Measuring Success
american university annual report 2007–2008
Table of Contents
From the Chairman of the Board of Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
From the President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Academics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Athletics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Environmental Initiatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Community and Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
From the Vice President of Finance and Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
University Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Board of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
From the Chairman
of the Board of Trustees
As a university in the nation’s top tier of private institutions, American
University takes seriously its commitment to provide the very best
education possible. But what does this mean and how is it measured?
The report that follows provides a glimpse of AU’s impact and how
we are effecting positive change locally, nationally, and internationally.
In addition to the essential task of educating our students to meet the
challenges that await them as productive citizens, the university has always
had a much higher calling, as cited in the Statement of Common Purpose:
Its distinctive feature, unique in higher education, is its capacity
as a national and international university to turn ideas into action
and action into service by emphasizing the arts and sciences, then
connecting them to the issues of contemporary public affairs, writ
large, notably in the areas of government, communication, business,
law, and international service.
This mission comes to life in tangible ways, as illustrated by the examples that follow. They show the breadth
of involvement and depth of impact of AU students, faculty, and staff. The cumulative effect can be measured
in the number of students taught, research conducted, and creativity applied; in facilities built and service hours
invested; and through ratings by education authorities and oversight bodies. Beyond that, however, is the effect
that American University has on people’s lives and the quality of life for all of us.
Browse these pages and be impressed. I was.
Sincerely,
From the President
All universities are watched by their peers and the public, and
evaluated by rating agencies and professional organizations.
Whether through public impressions or formal rankings, American
University is judged by its impact on our students and on the
larger society—local, national, and international. In pursuit of our
mission to educate and inform, AU’s reach is long and its impact
strong in many ways, such as through
• ideas, applied to contemporary issues of national and
international significance
• faculty and student research, with practical applicability
to broaden minds and improve lives
• teaching, in our classrooms and in our community
• outreach, through hands-on efforts to help those in need
and convey information for the benefit of others
• values, to instill ethical behaviors and sensible approaches to
society’s challenges, while creating a diverse and inclusive campus
conducive to practicing this ethos
The success metrics affirm AU’s achievements, which are increasingly impressive, whether it’s a rise in the
national rankings for our schools and colleges, the growing number of prestigious scholarships and fellowships
our students have earned, the research dollars and honors our faculty have garnered, or our athletes’ success
on the playing field and in the classroom.
The measuring tools and rankings are there for all to see; some are mentioned in this report, others are available
through our Office of Institutional Research and Assessment. To paraphrase a former sports celebrity (but using
correct English): “it’s not bragging if you can back it up.” We can.
Sincerely,
Gary M. Abramson
Cornelius M. Kerwin
2
american university 2007–2008 annual report 3
measuring success
In the classroom, test scores separate A students from the
rest. On the court, a single free throw can determine which
team goes home happy and which team just goes home.
College campuses abound with measures of success.
Grades, grants, volunteer hours, internships, sports scores,
SAT scores, journal articles, library volumes, and student
enrollment all indicate the health of an institution.
However, a university’s true measure of success can’t
be found in a blue book or on a scoreboard. It’s in the
knowledge its faculty creates, the passion its graduates bring
to their professions, the impact it has on its community,
both around the corner and around the world. A university’s
success is the indelible mark it leaves on students, faculty,
staff, alumni, and neighbors—the courage to tackle tough
questions, the willingness to speak up for the voiceless,
the desire to innovate, and the want for a better world.
As President Neil Kerwin said during his inauguration
ceremony on February 8, 2008, American University is
“a place where knowledge is created, where knowledge
changes lives, and those lives go on to change the world.”
And at the center of it all is Washington. Like a magnet, the
city attracts students who are eager to learn and ready to
serve—young men and women who arrive on campus with
a deeply held belief in something greater than themselves.
Washington, noted Kerwin, is “our stage, our laboratory,
and, more important, our home.” And “it is both our
responsibility and great opportunity to participate fully
in its life and to promote its well-being.”
Join us as we explore four areas—academics, athletics,
sustainability, and service—in which members of the
AU community have enjoyed great success this year, thus
leaving their indelible mark on the university, Washington,
and beyond.
Academics
success in the classroom
a laboratory of learning
Long before he crossed the Bender Arena stage in
May to receive his bachelor’s degree in biology, 2008
President’s Award–winner Patrick Sullivan had built
an enviable résumé.
Clad in a white lab coat, petri dish in hand, Sullivan
spent most of his undergraduate career in AU’s Hurst
Hall, studying everything from the genes of diabetic
mice to a rare Appalachian crustacean—which became
the focus of a manuscript he coauthored for the
academic journal Evolution.
During his senior year, Sullivan, who’s bound for
medical school after he completes a stint in the Peace
Corps, also worked weekdays on cancer drug trials
at the National Institutes of Health.
Outside the lab, Sullivan sang in AU’s choir, rowed
on its crew team, served as a campus tour guide,
spearheaded fund-raising campaigns for charity,
and trained for the Ironman Triathlon—all while
maintaining a near-perfect GPA.
It seems like a lot for an undergraduate to juggle, but
for Patrick Sullivan—like many of AU’s nearly 11,000
students—there’s more to the academic experience than
test tubes and textbooks. From its 112 undergraduate
and graduate offerings, many of them nationally ranked
and internationally renowned, to its array of research
and service opportunities, American University truly
is a laboratory of learning.
american university 2007–2008 annual report 7
American University
has produced
15 Truman scholars overall,
including 8 in the past 8 years.
Patrick Sullivan, recipient of AU’s 2008
President’s Award
Christina Arnold, a Jack Kent Cooke
graduate scholar
our students: driven by a sense of purpose
2007–2008 was a good year for
Fulbright scholars,
Presidential
Management
Fellows, and
Humphrey
fellows.
15 Fulbright scholars from 14
countries, including Egypt, Laos,
and Uruguay, studied at AU.
36 AU students were selected
for Presidential Management
Fellowships, the third most of
any university in the country.
10 Hubert H. Humphrey fellows—
an accomplished international
group of judges, prosecutors,
and even a former presidential
candidate—studied at the
Washington College of Law.
8
If scholarships and grants were represented with medals and trophies,
AU would need a bigger display case. Last year, the university amassed
an impressive collection of student honors, ranging from the prestigious
Harry S. Truman Foundation Scholarship to the renowned Presidential
Management Fellowship. But, there’s more than heavy hardware to AU’s
honors; behind every award and accolade is the story of a student relentless
in his or her quest for knowledge and purpose.
Take School of Public Affairs (SPA) alumna Christina Arnold, who was
awarded a 2008 Jack Kent Cooke Foundation Graduate Scholarship for her
work with Prevent Human Trafficking, the nonprofit she established in 1999
before she began her undergraduate studies at AU.
Arnold, who grew up in South and Southeast Asia, founded the organization
to support anti-trafficking efforts in Thailand, Cambodia, and the United
States. The group, one of the first U.S. organizations to draw attention to
millions of impoverished women and children trapped in the sex industry,
has created a home for street kids in Thailand and hosted training sessions
for embassy officials.
Despite Arnold’s accomplishments, she knew there was more to learn, more
to discover, more work to be done.
“Everything I’ve done in nonprofits, I’ve learned through trial and error,”
said Arnold, who was also a 2003 Harry S. Truman scholar. “In the last
couple of years, I recognized there’s a lot to learn about best practices in
running nonprofits, in leadership, and managing people and inspiring them.”
Arnold is AU’s fourth Cooke scholar and will use her scholarship, which
provides up to $50,000 per year for up to six years, to hone her management
skills by pursuing a master’s degree in public administration at SPA, followed
by law school.
James Valvo, a Truman scholar
Molly Kenney, a Truman scholar
agents of change
Two 2008 Harry S. Truman Scholarships went to
AU students Molly Kenney and James Valvo. The
scholarship prepares exceptional undergrads for careers
in public service by providing them with leadership
training and $30,000 for graduate school.
James Valvo was a chef at a four-star French-Asian
fusion restaurant in Detroit before trading his apron for
a backpack and heading to Washington. He works full
time with Americans for Prosperity, a nonprofit that
educates citizens on tax policy, and has his sights set
on law school.
Molly Kenney, who’s interned with the Public Defender
Service for the District of Columbia and studied abroad
at the London School of Economics, is also bound for
law school.
“For me, the Truman is an opportunity to learn how
to best be a change agent in my field,” said Kenney,
who’s interested in prison reform. She hopes to “work
for smarter criminal justice policy that benefits society
as a whole.”
Udall scholars, from left: Carrie Johnson, Casey Roe, Drew Veysey
This was the second straight year the Truman
Foundation named two AU students to its prestigious
class of 65 winners nationwide.
Drew Veysey, along with Carrie Johnson and Casey Roe,
was tapped for the coveted Morris K. Udall Scholarship,
a $5,000 award for students committed to careers in
environmental or Native American policy and activism.
It was fly fishing that gave Veysey his concern for
freshwater aquatic systems. An Iowa native, he learned
the sport from his grandfather, who also instilled in him
a commitment to clean water.
“We have tremendous problems with our water in Iowa,
and that obviously hurts fly fishing,” he said. “So, my
interest in environmentalism and political activism
started very early in life.”
An environmental studies and political science
major, Veysey spent the summer interning with Iowa
Global Warming. As a political organizer, he collected
petition signatures, recruited volunteers, and bent
lawmakers’ ears on a variety of issues, from ethanol
to anti-sprawl initiatives.
american university 2007–2008 annual report 9
Most of all, Veysey enjoyed hitting the pavement,
chatting with passersby about global warming and
climate change.
“I really learned how to make these issues matter to the
lives of average people,” he said. For the environmental
movement to gain traction, “we have to organize on all
levels, from Washington, D.C., to Des Moines, Iowa.”
sparking conversations
Scholarships and fellowships aren’t the only accolades
students brought home to AU this year. From the editing
rooms in the School of Communication (SOC) to the
College of Arts and Sciences’ (CAS) labs across the
quad, students turned out many praiseworthy projects.
Laura Waters Hinson’s first feature documentary, As We
Forgive, garnered a gold medal during the Academy of
Motion Picture Arts and Sciences’ 35th annual Student
Academy Awards competition. A 2007 graduate of SOC,
Hinson won $5,000 and, more importantly, national
exposure for her film.
The documentary, narrated by actress and human rights
activist Mia Farrow, chronicles national reconciliation
in Rwanda through the eyes of two women who come
face-to-face with the men who murdered their families
during the 1994 genocide.
SOC students also snagged a student Emmy for their
30-minute PBS documentary, EcoViews: The Chesapeake
This was the
second year in a row
that AU students
captured three of the coveted
Udall scholarships.
Bay, which featured segments on the Chesapeake Bay’s
oyster population, the Mattaponi Indian Tribe, and the
bay’s ecosystem.
The documentary Living on the Edge took second
place at the third annual Student Environmental Short
Film Festival in D.C. Written and produced by students
in SOC professor Sandy Cannon-Brown’s environmental
filmmaking class, Living on the Edge tells the story of
erosion by following the efforts of two women to save
their retirement home, perched on a cliff, from collapsing
into the Chesapeake Bay.
Catalyst, AU’s student-edited science magazine, captured
the national spotlight, winning a 2007 award for
publication excellence from the Virginia-based publishing
company Communications Concepts. Conceived by SOC
alumna April Astor in 2004, Catalyst’s goal is to inform
both on- and off-campus readers about AU’s flourishing
science programs.
