QUARTERLY
FINANCIAL REPORT
Quarterly Financial Statements and Financial Plan
Quarter ending September 30, 2007
Michelle Aguilar
Assoc Dir of Financial Accounting
(518)434-7025
michelle.aguilar@rfsuny.org
Contents
Introduction ................................................................................ 1
Executive Summary ................................................................... 1
Balance Sheet Review ................................................................ 3
Statement of Activities Review .............................................. 12
Statement of Cash Flow Review ............................................ 15
Financial Plan Review .............................................................. 17
Introduction
As stated in its charter, the Finance Committee is charged with working with Research Foundation
(RF) management to provide advice and input to the RF’s board of directors regarding fiscal
management for the corporation, its subsidiaries and affiliated corporations. The duties of this
committee include:




Identifying, assessing and managing financial risks and uncertainties
Continuously improving financial systems
Complying with legal and regulatory requirements
Ensuring the overall financial health of the corporation
Key to the committee’s ability to fulfill these duties is a strong understanding of the RF’s quarterly
financial activity, and the Treasurer’s Report was created to provide the data needed to effectively and
efficiently monitor the corporation’s financial health. This report includes an analysis of the
corporation’s balance sheet, statement of activities and statement of cash flows. This report is
compiled on an accrual basis.
The quarterly review of the Financial Plan compares the board-approved operating budget to a
projected budget and actual quarter-end results. The RF’s operating budget explains how the RF will
earn and allocate revenue during its fiscal year that runs from July 1 through June 30. The Financial
Plan is compiled on a cash basis.
Executive Summary
The financial statements provide the amount and nature of the organization’s assets, liabilities and net
assets. They present the effect transactions and events have on the amount of net assets, and the
amount and kind of inflows and outflows of economic resources. The financial statements provide a
basis for assessing the liquidity and financial flexibility of the organization.

Accounts Receivable for sponsored program activity has increased $6 million in comparison to
fiscal year end. Included in the accounts receivable balances are “At-risk” deficit awards, those
awards that have not received an official award document, which have decreased 41 percent
compared to fiscal year end.

Investments totaled $302.6 million at the end of September 2007, a decrease of 2.3 percent for
the fiscal year. (See Investment chart on page 6) The year-to-date rates of return by pool are:
Operational pool
Retiree health pool
Endowment pool
Liquid pool
Planned giving pool
-1-
3 months
Annual
Target
1.90%
1.00%
0.90%
1.20%
2.00%
6.00%
8.25%
8.25%
n/a
8.00%

Corporate debt decreased $0.5 million compared to FYE 2007. All OASIS debt was paid off in
fiscal year 2007 and no new capital leases were added during the first quarter (see Corporate
Debt chart on page 10). The RF also has building-related debt for 35 State Street. The RF
took advantage of an interest rate swap in fiscal year 2006 to eliminate interest rate exposure
and for the current fiscal year the swap netted cost savings of $2,509.

Net assets of the RF represent funds that primarily consist of campus unexpended balances,
accrual liabilities, corporate reserves and investment reserves as outlined in the RF’s boardapproved Financial Plan. Net assets have increased $6.3 million or 12.1 percent from FYE
2007 due to the following: current year investment income and inventions and license income
less payments due to inventors and the first quarter estimate for FAS 106 expense.
1st quarter
September 30
Designated for development activity at
the campuses as outlined in the RF's
board approved Financial Plan
Invested in fixed assets, net of related
debt
Corporate reserve
Investment reserve
Liabilities unfunded
Total unrestricted net assets
-2-
FYE 2007
$ 172,934
$ 162,848
11,858
4,460
22,898
(154,071)
$ 58,079
11,705
4,263
22,898
(149,923)
$ 51,791
Balance Sheet Review
Balance Sheet: As of September 30
ASSETS
Current Assets
Cash and cash equivalents
Accounts receivable, net
Advances to others
Short-term investments
Short-term investments - designated for
post-retirement benefit obligation
Total current assets
1st quarter
September 30th
$
Noncurrent Assets
Long-term investments
Long-term investments – designated for
post-retirement benefit obligation
Due from broker for securities sold
Fixed assets, net
Other assets
Total noncurrent assets
Total assets
LIABILITIES
Current Liabilities
Accounts payable and accrued expenses
Accrued compensation
Accrued vacation
Deferred revenue
Current portion of post-retirement benefit obligation
Current portion of long-term debt
Line of credit
Total current liabilities
-3-
647,707
149,966,645
582,105
108,012,414
5,314,000
270,117,661
5,314,000
264,522,871
114,808,466
124,439,126
77,450,228
2,897,234
20,242,372
2,528,653
217,926,953
74,723,719
2,981,321
20,637,193
2,528,653
225,310,012
488,044,614
$
489,832,883
$
54,161,528
8,982,920
22,861,802
107,086,852
5,314,000
1,358,016
16,523,786
216,288,904
$
60,167,825
15,085,530
22,563,534
108,660,121
5,314,000
1,527,280
14,613,865
227,932,155
Total liabilities
NET ASSETS
Total liabilities and net assets
$
$
Noncurrent Liabilities
Deposits held for others
Post-retirement benefit obligation, net of current portion
Due to broker for securities purchased
Long-term debt, net of current portion
Other liabilities
Total noncurrent liabilities
Unrestricted
1,226,166
155,956,035
1,760,774
105,860,686
FYE
2007
$
3,781,159
196,811,509
3,696,475
7,026,525
2,361,109
213,676,777
3,755,609
190,835,000
5,753,552
7,404,332
2,361,109
210,109,602
429,965,681
438,041,757
58,078,933
51,791,126
488,044,614
489,832,883
Balance Sheet
The balance sheet, also known as the statement of financial position, provides information about the
RF’s liquidity, financial flexibility and financing needs. Three ratios that will help us measure how we
are doing in these areas are: current ratio (see below, Current Assets below), primary reserve ratio (see
page 11, Net Assets) and debt burden ratio (see page 9, Long Term Debt).
