Xavier University
Financial Statements as of and for the
Years Ended June 30, 2015 and 2014, and
Independent Auditors’ Report
INDEPENDENT AUDITORS’ REPORT
Board of Trustees
Xavier University
Cincinnati, Ohio
We have audited the accompanying financial statements of Xavier University (the “University”) which
comprise the statements of financial position as of June 30, 2015 and 2014, and the related statements of
activities and cash flows for the years then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the University’s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the University’s internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of Xavier University as of June 30, 2015 and 2014, and the changes in its net assets and
its cash flows for the years then ended in accordance with accounting principles generally accepted in the
United States of America.
September 18, 2015
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XAVIER UNIVERSITY
STATEMENTS OF FINANCIAL POSITION
AS OF JUNE 30, 2015 AND 2014
(Dollars in thousands)
2015
2014
ASSETS
CASH
$ 18,014
$ 24,352
SHORT-TERM INVESTMENTS
7,537
3,032
ACCOUNTS AND LOANS RECEIVABLE:
Student accounts receivable—less allowance for doubtful accounts of $535 in 2015 and $650 in 2014
Student loans receivable—less allowance for doubtful loans of $421 in 2015 and $405 in 2014
3,938
4,206
5,337
4,345
ACCRUED INCOME RECEIVABLE
1,135
1,834
55,063
35,966
7,622
8,706
244,976
229,780
17,750
4,912
271,171
278,682
$ 631,412
$ 596,946
$
$
CONTRIBUTIONS RECEIVABLE—Net (Note 5)
PREPAID EXPENSES, DEFERRED CHARGES—Other assets
INVESTMENTS (Note 6)
CONSTRUCTION IN PROGRESS
INVESTMENT IN PLANT—Net of accumulated depreciation (Note 8)
TOTAL
LIABILITIES AND NET ASSETS
LIABILITIES:
Accounts payable and accrued expenses
Advance payments and deposits
Accrued compensation costs
Accrued postretirement benefit costs (Note 11)
Deferred revenue
Interest rate swap
Indebtedness (Note 9)
Refundable advances (Note 2)
Total liabilities
NET ASSETS:
Unrestricted
Temporarily restricted (Note 3)
Permanently restricted (Note 4)
Total net assets
TOTAL
See notes to financial statements.
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8,801
6,801
7,991
4,926
7,226
18,105
197,027
3,776
7,273
1,828
7,870
4,485
7,749
15,921
190,605
3,753
254,653
239,484
179,606
108,258
88,895
197,543
74,004
85,915
376,759
357,462
$ 631,412
$ 596,946
XAVIER UNIVERSITY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2015
(Dollars in thousands)
Unrestricted
OPERATING REVENUES:
Tuition and fees
Less student aid
$ 171,871
(69,790)
Net tuition
102,081
Sales and services of auxiliary enterprises
Less student aid
32,646
(2,753)
Net auxiliary enterprises
Temporarily
Restricted
$
-
Permanently
Restricted
$
-
$ 171,871
(69,790)
-
-
102,081
-
-
29,893
Government grants and contracts
Private gifts, grants and contracts
Endowment income used in operations
Investment return—operating
Other sources
Net assets released from restriction
Total operating expenses
Increase in net assets from operations
-
2,083
16,900
5,108
1,291
16,779
161,425
12,710
-
174,135
(8,622)
-
-
4,088
-
174,135
60,445
1,200
10,240
29,818
27,145
13,698
22,870
-
-
60,445
1,200
10,240
29,818
27,145
13,698
22,870
165,416
-
-
165,416
-
8,719
4,631
NONOPERATING ACTIVITIES:
Contributions and change in contributions receivable
for nonoperating purposes
Contributions to endowment funds
Investment return—net of amounts used in operations
Actuarial change in annuity liability
Actuarial change in post-retirement health care benefits
Net assets released from restriction and other
Change in fair value of interest rate swap agreements
Net asset decrease representing interest and other costs
on early redemption of bonds payable (Note 9)
Loss on disposal of property
507
404
(9,879)
(2,184)
(11,355)
(61)
Increase (decrease) in net assets from nonoperating activities
29,893
7,801
4,909
-
170,047
OPERATING EXPENSES:
Instruction
Public service
Academic support
Student services
Institutional support
Operation and maintenance of plant
Auxiliary enterprises
32,646
(2,753)
2,083
9,099
199
1,291
16,779
8,622
Total operating revenues
Total
4,088
24,434
40
(3,537)
(650)
9,879
-
2,809
171
-
24,434
2,849
(2,859)
(650)
404
(2,184)
(11,355)
(61)
(22,568)
30,166
2,980
10,578
INCREASE (DECREASE) IN NET ASSETS
(17,937)
34,254
2,980
19,297
NET ASSETS—Beginning of year
197,543
74,004
85,915
357,462
$ 179,606
$ 108,258
$ 88,895
$ 376,759
NET ASSETS—End of year
See notes to financial statements.
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XAVIER UNIVERSITY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2014
(Dollars in thousands)
Unrestricted
OPERATING REVENUES:
Tuition and fees
Less student aid
$ 166,296
(63,756)
Net tuition
Net auxiliary enterprises
Government grants and contracts
Private gifts, grants and contracts
Endowment income used in operations
Investment return—operating
Other sources
Net assets released from restriction
-
-
102,540
29,895
(2,353)
-
-
29,895
(2,353)
27,542
-
-
27,542
Total operating expenses
Increase in net assets from operations
NONOPERATING ACTIVITIES:
Contributions and change in contributions receivable
for nonoperating purposes
Contributions to endowment funds
Investment return—net of amounts used in operations
Actuarial change in annuity liability
Actuarial change in post-retirement health care benefits
Net assets released from restriction
Change in fair value of interest rate swap agreements
Loss on disposal of property
Increase in net assets from nonoperating activities
INCREASE IN NET ASSETS
NET ASSETS—Beginning of year
NET ASSETS—End of year
See notes to financial statements.
