Transcript Financial Overview

Orientation for
New Advisory Board Members
WPI Financial Overview
October 23, 2008
Presented by
Jeffrey Solomon, Executive Vice President/CFO
1
The FY09 Budget: Sources of Revenue
Undergraduate tuition & fees
Less aid funded by operations
Less aid funded by endowment/restricted gifts
Net undergraduate tuition & fees
Net graduate tuition
Summer session tuition
Subtotal net tuition & fees
$111.7M
($38.4M)
($5.1M)
$68.2M
8.7M
2.5M
$79.4M
55%
7%
2%
64%
Endowment/investment income
Auxiliary operations
Corporate/professional education
Indirect cost recovery
Unrestricted gifts
Other revenue
Total revenue
17.5M
16.4 M
5.0 M
3.1 M
2.6 M
1.2 M
$125.2 M
14%
13%
4%
2%
2%
1%
100%
2
Price of a WPI Education
Tuition
Fees
Room & Board
Total
Percent Change
FY05
FY06
FY07
FY08
FY09
$29,550
$30,990
$32,818
$34,300
$35,850
$180
$400
$500
$530
$540
$9,164
$9,460
$9,960
$10,410
$10,880
$38,894
$40,850
$43,278
$45,240
$47,270
5.0%
5.9%
4.5%
4.5%
3
Tuition Discount
Impact of new enrollment management strategies has driven decline in tuition discounting
while enrollment continues to grow.
Freshmen
All Students
4
Research Award Volume (In Millions)
$14.6 M
$12.1 M
5
Corporate & Professional Education
6
Endowment-Market Value History
In Millions
7
Endowment-Performance History
8
Endowment-Market Value Comparison
In Millions
49
Tufts
$1,452,058
69
BU
$1,101,386
92
RPI
$812,996
108
Northeastern
$679,926
114
RIT
$656,218
163
WPI
$404,745
For private institutions to which a high number of WPI students apply for admittance.
Values as of June 30, 2007 per NACUBO.
9
Endowment-Asset Allocation
Fixed
Income
12%
Real Assets
18%
Fixed
Income
17%
Public Equity
37%
Real
Assets
8%
Public Equity
46%
Hedge Funds
21%
Hedge Funds
25%
Private
Equity
8%
Private
Equity
8%
10
The FY09 Budget: Uses of Funds
Salaries & wages
Health insurance
Other benefits
Subtotal compensation
Other operating expenses
Debt service/depreciation
Utilities
Contingency
Total
$60.1M
4.6M
11.0M
$75.7M
48%
4%
9%
61%
27.9M 22%
13.1M 11%
6.7M
5%
1.8M
1%
$125.2M 100%
11
Debt Outstanding
(In Millions)
12
Change in Net Assets from Operating Activities
(In Thousands)
13
Expendable Net Assets
(In Millions)
14
Significant Financial Ratios
Significant Ratio
& Definition
WPI
Actual
FY2000
WPI
Actual
FY2004
WPI
Actual
FY2006
WPI
Actual
FY2007
WPI
Actual
FY2008
Moody’s
Large “A”
FY2007
1. Expendable Financial Resources
to Debt (Measures availability of
expendable net assets to cover
long term debt)
5.54
3.19
2.64
2.31
2.18
1.63
2. Expendable Financial Resources
to Operations (Measures amount
of time institution can cover
expenses without relying on
additional net assets from
operations)
3.65
2.23
2.45
2.73
2.42
1.07
3. Maximum Annual Debt Service to
Operations (Measures debt
affordability & other flexibility
within operating budget)
5.8%
8.0%
8.0%
7.5%
6.9%
5.8%
4. Operating Margin
(Indicates excess margin by which
revenues cover operating
expenses)
1.3%
-4.9%
3.3%
1.2%
0.6%
5.2%
15
Major Strategic Planning Goals
For FY 2009 – FY 2015
• Promote WPI Plan and enhance quality of academic programs
(Goals 1 & 2)
• Strengthen support for research & graduate education (Goal 3)
• Develop, renovate & adequately maintain campus facilities to
support academic and campus life needs – refer to approved
seven-year major capital plan (Goals 4 & 5)
• Promote WPI as a national university (Goal 6)
• Develop non-traditional sources of revenue as a means of
strengthening WPI financially & keeping it affordable (Goal 7)
• Adequately fund capital campaign & improve alumni relations
(Goal 8)
16
Approved Seven-Year Major Capital Plan
In Priority Order ($ in Thousands)
17