Annual Report - CoBank

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Controls and ProceduresCoBank, ACBWe maintain a system of disclosure controls and procedures. Disclosure controls and procedures include, without limitation,controls and procedures designed to ensure that information disclosed by us in our quarterly and annual reports is accumulated andcommunicated to our management, including our principal executive officer and our principal financial officer, as appropriate, toallow timely decisions to be made regarding disclosure. The president and chief executive officer and the chief financial officer haveevaluated our disclosure controls and procedures as of the end of the period covered by this annual report and have concluded that ourdisclosure controls and procedures are effective as of that date.We also maintain a system of internal controls. The term “internal controls,” as defined by the American Institute of CertifiedPublic Accountants’ Codification of Statement on Auditing Standards, AU Section 319, means a process - effected by the board ofdirectors, management and other personnel - designed to provide reasonable assurance regarding the achievement of objectives inreliability of financial reporting, the effectiveness and efficiency of operations and of compliance with applicable laws andregulations. We continually assess the adequacy of our internal controls over financial reporting and enhance our controls in responseto internal control assessments and internal and external audit and regulatory recommendations. There have been no significantchanges in our internal controls or in other factors that could significantly affect such controls subsequent to the date we carried outour evaluations. In accordance with our internal control procedures, these financial statements were prepared under the oversight ofthe Audit Committee of our Board of Directors.CoBank 2011 Annual Report115
Annual Report to Shareholders Disclosure Information Required byFarm Credit Administration RegulationsCoBank, ACBIn accordance with Farm Credit Administration (FCA) regulations, CoBank has prepared this Annual Report to Shareholders for the year ended December 31,2011, in accordance with all applicable statutory or regulatory requirements.Description of BusinessTerritory served, eligible borrowers, types of lending activities engaged in, financialservices offered, and related Farm Credit organizations.Significant developments within the last 5 years that had or could have a materialimpact on earnings or interest rates to borrowers, acquisitions or dispositions ofmaterial assets, material changes in the manner of conducting business, seasonalcharacteristics, concentration of assets, and dependence, if any, upon a single customeror a few customers.SectionLocationNotes to Financial Statements ...................... Note 1Note 17Note 18Notes to Financial Statements ...................... Note 1Note 2Note 3Note 4Note 5Note 7Note 13Note 14Note 15Note 16Note 17Note 18Management’s Discussion and Analysis ..... Pages 31 to 63Description of PropertyLocation of Property Office Locations ........................................... Inside Back CoverCoBank leases its national office building which is located in Greenwood Village,Colorado. CoBank also leases various facilities which are described on the inside backcover of this Annual Report to Shareholders. CoBank leases banking center offices inAmes, IA; Atlanta, GA; Austin, TX; Enfield, CT; Fargo, ND; Louisville, KY;Lubbock, TX; Minneapolis, MN; Omaha, NE; Sacramento, CA; Spokane, WA;Sterling, CO; St. Louis, MO; and Wichita, KS. CoBank leases office space inWashington D.C. and Singapore. Farm Credit Leasing Services Corporation leases itsheadquarters office in Minneapolis, MN, as well as outside sales offices in Atlanta,GA; Enfield, CT; Louisville, KY; Lubbock, TX; Omaha, NE; Sacramento, CA; St.Louis, MO; Statesville, NC; Stockton, CA; and Wichita, KS, some of which arelocated in CoBank banking centers.CoBank has a national charter and, as a result, serves customers across rural America.Travel to customer locations may be difficult due to the rural nature of many of ourcustomers’ operations. In order to provide the appropriate level of customer contactand to optimize the efficiency of management travel, CoBank utilizes a variety oftransportation to serve its customers, including aircraft (both commercial andfractional interest). The use of fractional interest aircraft is strictly limited to businessuse.Legal Proceedings and Enforcement Actions Notes to Financial Statements ...................... Note 15Description of Capital Structure Notes to Financial Statements ...................... Note 7Description of LiabilitiesDebt Outstanding Notes to Financial Statements ...................... Notes 5 and 6Contingent Liabilities Notes to Financial Statements ...................... Note 15Selected Financial Data for the Five Years EndedDecember 31, 2011Management’s Discussion and Analysis of Financial Conditionand Results of OperationsFive-Year Summary ofSelected Consolidated Financial Data ......... Page 33Management’s Discussion and Analysis ..... Pages 31 to 63Directors and Senior OfficersDirectors’ Information Board of Directors Disclosure ..................... Pages 118 to 125, 139Senior Officers’ Information Senior Officers ............................................. Pages 126 to 138Transactions with Directors and Senior Officers Notes to Financial Statements ...................... Note 13CoBank 2011 Annual Report116
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Everett DobrinskiChairmanRobert B.