“It shows the vitality of the sciences at AU and the way
our faculty and students have blended their interests and
the applications of sciences,” said CAS dean Kay Mussell
of the publication.
engaging in independent learning
The AU experience fuels students’ intellectual curiosity,
encouraging them to explore, create, read, question, and
grow. From political science 101 to American history 202,
students across campus are urged to dig deeper and never
stop asking why.
Aspiring astronomer Johanna Teske is one of AU’s
brightest stars. The physics major was honored for her
senior honors project, which involved perusing clouds of
space dust for signs of fledgling planets. Her research was
presented at a conference in Hong Kong earlier this year.
Teske, who interned at the NASA Goddard Space Flight
Center and the Harvard-Smithsonian Astrophysical
Observatory, was recognized as one of the University
Honors Program’s most accomplished students during
the end-of-the-year award ceremony. Also receiving top
honors were John O’Trakoun, who delivered a sermon
in English and Lao when he was ordained a Buddhist
monk in 2007, and Mark Meyer, whose professional
presentations have included “The Value of Entertainment
in Mathematics.”
Students from AU’s School of Education, Teaching, and
Health are conducting different types of experiments in the
classroom, in the hope of fostering their own young students’
creativity and intellectual curiosity. Four AU student-teachers
won small grants—less than $500—from the Ganek Family
Student-Teacher Mini-Grants program. These innovative and
committed young teachers stretched the funds for maximum
impact in the classroom.
new funding supports
undergraduate research
Honors Scholar Award winners, from left: Mara Theophila, Claire Roby, Sonya Hetrick, Mark Meyer, Johanna Teske, and David Moak, with University Honors
Program director Michael Mass and associate director Paula McCabe
10
New for the 2007–2008 academic year, thousands
of dollars in funding is now being set aside for
undergraduates who want to pursue their own research
or creative projects but need help with travel, supplies,
or other expenses. Three new funds reflect both a
desire to support students and a sea change that is
occurring in academic life as students are increasingly
encouraged to engage in independent research.
“We’re getting away from the model of a faculty expert
standing in front of the room and moving toward
a more broadly construed, participatory model,”
said Haig Mardirosian, dean of academic affairs.
“This is a step in that direction. It says that you as a
student engage in your own inquiry, take your own
risks, and get the rewards at the end. We want to
support that as a model of authentic learning.”
token economy
builds student
confidence
Thomas Bishop, a
2008 graduate with
an MA in international
training and education,
received one of four
Ganek mini-grants
Thomas Bishop
this past spring for his
innovative classroom
practices at Ballou Senior High School in
southeast Washington, D.C.
Bishop, who struggled with students who
showed up late for class or not at all,
devised a system he calls “Bishop Bucks.”
It’s a “token economy,” with fake money
that students earn for meeting classroom
expectations, like arriving on time ($2 reward)
and being prepared with pencils and books
($3 reward). Negative behavior earns fines,
from failing to bring a pencil ($2) to being
disrespectful or taking someone’s property
without permission ($10).
The money isn’t real, but it can buy actual
rewards, from soda and granola bars to a pizza
party for those who earn a collective $100.
“A token economy is a positive tool, an
educational tool, and provides a way to build
confidence and a positive environment,”
he said. In this environment, Bishop added,
“I can teach, and my students can learn.”
american university 2007–2008 annual report 11
our faculty: masters of their field
AU’s 649 full-time faculty and 451 adjuncts are an
accomplished group of researchers, poets, musicians,
filmmakers, activists, and writers. These masters of their
field bring endless experience, enthusiasm, and passion
to the classroom, intent on inspiring the next generation
of thinkers.
On the research front, faculty in all corners of campus
saw many successes, turning out groundbreaking
scholarship on such varied topics as tax policy and
human rights.
At CAS, economist in residence Caren Grown is
examining the gender dimensions of tax policies and
reforms across eight countries, including the United
Kingdom and Mexico.
“We’re looking at specific types of taxes, like the personal
income tax, to see whether there are any explicit provisions
that might be biased against women,” she explained.
The public policy side of Grown’s work is complemented
by its value in the classroom, where three of her students
are research assistants.
“I would like to see, by the time I retire, a generation
of young economists who know how to do gender-aware
economics . . . who know how to use empirical techniques
to illuminate gender differences in economic problems,”
Grown said.
At SPA, Robert Tobias has built a following around his
biannual Best Places to Work rankings, which aim to
improve leadership capacity within the federal government.
In May, Tobias, director of AU’s Institute for the Study
of Public Policy (ISPPI), set up shop on the National
Mall for FedPitch. Part of Public Service Recognition
Week, FedPitch offered a forum for anyone inside or
outside the government to propose a way to improve
the federal workforce.
The winning pitch came from a program analyst with
the Office of Personnel Management in Denver, who
proposed an online quiz to better direct federal job seekers
to positions that fit their interests and qualifications.
“It’s never been suggested before,” said Tobias. “It’s one
of those ideas that when you hear it, it’s like, ‘Why didn’t
they think about that?’”
human rights as a subject area
filled with content and also a toolbox with all sorts
of
analytical tools and skills that can be used
no matter what students do.”
Julie Mertus
recognized around the world
“I would like to see,
by the time I retire, a generation of
young economists
who know how to do
gender-aware economics.”
Caren Grown
At the School of International Service (SIS), Julie
Mertus is at work on her latest book, a comparative
look at national human rights institutions in the Czech
Republic, Bosnia, Denmark, and Northern Ireland.
A preeminent human rights scholar, Mertus’s previous
book, Bait and Switch: Human Rights and U.S. Foreign
Policy, was named “human rights book of the year” by the
American Political Science Association, and a textbook she
wrote on the subject has been translated into 13 languages.
Mertus, who is also organizing a human rights film
festival in her hometown of Baltimore, said her first
love has always been the classroom, despite her
publishing successes.
“I see human rights as a subject area filled with content
and also a toolbox with all sorts of analytical tools and
skills that can be used no matter what students do.”
12
“I see
Dozens of organizations, both within the Beltway
and well outside of it, honored members of AU’s
accomplished faculty for their contributions to the
academy in 2007–2008.
The university’s director of orchestral activities, Jesus
Manuel Berard, was named conductor for the D.C.
Youth Orchestra Program’s premier symphony orchestra.
Naomi Baron, professor of linguistics, was awarded a
Fulbright scholarship to conduct research on mobile
telephony and teach in Sweden. She’s since lectured
across Europe on the effects of the Internet on language.
Kogod’s Sonya Grier, an expert in social marketing,
was appointed to the advisory board for Transformative
Consumer Research. Grier also works with the
African American Collaborative Obesity Research
Network to better understand how targeted marketing
contributes to Americans’ expanding waistlines.
SPA’s Robert Durant was awarded the Leslie A.
Whittington Excellence in Teaching Award from the
National Association of Schools of Public Affairs and
Administration in honor of his “outstanding contributions
to education for the public service.”
WCL dean Claudio Grossman was reelected to the United
Nations Committee Against Torture.
students’
success a
source of pride
Respected around
the world for
his influential
scholarship on
development in
Africa, the School
James Mittelman
of International
Service’s James
Mittelman was named
University Professor of International Affairs.
Despite his professional accolades—including
work with the United Nations and stints as
a visiting professor at universities in South
Africa and Japan—Mittelman names watching
his students’ careers as his greatest reward.
Some have gone on to influential positions
in their governments as ambassadors,
ministers, and even a prime minister.
In Mittelman’s classroom, students discussed
the impact of ideas on political systems, global
dynamics, and the lives of billions. Now, his
former students are making a difference, in
every corner of the world.
“That,” he said, “is really my greatest source
of pride.”
University chaplain Joe Eldridge was honored for his
longtime commitment to human rights with the United
american university 2007–2008 annual report 13
AU vice president
and general counsel
Mary Kennard
was named a “top
Washington lawyer”
by the Washington
Business Journal
in 2007. Kennard
was the first female
general counsel
to win the award.
Photo by Suna Lee
au’s top lawyer
Mary Kennard
“The award says that people in Washington see
AU as a significant business in this town, and
that’s important. We contribute a lot—money,
buildings, brain power,” said Kennard, former
president of the Washington Metropolitan Area
Corporate Counsel Association.
Kennard was also named 2008 Woman
Lawyer of the Year by the Women’s Bar
Association of the District of Columbia.
Nations Association of the National Capital Area’s Louis
B. Sohn Award. Eldridge, who oversees the bustling Kay
Spiritual Life Center, often leads students on alternative
break trips to poor Latin American communities.
“The most rewarding part for me is [having] these
conversations with young people who want to be involved
with work that edifies and changes the world,” he said.
Abdul Aziz Said of SIS received the Fellowship of Peace
Award from the Mahatma Gandhi Memorial Foundation.
WCL professor Harold Datz was named the American
Bar Association’s Labor and Employment Lawyer of the
Year award.
The Department of Performing Arts’ Gail Humphries
Mardirosian was awarded a Fulbright scholarship to teach
at the conservatory in Prague in 2008–2009.
Richard Bennett, longtime professor of justice, law and
society within SPA, won the prestigious Founder’s Award
from the Academy of Criminal Justice Science.
14
institutional milestones
When it comes to rankings, AU has bragging rights.
The National Association for Student Personnel
Administrators awarded AU a bronze medal for its
efforts to expand study abroad opportunities for
students with disabilities. From 2003 to 2007, the
number of AU students with disabilities studying
abroad more than doubled, thanks to an inventory
of new summer programs.
SPA’s political science doctoral program was tops in
Washington, according to PS: Political Science and Politics.
The Kogod School of Business checked in at number
36 on the Wall Street Journal’s annual business school
graduate program rankings. Kogod moved up six spots
in the regional rankings since its last ranking in 2003.
WCL was named the fifth best law school in the nation for
Latino students, according to Hispanic Business magazine.
The Institute for International Education announced that
AU has the ninth-highest percentage of students studying
abroad of any college or university in the country. About 60
percent of AU students take classes abroad, outpacing such
institutions as Duke, Stanford, and George Washington.
Rankings make great sound bites, but at AU, they only
tell half the story. The true measure of success is the
growth of such seminal programs as Washington
Semester and the University College.
Faculty, staff, and representatives from many of the
Washington Semester’s 240 affiliate schools gathered to
commemorate the pioneering program’s 60th anniversary.
Started in 1947 with 12 students, the Washington
Semester program—which blends traditional academic
work with experiential learning—now boasts 30,000
alumni around the globe. Each year, about 400 students
flock to D.C. for what has been called the ultimate
Washington experience.
AU’s University College program grew again last fall,
enrolling 276 freshmen in small seminars led by senior
faculty on such subjects as visual literacy and the
philosophy of freedom. Since 2005, when select students
were first offered the chance to take the seminars while
living with upperclass mentors in themed residence
The
Honors Program welcomed its
highest achieving
freshman class ever,
with 175 students boasting
an average 3.91 GPA.
hall “neighborhoods,” the program has more than
doubled in scope.
“Students tell us every year that they appreciate the way
the program integrates their living and their learning
experiences, which is precisely what we strive to do,”
said Patrick Jackson, General Education program
director and SIS professor.
The Department of History hosted its inaugural Patrick
Clendenen Conference. The two-day event, “With
Vision Flying: New Perspectives on Women’s and
Gender History,” showcased new scholarship from AU
professors and alumni on such topics as Jewish women
in postwar suburbia and the “government girls” who
flocked to Washington during World War II.
