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S A N TA C L A R A U N I V E R S I T Y

S A N TA C L A R A U N I V E R S I T Y

S A N TA C L A R A U N I V E R S I T Y

WHITE ON PMS 201 S A N TA C L A R A U N I V E R S I T Y

S A N TA C L A R A U N I V E R S I T Y

S A N TA C L A R A U N I V E R S I T Y

Operating Financial Statements Annual Report Fiscal Year 2015

Strategically Led. Academically Integrated. Fiscally Sound.

Robust Results, Driven by Student Demand Santa Clara University (SCU) concluded its Fiscal Year 2015 with both impressive student demand and equally as impressive operational and fiscal output.

For the fiscal year ending June 30, 2015, student engagement in academic programs continued a heritage of embracing vibrant integrated curricula, challenging academic standards, and dedication to holistic learning.

Debuting this year, the Santa Clara 2020 Strategic Plan provides an innovative and clear directional compass for the institution. The Plan is also a consistent source of guidance to academics and administrators regarding decision-making at all levels of the organization.

Innovative policy decisions made by the Board of Trustees ensure that SCU maintains its path toward consistently sound financial outcomes.

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High Rankings by Influential Sources

U.S. News & World Report ranked Santa Clara University #2 in Regional Universities

(West), in the 2015 U.S. News Best Colleges. Also noteworthy, the School of

Engineering placed #12 among Master’s degree-level institutions. PayScale ranked

the SCU Leavey Business School #4 in “Return on Investment.” And lastly, The

Princeton Review ranked SCU 19th in its “Top 50 Green Colleges” list.

Gifts That Ignite Transformation

The University received several extraordinary and transformational gifts in FY2015

that support our people and programs. First, Phil and Peggy Holland donated $10 million to support entrepreneurial education at SCU. Next, Howard and Alida

Charney donated $10 million to support the construction of the new Law School

building. And Jeff and Karen Miller graciously donated $25 million to strengthen the

Miller Center for Social Entrepreneurship.

Fundraising in FY2015 resulted in total gifts of $83.1 million, of which $29.8 was

cash. The University is grateful for another year of generous and record-setting

external support.

Currently, the University is in the silent phase of “SCU Momentum,” an ambitious

fund-raising campaign, the proceeds from which will help us to implement and

achieve the groundbreaking strategies outlined in Santa Clara 2020.

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UNDERGRADUATETUITION

GRADUATETUITION

STUDENTFEES

ENDOWMENTINCOME

AUXILIARIES ANNUALGIFTS

OTHER

$0

$50

$100

$150

$200

$250

56%

19%

2%

7%9%

3% 4%

Operating Financial Results

The FY2015 financial statements represent the

operational activities of Santa Clara University and are

consistent with the approved budget for the fiscal year.

Annual net tuition and fees continued to increase as

outlined in Chart 1, reflecting the University’s student

recruiting efforts, approved rate increases, and strong

undergraduate retention.

From Fall 2013 to Fall 2014, SCU’s undergraduate

enrollment grew modestly from 5,235 to 5,237 full-

time equivalents. Over the same period, total graduate

and Law School enrollment grew from 2,799 to 3,280,

an increase of 17%. Net tuition and fees (tuition and

fees less student financial aid) represented 71% ($238

million) of SCU’s operating revenue in FY2015 — as

compared to 69% ($229 million) in FY2014.

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TUITION& FEES

FY 11 FY 12 FY 13 FY 14 FY 15

FINANCIALAID

NET

$270.7

-$62.9

$207.8

$280.7

-$68.8

$211.9

$288.5

-$73.5

$215

$308.7

-$80

$228.7

$322.2

-$83.6

$238.6

NET TUITION AND FEES($ MILLIONS)

FY2015 SOURCES OF REVENUE($ MILLIONS)

Source: Management Report

Chart 1

Chart 2

FY 11

Tuition & Fees

Operating Expense

$0

$100

$200

$300

$400

FY 12 FY 13 FY 14 FY 15

The University continues to invest in instruction

and academic support, which totaled $169 million

in FY2015, compared to $165 million in FY2014.

