SOUTHERN NEW HAMPSHIRE UNIVERSITY
Financial Statements
June 30, 2008 and 2007
(With Independent Auditors’ Report Thereon)
KPMG LLP
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Boston, MA 02110-2371
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Independent Auditors’ Report
The Board of Trustees
Southern New Hampshire University:
We have audited the accompanying statements of financial position of Southern New Hampshire
University (the University) as of June 30, 2008 and 2007, and the related statements of unrestricted
revenues and expenses, changes in net assets, and cash flows for the years then ended. 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 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 consideration of
internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the University’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of Southern New Hampshire University as of June 30, 2008 and 2007, and the changes in
its net assets and its cash flows for the years then ended in conformity with U.S. generally accepted
accounting principles.
October 14, 2008
KPMG LLP, a U.S. limited liability partnership, is the U.S.
member firm of KPMG International, a Swiss cooperative.
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Statements of Financial Position
June 30, 2008 and 2007
Assets
Cash and cash equivalents
Short-term investments, at fair value (note 3)
Student accounts and other receivable, net (note 4)
Other assets, net
Contributions receivable, net (notes 7 and 10)
Student loans receivable, net (note 4)
Deposits with trustees (note 6)
Long-term investments, at fair value (notes 3 and 12)
Property and equipment, net (notes 5 and 6)
Total assets
2008
2007
$
2,267,699
16,889,064
3,271,077
2,833,753
226,496
3,869,927
13,593,894
16,549,248
52,654,860
2,297,538
14,706,143
1,604,269
3,018,200
148,238
3,737,698
13,688,671
16,092,678
52,436,648
$
112,156,018
107,730,083
$
8,747,833
8,764,699
57,306,407
3,279,371
10,163,367
6,172,903
58,798,812
3,275,900
78,098,310
78,410,982
25,779,935
1,621,418
6,656,355
22,361,465
2,267,578
4,690,058
34,057,708
29,319,101
112,156,018
107,730,083
Liabilities and Net Assets
Liabilities:
Accounts payable and accrued expenses
Student deposits and advance payments
Notes and bonds payable (note 6)
Refundable advances – U.S. Government grants
Total liabilities
Net assets:
Unrestricted
Temporarily restricted (note 7)
Permanently restricted (note 8)
Total net assets
Total liabilities and net assets
$
See accompanying notes to financial statements.
2
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Statements of Unrestricted Revenues and Expenses
Years ended June 30, 2008 and 2007
2008
2007
81,103,743
13,489,545
(16,329,857)
74,156,065
12,356,927
(14,766,248)
78,263,431
71,746,744
1,992,584
1,035,448
2,001,444
1,223,545
554,580
(232,816)
2,029,415
406,464
1,602,141
685,623
2,387,754
1,267,303
588,919
139,829
1,367,237
71,029
87,274,095
79,856,579
32,482,585
6,891,932
11,636,345
16,106,778
14,708,456
30,336,176
6,098,674
11,012,498
15,397,877
14,004,888
81,826,096
76,850,113
Increase in unrestricted net assets from operations
5,447,999
3,006,466
Nonoperating:
Unrealized gains (losses) on unrestricted investments (note 3)
Settlement expenses (note 16)
Write off of accounts receivable-other
Extinguishment of debt (note 6)
(665,974)
(1,000,000)
(363,555)
—
861,862
—
—
(336,286)
Increase (decrease) in unrestricted net assets from
nonoperating revenue (expense)
(2,029,529)
525,576
3,418,470
3,532,042
Operating:
Revenues:
Tuition and fees
Residence and dining
Less student aid
$
Tuition and fees, net
Other auxiliary enterprises
Contributions
Grants and contracts
Long-term investment income (note 3)
Other interest income
Gain (loss) on sale of investments (note 3)
Other income
Net assets released from restrictions (note 9)
Total operating revenues and net assets released
from restrictions
Expenses:
Instruction
Academic support
Student services
General institutional
Auxiliary enterprises
Total operating expenses
Increase in unrestricted net assets
$
See accompanying notes to financial statements.
