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HomeMy WebLinkAboutAEA Basic Financial Statements and Schedules June 30, 2011 and 2010ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Basic Financial Statements and Schedules June 30, 2011 and 2010 (With Independent Auditors’ Report Thereon) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Table of Contents Management’s Discussion and Analysis Independent Auditors’ Report Balance Sheets Statements of Revenues, Expenses, and Changes in Net Assets Statements of Cash Flows Notes to Basic Financial Statements Schedules 1 Schedule of Bradley Lake Hydroelectric Project Trust Account Activities 2 Schedule of Projects — Balance Sheet 3 Schedule of Projects — Revenues, Expenses, and Changes in Net Assets Page(s) 1-7 10 11 12 13-35 36 37 38 ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Management’s Discussion and Analysis June 30, 2011 and 2010 Overview of the Financial Statements The Alaska Energy Authority’s (AEA or Authority) is composed of the following programs — AEA owned hydroelectric and intertie projects, rural energy programs, and energy development programs. Further information on AEA’s programs can be found in note | to the financial statements. This financial report consists of three sections: management’s discussion and analysis, basic financial statements, and supplementary schedules. AEA’s operations are business type activities and are considered an enterprise fund. The Authority is a component unit of the State of Alaska (State) and is discretely presented in the State’s financial statements. The Authority’s basic financial statements are the Balance Sheets; the Statements of Revenues, Expenses, and Changes in Net Assets; the Statements of Cash Flows; and the Notes to Basic Financial Statements. Basic Financial Statements The Balance Sheets report the Authority’s assets, liabilities, and resulting net assets. The net assets are reported as invested in capital assets less debt, restricted, and unrestricted. Restricted net assets are subject to external limits such as bond resolutions, legal agreements, or statutes. The Statements of Revenues, Expenses, and Changes in Net Assets report the Authority’s income, expenses, and resulting change in net assets during the periods reported. Both statements report on the accrual basis of accounting and economic resources measurement focus. The Statements of Cash Flows report the Authority’s sources and uses of cash and change in cash balance resulting from the Authority’s activities during the periods reported. The Notes to Basic Financial Statements provide additional information required to fully understand the amounts reported in the basic financial statements. Management’s Discussion and Analysis This section presents AEA management’s analysis of the Authority’s financial position and results of operations at and for the years ended June 30, 2011 and 2010. This information is presented to help the reader focus on significant financial issues and provide additional information regarding the activities of the Authority. This information should be read in conjunction with the Independent Auditors’ Report, the audited financial statements and the accompanying notes. Financial Highlights AEA’s assets exceeded its liabilities by $1,076 million and $643 million at June 30, 2011 and 2010, respectively. Of the total net assets at June 30, 2011, $126 million was invested in capital assets net of related debt, $37 million was restricted and $913 million was unrestricted. Of the total net assets at June 30, 2010, $129 million was invested in capital assets net of related debt, $40 million was restricted and $474 million was unrestricted. ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Management’s Discussion and Analysis June 30, 2011 and 2010 i Financial Analysis Financial Position Total assets, total liabilities, and total net assets at June 30, 2011, 2010, and 2009 follows (stated in thousands): 2011 2010 2009 Current assets $ 410,251 32,092 12,355 Capital assets, net 227,438 236,472 245,054 Other noncurrent and restricted assets 579,130 504,105 515,785 Total assets 1,216,819 772,669 773,194 Current liabilities 44,932 27,809 38,894 Noncurrent liabilities 95,978 101,812 107,578 Total liabilities 140,910 129,621 146,472 Total net assets 1,075,909 643,048 626,722 Total liabilities and net assets $ 1,216,819 772,669 773,194 Current assets were $378.2 million higher at June 30, 2011 compared to June 30, 2010 and $19.7 million higher at June 30, 2010 compared to June 30, 2009. Components of the changes were (stated in millions): 2011 vs. 2010 vs. 2010 2009 Increase in PCE Endowment Fund non-operating transfer due from the State of Alaska $ 400.0 — (Decrease) increase in other fund non-operating transfers due from the State of Alaska (22.8) 24.9 Increase in receivables due from state agencies and component units 0.9 0.5 Increase in investment interest receivable — 0.1 (Decrease) increase in receivable from Department of Energy (0.4) 0.2 Increase in operating receivable from operating plants 0.7 0.5 Increase (decrease) in receivable from Denali Commission 0.6 (1.9) Increase (decrease) in receivable for advanced grant funds to grantees 0.2 (4.9) Decrease in loan interest receivable (0.3) _— Net (decrease) increase in short-term loans originated, net of loan collections (0.7) 0.3 $ 378.2 19.7 ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Management’s Discussion and Analysis June 30, 2011 and 2010 Capital assets were $9.0 million lower at June 30, 2011 compared to June 30, 2010 and $8.6 million lower at June 30, 2010 compared to June 30, 2009 substantially due to depreciation of capital assets, offset by improvements and the transfer of the Larsen Bay Project to the City of Larsen Bay. Improvements and transfers to the below projects (stated in millions) were: 2011 vs. 2010 vs. 2010 2009 Bradley Lake Hydroelectric Project $ 1.0 1.6 Alaska Intertie Project 0.2 _ Larsen Bay Project (0.4) — Napakiak Intertie Project _ 0.1 $ 0.8 1.7 Other noncurrent and restricted assets were $75.0 million higher at June 30, 2011 compared to June 30, 2010 and $11.7 million lower at June 30, 2010 compared to June 30, 2009. Components of the changes were (stated in millions): 2011 vs. 2010 vs. 2010 2009 Increase from PCE Endowment Fund realized investment income $ 13.8 5.0 Increase in PCE Endowment Fund fair value 53.8 33.3 Increase due to Renewable Energy Grant Fund contribution 50.0 _ Increase due to Power Project Loan Fund contribution 10.0 _— Net increase in other funds from investment income and fair value 3.2 4.7 Decrease due to TAPL, PCE and Renewable Energy Funds expenditures (65.4) (49.0) Increase in investments relating to operating plants 2.2 0.6 Decrease from loan activity (1.8) aa Net increase (decrease) in cash from State advances on appropriations 9.2 (6.3) $ 75.0 (11.7) PCE (Power Cost Equalization) TAPL (Trans-Alaska Pipeline Liability) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Management’s Discussion and Analysis June 30, 2011 and 2010 Current liabilities were $17.1 million higher at June 30, 2011 compared to June 30, 2010 and $11.1 million lower at June 30, 2010 compared to June 30, 2009. Components of the changes were (stated in millions): 2011 vs. 2010 vs. 2010 2009 Net increase (decrease) in amount due to the State of Alaska $ 6.9 (2.0) Decrease in short-term borrowings _— (0.1) Decrease in current portion of arbitrage interest payable (0.1) (0.2) Increase in payables related to operating plants 4.5 | Increase (decrease) in other accrued expenditures 5.8 (10.5) $ 17.1 (11.1) The $5.8 million decrease in noncurrent liabilities between June 30, 2011 and 2010 was substantially caused by a decrease in the long-term portion of bonds payable, offset by increases in the noncurrent portion of arbitrage interest payable and other noncurrent liabilities. The $5.8 million decrease between June 30, 2010 and 2009 was caused by decreases in the long-term portion of bonds payable and the noncurrent portion of arbitrage interest payable. The increase in net assets from June 30, 2010 to June 30, 2011 resulted primarily from a $400 million contribution from the State of Alaska to the Power Cost Equalization Endowment Fund, $37 million in contributions from the State of Alaska to other funds, and $71 million of investment income, offset by a $71 million operating loss and a $4 million loss from the sale of Power Project Fund loans. The increase in net assets from June 30, 2009 to June 30, 2010 resulted primarily from the $25 million Renewable Energy Fund contribution from the State of Alaska and $38 million of investment income in the PCE Endowment Fund, offset by the $52 million operating loss. ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Management’s Discussion and Analysis June 30, 2011 and 2010 Operations Components of the Authority’s operating revenues, operating expenses, nonoperating investment income and operating loss for the years ended June 30, 2011 through 2009 follows (stated in thousands): 2011 2010 2009 Operating revenues: Federal grants $ 11,758 14,184 20,545 Revenue from operating plants 17,613 18,709 17,890 State appropriations 14,645 21,292 61,394 Other 3,252 1,849 1,763 Total operating revenues 47,268 56,034 101,592 Operating expenses: Grants and projects 62,072 52,791 72,010 PCE grants 31,180 31,210 37,074 Depreciation 10,291 10,277 10,233 Interest expense 5,540 6,393 7,116 Plant operating 5,674 5,201 5,077 General and administrative 3,933 1,787 1,940 Provision for loan loss (14) (3) (40) Total operating expenses 118,676 107,656 133,410 Operating loss (71,408) (51,622) (31,818) Nonoperating: Loss on sale of Power Project Fund loans (3,850) _ _ Decrease in contingent liability from loan sale 22 a can State of Alaska contribution to the Emerging Energy Technology Fund 2,400 a aa State of Alaska contribution to the Power Project Fund 10,000 Sanne aa State of Alaska contribution to the Bulk Fuel Revolving Loan Fund _ — 5,500 State of Alaska contribution to the Renewable Energy Fund 25,000 25,000 100,001 State of Alaska contribution to the Power Cost Equalization Endowment Fund 400,000 —_— jon State of Alaska contribution to the Power Cost Equalization and Rural Electric Capitalization Fund (200) 199 _— Investment income (loss), net 70,897 42,749 (43,628) Increase in net assets $ 432,861 16,326 30,055 ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Management’s Discussion and Analysis June 30, 2011 and 2010 Operating revenues decreased $8.7 million during the year ended June 30, 2011 compared to the prior year and decreased $45.6 million during the year ended June 30, 2010 compared to the same period in 2009. Components of the changes were (stated in millions): FY 2011-2010 FY 2010-2009 Net change Net change Decreased grant revenue from Denali Commission $ (1.2) (3.5) Decreased grant revenue from Department of Energy (0.3) (0.4) Decreased revenue from other federal grantors (0.9) (2.8) Fluctuations in revenue from operating plants tL) 0.8 Decreased revenue from State for PCE grants (2.7) (8.1) Decreased revenue from State general fund for Swan Tyee Intertie capital project _ (32.6) (Decreased) increased revenue from other State general fund operating and capital appropriations (3.9) 0.7 Increased revenue from other State agencies 21 0.3 Decreased revenue from loan interest and other miscellanous revenues (0.7) _— $ (8.7) (45.6) Operating expenses increased $11.0 million during the year ended June 30, 2011 compared to the prior year and decreased $25.8 million during the year ended June 30, 2010 compared to the same period in 2009. Components of the changes were (stated in millions): FY 2011-2010 FY 2010-2009 Net change Net change Decreased federally funded grant and project expenses in active rural energy construction projects $ (2.4) (6.3) Increased (decreased) State funded grant and project expenses 9.6 (13.2) Increased State agency and component unit funded expenses for interagency contracts 2.1 0.3 Decreased PCE grant expenditures —_ (5.9) Decreased bond interest expense (0.9) (0.7) Increased operating plants expense 0.5 0.1 Increased (decreased) other expenses 2.1 (0.1) $ 11.0 (25.8) During the year ended June 30, 2011, investment income substantially consisted of PCE Endowment Fund unrealized gains of $53.9 million, $12.1 million in net interest income and unrealized gains from other funds, and realized gains of $4.9 million. ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Management’s Discussion and Analysis June 30, 2011 and 2010 During the year ended June 30, 2010, the PCE Endowment Fund had unrealized gains of $33.3 million and $11.1 million in net interest income and realized gains from other funds which were offset by realized losses of $1.7 million. Outlook Annual operation of the owned hydroelectric and intertie projects are per annual budgets approved by the utilities that use the assets and pursuant to bond resolutions and other agreements. Annual operation of the rural energy programs and energy development programs are per State legislation, annual appropriations and federal grant awards. KPMG LLP Suite 600 701 West Eighth Avenue Anchorage, AK 99501 Independent Auditors’ Report The Board of Directors Alaska Energy Authority: We have audited the accompanying balance sheets of the Alaska Energy Authority (a Component Unit of the State of Alaska) (Authority) as of June 30, 2011 and 2010, and the related statements of revenues, expenses, and changes in net assets, and cash flows for the years then ended. These financial statements are the responsibility of the Authority’s management. Our responsibility is to express an opinion on these basic financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing auditing procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Authority as of June 30, 2011 and 2010, and the changes in its financial position and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated October 26, 2011, on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The Management’s Discussion and Analysis on pages | through 7 is not a required part of the basic financial statements but is supplementary information required by U.S. generally accepted accounting principles. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. 8 KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative ("KPMG International”), a Swiss entity. ane Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information included in schedules 1 through 3 is presented for the purpose of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. KPI LEP October 26, 2011 ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Balance Sheets June 30, 2011 and 2010 (Stated in thousands) Assets 2011 2010 Current assets: Grants receivable $ 1,940 1772 Loans receivable (note 6) 1,571 2,265 Operating revenue receivable 3,032 13252 Due from State of Alaska 402,594 25,415 Accrued interest receivable 1,114 1,388 Total current assets UALS) I) ALI 32,092 | Noncurrent assets: Restricted cash and investments (note 3) 22,370 22,407 Cash and investments designated for specific purposes (note 3) 555,006 456,987 Loans receivable, net of allowance (note 6) 1,754 24,711 Capital assets (note 4) 449,812 448,971 Less accumulated depreciation (222,374) (212,499) Capital assets, net i 227,438 236,472 Total noncurrent assets 806,568 740,577 Total assets $ 1,216,819 772,669 Liabilities and Net Assets Current liabilities: Due to State of Alaska $ 7,232 320 Accounts payable 28,400 18,104 Bonds payable — current portion (note 5) 6,495 6,255 Arbitrage interest payable — current portion (note 5) — 122 Accrued interest payable 2,805 3,008 Total current liabilities 44,932 27,809 Noncurrent liabilities: Bonds payable — noncurrent portion, net (note 5) 94,676 101,424 Arbitrage interest payable-noncurrent portion (note 5) 494 285 Other liabilities 808 103 Total noncurrent liabilities 95,978 101,812 Total liabilities 140,910 129,621 Net assets: Invested in capital assets, net of related debt 126,267 128,793 Restricted for debt service 19,565 19,399 Restricted by agreements with external parties 17,083 21,080 Unrestricted 912,994 473,776 Total net assets 1,075,909 643,048 Commitments and contingencies (notes 7 and 9) Total liabilities and net assets $ 1,216,819 772,669 See accompanying notes to basic financial statements. 10 ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Statements of Revenues, Expenses, and Changes in Net Assets Years ended June 30, 2011 and 2010 (Stated in thousands) Operating revenues: Federal grants Revenue from operating plants State of Alaska appropriations Revenue from state agencies and component units Interest on loans Other revenue Total operating revenues Operating expenses: Grants and projects Power cost equalization grants Depreciation Interest expense Plant operating General and administrative Provision for loan loss (note 6) Total operating expenses Operating loss Nonoperating: Loss on sale of Power Project Fund loans Decrease in contingent liability on sold loans State of Alaska contribution to the Emerging Energy Technology Fund State of Alaska contribution to the Power Project Fund State of Alaska contribution to the Power Cost Equalization Endowment Fund State of Alaska contribution to the Power Cost Equalization and Rural Electric Capitalization Fund State of Alaska contribution to the Renewable Energy Fund Investment income, net Total nonoperating Increase in net assets Net assets — beginning Net assets — ending See accompanying notes to basic financial statements. ll $ 2011 11,758 17,613 14,645 2,670 484 98 47,268 62,072 31,180 10,291 5,540 5,674 3,933 (4) 118,676 (71,408) (3,850) 22 2,400 10,000 400,000 (200) 25,000 70,897 504,269 432,861 643,048 1,075,909 2010 14,184 18,709 21,292 581 1,147 121 56,034 52,791 31,210 10,277 6,393 5,201 1,787 G) 107,656 (51,622) 199 25,000 42,749 67,948 16,326 626,722 643,048 ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Statements of Cash Flows Years ended June 30, 2011 and 2010 (Stated in thousands) 2011 2010 Cash flows from operating activities: Receipts from federal grants $ 11,591 15,977 Receipts from customers and users 21,490 19,451 Receipts from State of Alaska appropriations 21,684 23,422 Principal collected on loans 11,166 10,609 Proceeds from sale of Power Project Fund loans 20,631 — Receipts from state agencies and component units 1,717 443 Interest collected on loans 519 1,063 Other operating receipts 129 211 Loans originated (11,028) (10,305) Payments to suppliers (11,842) (20,603) Payments to grantees (85,262 (79,833) Net cash used by operating activities (19,205 (39,565) Cash flows from noncapital and related financing activities: Net unremitted interest returned on State appropriation advances (2) (24) Renewable Energy Fund contribution from State appropriation 50,000 _ Power Project Fund contribution from State appropriation 10,000 —_— Subreceipient grant advances (278) (158) Net receipt (payment) related to operating loans from AIDEA 174 (280) Net cash provided (used) by noncapital and related financing activities 59,894 (462) Cash flows from capital and related financing activities: Principal paid on bonds (36,895) (6,030) Interest paid on bonds (5,944) (6,127) Net proceeds from bond refunding 30,851 _— Costs associated with bond refunding (262) _— Purchase of capital assets (1.454) (1.463) Net cash used by capital and related financing activities (13,704) (13,620) Cash flows from investing activities: Purchase of investments (212,085) (182,083) Proceeds from sales and maturities of investments 204,526 215,382 Interest received from investments 12,064 11,227 Net cash provided by investing activities 4,505 44,526 Net increase (decrease) in cash and cash equivalents 31,490 (9,121) Cash and cash equivalents at beginning of year 48,119 57,240 Cash and cash equivalents at end of year (note 3) $ 79.609 48,119 Reconciliation of operating loss to net cash used by operating activities: Operating loss $ (71,408) (51,622) Adjustments to reconcile operating loss to net cash used by operating activities: Depreciation 10,291 10,277 Provision for loan loss and bad debt expense (14) (3) Bond interest expense 5,540 6,393 Loss on sale of Power Project Fund loans (3,850) _ Changes in assets and liabilities: Increase (decrease) in due to State of Alaska 6,912 (2,020) Decrease (increase) in due from the State of Alaska 21 (55) (Increase) decrease in grants receivable (168) 1,793 Decrease in loans receivable 24,391 303 Decrease (increase) in interest receivable 263 (84) (Increase) decrease in operating revenue receivable (1,611) 4,432 Increase (decrease) in operating accounts payable 10,428 (8.979) Net cash used by operating activities $ (39,565) Noncash capital and investing activities: Amount included in accounts payable for capital asset additions $ 285 482 Net increase in fair value of investments 54,040 33,133 See accompanying notes to basic financial statements. 12 qd) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 Organization and Operations The Alaska Energy Authority (Authority or AEA) was created by the Alaska State Legislature in 1976. AEA is a public corporation and a component unit of the State of Alaska (State). AEA’s mission is to reduce the cost of energy in Alaska. Throughout the 1980’s, AEA worked to develop the State’s energy resources as a key element in diversifying Alaska’s economy. A number of large-scale projects were constructed; four of those projects were sold in 2002 and one was transferred to the City of Larsen Bay in the fall of 2010. The Bradley Lake Hydroelectric project together with the Alaska Intertie’s 170 miles of transmission line help provide Interior Alaska with the cheaper energy available in the Southcentral portion of the State. Pursuant to statute, on August 12, 1993, the board of directors of the Alaska Industrial Development and Export Authority (AIDEA), a public corporation and a political subdivision of the State, became the board of directors of AEA. AEA continues to exist as a separate legal entity. The corporate structure and operating assets of AEA were retained but the ability to have employees, and construct or acquire energy projects was eliminated. Effective July 14, 2011, the legislature empowered AEA to acquire, construct, own and operate a hydroelectric project located on the Susitna River. Under this legislative authorization, AEA is working on planning, design and licensing of the Susitna-Watana Hydroelectric Project. Among other things, AIDEA provides personnel services for AEA. The AEA executive director is an employee of AIDEA, but is separate and independent and is not subject to supervision by AIDEA’s executive director. There is no commingling of funds, assets or liabilities between AIDEA and AEA and there is no responsibility of one for the debts or the obligations of the other. Consequently, the accounts of AIDEA are not included in the accompanying financial statements. The 1993 legislation required AEA, to the maximum extent feasible, to enter contracts with public utilities and other entities to carry out AEA duties respecting the ongoing operation and maintenance of the AEA owned operating assets; this has occurred with oversight responsibility retained by AEA. Pursuant to legislation effective July 1, 1999, rural energy programs previously administered by the former Department of Community and Regional Affairs, Division of Energy, were transferred to AEA for administration, as part of a larger reorganization of state agencies. Five general energy programs comprising more than twenty smaller programs were moved to AEA. Rural energy programs were originally part of AEA prior to the reorganization that occurred in 1993. During fiscal year 2009, legislation added energy development programs to AEA. The following is a description of AEA’s existing projects and programs: (a) Bradley Lake Hydroelectric Project The project has 120 megawatts of installed capacity and transmits its power to the State’s main power grid via two parallel 20—mile transmission lines. The project, which cost in excess of $300 million, went into commercial operation in 1991. The project is now operated by Homer Electric Association under contract with AEA. Bradley Lake serves Alaska’s Railbelt from the Kenai Peninsula to Fairbanks as well as the Delta Junction area. 1K] (Continued) (b) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 Alaska Intertie Project The Alaska Intertie is a 170—mile transmission line, designed for 345 kilovolts and is operating at 138 kilovolts. It runs between Willow and Healy, and interconnects the power systems in the Anchorage and Fairbanks areas. The Intertie reduces the number of black/brownouts throughout the system by enabling power to move either north or south when major system disturbances occur. The Alaska Intertie allows Golden Valley Electric Association (GVEA) in Fairbanks to purchase lower cost electricity produced by Chugach Electric (CEA) and the Municipality of Anchorage, d/b/a Municipal Light and Power (ML&P). It also allows Southcentral Alaska utilities to purchase power from Fairbanks during power shortages. AEA contracts with Participating Utilities for operations and maintenance. These duties are overseen by the Intertie Operating Committee and AEA under the Alaska Intertie Agreement (Agreement). Effective July 1, 2002, the State appropriated $20,300,000 to AEA to upgrade and extend a portion of the Alaska Intertie. Through June 30, 2008, AEA incurred $489,000 in costs for preliminary design work. In August 2007, AEA issued a contract to ML&P for $19,500,000 for the upgrade; the work began in September 2007. Effective July 1, 2008, the State re-appropriated $10,000,000 of the original funds for certain specific capital repairs on the Intertie. As a result, AEA amended the existing contract with ML&P to reduce scope of work regarding extending a portion of the Intertie, and entered into a separate $10,000,000 contract on August 26, 2010 with ML&P to repair static VAR compensators and a tower foundation. Effective July 1, 2011 the State appropriated an additional $5,000,000 for substation upgrades and repairs related to the Alaska Intertie. Tower foundation repairs are now underway, and proposals for the repair of static VAR compensators are being reviewed. The estimated completion date of the second contract is December 31, 2013. AEA continues to work with the Railbelt Utilities on the completion of upgrades and repairs to the Alaska Intertie. AEA management and Participating Utilities identified defects in the Agreement that AEA management believes should be corrected. Attempts to cure the identified defects were unsuccessful because amending the Agreement requires unanimous consent of each member of the Intertie Operating Committee, and at least one utility member objected to each proposed cure. AEA management, on October 16, 2006, issued contractually required notice that the Agreement would terminate in 48 months. This termination deadline has been extended to November 15, 2011, to enable AEA, the Participating Utilities, and the United States Army to complete negotiations on amendments to the Agreement. AEA management anticipates that amendments to extend the term of the Agreement will be implemented on or before the existing agreement terminates in November 2011. 