ML13079A218
| ML13079A218 | |
| Person / Time | |
|---|---|
| Site: | University of Missouri-Columbia |
| Issue date: | 03/12/2013 |
| From: | Univ of Missouri - Columbia |
| To: | Office of Nuclear Reactor Regulation |
| References | |
| TAC ME1580 | |
| Download: ML13079A218 (90) | |
Text
University of Missouri System COLUMBIA I KANSAS CITY I ROLLA I ST.LOUIS I
201 FIANCAL REOR
U TM University of Missouri System COLUMBIA I KANSAS CITY I ROLLA I ST.LOUIS 2012 FINANCIAL REPORT Ad vancing Missouri,
This page is intentionaLLy Left bLank Table of Contents 4 Message from the President 5 University of Missouri System Statewide Reach 6 Curators of the University of Missouri 7 University of Missouri System General Officers 8 The University of Missouri System 13 Financial Information 14 Management Responsibility of Financial Statements 15 Management's Discussion and Analysis 30 Independent Auditor's Report 32 Statement of net assets 34 Statement of revenues, expenses and changes in net assets 36 Statement of cash flow 38 Statement of plan net assets 39 Notes to financial statements 69 Required Supplementary Information 71 Statistical Section Advancing Missouri
Message from the President Wherever you look, the impact of the University of Missouri System can be seen and f'elt.
We educate the state's workfiorce. We are your doctors, dentists, pharmacists and medical researchers. We drive innovation and help small businesses thrive.
We deliver technology, health care to the underserved and experts in nearly every subject.
In short, we Advance Missouri. And every person in it. Every (lay.
It is a responsibility-and obligation-we take seriously. As the state's premier I A public fbur-year research university, we are committed to improving the lives of all Missourians and the state we love.
We also feel equal responsibility to be good stewards of state resources. As you'll note in the following pages, our financial position and health remains strong and sound. We have been able to maintain our strong financial position due to our diversified funding sources and historically low borrowing costs that have allowed us to leverage our growth.
At the same time, we recognize the challenges before us: uncertainty in state funding., increased enrollment growth, limited tuition increases and decreased investment returns. We know that in order to continue to thrive, we nmust chart a new course that helps ensure our financial vitality well into the future. This will require strategic thinking about the university's areas of focus and how to apply precious resources to those endeavors.
We have already identified strategic priorities for the university system that will focus our attention and guide our activities in the coming months. We also continue to measure and chart our progress through our accountability measures, which document our performance and serve as a guide for both our areas of excellence and need for continuing improvement.
This information and more is available on our website at www.umsystem.edu. We invite you to peruse our successes, review our strategic priorities and interact with us online or through any number of social media channels.
Sincerely, Timothy M. Wolfe TM President, University of Missouri System
University of Missouri System Statewide Reach SL Key School Districts Served by
÷4 UM System Campuses eMINTS Investing in MOREnet Sites Innovation (i3) Project d Research Parks /I Small Business & Technology Missouri Telehealth W Business Incubators Development Centers Network Sites z Agriculture Research Stations Health Centers & Affiliates Counties Served by w Extension Centers U . U r-I
Curators of the University of Missouri The Board of Curators, the governing body of the University of Missouri, consists of nine members who are appointed by the governor, by and with the advice and consent of the Senate; provided, that at least one but no more than two shall be appointed from each congressional district, and no person shall be appointed a curator who shall not be a citizen of the United States, and who shall not have been a resident of the state of Missouri two years prior to his or her appointment. Not more than five curators shall belong to any one political party.
David R. Bradley Wayne Goode Donald L. Cupps D)on M. Downing St.Joseph, Chairman St. Louis, Vice Chairman Cassville Webster Groves Termn expires: Jan. 1,2015 Term expires: Jan. 1 2015 Term expires: Jan. 1, 2017 Term expires: Jan. 1,22015 Warren K. Erdmamn Pamela Quigg Henrickson David L. Steward Amy (.Johnson Kansas City Jefferson City St. Louis Student Representative Tern expires:Jan. 1,2013 Term expires:Jan. 1,2017 Term expires:Jan. 1,2017 to the Board of Curators, UMK Term expires:Jan. 1,2014 Two Seats are Vacant.
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University of Missouri System General Officers Timothy M. Wolfe StephenJ. Owens, JD Gary K. Allen, DVM, PhD Steven W. Graham, PhD President General Counsel Vice President for Senior Associate Vice President Information Technology for Academic Affairs Stephen C. Knorr Natalie "Nildi" Krawitz Michael F. Nichols, PhD Elizabeth "Betsy" Rodriguez, PhD Vice President for Vice President for Finance Vice President for Research Vice President for Government Relations & Administration & Economic Development Human Resources BradyJ. Deaton, PhD Thomas F. George, PhD Leo E. Morton Cheryl B. Schrader, PhD Chancellor, University of Chancellor, University of Chancellor, University of Chancellor, Missouri Missouri-Columbia Missouri-St. Louis Missouri-Kansas City University of Science and Technology University of Missouri System Finance Staff Natalie "Nikki" Krawitz, Vice President for Finance & Administration Jane E. Closterman, Controller Tom Richards, Treasurer Cuba Plain, Assistant Vice President for Budget Planning and Development Univrsiy Sytem201 o Misour Fiaca Rprn-u 7
University of Missouri-Columbia Considered one of the nation's top-tier institutions, the University of Missouri-Columbia has a reputation of excellence in teaching and research and is the flagship campus of the four-campus UM System. It is one of only 34 public universities and the only public institution in Missouri to be selected for membership in the Association of American Universities. MU is one of only six public universities in the country with degree programs in medicine, veterinary medicine and law on one campus.
D I I University of Missouri-Kansas City The University of Missouri-Kansas City is home to the nationally-ranked Institute for Entrepreneurship and Innovation in the Bloch School of Management and was ranked number one in the world for innovation management research. UMKC has long been at the heart of nurturing culture in Kansas City through renowned programs in music and dance, theater and visual arts. In addition, UMKC has four health science schools on one campus and is widely known for KCSourceLink, a program that supports small business development.
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Missouri University of Science and Technology Missouri University of Science and Technology in Rolla is one of the nation's most focused technological research universities. With 15 accredited undergraduate engineering programs, Missouri S&T provides more engineering degree options than MIT, Purdue, Illinois or Michigan, and three times the average number found at other U.S.
universities. Missouri S&T graduates are highly sought by the business community, averaging the second-highest starting salaries among all public universities in the nation.
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University of Missouri-St. Louis The University of Missouri-St. Louis is the largest university in the St. Louis region and third largest in Missouri.
UMSL boasts several nationally-ranked departments and programs, including the Department of Criminology and CriminalJustice and the International Business program. With the largest university alumni population in the region, UMSL is ranked 14th nationally in a survey of "Best College and University Civic Partnerships," which measures the economic, social and cultural impact of academic institutions on metropolitan regions.
University of Missouri Health Care University of Missouri Health Care touches the lives of Missourians across the state in myriad ways - through the quality care provided at its hospitals and clinics, the education of future health professionals offered by its health sciences schools, the specialty services delivered by University Physicians, and the life-saving research conducted.
In partnership with the Tiger Institute for Health Innovation, the health system is equipping health professionals with the most advanced technology to provide safe and effective care. University of Missouri Health Care was the only hospital in central Missouri and one of only three hospitals in the state to make U.S. News and World Report's prestigious Most Connected Hospitals 2012-13 list.
Fmm.lt epf Advncn Ml*or 1 201
University of Missouri System COLUMBIA I KANSAS CITY I ROLLA I ST.LOUIS FINANCIAL INFORMATION 1111.
Advancing MissourL Universty issouriSyste6 of' 201 F a Rpr
.a L 13
MANAGEMENT RESPONSIBILITY FOR FINANCIAL STATEMENTS October 10, 2012 The management of the University of Missouri System (the "University") is responsible for the preparation, integrity, and fair presentation of the financial statements. The financial statements, presented on pages 32 to 70, have been prepared in conformity with accounting principles generally accepted in the United States of America and, as such, include amounts based on judgments and estimates by management.
The financial statements have been audited by the independent accounting firm KPMG LLP, which was given unrestricted access to all financial records and related data, including minutes of all meetings of the Board of Curators. The University believes that all representations made to the independent auditors during their audit were valid and appropriate. KPMG's audit opinion is presented on pages 30-31.
The University maintains a system of internal controls over financial reporting, which is designed to provide reasonable assurance to the University's management and Board of Curators regarding the preparation of reliable published financial statements. Such controls are maintained by the establishment and communication of accounting and financial policies and procedures, by the selection and training of qualified personnel, and by an internal audit program designed to identify internal control weaknesses in order to permit management to take appropriate corrective action on a timely basis. There are, however, inherent limitations in the effectiveness of any system of internal control, including the possibility of human error and the circumvention of controls.
The Board of Curators, through its Audit Committee, is responsible for engaging the independent auditors and meeting regularly with management, internal auditors, and the independent auditors to ensure that each is carrying out their responsibilities and to discuss auditing, internal control, and financial reporting matters. Both internal auditors and the independent auditors have full and free access to the Audit Committee.
Based on the above, I certify that the information contained in the accompanying financial statements fairly presents, in all material respects, the financial condition, changes in net assets and cash flows of the University.
Natalie "Nikki" Krawitz Vice President for Finance and Administration University of Missouri System COLUMBIA I KANSAS CITY I ROLLA I ST. LOUIS 215 University Hall . Columbia, MO 65211. 573-882-3611 www.umsystem.edu LýAIIIIIIIIIIIIIý IZ4 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2012 and 2011 (unaudited)
Management's Discussion and Analysis provides an principles as prescribed by the Governmental overview of the financial position and activities of the Accounting Standards Board (GASB), which establishes University of Missouri System (the "University") for the financial reporting standards for public colleges and fiscal years ended June 30, 2012 and 2011, and should universities. The University's significant accounting be read in conjunction with the financial statements policies are summarized in Note 1 to the financial and notes. The University is a component unit of the statements of this report, including further information state of Missouri and an integral part of the state's on the financial reporting entity. In addition, a more Comprehensive Annual Financial Report. detailed unaudited financial report that includes campus-level financial statements is available at the This report includes five financial statements: University of Missouri, 1000 W Nifong, Building 7, Suite 300, Columbia, MO 65211, and at www.umsystem.edu
" The three financial statements for the University of through the Finance and Administration page.
Missouri and its Discretely Presented Component Unit include the Statement of Net Assets, the FINANCIAL HIGHLIGHTS Statement of Revenues, Expenses, and Changes in At June 30, 2012, the University's financial position Net Assets, and the Statement of Cash Flows, remained solid, with Total Assets of $6.4 billion. Net where applicable.
Assets, which represent the residual value of the University's assets after deducting liabilities, totaled
" The two financial statements for the University's
$4.1 billion. When operating, non-operating, and other fiduciary fund, which includes the Retirement and changes are included, Net Assets increased by the Other Postemployment Benefits Trust Funds, approximately $68 million in fiscal year (FY) 2012, are the Statement of Plan Net Assets and the driven primarily by the $42.3 million Special Item Statement of Changes in Plan Net Assets.
related to the sale of a research and diagnostic laboratory on the Columbia campus and $37.8 million The University's financial statements are prepared in increase in Private Gifts as compared to FY 2011.
accordance with U.S. generally accepted accounting 2012 Financial. Report 15
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS 3une 30, 2012 and 2011 (unaudited)
The following charts compare Total Assets, Liabilities, and Net Assets at June 30, 2012, 2011 and 2010, and the major components of changes in Net Assets for the years ended June 30, 2012, 2011 and 2010:
STATMENTOF ET ASET 02010
- 2011 32012
$7,000
$11$6,358
$6,000
$5,000
$4,000
$3,000
$1,856 $2,115 $2,273
$2,000
$1,000
$0-Total Assets Total Liabilities Net Assets STTMN OF REEUS.XESEADCAGSNNTAST 82010 02011 32012
$3,000 T
$2,500 --
$2,000 0 $1,500
$1,000
$500
$5 0 $79 $6
$0 -
Operating Revenues Operating Expenses Nonoperating Revenues, Capital Contributions, Increase (Decrease) in Net* Endowment Additions & Net Assets Specia I Item
- includes State Appropriations and Cumulative Effects of Changes in Accounting Principles 16 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS 3une 30, 2012 and 2011 (unaudited)
CONDENSED STATEMENT OF NET ASSETS indicate if the overall financial condition has improved or worsened. Assets and liabilities are generally The Statement of Net Assets presents the University's measured using current values with certain exceptions, financial position at the end of the fiscal year, including such as capital assets which are stated at cost less all assets and liabilities of the University and accumulated depreciation, and long-term debt which is segregating them into current and noncurrent stated at cost.
components. Total Net Assets is an indicator of financial condition and changes in Total Net Assets The following table summarizes the University's assets, liabilities and net assets at June 30, 2012, 2011 and 2010:
CONDNE STATEMEN OFW.U~I NET ASSETS (i *huad of dotars As of June 30, 2012 Assets Current Assets $ 940,748 Noncurrent Assets Endowment and Other Long-Term Investments 2,430,742 Capital Assets, Net 2,848,993 Other 106,659 Deferred Outflow of Resources 30,415 Total Assets and Deferred Outflow of Resources $ 6,357,557 Liabilities Current Liabilities Commercial Paper and Current Portion of Long-Term Debt $ 183,226 Long-Term Debt Subject to Remarketing Agreements 100,330 Other 651,831 Noncurrent Liabilities Long-Term Debt 1,122,312 Other 215,241 Total Liabilities 2,272,940 Net Assets Invested in Capital Assets, Net of Related Debt 1,545,227 Restricted -
Nonexpendable 771,146 Expendable 389,029 Unrestricted 1,379,215 Total Net Assets 4,084,617 Total Liabilities and Net Assets $ 6,357,557 ASSETS At June 30, 2012, the University's working capital, which is current assets less current liabilities, was $5.4 Total Assets increased by $226 million, or 3.7%, to $6.4 million, a decrease of $50.1 million from the previous billion as of June 30, 2012, compared to the prior year.
year. The largest driver of the decrease was the The increase during FY 2012 was driven primarily by purchase of a housing and parking facility at the Kansas the University continuing to expand Capital Assets City campus for $40.8 million which was financed with across all of its campuses to meet housing, Commercial Paper.
educational, and patient care needs. From FY 2010 to FY 2011, Total Assets increased by 10.7%, primarily due As a measurement of actual liquidity, working capital is to strong performance of Investments and expansion adversely impacted by the inclusion, per accounting of Capital Assets.
guidelines, of Long-Term Debt Subject to Remarketing and Commercial Paper. If Long-Term Debt Subject to 2012 Financial Report 17
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2012 and 2011 (unaudited)
Remarketing and Commercial Paper were excluded $266.6 million at June 30, 2012, also expressed as from Current Liabilities, working capital would be Current Assets of 1.40 times Current Liabilities.
The following table illustrates actual working capital, as well as working capital adjusted for Long- Term Debt Subject to Remarketing and Commercial Paper:
SUM AR OF WOKN AIA (i thuad of doI r As of June 30, 2012 Current Assets $ 940,748 Current Lia bi Iities 935,387 Working Capital, Unadjusted $ 5,361 Ratio of Current Assets to Current Liabilities (Unadjusted) 1-01 Current Assets 940,748 Current Liabilities 935,387 Less: Long-Term Debt Subj ect to Rema rketi ng and Commercial Paper (261,265)
Current Liabilities, As Adjusted 674,122 Working Capital, As Adjusted $ 266,626 Ratio of Current Assets to Current Liabilities (As Adjusted) 1A0 18 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2012 and 2011 (unaudited)
At June 30, 2012, the University held $362.8 million in FY 2012 is primarily offset by increases in cash and Cash and Cash Equivalents, an increase of $141.5 cash equivalents due to less working capital being million from June 30, 2011. The June 30, 2011 cash invested at June 30, 2012. The financial markets balances of $221.3 million were $106.0 million lower deteriorated slightly during FY 2012; net realized and than June 30, 2010. The increase in cash at June 30, unrealized gains and losses declined by $219.6 million, 2012 is largely due to timing differences as less going from a net gain of $192.1 million in FY 2011 to a working capital was invested at June 30, 2012 as net loss of $27.5 million in FY 2012. The overall change compared to June 30, 2011. Short-Term and Long- in investment returns was most evident in the Term Investments totaled $2.6 billion as of June 30, Endowment Pool, which experienced a net loss of 2012, representing a decrease of 4.8% from the prior (0.9%) in FY 2012 as compared to a net gain of 21.5%
year as compared to a 27.4% increase from FY 2010 to in FY 2011.
FY 2011. The decrease in investment balances during Composition and returns of the University's various investment pools for the years ended June 30, 2012 and 2011 were as follows:
CASH,~~
CAS ~
EQIALNS ANS NVSMET June 30,2012 Short-Term Benchmark Cash and Cash and Long-Term Total Index Equivalents Investments Total Return Return (A)
General Pool Short-Term Funds $ 273,102 $ 1,178,307 $ 1,451,409 2.9% 1.4%
Endowment Pool 15,528 245,725 261,253 -0.9% 0.5%
Endowment Funds Endowment Pool 62,049 981,916 1,043,965 -0.9% 0.5%
Fixed Income Pool 4,242 73,543 77,785 5.1% 8.0%
Other 7,859 109,397 117,256 N/A N/A Total 362,780 $ 2,588,888 $ 2,951,668 (A) Benchmark index returnsare calculated by independent investment consultan ts based on returnsof market indicies.
2012 Financial. Report 19
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2012 and 2011 (unaudited)
At June 30, 2012, Accounts Receivable, Net of $274.1 At June 30, 2012, the University's investment in Capital million included a $31.4 million receivable related to Assets totaled $2.8 billion compared to $2.6 billion at medical resident FICA refund claims and accrued June 30, 2011. The University added $367.7 million in interest income on the claims, for periods ending capital assets, net of retirements, during FY 2012, before April 1, 2005 due to notification from the offset by depreciation of $160.9 million for the year. FY Internal Revenue Service (IRS) of its intent to honor 2011 capital asset additions of $262.9 million, net of these claims. The net FICA refund to the University, retirements, were offset by $155.1 million in after settlements of $21.5 million to former medical depreciation and transfers.
residents and other third-party entities, is $6.8 million plus $3.1 million in interest income.
Note 6 presents additional information on changes by asset classification; major capital projects either substantially completed in FY 2012 or ongoing are shown in the following table:
Expendftures Prjet Th-og Campus Budget June30,212 SourcenofFundi Columbia:
Renovation of Mark Twain Hall $ 21,700,000 $ 5,400,000 Revenue Bonds Renovation of Johnston and Wolpers Halls 42,800,000 1,300,000 Campus Reserves Power Plant - Combined Heat & Power Upgrade 71,700,00 64,300,000 Revenue Bonds, Campus Reserves Patient Care Tower (University Health Care) 203,000,000 103,100,000 RevenueBonds, Campus Reserves, Gifts Kansas City:
Oak Street Parking Structure 23,100,000 21,500,000 Revenue Bonds Bloch School of Management Building Addition 22,100,000 2,400,000 Gifts Missouri S&T:
Geothermal Energy Project $ 32,400,000 $ 3,300,000 Revenue Bonds Total Liabilities were $157.6 million higher at June 30, million at June 30, 2012, 2011 and 2010, respectively.
2012 as compared to June 30, 2011, and $259.5 million The variable rate demand bonds have final contractual higher at June 30, 2011 as compared to June 30, 2010. maturities ranging from fiscal years 2031 to 2036.
Significant changes in Current Liabilities at June 30, Despite contractual maturities beyond one year, these 2012 include a $130.7 million increase in Investment variable rate demand bonds are classified as current Settlements Payable for purchases of investments liabilities because the University is ultimately the sole occurring on or before June 30, but settling after June source of liquidity should the option to tender be 30; and a $69.0 million decrease in Collateral Held for exercised by the bondholder.
Securities Lending. The Derivative Instrument Liability increased by $31.2 million, which represents the On October 21, 2011, the Board of Curators approved change in fair market value of the University's interest the University's Commercial Paper Program, which rate swaps. Investment Settlements Payable and authorizes the periodic issuance of up to an aggregate Derivative Instrument Liability, represented the largest outstanding principal amount of $375 million. During increases in liabilities at June 30, 2012. fiscal year 2012, the University issued $160.9 million of Commercial Paper to fund the purchase of a housing Current Liabilities include long-term variable rate and parking facility on the Kansas City campus and demand bonds subject to remarketing agreements refund System Facilities Revenue Bonds, Series 2000B, totaling $100.3 million, $220.9 million and $223.7 Series 2001A, and Series 2006B.
20 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2012 and 2011 (unaudited)
Non Current Liabilities represent those commitments With respect to the Series 2010A bonds, the University beyond one year. On May 2, 2012, the University will receive a cash subsidy payment from the United issued $105.2 million in Series 2012A System Facilities States Treasury in an amount equal to 35% of the Revenue Bonds. Proceeds from issuance of the Series interest payable on each interest payment date. The 2012A Bonds are being used to refund all or a portion all-in-true interest cost of the Series 2010A bonds, of Series 2003A bonds, Series 2006A bonds, Series after taking into account the 35% interest payment 2007A bonds, and paying cost of issuance of the Series from the federal government is 3.8%. The Series 2012A bonds. The all-in-true interest cost of the Series 2010A bonds were Aal and AA+ rated by Moody's and 2012A bonds is 1.7%. Standard & Poor's, respectively. Proceeds from issuance of the Series 2010A bonds are being used to On August 3, 2011, the University issued $54.1 million finance construction or renovation of housing facilities in Series 2011 System Facilities Revenue Bonds. on the Columbia, Kansas City, and Missouri Science Proceeds from issuance of the Series 2011 bonds are and Technology (Missouri S&T) campuses, energy being used to refund all or a portion of Series 1998A management improvements on the Columbia and bonds, 2001B bonds, Series 2003B Bonds, and paying Missouri S&T campuses, construction of a new parking the cost of issuance of the Series 2011 bonds. The all- structure on the Kansas City campus, new patient care in-true interest cost of the Series 2011 bonds is 3.2%. tower and Ellis Fischel Cancer Center relocation at Health Care, and renovation, furnishing and equipping On December 21, 2010, the University issued $252.3 various other facilities, and to finance capitalized million in taxable Series 2010A System Facilities interest and certain costs of issuance.
Revenue Bonds designated as "Build America Bonds" under the Internal Revenue Code of 1986, as amended.
The following is a summary of long-term debt by type of debt instrument:
LONGTR DEBT (i thuand of dLa.
As of June 30, 2012 System Facilities Revenue Bonds $ 1,206,695 Unamortized Premium and Loss on Defeasance 26,661 Total Bonds Payable 1,233,356 Capital Lease Obligations 6,616 Notes Payable 4,961 Commercial Paper 160,935 Total Long-Term Debt $ 1A405,868 Contractual Maturities Within One Year Bonds Payable- Fixed Rate $ 20,875 Bonds Payable - Variable Rate Demand 420 Notes Payable 300 Capital Lease Obligations 696 Commercial Paper 160,935 Total Contractual Maturities Within One Year $ 183,226 2012 Financial Report 21
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2012 and 2011 (unaudited)
NET ASSETS million in the year ended June 30, 2011. In FY 2010, changes in total Net Assets included a $6.2 million Net Assets represent the value of the University's decrease due to the effects of changes in accounting assets after liabilities are deducted. The University's principles (GASB Statement No. 53, Accounting and total Net Assets increased by $68.4 million during the Financial Reporting for Derivative Instruments).
year ended June 30, 2012, after increasing by $335.5 The distribution of the Net Asset balances, including additional details on unrestricted net assets by fund type, as of June 30, 2012, are as follows:
TOANTSES-$.1*LO Total Net Assets are reflected in the four component Restricted Nonexpendable Net Assets include categories as follows: endowment and similar assets that are subject to externally imposed stipulations for the principal to be Invested in Capital Assets, Net of Related Debt, maintained in perpetuity by the University. Unrealized represents the University's investment in capital market losses contributed to a $17.7 million, or 2.2%,
assets, net of accumulated depreciation and decrease in Restricted Nonexpendable Net Assets outstanding debt related to acquisition, construction during FY 2012. Realized and unrealized market gains or improvement of those assets. This category were largely responsible for a $109.4, or 16.1%,
increased by $29.1 million in FY 2012 and $31.0 million increase during FY 2011.
in FY 2011. This increase is largely driven by the construction the new Patient Tower for Health Care that is being partially funded with Unrestricted Net Assets.