SOC launched the Investigative Reporting Workshop—
the first research center of its kind in the world. The
workshop will conduct national and international
investigative reporting projects, written by SOC students
and faculty, along with seasoned journalists working
under contract with AU. Funded by a grant from a new
venture capital fund at the university, the workshop
will incubate new models for practicing and delivering
investigative journalism.
“The sad trend in American journalism has been
to reduce or eliminate vital resources devoted to
investigative reporting,” said project editor Wendell
Cochran. “Meanwhile, there has never been a greater
need for strong oversight of powerful public and private
institutions. The workshop will help fill this gap.”
campaign successes
As of June 2008, the university had raised nearly
$165 million toward the AnewAU campaign.
This year, several generous alumni contributed
to AU’s continued academic success by endowing
scholarships to attract high-achieving students,
funding new programs, and helping to equip
buildings for twenty-first-century learning.
etsy Finley Ashton, CAS/BA ’66, a painter
B
with a commissioned portrait practice and
studio in Manhattan
$250,000 to endow the Betsy Finley
Ashton Scholarship
Chip Griffin, SPA/BA ’94, cofounder and CEO
of Custom Scoop online news clipping service
$100,000 to create an endowed
scholarship supporting SPA students
from New England states
Tony Perkins, SOC/BA ’81, weather reporter at
FOX 5 in D.C., and his wife
$250,000 to name the Tony and Rhonda
Perkins Classroom in the McKinley building,
slated for renovation as SOC’s new home
ichard Hocker, Kogod/BS ’68, Kogod/MBA ’70,
R
founder and chief information officer of PENN
Capital Management
750,000 to name a classroom in Kogod’s
$
new building addition
rturo Porzecanski, economist in residence
A
at SIS
100,000 to the School of International
$
Service building
Dorothy Toth Beasley, WCL/JD ’64, former chief
judge of the Georgia Court of Appeals
$230,000 to increase the Stephen &
Beatrice Dodd Toth Scholarship Fund at WCL
american university 2007–2008 annual report 15
Athletics
success on the court
the big dance
It was a big year—a red-letter year, in fact—for AU’s
basketball programs.
a proper send-off as they began the journey
to Birmingham.
In December, the men’s basketball team shocked the
University of Maryland, beating the Terrapins, 67-59,
for the first time since 1927. The upset made believers
out of fans and critics alike, including writers at
Basketball Times, who had picked the Eagles to finish
dead last in the Patriot League.
Ultimately, the greatest week in 82 years of AU men’s
basketball ended with a loss to the second-seeded
University of Tennessee in the first round of the
tournament, March 21. And while AU came up on
the short end of the 72-57 decision, the Eagles were
number one in the hearts of the thousands of AU
alumni, students, faculty, and staff who tuned in the
midday match-up—a few even making the 750-mile
trek to Alabama.
The Eagles proved the publication dead wrong by
defeating Colgate to clinch the league championship—
and an automatic berth in the NCAA Tournament, one
of the nation’s preeminent sporting events.
With that win, the AU community found itself swept up
in March Madness. Reporters from the New York Times,
USA Today, and the Washington Post became regulars on
campus, while thousands of students, faculty, and staff
proudly donned the AU red and blue to give the team
“This is a great opportunity to put American on the
map,” junior guard Garrison Carr said.
The women’s basketball team also set a new record in
March, when they took home their first-ever Patriot
League regular championship.
american university 2007–2008 annual report 17
Photos courtesy of Athletics Communications
The men’s basketball team greets fans before departing for the NCAA Tournament.
Posting an impressive 18-14 record, the women notched
a record 11-game winning streak that extended into the
first round of the conference tournament and became
the third squad in Patriot League history to finish the
road portion of the league schedule undefeated.
5,000-meter men’s final at the NCAA Track and Field
Championships in June.
Many of AU’s scholar-athletes scored as big in the
classroom as they did on the court.
registered another, perhaps more impressive,
title: academic champions.
Josh Glenn became AU’s first-ever national wrestling
champion in 2007. A year later, the program
The squad was recognized by the National Wrestling
Coaches Association as having achieved the highest
combined GPA of any Division I program in the
country. AU’s 3.335 was tied with Duke, ahead of
such institutions as Stanford and Princeton.
Two AU runners made their mark on the track.
It was a dream senior season for Brendan Fennell.
He took home the 5,000-meter crown March 29 at
the Adidas Raleigh Relays at North Carolina State
University, shattering the AU record, which he also
owned, by 11 seconds and defeating professional
runners in the process. Fennell completed the race in
13:51.67, nearly one second ahead of the second-place
finisher. He also won the 3,000 meters at the Coastal
Carolina Invitational and the 1,500 meters at the Navy
Invitational in Annapolis.
“My goal is to win a national championship, and one
of our other goals is to be national champions in the
classroom,” said Coach Mark Cody. “That’s something
we tell recruits. Here, it’s academics first, then wrestling.”
Glenn, whose storied career came to an end this
year, and junior Mike Cannon pulled off the double
accomplishment, winning All-American honors for their
performances in both the arena and the classroom. In
addition, senior Christopher Stout and junior Jasen
Borshoff were also named Academic All-Americans.
“It means a lot to me,” said Cannon, a business
administration major specializing in accounting in
the Kogod School of Business. “It’s nice to work hard
for something and achieve it, not only on the mat but
in the classroom.”
Junior Carlos Jamieson’s stellar season led to his
becoming the first AU athlete to compete in the
18
Josh Glenn, 2007 national wrestling champion and Patriot League All-American
scoring in the classroom
outpacing the competition
Led by senior Denise Infante, AU’s field hockey
squad brought home their fifth straight Patriot
League Championship this year. The Lady Eagles
finished 16-4, falling in the NCAA playoffs to
Ohio, 3-2, in double overtime. The women placed
four student-athletes on the all-region team, and
Infante won her second All-American honor.
The women’s basketball team huddles during a game time-out.
Photo courtesy of Athletics Communications
Playing in the post-season for only the second time in
program history, AU’s women’s season came to a gutwrenching conclusion March 19, when the lady Eagles
lost, 53-52, to Villanova in the first round of the Women’s
National Invitational Tournament in Philadelphia.
This year, 160 student-athletes were also named to
the Patriot League Academic Honor Roll, earning a
GPA of 3.2 or higher, while 136 student-athletes made
the Dean’s List, garnering GPAs of 3.5 and above.
Jack Cassell, SOC/BA ’77, president and CEO
of Visual Aids Electronics, and Denise Cassell
increased their campaign gift amount to $1
million to include support for Athletics capital
projects, teams, and the Blue Crew spirit squad.
1,516 fans attended AU’s August 25 win
over George Washington University in women’s
volleyball, setting a new attendance record for
a Washington, D.C., collegiate volleyball match.
4 Patriot League coaches of the year
4 Patriot League championships
(men’s basketball, men’s cross
country, field hockey,
volleyball)
6
Individual
conference
champions
AU and Stanford were the only schools this year to
rank in the top 10 academically and also place in
the top 25 at the NCAA championships. The Eagles
have accomplished the feat three consecutive years.
Brendan Fennell
american university 2007–2008 annual report 19
Environmental
Initiatives
success toward a sustainable future
green is not a buzz word
At AU, the dream is green. And with every tree
planted, every paper recycled, and every kilowatt
of wind power purchased, that dream is becoming
a reality.
LEED Gold is the target for the innovative new
home of the School of International Service (SIS),
a green building that will rise over the next two years
on what was once an asphalt parking lot at the edge
of the quad.
When completed in 2010, the 75,000-square-foot
building will be “the most functional, most beautiful,
most environmentally friendly home” for the country’s
largest school of international service, said Dean
Louis Goodman.
Building materials were carefully selected to maximize
recycled content and foster environmental and social
responsibility. Rain water, collected from the roof,
will be stored and used for the building and for site
irrigation. Solar panels will assist in water heating,
and photovoltaic collection is under consideration for
future power generation.
“For more than 50 years, [SIS] has been educating
young men and women for international service—a
distinctive trait of this school and our entire university,”
said President Kerwin. “With a new green home for
our scholars, students, and academic programs, we
rededicated ourselves to this mission.”
american university 2007–2008 annual report 21
“We just can’t continue to expand dumps and cover the
planet with our waste,” said William Suter, director of
Facilities Management. “We have an obligation, as a
university and as citizens, to do something.”
In 2007 AU launched a green cleaning program and
equipped every campus restroom with recycled hand
towels and toilet paper, along with new dispensers
and hand soap. The grounds staff implemented an
organic turf maintenance program on the quad, and
last fall the team installed AU’s first green roof atop
the Media Production Center.
Public Safety purchased three battery-powered T3
scooters. Chief Michael McNair opted for the scooters
over a new cruiser in order to increase officer visibility
on campus and to help the department “go green.”
“We just can’t
One of Public Safety’s battery-powered scooters
continue to expand dumps ...
The groundbreaking ceremony for the new SIS building, from left: SIS associate dean Leanne Dunsmore, professor emeritus Millidge Walker, SIS
alumna of the year Sherry Mueller, Methodist Bishop John Schol, Senator Daniel Inouye (D-Hawaii), AU president Neil Kerwin, SIS dean Louis
Goodman, graduate student Blair Mersinger, and SIS professor Paul Wapner
reuse, renew, recycle
In April, President Kerwin underscored AU’s
commitment to sustainability by signing the
American College and University Presidents Climate
Commitment, an agreement requiring the university
to move toward climate neutrality. More than 500
universities across the country have adopted the
commitment, which addresses the threats posed
by global warming.
program aims to drive that number even higher. More
than 200 recycling cans now dot the campus, and a
local contractor transports the presorted recyclables
to a facility in Rockville, Maryland, to be measured.
William Suter
saving paper, saving trees
The office of New Student Programs, the Department
of Environmental Studies, and the faculty corner at
the Center for Teaching Excellence have been certified
as green offices, according to standards established by
the student group Eco-Sense.
The New Student Programs office made the change
while preparing a series of first-ever sustainable new
student orientations. The office saved half a ton of
paper by passing out “digital folders” at the sessions,
instead of folders packed with flyers.
The University Library is the largest unit working to
curtail paper and energy use—no easy task considering
the place is packed day and night with people needing
to print and photocopy. To tackle the problem, the
library has switched its printers to print double-sided
by default. It also sells reusable canvas bags and water
bottles and promotes sustainability through a popular
green film series.
“Every year, Eco-Sense writes a policy. Last year,
we wrote a transportation policy, and this year we
wrote a sustainable purchasing policy,” said Casey
Roe, Eco-Sense policy director and two-time winner
of the prestigious Morris K. Udall Scholarship for
future environmental leaders.
The climate commitment is just one of the year’s
significant environmental initiatives undertaken by
the campus community.
22
to do something.”
Cubicles and meeting rooms across campus are
undergoing a green revolution, thanks to a new
program that helps offices become eco-certified.
With Kerwin’s signature, AU pledges to inventory
all its greenhouse gas emissions—including emissions
from electricity, heating, commuting, and air travel—
and update the inventory every two years. The campus
community must also develop an action plan for
becoming climate neutral.
Currently, AU recycles 43 percent of the nearly 1,894
tons of trash it produces each year. A new recycling
we have an obligation
To earn the green certification, offices must conserve
paper by, for example, using Blackboard to collect
student assignments or as a “cyber meeting place.”
President Neil Kerwin signing the American College and University
Presidents Climate Commitment
Roe crafted the program along with students in SIS
professor Paul Wapner’s Practical Environment class.
american university 2007–2008 annual report 23
Community
and Partnerships
success in washington and beyond
investing in our city
Before she hit the books, freshman Claire Brooks hit
the streets of Washington, trimming trees and picking
up trash at a park in northeast D.C. For Brooks, one of
the 475 first-year students who participated in the 17th
annual Freshman Service Experience (FSE), it was a
different sort of education.