Current Assets
An asset has economic value to its owner and includes real property, such as land or buildings, and
personal property, such as cash and investments. The RF’s current assets, assets that can be converted
to cash in less than one year, include cash and cash equivalents, net accounts receivables, advances to
others and short-term investments.
An indication that an organization has the ability to meet its short-term obligations can be measured
by using the Current Ratio. The Current Ratio equals current assets divided by current liabilities and is
measured at 1.25:1 and 1.16:1, respectively, for quarter end September 2007 and FYE 2007. National
Association of College and University Business Officers (NACUBO) standards hold that this should
be about a 2:1 ratio. While the RF may not be meeting NACUBO standards, operational pool
investments are classified as both short-term and long-term investments and the long-term can be
liquidated at any time to meet operational needs.
Cash and Cash Equivalents
The RF’s cash consists of bank account balances, money market funds and the line of credit.
The RF’s cash and cash equivalents were $1.2 million as of September 30, 2007 compared to
$0.6 million at fiscal year end. The fluctuations in daily bank activity and outstanding check
balances cause this amount to increase or decrease.
Accounts Receivable, Net
This represents deficit amounts where the RF paid bills for sponsored programs activities
before receiving money from sponsors, and reflects the amount due to the RF from sponsors.
The accounts receivable balance also includes the fringe benefit pool balance, which is a deficit
balance once accruals are accounted for.
In comparison to fiscal year end, sponsored programs accounts receivable increased $6 million
or 4 percent. This increase is mainly due to an increase in campus deficit balances ($25
million), a decrease in accruals of $9 million and a decrease of $10 million in operational
activity.
Advances to Others
This represents net agency activity. “Agency” designates those university-related organizations,
such as campus-based foundations or campus-based clinical practice plans, that use RFprovided human resources/payroll and purchasing/payables administration services. Each year
the RF subtracts its working capital uses (or deficits) from its working capital (or surpluses).
When this balance is negative, it’s reported as Advances to Others. When this balance is
positive, it’s considered Deposits Held for Others and is reported under the Current Liabilities
category.
At September 30, this balance was $1.8 million compared to $0.6 million at FYE 2007.
-4-
Short-term Investments
The RF has two types of short-term investments: liquid and operational. A liquid money
market fund is used as an investment tool for the major nanoelectronics program at the
University at Albany. As of September 2007, short-term investments were $105.9 million. At
quarter end, a reclassification is made to ensure that the short-term investment balance is equal
to the deferred revenue balance less cash and cash equivalents.
Short-term Investments Designated for Post-retirement Benefit Obligation
This investment represents assets that are restricted by the board to pay post-retirement
medical benefits for current and future retirees. (see page 6, Long-term Investments
Designated for Post-retirement Benefit Obligation, for more information).
Non-current Assets
The RF’s non-current assets are assets that generally will not be converted to cash for a period of one
year or more. Assets include long-term investments, long-term investments designated for postretirement benefit obligation, net fixed assets and other assets.
Long-term Investments
Operational Pool: Funds in this pool consist of cash advances from sponsors, agency funds that
are received because the RF provides human resources and accounts payable administration
services to the State University of New York (SUNY) and SUNY-related organizations; and
campus reserve funds designated for campus development activities.
Endowment Pool: This pool is composed of gifts from donors who stipulate that the principal be
maintained inviolate and in perpetuity as a condition of the gift. These are restricted funds.
Planned Giving Pool: The Charitable Gift Annuity Pool consists of irrevocable charitable gifts
from donors who receive lifetime annuity payments.
Long-term Investments Designated for Post-retirement Benefit Obligation
As health care costs continue to grow, the RF is committed to funding the liability for retiree
health insurance. During FY 2005 the RF board of directors approved a funding policy
whereby money from current grants (calculated by applying a fringe benefit rate to salaries and
wages) will be collected and placed into the retiree health reserve fund over time. During FY
2007, $7.7 million was transferred from the regular fringe pool surplus to the retiree health
insurance pool. It is anticipated that an additional $7.7 million will be funded in fiscal year
2008.
The sum of the RF’s total investments was $302.6 million at the end of September 2007, a
decrease of 2.3 percent for the fiscal year. Due to/Due from broker represents investment
trade activity that has not been settled by the end of the period. These net amounts are
included in the Investment Portfolio chart below.