22 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2012 and 2011 (unaudited)
Restricted Expendable Net Assets are resources that management or Board of Curators. This category are subject to externally imposed stipulations increased by $28.3 million, or 2.1%, to $1.4 billion at regarding their use, but are not required to be June 30, 2012 after increasing by $187.0 million, or maintained in perpetuity. This category increased by 16.1%, in FY 2011. Maintaining adequate levels of
$28.7 million, or 8.0%, during FY 2012 and $8.1 million, unrestricted net assets is one of several key factors or 2.3%, in FY 2011. As of June 30, 2012, this category that have enabled the University to maintain its Aal includes: credit rating. As of June 30, 2012 and 2011, University Health Care designated funds totaled $339.5 million
- $299.8 million of net assets restricted for and $353.7 million, respectively; capital project-operations and giving purposes compared to $264.6 designated funds totaled $224.3 million and $215.7 million at June 30, 2011; million, respectively; student loan program-designated funds totaled $8.5 million and $8.5 million,
- $79.1 million for student loan programs compared respectively; and unrestricted funds functioning as to $77.3 million at June 30, 2011; and endowments totaled $161.8 million and $118.3
- $10.1 million for facilities compared to $18.4 million million, respectively. The remaining Unrestricted Net at June 30, 2011. Assets which are available for the University's instructional and public service missions and its Unrestricted Net Assets are not subject to externally general operations totaled $645.1 million and $641.1 imposed stipulations although these resources may be million at June 30, 2012 and 2011, respectively.
designated for specific purposes by the University's 2012 Financiat Report 23
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2012 and 2011 (unaudited)
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS The Statement of Revenues, Expenses, and Changes in Net Assets presents the University's results of operations.
The Statement distinguishes revenues and expenses between operating and non-operating categories, and provides a view of the University's operating margin.
CONDENSED~~~~
STTMN ~ OF REEUS EXESEAN CH GSINETSES Fiscal Year Ended June 30, 2012 Operating Revenues Net Tuition and Fees $ 545,276 Grants and Contracts 311,742 Patient Medical Services, Net 813,024 Other Auxilia ry Enterprises 357,101 Other Operating Revenues 78,418 Total Operating Revenues 2,105,561 Operating Expenses Salaries, Wages and Benefits 1,677,944 Supplies, Services and Other Operating Expenses 762,700 Other Operating Expenses 221,295 Total Operating Expenses 2,661,939 Operating Loss Before State Appropriations (556,378)
State Appropriations 397,629 Income (Loss) after State Appropriations, before Nonoperating Revenues (Expenses) (158,749)
Nonoperating Revenues (Expenses)
Investment and Endowment Income (Losses), Net of Fees 30,855 Private Gifts 90,346 Interest Expense (53,923)
Other Nonoperating Revenues, Net 80,319 Net Nonoperating Revenues (Expenses) 147,597 Income (Loss) before Capital Contributions, Additions to Permanent Endowments and Special Item (11,152)
State Capital Appropriations 937 Capital Gifts and Grants 11,788 Private Gifts for Endowment Purposes 24,484 Special Item 42,316 Increase in Net Assets 68,373 Net Assets, Beginning of Year 4,016,244 Cumulative Effect of Change in Accounting Principles Net Assets, Beginning of Year, as Adjusted 4,016,244 Net Assets, End of Year $ 4,084,617 REVENUES increased by $79.8 million, or 3.9% in FY 2012, and by
$84.9 million, or 4.4% in FY 2011. Net Tuition and Fees Operating Revenues represent resources generated by and Patient Medical Services contributed most the University in fulfilling its instruction, research, and significantly to the increased operating revenue in FY public service missions. Total Operating Revenues 2012 while Net Tuition and Fees, Patient Medical 24 2012 FinanciaL Report
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2012 and 2011 (unaudited)
Services and Other Auxiliary Enterprises had the 2012 as compared to an increase of $51.6 million, or largest increases in the previous year. Nonoperating 4.8%, in FY 2011. Patient Medical Services, which Revenues are those not generated by the University's includes fees for services provided by University Health core missions and include such funding sources as Care, had the largest increase in both fiscal years 2012 State and Federal Appropriations, Pell Grants, Private and 2011 at $53.3 million, or 7.0%, and $26.9 million, Gifts and Investment and Endowment Income. or 3.6%, respectively.
The following is a graphic illustration of operating NonoperatingRevenues revenues by source for FY 2012:
Total State Appropriations received for University operations, University Health Care operations, and TOA OPRTN EVNE 2. ILO other special programs decreased by $40.0 million, or 9.1%, in FY 2012, and decreased by $60.7 million, or 12.2%, in FY 2011. This decrease was largely related to a 7.3% decrease in funding for operations or the core instructional mission. Additionally, reductions occurred for other curator's programs such as MOREnet, Health Care, and Mid-Missouri Mental Health Center.
As one of the more volatile sources of nonoperating revenues, Investment and Endowment Income includes interest and dividend income as well as realized and unrealized gains and losses. Realized and unrealized market value gains, losses and other activity affecting Investment and Endowment Income resulted in a net gain of $30.9 million in FY 2012 as compared to a net gain of $266.6 million in FY 2011. This includes a decrease in Investment and Endowment Income of OperatingRevenues $235.8 million for the year ended June 30, 2012, as compared to a $93.8 million increase for the year Tuition and Fees, net of Scholarship Allowances, ended June 30, 2011.
increased by $49.8 million, or 10.0%, in FY 2012 and by
$29.2 million, or 6.3%, in FY 2011. The increase in FY Gift income is reflected in three categories: Private 2012 was driven primarily by increased student Gifts, Capital Gifts and Grants (which are restricted for enrollment and an average increase of 5.5% in tuition adding or improving capital assets) and Private Gifts and fee rates. The FY 2011 increase was driven for Endowments (which are restricted for establishing primarily by increases in student enrollment. endowments). Private Gifts and Grants can fluctuate significantly from year to year due to the voluntary As a research institution, the University receives a nature of donors' gifts. In FY 2012, the University substantial amount of funding through Federal, State received gifts totaling $126.6 million, as compared to and Private Grants and Contracts. Overall, sponsored $94.4 million and $92.8 million for FY 2011 and FY funding decreased by $8.8 million, or 2.7%, in FY 2012 2010, respectively.
compared to an increase of 0.8% in FY 2011. A 5.7%
decrease in Federal grants was the primary driver for the decline FY 2012.
The University's auxiliary enterprises include University Health Care, Housing and Dining Services, campus Bookstores, and other such supplemental activities.
Total operating revenues generated by these auxiliary enterprises increased by $34.0 million, or 3.0%, in FY 2012 Financial Report 25
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2012 and 2011 (unaudited)
Total Interest Expense during the years ended June 30, 30, 2012 and 2011, capitalization of interest earned on 2012 and 2011 was $64.5 million and $59.7 million, unspent bond proceeds totaled $10.6 million and respectively. Interest expense associated with $10.2 million, respectively, resulting in net interest financing projects during construction, net of any expense of $53.9 million and $49.5 million, investment income earned on bond proceeds during respectively.
construction, is capitalized. For the years ended June The following is a summary of interest expense associated with Long-Term Debt:
INTEREST EXPENSE (in thousands of dollars)
Fiscal Year Ended June 30, 2012 System Facilities Revenue Bonds $ 57,746 Net Payment on Interest Rate Swaps 5,754 Total System Facilities Revenue Bonds 63,500 Capital Project Notes Capitalized Lease Obligations 929 Notes Payable 34 Commercial Paper 71 TotalI nterest Expense Before Capitalization of Interest 64,534 Capitalization of Interest, Net of Interest Earned on Unspent Bond Proceeds (10,611)
Total Interest Expense $ 53,923 In FY 2012, Other Nonoperating Revenues, Net of from the United States Treasury totaling $10.5 million
$80.3 million decreased $2.8 million over FY 2011 and $7.2 million, respectively, for designated Build largely due to increases in Other Nonoperating America Bonds outstanding. Pell Grants increased by Expenses of $10.2 million. In FY 2012 and FY 2011, $4.4 million and were largely driven by increased Federal Appropriations include cash subsidy payments enrollment and student need.
26 2012 FinanciaL Report
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2012 and 2011 (unaudited)
OPERATING EXPENSES The following illustrates the University's operating expenses by function for FY 2008 through FY 2012:
Total Operating Expenses increased by $131.4 million, or 5.1%, in FY 2012 compared to an increase of $111.7 OEATIN EXENE BYFNTO million, or 4.6%, in FY 2011. The following graph FY 208-FY21 illustrates the University's operating expenses by 100%
natural classification for FY 2012:
0 90%
OEA. IN EXENE BY NAUALSSFCTO 80%
Scholarships and 70%
Supplies,
-Fellowships 2% 60%
Services and-Other Depreciation 6% 50%
29%
40%
30%
20%
Benefits, Salaries and 13% Wages 10%
50%
0%
2008 2009 2010 2011 2012 During FY 2012 and FY 2011, Salaries, Wages and 0 Instruction
- Operation &Maintenance of Plant Benefits increased approximately 4.8% and 3.9%,
s Research
- Health Care respectively, over the prior fiscal year. Salaries and Wages increased by $46.1 million, or 3.6% driven by " Publc Service Other Awziary Enterprises merit increases and increased enrollment. Staff " Academic Support Scholarships & Fellowshlps Benefits as of June 30, 2012, increased by $31.3 " Student Services
- Depreciation million, or 9.5%, as compared to June 30, 2011. " Institutional Support Contributing to this was an increase in the employer contributions rate for the retirement plan and increases in claims and administrative fees paid to medical and dental providers. The core missions of instruction, research, and public service account for the largest proportion of Operating In FY 2012 and FY 2011, the University's Supplies, Expenses at 36.2% for FY 2012. University Health Care Services, and Other Operating expenses of $762.7 constitutes the next highest proportion at 24.1% of million and $716.0 million increased by $46.7 million, expenses for FY 2012. Excluding Health Care, or 6.5%, and $39.6 million, or 5.9%, respectively, over instruction, research, and public service account for the prior fiscal year. These increases relate to 47.6% of Operating Expenses for FY 2012. Institutional necessary expenses in the current fiscal year that were support, which represents the core administrative deferred in prior fiscal years due to budgetary operations of the University, was less than 5 cents of constraints and enrollment growth. each dollar spent during this 5-year period.
2012 Financial. Report 27
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2012 and 2011 (unaudited)
STATEMENT OF CASH FLOWS The Statement of Cash Flows provides information about the University's sources and uses of cash and cash equivalents during the fiscal year. The following summarizes sources and uses of cash and cash equivalents for the three years ended June 30, 2012, 2011 and 2010:
CONDENSED ST EMN OF CAS FLOWS Fiscal Year Ended June 30, 2012 Net Cash Used in Operating Activities $ (369,270)
Net Cash Provided by Nonca pital Financing Activities 620,913 Net Cash Provided by (Used in) Capital and Related Financing Activities (388,389)
Net Cash Provided by (Used in) Investing Activities 278,239 Net Increase (Decrease) in Cash and Cash Equivalents 141,493 Cash and Cash Equivalents, Beginning of Year 221,287 Cash and Cash Equivalents, End of Year $ 362,780 Net Cash Used in Operating Activities reflects the Net Cash Provided by (Used In) Investing Activities continued need for funding from the state of Missouri, reflects a net cash inflow of $278.2 million in FY 2012 as funding received from tuition and fees and related as to a net cash outflow of $325.6 million in FY 2011.
sales and services of auxiliary and educational activities This is largely driven by unsettled investment trades at are not sufficient to cover operational needs. In FY the end of FY 2012.
2012, cash used in operating activities increased by
$36.5 million as compared to FY 2011 due primarily to ECONOMIC OUTLOOK increased cash outflows from payroll and benefits and The University of Missouri is the state's premier public payments to suppliers. In FY 2011, cash used in research university contributing to the economic operating activities increased by $67.9 million from FY development and vitality of the state through ground-2010.
breaking research, educating more than 73,000 students, delivering quality healthcare to the citizens The University's most significant source of cash, Net of Missouri, and providing extension services Cash Provided by Noncapital Financing Activities, throughout the state.
includes funding from State and Federal appropriations, Pell grants and noncapital private gifts.
The University has experienced 30% enrollment Cash from these sources totaling $620.9 million, growth over the past 10 years and is now educating
$617.3 million and $622.4 million in FY 2012, FY 2011 17,000 more students each year. Approximately 70%
and FY 2010, respectively, directly offset the additional of the state's growth in undergraduate enrollment cash needs resulting from operations.
among four-year institutions over the last 10 years has occurred at the University of Missouri. This growth has Net Cash Provided by (Used In) Capital and Related occurred during the challenging economy of the past Financing Activities decreased by $323.5 million in FY decade without any growth in state support and 2012 due largely to a decrease in the amount of new modest annual average increases in tuition. While debt issued in FY 2012. Net Cash Used in Capital and enrollment growth at this pace is not expected to Related Financing Activities of $5.7 million in FY 2010 continue in the next decade, without increases in state was due largely to the bond issue in July 2009 and support the university will be challenged to find ways related unspent bond proceeds associated with capital to educate more students while maintaining projects still under construction at June 30, 2010.
instructional quality and affordability. State appropriations for operations decreased by 7.3% in FY 28 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS June 30, 2012 and 2011 (unaudited) 2012 and will likely remain flat in FY 2013. Without For FY 2012, University Health Care continues focus on significant increases in general revenues, the state will advancing the health of all people, especially continue to be challenged to increase funding for Missourians. For the future, University Health Care higher education for FY 2014 and beyond. continues to pursue growth and its academic mission.
Currently, under construction is a $203,000,000 Despite the challenges generated by decreased state patient care tower, which includes a replacement of funding and increased enrollment, the University has the Ellis Fischel Cancer Center. The patient tower is been able to strengthen its financial position due to scheduled to be completed in FY 2013, with patient diversified funding sources, and historically low care starting in the new facility in the fourth quarter of borrowing costs. The University continues to increase the fiscal year. These capital investments will assist in private giving, with an increase of 71.9% in FY 2012 providing quality care to patients, including a and a focus on sustain higher levels of giving in FY 13 significant increase in private rooms, and enhanced and beyond. The University also continues to benefit facilities for physician recruitments. University Health from historically low borrowing costs to address Care has also begun investing in outpatient facilities academic, research, student life facility and campus through the FY 2012 opening of the Missouri Center infrastructure needs. for Outpatient Surgery, as well as plans for building a new outpatient facility in Columbia in FY 2015 The University is aware of its fiduciary responsibility to control costs in order to provide an affordable The University continues to monitor the changing education for Missourians. The University has environment surrounding State and Federal health continued to implement shared services and business care programs and the corresponding legislation, process redesign to achieve cost savings and including the Patient Protection and Affordable Care efficiencies and to identify resources for strategic Act and the Health Care and Education Reconciliation investment. This is an on-going process critical to Act, collectively referred to as 'Health Care Reform.'
future performance. This legislation will significantly impact the future of healthcare. University Health Care management The University continues to maintain its strong continues to review the effect that the legislation will research base. Research expenditures declined slightly have on the organization, but has not determined the in FY 2012 as the funding provided by the American full financial statement effect of this new Health Care Recovery and Reinvestment Act began to wane. Reform legislation.
Additionally, federal agencies are being faced with shrinking budgets as part of the broader reductions in Strong student demand, highly successful capital the Federal budget. To offset these decreases the campaigns, robust research funding, economic University is looking for other opportunities to development programs and a financially stable and stimulate research and economic development. This growing healthcare system are all factors in the includes the Enterprise Investment Program which was positive outlook for the University of Missouri.
established to expedite the transfer of researchers' lab However, the state economy, limited increases in innovations to the market place and to create new tuition, and flat state support will continue to pose Missouri business and jobs. For FY 12 two University budgetary challenges for the University in the future.
research teams were chosen to receive $600,000 in funding as part of this program.
2012 Financial Report 29
INDEPENDENT AUDITORS' REPORT KPMG LLP Suite 900 10 South Broadway St. Louis, MO 63102-1761 The Board of Curators University of Missouri System:
We have audited the accompanying financial statements of the business-type activities, the discretely presented component unit, and the aggregate remaining fund information of the University of Missouri System, a component unit of the State of Missouri, as of and for the years ended June 30, 2012 and 2011, which collectively comprise the University of Missouri System's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the University of Missouri System's management. Our responsibility is to express opinions on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the University of Missouri System's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities, the discretely presented component unit, and the aggregate remaining fund information of the University of Missouri System as of June 30, 2012 and 2011, and the respective changes in financial position and, where applicable, cash flows thereof for the years then ended, in conformity with U.S. generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated October 10, 2012 on our consideration of the University of Missouri System's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
U.S. generally accepted accounting principles require that the management's discussion and analysis on pages 15 through 29 and the schedules of employer contributions and the schedules of funding progress on pages 69 and 70 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an KPMG LLP is a Delaware limited liability partnership, the U.S. member lrmn of KPMG International Cooperative
("KPMG International"), a Swiss entity.
30 2012 FinanciaL Report
INDEPENDENT AUDITORS' REPORT appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the University of Missouri System's basic financial statements. The statistical section presented on pages 72 through 86 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.
I'PMC, LLVP St. Louis, Missouri October 10. 2012 2012 Financial. Report3 31
UNIVERSITY OF MISSOURI SYSTEM STATEMENT OF NET ASSETS As oF June 30, 2012 and 2011 (in thousands)
Discretely Presented University Component Unit 2012 2011 2012 2011 Assets Current Assets Cash and Cash Equivalents $ 228,639 $ 44,249 $ 10,301 $ 8,433 Restricted Cash and Cash Equivalents 134,141 177,038 - -
Short-Term Investments 126,054 151,070 - -
Restricted Short-Term Investments 32,092 49,264 - -
Investment of Cash Collateral 32,032 101,047 - -
Accounts Receivable, Net 274,100 255,589 17,417 16,566 Pledges Receivable, Net 11,898 12,374 - -
Investment Settlements Receivable 37,316 15,634 Notes Receivable, Net 8,151 8,532 - -
Due From (To) Component Units (7,029) (6,658) 7,029 6,658 Inventories 36,022 35,193 3,486 3,228 Prepaid Expenses and Other Current Assets 27,332 25,759 1,837 1,825 Total Current Assets 940,748 869,091 40,070 36,710 Noncurrent Assets Restricted Cash and Cash Equivalents - - 4,318 4,346 Pledges Receivable, Net 41,708 14,895 - -
Notes Receivable, Net 54,698 54,015 - -
Deferred Charges and Other Assets 10,253 13,218 3,679 1,788 Restricted Other Assets - - 3,151 3,279 Long-Term Investments 1,363,827 1,357,918 63,522 55,627 Restricted Long-Term Investments 1,066,915 1,161,184 - -
Capital Assets, Net 2,848,993 2,642,196 63,866 69,021 Total Noncurrent Assets 5,386,394 5,243,426 138,536 134,061 Deferred Outflow of Resources 30,415 19,023 - -
Total Assets and Deferred Outflow of Resources $ 6,357,557 $ 6,131,540 $ 178,606 $ 170,771 Liabilities Current Liabilities Accounts Payable $ 140,274 $ 130,803 $ 4,037 $ 5,156 Accrued Liabilities 150,971 143,347 15,505 13,879 Deferred Revenue 84,923 78,209 - -
Funds Held for Others 65,643 62,951 - -
Investment Settlements Payable 177,988 47,319 - -
Collateral Held for Securities Lending 32,032 101,047 - -
Commercial Paper and Current Portion of Long-Term Debt 183,226 29,107 2,917 2,263 Long-Term Debt Subject to Remarketing Agreements 100,330 220,885 - -
Total Current Liabilities 935,387 813,668 22,459 21,298 (continued) 32 2012 FinanciaL Report
UNIVERSITY OF MISSOURI SYSTEM STATEMENT OF NET ASSETS As oF 3une 30, 2012 and 2011 (in thousands)
Discretely Presented University Component Unit 2012 2011 2012 2011 Liabilities, Continued Noncurrent Liabilities Long-Term Debt 1,122,312 1,140,934 31,445 34,447 Deferred Revenue - 1,519 - -
Derivative Instrument Liability 57,856 26,702 Other Postemployment Benefits Liability 109,496 83,306 - -
Other Noncurrent Liabilities 47,889 49,167 3,209 1,156 Total Noncurrent Liabilities 1,337,553 1,301,628 34,654 35,603 Total Liabilities 2,272,940 2,115,296 57,113 56,901 Net Assets Invested in Capital Assets, Net of Related Debt 1,545,227 1,516,095 29,715 32,615 Restricted Nonexpendable -
Endowment 771,146 788,876 - -
Expendable -
Scholarship, Research, Instruction and Other 299,789 264,605 3,151 3,279 Loans 79,091 77,300 - -
Capital Projects 10,149 18,438 - -
Unrestricted 1,379,215 1,350,930 88,627 77,976 Total Net Assets 4,084,617 4,016,244 121,493 113,870 Total Liabilities and Net Assets $ 6,357,557 $ 6,131,540 $ 178,606 $ 170,771 See notes to the financial statements.
2012 Financial, Report3 33
UNIVERSITY OF MISSOURI SYSTEM STATEMENT OF REVENUES, EXPENSES, AND CHANGES INNET ASSETS For the Years Ended June 30, 2012 and 2011 (in thousands)
Discretely Presented University Component Unit 2012 2011 2012 2011 Operating Revenues Tuition and Fees (Net of Provision for Doubtful Accounts of $6,935 in 2012 and
$5,739 in 2010) $ 736,074 $ 671,419 $ - $
Less Scholarship Allowances 190,798 175,917 -
Net Tuition and Fees 545,276 495,502 -
Federal Grants and Contracts 184,882 196,122 -
State and Local Grants and Contracts 55,837 57,375 -
Private Grants and Contracts 71,023 67,025 -
Sales and Services of Educational Activities 23,106 21,671 -
Auxiliary Enterprises -
Patient Medical Services, Net 813,024 759,734 168,311 164,760 Housing and Dining Services (Net of Scholarship Allowance of $617 in 2012 and $614 in 2011) 99,667 93,724 - -
Bookstores 57,566 58,591 - -
Other Auxiliary Enterprises (Net of Scholarship Allowance of $8,339 in 2012 and $7,704 in 2011) 199,868 220,162 - -
Other Operating Revenues 55,312 55,811 - -
Total Operating Revenues 2,105,561 2,025,717 168,311 164,760 Operating Expenses Salaries and Wages 1,318,349 1,272,226 70,227 68,021 Benefits 359,595 328,340 15,050 14,655 Supplies, Services and Other Operating Expenses 762,700 716,044 63,490 65,177 Scholarships and Fellowships 60,380 58,790 - -
Depreciation 160,915 155,103 10,559 10,943 Total Operating Expenses 2,661,939 2,530,503 159,326 158,796 Operating Income (Loss) before State Appropriations (556,378) (504,786) 8,985 5,964 State Appropriations 397,629 437,631 - -
Operating Income (Loss) after State Appropriations, before Nonoperating Revenues (Expenses) (158,749) (67,155) 8,985 5,964 Nonoperating Revenues (Expenses)
Federal Appropriations 28,222 28,416 - -
Federal Pell Grants 62,311 57,951 - -
Investment and Endowment Income, Net of Fees 30,855 266,633 602 652 Private Gifts 90,346 52,564 - -
Interest Expense (53,923) (49,507) (1,519) (1,954)
Other Nonoperating Revenues (Expenses) (10,214) (3,279) (445) 440 Net Nonoperating Revenues (Expenses) 147,597 352,778 (1,362) (862)
(continued) 3z4 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS For the Years Ended June 30, 2012 and 2011 (in thousands)
Discretely Presented University Component Unit 2012 2011 2012 2011 Income (Loss) before Capital Contributions, Additions to Permanent Endowments and Special Item (11,152) 285,623 7,623 5,102 State Capital Appropriations 937 8,043 - -
Capital Gifts and Grants 11,788 15,466 Private Gifts for Endowment Purposes 24,484 26,376 Special Item 42,316 - - -
Increase in Net Assets 68,373 335,508 7,623 5,102 Net Assets, Beginning of Year 4,016,244 3,680,736 113,870 108,768 Net Assets, End of Year $ 4,084,617 $ 4,016,244 $ 121,493 $ 113,870 See notes to the financialstatements.
