U.S. Public College And University
Fiscal 2014 Median Ratios: A Growing
Divide Between Ratings Categories
Primary Credit Analysts:
Jessica L Wood, Chicago (1) 312-233-7004; [email protected]
Shivani Singh, New York (1) 212-438-3120; [email protected]
Secondary Contact:
Jessica A Matsumori, San Francisco (1) 415-371-5083; [email protected]
Research Assistants:
Ryan Quakenbush, Chicago
Phillip A Pena, San Francisco
Table Of Contents
Demand And Financial Ratios Help Measure Credit Quality
Ratings Distribution And Characteristics
Enrollment And Demand Medians Provide Context
Financial Medians Provide Perspective
Financial Resource Ratios
Measuring The Debt Burden
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 1
1416223 | 301932398
U.S. Public College And University Fiscal 2014
Median Ratios: A Growing Divide Between Ratings
Categories
During fiscal 2014, U.S. public colleges and universities continued to struggle with many of the same challenges they
have faced for the past few years, balancing the demands of growing expenditures with less state appropriations than
in prior years, while continuing to address student affordability and access. However, strong investment market
performance continued during fiscal 2014 across the higher education industry, which contributed to increased
endowment market values and in most cases, stronger financial resources.
The majority of the financial ratios and benchmarks that are key to Standard & Poor's Ratings Services' credit analyses
either remained stable or improved across the U.S. public colleges and universities in fiscal 2014, reflecting institutions'
enhanced financial flexibility, primarily because of improved endowment performance.
A historically stable sector with about 90% of ratings affirmed each year, the sector saw more rating actions and
outlook revisions than previous years (see our higher education sector outlook, published Jan. 15, 2015). While the
absolute number of rating changes in 2014 was similar with that of 2013, the ratio of downgrades to upgrades
increased for the fourth consecutive year. The number of institutions with negative outlooks (10%) is still more than
the number of institutions with positive outlooks (7%), while 81% of all rated public institutions have stable outlooks.
Based on our analysis of the sector's medians, Standard & Poor's expects continued rating pressure, particularly at the
lower end of the rating scale, because of persistent operating stress and a delayed recovery from the Great Recession.
Overview
• Our analysis shows relative stability or improvement of financial medians for U.S. public colleges and
universities in fiscal 2014.
• Endowment returns were strong in fiscal 2014, but other financial and budgetary pressures remain.
• Debt service burdens decreased in fiscal 2014 as institutions refinanced and capitalized on low interest rates
• Although demand has held up for most public higher education institutions, maintaining this will be key, given
that state appropriations remain below pre-Great Recession levels, and affordability problems continue.
In fiscal 2014, overall net operating income performance for institutions in Standard & Poor's Ratings Services' higher
rating categories --'AAA' and 'AA' -- remained positive but was negative for the lower rating categories of 'A', 'BBB',
and speculative grade. In our view, this reflects the growing pressures related to affordability combined with increased
competition for students, which is more severe in our lower rating categories. Most higher-rated public universities,
such as the flagship state universities and land-grant institutions, withstood increasing demographic and competitive
pressures. In fact, some performed very well. In fiscal 2013, we rated just seven institutions 'AA+', but in fiscal 2014,
we upgraded the ratings on both Michigan State University and the University of Pittsburgh to 'AA+'.
While most endowment market values grew significantly during fiscal 2014, other financial pressures remained, which
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 2
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
for some public universities have been exacerbated by flat-to-declining enrollment and falling net tuition revenues. We
expect higher-rated public universities to retain or improve their credit profiles because they tend to have a broader,
more national draw, greater revenue diversity, and enjoy an established history of successful fundraising and strong
balance sheets. Conversely, many weaker public universities, which typically have smaller endowments and more
regional student bodies, may not have this type of financial flexibility, and thus, are at greater risk.
Demand And Financial Ratios Help Measure Credit Quality
The key elements of our criteria, which include an analysis of demand and enrollment, debt and financial ratios, as well
as qualitative factors such as our assessment of management, provide the basis for our view of the sector's credit
characteristics. From a broad perspective, the ratios provide a clear picture of the difference in credit fundamentals
from one rating category to another.
Our ratios fall into two main categories: demand and financial. Both sets of ratios are highly correlative with credit
quality, and the differences between the ratings categories become more distinct over time.
Demand and financial ratios are pivotal in measuring the credit quality of U.S. higher education institutions: We
calculate means and medians to assess the financial and operational health of individual institutions, gauge
industrywide trends, and produce meaningful comparisons of rating categories (see table 1). We publish these medians
as general benchmarks and measures to observe industry trends. However, the credit analysis for any particular
institution involves an assessment of many unquantifiable risks that are not included in this article. Therefore, these
medians should not be considered thresholds to achieve a particular rating.
Table 1
Selected Financial Ratios For Public Colleges And Universities (Fiscal 2014)
-- Rating -Ratings
AAA
AA
A
4
64
90
3
2
163
Median
45,198
34,431
13,381
2,496
31,722
21,653
Mean
81,138
65,880
15,337
9,406
31,722
37,022
Median
41,044
32,265
10,819
2,148
30,272
17,971
Mean
68,048
52,631
12,462
7,500
30,272
29,690
Sample size
BBB Spec Grade Sector Wide
Enrollment and Demand
Total Headcount
Total FTE Enrollment
Undergraduates as a % of total enrollment
Median
69.4
77.7
85.2
91.2
88.9
81.5
Mean
69.5
75.5
83.1
90.9
88.9
80.0
Median
31.7
68.6
72.5
74.7
67.4
69.7
Mean
37.8
66.9
72.1
76.0
67.4
69.1
Freshman Acceptance Rate (%)
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 3
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 1
Selected Financial Ratios For Public Colleges And Universities (Fiscal 2014) (cont.)
