John Carroll UniversityJohn Carroll UniversityBoard of Directors PresentationBoard of Directors Presentation
Vice President for Vice President for Finance and Finance and
Administrative Administrative Services Services
Financial UpdateFinancial Update
December 14, December 14, 20042004
2
John Carroll John Carroll UniversityUniversity
PresentersPresenters
Jonathan Ivec – VP for Finance and Jonathan Ivec – VP for Finance and Administrative ServicesAdministrative Services
Richard Mausser – Executive Richard Mausser – Executive Director of Finance / ControllerDirector of Finance / Controller
3
John Carroll John Carroll UniversityUniversity
AgendaAgenda
03-04 Financial Statement Review03-04 Financial Statement Review Ratios, Trends and Ranking Ratios, Trends and Ranking
StatisticsStatistics 05-06 Budget05-06 Budget Q & A SessionQ & A Session
4
John Carroll John Carroll UniversityUniversity
03-04 Financial 03-04 Financial Statement Statement
ReviewReview
5
John Carroll John Carroll UniversityUniversity
Statements of Financial Position Statements of Financial Position - Assets- Assets
6
John Carroll John Carroll UniversityUniversity
Endowment Portfolio Market ValueEndowment Portfolio Market Value
$35.1$50.0 $52.1
$60.0$73.5
$98.0$118.0
$131.5$139.4$139.7
$132.4$122.4
$135.8
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
Millions
of
Dollars
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Fiscal Year Ending May 31,
Quasi Endowment True Endowment
7
John Carroll John Carroll UniversityUniversity
Major Capital Projects Major Capital Projects Costs and Funding Sources 1996-2004Costs and Funding Sources 1996-2004
In $Millions
$1.7 Grant
$2.1 Gifts$3.5 Debt$2.8 Plant
$0.7 Gifts
$5.1 Debt$7.7 Debt
$1.3 Debt
$11.0 Gifts/ Debt/ Plant
$1.1 Debt
$67.0Gifts
GrantsDebt
$3.1 Debt
$6.8 Gifts/ Plant
Breen Learning Cntr '97Educ. Dept. Remodel '97Jesuit Residence '98Bernet Remodel '99Dining Hall Remodel '99Locker Room '00Rodman Remodel '01Admin Bldg Remodel '02DeCarlo Cntr Remodel '03Dolan Hall Remodel '03Pacelli Hall Remodel '03Shula Stadium '04Dolan Science Center '04
Projects by Year Capitalized ($113.9 million total)
8
John Carroll John Carroll UniversityUniversity
Statements of Financial Position Statements of Financial Position – Liabilities And Net Assets– Liabilities And Net Assets
9
John Carroll John Carroll UniversityUniversity
Scheduled Long-Term DebtScheduled Long-Term Debt Principal Balances Principal Balances
$47.
4
$45.
2$3
5.4
$42.
8$3
5.4
$23.
9$3
2.4
$24.
1
$22.
9$3
2.4
$24.
1
$21.
8$3
2.4
$23.
1
$20.
7$3
2.4
$22.
1
$19.
5$3
2.4
$21.
0
$18.
3$3
2.4
$19.
9
$17.
0$3
2.4
$18.
8
$15.
6$3
2.4
$17.
6
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
$M
illions
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Fiscal Year Ending May 31,
Debt at 5/ 31/ 01 2001 Issue 2003 Issue Outside Properties
10
John Carroll John Carroll UniversityUniversity
Statements of Activities – Statements of Activities – Operating RevenuesOperating Revenues
11
John Carroll John Carroll UniversityUniversity
Total Operating Revenues (Net of Total Operating Revenues (Net of Aid)Aid)
Current Operating Fund - Budget vs. ActualCurrent Operating Fund - Budget vs. Actual
$60.
632
$62.
236
$65.
276
$66.
769
$70.
564
$69.
783
$75.
860
$73.
887
$78.
918
$76.
682
$80.