For three days, the freshmen and 89 upperclassmen
fanned out across the city, working at 37 sites, from
day care centers and retirement homes to food banks
and nonprofits. By the week’s end, the students logged
more than 12,000 community service hours.
“It’s so easy to forget what’s beyond campus. So before
students even get comfortable here, we [send] them
out to see a different side of the city,” said Hannah
Hanson, FSE student coordinator. “We really hope
this experience keeps them involved with community
issues throughout their time at AU.”
D.C. mayor Adrian Fenty turned out for the closing
ceremonies, thanking the students for their hard work
and stressing that, despite its problems, Washington is
a wonderful place to call home for four years.
It’s a lesson not lost on Brooks.
“What [I noticed] the most was the willingness of
people around the park to make a difference,” she said.
“I liked seeing the community band together to make
their neighborhood a better place.”
At AU, there’s more to the educational experience
than textbooks and tests. Through service projects like
FSE, the D.C. Reads program, and alternative spring
breaks, AU students are working toward a better
Washington—and a better world.
american university 2007–2008 annual report 25
trying to raise $50,
Last year, faculty, staff, and students logged more
than 60,000 hours of community service. Frankie
Winchester and Sharon Wolfe are just two of the
AU staffers lending a helping hand.
and it’s grown into
something that just
Winchester and Wolfe began four years ago raising
funds to purchase a set of encyclopedias for youngsters
at Benjamin Orr Elementary School in southeast
Washington. Their effort has since blossomed into
a crusade to stock school library shelves, citywide,
with thousands of books.
keeps on giving.”
Photo by Jaqueline Sosa
Frankie Winchester
marketing fair draws d.c.
job seekers
Résumés in hand, more than 300 students from
universities throughout the D.C. area turned out
for the American Marketing Association’s spring
career fair at AU, the first of its kind sponsored
by the association’s Washington, D.C., chapter.
The landmark event featured 27 employers,
including National Public Radio, Booz Allen
Hamilton, and Under Armour.
“When we first visited Orr, they just had one small
bookcase,” said Wolfe. “We realized there was a huge
need there.”
The book lovers named themselves the Sherwood
Foresters and began soliciting donations from friends,
family, and coworkers. Children’s books were cleaned
up and sent straight to Orr, while other books,
including a large collection of law texts, were sold,
with the proceeds purchasing more children’s books.
The Sherwood Foresters have since donated more
than 4,000 books to Orr and now hand out $500 cash
grants to local educators. They are amazed at how far
they’ve come.
“We started out trying to raise $50, and it’s grown into
something that just keeps on giving,” said Winchester.
“It [was] a great way for the Kogod School of
Business to put itself on the map,” said Christie
Shahan, Kogod’s assistant director of employer
relations. “If you’re looking for marketing
students—or banking, finance, and accounting—
this is a place to find them.”
with low-income youth and in education
earned it a spot on the 2007
President’s Higher Education
Community Service Honor Roll,
the highest federal honor
a school can earn
for service learning and
civic engagement.
partners in the community
As a laboratory of learning, AU is a place where serious
questions are posed and solutions are vigorously
sought. Key partnerships with local institutions feed
that intellectual curiosity, enabling students and faculty
to give back as much as they take from Washington’s
vibrant, diverse community.
This year, the School of Communication (SOC)
partnered with the Washington Post to offer aspiring
young journalists a behind-the-scenes look at
the newspaper business. Eight SOC students
were admitted to the prestigious Washington Post
Semester Consortium, along with their peers from
Howard and George Washington universities.
Each week, the students met with top editors
and journalists, including Pulitzer Prize–winning
reporters, to learn how stories are developed and
discuss the future of newspapers. They also got the
scoop on how such projects as “Fixing D.C. Schools”
and the series on Walter Reed Hospital evolved.
Three Kogod students were on the committee that
helped plan the event, which paid dividends for
many who attended.
“Sporting equipment and a professional players
union, PR firms, research firms, financial firms,
journalism companies, entertainment companies
were all represented,” said Kogod MBA student
Matthew Curry. “A really nice job was done of
getting the varied fields together in one spot.”
Sharon Wolfe and Frankie Winchester
26
AU’s community service work
Photos by Hilary Schwab
gathering books for schools
“SOC loves this program,” said advisor Amy Eisman of
the course, which is part of the Post’s Young Journalists
Development Program. “It clearly sets us apart from
out-of-town competitors, who point to a semester in
Washington as a draw. Here we are, routinely ushering
our students on site through one of the most powerful
news products in the world. It is hard to beat that.”
WCL dean Claudio Grossman entertains guests at the WCL
Chocolate Bash.
funding legal public service jobs
Visitors to the Washington College of Law (WCL)
threw calorie-counting out the window for a very
worthy cause in February, during the second
annual Chocolate Bash.
The event raised $1,500 for the Equal Justice
Foundation, a student-to-student initiative that
awards grants to WCL students who work at
unpaid public service legal positions over
the summer.
“WCL has a long-standing and deeply rooted
commitment to public service,” said Charlene
Gomes, the school’s public interest coordinator.
“Yet with the cost of a legal education where it is,
many students graduate with educational debt in
the range of $80,000 to $120,000. Even those
drawn to public interest service often just cannot
afford to make that choice.”
About 7 to 11 percent of WCL graduates go on to
careers in public service, well above the national
average of 3 percent.
photo by Hilary Schwab
“We started out
WAMU’s Kojo Nnamdi and Johanna Gomes Speckhardt sample
chocolate desserts for a worthy cause.
american university 2007–2008 annual report 27
easing ex-offenders re-entry
into the community
At the School of Public Affairs (SPA), alumni-turnedprofessors Greg Hunt and Aaron Lucas are using their
decades of experience in probation, counseling, and
treatment to create opportunities for students interested
in community corrections.
This year, AU forged
a new partnership
and strengthened several existing
community
The two developed the Agencies in Cooperation for
Effective Services (ACES) program, which trains AU
students to help ex-offenders successfully transition
back into their communities throughout the
Washington area.
connections:
$1.85 million grant went to the School of
Education, Teaching, and Health (SETH) to train 180
new teachers in key content areas and to support
them through their challenging first years so they
will be effective and stay in teaching.
$1 million endowment from the Bernard Osher
Foundation was given to AU’s Osher Lifelong
Learning Institute (OLLI)—Washington’s oldest
learning community for adults. OLLI will use
the gift to expand its educational programming
for D.C.-area adults and senior learners.
$1.5 million grant from the U.S. Department of
State was awarded to the Center for Global Peace
to continue its work on human rights in Iraq. The
center will use the 18-month grant to help establish
a human rights commission and position it to work
effectively in Iraq’s challenging circumstances.
Diane Rehm
“top i0” for wamu 88.5 fm
WAMU’s The Diane Rehm Show was named
one of the 10 most powerful programs in public
radio last fall. According to Audience Research
Analysis, power is defined as the ability of a
program to draw listeners both to a station and
away from its competitors. The longtime public
affairs program—the only live, call-in talk show
on the list—has 1.7 million listeners on more
than 120 stations.
This year, WAMU also expanded its offerings,
with three new digital signals to accompany
its traditional analog one.
• 8
8.5-1 mirrors the standard FM broadcast—a
news, talk, and information format.
• 8
8.5-2 is a fully functional bluegrass, folk,
and Americana music station.
Offenders in Society, an ACES course offered every
semester within the Department of Justice, Law and
Society, gives undergraduate and graduate students a
glimpse at the inner workings of the criminal justice
system and helps them identify opportunities for change.
In the classroom, students learn how to interview, assess,
and counsel defendants and ex-offenders, including
those suffering from a mental illness or substance
abuse issues. They then can apply those skills at a local
correctional agency or community treatment program,
where they work at least 15 hours a week for 14 weeks.
Ann Kerwin reads to local children.
reading seuss at bancroft
and brightwood
Donning those unmistakable red and white
hats, 45 students, faculty, and staff shared
their favorite Dr. Seuss stories with area school
children in March to honor the beloved author’s
104th birthday.
The group, which included President Kerwin’s
wife, Ann, read Seuss classics to 500 students,
from preschool to second grade, at Bancroft
and Brightwood Elementary Schools in
northwest Washington.
“The kids were so appreciative and reading to
them reminded me how a couple hours of my day
can make the day for a five-year-old,” said student
volunteer Katie Kraft.
Students work one-on-one with clients at halfway houses,
juvenile institutions, state and federal probation offices,
and drug treatment centers, helping them build résumés
and access social services. Hunt hopes his students leave
SPA with something essential. Just as he and Lucas did
30 years ago, Hunt wants his students to leave with a
desire to make their communities a better, safer place.
• 8
8.5-3 airs public radio programming
not available on the flagship station,
such as extended BBC news and
NPR’s Talk of the Nation.
WAMU general manager Caryn Mathes said she
believes HD Radio will resonate with the public
“because it empowers listeners.”
“It provides so much more content, so much
more choice.”
Greg Hunt and Aaron Lucas
28
american university 2007–2008 annual report 29
kogod’s washington initiative
focuses on homelessness
Hope and a Home is a relatively small newcomer to
the crowded world of D.C. nonprofits, which is why
the help it received from the Washington Initiative
class at the Kogod School of Business was so critical.
face of the newseum
Last fall, eight undergrads worked with the
organization, which provides low-income housing
and life skills classes in Columbia Heights and Shaw,
to recruit more than 100 participants for the annual
homeless walkathon. The event raised more than
$100,000 for Hope and a Home.
Nine years ago, Sonya Gavankar had a fresh
AU degree and an entry-level job as a Newseum
production assistant.
Now, an animated version of Gavankar hosts
the News Trivia game on the museum’s Web site,
and the real-life Gavankar will be hosting live quiz
shows and other programs in the museum’s new
$450-million building on Pennsylvania Avenue.
“We designed it as a multimedia immersion,” said
Lynne Perri, one of three professors who led the trip.
“They’re all shooting video, taking stills, taking digital
audio, and writing. We think the backpack journalist,
the reporter who can do it all, is the future.”
Photo by Mike Unger
CBS Washington correspondent Bob Schieffer and former ABC
correspondent Jim Wooten speak with students at a political rally
in Concord, New Hampshire.
Washington Initiative is a service-learning course
open to all undergraduates interested in consulting
for a nonprofit group. In the past, the class has
assisted organizations dedicated to poverty, hunger,
and educational issues.
Stand in front of a camera as a TV reporter in
the interactive newsroom. Play a game on the
First Amendment. Click on the names at the
interactive memorial wall to fallen journalists.
Alumni and faculty worked on all of these.
learning to report breaking news
In addition to the wealth of service-learning
opportunities in Washington, students learn that
the entire world’s a classroom.
Photo courtesy of the Newseum
“This is such a unique experience,” said Anna
Frueh, a 2007 grad. “And we have our own little
AU family here.”
30
The students’ primary objective was to conduct
interviews and shoot video for short documentaries
that each team went on to produce over the course
of the semester. The topics ranged from the Obama
phenomenon to exploring veterans and the vote.
“We’re a small organization with a budget under $1
million,” said Ann Procter, director of development.
“The Help the Homeless walk is one of our biggest
fundraisers. The students have brought a real business
sense to us.”
Everywhere she goes in the Newseum, Gavankar
runs into other alumni and faculty who are key to
what visitors experience at the museum, which
opened in its new location after six years of
construction and planning.
