Financial Statements
May 31, 2010 and 2009

Boston College
Index
May 31, 2010 and 2009
Page(s)
Report of Independent Auditors ............................................................................................................... 1
Financial Statements
Statement of Financial Position.................................................................................................................... 2
Statement of Activities .................................................................................................................................. 3
Statement of Cash Flows ............................................................................................................................. 4
Notes to Financial Statements ............................................................................................................... 5–17

PricewaterhouseCoopers LLP
125 High Street
Boston, MA 02110-1707
Telephone (617) 530 5000
Facsimile (617) 530 5001 www.pwc.com
Report of Independent Auditors
To the Trustees of
Boston College
In our opinion, the accompanying statement of financial position and the related statements of activities and cash flows present fairly, in all material respects, the financial position of Boston College at May
31, 2010, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of Boston College's management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year summarized comparative information has been derived from Boston College's 2009 financial statements, and in our report dated
September 14, 2009, we expressed an unqualified opinion on those financial statements. We conducted our audit of these statements in accordance with auditing standards generally accepted in the United States of America. 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 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, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
September 13, 2010
1

Boston College
Statement of Financial Position
As of May 31, 2010
(with summarized financial information as of May 31, 2009)
(in thousands of dollars)
Assets
Short-term investments
Accounts receivable, net (Note B)
Contributions receivable, net (Note C)
Notes and other receivables, net (Note B)
Investments (Note D)
Funds held by trustees (Note D)
Other assets
Property, plant and equipment, net (Note F)
Total assets
Liabilities
Accounts payable
Accrued liabilities
Deposits payable and deferred revenues
Bonds and mortgages payable (Note G)
U.S. Government loan advances
Total liabilities
Net Assets
Unrestricted (Note H)
Temporarily restricted (Note H)
Permanently restricted (Note H)
Total net assets
Total liabilities and net assets
2010 2009
$ 8,271
27,635
191,962
58,876
1,732,479
25,732
8,372
1,039,611
$ 3,092,938
$ 10,203
24,199
221,411
43,803
1,518,508
31,894
10,994
1,037,488
$ 2,898,500
$ 4,739
156,056
38,162
671,687
34,870
905,514
$ 5,390
126,780
42,202
679,436
34,461
888,269
1,165,688
336,926
684,810
2,187,424
$ 3,092,938
1,086,134
289,613
634,484
2,010,231
$ 2,898,500
The accompanying notes are an integral part of these financial statements.
2

Boston College
Statement of Activities
Year Ended May 31, 2010
(with summarized financial information for the year ended May 31, 2009)
(in thousands of dollars)
Unrestricted
Temporarily
Restricted
Permanently
Restricted
2010
Total
2009
Total
Operating
Revenues and other support
Tuition and fees before student aid
Auxiliary enterprises before student aid
Sponsored research and other programs
Government financial aid programs
Sales and services
Other revenues
Nonoperating assets utilized or released from
restrictions for operations
Total revenues and other support before student aid
Student aid applicable to tuition and fees
Student aid applicable to auxiliary enterprises
Net revenues
Expenses
Instruction
Academic support
Research
Student services
Public service
General administration
Auxiliary enterprises
Total expenses
Increase in net assets from operating activities
Nonoperating
Contributions
Realized and unrealized investment gains/(losses), net
Investment income, net
Other gains or (losses)
Debt extinguishment charges
Nonoperating assets utilized or released from restrictions
for operations
Net assets reclassified or released from restrictions
Increase/(decrease) in net assets from
nonoperating activities
Total increase/(decrease) in net assets
Net assets, beginning of year
Net assets, end of year
$ 474,257
136,806
55,549
5,269
4,465
9,998
68,266
754,610
(122,773)
(3,483)
628,354
233,914
54,523
36,162
44,728
2,433
112,549
143,938
628,247
107
5,903
86,484
4,650
(9,857)
(19,543)
11,810
79,447
79,554
1,086,134
$ 1,165,688
-
-
-
-
3,414
-
50,326
50,326
634,484
$ 684,810
-
-
-
-
$ 26,683
86,045
(192)
(1,276)
$ 44,281
4,912
54
(2,335)
(48,723)
(15,224)
47,313
47,313
289,613
$ 336,926
$ 474,257
136,806
55,549
5,269
4,465
9,998
68,266
754,610
(122,773)
(3,483)
628,354
233,914
54,523
36,162
44,728
2,433
112,549
143,938
628,247
107
76,867
177,441
4,512
(13,468)
-
(68,266)
-
177,086
177,193
2,010,231
$ 2,187,424
$ 455,096
145,232
50,297
5,046
4,835
9,669
67,331
737,506
(112,615)
(3,873)
621,018
226,601
54,294
33,986
43,745
2,241
111,657
148,392
620,916
102
150,817
(408,366)
4,871
1,593
(104)
(67,331)
-
(318,520)
(318,418)
2,328,649
$ 2,010,231
The accompanying notes are an integral part of these financial statements.
3