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$
1,850
7,826
258
823
16,503
4,756
4,534
-
-
1,850
12,582
4,792
823
16,503
157,342
9,290
-
166,632
(7,410)
-
-
1,880
-
166,632
164,752
OPERATING EXPENSES:
Instruction
Public service
Academic support
Student services
Institutional support
Operation and maintenance of plant
Auxiliary enterprises
-
Total
$ 166,296
(63,756)
7,410
Total operating revenues
$
Permanently
Restricted
-
102,540
Sales and services of auxiliary enterprises
Less student aid
Temporarily
Restricted
59,878
1,186
10,383
27,142
28,693
12,323
22,727
-
-
59,878
1,186
10,383
27,142
28,693
12,323
22,727
162,332
-
-
162,332
-
4,300
2,420
1,880
5,769
418
982
(532)
(64)
3,948
47
12,942
(65)
(982)
-
53
10,328
80
-
4,001
10,375
18,791
(65)
418
(532)
(64)
6,573
15,890
10,461
32,924
8,993
17,770
10,461
37,224
188,550
56,234
75,454
320,238
$ 197,543
$ 74,004
$ 85,915
$ 357,462
XAVIER UNIVERSITY
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2015 AND 2014
(Dollars in thousands)
2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Change in net assets
Adjustments to reconcile change in net assets to net cash provided by operating activities:
Depreciation
Amortization of bond premium and discount
Loss on disposal of property and equipment
Provision for losses on accounts receivable
Provision for losses on student loans
Provision for losses on contributions receivable
Decrease in accounts receivable
(Increase) in contributions receivable
Decrease in accrued income receivable
(Increase) in prepaid expenses, deferred charges and other assets
Increase in accounts payable and other accrued liabilities
Increase (decrease) in deferred revenue
Net asset decrease representing interest and others costs on early redemption of bonds payable
Contributions to endowment and similar funds
Increase in fair value of interest rate swap agreements
Change in net realized and unrealized losses and (gains) on investments
$ 19,297
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of investments
Purchases of investments
Purchases of property and equipment
Student loans issued
Student loans repaid
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Contributions to endowment and similar funds
Proceeds from the issuance of debt
Redemption of bonds payable
Payments of bonds and notes payable
Grants (returned) advanced
Net cash (used in) provided by financing activities
2014
$ 37,224
13,505
139
61
(115)
16
(246)
1,514
(18,851)
699
(50)
5,351
(523)
11,355
(6,092)
2,184
2,810
13,799
123
64
(100)
13
(1,132)
22
(2,519)
623
(2,334)
287
511
(3,173)
532
(20,462)
31,054
23,478
104,820
(127,329)
(17,180)
(586)
709
153,535
(166,048)
(6,249)
(606)
730
(39,566)
(18,638)
6,092
126,042
(125,878)
(4,105)
23
3,173
(3,955)
15
2,174
(767)
NET CHANGE IN CASH
(6,338)
4,073
CASH—Beginning of year
24,352
20,279
CASH—End of year
$ 18,014
$ 24,352
SUPPLEMENTAL DISCLOSURES:
Property and equipment in accounts payable
$
4,136
$
2,423
$
8,208
$
9,107
Interest paid
See notes to financial statements.
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XAVIER UNIVERSITY
NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED JUNE 30, 2015 AND 2014
(Dollars in thousands)
1.
ORGANIZATION
Xavier University (the “University”) is a not-for-profit Jesuit educational institution located on a
190-acre campus in Cincinnati, Ohio. The University was founded in 1831 and today is a coeducational
institution with more than 7,000 students in undergraduate and graduate programs. The University is a
qualifying organization under Section 501(c)(3) of the Internal Revenue Code.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation—The financial statements of the University, which are presented on the accrual
basis of accounting, have been prepared to focus on the organization as a whole and to present balances
and transactions in accordance with generally accepted accounting principles.
The University controls several not-for-profit entities that hold title to various parcels of land on which
the University resides. The University fully funds these entities and any related property acquisitions,
improvements and expenses. The University is sole controlling entity of these entities and consolidates
the entities’ activities into the University’s financial statements.
Net assets, revenues, gains and losses are classified based on the existence or absence of donor-imposed
restrictions. Accordingly, net assets and changes therein are classified as follows:
Unrestricted—Net assets that are not subject to donor-imposed stipulations.
Temporarily Restricted—Net assets subject to donor-imposed stipulations that may or will be met either
by actions of the University and/or the passage of time.
Permanently Restricted—Net assets subject to donor-imposed stipulations that they will be maintained
permanently by the University. Generally, the donors of these assets permit the University to use all or
part of the income earned on related investments for general or specific purposes.
Revenues from sources other than contributions are reported as increases in unrestricted net assets unless
use of the related assets is limited by imposed restrictions. Contributions are reported as increases in the
appropriate category of net assets. Expenses are reported as decreases in unrestricted net assets.
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 net assets released from
restriction on the statements of activities. 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.
Realized and unrealized gains and losses on investments are reported as increases or decreases in
unrestricted net assets unless their use is restricted by explicit donor stipulations or by law. The Ohio
Uniform Prudent Management of Institutional Funds Act (UPMIFA) allows the Board of Trustees to
appropriate a percentage of the net appreciation on endowment accounts as is prudent considering the
University’s present and anticipated financial requirements, expected total return on investments, price
level trends and general economic conditions, unless directed by the donor’s intent. The endowment
spending policy is based on a spending rate established by the University’s Board of Trustees. This rate
represents the expected long-term return on endowment investments less an allowance for the
preservation and growth of principal.
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Contributions, including unconditional promises to give (contributions receivable), 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 in accordance with donor-imposed restrictions, if any, on the contributions based
upon management’s judgment and analysis of the creditworthiness of the donors, past collection
experience and other relevant factors.
Cash and Short-Term Investments—Cash consists principally of amounts held in checking, savings
and petty cash accounts in various financial institutions with an original maturity of three months or less.
Short-term investments consist of commercial paper, cash equivalents held in managed trust accounts
and U.S. treasuries. All short-term investments are recorded at fair value.
Financial instruments that potentially subject the University to significant concentrations of credit risk
consist principally of cash deposits. The University maintains cash balances at financial institutions with
strong credit ratings. Generally, amounts invested with financial institutions are in excess of FDIC
insurance limits.
