Track performance of those assets - and asset managers - against - - PowerPoint PPT Presentation

• Report on value, income, and prospects of

Alaska’s key assets for the preceding year

• Identify emerging public policy issues related to

those assets

• Ask asset managers to identify what criteria they

should be judged upon in the coming year

• Track performance of those assets - and asset

managers - against that criteria and other metrics

Manages its assets as:

• Natural Resources, available for

sale, lease, or conservation

• Financial Assets, intended to

produce financial return

• Enterprises, intended to produce

both financial return and key infrastructure

Total Gross Domestic Product – 56.6 Billion (2014)

Alaska’s real GDP fell 1.4%. National Average was up 4.1%

27% 18% 12% 9% 6% 28% Top state Industries as a % of GDP

Resources Government Transportation Real Estate Health Care Other

Per Capita Personal Income: $ 54,012 (2014)

Grew 5.4% from 2013 (National Average 3.5%)

117% of the National Average of $ 46,049

Source: Bureau of Economic Analysis

$51.7 $56.4 $66.3 $70.1 $76.0 $82.1 $71.9 FY '09 FY '10 FY '11 FY '12 FY '13 FY '14 FY '15

Total Net Assets

Billions Each Individual Alaskan’s Share $ 97,368

• 1. Financial Reporting – Standards – Audited Financials
• 2. GASB/GAAP
• 3. In arrears, past tense, FYE 15 is 6/30/15, 8 months ago! Published

2/1/16

• 4. Balance sheet – ‘Statement of Net Position’ - Assets less liabilities =

Net Position/Net Assets/Capital/Equity/Worth!

• 5. Income Statement – ‘Statement of Activities’ –
• 6. Combined is CAFR: “Comprehensive Annual Financial Report”
• 7. “Qualified” Vs. ‘Unqualified or Clean’ Auditors Opinion
• a. 2014 was ‘Qualified’ because IS system for Medicaid –

‘pervasive/significant defects’

• b. 2015 was ‘Unqualified/Clean’ but ‘restated/prior period adjustment’

primarily caused by GASB 68 for pension liability $6B hit! Combined with deficit spending $11.3B difference in Unrestricted Net Position resulting in 13% drop.

• 8. Reconciliation with budget/appropriations is important!
• 9. Cash Flow shortfall, Liquidity – much bigger than legislative discussion

Original ‘Budget’ Deficit $5.3B, Final $6.6B, Actual $8.8B = $2.2 worse! Net of $1.2B ‘fund transfers’

• Significant Fiduciary Risk – State Vs Muni/Subdivisions capped

at 22% PERS and 12.56% of ‘covered payroll’ as state responsibility

• Net position at June 30, 2015 of the two largest pension funds,

the Public Employees' (PERS) and Teachers' (TRS) Retirement Systems' funds, were $16.4 billion and $8.2 billion respectively. The funding status for PERS and TRS pensions and postemployment healthcare as of the June 30, 2014, actuarial valuations indicated the actuarial accrued liabilities were 59.7 percent pensions and 87.0 percent postemployment funded for PERS, and 54.5 percent pension and 77.0 percent postemployment funded for TRS.

• As a result of implementing GASB Statement 68, Accounting

and Financial Reporting for Pensions, the State recorded $752 thousand net pension asset, $1,196 million deferred outflows of resources, $6,057 million net pension liability, and $704 million deferred inflows of resources for the primary government. This was the primary reason for the $6.3 billion adjustment to the beginning unrestricted net position in fiscal year 2015.

69.25 58.66 68.98 86.8 81.19 90.50 72.36 FY '09 FY '10 FY '11 FY '12 FY '13 FY '14 FY'15

Total Fisheries Tax Revenue Millions

Millions FY ‘15 FY ‘14 FY ‘13 FY ‘12 FY '11 FY '10 Total Budget $14.6 $14.1 $13.7 $13.7 $12.6 $13.5 Revenue from User Fees $3.3 $3.1 $2.9 $3.00 $2.60 $2.8 Total Acres of Land 3.3 3.3 3.3 3.3 3.3 3.3 Total No. of Visitors 4.5 4.6 4.6 5.2 5.2 5.4

FY '15 FY '14 FY '13 FY '12 FY '11 FY '10 FY '09

Millions of Acres 100.5

100.4 100.4 100.4 100.3 100.2 98.5

Less: Total Land Conveyed

• 2.2
• 2.2
• 2.2
• 2.2
• 2.2
• 2.23
• 2.2

Remaining Total Acquired Lands

98.3 98.2 98.2 98.2 99.1 98.9 97.3

*Does not include 65 million acres of submerged land acquired at Statehood.

