U.S. Department of Agriculture 

Rural Utilities Service 

Informational Publication 400-2 

RTB Annual Report

30tthh Anniversary

11997711 ttoo 22000011
August 2002 

The Honorable Ann M. Veneman 

Secretary of Agriculture 

U.S. Department of Agriculture 

Washington, DC 20250 

Dear Secretary Veneman: 

This report covers the activities of the Rural Telephone Bank for fiscal year 2001. It is respectfully 

submitted, on behalf of the Bank’s Board of Directors, for transmittal to the Congress pursuant to 

section 405(i) of the Rural Electrification Act of 1936, as amended. 

Sincerely, 

___________________________ 

Hilda Gay Legg 

Governor 
2001 Annual Report 

Contents Message from the 

Governor................................................................................................ 1 

Honoring the Past - 30 Years of 

Partnership............................................................................................ 2 

Fiscal Year 2001 

Highlights............................................................................................... 6 

Financial Statements................................................................................ 9 

Notes to the Financial 

Statements........................................................................................... 11 

Board of Directors ................................................................................. 21 

Management Hilda Gay Legg........................................................................... Governor 

Roberta D. Purcell............................................................Assistant Governor 

Jonathan P. Claffey..................Deputy Assistant Governor & Assistant Secretary 

Kenneth Ackerman..........................................................Assistant Treasurer 

Cheryl L. Gamboney............................................................Financial Analyst 

Independent Auditors 

 Gardiner, Kamya & Associates, P.C., Washington, D.C. 

Limitation on Financial Statements 

The financial statements have been prepared to report the financial position and results of 

operations of the Bank, pursuant to the requirements of the Chief Financial Officers Act of 

1990 and 31 U.S.C. 3515(b). While the statements have been prepared from the books and 

records of the Bank in accordance with the formats prescribed by the Office of Management 

and Budget, the statements are in addition to the financial reports used to monitor and 

control budgetary resources which are prepared from the same books and records. The 

statements should be read with the realization that they are for a component of the U.S. 

Government, a sovereign entity. One implication of this is that liabilities cannot be liquidated 

without legislation that provides resources to do so. 
1 

Message from the Governor 

Dear Shareholders: 

Secretary Ann M. Veneman and all United States Department of Agriculture employees 

across the country extend their heartfelt condolences to all those impacted by the 

tragedies of September 11. We honor the brave men and women who have put their 

lives on the line to protect and defend this great Nation.

As we come to terms with the odious events that occurred in our Nation, it is good to remember that 

the United States has triumphed over difficult times before and we will do so again. In 2002, it is important for 

us to look forward and to make this coming year a year of healing and promise for a strong and safe nation. 

The Rural Utilities Service (RUS) and Rural Telephone Bank (Bank) are committed to strengthening 

rural America’s telecommunications systems by continuing to rapidly respond to your financing needs. 

As we celebrate the 30th anniversary of the Bank, we can inform you that 2001 has been a very 

successful year. During 2001, loans approved totaled $174.6 million bringing the total loans approved since 

inception to $3,930,964,380. Loans to commercial companies topped $2.8 billion, loans to cooperative 

borrowers increased to $1.2 billion, and loans to public bodies rose to $23.3 million. 

Also in 2001, the Board declared a cash dividend of 5.45 percent on Class C stock. This represented 

the 29th consecutive annual dividend by the Bank. Until all Class A stock is retired, the dividend rate on 

Class C stock cannot be greater than the average interest rate payable on the Bank’s outstanding debt; that 

rate was 6.43 percent at the time the dividend was declared. A patronage refund was also declared for fiscal 

year 2001. 

The Bank continues to play a vital role in ensuring reasonable interest rates on loans to 

telecommunications carriers in rural areas --- allowing them the means to connect our world and invest in our 

future! The dedicated borrowers of the RUS and Bank telecommunications program have been hard at work 

for many decades, providing solutions to problems associated with serving rural America. Progress is being 

made and there are successes being achieved everyday. Rural carriers are providing more access and a 

higher deployment rate of access everyday. The deployment of advanced service by rural carriers is truly 

impressive. 

I wish to thank those who contributed information and photographs for our annual report. The stories 

and memories provided to us by our borrowers are irreplaceable. I truly admire the Bank and RUS borrowers 

for their dedication and accomplishments. 

As always, we appreciate your support and commitment to rural America. We look forward to 

communicating with you in the future. 

Cordially, 

Hilda Gay Legg 

Governor 
2 

Honoring the Past – 30 Years of Partnership 

Deputy Governor E.C. Weitzell selects out of hat the names of the first companies receiving 

Rural Telephone Bank loans, as Governor David Hamil looks on. 

This year is the 30th anniversary of the Rural Telephone Bank. Over the years, 

many Bank borrowers have grown and prospered. To show some of the 

accomplishments our borrowers have achieved, a retrospective of three of the first 

companies to receive loans from the Bank is presented on the following pages. 
3 

Plant Telecommunications 

From 1895 to 2002! 

In 1971, Plant Telecommunications, formerly Plant Telephone and Power Company, Inc., had 

33 employees and approximately 4,000 customers. Today, Plant Telecommunications has 75 

employees and more than 10,600 line-based customers. Since 1971, Plant Telecommunications has 

increased profit by a factor of 20 while maintaining strong values and the highest customer service. 

Financial assistance provided by the Rural Telephone Bank has helped Plant Telecommunications to 

grow to be one of the largest family-owned telephone companies in the state of Georgia, with a service area 

covering 875 square miles and spanning over 13 counties. The company has expanded to offer a full line of 

telecommunications services: local and long distance, telephone business systems and service, pagers, 

voicemail, voicemail menu service, Internet, DSL, Web hosting and design, and broadband satellite Internet 

service. Plant’s Internet access spans 35 counties in South Georgia. 

Plant Telecommunications has been recognized for its hard work and dedication by receiving several 

awards. In 2001, the company was named the Georgia Family Business of the Year by the Cox Family 

Enterprise Center. In April of this year, they received the 2002 Cox Century Award. “In a time when trust in 

both family and business is more important than ever, these businesses embody the best Georgia has to 

offer,” said Cox Family Enterprise Center Director Joe Astrachan. 

Washington, D.C., January 1972...... 

David A. Hamil, Governor of the Rural 

Telephone Bank, approves a loan of 

$557,500 to the Plant Telephone & 

Power Company, Inc., Tifton, Georgia. 

Even though the company has expanded and changed through the generations, the family 

commitment to the business has remained constant. Governor Zell Miller recognized Plant’s dedication to 

excellence in 1996 when he proclaimed September 20 as Plant Telecommunications Day in Georgia. 
4 

Eastex Telephone Cooperative 

From 1950 to 2002! 