3
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Statements of Changes in Net Assets
Years ended June 30, 2008 and 2007
2008
2007
87,274,095
(81,826,096)
(2,029,529)
79,856,579
(76,850,113)
525,576
Increase in unrestricted net assets
3,418,470
3,532,042
Changes in temporarily restricted net assets:
Contributions
Reinvested endowment income and gains (losses) (note 3)
Net assets released from restrictions (note 9)
Change in donor intent
170,166
(409,962)
(406,464)
100
62,822
675,060
(71,029)
—
(646,160)
666,853
1,952,983
13,414
(100)
1,190,706
27,508
—
Increase in permanently restricted net assets
1,966,297
1,218,214
Increase in net assets
4,738,607
5,417,109
29,319,101
23,901,992
34,057,708
29,319,101
Changes in unrestricted net assets:
Operating revenues
Operating expenses
Nonoperating revenue (expense)
$
Increase (decrease) in temporarily restricted net assets
Changes in permanently restricted net assets:
Contributions
Reinvested endowment income and gains (note 3)
Change in donor intent
Net assets at beginning of year
Net assets at end of year
$
See accompanying notes to financial statements.
4
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Statements of Cash Flows
Years ended June 30, 2008 and 2007
2008
Cash flows from operating activities:
Increase in net assets
Adjustments to reconcile increase in net assets to net
cash provided by operating activities:
Depreciation and amortization expense
Realized and unrealized gain on investments
Loss on extinguishment of debt
Write off of account receivable
Contributions for long-term investments
Change in current assets
Change in current liabilities
$
2007
4,738,607
5,417,109
3,393,514
1,393,281
—
363,555
(1,952,983)
(1,924,174)
1,176,262
3,239,330
(1,641,919)
336,286
—
(1,190,706)
309,959
(2,497,579)
7,188,062
3,972,480
Cash flows from investing activities:
Purchase of equipment and building improvements
Proceeds from sales of property and equipment
Purchase of investments
Proceeds from sale of investments
(Increase) decrease in long-term student loans receivable, net
(3,631,471)
2,340
(31,918,364)
27,885,592
(132,229)
(3,210,002)
3,298
(30,060,469)
28,158,075
63,645
Net cash used in investing activities
(7,794,132)
(5,045,453)
Cash flows from financing activities:
Proceeds from issuance of long-term debt
Payments on long-term debt
Bond issuance costs
Decrease in deposits with trustees
Increase (decrease) in government grants refundable
Contributions for long-term investments
—
(1,475,000)
—
94,777
3,471
1,952,983
9,073,319
(9,320,000)
(338,326)
1,860,799
(111)
1,190,706
Net cash provided by financing activities
576,231
2,466,387
Net change in cash and cash equivalents
(29,839)
1,393,414
2,297,538
904,124
Net cash provided by operating activities
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
$
2,267,699
2,297,538
Supplemental disclosure:
Interest paid
$
2,773,931
2,534,144
See accompanying notes to financial statements.
5
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Notes to Financial Statements
June 30, 2008 and 2007
(1)
Background
Southern New Hampshire University (the University) is a private, coeducational institution. Enrollment
consists of approximately 2,000 students in the day school, 7,600 enrollments in the graduate school,
10,200 enrollments in the division of continuing education, and 14,500 enrollments in distance education.
It also offers associate’s degrees in culinary arts and several business-related fields. Bachelor of Science
degrees are offered in twenty areas of business, education, and liberal arts study and master’s degrees in
business administration, accounting, business education, computer information systems, community
economic development, and international business. Doctoral degrees are offered in a Ph.D. in Community
Economics Development and a DBA in International Business.
(2)
Summary of Significant Accounting Policies
(a)
Basis of Statement Presentation
The accompanying financial statements, which are presented on the accrual basis of accounting, have
been prepared to focus on the University as a whole and to present balances and transactions
according to the existence or absence of donor-imposed restrictions. Accordingly, net assets and
changes therein are classified as follows:
Permanently Restricted Net Assets – Net assets subject to donor-imposed stipulations that they be
maintained permanently by the University. Generally, the donors of these assets permit the
University to use all or part of the income earned and capital gains, if any, on related investments for
general or specific purposes.
Temporarily Restricted Net Assets – Net assets subject to donor-imposed and/or statutory
stipulations that may or will be met by actions of the University and/or the passage of time.