2015 Alaska Mineral Activity

Production: Five major metal mines, >150

small placer mines, one coal mine:

• 966,000 ounces gold
• 15,712,000 ounces silver
• 149,781 tons lead
• 684,814 tons zinc
• 1.4 million tons coal

First Market Value $2.77 B

(excluding coal, & industrial minerals)

Exploration: Diverse deposit

types & commodities:

• 7 Major projects
• 6 Advanced projects
• 14 drilling projects
• 48 Hard rock

exploration permits

• 1 Advanced coal

project

• $80 M Estimated

Expenditures

Development

• Donlin Gold – Draft EIS in public

review

• Chandalar Placer – Completed

construction, test production

• Chuitina Coal – Draft EIS pending

FY ‘15 FY ‘14 FY ‘13 FY ‘12 FY ‘11 FY ‘10 FY ‘09 Millions of Acres Leased 5.8 5.8 5.8 5.3 6.1 6.4 6.9 # of Leases 1,997 1,906 1,748 1,569 1,737 1,845 1,984

Millions FY‘ 15 FY‘ 14 FY‘ 13 FY ‘12 FY ‘11 FY ‘10 FY ‘09 Petroleum Property Tax

$127.8 $128.1 $99.6 $215.4 $184.3 $118.8 $111.2

Corporate Petroleum Income Tax

$94.8 $344.5 $478.1 $570.9 $601.8 $493.7 $528.6

Severance Tax

(a.k.a. Production Tax) ($264.1) $2,035.2 $3,674.2 $5,946.3 $4,131.4 $2,860.5 $3,537.0

Petroleum Mineral Bonuses and Rents

$22.4 $15.1 $19.0 $6.3 $10.3 $9.1 $12.4

Oil and Gas Royalties

$1,051.9 $1,705.0 $1,895.6 $2,026.8 $1,853.5 $1,523.0 $1,535.3

Total Petroleum Revenue

$1,032.8 $4,227.9 $6,166.5 $8,762.2 $6,781.3 $5,005.1 $5,724.5

Total Nonpetroleum Revenue

$1,307.9 $2,172.6 $1,787.0 $1,84.2 $1,997.4 $1,403.5 $372.0

$7.0 $8.2 $10.6 $11.6 $12.8 $8.7

FY '10 FY '11 FY '12 FY '13 FY '15

• Jan. 2016

CBR Net Assets

Billions

$ Billions FY’15 FY’14 FY’13 FY ‘12 FY '11 FY '10 FY '09 Net Assets 52.8 51.2 44.9 40.3 40.1 33.3 30.0 Statutory Net Income 2.9 3.5 2.9 1.6 2.1 1.6

• 2.5

Interest, Dividends, Real Estate, Other 1.1 1.2 1.1 1.0 0.9 0.8 1.0 Increase in Market Value of Investments 1.3 5.8 3.4