14 (Continued) (d) (2) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 Larsen Bay Hydroelectric Project The 475-kilowatt project produces electricity and provides water for the City of Larsen Bay (City), an isolated Kodiak Island community. It went into commercial operation in 1991 and replaced the City’s old water supply system and provided a better source of water with reduced maintenance and improved water quality. The Authority conveyed the project to the City in the fall of 2010. Susitna-Watana Hydroelectric Project The Alaska Legislature appropriated $10 million in funding to AEA effective July 1, 2010 for the preliminary planning and conceptual design for a large hydroelectric project to be built in the Railbelt Region. A number of hydroelectric generation alternatives were studied and in November 2010, AEA issued a Preliminary Decision Document selecting the Susitna Hydroelectric Project — Low Watana Non-Expandable Alternative (now known as the Susitna-Watana Hydroelectric Project) as the primary large hydroelectric project for the State to pursue. The proposed Susitna-Watana Hydroelectric Project would be located approximately half-way between Anchorage and Fairbanks on the upper Susitna River. The Susitna-Watana dam would be located within a steep-sided valley of the Susitna River at River Mile 184 above the mouth, approximately 15 miles upstream of the Devil’s Canyon rapids. The single dam would be at the same location below Watana Creek. The Alaska Legislature unanimously passed and the Governor signed Senate Bill 42 effective July 14, 2011, which authorized the Alaska Energy Authority to acquire a Susitna river power project. Senate Bill 46 appropriated $65.7 million, effective July 1, 2011, to planning, design and permitting the project. Rural Energy Programs The rural energy programs include Bulk Fuel Storage Upgrades, Rural Power System Upgrades, Power Cost Equalization (PCE), Utility Training, and Technical Assistance, two active loan programs funded from the Bulk Fuel Revolving Loan Fund and the Power Project Fund, and one inactive loan program. Energy Development Programs The energy development programs include the Renewable Energy Grants Fund & Recommendation Program, Alternative Energy and Energy Efficiency Programs, and the Emerging Energy Technology Fund Grant Program. (2) Summary of Significant Accounting Policies (a) Basis of Accounting — Enterprise Fund Accounting The accounts of the Authority are organized as an Enterprise Fund. Accordingly, the financial activities of the Authority are reported using the economic resources measurement focus and the accrual basis of accounting, whereby revenues are recorded when earned and expenses are recorded when goods or services are received or the related liability is incurred. GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting, provides two options for reporting 15 (Continued) (b) (©) (d) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 proprietary fund activities (including component units using proprietary fund accounting). The Authority has elected to apply all applicable GASB pronouncements and all FASB Statements and Interpretations, Accounting Principles Board Opinions and Accounting Research Bulletins issued on or before November 30, 1989, unless they conflict with or contradict GASB pronouncements. Operating Revenue and Expense The Authority considers all its revenues and expenses, except investment income, the sale of program loans, and fund transfers with the State, to be part of its principal ongoing operations and therefore classifies these revenues and expenses as operating in the statement of revenues, expenses, and changes in net assets. Capital Assets Capital assets are stated at cost and depreciation is charged to operations by use of the straight-line method over their estimated useful lives. The estimated economic lives of the assets are as follows: Utility plant Life in years Intangible 30-50 Production 30-50 Transmission 20 —40 General 5-30 The Authority recognizes impairment losses for long-lived assets whenever there is a significant unexpected decline in service utility. Cash and Investments All of AEA’s cash and investments are restricted as to use by AEA. For the purposes of the statement of cash flows, cash and cash equivalents consist of cash, short term commercial paper and money market funds. AEA’s marketable securities are reported at fair value in the financial statements. Unrealized gains and losses are reported as components of the change in net assets. Fair values are obtained from independent sources. Loans and Related Interest Income Loans are generally carried at amounts advanced less principal payments collected. Interest income is accrued as earned. Accrual of interest is discontinued whenever the payment of interest or principal is more than ninety days past due or when the loan terms are restructured. The Authority considers lending activities to be part of its principal operations and classifies it as operating in the statement of revenues, expenses, and changes in net assets. For purposes of the statement of cash flows, loans are treated as program loans. 16 (Continued) (3) (e) (g) (h) @ ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 Allowance for Loan Losses The allowance for loan losses represents management’s judgment as to the amount required to absorb probable losses in the loan portfolio. The factors used by management to determine the allowance required include historical loss experience, individual loan delinquencies, collateral values, economic conditions and other factors. Management’s opinion is that the allowance is currently adequate to absorb known losses and inherent risks in the portfolio. Environmental Issues The Authority’s policy relating to environmental issues, including pollution and contamination remediation obligations to address the current or potential detrimental effects of existing pollution by participating in pollution remediation activities such as site assessments and cleanups, is to record a liability when the likelihood of Authority responsibility for clean—up is probable and the costs are reasonably estimable. At June 30, 2011 and 2010, there were no outstanding environmental issues which met both of these criteria and, accordingly, no provision has been made in the accompanying financial statements for any potential liability which may result. Income Taxes The Internal Revenue Code provides that gross income for tax purposes does not include income accruing to a state or territory or any political subdivision thereof which is derived from the exercise of any essential governmental function or from any public utility. AEA is a political subdivision of the State performing an essential governmental function and is therefore exempt from State and Federal income taxes. Appropriations and Grants The Authority recognizes grant revenue under the provisions of GASB Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions, whereby revenue is recognized when all applicable eligibility requirements, including time requirements, are met. Estimates In preparing the financial statements, management of the Authority is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities as of the date of the balance sheet. These estimates impact revenue and expenses for the period. Actual results could differ from those estimates. Cash and Investments Pursuant to various agreements, appropriations and statutory requirements relating to its operations, AEA has established accounts for assets restricted to construction, operation, and financing activities (as used herein, Fund means a separate account established by the State legislature and does not refer to a separate group of self balancing accounts as contemplated by U.S. generally accepted accounting principles). 17 (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 At June 30, 2011 and 2010, the Authority’s carrying amount of deposits (all of which were restricted or designated for specific purposes) was $79,609,000 and $48,119,000, respectively. The total of all bank balances was $80,440,000 and $48,589,000, respectively. The restricted and designated cash and investments were held in trust accounts for the following activities as of June 30, 2011 (stated in thousands): Cash and cash equivalents Investments Total Power Cost Equalization Endowment Fund $ 2,714 361,815 364,529 Renewable Energy Grant Fund — 87,822 87,822 Bradley Lake Hydroelectric Project 9,300 21,014 30,314 Rural Energy Loan Funds 34,570 22,085 56,655 Rural Energy and Energy Development Programs 6,897 5,031 11,928 Funds advanced from State and federal agencies 16,722 — 16,722 Renewable Energy Grant Program 3,824 _— 3,824 Power Development Fund 1,213 — 1,213 Alaska Intertie Project 4,369 — 4,369 Total cash and investments $ 79,609 497,767 577,376 The restricted and designated cash and investments were held in trust accounts for the following activities as of June 30, 2010 (stated in thousands): Cash and cash equivalents Investments Total Power Cost Equalization Endowment Fund = $ 16 320,697 320,713 Renewable Energy Grant Fund — 58,392 58,392 Bradley Lake Hydroelectric Project 9,449 19,863 29,312 Rural Energy Loan Funds 7,497 18,974 26,471 Rural Energy and Energy Development Programs 2,427 13,349 15,776 Funds advanced from State and federal agencies 7,448 _ 7,448 Renewable Energy Grant Program 17,652 _ 17,652 Power Development Fund 2,171 — 2,171 Alaska Intertie Project 1,459 — 1,459 Total cash and investments $ 48,119 431,275 479,394 At June 30, 2011 and 2010, amounts restricted for debt service totaled $22,370,000 and $22,407,000, respectively, for the Bradley Lake Hydroelectric Project. 