Sonya Gavankar
Peter Suprenant. “I’m probably never going to be a
journalist; I’d like to be on the other side, working on
the campaigns. If I’m ever in an interview or a situation
where I have to be in front of the camera, now I know
what goes into it. It’s kind of on-the-job training.”
Photo by Mike Unger
“Although we hope students get something out of the
class, it’s just as much about AU giving something
back to the community,” said Hunt. “With thousands
of offenders returning to society every year, we are
providing a service in an area with a great need. And
I’m just proud AU students can be a part of that.”
In early January, 28 students from the School of
Communication (SOC) spent four days in the temporary
center of the political universe, working virtually aroundthe-clock to produce stories, videos, photos, and blog
entries on the New Hampshire primaries for Special
Topics in News Media: Covering the 2008 Presidential
Election. It was a feet-in-the-fire indoctrination.
“I’m a political science and communication major;
I’ve never done anything like this before,” said
SOC student Ted Roach shoots video of a mural depicting candidates from previous years outside the Merrimack Restaurant in Manchester, New Hampshire.
american university 2007–2008 annual report 31
From the
Vice President of Finance and Treasurer
If success is defined as a favorable outcome, this past year has been highly
successful at American University. As of April 30, 2008, the endowment
was valued at $405 million and our operating budget was $403 million.
Net assets increased by $24 million to $658 million, and total assets now
stand at $946 million.
Standard and Poor’s upgraded AU’s outlook from stable to positive and
affirmed our “A” rating while indicating that the positive outlook “reflects
the university’s consistently strong operating performance and improved
liquidity.” We are pleased with this recognition of AU’s strong financial
health, particularly in the current financial climate.
Reacting quickly to the unstable market conditions that developed in
the auction-rate securities market in December 2007, we converted $137
million of insured auction-rate securities to letter of credit–backed variable
rate demand bonds to alleviate the adverse market conditions and return
those bonds to a normal trading range.
Construction for the new 75,000-square-foot School of International Service complex started in March 2008.
It is designed as a LEED (Leadership in Energy and Environmental Design) Gold building with environmentally
sensitive features and is scheduled for completion in May 2010. Construction continues on the Kogod School
of Business expansion, which will be finished in January 2009. And planning continues on the expansion and
renovation of McKinley into a state-of-the-art building for the School of Communication.
We continue to focus on important initiatives, including emergency preparedness, sustainability or the “green”
initiative, and information technology. AU launched its Campus Connect Program to deliver emergency
information through handheld devices belonging to students, faculty, and staff. To reduce environmental impact,
we contracted to purchase power from wind and solar sources equal to approximately 25 percent of our electricity
consumption. In technology AU joined the Internet2 community, which provides such benefits as enhanced
distant learning opportunities for students.
These are only highlights of our many successes. We know the future will have challenges, and we must continue
to position AU for success—and by working together we will succeed.
report of independent auditors
To Board of Trustees of American University:
In our opinion, the accompanying balance sheets and the related statements of activities and of cash flows
present fairly, in all material respects, the financial position of American University (the University) at April
30, 2008 and 2007, and the changes in its net assets and its cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America. These financial statements
are the responsibility of the University’s management. Our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits 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 audits provide
a reasonable basis for our opinion.
As discussed in Note 8 to the financial statements, in fiscal year 2008 the University adopted Statement of
Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans, an amendment of Financial Accounting Standards Board (FASB) Statements No. 87,
88,106 and 132(R).
July 15, 2008
Sincerely,
Donald L. Myers
32
american university 2007–2008 annual report 33
balance sheets april 30, 2008 and 2007
statement of activities year ended april 30, 2008
Unrestricted net assets
(In thousands)
General
operations
Internally
designated
$ 331,090
$
Capital
Total
Temporarily
restricted
net assets
Permanently
restricted
net assets
$
$
Total
Operating revenues and support
1
(In thousands)
2008
2007
assets
2
Tuition and fees
Less scholarship allowances
880
$
-
$ 331,970
-
-
$331,970
(63,080)
(4,961)
-
(68,041)
-
-
(68,041)
(4,081)
-
263,929
-
-
263,929
3
Net tuition and fees
268,010
$ 31,430
$ 83,958
4
Federal grants and contracts
507
11,437
-
11,944
-
-
11,944
Accounts and loans receivable, net
25,159
23,645
5
3
Contributions receivable, net
23,350
21,770
Private grants and contracts
7,336
9,384
1,200
17,920
-
-
17,920
4
Prepaid expenses
239
915
6
Indirect cost recovery
2,553
-
-
2,553
-
-
2,553
5
Investments
465,163
469,616
7
Contributions
6,455
3,640
783
10,878
7,822
887
19,587
6
Deposits with trustees/others
23,227
29,227
8
Endowment income
725
5,566
-
6,291
-
-
6,291
7
Property, plant, and equipment, net
359,968
329,102
9
Investment income
4,522
2,868
2,277
9,667
-
-
9,667
8
Deferred financing costs
3,284
4,641
10
Auxiliary enterprises
54,417
100
9,838
64,355
-
-
64,355
9
Interest in perpetual trust
14,593
15,211
11
Other sources
1,109
750
27
1,886
-
-
1,886
10
Total assets
$ 946,413
$ 978,085
12
Net assets released
from restrictions
234
6,978
1,381
8,593
(8,593)
-
-
345,868
36,642
15,506
398,016
(771)
887
398,132
113,629
1,127
11,793
126,549
-
-
126,549
187
14,152
-
14,339
-
-
14,339
1
Cash and cash equivalents
2
liabilities and net assets
13
Liabilities:
11
Accounts payable and accrued liabilities
12
Repurchase of Series 2006 Bonds
13
Deferred revenue and deposits
14
Indebtedness
15
Swap agreements
16
17
18
$ 48,596
Operating expenses
$ 36,824
-
14
Instruction
18,331
18,154
15
Research
255,875
255,875
16
Public service
10,060
418
655
11,133
-
-
11,133
27,890
20,911
17
Academic support
31,648
7,923
5,241
44,812
-
-
44,812
Assets retirement obligations
4,000
3,956
18
Student services
29,550
245
5,241
35,036
-
-
35,036
Refundable advances from the U.S. government
7,992
7,911
19
Institutional support
53,468
2,080
6,552
62,100
-
-
62,100
288,159
343,631
20
Auxiliary enterprises
27,015
28
36,033
63,076
-
-
63,076
21
Facilities operations and
maintenance
32,965
-
(32,965)
-
-
-
-
Interest expense
10,511
-
(10,511)
-
-
-
-
309,033
25,973
22,039
357,045
-
-
357,045
36,835
10,669
(6,533)
40,971
887
41,087
(36,489)
8,496
27,993
-
-
Total liabilities
(74,525)
Net assets:
Unrestricted
19
General operations
20
Internally designated
5,932
5,586
22
125,517
111,454
23
322,301
25
Capital
21
Total operating
revenues and support
Designated funds functioning as endowments
24
329,971
22
Designated for plant
105,236
104,199
23
Total unrestricted
566,656
543,540
24
Temporarily restricted
12,761
13,198
25
Permanently restricted
78,837
77,716
26
Total net assets
27
Total liabilities and net assets
658,254
634,454
$ 946,413
$ 978,085
Total operating expenses
Total operating activities
Transfer among funds
(771)
-
-
Nonoperating items
26
Investment income
-
-
-
-
334
227
561
27
Other revenue
-
-
-
-
-
626
626
28
Realized and unrealized net
capital gains
-
-
(12,753)
(12,753)
-
(619)
(13,372)
-
-
(12,753)
(12,753)
334
234
(12,185)
346
19,165
8,707
28,218
(437)
29
Total nonoperating
activities
30
Change before effect of
SFAS No. 158
31
Effect of adoption of
SFAS No. 158
-
32
Change in net assets
346
14,063
8,707
23,116
5,586
111,454
426,500
543,540
13,198
5,932
$125,517
$ 435,207
$ 566,656
$ 12,761
See accompanying notes to financial statements.
33
Net assets at beginning of year
34
Net assets at end of year
$
(5,102)
-
(5,102)
1,121
-
-
(437)
$
28,902
(5,102)
1,121
23,800
77,716
634,454
78,837
$658,254
See accompanying notes to financial statements.
34
american university 2007–2008 annual report 35
statement of activities year ended april 30, 2007
statement of cash flows years ended april 30, 2008 and 2007
Unrestricted net assets
(In thousands)
General
operations
Internally
designated
Capital
Temporarily
restricted
net assets
Total
Permanently
restricted
net assets
2
Tuition and fees
1
$ 310,633
Less scholarship
allowances
(60,579)
$
868
$
-
$ 331,501
$
-
$
-
2007
cash flows from operating activities
Total
Operating revenues
and support
1
2008
(In thousands)
Increase in net assets
$
23,800
$
71,214
Adjustments to reconcile increase in net assets to net cash provided by
operating activities:
$331,501
(2,918)
-
(63,497)
-
-
(63,497)
2
Cumulative effect of change in accounting principle
5,102
-
3
Net tuition and fees
250,054
(2,050)
-
248,004
-
-
248,004
3
Effect of repurchase of long-term debt
1,130
2,982
4
Federal grants and contracts
509
13,388
-
13,897
-
-
13,897
4
Net realized and unrealized capital losses (gains)
6,393
(41,011)
5
Private grants and contracts
6,554
8,070
2,028
16,652
-
-
16,652
5
6
Indirect cost recovery
2,513
-
2,513
-
-
2,513
Change in fair value of interest rate swaps
6,979
10,908
Contributions
5,692
3,079
439
9,210
4,626
2,327
16,163
6
7
Depreciation, amortization and accretion
19,929
18,625
8
Endowment income
630
4,604
-
5,234
-
-
5,234
9
Investment income
4,958
3,194
4,920
13,072
-
-
13,072
10
Auxiliary enterprises
11
Other sources
12
Net assets released from
restrictions
13
Total operating
revenues and support
49,471
106
-
49,577
-
-
49,577
1,269
638
11
1,918
-
-
1,918
-
4,308
723
5,031
(5,031)
-
-
321,650
35,337
8,121
365,108
(405)
2,327
367,030
105,244
816
9,957
116,017
-
-
116,017
213
12,344
-
12,557
-
-
12,557
9,251
206
553
10,010
-
-
10,010
Operating expenses
14
Instruction
15
Research
16
Public service
Changes in assets and liabilities
7
Increase in accounts and university loans receivable, net
8
Decrease (increase) in contributions receivable, net
9
Decrease in prepaid expenses
10
Increase in accounts payable and accrued liabilities
11
Increase in deferred revenue, deposits and other refundable advances
12
Decrease in asset retirement obligation
13
14
(818)
(4,337)
(1,580)
1,688
676
1,096
6,106
4,760
258
2,434
(167)
Contributions collected and revenues restricted for long-term investment
Net cash provided by operating activities
-
(3,211)
(4,228)
64,597
64,131
cash flows from investing activities
17
Academic support
30,146
5,959
4,426
40,531
-
-
40,531
15
(234,190)
(147,177)
18
Student services
27,939
304
4,426
32,669
-
-
32,669
16
Purchases of investments
Proceeds from sales and maturities of investments
213,963
113,060
(29,611)
(23,274)
(1,277)
(697)
19
Institutional support
46,400
1,980
5,531
53,911
-
-
53,911
17
Auxiliary enterprises
27,185
-
30,424
57,609
-
-
57,609
Purchases of property, plant, and equipment
20
18
21
Facilities operations and
maintenance
Capitalized interest
19
Decrease (increase) in deposits with trustees/other, net
22
23
24
25
31,584
Interest expense
-
9,322
-
Total operating
expenses
287,284
21,609
Total operating
activities
(34,366)
13,728
Transfer among funds
(34,160)
(357)
(31,584)
(9,322)
-
-
-
-
-
-
-
-
14,411
323,304
-
-
323,304
(6,290)
41,804
2,327
33,017
(1,500)
1,500
(405)
-
(1,769)
(1,751)
1,073
1,964
-
23
Payments on indebtedness
24
Issuance of debt
25
Repurchase of Series 2006 Bonds
-
-
-
367
367
27
Realized and unrealized
net capital gains
-
-
29,000
29,000
-
1,103
30,103
29
Change before effect
on refunding of
long-term debt
30
Effect on refunding
of long-term debt
31
32
33
206
-
Change in net assets
Net assets at beginning
of year
Net assets at end of year
$
13,371
-
55,727
(2,982)
29,000
69,304
(2,982)
-
1,470
(405)
5,297
-
206
13,371
52,745
66,322
5,380
98,083
373,755
477,218
13,603
5,586
$111,454
$ 426,500
$ 543,540
$ 13,198
$
30,470
74,196
-
(62,182)
-
99,975
(74,525)
-
Proceeds from contributions restricted for
26
Investment in plant
27
Investment in endowment
1,544
785
1,667
3,443
28
Net cash provided by financing activities
(72,010)
42,234
29
Net (decrease) increase in cash and cash equivalents
(52,528)
19,526
(2,982)
30
Cash and cash equivalents at beginning of year
5,297
71,214
31
Cash and cash equivalents at end of year
72,419
563,240
77,716
$634,454
-
(405)
cash flows from financing activities
Student loans repaid
-
29,000
(86,839)
Student loans issued
-
-
(28,751)
22
Investment income
-
6,000
(45,115)
43,726
26
Total nonoperating
activities
Net cash used in investing activities
21
Nonoperating items
28
20
83,958
64,432
$
31,430
$
83,958
$
12,374
$
11,262
Supplemental disclosure of cash flow information
32
Cash paid during year for interest
See accompanying notes to financial statements.
