FISCAL YEAR ANNUAL FINANCIAL REPORT UNIVERSITY SYSTEM OF GEORGIA TABLE OF CONTENTS For the Fiscal Year Ended June 30, 2018 Introductory Section ...................................................................................................................................... University System of Georgia Highlights ........................................................................................... 2 Letter of Transmittal ........................................................................................................................... 13 Financial Section ............................................................................................................................................ Independent Auditor's Report ............................................................................................................ 17 Management's Discussion and Analysis ............................................................................................ 21 Financial Statements (GAAP Basis) .................................................................................................. Statement of Net Position ........................................................................................................... 35 Statement of Revenues, Expenses and Changes in Net Position .............................................. 38 Statement of Cash Flows ............................................................................................................ 40 Fiduciary Funds .......................................................................................................................... Statement of Fiduciary Net Position ....................................................................................... 42 Statement of Changes in Fiduciary Net Position .................................................................... 43 Component Units ........................................................................................................................ Combining Statement of Net Position ..................................................................................... 44 Combining Statement of Revenues, Expenses, and Changes in Net Position ....................... 54 Notes to the Financial Statements .............................................................................................. 65 Note 1 - Summary of Significant Accounting Policies ............................................................. 66 Note 2 - Deposits and Investments ......................................................................................... 74 Note 3 - Accounts Receivable ................................................................................................. 82 Note 4 - Inventories ................................................................................................................ 82 Note 5 - Notes and Loans Receivable .................................................................................... 82 Note 6 - Capital Assets ........................................................................................................... 83 Note 7 - Advances .................................................................................................................. 84 Note 8 - Long-Term Liabilities ................................................................................................. 84 Note 9 - Deferred Outflows and Inflows of Resources ............................................................ 85 Note 10 - Net Position ............................................................................................................ 88 Note 11 - Endowments ........................................................................................................... 88 Note 12 - Significant Commitments ........................................................................................ 89 Note 13 - Leases .................................................................................................................... 89 Note 14 - Retirement Plans .................................................................................................... 90 Note 15 - Risk Management ................................................................................................... 99 Note 16 - Contingencies ......................................................................................................... 100 Note 17 - Post-Employment Benefits Other Than Pension Benefits ....................................... 100 Note 18 - Operating Expenses with Functional Classifications ............................................... 111 Note 19 - Subsequent Event ................................................................................................... 111 Note 20 - Component Units .................................................................................................... 112 UNIVERSITY SYSTEM OF GEORGIA TABLE OF CONTENTS For the Fiscal Year Ended June 30, 2018 Required Supplementary Information .......................................................................................................... Benefit Pension Plans ....................................................................................................................... Schedule of Contributions for Defined Benefit Pension Plan ........................................................ 125 Schedule of Proportionate Share of Net Pension Liability ............................................................. 126 Schedule of Employers' and Nonemployers' Net Pension Liability ............................................... 127 Schedule of Changes in Net Pension Liability ............................................................................... 128 Schedule of Investment Returns ................................................................................................... 129 Notes to the Required Supplementary Information for Pension Plans .......................................... 130 Other Postemployment Benefits Plans .............................................................................................. Schedule of Contributions for Other Postemployment Benefits .................................................... 131 Schedule of Proportionate Share of Net Other Postemployment Benefit Asset ............................ 132 Schedule of Changes in Net Other Postemployment Benefit Liability ........................................... 133 Schedule of Net Other Postemployment Benefit Liability .............................................................. 134 Schedule of Investment Returns for Other Postemployment Benefits .......................................... 135 Notes to the Required Supplementary Information for Other Postemployment Benefit Plans....... 136 Supplementary Information ........................................................................................................................... Financial Statements (GAAP Basis) .................................................................................................. Statement of Net Position by Institution ........................................................................................ 138 Statement of Revenue, Expenses and Changes in Net Position by Institution ............................. 162 Statement of Net Position by Affiliated Organization ..................................................................... 178 Statement of Revenue, Expenses and Changes in Net Position by Affiliated Organization .......... 203 Notes to the Statement of Net Position and Statement of Revenues, Expenses and Changes .... in Net Position by Affiliated Organization .................................................................................. 215 Statutory Basis Financial Statement (Non-GAAP Basis) ................................................................... Balance Sheet (Non-GAAP Basis) ................................................................................................ 217 Statement of Funds Available and Expenditures Compared to Budget (Non-GAAP Basis) .......... 218 Statement of Changes to Fund Balance by Program and Funding Source (Non-GAAP Basis) .... 224 Acknowledgments .......................................................................................................................................... 230 Introductory Section More than 328,000 students enroll in the 26 public higher education institutions of the University System of Georgia (USG), helping contribute to communities across the state. USG's economic impact is estimated at $16.8 billion annually, and its institutions have generated more than 163,000 jobs across Georgia, an increase of more than 3,000 jobs over last year. At the same time, our faculty compete nationally for sponsored research dollars that total more than $1 billion annually. And the system continues to improve student access and increase students' college attainment, fulfilling its core mission: Knowledge. 2 THE UNIVERSITY SYSTEM OF GEORGIA. 2018 ANNUAL FINANCIAL REPORT. 328,000 STUDENTS $16.8 BILLION Estimated USG Annual Economic Impact 163K JOBS Generated Across Georgia $1 BILLION Research Dollars Competed For KNOWLEDGE 3 4 THE UNIVERSITY SYSTEM OF GEORGIA. 2018 ANNUAL FINANCIAL REPORT. Nearly 220,000 students to date have taken advantage of the Affordable Learning Georgia program, saving an estimated $19 million annually in textbook costs. College Completion Since Gov. Nathan Deal launched the Complete College Georgia initiative in 2011, the number of USG students annually earning degrees has increased 21 percent. From 54,800 students in 2011 to more than 66,400 in 2018, the numbers have gone up for seven consecutive years. To continue that work, we have designated the first year of college a "Momentum Year." All 26 institutions have begun a programmatic emphasis on first-year students to help them start on the right track toward successful degree completion and reduce their time - and costs - toward graduation. College students are more likely to graduate when they immediately pursue an area of academic interest, get help to stay on track and follow a clearly sequenced course of study. For our first-year students, this means passing English and math, taking nine hours in a field of interest and passing 30 course-hours total. The effort also builds on expanding use of academic programs such as "degree roadmaps," a 15-to-finish campaign for fuller course loads, early-alert systems and intrusive advising for when students stray from their chosen path and need help to get back on track. We are proud of our academic reputation: Georgia continues to be one of only three states with at least two institutions ranked among U.S. News & World Report's Top 15 public institutions in the nation. While the Georgia Institute of Technology remains in the top 10 at No. 8, the University of Georgia this year jumped three spots to No. 13 - the highest ranking in UGA's history. Affordability The Board of Regents has continued to keep tuition increases to a minimum and has focused on reducing students' textbook costs systemwide. A zero percent tuition increase was instituted for the 2018-2019 academic year, the second time in three years that has happened. Tuition increases over the last five years have been limited to an average of 1.8 percent annually. The system has also tried to maximize the potential of online resources, including the increased use of free, open-sourced electronic textbooks. Nearly 220,000 students to date have taken advantage of the Affordable Learning Georgia program, saving an estimated $19 million annually in text book costs. 5 $30 million in annual administrative savings has been reinvested toward students' academic programs and student support. Efficiency Campus consolidations kept the system on-track toward improving services and opportunities especially in both South Georgia and Southeast Georgia. In turn, this has helped better serve the needs of surrounding communities by strategically aligning degree offerings with regional needs. USG consolidations since 2011 have included 18 institutions, resulting in nine newly consolidated universities and colleges throughout Georgia. The resulting $30 million in annual administrative savings has been reinvested toward students' academic programs and support services, including the hiring of new academic advisors, student counselors, faculty members and academic support staff. Institutions have also used these funds to launch student services and support initiatives seeking to enhance financial aid, library and research systems as well as streamline students' campus enrollment and registration experiences. 6 THE UNIVERSITY SYSTEM OF GEORGIA. 2018 ANNUAL FINANCIAL REPORT. Comprehensive Administrative Review The first of its kind for USG, the ongoing Comprehensive Administrative Review launched in 2017 and is being finalized for both the University System Office as well as all 26 institutions. It brings to the fore a systemwide focus on improving administration by creating new efficiencies, streamlining processes and reorganizing staff to best serve the needs of all students. 7 Economic Innovation The USG mission is to create knowledge. Knowledge drives innovation, which in turn drives the Georgia economy. The system has launched the new Georgia FinTech Academy, a statewide initiative to create a talent pipeline for Georgia's fast-growing financial technology business sector. The USG also partnered with the Georgia Chamber of Commerce, the Technical College System of Georgia and others on a new statewide competition for college students that aims to foster innovation, entrepreneurship and start-up creation. The Georgia InVenture Prize, based on a competition begun at Georgia Tech, will highlight and support Georgia's growing ecosystem of student entrepreneurs and innovators from across the entire state. The USG mission is to create knowledge. 8 THE UNIVERSITY SYSTEM OF GEORGIA. 2018 ANNUAL FINANCIAL REPORT. Cyber Expansion USG is proud to be a founding partner of the state's new Georgia Cyber Innovation and Training Center, which opened in Augusta 2018. The center represents the single largest investment in a state cybersecurity facility in the nation to date and will help to fill the critical shortage of cybersecurity talent in Georgia and across the nation. It will be a key partner for our eight USG institutions designated by federal officials as National Centers of Academic Excellence in Cyber Defense. The center will also allow students and researchers from throughout the system to closely collaborate with our partners from the military, industry and government. The center also provides a unique opportunity to Augusta University's School of Computer and Cyber Sciences, giving students access to state-of-theart technology for their education and research in disciplines that include computer science, cyber engineering and information technology. 9 College 2025 In August, USG released the final report from its College 2025 Initiative to help institutions embrace a 21st-century model for public higher education. A 22-member committee of experts and leaders in higher education, industry and small business identified more than two dozen recommendations. Initial action steps based on those recommendations have already begun to be implemented this academic year, including faculty development opportunities and increased student support. Nexus Degree USG also launched the new "nexus" academic degree, based on the group's recommendation to develop different college credentials for new or returning students who need specialized skill sets. Nexus degrees emphasize hands-on experiential learning, skilled knowledge and connections with industry in high-demand career fields. Albany State and Columbus State universities have since become the first institutions approved to offer these new programs with more on the way. Columbus State's new nexus degree will be in film production. Albany State will offer two new nexus degrees, one in blockchain with machine learning and the other in blockchain with data analytics. Nexus degrees emphasize hands-on experiential learning, skilled knowledge and connections with industry in high-demand career fields. 10 THE UNIVERSITY SYSTEM OF GEORGIA. 2018 ANNUAL FINANCIAL REPORT. MEMBERS OF THE BOARD OF REGENTS IN 2018 C. Dean Alford, P. E. Allied Energy Services Chris Cummiskey Georgia Power W. Allen Gudenrath Morgan Stanley Erin Hames ReformEd Brbara Rivera Holmes Albany Area Chamber of Commerce C. Thomas Hopkins Jr., M.D. OrthoGeorgia James M. Hull (Chair) Hull Property Group Donald M. Leebern Jr. Georgia Crown Distributing Company Inc. Laura Marsh Taulbee, Rushing, Snipes, Marsh & Hodgin LLC Neil L. Pruitt Jr. PruittHealth Inc. Sarah-Elizabeth Reed Former First Lady of Atlanta Sachin Shailendra SG Contracting Inc. E. Scott Smith NW Services Corp. Kessel D. Stelling Jr. Synovus Ben J. Tarbutton III Sandersville Railroad Company Richard L. Tucker Arlington Capital LLC Thomas Rogers Wade Retired, Georgia Public Policy Foundation Don L. Waters (Vice Chair) Waters Capital Partners LLC Philip A. Wilheit Sr. Wilheit Packaging and Marketing Images UNIVERSITY SYSTEM OF GEORGIA Dr. Steve Wrigley Chancellor University System of Georgia Tracey Cook Treasurer University System of Georgia Edward Tate Secretary to the Board University System of Georgia 11 12 University System of Georgia OFFICE OF STRATEGY & FISCAL AFFAIRS 270 WASHINGTON STREET, S.W. ATLANTA, GEORGIA 30334 PHONE (404) FAX (404) 962-3215 January 18, 2018 Chancellor Steve Wrigley Board of Regents University System of Georgia Dear Chancellor Wrigley: We are pleased to present to you the Annual Financial Report of the University System of Georgia for the year ended June 30, 2018. The report provides financial information about the University System of Georgia's operations during the year and describes its financial position at the end of the fiscal year. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal controls established for this purpose, the objective of which is to provide reasonable assurance that the financial statements are free of material misstatements. Further, the officers of the various institutions of the University System of Georgia and its affiliated organizations have assured us that every effort has been made to reflect accurately the information considered important to all concerned parties. State law, Federal guidelines, bond covenants and the by-laws of the Board of Regents require that the accounting and financial records of the University System of Georgia be audited each year. The Georgia Department of Audits and Accounts has performed the audit for fiscal year 2018 and has issued an unmodified opinion, the most favorable outcome of the audit process. The State Auditor's report is located at the beginning of the financial section. Management's discussion and analysis (MD&A) immediately follows the auditor's report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction therewith. Respectfully submitted, Tracey Cook Interim Executive Vice Chancellor for Strategy and Fiscal Affairs/Treasurer Board of Regents of the University System of Georgia "Creating A More Educated Georgia" www.usg.edu 2018 Annual Financial Report 13 14 University System of Georgia Financial Section 16 University System of Georgia GREG S. GRIFFIN STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 Independent Auditor's Report The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the Board of Regents of the University System of Georgia and Dr. Steve Wrigley, Chancellor University System of Georgia Report on the Financial Statements We have audited the accompanying financial statements of the business-type activities, the aggregate discretely presented component units, and the aggregate remaining fund information of the University System of Georgia (USG), which is an organizational unit of the State of Georgia, as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the University System of Georgia's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the aggregate discretely presented component units. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for the aggregate discretely presented component units, is based solely on the reports of the other auditors. We conducted our audit 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 from material misstatement. Except for the Augusta University Foundation, Inc., Augusta University Research Institute Inc., AU Health Systems, Inc., Georgia State University Research Foundation, Inc., Georgia Tech Research Corporation, and the University of Georgia Research Foundation, Inc., the financial statements of the discretely presented component units of the USG that were audited by other auditors upon whose reports we are relying were audited in accordance with auditing standards generally accepted in the United States of America, but not in accordance with Government Auditing Standards. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the USG's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the USG's internal 2018 Annual Financial Report 17 control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the of the business-type activities, the aggregate discretely presented component units, and the aggregate remaining fund information of the USG as of June 30, 2018, and the respective changes in financial position and where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1, the financial statements of the USG are intended to present the financial position, the changes in financial position, and where applicable, cash flows of only those portions of the businesstype activities, aggregate discretely presented component units, and the aggregate remaining fund information of the State of Georgia that are attributable to the transactions of the USG. They do not purport to, and do not, present fairly the financial position of the State of Georgia as of June 30, 2018, the changes in its financial position, or, where applicable, its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter. As described in Note 1 to the financial statements, in 2018, the Institute adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, GASB Statement No. 81, Irrevocable Split-Interest Agreements, GASB Statement 85, Omnibus 2017, and GASB Statement No. 86, Certain Debt Extinguishment Issues. Our opinions are not modified with respect to these matters. As discussed in Note 1 to the financial statements, in 2018, the USG restated the prior period financial statements for changes in the financial reporting entity, adoption of GASB 75, and corrections from the prior year. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, Schedule of Contributions for Defined Benefit Pension Plans, Schedule of Proportionate Share of the Net Pension Liability, Schedule of Employers' and Nonemployers' Net Pension Liability, Schedule of Changes in Net Pension Liability, Schedule of Investment Returns, Notes to the Required Supplementary Information for Pension Plans, Schedule of Contributions for OPEB, Schedule of Proportionate Share of the Net OPEB Asset, Schedule of Changes of the Net OPEB Liability, Schedule of Net OPEB Liability, Schedule of Investment Returns for OPEB, and Notes to the Required Supplementary Information for OPEB Plan as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 18 University System of Georgia Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the USG's basic financial statements. The introductory section, and accompanying supplementary information as listed in the table of contents are presented for the purposes of additional analysis and are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 18, 2019 on our consideration of the USG'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 solely 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 effectiveness of the USG's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the USG's internal control over financial reporting and compliance. A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24. Respectfully submitted, January 18, 2019 Greg S. Griffin State Auditor 2018 Annual Financial Report 19 20 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA Management's Discussion and Analysis Introduction The University System of Georgia (USG)'s priority is to ensure more Georgians enter the workforce with a college credential, while also seeking to make college more affordable and accessible and the System itself more cost-efficient on behalf of the State's students and communities. USG institutions enrolled more than 325,000 students and awarded 66,441 degrees for fiscal year 2018, a 2.3 percent increase over the previous year and a 21 percent increase since 2011. System leaders continue to invest in academic initiatives to increase attainment. For the academic year 2018-19, all 26 USG institutions launched a "Momentum Year" program focused on first-year students to help them start their college careers on-track and focused toward completion. At the same time, USG institutions for the second time in three years did not raise tuition rates and continued to closely monitor student fees. Georgia's average annual tuition and fee increases over the last five years are the second-lowest of the 16 states that make up the Southern Regional Education Board. The system also embarked on an ongoing Comprehensive Administrative Review at all 26 institutions as well as the University System Office. This is a thorough assessment of how the system is organized, if processes are modernized and if staffing levels make sense. Ultimately, it will help provide greater focus on the system's most important resource: Its students. This discussion and analysis provides a summary of the financial position of the USG for the fiscal year ending June 30, 2018. It will provide the user with an overview of how the USG utilized its resources in pursuit of its primary goals of teaching, research and public service. The Board of Regents and Chancellor Steve Wrigley are charged with the leadership of the 26 institutions of the USG. The USG continues to prosper, as is demonstrated by the following information: State Resources The General Appropriations Act of 2018 (House Bill 44), as amended by House Bill 683, appropriated a total of $2.32 billion to the USG. The following table presents the state appropriations available to the USG from the General Appropriations Act of 2018, as amended: STATE APPROPRIATIONS AVAILABLE - GENERAL APPROPRIATIONS ACT OF 2018 House Bill 44 General State Funds $ 2,305,085,976 House Bill 683 General State Funds 12,084,906 Total State Appropriations Per Appropriations Act - University System of Georgia $ 2,317,170,882 The following table presents the fiscal year 2018 allocations by the Board of Regents to the USG institutions: ALLOCATIONS BY THE BOARD OF REGENTS Education and General Teaching $ Non-Teaching Other Activities University System Office $ 12,270,277 Rental Payments - GA Military College 6,176,766 GA Public Telecommunications Commission 15,251,668 GA Public Libraries 37,205,936 Total Other Activities Special Initiative Funding Net State Appropriations Available to the University System of Georgia 2,049,128,886 162,065,334 70,904,647 35,072,015 $ 2,317,170,882 2018 Annual Financial Report 21 The following chart illustrates the Board of Regents allocations to Teaching, Non-Teaching, Other Activities and Special Funding Initiatives: Overview of the Financial Statements and Financial Analysis The USG is proud to present its consolidated financial statements for fiscal year 2018. These statements contain information from the 26 institutions of the USG, and the University System Office. These financial statements include: three consolidated financial statements (1) Statement of Net Position, (2) Statement of Revenues, Expenses and Changes in Net Position, and (3) Statement of Cash Flows; Fiduciary Fund statements for the Board of Regents Retiree Health Benefit Fund, the Early Retirement Plan - Augusta University and the USG Deferred Compensation Plan; and combining component unit financial statements for 25 discretely presented component units. These 25 organizations are legally separate tax-exempt component units of the State of Georgia. The emphasis of discussions about these statements will be on current year data of the USG. The Notes to the Financial Statements follow the combining component unit financial statements, and contain essential information that serves both to support and clarify the information presented in the financial statements preceding them. The Required Supplementary Information section contains additional information related to the Board of Regents Retiree Health Benefit Fund, the Early Retirement Plan - Augusta University, retirement plans for which the USG and its institutions participates and other post employment benefits as required by generally accepted accounting principles. Finally, the Supplementary Information section includes selected information by USG institution, affiliated organizations and USG consolidated financial statements presented on a statutory/budget basis. This discussion and analysis of the USG's consolidated financial statements provides an overview of its financial activities for the fiscal year. Further information is provided by comparative data for fiscal year 2018 and 2017. 22 University System of Georgia Statement of Net Position The Statement of Net Position presents the assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position of the USG as of the end of the fiscal year. The Statement of Net Position is a point of time financial statement. The purpose of the statement is to present to the reader a fiscal snapshot of the USG. The Statement of Net Position presents data concerning assets (property that we own and what we are owed by others), deferred outflows of resources (consumption of net position by the USG that is applicable to future reporting periods), liabilities (what we owe to others and have collected from others before we have provided the service), deferred inflows of resources (acquisition of net position by the USG that is applicable to future reporting periods), and net position. It is prepared under the accrual basis of accounting, which requires revenue and asset recognition when the service is provided, and expense and liability recognition when goods or services are received despite when cash is actually exchanged. From the data presented, readers of the Statement of Net Position are able to determine the assets available to continue operations of the USG. They are also able to determine how much the USG owes vendors and investors. The difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources (net position) is one indicator of the USG's financial health when considered in conjunction with other nonfinancial conditions, such as facilities and environment. Net position is divided into three major categories. The first category, net investment in capital assets, provides the USG's equity in property, plant and equipment owned. The next category is restricted, which is divided into two categories, non-expendable and expendable. Restricted, non-expendable net position consists solely of the USG's permanent endowment funds. The corpus of non-expendable, restricted resources is available only for investment purposes. Restricted, expendable resources are available for expenditure, however, expenditure of these resources is limited to time or purpose restrictions placed on the assets by the donor and/or external third parties. The final category is unrestricted resources, which are available to the USG for any lawful purpose. The USG's financial position at June 30, 2018 is very strong, with total assets of $12.67 billion, deferred outflows of $874 million, total liabilities of $10.90 billion, deferred inflows of $1.04 billion and net position of $1.61 billion. Assets and Deferred Outflows Total assets and deferred outflows of the USG in fiscal year 2018 were approximately $39 million more than those reported for fiscal year 2017. Most asset categories had marginal increases or decreases during the year. Cash and investments increased $99 million due to strategic budgetary efforts. Capital assets decreased $85 million. The major reduction in capital assets was related to the removal of duplicate capital assets that were reported by the University of Georgia Athletic Association, Inc, a component unit of the State of Georgia. These capital asset reductions were partially offset by major building additions. See Note 6 with in the Notes to the Financial Statements for more information. Liabilities and Deferred Inflows Total liabilities and deferred inflows for fiscal year 2018 were approximately $1.52 billion more than those reported for fiscal year 2017. The majority of the change related primarily to an increase in net OPEB liability of $1.6 billion resulting from the adoption of Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Post Employment Benefits Other Than Pensions, a decrease in net pension liability of $282 million and an increase in a net deferred gain on defined benefit pension plan of $13 million. Net Position The combination of the increase in total assets and deferred outflows of $39 million and the increase in total liabilities and deferred inflows of $1.52 billion yielded a net decrease in total net position of $1.49 billion or 48.05%. The decrease in net position was directly related to the adoption of GASB Statement No. 75. See Note 1 in the Notes to the Financial Statements for more information. The following table summarizes the USG's assets, deferred outflows, liabilities, deferred inflows and net position as of June 30, 2018 and June 30, 2017. 2018 Annual Financial Report 23 CONDENSED STATEMENT OF NET POSITION ASSETS Current Assets Capital Assets, Net Other Assets TOTAL ASSETS June 30, 2018 June 30, 2017 (1) % Change $ 2,292,837,480 $ 2,172,184,004 9,878,403,906 9,962,908,062 498,530,235 480,893,886 12,669,771,621 12,615,985,952 5.55% -0.85% 3.67% 0.43% DEFERRED OUTFLOWS 873,854,980 889,122,408 -1.72% LIABILITIES Current Liabilities Non-Current Liabilities TOTAL LIABILITIES 914,781,438 9,983,382,572 10,898,164,010 882,875,681 8,800,064,037 9,682,939,718 3.61% 13.45% 12.55% DEFERRED INFLOWS 1,038,949,132 729,574,530 42.40% NET POSITION Net Investment in Capital Assets Restricted, Non-Expendable Restricted, Expendable Unrestricted (Deficit) TOTAL NET POSITION 6,666,852,110 6,627,744,225 204,781,419 193,258,875 218,195,579 249,285,321 -5,483,315,649 -3,977,694,309 $ 1,606,513,459 $ 3,092,594,112 0.59% 5.96% -12.47% -37.85% -48.05% (1) The amounts reported for fiscal year 2017 were not adjusted for the restatement of beginning net position. See Note 1 in the Notes to the Financial Statements for more information regarding the restatement. Statement of Revenues, Expenses and Changes in Net Position The Statement of Revenues, Expenses and Changes in Net Position presents the revenues received and expenses incurred during the year. Activities are reported as either operating or non-operating. Changes in total net position as presented on the Statement of Net Position are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Position. The purpose of the statement is to present the revenues received by the USG, both operating and non-operating, and the expenses paid by the USG, operating and non-operating, and any other revenues, expenses, gains or losses received or spent by the USG. Generally, operating revenues are received for providing goods and services to the various customers and constituencies of the USG. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the USG. Non-operating revenues are revenues received for which goods and services are not provided. For example, state appropriations are non-operating because they are provided by the legislature to the USG without the legislature directly receiving commensurate goods or services for those revenues. State capital grants and gifts and other capital grants and gifts are considered neither operating nor non-operating revenues and are reported after "Income (loss) before other revenues, expenses, gains or losses". 24 University System of Georgia Some highlights of the information presented on the Statement of Revenues, Expenses and Changes in Net Position are as follows: CONDENSED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION Operating Revenue Operating Expense Operating Income/Loss Non-Operating Revenue and Expense Income (Loss) before Other Revenues, Expenses, Gains, Losses and Special Items Other Revenues, Expenses, Gains, Losses Special Items Change in Net Position Net Position at beginning of year, restated Net Position at End of Year June 30, 2018 June 30, 2017 (1) % Change $ 5,210,409,894 $ 5,100,949,696 2.15% 8,237,924,034 8,012,168,406 2.82% -3,027,514,140 -2,911,218,710 3.99% 2,992,032,012 2,715,233,106 10.19% -35,482,128 -195,985,604 -81.90% 287,656,654 251,575,758 14.34% (30,284,826) 2,219,860 -1,464.27% 221,889,700 57,810,014 283.83% 1,384,623,759 3,034,784,098 -54.37% $ 1,606,513,459 $ 3,092,594,112 -48.05% (1) The amounts reported for fiscal year 2017 were not adjusted for the restatement of beginning net position. See Note 1 in the Notes to the Financial Statements for more information regarding the restatement. The Statement of Revenues, Expenses and Changes in Net Position reflects a positive year as represented by an increase in Change in Net Position for fiscal year 2018. However, the ending net position decreased significantly from the prior year due to restatements, which includes the implementation of GASB Statement No. 75 and the removal of duplicate capital assets reported by the University of Georgia Athletic Association, Inc. See Note 1 in the Notes to the Financial Statements for more information. Special items changed significantly mostly due to a change in capital asset policy at Georgia Institute of Technology, an organizational unit of the USG, and a transfer capital assets to Central Georgia Technical College, an organizational unit of the Technical College System Georgia. Some highlights of the information presented on this statement are as follows: Revenues In fiscal year 2018, state appropriations increased $165 million (7.65%), grants and contracts revenue increased $141 million in fiscal year 2018, net tuition and fee revenues increased $34 million (1.65%). Revenue by source (state appropriations, grants and contracts, tuition and fees, auxiliaries, gifts and other sources) is depicted by the following chart: 2018 Annual Financial Report 25 For the years ended June 30, 2018 and June 30, 2017, revenues by source were as follows: REVENUES BY SOURCE Tuition and Fees Federal Appropriations Grants and Contracts Sales and Services Auxiliary Enterprises Other Operating Revenues Total Operating Revenues State Appropriations Grants and Contracts Gifts Investment Income Total Nonoperating Revenues State Capital Gifts and Grants Other Capital Gifts and Grants Total Capital Gifts and Grants Additions to Permanent and Term Endowments Other Nonoperating Revenue Total Revenues June 30, 2018 June 30, 2017 (1) % Change $ 2,090,092,615 $ 2,056,150,625 1.65% 20,546,064 22,307,653 -7.90% 1,809,183,944 1,727,419,012 4.73% 206,733,164 211,924,571 -2.45% 909,392,256 901,424,177 0.88% 174,461,851 181,723,658 -4.00% 5,210,409,894 5,100,949,696 2.15% 2,314,491,667 2,149,978,108 7.65% 690,539,065 631,236,442 9.39% 85,985,306 58,987,556 45.77% 45,118,028 44,016,277 2.50% 3,136,134,066 2,884,218,383 8.73% 265,811,845 210,403,556 26.33% 21,501,194 40,339,044 -46.70% 287,313,039 250,742,600 14.58% 343,615 833,158 593,629 -- $ 8,634,794,243 $ 8,236,743,837 4.83% (1) The amounts reported for fiscal year 2017 were not adjusted for the restatement of beginning net position. See Note 1 in the Notes to the Financial Statements for more information regarding the restatement. Expenses For the years ended June 30, 2018 and June 30, 2017, expenses by functional classification were as follows: EXPENSES BY FUNCTIONAL CLASSIFICATION Instruction Research Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises Patient Care Total Operating Expenses Interest Expense Other Nonoperating Expense Total Expenses June 30, 2018 June 30, 2017 (1) $ 2,003,013,098 $ 1,996,478,175 1,399,514,297 1,371,184,188 433,276,260 419,784,258 627,423,736 608,363,683 358,362,807 354,756,483 1,232,474,231 1,173,262,400 701,503,860 651,415,644 275,405,110 254,895,457 831,510,746 829,020,400 375,439,889 353,007,718 8,237,924,034 8,012,168,406 144,695,683 161,973,120 -- 7,012,157 $ 8,382,619,717 $ 8,181,153,683 % Change 0.33% 2.07% 3.21% 3.13% 1.02% 5.05% 7.69% 8.05% 0.30% 6.35% 2.82% -10.67% 2.46% (1) The amounts reported for fiscal year 2017 were not adjusted for the restatement of beginning net position. See Note 1 in the Notes to the Financial Statements for more information regarding the restatement. 26 University System of Georgia Total operating expenses were $8.2 billion in fiscal year 2018, an increase of $226 million (2.82%) when compared with fiscal year 2017. These increases are primarily attributable to the following functional classifications: Research ($28 million), Public Service ($13 million), Academic Support ($19 million), Institutional Support ($59 million), Plant Operations ($50 million), Scholarships and Fellowships ($21 million), and Patient Care ($22 million). As noted above, operating expenses increased $226 million (2.82%) in fiscal year 2018 when compared with fiscal year 2017. The increases were substantially attributable to salaries and benefits, including other personal services. The increases in salaries and benefits are attributable to increases in OPEB expenses, faculty and staff increases and merit increases. The following chart depicts the fiscal year 2018 operating expenses by functional classification. 2018 Annual Financial Report 27 The following chart depicts the fiscal year 2018 operating expenses by natural classification. Statement of Cash Flows The Statement of Cash Flows presents detailed information about the cash activity of the USG during the year and is divided into five sections. The first section is concerned with operating cash flows and reflects the net cash used by the various operating activities of the USG. The second section is related to cash flows from non-capital financing activities, which reflects the cash received and spent for non-capital financing purposes. The third section summarizes cash flows from capital and related financing activities and contains cash used for the acquisition and construction of capital and related items. The fourth section is comprised of the cash flows from investing activities and includes the purchases, proceeds and interest received from investing activities. The fifth, and final, section reconciles the net cash used to the operating income or loss as reflected on the Statement of Revenues, Expenses and Changes in Net Position. 28 University System of Georgia Cash Flows for the Years Ended June 30, 2018 and 2017, Condensed CONDENSED STATEMENT OF NET CASH FLOWS Cash and Cash Equivalents Provided (Used) by: Operating Activities Non-Capital Financing Activities Capital and Related Financing Activities Investing Activities NET CHANGE IN CASH and CASH EQUIVALENTS Cash and Cash Equivalents, beginning of year CASH and CASH EQUIVALENTS, end of year June 30, 2018 June 30, 2017 $ -2,388,454,869 $ -2,101,268,541 3,054,817,788 2,839,760,642 -641,619,722 -595,935,831 23,480,441 18,969,608 $ 48,223,638 $ 161,525,878 1,521,937,801 1,360,411,923 $ 1,570,161,439 $ 1,521,937,801 Capital Assets Capital assets, net of accumulated depreciation, at June 30, 2018 and June 30, 2017 were as follows: CAPITAL ASSETS, net of accumulated depreciation June 30, 2018 June 30, 2017(1) Increase (Decrease) % Change Land $ 409,861,751 $ 405,224,031 $ 4,637,720 1.14% Capitalized Collections 51,924,925 51,448,435 476,490 0.93% Construction Work-in-Progress 231,606,547 222,618,967 8,987,580 4.04% Software Development-in-Progress 12,266,427 9,521,221 2,745,206 28.83% Infrastructure 216,612,720 231,652,649 (15,039,929) -6.49% Building and Building Improvements 8,094,599,134 8,093,169,192 1,429,942 0.02% Facilities and Other Improvements 160,311,999 276,854,639 (116,542,640) -42.10% Equipment 458,287,532 450,656,786 7,630,746 1.69% Library Collections 175,573,379 174,917,795 655,584 0.37% Capitalized Collections 5,062,603 5,270,189 (207,586) -3.94% Software 62,296,889 41,574,158 20,722,731 49.85% Capital Assets, net of accumulated depreciation $ 9,878,403,906 $ 9,962,908,062 $ (84,504,156 ) -0.85% (1) The amounts reported for fiscal year 2017 were not adjusted for the restatement of beginning net position. See Note 1 in the Notes to the Financial Statements for more information regarding the restatement. As shown above, capital assets, net of accumulated depreciation decreased $85 million during fiscal year 2018 when compared with fiscal year 2017. This decrease was largely the result of the removal of duplicated capital assets reported by the University of Georgia Athletic Associations, Inc., a component unit of the State of Georgia totaling $254 million. The total decrease in capital assets was partially offset by major building additions totaling $437 million. Major building additions included a Student Services Center at Atlanta Metropolitan State College, a Fine Arts Center at Albany State University, a Center for Modular Medicine and a Research and Education Facility at the University of Georgia, a Convocation Center at the University of North Georgia, an Education Center at Kennesaw State University, and a Science and Technology Center at Savannah State University. For additional information concerning Capital Assets, see Notes 1, 6, 8, and 13 in the Notes to the Financial Statements. Long-Term Liabilities The University System of Georgia had Long-Term Liabilities of $10.2 billion of which $255 million was reflected as a current liability at June 30, 2018. Included in Long-Term Liabilities are lease purchase obligations of $2.9 billion, net pension liability of $2.9 billion and OPEB liability of $4.2 billion. 2018 Annual Financial Report 29 The net pension liability and OPEB obligation are actuarially determined estimates of future post-employment costs. See Note 14 in the Notes to Financial Statements for additional information related to net pension liability. See Note 17 in the Notes to Financial Statements for additional information related to the OPEB liability. In fiscal year 2018, the USG adopted GASB Statement No. 75. The USG reported a net OPEB liability of $4.2 billion related to the Board of Regents Retiree Health Benefit Plan as of June 30, 2018. Lease purchase obligations decreased $122 million during the current fiscal year. Principal and interest payments were $121.9 million and $148.7 respectively for the USG. For additional information concerning Long-Term Liabilities, see Note 8 in the Notes to the Financial Statements. Notes to the Financial Statements The Notes to the Financial Statements are an integral part of the basic financial statements and communicate information essential for fair presentation. For example, the notes convey information concerning significant accounting policies used to prepare the financial statements, detailed information on cash and investments, receivables, capital leases, compensated absences, retirement and other post-employment benefits, capital assets and a report of operating expenses by function. Retiree Health Benefit Fund The University System Office is the custodian of the Board of Regents Retiree Health Benefit Fund. This fund was authorized pursuant to the Official Code of Georgia Annotated Section 47-21-21 for the purpose of accumulating funds necessary to meet employer costs of post-employment health insurance benefits. As noted in the Long-Term Liabilities section above, the USG carries an OPEB liability of $4.2 billion as of June 30, 2018. The Board of Regents continues to evaluate options to reduce this growing liability. For additional information concerning the Retiree Health Benefit Fund, please refer to Note 15 and 17 in the Notes to Financial Statements. Early Retirement Pension Plan Fund - Augusta University Augusta University Early Retirement Pension Plan (ERP) is a single-employer defined benefit pension plan administered by Bryan, Pendleton, Swats and McAlister. The plan was devised by Augusta University as a means of manpower reduction and was approved by the Board of Regents of the University System of Georgia effective January 1, 2000. For additional information concerning the Early Retirement Pension Fund, please refer to Note 14 in the Notes to Financial Statements. Affiliated Organizations System-wide, there were 25 affiliated organizations that met one or more criteria for inclusion as component units of the State of Georgia in compliance with GASB Statement No. 14, as amended. These 25 affiliated organizations are included as component units in the University System of Georgia consolidated annual financial statements as they have been determined essential to the fair presentation to these departmental statements. All system-wide affiliated organizations including the 25 previously mentioned are included in the supplementary information section. Economic Outlook USG's overarching mission is knowledge, to create it through research, transfer it through teaching and apply it through service. And as knowledge drives innovation, innovation drives the economy. Why does this matter for Georgia? There is a direct relationship between knowledge, education attainment and economic competitiveness. An educated workforce is the #1 priority of businesses considering moving to Georgia, and the USG plays a key role in working with industry to fulfill the need for talent with high-priority skills. In less than a decade, about two-thirds of jobs will require some education beyond high school. Right now, only about 47 percent of the Georgia workforce meets this requirement. At the same time, during the recovery from the Great Recession, research has shown that of the 11.6 million jobs created, 99 percent of them - or 11.5 million jobs- went to workers with at least some post-secondary education. And about 70 percent of them went to workers with at least a bachelor's degree. The USG remains a vital link for Georgia's economic success. 30 University System of Georgia It also continues to see modest enrollment increases. For fall 2018 enrollment at USG's 26 colleges and universities totaled 328,712 students, an increase of 1.1 percent (or 3,509 more students) over the previous year. This continues a five-year trend of modest increases in student enrollment and also marks the fourth consecutive year that enrollment continued to reach an all-time high in the USG's total student enrollment. This increase came even as the USG successfully completed the latest round of institutional consolidations, which since 2011 have included 18 institutions and resulted in nine newly consolidated universities and colleges throughout Georgia. These consolidated institutions have been able to eliminate or combine administrative positions, resulting in $30 million that have been redirected into hiring faculty and staff to support students' academic experiences. 2018 Annual Financial Report 31 32 University System of Georgia Financial Statements 34 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance Affiliated Organizations Component Units Primary Government Pledges and Contributions Other Notes Receivable, net Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Pledges and Contributions Other Investments Notes Receivable, net Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES The notes to the financial statements are an integral part of this statement. University System of Georgia Component Units $ 1,345,123,209 $ 213,067,505 66,457,356 537,765 323,925,905 110,158,026 83,446,309 111,184,098 70,473,727 12,681,594 216,911,224 -- -- 271,394,296 -- -- -- 22,991,105 68,766,262 4,433,437 2,292,837,480 4,154,994 5,173,508 -- 8,218,847 76,773,283 464,838,600 15,668 78,303,880 346,304 19,105,346 35,269,909 20,063,515 1,340,978,192 3,561,255 2,596,400 -- -- 197,905,258 38,008,297 -- -- 468,541 11,970,725 38,726 243,981,033 9,878,403,906 10,376,934,141 12,669,771,621 $ 873,854,980 $ 6,167,186 -- 135,860,990 14,973,342 1,979,870,173 3,643 2,301,581,506 4,048,306 56,487,912 193,722,831 3,434,162 1,668,579,431 1,160,202,817 7,524,932,299 8,865,910,491 53,654,725 2018 Annual Financial Report 35 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Interest Payable Due to Affiliated Organizations Due to Component Units Due to Primary Government Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Non-Current Liabilities Due to Affiliated Organizations Due to Primary Government Due to Other Funds Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES The notes to the financial statements are an integral part of this statement. 