2012 Financial Report 35
UNIVERSITY OF MISSOURI SYSTEM STATEMENT OF CASH FLOWS For the Years Ended June 30, 2012 and 2011 (in thousands) 2012 2011 Cash Flows from Operating Activities Tuition and Fees $ 541,629 $ 496,091 Federal, State and Private Grants and Contracts 307,097 329,542 Sales and Services of Educational Activities and Other Auxiliaries 227,249 245,570 Patient Care Revenues 804,903 765,991 Student Housing Fees 99,775 93,747 Bookstore Collections 58,085 58,439 Payments to Suppliers (760,592) (741,245)
Payments to Employees (1,309,080) (1,269,544)
Payments for Benefits (333,405) (304,408)
Payments for Scholarships and Fellowships (60,380) (58,790)
Student Loans Issued (8,711) (9,608)
Student Loans Collected 8,559 8,665 Student Loan Interest and Fees 1,538 1,601 Other Receipts, Net 54,063 51,152 Net Cash Used in Operating Activities (369,270) (332,797)
Cash Flows from Noncapital Financing Activities State Appropriations 397,629 437,631 Federal Appropriations and Pell Grants 90,369 88,242 Private Gifts 64,009 56,056 Endowment and Similar Funds Gifts 24,484 26,376 Direct Lending Receipts 356,718 347,237 Direct Lending Disbursements (356,718) (347,237)
PLUS Loan Receipts 92,509 81,683 PLUS Loan Disbursements (92,509) (81,683)
Other Receipts, Net 41,730 (705)
Deposits (Receipts) of Affiliates 2,692 9,706 Net Cash Provided by Noncapital Financing Activities 620,913 617,306 Cash Flows from Capital and Related Financing Activities Capital State Appropriations 1,475 14,691 Capital Gifts and Grants 5,491 8,627 Proceeds from Sales of Capital Assets 4,035 1,050 Purchase of Capital Assets (362,015) (262,333)
Proceeds from Issuance of Capital Debt, Net 355,472 252,285 Principal Payments on Capital Debt (25,603) (29,400)
Payments on Capital Lease (789) (739)
Payments on Debt Defeasance (310,911) -
Payments of Bond Issuance Costs (1,226) (1,551)
Interest Payments on Capital Debt (54,318) (47,516)
Net Cash Provided by (Used in) Capital and Related Financing Activities (388,389) (64,886)
(continued) 36 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM STATEMENT OF CASH FLOWS For the Years Ended 3une 30, 2012 and 2011 (in thousands) 2012 2011 Cash Flows from Investing Activities Interest and Dividends on Investments, Net 58,325 70,091 Purchase of Investments, Net of Sales and Maturities 221,535 (397,113)
Other Investing Activities (1,621) 1,373 Net Cash Provided by (Used in) Investing Activities 278,239 (325,649)
Net Increase (Decrease) in Cash and Cash Equivalents 141,493 (106,026)
Cash and Cash Equivalents, Beginning of Year 221,287 327,313 Cash and Cash Equivalents, End of Year $ 362,780 $ 221,287 Reconciliation of Operating Loss to Net Cash Used in Operating Activities Operating Loss $ (556,378) $ (504,786)
Adjustments to Net Cash Used in Operating Activities Depreciation Expense 160,915 155,103 Changes in Assets and Liabilities:
Accounts Receivable, Net (18,682) (3,052)
Inventory, Prepaid Expenses and Other Assets (2,103) (6,947)
Notes Receivable 411 (252)
Accounts Payable 7,575 (1,606)
Accrued Liabilities 31,979 28,824 Deferred Revenue 7,013 (81)
Net Cash Used in Operating Activities $ (369,270) $ (332,797)
Supplemental Disclosure of Noncash Activities Net Increase (Decrease) in Fair Value of Investments $ (105,689) $ 170,549 Noncash Gifts 12,878 22,820 See notes to the financial statements.
2012 FinanciaL Report 37
UNIVERSITY OF MISSOURI SYSTEM STATEMENT OF PLAN NET ASSETS As of June 30, 2012 and 2011 (in thousands) 2012 2011 Assets Cash and Cash Equivalents $ 106,033 $ 116,216 Investment of Cash Collateral 50,023 257,463 Investment Settlements Receivable 83,396 27,006 Investments:
Debt Securities 933,561 984,980 Equity Securities 505,512 607,800 Commingled Funds 1,085,669 985,435 Nonmarketable Alternative Investments 212,993 174,899 Other 11,895 15,022 Total Assets 2,989,082 3,168,821 Liabilities Accounts Payable and Accrued Liabilities 169 119 Collateral Held for Securities Lending 50,023 257,463 Investment Settlements Payable 206,980 152,057 Total Liabilities 257,172 409,639 Net Assets Held in Trust for Retirement and OPEB $ 2,731,910 $ 2,759,182 UNIVERSITY OF MISSOURI SYSTEM STATEMENT OF CHANGES IN PLAN NET ASSETS For the Years Ended June 30, 2012 and 2011 (in thousands) 2012 2011 Net Revenues and Other Additions Investment Income:
Interest & Dividend Income, Net of Fees $ 58,589 $ 61,723 Net Appreciation (Depreciation) in Fair Value of Investments (31,548) 379,667 Net Investment Income 27,041 441,390 Contributions:
University 100,095 87,783 Members 27,320 26,000 Total Contributions 127,415 113,783 Other Revenues 1,218 695 Total Net Revenues and Other Additions 155,674 555,868 Expenses and Other Deductions Administrative Expenses 2,630 2,621 Payments to Retirees and Beneficiaries 180,316 172,181 Total Expenses and Other Deductions 182,946 174,802 Increase (Decrease) in Net Assets Held in Trust for Retirement and OPEB (27,272) 381,066 Net Assets Held in Trust for Retirement and OPEB, Beginning of Year 2,759,182 2,378,116 Net Assets Held in Trust for Retirement and OPEB, End of Year $ 2,731,910 $ 2,759,182 See notes to the financialstatements.
38 2012 FinanciaL Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011
- 1. ORGANIZATION AND
SUMMARY
OF of the Medical Alliance is to develop a network of SIGNIFICANT ACCOUNTING POLICIES health care providers to support the missions of the University Health Care. The Capital Region Medical UNIVERSITY OF MISSOURI SYSTEM Center ("CRMC") in Jefferson City, Missouri, operates as an affiliate of the Medical Alliance and provides Organization - The University of Missouri System (the inpatient, outpatient, and emergency care services to "University"), a Federal land grant institution, conducts the surrounding community. CRMC, a not-for-profit education, research, public service, and related organization that follows generally accepted activities, which includes University Health Care and accounting principles under the Financial Accounting related facilities, principally at its four campuses in Standards Board ("FASB"), is a discretely presented Columbia, Kansas City, Rolla and St. Louis. The component unit of the Medical Alliance. The University University also administers a statewide cooperative appoints the Board of Directors of the Medical Alliance extension service with centers located in each county and can impose its will on the organization. Financial in the State. The University is a component unit of the statements for the Medical Alliance are not available.
state of Missouri (the "State") and is governed by a nine-member Board of Curators appointed by the The Missouri Renewable Energy Corporation is state's Governor.
considered a component unit of the University, for financial reporting purposes, according to the criteria The income generated by the University, as an in GASB Statement No. 14, The Financial Reporting instrumentality unit of the State, is generally excluded Entity, and is included in the University's financial from federal income taxes under Section 115 of the statements using the blended method. The Missouri Internal Revenue Code. However, the University Renewable Energy Corporation provides green energy remains subject to income taxes on any net income facilities exclusively to the University. At June 30, 2012 that is derived from a trade or business, regularly Missouri Renewable Energy Corporation was wholly carried on and not in furtherance of the purpose for owned by the University. Financial statements for which it is exempt. No income tax provision has been Missouri Renewable Energy Corporation are not recorded as the net income, if any, from unrelated available.
trade or business income, is not material to the financial statements.
The University operates the University of Missouri Retirement, Disability, and Death Benefit Plan (the Reporting Entity - As defined by generally accepted "Retirement Plan") and the University of Missouri accounting principles established by the Governmental Other Postemployment Benefits Plan (the "OPEB Plan,"
Accounting Standards Board ("GASB"), the financial which collectively with the Retirement Plan represent reporting entity consists of the primary government the "Pension Trust Funds"), which are single employer, and its component units. Component units are legally defined benefit plans. The assets of the Retirement separate organizations for which the primary Plan and OPEB Plan are held in the Retirement Trust government is financially accountable or the nature and OPEB Trust, respectively.
and significance of their relationships with the primary government are such that exclusion would cause the Financial Statement Presentation - in accordance with primary government's financial statements to be GASB Statement No. 61, The FinancialReporting Entity:
misleading or incomplete.
Omnibus an amendment to GASB Statements No. 14 and No. 34, the University follows all applicable GASB The University of Missouri-Columbia Medical Alliance pronouncements.
(the "Medical Alliance") is considered a component unit of the University according to the criteria in GASB Pursuant to GASB Statement No. 35, Basic Financial Statement No. 14, The FinancialReporting Entity, and Statement-and Management's Discussion and Analysis-is discretely presented in the University's financial for Public Colleges and Universities, the University's statements. The Medical Alliance, a not-for-profit activities are considered to be a single business-type corporation, provides an integrated health care activity and accordingly, are reported in a single delivery system for mid-Missouri by establishing column in the financial statements. Business-type affiliations with various medical facilities. The purpose activities are those that are financed in whole or part 2012 FinanciaL Report 39
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 by funds received by external parties for goods or value of these investments is a reasonable estimate of services. fair value. Because alternative investments are not readily marketable, the estimated value is subject to Basis of Accounting - The University's financial uncertainty and therefore may differ materially from statements have been prepared using the economic the value that would have been used had a ready resource measurement focus and the accrual basis of market for investments existed.
accounting. Under the accrual basis, revenues are recognized when earned and expenses are recorded Derivative instruments such as forward foreign when an obligation has been incurred, regardless of currency contracts are recorded at fair value. The the timing of cash flows. University enters into forward foreign currency contracts to reduce the foreign exchange rate On the Statement of Revenues, Expenses and Changes exposure of its international investments. These in Net Assets, the University defines operating contracts are marked to market, with the changes in activities as those generally resulting from an exchange market value being reported in investment and transaction. Nearly all of the University's expenses are endowment income on the Statement of Revenues, from exchange transactions, which involve the Expenses, and Changes in Net Assets.
exchange of equivalent values such as payments for goods or services. Non-operating revenues or Pledges Receivable - The University receives expenses are those in which the University receives or unconditional promises to give through private gives value without directly giving or receiving equal donations (pledges) from corporations, alumni and value, such as State and Federal appropriations, various other supporters of the University. Revenue is Federal Pell grants, private gifts, and investment recognized when a pledge is received and all eligibility income. requirements, including time requirements, are met.
These pledges have been recorded as pledges The financial statements for the Pension Trust Funds receivable on the Statement of Net Assets and as have been prepared using the accrual basis of private or capital gift revenues on the Statement of accounting. Benefits and refunds are recognized when Revenues, Expenses, and Changes in Net Assets, at the due and payable. Investments are reported at fair present value of the estimated future cash flows. An value. Combining financial statements for these funds allowance of $10,444,000 and $6,482,000 as of June are presented in Note 15. 30, 2012 and 2011, respectively, has been made for uncollectible pledges based upon management's Cash, Cash Equivalents and Investments - Cash and expectations regarding the collection of the pledges cash equivalents consist of the University's bank and the University's historical collection experience.
deposits, repurchase agreements, money market funds, and other investments with original maturities Inventories - These assets are stated at the lower of of three months or less. Investment assets are carried cost or market. Cost is determined on an average cost at fair value based primarily on market quotations. basis except for University Health Care's inventories, Purchases and sales of investments are accounted for for which cost is determined using the first-in, first-out on the trade date basis. Investment settlements method.
receivable and investment settlements payable represent investment transactions occurring on or Capital Assets - If purchased, these assets are carried before June 30, which settle after that date. at cost or, if donated, at fair value at the date of gift.
Investment income is recorded on the accrual basis. Depreciation expense is computed using the straight-Net unrealized gains (losses) are included in line method over the assets' estimated useful lives -
investment and endowment income in the Statement generally ten to forty years for buildings and of Revenues, Expenses and Changes in Net Assets. improvements, eight to twenty-five years for infrastructure, three to fifteen years for equipment Nonmarketable alternative investments and certain and twenty years for library materials. Net interest commingled funds are recorded based on valuations expense incurred during the construction of debt-provided by the general partners of the respective financed facilities is included when capitalizing partnerships. The University believes that the carrying resulting assets. The University capitalizes works of L10 2012 Financial. Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 art as these collections generally consist of historical operation of the University. When both restricted and artifacts and artworks, they are considered unrestricted resources are available for expenditure, inexhaustible and not subject to depreciation. The the University's policy is to first apply restricted University does not capitalize collections of historical resources, and then the unrestricted resources.
treasures held for public exhibition, education, research, and public service. These collections are not Tuition and Fees, Net of Scholarship Allowances -
disposed of for financial gain and, accordingly, are not Student tuition and fees, housing, dining, and other capitalized for financial statement purposes. Proceeds similar auxiliary revenues are reported net of any from the sale, exchange, or other disposal of such related scholarships and fellowships applied to student items must be used to acquire additional items for the accounts. However, scholarships and fellowships paid same collection. Land is considered inexhaustible and directly to students are separately reported as is not subject to depreciation. scholarship and fellowship expenses.
Deferred Revenue - Deferred revenues are recognized Patient Medical Services, Net - Patient medical for amounts received prior to the end of the fiscal year services are primarily provided through University of but related to the subsequent period, including certain Missouri Hospitals and Clinics, Ellis Fischel Cancer tuition, fees, and auxiliary revenues. Deferred Research Center, Women's and Children's Hospital, revenues also include grant and contract amounts that Missouri Rehabilitation Center and University have been received but not yet earned. Physicians. The University has agreements with third-party payors that provide for payments at amounts Net Assets - The University's net assets are classified different from established rates. Payment as follows: arrangements include prospectively determined rates per discharge, reimbursed costs, discount charges, and Invested in Capital Assets, Net of Related Debt per diem payments. Net patient service revenue is represents capital assets, net of accumulated reported at the estimated net realizable amounts from depreciation and outstanding principal debt balances patients, third-party payors, and others for services related to the acquisition, construction or rendered, including estimated retroactive adjustments improvement of those assets. under reimbursement agreements with third-party payors. Retroactive adjustments are accrued on an Restricted Nonexpendable net assets are subject to estimated basis in the period the related services are externally imposed stipulations that the principal be rendered and adjusted in future periods as estimates maintained in perpetuity, such as the University's are refined and final settlements are determined. Net permanent endowment funds. The University's policy patient service revenue is also shown net of estimated permits any realized and unrealized appreciation to uncollectible accounts.
remain with these endowments after the spending distribution discussed in Note 3. Amounts receivable under Medicare and Medicaid reimbursement agreements are subject to examination Restricted Expendable net assets are subject to and certain retroactive adjustments by the related externally imposed stipulations on the University's use programs. These adjustments decreased net patient of the resources. services revenues by $320,000 and $1,086,000 for the years ended June 30, 2012, and 2011, respectively.
Unrestricted net assets are not subject to externally imposed stipulations, but may be designated for The Medicaid program reimburses inpatient services specific purposes by the University's management or on a prospective established per diem rate. The the Board of Curators. Unrestricted net assets are Medicaid program reimburses outpatient services derived from tuition and fees, sales and services, under a combination of prospective and fee schedule unrestricted gifts, investment income, and other such amounts.
sources, and are used for academics and the general 2012 Financial Report 141
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 For the years ended June 30, 2012 and 2011, the New Accounting Pronouncements - Effective for fiscal University Health Care's percentage of gross patient year 2012, the University adopted GASB Statement No.
accounts receivable classified by major payor is as 62, Codification of Accounting and FinancialReporting follows: Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, which incorporates into Table 1.1 - Percentage of Gross Patient Accounts the GASB's authoritative literature certain accounting Receivable (by Major Payor) and financial reporting guidance issued on or before 2012 2011 November 30, 1989, which does not conflict with or Medicare 24% 24%
Commercial Insurance 12% 7% contradict GASB pronouncements. Adoption of GASB Medicaid 22% 22% Statement No. 62 had no effect on the University's Self Pay & Other 18% 18% financial statements.
Managed Care Agreements 24% 29%
100% 100% Effective for fiscal year 2012, the University adopted GASB Statement No. 64, Derivative Instruments:
Patient services revenue includes the State of Missouri application of Hedge Accounting Termination Federal Reimbursement Allowance Program (FRA Provisions - an amendment to GASB No. 53, which Program) for uncompensated care. Health Care provides clarification on determining if an effective recognizes FRA Program revenue in the period earned. hedging relationship still exists for derivative instruments. Adoption of GASB Statement No. 64 had The Statement of Revenues, Expenses and Changes in no effect on the University's financial statements.
Net Assets reflect the gross to net patient medical services revenue as follows: Effective for fiscal year 2011, the University adopted Table 1.2 - Gross to Net Patient Medical Services GASB Statement No. 59, Financial Instruments Revenue (in thousands)
Omnibus, which updated and improved existing 2012 2011 standards regarding financial reporting and disclosure Patient Medical Services requirements of certain financial instruments and Revenue, Gross $1,814,794 $ 1,657,707 external investment pools. Adoption of GASB Deductions for Contractuals (922,418) (822,541) Statement No. 59 had no effect on the University's Deductions for Bad Debt (79,352) (75,432) financial statements.
Patient Medical Services Revenue, Net $ 813,024 $ 759,734 Use of Estimates - The preparation of financial statements, in conformity with U.S. generally accepted Uncompensated Care - The University provides some accounting principles, requires management to make services to patients without regard to their ability to estimates and assumptions that affect the reported pay for those services, For some of it patient services, amounts of assets and liabilities and disclosure of the University receives no payment or payment that is contingent assets and liabilities at the date of the less than the full cost of providing the services. The financial statements, and the reported amounts of estimated costs of providing these services are as revenues and expenses during the reporting period.
follows:
Actual results could differ from those estimates.
Table 1.3 - Uncompensated Care Revenue (in thousands) Reclassifications - Certain prior year amounts have 2012 2011 been reclassified to conform to current year amounts.
Cost of Charity Care 14,158 $ 10,370 Unreimbursed cost under state and DISCRETELY PRESENTED COMPONENT UNIT-local government assistance MEDICAL ALLIANCE programs, net of Medicaid disproportionate share funding, less Medicaid provider taxes 446 16,265 Nature of Operations - The Curators of the University Cost of uncollectible accounts 36,866 32,469 of Missouri, for and on behalf of University Health Patient Medical Services Care, and CRMC entered into an Affiliation Agreement Revenue, Net $ 51,470 $ 59,104 dated August 5, 1997. Pursuant to the Affiliation Agreement, the University created the Medical ZA2 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30,2012 and 2011 Alliance. The Medical Alliance then became the sole 2. CASH AND CASH EQUIVALENTS member of CRMC. The Medical Alliance's purpose is to Custodial Credit Risk - The custodial credit risk for develop a network of healthcare providers to support deposits is the risk that in the event of bank failure, the the missions of University Health Care.
University's deposits may not be recovered. State law requires collateralization of all deposits with federal CRMC operates as a two-hospital system, which depository insurance, bonds and other obligations of consists of the Southwest Campus and Madison the U.S. Treasury, U.S. Agencies and instrumentalities Campus complemented by community medical clinics.
of the state of Missouri; bonds of any city, county, CRMC primarily earns revenues by providing inpatient, school district or special road district of the state of outpatient, and emergency care services to patients in Missouri; bonds of any state; or a surety bond having Jefferson City, Missouri. It also operates medical an aggregate value at least equal to the amount of the clinics in the surrounding communities. The operating deposits. The University's cash deposits were fully results of the facilities and clinics are included in these insured or collateralized at June 30, 2012 and 2011, financial statements. CRMC is served by a group of respectively.
admitting physicians that account for a significant portion of CRMC's net revenues. Additionally, CRMC is also associated with the Capital Region Medical Foundation, which is intended to support the interest
- 3. INVESTMENTS of CRMC through its fundraising activities. Investment policies are established by the Board of Curators ("the Board"). The policies ensure that funds Net Assets - As a not-for-profit organization, the are managed in accordance with Section 105.688 of Medical Alliance records its net assets in accordance the Revised Statutes of Missouri and prudent with Financial Accounting Standards Board Accounting investment practices. Additionally, investment policies Standards Codification 958-205, Not-for-Profit Entities established by the Board with respect to the Presentation of FinancialStatements. For presentation Retirement Trust and Other Postemployment Benefit within the accompanying basic financial statements, ("OPEB") Trust (collectively referred to as "Pension the net assets are redistributed amongst the net asset Trust Funds") and the Endowment Funds specifically components defined by GASB Statement No. 34. recognize the fiduciary duties set forth in Section 105.688 of the Revised Statutes of Missouri. The use Capital Assets - Capital Assets are recorded at cost of external investment managers has been authorized and depreciated on a straight-line basis over the by the Board.
estimated useful life of each asset following guidelines of the American Hospital Association. Equipment Substantially all University cash and investments are under capital lease obligations is amortized on the managed centrally, generally in the following straight-line basis over the shorter period of the lease investment pools:
term or the estimated useful life of the equipment.
interest cost incurred on borrowed funds during the General Pool - General Pool contains short-term period of construction of capital assets is capitalized as University funds, including but not limited to cash and a cost of acquiring those assets. reserves, operating funds, bond funds, and plant funds.
Subject to various limitations contained within the Net Patient Medical Service Revenue - Net patient corresponding investment policy, the University's medical service revenue is reported at the net internally managed General Pool may be invested in amounts to be realized from patients, third-party the following instruments: U.S. Government payers, and others for services rendered, including securities; U.S. Government Agency securities; U.S.
estimated retroactive adjustments for reimbursement Government guaranteed securities; money market agreements with third-party payers. Retroactive funds; investment grade corporate bonds; certificates adjustments are estimated and accrued in the period of deposit; repurchase agreements; commercial paper; the related services are provided, and these amounts and other similar short-term investment instruments are adjusted in future periods as final settlements are of like or better quality. A limited component of the determined. General Pool may be invested in the University's Endowment Pool, formally known as Balanced Pool; at 2012 Financial Report 143
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 June 30, 2012 and 2011, 15.3% and 17.7%, expenditure of net appreciation is required to be for respectively, of General Pool funds were invested in the purposes for which the endowment was the Endowment Pool (refer to "Endowment Funds" established. Inclusive of both realized and unrealized below). The General Pool's total return, including gains and losses on investments, donor-restricted unrealized gains and losses, was 2.4% and 5.7% for the endowments experienced net depreciation of years ended June 30, 2012 and 2011, respectively. approximately $19,271,000 in fiscal year 2012, as compared to net appreciation of approximately Endowment Funds - When appropriate and $105,184,000 in fiscal year 2011.
permissible, endowment and similar funds are pooled for investment purposes, with the objective of The Board has adopted the total return concept (yield achieving long-term returns sufficient to preserve plus change in market value) in determining the principal by protecting against inflation and to meet spendable return for endowments and similar funds.
endowment spending targets. The spending formula was revised in fiscal year 2012 to distribute 4.5% of a trailing 28-quarter average of the The Endowment Pool, which is externally managed, is endowment's total market value, with the the primary investment vehicle for endowment funds. understanding that this spending rate over the long Subject to various limitations contained within the term will not exceed the total real return (net of corresponding investment policy, the Endowment Pool inflation). However, the change from 5% to 4.5% is is allowed to invest in the following asset sectors: U.S being phased in over several years to ensure a and international equity, emerging markets debt and decrease in distributions year over year is not due equity, absolute return strategies, private equity, real solely to the lower rate. In addition, the University estate, global fixed income, high yield fixed income, distributes 1% of the trailing 28-quarter average of the bank loans, and Treasury inflation-protected securities. endowment's total market value to support internal The Endowment Pool's total return, including endowment and development administration.
unrealized gains and losses, was -0.9% and 21.5% for the years ended June 30, 2012 and 2011, respectively. PENSION TRUST FUNDS The Fixed Income Pool, which is internally managed, is The Retirement Trust and the OPEB Trust hold the an additional investment vehicle for endowment assets of the Retirement Plan and OPEB Plan, funds. Fixed Income Pool asset sectors include debt respectively. Subject to various limitations contained securities issued by the U.S. government and its within the corresponding investment policy, the agencies, corporate bonds, commercial paper, and externally-managed Retirement Trust is allowed to repurchase agreements. The Fixed Income Pool's total invest in the following asset sectors: U.S and return, including unrealized gains and losses, was 5.1% international equity, emerging markets debt and and 2.1% for the years ended June 30, 2012 and 2011, equity, absolute return strategies, private equity, real respectively. estate, global fixed income, high yield fixed income, bank loans, and Treasury inflation-protected securities.
