount for the following reasons: (i) our distribution and power supply loans are typically amortizing loans that require scheduled principal payments over the life of the loan, whereas the debt securities issued under secured indentures and agreements typically have bullet maturities; (ii) distribution and power supply borrowers have the option to prepay their loans; and (iii) individual loans may become ineligible for various reasons, some of which may be temporary.

 We provide additional information on our borrowings, including the maturity profile, below in "Liquidity Risk" and additional information on pledged loans in "Note 4—Loans" in this Report. For additional detail on each of our debt product types, refer to "Note 6—Short-Term Borrowings," "Note 7—Long-Term Debt," "Note 8—Subordinated Deferrable Debt" and "Note 9—Members' Subordinated Certificates" in this Report.

 Member Loan Repayments

 Table 28 displays future scheduled loan principal payment amounts, by member class and by loan type, on loans outstanding as of May 31, 2025, disaggregated by amounts due (i) in one year or less; (ii) after one year up to five years; (iii) after five years up to 15 years; and (iv) after 15 years.

 Table 28: Loans—Scheduled Principal Payments

 Due 1 Year

 Due > 1 Year Up to 5 Years

 Due > 5 Years Up to 15 Years

 Due After 15 Years
 Total

 CFC:

 $
 3,475,963
 $
 5,947,308
 $
 11,022,089
 $
 8,817,135
 $

 292,902
 2,137,059
 2,105,629
 1,359,910

 10,482
 136,770
 39,164
 64,909

 3,779,347
 8,221,137
 13,166,882
 10,241,954

 NCSC:

 140,512
 542,589
 321,571
 74,091

 77,775
 396,349
 101,341
 —

 218,287
 938,938
 422,912
 74,091

 $
 3,997,634
 $
 9,160,075
 $
 13,589,794
 $
 10,316,045
 $

 $
 1,621,767
 $
 6,320,726
 $
 13,426,721
 $
 10,019,099
 $
 31,388,313

 2,375,867
 2,839,349
 163,073
 296,946
 5,675,235

 $
 3,997,634
 $
 9,160,075
 $
 13,589,794
 $
 10,316,045
 $

 Contractual Obligations

 Our contractual obligations affect both our short- and long-term liquidity needs. Our most significant contractual obligations include scheduled payments on our debt obligations. Table 29 displays scheduled amounts due on our debt obligations as of May 31, 2025 and the expected timing of these payments. The amounts presented reflect undiscounted future cash payment amounts due pursuant to these obligations, aggregated by the type of contractual obligation. The table excludes certain obligations that are short-term, such as trade payables, or where the amount is not fixed and determinable, such as derivatives subject to valuation based on market factors. The timing of actual future payments may differ from those presented due to a number of factors, such as discretionary debt redemptions or changes in interest rates that may impact our expected future cash interest payments.

 Table 29: Contractual Obligations(1)

 Payments Due by Period

In 1 Year or Less

After 1 Year Through 3 Years

After 3 Years Through 5 Years

After 5 Years
 Total

 $
 $
 —
 $
 —
 $
 —
 $

 3,618,102
 7,248,807
 5,440,118
 11,070,222
 27,377,249

 —
 —
 —
 1,343,811
 1,343,811

 Members' subordinated certificates(2)

 60,782
 9,394
 10,695
 1,103,823
 1,184,694

 Total long-term and subordinated debt
 3,678,884
 7,258,201
 5,450,813
 13,517,856
 29,905,754

 Finance leases

 1,267
 2,591
 2,560
 2,124
 8,542

 Contractual interest on long-term debt(3)

 1,187,499
 2,000,908
 1,445,393
 6,422,575
 11,056,375

 Total
 $
 9,959,066
 $
 9,261,700
 $
 6,898,766
 $
 19,942,555
 $
 46,062,087

 (1)Callable debt is included in this table at its contractual maturity.
 (2)Member loan subordinated certificates totaling $124 million are amortizing annually based on the unpaid principal balance of the related loan. Amortization payments on these certificates totaled $8 million in FY2025 and represented 6% of amortizing loan subordinated certificates outstanding.

 (3)Represents the amounts of future interest payments on long-term and subordinated debt outstanding as of May 31, 2025, based on the contractual terms of the securities. These amounts were determined based on certain assumptions, including that variable-rate debt continues to accrue interest at the contractual rates in effect as of May 31, 2025 until maturity, and redeemable debt continues to accrue interest until its contractual maturity.

 Off-Balance Sheet Arrangements

 In the ordinary course of business, we engage in financial transactions that are not presented on our consolidated balance sheets, or may be recorded on our consolidated balance sheets in amounts that are different from the full contract or notional amount of the transaction. Our off-balance sheet arrangements consist primarily of unadvanced loan commitments intended to meet the financial needs of our members and guarantees of member obligations, which may affect our liquidity and funding requirements based on the likelihood that borrowers will advance funds under the loan commitments or we will be required to perform under the guarantee obligations. We provide information on our unadvanced loan commitments in "Note 4—Loans" and information on our guarantee obligations in "Note 13—Guarantees."

 Projected Near-Term Sources and Uses of Funds

 Table 30 below displays a projection of our primary long-term sources and uses of funds as of May 31, 2025, by quarter, over each of the next six fiscal quarters. Our projection is based on the following, which includes several assumptions: (i) the estimated issuance of long-term debt, including capital market and other non-capital market term debt, is based on our market-risk management goal of minimizing the mismatch between the cash flows from our financial assets and our financial liabilities; (ii) long-term loan scheduled amortization repayment amounts represent scheduled loan principal payments for long-term loans outstanding as of May 31, 2025 and estimated loan principal payments for long-term loan advances, plus estimated prepayment amounts on long-term loans; (iii) long-term and subordinated debt maturities consist of both scheduled principal maturity and amortization amounts and projected principal maturity and amortization amounts on term debt outstanding in each period presented; and (iv) long-term loan advances are based on our current projection of member demand for loans. In addition, amounts available under our committed bank revolving lines of credit, net increases in dealer commercial paper and short-term member investments, are intended to serve as a backup source of liquidity.

 Table 30: Projected Long-Term Sources and Uses of Funds(1)

 Projected Long-Term Sources of Funds
 Projected Long-Term Uses of Funds

 Long-Term Debt Issuance
 Anticipated Long-Term
 Loan Repayments(3)

 Total Projected
Long-Term Sources of
Funds
 Long-Term and Subordinated Debt Maturities(4)

 Long-Term
 Loan Advances
 Total Projected Long-Term
Uses of
Funds

 1Q FY 2026(2)

 $
 1,525
 $
 $
 1,930
 $
 $
 $
 1,101

 2Q FY 2026

 1,500
 1,918
 1,131
 1,805

 3Q FY 2026

 1,200
 1,632
 1,874

 4Q FY 2026

 1,180
 1,593
 1,031
 1,908

 1Q FY 2027

 1,435
 1,556

 2Q FY 2027

 1,329
 1,133
 2,032

 Total
 $
 7,135
 $
 2,702
 $
 9,837
 $
 5,401
 $
 4,875
 $
 10,276

 (1)The dates presented represent the end of each quarterly period through the quarter ended November 30, 2026.
 (2)The projected long-term debt issuance for the period includes $525 million of dealer medium-term notes issued in June 2025.
 (3)Anticipated long-term loan repayments include scheduled long-term loan amortizations and anticipated cash repayments at repricing date.
 (4)Long-term debt maturities also include expected early redemptions of debt and exclude long-term member medium-term notes maturing over the next 12 months totaling $145 million, as we expect we can continue to roll over our member medium-term notes investments based on our expectation that our members will continue to reinvest their excess cash with us.

 As displayed in Table 30, we currently project long-term advances of $3,141 million over the next 12 months, which we project will exceed anticipated long-term loan repayments over the same period of $1,668 million, resulting in net long-term loan growth of approximately $1,473 million over the next 12 months.

 The estimates presented above are developed at a particular point in time based on our expected future business growth and funding. Our actual results and future estimates may vary, perhaps significantly, from the current projections, as a result of changes in market conditions, management actions or other factors.

 Credit Ratings

 Our funding and liquidity, borrowing capacity, ability to access capital markets and other sources of funds and the cost of these funds are partially dependent on our credit ratings. During FY2025, Moody's, S&P and Fitch affirmed CFC's credit ratings and stable outlook. Table 31 displays our credit ratings as of May 31, 2025.

 On June 2, 2025, at our request, S&P withdrew its "A-2" short-term issue ratings on CFC's commercial paper program. The "A-" long-term issuer credit rating, the stable outlook and the long-term issue ratings are unchanged as of the date of this Report.

 Table 31: Credit Ratings

 CFC credit ratings and outlook:
 Moody's
 S&P
 Fitch

 Long-term issuer credit rating(1)

 A2
 A-
 A

 Senior secured debt(2)

 A1
 A-
 A+

 Senior unsecured debt(3)

 A2
 A-
 A

 Subordinated debt
 A3
 BBB
 BBB+

 P-1
 A-2
 F1

 Outlook
 Stable
 Stable
 Stable

 Ratings and outlook confirmation date
 February 21, 2025

 November 14, 2024

 September 19, 2024

 (1)Based on our senior unsecured debt rating.
 (2)Applies to our collateral trust bonds.
 (3)Applies to our medium-term notes.

 See "Credit Risk—Counterparty Credit Risk—Derivative Counterparty Credit Exposure" above for information on credit rating provisions related to our derivative contracts.

 Financial Ratios

 During FY2025, we refined our methodology for calculating the debt-to-equity ratio and adjusted debt-to-equity ratio. We provide a more detailed discussion of the revised debt-to-equity ratio and adjusted debt-to-equity ratio under the section "Non-GAAP Financial Measures and Reconciliations" in this Report.

 Our debt-to-equity ratio under the revised methodology was 11.20 and 10.86 as of May 31, 2025 and 2024, respectively. The increase in the debt-to-equity ratio during FY2025 was due to an increase in debt to fund loan growth, partially offset by an increase in total equity. The increase in total equity was primarily due to our reported net income of $140 million for FY2025, partially offset by the CFC Board of Directors' authorized patronage capital retirement of $47 million in July 2024.

 Our adjusted debt-to-equity ratio under the revised methodology was 7.39 and 7.27 as of May 31, 2025 and 2024, respectively. The increase in the adjusted debt-to-equity ratio during FY2025 was due to an increase in adjusted total debt outstanding resulting from additional borrowings to fund growth in our loan portfolio, partially offset by an increase in adjusted total equity. The increase in adjusted total equity was primarily due to a combined impact of our adjusted net income of $245 million for FY2025 and issuances of subordinated deferrable debt during FY2025, partially offset by a decrease in equity of $47 million from CFC Board of Directors' authorized patronage capital retirements in July 2024.

 Debt Covenants

 As part of our short-term and long-term borrowing arrangements, we are subject to various financial and operational covenants. If we fail to maintain specified financial ratios, such failure could constitute a default by CFC of certain covenants under our committed bank revolving line of credit agreements and senior debt indentures. We were in compliance with all covenants and conditions under our committed bank revolving line of credit agreements and senior debt indentures as of May 31, 2025.

 As discussed above in "Non-GAAP Financial Measures," the financial covenants set forth in our committed bank revolving line of credit agreements and senior debt indentures are based on adjusted financial measures, including adjusted TIER. We provide a reconciliation of adjusted TIER and other non-GAAP financial measures disclosed in this Report to the most comparable U.S. GAAP financial measures below in "Non-GAAP Financial Measures and Reconciliations."

 MARKET RISK

 Interest rate risk represents our primary source of market risk, as interest rate volatility or changes in interest rates can have a significant impact on our earnings and overall financial condition as a financial institution. We are exposed to interest rate risk primarily from the differences in the timing between the maturity or repricing of our loans and the liabilities funding our loans. We use derivatives as a tool in matching the duration and repricing characteristics of our interest rate-sensitive assets and liabilities. Below we discuss how we manage and measure interest rate risk.

 Interest Rate Risk Management

 Our interest rate risk-management objective is to prudently manage the timing of cash flows between interest-earning assets and interest-bearing liabilities in order to mitigate interest rate risk in accordance with CFC's board policy and risk limits and guidelines established by the Asset Liability Committee ("ALCO"). ALCO provides oversight of our exposure to interest rate risk and ensures that our exposure is compliant with established risk limits and guidelines. We seek to generate stable adjusted net interest income on a sustained and long-term basis by minimizing the mismatch between the cash flows from our interest rate-sensitive financial assets and our financial liabilities. We use derivatives as a tool in matching the duration and repricing characteristics of our assets and liabilities, which we discuss above in "Consolidated Results of Operations—Non-Interest Income—Derivative Gains (Losses)" and "Note 10—Derivative Instruments and Hedging Activities."

 Interest Rate Risk Assessment

 Our Asset Liability Management ("ALM") framework includes the use of analytic tools and capabilities, enabling CFC to generate a comprehensive profile of our interest rate risk exposure. We routinely measure and assess our interest rate risk exposure using various methodologies through the use of ALM models that enable us to accurately measure and monitor our interest rate risk exposure under multiple interest rate scenarios using several different techniques. Below we present two measures used to assess our interest rate risk exposure: (i) the interest rate sensitivity of projected net interest income and adjusted net interest income; and (ii) duration gap.

 Interest Rate Sensitivity Analysis

 We regularly evaluate the sensitivity of our interest-earning assets and the interest-bearing liabilities funding those assets and our net interest income and adjusted net interest income projections under multiple interest rate scenarios. Each month we update our ALM models to reflect our existing balance sheet position and incorporate different assumptions about forecasted changes in our balance sheet position over the next 12 months. Based on the forecasted balance sheet changes, we generate various projections of net interest income and adjusted net interest income over the next 12 months. Management reviews and assesses these projections and underlying assumptions to identify a baseline scenario of projected net interest income and adjusted net interest income over the next 12 months, which reflects what management considers, at the time, as the most likely scenario. As discussed under "Non-GAAP Financial Measures," we derive adjusted net interest income by adjusting our reported interest expense and net interest income to include the impact of net derivative cash settlement amounts.

 Our interest rate sensitivity analyses take into consideration existing interest rate-sensitive assets and liabilities as of the reported balance sheet date and forecasted changes to the balance sheet over the next 12 months under management's baseline projection. As discussed in the "Executive Summary—Outlook" section, we currently anticipate net loan growth of $2,059 million over the next 12 months and overall, the market expects interest rates to decline, with a steepening yield curve ahead.

 Based on our current baseline forecast assumptions, which include a total of 75 basis points of federal funds rate cuts from May 2025 through May 2026, we project increases in our reported net interest income and net interest yield over the next 12 months compared with the 12-month period ended May 31, 2025. We also project an increase in our adjusted net interest income over the next 12 months relative to the 12-month period ended May 31, 2025, primarily driven by projected loan growth. We project a slight decrease in adjusted net interest yield over the next 12 months, primarily due to the current shape of the yield curve, our baseline interest rate forecast and that our interest-earning assets, primarily lines of credit, are repricing faster than interest-bearing liabilities. Additionally, lower-cost debt maturing in the near term will need to be refinanced at a forecasted higher interest rate.

 Table 32 presents the estimated percentage impact that a hypothetical instantaneous parallel shift of additional plus or minus 100 basis points in the interest rate yield curve, relative to our base case forecast yield curve that includes 75 basis points of federal funds rate cuts, would have on our projected baseline 12-month net interest income and adjusted net interest income as of May 31, 2025 and 2024. We also present the estimated percentage impact on our projected baseline 12-month net interest income and adjusted net interest income assuming a hypothetical inverted yield curve under which shorter-term interest rates increase by an instantaneous 75 basis points and longer-term interest rates decrease by an instantaneous 75 basis points.

 Table 32: Interest Rate Sensitivity Analysis

 Estimated Impact(1)

 + 100 Basis Points
 – 100 Basis Points
 Inverted
 + 100 Basis Points
 – 100 Basis Points
 Inverted

 (1.68)%
 1.79%
 (5.07)%
 (3.10)%
 3.22%
 (5.12)%

 Derivative cash settlements
 11.33%
 (11.32)%
 9.12%
 11.25%
 (11.25)%
 9.31%

 Adjusted net interest income(2)

 9.65%
 (9.54)%
 4.04%
 8.15%
 (8.04)%
 4.20%

 (1)The actual impact on our reported and adjusted net interest income may differ significantly from the sensitivity analysis presented.
 (2)We include net periodic derivative cash settlement interest amounts as a component of interest expense in deriving adjusted net interest income. See the section "Non-GAAP Financial Measures and Reconciliations" for a reconciliation of the non-GAAP financial measures presented in this Report to the most comparable U.S. GAAP financial measures.

 The changes in the sensitivity measures between May 31, 2025 and 2024 are primarily attributable to changes in the size and composition of our forecasted balance sheet, as well as changes in current interest rates and forecasted interest rates. As the interest rate sensitivity simulations displayed in Table 32 indicate, we would expect an unfavorable impact on our projected net interest income over a 12-month horizon as of May 31, 2025, under the hypothetical scenario of an instantaneous parallel shift of plus 100 basis points in the interest rate yield curve and an inverted yield curve. We would expect an unfavorable impact on our adjusted net interest income over a 12-month horizon as of May 31, 2025, under the hypothetical scenario of an instantaneous parallel shift of minus 100 basis points in the interest rate yield curve.

 Duration Gap

 The duration gap, which represents the difference between the estimated duration of our interest-earning assets and the estimated duration of our interest-bearing liabilities, summarizes the extent to which the cash flows for assets and liabilities are matched over time. We use derivatives in managing the differences in timing between the maturities or repricing of our interest-earning assets and the debt funding those assets. A positive duration gap indicates that the duration of our interest-earning assets is greater than the duration of our debt and derivatives, and therefore denotes an increased exposure to rising interest rates over the long term. Conversely, a negative duration gap indicates that the duration of our interest-earning assets is less than the duration of our debt and derivatives, and therefore denotes an increased exposure to declining interest rates over the long term. While the duration gap provides a relatively concise and simple measure of the interest rate risk inherent

 on our consolidated balance sheet as of the reported date, it does not incorporate projected changes in our consolidated balance sheet.

 The duration gap narrowed to positive 0.27 months as of May 31, 2025, from negative 1.13 months as of May 31, 2024 and was within the risk limits and guidelines established by CFC's Asset Liability Committee as of each respective date. The shift to a positive duration gap is primarily due to shorter duration liabilities funding interest-earning assets.

 Limitations of Interest Rate Risk Measures

 While we believe that the interest income sensitivities and duration gap measures provided are useful tools in assessing our interest rate risk exposure, there are inherent limitations in any methodology used to estimate the exposure to changes in market interest rates. These measures should be understood as estimates rather than as precise measurements. The interest rate sensitivity analyses only contemplate certain hypothetical movements in interest rates and are performed at a particular point in time based on the existing balance sheet and, in some cases, expected future business growth and funding mix assumptions. The strategic actions that management may take to manage our balance sheet may differ significantly from our projections, which could cause our actual interest income to differ substantially from the above sensitivity analysis. Moreover, as discussed above, we use various other methodologies to measure and monitor our interest rate risk under multiple interest rate scenarios, which, together, provide a comprehensive profile of our interest rate risk.

 OPERATIONAL RISK

 Operational risk represents the risk of loss resulting from certain risk classifications, including, but not limited to, the execution of unauthorized transactions by employees; reputation risk; talent management (e.g., the inability to retain or attract sufficiently qualified employees); errors relating to loan documentation, transaction processing and technology; the inability to perfect liens on collateral; breaches of internal control and information systems; and the risk of fraud by employees or persons outside the company. Potential legal actions that could arise as a result of operational deficiencies, noncompliance with covenants in our revolving credit agreements and indentures, employee misconduct or adverse business decisions are also considered part of operational risk. In the event of a breakdown in internal controls, improper access to or operation of systems or improper employee actions, we could incur financial loss. Operational risk also includes breaches of technology and information systems resulting from unauthorized access to confidential or sensitive information or from internal or external threats, such as cyberattacks, whether on our technology infrastructure or in relation to third-party vendors that store confidential or sensitive internal data. Furthermore, third-party risk is another important component of our operational risk focus requiring identification, assessment and mitigation of critical risks arising from relationships with third-party vendors, suppliers, partners, service providers and contractors.

 Operational risk is inherent in all business activities. The measurement, assessment and effective management of such risk is important to the achievement of our objectives. Operational risk is a core component of CFC's Enterprise Risk Management framework and is governed by the CFC Board of Directors while management oversight of the risk is the responsibility of the Chief Risk Officer. We maintain related risk guidelines and limits, business policies and procedures, employee training, an internal control framework, a comprehensive business continuity and disaster recovery plan, as well as a detailed third-party risk management program that are collectively intended to provide a sound operational environment. Our business policies and controls have been designed to manage operational risk at appropriate levels given our financial strength, the business environment and markets in which we operate, and the nature of our businesses, while also considering factors such as competition and regulation. Corporate Compliance monitors compliance with established procedures and applicable laws that are designed to ensure adherence to generally accepted conduct, ethics and business practices defined in our corporate policies. We provide employee compliance training programs, including information protection, Regulation FD ("Fair Disclosure") compliance and operational risk. Internal Audit examines the design and operating effectiveness of our operational, compliance and financial reporting internal controls on an ongoing basis.

 Our business continuity and disaster recovery plan is monitored by our Business Technology Services Group and establishes the basic principles necessary to ensure emergency response, resumption, restoration and permanent recovery of CFC's operations and business activities during a business interruption event. Each of our departments is required to develop, exercise, test and maintain business resumption plans for the recovery of business functions and processing resources to minimize disruption for our members and other parties with whom we do business. We conduct disaster recovery exercises

 periodically that include both the Business Technology Services Group and business areas. The business resumption plans are based on a risk assessment that considers potential losses due to unavailability of service versus the cost of resumption. These plans anticipate a variety of probable scenarios ranging from local to regional crises.

 We continue to enhance our crisis management framework to provide additional corporate guidance on the management of and response to significant crises that may have an adverse disruptive impact on our business. The crises identified include, but are not limited to, man-made and natural disasters including infectious disease pandemics, technology disruption and workforce issues. The objectives of the enhancements are to ensure, in the event of an identified crisis, we have well-documented plans in place to protect our employees and the work environment, safeguard CFC's operations, protect CFC's brand and reputation and minimize the impact of business disruptions. We conducted a business impact analysis for each identified crisis to assess the potential impact on our business operations, financial performance, technology and staff. The results of the business impact analysis have been utilized to develop management action plans that align business priorities, clarify responsibilities and establish processes and procedures that enable us to respond in a timely, proactive manner and take appropriate actions to manage and mitigate the potential disruptive impact of specified crises.

 Our cybersecurity risk-management efforts are a core component of our overall enterprise risk management framework and CFC's operational risk oversight. We provide more information on our cybersecurity risk management and strategy as well as cybersecurity governance in "Item 1C. Cybersecurity."

 CRITICAL ACCOUNTING ESTIMATES

 The preparation of financial statements in conformity with U.S. GAAP requires management to make a number of judgments, estimates and assumptions that affect the reported amount of assets, liabilities, income and expenses in our consolidated financial statements. Understanding our accounting policies and the extent to which we use management's judgment and estimates in applying these policies is integral to understanding our financial statements. We provide a discussion of our significant accounting policies in "Note 1—Summary of Significant Accounting Policies" in this Report.

 Certain accounting estimates are considered critical because they involve significant judgments and assumptions about highly complex and inherently uncertain matters, and the use of reasonably different estimates and assumptions could have a material impact on our results of operations or financial condition. The determination of the allowance for expected credit losses over the remaining expected life of the loans in our loan portfolio involves a significant degree of management judgment and level of estimation uncertainty. As such, we have identified our accounting policy governing the estimation of the allowance for credit losses as a critical accounting estimate. Management established policies and control procedures intended to ensure that the methodology used for determining our allowance for credit losses, including any judgments and assumptions made as part of such method, are well controlled and applied consistently from period to period. We evaluate our critical accounting estimates and judgments required by our policies on an ongoing basis and update them as necessary based on changing conditions. We describe our allowance methodology and process for estimating the allowance for credit losses under "Note 1—Summary of Significant Accounting Policies—Allowance for Credit Losses—Loan Portfolio."

 We maintain an allowance based on a current estimate of credit losses that are expected to occur over the remaining life of the loans in our portfolio. The methods utilized to estimate the allowance for credit losses, key assumptions and quantitative and qualitative information considered by management in determining the appropriate allowance for credit losses are discussed in "Note 1—Summary of Significant Accounting Policies."

 Key inputs, such as our historical loss data and third-party default data, that we use in determining the appropriate allowance for credit losses are more readily quantifiable, while other inputs, such as our internally assigned borrower risk ratings that are intended to assess a borrower's capacity to meet its financial obligations and provide information on the probability of default, require more qualitative judgment. Degrees of imprecision exist in each of these inputs due in part to subjective judgments involved and an inherent lag in the data available to quantify current conditions and events that may affect our credit loss estimate.

 Our internally assigned borrower risk ratings serve as the primary credit quality indicator for our loan portfolio. We perform an annual comprehensive review of each of our borrowers, following the receipt of the borrower's annual audited financial statements, to reassess the borrower's risk rating. In addition, interim risk-rating adjustments may occur as a result of

 updated information affecting a borrower's ability to fulfill its obligations or other significant developments and trends. Our Enterprise Risk Group and Corporate Credit Committee review and provide rigorous oversight and governance around our internally assigned risk ratings to ensure the ratings process is consistent. In addition, we engage third-party credit risk management experts to conduct an independent annual review of our risk rating system to validate its overall integrity. This review involves an evaluation of the accuracy and timeliness of individual risk ratings and the overall effectiveness of our risk-rating framework relative to the risk profile of our credit exposures. While we have a robust risk-rating process, changes in our borrower risk ratings may not always directly coincide with changes in the risk profile of an individual borrower due to the timing of the rating process and a potential lag in the receipt of information necessary to evaluate the impact of emerging developments and current conditions on the risk ratings of our borrower. Although our allowance for credit losses is sensitive to each key input, shifts in the credit risk ratings of our borrowers generally have the most notable impact on our allowance for credit losses.

 Key Assumptions

 Determining the appropriateness of the allowance for credit losses is subject to numerous estimates and assumptions requiring significant management judgment about matters that involve a high degree of subjectivity and are difficult to predict. The key assumptions in determining our collective allowance that require significant management judgment and may have a material impact on the amount of the allowance include the segmentation of our loan portfolio; our internally assigned borrower risk ratings; the probability of default; the loss severity or recovery rate in the event of default for each portfolio segment; and management's consideration of qualitative factors that may cause estimated credit losses associated with our existing loan portfolio to differ from our historical loss experience.

 As discussed in "Credit Risk—Loan Portfolio Credit Risk," CFC has experienced only 18 defaults in its 56-year history, and prior to the two CFC electric power supply loan defaults in fiscal years 2021 and 2022, we had no defaults in our electric utility loan portfolio since fiscal year 2013. As such, we have a limited history of defaults to develop reasonable and supportable estimated probability of default rates for our existing loan portfolio. We therefore utilize third-party default data for the utility sector as a proxy to estimate probability of default rates for our loan portfolio segments. However, we utilize our internal historical loss experience to estimate loss given default, or the recovery rate, for each of our loan portfolio segments. We believe our internal historical loss experience serves as a more reliable estimate of loss severity than third-party data due to the organizational structure and operating environment of rural utility cooperatives, our lending practice of generally requiring a senior security position on the assets and revenue of borrowers for long-term loans, the approach we take in working with borrowers that may be experiencing operational or financial issues and other factors discussed in "Credit Risk—Loan Portfolio Credit Risk."

 We generally consider nonperforming loans as well as loans that have been modified with borrowers experiencing financial difficulty for individual evaluation given the risk characteristics of such loans and establish an asset-specific allowance for these loans. The key assumptions in determining our asset-specific allowance that require significant management judgment and may have a material impact on the amount of the allowance include measuring the amount and timing of future cash flows for individually evaluated loans that are not collateral-dependent and estimating the value of the underlying collateral for individually evaluated loans that are collateral-dependent.

 The degree to which any particular assumption affects the allowance for credit losses depends on the severity of the change and its relationship to the other assumptions. We regularly evaluate the key inputs and assumptions used in determining the allowance for credit losses and update them, as necessary, to better reflect present conditions, including current trends in credit performance and borrower risk profile, portfolio concentration risk, changes in risk-management practices, changes in the regulatory environment and other factors relevant to our loan portfolio segments. We did not change our allowance methodology or the nature of the underlying key inputs and assumptions used in measuring our allowance for credit losses during FY2025.

 Sensitivity Analysis

 As noted above, our allowance for credit losses is sensitive to a variety of factors. While management uses its best judgment to assess loss data and other factors to determine the allowance for credit losses, changes in our loss assumptions, adjustments to assigned borrower risk ratings, the use of alternate external data sources or other factors could affect our estimate of probable credit losses inherent in the portfolio as of each balance sheet date, which would also impact the related

 provision for credit losses recognized in our consolidated statements of operations. For example, changes in the inputs below, without taking into consideration the impact of other potential offsetting or correlated inputs, would have the following effect on our allowance for credit losses as of May 31, 2025.

 • A 10% increase or decrease in the default rates for all of our portfolio segments would result in a corresponding increase or decrease of approximately $3 million.
 • A 1% increase or decrease in the recovery rates for all of our portfolio segments would result in a corresponding decrease or increase of approximately $10 million.
 • A one-notch downgrade in the internal borrower risk ratings for our entire loan portfolio would result in an increase of approximately $37 million, while a one-notch upgrade would result in a decrease of approximately $19 million.

 These sensitivity analyses are intended to provide an indication of the isolated impact of hypothetical alternative assumptions on our allowance for credit losses. Because management evaluates a variety of factors and inputs in determining the allowance for credit losses, these sensitivity analyses are not considered probable and do not imply an expectation of future changes in loss rates or borrower risk ratings. Given current processes employed in estimating the allowance for credit losses, management believes the inherent loss rates and currently assigned risk ratings are appropriate. It is possible that others performing the analyses, given the same information, may at any point in time reach different reasonable conclusions that could be significant to our consolidated financial statements.

 We discuss the risks and uncertainties related to management's judgments and estimates in applying accounting policies that have been identified as a critical accounting estimates under "Item 1A. Risk Factors—Regulatory and Compliance Risks" in this Report. We provide additional information on the allowance for credit losses under the sections "Credit Risk—Allowance for Credit Losses" and "Note 5—Allowance for Credit Losses" in this Report.

 RECENT ACCOUNTING CHANGES AND OTHER DEVELOPMENTS

 Recent Accounting Changes

 We provide information on recently adopted accounting standards and the adoption impact on CFC's consolidated financial statements and recently issued accounting standards not yet required to be adopted and the expected adoption impact in "Note 1—Summary of Significant Accounting Policies." To the extent we believe the adoption of new accounting standards has had or will have a material impact on our consolidated results of operations, financial condition or liquidity, we discuss the impact in the applicable section(s) of this MD&A.

 NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

 As discussed above in the section "Non-GAAP Financial Measures," in addition to financial measures determined in accordance with U.S. GAAP, we believe our non-GAAP financial measures, which are not a substitute for U.S. GAAP and may not be consistent with similarly titled non-GAAP financial measures used by other companies, provide meaningful information and are useful to investors because management evaluates performance based on these metrics for purposes of (i) establishing corporate goals; (ii) budgeting and forecasting; (iii) comparing period-to-period operating results, analyzing changes in results and identifying potential trends; (iv) monitoring our overall leverage and credit ratings; and (v) 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. Below we discuss each of the non-GAAP financial measures and provide a reconciliation of our non-GAAP financial measures to the most comparable U.S. GAAP financial measures. During FY2025, we have refined our methodology for calculating the adjusted debt-to-equity ratio, which we explain in more detail below.

 Statements of Operations Non-GAAP Financial Measures

 One of our primary performance measures is TIER, which is a measure indicating our ability to cover the interest expense requirements on our debt. TIER is calculated by adding the interest expense to net income and dividing that total by the interest expense. We adjust the TIER calculation to add the derivative cash settlements income (expense) to the interest

 expense and to remove the derivative forward value gains (losses) and foreign currency adjustments from total net income. Adding the cash settlements income (expense) back to interest expense also has a corresponding effect on our adjusted net interest income.

 We use derivatives to manage interest rate risk on our funding of the loan portfolio. The derivative cash settlements income (expense) represents the amount that we receive from or pay to our counterparties based on the interest rate indexes in our derivatives that do not qualify for hedge accounting. We adjust the reported interest expense to include the derivative cash settlements income (expense). We use the adjusted cost of funding to set interest rates on loans to our members and believe that the interest expense adjusted to include derivative cash settlements income (expense) represents our total cost of funding for the period. TIER, calculated by adding the derivative cash settlements income (expense) to the interest expense, reflects management's perspective on our operations and, therefore, we believe that it represents a useful financial measure for investors.

 The derivative forward value gains (losses) and foreign currency adjustments do not represent our cash inflows or outflows during the current period and, therefore, do not affect our current ability to cover our debt service obligations. The derivative forward value gains (losses) included in the derivative gains (losses) line of the statement of operations represents a present-value estimate of the future cash inflows or outflows that will be recognized as net cash settlements income (expense) for all periods through the maturity of our derivatives that do not qualify for hedge accounting. We have not issued foreign-denominated debt since 2007, and as of May 31, 2025 and 2024, there were no foreign currency derivative instruments outstanding. For operational management and decision-making purposes, we subtract derivative forward value gains (losses) and foreign currency adjustments from our net income when calculating TIER and for other net income presentation purposes. In addition, since the derivative forward value gains (losses) and foreign currency adjustments do not represent current-period cash flows, we do not allocate such funds to our members and, therefore, exclude the derivative forward value gains (losses) and foreign currency adjustments from net income in calculating the amount of net income to be allocated to our members. TIER, calculated by excluding the derivative forward value gains (losses) and foreign currency adjustments from net income, reflects management's perspective on our operations and, therefore, we believe that it represents a useful financial measure for investors.

 Net Income and Adjusted Net Income

 Table 33 provides a reconciliation of adjusted interest expense, adjusted net interest income and adjusted net income to the comparable U.S. GAAP financial measures. These adjusted financial measures are used in the calculation of our adjusted net interest yield and adjusted TIER.

 Table 33: Adjusted Net Income

 2025
 2024
 2023

 Adjusted net interest income:

 $
 $
 $

 (1,442,279)
 (1,339,088)
 (1,036,508)

 Include: Derivative cash settlements interest income(1)

 Adjusted interest expense
 (1,343,060)
 (1,211,922)
 (1,002,931)

 Adjusted net interest income
 $
 360,173
 $
 381,429
 $
 348,798

 Adjusted net income:

 $
 $
 $

 Exclude: Derivative forward value gains (losses)(2)

 (105,070)

 Adjusted net income
 $
 245,084
 $
 289,445
 $
 249,320

 (1)Represents the net periodic contractual interest income amount on our interest rate swaps during the reporting period.
 (2)Represents the change in fair value of our interest rate swaps during the reporting period due to changes in expected future interest rates over the remaining life of our derivative contracts.

 We primarily fund our loan portfolio through the issuance of debt. However, we use derivatives as economic hedges as part of our strategy to manage the interest rate risk associated with funding our loan portfolio. We therefore consider the interest income and expense incurred on our derivatives to be part of our funding cost in addition to the interest expense on our debt. As such, we add net periodic derivative cash settlements interest income and expense amounts to our reported interest expense to derive our adjusted interest expense and adjusted net interest income. We exclude unrealized derivative forward value gains (losses) from our adjusted net income.

 TIER and Adjusted TIER

 Table 34 displays the calculation of our TIER and adjusted TIER.

 Table 34: TIER and Adjusted TIER

 2025
 2024
 2023

 TIER (1)

 1.10
 1.41
 1.48

 Adjusted TIER (2)

 1.18
 1.24
 1.25

 (1) TIER is calculated based on our net income (loss) plus interest expense for the period divided by interest expense for the period.
 (2) Adjusted TIER is calculated based on adjusted net income (loss) plus adjusted interest expense for the period divided by adjusted interest expense for the period.

 Debt Outstanding and Equity and Adjusted Debt Outstanding and Equity

 Adjusted debt-to-equity ratio is one of the key measures in managing our business and is used for: (i) establishing corporate goals; (ii) budgeting and forecasting; and (iii) monitoring our overall leverage and credit ratings. We therefore believe that this adjusted financial measure, in combination with the comparable U.S. GAAP financial measure, is useful to investors in evaluating our financial condition.

 During FY2025, we refined our methodology for calculating the adjusted debt-to-equity ratio and revised our internally established adjusted debt-to-equity threshold from 6-to-1 to 8.5-to-1. These changes aim to provide a more accurate representation of our financial condition given the continued growth in our loan portfolio, align our methodology more closely with rating agency methodologies and provide a ratio that is consistent with our business objectives. We will continue to assess the appropriateness of our non-GAAP financial measures, which could be subject to change for a variety of reasons, including changes to our strategy or business operations.

 Key changes to our methodology included replacing total liabilities with total debt outstanding, which includes our interest-bearing debt and excludes non-interest-bearing liabilities, and reducing equity credit for subordinated deferrable debt from 100% to 50%. Table 35 summarizes our prior methodology and revised methodology.