Boston College
Statement of Cash Flows
Year Ended May 31, 2010
(with summarized financial information for the year ended May 31, 2009)
(in thousands of dollars)
2010 2009
Cash flows from operating activities
Total increase/(decrease) in net assets
Adjustments to reconcile change in net assets to short-term
investments (used in) provided by operating activities
Depreciation, amortization and accretion
Net (gain) on retirement or disposal of fixed assets
Contributions of property and equipment
Loan cancellations
Contributed securities
Realized and unrealized investment (gains)/losses, net
Debt extinguishment charges
Change in assets and liabilities
Accounts receivable, net
Notes and other receivables
Contributions receivable, net
Accounts payable and accrued liabilities
Deposits payable and deferred revenue
Other assets
Contributions to be used for long-term investment
Net short-term investments (used in) provided by operating activities
Cash flows from investing activities
Proceeds from sales of investments
Purchases of investments
Student loans granted
Student loans collected
Purchases of property, plant and equipment
Change in funds held by trustees
Net short-term investments (used in) investing activities
Cash flows from financing activities
Net proceeds from issuance of debt and line of credit
Repayment of debt and line of credit
Payment of bonds and mortgages payable
Prepayment of debt
Change in U.S. Government loan advances
Contributions to be used for long-term investment
Net short-term investments provided by financing activities
Net change in short-term investments
Short-term investments, beginning of year
Short-term investments, end of year
Supplemental data
Interest paid
Asset retirement obligations recognized
Net fixed asset recognized related to asset retirement obligation
Contributed securities
$ 177,193 $ (318,418)
47,557
(3,703)
(1,093)
1,174
(7,849)
(177,441)
-
(3,436)
(14,479)
29,449
26,164
(4,040)
2,622
(77,272)
(5,154)
496,010
(524,691)
(4,005)
4,914
(45,871)
6,162
(67,481)
-
-
(6,978)
409
-
77,272
70,703
(1,932)
10,203
$ 8,271
132,053
(54,470)
(8,179)
(3,949)
245
42,030
107,730
1,164
9,039
$ 10,203
$ 31,209
184
381
7,849
46,413
(13,045)
(1,014)
1,057
(5,102)
408,366
104
1,809
-
(71,150)
4,081
(4,603)
72
(42,030)
6,540
623,839
(628,673)
(5,299)
4,341
(119,822)
12,508
(113,106)
$ 27,967
409
155
5,102
The accompanying notes are an integral part of these financial statements.
4

Boston College
Notes to Financial Statements
May 31, 2010 and 2009
A. Accounting Policies
The significant accounting policies followed by Boston College (the "University") are set forth below and in other sections of these notes.
Basis of Presentation
The accompanying financial statements have been prepared on the accrual basis with net assets, revenues, expenses, gains, and losses classified into three categories based on the existence or absence of externally imposed restrictions. The net assets of the University are classified and defined as follows:
Unrestricted
Net assets that are not subject to donor-imposed stipulations. Unrestricted net assets may be designated for specific purposes by action of the Board of Trustees.
Temporarily Restricted
Net assets where use is limited by law or donor-imposed stipulations that will either expire with the passage of time or be fulfilled or removed by actions of the University.
Permanently Restricted
Reflects the historical value of contributions (and in certain circumstances investment returns from those contributions), subject to donor-imposed stipulations, which require the corpus to be invested in perpetuity to produce income for general or specific purposes.
Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Realized and unrealized gains and losses on investments are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation or by law.
Nonoperating Activity
Nonoperating activity includes all contributions, investment income, gains and losses on investments, gains and losses on postretirement healthcare benefits, unfulfilled promises to give, gains on sale of property, debt extinguishment charges, and voluntary retirement incentive expenses. All other activity is classified as operating revenue or expense.
To the extent contributions, investment income, and gains are used for operations, they are reclassified as "nonoperating assets utilized or released from restrictions for operations."
Expirations of temporary restrictions on net assets or other clarifications from donors are presented as "net assets reclassified or released from restrictions.”
Contributions
Contributions, including unconditional promises to give, are recognized as unrestricted, temporarily restricted, or permanently restricted revenues in the year received. Contributions receivable are recorded at the present value of expected future cash flows, net of an allowance for estimated unfulfilled promises to give. Conditional promises to give are not recognized until the conditions on which they depend are substantially met. Contributions of noncash assets are recorded at fair market value.
5

