The University of Texas at San Antonio

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The University of Texas at San Antonio

• FY 07 Annual Financial Report
• Highlights
• January, 2008

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Annual Financial Report Highlights

• The Annual Financial Report (AFR) is made up of
  three primary
• statements with many supporting schedules.
• 1. Balance Sheet Explains what we own, our
  obligations and what is available.
• 2. Statement of Revenues, Expenses and Changes
  in Net Assets (SRECNA) Shows the results of
  operations for the year.
• 3. Statement of Cash Flows Shows what revenue
  came in, what was expended and what is left.
• Review pie charts and ratios that help explain
  our financial condition

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UTSA FY 07Balance Sheet

• The Balance Sheet has three sections
• Assets What we own - Items that are available
  to meet operating costs of the Institution, plus
  buildings, land, equipment, etc.
• Investments increased by 53.5M due to additions,
  investment income and appreciation.
• Capital Assets increased by 106.2M predominantly
  due to the construction of Rec Center II, Laurel
  Village, BSE II, Thermal Energy Plant and
  University Center III.
• Liabilities Our obligations -Amounts due and
  payable within one year or beyond.
• Net Assets Whats available - Capital Assets
  net of depreciation, endowment funds and other
  unrestricted funds.
• Amount invested in Capital Assets increased
  predominately by 106.2M due to construction.
• Unrestricted Net Assets grew by 27.0M due to
  increase in Tuition Fees.

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The Statement of Revenue, Expenses, and Changes
in Net Assets (SRECNA) . This statement is
called the Operating Statement as it reports
the results of operations for the year.
2007
2006
UTSA Operating Revenues ( in millions)
2007
2006
UTSA Operating Revenues ( in millions)
143.5
118.7
Student Tuition and Fees
-
Net of Discounts
143.57
118.7
Student Tuition and Fees
-
Net of Discounts
72.8
Sponsored Programs
72.8
73.2
Sponsored Programs
73.2
Sales and Services of Educational Activities
6.7
6.0
Sales and Services of Educational Activities
6.7
6.0
Auxiliary Enterprises
15.1
14.2
Auxiliary Enterprises
14.2
15.1
Other
2.5
3.2
Other
3.2
2.5

• Tuition and Fees increased by 24.8M.
• Operating loss is calculated before state
  appropriations. Tuition and fees increased more
  than operating expenses causing a slight change.
• The increase is predominantly due to a 8.3M
  increase in FV of investments and increase in net
  investment income of 4.8M.
• Mandatory Transfers represent amounts transferred
  to System Admin to pay debt service, and
  nonmandatory transfers represent anticipated bond
  proceeds transferred to UTSA to fund construction
  projects.
• As on the previous exhibit, Change in Net Assets
  was 126.2M. In the current year operations,
  this is most dramatically impacted by the
  transfers from system of bond proceeds for
  capital improvement projects.

Total Operating Revenues
240.6
215.3
Total Operating Revenues
215.3
240.6
315.6
Total Operating Expenses
315.6
293.8
Total Operating Expenses
293.8
Operating Loss
(75.0)
Operating Loss
(75.0)
(78.5)
Nonoperating
Revenues (Expenses)
Nonoperating
Revenues (Expenses)
98.1
97.1
State Appropriations
98.1
97.1
State Appropriations
3.8
3.5
Gift Contributions
3.8
3.5
Gift Contributions
10.8
6.0
Net Investment Income (Loss)
10.9
6.1
Net Investment Income (Loss)
12.4
4.1
Net Inc. (Dec.) in Fair Value of Investments
12.4
4.1
Net Inc. (Dec.) in Fair Value of Investments
Gain/(Loss) on State of Capital Assets
(0.1)
Income (Loss) Before Other Revenues, Expenses,
Gains
50.1
32.2
Other
Nonoperating
Revenues/Expenses
0.0
0.0
or Losses
Income (Loss) Before Other Revenues, Expenses,
Gains
Gifts and Sponsored Programs
0.0
0.6
or Losses
50.1
32.2
Additions to Permanent Endowments
4.0
4.9
Gifts and Sponsored Programs
0.0
0.6
Reclass
From (To) Other Institutions
(48.7)
19.8
Additions to Permanent Endowments
4.0
4.9
Mandatory Transfers
(19.7)
(16.6)
Reclass
From (To) Other Institutions
(48.7)
19.8
Mandatory Transfers
-
Comp Sys Admin
-
Debt Svc
(19.7)
(16.6)

