Recopilación, Revisión e Integración de Datos

Capital assets activity for the year ended June 30, 2012 is as follows (expressed in thousands): Primary Government

Beginning

Balance Ending

(As restated) Increases Decreases Balance

Governmental activities:

Capital assets, not being depreciated:

Land $ 867,215 $ 12,465 $ 799 $ 878,881

Construction in progress 1,117,079 628,579 1,487,071258,587

Total capital assets, not

being depreciated 1,984,294 641,044 2,365,952259,386

Buildings and building improvements 272,4318,167,328 86,243 8,353,516

Equipment, furniture, fixtures, vehicles,

and software 545,393 48,058 6,478 586,973

Infrastructure 605,846 - 605,846-

Total capital assets, being

depreciated and amortized 9,318,567 320,489 9,546,33592,721

Less accumulated depreciation and amortization for:

Buildings and building improvements 239,8133,048,803 59,447 3,229,169

Equipment, furniture, fixtures,

vehicles, and software 355,831 41,708 4,101 393,438

Infrastructure 131,341 12,539 143,880-

Total accumulated depreciation

and amortization 3,535,975 294,060 3,766,48763,548

Total capital assets, being

depreciated and amortized, net 5,782,592 26,429 5,779,84829,173 $

Governmental activities capital assets, net $7,766,886 $667,473 $ 8,145,800288,559 $

Business-type activities: Total capital assets, being

depreciated — equipment $ 6,870 $ 137 $ - $ 7,007

Less accumulated depreciation of

equipment 5,210 71 5,281-

Total business-type activities capital

Depreciation and amortization expense was charged to functions/programs of the primary government for the year ended June 30, 2012 as follows (expressed in thousands):

Governmental activities:

General government $ 92,329

Public safety 27,151

Health 7,447

Public housing and welfare 115,684

Education 34,425

Economic development 17,024

Total depreciation and amortization expense — governmental activities $294,060 The Commonwealth follows the provision of GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries, and an amendment to

GASB Statement No. 34. This statement establishes guidance for accounting and reporting for the impairment of capital assets and for insurance recoveries. Every year the Commonwealth performs an impairment analysis of its capital assets, in order to comply with the requirements of GASB Statement No. 42. The financial reporting impact resulting from this analysis had no effect on the statement of activities for the year ended June 30, 2012.

General infrastructure assets include $427 million representing actual and estimated costs of assets transferred to the Department of Natural and Environmental Resources (DNER) of the Commonwealth in 1997 upon completion of the Cerrillos Dam and Reservoir and the Portugues-River and Bucana-River Projects (“the Cerrillos Dam and Reservoir Project”) by the United States (U.S.) Army Corps of

Engineers. These infrastructure assets are reported within governmental activities and include dams, intake facilities, and similar items built for flood control, water supply, and recreational purposes. The depreciation is computed using the straight-line method over an estimated useful life of 50 years from the transfer date of the property. Late in April 2011, the Commonwealth received a final debt agreement from the U.S. Army Corps of Engineers establishing a repayment schedule for its allocated share of the construction costs associated with the Cerrillos Dam and Reservoir Project, excluding those costs for items built for recreational purposes, amounting to $214 million. Unpaid allocated share of these construction costs associated with the Cerrillos Dam and Reservoir Project amounted to $212 million, plus accrued interest of $163 million, at June 30, 2012 (see Note 15). The Commonwealth also recorded a payable due to the U.S. Army Corps of Engineers, amounting to $14 million, for its estimated

allocated share of the construction costs associated with the recreational part of the Cerrillos Dam and Reservoir Project, including accrued interest of $4 million. The final debt agreement between DNER and the U.S. Army Corps of Engineers for the recreational part of the Cerrillos Dam and Reservoir Project has not been finalized, and therefore, terms and conditions could differ from those estimated (see Note 15). The depreciation is computed using the straight-line method over an estimated useful life of 50 years from the transfer date of the property.

On August 17, 2001, the Legislature of the Commonwealth approved Act No. 120, which requires the conditional transfer of the ownership of certain real properties under the name of the Department of Recreation and Sports (DRS) of the Commonwealth to the municipalities of the Commonwealth. Land and facilities have been transferred occasionally since the date of this Act at no cost to the

municipalities. During the fiscal year ended June 30, 2012, no transfers were made to the municipalities under the provisions of this Act.