36 University System of Georgia University System of Georgia Component Units $ 161,146,607 $ 65,588,227 34,234,924 18,626,912 53,986,945 5,858 23,128,430 -- 11,775,797 1,255,140 656,599 34,443,091 2,353,421 4,225,186 8,218,847 -- -- 216,911,224 238,360,759 123,772,435 16,650,806 30,703,912 105,833,538 33,904,286 3,019,558 14,056,285 1,437,861 80,813,416 24,707,326 8,267,512 78,303,880 -- -- 92,182,022 -- 2,369,700 441,540 561,929 800,662 1,279,688 149,723,938 19,801,373 914,781,438 748,768,196 -- -- -- -- -- 6,657,407 509,037,982 2,301,581,506 -- -- -- 644,300 1,005,250 79,296,531 4,219,725,872 2,865,433,724 9,983,382,572 10,898,164,010 $ 1,038,949,132 $ 6,615,000 2,596,400 649,103 5,267,196 31,015,274 186,046,479 74,659,231 -- 3,149,470,250 25,685,415 30,176,076 -- 765,928 -- 6,165,679 -- 3,519,112,031 4,267,880,227 13,940,731 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION JUNE 30, 2018 NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted (Deficit) TOTAL NET POSITION The notes to the financial statements are an integral part of this statement. University System of Georgia Component Units $ 6,666,852,110 $ 379,119,386 204,781,419 218,195,579 (5,483,315,649) 1,744,234,383 1,668,806,876 845,583,613 $ 1,606,513,459 $ 4,637,744,258 2018 Annual Financial Report 37 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Student Tuition and Fees Scholarship Allowance Federal Appropriations Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Faculty Salaries Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses Operating Income (Loss) The notes to the financial statements are an integral part of this statement. University System of Georgia Component Units $ 2,726,264,061 $ -- (636,171,446) -- 20,546,064 -- 909,779,341 300,975,197 598,429,406 206,733,164 5,713,117 786,239,798 9,424,710 324,625,565 897,507,134 239,050,413 335,175,956 60,205,984 199,052,595 90,697,229 60,069,227 134,091,466 30,099,799 -- -- 168,748,734 -- -- 2,051,622 -- -- 145,102,432 -- 186,311,575 11,709,468 30,670,655 5,210,409,894 2,632,693,372 1,673,290,092 2,141,898,966 1,040,109,147 15,167,280 83,614,890 329,592,309 185,498,195 2,276,535,430 492,217,725 8,237,924,034 $ (3,027,514,140) $ -- 317,351,162 35,930,565 146,007,768 21,216,095 35,598,112 8,698,909 1,887,866,213 69,526,145 2,522,194,969 110,498,403 38 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR FISCAL YEAR ENDED JUNE 30, 2018 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues Income (Loss) Before Other Revenues, Expenses, Gains, or Losses Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses Change in Net Position Net Position, Beginning of Year, As Originally Reported Prior Year Adjustments Net Position, Beginning of Year, Restated Net Position, End of Year The notes to the financial statements are an integral part of this statement. University System of Georgia Component Units $ 2,314,491,667 $ 29,932,138 585,154,605 13,773,089 91,611,371 85,985,306 45,118,028 (144,695,683) 593,629 3,083,581 3,227,028 -- 27,553,141 297,873,509 (129,583,788) (7,174,161) 2,992,032,012 224,911,448 (35,482,128) 335,409,851 155,488 265,811,845 21,345,706 343,615 (30,284,826) 257,371,828 221,889,700 3,092,594,112 (1,707,970,353) 1,384,623,759 $ 1,606,513,459 $ -- -- 10,107,077 104,721,950 (7,885,377) 106,943,650 442,353,501 4,230,860,131 (35,469,374) 4,195,390,757 4,637,744,258 2018 Annual Financial Report 39 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CASH FLOWS FOR FISCAL YEAR ENDED JUNE 30, 2018 CASH FLOWS FROM OPERATING ACTIVITIES Payments from Customers Federal Appropriations Grants and Contracts (Exchange) Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Loans Issued to Students Collection of Loans from Students Other Receipts Other Payments Net Cash Used by Operating Activities CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions - Receipts Agency Funds Transactions - Disbursements Gifts and Grants Received for Other Than Capital Purposes Transfer of Endowments to Affiliated Organization Other Noncapital Financing Receipts Other Noncapital Financing Payments Net Cash Flows Provided by Non-capital Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Gifts and Grants Received Proceeds from Sale of Capital Assets Purchases of Capital Assets Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases Net Cash Used by Capital and Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sales and Maturities of Investments Investment Income Purchase of Investments Net Cash Provided by Investing Activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents - Beginning of Year Cash and Cash Equivalents - End of Year The notes to the financial statements are an integral part of this statement. 40 University System of Georgia University System of Georgia $ 3,301,973,858 19,349,600 1,871,601,627 (3,427,724,099) (3,830,993,568) (329,592,306) (11,275,763) 13,288,808 4,917,684 (710) (2,388,454,869) 2,314,491,667 5,381,544,066 (5,396,520,550) 743,208,655 (5,875) 29,701,557 (17,601,732) 3,054,817,788 85,145,057 15,960,283 (472,048,791) (121,967,015) (148,709,256) (641,619,722) 905,712,013 35,086,769 (917,318,341) 23,480,441 48,223,638 1,521,937,801 $ 1,570,161,439 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CASH FLOWS FOR FISCAL YEAR ENDED JUNE 30, 2018 RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES: Operating Loss Adjustments to Reconcile Net Operating Loss to Net Cash Used by Operating Activities Depreciation Operating Expenses Related to Noncash Gifts Change in Assets and Liabilities: Receivables, net Inventories Prepaid Items Other Assets Notes Receivable, Net Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Deposits Advances (Including Tuition and Fees) Other Liabilities Funds Held for Others Compensated Absences Due to Affiliated Organizations Pollution Remediation Claims and Judgments Net Pension Liability Other Post-Employment Benefit Liability Deferred Inflows of Resources Deferred Outflows of Resources Net Cash Used by Operating Activities NON-CASH INVESTING, NON-CAPITAL FINANCING, AND CAPITAL AND RELATED FINANCING TRANSACTIONS Change in Receivable from Grantor Agency Affecting Proceeds of Non-capital Debt Change in Non-capital Financing Activities Advances and Deferred Inflows Reducing Proceeds of Grants Gifts other than Capital Assets Reducing Proceeds of Grants and Gifts Change in Capital Financing Activities Receivables Reducing Proceeds of Capital Grants Gifts of Capital Assets Loss on Disposal of Capital Assets Adjustments to Capital Asset Beginning Balance Ran Through Current Year Activity Change in Accrual of Capital Asset Related Payables Capital Assets Acquired by Incurring Capital Lease Obligations Change in Lease obligations due to Debt Refunding or Extinguishment of Debt Capital Financing Activities Advances and Deferred Inflows Amortization of Deferred Gain/Loss of Capital Debt Refunded Changed in Accrual of Capital Financing Interest Payable Special Item - Capital Asset Transfer Special Item - Capital Asset Transfer Reducing Capital Grants and Gifts Unrealized Gain/Loss on Investments The notes to the financial statements are an integral part of this statement. University System of Georgia $ (3,027,514,140) 492,217,725 6,367,202 (24,954,234) 661,870 (8,576,376) (702,126) 3,315,752 (7,020,985) 7,626,333 (13,926,920) 962,985 228,379 380,735 10,532,619 (931,074) (7,295) 8,784,125 (189,785) (180,675) (787,199) (281,769,074) 17,272,070 304,416,518 125,338,701 $ (2,388,454,869) $ 13,545,833 $ 13,659,197 $ 6,349,973 $ (1,266,589) $ 199,147,677 $ (51,081,663) $ 131,426 $ (1,238,934) $ (16,134,248) $ 23,555,691 $ 3,581,921 $ 3,498,703 $ 2,070,858 $ (10,272,842) $ 2,143,660 $ 9,964,498 2018 Annual Financial Report 41 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2018 ASSETS Cash and Cash Equivalents Investments Mutual Bond Funds Equity Mutual Funds - Domestic Equity Mutual Funds - International Equity Securities - Domestic Guaranteed Investment Contracts Pooled Investment Other Investments Early Retirement Plan - Augusta University Deferred Compensation Fund Retiree Health Benefit Fund $ 4,865,193 $ 4,731,089 $ 16,539,659 $ 13,079,318 48,759,325 -- 32,318,283 -- -- -- 1,130,861 1,914,911 10,944 -- 1,061,901 -- 646,316 -- -- -- -- -- 64,136,763 -- Total Assets 99,022,119 9,496,022 80,676,422 LIABILITIES Benefits Payable -- -- 4,631,431 NET POSITION Held in Trust for: Other Employment Benefits Pension Benefits Other Postemployment Benefits -- 99,022,119 -- 9,496,022 -- -- -- -- 76,044,991 Total Net Position $ 99,022,119 $ 9,496,022 $ 76,044,991 $ The notes to the financial statements are an integral part of this statement. Total 26,135,941 14,210,179 50,674,236 10,944 32,318,283 1,061,901 64,136,763 646,316 189,194,563 4,631,431 9,496,022 99,022,119 76,044,991 184,563,132 42 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR FISCAL YEAR ENDED JUNE 30, 2018 ADDITIONS Contributions Employer Investment Income Dividends and Interest Net Appreciation in Investments Reported at Fair Value Less: Investment Expense Total Additions DEDUCTIONS Benefits Premium Expense Withdrawal Administrative expense Total Deductions Change in Net Position Held in Trust for Pension and Other Employee Benefits Net Position, Beginning of Year Early Retirement Plan - Augusta University Deferred Compensation Fund Retiree Health Benefit Fund Total $ 13,084,672 $ 1,148,887 $ 158,419,937 $ 172,653,496 1,814,737 7,666,447 (166,966) 22,398,890 491,952 401,174 -- 2,042,013 1,000,224 (158,389) (40,519) 159,221,253 3,306,913 7,909,232 (207,485) 183,662,156 13,784,836 -- -- -- 13,784,836 -- -- 139,810 -- 139,810 86,808,731 3,739,929 -- 484,825 91,033,485 100,593,567 3,739,929 139,810 484,825 104,958,131 8,614,054 90,408,065 1,902,203 7,593,819 68,187,768 7,857,223 78,704,025 105,859,107 Net Position, End of Year $ 99,022,119 $ The notes to the financial statements are an integral part of this statement. 9,496,022 $ 76,044,991 $ 184,563,132 2018 Annual Financial Report 43 UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF NET POSITION COMPONENT UNITS JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance Affiliated Organizations Component Units Primary Government (Institution) Pledges and Contributions Other Notes Receivable, net Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets Augusta University Foundation, Inc. Augusta University Research Institute, Inc. AU Health Systems, Inc. Georgia Advanced Technology Ventures, Inc. Georgia College & State University Foundation, Inc. Georgia Gwinnett College Foundation Inc. $ 3,599,289 $ 3,253,919 1,482,318 -- -- 443,489 -- -- 156,166 52,991 -- 1,119,649 -- -- -- -- 10,107,821 4,381,937 $ -- -- -- 62,015,768 $ 4,196,045 37,961,738 3,671,699 4,154,994 -- -- 7,500 -- -- -- -- -- -- -- -- 8,544,431 -- 138,785 -- 4,620,932 -- 149,885,409 -- 1,186,728 -- 19,105,346 17,410,195 -- 300,192,645 5,422,533 $ 92,960 -- -- -- -- -- -- 156,785 98,896 15,668 -- -- -- 27,948 227,214 6,042,004 3,257,017 $ -- -- -- -- -- -- -- 304,457 1,295 -- -- -- -- 30,002 -- 3,592,771 613,210 -- -- -- -- -- -- 4,548 143,021 59,381 -- 4,495,046 -- -- -- -- 5,315,206 Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Pledges and Contributions Other Investments Notes Receivable, net Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- 166,876 -- 8,065,133 -- 23,975,501 -- 749,766 -- -- 20,046,067 -- 53,003,343 63,111,164 -- -- -- -- 4,198,751 -- -- -- -- -- -- -- -- 4,198,751 12,743,182 -- -- -- 14,966,249 108,259,000 -- 22,519,524 -- 5,518,129 -- -- -- 256,138,375 407,401,277 707,593,922 -- -- 598,428 -- 15,000 -- -- -- -- 38,304,169 -- -- 115,225,475 154,143,072 160,185,076 -- -- 361,972 -- 37,828,406 -- 84,779,839 -- 945,869 -- -- 13,159,200 1,216,075 138,291,361 141,884,132 -- -- 208,920 -- 5,814,352 -- 161,166,269 -- 10,857 11,730,393 -- -- 8,262,388 187,193,179 192,508,385 DEFERRED OUTFLOWS OF RESOURCES $ --$ --$ --$ --$ --$ -- The notes to the financial statements are an integral part of this statement. 44 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF NET POSITION COMPONENT UNITS JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Retainage Payable Interest Payable Due to Affiliated Organizations Due to Component Units Due to Primary Government Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Revenue Bond/Mortgage Payable Liabilities Under Split Interest Agreements Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Augusta University Foundation, Inc. Augusta University Research Institute, Inc. AU Health Systems, Inc. Georgia Advanced Technology Ventures, Inc. Georgia College & State University Foundation, Inc. Georgia Gwinnett College Foundation Inc. $ 467,473 $ 37,255 $ 42,051,559 $ 1,024,191 $ 1,021,259 $ 3,404,499 -- -- 11,655,786 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 428,576 -- -- 777,751 1,966,905 -- -- -- 163,152 566,035 -- -- 178,289 4,161,470 35,692,611 -- 34,041 52,624 49,561 -- -- 2,270,401 -- 618,526 -- -- -- 175,193 -- -- -- -- -- -- 3,404,151 -- -- 18,536 7,850,066 134,360 -- -- -- -- 3,254,167 221,023 -- 117,646 -- -- 5,469,281 1,708,100 -- -- 960,000 -- 2,945,000 -- 2,655,000 3,575,000 -- -- -- -- -- -- -- -- -- 561,929 -- -- -- -- -- -- -- -- -- -- 19,392,373 -- -- -- 2,083,899 4,217,261 128,473,995 7,438,983 9,081,356 7,768,295 Non-Current Liabilities Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Revenue Bonds/Mortgage Payable Liabilities Under Split Interest Agreements Interest Rate Swap Claims and Judgments Net Other Post Employment Benefits Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- -- -- -- -- 23,118,925 -- -- -- -- 23,118,925 25,202,824 -- -- -- -- -- -- -- -- -- -- -- -- -- -- 4,217,261 -- -- -- -- -- 16,348,297 60,595,833 17,777,061 129,102,958 -- 14,818,596 -- 6,165,679 244,808,424 373,282,419 -- 587,877 -- -- 1,876,072 -- 6,571,364 52,804,919 61,658,199 -- -- -- -- 123,498,431 130,937,414 -- -- -- -- -- -- -- -- 92,186,880 808,641 5,479,942 -- -- 98,475,463 107,556,819 -- -- -- -- -- -- 2,151,394 -- 168,713,233 -- -- -- -- 170,864,627 178,632,922 DEFERRED INFLOWS OF RESOURCES -- -- -- -- -- -- NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION -- 19,392,067 15,515,865 3,000,408 $ 37,908,340 $ -- 87,762,033 29,412,127 1,216,075 8,262,388 -- 69,973 8,455,948 8,525,921 $ -- -- 246,549,470 334,311,503 $ -- 7,128,464 (7,292,929) 29,247,662 $ 19,572,735 9,193,328 4,345,175 34,327,313 $ 1,468,963 1,302,018 2,842,094 13,875,463 The notes to the financial statements are an integral part of this statement. 2018 Annual Financial Report 45 UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF NET POSITION COMPONENT UNITS JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance Affiliated Organizations Component Units Primary Government (Institution) Pledges and Contributions Other Notes Receivable, net Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets Georgia Health Sciences Foundation, Inc. Georgia Southern University Housing Foundation, Inc. Georgia State University Athletic Association, Inc. Georgia State University Foundation, Inc. Georgia State University Research Foundation, Inc. Georgia Tech Athletic Association $ 323,160 $ -- 10,848,632 -- 2,288,634 $ -- 5,997,280 -- 3,302,696 $ -- -- -- 5,866,847 $ 22,354,408 -- -- 11,607,729 $ 2,842,889 -- -- 7,935,052 -- -- -- -- -- 163,152 -- 3,358,852 65,793 -- -- -- -- 42,103 -- 14,801,692 -- -- -- -- -- 32,504 -- 8,847,508 -- -- 73,197 -- 17,239,123 -- -- -- -- 12,921,741 488,536 -- -- -- -- 263,403 -- 16,976,376 -- -- -- -- 5,798,990 509,290 -- 4,817,806 -- -- -- -- 39,347,341 -- -- 54,180 2,546,660 -- 16,858,655 -- 2,309,831 -- -- 13,873,078 -- 50,093,022 -- 1,034,347 -- -- 3,327,816 3,871,523 -- -- -- -- 1,203,090 -- 17,371,828 Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Pledges and Contributions Other Investments Notes Receivable, net Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- 137,670 -- 2,491,483 -- -- -- -- -- -- 2,513,812 2,330,775 7,473,740 22,275,432 -- -- -- -- -- -- 213,117,609 -- -- 31,879,724 -- -- 1,620,000 246,617,333 263,856,456 -- -- -- -- -- -- -- -- -- -- -- -- 254,088 254,088 17,230,464 -- -- 8,342,840 -- 238,909,631 -- 117,046,402 -- 3,864,055 -- -- -- 15,324,667 383,487,595 422,834,936 -- -- -- -- 8,954,655 -- 70,056,371 -- -- -- -- -- 8,555,539 87,566,565 137,659,587 -- -- 4,529,908 -- 109,095,500 -- -- -- 723,496 -- -- -- 164,171,096 278,520,000 295,891,828 DEFERRED OUTFLOWS OF RESOURCES $ --$ --$ --$ --$ 8,355,807 $ 16,859,114 The notes to the financial statements are an integral part of this statement. 46 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF NET POSITION COMPONENT UNITS JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Retainage Payable Interest Payable Due to Affiliated Organizations Due to Component Units Due to Primary Government Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Revenue Bond/Mortgage Payable Liabilities Under Split Interest Agreements Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Georgia Health Sciences Foundation, Inc. Georgia Southern University Housing Foundation, Inc. Georgia State University Athletic Association, Inc. Georgia State University Foundation, Inc. Georgia State University Research Foundation, Inc. Georgia Tech Athletic Association $ 72,180 $ 3,921,771 $ 610,494 $ 3,908,976 $ 1,955,440 $ 4,733,678 -- -- 17,750 -- -- -- -- -- 5,858 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 17,607 -- -- -- -- -- -- -- -- -- 54,180 -- 339,033 -- -- -- 22,633,382 1,808,231 526,887 566,562 1,431,256 1,250,000 -- 354,537 -- -- -- -- -- 10,471,740 -- -- -- 2,339,862 -- -- -- -- 3,296 912,043 -- -- -- -- -- -- -- 945,963 -- -- 18,829 617,900 -- 69,087 -- 7,985,000 -- 5,145,000 -- 1,145,000 90,485 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 1,279,688 -- -- -- -- -- -- 1,046,192 12,473,333 2,087,483 14,173,781 24,643,002 20,807,924 Non-Current Liabilities Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Revenue Bonds/Mortgage Payable Liabilities Under Split Interest Agreements Interest Rate Swap Claims and Judgments Net Other Post Employment Benefits Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- -- -- -- -- -- 187,097 -- -- -- 187,097 1,233,289 -- -- 2,596,400 -- -- 10,558 -- -- 218,090,508 -- -- -- -- 220,697,466 233,170,799 -- -- -- -- -- -- -- 15,141 -- -- -- -- -- 15,141 2,102,624 -- -- -- -- -- 5,434,496 -- -- 131,052,210 1,714,796 -- -- -- 138,201,502 152,375,283 -- -- -- -- -- -- -- -- 81,081,458 -- -- -- -- 81,081,458 105,724,460 -- -- -- -- -- -- 4,136,573 51,815 214,850,250 -- -- 765,928 -- 219,804,566 240,612,490 DEFERRED INFLOWS OF RESOURCES -- 75,231 -- -- 13,865,500 -- NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION 2,330,775 1,620,000 2,582,665 -- 13,909,247 31,879,724 2,219,456 (2,889,298) $ 21,042,143 $ 30,610,426 $ The notes to the financial statements are an integral part of this statement. 220,118 15,324,667 -- 2,650,111 12,257,611 15,127,840 $ 164,209,327 64,799,156 26,126,503 270,459,653 $ 8,555,539 (40,473,605) -- 11,646,077 6,223,818 26,425,434 $ 37,154,723 71,476,970 3,980,364 72,138,452 2018 Annual Financial Report 47 UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF NET POSITION COMPONENT UNITS JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance Affiliated Organizations Component Units Primary Government (Institution) Pledges and Contributions Other Notes Receivable, net Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets Georgia Tech Facilities, Inc. Georgia Tech Foundation, Inc. Georgia Tech Research Corporation Kennesaw State University Foundation, Inc. Medical College of Georgia Foundation Middle Georgia State University Real Estate Foundation, Inc. $ 7,332,379 $ 9,910,000 $ 76,115,265 $ 17,918,782 $ 28,177,571 11,757,000 -- -- -- -- -- 12,349,804 -- -- -- -- -- 1,591,980 600,000 -- -- -- -- 9,498,087 -- -- 256,189 -- 47,456,206 -- -- -- -- 22,493,000 24,041,000 -- 6,987,880 -- -- -- -- 75,188,880 -- -- -- -- -- 170,816,370 -- -- 346,304 -- 503,747 -- 247,781,686 -- -- -- 346,542 3,493,880 300,459 -- 9,234,713 -- -- 226,338 -- 43,870,518 1,425,386 $ -- -- -- 2,185,769 -- -- -- -- -- -- -- 597,409 -- -- -- -- -- -- -- 2,022,795 -- -- -- -- -- 61,394,127 -- 747,495 -- -- 7,275 -- 64,334,666 Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Pledges and Contributions Other Investments Notes Receivable, net Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS 6,167,186 553,912 -- -- -- 3,643 215,972,123 -- 3,487,500 32,883,455 -- -- 13,820,576 272,888,395 320,344,601 -- -- 82,142,000 -- 1,095,524,000 -- 110,230,281 -- 24,783,000 -- -- 554,025,000 111,683,000 1,978,387,281 2,053,576,161 -- -- -- -- 63 -- -- 4,048,306 -- -- -- -- 934,597 4,982,966 252,764,652 -- -- 5,900,843 -- 15,095,722 -- 219,778,178 -- -- 53,669,323 -- 35,739,920 87,213,893 417,397,879 461,268,397 -- -- 932,102 16,588 120,894,345 -- -- -- 264,596 -- -- 129,629,157 9,934,459 261,671,247 263,694,042 -- -- -- -- -- -- 32,462,372 -- -- -- 3,434,162 -- 789,332 36,685,866 101,020,532 DEFERRED OUTFLOWS OF RESOURCES $ --$ --$ --$ --$ --$ -- The notes to the financial statements are an integral part of this statement. 48 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF NET POSITION COMPONENT UNITS JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Retainage Payable Interest Payable Due to Affiliated Organizations Due to Component Units Due to Primary Government Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Revenue Bond/Mortgage Payable Liabilities Under Split Interest Agreements Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Georgia Tech Facilities, Inc. Georgia Tech Foundation, Inc. Georgia Tech Research Corporation Kennesaw State University Foundation, Inc. Medical College of Georgia Foundation Middle Georgia State University Real Estate Foundation, Inc. $ 5,735,907 $ 3,077,000 $ 296 $ 9,473,772 $ -- -- -- -- -- -- -- -- 1,255,140 -- -- -- -- -- -- -- 1,034,347 -- -- -- -- -- -- -- -- 7,249,000 97,118,000 1,599,219 1,235,883 21,756,000 53,742,326 1,068,340 -- 191,000 -- 29,678 -- -- 28,158,408 -- -- -- 5,071,544 -- -- 20,733,000 -- -- -- -- 384,315 -- 11,403,267 11,425,000 -- 12,715,000 -- 1,465,000 -- 35,782 -- -- -- -- -- -- -- -- -- 409,000 -- -- 20,664,544 66,305,000 184,474,889 24,921,791 --$ -- -- -- -- -- -- 104,503 -- -- -- 66,440 5,000,000 -- -- -- -- -- -- 5,170,943 2,258,105 -- -- -- -- -- -- -- -- -- -- -- 773,000 -- 1,710,000 -- -- -- -- 4,741,105 Non-Current Liabilities Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Revenue Bonds/Mortgage Payable Liabilities Under Split Interest Agreements Interest Rate Swap Claims and Judgments Net Other Post Employment Benefits Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- 1,587,448 -- -- -- 252,845,825 -- -- -- -- 254,433,273 275,097,817 6,615,000 -- -- -- -- 8,842,000 46,442,000 -- 236,889,000 14,062,000 -- -- -- 312,850,000 379,155,000 -- -- -- -- -- -- -- 4,010,295 -- -- -- -- -- 4,010,295 188,485,184 -- -- -- -- -- -- -- -- 362,381,063 55,941 -- -- -- 362,437,004 387,358,795 -- -- -- -- -- -- -- -- -- 869,766 -- -- -- 869,766 6,040,709 -- -- -- -- -- -- -- -- 89,584,844 -- -- -- -- 89,584,844 94,325,949 DEFERRED INFLOWS OF RESOURCES -- -- -- -- -- -- NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION 11,625,686 48,844,000 934,597 (34,972,296) 4,934,459 -- 734,346,000 -- 39,189,061 129,629,157 27,581,430 786,558,000 -- 23,557,184 87,382,351 6,039,668 104,673,161 63,344,871 46,135,653 35,707,366 $ 45,246,784 $ 1,674,421,161 $ 64,279,468 $ 73,909,602 $ 257,653,333 $ 789,332 -- 6,334,271 (429,020) 6,694,583 The notes to the financial statements are an integral part of this statement. 2018 Annual Financial Report 49 UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF NET POSITION COMPONENT UNITS JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance Affiliated Organizations Component Units Primary Government (Institution) Pledges and Contributions Other Notes Receivable, net Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets University of Georgia Athletic Association, Inc. University of Georgia Foundation University of Georgia Research Foundation, Inc. University of North Georgia Real Estate Foundation, Inc. UWG Real Estate Foundation, Inc. University System of Georgia Foundation, Inc. $ 56,249,118 $ 2,018,815 $ 33,654,301 $ -- 15,430,636 -- -- 14,066,020 -- -- 107,512,399 -- 2,463,567 $ 3,972,107 -- -- -- -- 69,857 -- -- 3,152,970 -- -- -- -- 616,863 -- 60,088,808 -- -- -- -- 23,975,890 2,184,582 -- -- -- -- 372,179 -- 165,560,521 -- -- -- 692,665 -- 30,723,081 -- 8,121,304 -- -- 218,013 19,836,301 93,245,665 -- -- -- -- -- -- -- 3,929,655 -- -- 132,313 -- 10,497,642 882,631 $ 4,855,656 740,517 -- 692,107 13,224,835 -- -- -- -- -- -- -- -- -- 2,659,246 -- -- -- -- 9,138,050 -- 1,964,907 -- -- 45,276 -- -- 9,533,603 -- -- -- -- 25,460,728 Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Pledges and Contributions Other Investments Notes Receivable, net Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- -- -- 53,473,069 -- -- -- 383,531 -- -- -- 316,714,200 370,570,800 430,659,608 -- -- 45,461,172 -- 116,124,963 -- -- -- 14,930,888 -- -- 902,418,572 23,642,386 1,102,577,981 1,268,138,502 -- -- -- -- 49,419,215 -- 231,616,248 -- 824,360 8,192,909 -- -- 19,406,427 309,459,159 402,704,824 -- -- -- -- -- -- 127,710,333 -- -- 3,969,228 -- -- 2,738,131 134,417,692 144,915,334 -- -- -- -- 248,305 -- 114,180,350 -- -- 3,572,705 -- -- -- 118,001,360 127,139,410 -- -- -- -- 5,458,580 -- 393,272,230 -- 1,865 9,520,925 -- -- -- 408,253,600 433,714,328 DEFERRED OUTFLOWS OF RESOURCES $ 13,353,531 $ --$ 15,086,273 $ --$ --$ -- The notes to the financial statements are an integral part of this statement. 50 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF NET POSITION COMPONENT UNITS JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Retainage Payable Interest Payable Due to Affiliated Organizations Due to Component Units Due to Primary Government Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Revenue Bond/Mortgage Payable Liabilities Under Split Interest Agreements Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities University of Georgia Athletic Association, Inc. University of Georgia Foundation University of Georgia Research Foundation, Inc. University of North Georgia Real Estate Foundation, Inc. UWG Real Estate Foundation, Inc. University System of Georgia Foundation, Inc. $ 5,663,152 $ 6,953,376 -- -- -- -- -- 6,936,673 34,667,957 -- -- -- -- -- 5,495,000 -- -- -- -- 59,716,158 1,713,310 $ -- -- -- -- -- -- 2,539,952 1,753,250 -- -- -- 497,395 -- -- 778,433 -- -- -- 7,282,340 1,835,871 $ -- -- -- -- 9,495 -- 36,464,196 2,066,732 19,836,301 -- -- 8,516,222 -- 9,145,000 -- -- -- -- 77,873,817 2,692,247 $ -- -- -- -- -- -- -- 414,217 -- -- -- 405,000 -- 1,338,755 -- -- -- -- 4,850,219 1,069,570 $ -- -- -- -- -- -- -- -- -- -- -- -- -- 3,015,000 -- -- -- -- 4,084,570 906,895 -- -- -- -- -- -- -- -- -- 1,865 -- 40,350,000 -- 7,545,000 -- -- -- -- 48,803,760 Non-Current Liabilities Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Revenue Bonds/Mortgage Payable Liabilities Under Split Interest Agreements Interest Rate Swap Claims and Judgments Net Other Post Employment Benefits Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- -- 379,923 15,836,592 -- 95,207,340 -- 2,784,451 -- -- 114,208,306 173,924,464 -- -- -- 649,103 -- -- 15,011,522 -- -- 7,987,174 1,269,901 -- -- 24,917,700 32,200,040 -- -- -- -- 1,803,676 -- -- -- 245,099,853 -- -- -- -- 246,903,529 324,777,346 -- -- -- -- -- -- 1,215,000 -- 130,793,255 -- -- -- -- 132,008,255 136,858,474 -- -- -- -- -- -- -- -- 118,309,422 -- -- -- -- 118,309,422 122,393,992 -- -- -- -- -- -- 34,086,201 -- 335,630,633 -- -- -- -- 369,716,834 418,520,594 DEFERRED INFLOWS OF RESOURCES -- -- -- -- -- -- NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION 210,744,348 8,133,469 10,890,205 -- 596,270,687 -- 505,135,826 59,344,327 126,398,480 $ 270,088,675 $ 1,235,938,462 $ -- 2,427,821 79,695,725 93,013,751 $ 2,738,131 -- -- 5,318,729 8,056,860 $ -- -- -- -- 4,745,418 4,745,418 $ 418,998 259,060 14,515,676 15,193,734 The notes to the financial statements are an integral part of this statement. 2018 Annual Financial Report 51 UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF NET POSITION COMPONENT UNITS JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance Affiliated Organizations Component Units Primary Government (Institution) Pledges and Contributions Other Notes Receivable, net Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Pledges and Contributions Other Investments Notes Receivable, net Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES The notes to the financial statements are an integral part of this statement. VSU Auxiliary Services Real Estate Foundation, Inc. Elimination/ Consolidation Entries Total $ 2,463,913 $ -- -- -- -- -- -- -- -- 301,738 -- 4,815,329 -- -- 13,976 -- 7,594,956 --$ -- -- -- 323,925,905 110,158,026 83,446,309 111,184,098 -- -- (887,189) -- -- -- -- -- -- -- -- -- (887,189) 4,154,994 5,173,508 -- 8,218,847 76,773,283 464,838,600 15,668 78,303,880 346,304 19,105,346 35,269,909 20,063,515 1,340,978,192 -- -- -- -- -- -- 163,697,876 -- -- -- -- 11,047,703 227,338 174,972,917 182,567,873 -- (553,912) (12,921,741) (9,495) -- -- -- -- -- -- -- -- -- (13,485,148) (14,372,337) 6,167,186 -- 135,860,990 14,973,342 1,979,870,173 3,643 2,301,581,506 4,048,306 56,487,912 193,722,831 3,434,162 1,668,579,431 1,160,202,817 7,524,932,299 8,865,910,491 $ --$ --$ 53,654,725 52 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF NET POSITION COMPONENT UNITS JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Retainage Payable Interest Payable Due to Affiliated Organizations Due to Component Units Due to Primary Government Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Revenue Bond/Mortgage Payable Liabilities Under Split Interest Agreements Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Non-Current Liabilities Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Revenue Bonds/Mortgage Payable Liabilities Under Split Interest Agreements Interest Rate Swap Claims and Judgments Net Other Post Employment Benefits Liability Total Non-Current Liabilities TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION The notes to the financial statements are an integral part of this statement. VSU Auxiliary Services Real Estate Foundation Elimination/ Consolidation Entries Total $ 2,466,275 $ (34,512,948) $ 65,588,227 -- -- 18,626,912 -- -- 5,858 -- -- 1,255,140 -- 34,443,091 34,443,091 -- (9,495) 4,225,186 -- (783,367) -- -- -- 216,911,224 -- -- 123,772,435 -- -- 30,703,912 -- -- 33,904,286 -- -- 14,056,285 -- -- 80,813,416 -- -- 8,267,512 3,980,000 -- 92,182,022 -- -- 2,369,700 -- -- 561,929 -- -- 1,279,688 -- -- 19,801,373 6,446,275 (862,719) 748,768,196 -- -- -- -- -- -- -- -- 162,874,394 -- 5,823,186 -- -- 168,697,580 175,143,855 -- -- (587,877) -- -- -- -- -- -- -- -- -- -- -- (587,877) (1,450,596) 6,615,000 -- 2,596,400 649,103 5,267,196 31,015,274 186,046,479 74,659,231 3,149,470,250 25,685,415 30,176,076 765,928 6,165,679 3,519,112,031 4,267,880,227 -- 13,940,731 227,338 -- 379,119,386 -- -- 1,744,234,383 -- -- 1,668,806,876 7,196,680 (12,921,741) 845,583,613 $ 7,424,018 $ (12,921,741) $ 4,637,744,258 2018 Annual Financial Report 53 UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION COMPONENT UNITS FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Augusta University Foundation, Inc. Augusta University Research Foundation, Inc. AU Health Systems, Inc. Georgia Advanced Technology Ventures, Inc. Georgia College & State University Foundation, Inc. Georgia Gwinnett College Foundation Inc. $ --$ 50,592,029 $ 4,659,630 $ --$ --$ -- -- -- -- -- -- -- 43,920 10,156,955 -- 28,609 -- -- 789,046 -- 817,829,308 364,193 -- 82,677 174,859 351,258 986,098 12,927,160 5,150,235 9,233,008 -- -- -- 1,375,772 912,577 212,272 -- 2,051,622 -- -- -- -- -- -- -- -- -- -- -- -- -- 267,720 -- 256,876 -- -- -- 4,386,738 2,443,949 151,110 -- -- -- 1,589,988 -- -- Total Operating Revenues 3,508,446 61,100,242 825,526,658 13,844,558 12,132,032 10,905,673 OPERATING EXPENSES Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation -- -- -- -- 656,961 -- 1,864,933 6,240 -- -- -- -- -- -- 61,088,356 -- 278,131,467 34,129,281 142,150,598 2,775,744 1,378,740 4,399,194 309,801,866 36,175,226 288,973 -- -- -- -- 34,476 6,773,651 2,920,645 196,359 -- -- 90,380 820,559 60,652 4,902,767 55,157 -- -- -- -- 249,979 -- 1,697,582 457 Total Operating Expenses 2,528,134 61,088,356 808,942,116 10,017,745 6,125,874 1,948,018 Operating Income (Loss) $ 980,312 $ 11,886 $ 16,584,542 $ 3,826,813 $ 6,006,158 $ 8,957,655 The notes to the financial statements are an integral part of this statement. 54 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION COMPONENT UNITS FOR FISCAL YEAR ENDED JUNE 30, 2018 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues Income (Loss) Before Other Revenues, Expenses, Gains, or Losses Capital Grants and Gifts Other Additions to Permanent and Term Endowments Special Item Augusta University Foundation, Inc. Augusta University Research Foundation, Inc. AU Health Systems, Inc. Georgia Advanced Technology Ventures, Inc. Georgia College & State University Foundation, Inc. Georgia Gwinnett College Foundation Inc. $ --$ --$ 29,932,138 $ --$ --$ -- -- -- -- 1,758,828 (879,114) (353,408) -- -- -- 68,514 -- (18,092) 3,083,581 3,227,028 -- 11,067,969 (8,513,680) (7,033,260) -- -- -- 48,742 (3,230,936) -- -- -- -- 4,789,364 (4,192,793) (1,979,146) -- -- -- 330,169 (5,261,844) 2,946,555 526,306 50,422 31,763,776 (3,182,194) (1,382,575) (1,985,120) 1,506,618 62,308 48,348,318 644,619 4,623,583 6,972,535 -- 587,066 -- -- (185,163) -- -- -- -- -- -- -- 1,185,205 -- -- -- 162,420 -- Total Other Revenues, Expenses, Gains or Losses 587,066 -- (185,163) -- 1,185,205 162,420 Change in Net Position Net Position, Beginning of Year, Restated 2,093,684 35,814,656 62,308 8,463,613 48,163,155 286,148,348 644,619 28,603,043 5,808,788 28,518,525 7,134,955 6,740,508 Net Position, End of Year $ 37,908,340 $ 8,525,921 $ 334,311,503 $ 29,247,662 $ 34,327,313 $ 13,875,463 The notes to the financial statements are an integral part of this statement. 2018 Annual Financial Report 55 UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION COMPONENT UNITS FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Georgia Health Sciences Foundation, Inc. Georgia Southern University Housing Foundation, Inc. Georgia State University Athletic Association, Inc. Georgia State University Foundation, Inc. Georgia State University Research Foundation, Inc. Georgia Tech Athletic Association $ --$ --$ --$ --$ 74,603,709 $ -- -- -- -- -- 1,537,339 -- 1,778,010 -- -- -- 18,467,719 -- 353,928 -- 3,000,241 -- -- 64,095,182 12,300 9,899,969 640,717 17,375,554 93,996 9,442,347 -- -- -- 3,260,426 -- 3,195,286 -- -- -- -- -- 7,637,541 -- -- -- 36,074,116 -- 4,052,973 -- -- -- 22,247,918 6,371,836 1,544,394 -- -- -- -- -- 3,032,914 -- -- -- 2,745,332 -- -- Total Operating Revenues 8,599,950 17,537,510 43,768,047 47,539,702 97,735,677 76,282,861 OPERATING EXPENSES Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation -- -- 2,862,971 189,071 1,007,122 -- 5,988,505 -- -- -- 329,635 -- -- -- 4,199,053 -- 10,553,507 279,987 -- 379,662 7,459,242 141,190 13,722,507 70,338 2,251,315 -- -- 1,076,496 7,395,350 -- 28,398,259 591,008 -- -- -- 97,771 -- 7,720 93,899,206 708,822 -- -- -- 4,450,024 11,472,295 -- 53,116,718 7,496,855 Total Operating Expenses 10,047,669 4,528,688 32,606,433 39,712,428 94,713,519 76,535,892 Operating Income (Loss) $ (1,447,719) $ 13,008,822 $ 11,161,614 $ 7,827,274 $ 3,022,158 $ (253,031) The notes to the financial statements are an integral part of this statement. 56 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION COMPONENT UNITS FOR FISCAL YEAR ENDED JUNE 30, 2018 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues Income (Loss) Before Other Revenues, Expenses, Gains, or Losses Capital Grants and Gifts Other Additions to Permanent and Term Endowments Special Item Georgia Health Sciences Foundation, Inc. Georgia Southern University Housing Foundation, Inc. Georgia State University Athletic Association, Inc. Georgia State University Foundation, Inc. Georgia State University Research Foundation, Inc. Georgia Tech Athletic Association $ --$ --$ --$ --$ --$ -- -- -- -- 521,623 (8,769) -- -- -- -- 587,495 (8,262,293) -- -- -- -- -- -- -- -- -- -- -- (281,669) 813,928 -- 8,147,416 741,809 9,868,946 -- (1,381,634) (2,687,677) (12,540,627) -- -- 663,433 -- 512,854 (7,674,798) -- 6,765,782 (1,564,104) (1,857,753) (934,865) 5,334,024 11,161,614 14,593,056 1,458,054 (2,110,784) -- -- -- -- -- 10,292,240 158,623 -- -- -- -- 2,618,107 -- -- -- -- -- -- Total Other Revenues, Expenses, Gains or Losses 158,623 -- -- -- -- 12,910,347 Change in Net Position Net Position, Beginning of Year, Restated (776,242) 21,818,385 5,334,024 25,276,402 11,161,614 3,966,226 14,593,056 255,866,597 1,458,054 24,967,380 10,799,563 61,338,889 Net Position, End of Year $ 21,042,143 $ 30,610,426 $ 15,127,840 $ 270,459,653 $ 26,425,434 $ 72,138,452 The notes to the financial statements are an integral part of this statement. 2018 Annual Financial Report 57 UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION COMPONENT UNITS FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Georgia Tech Facilities, Inc. Georgia Tech Foundation, Inc. Georgia Tech Research Corporation Kennesaw State University Foundation, Inc. Medical College of Georgia Foundation Middle Georgia State University Real Estate Foundation, Inc. $ --$ -- $ 656,384,430 $ --$ -- -- 7,887,371 -- 23,146,940 -- 90,935,250 -- 128,535 19,000 -- 518,047 14,125,565 29,637,000 13,505,198 44,537,667 --$ -- -- -- 54,287 -- -- -- -- 4,987,537 -- -- -- -- -- 29,205 -- -- -- 41,263,000 -- -- -- -- -- -- -- -- -- -- -- -- 8,189,839 2,085,115 -- 1,458,003 -- -- -- 1,208,708 -- -- -- -- -- 6,041 Total Operating Revenues 37,430,245 70,919,000 768,712,249 54,703,556 3,348,110 4,993,578 OPERATING EXPENSES Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation -- -- -- -- -- 193,750 904,578 60,000 4,410,000 897,000 603,000 123,000 -- 744,000 101,601,000 4,107,000 -- -- -- 117,632 -- -- 760,462,694 308,743 2,560,101 -- 61,564 14,499 1,717,943 3,089,441 14,726,215 5,117,855 784,356 128,677 -- 33,306 1,804,722 28,486 6,916,596 57,305 -- -- -- -- -- -- 8,592,512 -- Total Operating Expenses 1,158,328 112,485,000 760,889,069 27,287,618 9,753,448 8,592,512 Operating Income (Loss) $ 36,271,917 $ (41,566,000) $ 7,823,180 $ 27,415,938 $ (6,405,338) $ (3,598,934) The notes to the financial statements are an integral part of this statement. 58 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION COMPONENT UNITS FOR FISCAL YEAR ENDED JUNE 30, 2018 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues Income (Loss) Before Other Revenues, Expenses, Gains, or Losses Capital Grants and Gifts Other Additions to Permanent and Term Endowments Special Item Georgia Tech Facilities, Inc. Georgia Tech Foundation, Inc. Georgia Tech Research Corporation Kennesaw State University Foundation, Inc. Medical College of Georgia Foundation Middle Georgia State University Real Estate Foundation, Inc. $ --$ --$ --$ --$ --$ -- -- -- -- 216,576 (12,417,915) -- -- -- -- 147,748,161 (12,244,000) -- -- -- -- 299,668 -- 36,447 -- -- -- 2,397,293 (14,203,670) -- -- -- -- 19,808,102 -- -- -- -- -- 300,970 (4,475,087) -- (12,201,339) 135,504,161 336,115 (11,806,377) 19,808,102 (4,174,117) 24,070,578 93,938,161 8,159,295 15,609,561 13,402,764 (7,773,051) -- -- -- -- -- -- -- 39,690,000 -- 2,479,301 1,864,565 -- -- -- -- (4,795,955) -- -- Total Other Revenues, Expenses, Gains or Losses -- 39,690,000 -- (2,316,654) 1,864,565 -- Change in Net Position Net Position, Beginning of Year, Restated 24,070,578 21,176,206 133,628,161 1,540,793,000 8,159,295 56,120,173 13,292,907 60,616,695 15,267,329 242,386,004 (7,773,051) 14,467,634 Net Position, End of Year $ 45,246,784 $ 1,674,421,161 $ 64,279,468 $ 73,909,602 $ 257,653,333 $ The notes to the financial statements are an integral part of this statement. 6,694,583 2018 Annual Financial Report 59 UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION COMPONENT UNITS FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues University of Georgia Athletic Association, Inc. University of Georgia Foundation University of Georgia Research Foundation, Inc. University of North Georgia Real Estate Foundation, Inc. UWG Real Estate Foundation, Inc. University System of Georgia Foundation, Inc. $ --$ --$ --$ --$ --$ -- -- -- -- -- -- -- -- -- 180,061,965 -- -- 6,197 -- 9,664,456 -- -- -- 662,521 -- 1,161,698 27,740,812 8,438,432 5,853,649 16,195,671 -- -- 145,102,432 -- -- -- -- -- -- 71,836,680 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 168,477 -- 1,140,827 -- -- -- 523,103 -- 636 439,773 7,905,032 Total Operating Revenues 145,102,432 82,662,834 207,802,777 8,607,545 6,293,422 26,433,351 OPERATING EXPENSES Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation 17,379,558 495,620 -- 10,934,918 -- -- 100,965,659 10,278,367 447,708 -- -- 904,110 63,000 -- 105,908,900 1,334,098 -- -- -- -- -- -- 198,862,595 114,739 -- -- -- -- -- -- 947,587 123,290 -- -- -- -- -- -- 161,346 -- 347,818 -- -- 29,482 1,572,199 -- 1,305,463 -- Total Operating Expenses 140,054,122 108,657,816 198,977,334 1,070,877 161,346 3,254,962 Operating Income (Loss) $ 5,048,310 $ (25,994,982) $ 8,825,443 $ 7,536,668 $ 6,132,076 $ 23,178,389 The notes to the financial statements are an integral part of this statement. 60 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION COMPONENT UNITS FOR FISCAL YEAR ENDED JUNE 30, 2018 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues Income (Loss) Before Other Revenues, Expenses, Gains, or Losses Capital Grants and Gifts Other Additions to Permanent and Term Endowments Special Item University of Georgia Athletic Association, Inc. University of Georgia Foundation University of Georgia Research Foundation, Inc. University of North Georgia Real Estate Foundation, Inc. UWG Real Estate Foundation, Inc. University System of Georgia Foundation, Inc. $ --$ --$ --$ --$ --$ -- -- -- 27,020,882 3,357,675 (3,323,491) (18,690) -- -- -- 84,594,622 940,830 (2,373,000) -- -- -- 846,993 (10,613,517) 955,000 -- -- -- 143,280 (5,629,528) -- -- -- -- 145,203 (5,054,010) -- -- -- -- (33,889) (9,467,404) -- 27,036,376 83,162,452 (8,811,524) (5,486,248) (4,908,807) (9,501,293) 32,084,686 57,167,470 13,919 2,050,420 1,223,269 13,677,096 -- -- -- 55,915,213 -- -- -- -- (354,800) -- -- (2,734,622) -- -- -- 61,450 -- -- Total Other Revenues, Expenses, Gains or Losses -- 55,915,213 (354,800) (2,734,622) -- 61,450 Change in Net Position Net Position, Beginning of Year, Restated 32,084,686 238,003,989 113,082,683 1,122,855,779 (340,881) 93,354,632 (684,202) 8,741,062 1,223,269 3,522,149 13,738,546 1,455,188 Net Position, End of Year $ 270,088,675 $ 1,235,938,462 $ 93,013,751 $ The notes to the financial statements are an integral part of this statement. 8,056,860 $ 4,745,418 $ 15,193,734 2018 Annual Financial Report 61 UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION COMPONENT UNITS FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses Operating Income (Loss) The notes to the financial statements are an integral part of this statement. VSU Auxiliary Services Real Estate Foundation Elimination/ Consolidation Entries Total $ --$ -- -- -- 6,525,396 --$ -- -- -- -- 786,239,798 9,424,710 324,625,565 897,507,134 239,050,413 -- -- -- 95,811 -- 997,894 -- -- -- (10,416,184) -- -- 2,051,622 -- 145,102,432 186,311,575 11,709,468 30,670,655 7,619,101 (10,416,184) 2,632,693,372 -- -- -- -- -- -- 1,057,665 -- -- 317,351,162 -- 35,930,565 -- 146,007,768 -- 21,216,095 -- 35,598,112 -- 8,698,909 -- 1,887,866,213 -- 69,526,145 1,057,665 -- 2,522,194,969 $ 6,561,436 $ (10,416,184) $ 110,498,403 62 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION COMPONENT UNITS FOR FISCAL YEAR ENDED JUNE 30, 2018 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues Income (Loss) Before Other Revenues, Expenses, Gains, or Losses Capital Grants and Gifts Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses Change in Net Position Net Position, Beginning of Year, Restated Net Position, End of Year The notes to the financial statements are an integral part of this statement. VSU Auxiliary Services Real Estate Foundation Elimination/ Consolidation Entries Total $ --$ --$ 29,932,138 -- -- -- 117,980 (6,136,629) -- -- 3,083,581 -- 3,227,028 -- 27,553,141 -- 297,873,509 -- (129,583,788) -- (7,174,161) (6,018,649) -- 224,911,448 542,787 (10,416,184) 335,409,851 -- -- 10,107,077 -- -- 104,721,950 -- -- (7,885,377) -- -- -- 106,943,650 542,787 6,881,231 (10,416,184) (2,505,557) 442,353,501 4,195,390,757 $ 7,424,018 $ (12,921,741) $ 4,637,744,258 2018 Annual Financial Report 63 64 University System of Georgia Notes to the Financial Statements UNIVERSITY SYSTEM OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2018 Note 1 Summary of Significant Accounting Policies Nature of Operations The University System of Georgia (USG) serves the state and national communities by providing its students with academic instruction that advances fundamental knowledge and by disseminating knowledge to the people of Georgia, the nation, and throughout the world. Reporting Entity The USG, an organizational unit of the State of Georgia primary government (State), is comprised of twenty-six (26) State-supported member institutions of higher education in Georgia, the University System Office (USO), the Georgia Archives and the Georgia Public Library System. The USO also is the custodian of the Board of Regents Retiree Health Benefit Fund and the Deferred Compensation Plan. Augusta University, an organizational unit of the USG, is the custodian of the Early Retirement Plan. The Board of Regents of the University System of Georgia (Board) has constitutional authority to govern, control and manage the USG. The Board was created in 1931 as a part of a reorganization of Georgia's state government. With this act, public higher education in Georgia was unified for the first time under a single governing and management authority. The governor appoints members to the Board, who each serve seven years; regents may be reappointed to subsequent terms by a sitting governor. Regents donate their time and expertise to serve the State through their governance of the USG - the positions are voluntary ones without financial remuneration. Today, the Board is composed of 19 members, five of whom are appointed from the state-at-large, and one from each of the 14 congressional districts. The Board elects a chancellor who serves as its chief executive officer and the chief administrative officer of the USG. The USG does not have the right to sue/be sued without recourse to the State. The USG's property is the property of the State and subject to all the limitations and restrictions imposed upon other property of the State by the Constitution and laws of the State. In addition, the USG is not legally separate from the State. Accordingly, the USG is included within the State's basic financial statements as part of the primary government as defined in Section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards. The accompanying basic financial statements are intended to supplement the State's Comprehensive Annual Financial Report (CAFR) by presenting the financial position and changes in financial position and cash flows of only that portion of the business-type activities of the State that is attributable to the transactions of the USG. In addition, certain discretely presented component units of the State, as discussed below, have been included since they have been determined to be essential to the fair presentation to these departmental financial statements. These financial statements do not purport to, and do not, present fairly the financial position of the State as of June 30, 2018, the changes in its financial position or its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. The accompanying basic financial statements should be read in conjunction with the State's CAFR. The most recent State of Georgia CAFR can be obtained through the State Accounting Office, 200 Piedmont Avenue, Suite 1604 (West Tower), Atlanta, Georgia 30334 or online at sao.georgia.gov/comprehensive-annual-financial-reports. Discretely Presented Component Units The below organizations are legally separate, tax-exempt component units of the State. Although the State (primary government) is not fiscally accountable for these entities, it has been determined that the nature and significance of the relationship between the primary government and the below organizations is such that exclusion from these departmental financial statements would render them misleading. The below organizations met the requirements for discrete presentation as defined by GASB Codification Sections 2100 and 2600. Each of the below organization's fiscal year ends on June 30 each year, except for VSU Auxiliary Services Real Estate Foundation, Inc. VSU Auxiliary Services Real Estate Foundation, Inc.'s fiscal year ends December 31 each year. Separately issued financial statements are available from the following addresses. 66 University System of Georgia Augusta University Foundation, Inc. and Subsidiaries, 1120 15th Street, FI-1049, Augusta, GA, 30912 Augusta University Research Institute, Inc., 1120 15th Street, AA 311, Richmond, Augusta, GA, 30912 AU Health Systems, Inc. d/b/a AU Health System, 1120 15th Street. FY139, Augusta, GA 30912 Georgia Advanced Technology Ventures, Inc. and Subsidiaries, 221 Uncle Heinie Way, Lyman Hall Suite 325, Atlanta, GA, 30332-0257 or found at gatv.gatech.edu/financial-statements Georgia College & State University Foundation, Inc. and Subsidiaries, 231 W Hancock St., CBX 96, Milledgeville, GA, 30161 Georgia Gwinnett College Foundation, Inc., 1000 University Center Lane, Lawrenceville, GA, 30043 Georgia Health Sciences Foundation, Inc., 1120 15th Street, FI-1047, Augusta, GA 30912 Georgia Southern University Housing Foundation, Inc. and Subsidiaries, P.O. Box 8020, Statesboro, GA 30460 Georgia State University Athletic Association, Inc., 125 Decatur Street, Atlanta, Georgia, 30303 Georgia State University Foundation, Inc., Attn: Dale Palmer, GSU Foundation, 533 One Park Place, Atlanta, GA 30301-2668 Georgia State University Research Foundation, Inc., 100 Auburn Avenue, Suite 315, Fulton, Atlanta, GA, 30303 Georgia Tech Athletic Association, 150 Bobby Dodd Way, NW, Atlanta, GA 30332-0455 or found at finservices.gatech.edu/affiliated-organization-financial-statements Georgia Tech Facilities, Inc., 221 Uncle Heinie Way, NW, Lyman Hall Suite 325, Atlanta GA 30332-0257 or found at gtfi.gatech.edu/financial-statements Georgia Tech Foundation, Inc., 760 Spring Street, NW, Suite 400, Atlanta, GA 30308 or found at gtf.gatech.edu/ financial-statements Georgia Tech Research Corporation, 505 10th Street, Atlanta, GA 30332-0415 or found at gtrc.gatech.edu/ gtrc/documents/financial-information Kennesaw State University Foundation, Inc., 3391 Town Point Drive, Suite 4530/Mail drop 9101, Kennesaw, GA 30144 Medical College of Georgia Foundation, Inc., 545 15th Street, Augusta, GA 30901 Middle Georgia State University Real Estate Foundation, Inc. and Subsidiaries, 100 University Pkwy, Macon, GA 31206 University of Georgia Athletic Association, Inc., 456 E. Broad Street, Athens, GA 30602 The University of Georgia Foundation, 394 S. Milledge Ave, Suite 100, Athens, GA 30602 University of Georgia Research Foundation, Inc. and Subsidiaries, 324 Business Services Building, 456 E. Broad Street, Athens, GA 30602 University of North Georgia Real Estate Foundation, Inc. and Subsidiaries, 110 South Chestatee Street, Suite 320, Dahlonega, GA 30597 University System of Georgia Foundation, Inc. and Affiliates, 270 Washington Street, SW Suite 7007, Atlanta, Ga 30334 UWG Real Estate Foundation, Inc., 1601 Maple St, Carrollton, GA 30118 VSU Auxiliary Services Real Estate Foundation, Inc., 1500 N. Patterson St, Valdosta, GA 31698 See Component Unit Note for additional information related to discretely presented component units. 