ANNUAL MANAGEMENT REPORT OF THE 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

FOR FISCAL YEARS 2018 AND 2017 

SUBMITTED PURSUANT TO 

THE CHIEF FINANCIAL OFFICERS ACT OF 1990 

(31 U.S.C., Section 9106) 

AND IN ACCORDANCE WITH OMB’S CIRCULAR A-136 
 

 

 

 

 

 

 

_____________________________________________________________________________________ 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

TABLE OF CONTENTS 

Agency Head Letter 

Management's Discussion & Analysis 

Independent Auditors' Report 

Financial Statements 

Balance Sheet 

Statement of Net Cost 

Statement of Changes in Net Position 

Statement of Budgetary Resources 

Notes to the Financial Statements 

Note 1 Summary of Significant Accounting and Reporting Policies 

Note 2 Fund Balance with Treasury 

Note 3 Investments 

Note 4 Accounts Receivable, Net 

Note 5 Direct Loans and Loan Guarantees, Non-Federal Borrowers 

Note 6 Property and Equipment, Net 

Note 7 Liabilities Covered and Not Covered by Budgetary Resources 

Note 8 Borrowings from Treasury 

Note 9 Downward Reestimate Payable to Treasury 

Note 10 Unearned Revenue 

Note 11 Insurance Liabilities and Claim Recoveries 

Note 12 Other Liabilities 

Note 13 Leases 

Note 14 Budgetary Resources 

Explanation of Differences Between the Statement of Budgetary Resources and the Note 15 Budget of the United States Government 

Note 16 Reconciliation of Net Cost of Operations to Outlays 

Required Supplementary Information 

Combining Statement of Budgetary Resources by Major Budget Account 

Risk Assumed Information 

Other Information 

 Report on Improper Payments 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

November 9, 2018 

On behalf of the Overseas Private Investment Corporation, I am pleased to provide you with the 

Corporation's Annual Management Report and Financial Statements, which provides important 

information about the Corporation and its finances. 

I am pleased that OPIC has successfully received another unmodified audit opinion. OPIC continued 

to prudently manage exposure and risks through a combination of investment in core systems, 

bolstered governance, and targeted business development. 

In FY 2018, OPIC had combined total exposure of $22.8 billion. OPIC reported net costs of operations 

of ($149) million while maintaining corporate reserves of $5.8 billion in Treasury securities. FY 2018 

marks the 41st consecutive year that OPIC’s revenues have exceeded its costs thereby reducing the 

deficit. OPIC achieved these financial results by adding new commitments of $3.3 billion in 

development financing and political risk insurance to its diverse portfolio. 

These FY 2018 achievements are a testament to the value OPIC brings to U.S. taxpayers as a small 

agency that engages the private sector through its effective, scalable business model using the 

revenues it earns to cover the costs of its operations and making a contribution to deficit reduction. 

We welcome any questions you may have, and we look forward to working with you in Fiscal Year 

2019. 

Sincerely, 

Ray W. Washburne 

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MANAGEMENT’S DISCUSSION & ANALYSIS 

MISSION 

The Overseas Private Investment Corporation is the U.S. Government’s development finance 

institution. OPIC was created in 1969 under the Foreign Assistance Act of 1961 (FAA), as 

amended, as an agency of the U.S. Government and began operations in 1971 in accordance with 

the goals envisioned by Congress and incorporated in OPIC’s authorizing statute. The agency’s 

mission is to mobilize private capital to help address critical development challenges and in doing 

so, advance U.S. foreign policy and national security priorities. Because OPIC works with the U.S. 

private sector, it helps U.S. businesses gain footholds in emerging markets, catalyzing revenues, 

jobs and growth opportunities both at home and abroad. OPIC achieves its mission by providing 

investors with financing, political risk insurance, and support for private equity investment funds, 

when commercial funding cannot be obtained elsewhere. OPIC operates on a self-sustaining basis 

at no net cost to American taxpayers. 

All OPIC projects adhere to high environmental and social standards and respect human rights, 

including workers’ rights. By mandating high standards, OPIC aims to raise the industry and 

regional standards in countries where it funds projects. OPIC services are available for new and 

expanding business enterprises and currently has active projects in 88 countries. 

With FY 2018, OPIC completed its 41st consecutive year of generating negative outlays for the 

U.S. taxpayer while executing on its mission of development finance. Overall, the agency 

produced $3.3 billion in finance and insurance commitments and reduced the deficit to the benefit 

of the Treasury by $116 million. 

As of September 30, 2018, the Corporation had combined total exposure of $22.8 billion or, 79% 

of a total authorized exposure limit of $29 billion. Consistent with OPIC’s legislated limitation, 

this amount includes undisbursed commitments (obligations) and maximum contingent liability 

under OPIC’s current insurance contracts. 

ORGANIZATIONAL STRUCTURE 

Board of Directors 

OPIC’s Board of Directors consists of fifteen members - eight from the private sector and seven 

from the federal government. At least two of the private sector directors must be experienced in 

small business, one must represent organized labor, and another must have experience in 

cooperatives. Government members include the Administrator of the Agency for International 

Development, the United States Trade Representative or Deputy U.S. Trade Representative, the 

President of OPIC, and four additional members who are senior officials of other government 

agencies, including the Department of Labor. All members are appointed by the President of the 

United States and confirmed by the Senate. 

The Board of Directors, which meets four times per year, provides policy guidance to the 

Corporation and approves all major insurance, project finance and investment funds projects. The 

Board of Directors has instituted two committees to assist it in its oversight responsibilities. 

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Audit Committee 

The Audit Committee has oversight responsibility of OPIC’s financial reporting, internal control, 

and internal and external audit processes. 

Risk Management Committee 

The Risk Management Committee is responsible for reviewing, evaluating, coordinating, and 

making recommendations to the P&CEO and senior management on financial, credit, legal, 

operational, reputational, and other risks. 

Executive Offices 

OPIC Organization Chart 

Office of the President and Chief Executive Officer – The President and CEO of the Corporation 

provides overall leadership, and chairs the Board of Directors. The Office includes the Senateconfirmed Executive Vice President, the Chief of Staff, and the Office of Accountability. 

Office of External Affairs - The Office of External Affairs engages all of OPIC’s stakeholders in 

Congress, the Executive Branch, and the public at large. OEA conducts outreach to potential 

investors, provides internal support and resources for information needs, and addresses press 

inquiries. 

Department of Financial and Portfolio Management – This office is responsible for the financial 

leadership of OPIC through financial management, controls, risk and portfolio management. FPM 

works with Senior Management to link financial and performance information to decision-making 

and ensure that strong internal control remains a part of all key management processes. FPM is 

comprised of 6 units that together, ensure the agency maintains the highest level of stewardship 

over OPIC’s accounting, portfolio, and risk management systems. 

o Financial Management 

o Budget and Resource Planning 

o Credit Policy 

o Portfolio Management Division 

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o Development Partnerships Frameworks Division 

o Risk Management 

Small and Medium Enterprise Finance (SMEF) - SMEF lends to small and mid-market companies 

in developing overseas projects. SMEF works in a wide variety of industries. Sectors that receive 

special emphasis are renewable energy, impact investing, housing, and microfinance. 

Structured Finance and Insurance (SFI) - Structured Finance and Insurance provides financing 

and insurance for larger and more complex projects due to either size, complexity, or location in 

high-priority foreign policy areas. SFI also offers eligible investors and projects insurance or 

reinsurance against risks of currency inconvertibility, expropriation, or political violence. OPIC 

also provides more specialized forms of insurance such as cover for capital markets, contractors, 

or institutional lenders with exposure in an eligible country. 

Investment Funds - The Investment Funds Department supports through its lending the creation of 

privately owned, privately managed investment funds that make direct equity and equity-related 

investments in new, expanding, or privatizing companies. By providing long-term, patient growth 

capital and facilitating critically needed technology and management skills development, these 

funds act as a catalyst for private sector economic activity in the developing countries served. 

Office of Human Resources Management – Provides the range of services and strategic support for 

OPICs key resource – its people. HRM provides for all human capital needs of the Corporation 

including: hiring, performance management, learning management, benefits, labor relations, and 

workforce planning. 

Office of Investment Policy - The Office of Investment Policy (OIP) implements statutory and 

policy requirements on OPIC’s programs and lending. OIP screens, evaluates, and monitors 

projects for risks to the environment, respect for worker and human rights as well as impacts on 

US employment and the US economy. 

Legal Affairs - The Department of Legal Affairs provides in-house legal counsel and advice for all 

of OPIC including counsel to the Board of Directors and senior management, support for all 

transactions, interpretation and advice on laws, and negotiation of bilateral agreements with 

foreign governments. 

Department of Management & Administration - The Department of Management and 

Administration (DMA) offers a wide variety of programs to manage the agency’s facilities and 

assets, and provides a wide range of support services. 

o Chief Information Officer 

o Security, Continuity and Emergency Preparedness 

o Facilities and Administrative Services 

o Planning, Risk and Controls 

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KEY ISSUES 

Summarized below are key issues to a reader of OPIC’s Financial Statements. Not all matters 

material to the Financial Statements are discussed below. 

Key Challenge: Reauthorization of the Corporation – As of September 30, 2018, the Corporation 

is operating under the provisions of a Continuing Resolution (Public Law 115-245), which as of 

this report, extends OPIC’s core programs through December 7, 2018. Authorization for OPIC to 

continue operating during the remainder of fiscal year 2019 depends upon Congress enacting 

legislation to extend the authority of the Corporation. 

OPIC Response: On October 5, 2018 the President of the United States signed the BUILD Act 

(Public Law 115-254) establishing the United States International Development Finance 

Corporation which will assume the assets and obligations of OPIC, as well as the responsibility 

for its programs. OPIC welcomes the creation of the new, reformed Corporation which extends 

the authority for OPIC’s legacy programs through 2025. 

Key Challenge: Regional Concentrations - OPIC must meet its mission to support the mobilization 

of private capital in the most challenging regions of the world while at the same time remaining 

self-sustaining and managing its exposure. In addition, OPIC must support U.S. development 

policy and broad national security strategy such as economic recovery in post-conflict areas. This 

could lead to particular concentrations of risk and exposure which OPIC must reconcile to its selfsustaining mandate. 

OPIC Response: As of September 30, 2018, OPIC’s exposure is $22.8 billion. OPIC actively 

monitors and manages its exposure to balance its mission against its responsibility to operate in a 

self-sustaining manner. OPIC’s exposure has a geographic distribution as follows: 

Maximum Worldwide Exposure by Geographic Region 

As of September 30, 2018 

Dollars, Millions 

Latin America and the Caribbean $6,042 26% 

Sub-Saharan Africa $5,796 25% 

North Africa/Middle East $3,509 15% 

Eastern Europe & NIS $3,229 15% 

Asia $3,731 16% 

Worldwide Funds $1,227 5% 

Stop Loss Adjustments ($690) -3% 

TOTAL $22,844 100% 

Statutory Limitation $29,000 

The Corporation meets a straightforward measure of its self-sustaining mandate through prudent 

risk management, sound underwriting, a diversified portfolio, and maintaining collections in 

excess of its revenues. 