36
american university 2007–2008 annual report 37
notes to financial statements april 30, 2008 and 2007
1. american university
Transfers consist primarily of funding designations for specific purposes and for future plant acquisitions and improvements.
American University (the University) is an independent, coeducational university located on an 85-acre campus in northwest
Washington, D.C. It was chartered by an Act of Congress in 1893 (the Act). The Act empowered the establishment and
maintenance of a university for the promotion of education under the auspices of the Methodist Church. While still
maintaining its Methodist connection, the University is nonsectarian in all of its policies.
Nonoperating activities represent transactions relating to the University’s long-term investments and plant activities, including
contributions to be invested by the University to generate a return that will support future operations, contributions to be
received in the future or to be used for facilities and equipment, and investment gains or losses.
American University offers a wide range of graduate and undergraduate degree programs, as well as nondegree study. There
are approximately 575 total faculty members in six academic divisions, and approximately 11,500 students, of which 6,300
are undergraduate students and 5,200 are graduate students. The University attracts students from all 50 states, the District
of Columbia, Puerto Rico, and nearly 150 foreign countries.
2. summary of significant accounting policies
basis of presentation
The financial statements of the University have been reported on the accrual basis of accounting.
classification of net assets
Net assets, revenues, gains, and losses are classified based on the existence or absence of donor-imposed restrictions.
Accordingly, net assets of the University and changes therein are classified and reported as follows:
Unrestricted—Net assets that are not subject to donor-imposed stipulations.
Temporarily Restricted—Net assets subject to donor-imposed stipulations that either expire by passage of time or that can
be fulfilled by actions of the University pursuant to those stipulations.
Permanently Restricted—Net assets subject to donor-imposed stipulations that they be maintained permanently
by the University.
Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed
restrictions. Contributions are reported as increases in the appropriate category of net assets. Expenses are reported as decreases
in unrestricted net assets. Gains and losses on investments are reported as increases or decreases in unrestricted net assets unless
their use is restricted by explicit donor stipulations or by law. Expirations of temporary restrictions recognized on net assets (i.e.,
the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as reclassifications
from temporarily restricted net assets to unrestricted net assets. Temporary restrictions on gifts to acquire long-lived assets are
considered met in the period in which the assets are acquired or placed in service.
Contributions, including unconditional promises to give, are recognized as revenues in the period received. Conditional
promises to give are not recognized until the conditions on which they depend are substantially met. Contributions of
assets other than cash are recorded at their estimated fair value at the date of gift. Contributions to be received after one
year are discounted at a rate commensurate with the risk involved. Amortization of the discount is recorded as additional
contribution revenue and used in accordance with donor-imposed restrictions, if any, on the contributions. Allowance is made
for uncollectible contributions based upon management’s judgment and analysis of the creditworthiness of the donors, past
collection experience, and other relevant factors.
The University follows a practice of classifying its unrestricted net asset class of revenues and expenses as general operations,
internally designated, or capital. Items classified as general operations include those revenues and expenses included in the
University’s annual operating budget. Items classified as capital include accounts and transactions related to endowment
funds and plant facilities and allocation of facilities operations and maintenance, depreciation, and interest expense. All
other accounts and transactions are classified as internally designated.
38
notes to financial statements april 30, 2008 and 2007
cash and cash equivalents
All highly liquid cash investments with maturities at date of purchase of three months or less are considered to be cash
equivalents. Cash equivalents consist primarily of money market funds. The carrying amount of cash equivalents approximates
fair value.
deposits with trustees/others
Deposits with trustees consist of debt service funds and the unexpended proceeds of certain bonds payable. These funds are
invested in short-term, highly liquid securities and will be used for construction of, or payment of debt service on, certain facilities.
investments
Equity securities with readily determinable fair values and all debt securities are recorded at fair value in the balance sheet and
the fair value of these investments is based upon values provided by the external investment managers or quoted market values.
In the limited cases where such values are not available, carrying value is used as an estimate of fair value. All cash and money
market funds in the investment accounts are recorded as investments. Endowment income included in operating revenues
consists of interest and dividends from investments of endowment funds. All realized and unrealized gains and losses from
investments of endowment funds are reported as nonoperating revenues. Investment income included in operating revenues
consists primarily of interest and dividends from investments of working capital funds and unexpended plant funds.
The fair value of alternative investments in limited partnerships is determined by using the University’s percentage of interest
in each of the limited partnerships and the partnership’s estimated fair value, as disclosed in such partnership’s audited financial
statements. The estimated fair value of a partnership is determined by the general partner based upon the fair value of the
partnership’s investments. These valuations necessarily involve assumptions and estimation methods which are uncertain,
and therefore the estimates could differ materially from actual results. The University reviews and evaluates the values by
the investment managers and agrees with the valuation methods and assumptions used in determining the fair value of the
alternative investments. Alternative investments are less liquid than the University’s other investments. The investments in these
limited partnerships, as well as certain mutual funds classified as equity securities, may include derivatives and certain private
investments which do not trade on public markets and therefore may be subject to greater liquidity risk.
Investment income is reported net of management fees and rental real estate property expenses.
property, plant, and equipment, net
Property, plant, and equipment are stated at cost on the date of acquisition or at estimated fair value if acquired by gift including
interest capitalized on related borrowings during the period of construction, less accumulated depreciation. Certain costs
associated with the financing of plant assets are deferred and amortized over the terms of the financing. Depreciation of the
University’s plant assets is computed using the straight-line method over asset’s estimated useful life, generally over 50 years for
buildings, 20 years for land improvements, 5 years for equipment, 10 years for library collections, and 50 years for art collections.
refundable advances from the u.s. government
Funds provided by the United States Government under the Federal Perkins Loan Program are loaned to qualified students and
may be reloaned after collections. Such funds are ultimately refundable to the government. Approximately 32% and 30% of
net tuition and fees revenue for the years ended April 30, 2008 and 2007, respectively was funded by federal student financial
aid programs (including loan, grant, and work-study programs).
american university 2007–2008 annual report 39
notes to financial statements april 30, 2008 and 2007
notes to financial statements april 30, 2008 and 2007
asset retirement obligations
new accounting pronouncements
The University records asset retirement obligations in accordance with Financial Accounting Standards Board (FASB)
Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143,
Accounting for Asset Retirement Obligations (FIN 47). FIN 47 requires that the fair value of the liability for the asset retirement
obligations (ARO) be recognized in the period in which it is incurred and the settlement date is estimable, even if the exact
timing or method of settlement is unknown. The ARO is capitalized as part of the carrying amount of the long-lived asset
retroactively to the time at which legal or contractual regulations created the obligation. The University’s ARO is primarily
associated with the cost of removal and disposal of asbestos, lead paint, and asset decommissioning.
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157 (SFAS 157), Fair Value
Measurements, which defines fair value measurements, establishes a framework for measuring fair value, and expands
disclosures about fair value measurements. SFAS 157 does not require any new fair value measurements but rather eliminates
inconsistencies in guidance found in various prior accounting pronouncements. SFAS 157 is effective for fiscal years beginning
after November 15, 2007, and the University is currently evaluating the impact of SFAS 157.
income taxes
The University has been recognized by the Internal Revenue Service as exempt from federal income tax under Section 501(c)(3)
of the U.S. Internal Revenue Code, except for taxes on income from activities unrelated to its exempt purpose. Such activities
resulted in no net taxable income in fiscal years 2008 and 2007.
In 2008, the University implemented the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes.
The University concluded there were no open positions that result in material unrecognized tax benefits.
3. accounts and loans receivable, net
Accounts and loans receivable, net, at April 30, 2008 and 2007, are as follows (in thousands):
2008
Accounts receivable
1
Student
2
Grants, contracts, and other
3
Accrued interest
4
functional expenses
The University has developed and implemented a system of allocating expenses related to more than one function. These
expenses are depreciation, interest and operations and maintenance of plant. Depreciation is allocated by individual fixed
assets to the function utilizing that asset. Interest is allocated based on the use of borrowed money in the individual
functional category.
The operations and maintenance of plant is divided into expenses used for the total institution not charged back to the
operating units, and those expenses that are charged to some units but not all units. Allocation was determined through
a study of departmental uses of the operations and maintenance budget within each category.
fair value of financial instruments
The carrying amount of cash and cash equivalents, accounts receivable, deposits with trustees, and accounts payable, and
accrued liabilities approximates fair value because of the short maturity of these financial instruments.
A reasonable estimate of the fair value of the loans receivable from students under government loan programs could not be
made because the loans receivable are not salable and can only be assigned to the U.S. government or its designees. The fair
value of loans receivable from students under University loan programs and real estate and other investments approximate
carrying value.
The carrying amount of indebtedness approximates fair value because these financial instruments bear interest at variable rates,
which approximate current market rates for loans with similar maturities and credit quality.
The University makes limited use of derivative financial instruments for the purpose of managing interest rate risks. Current
market pricing models are used to estimate fair values of interest rate swap agreements. The fair market value of all other
financial instruments in the financial statements approximates reported carrying value.
use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect: (1) the reported amounts of assets and liabilities; (2) disclosure of contingent
assets and liabilities at the date of the financial statements; and (3) the reported amounts of revenues and expenses during the
reporting period. Significant items subject to such estimates and assumptions are the value of non-traditional investments, the
asset retirement obligations and the postretirement benefit plan. Actual results could differ materially, in the near term, from
the amounts reported.