If a donor has not provided specific restrictions, state The Retirement Trust's total return, including law permits the Board to appropriate an amount of the unrealized gains and losses, was 1.1% and 18.9% for Endowment Funds' net appreciation, realized and the years ended June 30, 2012 and 2011, respectively.
unrealized, as the Board considers to be prudent. In establishing this amount, the Board is required to The OPEB Trust held $50,212,000 and $45,748,000 of consider the University's long- and short-term needs, assets at June 30, 2012 and 2011, respectively. The present and anticipated financial requirements, OPEB Trust is invested in a money market mutual fund expected total return on investments, price level rated AAA and a global bond fund. The OPEB Trust has trends, and general economic conditions. Further, any no other investments.
Z4Z4 2012 FinanciaL Report
UNIVERSITY, OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended 3une 30, 2012 and 2011 At June 30, 2012 and 2011, the University and Pension Trust Funds held the following types of investments:
Table 3.1 - Investments by Type (in thousands)
University of Missouri University of Missouri Pension Trust Funds As of June 30, 2012 2011 2012 2011 Debt Securities:
U.S. Treasury Obligations $ 144,576 $ 273,832 $ 311,985 $ 382,163 U.S. Agency Obligations 483,020 779,507 4,775 3,829 Asset-Backed Securities 542,545 263,093 110,024 97,335 Government - Foreign 126,409 60,503 154,885 124,731 Corporate - Domestic 153,815 255,279 202,649 201,846 Corporate - Foreign 115,155 69,365 149,243 175,076 Equity Securities:
Domestic 189,488 212,457 278,584 261,413 Foreign 107,913 192,201 226,928 346,387 Commingled Funds:
Absolute Return 60,359 62,819 133,702 139,068 Debt Securities - Global 18,038 17,614 Debt Securities - Domestic 100,541 42,190 183,545 146,099 Debt Securities - Foreign 67,711 63,891 150,892 142,197 Equity Securities - Domestic 44,395 146,424 5,224 190,315 Equity Securities - Foreign 110,359 169,426 196,169 297,546 Equity Securities - Global 201,968 358,372 Real Estate 14,033 18,387 39,727 52,596 Nonma rketa ble Alternative Investments:
Real Estate 43,430 29,786 91,243 67,445 Private Equity 52,413 47,747 121,750 107,454 Other 30,758 32,529 11,895 15,022 Total Investments 2,588,888 2,719,436 2,749,630 2,768,136 Money Market Funds 124,648 33,715 94,534 50,199 Commercial Paper 213,300 162,100 - -
Other 24,832 25,472 11,499 66,017 Total Cash and Cash Equivalents 362,780 221,287 106,033 116,216 Total Investments and Cash and Cash Equivalents $ 2,951,668 $ 2,940,723 $ 2,855,663 $ 2,884,352 Custodial Credit Risk - For investments, custodial Concentration of Credit Risk - Concentration of credit credit risk is the risk that in the event of failure of the risk is the risk associated with a lack of diversification, counterparty to a transaction, the University will not such as having substantial investments in a few be able to recover the value of the investments held by individual issuers, thereby exposing the organization to an outside party. In accordance with its policy, the greater risks resulting from adverse economic, University minimizes custodial credit risk by political, regulatory, geographic or credit establishing limitations on the types of instruments developments. The investment policies for the held with qualifying institutions. Repurchase General Pool, Endowment Funds, and Retirement Trust agreements must be collateralized by U.S. Government all specify diversification requirements across asset issues and/or U.S. Government Agency issues. All sectors. The investment policy for the General Pool University and Pension Trust Fund investments are has specific single issuer limits in place for corporate insured or registered and are held by the University, bonds and commercial paper.
the Pension Trust Funds or an agent in its name.
2012 FinanciaL Report 45
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 As of June 30, 2012, of the University's total government or those explicitly guaranteed by the U.S.
investments and cash and cash equivalents, 14.5% are government, are not considered to have credit risk.
issues of the Federal Home Loan Bank (FHLB); 10.2%
are issues of Federal National Mortgage Association Nationally recognized statistical rating organizations, (FNMA); and 5.5% are issues of Government National such as Moody's and Standard & Poor's (S&P), assign Mortgage Association. As of June 30, 2011, of the credit ratings to security issues and issuers that University's total investments and cash and cash indicate a measure of potential credit risk to investors.
equivalents, 16.0% are issues of FHLB and 9.4% are Debt securities considered investment grade are those issues of FNMA. rated at least Baa by Moody's and BBB by S&P. For General Pool investments, the following minimum At June 30, 2012 and 2011, the Pension Trust Funds credit ratings have been established to manage credit did not contain investments from any single issuer that risk: minimum long-term rating of A or better by S&P, exceeded 5% of the total portfolio. with minimum rating of A-i/P-1 for commercial paper and other short-term securities. For Endowment Investments issued or guaranteed by the U.S. Funds and Retirement Trust investments, the government as well as investments in mutual funds respective investment policies allow for a blend of and other pooled investments are excluded from different credit ratings, subject to certain restrictions consideration when evaluating concentration risk. by asset sector. In all cases, disposition of securities whose ratings have been downgraded after purchase is Credit Risk - Debt securities are subject to credit risk, generally left to the discretion of the respective which is the chance that an issuer will fail to pay investment manager after consideration of individual interest or principal in a timely manner, or that facts and circumstances.
negative perceptions of the issuer's ability to make these payments will cause security prices to decline. All holdings of commercial paper were rated A-i/P-i or These circumstances may arise due to a variety of better at June 30, 2012 and 2011. All holdings of factors such as financial weakness, bankruptcy, money market funds were rated AAA at June 30, 2012 litigation and/or adverse political developments. and 2011.
Certain debt securities, primarily obligations of the U.S.
Z46 2012 FinanciaL Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended 3une 30, 2012 and 2011 Based on investment ratings provided by Moody's or S&P, the University's and Pension Trust Funds' credit risk exposure as of June 30, 2012 and 2011, is as follows:
Table 3.2 - Debt Securities by Type and Credit Rating (in thousands)
University of Missouri University of Missouri Pension Trust Funds As of June 30, 2012 2011 2012 2011 U.S. Treasury Obligations $ 144,576 $ 273,832 $ 311,985 $ 382,163 U.S. Agency Obligations 483,020 779,507 4,775 3,829 Asset-Backed Securities Mortgage Backed Securities Guaranteed by U.S. Agencies 506,241 253,721 90,536 69,670 Aa a /AAA 3,256 3,859 1,256 17,196 Aa/AA 2,299 535 11,819 4,766 A/A 727 1,642 1,513 2,279 Baa/BBB 6,270 570 163 53 Ba/BB and lower 21,690 979 2,255 2,755 Unrated 2,062 1,787 2,482 616 Government - Foreign Aaa/AAA 37,988 17,641 50,348 38,008 Aa/AA 15,454 8,995 26,613 17,941 A/A 14,334 9,536 18,391 17,787 Baa/BBB 11,361 3,135 5,416 885 Ba/BB and lower 129 4,092 Unrated 47,143 21,196 54,117 46,018 Corporate - Domestic Aa a /AAA 22,954 7,628 4,088 6,241 Aa/AA 12,650 59,483 6,411 10,684 A/A 31,813 151,693 15,111 28,664 Baa/BBB 34,806 1,111 17,432 6,207 Ba/BB and lower 47,159 32,066 148,387 144,715 Unrated 4,433 3,298 11,220 5,335 Corporate - Foreign Aa a /AAA 35,952 32,376 61,443 61,638 Aa/AA 9,946 8,535 16,149 28,115 A/A 26,767 17,465 31,381 40,302 Baa/BBB 20,043 2,681 11,316 9,011 Ba/BB and lower 4,151 2,761 10,229 13,618 Unrated 18,296 5,547 18,725 22,392 Total $1,565,520 S 1.701.579
$1701579 -
$ 933,561 7 984,980 Interest Rate Risk - Interest rate risk is the risk that The University and Pension Trust Funds have changes in interest rates over time will adversely affect investments in asset-backed securities, which consist the fair value of an investment. Debt securities with primarily of mortgage-backed securities guaranteed by longer maturities are likely to be subject to more U.S. agencies and corporate collateralized mortgage variability in their fair values as a result of future obligations. These securities are based on cash flows changes in interest rates. Neither the University nor from principal and interest payments on the the Pension Trust Funds have a formal policy that underlying securities. An asset-backed security may addresses interest rate risk; rather, such risk is have repayments that vary significantly with changes in managed by each individual investment manager, as market interest rates.
applicable.
2012 Financial Report 147
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 Table 3.3 presents the contractual final maturities of the University's and Pension Trust Funds' debt securities, which are not intended to reflect actual projected cash flows, as of June 30, 2012 and 2011, respectively:
Table 3.3 - Debt Securities by Type and Maturity (in thousands)
University of Missouri University of Missouri Pension Trust Funds As of June 30, 2012 2011 2012 2011 U.S. Treasury Obligations Less than I Year 2,670 $ 10,247 2,362 $ 18,988 1-5 Years 39,536 117,493 114,186 125,645 6-10 Years 68,946 107,028 91,892 110,596 More than 10 Years 33,424 39,064 103,545 126,934 Total U.S Treasury Obligations 144,576 273,832 311,985 382,163 U.S. Agency Obligations Less than I Year 144,937 144,797 1,850 50 1-5 Years 107,653 301,861 113 2,814 6-10 Years 227,130 255,763 1,315 965 Morethan 10 Years 3,300 77,086 1,497 -
Total U.S. Agency Obligations 483,020 779,507 4,775 3,829 Asset-Backed Securities Less than 1 Year 6 24 - 73 1-5 Years 30 266 263 502 6-10 Years 42,734 16,818 14,205 14,697 More than 10 Years 499,775 245,985 95,556 82,063 Total Asset-Backed Securities 542,545 263,093 110,024 97,335 Government - Foreign Less than 1 Year 2,202 1,733 1,050 3,910 1-5 Years 45,160 21,961 40,756 44,877 6-10 Years 56,292 27,119 73,563 55,098 More than 10 Years 22,755 9,690 39,516 20,846 Total Government - Foreign 126,409 60,503 154,885 124,731 Corporate - Domestic Less than 1 Year 2,804 33,377 4,291 3,798 1-5 Years 37,956 154,297 51,476 54,400 6-10 Years 64,738 58,197 131,170 121,242 More than 10 Years 48,317 9,408 15,712 22,406 Tota Corporate- Domestic 153,815 255,279 202,649 201,846 Corporate - Foreign Less than 1 Year 5,528 10,156 10,998 22,466 1-5 Years 64,192 39,248 97,419 103,927 6-10 Years 35,456 12,406 25,530 36,824 Morethan 10 Years 9,979 7,555 15,296 11,859 Total Corporate- Foreign 115,155 69,365 149,243 175,076 Total Debt Securities $1,565,520 $1,701,579 $ 933,561 $ 984,980 Foreign Exchange Risk - Foreign exchange risk is the University and Retirement Trust investment policies risk that investments denominated in foreign allow for exposure to non-U.S. dollar denominated currencies may lose value due to adverse fluctuations equities and fixed income securities, which may be in the value of the U.S. dollar relative to foreign fully or partially hedged using forward foreign currency currencies. exchange contracts.
148 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 At June 30, 2012 and 2011, 21.5% and 17.3%, 34.7%, respectively, of the Pension Trust Funds' total respectively, of the University's total investments and investments and cash equivalents were denominated cash and cash equivalents were denominated in in foreign currencies. Forward foreign currency foreign currencies. Forward foreign currency contracts contracts with notional amounts totaling $363,003,000 with notional amounts totaling $330,216,000 and and $268,761,000 were in place at June 30, 2012 and
$143,522,000 were in place at June 30, 2012 and 2011, 2011, respectively.
respectively. At June 30, 2012 and 2011, 40.5% and The University's and Pension Trust Funds' exposure to foreign exchange risk as of June 30, 2012 and 2011:
Table 3.4 - Foreign Exchange Risk (in thousands)
University of Missouri University of Missouri Pension Trust Funds As of June 30, 2012 2011 2012 2011 Debt Securities Euro $ 70,071 $ 46,284 $ 118,207 $ 118,216 Australian Dollar 11,082 8,097 19,878 15,897 Canadian Dollar 11,630 3,834 7,522 10,854 British Pound Sterling 24,968 8,514 32,625 17,777 Japanese Yen 10,835 6,244 19,353 9,893 Danish Krone 1,028 1,909 1,783 3,370 New Zealand Dollar 3,955 2,195 9,113 3,897 South Korean Won 1,226 3,136 2,118 5,759 Singapore Dollar 1,934 2,209 3,723 3,542 Mexican New Peso 14,460 2,934 7,739 5,178 Swedish Krona 2,811 2,940 5,413 5,653 Other 6,409 5,657 9,806 11,857 160,409 93,953 237,280 211,893 Equity Securities Euro 11,827 60,033 32,732 105,903 Japanese Yen 15,547 34,461 36,148 60,967 British Pound Sterling 17,741 37,169 40,774 68,568 Australian Dollar 4,264 8,119 10,931 16,739 Canadian Dollar 1,019 8,966 2,040 13,340 Swiss Franc 12,384 15,001 24,206 28,455 Hong Kong Dollar 6,375 6,868 12,417 13,540 Swedish Krona 3,954 1,646 7,888 4,296 Other 11,636 4,653 21,728 13,691 84,747 176,916 188,864 325,499 Commingled Funds Various currency denominations:
Debt Securities - Global - - 18,039 17,614 Debt Securities - Foreign 67,711 63,891 150,892 142,197 Equity Securities - Global 201,968 358,372 Equity Securities - Foreign 110,359 169,426 196,169 297,546 380,038 233,317 723,472 457,357 Cash and Cash Equivalents Euro 733 2,529 732 4,197 Hong Kong Dollar 251 30 422 102 Mexican New Peso 7,689 - 16,893 1 Japanese Yen 100 605 253 474 British Pound Sterling 90 364 20 163 Other 412 389 717 722 9,275 3,917 19,037 5,659 Total Exposure to Foreign Exchange Risk $ 634,469 $ 508,103 $ 1,168,653 $ 1,000,408 2012 FinanciaL Report Z49
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 Commingled Funds - Includes Securities and Exchange The value of collateral received from the borrower for Commission regulated mutual funds and externally these securities consisted of $32,032,000 cash and managed funds, limited partnerships, and corporate $30,785,000 noncash collateral at June 30, 2012 and structures which are generally unrated and $101,047,000 cash and $3,687,000 noncash collateral unregulated. Certain commingled funds may use at June 30, 2011.
derivatives, short positions and leverage as part of their investment strategy. These investments are For the Pension Trust Funds, at June 30, 2012 and structured to limit risk exposure to the amount of 2011, there were a total of $195,236,000 and invested capital. Commingled funds have liquidity $272,633,000, respectively, of securities out on loan to (redemption) provisions, which enable the University borrowers. The value of collateral received from the and Pension Trust Funds to make full or partial borrower for these securities consisted of $50,023,000 withdrawals with notice, subject to restrictions on the cash and $151,320,000 noncash collateral at June 30, timing and amount. 2012 and $257,463,000 cash and $15,525,000 noncash collateral at June 30, 2011.
Of the University's and Pension Trust Funds' commingled funds at June 30, 2012, approximately Cash collateral received from the borrower is invested 90% and 86%, respectively, are redeemable within 90 by the custodial agent bank in commingled collateral days, with the remaining redeemable within one year. investment pools in the name of the University and Pension Trust Funds, with guidelines approved by Nonmarketable Alternative Investments - Consists of each. These investments are shown as Investment of limited partnerships involving an advance commitment Cash Collateral in the Statement of Net Assets and of capital called by the general partner as needed and reported at fair value, with changes in market value distributions of capital and return on invested capital recorded in Investment and Endowment Income on as underlying strategies are concluded during the life the Statement of Revenues, Expenses, and Changes in of the partnership. The committed but unpaid Net Assets. Noncash collateral received for securities obligation to these limited partnerships is further lending activities is not recorded as an asset because discussed in Note 11. the University and Pension Trust Funds do not have the ability to pledge or sell such collateral unless the Securities Lending Transactions - The University and borrower defaults.
Pension Trust Funds each participate in an external investment pool securities lending program to The University and Pension Trust Funds continue to augment income. The program is administered by the receive interest and dividends during the loan period.
custodial agent bank, which lends equity, government The maturities of the investments made with the cash and corporate securities for a predetermined period of collateral generally match the maturities of the time to an independent broker/dealer (borrower) in securities lent. At June 30, 2012 and 2011, neither the exchange for collateral. Collateral may be cash, U.S. University nor the Pension Trust Funds have any credit Government securities, defined letters of credit or risk exposure arising from the actual securities lending other collateral approved by the University or Pension transactions since the collateral received from the Trust Funds. Loaned domestic securities are initially borrower exceeds the value of the securities lent.
collateralized at 102% of their fair value, while loaned Further, the University and Pension Trust Funds are international securities are collateralized at 105% of fully indemnified by the custodial bank against any fair value. Exposure to credit risk from borrower losses incurred as a result of borrower default.
default has been minimized by having the custodial agent bank determine daily that required collateral meets a minimum of 100% of the fair value of loaned domestic securities and 105% for loaned international securities.
For the University, at June 30, 2012 and 2011, there were a total of $62,168,000 and $101,582,000, respectively, of securities out on loan to borrowers.
50 2012 FinanciaL Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 DISCRETELY PRESENTED COMPONENT UNIT- 4. ACCOUNTS RECEIVABLE MEDICAL ALLIANCE Accounts receivable at June 30, 2012 and 2011, are summarized as follows:
Investments - The investment policies of Medical Alliance are established by its board of directors. The Table 4.1 - Accounts Receivable (in thousands) policies are established to ensure that Medical Alliance funds are managed in accordance with the "Prudent 2012 2011 Man Rule." Grants and Contracts $ 60,858 $ 57,256 Federal Appropriations 5,441 5,277 Medical Alliance investments are presented at fair State Appropriations and State value in accordance with FASB Accounting Standards Bond Funds 35 573 Codification 820, which establishes a fair value Student Fees and Other Academic hierarchy that prioritizes the inputs to valuation Charges 98,611 91,035 techniques used to measure fair value. The hierarchy Patient Services, Net of Contractual gives the highest priority to unadjusted quoted prices Allowances 106,689 100,939 in active markets for identical assets or liabilities and Medical Resident FICA Refund the lowest priority to measurements involving and Related Income 31,355 30,787 significant unobservable inputs. The three levels of the Subtotal 302,989 285,867 fair value hierarchy are as follows: Level 1 - Quoted Less Provisions for Loss:
prices in active markets for identical assets that the Grants &Contracts 516 730 Medical Alliance has the ability to access at the University Health Care Patient measurement date; Level 2 - Inputs other than quoted Services 21,438 23,809 market prices included in Level 1, that are observable Student Fees and Other for the asset, either directly or indirectly; and, Level 3 -
Academic Charges 6,935 5,739 Inputs that are unobservable for the asset. The level in Subtotal 28,889 30,278 the fair value hierarchy within which a fair value Total Accounts Receivable, Net $274,100 $255,589 measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. 5. NOTES RECEIVABLE Notes receivable generally consist of resources At June 30, 2012 and 2011, Medical Alliance held the available for financial loans to students. These following investments: resources are provided through Federal loan programs and University loan programs generally funded by Table 3.5 - Medical Alliance Cash, Cash external sources. Notes receivable at June 30, 2012 Equivalents, and Investments and 2011, are summarized as follows:
As of June 30, (in thousands) 2012 2011 Fair Value-Level 1 Table 5.1 - Notes Receivable (in thousands)
Money Market Accounts $ 21,830 $ 19,671 2012 2011 Federal Farm Callable Note - 4,996 U.S. Treasury Obligations 73 74 Federal Health Profession Loans $ 15,994 $ 16,097 Cash and Other Cash Equivalents 8,379 7,020 Carl D.Perkins National Loans 28,662 28,992 Total Fair Value - Level 1 30,282 31,761 University Loan Programs 18,680 18,501 Fair Value- Level 2 Other 3,328 2,614 Mortgage-Backed Securities 14,001 18,006 Subtotal 66,663 66,204 Certificates of Deposit 28,368 13,614 Less Provisions for Loss 3,814 3,657 Corporate Bonds 5,490 5,025 Total Notes Receivable, Net $ 62,849 $ 62,547 Total Fair Value- Level 2 47,859 36,645 Total Cash, Cash Equivalents, and Investments $ 78,141 $ 68,406 2012 Financial Report 51
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011
- 6. CAPITAL ASSETS UNIVERSITY OF MISSOURI Capital assets activity for the years ended June 30, 2012 and 2011, is summarized as follows:
Table 6.1 - Capital Assets (in thousands) 2012 2012 Beginning Ending Balance Additions Retirements Balance Capital Assets, Nondepreciable:
Land $ 75,088 $ 5,462 $ (135) $ 80,415 Artwork and Historical Artifacts 12,740 144 - 12,884 Construction in Progress 130,216 150,313 - 280,529 Total Capital Assets, Nondepreciable 218,044 155,919 (135) 373,828 Capital Assets, Depreciable:
Buildings and Improvements 2,919,468 138,205 (1,781) 3,055,892 Infrastructure 317,551 10,037 - 327,588 Equipment 680,322 61,818 (16,959) 725,181 Library Materials 247,939 4,197 - 252,136 Total Capital Assets, Depreciable 4,165,280 214,257 (18,740) 4,360,797 Less Accumulated Depreciation:
Buildings and Improvements 1,015,562 84,320 (1,229) 1,098,653 Infrastructure 125,944 14,214 - 140,158 Equipment 441,014 56,036 (15,182) 481,868 Library Materials 158,608 6,345 - 164,953 Total Accumulated Depreciation 1,741,128 160,915 (16,411) 1,885,632 Total Capital Assets, Depreciable, Net 2,424,152 53,342 (2,329) 2,475,165 Total Capital Assets, Net $ 2,642,196 $ 209,261 $ (2,464) $2,848,993 2011 2011 Beginning Additions/ Ending Balance Transfers Retirements Balance Capital Assets, Nondepreciable:
Land $ 72,857 $ 2,231 $ - $ 75,088 Artwork and Historical Artifacts 12,624 116 - 12,740 Construction in Progress 156,601 (26,385) - 130,216 Total Capital Assets, Nondepreciable 242,082 (24,038) - 218,044 Capital Assets, Depreciable:
Buildings and Improvements 2,754,619 167,452 (2,603) 2,919,468 Infrastructure 267,063 50,851 (363) 317,551 Equipment 634,360 64,944 (18,982) 680,322 Library Materials 240,590 7,349 - 247,939 Total Capital Assets, Depreciable 3,896,632 290,596 (21,948) 4,165,280 Less Accumulated Depreciation:
Buildings and Improvements 937,541 79,662 (1,641) 1,015,562 Infrastructure 113,990 12,129 (175) 125,944 Equipment 402,165 55,357 (16,508) 441,014 Library Materials 150,653 7,955 - 158,608 Total Accumulated Depreciation 1,604,349 155,103 (18,324) 1,741,128 Total Capital Assets, Depreciable, Net 2,292,283 135,493 (3,624) 2,424,152 Total Capital Assets, Net $2,534,365 $ 111,455 $ (3,624) $2,642,196 52 2012 FinanciaL Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 The estimated cost to complete construction in 7. ACCRUED LIABILITIES progress at June 30, 2012, is $518,671,000 of which Accrued liabilities at June 30, 2012 and 2011, are
$294,295,000 is available from unrestricted net assets.
summarized as follows:
The remaining costs are expected to be funded from
$34,506,000 of gifts, $777,000 of grants, and Table 7.1 - Accrued Liabilities (in thousands)
$189,093,000 of debt proceeds.
