Financial Report Review Board of Trustees Meeting February 14, 2017 - PowerPoint PPT Presentation

Financial Report Review Board of Trustees Meeting February 14, 2017

Key Elements of Financial Statements & Footnotes MD&A (Management's Discussion & Analysis) Auditor's Opinion Statement of Net Position [Balance Sheet] Assets / Liabilities / Net Position Statement of Revenues, Expenses, and Changes in Net Position [Income Statement] Revenues / Expenses / Change in Net Position Notes 1 Significant Accounting Policies 2 Deposits & Investments 4 Endowment Investments 8 Long Term Liabilities 10 Revenues 11 Operating Expenses by Function 12 Pensions 14 Risk Management Slide 2

Financial Reporting Concepts • The Excellence, HES, Capital Facilities, and Weatherspoon Arts Foundations are blended with the University for Financial Reporting and comprise the Financial Reporting Entity • Key figure is Income before Other Revenues since it provides the best matching of revenues with associated expenses • Major drivers of Business Type Activity Financial Statements, are construction spending, debt related to construction spending, and investment growth or decline Slide 3

Condensed Statement of Net Position ($ in millions) Fiscal Years Ended June 30, 2015 and June 30, 2016 FY 16 FY 15 Assets Cash 145 163 Investments (Mostly Endowment) 249 264 Capital Assets (Buildings, Equipment, General Infrastructure) 717 684 Other (includes Deferred Outflows) 27 23 Total Assets 1,138 1,134 Liabilities Debt 334 341 Accounts Payable and Accrued Liabilities 50 39 Other (includes Deferred Inflows) 25 43 Total Liabilities 409 423 Net Position Net Investment in Capital Assets 384 379 Restricted Nonexpendable (Endowment Corpus) 138 133 Restricted Expendable (Endowment Income and Growth) 122 129 Unrestricted 85 70 Total Net Position 729 711 Slide 4

Statement of Net Position Highlights • Investments decreased by $15 million – Investment Loss – 4.8% – Endowment gifts of $6 million – Distributions of $10 million • Capital Assets increased by $33 million – Kaplan Center for Wellness Slide 5

Statement of Net Position Highlights • Debt Decreased $7 million – Decrease in Bonds Payable $10 million – Increase in Notes Payable $3 million • Deferred Inflows Related to Pensions – Decreased $18 million • Total Net Position Increased $18 million - Net Investment in Capital Assets increased $5 million - Restricted Nonexpendable increased $5 million - Restricted Expendable decreased $7 million - Unrestricted increased $15 million Slide 6

Statement of Revenues, Expenses, and Changes in Net Position Highlights ($ in millions) Fiscal Years Ended June 30, 2015 and June 30, 2016 FY 16 FY 15 Operating Revenues Student Tuition and Fees, Net 100 92 Sales and Services, Net 51 50 Grants and Contracts 8 8 Other Operating Revenues 2 1 Total Operating Revenues 161 151 Operating Expenses Salaries and Benefits 226 220 Scholarships and Fellowships 29 30 Services 57 54 Supplies and Materials 20 20 Utilities 8 8 Depreciation 20 18 Total Operating Expenses 360 350 Operating Loss (199) (199) Slide 7

Statement of Revenues, Expenses, and Changes in Net Position Highlights ($ in millions) Fiscal Years Ended June 30, 2015 and June 30, 2016 FY 16 FY 15 Nonoperating Revenues (Expenses) State Appropriations 149 144 Noncapital Grants - Student Financial Aid 52 49 Noncapital Grants and Gifts 27 27 Investment Income (Loss) (9) 2 Interest and Fees on Debt (9) (9) Other Nonoperating Expenses (4) (1) Net Nonoperating Revenues 206 212 Income Before Other Revenues 7 13 Capital Appropriations 4 Capital Grants and Gifts 1 1 Additions to Endowments 6 4 Total Other Revenues 11 5 Increase in Net Position 18 18 Net Position - July 1 711 693 Net Position - June 30 729 711 Slide 8

Statement of Revenues, Expenses, and Changes in Net Position Highlights • Operating Income and Operating Expenses increased by $10 million • State Appropriations increased by $5 million • State Appropriations classified as Nonoperating Revenues but used to cover Operating Expenses • Investment Income (total of realized and unrealized appreciation and investment income less investment expenses) declined to a loss of $9 million • Income Before Other Revenues declined by $6 million to $7 million • Overall increase in Net Position was $18 million Slide 9

Selected Financial Statement Ratios For Fiscal Years 2015 and 2016 Including Moody's Investor Service Medians for Aa3 and A1 Rated College & University Debt Moody's Moody's Aa3 Median A1 Median FY 16 FY 15 FY15 FY15 Spendable Cash and Investments ($000) 248,115 295,172 402,344 140,985 Total Debt ($000) 310,370 317,403 315,403 128,324 Spendable Cash and Investments to Total Debt (x) .80 .93 1.29 .97 Total Debt to Adjusted Operating Revenues (x) .85 .92 .56 .65 Total Debt to Total Capitalization (%) 30 31 30 32 Slide 10