Accounts and Loans Receivable—Accounts receivable consist of amounts due from students for
tuition and fees. Loans receivable consist primarily of loans made to students under United States
government loan programs. Accounts and loans receivable are stated at estimated net realizable value.
The allowances for doubtful accounts and loans are based on expected collections on these accounts and
loans.
Income Taxes—The University is a qualifying organization under Section 501(c)(3) of the Internal
Revenue Code (the “Code”) and is, therefore, exempt from federal income taxes on related income
pursuant to Section 501(a) of the Code. The University is subject to routine audits by taxing
jurisdictions; however, there are currently no audits for any tax periods in progress. The University
believes it is no longer subject to income tax examinations for years prior to 2011. As of June 30, 2015,
the University has no uncertain tax positions.
Investments—Investments in equity securities with readily determinable fair values and all investments
in debt securities are recorded at fair value. Other investments including real estate are recorded at cost
or, if acquired by gift, at fair value at the date of gift. Fair values for certain private equity and real estate
investments held through limited partnerships, hedge funds or commingled fund shares are estimated by
the respective external investment managers if market values are not readily ascertainable and are
considered by the University as non-marketable alternative investments. These valuations necessarily
involve assumptions and estimation methods which are uncertain, and therefore the estimates could
differ materially from actual results. The fair value of non-marketable alternative investments may be
based on historical cost, obtainable prices for similar assets, or other estimates. The University reviews
and evaluates the values provided 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.
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Investment in Plant—Fixed assets are recorded at cost at the date of acquisition, or fair value at the
date of donation, with the estimated useful lives as follows:
Land improvements
Buildings
Building improvements
Leasehold improvements
Equipment
Library collection
20 years
40 years
20 years
20 years
5–20 years
20 years
Collections—The University’s collections of art, which were acquired through purchases and
contributions since the organization’s inception, are not recognized as assets on the Statements of
Financial Position. Purchases of collection items are recorded as decreases in unrestricted net assets in
the year in which the items are acquired or as temporarily or permanently restricted net assets if the
assets used to purchase the items are restricted by donors. Contributed collection items are not reflected
on the financial statements. Proceeds from deaccessions or insurance recoveries are reflected as
increases in the appropriate net asset classes.
Refundable Advances—U.S. Government Grants—Funds provided by the United States government
under the Federal Perkins and Nursing Student Loan programs are loaned to qualified students and may
be re-loaned after collections. These funds are ultimately refundable to the government and, therefore,
recorded as a liability in the accompanying financial statements. The amount of government refundable
advances at June 30, 2015 and 2014, was $3,776 and $3,753, respectively.
Operations—The Statement of Activities reports the change in net assets from operating and
nonoperating activities. Operating revenues consist of substantially all the activities of the University
except for certain items specifically considered to be of a nonoperating nature. Unrestricted
contributions included in nonoperating activities consist of bequests and other unrestricted gifts not
solicited as part of the annual fundraising campaigns, gifts restricted for the acquisition of capital assets
and gifts restricted to endowment funds. Nonoperating activities also include realized and unrealized
gains or losses on investments, endowment income in excess of the established spending policy and
significant items of an unusual or nonrecurring nature.
Liquidity—Assets and liabilities are listed in their estimated order of liquidity. For those accounts for
which such liquidity is unclear, additional disclosures have been made in the notes to the University’s
financial statements.
Use of Estimates—Management of the University has made estimates and assumptions relating to the
reporting of assets and liabilities and the disclosure of assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting principles. Actual results could differ from
those estimates.
Insurance Reserves—The University is self-insured for certain losses relating to employee medical
benefit claims. The University has purchased stop-loss coverage to limit specific exposure in this area.
Accrued insurance liabilities are based on claims filed and estimates of claims incurred but not reported.
Such amounts are determined by considering known trends and projections of future results. Actual
claims experience can impact these calculations. To the extent that subsequent claims costs vary from
estimates, future earnings could be impacted.
-9-
Financial Instruments—As of June 30, 2015 and June 30, 2014, all financial instruments held by the
University were subject to enforceable master netting arrangements held by various financial
institutions. In general, the terms of our agreements provide that in the event of an early termination the
counterparties have the right to offset amounts owed or owing under that and any other agreement with
the same counterparty. The University’s accounting policy is to offset these positions in the statements
of financial position. Depending on the extent of an unrealized loss position on a derivative contract held
by the University, certain counterparties may require collateral to secure the University’s derivative
contract position. As of June 30, 2015 and June 30, 2014 there were no contracts held by the University
that required collateral to secure the University’s derivative liability positions.
Split Interest Agreements—The University has entered into split interest agreements, including
charitable remainder trusts and gift annuities which provide that the University, as trustee, make
payments to designated beneficiaries in accordance with the applicable donor’s trust or contractual
agreement. The University is also the beneficiary of charitable trusts held by third party trustees that are
accounted for as promises to give. Contributions related to split interest agreements totaled $125 and
$477 for the years ended June 30, 2015 and 2014, respectively. At the date of contribution, the
University records a split interest agreement obligation to life beneficiaries based on the present value of
the estimated payments to designated life beneficiaries. The University’s split interest agreement
obligation fair value has been categorized based upon a fair value hierarchy in accordance with Fair
Value Measurements and Disclosures, Accounting Standards Codification 820 (ASC 820). All
valuations are classified as Level 2 within the fair value hierarchy based on a combination of the market
and income valuation techniques. The University took into account historical and projected cash flow
and net income, collectability and default rates. Specifically, the present value of estimated payments is
based on actuarially determined life expectancy tables, trust asset growth assumptions, and discount
rates ranging from 3.42% to 3.48%. The preceding method described produces a fair value calculation
that may not be indicative of net realizable value or reflective of future fair values. Furthermore, the
University believes its valuation methods are appropriate and consistent with other market participants,
and the use of different methodologies or assumptions to determine the fair value of similar liabilities
could result in a different fair value measurement at the reporting date. The annual change in the value
of the split interest agreement obligation to life beneficiaries, as reflected in the Statements of Activities,
primarily represents the change in actuarial assumptions as well as the revenue and expense of the trust.
