## The Fund’s Income Position for FY 2010—Actual Outcome

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### Net operational income and overall outcome
- Actual FY 2010 net operational income: SDR 367 million (close to the April projection of SDR 365 million).
- Operational income: SDR 954 million (projection SDR 957 million).
- Expenditures: SDR 587 million (projection SDR 592 million).
- Net income position after adjustments: SDR 3,980 million (Table 1 entries leading to Net income position 3,740 / 3,980 — see Table 1 layout).

### Key components and exact figures (from Table 1)
- A. Operational income (projection / actual outcome): 957 / 954
  - Lending income: 798 / 788
    - Margin for the rate of charge: 344 / 342
    - Service charges 2/: 191 / 186
    - Surcharges: 263 / 260
  - Investment income: 144 / 152
  - Interest free resources: 11 / 11
    - SCA-1 and other: 9 / 9
    - Gold book value: 2 / 2
  - Reimbursements: — / 43
    - MDRI-I Trust and SDR Department: — / 43
- B. Expenses 3/: 592 / 587
  - Net administrative expenses: 558 / 554
  - Capital budget items expensed: 8 / 7
  - Depreciation: 26 / 26
- C. Net operational income position (A-B): 365 / 367
- Gold profits 4/: 3,500 / 3,753
- Restructuring costs-12 / -7
- IAS 19 timing difference 5/: -94 / -112
- Pension reforms (IAS 19 expense) 6/: -19 / -21
- Net income position: 3,740 / 3,980
- Fund credit (average stock, SDR billions): 34.4 / 34.2
- SDR interest rate (in percent): 0.25 / 0.29
- Average US$/SDR exchange rate: 1.56 / 1.56

Notes from Table 1:
- 2/ Includes commitment fees, which are refundable (when disbursements take place) so income only arises at expiration or cancellation of an arrangement to the extent planned disbursements are not made.
- 3/ The administrative expenses reported in the FY 2010 financial statements, see Table 3, include non-operational costs (i.e., the restructuring costs and the IAS 19 timing difference).
- 4/ Includes announced gold sales during the off-market phase of 212 metric tons in October and November and 39 metric tons sold during the on-market phase through end-April.
- 5/ IAS 19 is the accounting standard that prescribes the accounting treatment for pension and employee benefit costs.
- 6/ Accrued costs upon adoption of the amendments to the staff retirement plan.

### Investment Account (IA) performance
- IA return for FY 2010: 2.55 percent.
- IA return exceeded the SDR interest rate by: 226 basis points.
- Context: IA returns in FY 2009 were 6.29 percent and exceeded the SDR interest rate by 449 basis points.

### Gold sales and treatment of proceeds
- Net income includes gold profits from FY 2010 sales: about SDR 3.8 billion.
- Quantity sold: 251 metric tons (about 62 percent of the approved 403.3 metric tons).
- Treatment: Gold profits have been retained in the GRA pending amendment of the Articles of Agreement to broaden the investment mandate.
- As agreed, FY 2010 income of the IA has been transferred to the General Resources Account and the FY 2010 net income has been placed in the Special Reserve.

### Restructuring costs and provision (Annex 1)
- Total restructuring costs incurred during FY 2010: SDR 35 million (about US$55 million).
  - SDR 28 million charged against the restructuring provision established in FY 2008 (costs for which no services were expected to be rendered, e.g., modified SBF payments, outplacement, retraining).
  - SDR 7 million recognized as expense during FY 2010 for costs related to services from which the Fund benefited (e.g., salaries during staff delay/deferral).
- FY 2008 restructuring provision accrual required under IFRS: SDR 68 million.
- Balance at end-FY2009: SDR 55 million.
- Following utilization of SDR 28 million in FY 2010, remaining restructuring provision at end-FY 2010: SDR 27 million.
- Table 4 reconciliation (in U.S. dollars):
  - Costs recognized in the financial statements 1/: 55
  - Add: Pension and employee benefit contributions 2/: 7
  - Total costs — budget outturn: 62
  - Footnotes:
    - 1/ A total of SDR 35 million (SDR 28 million charged against the provision and SDR 7 million related to staff delay costs) converted at the FY 2010 average US$/SDR exchange rate of 1.56.
    - 2/ The budget outturn includes pension contributions made with respect to separating staff, but under IFRS the contributions are included in plan assets.

### IAS 19 pension and employee benefits accounting
- Actuarially determined IAS 19 expense for benefits earned during FY 2010: SDR 219 million.
- Funding to pension plans and other long-term employee benefits for FY 2010: SDR 107 million.
- IAS 19 timing difference (actuarial expense minus funding): SDR 112 million (Tables 1 and 2).
- Pension reform past service costs recognized during FY 2010 due to amendments effective May 1, 2011: SDR 21 million.

### Variance analysis (Table 2 highlights)
- Income sources: previous projection 957; actual outcome 954.
  - Change due to Investment Account income: 8
  - Change due to Margin for the rate of charge, service charges and surcharges 2/: (10)
  - Change due to Reimbursement of MDRI-I Trust and SDR Department: (1)
- Administrative and capital expenses: previous projection 592; actual outcome 587.
  - Change due to Actual budget outturn 3/: (6)
  - Change due to Reimbursement from MDRI-I Trust: 1
- Net operational income: actual outcome (A.1 – B.1): 367

Notes from Table 2:
- 1/ This table explains the changes from the previous estimates.
- 2/ The lower lending income reflects rephasing of disbursements under certain arrangements.
- 3/ The actual budget outturn of $863 million, was some $8 million lower than the 9-month projection.

### Reconciliation of administrative expenses (Table 3)
- Net administrative budget outturn: 863 (U.S. dollars, millions)
- Capital budget items expensed: 10
- Depreciation: 41
- Total expenses per Table 1 (U.S. dollars): 914
- Total expenses per Table 1 (in SDR millions) 1/: 587
- Restructuring costs (SDR millions): 7
- Pension reforms IAS 19 expense (SDR millions): 21
- IAS 19 timing difference (SDR millions) 2/: 112
- Total administrative expenses per the audited financial statements (SDR millions): 725

Notes from Table 3:
- 1/ Based on the average FY 2010 US$/SDR exchange rate of 1.56.
- 2/ This reflects the difference between FY 2010 pension and other employee benefit costs (SDR 107 million) and the IAS 19 actuarial expense (SDR 219 million).

### Decisions and implementation status
- No further decisions required at this time; Executive Board took necessary decisions in April 2009 and during the review of the Fund’s income position for FY 2010 and FY 2011.
- In accordance with those decisions:
  - FY 2010 income of the IA has been transferred to the General Resources Account.
  - FY 2010 net income has been placed in the Special Reserve.

*Prepared by the Finance Department in consultation with the Legal Department and the Office of Budget and Planning; Approved by Andrew Tweedie; August 11, 2010.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2010/_081110.pdf_