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.
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