2012 2011 Capital assets include a building facility under a capital Accrued Salaries, Wages &Benefits $ 58,183 $ 52,831 lease of $8,332,000 and related accumulated Accrued Vacation 45,862 42,877 depreciation of $5,312,000 and $4,895,000 at June 30, Accrued Self Insurance Claims 36,322 37,592 2012 and 2011, respectively, and equipment under a Accrued Interest Payable 10,604 10,047 capital lease of $964,000 and related accumulated Total Accrued Liabilities $150,971 $143,347 depreciation of $543,000 and $362,000 at June 30, 2012 and 2011, respectively.
DISCRETELY PRESENTED COMPONENT UNIT-MEDICAL ALLIANCE Capital assets at June 30, 2012 and 2011 are summarized as follows:
Table 6.2 - Medical Alliance - Capital Assets (in thousands) 2012 2011 Land & Improvements $ 6,779 $ 6,670 Buildings 114,905 113,990 Movable Equipment 75,697 73,931 Construction in Progress 103 734 197,484 195,325 Less Accumulated Depreciation 133,618 126,304 Total Capital Assets, Net $ 63,866 $ 69,021
- 8. OTHER NONCURRENT LIABILITIES Table 8.1 - Other Noncurrent Liabilities (in thousands)
Beginning of Total End of Less Current Noncurrent Fiscal Year 2012 Year Additions Payments Year Portion End of Year Accrued Vacation $ 56,687 $ 43,766 $ (39,849) $ 60,604 $ (45,862) $ 14,742 Accrued Self-Insurance Claims 72,949 213,357 (216,837) 69,469 (36,322) 33,147
$ 129,636 $ 257,123 $ (256,686) $ 130,073 S (82,184) $ 47,889 Beginning of Total End of Less Current Noncurrent Fiscal Year 2011 Year Additions Payments Year Portion End of Year Accrued Vacation $ 55,741 $ 40,111 $ (39,165) $ 56,687 $ (42,877) $ 13,810 Accrued Self-Insurance Claims 77,501 194,051 (198,603) 72,949 (37,592) 35,357
$ 133,242 $ 234,162 $ (237,768) $ 129,636 $ (80,469) $ 49,167 2012 FinanciaL Report 53
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011
- 9. LONG-TERM DEBT The University's outstanding debt at June 30, 2012 and 2011, with corresponding activity, is as follows:
Table 9.1 - Long-Term Debt (in thousands)
Beginning Ending Current As of June 30, 2012 Balance Additions Reductions Balance Portion System Facilities Revenue Bonds - Fixed $1,144,245 $ 159,280 $ (197,580) $1,105,945 $ 20,875 System Facilities Revenue Bonds - Variable 223,680 - (122,930) 100,750 420 Unamortized Premium 23,462 31,264 (7,266) 47,460 -
Unamortized Loss on Defeasance (9,162) - (11,637) (20,799) -
Net System Facilities Revenue Bonds 1,382,225 190,544 (339,413) 1,233,356 21,295 Notes Payable 1,296 3,993 (328) 4,961 300 Capital Lease Obligations 7,405 - (789) 6,616 696 Commercial Paper - 160,935 - 160,935 160,935 Total Long-Term Debt $1,390,926 $ 355,472 $ (340,530) $1,405,868 $ 183,226 Beginning Ending Current As of June 30, 2011 Balance Additions Reductions Balance Portion System Facilities Revenue Bonds - Fixed $ 919,725 $ 252,285 $ (27,765) $1,144,245 $ 25,195 System Facilities Revenue Bonds -Variable 224,925 - (1,245) 223,680 2,795 Unamortized Premium 25,000 (1,538) 23,462 -
Unamortized Loss on Defeasance (9,755) - 593 (9,162) -
Net System Facilities Revenue Bonds 1,159,895 252,285 (29,955) 1,382,225 27,990 Notes Payable 1,686 - (390) 1,296 328 Capital Lease Obligations 8,144 - (739) 7,405 789 Total Long-Term Debt $1,169,725 $ 252,285 $ (31,084) $1,390,926 $ 29,107 System Facilities Revenue Bonds On August 3, 2011, the University issued $54,125,000 System Facilities Revenue Bonds have provided in Series 2011 System Facilities Revenue Bonds.
financing for capital expansion or renovation of various Proceeds from issuance of the Series 2011 bonds are University facilities. The principal and interest of the being used to refund all of Series 1998A bonds, all of bonds are payable from, and secured by a first lien on Series 2001B bonds, $9,035,000 principal amount of and pledge of, designated revenues which include the the Series 2003B Bonds, and paying the cost of following: a portion of tuition and fees, sales and issuance of the Series 2011 bonds. The all-in-true services from the financed facilities, such as bookstore interest cost of the Series 2011 bonds is 3.2%.
collections, housing and dining charges, patient services, and parking collections, as well as certain On December 21, 2010, the University issued assessed fees, such as the recreational facility fees,
$252,285,000 in taxable Series 2010A System Facilities stadium surcharges, and student center fees.
Revenue Bonds designated as "Build America Bonds" under the Internal Revenue Code of 1986, as amended.
On May 2, 2012, the University issued $105,155,000 in With respect to the Series 2010A bonds, the University Series 2012A System Facilities Revenue Bonds.
will receive a cash subsidy payment from the United Proceeds from issuance of the Series 2012A Bonds are States Treasury in an amount equal to 35% of the being used to refund all of Series 2003A bonds, interest payable on each interest payment date. The
$75,065,000 principal amount of the Series 2006A all-in-true interest cost of the Series 2010A bonds, bonds, $33,085,000 principal amount of the Series after taking into account the 35% interest payment 2007A bonds, and paying cost of issuance of the Series from the federal government is 3.8%.
2012A bonds. The all-in-true interest cost of the Series 2012A bonds is 1.7%.
514 2012 Financial. Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 Proceeds from issuance of the Series 2010A bonds are capitalized. Total interest expense during the years being used to finance construction or renovation of ended June 30, 2012 and 2011 was $64,534,000 and housing facilities on the Columbia, Kansas City, and $59,723,000, respectively. Interest expense associated Missouri Science and Technology (Missouri S&T) with financing projects during construction, net of any campuses, energy management improvements on the investment income earned on bond proceeds during Columbia and Missouri S&T campuses, construction of construction, is capitalized. For the years ended June a new parking structure on the Kansas City campus, 30, 2012 and 2011, capitalization of interest earned on new patient care tower and Ellis Fischel Cancer Center unspent bond proceeds totaled $10,611,000 and relocation at University Health Care, and renovation, $10,216,000, respectively, resulting in net interest furnishing and equipping various other facilities, and to expense of $53,923,000 and $49,507,000, respectively.
finance capitalized interest and certain costs of For the years ended June 30, 2012 and June 30, 2011, issuance. the University earned cash subsidy payments from the United States Treasury totaling $10,461,000 and Interest expense associated with financing projects $7,193,000, respectively for designated Build America during construction, net of any investment income Bonds outstanding, which was recorded as Federal earned on bond proceeds during construction, is Appropriations on the Statement of Revenues, Expenses, and Changes in Net Assets.
Table 9.2 - System Facilities Revenue Bonds (in thousands)
Weighted Balance June 30, Series Type Average Coupon Final Maturity Original Issue 2012 2011 1998 Fixed 11/1/2017 $ 65,010 $ $ 9,985 2001B Fixed 11/1/2027 44,975 40,635 2003A Fixed 11/1/2014 118,080 9,520 2003B Fixed 4.648% 11/1/2023 37,085 16,400 27,030 2006A Fixed 4.938% 11/1/2026 260,975 144,150 227,385 2007A Fixed 4.882% 11/1/2037 262,970 212,135 250,450 2009A (1) Fixed 5.960% 11/1/2039 256,300 256,300 256,300 2009B Fixed 4.160% 11/1/2021 75,760 65,395 70,655 2010A (1) Fixed 5.792% 11/1/2041 252,285 252,285 252,285 2011 Fixed 4.495% 11/1/2027 54,125 54,125 -
2012A Fixed 4.900% 11/1/2019 105,155 105,155 -
Total Fixed Rate Bonds 1,532,720 1,105,945 1,144,245 2000B Variable 11/1/2030 50,000 - 50,000 2001A Variable 11/1/2031 39,225 32,825 2006B Variable 11/1/2035 39,705 - 39,705 2007B Variable 0.15% (2) 11/1/2031 102,250 100,750 101,150 Total Variable Rate Demand Bonds 231,180 100,750 223,680 Total System Facilities Revenue Bonds $ 1,763,900 $ 1,206,695 $ 1,367,925 (1) Taxable issue designated as Build America Bonds under the Internal Revenue Code of1986, as amended.
(2) As of June 30, 2012; rates are determined daily or weekly by the remarketing agents. The rateis usually within a range at or near the Securities Industry and FinancialMarkets Association Municipal Swap Index (SIFMA Index) rate, which resets weekly.
System Facilities Revenue Bonds, Series 2000B, Series Statement of Net Assets, with the balance in excess of 2001A, Series 2006B, and Series 2007B are variable actual current principal maturities reported as Long-rate demand bonds with remarketing features which Term Debt Subject to Remarketing.
allow bondholders to put debt back to the University.
Because the University is the sole source of liquidity In-substance defeased bonds aggregating should the option to tender be exercised by the $221,465,000 and $96,965,000 are outstanding at June bondholder, these variable rate demand bonds are 30, 2012 and 2011, respectively.
classified in their entirety as current liabilities on the 2012 Financial. Report 55
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 Interest Rate Swap Agreements With an objective of lowering the University's debt. The University assumed a 2006 interest rate borrowing costs, when compared against fixed-rate swap with a negative fair market value of $9,799,000 debt, the University entered into interest rate swap on March 21, 2012 to which the counterparty was agreements in connection with certain variable-rate Bank of America, N.A. The 2006 swap was acquired in System Facilities Revenue Bonds and commercial conjunction with the purchase of a housing and paper. Under each of the swap agreements, the parking facility at the Kansas City campus. The initial University pays the swap counterparty a fixed interest loss related to the 2006 swap is included in Other Non-rate payment and receives a variable rate interest rate Operating Revenues (Expenses). Table 9.3 presents payment that effectively changes a component of the the terms of the outstanding swaps and their fair University's variable interest rate debt to fixed rate values at June 30, 2012.
Table 9.3 - Interest Rate Swaps (in thousands)
Notional Effective Maturity Counterparty Type Amount Date Date Terms Fair Value Credit Rating Pay fixed; $ 40,000 7/18/2002 11/1/2032 Pay 3.950%; receive $ (14,608) Aa3 /A+
receive variable SI FMA Index Pay fixed; 51,570 12/14/2006 8/3/2026 Pay 3.902%; receive (12,833) Baa2 / A-receive variable SIFMA Index Pay fixed; 101,150 7/26/2007 11/1/2031 Pay 3.798%; receive 68% (30,415) Aa3 /A+
receive variable of 1-Month LIBOR Total $192,720 $ (57,856)
The 2002 and 2006 swaps do not specifically hedge any the synthetic instrument method. The notional currently outstanding debt; rather, they serve to amount of the 2007 swap is equal to the outstanding reduce the overall exposure to interest rate risk on the balance of the Series 2007B bonds.
University's variable rate debt not otherwise specifically hedged. The notional amount of the 2002 The University recognizes the fair value and swap is fixed over the life of the agreement. The corresponding changes in fair value of the outstanding notional amount of the 2006 swap decreases annually swaps in the University's financial statements.
over the life of the swap. The 2007 swap specifically Changes in fair value of the outstanding swaps, with hedges System Facilities Revenue Bond Series 2007B, respective financial statement presentation, are the effectiveness of which has been determined using presented in Table 9.4:
Table 9.4 - Interest Rate Swaps - Change in Fair Value (in thousands)
Fair Value at June 30, Fair Value on Change in Type 2012 2011 Acquisition Fair Value Presentation of Change in Fair Value 2002 Swap - Investment Derivative $ (14,608) $ (7,679) N/A $ (6,929) Investment and Endowment Income, Net 2006 Swap - Investment Derivative (12,833) - (9,799) (3,034) Investment and Endowment Income, Net 2007 Swap - Cash Flow Hedge (30,415) (19,023) N/A (11,392) Deferred Outflow of Resources Total $ (57,856) $ (26,702) $ (9,799) $ (21,355)
Fair Value. There is a risk that the fair value of a swap yield curve correctly anticipate future spot interest could be adversely affected by changing market rates. These payments are then discounted using the conditions. The fair values, developed using the zero spot rates implied by the current yield curve for coupon method with proprietary models, were hypothetical zero-coupon bonds due on the date of prepared by the counterparties, JPMorgan Chase Bank, each net settlement of the swap. The fair value of the N.A., and Bank of America, N.A., major U.S. financial interest rate swaps is the estimated amount the institutions. The zero coupon method calculates the University would have either (paid) or received if the future net settlement payments required by the swap, swap agreements were terminated on June 30, 2012.
assuming that the current forward rates implied by the 56 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 Credit Risk. Although the University has entered into Basis Risk. The variable-rate payments received by the the interest rate swaps with creditworthy financial University on the 2007 swap are determined by 68% of institutions, there is credit risk for losses in the event one month LIBOR, whereas the interest rates paid by of non-performance by the counterparties. Subject to the University on its variable-rate bonds correspond to applicable netting arrangements, swap contracts with the SIFMA Index. The University is exposed to basis positive fair values are exposed to credit risk. The risk only to the extent that the historical relationship University faces a maximum possible loss equivalent to between these variable market rates changes going the amount of the derivative's fair value. Subject to forward, resulting in a variable-rate payment received applicable netting arrangements, swaps with negative on the 2007 swap that is significantly less than the fair values are not exposed to credit risk. Collateral variable-rate interest payment on the bonds.
requirements apply to both parties for the 2002 and 2007 swaps and for the 2006 swap collateral Termination Risk. The University is exposed to requirements only apply to the counterparty. The termination risk for the 2002 and 2007 interest rate collateral requirements are determined by a swaps as the counterparty has the right to terminate combination of credit ratings and the aggregate fair the agreements in certain circumstances. For the 2002 value of swaps outstanding with each counterparty as swap, the counterparty has a contractual right to presented in Table 9.5: terminate the agreement if the daily weighted average of the SIFMA Index for the preceding 30 calendar day Table 9.5 - Swap Collateral Requirements period is greater than 7.00%. With regard to the 2007 swap, the counterparty has a contractual right to Fair Value terminate the agreement if the daily weighted average Credit Rating Threshold of the SIFMA Index for the preceding 180 days is (S&P / Moody's) (in thousands) greater than 6.00%. The 2006 interest rate swap is not AAA/Aa a $ 50,000 exposed to termination risk. The SIFMA Index was AA+/Aa 1 30,000 .18% at June 30, 2012.
AA/Aa 2 30,000 AA-/Aa 3 20,000 PledgedRevenues and Debt Service Requirements A+/A1 20,000 For fiscal years 2012 and 2011, annual debt service, A/A2 10,000 including net payments on associated interest rate A-/A3 10,000 swaps, totaled $89,717,000 and $88,237,000, BBB+/Ba a 1 5,000 respectively. For fiscal years 2012 and 2011, System Facilities Pledged Revenue was eleven and twelve If the aggregate fair value of swaps outstanding with times greater than the annual debt service. Net each counterparty is positive and exceeds the fair System Facilities Revenue was 133% and 122% of value threshold for the applicable credit rating, the annual debt service, respectively. Table 9.6 provides counterparties are required to post collateral. If the the System Facilities pledged revenues and operating aggregate fair value of the 2002 and 2007 swaps is expenses.
negative and exceeds the fair value threshold for the applicable credit rating, the University is required to Table 9.6 . System Facilities Pledged Revenues and post collateral. Permitted collateral for either party Operating Expenses (inthousands) includes U.S. Treasuries, U.S. government agencies, cash, and commercial paper rated A1/P1 by S&P or 2012 2011 Moody's, respectively. As the negative aggregate fair Pledged Revenues:
value of the 2002 and 2007 swaps exceeded Net Patient Revenue $ 811,598 $ 745,010
$30,000,000 on June 30, 2012, which is the current fair Housing and Related Food Service 100,284 93,744 value threshold for the University given a Moody's Bookstores 57,634 58,382 rating of Aal, the University had collateral posted with Net Tuition and Fees 26,117 24,950 the counterparty as required. Other Operating Revenue 17,486 36,914 Pledged Revenues 1,013,119 959,000 Operating Expenses 893,540 851,729 Net Revenues $ 119,579 $ 107,271 2012 FinanciaL Report 57
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 Table 9.7 provides future debt service requirements payments and net payments on swaps, the following for the System Facilities Revenue Bonds, including the data was based upon variable rates in effect at June impact of both interest rate swap agreements. With 30, 2012. As market rates vary, variable rate bond respect to the inclusion of variable rate bond interest interest payments and net swap payments will vary.
Table 9.7 - Future Debt Service - System Facilities Revenue Bonds (in thousands)
Total Before Hedging Investment Investment Total Future Fiscal Year Principal Interest Derivatives, Net Derivatives Derivatives, Net Debt Service 2013 21,295 57,964 3,653 82,912 3,427 86,339 2014 24,325 57,048 3,637 85,010 3,417 88,427 2015 26,145 56,000 3,621 85,766 3,411 89,177 2016 30,945 54,794 3,540 89,279 3,398 92,677 2017 32,095 53,482 3,423 89,000 3,392 92,392 2018-2022 249,130 235,708 15,091 499,929 16,764 516,693 2023-2027 186,670 189,719 10,994 387,383 16,376 403,759 2028-2032 165,570 150,779 3,851 320,200 15,840 336,040 2033-2037 146,900 114,055 - 260,955 8,126 269,081 2038-2042 323,620 56,585 - 380,205 4,628 384,833
$ 1,206,695 $ 1,026,134 $ 47,810 $ 2,280,639 $ 78,779 $ 2,359,418 Commercial Paper Notes Payable During fiscal year 2012, the University issued Notes payable consist of loans from the state
$160,935,000 of commercial paper to fund the Department of Natural Resources Energy Efficiency purchase of housing and parking facilities and refund Leveraged Loan Program. Interest is payable System Facilities Revenue Bonds, Series 2000B, semiannually and ranges from 2.0% to 3.2%.
Series 2001A, and Series 2006B.
The future payments on all notes payable at June 30, On October 21, 2011, the Board adopted a flexible 2012, are as follows:
financing program for the University referred to as the University's Commercial Paper Program ("CP Table 9.8 - Future Notes Payable Payments Program"). The CP Program authorizes the periodic Amount issuance of up to an aggregate outstanding principal Year Ending June 30 (in thousands) amount of $375 million in Commercial Paper Notes.
The initial term of the authorization is approximately 2013 $ 329 fifteen years. 2014 855 2015 855 The primary objective of the CP Program is to 2016 780 provide flexibility in managing the University's 2017 577 overall debt program through a flexible financing 2018-2022 1,885 vehicle at attractive interest rates for various Total Future Notes Payable Payments 5,280 University financial needs including but not limited Less: Amount Representing Interest (319) to: (a) financing capital projects, including the Future Notes Payable acquisition or construction of buildings, Principal Payments $ 4,961 infrastructure or equipment, (b) allowing for the refunding/refinancing of outstanding debt, and (c) providing a readily accessible source of funds for various working capital purposes.
58 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 Capital Lease Obligations The future minimum payments on all capital leases at June 30, 2012, are as follows:
The University leases various facilities and equipment through capital leases. Facilities and equipment under Table 9.9 - Future Capital Lease Payments capitalized leases are recorded at the present value of future minimum lease payments. Amount Year Ending June 30 (in thousands) 2013 1,563 2014 1,563 2015 1,563 2016 1,563 2017 1,563 2018-2020 3,515 Tota I Future Minimum Payments 11,330 Less: Amount Representing Interest (4,714)
Present Value of Future Minimum Lease Payments I $ 6,616 DISCRETELY PRESENTED COMPONENT UNIT- MEDICAL ALLIANCE The Medical Alliance's outstanding debt at June 30, 2012 and 2011, with corresponding activity, is as follows:
Table 9.10 - Long-Term Debt - Medical Alliance (in thousands)
Beginning Ending Current As of June 30, 2012 Balance Additions Reductions Balance Portion Health Facilities Revenue Bonds Series 1998 $ 18,875 $ - $ (18,875) $ $
Health Facilities Revenue Bonds Series 2004 15,150 - (15,150) -
Health Facilities Revenue Bonds Series 2011 - 32,835 - 32,835 1,715 Total Bonds Payable 34,025 32,835 (34,025) 32,835 1,715 Capital Lease Obligations 2,685 - (1,158) 1,527 1,202 Total Long-Term Debt $ 36,710 $ 32,835 $ (35,183) $ 34,362 $ 2,917 Beginning Ending Current As of June 30, 2011 Balance Additions Reductions Balance Portion Health Facilities Revenue Bonds Series 1998 $ 19,510 $ - $ (635) $ 18,875 $ 660 Health Facilities Revenue Bonds Series 2004 15,570 - (420) 15,150 445 Total Bonds Payable 35,080 - (1,055) 34,025 1,105 Capital Lease Obligations 3,753 - (1,068) 2,685 1,158 Total Long-Term Debt $ 38,833 $ - $ (2,123) $ 36,710 $ 2,263 Bonds Payable of the respective bonds. The Series 2011 Bonds are secured by the unrestricted receivables of the Medical Tax-exempt revenue bonds (Series 2011 Bonds) in the Alliance. Under the terms of the Master Indenture, the principal amount of $32,835,000 were issued by the Medical Alliance is required to make payments of Health and Education Facilities Authority of the State principal, premium, if any, and interest on the bonds.
of Missouri (the Authority) on behalf of the Medical In addition, the Master Indenture contains certain Alliance dated November 1, 2011. The proceeds were restrictions on the operations and activities of the used to refund all of the outstanding Series 1998 and Medical Alliance, including, among other things, 2004 Bonds and costs of issuance. The premium and covenants restricting the incurrence of additional the deferred financing costs on the Series 2011 Bonds indebtedness and the creation of liens on property, are amortized on the straight-line method over the life except as permitted by the Master Indenture.
2012 FinanciaL Report 59
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 The Master Indenture has mandatory sinking fund 10. RISK MANAGEMENT redemption requirements in which funds are required The University is exposed to various risks of loss to be set aside beginning in 2021 for the Series 2011 related to torts; theft of, damage to, and destruction of bonds.
assets; injuries to employees; natural disasters; and Interest expense incurred on the bonds during the various medically related benefit programs for years ended June 30, 2012 and 2011 was $1,433,000 employees. The University funds these losses through and $1,830,000, respectively, of which no interest was a combination of self-insured retentions and capitalized. commercially purchased insurance. The amount of self-insurance funds and commercial insurance As of June 30, 2012, the total of principal and interest maintained are based upon analysis of historical due on bonds during the next five years and in information and actuarial estimates. Settled claims subsequent five-year periods is as follows: have not exceeded commercial coverage in any of the past three fiscal years.
