University of Virginia
Board of Visitors Retreat
Financial Overview of the University
August 16, 2015
1
“In these challenging times for
American higher education, the
University of Virginia has set a high
standard as one of the most
financially stable universities in the
nation.”
President Sullivan, 2013-14 Financial Report
2
Agenda
1. UVa’s Exceptional Financial Strength
2. A Sustained Record of Successfully Meeting
Challenges
3. A Strong Foundation for Future Success
4. Funding our Aspirations
3
UVa’s Exceptional Financial Strength
Consistent AAA Rating
Large endowment with a consistent record of strong
performance
Tradition of strong philanthropic support
Diverse revenue base, including a Medical Center with a
strong operating margin
Brand recognition as providing a top-quality education at a
tremendous value and leading-edge medical care
4
AAA Bond Rating
• AAA rated from all three rating agencies – Standard &
Poor’s, Fitch Ratings, and Moody’s Investor Services
• Net assets exceed $8 billion
• Revenues exceed $3.4 billion
• The University is just one of three public universities in
the nation to receive the highest rating from all three
agencies
• The University has earned this distinction for over a
decade
5
Breakdown of UVIMCO-Managed Endowment
As of June 30, 2015
Shareholder Summary
UVa (Rector & Visitors)
Endowment
Affiliated Foundations
TOTAL
$4.30 billion
$1.67 billion
$5.97 billion
6
UVA Rector & Visitors Endowment Growth
(In $1,000's)
As of June 30, 2015
$4,600
$4,400
Market Value 06/30/84
$ 213
New Gifts to Endowment
593
Net Adds to Quasi Endowments
650
Inflation on (1984 MV & Gifts)
905
Subtotal
2,361
Performance, net of distributions:
Market Appreciation
3,996
Distributions, net
(1,999)
Performance, net
1,997
$4,200
$4,000
$3,800
$3,600
$3,400
$3,200
$3,000
$2,800
Market Value 06/30/15
$2,600
$ 4,358
$2,400
$2,200
$2,000
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
New Endowment Gifts
$200
1984 MV
New Gifts
Adds to Quasi
Performance, net of distributions
Gifts/Adds adjusted for Inflation
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984 Market Value
1984
$-
7
Performance Review
Annualized Returns of the Long Term Pool Versus Benchmarks and Peers
Periods Ending June 30, 2014
1 YR
3 YR
5 YR
10 YR
20 YR
Long Term Pool
19.0
12.4
15.2
10.8
12.6
Policy Portfolio Benchmark
16.6
8.9
12.4
7.5
7.6
Comparative Industry Data
(1)
TUCS All Master Trusts Top Quartile
TUCS All Master Trusts Median
TUCS All Master Trusts Bottom Quartile
17.6
15.7
12.6
10.5
9.4
7.6
13.4
12.1
10.2
7.7
7.0
6.3
9.2
8.6
8.0
(1)
Trust Universe Comparison Service (TUCS) reports performance of over 900 institutions representing $3.5 trillion in assets under management
8
Tradition of Strong Philanthropic Support
• Successful $3 billion Capital Campaign from 2006 to 2013 included
gifts from more than 220,000 donors and 92,000 alumni
• Annual philanthropic cash flow now approaching $300 million
• Campaign gifts created over 1,000 new endowments, including:
• 514 endowed scholarships
• 63 endowed professorships
• 97 endowed fellowships
• Several key facilities to support the fine and performing arts; a new
school of leadership and public policy; several health system
buildings; new buildings for science, engineering and medical
research; new teaching and learning facilities; new athletic facilities;
and support for historic renovation.
9
UVa’s Diverse Revenue Base
10
Rankings Reflect A Strong Brand
•
•
•
•
#2 best public university, US News & World Report
#1 best value public college, Princeton Review
#2 best college value, Kiplinger’s
#1 annualized return on investment, PayScale.com
• The Atlantic, which published the PayScale survey, concluded: “for
the best dollar-for-dollar investment, nothing beats the University of
Virginia.”