Personnel total compensation was the major driver of

expenditures excluding financial aid. Compensation,

including salaries and benefits, accounted for 60% of

expenditures, net of financial aid. (See Chart 3)

As is SCU’s tradition, the University maintained its

focus on the cost of education, by minimizing expenses

for students and families wherever possible. Chart 4

outlines SCU’s year-over-year tuition and fees versus

operating expenses. The University closely manages

its costs in order to limit increases in tuition, room, and

board, while still actively investing in programs that

support the Strategic Plan and SCU’s Jesuit values.

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FACULTYSALARIES

STAFFSALARIES

BENEFITS OPERATINGEXPENSES

STUDENTWAGES

LIBRARYACQUISITIONS

CAPITALSPENDING

DEBTPAYMENT

FINANCIALAID

$0

$20

$40

$60

$80

FY2015 EXPENDITURE BREAKOUT($ MILLIONS)

GROSS TUITION & FEES VS ANNUAL OPERATING EXPENDITURES

($ MILLIONS)

Chart 3

Chart 4

The University’s current first-year admission rate

shows that SCU is more selective in terms of

admission criteria, as compared to our rate 10 years

ago, as depicted in Chart 5.

Another indication of increased student academic

quality is this year’s median first-year SAT score of

1,300, compared to scores of the past 10 years, as

shown in Chart 6.

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FIRST-YEAR ADMISSION RATE

FIRST-YEAR MEDIAN SAT

BASED ON FALL ENROLLMENT

BASED ON FALL ENROLLMENT

Chart 5

Chart 6

2005 2006 2007 2008 2009 2010 2013 201420122011

0%

10%

20%

30%

40%

50%

60%

70%

2005 2006 2007 2008 2009 2010 2013 201420122011

1160

1180

1200

1220

1240

1260

1280

1300

Endowments

Through June 30, 2015, SCU’s 1-year, 5-year, and 10-year average

annualized rate of return on endowment (net of fees) was 4.2%,

10.2% and 6.6%, respectively, which exceeded peer universities

and investment policy guidelines. Chart 7 presents the rate of return

for the past 10 years.

The market value of endowment investments was $885 million

on June 30, 2015, up from $875 million in 2014. New gifts to the

endowment were $12 million in FY2015. The spending formula

resulted in $29 million of endowment support for faculty, student

scholarships, and academic programs this fiscal year.

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ANNUAL ENDOWMENT RETURN PERFORMANCEChart 7

2006

0%

10%

20%

30%

-30%

-20%

-10%

2007 2008 2009 2010 2011 2012 2013 2014 2015

SCU Endowment

Policy Portfolio

Global 60/40

ACWI

Financial Position

SCU’s net assets have increased significantly over the

past 10 years, reaching a total of $1.5 billion in FY2015,

up from $935 million in FY2006, as depicted in Chart 8.

SCU continues its investment in facilities to support the

University’s academic programs and growth plans. In

FY2015, the University completed the following:

• a major renovation of Walsh and McLaughlin Residence Halls; • renovation and reconstruction of Stevens’ Stadium; • construction of the Stevens’ Soccer Training Facility; • creation of Alviso Mall between Franklin and Santa Clara Streets; • improvements to the softball stadium; and • several major infrastructure projects.

In total, the University spent $60 million on capital

projects in FY2015. Chart 9 outlines the growing

investment the University has made in facilities and

equipment over the past 10 years.

SCU’s total outstanding debt as of June 30, 2015

— including capitalized leases — was $249 million,

an increase from $225 million on June 30, 2014. The

increase was in large part due to the capitalized lease

on Guadalupe Hall, which now provides a facility for our

expanding graduate programs. As a result, debt as a

percentage of net assets increased to 16.7% in FY2015

from 15.6% in FY2014. (See Chart 10)

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TOTAL NET ASSETS($ THOUSANDS)

NET PLANT ASSETS($ THOUSANDS)

DEBT/NET ASSETS

Chart 8

Chart 9

Chart 10

20152006 2007 2008 2009 2010 2013 201420122011

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

20152006 2007 2008 2009 2010 2013 201420122011

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

20152006 2007 2008 2009 2010 2013 201420122011

0%

5%

10%

15%

20%

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Santa Clara University’s financial health continues to be solid and strong. In August 2015, Moody’s Investor Services concurred with this statement by reaffirming the University’s Aa3 bond rating. University leadership is committed to building on these notable results in FY2016.

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