2018 Annual Financial Report 67 Basis of Accounting and Financial Statement Presentation The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entity-wide perspective of the USG's assets, deferred outflows, liabilities, deferred inflows, net position, revenues, expenses, changes in net position and cash flows. The USG's business-type activities and fiduciary fund financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. Grants and similar items are recognized as revenues in the fiscal year in which eligibility requirements imposed by the provider have been met. All significant intra-fund transactions have been eliminated. The USG reports the following Fiduciary Funds: Pension and Other Post Employment Benefit Trust Funds - Accounts for the activities of the Early Retirement Plan, the Board of Regents Retiree Health Benefit Fund and the Deferred Compensation Fund. New Accounting Pronouncements For fiscal year 2018, the USG adopted GASB Statement No. 86, Certain Debt Extinguishment Issues. This Statement addresses accounting and financial reporting issues regarding in-substance defeasance of debt. The adoption of this Statement does not have a significant impact on the USG's financial statements. For fiscal year 2018, the USG adopted GASB Statement No. 85, Omnibus 2017. This Statement addresses practice issues identified during implementation and application of certain other GASB Statements. This Statement addresses a variety of topics including issues related to blending component units, goodwill, fair value measurement and application, and post employment benefits. The adoption of this Statement does not have a significant impact on the USG's financial statements. For fiscal year 2018, the USG adopted GASB Statement No. 81, Irrevocable Split-Interest Agreements. The objective of this Statement is to improve accounting and financial reporting for irrevocable split-interest agreements by providing recognition and measurement guidance for situations in which a government is a beneficiary of the agreement. The adoption of this Statement does not have a significant impact on the USG's financial statements. For fiscal year 2018, the USG adopted GASB Statement No. 75, Accounting and Financial Reporting for Post Employment Benefit Plans Other Than Pension Plans. This Statement replaces GASB Statements No. 45, Accounting and Financial Reporting for Post Employment Benefit Plans Other Than Pension Plans, as amended, and No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans. The objective of this Statement is to improve the usefulness of information about post-employment benefits other than pensions. The adoption of this Statement resulted in the accrual of the net other post-employment benefit (OPEB) liability for the Board of Regents Retiree Health Benefit Plan, changes to the related OPEB note disclosures, additional OPEB required supplemental information, and the restatement of the July 1, 2017 net position balance for business-type activities. Cash and Cash Equivalents Cash and cash equivalents consist of petty cash, demand deposits and time deposits in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts. This includes the State Investment Pool (Georgia Fund 1) and the Board of Regents Short-Term Investment Pool. Cash and Cash Equivalents that cannot be used to pay current liabilities are classified as non-current assets in the Statement of Net Position. Cash and Cash Equivalents restricted as to use by a third party are reported as externally restricted. Short-Term Investments Short-Term Investments consist of investments of 90 days - 13 months. These include certificates of deposits or other time-restricted investments with original maturities of six months or more when purchased. Funds are not readily available and there is a penalty for early withdrawal. Short-term investments that cannot be used to pay current liabilities are classified as non-current assets in the Statement of Net Position. Short-term investments restricted as to use by a third party are reported as externally restricted. Investments Investments include financial instruments with terms in excess of 13 months, certain other securities for the production of revenue, land, and other real estate held as investments by endowments. The USG accounts for its investments at 68 University System of Georgia fair value. Changes in the fair value of investments are reported as a component of investment income in the Statement of Revenues, Expenses, and Changes in Net Position. The Board of Regents Legal Fund, the Board of Regents Balanced Income Fund, the Board of Regents Total Return Fund, the Board of Regents Diversified Fund, and the Board of Regents Diversified Fund for Foundations are included as investments. Investments that cannot be used to pay current liabilities are classified as non-current assets in the Statement of Net Position. Investments restricted as to use by a third party are reported as externally restricted. Accounts Receivable Accounts receivable consists of tuition and fees charged to students and auxiliary enterprise services provided to students, faculty and staff, the majority of whom reside in the State of Georgia. Accounts receivable also includes amounts due from federal, state and local governments, or private sources, in connection with reimbursement of allowable expenditures made pursuant to the USG's grants and contracts. Accounts receivable are recorded net of estimated uncollectible amounts. Inventories Consumable supplies are carried at the lower of cost or market on the first-in, first-out ("FIFO") basis. Resale inventories are valued at cost using the average-cost basis. Prepaid Items Payments made to vendors and state and local government organizations for services that will benefit periods beyond June 30, 2018 are recorded as prepaid items. Capital Assets Capital assets are recorded at cost at the date of acquisition, or fair market value at the date of donation in the case of gifts. For equipment, the USG's capitalization policy includes all items with a unit cost of $5,000 or more, and an estimated useful life of greater than one year. Renovations to buildings, infrastructure, and land improvements that exceed $100,000 and/or significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation, which also includes amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, and copyrights, as well as software, is computed using the straight-line method over the estimated useful lives of the assets, generally 40 to 60 years for buildings, 20 to 25 years for infrastructure and land improvements, 10 years for library books, and 3 to 20 years for equipment. Residual values will generally be 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements. To fully understand plant additions in the USG, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) - an organization that is external to the USG. GSFIC issues bonds for and on behalf of the State of Georgia, pursuant to powers granted to it in the Constitution of the State of Georgia and the Act creating the GSFIC. The bonds so issued constitute direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged. For projects managed by GSFIC, GSFIC retains construction in progress in its accounting records throughout the construction period and transfers the entire project to the institutional unit of the University System when complete. For projects managed by institutions of the USG, the institutions retain construction in progress on their books and are reimbursed by GSFIC. Capital Liability Reserve Fund The Capital Liability Reserve Fund (Fund) was established by the Board of Regents to protect the fiscal integrity of the USG to maintain the strongest possible credit ratings associated with Public Private Venture (PPV) projects and to ensure that the Board of Regents can effectively support its long-term capital lease obligations. All USG institutions participating in the PPV program finance the Fund. The Fund serves as a pooled reserve that is managed by the Board of Regents. The Fund shall only be used to address significant shortfalls and only insofar as a requesting USG institution is unable to make the required PPV capital lease payment to the designated affiliated organization. The Fund will continue as long as the Board of Regents has rental obligations under the PPV program and at the conclusion of the program, funds will be returned to each institution. See Note 10 for additional information. Deferred Outflows of Resources Deferred outflows of resources consist of the consumption of net position that is applicable to a future reporting period. 2018 Annual Financial Report 69 Deposits Deposits represent good faith deposits from students to reserve housing assignments, meal plans or other auxiliary services. Advances Advances include amounts received for tuition and fees and certain auxiliary activities prior to the end of the fiscal year but related to the subsequent accounting period. Advances also include amounts received from grant and contract sponsors that have not yet been earned. Deposits Held for Other Organizations Deposits held for other organizations result primarily from the USG acting as an agent or fiduciary for another entity. Deposits held for others include scholarships, fellowships, study abroad deposits and other funds held for various governments, companies, clubs or individuals. Claims and Judgments An estimated loss from claims and judgments is recognized when information available prior to issuance of the financial statements indicates it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Pollution Remediation Obligations Pollution remediation obligations are recorded when the USG knows that a site is polluted and one or more obligating events have occurred. The amount recorded is an estimate of the current value of potential outlays for cleanup, calculated using the "expected cash flows" measurement technique. Compensated Absences Employee vacation pay is accrued at the end of the fiscal year for financial statement purposes. The liability and expense incurred are recorded at the end of the fiscal year as compensated absences in the Statement of Net Position, and as a component of compensation and benefit expense in the Statements of Revenues, Expenses, and Changes in Net Position. Non-current Liabilities Non-current liabilities include: (1) liabilities that will not be paid within the next fiscal year; (2) capital lease obligations with contractual maturities greater than one year; and (3) other liabilities that, although payable within one year, are to be paid from funds that are classified as non-current assets. Deferred Inflows of Resources Deferred inflows of resources consist of the acquisition of net position that is applicable to a future reporting period. Other Post-Employment Benefit (OPEB) For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the Board of Regents Retiree Health Benefit Plan and the State Employees' Assurance Department Retired and Vested Inactive Members Trust Fund. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Pensions and Net Pension Liability The net pension liability represents the USG's proportionate share of the difference between the total pension liability as a result of the exchange for employee services for compensation and the fiduciary net position or the fair value of the plan assets as of a given measurement date. For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plans' fiduciary net position, additions to/ deductions from the plans fiduciary net position have been determined on the same basis as they are reported by Teachers Retirement System of Georgia, Employees' Retirement System of Georgia, and Augusta University Early Retirement Pension Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 70 University System of Georgia Service Concession Arrangements Service concession agreements are arrangements between a government (transferor, one of our institutions) and a third party (operator) in which all of the following criteria are met: a) The institution conveys to the operator the right and obligation to provide public services through the use and operation of a capital asset in exchange for significant consideration. Significant consideration could be in the form of up front payments, installment payments, a new facility or improvements to existing facility. b) The operator collects and is compensated by fees from third parties. c) The institution has the ability to modify or approve what services the operator is required to provide, to whom services are provided, and prices or rates that can be charged for those services. d) The institution is entitled to significant residual interest in the service utility of the asset at the end of the arrangement. Net Position The USG's net position is classified as follows: Net Investment in capital assets represents the USG's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets. The term "debt obligations" as used in this definition does not include debt of the GSFIC as discussed previously in Note 1 - Capital Assets section. Restricted - nonexpendable net position includes endowments and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal. For institution-controlled, donor-restricted endowments, the by-laws of the Board of Regents of the University System of Georgia permits each individual institution to use prudent judgment in the spending of current realized and unrealized endowment appreciation. Donor-restricted endowment appreciation is periodically transferred to restricted - expendable accounts for expenditure as specified by the purpose of the endowment. Each institution maintains pertinent information related to each endowment fund including donor; amount and date of donation; restrictions by the source of limitations; limitations on investments, etc. Restricted - expendable net position includes resources in which the USG is legally or contractually obligated to spend resources in accordance with restrictions by external third parties. Unrestricted net position represents resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the USG, and may be used at the discretion of the governing board or management to meet current expenses for those purposes, except for unexpended state appropriations (surplus). Unexpended state appropriations must be refunded to the Office of the State Treasurer. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff. When an expense is incurred that can be paid using either restricted or unrestricted resources, the USG's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources. Income Taxes The USG, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended. Classification of Revenues and Expenses The Statement of Revenues, Expenses and Changes in Net Position classifies fiscal year activity as operating and nonoperating according to the following criteria: Operating revenue includes activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship allowances, (2) certain federal, state and local grants and contracts, and (3) sales and services. Nonoperating revenue includes activities that have the characteristics of non-exchange transactions, such as gifts and contributions, and other revenue sources that are defined as non-operating revenue by GASB 2018 Annual Financial Report 71 Statements No. 9, Reporting Cash Flows of Proprietary and Non-expendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and No. 34, Basic Financial Statements--and Management's Discussion and Analysis--for State and Local Governments, such as state appropriations and investment income. Operating expense includes activities that have the characteristics of exchange transactions. Nonoperating expense includes activities that have the characteristics of non-exchange transactions, such as capital financing costs and costs related to investment activity. Scholarship Allowances Scholarship allowances are the difference between the stated charge for goods and services provided by the USG, and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs are recorded as either operating or non-operating revenues in the USG's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the USG has recorded contra revenue for scholarship allowances. Restatement of Prior Year Net Position The USG made the following restatements: Net position, beginning of year, as originally reported Business-type Activities Discretely Presented Component Units $ 3,092,594,112 $ 4,230,860,131 Changes in financial reporting entity Changes in accounting principles Adoption of GASB Statement No. 75 Removal of capital assets also reported by University of Georgia Athletic Association, Inc. Correction of prior year errors Lease purchase obligations Allowance for doubtful accounts receivable Accrued interest (1,485,461,759) (226,242,587) 6,659,425 (2,925,432) (2,680,943) (33,171,000) 382,569 Net position, beginning of year, restated $ 1,384,623,759 $ 4,195,390,757 Changes in Financial Reporting Entity The determination was made that Georgia State University Athletic Association, Inc. met the requirements for inclusion as a discretely presented component unit. The effect of this determination was an increase to discretely presented component unit beginning net position in the amount of $1,460,669. The determination was made that Kennesaw State University Athletic Association, Inc. no longer met requirements for inclusion as a discretely presented component unit. The effect of this determination was a decrease to discretely presented component unit beginning net position in the amount of $3,699,504. AU Health System, a discretely presented component unit, completed a series of corporate and governance changes during the fiscal year. As part of this reorganization, AU Medical Associates, Inc. became a blended component unit of AU Health System and MCGH/PPG Repoductive Lab, LLC was merged into AU Health Systems. The Health System has restated its financial statements for this change in reporting entity. The result is a decrease to discretely presented component unit beginning net position in the amount of $442,108. See Note 20 - Component Units for additional information. 72 University System of Georgia Changes in accounting principles The USG made prior period adjustments due to the adoption of GASB Statement No. 75, which required the restatement of the June 30, 2017, net position. The result is a decrease in Net Position at July 1, 2017 of $1,485,461,759 of which $1,586,387,908 is represented in net OPEB liability, $1,342,206 is represented in other assets (net OPEB asset) and $99,583,943 is represented in deferred outflow. This change is in accordance with generally accepted accounting principles. AU Health Systems, a discretely presented component unit, made prior period adjustments due to the adoption of GASB Statement No. 75, which required the restatement of the June 30, 2017, net position. The result is a decrease in Net Position at July 1, 2017 of $33,171,000. This change is in accordance with generally accepted accounting principles. Removal of capital assets also reported by University of Georgia Athletic Association, Inc. The University of Georgia Athletic Association, Inc. (the Athletic Association) has an agreement with the USG whereby expenses for additions and improvements to University of Georgia owned buildings, stadium, and athletic fields used by the Athletic Association become the property of the University of Georgia upon installation or acquisition. The Athletic Association leases these athletic facilities from the USG for $1 million per year under the current operating lease agreement, which expires June 30, 2022. The Athletic Association has capitalized expenses for additions and improvements to the buildings, stadium, and athletic fields owned by the University of Georgia and used by the Athletic Association. For fiscal year 2018, the USG made a prior period adjustment to remove capital assets owned by the University of Georgia that are also reported by the University of Georgia Athletic Association, Inc. for presentation purposes. Special Items Significant transactions or other events within the control of management that are either unusual in nature or infrequent in occurrence are considered special items. Georgia Institute of Technology changed their capital asset capitalization threshold, which resulted in a net reduction in capital assets of $21,437,060. On April 30, 2018, the Georgia Southern University Housing Foundation, Inc. defeased the debt associated with the ASU Student Recreation Center, LLC Series 2015 bond. The related capital leases between the Georgia Southern Housing Foundation, Inc. and the University were terminated resulting in a special item of $1,425,076 reported on the Statement of Revenues, Expenses and Changes in Net Position. On January 11, 2018, the Board of Regents accepted a gift of approximately 5.669 acres of real property, located at 445 Capitol Ave, Atlanta, GA 30315, from the Georgia Building Authority for the use and benefit of Georgia State University. The land and improvements, formerly known as the Department of Juvenile Justice Parking Lot, are valued at $2,129,900 and $13,760 respectively. Middle Georgia State University transferred property to Central Georgia Technical College in fiscal year 2018 consisting of land, buildings, and equipment with a net book value of $12,533,158. The remaining special item of $116,656 related to the transfer of equipment outside of the State's reporting entity. 2018 Annual Financial Report 73 Note 2 Deposits and Investments Cash and cash equivalents and investments as of June 30, 2018 are classified in the accompanying statement of net position and statement of fiduciary net position as follows: Statement of Net Position Current Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Noncurrent Investments Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Statement of Fiduciary Net Position Cash and Cash Equivalents Investments $ 1,345,123,209 213,067,505 66,457,356 537,765 197,905,258 11,970,725 38,726 243,981,033 26,135,941 163,058,622 $ 2,268,276,140 Cash on hand, deposits and investments as of June 30, 2018 consist of the following: Cash on Hand Deposits with Financial Institutions Investments Pooled Assets Held on Behalf of Component Units $ 2,562,705 709,126,349 1,671,691,317 (115,104,231) $ 2,268,276,140 A. Deposits with Financial Institutions Deposits include certificates of deposits and demand deposit accounts, including certain interest bearing demand deposit accounts. The custodial credit risk for deposits is the risk that in the event of a bank failure, the USG's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the USG) cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the Official Code of Georgia Annotated (O.C.G.A.) 50-17-59: 1. Bonds, bills, notes, certificates of indebtedness, or other direct obligations of the United States or of the State of Georgia. 2. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia. 3. Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose. 4. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia. 74 University System of Georgia 5. Bonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association and the Federal National Mortgage Association. 6. Letters of credit issued by a Federal Home Loan Bank. 7. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. The USG participates in the State's Secure Deposit Program (SDP), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered Deposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased to amount of up to 125% if economic or financial conditions warrants. The program lists the type of eligible collateral. The OST approves authorized custodians. In accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository's collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully collateralized. At June 30, 2018, the bank balances of the USG's deposits totaled $760,923,047. This balance includes deposits in Fiduciary funds as these balances are not separable from the holdings of the USG. Of these deposits, $20,108,387 were exposed to custodial credit risk as follows: Uninsured and uncollaterized $ Uninsured and collateralized with securities held by the pledging financial institution Uninsured and collateralized with securities held by the pledging financial institution's trust departments or agents, but not in the Institution's name 350,449 -- 19,757,938 Total deposits exposed to custodial credit risk $ 20,108,387 Foreign Currency Risk Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment or a deposit. The USG has a formal policy for managing exposure to foreign currency credit risk by requiring a maximum balance in a single foreign account of $100,000 U.S. currency. The USG's exposure to foreign currency risk derives from deposits in foreign banks for operations of studies abroad programs. The deposits are uninsured and uncollateralized in the amount of $143,436 as follows: Program UGA - Oxford Program UGA Cortona Art Program Institution Barclay's Banca CR Firenze Currency British Pound European Euro U.S. Value $ 77,565 65,871 $ 143,436 B. Investments The USG maintains an investment policy which fosters sound and prudent judgment in the management of assets to ensure safety of capital consistent with the fiduciary responsibility it has to the citizens of Georgia and which conforms to Board of Regents investment policy. All investments are consistent with donor intent, Board of Regents policy and applicable federal and state laws. 2018 Annual Financial Report 75 GASB Statement No. 72, Fair Value Measurements and Application, which requires fair value measurement be classified and disclosed in one of the following three categories ("Fair Value Hierarchy"): Level 1 - Quoted prices are available in active markets for identical investments as of the reporting date. Level 2 - Pricing inputs are observable for the investments, either directly or indirectly, as of the reporting date, but are not the same as those used in Level 1; inputs include comparable market transactions, pricing of similar instruments, values reported by the administrator, and pricing expectations based on internal modeling. Fair value is determined through the use of models or other valuation methodologies. Level 3 - Pricing inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investments. The following table summarizes the valuation of the USG's investments measured at fair value on a recurring basis as of June 30, 2018. Fair Value Level 1 Fair Value Hierarchy Level 2 Level 3 Investment type: Debt Securities U.S. Treasuries U.S. Agencies Explicitly Guaranteed Implicitly Guaranteed Corporate Debt Guaranteed Investment Contracts Money Market Mutual Funds Municipal Obligations Mutual Bond Funds Other Investments Equity Mutual Funds - Domestic Equity Mutual Funds - International Equity Securities - Domestic Equity Securities - International Real Estate Held for Investment Purposes Real Estate Investment Trusts Other Investment Pools Office of the State Treasurer Georgia Fund 1 Total Investments $ 64,458,715 $ 64,458,715 $ --$ 183,678,003 346,924,734 181,302,954 1,061,901 13,163,309 1,004,000 140,280,260 234,334 52,074,903 11,383 -- 13,163,309 1,004,000 140,280,260 183,443,669 294,849,831 181,291,571 -- -- -- -- 130,447,101 57,654,114 144,553,511 351,442 6,312,978 1,077,732 646,316 130,447,101 57,654,114 144,553,505 117,147 -- 1,077,732 646,316 -- -- -- 234,295 -- -- -- 1,272,917,070 $ 605,722,819 $ 659,819,366 $ -- -- -- -- 1,061,901 -- -- -- -- -- 6 -- 6,312,978 -- -- 7,374,885 398,774,247 $ 1,671,691,317 Investments classified in Level 1 are valued using prices quoted in active markets for those securities. Investments classified in Level 2 are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices. Investments classified in Level 3 includes real estate funds that invest primarily in U.S. commercial real estate and guaranteed investment contracts. The fair values of real estate investments in this category have been estimated using the net asset value of the USG's ownership interest in partners' capital. Real estate investments are less liquid and, 76 University System of Georgia generally, cannot be redeemed with the funds through normal redemption procedures. Distributions from real estate investment funds will be received as the underlying investments of a fund are liquidated. Guaranteed investment contracts are valued by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the credit worthiness of the issuer. The USG holds positions in the Georgia Fund 1 investment pool managed by the Georgia Office of the State Treasurer. The unit of account is each share held, and the value of the position would be the fair value of the pool's share price multiplied by the number of shares held. The USG does not "look through" the pool to report a pro rata share of the pool's investments, receivables, and payables. Board of Regents Pooled Investment Program The USG serves as fiscal agent for various units of the University System of Georgia and affiliated organizations. The USG pools the monies of these organizations with the USG's monies for investment purposes. The investment pool is not registered with the SEC as an investment company. The fair value of the investments is determined daily. The pool does not issue shares. Each participant is allocated a pro rata share of each pooled investment fund balance at fair value along with a pro rata share of the pooled fund's investment returns. The USG maintains investment policy guidelines for each pooled investment fund that is offered to qualified University System participants. These policies are intended to foster the sound and prudent responsibility each institution has to the citizens of Georgia and which conforms to the Board of Regents investment policy. All investments must be consistent with donor intent, Board of Regents policy, and applicable Federal and state laws. Units of the University System of Georgia and their affiliated organizations may participate in the pooled investment fund program. The overall character of the pooled fund portfolio should be one of above average quality, possessing at most an average degree of investment risk. The Board of Regents' pooled investment fund options are described below. 1. Short-Term Fund The Short-Term Fund is available to both University System of Georgia institutions and their affiliated organizations. The Fund provides a current return and stability of principal while affording a means of overnight liquidity for projected cash needs. Investments are in securities allowed under O.C.G.A. 50-17-59 and 50-17-63. The average maturities of investments in this fund will typically range between daily and three years, and the fund will typically have an overall average duration of - 1 year. The overall character of the portfolio is of Agency quality, possessing a minimal degree of financial risk. The market value of the Short-Term Fund at June 30, 2018 was $553,297,754. 2. Legal Fund The Legal Fund is available to both University System of Georgia institutions and their affiliated organizations. The Fund provides an opportunity for greater return and modest principal growth to the extent possible with the securities allowed under O.C.G.A. 50-17-59 and 50-17-63. The average maturities of investments in this fund will typically range between three and five years, with a maximum of thirty years for any individual investment. The overall character of the portfolio is Agency quality, possessing a minimal degree of financial risk. The market value of the Legal Fund at June 30, 2018 was $11,418,702. 3. Balanced Income Fund The Balanced Income Fund is available to both University System of Georgia institutions and their affiliated organizations. The Fund is designed to be a vehicle to invest funds that are not subject to the state regulations concerning investing in equities. This pool is appropriate for investing longer term funds that require a more conservative investment strategy. Permitted investments in the fund are domestic US equities, domestic investment grade fixed income, and cash equivalents. The equity allocation shall range between 20% and 40%, with a target of 30% of the total portfolio. The fixed income (bond) portion of the portfolio shall range between 60% and 80%, with a target of 70% of the total portfolio. Cash reserves and excess income are invested at all times in the highest quality par stable (A1, P1) institutional money market mutual funds, or other high quality short term instruments. The market value of the Balanced Income Fund at June 30, 2018 was $86,911,293. 2018 Annual Financial Report 77 4. Total Return Fund The Total Return Fund is available to both University System of Georgia institutions and their affiliated organizations. The Fund is another pool designed to be a vehicle to invest funds that are not subject to state regulations concerning investing in equities. This pool offers greater overall equity exposure and is appropriate for investing longer term funds such as endowments. Permitted investments in the fund are domestic US equities, domestic investment grade fixed income, and cash equivalents. The equity allocation shall range between 60% and 80%, with a target of 70% of the total portfolio. The fixed income (bond) portion of the portfolio shall range between 20% and 40%, with a target of 30% of the total portfolio. Cash reserves and excess income are invested at all times in the highest quality par stable (A1, P1) institutional money market mutual funds, or other high quality short term instruments. The market value of the Total Return Fund at June 30, 2018 was $13,527,182. 5. Diversified Fund The Diversified Fund is available to both University System of Georgia institutions and their affiliated organizations. The Fund is designed to provide improved return characteristics with reduced volatility through greater diversification. This pool is appropriate for investing longer term funds such as endowments. Permitted investments in the fund may include domestic, international and emerging market equities, domestic fixed income and global fixed income. The equity allocation shall range between 60% and 80% of the portfolio, with a target of 70% of the total portfolio. The fixed income (bond) portion of the portfolio shall range between 20% and 40%, with a target of 30% of the total portfolio. Cash reserves and excess income are invested at all times in the highest quality par stable (A1, P1) institutional money market mutual funds, or other high quality short term instruments. The market value of the Diversified Fund at June 30, 2018 was $200,632,132. 6. Diversified Fund for Foundations The Diversified Fund for Foundations is available only to University System of Georgia affiliated organizations. Like the Diversified Fund, the fund is designed to provide improved return characteristics with reduced volatility through greater diversification and is appropriate for investing longer term funds such as endowments. Investments in the fund may include domestic, international and emerging market equities, domestic and global investment grade and non-investment grade fixed income and liquid alternative investments. The equity allocation shall range between 40% and 75% of the portfolio, with a target of 65% of the total portfolio. The fixed income (bond) portion of the portfolio shall range between 10% and 40% of the portfolio, with a target of 20% of the total portfolio. The alternatives portion of the portfolio shall range between 0% and 30% of the portfolio, with a target of 15% of the total portfolio. Cash reserves and invested income are invested at all times in the highest quality par stable (A1, P1) institutional money market funds, or other high quality short term instruments. The market value of the Diversified Fund for Foundations at June 30, 2018 was $60,992,842. 78 University System of Georgia Condensed financial information for the Board of Regents Pooled Investment Program is as follows: Statement of Net Position - June 30, 2018 Assets Pooled Investments* $ Receivables $ Distribution of Net Position USG Account Balance $ Component Units and Affiliated Organizations $ 925,082,039 1,697,866 926,779,905 755,264,370 171,515,535 926,779,905 * Pooled investments in the short-term fund are reported as cash and cash equivalents on the statements of net position and statement of fiduciary net position, except for $12,330,950 and $3,133,983 for discretely presented component units reported as short-term investments and investments, respectively. Statement of Changes in Net Position - June 30, 2018 Market Value Plus Accrued Income on July 1, 2017 $ Receipts Disbursements Administrative Expenses Distributions Investment Results Income Collected and Accrued Realized Gain/Loss on Assets Sold Change in Unrealized Gain/Loss Amortization (Short-Term Fund) Market Value Plus Accrued Income on June 30, 2018 $ 784,441,210 200,045,521 (876,828) (86,300,256) 17,498,020 15,396,537 (2,550,184) (874,115) 926,779,905 Office of the State Treasurer Investment Pool The Georgia Fund 1 Investment Pool, managed by the Office of the State Treasurer, is not registered with the Securities and Exchange Commission as an investment company, and the State does not consider Georgia Fund 1 to be a 2a7like pool. This investment is valued at the pool's share price, $1 per share. The Georgia Fund 1 Investment Pool is an AAAf rated investment pool by Standard and Poor's. The Weighted Average Maturity of the Fund is 10 days. 2018 Annual Financial Report 79 Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The USG's policy for managing interest rate risk attempts to match investments with expected cash requirements. Fair Value Less Than 3 Months 4-12 Months 1-5 Years 6-10 Years More Than 10 Years Investment type: Debt Securities U.S. Treasuries U.S. Agencies Explicitly Guaranteed Implicitly Guaranteed Corporate Debt Guaranteed Investment Contracts Money Market Mutual Funds Municipal Obligations Mutual Bond Funds $ 64,458,715 $ 35,150,288 $ 652,752 $ 26,005,208 $ 2,650,467 $ -- 183,678,003 346,924,734 181,302,954 1,061,901 13,163,309 1,004,000 140,280,260 127,793,443 209,769,946 9,688,079 -- 13,163,309 5,000 41,110 11,833,506 24,880,743 59,350,858 -- -- -- -- 14,762,405 65,207,308 112,065,644 -- -- 436,869 11,358,056 62,813 14,892,352 198,373 -- -- 287,402 54,074,954 29,225,836 32,174,385 -- 1,061,901 -- 274,729 74,806,140 931,873,876 $ 395,611,175 $ 96,717,859 $ 229,835,490 $ 72,166,361 $ 137,542,991 Other Investments Equity Mutual Funds - Domestic Equity Mutual Funds - International Equity Securities - Domestic Equity Securities - International Real Estate Held for Investment Purposes Real Estate Investment Trusts Other 130,447,101 57,654,114 144,553,511 351,442 6,312,978 1,077,732 646,316 Investment Pools Office of the State Treasurer Georgia Fund 1 398,774,247 Total Investments $ 1,671,691,317 Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the USG will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The USG's policy for managing custodial credit risk is: 1. The USG has appointed a federally regulated banking institution as custodian. The custodian performs its duties to the standards of professional custodian and is liable to the USG for claims, losses, liabilities and expenses arising from its failure to exercise ordinary care, its willful misconduct, or its failure to otherwise act in accordance with the contract. 2. All securities transactions are to be settled on a delivery vs. payment basis through an approved depository institution such as the Depository Trust Company or the Federal Reserve. 3. Repurchase agreements are to be collateralized by United States Treasury securities at 102% of the market value of the investment at all times. At June 30, 2018, $17,744,096 was uninsured and held by the investment's counterparty's trust department or agent, but not in the USG's name. Of this balance, $5,861,950 is related to the Deferred Compensation Fiduciary Fund. 80 University System of Georgia Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The USG's policy for managing credit quality risk is contained in the investment policy guidelines for the various pooled investment funds, colleges, universities, and foundations: 1. In the Short-Term Fund and Legal Fund, all debt issues must be eligible investments under O.C.G.A 50-17-59 and 50-17-63. Other investment portfolios of debt securities funds also must meet the eligible investment criteria under the same code section. 2. In the Balanced Income Fund, Total Return Fund, and Diversified Fund, total fixed income portfolios should have an average credit quality rating of at least A. Overnight investments shall be limited to high quality institutional money market mutual funds rated A1, P1 or other high quality short-term debt instruments rated at least AA+. 3. In the Diversified Fund for Foundations, fixed income investments include investment grade and high yield domestic bonds, dollar-and non-dollar denominated global bonds, and emerging market bonds. Overnight investments shall be limited to high quality institutional money market mutual funds rated A1, P1 or other high quality short-term debt instruments rated at least AA+. The investments subject to credit quality risk are reflected below: Fair Value AAA AA A BBB BB Unrated Related Debt Investments U. S. Agency Securities Corporate Debt Guaranteed Investment Contracts Money Market Mutual Fund Municipal Obligation Mutual Bond Fund $ 346,924,734 $ 345,519,348 $ 181,302,954 -- 1,061,901 13,163,309 1,004,000 140,280,260 -- 427,672 320,804 222,252 1,405,386 $ --$ 149,567 180,967,741 -- -- 352,030 34,796 -- -- 306,128 31,752 --$ 174,263 -- -- -- -- --$ -- -- 11,383 -- -- 25,038 8,363 1,061,901 12,735,637 -- 139,983,097 $ 683,737,158 $ 346,490,076 $ 1,941,779 $ 181,305,621 $ 174,263 $ 33,401 $ 153,792,018 The Early Retirement Plan Fiduciary Fund has $13,079,318 in mutual bond funds and $3,045,577 in money market mutual funds (cash and cash equivalents on the statement of fiduciary net position). These investments are not rated. The Deferred Compensation Fiduciary Fund has $1,130,861 in mutual bond funds, $1,061,901 in guaranteed investment contracts, and $4,731,089 in money market mutual funds (cash and cash equivalents on the statement of fiduciary net position). These investments are not rated. The Retiree Health Benefit Fiduciary Fund has $42,983,473 in mutual bond funds and $779,780 in money market mutual funds. These investments are reported as pooled investments on the statement of fiduciary net position and are not rated. Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The USG's policy requires diversification of investments to reduce overall portfolio risk while maintaining market rates of return. At June 30, 2018, approximately 9.61%, 10.58%, 7.06% and 5.53% of business-type activity and fiduciary fund investments were investments in Government National Mortgage Assn. notes and pools, Federal National Mortgage Assoc. notes and pools, Federal Home Loan Mortgage Corp. notes and pools, and Vanguard Institutional Index Fund, respectively. Specifically for the Deferred Compensation Fiduciary Fund, approximately 47.45%, 11.18%, 9.37%, 6.81% and 5.24% of the were invested in Federated Treasury Obligations Money Market Fund, TIAA traditional annuity, Fidelity Contrafund Fund, TIAA Real Estate Fund, Fidelity Strategic Income Fund, respectively. 2018 Annual Financial Report 81 See Note 14 - Retirement Plans for concentration of credit risk for the Early Retirement Plan. See Note 17 - PostEmployment Benefits Other Than Pension Benefits for concentration of credit risk for the Retiree Health Benefit Fund. Note 3 Accounts Receivable Accounts receivable consisted of the following at June 30, 2018: Business Type Activities Student Tuition and Fees Auxiliary Enterprises and Other Operating Activities Federal Financial Assistance Georgia Student Finance Commission Georgia State Financing and Investment Commission Due from Affiliated Organizations Due from Component Units Other Less: Allowance for Doubtful Accounts Net Accounts Receivable $ 70,685,795 82,496,446 70,473,727 18,241,520 16,815,253 16,242,849 219,507,624 127,375,328 621,838,542 44,220,046 $ 577,618,496 Note 4 Inventories Inventories consisted of the following at June 30, 2018: Consumable Supplies Merchandise for Resale $ 4,907,529 18,083,576 Total $ 22,991,105 Note 5 Notes and Loans Receivable The Federal Perkins Loan Program (the Program) comprises substantially all of the loans receivable at June 30, 2018. The Program provides for cancellation of a loan at rates of 10% to 30% per year up to a maximum of 100% if the participant complies with certain provisions. The Federal government reimburses the USG for amounts canceled under these provisions. As the USG determines that loans are uncollectible and not eligible for reimbursement by the federal government, the loans are written off and assigned to the U.S. Department of Education. The USG has provided an allowance for uncollectible loans, which, in management's opinion, is sufficient to absorb loans that will ultimately be written off. At June 30, 2018, the allowance for uncollectible loans was $2,253,035. 82 University System of Georgia Note 6 Capital Assets Changes in capital assets for the year ended June 30, 2018 are shown below: Capital Assets, Not Being Depreciated: Land Capitalized Collections Construction Work-in-Progress Software Development-in-Progress Total Capital Assets Not Being Depreciated (Restated) Balance July 1, 2017 Special Item and Other Transfers Additions Reductions Balance June 30, 2018 $ 405,224,031 $ 51,448,435 222,618,967 9,521,221 688,812,654 848,800 $ -- -- -- 848,800 3,788,920 $ 476,490 193,540,677 9,931,038 207,737,125 --$ -- 184,553,097 7,185,832 191,738,929 409,861,751 51,924,925 231,606,547 12,266,427 705,659,650 Capital Assets, Being Depreciated/Amortized: Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Library Collections Capitalized Collections Software Total Capital Assets Being Depreciated/Amortized 383,828,510 11,790,982,565 290,051,644 1,656,806,410 922,512,619 6,781,019 66,188,814 15,117,151,581 -- (11,500,000) 13,760 (35,308) -- -- -- (11,521,548) 22,638,578 436,908,474 16,562,326 143,520,825 33,092,657 -- 26,589,605 679,312,465 50,346,507 12,040,353 16,984,252 77,365,745 6,633,399 -- -- 163,370,256 356,120,581 12,204,350,686 289,643,478 1,722,926,182 948,971,877 6,781,019 92,778,419 15,621,572,242 Less: Accumulated Depreciation/Amortization Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Library Collections Capitalized Collections Software Total Accumulated Depreciation/Amortization 152,175,861 3,809,201,986 128,050,979 1,206,149,624 747,594,824 1,510,830 24,614,656 6,069,298,760 -- (274,809) -- (125,097) -- -- -- (399,906) 12,584,409 309,311,829 11,349,417 120,460,238 32,437,372 207,586 5,866,874 492,217,725 25,252,409 8,487,454 10,068,917 61,846,115 6,633,698 -- -- 112,288,593 139,507,861 4,109,751,552 129,331,479 1,264,638,650 773,398,498 1,718,416 30,481,530 6,448,827,986 Total Capital Assets, Being Depreciated/Amortized, Net 9,047,852,821 (11,121,642) 187,094,740 51,081,663 9,172,744,256 Capital Assets, net $ 9,736,665,475 $ (10,272,842) $ 394,831,865 $ 242,820,592 $ 9,878,403,906 The July 1, 2017 equipment and equipment accumulated depreciation balances have been increased $32,150 related to prior year errors. The net effect of this restatement on the July 1, 2017 capital asset balance is $0. The USG has received and transferred capital assets to various other entities within the State's reporting entity. The USG has reported these transactions as special items on the Statement of Revenues, Expenses and Changes in Net Position. See Note 1 - Special Items for additional information related to these transactions. For projects managed by GSFIC, GSFIC retains construction-in-progress on its books throughout the construction period and transfers the entire project to the USG when complete. For projects managed by the USG, the USG retains construction-in-progress on its books and is reimbursed by GSFIC. For the year ended June 30, 2018, GSFIC transferred capital additions from GSFIC managed projects valued at $197,105,351 to the USG. In addition, at June 30, 2018, GSFIC had construction in progress of approximately $190,189,072 for incomplete GSFIC managed projects for the USG. The University of Georgia Athletic Association, Inc. (the Athletic Association) has an agreement with the USG whereby expenses for additions and improvements to University of Georgia owned buildings, stadium, and athletic fields used by the Athletic Association become the property of the University of Georgia upon installation or acquisition. The Athletic Association leases these athletic facilities from the USG for $1 million per year under the current operating lease agreement, which expires June 30, 2022. The Athletic Association capitalizes expenses for additions and improvements to the buildings, stadium, and athletic fields owned by the University of Georgia and used by the Athletic Association. Therefore, these improvements to University of Georgia owned property are not reported as capital assets within the 2018 Annual Financial Report 83 University of Georgia's financial statements. The cost associated with these assets is $358,246,114 and associated accumulated depreciation is $103,869,307. Note 7 Advances (Including Tuition and Fees) Advances, including tuition and fees, consisted of the following at June 30, 2018: Prepaid Tuition and Fees Research Other - Advances Totals Current Liabilities $ 132,923,991 55,060,151 50,376,617 $ 238,360,759 Note 8 Long-Term Liabilities Changes in long-term liability for the year ended June 30, 2018 was as follows: (Restated) Balance July 1, 2017 Additions Reductions Balance June 30, 2018 Current Portion Lease Purchase Obligations $ 3,036,259,633 $ 61,327,143 $ 183,956,082 $ 2,913,630,694 $ 103,011,206 Other Liabilities Compensated Absences Net Pension Liability Notes and Loans Payable Claims and Judgments Net Other Post Employment Benefits Liability Pollution Remediation Total 220,236,041 3,147,202,798 9,504,296 2,690,393 4,202,453,802 1,228,430 7,583,315,760 173,130,137 1,929,853 -- -- 40,537,906 476,325 216,074,221 164,345,709 283,698,927 1,409,028 884,481 23,265,836 618,915 474,222,896 229,020,469 2,865,433,724 8,095,268 1,805,912 4,219,725,872 1,085,840 7,325,167,085 149,723,938 -- 1,437,861 800,662 -- 441,540 152,404,001 Total Long-Term Liabilities $ 10,619,575,393 $ 277,401,364 $ 658,178,978 $ 10,238,797,779 $ 255,415,207 The July 1, 2017 balance was restated $1,586,387,908 related to net OPEB liability and ($6,659,425) related to lease purchase obligations. See Note 1 - Restatement of Prior Year Net Position for additional information related to these transactions. 