Average SAT scores
Median
1,329
1,200
1,050
1,258
861
1,128
Mean
1,322
1,266
1,081
1,258
861
1,169
Median
30.0
25.1
22.1
22.0
17.6
23.0
Mean
29.3
25.1
22.4
21.9
17.6
23.5
Median
96.6
85.0
73.2
73.0
70.2
78.0
Mean
95.9
84.7
73.8
71.6
70.2
78.2
Median
88.0
55.4
42.0
36.6
46.0
47.1
Mean
86.0
56.8
43.8
35.8
46.0
49.4
Median
71.2
77.1
86.1
80.8
69.0
80.0
Mean
72.0
75.6
81.1
80.8
69.0
78.2
Median
15.2
1.8
(0.4)
(1.6)
(3.2)
0.6
Mean
12.9
1.8
(0.1)
(3.5)
(3.2)
0.9
Median
8.2
21.4
26.6
22.3
48.9
23.4
Mean
9.7
21.9
26.8
22.3
48.9
24.6
Median
16.9
32.4
44.3
60.3
24.4
39.3
Mean
15.9
31.9
44.0
56.7
24.4
38.6
Median
14.4
15.8
7.8
7.0
16.6
11.1
Mean
15.5
16.2
10.2
7.0
16.6
12.7
Median
3.0
3.1
1.6
0.7
0.5
2.2
Mean
3.2
3.4
2.3
0.7
0.5
2.8
Average ACT scores
Retention Rate (%)
5 Year Graduation Rate (%)
In-state Students (%)
Financial Performance
Net Adjusted Operating Income (%)
Revenue Diversity
State appropriations to revenue (%)
Gross tuition to revenue (%)
Grants and contracts to revenue (%)
Gifts and Pledges to revenue (%)
Investment and endowment income to revenue (%)
Median
21.4
2.4
0.7
1.3
0.6
1.3
Mean
21.8
3.2
1.5
2.0
0.6
2.6
Median
2.8
10.7
11.5
19.4
4.8
11.1
Mean
2.6
10.4
11.7
17.4
4.8
11.1
Auxiliary operations to revenue (%)
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 4
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 1
Selected Financial Ratios For Public Colleges And Universities (Fiscal 2014) (cont.)
Financial Aid and Expense
Financial aid burden as a percentage of expenses (%)
Median
3.9
7.3
10.4
15.3
7.0
9.2
Mean
4.0
7.9
10.6
15.3
7.0
9.4
Instruction expense as a percentage of expenses (%)
Median
17.8
26.5
32.5
29.1
25.4
30.4
Mean
18.5
28.6
34.9
30.2
25.4
31.8
6,958,322
631,508
84,593
15,397
12,583
218,308
12,455,201
943,995
136,668
30,962
12,583
1,086,499
Endowment
University endowment market value ($000s)
Median
Mean
Foundation endowment market value ($000s)
Median
1,180,577
646,108
79,216
24,667
74,794
152,807
Mean
1,180,577
894,355
132,130
35,864
74,794
438,761
Financial Resource Ratios
Cash and investments to operations (%)
Median
217.7
63.5
47.2
31.6
20.1
53.8
Mean
228.0
69.7
54.0
29.1
20.1
63.6
Median
520.2
163.0
97.3
19.4
30.1
120.6
Mean
507.3
182.1
118.0
43.1
30.1
150.1
Median
77.1
36.1
32.5
14.2
0.1
33.0
Mean
75.5
38.2
35.6
13.9
0.1
36.8
Median
155.7
102.1
62.1
14.3
1.7
75.2
Mean
187.1
103.5
82.4
21.0
1.7
91.0
Cash and investments to debt (%)
Adjusted UNA to operations (%)
Adjusted UNA to debt (%)
Debt Ratios
Total outstanding debt ($000s)
Median
1,635,872
689,891
141,343
88,720
423,399
244,375
Mean
3,144,459
1,212,443
214,780
116,094
423,399
674,393
Median
3.1
3.3
3.9
5.9
7.5
3.7
Mean
4.3
3.9
4.9
5.9
7.5
4.5
Median
10.7
12.2
13.2
20.1
12.1
12.5
Mean
10.5
12.6
13.4
19.6
12.1
13.1
Current debt service burden (%)
Average age of plant (years)
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 5
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 1
Selected Financial Ratios For Public Colleges And Universities (Fiscal 2014) (cont.)
MADS Burden (%)
Median
3.4
3.5
4.4
4.2
7.6
4.1
Mean
3.8
3.8
5.2
8.2
7.6
4.8
Median
9.8
5.4
3.3
0.3
0.5
3.5
Mean
9.8
8.6
8.7
0.3
0.5
8.3
Median
50,220
18,963
10,943
12,973
25,455
14,497
Mean
49,162
22,297
19,154
22,148
25,455
21,264
9,853
8,280
5,440
4,693
12,338
7,232
10,857
9,462
6,769
4,693
12,338
7,968
Median
186,372
16,651
4,895
4,234
2,196
8,661
Mean
174,184
18,975
14,242
4,234
2,196
24,032
OPEB as % of total liability
Full-Time Equivalent Ratios
Total debt per FTE ($)
State appropriations per FTE ($)
Median
Mean
Endowment per FTE ($)
Ratings Distribution And Characteristics
The total sample size for our public college and university ratios remained fairly flat since fiscal 2013's report, with
only marginal shifts in the number of institutions per category. For fiscal 2014, our report on public university ratios
covers 163 institutions (compared to 162 in 2013) and includes several large systems. During 2014, Standard & Poor's
published two new public university ratings: the University of Oregon (AA-/Stable) and the University of North
Alabama (A/Stable).
We derived data for this report from only our public ratings on unlimited student fee (USF) debt, which is how we
define the highest rating of an institution's underlying credit characteristics – essentially, equivalent to a private
institution's general obligation (GO) rating. When an institution does not have any rated debt, but does have an ICR
(issuer credit rating), we have included these USF equivalent ratings also.