053
$77.
892
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
Mill
ions
of D
olla
rs
99-00 00-01 01-02 02-03 03-04 04-05
Fiscal Year (04-05 is Projected)
Budget Actual
12
John Carroll John Carroll UniversityUniversity
Full-time Undergraduate Full-time Undergraduate EnrollmentEnrollment
Fall Semester (end of third week)Fall Semester (end of third week)
3,3533,297 3,317 3,322
3,279 3,2793,185
3,000
3,100
3,200
3,300
3,400
3,500
Hea
dco
un
t
98-99 99-00 00-01 01-02 02-03 03-04 04-05*
Academic Year (*04-05 is end of 2nd week)
13
John Carroll John Carroll UniversityUniversity
Undergraduate Summer Undergraduate Summer EnrollmentEnrollment
Headcount Per YearHeadcount Per Year
1,004
863932
887819
641 607
400
500
600
700
800
900
1,000
1,100
He
ad
co
un
t
1998 1999 2000 2001 2002 2003 2004
Year
14
John Carroll John Carroll UniversityUniversity
Graduate School Credit HoursGraduate School Credit HoursFall and Spring SemestersFall and Spring Semesters
10,85510,572
10,379
9,621 9,6349,100
8,000
8,500
9,000
9,500
10,000
10,500
11,000
Cre
dit
Ho
urs
99-00 00-01 01-02 02-03 03-04 04-05*
Academic Year( * 04-05 projected based on historical data)
15
John Carroll John Carroll UniversityUniversity
Transfer StudentsTransfer StudentsPer Academic YearPer Academic Year
172178 167
155139
150
0
40
80
120
160
200
Nu
mb
er
of
Tra
ns
fer
Stu
de
nts
99-00 00-01 01-02 02-03 03-04 04-05*
Academic Year (*Projected)
16
John Carroll John Carroll UniversityUniversity
Students Studying AbroadStudents Studying Abroad(Fall and Spring Semesters)(Fall and Spring Semesters)
15
17
26
20
17
22
30
50
16
77
28
66
0
25
50
75
100
Nu
mb
er
of
Stu
de
nts
S
tud
yin
g A
bro
ad
99-00 00-01 01-02 02-03 03-04 04-05*
Academic Year (*Projected)
Fall Spring
17
John Carroll John Carroll UniversityUniversity
Financial Aid (Unfavorable) FavorableFinancial Aid (Unfavorable) Favorable to Budget to Budget
Undergraduate Unrestricted Non-repayable AidUndergraduate Unrestricted Non-repayable Aid
$0 $0
($96)
($410) ($274)
($797)
$1,024
-$1,250
-$1,000
-$750
-$500
-$250
$0
$250
$500
$750
$1,000
$1,250
Th
ou
sa
nd
s o
f D
oll
ars
98-99 99-00 00-01 01-02 02-03 03-04 04-05*
Fiscal Year (04-05 is projected)
857
834
833
792
843
859
734
Freshman Class Size
18
John Carroll John Carroll UniversityUniversity
Endowment Spending PolicyEndowment Spending Policy
$5
.08
5
$5
.92
6
$6
.56
3
$6
.92
5
$6
.89
7
$6
.67
3
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
Millio
ns
of
Do
lla
rs
98-99 99-00 00-01 01-02 02-03 03-04
Fiscal Year
19
John Carroll John Carroll UniversityUniversity
Average Interest Rates (Income)Average Interest Rates (Income)
5.0
3%
5.3
7%
6.1
8%
2.9
3%
1.7
8%
1.1
0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Pe
rce
nt
98-99 99-00 00-01 01-02 02-03 03-04
Fiscal Year
20
John Carroll John Carroll UniversityUniversity
Statements of Activities – Statements of Activities – Operating ExpensesOperating Expenses
21
John Carroll John Carroll UniversityUniversity
Total Operating ExpensesTotal Operating ExpensesCurrent Operating Fund - Budget vs. Current Operating Fund - Budget vs.