 Table 35: Adjusted Total Debt Outstanding and Equity—Prior Versus Revised Methodology

 Prior Methodology

 Revised Methodology

 Adjusted total liabilities:
 Adjusted total debt outstanding:

 Total liabilities
 Total debt outstanding(1)

 —

 Debt used to fund loans guaranteed by RUS
 —

 100% of Subordinated deferrable debt

 50% of Subordinated deferrable debt

 Adjusted total liabilities
 Adjusted total debt outstanding

 Adjusted total equity:
 Adjusted total equity:

 Period-end cumulative derivative forward value gains

 Period-end cumulative derivative forward value gains

 AOCI attributable to derivatives

 AOCI

 Include:
 Include:

 100% of Subordinated deferrable debt

 50% of Subordinated deferrable debt

 Adjusted total equity
 Adjusted total equity

 (1)Total debt outstanding includes our interest-bearing debt and excludes non-interest-bearing liabilities, such as derivative liabilities.

 The most directly comparable financial measure calculated and presented in accordance with U.S. GAAP was also revised from total liabilities divided by total equity to total debt outstanding divided by total equity. Prior-period amounts have been recast to reflect the updated presentation for both adjusted debt-to-equity and debt-to-equity ratios.

 Members' subordinated certificates are accounted for as debt under U.S. GAAP. These subordinated certificates are held only by our members and are subordinated to all senior and non-member subordinated indebtedness of CFC. The members' subordinated certificates have long-dated maturities and in certain cases pay no interest or pay interest that is below market. Under certain conditions we are prohibited from making interest payments to members on the subordinated certificates. Given the subordinated certificates' equity-like characteristics, we subtract 100% of members' subordinated certificates from total debt outstanding and add them to total equity when calculating our adjusted debt-to-equity ratio.

 We issue subordinated deferrable debt in the capital markets with maturities of up to 45 years including the option to defer interest payments. The characteristics of subordination, deferrable interest and long-dated maturity are all equity-like characteristics. Since the subordinated deferrable debt is issued in the capital markets and not just to members of CFC and it ranks higher in subordination compared with members' subordinated certificates, we subtract 50% of our subordinated deferrable debt from total debt outstanding and add it to total equity. This approach more closely aligns with the rating agencies' methodology for calculating the adjusted debt-to-equity ratio.

 We record derivative instruments at fair value on our consolidated balance sheets. Our total equity includes the noncash impact of derivative forward value gains (losses) and foreign currency translation adjustments recorded in net income. It also includes as a component of AOCI the impact of changes in the fair value of derivatives designated as cash flow hedges as well as the unrealized losses on the defined benefit pension plan. In evaluating our adjusted debt-to-equity ratio, we make adjustments to equity similar to the adjustments made in calculating TIER. We exclude from total equity the noncash cumulative impact of changes in derivative forward value gains (losses) and foreign currency translation adjustments, and the amounts of AOCI, which reflects management's perspective on our operations and, therefore, we believe, is a useful financial measure for investors.

 Table 36 provides a reconciliation between our total debt outstanding and total equity and the adjusted amounts used in the calculation of our adjusted debt-to-equity ratio as of May 31, 2025 and 2024.

 Table 36: Adjusted Total Debt Outstanding and Equity

 2025
 2024

 Adjusted total debt outstanding:

 Total debt outstanding(1)

 $
 34,769,316
 $
 32,718,367

 50% of Subordinated deferrable debt

 664,743
 643,431

 Adjusted total debt outstanding

 $
 32,919,859
 $
 30,877,285

 Adjusted total equity:

 $
 $

 Prior fiscal year-end cumulative derivative forward value gains(2)

 607,969
 343,098

 Current fiscal year derivative forward value gains (losses)(2)

 (105,070)

 Current fiscal year-end cumulative derivative forward value gains(2)

 502,899
 607,969

 (2,236)
 (1,416)

 Subtotal
 500,663
 606,553

 Include:

 50% of Subordinated deferrable debt

 664,743
 643,431

 Subtotal
 1,849,457
 1,841,082

 Adjusted total equity
 $
 4,452,260
 $
 4,246,698

 (1)Total debt outstanding includes our interest-bearing debt and excludes non-interest-bearing liabilities, such as derivative liabilities.
 (2)Represents consolidated total derivative forward value gains (losses).

 Debt-to-Equity and Adjusted Debt-to-Equity Ratios

 Table 37 displays the calculations of our debt-to-equity and adjusted debt-to-equity ratios as of May 31, 2025 and 2024.

 Table 37: Debt-to-Equity Ratio and Adjusted Debt-to-Equity Ratio

 2025
 2024

 Debt-to-equity ratio:

 Total debt outstanding

 $
 34,769,316
 $
 32,718,367

 Debt-to-equity ratio(1)

 11.20
 10.86

 Adjusted debt-to-equity ratio:

 Adjusted total debt outstanding(2)

 $
 32,919,859
 $
 30,877,285

 Adjusted total equity(2)

 4,452,260
 4,246,698

 Adjusted debt-to-equity ratio(3)

 7.39
 7.27

 (1)Calculated based on total debt outstanding at period end divided by total equity at period end.
 (2) See Table 36 above for details on the calculation of these non-GAAP financial measures and the reconciliation to the most comparable U.S. GAAP financial measures.
 (3)Calculated based on adjusted total debt outstanding at period end divided by adjusted total equity at period end.

 Total CFC Equity and Members' Equity

 Members' equity excludes the noncash impact of derivative forward value gains (losses) and foreign currency adjustments recorded in net income and amounts recorded in AOCI. Because these amounts generally have not been realized, they are not available to members and are excluded by the CFC Board of Directors in determining the annual allocation of adjusted net income to patronage capital, to the members' capital reserve and to other member funds. Table 38 provides a reconciliation of members' equity to total CFC equity as of May 31, 2025 and 2024. We present the components of AOCI in "Note 11—Equity."

 Table 38: Members' Equity

 2025
 2024

 Members' equity:

 Total CFC equity
 $
 $

 (2,236)
 (1,416)

 Period-end cumulative derivative forward value gains attributable to CFC(1)

 501,663

 Subtotal
 499,427
 604,799

 Members' equity
 $
 2,583,050
 $
 2,386,663

 (1)Represents period-end cumulative derivative forward value gains for CFC only, as total CFC equity does not include the noncontrolling interest of the variable interest entity, which we are required to consolidate. We report the separate results of operations for CFC in "Note 16—Business Segments." The period-end cumulative derivative forward value total gain amounts as of May 31, 2025 and 2024 are presented above in Table 36.

 Item 7A. Quantitative and Qualitative Disclosures About Market Risk

 For quantitative and qualitative disclosures about market risk, see "Item 7. MD&A—Market Risk" and "MD&A—Consolidated Results of Operations—Non-Interest Income—Derivatives Gains (Losses)" and also "Note 10—Derivative Instruments and Hedging Activities" in this Report.

 Item 8. Financial Statements and Supplementary Data

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID 185)

 Consolidated Statements of Operations for the Years Ended May 31, 2025, 2024 and 2023

 Consolidated Statements of Comprehensive Income (Loss) for the Years Ended May 31, 2025, 2024 and 2023

 Consolidated Balance Sheets as of May 31, 2025 and 2024

 Consolidated Statements of Changes in Equity for the Years Ended May 31, 2025, 2024 and 2023

 Consolidated Statements of Cash Flows for the Years Ended May 31, 2025, 2024 and 2023

 Notes to Consolidated Financial Statements

 Note 1 — Summary of Significant Accounting Policies

 Note 2 — Interest Income and Interest Expense

 Note 3 — Investment Securities

 Note 4 — Loans

 Note 5 — Allowance for Credit Losses

 Note 6 — Short-Term Borrowings

 Note 7 — Long-Term Debt

 Note 8 — Subordinated Deferrable Debt

 Note 9 — Members' Subordinated Certificates

 Note 10 — Derivative Instruments and Hedging Activities

 Note 11 — Equity

 Note 12 — Employee Benefits

 Note 13 — Guarantees

 Note 14 — Fair Value Measurement

 Note 15 — Variable Interest Entities

 Note 16 — Business Segments

 Report of Independent Registered Public Accounting Firm

 To the Board of Directors and Members
 National Rural Utilities Cooperative Finance Corporation:

 Opinion on the Consolidated Financial Statements
 We have audited the accompanying consolidated balance sheets of National Rural Utilities Cooperative Finance Corporation and subsidiaries (the Company) as of May 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the years in the three-year period ended May 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended May 31, 2025, in conformity with U.S. generally accepted accounting principles.

 Basis for Opinion
 These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit Matter
 The critical audit matter communicated below is a matter arising from the current-period audit of the consolidated financial statements that was communicated or required to be communicated to the Audit Committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

 Assessment of the allowance for credit losses of loans evaluated on a collective basis
 As discussed in Notes 1 and 5 to the consolidated financial statements, the Company's allowance for credit losses for loans evaluated on a collective basis (the collective ACL) was $31.3 million as of May 31, 2025. The collective ACL includes the measure of expected credit losses on a collective (pool) basis for those loans that share similar risk characteristics. The Company estimates the collective ACL using a probability of default (PD) and loss given default (LGD) methodology. The Company segments its loan portfolio into pools based on member-borrower type, which is

 based on the utility sector of the borrower, and further by internal borrower risk ratings. The Company then applies loss factors, consisting of the PD and LGD, to the scheduled loan-level amortization amounts over the life of the loans. Due to a limited history of defaults in the portfolio, the Company utilizes third-party default data tables for the utility sector as a proxy to estimate default rates for each of the pools. Based on the mapping of internal borrower risk rating to equivalent credit rating provided in the third-party utility default tables, the Company applies corresponding cumulative default rates to the scheduled loan amortization amounts over the remaining life of loan in each of the pools. For estimation of an LGD the Company utilizes its lifetime historical loss experience for each of the portfolio segments. The Company estimates that, based on historical experience, expected credit losses will not be affected by changes in economic factors and therefore, the Company has not made adjustments to the historical rates for any economic forecasts.

 We identified the assessment of the collective ACL as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of the collective ACL due to significant measurement uncertainty. Specifically, the assessment encompassed the evaluation of the collective ACL methodology, portfolio segmentation, and the method used to estimate the PD and LGD and their significant assumptions, including third-party proxy default data for the utility sector, and borrower risk ratings. The assessment also included an evaluation of the conceptual soundness of the collective ACL methodology.

 The following are the primary procedures we performed to address this critical audit matter. We evaluated the design of certain internal controls related to the Company's measurement of the collective ACL estimate, including controls over the: development of the collective ACL methodology; use and appropriateness of the method and significant assumptions used to develop the PD and LGD; and analysis of credit quality trends and ratios.

 We evaluated the Company's process to develop the collective ACL estimate by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors, and assumptions. In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in:

 • evaluating the Company's collective ACL methodology for compliance with U.S. generally accepted accounting principles.

 • evaluating the conceptual soundness and the judgments made by the Company relative to the assessment of the PD and LGD by comparing them to relevant Company-specific metrics and trends and the applicable industry and regulatory practices portfolio segmentation.

 • evaluating the borrower risk ratings and the mapping of internal borrower risk ratings to equivalent credit ratings provided in the third-party utility default table.

 /s/ KPMG LLP

 We have served as the Company's auditor since 2013.
 McLean, Virginia

 CONSOLIDATED STATEMENTS OF OPERATIONS

 2025
 2024
 2023

 $
 $
 $

 ( 1,442,279)
 ( 1,339,088)
 ( 1,036,508)

 260,954
 254,263
 315,221

 Benefit (provision) for credit losses
 8,111
 5,516
 ( 603)

 Net interest income after benefit (provision) for credit losses
 269,065
 259,779
 314,618

 Non-interest income:

 23,597
 22,792
 18,134

 Derivative gains (losses)

 Investment securities gains (losses)

 5,674
 ( 4,974)

 Total non-interest income
 23,420
 425,601
 299,004

 Non-interest expense:

 Salaries and employee benefits

 ( 72,171)
 ( 67,401)
 ( 59,011)

 Other general and administrative expenses

 ( 70,944)
 ( 58,970)
 ( 50,620)

 Other non-interest expense
 ( 9,168)
 ( 3,189)
 ( 1,604)

 ( 152,283)
 ( 129,560)
 ( 111,235)

 Income before income taxes
 140,202
 555,820
 502,387

 Income tax provision
 ( 188)
 ( 1,504)
 ( 800)

 Less: Net income attributable to noncontrolling interests

 ( 281)
 ( 967)
 ( 97)

 Net income attributable to CFC
 $
 139,733
 $
 553,349
 $
 501,490

 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 2025
 2024
 2023

 $
 $
 $

 Other comprehensive income (loss):

 Changes in unrealized gains on derivative cash flow hedges
 6,691

 Reclassification to earnings of realized gains on derivatives
 ( 1,155)
 ( 8,298)
 ( 712)

 Defined benefit plan adjustments
 ( 468)
 ( 1,944)

 Other comprehensive income (loss)

 ( 820)
 ( 9,759)
 6,085

 Total comprehensive income
 139,194
 544,557
 507,672

 Less: Total comprehensive income attributable to noncontrolling interests

 ( 281)
 ( 967)
 ( 97)

 Total comprehensive income attributable to CFC
 $
 138,913
 $
 543,590
 $
 507,575

 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

 CONSOLIDATED BALANCE SHEETS

 2025
 2024

 Cash and cash equivalents
 $
 134,712
 $
 280,124

 Restricted cash
 8,410
 8,217

 Total cash, cash equivalents and restricted cash
 143,122
 288,341

 Investment securities:

 Debt securities trading, at fair value

 Equity securities, at fair value

 Total investment securities, at fair value
 124,915
 318,237

 Less: Allowance for credit losses
 ( 40,615)
 ( 48,726)

 37,039,363
 34,493,559

 Accrued interest receivable
 270,222
 190,247

 Other receivables
 24,377
 29,240

 Fixed assets, net
 81,667
 85,119

 Derivative assets

 Other assets
 85,528
 81,822

 Total assets
 $
 38,325,049
 $
 36,177,814

 Accrued interest payable
 $
 294,917
 $
 263,372

 Debt outstanding:

 27,163,701
 25,901,165

 1,329,485
 1,286,861

 Members' subordinated certificates:

 Membership subordinated certificates
 628,637
 628,625

 Loan and guarantee subordinated certificates
 309,914
 322,863

 Member capital securities

 Total members' subordinated certificates

 Total debt outstanding
 34,769,316
 32,718,367

 Deferred income
 31,596
 33,356

 Other liabilities
 74,386
 69,562

 Total liabilities
 35,221,583
 33,165,645

 Equity:

 CFC equity:

 Retained equity
 3,084,713
 2,992,878

 ( 2,236)

 Total CFC equity

 Noncontrolling interests
 20,989
 20,707

 Total liabilities and equity
 $
 38,325,049
 $
 36,177,814

 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

 Membership
Fees and
Educational
Fund
 Patronage
Capital
Allocated
 Members'
Capital
Reserve
 Unallocated
Net Income
(Loss)
 CFC
Retained
 Accumulated
Other
Comprehensive
Income (Loss)
 Total
CFC
 Non-controlling
Interests
 Total

 Balance as of May 31, 2022
 $
 3,387
 $
 954,988
 $
 1,062,286
 $
 91,654
 $
 2,112,315
 $
 2,258
 $
 2,114,573
 $
 27,396
 $
 2,141,969

 1,100
 110,273
 139,856
 250,261
 501,490
 —
 501,490

 Other comprehensive income
 —
 —
 —
 —
 —
 6,085
 6,085
 —
 6,085

 Patronage capital retirement
 —
 ( 59,136)
 —
 —
 ( 59,136)
 —
 ( 59,136)
 ( 2,704)
 ( 61,840)

 Other
 ( 953)
 ( 10)
 —
 ( 953)
 —
 ( 953)
 2,401
 1,448

 Balance as of May 31, 2023
 $
 3,534
 $
 1,006,115
 $
 1,202,152
 $
 341,915
 $
 2,553,716
 $
 8,343
 $
 2,562,059
 $
 27,190
 $
 2,589,249

 1,100
 60,599
 228,059
 263,591
 553,349
 —
 553,349

 Other comprehensive loss

 —
 —
 —
 —
 —
 ( 9,759)
 ( 9,759)
 —
 ( 9,759)

 Patronage capital retirement
 —
 ( 138,482)
 25,353
 —
 ( 113,129)
 —
 ( 113,129)
 —
 ( 113,129)

 Other
 ( 1,058)
 —
 —
 —
 ( 1,058)
 —
 ( 1,058)
 ( 7,450)
 ( 8,508)

 Balance as of May 31, 2024
 $
 3,576
 $
 928,232
 $
 1,455,564
 $
 605,506
 $
 2,992,878
 $
 $
 $
 20,707
 $

 Net income (loss)

 1,100
 67,140
 176,045
 ( 104,552)
 139,733
 —
 139,733

 Other comprehensive loss

 —
 —
 —
 —
 —
 ( 820)
 ( 820)
 —
 ( 820)

 Patronage capital retirement
 —
 —
 —
 —
 —

 Other
 ( 1,052)
 —
 —
 —
 ( 1,052)
 —
 ( 1,052)
 ( 1,051)

 Balance as of May 31, 2025
 $
 3,624
 $
 948,526
 $
 1,631,609
 $
 500,954
 $
 3,084,713
 $
 ( 2,236)
 $
 $
 20,989
 $

 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 2025
 2024
 2023

 Cash flows from operating activities:

 $
 $
 $

 Adjustments to reconcile net income to net cash provided by operating activities:

 Amortization of deferred loan fees
 ( 2,978)
 ( 6,463)
 ( 7,500)

 Amortization of debt issuance costs and discount
 33,862
 29,827
 28,744

 Amortization of guarantee fee
 19,584
 20,679
 19,300

 Depreciation and amortization
 12,615
 10,469
 5,717

 Provision (benefit) for credit losses
 ( 8,111)
 ( 5,516)

 Unrealized (gains) losses on equity and debt securities
 ( 8,241)
 ( 16,461)
 1,090

 Derivative forward value (gains) losses

 105,070
 ( 264,871)
 ( 252,267)

 Advances on loans held for sale
 ( 442,700)
 ( 326,500)
 ( 213,142)

 Proceeds from sales of loans held for sale
 424,000
 324,000
 256,942

 Changes in operating assets and liabilities:

 Accrued interest receivable
 ( 79,975)
 ( 17,524)
 ( 61,305)

 Accrued interest payable
 31,545
 51,032
 80,390

 Deferred income
 1,218
 1,218
 1,769

 Other
 ( 18,371)
 ( 33,583)
 ( 24,155)

 Net cash provided by operating activities
 207,532
 320,623
 337,773

 Cash flows from investing activities:

 Advances on loans held for investment, net
 ( 2,516,664)
 ( 2,005,187)
 ( 2,534,642)

 Investments in fixed assets, net
 ( 4,697)
 ( 6,154)
 ( 7,721)

 Purchases of trading securities

 —
 —
 ( 117,288)

 Proceeds from sales and maturities of trading securities

 173,997
 202,903
 201,849

 Proceeds from redemption of equity securities

 25,000
 —
 —

 Cash impact of VIE deconsolidation
 —
 ( 10,341)
 —

 Net cash used in investing activities
 ( 2,322,364)
 ( 1,818,779)
 ( 2,457,802)

 Cash flows from financing activities:

 Proceeds from (repayments of) short-term borrowings 90 days, net
 1,322,246
 ( 536,592)
 ( 417,487)

 Proceeds from short-term borrowings with original maturity > 90 days
 2,174,997
 3,062,591
 2,864,699

 Repayments of short-term borrowings with original maturity > 90 days
 ( 2,738,517)
 ( 2,739,584)
 ( 2,882,104)

 Payments for issuance costs for revolving bank lines of credit

 ( 5,737)
 ( 2,612)
 ( 2,108)

 Proceeds from issuance of long-term debt, net of discount and issuance costs

 4,044,549
 4,520,730
 4,293,185

 Payments for retirement of long-term debt

 ( 2,810,566)
 ( 2,591,494)
 ( 1,916,514)

 Payments for issuance costs for subordinated deferrable debt

 ( 1,387)
 ( 1,165)
 ( 3,295)

 Proceeds from issuance of subordinated deferrable debt
 43,811
 103,500

 Payments for retirement of subordinated deferrable debt

 —
 ( 100,000)
 —

 Proceeds from issuance of members' subordinated certificates

 6,133

 Payments for retirement of members' subordinated certificates

 ( 12,949)
 ( 25,579)
 ( 17,168)

 Payments for retirement of patronage capital

 ( 110,202)
 ( 59,189)

 Repayments for membership fees, net

 —
 ( 436)
 —

 Net cash provided by financing activities
 1,969,613
 1,579,260
 2,166,152

 Net increase (decrease) in cash, cash equivalents and restricted cash
 ( 145,219)
 81,104
 46,123

 Beginning cash, cash equivalents and restricted cash
 288,341
 207,237
 161,114

 Ending cash, cash equivalents and restricted cash
 $
 143,122
 $
 288,341
 $
 207,237

 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 2025
 2024
 2023

 Supplemental disclosure of cash flow information:

 Cash paid for interest
 $
 1,373,281
 $
 1,261,683
 $
 934,602

 Cash paid for income taxes

 Noncash financing and investing activities:

 Equity investment, at cost, obtained in exchange for loan held for investment
 $
 —
 $
 —
 $
 7,778

 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

 NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 The Company

 National Rural Utilities Cooperative Finance Corporation ("CFC") is a tax-exempt member-owned cooperative association incorporated under the laws of the District of Columbia in April 1969. CFC's principal purpose is to provide its members with financing to supplement the loan programs of the Rural Utilities Service ("RUS") of the United States Department of Agriculture ("USDA"). CFC makes loans to its rural electric members so they can acquire, construct and operate electric distribution systems, electric generation and transmission ("power supply") systems and related facilities. CFC also provides its members and associates with credit enhancements in the form of letters of credit and guarantees of debt obligations. As a cooperative, CFC is owned by and exclusively serves its membership, which consists of not-for-profit entities or subsidiaries or affiliates of not-for-profit entities.

 National Cooperative Services Corporation ("NCSC") is a taxable cooperative incorporated in 1981 in the District of Columbia as a member-owned cooperative association. NCSC's principal purpose is to provide financing to its members and associates, which consists of two classes: NCSC electric and NCSC telecommunications. NCSC electric members and associates consist of members of CFC, entities eligible to be members of CFC, government or quasi-government entities that own electric utility systems that meet the Rural Electrification Act definition of "rural," and the for-profit and not-for-profit entities that are owned, operated or controlled by, or provide significant benefit to, certain members of CFC. NCSC telecommunication ("telecom") members and associates consist of rural telecommunications members and their affiliates. CFC is the primary source of funding for NCSC and manages NCSC's business operations under a management agreement that is automatically renewable on an annual basis unless terminated by either party. NCSC pays CFC a fee and, in exchange, CFC reimburses NCSC for loan losses under a guarantee agreement. As a taxable cooperative, NCSC pays income tax based on its reported taxable income and deductions. NCSC is headquartered with CFC in Dulles, Virginia.

 Cooperative Securities LLC ("Cooperative Securities") is a limited liability company organized and incorporated in 2021 in Delaware and a wholly owned subsidiary of NCSC. Cooperative Securities is a broker-dealer registered with the U.S. Securities and Exchange Commission ("SEC"), and is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. Cooperative Securities provides institutional debt placement services, which may include advising, arranging and structuring private debt financing transactions, for NCSC's members, and for-profit and not-for-profit entities that are owned, operated or controlled by, or provide a significant benefit to certain rural utility providers.

 Basis of Presentation and Use of Estimates

 The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP"). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and related disclosures during the period. Management ' s most significant estimates and assumptions involve determining the allowance for credit losses. These estimates are based on information available as of the date of the consolidated financial statements. While management makes its best judgments, actual amounts or results could differ from these estimates. Certain reclassifications and updates have been made to the presentation of information in prior periods to conform to the current-period presentation. These reclassifications had no effect on prior years' net income (loss) or equity. Our fiscal year begins on June 1 and ends on May 31. References to "FY2025," "FY2024" and "FY2023" refer to the fiscal years ended May 31, 2025, 2024 and 2023, respectively.

 Principles of Consolidation

 These consolidated financial statements include the accounts of CFC and variable interest entities ("VIEs") where CFC is the primary beneficiary, which are discussed below. All inte rcompany balances and transactions have been eliminated. Unless stated otherwise, references to "we," "our" or "us" relate to CFC and its consolidated entities.

 Variable Interest Entities

 A VIE is an entity that has a total equity investment at risk that is not sufficient to finance its activities without additional subordinated financial support provided by another party, or where the group of equity holders does not have (i) the ability to make decisions about the entity's activities that most significantly impact its economic performance; (ii) the obligation to absorb the entity's expected losses; or (iii) the right to receive the entity's expected residual returns. When evaluating an entity for possible consolidation, we must determine whether or not we have a variable interest in the entity. If it is determined that we do not have a variable interest in the entity, no further analysis is required and we do not consolidate the entity. If we have a variable interest in the entity, we must evaluate whether we are the primary beneficiary based on an assessment of quantitative and qualitative factors. We are considered the primary beneficiary holder if we have a controlling financial interest in the VIE that provides (i) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

 NCSC meets the definition of a VIE because it does not have sufficient equity investment at risk to finance its activities without additional financial support. We consolidate the results of NCSC with CFC because CFC is the primary beneficiary holder. Prior to December 1, 2023, Rural Telephone Finance Cooperative ("RTFC") qualified as a VIE that was required to be consolidated by CFC. RTFC was a taxable Subchapter T cooperative association that provided financing for its rural telecommunications members and their affiliates. Subsequent to December 1, 2023, in connection with the sale of RTFC's business to NCSC, as discussed under "RTFC Sale Transaction" in "Note 1—Summary of Significant Accounting Policies" in our Annual Report on Form 10-K for the fiscal year ended May 31, 2024 ("2024 Form 10-K"), CFC is no longer a primary beneficiary of RTFC and therefore did not consolidate RTFC after this date in its consolidated financial statements.

 Cash and Cash Equivalents

 Cash, certificates of deposit due from banks and other investments with original maturities of less than 90 days are classified as cash and cash equivalents.

 Restricted Cash

 Restricted cash, which consists primarily of member funds held in escrow for certain specifically designed cooperative programs, totaled $ 8 million as of both May 31, 2025 and 2024.

 Investment Securities

 Our investment securities portfolio consists of equity and debt securities. We record purchases and sales of securities on a trade-date basis. The accounting and measurement framework for investment securities differs depending on the security type and the classification. Equity securities are reported at fair value on our consolidated balance sheets with unrealized gains and losses recorded as a component of other non-interest income. All of our debt securities were classified as trading as of May 31, 2025 and 2024. Accordingly, we also report our debt securities at fair value on our consolidated balance sheets and record unrealized gains and losses as a component of non-interest income. Interest income is generally recognized over the contractual life of the securities based on the effective yield method.

 Loans to Members

 We originate loans to members and classify loans as held for investment or held for sale based on management's intent and ability to sell or hold the loan for the foreseeable future or until maturity or payoff. Loans that we have the ability and intent to hold for the foreseeable future are classified as held for investment and are reported based on the unpaid principal balance, net of principal charge-offs, and deferred loan origination costs. Loans that we intend to sell or for which we do not have the ability and intent to hold for the foreseeable future are classified as held for sale and are recorded at the lower of cost or fair value. These loan sales are made at par value, concurrently or within a short period of time with the closing of the loan or participation agreement.

 Accrued Interest Receivable

 Accrued interest receivable amounts generally represent three months or less of accrued interest on loans outstanding, investments and derivative instruments. As permitted by the Accounting Standards Codification ("ASC") Topic 326, Financial Instruments—Credit Losses, the current expected credit loss ("CECL") model, we elected to continue reporting accrued interest on loans separately on our consolidated balance sheets as a component of the line item accrued interest receivable rather than as a component of loans to members. Because our policy is to write off past-due accrued interest receivable in a timely manner, we elected not to measure an allowance for credit losses for accrued interest receivable on loans outstanding, which totaled $ 237 million and $ 147 million as of May 31, 2025 and 2024, respectively. We also elected to exclude accrued interest receivable from the credit quality disclosures required under CECL.

 Interest Income

 Interest income on performing loans is accrued and recognized as interest income based on the contractual rate of interest. Deferred loan origination costs are amortized using the straight-line method, which approximates the effective interest method into interest income over the life of the loan. Nonrefundable loan fees that meet the definition of loan origination fees are deferred and generally recognized in interest income as yield adjustments over the period to maturity of the loan using the effective interest method.

 Placement Agent Fees

 Cooperative Securities is compensated through a placement agent fee for private placement of securities, which is recognized as an income at a point in time when the performance obligation is satisfied, typically the closing of the sale of securities of the nonpublic companies. We recognized an immaterial amount of private placement fee income during FY2025 and FY2024, which was included in fee and other income in our consolidated statements of operations. Cooperative Securities had not served as a placement agent for any transactions and accordingly had no placement agent fee income recognized during FY2023.

 Loan Modifications to Borrowers Experiencing Financial Difficulty

 As part of our loss-mitigation efforts, we may provide modifications to a borrower experiencing financial difficulty to improve long-term collectability of the loan and to avoid the need for exercising remedies. Loan modifications to a borrower experiencing financial difficulty include principal forgiveness, an interest rate reduction, payment deferrals or a term extension. As modifications offered to borrowers experiencing financial difficulty are typically not at market terms, such modifications are generally accounted for as a continuation of the existing loan.

 As discussed below under "Allowance for Credit Losses—Loan Portfolio—Asset-Specific Allowance," loans modified to troubled borrowers are evaluated on an individual basis in estimating expected credit losses. Similarly, credit losses for anticipated modification to troubled borrowers are identified when there is a reasonable expectation that a modification will be executed and when we expect the modification to affect the timing or amount of payments and/or the payment term.

 We generally classify loans modified with borrowers experiencing financial difficulty as nonperforming and place the loan on nonaccrual status, although in many cases such loans were already classified as nonperforming prior to modification. These loans may be returned to performing status, and the accrual of interest resumed, if the borrower performs under the modified terms for an extended period of time, and we expect the borrower to continue to perform in accordance with the modified terms. In certain limited circumstances in which such loan is current at the modification date, the loan may remain on accrual status at the time of modification.

 Nonperforming Loans

 We classify loans as nonperforming when contractual principal or interest is 90 days past due or when we believe the collection of principal and interest in full is not reasonably assured. When a loan is classified as nonperforming, we generally place the loan on nonaccrual status. Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed against current-period interest income. Interest income on nonaccrual loans is subsequently recognized only upon the receipt of cash payments. However, if we believe the ultimate collectability of the loan principal is in doubt, cash received is applied against the principal balance of the loan. Nonaccrual loans generally are returned to accrual status when principal and interest becomes and remains current for a specified period and repayment of the remaining contractual principal and interest is reasonably assured.

 Charge-Offs

 We charge off loans or a portion of a loan when we determine that the loan is uncollectible. The charge-off of uncollectible principal amounts results in a reduction to the allowance for credit losses for our loan portfolio. Recoveries of previously charged off principal amounts result in an increase to the allowance.

 Allowance for Credit Losses—Loan Portfolio

 Allowance Methodology

 The allowance for credit losses is determined based on management's current estimate of expected credit losses over the remaining contractual term, adjusted as appropriate for estimated prepayments, of loans in our loan portfolio as of each balance sheet date. The allowance for credit losses for our loan portfolio is reported on our consolidated balance sheet as a valuation account that is deducted from loans to members to present the net amount we expect to collect over the life of our loans. We immediately recognize an allowance for expected credit losses upon origination of a loan. Adjustments to the allowance each period for changes in our estimate of lifetime expected credit losses are recognized in earnings through the provision for credit losses presented in our consolidated statements of operations.

 We estimate our allowance for lifetime expected credit losses for our loan portfolio using a probability of default/loss given default methodology. Our allowance for credit losses consists of a collective allowance and an asset-specific allowance. The collective allowance is established for loans in our portfolio that share similar risk characteristics and are therefore evaluated on a collective, or pool, basis in measuring expected credit losses. The asset-specific allowance is established for loans in our portfolio that do not share similar risk characteristics with other loans in our portfolio and are therefore evaluated on an individual basis in measuring expected credit losses. Expected credit losses are estimated based on historical experience, current conditions and forecasts, if applicable, that affect the collectability of the reported amount.

 Since inception in 1969, CFC has experienced limited defaults and losses as the utility sector generally tends to be less sensitive to changes in the economy than other sectors largely due to the essential nature of the service provided. The losses we have incurred were not tied to economic factors, but rather to distinct operating issues related to each borrower. Given that our borrowers' creditworthiness, and accordingly our loss experience, has not correlated to specific underlying macroeconomic variables, such as U.S. unemployment rates or gross domestic product ("GDP") growth, we have not made adjustments to our historical loss rates for any economic forecast. We consider the need, however, to adjust our historical loss information for differences in the specific characteristics of our existing loan portfolio based on an evaluation of relative

 qualitative factors, such as differences in the composition of our loan portfolio, our underwriting standards, problem loan trends, the quality of our credit review function, as well as changes in the regulatory environment and other pertinent external factors that may impact the amount of future credit losses.

 Collective Allowance

 We employ a quantitative methodology and a qualitative framework to measure the collective component of our allowance for expected credit losses. The first element in our quantitative methodology involves the segmentation of our loan portfolio into loan pools that share similar risk characteristics. We disaggregate our loan portfolio into segments that reflect the member borrower type, which is based on the utility sector of the borrower because the key operational, infrastructure, regulatory, environmental, customer and financial risks of each sector are similar in nature. Our primary member borrower types consist of CFC electric distribution, CFC electric power supply, CFC statewide and associate, NCSC electric and NCSC telecom. Our portfolio segments align with the sectors generally seen in the utilities industry. We further stratify each portfolio into loan pools based on our internal borrower risk ratings, as our borrower risk ratings provide important information on the collectability of each of our loan portfolio segments. We then apply loss factors, consisting of the probability of default and loss given default, to the scheduled loan-level amortization amounts over the life of the loans for each of our loan pools. Below we discuss the source and basis for the key inputs, which include borrower risk ratings and the loss factors, in measuring expected credit losses for our loan portfolio.

 • Borrower Risk Ratings: We evaluate each borrower and loan facility in our loan portfolio and assign internal borrower and loan facility risk ratings based on consideration of a number of quantitative and qualitative factors. Each risk rating is reassessed annually following receipt of the borrower's audited financial statements; however, interim risk-rating adjustments may occur as a result of updated information affecting a borrower's ability to fulfill its obligations or other significant developments and trends. Our internally assigned borrower risk ratings are intended to assess the general creditworthiness of the borrower and probability of default. We use our internal borrower risk ratings, which we map to the equivalent credit ratings by external rating agencies, to differentiate risk within each of our portfolio segments and loan pools. We provide additional information on our borrower risk ratings below in "Note 4—Loans."

 • Probability of Default: The probability of default, or default rate, represents the likelihood that a borrower will default over a particular time horizon. Because of our limited default history, we utilize third-party default data for the utility sector as a proxy to estimate default rates for each of our loan pools. The third-party default data provide historical default rates, based on credit ratings and remaining maturities of outstanding bonds, for the utility sector. Based on the mapping and alignment of our internal borrower risk ratings to equivalent credit ratings provided in the third-party utility default table, we apply the corresponding cumulative default rates to the scheduled amortization amounts over the remaining term of the loans in each of our loan pools.

 • Loss Given Default: The loss given default, or loss severity, represents the estimated loss, net of recoveries, on a loan that would be realized in the event of a borrower default. While we utilize third-party default data, we utilize our lifetime historical loss experience to estimate loss given default, or the recovery rate, for each of our loan portfolio segments. We believe our internal historical loss severity rates provide a more reliable estimate than third-party loss severity data due to the organizational structure and operating environment of rural utility cooperatives, our lending practice of generally requiring a senior security position on the assets and revenue of borrowers for long-term loans, the investment our member-borrowers have in CFC and the collaborative approach we generally take in working with members in the event that a default occurs.

 In addition to the quantitative methodology used in our collective measurement of expected credit losses, management performs a qualitative evaluation and analyses of relevant factors, such as changes in risk-management practices, current and past underwriting standards, specific industry issues and trends and other subjective factors. Based on our assessment, we did not make a qualitative adjustment to the collective allowance for credit losses measured under our quantitative methodology as of May 31, 2025 and 2024.

 Asset-Specific Allowance

 We generally consider nonperforming loans as well as loans that have been modified to borrowers experiencing financial difficulty for individual evaluation given the risk characteristics of such loans. Factors we consider in measuring the extent of expected credit loss include the payment status, the collateral value, the borrower's financial condition, guarantor support, the probability of collecting scheduled principal and interest payments when due, anticipated modifications of payment structure or term for troubled borrowers, and recoveries if they can be reasonably estimated. We generally measure the expected credit loss as the difference between the amortized cost basis in the loan and the present value of the expected future cash flows from the borrower, which is generally discounted at the loan's effective interest rate, or the fair value of the collateral, if the loan is collateral dependent.