18 (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 Investment Holdings Power Cost Equalization Endowment Fund and Renewable Energy Grant Fund — The Power Cost Equalization Endowment Fund (PCE Fund), created under Alaska Statute 42.45.070, and the Renewable Energy Grant Fund (RE Fund), created under Alaska Statute 42.45.045, are under the fiduciary authority of the State Department of Revenue, Treasury Division (Treasury). The purpose of the PCE Fund is to provide a long-term stable financing source for power cost equalization in order to provide affordable levels of electric utility costs in otherwise high-cost service areas in the state. The purpose of the RE Fund is to finance renewable energy projects in Alaska. State investments are managed in pools. PCE Fund assets are held in the State’s internally managed Short— term Fixed Income Pool and the Conservative Broad Market Pool (which consists solely of investments in the Broad Market and U.S. Treasury Fixed Income Pools), as well as the State’s externally managed Domestic Equity account and International Equity Pool. RE Fund assets are held in the State’s internally managed General Fund and Other Non-Segregated Investments Pool (GeFONSI). The GeFONSI consists of investments in the State’s internally managed Short-term and Intermediate-term Fixed Income Pools. The complete financial activity of the funds is shown in the Comprehensive Annual Financial Report available from the Division of Finance in the Department of Administration. Fixed income and international equity securities are valued each business day using prices obtained from a pricing service. The Domestic Equity account is valued each business day by the Trustee Committee in good faith and pursuant to procedures established by the Trustee. Securities expressed in terms of foreign currencies are translated into U.S. dollars at the prevailing exchange rates. The accrual basis of accounting is used for investment income. Income in the other fixed income pools and the International Equity Pool is allocated to pool participants daily on a pro rata basis. Domestic equity income is distributed quarterly. 19 (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 At June 30, 2011, AEA had the following cash and investments in the PCE and RE Funds (stated in thousands): Cash Investments at fair value PCE Fund RE Fund PCE FUND Broad market Short and and U.S. Short-term intermediate- Treasuries fixed terms fixed fixed Investment type income pool income pool income pools Equity Total Commercial paper $ 1,383 3,799 i _— _ U.S. Treasury bonds — 2,454 —_— 2,454 U.S. Treasury bills 2,891 7,657 _ — on U.S. Treasury notes _ 27,159 40,590 — 40,590 U.S. Treasury strip _ 25 _ U.S. government agency 341 2,719 3,927 _ 3,927 U.S. government agency discount notes 506 1,339 971 —_— 971 Mortgage-backed 284 2,128 38,903 _ 38,903 Other asset-backed 6,138 16,900 2,838 — 2,838 Overnight sweep account 165 437 — _ _— Corporate bonds 6,117 23,154 21,864 — 21,864 Yankee: Government — 308 1,067 _ 1,067 Corporate 121 1,471 5,189 — 5,189 Domestic equity an —_ —_ 177,311 177,311 International equity = —_ = 51,411 51,411 Total invested assets 17,946 87,096 117,803 228,722 346,525 Pool related net assets (liabilities) 8 726 (15,540) 15,590 50 Other pool ownership (15,240) = 15,240 <= 15,240 Net invested assets $ 2,714 87,822 117,503 244,312 361,815 20 (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 At June 30, 2010, AEA had the following cash and investments in the PCE and RE Funds (stated in thousands): Cash Investments at fair value PCE Fund RE Fund PCE FUND Broad market Short and and U.S. Short-term intermediate- Treasuries fixed terms fixed fixed Investment type income pool income pool income pools Equity Total Deposit $ (31) (54) a 57 57 Short-term Investment Fund — —_ _— 1,880 1,880 Municipal Bond — — 41 _— 41 Commercial paper 830 1,435 a — aT U.S. Treasury bonds — _— 7,516 _ 7,516 U.S. Treasury bills 2,020 3,492 _ _— — U.S. Treasury notes _ 8.891 35,139 — 35,139 U.S. Treasury when-issued 311 12,084 _ _ _ U.S. government agency 1,103 4,925 5,117 _ 5,117 U.S. government agency discount notes _ 654 _ _ _ Mortgage-backed 131 1,923 44,521 _ 44,521 Other asset-backed 3,648 6,353 2,544 —_— 2,544 Corporate bonds 7,774 17,515 25,617 _— 25,617 Yankee: Government —_ 257 1,330 — 1,330 Corporate 218 1,426 4,283 a 4,283 Domestic equity — _ _ 127,800 127,800 International equity —_— — — 59,605 59,605 Total invested assets 16,004 58,901 126,108 189,342 315,450 Pool related net liabilities (32) (509) (11,048) 339 (10,709) Other pool ownership (15,956) — 15,956 — 15,956 Net invested assets $ 16 58.392 131,016 189,681 320,697 Other AEA Cash and Investments — Bradley Lake Hydroelectric Project investments are substantially invested pursuant to investment agreements with JP Morgan Chase Bank that end the earlier of July 1, 2021 or the date of repayment of the Bradley Lake Power Revenue Bonds, First Series. All other AEA assets are managed by internal staff for liquidity and minimal risk. There is no AEA board approved investment policy, but staff follows AIDEA’s board approved investment policy. The AEA managed portfolio consists of the following eligible securities: ° Debt instruments issued or guaranteed by the U.S. government, its agencies and instrumentalities, and Government Sponsored Enterprises (GSEs); and 21 (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 e Money market funds collateralized by U.S. Treasury and agency securities. At June 30, 2011 and 2010, the fair values of AEA’s cash and investments in its other funds (stated in thousands) were: Investment type 2011 2010 Deposits $ 65 288 Money market funds 76,831 54,642 GSE-Mortgage-backed securities ay 12,146 U.S. Treasury notes 27,115 13,349 Investment agreements 21,014 19,863 Total invested assets $ 125,025 100,288 Interest Rate Risk — Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Duration is a measure of interest rate risk. It measures a security’s sensitivity to a 100-basis point change in interest rates. Duration is a weighted average term—to—maturity of an investment’s cash flows. Treasury uses industry—standard analytical software developed by The Yield Book Inc. to calculate effective duration. The software takes into account various possible future interest rates, historical and estimated prepayment rates, call options and other variable cash flows for purposes of the effective duration calculation. Duration for the AEA managed investments are as reported on Bloomberg. Short-Term Fixed Income Pool — As a means of limiting its exposure to fair value losses arising from increasing interest rates, Treasury’s investment policy limits individual fixed rate securities to fourteen months to maturity or fourteen months expected average life upon purchase. Floating rate securities are limited to three years to maturity or three years expected average life upon purchase. Treasury utilizes the actual maturity date for commercial paper and twelve-month prepay speeds for other securities. At June 30, 2011, the expected average life of individual fixed rate securities ranged from one day to one year and the expected average life of floating rate securities ranged from eight days to fourteen years. At June 30, 2010, the expected average life of individual fixed rate securities ranged from one day to twenty-nine years and the expected average life of floating rate securities ranged from one day to nine and three-quarters years. Intermediate-Term Fixed Income Pool — Through its investment policy, Treasury manages its exposure to fair value losses arising from increasing interest rates by limiting effective duration of the Intermediate-term Fixed Income Pool to + 20% of the Merrill Lynch 1-5 year Government Bond Index. The effective duration for the Merrill Lynch 1-5 year Government Bond Index at June 30, 2011 was 2.54 years. The effective duration for the Merrill Lynch 1-5 year Government Bond Index at June 30, 2010 was 2.49 years. 22, (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 Broad Market and U.S. Treasury Fixed Income Pools — Through its investment policy, Treasury manages its exposure to fair value losses arising from increasing interest rates by limiting the effective duration of its other fixed income pool portfolios to the following: Broad Market Fixed Income Pool: + 20% of the Barclay’s Capital U.S. Aggregate Bond Index. The effective duration of the Index at June 30, 2011 was 5.19 years. The effective duration of the Index at June 30, 2010 was 4.3 years. U.S. Treasury Fixed Income Pool: + 20% of the Barclay’s Capital U.S. Aggregate Treasury Index. The effective duration of the Index at June 30, 2011 was 3.94 years. The effective duration of the Index at June 30, 2010 was 5.27 years. Investment Agreements — Bradley Lake Hydroelectric Project investments are invested pursuant to agreements with JP Morgan Chase Bank that guarantees annual interest earnings of 7.38% or 7.41% per annum until the earlier of July 1, 2021 or the date of repayment of the Bradley Lake Power Revenue Bonds, First Series. The investment contracts are collateralized. Under the Internal Revenue Code of 1986, as amended, certain earnings in excess of arbitrage yield on the Bradley Lake bonds must be rebated to the U.S. Treasury. The bulk of the Bradley Lake investments are subject to rebate computation. AEA Internally Managed Investments — There is no written policy for interest rate risk for AEA’s internally managed investments, but AIDEA’s policy is followed. The duration for investments is 2 years or less. The maximum maturity of any issue is 3 years from the date of purchase. Treasury has no policy with regard to interest rate risk for the money market balance held in the International Equity Pool. 23 (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 At June 30, 2011 and 2010, the effective duration by investment type (not including the investment agreements) was as follows: Intermediate- Broad US. term market Treasury fixed income fixed income fixed income Managed by Treasury pool pool pool 2011 U.S. Treasury notes 3.09 4.74 3.89 U.S. Treasury strip 6.37 -— — U.S. Treasury bonds _— 14.64 — U.S. government agency 2.65 5.74 _— U.S. government agency discount notes — 0.01 _— Mortgage-backed 1.52 3.25 — Other asset-backed 1.08 