Key Challenge: Portfolio Risks - As a lender and insurer in developing countries, OPIC faces and 

manages the possibility that a significant credit or insurance event affecting multiple transactions 

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could trigger net losses in OPIC’s portfolio. While unlikely, it is possible that these events could 

result in costs exceeding collections in a future fiscal year. 

OPIC Response: Risk Governance and Management – While the past is never a guarantee for the 

future, for the last 41 years of OPIC’s 47-year history, collections have exceeded costs. There were 

only two years in the first six years of OPIC’s history in which the Corporation expended more 

cash than it collected. 

The Corporation and its governing legislation anticipates the potential risk of net losses by (1) 

budgeting and accounting for risks in the credit portfolio through the Federal Credit Reform Act 

of 1990, (2) drawing on OPIC’s long experience with managing any losses then mitigating them 

through recoveries, and (3) counterbalancing any potential event with OPIC’s actual cumulative 

record and $5.8 billion in reserves held in Treasury securities. 

In addition, OPIC management continues to improve its methods and processes to better manage 

risk – ranging from more detailed accounting under the Federal Credit Reform Act of 1990, to new 

financial risk analysis platforms, to a more comprehensive Enterprise-wide risk process at OPIC. 

Management’s investments in risk analytics, processes, and operational risk management will 

enable the Corporation to continue its development mission even while protecting the taxpayer 

and contributing to the deficit reduction through self-sustaining operations. 

Key Challenge: Relationship of Collections to Appropriations – OPIC’s resources are appropriated 

from its own earnings and not from the General Fund of the U.S. Treasury. These resources are 

used to staff and support the teams which conduct, underwrite, monitor, support and account for 

transactions. Achieving projected levels of collections is dependent upon the Corporation having 

the budgetary resources necessary to support these activities. Under current programs, transactions 

on average generate more income than they use – producing income which is credited during the 

appropriations process. 

OPIC Response: OPIC carefully screens its projects so as to focus its limited resources on the most 

valued-added and mission-relevant projects. OPIC works with its appropriators, the Office of 

Management and Budget, and its existing flexibilities to ensure it has the resources necessary to 

manage and support its existing portfolio and OPIC works within its legislative authorities to 

maximize the resources available for its use. 

PERFORMANCE GOALS, OBJECTIVE, AND RESULTS 

By charging fees and focusing on sustainable projects, OPIC operates at no net cost to the Treasury 

or taxpayer. Since the agency’s establishment in 1971, OPIC has generated cumulative results of 

operations of $5.8 billion. 

OPIC continued to be a net contributor to the budget and to operate on a self-sustaining basis, even 

as it deployed additional capital in an environment that continues to remain financially 

challenging. OPIC refocused its origination and partnering in response to new clean energy 

targets. 

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OPIC provides significant development benefits in fulfillment of its mission. OPIC’s reporting 

under Section 240 of the Foreign Assistance Act highlights several measures. Listed below are 

FY 2017 results available as of this report: 

Projected Development Impacts of New FY 2017 Projects 

Managerial, Professional and Technical Jobs* 11,242 

Unskilled labor* 1,967 

Initial host country procurement $6.75 billion 

Host country operational procurement* $1.47 billion 

Net annual taxes, revenues, duties paid to the host country* $825.6 million 

Annual host country current account impact 

Exports generated & imports replaced* $1.84 million 

Project-related imports $0.28 million 

* Average annual amount projected over a 5-year period 

FINANCIAL STATEMENTS 

The accompanying FY 2018 financial statements have been prepared in accordance with generally 

accepted accounting principles in the United States applicable to federal agencies. The format of 

the financial statements and footnotes are in accordance the form and content guidance provided 

in Circular A-136, Financial Reporting Requirements, issued by the Office of Management and 

Budget (OMB). Circular A-136 details the financial data required to be disclosed, the assertions 

and reviews over financial information that must be performed and suggests the presentation of 

such information. 

Table of Key Measures (in thousands) 

BALANCE SHEET: 

SUMMARY DATA 

2018 2017 Percent 

Change 

Fund Balance with Treasury 

Investments 

Credit Program Receivable, Net 

Negative Loan Guarantee Liability 

Other Assets 

$ 960,439 

5,828,307 

2,688,903 

153,279 

939 

$ 579,543 

5,759,429 

2,484,543 

250,133 

2,431 

66% 

1% 

8% 

(39)% 

(61)% 

Total Assets $ 9,631,867 $ 9,076,079 6% 

Borrowings from Treasury 

Downward Reestimate Payable to Treasury 

Unearned Revenue 

Other Liabilities 

3,475,086 

204,271 

121,532 

7,123 

3,014,833 

270,295 

119,987 

7,118 

15% 

-24% 

1% 

0% 

Total Liabilities 3,808,012 3,412,233 12% 

Total Net Position 5,823,855 5,663,846 3% 

Total Liabilities and Net Position $ 9,631,867 $ 9,076,079 6% 

STATEMENT OF NET COST: 

SUMMARY DATA 

2018 2017 Percent 

Change 

Gross Costs 

Less: Earned Revenue 

101,292 

(249,814) 

43,732 

(243,512) 

132% 

3% 

Net Cost of Operations $ (148,522) $ (199,780) (26)% 

STATEMENT OF BUDGETARY 

RESOURCES: 

SUMMARY DATA 

2018 2017 Percent 

Change 

Unobligated Balance from Prior Year Budget 

Authority 

Appropriations 

Borrowing Authority 

Spending Authority from Offsetting Collections 

6,190,618 

376,573 

724,489 

869,710 

6,107,472 

282,604 

945,989 

504,497 

1% 

33% 

(23)% 

72% 

Total Budgetary Resources $ 8,161,390 $ 7,840,562 4% 

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Overview of Financial Position 

In accordance with the Chief Financial Officers Act of 1990 and the Government Management 

Reform Act of 1994, OPIC prepared financial statements, which include the Balance Sheet, 

Statement of Net Cost, Statement of Changes in Net Position, and the Statement of Budgetary 

Resources. 

Balance Sheet 

The balance sheet is a representation of OPIC’s financial condition at the end of the fiscal year. It 

shows the resources available to meet its statutory requirements (Assets); the amounts it owes that 

will require payment from the available resources (Liabilities); and, the difference between Assets 

and Liabilities is OPIC’s Net Position. 

Assets 

At the end of FY 2018 and 2017, OPIC held $9.6 billion and $9.08 billion in assets respectively. 

The majority of OPIC’s assets are Fund Balance with Treasury (FBWT), Investments in Securities, 

and Credit Program Receivables. The Balance Sheet separately identifies intragovernmental assets 

from all other assets. The largest category of assets is investments at $5.8 billion, which represents 

60% of all OPIC assets. 

Fund Balance with the U.S. Treasury: The Fund Balance with the U.S. Treasury increased by $381 

million from $580 million at September 30, 2017 to $960 million at September 30, 2018. This 

66% increase is primarily attributed to the net effect of new direct loan disbursements, principal, 

interest and fee collections, and interest on Treasury investments. 

Credit Program Receivable, Net: Loans Receivable increased by $204 million from $2.48 billion 

at September 30, 2017 to $2.69 billion at September 30, 2018. This is driven primarily by $392 

million in direct loan disbursements, offset by repayments and other adjustments. 

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Liabilities 

OPIC liabilities, or amounts owed from past transactions or events, were $3.81 billion and $3.41 

billion as of and for the years ended September 30, 2018 and 2017 respectively. The bulk of these 

liabilities are $3.48 billion in borrowings used to fund credit transactions and $204 million in 

downward reestimates payable. 

Borrowings from the U.S. Treasury: Borrowings from the U.S. Treasury increased $460 million 

from $3.01 billion at the end of fiscal year 2017 to $3.48 billion as of September 30, 2018. The 

net increase is attributable to borrowings required to fund increased credit program receivables. 

Net Position 

OPIC’s Net Position represents the difference between assets and liabilities. Changes in OPIC net 

position results from changes that occur within the Cumulative Results of Operations and 

Unexpended Appropriations. Cumulative Results of Operations were $5.82 billion and $5.66 

billion as of September 30, 2018 and 2017, respectively. Unexpended Appropriations were $4 

million and $0 as of September 30, 2018 and 2017, respectively. OPIC’s Net Position as of 

September 30, 2018 represents 60% of Total Assets. 

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Statement of Net Cost 

As mentioned, OPIC’s Statement of Net Costs follows generally accepted accounting principles 

in the United States applicable to federal agencies. The statement of net cost typically captures 

the use of appropriated funds and measures the program costs to the taxpayer. OPIC has 

historically operated in a “negative net cost” to the taxpayer and routinely contributes to the overall 

reduction of the budget deficit. OPIC’s net excess revenue over cost for FY 2018 was $149 million. 

Subject to the appropriations process, some of the funds were used to cover administrative and 

program expenses. 

The main driver of the Statement of Net Cost is recognition of subsidy costs and the accrual of 

annual reestimates of subsidy expense/income. In FY 2018 OPIC incurred net negative subsidy 

costs of $150 million and a net upward subsidy reestimate of $75 million. 

Fees and interest collections flow through the Statement of Net Cost. However, they have no 

impact as these subsidy related fees are fully offset in the provision for credit losses in the Balance 

Sheet. 

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Net Insurance Program Costs: Insurance program activities in this statement represent premiums 

earned by the political risk insurance program as well as revenue from reserves invested in 

Treasury securities, net of administrative expenses. Net Insurance Program Costs were negative 

$114 million and negative $109 million as of September 30, 2018 and 2017 respectively. 

Statement of Budgetary Resources 

In accordance with Federal statutes and implementing regulations, OPIC may incur obligations 

and make payments to the extent it has budgetary resources to cover such items. The Statement of 

Budgetary Resources (SBR) presents the sources of OPIC’s budgetary resources, their status at the 

end of the year, and net outlays. Obligations represent direct loan commitments, related positive 

and negative subsidy commitments, contractual commitments and other reservations of funds. 

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Significant Factors Influencing Financial Results 

The long-term cost to the government for direct loans and loan guarantees, other than for general 

administration of the programs, is referred to as “subsidy cost.” Under the Federal Credit Reform 

Act, direct loan and loan guarantee subsidy costs are determined as the estimated net present value 

of the future projected cash flows in the year the loan is obligated. Subsidy costs are reestimated 

on an annual basis. OPIC’s financial results are dominated by these estimates of subsidy costs and 

year-to-year adjustments to the valuation of its portfolio. 

Subsidy Costs of New Disbursements 

To calculate subsidy costs for new loans or guarantees, estimates are developed of the expected 

cash outflows and inflows over the life of the direct loans obligated or loan guarantees committed. 

Historical information and various assumptions are used, including the probabilities of default, 

borrower prepayments, or recoveries, and the projected timing of these events, to make informed 

predictions about expected future cash flows. These expected cash flows are then discounted to 

the point of loan disbursement to determine the net present value. If the present value of estimated 

cash outflows exceeds cash inflows, there is a positive subsidy cost. If the present value of 

estimated cash inflows exceeds cash outflows, there is a negative subsidy. 

When loans are disbursed OPIC recognizes this subsidy cost (or negative subsidy) in the Statement 

of Net Costs. In FY 2018, OPIC recognized net subsidy costs of ($150) million. 

