20170630Farmers Mutual Redacted Form 481.pdf

June 28, 2017

Ms. Diane Hanian, Commission Secretary
Idaho Public Utilities Commission
472 W. Washington Street
Boise, Idaho 83720‐0074

RE: Farmers Mutual Telephone Company FCC Form 481 – Carrier
Annual Reporting Data Collection Form, in Compliance with 47
C.F.R. §§ 54.313 and 54.422; GNR 17‐01

On behalf of Farmers Mutual Telephone Company (the Company),
attached is a copy of the Company’s FCC Form 481 – Carrier Annual
Reporting Data Collection Form, in compliance with 47 C.F.R. §§
54.313 and 54.422.
The attached report is provided to the Idaho Public Utilities
Commission (PUC) in accordance with 47 C.F.R. §§ 54.313(i) and
54.422(c).
The signed and notarized affidavit is included with this filing.
Following this filing, a paper copy of the confidential version on
yellow paper and in a sealed envelope will be mailed via FedEx to the
Idaho PUC.
Should you have any questions regarding this filing, please contact me
via electronic mail at [e-mail] or by phone at
509‐777‐0137.

Sincerely,

Tym Rutkowski, Senior Manager for
Moss Adams LLP

Enclosures

cc: Daniel Greig – Farmers Mutual Telephone Company
Page 1
Page 1
FCC Form 481FCC Form 481 - Carrier Annual Reporting OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name: Person USAC should contact

<035>Contact Telephone Number:
<039>Contact Email Address:

Data Collection Form

Form Type

54.313 and 54.422
Krista Byrd
2018
[e-mail]
FARMERS MUTUAL TEL
2084522000 ext.
472221
Page 2
Page 2
(200) Service Outage Reporting (Voice)FCC Form 481
Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
<220>
NORS
Reference
Number
Outage Start
Date
Outage Start
Time
Outage End
Date
Outage End
Time
Number of
Customers Affected Total Number of
911 Facilities Service Outage Affect Multiple
Service Outage Preventative
<210>For the prior calendar year, were there any reportable voice service outages?
Krista Byrd
2018
[e-mail]
FARMERS MUTUAL TEL
2084522000 ext.
472221
No
(300) Unfulfilled Service Request FCC Form 481
Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
<300> Unfulfilled service request (voice)
<310> Detail on attempts (voice)
<320> Unfulfilled service request (broadband)
<330> Detail on attempts (broadband)
Name of Attached Document
Name of Attached Document
Page 3
Page 3
Krista Byrd
2018
[e-mail]
FARMERS MUTUAL TEL
2084522000 ext.
0
0
472221
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line
<030>
<039>Contact Email Address - Email Address of person identified in data line
<030>
<400>
Select from the drop-down list to indicate how you would like to report
voice complaints (zero or greater) for voice telephony service in the prior
calendar year for each service area in which you are designated an ETC for
any facilities you own, operate, lease, or otherwise utilize.
<410>Complaints per 1000 customers for fixed voice
<420>Complaints per 1000 customers for mobile voice
<430>
Select from the drop-down list to indicate how you would like to report
end-user customer complaints (zero or greater) for broadband service in
the prior calendar year for each service area in which you are designated
an ETC for any facilities you own, operate, lease, or otherwise utilize.
<440>
<450>
Complaints per 1000 customers for fixed broadband
Complaints per 1000 customers for mobile broadband
Page 4
Page 4
(400) Number of Complaints per 1,000 customers FCC Form 481
Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
Krista Byrd
2018
[e-mail]
0.0
Offered only fixed broadband
FARMERS MUTUAL TEL
2084522000 ext.
0.0
Offered only fixed voice
472221
(500) Compliance With Service Quality Standards and Consumer Protection Rules FCC Form 481
Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
Page 5
Page 5
<500> Certify compliance with applicable service quality standards and consumer protection rules
<510>Descriptive document for Service Quality Standards & Consumer Protection Rules Compliance
<515> Certify compliance with applicable minimum service standards
Krista Byrd
472221ID510.pdf
Yes
2018
[e-mail]
FARMERS MUTUAL TEL
2084522000 ext.
472221
<010>
<015>
<020>
<030>
<035>
<039>
Study Area Code
Study Area Name
Program Year
Contact Name - Person USAC should contact regarding this data
Contact Telephone Number - Number of person identified in data line <030>
Contact Email Address - Email Address of person identified in data line <030>
(600) Functionality in Emergency Situations FCC Form 481
Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
<600> Certify compliance regarding ability to function in emergency situations
Page 6
<610>Descriptive document for Functionality in Emergency Situations
Page 6
Krista Byrd
2018
Yes
[e-mail]
472221ID610.pdf
FARMERS MUTUAL TEL
2084522000 ext.
472221
Page 7
Page 7
<701>Residential Local Service Charge Effective Date
<702>Single State-wide Residential Local Service Charge
<703>
State Exchange (ILEC)SAC (CETC)Rate Type
Residential Local
Service Rate Total per line Rates and Fees
Mandatory Extended Area
Service ChargeState Universal Service FeeState Subscriber Line Charge
(700) Price Offerings including Voice Rate Data FCC Form 481
Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
<010>
<015>
<020>
<030>
<035>
<039>
Study Area Code
Study Area Name
Program Year
Contact Name - Person USAC should contact regarding this data
Contact Telephone Number - Number of person identified in data line <030>
Contact Email Address - Email Address of person identified in data line <030>
Krista Byrd
1/1/2017
2018
-- See attached worksheet
--
[e-mail]
FARMERS MUTUAL TEL
2084522000 ext.
472221
Page 8
Page 8
<711>
Exchange (ILEC)Residential Rate
State Regulated
Broadband Service -
Download Speed Broadband Service -
Usage Allowance
Action Taken When
select}
<a1>
Usage Allowance
(710) Broadbrand Price Offerings FCC Form 481
Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
Krista Byrd
2018
[e-mail]
FARMERS MUTUAL TEL
2084522000 ext.
-- See attached
worksheet --
472221
Page 9
Page 9
(800) Operating Companies FCC Form 481
Data Collection Form OMB Control No. 3060-0986
July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
<810>Reporting Carrier
<811>
<812>
<813>
Doing Business As Company or Brand Designation
<a1>
Affiliates
<a2>
SAC
<813>
Doing Business As Company or Brand Designation
<a1>
Affiliates
<a2>
SAC
<813>
Doing Business As Company or Brand Designation
<a1>
Affiliates
<a2>
SAC
<813>
Doing Business As Company or Brand Designation
<a1>
Affiliates
<a2>
SAC
/OMB Control No. 3060-0819
Not Applicable
Krista Byrd
Farmers Mutual Telephone Company
2018
[e-mail]
Farmers Mutual Telephone Company
FARMERS MUTUAL TEL
2084522000 ext.
472221
Page 10
<910>Tribal Land(s) on which ETC Serves
<920>Tribal Government Engagement Obligation
<921>
<922>
<923>
<924>
<925>
<926>
<927>
<928>
<929>
(900) Tribal Lands Reporting FCC Form 481
Data Collection Form OMB Control No. 3060-0986
July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
/OMB Control No. 3060-0819
Page 10
<900>Does the filing entity offer tribal land services? (Y/N)
Krista Byrd
2018
[e-mail]
No
FARMERS MUTUAL TEL
2084522000 ext.
472221
Page 11
(1000) Voice and Broadband Service Rate Comparability FCC Form 481
Data Collection Form OMB Control No. 3060-0986
July 2013
/OMB Control No. 3060-0819
<1000> Voice services rate comparability certification
<1010> Attach detailed description for voice services rate
comparability compliance
Name of Attached Document
comparability compliance
Name of Attached Document
Page 11
Krista Byrd
472221ID1010.pdf
472221ID1030.pdf
2018
[e-mail]
Yes - Pricing is no more than the most recent applicable benchmark announced by
the Wireline Competition Bureau
FARMERS MUTUAL TEL
2084522000 ext.
Yes
472221
Page 12
Page 12
(1100) No Terrestrial Backhaul Reporting FCC Form 481
Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
<1130>
Certify whether terrestrial backhaul options exist (Y/N) <1100>
Krista Byrd
2018
[e-mail]
FARMERS MUTUAL TEL
2084522000 ext.
Yes
472221
Page 13
Page 13
(1200) Terms and Condition for Lifeline Customers FCC Form 481LifelineOMB Control No. 3060-0986/OMB Control No. 3060-0819Data Collection Form July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
<1210>Terms & Conditions of Voice Telephony Lifeline Plans
<1221>
<1222>
<1223>
<1220>Link to Public Website HTTP
telephony service plans offered to Lifeline subscribers,
Details on the number of minutes provided as part of the plan,
Krista Byrd
2018
[e-mail]
472221ID1210.pdf
FARMERS MUTUAL TEL
2084522000 ext.
4
4
4
472221
Page 14
Page 14
FCC Form 481
OMB Control No. 3060-0986/OMB Control No. 3060-0819
(2005) Price Cap Carrier Additional Documentation
Data Collection Form
Including Rate-of-Return Carriers affiliated with Price Cap Local Exchange Carriers July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
July 2017 certification, this applies to Round 2 recipients of
Incremental Support.
<2022> Recipient certifies, representing year three after filing a notice of
acceptance of funding pursuant to 54.312(c), that the locations in
question are not receiving support under the Broadband Initiatives
Program or the Broadband Technology Opportunities Program for
projects that will provide broadband with speeds of at least 4
Mbps/1Mbps - 54.313(b)(2)(i). Round 2 recipients only.
<2023> The attachment on line 2024 includes a statement of the total amount of
capital funding expended in the previous year in meeting Connect
America Phase I deployment obligations, accompanied by a list of
census blocks indicating where funding was spent. This covers
year three - 54.313(b)(2)(ii). Round 2 recipients only.
<2024A> Round 2 Recipient of Incremental Support?
<2024B> Attach list of census blocks indicating where funding was spent in year
three - 54.313(b)(2)(ii). Round 2 recipients only.
Name of Attached Document Listing
Required Information
<2025A> Round 2 Recipient of Incremental Support?
<2025B> Attach geocoded Information for Phase I milestone reports (Round 2 for
year three) - Connect America Fund , WC Docket 10-90, Report and
Order, FCC 13-73, paragraph 35 (May 22, 2013).
Name of Attached Document Listing
Required Information
<2015> 2016 and future Frozen Support Certification 47 CFR § 54.313(c)(4)
Select the appropriate responses below (Yes, No, Not Applicable) to note compliance as a recipient of Incremental High Cost support, High Cost support to offset access charge
reductions, and Connect America Phase II support as set forth in 47 CFR § 54.313(b),(c),(d),(e). The information reported on this form and in the documents attached below is accurate.
Incremental Connect America Phase I reporting
<2011> 3rd Year Certification 47 CFR §54.313(b)(1)(ii) - Note that for the
Krista Byrd
2018
[e-mail]
FARMERS MUTUAL TEL
2084522000 ext.
472221
Page 15
FCC Form 481
OMB Control No. 3060-0986/OMB Control No. 3060-0819
(2005) Price Cap Carrier Additional Documentation
Data Collection Form
Including Rate-of-Return Carriers affiliated with Price Cap Local Exchange Carriers July 2013
Page 15
Price Cap Carrier Connect America ICC Support {47 CFR § 54.313(d)}
<2016> Certification support used to build broadband
Connect America Phase II Reporting {47 CFR § 54.313(e )}