The fiscal year-to-date rates of return by pool are: operational pool, 1.9 percent; retiree health
insurance pool, 1.0 percent; endowment pool, 0.9 percent; liquid pool, 1.2 percent; and
planned giving pool, 2.0 percent. The “Other” grouping on the chart below consists of the
RF’s Investment in Equity Partnership of $1.8 million and the market value of equities
received in lieu of royalties of $0.6 million.
-5-
Investment Portfolio by Pool
(In Thousands)
$981
$1,104
Planned Giving
$$-
Short Term
$2,774
$2,677
Endowment
$2,480
$2,480
Other
$6,577
$4,859
Liquid
$80,038
$80,844
Retiree Health Ins
$216,867
$210,670
Operational
$309,717
$302,634
Total
-
50,000
100,000
150,000
200,000
September 2007
250,000
300,000
350,000
FYE 2007
Fixed Assets, Net
The RF’s office furniture, equipment, information system and the corporate office building are
reported by subtracting each item’s accumulated depreciation from its actual cost. This is
known as capitalization. Generally, title to equipment purchased using sponsored funds is
retained by the sponsor until it is determined who will actually keep the item. This means that
purchases of equipment charged to a grant or contract are not capitalized.
The RF’s recorded net fixed assets decreased from $20.6 million at FYE 2007 to $20.2 million
at September 30, due to depreciation levels in excess of fixed asset purchases.
Other Assets
Other assets are comprised of the interest rate swap valuation and funds maintained as part of
a deferred compensation plan set up in accordance with section 457(b) of the Internal
Revenue Code. The RF entered into an interest rate swap (swapping a variable rate to a fixed
rate of interest) to eliminate the interest rate exposure on the debt for the corporate office
building located at 35 State Street. These amounts are only adjusted at year end and will
remain the same from quarter to quarter.
-6-
Current Liabilities
A liability is a financial obligation, or the cash outlay that must be made at a specific time, to satisfy the
contractual terms of such an obligation. The RF’s current liabilities, liabilities that must be paid within
one year, include accounts payable, accrued expenses, compensation and vacation, deferred revenue,
the current portion of the post-retirement benefit obligation and long-term debt, and the RF’s line of
credit.
Accounts Payable and Accrued Expenses
These are amounts the RF owes for vendor payments, abandoned property and interest
payable. It also includes the IBNR (incurred but not recorded) accrual for benefit costs such as
workers’ compensation, health care, prescription drugs, dental and vision.
Accounts payable and accrued expenses were $54.2 million as of September 30, a 10 percent
decrease from FYE 2007, which is mainly due to a decrease in the IBNR and accounts payable
accruals, and an increase in the interest payable to sponsors. Interest payable to sponsors
includes $4.9 million earned on separately invested funds related to nanotechnology activity at
the University at Albany.
Accrued Compensation
This represents amounts for payroll due to employees at the end of a financial period and
accrued sick leave.
Accrued Vacation
This represents amounts for employee accumulated vacation pay. The year end accrual is
based on actual data received from campuses and is estimated for each quarter end during the
fiscal year.
Deferred Revenue
This represents surplus amounts for sponsored programs activity that occur when the RF
receives money from sponsors before it has to make expenditures for those sponsors’
programs. Deferred revenue decreased $1.6 million or 1.4 percent from year end.
Current Portion of Post-retirement Benefit Obligation
This liability represents the actuarially-determined amount incurred to pay current retiree
medical benefits.
Current Portion of Long-term Debt
Current portion of long-term debt is the current portion of amounts borrowed to finance the
corporate office building, the RF information system and some capital leases. The balance as
of September 30 was $1.4 million compared to $1.5 million as of FYE 2007.
Line of Credit
The RF has two lines of credit. First, $35 million is allocated to use on an overnight basis to
supplement the corporation’s daily cash flow needs. This minimizes the impact that routine
fluctuations in daily cash flow have on the RF’s investment program by allowing investment
managers to maintain a steady portfolio level and enhances long-term earnings. Second, $45
million is available to support campus sponsored programs debt.
-7-
As of September 30, the RF’s line of credit liability in support of daily cash flow needs was
$16.5 million on an accrual basis. In July 2006, the RF advanced SUNY System Administration
– Provost $8 million to cover temporary sponsored program deficits of which $2 million was
paid back in October 2006. The remaining $10.5 million is the reclass of outstanding checks.
Non-current Liabilities
The RF’s non-current liabilities, liabilities that won’t be paid for a period of one year or more, include
deposits held for others, the long-term portion of the post-retirement benefit obligation, long-term
debt and other long-term liabilities.
Deposits Held for Others
In contrast to current liabilities, this category represents money that was invested in the
Endowment Pool because a condition of the gift was that the principal be maintained inviolate
and in perpetuity. Also included are planned gifts of $1.1 million that were donated to campus
foundations.
Long-term Portion of Post-retirement Benefit Obligation
This liability represents the actuarially-determined amount incurred to pay future retiree
medical benefits pursuant to Financial Accounting Standards (FAS).
In addition, the board authorized management to change the contribution level for retirees to
mitigate the future cost of this benefit. This change is still pending.