•
•
•
•
#17 best value for the tuition dollar, Money Magazine
#4 best public university, Forbes
Medical Center – a magnet-designated facility
U.S. News & World Report's "Best Hospitals" guide
recognized five medical specialties – Diabetes &
Endocrinology, Cancer, Nephrology, Neurology &
Neurosurgery and Orthopedics
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UVa’s Sustained Record of Successfully
Meeting Challenges
Over
the
past
decade
We provided access and affordability to an increasingly
diverse student body
We thrived despite the changing landscape of federal and
state funding for both higher education and health care
We managed through the economic downturn in 2008 and
emerged even stronger
We continued to invest in the restoration, renovation and
construction of our Grounds to preserve our history and to
meet the continued growth of student, academic and
clinical programs
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Affordable Excellence – A Model that Ensures
Access, Affordability and Continued Excellence
Continue to maintain need-blind admissions policy and
meet 100% of demonstrated need for in-state and out-of-state students
Lower net price for roughly 70% of Virginian families (low and middle
income Virginians who demonstrate financial need)
Reduce student indebtedness for Virginia families by $10,000
Ensures our ability to continue investing in student experience, quality
faculty and overall academic excellence
Provides greater degree of predictability related to tuition and fees
13
Expenditures on Capital Construction
2005-2015 (in millions)
$350
$27.0
$29.2
$300
$18.2
$43.0
Expednitures (in millions)
$250
$129.0
$24.2
$4.4
$3.4
$27.3
$6.8
$78.5
$2.9
$82.4
$73.2
$10.2
$9.4
$37.7
$73.1
$244.3
$18.3
$70.6
$199.9
$100
$141.0
$50
$11.9
$12.4
$200
$150
Total Expenditures: $2.45 billion
$138.5
$161.4
$179.8
$110.1
$145.6
$157.9
$99.0
$80.7
$FY05
FY06 FY07 FY08 FY09 FY10 FY11
Academic Division
Medical Center
FY12 FY13 FY14
College at Wise
FY15
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Strong Foundation for Future Success
Market leading academic and health care brands
Commitment to Organizational Excellence
Outstanding faculty and dedicated staff
Long-range financial plan that leverages the
strengths of our institution and our balance sheet
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Organizational Excellence
• 2015-2022 Goal: Over $150 million of savings and
efficiencies
• Guiding Principles:
• Academic, medical center and administrative
collaboration
• Data-driven and results-oriented
• Best-in-class business processes
• Stewardship of resources
• Strategic long-term impact
• Keep tuition increases to a minimum
• Transparency, teamwork, trust
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Funding Our Aspirations
Cornerstone Plan
Recruiting and retaining the best faculty
Expanding our research enterprise
Future growth of academic and health care missions
Future capital needs
Continued commitment to access and affordability
Ensuring the success of the Bicentennial Campaign
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Cornerstone Plan
2015-16 Priorities
Initiatives
Student Leadership Development
Total Advising
Lifelong Alumni Engagement
Strategic Research & Research Infrastructure
High Impact Educational and Global Experiences
Evidence-based Teaching & Learning
Faculty Leadership Development
Continuous Active Recruiting to Secure Leading Faculty
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Faculty Age Profile
Tenured & Tenure-Track faculty
age distribution
Tenured & Tenure-Track faculty
age 68 or older by 2019
19
Undergraduate Faculty Recruitment
Faculty Hiring
572 new tenure-track hires
over 8 years
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Pursue Top 20 Ranking of Faculty
Compensation
UVa’s Ranking Among AAU Peers
35
30
25
31st
29th
32nd
27th
28th
Goal of Top 20 AAU Ranking of Faculty Compensation
20
15
10
5
0
2010-11
2011-12
2012-13
2013-14
2014-15
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Sponsored Research Activity
$400
$300
Millions
$200
$100
$2010
2011
2012
2013
2014
2015
projected
Awards
Expenditures (direct and indirect)
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On-Grounds Enrollment Levels
Fall Headcount, 2009-2014
(2015+ projected)
25,000
20,895 21,049 21,106 21,095 21,238
20,000
6,598
6,604
6,515
6,454
6,340
21,800
6,395
22,079 22,368
6,679
6,768
22,536 22,589 22,646 22,659 22,676 22,694
6,848
6,901
6,958
6,971
6,988
7,006
15,000
10,000
15,405 15,400 15,600 15,688 15,688 15,688 15,688 15,688 15,688
14,297 14,445 14,591 14,641 14,898
5,000
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Undergraduate
Graduate
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Projected Medical Center Growth
Budgeted
2016
Forecast
2017
Forecast
2018
Forecast
2019
Forecast
2020
Forecast
2021
CAGR
FY16FY21
31,910
32,183
32,458
32,852
33,250
33,653
1.1%
Medical Center
visits
895,435
917,788
940,740
964,307
988,507
1,013,964
2.5%
Outpatient
Imaging
Associates
procedures
103,238
103,800
113,561
119,194
127,055
133,284
5.2%
Community
medicine visits
17,011
17,436
17,872
18,319
18,777
19,246
2.5%
Dialysis satellite
treatments
157,254
161,972
166,832
171,837
176,992
182,302
3.0%
HOPE infusion
visits
27,175
27,755
28,350
28,958
29,583
30,223
2.1%
Culpeper Visits
36,870
38,427
40,015
41,389
42,685
42,924
3.1%
Inpatient Statistics
Total Discharges
Outpatient Statistics
24
University Capital Program, 2016-2022
Under
Construction
Authorized
Projects in
Planning
Other
Authorized
Projects
TOTAL
Academic
Division
$85.2 million
$372.7 million
$664.8 million
$1,122.7 million
Medical
Center
$29.9 million
$459.6 million
$68.2 million
$557.7 million
College at
Wise
$52.2 million
$2.5 million
$121.0 million
$175.7 million
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UVa is well positioned to face future
challenges – both known and
unknown. Five years from now, we
will be an even stronger and better
institution.
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