40
2007
$
Student loans
5
6
Less allowance for uncollectible accounts and loans
$
4,084
10,349
7,157
641
1,358
12,224
11,719
26,373
24,318
(1,214)
$
7
3,159
25,159
(673)
$
23,645
4. contributions receivable, net
As of April 30, 2008 and 2007, unconditional promises to give were as follows (in thousands):
2008
2007
Amounts due in:
8
Less than one year
9
One year to five years
10
Over five years
$
11
12
Less unamortized discount
13
Less allowance for doubtful accounts
14
$
7,461
$
6,743
17,334
17,201
997
228
25,792
24,172
(771)
(576)
(1,671)
(1,826)
23,350
$
21,770
Contributions receivable over more than one year are discounted at rates ranging from 3% to 6.5%, which approximates
the risk-free rate of return for the expected term of the promise to give at the date of gift. As of April 30, 2008 and 2007,
the University had also received bequest intentions and conditional promises to give of $18.0 million and $15.3 million,
respectively. These intentions to give are not recognized as assets. If the bequests are received, they will generally be restricted
for specific purposes stipulated by the donors, primarily endowments for faculty support, scholarships, or general operating
support of a particular department of the University. Conditional promises to give are recognized as contributions when the
donor-imposed conditions are substantially met.
Amortization of the discount is recorded as additional contribution revenue and is used in accordance with the donor-imposed
restrictions, if any, on the contributions. An allowance is made for uncollectible pledges based upon management’s judgment
and analysis of the creditworthiness of the donors, past collection experience, and other relevant factors.
american university 2007–2008 annual report 41
notes to financial statements april 30, 2008 and 2007
notes to financial statements april 30, 2008 and 2007
5. investments
As Previously
Reported
Investments by type at April 30, 2008 and 2007, are as follows (in thousands):
Cost
2008
1
Money market
2
U.S. government obligations
3
4
5
Equity mutual funds
6
$
5,800
Fair Value
2008
$
5,800
Cost
2007
$
Fair Value
2007
6,836
$
6,836
After Change
in Accounting
Principle
Reclassification
1
Investments
$
469,616
$
(18,905)
$
450,711
2
Property, plant and equipment, net
$
329,102
$
18,905
$
348,007
For the year ended April 30, 2008 and 2007, depreciation expense was approximately $19.5 and $18.3 million, respectively.
858
872
882
866
Fixed income funds
129,222
128,033
116,623
114,737
Corporate stocks
123,481
137,642
114,300
149,509
5,992
6,382
5,872
6,711
International equity funds
61,875
80,713
49,026
78,645
7
Alternative asset funds
51,239
86,438
47,370
72,888
8
Real estate funds
21,554
18,535
19,002
19,470
The University classifies its debt into two categories: core debt and special purpose debt. Core debt represents debt that will be
repaid from the general operations of the University and includes borrowings for educational and auxiliary purposes. Special
purpose debt represents debt that is repaid from sources outside of general operations and includes borrowings for buildings,
which house some administrative offices, along with rental space.
9
Real estate and other
748
748
19,954
19,954
Indebtedness at April 30, 2008 and 2007, consists of the following (in thousands):
$
10
400,769
$
465,163
$
379,865
$
469,616
7. indebtedness
2008
Investments in debt securities and equity securities consist primarily of investments in funds managed by external
investment managers.
At April 30, 2008 and 2007, the assets of endowments and funds functioning as endowments were approximately $405 million
and $396 million, respectively.
3
4
District of Columbia variable rate weekly demand revenue bonds,
The American University Issue Series 1985, maturing in 2015
$
48,900
$
48,900
District of Columbia variable rate weekly demand revenue bonds,
The American University Issue Series 1985A, maturing in 2015
12,000
12,000
District of Columbia University Revenue Bonds, American University
Issue Series 1999, maturing in 2028
21,000
21,000
6. property, plant, and equipment, net
5
Property, plant, and equipment and related accumulated depreciation and amortization at April 30, 2008 and 2007, are as
follows (in thousands):
6
District of Columbia University Revenue Bonds, American University
Issue Series 2003, maturing 2033
37,000
37,000
7
District of Columbia University Revenue Bonds, American University
Issue Series 2006, maturing 2036 (see below)
99,975
99,975
218,875
218,875
2008
11
Land and improvements
12
Buildings
13
$
46,263
2007
$
39,192
8
Total core debt
410,268
384,105
Equipment
80,635
78,055
9
Construction in progress
33,826
23,829
Note payable, variable rate, due in full in 2021
22,000
22,000
14
10
Library and art collections
63,332
58,801
Note payable, variable rate, due in full in 2020
15,000
15,000
15
11
634,324
583,982
37,000
37,000
12
(274,356)
(254,880)
255,875
255,875
13
329,102
Less repurchase of Series 2006 Bonds
14
Total indebtedness
16
17
18
Accumulated depreciation and amortization
$
359,968
$
Construction in progress at April 30, 2008 and 2007, relates to building improvements and renovations.
Prior to fiscal 2008, the University recorded approximately $18,905,000 of real estate properties as investments in the balance
sheet on a cost basis. At May 1, 2007, management performed additional analysis and reclassified these properties to property,
plant and equipment in the accompanying balance sheet to reflect the intended use of the assets. If these reclassifications were
made as of April 30, 2007, then the effect would have been as follows (in thousands):
42
2007
Core Debt
Special Purpose Debt
Total special purpose debt
Total indebtedness, excluding repurchase of Series 2006 Bonds
(74,525)
$
181,350
$
255,875
In February 2008, the Board of Trustees authorized management to proceed with the negotiation of terms and financing for
the conversion of the Series 2003 and Series 2006 insured auction-rate bonds to letter of credit-backed variable rate demand
bonds. This was necessitated by the poor market performance of the Series 2003 and Series 2006 auction rate bonds. While the
University was in the process of converting the bonds, market conditions continued to deteriorate. On March 14, 2008, the SEC
issued a statement allowing issuers of auction rate securities to bid on their own auction rate securities. Between April 9, 2008
and May 21, 2008, the University participated in six auctions for the Series 2006A Bonds, purchasing a total of $38,625,000
of the Bonds, and seven auctions for the Series 2006B Bonds, purchasing a total of $41,150,000 of the Bonds sharply reducing
interest rates to SIFMA-like levels. As of April 30, 2008, the University had purchased $74,525,000 of the Series 2006A and
Series 2006B Bonds, which was recorded as a reduction to indebtedness in the accompanying statement of financial position.
american university 2007–2008 annual report 43
notes to financial statements april 30, 2008 and 2007
notes to financial statements april 30, 2008 and 2007
On May 20, 2008, the University converted $37,000,000 of the Series 2003 Bonds to variable rate demand bonds, and
on May 29, 2008, the University converted $99,975,000 of the Series 2006 Bonds to variable rate demand bonds. Both
series were supported by a letter of credit from Bank of America.
The principal balance of bonds and notes payable outstanding as of April 30, 2008 are due as follows (in thousands):
Year ending April 30:
1
2015
2
2020
15,000
3
2021
22,000
4
2028
21,000
5
2033
37,000
6
2036
25,450
7
$
$
60,900
181,350
district of columbia bonds payable
The Series 1985 and Series 1985A bonds are secured by deeds of trust on certain of the University’s real property and by bond
insurance policies. The bond insurance policies allow the bond trustee to pay the principal and interest on the bonds and to
pay the purchase price of the bonds, which are not remarketed to the extent that monies are not available from other sources.
Interest on both of these bond issues is at a variable rate. The variable rate was effectively changed to a 4.6% fixed rate by the
University entering into an interest rate swap agreement with Ambac Assurance Corporation.
The Series 1999 bonds bear interest at a variable rate and are general unsecured obligations of the University. The variable
rate was effectively changed to a 4.1% fixed rate by the University entering into an interest rate swap agreement with Morgan
Stanley Capital Services. The proceeds from the bonds were used to repay a mortgage note prior to its scheduled maturity.
The Series 2003 bonds bear interest at a variable auction rate and are general unsecured obligations of the University. The
proceeds were used to fund construction and renovation projects relating to the Katzen Arts Center and Greenburg Theatre.
The Series 2006 bonds bear interest at a variable auction rate and are general unsecured obligations of the University. The
proceeds were used to advance refund the Series 1996 bond issue, thus reducing the University’s overall interest costs, and to
fund construction and renovation projects including Nebraska Hall and the School of International Service building. The effect
of the refunding of the Series 1996 bonds is a nonoperating charge of $2,981,903 which includes the write-off of unamortized
bond issuance costs and original issue discount.
notes payable
In 2003, the University issued a $15 million note payable to replace a 1998 note. The note is payable in full in April 2020. The
interest rate is LIBOR plus 0.45%, payable monthly.
four interest rate swap agreements have a total notional principal amount of approximately $104 million. These agreements
effectively change the University’s interest rate to a 4.6% fixed rate for Series 1985 and Series A bonds, a 4.1% fixed rate for the
Series 1999 bonds, and a 5.54% fixed rate for the 2001 note payable. The interest rate swap agreements mature at the time the
related notes mature. The University is exposed to credit loss in the event of nonperformance by the other parties to the interest
rate swap agreements. However, the University does not anticipate nonperformance by the counter parties.
In December 2005, the University also entered into forward-starting interest rate swap agreements with Morgan Stanley Capital
Services for interest rate swaps with a total notional principal amount of approximately $113 million. These agreements fixed
the University’s interest rate at 5.26% on $62,825,000 of refunding bonds beginning October 1, 2006, 4.38% on $30,000,000
of new money bonds beginning October 1, 2006, and 4.46% on $20,000,000 of new money bonds beginning October 1, 2007.
The accumulated unrealized losses that were recognized for these swaps as of April 30, 2008 and 2007, were $6,979,000 and
$10,909,000 respectively, and are included in realized and unrealized net capital gains in the accompanying statement of activities.
8. employee benefit plans
Eligible employees of the University may participate in two contributory pension and retirement plans, one administered by
the Teachers Insurance and Annuity Association and College Retirement Equities Fund and the other administered by Fidelity
Investments. Under these plans, contributions are fully vested and are transferable by the employees to other covered employer
plans. Participating employees contribute a minimum of 1% up to a maximum of 5% of their base salary. The University
contributes an amount equal to twice the employee’s contribution.
The University’s contribution to these plans was approximately $10.5 million and $10.0 million for the years ended April 30,
2008 and 2007, respectively.
postretirement healthcare plan
The University provides certain healthcare benefits for retired employees. The Plan is contributory and requires payment of
deductibles. The University’s policy is to fund the cost of medical benefits on the pay-as-you-go basis. The plan’s measurement
dates are April 30, 2008, and January 31, 2007, respectively.