Eastex Telephone Cooperative Headquarters, 2002 

 

When first established back in 1950, Eastex Telephone Cooperative provided basic telephone 

service to one rural county. Today, Eastex provides wireline and wireless telephone service, voicemail, 

and Internet service, DSL and satellite to eleven counties in rural Texas. In the late 1940's, the 

residents of rural Rusk County, Texas, and adjoining counties were unable to obtain telephone service 

from any existing telephone company. Several companies had been contacted and they all gave the 

same story, "It's just not feasible." 

 In November 1949, Congress passed an Amendment to the Rural Electrification Act providing 

that loans could be made to existing telephone companies and newly established telephone 

cooperatives. In January 1950, work was started toward establishing a cooperative in Rusk County. 

After several months of hard work, a loan was approved by the Rural Electrification Administration (REA, 

predecessor to the RUS), and on June 2, 1950, an organizational meeting was held. Later that month, a 

Charter was granted to the Eastex Telephone Cooperative--this charter was one of the first granted. 

There were only fourteen people present at the organizational meeting and seven of them were selected 

to serve on the Board of Directors. 

 Beginning with six employees, Eastex has grown to employ 137 people full-time. In 1972, 

Eastex’s profit was $300,000; however, with financing assistance from the Rural Telephone Bank, 

Eastex has grown to a present day net margin of more than $7.5 million. 

Today, Eastex Telephone has grown to 21 exchanges 

with all digital switching equipment, 200 miles of fiber optic and 

4,000 route miles of buried cable. Eastex provides only oneparty telephone service to over 30,000 subscribers in eleven 

counties. 

The directors and employees are proud of what has 

been accomplished. As one of the largest telephone 

cooperatives in the state of Texas, Eastex has a truly enviable 

growth record for a cooperative which began with only 204 

subscribers. 

Eastex employees testing lines from the central office 

mainframe. 

Photos courtesy of Eastex Telephone Cooperative.
5 

Pioneer Communications

From 1950 to 2002! 

"It shall be the aim of The Pioneer Telephone Association, Inc. to 

provide dependable area-wide telephone service on the 

cooperative plan and at the lowest cost consistent with sound 

economy and good management." 

--From the January 16, 1951, minutes of the Board of Directors 

meeting of the Pioneer Telephone Association

Pioneer Communications Headquarters, 2002 

 On October 27, 1950, a group of representatives from five counties in Kansas met in Ulysses at 

the offices of the local electric cooperative. The meeting was the culmination of numerous conferences 

and get-togethers of citizens interested both in improving existing telephone service and in bringing 

service to rural areas. The group decided to take the necessary steps to determine if interest existed in 

the formation of a telephone cooperative. 

 In January of 1951, an option to purchase the telephone properties of the Border Telephone 

Company located in Hamilton and Stanton counties was executed. An option was also made to buy the 

F & M Telephone Company which served the counties of Ulysses and Grant. All purchases were 

contingent upon procuring an REA loan and obtaining Kansas Corporation Commission approval. In 

June of 1951, REA approved a loan in the amount of $1,089,000. 

Pioneer Communications has operated from its current headquarters since 1956 and in 

existence since 1950, providing Southwest Kansans with the highest quality service at the lowest 

possible costs for more than four decades. Today's rapid growth and development in the 

telecommunications industry and related technologies has prompted new growth and development at 

Pioneer Communications. 

Pioneer Communications began with 23 full-time employees where currently they employ 123 

people. Pioneer has profited tremendously throughout the years with an average increase of 39% 

yearly. Their services include; wireline and wireless telephone service, long distance service, paging, 

Internet including dial-up and broadband, and cable service. With more than 15,000 customers Pioneer 

Communications is ensuring affordable and quality telecommunication services to rural residents. 

In January of 1990, Pioneer activated a two-way interactive instructional video network that tied 

together schools in nine cities. It was the first system of its type to be installed in Kansas and the first 

fully digital two-way interactive switched system in service in the United States. Pioneer 

Communication’s commitment to excellence in the telephone industry, and their belief on focusing on 

the future will ensure them to have a strong future connecting rural Kansas. 

A special thank you to RUS student interns Rachel Wyatt and Mauricio Agudelo who provided invaluable 

assistance. Their extensive editorial support, data collection, and research contributed enormously to the

anniversary report. 
6 

Fiscal Year 2001 Highlights 

Loan Funds Advanced 

The Federal Credit Reform Act of 1990 restructured the methodology by which the Bank obtains and advances loan 

funds. Specifically, Credit Reform “divided” the Bank’s loan program by accounting for loans made before fiscal 

year 1992 (liquidating account loans) differently from loans made during and after fiscal year 1992 (financing 

account loans). The Bank advanced $62.0 million in funds to borrowers in fiscal year 2001; $6.6 million in liquidating 

account loans and $55.4 million in financing account loans. Over the last five years, Bank advances have averaged 

$56.7 million annually. 

 

Loan Funds Advanced

0

20

40

60

$ millions

Financing 34 34 39.2 31.4 55.4

Liquidating 33 21 17.8 10.4 6.6

1997 1998 1999 2000 2001

Interest Rates for Loan Funds Advanced 

In addition, Credit Reform results in two interest rates for loan funds advanced to borrowers after fiscal year 

1991. The interest rate for variable rate loans approved prior to fiscal year 1992 and advanced in fiscal year 

2001 was 5.95 percent (liquidating), the rate for loans approved during fiscal years 1992 through 2001 and 

advanced in fiscal year 2001, was 5.17 percent (financing). 

 

Interest Rates for Loan Funds Advanced

5.0%

5.5%

6.0%

6.5%

7.0%

1997 1998 1999 2000 2001

Financing Liquidating
7 

Repaid Principal and Interest 

During fiscal year 2001, borrowers paid $147 million in principal and $78.7 million in interest. The interest 

figure includes $1.7 million in prepayment premiums. As of fiscal year ending 2001, payments made to the 

Bank amounted to $1,743.3 million in principal and $2,377.8 million in interest.

Stock Redemption 

No additional Class A stock was purchased by the Government during fiscal year 2001. The cumulative total 

of Class A stock purchases to date is $592.1 million. In accordance with Board Resolution 2001-2, $23.8 

million in Class A stock was redeemed on September 30, 2001; leaving a net outstanding of $452.9 million. 

This was the sixth consecutive annual redemption of Class A stock. 