<2017A> Connect America Fund Phase II recipient?
institutions to which the carrier newly began providing access to
broadband service in the preceding calendar year - 54.313(e)(1)(ii)(A)
Name of Attached Document Listing
Required Information
<2019> Recipient certifies that it bid on category one telecommunications and
Internet access services in response to all FCC Form 470 postings seeking
broadband service that meets the connectivity targets for the schools and
libraries universal service support program for eligible schools and
libraries located within any area in a census block where the carrier is
receiving Phase II model-based support, and that such bids were at rates
reasonably comparable to rates charged to eligible schools and libraries in
urban areas for comparable offerings - 54.313(e)(1)(ii)(C)
<2017C> Total amount of Phase II support, if any, the price cap carrier used for
capital expenditures in 2016.
<2018> Attach the number, names, and addresses of community anchor
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
Select from the drop down menu or check the boxes below to note compliance with 54.313(f)(1). Privately held carriers must ensure compliance with the
financial reporting requirements set forth in 47 CFR 54.313(f)(2). I further certify that the information reported on this form and in the documents
attached below is accurate.
Progress Report on 5 Year Plan
(3009) Carrier certifies to 54.313(f)(1)(iii)
(3010A)
(3010B) Name of Attached Document Listing Required
Information
(3012A)
(3012B) Name of Attached Document Listing Required
Information
(3013) (Yes/No)
(3014) (Yes/No)
(3015)
(3016)
(3017) Name of Attached Document Listing Required
Information
Please Provide Attachment
Community Anchor Institutions {47 CFR §
54.313(f)(1)(ii)}
Please Provide Attachment
Is your company a Privately Held ROR Carrier {47 CFR
§54.313(f)(2)}
If yes, does your company file the RUS annual report
Please check these boxes to confirm that the
attached PDF, on line 3017, contains the required
information pursuant to § 54.313(f)(2) compliance
requires:
Electronic copy of their annual RUS reports
(Operating Report for Telecommunications
Borrowers)
Document(s) with Balance Sheet, Income Statement
and Statement of Cash Flows
If the response is yes on line 3014, attach your
company's RUS annual report and all required
documentation
If the response is no on line 3014, is your company
audited?
If the response is yes on line 3018, please check the
boxes below to confirm your submission on line
3026 pursuant to § 54.313(f)(2), contains:
Either a copy of their audited financial statement; or
(2)a financial report in a format comparable to RUS
Operating Report for Telecommunications Borrowers
Document(s) for Balance Sheet, Income Statement
and Statement of Cash Flows
Management letter and/or audit opinion issued by
the independent certified public accountant that
performed the company’s financial audit.
If the response is no on line 3018, please check the
boxes below to confirm your submission on line
3026 pursuant to § 54.313(f)(2), contains:
Copy of their financial statement which has been
subject to review by an independent certified public
accountant; or 2) a financial report in a format
comparable to RUS Operating Report for
Telecommunications Borrowers
Underlying information subjected to a review by an
independent certified public accountant
Underlying information subjected to an officer
certification.
Document(s) with Balance Sheet, Income Statement
and Statement of Cash Flows
Attach the worksheet listing required information Name of Attached Document Listing Required
Information
page 16
(3005) Rate Of Return Carrier Additional Documentation FCC Form 481
Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
Page 16
Certification of Public Interest Obligations {47 CFR §
54.313(f)(1)(i)}
4
4
4
Krista Byrd
2018
[e-mail]
Yes - Attach Certification
472221ID3010.pdf
FARMERS MUTUAL TEL
472221ID3026.pdf
2084522000 ext.
472221
No - No New Community Anchors
Page 17
Page 17
(3005) Rate Of Return Carrier Additional Documentation (Continued)FCC Form 481
Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
Financial Data Summary
(3027) Revenue
(3028) Operating Expenses
(3029) Net Income
(3030) Telephone Plant In Service(TPIS)
(3031) Total Assets
(3032) Total Debt
(3033) Total Equity
(3034) Dividends
Krista Byrd
2018
[e-mail]
FARMERS MUTUAL TEL
2084522000 ext.
472221
REDACTED - FOR PUBLIC INSPECTION
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
4005 Rural Broadband Experiment
Authorized Rural Broadband Experiment (RBE) recipients must address the certification for public interest obligations, provide a list of newly served
community anchor institutions, and provide a list of locations where broadband has been deployed.
Public Interest Obligations – FCC 14-98 (paragraphs 26-29, 78)
4001
interest obligations consistent with the category for which they were selected, including broadband speed,
latency, usage capacity, and rates that are reasonably comparable to rates for comparable offerings in urban
Community Anchor Institutions – FCC 14-98 (paragraph 79)
4003a
which they newly deployed broadband service in the preceding calendar year. On this line, please respond
If yes to 4003A, please provide a response for 4003B.
4003b
of community anchor institutions to which the
recipient newly began providing access to
Broadband Deployment Locations – FCC 14-98 (paragraph 80)
4004a
which broadband has been deployed as of the
June 1st immediately preceding the July 1st filing Name of Attached Document Listing Required Information
4004b
recipient is meeting the relevant public service
obligations for the identified locations. Materials
must at least detail the pricing, offered broadband
speed and data usage allowances available in the
Name of Attached Document Listing Required Information
FCC Form 481 (4005) Rural Broadband Experiment Additional Documentation OMB Control No. 3060-0986/OMB Control No. 3060-0819 Data Collection Form
July 2013
page 18
Page 18
Krista Byrd
2018
[e-mail]
FARMERS MUTUAL TEL
2084522000 ext.
472221
Page 19
Page 19
Certification - Reporting Carrier FCC Form 481
Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
TO BE COMPLETED BY THE REPORTING CARRIER, IF THE REPORTING CARRIER IS FILING ANNUAL REPORTING ON ITS OWN BEHALF:
Printed name of Authorized Officer:
Certification of Officer as to the Accuracy of the Data Reported for the Annual Reporting for CAF or LI Recipients
Name of Reporting Carrier:
Signature of Authorized Officer:Date
I certify that I am an officer of the reporting carrier; my responsibilities include ensuring the accuracy of the annual reporting requirements for universal service support
recipients; and, to the best of my knowledge, the information reported on this form and in any attachments is accurate.
Title or position of Authorized Officer:
Telephone number of Authorized Officer:
Study Area Code of Reporting Carrier:Filing Due Date for this form:
Persons willfully making false statements on this form can be punished by fine or forfeiture under the Communications Act of 1934, 47 U.S.C. §§ 502, 503(b), or fine or imprisonment under Title 18 of the United States Code, 18 U.S.C. § 1001.
Krista Byrd
2018
[e-mail]
FARMERS MUTUAL TEL
2084522000 ext.
472221
Page 20
Page 20
Certification - Agent / Carrier FCC Form 481Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
Certification of Agent Authorized to File Annual Reports for CAF or LI Recipients on Behalf of Reporting Carrier
TO BE COMPLETED BY THE AUTHORIZED AGENT:
Telephone number of Authorized Agent or Employee of Agent:
Signature of Authorized Agent or Employee of Agent:
Name of Authorized Agent Firm:
I, as agent for the reporting carrier, certify that I am authorized to submit the annual reports for universal service support recipients on behalf of the reporting carrier; I have provided
the data reported herein based on data provided by the reporting carrier; and, to the best of my knowledge, the information reported herein is accurate.
Date:
Name of Authorized Agent Employee:
TO BE COMPLETED BY THE REPORTING CARRIER, IF AN AGENT IS FILING ANNUAL REPORTS ON THE CARRIER'S BEHALF:
Certification of Officer to Authorize an Agent to File Annual Reports for CAF or LI Recipients on Behalf of Reporting Carrier
I certify that (Name of Agent)_______________________________________________________ is authorized to submit the information reported on behalf of the reporting carrier. I
also certify that I am an officer of the reporting carrier; my responsibilities include ensuring the accuracy of the annual data reporting requirements provided to the authorized
agent; and, to the best of my knowledge, the reports and data provided to the authorized agent is accurate.
Date:
Name of Authorized Agent:
Signature of Authorized Officer:
Persons willfully making false statements on this form can be punished by fine or forfeiture under the Communications Act of 1934, 47 U.S.C. §§ 502, 503(b), or fine or imprisonment under Title 18 of the United States Code, 18 U.S.C. § 1001.
Persons willfully making false statements on this form can be punished by fine or forfeiture under the Communications Act of 1934, 47 U.S.C. §§ 502, 503(b), or fine or imprisonment under Title
18 of the United States Code, 18 U.S.C. § 1001.
Krista Byrd
07/03/2017
2018
Senior Manager
[e-mail]
2084523100 ext.
472221
5097770137 ext.
06/26/2017
472221
General Manager
FARMERS MUTUAL TEL
Daniel Greig
2084522000 ext.
FARMERS MUTUAL TEL
06/26/2017
07/03/2017
CERTIFIED ONLINE
Tym Rutkowski
Moss Adams LLP
Moss Adams LLP
Moss Adams LLP
CERTIFIED ONLINE
472221
FARMERS MUTUAL TEL
Attachments
LINE 510 - SERVICE QUALITY STANDARDS AND CONSUMER PROTECTION
RULES COMPLIANCE