Reestimated Subsidy Costs 

The data used for subsidy cost estimates are updated—or reestimated—annually at the end of each 

fiscal year to reflect actual loan performance and to incorporate any changes in expectations about 

future loan performance. Reestimates that increase subsidy costs are referred to as upward 

reestimates, while reestimates that decrease subsidy costs are referred to as downward reestimates. 

The following are the primary drivers of OPIC’s annual reestimated subsidy costs. 

Reevaluation of Risk Ratings 

In fulfilling its mission to mobilize and facilitate the participation of United States private capital 

in the economic and social development of less developed countries and areas, OPIC must balance 

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the risks associated with assuming credit and other emerging market risks that the private sector is 

unable or unwilling to accept. Repayment risk is the risk that a borrower will not pay according to 

the original agreement and OPIC may eventually have to write-off some or all of the obligation. 

Repayment risk is primarily composed of: 

Credit Risk: The risk that a borrower may not have sufficient funds to service its debt or 

may not be willing to service its debt even if sufficient funds are available. 

Political Risk/Country Risk: The risk that payment may not be made to OPIC, its 

guaranteed lender, or its insured as a result of expropriation of the obligor's property, war, 

or inconvertibility of the borrower's currency into U.S. dollars. 

Each year, these factors are considered and ratings on all active loans are reevaluated and 

corresponding default and recovery assumptions are updated accordingly. 

Updates to Loan Level Discount Rates 

Actual project cash flows and the estimation of the timing of future inflows and outflows are 

discounted with respect to the time value of money using the Office of Management and Budget’s 

Credit Subsidy Calculator (CSC). The CSC is a tool that converts actual and future project cash 

flows to their net present value in order to determine the reestimated credit subsidy cost. The CSC 

produces the single effective rate, equivalent to the rate at which OPIC owes interest on debt held 

by the Treasury and earns interest on cash balances held at the Treasury. This single effective rate 

is a loan-specific discount rate first calculated at obligation. At the end of each fiscal year, revised 

rates are calculated for loans that became at least 90 percent disbursed in the current fiscal year, 

using actual loan activity, updated forecasts, and all available actual interest rates. While on a 

portfolio level, revised discount rates are calculated annually, each loan only receives a revised 

discount rate once in its lifetime. 

Updates to Interest Rates 

Each year, the Office of Management and Budget updates the President’s Economic Assumptions 

(PEA) and releases their associated PEA curves, one for Treasury and one for LIBOR rates 

according to those assumptions. These rates are used to project future interest for loans with 

floating interest rates. Updating these rates will only have an effect on loans with floating Treasury 

or floating LIBOR interest rates which need to be updated each year. 

Updates to Projected Cash Flows with Actual Data 

Loan level accounting transactions are captured from the General Ledger and used in the current 

year (FY 2018) of the cash flows. This replaces the FY 2018 projections developed from the FY 

2017 reestimates and thus captures all amortization changes including timing of disbursements; 

collection of principal, interest, fees, and recoveries; as well as write-off and the realization of 

defaults. 

Other Management Information 

Limitations of the Financial Statements 

The principal financial statements have been prepared to report the financial position and results 

of operations of OPIC, pursuant to the requirements of 31 USC 3515(b). While the statements have 

been prepared from the books and records of the entity in accordance with GAAP for Federal 

entities and the formats prescribed by OMB, the statements are in addition to the financial reports 

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used to monitor and control budgetary resources, which are prepared from the same books and 

records. 

The statements should be read with the realization that they are for a component of the U.S. 

government, a sovereign entity. 

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ANALYSIS OF SYSTEMS, CONTROLS, AND LEGAL COMPLIANCE 

STATEMENT OF ASSURANCE 

The OPIC President and CEO’s Annual Assurance Statement follows below. To support this 

statement and to meet the requirements of applicable law and OMB Guidance in Circular A-123, 

OPIC conducts assessments of its programs and systems. 

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INTERNAL CONTROLS 

During FY 2018, OPIC performed its internal control assessment over reporting using the riskbased testing approach that was adopted by OPIC’s Board of Directors Audit Committee. Under 

this approach, key business processes identified by management were tested using the guidelines 

in OMB’s Circular A-123, Management’s Responsibility for Enterprise Risk Management and 

Internal Control. Risk was assessed based on both quantitative as well as qualitative factors, 

including financial materiality, mission orientation, and the complexity and frequency of 

transactions. OPIC’s financial materiality threshold for testing was established using the criteria 

in the Government Accountability Office’s Financial Audit Manual (FAM). 

OPIC assessed approximately 55 key controls in the following 5 business processes: 

 Finance - Direct Loans and Loan Guarantees 

 Credit Reform 

 Budget 

 Purchases and Payables 

 Personal Service Contracts 

No material weaknesses were identified, and the results of this year’s assessment, combined with 

management’s role in daily internal controls, allows the agency to assert that there is reasonable 

assurance that overall, controls were properly designed and operating effectively during the year. 

However, the results of the assessment identified opportunities for improvement and greater 

efficiency in the areas of documentation of control occurrence and standard operating procedures. 

LEGAL COMPLIANCE 

Anti-Deficiency Act 

OPIC maintains compliance with the Anti-Deficiency Act (codified as amended in 31 U.S.C. §§ 

1341, 1342, 1351, 1517) through several tiers of process and system controls to maintain funds 

control. Apportionments are developed in consultation with OMB and designed to provide OPIC 

with funds consistent with OPIC’s authorities in appropriations and authorization legislation. 

OPIC’s financial management system records apportionments and establishes automated funds 

controls. All obligations are centralized in the financial management system, and through those 

processes, OPIC maintains control of its funding. 

Federal Credit Reform Act of 1990 

The Federal Credit Reform Act of 1990 (Public Law 101-508) establishes the accounting, 

budgeting, analysis, and display of loans and guarantees. Credit Reform is therefore central to the 

budgetary and financial operation of the Corporation and its operations with Treasury. 

The Corporation maintains several key processes and platforms in support of its Credit Reform 

implementation, and maintains data and modeling capabilities for each stage of its life cycle from 

budgetary formulation, to obligation, and throughout actual execution. In FY 2018, the 

Corporation continued enhancement of its reestimate process, while maintaining compliance with 

the Federal Credit Reform Act of 1990. 

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CliftonLarsonAllen LLP 

www.cliftonlarsonallen.com 

INDEPENDENT AUDITORS’ REPORT

Chief Executive Officer 

Overseas Private Investment Corporation 

Report on the Financial Statements 

We have audited the accompanying financial statements of the Overseas Private Investment 

Corporation (OPIC), which comprise the balance sheets as of September 30, 2018 and 2017, and

the related statements of net cost and changes in net position, the combined statements of

budgetary resources for the years then ended, and the related notes to the financial statements 

(financial statements).

Management’s Responsibility for the Financial Statements 

OPIC management is responsible for the preparation and fair presentation of these financial 

statements in accordance with accounting principles generally accepted in the United States of

America (U.S.); this includes the design, implementation, and maintenance of internal control 

relevant to the preparation and fair presentation of financial statements that are free from material

misstatement, whether due to fraud or error. 

Auditors’ Responsibility 

Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with auditing standards generally accepted in the U.S.; the 

standards applicable to financial audits contained in Government Auditing Standards, issued by 

the Comptroller General of the United States; and Office of Management and Budget (OMB) 

Bulletin No. 19-01, Audit Requirements for Federal Financial Statements (OMB Bulletin 19-01). 

Those standards and OMB Bulletin 19-01 require that we plan and perform the audit to obtain 

reasonable assurance about whether the financial statements are free from material

misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditors’

judgment, including the assessment of the risks of material misstatement of the financial 

statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the entity’s preparation and fair presentation of the financial

statements in order to design audit procedures that are appropriate in the circumstances, but not

for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness 

of accounting policies used and the reasonableness of significant accounting estimates made by

17
 

 

 

 

INDEPENDENT AUDITORS’ REPORT, CONTINUED 

management, as well as evaluating the overall presentation of the consolidated financial

statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion. 

Opinion on the Financial Statements 

In our opinion, the financial statements referred to above present fairly, in all material respects, 

the financial position of the Overseas Private Investment Corporation as of September 30, 2018 

and 2017, and its net costs, changes in net position, and budgetary resources for the years then

ended, in accordance with accounting principles generally accepted in the U.S. 

Required Supplementary Information 

Accounting principles generally accepted in the U.S. require that OPIC’s Management Discussion 

and Analysis (MD&A), and other Required Supplementary Information (RSI), be presented to

supplement the financial statements. Such information, although not a part of the financial 

statements, is required by Federal Accounting Standards Advisory Board, who considers it to be

an essential part of financial reporting for placing the financial statements in an appropriate

operational, economic, or historical context. We have applied certain limited procedures to this 

information in accordance with auditing standards generally accepted in the U.S., which consisted

of inquiries of management about the methods of preparing the information and comparing the

information for consistency with management's responses to our inquiries, the financial 

statements, and other knowledge we obtained during our audits of the financial statements. We 

do not express an opinion or provide any assurance on this information because the limited

procedures do not provide us with sufficient evidence to express an opinion or provide any 

assurance.

Other Information 

Our audit was conducted for the purpose of forming an opinion on the financial statements as a 

whole. The other information contained under the headings of “Report on Improper Payments” is 

presented for purposes of additional analysis and is not a required part of the financial statements.

This information has not been subjected to the auditing procedures applied in the audit of the 

financial statements, and accordingly, we do not express an opinion or provide any assurance on 

it. 

Report on Internal Control over Financial Reporting and on Compliance Based on an 

Audit of Financial Statements Performed in Accordance with Government Auditing 

Standards 

Internal Control over Financial Reporting 

In planning and performing our audit of the financial statements, we considered OPIC’s internal 

control over financial reporting (internal control) to determine the audit procedures that are 

appropriate in the circumstances for the purpose of expressing our opinion on the financial 

statements, but not for the purpose of expressing an opinion on the effectiveness of OPIC’s 

internal control or on management’s assertion on internal control included in the MD&A.

Accordingly, we do not express an opinion on the effectiveness of OPIC’s internal control or on

management’s assertion on internal control included in the MD&A.

18
 

 

 

 

 

INDEPENDENT AUDITORS’ REPORT, CONTINUED 

A deficiency in internal control exists when the design or operation of a control does not allow 

management or employees, in the normal course of performing their assigned functions, to 

prevent, or detect and correct, misstatements on a timely basis. A material weakness is a

deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable 

possibility that a material misstatement of the OPIC’s financial statements will not be prevented, 

or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a

combination of deficiencies, in internal control that is less severe than a material weakness, yet 

important enough to merit attention by those charged with governance. 

Our consideration of internal control was for the limited purpose described in the first paragraph

of this section and was not designed to identify all deficiencies in internal control that might be

material weaknesses or significant deficiencies. Given these limitations, during our audit we did 

not identify any deficiencies in internal control that we consider to be material weaknesses.

However, material weaknesses may exist that have not been identified. 

Compliance with Laws, Regulations, Contracts and Grant Agreements 

As part of obtaining reasonable assurance about whether OPIC’s financial statements are free

from material misstatement, we performed tests of its compliance with certain provisions of laws,

regulations, contracts, and grant agreements noncompliance with which could have a direct effect

on the determination of material financial statement amounts and disclosures. The results of our

tests disclosed no instances of noncompliance or other matters that are required to be reported 

in accordance with Government Auditing Standards or OMB Bulletin 19-01. 