A summary of assets held and related obligation related to split interest agreements as of June 30, 2015
and 2014 follows:
2015
2014
995
1,785
$ 1,058
1,746
Total
$ 2,780
$ 2,804
Liabilities—split interest agreement obligation
$ (1,263)
$ (841)
Assets:
Charitable remainder trusts
Charitable gift annuities and trusts
$
Charitable gift annuity assets are separate and distinct funds, managed as independent accounts of the
University. The University maintains reserves and a surplus of such reserves in an amount at least equal
to the designated beneficiary payments on all the outstanding gift annuity contracts. These reserves shall
not be applied for the payment of debts and obligations of the University or for any purpose other than
payment of the annuity benefits.
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Recent Accounting Pronouncements—In April 2013, the FASB issued ASU No. 2013-06, Services
Received from Personnel of an Affiliate, to specify the guidance that not-for-profit entities apply for
recognizing and measuring services received from personnel of an affiliate. The amendments in this
update require a recipient not-for-profit entity to recognize all services received from personnel of an
affiliate that directly benefit the recipient not-for-profit entity. Those services should be measured at the
cost recognized by the affiliate for the personnel providing those services. However, if measuring a
service received from personnel of an affiliate at cost will significantly overstate or understate the value
of the service received, the recipient not-for-profit entity may elect to recognize that service received at
either (1) the cost recognized by the affiliate for the personnel providing that service or (2) the fair value
of that service. The new guidance is effective for reporting periods beginning after June 15, 2014.
Management has implemented ASU No. 2013-06 and it did not have a material impact on the financial
statements.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606).
ASU 2014-09 is the result of a convergence project between the FASB and International Accounting
Standards Board (“IASB”) in an effort to create consistent standards in financial accounting.
ASU 2014-09 is applicable to any entity who enters into contracts to transfer goods or services or enters
into contracts for the transfer of nonfinancial assets unless they fall within the scope of other standards.
The core principle of the guidance is that an entity should recognize revenue to depict the transfer of
promised goods or services to customers in an amount that reflects consideration to which the entity
expects to be entitled to in exchange for these goods or services. ASU 2014-09 is effective for the year
ending June 30, 2019 with early adoption permitted under specific circumstances. Management is in the
process of evaluating the impact on the financial statements.
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going
Concern” (“ASU 2014-15”), which is included in the Codification under ASC 205, Presentation of
Financial Statements (“ASC 205”). This guidance was issued to define management’s responsibility to
evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to
provide related footnote disclosure in certain circumstances. Under the new guidance, management is
required to evaluate, at each annual and interim reporting period, whether there are conditions or events
that raise substantial doubt about the entity’s ability to continue as a going concern within one year after
the date the financial statements are issued and to provide related disclosures. The guidance will be
effective for interim and annual reporting periods beginning January 1, 2017, with early adoption
permitted. ASU 2014-15 is not expected to have a material impact on the financial statements.
In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30):
Simplifying the Presentation of Debt Issuance Costs. The update requires debt issuance costs related to a
recognized debt liability be presented in the balance sheet as a direct deduction from the carrying
amount of the related debt liability instead of being presented as an asset. Debt disclosures will include
the face amount of the debt liability and the effective interest rate. The update requires retrospective
application and represents a change in accounting principle. The update is effective for fiscal years
beginning after December 15, 2015. Early adoption is permitted for financial statements that have not
been previously issued. Management is in the process of evaluating the impact on the financial
statements, but it is not expected to be material.
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3.
TEMPORARILY RESTRICTED NET ASSETS
Temporarily restricted net assets at June 30, 2015 and 2014, consist of the following:
2015
2014
Unexpended contributions for restricted purposes
Contributions for capital assets
Endowments
Annuity and life income funds
Charitable remainder and annuity trusts
Contributions receivable
$ 17,304
1,209
46,908
441
1,048
41,348
$ 14,277
1,241
49,369
847
1,110
7,160
Total temporarily restricted net assets
$ 108,258
$ 74,004
Unexpended contributions for restricted purposes consist of gifts for various purposes including student
scholarships, academic support, faculty development, and athletic program support. Endowment
temporarily restricted net assets represent appropriated but unspent amounts and accumulated
investment earnings not yet appropriated for spending. The endowed purposes of endowed net assets are
primarily for student scholarships and academic support. Contributions receivable included in
temporarily restricted net assets are primarily restricted for the acquisition and improvement of campus
facilities, student scholarships and academic support.
4.
PERMANENTLY RESTRICTED NET ASSETS
Permanently restricted net assets at June 30, 2015 and 2014, consist of the following:
2015
Student loan funds
Endowment funds
Contributions receivable
$
390
80,467
8,038
Total permanently restricted net assets
$ 88,895
2014
$
398
75,676
9,841
$ 85,915
Contributions receivable included in permanently restricted net assets are primarily restricted for
endowed student aid. The endowed purposes of endowed net assets are primarily for student
scholarships and academic support.
- 12 -
5.
CONTRIBUTIONS RECEIVABLE
Contributions receivable at June 30, 2015 and 2014, consist of the following:
2015
Unconditional promises expected to be collected in:
Less than one year
One year to five years
Five years and thereafter
$ 10,423
25,379
25,052
$ 8,952
22,290
8,534
60,854
39,776
(1,918)
(3,873)
(2,165)
(1,645)
Total
Less allowance for uncollectible contributions
Discount for present value
Total
2014
$ 55,063
$ 35,966
Contributions receivable were discounted at 1.63% as of June 30, 2015, and 1.62% as of June 30, 2014.
6.
INVESTMENTS
Investments at June 30, 2015 and 2014, are comprised of the following:
2015
Market
Value
Cost
U.S. government and agency obligations
Corporate stocks and stock funds
Corporate bonds and bond funds
Mortgage and asset-backed securities
Real assets
Alternative investments
Real estate
Short-term investments
$
4,905
88,978
91,644
8,442
12,701
10,328
1,790
2014
4,926
108,521
94,325
8,458
12,063
14,893
1,790
$ 11,581
85,320
76,321
5,646
8,060
8,994
1,790
$ 11,490
108,549
80,155
5,804
8,876
13,116
1,790
$ 218,788
$ 244,976
$ 197,712
$ 229,780
$
$
$
$
7,537
$
Market
Value
Cost
7,537
3,032
3,032
Real assets are invested in commingled trusts and/or partnership structures whose underlying
investments include commodities, equities, inflation-indexed fixed income securities, master limited
partnerships, and real estate.