• 1.0

6.0 2.8

• 7.3

Total Revenue 2.5 7.0 4.4

• 0.2

6.9 3.3

• 6.3

% Return 4.9 15.5 10.9 0.0 20.6 11.7

• 18.0

Country Fund Assets $Billions Inception Norway Government Pension Fund – Global $824.9 1990 UAE - Abu Dhabi Abu Dhabi Investment Authority $773.0 1976 China China Investment Corporation $746.7 2007 Saudi Arabia SAMA Foreign Holdings $632.3 n/a Kuwait Kuwait Investment Authority $592.0 1953 China SAFE Investment Company $474.0 1997 China - Hong Kong Hong Kong Monetary Authority Investment Portfolio $442.4 1993 Singapore Government of Singapore Investment Corporation $344.0 1981 Qatar Qatar Investment Authority $256.0 2005 China National Social Security Fund $236.0 2000 Singapore Temasek Holdings $193.6 1974 UAE – Dubai Investment Corporation of Dubai $183.0 2006 UAE – Abu Dhabi Abu Dhabi Investment Council $110.0 2007 Australia Australian Future Fund $95.0 2006 South Korea Korea Investment Corporation $91.8 2005 Kazakhstan Samruk-Kazyna JSC $85.1 2000 Kazakhstan Kazakhstan National Fund $77.0 2000 Russia National Welfare Fund $73.5 2008 UAE - Abu Dhabi International Petroleum Investment Company $66.3 1984 UAE - Abu Dhabi Mubdala Development Company $66.3 2002 Libya Libyan Investment Authority $66.0 2006 Russia Reserve Fund $65.7 2008 Iran National Development Fund $62.0 2011 US - Alaska Alaska Permanent Fund $53.9 1976 Algeria Revenue Regulation Fund $50.0 2000 Malaysia Khazanah Nasional $41.6 1993 Brunei Brunei Investment Agency $40.0 1983 US – Texas Texas Permanent School Fund $37.7 1854 Source: Sovereign Wealth Fund Institute February, 2016, $ Billions

$ Millions FY ‘15 FY ‘14 FY ‘13 FY ‘12 FY ‘11 FY ‘10 FY ‘09 Net Assets $601.9 $585.6 $527.4 $487.6 $501.8 $427.5 $402.0 Rents and Royalty Income $3.6 $3.0 $2.0 $5.3 $6.4 $3.8 $5.0 Investment Income $25.3 $72.2 $48.2 $1.9 $80.4 $44.5 -$75.8

$ Millions FY ‘15 FY ‘14 FY ‘13 FY ‘12 FY ‘11 FY ‘10 FY ‘09 Net Position

(Assets)

$1,290.5 $1,270.8 $1,161.2 $1,075.7 $1,039.5 $1,012.2 $974.5 Operating Revenue $53.1 $64.9 $51.9 $69.5 $68.3 $82.5 $69.5 Operating Expense $27.8 $29.0 $31.2 $27.4 $27.2 $23.6 $23.3 Net Operating Income $25.3 $35.9 $20.7 $42.1 $41.1 $58.9 $46.2 Transfers to State of Alaska/Other Agencies $10.7 $70.7 $20.4 $29.4 $23.4 $22.7 $23.8 Non-operating Revenue $13.7 $140.6 $85.2 $23.3 $9.6 $1.5 $5.1 Change in Net Position $28.3 $105.8 $85.5 $36.1 $27.3 $37.7 $28.6

$1.01 $1.04 $1.08 $1.16 $1.27 1.29 FY 10 FY ‘11 FY ‘12 FY ‘13 FY ‘14 FY ‘15

Net Assets

In Billions

$ Millions FY ‘15 FY ‘14 FY ‘13 FY ‘12 FY '11 FY '10 Net Position $1,485.5 $1,509.9 $1,525.5 $1,554.1 $1,593.8 $1,624.0 Operating Revenue $290.1 $308.1 $315.3 $351.2 $385.7 $397.3 Operating Expense $281.6 $311.5 $333.2 $381.6 $398.6 $407.0 Operating Income $8.5

• $3.4
• $17.9
• $30.4
• $12.9
• $9.7

Change in Net Position $4.7

• $4.8
• $28.6
• $39.7
• $30.2
• $46.5

$1.62 $1.59 $1.55 $1.53 $1.51 $1.49

FY '10 FY '11 FY '12 FY '13 FY '14 FY '15

Net Position

In Billions

• Mortgage purchases $465 million and mortgage payoffs $240 million,

resulting in AHFC’s mortgage portfolio growing 5% to $2.66 billion.

• AHFC continued to optimize its debt portfolio by refunding higher cost

bonds, thus decreasing bond interest expenses by 7%.

• Increased mortgage revenues and decreased operating expenses lead

to net profit of $8.5 million in FY15, AHFC’s highest since FY09.

• AHFC FY15 dividend calculation increased to $25.9 million, largest in six

years, dividends to the state total $1.96 billion since inception.

• Improved mortgage/bond ratio from 1.02 to 1.11 in FY14 and from 1.11

to 1.24 in FY15 while maintaining a healthy net interest margin of 1.12%.