84 University System of Georgia Notes and Loans Payable The USG entered into a notes payable to secure Energy Performance Contracts. The interest rate for the notes vary between 2.003% to 2.04% and matures during fiscal year 2024. Below is the annual debt service related to the outstanding notes payable at June 30, 2018. Year Ending June 30: 2019 2020 2021 2022 2023 2024 through 2028 Principal Interest $ 1,437,861 $ 1,467,286 1,497,313 1,527,954 1,559,223 605,631 $ 8,095,268 $ 156,349 126,923 96,897 66,256 34,987 4,633 486,045 Pollution Remediation Pollution remediation obligations reflect estimates that have the potential to change due to such items as price increases or reductions, new technology, or changes in applicable laws or regulations. The University of Georgia is responsible for pollution remediation at the Milledge Avenue landfill site. USG has recorded a liability related to this pollution remediation in the amount of $822,800. The liability was determined using a fiveyear budget estimated provided by Brown and Caldwell. The University of Georgia does not anticipate any changes to the expected remediation outlay. There are no expected recoveries that have reduced this liability. Georgia Institute of Technology is responsible for pollution remediation at all Institute sites including, but not limited to ground contamination, storage/treatment/disposal of hazardous materials, and asbestos abatement. Pollution remediation obligations reflect estimates that have the potential to change due to such items as price increases or reductions, new technology, or changes in applicable laws or regulations. USG has recorded a liability related to this pollution remediation in the amount of $263,040. There are no expected recoveries that have reduced this liability. Note 9 Deferred Outflows and Inflows of Resources Deferred outflows and inflows of resources reported on the Statement of Net Position as of June 30, 2018, consisted of the following: Deferred Outflows of Resources Deferred Loss on Debt Refunding Deferred Loss on Defined Benefit Pension Plans (See Note 14) Deferred Loss on OPEB Plan (See Note 17) Total Deferred Outflows of Resources $ 38,323,970 574,541,276 260,989,734 $ 873,854,980 Deferred Inflows of Resources Deferred Gain on Debt Refunding Unavailable Revenues Deferred Service Concession Arrangements Deferred Gain on Defined Benefit Pension Plans (See Note 14) Deferred Gain on OPEB Plan (See Note 17) Total Deferred Inflows of Resources $ 60,355,063 37,834,403 579,577,921 71,745,559 289,436,186 $ 1,038,949,132 2018 Annual Financial Report 85 Deferred Loss/Gain on Debt Refunding The unamortized deferred gain or loss on debt refunding related to changes in the provisions of various leases that resulted from a refunding by the lessor of tax-exempt debt in which the a portion of the perceived economic advantages of the refunding where passed through to various units of the USG. Unavailable Revenues Resources from certain non-exchange transactions received before time requirements are met, but after all other eligibility requirements have been met, are reported as a deferred inflow of resources. Service Concessions Arrangements Kennesaw State University (KSU) At June 30, 2018, Kennesaw State University (KSU) was a participant in four Service Concession Arrangements. In August 2001, KSU entered into an agreement with KSUF whereby Kennesaw State University Foundation, Inc. (KSUF) will operate and collect revenues for housing operations from students. KSUF is required to operate the residence hall ("University Place") in accordance with a contractual agreement between the two parties. Under the terms of the agreement, the Institution received no funds upfront from KSUF, but will take full ownership of the residence hall at the end of the operating agreement in June, 2031. In August 2003, KSU entered into an agreement with KSUF whereby KSUF will operate and collect revenues for housing operations from students. KSUF is required to operate the housing ("University Village") in accordance with a contractual agreement between the parties. Under the terms of the agreement, the Institution received no funds upfront from KSUF, but will take full ownership of the housing at the end of the operating agreement in June 2034. In August 2007, KSU entered into an agreement with KSUF whereby KSUF will operate and collect revenues for housing operations from students. KSUF is required to operate the housing ("University Suites") in accordance with a contractual agreement between the parties. Under the terms of the agreement, the Institution received no funds upfront from KSUF, but will take full ownership of the housing at the end of the operating agreement in June 2037. In July 2017, KSU entered in to a lease agreement with a food service provider whereby the vendor will operate a restaurant in accordance with a contractual agreement between the two parties. Under the terms of the agreement, the Institution received no funds upfront, but will take full ownership of the equipment and lease improvements at the end of the operating agreement in June, 2027. At June 30, 2018, the University reports the three housing residences and one retail space as capital assets with a net carrying value of $60,611,645. For fiscal year 2018, the University reported a remaining deferred inflow of resources of $60,611,645 and amortized revenue of $3,641,327. Georgia Gwinnett College (GGC) On May 13, 2014, GGC entered into an agreement with Aramark Education Services, LLC (Aramark), whereby Aramark will operate food services operations from service participants. The agreement is renewable for each year for ten years. Aramark is required to operate the food service facilities in accordance with the contractual agreement. The contract includes a period fixed fee ("Annual Fixed Fee") payable to Aramark in the amount of $5.3 million per operating year. In the event that the amount paid to or retained by Aramark is less that the Annual Fixed Fee of $5.3 million, then GGC shall remit the amount equivalent to the difference of the Annual Fixed Fee minus Actual Operating Retainage. In the event that the actual operation year retainage is greater than 199.9% (upper threshold amount) of the Annual Fixed Fee, then Aramark shall remit the difference of the Annual Fixed Fee minus the upper threshold amount to GGC. If the actual operation year retainage is more than the Annual Fixed Fee but less than the 199.9% of the Annual Fixed Fee, then neither party shall owe anything to the other. GGC and Aramark will review the annual Fixed Fee prior to the commencement of each Operating Year and a revised Annual Fixed Fee shall be set forth in a written supplemental contract. Under the terms of the contract Aramark committed a lump sum upfront payment of $360,000. The amortized revenue recorded related to the lump sum payment in fiscal year 2018 was $36,000 and the remaining deferred inflow was $216,000. Under terms of the original agreement Aramark also committed $5,250,000 in dining facility renovations. In fiscal year 2017, the contract amendment called for a return of outstanding unamortized amounts of $1,615,483 and for a reduction 86 University System of Georgia of $704,805 to deferred inflows for uncollected funds. The amortized revenue recorded in fiscal year 2018 for the remaining construction commitment was $326,438 leaving deferred inflow balance of $1,958,629. For Fiscal Year 2018, GGC reported a total remaining Deferred Inflow of Resources of $2,174,629 related to the service concession arrangement. University System Office (USO) During fiscal year ended June 30, 2015, the Board of Regents of the University System of Georgia (BOR) entered into a Service Concession Arrangement (SCA) with Corvias Campus Living-USG,LLC, whereby Corvias Campus LivingUSG,LLC, manages, maintains and operates certain existing student housing resources on the campuses of nine institutions: Abraham Baldwin Agricultural College; Armstrong State University; Augusta University; College of Coastal Georgia; Columbus State University; Dalton State College; East Georgia State College; Georgia State University; and the University of North Georgia. Pursuant to the contractual stipulations of this SCA, whereby the BOR and Corvias Campus Living- USG, LLC, are the "parties" participating in this agreement, as of May 14, 2015, the institutions noted above transferred the housing resources covered by this SCA, along with associated capital lease obligations to the University System Office in fiscal year 2015 through Special Item Transfer. In accordance with the SCA, in May 2015, Corvias Campus Living-USG, LLC, provided $311,561,781 which the BOR used to retire the capital lease obligations transferred to the University System Office. On February 23, 2018, the SCA contractual agreement with Corvias Campus Living-USG, LLC, was amended. While performance measures and the operating agreement remain intact, the term of the agreement has changed. The SCA, which was originally for 65 years (780 months) to end in June 2080, will now end on June 30, 2055. This contract modification accelerates the amortization of the Deferred Inflows. For the $311,561,781 that was originally received from Corvias Campus Living-USG, LLC, in fiscal year 2015, $5,859,615 was amortized at June 30, 2018, leaving a remaining Deferred Inflow of Resources balance of $295,716,211 at year end. In addition to the existing student housing arrangement, Corvias Campus Living-USG, LLC designs and constructs authorized new housing projects that, once constructed, are similarly managed, maintained and operated on seven of the nine campuses with existing student housing resources. Two of these projects were completed in fiscal year 2016 and their fair market values were capitalized increasing Capital Assets by $23,110,655. In fiscal year 2017, five additional housing projects were completed and their fair market values were capitalized increasing Capital Assets by $154,415,645. A Deferred Inflow of Resources was recorded as the offset to the Capital Asset additions. The Deferred Inflows associated with these projects are being amortized over the remaining life of the SCA in accordance with the term revision noted above. At June 30, 2018, the University System Office amortized $3,398,953 of Deferred Inflows related to these seven projects, leaving a remaining Deferred Inflow of Resources balance of $171,534,376 at year end. Also, as part of this SCA, and beginning in fiscal year 2016, the University System Office receives $8,000,000 in Ground Rent and $500,000 in Supplemental Capital Repair and Replacement funds each year for the next ten years, with each amount escalating by 3% annually. The University System Office recorded Accounts Receivable and Deferred Inflow of Resources in the amount of $73,232,489 representing the present value of this revenue stream based on the agreement terms and will amortize the Deferred Inflows over a ten-year period. For the year ended June 30, 2018, the University System Office amortized $7,723,395 and recognized $1,294,255 in associated interest income, leaving a Deferred Inflow balance of $49,541,060 as of June 30, 2018. The University System Office also receives retained services funds each year as a percentage of gross revenues for that year. The University System Office has no reportable future obligation for these services. 2018 Annual Financial Report 87 Note 10 Net Position The breakdown of business type activity net position for the USG fund at June 30, 2018 is as follows: NET POSITION Net Investment in Capital Assets $ 6,666,852,110 Restricted for Nonexpendable Permanent Endowment 204,781,419 Expendable Sponsored and Other Organized Activities Federal Loans Institutional Loans Term Endowments Quasi-Endowments Capital Projects Sub-Total 123,562,652 36,303,187 26,204,356 205,999 20,261,122 11,658,263 218,195,579 Unrestricted Auxiliary Enterprises Operations Auxiliary Enterprises Renewals and Replacement Reserve Reserve for Encumbrances Reserve for Inventory Capital Liability Reserve Fund Health Insurance Reserve Other Unrestricted Sub-Total Total Net Position (91,764,124) 223,160,647 436,898,086 3,801,901 20,216,561 161,356,465 (6,236,985,185) (5,483,315,649) $ 1,606,513,459 Other unrestricted net position is reduced by $4,248,172,324 related to the recording of net OPEB liability, deferred gain on OPEB plan, and deferred loss on OPEB plan. Other unrestricted net position is also reduced by $2,362,638,007 related to the recording of net pension liability, deferred gain on defined benefit pension plans, and deferred loss on defined benefit pension plans. These OPEB and pension balances are mostly funded through state appropriation, student tuition, and fees that are subject to State surplus rules which prevents the accumulation of budgetary fund balance. Therefore, the USG is statutorily unable to maintain accumulated net position to offset these OPEB and pension balances. Note 11 Endowments Donor Restricted Endowments Investments of the USG's endowment funds are pooled, unless required to be separately invested by the donor. For USG controlled, donor-restricted endowments, where the donor has not provided specific instructions, the Board of Regents permits Institutions to develop policies for authorizing and spending realized and unrealized endowment income and appreciation as they determined to be prudent. Realized and unrealized appreciation in excess of the amount budgeted for current spending is retained by the endowments. Current year net appreciation for the endowment accounts was $15,127,940 and is reflected as expendable restricted net position. For endowment funds where the donor has not provided specific instructions, investment return of the USG's endowment funds is predicated on the total return concept. Annual payouts from the USG's endowment funds are based on a 88 University System of Georgia spending policy which limits spending between 3.0% and 6.0% of endowment principal market value. To the extent that the total return for the current year exceeds the payout, the excess is added to principal. If current year earnings do not meet the payout requirements, the USG uses accumulated income and appreciation from restricted expendable net asset endowment balances to make up the difference. For endowment funds where the donor has not provided specific instructions, investment return of the USG's endowment funds is predicated under classical trust doctrines. Unless the donor has stipulated otherwise, capital gains and losses are accounted for as part of the endowment principal and are not available for expenditure. For the current year, the USG did not incur investment losses that exceeded the related endowment's available accumulated income and net appreciation. Note 12 Significant Commitments See the Net Position note for amounts reserved for outstanding encumbrances at June 30, 2018. In addition to these encumbrances, the USG had other significant unearned outstanding construction or renovation contracts in the amount of $50,944,341 executed as of June 30, 2018. This amount is not reflected in the accompanying basic financial statements. Note 13 Leases Lease Obligations The USG is obligated under various capital and operating lease agreements for the acquisition or use of real property and equipment. Capital Leases The USG acquires certain real property and equipment through multi-year capital leases with varying terms and options. In accordance with O.C.G.A. 50-5-64, these agreements shall terminate absolutely and without further obligation at the close of the fiscal year in which it was executed and at the close of each succeeding fiscal year for which it may be renewed. These agreements may be renewed only by a positive action taken by the USG. In addition, these agreements shall terminate if the State does not provide adequate funding, but that is considered a remote possibility. The USG's principal and interest payments related to capital leases for fiscal year 2018 were $121,967,015 and $148,709,256, respectively. The USG has $2,379,885,386 in outstanding lease obligations due to component units. The USG has $413,931,031 in outstanding lease obligations due to affiliated organizations and other related party organizations. The following is a summary of the carrying values of assets held under capital lease at June 30, 2018: Description Leased Land and Land Improvements Leased Infrastructure Leased Equipment Leased Buildings and Building Improvements Leased Facilities and Other Improvements Leased Intangibles Total Assets Held Under Capital Lease Gross Amount Less: Accumulated Depreciation Net, Assets Held Under Capital Lease at June 30, 2018 Outstanding Balances per Lease Schedules at June 30, 2018 ( + ) ( - ) ( = ) $ 49,550,118 $ --$ 49,550,118 $ 43,077,196 39,705,000 15,008,490 24,696,510 34,115,891 27,034,613 13,758,482 13,276,131 13,809,658 3,425,337,863 990,631,338 2,434,706,525 2,812,027,080 6,457,991 2,763,564 3,694,427 4,943,730 2,120,088 106,004 2,014,084 1,380,832 $ 3,550,205,673 $ 1,022,267,878 $ 2,527,937,795 $ 2,909,354,387 Certain capital leases provide for renewal and/or purchase options. Generally purchase options at bargain prices of one dollar are exercisable at the expiration of the lease terms. 2018 Annual Financial Report 89 Operating Leases The USG leases land, facilities, office and computer equipment, and other assets. Some of these leases are considered for accounting purposes to be operating leases. Although lease terms vary, many leases are subject to appropriation from the General Assembly to continue the obligation. Other leases generally contain provisions that, at the expiration date of the original term of the lease, the USG has the option of renewing the lease on a year-to-year basis. Leases renewed yearly for a specified time period, i.e. lease expires at 12 months and must be renewed for the next year, may not meet the qualification as an operating lease. The USG's operating lease expense for fiscal year 2018 was $48,624,138 which includes payments to related parties of $23,964,864. The USG is obligated to pay these related parties a total of $24,056,324 in the next fiscal year. Future commitments for capital leases and for non-cancellable operating leases having remaining terms in excess of one year as of June 30, 2018, are as follows: Year Ending June 30: 2019 2020 2021 2022 2023 2024 through 2028 2029 through 2033 2034 through 2038 2039 through 2043 2044 through 2048 2049 through 2053 Real Property and Equipment Capital Leases Operating Leases $ 262,004,407 $ 261,883,913 262,368,928 262,901,416 260,878,813 1,306,386,564 1,203,246,520 840,895,527 269,279,570 10,515,335 3,095,406 56,640,426 52,339,716 48,140,794 42,554,429 41,355,474 149,978,489 104,762,965 5,474,755 717,397 663,580 530,864 Total minimum lease payments Less: Interest Less: Executory costs Principal Outstanding 4,943,456,399 $ 1,669,830,568 359,995,137 $ 2,913,630,694 503,158,889 . Note 14 Retirement Plans The USG participates in various retirement plans administered by the State of Georgia under two major retirement systems: Teachers Retirement System of Georgia (TRS) and Employees' Retirement System of Georgia (ERS). These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective administrative offices. The USG also provides two other retirement plans - the Augusta University Early Retirement Pension Plan and the Regents Retirement Plan. The significant retirement plans that the USG participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law. 90 University System of Georgia A. Teachers Retirement System of Georgia and Employees' Retirement System of Georgia General Information about the Teachers Retirement System Plan description All teachers of the USG as defined in O.C.G.A. 47-3-60 are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. TRS issues a publicly available financial report that can be obtained at trsga.com/ publications. Benefits Provided TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death. Contributions Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their annual pay during fiscal year 2018. USG's contractually required contribution rate for the year ended June 30, 2018 was 16.81% of annual the USG payroll. The USG's contributions to TRS totaled $303,975,717 for the year ended June 30, 2018. General Information about the Employees' Retirement System Plan description ERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can be obtained at ers.ga.gov/financials. Benefits provided The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees' Pension and Savings Plan (GSEPS). Employees under the old plan started membership prior to July 1, 1982 and are subject to plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are new plan members subject to modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS. Under the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60. Retirement benefits paid to members are based upon the monthly average of the member's highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also be made to members' benefits, provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS. 2018 Annual Financial Report 91 Contributions Member contributions under the old plan are 4% of annual compensation, up to $4,200, plus 6% of annual compensation in excess of $4,200. Under the old plan, the State pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these State contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The required contribution rate for the year ended June 30, 2018 was 24.81% of annual covered payroll for old and new plan members and 21.81% for GSEPS members. The rates include the annual actuarially determined employer contributions rate of 24.69% of annual covered payroll for old and new plan members and 21.69% for GSEPS members, plus a 0.12% adjustment for the HB 751 one time benefit adjustment of 3% to retired state employees. USG's contributions to ERS totaled $3,201,803 for the year ended June 30, 2018. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2018, the USG reported a liability for its proportionate share of the net pension liability for TRS and ERS. The net pension liability was measured as of June 30, 2017. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2016. An expected total pension liability as of June 30, 2017 was determined using standard roll-forward techniques. The USG's proportion of the net pension liability was based on contributions to TRS and ERS during the fiscal year ended June 30, 2017. At June 30, 2017, the USG's TRS proportion was 15.047800%, which was an increase of 0.179111% from its proportion measured as of June 30, 2016. At June 30, 2017, the USG's ERS proportion was 0.465664%, which was a increase of 0.024233% from its proportion measured as of June 30, 2016. For the year ended June 30, 2018, the USG recognized pension expense of $328,346,757 for TRS and $3,276,218 for ERS. At June 30, 2018, the USG reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: TRS Deferred Outflows of Resources Deferred Inflows of Resources ERS Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $ 104,613,059 $ 10,554,375 $ 207,231 $ 151 Changes of assumptions 61,306,694 43,056 Net difference between projected and actual earnings on pension plan investments -- 19,245,835 -- 47,092 Changes in proportion and differences between contributions and proportionate share of contributions 96,962,995 35,961,415 1,981,712 1,120,302 Contributions subsequent to the measurement date 303,975,717 -- 3,201,803 -- Total $ 566,858,465 $ 65,761,625 $ 5,433,802 $ 1,167,545 92 University System of Georgia The USG's contributions subsequent to the measurement date are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended June 30: TRS ERS 2019 2020 2021 2022 2023 $ 4,750,049 $ $ 167,257,176 $ $ 87,379,742 $ $ (64,564,573) $ $ 2,298,729 403,399 984,980 212,305 (536,230) Actuarial assumptions The total pension liability as of June 30, 2017 was determined by an actuarial valuation as of June 30, 2016 using the following actuarial assumptions, applied to all periods included in the measurement: Teachers Retirement System Inflation Salary increases Investment rate of return 2.75% 3.25% - 9.00%, average, including inflation 7.50%, net of pension plan investment expense, including inflation Postretirement mortality rates were based on the RP2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males) for service retirements and dependent beneficiaries. The RP2000 Disabled Mortality Table with future mortality improvement projected to 2025 with Society of Actuaries' projection scale BB (set forward two years for males and four years for females) was used for death after disability retirement. Rates of mortality in active service were based on the RP2000 Employee Mortality Table projected to 2025 with projection scale BB. The actuarial assumptions used in the June 30, 2016 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014. Employees' Retirement System Inflation 2.75% Salary increases 3.25 7.00%, including inflation Investment rate of return 7.50%, net of pension plan investment expense, including inflation Postretirement mortality rates were based on the RP2000 Combined Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB and set forward 2 years for both males and females for service retirements and dependent beneficiaries. The RP2000 Disabled Mortality Table with future mortality improvement projected to 2025 with Society of Actuaries' projection scale BB and set back 7 years for males and set forward 3 years for females was used for death after disability retirement. There is a margin for future mortality improvement in the tables used by the System. Based on the results of the most recent experience study adopted by the Board on December 17, 2015, the numbers of expected future deaths are 912% less than the actual number of deaths that occurred during the study period for service retirements and beneficiaries and for disability retirements. Rates of mortality in active service were based on the RP2000 Employee Mortality Table projected to 2025 with projection scale BB. The actuarial assumptions used in the June 30, 2016 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014. 2018 Annual Financial Report 93 The long-term expected rate of return on TRS and ERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of pension plan investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset class Fixed income Domestic large equities Domestic mid equities Domestic small equities International developed market equities International emerging market equities Alternatives Total TRS target allocation 30.00% 39.80% 3.70% 1.50% 19.40% 5.60% --% 100.00 % ERS target allocation 30.00% 37.20% 3.40% 1.40% 17.80% 5.20% 5.00% 100.00 % Long-term expected real rate of return* (0.50)% 9.00 % 12.00 % 13.50 % 8.00 % 12.00 % 10.50 % * Rates shown are net of the 2.75% assumed rate of inflation Discount rate The discount rate used to measure the total TRS and ERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and State of Georgia contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and ERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Institute's proportionate share of the net pension liability to changes in the discount rate: The following presents the USG's proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the USG's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate: Teachers Retirement System: Proportionate share of the net pension liability 1% Current 1% Decrease discount rate Increase 6.50% 7.50% 8.50% $ 4,589,679,973 $ 2,796,679,979 $ 1,319,650,977 Employees' Retirement System: Proportionate share of the net pension liability 1% Current Decrease discount rate 6.50% 7.50% $ 26,693,594 $ 18,912,176 $ 1% Increase 8.50% 12,274,387 Pension plan fiduciary net position Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS and ERS financial reports which are publically available at trsga.com/publications and ers.ga.gov/financials, respectively. 94 University System of Georgia B. Early Retirement Pension Plan Plan Description Augusta University Early Retirement Pension Plan (ERP) is a single-employer defined benefit pension plan administered by Findley, Inc., formerly Findley Davies/Bryan, Pendleton, Swats, and McAlister (BPS&M). The plan was derived by Augusta University as a means of workforce reduction and was approved by the Board of Regents of the University System of Georgia (BOR) effective January 1, 2000. The plan was designed to provide eligible participants additional benefits above the amounts payable through Teachers Retirement System of Georgia (TRS). The plan was designed to allow vested employees aged 55 or employees of any age with 25 years of creditable service to retire without penalties as applied by the TRS for early retirement. The plan would allow for all participants to retire as if they were vested and aged 60 or had attained 30 years of creditable service. Any member who opted into the Optional Retirement Plan aged 55 with 10 years of service by June 30, 2000 was also eligible to participate in the plan. The plan is closed to new entrants. There were no active plan participants. As of January 1, 2018, plan participants consisted of the following: Inactive Plan Participants: Retirees and Beneficiaries Currently Receiving Benefits 618 Terminated Employees Entitled to Deferred Benefits 0 Disabled Employees Entitled to Deferred Benefits 0 Total 618 Benefits Provided TRS provides a benefit equal to 2.0% of the participant's average annual compensation during the two consecutive years of creditable service which produce the highest such average, multiplied by the number of years of creditable service, limited to 40 years. If the participant has less than 30 years of creditable service and has not attained age 60 at the time of retirement, the benefit will be reduced by the lesser of 1/12 of 7% for each month that retirement precedes age 60 or 7% for each year or fraction of a year by which the participant has less than 30 years of creditable service at the time of retirement. In addition, a one-time 3% increase is applied to the first $37,500 of the participant's benefit at retirement. The ERP provides the additional benefits that would have been payable under TRS based on the following adjustments: Age of the participant was increased five years Participant's creditable service was increased five years Participant's annual rate of earnings as of August 1, 1999 was projected five years into the future with 3% increases each year ERP benefits will be increased 3% a year as a cost-of-living adjustment (COLA): 1.5% on each January 1 and July 1. The ERP provided COLA's for both the ERP and TRS benefits until actual eligibility for a COLA through TRS occurred. Since that time, the ERP has provided COLA's only on the portion of the benefit paid by the ERP, and TRS has provided COLA's under the terms of the TRS plan. The ERP does not issue a standalone report. Funding Policy The fund sources that provided for an employee's salary, as of December 31, 1999, would be responsible for funding the annuity to provide for retiree benefits. There is no additional cost to the employee/retiree, USG, or State of Georgia for this plan. Contributions are made by Augusta University based on the actuarial valuation of the plan. For fiscal year 2018, affiliated organizations contributed $5,886,802 to the plan on-behalf of the University. Since this plan was not pre-funded, Augusta University's approach is to collect and deposit as much into the ERP fund in the earlier years as is possible, thereby, realizing a greater return on investment. Effective January 1, 2016, the period to amortize the unfunded accrued liability was extended 2 years. With this change, the plan should be fully 2018 Annual Financial Report 95 funded by June 30, 2025. The funding policy is reasonable and in compliance with minimum funding requirements set forth in Code Section 47-20-10 of the Public Retirement Systems Standards Law. Investments Augusta University maintains an investment policy which fosters sound and prudent judgment in the management of assets to ensure safety of capital consistent with the fiduciary responsibility of the institution to the citizens of Georgia and which conforms to the USG investment policy. All investments are consistent with USG policy and applicable Federal and state laws. Investments are reported at fair value. Securities traded on a national or international exchange are valued at the last reported sales price. The Augusta University's Investment Policy and Guidelines for managing concentration of credit risk requires that stocks and debt issues be diversified. Augusta University also relies upon the concentration of credit risk policy of the individual investment vehicles related to plan assets. More than 5% of the Pension Plan's Investments are in Western Asset Core Plus Bond Fund, Vanguard Institutional Index Fund, iShares Russell 1000 Value Exchangetraded Fund (ETF), and iShares Russell 1000 Growth ETF. These investments are 5.52%, 40.48%, 7.69%, and 8.73% respectively of the Plan's total investments. For the fiscal year ended June 30, 2018, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 10.42%. Net Pension Liability (NPL) The components of the net pension liability at June 30, 2018 were as follows: Total pension liability Plan fiduciary net position $ 148,863,688 99,022,119 Net pension liability $ 49,841,569 Plan Fiduciary Net Position as a percentage of total pension liability is 66.52%. Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of January 1, 2018 with the results rolled forward to the June 30, 2018 measurement date using the following actuarial assumptions, applied to all periods included in the measurement: (a) rate of return of 7.50% per annum, compounded annually (b) inflation of 3 percent, and (c) cost of living increases of 3 percent per annum. To better recognize current and future mortality improvements, effective June 30, 2018 mortality rates were based on the RP-2014 White Collar Mortality Table, adjusted to 2006, with generational mortality improvement projected after year 2006 using Scale MP-2017 rather than the previously used RP-2014 Mortality Table, adjusted to 2006, with generational mortality improvement projected after year 2006 using Scale MP-2015. The projection of cash flows used to determine the discount rate of 7.5% per annum, compounded annually assumes that employer contributions will be made at rates equal to the actuarially determined contribution rates. Based on that assumption, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members.Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The long-term expected rate of return on pension plan investments was determined using a building- block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the longterm expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. 96 University System of Georgia Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation are summarized in the following table: Asset Class Domestic equity International equity Fixed income Real estate Cash Target Allocation 81.88% --% 13.21% --% 4.91% Long-Term Expected Real Rate of Return 6.50% 7.25% 1.25% 5.75% 0.50% Sensitivity of Net Pension Liability to Changes in the Discount Rate The following represents the net pension liability calculated using the stated discount rate, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentagepoint higher than the current rate: Net pension liability 1% Current Decrease discount rate 6.50% 7.50% $ 61,955,353 $ 49,841,569 $ 1% Increase 8.50% 39,266,044 Schedule of Changes in Net Pension Liability For the year ended June 30, 2018, the University recognized net pension liability of $49,841,569 calculated as follows: Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability (a) - (b) Balance, June 30, 2017 $ 149,152,995 $ 90,408,065 $ 58,744,930 Interest Experience losses (gains) Changes of assumptions Contributions - employer Net investment income Benefit payments 10,669,543 664,493 2,161,493 -- -- (13,784,836) -- -- -- 13,084,672 9,314,218 (13,784,836) 10,669,543 664,493 2,161,493 (13,084,672) (9,314,218) -- Net Change (289,307) 8,614,054 (8,903,361) Balance, June 30, 2018 $ 148,863,688 $ 99,022,119 $ 49,841,569 Affiliated organizations contributed $5,886,802 to the plan on behalf of the University. 2018 Annual Financial Report 97 Schedule of Changes in Pension Expense For the year ended June 30, 2018, the University recognized pension expense of $6,689,185 from the following sources: Interest Projected investment income Recognition of experience (gain)/loss Recognition of changes in assumptions Investment losses (gains) Pension expense June 30, 2018 Pension Expense $ 10,669,543 (6,754,349) 664,493 2,161,493 (51,995) $ 6,689,185 Deferred Outflows/Inflows of Resources At June 30, 2018, the University reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Net difference between projected and actual earnings on pension plan investments Deferred Outflows of Resources Deferred Inflows of Resources $ 2,249,009 $ 4,816,389 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ending June 30: 2019 $ 2020 $ 2021 $ 2022 $ (51,997) (568,604) (1,434,806) (511,973) C. Defined Contribution Plan: Regents Retirement Plan Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was created/established by the Georgia General Assembly in O.C.G.A. 47-21-1 et.seq. and administered by the Board of Regents of the University System of Georgia (Board). O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An "eligible university system employee" is a faculty member or all exempt full and partial benefit eligible employees, as designated by the regulations of the Board. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from three approved vendors (VALIC, Fidelity, and TIAA-CREF) for the purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts. Funding Policy The institutions of the USG make monthly employer contributions to the Regents Retirement Plan on behalf of participants at rates determined by the Board. The Board reviews the contribution amount every three (3) years. For fiscal year 2018, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 6.00% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times. The USG and the covered employees made the required contributions of $128,965,650 (9.24%) and $83,774,712 (6.00%), respectively. VALIC, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices. 98 University System of Georgia Note 15 Risk Management The USG offers its employees and retirees under the age of 65 access to three self insured healthcare plan options and one fully insured plan option. For the USG's Plan Year 2018, the following self-insured health care options were available: Blue Choice HMO plan, (Blue Cross and Blue Shield of Georgia) Consumer Choice HSA plan, and the (Blue Cross and Blue Shield of Georgia) Comprehensive Care plan. The USG's participating employees and eligible retirees pay premiums into the plan fund to access benefits coverage. All units of the USG share the risk of loss for claims associated with these plans. The plan fund is considered to be a self-sustaining risk fund. The USG has contracted with Blue Cross and Blue Shield of Georgia, a wholly owned subsidiary of Anthem, Inc., to serve as the claims administrator for the self-insured healthcare plan options. In addition to the self-insured healthcare plan options offered to the employees and eligible retirees of the USG, a fully insured HMO healthcare plan option also is offered through Kaiser Permanente. The Comprehensive Care plan has a carved-out prescription drug plan administered through CVS Caremark. Pharmacy drug claims are processed in accordance with guidelines established for the Board of Regents' Prescription Drug Benefit Program. Generally, claims are submitted by participating pharmacies directly to CVS Caremark for verification, processing and payment. CVS Caremark maintains an eligibility file based on information furnished by Blue Cross and Blue Shield of Georgia on behalf of the various organizational units of the University System of Georgia. The self-insured dental plan is administered through Delta Dental. Retirees age 65 and older participate in a secondary healthcare coverage for Medicare-eligible retirees and dependents provided through a retiree health care exchange option. The USG makes contributions to a health reimbursement account, which can be used by the retiree to pay premiums and out-of-pocket healthcare-related expenses. A reconciliation of total estimated claims liabilities for employees and retirees for the fiscal years ended June 30, 2018, and June 30, 2017 is shown below: Active Employees: Unpaid Claims and Claim Adjustments June 30, 2018 $ 51,688,179 June 30, 2017 $ 50,977,835 Incurred Claims and Claim Adjustments Expenses Provisions for Insured Events of the Current Year 406,315,366 383,406,114 Payments - Claims and Claim Adjustments Attributable To Insured Events of the Current Year and Prior Years 424,536,366 382,695,770 Unpaid Claims and Claim Adjustments $ 33,467,179 $ 51,688,179 Retirees: Unpaid Claims and Claim Adjustments $ 7,497,596 $ 8,811,415 Incurred Claims and Claim Adjustments Expenses Provisions for Insured Events of the Current Year 86,808,731 86,008,435 Payments - Claims and Claim Adjustments Attributable To Insured Events of the Current Year and Prior Years 89,674,896 87,322,254 Unpaid Claims and Claim Adjustments $ 4,631,431 $ 7,497,596 The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. 2018 Annual Financial Report 99 Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The USG is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment. A self-insured program of professional liability for its employees was established by the Board of Regents of the University System of Georgia under powers authorized by the O.C.G.A 45-9-1. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund. Note 16 Contingencies Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditure disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Institution expects such amounts, if any, to be immaterial to its overall financial position. Litigation, claims and assessments filed against the USG, if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2018. Note 17 Post-Employment Benefits Other Than Pension Benefits The USG provides two other post-employment benefit plans - the Board of Regents Retiree Health Benefit Plan and the State Employees' Assurance Department Retired and Vested Inactive Members Plan. Board of Regents Retiree Health Benefit Plan A. Plan Description and Funding Policy The Board of Regents Retiree Health Benefit Plan (Plan) is a single-employer, defined-benefit, healthcare plan administered by the University System Office, an organizational unit of the USG. The Plan's board is the Board of Regents of the University System of Georgia (Board) that is comprised of nineteen members, all appointed by the Governor (five from state-at-large and one from each of the state's fourteen congressional districts). The Plan was authorized pursuant to OCGA 47-21-21 for the purpose of accumulating funds necessary to meet employer costs of retiree post-employment health insurance benefits. Pursuant to the general powers conferred by the OCGA 20-3-31, the USG has established group health and life insurance programs for regular employees of the USG. It is the policy of the USG to permit employees of the USG eligible for retirement or who become permanently and totally disabled to continue as members of the group health and life insurance programs. The USG offers its employees and retirees under the age of 65 access to three selfinsured healthcare plan options and one fully insured plan option. For the USG's Plan Year 2018, the following selfinsured health care options were available: Blue Choice HMO plan, (Blue Cross and Blue Shield of Georgia) Consumer Choice HSA plan, and the (Blue Cross and Blue Shield of Georgia) Comprehensive Care plan. The USG offers a selfinsured dental plan administered by Delta Dental. Retirees age 65 and older participate in a secondary healthcare coverage for Medicare-eligible retirees and dependents provided through a retiree health care exchange option. The USG makes contributions to the retirees' health reimbursement account, which can be used by the retiree to pay premiums and out-of-pocket healthcare related expenses. 100 University System of Georgia Membership of the Plan consisted of the following: Active Employees Retirees or Beneficiaries Receiving Benefits Retirees or Beneficiaries Eligible But Not Receiving Benefits Total June 30, 2018 48,244 19,161 -- June 30, 2017 49,820 20,591 -- 67,405 70,411 The contribution requirements of plan members and the employer are established and may be amended by the Board. The Plan is substantially funded on a "pay-as-you-go" basis; however, amounts above the pay-as-you-go basis may be contributed annually, either by specific appropriation or by Board designation. Organizational units of the University System of Georgia pay the employer portion for group insurance for eligible retirees. The employer portion of health insurance for its eligible retirees is based on rates that are established annually by the Board for the upcoming plan year. For the 2018 plan year, the employer rate was approximately 90% of the total contributions available to cover health insurance cost for eligible retirees and the retiree rate was approximately 10%. With regard to life insurance, the employer covers the total premium cost for $25,000 of basic life insurance. If an individual elects to have supplemental, and/or, dependent life insurance coverage, such costs are borne entirely by the retiree. For fiscal year 2018, the University System of Georgia contributed $158,419,937 to the plan for current premiums or claims. B. Plan Investments The Plan's investments are segregated for OPEB in the Board of Regents' Balanced Income pooled investment fund. The Balanced Income Fund is designed to be a vehicle to invest funds that are not subject to the state regulations concerning investing in equities. This pool is appropriate for investing longer term funds that require a more conservative investment strategy. Permitted investments in the fund are domestic US equities, domestic investment grade fixed income, and cash equivalents. The equity allocation shall range between 20% and 40%, with a target of 30% of the total portfolio. The fixed income (bond) portion of the portfolio shall range between 60% and 80%, with a target of 70% of the total portfolio. Cash reserves and excess income are invested at all times in the highest quality par stable (A1, P1) institutional money market mutual funds, or other high quality short term instruments. The market value of the Plan's net asset value in the Balanced Income Fund at June 30, 2018 was $64,136,763. This balance is reported as pooled investments on the Statement of Fiduciary Net Position. The following table summarizes the adopted asset allocation policy as of June 30, 2018: Asset Class Fixed Income Equity Allocation Target Allocation 70% 30% At June 30, 2018, approximately 36.85%, 20.13%, 10.65%, 10.03%, 5.80%, 5.37% and 5.15% of the Plan's investments were investments in Western Asset Core Bond Portfolio, iShares Core Total U.S. Aggregate Bond ETF, Vanguard Institutional Index Fund, DFA Short-Term Extended Quality, iShares Russell 1000 Growth ETF, iShares Core S&P Small-cap ETF, and iShares Core S&P Mid-cap ETF, respectively. These investments represents 31.08%, 16.98%, 8.98%, 8.46%, 4.89%, 4.53%, and 4.34%, respectively, of the Plan's fiduciary net position. For the year ended June 30, 2018, the annual money-weighted rate of return on investments, net of investment expense, was 2.85%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. 2018 Annual Financial Report 101 C. Plan Net OBEB Liability under GASB 74 For defined benefit OPEB plans that are administered through trusts that meet the specified criteria, GASB 74 requires the net OPEB liability to be measured as the total OPEB liability, less the amount of the OPEB plan's fiduciary net position. The total OPEB liability is actuarially determined. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trends. Actuarially determined amounts are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress with multi-year trend information is presented as required supplementary information following the notes to the financial statements. The multi-year trend schedules indicate whether the actuarial values of plan assets are increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The components of the net OPEB liability at June 30, 2018, were as follows: Total OPEB Liability Plan Fiduciary Net Position Net OPEB Liability 2018 $ 4,486,796,090 76,044,991 $ 4,410,751,099 Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability 1.69% Discount Rate The last year in which projected benefit payments are due from the Plan is 2117. The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of geometric real rates of return for each major asset class included in the target asset allocation as of June 30, 2017 are summarized in the following table: Asset Class Fixed Income Equity Allocation Long-term Expected Real Rate of Return 1.1% 3.98% * Rates shown are net of the 2.50% assumed rate inflation. The Plan's projected fiduciary net position at the end of 2022 is $0, based on the valuation completed for the fiscal year ending June 30, 2018. As such, the Plan's fiduciary net position was not projected to be available to make all projected future benefit payments for current Plan members. The projected "depletion date" when projected benefits are not covered by projected assets is 2022. Therefore, the long-term expected rate of return on Plan investments of 4.50% per annum was not applied to all periods of projected benefit payments to determine the total OPEB liability as of June 30, 2018, pursuant to paragraph 48 of GASB Statement No. 74. Instead, a yield or index rate for a 20 year, tax-exempt general obligation municipal bond with an average rating of AA or higher was used. This rate was determined to be 3.87% from the Bond Buyers Index. 102 University System of Georgia In projecting the Plan's fiduciary net position, the following assumptions were made: 1. Projected total contributions are simply the pay as you go costs of the plan. Because the current contribution policy is not designed to pre-fund the plan, the unfunded liability is not expected to be paid off at any point in the future. 2. Assumed contributions are based on the contribution policy. 3. Projected benefit payments have been determined in accordance with Paragraphs 30-35 of GASB Statement No. 74, and are based on the closed group of active, retired members and beneficiaries as of June 30, 2018. Benefit payments are assumed to be paid mid-year. 4. Administrative expenses are $0.5 million for 2019 and are assumed to increase annually with inflation. Expenses are assumed to be paid mid-year. 5. Projected investment earnings are based on the assumed investment rate of return of 4.50% per annum. Sensitivity of the net OPEB liability to changes in the discount rate The following presents the net OPEB liability , as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1% lower (2.87%) or 1% higher (4.87%) than the current discount rate (3.87%): Net OPEB Liability 1% Decrease 2.87% $ 5,262,300,218 $ Current Rate 3.87% 4,410,751,099 $ 1% Increase 4.87% 3,744,760,263 Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates The following presents the net OPEB liability, as well as what the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1% lower or 1% higher than the current healthcare cost trend rates: Net OPEB Liability 1% Decrease $ 3,719,384,943 $ Current Rate 4,410,751,099 $ 1% Increase 5,320,398,518 Pre-Medicare Eligible Medicare Eligible 6.1% decreasing to 3.5% 7.1% decreasing to 4.5% 8.1% decreasing to 5.5% 3.5% 4.5% 5.5% Actuarial Methods and Assumptions The impact of the Affordable Care Act (ACA) was addressed in the valuations for the Regents Plan. While the impact of certain provisions [such as the excise tax on high-value health insurance plans beginning in 2020 (if applicable), mandated benefits and participation changes due to the individual mandate] should be recognized in the determination of liabilities, overall future plan costs and the resulting liabilities are driven by amounts employers and retirees can afford (i.e., trend). The trend assumption forecasts the anticipated increase to initial per capita costs, taking into account health care cost inflation, increases in benefit utilization, plan changes, government-mandated benefits, and technological advances. Given the uncertainty regarding the ACA's implementation (e.g., the impact of excise tax on high-value health insurance plans, changes in participation resulting from the implementation of state based health insurance exchanges), continued monitoring of the ACA's impact on the Plan's liability will be required. Projections of benefits for financial reporting purposes are based on the substantive plan (plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and Plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. 