Contributions and investment return with donor-imposed restrictions, which are reported as temporarily restricted revenues, are released to unrestricted net assets when an expense is incurred that satisfies the restriction.
Contributions restricted for the purchase of property, plant and equipment are reported as nonoperating temporarily restricted revenues and are released to unrestricted net assets upon acquisition of the assets or when the asset is placed into service.
Contributions received for which the designation is pending by the donor are classified as temporarily restricted net assets. Once a designation is made by the donor, the contributions are reclassified to the appropriate net asset category as part of "net assets reclassified or released from restrictions."
Sponsored Activities
Revenues associated with research and other contracts and grants are recognized when related costs are incurred. Facilities and administrative cost recovery on U.S. Government contracts and grants is based upon a predetermined negotiated rate and is recorded as unrestricted revenue.
Fundraising Activities
Expenses incurred in carrying out the fundraising activities of the University, which amounted to
$18,391,000 and $18,901,000 for the years ended May 31, 2010 and 2009, respectively, are included primarily in the general administration expense category on the statement of activities.
Investments
Short-term investments consist of cash and cash equivalents, operating funds deposited in cash management accounts, and other investments with maturities at the time of purchase of 90 days or less, and are carried at market value. Cash and cash equivalents held in the investment portfolio are excluded from short-term investments.
Investment transactions are recorded on the trade date, realized gains and losses are recorded using the weighted average basis, and dividend income is recorded on the ex-dividend date.
Split-Interest Agreements
The University has split-interest agreements consisting primarily of charitable gift annuities, pooled income funds, and charitable remainder trusts. Split-interest agreements which are included in investments amount to $20,472,000 and $17,336,000 as of May 31, 2010 and 2009, respectively.
Contributions are recognized at the date the trusts are established net of a liability for the present value of the estimated future cash outflows to beneficiaries. The present value of payments is discounted with rates that range from 2.4% to 10.6%. The liability of $9,537,000 and $8,044,000 as of May 31, 2010 and 2009, respectively, is adjusted during the term of the agreement for changes in actuarial assumptions.
Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
6

Boston College
Notes to Financial Statements
May 31, 2010 and 2009
Income Taxes
The University is a qualified tax-exempt organization under section 501(c)(3) of the Internal
Revenue Code.
Prior Year Summarized Information
The financial statements include certain prior year summarized comparative information, but do not include sufficient detail to constitute a presentation in conformity with GAAP. Accordingly, such information should be read in conjunction with the University's audited financial statements for the year ended May 31, 2009, from which the summarized information was derived.
Subsequent Events
Effective June 1, 2009, the University adopted a new accounting standard that provides guidance on the accounting and disclosure of events that occur after the statement of financial position date but before financial statements are issued or are available to be issued.
The University has assessed the impact of subsequent events through September 13, 2010, the date the audited financial statements were issued, and has concluded that there were no such events that require adjustment to the audited financial statements or disclosure in the notes to the audited financial statements.
B. Accounts, Notes and Other Receivables
Accounts receivable and notes receivable are stated net of allowances for doubtful accounts. As of
May 31, 2010 and 2009 the allowance related to accounts receivable is $2,287,000 and $901,000, respectively.
Notes and other receivables consist of amounts due from students under U.S. Government sponsored loan programs and from the Weston Jesuit Community, Inc. under a ground lease agreement. The notes receivable due from students under U.S. Government sponsored loan programs are subject to significant restrictions and, accordingly, it is not practicable to determine the fair value of such amounts. As of May 31, 2010 and 2009, the allowance related to student notes receivable is $650,000.
On July 1, 2009, the University entered into a ground lease agreement with the Weston Jesuit
Community, Inc. Under this agreement, the University has commenced construction of a community residence for members of the Society of Jesus. The estimated total cost of
$22,100,000 for this community residence will be repaid to the University over a 30 year period with interest of 5%, beginning immediately following the issuance of a certificate of occupancy. At
May 31, 2010 the total receivable outstanding for construction in progress is $17,154,000.
7