Farmers Mutual Telephone Company (“the Company”) complies with applicable service quality
standards and consumer protection rules for its voice and broadband services.

The rates, terms, and conditions under which the Company operates are outlined in its local
exchange tariff, which is approved by the Idaho Public Utilities Commission (“Idaho PUC”).
The tariff contains provisions regarding the Company’s customer service and protection
practices.

Service quality standards for voice service are established by the Idaho PUC. The Company
consistently meets or exceeds those standards and provides reports to the Idaho PUC, in
accordance with the Idaho PUC’s rules.

With regard to broadband service, the Company provisions its network and equipment to ensure
that its customers can enjoy the speeds to which they subscribe. However, Internet speeds
generally result from a “best effort” service and are dependent upon a number of variables, many
of which are outside the control of the Company. The Company also complies with the FCC’s
Open Internet rules, 47 C.F.R. §§8.3-8.11. These rules prohibit blocking, throttling, and paid
prioritization, and also require the Company to publicly disclose information regarding its
network management practices, performance, and the commercial terms of its broadband
services.

The Company complies with any and all consumer protection obligations under state law.

The Company also complies with the following consumer best practices: (1) the Company
discloses its rates and terms of service to customers; (2) the Company provides specific
disclosures in its advertising; (3) the Company separately identifies carrier charges from taxes on
its billing statements; (4) the Company provides ready access to customer service; (5) the
Company promptly responds to consumer inquiries and complaints received from government
agencies; and (6) the Company abides by policies for protection of consumer privacy.

Finally, the Company has a policy and established operating procedures that comply with the
FCC’s Customer Proprietary Network Information (CPNI) rules (47 C.F.R. §§64.2001-64.2011).

LINE 610 - ABILITY TO FUNCTION IN EMERGENCY SITUATIONS

Farmers Mutual Telephone Company (“the Company”) is able to remain functional in
emergency situations for both voice and broadband service. The Company has a reasonable
amount of backup power to ensure functionality without an external power source. Backup
power is provided to the central office by use of a fixed generator and batteries that provide it
with eight hours of emergency power. In addition, the Company’s field electronics have eight
hours of backup power via generators and batteries.

The Company has Synchronous Optical Network (“SONET”) technology deployed in its core
fiber optic network that is self-healing and will automatically reroute traffic around damaged
facilities should a fiber cut occur. The Company has sufficient spare cards for its fiber optic
network to provide almost instantaneous replacements should there be a card failure in the core
network and proper staff in place to repair any fiber cuts in a timely manner. In addition, the
Company has diverse routing to adjacent telecommunications providers and telephone exchanges
that enable the Company to reroute traffic in emergency situations.

Lastly, the Company is prepared and capable of managing traffic spikes resulting from
emergency situations and has sufficient switching capabilities to handle such situations. The
Company has also developed and trained its staff on network preparedness plans for emergency
situations.

(700) Price Offerings including Voice Rate Data FCC Form 481
Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>
<701>Residential Local Service Charge Effective Date
<702>Single State-wide Residential Local Service Charge
<703>
State Exchange (ILEC)SAC (CETC)Rate Type
Residential Local
Service Rate Total per line Rates and Fees
Mandatory Extended Area
Service ChargeState Universal Service FeeState Subscriber Line Charge
Krista Byrd
1/1/2017
18.12
19.87
2018
[e-mail]
0.0Fruitland
NuAcres 0.0
FARMERS MUTUAL TEL
ID
ID FR
2084522000 ext.
FR
0.0
0.018.0
19.75
472221
0.12
0.12
(710) Broadband Price Offerings FCC Form 481
Data Collection Form OMB Control No. 3060-0986/OMB Control No. 3060-0819
July 2013
<010>Study Area Code
<015>Study Area Name
<020>Program Year
<030>Contact Name - Person USAC should contact regarding this data
<035>Contact Telephone Number - Number of person identified in data line <030>
<039>Contact Email Address - Email Address of person identified in data line <030>

<711>
State Exchange Residential State Regulated Broadband Service -
Download Speed
(Mbps)

Other, No Limit on Usage Allowance
Other, No Limit on Usage Allowance
Other, No Limit on Usage Allowance
Other, No Limit on Usage Allowance
Krista Byrd
ID
ID
ID
2018
ID
[e-mail]
999999.0
999999.0
999999.0
999999.0
ALL
ALL
ALL
ALL
FARMERS MUTUAL TEL
2084522000 ext.
55.0
45.0
65.0
100.0
25.0
10.0
100.0
50.0
55.0
45.0
100.0
65.0
472221
1.0
3.0
5.0
50.00.0
0.0
0.0
0.0
LINE 1010 – VOICE SERVICES RATE COMPARABILITY
The Wireline Competition Bureau’s 2017 reasonable comparability benchmark for voice services
is $49.51, which includes the federal subscriber line charge (“SLC”).1

In the exchanges served by Farmers Mutual Telephone Company (“the Company”), the highest
single-line residential local rate in effect as of January 1, 2017 was $19.75. When the federal
SLC ($6.50) is included, the total rate was $26.25. Therefore, the Cooperative’s pricing of fixed
voice services is less than the reasonable comparability benchmark of $49.51.

1 Wireline Competition Bureau Announces Results of 2017 Urban Rate Survey for Fixed Voice and Broadband
Services, Posting of Survey Data and Explanatory Notes, and Required Minimum Usage Allowance for ETCs
Subject to Broadband Public Interest Obligations, Public Notice, WC Docket No. 10-90, 32 FCC Rcd 1358 (2017).

LINE 1030 – BROADBAND SERVICES RATE COMPARABILITY
As of January 1, 2017, Farmers Mutual Telephone Company was charging a residential rate of
$45 for broadband providing 10 Mbps download, 1 Mbps upload, and an unlimited usage
allowance. This rate is lower than $77.98, which is the 2017 reasonable comparability
benchmark for the same offering established by the Wireline Competition Bureau.1

1 Wireline Competition Bureau Announces Results of 2017 Urban Rate Survey for Fixed Voice and Broadband
Services, Posting of Survey Data and Explanatory Notes, and Required Minimum Usage Allowance for ETCs
Subject to Broadband Public Interest Obligations, Public Notice, WC Docket No. 10-90, 32 FCC Rcd 1358 (2017).

LINE 1210 – TERMS & CONDITIONS OF VOICE TELEPHONY LIFELINE PLANS

Residential customers of Farmers Mutual Telephone Company (“the Company”) who qualify for
the Lifeline Program receive a discount of $11.75 ($9.25 federal discount + $2.50 state discount)
on local voice telephony service.

In the Company’s NuAcres exchange, the Lifeline single-line residential rate, including any
mandatory extended area service charge and the federal subscriber line charge (“SLC”), is
$14.50 ($26.25 standard rate - $11.75 discount). In the Company’s Fruitland exchange, the
Lifeline single-line residential rate, including the federal SLC, is $12.75 ($24.50 standard rate -
$11.75 discount).

All single-line residential customers, including Lifeline customers, have an unlimited number of
minutes for calls made within their local calling area.

Toll charges for calls outside of the local calling area are determined by the long distance carrier
of the customer’s choosing. Customers may elect to subscribe to toll blocking at no charge.

The Company does not disconnect the service of Lifeline subscribers for the non-payment of toll
charges. However, the Company reserves the right to implement toll blocking, at no charge, if
the customer incurs a significant balance of unpaid toll bills.

Lifeline Program reductions do not apply to additional services such as custom calling features.
Lifeline customers may subscribe to these services, where available, at the same rates offered to
other customers.

Additional information regarding the terms and conditions of voice telephony Lifeline plans can
be found at: https://online.fmtc.com/local-telephone-service/lifeline-low-income-support/.

LINE 3010 – CERTIFICATION OF PUBLIC INTEREST OBLIGATIONS

Farmers Mutual Telephone Company (“the Company”) hereby certifies that the Company has
taken reasonable steps to provide upon reasonable request broadband service at actual speeds of
at least 10 Mbps downstream/1 Mbps upstream, with latency suitable for real-time applications,
including Voice over Internet Protocol, and usage capacity that is reasonably comparable to
comparable offerings in urban areas, and that requests for such service were met within a
reasonable amount of time.

