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The University of Texas at San Antonio

The University of Texas at San Antonio. FY10 Annual Financial Report Highlights January, 2011. 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

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The University of Texas at San Antonio

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  1. The University of Texas at San Antonio FY10 Annual Financial Report Highlights January, 2011

  2. 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. 2

  3. The University of Texas at San Antonio – Balance Sheet ($ in millions) UTSA FY10Balance 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. • Due from other funds and due to other funds increased by $11.6M due to liability and receivable that was set up for the North Paseo construction project. • Due from System Administration decreased by $16M due to a decrease in debt financed CIP projects. • Investments increased by $39.5Mdue to increases in fair market value. • Funds held by System Administration increased by $13.6M due to increases in FMV of endowed assets and additional gifts to the endowment fund. • Net Capital / Intangible Assets increased by $6.7Mdue to the construction of the Combined Science Facility and other renovations offset by increases in accumulated depreciation. 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 by $6.7M due to construction projects which was offset by increases in accumulated depreciation. • Restricted and Unrestricted Net Assets increased by $17.7M and $16.2M respectively due to increases in FMV of investments. Additional increases were due to funding for North Paseo building.

  4. The Statement of Revenue, Expenses, and Changes in Net Assets (SRECNA) . This statement is called the “Operating Statement” as it reports the results of operations for the year. 2010 2009 UTSA Operating Revenues ($ in millions) UTSA Operating Revenues ($ in millions) 2007 2006 170.5 161.5 Student Tuition and Fees Student Tuition and Fees Net of Discounts - Net of Discounts 143.57 118.7 64.7 Sponsored Programs Sponsored Programs 72.8 73.2 64.9 8.9 Sales and Services of Educational Activities Sales and Services of Educational Activities 6.7 9.6 6.0 Auxiliary Enterprises Auxiliary Enterprises 15.1 21.7 14.2 24.0 Other Other 2.5 2.0 3.2 2.6 • Tuition and Fees increased by $9M (6%). • Auxiliary Enterprises increased by $2.3M (11%) due to increases in housing, food service and parking revenue. • Operating Loss does not include State Appropriations and Pell revenue. Operating expenses outpaced operating revenues causing an increase of $28.2M (22%). • State Appropriations increased by $5.9M (5%) due to additional funds appropriated. • Federal Non-Exchange Sponsored Programs and Non-Exchange Pass Throughs increased due to increase in Pell Awards of $15.2M, ARRA funds of $5.1M and TRIP funds of $1.4M. • Net Inc. (Dec.) in Fair Value of Investments increased by $45.9M due to a more positive market. • Income (Loss) Before Other Revenues increased $51.9M (2,359%)due to increases in FMV of investments and investment income. • Additions to Permanent Endowments increased by $8.7M predominately due to McKinney Scholarship gift. • Mandatory Transfers represent amounts transferred to System to pay debt service and Non-Mandatory Transfers represent anticipated bond proceeds transferred to UTSA to fund construction projects. • As on the previous exhibit, Change in Net Assets was $40.6M. This is predominately due to increases in FMV of investments and construction projects. Total Operating Revenues Total Operating Revenues 240.6 215.3 270.7 259.7 Total Operating Expenses Total Operating Expenses 315.6 293.8 388.8 428.0 (157.3) (129.1) Operating Loss Operating Loss (75.0) Non-Operating Revenues (Expenses): Nonoperating Revenues (Expenses): State Appropriations 98.1 97.1 State Appropriations 121.4 115.5 Federal Non-Exchange Sponsored Programs and Non-Exchange Pass Through Gift Contributions 3.8 3.5 50.4 28.7 Net Investment Income (Loss) 10.9 6.1 Gift Contributions 8.8 6.5 Net Inc. (Dec.) in Fair Value of Investments 12.4 4.1 Net Investment Income (Loss) 8.7 4.4 Gain/(Loss) on State of Capital Assets (0.1) Net Inc. (Dec.) in Fair Value of Investments 17.7 (28.2) Other Nonoperating Revenues/Expenses 0.0 0.0 Income (Loss) Before Other Revenues, Expenses, Gains or Losses 49.7 (2.2) Income (Loss) Before Other Revenues, Expenses, Gains or Losses 50.1 32.2 Gifts and Sponsored Programs .3 .3 Gifts and Sponsored Programs 0.0 0.6 10.2 1.5 Additions to Permanent Endowments Additions to Permanent Endowments 4.0 4.9 Re-Class From (To) Institutions 13.0 38.9 Reclass From (To) Other Institutions (48.7) 19.8 Mandatory Transfers (31.5) (31.8) Mandatory Transfers - Comp & Sys Admin - Debt Svc (19.7) (16.6) Non-Mandatory Transfers 1.2 8.5 Nonmandatory Transfers - Comp & Sys Admin 141.9 28.6 Transfers From (To) Other State entities (2.3) (2.2) Transfers From (To) Other State entities (1.4) Change in Net Assets 126.2 68.7 Change in Net Assets 13.0 40.6 Net Assets, Beginning of the Year 635.1 566.4 Net Assets, Beginning of the Year 883.7 870.7 Net Assets, End of the Year 924.3 883.7 Net Assets, End of the Year 761.3 635.1