0.97 — Commercial Paper 0.05 — _— Corporate bonds 2.01 593 — Yankees: Government 1.92 6.38 — Corporate 2.28 _ _ Portfolio effective duration 2.53 4.46 3.89 2010 U.S. Treasury notes 2.91 4.37 3.60 U.S. Treasury when-issued 2.73 _— — U.S. Treasury bonds — 9.94 8.34 U.S. government agency 1.69 4.74 4.70 U.S. government agency discount notes 0.67 a oa Mortgage-backed 1.71 2.70 — Other asset-backed 0.65 3.10 — Corporate bonds 2.24 6.18 2.01 Municipal bonds _ 12.56 _— Yankees: Government 1.87 4.95 4.29 Corporate 2.65 5.32 — Portfolio effective duration 2.47 4.29 3.97 24 (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 Managed by AEA 2011 2010 Money market 0.07 0.07 U.S. Treasury notes 0.57 0.23 U.S. government agency and GSE discount notes _ 0.62 Portfolio effective duration 0.20 0.18 Credit Risk — Credit risk is the financial risk that an issuer or other counter party to an investment will not fulfill its obligations. Treasury’s investment policy has the following limitations with regard to credit risk: Short-Term Fixed Income Pool — Short-term Fixed Income Pool investments are limited to instruments with a long-term credit rating of at least A3 or equivalent and instruments with a short-term credit rating of at least P-1 or equivalent. Asset-backed and non-agency mortgage securities must be rated A3 or equivalent. The A3 rating is defined as the median rating of the following three rating agencies: Standard & Poor’s Corporation, Moody’s and Fitch. Asset-backed and non-agency mortgage securities may be purchased only if they are rated AAA. Intermediate-Term Fixed Income Pool — Intermediate-term Fixed Income Pool investments are limited to securities with a long-term credit rating of at least Baa3 or equivalent and securities with a short-term credit rating of at least P-1 or equivalent. Asset-backed and non-agency mortgage securities must be rated investment grade. The investment grade rating is defined as the median rating of the following three rating agencies: Standard & Poor’s Corporation, Moody’s and Fitch. Asset-backed and non-agency mortgage securities may be purchased if only rated by one of these agencies if they are rated AAA. Broad Market Fixed Income Pool — The Broad Market Fixed Income Pool investments are limited to securities with a long-term credit rating of at least Baa3 or equivalent and securities with a short-term credit rating of at least P-1 or equivalent. Asset-backed and non-agency mortgage securities must be rated investment grade. The investment grade rating is defined as the median rating of the following three rating agencies: Standard & Poor’s Corporation, Moody’s and Fitch. Asset-backed and non-agency mortgage securities may be purchased if only rated by one of these agencies if they are rated AAA. U.S. Treasury Fixed Income Pool — In the U.S. Treasury Fixed Income Pool, commercial paper must be rated at least P-1 by Moody’s and A-1 by Standard & Poor’s Corporation. In addition, corporate, asset-backed and non-agency mortgage securities must be rated investment grade. The investment grade rating is defined as the median rating of the following three rating agencies: Standard & Poor’s Corporation, Moody’s and Fitch. In addition, asset-backed and non-agency mortgage securities may be purchased if only rated by one of these agencies if they are rated AAA. Corporate bonds may be purchased if rated by two of these agencies. There is no written policy with regard to credit risk for investments managed by AEA. Since AEA only invests in highly rated money markets and U.S. government and agency securities and GSEs, credit risk is minimal. 7 (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 The Bradley Lake Hydroelectric Project investments are substantially invested in collateralized investment agreements, which minimize credit risk. At June 30, 2011, the Pools managed by Treasury and the investments managed by AEA consisted of investments with credit quality ratings issued by nationally recognized statistical rating organizations as follows (using Standard & Poor’s Corporation rating scale). Short-term Intermediate- Broad market US. fixed term fixed fixed Treasury AEA Investment type Rating income pool income pool income pool _income pool managed Money market AAA —% —% —% . —* 61% Commercial paper A-l 7 _ _ _ — Commercial paper Not Rated 1 — _ — — U.S. Treasury notes AAA _— 62 28 100 22 U.S. Treasury bills AAA 16 a 2 a _— U.S. government agency AAA 2: 4 4 — _— U.S. government agency discount notes Not Rated 1 1 = — Mortgage-backed AAA 1 3 19 _ _ Mortgage-backed AA _ _ 1 = _ Mortgage-backed A _— “= 1 — — Mortgage-backed Not Rated a _ 16 _ _ Other asset-backed AAA 30 1 2 a = Other asset-backed Not Rated 4 _ _ _ _ Corporate bonds AAA 24 10 2 _ _ Corporate bonds AA 1 1 3 _ _ Corporate bonds A 3 3. 9 _ _— Corporate bonds BBB — 1 6 _ _— Corporate bonds Not Rated 6 — — — — Yankees — government AA _— 1 1 _— — Yankees — corporate AAA _ 1 1 _ _ Yankees — corporate AA 1 1 1 _ _ Yankees — corporate A — 1 2 _ _ Yankees — corporate BBB _ _— 1 _ _ No credit exposure 1 10 _ _ _ Investment agreements Not Rated _— —_— _ _— 17 100% 100% 100% 100% 100% 26 (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 At June 30, 2010, the Pools managed by Treasury and the investments managed by AEA consisted of investments with credit quality ratings issued by nationally recognized statistical rating organizations as follows (using Standard & Poor’s Corporation rating scale). Short-term Intermediate- Broad market US. fixed term fixed fixed Treasury AEA Investment type Rating income pool income pool _income pool _income pool managed Money market AAA —% —% —% —% 55% Commercial paper A-l 1 — a _ _ Commercial paper Not Rated 4 _— — _— _ U.S. Treasury notes AAA _— 28 22 74 13 USS. Treasury bills AAA 13 _ _ _ _ U.S. Treasury bonds AAA — _ 5 10 — U.S. Treasury When-Issued AAA 2 36 _ _ _ U.S. government agency and GSE discount notes AAA 1 9 4 6 _ U.S. government agency and GSE Not Rated 6 2 _ _ 12 Mortgage-backed AAA 1 5 27 — _— Mortgage-backed AA _ _ 1 _ — Mortgage-backed Not Rated _ 1 9 — = Other asset-backed AAA 21 _ 2 _ _ Other asset-backed Not Rated i _ — — — Corporate bonds AAA 42 7 2 9 _ Corporate bonds AA 2 2 3 — _— Corporate bonds A 4 3 9) _ _ Corporate bonds BBB _— 1 7 _ _ Corporate bonds Not Rated 1 _ _— _ _ Yankees — government AAA _— _ 1 _— _ Yankees — government AA _ 1 as 1 _ Yankees — corporate AAA | 2 1 _ _ Yankees — corporate AA _ i 1 _ _ Yankees — corporate A — _ 1 _ _ Yankees — corporate BBB _ _ 1 = a No credit exposure _ 2 4 _ _ Investment agreements Not Rated —_ — _— _— 20 100% 100% 100% 100% 100% Custodial Credit Risk — Custodial credit risk is the risk that deposits may not be returned in the event of a bank failure. Treasury’s policy with regard to custodial credit risk is to collateralize State deposits to the extent possible. At June 30, 2011, AEA’s deposits managed by Treasury were uncollateralized and uninsured. With respect to AEA managed investments, amounts totaling approximately $67,531,000 at June 30, 2011 and $45,193,000 at June 30, 2010, are held in money market funds not registered in AEA’s name. The investment agreements are collateralized. All other investment securities are registered in AEA’s name and are held by its custodian, the trust department of a commercial bank; therefore no custodial risk exists for these securities. 27 (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 Foreign Currency Risk — The Commissioner of Revenue formally adopts asset allocation policies for AEA’s PCE Fund at the beginning of each fiscal year which places policy limitations on the amount of international securities the PCE Fund is allowed to hold. The following policy was in place during fiscal years 2011 and 2010, and invested assets included the following holdings at June 30, 2011 and 2010, for the PCE Fund’s investment in the International Equity Pool: Policy Actual FY11 10%+5% 14.73% FY10 20%+5% 19.29% At June 30, 2011 and 2010, AEA’s PCE Fund had exposure to foreign currency risk as follows (stated in thousands): FY11 Fair FY10 Fair Currency value value Deposits: Euro Currency $ 9 1 Japanese Yen 69 54 Danish Krone 2 — 80 55 Investment — international equity: Australian Dollar 1,632 453 Canadian Dollar 821 1,238 Danish Krone — 563 Euro Currency 11,894 10,848 Hong Kong Dollar 511 1,465 Japanese Yen 8,660 11,240 New Zealand Dollar 576 — Norwegian Krone 355 390 Pound Sterling 12,224 13,988 Singapore Dollar —_ 525 Swedish Krona 947 — Swiss France 2,536 4,727 40,156 45,437 Total $ 40,236 45,492 Concentration of Credit Risk — Treasury’s policy with regard to concentration of credit risk is to prohibit the purchase of more than five percent of a pool’s holdings in corporate bonds of any one company or affiliated group. However, such prohibition does not apply to securities backed by the full faith and credit of the U.S. Government. Federal National Mortgage Association securities are not classified as corporate bonds. AEA has no written policy with respect to concentration of credit risk for its other investments. 