- 13 -
Investment activity for the years ended June 30, 2015 and 2014, was:
Dividend, interest, and other investment income
Net change in realized and unrealized gains and (losses)
Outside investment management fees
Total investment income, including net gains, net of
outside management fees
Less: endowment income used in operations
Less: investment return operating
Investment return, net of amounts used in operations
2015
2014
$ 6,925
(2,838)
(547)
$ 4,285
20,474
(353)
3,540
24,406
5,108
1,291
4,792
823
$ (2,859)
$ 18,791
Investment income included in operations is comprised of endowment appropriations for donordesignated operating purposes such as student scholarships and instructional expenses as well as
investment income earned on excess operating funds. Investment income included in non-operating
activities primarily includes accumulated but not yet appropriated endowment earnings and investment
income earned on unused funds set aside or restricted by donors for capital purposes.
7.
ENDOWMENT FUNDS
The University’s endowment consists of approximately 600 individual funds established for a variety of
purposes, such as scholarships, endowed chairs, departmental and operating budget support. The
endowment includes both donor-restricted endowment funds and funds designated by the University to
function as endowments. As required by Generally Accepted Accounting Principles (GAAP), net assets
associated with endowment funds, including funds designated by the Board of Trustees to function as
endowments, are classified and reported based on the existence or absence of donor-imposed
restrictions.
- 14 -
The University classifies as permanently restricted net assets the original value of gifts donated to the
permanent endowment, the original value of subsequent gifts to the permanent endowment, and
accumulations to the permanent endowment made in accordance with directions of the applicable donor
instrument at the time the accumulation is added to the fund. The remaining portion of the donor
restricted endowment fund that is not classified in permanently restricted net assets is classified as
temporarily restricted net assets until those amounts are appropriated for expenditure.
Endowment Net Asset Composition by
Type of Fund as of June 30, 2015
Unrestricted
Temporarily
Restricted
Permanently
Restricted
Total
Donor-restricted
Board-designated
$
29,003
$ 46,908
-
$ 80,467
-
$ 127,375
29,003
Total funds
$ 29,003
$ 46,908
$ 80,467
$ 156,378
$ 28,432
$ 49,369
$ 75,676
$ 153,477
Changes in Endowment Net Assets
for the Year Ended June 30, 2015
Endowment net assets—July 1, 2014
Contributions and other additions
Total investment return
Amounts appropriated for expenditure
Endowment net assets—June 30, 2015
Endowment Net Asset Composition by
Type of Fund as of June 30, 2014
347
580
(356)
$ 29,003
Unrestricted
954
1,337
(4,752)
$ 46,908
Temporarily
Restricted
4,791
$ 80,467
Permanently
Restricted
6,092
1,917
(5,108)
$ 156,378
Total
Donor-restricted
Board-designated
$
28,432
$ 49,369
-
$ 75,676
-
$ 125,045
28,432
Total funds
$ 28,432
$ 49,369
$ 75,676
$ 153,477
$ 22,774
$ 36,636
$ 73,062
$ 132,472
Changes in Endowment Net Assets
for the Year Ended June 30, 2014
Endowment net assets—July 1, 2013
Contributions and other additions
Total investment return
Amounts appropriated for expenditure
Endowment net assets—June 30, 2014
512
5,404
(258)
$ 28,432
47
17,220
(4,534)
$ 49,369
2,614
$ 75,676
3,173
22,624
(4,792)
$ 153,477
Permanently restricted net assets reflect the portion of perpetual endowment funds that is required to be
retained permanently either by explicit donor stipulations or by UPMIFA.
The University has adopted investment and spending policies for endowment assets that attempt to
provide a predictable stream of funding to programs supported by its endowment while seeking to
maintain the purchasing power of the endowment assets over time. Endowment assets include those
assets of donor-restricted funds that must be held in perpetuity or for a donor-specified period(s) as well
- 15 -
as board-designated funds. Under this policy, as approved by the Board of Trustees, the endowment
assets are invested in a manner that is intended to provide for preservation of capital with an emphasis
on consistent long-term growth of capital, without undue exposure to risk. The University expects its
endowment funds, over time, to provide an average total rate of return that exceeds the Consumer Price
Index by at least 4.5% annually. Actual returns in any given year may vary from this amount.
To satisfy its long-term rate-of-return objectives, the University relies on a total return strategy in which
investment returns are achieved through both capital appreciation and current yield. The University
utilizes a diversified asset allocation that places a greater emphasis on equity-based investments to
achieve its long-term objectives within prudent risk constraints.
The University has adopted a spending policy which appropriates for distribution each year 4.5% of the
average fair value of each endowment fund over the prior 12 quarters through the end of the preceding
fiscal year. In establishing this policy, the University considered the long-term expected return on its
endowment. Accordingly, over the long term, the University expects the current spending policy to
allow its endowment to grow at an average rate exceeding the Consumer Price Index.
From time to time, the fair value of assets associated with individual donor-restricted endowment funds
may fall below the level that the donor or UPMIFA requires be retained as a fund of perpetual duration.
In accordance with GAAP, deficiencies of this nature amounted to $305 as of June 30, 2015, and $112
as of June 30, 2014. These deficiencies resulted from unfavorable market fluctuations that occurred after
the investment of permanently restricted contributions. The University transferred unrestricted net assets
to the underwater endowments as required by UPMIFA.
8.
INVESTMENT IN PLANT
The components of the University’s investment in plant at June 30, 2015 and 2014, are as follows:
2015
Land
Land improvements
Buildings and building improvements
Leasehold improvements
Equipment
Library collection
$
Less accumulated depreciation
Investment in plant—net
30,911
43,396
315,010
162
26,425
816
2014
$
29,454
43,215
313,718
162
24,528
816
416,720
411,893
(145,549)
(133,211)
$ 271,171
$ 278,682
Depreciation expense was $13,505 and $13,799 for the years ended June 30, 2015 and 2014,
respectively.