Nonmandatory
Transfers
141.9
28.6
Nonmandatory
Transfers
-
Comp Sys Admin
141.9
28.6
Transfers From (To) Other State entities
(1.4)
(0.8)
Transfers From (To) Other State entities
(1.4)
Change in Net Assets
126.2
68.7
Change in Net Assets
126.2
68.7
Net Assets, Beginning of the Year
635.1
566.4
Net Assets, Beginning of the Year
635.1
566.4
761.3
635.1
Net Assets, End of the Year
761.3
635.1
Net Assets, End of the Year
4
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UTSA FY 07Statement of Cash Flows

• Cash from operations includes tuition and fees
  and expenditures for operations includes
  salaries, depreciation, scholarship/fellowship
  and supplies.
• Noncapital financing activities include State
  appropriations and Gifts.
• Capital and related financing activities include
  purchase of equipment and construction of
  buildings.
• Investing Activities include the purchase/sale of
  investments, interest income and endowment income
  distribution.
• Cash Cash Equivalents decreased slightly.

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UTSA FY 2007 Sources of Revenue by Category
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UTSA FY 07 Sources of Revenue
7
8
UTSA FY 07 Uses of Funds
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UTSA FY 07 Analysis of Financial
ConditionComposite Financial Index

• Composite Financial Index measures the overall
  financial health by combining four core ratios
  into a single score primary reserve ratio,
  expendable resources to debt ratio, return on net
  assets ratio and the annual operating margin
  ratio.
• The CFI increased by .8 primarily due to
  increase in interest earnings and appreciation on
  investments, as well as higher net operating
  income.
• Systems benchmark is 3.0 or greater.

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UTSA FY 07 Analysis of Financial
ConditionOperating Expense Coverage Ratio

• Measures an institutions ability to cover future
  operating expenses with available year-end
  balances. Ratio is expressed in number of months
  coverage.
• Increase from 4.2 months to 5.0 months is due to
  increase in unrestricted net assets as a result
  of increases in Tuition Fees attributable to
  enrollment growth and rate increases.
• System Satisfactory rating is at two months or
  above and should be stable or improve.

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UTSA FY 07 Analysis of Financial ConditionDebt
Service Coverage Ratio

• This ratio measures the actual margin of
  protection provided to investors by annual
  operations. Calculation is used by Moodys
  Investment Services, system-wide to determine
  bond rating. This is watched very closely so UT
  System can maintain AAA bond rating.
• Trend helps to determine if an institution has
  assumed more debt than it can afford to service.
• Our trend is growing exceeding UT Systems
  benchmark of greater than 2.4. This means that
  our net resources are 3.1 times what we are
  currently expending for debt payments. The ratio
  increased slightly due to operating performance
  off-set by increased debt service.

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UTSA FY 07 Analysis of Financial
ConditionExpendable Resources to Debt Ratio

• This ratio measures an institutions ability to
  fund outstanding debt with existing net asset
  balances should an emergency occur.
• UTSAs debt ratio changed slightly due to a
  decrease in expendable net assets restricted for
  capital projects as a result of completion of
  capital improvement projects.
• This ratio basically shows that more and more of
  our resources are going towards paying off debt.
  Systems Satisfactory benchmark is 0.7x or
  greater.

Restated
Restated
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UTSA FY07 Analysis of Financial ConditionDebt
Burden Ratio

• This ratio examines the institutions dependence
  on borrowed funds and cost of borrowing relative
  to overall expenses.
• UTSAs debt burden ratio increased as a result of
  a major capital improvements program resulting in
  increased debt service payments. The institution
  is heavily reliant on debt to fund cost.
• Systems Satisfactory benchmark is less than
  4.3.

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UTSA FY 07 AFR Summary

• UTSA continues to receive a Satisfactory rating
  from UT System as a result of a healthy financial
  condition.
• UTSAs operating margin ratio of 8.4 is strong
  but not sustainable future expenditures are
  expected to exceed revenue growth as new
  positions are hired and needed infrastructure is
  purchased to meet growth demands. We will have to
  closely monitor our debt as we continue to
  require additional facilities.