Post-retirement Benefit Obligation
250.0
196.1
200.0
150.0
132.0
117.0
105.9
100.0
116.8
91.6
80.0
60.8
50.9
50.0
0.0
FY 2005
FY 2006
Assets
Funding Liability
FY 2007
Balance Sheet Liability
Long-term Debt
This liability comprises amounts borrowed to finance the corporate office building located at
35 State Street in Albany, the RF information system, and capital leases from Xerox and Sun
for equipment used to support the Oracle applications.
-8-
The Corporate Debt chart below depicts the total short- and long-term debt. Regarding the
35 State Street building debt, the RF took advantage of an interest rate swap in fiscal year 2006
to eliminate interest rate exposure that occurred as a result of rising variable interest rates. In
FY 2006, the RF entered into a new four-year lease with SUN Microsystems for an equipment
upgrade to support the Oracle Upgrade.
The debt burden ratio displays the RF’s dependence on debt as a source of financing its
mission and the relative cost of debt to overall expenses. It compares the current level of debt
service with the corporation’s operating expenses. The RF’s annualized debt burden ratio for
FYE 2008 is 4.85% compared to 5.13% for FYE 2007. A declining trend in ratios, means that
additional resources can be used for general operating purposes and that debt service has
sufficient coverage. Investment bankers have identified an upper threshold for this ratio at 7
percent, meaning that debt service should not be greater than 7 percent of operating costs.
Corporate Debt
(In Thousands)
10,000
7,500
6,380
6,255
6,125
5,990
2,708
4,205
5,845
5,000
3,350
2,736
2,500
2,540
0
Sep-03
Sep-04
Sep-05
Building - Related
Sep-06
Sep-07
Capital Leases
Other Long-term Liabilities
Other long-term liabilities comprise funds maintained as part of a Deferred Compensation
Plan set up in accordance with section 457(b) of the Internal Revenue Code. This amount is
only adjusted at year end and will remain the same from quarter to quarter.
Net Assets
The net assets of the RF represent funds that primarily consist of campus unexpended balances,
corporate reserves and investment reserves as outlined in the RF’s board-approved Financial Plan.
Net assets have increased $6.3 million or 12.1 percent from FYE 2007 due to the following: current
year investment income and inventions and license income less payments due to inventors and the
first quarter estimate for FAS 106 expense.
-9-
1st quarter
September 30
Designated for development activity at
the campuses as outlined in the RF's
board approved Financial Plan
Invested in fixed assets, net of related
debt
Corporate reserve
Investment reserve
Liabilities unfunded
Total unrestricted net assets
FYE 2007
$ 172,934
$ 162,848
11,858
4,460
22,898
(154,071)
$ 58,079
11,705
4,263
22,898
(149,923)
$ 51,791
The Primary Reserve Ratio measures the financial strength of the organization by comparing net
assets that an institution can quickly access and spend to satisfy its obligations. It also describes the
organization’s ability to support its current operations from all available expendable resources without
relying on additional net assets. A positive ratio and an increasing ratio over time denotes strength.
The RF’s Primary Reserve Ratio on an annualized basis for FY 2008 is .36 and .30 for FYE 2007.
This means the RF could operate for three months without additional net assets.
-10-
Statement of Activities Review
Statement of Activities: Period ending September 30
The amount of money earned and spent by the RF is stated on the corporation’s statement of
activities. The RF monitors and controls this activity through the RF’s annual board approved
Financial Plan that ensures that allocations equal revenue for each fiscal year. Campuses can use
unspent revenues from prior years to cover expenditures that exceed the current year’s revenue
allocation.
1st quarter
September 30
REVENUES
Grants awarded for research and other sponsored activities
Investment income
Inventions and licenses income
Other income
Total revenues
$
FYE 2007
196,566,661 $
4,193,082
9,826,776
3,599,753
214,186,272
790,877,032
32,527,221
11,108,624
23,779,196
858,292,073
162,182,978
45,715,488
207,898,466
666,572,487
174,230,888
840,803,375
Net increase (decrease) in net assets before
cumulative effect of change in accounting principle
6,287,806
17,488,698
Cumulative effect of change in accounting principle
-
(51,290,000)
6,287,806
(33,801,302)
51,791,126
85,592,428
58,078,932 $
51,791,126
EXPENSES
Sponsored programs and other activities
Administration and support
Total expenses
Net increase (decrease) in net assets
Net assets at beginning of year
Net assets at end of year
$
Revenues
Grants and gifts awarded for sponsored research activities totaled $196.6 million for the first quarter
and represents 92 percent of the RF’s total revenue.
Grants Awarded for Research and Other Sponsored Activities
This is comprised of direct revenue awarded for sponsored activities, and facilities and
administrative (F&A) cost recoveries for sponsored activities. Revenues are indicating a slight
increase for the fiscal year due to industry and other sponsors.
Investment Income
The RF invests the cash it receives from sponsors, agencies and its own operating reserves in
its operational pool to earn income. The money is invested according to the RF’s investment
policy and guidelines.
-11-
Investment income was $4.2 million as of September 2007 and the operating pool rate of
return for the first quarter was 1.9 percent.