Although we rate many other types of debt for public universities, such as housing or auxiliary-secured ratings, and
provide numerous confidential ratings, the data in this report includes only ratings that are public and reflect the
underlying credit characteristics of the university, college, or system. Also, while we hold public, USF equivalent
ratings on many community colleges and community college systems, for the purposes of this report, we have
included only our ratings on four-year institutions or systems that primarily comprise four-year programs to maintain
data consistency and enable a meaningful comparison between similar entities.
The information in this report reflects fiscal 2014 audited information and the corresponding fall 2013 enterprise data
(enrollment, etc). Several public universities use private university FASB (Financial Accounting Standards Board)
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 6
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
accounting instead of GASB (Governmental Accounting Standards Board) accounting, and for these universities we
have included their enterprise profile information but not their financial profile information. All ratings in this report are
as of May 15, 2015.
Chart 1
In fiscal 2014, the average credit rating on public colleges and universities is 'A+/Stable', unchanged from fiscal 2013.
About 94% of our public university ratings fall between 'AA+' and 'A-', with the majority of rated debt (55%) in the 'A'
category having mostly stable outlooks (see charts 2 and 3). The 'AA' category includes many of the country's largest
systems -- such as the University of California -- in which we rate the system rather than individual institutions.
Therefore, the 'AA' category, which constitutes about 39% of the total rating distribution, represents a greater number
of institutions than the actual number of ratings (64).
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 7
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Chart 2
Just four public universities and systems (University of Virginia, University of Texas System,University of Michigan,
and University of North Carolina at Chapel Hill) have 'AAA' rated debt. At the other end of the rating spectrum, the
'BBB' category has three institutions: Lake Superior State University, Western State Colorado University, and Eastern
Michigan University. The only speculative-grade rated public institutions are University of Puerto Rico
('CCC+/CWNeg'; with ties to the Commonwealth of Puerto Rico) and the Alabama State University (B/Negative). In
contrast to the public colleges and universities ratings distribution, not-for-profit private colleges and universities have
a much greater number of GO debt ratings in the 'BBB' and speculative-grade categories (103, combined) as well as a
greater number of 'AAA' ratings (12).
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 8
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Chart 3
Enrollment And Demand Medians Provide Context
In prior median reports, we included matriculation rates in our assessment of the demand profile for public
universities. However, we have not included matriculation rates as a subfactor for public universities for the fiscal 2014
medians because we have not observed a strong correlation between matriculation rates and a public university's
financial strength, governmental willingness to support the university, or overall credit quality.
During the past few years, enrollment has been flat to declining at many regional public universities, which we believe
indicates a highly competitive landscape and unfavorable demographics, particularly in the Northeast and Midwest. At
the same time, during fiscal 2014, enrollment at the highest-rated institutions remained stable or grew modestly, even
as competition for students intensified across all rating categories.
While many universities continue to report increased applications, enrollment has not grown as fast and in many cases
has declined -- which we believe illustrates that students are looking at an increasing number of schools to broaden
their options, both programmatic and financial.
Although many universities targeted enrollment growth during the past few years to offset state appropriation declines,
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 9
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
enrollments are slowing compared with the previous few years. This may be because many institutions have reached
physical capacity, have limited additional financial aid dollars for expansion, or have increased their strategic focus on
retention and are becoming more selective -- a strategy that causes enrollments to decline but will eventually improve
retention rates. As many management teams indicated to us: It is cheaper to keep a student than recruit a new one.
Chart 4
In 2014, institutions in the 'BBB' rating category saw a decrease in headcount and full-time equivalent (FTE)
enrollment in fiscal 2014 compared with fiscal 2013, which is reflective of their weaker demand profiles. We believe
lower-rated public universities, which often have a weak national student draw, will continue to be subjected to
competitive stress during the next few years as families are more price-sensitive than they were five or 10 years ago.
We also anticipate that weak demographics will continue to pressure enrollments.
At the other end of the spectrum, FTE enrollment increased in fiscal 2014 for the 'AAA,' 'AA, and 'A' categories. We
believe enrollment at higher-rated institutions remains diverse, with many major research universities in the 'AA'
category providing substantial graduate and professional programs, which can help compensate for declines in
undergraduate enrollment. Except for the 'AAA' rating category, all other rating categories saw weaker freshman
admissions selectivity in fiscal 2014 compared with fiscal 2013. This was particularly true for institutions in the 'A' and
'BBB' categories, indicating fierce competition for students. Although retention and graduation rates increased across
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 10
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
most rating categories, we observed a more dramatic difference between the upper and lower rating categories.
Offsetting these trends in demand and enrollment to some extent are financial-aid expenses, which have significantly
increased as a percent of operating expense in recent years. We believe that the growth in financial aid will continue to
pressure institutions that have fewer financial resources. In addition, we expect the sector-wide shift to increased
dependence on student-generated revenues (such as tuition, dining fees, and housing fees) to continue. As a result, net
operating margins could become more stressed and unpredictable during the next few years as institutions seek tuition
price points that enable them to increase enrollment while maintaining or enhancing student quality and providing
sustainable levels of financial aid.
Chart 5
Financial Medians Provide Perspective
Our analysis of a public institution's financial strength covers an assessment of revenue and expense composition,
financial operating performance, financial resources, and debt burden.