28 (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 At June 30, 2011, AEA’s investments (excluding U.S. Treasury securities) included the following concentrations greater than 5% (dollar amounts stated in thousands): Issuer Amount Percent Federal National Mortgage Association $ 28,777 5% At June 30, 2010, AEA’s investments (excluding U.S. Treasury securities) included the following concentrations greater than 5% (dollar amounts stated in thousands): Issuer Amount Percent Federal National Mortgage Association $ 42,134 9% (4) Capital Assets Capital asset activity for the years ended June 30, 2011 and 2010 was as follows (stated in thousands): Capital assets: Intangible Production Transmission General Total capital assets Less accumulated depreciation for: Intangible Production Transmission General Total accumulated depreciation Capital assets, net $ Balance at Balance at July 1, 2010 Additions Deletions June 30, 2011 14 au ail 14 253,296 953 (238) 254,011 189,642 1 (178) 189,465 6,019 303 _— 6,322 448,971 i) (416) 449,812 (4) my Tn (4) (94,956) (5,290) 238 (100,008) (112,424) (4,960) 178 (117,206) (5,115) (41) = (5,156) (212,499) (10,291) 416 (222,374) 236,472 (9,034) = 227,438 29 (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 Balance at Balance at July 1, 2009 Additions Deletions June 30, 2010 Capital assets: Intangible $ 14 _ — 14 Production 252,541 755 _ 253,296 Transmission 188,726 916 — 189,642 General 5,995 24 _— 6,019 Total capital assets 447,276 1,695 — 448,971 Less accumulated depreciation for: Intangible (4) — — (4) Production (89,678) (5,278) —_— (94,956) Transmission (107,465) (4,959) —_ (112,424) General (5,075) (40) — (5,115) Total accumulated depreciation (202,222) (10,277) — (212,499) Capital assets, net $ 245,054 (8,582) — 236,472 In September 2010, AEA conveyed the fully depreciated Larsen Bay Hydroelectric Project to the City of Larsen Bay. On August 19, 2011, AEA conveyed the Napakiak Intertie assets to the Napakiak IRECINRAQ Power Corporation pursuant to the federal grant agreement that provided funding for the project. The book value of the transferred assets was $3,131,000. 30 (Continued) (5) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 Long-Term Debt Long-term debt activity for the years ended June 30, 2011 and 2010 was as follows (stated in thousands): Balance Balance at July 1, at June 30, Due within 2010 Additions Deletions 2011 one year Bradley Lake Power Revenue Bonds: First Series (a) $ 100 — “= 100 _— Second Series (a) 2,305 — (2,305) - —_ Refunding, Third Series (a) 37,720 —_— (3,810) 33,910 4,040 Refunding, Fourth Series (a) 36,895 _— (140) 36,755 2,455 Refunding, Fifth Series (a) (b) 30,640 —_ (30,640) — — Refunding, Sixth Series (a) (b) — 28,800 — 28,800 — Total bonds payable 107,660 28,800 (36,895) 99,565 6,495 Arbitrage interest payable (c) 407 211 (124) 494 _— Bond discount and deferred interest 18 2,299 (711) 1,606 — $ 108,085 31,310 (37,730) 101,665 6,495 Balance Balance at July 1, at June 30, Due within 2009 Additions Deletions 2010 one year Bradley Lake Power Revenue Bonds: First Series (a) $ 100 — — 100 — Second Series (a) 4,605 _— (2,300) 2,305 2,305 Refunding, Third Series (a) 41,315 — (3,595) 37,720 3,810 Refunding, Fourth Series (a) 37,030 _— (135) 36,895 140 Refunding, Fifth Series (a) (b) 30,640 ~ — 30,640 — Total bonds payable 113,690 _ (6,030) 107,660 6,255 Arbitrage interest payable (c) 531 233 (357) 407 122 Bond discount and deferred interest (359) _ 377 18 _— $ 113,862 233 (6,010) 108,085 6,377 (a) AEA issued the Power Revenue Bonds, First and Second Series (Bradley Lake Bonds), in September 1989 and August 1990, respectively, for the long term financing of the construction costs of the Bradley Lake Hydroelectric Project and refunded AEA’s Variable Rate Demand Bonds which were issued in November 1985 to provide interim financing of the project. AEA issued the Power Revenue Refunding Bonds, Third and Fifth Series in April 1999 to refund a portion of the First Series Bonds and to provide costs of issuance. AEA issued the Power Revenue Refunding Bonds, Bil (Continued) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 Fourth Series in April 2000 to refund a portion of the Second Series Bonds and to provide costs of issuance. All of the revenues derived by AEA from the operation of the project and all moneys, securities and funds (except the excess earnings fund), including a capital reserve fund, held or set aside are pledged and assigned to secure the payment of principal, redemption premium, if any, and interest on the bonds. No other revenues of AEA are pledged as security for the payment of the bonds. AEA has covenanted to notify the State Legislature of any failure to maintain the capital reserve fund at its required level. The bonds, except for the Sixth Series, are further secured by bond insurance. AEA collects from each power purchaser a percentage share of annual project costs. The outstanding Bradley Lake Bonds mature annually each July | through the year 2021 with interest rates ranging from 2.5% to 6.25%. (b) In July 2010 the Authority issued $28,800,000 of Power Revenue Refunding Bonds, Sixth Series, to refund and defease $30,640,000 aggregate outstanding principal amount of the Authority’s Power Revenue Refunding Bonds, Fifth Series, and to pay costs of issuing the bonds. The refunding resulted in aggregate debt service payments over the next eleven years of approximately $3,316,000 less than the debt service payments which would have been due on the refunded bonds. There was an economic gain of approximately $2,350,000 which is calculated as the net difference between the present value of the old debt service requirements and the present value of the new debt service requirements, discounted at the effective interest rate and adjusted for additional cash paid. The refunded bonds were called on August 2, 2010. (c) The arbitrage interest payable is due to the U.S. Treasury for the excess of investment income on the proceeds of each series of AEA’s tax exempt Bradley Lake bonds over the related interest expense computed in accordance with Section 148 of the Internal Revenue Code of 1986, as amended. The accumulated arbitrage interest payable amount is computed each year, and the amount for each series is first due after the end of the fifth bond year and every five years thereafter. AEA maintains a separate account for each series with the trustee and each year sets aside a sufficient amount to satisfy the liability. The minimum payments related to all bonds for the years subsequent to June 30, 2011 are as follows (stated in thousands): Principal Interest Total Year ending June 30: 2012 $ 6,495 5,416 11,911 2013 6,880 5,014 11,894 2014 7,300 4,589 11,889 2015 7,735 4,138 11,873 2016 8,570 3,655 12,225 2017-2021 51,715 10,130 61,845 2022 — 2022 10,870 292 11,162 $ 99,565 33,234 132,799 32 (Continued) (6) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 In addition, the Authority has participated in the following debt agreements: Other Debt — In 1982, AEA assumed $44,859,000 of 5% mortgage notes payable which requires quarterly principal and interest payments to the Rural Utilities Service (RUS) in connection with the Solomon Gulch Hydroelectric Project. Concurrent with the assumption, AEA deposited with a trustee Treasury notes sufficient to satisfy and provide for timely repayment of all principal and interest due on the assumed RUS loans. Accordingly, the loans and related trust assets are not included in the financial statements of AEA. At June 30, 2011, the unpaid principal balance of the notes was $8,836,000 and the trust assets had a fair value of $9,660,000. Conduit Financing — City and Borough of Sitka — Utility Revenue Refunding Bonds, Series 1997 and Utility Revenue Bonds, Series 1992 — In May 1992, AEA issued $56,890,000 of tax-exempt bonds that allowed the City and Borough of Sitka (Sitka) to refinance its 1979 municipal bonds, resulting in significant debt service savings to Sitka. In November 1997, AEA issued $22,080,000 of tax— exempt bonds to advance refund and defease $20,145,000 of the Series 1992 bonds (collectively with the Series 1992 bonds, the Sitka Bonds). The Sitka Bonds are not included in these financial statements. In December 2010, the Alaska Municipal Bond Bank issued bonds, the proceeds of which were used to refund and defease the Sitka Bonds. The Series 1992 bonds were defeased and $12,900,000 remain outstanding at June 30, 2011. The Series 1997 bonds were called and redeemed in January 2011. Loans The Authority administers the Power Project Loan Program, the Rural Electrification Revolving Loan Program and the Bulk Fuel Revolving Loan Program. Loans outstanding at June 30, 2011 and 2010 are classified as follows (dollar amounts stated in thousands): 2011 2010 No. of loans Amount No. of loans Amount Power Project Loan Program 5)||$ 1,329 42 $ 25,635 Rural Electrification Revolving Loan Program rd 539 2 593 Bulk Fuel Revolving Loan Program 17 1,550 17 1,582 24 3,418 61 27,810 Less allowance for loan losses (93) (834) $ 3,325 $ 26,976 Pursuant to legislation and an agreement, on September 30, 2010 AEA sold to AIDEA for $20,631,000, thirty-seven (37) Power Project Fund loans with a then outstanding balance of $24,254,000, plus accrued interest. Under the agreement, at AIDEA’s request, AEA is required to repurchase any loan upon a 33 (Continued) (7) (8) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 payment default. As a result AEA has recognized an estimated liability equal to AIDEA’s allowance for doubtful accounts on the remaining outstanding principal balance of the sold loans. On June 30, 2011, the outstanding principal balance of the loans sold was $23,510,000, for which AEA has recognized an estimated liability of $705,000. Loans that are more than 90 days past due on which the accrual of interest has been discontinued amounted to $68,842 and $69,121 at June 30, 2011 and 2010, respectively. An analysis of changes in the allowance for loan losses for the years ended June 30, 2011 and 2010 follows (stated in thousands): 2011 2010 Balance at beginning of year $ 834 1,052 Loan sale (727) —_— Write-offs — (215) Provision for loan loss a4) 3) Balance at end of year $ 93 834 Risk Management AEA is exposed to various risks of loss and obtains coverage for its risks through the purchase of commercial insurance and participation in the State Risk Management Pool. Related Parties (a) Alaska Industrial Development and Export Authority Pursuant to understandings and agreements between AIDEA and AEA, AIDEA provides administrative, treasury, personnel, data processing, communications, and other services to AEA. During 2011 and 2010, AEA expensed $5,678,000 and $5,238,000, respectively, for such services. During 2011 and 2010, AEA capitalized $14,000 and $7,000, respectively, for such services. AEA has a borrowing arrangement with AIDEA to provide working capital funds. At June 30, 2011 and 2010, AEA had $1,671,000 and $1,770,000, respectively, payable to AIDEA for services and borrowings. As discussed in note 6, during 2011, AEA sold loans to AIDEA for $20,631,000. 