 Unadvanced Loan Commitments

 Unadvanced commitments represent amounts for which we have approved and executed loan contracts, but the funds have not been advanced. The majority of the unadvanced commitments reported represent amounts that are subject to material adverse change clauses at the time of the loan advance. Prior to making an advance on these facilities, we would confirm there has been no material adverse change in the business or condition, financial or otherwise, of the borrower since the time the loan was approved and confirm the borrower is currently in compliance with loan terms and conditions. The remaining unadvanced commitments relate to line of credit loans that are not subject to a material adverse change clause at the time of each loan advance. As such, we would be required to advance amounts on these committed facilities as long as the borrower is in compliance with the terms and conditions of the loan commitment.

 Unadvanced loan commitments related to line of credit loans are typically for periods not to exceed five years and are generally revolving facilities used for working capital and backup liquidity purposes. Historically, we have experienced a very low utilization rate on line of credit loan facilities, whether or not there is a material adverse change clause. Since we generally do not charge a fee on the unadvanced portion of the majority of our loan facilities, our borrowers will typically request long-term facilities to fund construction work plans and other capital expenditures for periods of up to five years and draw down on the facility over that time. These factors contribute to our expectation that the majority of the unadvanced line of credit loan commitments will expire without being fully drawn upon and that the total unadvanced amount does not represent future cash funding requirements.

 Reserve for Credit Losses—Off-Balance Sheet Credit Exposures

 We also maintain a reserve for credit losses for our off-balance sheet credit exposures related to unadvanced loan commitments and financial guarantees. Because our business processes and credit risks associated with our off-balance sheet credit exposures are essentially the same as for our loans, we measure expected credit losses for our off-balance sheet exposures, after adjusting for the probability of funding these exposures, consistent with the methodology used for our funded outstanding exposures. We include the reserve for expected credit losses for our off-balance sheet credit exposures as a component of other liabilities on our consolidated balance sheets.

 Leases

 Our lease program is intended to provide equipment financing for leased assets, such as vehicles, to our members. We determine whether an arrangement is a lease and the lease classification under ASC Topic 842, Leases at lease inception for all lease transactions with an initial term greater than one year. NCSC began entering into lease agreements ("head lease agreements") with a third party to lease vehicles in FY2023. At the inception date of the head lease agreements, NCSC also entered into sublease agreements ("sublease agreements") to sublease these vehicles to its members. Both the head lease and sublease agreements provide customers the option to terminate the lease by buying the vehicle for a terminal rental adjustment clause ("TRAC") value at the end of the lease term. In addition, these agreements include a residual value deficiency provision in the event the customer does not purchase the vehicle at the end of the lease. The head lease and

 sublease have the same lease term ranging from three to 10 years. We classified the head leases as finance leases and subleases as sales-type leases.

 Lessee Arrangements

 For the finance leases in which we are the lessee, right-of-use ("ROU") assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The lease term is estimated based on the economic life of the vehicles. We use the rate implicit in the lease to determine the present value of the lease payments when the rate is readily determinable or we use our incremental borrowing rate. The lease liabilities are included in the other liabilities line item on the consolidated balance sheets. Interest expense for finance lease liabilities is included in the interest expense in the consolidated statements of operations. Variable lease costs for head leases, including property and sales taxes, are recognized as lease expenses when incurred, and are included in the other non-interest expense line item in the consolidated statements of operations. Total finance lease liability was $ 7 million and $ 3 million as of May 31, 2025 and 2024, respectively. Interest expenses and variable lease cost from the finance leases were not material for FY2025, FY2024 and FY2023.

 Sublessor Arrangements

 For the sales-type lease in which we are the sublessor, we derecognize the ROU asset of the head lease and record net investment in leases at the commencement date of the sublease, which is included in the other assets on the consolidated balance sheets. Interest income from the net investment in leases is included in interest income in the consolidated statements of operations. Variable lease payments, including property and sales tax payments reimbursed by the subleasee, are included in fee and other income in the consolidated statements of operations. Total net investment in leases was $ 7 million and $ 3 million as of May 31, 2025 and 2024, respectively. Interest income and variable lease payment income from the sales-type leases were not material for FY2025, FY2024 and FY2023.

 Fixed Assets

 Fixed assets are recorded at cost less accumulated depreciation. We recognize depreciation expense for each category of our depreciable fixed assets on a straight-line basis over the estimated useful life, which ranges from three to 40 years. We recognized depreciation expense of $ 8 million, $ 7 million and $ 5 million in FY2025, FY2024 and FY2023, respectively. We perform a fixed assets impairment assessment annually or more frequently, whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable. Based on our annual impairment assessment for FY2025 and FY2024, management determined that there were no indicators of impairment of our fixed assets as of May 31, 2025 and 2024.

 The following table displays the components of our fixed assets. Our headquarters facility in Loudoun County, Virginia, which is owned by CFC, is included as a component of building and building equipment.

 Table 1.1: Fixed Assets

 2025
 2024

 Building and building equipment
 $
 52,340
 $
 50,491

 Furniture and fixtures
 7,796
 7,175

 Computer software and hardware
 87,122
 81,225

 Other
 1,302
 1,213

 Depreciable fixed assets
 148,560
 140,104

 Less: Accumulated depreciation
 ( 91,211)
 ( 83,706)

 Net depreciable fixed assets
 57,349
 56,398

 Land
 23,796
 23,796

 Software development in progress
 4,925

 Fixed assets, net
 $
 81,667
 $
 85,119

 Cloud Computing Arrangements—Implementation Costs

 Eligible implementation costs associated with cloud computing arrangements that are service contracts are capitalized and amortized over future periods. These costs are recorded at cost less accumulated amortization and are included in other assets on the consolidated balance sheets. We recognize amortization expense for these capitalized implementation costs on a straight-line basis over the term of the hosting arrangements related to the cloud computing service contracts when ready for the intended use, and we include it in other general and administrative expenses in the consolidated statements of operations. We perform an impairment assessment annually or more frequently, whenever events or circumstances indicate that the carrying amount for the capitalized implementation costs for cloud computing service contracts may not be recoverable. Based on our annual impairment assessment for FY2025 and FY2024, management determined that there were no indicators of impairment of our capitalized implementation costs for cloud computing service contracts as of May 31, 2025 and 2024.

 We had $ 48 million of net unamortized capitalized implementation costs for cloud computing service contracts, which are net of accumulated amortization of $ 9 million related to these costs as of May 31, 2025. In comparison, we had $ 41 million of net unamortized capitalized implementation costs for cloud computing service contracts, which are net of accumulated amortization of $ 4 million related to these costs as of May 31, 2024. We recognized amortization expense of $ 5 million, $ 3 million and $ 1 million in FY2025, FY2024 and FY2023, respectively, for the capitalized implementation costs for cloud computing service contracts.

 Securities Sold Under Repurchase Agreements

 We enter into repurchase agreements to sell investment securities. These transactions are accounted for as collateralized financing transactions and are recorded on our consolidated balance sheets as part of short-term borrowings at the amounts at which the securities were sold. We had no securities sold under repurchase agreements outstanding as of May 31, 2025 and 2024.

 Debt

 We report debt at cost net of unamortized issuance costs and discounts or premiums. Issuance costs, discounts and premiums are deferred and amortized into interest expense using the effective interest method or a method approximating the effective interest method over the legal maturity of each bond issue. Short-term borrowings consist of borrowings with an original

 contractual maturity of one year or less and do not include the current portion of long-term debt. Borrowings with an original contractual maturity of greater than one year are classified as long-term debt.

 Derivative Instruments

 We are an end user of derivative financial instruments and do not engage in derivative trading. We use derivatives, primarily interest rate swaps and Treasury rate locks, to manage interest rate risk. Derivatives may be privately negotiated contracts, which are often referred to as over-the-counter ("OTC") derivatives, or they may be listed and traded on an exchange. We generally engage in OTC derivative transactions.

 In accordance with the accounting standards for derivatives and hedging activities, we record derivative instruments at fair value as either a derivative asset or derivative liability on our consolidated balance sheets. We report derivative asset and liability amounts on a gross basis based on individual contracts, which does not take into consideration the effects of master netting agreements or collateral netting. Derivatives in a gain position are reported as derivative assets on our consolidated balance sheets, while derivatives in a loss position are reported as derivative liabilities. Accrued interest related to derivatives is reported on our consolidated balance sheets as a component of either accrued interest receivable or accrued interest payable.

 If we do not elect hedge accounting treatment, changes in the fair value of derivative instruments, which consist of net accrued periodic derivative cash settlements income or expense and derivative forward value amounts, are recognized in our consolidated statements of operations under derivative gains (losses). If we elect hedge accounting treatment for derivatives, we formally document, designate and assess the effectiveness of the hedge relationship. Changes in the fair value of derivatives designated as qualifying cash flow hedges are recorded as a component of other comprehensive income ("OCI") and reclassified from accumulated other comprehensive income ("AOCI") to earnings using the effective interest method over the term of the forecasted transaction.

 We generally do not designate interest rate swaps, which represent the substantial majority of our derivatives, for hedge accounting. Accordingly, changes in the fair value of interest rate swaps are reported in our consolidated statements of operations under derivative gains (losses). Net periodic cash settlements expense related to interest rate swaps are classified as an operating activity in our consolidated statements of cash flows.

 We typically designate treasury rate locks as cash flow hedges of forecasted debt issuances or repricings. Changes in the fair value of treasury locks designated as cash flow hedges are recorded as a component of OCI and reclassified from AOCI into interest expense when the forecasted transaction occurs.

 Guarantee Liability

 We maintain a guarantee liability that represents our contingent and noncontingent exposure related to guarantees and standby liquidity obligations associated with our members' debt. The guarantee liability is included in the other liabilities line item on the consolidated balance sheet, and the provision for guarantee liability is reported in non-interest expense as a separate line item on the consolidated statement of operations.

 The contingent portion of the guarantee liability represents management's estimate of our exposure to losses within the guarantee portfolio. The methodology used to estimate the contingent guarantee liability is consistent with the methodology used to determine the allowance for credit losses under the CECL model.

 We record a noncontingent guarantee liability for all new or modified guarantees. Our noncontingent guarantee liability represents our obligation to stand ready to perform over the term of our guarantees and liquidity obligations that we have entered into or modified. Our noncontingent obligation is estimated based on guarantee and liquidity fees charged for guarantees issued and represents management's estimate of the fair value of our obligation to stand ready to perform. The fees are deferred and amortized using the straight-line method into fee and other income over the term of the guarantee.

 Fair Value Valuation Processes

 We present certain financial instruments at fair value, including equity and debt securities, and derivatives. Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (also referred to as an exit price). We consider observable prices in the principal market in our valuations where possible. Fair value estimates were developed at the reporting date and may not necessarily be indicative of amounts that could ultimately be realized in a market transaction at a future date. With the exception of redeeming debt under early redemption provisions, terminating derivative instruments under early-termination provisions and allowing borrowers to prepay their loans, we held and intend to hold all financial instruments to maturity, excluding common stock and preferred stock investments that have no stated maturity and our trading debt securities.

 Fair Value Hierarchy

 The fair value accounting guidance provides a three-level fair value hierarchy for classifying financial instruments. This hierarchy is based on the markets in which the assets or liabilities trade and whether the inputs to the valuation techniques used to measure fair value are observable or unobservable. Fair value measurement of a financial asset or liability is assigned a level based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are summarized below:

 Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities
 Level 2: Observable market-based inputs, other than quoted prices in active markets for identical assets or liabilities
 Level 3: Unobservable inputs

 The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted prices in active markets or observable market parameters. When quoted prices and observable data in active markets are not fully available, management's judgment is necessary to estimate fair value. Changes in market conditions, such as reduced liquidity in the capital markets or changes in secondary market activities, may reduce the availability and reliability of quoted prices or observable data used to determine fair value.

 Membership Fees

 Members are charged a one-time membership fee based on member class. CFC distribution system members, power supply system members and national associations of cooperatives pay a $ 1,000 membership fee. CFC service organization members pay a $ 200 membership fee and CFC associates pay a $ 1,000 fee. NCSC members pay a $ 100 membership fee. Membership fees are accounted for as members' equity.

 Financial Instruments with Off-Balance Sheet Risk

 In the normal course of business, we are a party to financial instruments with off-balance sheet risk to meet the financing needs of our member-borrowers. These financial instruments include committed lines of credit, standby letters of credit and guarantees of members' obligations.

 Early Extinguishment of Debt

 We redeem outstanding debt early from time to time to manage liquidity and interest rate risk. When we redeem outstanding debt early, we recognize a gain or loss related to the difference between the amount paid to redeem the debt and the net book value of the extinguished debt as a component of other non-interest expense in the consolidated statements of operations.

 Income Taxes

 While CFC is exempt under Section 501(c)(4) of the Internal Revenue Code, it is subject to tax on unrelated business taxable income. NCSC is a taxable cooperative that pays income tax on the full amount of its reportable taxable income and allowable deductions.

 The income tax benefit (expense) recorded in the consolidated statement of operations represents the income tax benefit (expense) at the applicable combined federal and state income tax rates resulting from a statutory tax rate. The federal statutory tax rate for FY2025, FY2024 and FY2023 was 21 %. Substantially all of the income tax expense recorded in our consolidated statements of operations relates to NCSC. We recorded an immaterial amount of deferred tax asset as of May 31, 2025 and an immaterial amount of deferred tax liability as of May 31, 2024 from NCSC, primarily from the differences in the accounting and tax treatment for derivatives.

 New Accounting Standards Adopted in Fiscal Year 2025

 Segment Reporting—Improvements to Reportable Segment Disclosures

 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which introduced key amendments to enhance disclosures for public entities' reportable segments. The amendments require disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity's CODM. The amendments also expand the interim segment disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, and requires retrospective application to all prior periods presented in the financial statements. We adopted the guidance effective May 31, 2025 on a retrospective basis. See "Note 16—Business Segments" for additional disclosures.

 New Accounting Standards Issued But Not Yet Adopted

 Income Statement—Expense Disaggregation Disclosures

 In November 2024, the FASB issued Accounting Standards Update ("ASU") 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The amendments require public entities to disclose, in interim and annual reporting periods, additional information about certain expenses in notes to financial statements, including purchases of inventory, employee compensation, depreciation, intangible asset amortization and other specific expense categories. ASU 2024-03 is effective for public business entities for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. Upon adoption, ASU 2024-03 should be applied on a prospective basis, while retrospective application is also permitted. We expect to adopt the guidance in our annual report for the fiscal year ended May 31, 2028, and the interim disclosure requirements in the quarterly report for the quarter ended August 31, 2028. We are currently in the process of reviewing the guidance and evaluating its impact on our consolidated financial statements and related disclosures.

 Disclosure Improvements—Codification Amendment in Response to the SEC's Disclosure Update and Simplification Initiative

 In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements—Codification Amendment in Response to the SEC's Disclosure Update and Simplification Initiative. The amendments in this update modify the disclosure or presentation requirements of a variety of topics in the ASC in response to the SEC's Release No. 33-10532, Disclosure Update and Simplification Initiative, and align the ASC's requirements with the SEC's regulations. For entities subject to the SEC's existing disclosure requirements, the effective date for each amendment will be the date on which the SEC's removal of that

 related disclosure from Regulation S-X or Regulation S-K becomes effective. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective. Early adoption is prohibited. We are currently in the process of evaluating the impact of the amendments on our consolidated financial statements and related disclosures.

 NOTE 2—INTEREST INCOME AND INTEREST EXPENSE

 The following table displays the components of interest income, by interest-earning asset type, and interest expense, by debt product type, presented in our consolidated statements of operations.

 Table 2.1: Interest Income and Interest Expense

 2025
 2024
 2023

 Interest income:

 Loans(1)

 $
 1,691,343
 $
 1,566,449
 $
 1,330,144

 Cash, time deposits and investment securities

 11,890
 26,902
 21,585

 Total interest income

 Interest expense:(2)(3)

 189,429
 250,316
 165,961

 1,113,480
 952,659
 763,700

 Subordinated debt
 139,370
 136,113
 106,847

 Total interest expense
 1,442,279
 1,339,088
 1,036,508

 $
 260,954
 $
 254,263
 $
 315,221

 (1)Includes loan conversion fees, which are generally deferred and recognized in interest income over the period to maturity using the effective interest method, late payment fees, commitment fees and net amortization of deferred loan fees and loan origination costs.
 (2)Includes amortization of debt discounts and premiums, and debt issuance costs, which are generally deferred and recognized as interest expense over the period to maturity using the effective interest method. Issuance costs related to dealer commercial paper, however, are recognized in interest expense immediately as incurred.
 (3)Includes fees related to funding arrangements, such as up-front fees paid to banks participating in our committed bank revolving line of credit agreements. Based on the nature of the fees, the amount is either recognized immediately as incurred or deferred and recognized in interest expense ratably over the term of the arrangement.

 Deferred income reported on our consolidated balance sheets of $ 32 million and $ 33 million as of May 31, 2025 and 2024, respectively, consists primarily of deferred loan conversion fees that totaled $ 21 million and $ 24 million as of each respective date.

 NOTE 3—INVESTMENT SECURITIES

 Our investment securities portfolio consists of debt securities classified as trading and equity securities with readily determinable fair values. We therefore record changes in the fair value of our debt and equity securities in earnings and report these unrealized changes together with realized gains and losses from the sale of securities as a component of non-interest income in our consolidated statements of operations. For additional information on our investments in debt securities, see "Note 1—Summary of Significant Accounting Policies."

 Debt Securities

 Our debt securities portfolio consists of corporate debt securities, municipality debt securities, commercial mortgage-backed securities ("MBS") and other asset-backed securities ("ABS"). Pursuant to our investment policy guidelines, all fixed-income debt securities, at the time of purchase, must be rated at least investment grade based on external credit ratings from at least two of the leading global credit rating agencies, when available, or the corresponding equivalent, when not available. Securities rated investment grade, that is those rated Baa3 or higher by Moody's Investors Service ("Moody's") or BBB- or higher by S&P Global Inc. ("S&P") or BBB- or higher by Fitch Ratings Inc. ("Fitch"), are generally considered by the rating agencies to be of lower credit risk than non-investment-grade securities.

 The following table presents the composition of our investment debt securities portfolio and the fair value as of May 31, 2025 and 2024.

 Table 3.1: Investments in Debt Securities, at Fair Value

 2025
 2024

 Debt securities, at fair value:

 Corporate debt securities
 $
 107,957
 $
 246,041

 Commercial agency MBS(1)

 6,663

 U.S. state and municipality debt securities
 1,049
 8,179

 Other ABS(2)

 4,132
 20,468

 Total debt securities trading, at fair value
 $
 $

 (1)Consists of securities backed by the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac").
 (2)Consists primarily of securities backed by auto lease loans, equipment-backed loans, auto loans and credit card loans.

 We recognized net unrealized gains of $ 9 million and $ 15 million on our debt securities for FY2025 and FY2024, respectively, and net unrealized losses of $ 3 million for FY2023.

 We sold $ 14 million of debt securities during FY2025 and recorded realized gains on the sale of these securities of less than $ 1 million. We did not sell any debt securities during FY2024. We sold $ 36 million of debt securities at fair value and recorded realized gains on the sale of these securities of less than $ 1 million during FY2023.

 Equity Securities

 The following table presents the composition of our equity security holdings and the fair value as of May 31, 2025 and 2024.

 Table 3.2: Investments in Equity Securities, at Fair Value

 2025
 2024

 Equity securities, at fair value:

 Farmer Mac—Series C noncumulative preferred stock

 $
 —
 $
 25,130

 Farmer Mac—Class A common stock
 11,756

 Total equity securities, at fair value
 $
 $

 On July 18, 2024, the Federal Agricultural Mortgage Corporation ("Farmer Mac") redeemed its Series C noncumulative preferred stock at a redemption price of $ 25.00 per share, plus any declared and unpaid dividends through and including the redemption date. We recorded an immaterial loss as part of this transaction.

 We recognized net unrealized losses on our equity securities of $ 1 million for FY2025, and net unrealized gains of $ 1 million and $ 2 million for FY2024 and FY2023, respectively. These unrealized amounts are reported as a component of non-interest income in our consolidated statements of operations.

 NOTE 4—LOANS

 Our loan portfolio is segregated into segments by borrower member class, which is based on the utility sector of the borrowers because the key operational, infrastructure, regulatory, environmental, customer and financial risks of each sector are similar in nature. Total loan portfolio member class 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 generally revolving loan facilities and have a variable interest rate.

 We offer loans under secured long-term facilities with terms generally up to 35 years and line of credit loans. Under secured long-term facilities, borrowers have the option of selecting a fixed or variable rate for a period of one to 35 years for each long-term loan advance. When a selected fixed interest rate term expires, the borrower may select another fixed-rate term or a variable rate. Line of credit loans are revolving loan facilities that typically have a variable interest rate and are generally unsecured. Collateral and security requirements for advances on loan commitments are identical to those required at the time of the initial loan approval.

 Loans to Members

 Loans to members consist of loans held for investment and loans held for sale. The outstanding amount of loans held for investment is recorded based on the unpaid principal balance, net of discounts, net charge-offs and recoveries, of loans and deferred loan origination costs. The outstanding amount of loans held for sale is recorded based on the lower of cost or fair value. The following table presents loans to members by legal entity, member class and loan type, as of May 31, 2025 and 2024.

 Table 4.1: Loans to Members by Member Class and Loan Type

 2025
 2024

 CFC:

 $
 %
 $
 %

 —

 NCSC:

 Deferred loan origination costs—CFC(2)

 —
 —

 $
 %
 $
 %

 $
 31,388,313
 %
 $
 30,266,043
 %

 1,122,250
 839,458

 32,510,563
 31,105,501

 Lines of credit
 4,552,985
 3,422,683

 Deferred loan origination costs—CFC(2)

 —
 —

 $
 %
 $
 %

 (1) Represents the unpaid principal balance, net of discounts, charge-offs and recoveries, of loans as of each period end.
 (2) Deferred loan origination costs are recorded at CFC segment.

 Loan Sales

 We may transfer whole loans and participating interests to third parties. These transfers are typically made concurrently or within a short period of time with the closing of the loan sale or participation agreement at par value and meet the accounting criteria required for sale accounting. Therefore, we remove the transferred loans or participating interests from our consolidated balance sheets when control has been surrendered and recognize a gain or loss on the sale, if any. We retain a servicing performance obligation on the transferred loans and recognize related servicing fees on an accrual basis over the period for which servicing is provided, as we believe the servicing fee represents adequate compensation. Other than the servicing performance obligation, we have not retained any interest in the loans sold to date. In addition, we have no obligation to repurchase loans that are sold, except in the case of breaches of representations and warranties.

 We sold CFC and NCSC loans, at par for cash, totaling $ 424 million, $ 324 million and $ 257 million in FY2025, FY2024 and FY2023, respectively. We recorded immaterial losses on the sale of these loans attributable to the unamortized deferred loan origination costs associated with the transferred loans. We had loans held for sale totaling $ 21 million and $ 3 million as of May 31, 2025 and 2024, respectively.

 Credit Concentration

 Concentrations of credit may exist when a lender has large credit exposures to single borrowers, large credit exposures to borrowers in the same industry sector or engaged in similar activities, or large credit exposures to borrowers in a geographic region that would cause the borrowers to be similarly impacted by economic or other conditions in the region. As a tax-exempt, member-owned finance cooperative, CFC's principal focus is to provide funding to its rural electric utility cooperative members to assist them in acquiring, constructing and operating electric distribution systems, power supply systems and related facilities.

 Because we lend primarily to our rural electric utility cooperative members, we have had a loan portfolio subject to single-industry and single-obligor concentration risks since our inception in 1969. Loans outstanding to electric utility organizations of $ 36,488 million and $ 33,930 million as of May 31, 2025 and 2024, respectively, accounted for 98 % of total loans outstanding as of both dates. The remaining loans outstanding in our portfolio were to members, affiliates and associates in the telecommunications industry. Our credit exposure is partially mitigated by long-term loans guaranteed by RUS, which totaled $ 105 million and $ 114 million as of May 31, 2025 and 2024, respectively.

 Single-Obligor Concentration

 The outstanding loan exposure for our 20 largest borrowers totaled $ 7,149 million and $ 6,851 million as of May 31, 2025 and 2024, respectively, representing 19 % and 20 % of total loans outstanding as of each respective date. Our 20 largest borrowers consisted of 14 distribution systems and six power supply systems as of May 31, 2025, compared with 13 distribution systems and seven power supply systems as of May 31, 2024. The largest total outstanding exposure to a single borrower or controlled group represented approximately 1 % of total loans outstanding as of both May 31, 2025 and 2024.

 We entered into a long-term standby purchase commitment agreement with Farmer Mac during fiscal year 2016. Under this agreement, we may designate certain long-term loans to be covered under the commitment, subject to approval by Farmer Mac, and in the event any such loan later goes into payment default for at least 90 days, upon request by us, Farmer Mac must purchase such loan at par value. We are required to pay Farmer Mac a monthly fee based on the unpaid principal balance of loans covered under the purchase commitment. The aggregate unpaid principal balance of designated and Farmer Mac-approved loans was $ 346 million and $ 370 million as of May 31, 2025 and 2024, respectively. Loan exposure to our 20 largest borrowers covered under the Farmer Mac agreement totaled $ 155 million and $ 226 million as of May 31, 2025 and 2024, respectively, which reduced our exposure to the 20 largest borrowers to $ 6,994 million and $ 6,625 million of our total loans outstanding as of each respective date. We have had no loan defaults for loans covered under this agreement; therefore, no loans have been put to Farmer Mac for purchase pursuant to the standby purchase agreement as of May 31, 2025.

 Geographic Concentration

 Although our organizational structure and mission result in single-industry concentration, we serve a geographically diverse group of electric and telecommunications borrowers throughout the U.S. The consolidated number of borrowers with loans outstanding totaled 899, located in 49 states as of May 31, 2025, compared with 885 borrowers, located in 49 states and the District of Columbia as of May 31, 2024. 50 were electric power supply borrowers as of both May 31, 2025 and 2024. Electric power supply borrowers generally require significantly more capital than electric distribution and telecommunications borrowers.

 Texas, which had 68 and 67 borrowers with loans outstanding as of May 31, 2025 and 2024, respectively, accounted for the largest number of borrowers with loans outstanding in any one state as of each respective date, as well as the largest concentration of loan exposure in any one state. Loans outstanding to Texas-based borrowers totaled $ 6,105 million and $ 5,768 million as of May 31, 2025 and 2024, respectively, and accounted for approximately 16 % and 17 % of total loans outstanding as of each respective date. Of the loans outstanding to Texas-based borrowers, $ 118 million and $ 126 million as

 of May 31, 2025 and 2024, respectively, were covered by the Farmer Mac standby repurchase agreement, which reduced our credit risk exposure to Texas-based borrowers to $ 5,987 million and $ 5,642 million as of each respective date.

 Credit Quality Indicators

 Assessing the overall credit quality of our loan portfolio and measuring our credit risk is an ongoing process that involves tracking payment status, modifications to borrowers experiencing financial difficulty, nonperforming loans, charge-offs, the internal risk ratings of our borrowers and other indicators of credit risk. We monitor and subject each borrower and loan facility in our loan portfolio to an individual risk assessment based on quantitative and qualitative factors. Payment status trends and internal risk ratings are indicators, among others, of the probability of borrower default and overall credit quality of our loan portfolio.

 Payment Status of Loans

 Loans are considered delinquent when contractual principal or interest amounts become past due 30 days or more following the scheduled payment due date. Loans are placed on nonaccrual status when payment of principal or interest is 90 days or more past due or management determines that the full collection of principal and interest is doubtful. The following table presents the payment status, by legal entity and member class, of loans outstanding as of May 31, 2025 and 2024.

 Table 4.2: Payment Status of Loans Outstanding

 Current
 30-89 Days Past Due
 > 90 Days
Past Due
 Total
Past Due
 Total Loans Outstanding
 Nonaccrual Loans

 CFC:

 $
 $
 —
 $
 —
 $
 —
 $
 $
 —

 —
 —
 —

 —
 —
 —
 —

 —
 —
 —

 NCSC:

 —
 —
 —
 —

 —
 —
 —
 —

 —
 —
 —
 —

 $
 $
 —
 $
 —
 $
 —
 $
 $

 Percentage of total loans
 %
 —
 %
 —
 %
 —
 %
 %
 0.07
 %

 Current
 30-89 Days Past Due
 > 90 Days
Past Due
 Total
Past Due
 Total Loans Outstanding
 Nonaccrual Loans

 CFC:

 $
 $
 —
 $
 —
 $
 —
 $
 $
 —

 —
 —
 —

 —
 —
 —
 —

 —
 —
 —

 NCSC:

 —
 —
 —
 —

 —
 —
 —
 —

 —
 —
 —
 —

 $
 $
 —
 $
 —
 $
 —
 $
 $

 Percentage of total loans
 %
 —
 %
 —
 %
 —
 %
 %
 0.14
 %

 We had a CFC electric power supply loan outstanding of $ 26 million and $ 49 million on nonaccrual status as of May 31, 2025 and 2024, respectively.

 Loan Modifications to Borrowers Experiencing Financial Difficulty

 We actively monitor problem loans and, from time to time, attempt to work with borrowers to manage such exposures through loan workouts or modifications that better align with the borrower's current ability to pay. Therefore, as part of our loss-mitigation efforts, we may provide modifications to a borrower experiencing financial difficulty to improve long-term collectability of the loan and to avoid the need for exercising remedies. We consider the impact of all loan modifications when estimating the credit quality of our loan portfolio and establishing the allowance for credit losses.

 We had no loan modifications to borrowers experiencing financial difficulty entered during FY2025. We had one loan modification to an NCSC telecom borrower experiencing financial difficulty during FY2024. This loan received a term extension and had an amortized cost of $ 3 million, representing 1 % of the NCSC telecom loan portfolio as of May 31, 2024. The loan has been performing in accordance with the terms of the loan agreement after the modification.

 Nonperforming Loans

 We had a loan to one CFC electric power supply borrower of $ 26 million and $ 49 million classified as nonperforming, which represented 0.07 % and 0.14 % of total loans outstanding as of May 31, 2025 and 2024, respectively. The reduction in the nonperforming loan was due to payments received on this loan during FY2025.

 Net Charge-Offs

 Charge-offs represent the amount of a loan that has been removed from our consolidated balance sheet when the loan is deemed uncollectible. Generally the amount of a charge-off is the recorded investment in excess of the discounted expected cash flows from the loan or, if the loan is collateral dependent, the fair value of the underlying collateral securing the loan. We report charge-offs net of amounts recovered on previously charged-off loans.

 We had no charge-offs during FY2025 and FY2024. We recorded $ 1 million in net loan recoveries to previously charged-off loan amounts related to two CFC electric power supply loans during FY2024. Prior to the two CFC electric power

 supply loan defaults in fiscal years 2021 and 2022, we had no t experienced any defaults or charge-offs in our electric utility and telecommunications loan portfolios since fiscal years 2013 and 2017, respectively.

 Borrower Risk Ratings

 As part of our management of credit risk, we maintain a credit risk-rating framework under which we employ a consistent process for assessing the credit quality of our loan portfolio. We evaluate each borrower and loan facility in our loan portfolio and assign internal borrower and loan facility risk ratings based on the consideration of a number of quantitative and qualitative factors. Each risk rating is reassessed annually following the receipt of the borrower's audited financial statements; however, interim risk-rating adjustments may occur as a result of updated information affecting a borrower's ability to fulfill its obligations or other significant developments and trends. We categorize loans in our portfolio based on our internally assigned borrower risk ratings, which are intended to assess the general creditworthiness of the borrower and probability of default. Our borrower risk ratings align with the U.S. federal banking regulatory agencies' credit risk definitions of pass and criticized categories, with the criticized category further segmented among special mention, substandard and doubtful. Pass ratings reflect relatively low probability of default, while criticized ratings have a higher probability of default.

 The following is a description of the borrower risk-rating categories.

 • Pass: Borrowers that are not included in the categories of special mention, substandard or doubtful.
 • Special Mention: Borrowers that may be characterized by a potential credit weakness or deteriorating financial condition that is not sufficiently serious to warrant a classification of substandard or doubtful.
 • Substandard: Borrowers that display a well-defined credit weakness that may jeopardize the full collection of principal and interest.
 • Doubtful: Borrowers that have a well-defined credit weakness or weaknesses that make full collection of principal and interest, on the basis of currently known facts, conditions and collateral values, highly questionable and improbable.

 Our internally assigned borrower risk ratings serve as the primary credit quality indicator for our loan portfolio. Because our internal borrower risk ratings provide important information on the probability of default, they are a key input in determining our allowance for credit losses.

 Table 4.3 displays total loans outstanding, by borrower risk rating category and by legal entity and member class, as of May 31, 2025 and 2024. The borrower risk rating categories presented below correspond to the borrower risk-rating categories used in calculating our collective allowance for credit losses. If a parent company provides a guarantee of full repayment of loans of a subsidiary borrower and has a better risk rating, we include the loans outstanding in the borrower risk-rating category of the guarantor parent company rather than the risk-rating category of the subsidiary borrower for purposes of calculating the collective allowance.

 We present term loans outstanding as of May 31, 2025 and 2024, by fiscal year of origination for each year during the five-year annual reporting period beginning in fiscal year 2021 and 2020, and in the aggregate for periods prior to fiscal year 2021 and 2020, respectively. The origination period represents the date CFC advances funds to a borrower, rather than the execution date of a loan facility for a borrower. Revolving loans are presented separately. The substantial majority of loans in our portfolio represent fixed-rate advances under secured long-term facilities with terms up to 35 years, and as indicated in Table 4.3 below, term loan advances made to borrowers prior to fiscal year 2021 totaled $ 18,537 million, representing 50 % of our total loans outstanding as of May 31, 2025. In comparison, term loan advances made to borrowers prior to fiscal year 2020 totaled $ 17,519 million, representing 51 % of our total loans outstanding as of May 31, 2024. The average remaining maturity of our long-term loans, which accounted for 88 % and 90 % of total loans outstanding as of May 31, 2025 and 2024, was 19 years, as of each respective date.

 Table 4.3: Loans Outstanding by Borrower Risk Ratings and Origination Year

 Term Loans by Fiscal Year of Origination

 2025
 2024
 2023
 2022
 2021
 Prior
 Revolving Loans
 Total

 Pass

 CFC:

 $
 2,301,736
 $
 2,471,765
 $
 2,323,781
 $
 2,256,706
 $
 1,541,206
 $
 15,022,726
 $
 3,163,495
 $
 29,081,415

 442,972
 496,642
 441,984
 296,948
 474,074
 2,857,029
 859,752
 5,869,401

 7,125
 36,294
 57,101
 2,806
 1,420
 22,257
 113,338
 240,341

 2,751,833
 3,004,701
 2,822,866
 2,556,460
 2,016,700
 17,902,012
 4,136,585
 35,191,157

 NCSC:

 81,315
 122,354
 250,610
 16,773
 4,131
 385,564
 217,416
 1,078,163

 52,516
 129,964
 40,642
 64,086
 49,898
 196,307
 42,052

 133,831
 252,318
 291,252
 80,859
 54,029
 581,871
 259,468
 1,653,628

 Total pass
 $
 2,885,664
 $
 3,257,019
 $
 3,114,118
 $
 2,637,319
 $
 2,070,729
 $
 18,483,883
 $
 4,396,053
 $
 36,844,785

 Special mention

 CFC:

 $
 —
 $
 $
 4,126
 $
 —
 $
 4,568
 $
 15,693
 $
 156,332
 $
 181,080

 —
 —
 —
 —
 —
 10,984
 —
 10,984

 —
 4,126
 —
 4,568
 26,677
 156,332
 192,064

 NCSC electric

 —
 —
 —
 —
 —
 —

 Total special mention
 $
 —
 $
 $
 4,126
 $
 —
 $
 4,568
 $
 26,677
 $
 156,932
 $
 192,664

 Substandard

 Total substandard
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —

 Doubtful

 CFC:

 CFC Power supply

 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 $
 $
 —
 $

 Total doubtful
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 $
 $
 —
 $

 Total criticized loans
 $
 —
 $
 $
 4,126
 $
 —
 $
 4,568
 $
 52,776
 $
 156,932
 $
 218,763

 $
 2,885,664
 $
 3,257,380
 $
 3,118,244
 $
 2,637,319
 $
 2,075,297
 $
 18,536,659
 $
 4,552,985
 $

 Term Loans by Fiscal Year of Origination

 2024
 2023
 2022
 2021
 2020
 Prior
 Revolving Loans
 Total

 Pass

 CFC:

 $
 2,523,296
 $
 2,370,847
 $
 2,328,295
 $
 1,589,581
 $
 1,766,002
 $
 14,117,758
 $
 2,223,311
 $
 26,919,090

 509,948
 454,010
 321,289
 536,052
 170,017
 2,866,848
 735,065
 5,593,229

 36,794
 59,348
 13,174
 1,684
 11,123
 16,534
 86,796
 225,453

 3,070,038
 2,884,205
 2,662,758
 2,127,317
 1,947,142
 17,001,140
 3,045,172
 32,737,772

 NCSC:

 76,061
 256,974
 17,606
 4,914
 183,510
 249,338
 157,477

 139,732
 46,632
 74,222
 63,580
 22,730
 188,462
 60,209
 595,567

 215,793
 303,606
 91,828
 68,494
 206,240
 437,800
 217,686
 1,541,447

 Total pass
 $
 3,285,831
 $
 3,187,811
 $
 2,754,586
 $
 2,195,811
 $
 2,153,382
 $
 17,438,940
 $
 3,262,858
 $
 34,279,219

 Special mention

 CFC:

 $
 $
 4,170
 $
 —
 $
 4,658
 $
 —
 $
 16,356
 $
 159,825
 $
 185,373

 —
 —
 —
 —
 —
 11,893
 —
 11,893

 4,170
 —
 4,658
 —
 28,249
 159,825
 197,266

 NCSC telecom
 —
 —
 —
 —
 —
 3,030
 —
 3,030

 Total special mention
 $
 $
 4,170
 $
 —
 $
 4,658
 $
 —
 $
 31,279
 $
 159,825
 $
 200,296

 Substandard

 Total substandard
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —

 Doubtful

 CFC:

 CFC Power supply
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 $
 $
 —
 $

 Total doubtful
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 $
 $
 —
 $

 Total criticized loans
 $
 $
 4,170
 $
 —
 $
 4,658
 $
 —
 $
 79,948
 $
 159,825
 $
 248,965

 $
 3,286,195
 $
 3,191,981
 $
 2,754,586
 $
 2,200,469
 $
 2,153,382
 $
 17,518,888
 $
 3,422,683
 $

 Criticized loans totaled $ 219 million and $ 249 million as of May 31, 2025 and 2024, respectively, and represented approximately 1 % of total loans outstanding as of each respective date. The decrease of $ 30 million in criticized loans was driven primarily by decreases of loans outstanding in the special mention and doubtful categories, as discussed below. Each of the borrowers with loans outstanding in the criticized category was current with regard to all principal and interest amounts due to us as of May 31, 2025 and 2024.