Stock A Redemption

(Net Outstanding)

$556 $528 $501.8 $476.7 

$574.1 

$452.9 

$0

$200

$400

$600

$800

1996 1997 1998 1999 2000 2001

$ millions

 

 

Stock A Redemption

(Amount Retired)

$27.8 $26.4 $25.1 $23.8

$18 $18.1

$0

$5

$10

$15

$20

$25

$30

1996 1997 1998 1999 2000 2001

$ millions

$0

$1,000,000,000

$2,000,000,000

$3,000,000,000

1975 1980 1985 1990 1995 2000 2001

Cumulative Total Payments of Principal and Interest

Principal Paid Interest Paid
8 

Interest Income and Patronage Capital Assignable 

Restricted capital and patronage capital at the end of fiscal year 2001 totaled $95.7 million. During fiscal year 

2001, interest and other income was $138.3 million. Expenses amounted to $20.0 million, leaving an excess 

of revenues and other financing sources over total expenses of $116.6 million. A return of $9.5 million paid to 

the U.S. Treasury and a cash dividend of $20.6 million paid to Class C stockholders resulted in patronage 

capital assignable of $86.5 million. 

 

$92

$115.8 $116 $113 $116.6

$0

$20

$40

$60

$80

$100

$120

$ m illio n s

1997 1998 1999 2000 2001

Excess of Revenue and Other Sources over 

Total Expenses

Stock Sales 

Bank borrowers purchased $2.9 million in Class B stock, bringing the cumulative total purchased to $135.9 million. 

Total Class B stock outstanding, including patronage refunds and net of amounts converted to Class C stock, 

decreased by $14.8 million during fiscal year 2001, to $666.7 million. Cumulative Class C stock rose to $447.7 

million, an increase of $102.9 million during fiscal year 2001. 

Stockholder Equity

($millions)

Class A

29%

Class C

29%

Class B

42%

$452.9 

$666.7 

$447.7 
9 

Financial Statement 

As of September 30, 2001 

(in dollars) 

Balance Sheet

Assets 

 Assets for Use by Entity: 

 Federal 

 Fund Balance with Treasury (Note 2) $ 904,650,796 

 Non-Federal 

 Credit Program Receivables, Net (Note 3) 1,069,670,859

 Total Assets 1,974,321,655

Liabilities 

 Liabilities Covered by Budgetary Resources: 

 Federal 

 Accounts Payable $ 3,118,000 

 Debt (Note 4) 272,733,633 

 Non-Federal 

 Other Liabilities (Note 5) 20,675,583

 Total Liabilities 296,527,216

Commitments and Contingencies (Note 6) 

Net Position 

 Unexpended Appropriations (Note 7) 19,115,171

 Federal 

 Equity of the U.S. Government 

 Capital Stock Class A 452,865,475 

 Subsidy Re-estimates (4,395,000)

 Total Equity of the U.S. Government 448,470,475

 Non-Federal 

 Investment of Others 

 Capital Stock Class B 666,730,835 

 Capital Stock Class C 447,722,000 

 Restricted Capital 10,000,003 

 Patronage Capital Earned 85,755,955

 Total Investment of Others 1,210,208,793

 Total Net Position 1,677,794,439

 Total Liabilities and Net Position $ 1,974,321,655

Statement of Budgetary Resources

Budgetary Resources: (Note 9) 

 Budget Authority $ 163,057,341 

 Unobligated balances – beginning of period 642,636,296 

 Spending Authority from offsetting collections 292,183,424 

 Adjustments (89,840,190)

 Total budgetary resources $ 1,008,036,871

Status of Budgetary Resources: 

 Obligations incurred $ 230,606,932 

 Unobligated balances-available 12,298 

 Unobligated balances-not available 777,417,641

 Total status of budgetary resources $ 1,008,036,871

Outlays: 

 Obligations incurred $ 230,606,932 

 Less: actual spending authority from offsetting collections and actual adjustments (323,300,659) 

 Obligated balance, net - beginning of period 1,038,758,567 

 Less: obligated balance, net - end of period (1,123,328,441)

 Total outlays $ (177,263,601)

The accompanying notes are an integral part of these statements. 
10 

Financial Statements 

For the Year Ended September 30, 2001 

(in dollars) 

Statement of Net Cost

Costs: 

Program Costs 

Federal $ 23,018,400 

Non-Federal 

 Loans - Subsidy Expense (Note 3) 2,380,534 

 Other Program Costs 1,310,470

Total Program Production Costs 26,709,404 

Less Earned Revenues (Note 8) (137,229,307)

Net Cost of Operations $ (110,519,903)

Statement of Changes in Net Position

Net Cost of Operations $ 110,519,903 

Financing Sources (other than exchange revenues): 

 Appropriations Used 7,749,934 

 Transfers-out (32,854,882) 

 Changes in: 

 Capital Stock - Redemption of Class A Stock (23,835,025) 

 Investment of Others 2,799,071

Net Change in Cumulative Results of Operations 64,379,001 

Increase (Decrease) in Unexpended Appropriations (697,071)

Change in Net Position 63,681,930 

Net Position-Beginning of Period 1,614,112,509

Net Position-End of Period $ 1,677,794,439

Statement of Financing

Resources Used to Finance Operations 

 Budgetary 

 Budgetary Resources Obligated for Items to be Received or Provided to Others $ 230,606,932 

 Less: Offsetting Collections, Recoveries of Prior-years Authority, and Changes in 

 Unfilled Customer Orders (323,285,809)

 Net Budgetary Resources Used to Finance Operations (92,678,877)

Total Resources Used to Finance Operations (92,678,877)

Less: Resources Used to Fund Items not Part of the Net Cost of Operations 

 Increase or (Decrease) in Budgetary Resources Obligated to Order Goods or 

 Services not yet Received or Benefits not yet Provided 114,452,851 

 Budgetary Offsetting Collections not Increasing Exchange Revenue or Decreasing Expense (156,174,760) 

 Adjustments Made to Compute Net Budgetary Resources not Affecting Net Cost of Ops. 57,276,762 

 Resources Funding Expenses Recognized in Prior Year 0

Total Resources Used to Fund Items not Part of the Net Cost of Operations 15,554,853

Resources Used to Finance the Net Cost of Operations (108,233,730)

Components of Net Cost of Operations not Requiring or Generating Resources 

 During the Reporting Period 

 Expenses or Exchange Revenue Related to the Disposition of Assets or Liabilities, 

 or Allocation of their Cost over Time (2,627,173) 

 Expenses which will be Financed with Budgetary Resources Recognized in Future Periods 341,000

Total Components of Net Cost of Operations not Requiring or Generating Resources 

 During the Reporting Period (2,286,173)

Net Cost of Operations $ (110,519,903)

The accompanying notes are an integral part of these statements. 
11 

Notes to the Financial Statements 

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES 

A. Reporting Entity 

The Rural Telephone Bank (RTB), established in May 1971, provides a supplemental source of financing under the Rural 

Utilities Service's telephone loan program. The Rural Utilities Service (RUS) is a credit agency within the U.S. Department 

of Agriculture (USDA) which assists rural electric and telephone organizations in obtaining the financing required to provide 

electric and telephone service in rural areas. RTB lends principally to rural telephone organizations. 