• 30+ day mortgage delinquencies decreased 20% down to 3.88%, and

annualized foreclosure rates decreased 22% down to 0.45%.

• Historically low interest rates continued to benefit home buyers.
• Maintained solid AA+/Aa2/AA+ credit ratings from all three rating

agencies.

Presentation to Commonwealth North

March 2, 2016 Anchorage, Alaska

Jerry Burnett

Deputy Commissioner, Alaska Department of Revenue

REPORT ON TREASURY ASSETS

34

WHAT ARE OTHERS SAYING ABOUT ALASKA?

• Alaska needs to continue expense management and to generate additional revenue
• Alaska’s focus needs to target a sustainable plan that provides for long-term fiscal stability
• Alaska’s commercialization of ANS natural gas is a top priority
• Alaska’s focus is on safe, responsible development and operations, while continuing to unlock

vast mineral resources

• Alaska set aside large financial reserves – allowing us to quickly and strategically navigate

through today’s extremely volatile oil environment

35

36

STATE OF ALASKA’S RESERVES

• Requires simple majority to appropriate
• $288 million remaining balance at June 30, 2015
• No current balance

Statutory Budget Reserve Constitutional Budget Reserve

• Requires 75% majority to appropriate
• 2/1/2016 Balance: $8.7 billion (balance is net of

$1.4 billion in withdrawals for FY16)

Permanent Fund Earnings Reserve

• Requires simple majority to appropriate
• 1/1/2016 Balance: $6.8 billion

Permanent Fund

• Requires constitutional amendment to withdraw
• 1/1/2016 Balance: $45 billion

37

UPDATE ON THE STATE’S OPERATING AND SAVINGS ACCOUNTS

• General Fund
• Statutory Budget Reserve Fund
• Constitutional Budget Reserve Fund
• Power Cost Equalization Fund
• Public School Trust Fund
• State’s Retirement System – PERS / TRS

All current fiscal year market values and stated returns are unaudited, preliminary, and include some estimates

38

STATE OF ALASKA’S GENERAL FUND

1/31/2014 1/31/2015 1/31/2016 Actuals Benchmark1 FY15 0.45% 0.27% YTD 0.25% 0.17% FYTD 0.30% 0.17% 3 Year Actuals 0.42% 0.28% 5 Year Actuals 0.80% 0.57%

1Short-term / Liquidity: 3-month U.S. Treasury Bill; Intermediate-term: Barclays 1-3 Year Gov't Bond Index

Returns @ 6/30/15

Callan Projected 10 Year Return: 2.30%

Target Asset Allocation Investment Objective

General Fund

(and other non-segregated investments) Moderate Risk, Short to Intermediate investment horizon

Returns

1/31/16 (Rolling) Actuals $5,711,700 $5,452,700 $3,329,300

Market Value ($thousands) Intermediate-Term: 32% Short-Term / Liquidity Fund: 68%

39

STATE OF ALASKA’S CONSTITUTIONAL BUDGET RESERVE FUND

1/31/2014 1/31/2015 1/31/2016 Actuals Benchmark2 FY15 0.84% 0.69% YTD

• 0.06%
• 0.11%

FYTD 0.04%

• 0.08%

3 Year Actuals 0.63% 0.54% 5 Year Actuals 1.42% 1.26%

1Market values after June 30, 2015 include the $3 billion transfer to PERS/TRS 2Broad Market: Barclays U.S. Aggregate; Domestic Equity: Russell 3000 Stock Index; International Equity: MSCI EAFE

Short-term FI: 3-month U.S. Treasury Bill

Returns @ 6/30/15 Returns 1/31/16 (Rolling)

CBRF Target Return: 2.89%

Constitutional Budget Reserve

Investment Objective

Moderate Risk, Short, to Intermediate investment horizon

Target Asset Allocation Market Value1 ($thousands)

