Academy Journal Volume 58 - Page 54

the academy journal x x After a lengthy process, the NCIF has chosen SCS Financial (SCS) to be our new investment manager, a decision approved by the Boards of all the part- ners. The decision to seek out a new investment manager came about as it was evident that the NCIF had lost confidence in JP M organ (JPM). We believed we were not getting the kind of attention that we thought a portfolio our size should get. We also became wary of JPM’s recommendations to allocate capital to their own funds. We believe that SCS will provide us with well-in- formed, independent and fully transpar- ent investment advice and best-in-class portfolio management capabilities and manager selection. We anticipate them helping us to improve our portfolio allo- cation to better diversify our risks while positioning us for growth. The boards of each of the NCIF partners approved the change. The decision was reached just after the fiscal year 2017 closed. More about this move will be reported in next year’s report. The Statement of Cash Flows, page 64 shows a negative cash flow for the year of approximately $2.3 million. Cash was provided from operating activities and investing activities in the amount of $841,000 and $449,000 respectively. Financing ac- tivities utilized cash in the amount of $3.6 million. DEBT STRUCTURE We continue to see annual interest savings from the restructuring of the Academy’s debt in Febru- ary 2014. The total savings of $5.0 million has al- most reached the cost of the swap termination fee of $5.2 million. In fact, by the end of September the savings has exceeded the termination fee. The table at the bottom of the page outlines the sav- ings achieved from the debt restructure through the end of fiscal year 2017. Despite a moderate increase in interest rates we continue to benefit from the current credit ar- rangement. ADDITIONAL INFORMATION The primary goal of this report is to provide an overview of the financial activity for the fiscal year 2017. While the reports and charts that I reviewed above provide that overview, a great deal of activ- ity occurs that is not immediately evident from these year-end reports. Through the work of the Board of Trustees, members of the corporation and the administration of the Academy, there is a great deal that goes on that does not always get reported on. Some of these activities include: • The Academy’s investment portfolio update: x x The agreement of sale with Toll Brothers to sell the 60-acre tract of land known as Fieldcrest for a substantial sum is still in effect. The process to get to settle- ment has taken longer than we hoped but is still within the contract period. The deadline for settlement is in March of 2018. You will find additional financial informa- tion in the school sections of the Journal. Much work goes on to manage the financial affairs of the Academy. I hope this report has provided a useful overview. x x The Academy’s share of hedge fund in- vestments has been reduced to less than 2% of the total portfolio. SAVINGS IN INTEREST AND BANK FEES YEAR INTEREST AND FEES UNDER PRIOR DEBT STRUCTURE INTEREST AND FEES UNDER CURRENT DEBT STRUCTURE 2014 $2,172,000 $1,483,000 $689,000 2015 2016 $1,997,000 $358,000 $1,640,000 $1,879,000 $411,000 $1,468,000 2017 $1,704,000 $540,000 $1,164,000 TOTAL $7,753,000 $2,792,000 $4,961,000 54 SAVINGS