RTB is a government corporation which functions as an agency of the U.S. Department of Agriculture, subject to the 

supervision and direction of the Secretary of Agriculture. As provided by law, the Administrator of RUS serves as the 

Governor of RTB. In this capacity, the Governor may exercise and perform all of RTB's functions, powers, and duties, 

except for matters specifically reserved for its Board of Directors. As discussed below, upon retirement of the Class A stock 

held by the U.S. Government, the RTB would no longer operate as an integral agency of the Government. 

Adverse changes in the telephone industries could have a direct and material impact on the financial capacity of RTB 

borrowers to provide for the repayment of loans. 

B. Basis of Presentation 

The accompanying financial statements have been prepared to report the financial position, net costs, and changes in net 

position of RTB as required by the Government Management Reform Act of 1994 and in conformity with generally accepted 

accounting principles (GAAP). GAAP for federal financial reporting entities recognize the Federal Accounting Standards 

Advisory Board (FASAB) as the standards-setting body designated to establish these principles for these entities. The 

financial statements have also been prepared from the books and records of RTB in accordance with the form and content 

for entity financial statements specified by the Office of Management and Budget (OMB) Bulletin 97-01, Form and Content 

of Agency Financial Statements, as amended, except that credit subsidy reestimates are presented as a separate line item 

within total equity of the U.S. Government. The financial statements also follow USDA accounting policy guidelines. 

C. Basis of Accounting

RTB's transactions are recorded on the accrual basis of accounting and with respect to certain information regarding 

budgetary resources and financing, a budgetary accounting basis. Under the accrual method, revenues are recognized 

when earned, and expenses are recognized when a liability is incurred. Budgetary accounting facilitates compliance with 

legal constraints and controls over the use of Federal funds. 

Any significant interfund and intrafund balances and transactions have been eliminated in the consolidation of the pre and 

post credit reform lending programs. 

D. Fund Balance with United States Treasury 

RTB maintains all cash accounts with the United States Treasury. It is the policy of RTB not to maintain cash in commercial 

bank accounts, except in the normal course of processing cash receipts through third-party commercial banking institutions. 

Fund Balance with Treasury represents appropriated and revolving funds that are available to pay current liabilities and 

finance authorized loan commitments. RTB earns interest on all cash balances maintained at the Treasury in accordance 

with the terms of the 1973 note executed by RTB and U.S. Treasury, Section 505(c) of the Federal Credit Reform Act of 

1990 and recent legislation (Public Law 106-78). 

E. Credit Program Receivables, Net

Loans are accounted for as receivables after funds are disbursed. Loans receivable are carried at the principal amount 

outstanding, net of an allowance for estimated uncollectible amounts for pre-fiscal year 1992 loans. For direct loans 

obligated on or after October 1, 1991, RTB recognizes these assets at the present value of their estimated net cash inflows. 

The difference between the outstanding principal of the loans and the present value of their net cash inflows is recognized 

as a subsidy cost allowance (Note 3). All loans receivable are due from non-federal borrowers and accrue interest daily 

based on the contractual interest rate. 

RTB's allowance is estimated based on delinquency rates, current economic conditions, borrowers' credit histories, 

borrowers' outstanding balances, and an analysis of each borrower's financial condition. 

The projected cost of direct loan defaults (for loans obligated prior to October 1, 1991) will not necessarily reflect RTB's 

future appropriation requests. To the extent that fund revenues are not sufficient to fund future costs, financing will have to 

be obtained from future appropriations, or other congressionally approved sources. 
12 

The Credit Program Receivable footnote has been prepared to improve financial reporting for subsidy costs and 

performance of Federal credit programs as required by May 2000 Statement of Federal Financial Accounting Standard No. 

18, Amendments to Accounting Standards for Loans and Loan Guarantees. RTB implemented this reporting requirement in 

fiscal year 2001, and therefore the fiscal year 2000 information is presented for comparative purposes and has not been 

audited. 

F. Liabilities 

Liabilities are recognized for amounts of probable future outflows or other sacrifices of resources as a result of past 

transactions or events. Since RTB is a component of the United States Government, a sovereign entity, its liabilities cannot 

be liquidated without legislation that provides resources to do so. Payments of all liabilities other than contracts can be 

abrogated by the sovereign entity. 

Liabilities Covered by Budgetary Resources are those liabilities funded by available budgetary resources including: (1) new 

budget authority, (2) spending authority from offsetting collections, (3) recoveries of unexpired budget authority, (4) 

unobligated balances of budgetary resources at the beginning of the year, and (5) permanent indefinite appropriation or 

borrowing authority. All of RTB's liabilities are covered by budgetary resources. 

 Accounts Payable 

Accounts payable consist solely of amounts payable to the United States Treasury based on credit reform subsidy 

reestimates. 

 Debt - United States Treasury 

As required under Credit Reform legislation, a note was executed by RTB with the United States Treasury which provides 

funds for direct loans approved after September 30, 1991 (Post-1991). The interest rate charged to RTB is the average 

annual Treasury rate, as provided by the Office of Management and Budget (OMB). For loans approved prior to October 1, 

1991 (Pre-1992), Treasury funding is provided, when needed, in accordance with the terms of a note executed by RTB and 

Treasury in July 1973. RTB has not borrowed against the note for several years since the pre 1992 fund balance is 

sufficient to advance new loans. In addition, the pre 1992 outstanding debt balance was repaid in August 2001. 

G. Stock Conversion 

In accordance with its authorizing legislation and amendments, RTB will be converted to independent status at such time 

when 51 percent of the Class A stock issued to the U.S. Government (and outstanding at any time since 

September 30, 1985) has been fully redeemed and retired. When such conversion occurs, RTB will no longer be an agency 

of the USDA and the President will cease to appoint Board members. However, after the conversion, Congress may still 

continue its oversight responsibilities for RTB's operations.