Actuals $12,151,400 $10,944,200 $8,689,500

International Equity: 2% Broad Market: 23% Domestic Equity: 5%

Short-term FI: 70%

40

STATE OF ALASKA’S POWER COST EQUALIZATION FUND

1/31/2014 1/31/2015 1/31/2016 Actuals Benchmark1 FY15 3.50% 2.90% YTD

• 3.90%
• 3.99%

FYTD

• 5.25%
• 5.74%

3 Year Actuals 6.92% 6.43% 5 Year Actuals 7.50% 6.95%

1Broad Market: Barclays U.S. Aggregate; Domestic Equity: Russell 3000 Stock Index; International Equity: MSCI EAFE

PCE Target Return: 7.00%

Power Cost Equalization Fund

Investment Objective Target Asset Allocation

High Risk, Moderately Long investment horizon Returns 1/31/16 (Rolling) Actuals

Market Value ($thousands)

Returns @ 6/30/15 $912,200 $950,700 $898,500 International Equity: 24% Broad Market: 29% Domestic Equity: 47%

41

STATE OF ALASKA’S PUBLIC SCHOOL TRUST FUND (PRINCIPAL & INCOME)

1/31/2014 1/31/2015 1/31/2016 Actuals Benchmark1 Actuals Benchmark1 FY15 2.78% 2.69% 0.30% 0.02% YTD

• 2.78%
• 2.79%

0.06% 0.00% FYTD

• 3.60%
• 3.99%

0.21% 0.05% 3 Year Actuals 4.08% 3.88% 0.27% 0.06% 5 Year Actuals 5.66% 5.64% 0.32% 0.07%

1Short-term: 3-month U.S. Treasury Bill; Broad Market: Barclays U.S. Aggregate; Domestic Equity: Russell 3000 Stock Index; International Equity: MSCI EAFE

Actuals Returns @ 6/30/15 Actuals

Market Value ($thousands)

$531,000 $566,000

Public School Trust Fund (Income)

Low Risk, Short investment horizon

Investment Objective Target Asset Allocation Public School Trust Fund (Principal)

Moderate Risk, Long Term investment horizon $544,600 $18,800 $22,300 $25,600 Callan Projected 10 Year Return: Principal 6.07% Returns 1/31/16 (Rolling)

Short-Term Fixed Income: 100%

International Equity: 19% Domestic Equity: 36% Broad Market: 45%

42

STATE OF ALASKA’S RETIREMENT SYSTEM

1/31/2014 1/31/2015 1/31/2016 Actuals Benchmark1 Actuals Benchmark1 FY15 3.29% 2.74% 3.30% 2.74% 1-Year Ended 9/30/15

• 1.48%
• 1.53%
• 1.48%
• 1.53%

FYTD (1Q FY2016)

• 5.60%
• 5.61%
• 5.60%
• 5.61%

3 Year Actuals 7.84% 6.89% 7.86% 6.89% 5 Year Actuals 8.00% 7.48% 8.05% 7.48%

PERS Retirement Defined Benefit Pension / Health TRS Retirement Defined Benefit Pension / Health

Moderate Risk, Long Term investment horizon Moderate Risk, Long Term investment horizon Returns @ 6/30/15

Market Value

($thousands) $14,344,700 $15,642,100 $15,226,500

1 26% Russell 3000, 25% MSCI ACWI ex US, 9.6% Barclays Intmdt Treas, 8.5% NCREIF Total, 5.0% 3-mo T-Bill+5.0%, 3.0% MSCI EAFE, 3.0% S&P 500 Index, 3.0% 3-mo T-Bill, 3.0%

Russell 2000, 2.5% Barclays US TIPS, 1.7% NCREIF Farmland, 1.7% NCREIF Timberland, 1.7% Global Infrastructure, 1.5% S&P 500, 1.2% Hi Yld II, 0.9% CBOE Buy Write, 0.9% NAREIT All Equity, 0.8% Citi WGBI Non-US, 0.6% All Yld Alt US Cvt and 0.4% EMBI Global Dvsfd Index

Investment Objective Target Asset Allocation

Returns 9/30/15 (Rolling) Actuals Actuals $5,952,200 $7,337,400 $7,539,600 Actuarial Assumed ROR: 8.00% 12% 26% 25% 17% 17% 3% 12% Fixed Income 26% Domestic Equity 25% International / Global Equity 17% Real Assets 17% Alternatives / Infrastructure / PE 3% Cash 12% 26% 25% 17% 17% 3% 12% Fixed Income 26% Domestic Equity 25% International / Global Equity 17% Real Assets 17% Alternatives / Infrastructure / PE 3% Cash