34 (Continued) (9) (10) ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Notes to Basic Financial Statements June 30, 2011 and 2010 (b) Alaska Intertie Operating Committee Effective May 1, 1986, AEA entered into an agreement with utilities using the Alaska Intertie for wheeling of electrical power. Pursuant to the agreement, the Intertie Operating Committee (IOC) was established to manage the system. The IOC is comprised of a representative from AEA and each of the utilities. AEA is reimbursed for operation and maintenance costs on a monthly basis with an annual settlement to adjust the payments to actual costs. AEA management on October 16, 2006, issued contractually required notice that the agreement would terminate in 48 months. This termination deadline has been extended to November 15, 2011, to enable AEA, the Participating Utilities, and the United States Army to complete negotiations on amendments to the Agreement. AEA management anticipates that amendments to extend the term of the Agreement will be implemented before the existing agreement terminates in November 2011. (c) Bradley Lake Project Management Committee Effective December 7, 1987, AEA entered into a power sales agreement with entities purchasing electric power produced by the Bradley Lake Hydroelectric Project. Pursuant to the agreement, a Project Management Committee (PMC) was formed. The PMC is comprised of a representative from AEA and each of the power purchasers. The participating power purchasers make monthly payments. directly to the bond trustee based on their respective percentage share of the estimated annual project costs, including debt service and annual administrative fee to AEA. Commitments and Contingencies AEA from time to time may be a defendant in legal proceedings and contract disputes related to the conduct of its business. The State Department of Law manages all pending litigation of AEA, and any liability arising from the settlement of pending claims is a liability for which the Department of Law or AEA requests an appropriation from the Legislature to satisfy judgment in the event that the judgment exceeds available funds or the proceeds from applicable insurance policies. In the opinion of management, the financial position of AEA will not be affected materially by the final outcome of any present legal proceedings or other contingent liabilities and commitments. In the normal course of business, AEA also has various commitments, such as commitments for the extension of credit and award of grants. At June 30, 2011 and 2010, AEA had open loan commitments of $23,516,000 and $12,947,000, respectively. At June 30, 2011 and 2010, AEA had committed to grant awards to be funded by State appropriations and federal awards; the amounts committed were $87,729,000 and $117,918,000, respectively. Subsequent Event On August 5, 2011, Standard & Poor’s downgraded its long-term sovereign credit rating on U.S. issued and U.S. backed securities from AAA to AA+. If this event had occurred on or prior to June 30, 2011, then the U.S. issued and U.S. backed securities shown in note 3 at June 30, 2011 would have been reported with a rating of AA. 35 Schedule 1 ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Schedule of Bradley Lake Hydroelectric Project Trust Account Activities Year ended June 30, 2011 (Stated in thousands) Capital Renewal and Excess Operating Debt service reserve contingency earnings Revenue Operating reserve Construction account account account account account account account account Total Balance at July 1, 2010 $ 9,394 12,834 2,978 178 2,150 973 805 _ 29,312 Interest received 333 810 265 9 340 87 68 _ 1,912 Bond principal paid (6,255) —_— _— _— _ _— _ _— (6,255) Bond interest paid (5,813) —_ —_ — _ — _ (131) (5,944) Reduction of capital reserve — (55) _ — _— — _— 55 — Refunding bond proceeds _— _ _— _- = _ _ 30,851 30,851 Bond defeasance, net _ — — _ — _ — (30,640) (30,640) Arbitrage paid _ _ — (122) (2) — —_ a (124) Operating budget surplus paid - _ _ — _ (281) _ _ (281) Construction expenditures _ _ (803) _ (543) —_— _ —_— (1,346) Operating revenue received — _ — — 17,353 ~_ = _ 17,353 Operating expenses paid — —_ — —_ _— (4,262) _— _— (4,262) Bond issuance costs paid a — = _— — _— — (262) (262) Transfers between funds 11,641 (810) 1,432 226 (17,073) 4,427 30 127 = Balaneeiet June 20,201 ae a See accompanying independent auditors’ report 36 Assets Current assets: Grants receivable Loans receivable Operating revenue receivable Due from State of Alaska Accrued interest receivable Total current assets Noncurrent assets: Restricted cash and investments Cash and investments designated for specific purposes Loans receivable, net of allowance Capital assets, net of accumulated depreciation Total noncurrent assets Total assets Liabilities and Net Assets Current liabilities: Due (from) to State of Alaska Accounts payable Bonds payable — current portion Accrued interest payable Total current liabilities Noncurrent liabilities Bonds payable — noncurrent portion, net Arbitrage interest payable — noncurrent portion Other liabilities Total noncurrent liabilities Total liabilities Net assets Invested in capital assets, net of related debt Restricted for debt service Restricted by agreements with external parties Unrestricted Total net assets Total liabilities and net assets See accompanying independent auditors’ report ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Schedule of Projects — Balance Sheet June 30, 2011 (Stated in thousands) Schedule 2 Administration Rural Energy Bradley Lake Alaska Rural and Power and Energy Hydroelectric Intertie Energy Development Development Combined Project Project Projects Fund Programs balance $ == _— = (30) 1,970 1,940 a _ = od 1,571 1,571 190 1,235 _ _- 1,607 3,032 a _ —_ == 402,594 402,594 1,027 = = = 87 1114 1,217 1,235 = (30) 407,829 410,251 22,370 — _ _ _— 22,370 7,944 4,369 — 17,868 524,825 555,006 = — _— = 1,754 1,754 185,627 38,680. 3,131 = _— 227,438 215,941 43,049 3,131 17,868 526,579 806,568 $ 217,158 44,284 3,131 17,838 934.408 1,216,819 ee $ _ (185) = 15,911 (8,494) 7,232 2,904 5,772 248 (245) 19,721 28,400 6,495 — _— _— _ 6,495 2,805 = _— = _ 2,805 12,204 5,587 248 15,666 11,227 44,932 94,676 _ = _ _— 94,676 494 = = = = 494 103 = = = 705 808 95,273 = = = 705 95,978 107,477 5,587 248 15,666 11,932 140,910 84,456 38,680 3,131 — = 126,267 19,565 _ _ _— _ 19,565 5,660 17 — _— 11,406 17,083 = ered (248) 2,172 911,070 912,994 109,681 38,697 2,883 2,172 922,476 1,075,909 $ 217,158 44,284 3,131 17,838 934,408 1,216,819 37 Operating revenues: Federal grants Revenue from operating plants State of Alaska appropriations Revenue from state agencies Interest on loans Other revenue Total operating revenues Operating expenses: Grants and projects Power cost equalization grants Depreciation Interest expense Plant operating General and administrative Provision for loan loss Total operating expenses Operating (loss) income Nonoperating: Loss on sale of Power Project Fund loans Decrease in contingent liability on sold loans State of Alaska fund transfers Investment income, net Increase (decrease) in net assets Net assets — beginning Net assets — ending See accompanying independent auditors’ report. ALASKA ENERGY AUTHORITY (A Component Unit of the State of Alaska) Schedule of Projects — Revenues, Expenses, and Changes in Net Assets Year ended June 30, 2011 (Stated in thousands) Schedule 3 Administration Rural Energy Bradley Lake Alaska Rural and Power and Energy Hydroelectric Intertie Energy Development Development Combined Project Project Projects Fund Programs balance $ an a 1 — 11,757 11,758 15,814 1,787 12 — — 17,613 _— 259 — _— 14,386 14,645 _ = _ _ 2,670 2,670 _ _— — — 484 484 _ a = a 98 98 15,814 2,046 13 — 29,395 47,268 _ — _— = 62,072 62,072 _— — _ _ 31,180 31,180 6,931 3,360 _— — _ 10,291 5,540 _— — _ _ 5,540 3,952 1,716 6 _ _— 5,674 279 83 1 _ 3,570 3,933 _ ao = a (14) (14) 16,702 5,159 7 — 96,808 118,676 (888) (3,113) 6 a (67,413) (71,408) _ _ a _ (3,850) (3,850) — _— — _ 22 22 — _— — _ 437,200 437,200 1,729 1 = — 69,167 70,897 841 (3,112) 6 _— 435,126 432,861 108,840 41,809 2,877 2,172 487,350 643,048 $ 109,681 38,697 2,883 2,172 922,476 1,075,909 38