 Special Mention

 One CFC electric distribution borrower with loans outstanding of $ 181 million and $ 185 million as of May 31, 2025 and 2024, respectively, accounted for the substantial majority of loans in the special mention loan category amount of $ 193 million and $ 200 million as of each respective date. This borrower experienced an adverse financial impact from restoration costs incurred to repair damage caused by two successive hurricanes. We expect that the borrower will continue to receive grant funds from the Federal Emergency Management Agency and the state where it is located for the full reimbursement of the hurricane damage-related restoration costs.

 Substandard

 We did not have any loans classified as substandard as of May 31, 2025 and 2024.

 Doubtful

 We had one loan outstanding classified as doubtful totaling $ 26 million and $ 49 million to a CFC electric power supply borrower as of May 31, 2025 and 2024, respectively. The reduction in its loan outstanding was due to payments received on the loan during FY2025.

 Unadvanced Loan Commitments

 Unadvanced loan commitments represent approved and executed loan contracts for which funds have not been advanced to borrowers. The following table presents unadvanced loan commitments, by member class and by loan type, as of May 31, 2025 and 2024.

 Table 4.4: Unadvanced Commitments by Member Class and Loan Type(1)

 2025
 2024

 CFC:

 $
 11,948,516
 $
 11,174,041

 5,097,398
 4,519,150

 215,768
 254,250

 17,261,682
 15,947,441

 NCSC:

 520,312
 622,125

 437,015
 423,796

 957,327
 $
 1,045,921

 Total unadvanced commitments
 $
 18,219,009
 $
 16,993,362

 Loan type:(2)

 $
 —
 $
 —

 7,471,266
 6,880,295

 7,471,266
 6,880,295

 Lines of credit
 10,747,743
 10,113,067

 Total unadvanced commitments
 $
 18,219,009
 $
 16,993,362

 (1)Excludes the portion of any commitment to advance funds under swingline loan facilities in excess of CFC's total commitment amount in a syndicated credit facility. Other syndicate lenders have an absolute obligation to acquire participations in such swingline loans upon CFC's election, including during a default by the borrower.
 (2)The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all unadvanced long-term loan commitments are reported as variable rate. However, the borrower may select either a fixed or a variable rate when an advance is drawn under a loan commitment.

 The following table displays, by loan type, the available balance under unadvanced loan commitments as of May 31, 2025 and the related maturities in each fiscal year during the five-year period ended May 31, 2030, and thereafter.

 Table 4.5: Unadvanced Loan Commitments

 Available
Balance
 Notional Maturities of Unadvanced Loan Commitments

 2026
 2027
 2028
 2029
 2030

 $
 10,747,743
 $
 4,793,228
 $
 1,402,601
 $
 1,662,338
 $
 1,389,342
 $
 1,457,280
 $
 42,954

 Long-term loans
 7,471,266
 533,387
 1,212,138
 1,272,850
 2,469,334
 1,882,764
 100,793

 Total
 $
 18,219,009
 $
 5,326,615
 $
 2,614,739
 $
 2,935,188
 $
 3,858,676
 $
 3,340,044
 $
 143,747

 Unadvanced line of credit commitments accounted for 59 % of total unadvanced loan commitments as of May 31, 2025. Unadvanced line of credit commitments are typically revolving facilities for periods not to exceed five years and generally serve as supplemental back-up liquidity to our borrowers. Historically, borrowers have not drawn the full commitment amount for line of credit facilities, and we have experienced a very low utilization rate on line of credit loan facilities regardless of whether or not we are obligated to fund the facility when a material adverse change has occurred.

 Because we historically have experienced a very low utilization rate on line of credit loan facilities, which account for the majority of our total unadvanced loan commitments, we believe the unadvanced loan commitment total of $ 18,219 million as of May 31, 2025 is not necessarily representative of our future funding requirements.

 Our unadvanced long-term loan commitments typically have a five-year draw period under which a borrower may draw funds prior to the expiration of the commitment. We expect that the majority of the long-term unadvanced loan commitments of $ 7,471 million will be advanced prior to the expiration of the commitment.

 Unadvanced Loan Commitments—Conditional

 The substantial majority of our line of credit commitments and all of our unadvanced long-term loan commitments include material adverse change clauses. Unadvanced loan commitments subject to material adverse change clauses totaled $ 14,629 million and $ 13,379 million as of May 31, 2025 and 2024, respectively. Prior to making an advance on these facilities, we confirm that there has been no material adverse change in the business or condition, financial or otherwise, of the borrower since the time the loan was approved and confirm that the borrower is currently in compliance with loan terms and conditions. In some cases, the borrower's access to the full amount of the facility is further constrained by the designated purpose, imposition of borrower-specific restrictions or by additional conditions that must be met prior to advancing funds.

 Unadvanced Loan Commitments—Unconditional

 Unadvanced loan commitments not subject to material adverse change clauses at the time of each advance consisted of unadvanced committed lines of credit totaling $ 3,590 million and $ 3,614 million as of May 31, 2025 and 2024, respectively. We are required to advance amounts on these committed facilities as long as the borrower is in compliance with the terms and conditions of the facility. The following table summarizes the available balance under unconditional committed lines of credit as of May 31, 2025, and the related maturity amounts in each fiscal year during the five-year period ending May 31, 2030.

 Table 4.6: Unconditional Committed Lines of Credit—Available Balance

 Available
Balance
 Notional Maturities of Unconditional Committed Lines of Credit

 2026
 2027
 2028
 2029
 2030

 Committed lines of credit
 $
 3,590,262
 $
 246,671
 $
 791,765
 $
 786,133
 $
 874,620
 $
 891,073

 Pledged Collateral—Loans

 We are required to pledge eligible mortgage notes or other collateral in an amount at least equal to the outstanding balance of our secured debt. Table 4.7 displays the borrowing amount under each of our secured borrowing agreements and the corresponding loans outstanding pledged as collateral as of May 31, 2025 and 2024. See "Note 6—Short-Term Borrowings" and "Note 7—Long-Term Debt" in this Report for information on our secured borrowings and other borrowings.

 Table 4.7: Pledged Loans

 2025
 2024

 Collateral trust bonds:

 2007 indenture:

 Collateral trust bonds outstanding
 $
 7,072,711
 $
 6,922,711

 Pledged collateral:

 Distribution system mortgage notes pledged
 8,107,921
 8,799,864

 RUS-guaranteed loans qualifying as permitted investments pledged

 104,628
 113,890

 Total pledged collateral
 8,212,549
 8,913,754

 1994 indenture:

 Collateral trust bonds outstanding
 $
 10,000
 $
 15,000

 Pledged collateral:

 Distribution system mortgage notes pledged
 14,575
 19,174

 Guaranteed Underwriter Program:

 Notes payable outstanding
 $
 6,456,852
 $
 6,491,814

 Pledged collateral:

 Distribution and power supply system mortgage notes pledged
 7,640,203
 8,020,508

 Farmer Mac:

 Notes payable outstanding
 $
 3,780,461
 $
 3,863,510

 Pledged collateral:

 Distribution and power supply system mortgage notes pledged
 4,648,691
 4,449,650

 NOTE 5—ALLOWANCE FOR CREDIT LOSSES

 We are required to maintain an allowance based on a current estimate of credit losses that are expected to occur over the remaining term of the loans in our portfolio. Our allowance for credit losses consists of a collective allowance and an asset-specific allowance. Additional information on our current CECL allowance methodology is provided in "Note 1—Summary of Significant Accounting Policies."

 Allowance for Credit Losses—Loan Portfolio

 The following tables summarize, by legal entity and member class, changes in the allowance for credit losses for our loan portfolio and present the allowance components for the periods presented.

 Table 5.1: Changes in Allowance for Credit Losses

 Year Ended May 31, 2025

 CFC Total

 Total

 Balance as of May 31, 2024
 $
 $
 25,583
 $
 1,189
 $
 42,726
 $
 3,937
 $
 2,063
 $
 6,000
 $

 Provision (benefit) for credit losses
 2,519
 ( 10,127)
 ( 89)
 ( 7,697)
 ( 119)
 ( 295)
 ( 414)
 ( 8,111)

 Balance as of May 31, 2025
 $
 18,473
 $
 15,456
 $
 1,100
 $
 35,029
 $
 3,818
 $
 1,768
 $
 5,586
 $
 40,615

 Year Ended May 31, 2024

 CFC Total

 Total

 Balance as of May 31, 2023
 $
 14,924
 $
 33,306
 $
 1,194
 $
 49,424
 $
 2,464
 $
 1,206
 $
 3,670
 $
 53,094

 Provision (benefit) for credit losses
 1,030
 ( 8,871)
 ( 5)
 ( 7,846)
 1,473
 2,330
 ( 5,516)

 Recoveries

 —
 1,148
 —
 1,148
 —
 —
 —
 1,148

 Balance as of May 31, 2024
 $
 $
 25,583
 $
 1,189
 $
 42,726
 $
 3,937
 $
 2,063
 $
 6,000
 $

 Year Ended May 31, 2023

 CFC Total

 Total

 Balance as of May 31, 2022
 $
 15,781
 $
 47,793
 $
 1,251
 $
 64,825
 $
 1,449
 $
 1,286
 $
 2,735
 $
 67,560

 Provision (benefit) for credit losses
 ( 857)
 ( 57)
 ( 332)
 1,015
 ( 80)

 Charge-offs
 —
 ( 15,069)
 —
 ( 15,069)
 —
 —
 —
 ( 15,069)

 Balance as of May 31, 2023
 $
 14,924
 $
 33,306
 $
 1,194
 $
 49,424
 $
 2,464
 $
 1,206
 $
 3,670
 $
 53,094

 The following tables present, by legal entity and member class, the components of our allowance for credit losses as of May 31, 2025 and 2024.

 Table 5.2: Allowance for Credit Losses Components

 CFC
 Total

 Total

 Allowance components:

 Collective allowance
 $
 18,473
 $
 6,200
 $
 1,100
 $
 25,773
 $
 3,818
 $
 1,722
 $
 5,540
 $
 31,313

 Asset-specific allowance
 —
 9,256
 —
 9,256
 —
 9,302

 Total allowance for credit losses
 $
 18,473
 $
 15,456
 $
 1,100
 $
 35,029
 $
 3,818
 $
 1,768
 $
 5,586
 $
 40,615

 Loans outstanding:(1)

 Collectively evaluated loans
 $
 29,258,741
 $
 5,869,401
 $
 $
 35,379,467
 $
 $
 573,008
 $
 1,651,771
 $
 37,031,238

 Individually evaluated loans
 3,754
 —
 29,853
 —
 2,457
 2,457
 32,310

 $
 $
 $
 $
 $
 $
 $
 $

 Allowance coverage ratios:

 Collective allowance coverage ratio(2)

 0.06
 %
 0.11
 %
 0.44
 %
 0.07
 %
 0.35
 %
 0.30
 %
 0.34
 %
 0.08
 %

 Asset-specific allowance coverage ratio(3)

 —
 35.46
 —
 31.01
 —
 1.87
 1.87
 28.79

 Total allowance coverage ratio(4)

 0.06
 0.26
 0.44
 0.10
 0.35
 0.31
 0.34
 0.11

 CFC
 Total

 Total

 Allowance components:

 Collective allowance
 $
 $
 8,676
 $
 1,189
 $
 25,819
 $
 3,937
 $
 1,800
 $
 5,737
 $
 31,556

 Asset-specific allowance
 —
 16,907
 —
 16,907
 —
 17,170

 Total allowance for credit losses
 $
 $
 25,583
 $
 1,189
 $
 42,726
 $
 3,937
 $
 2,063
 $
 6,000
 $

 Loans outstanding:(1)

 Collectively evaluated loans
 $
 27,100,254
 $
 5,593,229
 $
 $
 32,930,829
 $
 $
 595,567
 $
 1,541,447
 $
 34,472,276

 Individually evaluated loans
 4,209
 —
 52,878
 —
 3,030
 3,030
 55,908

 $
 $
 $
 $
 $
 $
 $
 $

 Allowance coverage ratios:

 Collective allowance coverage ratio(2)

 0.06
 %
 0.16
 %
 0.50
 %
 0.08
 %
 0.42
 %
 0.30
 %
 0.37
 %
 0.09
 %

 Asset-specific allowance coverage ratio(3)

 —
 34.74
 —
 31.97
 —
 8.68
 8.68
 30.71

 Total allowance coverage ratio(4)

 0.06
 0.45
 0.50
 0.13
 0.42
 0.34
 0.39
 0.14

 (1)Represents the unpaid principal amount of loans as of the end of each period. Excludes unamortized deferred loan origination costs of $ 16 million and $ 14 million as of May 31, 2025 and 2024, respectively.
 (2)Calculated based on the collective allowance component at period-end divided by collectively evaluated loans outstanding at period-end.
 (3)Calculated based on the asset-specific allowance component at period-end divided by individually evaluated loans outstanding at period-end.
 (4)Calculated based on the total allowance for credit losses at period-end divided by total loans outstanding at period-end.

 Our allowance for credit losses and allowance coverage ratio decreased to $ 41 million and 0.11 %, respectively, as of May 31, 2025, from $ 49 million and 0.14 %, respectively, as of May 31, 2024. The $ 8 million decrease in the allowance for credit loss was attributable to a reduction in the asset-specific allowance due to higher actual than expected payments received on a nonperforming loan during FY2025. Our collective allowance decreased slightly during FY2025, primarily due to an improved recovery rate on our power supply loan portfolio, partially offset by an increase attributable to loan portfolio growth.

 Reserve for Credit Losses—Unadvanced Loan Commitments

 In addition to the allowance for credit losses for our loan portfolio, we maintain an allowance for credit losses for unadvanced loan commitments, which we refer to as our "reserve for credit losses" because this amount is reported as a component of other liabilities on our consolidated balance sheets. We measure the reserve for credit losses for unadvanced loan commitments based on expected credit losses over the contractual period of our exposure to credit risk arising from our obligation to extend credit, unless that obligation is unconditionally cancellable by us. The reserve for credit losses related to our off-balance sheet exposure for unadvanced loan commitments was less than $ 1 million as of both May 31, 2025 and 2024.

 NOTE 6—SHORT-TERM BORROWINGS

 Short-term borrowings consist of borrowings with an original contractual maturity of one year or less and do not include the current portion of long-term debt. Our short-term borrowings totaled $ 5,091 million and accounted for 15 % of total debt outstanding as of May 31, 2025, compared with $ 4,333 million, or 13 % of total debt outstanding, as of May 31, 2024. The following table provides information on our short-term borrowings and weighted-average interest rates as of May 31, 2025 and 2024.

 Table 6.1: Short-Term Borrowing Sources and Weighted-Average Interest Rates

 2025
 2024

 Short-term borrowings:

 Commercial paper:

 Commercial paper sold through dealers, net of discounts
 $
 2,206,451
 4.47
 %
 $
 504,631
 5.41
 %

 Commercial paper sold directly to members, at par
 785,608
 3.98
 1,158,020
 5.08

 Total commercial paper
 2,992,059
 4.34
 1,662,651
 5.18

 Select notes to members
 1,304,240
 4.22
 1,274,066
 5.36

 Daily liquidity fund notes to members
 343,916
 3.75
 375,191
 4.60

 Medium-term notes sold to members

 451,201
 4.62
 520,782
 5.79

 Farmer Mac notes payable(1)

 —
 —
 5.87

 Total short-term borrowings

 $
 4.30
 $
 5.34

 (1) Advanced under the revolving note purchase agreement with Farmer Mac dated March 24, 2011. See "Note 7—Long-Term Debt" in this Report for additional information on this revolving note purchase agreement with Farmer Mac.

 We issue commercial paper for periods of one to 270 days. We also issue select notes for periods ranging from 30 to 270 days. Select notes are unsecured obligations that do not require backup bank lines of credit for liquidity purposes. These

 notes also require a larger minimum investment than our commercial paper sold to members. Daily liquidity fund notes are unsecured obligations that do not require backup bank lines of credit for liquidity purposes. Medium-term notes represent unsecured obligations that may be issued through dealers in the capital markets or directly to our members.

 Committed Bank Revolving Line of Credit Agreements

 The following table presents the amount available for access under our bank revolving line of credit agreements as of May 31, 2025.

 Table 6.2: Committed Bank Revolving Line of Credit Agreement Available Amounts

 Total Commitment
 Letters of Credit Outstanding
 Available Amount
 Maturity
 Annual Facility Fee(1)

 Bank revolving agreements:

 3 -year agreement

 $
 1,595
 $
 —
 $
 1,595
 November 28, 2027
 7.5 bps

 Total 3 -year agreement

 1,595
 —
 1,595

 4 -year agreement

 —
 November 28, 2026
 10.0 bps

 4 -year agreement

 1,555
 1,548
 November 28, 2028
 10.0 bps

 Total 4 -year agreement

 1,705
 1,698

 Total
 $
 3,300
 $
 $
 3,293

 (1)Facility fee determined by CFC's senior unsecured credit ratings based on the pricing schedules put in place at the inception of the related agreement.

 On December 5, 2024, we amended our three-year and four-year committed bank revolving line of credit agreements to extend the maturity dates to November 28, 2027 and November 28, 2028, respectively, and to increase commitments by $ 250 million (excluding the $ 150 million commitment termination described below) under each of the three-year and four-year revolving credit agreements. Commitments of $ 150 million that were scheduled to mature on November 28, 2025 were terminated under the three-year revolving credit agreement, and commitments of $ 150 million will continue to expire at the prior maturity date of November 28, 2026 under the four-year revolving credit agreement.

 The total commitment amount under the three-year facility and the four-year facility was $ 1,595 million and $ 1,705 million, respectively, resulting in a combined total commitment amount under the two facilities of $ 3,300 million as of May 31, 2025. We did not have any outstanding borrowings under our committed bank revolving line of credit agreements as of May 31, 2025; however, we had letters of credit outstanding of $ 7 million under the four-year committed bank revolving agreement as of this date. These agreements allow us to request up to $ 300 million of letters of credit, which, if requested, results in a reduction in the total amount available for our use. We were in compliance with all covenants and conditions under the agreements as of May 31, 2025.

 NOTE 7—LONG-TERM DEBT

 The following table displays, by debt product type, long-term debt outstanding, the weighted-average interest rates and the maturity date as of May 31, 2025 and 2024. Long-term debt outstanding totaled $ 27,164 million and accounted for 78 % of total debt outstanding as of May 31, 2025, compared with $ 25,901 million and 79 % of total debt outstanding as of May 31, 2024. Long-term debt with fixed and variable interest rates accounted for 94 % and 6 %, respectively, of our total long-term debt outstanding as of May 31, 2025, compared with 93 % and 7 %, respectively, of our total long-term debt outstanding as of May 31, 2024.

 Table 7.1: Long-Term Debt—Debt Product Types and Weighted-Average Interest Rates

 2025
 2024

 Maturity(1)

 Maturity(1)

 Secured long-term debt:

 Collateral trust bonds(2)

 $
 7,082,711
 3.68
 %
 2025-2049
 $
 6,937,711
 3.49
 %
 2025-2049

 Unamortized discount, net
 ( 155,393)
 ( 166,458)

 Debt issuance costs
 ( 31,616)
 ( 31,332)

 Total collateral trust bonds
 6,895,702
 6,739,921

 6,456,852
 3.31
 2025-2055
 6,491,814
 3.27
 2025-2053

 3,780,461
 4.00
 2025-2049
 3,363,510
 4.11
 2025-2049

 Total secured notes payable
 10,237,313
 9,855,324

 Total secured long-term debt
 17,133,015
 3.61
 16,595,245
 3.53

 Unsecured long-term debt:

 Medium-term notes sold through dealers
 9,637,577
 4.64
 2025-2037
 8,980,513
 4.38
 2024-2037

 Medium-term notes sold to members
 419,648
 4.61
 2025-2037
 358,844
 4.80
 2024-2037

 Medium-term notes sold through dealers and to members
 10,057,225
 4.64
 9,339,357
 4.39

 Unamortized premium (discount), net
 2,641
 ( 2,209)

 Debt issuance costs
 ( 29,180)
 ( 31,228)

 Total unsecured long-term debt
 10,030,686
 4.64
 9,305,920
 4.39

 Total long-term debt
 $
 27,163,701
 3.99
 $
 25,901,165
 3.84

 (1)Maturity is presented based on calendar year.
 (2)Collateral trust bonds represent secured obligations sold to investors in the capital markets, including also those issued in a private placement transaction.

 The following table presents the principal amount of long-term debt maturing in each of the five fiscal years subsequent to May 31, 2025 and thereafter.

 Table 7.2: Long-Term Debt—Maturities and Weighted-Average Interest Rates

 Maturity Amount(1)

 2026
 $
 3,618,102
 3.95
 %

 2027
 3,551,556
 3.71

 2028
 3,697,251
 4.10

 2029
 2,831,978
 4.08

 2030
 2,608,140
 4.01

 11,070,222
 4.03

 Total
 $
 27,377,249
 3.99

 (1)Amounts presented are based on the face amount of debt outstanding as of May 31, 2025, and therefore do not include debt issuance costs
 and unamortized premium or discount.

 Secured Debt

 Long-term secured debt of $ 17,133 million and $ 16,595 million as of May 31, 2025 and 2024, respectively, represented 63 % and 64 % of total long-term debt outstanding as of each respective date. We were in compliance with all covenants and conditions under our secured debt indentures as of May 31, 2025 and 2024. We are required to pledge eligible mortgage notes in an amount at least equal to the outstanding balance of our secured debt. See "Note 4—Loans" in this Report for information on pledged collateral under our secured debt agreements.

 Collateral Trust Bonds

 Collateral trust bonds represent secured obligations sold to investors in the capital markets. Collateral trust bonds are secured by the pledge of mortgage notes or eligible securities in an amount at least equal to the principal balance of the bonds outstanding. We issued $ 350 million of 5.00 % fixed-rate collateral trust bonds due August 15, 2034 and repaid $ 505 million in principal amount of collateral trust bonds that matured during FY2025. In addition, we issued an aggregate amount of $ 300 million in collateral trust bonds at a fixed rate of 5.23 % with a weighted average term of 13.3 years in a private placement transaction during FY2025.

 Guaranteed Underwriter Program Notes Payable

 We borrowed $ 300 million and repaid $ 335 million of notes payable outstanding under the Guaranteed Underwriter Program of the USDA (the "Guaranteed Underwriter Program") during FY2025. We had up to $ 1,350 million available for access under the Guaranteed Underwriter Program as of May 31, 2025.

 On December 18, 2024, we closed on a $ 450 million Series V committed loan facility from the U.S. Treasury Department's Federal Financing Bank ("FFB") under the Guaranteed Underwriter Program. Pursuant to this facility, we may borrow any time before July 15, 2029. Each advance is subject to quarterly amortization and a final maturity not longer than 30 years from the date of the advance.

 The notes outstanding under the Guaranteed Underwriter Program contain a provision that if during any portion of the fiscal year, our senior secured credit ratings do not have at least two of the following ratings: (i) A3 or higher from Moody's, (ii) A- or higher from S&P, (iii) A- or higher from Fitch or (iv) an equivalent rating from a successor rating agency to any of the above rating agencies, we may not make cash patronage capital distributions in excess of 5 % of total patronage capital. We are required to pledge eligible distribution system or power supply system loans as collateral in an amount at least equal to the total principal amount of notes outstanding under the Guaranteed Underwriter Program.

 Farmer Mac Notes Payable

 We have a revolving note purchase agreement with Farmer Mac that allows us to borrow, repay and re-borrow funds at any time through maturity, provided the outstanding principal does not exceed the agreement limit. Each borrowing is documented with a pricing agreement setting forth the interest rate, maturity date and other terms. We may select a fixed or variable rate for each advance. On January 14, 2025, we amended our revolving note purchase agreement with Farmer Mac to increase the maximum borrowing availability to $ 6,500 million from $ 6,000 million, and extend the draw period from June 30, 2027 to January 14, 2030, with successive one-year renewals upon 60 days' notice by CFC, subject to approval by Farmer Mac and Farmer Mac Mortgage Securities Corporation. We borrowed an aggregate principal amount of $ 500 million and repaid $ 83 million in long-term notes under the Farmer Mac note purchase agreement during FY2025. As of May 31, 2025, $ 3,780 million was outstanding with $ 2,720 million available for borrowing. We are required to pledge

 eligible electric distribution system or electric power supply system loans as collateral in an amount at least equal to the total principal amount of notes outstanding under this agreement.

 Unsecured Debt

 Long-term unsecured debt of $ 10,031 million and $ 9,306 million as of May 31, 2025 and 2024, respectively, represented 37 % and 36 % of total long-term debt outstanding as of each respective date.

 Medium-Term Notes

 Medium-term notes represent unsecured obligations that may be issued through dealers in the capital markets or directly to our members. During FY2025, we issued an aggregate principal amount of dealer medium-term notes totaling $ 1,800 million at an average fixed interest rate of 4.65 % with an average term of four years, and an aggregate principal amount of dealer medium-term notes totaling $ 600 million at floating interest rates with an average term of two years. We repaid $ 1,753 million in principal amount of dealer medium-term notes that matured during FY2025. Subsequent to FY2025, we issued $ 525 million of dealer medium-term notes at a floating interest rate with a term of 18 months.

 NOTE 8—SUBORDINATED DEFERRABLE DEBT

 Subordinated deferrable debt represents long-term debt that is subordinated to all debt other than subordinated certificates held by our members. The following table presents, by issuance, subordinated deferrable debt outstanding and the weighted-average interest rates as of May 31, 2025 and 2024.

 Table 8.1: Subordinated Deferrable Debt Outstanding and Weighted-Average Interest Rates

 2025
 2024
 Maturity and Call Dates

 Term
 in Years

 Maturity(2)

 Call Date

 Issuances of subordinated notes:

 Variable rate issuance 2013

 $
 7.45
 %
 $
 8.50
 %
 2043
 April 30, 2023(1)

 5.25 % issuance 2016

 350,000
 5.25
 350,000
 5.25
 2046
 April 20, 2026(1)

 5.50 % issuance 2019

 250,000
 5.50
 250,000
 5.50
 2064
 May 15, 2024(1)

 7.125 % issuance 2023

 7.13
 7.13
 2053
 June 15, 2028

 7.125 % issuance 2024

 7.13
 7.13
 2053

 June 15, 2028

 Subordinated notes

 43,811
 5.75
 —
 —
 2054-2055

 Various(3)

 Total aggregate principal amount
 1,343,811
 1,300,000

 Unamortized premium

 3,450
 3,488

 Debt issuance costs

 ( 17,776)
 ( 16,627)

 Total subordinated deferrable debt
 $
 1,329,485
 6.36
 $
 1,286,861
 6.63

 (1)At any time on or after the call date, the subordinated deferrable debt is redeemable, in whole or in part, at par.
 (2)Maturity is presented based on calendar year.
 (3)The subordinated notes may be called, in whole or in part, at par on or after five years from the date of the issuances.

 Our subordinated deferrable debt due 2043 is based on 3-month Term Secured Overnight Financing Rate ("SOFR") plus the Alternative Reference Rates Committee ("ARRC") recommended credit spread adjustment of 26.161 basis points plus 2.91 % as of May 31, 2025. The interest on the debt is paid quarterly, and the payment of interest can be deferred for one or more consecutive interest periods not exceeding five consecutive years.

 Our 5.25 % subordinated deferrable debt due 2046 pays interest semiannually, may be called at par 10 years after the issuance, will convert to a variable rate in April 2026 based on 3-month Term SOFR plus the ARRC recommended credit spread adjustment of 26.161 basis points plus 3.63 %, and allows us to defer the payment of interest for one or more consecutive interest periods not exceeding five consecutive years.

 Our 5.50 % subordinated deferrable debt due 2064 pays interest quarterly, may be called at par five years after the issuance and allows us to defer the payment of interest for one or more consecutive interest periods not exceeding 40 consecutive quarterly periods.

 Our two issuances of 7.125 % subordinated deferrable debt due 2053 pay interest semiannually, may be called at par every five years after the issuances, reset to a new fixed rate every five years based on the five-year U.S. Treasury rate plus a spread of 3.533 % and allow us to defer the payment of interest for one or more consecutive interest periods not exceeding 20 consecutive semiannual periods.

 Subordinated Notes

 On November 1, 2024, we entered into an agency agreement with InspereX LLC, Citigroup Global Markets Inc., RBC Capital Markets, LLC and Wells Fargo Clearing Services, LLC, as agents, to launch a program through which we may offer and sell, from time to time, an unlimited aggregate principal amount of our subordinated deferrable interest notes ("subordinated notes"). On November 1, 2024, we filed a prospectus supplement with the SEC related to these subordinated notes, which are issued under our effective shelf registration statement filed with the SEC in October 2023.

 The subordinated notes are unsecured and rank subordinate in right of payment to all of our current and future senior indebtedness. The subordinated notes are senior to our members' subordinated certificates and rank equal in right of payment and upon liquidation to our outstanding subordinated deferrable debt and any other equally ranked subordinated notes we may issue. The subordinated notes may be called, in whole or in part, at par on or after five years from the date of the issuance and allow us to defer the payment of interest for one or more consecutive interest periods not exceeding 20 consecutive semiannual periods, or 40 consecutive quarterly periods.

 During FY2025, we issued an aggregate principal amount of $ 44 million in subordinated notes that mature in 30 years under this new program.

 To date, we have not exercised our right to defer interest payments on any of our subordinated deferrable debt.

 NOTE 9—MEMBERS' SUBORDINATED CERTIFICATES

 Membership Subordinated Certificates

 Prior to June 2009, CFC members were required to purchase membership subordinated certificates as a condition of membership. Such certificates are interest-bearing, unsecured, subordinated debt. Membership certificates typically have an original maturity of 100 years and pay interest at 5 % semiannually. No requirement to purchase membership certificates has existed for NCSC.

 Loan and Guarantee Subordinated Certificates

 Members obtaining long-term loans, certain line of credit loans or guarantees may be required to purchase additional loan or

 guarantee subordinated certificates with each such loan or guarantee based on the borrower's debt-to-equity ratio with CFC. These certificates are unsecured, subordinated debt and may be interest bearing or non-interest bearing.

 Under our current policy, most borrowers requesting standard loans are not required to buy subordinated certificates or guarantee subordinated certificates as a condition of a loan or guarantee. Borrowers meeting certain criteria, including but not limited to, high leverage ratios, or borrowers requesting large facilities, may be required to purchase loan or guarantee subordinated certificates or member capital securities (described below) as a condition of the loan. Loan subordinated certificates have the same maturity as the related long-term loan. Some certificates may amortize annually based on the outstanding loan balance.

 The interest rates payable on guarantee subordinated certificates purchased in conjunction with our guarantee program vary in accordance with applicable CFC policy. Guarantee subordinated certificates have the same maturity as the related guarantee.

 Member Capital Securities

 CFC offers member capital securities to its voting members. Member capital securities are interest-bearing, unsecured obligations of CFC, which are subordinate to all existing and future senior and subordinated indebtedness of CFC held by nonmembers of CFC, but rank proportionally to our member subordinated certificates. Member capital securities mature 30 years from the date of issuance and are callable at par at our option five years from the date of issuance and anytime thereafter. The interest rate for new member capital securities issuance is set at the time of issuance. These securities represent voluntary investments in CFC by the members. Member capital securities issued prior to FY2023 have a call option of 10 years from the date of issuance and anytime thereafter. The following table displays members' subordinated certificates and the weighted-average interest rates as of May 31, 2025 and 2024.

 Table 9.1: Members' Subordinated Certificates Outstanding and Weighted-Average Interest Rates

 2025
 2024

 Amounts
 Amounts

 Membership subordinated certificates:

 Certificates maturing 2025 through 2119
 $
 628,617
 $
 628,617

 Subscribed and unissued(1)

 Total membership subordinated certificates
 628,637
 4.96
 %
 628,625
 4.96
 %

 Loan and guarantee subordinated certificates:

 Interest-bearing loan subordinated certificates maturing through 2045
 192,779
 201,017

 Non-interest-bearing loan subordinated certificates maturing through 2047
 90,378
 94,911

 Total loan subordinated certificates
 283,157
 2.74
 295,928
 2.76

 Interest-bearing guarantee subordinated certificates maturing through 2044
 26,757
 5.93
 26,935
 5.92

 Total loan and guarantee subordinated certificates
 309,914
 3.02
 322,863
 3.02

 Member capital securities:

 Securities maturing through 2052
 5.01
 5.01

 Total members' subordinated certificates
 $
 4.46
 $
 4.44

 (1)The subscribed and unissued subordinated certificates represent subordinated certificates that members are required to purchase. Upon collection of full payment of the subordinated certificate amount, the certificate will be reclassified from subscribed and unissued to outstanding.

 The weighted-average maturity for all membership subordinated certificates outstanding was 52 and 53 years as of May 31, 2025 and 2024, respectively. The following table presents the amount of members' subordinated certificates maturing in each of the five fiscal years subsequent to May 31, 2025 and thereafter.

 Table 9.2: Members' Subordinated Certificate Maturities and Weighted-Average Interest Rates

 Maturing(1)

 2026
 $
 60,782
 3.26
 %

 2027
 4,642
 3.39

 2028
 4,752
 3.41

 2029
 6,392
 2.44

 2030
 4,303
 3.78

 1,103,823
 4.55

 Total
 $
 1,184,694
 4.46

 (1)Excludes $ 0.02 million in subscribed and unissued member subordinated certificates for which a payment has been received, but no certificate has been issued. Amortizing member loan subordinated certificates totaling $ 124 million are amortizing annually based on the unpaid principal balance of the related loan. Amortization payments on these certificates totaled $ 8 million in FY2025 and represented 6 % of amortizing loan subordinated certificates outstanding.

 NOTE 10—DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

 We are an end user of derivative financial instruments and do not engage in derivative trading. Derivatives may be privately negotiated contracts, which are often referred to as OTC derivatives, or they may be listed and traded on an exchange. We generally engage in OTC derivative transactions. Our derivative instruments are an integral part of our interest rate risk-management strategy. Our principal purpose in using derivatives is to manage our aggregate interest rate risk profile within prescribed risk parameters. The derivative instruments we use primarily consist of interest rate swaps, which we typically hold to maturity. In addition, we may use treasury locks to manage the interest rate risk associated with future debt issuance or debt that is scheduled to reprice in the future. We typically designate the treasury locks as cash flow hedges.

 Notional Amount and Maturities of Derivatives Not Designated as Accounting Hedges

 The notional amount is used only as the basis on which interest payments are determined and is not the amount exchanged, nor recorded on our consolidated balance sheets. The following table shows, by derivative instrument type, the notional amount, the weighted-average rate paid and the weighted-average interest rate received for our interest rate swaps as of May 31, 2025 and 2024. For the substantial majority of interest rate swap agreements, SOFR is used as the basis for determining variable interest payment amounts each period.

 Table 10.1: Derivative Notional Amount and Weighted-Average Rates

 2025
 2024

 Notional
Rate Paid
Rate Received
 Notional
Rate Paid
Rate Received

 Pay-fixed swaps
 $
 5,833,458
 2.84
 %
 4.54
 %
 $
 5,842,540
 2.77
 %
 5.57
 %

 Receive-fixed swaps
 1,418,777
 5.08
 3.39
 1,523,396
 6.08
 3.33

 Total interest rate swaps
 $
 7,252,235
 3.28
 4.32
 $
 7,365,936
 3.46
 5.10

 The following table presents the notional amount of our interest rate swaps maturing in each of the five fiscal years subsequent to May 31, 2025 and thereafter.