H. Operations

The Rural Electrification Act of 1936, as amended, and RTB's enabling legislation, authorize RTB to partially or jointly use 

the facilities and services of employees of RUS, or of any other agency of the USDA, without cost. Under the Federal Credit 

Reform Act, $3 million of appropriated funds provided to RTB to cover administrative costs were transferred to RUS. This 

amount represents the additional cost to RUS for managing RTB. In this regard, RTB's operations are conducted by RUS 

administrative and program employees who have similar responsibilities under RUS's rural telephone loan program. 

I. Intra-Governmental Relationships and Transactions 

In the course of its operations, RTB has relationships and financial transactions with other Federal agencies. The more 

prominent of these are with RUS and the United States Treasury. RUS determines the annual cost allocations associated 

with the administration of RTB by RUS employees and the Treasury receives the collections of proceeds from direct loans 

issued on behalf of RTB. At the Government-wide level, the liabilities related to the debt payable to Treasury on RTB's 

financial statements and the corresponding assets on the Treasury's financial statements should be eliminated. 
13 

NOTE 2: FUND BALANCE WITH TREASURY

2001

 Obligated Unobligated Total

Revolving Funds 

Appropriated Funds 

Total Fund Balance with Treasury 

 $ 116,659,164 

 16,180,546

 $ 132,839,710

 Available

$ 768,876,461 

 12,298

$ 768,888,759 

 Expired 

 Authority

 $ 0 

 2,922,327

 $ 2,922,327

 $ 885,535,625 

 19,115,171

 $ 904,650,796 

 

2000

 Obligated Unobligated Total

Revolving Funds 

Appropriated Funds 

Total Fund Balance with Treasury 

 $ 120,024,489 

 14,745,621

 $ 134,770,110

 Available

$ 636,335,113 

 424,345

$ 636,759,458 

 Expired 

 Authority

 $ 0 

 4,642,276

 $ 4,642,276

 $ 756,359,602 

 19,812,242

 $ 776,171,844 

NOTE 3: DIRECT LOANS, NON FEDERAL BORROWERS 

Purpose

The Rural Telephone Bank (RTB) was created by Public Law 92-12 on May 7, 1971. The RTB was designed to assure 

rural telephone systems access to private sources of capital. It did this by establishing a supplemental credit mechanism to 

which borrower systems may turn for all or part of their future capital requirements. The RTB is owned by the U.S. 

Government, its borrowers, former borrowers, and other related organizations authorized to invest. The RTB operates on a 

cooperative basis and earnings, in excess of the annual return of 2 percent required on the Government's investment, are 

returned to the non-Government owners as patronage refunds. 

RTB makes telecommunications loans to public bodies, cooperative, nonprofit, limited association or mutual associations. 

RTB loans are made concurrently with Rural Utilities Service (RUS) cost-of-money loans to finance the improvement, 

expansion, construction, and acquisition of systems or facilities that improve telephone service in rural areas. However, 

RTB does not finance station apparatus owned by the borrower, headquarters facilities, and vehicles not used primarily in 

construction. 

Eligibility

To be eligible, a borrower must be incorporated and must provide or propose to provide the basic local exchange telephone 

service needs of rural areas. A borrower must demonstrate that the average number of proposed subscribers per mile of 

line in the service area of the borrower is less than or equal to 15, or the borrower has a projected Times Interest Earned 

Ratio (borrowers net income after taxes plus interest expense, all divided by interest expense) of at least 1.0 but not greater

than 5.0. Additionally, the borrower must participate in an approved telecommunications modernization plan for the state. 

Repayment Period and Interest Rates

Loans must be repaid within a period that approximates the expected useful life of the facilities to be financed, not to exceed

35 years. Generally, interest is payable each month as it accrues. Principal payments on each note generally are 

scheduled to begin 2 years after the date of the note. After this deferral period, interest and principal payments on all funds 

advanced during this 2-year period are scheduled in equal monthly installments. RTB loans will bear interest at a rate equal 

to the cost of funds to RTB. However, the rate will not be less than 5 percent. 

Servicing Options 

RTB may extend the time of payment of principal or interest on a loan. This extension may be up to 5 years after such 

payment is due. Payment may be deferred as long as necessary in disaster situations so long as the final maturity date is 

not later than 40 years after the date of the loan. 
14 

Accounting Policy 

Direct loan obligations made prior to FY 1992 are reported on a net realizable value (NRV) basis. Direct loan obligations 

made after FY 1991 are governed by the Federal Credit Reform Act. The Act provides that the present value of the subsidy 

costs (i.e., interest rate differentials, interest subsidies, delinquencies and defaults, fee offsets 

and other cash flows) associated with direct loans be recognized as a cost in the year the loan is made. The net present 

value (NPV) of loans receivable at any point in time is the amount of the gross loan receivable less the present value of the 

subsidy at that time.

The Credit Program Receivable footnote has been prepared to improve financial reporting for subsidy costs and 

performance of Federal credit programs as required by the May 2000 Statement of Federal Financial Accounting Standard 

No. 18, Amendments to Accounting Standards for Loans and Loan Guarantees. RTB implemented this reporting 

requirement in fiscal year 2001, and therefore the fiscal year 2000 information is presented for comparative purposes and 

has not been audited. 

Direct Loans Obligated Prior to FY 1992 (Allowance for Loss Method):

 2001 2000

Loans Receivable, Gross $ 793,902,283 $ 923,673,900 

Interest Receivable $ 2,815,782 $ 2,483,485 

Allowance for Loan Losses $ (5,703,321) $ (6,396,633) 

Value of Assets Related to Direct 

 Loans 

 

$ 791,014,744 

 

$ 919,760,752 

Direct Loans Obligated After FY 1991 (Present Value Method): 

 2001 2000

Loans Receivable, Gross $ 290,794,551 $ 246,163,246 

Interest Receivable 

 

$ 251,165 

 

$ 113,912 

Allowance for Subsidy Cost 

 (Present Value) 

 

$ (12,389,601) 

 

$ (9,123,793) 

Value of Assets Related to Direct 

 Loans 

 

$ 278,656,115 

 

$ 237,153,365 

Total Portfolio Value of Assets Related 

 To Direct Loans 

 

$ 1,069,670,859 

 

$ 1,156,914,117 

Total Amount of Direct Loans Disbursed: 

 2001 2000

Direct Loans Obligated Prior to FY 1992 

 

$ 6,384,970 

 

$ 10,994,885 

Direct Loans Obligated After FY 1991 

 

$ 52,767,444 

 

$ 29,962,912 
15 

Subsidy Expense for Direct Loans by Program and Component:

Subsidy Expense for New Direct Loans Disbursed 

 2001 2000

Interest Differential $ 676,141 $ 372,693 

Defaults $ 10,494 $ 5,305 

Fees and Other Collections $ (56,117) 