Unrestricted Net Assets – Net assets not subject to donor-imposed stipulations.
Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited
by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains
and losses on investments and other assets or liabilities are reported as increases or decreases in
unrestricted net assets unless explicit donor stipulations or law restrict their use. Expirations of
temporary restrictions on net assets, that is, the donor-imposed stipulated purpose has been
accomplished and/or the stipulated time period has elapsed, are reported as reclassifications between
the applicable classes of net assets.
Contributions, including unconditional promises to give, are recognized as revenues in the period
received. Contributions subject to donor-imposed stipulations that are met in the same reporting
period are reported as unrestricted support. Promises to give that are scheduled to be received after
the balance sheet date are shown as increases in temporarily restricted net assets and are reclassified
to unrestricted net assets when the purpose or time restrictions are met. Promises to give subject to
donor-imposed stipulations that the corpus be maintained permanently are recognized as increases in
permanently restricted net assets. Conditional promises to give are not recognized until they become
unconditional, that is, when the conditions on which they depend are substantially met. Contributions
of assets other than cash are recorded at their estimated fair value. Contributions to be received after
one year are discounted at the appropriate rate commensurate with the risks involved. Amortization
6
(Continued)
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Notes to Financial Statements
June 30, 2008 and 2007
of the discount is recorded as additional contribution revenue in accordance with the donor-imposed
restrictions, if any, on the contributions.
The University reports contributions of land, buildings, or equipment as unrestricted support unless
the donor places restrictions on their use. Contributions of cash or other assets that must be used to
acquire long-lived assets are reported as unrestricted support provided the long-lived assets are
placed in service in the same reporting period; otherwise, the contributions are reported as
temporarily restricted support until the assets are acquired and placed in service.
Dividends, interest, and net gains (losses) on investments are reported as follows:
(b)
•
as increases in permanently restricted net assets if the terms of the gift require that they be
added to the principal of a permanent endowment fund;
•
as increases in temporarily restricted net assets if the terms of the gift impose restrictions on
the current use of the income or net gains; and
•
as increases in unrestricted net assets in all other cases.
Operations
The Statement of Unrestricted Revenues and Expenses reports the change in unrestricted net assets
from operating and nonoperating activities. Operating revenues consist of those items attributable to
the University’s academic programs or research conducted by the academic departments. Unrealized
gains and losses on investments, nonrecurring gains and losses pertaining to physical plant assets,
long-term debt refinancing, and settlements are reported as nonoperating items.
Expenses associated with the operation and maintenance, debt interest, and depreciation expense of
University plant assets are allocated on the basis of square footage utilized by the functional
categories.
Expenses associated with fundraising activities of the University were $1,164,328 and $1,123,832 in
2008 and 2007, respectively, and are included in institutional support in the Statement of
Unrestricted Revenues and Expenses. The amount of cash contributions received was $3,080,339
and $2,020,603 in 2008 and 2007, respectively.
(c)
Cash and Cash Equivalents
For the purpose of the Statement of Cash Flows, the University considers cash equivalents as
investments with maturities at date of purchase of three months or less. The cost of cash equivalents
approximates fair value.
(d)
Investments
Investments are stated at fair value. The estimated fair value of investments is based on quoted
market prices, except for an alternative investment, principally a privately held equity fund, for
which quoted market prices are not readily available, but which is not significant to total
investments. Management is responsible for the fair value measurements reported in the financial
statements. The University has implemented policies and procedures to assess the reasonableness of
7
(Continued)
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Notes to Financial Statements
June 30, 2008 and 2007
the fair values provided and believes that the reported fair values as of the statements of financial
position dates are reasonable.
(e)
Land, Buildings, and Equipment
Constructed and purchased property and equipment are carried at cost. Long-lived fixed assets, with
the exception of land, are depreciated using the straight-line method over their estimated useful lives,
which range from three to forty-five years. Costs of library books and periodicals are expensed in the
year acquired.
(f)
Student Deposits and Advance Payments
Students’ reservation deposits along with advance payments for tuition, room, and board and certain
expenditures which relate to the University’s summer or fall sessions have been deferred and will be
recorded as unrestricted revenues and expenses as they are earned.