FARMERS MUTUAL TELEPHONE COMPAN
Independent Auditor's Report and Consolidated
Financial Statements
December 31, 2016 and 2015
REDACTED - FOR PUBLIC INSPECTION
FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
December 31, 2016 and 2015
Contents
Page
Independent Auditor's Report....................................................................................................................1 - 2
Consolidated Financial Statements:
Consolidated Balance Sheets.............................................................................................................3 - 4
Consolidated Statements of Operations .................................................................................................5
Consolidated Statements of Members' Equity...................................................................................6 - 7
Consolidated Statements of Cash Flows.................................................................................................8
Notes to Consolidated Financial Statements...................................................................................9 - 19
REDACTED - FOR PUBLIC INSPECTION
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Farmers Mutual Tele hone Com an and Subsidiary
Fruitland, Idaho
We have audited the accompanying consolidated financial statements of Farmers Mutual Tele hone
Com an (an Idaho cor oration) and its subsidiar , which comprise the consolidated balance sheet as of
December 31, 2016, and the related consolidated statements of operations, members' equity and cash
flows for the year then ended, and the related notes to the consolidated financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with accounting principles generally accepted in the United States of America;
this includes the design, implementation and maintenance of internal control relevant to the preparation
and fair presentation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity's preparation and fair presentation of the consolidated financial statements in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of significant accounting estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Farmers Mutual Tele hone Com an and its subsidiar as of Decembe
31, 2016, and the results of its operations and its cash flows for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
- 1 -
REDACTED - FOR PUBLIC INSPECTION
Prior Year Audited by Other Auditors
The 2015 consolidated financial statements were audited by other auditors and their report thereon, dated
A ril 04, 2016, expressed an unmodified opinion.
Madison, Wisconsin
A ril 7, 2017
- 2 -
REDACTED - FOR PUBLIC INSPECTION
FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
CONSOLIDATED BALANCE SHEETS
December 31, 2016 and 2015
2016 2015
ASSETS
CURRENT ASSETS
Cash and cash e uivalents $ 1,560,605 $ 719,178
Accounts receivable:
Due from customers 381,647 418,236
Interexchan e carriers 188,474 298,771
Othe 39,115 11,649
Current ortion of notes receivable 4,000 12,000
Materials and su lies at avera e cost 202,040 219,684
Inventories at avera e cost, less allowance of $15,000 140,215 124,421
Pre aid income taxes 2,914 -
Other re a ments 84,689 84,774
2,603,699 1,888,713
OTHER NONCURRENT ASSETS
Investments 450,800 437,202
Lon term cash investment 203,636 -
otes receivable, less current ortion - 4,000
Deferred income taxes 121,844 85,274
Deferred char es 12,327 14,461
788,607 540,937
PROPERTY, PLANT AND EQUIPMENT
Tele hone lant in service 20,767,628 19,014,833
Wireless lant in service 840,112 840,112
Other ro ert 926,098 735,508
22,533,838 20,590,453
Less accumulated de reciation 14,165,956 13,113,667
8,367,882 7,476,786
Plant under construction 340,926 21,274
8,708,808 7,498,060
TOTAL ASSETS $ 12,101,114 $ 9,927,710
See Notes to Consolidated Financial Statements
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REDACTED - FOR PUBLIC INSPECTION
FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
CONSOLIDATED BALANCE SHEETS
December 31, 2016 and 2015
2016 2015
LIABILITIES AND MEMBERS' EQUITY
CURRENT LIABILITIES
Current ortion of lon -term debt $ 467,694 $ 325,000
Accounts a able:
Interexchan e carriers 191,622 27,220
Othe 205,468 327,545
Advance billin 232,477 231,057
Accrued income taxes - 2,464
Accrued taxes 49,291 52,927
Other current liabilities 167,917 180,590
1,314,469 1,146,803
LONG-TERM DEBT, LESS CURRENT PORTION 2,952,939 1,137,500
OTHER NONCURRENT LIABILITIES AND DEFERRED CREDITS
Deferred investment tax credit 47,847 49,404
MEMBERS' EQUITY
Membershi s 51,400 50,350
Patrona e ca ital assi nable 368,996 330,441
Unallocated mar ins 269,620 264,908
Patrona e ca ital assi ned 6,656,141 6,539,926
Unclaimed ca ital credit refunds 195,516 782,004
Retained earnin s deficit 244,186 (373,626)
7,785,859 7,594,003
TOTAL LIABILITIES AND MEMBERS' EQUITY $ 12,101,114 $ 9,927,710
See Notes to Consolidated Financial Statements
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REDACTED - FOR PUBLIC INSPECTION
FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
CONSOLIDATED STATEMENTS OF OPERATIONS
ears ended December 31, 2016 and 2015
2016 2015
OPERATING REVENUES
Local network services $ 659,333 $ 672,555
etwork access services 2,766,880 2,838,121
Lon distance services 73,694 65,745
Internet services 1,377,942 1,222,711
Wireless services 332,526 320,933
Securit services 33,943 193,413
Other nonre ulated services 160,676 297,077
Gain on sale of e ui ment 120,382 -
Miscellaneous 159,732 129,285
5,685,108 5,739,840
OPERATING EXPENSES
Cost of lon distance services 67,789 46,849
Cost of internet services 995,666 930,118
Cost of wireless services 259,139 280,212
Cost of securit services 22,352 101,642
Cost of other nonre ulated services 163,935 130,379
Plant s ecific o erations 1,148,206 1,104,456
Plant nons ecific o erations 200,062 226,149
Loss on sale of e ui ment - 19,564
De reciation and amortization 1,062,357 1,058,767
Customer o erations 533,194 541,271
Cor orate o erations 862,196 895,350
General taxes 106,166 110,295
5,421,062 5,445,052
OPERATING MARGINS 264,046 294,788
OTHER INCOME EXPENSE
Interest and dividend income 112,599 51,368
Interest durin construction 22,556 7,277
Interest ex ense 73,422 59,597
Other, net 175 -
61,908 (952)
MARGINS BEFORE INCOME TAXES 325,954 293,836
INCOME TAXES (40,105)(33,668)
ET MARGINS $ 366,059 $ 327,504
See Notes to Consolidated Financial Statements
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REDACTED - FOR PUBLIC INSPECTION
FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
STATEMENTS OF MEMBERS' EQUITY
Years ended December 31, 2016 and 2015
Unclaime
Patrona e Patrona e Capital
Capital Capital Credi
Memberships Assignable Assigned Refunds
Balance at December 31, 2014 $ 49,900 $ 395,417 $ 6,364,601 $ 755,202
et mar ins 327,504
et memberships issue 450
Estate retirements (15,925)(11,039)
Refunds of capital credits (201,230)28,497
Unclaimed capital credit refunds 9,344
Allocation of margins (392,480)392,480
Balance at December 31, 2015 50,350 330,441 6,539,926 782,004
et mar ins 366,059
et memberships issue 1,050
Estate retirements (7,804)(7,685)
Refunds of capital credits (203,485)27,810
Unclaimed capital credit refunds 11,199
Permanent equity conversion (617,812)
Allocation of margins (327,504)327,504
Balance at December 31, 2016 $ 51,400 $ 368,996 $ 6,656,141 $ 195,516
See Notes to Consolidated Financial Statements
- 6 -
REDACTED - FOR PUBLIC INSPECTION
FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
STATEMENTS OF MEMBERS' EQUITY
Years ended December 31, 2016 and 2015
Retaine Total
Unallocate Earnin s Members'
Margins (Deficit)Equity
$ 258,520 $ (373,626)$ 7,450,014
327,504
450
6,388 (20,576)
(172,733)
9,344
-
264,908 (373,626)7,594,003
366,059
1,050
4,712 (10,777)
(175,675)
11,199
617,812 -
-
$ 269,620 $ 244,186 $ 7,785,859
See Notes to Consolidated Financial Statements
- 7 -
REDACTED - FOR PUBLIC INSPECTION
FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
CONSOLIDATED STATEMENTS OF CASH FLOWS
ears ended December 31, 2016 and 2015
2016 2015
OPERATING ACTIVITIES
et mar ins $ 366,059 $ 327,504
Ad ustments to reconcile net mar ins
to net cash provided b operatin activities:
Depreciation and amortization 1,062,357 1,058,767
Deferred income taxes (36,570) (38,503)