ActualActual
$60.
132
$59.
189
$64.
776
$62.
649
$70.
064
$68.
562
$75.
360
$73.
672
$78.
918
$76.
600
$80.
053
$78.
055
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
Mill
ions
of D
olla
rs
99-00 00-01 01-02 02-03 03-04 04-05
Fiscal Year (04-05 is Projected)
Budget Actual
22
John Carroll John Carroll UniversityUniversity
Depreciation ExpenseDepreciation Expense
$3
.51
9
$3
.44
6
$3
.79
8
$4
.35
5
$4
.99
3
$6
.15
5
$7
.00
0
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
Millio
ns
of
Do
lla
rs
98-99 99-00 00-01 01-02 02-03 03-04 04-05
Year (0405 is projected)
Shula StadiumDolan ScienceOutside PropertiesBase Depreciation
23
John Carroll John Carroll UniversityUniversity
Factors that had been Expected to Factors that had been Expected to Offset Increase in Depreciation Offset Increase in Depreciation
Expense Expense
Expectation – Tuition revenue operating surpluses Expectation – Tuition revenue operating surpluses would continuewould continue
Reality – Tuition surplus was completely eroded by Reality – Tuition surplus was completely eroded by declining enrollmentdeclining enrollment
Expectation – Dolan Center bridge financing, which Expectation – Dolan Center bridge financing, which had been built into budget, would be paid off by had been built into budget, would be paid off by campaigncampaign
Reality – Bridge financing has become permanent Reality – Bridge financing has become permanent financingfinancing
Expectation – Significant increase in annual fund Expectation – Significant increase in annual fund giving giving
Reality – Annual fund giving was largely diverted to Reality – Annual fund giving was largely diverted to the capital campaignthe capital campaign
24
John Carroll John Carroll UniversityUniversity
Operating SurplusOperating SurplusAccrual Basis of AccountingAccrual Basis of Accounting
$8.8
69$5
.350 $8
.723
$5.2
77
$11.
537
$7.7
39
$6.2
68
$1.9
13
$7.9
29
$2.9
36
$6.0
30
-$0.
125
-$2.5
$0.0
$2.5
$5.0
$7.5
$10.0
$12.5
Mill
ions
of D
olla
rs
98-99 99-00 00-01 01-02 02-03 03-04
Fiscal Year
Before Depreciation After Depreciation
25
John Carroll John Carroll UniversityUniversity
Statements of Activities – Statements of Activities – Nonoperating ExpensesNonoperating Expenses
26
John Carroll John Carroll UniversityUniversity
Ratios, Trends & Ratios, Trends & Ranking StatisticsRanking Statistics
27
John Carroll John Carroll UniversityUniversity
Jesuit InstitutionsJesuit InstitutionsRanked by 2004/05 Tuition, Fees, Room and Board - Part 1Ranked by 2004/05 Tuition, Fees, Room and Board - Part 1
28
John Carroll John Carroll UniversityUniversity
Jesuit InstitutionsJesuit InstitutionsRanked by 2004/05 Tuition, Fees, Room and Board - Part 2Ranked by 2004/05 Tuition, Fees, Room and Board - Part 2
29
John Carroll John Carroll UniversityUniversity
Ohio Private UniversitiesOhio Private UniversitiesRanked by 2004/05 Tuition, Fees, Room and Board - Part 1Ranked by 2004/05 Tuition, Fees, Room and Board - Part 1
30
John Carroll John Carroll UniversityUniversity
Ohio Private UniversitiesOhio Private UniversitiesRanked by 2004/05 Tuition, Fees, Room and Board - Part 2Ranked by 2004/05 Tuition, Fees, Room and Board - Part 2
31
John Carroll John Carroll UniversityUniversity
Ohio Private UniversitiesOhio Private UniversitiesRanked by 2003/04 Average Faculty Salary - Part Ranked by 2003/04 Average Faculty Salary - Part
11
32
John Carroll John Carroll UniversityUniversity
Ohio Private UniversitiesOhio Private UniversitiesRanked by 2003/04 Average Faculty Salary - Part Ranked by 2003/04 Average Faculty Salary - Part
22
33
John Carroll John Carroll UniversityUniversity