(g)
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
(h)
Income Taxes
The University is a tax-exempt organization as described in Section 501(c)(3) of the Internal
Revenue Code and is generally exempt from income taxes pursuant to Section 501(a) of the Code.
Effective July 1, 2007, the University adopted Financial Accounting Standards Board (FASB)
Interpretation No. 48, Accounting for Uncertainty in Income Taxes – An Interpretation of FASB
Statement No. 109 (FIN 48). FIN 48 clarifies the accounting for uncertainty in income tax recognized
in an entity’s financial statements. FIN 48 requires entities to determine whether it is more likely
than not that a tax position will be sustained upon examination by the appropriate taxing authorities
before any part of the benefit can be recorded in the financial statements. It also provides guidance
on the recognition, measurement, and classification of income tax uncertainties, along with any
related interest or penalties. A tax position is measured at the largest amount of benefit that is greater
than fifty percent likely of being realized upon settlement. The adoption of FIN 48 had no impact on
the University’s financial statements.
(i)
Reclassification
Certain 2007 balances have been reclassified to conform to the 2008 presentation.
8
(Continued)
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Notes to Financial Statements
June 30, 2008 and 2007
(3)
Short-and Long-Term Investments
The University’s investments are summarized as follows at June 30:
Fair value
2008
Short-term investments:
Money market funds
Repurchase agreements
Certificates of deposit
Corporate bonds
U.S. government obligations
$
Total short-term investments
Long-term investments:
Preferred stocks
Common stocks
Alternative investment
Corporate notes
Corporate bonds
U.S. government obligations
Money market funds
Mutual funds – social fixed income
Total long-term investments
Total investments
$
2007
2,352,322
8,238,075
6,298,667
—
—
1,459,619
5,896,196
6,951,280
100,063
298,985
16,889,064
14,706,143
190,696
8,185,264
97,868
68,929
1,101,634
1,802,858
1,422,226
3,679,773
25,310
8,667,154
97,868
60,000
902,353
1,469,183
1,073,240
3,797,570
16,549,248
16,092,678
33,438,312
30,798,821
The following is the return on investments for the years ended June 30, 2008 and 2007:
2008
Dividends and interest
Net gain (loss) on sale of investments
Unrealized gain (loss) on investments
Total return on investments
2007
$
1,321,488
(239,831)
(1,153,450)
1,329,643
211,396
1,430,523
$
(71,793)
2,971,562
The University has interpreted relevant State law as generally permitting the spending of gains on
endowment funds over a stipulated period of time. State law allows the Board to appropriate a portion of
earnings on endowment as is prudent considering the University’s long-and short-term needs, present and
anticipated financial requirements, expected total return on its investments, price level trends, and general
economic conditions. Currently, the University records unrealized gains (losses) on the permanently
restricted net assets as temporarily restricted until appropriated by the University.
The University has agreed to make additional capital contributions totaling $200,000 in a private equity
fund. The timing and the amount of the contributions will be determined by the general partner.
9
(Continued)
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Notes to Financial Statements
June 30, 2008 and 2007
(4)
Accounts and Loans Receivable
Student accounts and other receivables at June 30, 2008 and 2007 are composed of the following:
2008
Student accounts receivable
Grants receivable
Other receivables
$
Total
Less allowance for student accounts receivable
Less allowance for other receivables
Student accounts and other receivable, net
$
2007
2,229,928
1,357,029
259,120
707,260
983,714
788,295
3,846,077
2,479,269
575,000
—
575,000
300,000
3,271,077
1,604,269
Student loans receivable is presented net of an allowance for doubtful accounts of $300,000 at June 30,
2008 and 2007.
(5)
Property and Equipment
Property and equipment at June 30, 2008 and 2007 are composed of the following:
Land
Land improvement
Buildings and leasehold improvements
Furniture and equipment
Motor vehicles
Construction in process
$
Total
Less accumulated depreciation
Net property and equipment
$
2008
2007
6,841,680
1,222,692
58,538,340
15,440,068
593,033
2,536,202
5,709,266
1,192,132
57,656,843
14,180,457
520,611
2,433,540
85,172,015
81,692,849
(32,517,155)
(29,256,201)
52,654,860
52,436,648
The University recorded depreciation expense of $3,305,166 and $3,134,010 for the years ended June 30,
2008 and 2007, respectively. Net interest in the amount of $354,048 and $392,523 was capitalized to
construction in progress for the years ended June 30, 2008 and 2007, respectively.