Boston College
Notes to Financial Statements
May 31, 2010 and 2009
C. Contributions Receivable
Contributions receivable are summarized as follows as of May 31:
(in thousands) 2010 2009
Unconditional promises scheduled to be collected in:
Less than one year
Between one year and five years
More than five years
Less discount and allowance for unfulfilled promises to give
Contributions receivable, net
$
$
56,669
137,220
42,619
(44,546)
191,962
$ 63,291
147,931
55,230
(45,041)
$ 221,411
A present value discount of $22,284,000 and $28,224,000 as of May 31, 2010 and 2009, respectively, has been calculated using discount factors that approximate the risk and expected timing of future contribution payments.
The University has reflected contributions received during fiscal 2010 and 2009 at fair value as determined in accordance with fair value accounting guidance.
Conditional promises of $8,616,000 and $9,474,000 as of May 31, 2010 and 2009, respectively, are not recorded in the financial statements.
D. Investments
Investments are stated at fair value and include accrued income. The value of publicly traded securities is based upon quoted market prices and net asset values. Other securities, for which no such quotations or valuations are readily available, are carried at fair value as estimated by management using values provided by external investment managers or appraisers. The
University believes that these valuations are a reasonable estimate of fair value as of May 31, 2010 and 2009, but are subject to uncertainty and, therefore, may differ from the value that would have been used had a ready market for the investments existed.
Included in the investment balances and investment return amounts, which follow, are funds held by trustees consisting principally of investments in United States Government obligations. These funds are maintained by the University to meet the requirements of certain licensing, secured note, and bond agreements, and as of May 31, 2010 and 2009, include $3,777,000 and $10,765,000, respectively, of construction funds held by trustees associated with the Boston College Series P and Series Q bond issues that will be drawn down to fund various construction projects.
Investments, including funds held by trustees, consist of the following as of May 31:
(in thousands)
Cost
2010
Market Cost
2009
Market
Equities
Fixed income
Real assets
Total
$ 1,067,944
349,644
126,973
$ 1,544,561
$ 1,257,890
391,546
108,775
$ 1,758,211
$ 1,061,093
316,900
134,323
$ 1,512,316
$ 1,091,131
339,348
119,923
$ 1,550,402
8

Boston College
Notes to Financial Statements
May 31, 2010 and 2009
Equities include common stock, mutual funds, commingled funds and limited partnership interests.
Fixed income includes money market funds, treasury and agency securities and limited partnership interests.
A three level hierarchy of valuation inputs has been established based on the extent to which the inputs are observable in the marketplace. Level I is considered observable based on inputs such as quoted prices in active markets. Level II is considered observable based on inputs, other than quoted prices in active markets, and Level III is considered unobservable. Investments with annual redemption provisions are classified as Level II. The University's investments included in Level II and III primarily consist of alternative investments (principally limited partnership interests). Limited partnership interests with quarterly or annual redemption provisions are classified as Level II, others are classified as Level III.
The following tables present the financial instruments carried at fair value as of May 31:
(in thousands)
Level I
2010
Level II Level III Total
Equities
Fixed income
Real assets
Total
$ 551,880
304,380
9,711
$ 865,971
$ 512,172
7,055
28,679
$ 547,906
$ 193,838
80,111
70,385
$ 344,334
$ 1,257,890
391,546
108,775
$ 1,758,211
(in thousands)
Equities
Fixed income
Real assets
Total
Level I
$ 494,664
252,181
6,200
$ 753,045
2009
Level II
$ -
-
-
$ -
Level III
$ 596,467
87,167
113,723
$ 797,357
Total
$ 1,091,131
339,348
119,923
$ 1,550,402
9