Management’s Responsibility for Internal Control and Compliance 

Management is responsible for (1) evaluating the effectiveness of internal control over financial

reporting based on criteria established under the Federal Managers Financial Integrity Act 

(FMFIA), (2) providing a statement of assurance on the overall effectiveness on internal control 

over financial reporting, and (3) complying with other applicable laws, regulations, contracts, and

grant agreements. 

Auditors’ Responsibilities 

We are responsible for obtaining a sufficient understanding of internal control over financial 

reporting to plan the audit and testing compliance with certain provisions of laws, regulations,

contracts and grant agreements. 

We did not evaluate all internal controls relevant to operating objectives as broadly established 

by the FMFIA, such as those controls relevant to preparing statistical reports and ensuring

efficient operations. We limited our internal control testing to testing controls over financial

reporting. Because of inherent limitations in internal control, misstatements due to error or fraud,

losses, or noncompliance may nevertheless occur and not be detected. We also caution that

projecting our audit results to future periods is subject to risk that controls may become inadequate 

because of changes in conditions or that the degree of compliance with controls may deteriorate. 

In addition, we caution that our internal control testing may not be sufficient for other purposes.

We did not test compliance with all laws, regulations, contracts and grant agreements applicable

to OPIC. We limited our tests of compliance to certain provisions of laws, regulations, and 

contracts noncompliance with which could have a direct effect on the financial statements.

However, providing an opinion on compliance with those provisions was not an objective of our 

19
INDEPENDENT AUDITORS’ REPORT, CONTINUED 

audit, and accordingly, we do not express such an opinion. We caution that noncompliance may 

occur and not be detected by these tests and that such testing may not be sufficient for other

purposes. 

Purpose of the Report on Internal Control over Financial Reporting and on Compliance 

The purpose of the Report on Internal Control over Financial Reporting and on Compliance is 

solely to describe the scope of our testing of internal control and compliance and the result of that 

testing, and not to provide an opinion on the effectiveness of OPIC’s internal control or on

compliance. These reports are an integral part of an audit performed in accordance with 

Government Auditing Standards in considering OPIC’s internal control and compliance. 

Accordingly, these reports are not suitable for any other purpose. 

CliftonLarsonAllen LLP 

Arlington, Virginia

November 8, 2018

20
OVERSEAS PRIVATE INVESTMENT CORPORATION 

Financial Statements 

As of and for the Years Ended 

September 30, 2018 and 2017 

21
 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

BALANCE SHEET 

As of September 30, 2018 and 2017 

(in thousands) 2018 2017 

Assets 

Intragovernmental: 

Fund Balance with Treasury (Note 2) 

Investments (Note 3) 

Accounts Receivable, Net (Note 4) 

Total Intragovernmental 

$ 960,439 

5,828,307 

42 

6,788,788 

$ 579,543 

5,759,429 

75 

6,339,047 

With the Public: 

Accounts Receivable, Net (Note 4) 

Credit Program Receivable, Net (Note 5) 

Negative Loan Guarantee Liability (Note 5) 

Property and Equipment, Net (Note 6) 

Total Assets $ 

400 

2,688,903 

153,279 

497 

9,631,867 $ 

1,109 

2,484,543 

250,133 

1,247 

9,076,079 

Liabilities 

Intragovernmental: 

Borrowings from Treasury (Note 8) 

Downward Reestimate Payable to Treasury (Note 9) 

Other Liabilities (Note 12) 

Total Intragovernmental 

$ 3,475,086 

204,271 

570 

3,679,927 

$ 3,014,833 

270,295 

304 

3,285,432 

With the Public: 

Unearned Revenue (Note 10) 

Other Liabilities (Note 12) 

Total Liabilities 

121,532 

6,553 

3,808,012 

119,987 

6,814 

3,412,233 

Net Position 

Unexpended Appropriations 

Cumulative Results of Operations 

Total Net Position 

4,000 

5,819,855 

5,823,855 

-

5,663,846 

5,663,846 

Total Liabilities and Net Position $ 9,631,867 $ 9,076,079 

The accompanying notes are an integral part of these statements. 

22
 

 

 

 

 

 

 

 

 

 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

STATEMENT OF NET COST 

For the years ended September 30, 2018 and 2017 

(in thousands) 2018 2017 

Insurance Program 

Gross Costs 

Operating Costs 

Insurance Claim Recovery (Note 11) 

Total Gross Costs 

Less: Earned Revenue 

Net Insurance Program Costs 

$ 32,787 

(500) 

32,287 

(145,860) 

(113,573) 

$ 40,371 

(500) 

39,871 

(149,013) 

(109,142) 

Financing Program 

Gross Costs 

Operating Costs 

Subsidy Costs/(Reduction) 

Re-estimates 

Total Gross Costs 

Less: Earned Revenue 

Net Financing Program Costs 

144,457 

(150,025) 

74,573 

69,005 

(103,954) 

(34,949) 

124,489 

(239,043) 

118,415 

3,861 

(94,499) 

(90,638) 

Net Cost of Operations $ (148,522) $ (199,780) 

The accompanying notes are an integral part of these statements. 

23
 

 

 

 

 

 

 

 

 

 

 

 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

STATEMENT OF CHANGES IN NET POSITION 

For the years ended September 30, 2018 and 2017 

(in thousands) 2018 2017 

Unexpended Appropriations 

Beginning Unexpended Appropriations 

Appropriations Received 

Appropriations Transferred-In 

Appropriations Used 

Total Unexpended Appropriations 

$ -

376,573 

4,000 

(376,573) 

4,000 

$ 307 

282,604 

-

(282,911) 

-

Cumulative Results of Operations 

Beginning Balance 5,663,846 5,702,061 

Budgetary Financing Sources 

Appropriations Used 

Transfers In/Out Without Reimbursement 

Other Financing Sources (Non-exchange) 

Imputed Financing 

Offset to Non-entity Collections 

Total Financing Sources 

Net Cost of Operations 

Net Change 

Cumulative Results of Operations $ 

376,573 

-

2,147 

(371,233) 

7,487 

148,522 

156,009 

5,819,855 $ 

282,911 

1,000 

353 

(522,259) 

(237,995) 

199,780 

(38,215) 

5,663,846 

Net Position $ 5,823,855 $ 5,663,846 

The accompanying notes are an integral part of these statements. 

24
 

 

 

 

 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

COMBINED STATEMENT OF BUDGETARY RESOURCES 

For the years ended September 30, 2018 and 2017 

2018 2017 

(in thousands) Budgetary 

Non-Budgetary 

Credit Reform 

Financing 

Accounts 

Budgetary

 Non-Budgetary 

Credit Reform 

Financing Accounts 

Budgetary Resources

 Unobligated Balance from Prior Year Budget Authority, Net $ 5,798,203 $ 392,415 $ 5,741,353 $ 366,119 

Appropriations 376,573 - 282,604 -

Borrowing Authority - 724,489 - 945,989

 Spending Authority from Offsetting Collections 211,768 657,942 183,151 321,346 

Total Budgetary Resources $ 6,386,544 $ 1,774,846 $ 6,207,108 $ 1,633,454 

Status of Budgetary Resources 

New obligations and upward adjustments (total) (Note 14) $ 523,729 $ 1,093,209 $ 426,577 $ 1,188,339 

Unobligated Balance, End of Year

 Apportioned, unexpired accounts 66,773 - 31,818 325,708

 Unapportioned, unexpired accounts 5,745,737 681,637 5,704,342 119,407

 Unexpired unobligated balance, end of year $ 5,812,510 $ 681,637 $ 5,736,160 $ 445,115 

Expired unobligated balance, end of year 50,305 - 44,371 -

Unobligated Balance, end of year (total) 5,862,815 681,637 5,780,531 445,115 

Total Budgetary Resources $ 6,386,544 $ 1,774,846 $ 6,207,108 $ 1,633,454 

Outlays (Net)

 Outlays, net $ 309,335 $ 73,115 $ 222,863 $ 517,556 

Distributed Offsetting Receipts - (425,120) - (484,722) 

Agency Outlays, Net $ 309,335 $ (352,005) $ 222,863 $ 32,834 

The accompanying notes are an integral part of these statements. 

25
 

_____________________________________________________________________________________ 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

A. Reporting Entity 

Established in 1971, the Overseas Private Investment Corporation (OPIC) is a self-sustaining United States 

(U.S.) Government corporation created under the Foreign Assistance Act of 1961, as amended. OPIC 

facilitates U.S. private investment in developing countries and emerging market economies, primarily by 

providing direct loans, loan guarantees, and political risk insurance. On October 5, 2018 the President of 

the United States signed the BUILD Act (Public Law 115-254) establishing the United States International 

Development Finance Corporation (DFC) which will assume the assets and obligations of OPIC, as well as 

the responsibility for its programs. The creation of the DFC extends the authority for OPIC’s legacy 

programs through 2025. 

B. Basis of Accounting and Presentation 

The format of the financial statements and footnotes are presented in accordance with the form and content 

guidance provided in OMB Circular A-136, Financial Reporting Requirements. OPIC’s financial 

statements are presented on the accrual and budgetary basis of accounting in accordance with U.S. GAAP 

promulgated by the Financial Accounting Standards Advisory Board (FASAB). Under the accrual basis, 

revenues are recognized when earned, and expenses are recognized when a liability is incurred, without 

regard to receipt or payment of cash. Budgetary accounting recognizes the legal commitment or obligation 

of funds in advance of the proprietary accruals and facilitates compliance with legal constraints and controls 

over the use of federal funds. The accompanying Balance Sheet, Statement of Net Cost, and Statement of 

Changes in Net Position have been prepared on an accrual basis. The Statement of Budgetary Resources 

has been prepared in accordance with budgetary accounting rules. 

Significant intra-agency transactions and balances have been eliminated from the principal statements for 

presentation on a consolidated basis, except for the Statement of Budgetary Resources, which is presented 

on a combined basis in accordance with OMB Circular No. A-136, Financial Reporting Requirements. As 

such, intra-agency transactions have not been eliminated from the Statement of Budgetary Resources. 

Certain prior year amounts in the Balance Sheet, Statement of Changes in Net Position, Statement of 

Budgetary Resources, and footnotes have been reclassified to conform to the current year presentation. 

C. Use of Estimates 

The preparation of financial statements requires management to make estimates and assumptions that affect 

the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date 

the financial statements, and the reported amounts of revenue and expenses during the reporting period. 

OPIC management makes assumptions and uses estimates to prepare the financial statements based upon 

the facts that exist when the statements are prepared. Actual results may differ from those estimates. 

The largest estimates are a result of the Federal Credit Reform Act of 1990 (FCRA) requirements. FCRA 

underlies the proprietary and budgetary accounting treatment of direct loans and loan guarantees. The longterm cost to the government for direct loans and loan guarantees, other than for general administration of 

the programs, is referred to as “subsidy cost.” Under FCRA, direct loan and loan guarantee subsidy costs 

are determined as the estimated net present value of the future projected cash flows and obligated at the 

time the loan is approved. Future projected cash flows are developed from assumptions that include, but 

are not limited to, collections, repayments, default rates, and prevailing interest rates. OPIC recognizes the 

sensitivity of its projections to certain assumptions and therefore continually reviews the structure and 

functionality of its credit reform models to reflect the most accurate information at the date of the financial 

statements. Subsidy costs are reestimated on an annual basis. 