Other $ 15,899 $ (2) 

Total 

 

$ 702,534 

 

$ 321,879 

Reestimates 

 2001 2000

Interest Rate Reestimates $ 11,135,000 $ (5,995,000) 

Technical Reestimates $ (9,457,000) $ 5,635,000 

Total $ 1,678,000 $ (360,000) 

Total Direct Loan Subsidy Expense: 

 

$ 2,380,534 

 

$ (38,121) 

Subsidy Rates for Direct Loans by Program and Component:

Budget Subsidy Rates for Direct Loans by Program and Component 

 2001 2000

Interest Differential 1.60% 1.28% 

Defaults 0.03% 0.04% 

Other Collections -0.15% 0.56%

Total 1.48% 1.88%

 

Schedule for Reconciling Subsidy Cost Allowance Balances:

(Post- FY 1991 Direct Loans) 

Beginning Balances, Changes, and Ending Balances FY 2001 FY 2000

Beginning balance of the subsidy cost allowance: $ 9,123,793 $ 9,115,495 

Add: subsidy expense for direct loans disbursed during the reporting years by 

component: 

 (a) Interest rate differential costs 676,141 372,693 

 (b) Default costs (net of recoveries) 10,494 5,305 

 (c) Fees and other collections 15,899 (56,119)

 Total of the above subsidy expense and components $ 702,534 $ 321,879

Adjustment: 

 (a) Subsidy allowance amortization 2,003,781 889,419 

 (b) Other (74,508) (66,000) 

Ending balance of the subsidy cost allowance before reestimates $ 11,755,600 $ 10,260,793 

Add or subtract subsidy reestimates by component: 

 (a) Interest rate reestimate 11,135,000 (5,995,000) 

 Less: interest income amortized above (1,044,000) (777,000) 

 (b) Technical/default reestimate (9,457,000) 5,635,000

 Total of the above reestimate components $ 634,000 $ (1,137,000)

Ending balance of the subsidy cost allowance $ 12,389,600 $ 9,123,793

 FY 2001 FY 2000

Administrative Expense $ 2,993,400 $ 3,000,000
16 

NOTE 4: DEBT

 2001

 Beginning 

 Balance 

 Net 

 Borrowings 

 Ending 

 Balance 

Federal Debt 

Interest Bearing: 

 Debt to the Treasury $ 295,202,110 $ (22,468,477) $ 272,733,633

 2000

 Beginning 

 Balance 

 Net 

 Borrowings 

 Ending 

 Balance 

Federal Debt 

Interest Bearing: 

 Debt to the Treasury $ 307,831,271 $ (12,629,161) $ 295,202,110

Legislation limits outstanding borrowings from the U.S. Treasury to an amount which shall not exceed twenty times RTB's equity. 

As of September 30, 2001 and 2000, RTB’s maximum borrowing authority approximated $33 billion, and $32 billion, respectively. 

All Federal debt is covered by budgetary resources. 

NOTE 5: OTHER LIABILITIES 

Dividends declared and unpaid on Class C Stock to non-federal recipients in the amount of $ 20.7 million and $18 million as of 

September 30, 2001 and 2000, and are payable on December 15, 2001. This liability is covered by budgetary resources. 

NOTE 6: COMMITMENTS AND CONTINGENCIES

The RTB has in the course of its loan making activities, unliquidated loan obligations which, in the absence of contractual 

violations or cancellations, will require disbursements. Unliquidated loan obligations at September 30, 2001 and 2000, total 

approximately $1,103 million, and $1,021 million, respectively. 

As of September 30, 2001, and 2000, there were no obligations due to canceled appropriations for which there is a contractual 

commitment for payment. 

NOTE 7: UNEXPENDED APPROPRIATIONS 

Unexpended Appropriations

Unobligated 

Undelivered Orders 

Total Unexpended Appropriations 

 2001

 $ 2,934,624 

 16,180,547

 $ 19,115,171

 2000

$ 5,066,621 

 14,745,621

$ 19,812,242

 

Unexpended Appropriations:

Unexpended Appropriations include the undelivered orders and unobligated balances of the program accounts which 

receive Congressional appropriations through the budgetary process. 

As appropriated funds incur obligations, the obligated amount is recorded as an undelivered order. Undelivered orders are 

reduced by either an expenditure or an obligation cancellation. Appropriated funds which are not obligated are treated as 

unobligated amounts. Unobligated appropriations are returned to the U.S. Treasury when their period of availability expires. 
17 

Rural Telephone Bank (RTB) Capital Stock

A summary of the RTB capital stock structure follows: 

CAPITAL STOCK CLASS A ($1 par value) 

 Shares authorized 

 Shares issued and outstanding 

 Cash dividends 

CAPITAL STOCK CLASS B ($1 par value) 

 Shares authorized 

 Shares issued and outstanding 

 Stock dividends 

CAPITAL STOCK CLASS C ($1,000 par value) 

 Shares authorized 

 Par Value, shares issued and outstanding 

 Cash dividends (accrued) 

 

September 30, 

2001

 

 600,000,000 

 452,865,475 

 $ 9,534,010 

 Unlimited 

 666,730,835 

 $ 85,297,954 

 Unlimited 

 $ 447,722,000 

 $ 20,675,583

 

September 30, 

2000

 600,000,000 

 476,700,500 

 $ 10,035,800 

 Unlimited 

 681,518,810 

 $ 90,515,784 

 Unlimited 

 $ 344,837,000 

 $ 18,021,249 

Although USDA Rural Development owns all Class A stock on behalf of the United States Government, the cash dividends 

are paid to the U.S. Treasury. On September 30, 2001, in accordance with Section 406 (c) of the Rural Electrification Act of 

1936 (RE Act) as amended, the sixth redemption of Class A stock occurred. On September 30, 2001 and 2000, in 

accordance with Bank Board resolution 2001-2 and 2000-6, the sixth and fifth redemption’s of Class A stock, in the amounts 

of $23.8 million and $25.1 million occurred, leaving balances of $452.9 and $476.7 million outstanding, respectively. 

Class B stock, a voting class of stock, is issued only to borrowers of RTB, in proportion to actual loan advances. RTB 

requires borrowers to purchase Class B stock in the amount of 5 percent of advanced loan amounts. RTB may not pay 

cash dividends on Class B stock. Rather, holders of Class B stock are entitled to patronage refunds (paid in the form of 

Class B stock dividends) equal to the amount of patronage capital in excess of $10 million. Patronage refunds are allocated 

on liquidating account loans, based on the ratio of interest revenue to RTB from each holder to RTB's total interest revenue 

from all liquidating account Class B stockholders. Stock subscriptions relating to unadvanced loans approximated $52 

million and $47 million at September 30, 2001,and 2000, and are not reflected in the accompanying principal financial 

statements. 

