Transcript The University of Texas at San Antonio FY 07 Annual Financial Report Highlights January, 2008

The University of Texas at
San Antonio
FY 07 Annual Financial Report
Highlights
January, 2008
Annual Financial Report
Highlights
The Annual Financial Report (AFR) is made up of three primary
statements with many supporting schedules.
1. Balance Sheet – Explains what we own, our obligations and
what is available.
2. Statement of Revenues, Expenses and Changes in Net Assets
(SRECNA) – Shows the results of operations for the year.
3. Statement of Cash Flows – Shows what revenue came in,
what was expended and what is left.
Review pie charts and ratios that help explain our financial condition
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UTSA FY 07
Balance Sheet
The Balance Sheet has three sections:
Assets: What we own - Items that are available to meet
operating costs of the Institution, plus
buildings, land, equipment, etc.

Investments increased by $53.5M due to
additions, investment income and appreciation.

Capital Assets increased by $106.2M
predominantly due to the construction of Rec
Center II, Laurel Village, BSE – II, Thermal
Energy Plant and University Center – III.
Liabilities: Our obligations -Amounts due and payable
within one year or beyond.
Net Assets: What’s available - Capital Assets net of
depreciation, endowment funds and other
unrestricted funds.

Amount invested in Capital Assets increased
predominately by $106.2M due to construction.

Unrestricted Net Assets grew by $27.0M due to
increase in Tuition & Fees.
The University of Texas
at San Antonio Balance Sheet
($ in millions)
2007
2006
Assets:
Current Assets
Noncurrent Investments
Other Noncurrent Assets
Capital Assets, net
Total Assets
158.6
193.4
2.4
550.3
904.7
177.9
139.9
2.9
444.1
764.8
(19.3)
53.5
(0.5)
106.2
139.9
-11%
38%
-17%
24%
18%
Liabilities:
Current Liabilities
Noncurrent Liabilities
Total Liabilities
141.1
2.3
143.4
127.5
2.2
129.7
13.6
0.1
13.7
11%
5%
11%
Net Assets
Invested in Capital Assets, Net of
Related Debt
Restricted
Unrestricted
Net Assets
550.3
77.5
133.5
761.3
444.1
84.5
106.5
635.1
106.2
(7.0)
27.0
126.2
24%
-8%
25%
20%
Variance % Change
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The Statement of Revenue, Expenses, and
UTSA Operating Revenues ($ in millions)
Changes in Net Assets (SRECNA) . This
Student Tuition and Fees - Net of Discounts
statement is called the “Operating Statement” Sponsored Programs
as it reports the results of operations for the Sales and Services of Educational Activities
year.
Auxiliary Enterprises

Tuition and Fees increased by $24.8M.

Operating loss is calculated before state
appropriations. Tuition and fees increased
more than operating expenses causing a
slight change.

The increase is predominantly due to a
$8.3M increase in FV of investments and
increase in net investment income of $4.8M.

Mandatory Transfers represent amounts
transferred to System Admin to pay debt
service, and nonmandatory transfers
represent anticipated bond proceeds
transferred to UTSA to fund construction
projects.

As on the previous exhibit, Change in Net
Assets was $126.2M. In the current year
operations, this is most dramatically
impacted by the transfers from system of
bond proceeds for capital improvement
projects.
Other
2007
2007
143.5
143.5
772.8
72.8
6.7
6.7
15.1
15.1
2006
2006
118.7
118.7
73.
26.0
14.
23.2
215.3
Total Operating Expenses
2.5
2.5
240.6
240.6
315.6
315.6
Operating Loss
(75.0)
(75.0)
(78.5)
98.1
98.1
3.8
3.8
10.8
10.9
97.1
97.
13.5
3.5
6.0
6.1
12.4
12.4
4.1
4.1
Total Operating Revenues
293.8
Nonoperating Revenues (Expenses):
State Appropriations
Gift Contributions
Net Investment Income (Loss)
Net Inc. (Dec.) in Fair Value of Investments
Gain/(Loss)
onBefore
State of
Capital
Assets
(0.1)
Income
(Loss)
Other
Revenues,
50.1
Other Nonoperatin
Revenues/Expenses
0.0
Expenses,
Gains or Losses
g
Income
(Loss)
Before
Other
Revenues,
Expenses,
Gains
Gifts and Sponsored Programs
0.0
or Losses
50.1
Additions to Permanent Endowments
4.0
Gifts and Sponsored Programs
0.0
Reclass From (To) Other Institutions
(48.7)
Additions to Permanent Endowments
4.0
Mandatory
Transfers
(19.7)
Reclass From (To) Other Institutions
(48.7)
Mandatory Transfers
- Comp & Sys
-Debt Svc141.9
(19.7)
Nonmandatory
Transfers
Admin
Nonmandatory
Transfers
- Comp
& Sys Admin
141.9
Transfers
From (To)
Other State
entities
(1.4)
32.2
0.0
0.6
32.
4.9
20.6
19.8
4.9
(16.6)
19.8
(1.4)
(16.6)
28.6
28.
(0.8)
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Change in
in Net
Net Assets
Assets
Change
Net Assets, Beginning of the Year
Net Assets, Beginning of the Year
126.2
126.2
635.1
635.1
68.
68.7
7
566.4
566.4
Net Assets, End of the Year
761.3
761.3
635.1
635.1
Transfers From (To) Other State entities
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UTSA FY 07
Statement of Cash Flows