Deferral/amortization of investment tax credits (1,557) (2,306)
Patrona e in business conducted with cooperatives (20,069) (41,015)
Patrona e distributions received from business conducted with
cooperatives 6,471 9,778
Realized (ain) loss on sale of propert (120,382) 19,564
Interest durin construction (22,556) (7,277)
Chan es in assets and liabilities:
(Increase) Decrease in:
Accounts receivable 119,420 5,808
Materials and supplies and inventor 1,850 (99,385)
Prepa ments (2,829) 21,199
Deferred char es 2,134 (8,461)
Increase (Decrease) in:
Accounts pa able 42,325 54,310
Accrued taxes (6,100) 5,639
Advance billin s 1,420 6,607
Other current liabilities (12,673)20,361
et cash rovided b operatin activities 1,379,300 1,332,590
INVESTING ACTIVITIES
Capital expenditures (2,250,479) (1,254,766)
Purchase of lon -term cash investments (203,636) -
Collections of notes receivable 12,000 12,000
Salva e, net of cost of removin plant 120,312 57,368
et cash used in investin activities (2,321,803)(1,185,398)
FINANCING ACTIVITIES
Proceeds from lon -term borrowin 2,283,133 -
Repa ment of lon -term deb (325,000) (325,000)
Patrona e capital retired (175,253) (183,965)
Memberships, net 1,050 450
et cash rovided b (used in) financin activities 1,783,930 (508,515)
e Decrease in Cash and Cash Equivalents 841,427 (361,323)
Cash and Cash Equivalents at Be innin of Year 719,178 1,080,501
Cash and Cash Equivalents at End of Year $ 1,560,605 $ 719,178
See Notes to Consolidated Financial Statements
- 8 -
REDACTED - FOR PUBLIC INSPECTION
FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2016 and 2015
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Farmers Mutual Tele hone Com an and subsidiary (herein referred to as "the Com an ")
are providers of telecommunications exchan e and local access services, lon distance,
internet, and wireless services, in a service area located rimaril in western Idaho and
eastern Oregon.
The accounting policies of the Com an conform to accounting principles generally
accepted in the United States of America. Management uses estimates and assumptions in
preparing its financial statements. Those estimates and assumptions affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. Management has
evaluated subsequent events through A ril 7, 2017, the date the financial statements were
available for issue. Tele hone o erations reflect ractices a ro riate to the tele hone
industr . The accounting records of the telephone company are maintained in accordance
with the Uniform System of Accounts for Class A and B Telephone Companies prescribed
by the Federal Communications Commission (FCC).
Principles of Consolidation
The consolidated financial statements include the accounts of the parent company, Farmers
Mutual Tele hone Com an , and its 100%-owned subsidiary, Farmers Mutual Telecom, Inc.
All material intercompany transactions have been eliminated in consolidation.
Cash Equivalents
All highly liquid investments with a maturity of three months or less at the time of purchase
are considered cash equivalents.
Accounts Receivable
Accounts receivable are reported net of an allowance for doubtful accounts. The allowance
is based on management's estimate of the amount of receivables that will actually be
collected. As a result, the Company determined an allowance for doubtful accounts was not
necessary for the years ended December 31, 2016 and 2015.
Inventories
Inventory is stated at the lower of cost or market with cost determined by the average cost
method. Inventory consists primarily of wireless mobile telephone equipment and internet
equipment that is purchased by the Company primarily for sale to customers.
- 9 -
REDACTED - FOR PUBLIC INSPECTION
FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2016 and 2015
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Investments
Marketable equity securities bought and held principally for selling in the near future are
classified as trading securities and carried at fair value. Unrealized holding gains and losses
on trading securities are reported in earnings. Marketable securities classified as available-
for-sale are carried at fair value with unrealized holding gains and losses recorded as a
separate component of members' e uit . Debt securities for which the Com an has both
the positive intent and ability to hold to maturity are classified as held-to-maturity and are
carried at amortized cost. The Com an uses the FIFO method of computing realized gains
and losses.
Nonmarketable equity investments over which the Com an has significant influence are
reflected on the equity method. Other nonmarketable equity investments are stated at cost.
Long-term cash investments include certificates of deposit and are stated at cost, which
approximates fair value.
Intangibles
Intan ible assets deemed to have indefinite lives are stated at the lower of cost or fair value.
These assets are subject to periodic impairment tests. Intangible assets with definite lives are
amortized.
Property, Plant and Equipment
Telephone plant, wireless plant and other property are capitalized at original cost including
the capitalized cost of salaries and wages, materials, certain payroll taxes, em lo ee benefits
and interest incurred during the construction period.
The Com an provides for depreciation for financial reporting purposes on the straight-line
method by the application of rates based on the estimated service lives of the various classes
of depreciable property as a roved b the Board of Directors. Assets under capital lease
obligations and leasehold improvements are amortized over the shorter of the lease term or
their respective estimated useful lives. These estimates are sub ect to chan e in the nea
term.
The estimated useful lives for each major depreciable classification of property and
equipment are as follows:
Buildin s 20-25 ears
Furniture and office e ui ment 7-10 ears
Vehicles and work e ui ment 5-8 ears
Switchin e ui ment 8-10 ears
Outside lant 15-25 ears
Other plant and equipment 5-15 years
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FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2016 and 2015
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property, Plant and Equipment (Continued)
Renewals and betterments of units of telephone property are charged to telephone plant in
service. When telephone plant is retired, its cost is removed from the asset account and
charged against accumulated depreciation less any salvage realized. No gains or losses are
recognized in connection with routine retirements of depreciable telephone property.
Repairs and renewals of minor items of telephone property are included in plant specific
operations expense.
Repairs of wireless plant and other property, as well as renewals of minor items, are charged
to plant specific operations expense. A gain or loss is recognized when wireless plant and
other property is sold or retired.
Asset Retirement Obligations
Generally accepted accounting principles require entities to record the fair value of a liability
for legal obligations associated with an asset retirement in the period in which the
obligations are incurred. When the liability is initially recorded, the entity capitalizes the
cost of the asset retirement obligation by increasing the carrying amount of the related long-
lived asset. Over time, the liability is accreted to its present value each period, and the
capitalized cost is depreciated over the useful life of the related asset.
The Com an has determined it does not have a material legal obligation to remove long-
lived assets, and accordingly, there have been no liabilities recorded for the years ended
December 31, 2016 and 2015.
Software
The Com an capitalizes software costs (including right-to-use fees) associated with
externally acquired software for internal use. Software maintenance and training costs are
expensed as incurred. Capitalized software is generally amortized on a straight-line basis
over its useful life, not to exceed five years.
Long-Lived Assets
The Com an would provide for impairment losses on long-lived assets when indicators of
impairment are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount. Based on current conditions, management