Class B stock is nontransferable, except in connection with a transfer of ownership approved by RTB, of all or part of a RTB 

loan. Class B stock can be redeemed only after all shares of Class A stock, a nonvoting class of stock owned by the U.S. 

Government, have been redeemed and retired. A borrower may exchange Class B stock for Class C stock: 1) upon retiring 

all debt with RTB; or 2) effective November 9, 1999, prior to retiring all debt on a proportionate basis equal to the 

percentage of each note repaid. As of September 30, 2001, and 2000, B stock exchanges of $86.7 million and $21.7 under 

the latter method have occurred. 

Class C stock, a voting class of stock, is issued only to RTB borrowers, or to corporations and public entities eligible to 

borrow from RTB under Section 408 of the RE Act as amended, or by organizations controlled by such borrowers, 

corporations, and public entities. RTB may pay cash dividends on Class C stock. 

Restricted Capital

The Omnibus Budget Reconciliation Act of 1987 required the RTB to establish a contingency reserve for interest rate fluctuations. 

As a result, the RTB Board of Directors amended the Bylaws of RTB regarding the allocation of patronage capital and established

a reserve of $10 million. Any amounts in the reserve for interest rate fluctuations, classified as restricted capital on the Balance 

Sheet, in excess of $10 million will be allocated as Class B stock dividends to those borrowers holding Class B stock during the 

fiscal year the amounts were earned. At September 30, 2001, and 2000, restricted capital was $10 million and $ 9.9 million, 

respectively. At September 30, 2000, restricted capital was $9.9 million due to an increase in fiscal year 1999 Class C stock 

dividends payable after the end of the fiscal year 1999 of $88 thousand. 
18 

Patronage Capital Earned

Patronage capital earned consists of all revenues of the RTB for any fiscal year in excess of the amount thereof necessary to: 

- Pay expenses of the RTB, including without limitation, payments in lieu of property taxes. 

- Pay interest on telephone debentures accruing during the fiscal year. 

- Provide reasonable allowances for depreciation, obsolescence, and losses on loans and interest receivable. 

- Pay to the holders of Class A stock an amount equal to 2% per annum of the capital furnished to the RTB for such 

 stock. 

- Pay to the holders of Class C stock dividends at the rate determined by the Board, provided the following criteria is 

 met: 

- No dividends shall be declared on Class C stock until arrearages, if any, on payments to holders of the cumulative Class 

A stock have been paid. 

- Until all Class A stock has been retired, the Board shall not declare any dividends on Class C stock at an annual rate in 

excess of the then current average rate payable on the RTB's telephone debentures. 

Capital Stock Class A

Public Laws 92-12 and 97-98 authorized Congress, in fiscal years 1971 through 1991, to appropriate no more than 

$30 million per year for the purchase of RTB Class A stock. Class A stock has a guaranteed annual dividend of 2 percent of the

total funds received. The law provides that Congress annually appropriate funds until such purchases approximate $600 million. 

As of September 30, 2001, RTB Class A stock appropriations amounted to approximately $592.1 million, the total funding USDA 

Rural Development will receive from Congress. Beginning in 1996, RTB was required to repurchase this stock; however, in 

accordance with Public Law 106-78, Section 718, the maximum Class A stock that may be retired is 5 percent. According to 

enabling legislation and amendments, the Bank will be converted to independent status when 51 percent of the Class A stock 

issued to the United States has been fully redeemed and retired. On September 30, 2001 and 2000, in accordance with Bank 

Board resolution 2001-2 and 2000-6, the sixth and fifth redemption of Class A stock, in the amounts of $23.8 million and $25.1 

million occurred, leaving a balance of $452.8 million and $476.7 million outstanding. 

Cumulative Results of Operations

Cumulative Results of Operations are allocated to the various components of Net Position based on the requirements of the RE 

Act. Specifically, current year results of operations are recorded as Patronage Capital Earned and redistributed to the Class B 

stock and Restricted Capital accounts. Cash dividends are paid out of Cumulative Results of Operations. 

NOTE 8 EARNED REVENUES 

Federal: 

Interest Revenue from Treasury 

Total Federal 

Non-Federal: 

Interest and Penalties Revenue 

Total Non-Federal 

Total Earned Revenues 

 September 30, 

2001

 

 $ 59,614,569

 59,614,569

 

 77,614,738 

 77,614,738

$ 137,229,307

 September 30, 

2000

 $ 57,866,623

 57,866,623

 81,405,151 

 81,405,151

 $ 139,271,774

Credit Reform

The amount of subsidy expense on post-1991 direct loans equals the present value of estimated cash outflows over the life of the 

loan less the present value of cash inflows, discounted at the interest rate of marketable Treasury securities with a similar maturity 

term. A major component of subsidy expense is the interest subsidy cost/interest differential. This is defined as the excess of the 

amount of direct loans disbursed over the present value of the interest and principal payments required by the loan contracts, 

discounted at the applicable Treasury rate. One of the components of interest subsidy cost/interest differential is interest revenue. 

This interest revenue is earned from both federal and non-federal sources. For a further discussion of present value, refer to Note 

1E, and for all of the components of subsidy expense and their respective dollar amounts by entity, refer to Note 3.
19 

Exchange Transactions With Non-Federal Sources

Rural Telephone Bank loans have a statutory rate that is established on an annual basis depending on the Bank's cost of raising

capital. 

Exchange Transactions with Federal Sources

As discussed in Note 1A, the history of RTB is one of financial and technical assistance to rural America. RTB serves as a 

temporary source of supervised credit until borrowers are able to qualify for private sector resources. Although a lender of last 

resort, RTB is able to recoup all of the costs associated with its loan making activities. The main reason is that RTB establishes its 

cost of money on an annual basis in a manner which enables it to recover all related costs. 

NOTE 9 DISCLOSURES RELATED TO THE STATEMENT OF BUDGETARY RESOURCES 

- The net amount of budgetary resources obligated for undelivered orders as of September 30, 2001 and 2000, is approximately 

 $1,103 million and $1,021 million, respectively. 

- The amount of Federal borrowing authority available as of September 30, 2001 and 2000, is approximately $996 million and 

 $904 million, respectively. 