 Table 10.2: Derivative Notional Amount Maturities

 Notional Amount
 Notional Amortization and Maturities

 2026
 2027
 2028
 2029
 2030

 $ 7,252,235
 $ 1,075,091
 $ 611,427
 $ 607,997
 $ 700,907
 $ 339,338
 $ 3,917,475

 Cash Flow Hedges

 During FY2025, we executed five treasury lock agreements with an aggregate notional amount of $ 700 million to hedge interest rate risk on anticipated debt issuances. We terminated the treasury locks upon the pricing of the debt issuances and recorded a net gain of $ 1 million in AOCI, which is reclassified into interest expense over the terms of the related debt.

 During FY2024, we executed two treasury lock agreements with an aggregate notional amount of $ 300 million to hedge interest rate risk on anticipated debt issuances. We terminated the treasury locks upon the pricing of the anticipated debt and recorded a net settlement gain of less than $ 1 million in AOCI during FY2024, which is reclassified into interest expense over the term of the related debt.

 During FY2023, we executed two treasury lock agreements with an aggregate notional amount of $ 300 million to hedge interest rate risk on anticipated debt issuances. We recorded a settlement gain of $ 8 million in AOCI upon the termination of the treasury locks during FY2023. 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) in our consolidated statements of operations in FY2024.

 We did not have any derivatives designated as accounting hedges as of May 31, 2025 and 2024.

 Impact of Derivatives on Consolidated Balance Sheets

 The following table displays the fair value of the derivative assets and derivative liabilities, by derivatives type, recorded on our consolidated balance sheets and the related outstanding notional amount as of May 31, 2025 and 2024.

 Table 10.3: Derivative Assets and Liabilities at Fair Value

 2025
 2024

 Fair Value
 Notional Amount

 Fair Value
 Notional Amount

 Derivative assets:

 $
 $
 5,694,835
 $
 $
 5,770,691

 Total derivative assets
 $
 $
 5,694,835
 $
 $
 5,770,691

 Derivative liabilities:

 $
 $
 1,557,400
 $
 $
 1,595,245

 Total derivative liabilities
 $
 $
 1,557,400
 $
 $
 1,595,245

 All of our master swap agreements include netting provisions that allow for offsetting of all contracts with a given counterparty in the event of default by one of the two parties. However, we report derivative asset and liability amounts on a gross basis by individual contract. The following table presents the gross fair value of derivative assets and liabilities reported on our consolidated balance sheets as of May 31, 2025 and 2024, and provides information on the impact of netting provisions under our master swap agreements and collateral pledged, if any.

 Table 10.4: Derivative Gross and Net Amounts

of Recognized
Assets/ Liabilities
Offset in the
 Net Amount of Assets/ Liabilities
Presented
in the
Not Offset in the

 Financial
Instruments
 Cash
Collateral
Pledged
 Net

 Derivative assets:

 $
 $
 —
 $
 $
 49,806
 $
 —
 $
 506,049

 Derivative liabilities:

 —
 49,806
 —
 1,562

of Recognized
Assets/ Liabilities
Offset in the
 Net Amount of Assets/ Liabilities
Presented
in the
Not Offset in the

 Financial
Instruments
 Cash
Collateral
Pledged
 Net

 Derivative assets:

 $
 $
 —
 $
 $
 80,026
 $
 —
 $
 611,223

 Derivative liabilities:

 —
 80,026
 —

 Impact of Derivatives on Consolidated Statements of Operations

 The primary factors affecting the fair value of our derivatives and the derivative gains (losses) recorded in our consolidated statements of operations include changes in interest rates, the shape of the swap curve and the composition of our derivative

 portfolio. We generally record derivative losses when interest rates decline and derivative gains when interest rates rise, as our derivative portfolio consists of a higher proportion of pay-fixed swaps than receive-fixed swaps.

 The following table presents the components of the derivative gains (losses) reported 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 reporting period due to changes in expected future interest rates over the remaining life of our derivative contracts. We classify the derivative cash settlement amounts for the net periodic contractual interest expense on our interest rate swaps as an operating activity in our consolidated statements of cash flows.

 Table 10.5: Derivative Gains (Losses)

 2025
 2024
 2023

 Derivative gains (losses) attributable to:

 $
 $
 $

 Derivative forward value gains (losses)

 Derivative gains (losses)

 $
 $
 $

 Credit Risk-Related Contingent Features

 Our derivative contracts typically contain mutual early-termination provisions, generally in the form of a credit rating trigger. Under the mutual credit rating trigger provisions, either counterparty may, but is not obligated to, terminate and settle the agreement if the credit rating of the other counterparty falls below a level specified in the agreement. If a derivative contract is terminated, the amount to be received or paid by us would be equal to the prevailing fair value, as defined in the agreement, as of the termination date.

 During FY2025, Moody's, S&P and Fitch affirmed CFC's credit ratings and stable outlook. Our senior unsecured credit ratings from Moody's, S&P and Fitch were A2, A- and A, respectively, as of May 31, 2025. Moody's, S&P and Fitch had our ratings on stable outlook as of May 31, 2025. Our credit ratings and outlook remain unchanged as of the date of this Report.

 The following table displays the notional amounts of our derivative contracts with rating triggers as of May 31, 2025, and the payments that would be required if the contracts were terminated as of that date because of a downgrade of our unsecured credit ratings or the counterparty's unsecured credit ratings below A3/A-, below Baa1/BBB+, to or below Baa2/BBB, or to or below Ba2/BB+ by Moody's or S&P, respectively. In calculating the payment amounts that would be required upon termination of the derivative contracts, we assume that amounts for each counterparty would be netted in accordance with the provisions of the master netting agreements with the counterparty. The net payment amounts are based on the fair value of the underlying derivative instrument, excluding the credit risk valuation adjustment, plus any unpaid accrued interest amounts.

 Table 10.6: Derivative Credit Rating Trigger Exposure

 Notional
 Payable Due from CFC
 Receivable Due to CFC
 Net Receivable (Payable)

 Impact of rating downgrade trigger:

 Falls below A3/A-(1)

 $
 19,890
 $
 ( 663)
 $
 —
 $
 ( 663)

 Falls below Baa1/BBB+
 4,808,258
 ( 969)
 334,307
 333,338

 Falls to or below Baa2/BBB(2)

 334,723
 —
 22,257
 22,257

 Total
 $
 5,162,871
 $
 ( 1,632)
 $
 356,564
 $
 354,932

 (1)Rating trigger for CFC falls below A3/A-, while rating trigger for counterparty falls below Baa1/BBB+ by Moody's or S&P, respectively.
 (2)Rating trigger for CFC falls to or below Baa2/BBB, while rating trigger for counterparty falls to or below Ba2/BB+ by Moody's or S&P, respectively.

 We have interest rate swaps with one counterparty that are subject to a ratings trigger and early termination provision in the event of a downgrade of CFC's senior unsecured credit ratings below Baa3, BBB- or BBB- by Moody's, S&P or Fitch, respectively. The outstanding notional amount of these swaps, which is not included in the above table, totaled $ 383 million as of May 31, 2025. These swaps were in an unrealized gain position of $ 38 million as of May 31, 2025.

 The aggregate fair value amount, including the credit valuation adjustment, of all interest rate swaps with rating triggers that were in a net liability position was $ 2 million as of May 31, 2025.

 Derivative Counterparty Credit Exposure

 Our interest rate swap contracts are subject to credit risk associated with counterparties to these derivative contracts. As mentioned above, we generally engage in OTC derivative transactions, which expose us to individual counterparty credit risk because these transactions are executed and settled directly between us and each counterparty. To manage this risk, we diversify our derivative positions among counterparties with investment-grade credit ratings, perform an internal credit risk analysis and maintain enforceable master netting arrangements, allowing us to net derivative assets and liabilities with the same counterparty. The fair value of our derivatives includes credit valuation adjustments reflecting counterparty credit risk.

 We had 12 active derivative counterparties with credit ratings ranging from Aa1 to Baa1 by Moody's as of both May 31, 2025 and 2024, and from AA- to BBB+ by S&P as of both May 31, 2025 and 2024. Our largest counterparty exposure, based on the outstanding notional amount, accounted for approximately 25 % and 24 % of the total outstanding notional amount of our derivatives as of May 31, 2025 and 2024, respectively. We believe our exposure to derivative counterparty risk, at any point in time, is equal to the amount of our outstanding derivatives in a net gain position, at the individual counterparty level based on the legally enforceable netting provisions under our master swap agreements, which totaled $ 506 million and $ 611 million as of May 31, 2025 and 2024, respectively, as presented in Table 10.4 above.

 NOTE 11—EQUITY

 Total equity increased by $ 91 million to $ 3,103 million as of May 31, 2025 compared with May 31, 2024. The increase was attributable primarily to our reported net income of $ 140 million for FY2025, partially offset by a decrease in equity of $ 47 million from the CFC Board of Directors' authorized patronage capital retirements during the period, as discussed below.

 Table 11.1: Equity

 2025
 2024

 Membership fees and educational fund:

 Membership fees
 $
 $

 Educational fund
 2,658
 2,608

 Total membership fees and educational fund
 3,624
 3,576

 Patronage capital allocated
 948,526
 928,232

 Members' capital reserve
 1,631,609
 1,455,564

 Unallocated net income:

 Prior fiscal year-end cumulative derivative forward value gains(1)

 342,624

 Current fiscal year derivative forward value gains (losses)(1)

 ( 104,552)
 263,591

 Current fiscal year-end cumulative derivative forward value gains(1)

 501,663

 Other unallocated net loss
 ( 709)
 ( 709)

 Unallocated net income

 500,954
 605,506

 CFC retained equity
 3,084,713
 2,992,878

 ( 2,236)

 Total CFC equity

 Noncontrolling interests
 20,989
 20,707

 $
 $

 (1) Represents derivative forward value gains (losses) for CFC only, as total CFC equity does not include the noncontrolling interests of the consolidated variable interest entities. See "Note 16—Business Segments" for the statements of operations for CFC.

 Allocation of Net Earnings and Retirement of Patronage Capital—CFC

 District of Columbia cooperative law requires cooperatives to allocate net earnings to patrons, to a general reserve in an amount sufficient to maintain a balance of at least 50 % of paid-in capital and to a cooperative educational fund, as well as permits additional allocations to board-approved reserves. District of Columbia cooperative law also requires that a cooperative's net earnings be allocated to all patrons in proportion to their individual patronage, and each patron's allocation be distributed to the patron unless the patron agrees that the cooperative may retain its share as additional capital.

 Annually, the CFC Board of Directors allocates its net earnings to its patrons in the form of patronage capital, to a cooperative educational fund, to a general reserve, if necessary, and to board-approved reserves. An allocation to the general reserve is made, if necessary, to maintain the balance of the general reserve at 50 % of the membership fees collected. The general reserve is included in the patronage capital allocated component of CFC's retained equity. CFC's bylaws require the allocation to the cooperative educational fund to be at least 0.25 % of its net earnings. Funds from the cooperative educational fund are disbursed annually to statewide cooperative organizations to fund the teaching of cooperative principles and for other cooperative education programs.

 Currently, CFC has one additional board-approved reserve, the members' capital reserve. The CFC Board of Directors determines the amount of net earnings that is allocated to the members' capital reserve, if any. The members' capital reserve represents net earnings that CFC holds to increase equity retention. The net earnings held in the members' capital reserve have not been specifically allocated to members, but may be allocated to individual members in the future as patronage capital if authorized by the CFC Board of Directors.

 All remaining net earnings are allocated to CFC's members in the form of patronage capital. The amount of net earnings allocated to each member is based on the member's patronage of CFC's lending programs during the year. No interest is earned by members on allocated patronage capital. There is no effect on CFC's total equity as a result of allocating net earnings to members in the form of patronage capital or to board-approved reserves. The CFC Board of Directors has voted annually to retire a portion of the patronage capital allocation. Upon retirement, patronage capital is paid out in cash to the members to whom it was allocated. CFC's total equity is reduced by the amount of patronage capital retired to its members and by amounts disbursed from board-approved reserves. CFC's net earnings for determining allocations are based on CFC's non-GAAP adjusted net income, which excludes the impact of derivative forward value gains (losses).

 The current policy of the CFC Board of Directors is to retire 50 % of the prior year's allocated patronage capital and hold the remaining 50 % for 25 years. The retirement amount and timing is subject to annual approval by the CFC Board of Directors.

 In May 2025, the CFC Board of Directors authorized the allocation of $ 1 million of net earnings for FY2025 to the cooperative educational fund. In July 2025, the CFC Board of Directors authorized the allocation of net earnings for FY2025 as follows: $ 67 million to members in the form of patronage capital and $ 176 million to the members' capital reserve. See "Item 7. MD&A—Non-GAAP Financial Measures" for information on adjusted net income.

 In July 2025, the CFC Board of Directors also authorized the retirement of allocated net earnings totaling $ 53 million, of which $ 34 million represented 50 % of the patronage capital allocation for FY2025 and $ 19 million represented the portion of the allocation from net earnings for fiscal year 2000 that had been held for 25 years pursuant to the CFC Board of Directors' policy. We expect to return the authorized patronage capital retirement amount of $ 53 million to members in cash in the second quarter of fiscal year 2026. The remaining portion of the patronage capital allocation for FY2025 will be retained by CFC for 25 years pursuant to the guidelines adopted by the CFC Board of Directors in June 2009.

 In May 2024, the CFC Board of Directors authorized the allocation of $ 1 million of net earnings for FY2024 to the cooperative educational fund. In July 2024 the CFC Board of Directors authorized the allocation of net earnings for FY2024 as follows: $ 61 million to members in the form of patronage capital and $ 228 million to the members' capital reserve. In July 2024, the CFC Board of Directors also authorized the retirement of allocated net earnings totaling $ 47 million, of which $ 30 million represented 50 % of the patronage capital allocation for FY2024 and $ 17 million represented the portion of the allocation from net earnings for fiscal year 1999 that had been held for 25 years pursuant to the CFC Board of Directors' policy. The authorized patronage capital retirement amount of $ 47 million was returned to members in cash in September 2024. The remaining portion of the amount allocated for FY2024 will be retained by CFC for 25 years under current guidelines adopted by the CFC Board of Directors in June 2009.

 In connection with the RTFC sale transaction, the CFC Board of Directors approved the early retirement of $ 66 million of allocated but unretired CFC patronage capital to RTFC at a discounted amount of $ 41 million, which was paid from CFC to RTFC in December 2023 and the remaining $ 25 million was allocated to the CFC members' capital reserve during FY2024. Following the closing of the RTFC sale transaction on December 1, 2023, CFC concluded that it is no longer a primary beneficiary of RTFC, and accordingly, deconsolidated RTFC from its consolidated financial statements.

 Future allocations and retirements of net earnings may be made annually as determined by the CFC Board of Directors with due regard for its financial condition. The CFC Board of Directors has the authority to change the current practice for allocating and retiring net earnings at any time, subject to applicable laws and regulations. During FY2024, the CFC Board of Directors approved a change in the allocation of net earnings that would allow us to retain additional earnings and help in effectively managing our debt-to-equity ratio. As a result of this change, we retained a higher percentage of net earnings for FY2024 in the members' capital reserve, compared with FY2023.

 CFC's total equity includes noncontrolling interests, which consists of 100 % of the equity of NCSC, as the members of NCSC own or control 100 % of the interests in NCSC. NCSC also allocates annual net earnings, subject to approval by its board of directors. The allocation of net earnings by NCSC to board-approved reserves does not affect noncontrolling interests; however, the cash disbursements from board-approved reserves results in a reduction to noncontrolling interests.

 Allocation of Net Earnings—NCSC

 NCSC's bylaws require that it allocate at least 0.25 % of its net earnings to a cooperative educational fund and an amount to the general reserve required to maintain the general reserve balance at 50 % of membership fees collected. Funds from the cooperative educational fund are disbursed annually to fund the teaching of cooperative principles and for other cooperative education programs.

 Accumulated Other Comprehensive Income (Loss)

 The following table presents, by component, changes in AOCI for the years ended May 31, 2025 and 2024 and the balance of each component as of the end of each respective period.

 Table 11.2: Changes in Accumulated Other Comprehensive Income (Loss)

 2025
 2024

 Unrealized Gains on Derivative Hedges(1)

 Unrealized Losses on Defined Benefit Plans(2)

 Total
 Unrealized Gains on Derivative Hedges(1)

 Unrealized Losses on Defined Benefit Plans(2)

 Total

 Beginning balance
 $
 3,287
 $
 ( 4,703)
 $
 $
 11,102
 $
 ( 2,759)
 $
 8,343

 Changes in unrealized gains (losses)
 ( 850)
 ( 47)
 ( 2,156)
 ( 1,673)

 Realized (gains) losses reclassified to earnings
 ( 1,155)
 ( 773)
 ( 8,298)
 ( 8,086)

 Ending balance
 $
 2,935
 $
 ( 5,171)
 $
 ( 2,236)
 $
 3,287
 $
 ( 4,703)
 $

 (1)Of the derivative gains reclassified to earnings, a portion is reclassified as a component of the derivative gains (losses) line item and the remainder is reclassified as a component of the interest expense line item in our consolidated statements of operations.
 (2)Reclassified to earnings as a component of the other non-interest expense line item presented in our consolidated statements of operations.

 We expect to reclassify realized net gains of less than $ 1 million attributable to derivative cash flow hedges from AOCI into earnings over the next 12 months.

 NOTE 12—EMPLOYEE BENEFITS

 National Rural Electric Cooperative Association ("NRECA") Retirement Security Plan

 CFC is a participant in the NRECA Retirement Security Plan ("the Retirement Security Plan"), a multiple-employer defined benefit pension plan. The employer identification number of the Retirement Security Plan is 53-0116145, and the plan number is 333. Plan information is available publicly through the annual Form 5500, including attachments. The Retirement Security Plan is a qualified plan in which all employees are eligible to participate upon completion of one year of service. Under this plan, participating employees are entitled to receive annually, under a 50 % joint and surviving spouse annuity, 1.70 % of the average of their five highest base salaries during their participation in the plan, multiplied by the number of years of participation in the plan.

 The risks of participating in the multiple-employer plan are different from the risks of single-employer plans due to the following characteristics of the plan:

 • Assets contributed to the multiple-employer plan by one participating employer may be used to provide benefits to employees of other participating employers.

 • If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
 • If CFC chooses to stop participating in the plan, CFC may be required to pay a withdrawal liability representing an amount based on the underfunded status of the plan.

 Because of the current funding status of the Retirement Security Plan, it is not subject to a certified zone status determination under the Pension Protection Act of 2006 ("PPA"). In April 2025, the Department of Labor issued guidance under the Setting Every Community Up for Retirement Enhancement ("SECURE") Act of 2022, which revised the methodology for reporting annual funding information for defined benefit pension plans. These changes became effective for plan years beginning after December 31, 2023. As a result, prior-year plan funding information has been restated to agree to the updated reporting requirements. Under the market-based reporting of plan assets and liabilities, the plan was more than 90 %, 80 % and 70 % funded as of December 31, 2024, 2023 and 2022, respectively. We made contributions to the Retirement Security Plan of $ 7 million, $ 6 million and $ 5 million in FY2025, FY2024 and FY2023, respectively. In each of these years, our contribution represented less than 5 % of total contributions made to the plan by all participating employers. Our contribution did not include a surcharge. CFC's expense is limited to the annual premium to participate in the Retirement Security Plan. Because it is a multiple-employer plan, there is no funding liability for CFC for the plan. There were no funding improvement plans, rehabilitation plans implemented or pending, and no required minimum contributions. There are no collective bargaining agreements in place that cover CFC's employees.

 Executive Benefit Restoration Plan

 We adopted a supplemental top-hat Executive Benefit Restoration ("EBR") Plan, effective January 1, 2015. The EBR Plan is a nonqualified, unfunded plan maintained by CFC to provide retirement benefits to a select group of executive officers whose compensation exceeds Internal Revenue Service limits for qualified defined benefit plans. There is a risk of forfeiture if participants leave the company prior to becoming fully vested in the EBR Plan. This plan included nine and seven participants as of May 31, 2025 and 2024, respectively.

 We recognized net periodic pension expense for this plan of approximately $ 1 million in each of FY2025, FY2024 and FY2023. The unfunded projected benefit obligation of this plan, which is included on our consolidated balance sheets as a component of other liabilities, was $ 8 million and $ 7 million as of May 31, 2025 and 2024, respectively. CFC made contributions to the plan of $ 1 million in each of FY2025, FY2024 and FY2023, for lump-sum settlement payments to fully vested participants of $ 1 million in each respective year. Unrecognized pension costs recorded in accumulated other comprehensive loss were $ 5 million as of both May 31, 2025 and 2024. We expect to amortize less than $ 1 million of the unrecognized pension costs as a component of our net periodic pension benefit expense in the fiscal year ended May 31, 2026.

 As a result of the settlement payments in FY2025, FY2024 and FY2023, we recognized a settlement loss of less than $ 1 million in each of FY2025, FY2024 and FY2023. The settlement losses are recorded as a component of non-interest expense in our consolidated statements of operations.

 Defined Contribution Plan

 CFC offers a 401(k) defined contribution savings program, the 401(k) Pension Plan, to all employees who have completed a minimum of 1,000 hours of service in either the first 12 consecutive months or first full calendar year of employment. We contribute an amount up to 2 % of an employee's salary each year for all employees participating in the program with a minimum 2 % employee contribution. We contributed approximately $ 1 million to the plan in each of FY2025, FY2024 and FY2023.

 NOTE 13—GUARANTEES

 We guarantee certain contractual obligations of our members so they may obtain various forms of financing. We use the same credit policies and monitoring procedures in providing guarantees as we do for loans and commitments. If a member system defaults on its obligation to pay debt service, then we are obligated to pay any required amounts under our guarantees. Meeting our guarantee obligations satisfies the underlying obligation of our member systems and prevents the exercise of remedies by the guarantee beneficiary based upon a payment default by a member system. In general, the member system is required to repay any amount advanced by us with interest, pursuant to the documents evidencing the member system's reimbursement obligation.

 The following table displays the notional amount of our outstanding guarantee obligations, by guarantee type and by member class, as of May 31, 2025 and 2024.

 Table 13.1: Guarantees Outstanding by Type and Member Class

 2025
 2024

 Guarantee type:

 Long-term tax-exempt bonds(1)

 $
 48,455
 $
 73,755

 Letters of credit(2)(3)

 978,492
 752,019

 Other guarantees
 183,659
 184,142

 Total
 $
 1,210,606
 $
 1,009,916

 CFC:

 $
 506,834
 $
 472,210

 599,766
 451,828

 Statewide and associate(4)

 43,442
 42,257

 CFC total
 1,150,042
 966,295

 NCSC electric

 60,564
 43,621

 Total
 $
 1,210,606
 $
 1,009,916

 (1)Represents the outstanding principal amount of long-term variable-rate guaranteed bonds.
 (2)Reflects our maximum potential exposure for letters of credit, which also includes interest due, if any.
 (3)Under a hybrid letter of credit facility, we had no commitment available that may be used for the issuance of letters of credit as of May 31, 2025. We had $ 30 million of commitments that may be used for the issuance of letters of credit as of May 31, 2024.
 (4)Includes CFC guarantees to NCSC telecom members totaling $ 42 million and $ 41 million as of May 31, 2025 and 2024, respectively.

 We had guarantees outstanding totaling $ 1,211 million and $ 1,010 million as of May 31, 2025 and 2024, respectively. Guarantees under which our right of recovery from our members was not secured totaled $ 781 million and $ 718 million and represented 65 % and 71 % of total guarantees as of May 31, 2025 and 2024, respectively. We were not required to perform pursuant to any of our guarantee obligations during FY2025 or FY2024.

 We guarantee debt issued in connection with the construction or acquisition of pollution control, solid waste disposal, industrial development and electric distribution facilities, classified as long-term tax-exempt bonds in the table above. We unconditionally guarantee to the holders or to trustees for the benefit of holders of these bonds the full principal, interest and in most cases, premium, if any, on each bond when due.

 Long-term tax-exempt bonds of $ 48 million and $ 74 million as of May 31, 2025 and 2024, respectively, consist of adjustable or variable-rate bonds that may be converted to a fixed rate as specified in the applicable indenture for each bond offering. We are unable to determine the maximum amount of interest that we may be required to pay related to the remaining adjustable and variable-rate bonds. Many of these bonds have a call provision that allows us to call the bond in the event of a default, which would limit our exposure to future interest payments on these bonds. Our maximum potential exposure generally is secured by mortgage liens on the members' assets and future revenue. If a member's debt is accelerated because of a determination that the interest thereon is not tax-exempt, the member's obligation to reimburse us for any guarantee payments will be treated as a long-term loan. The maturities for long-term tax-exempt bonds and the related guarantees extend through calendar year 2037.

 Of the outstanding letters of credit of $ 978 million and $ 752 million as of May 31, 2025 and 2024, respectively, $ 356 million and $ 194 million were secured as of each respective date. The maturities for the outstanding letters of credit as of May 31, 2025 extend through calendar year 2044.

 In addition to the outstanding letters of credit listed in the table above, under master letter of credit facilities in place as of May 31, 2025, we may be required to issue up to an additional $ 124 million in letters of credit to third parties for the benefit of our members. All of our master letter of credit facilities were subject to material adverse change clauses at the time of issuance as of May 31, 2025. Prior to issuing a letter of credit, we would confirm that there has been no material adverse change in the business or condition, financial or otherwise, of the borrower since the master letter of credit facility was approved and confirm that the borrower is currently in compliance with the terms and conditions of the agreement governing the facility.

 The maximum potential exposure for other guarantees was $ 184 million as of both May 31, 2025 and 2024, of which $ 25 million was secured as of both May 31, 2025 and 2024. The maturities for these other guarantees listed in the table above extend through calendar year 2025.

 In addition to the guarantees described above, we were also the liquidity provider for $ 48 million of variable-rate tax-exempt bonds as of May 31, 2025, issued for our member cooperatives. While the bonds are in variable-rate mode, in return for a fee, we have unconditionally agreed to purchase bonds tendered or put for redemption if the remarketing agents are unable to sell such bonds to other investors. We were not required to perform as liquidity provider pursuant to these obligations during FY2025, FY2024 or FY2023.

 Guarantee Liability

 We recorded a total guarantee liability for noncontingent and contingent exposures related to guarantees and liquidity obligations of $ 14 million and $ 16 million as of May 31, 2025 and 2024, respectively. The noncontingent guarantee liability, which pertains to our obligation to stand ready to perform over the term of our guarantees and liquidity obligations we have entered into or modified and accounts for the substantial majority of our guarantee liability, totaled $ 13 million and $ 15 million as of May 31, 2025 and 2024, respectively. The remaining amount pertains to our contingent guarantee exposures.

 The following table details the scheduled maturities of our outstanding guarantees in each of the five fiscal years following May 31, 2025 and thereafter:

 Table 13.2: Guarantees Outstanding Maturities

Maturing

 2026
 $
 711,398

 2027
 115,113

 2028
 172,505

 2029
 28,846

 2030
 7,054

 175,690

 Total
 $
 1,210,606

 NOTE 14—FAIR VALUE MEASUREMENT

 Fair value, also referred to as an exit price, is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value accounting guidance provides a three-level fair value hierarchy for classifying financial instruments. This hierarchy is based on the markets in which the assets or liabilities trade and whether the inputs to the valuation techniques used to measure fair value are observable or unobservable. The fair value measurement of a financial asset or liability is assigned a level based on the lowest level of any input that is significant to the fair value measurement in its entirety. The levels, in priority order based on the extent to which observable inputs are available to measure fair value, are Level 1, Level 2 and Level 3. The accounting guidance for fair value measurements requires that we maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. We describe the valuation technique for each level in "Note 1—Summary of Significant Accounting Policies."

 The following table presents the carrying value and estimated fair value of all of our financial instruments, including those carried at amortized cost, as of May 31, 2025 and 2024. The table also displays the classification level within the fair value hierarchy based on the degree of observability of the inputs used in the valuation technique for estimating fair value.

 Table 14.1: Fair Value of Financial Instruments

 Fair Value Measurement Level

 Carrying Value
 Fair Value
 Level 1
 Level 2
 Level 3

 Cash and cash equivalents
 $
 134,712
 $
 134,712
 $
 134,712
 $
 —
 $
 —

 Restricted cash
 8,410
 8,410
 8,410
 —
 —

 Equity securities, at fair value
 —
 —

 Debt securities trading, at fair value
 —
 —

 Deferred compensation investments
 8,019
 8,019
 8,019
 —
 —

 37,039,363
 34,113,178
 —
 —
 34,113,178

 Accrued interest receivable
 270,222
 270,222
 —
 270,222
 —

 Derivative assets
 —
 —

 Total financial assets
 $
 38,141,496
 $
 35,215,311
 $
 162,393
 $
 939,740
 $
 34,113,178

 $
 $
 5,094,451
 $
 —
 $
 5,094,451
 $
 —

 27,163,701
 26,415,950
 —
 16,737,855
 9,678,095

 Accrued interest payable
 294,917
 294,917
 —
 294,917
 —

 Guarantee liability
 14,396
 15,321
 —
 —
 15,321

 —
 —

 1,329,485
 1,341,974
 238,620
 1,103,354
 —

 —
 —

 Total financial liabilities
 $
 35,129,997
 $
 34,398,695
 $
 238,620
 $
 23,281,945
 $
 10,878,130

 Fair Value Measurement Level

 Carrying Value
 Fair Value
 Level 1
 Level 2
 Level 3

 Cash and cash equivalents
 $
 280,124
 $
 280,124
 $
 280,124
 $
 —
 $
 —

 Restricted cash
 8,217
 8,217
 8,217
 —
 —

 Equity securities, at fair value
 —
 —

 Debt securities trading, at fair value
 —
 —

 Deferred compensation investments
 7,763
 7,763
 7,763
 —
 —

 34,493,559
 30,884,906
 —
 —
 30,884,906

 Accrued interest receivable
 190,247
 190,247
 —
 190,247
 —

 Derivative assets
 —
 —

 Total financial assets
 $
 35,989,396
 $
 32,380,743
 $
 332,990
 $
 1,162,847
 $
 30,884,906

 $
 $
 4,333,635
 $
 —
 $
 3,833,635
 $

 25,901,165
 24,470,693
 —
 15,529,041
 8,941,652

 Accrued interest payable
 263,372
 263,372
 —
 263,372
 —

 Guarantee liability
 15,896
 16,477
 —
 —
 16,477

 —
 —

 1,286,861
 1,295,729
 244,636
 1,051,093
 —

 —
 —

 Total financial liabilities
 $
 33,078,623
 $
 31,658,545
 $
 244,636
 $
 20,758,129
 $
 10,655,780

 Loans to Members, Net

 Because of the interest rate repricing options we provide to borrowers on loan advances and other characteristics of our loans, there is no ready market from which to obtain fair value quotes or observable inputs for similar loans. As a result, we are unable to use the exit price to estimate the fair value of loans to members. We therefore estimate fair value for fixed-rate loans by discounting the expected future cash flows based on the current rate at which we would make a similar new loan for the same remaining maturity to a borrower. The assumed maturity date used in estimating the fair value of loans with a fixed rate for a selected rate term is the next repricing date because at the repricing date, the loan will reprice at the current market rate. The carrying value of our variable-rate loans adjusted for credit risk approximates fair value since variable-rate loans are eligible to be reset at least monthly.

 The fair value of loans with different risk characteristics, specifically nonperforming and restructured loans, is estimated using collateral valuations or by adjusting cash flows for credit risk and discounting those cash flows using the current rates at which similar loans would be made by us to borrowers for the same remaining maturities. The fair value of loans held for sale is determined based on the cost, which approximates the fair value, as we sell these loans at par value, concurrently or within a short period of time with the closing of the loan or participation agreement. See below for information on how we estimate the fair value of certain individually evaluated loans.

 Transfers Between Levels

 We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy and transfer between Level 1, Level 2 and Level 3 accordingly. Observable market data include but

 are not limited to quoted prices and market transactions. Changes in economic conditions or market liquidity generally will drive changes in availability of observable market data. Changes in availability of observable market data, which also may result in changes in the valuation technique used, are generally the cause of transfers between levels. We did not have any transfers into or out of Level 3 of the fair value hierarchy during fiscal years ended May 31, 2025 and 2024.

 Assets and Liabilities Measured at Fair Value on a Recurring Basis

 The following table presents the carrying value and fair value of financial instruments reported in our consolidated financial statements at fair value on a recurring basis as of May 31, 2025 and 2024, and the classification of the valuation technique within the fair value hierarchy. We did not have any assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs during the years ended May 31, 2025 and 2024.

 Table 14.2: Assets and Liabilities Measured at Fair Value on a Recurring Basis

 2025
 2024

 Level 1
 Level 2
 Total
 Level 1
 Level 2
 Total

 Equity securities, at fair value
 $
 $
 —
 $
 $
 $
 —
 $

 Debt securities trading, at fair value
 —
 —

 Deferred compensation investments
 8,019
 —
 8,019
 7,763
 —
 7,763

 Derivative assets
 —
 —

 —
 —

 Below is a description of the valuation techniques we use to estimate fair value of our financial assets and liabilities recorded at fair value on a recurring basis, the significant inputs used in those techniques, if applicable, and the classification within the fair value hierarchy.

 Equity Securities

 Our investments in equity securities consist of investments in Farmer Mac Class A common stock and Series C preferred stock. These securities are reported at fair value in our consolidated balance sheets. We determine the fair value based on quoted prices on the stock exchange where the stock is traded. Because quoted market prices are the key input in deriving fair value for these securities, the valuation methodology is classified as Level 1.

 Debt Securities Trading

 As discussed above in "Note 1—Summary of Significant Accounting Policies" our debt securities consist of investments in corporate debt securities, municipality debt securities, commercial MBS and other ABS and were classified as trading as of May 31, 2025. Management estimates the fair value of our debt securities utilizing the assistance of third-party pricing services. Methodologies employed, controls relied upon and inputs used by third-party pricing vendors are subject to management review when such services are provided. This review may consist of, in part, obtaining and evaluating control reports issued and pricing methodology materials distributed. We review the pricing methodologies provided by the vendors in order to determine if observable market information is being used to determine the fair value versus unobservable inputs. Investment securities traded in secondary markets are typically valued using unadjusted vendor prices. These investment securities, which include those measured using unadjusted vendor prices, are generally classified as Level 2 because the valuation typically involves using quoted market prices for similar securities, pricing models, discounted cash flow analyses

 using significant observable market inputs where available or a combination of multiple valuation techniques for which all significant assumptions are observable in the market.

 Deferred Compensation Investments

 CFC offers a nonqualified 457(b) deferred compensation plan to highly compensated employees and board members. Such amounts deferred by employees are invested by the company. The deferred compensation investments are presented as other assets in the consolidated balance sheets in the other assets category at fair value. We calculate fair value based on the daily published and quoted net asset value. Because quoted market prices are the key input in deriving fair value for this plan, the valuation methodology is classified as Level 1.

 Derivative Instruments

 Our derivatives primarily consist of OTC interest rate swaps executed under master netting swap agreements that do not have readily available quoted market prices. We derive the fair value of our derivatives using a vendor-provided derivative system, which is based on industry-standard discounted cash flow models. We rely primarily on market-observable inputs for these models, including market interest rates and forward swap yield curves, as well as the contractual terms of the derivative instrument, as of the valuation date. We include a credit risk valuation adjustment in our valuation of derivatives, which takes into consideration the effect of nonperformance credit risk of the counterparty or our own nonperformance risk and depends on whether the derivative instrument is in a gain, or asset, financial position or in a loss, or liability, financial position. We corroborate our derivative valuations by comparing the amounts to counterparty valuations and third-party pricing sources. We analyze and validate pricing variances, if material, among different external pricing sources. Because observable market data serve as the key inputs in valuing our interest rate swaps, the valuation methodology is classified as Level 2.

 Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

 We may be required, from time to time, to measure certain assets and liabilities at fair value on a nonrecurring basis on our consolidated balance sheets. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as in the application of the lower of cost or fair value accounting or when we evaluate assets for impairment. We did not have any assets or liabilities measured at fair value on a nonrecurring basis as of May 31, 2025 or May 31, 2024.

 NOTE 15—VARIABLE INTEREST ENTITIES

 NCSC meets the definition of a VIE because it does not have sufficient equity investment at risk to finance its activities without financial support. CFC is the primary source of funding for NCSC. Under the terms of the management agreement with NCSC, CFC manages the business operations of NCSC. CFC also unconditionally guarantees full indemnification for any loan losses of NCSC pursuant to a guarantee agreement with NCSC. CFC earns management and guarantee fees from its agreements with NCSC.

 All loans that require NCSC board approval also require CFC board approval. CFC is not a member of NCSC and does not elect directors to the NCSC board. If CFC becomes a member of NCSC, it would control the nomination process for one NCSC director. NCSC members elect directors to the NCSC board based on one vote for each member. NCSC is a Class C member of CFC.

 NCSC creditors have no recourse against CFC in the event of a default by NCSC, unless there is a guarantee agreement under which CFC has guaranteed NCSC debt obligations to a third party. The following table provides information on incremental consolidated assets and liabilities of VIE included in CFC's consolidated financial statements, after intercompany eliminations, which include NCSC's consolidated assets and liabilities as of May 31, 2025 and 2024.

 Table 15.1: Consolidated Assets and Liabilities of Variable Interest Entities

 2025
 2024

 Loans outstanding
 $
 $

 Other assets
 16,111
 12,700

 Total assets
 $
 1,670,339
 $
 1,557,177

 Total liabilities
 $
 15,114
 $
 9,824

 The following table provides information on CFC's credit commitments and potential exposure to loss under these commitments to NCSC as of May 31, 2025 and 2024.