Inventions and Licenses Income
Inventions that result from sponsored research belong to the RF, which is responsible for
protecting the intellectual property and commercializing these technologies as part of its
technology transfer service.
The RF’s inventions and licenses income for the first quarter was $9.8. This includes $8
million for a new royalty license at Stony Brook University.
Other Income
Other income includes non-program gift income, non-sponsored income, agency fee income
and third party recharges.
Revenues:
Federal grants and contracts
State grants and contracts
Local grants and contracts
Private grants and contracts
Investment income
Net realized and unrealized gains
Gifts
Capital gifts and grants
Inventions and licenses income
Other income
Total Revenues
1st quarter
September 30
$ 139,677,116
22,598,936
2,831,638
31,458,971
1,607,800
2,585,282
3,828
9,826,776
3,595,925
$ 214,186,272
FYE 2007
$ 507,836,783
139,023,333
12,352,061
131,664,855
9,803,414
22,723,807
184,892
130,000
11,108,624
23,464,304
$ 858,292,073
Expenses
Total expenses for the RF for the first quarter of FY 2008 were $207.9 million. Expenditures are
segregated into two areas:


Sponsored programs: expenses for externally-funded research
Corporate: administration and support expenses for campus and central office operations.
Sponsored Programs
Sponsored programs revenue is driven by sponsored programs expenditures. Direct
expenditures through the first quarter were $162.2 million. The RF’s total direct expenditures
include the categories of salaries, fringe benefits, equipment, subawards and other.
-12-
Administration and Support
The RF’s campus and central office locations incur costs to have the infrastructure and staff in
place to administer sponsored programs and other services. The RF uses the money it receives
from F&A cost recovery, investments and agency fees to pay for these expenditures. The RF’s
expenditures through the first quarter totaled $45.7 million
Expenses by Function:
Instruction
Research
Public Service
Academic support
Student services
Operations & maintenance
Institutional support
Scholarships & Fellowships
Auxiliary enterprises
Hospitals
Depreciation and amortization
expense
Interest expense on capital
related debt
Loss on disposal of plant assets
Other operating expenses
Total Expenses
-13-
1st Quarter
September 30
$
$
31,241,427
90,826,631
32,583,283
2,992,519
540,990
7,155,613
40,575,450
670,341
4,379
-
FYE 2007
$
121,420,686
410,941,272
119,851,967
11,153,866
1,867,456
18,688,064
146,117,497
4,194,083
688,996
733
1,002,153
4,304,629
113,595
192,085
207,898,466
379,462
1,194,664
840,803,375
$
Statement of Cash Flow Review
Statement of Cash Flow: 1st quarter, September 30
1st quarter
September 30
FYE 2007
Cash flows from operating activities
Federal grants and contracts
$ 131,789,063 $ 497,430,258
State and local grants and contracts
17,131,706
114,700,479
Private gifts and grants
32,422,827
119,732,748
Other receipts
48,509,720
164,879,453
Salaries and wages payments
(110,296,856)
(363,868,262)
Employee benefits payments
(34,549,354)
(112,122,948)
Payments to suppliers/vendors
(90,042,497)
(424,760,533)
Operating interest, dividends and investment gains
1,607,800
8,332,762
Equity investment partnership income
1,470,652
Interest payments on capital debt/notes
(113,595)
(379,462)
Other payments
(5,972,936)
(16,194,053)
Net cash (used in) provided by operating activities
(9,514,122)
(10,778,906)
Cash flows from financing activities
Principal payments on long-term debt
(547,071)
(2,123,249)
Proceeds from line of credit
18,146,708
124,926,544
Payments on line of credit
(16,236,787)
(125,312,679)
Net cash (used in) provided by financing activities
1,362,850
(2,509,384)
Cash flows from investing activities
Proceeds from sales of investments
190,400,328
478,413,143
Purchases of investments
(99,871,180)
(467,799,916)
Equity investment partnership distribution
1,045,869
Cash paid for purchases of fixed assets
(799,417)
(3,528,429)
Net cash provided by (used in) investing activities
8,729,731
8,130,667
Net (decrease) increase in cash and cash equivalents
578,459
(5,157,623)
Cash and cash equivalents, beginning of year
647,707
5,805,330
Cash and cash equivalents, end of year
$
1,226,166 $
647,707
Reconciliation of change in net assets to net cash (used in) provided by operating activities
Change in net assets
$
6,287,806 $ (33,801,302)
Adjustment to reconcile change in net assets to net cash provided by operating activities
(22,723,807)
Realized and unrealized gain on investments
(2,585,282)
21,852
Unrealized loss (gain), interest rate swap
4,304,629
Depreciation expense
1,002,153
1,286,764
Loss on disposal of fixed assets
192,085
(37,900)
Donated fixed assets
51,290,000
Cumulative effect of change in accounting principle
Change in assets and liabilities
(24,257,077)
Accounts receivable and other assets
(7,168,059)
(183,153)
Accrued investment income
(139,023)
9,503,174
Accounts payable and accrued expenses
(6,006,296)
3,704,025
Other accruals and other liabilities
(5,804,342)
(28,375,306)
Deferred revenue
(1,573,269)
591,724
Deposits held for and advances to others
25,550
27,897,471
Post-retirement benefit obligation
5,976,509
$ (10,778,906)
Net cash (used in) provided by operating activities
$ (9,514,122)
-14-
Statement of Cash Flow
This statement provides relevant information about the corporation’s activities in generating cash
through operations, its financing activities, and its expenditures for operations, debt repayment and
maintaining operating capacity. The bottom line is the net increase or decrease in cash for the period.
