2011 PHFA Annual Report - Pennsylvania Housing Finance Agency

Management’s
discu ssion and anal ysis
(Amounts rounded to facilitate easy reading)
Introduction
This discussion and analysis of the financial performance of the Pennsylvania Housing Finance
Agency (“Agency”) is required supplementary information. It introduces the financial statements for
the year ended June 30, 2011 with selected comparative information for the years ended June 30, 2010
and June 30, 2009. It provides the financial highlights and assessments that, in management’s view,
significantly affected the Agency’s overall financial position. Readers are encouraged to consider the
information presented in conjunction with the financial statements as a whole, which follow
this section.
Basic Financial Statements
The Agency’s basic financial statements include the Balance Sheet, the Statement of Revenues,
Expenses and Change in Fund Net Assets, the Statement of Cash Flows and the Notes to
Financial Statements.
The Balance Sheet provides information about the liquidity and solvency of the Agency by indicating
the nature and the amounts of investments in resources (assets), the obligations to creditors (liabilities)
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and net assets. Net assets represent the amount of total assets, less liabilities. The organization of the
statement separates assets and liabilities into current and noncurrent categories.
The Statement of Revenues, Expenses and Change in Fund Net Assets accounts for all of the current
year’s revenue and expenses in order to measure the success of the Agency’s operations over the
past year. It is used to determine how the Agency has funded its costs. By presenting the financial
performance of the Agency, the change in net assets is similar to net profit or loss for a business.
The Statement of Cash Flows is presented using the direct method of reporting. It provides
information about the Agency’s cash receipts, cash payments and net changes in cash resulting
from operating, investing and financing activities. Cash receipts and payments are presented in this
statement to arrive at the net increase or decrease in cash and cash equivalents for each year.
The financial statements are accompanied by a complete set of notes and required supplementary
information. They present information that is essential in understanding the financial statements,
such as accounting methods and policies providing information about the content of the
financial statements.