 Table 15.2: CFC Exposure Under Credit Commitments to NCSC

 2025
 2024

 CFC credit commitments:

 Total CFC credit commitments
 $
 5,000,000
 $
 5,000,000

 Outstanding commitments:

 Borrowings payable to CFC(1)

 1,640,372
 1,532,781

 Credit enhancements:

 CFC third-party guarantees
 60,564
 43,621

 Other credit enhancements
 1,275

 Total credit enhancements(2)

 61,839
 44,378

 Total outstanding commitments
 1,702,211
 1,577,159

 CFC credit commitments available

 $
 3,297,789
 $
 3,422,841

 (1)Intercompany borrowings payable by NCSC to CFC as of May 31, 2025 and 2024 are eliminated in consolidation.
 (2)Excludes interest due on these instruments.

 Under a loan and security agreement with CFC, NCSC has access to a $ 2,000 million revolving line of credit and a $ 3,000 million revolving term loan from CFC as of May 31, 2025 which will mature in 2067. CFC loans to NCSC are secured by all assets and revenue of NCSC. CFC's maximum potential exposure, including interest due, for the credit enhancements totaled $ 62 million as of May 31, 2025. The maturities for obligations guaranteed by CFC extend through 2043.

 NOTE 16—BUSINESS SEGMENTS

 The following disclosures reflect the adoption of ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which was adopted retrospectively for our annual consolidated financial statements for the fiscal year ended May 31, 2025. The adoption of this guidance requires additional reportable segment disclosures, primarily relating to significant segment expenses and the CODM. Adoption of this guidance did not result in changes to the identification of our reportable business segments. See "Note 1—Summary of Significant Accounting Policies" for additional information related to our adoption of this new accounting standard.

 Our operating segments consist of CFC and NCSC for both FY2025 and FY2024, which also represent our reportable segments. Our activities were previously conducted through three operating segments: CFC, NCSC and RTFC for FY2023. On December 1, 2023, RTFC completed the sale of its business to NCSC, as discussed under "Note 1—Summary of Significant Accounting Policies" in our 2024 Form 10-K. As we aggregated segment information for NCSC and RTFC into one reportable segment prior to the RTFC sale transaction, the sale of RTFC did not cause a change in the composition of our reportable segments. A description of each of our segments and the products and services they provide to their respective members and associates is presented below.

 CFC's principal purpose is to provide its members with financing to supplement the loan programs of RUS. CFC makes loans to its rural electric members so they can acquire, construct and operate electric distribution systems, electric power supply systems and related facilities. CFC also provides its members and associates with credit enhancements in the form of letters of credit and guarantees of debt obligations.

 NCSC's principal purpose is to provide financing to its members and associates. NCSC makes loans to electric cooperatives and their subsidiaries that provide non-electric services in the energy and telecommunication industries as well as to entities that provide substantial benefit to CFC members, including eligible solar energy providers and investor-owned utilities. NCSC also provides its members and associates with equipment financing for leased assets, institutional debt placement services thought its wholly owned subsidiary Cooperative Securities and credit enhancements in the form of letters of credit.

 Basis of Presentation

 We present the results of our business segments on the basis in which management internally evaluates operating performance to establish short- and long-term performance goals, develop budgets and forecasts, identify potential trends, allocate resources and make compensation decisions. This presentation is aligned with how results are reviewed internally by our Chief Executive Officer ("CEO"), which we determined to be our CODM. The primary measure used regularly by our CODM to evaluate segment financial performance and allocate resources accordingly between segments is the net income adjusted to exclude derivative forward value gains (losses), which represent the effects of fair value fluctuations in our interest rate swaps. The CODM reviews and analyzes on a monthly basis the budget-to-actual variances for the adjusted net income and its components, to inform his decisions regarding the business segment allocation of capital and resources, in order to ensure alignment with our performance goals. The CODM also looks at changes in our total loans outstanding to assess the performance of the segments.

 Business Segment Reporting Methodology

 The results of our business segments are intended to present the separate results for each of the reportable segments included in our consolidated financial statements. As discussed in "Note 15—Variable Interest Entities," all of NCSC's funding is either provided by CFC or guaranteed by CFC, the terms and conditions of which are stipulated in a loan and security agreement and a guarantee agreement between CFC and NCSC. Pursuant to the guarantee agreement, CFC unconditionally guarantees full indemnification to NCSC for any credit losses. In addition, CFC manages the business operations of NCSC under a management agreement that automatically renews on an annual basis unless the agreement is terminated by either party.

 We report loans, and interest and fees earned on loans, based on the entity that holds the loans. CFC borrows from various sources to fund the operations of CFC and NCSC, the cost of which is reflected in CFC's interest expense. NCSC borrows from CFC to fund loans to its members, the cost of which is reported as interest expense by NCSC. CFC charges NCSC a management fee, which CFC reports as a component of fee and other income. NCSC reports the management fee charged by CFC as a component of non-interest expense. CFC and NCSC use derivatives, primarily interest rate swaps, to manage interest rate risk. Because we generally do not elect to apply hedge accounting to our interest rate swaps, changes in the fair value of our interest rate swaps are recorded in earnings in our consolidated total results of operations. However, management excludes the impact of derivative forward value gains (losses) and includes the net periodic derivative cash settlement interest income or expense amounts as a component of interest expense in reporting our segment results of operations, which represents the only difference between the accounting and reporting for our business segment results of operations and our consolidated total results of operations.

 Segment Results and Reconciliation

 The following tables display segment results of operations for the years ended May 31, 2025, 2024 and 2023, assets attributable to each segment as of May 31, 2025 and 2024 and a reconciliation of total segment amounts to our consolidated total amounts.

 Table 16.1: Business Segment Information

 Year Ended May 31, 2025

 CFC
 NCSC

 Consolidated

 Results of operations:

 $
 1,693,507
 $
 87,710
 $
 1,781,217
 $
 —
 $
 ( 77,984)
 $

 ( 1,442,027)
 ( 78,236)
 ( 1,520,263)
 —
 77,984
 ( 1,442,279)

 Derivative cash settlements interest income (expense)

 99,237
 ( 18)
 ( 99,219)
 —
 —

 Interest expense(3) (4)

 ( 1,342,790)
 ( 78,254)
 ( 1,421,044)
 ( 99,219)
 77,984
 ( 1,442,279)

 350,717
 9,456
 360,173
 ( 99,219)
 —
 260,954

 Benefit for credit losses

 8,111
 8,525
 —
 ( 414)
 8,111

 Net interest income after benefit for credit losses

 358,828
 9,870
 368,698
 ( 99,219)
 ( 414)
 269,065

 Non-interest income:

 29,162
 3,707
 32,869
 —
 ( 9,272)
 23,597

 Derivative gains:

 —
 —
 —
 —

 Derivative forward value losses

 —
 —
 —
 —

 Derivative losses

 —
 —
 —
 —

 Investment securities gains

 5,674
 —
 5,674
 —
 —
 5,674

 Total non-interest income
 34,836
 3,707
 38,543
 ( 9,272)
 23,420

 Non-interest expense:

 Salaries and employee benefits(3)

 ( 71,920)
 ( 251)
 ( 72,171)
 —
 —
 ( 72,171)

 Consulting(3)

 ( 14,828)
 ( 249)
 ( 15,077)
 —
 —
 ( 15,077)

 Depreciation and amortization(3)

 ( 12,615)
 —
 ( 12,615)
 —
 —
 ( 12,615)

 Other non-interest expense(5)

 ( 50,016)
 ( 12,090)
 ( 62,106)
 —
 9,686
 ( 52,420)

 ( 149,379)
 ( 12,590)
 ( 161,969)
 —
 9,686
 ( 152,283)

 Income before income taxes

 244,285
 245,272
 —
 140,202

 Income tax provision
 —
 ( 188)
 ( 188)
 —
 —
 ( 188)

 Net income(6)

 $
 244,285
 $
 $
 245,084
 $
 $
 —
 $

 CFC
 NCSC

 Consolidated Total

 $
 37,049,692
 $
 $
 38,703,920
 $
 —
 $
 ( 1,640,372)
 $

 Deferred loan origination costs
 —
 —
 —

 37,066,122
 38,720,350
 —
 ( 1,640,372)

 Less: Allowance for credit losses
 ( 40,615)
 ( 5,586)
 ( 46,201)
 —
 5,586
 ( 40,615)

 37,025,507
 1,648,642
 38,674,149
 —
 ( 1,634,786)
 37,039,363

 Other assets
 1,269,575
 34,068
 1,303,643
 —
 ( 17,957)
 1,285,686

 Total assets
 $
 38,295,082
 $
 1,682,710
 $
 39,977,792
 $
 —
 $
 ( 1,652,743)
 $
 38,325,049

 Year Ended May 31, 2024

 CFC
 NCSC

 Consolidated Total

 Results of operations:

 $
 1,584,071
 $
 82,104
 $
 1,666,175
 $
 —
 $
 ( 72,824)
 $

 ( 1,339,003)
 ( 72,909)
 ( 1,411,912)
 —
 72,824
 ( 1,339,088)

 127,017
 ( 127,166)
 —
 —

 Interest expense(3) (4)

 ( 1,211,986)
 ( 72,760)
 ( 1,284,746)
 ( 127,166)
 72,824
 ( 1,339,088)

 372,085
 9,344
 381,429
 ( 127,166)
 —
 254,263

 Benefit (provision) for credit losses

 5,516
 ( 2,330)
 3,186
 —
 2,330
 5,516

 Net interest income after benefit (provision) for credit losses

 377,601
 7,014
 384,615
 ( 127,166)
 2,330
 259,779

 Non-interest income:

 27,857
 7,448
 35,305
 —
 ( 12,513)
 22,792

 Derivative gains:

 —
 —
 —
 —

 Derivative forward value gains
 —
 —
 —
 —

 Derivative gains
 —
 —
 —
 —

 Investment securities gains

 —
 —
 —

 Total non-interest income
 38,629
 7,448
 46,077
 ( 12,513)
 425,601

 Non-interest expense:

 Salaries and employee benefits(3)

 ( 66,382)
 ( 1,019)
 ( 67,401)
 —
 —
 ( 67,401)

 Consulting(3)

 ( 9,668)
 ( 168)
 ( 9,836)
 —
 —
 ( 9,836)

 Depreciation and amortization(3)

 ( 10,469)
 —
 ( 10,469)
 —
 —
 ( 10,469)

 Other non-interest expense(5)

 ( 39,954)
 ( 12,083)
 ( 52,037)
 —
 10,183
 ( 41,854)

 ( 126,473)
 ( 13,270)
 ( 139,743)
 —
 10,183
 ( 129,560)

 Income before income taxes

 289,757
 1,192
 290,949
 —
 555,820

 Income tax provision
 —
 ( 1,504)
 ( 1,504)
 —
 —
 ( 1,504)

 Net income (loss)(6)

 $
 289,757
 $
 ( 312)
 $
 289,445
 $
 $
 —
 $

 CFC
 NCSC

 Consolidated Total

 $
 34,516,488
 $
 $
 36,060,965
 $
 —
 $
 ( 1,532,781)
 $

 Deferred loan origination costs
 —
 —
 —

 34,530,589
 36,075,066
 —
 ( 1,532,781)

 Less: Allowance for credit losses
 ( 48,726)
 ( 6,000)
 ( 54,726)
 —
 6,000
 ( 48,726)

 34,481,863
 1,538,477
 36,020,340
 —
 ( 1,526,781)
 34,493,559

 Other assets
 1,671,555
 28,389
 1,699,944
 —
 ( 15,689)
 1,684,255

 Total assets
 $
 36,153,418
 $
 1,566,866
 $
 37,720,284
 $
 —
 $
 ( 1,542,470)
 $
 36,177,814

 Year Ended May 31, 2023

 CFC
 NCSC

 Consolidated Total

 Results of operations:

 $
 1,343,215
 $
 61,716
 $
 1,404,931
 $
 —
 $
 ( 53,202)
 $

 ( 1,036,499)
 ( 53,211)
 ( 1,089,710)
 —
 53,202
 ( 1,036,508)

 Derivative cash settlements interest income (expense)

 34,021
 ( 444)
 ( 33,577)
 —
 —

 Interest expense(3) (4)

 ( 1,002,478)
 ( 53,655)
 ( 1,056,133)
 ( 33,577)
 53,202
 ( 1,036,508)

 340,737
 8,061
 348,798
 ( 33,577)
 —
 315,221

 Provision for credit losses

 ( 603)
 ( 935)
 ( 1,538)
 —
 ( 603)

 Net interest income after provision for credit losses

 340,134
 7,126
 347,260
 ( 33,577)
 314,618

 Non-interest income:

 24,880
 3,922
 28,802
 —
 ( 10,668)
 18,134

 Derivative gains:

 —
 —
 —
 —

 Derivative forward value gains
 —
 —
 —
 —

 Derivative gains
 —
 —
 —
 —

 Investment securities losses

 ( 4,974)
 —
 ( 4,974)
 —
 —
 ( 4,974)

 Total non-interest income (expense)

 19,906
 3,922
 23,828
 ( 10,668)
 299,004

 Non-interest expense:

 Salaries and employee benefits(3)

 ( 58,164)
 ( 847)
 ( 59,011)
 —
 —
 ( 59,011)

 Consulting(3)

 ( 8,201)
 ( 218)
 ( 8,419)
 —
 —
 ( 8,419)

 Depreciation and amortization(3)

 ( 5,717)
 —
 ( 5,717)
 —
 —
 ( 5,717)

 Other non-interest expense(5)

 ( 36,728)
 ( 11,093)
 ( 47,821)
 —
 9,733
 ( 38,088)

 ( 108,810)
 ( 12,158)
 ( 120,968)
 —
 9,733
 ( 111,235)

 Income (loss) before income taxes
 251,230
 ( 1,110)
 250,120
 —
 502,387

 Income tax provision
 —
 ( 800)
 ( 800)
 —
 —
 ( 800)

 Net income (loss)(6)

 $
 251,230
 $
 ( 1,910)
 $
 249,320
 $
 $
 —
 $

 (1)Consists of (i) the reclassification of net periodic derivative settlement interest income (expense) amounts, which we report as a component of interest expense for business segment reporting purposes but is included in derivatives gains (losses) in our consolidated total results and (ii) derivative forward value gains (losses), which we exclude from our business segment results but is included in derivatives gains (losses) in our consolidated total results.
 (2)Consists of intercompany borrowings payable by NCSC to CFC and the interest related to those borrowings, management fees paid by NCSC to CFC and other intercompany amounts, all of which are eliminated in consolidation.
 (3)The significant expense categories and amounts align with the segment level information that is regularly provided to the CODM.
 (4)Interest expense presented at the segment level is adjusted to include the effects of derivative cash settlement interest income or expense as provided to the CODM.
 (5)Other non-interest expense for each segment includes information technology, member relations, board, and other general and administrative expenses. For the NCSC segment, the other non-interest expense also includes the management fee expense paid to CFC pursuant to the management agreement.
 (6) Net income (loss) presented at the segment level is adjusted to exclude derivative forward value gains (losses) and is the primary measure used regularly by our CODM to evaluate segment financial performance and allocate resources between segments.

 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 None.

 Item 9A. Controls and Procedures

 Evaluation of Disclosure Controls and Procedures

 Senior management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. At the end of the period covered by this Report, based on this evaluation process, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at the reasonable assurance level.

 Management's Report on Internal Control Over Financial Reporting

 The management of National Rural Utilities Cooperative Finance Corporation ("we," "our" or "us") is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is designed under the supervision of management, including the Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

 (i)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets;
 (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of ours are being made only in accordance with authorizations of management and our directors;
 (iii)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or dispositions of our assets that could have a material effect on our financial statements; and
 (iv)ensure disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by us in reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

 Any system of internal control, no matter how well designed, has inherent limitations, including but not limited to the possibility that a control can be circumvented or overridden and misstatements due to error or fraud may occur and not be detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

 Our management assessed the effectiveness of internal control over financial reporting as of May 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework ("2013 Framework").

 Based on management's assessment and those criteria, management believes that we maintained effective internal control over financial reporting as of May 31, 2025.

 This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to the rules of the U.S. Securities and Exchange Commission that permit us to furnish only management's report with this Annual Report on Form 10-K.

 Changes in Internal Control Over Financial Reporting

 During the three months ended August 31, 2024, we implemented a new loan accounting system and as part of the implementation made certain changes to our internal controls over accounting and financial reporting for our loans. There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 By:

 /s/ J. ANDREW DON
 By:
 /s/ YU LING WANG

 Chief Executive Officer

 Senior Vice President and Chief Financial Officer

 By:
 /s/ PANKAJ SHAH

 Pankaj Shah

 Vice President and Controller
(Principal Accounting Officer)

 Item 9B. Other Information

 None.

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10. Directors, Executive Officers and Corporate Governance

 (a) Directors

 Name
 Age
Since
 Date Present
Term Expires

 Mark A. Suggs (President of CFC)

 2020
 2026

 Brent McRae (Vice President of CFC)

 2021
 2027

 Shane Larson (Secretary-Treasurer of CFC)

 2022
 2028

 2022
 2028

 John Bartley

 2024
 2027

 2023
 2026

 2021
 2027

 2021
 2027

 2022
 2026

 William Keith Hayward
 2020
 2026

 Michael J. Heinen

 2021
 2027

 Jeanette Ingrid Kessler(1)

 2025
 2027

 2020
 2026

 George Michael McDonald(2)

 2025
 2028

 2021
 2027

 2020
 2025

 Michael Partin(1)

 2024
 2027

 Scott Peters(2)

 2025
 2028

 Laura Phillips(2)

 2025
 2028

 Jeffrey Allen Rehder
 2020
 2027

 William Andrew Roberts(2)

 2025
 2028

 James Taylor(2)

 2025
 2028

 Anthony A. Anderson(4)

 2022
 2025

 Thomas A. Bailey(3)

 2019
 2025

 Darick Eisenbraun(5)

 2023
 2025

 Dennis Fulk(3)

 2019
 2025

 Barbara E. Hampton(3)

 2019
 2025

 Bradley P. Janorschke(3)

 2019
 2025

 G. Anthony Norton(3)

 2019
 2025

 (1)Pursuant to CFC's bylaws, NRECA determines the method of director election and length of term for the seat occupied by this director.
 (2)Director seated on June 30, 2025.
 (3)Director's term ended on June 30, 2025.
 (4)Director resigned from CFC board effective March 1, 2025.
 (5)Director resigned from CFC board effective June 30, 2025.

 Under CFC's bylaws, the board of directors shall be composed of the following individuals:
 •20 directors, which must include one general manager and one director of a member system from each of 10 districts (but no more than one director from each state except in a district where only one state has members);
 • two directors designated by NRECA; and

 • if the board determines at its discretion that an at-large director shall be elected, one at-large director who satisfies the requirements of an audit committee financial expert as defined by the Sarbanes-Oxley Act of 2002 and is a trustee, director, manager, chief executive officer or chief financial officer of a member.

 The 20 district-level directors are each elected by a vote of the members within the district for which the director serves. The at-large director who satisfies the requirements of an audit committee financial expert, is elected by the vote of all members. All CFC directors, other than the two directors designated by NRECA, are elected for a three-year term and can serve a maximum of two consecutive terms. Each CFC member (other than associates) is entitled to one vote with respect to elections of directors in their districts.

 On June 30, 2025, the membership approved amendments to CFC's bylaws. Pursuant to the amendments, the terms of the two directors designated by NRECA will expire in June 2027. Two new at-large directors will be elected by the membership to replace them. One new at-large director will be the chief executive officer, chief financial officer or other executive staff position of a Class B member, and the second new at-large director will be a director of a Class D member.

 (b) Executive Officers

 Title
 Name
 Age
 Held Present
 Office Since(1)

 President and Director

 2026(2)

 Vice President and Director

 2026(2)

 Secretary-Treasurer and Director

 2026(2)

 Chief Executive Officer
 2021

 Senior Vice President and Chief Financial Officer
 2021

 Senior Vice President and Chief Banking Officer
 2014

 Senior Vice President and General Counsel
 Nathan Howard
 2022

 Senior Vice President and Chief Corporate Affairs Officer
 Brad L. Captain
 2014

 Senior Vice President and Chief Risk Officer
 Gholam M. Saleh
 2022

 Senior Vice President and Chief Operating Officer
 2022

 Senior Vice President and Chief Relationship Management Officer

 Jill Maison
 2023

 Senior Vice President, Strategic Services

 Amy Luongo

 2025

 (1)Refers to fiscal year.
 (2)Elected on June 30, 2025.

 The president, vice president and secretary-treasurer are elected annually by the board of directors at its first organizational meeting immediately following CFC's annual membership meeting, each to serve a term of one year; the Chief Executive Officer serves at the pleasure of the board of directors; and the other executive officers serve at the pleasure of the Chief Executive Officer.

 (c) Identification of Certain Significant Employees

 (d) Family Relationships

 No family relationship exists between any director or executive officer and any other director or executive officer of the registrant.

 (e) (1) and (2) Business Experience and Directorships

 Following is biographical information about the business experience for each member of the CFC Board of Directors and executive officers.

 Directors

 Mr. Suggs has served as Executive Vice President and General Manager of Pitt & Greene Electric Membership Corporation in Farmville, North Carolina, since September 1983. Mr. Suggs has served as a Director of North Carolina Electric Membership Corporation in Raleigh, North Carolina, since 1984 and served as its president from 2015 to 2017. He has also served as a Director of North Carolina Association of Electric Cooperatives in Raleigh, North Carolina, since 1984 and served as its president from 2010 to 2011. Additionally, Mr. Suggs has served as a Director of Tarheel Electric Membership Association in Raleigh, North Carolina, since 1984. As Executive Vice President and General Manager of Pitt & Greene Electric Membership Corporation, Mr. Suggs has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Suggs has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. McRae has served as a Director of McCone Electric Cooperative, Inc. in Circle, Montana, since 2009. He also served as an alternate director of Central Montana Electric Power Cooperative, Inc. in Great Falls, Montana, from March 2018 to March 2021. Mr. McRae has served as a Director of the Montana Electric Cooperatives' Association, Inc. in Great Falls, Montana, since 2011 and served as its board president from October 2013 until October 2021. He has been a self-employed rancher since 1989. As a Director of McCone Electric Cooperative, Inc., Mr. McRae has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. McRae has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Shane Larson has served as the CEO of Rock Energy Cooperative in Janesville, Wisconsin, since August 2000. From 2013 to 2022, Mr. Larson served as a Director of Federated Rural Electric Insurance Exchange in Shawnee, Kansas including as its chairman. He has also served as a Director of Charge EV, LLC in Wisconsin since 2021 and as its Vice Chairman since 2021. Mr. Larson served as an Officer of Wisconsin's Managers' Association from 2006 to 2008 and as its president in 2008. He was also a board member of Empower Energy from 2003 until 2004. As the CEO of Rock Energy Cooperative, Mr. Larson has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Larson has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Abel has served as a Director of Sangre de Cristo Electric Association in Buena Vista, Colorado, since June 2015, has served in several officer positions since November 2015 and currently serves as Vice Chair of the board. He has served as a Director of Tri-State Generation and Transmission Association in Westminster, Colorado, since April 2019 and currently serves on the Executive Committee, the Finance & Audit Committee, the Board Policy Review Committee. Additionally, Mr. Abel served as Director of Western United Electric Supply from April 2017 through April 2019. In addition to being a self-employed Certified Public Accountant, Mr. Abel was employed by High Country Bank as a commercial loan officer from May 2019 through October 2020. Prior to May 2019, he was a majority equity owner and managing principal for Abel & Eggleston, CPAs, LLC since 2008. As a Director of Sangre de Cristo Electric Association, Mr. Abel has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Abel has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Bartley has been the CEO of Gulf Coast Electric Cooperative, Inc. in Wewahitchka, Florida, since 2013. He has been a Certified Public Accountant since 2001 and a Certified Fraud Examiner since 2011. As the CEO of Gulf Coast Electric Cooperative, Inc., Mr. Bartley has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Bartley has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Bidegain has served as a Director of Farmers' Electric Cooperative, Inc. of New Mexico in Clovis, New Mexico, since January 2009. Mr. Bidegain has served as a Director of Western Farmers Electric Cooperative since 2013 and as its board president since 2021. He has been a partner of T4 Cattle Company, LLC since 1996. Mr. Bidegain has owned and managed Bidegain Farms, LLC since 2003 and managed Sunny State Products, Inc. since 2022. As a Director of Farmers' Electric Cooperative, Inc. of New Mexico, Mr. Bidegain has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Bidegain has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Echternach has been President and CEO of Beltrami Electric Cooperative Inc. in Bemidji, Minnesota, since 2016, and a Director of Cooperative Development, LLC, its subsidiary, since 2016. He also served as CEO of North Itasca Electric Cooperative Inc. in Big Fork, Minnesota, from 2012 to 2016. Mr. Echternach has also served as President and Director of the Greater Bemidji Economic Development Corporation in Bemidji, Minnesota, since 2016, and as a Director of Security Bank USA in Bemidji, Minnesota, since 2020. As the President and CEO of Beltrami Electric Cooperative, Inc., Mr. Echternach has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Echternach has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Eldridge has served as a Director of Fleming-Mason Energy Cooperative, Inc. in Flemingsburg, Kentucky, since 2000, and as a Director of East Kentucky Power Cooperative, Inc. in Winchester, Kentucky, since 2014 in addition to serving as Treasurer for East Kentucky Power Cooperative, Inc. since 2024. Mr. Eldridge has also been Audit Committee Chairman of Fleming-Mason Energy since 2014. He has served as a Director of Citizens Bank located in Morehead, Kentucky, since 2013 and served as its Audit Committee Chairman throughout that time. Since 2015, Mr. Eldridge has been a member-owner and Certified Public Accountant at Baldwin CPAs, PLLC in Flemingsburg, Kentucky. He has held his Kentucky CPA license since 1986. As a Director of Fleming-Mason Energy Cooperative, Inc., Mr. Eldridge has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Eldridge has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Everhart has served as a Director of RushShelby Energy Rural Electric Cooperative, Inc. in Manilla, Indiana, since July 2017. Mr. Everhart has also served on the Finance Committee of RushShelby Energy Rural Electric Cooperative, Inc. since July 2021. He has served as a Finance Committee member of the Indiana State Fair Commission, Hereford Legacy Fund and the Hereford Youth Foundation. Mr. Everhart was a Vice President of Wells Fargo Bank from 1988 until 2018. As a Director of RushShelby Energy Rural Electric Cooperative, Inc., Mr. Everhart has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Everhart has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Hayward has served as the General Manager and CEO of North East Mississippi Electric Power Association in Oxford, Mississippi, since February 2014. From July 2004 to January 2014, he served as its manager of Engineering and Operations. Mr. Hayward has also served as a Director of Meridian Cooperative, formerly known as SEDC, a software cooperative in Atlanta, Georgia, since 2014. As the General Manager and CEO of North East Mississippi Electric Power Association, Mr. Hayward has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Hayward has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Heinen has been General Manager and CEO of Jefferson Davis Electric Cooperative, Inc. in Jennings, Louisiana, since 1999. He has also served as a Director of the Association of Louisiana Electric Cooperatives in Baton Rouge, Louisiana, since 1999. As the General Manager of Jefferson Davis Electric Cooperative, Inc., Mr. Heinen has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Heinen has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Dr. Kessler has served as a Director of Lane Electric Cooperative, Inc. in Eugene, Oregon since October 2014 and as a director of National Rural Electric Cooperative Association in Arlington, Virginia since March 2020. Dr. Kessler is a retired Veterinarian and owned and operated an Emergency Veterinary Hospital from June 1995 until November 2019. As a director of Lane Electric Cooperative, Inc., Dr. Kessler has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Dr. Kessler has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Anthony Larson has served as a Director of Slope Electric Cooperative, Inc. in New England, North Dakota, since June 2010, and as a director of Upper Missouri Power Cooperative in Sidney, Montana, since April 2020. Mr. Larson has served as a director of Basin Electric Power Cooperative, Dakota Gasification Company, Dakota Coal Company, and Montana Limestone Company in Bismarck, North Dakota, since December 2024 and as an advisory board member of Dakotas America since September 2017. In addition to being a self-employed rancher since 1986, Mr. Larson was an ambulatory care officer at West River Health Services from August 2016 to September 2019, and an agricultural banker at Dacotah Bank from October 2012 to January 2015. As a Director of Slope Electric Cooperative, Inc., Mr. Larson has acquired

 extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Larson has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. McDonald has served as a Director of Washington Electric Membership Corporation in Sandersville, Georgia since 2008 and as the Secretary-Treasurer from 2010 until 2024 and has served as Chairman of the Board since 2024. He has also served as a Director of Georgia Electric Membership Corporation in Tucker, Georgia since 2010 and as the Board Chair from 2020 to 2022. Mr. McDonald has served as a Director of Georgia System Operations in Tucker, Georgia since 2013. He has served on the Oglethorpe Power/Georgia Transmission/Georgia System Operations Advisory Board since 2013. As a director of Washington Electric Membership Corporation Mr. McDonald has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. McDonald has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Metcalf has been President and CEO of Mid-Ohio Energy Cooperative Inc. in Kenton, Ohio, since 2003. He has also served as a Director and Vice Chairman of Buckeye Power Inc. in Columbus, Ohio, since 2003, and has served on its Audit Committee since 2016. As the President and CEO of Mid-Ohio Energy Cooperative Inc., Mr. Metcalf has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Metcalf has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Montgomery has been General Manager and CEO of Fort Belknap Electric Cooperative, Inc. in Olney, Texas, since August 2003. Additionally, Mr. Montgomery has been CEO of Fort Belknap Services Corporation since August 2003, and CEO of Link Field Services, Inc. since August 2003, both subsidiaries of Fort Belknap Electric Cooperative, Inc. Mr. Montgomery has been an alternate director of Brazos Electric Power Cooperative, Inc. in Waco, Texas, since August 2003. He has also been a Certified Public Accountant since 1988. As the General Manager and CEO of Fort Belknap Electric Cooperative, Inc., Mr. Montgomery has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Montgomery has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Partin has been the CEO of Sequachee Valley Electric Cooperative in South Pittsburg, Tennessee, since 1998. Mr. Partin has also served as a Director of the NRECA Board of Directors, since 2019, its Vice President since 2024 and has served as NRECA President since March 5, 2025. As the CEO of Sequachee Valley Electric Cooperative, Mr. Partin has acquired extensive experience and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Partin has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Peters has been the CEO of Columbia Rural Electric Association in Walla Walla, Washington since 2008. He has also served as a Director of Washington Rural Electric Cooperative Association in Olympia, Washington since 2018 and served two terms as its Board President, Mr. Peters has served as a Director of Pioneer Utility Resources in Hillsboro, Oregon since 2018. He has also served as a Director of Cooperative Response Center in Austin, Minnesota since 2019. Mr. Peters has served as a Director of Pacific Northwest Generating Cooperative in Clackamas, Oregon since 2024. As a CEO of Columbia Rural Electric Association Mr. Peters has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mrs. Phillips has served as a Director of Delaware Electric Cooperative in Greenwood, Delaware since 2009 and served as its Secretary Treasurer. She has been a Vice President of WSFS Bank in Wilmington, Delaware since 2014. Since 1985 Mrs. Phillips has also owned Phillips Signs in Seaford, Delaware. As a Director of Delaware Electric Cooperative Mrs. Phillips has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mrs. Phillips has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Rehder has served as a Director of North West Rural Electric Cooperative in Orange City, Iowa, since 2005, and has served as its board president since 2012. He has served as a Director of Rivers Edge Bank, in Marion, South Dakota, since 2007. Since 2007, he has also served as a Director of First State Associates, a bank holding company in Hawarden, Iowa, and served as its chairman from 2020 until 2022. Since 2010, he has served as President of Rehder Farms Inc. and Director

 of 3R Feedlots Inc. in Hawarden, Iowa. As a Director of North West Rural Electric Cooperative, Mr. Rehder has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Rehder has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Roberts has been the Vice President, Finance and CFO of Buckeye Power, Inc., in Columbus, Ohio since 2010. He has also been the Vice President and Chief Financial Officer of Ohio Rural Electric Cooperative in Columbus, Ohio since 2010. Mr. Roberts has served as the Director and Treasurer of Cardinal Operating Company in Columbus, Ohio since 2018. As a Chief Financial Officer, Mr. Roberts has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board. We believe Mr. Robert's experience with accounting principles, financial reporting rules and regulations and evaluating financial results makes him qualified to serve as an audit committee financial expert as defined by Section 407 of the Sarbanes-Oxley Act of 2002.

 Mr. Taylor has served as a Director of Northfork Electric Cooperative, Inc. in Sayre, Oklahoma since 1986 and as its President since 1993. He has also served as a Director of Oklahoma Association of Electric Cooperatives since 1998 and as its President from 2014 to 2015. Mr. Taylor has owned Taylor Ranch in Cheyenne, Oklahoma since 1993. As a Director of Northfork Electric Cooperative, Inc., Mr. Taylor has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Taylor has the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board.

 Mr. Anderson served as the General Manager of Cherryland Electric Cooperative in Grawn, Michigan, from March 2003 to April 2024. Additionally, Mr. Anderson served as a Director of NRECA in Arlington, Virginia, from 2008 to March 2025 and served as its president from March 2023 to March 2025. He also served as Director of the Michigan Electric Cooperative Association in Lansing, Michigan, from 2003 to 2023. As the general manager of Cherryland Electric Cooperative, Mr. Anderson has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Anderson had the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board. Mr. Anderson resigned from the CFC board effective March 1, 2025.

 Mr. Bailey has served as a Director of Vermont Electric Cooperative in Johnson, Vermont, since 2004. From 2006 to 2015, Mr. Bailey served as board president of Vermont Electric Cooperative. He has operated a real estate investment business since 2009. As a Director of Vermont Electric Cooperative, Mr. Bailey has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Bailey had the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board. Mr. Bailey's director term on the CFC board ended on June 30, 2025.

 Mr. Eisenbraun has been Chief Executive Officer of High Plains Power, Inc. in Riverton, Wyoming, since 2021. He also served as Chief Financial Officer of Butte Electric Cooperative, Inc. in Newell, South Dakota, from 2015 to 2020. Mr. Eisenbraun has also served as a Director of the City of Spearfish – Municipal Airport Board from 2018 to 2020, and as the Vice President of the City of Spearfish City Council from 2019 to 2020. As the CEO of High Plains Power, Inc., Mr. Eisenbraun has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Eisenbraun had the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board. Mr. Eisenbraun resigned from the CFC board effective June 30, 2025.

 Mr. Fulk has served as a Director of Platte-Clay Electric Cooperative in Kearney, Missouri, since 1993, including serving as board president from 2000 to 2015. He served as a Director of NW Electric Power Cooperative from 2004 until April 2019, serving as board vice president from 2011 to April 2019. Mr. Fulk also served as a Director of the Association of Missouri Electric Cooperatives from 2000 until 2015, serving as board president from 2010 to 2011. As a Director of Platte-Clay Electric Cooperative, Mr. Fulk has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Fulk had the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board. Mr. Fulk's director term on the CFC board ended on June 30, 2025.

 Mrs. Hampton currently serves as the President and CEO of Georgia Transmission Corporation in Tucker, Georgia, a position she began in January 2021. She served as the Senior Vice President and CFO of the organization from 2005 until moving to the CEO role. Mrs. Hampton has been a Certified Public Accountant since 1990. As President and CEO of Georgia Transmission Corporation, Mrs. Hampton has acquired extensive experience with and knowledge of the rural

 electric cooperative industry and, therefore, we believe Mrs. Hampton had the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board. We believe Mrs. Hampton's experience with accounting principles, financial reporting rules and regulations and evaluating financial results made her qualified to serve as an audit committee financial expert as defined by Section 407 of the Sarbanes-Oxley Act of 2002 and as the chairperson of CFC's Audit Committee. Mrs. Hampton's director term on the CFC board ended on June 30, 2025.

 Mr. Janorschke has been the General Manager at Homer Electric Association, Inc. in Homer, Alaska, since 2004. He has also been the General Manager of Alaska Electric and Energy Cooperative in Homer, Alaska, since 2004. Mr. Janorschke has also served on the Board of Trustees of the Northwest Public Power Association in Vancouver, Washington, since 2014. As the General Manager of Homer Electric Association, Inc., Mr. Janorschke has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Janorschke had the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board. Mr. Janorschke's director term on the CFC board ended on June 30, 2025.

 Mr. Norton has served as a Director of Snapping Shoals Electric Membership Corporation in Covington, Georgia, since 1993. Mr. Norton has also served as a Director at Georgia System Operations Corporation in Tucker, Georgia, since 2012. Additionally, Mr. Norton served as a Director of Georgia Electric Membership Corporation in Tucker, Georgia, from 2009 to 2021. Mr. Norton owned and operated Conyers Pharmacy in Conyers, Georgia, from 1982 to 2018. As a Director of Snapping Shoals Electric Membership Corporation, Mr. Norton has acquired extensive experience with and knowledge of the rural electric cooperative industry and, therefore, we believe Mr. Norton had the qualifications, skills and experience necessary to act in the best interests of CFC and to serve as a director on the CFC board. Mr. Norton's director term on the CFC board ended on June 30, 2025.