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“ We firmly believe the combined
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associations are partnering with Co
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2012 BOARD OF DIRECTORSOccupation:F
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“WE ARE COMMITTEDTO GOOD GOVERNAN
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U.S. AgBank CEO Darryl Rhodes (fron
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KansasNew MexicoUtahFC of Ness City
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CorporateCitizenshipAT COBANKSuppor
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StrategicRelationshipsFarm Credit o
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RegionalAgribusinessBANKING GROUPCe
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CorporateAgribusinessBANKING GROUPK
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ElectricDistributionBANKING DIVISIO
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Power SupplyBANKING DIVISIONTri-Sta
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IndustryPortfoliosCoBank ended 2011
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CoBank is a financially strong,depe
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30COBANK 2011ANNUAL REPORTbuilding
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The information and disclosures con
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Financial Condition andResults of O
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Provision for Loan Losses and Reser
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Purchased services expense decrease
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AgribusinessOverviewThe Agribusines
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Rural InfrastructureOverviewThe Rur
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Credit ApprovalThe most critical el
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Total nonaccrual loans were $134.9
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Basis RiskBasis risk arises due to
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Our net interest income is lower in
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The notional amount of our derivati
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Reputation Risk ManagementReputatio
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Investment Securities ($ in Million
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In accordance with the Farm Credit
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Critical Accounting EstimatesManage
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Business OutlookWe closed our merge
Page 69 and 70: Consolidated Income StatementsCoBan
Page 71 and 72: Consolidated Statements of Cash Flo
Page 73 and 74: Consolidated Statements of Changes
Page 75 and 76: LoansWe report loans, excluding lea
Page 77 and 78: If we determine that a derivative n
Page 79 and 80: Reserve for Credit ExposureThe foll
Page 81 and 82: The information in the tables under
Page 83 and 84: The following tables present inform
Page 85 and 86: At December 31, 2011, gross minimum
Page 87 and 88: For impaired investment securities,
Page 89 and 90: At December 31, 2011, the assets of
Page 91 and 92: Preferred StockThe following table
Page 93 and 94: The following table provides a summ
Page 95 and 96: AssumptionsWe measure plan obligati
Page 97 and 98: Incentive Compensation PlansWe have
Page 99 and 100: Note 11 - Derivative FinancialInstr
Page 101 and 102: A summary of the impact of derivati
Page 103 and 104: Due to the uncertainty of expected
Page 105 and 106: Assets and Liabilities Measured atF
Page 107 and 108: Note 14 - Segment Financial Informa
Page 109 and 110: Note 15 - Commitments and Contingen
Page 111 and 112: Note 18 - Subsequent Events (Unaudi
Page 113 and 114: Supplemental District Financial Inf
Page 115 and 116: Supplemental District Financial Inf
Page 117 and 118: Report of Independent AuditorsCoBan
Page 119: Management’s Report on Internal C
Page 123 and 124: Board of Directors Disclosure as of
Page 131 and 132: Senior OfficersCoBank, ACBRobert B.
Page 133 and 134: Senior Officers Compensation Discus
Page 145 and 146: Code of EthicsCoBank, ACBCoBank set
Page 147 and 148: CERTIFICATIONI, Robert B. Engel, Pr
Page 149 and 150: LeadershipCoBank, ACBRobert B. Enge
Page 151 and 152: OfficeLocationsCoBank National Offi
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Annual Report - CoBank

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