26
 

_____________________________________________________________________________________ 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

Other estimates made by management are reflected in the liability for insurance programs. The loss 

experience of OPIC’s Political Risk Insurance Program is characterized by high impact low frequency 

events. Due to the high number of variables that influence projection of the ultimate payments to cover 

insurance liabilities, actual incurred losses and loss adjustment expenses may not conform to the 

assumptions inherent in the estimation of the liability. 

D. Fund Balance with Treasury 

Fund balance with Treasury (FBWT) is the aggregate amount of funds in OPIC’s accounts with Treasury. 

Treasury processes cash receipts and disbursements on OPIC’s behalf to pay liabilities and finance 

authorized purchases, and OPIC’s accounting records are reconciled with those of Treasury on a regular 

basis. OPIC’s fund balance with Treasury includes all of its general, revolving, and deposit funds. 

E. Investments 

Investments are in U.S. Treasury securities and are carried at face value, net of unamortized discount or 

premium, and are held to maturity. OPIC has the ability and intent to hold its investments until maturity or 

until the carrying cost can be otherwise recovered. 

F. Property and Equipment, Net 

OPIC’s property and equipment consists of general-purpose equipment used by the agency, leasehold 

improvements made to office spaces leased by OPIC, assets acquired under capital lease, internal use 

software, and when applicable, internal-use software development costs for projects in development. OPIC 

capitalizes property and equipment at historical cost for acquisitions that have an estimated useful life of 

two years or more. OPIC has a capitalization threshold of $50,000 for equipment, furniture, vehicles 

and leasehold improvement, and $250,000 for internal use software. OPIC expenses property and 

equipment acquisition that do not meet the capitalization criteria when purchased, as well as normal 

repairs and maintenance. The cost of property and equipment acquired under a capital lease is the 

amount recognized as a liability for the capital lease at its inception. Depreciation and amortization of 

property and equipment are computed using the straight-line method over the estimated useful life of 

the asset or lease term, whichever is shorter, with periods ranging from 5 to 15 years. 

G. Federal Employee Benefits 

Leave 

Employee annual leave is accrued as it is earned and reduced as leave is taken. Each year the balance of 

accrued annual leave is adjusted to reflect current pay rates as well as forfeited “use or lose” leave. Amounts 

are reported as unfunded to the extent current or prior year appropriations are not available to fund annual 

leave earned but not taken. Sick leave and other types of non-vested leave are expensed as taken. 

Employee Health and Life Insurance Benefits 

OPIC employees may choose to participate in the contributory Federal Employees Health Benefit and the 

Federal Employees Group Life Insurance programs. OPIC matches a portion of the employee contributions 

to each program. Such matching contributions are recognized as current operating expenses. 

Employee Pension Benefits 

OPIC employees participate in either the Civil Service Retirement System or the Federal Employees 

Retirement System (FERS) and Social Security. These systems provide benefits upon retirement and in the 

event of death, disability or other termination of employment and may also provide pre-retirement benefits. 

They may also include benefits to survivors and their dependents, and they may contain early retirement or 

27
_____________________________________________________________________________________ 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

other special features. OPIC’s contributions to both retirement plans, as well as to the government-wide 

Federal Insurance Contribution Act, administered by the Social Security Administration, are recognized as 

current operating expenses. Federal employee benefits also include the Thrift Savings Plan. For FERS 

employees, OPIC matches employee contributions to the plan, subject to limitations. The matching 

contributions are recognized as current operating expenses. 

Imputed Financing Costs 

OPIC recognizes the full cost of providing all employee benefits and future retirement benefits, including 

life and health insurance, at the time employee services are rendered. Eligible retired OPIC employees can 

continue to participate in health and life insurance plans. The cost of these benefits is funded through 

Agency contributions, employee compensation to the extent withheld from employee and retiree pay, from 

matching of employee withholding for Thrift Savings Plan and Federal Insurance Contributions Act 

(FICA), and by the Office of Personnel Management (OPM) which administers the retirement programs 

for OPIC employees. The OPM calculates imputed costs as the actuarial present value of future benefits 

attributed to services rendered by covered employees and eligible retired OPIC employees during the 

accounting period, net of the amounts contributed by employees, retirees and the Agency. OPIC recognizes 

these imputed costs in the statement of net cost and imputed financing in the statement of changes in net 

position. 

Federal Employees’ Compensation Act 

The Federal Employees’ Compensation Act provides income and medical cost protection to covered federal 

civilian employees injured on the job and to beneficiaries of employees whose deaths are attributable to 

job-related injury or disease. The FECA program is administered by the Department of Labor. The 

Department of Labor pays valid claims as they occur, which are billed to OPIC annually and funded and 

paid approximately 15 months later. The Department of Labor also calculates an estimated actuarial liability 

for future benefits based upon historical experience and other economic variables. 

H. Insurance Program 

The Insurance Program liability represents claims incurred but not reported, resulting from insured events 

that have occurred as of the reporting date and from claims submitted but not yet paid. The amount 

recognized in the balance sheet is a liability known with certainty; plus, an accrual for a contingent liability 

to be recognized when an existing condition, situation, or set of circumstances involving uncertainty is 

resolved. Possible losses are determined when one or more future events occur or fail to occur; a future 

outflow or other sacrifice of resources becomes probable, and the future outflow or sacrifice of resources 

is measurable. 

I. Commitments and Contingencies 

OPIC is currently involved in certain legal claims and has received notifications of potential claims in the 

normal course of business. There are substantial factual and legal issues that might bar any recovery in 

these matters. It is not possible to evaluate the likelihood of any unfavorable outcome, nor is it possible to 

estimate the amount of compensation, if any, that may be determined to be owed in the context of a 

settlement. Management believes that the resolution of these claims will not have a material adverse impact 

on OPIC. 

28
 

 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 2: FUND BALANCE WITH TREASURY 

Treasury processes cash receipts and disbursements on OPIC’s behalf to pay liabilities and finance 

authorized purchases. The fund balance with Treasury includes general, revolving, and deposit funds in 

OPIC’s accounts. The general fund is used for subsidy and reestimates, revolving funds are used for 

operating expenses and OPIC’s finance and insurance programs, and deposit funds are for taxes withheld 

on payments to contractors. OPIC’s fund balance with Treasury accounts are reconciled with those of 

Treasury on a regular basis. At September 30, 2018 and September 30, 2017, there were no unreconciled 

differences between Treasury records and balances reported on OPIC’s general ledger. The fund balance 

with Treasury as of September 30, 2018 and 2017 consists of the following: 

(in thousands) 2018 2017 

Status of Fund Balance with Treasury: 

Unobligated Balance 

Available $ 803,982 $ 416,487

 Unavailable 53,223 47,288

 Obligated Balance not yet Disbursed 103,227 115,766

 Non-budgetary Fund Balance with Treasury 7 2 

Total $ 960,439 $ 579,543 

OPIC’s fund balance with Treasury is classified as unobligated balance available, unobligated balance 

unavailable, obligated balance not yet disbursed, and non-budgetary FBWT. Unobligated available 

balances represent amounts that are apportioned for obligation in the current fiscal year and unexpired 

appropriations available for incurring new obligations. Unobligated unavailable balances represent amounts 

that are in expired appropriations and not available for incurring new obligations. Obligated balances not 

yet disbursed include undelivered orders or delivered orders received but not yet paid. Non-budgetary 

Fund Balance with Treasury includes deposit accounts that do not have budget authority. 

29
 

 

 

 

 

 

 

 

 

 

_

_

_____________________________________________________________________________________ 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 3: INVESTMENTS 

By statute, OPIC is authorized to invest funds derived from fees and other revenues related to its insurance 

programs in U.S. Treasury Marketable Securities. Investments are carried at face value, net of unamortized 

discount or premium, and are held to maturity. Premiums or discounts are amortized using the effective 

yield method. Interest income is compounded semi-annually by Treasury and adjusted to include an accrual 

for interest earned to September 30. OPIC has the ability and intent to hold its investments until maturity 

or until the carrying cost can be otherwise recovered. The composition of investments and amortized cost 

at September 30, 2018 and 2017 is as follows: 

2018 

Amortized 

(in thousands) (Premium)/ Interest Investments, Market

Cost Discount Receivable Net Value 

U.S. Treasury 

 Marketable Securities: 

Notes $ 5,380,787 $ 9,900 $ 28,199 $ 5,418,886 $ 5,236,823

 Bonds 421,137 (15,316) 3,600 409,421 449,217 

Total U.S. Treasury

 Marketable Securities $ 5,801,924 $ (5,416) $ 31,799 $ 5,828,307 $ 5,686,040 

2017 

Amortized 

(in thousands) (Premium)/ Interest Investments, Market

Cost Discount Receivable Net Value 

U.S. Treasury 

 Marketable Securities: 

Notes $5,259,757 $ 11,171 $ 27,569 $ 5,298,497 $ 5,278,646

 Bonds 483,051 (27,359) 5,240 460,932 533,203 

Total U.S. Treasury

 Marketable Securities $ 5,742,808 $ (16,188) $ 32,809 $ 5,759,429 $ 5,811,849 

30
 

 

 

 

_ _

_____________________________________________________________________________________ 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 4: ACCOUNTS RECEIVABLE, NET 

Accounts receivable are amounts due to OPIC from the public and other Federal agencies. Receivables 

from the public result from maintenance fees from loans and loan guarantees, and assets acquired in 

insurance claims settlements. Amounts due from Federal agencies result from reimbursable agreements 

entered into by OPIC with other agencies to provide various services. Accounts receivable are reduced to 

net realizable value by an allowance for uncollectible amounts. Allowances are based on management’s 

periodic evaluations of the underlying assets. In its evaluation, management considers numerous factors, 

including, but not limited to, general economic conditions, asset composition, and prior loss experience. 

The primary components of OPIC’s accounts receivable as of September 30, 2018 and 2017 are as follows: 

(in thousands) 

Intragovernmental: 

Accounts Receivable 

2018 

$ 42 

2017 

$ 75 

With the Public: 

Accounts Receivable 

 Insurance Settlement 

 Allowance for Uncollectible Amounts 

Accounts Receivable, Net $ 

1,839 

162

(1,601)

 442 $ 

1,726

 4,560

 (5,177) 

1,184 

31
 

 

_____________________________________________________________________________________ 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 5: DIRECT LOANS AND LOAN GUARANTEES, NON-FEDERAL BORROWERS 

Direct Loan and Loan Guarantee Programs 

The Federal Credit Reform Act of 1990 (FCRA) governs direct loans made after fiscal year 1991. FCRA 

loans are valued at the present value of expected future cash flows, discounted at the interest rate of U.S. 

Treasury Marketable Securities. The subsidy allowance represents the difference between the outstanding 

loans receivable balance and the net present value of the estimated cash flows of the loans over their 

remaining term. The subsidy allowance is subtracted from the outstanding loans receivable balance to 

obtain the net loans receivable balance. FCRA also governs loan guarantees made after fiscal year 1991. 

The liability is determined by calculating the net present value of expected future cash flows for outstanding 

guarantees in a manner similar to that used to determine the subsidy allowance for direct loans. Loan 

guarantee liability can be positive or negative and if negative is reported as an asset on the Balance Sheet. 