 Executive Officers

 Mr. Don joined CFC in September 1999 as Director of Loan Syndications and became Vice President of Capital Market Relations in June 2005. In June 2010, Mr. Don was named CFC's Senior Vice President and Treasurer, and on July 1, 2013, he became Senior Vice President and Chief Financial Officer. Effective May 3, 2021, Mr. Don assumed the position of Chief Executive Officer. Prior to joining CFC, he held the position of Vice President and Manager of the Washington, D.C. Office for The Bank of Tokyo-Mitsubishi. Mr. Don started his banking career with the Bank of Montreal in New York in 1984 and subsequently was a Vice President for Corporate Banking for The Bank of New York from 1987 to 1990.

 Ms. Wang joined CFC in 2000. During her 24 year tenure, Ms. Wang has held various positions within CFC's finance department. Ms. Wang was named Vice President, Capital Markets in June 2017 after having served as Vice President, Capital Markets Relations since June 2012. Effective May 3, 2021, Ms. Wang became Senior Vice President and Chief Financial Officer.

 Mr. Allen joined CFC in 1990. Throughout his career with CFC, Mr. Allen has held various positions. He served as a Director, Portfolio Management through 2010 and as Vice President, Portfolio Management from 2010 until April 2014, when he became Senior Vice President, Member Services. Effective February 1, 2023, Mr. Allen was named Senior Vice President and Chief Banking Officer.

 Mr. Howard joined CFC in 2014 as Corporate Counsel in the Legal Services Group. He became Senior Corporate Counsel in 2015 and Assistant General Counsel in December 2020. Effective April 25, 2022, Mr. Howard became Senior Vice President and General Counsel. Prior to joining CFC, Mr. Howard spent over 10 years as an associate at three large law firms in New York and Washington, D.C. and three years as in-house counsel, including serving as Vice President and General Counsel for Greentech Automotive, a start-up electric vehicle manufacturer, from June 2011 to February 2013.

 Mr. Captain joined CFC in 1999. He served as Vice President, Government Relations until 2010 when he became Vice President, Corporate Communications. In January 2014, Mr. Captain served as Vice President, Corporate Relations until April 2014 when he became Senior Vice President, Corporate Relations. Effective June 1, 2021, Mr. Captain became Senior Vice President and Chief Corporate Affairs Officer. Prior to joining CFC, he worked as a Special Assistant to the Undersecretary of Rural Development at the U.S. Department of Agriculture.

 Mr. Saleh first joined CFC in August 1997 in the Treasury and Finance Group. He became the Director of Risk Management before leaving in November 2005 to pursue a career as Director of Asset-Liability Management at

 CapitalSource Inc., followed by an appointment as director and financial industry fellow at the Financial Industry Regulatory Authority in Washington, D.C., in October 2009. Mr. Saleh went abroad in December 2010 to focus on international banking examination, financial industry regulation and domestic and regional financial stability prior to returning to CFC in September 2016 as Vice President of Financial Risk Management. Effective June 1, 2021, Mr. Saleh was named Senior Vice President and Chief Risk Officer.

 Mr. Bradbury serves as Senior Vice President and Chief Operating Officer. In this capacity since 2021, Mr. Bradbury is responsible for overseeing Information Technology, Human Resources, Loan Servicing, Facilities and other corporate services. Prior to his current role, Mr. Bradbury served as Vice President of Internal Audit and Enterprise Risk Management from 2001 to 2021. His earlier experience includes corporate auditing management roles at PricewaterhouseCoopers LLP and Stat Oil Energy.

 Mrs. Maison joined CFC in 2005 as an Associate Vice President. She held various positions in Credit Risk Management and G&T Lending from 2005 to June 2015. In June 2015, she became Regional Vice President, G&T until becoming Director, G&T Relationship Management in January 2019. From June 2021 until January 2023 she served as Vice President, G&T. On January 3, 2023, she was promoted to Senior Vice President, Relationship Management. Effective March 1, 2025, Mrs. Maison was named Senior Vice President and Chief Relationship Management Officer.

 Mrs. Luongo joined CFC in 2002. Throughout her career with CFC, Mrs. Luongo has held various positions. She served as an Associate Vice President, Member Services through 2010 and as Vice President, Portfolio Management from 2010 until November 2024, when she was promoted to Senior Vice President, Strategic Services.

 (f) Involvement in Certain Legal Proceedings

 None to our knowledge.

 (g) Promoters and Control Persons

 (h) Code of Ethics

 We have adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-K. This Code of Ethics applies to our principal executive officer, principal financial officer and principal accounting officer. This Code of Ethics is publicly available on our website at www.nrucfc.coop (under the link "Investor Relations/Corporate Governance"). We anticipate that any waivers of, or amendments to, the Code of Ethics will be posted on our website.

 (i) Nominating Committee

 Our board of directors does not have a standing nominating committee. As described above under "Item 10(a) Directors," 20 of our directors are each elected by members in the district for which the director serves. To nominate director candidates, at the district meeting before the meeting at which candidates are to be elected from such district, a nominating committee is elected composed of one person from each state within the district. Each member of these nominating committees must be a trustee, director or manager of one of our members. Each district nominating committee then submits the names of two or more nominees for each position in the district for which an election is to be held. We provide members of nominating committees with director guidelines to use in reviewing applications from potential candidates. One or more candidates for the at-large director position who satisfies the requirements of an audit committee financial expert are nominated by our board of directors if the board determines that it is appropriate to fill the seat. Our board of directors believes that it is appropriate for the full board of directors to nominate this director because of the position's specific qualification requirements and the lack of any local district qualification requirement.

 While we do not have a formal policy regarding diversity, the director guidelines we provide to each district nominating committee specify that a variety of perspectives, opinions and backgrounds is critical to the board's ability to perform its duties and various roles. We recognize the value of having a board that encompasses a broad range of skills, expertise, industry knowledge and diversity of professional and personal experience.

 (j) Audit Committee

 Our Audit Committee currently consists of 12 directors: Mr. Montgomery (Chairperson), Mr. Roberts (Vice Chairperson), Mr. Suggs (Ex Officio), Mr. Abel, Mr. Bartley, Mr. Eldridge, Mr. Heinen, Mr. Anthony Larson, Mr. Shane Larson, Dr. Kessler, Mr. Metcalf and Mr. Peters. Mr. Roberts was designated by the board as an "audit committee financial expert" as defined by Section 407 of the Sarbanes-Oxley Act of 2002. The members of the Audit Committee are "independent" as that term is defined in Rule 10A-3 under the Securities Exchange Act. Among other things, the Audit Committee reviews our financial statements and the disclosure under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K. The Audit Committee meets with our independent registered public accounting firm, internal auditors, CEO and financial management executives to review the scope and results of audits and recommendations made by those persons with respect to internal and external accounting controls and specific accounting and financial reporting issues and to assess corporate risk. The board has adopted a written policy for the Audit Committee that may be found on our website, www.nrucfc.coop (under the link "Investor Relations/Corporate Governance").

 Audit Committee Report

 The Audit Committee completed its review and discussions with management regarding our audited financial statements for the year ended May 31, 2025. The Audit Committee has discussed with the independent auditors the matters required to be discussed by Auditing Standard No. 1301, and received from the independent accountants written disclosures and the letter from the independent accountant required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the Audit Committee concerning independence, and discussed with the accountants their independence.

 Based on the review and discussions noted above, the Audit Committee recommended to the board that the audited financial statements be included in our Annual Report on Form 10-K for the year ended May 31, 2025 for filing with the U.S. Securities and Exchange Commission (the "SEC").

 Submitted by the Audit Committee:
 William Andrew Roberts
 John Bartley
 Michael J. Heinen
 Jeanette Ingrid Kessler
 Scott Peters

 The information in the Audit Committee Report above does not constitute "soliciting material" and will not be deemed "filed" with the SEC or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate SEC filings by references, in whole or in part, notwithstanding anything to the contrary set forth in those filings.

 (k) Compensation Committee

 Role of the Compensation Committee

 Our Compensation Committee currently consists of seven directors: Mr. Suggs, Mr. McRae, Mr. Shane Larson, Mr. Bidegain, Mr. Everhart, Mr. Montgomery and Mr. Echternach. The Compensation Committee of the board of directors reviews and makes appropriate recommendations to the full board of directors regarding CFC's total compensation philosophy and pay components, including, but not limited to, base and incentive pay programs. The Compensation

 Committee is also responsible for approving the compensation, employment agreements and perquisites for the CEO. The Compensation Committee annually reviews all approved corporate goals and objectives relevant to compensation, evaluates performance in light of those goals and approves the CEO's compensation based on this evaluation, all of which is then submitted to the full board of directors for ratification. The Compensation Committee has delegated authority to the CEO for evaluating the performance and approving the annual base compensation for all of the other named executive officers as identified in the "Summary Compensation Table" below. Other than the CEO, no other named executive officer makes decisions regarding executive compensation.

 The Compensation Committee reports to the board of directors on its actions and recommendations following committee meetings and meets in executive session without members of management present when making specific compensation decisions. Although the board has delegated authority to the Compensation Committee with respect to CFC's executive and general employee compensation programs and practices, the full board of directors also reviews and ratifies CFC's compensation and benefit programs each year.

 The Compensation Committee's charter can be found on our website at www.nrucfc.coop (under the link "Investor Relations/Corporate Governance").

 The Compensation Committee's Processes

 The Compensation Committee has established a process to assist in ensuring that CFC's executive compensation program is achieving its objectives. Prior to the start of each fiscal year, the board of directors approves performance measures for the "Corporate Balanced Scorecard," which is the basis for the annual incentive plan. The Compensation Committee reviews and assesses the accomplishment of goals as of the end of the fiscal year and determines whether to authorize the payment of incentive compensation. This authorization is then submitted to the full board of directors for ratification.

 The CFC Board of Directors is provided an opportunity to rate the CEO's performance and provide feedback on competencies to include strategy, people, external stakeholders and leadership. The President, Vice President and Secretary-Treasurer of the Board of Directors meet annually with the CEO to review his performance based on the board assessment as well as individual achievements, contribution to CFC's performance and other leadership accomplishments. In determining the CEO's base pay, the Compensation Committee subjectively considers the results of the board performance assessment as well as a variety of corporate performance measures, including financial metrics, portfolio management, customer satisfaction and market share, industry leadership, and peer group compensation data provided by the compensation consultant, as discussed below.

 Role of Compensation Consultant

 In fiscal year 2025, the Compensation Committee hired Mercer (US) Inc. ("Mercer US") to advise it on the CEO's compensation as compared with the compensation of CEOs of peer group organizations. Through discussions with the Compensation Committee, Mercer US established a peer group of companies to use in assessing the competitiveness of the CEO's compensation (see "Compensation Discussion and Analysis—Compensation Analysis" section below). Mercer US advised the Compensation Committee through an assessment of compensation data from this peer group using a one-year compensation analysis, which assesses CFC's CEO compensation and the compensation of peer CEOs for the most recent fiscal year. The elements of compensation reviewed include current base pay, target and actual annual incentives, actual long-term incentive granted as well as long-term incentive payouts, and total direct compensation. Mercer US did not determine or provide the Compensation Committee with a specific recommendation on any component of executive compensation; it only reviewed benchmark data and discussed what is generally occurring with executive compensation. During fiscal year 2025, Mercer US provided CFC services with respect to general compensation data and benefit administration. The decision to engage Mercer US was made by management and approved by the Compensation Committee. The aggregate fees paid to Mercer US for executive compensation services to the Compensation Committee during fiscal year 2025 were $83,012.

 In fiscal year 2025, the Compensation Committee conducted an evaluation of Mercer US' independence considering the relevant regulations of the U.S. Securities and Exchange Commission and the listing standards of the New York Stock Exchange, and concluded that the services performed by Mercer US raised no conflicts of interest. CFC does not believe

 that such additional services impair Mercer's ability to provide independent advice to the Compensation Committee or otherwise present a conflict of interest.

 Role of Executive Officers

 As described above, the Compensation Committee has delegated the authority for making base pay decisions for the other named executive officers to the CEO. The CEO exercises his judgment to set base pay rates, based on general market data, overall corporate performance and leadership accomplishments. For additional information about the CEO's role in compensation decisions, see "Compensation Discussion and Analysis—Base Pay" section below.

 (l) Section 16(a) Beneficial Ownership Reporting Compliance

 (m) Board Leadership Structure and Role of Risk Oversight by the Board of Directors

 Board Leadership Structure

 The positions of CEO and president of the CFC Board of Directors are held by two separate individuals. The president must be a member of the board of directors and is elected annually by the board of directors. The president of the CFC Board of Directors has authority, among other things, to appoint members of the board to standing committees, to appoint a vice chairperson to each board standing committee and to appoint members to ad-hoc board committees. The president of the board presides over board meetings, sets meeting agendas and determines materials to be distributed to the board. Accordingly, the board president has substantial ability to influence the direction of the board. CFC believes that separation of the positions of board president and CEO reinforces the independence of the board in its oversight of CFC's business and affairs. CFC also believes that this leadership structure is appropriate in light of the cooperative nature of the organization. The board of directors appoints the CEO. The CEO is not a member of the board of directors. If the CEO position becomes vacant, the board of directors will appoint an interim CEO who will exercise the responsibilities of the CEO until a permanent CEO is selected by the board of directors.

 Board Role in Risk Oversight

 The board of directors has responsibility for the oversight and strategic direction of CFC's Enterprise Risk Management ("ERM") framework. The board of directors has adopted a comprehensive risk-management policy that describes the roles and responsibilities of the board and management within an established framework for identifying and managing risks. The board of directors reviews the risk-management policy annually and updates it accordingly. The board of directors has also developed a risk-management philosophy, which is periodically assessed and, if appropriate, updated. It states CFC's set of shared beliefs and attitudes on how risk is considered from strategy development and implementation to our operations.

 The board of directors' policy sets forth the primary objectives of CFC's ERM, which are to implement a process by which all important risks are identified, measured, assessed, managed and monitored in a comprehensive and effective manner; and to categorically group, inventory, analyze and oversee all relevant risks by way of a structured reporting and analytics framework for the board of directors and senior management.

 The ERM framework is intended to provide a holistic view of key risks that may impact CFC's strategic objectives. ERM provides CFC with a process that allows CFC to become more anticipatory and effective at evaluating and managing uncertainties, objectively and proactively. The ERM process is focused on categorically measuring and assessing key risks across three broad groupings of risk, namely credit risk, financial risk and operational risk. The process of assessing key risks is performed quarterly and within the context of CFC's strategic objectives, mission, values, culture, conservative risk-management philosophy and established risk guidelines. The framework provides a consistent approach for identifying CFC's key risks and determining appropriate responses in light of the board of directors' strategic objectives.

 The board of directors periodically reviews important trends and emerging developments across key risks as assessed, measured and evaluated by management. The Chief Risk Officer is primarily accountable for the execution of the ERM responsibilities in accordance with established risk limits and guidelines where applicable and as established by

 corresponding risk owners and in alignment with the risk philosophy of the board of directors. Additionally, management is responsible for periodically evaluating the ERM framework, making regular reports to the board of directors about its evaluation of the ERM framework and proposing to the board of directors changes to the ERM process to reflect financial industry best practice.

 In fulfilling its risk-management oversight duties, the board of directors receives periodic reports on business activities and risk-management activities from management, including but not limited to detailed risk assessment of (i) credit risk including an analysis of CFC's loan portfolio, counterparty credit risk exposure (e.g., derivatives counterparties) and the corporate investment portfolio; (ii) financial risk including an analysis of liquidity and funding risk, capital management and leverage, financial performance and interest rate risk; and (iii) operational risk with an analysis of cybersecurity, business operations and information technology, compliance, reputational and talent management. The periodic reports to the board of directors from management also include reports from various operating groups (e.g., Member Relations, Treasury Operations, Internal Audit, Information Technology and Legal Services), and committees across the organization (e.g., Corporate Credit Committee, Asset Liability Committee, Cybersecurity Committee, Investment Management Committee and the Disclosure Committee). Management provides reports to the board of directors at each regularly scheduled board meeting, and more frequently as requested by the board of directors, relating to, among other things, the ongoing progress of managing risk at CFC given the ERM framework, management's responses for the critical business risks identified during the risk assessment process and the status of any gaps or deficiencies, and CFC's risk profile and trends, as well as emerging risks and opportunities.

 Trading Policy

 CFC has adopted an insider trading policy that governs the purchase, sale and/or other dispositions of our securities by directors, officers and employees. The policy and procedures set forth therein are reasonably designed to promote compliance with insider trading laws, rules and regulations, and applicable NYSE listing standards (the "Insider Trading Policy"). A copy of the Insider Trading Policy has been incorporated by reference to this Report.

 Clawback Policy

 In October 2023, our board of directors adopted a clawback policy as required by Rule 10D-1 of the Exchange Act (the "Clawback Policy"). The Clawback Policy applies to our current and former executive officers, which includes our chief executive officer, all senior vice presidents, our vice president and controller or anyone holding equivalent positions within the company. The policy provides for the recoupment of certain incentive-based compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws. This includes any necessary restatement to correct an error in previously issued financial statements that is material to those statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected.

 Under the policy, incentive-based compensation is defined as any compensation paid pursuant to CFC's annual incentive plan and any other compensation that is based in whole or in part on the attainment of a financial reporting measure. The incentive-based compensation eligible for recovery under this policy includes compensation received during the three completed fiscal years immediately preceding the date we are required to prepare an accounting restatement, as outlined above. This applies provided that the individual served as an officer covered under the policy at any time during the performance period relevant to the incentive-based compensation. A copy of the Clawback Policy has been incorporated by reference to this Report.

 Item 11. Executive Compensation

 Compensation Discussion and Analysis

 Executive Compensation Philosophy and Objectives

 The components of our compensation package for the named executive officers (consisting of Mr. Don, Ms. Wang, Mr. Allen, Mr. Captain and Mr. Bradbury) are consistent with those offered to all employees.

 Pursuant to CFC's Compensation Committee charter, the Compensation Committee reviews and makes recommendations to the CFC's Board of Directors on CFC's total compensation philosophy and pay components, including base and incentive pay programs. With respect to the CEO, the Compensation Committee annually reviews and approves corporate goals and objectives relevant to compensation, evaluates performance in light of these goals and objectives, and determines and approves the CEO's compensation based on this evaluation. Pursuant to the charter, the Compensation Committee has delegated its responsibility for the annual evaluation of the performance of other executive officers to the CEO, and the CEO evaluates performance and determines appropriate base compensation for such other executive officers on the basis of CFC's goals and objectives.

 Our executive compensation program provides a balanced mix of compensation that incorporates the following key components:
 • annual base pay;
 • an annual cash incentive that is based on the combination of achievement of short-term (one-year) corporate goals and individual performance; and
 • retirement, health and welfare and other benefit programs.

 While all elements of executive compensation work together to provide a competitive compensation package, each element of compensation is determined independently of the other elements.

 Our compensation philosophy is to provide a total compensation package for employees—base pay, annual incentive and benefits—that is competitive in the local employment market. Due to the cooperative nature of the organization, CFC does not offer stock or other equity compensation. Thus, it is important for CFC to pay the named executive officers of CFC competitively in base pay to retain key talent.

 Performance—Named executive officers receive base pay that is both market competitive and reflective of their role in developing, implementing and overseeing CFC's strategy and operations. The annual incentive component of compensation reflects both the performance of the organization and its success in achieving corporate performance metrics established by the board of directors and the executive officer's individual performance.

 Retention—CFC's success is due in large part to the relationship between our employees and our members. This makes the retention of employees, including the named executive officers, vital to our business and long-term success. The compensation package, particularly the retirement benefits, assist in the retention of a highly qualified management team.

 Compensation Analysis

 In fiscal year 2025, the Compensation Committee engaged Mercer US to conduct a survey to provide compensation data for the CEO position using 17 peer organizations identified by Mercer US through discussions with the Compensation Committee. Mercer US included companies in the peer group that were similar to CFC in asset size, industry and business description. The peer group included financial institutions that are private market, commercial and/or mission-driven lenders offering full-service financing, investment and related services. The companies targeted as peer companies included six members of the Farm Credit System and 11 regional banks and financial services companies.

 The peer group companies had assets ranging from approximately 50% to 200% of CFC's November 30, 2024 total assets of $37.1 billion. The peer group consisted of financial services organizations Webster Financial Corporation; Synovus Financial Corp.; Navient Corporation; BankUnited, Inc.; Hancock Whitney Corporation; Commerce Bancshares, Inc.;

 Federal Agricultural Mortgage Corporation; SLM Corporation; OneMain Holdings, Inc.; Rocket Companies, Inc.; and Bread Financial Holdings, Inc. as well as six Farm Credit System peers.

 Mercer US led the Compensation Committee through an assessment of CEO compensation data for the peer group companies. Mercer US' data included both actual compensation and target compensation based on information obtained from each peer group company's most recent annual report or proxy statement.

 The elements of compensation reviewed for the peer group companies include:
 • current base salary;
 • target and actual annual incentive paid in fiscal year 2024;
 • actual long-term incentive granted, which included restricted stock awards (valued at face value on the date of grant), stock option awards (valued at grant date utilizing the Black-Scholes option pricing model), other long-term incentive target awards (valued at target value on date of award) and cash long-term incentive payouts (valued at actual payout on date of award if target value is not disclosed);
 • sign-on awards, special awards and mega-grants annualized over the term of the employment contract or the vesting schedule; and
 • annualized value of retirement, perquisites and other noncash compensation.

 The Compensation Committee reviewed total compensation data for the peer group for informational purposes and used this data to determine the competitiveness of compensation and to set CEO base pay.

 In determining the base compensation paid to our other named executive officers, the CEO engaged Mercer US to compile benchmark data of financial services and other organizations of similar asset size as CFC in order to obtain a general understanding of current compensation practices and to ensure that the base pay component of compensation for the named executive officers other than the CEO is competitive with such institutions. CFC has often recruited non-CEO talent from industries outside the financial services sector. As a result, the CEO considers data from surveys covering a larger and broader group of for-profit companies in setting compensation for the other named executive officers than the Compensation Committee considers in setting compensation for the CEO. The CEO considered the data to gain a general understanding of current compensation practices at institutions of similar asset size to CFC; he did not review or consider underlying data pertaining to individual organizations comprising any of the survey groups. Instead, the CEO considered the aggregate compensation data to enhance his understanding of current practices in setting compensation at competitive levels.

 Elements of Compensation

 Base Pay — Our philosophy is to provide annual base pay that reflects the value of the job in the marketplace, as well as employee experience, skills and tenure within a salary range. To attract and retain a highly skilled workforce, we must remain competitive with the pay of other employers that compete with us for talent.

 After reviewing the performance of the organization and the evaluation of the CEO's performance by each board member, the Compensation Committee concluded that the CEO and the organization performed extremely well during this business year, with business results meeting or exceeding company targets for many key performance metrics, and the CEO continuing to demonstrate outstanding leadership. Therefore, in recognition of his strong performance and leadership, the committee increased the CEO's base pay to $1,379,268 effective June 1, 2025.

 As discussed above, Mr. Don, pursuant to the delegation of authority provided to the CEO from the Compensation Committee, exercised his judgment to set the annual base pay for the other named executive officers based on general market data, overall company performance and individual leadership accomplishments.

 Mr. Don determined that Ms. Wang, Mr. Allen, Mr. Captain and Mr. Bradbury all performed well in their various roles as senior leaders of the organization, with each contributing to the achievement of corporate strategies and objectives in a positive and meaningful way. As a result, Ms. Wang, Mr. Allen, Mr. Captain and Mr. Bradbury received merit increases to their base pay. The increases are included in the total compensation table below.

 Annual Incentive — Our annual cash incentive program for fiscal year 2025 was a one-year cash incentive that was tied to the annual performance of the organization as well as individual performance. We believe that by paying an incentive tied to the achievement of annual operating goals as well as individual performance, all employees, including named executive officers, will focus their efforts on the most important strategic objectives that will help us fulfill our mission to our members and our obligations to the financial markets while also exhibiting high levels of performance. Additionally, the annual incentive pay enhances our ability to provide competitive compensation while at the same time aligning total compensation paid to the achievement of corporate goals. Every employee participates in the annual incentive program, and the corporate strategic goals are the same for all employees, including the named executive officers.

 The annual incentive program provides maximum annual cash incentive opportunities based on the employee's position level within our base pay structure, ranging from 26% to 40% of base pay. Named executive officers are eligible to receive annual cash incentive compensation of up to 40% of their base pay. The individual performance component of the plan is determined by the employee's performance rating, which is weighted from 0% to 100%, and the level of their position within our base pay structure, which determines the portion of the total annual incentive payout tied to individual performance, ranging from 20% to 80%. The remainder of the payout is based on company performance against established corporate goals.

 Our approach to establishing corporate goals for annual incentive compensation has not changed since the plan's inception. Corporate performance is measured using a balanced scorecard approved by the board of directors prior to the start of the fiscal year. The balanced scorecard is a performance management tool that articulates the corporate strategy into specific, quantifiable and measurable goals. The goals have always been tied to enhancing service to our member-owners while ensuring all aspects of the business are effectively managed.

 The scorecard is divided into four quadrants, reflecting crucial areas of business performance. Specific goals are established within those quadrants to focus all employees on the target results and measures that must be achieved if we are to succeed at realizing our strategic plan. The intent is to align organizational, departmental and individual initiatives to achieve a common set of goals.

 The four quadrants for fiscal year 2025, which were the basis for the annual incentive payment, were Member; Financial Ratios; Internal Process; and Employee Engagement. For fiscal year 2025, the board of directors established six corporate goals within these four quadrants. The board of directors establishes corporate goals and measures they believe are challenging but achievable if each individual performs well in their role and we meet our internal business plan goals.

 The goals for fiscal year 2025 were:

 • Member Portfolio Management: Two goals supporting expansion of member participation in CFC loan products and maintaining or increasing market share of borrowers in key segments of the loan portfolio.
 • Financial Ratios: Two goals supporting efforts to meet or exceed established financial targets to maintain CFC's financial strength.
 • Internal Process: One goal focused on managing CFC's operating expense levels.
 • Employee Engagement: One goal focused on engaging and educating employees to gain a greater understanding of the organization's corporate governance, the purpose and importance of member meetings, recognizing developments and challenges in the cooperative industry, and raising awareness of the risks and opportunities in the use of artificial
 intelligence.

 The determination of the extent to which the six goals were achieved and, therefore, the amount to be paid out under the annual incentive plan for fiscal year 2025 was confirmed by the board of directors in July 2025. The board determined that four goals were achieved at 100%, and two goals were achieved at 75%. Each goal carries a different weight varying between 10% and 25%, resulting in an aggregate payout of 92.5% of the total opportunity. CFC has a 10-year average payout of 19.51% of base salaries for all employees across both our legacy short-term incentive plans and the new annual incentive plans. The average payout of base salaries for all employees in the new fiscal year 2025 annual incentive plan is 26.04%.

 Long-Term Incentive — The legacy long-term incentive program was designed as a three-year plan aligned with CFC's strategic goals. Participants included all employees as of June 1, 2022, who received performance units based on bond rating targets set by S&P, Fitch and Moody's. The program concluded on May 31, 2022, with the final payout occurring on May 31, 2024. Despite ending the long-term incentive program, CFC maintained a payout contingency linked to its issuer credit ratings for the fiscal year 2025 annual incentive plan, underscoring the ongoing importance of these ratings in performance evaluation and compensation decisions.

 Risk Assessment

 The Compensation Committee conducts an annual risk assessment of the company's compensation policies and practices, particularly annual incentive plan goals, to ensure that the policies and practices do not encourage excessive risk. For fiscal year 2025, the Compensation Committee concluded that our compensation policies and practices are not reasonably likely to provide incentives for behavior that could have a material adverse effect on the company.

 Benefits

 An important retention tool is our defined benefit pension plan, the Retirement Security Plan. CFC participates in a multiple-employer pension plan managed by NRECA. We balance the effectiveness of this plan as a compensation and retention tool with the cost of the annual premium incurred to participate in this pension plan. The value of the pension benefit is determined by base pay only and does not include other cash compensation.

 We also have an Executive Benefit Restoration Plan ("EBR"). The EBR is a plan for a select group of management, to increase their retirement benefits above amounts available under the Retirement Security Plan, which is restricted by Internal Revenue Service ("IRS") limitations on annual pay levels and maximum annual annuity benefits. The EBR restores the value of the Retirement Security Plan for named executive officers to the level it would be if the IRS limits on annual pay and annual annuity benefits were not in place. Unlike the Retirement Security Plan, the EBR is an unfunded, unsecured obligation of CFC and is not qualified for tax purposes. All five of the named executive officers are participants in the EBR.

 Under the EBR, we pay any amounts owed to the named executive officers for the restoration benefit once the risk of forfeiture has expired; amounts will be paid directly by CFC. We record an unfunded pension obligation and an offsetting adjustment to AOCI for this liability.

 For more information on the Retirement Security Plan and the EBR, see "Pension Benefits Table" below.

 As an additional retention tool designed to assist named executive officers in deferring compensation for use in retirement, each named executive officer is also eligible to participate in CFC's nonqualified 457(b) deferred compensation savings plan. Contributions to this plan are limited by IRS regulations. The calendar year 2025 cap for contributions is $23,500. There is no CFC contribution to the deferred compensation plan. For more information see "Nonqualified Deferred Compensation" below.

 Other Compensation

 We provide named executive officers with other benefits, as reflected in the All Other Compensation column in the "Summary Compensation Table" below, that we believe are reasonable and consistent with our compensation philosophy. We do not provide significant perquisites or personal benefits to the named executive officers.

 The Compensation Committee considers perquisites for the CEO in connection with its annual review of the CEO's total compensation package described above. The perquisites provided to Mr. Don are limited to an annual automobile allowance and an annual spousal air travel allowance to permit Mr. Don's spouse to accompany him on business travel. To provide the automobile and spousal travel perquisites in an efficient fashion, the board of directors authorizes an annual allowance rather than providing unlimited reimbursement or use of a company-owned vehicle. The amount of each allowance is authorized annually by the board of directors and is determined based on the estimated cost for operation and maintenance of an automobile and the anticipated cost of air travel by the CEO's spouse. For fiscal year 2025, the board of directors authorized an aggregate of $55,125 to cover these two allowances.

 Severance/Change-in-Control Agreements

 Mr. Don has an executive agreement with CFC under which he may continue to receive compensation and benefits in certain circumstances after resignation or termination of employment. The value of his severance package was determined to be appropriate for a CEO and approved by the Compensation Committee as part of his employment contract. No other named executive officers have termination or change-in-control agreements. For more information on these severance arrangements, see "Termination of Employment and Change-in-Control Arrangements" below.

 Compensation Committee Report

 The Compensation Committee of the board of directors oversees CFC's compensation program on behalf of the board. In fulfilling its oversight responsibilities, the Compensation Committee reviewed and discussed with management the "Compensation Discussion and Analysis" set forth in this Annual Report on Form 10-K. Based on this review and discussion, the Compensation Committee recommended to the board of directors that the "Compensation Discussion and Analysis" be included in this Form 10-K.

 Submitted by the Compensation Committee:

 The information in the Compensation Committee Report above does not constitute "soliciting material" and will not be deemed "filed" with the SEC or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate SEC filings by references, in whole or in part, notwithstanding anything to the contrary set forth in those filings.

 Summary Compensation Table

 The summary compensation table below sets forth the aggregate compensation for the fiscal years ended May 31, 2025, 2024 and 2023 earned by the named executive officers.

 Name and Principal Position
 Year
 Salary
 Bonus(1)

 Non-Equity Incentive Plan Compensation(2)

 Change in Pension Value and Nonqualified Deferred Compensation Earnings (3)

 All Other
 Compensation(4)

 Total

 2025
 $
 1,277,100
 $
 —
 $
 566,590
 $
 1,552,904
 $
 65,042
 $
 3,461,636

 Chief Executive
 2024
 1,161,000
 —
 421,520
 985,658
 65,650
 2,633,828

 Officer
 2023
 1,080,000
 —
 371,760
 420,554
 59,100
 1,931,414

 2025
 513,000
 —
 228,088
 421,298
 9,467
 1,171,853

 Senior Vice President
 2024
 475,000
 —
 172,000
 114,633
 8,392
 770,025

 and Chief Financial
 2023
 440,000
 —
 154,200
 —
 7,933
 602,133

 Officer

 2025
 520,000
 —
 232,480
 723,331
 10,025
 1,485,836

 Senior Vice President
 2024
 495,000
 —
 181,500
 246,205
 9,375
 932,080

 and Chief Banking
 2023
 462,000
 23,000
 168,840
 —
 8,600
 662,440

 Officer

 Brad Captain
 2025
 458,000
 —
 204,584
 437,212
 7,050
 1,106,846

 Senior Vice President
 2024
 440,000
 —
 162,100
 137,252
 6,717
 746,069

 and Chief Corporate
 2023
 426,000
 25,000
 148,044
 —
 6,100
 605,144

 Affairs Officer

 2025
 454,000
 —
 200,704
 388,215
 10,100
 1,053,019

 Senior Vice President
 2024
 420,000
 —
 150,900
 107,447
 9,475
 687,822

 and Chief Operating

 Officer

 (1) Includes amounts given as one-time cash awards in lieu of or in addition to base pay increases. Details for 2025 can be found in "Compensation Discussion and Analysis—Elements of Compensation" above.
 (2) Includes amounts earned and amounts vested during each respective fiscal year and payable as of May 31 under the annual incentive plans. For a discussion of the long-term and annual incentive plans, see "Compensation Discussion and Analysis—Elements of Compensation" above. The amounts earned by each named executive officer under these incentive plans are listed above.
 (3) Represents the aggregate change in the actuarial present value of the accumulated pension benefit under the NRECA Retirement Security Plan, the multiple-employer defined benefit pension plan in which CFC participates, during each respective fiscal year as calculated by NRECA.
 (4) For Mr. Don for fiscal year 2025, includes perquisites comprising Mr. Don's automobile allowance and his spousal air travel allowance. The annual automobile allowance is calculated based on estimated costs associated with maintenance, use and insurance of a personal automobile. The annual spousal travel allowance is calculated based on the anticipated air travel for Miss Nickodem (Mr. Don's spouse) during the fiscal year. The remaining amounts included in this column represent CFC contributions on behalf of each named executive officer pursuant to the CFC 401(k) defined contribution plan and contributions to health savings accounts.

 The following chart has the amounts paid to each named executive officer under the annual and long-term incentive plans in fiscal years 2025 and 2024 and short-term and long-term incentive plan for fiscal 2023.

 Name
 Year
 Annual Incentive Plan(1)

 Annual Incentive Vested Portion(2)

 Long-Term
 Incentive Plan(3)

 2025
 $
 480,190
 $
 —
 $
 —

 2024
 371,520
 92,880
 50,000

 2023
 345,600
 86,400
 26,160

 2025
 192,188
 —
 —

 2024
 152,000
 38,000
 20,000

 2023
 140,800
 35,200
 13,400

 2025
 195,520
 —
 —

 2024
 158,400
 39,600
 23,100

 2023
 147,800
 36,960
 21,000

 Brad Captain
 2025
 172,208
 —
 —

 2024
 140,800
 35,200
 21,300

 2023
 129,504
 32,376
 18,540

 2025
 170,704
 —
 —

 2024
 134,400
 33,600
 16,500

 (1) Includes amounts equal to 100% of the total opportunity achieved in fiscal year 2025. For fiscal years 2024 and 2023, the annual inventive plan includes amounts equal to 80% of the total opportunity achieved and paid within the fiscal year earned.
 (2) Includes amounts equal to 20% of the total opportunity achieved and will be paid two years following the end of the fiscal year in which it was earned.
 (3) The last long-term incentive plan payout was May 31, 2024.

 Estimated Future Payouts Under Non-Equity Incentive Plan Awards

 Our annual cash incentive program for fiscal year 2025 was a one-year cash incentive tied to the annual performance of the organization as well as individual performance. The following table shows the threshold, target and maximum amounts applicable to each named executive officer as of the beginning of the incentive period.

 Name
 Threshold (0%)
 Target (100%)
 Maximum (100%)

 J. Andrew Don................

 $
 —
 $
 510,840
 $
 510,840

 Yu Ling Wang...................

 —
 205,200
 205,200

 Joel Allen...........................

 —
 208,000
 208,000

 Brad Captain..................

 —
 183,200
 183,200

 Gary Bradbury................

 —
 181,600
 181,600

 Employment Contracts

 Pursuant to an employment agreement amendment executed on February 29, 2024, CFC extended the initial employment term of Mr. Don as Chief Executive Officer through May 31, 2027 unless extended as provided by the terms of the contract or unless otherwise terminated in accordance with the terms of the Agreement. The Agreement provides that CFC shall pay Mr. Don a base salary at an annual rate of not less than $1,161,000 per annum plus such incentive payments (if any) as may be awarded to him. In addition, pursuant to the Agreement, Mr. Don is entitled to certain payments in the event of his termination other than for cause (e.g., Mr. Don leaving for good reason, disability or termination due to death). See

 "Termination of Employment and Change-in-Control Arrangements" below for a description of these provisions and for information on these amounts.