43

STATE OF ALASKA – HISTORICAL REVENUES & EXPENDITURES

$ Millions FY '15 FY '14 FY '13 FY '12 FY '11 FY '10 FY '09

Net Assets Managed by Treasury Division

$18,561 $25,919 $26,208 $24,623 $21,019 $17,788 $15,443

ARMB Assets (PERS + TRS)

$24,615 $21,674 $18,398 $16,426 $16,492 $13,398 $12,334

Investment Income (Not including retirement funds)

$325 $1,485 $828 $374 $1,324 $1,021 ($313)

45

STATE OF ALASKA’S RETIREMENT SYSTEM – FUNDING STATUS

The funding status of PERS and TRS improved significantly in FY 2015:

• Preliminary FY 2015

valuations illustrate the State’s improving funding status across all areas of its PERS and TRS programs

• FY 2015 figures

reflect the impact of the State’s $3 billion transfer from the CBRF ($1 B PERS, and $2 B TRS)

• Defined Benefit

OPEB funding is near

• r above 100% for

both PERS and TRS

• Defined Contribution

funding has also improved and is near

• r above 100%

46

OVERVIEW OF ALASKA’S ECONOMY

Source: Alaska Department of Labor and Workforce Development, Research and Analysis, DOR – Tax Division, and U.S. Bureau of Labor Statistics

• December 2015: Alaska’s unemployment rate (seasonally adjusted) was 6.5%,

compared to 5.0 percent for the US. Alaska’s was lower than the US from 2009 until 2014

• The largest employment sector in Alaska is Government (State, Federal, and

Local and Tribal)

• Oil industry cutbacks expected in 2016, but we also anticipate a continuation of

project work and repairs and maintenance on aging infrastructure

47

OVERVIEW OF ALASKA’S ECONOMY

Current Population Data:

Source: Alaska Department of Labor and Workforce Development, Research and Analysis , and US Census Bureau

$ Millions FY ‘15 FY ‘14 FY ‘13 FY ‘12 FY ‘11 FY ‘10 FY ‘09 Net Assets $1,038.8 $963.3 $893.2 $828.3 $768.1 $716.9 Operating Revenue $54.8 $51.7 $54.3 $54.7 $48.6 $47.0 $47.9 Operating Expense $160.8 $166.0 $172.5 $171.0 $158.7 $140.3 $141.6 Net Income $-106.9 $-114.3 $-118.2 -$116.3 -$110.1 -$93.3 -$93.7

$ Millions FY ‘15 FY ‘14 FY ‘13 FY ‘12 FY ‘11 FY ‘10 FY ‘09 Net Assets $1,426.8 $1,406.2 $1,180.9 $1,070.3 $1,075.9 $643.0 $626.7 Operating Revenue $56.0 $92.8 $102.4 $98.7 $47.3 $56.0 $101.6 Operating Expense $136.0 $156.5 $165.9 $160.6 $118.7 $107.7 $133.4 Operating Loss/Gain $-80.0 $-63.7

• $63.5
• $61.9
• $71.4
• $51.6
• $31.8

Investment Income $35.1 $173.1 $113.4 $14.1 $70.9 $42.7

• $43.6

Capital Contributions by the State $28.9 $37.0 $25.9 $29.0 $437.4 $25.2 $105.5

$ Millions FY ’15* FY ’14 FY ’13 FY ‘12 FY ‘11 Net Assets $315.75 $304.71 $278.23 $255.6 $240.8 Operating Revenue (Trains) $113.9 $125.1 $125.5 $128.0 $125.4 Operating Expense (Trains) $113.6 $121.3 $120.5 $124.3 $120.1 Operating Income (Trains) $0.4 $3.8 $5.0 $3.7 $5.3 Non Operating Revenue (Real Estate) $11.9 $11.6 $10.9 $10.1 $8.2 Net Revenue (Corporate) $11.1 $14 .1 $14.3 $12.5 $13.4