Discretely Presented Component Units

Beginning

Balance Ending

(as Restated) Increases Decreases Balance

Capital assets, not being depreciated/amortized:

Land $ 3,252,708 $ 82,643 $ 26,341 $ 3,309,010

Art works 9,981 8,073 6,468 11,586

Construction in progress 4,073,664 1,460,403 3,705,9441,828,123

Total capital assets, not being

depreciated/amortized 7,336,353 1,551,119 7,026,5401,860,932

Capital assets, being depreciated/amortized:

Buildings and building improvements 5,156,467 311,377 49,608 5,418,236

Equipment, furniture, fixtures,

vehicles, and software 697,15710,435,927 63,957 11,069,127

Infrastructure 795,84727,356,764 55,307 28,097,304

Intangibles, other than software 2,293 - 2,293-

Total capital assets, being

depreciated/amortized 42,951,451 1,804,381 44,586,960168,872

Less accumulated depreciation/amortization for:

Buildings and building improvements 2,278,591 143,863 14,658 2,407,796

Equipment, furniture, fixtures,

vehicles and software 2,144,854 433,471 49,873 2,528,452

Infrastructure 671,69115,582,023 17,932 16,235,782

Intangibles, other than software 866 57 923-

Total accumulated depreciation/amortization 20,006,334 1,249,082 21,172,95382,463

Total capital assets, being

depreciated/amortized, net 22,945,117 555,299 23,414,00786,409

Capital assets, net $30,281,470 $2,106,418 $ 30,440,5471,947,341 $

On February 24, 2012, PRIFA entered into an Assistance Agreement with the Puerto Rico Department of Justice (PRDOJ) and GDB to acquire, refurbish and operate a property to be used for the relocation of the PRDOJ’s main offices. In connection with the Assistance Agreement, GDB provided a $35 million credit facility to PRIFA to undertake the acquisition and administration of this property and manage the initial phase of the rehabilitation and refurbishment of the property. On March 8, 2012, PRIFA acquired the property for approximately $27 million. The credit facility is payable solely from, and secured by the assignment of the PRDOJ lease agreement and any other existing and future lease agreement and by a mortgage lien on the property acquired.

PRIFA has also issued certain bonds and notes to finance the construction of certain capital projects for the benefit of PRASA, municipalities and other agencies and instrumentalities of the Commonwealth. The capital projects include the construction of infrastructure and buildings to be used in the operations of, and managed by, PRASA, the municipalities and other agencies in their respective operations. The capital projects, including the land acquired, are included as part of PRIFA’s capital assets until construction is completed and the conditions for transfers to the ultimate beneficiaries are met. During the year ended June 30, 2012, PRIFA incurred approximately $30 million in construction costs for the

In October 2010, PRIFA entered into a memorandum of understanding with Puerto Rico Public-Private Partnerships Authority, Puerto Rico Public Buildings Authority, Puerto Rico Department of Education, Puerto Rico Department of Transportation and Public Works (“DTOP”, for its Spanish acronym), and the GDB for the administration of the Schools for the 21st Century Program (the “21st Century Program”).

Data for September 2012 reveals additional significant progress by the Schools for the 21st _Century

Program with fifty-two (52) Public Private Partnership contracts awarded for ninety-nine (99) schools. By this date, seventy (70) schools were under construction and twenty-nine (29) schools were completed and turned over to the DE. The fifty-two (52) Public Private Partnership contracts awarded by

September 2012 represented a total investment amount of approximately $650 million. 14. TAX REVENUE AND BOND ANTICIPATION NOTES PAYABLE

Act No. 1 of the Legislature of the Commonwealth, approved on June 26, 1987 (“Act No. 1”),

authorizes the Secretary of the Treasury Department to issue, from time to time, notes in anticipation of taxes and revenues (“Tax Revenue Anticipation Notes” or “TRANS”) so that the Secretary, in the cash flow management program designed to maximize the use of moneys in the general fund, will have an alternate means of providing a liquidity mechanism to cover any temporary cash shortages projected for a fiscal year. Act No. 139, approved on November 9, 2005, amended Section 2(g) of Act No. 1 to provide that the total principal amount of notes issued under the provisions of Act No. 1 and outstanding at any time for any fiscal year may not exceed the lesser of eighteen percent (18%) of the net revenues of the general fund for the fiscal year preceding the fiscal year in which the notes are issued or one billion five hundred million dollars ($1,500,000,000).

TRANS issued during fiscal year 2012 amounted to $1,100 million at interest rates ranging from 1.20% to 2.25%. TRANS proceeds were used to cover temporary cash deficiencies resulting from the timing differences between tax collections and the payments of current expenditures. TRANS were refinanced during the year in order to take advantage of interest rates. The maximum amount of TRANS

outstanding at any time during the year was approximately $900 million. As of June 30, 2012, the balance of TRANS outstanding was paid in full.

Also, during fiscal year 2012, the Commonwealth was authorized to issue bond anticipation notes in an aggregate principal amount, not to exceed $290 million, in order to complete certain public

improvement projects, acquire certain properties and equipment on behalf of some component units, and cover the cost and interest of the bonds expected to be issued, as described below. These notes have been issued in anticipation of the issuance of public improvement bonds expected to be issued during fiscal year 2014. Although legal steps have been taken to refinance the anticipation notes with the bonds, since such bonds have not been issued as of the date of these basic financial statements, the related notes have been recognized as a short-term fund liability in the capital project fund. As of June 30, 2012, $75.8 million of bond anticipation notes were outstanding.