Guaranteed loans acquired by OPIC upon borrower default are established as loans receivable and are 

valued in a similar manner as direct loans under FCRA. 

Budgetary Accounting for Loan Programs 

OPIC’s loan disbursements are financed by Agency self-funded appropriation authority for long-term loan 

subsidy cost and borrowings from Treasury for the remaining non-subsidized portion of the loans. The 

Congress may authorize one year, multi-year or no year appropriation authority to cover the estimated longterm costs of the loan programs. The non-subsidized portion of each loan disbursement, financed initially 

under permanent indefinite authority to borrow funds from Treasury, is repaid from collections of loan fees, 

repayments and default recoveries. Permanent indefinite authority is available to fund any reestimate 

increase of subsidy costs that occurs after the year in which a loan is disbursed. Reestimate reductions of 

subsidy costs are returned to Treasury and are unavailable to OPIC. As required by the Federal Credit 

Reform Act of 1990, OPIC uses budgetary “program accounts” to account for appropriation authority in its 

credit programs and non-budgetary “financing accounts” to account for credit program cash flow. Estimates 

and reestimates of credit program subsidy expenses are recorded in OPIC’s program accounts. 

Non-budgetary Credit Reform Financing Accounts 

Actual cash flows for direct loan and loan guarantee programs are recorded in separate Credit Reform 

Financing Accounts within Treasury. These accounts borrow funds from Treasury, make direct loan 

disbursements, pay claims on guaranteed loans, collect principal, interest, and fees from borrowers, earn 

interest from Treasury on any uninvested funds, pay interest expense on outstanding borrowings and 

transfer negative subsidy to Treasury’s general fund receipt account. New subsidy funded from OPIC’s 

non-credit spending authority and appropriated upward subsidy reestimates are received in program 

accounts and transferred to non-budgetary credit reform financing accounts. The budgetary resources and 

activities for these accounts are presented separately in the Statement of Budgetary Resources and the 

Budget of the United States and are excluded from the determination of the budget deficit or surplus. OPIC 

also has the authority to collect and retain fees in the non-budgetary credit reform financing accounts 

designated for oversight and due diligence of the portfolio management. 

32
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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

Subsidy Funding under Federal Credit Reform 

FCRA requires that the credit subsidy costs of direct loans and loan guarantees be expensed in the year 

loans are disbursed. The credit subsidy cost is the net present value of expected cash inflows and outflows 

over the life of a guaranteed loan, or the difference between the net present value of expected cash flows 

and the face value of a direct loan. The cost expressed as a percentage of loans disbursed is termed the 

subsidy rate. OPIC receives annual authority from Congress to self-fund its credit program subsidy. OPIC 

records subsidy expenses when loans are disbursed. In accordance with FCRA, subsidy costs are 

reestimated annually. 

Interest Receivable 

Interest receivable is comprised of accrued interest on loans receivable (direct loans and defaulted loan 

guarantees). Initial unpaid interest on defaulted loan guarantees that OPIC acquires with the loan, is treated 

as part of the principal of the loan receivable. Interest income is accrued at the contractual rate on the 

outstanding principal. Purchased interest is carried at cost. 

Valuation Methodology for Direct Loans and Loan Guarantees 

The value of direct loans and loan guarantees is based on the net present value of their expected future cash 

flows. OPIC estimates future cash flows for direct loans and loan guarantees using economic and financial 

credit subsidy models. OPIC’s models vary in the specific methodologies employed to forecast future 

program cash flows. In general, however, models for all major credit programs use historical data as the 

basis for assumptions about future program performance and then translate these assumptions into nominal 

cash flow estimates by applying rules about program structure. Nominal cash flow forecasts are discounted 

using the Office of Management and Budget’s Credit Subsidy Calculator that has both forecasted and actual 

Treasury interest rates. 

Historical data is used as the basis for program performance assumptions. The historical data undergoes 

quality review and analysis prior to its use in developing model assumptions. Key input to the subsidy 

models varies by program and includes items such as: 

 Contractual terms of the loan or guarantee such as loan amount, interest rate, maturity and grace 

period 

 Borrower characteristics 

 Loan performance assumptions, such as default and recovery rates 

 Loan fee rates 

OPIC’s rating methodology for its Federal Credit Reform reestimates is based on industry best practices 

and the expert judgment of a core panel of officers from origination, monitoring, credit policy and risk 

management who worked in conjunction with Moody’s Analytics. The methodology rates the portfolio 

risk with a consistent and standardized approach. 

The primary drivers of the yearly reestimated subsidy costs include: 

 Reevaluation of repayment risks such as credit risk and political risk 

 Updates to loan level discount rates for loans that are at least 90 percent disbursed in the current fiscal 

year 

 Updates to projected cash flows with actual cash flows for the current fiscal year 

 Updates to interest rates for loans with floating interest rates. 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

A. Direct Loans, Net 

2018 

(in thousands) 

Loans 

Receivable, 

Gross 

Fees & 

Interest 

Receivable 

Allowance 

for 

Subsidy 

Cost 

 Value of 

Assets 

Related to 

Direct Loans, 

Net 

Direct Loans $ 2,630,867 $ 69,853 $ (171,870) $ 2,528,850 

2017 

 Value of 

Allowance Assets 

Loans Fees & for Related to 

(in thousands) Receivable, 

Gross 

Interest 

Receivable 

Subsidy 

Cost 

Direct Loans, 

Net 

Direct Loans $ 2,430,096 $ 65,801 $ (163,636) $ 2,332,261 

B. Total Amount of Direct Loans Disbursed 

(in thousands) 2018 2017 

Direct Loan Disbursements $ 392,383 $ 759,067 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

C. Schedule for Reconciling Direct Loan Subsidy Cost Allowance 

(in thousands) 

Beginning balance of the subsidy cost allowance 

Add: subsidy expense for direct loans 

 disbursed during the year by component: 

Interest rate differential costs 

Default costs (net of recoveries)

Fees and other collections 

Other subsidy costs 

Total of the above subsidy expense components 

Adjustments: 

Fees accrued

Loans written off 

Subsidy allowance amortization 

Other 

Total adjustments 

Total subsidy cost allowance before reestimates 

Add or subtract subsidy reestimates by component: 

Interest rate reestimate

Technical/default reestimate 

Total reestimates 

Ending balance of the subsidy cost allowance 

$ 

2018 

(163,636) $ 

2017 

(206,016) 

91 

(40,987) 

87,255 

(4,136) 

42,223 

1,171 

(84,510) 

159,227 

(2,883) 

73,005 

(4,721) 

12,250 

 (75,690)

 (107)

 (68,268)

(189,681) 

(5,355) 

6,783 

(67,467) 

(57) 

(66,096) 

(199,107) 

$ 

5,985

11,826 

17,811 

(171,870) $ 

(57) 

35,528 

35,471 

(163,636) 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

D. Defaulted Loan Guarantees 

2018 

(in thousands) 

Loan Guarantees 

Defaulted Loan 

Guarantees 

Receivable, Gross 

$ 325,815 

Interest 

Receivable 

$ 6,675 

Allowance 

for 

Subsidy 

Cost 

$ (219,658) 

Value of Assets 

Related to 

Defaulted Loan 

Guarantees 

Receivable, Net

$ 112,832 

(in thousands) 

Loan Guarantees 

Defaulted Loan 

Guarantees 

Receivable, Gross 

$ 227,151 

Interest 

Receivable 

$ 3,340 

2017 

Allowance 

for 

Subsidy 

Cost 

$ (125,590) 

Value of Assets 

Related to 

Defaulted Loan 

Guarantees 

Receivable, Net

$ 104,901 

E. Outstanding Principal of Loan Guarantees 

(in thousands) 

Loan Guarantees 

2018 

$ 8,424,215 

2017 

$ 8,231,215 

F. New Loan Guarantees Disbursed 

(in thousands) 

Loan Guarantees 

2018 

$ 1,115,395 

2017 

$ 1,534,361 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

G. Schedule for Reconciling the Negative Loan Guarantee Liability 

(in thousands) 2018 2017 

Beginning balance of the negative loan guarantee liability 

Add: subsidy income/(expense) for guaranteed loans 

 disbursed during the year by component: 

Default costs (net of recoveries) 

Fees and other collections 

Other subsidy costs 

Total of the above subsidy income/(expense) components 107,802 162,594 

Adjustments: 

Fees accrued (200,278) (197,664) 

Actual claims paid 122,080 120,841 

Loans acquired (26,520) (59,203) 

Subsidy allowance amortization 4,583 7,011 

$ 250,133 $ 370,442 

(74,604) (99,909) 

196,437 275,608 

(14,031) (13,105) 

Total adjustments (100,135) (129,015) 

Ending balance of the negative loan guarantee liability before 

reestimates 257,800 404,021 

Add or subtract subsidy reestimates by component: 

Interest rate reestimate (22,660) (15,975) 

Technical/default reestimate (81,861) (137,913) 

Total of the above reestimate components (104,521) (153,888) 

Ending balance of the negative loan guarantee liability $ 153,279 $ 250,133 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

H. Subsidy Rates by Program and Component 

2018 

Fees & 

Other 

Interest Defaults Collections Other Total 

Direct Loans - 7.95% (18.82)% - (10.87)% 

Loan Guarantees: 

Finance Guarantees - 5.68% (16.61)% - (10.93)% 

Investment Funds - 11.85% (17.32)% - (5.47)% 

Limited Arbitral Award Coverage - 3.82% (5.99)% - (2.17)% 

Non-Honoring of Sovereign - 2.54% (8.45)% - (5.91)% Guarantees 

The subsidy rates presented above are consistent with the estimated subsidy rates published in the 

Federal Credit Supplement to the Budget of the U.S. Government except for differences due to rounding. 

The published budget formulation subsidy rates are notional, for illustrative purposes only, as OPIC 

estimates subsidy on a loan-by-loan basis at the time of obligation. These rates cannot be applied to the 

direct loans and loan guarantees disbursed during the current reporting year to yield the subsidy expense. 

The subsidy expense for new loans reported in the current year could result from the disbursements of 

loans obligated in the current and prior fiscal years. Subsidy expense reported in the current year also 

includes the cost of subsidy reestimates. 

I. Administrative Expenses 

OPIC incurs administrative expenses to carry out its credit reform programs. This amount is determined 

by annual appropriation legislation and self-funded by OPIC’s budget authority. 

(in thousands) 2018 2017 

Direct Loan and Loan Guarantee Administrative Expense $ 47,520 $ 42,000 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 6: PROPERTY AND EQUIPMENT, NET 

The components of property and equipment as of September 30, 2018 and 2017 are as follows: 

2018 

(in thousands) Cost 

Accumulated 

Depreciation 

Net Book 

Value 

With the Public: 

Property and Equipment 

 Equipment $ 3,296 $ (2,821) $ 475 

 Leasehold Improvements 11,375 (11,370) 5 

Internal-Use Software 9,584 (9,567) 17 

Total Property and Equipment, Net $ 24,255 $ (23,758) $ 497 

2017 

(in thousands) Cost 

Accumulated 

Depreciation 

Net Book 

Value 

With the Public: 

Property and Equipment 

 Equipment $ 3,145 $ (2,465) $ 680 

 Leasehold Improvements 11,374 (10,852) 522 

Internal-Use Software 9,584 (9,539) 45 

Total Property and Equipment, Net $ 24,103 $ (22,856) $ 1,247 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 7: LIABILITIES COVERED AND NOT COVERED BY BUDGETARY RESOURCES 

Liabilities of Federal agencies are classified as liabilities covered or not covered by budgetary resources. 

