O FFICE OF THE A RIZONA S TATE T REASURER 3.9.2011 ARIZONA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS.
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Transcript of O FFICE OF THE A RIZONA S TATE T REASURER 3.9.2011 ARIZONA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS.
OFFICE OF THE ARIZONA STATE TREASURER
3.9.2011
ARIZONA ASSOCIATION OF SCHOOL BUSINESS
OFFICIALS
ARIZONA STATE TREASURER DOUG DUCEY
AGENDA: 3.9.2011
Endowment PerformanceAsset Allocation ChangesEndowment Distribution Formula
State Cash FlowQ & A
OFFICE OF THE ARIZONA STATE TREASURER
ENDOWMENT PERFORMANCE
Through December 2010
ARIZONA STATE TREASURER DOUG DUCEY
ENDOWMENT PERFORMANCE
Privately-owned land
State trust land
Tribal Reservations
US Forest Service
Bureau of Land Management
ARIZONA STATE TREASURER DOUG DUCEY
ENDOWMENT PERFORMANCE
$1,600.04M
$1,052.42M
$502.79M
ARIZONA STATE TREASURER DOUG DUCEY
ENDOWMENT MARKET VALUE
UPWARD TREND
$3.15 Billion
!
ARIZONA STATE TREASURER DOUG DUCEY
ENDOWMENT UNREALIZED GAINS
GAINS AT RECORD HIGH
$713 millio
n!
ARIZONA STATE TREASURER DOUG DUCEY
CHANGE SINCE 2010
SHARES
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
MARKET VALUEBOOK VALUE
$2,0
36,3
03
$23,1
58,9
17 $
2,2
77,2
32
$2,4
41,4
90 $2,6
69,6
74
$3,1
55,2
62
DEC 09 DEC 10
ENDOWMENT FY 11 2ND QUARTER
ARIZONA STATE TREASURER DOUG DUCEY
UNREALIZED GAINS
$392,4
41
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
0
$713,7
72
CHANGE SINCE 2010
DEC 09 DEC 10
ENDOWMENT FY 11 2ND QUARTER
ARIZONA STATE TREASURER DOUG DUCEY
UNREALIZED GAINSSHARES MARKET VALUEBOOK VALUE
ENDOWMENT FY 11 2ND QUARTER
OFFICE OF THE ARIZONA STATE TREASURER
Endowment Asset
Allocation Changes
ARIZONA STATE TREASURER DOUG DUCEY
ASSET ALLOCATION: 1999
100% BONDS
ARIZONA STATE TREASURER DOUG DUCEY
ASSET ALLOCATION: MARCH 2003
50% BONDS
50% STOCKS
ARIZONA STATE TREASURER DOUG DUCEY
ASSET ALLOCATION: MARCH 2011
49% BONDS
51% STOCKS
ARIZONA STATE TREASURER DOUG DUCEY
TARGET ASSET ALLOCATION: FEB 2011
With +/- 5% market value rebalance triggers.
Sell high, buy low.
40% BONDS
60% STOCKS
OFFICE OF THE ARIZONA STATE TREASURER
Endowment Distribution
Formula
ARIZONA STATE TREASURER DOUG DUCEY
ADJUSTED FOR INFLATION
Formula takes 20% of the returns adjusted for inflation from each of the previous five years.
20%
20%
20%
20%
20%
ARIZONA STATE TREASURER DOUG DUCEY
4.68%
12.07%
-2.46%
-11.40%
11.53%
2.88%
-15%
-10%
-5%
0%
5%
10%
15%
2006 2007 2008 2009 2010 Average
5-YEAR AVG. TOTAL RETURN : 2.88%
HOW THE FORMULA WORKS
ARIZONA STATE TREASURER DOUG DUCEY
HOW THE FORMULA WORKS
3.55%
3.10%
2.03%
1.13%0.85%
2.13%
0%
1%
2%
3%
4%
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Average
5-YEAR AVGERAGE INFLATION: 2.13%SUBTRACT
ARIZONA STATE TREASURER DOUG DUCEY
HOW THE FORMULA WORKS
$1,745
$2,042
$2,377 $2,176
$2,450
$2,158
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 average(in millions)
Results in a $16.2 million K-12 distribution in FY11
Equals .75% multiplied by 5-year average market value of $2.158 billion
ARIZONA STATE TREASURER DOUG DUCEY 2121
WHAT’S THE FORMULA FORECAST FOR 2012?2012 PRELIMINARY ESTIMATE
ARIZONA STATE TREASURER DOUG DUCEY 2222
WHAT’S THE FORMULA FORECAST FOR 2012?2012 PRELIMINARY ESTIMATE
ARIZONA STATE TREASURER DOUG DUCEY 2323
WHAT’S THE FORMULA FORECAST FOR 2012?
= estimated FY 12 distribution of $45 million
2012 PRELIMINARY ESTIMATE
OFFICE OF THE ARIZONA STATE TREASURER
STATE CASH FLOW
ARIZONA STATE TREASURER DOUG DUCEY
STATE CASH FLOWTOTAL OPERATING ACCOUNT AVERAGE MONTHLY
BALANCEBACK IN THE BLACK
$863 million in February
OFFICE OF THE ARIZONA STATE TREASURER
QUESTIONS?