Cash Flows from Operating Activities
Cash flow from operating activities adds the net cash from each type of operating activity to
get the total net cash for all operating activities.
Cash Flows from Financing Activities
Cash flow from financing activities includes the sources and uses of cash for financing
activities such as the corporate debt and line of credit.
Cash Flows from Investing Activities
Cash flow from investing activities includes purchasing investments (a use of cash) and selling
investments (a source of cash).
In the first quarter of FYE 2008, operational cash flow was a negative $9.5 million due to
increases in sponsored program deficits. The operational shortfall was offset by net financing
activity of $1.4 million and net investment activity of $8.7 million.
-15-
Quarterly Financial Plan
Operating Budget
(In Thousands)
FY 2008
Plan
FY 2008
Projected
FY 2008
Actual
As of 9/30/07
Revenues
Restricted Revenue
Sponsored Programs Direct
Agency Direct
Total Restricted Revenue
644,182
139,469
783,651
644,182
139,469
783,651
172,137
38,960
Unrestricted Revenue
Sponsored Programs F&A Cost Recovery
Agency Service Fees
Investment Income - Operations Pool
Equity Distribution from LLCs
Royalties
Gifts and Other
Total Unrestricted Revenue
127,132
4,757
14,760
1,471
10,373
9,530
167,991
128,000
4,869
14,760
1,471
18,343
9,530
176,972
35,657
1,386
3,809
368
12,635
1,903
55,757
SUNY Campuses
Central Office
SUNY System Administration
Royalty Inventors' share
Corporate Reserve
Investment Income Reserve
136,969
25,638
2,460
4,137
3,268
(4,480)
142,624
25,139
2,460
7,337
3,892
(4,480)
44,900
6,514
615
3,876
973
(1,120)
Total Allocations
167,991
176,972
55,757
211,097
Allocations
Note:
Fiscal 2008 Plan numbers represent preliminary estimates made prior to fiscal year end 2007.
Fiscal 2008 Projected numbers represent revised estimates based on fiscal year end 2007 actual results.
Fiscal 2008 Actual numbers represent actual revenue and allocations received to date
-16-
Sponsored Programs Direct
According to the 2008 Financial Plan, the RF estimated a slight decrease in sponsored program direct
activity for FY 2008. Through the first quarter, sponsored program direct activity is up 3.2 percent
compared to last September.
Sponsored Program Direct Revenue
(In Thousands)
200,000
160,855
167,459
166,782
Sep-05
Sep-06
172,137
150,000
139,144
100,000
50,000
0
Sep-03
Sep-04
Sep-07
Agency Direct
According to the 2008 Financial Plan, the RF estimated an increase in agency direct activity for FY
2008. Through the first quarter, agency direct activity is up 15.3 percent compared to last September.
This increase is primarily due to a new fiscal services agreement with Kaleida Health at University at
Buffalo.
Agency Direct Revenue
(In Thousands)
50,000
38,960
40,000
30,000
23,773
33,089
33,800
Sep-05
Sep-06
25,647
20,000
10,000
0
Sep-03
-17-
Sep-04
Sep-07
Sponsored Programs F&A Cost Recovery
According to the 2008 Financial Plan, the RF estimated a slight increase in sponsored programs F&A
cost recovery for FY 2008. For the first quarter, actual F&A cost recovery was $35.7 million, a 2.7
percent increase in comparison to September 2006.
Sponsored Programs F&A Cost Recovery
(In Thousands)
40,000
32,924
30,000
34,733
35,657
32,418
28,688
20,000
10,000
0
Sep-03
Sep-04
Sep-05
Sep-06
Sep-07
Agency Service Fees
According to the 2008 Financial Plan, the RF estimated a slight decrease in agency service fees for FY
2008. Actual fees received for the first quarter decreased 2 percent compared to September 2006.
Agency Service Fees
(In Thousands)
2,000
1,403
1,500
1,416
1,386
1,110
1,000
911
500
Sep-03
-18-
Sep-04
Sep-05
Sep-06
Sep-07
Royalty Income
According to the 2008 Financial Plan, the RF estimated a slight decrease in royalty income for FY
2008. Actual royalty revenue has increased significantly due to a new royalty license at Stony Brook
University.
Royalty Income
(In Thousands)
15,000
12,635
12,000
9,000
7,180
6,654
6,000
5,530
5,459
3,000
Sep-03
Sep-04
Sep-05
Sep-06
Sep-07
Investment Income
The RF works with an investment consultant and uses trend data to project the expected return on the
portfolio. The operational investment pool has a long-term targeted rate of return of 8.4 percent. The
Financial Plan projected the return for FY 2008 at 7 percent which would produce annual income of
approximately $14.8 million.
Investment income for the year is down compared to last fiscal year but appears to be on target with
financial plan estimates.
