Fiscal Year 2003-04
As of
1. Association-wide reserve will be funded at 33 1/3 percent of the annual budget less revenue distribution (or approximately four months of operating funds). In 2004-05 this allocation will be directed to the NCAA operating reserve.
2. Working capital fund will be funded at 10 percent of total revenue. This reserve provides cash flow needs until the majority of revenues are received following the Division I Men’s Basketball Championship. In 2004-05 this allocation will be directed to the NCAA quasi-endowment reserve.
3. Office building improvement reserve will be funded at $300,000 annually for future capital improvements to NCAA facilities over the life of the lease.
The following is a summary of net
assets as of
1. Permanently restricted net assets. ($147,603)
Assets are restricted for support of the leadership conference and scholarships in perpetuity.
2. Temporary restricted net assets. ($53.4 million)
a.
NCAA headquarters and related facilities lease
($49.3 million). This
represents the future value of the NCAA lease for the headquarters and related
facilities with the Indiana White River State Park Development Commission. The NCAA lease has a term of 30 years
with three 10-year renewal options and requires the NCAA to make annual lease
payments in the amount of one dollar.
The NCAA temporarily restricted net assets represent the present value
of future facility lease contributions over the next 54 years.
b. Restricted student-athlete programs ($4.1 million). Amount represents restricted assets for selected youth and student-athlete programs. The majority of these funds are restricted to alcohol education grant programs, Stay in Bounds youth program and leadership conferences.
3. Unrestricted net assets. ($184.1 million)
a.
Association-wide reserve ($54.0 million). The NCAA has approximately $54 million
in Association-wide reserves. At
its October 1999 meeting, the Executive Committee approved a reserve goal of 33
1/3 percent of the annual budget less the revenue distribution (or
approximately four months of operating funds). The reserve is based on the 2004-05
budget. As of
b.
Working capital ($49.0 million). The working capital fund was established
to fund Association championships, programs and operations proportionately
throughout the year prior to the Association earning its revenue. The Executive Committee approved a
policy that requires the Association to have 10 percent of its revenue
allocated to a working capital fund.
As a result of the change in cash flows from the CBS agreement, this
allocation will be directed to the NCAA quasi-endowment in 2004-05.
c. Student-athlete programs ($15.1 million). The amount represents the unrestricted assets the NCAA Foundation transferred to the NCAA as of August 31, 2002. The resources have been used to fund student-athlete scholarships, life skills and leadership programs. Approximately 60 percent of the assets are invested in equities and the remaining 40 percent invested
in fixed income. This reserve will be allocated to the
new NCAA quasi-endowment fund in 2004-05.
d.
Division II membership trust ($18.2 million). The Divisions II membership trust
reserve has accumulated since 1997-98.
The trust constitutes the amount available for future divisional
strategic initiatives.
e.
Division III membership trust ($8.9 million). The Divisions III membership trust
reserve has accumulated since 1997-98.
The trust constitutes the amount available for future divisional
strategic initiatives.
f.
Furniture and equipment ($3.8 million). The furniture and equipment fund is an
estimated value of existing fixed assets.
The purpose of the reserve is for future depreciation of capital assets
and repair and replacement for furnishings and fixtures in the NCAA facilities.
g.
Office building improvement reserve ($3.2 million). This represents capital improvement
reserve for NCAA facilities for future needs of the national office’s
conference center, distribution center and the Hall of Champions. The NCAA Executive Committee has
approved an annual allocation of $300,000 over the life of the lease.
h. Centennial and championships anniversaries reserve ($2.5 million). Amount represents funds available to support the plans for the NCAA Centennial that will be celebrated in 2006 and championships that are having their 25th, 50th
or 75th
anniversary celebration. In 2005-06
most women’s championships will be celebrating their 25th
anniversary. As of August 31, 2004,
the centennial reserve is approximately $1.75 million and the championship
anniversary reserve is $750,000.
The Executive Committee has approved an additional $750,000 for the Centennial
reserve from the 2004-05 fiscal year or a total of $2.5 million. Any additional funding will result from
reallocation, sponsorships or from the presidents strategic initiatives.
i.
Available for operations ($29.4 million). Amount represents funds available for
association-wide strategic initiatives, NCAA quasi-endowment and for
distribution to the Division I membership.
The available funds are due to actual revenue and expense results being
more favorable than the planned. The amount available for operations represents
approximately six and one half percent of the total budget for 2003-04. The surplus available for operations can
be attributed to actual results outperforming planned results in Division I
championships ($17.2 million); television and marketing rights ($.7 million);
investment revenue ($4.7 million); legal and contingencies ($5.8 million) and other
($1.0 million).