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Financial Review Year Ended June 30, 2014
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Plante/MoranAudit
Results of the AuditPresented to the Finance and Audit Committee on October 6• Unmodified opinion which is the highest you can receive• There were no significant adjustments proposed by Plante/Moran• There were no significant disagreements with management on
financial accounting and reporting matters• Management cooperated completely and allowed complete access
to the books and records
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Key IndicatorsBalance Sheet• Asset growth• Net Position growth• Cash and Cash Equivalent growth• Investment growth• Days of Cash and Investments on Hand• Long Term Debt reduction
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FY 2014 Results
Balance Sheet FY2014 FY2013
Increase (Decrease
)
Net Assets 1,149,308 1,150,600 -1,292
Net Position Growth 675,285 650,549 24,736
Cash and Cash Equivalents 66,757 66,131 626Long Term Investments
University 190,175 186,129 4,046
Foundation 232,179 193,136 39,043
Days of Cash and Investments on Hand
Without Foundation 111 110 1
With Foundation 212 194 18
Long Term Debt 316,466 332,549 -16,083
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SummaryBalance SheetPositives• Net position grew $24.7 million as a result of a reduction in non-
current liabilities• Foundation long-term investments increased $39.0 million• Days Cash and Investments(including Foundation) increased 18
days• Long Term Debt decreased $16.0 millionNeutral• Cash and Cash Equivalents remained nearly the same.• University Investments remained nearly the same.Negatives• Net assets decreased $1.3 million
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Key IndicatorsIncome Statement• Operating Revenue growth• Operating Expense growth• State Share of Instruction growth• Income before Investment Income, Gifts and Capital
Appropriations• Investment Income growth• Gifts/Capital Appropriations growth
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FY2014 Results
Income Statement FY2014 FY2013Increase
(Decrease)
Operating Revenue Growth 688,878 690,232 -1,354
State Share of Instruction 103,357 104,451 -1,094
Operating Expense 843,684 838,082 5,602
Income before Investment Income and gifts
and Capital Appropriations -31,243 -34,839 3,596
Investment Income 40,672 31,652 9,020
Gifts/Capital Appropriations 15,366 12,479 2,887
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SummaryIncome StatementPositives• Investment income increased $9.0 million• Income before Investments, Gifts, and Capital Appropriations
increased $3.6 million• Gifts and Capital Appropriations increased $2.9 millionNegatives• Operating Revenue decreased $1.1 million• SSI decreased $1.1 million• Operating Expense increased $5.6 million, however that only
equates to 0.7%.
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Key IndicatorsCash Flow• Fully Funded Depreciation• Positive increase in Cash and Cash Equivalents
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FY2014 ResultsCash Flow FY2014 FY2013
Increase (Decreas
e)Fully funded depreciation
Capital Purchases 54,897 80,830 -25,933Depreciation 56,596 53,829 2,767Difference -1,699 27,001 -28,700
Net Cash from operating activities and non-capital financing activitiesNet cash used in operating activities -100,365 -84,713 -15,652Net cash provided by non-capital financing activities 143,968 147,924 -3,956 Total 43,603 63,211 -19,608
Net Cash from operating activities as a percent of operating revenue and SSI 5.50% 7.95% -2.45%
Cash flows from capital and related financing activities -71,391 -73,052 1,661
Cash flow from investing activities 28,414 13,193 15,221
Total change in cash and cash equivalents 626 3,352 -2,726
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SummaryCash FlowPositives• Cash Flow from Investing Activities increased $15.2 millionNeutral• Depreciation and Capital Purchases were relatively equal for the
yearNegative• Net Cash from Operating Activities declined $19.6 million• Net Change in Cash and Cash Equivalents was $27.8 less than
Cash from Investing Activities.
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FY 2015 Budget
Notes: • The UT FY2015 Budget does not include all funds of the University. It excludes UTP,
Malpractice Captive and some smaller funds. • The FY 2014 actual includes all funds of the University, thus the FY budget to FY
actual comparison is not the complete picture.
Income Statement FY 2015 Budget FY 2014
Actual Difference
Operating Revenue Growth 669,723 688,878 -19,155
State Share of Instruction 113,678 103,357 10,321
Operating Expense 808,117 843,684 -35,567
Income before Investment Income and gifts 0
and Capital Appropriations -39,013 -31,243 -7,770
Investment Income 4,800 40,672 -35,872
Gifts/Capital Appropriations 19,267 15,366 3,901
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SummaryIncome StatementPositives• SSI is budgeted to increase $10.3 million• Gifts and Capital Appropriations is budgeted to increase $3.9
millionNegatives• Investment income is budgeted at $4 million which represents a
return of 2.5%• Income before Investment Income, Gifts and Capital
Appropriations is budgeted at $(39 million ) which is a budgeted decrease of $7.7 million
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FY 2015 BudgetCash Flow
FY 2015 Budget
FY 2014Actual Difference
Fully funded depreciationCapital Purchases 29,800 54,897 -25,097Depreciation 58,596 56,596 2,000Funded(unfunded) depreciation -28,796 -1,699 -27,097
Net Cash from operating activities and non-capital financing activitiesNet cash used in operating activities -79,798 -100,365 20,567Net cash provided by non-capital financing activities 121,145 143,968 -22,823
Total 41,347 43,603 -2,256
Net Cash from operating activities as a percent of operating revenue and SSI 5.22% 5.50% -0.28%
Cash flows from capital and related financing activities -46,017 -71,391 -25,374
Cash flow from investing activities 4,800 28,414 -23,6142.52% 15.27%
Total change in cash and cash equivalents 130 626 -496
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SummaryCash FlowPositives• Net cash used in Operating Activities is budgeted to improve by
$20.5 millionNeutral• Net cash from Operating Activities and Non Capital Financing
Activities is budgeted to remain relatively constant.• The budgeted change in Cash and Cash Equivalents will remain
constant.Negatives• Our capital purchases are budgeted to be $28.8 million less than
depreciation. (We are budgeted to reinvest in our capital less than we are depreciating our capital)
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ConclusionsOur financial position continued to improve through 2014 as indicated in $25.5 million improvement in Net position, primarily as a result of $40.6 million in investment earnings and a $16.1 million reduction in Long Term Debt.
We face challenges moving forward in 2015 and beyond:• In 2015 our budgeted capital purchases are $28.8 million less than
depreciation• The Net Cash from Operating Activities did not cover our Capital or
Related Financing Activities. The shortfall was $27.8 million in FY14.
We must continue to grow our Net Position and we must commit to funding depreciation and reducing the shortfall in our Net Cash from Operating Activities.