john carroll university board of directors presentation vice president for finance and...

John Carroll UniversityJohn Carroll UniversityBoard of Directors PresentationBoard of Directors Presentation

Vice President for Vice President for Finance and Finance and

Administrative Administrative Services Services

Financial UpdateFinancial Update

December 14, December 14, 20042004

2

John Carroll John Carroll UniversityUniversity

PresentersPresenters

Jonathan Ivec – VP for Finance and Jonathan Ivec – VP for Finance and Administrative ServicesAdministrative Services

Richard Mausser – Executive Richard Mausser – Executive Director of Finance / ControllerDirector of Finance / Controller

3


AgendaAgenda

03-04 Financial Statement Review03-04 Financial Statement Review Ratios, Trends and Ranking Ratios, Trends and Ranking

StatisticsStatistics 05-06 Budget05-06 Budget Q & A SessionQ & A Session

4


03-04 Financial 03-04 Financial Statement Statement

ReviewReview

5


Statements of Financial Position Statements of Financial Position - Assets- Assets

6


Endowment Portfolio Market ValueEndowment Portfolio Market Value

$35.1$50.0 $52.1

$60.0$73.5

$98.0$118.0

$131.5$139.4$139.7

$132.4$122.4

$135.8

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

Millions

of

Dollars

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Fiscal Year Ending May 31,

Quasi Endowment True Endowment

7


Major Capital Projects Major Capital Projects Costs and Funding Sources 1996-2004Costs and Funding Sources 1996-2004

In $Millions

$1.7 Grant

$2.1 Gifts$3.5 Debt$2.8 Plant

$0.7 Gifts

$5.1 Debt$7.7 Debt

$1.3 Debt

$11.0 Gifts/ Debt/ Plant

$1.1 Debt

$67.0Gifts

GrantsDebt

$3.1 Debt

$6.8 Gifts/ Plant

Breen Learning Cntr '97Educ. Dept. Remodel '97Jesuit Residence '98Bernet Remodel '99Dining Hall Remodel '99Locker Room '00Rodman Remodel '01Admin Bldg Remodel '02DeCarlo Cntr Remodel '03Dolan Hall Remodel '03Pacelli Hall Remodel '03Shula Stadium '04Dolan Science Center '04

Projects by Year Capitalized ($113.9 million total)

8


Statements of Financial Position Statements of Financial Position – Liabilities And Net Assets– Liabilities And Net Assets

9


Scheduled Long-Term DebtScheduled Long-Term Debt Principal Balances Principal Balances

$47.

4

$45.

2$3

5.4

$42.

8$3

5.4

$23.

9$3

2.4

$24.

1

$22.

9$3

2.4

$24.

1

$21.

8$3

2.4

$23.

1

$20.

7$3

2.4

$22.

1

$19.

5$3

2.4

$21.

0

$18.

3$3

2.4

$19.

9

$17.

0$3

2.4

$18.

8

$15.

6$3

2.4

$17.

6

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

$M

illions

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


Debt at 5/ 31/ 01 2001 Issue 2003 Issue Outside Properties

10


Statements of Activities – Statements of Activities – Operating RevenuesOperating Revenues

11


Total Operating Revenues (Net of Total Operating Revenues (Net of Aid)Aid)

Current Operating Fund - Budget vs. ActualCurrent Operating Fund - Budget vs. Actual

$60.

632

$62.

236

$65.

276

$66.

769

$70.

564

$69.

783

$75.

860

$73.

887

$78.

918

$76.

682

$80.

053

$77.

892

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

Mill

ions

of D

olla

rs

99-00 00-01 01-02 02-03 03-04 04-05

Fiscal Year (04-05 is Projected)

Budget Actual

12


Full-time Undergraduate Full-time Undergraduate EnrollmentEnrollment

Fall Semester (end of third week)Fall Semester (end of third week)

3,3533,297 3,317 3,322

3,279 3,2793,185

3,000

3,100

3,200

3,300

3,400

3,500

Hea

dco

un

t

98-99 99-00 00-01 01-02 02-03 03-04 04-05*

Academic Year (*04-05 is end of 2nd week)

13


Undergraduate Summer Undergraduate Summer EnrollmentEnrollment

Headcount Per YearHeadcount Per Year

1,004

863932

887819

641 607

400

500

600

700

800

900

1,000

1,100

He

ad

co

un

t

1998 1999 2000 2001 2002 2003 2004

Year

14


Graduate School Credit HoursGraduate School Credit HoursFall and Spring SemestersFall and Spring Semesters