Cash from operations includes tuition
and fees and expenditures for
operations includes salaries,
depreciation, scholarship/fellowship
and supplies.
The University of Texas at San Antonio
Statement of Cash Flows
($ in millions)
2007
2006
Cash Flows
Cash received from operations
262.0
243.9
Noncapital financing activities include
State appropriations and Gifts.
Cash expended for operations
(301.1)
(287.2)
Net cash used in operating activities
(39.1)
(43.3)
Capital and related financing
activities include purchase of
equipment and construction of
buildings.
Net cash used by noncapital financing
activities
105.8
103.4
Net cash used in capital and related
financing activities
(38.4)
(25.2)
Investing Activities include the
purchase/sale of investments,
interest income and endowment
income distribution.
Net cash used by investing activities
(30.2)
(49.3)
Net increase in cash and cash
equivalents
(1.9)
(14.4)
Cash & cash equivalents, beginning of
the year
79.7
94.1
Cash & cash equivalents, end of year
77.8
79.7
Cash & Cash Equivalents decreased
slightly.
5
UTSA FY 2007 Sources of Revenue
by Category
Operating Sources by Category
($ in Millions)
Institutional
Resources
$42.1
12%
State of Texas
$107.6
30%
Federal Government
$60.1
17%
Student & Parent
$143.5
41%
6
UTSA FY 07 Sources of Revenue
Operating Sources
($ in Millions)
Sales & Services
$6.7
Private Gifts & Grants
2%
$6.4
2%
Net Auxiliary
Enterprises
$15.1
4%
State Appropriations
$97.0
27%
Local Government
Grants
$.5
0%
State Grants &
Contracts
$9.6
3%
Endowment & Interest
Income
$10.9
3%
Federal Grants &
Contracts
$60.1
17%
Other Income
$2.4
1%
Tuition & Fees
$143.5
41%
Research
Development Funds
$1.1
0%
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UTSA FY 07 Uses of Funds
Operating Uses
($ in Millions)
Academic Support
$25.7
Public Service
9%
$15.1
5%
Student Services
$24.5
8%
Institutional Support
$30.2
10%
Research
$25.2
8%
Operations &
Maintenance of Plant
$31.3
10%
Instruction
$98.9
34%
Other Expenses
$.02
0%
Capital Outlay
$6.8
2%
Scholarships &
Fellowships
$23.5
8%
Auxiliary Enterprises
$17.1
6%
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UTSA FY 07 Analysis of Financial Condition
Composite Financial Index



Composite Financial Index
measures the overall financial
health by combining four core
ratios into a single score: primary
reserve ratio, expendable
resources to debt ratio, return on
net assets ratio and the annual
operating margin ratio.
The CFI increased by .8
primarily due to increase in
interest earnings and
appreciation on investments, as
well as higher net operating
income.
6.0
4.4
4.0
3.1
3.1
2003
2004
3.7
3.6
2005
2006
2.0
0.0
2007
System’s benchmark is 3.0 or
greater.
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UTSA FY 07 Analysis of Financial Condition
Operating Expense Coverage Ratio



Measures an institution’s ability
to cover future operating
expenses with available year-end
balances. Ratio is expressed in
number of months coverage.
Increase from 4.2 months to 5.0
months is due to increase in
unrestricted net assets as a
result of increases in Tuition &
Fees attributable to enrollment
growth and rate increases.
6.0
5.0
4.0
3.0
2.0
1.0
0.0
5.0
2.3
2003
3.0
2004
3.6
2005
4.2
2006
2007
System Satisfactory rating is at
two months or above and should
be stable or improve.
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UTSA FY 07 Analysis of Financial Condition
Debt Service Coverage Ratio


This ratio measures the actual
margin of protection provided to
investors by annual operations.
Calculation is used by Moody’s
Investment Services, system-wide to
determine bond rating. This is
watched very closely so UT System
can maintain AAA bond rating.
Trend helps to determine if an
institution has assumed more debt
than it can afford to service.
4.0
2.9
3.0
3.1
2006
2007
2.2
2.0
1.8
1.0
0.0
2003

3.0
2004
2005
Our trend is growing exceeding UT
System’s benchmark of greater than
2.4. This means that our net
resources are 3.1 times what we are
currently expending for debt
payments. The ratio increased
slightly due to operating performance
off-set by increased debt service.
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UTSA FY 07 Analysis of Financial Condition
Expendable Resources to Debt Ratio



This ratio measures an
institution’s ability to fund
outstanding debt with existing net
asset balances should an
emergency occur.
UTSA’s debt ratio changed
slightly due to a decrease in
expendable net assets restricted
for capital projects as a result of
completion of capital
improvement projects.
1.2
1.0
0.7
0.8
0.7
0.7
0.6
0.4
0.0
2003
Restated
2004
2005
Restated
2006
2007
This ratio basically shows that
more and more of our resources
are going towards paying off
debt. System’s Satisfactory
benchmark is 0.7x or greater.
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UTSA FY07 Analysis of Financial Condition
Debt Burden Ratio



This ratio examines the
institution’s dependence on
borrowed funds and cost of
borrowing relative to overall
expenses.
UTSA’s debt burden ratio
increased as a result of a major
capital improvements program
resulting in increased debt
service payments. The institution
is heavily reliant on debt to fund
cost.
8.0%
6.8%
6.2%
6.0%
6.6%
5.7%
5.9%
2005
2006
4.0%
2.0%
0.0%
2003
2004
2007
System’s Satisfactory benchmark
is less than 4.3%.
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UTSA FY 07 AFR Summary

UTSA continues to receive a “Satisfactory”
rating from UT System as a result of a healthy
financial condition.

UTSA’s operating margin ratio of 8.4% is strong
but not sustainable; future expenditures are
expected to exceed revenue growth as new
positions are hired and needed infrastructure is
purchased to meet growth demands. We will
have to closely monitor our debt as we continue
to require additional facilities.
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