*Reflects unaudited results as of 02/25/16

$ Millions FY ‘15 FY ‘14 FY ‘13 FY ‘12 FY ‘11 FY ‘10 FY ‘09 Net Position (Assets) $864 $903 $891 $864 $830 $835 $795 Operating Revenue $134 $124 $108 $107 $107 $105 $95 Operating Expense $148 151 $146 $139 $131 $112 $116 Net Revenue $-15 $-27 $-38

• $33
• $25
• $6
• $21

Capital Contributions $50 $58 $89 $89 $35 $65 $57

$ Millions FY ‘15 FY ‘14 FY ‘13 FY ‘12 FY ‘11 FY ‘10 FY ‘09 Net Capital Assets $1,544.7 $1,447.3 $1,280.3 $1,097.3 $952.9 $863.3 $833.9 Endowment Investments $143.1 $148.5 $136.7 $127.2 $127.4 $116.4 $111.0 Land Endowment and other Assets $62.4 $62.6 $62.9 $46.2 $45.3 $44.5 $44.7 Endowment Investment Return -1.5% 13.1% 10% 0.9% 18% 9.5%

• 23.9%

Fall 2014/FY15 Fall 2013/FY14 Fall 2012/FY13 Fall 2011/FY12 Fall 2010/FY11 Fall 2009/FY10 Fall 2008/FY09 Fall Student Headcount (Non-degree) 31,522 (8,716) 32,696 (8,992) 33,581 (9,564) 34,983 (10,567) 34,480 (11,063) 33,710 (11,894) 32,328 (12,403) Degrees Awarded 4,678 4,908 4,491 4,174 3,983 3,754 3,427 High School/College Concurrent Enrollment Headcount 3,118 3,252 3,754 3,889 3,501 3,792 3,651 Tuition and Fees - UA to Western States Average (4-Year) 81% 78% 78% 77% 83% 87% 93% Average Annual Salary Increase for Exiters, Post- Training Available

• Dec. 2016

27% 33% 29% 31% 26% 25% Grant-Funded Research Expenditures ($ Millions) $111.8 $120.4 $129.8 $132.7 $138.0 $131.0 $120.2 Full-Time Regular Employees Headcount (Total Employees) 4,528 (8,430) 4,614 (8,614) 4,569 (8,665) 4,553 (8,523) 4,601 (8,444) 4,577 (8,302) 4,489 (8,168)

State To From Date Alaska AA+ / Negative AAA / Negative Jan. 5, 2016 Illinois A- / Negative A- / Watch Neg Dec. 23, 2015 Massachusetts AA+ / Negative AA+ / Stable

• Nov. 23, 2015

Recent Rating Actions

Standard & Poor's State Ratings as of January 5, 2016

State Rating Outlook State Rating Outlook Alabama AA Stable Montana AA Stable Alaska AA+ Negative Nebraska (ICR) AAA Stable Arizona (ICR) AA Stable Nevada AA Stable Arkansas AA Stable New Hamshire AA Stable California AA- Stable New Jersey A Stable Colorado (ICR) AA Stable New Mexico AA+ Negative Connecticut AA Negitive New York AA+ Stable Delaware AAA Stable North Carolina AAA Stable Florida AAA Stable North Dakota (ICR) AAA Stable Georgia AAA Stable Ohio AA+ Stable Hawaii AA Stable Oklahoma AA+ Stable Idaho (ICR) AA+ Stable Oregon AA+ Stable Illinois A- Negitive Pennsylvania AA- Stable Indiana (ICR) AAA Stable Rhode Island AA Stable Iowa (ICR) AAA Stable South Carolina AA+ Stable Kansas (ICR) AA Negitive South Dakota (ICR) AAA Stable Kentucky (ICR) A+ Stable Tennessee AA+ Positive Louisiana AA Negative Texas (ICR) AAA Stable Maine AA Stable Utah AAA Stable Maryland AAA Stable Vermont AA+ Stable Massachusetts AA+ Negitive Virginia AAA Stable Michigan AA- Positive Washington AA+ Stable Minnesota AA+ Positive West Virginia AA Stable Mississippi AA Stable Wisconsin AA Stable Missouri AAA Stable

State Ratings Distribution as of January 5, 2016

AAA, 30% AA+, 26% AA, 32%

AA-, 6% A+, 2% A, 2% A-, 2%

Percent

AAA AA+ AA AA- A+ A A-