10
(Continued)
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Notes to Financial Statements
June 30, 2008 and 2007
(6)
Notes and Bonds Payable
Notes and bonds payable consist of the following at June 30:
Bonds payable:
Dormitory and Dining Facilities, Construction, and
Consolidation Bonds of 1972 payable to the Department
of Housing and Urban Development due serially to
2012 with interest at 3%. Certain dormitory buildings,
the cafeteria and student center are pledged as collateral
Fixed Rate Revenue Bonds issued May 2000 to the
New Hampshire Health and Education Facilities
Authority with monthly installments of principal
and interest until 2031; weighted average rate of 7.35%
Fixed Rate Revenue Bonds issued September 2003 to the
New Hampshire Health and Education Facilities
Authority with monthly installments of principal
and interest until 2034; weighted average rate of 5.17%
Fixed Rate Revenue Bonds issued June 2005 to the
New Hampshire Health and Education Facilities
Authority with monthly installments of principal
and interest until 2036; weighted average rate of 4.8%
Fixed Rate Revenue Bonds issued July 2006 to the
New Hampshire Health and Education Facilities
Authority with monthly installments of principal
and interest until 2027; weighted average rate of 4.5%
$
Total bonds payable
Premiums paid on bonds:
Premium on 2005 & 2006 Issues
Total notes and bonds payable and premium
$
2008
2007
300,000
390,000
2,065,000
2,500,000
9,450,000
9,800,000
36,535,000
36,815,000
8,570,000
8,890,000
56,920,000
58,395,000
386,407
403,812
57,306,407
58,798,812
In conjunction with the 2000, 2003, 2005 and 2006 bond issuances, the University is required to maintain
certain financial ratios, and believes it is in compliance with these requirements at June 30, 2008 and 2007.
In November 2006, the University issued Series 2006 bonds for $8,890,000. The proceeds were used to
advance refund the Series 1997 Bonds. The advanced refunding resulted in a loss of $336,286.
11
(Continued)
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Notes to Financial Statements
June 30, 2008 and 2007
Scheduled aggregate principal repayments of notes and bonds payable outstanding at June 30, 2008 are as
follows:
Fiscal year ending June 30:
2009
2010
2011
2012
2013
Thereafter
Total
$
1,150,000
1,200,000
1,200,000
1,260,000
1,265,000
50,845,000
$
56,920,000
The University has a $1,000,000 unsecured revolving line of credit. No borrowings were outstanding at
any time during the years ended June 30, 2008 or 2007. Advances on the line of credit bear interest at the
1 Month LIBOR rate plus 1.5% (3.9625% at June 30, 2008).
(7)
Temporarily Restricted Net Assets
Temporarily restricted net assets consist of the following at June 30:
Purpose restrictions:
Scholarships
Building
$
Unappropriated gains on investments
Time restrictions:
Scholarships
$
2008
2007
205,680
486,680
244,039
685,263
692,360
929,302
702,562
1,190,038
226,496
148,238
1,621,418
2,267,578
Unspent endowment gains and income are classified as temporarily restricted until the University
appropriates and spends such sums in accordance with the terms of the underlying endowment and relevant
State law, at which time they will be reclassified to unrestricted revenues.