OPIC’s liabilities not covered by budgetary resources primarily consist of accrued unfunded annual leave. 

OPIC’s liabilities not requiring budgetary resources consists of primarily of rent incentives. As of 

September 30, 2018 and 2017, liabilities not covered by budgetary resources were as follows: 

(in thousands) 2018 2017 

Intragovernmental Liabilities Not Covered 

 By Budgetary Resources 

 Unfunded FECA Liability $ 101 $ 74 

Total Intragovernmental Liabilities Not 101 74

 Covered By Budgetary Resources 

Liabilities with the Public Not Covered By Budgetary 

Resources

 Unfunded Annual Leave 2,912 2,884

 Actuarial FECA Liability 48 48 

Total Liabilities with the Public 2,960 2,932

 Not Covered By Budgetary Resources 

Total Liabilities Not Covered by Budgetary Resources 3,061 3,006 

Total Liabilities Covered by Budgetary Resources 3,791,373 3,402,249 

Total Liabilities Not Requiring Budgetary Resources 13,578 6,978 

Total Liabilities $ 3,808,012 $ 3,412,233 

Liabilities covered by budgetary resources consist of liabilities incurred which are covered by realized 

budgetary resources as of the Balance Sheet date. Budgetary resources encompass not only new budget 

authority but also other resources available to cover liabilities for specified purposes in a given year. 

Available budgetary resources include: (1) new budget authority; (2) unobligated balances of budgetary 

resources at the beginning of the year or net transfers of prior year balances during the year; (3) spending 

authority from offsetting collections (credited to an appropriation or fund account); and (4) recoveries of 

unexpired budget authority through downward adjustments of prior year obligations. Liabilities are 

considered covered by budgetary resources if they are to be funded by permanent indefinite appropriations, 

which have been enacted and signed into law and are available for use as of the Balance Sheet date, provided 

that the resources may be apportioned by OMB without further action by the Congress and without a 

contingency having to be met first. 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 8: BORROWINGS FROM TREASURY 

OPIC’s debt comes from direct borrowings from the U.S. Treasury to fund the portion of direct loans not 

covered by subsidy appropriations, disbursements of downward subsidy reestimates and pay claims in 

excess of the amount of subsidy and collections maintained in the non-budgetary financing funds. OPIC’s 

debt as of September 30, 2018 and 2017 consisted of the following: 

(in thousands) 2018 2017 

Debt to the Treasury

 Beginning Balance $ 3,014,833 $ 2,490,911

 Net Borrowings 460,253 523,922 

 Ending Balance $ 3,475,086 $ 3,014,833 

NOTE 9: DOWNWARD REESTIMATE PAYABLE TO TREASURY 

Federal credit programs are required to transfer to Treasury excess funding. OPIC cannot transfer these 

funds until they receive authority from OMB which will occur in the succeeding fiscal year. The balance 

of the downward reestimate for OPIC’s finance programs as of September 30, 2018 and 2017 was $204,271 

and $270,295, respectively. 

NOTE 10: UNEARNED REVENUE 

Unearned revenue consists of the following: 

(in thousands) 2018 2017 

Finance Retainer Fees and Deferred Facility Fees $ 90,788 $ 95,275 

Insurance Retainer Fees and Unearned Insurance Premiums 17,166 17,793 

Rent Incentives 13,578 6,919 

Total Unearned Revenue: $ 121,532 $ 119,987 

OPIC may charge a retainer and other working capital fees in conjunction with each project. Working 

capital fees are maintained in non-budgetary financing funds. Facility fees collected in excess of $5,000 

are amortized over the life of the project. Insurance premiums received are amortized over the 

coverage period. 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 11: INSURANCE LIABILITIES AND CLAIM RECOVERIES 

OPIC provides Political Risk Insurance for overseas investments of up to 20 years against three different 

risks: inconvertibility of currency, expropriation, and political violence. Insurance coverage against 

inconvertibility protects the investor from increased restrictions on the investor’s ability to convert local 

currency into U.S. dollars. Inconvertibility insurance does not protect against devaluation of a country’s 

currency. Expropriation coverage provides compensation for losses due to confiscation, nationalization, or 

other governmental actions that deprive investors of their fundamental rights in the investment. Insurance 

against political violence insures investors against losses caused by politically motivated acts of violence 

(war, revolution, insurrection, or civil strife, including terrorism and sabotage). 

Under most OPIC insurance contracts, investors may obtain all three coverages, but claim payments may 

not exceed the single highest coverage amount. Claim payments are limited by the value of the investment 

and the amount of current coverage in force at the time of the loss and may be reduced by the insured’s 

recoveries from other sources. In certain instances, OPIC’s requirement to pay up to the single highest 

coverage amount may be reduced by stop-loss and risk-sharing agreements. Finally, losses on insurance 

claims may be reduced by recoveries by OPIC as subrogee of the insured’s claim against the host 

government. Payments made under insurance contracts that result in recoverable assets are included in 

Accounts Receivable net of an allowance for uncollectible amounts. 

In addition to requiring formal applications for claimed compensation, OPIC’s contracts generally require 

investors to notify OPIC promptly of host government action that the investor has reason to believe is or 

may become a claim. Compliance with this notice provision sometimes results in the filing of notices of 

events that do not mature into claims. As of September 30, 2018, and 2017, insurance claims where the 

likelihood of loss is reasonably possible are estimated to be $12.4 million, and zero, respectively. 

Recoveries on insurance claims in the amount of $500 thousand were received by OPIC as of September 

30, 2018 and 2017. 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 12: OTHER LIABILITIES 

OPIC’s total other liabilities as of September 30, 2018, is as follows: 

2018 

Non-Current Current Total 

(in thousands) Liabilities Liabilities Liabilities 

Intragovernmental:

 Employer Contributions & Payroll Taxes Payable $ - $ 469 $ 469 

 Unfunded FECA Liability 86 15 101 

Total Intragovernmental 86 484 570 

With the Public:

 Accounts Payable - 1,207 1,207 

 Accrued Funded Payroll & Benefits - 2,287 2,287 

 Accrued Unfunded Annual Leave - 2,912 2,912 

 Liability for Deposit Funds - 99 99

 Actuarial FECA Liability 48 - 48 

Total Liabilities With the Public 48 6,505 6,553 

Total Other Liabilities $ 134 $ 6,989 $ 7,123 

OPIC’s total other liabilities as of September 30, 2017, is as follows: 

2017 

Non-Current Current Total 

(in thousands) Liabilities Liabilities Liabilities 

Intragovernmental:

 Employer Contributions & Payroll Taxes Payable $ - $ 230 $ 230 

 Unfunded FECA Liability 21 53 74 

Total Intragovernmental 21 283 304 

With the Public:

 Accounts Payable - 1,590 1,590 

 Accrued Funded Payroll & Benefits - 2,202 2,202 

 Accrued Unfunded Annual Leave - 2,884 2,884 

 Liability for Deposit Funds - 90 90

 Actuarial FECA Liability 48 - 48 

Total Liabilities With the Public 48 6,766 6,814 

Total Other Liabilities $ 69 $ 7,049 $ 7,118 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 13: LEASES 

Operating Leases 

OPIC leases commercial facilities under a multi-year operating lease agreement, as amended, which expires 

in May 2029. Under the terms of the lease, OPIC receives a tenant improvement allowance for space 

refurbishment as well as other incentives. The value of these incentives are deferred in the balance sheet 

and are amortized to recognize rent expense on a straight-line basis over the life of the lease. Rental expense 

was approximately $6.5 million for fiscal years 2018 and 2017. Future rental payments are as follows: 

(in thousands) Non-federal 

Fiscal Year Lease Payments 

2019 $ 6,855 

2020 7,027 

2021 7,202 

2022 7,382 

2023 7,565 

After 2023 45,829 

Total Future Lease Payments $ 81,860 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 14: BUDGETARY RESOURCES 

Permanent Indefinite Appropriations 

The Federal Credit Reform Act of 1990 authorizes permanent, indefinite appropriations from Treasury, as 

appropriate, to carry out all obligations resulting from the financing program. Permanent indefinite 

authority is available to fund any reestimated increase of subsidy costs that occurs after the year in which a 

loan is disbursed. Reestimated reductions of subsidy costs are returned to Treasury and are unavailable to 

OPIC. 

Section 235(c) of the Foreign Assistance Act of 1961 (FAA) established a fund which shall be available for 

discharge of liabilities under insurance or reinsurance or under similar predecessor authority. All valid 

claims arising from insurance issued by OPIC constitute obligations on which the full faith and credit of 

the United States of America is pledged for full payment. Should funds in OPIC’s reserves not be sufficient 

to discharge obligations arising under insurance, and if OPIC exceeds its $100 million borrowing authority 

authorized by statute for its insurance program, funds would have to be appropriated to fulfill the pledge of 

full faith and credit to which such obligations are entitled. Standing authority for such appropriations is 

contained in Section 235(f) of the FAA. 

Borrowing Authority 

OPIC is required to borrow from the U.S. Treasury’s Bureau of the Fiscal Service to fund the unsubsidized 

portion of direct loan disbursements, and is authorized to borrow when funds are needed to disburse 

negative subsidy and pay claims in excess of the amount of subsidy and collections maintained in the 

financing funds. At the end of fiscal year 2018 and 2017, OPIC had $2,370 million and $2,959 million, 

respectively, in borrowing authority carried over to fund direct loans and pay future claims. 

Apportionment Categories of New Obligations and Upward Adjustments 

OPIC funds are apportioned in category A and B. Category A apportionments are restricted by time; 

category B apportionments are restricted by project. OPIC’s new obligations and upward adjustments can 

be either reimbursable or direct. Reimbursable obligations are financed by offsetting collections received 

in return for goods and services provided, while direct obligations are not financed from reimbursements. 

OPIC’s new obligations and upward adjustments by apportionment type and category, as of September 30, 

2018 and 2017 consisted of the following: 

Consolidated New Obligations and Upward Adjustments through September 30 

 2018 2017 

(in thousands) 

Direct 

Reimbursable 

Total 

Obligations

Category A Category B Total Category A Category B Total 

$ 116,787 $ 1,499,350 $ 1,616,137 $ 67,618 $ 1,541,616 $1,609,234 

- 801 801 - 5,682 5,682 

 $116,787 $1,500,151 $1,616,938 $67,618 $ 1,547,298 $1,614,916 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

Undelivered Orders at the End of the Period 

Undelivered Orders include loan and related subsidy obligations that have been issued but not disbursed 

and obligations for goods and services ordered that have not been received. OPIC’s undelivered orders, 

paid and unpaid, as of September 30, 2018 and 2017 consisted of the following: 

Undelivered Orders through September 30

(in thousands) 

Unpaid 

Paid 

Total 

Obligations 

2018 2017 

Federal Non-Federal Total Federal Non-Federal Total 

$ 840,913 $ 1,822,632 $ 2,663,545 $ 934,412 $ 2,161,531 $ 3,095,943 

42 21 63 - 21 21 

$ 840,955 $ 1,822,653 $ 2,663,608 $ 934,412 $ 2,161,552 $ 3,095,964 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 15: EXPLANATION OF DIFFERENCES BETWEEN THE STATEMENT OF 

BUDGETARY RESOURCES AND THE BUDGET OF THE UNITED STATES GOVERNMENT 

SFFAS No. 7, Accounting for Revenue and Other Financing Sources and Concepts for Reconciling 

Budgetary and Financial Accounting, requires federal agencies and entities to explain material differences 

between amounts reported in the Statement of Budgetary Resources and the actual amounts reported in the 

Budget of the U.S. Government (the President’s Budget). The FY 2020 President’s Budget which presents 

the actual amounts for the year ended September 30, 2018, has not been published as of the issue date of 

these financial statements. The President’s Budget is scheduled for publication in the spring of FY 2019 

and can be found on the OMB website: http://www.whitehouse.gov/omb. 

