FY2016 CCDOA Financial Report as of 6302016.pdf - page 70

Notes to Financial Statements
For the Fiscal Years Ended June 30, 2016 and 2015
With the implementation of GASB 72, the derivative instruments are valued at fair value. The fair values
of the interest rate derivative instruments were estimated using an independent pricing service. The
valuations provided were derived from proprietary models based upon well-recognized principles and
estimates about relevant future market conditions. The instruments' expected cash flows are
calculated using the zero-coupon discount method, which takes into consideration the prevailing
benchmark interest rate environment as well as the specific terms and conditions of a given
transaction and which assumes that the current forward rates implied by the benchmark yield curve
are the market’s best estimate of future spot interest rates. The income approach is then used to
obtain the fair value of the instruments by discounting future expected cash flows to a single valuation
using a rate of return that takes into account the relative risk of nonperformance associated with the
cash flows and the time value of money. This valuation technique is applied consistently across all
instruments. Given the observability of inputs that are significant to the entire sets of measurements,
the fair values of the instruments are based on inputs categorized as Level 2.
Grants receivable as of June 30, 2016 and 2015, comprise FAA grants in the amounts of $0.3 million and
$20.3 million, respectively. The decline relates to several grant-funded projects ending in FY 2016.
The Master Indenture of Trust requires segregation of certain assets into restricted accounts. The
Department has also included Passenger Facility Charges and Jet A Fuel Tax revenue-related assets as
restricted assets because these assets have been pledged for capital projects and debt service.
Restricted assets reported in the financial statements consist of the following:
1...,60,61,62,63,64,65,66,67,68,69 71,72,73,74,75,76,77,78,79,80,...169
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