Net periodic postretirement benefit cost for the years ended April 30, 2008 and 2007, includes the following components
(in thousands):
2008
1
Service cost—benefits earned during the year
2
Interest cost on accumulated benefit obligation
3
4
5
$
430
2007
$
448
1,196
1,167
Recognized net actuarial (gain)/loss
224
293
Amortization of transition (asset)/obligation
667
667
Net periodic benefit cost
$
2,517
$
2,575
In 2001, the University issued a $22 million note for the purchase of a building. The note payable bears interest at a variable
rate. The University is obligated to make monthly interest payments only on the unpaid principal amount of the loan, which is
payable in full on September 7, 2021. The variable rate was effectively changed to a 5.54% fixed rate by the University entering
into an interest rate swap agreement with Morgan Stanley Capital Services.
interest rate swaps
The University has entered into interest rate swap agreements to reduce the impact of changes in interest rates on its floating
rate long-term debt. At April 30, 2006, the University had outstanding interest rate swap agreements with Ambac Assurance
Corporation, a AAA-rated bond insurance company, for its Series 1985 and Series A bonds, and an interest rate swap agreement
with Morgan Stanley Capital Services, an A+-rated investment banker, on its Series 1999 bonds and 2001 note payable. The
44
american university 2007–2008 annual report 45
notes to financial statements april 30, 2008 and 2007
notes to financial statements april 30, 2008 and 2007
The following table sets forth the postretirement benefit plan’s funded status and the amount of accumulated postretirement
benefit plan costs for the years ended April 30, 2008 and 2007 (using a measurement date of April 30):
2008
(in thousands)
The amounts expected to be amortized from unrestricted net assets into net periodic benefit cost for the year ended
April 30, 2009, are as follows:
2007
Change in Accumulated Postretirement Benefit Obligation:
1
Accumulated postretirement benefit obligation at beginning
of year
$
20,691
$
Service cost
430
448
3
Interest cost
1,196
1,167
4
Net actuarial (gain)/loss
5
Plan participants’ contributions
532
-
6
Effect of change in measurement date
407
-
7
8
Benefits paid
Accumulated postretirement benefit obligation at end of year
17,548
(1,331)
$
Fair value of plan assets at beginning of year
10
Plan participants’ contributions
11
Employer contributions
12
Benefits paid
13
Fair value of plan assets at end of year
$
$
-
$
-
532
-
1,747
1,331
(2,279)
(1,331)
-
$
-
Reconciliation of Funded Status:
Funded status
15
Unamortized transition obligation
N/A
(4,005)
16
Unrecognized net actuarial (gain)/loss
N/A
(5,639)
17
Postretirement benefit liability
$
$
(17,548)
(17,548)
2008
$
Net actuarial (gain)/loss
Transition (asset)/obligation
20
Amounts included in unrestricted net assets
$
(11,047)
2007
$
$
1,931
N/A
3,171
N/A
5,102
N/A
The change in unrestricted net assets for the year ended April 30, 2008, is as follows (in thousands):
21
46
Effect of adoption of recognition and measurement
date provisions of FASB Statement No. 158
Total
667
$
679
The weighted discount rate used in the actuarial valuation at the April 30, 2008, and January 31, 2007, measurement dates
are as follows:
2008
2007
4
End of year benefit obligation
6.40%
6.00%
5
Net periodic postretirement benefit cost
6.40%
6.00%
An 8% healthcare cost trend rate was assumed for fiscal 2008, with the rate decreasing 1% each year to an ultimate rate of 5%
in fiscal year 2011, and thereafter. An increase in the assumed healthcare cost trend rate of 1% would increase the net periodic
postretirement benefit cost by approximately $142,000 and $165,000 for 2008 and 2007, respectively, and the accumulated
postretirement benefit obligation at April 30, 2008 and 2007, by approximately $815,000 and $1.2 million, respectively.
A decrease in the assumed healthcare cost trend rate of 1% would decrease the net periodic postretirement benefit cost by
approximately $147,000 and $138,000 for 2008 and 2007, respectively, and the accumulated postretirement benefit obligations
at April 30, 2008 and 2007 by approximately $719,000 and $1.4 million, respectively.
Benefits were paid during the fiscal year 2008 and 2007 in the amounts of approximately $1,747,000 and $1,331,000,
respectively.
(20,691)
Amounts not Recognized in Net Periodic Benefit Cost:
19
3
12
The expected contributions by the University to the plan are as follows:
14
18
Transition (asset)/obligation
$
20,691
Change in Fair Value of Plan Assets:
9
2
(621)
(2,279)
$
Net actuarial (gain)/loss
21,028
2
(3,429)
1
2008
2007
(5,731)
N/A
Net of Medicare
Part D Subsidy
Without Medicare
Part D Subsidy
Year ending April 30
6
2009
$1,273,710
$1,460,638
7
2010
1,347,238
1,561,844
8
2011
1,422,025
1,654,858
9
2012
1,446,229
1,696,371
10
2013-2018
8,795,721
10,639,884
In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 158, Employer’s Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statement No. 87, 88, 106 and 132R. SFAS No.158
requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or
liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes
occur through changes in unrestricted net assets. SFAS No. 158 also requires an employer to measure the plan’s funded status
as of the same date as the employer’s fiscal year end. The 2008 adoption of SFAS No. 158 resulted in the University recording
american university 2007–2008 annual report 47
notes to financial statements april 30, 2008 and 2007
notes to financial statements april 30, 2008 and 2007
a cumulative effect of change in accounting principle of $5,102,000 which had the following incremental effects on the
University’s balance sheet as of April 30, 2008 (in thousands):
Permanently restricted net assets were held, the income of which will benefit the following at April 30, 2008 and 2007
(in thousands):
2008
Before
Application of
SFAS No. 158
Incremental
Effect
After Application
of SFAS No. 158
1
Permanent endowment funds, for scholarships
and related academic activity
2
17,548
Interest in trust assets
3
5,102
288,159
Student loans
4
571,758
(5,102)
566,656
Total net assets
663,356
(5,102)
658,254
Total liabilities and net assets
946,413
1
Postretirement liability
$
12,446
2
Total liabilities
283,057
3
Unrestricted net assets
4
5
$
5,102
$
-
946,413
9. expenses
2009
6
2010
8,865
7
2011
8,675
116,017
8
2012
9,022
2013
2,277
Instruction
7
Research
14,339
12,557
9
8
Public service
11,133
10,010
10
9
Academic support
44,812
40,531
10
Student services
35,036
32,669
231,869
211,784
Institutional support
13
62,100
53,911
Auxiliary enterprises
14
63,076
$
357,045
323,304
2008
Gifts received for construction of facilities
17
48
$
4,856
2007
$
7,905
$
12,761
contingencies
Amounts received and expended by the University under various federal programs are subject to audit by governmental
agencies. In the opinion of the University’s administration, audit adjustments, if any, will not have a significant effect on the
financial position, changes in net assets, or cash flows of the University.
Temporarily restricted net assets consist of the following at April 30, 2008 and 2007 (in thousands):
16
37,625
The University has a line of credit with the Student Loan Corporation totaling $50 million. As of April 30, 2008 and 2007,
the University had no amounts outstanding under this line of credit.
10. net assets
Unspent contributions and related investment income
for instruction and faculty support
$
8,786
At April 30, 2008 and 2007, commitments of the University under contracts for construction of plant facilities amounted
to approximately $41.0 and $5.8 million, respectively.
For the years ended April 30, 2008 and 2007, the University’s fundraising expenses totaled approximately $10,217,000 and
$9,220,000, respectively, and are included in institutional support in the accompanying statements of activities.
15
$
12. commitments
57,609
$
77,716
Rent expense in both 2008 and 2007 was approximately $ 8.4 million.
Supporting services
12
4,292
$
Year ending April 30:
6
Total program services
15,103
The University has two leases for buildings that are used for student housing and office space. The lease for the building used
for student housing expires in 2012. The lease for the building used for office space expires in 2010 and lease payments are at
below market rates. The minimum lease payments under these agreements are as follows (in thousands):
Program services
11
58,321
11. operating lease
2007
$
$
4,655
78,837
5
2008
126,549
59,697
14,485
$
For the years ended April 30, 2008 and 2007, the University’s program services and supporting services were as follows (in
thousands):
$
$
2007
8,678
4,520
$
13,198
The University is a party to various litigation arising out of the normal conduct of its operations. In the opinion of the
University’s administration, the ultimate resolution of these matters will not have a materially adverse effect on the University’s
financial position, changes in net assets or cash flows.
During 2002, the University was named as a defendant in several lawsuits related to claims arising from ongoing investigation
into environmental matters. These matters date back to military activities conducted on and around the University’s campus
during World War I. As of June 2007, all of the lawsuits related to this issue have been successfully resolved, either through
settlement or dismissal actions. The remediation and investigative work of the Department of Defense is anticipated to
continue through 2011.
american university 2007–2008 annual report 49
notes to financial statements april 30, 2008 and 2007
13. related parties
Members of the University’s Board of Trustees and their related entities contributed approximately $3.6 million and $2.2
million during the years ended April 30, 2008 and 2007, respectively, which is included in contribution revenue in the
accompanying statements of operations. Of this amount, approximately $2.1 million and $1.4 million were included in
pledges receivable at April 30, 2008 and 2007, respectively, in the accompanying balance sheets.
university administration
Cornelius M. Kerwin, President
Scott A. Bass, Provost
Teresa Flannery, Executive Director, University
Communications and Marketing
Gail S. Hanson, Vice President of Campus Life
Mary E. Kennard, Vice President and General Counsel
Thomas J. Minar, Vice President of Development
and Alumni Relations
Donald L. Myers, Vice President of Finance and Treasurer
David E. Taylor, Chief of Staff
Haig Mardirosian, Dean of Academic Affairs
Richard M. Durand, Dean, Kogod School of Business
Louis W. Goodman, Dean, School of International Service
Claudio M. Grossman, Dean, Washington College of Law
Larry Kirkman, Dean, School of Communication
William M. LeoGrande, Dean, School of Public Affairs
Kay J. Mussell, Dean, College of Arts and Sciences
Linda Bolden-Pitcher, University Registrar
William A. Mayer, University Librarian
Nondiscrimination Notice
American University does not discriminate on the basis of race, color, religion, national
origin, sex, age, marital status, personal appearance, sexual orientation, gender identity and
expression, family responsibilities, political affiliation, disability, source of income, place of
residence or business, and certain veteran status in its programs and activities. The following
persons, located at 4400 Massachusetts Avenue, NW, Washington, DC 20016, have been
designated to handle inquiries regarding the university’s nondiscrimination policies:
board of trustees
Gary M. Abramson,* Chairman
Thomas A. Gottschalk, Vice Chair
Gina F. Adams*
Stephanie M. Bennett-Smith
Richard Beyer
Patrick Butler*
Edward R. Carr*
Jack C. Cassell*
Gary D. Cohn*
Pamela M. Deese*
Jerome King Del Pino
David R. Drobis*
Marc N. Duber*
Fuad El-Hibri
Hani M. S. Farsi*
C. A. Daniel Gasby
Gisela B. Huberman*
C. Nicholas Keating Jr.*
Cornelius M. Kerwin*
Margery Kraus*
Charles H. Lydecker*
Robyn Rafferty Mathias*
Alan L. Meltzer*
Regina L. Muehlhauser*
Arthur J. Rothkopf
Mark L. Schneider
John R. Schol
Neal A. Sharma*
Stephen Silvia
Jeffrey A. Sine*
David Teslicko*
Gary R. Weaver*
* alumna or alumnus of American University
Dean of Students, 202-885-3300
Executive Director for Human Resources, 202-885-2451
Provost, 202-885-2127
Produced by University Publications, American University
Suzanne Bechamps, Editor
Adrienne Frank, Sally Acharya, Mike Unger, Writers
Natalie Taylor, Designer
Jeff Watts, Photographer
UP09-005
50
american university 2007–2008 annual report 51
By using environmentally friendly paper
and processes for this brochure, American
University saved the following resources:
trees
preserved
wastewater
flow saved
energy saved
solid waste
not generated
greenhouse
gases prevented
36
13,125
gallons
25 million BTUs
1685 pounds
3162 pounds
sources: www.epa.gov and www.environmentaldefense.org
4400 massachusetts avenue, nw
washington, dc 20016