12
(Continued)
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Notes to Financial Statements
June 30, 2008 and 2007
(8)
Permanently Restricted Net Assets
Permanently restricted net assets consist of the following at June 30:
2008
Endowment funds for:
Academic support
Student aid
(9)
2007
$
378,078
6,278,277
370,744
4,319,314
$
6,656,355
4,690,058
Net Assets Released from Restrictions
Net assets released from temporary donor restrictions were as follows for the years ended June 30:
2008
Purpose restrictions:
Student aid and other
Time restrictions:
Student aid and other
$
$
2007
399,164
64,829
7,300
6,200
406,464
71,029
(10) Contributions Receivable
Contributions receivable are summarized as follows at June 30:
Unconditional promises expected to be collected in:
Less than one year
One year to five years
$
Less allowance for uncollectibles
Less discount to present value
Contributions receivable
$
2008
2007
202,089
115,153
106,719
106,056
317,242
212,775
(79,310)
(11,436)
(53,194)
(11,343)
226,496
148,238
(11) Retirement Plan and Trust
The University has a defined contribution retirement plan (the Plan) covering substantially all full-time
employees. The Master Agreement between the University and its professional employees provides for a
Plan contribution by the University equal to 8% of each participant’s base salary for plan year 2006 with a
quarter point increase each year thereafter until the plan reaches 9%. Total pension expense attributable to
the Plan was approximately $1,982,000 in 2008 ($1,881,000 in 2007). Total employer contributions to the
Trust were $1,881,219 for August 31, 2007 ($1,727,279 for August 31, 2006).
13
(Continued)
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Notes to Financial Statements
June 30, 2008 and 2007
Contributions are fully vested after attainment of more than three years of 1,000 or more hours of service
by the participant. Normal retirement age is 55 years old.
Under the terms of the Master Agreement between the University and the faculty and professional staff,
certain covered employees are eligible for a supplemental payment related to prior changes to the
University’s benefit plans. The University expects to distribute $56,000 as specified in the Master
Agreement.
(12) Deferred Compensation
Effective December 2002, the University offered a deferred compensation plan under which eligible
employees may elect to defer a portion of their annual compensation for payment in future periods. Under
the plan, deferred wages are payable at the participant’s election at a date certain, or at times of
unforeseeable emergency, or at termination of the participant’s employment with the University.
Participation in the plan is limited to a select group of management and highly compensated employees.
Assets of the plan are recorded at fair value and were approximately $308,000 at June 30, 2008
(approximately $256,000 at June 30, 2007, and consisted primarily of investments in mutual fund
securities. An offsetting liability has been recorded for these amounts.
(13) Operating Leases
The University leases certain classrooms and office space under various leases. The leases generally
require that the University pay for insurance, maintenance and certain other operating expenses, and
provide for rent adjustments in the event of changes in real estate taxes. Rent expense under operating
leases was $1,325,647 in 2008 ($1,288,005 in 2007).
Scheduled future minimum rental payments under operating leases as of June 30, 2008 are as follows:
Fiscal year ending June 30:
2009
2010
2011
2012
2013
Thereafter
$
1,167,000
936,997
978,968
843,077
879,913
4,101,957
(14) Disclosure About Fair Value of Financial Instruments
In accordance with the requirements of Statement of Financial Accounting Standards No. 107, Disclosures
About the Fair Value of Financial Instruments, the estimated fair values of the University’s financial
instruments as of June 30, 2008 and 2007 have been determined by using, where practicable, appropriate
valuation methodologies.
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(Continued)
SOUTHERN NEW HAMPSHIRE UNIVERSITY
Notes to Financial Statements
June 30, 2008 and 2007
Using discounted cash flow analysis, the University determined that the estimated fair value of its total
indebtedness was approximately $51,546,000 and $57,840,000 at June 30, 2008 and 2007, respectively.
The University further determined that the difference between the carrying values and estimated fair values
of its other financial assets and liabilities at June 30, 2008 and 2007 were not material.
(15) Sale of Property
In 2005, the University sold certain real estate located in Hooksett, New Hampshire, referred to as “North
Campus,” in the aggregate amount of $2,719,003 resulting in a gain on sale of $2,037,396. The University
received a note receivable in the amount of $150,000 resulting from the sale with zero percent (0%)
interest and due on or before August 14, 2006. The maturity has been subsequently extended by mutual
consent to November 2008.
(16) Litigation
The University is engaged in routine civil litigation, including employment, personal injury and other
claims. Additionally, in fiscal 2008, the University settled a civil action filed in Federal District Court,
New Hampshire entitled Israel College v. the Southern New Hampshire University. The settlement was for
$1,500,000 of which $500,000 was accrued by the University in the 2007 fiscal year and was included in
general institutional expenses. The $1,000,000 current year settlement is included as nonoperating expense
in 2008.
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