does not believe any of its long-lived assets are impaired.
Income Taxes
The Com an is organized and operated on a nonprofit basis. However, as more fully
explained in ote 5, the Com an has provided for income taxes on certain portions of its
operations.
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FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2016 and 2015
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes (Continued)
Income taxes are accounted for using a liability method and provide for the tax effects of
transactions reported in the financial statements including both taxes currently due and
deferred. Deferred taxes are adjusted to reflect deferred tax consequences at current enacted
tax rates. Deferred income taxes related to non atrona e sourced activities reflect the net tax
effects of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. Significant
components of the Com an 's deferred taxes arise from the effects of deferred investmen
tax credits, accelerated de reciation on certain assets, intan ibles amortized for tax ur oses,
and income or losses of investees reco nized for tax ur oses. The deferred tax assets and
liabilities represent the future tax return consequences of those differences, which will either
be taxable or deductible, when the assets and liabilities are recovered or settled. Tem orar
differences related to atrona e sourced activities are not ex ected to offset tax liabilities
when the differences are recovered or settled.
State investment tax credits (ITC), which were deferred prior to the Tax Reform Act of
1986, are being amortized over the regulatory life of the plant which produced the ITC.
Revenue Recognition
The Com an recognizes revenues when earned regardless of the period in which they are
billed. The Com an is required to provide telephone service to subscribers within its
defined service territory.
Local network service, internet and wireless revenues are recognized over the period a
subscriber is connected to the network.
Network access and lon distance service revenues are derived from charges for access to
the Com an 's local exchange network. The interstate portion of access revenues is based
on a cost se aration rocedure settlement formula administered by the National Exchange
Carrier Association (NECA) which is regulated by the FCC. The intrastate ortion of access
revenues is billed based on an individual com an tariff access char e structure a roved b
the state re ulator authorit . The tariffs develo ed from this structure are used to char e
the connectin carrier and reco nize revenues in the eriod the traffic is trans orted based on
the minutes of traffic carried. Lon distance revenues are reco nized at the time a call is
laced based on the minutes of traffic processed at contracted rates.
Reported network access revenues are estimates subject to settlement adjustments in the near
term resulting from changes in expense and plant investment levels and rate of return
experience.
Other nonregulated service revenues include contractually determined arrangements for E-
911 services and revenue from the sale of equipment and are recognized in the period when
the services are performed or equipment is sold.
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FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2016 and 2015
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue Recognition (Continued)
The Company recognizes internet revenue as the total amount earned from charges to
customers in the statement of operations as internet services. In accordance with tariffs filed
with the FCC by NECA, the Company charges its non-regulated internet operations the
tariffed wholesale DSL rate for the use of the Company’s regulated plant facilities. These
charges in network access services and cost of internet services totaled $511,431 and
$419,693 in 2016 and 2015, respectively.
Security service revenues represent charges for the installation and maintenance of security
systems and are recognized in the period in which they are earned.
The Company recognizes taxes charged to customers on a net basis.
Advertising Costs
Advertising costs are expensed as incurred. Advertising expenses were $55,465 and
$63,977 in 2016 and 2015, respectively.
Patronage Capital
Revenues in excess of costs and expenses are assigned to patrons on a patronage basis in
accordance with the Company's bylaws and are represented by patronage capital.
Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. The Company
determines the fair value of its financial assets and liabilities based on the fair value
hierarchy, which requires an entity to maximize the use of observable inputs and minimize
the use of unobservable inputs when measuring fair value. The following three levels of
inputs may be used to measure fair value:
Level 1 Quoted prices in active markets for identical assets or liabilities that the
Company has the ability to access at the measurement date.
Level 2 Observable inputs other than Level 1 prices, such as quoted prices for
similar assets or liabilities; quoted prices in markets that are not active;
or other inputs that are observable or can be corroborated by observable
market data for substantially the full term of the assets or liabilities.
Level 3 Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities.
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FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2016 and 2015
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Reclassifications
Certain reclassifications have been made to the 2015 consolidated financial statements to
conform with the 2016 presentation.
NOTE 2. INVESTMENTS
Investments consist of the following at December 31:
December 31,
2016 2015
S rin a Networks, LLC $ 80,660 $ 80,660
ational Information Solutions Coo erative atrona e
ca ital certificates 120,903 117,222
ational Rural Telecommunications Coo erative
atrona e ca ital certificates 245,485 236,711
Othe 3,752 2,609
$ 450,800 $ 437,202
Because of the lack of quoted market prices and the inability to estimate fair value without
incurring excessive costs, management has determined it is not practical to estimate the fair
value of these investments. However, management believes that the carrying amount of
these investments at December 31, 2016, included in other investments is not impaired.
NOTE 3. INTANGIBLES
Intangible assets at December 31 consist of the following:
2016 2015
Gross Accumulate Gross Accumulate
Amount Amortization Amount Amortization
Amortized Intangibles
Customer lists $ 30,000 $ 30,000 $ 30,000 $ 30,000
Amortization expense was $0 and $10,000 for the years ended December 31, 2016 and 2015,
respectively.
The Company’s future cash flows are not materially impacted by its ability to extend or
renew agreements related to its amortizable intangible assets.
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FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2016 and 2015
NOTE 4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment includes the following:
2016 2015
Tele hone lant in service:
Land $ 161,749 $ 161,749
Buildin s 1,782,725 1,769,604
Furniture and office e ui ment 959,154 946,505
Vehicles and work e ui ment 1,224,204 1,201,422
Switchin e ui ment 5,194,543 4,821,287
Outside lant 11,445,253 10,114,266
Subtotal 20,767,628 19,014,833
Wireless lant in service:
Com uter e ui ment and software 60,817 60,817
Buildin s 29,250 29,250
Towers and antenna 370,425 370,425
Work e ui ment 82,549 82,549
Switchin e ui ment 297,071 297,071
Subtotal 840,112 840,112
Other ro ert :
Internet e ui ment 755,057 554,467
Voice mail e ui men 171,041 171,041
Other e ui ment -10,000
Subtotal 926,098 735,508
Total property, plant and equipment $ 22,533,838 $ 20,590,453
Depreciation on depreciable property resulted in composite rates of 4.96% and 5.23% for
2016 and 2015, respectively.
NOTE 5. INCOME TAXES
Income taxes reflected in the Consolidated Statements of O erations consist of the
following:
2016 2015
Federal income taxes:
Deferred tax enefit $27,092 $36,301
State income taxes:
Current tax benefit ex ense 1,978 7,141
Deferred tax enefit 9,478 2,202
Investment tax credit, net (1,557)(2,306)