9.
INDEBTEDNESS
The University has an unsecured $5,000 line of credit with a bank. Balances outstanding are payable on
the expiration date with interest due monthly at LIBOR plus 2.0%. There are no balances outstanding on
the line of credit, which expires on December 18, 2015.
- 16 -
Indebtedness at June 30, 2015 and 2014, consists of the following
2015
State of Ohio Higher Educational Facility Revenue Bonds:
2015 Series C—principal due annually beginning
May 2016 through May 2038, interest rate ranges from
3.00% to 5.00% (includes original issue premium of $5,232)
2015 Series A—principal due annually beginning
May 2016 through May 2042, variable interest rate,
resets monthly, 0.84% at June 30, 2015
2015 Series B—principal due annually beginning
May 2016 through May 2042, variable interest rate,
resets monthly, 1.19% at June 30, 2015
2013 Series—principal due annually beginning Nov 2016
through November 2030, interest rate, 2.95%
2010 Series—principal due annually beginning May 2013
through May 2040, interest rate ranges from 2.50% to
5.00% (net of unamortized original issue discount)
2008 Series C—principal due annually through
May 2018, interest rate is 5.00%, $46,170 was defeased
in March 2015 by 2015 Series C
2008 Series A—principal due annually beginning
May 2016 through May 2042, variable interest rate,
resets weekly, 0.05% at June 30, 2014, the 2008
Series A & B bonds are secured by irrevocable
direct pay letter of credit in the amount of $72,043
with an expiration date of April 28, 2019, refunded in
March 2015 by 2015 Series A
2008 Series B—principal due annually beginning
May 2016 through May 2042, variable interest rate,
resets weekly, 0.13% at June 30, 2014, the 2008
Series A & B bonds are secured by irrevocable
direct pay letter of credit in the amount of $72,043
with an expiration date of April 28, 2019, refunded in
March 2015 by 2015 Series B
2000 Series A—principal due annually through
May 2015, variable interest rate, resets weekly,
0.06% at June 30, 2014, secured by irrevocable
direct pay letter of credit in the amount of $2,395
with an expiration date of May 15, 2015
Total indebtedness
$ 55,187
$
-
23,475
-
47,380
-
19,815
19,815
46,120
47,107
5,050
50,473
-
23,475
-
47,380
-
2,355
$ 197,027
- 17 -
2014
$ 190,605
The annual maturities of indebtedness for the years ending June 30 are as follows:
2016
2017
2018
2019
2020
Thereafter
$
4,481
4,988
5,208
5,708
6,002
170,640
$ 197,027
The outstanding State of Ohio Higher Educational Facility Revenue Bonds (“Bonds”) are secured by a
pledge of University revenues to the Bond trustee. The Pledge Agreement (“Agreement”) secures
substantially all of the University’s indebtedness along with the University’s obligations to any credit or
liquidity facility providers or counterparties to derivative agreements relating to the Bonds. All of these
obligations are secured on a parity basis and the Agreement provides a mechanism for the University to
secure future indebtedness also on a parity basis. The two financial covenants set forth in the various
bond and indenture agreements include a coverage ratio based on expendable net assets to debt and a
maximum annual debt service to revenues ratio, as defined in such agreements. As of June 30, 2015, the
University was in compliance with these two financial covenants.
In March 2015, the University issued $70,855 and $55,187 (including a premium of $5,232) in State of
Ohio Higher Educational Facility Revenue Bond 2015 Series A & B and 2015 Series C, respectively,
which provided funds for the refunding of the 2008 Series A & B and for the advance refunding of the
2008 Series C. The refunding of 2008 Series A & B and issuance of 2015 Series A & B replaced
variable rate demand bonds that required public weekly remarketing and a third party credit facility with
variable rate direct placement bonds. The interest rate swaps associated with the bonds remained in
place to offer protection against potential upward movements in interest rates. The advance refunding of
the 2008 Series C and issuance of 2015 Series C replaced higher cost fixed rate public debt with lower
cost fixed rate debt. The 2008 Series C debt had been issued in late 2008, and enabled Xavier to execute
on strategic physical campus development plans. With rates at historic lows during fiscal 2015, the
higher cost 2008 Series C debt was advance refunded in favor of 2015 Series C debt at lower rates. In
order to defease the 2008 Series C bonds, an amount of $8,853 was placed in a trust to be managed by a
trustee as prepayment of principal and interest on the 2008 Series C, which is not callable until 2018.
The remainder of the $11,355 recorded as a net asset decrease on early redemption of bonds payable is
due to unamortized discount and issuance costs of $2,502 associated with the 2008 Series that were
written off in connection with the early retirement of these bonds. Future cash savings of approximately
$4,671 are expected due to the more favorable terms of the new 2015 Series C bonds as compared with
the 2008 Series C bonds. Pursuant to ASC 405-20-40, the 2008 bonds are considered to be extinguished
for financial reporting purposes.
Interest expense was approximately $8,179 for the year ended June 30, 2015 ($9,202 for the year ended
June 30, 2014). Additionally, the University capitalized no interest for the years ended June 30, 2015
and 2014.
- 18 -
The University entered into in 2008 and amended in 2015 interest rate swap agreements with Barclays
Capital and Deutsche Bank AG. These swap agreements have the effect of fixing the rate of interest on
the Ohio Higher Educational Facility Revenue Bonds as follows:
Bonds
Series 2015A
Series 2015B
Series 2015B
Notional
Amount
$ 23,475
47,380
46,650
University
Pays
University
Receives
Effective
Date
Maturity
Date
3.316 % 67% of 1 month LIBOR October 2008 May 2042
4.257
100% of 1 month LIBOR October 2008 May 2016
3.658
67% of 1 month LIBOR May 2016
May 2042
The estimated payment by the University to terminate the swap agreements was $18,105 and $15,921 as
of June 30, 2015 and 2014, respectively. These amounts are reflected separately in liabilities in the
statements of financial position. The change in the fair value of the interest rate swap agreements of
$(2,184) and $(532) for the years ended June 30, 2015 and 2014, respectively, are included in
nonoperating activities in the statements of activities.