Table 9.11 - Future Debt Service -
Medical Alliance (in thousands) The liability for self-insurance claims at June 30, 2012 and 2011 of $69,469,000 and $72,949,000, Fiscal Year Principal Interest Total respectively, represents the present value of amounts 2013 1,715 1,190 2,905 estimated to have been incurred by those dates, using 2014 1,740 1,139 2,879 discount rates ranging from 1.5% to 2.7% for fiscal year 2015 1,795 1,085 2,880 2012 and 2.0% to 3.4% for fiscal year 2011, based on 2016 1,840 1,038 2,878 expected future investment yield assumptions.
2017 1,885 992 2,877 2018-2022 10,320 4,007 14,327 Changes in the self-insurance liability during fiscal years 2012, 2011, and 2010 were as follows:
2023-2027 12,480 1,753 14,233 2028-2031 1,060 27 1,087 Table 10.1 - Self-Insurance Claims
$ 32,835 $ 11,231 $ 44,066 Liability (inthousands)
New Claims Capital Leases Beginning and Changes Claim End of The Medical Alliance leases certain equipment through Fiscal Year of Year in Estimates Payments Year capital leases. Equipment under capitalized leases is 2012 $72,949 $ 213,357 $(216,837) $69,469 recorded at the present value of future minimum lease 2011 77,501 194,051 (198,603) 72,949 payments. 2010 73,266 191,350 (187,115) 77,501 The future minimum payments on all capital leases at June 30, 2012, are as follows: 11. COMMITMENTS AND CONTINGENCIES Endowment and Pension Trust Funds Table 9.12 - Future Capital Lease Payments Medical Alliance (in thousands) The University Endowment Fund and Pension Trust Year Ending June 30 Amount Funds have made commitments to make investments 2013 $ 1,240 in certain investment partnerships pursuant to 2014 328 provisions in the various partnership agreements.
Total Future Minimum Payments 1,568 These commitments totaled $45,339,000 and Less: Amount Representi ng Interest (41) $96,138,000 for the University and the Pension Trust Present Value of Future Minimum Funds, respectively, at June 30, 2012.
Lease Payments $ 1,527 60 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 University Operating Leases are exempted from FICA taxes based upon the "student exception" for tax periods ending before April The University leases various facilities and equipment 1, 2005 when new regulations became effective. In under agreements recorded as operating leases. December 2010, the University of Missouri perfected Operating lease expenses for the years ended June 30, its claims for the refund of taxes withheld for the 2012 and 2011 were $20,247,000 and $20,251,000, relevant periods.
respectively.
For fiscal year 2011, the University recorded a Future minimum payments on all significant operating receivable for this refund and related accrued interest leases with initial or remaining terms of one year or income in the amounts of $19,187,000 and more at June 30, 2012, are as follows: $11,600,000, respectively, which reflects the estimated total refund from the Internal Revenue Service. In Table 11.1 - Future Operating Lease Payments addition, accounts payable increased by $21,026,000 Fiscal Year Amount representing the portion of the refund and accrued interest income due to individual medical residents 2013 $ 4,166 and third-party entities. A net amount of $6,761,000 2014 3,759 was recorded as a contra expense to benefits and 2015 2,788 $3,000,000 as investment income.
2016 2,059 2017 1,421 For fiscal year 2012, the University has made no 2018-2022 16 change to the receivable for this refund and has Total Future Lease Payments $14,209 accrued an additional $568,000 in accrued interest income of which a net amount of $72,000 was In addition to the above lease obligations, the recorded as investment income.
University has outstanding commitments for the usage Pollution Remediation and ongoing support of University Health Care's information technology environment. As of January The University has been working with the Voluntary 2010, University Health Care began contracting for Cleanup Program of the Missouri Department of software usage and maintenance fees, as well as, labor Natural Resources (MDNR) to characterize subsurface costs for approximately 100 full-time equivalent contamination on a University owned property. The employees, with the Cerner Corporation. This results were reported to MDNR during fiscal year 2011 agreement, called IT Works, represents the labor and and the University continues to await direction on how software component of a cooperative relationship to proceed. As a result, the University is unable to between University Health Care and Cerner estimate future costs to clean up the site at this time.
Corporation referred to as the Tiger Institute for Health Innovation (the Tiger Institute). The Tiger Radiology Investigation Institute provides continued development of information technology within the clinical areas, as The University has engaged an outside law firm to well as developing new technology initiatives in health investigate allegations of improper billings since information systems.
November 2011 after it learned that a federal investigation led by the U.S Attorney's Office was As of June 30, 2012, this contracted commitment under way. The University's investigation has totaled $139,216,000 and will be paid in the following identified indications that two radiologists improperly amounts: $16,819,000 in 2013, $17,323,000 in 2014, certified that they had performed services that were
$17,843,000 in 2015, $18,378,000 in 2016, actually performed by resident physicians. The
$18,930,000 in 2017 and $49,923,000 thereafter.
University is cooperating with the investigation of the U.S. Attorney's Office in an effort to achieve a Medical Resident FICA Refunds resolution of the matter. The University is unable to In March 2010, the United States Internal Revenue estimate the potential future losses or penalties at this Service accepted the position that medical residents time.
2012 Financial Report 61
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011
- 12. RETIREMENT, DISABILITY AND DEATH exchanged for an actuarially-equivalent annuity BENEFIT PLAN selected from an array of options with joint and survivor, period certain, and guaranteed annual Plan Description - the Retirement Plan is a single increase features.
employer, defined benefit plan for all qualified employees. As authorized by Section 172.300, Revised Vested employees who terminate prior to retirement Statutes of Missouri, the University's Board of Curators eligibility may elect to transfer the actuarial equivalent administers the Retirement Plan and establishes its of their benefit to an Individual Retirement Account or terms. Full-time employees vest in the Retirement Plan into another employer's qualified plan that accepts after five years of credited service and become eligible such rollovers. If the actuarial equivalent is less than for benefits based on age and years of service. A $20,000, it may instead be taken in the form of a lump vested employee who retires at age 65 or older is sum payment.
eligible for a lifetime annuity calculated at a certain rate times the credited service years times the In addition, the Retirement Plan allows vested compensation base (average compensation for the five employees who become disabled to continue accruing highest consecutive salary years). The rate is 2.2% if service credit until they retire. It also provides a pre-the employee was hired before October 1, 2012, or retirement death benefit for vested employees.
1.0% if the employee was hired after September 30, 2012. Academic members who provide summer The Retirement Plan provides a minimum value teaching and research service receive additional feature for vested employees who terminate or retire.
summer service credit. The Board of Curators may The minimum value is calculated as the actuarial periodically approve increases to the benefits paid to equivalent of 5% of the employee's eligible existing pensioners. However, vested members who compensation invested at 7.5% per credited service leave the University prior to eligibility for retirement year or the regularly calculated benefit.
are not eligible for these pension increases.
Contributions - The University's contributions to the Table 12.1 - Retirement Plan Membership Retirement Plan are equal to the actuarially 2012 2011 determined employer contribution requirement, as a Active Members percent of payroll, which averaged 7.2% and 5.7% for Vested 11,000 10,758 the years ended June 30, 2012 and 2011, respectively.
Nonvested 7,274 7,634 Employees are required to contribute 1% of their Pensioners and Beneficiaries 7,644 7,323 salary up to $50,000 in a calendar year and 2% of their Former Employees with salary in excess of $50,000. An actuarial valuation of Deferred Pensions 5,447 4,211 the Plan is performed annually and the University's Total Members 31,365 29,926 contribution rate is updated at the beginning of the University's fiscal year on July 1, to reflect the Vested employees who are at least age 55 and have actuarially determined funding requirement from the ten years or more of credited service or age 60 with at most recent valuation, as of the preceding October 1.
least five years of service may choose early retirement This actuarial valuation reflects the adoption of any with a reduced benefit. However, if the employee Retirement Plan amendments during the previous retires at age 62 and has at least 25 years of credited fiscal year.
service, the benefit is not reduced. Up to 30% of the retirement annuity can be taken in a lump sum payment. In addition, the standard annuity can be 62 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011 The University's annual pension cost and net pension obligation to the Retirement Plan for the current year, excluding the impact of employee contributions, along with three-year trend information, were as follows:
Table 12.2 - Three-Year Trend Information (in thousands)
Annual Required Percentage of Contribution Annual Pension Contributions APC Net Pension Fiscal Year Ending (ARC) Cost (APC) Made Contributed Obligation 6/30/2010 $ 48,040 $ 48,040 $ 48,040 100%
6/30/2011 57,541 57,541 57,541 100%
6/30/2012 74,618 74,618 74,618 100%
Basis of Accounting - The Retirement Plan's spread effects of short-term volatility in the market accounting records are prepared using the accrual value of investments over a 5-year period. On June 29, basis of accounting. Employer contributions to the 2012, a plan amendment was approved which will Retirement Plan are recognized when due and the change the plan benefit for employees hired on or employer has made a formal commitment to provide after October 1, 2012. Since no current employees on the contributions. Benefits and refunds are recognized the October 1, 2011 valuation were impacted by these when due and payable in accordance with terms of the plan benefit changes, a "tabular" contribution was Retirement Plan. The Retirement Plan does not issue a determined as part of the valuation and during fiscal separate financial report. year 2013 it will be applicable to the salaries of employees new to the plan on or after October 1, Investment Valuation - Investments are reported at 2012. The underfunded actuarial accrued liability is fair value. being amortized as a level dollar amount on an open basis over 20 years from the October 1, 2011 valuation Funded Status - As of the most recent actuarial date.
valuation date, October 1, 2011, the Retirement Plan was 90.1% funded. The actuarial accrued liability (AAL) for benefits was $3,138,190,000 and the actuarial 13. OTHER POSTEMPLOYMENT BENEFITS value of the assets was $2,828,697,000, resulting in Plan Description - In addition to the pension benefits unfunded AAL of funding of $309,493,000. The described in Note 12, the University operates a single-covered payroll (annual payroll of active employees employer, defined benefit postemployment plan. The covered by the plan) was $1,031,891,000 and the ratio University's Other Postemployment Benefits (OPEB) of unfunded AAL funding to covered payroll was Plan provides postretirement medical, dental, and life 30.0%.
insurance benefits to employees who retire from the University after attaining age 55 and before reaching The Schedule of Funding Progress, presented as age 60 with ten or more years of service, or after required supplementary information (RSI) following attaining age 60 with five or more years of service. As the notes to the financial statements, presents of June 30, 2012 and 2011, 6,319 and 6,080 retirees, multiyear trend information about whether the respectively, were receiving benefits, and an estimated actuarial values of plan assets are increasing or 18,336 active University employees may become decreasing over time relative to the actuarial accrued eligible to receive future benefits under the plan.
liability for benefits.
Postemployment medical, dental and life insurance benefits are also provided to long-term disability Actuarial Methods and Assumptions - In the October claimants who were vested in the University's 1, 2011 actuarial valuation, the entry age actuarial cost Retirement Plan at the date the disability began, method was used. Actuarial assumptions included (1) provided the onset date of the disability was on or an 8% rate of investment return net of administrative after September 1, 1990. As of June 30, 2012 and expenses, and (2) projected salary increases ranging 2011, 233 and 227 long-term disability claimants, from 4.5% to 5.3% per year. The assumptions did not respectively, met those eligibility requirements.
include postretirement benefit increases. The actuarial value of assets was determined using techniques that 2012 Financial Report 63
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For Lhe Years Ended June 30, 2012 and 2011 The terms and conditions governing the Both options have a 149-day waiting period and postemployment benefits to which employees are provide benefits until age 65. The University pays the entitled are at the sole authority and discretion of the full cost of the Option A premium, while employees University's Board of Curators. enrolled in Option B pay the additional cost over the Optional A premium.
Basis of Accounting - The OPEB Plan's accounting records are prepared using the accrual basis of The Annual Required Contribution (ARC) represents a accounting, in accordance with GASB Statements No. level of funding that an employer is projected to need 43 and No. 45, which established requirements for in order to prefund its obligations for postemployment financial reporting for postemployment benefits other benefits over its employees' years of service. The than pension plans. The assets of the OPEB Trust Fund University has no obligation to make contributions in are irrevocable and legally protected from creditors advance of when insurance premiums or claims are and dedicated to providing postemployment benefits due for payment and currently funds postemployment in accordance with terms of the plan. The OPEB Plan benefits at a level no less than the pay-as-you-go basis.
does not issue a separate financial report. In fiscal year 2012, the University contributed
$25,477,000, or 50.0% of the ARC, which was Contributions and Reserves - Contribution $50,954,000 and represented 4.9% of annual covered requirements of employees and the University are payroll. In fiscal year 2011, the University contributed established and may be amended by the University's $30,242,000, or 50.0% of the ARC, which was Board of Curators. For employees retiring prior to $60,484,000 and represented 6% of annual covered September 1, 1990, the University contributes 2/3 of payroll.
the medical benefits premium and 1/2 of the dental plan premium. For employees who retired on or after Table 13.1 presents the OPEB cost for the year, the September 1, 1990, the University contributes toward amount contributed, and changes in the OPEB premiums based on the employee's length of service obligation for fiscal year 2012:
and age at retirement.
Table 13.1 - Changes in Net OPEB The University makes available two group term life Obligation (in thousands) insurance options. Option A coverage is equal to the Annual Required Contribution $ 50,954 retiree's salary at the date of retirement, while Option Interest on Existing Net OPEB Obligation 4,790 B is equal to two times that amount. For each Option, ARC Adjustment (4,077) graded decreases in coverage are made when the Annual OPEB Cost 51,667 retiree attains specific age levels. The University pays Contributions Made (25,477) the full cost of Option A and approximately 91% of the Increase in net OPEB obligation 26,190 cost of Option B coverage. Coverage for group term life Net OPEB obligation - beginning of year 83,306 insurance ends on January 1 following the retiree's Net OPEB obligation - June 30, 2012 $ 109,496 70th birthday.
Funding Status and Funding Progress - As of July 1, For the year ended June 30, 2012, participants 2011, the date of the last valuation, the OPEB Plan was contributed $13,681,000 or approximately 47.4% of 8.4% funded. The actuarial accrued liability (AAL) for total premiums through their required contributions, postemployment benefits was $542,844,000, with which vary depending on the plan and coverage $45,745,000 in actuarial value of assets, resulting in an selection. unfunded actuarial accrued liability (UAAL) of
$497,099,000. The covered payroll (annual payroll of The University makes available two long-term disability active employees covered by the plan) was options to its employees. Option A coverage is equal to $1,041,413,000, and the ratio of UAAL to covered 60% of the employee's salary on the date the disability payroll was 47.7%.
began, when integrated with benefits from all other sources. Option B coverage is equal to 66-2/3% of the employee's salary, integrated so that benefits from all sources will not exceed 85% of the employee's salary.
6z4 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For Lhe Years Ended June 30, 2012 and 2011 Actuarial valuations involve estimates of the value of Benefit projections for financial reporting purposes are reported amounts and assumptions about the based on the benefits provided under the terms of the probability of events far into the future. Examples substantive plan in effect at the time of each valuation include assumptions about future employment, and the historical pattern of cost sharing between the mortality, and the healthcare cost trend. Actuarially employer and plan members to that point. The determined amounts are subject to continual revision projection of benefits for financial reporting purposes of actual results, are compared to past expectations does not explicitly incorporate the potential effects of and new estimates are made about the future. The legal or contractual funding limitations on the pattern Schedule of Funding Progress, presented as required of cost sharing between the University and plan supplementary information following the notes to the members in the future.
financial statements, will present multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
The University's annual OPEB cost and net OPEB obligation to the OPEB Plan for the current year, along with three-year trend information, were as follows:
Table 13.2 - OPEB Plan Three-Year Trend Information (in thousands)
Annual Percentage of Net OPEB Required Annual OPEB Contributions AOC Obligation Fiscal Year Ending Contribution Cost (AOC) Made Contributed (Asset) 6/30/2010 $ 52,563 $ 52,763 $ 23,789 45.1% $ 52,613 6/30/2011 60,485 60,935 30,242 49.6% 83,306 6/30/2012 50.954 51.667 25.477 49.3% 109.496 Actuarial Methods and Assumptions - Consistent with 5.75% investment rate of return, net of administrative the long-term perspective of actuarial calculations, the expenses. The projected annual healthcare trend rate actuarial methods and assumptions used include is 5.0% to 9.0% initially, reduced by 0.5% decrements techniques that are designed to reduce short-term to an ultimate rate of 5.0%. The UAAL is being volatility in actuarial accrued liabilities and the amortized as a level dollar amount on an open basis, actuarial value of assets. The projected unit credit level percent of pay, over a 30-year amortization actuarial cost method was used in the July 1, 2011 period.
actuarial valuation. Actuarial assumptions included a 2012 Financial. Report 65
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011
- 14. OPERATING EXPENSES BY FUNCTION The operating expenses of the University are presented based on natural expenditure classifications. The University's operating expenses by functional classification are as follows:
Table 14.1 - Operating Expenses by Functional and Natural Classifications (in thousands)
Supplies, Scholarships Salaries and Services and and Fiscal Year Ended June 30, 2012 Wages Benefits Other Fellowships Depreciation Total Instruction $ 417,895 $ 113,406 $ 73,394 $ $ - $ 604,695 Research 108,266 24,756 77,396 - 210,418 Public Service 74,601 21,076 51,631 - 147,308 Academic Support 78,044 23,708 31,990 - 133,742 Student Services 41,117 11,974 22,115 - 75,207 Institutional Support 98,278 30,703 (26,417) - 102,565 Operation and Maintenance of Plant 35,245 11,503 50,365 - 97,114 Auxiliary Enterprises 464,902 122,469 482,224 - 1,069,595 Scholarships and Fellowships - - - 60,380 - 60,380 Depreciation - - - 160,915 160,915 Total Operating Expenses $1,318,349 $ 359,595 $ 762,700 $ 60,380 $ 160,915 $2,661,939 Supplies, Scholarships Salaries and Services and and Fiscal Year Ended June 30, 2011 Wages Benefits Other Fellowships Depreciation Total Instruction $ 394,945 $ 105,048 $ 57,088 $ - $ - $ 557,081 Research 113,872 24,441 81,590 - - 219,903 Public Service 73,888 20,139 49,519 - - 143,546 Academic Support 75,563 22,321 29,972 - - 127,856 Student Services 38,454 10,971 20,567 - - 69,992 Institutional Support 94,518 28,840 (25,424) - - 97,934 Operation and Maintenance of Plant 34,614 10,901 24,467 - - 69,982 Auxiliary Enterprises 446,372 105,679 478,265 - - 1,030,316 Scholarships and Fellowships - - - 58,790 - 58,790 Depreciation - - - 155,103 155,103 Total Operating Expenses $1,272,226 $ 328,340 $ 716,044 $ 58,790 $ 155,103 $2,530,503 66 2012 Financial Report
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011
- 15. FIDUCIARY FUNDS - PENSION TRUST FUNDS COMBINING STATEMENTS Combining financial statements for the Fiduciary Funds - Pension Trust Funds, which encompass the Retirement Trust and OPEB Trust, are as follows:
Table 15.1 - Statement of Plan Net Assets (in thousands) 2012 2011 Retirement OPEB Total Retirement OPEB Total Assets Cash and Cash Equivalents $ 79,083 $ 26,949 $ 106,033 $ 88,085 $ 28,131 $ 116,216 Investment of Cash Collateral 50,023 - 50,023 257,463 - 257,463 Investment Settlements Receivable 83,396 83,396 27,003 3 27,006 Investments:
Debt Securities 933,561 933,561 984,980 - 984,980 Equity Securities 505,512 505,512 607,800 - 607,800 Commingled Funds 1,062,406 23,263 1,085,669 967,821 17,614 985,435 Nonmarketa ble Alternative Investments 212,993 - 212,993 174,899 174,899 Other 11,895 - 11,895 15,022 15,022 Total Assets 2,938,870 50,212 2,989,082 3,123,073 45,748 3,168,821 Liabilities Accounts Payable and Accrued Liabilities 169 - 169 119 - 119 Collateral Held for Securities Lending 50,023 50,023 257,463 - 257,463 Investment Settlements Payable 206,980 206,980 152,054 3 152,057 Total Liabilities 257,172 257,172 409,636 3 409,639 Net Assets Held in Trust for Retirement and OPEB $2,681,698 $ 50,212 $2,731,910 $2,713,437 $ 45,745 $2,759,182 Table 15.2 - Statement of Changes in Plan Net Assets (in thousands) 2012 2011 Retirement OPEB Total Retirement OPEB Total Net Revenues and Other Additions Investment Income:
Interest and Dividend Income, Net of Fees $ 57,947 $ 642 $ 58,589 $ 61,718 $ 5 $ 61,723 Net Appreciation (Depreciation) in Fair Value of Investments (31,357) (191) (31,548) 379,606 61 379,667 Net Investment Income (Loss) 26,590 451 27,041 441,324 66 441,390 Contributions:
University 74,618 25,477 100,095 57,541 30,242 87,783 Members 13,232 14,088 27,320 12,610 13,390 26,000 Total Contributions 87,850 39,565 127,415 70,151 43,632 113,783 Other Revenues - 1,218 1,218 - 695 695 Total Net Revenues and Other Additions 114,441 41,233 155,674 511,475 44,393 555,868 Expenses and Other Deductions Administrative Expenses 2,263 367 2,630 2,297 324 2,621 Payments to Retirees and Beneficiaries 143,917 36,399 180,316 135,440 36,741 172,181 Total Expenses and Other Deductions 146,180 36,766 182,946 137,737 37,065 174,802 Increase (decrease) in Net Assets Held in Trust for Retirement and OPEB (31,739) 4,468 (27,271) 373,738 7,328 381,066 Net Assets Held i n Trust for Retirement& OPEB, Beginning of Year 2,713,437 45,745 2,759,182 2,339,699 38,417 2,378,116 Net Assets Held in Trust for Retirement and OPEB, End of Year $ 2,681,698 $ 50,213 $2,731,911 $2,713,437 $ 45,745 $2,759,182 2012 FinanciaL Report 67
UNIVERSITY OF MISSOURI SYSTEM NOTES TO FINANCIAL STATEMENTS For the Years Ended June 30, 2012 and 2011
- 16. Special Item On November 7, 2011, IDEXX Reference Laboratories, Incorporated purchased certain assets of a research and diagnostic lab on the Columbia campus and assumed certain liabilities as part of the sales agreement. The University received net proceeds of $43,000,000 of which $42,316,000 was recorded as a special item in the Statement of Revenues, Expenses, and Changes in Net Assets for the year ended June 30, 2012.
68 2012 Financial ReporL
UNIVERSITY OF MISSOURI SYSTEM REQUIRED SUPPLEMENTARY INFORMATION For the Years Ended June 30, 2012 and 2011 (unaudited)
Retirement Plan - Schedule of Funding Progress (inthousands)
UAAL (Excess)
Actuarial Actuarial Unfunded Annual as a % of Actuarial Valuation of Accrued AAL/(Excess Covered Covered Valuation Assets Liability (AAL) Funding) Funded Ratio Payroll Payroll Date (a) (b) (b-a) (a / b) (c) ([b-a]/c) 10/1/2006 2,325,264 2,400,807 75,543 96.9% 846,884 8.9%
10/1/2007 2,651,535 2,555,592 (95,943) 103.8% 891,648 -10.8%
10/1/2008 2,808,126 2,733,032 (75,094) 102.7% 954,430 -7.9%
10/1/2009 2,843,422 2,819,524 (23,898) 100.8% 970,060 -2.5%
10/1/2010 2,851,957 2,960,832 108,875 96.3% 979,888 11.1%
10/1/2011 2,828,697 3,138,190 309,493 90.1% 1,031,891 30.0%
Retirement Plan - Schedule of Employer Contributions (inthousands)
Actuarial Annual Net Pension Valuation Required Annual Contributions Percentage Obligation Year Ended Date Contribution Pension Cost Made Contributed (Asset) 6/30/2007 10/1/2005 74,736 74,736 74,736 100%
6/30/2008 10/1/2006 72,284 72,284 72,284 100%
6/30/2009 10/1/2007 56,663 56,663 56,663 100%
6/30/2010 10/1/2008 48,040 48,040 48,040 100%
6/30/2011 10/1/2009 57,541 57,541 57,541 100%
6/30/2012 10/1/2010 74,618 74,618 74,618 100%
See independent auditors' report.