Balances reported in the FY 2017 Statement of Budgetary Resources and the related President’s Budget are 

shown in a table below for Budgetary Resources, Obligations, Distributed Offsetting Receipts, Net Outlays 

and any related differences. The differences reported are due to differing reporting requirements for expired 

and unexpired appropriations between the Treasury guidance used to prepare the SBR and the OMB 

guidance used to prepare the President’s Budget. The SBR includes both unexpired and expired 

appropriations, while the President’s Budget discloses only unexpired budgetary resources that are available 

for new obligations. Additionally differences exist due to Distributed Offsetting Receipts reported on the 

SBR, but not on the President’s Budget and due to rounding variances for Budgetary Resources and 

Obligations. 

2017 

New 

(in millions) Obligations Distributed 

Budgetary & Upward Offsetting 

Resources Adjustments Receipts Net Outlays 

Combined Statement of $ 7,841 $ 1,615 $ 485 $ 256 Budgetary Resources 

Included in SBR, not in 

President’s Budget 

 Expired Accounts (44) - - -

Distributed Offsetting Receipts - - (485) 485

 Rounding 3 (3) - (1) 

Budget of the United States $ 7,800 $ 1,612 $ - $ 740 Government 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 16: RECONCILIATION OF NET COST OF OPERATIONS TO OUTLAYS 

Budgetary accounting is used for planning and control purposes and relates to both the receipt and use of 

cash, as well as reporting the federal deficit. Financial accounting is intended to provide a picture of the 

government's financial operations and financial position so it presents information on an accrual basis. The 

accrual basis includes information about costs arising from the consumption of assets and the incurrence of 

liabilities. The reconciliation of net outlays, presented on a budgetary basis, and the net cost, presented on 

an accrual basis, provides an explanation of the relationship between budgetary and financial accounting 

information. The reconciliation serves not only to identify costs paid for in the past and those that will be 

paid in the future, but also to assure integrity between budgetary and financial accounting. The analysis 

below illustrates this reconciliation by listing the key differences between net cost and net outlays. 

For the year ended September 30, 2018 

Intra With the (in thousands) Total governmental public 

Net Cost $ (13,208) $ (135,313) $ (148,522) 

Components of Net Cost That Are Not Part of Net Outlays:

 Property and Equipment Depreciation - (902) (902) 

 Year-end Credit Reform subsidy Re-estimates (86,710) 166,961 80,251 

Increase/(decrease) in assets:

 Accounts Receivable (97,762) (709) (98,471) 

 Credit Program Receivable - 204,360 204,360

 Negative Loan Guarantee Liability - (96,854) (96,854) 

 Investments (8,608) - (8,608) 

(Increase)/decrease in liabilities:

 Unearned Revenue - (1,545) (1,545) 

 Subsidy Payable to the Financing Account 388,710 - 388,710

 Downward Reestimate Payable to Treasury 66,024 - 66,024 

 Other Liabilities (266) 268 2 

Other Financing Sources:

 Imputed Costs (2,147) - (2,147) 

Total Components of Net Cost That Are Not Part of Net 259,241 271,579 530,820 

Outlays 

Components of Net Outlays That Are Not Part of Net Cost:

 Acquisition of Property and Equipment - 151 151

 Distributed Offsetting Receipts (425,120) - (425,120) 

Total Components of Net Outlays That Are Not Part of (425,120) 151 (425,271) 

Net Cost 

Net Outlays $ (179,087) $ 136,417 $ (42,670) 

Related Amounts on the Statement of Budgetary Resources 

 Outlays, net 382,450

 Distributed Offsetting Receipts (425,120) 

Agency Outlays, Net (42,670) 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

NOTES TO THE FINANCIAL STATEMENTS 

NOTE 16: RECONCILIATION OF NET COST OF OPERATIONS TO OUTLAYS (continued) 

For the year ended September 30, 2017 

Intra (in thousands) With the public Total governmental 

Net Cost $ (37,529) $ (162,251) $ (199,780) 

Components of Net Cost That Are Not Part of Net Outlays:

 Property and Equipment Depreciation - (976) (976) 

 Year-end Credit Reform subsidy Re-estimates (118,415) 251,965 133,550 

Increase/(decrease) in assets: 

 Accounts Receivable 102,729 (539) 102,190

 Credit Program Receivable - 598,555 598,555

 Negative Loan Guarantee Liability - (120,309) (120,309) 

 Investments (6,258) - (6,258) 

(Increase)/decrease in liabilities: 

 Unearned Revenue - (18,268) (18,268) 

 Subsidy Payable to the Financing Account 286,048 - 286,048

 Downward Reestimate Payable to Treasury (34,093) - (34,093) 

 Insurance Program Liabilities - 128 128

 Other Liabilities (61) 28 (33) 

Other Financing Sources:

 Imputed Costs (353) - (353) 

Total Components of Net Cost That Are Not Part of 229,597 710,584 940,181 

Net Outlays 

Components of Net Outlays That Are Not Part of Net Cost:

 Acquisition of Property and Equipment - 18 18

 Distributed Offsetting Receipts (484,722) - (484,722) 

Total Components of Net Outlays That Are Not Part (484,722) 18 (484,704) 

of Net Cost 

Net Outlays $ (292,654) $ 548,351 $ 255,697 

Related Amounts on the Statement of Budgetary Resources 

 Outlays, net 740,419

 Distributed Offsetting Receipts (484,722) 

Agency Outlays, Net 255,697 

49
 

 

 

 

 

 

 

 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

REQUIRED SUPPLEMENTARY INFORMATION - UNAUDITED 

COMBINING STATEMENT OF BUDGETARY RESOURCES BY MAJOR BUDGET ACCOUNT 

For the year ended September 30, 2018 

2018 

Non-Budgetary 

Insurance Financing (in thousands) Credit Reform 

Budgetary Budgetary Accounts 

Budgetary Resources 

Unobligated Balance from Prior Year Budget Authority, Net $ 5,715,018 $ 83,185 $ 392,415 

Appropriations - 376,573 -

Borrowing Authority - - 724,489 

Spending Authority from Offsetting Collections 144,248 67,520 657,942 

Total Budgetary Resources $ 5,859,266 $ 527,278 $ 1,774,846 

Status of Budgetary Resources 

New obligations and upward adjustments (total) (Note 15) $ 79,939 $ 443,790 $ 1,093,209 

Unobligated Balance, End of Year

 Apportioned, unexpired accounts 33,684 33,089 -

Unapportioned, unexpired accounts 5,745,594 143 681,637

 Unexpired unobligated balance, end of year 5,779,278 33,232 681,637

 Expired unobligated balance, end of year 49 50,256 -

Unobligated Balance, end of year (total) 5,779,327 83,488 681,637 

Total Budgetary Resources $ 5,859,266 $ 527,278 $ 1,774,846 

Outlays, net (131,696) 441,031 73,115

 Distributed Offsetting Receipts - - (425,120) 

Agency Outlays, Net $ (131,696) $ 441,031 $ (352,005) 

50
 

 

 

 

 

OVERSEAS PRIVATE INVESTMENT CORPORATION 

REQUIRED SUPPLEMENTARY INFORMATION - UNAUDITED 

COMBINING STATEMENT OF BUDGETARY RESOURCES BY MAJOR BUDGET ACCOUNT 

For the year ended September 30, 2017 

2017 

Non-Budgetary 

Insurance Financing (in thousands) Credit Reform 

Budgetary Budgetary Accounts 

Budgetary Resources 

Unobligated Balance from Prior Year Budget Authority, Net 5,662,316 79,037 366,119 

Appropriations - 282,604 -

Borrowing Authority - - 945,989

 Spending Authority from Offsetting Collections 121,151 62,000 321,346 

Total Budgetary Resources $ 5,783,467 $ 423,641 $ 1,633,454 

Status of Budgetary Resources 

New obligations and upward adjustments (total) (Note 15) $ 79,191 $ 347,386 $ 1,188,339 

Unobligated Balance, End of Year

 Apportioned, unexpired accounts - 31,818 325,708

 Unapportioned, unexpired accounts 5,704,227 115 119,407

 Unexpired unobligated balance, end of year 5,704,227 31,933 445,115

 Expired unobligated balance, end of year 49 44,322 0

 Unobligated Balance, end of year (total) 5,704,276 76,255 445,115 

Total Budgetary Resources $ 5,783,467 $ 423,641 $ 1,633,454 

Outlays, net (118,106) 340,969 517,556

 Distributed Offsetting Receipts - - (484,722) 

Agency Outlays, Net $ (118,106) $ 340,969 $ 32,834 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

REQUIRED SUPPLEMENTARY INFORMATION - UNAUDITED 

RISK ASSUMED INFORMATION 

OPIC’s measure of risk assumed on insurance claims is equitable to the current exposure for all policies in 

force, or Current Exposure to Claims (CEC). OPIC’s CEC at September 30, 2018 and 2017 was $2.1 billion 

and $1.8 billion, respectively. OPIC’s broader measure of exposure is limited to “Maximum Contingent 

Liability” as defined in legislation as $3.9 billion and $4.1 billion at September 30, 2018 and 2017, 

respectively. This amount is OPIC’s estimate of maximum exposure to insurance claims, which includes 

standby coverage for which OPIC is committed but not currently at risk. 

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OVERSEAS PRIVATE INVESTMENT CORPORATION 

OTHER INFORMATION - UNAUDITED 

REPORT ON IMPROPER PAYMENTS 

In accordance with Office of Management and Budget (OMB) guidance on the implementation of 

the Improper Payments Information Act (IPIA) of 2002, as amended by the Improper Payments 

and Elimination and Recovery Act of 2010 and the Improper Payments and Elimination and 

Recovery Improvement Act of 2012, OPIC’s review of its programs and activities confirms that 

the agency has adequate internal controls in place over program and administrative disbursements 

to ensure that the risk of improper payments is extremely low. OPIC’s review includes an 

evaluation of OMB identified risk factors, as well OPIC’s internal business processes and controls. 

Based on the number of OPIC programs, the relatively small number of annual disbursements, the 

multiple clearances required for each disbursement, the risk assessment, and the internal controls 

in place for all disbursements OPIC has concluded that its payment processes are not susceptible 

to significant improper payment risks and OPIC’s overall risk rating is low. 

53