2018 Annual Financial Report 103 Additional information as of the latest actuarial valuation is as follows: Valuation Date Cost Method Amortization Method Asset Method Interest Discounting and Salary Growth Mortality Rates Healthcare Cost Trend Pre-Medicare Eligible Medicare Eligible Ultimate Trend Rate Pre-Medicare Eligible Medicare Eligible Year Ultimate Trend is Reached Experience Study May 1, 2018. Update procedures were used to roll forward the total OPEB liability to June 30, 2018. Entry Age Normal Closed amortization period for initial unfunded and subsequent actuarial gains/ losses. Fair Value Interest Rate as of 6/30/2018 3.87% from Bond Buyers Index Interest Rate as of 6/30/2017 3.58% from Bond Buyers Index Long-term Rate of Return 4.50% General Inflation 2.50% Salary Increase 4.00% Healthy: RP-2014 White Collar Mortality Table with Generational Improvements by Scale MP-2014 Disabled: RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward two years for males and four years for females) 7.1% 4.5% 4.5% 4.5% 2030 for Pre-Medicare Eligible, 2019 for Medicare Eligible Based on the experience of the Teachers Retirement System of Georgia1 1 The actuarial assumptions used in the valuation are based on the results of the most recent actuarial experience studies, which covered the five-year period ending June 30, 2014. The remaining actuarial assumptions (e.g., initial per capita costs, health care cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2016 valuation for the Plan were based on a review of recent plan experience done concurrently with the June 30, 2016 valuation. Changes in Assumptions Since Prior Valuation Expected claims costs were updated to reflect actual claims experience. Trend was reset based on current conditions. Disability, Termination, Retirement, and Disabled Mortality were updated to reflect the current Teachers Retirement System of Georgia. D. USG's Net OBEB Liability, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB under GASB 75 The USG's net OPEB liability was measured as of June 30, 2017. The total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of July 1, 2016 with roll-forward procedures performed to update the total liability to June 30, 2017. The USG's net OPEB liability was actuarially determined based on employer contributions during the fiscal year ended June 30, 2017. At June 30, 2017, the USG's net OPEB liability related to the Plan was $4,219,725,872, which was an increase of $17,272,070 from the liability measured as of June 30, 2016. 104 University System of Georgia For the year ended June 30, 2018, the USG recognized OPEB expense of $303,276,109. At June 30, 2018, the USG reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Differences between expected and actual experience Deferred Outflows of Resources Deferred Inflows of Resources $ 102,402,846 $ -- Changes of assumptions -- 288,955,936 Net difference between projected and actual earnings on OPEB plan investments 132,954 -- Contributions subsequent to the measurement date 158,419,937 -- Total $ 260,955,737 $ 288,955,936 The USG's contributions subsequent to the measurement date are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ended June 30: 2019 2020 2021 2022 2023 Thereafter $ (37,654,255) $ (37,654,255) $ (37,654,255) $ (37,654,255) $ (35,803,116) $ -- Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trends. Actuarially determined amounts are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress with multi-year trend information is presented as required supplementary information following the notes to the financial statements. The multi-year trend schedules indicate whether the actuarial values of plan assets are increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The components of the net OPEB liability at June 30, 2017, were as follows: Total OPEB Liability Plan Fiduciary Net Position Net OPEB Liability Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability $ 4,227,583,095 (7,857,223) $ 4,219,725,872 0.19% 2018 Annual Financial Report 105 The changes in net OPEB liability at June 30, 2017, were as follows: Total OPEB Liability Service Cost Interest Differences Between Expected and Actual Experience Changes of Assumptions Benefit Payments/Refunds Net Change in Total OPEB Liability Total OPEB Liability - Beginning Total OPEB Liability - Ending (a) Plan Fiduciary Net Position Contributions - Employer Net Investment Income Administrative Expense Benefit Payments/Refunds Net Change in Plan Fiduciary Net Position Plan Fiduciary Net Position - Beginning Plan Fiduciary Net Position - Ending (b) Net OPEB Liability Ending (a - b) $ 211,512,614 124,612,066 123,090,290 (347,330,873) (89,653,306) 22,230,791 4,205,352,304 $ 4,227,583,095 $ 99,583,903 72,961 (5,044,837) (89,653,306) 4,958,721 2,898,502 $ 7,857,223 $ 4,219,725,872 Discount Rate The last year in which projected benefit payments are due from the Plan is 2115. The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation as of June 30, 2017 are summarized in the following table: Asset Class Cash Equivalents Fixed Income Domestic Fixed Income (Corporate Long Term) Domestic Fixed Income (Corporate Short Term) International Fixed Income Equity Allocation Domestic Equity (Large Cap) International Equity Target Allocation Less than 5% 60% to 70% 30% to 40% Long-term Expected Real Rate of Return 2.6% 4.2% 3.5% 4.9% 6.5% 7.3% The Plan's projected fiduciary net position at the end of 2018 is $0, based on the valuation completed for the fiscal year ending June 30, 2017. As such, the Plan's fiduciary net position was not projected to be available to make all projected future benefit payments for current Plan members. The projected "depletion date" when projected benefits are not covered by projected assets is 2018. Therefore, the long-term expected rate of return on Plan investments of 4.50% per annum was not applied to all periods of projected benefit payments to determine the total OPEB liability as of June 30, 2017, pursuant to paragraph 48 of GASB Statement No. 74. Instead, a yield or index rate for a 20 year, 106 University System of Georgia tax-exempt general obligation municipal bond with an average rating of AA or higher was used. This rate was determined to be 3.58% from the Bond Buyer. In projecting the Plan's fiduciary net position, the following assumptions were made: 1. Projected total contributions are simply the pay as you go costs of the plan. Because the current contribution policy is not designed to pre-fund the plan, the unfunded liability is not expected to be paid off at any point in the future. 2. Assumed contributions are based on the contribution policy. 3. Projected benefit payments have been determined in accordance with Paragraphs 30-35 of GASB Statement No. 75, and are based on the closed group of active, retired members and beneficiaries as of June 30, 2017. Benefit payments are assumed to be paid mid-year. 4. Administrative expenses are $0.0 million for 2017. Expenses are assumed to be paid mid-year. 5. Projected investment earnings are based on the assumed investment rate of return of 4.50% per annum. The first year's earnings have been adjusted to account for the actual return through June 30, 2017. Sensitivity of the net OPEB liability to changes in the discount rate The following presents the net OPEB liability , as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1% lower (2.58%) or 1% higher (4.58%) than the current discount rate (3.58%): Net OPEB Liability 1% Decrease 2.58% $ 5,040,938,351 $ Current Rate 3.58% 4,219,725,872 $ 1% Increase 4.58% 3,579,534,581 Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates The following presents the net OPEB liability, as well as what the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1% lower or 1% higher than the current healthcare cost trend rates: Net OPEB Liability 1% Decrease $ 3,559,505,220 $ Current Rate 4,219,725,872 $ 1% Increase 5,091,997,068 Pre-Medicare Eligible Medicare Eligible 6.3% decreasing to 3.5% 7.3% decreasing to 4.5% 8.3% decreasing to 5.5% 6.3% decreasing to 3.7% 7.3% decreasing to 4.7% 8.3% decreasing to 5.7% Actuarial Methods and Assumptions The impact of the Affordable Care Act (ACA) was addressed in the valuations for the Regents Plan. While the impact of certain provisions [such as the excise tax on high-value health insurance plans beginning in 2020 (if applicable), mandated benefits and participation changes due to the individual mandate] should be recognized in the determination of liabilities, overall future plan costs and the resulting liabilities are driven by amounts employers and retirees can afford (i.e., trend). The trend assumption forecasts the anticipated increase to initial per capita costs, taking into account health care cost inflation, increases in benefit utilization, plan changes, government-mandated benefits, and technological advances. Given the uncertainty regarding the ACA's implementation (e.g., the impact of excise tax on high-value health insurance plans, changes in participation resulting from the implementation of state based health insurance exchanges), continued monitoring of the ACA's impact on the Plan's liability will be required. Projections of benefits for financial reporting purposes are based on the substantive plan (plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and Plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in 2018 Annual Financial Report 107 actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. Additional information as of the latest actuarial valuation is as follows: Valuation Date Cost Method Amortization Method July 1, 2016. Update procedures were used to rolled forward the total OPEB liability to June 30, 2017. Entry Age Normal Closed amortization period for initial unfunded and subsequent actuarial gains/ losses. Asset Method Interest Discounting and Salary Growth Mortality Rates Initial Healthcare Cost Trend Pre-Medicare Eligible Medicare Eligible Ultimate Trend Rate Pre-Medicare Eligible Medicare Eligible Year Ultimate Trend is Reached Experience Study Fair Value Interest Rate as of 6/30/2016 2.85% from Bond Buyer Interest Rate as of 6/30/2017 3.58% from Bond Buyer Long-term Rate of Return 4.50% General Inflation 2.50% Salary Growth 3.00% Salary Scale 4.00% Healthy: RP-2014 Mortality Table with Generational Improvements by Scale MP-2014 Disabled: RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward two years for males and four years for females) 7.3% 7.3% 4.5% 4.7% 2031 for Pre-Medicare Eligible, 2072 for Medicare Eligible Based on the experience of the Teachers Retirement System of Georgia: July 1, 2009 - June 30, 2014 Changes in Assumptions Since Prior Valuation Expected claims costs were updated to reflect actual claims experience. Trend was reset based on current conditions. Disability, Termination, Retirement, and Disabled Mortality were updated to reflect the current Teachers Retirement System of Georgia. State Employees' Assurance Department Retired and Vested Inactive Members Plan A. Plan Description and Funding Policy State Employees' Assurance Department Retired and Vested Inactive Members Plan (SEAD-OPEB) was created in 2007 by the Georgia General Assembly to amend Title 47 of the O.C.G.A., relating to retirement, so as to establish a fund for the provision of term life insurance to retired and vested inactive members of the Employees' Retirement System of Georgia (ERS), the Legislative Retirement System (LRS), and the Georgia Judicial Retirement System (GJRS). The plan is a cost-sharing multiple-employer defined benefit other postemployment benefit plan as defined in GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans other than OPEB Plans. The SEAD-OPEB trust fund accumulates the premiums received from the aforementioned retirement plans, including interest earned on deposits and investments of such payments. Benefits provided: The amount of insurance for a retiree with creditable service prior to April 1, 1964 is the full amount of insurance in effect on the date of retirement. The amount of insurance for a service retiree with no creditable service prior to April 1, 1964 is 70% of the amount of insurance in effect at age 60 or at termination, if earlier. Life insurance proceeds are paid in a lump sum to the beneficiary upon death of the retiree. 108 University System of Georgia Contributions: Georgia law provides that employee contributions to the plan shall be in an amount established by the Board of Trustees not to exceed one-half of 1% of the member's earnable compensation. There were no employer contributions required for the fiscal year ended June 30, 2018. B. OPEB Asset, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB under GASB 75 At June 30, 2018, the USG reported an asset of $2,044,332 for its proportionate share of the net OPEB asset, which is reported as other assets on the Statement of Net Position. The net OPEB asset was measured as of June 30, 2017. The total OPEB asset used to calculate the net OPEB asset was based on an actuarial valuation as of June 30, 2016. An expected total OPEB asset as of June 30, 2017 was determined using standard roll-forward techniques. The USG's proportion of the net OPEB asset was based on actual member salaries reported to the SEAD-OPEB plan during the fiscal year ended June 30, 2017. At June 30 2017, the USG's proportion was .786570%, which was an increase of .102371% from its proportion measured as of June 30, 2016. For the year ended June 30, 2018, the USG recognized OPEB expense of ($255,873). At June 30, 2018, the USG reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Differences between expected and actual experience Deferred Outflows of Resources $ -- Deferred Inflows of Resources $ -- Changes of assumptions -- -- Net difference between projected and actual earnings on OPEB plan investments -- 314,467 Changes in proportion and differences between contributions and proportionate share of contributions Contributions subsequent to the measurement date 33,997 -- 165,783 -- Total $ 33,997 $ 480,250 Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ended June 30: 2019 $ 2020 $ 2021 $ 2022 $ (145,031) (145,032) (78,090) (78,100) 2018 Annual Financial Report 109 Actuarial assumptions: The total OPEB asset as of June 30, 2017 was determined by an actuarial valuation as of June 30, 2016 using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary increases Investment rate of return Healthcare cost trend rate 2.75% 3.25 7.00%, including inflation 7.50%, net of OPEB plan investment expense, including inflation N/A Postretirement mortality rates were based on the RP-2000 Combined Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB and set forward 2 years for both males and females for service retirements and dependent beneficiaries. There is a margin for future mortality improvement in the tables used by the plan. The actuarial assumptions used in the June 30, 2016 valuation were based on the results of an actuarial experience study for the period July 1, 2009 - June 30, 2014. The long-term expected rate of return on OPEB plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of plan investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset class Fixed income Domestic large equities Domestic mid equities Domestic small equities International developed market equities International emerging market equities Alternatives Total Target allocation 30.00% 37.20% 3.40% 1.40% 17.80% 5.20% 5.00% 100.00 % Long-term expected real rate of return* (0.50)% 9.00 % 12.00 % 13.50 % 8.00 % 12.00 % 10.50 % * Rates shown are net of the 2.75% assumed rate of inflation Discount rate: The discount rate used to measure the total OPEB asset was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and State of Georgia contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the OPEB plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB asset. Sensitivity of the Employer's proportionate share of the net OPEB asset to changes in the discount rate: The following presents the USG's proportionate share of the net OPEB asset calculated using the discount rate of 7.50%, as well as what the USG's proportionate share of the net OPEB asset would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate: Net OPEB Asset 110 University System of Georgia 1% Decrease 6.5% $ 1,118,951 $ Current Rate 7.5% 2,044,332 $ 1% Increase 8.5% 2,802,722 OPEB plan fiduciary net position: Detailed information about the OPEB plan's fiduciary net position is available in the separately issued ERS comprehensive annual financial report which is publically available at ers.ga.gov/financials. Note 18 Operating Expenses with Functional Classifications Business-type activity operating expenses by functional classification for fiscal year 2018 are shown below: Functional Classification Instruction Research Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises Patient Care Faculty Salaries Staff Salaries Natural Classification Employee Benefits Personal Services $ 1,008,756,639 $ 458,717,427 41,850,587 63,799,385 3,253,302 10,166,527 258,741 250 635,928 85,851,306 341,311,670 $ 314,615,773 148,438,928 267,642,221 184,843,015 338,987,488 204,566,735 78,645 222,418,613 118,995,878 366,397,312 $ 154,897,885 56,038,672 86,597,701 53,965,056 167,774,112 61,597,084 165,104 53,204,166 39,472,055 2,304,542 $ 267,963 602,834 330,507 330,161 7,669,044 49,771 876,099 2,733,585 2,774 Travel 20,921,095 32,685,653 7,096,044 6,697,786 4,473,239 7,008,622 795,906 118 3,451,124 485,303 Total Operating Expenses $ 1,673,290,092 $ 2,141,898,966 $ 1,040,109,147 $ 15,167,280 $ 83,614,890 Functional Classification Instruction Research Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises Patient Care Total Operating Expenses Scholarships and Fellowships Utilities Natural Classification Supplies and Other Services Depreciation/ Amortization Total Operating Expenses $ 12,607,550 $ 5,355,211 $ 173,365,079 $ 71,994,000 $ 2,003,013,098 5,670,173 4,722,929 341,551,962 86,384,532 1,399,514,297 1,562,566 3,231,057 165,792,812 8,662,760 433,276,260 560,087 3,712,829 143,578,480 54,504,740 627,423,736 4,236,758 3,320,914 81,362,773 22,577,589 358,362,807 2,462,091 8,181,677 649,093,731 41,130,939 1,232,474,231 -- 119,008,050 225,991,964 89,235,609 701,503,860 273,224,278 198 1,057,854 2,564 275,405,110 29,268,806 37,707,366 364,366,166 117,724,992 831,510,746 -- 257,964 130,374,609 -- 375,439,889 $ 329,592,309 $ 185,498,195 $ 2,276,535,430 $ 492,217,725 $ 8,237,924,034 Note 19 Subsequent Event In fiscal year 2019, the Board, by and on behalf of Abraham Baldwin Agricultural College, transferred all real property, buildings and the majority of all equipment of the Bainbridge and Blakely campuses with a cost of $62,837,355 and accumulated deprecation of $18,012,947 to the Southern Regional Technical College, an organizational unit of the Technical College System of Georgia. In addition, the University System of Georgia Foundation extinguished Abraham Baldwin Agricultural College's lease agreement related to the Bainbridge Student Wellness Center located on the Bainbridge campus. At June 30, 2018, the outstanding liability related to this lease is $17,788,041. 2018 Annual Financial Report 111 In December 2017, the Board , by and on behalf of Georgia Institute of Technology, entered into a lease agreement with Georgia Tech Cobb Research Campus, LLC, a wholly-owned subsidiary of Georgia Advanced Technology Ventures (GATV), a component unit, for the Georgia Tech Cobb Research Campus. This facility will be used by Georgia Institute of Technology for ongoing research activities. The lease term is for thirty-one and one half years. Pre-payments for rent during the construction period began December 2017, however, rental payments for the lease period will not begin until June 1, 2019. Total estimated rental payments will be $127,863,834 over the lease period. Monthly rental payments will include base rent and a repair and replacement contribution. The capital lease liability and capital asset will be recorded on Georgia Institute of Technology's books in fiscal year 2019 once construction is completed and the certificate of occupancy has been issued in May 2019. In March 2018, the Board, by and on behalf of the Georgia Institute of Technology, entered into a lease agreement with Georgia Tech Facilities, Inc, a component unit, for the Dalney Building. This facility will be used by Georgia Institute of Technology for office space and an attached parking facility. The lease term is for thirty-one years and five months. Pre-payments for rent during the construction period began March 2018, however, rental payments for the lease period will not begin until September 1, 2019. Total estimated rental payments will be $71,064,952 over the lease period. Monthly rental payments will include base rent and a repair and replacement contribution. Total rental payments for fiscal year 2019 are expected to equal $1,584,948. The capital lease liability and capital asset will be recorded on Georgia Institute of Technology's books in fiscal year 2020 once construction is complete and the certificate of occupancy is issued in October 2019. Note 20 Component Units Related organizations promote, support, and assist the USG in its role in accordance with stated system needs and goals. Together, they add significantly to the USG assets and revenues for programs and services, and ultimately enhance the USG's performance of its mission. The USG has twenty-five related organizations that are considered component units of the State of Georgia and, thus, are required to be reported in the USG's financial statements. Although the USG is not fiscally accountable for these entities, it has been determined that the nature and significance of the relationship between the USG and these organizations is such that exclusion from the USG's financial statements would render them misleading. An annual audit of each component unit's financial statements is conducted by independent accounting firms. The twenty-five organizations included in this presentation are described below: AU Health Systems, Inc. AU Health System, Inc. (AUHS) located in Augusta, Georgia, was incorporated under the laws of the State of Georgia as a nonprofit corporation on June 1, 2010. AUHS qualifies as a tax-exempt corporation under Section 501(c)(3) of the Internal Revenue Service Code. The purpose of the AUHS is to further the health sciences education missions and other tax-exempt functions and purposes of Augusta University (AU), AU Medical Associates, Inc. (AUMA), AU Medical Center, Inc. (AUMC), Roosevelt Warm Springs Rehabilitation & Specialty Hospitals, Inc. (RWSH) and other cooperating organizations and entities with AU. During the year ended June 30, 2018, AUHS, AUMC, RWSH, and AUMA completed a series of corporate and governance changes (the Reorganization) to better align the entities within AUHS and allow for efficient and integrated funds flow and accounting. As a result of the Reorganization, AUMA became a blended component unit of AUHS. Prior to the Reorganization, AUMA was a component unit of AU and AUMA's financial position and operating results were not included in AUHS's financial statements. In addition, as a result of the Reorganization, AUMC and RWSH became blended component units of AUHS. Prior to the Reorganization, AUMC and RWSH were discretely presented component units within AUHS's financial statements. As part of the Reorganization, MCGH/PPG Reproductive Lab, LLC became a part of the integrated health system. This was not included in the prior year as it was a joint venture between AUMC and AUMA and had its own set of financial statements. AUHS has retrospectively restated its financial statements for the change in reporting entity as if it had occurred as of the start of the year ended June 30, 2017. Augusta University Foundation, Inc. The Augusta University Foundation (AUF) is a private nonprofit organization that reports under FASB standards. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB reports were reclassified to the GASB presentation for external financial reporting purposes in these financial statements. The AUF acts primarily as a fund-raising organization to supplement the resources that are available to Augusta University in support of its programs. During the year ended June 30, 2018, the AUF distributed approximately $1,107,378 to Augusta University in support of capital outlay projects, scholarships, and other supporting activities. 112 University System of Georgia Augusta University Research Institute, Inc. Augusta University Research Institute (AURI) is a legally separate, tax-exempt component unit of the State of Georgia reporting entity. The AURI serves to enhance the research mission of Augusta University by securing sponsored research funding and by providing funding of special research initiatives. During the year ended June 30, 2018, the AURI distributed approximately $60,279,814 to Augusta University in support of capital outlay projects, scholarships, and other supporting activities. Georgia Advanced Technology Ventures, Inc. The Georgia Advanced Technology Ventures (GATV) is a legally separate, not-for-profit corporation under the laws of the state of Georgia. GATV is a supporting organization of the Institute focused on technology, commercialization, economic development and relevant real estate development. GATV provides support for technology transfer and economic development activities, including the Institute's Advanced Technology Development Center (ATDC) incubator facilities and services to ATDC-affiliated companies. GATV reports under FASB standards. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB audited financial statements were reclassified to the GASB presentation for these financial statements. Georgia College & State University Foundation, Inc. The Georgia College & State University Foundation (GC&SUF) is a private nonprofit organization that reports under FASB standards. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB reports were reclassified to the GASB presentation for external financial reporting purposes in these financial statements. The GC&SUF acts primarily as a fund raising organization to supplement the resources that are available to Georgia College & State University in support of its programs. During the year ended June 30, 2018, the GC&SUF distributed approximately $822,000 to Georgia College & State University in support of scholarships and other supporting activities. Georgia Gwinnett College Foundation, Inc. Georgia Gwinnett College Foundation, Inc. (GGCF) was established on May 8, 2006 to serve as an advocate for Georgia Gwinnett College, a unit of the University System of Georgia. GGCF's primary object is to receive, invest, account for, and allocate private gifts and contributions in support of the College. Georgia Health Sciences Foundation, Inc. The Georgia Health Sciences Foundation (GHSF) is a private nonprofit organization that reports under FASB standards. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB reports were reclassified to the GASB presentation for external financial reporting purposes in these financial statements. The GHSF acts primarily as a fund-raising organization to supplement the resources that are available to Augusta University in support of its programs. During the year ended June 30, 2018, the GHSF distributed approximately $5,690,616 to Augusta University in support of capital outlay projects, scholarships, and other supporting activities. Georgia Southern University Housing Foundation, Inc. The Georgia Southern University Housing Foundation, Inc. (GSUHF) is a private nonprofit organization that reports under FASB standards. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB reports were reclassified to the GASB presentation for external financial reporting purposes in these financial statements. The GSUHF is a legally separate, tax-exempt affiliated organization which supports Georgia Southern University (GSU). GSUHF acts primarily as an organization to issue bonds which are utilized to acquire and/or construct student housing and other student facilities that are available to GSU in support of its programs. The board of the GSUHF is selfperpetuating and consists of employees and friends of GSU. Because the organization's purpose is for the benefit of GSU, the GSUHF is considered a component unit of the State of Georgia reporting entity and is discretely presented in these financial statements. 2018 Annual Financial Report 113 Georgia State University Athletic Assocation, Inc. The Georgia State University Athletic Association, Inc. (GSUAA) administers Georgia State University's intercollegiate athletics program, including fund-raising to support scholarships. During the year ended June 30, 2018, the GSUAA distributed approximately $11 million to the Georgia State University for athletic scholarship support and other payments that were either expense reimbursements or support for Georgia State University's intercollegiate athletics program. Georgia State University Foundation, Inc. The Georgia State University Foundation, Inc. and Subsidiaries (GSUF) is a private nonprofit organization that reports under FASB standards. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB reports were reclassified to the GASB presentation for external financial reporting purposes in these financial statements. The GSUF acts primarily as a fund-raising organization to supplement the resources that are available to the Georgia State University in support of its programs. During the year ended June 30, 2018, the GSUF distributed approximately $19,013,313 to Georgia State University in support of capital outlay projects, scholarships and other supporting activities. Georgia State University Research Foundation Inc. Georgia State University Research Foundation (GSURF) is a legally separate, tax-exempt component unit of Georgia State University (GSU) and was established to contribute to the scientific, literary, educational, and charitable functions of GSU in securing gifts, contributions, and grants from individuals, private organizations, and public agencies, and in obtaining contracts with such individuals or entities for the performance of sponsored research, development, or other programs by the various colleges, schools, departments or other units of GSU. Most of the research grants awarded to GSURF are subcontracted to GSU, which is responsible for the fiscal administration of the grants. The ten member board of GSURF is self-perpetuating and consists of faculty and administrators of GSU. Because the resources held by GSURF can only be used by or for the benefit of GSU, GSURF is considered a component unit of the State of Georgia and is discretely presented in University System of Georgia's financial statements. GSURF is considered a special-purpose government entity engaged only in business-type activities and is required to follow all applicable GASB pronouncements. GSURF's fiscal year is July 1 through June 30. Georgia Tech Athletic Association The Georgia Tech Athletic Association (GTAA) is a legally separate not-for-profit corporation under the laws of the state of Georgia. The primary purpose of the GTAA is to promote the educational programs of the Georgia Institute of Technology through student body participation in healthful exercises, recreations, athletic games and contests. The GTAA's mission is to inspire and empower student-athletes to be champions of academics, competition and life while emphasizing the four core values of excellence, innovation, teamwork and character. The GTAA reports under GASB standards. For the year ended June 30, 2018, the GTAA distributed $41 million to the Georgia Institute of Technology for athletic scholarships and other supporting activities. Georgia Tech Facilities, Inc. The Georgia Tech Facilities, Inc. (GTFI) is a legally separate, not-for-profit corporation under the laws of the state of Georgia. The purpose of GTFI is to construct buildings and other facilities as may be appropriate to meet the needs and goals of the Georgia Institute of Technology. Funding for construction is obtained by the Organization from contributions or from financing with debt service funded by support from various sources. Additionally, the FASB reported Investment in Direct Financing Leases and Net Position was increased $51,965,155 for external financial reporting purposes in these financial statements. This adjustment was necessary as GTFI amortizes Investment in Direct Financing Leases on a straight-line method. GTFI reports under FASB standards. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB audited financial statements were reclassified to the GASB presentation for these financial statements. 114 University System of Georgia Georgia Tech Foundation, Inc. The Georgia Tech Foundation (GTF) is a legally separate, not-for-profit corporation under the laws of the state of Georgia. The purposes of the Foundation are to promote higher education in the state of Georgia, to raise and receive funds for the support and enhancement of the Georgia Institute of Technology (GT), and to aid GT in its development as a leading educational institution. The Foundation reports under FASB standards. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB audited financial statements were reclassified to the GASB presentation for these financial statements. The FASB reported amounts for Investment in Direct Financing Leases and Net Position were adjusted for the GTF by $19,012,839 for external financial reporting purposes in these financial statements. Both GT and GTF use the effective interest rate method to amortize leases. However, GT uses the Sources and Uses of Funds and the average coupon rate which is a higher interest rate than the interest rate in the actual bond documents used by GTF. Thus, an adjustment was necessary for financial statement presentation. Georgia Tech Research Corporation The Georgia Tech Research Corporation (GTRC) is a legally separate, not-for-profit corporation under the laws of the state of Georgia. The GTRC is organized and operated primarily for the purpose of soliciting grants and contracts, accepting grants or entering into contracts for research or services to be performed by or in conjunction with the Georgia Institute of Technology (GT) or to be performed using GT's facilities, and for related objectives. The GTRC reports under GASB standards. For year ended June 30, 2018, the GTRC distributed $755 million to GT for research contracts sub-awarded to GT. GT is obligated under various operating lease agreements with the GTRC, a related party. This information is disclosed in Note 13, Leases. Kennesaw State University Foundation, Inc. The Kennesaw State University Foundation (KSUF) is a private nonprofit organization that reports under FASB standards. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB reports were reclassified to the GASB presentation for external financial reporting purposes in these financial statements. The KSUF acts primarily as a fund-raising organization to supplement the resources that are available to the Kennesaw State University (KSU) in support of its programs. During the year ended June 30, 2018, the KSUF distributed approximately $5,358,464 to KSU in support of capital outlay projects, scholarships and other supporting activities. Medical College of Georgia Foundation Medical College of Georgia Foundation, Inc. (MCGF) is a nonprofit corporation incorporated under the laws of the State of Georgia in 1954. The MCGF serves the needs and interests of the Medical College of Georgia, the Augusta University Health Sciences campus, and the Augusta University Health System. The MCGF presents its financial statements in accordance with Financial Accounting Standards Board (FASB) ASC, Financial Statements of Not-forProfit Organizations. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB reports were reclassified to the GASB presentation for external financial reporting purposes in these financial statements. The MCGF receives and administers funds for the support of the Medical College of Georgia, the Augusta University Health Sciences campus, and the Augusta University Health System, and manages investments and distributed funds in accordance with donor instructions and board of director's intentions for gifts. The MCGF provides support for faculty chairs, research, scholarships, and other institutional programs. During the year ended June 30, 2018, the MCGF paid approximately $5,858,829 to Augusta University and its affiliates in support of students and University programs. The MCGF paid approximately $599,529 to non-affiliated organizations on behalf of Augusta University. Middle Georgia State University Real Estate Foundation, Inc. The Middle Georgia State University Real Estate Foundation (MGAREF) is a private nonprofit organization that reports under FASB standards. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB reports were reclassified to the GASB presentation for external financial reporting purposes in these financial statements. 2018 Annual Financial Report 115 MGAREF is a nonprofit corporation originally incorporated on August 31, 1973 for the purpose of promoting, in various ways, the cause for higher education, expanding educational opportunities, supporting athletic programs, and acquiring and administering funds to be used to award scholarships and create endowments for the benefit of students and faculty of Middle Georgia State University (MGSU). MGAREF was restructured on February 25, 2013 to acquire, construct, supervise, administer and manage assets and properties, real and personal that are held and used exclusively for the benefit of MGSU. University of Georgia Athletic Association, Inc. The University of Georgia Athletic Association, Inc. (UGAAA) is a legally separate, tax-exempt component unit of the State of Georgia. The UGAAA was organized in 1928 as a not-for-profit corporation to promote intercollegiate athletic sports representing the University of Georgia (UGA). Although UGA is not fiscally accountable for the UGAAA, the nature and significance of the relationship between UGA and the UGAAA is such that exclusion from these financial statements would render them misleading. During the year ended June 30, 2018, the UGAAA made payments to UGA for services such as food services, parking services, health services, tuition, gas, electricity, security, and golf course maintenance. These payments totaled $54 million. University of Georgia Foundation The University of Georgia Foundation (UGAF) is a not for profit foundation that was chartered in 1937 to receive and administer contributions for the support of the academic programs of the University of Georgia (UGA). UGAF reports under FASB standards. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB reports were reclassified to the GASB presentation for external financial reporting purposes in these financial statements. During the year ended June 30, 2018, UGAF distributed $58.5 million to UGA for both restricted and unrestricted purposes. University of Georgia Research Foundation, Inc. The University of Georgia Research Foundation (UGARF) is a legally separate, tax-exempt affiliated organization of the University of Georgia (UGA). The UGARF serves to enhance the research mission of UGA by securing sponsored research funding and by providing funding of special research initiatives. All UGA intellectual property developed through these research programs is managed by the UGARF. The seventeen-member board of the UGARF consists of designated UGA personnel, appointees of several UGA constituent groups, and individuals selected by the UGARF itself. All sponsored research awards are subcontracted to UGA and other resources and related income are used to benefit the teaching, research, and outreach missions of UGA. The UGARF is considered a special-purpose government entity engaged only in business-type activities and is required to follow all applicable GASB pronouncements. The UGARF's fiscal year is July 1 through June 30. The UGARF includes one component unit; the UGA Real Estate Foundation, Inc. (UGAREF). The UGARF is the sole corporate member of the UGAREF and its activities are included in the financial statements using a blended presentation. The UGAREF manages and improves various real estate assets for the benefit of UGA. The UGAREF may also provide support to the Board of Regents of the University System of Georgia and its affiliated institutions. University of North Georgia Real Estate Foundation, Inc. The University of North Georgia Real Estate Foundation, Inc. and Subsidiaries (UNGREF), is a nonprofit foundation exempt from federal and state income taxes under Internal Revenue Code Section 501(c)(3). The UNGREF was formed and incorporated under the laws of the state of Georgia in July 2009. The purpose of the UNGREF is to serve the needs and interest of the University of North Georgia (UNG) and to benefit and promote the well-being of its administration, faculty, staff, student body, and the people and communities served by UNG; and to acquire, lease, receive, accept, develop, manage, encumber, assign, sell, transfer and convey real property to be administered exclusively for charitable purposes for the benefit of UNG. UWG Real Estate Foundation, Inc. UWG Real Estate Foundation, Inc. (UWGREF) is a legally separate, tax-exempt component unit of the University of West Georgia (UWG). The UWGREF constructs research and auxiliary buildings and facilities for use by UWG and then leases the completed buildings to UWG. The nine-member board of the UWGREF is self-perpetuating and consists of graduates and friends of UWG. Although UWG does not control the timing or amount of receipts from the UWGREF, 116 University System of Georgia the majority of resources or income thereon that the UWGREF holds and invests is restricted to real estate activities of UWG. Because these restricted resources held by the UWGREF can only be used by or for the benefit of UWG, the UWGREF is considered a component unit of the State of Georgia and is discretely presented in these financial statements. The UWGREF acts primarily as a fund-raising organization to supplement the resources that are available to UWG in support of its programs. During the year ended June 30, 2018, the UWGREF distributed approximately $62,659 to UWG in support of capital outlay projects, scholarships and other supporting activities. University System of Georgia Foundation, Inc. The University System of Georgia Foundation, Inc. (USGF) is a nonprofit foundation exempt from federal and state income taxes under Internal Revenue Code Section 501(c)(3), and was formed on August 10, 1995. The USGF was organized and operates under the laws of the State of Georgia to serve the needs and interests of the University System of Georgia (USG). The USGF is a cooperative organization of the USG. Its mission is to advance the USG, as a whole, consistent with the priorities determined by the USGF Board of Trustees. The USGF's support comes primarily from contributions and grants from individuals and corporations, and from leasing activities within the USG. The USGF has four primary goals, which are: to cultivate private support for scholarships for students to attend USG institutions, to serve as the administrative center for private grants awarded to USG office staff in "Research and Development (R&D) Centers" that feature the strategic priorities of the Board of Regents and that involve multiple USG institutions, to provide support to the Office of the Chancellor of the USG, to facilitate financing of capital improvement projects at USG institutions. During fiscal year 2018, the USGF awarded $1.5 million in scholarships in support of various institutions within the USG. VSU Auxiliary Services Real Estate Foundation, Inc. The VSU Auxiliary Services Real Estate Foundation, Inc (VSUREF) is a private nonprofit organization that reports under FASB standards, including FASB Statement No. 17, Financial Reporting for Not-for-Profit Organizations. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB reports were reclassified to the GASB presentation for external financial reporting purposes in these financial statements. The VSUREF's fiscal year is January 1 through December 31. The VSUREF was organized to support Valdosta State University (VSU) in its mission to provide excellent higher education to its constituencies, and to provide broad advice, consultation and support to the President of VSU. The VSUREF's primary efforts are directed toward developing VSU's facilities and infrastructure as identified in the strategic planning process and the master plan of VSU. In addition, the VSUREF may provide such services as administration of assets, advice, consultation and support to the Board of Regents and the colleges and universities of the University System of Georgia and their affiliated support organizations. The VSUREF's primary source of revenue are lease payments, and repairs and maintenance and other fees received from the Board of Regents. Combined component unit's endowments are comprised of the following amounts at June 30, 2018: Beginning Contributions Net realized and unrealized gains Appropriation of endowment assets for expenditure Transfers to comply with donor intent Other Ending Unrestricted/ Quasi Endowment Temporarily Permanently Restricted/ Restricted/ Term Endowment True Endowment $ 392,971,015 $ 971,202,077 $ 1,472,617,409 $ 8,791,582 14,652,183 90,775,285 38,893,185 185,986,476 5,909,402 (23,238,986) (96,053,757) (5,045,656) 176,195 (897,563) (1,114,579) 6,314,616 24,907,091 328,000 $ 423,907,607 $ 1,099,796,507 $ 1,563,469,861 $ Total 2,836,790,501 114,219,050 230,789,063 (124,338,399) (1,835,947) 31,549,707 3,087,173,975 2018 Annual Financial Report 117 Combined component unit's investments are comprised of the following amounts at June 30, 2018: Investment type Debt Securities U.S. Treasuries U.S. Agencies Explicitly Guaranteed Implicitly Guaranteed Bond Securities Corporate Debt Money Market Mutual Funds Municipal Obligations Mutual Bond Funds Certificates of Deposits Repurchase Agreements Other Investments Equity Mutual Funds - Domestic Equity Mutual Funds - International Equity Securities - Domestic Equity Securities - International Real Estate Held for Investment Purposes Real Estate Investment Trusts Other Fair Value $ 139,279,830 $ 863,251 17,658,902 239,362,153 91,394,418 135,839,857 7,572,369 82,651,835 750,000 54,466,742 109,284,362 261,174,913 641,563,452 461,468,084 57,360,674 68,309,337 1,484,172,461 Level 1 113,535,013 $ -- 12,095,905 181,636,839 13,920,429 134,680,959 -- 17,812,129 750,000 6,142,188 109,284,362 261,174,913 640,811,633 422,636,084 -- 33,780,819 114,110,461 Fair Value Hierarchy Level 2 Level 3 25,744,817 $ 863,251 5,562,997 191,314 77,473,989 1,158,898 7,572,369 64,839,706 -- 48,324,554 -- -- 382,819 -- -- -- 8,283,563 --$ -- -- -- -- -- -- -- -- -- -- -- -- -- 57,360,674 508,518 148,499,033 NAV -- -- -- 57,534,000 -- -- -- -- -- -- -- -- 369,000 38,832,000 -- 34,020,000 1,213,279,404 Investment Pools Board of Regents Short-Term Fund Legal Fund Balanced Income Fund Total Return Fund Diversified Fund Diversified Fund for Foundations Office of the State Treasurer Georgia Fund 1 Total Investments 3,853,172,640 $ 2,062,371,734 $ 240,398,277 $ 206,368,225 $ 1,344,034,404 83,414,889 551,194 10,959,592 441,548 4,738,572 14,998,436 279,127 $ 3,968,555,998 Component unit investments of $122,041,825 are reported as cash and cash equivalents on the Statement of Net Position. 