Academy Journal Volume 58 - Page 53

  and expenditures from the Capital Items section of Exhibit A would also be included here, such as interest expense and fees; capi- tal expenditures attributable to personnel costs or materials that must be expensed un- der audit standards; endowment payout; and Capital Campaign and other gifts (subject to accounting recognition rules). 9 Some other unrestricted revenues and expenses arise from activity in designated funds outside the Academy’s operating or capital budgets. lion. 6 This is an improvement of $4.2 million over 2016. Dedicated assets increased by $1.1 million from fiscal 2016 to fiscal 2017 and the net liability decreased by $3.1 million. The decrease in the liabilities is caused by several factors. x x The discount rates used by the actuaries were increased from 3.50% and 3.18% at June 30, 2016 to 3.76% and 3.47% at June 30, 2017. 7 The first rate is used for the pension liability and the second for the retiree medical liability. • Investment income ($9.7 million) under Operating Revenue consists mainly of NCIF and collateral pool payout used for operating budget and other designated purposes. Net realized and unrealized gain ($19.1 million) under Endowment and Other Non-Oper- ating Revenue primarily reflects a market increase during the year. We mark our in- vestments to market each quarter, recording capital appreciation or decline as investment gain or loss. Combining investment income with net realized investment gain represents the true positive investment return for the year of $28.8 million. x x An additional factor is the pension li- ability reflects an update in future mor- tality rates. 8 x x The liability for the retiree medical obli- gation was affected by increased health care rate assumptions. • Fund balances or net assets increased by $17.3 million for the year. This is detailed in the Statement of Activities statement which follows. The Statement of Activities, page 62, depicts the operating budget results described above, along with the revenues and expenses from other Acad- emy funds: • Annual fund gifts, pledges that may be re- corded under accounting rules and other gifts are included in private gifts and grants under Operating Revenue and in contribu- tions under Endowment and Other Non- Operating Revenue. The combined total for 2017 was $6.8 million. • Revenues and expenses from the Academy Operations Budget to Actual Summary (i.e., school operations, Glencairn, Cairnwood, etc. in Exhibit A) are included in the State- ment of Activities under the 2017 column heading, “Unrestricted”. Some of the receipts • The approximately $3.1 million gain in net retiree obligations (i.e., pension-related items) are reflected in Endowment and Other Non-Operating Activity. • The bottom line of the Statement shows the overall increase in net assets of $17.3 million. 6 The qualified pension plan was frozen for certain active employees in 2008 and for all active employees in 2014. The retiree health plan was terminated effective June 30, 2012 for all active employees. 7 The General Church has a similar change to its liabilities. 8 The most recent table released by the Society of Actuaries reflects an update in the mortality improvement scale from MP-2015 to MP-2016, using the most up to date expectation for future mortality rates. 9 Other receipts or expenditures in the Capital Items report only affect our balance sheet: for example, debt proceeds or principal payments and capital expenditures that add to our property, plant and equipment. 53