10,85510,572

10,379

9,621 9,6349,100

8,000

8,500

9,000

9,500

10,000

10,500

11,000

Cre

dit

Ho

urs

99-00 00-01 01-02 02-03 03-04 04-05*

Academic Year( * 04-05 projected based on historical data)

15


Transfer StudentsTransfer StudentsPer Academic YearPer Academic Year

172178 167

155139

150

0

40

80

120

160

200

Nu

mb

er

of

Tra

ns

fer

Stu

de

nts

99-00 00-01 01-02 02-03 03-04 04-05*

Academic Year (*Projected)

16


Students Studying AbroadStudents Studying Abroad(Fall and Spring Semesters)(Fall and Spring Semesters)

15

17

26

20

17

22

30

50

16

77

28

66

0

25

50

75

100

Nu

mb

er

of

Stu

de

nts

S

tud

yin

g A

bro

ad

99-00 00-01 01-02 02-03 03-04 04-05*

Academic Year (*Projected)

Fall Spring

17


Financial Aid (Unfavorable) FavorableFinancial Aid (Unfavorable) Favorable to Budget to Budget

Undergraduate Unrestricted Non-repayable AidUndergraduate Unrestricted Non-repayable Aid

$0 $0

($96)

($410) ($274)

($797)

$1,024

-$1,250

-$1,000

-$750

-$500

-$250

$0

$250

$500

$750

$1,000

$1,250

Th

ou

sa

nd

s o

f D

oll

ars

98-99 99-00 00-01 01-02 02-03 03-04 04-05*

Fiscal Year (04-05 is projected)

857

834

833

792

843

859

734

Freshman Class Size

18


Endowment Spending PolicyEndowment Spending Policy

$5

.08

5

$5

.92

6

$6

.56

3

$6

.92

5

$6

.89

7

$6

.67

3

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

Millio

ns

of

Do

lla

rs

98-99 99-00 00-01 01-02 02-03 03-04

Fiscal Year

19


Average Interest Rates (Income)Average Interest Rates (Income)

5.0

3%

5.3

7%

6.1

8%

2.9

3%

1.7

8%

1.1

0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Pe

rce

nt

98-99 99-00 00-01 01-02 02-03 03-04

Fiscal Year

20


Statements of Activities – Statements of Activities – Operating ExpensesOperating Expenses

21


Total Operating ExpensesTotal Operating ExpensesCurrent Operating Fund - Budget vs. Current Operating Fund - Budget vs.

ActualActual

$60.

132

$59.

189

$64.

776

$62.

649

$70.

064

$68.

562

$75.

360

$73.

672

$78.

918

$76.

600

$80.

053

$78.

055

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

Mill

ions

of D

olla

rs

99-00 00-01 01-02 02-03 03-04 04-05

Fiscal Year (04-05 is Projected)

Budget Actual

22


Depreciation ExpenseDepreciation Expense

$3

.51

9

$3

.44

6

$3

.79

8

$4

.35

5

$4

.99

3

$6

.15

5

$7

.00

0

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

Millio

ns

of

Do

lla

rs

98-99 99-00 00-01 01-02 02-03 03-04 04-05

Year (0405 is projected)

Shula StadiumDolan ScienceOutside PropertiesBase Depreciation

23


Factors that had been Expected to Factors that had been Expected to Offset Increase in Depreciation Offset Increase in Depreciation

Expense Expense

Expectation – Tuition revenue operating surpluses Expectation – Tuition revenue operating surpluses would continuewould continue

Reality – Tuition surplus was completely eroded by Reality – Tuition surplus was completely eroded by declining enrollmentdeclining enrollment

Expectation – Dolan Center bridge financing, which Expectation – Dolan Center bridge financing, which had been built into budget, would be paid off by had been built into budget, would be paid off by campaigncampaign

Reality – Bridge financing has become permanent Reality – Bridge financing has become permanent financingfinancing

Expectation – Significant increase in annual fund Expectation – Significant increase in annual fund giving giving

Reality – Annual fund giving was largely diverted to Reality – Annual fund giving was largely diverted to the capital campaignthe capital campaign

24


Operating SurplusOperating SurplusAccrual Basis of AccountingAccrual Basis of Accounting

$8.8

69$5

.350 $8

.723

$5.2

77

$11.