- Requirements for repayments of borrowings: Borrowings are repaid on Form SF 1151, Nonexpenditure Transfers, as maturity 

dates become due. For liquidating accounts, maturity dates are fifty years from the close of the fiscal year the funds were 

advanced by Treasury to the Bank. For financing accounts, maturity is based on the period of time used in the subsidy 

calculation, not the contractual term of the agency’s loans to borrowers. This period of time used in the subsidy calculation will 

normally be longer than the contractual term of the agency’s loans to borrowers. 

Terms of borrowings used: In general, borrowings are for periods of up to fifty years depending upon the cohort. Interest rates on 

borrowings in the liquidating accounts were assigned on the basis of the Treasury rate in effect at the time of the borrowing. 

Interest rates on borrowings in the financing accounts are assigned on the basis of the Treasury rate in effect at the end of the 

year of loan disbursements. Since individual loans are typically disbursed over several years, several interest rates may be 

applicable to an individual loan. A single weighted average interest rate, which is adjusted each year until all the disbursements 

for the cohort have been made, is maintained. Prepayments can be made on Treasury borrowings in the liquidating and financing 

accounts without penalty. 

Financing sources for repayments of borrowings: Included are reestimates and cash flows (i.e. borrower loan principal 

repayments), appropriations received in liquidating accounts for “cash needs”, residual unobligated balances, where applicable,

and other Treasury borrowings. 

- Adjustments during the fiscal year to budgetary resources available at the beginning of the year as follows: 

 2001 2000

 Federal:

 Actual Recoveries of Prior Year Obligations $ 31,102,385 $ 78,198,724 

 Redemption of Debt (118,790,620) (51,673,540) 

 Other authority withdrawn (2,151,955) (56,534,711)

 Total Adjustments $ (89,840,190) $ (30,009,527)

Actual recoveries of prior year obligations represent cancellations or downward adjustments of obligations incurred in prior fiscal 

years that did not result in an outlay. For expired accounts, these recoveries are available for upward adjustments of valid 

obligations incurred during the unexpired periods but not recorded. 

Redemption of debt represents the amount of principal repayments paid to Treasury on outstanding borrowings. It does not 

include interest payments, which are shown as an obligation and an outlay. 

Other authority withdrawn represents the withdrawal of unobligated balances of indefinite budget authority realized in no-year or 

multiple year accounts through downward adjustments of prior year obligations. Other authority withdrawn consisted of 

cancellations for the year of $2.2 million FY 2000: ($55.9 million) less adjustment to C stock dividend payable of $14,850 FY 2000: 

($612,655). 

- Existence, purpose, and availability of permanent indefinite appropriations: Permanent indefinite appropriations are mainly 

applicable to liquidating accounts which have the ability to apportion them and for reestimates related to upward adjustments 

of subsidy in the program accounts. These appropriations become available pursuant to standing provisions of law without 

further action by Congress after transmittal of the Budget for the year involved. They are treated as permanent the first year

they become available, as well as succeeding years. However, they are not stated as specific amounts but are determined by 

specific variable factors, such as “cash needs” for the liquidating accounts and information about the actual performance of a 

cohort or estimated changes in future cash flows of the cohort in the program accounts. 
20 

The period of availability for these appropriations are as follows: Annual authority is available for obligations only during a specific 

year and expires at the end of that time. Multi-year authority is available for obligations for a specified period of time in excess of 

one fiscal year. No-year authority remains available for obligation for an indefinite period of time, usually until the objectives for 

which the authority was made available are achieved. 

Annual and multi-year authority expire for the purpose of incurring new obligations. However, the authority is available for 

adjustments to obligations and for disbursements that were incurred or made during the period prior to expiration, but not 

recorded. Unless specifically authorized in law, the period that the expired authority is available for adjustments to obligations or 

for disbursements is five fiscal years (beginning with the first expired year). At the end of the fifth expired year, the authority is 

"canceled”. Therefore, the authority is not available for any purpose. 

- Legal arrangements affecting the use of unobligated balances of budget authority: The availability/use of budgetary resources 

(i.e., unobligated balances) for obligation and expenditure are limited by purpose, amount, and time. 

- Purpose: Funds may be obligated and expended only for the purposes authorized in appropriations acts or other laws. 

- Amount: Obligations and expenditures may not exceed the amounts established in law. Amounts available are classified as 

either definite (i.e., not to exceed a specified amount) or indefinite (i.e. amount is determined by specified variable factors). 

- Time: The period of time during which budgetary resources may incur new obligations is different from the period of time 

during which the budgetary resources may be used to disburse funds. 

The time limitations on the use of unobligated balances are the same as those previously discussed in the last two paragraphs of 

the permanent indefinite appropriations footnote disclosure. 

Any information about legal arrangements affecting the use of unobligated balances of budget authority will be specifically stated 

by programs and fiscal year in the appropriation language or in the alternative provisions section at the end of the appropriations 

act. 
21 

Board of Directors

Representing the Cooperative Industry

David Crothers John McAllister, Treasurer Larry E. Sevier 

Executive Vice President President Chief Executive Officer 

North Dakota Assn. of Telephone Co-ops West Carolina Rural Telephone Co-op Inc . Rural Telephone Service Co., Inc. 

Member since 1998 Member since 1974 Member since 1994 

Representing the Commercial Industry

John T. Dillard S. Michael Jensen Curtis S. Sampson, Secretary

President Chief Executive Officer Chairman & Chief Executive Officer 

Monroe Telephone Company Great Plains Communications, Inc. Hector Communications, Inc.

Member since 1998 Member since 1992 Member since 1988

Representing the Public Representing the U.S. Department of Agriculture

 Appointments Pending 

Robert Lee Stanton 

Farmer and businessman from Missouri 

1995 to May, 2002 

Governor

Appointed September, 2001 
22 
23 

Stockholder Questions

Please write to: 

Jonathan P. Claffey, Assistant Secretary 

Rural Telephone Bank 

1400 Independence Avenue, SW 

Mail Stop 1590, Room 4056, South Building 

Washington, DC 20250-1590 

Telephone (202) 720-9556 

More Information

For more information about the Bank, visit our Internet site: 

www.usda.gov/rus/telecom/rtb/rtb.htm

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis 

of race, color, national origin, sex, religion, age, disability, political beliefs, sexual orientation, and marital or family 

status. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means 

for communication of program information (Braille, large print, audiotape, etc.) should contact USDA’s TARGET 

Center at (202) 720-2600 (voice and TDD). 

To file a complaint of discrimination, write to: USDA, Director, Office of Civil Rights, Room 326-W, Whitten 

Building, 14th and Independence Avenue, SW, Washington, DC 20250-9410 or call (202) 720-5964 (voice and 

TDD). USDA is an equal opportunity provider and employer.