Investment Income
(In Thousands)
30,000
27,993
25,000
20,000
15,000
10,000
5,000
6,273
6,051
8,137
3,809
Jun-05
-19-
Jun-06
Jun-07
Sep-06
Sep-07
Equity Distributions, Gifts & Other
Equity distributions from limited liability companies (LLCs) represent the RF’s partnership in the
affiliated corporation Brookhaven Science Associates, LLC.
Campuses and central office receive gifts and other unrestricted revenue that does not fit into the
other major revenue categories. Examples include revenue from sales of equipment, unrestricted
donations, nonsponsored income and revenue from third party recharge awards.
Gifts & other income received for the first quarter was $1.9 million. Gifts and other income have a
large increase due to new activity from third party recharges. Third party recharges are when outside
parties utilize the services of a RF service center.
Equity Distributions, Gifts & Other
(In Thousands)
16,000
14,732
14,000
12,000
10,000
8,000
6,000
4,000
1,933
2,000
-
387
Jun-05
1,299
1,395
1,903
234
1,186
Jun-06
Jun-07
LLCs
253
Sep-06
368
Sep-07
Other Income
Financial Budget
The allocation methods are described in detail in the Operating Budget of the Financial Plan approved
by the board in October. Once the allocations are approved, central office forecasts the corporation’s
cash needs based on its projected expenditures in the fiscal year. The RF makes expenditures in three
areas:



-20-
Sponsored Programs: Expenses for externally-funded research
Agency: Expenses for campus-related organizations
Corporate: Expenses for campus and central office operations
Sponsored Programs Expenditures
For FY 2008, the RF projected it would have $772 million in sponsored program expenditures. At the
end of the first quarter, sponsored program expenditures were $207.8 million compared to $201.5
million last year.
Sponsored Program Expenditures by Type
(In Thousands)
250,000
225,000
200,000
175,000
193,779
199,877
201,515
207,794
97,636
100,550
97,350
98,833
40,239
43,985
45,709
49,406
167,832
150,000
125,000
100,000
90,000
75,000
50,000
25,000
0
36,659
29,741
22,769
18,404
26,163
Sep-03
Sep-04
Federal
State
40,385
30,619
27,837
14,957
Sep-05
Federal Flow Through
Sep-06
Industry/Other
35,749
23,806
Sep-07
Total
The RF has three sources of cash to pay these expenditures:



Surplus sponsored programs balance – currently at $102 million, a decrease of 30 percent
from last September mainly attributed to University at Albany activity
Federal draw down – the RF uses an automated system to request funds on a weekly basis for
federal programs, $67.3 million has been drawn for the first quarter.
Working capital – when the sponsor doesn’t pay in advance and the RF can’t draw down
federal funds, the RF uses working capital to fund expenditures. The total accounts receivable
balance at the end of the first quarter is $124.7 million, an increase of $32.8 million or 36
percent. At-risk deficit awards, those awards that have not received an official award
document, increased 5 percent.
Agency Expenditures
The RF’s agency activity is growing and the RF projects agency expenditures to total $144 million in
FY2008. Technically, an agency should have funds in its account with the RF before the RF pays any
human resources, payroll, accounts payable or purchasing expenses for its award. Agency expenditures
through the first quarter are $40.3 million compared to $35.2 million last September.
-21-
Agency Expenditures by Location
(In Thousands)
20,000
16,093
15,000
11,826
12,459
12,028
17,725
16,723
12,384
11,809
9,839
10,000
6,865
8,869
5,000
-
3,775
3,099
890
1,228
Sep-03
3,643
3,232
Sep-04
2,596
Sep-05
Stony Brook University
University at Buffalo
3,371
3,041
Sep-06
Sep-07
Upstate Medical University
Others
Corporate Expenditures
The RF’s campus and central office locations incur costs to have the infrastructure and staff in place
to administer sponsored programs and provide other services. The allocations for central office and
campus locations are placed in an RF-funded account. Historically, most campuses don’t spend more
than they’re allocated, and even if they do exceed their allocation, most campuses have money in their
RF-funded balance from prior years to cover the loss. There are currently six campuses with at-risk
RF-funded awards that total $523 thousand because they spent more than their allocation and didn’t
have money in their RF-funded balance to cover the losses.
Corporate Expenditures
$49,918
SUNY System
Administration
1,847
Other
5,495
Campus Royalties
6,404
SUNY Campuses
28,329
-22-
Oracle Upgrade
531
Central Office
Administration
7,312
Working Capital
Working capital primarily consists of campus and central office unexpended balances, corporate
reserves and investment income reserves. Campus unexpended balances include service and facility
(S&F), RF funded, non-sponsored, suspense and gift awards (see chart on page 26). The RF’s working
capital also includes any surplus payments received for the fringe benefit (FB) pool. The RF operates
like a recharge center for these payments: each grant is charged a rate to recover the RF’s costs to
provide these services. These payments should break even. However, there are times when the
amount received by the RF is greater than what is owed and when this happens the RF puts that
surplus towards its working capital. At other times the amount owed is greater than what the RF
received, and the RF uses its working capital to cover the expenditures.