118 University System of Georgia Combined component unit's capital assets are comprised of the following amounts at June 30, 2018: Capital Assets, Not Being Depreciated: Land Capitalized Collections Construction Work-in-Progress Software Development-in-Progress Total Capital Assets Not Being Depreciated Capital Assets, Being Depreciated/Amortized: Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Software Total Capital Assets being Depreciated/Amortized Less Total Accumulated Depreciation/Amortization Total Capital Assets being Depreciated/Amortized, Net Capital Assets, Net Total $ 147,897,722 3,117,193 79,648,830 16,044,727 246,708,472 4,190,671 907,136,484 237,946,905 306,748,088 66,936,210 36,063,933 1,559,022,291 645,527,946 913,494,345 $ 1,160,202,817 Combined amounts due to component units related to direct financing lease activity as of June 30, 2018 is as follows: Year Ending June 30: 2019 2020 2021 2022 2023 2024 through 2028 2029 through 2033 2034 through 2038 2039 through 2043 2044 through 2048 Total minimum lease payments to be received Unearned Income Net Investment in Direct Financing Lease Year: 1 $ 2 3 4 5 6-10 11-15 16-20 21-25 26-30 $ Total 196,578,730 199,557,987 201,379,506 201,835,068 201,029,210 1,001,692,972 908,727,208 665,843,968 200,323,826 2,589,544 3,779,558,019 (1,395,278,023) 2,384,279,996 2018 Annual Financial Report 119 Combined component unit's long-term liabilities are comprised of the following amounts at June 30, 2018: Beginning Balance Additions Reductions Amounts due Ending Balance within One Year Claims and Judgments Compensated Absences Lease Purchase Obligation (Capital Lease) Liabilities under Split Interest Agreement Notes and Loans Payable Note (Discount)/Cost of Issuance Interest Rate Swap Net Other Post Employment Benefits Liability Pollution Remediation Revenue/Mortgage Bonds Payable Bond - Premium Bond - (Discount)/Cost of Issuance $ 2,226,304 $ 19,192,484 92,201,115 29,120,130 201,905,212 (977,012) 57,857,348 11,531,792 601,341 3,032,153,792 131,095,057 (64,877,568) --$ 4,774,759 2,680,297 719,773 84,640,488 (1,122,118) 5,823,186 6,957,347 -- 572,298,047 61,545,093 (4,033,095) 180,688 $ 4,165,870 11,954,669 1,784,788 17,991,831 (405,156) 33,504,458 2,045,616 $ 19,801,373 82,926,743 28,055,115 268,553,869 (1,693,974) 30,176,076 12,323,460 39,412 485,799,310 11,115,301 (10,385,557) 6,165,679 561,929 3,118,652,529 181,524,849 (58,525,106) 1,279,688 19,801,373 8,267,512 2,369,700 80,813,416 -- -- -- 561,929 92,182,022 -- -- Total Long Term Liabilities $ 3,512,029,995 $ 734,283,777 $ 568,069,074 $ 3,678,244,698 $ 205,275,640 Combined component unit's capital lease obligations are comprised of the following amounts at June 30, 2018: Year ending June 30: 2019 2020 2021 2022 2023 2024 through 2028 2029 through 2033 2034 through 2038 Total minimum lease payments Less: Interest Principal Outstanding 1 $ 2 3 4 5 6-10 11-15 16-20 $ 12,590,551 11,478,069 10,084,477 9,318,186 8,073,340 30,046,406 28,422,919 4,540,308 114,554,256 31,627,513 82,926,743 Combined component unit's notes and loans are comprised of the following amounts at June 30, 2018: Year ending June 30: 2019 2020 2021 2022 2023 2024 through 2028 2029 through 2033 2034 through 2038 2039 through 2043 Note (Discount)/Cost of Issuance Total Principal 1 $ 2 3 4 5 6-10 11-15 16-20 21-25 $ 80,813,416 $ 115,192,082 3,279,095 3,396,839 3,111,005 49,476,895 8,874,138 3,685,399 725,000 268,553,869 (1,693,974) 266,859,895 $ Interest 5,191,946 $ 4,119,657 3,422,924 3,307,656 3,239,190 5,492,127 2,151,265 431,387 16,218 27,372,370 -- 27,372,370 $ Total 86,005,362 119,311,739 6,702,019 6,704,495 6,350,195 54,969,022 11,025,403 4,116,786 741,218 295,926,239 (1,693,974) 294,232,265 120 University System of Georgia Combined component unit's bonds payable are comprised of the following amounts at June 30, 2018: Year ending June 30: 2019 2020 2021 2022 2023 2024 through 2028 2029 through 2033 2034 through 2038 2039 through 2043 2044 through 2048 2049 through 2053 Bond Premium Bond (Discount)/Cost of Issuance Total Principal 1 $ 2 3 4 5 6-10 11-15 16-20 21-25 26-30 31-35 $ 92,182,022 $ 134,068,552 110,563,881 117,406,038 150,381,052 694,414,828 773,431,156 673,425,000 319,860,000 48,990,000 3,930,000 3,118,652,529 181,524,849 (58,525,106) 3,241,652,272 $ Interest 139,464,046 $ 135,667,264 130,269,915 125,231,850 119,032,393 498,373,923 327,415,745 164,244,944 41,801,730 7,257,338 413,450 1,689,172,598 -- -- 1,689,172,598 $ Total 231,646,068 269,735,816 240,833,796 242,637,888 269,413,445 1,192,788,751 1,100,846,901 837,669,944 361,661,730 56,247,338 4,343,450 4,807,825,127 181,524,849 (58,525,106) 4,930,824,870 2018 Annual Financial Report 121 122 University System of Georgia Required Supplementary Information 224 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS DEFINED BENEFIT PENSION PLANS FOR THE LAST TEN YEARS Early Retirement Plan Year Ended 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 6/30/2011 6/30/2010 6/30/2009 Actuarially Determined Contribution (a) $ 11,767,714 $ 12,107,903 $ 12,760,669 $ 12,996,582 $ 13,045,051 $ 13,055,907 $ 12,861,601 $ 12,973,559 $ 13,050,409 $ 13,225,850 Contributions in Relation to the Actuarially Determined Contribution (b) $ 13,084,672 $ 13,084,672 $ 13,084,672 $ 13,084,672 $ 13,084,672 $ 13,225,850 $ 13,225,850 $ 13,225,850 $ 13,225,850 $ 13,225,850 Contribution Deficiency (Excess) (a-b) $ (1,316,958) $ (976,769) $ (324,003) $ (88,090) $ (39,621) $ (169,943) $ (364,249) $ (252,291) $ (175,441) $ -- Covered Payroll (c) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Contributions as a Percentage of Covered Payroll (b/c) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Employees' Retirement System 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 6/30/2011 6/30/2010 6/30/2009 $ 3,201,803 $ 3,201,803 $ $ 2,963,115 $ 2,963,115 $ $ 2,674,110 $ 2,674,110 $ $ 2,094,605 $ 2,094,605 $ $ 1,631,633 $ 1,631,633 $ $ 1,238,577 $ 1,238,577 $ $ 896,604 $ 896,604 $ $ 709,947 $ 709,947 $ $ 665,448 $ 665,448 $ $ 687,652 $ 687,652 $ --$ --$ --$ --$ --$ --$ --$ --$ --$ --$ 12,768,728 11,464,596 10,285,916 9,219,622 8,690,850 8,312,597 7,701,668 6,819,856 6,392,392 6,568,751 25.08% 25.85% 26.00% 22.72% 18.77% 14.90% 11.64% 10.41% 10.41% 10.47% Teachers Retirement System 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 6/30/2011 6/30/2010 6/30/2009 $ 303,975,717 $ 303,975,717 $ $ 246,086,468 $ 246,086,468 $ $ 232,397,988 $ 232,397,988 $ $ 203,874,344 $ 203,874,344 $ $ 181,383,954 $ 181,383,954 $ $ 164,293,969 $ 164,293,969 $ $ 148,193,749 $ 148,193,749 $ $ 143,479,549 $ 143,479,549 $ $ 135,361,497 $ 135,361,497 $ $ 128,072,380 $ 128,072,380 $ -- $ 1,806,029,773 -- $ 1,724,389,667 -- $ 1,626,552,148 -- $ 1,542,770,677 -- $ 1,477,068,029 -- $ 1,439,912,086 -- $ 1,441,573,434 -- $ 1,395,715,457 -- $ 1,389,748,429 -- $ 1,380,090,302 16.83% 14.27% 14.29% 13.21% 12.28% 11.41% 10.28% 10.28% 9.74% 9.28% 2018 Annual Financial Report 125 UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY MULTIPLE EMPLOYER DEFINED BENEFIT PENSION PLANS FOR THE LAST FOUR FISCAL YEARS* Employees' Retirement System Year Ended 6/30/2018 6/30/2017 6/30/2016 6/30/2015 Teachers Retirement System 6/30/2018 6/30/2017 6/30/2016 6/30/2015 Proportion of the Net Pension Liability Proportionate Share of the Net Pension Liability 0.47% $ 18,912,176 $ 0.44% $ 20,881,541 $ 0.40% $ 16,237,112 $ 0.39% $ 14,722,566 $ Covered Payroll 11,464,596 10,285,916 9,219,622 8,690,850 Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 164.96% 76.33% 203.01% 72.34% 176.11% 76.20% 169.40% 77.99% 15.05% $ 14.87% $ 14.74% $ 14.52% $ 2,796,679,979 $ 1,724,389,667 3,067,576,327 $ 1,626,552,148 2,243,998,382 $ 1,542,770,677 1,835,025,616 $ 1,477,068,029 162.18% 188.59% 145.45% 124.23% 79.33% 76.06% 81.44% 84.03% *This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 126 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF EMPLOYERS' AND NONEMPLOYERS' NET PENSION LIABILITY EARLY RETIREMENT PLAN - AUGUSTA UNIVERSITY SINGLE EMPLOYER DEFINED BENEFIT PENSION PLAN FOR THE LAST FIVE FISCAL YEARS* (Dollar amounts in millions) Total Pension Liability Plan Fiduciary Net Position 2018 2017 2016 2015 2014 $ 148.9 $ 149.2 $ 151.8 $ 143.8 $ 145.4 99.0 90.4 80.3 79.1 76.2 Net Pension Liability $ 49.9 $ 58.8 $ 71.5 $ 64.7 $ 69.2 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 66.5% 60.6% 52.9% 55.0% 52.4% Covered Payroll N/A N/A N/A N/A N/A Employers' and Nonemployers' Net Pension Liability as a Percentage of Covered Payroll N/A N/A N/A N/A N/A * This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 2018 Annual Financial Report 127 UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY EARLY RETIREMENT PLAN - AUGUSTA UNIVERSITY SINGLE EMPLOYER DEFINED BENEFIT PENSION PLAN FOR THE LAST FIVE FISCAL YEARS* (Dollar amounts in millions) Total Pension Liability Interest Differences Between Expected and Actual Experience Changes of Assumptions Benefit Payments/Refunds Net Change in Total Pension Liability Total Pension Liability - Beginning Total Pension Liability - Ending (a) Plan Fiduciary Net Position Contributions - Employer Net Investment Income Benefit Payments/Refunds Net Change in Plan Fiduciary Net Position Plan Fiduciary Net Position - Beginning Plan Fiduciary Net Position - Ending (b) Net Pension Liability Ending (a - b) 2018 2017 2016 2015 2014 $ 10.7 $ 10.9 $ 10.3 $ 10.4 $ 10.6 0.6 0.1 1.3 1.3 (0.1) 2.2 -- 9.9 -- -- (13.8) (13.6) (13.5) (13.3) (13.1) (0.3) 149.2 (2.6) 151.8 8 143.8 (1.6) 145.4 (2.6) 148 $ 148.9 $ 149.2 $ 151.8 $ 143.8 $ 145.4 $ 13.1 $ 13.1 $ 13.1 $ 13.1 $ 13.1 9.3 10.6 1.6 3.1 11.8 (13.8) (13.6) (13.5) (13.3) (13.1) 8.6 10.1 1.2 2.9 11.8 90.4 80.3 79.1 76.2 64.4 $ 99.0 $ 90.4 $ 80.3 $ 79.1 $ 76.2 $ 49.9 $ 58.8 $ 71.5 $ 64.7 $ 69.2 * This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 128 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF INVESTMENT RETURNS EARLY RETIREMENT PLAN - AUGUSTA UNIVERSITY SINGLE EMPLOYER DEFINED BENEFIT PENSION PLAN FOR THE LAST FIVE FISCAL YEARS* Annual Money-Weighted Rate of Return, Net of Investment Expense 2018 2017 2016 2015 2014 10.42% 13.39% 2.02% 4.13% 18.35% * This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 2018 Annual Financial Report 129 UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION DEFINED BENEFIT PENSION PLANS METHODS AND ASSUMPTIONS FOR FISCAL YEAR ENDED JUNE 30, 2018 Changes of assumptions Early Retirement Plan: The expectation of retired life mortality was changed effective June 30, 2018 to the RP-2014 White Collar Mortality Table rather than the RP-2014 Mortality Table used previously. Mortality rates were adjusted to better recognize current and future mortality improvements. Employees' Retirement System: On December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. Teachers Retirement System: In 2010 and later, the expectation of retired life mortality was changed to the RP2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience. On November 18, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. The expectation of retired life mortality was changed to RP2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males). 130 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS DEFINED BENEFIT OPEB PLANS FOR THE LAST TEN YEARS* (Dollars in thousands) Board of Regents Retiree Health Benefit Plan Year Ended Actuarially Determined Contribution (a) Contributions in Relation to the Actuarially Determined Contribution (b) Contribution Deficiency (Excess) (a-b) Covered Employee Payroll (c) Contributions as a Percentage of Covered Employee Payroll (b/c) 6/30/2018 $ 467,338 $ 158,420 $ 308,918 $ 3,218,771 $ -- 6/30/2017 ** $ 349,859 $ 99,584 $ 250,275 $ 3,122,694 $ -- 6/30/2016 $ 295,192 $ 111,814 $ 183,378 $ 3,087,013 $ -- 6/30/2015 $ 442,359 $ 129,823 $ 312,536 $ 2,608,757 $ -- 6/30/2014 $ 403,314 $ 120,926 $ 282,388 $ 2,594,800 $ -- 6/30/2013 $ 362,426 $ 83,414 $ 279,012 $ 2,466,314 $ -- 6/30/2012 $ 345,298 $ 88,836 $ 256,462 $ 2,526,212 $ -- 6/30/2011 $ 411,516 $ 80,262 $ 331,254 $ 2,432,367 $ -- 6/30/2010 $ 381,700 $ 69,900 $ 311,800 $ 2,399,532 $ -- 6/30/2009 $ 349,500 $ 68,100 $ 281,400 $ 2,372,385 $ -- Notes to Schedule Valuation Date May 1, 2018. Update procedures were used to roll forward the total OPEB liability to June 30, 2018. Cost Method Entry Age Normal Amortization Method Closed amortization period for initial unfunded and subsequent actuarial gains/losses. Asset Method Fair Value Investment Rate of Return 4.5%, net of OPEB plan investment expense, including inflation of 2.5% Salary Increases 4.0% Mortality Rates Healthy: RP-2014 White Collar Mortality Table with Generational Improvements by Scale MP-2014 Healthcare Cost Trend Pre-Medicare Eligible Disabled: RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward two years for males and four years for females) 7.1% Medicare Eligible Ultimate Trend Rate Pre-Medicare Eligible 4.5% 4.5% reached 2030 Medicare Eligible 4.5% reached 2019 Experience Study Based on the experience of the Teachers Retirement System of Georgia. The actuarial assumptions used in the valuation are based on the results of the most recent actuarial experience studies, which covered the five-year period ending June 30, 2014. The remaining actuarial assumptions (e.g., initial per capita costs, health care cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2016 valuation for the Plan were based on a review of recent plan experience done concurrently with the June 30, 2016 valuation. Changes in Assumptions Since Prior Valuation: Expected claims costs were updated to reflect actual claims experience. Trend was reset based on current conditions. Disability, Termination, Retirement, and Disabled Mortality were updated to reflect the current Teachers Retirement System of Georgia. State Employees' Assurance Department Retired and Vested Inactive Members Plan Year Ended Contractually Required Contribution (a) Contributions in Relation to the Contractually Required Contribution (b) Contribution Deficiency (Excess) (a-b) Covered Payroll (c) 6/30/2018 $ --$ --$ --$ 12,769 Contributions as a Percentage of Covered Payroll (b/c) --% * This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. ** June 30, 2017 covered employee payroll for the Board of Regents Retiree Health Benefit Plan was restated. 2018 Annual Financial Report 131 UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB ASSET COST SHARING MULTIPLE EMPLOYER DEFINED BENEFIT OPEN PLAN FOR FISCAL YEAR ENDED JUNE 30, 2018* State Employees' Assurance Department Retired and Vested Inactive Members Plan Year Ended 6/30/2018 Proportion of the Net OPEB Asset Proportionate Share of the Net OPEB Asset 0.79% $ 2,044,332 $ Covered Payroll 11,454,514 Proportionate Share of the Net OPEB Asset as a Percentage of Covered Payroll Plan Fiduciary Net Position as a Percentage of the Total OPEB Asset 17.85% 130.17% *This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 132 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET OPEB LIABILITY BOARD OF REGENTS RETIREE HEALTH BENEFIT PLAN SINGLE EMPLOYER DEFINED BENEFIT OPEB PLAN FOR THE LAST TWO FISCAL YEARS* Total OPEB Liability Service Cost Interest Differences Between Expected and Actual Experience Changes of Assumptions Benefit Payments/Refunds Net Change in Total OPEB Liability Total OPEB Liability - Beginning Total OPEB Liability - Ending (a) Plan Fiduciary Net Position Contributions - Employer Net Investment Income Administrative Expense Benefit Payments/Refunds Net Change in Plan Fiduciary Net Position Plan Fiduciary Net Position - Beginning Plan Fiduciary Net Position - Ending (b) Net OPEB Liability Ending (a - b) 2018 2017 $ 236,916,639 $ 211,512,614 158,222,522 124,612,066 264,729,331 123,090,290 (310,106,837) (347,330,873) (90,548,660) (89,653,306) 259,212,995 4,227,583,095 22,230,791 4,205,352,304 $ 4,486,796,090 $ 4,227,583,095 $ 158,419,937 $ 801,316 (484,825) (90,548,660) 99,583,903 72,961 (5,044,837) (89,653,306) 68,187,768 7,857,223 4,958,721 2,898,502 $ 76,044,991 $ 7,857,223 $ 4,410,751,099 $ 4,219,725,872 * This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 2018 Annual Financial Report 133 UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF NET OPEB LIABILITY BOARD OF REGENTS RETIREE HEALTH BENEFIT PLAN SINGLE EMPLOYER DEFINED BENEFIT OPEB PLAN FOR THE LAST TWO FISCAL YEARS* Total OBEB Liability Plan Fiduciary Net Position Net OPEB Liability Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability Covered Employee Payroll Net OPEB Liability as a Percentage of Covered Employee Payroll 2018 2017 $ 4,486,796,090 $ 4,227,583,095 76,044,991 7,857,223 $ 4,410,751,099 $ 4,219,725,872 1.69% 0.19% $ 3,218,771,744 $ 3,122,694,102 137.03% 135.13% * This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 134 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF INVESTMENT RETURNS BOARD OF REGENTS RETIREE HEALTH BENEFIT PLAN SINGLE EMPLOYER DEFINED BENEFIT OPEB PLAN FOR THE LAST TWO FISCAL YEARS* Annual Money-Weighted Rate of Return, Net of Investment Expense 2018 2.85% 2017 0.99% * This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 2018 Annual Financial Report 135 UNIVERSITY SYSTEM OF GEORGIA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION DEFINED BENEFIT OPEB PLANS METHODS AND ASSUMPTIONS FOR FISCAL YEAR ENDED JUNE 30, 2018 Board of Regents Retiree Health Benefit Plan Changes in Assumptions Since Prior Valuation Expected claim costs were updated to reflect actual claims experience. Trend was reset based on current conditions. Disability, termination, retirement, and disabled mortality tables were updated to reflect the current Teachers Retirement System of Georgia methodology. The discount rate was updated from 3.58% as of June 30, 2017 to 3.87% as of June 30, 2018. State Employees' Assurance Department Retired and Vested Inactive Members Plan Changes in Assumptions Since Prior Valuation On December 17, 2015, the SEAD Board adopted recommended changes to the economic and demographic assumptions utilized by the SEAD-OPEB plan. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. 136 University System of Georgia Supplementary Information UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 Abraham Baldwin Agricultural College Albany State University Atlanta Metropolitan State College Augusta University ASSETS Current Assets Cash and Cash Equivalents $ Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Affiliated Organizations Component Units Primary Government Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Primary Government Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES $ 9,893,081 $ 292,267 118,948 -- 809,610 -- -- 568,305 -- -- -- 1,710,739 -- -- -- -- 306,582 24,122 -- 13,723,654 -- -- -- -- -- -- -- -- 229,082 -- -- -- -- 1,588 -- 1,924,929 105,388,239 107,543,838 121,267,492 7,044,089 $ 10,105,105 $ 3,328,066 -- -- 1,928,808 -- -- -- -- -- -- 3,765,507 -- -- -- -- -- 40,614 -- 19,168,100 -- -- -- 801,382 -- -- -- -- 56,245 -- -- -- -- -- -- -- 218,967,160 219,824,787 238,992,887 11,611,625 $ 873,411 $ 46,654 -- -- 1,847,459 -- -- -- -- -- -- 566,313 -- -- -- -- -- 58,868 -- 3,392,705 16,212,975 24,898,021 -- -- 7,418,397 -- -- 679,661 40,475,906 -- -- 24,991,740 -- -- -- -- 723,742 17,028,036 -- 132,428,478 -- -- -- 69,628 -- -- -- -- -- -- -- -- -- -- -- -- 42,848,997 42,918,625 46,311,330 4,100,406 $ -- -- -- 197,730 -- -- -- 76,949,626 2,273,398 -- -- -- -- -- -- 12,937,349 537,217,308 629,575,411 762,003,889 92,008,272 138 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Interest Payable (Added for SAO) Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Abraham Baldwin Agricultural College Albany State University Atlanta Metropolitan State College Augusta University $ 952,025 $ 1,268,362 $ 1,445,196 $ 11,398,329 347,451 365,541 120,749 3,137,247 109,632 134,269 42,714 6,681,522 -- 30,582 -- 1,122,718 -- 51,400 -- 379,363 -- -- -- -- -- -- -- 1,620,181 -- -- -- 4,628,432 -- -- -- -- -- -- -- -- -- -- -- -- 1,048,697 4,718,434 676,651 45,287,085 155,500 312,749 2,917 -- 974,162 1,692,732 449,937 2,681,016 -- -- -- -- -- -- -- -- 379,733 2,614,850 196,268 1,471,790 -- -- -- 2,306,377 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 358,754 -- 750,340 1,477,486 492,910 21,701,052 4,717,540 12,666,405 3,786,096 102,415,112 Non-Current Liabilities Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- -- -- -- -- 17,458,716 -- -- -- -- -- -- 447,050 42,402,042 25,507,132 85,814,940 90,532,480 -- -- -- -- -- -- -- -- 101,227,181 -- -- -- -- -- -- 1,075,049 67,230,614 45,914,491 215,447,335 228,113,740 -- -- -- -- -- -- -- -- 9,476,242 -- -- -- -- -- 1,005,250 270,288 17,354,129 15,788,405 43,894,314 47,680,410 -- -- -- -- -- -- -- -- 1,947,885 46,495,025 -- -- -- -- -- 17,496,656 500,127,185 364,460,016 930,526,767 1,032,941,879 DEFERRED INFLOWS OF RESOURCES $ 6,645,834 $ 19,128,900 $ 1,507,792 $ 54,136,573 2018 Annual Financial Report 139 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Capital Projects Higher Education Endowment Unrestricted (Deficit) TOTAL NET POSITION Abraham Baldwin Agricultural College Albany State University Atlanta Metropolitan State College Augusta University $ 87,549,790 $ 114,020,393 $ 33,176,487 $ 485,453,028 1,851,787 862,837 -- -- -- (59,131,147) -- 208,527 -- -- -- (110,867,048) -- 46,654 -- -- -- (31,999,607) 2,558,310 33,662,268 -- -- -- (754,739,897) $ 31,133,267 $ 3,361,872 $ 1,223,534 $ (233,066,291) 140 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 Clayton State University College of Coastal Georgia Columbus State University Dalton State College ASSETS Current Assets Cash and Cash Equivalents $ Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Affiliated Organizations Component Units Primary Government Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Primary Government Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES $ 6,339,439 $ 1,753,281 -- -- 2,907,533 -- -- 320,643 -- -- -- 3,052,450 -- -- -- -- 1,171,102 127,626 -- 15,672,074 1,757,840 -- -- 578,205 -- -- -- -- 6,188 -- -- -- -- -- -- -- 126,937,785 129,280,018 144,952,092 8,447,953 $ 4,609,032 $ 12,701 -- -- 230,072 -- -- 352,096 -- -- -- 1,011,240 -- -- -- -- 29,737 99,049 -- 6,343,927 19,295,085 $ 1,338,149 -- -- 2,073,596 -- -- 355,752 -- -- -- 8,878,995 -- -- -- -- -- 511,537 -- 32,453,114 -- -- -- 77,550 -- -- -- -- -- -- -- -- -- -- -- 162,429 65,988,107 66,228,086 72,572,013 3,533,730 $ -- -- -- 259,144 -- -- -- 2,184,189 714,181 -- -- -- -- -- -- 3,046,817 107,581,927 113,786,258 146,239,372 12,756,283 $ 9,544,104 126,951 -- -- 917,716 -- -- 71,861 -- -- -- 1,192,332 -- -- -- -- 13,151 111,700 -- 11,977,815 -- -- -- 46,314 -- -- -- -- -- -- -- -- -- -- -- -- 47,779,597 47,825,911 59,803,726 5,167,394 2018 Annual Financial Report 141 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Interest Payable (Added for SAO) Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Clayton State University College of Coastal Georgia Columbus State University Dalton State College $ 1,907,528 $ 956,890 $ 2,704,764 $ 1,063,932 284,048 221,085 437,508 152,051 84,805 61,541 185,106 279,910 -- -- -- -- 145,870 -- 18,125 39,235 -- -- -- -- -- 291 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 2,261,944 848,340 7,115,259 939,061 59,104 15,995 200 19,075 540,181 265,919 5,354,267 375,255 22,920 -- -- -- -- -- -- -- -- 273,155 192,303 -- 1,662,253 -- 1,417,892 132,385 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 1,533,709 446,449 1,783,017 522,367 8,502,362 3,089,665 19,208,441 3,523,271 Non-Current Liabilities Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- -- -- -- -- -- 65,776,816 -- -- -- -- -- 592,625 53,045,161 30,853,488 150,268,090 158,770,452 -- -- -- -- -- -- -- -- 11,028,493 -- -- -- -- -- -- 222,409 21,070,357 11,148,212 43,469,471 46,559,136 -- -- -- -- -- -- -- -- 402,833 40,487,830 -- -- -- -- -- 1,197,497 71,374,427 43,439,869 156,902,456 176,110,897 -- -- -- -- -- -- -- -- -- 5,836,432 -- -- -- -- -- 200,683 32,086,331 17,054,622 55,178,068 58,701,339 DEFERRED INFLOWS OF RESOURCES $ 15,573,111 $ 1,823,669 $ 6,475,407 $ 3,994,930 142 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Capital Projects Higher Education Endowment Unrestricted (Deficit) TOTAL NET POSITION Clayton State University College of Coastal Georgia Columbus State University Dalton State College $ 49,610,011 $ 54,686,459 $ 65,062,944 $ 41,239,007 1,750,693 8,776 -- -- -- (72,312,998) 68,879 106,251 -- -- -- (27,138,651) 2,057,501 2,253,693 -- -- -- (92,964,787) -- 1,961 -- -- -- (38,966,117) $ (20,943,518) $ 27,722,938 $ (23,590,649) $ 2,274,851 2018 Annual Financial Report 143 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 East Georgia State College Fort Valley State University Georgia College & State University Georgia Gwinnett College ASSETS Current Assets Cash and Cash Equivalents $ Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Affiliated Organizations Component Units Primary Government Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Primary Government Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES $ 2,852,859 $ 77,464 -- -- 1,289,821 -- -- 5,597 -- -- -- 763,493 -- -- -- -- 12,460 662 -- 5,002,356 6,295,826 $ 2,122,283 -- -- 3,272,657 -- -- 760,860 -- -- -- 1,915,911 -- -- -- -- -- 126,939 -- 14,494,476 23,311,418 $ 880,554 -- -- 303,609 -- -- 167,989 34,041 -- -- 3,570,146 -- -- -- -- 292,019 1,340,309 -- 29,900,085 37,237,072 518,191 -- -- 104,150 -- -- -- 52,624 -- -- 1,001,483 -- -- -- -- -- 752,033 -- 39,665,553 -- -- -- -- -- -- -- 4,800 -- -- -- -- -- -- -- 44,424 26,105,766 26,154,990 31,157,346 3,875,710 $ -- -- -- 650,273 -- -- -- 73,886 992,405 -- -- -- -- -- -- -- 142,171,873 143,888,437 158,382,913 8,071,027 $ 1,803,415 -- -- 1,081,968 -- -- -- 3,200,363 106,890 -- -- -- -- 118,051 -- 4,983,305 181,994,686 193,288,678 223,188,763 17,703,204 $ -- -- -- 1,507,117 -- -- -- -- -- -- -- -- -- -- -- -- 232,851,234 234,358,351 274,023,904 41,815,769 144 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Interest Payable (Added for SAO) Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities East Georgia State College Fort Valley State University Georgia College & State University Georgia Gwinnett College $ 456,198 $ 2,717,740 $ 3,527,527 $ 2,208,943 128,588 181,111 433,227 526,421 51,872 67,091 197,088 635,247 -- 45,080 1,898,383 -- 11,370 147,899 328,196 -- -- -- -- -- -- -- -- -- -- -- -- 4,548 -- -- -- -- -- -- -- -- -- 321,895 -- -- 444,884 1,603,821 1,941,653 2,519,849 1,895 -- 345,975 844,249 67,423 361,622 923,618 255,539 474 -- 807,492 178,909 -- -- -- -- 1,655 1,485,920 751,173 1,149,162 -- -- 2,449,186 4,484,066 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 251,527 -- -- 361,101 1,414,915 2,478,011 1,395,014 1,525,460 8,598,621 16,081,529 14,201,947 Non-Current Liabilities Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- -- -- -- -- 1,173 -- -- -- -- -- -- 239,276 17,993,671 10,956,411 29,190,531 30,715,991 -- -- -- -- -- -- -- -- -- 74,794,485 -- -- -- -- -- 701,968 41,795,878 29,171,314 146,463,645 155,062,266 -- -- -- -- -- -- -- -- 33,479,849 82,330,653 -- -- -- -- -- 756,936 82,897,148 53,932,163 253,396,749 269,478,278 -- -- -- -- -- -- -- -- 4,530,668 161,177,249 -- -- -- -- -- 660,719 61,932,874 43,719,375 272,020,885 286,222,832 DEFERRED INFLOWS OF RESOURCES $ 1,523,348 $ 11,188,860 $ 10,571,081 $ 6,897,966 2018 Annual Financial Report 145 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Capital Projects Higher Education Endowment Unrestricted (Deficit) TOTAL NET POSITION East Georgia State College Fort Valley State University Georgia College & State University Georgia Gwinnett College $ 26,102,938 $ 62,458,039 $ 63,216,913 $ 81,350,698 37,100 168,882 -- -- -- (23,515,203) -- 2,911,384 -- -- -- (65,166,609) 4,200,208 2,048,983 -- -- -- (108,623,496) -- 518,191 -- -- -- (59,150,014) $ 2,793,717 $ 202,814 $ (39,157,392) $ 22,718,875 146 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 Georgia Highlands College Georgia Institute of Technology Georgia Southern University Georgia Southwestern University ASSETS Current Assets Cash and Cash Equivalents $ Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Affiliated Organizations Component Units Primary Government Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Primary Government Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES $ 5,268,479 $ -- -- -- 2,148,092 -- -- 1,956 -- -- -- 6,915,789 -- -- -- -- -- 53,891 -- 14,388,207 205,580,549 $ 91,624,306 -- -- 12,032,839 -- -- -- 106,175,231 -- -- 23,263,434 -- -- -- -- 1,006,490 25,194,259 -- 464,877,108 64,648,055 $ 938,014 -- -- 6,743,863 -- -- 2,531,387 -- -- -- 11,738,397 -- -- -- -- 4,452,338 2,800,395 -- 93,852,449 -- -- -- 115,505 -- -- -- -- -- -- -- -- -- -- -- 40,226 49,172,382 49,328,113 63,716,320 4,979,273 $ -- -- -- 2,275,907 -- -- -- -- 12,727,073 -- -- -- -- 42,150 -- 83,394,723 1,917,030,340 2,015,470,193 2,480,347,301 140,174,893 $ -- 2,596,400 -- 1,999,583 -- -- -- 4,176,858 1,956,907 -- -- -- -- -- -- 5,830,035 637,755,112 654,314,895 748,167,344 45,610,618 $ 5,926,465 3,060,116 -- 486,617 10,650 -- -- 35,219 -- -- -- 1,150,055 -- -- -- -- 647,295 285,319 -- 11,601,736 -- -- -- 267,598 -- -- -- 335,628 118,999 -- -- -- -- -- -- -- 81,471,833 82,194,058 93,795,794 4,632,840 2018 Annual Financial Report 147 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Interest Payable (Added for SAO) Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Georgia Highlands College Georgia Institute of Technology Georgia Southern University Georgia Southwestern University $ 797,572 $ 79,422,180 $ 6,846,803 $ 915,145 137,470 2,563,071 2,176,346 322,641 80,312 640,267 724,968 73,270 -- 9,976,327 2,007,432 -- -- 3,319,158 526,564 -- -- -- -- -- -- 232,776 288,774 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 7,369,708 22,435,153 9,169,939 3,777,596 2,637 9,042,094 327,050 22,415 436,532 15,127,326 2,040,372 89,134 52,172 229,262 118,075 -- -- 1,099,763 146,285 -- -- 4,357,656 792,294 1,262,933 -- 16,485,968 8,847,509 -- -- -- -- -- -- -- -- -- -- -- -- -- -- 263,040 -- -- -- -- -- -- 728,676 38,386,669 6,869,574 591,564 9,605,079 203,580,710 40,881,985 7,054,698 Non-Current Liabilities Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- -- -- -- -- 15,733,671 -- -- -- -- -- -- 235,610 28,172,493 18,770,638 62,912,412 72,517,491 -- -- -- -- -- -- -- 5,235,273 78,794,002 326,202,403 -- -- -- -- -- 14,668,361 627,617,932 439,151,881 1,491,669,852 1,695,250,562 -- -- -- -- -- -- -- 963,164 20,333,595 213,117,609 -- -- -- -- -- 2,478,178 272,905,117 146,782,411 656,580,074 697,462,059 -- -- -- -- -- -- -- -- 33,524,503 -- -- -- -- -- -- 341,544 29,610,660 13,125,110 76,601,817 83,656,515 DEFERRED INFLOWS OF RESOURCES $ 4,403,777 $ 59,496,438 $ 30,490,378 $ 4,171,145 148 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Capital Projects Higher Education Endowment Unrestricted (Deficit) TOTAL NET POSITION Georgia Highlands College Georgia Institute of Technology Georgia Southern University Georgia Southwestern University $ 33,438,711 $ 1,466,887,074 $ 383,654,850 $ 45,489,593 40,227 38,879 -- -- -- (41,743,492) 69,971,535 29,848,244 -- -- -- (700,931,659) 6,222,432 4,449,727 -- -- -- (328,501,484) 486,617 504,216 -- -- -- (35,879,452) $ (8,225,675) $ 865,775,194 $ 65,825,525 $ 10,600,974 2018 Annual Financial Report 149 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 Georgia State University Gordon State College Kennesaw State University Middle Georgia State University ASSETS Current Assets Cash and Cash Equivalents $ Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Affiliated Organizations Component Units Primary Government Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Primary Government Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES $ 189,291,914 $ 5,987,433 -- -- 289,096 -- -- 84,121 22,633,382 -- -- 35,108,884 -- -- -- -- 207,389 5,687,658 -- 259,289,877 -- -- -- 1,414,211 -- -- -- -- 4,392,487 -- -- -- -- 515,788 -- 124,502 982,230,035 988,677,023 1,247,966,900 81,221,944 $ 10,855,016 $ 149,953 -- -- 540,771 -- -- -- -- -- -- 728,827 -- -- -- -- 516,400 182,220 -- 12,973,187 109,183,734 $ 173,008 -- -- 4,194,303 -- -- 5,219,697 1,599,219 -- -- 11,562,554 -- -- -- -- 3,622,861 5,870,678 -- 141,426,054 8,722,683 -- -- -- 38,186 -- -- 159,557 -- -- -- 3,031,889 -- -- -- -- 975,207 110,083 -- 13,037,605 -- -- -- 355,150 -- -- -- -- -- -- -- -- -- -- -- -- 80,618,889 80,974,039 93,947,226 4,193,837 $ -- -- -- 2,098,531 -- -- -- 204,358 561,540 -- -- -- -- -- -- 4,707,634 639,647,001 647,219,064 788,645,118 59,268,214 $ -- -- -- 715,528 -- -- -- 1,911,022 -- -- -- -- -- -- -- 72,628 216,056,826 218,756,004 231,793,609 10,670,240 150 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Interest Payable (Added for SAO) Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Georgia State University Gordon State College Kennesaw State University Middle Georgia State University $ 23,243,376 $ 3,548,887 6,911,798 -- 3,262,911 -- -- 2,546,660 -- -- -- 28,780,646 33,335 2,582,248 296,741 -- 1,936,730 7,127,637 -- -- -- -- -- 12,544,604 92,815,573 525,832 $ 168,104 75,409 -- -- -- -- -- -- -- -- 674,621 95,375 228,564 -- -- -- 1,440,693 -- -- -- -- -- 588,104 3,796,702 11,670,658 $ 2,135,664 671,312 99,181 440,221 -- 211,095 346,542 -- -- -- 19,504,017 1,061,228 1,892,273 282,807 -- 1,218,216 9,234,713 -- -- -- -- -- 8,736,251 57,504,178 350,549 383,021 109,222 34,206 -- -- -- -- -- -- -- 2,613,639 1,398,768 825,010 -- -- -- 2,458,677 -- -- -- -- -- 1,514,903 9,687,995 Non-Current Liabilities Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- -- -- -- -- 32,082,827 187,102,773 -- -- -- -- -- 8,319,032 432,921,805 305,027,775 965,454,212 1,058,269,785 -- -- -- -- -- -- -- -- -- 37,379,413 -- -- -- -- -- 186,537 21,644,451 17,062,758 76,273,159 80,069,861 -- -- -- -- -- -- -- -- 52,813,244 219,778,178 -- -- -- -- -- 2,822,257 246,184,631 167,382,940 688,981,250 746,485,428 -- -- -- -- -- -- -- -- -- 84,181,447 -- -- -- -- -- 759,169 59,915,466 39,942,663 184,798,745 194,486,740 DEFERRED INFLOWS OF RESOURCES $ 72,367,249 $ 4,977,385 $ 79,518,373 $ 12,675,722 2018 Annual Financial Report 151 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Capital Projects Higher Education Endowment Unrestricted (Deficit) TOTAL NET POSITION Georgia State University Gordon State College Kennesaw State University Middle Georgia State University $ 735,167,675 $ 39,915,697 $ 296,117,362 $ 123,740,995 112,042 22,642,917 -- -- -- (559,370,824) -- 7,349 -- -- -- (26,829,229) 4,627,307 1,497,759 -- -- -- (280,332,897) 25,489 43,198 -- -- -- (88,508,295) $ 198,551,810 $ 13,093,817 $ 21,909,531 $ 35,301,387 152 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 Savannah State University South Georgia State College University of Georgia University of North Georgia ASSETS Current Assets Cash and Cash Equivalents $ Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Affiliated Organizations Component Units Primary Government Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Primary Government Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES $ 1,666,314 $ 1,140,885 408,276 -- 2,555,237 -- -- 681,264 -- -- -- 2,622,973 -- -- -- -- 66,572 89,109 -- 9,230,630 -- -- -- 844,039 -- -- -- -- 732,966 -- -- -- -- 127,395 38,726 7,872,002 153,620,222 163,235,350 172,465,980 10,276,091 $ 4,325,485 $ 24,429 -- -- 901,437 -- -- 191,404 -- -- -- 787,283 -- -- -- -- 257,709 520,040 -- 7,007,787 235,230,548 $ 67,426,251 11,801,107 51,148 4,743,123 -- -- -- 45,940,821 -- -- 35,964,311 -- -- -- -- 5,532,395 5,024,625 -- 411,714,329 33,358,763 994,220 1,971,785 -- 3,374,109 -- -- 111,826 -- -- -- 3,723,679 -- -- -- -- 1,403,721 123,001 -- 45,061,104 -- -- -- 266,644 -- -- -- 78,563 49,272 -- -- -- 468,544 -- -- 431,446 48,759,364 50,053,833 57,061,620 4,041,305 $ -- -- -- 1,552,532 -- -- -- 103,732,158 8,834,072 -- -- -- -- 9,184,107 -- 97,685,316 1,864,340,933 2,085,329,118 2,497,043,447 197,297,459 $ -- -- -- 983,809 -- -- -- 5,053,807 1,205,707 -- -- -- -- 1,070,892 -- 1,465,472 286,116,745 295,896,432 340,957,536 46,072,421 2018 Annual Financial Report 153 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Interest Payable (Added for SAO) Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Savannah State University South Georgia State College University of Georgia University of North Georgia $ 1,425,266 $ 318,087 85,386 -- -- -- -- -- -- -- -- 3,402,933 -- 2,806,892 2,066 -- -- 2,562,402 -- -- -- -- 190,381 954,816 11,748,229 198,924 $ 115,679 28,472 -- -- -- -- -- -- -- -- 543,018 17,730 284,793 328,735 -- -- -- -- -- -- -- -- 440,679 1,958,030 25,718,346 $ 13,705,101 -- 7,273,478 2,763,866 -- -- 692,665 -- -- -- 52,035,063 1,317,165 3,903,943 799,601 338,098 54,708 8,121,305 -- -- -- 178,500 -- 32,549,037 149,450,876 1,849,190 704,210 429,274 140,636 57,887 -- 304 -- -- -- -- 6,915,703 995,566 1,140,789 36,737 -- -- 4,021,729 -- -- -- -- -- 2,973,928 19,265,953 Non-Current Liabilities Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- -- -- -- -- -- 92,563,057 -- -- -- -- -- 1,094,592 48,901,517 34,967,142 177,526,308 189,274,537 -- -- -- -- -- -- -- -- 34,291,483 -- -- -- -- -- -- 127,150 18,246,179 10,169,344 62,834,156 64,792,186 -- -- -- -- -- -- -- 1,422,134 26,334 231,616,246 -- -- -- 644,300 -- 16,979,735 1,016,303,379 699,803,870 1,966,795,998 2,116,246,874 -- -- -- -- -- -- -- -- -- 132,093,853 -- -- -- -- -- 2,339,906 130,614,399 92,422,208 357,470,366 376,736,319 DEFERRED INFLOWS OF RESOURCES $ 8,154,098 $ 2,768,707 $ 78,649,841 $ 12,204,517 154 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Capital Projects Higher Education Endowment Unrestricted (Deficit) TOTAL NET POSITION Savannah State University South Georgia State College University of Georgia University of North Georgia $ 54,563,192 $ 15,698,147 $ 1,614,484,996 $ 154,308,600 7,832,124 1,075,503 -- -- -- (78,157,383) 311,490 193,657 -- -- -- (22,661,262) 91,810,334 91,368,953 -- -- -- (1,298,220,092) 2,669,514 2,409,431 -- -- -- (161,298,424) $ (14,686,564) $ (6,457,968) $ 499,444,191 $ (1,910,879) 2018 Annual Financial Report 155 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Affiliated Organizations Component Units Primary Government Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Primary Government Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES University of West Georgia Valdosta State University University System Office $ 52,821,835 $ 35,088,948 $ 713,226,001 1,875,294 295,101 3,983,913 -- -- 298,838,266 -- -- -- 952,614 -- -- 87,620 -- -- -- 4,826,229 -- -- -- -- 1,219,632 1,889,354 -- 63,672,578 7,935,388 -- -- 262,757 -- -- -- 1,830,867 -- -- -- -- 15,995 141,312 -- 45,570,368 910,591 -- -- 32,022 -- -- -- 121,133,455 146,285 -- -- -- 518,308 572,823 2,389,105 1,141,750,769 -- -- -- 1,357,248 -- -- -- -- 3,013,926 -- -- -- -- 877,965 -- -- 289,700,566 294,949,705 358,622,283 -- -- -- 1,252,123 -- -- -- -- 36,959 -- -- -- -- 32,789 -- 8,750,674 298,941,789 309,014,334 354,584,702 -- -- -- -- -- -- -- -- 963,164 -- -- -- -- -- -- 10,507,122 497,109,190 508,579,476 1,650,330,245 $ 39,030,585 $ 19,380,986 $ 17,433,101 156 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Interest Payable (Added for SAO) Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Non-Current Liabilities Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES University of West Georgia Valdosta State University University System Office $ 5,996,302 $ 2,877,465 $ 14,280,247 803,058 611,549 207,009 1,252,429 906,850 33,467,179 500,407 -- -- 143,261 104,498 35,973 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 5,524,645 4,885,344 1,323,056 -- 579,784 -- 648,257 1,919,602 802,026,583 62,672 877 -- -- -- -- 1,417,033 503,095 2,452,526 2,778,376 4,968,838 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 3,106,287 2,351,482 3,030,993 22,232,727 19,709,384 856,823,566 -- -- -- -- -- -- -- -- 40,357,005 119,217,342 -- -- -- -- -- 1,721,638 127,192,454 79,587,691 368,076,130 390,308,857 -- -- -- -- -- -- -- -- 4,021,750 161,987,845 -- -- -- -- -- 1,503,332 105,742,575 56,823,427 330,078,929 349,788,313 -- -- -- -- -- -- -- -- 36,949,378 -- -- -- -- -- -- 1,858,334 44,442,997 52,468,368 135,719,077 992,542,643 $ 9,554,982 $ 23,056,037 $ 523,111,051 2018 Annual Financial Report 157 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Capital Projects Higher Education Endowment Unrestricted (Deficit) TOTAL NET POSITION University of West Georgia Valdosta State University University System Office $ 127,097,271 $ 126,202,268 $ 286,158,972 -- 5,026,493 -- -- -- (134,334,735) 4,535,787 4,558,323 -- -- -- (134,175,040) 3,612,043 11,732,523 -- -- -- (149,393,886) $ (2,210,971) $ 1,121,338 $ 152,109,652 158 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Affiliated Organizations Component Units Primary Government Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Inventories Prepaid Items Other Assets Total Current Assets Non-Current Assets Accounts Receivable, net Affiliated Organizations Component Units Primary Government Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases - Primary Government Investment in Capital Leases - Other Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES Preliminary Total Elimination/ Consolidation Entries Consolidated Total $ 1,821,764,196 $ 213,067,505 313,138,382 537,765 70,473,727 -- -- 12,681,594 216,911,224 -- -- 316,808,975 146,285 -- -- -- 22,991,105 68,766,262 2,389,105 3,059,676,125 (476,640,987) $ -- (246,681,026) -- -- -- -- -- -- -- -- (45,414,679) (146,285) -- -- -- -- -- 2,044,332 (766,838,645) 1,345,123,209 213,067,505 66,457,356 537,765 70,473,727 -- -- 12,681,594 216,911,224 -- -- 271,394,296 -- -- -- -- 22,991,105 68,766,262 4,433,437 2,292,837,480 3,561,255 2,596,400 -- 20,767,719 -- -- -- 197,905,258 38,971,461 -- -- -- 468,544 11,970,725 38,726 243,981,033 9,878,403,906 10,398,665,027 13,458,341,152 $ 900,419,269 $ -- -- -- (20,767,719) -- -- -- -- (963,164) -- -- -- (3) -- -- -- -- (21,730,886) (788,569,531) (26,564,289) $ 3,561,255 2,596,400 -- -- -- -- -- 197,905,258 38,008,297 -- -- -- 468,541 11,970,725 38,726 243,981,033 9,878,403,906 10,376,934,141 12,669,771,621 873,854,980 2018 Annual Financial Report 159 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Interest Payable (Added for SAO) Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Non-Current Liabilities Due to Affiliated Organizations Due to Component Units Due to Primary Government Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations - External Lease Purchase Obligations - Component Units Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES 160 University System of Georgia Preliminary Total Elimination/ Consolidation Entries Consolidated Total $ 206,725,289 $ 34,234,924 53,986,945 23,128,430 11,775,797 -- 2,353,421 8,218,847 -- -- 321,895 238,360,759 16,650,806 849,893,989 3,219,540 1,584,146 22,511,200 80,500,006 -- -- -- 441,540 800,662 149,723,938 1,704,432,134 (45,578,682) $ -- -- -- -- 656,599 -- -- -- -- (321,895) -- -- (744,060,451) (199,982) (146,285) 2,196,126 (2,196,126) -- -- -- -- -- -- (789,650,696) 161,146,607 34,234,924 53,986,945 23,128,430 11,775,797 656,599 2,353,421 8,218,847 -- -- -- 238,360,759 16,650,806 105,833,538 3,019,558 1,437,861 24,707,326 78,303,880 -- -- -- 441,540 800,662 149,723,938 914,781,438 -- -- -- -- -- -- -- 7,620,571 528,480,832 2,282,138,656 -- -- -- 644,300 1,005,250 79,296,531 4,219,725,872 2,865,433,724 9,984,345,736 11,688,777,870 $ 1,065,067,171 $ -- -- -- -- -- -- -- (963,164) (19,442,850) 19,442,850 -- -- -- -- -- -- -- -- (963,164) (790,613,860) (26,118,039) $ -- -- -- -- -- -- -- 6,657,407 509,037,982 2,301,581,506 -- -- -- 644,300 1,005,250 79,296,531 4,219,725,872 2,865,433,724 9,983,382,572 10,898,164,010 1,038,949,132 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY INSTITUTION (Unaudited) JUNE 30, 2018 NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Capital Projects Higher Education Endowment Unrestricted (Deficit) TOTAL NET POSITION Preliminary Total Elimination/ Consolidation Entries Consolidated Total $ 6,666,852,110 $ --$ 6,666,852,110 204,781,419 218,195,579 -- -- -- (5,484,913,728) -- (218,195,579) 11,658,263 186,070,195 20,467,121 1,598,079 204,781,419 -- 11,658,263 186,070,195 20,467,121 (5,483,315,649) $ 1,604,915,380 $ 1,598,079 $ 1,606,513,459 2018 Annual Financial Report 161 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) OPERATING REVENUES Student Tuition and Fees (net) Federal Appropriations Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Faculty Salaries Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses Operating Income (Loss) Abraham Baldwin Agricultural College Albany State University Atlanta Metropolitan State College Augusta University $ 12,856,650 $ 18,500,136 $ -- -- 5,036,451 $ -- 93,857,633 -- 286,078 1,231,481 70,469 154,021 135,694 8,727,846 1,174,740 1,912,960 265,660 7,768 2,470,715 97,899 37,823 6,552 148,756 56,886,393 249,251,459 194,971,205 9,949,193 351,580 2,229,539 2,476,983 2,955,698 259,647 425,159 550,257 332,192 -- -- 1,029,675 11,927,280 240,597 6,177,962 347,387 348,538 1,790,468 570,118 -- -- 509,580 -- 68,831 42,314 -- -- 301,135 11,261 -- -- 276,436 3,885,170 1,571,511 1,747,076 3,224,433 2,624,941 3,152,835 4,321,021 -- -- 255,719 24,993,543 52,501,040 8,498,173 626,050,169 10,899,773 12,998,086 10,187,148 261,874 485,341 7,696,465 1,638,881 15,133,271 4,710,143 17,815,097 25,447,447 16,154,344 515,114 589,977 8,626,863 4,020,162 24,333,115 9,851,395 4,118,378 8,806,730 4,907,060 126,794 114,694 3,003,377 938,653 3,291,597 1,029,845 185,168,284 259,122,629 159,263,285 529,034 4,289,898 9,498,208 11,999,032 227,836,534 28,110,779 64,010,982 107,353,514 26,337,128 885,817,683 $ (39,017,439) $ (54,852,474) $ (17,838,955) $ (259,767,514) 162 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Abraham Baldwin Agricultural College Albany State University Atlanta Metropolitan State College Augusta University $ 24,770,790 $ 35,730,522 $ 10,649,511 $ 225,140,575 12,868,081 45,623 581,040 665,093 97,284 (1,125,978) (390,770) 18,752,235 -- 2,586 2,134,666 79,986 (6,099,497) (121,776) 5,163,679 -- -- 860,148 -- (524,287) (52,566) 10,160,620 -- 10,138,215 14,605,305 1,973,790 (2,015,506) (3,049,805) Net Nonoperating Revenues 37,511,163 50,478,722 16,096,485 256,953,194 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses (1,506,276) (4,373,752) (1,742,470) (2,814,320) Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item -- 1,120,732 -- -- -- -- 25,080,847 100,000 -- -- -- 8,040,995 -- -- -- -- 31,495,205 20,000 -- -- Total Other Revenues, Expenses, Gains or Losses 1,120,732 25,180,847 8,040,995 31,515,205 Change in Net Position Net Position, Beginning of Year, Restated (385,544) 31,518,811 20,807,095 (17,445,223) 6,298,525 (5,074,991) 28,700,885 (261,767,176) Net Position, End of Year $ 31,133,267 $ 3,361,872 $ 1,223,534 $ (233,066,291) 2018 Annual Financial Report 163 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) OPERATING REVENUES Student Tuition and Fees (net) Federal Appropriations Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Faculty Salaries Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses Operating Income (Loss) Clayton State University College of Coastal Georgia Columbus State University Dalton State College $ 26,147,493 $ -- 7,452,994 $ -- 45,974,126 $ -- 9,812,800 -- 1,497,242 30,584 239,267 1,732,926 25,591 20,002 -- -- 27,247 3,032 1,897,036 56,147 224,006 3,775,475 42,637 -- 121,908 1,330,633 18,525 -- 7,322,511 2,766,162 398,368 509,018 680,227 2,332,636 376,513 -- -- 597,344 963,272 310,618 1,992,701 -- -- 1,172,482 1,028,517 -- -- 185,471 4,082,306 440,101 504,408 1,474,066 672,674 2,732,421 329,370 -- -- 691,398 420,932 304,416 736,994 619,371 287,447 997,369 475,389 -- -- 315,498 44,655,882 13,156,336 62,896,171 15,441,282 20,215,035 21,569,019 15,177,078 238,087 398,652 9,127,747 2,711,990 14,440,662 6,095,009 8,831,185 9,209,651 6,291,418 73,533 267,470 3,134,357 910,831 7,279,633 2,982,013 26,740,885 30,975,041 21,695,991 359,647 797,813 11,211,320 3,910,658 23,525,912 5,325,860 11,323,810 8,759,856 8,568,247 157,673 281,360 5,622,650 840,446 6,923,871 2,004,163 89,973,279 38,980,091 124,543,127 44,482,076 $ (45,317,397) $ (25,823,755) $ (61,646,956) $ (29,040,794) 164 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Clayton State University College of Coastal Georgia Columbus State University Dalton State College $ 25,534,925 $ 15,280,604 $ 41,002,242 $ 16,867,093 18,345,513 -- 511,042 786,881 111,433 (2,948,408) 124,246 7,093,774 54,594 1,095,722 352,593 22,123 (601,289) 18,968 15,508,384 -- 3,645,095 137,138 379,790 (2,375,307) (11,164) 11,543,786 -- -- 1,064,216 6,767 (315,780) (33,266) Net Nonoperating Revenues 42,465,632 23,317,089 58,286,178 29,132,816 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses (2,851,765) (2,506,666) (3,360,778) 92,022 Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item -- 1,613,973 -- -- -- -- 103,909 -- -- -- -- 1,121,279 28,500 -- -- -- 19,801 509,042 -- -- Total Other Revenues, Expenses, Gains or Losses 1,613,973 103,909 1,149,779 528,843 Change in Net Position Net Position, Beginning of Year, Restated (1,237,792) (19,705,726) (2,402,757) 30,125,695 (2,210,999) (21,379,650) 620,865 1,653,986 Net Position, End of Year $ (20,943,518) $ 27,722,938 $ (23,590,649) $ 2,274,851 2018 Annual Financial Report 165 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) OPERATING REVENUES Student Tuition and Fees (net) Federal Appropriations Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Faculty Salaries Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses Operating Income (Loss) East Georgia State College Fort Valley State Univesity Georgia College & State University Georgia Gwinnett College $ 4,096,626 $ 8,058,541 $ 58,669,401 $ 34,913,213 -- 5,624,558 -- -- 90,755 221,735 5,250 1,470 1,489 550,360 50,049 33,043 309,919 270,271 436,349 60,317 51,745 2,665,498 85,012 355,489 212,384 550,042 198,920 20,483 557,094 99,378 1,163,029 215,090 66,548 609,480 4,166 -- -- 94,132 7,524,903 43,999 4,594,507 202,218 377,842 1,542,870 1,073,645 -- -- 562,435 14,575,794 1,179,702 7,617,953 1,613,729 -- 2,418,077 324,100 -- -- 405,788 7,820,239 771,778 841,177 2,579,790 666,644 4,060,136 229,622 -- -- 323,790 7,226,242 30,819,160 90,103,465 53,543,707 5,156,419 5,854,580 5,056,032 83,103 132,915 4,472,211 576,869 3,941,171 856,496 9,286,875 20,228,591 10,934,740 595,598 973,805 4,891,264 4,338,801 20,940,389 6,357,597 29,450,286 34,192,834 26,434,560 312,520 1,341,618 3,058,703 3,383,616 36,378,887 9,258,870 39,689,450 25,678,286 23,877,426 400,211 689,376 12,136,878 2,594,106 19,344,514 8,637,290 26,129,796 78,547,660 143,811,894 133,047,537 $ (18,903,554) $ (47,728,500) $ (53,708,429) $ (79,503,830) 166 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) East Georgia State College Fort Valley State Univesity Georgia College & State University Georgia Gwinnett College $ 9,237,733 $ 23,075,207 $ 40,028,859 $ 56,374,528 8,323,618 53,017 321,871 555,246 11,972 (146) (4,774) 24,893,326 550 821,515 551,929 6,442 (2,976,721) 184,020 7,126,821 202,047 1,750,141 820,408 806,881 (6,142,237) (36,727) 32,794,988 -- -- 160,541 154,063 (8,159,184) 28,764 Net Nonoperating Revenues 18,498,537 46,556,268 44,556,193 81,353,700 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses (405,017) (1,172,232) (9,152,236) 1,849,870 Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item -- 808,696 -- -- -- 155,488 3,011,134 -- -- -- -- 10,670,162 959,013 6,395 -- -- 251,701 697,702 -- 116,656 Total Other Revenues, Expenses, Gains or Losses 808,696 3,166,622 11,635,570 1,066,059 Change in Net Position Net Position, Beginning of Year, Restated 403,679 2,390,038 1,994,390 (1,791,576) 2,483,334 (41,640,726) 2,915,929 19,802,946 Net Position, End of Year $ 2,793,717 $ 202,814 $ (39,157,392) $ 22,718,875 2018 Annual Financial Report 167 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) OPERATING REVENUES Student Tuition and Fees (net) Federal Appropriations Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Faculty Salaries Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses Operating Income (Loss) Georgia Highlands College Georgia Institute of Technology Georgia Southern University Georgia Southwestern University $ 12,721,877 $ 369,856,163 $ 150,017,841 $ 12,923,287 -- -- -- -- 403,276 313,013 382,790 330,089 127,133 613,088,605 8,128,923 247,095,986 41,222,226 320,481 6,833,485 483,077 12,053,469 3,951,309 249,830 347,481 215,144 2,096,830 59,067 27,644 -- 208,597 350 121,034 -- 1,205,387 247,609 -- -- 299,426 78,416,871 2,123,508 3,691,759 19,481,289 11,377,704 -- 1,998,981 -- -- 9,727,043 34,402,927 9,984,063 24,329,302 4,448,758 4,547,552 19,715,292 2,603,889 -- -- 3,611,792 4,366,509 1,087,405 2,795,753 72,276 348,650 1,002,281 375,632 -- -- 225,521 16,360,581 1,406,529,539 277,232,586 25,943,480 9,750,784 10,001,083 7,080,906 128,219 292,319 6,745,109 1,415,827 8,759,108 1,848,449 443,337,865 382,938,825 240,952,557 677,900 28,814,018 17,994,648 31,242,530 415,752,971 99,006,038 90,881,499 116,691,529 80,749,051 1,176,413 4,115,812 27,502,162 14,394,136 107,249,462 34,279,322 9,790,494 9,348,400 8,001,535 183,750 318,914 2,890,535 1,870,706 11,179,567 3,484,246 46,021,804 1,660,717,352 477,039,386 47,068,147 $ (29,661,223) $ (254,187,813) $ (199,806,800) $ (21,124,667) 168 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Georgia Highlands College Georgia Institute of Technology Georgia Southern University Georgia Southwestern University $ 17,528,243 $ 291,283,120 $ 133,567,038 $ 12,879,048 11,867,161 -- -- 270,068 2,551 (898,615) -- 12,545,724 -- -- 1,498,581 20,468,916 (24,133,749) 6,900,438 45,445,425 -- -- 7,282,379 1,008,057 (10,783,644) (406,583) 5,244,613 -- -- 1,088,612 114,998 (1,667,764) -- Net Nonoperating Revenues 28,769,408 308,563,030 176,112,672 17,659,507 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses (891,815) 54,375,217 (23,694,128) (3,465,160) Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item -- 412,621 -- -- -- -- 8,360,630 140,907 322,447 (21,437,060) -- 8,790,657 268,768 -- 1,425,076 -- 236,190 -- -- -- Total Other Revenues, Expenses, Gains or Losses 412,621 (12,613,076) 10,484,501 236,190 Change in Net Position Net Position, Beginning of Year, Restated (479,194) (7,746,481) 41,762,141 824,013,053 (13,209,627) 79,035,152 (3,228,970) 13,829,944 Net Position, End of Year $ (8,225,675) $ 865,775,194 $ 65,825,525 $ 10,600,974 2018 Annual Financial Report 169 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) OPERATING REVENUES Student Tuition and Fees (net) Federal Appropriations Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Faculty Salaries Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses Operating Income (Loss) Georgia State University Gordon State College Kennesaw State University Middle Georgia State University $ 296,775,566 $ -- 6,233,502 $ -- 199,435,290 $ -- 22,728,077 -- 82,873,514 10,882,423 55,971,389 24,016,699 177,701 107,906 136,766 4,291 118,415 111,735 1,740,727 564,928 374,293 14,560,244 1,543,310 12,678 11,575 281 982,238 193,777 18,081,307 1,684,311 17,455,763 8,786,936 3,525,000 19,338,612 6,928,142 -- -- 1,757,986 5,308,136 2,105,028 2,609,748 91,287 115,924 673,223 67,971 -- -- 140,643 16,623,733 13,110,592 23,163,050 10,782,630 3,505,173 15,522,822 6,327,609 -- -- 431,777 7,595,067 2,880,292 3,241,867 196,262 251,694 1,622,836 557,078 -- -- 888,410 548,255,349 17,824,575 307,686,178 41,162,132 203,276,295 249,038,686 144,876,807 2,259,937 7,016,091 60,154,443 20,863,659 189,638,364 54,179,977 931,304,259 $ (383,048,910) $ 9,108,403 7,459,458 6,283,205 79,196 267,914 3,217,195 1,622,696 9,726,747 3,208,039 40,972,853 (23,148,278) $ 115,043,096 127,159,301 84,830,407 1,840,126 3,814,479 30,119,620 10,250,657 99,626,043 32,138,956 504,822,685 (197,136,507) $ 22,724,560 19,532,955 16,547,812 227,350 615,716 8,057,478 3,180,913 22,664,518 7,692,671 101,243,973 (60,081,841) 170 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Georgia State University Gordon State College Kennesaw State University Middle Georgia State University $ 267,904,773 $ 13,278,209 $ 138,475,446 $ 33,362,424 104,969,524 -- 4,441,703 1,449,864 2,669,139 (12,107,964) 291,197 9,645,054 -- -- 332,541 104,324 (1,970,035) (23) 63,675,135 400,139 3,804,348 4,456,119 915,610 (15,222,081) (25,044) 15,945,154 1,067,371 558,722 4,581,278 185,320 (4,619,236) 276,137 Net Nonoperating Revenues 369,618,236 21,390,070 196,479,672 51,357,170 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses (13,430,674) (1,758,208) (656,835) (8,724,671) Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item -- 15,915,107 7,383,324 -- 2,143,660 -- 130,282 150,000 -- -- -- 22,073,032 4,701,096 -- -- -- 4,551,792 12,650 -- (12,533,158) Total Other Revenues, Expenses, Gains or Losses 25,442,091 280,282 26,774,128 (7,968,716) Change in Net Position Net Position, Beginning of Year, Restated 12,011,417 186,540,393 (1,477,926) 14,571,743 26,117,293 (4,207,762) (16,693,387) 51,994,774 Net Position, End of Year $ 198,551,810 $ 13,093,817 $ 21,909,531 $ 35,301,387 2018 Annual Financial Report 171 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) OPERATING REVENUES Student Tuition and Fees (net) Federal Appropriations Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Faculty Salaries Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses Operating Income (Loss) Savannah State University South Georgia State College University of Georgia University of North Georgia $ 11,973,674 $ -- 3,399,790 $ -- 464,530,471 $ 14,921,506 75,232,843 -- 9,469,336 104,591 516,288 841,524 48,320 15,319 5,400 -- 20,721 8,632 125,577,562 29,171,147 77,970,277 