University Operating Fund University Operating Fund Headcounts as a Percent of Total Headcounts as a Percent of Total
Student FTEStudent FTE
34
John Carroll John Carroll UniversityUniversity
Student to Faculty RatioStudent to Faculty RatioPer Academic YearPer Academic Year
16.0
15.7
15.8
14.9
14.7
14.7
14.4
8.0
9.0
10.0
11.0
12.0
13.0
14.0
15.0
16.0
17.0
18.0
Stu
den
t F
TE
/ F
acu
lty
FT
E
98-99 99-00 00-01 01-02 02-03 03-04 04-05
Academic Year
35
John Carroll John Carroll UniversityUniversity
05-06 Budget05-06 Budget
36
John Carroll John Carroll UniversityUniversity
Operating RevenuesOperating RevenuesYear Ended May 31, 2004Year Ended May 31, 2004
18.6%
8.2%
6.1%
5.7%
0.4%
2.7%58.3%
Tuition (net of Schol.)
Auxiliary Enterprises
Investment Income
Private Gifts
Government Grants
Interest Income
Other
Revenue Sources
37
John Carroll John Carroll UniversityUniversity
05-06 Budget Assumptions05-06 Budget AssumptionsNet RevenuesNet Revenues
Undergraduate tuition rate increase – 5.75%Undergraduate tuition rate increase – 5.75% Room and board rate increase – 4.0% (total room Room and board rate increase – 4.0% (total room
and board revenue expected to decline based on and board revenue expected to decline based on projection of 175 empty “beds” in 05-06)projection of 175 empty “beds” in 05-06)
Freshmen class size – 780Freshmen class size – 780 Freshmen financial aid discount target – 38%Freshmen financial aid discount target – 38% Summer school tuition rate – No change (total Summer school tuition rate – No change (total
summer school tuition budget reduced based on summer school tuition budget reduced based on trend)trend)
Graduate School tuition rate – No change (total Graduate School tuition rate – No change (total Graduate School tuition reduced based on trend)Graduate School tuition reduced based on trend)
$200,000 for Graduate School cohort program$200,000 for Graduate School cohort program $350,000 increase in annual fund giving$350,000 increase in annual fund giving
38
John Carroll John Carroll UniversityUniversity
Proposed Tuition and Room and Proposed Tuition and Room and Board Increases – 2005-06Board Increases – 2005-06
39
John Carroll John Carroll UniversityUniversity
Operating ExpensesOperating ExpensesYear Ended May 31, 2004Year Ended May 31, 2004
44.3%
7.4%5.9%
4.9%
4.9%
4.1%
3.7%
7.8%
3.6%
13.5%
Salaries and WagesFringe BenefitsDepreciationContract ServicesInterestUtilities/ InsuranceTravel/ MeetingsPrinting/ SuppliesMaintenance/ RentalOther
Natural Expenses
40
John Carroll John Carroll UniversityUniversity
05-06 Budget Assumptions05-06 Budget AssumptionsExpensesExpenses
University-wide wage freezeUniversity-wide wage freeze Funding for a 15% increase in medical premiumsFunding for a 15% increase in medical premiums $1.7 million in spending cuts, primarily from not $1.7 million in spending cuts, primarily from not
replacing open positionsreplacing open positions No increase in departmental operating budgets No increase in departmental operating budgets
except for expected increases in utility and insurance except for expected increases in utility and insurance costscosts
Added funding for the London study abroad program Added funding for the London study abroad program to begin in Fall 2005to begin in Fall 2005
Funding for the hiring of a new Dean of the Business Funding for the hiring of a new Dean of the Business School and new Executive Director of LibrarySchool and new Executive Director of Library
Funding for the hiring of two new fund raisers needed Funding for the hiring of two new fund raisers needed to increase annual fund goal by $350,000to increase annual fund goal by $350,000