2012 FinanciaL Report 69
UNIVERSITY OF MISSOURI SYSTEM REQUIRED SUPPLEMENTARY INFORMATION For the Years Ended June 30, 2012 and 2011 (unaudited)
OPEB Plan - Schedule of Funding Progress (in thousands)
Actuarial Actuarial Accrued Annual UAAL as a %
Actuarial Valuation of Liability Unfunded Funded Covered of Covered Valuation Assets (AAL) AAL Ratio Payroll Payroll Date (a) (b) (b-a) (a / b) ([b-a] /c) 7/1/2007 (a) 560,340 560,340 0.0% 930,365 60.2%
7/1/2009 37,171 646,655 609,484 5.7% 1,009,800 60.4%
7/1/2011 (b) 45,745 542,844 497,099 8.4% 1,041,413 47.7%
(a) The 7/1/2007 Actuarial Valuation was revised based on a change in the discount rate from 6.75% to 5.75%.
(b) Date of last valuation provided OPEB Plan - Schedule of Employer Contributions (in thousands)
Actuarial Annual Net Pension Valuation Required Percentage Obligation Year Ended Date Contribution Contributed (Asset) 6/30/2010 7/1/2007 (a) 52,563 45% 52,613 6/30/2011 7/1/2009 60,485 50% 83,306 6/30/2012 7/1/2011 50,954 50% 109,496 (a) The 7/1/2007 Actuarial Valuation was revised based on a change in the discount rate from 6.75% to 5.75%.
See independentauditors' report.
70 2012 FinanciaL Report
University of Missouri System COLUMBIA I KANSAS CITY I ROLLA I ST.LOUIS STATISTICAL SECTION Advancing Missouri U
ie sit fMsor Syte 201 Frnan -3me t 7
Supplementary Information - Unaudited- See Accompanying IndependentAuditors' Report Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Assets Current Assets Cash and Cash Equivalents $ 228,639 $ 44,249 $ 149,515 $ 115,919 $ 57,987 Restricted Cash and Cash Equivalents 134,141 177,038 177,798 137,022 109,022 Short-Term Investments 126,054 151,070 40,268 124,609 172,294 Restricted Short-Term Investments 32,092 49,264 30,619 25,882 91,800 Investment of Cash Collateral 32,032 101,047 111,557 111,719 106,360 Accounts Receivable, Net 274,100 255,589 249,460 241,325 249,654 Pledges Receivable, Net 11,898 12,374 14,505 13,382 9,796 Investment Settlements Receivable 37,316 15,634 6,200 15,800 72,878 Notes Receivable, Net 8,151 8,532 9,046 12,564 13,747 Due To Component Units (7,029) (6,658) (5,285) (3,900) (4,355)
Inventories 36,022 35,193 28,401 33,009 33,063 Prepaid Expenses and Other Current Assets 27,332 25,759 25,604 21,618 18,636 Total Current Assets 940,748 869,091 837,688 848,949 930,882 Noncurrent Assets Pledges Receivable, Net 41,708 14,895 16,256 17,231 21,147 Notes Receivable, Net 54,698 54,015 50,635 47,524 46,898 Deferred Charges and Other Assets 10,253 13,218 12,374 9,836 10,397 Long-Term Investments 1,363,827 1,357,918 1,171,998 778,538 810,655 Restricted Long-Term Investments 1,066,915 1,161,184 891,067 741,556 919,364 Capital Assets, Net 2,848,993 2,642,196 2,534,365 2,392,852 2,227,427 Total Noncurrent Assets 5,386,394 5,243,426 4,676,695 3,987,537 4,035,888 Deferred Outflow of Resources 30,415 19,023 22,192 - -
Total Assets and Deferred Outflow of Resources $ 6,357,557 $ 6,131,540 $ 5,536,575 $ 4,836,486 $ 4,966,770 Liabilities Current Liabilities Accounts Payable $ 140,274 $ 130,803 $ 123,809 $ 94,531 $ 105,024 Accrued Liabilities 150,971 143,347 138,309 130,837 120,967 Deferred Revenue 84,923 78,209 78,200 80,703 67,821 Funds Held for Others 65,643 62,951 53,245 66,403 70,744 Investment Settlements Payable 177,988 47,319 41,931 50,318 136,606 Collateral Held for Securities Lending 32,032 101,047 111,557 115,291 106,360 Commercial Paper and Current Portion of Long-Term Debt 183,226 29,107 30,139 24,922 21,697 Long-Term Debt Subject to Remarketing 100,330 220,885 223,680 224,925 226,120 Total Current Liabilities 935,387 813,668 800,870 787,930 855,339 Noncurrent Liabilities Long-Term Debt 1,122,312 1,140,934 915,906 608,114 631,742 Deferred Revenue - 1,519 1,925 1,603 1,876 Derivative Instrument Liability 57,856 26,702 30,680 - -
Other Postemployment Benefits Liability 109,496 83,306 52,613 23,639 -
Other Noncurrent Liabilities 47,889 49,167 53,845 50,423 47,371 Total Noncurrent Liabilities 1,337,553 1,301,628 1,054,969 683,779 680,989 Total Liabilities 2,272,940 2,115,296 1,855,839 1,471,709 1,536,328 Net Assets Invested in Capital Assets, Net of Related Debt 1,545,227 1,516,095 1,485,090 1,540,654 1,439,753 Restricted Nonexpendable -
Endowment 771,146 788,876 679,494 612,119 718,314 Expendable -
Scholarship, Research, Instruction & Other 299,789 264,605 244,226 235,405 262,266 Loans 79,091 77,300 75,637 78,357 77,656 Capital Projects 10,149 18,438 32,373 30,043 27,597 Unrestricted 1,379,215 1,350,930 1,163,916 868,199 904,856 Total Net Assets 4,084,617 4,016,244 3,680,736 3,364,777 3,430,442 Total Liabilities & Net Assets $ 6,357,557 $ 6,131,540 $ 5,536,575 $ 4,836,486 $ 4,966,770 72 2012 FinanciaL Report
Supplementary Information - Unaudited - See Accompanying Independent Auditors' Report Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Operating Revenues Tuition and Fees, Net $ 736,074 $ 671,419 $ 630,498 $ 601,742 $ 557,085 Less: Scholarship Allowances 190,798 175,917 164,187 148,578 139,880 Net Tuition and Fees 545,276 495,502 466,311 453,164 417,205 Federal Grants and Contracts 184,882 196,122 183,885 172,669 184,416 State and Local Grants and Contracts 55,837 57,375 66,194 53,042 54,414 Private Grants and Contracts 71,023 67,025 68,044 71,034 60,318 Sales and Services of Educational Activities 23,106 21,671 22,560 22,088 19,569 Auxiliary Enterprises -
Patient Medical Services, Net 813,024 759,734 736,799 702,424 681,312 Housing and Dining Services, Net 99,667 93,724 89,743 81,939 72,503 Bookstores 57,566 58,591 59,288 62,113 61,423 Other Auxiliary Enterprises, Net 199,868 220,162 198,748 190,315 181,893 Other Operating Revenues 55,312 55,811 49,250 53,681 46,968 Total Operating Revenues 2,105,561 2,025,717 1,940,822 1,862,469 1,780,021 Operating Expenses Salaries and Wages 1,318,349 1,272,226 1,236,965 1,213,837 1,153,676 Benefits 359,595 328,340 303,300 299,586 310,375 Supplies, Services and Other Operating Expenses 762,700 716,044 676,362 672,711 662,331 Scholarships and Fellowships 60,380 58,790 55,469 48,456 39,485 Depreciation 160,915 155,103 146,753 131,167 125,996 Total Operating Expenses 2,661,939 2,530,503 2,418,849 2,365,757 2,291,863 Operating Loss before State Appropriations (556,378) (504,786) (478,027) (503,288) (511,842)
State Appropriations 397,629 437,631 498,358 479,478 462,281 Operating Income (Loss) after State Appropriations, Before Nonoperating Revenues (Expenses) (158,749) (67,155) 20,331 (23,810) (49,561)
Nonoperating Revenues (Expenses)
Federal Appropriations 28,222 28,416 21,455 14,858 14,277 Federal Pell Grants 62,311 57,951 48,281 31,649 27,232 Investment and Endowment Income (Losses), Net 30,855 266,633 172,833 (173,355) 45,629 Private Gifts 90,346 52,564 48,695 52,552 51,680 Interest Expense (53,923) (49,507) (46,103) (31,432) (43,055)
Other Nonoperating Revenues (Expenses) (10,214) (3,279) (1,659) (3,930) (4,750)
Net Nonoperating Revenues (Expenses) 147,597 352,778 243,502 (109,658) 91,013 Income (Loss) before Capital Contributions, Additions to Permanent Endowments, Extraordinary and Special Items (11,152) 285,623 263,833 (133,468) 41,452 State Capital Appropriations 937 8,043 14,205 17,817 15,532 Capital Gifts and Grants 11,788 15,466 19,381 13,009 17,341 Private Gifts for Endowment Purposes 24,484 26,376 24,703 21,093 32,995 Extraordinary Item:
Net Proceeds from Sale of Missouri Care - - - 2,550 Special Item 42,316 - - - -
Increase (Decrease) in Net Assets 68,373 335,508 322,122 (78,999) 107,320 Net Assets, Beginning of Year 4,016,244 3,680,736 3,364,777 3,430,442 3,303,206 Cumulative Effect of Change in Accounting Principles - (6,163) 13,334 19,916 Net Assets, Beginning of Year, as Adjusted 4,016,244 3,680,736 3,358,614 3,443,776 3,323,122 Net Assets, End of Year $ 4,084,617 $ 4,016,244 $ 3,680,736 $ 3,364,777 $ 3,430,442 2012 FinanciaL Report 73
Supplementary Information - Unaudited - See Accompanying Independent Auditors' Report Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Operating Revenues Tuition and Fees, Net 9.6% 6.5% 4.8% 8.0% 3.6%
Less: Scholarship Allowances 8.5% 7.1% 10.5% 6.2% 2.5%
Net Tuition and Fees 10.0% 6.3% 2.9% 8.6% 4.0%
Federal Grants and Contracts -5.7% 6.7% 6.5% -6.4% 12.8%
State and Local Grants and Contracts -2.7% -13.3% 24.8% -2.5% 15.7%
Private Grants and Contracts 6.0% -1.5% -4.2% 17.8% 11.1%
Sales and Services of Educational Activities 6.6% -3.9% 2.1% 12.9% -12.4%
Auxiliary Enterprises -
Patient Medical Services, Net 7.0% 3.1% 4.9% 3.1% 5.0%
Housing and Dining Services, Net 6.3% 4.4% 9.5% 13.0% 8.5%
Bookstores -1.7% -1.2% -4.5% 1.1% 7.9%
Other Auxiliary Enterprises, Net -9.2% 10.8% 4.4% 4.6% 18.0%
Other Operating Revenues -0.9% 13.3% -8.3% 14.3% -12.2%
Total Operating Revenues 3.9% 4.4% 4.2% 4.6% 6.7%
Operating Expenses Salaries and Wages 3.6% 2.9% 1.9% 5.2% 4.7%
Benefits 9.5% 8.3% 1.2% -3.5% 13.7%
Supplies, Services and Other Operating Expenses 6.5% 5.9% 0.5% 1.6% 8.9%
Scholarships and Fellowships 2.7% 6.0% 14.5% 22.7% 2.3%
Depreciation 3.7% 5.7% 11.9% 4.1% 5.8%
Total Operating Expenses 5.2% 4.6% 2.2% 3.2% 7.1%
Operating Loss before State Appropriations -10.2% -5.6% 5.0% 1.7% -8.5%
State Appropriations -9.1% -12.2% 3.9% 3.7% 4.9%
Operating Income (Loss) after State Appropriations, Before Nonoperating Revenues (Expenses) -136.4% -430.3% 185.4% 52.0% -59.5%
Nonoperating Revenues (Expenses)
Federal Appropriations -0.7% 32.4% 44.4% 4.1% 1.2%
Federal Pell Grants 7.5% 20.0% 52.6% 16.2% 15.3%
Investment and Endowment Income (Losses), Net -88.4% 54.3% 199.7% -479.9% -77.5%
Private Gifts 71.9% 7.9% -7.3% 1.7% -3.0%
Interest Expense 8.9% 7.4% 46.7% -27.0% 46.0%
Other Nonoperating Revenues (Expenses) -211.5% -97.6% 57.8% 17.3% -50.9%
Net Nonoperating Revenues (Expenses) -58.2% 44.9% 322.1% -220.5% -65.1%
Income (Loss) before Capital Contributions, Additions to Permanent Endowments and Extraordinary Item -103.9% 8.3% 297.7% -422.0% -82.0%
State Capital Appropriations -88.4% -43.4% -20.3% 14.7% -14.4%
Capital Gifts and Grants -23.8% -20.2% 49.0% -25.0% 34.0%
Private Gifts for Endowment Purposes -7.2% 6.8% 17.1% -36.1% 18.2%
Extraordinary Item:
Net Proceeds from Sale of Missouri Care - - -
Special Item Increase (Decrease) in Net Assets -79.6% 4.2% 507.8% -173.6% -65.2%
Net Assets, Beginning of Year 9.1% 9.4% -1.9% 3.9% 10.3%
Cumulative Effect of Change in Accounting Principles 0.0% -100.0% -146.2% -33.0% 100.0%
Net Assets, Beginning of Year, as Adjusted 9.1% 9.6% -2.5% 3.6% 11.0%
Net Assets, End of Year 1.7% 9.1% 9.4% -1.9% 3.9%
714 2012 FinanciaL Report
FINANCIA IN E Sttstcl Seto Supplementary Information - Unaudited - See Accompanying IndependentAuditors' Report Fiscal Year Ended June 30, 2012 2011 2010 2009 2008
+ Primary Reserve Ratio 0,66 0.67 0.62 0.50 0.54
/Conversion Factor 0.133 0.133 0.133 0.133 0.133
= Strength Factor 4.98 5.05 4.63 3.78 4.08 x Weighting Factor 35% 35% 35% 35% 35%
= Ratio Subtotal 1.74 1.77 1.62 1.32 1.43 Primary Reserve Ratio - measures thefinancial strength of the institutionby indicating how long the institution couldfunction L expendable reserves to cover operationsshould additionalnet assets not be available. A positive ratio and an increasing amoun denotes strength.
+ Return on Assets Ratio 1.7% 8.7% 9.2% -2.3% 3.2%
/ Conversion Factor 0.020 0.020 0.020 0.020 0.020
= Strength Factor 0.84 4.36 4.58 (1.16) 1.59 x Weighting Factor 20% 20% 20% 20% 20%
= Ratio Subtotal 0.17 0.87 0.92 (0.23) 0.32 Return on Assets Ratio - measures total economic return. While an increasing trend reflects strength, a decline may be appropr warranted if it represents a strategy on the part of the institution to fulfill its mission.
+ Net Operating Revenues Ratio 3.5% 5.1% 7.7% 6.0% 4.0%
/ Conversion Factor 0.013 0.013 0.013 0.013 0.013
= Strength Factor 2.68 3.96 5.89 4.60 3.10 x WeiRhtina Factor 10% 10% 10% 10% 10%
= Ratio Subtotal 0.27 0.40 0.59 0.46 0.31 Net OperatingRevenues Ratio - measures whether the institution is living within availableresources. A positive ratioand an in(
amount over time generally reflects strength.
+ Viability Ratio 1.25 1.22 1.27 1.38 1.42
/ Conversion Factor 0.417 0.417 0.417 0.417 0.417
= Strength Factor 3.00 2.92 3.04 3.30 3.39 x Weighting Factor 35% 35% 35% 35% 35%
= Ratio Subtotal 1.05 1.02 1.06 1.16 1.19 Viability Ratio - mneosures the ability of the institution to cover its debt as of the balance sheet date, should the institutionneed positive ratio greaterthan 1.00 generally denotes strength.
Composite Financial Index 3.23 4.06 4.19 2.71 3.24 Composite Financial Index -
Three Year Average 3.82 3.65 3.38 3.41 3.77 Composite FinancialIndex (CFI) - provides a methodology for a single overall financialmeasurement of the institution'shealth b four core ratios. The CFI uses a reasonable weighting plan and allows for a weakness or strength in a specific ratio to be offset b ratio result, which provides a more balancedmeasure. The CFI provides a more holistic approach to understandingthe financial institution. The CFI scores are not intended to be precise measures; they are indicators of ranges of financialhealth that can be overall institutionalwell-being when combined with non-financialindicators.
2012 FinanciaL Report 75
MA KE RA IS Sttsial eto Supplementary Information - Unaudited- See Accompanying Independent Auditors' Report Net Tuition per Student Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Gross Tuition and Fees $ 736,074 $ 671,419 $ 630,498 $ 601,742 $ 557,085 Less: Scholarship Discounts / Allowances (190,798) (175,917) (164,187) (148,578) (139,880)
Less: Scholarship / Fellowship Expenses (60,380) (58,790) (55,469) (48,456) (39,485)
Net Tuition $ 484,896 $ 436,712 $ 410,842 $ 404,708 $ 377,720 Net Tuition $ 484,896 $ 436,712 $ 410,842 $ 404,708 $ 377,720 Number of Students - Fall Semester (FTEs) 56,843 55,272 53,292 51,025 48,994 Net Tuition per Student $ 8,530 $ 7,901 $ 7,709 $ 7,932 $ 7,710 State Appropriations per Student Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 State Appropriations $ 397,629 $ 437,631 $ 498,358 $ 479,478 $ 462,281 Number of Students - Fall Semester (FTEs) 56,843 55,272 53,292 51,025 48,994 State Appropriations per Student $ 6,995 $ 7,918 $ 9,351 $ 9,397 $ 9,435 Educational Expenses per Student Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Total Operating Expenses $ 2,661,939 $ 2,530,503 $ 2,418,849 $ 2,365,757 $ 2,291,863 Less: Scholarships / Fellowships Expense (60,380) (58,790) (55,469) (48,456) (39,485)
Less: Auxiliary Operating Expenses (1,067,820) (1,028,491) (956,455) (901,089) (886,774)
Less: Grants and Contracts Expenses (311,742) (320,522) (318,123) (296,745) (299,148)
Interest Expense 53,923 49,507 46,103 31,432 43,055 Less: Auxiliary Interest Expense (8,427) (9,006) (9,197) (7,437) (7,905)
Net Educational Expenses $ 1,267,493 $ 1,163,201 $ 1,125,708 $ 1,143,462 $ 1,101,606 Net Educational Expenses $ 1,267,493 $ 1,163,201 $ 1,125,708 $ 1,143,462 $ 1,101,606 Number of Students - Fall Semester (FTEs) 56,843 55,272 53,292 51,025 48,994 Educational Expenses per Student $ 22,298 $ 21,045 $ 21,123 $ 22,410 $ 22,485 Total Tuition Discount Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Scholarship Allowances $ 190,798 $ 175,917 $ 164,187 $ 148,578 $ 139,880 Scholarships / Fellowships Expense 60,380 58,790 55,469 48,456 39,485 Total Tuition Discounts ($) $ 251,178 $ 234,707 $ 219,656 $ 197,034 $ 179,365 Total Tuition Discounts ($) $ 251,178 $ 234,707 $ 219,656 $ 197,034 $ 179,365 Gross Tuition and Fees $ 736,074 $ 671,419 $ 630,498 $ 601,742 $ 557,085 Total Tuition Discount (%) 34.1% 35.0% 34.8% 32.7% 32.2%
76 2012 Financial Report
CA IA RA IS Sttitia. Seto Supplementary Information - Unaudited- See Accompanying IndependentAuditors' Report Unrestricted Financial Resources to Direct Debt Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Current Portion of Long-Term Debt $ 183,226 $ 29,107 $ 30,139 $ 24,922 $ 21,697 Long-Term Debt Subject to Remarketing 100,330 220,885 223,680 224,925 226,120 Long-Term Debt 1,122,312 1,140,934 915,906 608,114 631,742 Total Direct Debt $ 1,405,868 $ 1,390,926 $ 1,169,725 $ 857,961 $ 879,559 Net Assets - Unrestricted $ 1,379,215 $ 1,350,930 $ 1,163,916 $ 868,199 $ 904,856 Total Direct Debt $ 1,405,868 $ 1,390,926 $ 1,169,725 $ 857,961 $ 879,559 Unrestricted Financial Resources to Direct Debt 0.98 0.97 1.00 1.01 1.03 Expendable Financial Resources to Direct Debt (Viability Ratio)
Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Net Assets - Unrestricted $ 1,379,215 $ 1,350,930 $ 1,163,916 $ 868,199 $ 904,856 Net Assets - Restricted Expendable - Scholarships, Research, Instruction and Other 299,789 264,605 244,226 235,405 262,266 Net Assets - Restricted Expendable - Loans 79,091 77,300 75,637 78,357 77,656 Expendable Net Assets $ 1,758,095 $ 1,692,835 $ 1,483,779 $ 1,181,961 $ 1,244,778 Expendable Net Assets $ 1,758,095 $ 1,692,835 $ 1,483,779 $ 1,181,961 $ 1,244,778 Total Direct Debt $ 1,405,868 $ 1,390,926 $ 1,169,725 $ 857,961 $ 879,559 Viability Ratio 1.25 1.22 1.27 1.38 1.42 Total Financial Resources to Direct Debt Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Net Assets - Unrestricted $ 1,379,215 $ 1,350,930 $ 1,163,916 $ 868,199 $ 904,856 Net Assets - Restricted Expendable - Scholarships, Research, Instruction and Other 299,789 264,605 244,226 235,405 262,266 Net Assets - Restricted Expendable - Loans 79,091 77,300 75,637 78,357 77,656 Net Assets - Restricted Nonexpendable 771,146 788,876 679,494 612,119 718,314 Total Financial Resources $ 2,529,241 $ 2,481,711 $ 2,163,273 $ 1,794,080 $ 1,963,092 Total Financial Resources $ 2,529,241 $ 2,481,711 $ 2,163,273 $ 1,794,080 $ 1,963,092 Total Direct Debt $ 1,405,868 $ 1,390,926 $ 1,169,725 $ 857,961 $ 879,559 Total Financial Resources to Direct Debt 1.80 1.78 1.85 2.09 2.23 Direct Debt per Student Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Total Direct Debt $ 1,405,868 $ 1,390,926 $ 1,169,725 $ 857,961 $ 879,559 Number of Students - End of Fiscal Year (FTEs) 57,806 56,843 55,272 53,292 51,025 Direct Debt per Student $ 24,320 $ 24,470 $ 21,163 $ 16,099 $ 17,238 2012 FinanciaL Report 77
M CA IA RATIS Sttstcl Secio SupplementaryInformation - Unaudited- See Accompanying Independent Auditors' Report Actual Debt Service to Operations Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Debt Service - Principal $ 26,393 $ 29,010 $ 24,922 $ 21,987 $ 17,437 Debt Service - Interest 53,923 49,507 46,103 31,432 43,055 Total Debt Service $ 80,316 $ 78,517 $ 71,025 $ 53,419 $ 60,492 Operating Expenses $ 2,661,939 $ 2,530,503 $ 2,418,849 $ 2,365,757 $ 2,291,863 Less: Scholarships & Fellowships Expense (60,380) (58,790) (55,469) (48,456) (39,485)
Interest Expense 53,923 49,507 46,103 31,432 43,055 Adjusted Total Operating Expense $ 2,655,482 $ 2,521,220 $ 2,409,483 $ 2,348,733 $ 2,295,433 Total Debt Service $ 80,316 $ 78,517 $ 71,025 $ 53,419 $ 60,492 Adjusted Total Operating Expense $ 2,655,482 $ 2,521,220 $ 2,409,483 $ 2,348,733 $ 2,295,433 Actual Debt Service to Operations 3.0% 3.1% 2.9% 2.3% 2.6%
Capital Expense to Operations Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Depreciation Expense $ 160,915 $ 155,103 $ 146,753 $ 131,167 $ 125,996 Interest Expense 53,923 49,507 46,103 31,432 43,055 Total Capital Expense $ 214,838 $ 204,610 $ 192,856 $ 162,599 $ 169,051 Operating Expenses $ 2,661,939 $ 2,530,503 $ 2,418,849 $ 2,365,757 $ 2,291,863 Less: Scholarships & Fellowships Expense (60,380) (58,790) (55,469) (48,456) (39,485)
Interest Expense 53,923 49,507 46,103 31,432 43,055 Adjusted Total Operating Expense $ 2,655,482 $ 2,521,220 $ 2,409,483 $ 2,348,733 $ 2,295,433 Total Capital Expense $ 214,838 $ 204,610 $ 192,856 $ 162,599 $ 169,051 Adjusted Total Operating Expense $ 2,655,482 $ 2,521,220 $ 2,409,483 $ 2,348,733 $ 2,295,433 Capital Expense to Operations 8.1% 8.1% 8.0% 6.9% 7.4%
78 2012 FinanciaL Report
BALNC SH E RA IO Sttsialeto Supplementary Information - Unaudited - See Accompanying IndependentAuditors' Report Unrestricted Financial Resources to Operations Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Net Assets - Unrestricted $ 1,379,215 $ 1,350,930 $ 1,163,916 $ 868,199 $ 904,856 Operating Expenses $ 2,661,939 $ 2,530,503 $ 2,418,849 $ 2,365,757 $ 2,291,863 Less: Scholarships & Fellowships Expense (60,380) (58,790) (55,469) (48,456) (39,485)
Interest Expense 53,923 49,507 46,103 31,432 43,055 Adjusted Total Operating Expense $ 2,655,482 $ 2,521,220 $ 2,409,483 $ 2,348,733 $ 2,295,433 Net Assets - Unrestricted $ 1,379,215 $ 1,350,930 $ 1,163,916 $ 868,199 $ 904,856 Adjusted Total Operating Expense $ 2,655,482 $ 2,521,220 $ 2,409,483 $ 2,348,733 $ 2,295,433 Unrestricted Financial Resources to Operations 0.52 0.54 0.48 0.37 0.39 Expendable Financial Resources to Operations (PrimaryReserve Ratio)
Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Net Assets - Unrestricted $ 1,379,215 $ 1,350,930 $ 1,163,916 $ 868,199 $ 904,856 Net Assets - Restricted Expendable - Scholarships, Research, Instruction and Other 299,789 264,605 244,226 235,405 262,266 Net Assets - Restricted Expendable - Loans 79,091 77,300 75,637 78,357 77,656 Expendable Net Assets $ 1,758,095 $ 1,692,835 $ 1,483,779 $ 1,181,961 $ 1,244,778 Operating Expenses $ 2,661,939 $ 2,530,503 $ 2,418,849 $ 2,365,757 $ 2,291,863 Less: Scholarships & Fellowships Expense (60,380) (58,790) (55,469) (48,456) (39,485)
Interest Expense 53,923 49,507 46,103 31,432 43,055 Adjusted Total Operating Expense $ 2,655,482 $ 2,521,220 $ 2,409,483 $ 2,348,733 $ 2,295,433 Expendable Net Assets $ 1,758,095 $ 1,692,835 $ 1,483,779 $ 1,181,961 $ 1,244,778 Adjusted Total Operating Expense $ 2,655,482 $ 2,521,220 $ 2,409,483 $ 2,348,733 $ 2,295,433 Primary Reserve Ratio 0.66 0.67 0.62 0.50 0.54 Total Financial Resources per Student Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Net Assets - Unrestricted $ 1,379,215 $ 1,350,930 $ 1,163,916 $ 868,199 $ 904,856 Net Assets - Restricted Expendable - Scholarships, Research, Instruction and Other 299,789 264,605 244,226 235,405 262,266 Net Assets - Restricted Expendable - Loans 79,091 77,300 75,637 78,357 77,656 Net Assets - Restricted Nonexpendable 771,146 788,876 679,494 612,119 718,314 Total Financial Resources $ 2,529,241 $ 2,481,711 $ 2,163,273 $ 1,794,080 $ 1,963,092 Total Financial Resources $ 2,529,241 $ 2,481,711 $ 2,163,273 $ 1,794,080 $ 1,963,092 Number of Students - End of Fiscal Year (FTE) 57,806 56,843 55,272 53,292 51,025 Total Financial Resources per Student $ 43,754 $ 43,659 $ 39,139 $ 33,665 $ 38,473 2012 Financial Report 79
OPER TIN RATIS Sttitia. Seto Supplementary Information - Unaudited- See Accompanying Independent Auditors' Report Annual Operating Margin (Net OperatingRevenues Ratio)
Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Operating Inc (Loss) After State Appropriations $ (158,749) $ (67,155) $ 20,331 $ (23,810) $ (49,561)
Federal Appropriations 28,222 28,416 21,455 14,858 14,277 Federal Pell Grants 62,311 57,951 48,281 31,649 27,232 Normalized Investment Income 127,497 114,592 107,236 105,498 95,963 Private Gifts 90,346 52,564 48,695 52,552 51,680 Interest Expense (53,923) (49,507) (46,103) (31,432) (43,055)
Net Operating Surplus (Deficit) $ 95,704 $ 136,861 $ 199,895 $ 149,315 $ 96,536 Total Operating Revenues $ 2,105,561 $ 2,025,717 $ 1,940,822 $ 1,862,469 $ 1,780,021 Less: Scholarship & Fellowships Expense (60,380) (58,790) (55,469) (48,456) (39,485)
State Appropriations 397,629 437,631 498,358 479,478 462,281 Federal Appropriations 28,222 28,416 21,455 14,858 14,277 Federal Pell Grants 62,311 57,951 48,281 31,649 27,232 Normalized Investment Income (a) 127,497 114,592 107,236 105,498 95,963 Private Gifts 90,346 52,564 48,695 52,552 51,680 Total Operating Revenues $ 2,751,186 $ 2,658,081 $ 2,609,378 $ 2,498,048 $ 2,391,969 (a) Normalizedinvestment income is equal to 5% of the rollingaveroge balance of totalcash and investments over the previous three fiscal years.
