University of Louisville Foundation President’s Report

1. University of Louisville Foundation President’s Report Dr. James R. Ramsey University of Louisville December 19, 2011

2. 2011 Is Almost Over!

3. 2011 (Did Not Exactly Go According to Plan) • Expectations for good growth • Things we were not thinking about last year at this time • Earthquakes/floods • Fukushima Daiichi Plant • European implosion • US downgrade • Gadhafi, Mubarak & Berlusconi gone

4. Should We Still Be Worried? • Long term unemployed (up to 39.4 weeks mean) • Watching events in southern Europe • Youth unemployment • Underwater homeowners/current on mortgage • Stagnant incomes • Seniors living on savings • Policy uncertainty • Businesses cash • Healthcare • Immigration • Environment • Other regulation

5. We Know That Nationally Times Have Been Unprecedented US GDP

6. US Employment -

7. Kentucky has not been immune to those impacts Nonfarm employment in thousands Notes – 1 – Most people employed since January 2009 2 – Still 74,000 fewer people working today

8. State Policy Discussion • State General Fund Revenue (funds higher education – or is supposed to %

9. State Policy Discussion • Expenditures • Some History % • Structural Imbalance still exists • 2% cut FY12

10. Messages • Tough session/budget • UofL supports CPE request • M&O • Research money • “Bucks” • Performance • Funding 6 year capital plan

11. UofL It has been tough – real tough But moving forward

12. Solid Results – Over a Decade of Progress* *2011 data are considered preliminary pending final audit and reconciliation 10/11/2011

13. Solid Results – Over a Decade of Progress* *2011 data are considered preliminary pending final audit and reconciliation 10/11/2011

14. Solid Results – Over a Decade of Progress* *2011 data are considered preliminary pending final audit and reconciliation 10/11/2011

15. Seven Strategies for Success • Continuing re-engineering of processes and expense management • Enter consortium with other institutions to achieve greater leverage & efficiencies for prescription drug services • Reduce paper use, leverage technology • Energy management • Self insurance • Wash windows every other year

16. Seven Strategies for Success • Aggressively improving balance sheet management, with an emphasis on converting underperforming assets Churchill Downs Inc. to be first ShelbyHurst office tenant

17. Seven Strategies for Success • Increasing clinical income to support education and research i.e. The Merger

18. Seven Strategies for Success • Increasing contract research and commercialization income - Also license income other intellectual property

19. Seven Strategies for Success • Creating private sector partnerships Cardinal Towne

20. Seven Strategies for Success • Enhanced fund raising

21. Seven Strategies for Success • Being creative in expanding the research mission through innovative financing tools like the tax increment financing plan • HSC TIF • Belknap TIF

22. Role of ULF • Shelby Campus • KY Trailer • Nucleus • TIF (1) • TIF (2) • TIF (3) • Discretionary $ (LOC) • Change payout These are just a few

23. We have more to do!Thank you!