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 11
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Operating performance
Operating performance in the public university sector is often difficult to determine based on the varying audit
presentation styles and the interaction and support (or lack thereof) from the state. As such, we normalize operations
year-over-year to reduce variability resulting from one-time revenues and expenses. One of the most common
adjustments Standard & Poor's makes is to add back federal financial aid (mostly Pell Grants) and state appropriations
as revenues to estimate operating performance. Because many public universities hold some or all of their endowment
investments at the university level, Standard & Poor's adjusts for this by excluding long-term investment gains and
losses in our calculation of operating results. We also adjust for endowment draws used for operating expenses, if they
are not already included in the operating statement. In fiscal 2014, generally, tuition increases continued and state
appropriations were either stable or increased. For institutions that contained costs and benefited from increased
enrollment, overall operating results were mostly balanced on a generally accepted accounting principles basis
(GAAP). The rating categories that generated median operating deficits on a GAAP basis in fiscal 2014 were the
lower-rated categories.
Overall, the data indicates the strongest median operating margins occurred in the 'AAA' category at 15.2% for
adjusted net operating income on a GAAP basis. We note that median operating margins are only positive on a GAAP
basis in the 'AAA' and 'AA' rating categories, which indicates that many lower-rated universities do not budget for
depreciation when formulating budgets. Operating margins were negative for the lower-rated 'A', 'BBB', and
speculative-grade rating categories. However, we believe operating margins are less correlative to rating categories
unless combined with other measures, such as revenue diversity and financial resource ratios.
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 12
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Chart 6
For fiscal 2014, revenues from tuition and fees increased from fiscal 2013 levels across all rating categories, which is
indicative of the sector's greater reliance on student-generated revenues -- particularly as state appropriations remain
well below pre-recession levels.
The distribution of revenue diversity is stark across rating categories: On average, the 'AAA' rated institutions had a
relatively small portion of revenue derived from tuition and fees with a 16.9% median, while the 'BBB' rated category
was the most highly tuition dependent at 60.3% (see chart 6), with the other categories falling in between. The three
other major revenue categories amongst the higher-rated institutions were: state appropriations, investment and
endowment income, and grants and contracts (see table 1).
State appropriations
During the past five years, most public universities have had their state appropriations cut -- and for some, funding
frameworks and incentives have changed. Many states are now allocating a portion of state appropriations based on
performance-based metrics -- such as retention and graduation rates, and in particular, successful course and degree
completion. Although performance-based funding goals differ by state, this type of funding model is a growing trend in
higher education. In most states, the typical percentage of higher education funding tied to performance is still
relatively small at between 2% and 5%. However, with increasing pressure on state budgets for accountability and
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 13
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
return on investment, this percentage appears to be growing. At this time, we do not anticipate any ratings impact
based on these state funding changes, but it will be interesting to see how the formulas change over time. In general,
current state appropriations represent a much smaller portion of public university budgets than they did historically,
with student-generated revenues (tuition, fees, and auxiliary revenues) now accounting for a larger component. In
fiscal 2014, state funding seems to have finally stabilized and some states even saw increases in state appropriations.
The distribution of state appropriations dependency is stark across rating categories: The 'AAA' rated institutions on
average had a relatively small portion of revenues derived from state appropriations with an 8.2% median, while the
speculative grade category was the most highly state appropriation-dependent at 48.9%, with the other categories
falling somewhere in between. We believe states will continue to struggle to increase higher education funding and
that institutions will become increasingly dependent on student-generated revenues due to weak state revenues and
other critical funding priorities.
Chart 7
Endowments
Investment and endowment income are significant revenue sources in the higher-rating categories; many institutions
use endowment income to fund financial aid and other programs. Many institutions' endowment market returns were
positive in fiscal 2014, which is a continuation of strong investment returns seen in fiscal 2013. During fiscal 2014,
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 14
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
endowment market values grew in each rating category. The median endowment market value for the four institutions
in the 'AAA' category was approximately $7 billion. This represents a 15.3% increase compared with the $6 billion
median endowment in fiscal 2013, although it is lower than the $8.4 billion median endowment for 'AAA' rated private
colleges and universities.
Chart 8
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 15
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Chart 9
Similarly, increases in endowment value at the 'AA' rating category highlight higher-than-average investment returns
and an average 5% endowment draw. The median endowment market value for institutions in the 'AA' category was
$631.5 million, up 7.9% compared with $585.1 million in fiscal 2013. The median endowment market value for
institutions in the 'BBB' category was $15.4 million in fiscal 2014, compared with roughly $9 million in fiscal 2013. The
National Association of College and University Business Officers (NACUBO) reported average market returns of 15.5%
(net of fees) in their Fiscal 2014 NACUBO-Commonfund Study of Endowments published on Jan. 29, 2015. Although
the market returns we observed for most institutions were slightly lower than the NACUBO study, we believe our
calculation reflects the noise associated with varied fiscal year-end dates and inconsistencies in endowment market
value reporting in audited financial statements. The NACUBO study also includes more than 850 institutions, while we
include just 163 in our universe.
Financial Resource Ratios
Financial resource ratios are paramount to our analysis, as they reflect the relative strength of the university's balance
sheet. While we analyze an institution's cash and investments, our view is that this is typically a less conservative
measure of balance sheet strength, given the inclusion of restricted endowment funds. We primarily evaluate an
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 16
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
institution's available resources (for public universities -- unrestricted net assets (UNA; or adjusted UNA, which
includes unrestricted foundation assets and debt service reserves) relative to both operating expenses and debt. We
also adjust our financial resource ratios to include long-term other postemployment benefit (OPEB) liabilities, as we
recognize that these obligations are rising for many public universities, and factor this into our analysis.
Compared with those of their private counterparts, public universities generally have lower financial resource ratios
because of their much smaller endowment market values. Overall, the median ratios for the entire public institution
universe ("sector-wide") are a combination of both 'AA' and 'A' categories, with a median adjusted UNA-to-operating
expenses ratio at 33.0% and a median adjusted UNA-to-debt ratio at 75.2%. Within each rating category, adjusted
UNA to operating expenses and debt strengthened in fiscal 2014, due largely to strong investment returns.