Boston College
Notes to Financial Statements
May 31, 2010 and 2009
The fair values of limited partnerships are represented by the net asset value of the partnership.
The objective of these investments is to generate long term returns significantly higher than public equity markets on a risk adjusted basis. Redemption terms for those investments valued at net asset value consist of the following as of May 31, 2010:
(in thousands)
Redemption Terms Equities
Fixed
Income
Real
Assets Total
Within 30 Days
Monthly
30-60 days prior written notice
Quarterly
30-90 days prior written notice
Semi-Annually, Annually
30-180 days prior written notice
1-5 years
6-10 years
Total
$ 81,759
51,290
112,545
266,577
126,533
67,267
$ 705,971
$ -
-
-
77,167
-
-
$ 77,167
$ -
-
12,321
16,359
22,100
14,715
$ 65,495
$ 81,759
51,290
124,866
360,103
148,633
81,982
$ 848,633
The University is committed to invest up to an additional $149,700,000 in private equity investments as of May 31, 2010.
As a result of new guidance related to estimating fair value of investments, certain investments which can be redeemed in the near term have been classified to Level II in 2010. The following tables include rollforwards of investments classified by the University within Level III as defined previously as of May 31:
(in thousands)
Fair value, June 1, 2009
Classified to Level II
Investment income, net
Realized and unrealized
gains(losses), net
Purchases and sales, net
Fair value, May 31, 2010
(in thousands)
Fixed
Income
2010
Real
Assets Equities Total
$ 596,467
(413,843)
(3,439)
$ 87,167
(6,347)
(893)
$ 113,723
(30,218)
(605)
$ 797,357
(450,408)
(4,937)
29,897
(15,244)
$ 193,838
13,561
(13,377)
$ 80,111
(10,588)
(1,927)
$ 70,385
32,870
(30,548)
$ 344,334
2009
Total
Fair value, June 1, 2008
Investment income, net
Realized and unrealized gains(losses), net
Purchases and sales, net
Fair value, May 31, 2009
$ 907,980
(5,961)
(160,844)
56,182
$ 797,357
10

Boston College
Notes to Financial Statements
May 31, 2010 and 2009
The University recognized net realized and unrealized gains of $177,441,000 and investment income of $4,512,000, net of investment advisory fees of $12,127,000, for the year ended
May 31, 2010.
The University recognized net realized and unrealized losses of $408,366,000 and investment income of $4,871,000, net of investment advisory fees of $11,337,000, for the year ended
May 31, 2009.
E. Endowment
On July 2, 2009, the Commonwealth of Massachusetts adopted the Uniform Prudent Management of Institutional Funds Act (UPMIFA). UPMIFA provides new standards governing the investment accumulations and expenditure of the University’s endowment funds. The net assets associated with the University’s endowment funds are classified in accordance with relevant state law as interpreted by the Board of Trustees. These classifications are unrestricted, temporarily restricted, and permanently restricted based on the existence or absence of donor-imposed restrictions.
Unrestricted net assets include Board-designated funds, and any accumulated income and appreciation thereon. Temporarily restricted net assets include contributions not yet designated by donors and accumulated appreciation on temporarily and permanently restricted funds.
Permanently restricted net assets include contributions designated by donors to be invested in perpetuity to produce income for general or specific purposes.
The University has an endowment spending policy, as approved by the University's Board of
Trustees, which aims to preserve the purchasing power of the endowment. Under this policy, 5% of a three-year quarterly moving average of market values can be expended for operations. The long-term performance objective of the endowment portfolio is to attain an average annual total return that exceeds the University's spending rate plus inflation within acceptable levels of risk over a full market cycle. To achieve its long-term rate of return objectives, the University relies on a total return strategy in which investment returns are achieved through both capital appreciation and current yield.
As of May 31, 2010 and 2009 the market value attributable to certain endowment funds was less than the historical value of the related permanently restricted contribution by an aggregate of
$2,463,000 and $11,287,000, respectively. This has been reflected as a reduction of unrestricted net assets and will be restored to unrestricted net assets when the market value exceeds historical value. These deficits resulted from unfavorable market fluctuations.
11