537

$7.7

39

$6.2

68

$1.9

13

$7.9

29

$2.9

36

$6.0

30

-$0.

125

-$2.5

$0.0

$2.5

$5.0

$7.5

$10.0

$12.5

Mill

ions

of D

olla

rs

98-99 99-00 00-01 01-02 02-03 03-04

Fiscal Year

Before Depreciation After Depreciation

25


Statements of Activities – Statements of Activities – Nonoperating ExpensesNonoperating Expenses

26


Ratios, Trends & Ratios, Trends & Ranking StatisticsRanking Statistics

27


Jesuit InstitutionsJesuit InstitutionsRanked by 2004/05 Tuition, Fees, Room and Board - Part 1Ranked by 2004/05 Tuition, Fees, Room and Board - Part 1

28


Jesuit InstitutionsJesuit InstitutionsRanked by 2004/05 Tuition, Fees, Room and Board - Part 2Ranked by 2004/05 Tuition, Fees, Room and Board - Part 2

29


Ohio Private UniversitiesOhio Private UniversitiesRanked by 2004/05 Tuition, Fees, Room and Board - Part 1Ranked by 2004/05 Tuition, Fees, Room and Board - Part 1

30


Ohio Private UniversitiesOhio Private UniversitiesRanked by 2004/05 Tuition, Fees, Room and Board - Part 2Ranked by 2004/05 Tuition, Fees, Room and Board - Part 2

31


Ohio Private UniversitiesOhio Private UniversitiesRanked by 2003/04 Average Faculty Salary - Part Ranked by 2003/04 Average Faculty Salary - Part

11

32


Ohio Private UniversitiesOhio Private UniversitiesRanked by 2003/04 Average Faculty Salary - Part Ranked by 2003/04 Average Faculty Salary - Part

22

33


University Operating Fund University Operating Fund Headcounts as a Percent of Total Headcounts as a Percent of Total

Student FTEStudent FTE

34


Student to Faculty RatioStudent to Faculty RatioPer Academic YearPer Academic Year

16.0

15.7

15.8

14.9

14.7

14.7

14.4

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

17.0

18.0

Stu

den

t F

TE

/ F

acu

lty

FT

E

98-99 99-00 00-01 01-02 02-03 03-04 04-05

Academic Year

35


05-06 Budget05-06 Budget

36


Operating RevenuesOperating RevenuesYear Ended May 31, 2004Year Ended May 31, 2004

18.6%

8.2%

6.1%

5.7%

0.4%

2.7%58.3%

Tuition (net of Schol.)

Auxiliary Enterprises

Investment Income

Private Gifts

Government Grants

Interest Income

Other

Revenue Sources

37


05-06 Budget Assumptions05-06 Budget AssumptionsNet RevenuesNet Revenues

Undergraduate tuition rate increase – 5.75%Undergraduate tuition rate increase – 5.75% Room and board rate increase – 4.0% (total room Room and board rate increase – 4.0% (total room

and board revenue expected to decline based on and board revenue expected to decline based on projection of 175 empty “beds” in 05-06)projection of 175 empty “beds” in 05-06)

Freshmen class size – 780Freshmen class size – 780 Freshmen financial aid discount target – 38%Freshmen financial aid discount target – 38% Summer school tuition rate – No change (total Summer school tuition rate – No change (total

summer school tuition budget reduced based on summer school tuition budget reduced based on trend)trend)

Graduate School tuition rate – No change (total Graduate School tuition rate – No change (total Graduate School tuition reduced based on trend)Graduate School tuition reduced based on trend)

$200,000 for Graduate School cohort program$200,000 for Graduate School cohort program $350,000 increase in annual fund giving$350,000 increase in annual fund giving

38


Proposed Tuition and Room and Proposed Tuition and Room and Board Increases – 2005-06Board Increases – 2005-06

39


Operating ExpensesOperating ExpensesYear Ended May 31, 2004Year Ended May 31, 2004

44.3%

7.4%5.9%

4.9%

4.9%

4.1%

3.7%

7.8%

3.6%

13.5%

Salaries and WagesFringe BenefitsDepreciationContract ServicesInterestUtilities/ InsuranceTravel/ MeetingsPrinting/ SuppliesMaintenance/ RentalOther