The median adjusted UNA-to-debt ratio for the 'AA' rated category increased to 102.1% in fiscal 2014, from 88.3% in
fiscal 2013; while the same ratio for the 'A' rated category increased to 62.1% in fiscal 2014, from 53.3% in fiscal 2013.
Our expectation, as in the past, is that an institution's financial resource ratios will likely vary with endowment market
values, because a significant portion of UNA results from institutional endowments (see charts 10 and 11). Looking
forward, we believe it is unlikely that financial resource ratios will continue to grow at the robust rate seen in fiscal
2014 as market investment returns have been more modest so far in fiscal 2015, and debt issuance has been
increasing.
Chart 10
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 17
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
The four entities in the 'AAA' rating category have significantly larger endowments, which is also reflected in their
much stronger median adjusted UNA to debt ratios (155.7%) and adjusted UNA-to-operating expenses ratios (77.1%).
At the other end of the spectrum, the medians for the same ratios in the 'BBB' rating category were much lower,
demonstrating very little financial flexibility related to available resources, as reflected in adjusted UNA to debt ratios
at 14.3%, and adjusted UNA-to-operating expenses ratios at 14.2%.
Chart 11
Several public universities participate in large defined benefit pension plans administered by their respective states.
The resulting pension liabilities for these state pension plans have historically been recorded on the state's balance
sheet. We expect accounting changes effective for fiscal 2015 (Government Accounting Standards Board, Statement
68, "Accounting and Financial Reporting for Pensions") to have an impact on university financial resource ratios
because each university must recognize a liability in its financial statements for its proportionate share of the net
pension liability of all employers for pension benefits to its employees through the state plan. This liability recognition
will likely, all else being equal, reduce UNA (an equity-based measure) for fiscal 2015 and future years. At this time, not
all rated public universities have provided estimates of their proportionate share of these unfunded pension liabilities.
We will evaluate the potential impact of these liabilities on university financial resource ratios once details become
clearer. However, we do not anticipate any rating changes due to this reporting requirement, as the ultimate
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 18
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
responsibility for these pension liabilities is not expected to change.
Measuring The Debt Burden
Standard & Poor's measures a university's debt burden primarily by comparing annual debt service, as well as
maximum annual debt service (MADS) with annual operating expenses. While the debt load increased across most
rating categories during fiscal 2014, the average debt service burden decreased for each rating category due to
institutions issuing debt and undertaking debt refundings at favorable interest rates. We have seen refundings continue
through fiscal 2015 because interest rates have remained low. We have also found that universities, particularly those
in ther higher rating categories, accelerated or expanded debt plans to take advantage of favorable borrowings costs in
fiscal 2015. The increased debt levels will not affect our median ratios until 2015 and are not captured in the current
data.
Chart 12
The nominal amount of debt outstanding remained relatively flat across our rated universe. Debt was fairly flat in the
'AAA' category, but increased slightly in the 'AA' and 'A' categories. This trend demonstrates institutions' need to
finance building projects with debt regardless of enrollment growth as well as continued competitive pressures at the
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 19
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
midrange universities, which require updated facilities to attract students. Many universities put major capital projects
on hold after the Great Recession, but felt comfortable issuing new-money debt following a positive market
performance in 2013 and again in 2014.
Another debt measure we evaluate is the average age of an institution's physical plant or facilities. We view deferred
maintenance as a future liability, and changes in average age of plant reflect a potential need to invest more heavily in
physical plant. We believe that tracking the age of campus infrastructure is a key ratio, because campus facilities and
attractiveness are important selling points in the highly competitive higher education market. In fiscal 2014, the
average plant age increased for all rating categories. As age of plant rises, we believe it is critical that colleges and
universities invest prudently to update and renovate facilities, with either internal funds or external funds, such as debt
or gifts. We believe institutions will continue to identify, prioritize, and complete specific deferred maintenance
projects and develop capital budgets to strategically formulate and address future maintenance efforts.
Looking forward to fiscal 2015 median data and into fiscal 2016, we anticipate that U.S. public colleges and universities
will continue to struggle with balancing the demands of growing expenditures with less state appropriations, while
addressing student affordability amid slow economic recovery. We anticipate greater debt loads as institutions
continue to issue debt at low interest rates. We also think it is unlikely that financial resource ratios will continue to
grow at the same strong rate in fiscal 2015 as in fiscal 2014 given more modest market returns thus far in fiscal 2015.
This could pressure balance sheets, in our view, and contribute to rating pressure, particularly among institutions in
the lower rating categories.
Table 2
Ratings On Public Colleges And Universities By State
Name
Rating
Outlook
Alaska
University of Alaska
AA-
Stable
Alabama
Alabama State University
B
Negative
Auburn University
AA-
Stable
Jacksonville State University
A
Stable
Troy University
A+
Stable
University of Alabama Birmingham
AA-
University of Alabama Huntsville
A+
University of Alabama
AA-
University of Montevallo
A
Stable
University of North Alabama
A
Stable
University of South Alabama
A+
Stable
Arizona State University
AA
Negative
Northern Arizona University
A+
Stable
University of Arizona
AA-
Stable
Positive
Stable
Positive
Arizona
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 20
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 2
Ratings On Public Colleges And Universities By State (cont.)
California
California State University System
AA-
Stable
University of California System
AA
Stable
Colorado
Colorado School of Mines
A
Positive
Colorado State University System
A+
Metropolitan State University of Denver
A
Stable
University of Northern Colorado
A
Stable
Western State Colorado University
BBB+
Stable
AA-
Stable
University of Delaware
AA+
Stable
Delaware State University
A-
Stable
Florida Atlantic University
A+
Stable
Florida Gulf Coast University
A
Stable
Florida International University
AA-
Stable
Florida State University
AA
Stable
University of Central Florida
AA-
Stable
University of Florida
AA
Stable
University of North Florida
A+
Stable
University of South Florida
AA-
Stable
A+
Stable
Iowa State University of Science and Technology
AA
Stable
State University of Iowa (S U I)
AA
Stable
University of Northern Iowa
A
Stable
Boise State University
A+
Stable
Idaho State University
A
Stable
University of Idaho
A+
Stable
Negative
Connecticut
University of Connecticut
Delaware
Florida
Hawaii
University of Hawaii
Iowa
Idaho
Illinois
Eastern Illinois University
A-
Negative
Governors State University
A-
Negative
Illinois State University
A+
Negative
Northeastern Illinois University
A-
Negative
Southern Illinois University
A
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
Stable
JULY 10, 2015 21
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 2
Ratings On Public Colleges And Universities By State (cont.)