Boston College
Notes to Financial Statements
May 31, 2010 and 2009
F. Property, Plant and Equipment
The physical plant assets of the University are stated at cost on the date of acquisition or at fair market or appraised value on the date of donation in the case of contributions. Physical plant assets consist of the following as of May 31:
(in thousands) 2010 2009
Land and improvements
Buildings
Equipment
Library books
Rare book and art collections
Purchase options
Plant under construction
Property, plant and equipment, gross
Accumulated depreciation/amortization
Property, plant and equipment, net
$ 231,345
$
1,004,577
191,622
145,851
18,888
2,855
17,610
1,612,748
(573,137)
1,039,611
$ 229,967
962,539
179,000
138,162
17,652
2,855
38,242
1,568,417
(530,929)
$ 1,037,488
Annual provisions for depreciation of physical plant assets are computed on a straight-line basis over the expected useful lives of the individual assets, averaging 20 years for land improvements,
25-60 years for buildings, and 2-15 years for equipment. Depreciation for the years ended
May 31, 2010 and 2009 amounted to $45,042,000 and $43,598,000, respectively, and are allocated to functional expense categories on the statement of activities based on square foot usage calculations.
Library books are amortized over 50 years. Amortization amounted to $2,917,000 and $2,763,000 for the years ended May 31, 2010 and 2009, respectively. Rare book and art collections are reflected at historical cost and are not amortized.
Maintenance and repairs are expensed as incurred, and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation thereon are removed from the accounts, and gains or losses are included in the statement of activities. The University retired or disposed of $7,865,000 and $18,245,000 in gross plant assets for the years ended
May 31, 2010 and 2009, respectively.
Property, plant and equipment additions of $6,577,000 and $4,670,000 included in accounts payable are reflected as a noncash item in the statement of cash flows for the years ended
May 31, 2010 and 2009, respectively.
The University recognized $369,000 and $372,000 of operating expenses relating to the accretion of liabilities associated with the retirement of long-lived assets, for the years ended May 31, 2010 and 2009, respectively. Conditional asset retirement obligations of $7,654,000 and $7,101,000 as of May 31, 2010 and 2009, respectively, are included in accrued liabilities.
The University has commitments of $23,065,000 to complete various construction projects as of
May 31, 2010.
12

Boston College
Notes to Financial Statements
May 31, 2010 and 2009
G. Bonds and Mortgages Payable
Bonds and mortgages payable consist of the following as of May 31:
(in thousands) 2010 2009
Massachusetts Health and Educational Facilities Authority (MHEFA)
Boston College Issues (fixed rate)
Series K, 5.25 - 5.38%, due 2010 - 2015
Series L, 4.75 - 5.25%, due 2010 - 2032
Series M, 5.00 - 5.50%, due 2023 - 2036
Series N, 4.13 - 5.25%, due 2010 - 2038
Massachusetts Development Finance Agency (MDFA)
Boston College Issue (fixed rate)
Series P, 4.75 - 5.00%, due 2020-2043
Series Q, 3.00 - 5.00%, due 2011-2030
Department of Education
Library building bonds, 3.41%, due 2010 - 2023
Secured note, 3.00%, due 2010 - 2018
Bonds and mortgages payable, par
Net unamortized original bond issue premium
Bonds and mortgages payable, net
$ 23,495
107,665
134,285
102,255
176,980
95,695
7,735
1,312
649,422
22,265
$ 671,687
$ 27,510
108,955
134,285
103,340
176,980
95,695
8,180
1,455
656,400
23,036
$ 679,436
The Department of Education building bonds are collateralized by a mortgage on the O'Neill Library and the secured note is collateralized by funds held by trustees.
As of May 31, 2010, principal payments due on all long-term bonds and mortgages payable are as follows: 2011 - $11,472,000; 2012 - $12,012,000; 2013 - $12,627,000; 2014 - $13,286,000;
2015 - $13,996,000 and thereafter - $586,029,000.
As of May 31, 2010 and 2009, the estimated fair values of bonds and mortgages payable are
$706,466,000 and $697,938,000, respectively. The fair value of bonds and mortgages payable is based on rates currently available for instruments with similar maturities.
Interest expense for the years ended May 31, 2010 and 2009 amounted to $31,909,000 and
$27,876,000, respectively. Interest expense has been allocated to the functional expense categories on the statement of activities based on each functional area's corresponding use of the related space or equipment that was constructed or acquired through debt financing. The
University capitalized interest of $198,000 and $1,760,000 for the years ended May 31, 2010 and
2009, respectively.
The University has an agreement for a $75,000,000 unsecured line of credit. As of May 31, 2010 and 2009, there was no balance outstanding on the line of credit.
In May 2009, the University issued Massachusetts Development Finance Agency (MDFA) Series Q
Revenue Bonds in the amount of $95,695,000. The proceeds from this issue were used to retire outstanding debt, finance the acquisition of property located in Brighton, MA and fund project costs.
The University recognized a debt extinguishment charge of $104,000 and incurred costs of
$788,000 associated with this issue which have been capitalized and are being amortized over the life of the bonds. The MDFA Series Q Revenue Bonds were issued with an original issue premium of $9,123,000, which is being amortized over the life of the bonds.
13