  5. The University of Texas at San AntonioFY10 – Statement of Cash Flows • Cash from operations includes tuition and fees and sponsored programs. Payments for operations includes salaries, scholarship/fellowship and supplies. • Noncapital financing activities include state appropriations and gifts. • Capital and related financing activities include purchase of equipment and construction of buildings. • Investing Activities include the purchase/sale of investments, interest and investment income and endowment income distribution. • Cash & Cash Equivalents decreased by $25Mdue to cash expended for operations offset by cash provided by state appropriations and gifts. 5

  6. UTSA FY 2010 Sources of Revenue by Category Operating Sources by Category ($ in Millions) 6

  7. UTSA FY10 Sources of Revenue Operating Sources ($ in Millions) 7

  8. UTSA FY10 Uses of Funds Operating Uses ($ in Millions) 8

  9. Reconciliation of Research Expenditures to AFR Operating Expenses - Research Reconciliation:FY 10FY09 Statement of Revenues, Expenses and 38,492,053 35,929,725 Changes in Net Assets- Research Expenses Facilities and Administration (F&A) 6,870,352 6,356,539 Capital Outlay 3,289,557 4,235,223 48,651,962 46,521,487 *Total Research Expenditures * As Reported on THECB Research Expenditure Report 9

  10. UTSA FY10 Analysis of Financial ConditionComposite 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 1.3 primarily due to the increase in the return on net assets ratio. The increase was predominately driven by the net increase in the fair value of investments of $17.7M as compared to a decrease in prior year of $28.2M. 10

  11. UTSA FY10 Analysis of Financial ConditionOperating 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. • UTSA’s ratio remained unchanged at 4.2 months due to increase in unrestricted net assets as a result of increases in FMV of investments. In addition, operating expenses have increased by $42M. • UT System satisfactory rating is at two months or above and should be stable or improve. 2.0 11

  12. UTSA FY10 Analysis of Financial ConditionDebt 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. • The debt service coverage increased from 2.1 in 2009 to 2.4 and exceeds UT System’s benchmark of greater than 1.8. This means that our net resources are 2.4 times what we are currently expending for debt payments. The ratio increased as a result of an increase in operating revenue and a decrease in debt service payments. 12

  13. UTSA FY10 Analysis of Financial ConditionExpendable 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 increased slightly due to an increase in restricted expendable net assets associated with North Paseo building and increase in unrestricted net assets attributable to the net increase in fair value of investments. • This ratio shows that more of our resources are going towards paying off debt. UT System’s Satisfactory benchmark is 0.8x or greater. .8 13

  14. UTSA FY10 Analysis of Financial ConditionDebt 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 decreased by .8% as a result of increases in total operating expenses and a small decrease in debt service payments of $.3M. The institution remains heavily reliant on debt to fund cost. • UT System’s Satisfactory benchmark is less than 5.0%. 5.0% 14

  15. UTSA FY10 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 decreased slightly from 4.0% for FY 2009 to 3.7% for 2010. The relatively stable operating margin is attributable to consistent growth in both total operating revenues of $42.1M and total operating expenses of $42.0M. 15

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