 Pension Benefits Table

 CFC is a participant in a multiple-employer defined benefit pension plan, the Retirement Security Plan, which is administered by NRECA. Since this plan is a multiple-employer plan in which CFC participates, CFC is not liable for the amounts shown in the table below and such amounts are not reflected in CFC's audited financial statements. CFC's expense is limited to the annual premium to participate in the Retirement Security Plan. There is no funding liability for CFC for this plan.

 The Retirement Security Plan is a qualified plan in which all employees are eligible to participate upon completion of one year of service. Each of the named executive officers participates in the qualified pension plan component of the Retirement Security Plan. Under the current pension plan, participants are entitled to receive annually, under a 50% joint and surviving spouse annuity, 1.70% of the average of their five highest base salaries during their participation in the Retirement Security Plan, multiplied by the number of years of participation in the plan. The value of the pension benefit is determined by base pay only and does not include other cash compensation. Normal retirement age under the qualified pension plan is age 65; however, the plan does allow for early retirement with reduced benefits beginning at age 55. For early retirement, the pension benefit will be reduced by 1/15 for each of the first five years and 1/30 for each of the next five years by which the elected early retirement date precedes the normal retirement date. CFC reduced the value of the pension plan effective September 1, 2010. Benefits accrued prior to September 1, 2010, are based on a benefit level of 1.90% of the average of their five highest base salaries during their participation in the Retirement Security Plan and a normal retirement age of 62.

 CFC also offers an EBR. Five of the named executive officers participate in the EBR. The purpose of this plan is to increase the retirement benefits above amounts available under the Retirement Security Plan, which is restricted by IRS limitations on annual pay levels and maximum annual annuity benefits. The EBR restores the value of the Retirement Security Plan for the participating officers to the level it would be if the IRS limits on annual pay and annual annuity benefits were not in place.

 The benefit and payout formula under these restoration plans is similar to that under the qualified Retirement Security Plan. Mr. Don has reached the vesting date in accordance with provisions of the EBR plan, and as a result, no longer has a risk of forfeiture of the benefit under the EBR plan. Distributions are made from these plans to those named executive officers annually. The details of theses distributions are shown in the Pension Benefits table below.

 The following table contains the years of service, the present value of the accumulated benefit for the named executive officers listed in the "Summary Compensation Table" as of May 31, 2025, as calculated by NRECA and distributions from the plans for the fiscal year then ended.

 Name
 Plan Name
 Number of Years
 of Credited Service (1)

 Present Value of
 Accumulated Benefit (2)

 Payments During Last
 Fiscal Year(3)

 24.66
 $
 3,345,359
 $
 865,177

 23.66
 1,416,620
 —

 33.66
 3,843,672
 —

 Brad Captain
 25.33
 2,008,130
 —

 23.00
 1,493,141
 —

 (1) CFC is a participant in a multiple-employer pension plan. Credited years of service, therefore, includes not only years of service with CFC, but also years of service with another cooperative participant in the multiple-employer pension plan. All named executive officers have credited years of service only with CFC.
 (2) Amount represents the actuarial present value of the named executive officer's accumulated benefit under this plan as of May 31, 2025, as provided by the plan administrator, NRECA, using interest rates ranging from 4.04% to 5.25% per annum and mortality according to tables prescribed by the IRS as published in Revenue Rulings 2001-62 and 2007-67.
 (3) Distributions for Mr. Don during fiscal year 2025 were as a result of him no longer being at risk of forfeiture with respect to these amounts provided under the EBR plan. Ms. Wang, Mr. Allen, Mr. Captain and Mr. Bradbury continue to have a risk of forfeiture of the benefits under the EBR; therefore, no payments have been made.

 Nonqualified Deferred Compensation

 The CFC deferred compensation plan is a nonqualified deferred compensation savings program for the senior executive group, including each of the named executive officers, and other select management or highly compensated employees designated by CFC. Participants may elect to defer up to the lesser of 100% of their compensation for the year or the applicable IRS statutory dollar limit in effect for that calendar year. The calendar year 2025 cap for contributions is $23,500. During the three plan years immediately prior to the date a participant attains normal retirement age, participants may be eligible for a statutory catch-up provision that allows them to defer more than the annual contribution limit. Compensation for the purpose of this plan is defined as the total amount of compensation, including incentive pay, if any, paid by CFC. CFC does not make any contributions to this plan.

 The accounts are credited with "earnings" based on the participants' selection of available investment options (currently, nine options) within the Homestead Funds. When a participant ceases to be an employee for any reason, distribution of the account will generally be made in 15 substantially equal annual payments beginning approximately 60 days after termination (unless an election is made to change the form and timing of the payout). The participant may elect either a single lump sum or substantially equal annual installments paid over no less than two and no more than 14 years. The amount paid is based on the accumulated value of the account.

 The following table summarizes information related to the nonqualified deferred compensation plan in which the named executive officers listed in the "Summary Compensation Table" were eligible to participate during the fiscal year ended May 31, 2025.

 Name
 Executive
 Contributions
 in Last
 Fiscal Year (1)

 Registrant
Contributions
in Last
Fiscal Year
 Aggregate
Earnings in Last
Fiscal Year
 Aggregate
Withdrawals/
Distributions
 Aggregate
Balance at Last
Fiscal Year-End

 $
 23,000
 $
 —
 $
 40,172
 $
 —
 $
 398,632

 23,000
 —
 2,641
 —
 70,051

 —
 —
 —
 —
 —

 Brad Captain
 23,000
 —
 184,526
 —
 1,638,206

 —
 —
 —
 —
 —

 (1) Executive contributions are also included in the fiscal year 2025 Salary column in the "Summary Compensation Table" above.

 Termination of Employment and Change-in-Control Arrangements

 Mr. Don has an executive agreement with CFC under which he may continue to receive base salary and benefits in certain circumstances after resignation or termination of employment. No other named executive officers have termination or change-in-control agreements.

 Mr. Don

 Under the executive agreement with Mr. Don, if CFC terminates his employment without "cause" or Mr. Don terminates his employment for "good reason" (each term as defined below), CFC is obligated to pay him, in substantially equal monthly installments over the 12-month period following the termination of employment, an amount equal to the product of two times the sum of (i) his annual base salary at the rate in effect at the time of termination and (ii) the annual incentive earned if any, for the year prior to the year in which such termination occurs.

 Assuming a triggering event on May 31, 2025, the compensation payable to Mr. Don for termination without cause or for good reason would be $3,514,579. The actual payments due on a termination without cause or for good reason on different dates could materially differ from this estimate.

 For purposes of Mr. Don's executive agreement, "cause" generally means (i) the willful and continued failure by Mr. Don to perform his duties under the agreement or comply with written policies of CFC, (ii) willful conduct materially injurious to CFC or (iii) conviction of a felony involving moral turpitude. "Good reason" generally means (i) a reduction in the rate of Mr. Don's base salary, (ii) a decrease in his titles, duties or responsibilities, or the assignment of new responsibilities which,

 in either case, is materially less favorable to Mr. Don when compared with his titles, duties and responsibilities that were in effect immediately prior to such assignment or (iii) the relocation of CFC's principal office or the relocation of Mr. Don to a location more than 50 miles from the principal office of CFC.

 This estimate does not include amounts to which the named executive officer would be entitled to upon termination, such as base salary to date, unpaid bonuses earned, unreimbursed expenses, paid vacation time and any other earned benefits under company plans.

 Chief Executive Officer Pay Ratio

 The fiscal year 2025 compensation ratio of the median annual total compensation of all our employees to the annual total compensation of our Chief Executive Officer is as follows:

 Category and Ratio
 Total Compensation

 Median annual total compensation of all employees (excluding Chief Executive Officer)
 $
 178,148

 Annual total compensation of J. Andrew Don, Chief Executive Officer
 3,461,636

 Ratio of the median annual total compensation of all employees to the annual total compensation of J. Andrew Don, Chief Executive Officer
 19.43:1.0

 In determining the median employee, a listing was prepared of all active employees of CFC as of March 31, 2025. We did not make any assumptions, adjustments or estimates with respect to total compensation. We did not annualize the compensation for any part-time employees or those who were not employed by us for the full 10-month portion of the fiscal year. We determined the compensation of our median employee by (i) taking the total gross compensation earned fiscal year-to-date for all active employees as of March 31, 2025 and (ii) ranking the total gross compensation of all employees, except the Chief Executive Officer, from lowest to highest.

 After identifying the median employee, we calculated annual total compensation for such employee using the same methodology we use for our named executive officers as set forth in the above Summary Compensation Table.

 Director Compensation Table

 Directors receive a $90,000 annual fee for their service on the CFC board (in addition to $5,000 for committee chairpersons and $10,000 for board executives). Additionally, the directors receive reimbursement for reasonable travel expenses. These fees are paid on a monthly basis and reimbursement for travel expenses is paid following the conclusion of each board meeting.

 Below is a summary of the total compensation earned by each of CFC's directors during the fiscal year ended May 31, 2025.

 Name
 Total Fees Earned

 Anthony A. Anderson
 $
 67,500

 Barbara E. Hampton
 95,000

 Bradley P. Janorschke

 Darick Eisenbraun

 Dennis Fulk

 G. Anthony Norton

 Jeanette Ingrid Kessler

 22,500

 Jeffrey Allen Rehder
 95,000

 John Bartley

 Michael J. Heinen

 Michael Partin

 95,000

 Thomas A. Bailey

 William Keith Hayward
 95,000

 Compensation Committee Interlocks and Insider Participation

 There were no Compensation Committee interlocks or insider participation related to executive compensation during the fiscal year ended May 31, 2025.

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13. Certain Relationships and Related Transactions, and Director Independence

 Review and Approval of Transactions with Related Persons

 Our board of directors has established a written policy governing related-person transactions. The policy covers transactions between CFC, on the one hand, and its directors, executive officers or key employees and their immediate family members and entities of which any of our directors, executive officers or key employees (i) is an officer, director, trustee, alternative director or trustee or employee, (ii) controls or (iii) has a substantial interest. Under this policy, a related-person transaction is any transaction in excess of $120,000 in which CFC was, is or is proposed to be a direct or indirect participant in which a related person had, has or will have a direct or indirect material interest in the transaction. Related-person transactions do not include compensation or expense reimbursement arrangements with directors, officers or key employees (notwithstanding that officer compensation may be disclosed in this section, elsewhere in the CFC's periodic reports filed with the SEC or otherwise disclosed publicly as a related-person transaction), transactions where the related person's interest arises only from the person's position as a director of another entity that is a party to the transaction, and transactions deemed to be related credits. Related-person transactions are subject to review by the Executive Committee of

 the board of directors (excluding any interested director), based on whether the transaction is fair and reasonable to CFC and consistent with the best interests of CFC and its members.

 Related credits are extensions of credit to, or for the benefit of, related persons and entities that are made on substantially the same terms as, and follow underwriting procedures that are no less stringent than, those prevailing at the time for comparable transactions generally offered by CFC. Related credits are not subject to the procedures for transactions with related persons because we were established for the very purpose of extending financing to our members. We, therefore, enter into loan and guarantee transactions with members of which our officers and directors are officers, directors, trustees, alternative directors or trustees, or employees in the ordinary course of our business. All related credits are reviewed from time to time by our internal Corporate Credit Committee, which monitors our extensions of credit, and our independent third-party reviewer, which reviews our credit-extension policies on an annual basis. All loans, including related credits, are approved in accordance with an internal credit approval matrix, with each level of risk or exposure potentially escalating the required approval from our lending staff to management, a credit committee or the board of directors. Related credits of $250,000 or less are generally approved by our lending staff or internal Corporate Credit Committee. Any related credit in excess of $250,000 requires approval by the full board of directors, except that any interested directors may not participate, directly or indirectly, in the credit approval process, and the CEO has the authority to approve emergency lines of credit and certain other loans and lines of credit. Notwithstanding the related-person transaction policy, the CEO will extend such loans and lines of credit in qualifying situations to a member of which a CFC director was a director or officer, provided that all such credits are underwritten in accordance with prevailing standards and terms. Such situations are typically weather related and must meet specific qualifying criteria. To ensure compliance with this policy, no related persons may be present in person or by teleconference while a related credit is being considered. Under no circumstances may we extend credit to a related person or any other person in the form of a personal loan.

 As a cooperative, CFC was established for the very purpose of extending financing to its members, from which our directors must be drawn. Loans and guarantees to member systems of which directors of CFC are officers, directors, trustees, alternative directors or trustees, or employees, are made in the ordinary course of CFC business on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other members and that do not involve more than normal risk of uncollectibility or present other unfavorable features. It is anticipated that, consistent with its loan and guarantee policies in effect from time to time, additional loans and guarantees will be made by CFC to member systems and trade and service organizations of which directors of CFC or their immediate family members (i) are officers, directors, trustees, alternative directors or trustees or employees, (ii) control or (iii) have a substantial beneficial interest. CFC has adopted a policy whereby substantially all extensions of credit to such entities are approved only by the disinterested directors.

 Related-Person Transactions

 The following table contains the total compensation earned by CFC's executive officers during the year ended May 31, 2025 who are not named executive officers but meet the definition of a "related person" as described above. Total compensation disclosed below is made up of the same components included in the "Summary Compensation Table" under "Item 11. Executive Compensation."

 Name and Principal Position
 Total Compensation

 Gholam M. Saleh

 Senior Vice President and Chief Risk Officer

 $
 798,463

 Nathan Howard

 Senior Vice President and General Counsel
 682,443

 Jill Maison

 Senior Vice President and Chief Relationship Management Officer

 950,020

 Amy Luongo

 Senior Vice President, Strategic Services

 811,410

 Independence Determinations

 The board of directors has determined the independence of each director based on a review by the full board. The Audit Committee is subject to the independence requirements of Rule 10A-3 under the Securities Exchange Act. To evaluate the independence of our directors, the board has voluntarily adopted categorical independence standards consistent with the New York Stock Exchange ("NYSE") standards. However, because we only list debt securities on the NYSE, we are not subject to most of the corporate governance listing standards of the NYSE, including the independence requirements.

 No director is considered independent unless the board has affirmatively determined that he or she has no material relationship with CFC, either directly or as a partner, shareholder or officer of an organization that has a relationship with CFC. Material relationships can include banking, legal, accounting, charitable and familial relationships, among others. In addition, a director is not considered independent if any of the following relationships existed:

 (i)the director is, or has been within the last three years, an employee of CFC or an immediate family member is, or has been within the last three years, an executive officer of CFC;
 (ii)the director has received, or has an immediate family member who has received, during any 12-month period within the last three years, more than $120,000 in direct compensation from CFC, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided that such compensation is not contingent in any way on continued service);
 (iii)(a) the director or an immediate family member is a current partner of a firm that is CFC's internal or external auditor; (b) the director is a current employee of such a firm; (c) the director has an immediate family member who is a current employee of such a firm and personally works on CFC's audit; or (d) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on CFC's audit within that time;
 (iv)the director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of CFC's present executive officers at the same time serves or served on that company's compensation committee; or
 (v)the director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, CFC for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company's consolidated gross revenue.

 The board of directors also reviewed directors' responses to a questionnaire asking about their relationships with CFC and its affiliates (and those of their immediate family members) and other potential conflicts of interest.

 Based on the criteria above, the board of directors has determined that the directors listed below are independent for the period of time served by such directors during fiscal year 2025. The board determined that none of the directors listed below had any of the relationships listed in (i)—(v) above or any other material relationship that would compromise their independence.

 Independent Directors

 Thomas A. Bailey(2)

 Dennis Fulk(2)

 Barbara E. Hampton(2)

 Jeanette Ingrid Kessler(1)

 G. Anthony Norton(2)

 Michael Partin

 Jeffrey Allen Rehder

 (1) This director served during fiscal year 2025; effective March 11, 2025.
 (2) This director served during fiscal year 2025; until June 30, 2025.

 Item 14. Principal Accountant Fees and Services

 CFC's Audit Committee is solely responsible for the nomination, approval, compensation, evaluation and discharge of the independent public accountants. The independent registered public accountants report directly to the Audit Committee, and the Audit Committee is responsible for the resolution of disagreements between management and the independent registered public accountants. Consistent with U.S. Securities and Exchange Commission requirements, the Audit Committee has adopted a policy to pre-approve all audit and permissible non-audit services provided by the independent registered public accountants, provided such services do not impair the independent public accountant's independence.

 KPMG, LLP was our independent registered public accounting firm for the fiscal years ended May 31, 2025 and 2024. KPMG, LLP has advised the Audit Committee that they are independent accountants with respect to CFC, within the meaning of standards established by the Public Company Accounting Oversight Board and federal securities laws administered by the U.S. Securities and Exchange Commission. The following table displays the aggregate estimated or actual fees for professional services provided by KPMG, LLP in fiscal years 2025 and 2024, including fees for the 2025 and 2024 audits. All services for fiscal years 2025 and 2024 were pre-approved by the Audit Committee.

 2025
 2024

 Description of fees:

 Audit fees(1)

 $
 2,083
 $
 2,053

 Audit-related fees(2)

 Tax fees(3)

 All other fees (4)

 —

 Total
 $
 2,188
 $
 2,151

 (1) Audit fees for fiscal years 2025 and 2024 consisted of fees for the quarterly reviews of our interim financial information and the audit of our annual consolidated financial statements. Audit fees also included fees for the preparation of the stand-alone financial statements for NCSC and Cooperative Securities. Audit fees for fiscal years 2025 and 2024 also included comfort letter fees and consents related to debt issuances and compliance work required by the independent auditors.
 (2) Audit-related fees for fiscal years 2025 and 2024 consisted of fees for certain agreed-upon procedures.
 (3) Tax fees consisted of assistance with matters related to tax compliance and consulting.
 (4) All other fees for fiscal year 2024 consisted of fees for our sustainability bond agreed-upon procedures.

 Item 15. Exhibits and Financial Statement Schedules

 (a)
 Financial Statement Schedules

 The following documents are filed as part of this Report in Part II, Item 8 and are incorporated herein by reference.

 1. Consolidated Financial Statements
 Page

 Report of Independent Registered Public Accounting Firm

 Consolidated Statements of Operations for the Years Ended May 31, 2025, 2024 and 2023

 Consolidated Statements of Comprehensive Income (Loss) for the Years Ended May 31, 2025, 2024 and 2023

 Consolidated Balance Sheets as of May 31, 2025 and 2024

 Consolidated Statements of Changes in Equity for the Years Ended May 31, 2025, 2024 and 2023

 Consolidated Statements of Cash Flows for the Years Ended May 31, 2025, 2024 and 2023

 Notes to Consolidated Financial Statements

 2. Schedules

 None.

 (b)
 Exhibits

 The following exhibits are incorporated by reference or filed herewith.

 EXHIBIT INDEX

 Exhibit No.

 3.1
 —
 Articles of Incorporation. Incorporated by reference to Exhibit 3.1 to our Form 10-K filed on August 28, 2014.

 3.2*

 —
 Amended Bylaws as approved by CFC's members on July 1, 2025.

 4.1
 —
 Description of Securities. Incorporated by reference to Exhibit 4.1 to our Form 10-K filed on July 31, 2019.

 4.2
 —
 Form of Capital Term Certificate. Incorporated by reference to Exhibit 4.1 to our Form 10-K filed on July 31, 2018.

 4.3
 —
 Indenture dated February 15, 1994, between the Registrant and First Bank National Association as trustee. Incorporated by reference to Exhibit 4.2 to our Form 10-Q filed on October 15, 2007.

 4.4
 —
 Form of indenture between CFC and Mellon Bank, N.A., as Trustee. Incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-3 filed on November 14, 1995 (Registration No. 33-64231).

 4.5
 —
 Indenture dated as of December 15,1987, between CFC and Chemical Bank, as Trustee. Incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-3ASR filed on November 24, 2008 (Registration No. 333-155631).

 4.6
 —
 First Supplemental Indenture between CFC and Chemical Bank, as Trustee. Incorporated by reference to Exhibit 4.2 to Registration Statement on Form S-3 filed on April 5, 1995 (Registration No. 33-58445).

 4.7
 —
 Indenture dated May 15, 2000, between the Registrant and Bank One Trust Company, National Association, as trustee. Incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-3ASR filed on March 21, 2025 (Registration No. 333-286024).

 4.8
 —
 First Supplemental Indenture dated March 12, 2007, between the Registrant and U.S. Bank National Association, as successor trustee. Incorporated by reference to Exhibit 4.2 to Registration Statement on Form S-3ASR filed on April 19, 2007 (Registration No. 333-142230).

 4.9
 —
 Indenture dated October 25, 2007, between the Registrant and U.S. Bank National Association, as trustee. Incorporated by reference to Exhibit 4.1 to Registration Statement on Form S-3ASR filed on October 26, 2007 (Registration No. 333-146960).

 4.10
 —
 Indenture dated October 15, 1996, between the Registrant and U.S. Bank National Association, as successor trustee. Incorporated by reference to Exhibit 4.1 to Form 8-K filed on October 28, 1996.

 10.1^
 —
 Plan Document for CFC's Deferred Compensation Pension Restoration Plan dated January 1, 2015 and as amended and restated on December 18, 2024. Incorporated by reference to Exhibit 10.7 to our Form 10-Q filed on January 13, 2025.

 10.2^
 —
 Plan Document for CFC's Deferred Compensation Program amended and restated February 1, 2014. Incorporated by reference to Exhibit 10.6 to our Form 10-K filed on August 28, 2014.

 10.3^
 —
 Plan Document for CFC's Executive Benefit Restoration Plan dated December 9, 2014. Incorporated by reference to Exhibit 10.1 to our Form 10-Q filed on April 13, 2015.

 10.4^
 —
 Employment Agreement, entered into and effective as of March 10, 2021, between the Company and J. Andrew Don. Incorporated by reference to Exhibit 10.1 to our Form 8-K filed on March 11, 2021.

 10.5^
 —
 First Amendment to Employment Agreement, entered into and effective as of February 29, 2024, between the Company and J. Andrew Don. Incorporated by reference to Exhibit 10.1 to our Form 8-K filed on March 5, 2024.

 10.6^

 —
 Supplemental Executive Retirement Plan of the Company, effective January 1, 2015. Incorporated by reference to Exhibit 10.2 to our Form 8-K filed on December 23, 2014.

 10.7
 —
 Amended and Restated Revolving Credit Agreement dated as of October 20, 2022 maturing on November 28, 2025. Incorporated by reference to Exhibit 10.1 to our Form 10-Q filed on January 13, 2023.

 10.8
 —
 Amendment No. 1 dated as of November 20, 2023 to the Amended and Restated Revolving Credit Agreement dated as of October 20, 2022 maturing on November 28, 2026. Incorporated by reference to Exhibit 10.1 to our Form 10-Q filed on January 12, 2024.

 10.9
 —
 Amendment No. 2 dated as of December 5, 2024 to the Amended and Restated Revolving Credit Agreement dated as of October 20, 2022 maturing on November 28, 2027. Incorporated by reference to Exhibit 10.1 to our Form 10-Q filed on January 13, 2025.

 10.10
 —
 Amended and Restated Revolving Credit Agreement dated as of October 20, 2022 maturing on November 28, 2026. Incorporated by reference to Exhibit 10.2 to our Form 10-Q filed on January 13, 2023.

 Exhibit No.

 10.11
 —
 Amendment No. 1 dated as of November 20, 2023 to the Amended and Restated Revolving Credit Agreement dated as of October 20, 2022 maturing on November 28, 2027. Incorporated by reference to Exhibit 10.2 to our Form 10-Q filed on January 12, 2024.

 10.12
 —
 Amendment No. 2 dated as of December 5, 2024 to the Amended and Restated Revolving Credit Agreement dated as of October 20, 2022 maturing on November 28, 2028. Incorporated by reference to Exhibit 10.2 to our Form 10-Q filed on January 13, 2025.

 10.13
 —
 Series A Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated June 14, 2005 for up to $1,000,000,000. Incorporated by reference to Exhibit 4.12 to our Form 10-K filed on August 24, 2005.

 10.14
 —
 Series A Future Advance Bond from the Registrant to the Federal Financing Bank dated June 14, 2005 for up to $1,000,000,000 maturing on July 15, 2028. Incorporated by reference to Exhibit 4.15 to our Form 10-K filed on August 24, 2005.

 10.15
 —
 Series B Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated April 28, 2006 for up to $1,500,000,000. Incorporated by reference to Exhibit 4.11 to our Form 10-K filed on August 25, 2006.

 10.16
 —
 Series B Future Advance Bond from the Registrant to the Federal Financing Bank dated April 28, 2006 for up to $1,500,000,000 maturing on July 15, 2029. Incorporated by reference to Exhibit 4.14 to our Form 10-K filed on August 25, 2006.

 10.17
 —
 Series C Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated September 19, 2008 for up to $500,000,000. Incorporated by reference to Exhibit 4.29 to our Form 10-Q filed on October 14, 2008.

 10.18
 —
 Series C Future Advance Bond from the Registrant to the Federal Financing Bank dated September 19, 2008 for up to $500,000,000 maturing on October 15, 2031. Incorporated by reference to Exhibit 4.32 to our Form 10-Q filed on October 14, 2008.

 10.19
 —
 Series D Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated as of November 10, 2010 for up to $500,000,000. Incorporated by reference to Exhibit 4.1 to our Form 10-Q filed on January 14, 2011.

 10.20
 —
 Series D Future Advance Bond from the Registrant to the Federal Financing Bank dated as of November 10, 2010 for up to $500,000,000 maturing on October 15, 2033. Incorporated by reference to Exhibit 4.4 to our Form 10-Q filed on January 14, 2011.

 10.21
 —
 Series E Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated as of December 1, 2011 for up to $499,000,000. Incorporated by reference to Exhibit 10.3 to our Form 10-Q filed on January 17, 2012.

 10.22
 —
 Series E Future Advance Bond from the Registrant to the Federal Financing Bank dated as of December 1, 2011 for up to $499,000,000 maturing on October 15, 2034. Incorporated by reference to Exhibit 10.6 to our Form 10-Q filed on January 17, 2012.

 10.23
 —
 Series F Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated as of December 13, 2012 for up to $424,286,000. Incorporated by reference to Exhibit 10.1 to our Form 10-Q filed in January 14, 2013.

 10.24
 —
 Series F Future Advance Bond from the Registrant to the Federal Financing Bank dated as of December 13, 2012 for up to $424,286,000 maturing on October 15, 2035. Incorporated by reference to Exhibit 10.4 to our Form 10-Q filed in January 14, 2013.

 10.25
 —
 Series G Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated as of November 21, 2013 for up to $500,000,000. Incorporated by reference to Exhibit 10.1 to our Form 10-Q filed in January 13, 2014.

 10.26
 —
 Series G Future Advance Bond from the Registrant to the Federal Financing Bank dated as of November 21, 2013 for up to $500,000,000 maturing on October 15, 2036. Incorporated by reference to Exhibit 10.3 to our Form 10-Q filed in January 13, 2014.

 10.27
 —
 Series H Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated as of November 18, 2014 for up to $250,000,000. Incorporated by reference to Exhibit 10.1 to our Form 10-Q filed on January 14, 2015.

 10.28
 —
 Series H Future Advance Bond from the Registrant to the Federal Financing Bank dated as of November 18, 2014 for up to $250,000,000 maturing on October 15, 2034. Incorporated by reference to Exhibit 10.3 to our Form 10-Q filed on January 14, 2015.

 10.29
 —
 Series K Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated as of March 29, 2016 for up to $250,000,000. Incorporated by reference to Exhibit 10.1 to our Form 10-Q filed on April 4, 2016.

 Exhibit No.

 10.30
 —
 Series K Future Advance Bond from the Registrant to the Federal Financing Bank dated as of March 29, 2016 for up to $250,000,000 maturing on January 15, 2039. Incorporated by reference to Exhibit 10.2 to our Form 10-Q filed on April 4, 2016.

 10.31
 —
 Series L Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated as of December 1, 2016 for up to $375,000,000. Incorporated by reference to Exhibit 10.3 to our Form 10-Q filed on January 13, 2017.

 10.32
 —
 Series L Future Advance Bond from the Registrant to the Federal Financing Bank dated as of December 1, 2016 for up to $375,000,000 maturing on October 15, 2039. Incorporated by reference to Exhibit 10.4 to our Form 10-Q filed on January 13, 2017.

 10.33
 —
 Series M Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated as of November 9, 2017 for up to $750,000,000. Incorporated by reference to Exhibit 10.3 to our Form 10-Q filed on January 11, 2018.

 10.34
 —
 Series M Future Advance Bond from the Registrant to the Federal Financing Bank dated as of November 9, 2017 for up to $750,000,000 maturing on July 15, 2042. Incorporated by reference to Exhibit 10.4 to our Form 10-Q filed on January 11, 2018.

 10.35
 —
 Series N Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated as of November 15, 2018 for up to $750,000,000. Incorporated by reference to Exhibit 10.3 to our Form 10-Q filed on January 11, 2019.

 10.36
 —
 Series N Future Advance Bond from the Registrant to the Federal Financing Bank dated as of November 15, 2018 for up to $750,000,000 maturing on July 15, 2043. Incorporated by reference to Exhibit 10.4 to our Form 10-Q filed on January 11, 2019.

 10.37
 —
 Series P Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated as of February 13, 2020 for up to $500,000,000. Incorporated by reference to Exhibit 10.1 to our Form 10-Q filed on April 10, 2020.

 10.38
 —
 Series P Future Advance Bond from the Registrant to the Federal Financing Bank dated as of February 13, 2020 for up to $500,000,000 maturing on July 15, 2054. Incorporated by reference to Exhibit 10.2 to our Form 10-Q filed on April 10, 2020.

 10.39
 —
 Series R Bond Purchase Agreement between the Registrant, Federal Financing Bank and Rural Utilities Service dated as of November 19, 2020 for up to $375,000,000. Incorporated by reference to Exhibit 10.1 to our Form 10-Q filed on January 12, 2021.

 10.40
 —
 Series R Future Advance Bond from the Registrant to the Federal Financing Bank dated as of November 19, 2020 for up to $375,000,000 maturing on July 15, 2055. Incorporated by reference to Exhibit 10.2 to our Form 10-Q filed on January 12, 2021.

 10.41
 —
 Series S Bond Purchase Agreement between the Registrant, the Federal Financing Bank and Rural Utilities Service dated as of November 4, 2021 for up to $550,000,000. Incorporated by reference to Exhibit 10.1 to our Form 10-Q filed on January 14, 2022.

 10.42
 —
 Series S Future Advance Bond from the Registrant to the Federal Financing Bank dated as of November 4, 2021 for up to $550,000,000 maturing on July 15, 2056. Incorporated by reference to Exhibit 10.2 to our Form 10-Q filed on January 14, 2022.

 10.43
 —
 Series T Bond Purchase Agreement between the Registrant, the Federal Financing Bank and Rural Utilities Services dated as of December 15, 2022 for up to $750,000,000. Incorporated by reference to Exhibit 10.3 to our Form 10-Q filed on January 13, 2023.

 10.44
 —
 Series T Future Advance Bond from the Registrant to the Federal Financing Bank dated as of December 15, 2022 for up to $750,000,000 maturing on July 15, 2057. Incorporated by reference to Exhibit 10.4 to our Form 10-Q filed on January 13, 2023.

 10.45
 —
 Series U Bond Purchase Agreement between the Registrant, the Federal Financing Bank and the Rural Utilities Service dated as of December 19, 2023 for up to $450,000,000. Incorporated by reference to Exhibit 10.3 to our Form 10-Q filed on January 12, 2024.

 10.46
 —
 Series U Future Advance Bond from the Registrant to the Federal Financing Bank dated as of December 19, 2023 for up to $450,000,000 maturing on July 15, 2058. Incorporated by reference to Exhibit 10.4 to our Form 10-Q filed on January 12, 2024.

 10.47
 —
 Series V Bond Purchase Agreement between the Registrant, the Federal Financing Bank and the Rural Utilities Service, dated as of December 18, 2024 for up to $450,000,000. Incorporated by reference to Exhibit 10.3 to our Form 10-Q filed on January 13, 2025.

 10.48
 —
 Series V Future Advance Bond from the Registrant to the Federal Financing Bank dated as of December 18, 2024 for up to $450,000,000 maturing on July 15, 2059. Incorporated by reference to Exhibit 10.4 to our Form 10-Q filed on January 13, 2025.

 Exhibit No.

 10.49
 —
 Eleventh Amended, Restated and Consolidated Pledge Agreement dated as of December 18, 2024 between the Registrant, the Rural Utilities Services and U.S. Bank National Association. Incorporated by reference to Exhibit 10.5 to our Form 10-Q filed on January 13, 2025.

 10.50
 —
 Eleventh Amended, Restated and Consolidated Bond Guarantee Agreement dated as of December 18, 2024 between the Registrant and the Rural Utilities Services. Incorporated by reference to Exhibit 10.6 to our Form 10-Q filed on January 13, 2025.

 10.51
 —
 Amended and Restated Master Sale and Servicing Agreement, dated as of August 12, 2011, by and between the Registrant and the Federal Agricultural Mortgage Corporation, as amended by Amendment No. 1 dated as of November 28, 2016. Incorporated by reference to Exhibit 10.7 to our Form 10-Q filed on January 13, 2017.

 10.52
 —
 Amended and Restated Master Note Purchase Agreement dated March 24, 2011 between the Registrant and Federal Agricultural Mortgage Corporation. Incorporated by reference to Exhibit 4.4 to our Form 10-Q filed on April 13, 2011.

 10.53
 —
 Fifth Amended and Restated First Supplemental Note Purchase Agreement dated January 14, 2025 for up to $6,500,000,000 between the Registrant and Federal Agricultural Mortgage Corporation. Incorporated by reference to Exhibit 10.1 to our Form 10-Q filed on April 11, 2025.

 10.54
 —
 Third Amended Restated and Consolidated Pledge Agreement dated January 14, 2025, between the Registrant, Federal Agricultural Mortgage Corporation and U.S. Bank National Association. Incorporated by reference to Exhibit 10.2 to our Form 10-Q filed on April 11, 2025.

 10.55
 —
 Long Term Standby Commitment to Purchase dated August 31, 2015, between the Registrant and Federal Agricultural Mortgage Corporation. Incorporated by reference to Exhibit 10.1 to our Form 10-Q filed on October 14, 2015.

 10.56
 —
 Amendment No. 1 to Long Term Standby Commitment to Purchase, dated as of May 31, 2016, between the Registrant and Federal Agricultural Mortgage Corporation. Incorporated by reference to Exhibit 10.38 to our Form 10-K filed on August 25, 2016.

 19.1

 —
 CFC Insider Trading and Investment Limitations Policy. Incorporated by reference to Exhibit 19.1 to our Form 10-K filed on August 1, 2024.

 Registrant agrees to furnish to the Securities and Exchange Commission a copy of all other instruments defining the rights of holders of its long-term debt upon request.

 23.1*
 —
 Consent of KPMG LLP.

 31.1*
 —
 Certification of the Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2*
 —
 Certification of the Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1
 —
 Certification of the Chief Executive Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.

 32.2
 —
 Certification of the Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.

 97.1

 —
 CFC Organization Policy 2.15 - Clawback Policy adopted October 5, 2023. Incorporated by reference to Exhibit 97.1 to our Form 10-K filed on August 1, 2024.

 101.INS*
 —

 101.SCH*
 —

 101.CAL*
 —

 101.LAB*
 —

 101.PRE*
 —

 101.DEF*
 —

 104.00
 —

 *Indicates a document being filed with this Report.
 ^Identifies a management contract or compensatory plan or arrangement.
 Indicates a document that is furnished with this Report, which shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section.

 Item 16. Form 10-K Summary

 None.

 SIGNATURES

 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Loudoun, Commonwealth of Virginia, on the 5th day of August 2025.

 NATIONAL RURAL UTILITIES COOPERATIVE

 FINANCE CORPORATION

 By:
 /s/ J. ANDREW DON

 Chief Executive Officer

 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

 Signature

 Title

 Date

 /s/ J. ANDREW DON

 Chief Executive Officer

 /s/ YU LING WANG

 Senior Vice President and Chief Financial Officer

 /s/ PANKAJ SHAH

 Vice President and Controller
 (Principal Accounting Officer)

 Pankaj Shah

 /s/ MARK A. SUGGS

 President and Director

 /s/ BRENT MCRAE

 Vice President and Director

 /s/ SHANE LARSON
 Secretary-Treasurer and Director

 /s/ CHARLES A. ABEL II

 /s/ JOHN BARTLEY

 John Bartley

 /s/ DONNIE BIDEGAIN

 /s/ JARED ECHTERNACH

 /s/ TIMOTHY ELDRIDGE

 /s/ BRUCE ANTHONY EVERHART

 /s/ WILLIAM KEITH HAYWARD

 William Keith Hayward

 /s/ MICHAEL J. HEINEN

 Michael J. Heinen

 /s/ JEANETTE INGRID KESSLER

 Jeanette Ingrid Kessler

 /s/ ANTHONY LARSON

 /s/ GEORGE MICHAEL MCDONALD

 George Michael McDonald

 /s/ JOHN METCALF

 /s/ KENDALL J. MONTGOMERY

 /s/ MICHAEL PARTIN

 Michael Partin

 /s/ SCOTT PETERS

 Scott Peters

 /s/ LAURA PHILLIPS

 Laura Phillips

 /s/ JEFFREY ALLEN REHDER

 Jeffrey Allen Rehder

 /s/ WILLIAM ANDREW ROBERTS

 William Andrew Roberts

 /s/ JAMES TAYLOR

 James Taylor