University of Illinois
AA-
Western Illinois University
A-
Stable
Negative
Indiana
Ball State University
AA-
Stable
Indiana University
AA+
Stable
Purdue University
AA+
Stable
University of Southern Indiana
A
Stable
Emporia State University
A
Stable
Fort Hays State University
A
Stable
Kansas State University
AA-
Stable
Pittsburg State University
A-
Stable
University of Kansas
AA
Kansas
Negative
Kentucky
Eastern Kentucky University
A
Stable
Northern Kentucky University
A
Stable
University of Kentucky
AA
Stable
University of Louisville
AA-
Stable
Western Kentucky University
A
Stable
Louisiana
Nicholls State University
A-
CWNEG
University of Louisiana Lafayette
A
CWNEG
Massachusetts
University of Massachusetts
AA-
Stable
Worcester State University
A
Stable
Morgan State University
A+
Stable
University System of Maryland
AA+
Negative
AA-
Negative
Maryland
Maine
University of Maine System
Michigan
Central Michigan University
A+
Eastern Michigan University
BBB+
Ferris State University
A
Grand Valley State University
A+
Stable
Lake Superior State University
BBB+
Stable
Michigan State University
AA+
Northern Michigan University
A
Negative
Saginaw Valley State University
A
Stable
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
Stable
Stable
Positive
Stable
JULY 10, 2015 22
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 2
Ratings On Public Colleges And Universities By State (cont.)
University of Michigan
AAA
Stable
Wayne State University
AA-
Western Michigan University
A
Stable
Minnesota State College & University
AA-
Stable
University of Minnesota
AA
Stable
Missouri Southern State University
A-
Stable
Missouri State University
A+
Stable
Missouri Western State University
A-
Stable
Southeast Missouri State University
A
Stable
University of Central Missouri
A
Positive
University of Missouri System
AA+
Stable
Delta State University
A+
Stable
University of Mississippi
AA
Stable
University of Southern Mississippi
A
Stable
Montana State University
A+
Stable
University of Montana
A+
Stable
East Carolina University
AA-
Stable
Fayetteville State University
A-
Stable
North Carolina State University at Raleigh
AA
Stable
University of North Carolina at Chapel Hill
AAA
Stable
University of North Carolina at Charlotte
A+
Stable
University of North Carolina at Greensboro
A
Stable
University of North Carolina at Pembroke
A-
Stable
Winston-Salem State University
A-
Stable
Bismarck State College
A
Stable
Mayville State University
A-
Stable
Minot State University
A
Stable
North Dakota State University
AA-
Stable
University of North Dakota
AA-
Stable
Valley City State University
A-
Stable
Nebraska State College
A+
Stable
University of Nebraska System
AA
Positive
Negative
Minnesota
Missouri
Mississippi
Montana
North Carolina
North Dakota
Nebraska
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 23
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 2
Ratings On Public Colleges And Universities By State (cont.)
New Hampshire
University System of New Hampshire
A+
Positive
New Jersey
College of New Jersey
A
Stable
Kean University
A-
Stable
New Jersey Institute of Technology
A
Stable
Ramapo College
A
Stable
Rowan University
A
Stable
Rutgers University
AA-
Negative
New Mexico
New Mexico Institute of Mining & Technology
A+
Stable
New Mexico State University
AA
Negative
University of New Mexico
AA
Stable
AA-
Stable
City University of New York
AA-
Stable
State University of New York
AA-
Stable
Bowling Green State University
A+
Stable
Cleveland State University
A+
Stable
Kent State University
A+
Stable
Miami University
A+
Stable
Ohio State University
AA
Stable
Ohio University
A+
Stable
University of Cincinnati
AA-
Stable
University of Toledo
A
Stable
Youngstown State University
A+
Nevada
Nevada System of Higher Education
New York
Ohio
Negative
Oklahoma
Cameron University
A-
Stable
Northeastern State University
A
Stable
Oklahoma State University
AA-
Stable
Southwestern Oklahoma State University
A
Stable
University of Oklahoma Health Sciences Center
AA-
Stable
University of Oklahoma
AA-
Stable
Oregon
Oregon Health & Science University
A+
University of Oregon
AA-
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
Positive
Stable
JULY 10, 2015 24
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 2
Ratings On Public Colleges And Universities By State (cont.)
Pennsylvania
Indiana University of Pennsylvania
A-
Stable
Pennsylvania State University
AA
Stable
Temple University
A+
Stable
University of Pittsburgh
AA+
Stable
Puerto Rico
University of Puerto Rico
CCC+
CWNEG
Rhode Island
University of Rhode Island
A+
Stable
AA-
Stable
A+
Stable
Texas A&M University
AA+
Stable
Texas Tech University System
AA
Positive
Texas Woman's University
A
Positive
University of Houston
AA
Stable
University of Texas System
AAA
Stable
South Carolina
Clemson University
South Dakota
South Dakota University System
Texas
Utah
University of Utah
AA
Positive
College of William & Mary
AA
Stable
Old Dominion University
A+
Stable
University of Virginia
AAA
Stable
Virginia Commonwealth University
AA-
Stable
Virginia Polytechnic Institute & State University
AA
Stable
University of Vermont & State Agricultural College A+
Stable
Virginia
Vermont
Vermont State College
A
Negative
Washington
University of Washington
AA+
Stable
Washington State University
AA-
Stable
Western Washington University
A+
Stable
A
Stable
AA-
Stable
West Virginia
West Virginia University
Wyoming
University of Wyoming
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 25
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 2
Ratings On Public Colleges And Universities By State (cont.)
