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Financial Review Year Ended June 30, 2014. Plante/Moran Audit Results of the Audit Presented to the Finance and Audit Committee on October 6 Unmodified.

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Presentation on theme: "Financial Review Year Ended June 30, 2014. Plante/Moran Audit Results of the Audit Presented to the Finance and Audit Committee on October 6 Unmodified."— Presentation transcript:

1 Financial Review Year Ended June 30, 2014

2 Plante/Moran Audit Results of the Audit Presented to the Finance and Audit Committee on October 6 Unmodified opinion which is the highest you can receive There were no significant adjustments proposed by Plante/Moran There were no significant disagreements with management on financial accounting and reporting matters Management cooperated completely and allowed complete access to the books and records 2

3 Key Indicators Balance Sheet Asset growth Net Position growth Cash and Cash Equivalent growth Investment growth Days of Cash and Investments on Hand Long Term Debt reduction 3

4 FY 2014 Results Balance Sheet FY2014FY2013 Increase (Decrease) Net Assets1,149,3081,150,600-1,292 Net Position Growth675,285650,54924,736 Cash and Cash Equivalents66,75766, Long Term Investments University190,175186,1294,046 Foundation232,179193,13639,043 Days of Cash and Investments on Hand Without Foundation With Foundation Long Term Debt316,466332,549-16,083 4

5 Summary Balance Sheet Positives Net position grew $24.7 million as a result of a reduction in non- current liabilities Foundation long-term investments increased $39.0 million Days Cash and Investments(including Foundation) increased 18 days Long Term Debt decreased $16.0 million Neutral Cash and Cash Equivalents remained nearly the same. University Investments remained nearly the same. Negatives Net assets decreased $1.3 million 5

6 Key Indicators Income Statement Operating Revenue growth Operating Expense growth State Share of Instruction growth Income before Investment Income, Gifts and Capital Appropriations Investment Income growth Gifts/Capital Appropriations growth 6

7 FY2014 Results Income Statement FY2014FY2013 Increase (Decrease) Operating Revenue Growth688,878690,232-1,354 State Share of Instruction103,357104,451-1,094 Operating Expense843,684838,0825,602 Income before Investment Income and gifts and Capital Appropriations-31,243-34,8393,596 Investment Income40,67231,6529,020 Gifts/Capital Appropriations15,36612,4792,887 7

8 Summary Income Statement Positives Investment income increased $9.0 million Income before Investments, Gifts, and Capital Appropriations increased $3.6 million Gifts and Capital Appropriations increased $2.9 million Negatives Operating Revenue decreased $1.1 million SSI decreased $1.1 million Operating Expense increased $5.6 million, however that only equates to 0.7%. 8

9 Key Indicators Cash Flow Fully Funded Depreciation Positive increase in Cash and Cash Equivalents 9

10 FY2014 Results Cash Flow FY2014FY2013 Increase (Decrease) Fully funded depreciation Capital Purchases54,89780,830-25,933 Depreciation56,59653,8292,767 Difference-1,69927,001-28,700 Net Cash from operating activities and non-capital financing activities Net cash used in operating activities-100,365-84,713-15,652 Net cash provided by non-capital financing activities143,968147,924-3,956 Total43,60363,211-19,608 Net Cash from operating activities as a percent of operating revenue and SSI5.50%7.95%-2.45% Cash flows from capital and related financing activities-71,391-73,0521,661 Cash flow from investing activities28,41413,19315,221 Total change in cash and cash equivalents6263, ,726 10

11 Summary Cash Flow Positives Cash Flow from Investing Activities increased $15.2 million Neutral Depreciation and Capital Purchases were relatively equal for the year Negative Net Cash from Operating Activities declined $19.6 million Net Change in Cash and Cash Equivalents was $27.8 less than Cash from Investing Activities. 11

12 FY 2015 Budget Notes: The UT FY2015 Budget does not include all funds of the University. It excludes UTP, Malpractice Captive and some smaller funds. The FY 2014 actual includes all funds of the University, thus the FY budget to FY actual comparison is not the complete picture. 12 Income Statement FY 2015 Budget FY 2014 Actual Difference Operating Revenue Growth669,723688,878-19,155 State Share of Instruction113,678103,35710,321 Operating Expense808,117843,684-35,567 Income before Investment Income and gifts0 and Capital Appropriations-39,013-31,243-7,770 Investment Income4,80040,672-35,872 Gifts/Capital Appropriations19,26715,3663,901

13 Summary Income Statement Positives SSI is budgeted to increase $10.3 million Gifts and Capital Appropriations is budgeted to increase $3.9 million Negatives Investment income is budgeted at $4 million which represents a return of 2.5% Income before Investment Income, Gifts and Capital Appropriations is budgeted at $(39 million ) which is a budgeted decrease of $7.7 million 13

14 FY 2015 Budget 14 Cash Flow FY 2015 Budget FY 2014 Actual Difference Fully funded depreciation Capital Purchases29,80054,897-25,097 Depreciation58,59656,5962,000 Funded(unfunded) depreciation-28,796-1,699-27,097 Net Cash from operating activities and non-capital financing activities Net cash used in operating activities-79, ,36520,567 Net cash provided by non-capital financing activities121,145143,968-22,823 Total41,34743,603-2,256 Net Cash from operating activities as a percent of operating revenue and SSI5.22%5.50%-0.28% Cash flows from capital and related financing activities-46,017-71,391-25,374 Cash flow from investing activities4,80028,414-23, %15.27% Total change in cash and cash equivalents

15 Summary Cash Flow Positives Net cash used in Operating Activities is budgeted to improve by $20.5 million Neutral Net cash from Operating Activities and Non Capital Financing Activities is budgeted to remain relatively constant. The budgeted change in Cash and Cash Equivalents will remain constant. Negatives Our capital purchases are budgeted to be $28.8 million less than depreciation. (We are budgeted to reinvest in our capital less than we are depreciating our capital) 15

16 Conclusions Our financial position continued to improve through 2014 as indicated in $25.5 million improvement in Net position, primarily as a result of $40.6 million in investment earnings and a $16.1 million reduction in Long Term Debt. We face challenges moving forward in 2015 and beyond: In 2015 our budgeted capital purchases are $28.8 million less than depreciation The Net Cash from Operating Activities did not cover our Capital or Related Financing Activities. The shortfall was $27.8 million in FY14. We must continue to grow our Net Position and we must commit to funding depreciation and reducing the shortfall in our Net Cash from Operating Activities. 16


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