Net Operating Surplus (Deficit) $ 95,704 $ 136,861 $ 199,895 $ 149,315 $ 96,536 Total Operating Revenues $ 2,751,186 $ 2,658,081 $ 2,609,378 $ 2,498,048 $ 2,391,969 Net Operating Revenues Ratio 3.5% 5.1% 7.7% 6.0% 4.0%
Debt Service Coverage Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Total Debt Service $ 80,316 $ 78,517 $ 71,025 $ 53,419 $ 60,492 Net Operating Surplus (Deficit) $ 95,704 $ 136,861 $ 199,895 $ 149,315 $ 96,536 Add Back: Interest Expense 53,923 49,507 46,103 31,432 43,055 Add Back: Depreciation Expense 160,915 155,103 146,753 131,167 125,996 Adjusted Net Operating Surplus (Deficit) $ 310,542 $ 341,471 $ 392,751 $ 311,914 $ 265,587 Adjusted Net Operating Surplus (Deficit) $ 310,542 $ 341,471 $ 392,751 $ 311,914 $ 265,587 Total Debt Service $ 80,316 $ 78,517 $ 71,025 $ 53,419 $ 60,492 Debt Service Coverage 3.87 4.35 5.53 5.84 4.39 Return on Net Assets Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Change in Net Assets $ 68,373 $ 335,508 $ 322,122 $ (78,999) $ 107,320 Average Net Assets $ 4,050,431 $ 3,848,490 $ 3,519,675 $ 3,404,277 $ 3,376,782 Return on Net Assets Ratio 1.7% 8.7% 9.2% -2.3% 3.2%
80 2012 Financial Report
Supplementary Information - Unaudited - See Accompanying Independent Auditors' Report Contribution Ratios Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 State Appropriations $ 397,629 $ 437,631 $ 498,358 $ 479,478 $ 462,281 Tuition and Fees, Net of Scholarship Allow/Exp 484,896 436,712 410,842 404,708 377,720 Auxiliary Enterprises 357,101 372,477 347,779 334,367 315,819 Grants and Contracts 311,742 320,522 318,123 296,745 299,148 Federal Pell Grants 62,311 57,951 48,281 31,649 27,232 Gifts 90,346 52,564 48,695 52,552 51,680 Normalized Investment Income (a) 127,497 114,592 107,236 105,498 95,963 Patient Care 813,024 759,734 736,799 702,424 681,312 Other 106,640 105,898 93,265 90,627 80,814 Total $ 2,751,186 $ 2,658,081 $ 2,609,378 $ 2,498,048 $ 2,391,969 State Appropriations 14.5% 16.5% 19.1% 19.2% 19.3%
Tuition and Fees, Net of Scholarship Allow/Exp 17.6% 16.4% 15.7% 16.2% 15.8%
Auxiliary Enterprises 13.0% 14.0% 13.3% 13.4% 13.2%
Grants and Contracts 11.3% 12.1% 12.2% 11.9% 12.5%
Federal Pell Grants 2.3% 2.2% 1.9% 1.3% 1.1%
Gifts 3.3% 2.0% 1.9% 2.1% 2.2%
Normalized Investment Income (a) 4.6% 4.3% 4.1% 4.2% 4.0%
Patient Care 29.6% 28.6% 28.2% 28.1% 28.5%
Other 3.9% 4.0% 3.6% 3.6% 3.4%
Total 100.0% 100.0% 100.0% 100.0% 100.0%
(a) Normalized investment income is equal to 5% of the rolling average balance of total cash and investments over the previous three fiscal years.
Operating Expenses by Functional Classifications Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Instruction $ 604,695 $ 557,081 $ 537,813 $ 544,025 $ 513,970 Research 210,418 219,903 214,540 214,491 206,803 Public Service 147,308 143,546 146,719 173,627 163,203 Academic Support 133,742 127,856 124,119 108,626 120,071 Student Services 75,207 69,992 70,671 69,234 69,669 Institutional Support 102,565 97,934 109,493 104,198 116,672 Operation and Maintenance of Plant 97,114 69,982 55,878 70,002 47,796 Auxiliary Enterprises 1,069,595 1,030,316 957,394 901,931 888,198 Scholarships and Fellowships 60,380 58,790 55,469 48,456 39,485 Depreciation 160,915 155,103 146,753 131,167 125,996 Total Operating Expenses $ 2,661,939 $ 2,530,503 $ 2,418,849 $ 2,365,757 $ 2,291,863 Instruction 22.7% 22.0% 22.2% 23.0% 22.4%
Research 7.9% 8.7% 8.9% 9.1% 9.0%
Public Service 5.5% 5.7% 6.1% 7.3% 7.1%
Academic Support 5.0% 5.1% 5.1% 4.6% 5.2%
Student Services 2.8% 2.8% 2.9% 2.9% 3.0%
Institutional Support 3.9% 3.9% 4.5% 4.4% 5.1%
Operation and Maintenance of Plant 3.6% 2.8% 2.3% 3.0% 2.1%
Auxiliary Enterprises 40.2% 40.7% 39.6% 38.1% 38.8%
Scholarships and Fellowships 2.3% 2.3% 2.3% 2.0% 1.7%
Depreciation 6.0% 6.1% 6.1% 5.5% 5.5%
Total Operating Expenses 100.0% 100.0% 100.0% 100.0% 100.0%
2012 FinanciaL Report 81
!SUD N IN O M TO - CO SOIA E Stti.a Sectio Supplementary Information - Unaudited- See Accompanying Independent Auditors' Report Enrollment Fall Semester 2011 2010 2009 2008 2007 Undergraduate Students (Head Count) 54,936 53,358 51,352 49,510 47,864 Graduate Students (Head Count) 15,562 15,232 15,080 14,336 13,846 Professional Students (Head Count) 3,067 3,006 2,952 2,873 2,830 Total Students (Head Count) 73,565 71,596 69,384 66,719 64,540 Undergraduate Students (FTE) 44,940 43,737 41,974 40,294 38,642 Graduate Students (FTE) 8,877 8,571 8,401 7,890 7,553 Professional Students (FTE) 3,026 2,964 2,917 2,841 2,799 Total Students (FTE) 56,843 55,272 53,292 51,025 48,994 Acceptance Rate - First-time Freshmen 79% 80% 80% 81% 80%
Acceptance Rate - Undergraduate Transfers 73% 73% 72% 72% 70%
Matriculation - First-time Freshmen 41% 42% 41% 46% 47%
Matriculation - Undergraduate Transfers 66% 67% 68% 68% 64%
Demographics Fall Semester 2011 2010 2009 2008 2007 Male 47% 47% 47% 46% 47%
Female 53% 53% 53% 54% 53%
Undergraduate Residence - Missouri 82% 83% 84% 84% 85%
Undergraduate Residence - Out of State 18% 17% 16% 16% 15%
Undergraduate Full-Time 77% 77% 77% 76% 76%
Undergraduate Part-Time 23% 23% 23% 24% 24%
Graduate Full-Time 45% 45% 40% 38% 39%
Graduate Part-Time 55% 55% 60% 62% 61%
White 75.4% 76.5% 77.1% 78.2% 78.6%
Black or African American 10.0% 9.8% 9.9% 9.3% 9.3%
Non-Resident Alien 6.4% 6.2% 6.1% 6.0% 5.6%
Asian / Pacific Is. 3.6% 3.5% 3.5% 3.4% 3.6%
Hispanic 3.0% 2.8% 2.6% 2.5% 2.3%
Other 1.6% 1.2% 0.8% 0.6% 0.6%
Degrees Awarded Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Baccalaureate 10,319 9,703 9,605 9,291 8,997 Graduate Certificate 623 539 520 438 321 Master's 4,069 3,870 3,608 3,620 3,432 Educational Specialist 104 100 123 148 102 Doctoral 610 557 519 487 510 First Professional Degree 790 818 800 763 749 Total 16,515 15,587 15,175 14,747 14,111 82 2012 FinanciaL Report
ST D N INF RMA IO COUM I - Sttsia eto Supplementary Information - Unaudited - See Accompanying Independent Auditors' Report Enrollment Fall Semester 2011 2010 2009 2008 2007 Undergraduate Students (Head Count) 25,992 24,834 23,799 22,980 21,586 Graduate Students (Head Count) 6,534 6,310 6,288 6,024 5,708 Professional Students (Head Count) 1,236 1,197 1,150 1,126 1,111 Total Students (Head Count) 33,762 32,341 31,237 30,130 28,405 Undergraduate Students (FTE) 23,840 22,899 21,943 21,197 19,847 Graduate Students (FTE) 3,966 3,765 3,721 3,536 3,340 Professional Students (FTE) 1,215 1,174 1,134 1,108 1,094 Total Students (FTE) 29,021 27,838 26,798 25,841 24,281 Acceptance Rate - First-time Freshmen 82% 83% 83% 85% 85%
Acceptance Rate - Undergraduate Transfers 67% 67% 69% 71% 67%
Matriculation - First-time Freshmen 41% 42% 41% 47% 48%
Matriculation - Undergraduate Transfers 62% 66% 66% 68% 71%
Demographics Fall Semester 2011 2010 2009 2008 2007 Male 47% 47% 46% 46% 46%
Female 53% 53% 54% 54% 54%
Undergraduate Residence - Missouri 79% 81% 83% 84% 85%
Undergraduate Residence - Out of State 21% 19% 17% 16% 15%
Undergraduate Full-Time 94% 94% 94% 94% 94%
Undergraduate Part-Time 6% 6% 6% 6% 6%
Graduate Full-Time 58% 58% 48% 46% 48%
Graduate Part-Time 42% 42% 52% 54% 52%
White 80.3% 81.8% 82.9% 83.6% 83.8%
Black or African American 6.9% 6.6% 6.4% 5.9% 5.8%
Non-Resident Alien 5.9% 5.4% 5.4% 5.4% 5.3%
Asian / Pacific Is. 2.4% 2.4% 2.5% 2.5% 2.7%
Hispanic 2.7% 2.5% 2.2% 2.0% 1.8%
Other 1.8% 1.3% 0.6% 0.6% 0.6%
Degrees Awarded Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Baccalaureate 5,528 5,087 4,963 4,855 4,779 Graduate Certificate 179 162 142 88 69 Master's 1,631 1,513 1,515 1,506 1,421 Educational Specialist 43 53 59 57 34 Doctoral 367 365 322 306 326 First Professional Degree 299 306 304 307 303 Total 8,047 7,486 7,305 7,119 6,932 2012 FinanciaL Report 83
Supplementary Information - Unaudited - See Accompanying Independent Auditors' Report Enrollment Fall Semester 2011 2010 2009 2008 2007 Undergraduate Students (Head Count) 10,122 9,850 9,381 9,261 9,094 Graduate Students (Head Count) 3,692 3,771 3,795 3,651 3,800 Professional Students (Head Count) 1,659 1,638 1,623 1,569 1,548 Total Students (Head Count) 15,473 15,259 14,799 14,481 14,442 Undergraduate Students (FTE) 7,586 7,395 6,972 6,662 6,400 Graduate Students (FTE) 2,032 2,030 2,021 1,936 1,909 Professional Students (FTE) 1,638 1,618 1,604 1,555 1,535 Total Students (FTE) 11,256 11,043 10,597 10,153 9,844 Acceptance Rate - First-time Freshmen 71% 71% 72% 73% 66%
Acceptance Rate - Undergraduate Transfers 80% 72% 70% 66% 61%
Matriculation - First-time Freshmen 39% 39% 40% 42% 44%
Matriculation - Undergraduate Transfers 64% 65% 68% 67% 67%
Demographics Fall Semester 2011 2010 2009 2008 2007 Male 43% 43% 43% 43% 42%
Female 57% 57% 57% 57% 58%
Undergraduate Residence - Missouri 74% 75% 75% 77% 78%
Undergraduate Residence - Out of State 26% 25% 25% 23% 22%
Undergraduate Full-Time 68% 68% 67% 63% 61%
Undergraduate Part-Time 32% 32% 33% 37% 39%
Graduate Full-Time 34% 33% 33% 33% 30%
Graduate Part-Time 66% 67% 67% 67% 70%
White 67.9% 67.7% 67.6% 68.9% 71.1%
Black or African American 12.6% 12.6% 12.7% 12.5% 12.0%
Non-Resident Alien 6.5% 7.1% 7.4% 7.3% 6.3%
Asian / Pacific Is. 6.5% 6.4% 6.5% 6.2% 6.2%
Hispanic 4.7% 4.7% 4.3% 4.4% 3.8%
Other 1.8% 1.5% 1.4% 0.7% 0.7%
Degrees Awarded Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Baccalaureate 1,749 1,523 1,633 1,496 1,289 Graduate Certificate 29 24 18 20 24 Master's 999 972 911 917 852 Educational Specialist 35 25 33 49 40 Doctoral 99 77 83 68 59 First Professional Degree 444 468 455 412 408 Total 3,355 3,089 3,133 2,962 2,672 84, 2012 FinanciaL Report
ST D N IN OR ATO - MIS UI Stts a-& Seto Supplementary Information - Unaudited- See Accompanying Independent Auditors' Report Enrollment Fall Semester 2011 2010 2009 2008 2007 Undergraduate Students (Head Count) 5,671 5,503 5,206 4,911 4,752 Graduate Students (Head Count) 1,850 1,702 1,608 1,456 1,414 Professional Students (Head Count) - - - -
Total Students (Head Count) 7,521 7,205 6,814 6,367 6,166 Undergraduate Students (FTE) 5,236 5,127 4,886 4,622 4,483 Graduate Students (FTE) 1,141 1,036 979 831 840 Professional Students (FTE) - - - - -
Total Students (FTE) 6,377 6,163 5,865 5,453 5,323 Acceptance Rate - First-time Freshmen 88% 87% 89% 88% 90%
Acceptance Rate - Undergraduate Transfers 67% 67% 74% 74% 76%
Matriculation - First-time Freshmen 44% 47% 47% 49% 49%
Matriculation - Undergraduate Transfers 72% 80% 71% 67% 73%
Note: Rolla's pre-applicationadvising process encouragesunqualified students to apply elsewhere, thereby producing misleadil acceptanceratefigures.
Demographics Fall Semester 2011 2010 2009 2008 2007 Male 78% 78% 78% 78% 77%
Female 22% 22% 22% 22% 23%
Undergraduate Residence - Missouri 79% 80% 81% 81% 81%
Undergraduate Residence - Out of State 21% 20% 19% 19% 19%
Undergraduate Full-Time 91% 91% 92% 93% 92%
Undergraduate Part-Time 9% 9% 8% 7% 8%
Graduate Full-Time 59% 59% 59% 52% 54%
Graduate Part-Time 41% 41% 41% 48% 46%
White 74.6% 75.7% 76.4% 78.3% 78.7%
Black or African American 4.9% 4.6% 5.4% 4.9% 4.6%
Non-Resident Alien 14.4% 13.9% 12.6% 11.0% 10.4%
Asian / Pacific Is. 2.4% 2.5% 2.7% 3.1% 3.3%
Hispanic 2.5% 2.4% 2.3% 2.2% 2.3%
Other 1.2% 0.9% 0.6% 0.5% 0.7%
Degrees Awarded Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Baccalaureate 1,079 1,001 998 922 913 Graduate Certificate 319 282 278 250 164 Master's 567 517 411 426 430 Educational Specialist Doctoral 70 65 51 50 63 First Professional Degree - - - - -
Total 2,035 1,865 1,738 1,648 1,570 2012 FinanciaL Report 85
ST D N IN O M TO -S .LUS Sttsia Scio Supplementary Information - Unaudited- See Accompanying Independent Auditors' Report Enrollment Fall Semester 2011 2010 2009 2008 2007 Undergraduate Students (Head Count) 13,151 13,171 12,966 12,358 12,432 Graduate Students (Head Count) 3,486 3,449 3,389 3,205 2,924 Professional Students (Head Count) 172 171 179 178 171 Total Students (Head Count) 16,809 16,791 16,534 15,741 15,527 Undergraduate Students (FTE) 8,279 8,317 8,172 7,814 7,912 Graduate Students (FTE) 1,738 1,740 1,681 1,587 1,464 Professional Students (FTE) 172 171 179 178 171 Total Students (FTE) 10,189 10,228 10,032 9,579 9,547 Acceptance Rate - First-time Freshmen 54% 58% 60% 59% 62%
Acceptance Rate - Undergraduate Transfers 75% 78% 77% 79% 78%
Matriculation - First-time Freshmen 41% 37% 39% 38% 38%
Matriculation - Undergraduate Transfers 71% 66% 69% 69% 57%
Demographics Fall Semester 2011 2010 2009 2008 2007 Male 40% 39% 38% 35% 40%
Female 60% 61% 62% 65% 60%
Undergraduate Residence - Missouri 93% 93% 93% 93% 93%
Undergraduate Residence - Out of State 7% 7% 7% 7% 7%
Undergraduate Full-Time 46% 46% 46% 47% 48%
Undergraduate Part-Time 54% 54% 54% 53% 52%
Graduate Full-Time 26% 28% 23% 23% 26%
Graduate Part-Time 74% 72% 77% 77% 74%
White 72.3% 73.7% 74.2% 75.4% 75.1%
Black or African American 16.7% 16.4% 16.6% 15.6% 15.8%
Non-Resident Alien 3.8% 3.7% 3.6% 3.9% 3.7%
Asian / Pacific Is. 3.9% 3.2% 3.2% 3.0% 3.3%
Hispanic 2.3% 2.1% 1.9% 1.7% 1.8%
Other 1.0% 0.9% 0.5% 0.4% 0.3%
Degrees Awarded Fiscal Year Ended June 30, 2012 2011 2010 2009 2008 Baccalaureate 1,963 2,092 2,011 2,018 2,016 Graduate Certificate 96 71 82 80 64 Master's 872 868 771 771 729 Educational Specialist 26 22 31 42 28 Doctoral 74 50 63 63 62 First Professional Degree 47 44 41 44 38 Total 3,078 3,147 2,999 3,018 2,937 86 2012 FinanciaL Report
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University of Missouri System COLUMBIA I KANSAS CITY I ROLLA I ST.LOUIS Office of Finance and Administration University of Missouri System 215 University Hall Columbia, MO 65211 www.umsystem.edu Advancing Missourli