Boston College
Notes to Financial Statements
May 31, 2010 and 2009
H. Net Assets
I.
Net assets consist of the following as of May 31:
(in thousands)
2010
Unrestricted
2009
Endowment net assets,
beginning of year
Board designated
Donor restricted
Contributions
Investment return:
Investment income
Net appreciation/(depreciation)
Total investment return
Appropriation of endowed assets
for expenditure
Net assets reclassified or released
from restrictions
Other (losses) and gains, net
Endowment net assets, end of year
Board designated
Donor restricted
Designated for specific purposes
Net investment in plant
Program support
Contributions for plant assets
Student loans
Total net assets
Donor Restricted
Temporarily Restricted
2010 2009
Permanently Restricted
2010 2009
$ 659,934
-
-
(928)
89,663
88,735
$ 908,737
-
-
42
(211,704)
(211,662)
$ 196,740
7,448
$ 385,620
7,530
(313)
85,910
85,597
556
(176,153)
(175,597)
$ 634,484
44,371
$ 555,444
79,553
54
4,912
4,966
86
(13,535)
(13,449)
(42,453)
10,957
(103)
(41,801)
4,666
(6)
(40,651)
(2,137)
(1,224)
(36,955)
18,900
(2,758)
-
3,414
(2,425)
-
18,144
(5,208)
717,070 659,934
77,874
370,744
-
-
-
$ 1,165,688
58,518
367,682
-
-
-
$ 1,086,134
245,773
-
-
31,891
58,326
936
$ 336,926
196,740
-
-
30,913
61,002
958
$ 289,613
684,810
-
-
-
-
-
$ 684,810
634,484
-
-
-
-
-
$ 634,484
Retirement Programs
All eligible full-time personnel may elect to participate in a defined contribution retirement program.
Under the program, the University makes contributions, currently limited to 8-10% of the annual wages of participants, up to defined limits. Voluntary contributions by participants are made subject to IRS limitations. The limitation applicable to University contributions is on a combined plan basis. For the years ended May 31, 2010 and 2009, the University's contributions to the retirement program were $20,229,000 and $19,485,000 respectively.
The University provides certain health care benefits for retired employees who meet certain age and service requirements. Employees will become eligible for this benefit if they reach retirement while employed by the University. The plan does not hold assets and is funded as benefits are paid. The estimated future cost of providing postretirement health care benefits is recognized on an accrual basis over the period of service during which benefits are earned.
In fiscal 2010, the University increased the cost sharing for pre-65 retirees by 1%. The net impact of the change was a decrease in the benefit obligation of $16,000.
In fiscal 2009, the University announced a plan amendment under which contributions for future retirees will be based on a designated plan. The net impact of the change was a decrease in the benefit obligation of $4,120,000.
14