85,654,546 526,836 -- -- -- 2,810,244 141,632 15,207,654 205,605 8,847,869 1,140,336 578,304 4,095,075 97,627 -- -- 536,350 1,141,084 1,075,680 769,170 6,538 -- 450,799 79,109 -- -- 147,788 56,341,916 5,612,221 52,926,223 23,328,666 23,639,184 35,470,488 677,008 -- -- 1,519,009 9,831,394 6,033,060 9,033,440 5,320,481 949,755 3,307,966 60,278 -- -- 1,464,360 53,662,553 7,120,030 997,867,060 114,185,453 15,672,083 20,767,559 15,113,201 478,017 909,428 6,941,560 3,922,108 26,839,954 7,495,697 4,744,566 5,093,269 3,586,005 335,774 282,857 3,300,558 1,331,381 5,625,497 2,351,605 246,654,366 544,052,732 302,667,640 764,045 20,393,325 39,584,193 36,183,284 281,319,752 91,090,428 50,627,097 52,580,763 44,326,589 597,916 2,069,795 14,462,449 4,801,397 42,354,114 15,461,539 98,139,607 26,651,512 1,562,709,765 227,281,659 $ (44,477,054) $ (19,531,482) $ (564,842,705) $ (113,096,206) 172 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Savannah State University South Georgia State College University of Georgia University of North Georgia $ 24,139,345 $ 11,706,494 $ 479,489,175 $ 71,657,564 17,429,633 -- -- 2,201,771 473,395 (4,778,323) (426,697) 6,945,512 -- 77,612 562,824 25,845 (1,359,356) 258 32,373,460 11,460,394 44,517,904 33,007,317 9,850,979 (13,213,724) 12,792,764 29,976,705 266,947 3,341,633 1,811,373 158,661 (5,817,117) (66,080) Net Nonoperating Revenues 39,039,124 17,959,189 610,278,269 101,329,686 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses (5,437,930) (1,572,293) 45,435,564 (11,766,520) Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item -- 17,727,632 138,973 -- -- -- 461,873 54,900 10,000 -- -- 63,762,860 2,461,303 -- -- -- 34,414,075 -- -- -- Total Other Revenues, Expenses, Gains or Losses 17,866,605 526,773 66,224,163 34,414,075 Change in Net Position Net Position, Beginning of Year, Restated 12,428,675 (27,115,239) (1,045,520) (5,412,448) 111,659,727 387,784,464 22,647,555 (24,558,434) Net Position, End of Year $ (14,686,564) $ (6,457,968) $ 499,444,191 $ (1,910,879) 2018 Annual Financial Report 173 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) OPERATING REVENUES Student Tuition and Fees (net) Federal Appropriations Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Faculty Salaries Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses Operating Income (Loss) University of West Georgia Valdosta State University University System Office $ 78,473,230 $ 60,277,840 $ -- -- 137,100 -- 1,378,916 500,619 1,508,630 610,857 122,218 1,718,227 42,985 1,342,273 901,723 934,656 187,231 -- 103,045 53,524,244 86,899 19,135,160 2,689,974 11,747,964 1,813,189 2,194,379 6,920,703 540,493 -- -- 2,929,548 13,177,060 1,131,572 9,668,150 4,062,798 2,885,888 3,105,816 462,459 -- -- 496,574 9,983,778 -- -- -- -- -- -- -- -- 460,357,457 130,565,880 100,208,021 524,379,754 45,868,115 55,652,471 43,577,350 670,641 1,716,666 10,752,246 4,083,500 47,013,498 14,690,562 37,115,392 35,402,207 27,254,293 2,094,196 1,313,642 15,069,692 6,059,710 33,692,458 17,034,365 -- 43,336,978 17,811,690 612 1,310,995 320,378 6,411,646 648,340,911 23,036,371 224,025,049 175,035,955 740,569,581 $ (93,459,169) $ (74,827,934) $ (216,189,827) 174 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues University of West Georgia Valdosta State University University System Office $ 59,326,040 $ 49,104,734 $ 187,097,423 26,200,897 -- -- 2,027,218 860,050 (8,862,188) (165,289) 22,931,388 177,778 135,063 1,026,448 939,128 (4,400,624) (33,043) 7,384,395 44,629 15,867,159 1,694,749 3,757,285 (1,643,684) (15,199,554) 79,386,728 69,880,872 199,002,402 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses Change in Net Position Net Position, Beginning of Year, Restated Net Position, End of Year (14,072,441) -- 482,912 194,566 -- -- 677,478 (13,394,963) 11,183,992 $ (2,210,971) $ (4,947,062) -- 3,850,565 126,009 4,773 -- 3,981,347 (965,715) 2,087,053 1,121,338 $ (17,187,425) -- 1,303,183 3,398,953 -- -- 4,702,136 (12,485,289) 164,594,941 152,109,652 2018 Annual Financial Report 175 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) OPERATING REVENUES Student Tuition and Fees (net) Scholarship Allowance Federal Appropriations Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Faculty Salaries Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses Operating Income (Loss) Preliminary Total Elimination/ Consolidation Entries Consolidated Total $ 2,090,092,615 $ -- 20,546,064 636,171,446 $ (636,171,446) -- 2,726,264,061 (636,171,446) 20,546,064 916,972,528 303,069,294 598,846,285 248,709,552 5,713,117 (7,193,187) (2,094,097) (416,879) (41,976,388) -- 909,779,341 300,975,197 598,429,406 206,733,164 5,713,117 350,921,636 60,205,984 199,052,595 90,697,229 60,069,227 134,091,466 30,099,799 -- -- 489,780,950 (15,745,680) -- -- -- -- -- -- -- -- (321,032,216) 335,175,956 60,205,984 199,052,595 90,697,229 60,069,227 134,091,466 30,099,799 -- -- 168,748,734 5,598,868,341 (388,458,447) 5,210,409,894 1,673,290,092 2,141,898,966 1,352,206,377 15,167,280 83,614,890 329,592,309 185,498,195 2,353,152,520 492,217,725 8,626,638,354 $ (3,027,770,013) $ -- -- (312,097,230) -- -- -- -- (76,617,090) -- (388,714,320) 255,873 $ 1,673,290,092 2,141,898,966 1,040,109,147 15,167,280 83,614,890 329,592,309 185,498,195 2,276,535,430 492,217,725 8,237,924,034 (3,027,514,140) 176 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY INSTITUTION FOR FISCAL YEAR ENDED JUNE 30, 2018 (Unaudited) NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues Preliminary Total Elimination/ Consolidation Entries Consolidated Total $ 2,314,491,665 $ 2$ 2,314,491,667 585,154,605 13,773,089 91,611,371 85,985,306 45,184,789 (144,762,444) 593,631 -- -- -- -- (66,761) 66,761 (2) 585,154,605 13,773,089 91,611,371 85,985,306 45,118,028 (144,695,683) 593,629 2,992,032,012 -- 2,992,032,012 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses Change in Net Position Net Position, Beginning of Year, Restated Net Position, End of Year (35,738,001) 155,488 265,811,845 21,345,706 343,615 (30,284,826) 257,371,828 221,633,827 1,383,281,553 $ 1,604,915,380 $ 255,873 (35,482,128) -- -- -- -- -- -- 255,873 1,342,206 1,598,079 $ 155,488 265,811,845 21,345,706 343,615 (30,284,826) 257,371,828 221,889,700 1,384,623,759 1,606,513,459 2018 Annual Financial Report 177 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Related Parties Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases Inventories Prepaid Items Other Assets Total Current Assets Abraham Baldwin Agricultural College Foundation, Inc. & Subsidiaries Albany State University Foundation, Inc. Armstrong State University Educational Properties Foundation, Inc. & Subsidiaries Armstrong State University Foundation, Inc. Atlanta Metropolitan State College Projects Foundation, Inc. Atlanta Metropolitan State College Foundation, Inc. $ 3,123,832 $ 1,726,150 $ 1,696,490 $ 3,301,802 $ -- 2,491,242 -- -- -- -- 511,772 -- -- -- -- -- -- -- -- -- -- 60,748 -- -- -- -- -- -- 3,184,580 -- -- -- -- 7,636 -- -- -- 1,727,985 -- -- -- 5,953,013 -- -- -- -- -- -- -- -- 1,271,270 -- -- -- 3,479,532 -- -- -- -- 443,510 -- -- -- -- -- -- -- 3,745,312 277,687 $ 364,263 -- -- -- -- -- -- -- -- -- -- -- -- -- -- 641,950 275,186 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 275,186 Non-Current Assets Accounts Receivable, net Related Parties Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- -- -- -- 22,109,715 -- -- -- 237,925 -- -- -- 7,605,033 29,952,673 33,137,253 -- -- -- -- -- 2,729,381 -- -- 60,722,606 -- 10,871,129 -- -- 596 74,323,712 80,276,725 -- -- -- -- -- -- -- -- 36,773,381 -- 3,228,942 -- -- 2,784,948 42,787,271 46,266,803 -- -- -- 799,648 -- 10,337,990 -- -- -- -- -- -- -- -- 11,137,638 14,882,950 -- -- -- -- -- -- -- -- -- -- -- -- -- 8,745,684 8,745,684 9,387,634 -- -- -- -- -- 199,455 -- -- -- -- -- -- -- -- 199,455 474,641 DEFERRED OUTFLOWS OF RESOURCES $ --$ --$ 2,196,779 $ --$ --$ -- 178 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Abraham Baldwin Agricultural College Foundation, Inc. & Subsidiaries Albany State University Foundation, Inc. Armstrong State University Educational Properties Foundation, Inc. & Subsidiaries Armstrong State University Foundation, Inc. Atlanta Metropolitan State College Projects Foundation, Inc. Atlanta Metropolitan State College Foundation, Inc. $ 22,179 $ 1,674,670 $ 67,449 $ --$ --$ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 8,231,450 62,916 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 568,656 -- -- -- -- -- 10,558 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 285,000 -- -- -- -- -- -- -- -- 1,955,000 1,135,000 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 22,179 3,629,670 10,013,113 62,916 285,000 -- Non-Current Liabilities Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 3,000,000 -- -- -- 9,910,160 -- -- -- -- -- -- -- -- 66,080,354 38,417,901 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 3,000,000 66,080,354 38,417,901 -- 9,910,160 -- 3,022,179 69,710,024 48,431,014 62,916 10,195,160 -- DEFERRED INFLOWS OF RESOURCES -- -- 32,568 -- -- -- NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION 4,605,033 596 9,559,578 1,846,644 6,183,450 1,031,007 9,767,013 7,688,454 $ 30,115,074 $ 10,566,701 $ -- -- -- -- --$ -- 5,920,281 8,352,299 547,454 14,820,034 $ -- -- -- (807,526) (807,526) $ -- -- 142,661 331,980 474,641 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 179 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Related Parties Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases Inventories Prepaid Items Other Assets Total Current Assets AU Health System Inc Augusta University Foundation, Inc. Augusta University Research Institute, Inc. Augusta University College of Dental Medicine Faculty Practice Group d/b/a AU Dental Faculty Practice Group Bainbridge State College Foundation Clayton State University Foundation, Inc. $ 62,015,768 $ 4,196,045 37,961,738 3,671,699 -- -- -- 4,759,717 -- 149,885,409 -- -- 1,186,728 19,105,346 17,410,195 -- 300,192,645 3,599,289 $ 3,253,919 1,482,318 -- -- -- -- 443,489 156,166 52,991 -- -- 1,119,649 -- -- -- 10,107,821 4,381,937 $ -- -- -- 4,154,994 -- -- 7,500 -- -- -- -- -- -- -- -- 8,544,431 1,356,247 $ -- -- -- -- -- -- 1,620,181 -- 55,421 -- -- -- -- 95,544 -- 3,127,393 21,522 $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 21,522 2,843,703 5,078,325 -- 456,391 -- -- -- -- 503,361 66,310 -- -- -- -- 10,226 -- 8,958,316 Non-Current Assets Accounts Receivable, net Related Parties Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- -- -- 14,966,249 108,259,000 -- -- 22,519,524 5,518,129 -- -- -- 256,138,375 407,401,277 707,593,922 -- -- -- 166,876 -- 8,065,133 -- -- 23,975,501 749,766 -- -- 20,046,067 -- 53,003,343 63,111,164 -- -- -- -- -- 4,198,751 -- -- -- -- -- -- -- -- 4,198,751 12,743,182 -- -- -- -- -- 15,142,808 -- -- -- -- -- -- -- -- 15,142,808 18,270,201 -- -- -- -- -- 2,369,878 -- -- -- -- -- -- -- -- 2,369,878 2,391,400 -- -- -- 323,106 -- 8,600,551 -- -- 56,435,768 -- -- -- 1,659,940 7,643,429 74,662,794 83,621,110 DEFERRED OUTFLOWS OF RESOURCES $ --$ --$ --$ --$ --$ -- 180 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities AU Health System Inc Augusta University Foundation, Inc. Augusta University Research Institute, Inc. Augusta University College of Dental Medicine Faculty Practice Group d/b/a AU Dental Faculty Practice Group Bainbridge State College Foundation Clayton State University Foundation, Inc. $ 42,051,559 $ 11,655,786 -- -- -- 35,855,763 -- -- -- -- -- 7,850,066 3,254,167 5,469,281 2,945,000 -- -- -- -- 19,392,373 128,473,995 467,473 $ -- -- -- -- 606,865 -- -- 49,561 -- -- -- -- -- 960,000 -- -- -- -- -- 2,083,899 37,255 $ -- -- -- -- 4,161,470 -- -- -- -- -- 18,536 -- -- -- -- -- -- -- -- 4,217,261 15,037,312 $ -- -- -- -- 679,661 -- -- -- -- -- -- -- -- -- -- -- -- -- -- 15,716,973 --$ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 1,717,090 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 1,717,090 Non-Current Liabilities Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- 16,348,297 60,595,833 17,777,061 129,102,958 -- 14,818,596 -- -- -- 6,165,679 -- 244,808,424 373,282,419 -- -- -- -- -- -- -- 23,118,925 -- -- -- -- -- -- -- 23,118,925 25,202,824 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 4,217,261 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 15,716,973 -- 1,659,940 -- -- -- -- -- -- -- -- -- 4,140,902 -- 64,805,725 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 70,606,567 -- 72,323,657 DEFERRED INFLOWS OF RESOURCES -- -- -- -- -- -- NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION 87,762,033 -- -- 246,549,470 $ 334,311,503 $ -- 19,392,067 15,515,865 3,000,408 37,908,340 $ -- -- 69,973 8,455,948 8,525,921 $ -- -- -- 2,553,228 2,553,228 $ -- -- 2,391,400 -- 2,391,400 $ 7,643,429 3,682,416 6,468,608 (6,497,000) 11,297,453 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 181 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Related Parties Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases Inventories Prepaid Items Other Assets Total Current Assets College of Coastal Georgia Foundation, Inc. Columbus State University Alumni Association, Inc. Columbus State University Athletic Fund, Inc. Columbus State University Foundation, Inc. Columbus State University Research & Service Foundation Dalton State College Athletic Club $ 1,090,643 $ -- -- -- -- -- -- -- 64,074 -- -- -- -- -- 1,023 -- 1,155,740 84,921 $ 6,914 50,312 -- -- -- -- -- -- 2,887 -- -- -- 4,345 9,125 -- 158,504 --$ 180,821 -- -- -- -- -- -- 16,321 -- -- -- -- -- -- 4,225 201,367 2,952,114 $ 6,034,569 -- -- -- -- -- 85,093 8,949,718 7,495 -- -- -- -- 397,610 22,073,651 40,500,250 25,507 $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 25,507 3,773 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 3,773 Non-Current Assets Accounts Receivable, net Related Parties Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- -- 96,117 -- 14,969,434 -- -- -- 255,085 -- -- -- 1,484,853 16,805,489 17,961,229 -- -- -- -- -- -- -- -- -- -- -- -- 237,871 -- 237,871 396,375 -- -- -- -- -- 2,321,212 -- -- -- -- -- -- -- -- 2,321,212 2,522,579 -- -- -- 19,289,923 -- 62,039,588 -- -- -- -- -- -- -- 890,897 82,220,408 122,720,658 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 25,507 -- -- -- -- -- -- -- -- -- -- -- -- -- 1,225,269 1,225,269 1,229,042 DEFERRED OUTFLOWS OF RESOURCES $ --$ --$ --$ --$ --$ -- 182 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Non-Current Liabilities Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION College of Coastal Georgia Foundation, Inc. Columbus State University Alumni Association, Inc. Columbus State University Athletic Fund, Inc. Columbus State University Foundation, Inc. Columbus State University Research & Service Foundation Dalton State College Athletic Club $ --$ 7,605 $ 25,365 $ 735,854 $ --$ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 681,558 14 85,093 8,426,711 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 12,500 -- -- -- -- -- -- -- -- -- -- -- -- 22,957 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 2,457 -- -- 102,301 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 684,015 7,619 110,458 9,277,366 22,957 -- -- -- -- 13,549,790 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 13,946 -- -- 960,932 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 13,946 -- -- 14,510,722 -- -- 697,961 7,619 110,458 23,788,088 22,957 -- -- -- -- -- -- -- 1,484,853 7,031,767 6,465,914 2,280,734 $ 17,263,268 $ -- 106,517 -- 282,239 388,756 $ -- 1,363,583 1,128,357 (79,819) 2,412,121 $ 890,897 47,768,469 50,699,220 (426,016) 98,932,570 $ -- -- -- 2,550 2,550 $ 1,225,269 -- -- 3,773 1,229,042 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 183 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Related Parties Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases Inventories Prepaid Items Other Assets Total Current Assets Dalton State College Foundation, Inc. Darton Boosters, Inc. Darton State College Foundation, Inc. East Georgia State College Foundation, Inc. Fort Valley State University Foundation, Inc. Foundation Properties, Inc. $ 671,875 $ -- -- -- -- -- -- -- 1,334,395 50,000 -- -- -- -- 27,429 -- 2,083,699 23,517 $ -- -- -- -- -- -- -- -- -- -- -- 451,978 -- -- -- 475,495 425,212 $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 425,212 306,881 $ -- -- -- -- -- -- -- 213,638 -- -- -- -- -- -- -- 520,519 2,285,819 $ -- 923,947 -- -- -- -- -- -- 23,369 -- -- 845,579 -- -- -- 4,078,714 6,868,104 -- -- -- -- -- -- 2,628,021 -- 140,948 -- -- -- -- 18,858 2,119 9,658,050 Non-Current Assets Accounts Receivable, net Related Parties Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- -- 3,205,333 77,401 26,142,515 -- -- -- -- -- -- -- 5,689,784 35,115,033 37,198,732 -- -- -- -- -- -- -- -- 21,305,240 349,107 1,637,580 -- -- -- 23,291,927 23,767,422 -- -- -- 18,707 -- 4,191,949 -- -- -- -- -- -- -- 389,919 4,600,575 5,025,787 -- -- -- 544,650 -- 800,620 -- -- -- -- -- -- 176,810 706,146 2,228,226 2,748,745 -- -- -- -- 23,904 -- -- -- 55,894,526 42,264 7,022,670 5,968,279 -- 1,120,788 70,072,431 74,151,145 1,614,653 -- -- -- -- 2,123,818 -- -- -- 588,688 775,631 -- -- 100,977,288 106,080,078 115,738,128 DEFERRED OUTFLOWS OF RESOURCES $ --$ --$ --$ --$ --$ -- 184 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Non-Current Liabilities Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION Dalton State College Foundation, Inc. Darton Boosters, Inc. Darton State College Foundation, Inc. East Georgia State College Foundation, Inc. Fort Valley State University Foundation, Inc. Foundation Properties, Inc. $ 614,115 $ -- -- -- -- -- -- -- -- -- -- -- 2,916,670 -- -- -- -- -- -- -- 3,530,785 --$ -- -- -- -- -- -- -- -- -- -- -- -- -- 515,000 -- -- -- -- -- 515,000 --$ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 926 $ -- -- -- -- 5,597 -- -- -- -- -- -- -- -- -- -- -- -- -- -- 6,523 2,457,901 $ -- -- -- -- -- -- -- -- -- -- -- 292,136 -- 885,000 -- -- -- -- -- 3,635,037 431,130 -- -- -- -- 31,431,045 1,000,000 -- 16,430 -- -- 192,981 -- -- 1,946,555 -- -- -- -- -- 35,018,141 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 3,530,785 -- -- -- -- -- -- -- -- 20,396,223 -- -- -- -- -- -- -- 20,396,223 20,911,223 -- 5,689,784 11,595,908 6,423,388 9,958,867 $ 33,667,947 $ -- -- -- 2,856,199 2,856,199 $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 389,919 1,359,176 602,392 2,674,300 5,025,787 $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 6,523 -- 706,146 176,810 1,853,162 6,104 2,742,222 $ -- -- -- -- -- 252,842 -- 60,045,940 -- -- -- -- -- -- -- 60,298,782 63,933,819 -- -- -- -- -- -- 13,860,075 -- 42,855,445 -- -- -- -- -- -- -- 56,715,520 91,733,661 -- 1,907,503 3,957,224 5,039,904 (687,305) 10,217,326 $ 41,903,901 1,804,840 -- (19,704,274) 24,004,467 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 185 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Related Parties Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases Inventories Prepaid Items Other Assets Total Current Assets Georgia Advanced Technology Ventures, Inc. Georgia College & State University Alumni Association, Inc. Georgia College & State University Foundation Georgia Gwinnett College Foundation, Inc. Georgia Health Sciences Foundation, Inc. Georgia Highlands College Foundation, Inc. $ 5,422,533 $ 92,960 -- -- -- -- -- -- 156,785 98,896 15,668 -- -- -- 27,948 227,214 6,042,004 233,291 $ -- -- -- -- -- -- -- 301,212 -- -- -- -- 8,111 -- -- 542,614 3,257,017 $ -- -- -- -- -- -- -- 304,457 1,295 -- -- -- -- 30,002 -- 3,592,771 613,210 $ -- -- -- -- -- -- 4,548 143,021 59,381 -- -- 4,495,046 -- -- -- 5,315,206 323,160 $ -- 10,848,632 -- -- -- -- 163,152 3,358,852 65,793 -- -- -- -- 42,103 -- 14,801,692 1,212,687 356,137 -- -- -- -- -- -- 4,000 -- -- -- 323,339 -- 8,268 -- 1,904,431 Non-Current Assets Accounts Receivable, net Related Parties Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- -- 598,428 -- 15,000 -- -- -- -- 38,304,169 -- -- 115,225,475 154,143,072 160,185,076 -- -- -- 6,832 -- 8,691,582 -- -- -- 4,500 -- -- -- -- 8,702,914 9,245,528 -- -- -- 361,972 -- 37,828,406 -- -- 84,779,839 945,869 -- -- 13,159,200 1,216,075 138,291,361 141,884,132 -- -- -- 208,920 -- 5,814,352 -- -- 161,166,269 10,857 11,730,393 -- -- 8,262,388 187,193,179 192,508,385 -- -- -- 137,670 -- 2,491,483 -- -- -- -- -- -- 2,513,812 2,330,775 7,473,740 22,275,432 -- -- -- -- -- 2,214,021 -- -- 15,696,134 -- 616,944 -- -- 890 18,527,989 20,432,420 DEFERRED OUTFLOWS OF RESOURCES $ --$ --$ --$ --$ --$ -- 186 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Georgia Advanced Technology Ventures, Inc. Georgia College & State University Alumni Association, Inc. Georgia College & State University Foundation Georgia Gwinnett College Foundation, Inc. Georgia Health Sciences Foundation, Inc. Georgia Highlands College Foundation, Inc. $ 1,024,191 $ -- -- -- -- 1,343,786 -- -- 2,270,401 175,193 -- 134,360 221,023 1,708,100 -- -- -- 561,929 -- -- 7,438,983 1,061 $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 1,061 1,021,259 $ -- -- -- -- 2,000,946 -- -- -- -- 3,404,151 -- -- -- 2,655,000 -- -- -- -- -- 9,081,356 3,404,499 $ -- -- -- -- 52,624 -- -- 618,526 -- -- -- 117,646 -- 3,575,000 -- -- -- -- -- 7,768,295 72,180 $ -- -- -- -- 356,640 -- -- 526,887 -- -- -- -- -- -- 90,485 -- -- -- -- 1,046,192 30,561 -- -- -- -- -- -- -- -- -- -- -- -- -- 445,000 -- -- -- -- -- 475,561 Non-Current Liabilities Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES 587,877 -- -- 1,876,072 -- 6,571,364 52,804,919 61,658,199 -- -- -- -- -- -- -- 123,498,431 130,937,414 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 1,061 -- -- -- -- -- -- -- 92,186,880 808,641 5,479,942 -- -- -- -- -- 98,475,463 107,556,819 -- -- -- -- -- 2,151,394 -- 168,713,233 -- -- -- -- -- -- -- 170,864,627 178,632,922 -- -- -- -- -- -- -- -- 187,097 -- -- -- -- -- -- 187,097 1,233,289 -- -- -- -- -- -- -- 15,776,514 -- -- -- -- -- -- -- 15,776,514 16,252,075 DEFERRED INFLOWS OF RESOURCES -- -- -- -- -- -- NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION 29,412,127 -- 7,128,464 (7,292,929) $ 29,247,662 $ -- 5,851,319 2,776,244 616,904 9,244,467 $ 1,216,075 19,572,735 9,193,328 4,345,175 34,327,313 $ 8,262,388 1,468,963 1,302,018 2,842,094 13,875,463 $ 2,330,775 2,582,665 13,909,247 2,219,456 21,042,143 $ 890 938,301 1,740,066 1,501,088 4,180,345 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 187 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Related Parties Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases Inventories Prepaid Items Other Assets Total Current Assets Georgia Southern University Athletic Foundation, Inc. Georgia Southern University Foundation, Inc. Georgia Southern Housing Foundation, Inc. Georgia Southern University Research & Service Foundation, Inc. Georgia Southwestern State University Foundation, Inc. Georgia State University Alumni Association, Inc. $ 6,383,503 $ 1,751,975 -- -- -- -- -- 286,274 4,199,618 -- -- -- -- -- 5,916 -- 12,627,286 398,389 $ -- -- -- -- -- -- -- 1,048,067 37,405 -- -- -- -- -- -- 1,483,861 2,288,634 $ -- 5,997,280 -- -- -- -- -- -- 32,504 -- -- 8,847,508 -- 73,197 -- 17,239,123 3,503,804 $ -- -- -- 1,173,646 88,487 -- 2,500 -- 2,207,635 -- -- -- 8,546 37,500 -- 7,022,118 20,426 $ 4,478,353 -- -- -- -- -- -- 1,412,975 -- -- -- -- -- 4,903 -- 5,916,657 328,269 -- -- -- -- -- -- -- -- 53,065 -- -- -- -- 31,257 -- 412,591 Non-Current Assets Accounts Receivable, net Related Parties Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES $ -- -- -- -- -- 1,748,000 -- -- 20,305,871 17,333 -- -- -- 2,843,160 24,914,364 37,541,650 --$ -- -- -- 558,061 -- 62,531,868 -- -- -- 2,222,435 -- -- -- 1,554,682 66,867,046 68,350,907 --$ -- -- -- -- -- -- -- -- 213,117,609 -- 31,879,724 -- -- 1,620,000 246,617,333 263,856,456 --$ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 7,022,118 --$ -- -- -- -- -- 31,312,707 -- -- -- 14,879 -- -- -- 161,505 31,489,091 37,405,748 --$ -- -- -- -- -- 1,541,785 -- -- -- 24,246 -- -- -- 14,253 1,580,284 1,992,875 -- 188 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Georgia Southern University Athletic Foundation, Inc. Georgia Southern University Foundation, Inc. Georgia Southern Housing Foundation, Inc. Georgia Southern University Research & Service Foundation, Inc. Georgia Southwestern State University Foundation, Inc. Georgia State University Alumni Association, Inc. $ 445,154 $ -- -- -- -- 287,350 -- -- 488,974 -- -- -- -- -- -- -- -- -- -- -- 1,221,478 226,298 $ -- -- -- -- 58,187 -- -- -- -- -- -- -- -- -- 14,021 -- -- -- -- 298,506 3,921,771 $ -- -- -- -- -- -- -- 566,562 -- -- -- -- -- 7,985,000 -- -- -- -- -- 12,473,333 142,670 $ -- -- -- -- 2,122,934 -- -- -- -- 836,946 -- -- -- -- -- -- -- -- -- 3,102,550 78,042 $ -- -- -- -- 5,377 -- -- -- -- -- -- -- -- -- -- -- -- -- -- 83,419 32,407 -- -- -- -- 27,215 -- -- 20,086 -- -- -- -- -- -- -- -- -- -- -- 79,708 Non-Current Liabilities Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- 512,322 98,958 -- 21,176,036 -- -- -- -- -- -- -- 21,787,316 23,008,794 -- -- -- -- -- -- -- -- 79,515 -- -- -- -- -- -- 79,515 378,021 2,596,400 -- -- -- 10,558 -- -- 218,090,508 -- -- -- -- -- -- -- 220,697,466 233,170,799 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 3,102,550 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 83,419 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 79,708 DEFERRED INFLOWS OF RESOURCES -- -- 75,231 757,394 -- -- NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION 1,874,037 1,554,682 1,620,000 1,346,898 37,090,457 -- 8,277,993 29,327,747 31,879,724 3,033,928 -- (2,889,298) $ 14,532,856 $ 67,972,886 $ 30,610,426 $ -- -- -- 3,162,174 3,162,174 $ 161,505 12,780,422 14,721,033 9,659,369 37,322,329 $ 14,253 -- 44,587 1,854,327 1,913,167 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 189 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Related Parties Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases Inventories Prepaid Items Other Assets Total Current Assets Georgia State University Athletic Association, Inc. Georgia State University Foundation, Inc. Georgia State University Research Foundation Inc. and Affiliates Georgia Tech Alumni Association Georgia Tech Athletic Association Georgia Tech Facilities, Inc. $ 3,302,696 $ 5,866,847 $ 11,607,729 $ -- 22,354,408 2,842,889 -- -- -- -- -- -- -- -- -- -- 12,921,741 488,536 -- -- -- -- 263,403 -- 16,976,376 -- -- -- -- 5,798,990 509,290 -- -- 4,817,806 -- -- -- 39,347,341 -- -- -- 2,600,840 -- 16,858,655 -- -- 2,309,831 -- 13,873,078 -- 50,093,022 509,690 $ -- -- -- -- -- -- -- -- 126,473 -- -- -- 9,032 71,321 -- 716,516 7,935,052 $ -- -- -- -- -- -- 1,034,347 3,327,816 3,871,523 -- -- -- -- 1,203,090 -- 17,371,828 7,332,379 28,177,571 -- -- -- -- -- 2,191,980 -- -- -- -- 9,498,087 -- 256,189 -- 47,456,206 Non-Current Assets Accounts Receivable, net Related Parties Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- -- -- -- -- -- -- -- -- -- -- -- 254,088 254,088 17,230,464 -- -- -- 8,342,840 -- 238,909,631 -- -- 117,046,402 3,864,055 -- -- -- 15,324,667 383,487,595 422,834,936 -- -- -- -- -- 8,954,655 -- -- 70,056,371 -- -- -- -- 8,555,539 87,566,565 137,659,587 -- -- -- -- -- 277,773 -- -- -- -- -- -- -- 309,077 586,850 1,303,366 -- -- -- 4,529,908 -- 109,095,500 -- -- -- 723,496 -- -- -- 164,171,096 278,520,000 295,891,828 6,721,098 -- -- -- -- -- 3,643 -- 215,972,123 3,487,500 32,883,455 -- -- 13,820,576 272,888,395 320,344,601 DEFERRED OUTFLOWS OF RESOURCES $ --$ --$ 8,355,807 $ --$ 16,859,114 $ -- 190 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Georgia State University Athletic Association, Inc. Georgia State University Foundation, Inc. Georgia State University Research Foundation Inc. and Affiliates Georgia Tech Alumni Association Georgia Tech Athletic Association Georgia Tech Facilities, Inc. $ 610,494 $ 3,908,976 $ 1,955,440 $ 17,750 -- -- 5,858 -- -- -- -- -- -- -- -- -- -- 22,687,562 -- -- -- -- -- -- 1,431,256 1,250,000 -- -- -- -- -- 2,339,862 -- 3,296 912,043 -- -- -- -- 18,829 617,900 -- -- 5,145,000 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 2,087,483 14,173,781 24,643,002 84,054 $ -- -- -- -- 16,354 -- -- 209,242 -- -- -- -- -- -- -- -- -- -- 350,071 659,721 4,733,678 $ -- -- -- -- 1,808,231 -- -- 354,537 10,471,740 -- -- 945,963 69,087 1,145,000 -- -- -- 1,279,688 -- 20,807,924 5,735,907 -- -- -- 1,255,140 1,034,347 -- -- 1,235,883 -- -- -- -- -- 11,403,267 -- -- -- -- -- 20,664,544 Non-Current Liabilities Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- -- -- 15,141 -- -- -- -- -- -- -- -- 15,141 2,102,624 -- -- -- -- 5,434,496 -- -- 131,052,210 1,714,796 -- -- -- -- -- -- 138,201,502 152,375,283 -- -- -- -- -- -- -- 81,081,458 -- -- -- -- -- -- -- 81,081,458 105,724,460 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 659,721 -- -- -- -- -- 4,136,573 51,815 214,850,250 -- -- -- 765,928 -- -- -- 219,804,566 240,612,490 -- -- -- 1,587,448 -- -- -- 252,845,825 -- -- -- -- -- -- -- 254,433,273 275,097,817 DEFERRED INFLOWS OF RESOURCES -- -- 13,865,500 -- -- -- NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION 220,118 15,324,667 -- 164,209,327 2,650,111 64,799,156 12,257,611 26,126,503 $ 15,127,840 $ 270,459,653 $ 8,555,539 -- 11,646,077 6,223,818 26,425,434 $ 309,077 -- -- 334,568 643,645 $ (40,473,605) 37,154,723 71,476,970 3,980,364 72,138,452 $ 11,625,686 -- 27,581,430 6,039,668 45,246,784 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 191 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Related Parties Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases Inventories Prepaid Items Other Assets Total Current Assets Georgia Tech Foundation, Inc. Georgia Tech Global, Inc. Georgia Tech Research Corporation Global Center for Medical Innovation Gordon State College Foundation, Inc. & Subsidiaries IgniteHQ $ 9,910,000 $ 11,757,000 -- -- -- -- -- -- 22,493,000 24,041,000 -- -- 6,987,880 -- -- -- 75,188,880 181,757 $ -- -- -- -- -- -- -- 10,000 -- -- -- -- -- -- -- 191,757 76,115,265 $ -- -- -- -- -- -- -- -- 170,816,370 -- -- 346,304 -- 503,747 -- 247,781,686 822,853 $ -- -- -- 48,554 -- -- 71,639 -- 2,007,381 -- -- -- -- 70,432 -- 3,020,859 497,053 $ -- -- -- -- -- -- -- -- 6,407 -- -- 42,206,003 -- -- -- 42,709,463 821,744 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 821,744 Non-Current Assets Accounts Receivable, net Related Parties Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- -- 82,142,000 -- 1,095,524,000 -- -- 110,230,281 24,783,000 -- -- 554,025,000 111,683,000 1,978,387,281 2,053,576,161 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 191,757 -- -- -- -- -- 63 -- -- 4,048,306 -- -- -- -- 934,597 4,982,966 252,764,652 -- -- -- -- -- -- -- -- -- 37,161 -- -- -- 10,797,347 10,834,508 13,855,367 -- -- -- -- -- 9,130,836 -- -- -- 5,442,681 -- -- -- -- 14,573,517 57,282,980 -- -- -- -- -- -- -- -- -- -- -- -- -- 604,617 604,617 1,426,361 DEFERRED OUTFLOWS OF RESOURCES $ --$ --$ --$ --$ --$ -- 192 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Georgia Tech Foundation, Inc. Georgia Tech Global, Inc. Georgia Tech Research Corporation Global Center for Medical Innovation Gordon State College Foundation, Inc. & Subsidiaries IgniteHQ $ 3,077,000 $ -- -- -- -- 7,249,000 -- -- 21,756,000 191,000 -- -- 20,733,000 -- 11,425,000 1,465,000 -- -- -- 409,000 66,305,000 11,097 $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 11,097 296 $ -- -- -- -- 97,118,000 -- -- 53,742,326 -- 28,158,408 5,071,544 -- 384,315 -- -- -- -- -- -- 184,474,889 342,643 $ -- -- -- -- 1,714,675 -- -- 202,075 -- -- -- 50,000 -- -- -- -- -- -- -- 2,309,393 6,457 $ -- -- -- -- -- -- -- -- -- -- -- -- -- 1,031,900 -- -- -- -- -- 1,038,357 -- -- -- -- -- -- -- -- -- -- -- 76,949 -- -- -- -- -- -- -- -- 76,949 Non-Current Liabilities Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES 6,615,000 -- -- -- 8,842,000 46,442,000 -- 236,889,000 14,062,000 -- -- -- -- -- -- 312,850,000 379,155,000 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 11,097 -- -- -- -- -- -- 4,010,295 -- -- -- -- -- -- -- -- 4,010,295 188,485,184 -- -- -- -- 240,080 365,000 -- -- -- -- -- -- -- -- -- 605,080 2,914,473 -- -- -- -- 1,965,087 -- -- 40,273,560 -- -- -- -- -- -- -- 42,238,647 43,277,004 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 76,949 DEFERRED INFLOWS OF RESOURCES -- -- -- -- -- -- NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION 48,844,000 734,346,000 786,558,000 104,673,161 $ 1,674,421,161 $ -- -- 46,104 134,556 180,660 $ 934,597 -- -- 63,344,871 64,279,468 $ 10,797,347 -- -- 143,547 10,940,894 $ -- 3,038,314 730,409 10,237,253 14,005,976 $ 604,617 -- -- 744,795 1,349,412 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 193 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Related Parties Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases Inventories Prepaid Items Other Assets Total Current Assets James M. Dye Foundation, Inc. Kennesaw State University Alumni Association, Inc. Kennesaw State University Athletic Association, Inc. Kennesaw State University Foundation, Inc. Kennesaw State University Research & Service Foundation, Inc. Medical College of Georgia Foundation $ 178,154 $ 414,739 $ 3,891,355 $ 17,918,782 $ 3,755,477 $ 1,425,386 -- -- -- -- -- -- -- -- -- 12,349,804 1,717,998 -- -- -- -- -- -- -- -- -- -- -- 30 7,919 -- -- -- -- 608 -- 186,711 -- -- -- -- -- 751 -- -- -- -- -- -- 415,490 -- -- -- 236,303 500,000 447,911 -- -- -- 379,887 43,069 10,403 5,508,928 -- -- -- 346,542 3,493,880 300,459 -- -- 9,234,713 -- 226,338 -- 43,870,518 -- -- -- 10,065 1,875,658 -- -- -- -- -- 3,000 -- 7,362,198 -- -- -- -- 597,409 -- -- -- -- -- -- -- 2,022,795 Non-Current Assets Accounts Receivable, net Related Parties Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- -- -- -- 2,381,823 -- -- -- -- -- -- -- -- 2,381,823 2,568,534 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 415,490 -- -- -- 218,287 -- -- -- -- -- -- -- -- -- 1,892,994 2,111,281 7,620,209 -- -- -- 5,900,843 -- 15,095,722 -- -- 219,778,178 -- 53,669,323 -- 35,739,920 87,213,893 417,397,879 461,268,397 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 7,362,198 -- -- -- 932,102 16,588 120,894,345 -- -- -- 264,596 -- -- 129,629,157 9,934,459 261,671,247 263,694,042 DEFERRED OUTFLOWS OF RESOURCES $ --$ --$ --$ --$ --$ -- 194 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities James M. Dye Foundation, Inc. Kennesaw State University Alumni Association, Inc. Kennesaw State University Athletic Association, Inc. Kennesaw State University Foundation, Inc. Kennesaw State University Research & Service Foundation, Inc. Medical College of Georgia Foundation $ 89,801 $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 89,801 5,019 $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 5,019 77,622 $ -- -- -- -- -- -- -- 747,320 -- -- -- 392,549 -- -- -- -- -- -- -- 1,217,491 9,473,772 $ -- -- -- -- 1,599,219 -- -- 1,068,340 29,678 -- -- -- -- 12,715,000 35,782 -- -- -- -- 24,921,791 40,998 $ -- -- -- -- 4,145,724 -- -- 983,324 -- -- -- -- -- -- -- -- -- -- -- 5,170,046 -- -- -- -- -- 104,503 -- -- -- -- -- 66,440 5,000,000 -- -- -- -- -- -- -- 5,170,943 Non-Current Liabilities Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 89,801 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 5,019 -- -- -- 625,001 -- 400,000 -- -- -- -- -- -- -- -- -- 1,025,001 2,242,492 -- -- -- -- -- -- -- 362,381,063 55,941 -- -- -- -- -- -- 362,437,004 387,358,795 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 5,170,046 -- -- -- -- -- -- -- -- 869,766 -- -- -- -- -- -- 869,766 6,040,709 DEFERRED INFLOWS OF RESOURCES -- -- -- -- -- -- NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION -- 2,190,554 148,163 140,016 $ 2,478,733 $ -- 54,802 20,000 335,669 410,471 $ 1,100,445 -- 1,711,616 2,565,656 5,377,717 $ (34,972,296) 39,189,061 23,557,184 46,135,653 73,909,602 $ -- -- 527,986 1,664,166 2,192,152 $ 4,934,459 129,629,157 87,382,351 35,707,366 257,653,333 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 195 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Related Parties Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases Inventories Prepaid Items Other Assets Total Current Assets Middle Georgia State University Foundation, Inc. & Subsidiaries Middle Georgia State University Real Estate Foundation, Inc. Savannah State University Foundation, Inc. & Subsidiaries South Georgia State College Foundation, Inc. & Subsidiaries Southern Polytechnic Applied Research Corporation University of Georgia Athletic Association, Inc. $ 185,108 $ 2,185,769 $ 696,120 $ 1,001,737 $ 717,119 $ 56,249,118 394,462 -- -- -- -- -- -- -- 214,602 -- -- -- -- -- -- -- -- -- -- -- -- -- 324,840 -- -- -- -- -- 20,141 -- 924,551 -- -- -- -- -- 61,394,127 -- -- 747,495 -- 7,275 -- 64,334,666 -- -- -- -- -- 243,273 -- -- 2,175,856 -- 6,046 -- 3,335,897 -- -- -- -- -- -- -- -- -- -- -- -- 1,001,737 -- -- -- -- -- -- -- -- -- -- 500 -- 717,619 -- -- -- 69,857 -- 3,152,970 -- -- -- -- 616,863 -- 60,088,808 Non-Current Assets Accounts Receivable, net Related Parties Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- -- 293,396 -- 12,154,909 -- -- -- 73,260 -- -- -- 228,542 12,750,107 13,674,658 -- -- -- -- -- -- -- -- 32,462,372 -- -- 3,434,162 -- 789,332 36,685,866 101,020,532 -- -- -- -- -- -- -- -- 77,394,858 -- 5,405,866 -- -- 150,000 82,950,724 86,286,621 -- -- -- -- -- 4,451,409 -- -- -- -- -- -- -- 330,395 4,781,804 5,783,541 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 717,619 -- -- -- -- -- 53,473,069 -- -- -- 383,531 -- -- -- 316,714,200 370,570,800 430,659,608 DEFERRED OUTFLOWS OF RESOURCES $ --$ --$ --$ --$ --$ 13,353,531 196 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities Middle Georgia State University Foundation, Inc. & Subsidiaries Middle Georgia State University Real Estate Foundation, Inc. Savannah State University Foundation, Inc. & Subsidiaries South Georgia State College Foundation, Inc. & Subsidiaries Southern Polytechnic Applied Research Corporation University of Georgia Athletic Association, Inc. $ 200,812 $ 2,258,105 $ 328,141 $ 107,198 $ 312,578 $ 5,663,152 -- -- -- -- -- 6,953,376 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 317,555 6,936,673 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 34,667,957 -- -- -- -- -- -- 270,448 -- -- -- -- -- -- -- 6,991,675 -- 1,815 -- -- 773,000 200,705 -- -- -- -- -- -- -- -- -- -- 1,710,000 2,160,000 -- -- 5,495,000 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 471,260 4,741,105 9,680,521 107,198 631,948 59,716,158 Non-Current Liabilities Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- 15,000 -- -- -- -- -- -- -- -- -- -- 15,000 486,260 -- -- -- -- -- -- -- 89,584,844 -- -- -- -- -- -- -- 89,584,844 94,325,949 -- -- -- -- -- 1,345,408 -- 71,030,767 -- -- -- -- -- -- -- 72,376,175 82,056,696 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 107,198 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 631,948 -- -- -- -- 379,923 15,836,592 -- 95,207,340 -- 2,784,451 -- -- -- -- -- 114,208,306 173,924,464 DEFERRED INFLOWS OF RESOURCES -- -- -- -- -- -- NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION 228,542 9,497,912 3,461,944 -- $ 13,188,398 $ 789,332 -- 6,334,271 (429,020) 6,694,583 $ 10,614,342 110,000 164,752 (6,659,169) 4,229,925 $ 330,395 2,859,773 309,591 2,176,584 5,676,343 $ -- -- -- 85,671 85,671 $ 210,744,348 -- -- 59,344,327 270,088,675 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 197 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Related Parties Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases Inventories Prepaid Items Other Assets Total Current Assets University of Georgia Foundation University of Georgia Research Foundation, Inc. University of North Georgia Foundation - Dahlonega, Inc. University of North Georgia Real Estate Foundation, Inc. University of West Georgia Athletic Foundation, Inc. University of West Georgia Foundation, Inc. $ 2,018,815 $ 15,430,636 14,066,020 107,512,399 -- -- -- -- 23,975,890 2,184,582 -- -- -- -- 372,179 -- 165,560,521 33,654,301 $ -- -- -- -- -- -- 692,665 -- 30,723,081 -- -- 8,121,304 -- 218,013 19,836,301 93,245,665 (786,199) $ 930,650 -- -- -- -- -- -- 3,262,662 304 -- -- -- -- -- -- 3,407,417 2,463,567 $ 3,972,107 -- -- -- -- -- -- -- -- -- -- 3,929,655 -- 132,313 -- 10,497,642 206,326 $ 248,127 -- -- -- -- -- 56,702 106,954 -- -- -- -- -- -- -- 618,109 1,560,055 4,379,399 -- -- -- -- -- -- 2,743,205 41,659 -- -- 1,417,033 -- 2,818 -- 10,144,169 Non-Current Assets Accounts Receivable, net Related Parties Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- -- 45,461,172 -- 116,124,963 -- -- -- 14,930,888 -- -- 902,418,572 23,642,386 1,102,577,981 1,268,138,502 -- -- -- -- -- 49,419,215 -- -- 231,616,248 824,360 8,192,909 -- -- 19,406,427 309,459,159 402,704,824 -- -- -- 250,654 -- 66,656,588 -- -- -- 63,467 -- -- -- 94,290 67,064,999 70,472,416 -- -- -- -- -- -- -- -- 127,710,333 -- 3,969,228 -- -- 2,738,131 134,417,692 144,915,334 -- -- -- 148,110 -- 750,850 -- -- -- 94 -- -- -- -- 899,054 1,517,163 -- -- -- 5,498,174 -- 31,854,878 -- -- 40,357,004 881,308 10,987,353 -- -- 329,190 89,907,907 100,052,076 DEFERRED OUTFLOWS OF RESOURCES $ --$ 15,086,273 $ --$ --$ --$ -- 198 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities University of Georgia Foundation University of Georgia Research Foundation, Inc. University of North Georgia Foundation - Dahlonega, Inc. University of North Georgia Real Estate Foundation, Inc. University of West Georgia Athletic Foundation, Inc. University of West Georgia Foundation, Inc. $ 1,713,310 $ 1,835,871 $ 5,885 $ 2,692,247 $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 2,539,952 36,473,691 104,242 -- -- -- -- -- -- -- -- -- 1,753,250 2,066,732 -- 414,217 -- 19,836,301 -- -- -- -- -- -- -- -- -- -- 497,395 8,516,222 2,015,319 405,000 -- -- -- -- -- 9,145,000 -- 1,338,755 778,433 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 7,282,340 77,873,817 2,125,446 4,850,219 20,134 $ -- -- -- -- -- -- -- 88,725 -- -- -- -- -- -- -- -- -- -- -- 108,859 1,949,805 -- -- -- -- 56,702 -- -- -- -- 750,850 -- -- -- 1,610,000 -- -- -- -- -- 4,367,357 Non-Current Liabilities Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- 649,103 -- -- -- 15,011,522 -- -- 7,987,174 1,269,901 -- -- -- -- -- 24,917,700 32,200,040 -- -- -- 1,803,676 -- -- -- 245,099,853 -- -- -- -- -- -- -- 246,903,529 324,777,346 -- -- -- -- -- -- -- -- 8,381 -- -- -- -- -- -- 8,381 2,133,827 -- -- -- -- -- 1,215,000 -- 130,793,255 -- -- -- -- -- -- -- 132,008,255 136,858,474 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 108,859 -- -- -- -- -- -- 329,190 43,707,305 85,931 -- -- -- -- -- -- 44,122,426 48,489,783 DEFERRED INFLOWS OF RESOURCES -- -- -- -- -- -- NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION 8,133,469 596,270,687 505,135,826 126,398,480 $ 1,235,938,462 $ 10,890,205 -- 2,427,821 79,695,725 93,013,751 $ 94,290 28,529,662 34,964,854 4,749,783 68,338,589 $ 2,738,131 -- -- 5,318,729 8,056,860 $ -- -- 1,271,794 136,510 1,408,304 $ -- 21,004,125 19,472,285 11,085,883 51,562,293 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 199 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Short-term Investments (Externally Restricted) Accounts Receivable, net Federal Financial Assistance State General Appropriations Margin Allocation Funds Related Parties Pledges and Contributions Other Notes Receivable, net Due From Other Funds Investment in Capital Leases Inventories Prepaid Items Other Assets Total Current Assets University of West Georgia Real Estate Foundation, Inc. University System of Georgia Foundation, Inc. & Affiliates Valdosta State University Auxiliary Services Real Estate Foundation Valdosta State University Foundation, Inc. Walter & Emilie Spivey Foundation Total All CU's & Affiliated Organizations $ 882,631 $ 692,107 $ 2,463,913 $ 6,118,009 $ 4,855,656 13,224,835 -- -- 740,517 -- -- -- -- -- -- 1,612 -- -- -- -- -- -- -- -- 2,659,246 -- -- -- 9,138,050 -- -- -- 1,964,907 45,276 -- -- -- 9,533,603 -- -- -- 25,460,728 -- -- -- -- -- 301,738 -- -- 4,815,329 -- 13,976 -- 7,594,956 -- -- -- -- 1,459,344 -- -- -- -- -- 17,977 -- 7,596,942 12,691 $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 12,691 386,151,047 136,853,263 86,864,940 111,642,101 5,377,194 88,487 -- 19,276,322 105,554,501 470,425,961 15,668 -- 129,069,227 19,515,267 36,153,480 42,153,913 1,549,141,371 Non-Current Assets Accounts Receivable, net Related Parties Due From USO - Capital Liability Reserve Fund Due From Institution - Capital Liability Reserve Fund Pledges and Contributions Other Investments Notes Receivable, net Due From Other Funds Investment in Capital Leases Other Assets Non-current Cash (Externally Restricted) Short-term Investments (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Total Non-Current Assets TOTAL ASSETS -- -- -- -- -- 248,305 -- -- 114,180,350 -- 3,572,705 -- -- -- 118,001,360 127,139,410 -- -- -- -- -- 5,458,580 -- -- 393,272,230 1,865 9,520,925 -- -- -- 408,253,600 433,714,328 -- -- -- -- -- -- -- -- 163,697,876 -- -- -- 11,047,703 227,338 174,972,917 182,567,873 -- -- -- 831,170 -- 39,521,700 -- -- -- 1,058,337 -- -- -- 7,111,623 48,522,830 56,119,772 -- -- -- -- -- 6,697,755 -- -- -- -- -- -- -- 269,567 6,967,322 6,980,013 8,335,751 -- -- 180,864,899 15,084,142 2,435,867,571 3,643 -- 2,690,515,200 67,800,682 234,268,946 9,402,441 1,670,654,052 1,326,159,583 8,638,956,910 10,188,098,281 DEFERRED OUTFLOWS OF RESOURCES $ --$ --$ --$ --$ --$ 55,851,504 200 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) JUNE 30, 2018 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Total Current Liabilities University of West Georgia Real Estate Foundation, Inc. University System of Georgia Foundation, Inc. & Affiliates Valdosta State University Auxiliary Services Real Estate Foundation Valdosta State University Foundation, Inc. Walter & Emilie Spivey Foundation Total All CU's & Affiliated Organizations $ 1,069,570 $ 906,895 $ 2,466,275 $ 149,097 $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 254,333 -- -- -- -- -- 1,865 -- 115,913 -- -- -- 397,764 -- 40,350,000 -- 67,723 -- -- -- -- 3,015,000 7,545,000 3,980,000 289,373 -- -- -- 44,518 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 4,084,570 48,803,760 6,446,275 1,318,721 5,650 $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 5,650 127,585,955 18,626,912 5,858 -- 1,255,140 280,389,632 1,000,000 -- 127,364,100 30,714,470 35,901,400 21,717,469 87,033,518 8,267,512 104,154,850 2,532,997 -- 561,929 1,279,688 20,151,444 868,542,874 Non-Current Liabilities Due to Related Parties Due to Other Funds Due to USO - Capital Liability Reserve Fund Advances (Including Tuition and Fees) Other Liabilities Notes and Loans Payable Lease Purchase Obligations Revenue Bonds and Notes Payable Liabilities Under Split Interest Agreements Interest Rate Swap Pollution Remediation Claims and Judgments Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES -- -- -- -- -- -- -- 118,309,422 -- -- -- -- -- -- -- 118,309,422 122,393,992 -- -- -- -- -- 34,086,201 -- 335,630,633 -- -- -- -- -- -- -- 369,716,834 418,520,594 -- -- -- -- -- -- -- 162,874,394 -- 5,823,186 -- -- -- -- -- 168,697,580 175,143,855 -- -- -- -- -- 1,061,628 -- 3,353,222 161,017 -- -- -- -- -- -- 4,575,867 5,894,588 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 5,650 25,009,007 649,103 -- 5,892,197 33,747,763 220,481,452 139,794,146 3,572,583,517 26,995,137 30,176,076 -- 765,928 -- 6,165,679 -- 4,062,260,005 4,930,802,879 DEFERRED INFLOWS OF RESOURCES -- -- -- -- -- 14,730,693 NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted TOTAL NET POSITION -- -- 227,338 2,339,677 269,567 475,860,382 -- 418,998 -- 37,789,063 -- 2,003,489,198 -- 259,060 -- 10,147,710 -- 1,895,453,516 4,745,418 14,515,676 7,196,680 (51,266) 6,704,796 923,613,117 $ 4,745,418 $ 15,193,734 $ 7,424,018 $ 50,225,184 $ 6,974,363 $ 5,298,416,213 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 201 202 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues Abraham Baldwin Agricultural College Foundation, Inc. & Subsidiaries Albany State University Foundation, Inc. Armstrong State University Educational Properties Foundation, Inc. & Subsidiaries Armstrong State University Foundation, Inc. Atlanta Metropolitan State College Projects Foundation, Inc. Atlanta Metropolitan State College Foundation, Inc. $ --$ --$ --$ -- -- -- -- -- -- 268,466 -- -- 247,820 4,106,867 1,203,146 -- -- -- 1,534,787 784,733 59,614 2,895,420 -- -- -- 645,037 80,376 61,540 4,893,820 -- -- -- -- -- 1,570,370 2,773,516 --$ -- -- -- -- -- -- -- 984,735 -- -- 984,735 --$ -- -- -- -- -- -- -- 801,024 -- -- 801,024 -- -- -- -- -- -- -- -- 315,715 -- -- 315,715 OPERATING EXPENSES Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses 336,124 29,754 354,837 79,036 680,932 17,611 1,038,872 81,286 2,618,452 260,471 -- -- 2,733 134,299 -- 1,951,645 7,932 2,357,080 10,685 -- 38,307 -- -- 10,241 2,258,973 -- 2,318,206 -- -- 46,498 -- 809,382 -- 1,008,655 -- 1,864,535 -- -- -- -- -- -- 28,031 432,176 460,207 -- -- -- -- 203,206 -- 118,777 -- 321,983 Operating Income (Loss) 276,968 2,536,740 455,310 (879,800) 340,817 (6,268) NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues -- -- -- -- -- 838,178 -- 60,750 898,928 -- -- -- -- -- 332,296 (3,344,499) (63,520) (3,075,723) -- -- -- -- -- 95,998 (1,416,122) -- (1,320,124) -- -- -- -- -- 1,042,366 -- -- 1,042,366 -- -- -- -- -- -- (443,691) -- (443,691) -- -- -- -- -- (193) -- -- (193) Income (Loss) Before Other Revenues, Expenses, Gains, or Losses 1,175,896 (538,983) (864,814) 162,566 (102,874) (6,461) Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses -- -- -- 440,529 -- 440,529 -- -- -- 43,072 -- 43,072 -- -- -- -- (8,488,797) (8,488,797) -- -- -- 189,573 -- 189,573 -- -- -- -- -- -- -- 50,300 -- -- -- 50,300 Change in Net Position 1,616,425 (495,911) (9,353,611) 352,139 (102,874) 43,839 Net Position, Beginning of Year, Restated 28,498,649 11,062,612 9,353,611 14,467,895 (704,652) 430,802 Net Position-End of Year $ 30,115,074 $ 10,566,701 $ --$ 14,820,034 $ (807,526) $ 474,641 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 203 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues AU Health System Inc Augusta University Foundation, Inc. Augusta University Research Institute, Inc. Augusta University College of Dental Medicine Faculty Practice Group d/b/a AU Dental Faculty Practice Group Bainbridge State College Foundation Clayton State University Foundation, Inc. $ 4,659,630 $ -- -- 817,829,308 986,098 2,051,622 -- -- -- -- 825,526,658 --$ -- 43,920 789,046 174,859 -- -- -- 1,375,772 912,577 212,272 3,508,446 50,592,029 $ -- 10,156,955 -- 351,258 -- -- -- -- -- -- 61,100,242 --$ -- -- 12,347,101 -- -- -- -- --$ -- -- 12,347,101 --$ -- -- -- -- -- -- -- 253,828 -- -- 253,828 -- -- -- -- 753,713 -- -- -- 4,338,478 -- 84,190 5,176,381 OPERATING EXPENSES Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses 278,131,467 34,129,281 142,150,598 2,775,744 1,378,740 4,399,194 309,801,866 36,175,226 808,942,116 -- -- -- -- 656,961 -- 1,864,933 6,240 2,528,134 -- -- -- -- -- -- 61,088,356 -- 61,088,356 -- -- -- -- -- -- 12,705,660 -- 12,705,660 -- -- -- -- -- -- 154,068 -- 154,068 78,800 -- -- 454,479 668,431 -- 1,895,219 233,529 3,330,458 Operating Income (Loss) 16,584,542 980,312 11,886 (358,559) 99,760 1,845,923 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues 29,932,138 3,083,581 3,227,028 -- -- 11,067,969 (8,513,680) (7,033,260) 31,763,776 -- -- -- -- -- 1,758,828 (879,114) (353,408) 526,306 -- -- -- -- -- 68,514 -- (18,092) 50,422 -- -- -- -- -- 728,972 -- -- 728,972 -- -- -- -- -- -- 28,291 -- 28,291 -- -- -- -- -- 3,484,359 (3,222,826) -- 261,533 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses 48,348,318 1,506,618 62,308 370,413 128,051 2,107,456 Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses -- -- -- -- -- -- -- -- -- -- -- -- (185,163) -- -- -- -- -- -- 587,066 -- -- -- 144,006 -- -- -- -- -- -- (185,163) 587,066 -- -- -- 144,006 Change in Net Position 48,163,155 2,093,684 62,308 370,413 128,051 2,251,462 Net Position, Beginning of Year, Restated 286,148,348 35,814,656 8,463,613 2,182,815 2,263,349 9,045,991 Net Position-End of Year $ 334,311,503 $ 37,908,340 $ 8,525,921 $ 2,553,228 $ 2,391,400 $ 11,297,453 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 204 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues College of Coastal Georgia