* Ratings as of May 15, 2015
Table 3
Ratings On Public Colleges And Universities By Rating Category
Name
State
Outlook
University of Michigan
MI
Stable
University of North Carolina at Chapel Hill
NC
Stable
University of Texas System
TX
Stable
University of Virginia
VA
Stable
Indiana University
IN
Stable
Michigan State University
MI
Stable
Purdue University
IN
Stable
Texas A&M University
TX
Stable
AAA
AA+
University of Delaware
DE
Stable
MO
Stable
PA
Stable
University of Washington
WA
Stable
University System of Maryland
MD
Negative
Arizona State University
AZ
Negative
College of William & Mary
VA
Stable
Florida State University
FL
Stable
Iowa State University of Science and Technology
IA
Stable
New Mexico State University
NM
Negative
North Carolina State University at Raleigh
NC
Stable
The Ohio State University
OH
Stable
Pennsylvania State University
PA
Stable
University of Missouri System
University of Pittsburgh
AA
State University of Iowa (S U I)
IA
Stable
Texas Tech University System
TX
Positive
University of California System
CA
Stable
University of Florida
FL
Stable
University of Houston
TX
Stable
University of Kansas
KS
Negative
University of Kentucky
KY
Stable
University of Minnesota
MN
Stable
University of Mississippi
MS
Stable
University of Nebraska System
NE
Positive
University of New Mexico
NM
Stable
University of Utah
UT
Positive
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 26
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 3
Ratings On Public Colleges And Universities By Rating Category (cont.)
Virginia Polytechnic Institute & State University
VA
Stable
Auburn University
AL
Stable
Ball State University
IN
Stable
California State University System
CA
Stable
City University of New York
NY
Stable
Clemson University
SC
Stable
East Carolina University
NC
Stable
Florida International University
FL
Stable
Kansas State University
KS
Stable
MN
Stable
Nevada System of Higher Education
NV
Stable
North Dakota State University
ND
Stable
Oklahoma State University
OK
Stable
Rutgers University
NJ
Negative
State University of New York
NY
Stable
University of Alabama Birmingham
AL
Positive
University of Alabama
AL
Positive
University of Alaska
AK
Stable
University of Arizona
AZ
Stable
University of Central Florida
FL
Stable
University of Cincinnati
OH
Stable
University of Connecticut
CT
Stable
IL
Stable
KY
Stable
University of Maine System
ME
Negative
University of Massachusetts
MA
Stable
University of North Dakota
ND
Stable
University of Oklahoma Health Sciences Center
OK
Stable
University of Oklahoma
OK
Stable
University of Oregon
OR
Stable
University of South Florida
FL
Stable
University of Wyoming
WY
Stable
Virginia Commonwealth University
VA
Stable
Washington State University
WA
Stable
MI
Negative
ID
Stable
Bowling Green State University
OH
Stable
Central Michigan University
MI
Stable
Cleveland State University
OH
Stable
AA-
Minnesota State College & University
University of Illinois
University of Louisville
Wayne State University
A+
Boise State University
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 27
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 3
Ratings On Public Colleges And Universities By Rating Category (cont.)
Colorado State University System
CO
Negative
Delta State University
MS
Stable
Florida Atlantic University
FL
Stable
Grand Valley State University
MI
Stable
IL
Negative
Kent State University
OH
Stable
Miami University
OH
Stable
Missouri State University
MO
Stable
Montana State University
MT
Stable
Morgan State University
MD
Stable
Nebraska State College
NE
Stable
New Mexico Inst of Mining & Tech
Illinois State University
NM
Stable
Northern Arizona University
AZ
Stable
Ohio University
OH
Stable
Old Dominion University
VA
Stable
Oregon Health & Science University
OR
Positive
South Dakota University System
SD
Stable
Temple University
PA
Stable
Troy University
AL
Stable
University of Alabama Huntsville
AL
Stable
University of Hawaii
HI
Stable
University of Idaho
ID
Stable
University of Montana
MT
Stable
University of North Carolina at Charlotte
NC
Stable
University of North Florida
FL
Stable
University of Rhode Island
RI
Stable
University of South Alabama
AL
Stable
University of Vermont & State Agricultural College
VT
Stable
University System of New Hampshire
NH
Positive
Western Washington University
WA
Stable
Youngstown State University
OH
Negative
Bismarck State College
ND
Stable
College of New Jersey
NJ
Stable
Colorado School of Mines
CO
Positive
Eastern Kentucky University
KY
Stable
Emporia State University
KS
Stable
Ferris State University
MI
Positive
Florida Gulf Coast University
FL
Stable
Fort Hays State University
KS
Stable
Idaho State University
ID
Stable
A
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 28
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 3
Ratings On Public Colleges And Universities By Rating Category (cont.)