10. RETIREMENT PLAN
The University has a 403(b) contributory retirement plan through Teachers Insurance and Annuity
Association and College Retirement Equities Fund (TIAA-CREF) that covers substantially all full-time
employees after certain eligibility requirements have been met. University contributions to the plan
range from 8.50% to 10.00% of eligible compensation.
These contributions amounted to approximately $5,188 for the year ended June 30, 2015 ($5,097 for the
year ended June 30, 2014). Plan participants are also required to make contributions to the plan ranging
from 2.00% to 5.00% of their compensation. All contributions to TIAA-CREF are used to purchase
individual annuity contracts in which the employees are fully vested.
11. POSTRETIREMENT HEALTH CARE BENEFITS
In addition to the University’s contributory retirement plan through TIAA-CREF, the University
sponsors a defined benefit health care plan that provides post-retirement medical benefits to full-time
employees who meet minimum age and service requirements. The plan is non-contributory for
employees who retired prior to the end of the 1994–1995 academic year.
For employees who met certain age and service requirements as of January 1, 1995, the plan has been
amended to require employee contributions and establish a maximum monthly benefit to be provided by
the University.
Postretirement benefit expense includes the following components as of June 30, 2015 and 2014:
2015
Service cost of benefits earned
Interest cost on liability
Amortization of transition obligation
$
Net periodic postretirement benefit cost
$ 137
- 19 -
137
-
2014
$
172
9
$ 181
The following table summarizes the impact of the Statements of Financial Position, as well as the benefit
obligations, and funded status of the postretirement benefit plan with a measurement date as of June 30,
2015 and 2014:
2015
2014
Changes in projected benefit obligations:
Benefit obligation—beginning of year
Interest cost
Participants’ contributions
Medicare Part D reimbursements
Actuarial gain (loss)
Benefits paid
$ (4,485)
(137)
(846)
542
$ (5,045)
(172)
(238)
(41)
133
878
Benefit obligation—end of year
$ (4,926)
$ (4,485)
$
$
Change in fair value of plan assets:
Fair value of plan assets—beginning of year
Employer contributions
Participants’ contributions
Medicare Part D reimbursements
Benefits paid
542
(542)
-
599
238
41
(878)
Fair value of plan assets—end of year
$
$
-
Reconciliation of funded status:
Projected benefit obligation in excess of fair value
of plan assets
Unrecognized transition obligation
Unrecognized actuarial loss
$ (4,926)
-
$ (4,485)
-
Net statement of financial position liability
$ (4,926)
$ (4,485)
The following weighted average assumptions were made in determining the postretirement benefit
obligation and the postretirement benefit cost as of June 30, 2015 and 2014:
Weighted average discount rate used to determine the projected
benefit obligation
Weighted average discount rate assumption used to determine
the net periodic benefit cost
2015
2014
3.48 %
3.22 %
3.22
3.59
The health care cost trend rate assumption has a significant effect on the amounts reported in the
financial statements. The following health care cost trend rates were assumed in the determination of the
postretirement benefit obligation and net periodic benefit cost as of June 30, 2015 and 2014:
Health care cost trend rate assumed for the current year
Ultimate health care cost trend rate
Year that rate reaches the ultimate trend rate
- 20 -
2015
2014
8.00 %
4.00 %
2019
6.00 %
4.00 %
2016
Assumed medical costs trend rates have a significant effect on the amounts reported for the Plan. A
one-percentage point change in the assumed health care cost trend rate would have the following effect
on the postretirement benefit obligation and the net periodic benefit cost:
1% Increase 1% Decrease
Effect on postretirement benefit obligation
Effect on net periodic benefit cost
$ 410
14
$ (343)
(12)
The following benefit payments, net of participants’ contributions and Medicare Part D reimbursements,
which reflect expected future service, as appropriate, are expected to be paid:
Benefit
Payments
Fiscal Year Ending
2016
2017
2018
2019
2020
2021–2025
$ 389
386
380
369
355
1,513
12. RELATED-PARTY TRANSACTIONS
The Jesuit Community at Xavier University (the “Community”), an Ohio not-for-profit corporation, is
an entity separate from the University. Members of the Community serve on the University’s faculty and
in administration under individual employment agreements. Their related salaries are paid, in total, to
the Community. In the opinion of the University’s administration, such salaries are comparable to those
of other employees. Members of the Community do not participate in either the University’s retirement
plan or the federal Social Security program. However, the University pays to the Community an amount
comparable to such benefits for each Community member employed by the University.
In addition, the financial statements include various gifts and contributions receivable from members of
the board of directors and employees, including management.
13. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of cash, short-term investments, accounts receivable, accrued interest receivable,
accrued compensation costs and deferred revenue approximate fair value because of the short maturity
of these financial instruments. The carrying value, which is the fair value of investments, is determined
by management using inputs provided by an external investment manager or quoted market values. In
the limited cases where such values are not available, historical cost is used as an estimate of market
value.
A reasonable estimate of the fair value of the student loans receivable under government loan programs
and advances from the federal government for student loans could not be made because the notes
receivable are not saleable and can only be assigned to the U.S. government or its designees.
The carrying amount of contributions receivable approximates fair value as these donations are recorded
at the net present value of amount pledged.
- 21 -
The fair value of indebtedness, which consists primarily of bonds payable, was approximately $202,239
as of June 30, 2015, and $209,848 as of June 30, 2014. The methodology for determining fair value
involves a discounted cash flow analysis. A discount rate was established for each existing series of
bonds. Each discount rate was then used to calculate the present value of debt service cash flows from
the existing bonds to reach a current value of existing bonds. The carrying value was $197,027 as of
June 30, 2015, and $190,605 as of June 30, 2014.
Under ASC 820-10, fair value is defined as the price that would be received to sell an asset or paid to
transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the
measurement date.
In determining fair value, the University uses various valuation approaches. ASC 820-10 establishes a
fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs
and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when
available. Observable inputs are those that market participants would use in pricing the asset or liability
based on market data obtained from sources independent of the University. Unobservable inputs reflect
the University’s assumption about the inputs market participants would use in pricing the asset or
liability developed based on the best information available in the circumstances. The fair value hierarchy
is categorized into three levels based on the inputs as follows:
Level 1—Valuations based on unadjusted quoted prices in active markets for identical instruments.