Like any business, the RF uses working capital to pay for expenses before money is received to cover
those expenditures. At any given time during the fiscal year the RF uses working capital to pay for the
following expenditures:
Sponsored programs deficits
Agency deficits
Payroll suspense (payments to an employee prior to identifying the account to which the charge
belongs). Central office and campuses monitor payroll suspense accounts to ensure timely
reconciliations, so the working capital needs are minimal.
 Income Fund Reimbursable (payments to SUNY for salaries and fringe benefits of SUNY
employees who perform services on RF sponsored projects while remaining on the SUNY
payroll). The agreement with SUNY allows the RF discretion on the use of these funds.



The SUNY/RF 1977 agreement allows the RF to use IFR reimbursement payments to SUNY as a
potential working capital tool, this allows the RF to identify the payment schedule to SUNY to
support cash flow requirements. In addition, the RF can work with the campus to use their IFR
payment to reimburse the RF for any potential losses. The first quarter IFR reimbursements in FY
2008 was $7.1 million, the average monthly payment was $2.4 million.
The following charts show sponsored programs and agency deficits:
-23-
Sponsored Programs Accounts Receivable (Deficits)
140,000
120,000
130,815
124,288
124,720
120,312
117,293
109,758
95,708
100,000
95,166
80,000
91,864
84,811
60,000
40,000
35,107
29,122
20,000
7,053
10,554
7,427
0
Sep-03
Sep-04
Excludes At Risk
Sep-05
Sep-06
At Risk
Sep-07
Total Deficits
Agency Advances to Others (Deficits)
16,000
14,602
13,117
12,000
9,890
8,000
13,126
11,644
10,581
9,450
8,246
8,347
4,000
1,644
1,476
Sep-04
Sep-05
1,103
1,063
Sep-06
Sep-07
0
0
Sep-03
Excludes At Risk
-24-
At Risk
Total Deficits
The fringe benefit pool remains in a surplus due to a $2.3 million balance carried forward from the FY
2007, and fringe benefit grant charges are $2.3 million above total expenses through the first quarter.
The following two charts compare major benefit costs to the grant charges and the fringe benefit pool
balance. The fringe benefit rate is negotiated based on estimates; actual costs will be different. The
difference is either a surplus that must be reduced in the next year’s rate or a deficit that requires an
increase the next year’s rate
Fringe Benefit Pool
(FYTD Expenses)
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Sep-04
Pension
-25-
Sep-05
Health
Insurances
Sep-06
Other
Total Expense
Sep-07
FB Grant Charges
Fringe Benefit Pool Balances
( In Thousands)
6,000
4,626
4,500
3,810
3,000
2,292
1,500
0
(1,500)
(1,672)
(3,000)
(3,675)
(4,500)
Sep-03
Sep-04
Sep-05
Sep-06
Sep-07
In the event that there is not enough working capital to cover its sponsored programs expenditures,
the RF incurs debt to pay its bills. Currently, the RF has a $35 million line of credit to cover sponsored
programs debt and an additional $45 million line of credit that was authorized by the board of
directors to provide more borrowing power and to respond to additional requests for financial
assistance. If the RF incurs debt to cover campus expenditures, that campus is responsible for paying
the interest on that debt. At September 30, System Administration-Provost had a $6 million balance in
the project line of credit which was advanced to cover temporary sponsored program deficits.
Campus Unrestricted Fund Balance
The fund balance provides additional liquidity to cover cash flow needs and working capital for the
RF. Historically, the corporation has not used the unspent allocations to campuses for corporate
needs. The RF board, however, has the authority to designate these fund balances for purposes other
than campus allocations. Unfunded liabilities are future obligations against the fund balance.
Campus
University at Albany
Binghamton University
University at Buffalo
Stony Brook University
SUNY Downstate Medical Center
Upstate Medical University
SUNY Brockport
Buffalo State College
SUNY Cortland
SUNY Fredonia
SUNY Geneseo
-26-
1st Quarter
September 30
$ 13,137,658
12,606,595
30,839,202
82,256,425
6,146,205
7,004,147
168,600
8,810,478
307,593
234,085
228,226
Campus
Old Westbury
SUNY New Paltz
College at Oneonta
SUNY Oswego
SUNY Plattsburgh
SUNY Potsdam
Purchase College
SUNYIT
Empire State College
Alfred State College
SUNY Canton
SUNY Cobleskill
SUNY Delhi
Farmingdale State College
Morrisville State College
SUNY ESF
Maritime College
College of Optometry
Central Office
Sys. Admin - Provost
Sys. Admin - Chancellor
Levin Institute
Sub Total
Invested in fixed assets, net of related debt
Corporate Reserve
Investment Reserve
Liabilities unfunded
Unrestricted Net Cash Position
-27-
1st Quarter
September 30
139,136
(5,689)
643,042
2,286,844
158,557
316,932
344,092
358,686
355,082
(966)
115,981
(56,077)
(11,797)
(371,456)
127,477
3,762,418
27,949
522,571
1,210,762
887,870
460,570
(77,150)
172,934,018
11,857,831
4,460,626
22,898,008
(154,071,551)
$ 58,078,932