Jacksonville State University
AL
Stable
Metropolitan State University of Denver
CO
Stable
Minot State University
ND
Stable
New Jersey Institute of Technology
NJ
Stable
Northeastern State University
OK
Stable
Northern Kentucky University
KY
Stable
Northern Michigan University
MI
Negative
University of Louisiana Lafayette
LA
CW Negative
Ramapo College
NJ
Stable
Rowan University
NJ
Stable
Saginaw Valley State University
MI
Stable
MO
Stable
IL
Stable
Southwestern Oklahoma State University
OK
Stable
Texas Woman's University
TX
Positive
Southeast Missouri State University
Southern Illinois University
University of Central Missouri
MO
Positive
University of Montevallo
AL
Stable
University of North Alabama
AL
Stable
University of North Carolina at Greensboro
NC
Stable
University of Northern Colorado
CO
Stable
University of Northern Iowa
IA
Stable
University of Southern Indiana
IN
Stable
University of Southern Mississippi
MS
Stable
University of Toledo
OH
Stable
Vermont State College
VT
Negative
West Virginia University
WV
Stable
Western Kentucky University
KY
Stable
Western Michigan University
MI
Stable
MA
Stable
Cameron University
OK
Stable
Delaware State University
DE
Stable
Worcester State University
A-
Eastern Illinois University
IL
Negative
Fayetteville State University
NC
Stable
Governors State University
IL
Negative
Indiana University of Pennsylvania
PA
Stable
Kean University
NJ
Stable
Mayville State University
ND
Stable
Missouri Southern State University
MO
Stable
Missouri Western State University
MO
Stable
LA
CW Negative
Nicholls State University
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 29
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 3
Ratings On Public Colleges And Universities By Rating Category (cont.)
Northeastern Illinois University
IL
Negative
Pittsburg State University
KS
Stable
University of North Carolina at Pembroke
NC
Stable
Valley City State University
ND
Stable
Western Illinois University
IL
Negative
NC
Stable
MI
Stable
Lake Superior State University
MI
Stable
Western State Colorado University
CO
Stable
Alabama State University
AL
Negative
University of Puerto Rico
PR
CW Negative
Winston-Salem State University
BBB+
Eastern Michigan University
Speculative Grade
Table 4
Glossary of Ratios and Terms
Metric or Ratio
Definition
Enrollment and Demand ratios
FTE enrollment
Total students enrolled on a full-time equivalent basis
Percent undergraduate (%)
Total number of undergraduate students/total students
Freshman acceptance rate (%)
Number of freshman accepted/total number of freshman applications
Average SAT scores
Average combined math and reading SAT scores for entering freshman
Average ACT scores
Average ACT scores for entering freshman
Retention rate (%)
Freshmen students who matriculated for sophomore year/total freshman who completed their first
year
5 year graduation rate (%)
Students who graduate from the university within 5 years/total students in the freshman cohort
6 year graduation rate (%)
Students who graduate from the university within 6 years/total students in the freshman cohort
Percent in-state students (%)
Students enrolled who come from within the state/ total students enrolled
Financial Performance
Net adjusted operating income (%)
Total adjusted operating income/total adjusted operating expenses
Revenue diversity
State appropriations (%)
Total state operating appropriations/ total operating revenues
Tuition (%)
Gross tuition and fees/total operating revenues
Grants & contracts (%)
Government grants & contracts/total operating revenues
Gifts & pledges (%)
Gifts & pledges/total operating revenues
Investment & endowment income (%)
Endowment spending income & investment income/total operating revenues
Auxiliary operations (%)
Auxiliary system operating revenues/total operating revenues
Financial aid and expense ratios
Financial aid burden (%)
Total financial aid expense/ total adjusted operating expenses
Instruction (%)
Instructional expense/ total adjusted operating expenses
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 30
1416223 | 301932398
U.S. Public College And University Fiscal 2014 Median Ratios: A Growing Divide Between Ratings Categories
Table 4
Glossary of Ratios and Terms (cont.)
Endowment
University endowment market value
($000s)
Market value of endowment as of FYE
Foundation endowment market value
($000s)
Market value of university foundation as of FYE
Financial resource ratios
Cash & investments to operations (%)
Total cash & investments/total adjusted operating expenses
Adjusted Unrestricted Net Assets to
operations (%)
Adjusted UNA / total adjusted operating expenses
Cash & investments to debt (%)
Total cash & investments/total debt
Adjusted Unrestricted Net Assets to debt
(%)
Adjusted UNA/total debt
Debt ratios
Total outstanding debt ($000s)
Outstanding debt as shown on face of balance sheet
Current debt service burden (%)
Current debt service/total adjusted operating expenses
MADS burden (%)
Maximum annual debt service/total adjusted operating expenses
Average age of plant
Accumulated depreciation/depreciation expenses (years)
OPEB as % total liabilities
Total OPEB liabilities/ total liabilities
Full-time equivalent ratios
Total debt per FTE
Total debt/FTE students ($)
State appropriations per FTE
State appropriations/ FTE students ($)
Endowment per FTE
Market Value Endowment/FTE students ($)
Definitions
Total adjusted operating revenues*
Total operating revenues (from the audit) + institutionally funded financial aid + endowment
spending - realized and unrealized gains.
Total adjusted operating expenses
Total operating expenses (from the audit) + institutionally funded financial aid + interest expense
Adjusted unrestricted net assets (UNA)
UNA (from the audit) + UNA of foundation + debt service reserves + LT compensated absences (if
applicable)
Cash & Investments
Total cash, short term and long term investments
*Adjustments vary based on audit presentation
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 31
1416223 | 301932398
Copyright © 2015 Standard & Poor's Financial Services LLC, a part of McGraw Hill Financial. All rights reserved.
No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part
thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval
system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be
used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or
agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not
responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for
the security or maintenance of any data input by the user. The Content is provided on an "as is" basis. S&P PARTIES DISCLAIM ANY AND ALL
EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT'S FUNCTIONING
WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no
event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential
damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by
negligence) in connection with any use of the Content even if advised of the possibility of such damages.
Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and
not statements of fact. S&P's opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase,
hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to
update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment
and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does
not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be
reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives.
To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain
regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P
Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any
damage alleged to have been suffered on account thereof.
S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective
activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established
policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process.
S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P
reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites,
www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription) and www.spcapitaliq.com
(subscription) and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information
about our ratings fees is available at www.standardandpoors.com/usratingsfees.
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT
JULY 10, 2015 32
1416223 | 301932398