The Brazos River Authority Waco Texas

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BRAZOS RIVER AUTHORITYMANAGEMENT’S DISCUSSION AND ANALYSISAUGUST 31, 2008, 2007 AND 2006 (in thousands)As management of the Brazos River Authority, we offer readers of the Authority’s financial statements thisnarrative overview and analysis of the financial activities of the Authority for the fiscal year ended August 31,2008 in comparison with the two prior year financial results. We encourage readers to consider theinformation presented here in conjunction with additional information that we have furnished in our letter oftransmittal, which can be found on Pages x to xviii of the Introductory Section of this report.Financial Highlights Total assets at the end of Fiscal Year 2008, 2007 and 2006 were $338,673, $336,249 and $312,030,respectively. Total assets exceeded liabilities at the end of Fiscal Year 2008, 2007 and 2006 by $141,754,$131,291 and $126,263, respectively.Total assets for Fiscal Year 2008 increased $2,424 over prior year primarily as a result of improvedoperations.Total assets for Fiscal Year 2007 increased $24,219 over prior year primarily as a result of unspent bondproceeds and additional construction activities attributable to the issuance of the series 2006 revenuebonds and the improved results of operations.The Authority ended Fiscal Year 2008 with an increase in net assets of $10,463, an increase in net assetsof $5,028 for Fiscal Year 2007 and a decrease in net assets of $5,855 in Fiscal Year 2006.The increases and decreases in capital assets for the past three years and the events causing these changesare noted below:2008 2007 2006Net additions to land and land rights $ - $ 41 $ 350Additions to construction-in-progress 13,943 23,673 8,408Transfers from construction-in-progress to capital assetsbeing depreciated (33,556) (3,269) (5,688)Additions and transfers to capital assets being depreciated 34,431 2,475 2,946Deletions and transfers (544) (84) (4,710)Normal annual depreciation (8,692) (8,384) (8,550)TOTAL $ 5,582 $ 14,452 $ (7,244)For Fiscal Year 2008, total outstanding debt decreased by $5,749. This decrease is a result of requiredannual principal payments on revenue bonds, contracts payable and accretion on capital appreciationbonds of $4,795, $1,061 and $107, respectively.6
BRAZOS RIVER AUTHORITYMANAGEMENT’S DISCUSSION AND ANALYSISAUGUST 31, 2008, 2007 AND 2006 (in thousands) For Fiscal Year 2007, total outstanding debt increased by $13,073. This net increase is a result of $17,805in new bonds being issued for the costs of the continued expansion of the East Williamson CountyRegional Water System and $550 of new contracts payable debt issued to acquire water rights from theBrazos Electric Power Cooperative, Inc. In addition, required annual principal payments on revenuebonds, contracts payable and accretion on capital appreciation bonds of $4,365, $1,019 and $102,respectively. For Fiscal Year 2006, total outstanding debt increased by $13,169. This net increase is a result of $23,210in new bonds being issued of which $10,335 was issued for the costs of acquisition and expansion of theEast Williamson County Regional Water System and $12,875 was issued for the costs of repairs at MorrisSheppard Dam on Possum Kingdom Lake. Excess construction funds were returned to the Texas WaterDevelopment Board to reduce the obligation on the Series 1999 bonds by $5,045. In addition, requiredannual principal payments on revenue bonds, contracts payable and accretion on capital appreciationbonds of $4,070, $1,022 and $96, respectively.Overview of the Financial StatementsThe Management’s Discussion and Analysis is intended to serve as an introduction to the Authority’s basicfinancial statements. The Authority’s basic financial statements are composed of Statements of Net Assets,Statements of Revenues, Expenses and Changes in Net Assets, Statements of Cash Flows, CombinedStatements of Fiduciary Net Assets, and Notes to the Basic Financial Statements. This report also containsother supplementary information and statistical information in addition to the basic financial statementsthemselves.Basic financial statements. The financial statements are designed to provide readers with an overview of theAuthority’s finances, in a manner similar to private-sector business.The Statement of Net Assets presents information on all of the Authority’s assets and liabilities, with thedifference between the two reported as net assets. Over time, increases or decreases in net assets may serveas a useful indicator of whether the financial position of the Authority is improving or deteriorating. TheStatement of Net Assets can be found on Page 16 of this report.The Statement of Revenues, Expenses and Changes in Net Assets presents information showing how theAuthority’s net assets changed during the most recent fiscal year. All changes in net assets are reported assoon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.Thus revenues and expenses are reported in this statement for some items that will only result in cash flows infuture fiscal periods. The increase or decrease in net assets may serve as an indicator of the effect of theAuthority’s current year operations on its financial position. The Statement of Revenues, Expenses andChanges in Net Assets can be found on Page 18 of this report.The Statement of Cash Flows summarizes all of the Authority’s cash flows into three categories, asapplicable: 1) cash flows from operating activities, 2) cash flows from capital and related financing activities,and 3) cash flows from investing activities. The Statement of Cash Flows can be found on Page 19 of thisreport. The Statement of Cash Flows, along with the related notes and information in other financialstatements, can be useful in assessing the following:7
Page 1: The Brazos River AuthorityWaco, Tex
Page 4 and 5: BRAZOS RIVER AUTHORITYCOMPREHENSIVE
Page 7 and 8: Introductory Section2008 Comprehens
Page 9 and 10: BrazosRiverAuthorityWade ComptonGea
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The Brazos River Authority Waco Texas

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