41
John Carroll John Carroll UniversityUniversity
Unrestricted Operating Fund Unrestricted Operating Fund RevenueRevenue
04-05 Budget vs. 04-05 Estimate vs. 05-06 04-05 Budget vs. 04-05 Estimate vs. 05-06 ProjectionProjection
42
John Carroll John Carroll UniversityUniversity
Unrestricted Operating Fund Unrestricted Operating Fund ExpendituresExpenditures
04-05 Budget vs. 04-05 Estimate vs. 05-06 04-05 Budget vs. 04-05 Estimate vs. 05-06 ProjectionProjection
43
John Carroll John Carroll UniversityUniversity
Moody’s Investors ServiceMoody’s Investors ServiceJCU Debt Rating Affirmation – JCU Debt Rating Affirmation –
12/13/0412/13/04
Affirms A2 Debt Rating – Outlook is Affirms A2 Debt Rating – Outlook is StableStable
Credit StrengthsCredit Strengths Established history of operating surpluses and Established history of operating surpluses and
healthy debt service coverage (average 2.2x)healthy debt service coverage (average 2.2x) Liquid financial resource base ($99.0 million Liquid financial resource base ($99.0 million
in unrestricted resourcesin unrestricted resources Strong Jesuit market reputationStrong Jesuit market reputation
Credit ChallengesCredit Challenges Competitive market for students in Ohio (89% Competitive market for students in Ohio (89%
selectivity)selectivity) Reliance on tuition revenue (74%)Reliance on tuition revenue (74%) Expanding geographic draw of studentsExpanding geographic draw of students
44
John Carroll John Carroll UniversityUniversity
Moody’s Investors ServiceMoody’s Investors ServiceJCU Debt Rating Affirmation – JCU Debt Rating Affirmation –
12/13/0412/13/04
What could change the rating – UPWhat could change the rating – UP A markedly enhanced student demand A markedly enhanced student demand
profile, represented by stable enrollments, profile, represented by stable enrollments, improved selectivity and yield rates, and improved selectivity and yield rates, and growing net tuition per student.growing net tuition per student.
Ability of University to fund future capital Ability of University to fund future capital needs through gifts rather than debt needs through gifts rather than debt
What could change the rating - DOWNWhat could change the rating - DOWN A continuation of declining enrollment, A continuation of declining enrollment,
especially if accompanied by pressure on especially if accompanied by pressure on operating marginsoperating margins
Substantial additional borrowing, Substantial additional borrowing, especially without a stabilized enrollmentespecially without a stabilized enrollment
45
John Carroll John Carroll UniversityUniversity
Center for Science and TechnologyCenter for Science and TechnologyCash Flow Projection - CumulativeCash Flow Projection - Cumulative
$40.
2
$42.
2 $67.
0
$41.
6
$46.
7 $67.
0
$41.
6
$48.
9 $67.
0
$41.
6
$55.
0
$67.
0
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$M
illions
2004 2005 2006 2007+
Fiscal Year Ending May 31,
Cash Received* Gift Pledges Construction Costs
$6.1 in
* As of 10/31/04
Bequests
46
John Carroll John Carroll UniversityUniversity
Shula StadiumShula StadiumCash Flow Projection - CumulativeCash Flow Projection - Cumulative
$2.6
$2.8
$11.
0
$2.7
$3.3
$11.
0
$2.7
$3.9
$11.
0
$2.7 $4
.5
$11.
0
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$M
illions
2004 2005 2006 2007+
Fiscal Year Ending May 31,
Cash Received* Gift Pledges Construction Costs
$0.6 in
* As of 10/31/04
Bequests
47
John Carroll John Carroll UniversityUniversity
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