Foundation, Inc. Columbus State University Alumni Association, Inc. Columbus State University Athletic Fund, Inc. Columbus State University Foundation, Inc. Columbus State University Research & Service Foundation Dalton State College Athletic Club $ --$ -- -- -- 116,394 -- -- -- 840,165 305,062 -- 1,261,621 --$ -- -- 21,187 -- -- -- -- 49,810 -- 7,002 77,999 --$ -- -- 29,000 -- -- -- -- 58,543 -- 1,500 89,043 --$ -- -- 1,390,950 81,934 -- -- -- 13,080,767 5,664,074 39,272 20,256,997 --$ -- -- -- 331 -- -- -- 280 -- -- 611 -- -- -- -- -- -- -- -- 4,743 -- -- 4,743 OPERATING EXPENSES Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses 149,660 8,802 6,813 19,162 667,243 -- 342,714 43,022 1,237,416 2,500 -- -- -- 5,300 -- 80,769 -- 88,569 -- -- -- 605 91,004 -- 94,218 7,224 193,051 1,693,773 146,057 -- 333,190 208,349 -- 10,324,575 14,840 12,720,784 -- -- -- -- -- -- -- -- -- 193,435 -- -- 883 214,875 -- 84,267 883 492,577 Operating Income (Loss) 24,205 (10,570) (104,008) 7,536,213 (272) (487,834) NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 1,207,785 20,586 384,913 111,947 -- 12 -- -- -- -- -- -- -- -- -- -- -- -- 1,207,785 20,586 384,913 111,947 -- 12 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses 1,231,990 10,016 280,905 7,648,160 (272) (487,822) Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 160,937 -- 1,250 2,898,600 -- -- -- -- -- -- -- -- 160,937 -- 1,250 2,898,600 -- -- Change in Net Position 1,392,927 10,016 282,155 10,546,760 (272) (487,822) Net Position, Beginning of Year, Restated 15,870,341 378,740 2,129,966 88,385,810 2,822 1,716,864 Net Position-End of Year $ 17,263,268 $ 388,756 $ 2,412,121 $ 98,932,570 $ 2,550 $ 1,229,042 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 205 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues Dalton State College Foundation, Inc. Darton Boosters, Inc. Darton State College Foundation, Inc. East Georgia State College Foundation, Inc. Fort Valley State University Foundation, Inc. Foundation Properties, Inc. $ --$ --$ -- -- -- -- -- 1,300 -- 1,806,541 -- -- -- 1,746,996 -- 33,175 1,780,171 -- -- -- -- -- -- 1,807,841 --$ -- -- -- 24,000 -- -- -- 101,935 -- -- 125,935 --$ -- -- -- -- -- -- -- 788,641 -- 7,900 796,541 --$ -- -- -- 3,418,528 -- -- -- 1,086,728 -- -- 4,505,256 -- -- -- (365,000) 5,763,296 -- -- -- 35,871 -- 2,170 5,436,337 OPERATING EXPENSES Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses 437,146 -- -- -- 497,955 -- 6,507,048 5,214 7,447,363 -- -- -- -- -- -- 139,981 -- 139,981 -- -- -- -- 61,893 -- 87,738 3,750 153,381 -- -- -- 2,126 320,117 -- 179,883 7,992 510,118 -- -- -- -- -- -- 2,111,433 47,728 2,159,161 244,114 31,133 -- -- -- 33,797 931,635 2,263,692 3,504,371 Operating Income (Loss) (5,667,192) 1,667,860 (27,446) 286,423 2,346,095 1,931,966 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues -- -- -- -- -- 3,061,691 (20,670) -- 3,041,021 -- -- -- -- -- 16,564 (1,616,187) -- (1,599,623) -- -- -- -- -- 291,501 -- -- 291,501 -- -- -- -- -- 83,978 -- -- 83,978 -- -- -- -- -- 923 (2,685,167) -- (2,684,244) -- -- -- -- -- 256,088 (1,827,547) -- (1,571,459) Income (Loss) Before Other Revenues, Expenses, Gains, or Losses (2,626,171) 68,237 264,055 370,401 (338,149) 360,507 Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 1,441,969 -- -- 475 39,438 -- -- -- -- -- -- -- 1,441,969 -- -- 475 39,438 -- Change in Net Position (1,184,202) 68,237 264,055 370,876 (298,711) 360,507 Net Position, Beginning of Year, Restated 34,852,149 2,787,962 4,761,732 2,371,346 10,516,037 23,643,960 Net Position-End of Year $ 33,667,947 $ 2,856,199 $ 5,025,787 $ 2,742,222 $ 10,217,326 $ 24,004,467 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 206 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues Georgia Advanced Technology Ventures, Inc. Georgia College & State University Alumni Association, Inc. Georgia College & State University Foundation Georgia Gwinnett College Foundation, Inc. Georgia Health Sciences Foundation, Inc. Georgia Highlands College Foundation, Inc. $ --$ -- 28,609 364,193 12,927,160 -- -- -- 267,720 $ -- 256,876 13,844,558 --$ -- -- -- -- -- -- -- 139,121 -- 102,700 241,821 --$ -- -- -- 5,150,235 -- -- -- 4,386,738 2,443,949 151,110 12,132,032 --$ -- -- 82,677 9,233,008 -- -- -- 1,589,988 -- -- 10,905,673 --$ -- 1,778,010 353,928 12,300 -- -- -- 3,260,426 -- 3,195,286 8,599,950 -- -- -- 14,944 1,041,433 -- -- -- 409,696 214,472 20 1,680,565 OPERATING EXPENSES Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses 288,973 -- -- -- -- 34,476 6,773,651 2,920,645 10,017,745 138,503 -- -- 238 250,468 -- 136,904 401 526,514 196,359 -- -- 90,380 820,559 60,652 4,902,767 55,157 6,125,874 -- -- -- -- 249,979 -- 1,697,582 457 1,948,018 -- -- 2,862,971 189,071 1,007,122 -- 5,988,505 -- 10,047,669 78,511 -- -- -- 152,574 -- 343,306 155 574,546 Operating Income (Loss) 3,826,813 (284,693) 6,006,158 8,957,655 (1,447,719) 1,106,019 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues -- -- -- -- -- 48,742 (3,230,936) -- (3,182,194) -- -- -- -- -- 679,261 -- (22,373) 656,888 -- -- -- -- -- 4,789,364 (4,192,793) (1,979,146) (1,382,575) -- -- -- -- -- 330,169 (5,261,844) 2,946,555 (1,985,120) -- -- -- -- -- 521,623 (8,769) -- 512,854 -- -- -- -- -- (24,109) (841,810) -- (865,919) Income (Loss) Before Other Revenues, Expenses, Gains, or Losses 644,619 372,195 4,623,583 6,972,535 (934,865) 240,100 Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 581,099 1,185,205 162,420 158,623 -- -- -- -- -- -- 581,099 1,185,205 162,420 158,623 -- -- -- 10,621 -- 10,621 Change in Net Position 644,619 953,294 5,808,788 7,134,955 (776,242) 250,721 Net Position, Beginning of Year, Restated 28,603,043 8,291,173 28,518,525 6,740,508 21,818,385 3,929,624 Net Position-End of Year $ 29,247,662 $ 9,244,467 $ 34,327,313 $ 13,875,463 $ 21,042,143 $ 4,180,345 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 207 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues Georgia Southern University Athletic Foundation, Inc. Georgia Southern University Foundation, Inc. Georgia Southern Housing Foundation, Inc. Georgia Southern University Research & Service Foundation, Inc. Georgia Southwestern State University Foundation, Inc. Georgia State University Alumni Association, Inc. $ --$ -- -- -- 1,336,675 --$ -- -- -- -- --$ -- -- -- 9,899,969 4,395,877 $ 338,235 10,485,993 -- -- --$ -- -- -- 2,459,037 -- -- -- 4,165,229 123,937 4,051 5,629,892 -- -- -- 5,279,054 2,726,726 569,396 8,575,176 -- -- -- -- -- 7,637,541 17,537,510 -- -- -- -- -- 2,449 15,222,554 -- -- -- 2,462,512 -- 543,455 5,465,004 -- -- -- 490,583 -- -- -- -- 96,939 -- 85,703 673,225 OPERATING EXPENSES Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses 1,561,942 20,273 33,882 -- 950,150 -- 912,706 321,992 3,800,945 4,173,306 -- -- 138,273 1,992,915 -- 1,160,291 17,714 7,482,499 -- -- 329,635 -- -- -- 4,199,053 -- 4,528,688 -- -- 88,624 4,492 -- -- 15,088,268 -- 15,181,384 118,468 20,773 -- 16,319 1,183,432 -- 8,422,887 -- 9,761,879 -- -- -- -- 48,361 -- 669,355 -- 717,716 Operating Income (Loss) 1,828,947 1,092,677 13,008,822 41,170 (4,296,875) (44,491) NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues -- -- -- -- -- 21,741 (868,205) -- (846,464) -- -- -- -- -- 861,883 (5,645) -- 856,238 -- -- -- -- -- 587,495 (8,262,293) -- (7,674,798) -- -- -- -- -- 3,624 -- -- 3,624 -- -- -- -- -- 2,372,800 -- 3,849,500 6,222,300 -- -- -- -- -- 69,642 -- -- 69,642 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses 982,483 1,948,915 5,334,024 44,794 1,925,425 25,151 Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 238,979 600,277 -- -- 215,316 -- -- -- -- -- -- -- 238,979 600,277 -- -- 215,316 -- Change in Net Position 1,221,462 2,549,192 5,334,024 44,794 2,140,741 25,151 Net Position, Beginning of Year, Restated 13,311,394 65,423,694 25,276,402 3,117,380 35,181,588 1,888,016 Net Position-End of Year $ 14,532,856 $ 67,972,886 $ 30,610,426 $ 3,162,174 $ 37,322,329 $ 1,913,167 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 208 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues Georgia State University Athletic Association, Inc. Georgia State University Foundation, Inc. Georgia State University Research Foundation Inc. and Affiliates Georgia Tech Alumni Association Georgia Tech Athletic Association Georgia Tech Facilities, Inc. $ --$ --$ 74,603,709 $ -- -- 1,537,339 -- -- 18,467,719 3,000,241 -- -- 640,717 17,375,554 93,996 -- -- -- 36,074,116 -- 4,052,973 43,768,047 -- -- -- 22,247,918 6,371,836 1,544,394 47,539,702 -- -- -- -- -- 3,032,914 97,735,677 --$ -- -- 1,559,536 201,564 -- -- -- 5,385,294 -- 11,223 7,157,617 --$ -- -- 64,095,182 9,442,347 -- -- -- 2,745,332 -- -- 76,282,861 -- -- 23,146,940 128,535 14,125,565 -- -- -- -- -- 29,205 37,430,245 OPERATING EXPENSES Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses 10,553,507 279,987 -- 379,662 7,459,242 141,190 13,722,507 70,338 32,606,433 2,251,315 -- -- 1,076,496 7,395,350 -- 28,398,259 591,008 39,712,428 -- -- -- 97,771 -- 7,720 93,899,206 708,822 94,713,519 3,533,056 935,695 -- 259,220 21,100 -- 1,951,648 73,687 6,774,406 -- -- -- 4,450,024 11,472,295 -- 53,116,718 7,496,855 76,535,892 -- -- -- -- -- 193,750 904,578 60,000 1,158,328 Operating Income (Loss) 11,161,614 7,827,274 3,022,158 383,211 (253,031) 36,271,917 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues -- -- -- -- -- -- -- -- -- -- -- -- -- -- (281,669) -- 8,147,416 741,809 -- (1,381,634) (2,687,677) -- -- 663,433 -- 6,765,782 (1,564,104) -- -- -- -- -- 5,604 -- -- 5,604 -- -- -- -- 813,928 9,868,946 (12,540,627) -- (1,857,753) -- -- -- -- -- 216,576 (12,417,915) -- (12,201,339) Income (Loss) Before Other Revenues, Expenses, Gains, or Losses 11,161,614 14,593,056 1,458,054 388,815 (2,110,784) 24,070,578 Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 10,292,240 -- -- -- -- -- 2,618,107 -- -- -- -- -- -- -- -- -- -- -- 12,910,347 -- Change in Net Position 11,161,614 14,593,056 1,458,054 388,815 10,799,563 24,070,578 Net Position, Beginning of Year, Restated 3,966,226 255,866,597 24,967,380 254,830 61,338,889 21,176,206 Net Position-End of Year $ 15,127,840 $ 270,459,653 $ 26,425,434 $ 643,645 $ 72,138,452 $ 45,246,784 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 209 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues Georgia Tech Foundation, Inc. Georgia Tech Global, Inc. Georgia Tech Research Corporation Global Center for Medical Innovation Gordon State College Foundation, Inc. & Subsidiaries IgniteHQ $ --$ -- -- 19,000 29,637,000 -- -- -- 41,263,000 -- -- 70,919,000 --$ -- -- -- -- -- -- -- 365,482 -- -- 365,482 656,384,430 $ 7,887,371 90,935,250 -- 13,505,198 -- -- -- -- -- -- 768,712,249 100,900 $ -- -- 3,435,858 -- -- -- -- 10,798,182 -- -- 14,334,940 --$ -- -- -- 2,872,571 -- -- -- 256,469 -- 39,522 3,168,562 -- -- 754,033 -- -- -- -- -- 17,182 -- 98,490 869,705 OPERATING EXPENSES Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses 4,410,000 897,000 603,000 123,000 -- 744,000 101,601,000 4,107,000 112,485,000 -- -- 60,664 -- -- -- 94,133 -- 154,797 -- -- -- 117,632 -- -- 760,462,694 308,743 760,889,069 1,746,883 500,318 230,468 76,869 -- 99,098 1,415,049 491,043 4,559,728 -- -- -- -- 318,138 -- 149,848 -- 467,986 351,151 -- -- -- -- -- 405,573 -- 756,724 Operating Income (Loss) (41,566,000) 210,685 7,823,180 9,775,212 2,700,576 112,981 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 147,748,161 -- 299,668 950 484,326 -- (12,244,000) -- -- (2,110) (1,941,393) -- -- (145,435) 36,447 -- -- -- 135,504,161 (145,435) 336,115 (1,160) (1,457,067) -- Income (Loss) Before Other Revenues, Expenses, Gains, or Losses 93,938,161 65,250 8,159,295 9,774,052 1,243,509 112,981 Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 39,690,000 -- -- -- -- -- -- -- -- -- -- -- 39,690,000 -- -- -- -- -- Change in Net Position 133,628,161 65,250 8,159,295 9,774,052 1,243,509 112,981 Net Position, Beginning of Year, Restated 1,540,793,000 115,410 56,120,173 1,166,842 12,762,467 1,236,431 Net Position-End of Year $ 1,674,421,161 $ 180,660 $ 64,279,468 $ 10,940,894 $ 14,005,976 $ 1,349,412 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 210 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues James M. Dye Foundation, Inc. Kennesaw State University Alumni Association, Inc. Kennesaw State University Athletic Association, Inc. Kennesaw State University Foundation, Inc. Kennesaw State University Research & Service Foundation, Inc. Medical College of Georgia Foundation $ --$ --$ --$ --$ 4,893,310 $ -- -- -- -- -- -- -- -- -- 805,805 -- 1,788,344 -- -- -- -- 518,047 823,882 -- -- -- -- 44,537,667 48,974 54,287 -- -- -- 56,425 -- --$ 56,425 -- -- -- -- -- 83,679 83,679 -- -- 2,781,783 6,343,089 -- 1,409,158 11,339,835 -- -- -- 8,189,839 1,458,003 -- 54,703,556 -- -- -- 631,737 -- 64,750 8,250,997 -- -- -- 2,085,115 -- 1,208,708 3,348,110 OPERATING EXPENSES Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses -- -- -- -- 107,935 -- -- -- 107,935 377,556 -- -- 1,829 3,500 -- 91,680 -- 474,565 543,343 -- -- 536,531 1,032,632 -- 7,161,856 393,048 9,667,410 2,560,101 -- 61,564 14,499 1,717,943 3,089,441 14,726,215 5,117,855 27,287,618 3,390,741 -- 2,929,508 311,975 -- -- 2,203,564 -- 8,835,788 784,356 128,677 -- 33,306 1,804,722 28,486 6,916,596 57,305 9,753,448 Operating Income (Loss) (51,510) (390,886) 1,672,425 27,415,938 (584,791) (6,405,338) NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues -- -- -- -- -- 130,634 -- -- 130,634 -- -- -- -- 409,031 752 -- -- 409,783 -- -- -- -- -- -- 5,788 -- 5,788 -- -- -- -- -- 2,397,293 (14,203,670) -- (11,806,377) -- -- -- -- -- 64,963 -- -- 64,963 -- -- -- -- -- 19,808,102 -- -- 19,808,102 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses 79,124 18,897 1,678,213 15,609,561 (519,828) 13,402,764 Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 43,677 -- -- 2,479,301 -- 1,864,565 -- -- -- (4,795,955) -- -- Total Other Revenues, Expenses, Gains or Losses 43,677 -- -- (2,316,654) -- 1,864,565 Change in Net Position 122,801 18,897 1,678,213 13,292,907 (519,828) 15,267,329 Net Position, Beginning of Year, Restated 2,355,932 391,574 3,699,504 60,616,695 2,711,980 242,386,004 Net Position-End of Year $ 2,478,733 $ 410,471 $ 5,377,717 $ 73,909,602 $ 2,192,152 $ 257,653,333 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 211 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues Middle Georgia State University Foundation, Inc. & Subsidiaries Middle Georgia State University Real Estate Foundation, Inc. Savannah State University Foundation, Inc. & Subsidiaries South Georgia State College Foundation, Inc. & Subsidiaries Southern Polytechnic Applied Research Corporation University of Georgia Athletic Association, Inc. $ --$ --$ --$ -- -- -- -- -- -- -- -- -- -- 4,987,537 4,946,602 -- -- -- 1,136,050 -- 125,804 1,261,854 -- -- -- -- -- 6,041 4,993,578 -- -- -- 320,221 -- -- 5,266,823 --$ -- -- -- -- -- -- -- 159,432 -- -- 159,432 61,749 $ 117,158 46,907 -- -- -- -- -- -- -- 32,150 257,964 -- -- -- -- -- -- -- 145,102,432 -- -- -- 145,102,432 OPERATING EXPENSES Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses -- -- -- -- 367,543 -- 1,217,628 -- 1,585,171 -- -- -- -- -- -- 8,592,512 -- 8,592,512 -- -- -- -- 91,950 -- 1,036,616 -- 1,128,566 -- -- -- -- 1,816,843 -- -- -- 1,816,843 -- -- -- -- -- -- 637,272 -- 637,272 17,379,558 495,620 -- 10,934,918 -- -- 100,965,659 10,278,367 140,054,122 Operating Income (Loss) (323,317) (3,598,934) 4,138,257 (1,657,411) (379,308) 5,048,310 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues -- -- -- -- -- 1,374,924 -- -- 1,374,924 -- -- -- -- -- 300,970 (4,475,087) -- (4,174,117) -- -- -- -- -- 16,394 (1,576,576) -- (1,560,182) -- -- -- -- -- 108,326 522,501 -- 630,827 -- -- -- -- -- -- -- (254,238) (254,238) -- -- -- -- 27,020,882 3,357,675 (3,323,491) (18,690) 27,036,376 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses 1,051,607 (7,773,051) 2,578,075 (1,026,584) (633,546) 32,084,686 Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 502,351 -- -- 9,625 -- -- -- -- -- -- -- -- 502,351 -- -- 9,625 -- -- Change in Net Position 1,553,958 (7,773,051) 2,578,075 (1,016,959) (633,546) 32,084,686 Net Position, Beginning of Year, Restated 11,634,440 14,467,634 1,651,850 6,693,302 719,217 238,003,989 Net Position-End of Year $ 13,188,398 $ 6,694,583 $ 4,229,925 $ 5,676,343 $ 85,671 $ 270,088,675 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 212 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues University of Georgia Foundation University of Georgia Research Foundation, Inc. University of North Georgia Foundation - Dahlonega, Inc. University of North Georgia Real Estate Foundation, Inc. University of West Georgia Athletic Foundation, Inc. University of West Georgia Foundation, Inc. $ --$ --$ -- -- -- 180,061,965 9,664,456 -- 1,161,698 27,740,812 -- -- -- 71,836,680 -- -- 82,662,834 -- -- -- -- -- -- 207,802,777 --$ -- -- -- 71,605 -- -- -- 5,646,522 2,305,423 -- 8,023,550 --$ -- -- -- 8,438,432 -- -- -- 168,477 -- 636 8,607,545 --$ -- -- -- -- -- -- 349,928 764,688 -- 100,456 1,215,072 -- -- -- 100,000 3,277,649 -- -- -- 8,371,639 611,940 1,289 12,362,517 OPERATING EXPENSES Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses 447,708 -- -- 904,110 63,000 -- 105,908,900 1,334,098 108,657,816 -- -- -- -- -- -- 198,862,595 114,739 198,977,334 -- -- -- -- 2,483,385 -- 1,738,189 41,340 4,262,914 -- -- -- -- -- -- 947,587 123,290 1,070,877 245,162 -- 70,905 17,103 16,500 -- 1,036,531 -- 1,386,201 1,630,601 -- -- 85,463 1,331,486 -- 2,999,950 -- 6,047,500 Operating Income (Loss) (25,994,982) 8,825,443 3,760,636 7,536,668 (171,129) 6,315,017 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues -- -- -- -- -- 84,594,622 940,830 (2,373,000) 83,162,452 -- -- -- -- -- 846,993 (10,613,517) 955,000 (8,811,524) -- -- -- -- -- 3,357,143 (90,364) -- 3,266,779 -- -- -- -- -- 143,280 (5,629,528) -- (5,486,248) -- -- -- -- -- 46,759 -- -- 46,759 -- -- -- -- -- 1,969,985 (2,343,074) 26,232 (346,857) Income (Loss) Before Other Revenues, Expenses, Gains, or Losses 57,167,470 13,919 7,027,415 2,050,420 (124,370) 5,968,160 Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses -- -- -- 55,915,213 -- 55,915,213 -- -- -- -- (354,800) (354,800) -- -- -- 770,159 -- 770,159 -- -- -- -- (2,734,622) (2,734,622) -- -- -- -- -- -- -- 841,758 -- -- -- 841,758 Change in Net Position 113,082,683 (340,881) 7,797,574 (684,202) (124,370) 6,809,918 Net Position, Beginning of Year, Restated 1,122,855,779 93,354,632 60,541,015 8,741,062 1,532,674 44,752,375 Net Position-End of Year $ 1,235,938,462 $ 93,013,751 $ 68,338,589 $ 8,056,860 $ 1,408,304 $ 51,562,293 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 2018 Annual Financial Report 213 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) FOR FISCAL YEAR ENDED JUNE 30, 2018 OPERATING REVENUES Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Food Services Health Services Intercollegiate Athletics Gifts and Contributions Endowment Income Other Operating Revenues Total Operating Revenues University of West Georgia Real Estate Foundation, Inc. University System of of Georgia Foundation, Inc. & Affiliates Valdosta State University Auxiliary Services Real Estate Foundation Valdosta State University Foundation, Inc. Walter & Emilie Spivey Foundation Total All CU's & Affiliated Organizations $ --$ --$ --$ -- -- -- -- 6,197 -- -- 662,521 -- 5,853,649 16,195,671 6,525,396 --$ -- -- 430,219 508,929 -- -- -- -- -- 439,773 6,293,422 -- -- -- 1,140,827 523,103 7,905,032 26,433,351 -- -- -- 95,811 -- 997,894 7,619,101 -- -- -- 1,401,409 -- 23,555 2,364,112 --$ -- -- -- -- 795,691,634 9,880,103 338,506,647 918,055,160 273,338,022 -- -- -- -- -- 129,685 129,685 2,051,622 -- 148,234,143 277,602,214 24,526,211 35,964,923 2,823,850,679 OPERATING EXPENSES Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses -- -- -- -- -- -- 161,346 -- 161,346 347,818 -- -- 29,482 1,572,199 -- 1,305,463 -- 3,254,962 -- -- -- -- -- -- 1,057,665 -- 1,057,665 -- -- 34,675 105,332 1,081,099 -- 2,629,107 228,388 4,078,601 -- -- -- -- -- -- 255,292 -- 255,292 338,453,658 37,623,370 149,902,949 23,661,070 53,389,669 8,859,656 1,981,799,518 74,326,565 2,668,016,455 Operating Income (Loss) 6,132,076 23,178,389 6,561,436 (1,714,489) (125,607) 155,834,224 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues -- -- -- -- -- 145,203 (5,054,010) -- (4,908,807) -- -- -- -- -- (33,889) (9,467,404) -- (9,501,293) -- -- -- -- -- 117,980 (6,136,629) -- (6,018,649) -- -- -- -- -- 4,419,605 102,932 -- 4,522,537 -- -- -- -- -- 657,087 -- (81,598) 575,489 29,932,138 3,083,581 3,227,028 -- 27,962,172 326,453,767 (151,170,162) (3,804,843) 235,683,681 Income (Loss) Before Other Revenues, Expenses, Gains, or Losses 1,223,269 13,677,096 542,787 2,808,048 449,882 391,517,905 Capital Grants and Gifts Federal State Other Additions to Permanent and Term Endowments Special Item Total Other Revenues, Expenses, Gains or Losses -- -- -- -- -- -- -- 61,450 -- -- -- 61,450 -- -- -- -- -- -- -- 4,144,769 -- -- -- 4,144,769 -- -- -- -- -- 10,107,077 -- 118,090,730 -- (16,374,174) -- 111,823,633 Change in Net Position 1,223,269 13,738,546 542,787 6,952,817 449,882 503,341,538 Net Position, Beginning of Year, Restated 3,522,149 1,455,188 6,881,231 43,272,367 6,524,481 4,795,074,675 Net Position-End of Year $ 4,745,418 $ 15,193,734 $ 7,424,018 $ 50,225,184 $ 6,974,363 $ 5,298,416,213 See Notes to Statement of Net Position and Statement of Revenues, Expenses and Changes in Net Position by Affiliated Organization. 214 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA NOTES TO STATEMENT OF NET POSITION AND STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BY AFFILIATED ORGANIZATION (Unaudited) FOR FISCAL YEAR ENDED JUNE 30, 2018 Fiscal Year End for a few of the affiliated organizations differ from the June 30, 2018 Year End. The following organizations have a Fiscal Year End of July 31, 2017: Columbus State University Alumni Association, Inc. Columbus State University Athletic Fund, Inc. Columbus State University Foundation, Inc. Columbus State University Research & Service Foundation, Inc. Foundation Properties, Inc. The following organizations have a Fiscal Year End of December 31, 2017: Armstrong State University Educational Properties Foundation, Inc & Subsidiaries College of Coastal Georgia Foundation, Inc. Dalton State College Foundation, Inc. Global Center for Medical Innovation Gordon State College Foundation, Inc. & Subsidiaries Middle Georgia State University Foundation, Inc. & Subsidiaries Valdosta State University Foundation, Inc. VSU Auxiliary Services Real Estate Foundation, Inc. Walter & Emilie Spivey Foundation The following organization has a Fiscal Year End of March 31, 2018: Dalton State College Athletic Club As of the release of this report, financial statements were not available for the following organizations. Balances from a prior year are reported as indicated below. Fort Valley State University Foundation, Inc. reported fiscal year 2017 balances. Gordon State College Foundation, Inc. & Subsidiaries reported fiscal year 2017 balances. Southern Polytechnic Applied Research Corporation reported fiscal year 2016 balances. 2018 Annual Financial Report 215 216 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA BALANCE SHEET (NON-GAAP BASIS) BUDGET FUNDS JUNE 30, 2018 (Unaudited) ASSETS Cash and Cash Equivalents Investments Accounts Receivable Federal Financial Assistance Other Prepaid Expenditures Inventories Other Assets $ 803,536,360.14 94,085,598.11 171,009,392.96 251,140,854.65 21,123,595.25 5,352,353.31 11,317,775.43 Total Assets $ 1,357,565,929.85 LIABILITIES AND FUND EQUITY Liabilities Accounts Payable Encumbrances Payable Salaries Payable Deferred Revenue Other Liabilities $ 126,574,481.22 380,884,961.46 21,485,992.25 260,113,462.79 3,902,753.60 Total Liabilities 792,961,651.32 Fund Balances Reserved Capital Outlay Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Inventories Tuition Carry - Forward Property Reserves Surplus 9,661,050.44 122,868,714.79 169,661,411.47 29,493,955.59 150,518,598.28 25,619,774.96 3,061,893.17 41,680,322.88 8,787,111.43 3,251,445.52 Total Fund Balances 564,604,278.53 Total Liabilities and Fund Balances $ 1,357,565,929.85 Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 2018 Annual Financial Report 217 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (Unaudited) BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2018 Regents, University System of Georgia Agricultural Experiment Station State Appropriation State General Funds Other Funds Original Appropriation Amended Appropriation Final Budget Funds Available Compared to Budget Current Year Revenues Prior Year Reserve Carry-Over $ 45,107,031.00 $ 45,107,031.00 $ 45,107,031.00 $ 45,107,031.00 $ -- 37,552,919.00 37,552,919.00 62,539,004.00 54,800,642.37 22,722,323.01 Total Agricultural Experiment Station 82,659,950.00 82,659,950.00 107,646,035.00 99,907,673.37 22,722,323.01 Athens and Tifton Vet Laboratories State Appropriation Other Funds 6,511,331.00 6,609,688.00 7,547,227.00 7,191,026.46 794,214.26 Cooperative Extension Service State Appropriation State General Funds Other Funds 39,842,725.00 31,333,929.00 39,907,321.00 31,333,929.00 39,907,321.00 43,608,198.00 39,907,321.00 37,536,989.22 -- 6,165,980.18 Total Cooperative Extension Service 71,176,654.00 71,241,250.00 83,515,519.00 77,444,310.22 6,165,980.18 Enterprise Innovation Institute State Appropriation State General Funds Other Funds 19,510,493.00 10,900,000.00 19,510,493.00 10,900,000.00 19,510,493.00 15,907,214.00 19,510,493.00 13,456,932.77 -- 74,226.36 Total Enterprise Innovation Institute 30,410,493.00 30,410,493.00 35,417,707.00 32,967,425.77 74,226.36 Forestry Cooperative Extension State Appropriation State General Funds Other Funds 983,248.00 575,988.00 983,248.00 575,988.00 983,248.00 766,153.00 983,248.00 584,497.54 -- 235,485.58 Total Forestry Cooperative Extension 1,559,236.00 1,559,236.00 1,749,401.00 1,567,745.54 235,485.58 Forestry Research State Appropriation State General Funds Other Funds 2,908,323.00 10,250,426.00 2,908,323.00 10,250,426.00 2,908,323.00 11,361,032.00 2,908,323.00 10,621,451.52 -- 2,444,319.31 Total Forestry Research 13,158,749.00 13,158,749.00 14,269,355.00 13,529,774.52 2,444,319.31 Georgia Archives State Appropriation State General Funds Other Funds 4,720,507.00 894,417.00 4,720,507.00 883,030.00 4,720,507.00 1,388,695.00 4,720,507.00 834,901.97 -- 1,161,082.52 Total Georgia Archives 5,614,924.00 5,603,537.00 6,109,202.00 5,555,408.97 1,161,082.52 Georgia Radiation Therapy Center Other Funds $ 4,236,754.00 $ --$ --$ --$ -- Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 218 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (Unaudited) BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2018 Regents, University System of Georgia Agricultural Experiment Station State Appropriation State General Funds Other Funds Funds Available Compared to Budget Program Transfers or Adjustments Total Funds Available Variance Positive (Negative) Expenditures Compared to Budget Current Year Actual Variance Positive (Negative) Excess (Deficiency) of Funds Available Over/(Under) Expenditures $ -- $ 45,107,031.00 $ -- $ 45,107,031.00 $ --$ -- -- 77,522,965.38 14,983,961.38 52,421,494.18 10,117,509.82 25,101,471.20 Total Agricultural Experiment Station -- 122,629,996.38 14,983,961.38 97,528,525.18 10,117,509.82 25,101,471.20 Athens and Tifton Veterinary Laboratories State Appropriation State General Funds Other Funds -- -- -- 7,985,240.72 -- 438,013.72 -- 6,998,242.69 -- 548,984.31 -- 986,998.03 Cooperative Extension Service State Appropriation State General Funds Other Funds -- 39,907,321.00 -- 43,702,969.40 -- 94,771.40 39,907,321.00 37,040,395.47 -- 6,567,802.53 -- 6,662,573.93 Total Cooperative Extension Service -- 83,610,290.40 94,771.40 76,947,716.47 6,567,802.53 6,662,573.93 Enterprise Innovation Institute State Appropriation State General Funds Other Funds -- 19,510,493.00 -- 13,531,159.13 -- (2,376,054.87) 19,510,492.72 13,300,664.49 0.28 2,606,549.51 0.28 230,494.64 Total Enterprise Innovation Institute -- 33,041,652.13 (2,376,054.87) 32,811,157.21 2,606,549.79 230,494.92 Forestry Cooperative Extension State Appropriation State General Funds Other Funds -- 983,248.00 -- 819,983.12 -- 53,830.12 983,248.00 520,653.97 -- 245,499.03 -- 299,329.15 Total Forestry Cooperative Extension -- 1,803,231.12 53,830.12 1,503,901.97 245,499.03 299,329.15 Forestry Research State Appropriation State General Funds Other Funds -- 2,908,323.00 -- 13,065,770.83 -- 1,704,738.83 2,908,323.00 10,519,857.39 -- 841,174.61 -- 2,545,913.44 Total Forestry Research -- 15,974,093.83 1,704,738.83 13,428,180.39 841,174.61 2,545,913.44 Georgia Archives State Appropriation State General Funds Other Funds -- 4,720,507.00 -- 1,995,984.49 -- 607,289.49 4,720,507.00 1,281,507.18 -- 107,187.82 -- 714,477.31 Total Georgia Archives -- 6,716,491.49 607,289.49 6,002,014.18 107,187.82 714,477.31 Georgia Radiation Therapy Center State Appropriation Other Funds $ --$ --$ --$ --$ --$ -- Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 2018 Annual Financial Report 219 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (Unaudited) BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2018 Regents, University System of Georgia Georgia Research Alliance State General Funds Original Appropriation Amended Appropriation Final Budget Funds Available Compared to Budget Current Year Revenues Prior Year Reserve Carry-Over $ 5,105,243.00 $ 5,105,243.00 $ 5,105,243.00 $ 5,105,243.00 $ -- Georgia Tech Research Institute State Appropriation State General Funds Other Funds 6,072,039.00 406,225,535.00 6,072,039.00 406,225,535.00 6,072,039.00 447,121,250.00 6,072,039.00 442,027,951.05 -- 2,897,850.88 Total Georgia Tech Research Institute 412,297,574.00 412,297,574.00 453,193,289.00 448,099,990.05 2,897,850.88 Marine Institute State Appropriation State General Funds Other Funds 993,619.00 486,281.00 993,619.00 486,281.00 993,619.00 645,445.00 993,619.00 430,656.06 -- 509,575.37 Total Marine Institute 1,479,900.00 1,479,900.00 1,639,064.00 1,424,275.06 509,575.37 Marine Resources Extension Center State Appropriation State General Funds Other Funds 1,522,189.00 1,345,529.00 1,522,189.00 1,345,529.00 1,522,189.00 1,770,529.00 1,522,189.00 1,317,637.94 -- 191,277.40 Total Marine Resources Extension Center 2,867,718.00 2,867,718.00 3,292,718.00 2,839,826.94 191,277.40 Medical College of Georgia Hospital and Clinics State Appropriation State General Funds 30,392,211.00 30,392,211.00 30,392,211.00 30,392,211.00 -- Public Libraries State Appropriation State General Funds Other Funds 37,205,936.00 37,205,936.00 37,205,936.00 37,205,936.00 -- 4,638,252.00 4,287,961.00 4,776,586.00 4,435,813.22 -- Total Public Libraries 41,844,188.00 41,493,897.00 41,982,522.00 41,641,749.22 -- Public Service / Special Funding Initiatives State Appropriation State General Funds State Funds - Prior Year Carry-Over State General Funds - Prior Year Other Funds 24,997,015.00 -- -- 35,072,015.00 -- -- 35,072,015.00 3,700,782.00 -- 35,072,015.00 -- -- -- 3,700,782.22 -- Total Public Service / Special Funding Initiatives 24,997,015.00 35,072,015.00 38,772,797.00 35,072,015.00 3,700,782.22 Regents Central Office State Appropriation State General Funds Other Funds 12,250,625.00 -- 12,270,277.00 -- 12,270,277.00 410,000.00 12,270,277.00 783,318.41 -- 4,249,708.52 Total Regents Central Office $ 12,250,625.00 $ 12,270,277.00 $ 12,680,277.00 $ 13,053,595.41 $ 4,249,708.52 Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 220 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (Unaudited) BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2018 Regents, University System of Georgia Georgia Research Alliance State General Funds Funds Available Compared to Budget Program Transfers or Adjustments Total Funds Available Variance Positive (Negative) Expenditures Compared to Budget Current Year Actual Variance Positive (Negative) Excess (Deficiency) of Funds Available Over/(Under) Expenditures $ -- $ 5,105,243.00 $ -- $ 5,105,243.00 $ --$ -- Georgia Tech Research Institute State Appropriation State General Funds Other Funds -- 6,072,039.00 -- 444,925,801.93 -- (2,195,448.07) 6,072,039.00 442,630,335.15 -- 4,490,914.85 -- 2,295,466.78 Total Georgia Tech Research Institute -- 450,997,840.93 (2,195,448.07) 448,702,374.15 4,490,914.85 2,295,466.78 Marine Institute State Appropriation State General Funds Other Funds -- 993,619.00 -- 993,619.00 -- -- -- 940,231.43 294,786.43 200,037.02 445,407.98 740,194.41 Total Marine Institute -- 1,933,850.43 294,786.43 1,193,656.02 445,407.98 740,194.41 Marine Resources Extension Center State Appropriation State General Funds Other Funds -- 1,522,189.00 -- 1,508,915.34 -- (261,613.66) 1,522,189.00 1,221,937.97 -- 548,591.03 -- 286,977.37 Total Marine Resources Extension Center -- 3,031,104.34 (261,613.66) 2,744,126.97 548,591.03 286,977.37 Medical College of Georgia Hospital and Clinics State Appropriation State General Funds -- 30,392,211.00 -- 30,392,211.00 -- -- Public Libraries/Special Funding Initiatives State Appropriation State General Funds Other Funds -- 37,205,936.00 -- 4,435,813.22 -- (340,772.78) 37,175,885.39 4,435,813.22 30,050.61 340,772.78 30,050.61 -- Total Public Libraries -- 41,641,749.22 (340,772.78) 41,611,698.61 370,823.39 30,050.61 Public Service / Special Funding Initiatives State Appropriation State General Funds State Funds - Prior Year Carry-Over State General Funds - Prior Year Other Funds -- 35,072,015.00 3,700,782.22 -- -- -- 35,069,611.10 0.22 963,019.85 -- -- 2,403.90 2,737,762.15 -- 2,403.90 2,737,762.37 -- Total Public Service / Special Funding Initiatives -- 38,772,797.22 0.22 36,032,630.95 2,740,166.05 2,740,166.27 Regents Central Office State Appropriation State General Funds Other Funds -- 12,270,277.00 5,033,026.93 -- 4,623,026.93 12,255,864.40 320,378.44 14,412.60 89,621.56 14,412.60 4,712,648.49 Total Regents Central Office $ -- $ 17,303,303.93 $ 4,623,026.93 $ 12,576,242.84 $ 104,034.16 $ 4,727,061.09 Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 2018 Annual Financial Report 221 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (Unaudited) BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2018 Regents, University System of Georgia Skidaway Institute of Oceanography State Appropriation State General Funds Other Funds Original Appropriation Amended Appropriation Final Budget Funds Available Compared to Budget Current Year Revenues Prior Year Reserve Carry-Over $ 1,388,024.00 $ 1,388,024.00 $ 1,388,024.00 $ 1,388,024.00 $ 3,800,620.00 3,900,620.00 5,837,676.00 4,912,056.96 -- 800,508.69 Total Skidaway Institute of Oceanography 5,188,644.00 5,288,644.00 7,225,700.00 6,300,080.96 800,508.69 Teaching State Appropriation State General Funds Other Funds 2,047,001,762.00 4,689,257,707.00 2,049,128,886.00 4,857,951,814.00 2,049,128,886.00 5,472,694,420.00 2,049,128,886.00 4,888,920,085.41 -- 436,508,337.75 Total Teaching 6,736,259,469.00 6,907,080,700.00 7,521,823,306.00 6,938,048,971.41 436,508,337.75 Veterinary Medicine Experiment Station State Appropriation State General Funds 3,209,528.00 2,989,260.00 2,989,260.00 2,989,260.00 -- Veterinary Medicine Teaching Hospital State Appropriation State General Funds Other Funds 465,826.00 17,000,000.00 465,826.00 17,750,000.00 465,826.00 20,095,851.00 465,826.00 19,211,000.96 -- 2,345,851.19 Total Veterinary Medicine Teaching Hospital 17,465,826.00 18,215,826.00 20,561,677.00 19,676,826.96 2,345,851.19 Agencies Attached for Administrative Purposes Payments to Georgia Military College State Appropriation State General Funds 6,162,608.00 6,176,766.00 6,176,766.00 6,176,766.00 -- Payments to Public Telecommunications Commission State Appropriation State General Funds 15,247,024.00 15,251,668.00 15,251,668.00 15,251,668.00 -- Total Operating Activity $ 7,530,095,664.00 $ 7,707,224,602.00 $ 8,417,340,944.00 $ 7,804,235,843.86 $ 484,801,523.24 Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 222 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (Unaudited) BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2018 Regents, University System of Georgia Skidaway Institute of Oceanography State Appropriation State General Funds Other Funds Funds Available Compared to Budget Program Transfers or Adjustments Total Funds Available Variance Positive (Negative) Expenditures Compared to Budget Current Year Actual Variance Positive (Negative) Excess (Deficiency) of Funds Available Over/(Under) Expenditures $ -- $ 1,388,024.00 $ -- $ 1,388,024.00 $ --$ -- -- 5,712,565.65 (125,110.35) 4,238,225.80 1,599,450.20 1,474,339.85 Total Skidaway Institute of Oceanography -- 7,100,589.65 (125,110.35) 5,626,249.80 1,599,450.20 1,474,339.85 Teaching State Appropriation State General Funds Other Funds -- 5,789,972.99 2,049,128,886.00 5,331,218,396.15 -- (141,476,023.85) 2,049,057,484.83 4,847,725,215.33 71,401.17 624,969,204.67 71,401.17 483,493,180.82 Total Teaching 5,789,972.99 7,380,347,282.15 (141,476,023.85) 6,896,782,700.16 625,040,605.84 483,564,581.99 Veterinary Medicine Experiment Station State Appropriation State General Funds -- 2,989,260.00 -- 2,989,260.00 -- -- Veterinary Medicine Teaching Hospital State Appropriation State General Funds Other Funds -- 465,826.00 -- 21,556,852.15 -- 1,461,001.15 465,826.00 18,239,134.08 -- 1,856,716.92 -- 3,317,718.07 Total Veterinary Medicine Teaching Hospital -- 22,022,678.15 1,461,001.15 18,704,960.08 1,856,716.92 3,317,718.07 Agencies Attached for Administrative Purposes Payments to Georgia Military College State Appropriation State General Funds -- 6,176,766.00 -- 6,176,766.00 -- -- Payments to Public Telecommunications Commission State Appropriation State General Funds -- 15,251,668.00 -- 15,251,668.00 -- -- Total Operating Activity $ 5,789,972.99 $ 8,294,827,340.09 $ (122,513,603.91) $ 7,759,109,525.67 $ 658,231,418.33 $ 535,717,814.42 Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 2018 Annual Financial Report 223 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (Unaudited) BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2018 Regents, University System of Georgia Agricultural Experiment Station State Appropriation State General Funds Other Funds Beginning Fund Balance/(Deficit) July 1 Fund Balance Carried Over from Prior Year as Funds Available Return of Fiscal Year 2017 Surplus Prior Year Adjustments Other Adjustments $ 32,382.13 $ --$ 22,722,323.01 (22,722,323.01) (32,382.13) $ -- 121,331.98 $ 23,955.70 -- 122.56 Total Agricultural Experiment Station 22,754,705.14 (22,722,323.01) (32,382.13) 145,287.68 122.56 Athens and Tifton Vet Laboratories Other Funds 794,214.26 (794,214.26) -- 5,668.92 -- Cooperative Extension Service State Appropriation State General Funds Other Funds 21,442.08 -- (21,442.08) 67,183.09 -- 6,165,980.18 (6,165,980.18) -- 35,488.56 -- Total Cooperative Extension Service 6,187,422.26 (6,165,980.18) (21,442.08) 102,671.65 -- Enterprise Innovation Institute State Appropriation State General Funds Other Funds -- -- -- 74,226.36 (74,226.36) -- -- -- -- 2,956.84 Total Enterprise Innovation Institute 74,226.36 (74,226.36) -- -- 2,956.84 Forestry Cooperative Extension State Appropriation State General Funds Other Funds 516.24 -- (516.24) 503.78 -- 235,485.58 (235,485.58) -- 342.67 -- Total Forestry Cooperative Extension 236,001.82 (235,485.58) (516.24) 846.45 -- Forestry Research State Appropriation State General Funds Other Funds 2,488.79 -- (2,488.79) 11,157.04 -- 2,444,319.31 (2,444,319.31) -- 18,558.15 -- Total Forestry Research 2,446,808.10 (2,444,319.31) (2,488.79) 29,715.19 -- Georgia Archives State Appropriation State General Funds Other Funds 11.15 1,162,607.49 -- (1,161,082.52) (11.15) (1,524.97) 5,653.71 1,399.74 -- 23,384.40 Total Georgia Archives 1,162,618.64 (1,161,082.52) (1,536.12) 7,053.45 23,384.40 Georgia Radiation Therapy Center Other Funds $ --$ --$ --$ --$ -- Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 224 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (Unaudited) BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2018 Regents, University System of Georgia Agricultural Experiment Station State Appropriation State General Funds Other Funds Early Return of Fiscal Year 2018 Surplus Excess (Deficiency) of Funds Available Over/Under) Expenditures Ending Fund Balance/(Deficit) June 30 Analysis of Ending Fund Balance Reserved Surplus/(Deficit) Total $ --$ --$ 121,331.98 $ --$ 121,331.98 $ 121,331.98 -- 25,101,471.20 25,125,549.46 25,125,549.46 -- 25,125,549.46 Total Agricultural Experiment Station -- 25,101,471.20 25,246,881.44 25,125,549.46 121,331.98 25,246,881.44 Athens and Tifton Vet Laboratories Other Funds -- 986,998.03 992,666.95 992,666.95 -- 992,666.95 Cooperative Extension Service State Appropriation State General Funds Other Funds -- -- 67,183.09 -- -- 6,662,573.93 6,698,062.49 6,698,062.49 67,183.09 -- 67,183.09 6,698,062.49 Total Cooperative Extension Service -- 6,662,573.93 6,765,245.58 6,698,062.49 67,183.09 6,765,245.58 Enterprise Innovation Institute State Appropriation State General Funds Other Funds -- 0.28 0.28 -- -- 230,494.64 233,451.48 233,451.48 0.28 0.28 -- 233,451.48 Total Enterprise Innovation Institute -- 230,494.92 233,451.76 233,451.48 0.28 233,451.76 Forestry Cooperative Extension State Appropriation State General Funds Other Funds -- -- 503.78 -- -- 299,329.15 299,671.82 299,671.82 503.78 -- 503.78 299,671.82 Total Forestry Cooperative Extension -- 299,329.15 300,175.60 299,671.82 503.78 300,175.60 Forestry Research State Appropriation State General Funds Other Funds -- -- 11,157.04 -- -- 2,545,913.44 2,564,471.59 2,564,471.59 11,157.04 -- 11,157.04 2,564,471.59 Total Forestry Research -- 2,545,913.44 2,575,628.63 2,564,471.59 11,157.04 2,575,628.63 Georgia Archives State Appropriation State General Funds Other Funds -- -- 5,653.71 -- -- 714,477.31 739,261.45 737,846.71 5,653.71 1,414.74 5,653.71 739,261.45 Total Georgia Archives -- 714,477.31 744,915.16 737,846.71 7,068.45 744,915.16 Georgia Radiation Therapy Center Other Funds $ --$ --$ --$ --$ --$ -- Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 2018 Annual Financial Report 225 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (Unaudited) BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2018 Regents, University System of Georgia Georgia Research Alliance State General Funds Beginning Fund Balance/(Deficit) July 1 Fund Balance Carried Over from Prior Year as Funds Available Return of Fiscal Year 2017 Surplus Prior Year Adjustments Other Adjustments $ --$ --$ --$ --$ -- Georgia Tech Research Institute State Appropriation State General Funds Other Funds 108.51 -- (108.51) 275.68 -- 2,897,850.88 (2,897,850.88) -- -- -- Total Georgia Tech Research Institute 2,897,959.39 (2,897,850.88) (108.51) 275.68 -- Marine Institute State Appropriation State General Funds Other Funds 1,086.19 -- (1,086.19) -- -- 509,575.37 (509,575.37) -- -- -- Total Marine Institute 510,661.56 (509,575.37) (1,086.19) -- -- Marine Resources Extension Center State Appropriation State General Funds Other Funds 554.45 -- (554.45) 5,255.66 -- 191,277.40 (191,277.40) -- 1,226.50 -- Total Marine Resources Extension Center 191,831.85 (191,277.40) (554.45) 6,482.16 -- Medical College of Georgia Hospital and Clinics State Appropriation State General Funds -- -- -- 29,016.00 -- Public Libraries State Appropriation State General Funds Other Funds 3,797.58 -- (3,797.58) 2,979.23 -- -- -- -- -- -- Total Public Libraries 3,797.58 -- (3,797.58) 2,979.23 -- Public Service / Special Funding Initiatives State Appropriation State General Funds State Funds - Prior Year Carry-over State General Funds - Prior Year Other Funds 55.74 -- (55.74) 24,169.85 -- 3,769,770.18 (3,700,782.22) (68,987.96) 16,847.11 -- -- -- -- -- -- Total Public Service / Special Funding Initiatives 3,769,825.92 (3,700,782.22) (69,043.70) 41,016.96 -- Regents Central Office State Appropriation State General Funds Other Funds 34,609.23 -- (34,609.23) 62,415.53 -- 4,249,708.52 (4,249,708.52) -- -- -- Total Regents Central Office $ 4,284,317.75 $ (4,249,708.52) $ (34,609.23) $ 62,415.53 $ -- Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 226 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (Unaudited) BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2018 Regents, University System of Georgia Georgia Research Alliance State General Funds Early Return of Fiscal Year 2018 Surplus Excess (Deficiency) of Funds Available Over/Under) Expenditures Ending Fund Balance/(Deficit) June 30 Analysis of Ending Fund Balance Reserved Surplus/(Deficit) Total $ --$ --$ --$ --$ --$ -- Georgia Tech Research Institute State Appropriation State General Funds Other Funds -- -- 275.68 -- -- 2,295,466.78 2,295,466.78 2,295,466.78 275.68 -- 275.68 2,295,466.78 Total Georgia Tech Research Institute -- 2,295,466.78 2,295,742.46 2,295,466.78 275.68 2,295,742.46 Marine Institute State Appropriation State General Funds Other Funds -- -- -- -- -- 740,194.41 740,194.41 740,194.41 -- -- -- 740,194.41 Total Marine Institute -- 740,194.41 740,194.41 740,194.41 -- 740,194.41 Marine Resources Extension Center State Appropriation State General Funds Other Funds -- -- 5,255.66 -- -- 286,977.37 288,203.87 288,203.87 5,255.66 -- 5,255.66 288,203.87 Total Marine Resources Extension Center -- 286,977.37 293,459.53 288,203.87 5,255.66 293,459.53 Medical College of Georgia Hospital and Clinics State Appropriation State General Funds -- -- 29,016.00 -- 29,016.00 29,016.00 Public Libraries State Appropriation State General Funds Other Funds -- 30,050.61 33,029.84 -- -- -- -- 33,029.84 33,029.84 -- -- -- Total Public Libraries -- 30,050.61 33,029.84 -- 33,029.84 33,029.84 Public Service / Special Funding Initiatives State Appropriation State General Funds State Funds - Prior-Year Carry-over State General Funds - Prior Year Other Funds -- 2,403.90 26,573.75 -- 26,573.75 26,573.75 -- 2,737,762.37 2,754,609.48 1,737,762.15 1,016,847.33 2,754,609.48 -- -- -- -- -- -- Total Public Service / Special Funding Initiatives -- 2,740,166.27 2,781,183.23 1,737,762.15 1,043,421.08 2,781,183.23 Regents Central Office State Appropriation State General Funds Other Funds -- 14,412.60 76,828.13 -- -- 4,712,648.49 4,712,648.49 4,712,648.49 76,828.13 -- 76,828.13 4,712,648.49 Total Regents Central Office $ -- $ 4,727,061.09 $ 4,789,476.62 $ 4,712,648.49 $ 76,828.13 $ 4,789,476.62 Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 2018 Annual Financial Report 227 UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (Unaudited) BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2018 Regents, University System of Georgia Skidaway Institute of Oceanography State Appropriation State General Funds Other Funds Beginning Fund Balance/(Deficit) July 1 Fund Balance Carried Over from Prior Year as Funds Available Return of Fiscal Year 2017 Surplus Prior Year Adjustments Other Adjustments $ 6,732.93 $ --$ (6,732.93) $ 2,987.90 $ -- 800,508.69 (800,508.69) -- 3,566.12 -- Total Skidaway Institute of Oceanography 807,241.62 (800,508.69) (6,732.93) 6,554.02 -- Teaching State Appropriation State General Funds Other Funds 1,216,864.48 437,795,496.85 -- (436,508,337.75) (1,216,864.48) (1,287,159.10) 1,379,047.64 (76,785.69) (14,281.06) (1,448,500.74) Total Teaching 439,012,361.33 (436,508,337.75) (2,504,023.58) 1,302,261.95 (1,462,781.80) Veterinary Medicine Experiment Station State Appropriation State General Funds 893.15 -- (893.15) 3,640.84 -- Veterinary Medicine Teaching Hospital State Appropriation State General Funds Other Funds -- 2,345,851.19 -- (2,345,851.19) -- -- -- -- 46,892.04 (151,663.77) Total Veterinary Medicine Teaching Hospital 2,345,851.19 (2,345,851.19) -- 46,892.04 (151,663.77) Agencies Attached for Administrative Purposes Payments to Georgia Military College State Appropriation State General Funds -- -- -- -- -- Payments to Public Telecommunications Commission State Appropriation State General Funds -- -- -- -- -- Total Operating Activity 487,480,738.92 (484,801,523.24) (2,679,214.68) 1,792,777.75 (1,587,981.77) Prior Year Reserves Not Available for Expenditure Inventories Uncollectible Accounts Receivable 3,351,370.34 -- -- -- (289,477.17) 23,742,316.02 -- -- -- 1,877,458.94 Budget Unit Totals $ 514,574,425.28 $ (484,801,523.24) $ (2,679,214.68) $ 1,792,777.75 $ -- Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 228 University System of Georgia UNIVERSITY SYSTEM OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (Unaudited) BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2018 Regents, University System of Georgia Skidaway Institute of Oceanography State Appropriation State General Funds Other Funds Early Return of Fiscal Year 2018 Surplus Excess (Deficiency) of Funds Available Over/Under) Expenditures Ending Fund Balance/(Deficit) June 30 Analysis of Ending Fund Balance Reserved Surplus/(Deficit) Total $ --$ --$ 2,987.90 $ --$ 2,987.90 $ 2,987.90 -- 1,474,339.85 1,477,905.97 1,477,905.97 -- 1,477,905.97 Total Skidaway Institute of Oceanography -- 1,474,339.85 1,480,893.87 1,477,905.97 2,987.90 1,480,893.87 Teaching State Appropriation State General Funds Other Funds -- 71,401.17 1,436,167.75 -- -- 483,493,180.82 481,967,894.39 481,554,316.37 1,436,167.75 413,578.02 1,436,167.75 481,967,894.39 Total Teaching -- 483,564,581.99 483,404,062.14 481,554,316.37 1,849,745.77 483,404,062.14 Veterinary Medicine Experiment Station State Appropriation State General Funds -- -- 3,640.84 -- 3,640.84 3,640.84 Veterinary Medicine Teaching Hospital State Appropriation State General Funds Other Funds -- -- -- -- -- 3,317,718.07 3,212,946.34 3,212,946.34 -- -- -- 3,212,946.34 Total Veterinary Medicine Teaching Hospital -- 3,317,718.07 3,212,946.34 3,212,946.34 -- 3,212,946.34 Agencies Attached for Administrative Purposes Payments to Georgia Military College State Appropriation State General Funds -- -- -- -- -- -- Payments to Public Telecommunications Commission State Appropriation State General Funds -- -- -- -- -- -- Total Operating Activity -- 535,717,814.42 535,922,610.40 532,671,164.88 3,251,445.52 535,922,610.40 Prior Year Reserve Not Available for Expenditure Inventories Uncollectible Accounts Receivable -- -- 3,061,893.17 3,061,893.17 -- 3,061,893.17 -- -- 25,619,774.96 25,619,774.96 -- 25,619,774.96 Budget Unit Totals $ -- $ 535,717,814.42 $ 564,604,278.53 $ 561,352,833.01 $ 3,251,445.52 $ 564,604,278.53 Summary of Ending Fund Balance Reserved Inventories Other Reserves Colleges and Universities Unreserved, Undesignated Surplus $ 3,061,893.17 $ 3,061,893.17 558,290,939.84 558,290,939.84 $ $ 561,352,833.01 $ 3,251,445.52 3,251,445.52 3,251,445.52 $ 564,604,278.53 Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 2018 Annual Financial Report 229 Acknowledgments Published by University System of Georgia Strategy and Fiscal Affairs: Tracey Cook - Interim Executive Vice Chancellor For Strategy and Fiscal Affairs/Treasurer Claire Arnold Caleb Cox Brad Freeman Shree Hamm Theresa L. Jackson Ben M. Riden, Jr. Special Appreciation to University System of Georgia Chief Business Officers: Paul Willis, Abraham Baldwin Agricultural College Shawn McGee, Albany State University Kwabena Boakye, Atlanta Metropolitan State College Anthony Wagner, Augusta University Corlis Cummings, Clayton State University Jeffrey Preston, College of Coastal Georgia J. Thomas Helton, Columbus State University Nick Henry, Dalton State College Cliff Gay, East Georgia State College Dexter Odom, Fort Valley State University Susan Allen, Georgia College & State University Laura Maxwell, Georgia Gwinnett College Jeff Davis, Georgia Highlands College Jim Fortner, Georgia Institute of Technology Robert Whitaker, Georgia Southern University Cody King, Georgia Southwestern State University Jerry Rackliffe, Georgia State University Julie Peterson, Kennesaw State University Nancy Stroud, Middle Georgia State University Edward Jolley, Savannah State University Marcus J. Latham, South Georgia State College Ryan Nesbit, University of Georgia Mac McConnell, University of North Georgia Jim Sutherland, University of West Georgia Traycee Martin, Valdosta State University Diane Hickey, Board of Regents, University System Office University System of Georgia Highlights: Courtesy of University System of Georgia Communications and Governmental Affairs Photography: Courtesy of University System of Georgia Institutions 230 University System of Georgia USG.EDU 270 Washington Street, SW Atlanta, GA 30334 404.962.3049