Total income tax benefit $ (40,105)$ (33,668)
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FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2016 and 2015
NOTE 5. INCOME TAXES (Continued)
Cash paid for income taxes and estimated income taxes for 2016 and 2015 totaled $1,900
and $1,750, respectively.
Deferred federal and state tax liabilities and assets reflected in the Consolidated Balance
Sheets are summarized as follows:
2016 2015
Deferred Tax Liabilities
Federal $ 8,050 $ 23,301
State 1,102 4,260
Total Deferred Tax Liabilities 9,152 27,561
Deferred Tax Assets
Federal 65,600 53,759
State 504,585 442,724
Total Deferred Tax Assets 570,185 496,483
Less: Valuation Allowance (439,189)(383,648)
et Deferred Tax Assets 130,996 112,835
et Deferred Tax Assets $ 121,844 $ 85,274
Lon -term Portion $ 121,844 $ 85,274
A valuation allowance is required to reduce the deferred tax assets reported if, based on the
weight of the evidence, it is more likely than not that some portion or all of the deferred tax
assets will not be realized. After consideration of the evidence, both positive and negative,
management determined that a valuation allowance of $439,189 and $383,648 was required
at December 31, 2016 and 2015, respectively, to reduce the deferred tax assets to the amount
that will more likely than not be realized.
Pre aid income taxes of $2,914 appearing on the Consolidated Balance Sheets at Decembe
31, 2016 reflect overpayments of estimated taxes.
Investment tax credits of $474,189 are available to reduce future taxable income and/or
payments. These credits expire at various times from 2017 through 2029. An allowance has
been recorded on a portion of these credits.
The tax provision differs from the expense that would result from applying the federal
statutory rates to o erations before income taxes because of the amortization of investmen
credits, and because the Com an is ermitted to exclude from taxable income mar ins
enerated from atrona e sourced activities if those mar ins are a ro riatel allocated to
atrons as ca ital credits. This excluded income var from ear to ear, resultin in
fluctuations in the effective tax rate and income expense.
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FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2016 and 2015
NOTE 5. INCOME TAXES (Continued)
The Company has evaluated its income tax positions and has determined that there are no
uncertain income tax positions that need to be recorded or reported in the financial
statements at December 31, 2016 and 2015.
The Company's federal income tax returns for years after 2013 remain subject to
examination.
NOTE 6. LONG-TERM DEBT
Long-term debt consists of:
2016 2015
ote a able-Ke Bank National Association - 3.48% $ 1,137,500 $ 1,462,500
Line of credit-Ke Bank - 3.10% 2,283,133 -
Less current ortion 467,694 325,000
$ 2,952,939 $ 1,137,500
The annual requirements for principal payments on long-term debt for the next five years are
as follows:
2017 610,392
2018 610,392
2019 610,392
2020 447,892
2021 285,392
Certain switching and other equipment is pledged as security for the long-term debt under
the loan agreement with the Ke Bank National Association. The loan is to be repaid in
quarterly installments covering principal and interest beginning after date of issue and
expiring in 2020.
The security and loan agreements underlying the Key Bank National Association note
contains certain restrictions on payments of capital credits refunds or other distributions to
members and incurrence of additional debt. In addition, the Company is required to
maintain certain cash flow and capital ratios. The Company was in compliance with all
covenants at December 31, 2016.
In 2015, the Company entered into an agreement with Key Bank National Association for a
line of credit up to $4,000,000. The initial line of credit is available until July 2017 with
$1,716,867 unadvanced at December 31, 2016. This loan will be amortized over 8 years
upon expiration of the line of credit.
Cash paid for interest, net of amounts capitalized for 2016 and 2015 totaled $46,892 and
$52,892, respectively.
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FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2016 and 2015
NOTE 7. EMPLOYEE BENEFITS
The Com an has a defined contribution plan covering most employees. Pension costs
expensed and capitalized for 2016 and 2015 were $82,642 and $76,199, respectively. The
Company makes contributions to the plan equal to amounts accrued for pension expense.
NOTE 8. CONCENTRATIONS OF CREDIT RISK
The Com an grants credit to local service customers, all of whom are located in the
franchised service area, as well as internet, long distance and wireless PCS customers and
telecommunications intrastate and interstate long distance carriers. The Company is subject
to competition for telecommunications services, including telecommunications exchange
services, in the franchised area.
The Com an received approximately 49% of its 2016 revenues from access revenues and
assistance provided by the Federal Universal Service Fund. As a result of the
Telecommunications Act of 1996, the manner in which access revenues and Universal
Service Funds are determined is currently being modified by regulatory bodies.
Financial instruments that potentially subject the Com an to concentrations of credit risk
consist principally of cash and cash e uivalents. The Com an laces its cash and cash
e uivalents in several financial institutions which limits the amount of credit ex osure in an
one financial institution.
The Com an maintains its cash in bank deposit accounts which, at times, may exceed
federally insured limits. The Com an has not experienced any losses in such accounts.
The Com an believes it is not exposed to any significant credit risk on cash and cash
equivalents.
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FARMERS MUTUAL TELEPHONE COMPAN
FRUITLAND, IDAHO
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2016 and 2015
NOTE 9. REGULATORY MATTERS
The Com an received 50% of its 2016 revenues from access revenues and assistance
provided by the Federal Universal Service Fund. The manner in which access revenues and
Universal Service funds are determined has been modified in several recent Federal
Communications Commission proceedings. Changes include modifications to rate-of-return
support including caps on the recovery of certain expenditures and reductions in terminating
access charges billed with eventual transition to a bill-and-keep framework for the exchange
of traffic between carriers.
On March 30, 2016, the FCC released a Report and Order, Order on Reconsideration, and
Further Notice of Proposed Rulemaking to reform USF. The order in this proceeding (1)
provides support for standalone broadband; (2) requires broadband deployment based on the
number of locations lacking service and cost of providing service; (3) requires allowances
for capital investments and further limits operational expenses; and (4) phases out support
for area served by qualifying competitors. In addition, the FCC created a new Universal
Service Support mechanism named the Alternative Connect America Model (A-CAM). The
Order allows eligible rate-of-return carriers to elect A-CAM or remain on a revised version
of the legacy rate-of-return funding. Carriers not eligible for the A-CAM will fall under the
revised version of the legacy rate-of-return funding. The Order provides a total budget of $2
billion for Universal Service Support to cover the A-CAM and legacy rate-of-return
mechanisms.
The Com an was not eli ible to elect A-CAM su ort, and therefore will remain a le ac
rate-of-return carrier. The amount of support that will be received is not certain due to
constraints on the FCC's budget.
Whether a rate-of-return carrier chooses model-based support or remains on legacy
mechanisms, it will be required to meet service obligations, adhere to reporting obligations,
and retain records.
NOTE 10. COMMITMENTS
The Company has entered into a purchase commitment with an unrelated third party for
buried fiber construction totaling $1,292,051. It is anticipated this work will be completed in
2017.
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