Boston College
Notes to Financial Statements
May 31, 2010 and 2009
The net periodic postretirement health care benefit cost and other changes in plan assets and benefit obligation recognized in unrestricted net assets were determined as follows for the years ended May 31:
(in thousands) 2010 2009
Service cost
Interest cost
Amortization of prior service cost
Amortization of loss
Net periodic postretirement benefit cost
Prior service cost related to plan amendment
Net (gain) loss
Amortization of prior service cost
Amortization of loss
Other changes in plan assets and benefit obligation
Total recognized in net periodic benefit cost and
unrestricted net assets
$ 2,364
3,175
(1,044)
387
4,882
(16)
10,766
1,044
(387)
11,407
$ 2,333
3,012
(499)
139
4,985
(4,120)
3,165
499
(139)
(595)
$ 16,289 $ 4,390
In fiscal 2011, the prior service cost credit of $(1,050,000) and unrecognized net loss of $1,030,000 are expected to be amortized as a component of net periodic postretirement benefit cost.
For measurement purposes, the assumed annual rates of increase for the year ending
May 31, 2011 were; 7.25% in the per capita cost of covered health care benefits for post-65 benefits, 7.50% in the per capita cost of covered health care benefits for pre-65 benefits, and
7.00% in the Medicare Part D subsidy integration threshold. All three rates were assumed to decrease gradually to 5.00% in 2015 and remain at that level thereafter.
A one percentage point change in the assumed health care cost trend rates would have the following effect:
(in thousands) Increase Decrease
Effect on total of service and interest cost components
Effect on postretirement benefit obligation
$ 942
8,343
$ (770)
(6,980)
The discount rate used to determine the accumulated benefit obligation is 5.75% and 6.50% as of
May 31, 2010 and 2009, respectively. The discount rate used to determine the net periodic postretirement benefit cost is 6.50% as of May 31, 2010 and 2009.
15

Boston College
Notes to Financial Statements
May 31, 2010 and 2009
A reconciliation of the accumulated postretirement benefit obligation and plan assets are as follows as of May 31:
(in thousands) 2010 2009
Reconciliation of accumulated postretirement
benefit obligation
Benefit obligation, beginning of year
Service cost
Interest cost
Plan participant contributions
Part D subsidy received
Actuarial (gain) loss
Benefits paid
Plan amendment
Benefit obligation, end of year
Amounts recognized in statement of financial position
consist of:
Accrued liabilities
Amounts recognized in unrestricted net assets
Prior service cost
Net actuarial loss
$
$
$
46,556
2,364
3,175
302
216
10,766
(2,238)
(16)
61,125
61,125
$
$
$
43,919
2,333
3,012
286
-
3,165
(2,039)
(4,120)
46,556
46,556
$
$
(4,954)
16,222
11,268
$ (5,982)
5,844
$ (138)
Expected benefit payments, net of participant contributions and expected Medicare retiree drug subsidy is as follows: 2011 - $2,154,000; 2012 - $2,740,000; 2013 - $2,966,000;
2014 - $3,206,000; 2015 - $3,427,000; and the five fiscal years thereafter - $20,781,000. The expected Medicare retiree drug subsidy is as follows: 2011 - $606,000; 2012 - $244,000;
2013 - $243,000; 2014 - $241,000; 2015 - $238,000; and the five fiscal years thereafter - $1,089,000.
J. Related Party
Boston College Ireland, Ltd. ("BCI") is a nonprofit entity established as an institute of education in the Republic of Ireland. The University has an investment in the real estate used by BCI for educational and rental purposes. The value of the investment as of May 31, 2010 and 2009 amounted to $1,671,000 and $4,077,000, respectively, and is included in the University's real estate investments.
The University has mortgages, loans and notes due from various related parties of $23,482,000 and $23,320,000 as of May 31, 2010 and 2009, respectively.
16

Boston College
Notes to Financial Statements
May 31, 2010 and 2009
K. Commitments and Contingencies
The University has several legal cases pending that have arisen in the normal course of its operations. The University believes that the outcome of these cases will have no material adverse effect on the financial position of the University.
The University leases facilities and campus transportation under various operating lease agreements, the last of which expires in 2020. The University incurred operating lease expenses of $4,993,000 and $4,852,000 for the years ended May 31, 2010 and 2009, respectively. At
May 31, 2010, the minimum aggregate commitments for all current operating leases are as follows:
2011 - $4,876,000; 2012 - $4,952,000; 2013 - $1,021,000; 2014 - $400,000; 2015 - $333,000 and thereafter - $1,525,000.
17