Natural Expenses

40


05-06 Budget Assumptions05-06 Budget AssumptionsExpensesExpenses

University-wide wage freezeUniversity-wide wage freeze Funding for a 15% increase in medical premiumsFunding for a 15% increase in medical premiums $1.7 million in spending cuts, primarily from not $1.7 million in spending cuts, primarily from not

replacing open positionsreplacing open positions No increase in departmental operating budgets No increase in departmental operating budgets

except for expected increases in utility and insurance except for expected increases in utility and insurance costscosts

Added funding for the London study abroad program Added funding for the London study abroad program to begin in Fall 2005to begin in Fall 2005

Funding for the hiring of a new Dean of the Business Funding for the hiring of a new Dean of the Business School and new Executive Director of LibrarySchool and new Executive Director of Library

Funding for the hiring of two new fund raisers needed Funding for the hiring of two new fund raisers needed to increase annual fund goal by $350,000to increase annual fund goal by $350,000

41


Unrestricted Operating Fund Unrestricted Operating Fund RevenueRevenue

04-05 Budget vs. 04-05 Estimate vs. 05-06 04-05 Budget vs. 04-05 Estimate vs. 05-06 ProjectionProjection

42


Unrestricted Operating Fund Unrestricted Operating Fund ExpendituresExpenditures

04-05 Budget vs. 04-05 Estimate vs. 05-06 04-05 Budget vs. 04-05 Estimate vs. 05-06 ProjectionProjection

43


Moody’s Investors ServiceMoody’s Investors ServiceJCU Debt Rating Affirmation – JCU Debt Rating Affirmation –

12/13/0412/13/04

Affirms A2 Debt Rating – Outlook is Affirms A2 Debt Rating – Outlook is StableStable

Credit StrengthsCredit Strengths Established history of operating surpluses and Established history of operating surpluses and

healthy debt service coverage (average 2.2x)healthy debt service coverage (average 2.2x) Liquid financial resource base ($99.0 million Liquid financial resource base ($99.0 million

in unrestricted resourcesin unrestricted resources Strong Jesuit market reputationStrong Jesuit market reputation

Credit ChallengesCredit Challenges Competitive market for students in Ohio (89% Competitive market for students in Ohio (89%

selectivity)selectivity) Reliance on tuition revenue (74%)Reliance on tuition revenue (74%) Expanding geographic draw of studentsExpanding geographic draw of students

44


Moody’s Investors ServiceMoody’s Investors ServiceJCU Debt Rating Affirmation – JCU Debt Rating Affirmation –

12/13/0412/13/04

What could change the rating – UPWhat could change the rating – UP A markedly enhanced student demand A markedly enhanced student demand

profile, represented by stable enrollments, profile, represented by stable enrollments, improved selectivity and yield rates, and improved selectivity and yield rates, and growing net tuition per student.growing net tuition per student.

Ability of University to fund future capital Ability of University to fund future capital needs through gifts rather than debt needs through gifts rather than debt

What could change the rating - DOWNWhat could change the rating - DOWN A continuation of declining enrollment, A continuation of declining enrollment,

especially if accompanied by pressure on especially if accompanied by pressure on operating marginsoperating margins

Substantial additional borrowing, Substantial additional borrowing, especially without a stabilized enrollmentespecially without a stabilized enrollment

45


Center for Science and TechnologyCenter for Science and TechnologyCash Flow Projection - CumulativeCash Flow Projection - Cumulative

$40.

2

$42.

2 $67.

0

$41.

6

$46.

7 $67.

0

$41.

6

$48.

9 $67.

0

$41.

6

$55.

0

$67.

0

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$M

illions

2004 2005 2006 2007+


Cash Received* Gift Pledges Construction Costs

$6.1 in

* As of 10/31/04

Bequests

46


Shula StadiumShula StadiumCash Flow Projection - CumulativeCash Flow Projection - Cumulative

$2.6

$2.8

$11.

0

$2.7

$3.3

$11.

0

$2.7

$3.9

$11.

0

$2.7 $4

.5

$11.

0

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$M

illions

2004 2005 2006 2007+


Cash Received* Gift Pledges Construction Costs

$0.6 in

* As of 10/31/04

Bequests

47


Q & AQ & A

john carroll university board of directors presentation vice president for finance and...

Documents

fund budget

reality annual fund

reality tuition surplus

fund h

budget q

average faculty salary

ranking statistics

revenues net of aidcurrent