Level 2—Valuations based on quoted prices in markets that are not active or for which all significant
inputs are observable, either directly or indirectly.
Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value
measurement.
- 22 -
At June 30, 2015 and 2014, the University’s assets and liabilities measured at fair value on a recurring
basis are summarized in the following table by the type of inputs applicable to the fair value
measurement.
Description
Assets:
Investments:
Short-term investments
US government notes and bonds
US government agency notes and bonds
Corporate stocks and stock funds
Corporate bonds and bond funds
Mortgage and asset-backed securities
Real assets
Alternative investments
Liabilities—interest rate swap agreements
Description
Assets:
Investments:
Short-term investments
US government notes and bonds
US government agency notes and bonds
Corporate stocks and stock funds
Corporate bonds and bond funds
Mortgage and asset-backed securities
Real assets
Alternative investments
Liabilities—interest rate swap agreements
June 30, 2015
$
7,537
4,892
34
108,521
94,325
8,458
12,063
14,893
(18,105)
Level 1
$
June 30, 2014
$
3,032
9,130
2,360
108,549
80,155
5,804
8,876
13,116
(15,921)
7,537
4,892
34
108,521
11,140
-
Level 2
$
Level 1
$
3,032
9,130
2,360
108,549
11,826
-
83,185
8,458
12,063
(18,105)
Level 3
$
Level 2
$
68,329
5,804
8,876
(15,921)
14,893
Level 3
$
13,116
-
The alternative investment category is comprised of private equity and hedge funds that invest across
various asset classes, primarily including leveraged buyouts, distressed debt, venture capital, secondary
partnership interests, hedged equity, distressed securities, and merger arbitrage. These investment
vehicles are limited partnerships which may have restrictive redemption provisions, providing limited
liquidity. The valuation of alternative investments is based on the proportional share of the net asset
valuations reported by the underlying investment partnerships. The estimated fair values of investments
of the investee partnerships, which generally include investments in equity and debt securities for which
prices are not readily available, are determined by the general partner or sponsor of the respective
investee partnerships and may not reflect amounts that could be realized upon immediate sale, or
amounts that ultimately may be realized. Accordingly, the estimated fair values may differ significantly
from the values that would have been used had a ready market existed for these investments. The fair
value of the partnership’s investments in investee partnerships generally represents the amount the
partnership would expect to receive if it were to liquidate its investment in the investee partnerships.
These investments in investee partnerships are classified in Level 3 of the fair value hierarchy.
Alternative investments was the only category deemed to have significant unobservable inputs (i.e.
Level 3) when determining valuation. Identified in the table below is a summary of changes in fair value
for the years ended June 30, 2015 and June 30, 2014.
- 23 -
Private
Equity
Hedge
Funds
Beginning net asset value—July 1, 2014
Capital additions or purchases
Capital disbursements or sales
Appreciation (depreciation) of investments
$ 3,062
1,349
(713)
452
$ 10,054
277
$
Ending net asset value—June 30, 2015
$ 4,150
$ 10,331
$ 412
Other
391
21
Total
$ 13,116
1,740
(713)
750
$ 14,893
Private
Equity
Hedge
Funds
Other
Total
Beginning net asset value—July 1, 2013
Capital additions or purchases
Capital disbursements or sales
Appreciation (depreciation) of investments
$ 2,239
1,046
(757)
534
$ 9,092
962
$ 101
(40)
(61)
$ 11,432
1,046
(797)
1,435
Ending net asset value—June 30, 2014
$ 3,062
$ 10,054
$
$ 13,116
-
Identified in the table below is a summary of fair value, unfunded commitments and redemption
provisions:
Fair
Value
Private equity
Hedge funds
$ 4,150
10,331
Unfunded
Commitment
$ 5,764
-
Redemption
Frequency
Redemption
Restrictions
Notice
Period
n/a
Quarterly
n/a
n/a
n/a
90–95 days
Private equity funds are invested in a fund-of-funds structure in which the underlying managers invest
primarily in leveraged buyouts, distressed debt, venture capital, and secondary partnership interests.
Hedge funds are invested primarily in a fund-of-funds structure in which the underlying managers invest
primarily in hedged equity, distressed securities, and merger arbitrage.
Other includes investments in credit opportunities and real estate funds.
- 24 -
14. LEASE COMMITMENTS
The University leases land, office space for offsite classrooms, technology equipment, retail space, and
vehicles under non-cancelable operating arrangements that have original terms greater than one year.
Leases expire at varying dates through September 30, 2029, and there are various renewal options. The
following table shows the aggregate payments required with these leases in the periods indicated.
Years Ending
June 30
2016
2017
2018
2019
2020
Thereafter
$ 965
849
526
340
340
3,149
$ 6,169
The University executed a ground lease with a development company in June of 2013. The lease period
is for fifty years with five additional nine year renewals at the developer’s option, and the lease gives the
development company rights to construct a multi-use development expected to include housing, office,
and retail space on approximately 14 acres of land east of the University. The University will receive
periodic lease payments from the developer. The University is neither an investor in the development
nor a guarantor for any obligations of the development company or the development. The University
executed a lease for a portion of the retail space at market rates.
15. COMMITMENTS AND CONTINGENCIES
The University is involved in various legal actions arising in the ordinary course of its activities. It is the
opinion of management that the ultimate liability, if any, with respect to these matters will not materially
affect the financial position of the University.
The University receives grants and contracts from certain federal, state and local agencies to fund
student aid and other activities. The costs, both direct and indirect, that have been charged to the grants
or contracts are subject to examination and approval by the granting agency. It is the opinion of
management that any disallowance or adjustment of such costs would not have a material effect on the
financial statements.
The University has an agreement with a general contractor for the design and renovation of facilities
with a guaranteed maximum price of $14,645 of which approximately $13,098 has been paid or accrued
as of June 30, 2015.
16. SUBSEQUENT EVENTS
No events have occurred after June 30, 2015, but before September 18, 2015, the date the financial
statements were available to be issued, that require consideration as adjustments to, or disclosures in, the
financial statements.
******
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