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