Annual Financial Report
for Fiscal Year 2014
Presentation to: The Board of Regents
Ashok K. Roy, Ph.D., CIA, CBA, CFSA
Vice President for Finance & Administration/ CFO
December 12, 2014
Financial Highlights
FY2014 marked a year of stability, strength, and
progress for the University of Alaska System.
• The University’s financial assets were $1.9 Billion
with net position of $1.6 Billion.
• Net position increased 13%, or $ 187.3 M
(FY13-14).
• State support very robust – 47.3% of revenues.
• Tuition & Fees – 15.3% of revenues.
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• The University’s college savings plans continue
to be ranked among the top performing plans in
the nation. (The T. Rowe Price College Savings
Plan is one of four college savings plans in the
nation awarded a “Gold” rating by Morningstar
for 2014).
Portfolio managed on June 30, 2014
= $6.5 Billion.
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• Revenues & Expenses (operating & non-operating*)
were $848.7 M and $847.8 M, respectively.
*not including Capital Appropriation ($186.3 M).
• Total Operating expenses grew only 1.6%.
• Operating funds were invested ( $144.2 M) for
necessary liquidity, security, reasonable returns
• UA’s Endowment balance = $146.2 M.
• Investment return on our Consolidated Endowment
Fund =12.5%.
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• Total Debt outstanding = $181.6 M.
• Annual Debt Service = $17.3M (modest).
• Annual Debt Service ratio = 2.8% of unrestricted
revenues.
• Maintained high Credit Ratings from both Standard
& Poor (AA-) and Moody’s Investor Services (Aa2).
• Total Budget = $914.2 M (FY13 – FY14).
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4 Successful External Audits
a) Received “unmodified” opinion , the
most favorable, from external/
independent auditors (Moss Adams LLP).
b) Received “unmodified” opinion from
Pricewaterhouse Coopers, LLP. for the
“Education Trust of Alaska”.
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c) No exceptions/deficiencies noted in
rigorous 7 month audit of F & A cost rates
by Defense Contract Audit Agency.
(These rates are used on Federal grants/contracts for
recovering indirect/overhead costs).
d) Received from Moss Adams “Single
Audit” reports on federal awards in
accordance with Government Auditing
Standards and OMB Circular A-133.
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Bottom-line:
We are pleased to report that the
University of Alaska System continues to
be financially healthy.
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Graphical Presentation of Data
Condensed Statements of Net Position
Net Position
Assets:
Current Assets
Other noncurrent assets
Capital assets, net of depreciation
Total assets
Liabilities:
Current liabilities
Noncurrent liabilities
Total liabilities
2014
$
171,236
317,348
2013
$
143,039
337,569
1,447,301
1,935,885
1,280,298
1,760,906
117,980
186,679
304,659
120,515
196,427
316,942
1,255,355
69,987
130,853
175,031
$ 1,631,226
1,076,861
78,443
131,365
157,295
$ 1,443,964
Net position:
Net investment in capital assets
Restricted – expendable
Restricted – nonexpendable
Unrestricted
Total net position
($ in Thousands)
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Revenues/Expenses
2014
2013
Revenues:
State Operating Appropriations
Capital Appropriations & Grants
Student Tuition and Fees, net
Federal Grants and Contracts
State, Local and Private Grants
Auxiliary Enterprises
Endowment Income
Other
Total Revenues
Expenses:
Student and Academic
Research
Public Service
Operations and Maintenance
Institutional Support
Auxiliary Enterprises
Depreciation
Other Expenses
Total Expenses
Increase in Net Position
($ in Thousands)
$
385,887
$
371,051
186,331
125,104
148,339
73,934
37,717
19,065
25,780
1,002,157
191,809
127,055
156,247
77,801
40,008
18,992
32,226
1,015,189
365,749
129,842
45,361
68,918
95,793
35,714
66,618
6,630
814,895
$ 187,262
363,074
132,905
41,360
63,364
96,072
35,276
63,403
9,529
804,983
$ 210,206
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Revenue Mix
Other
($45m, 6%)
Auxiliaries
($38m, 5%)
State
Appropriations
State, Private
and Local Grants
($386m, 47%)
($74m, 9%)
Tuition and Fees
($125m, 15%)
Federal Grants
and Contracts
($148m, 18%)
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Student Aid
($27m, 3%)
Depreciation
($67m, 8%)
Expenditure Mix by
Natural Classification
Other
($9m, 1%)
Supplies &
Materials
($56m, 7%)
Salaries &
Benefits
($506m, 62%)
Contractual
Services
($150m, 19%)
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Expenditure Mix by Function
Auxliaries
($36m, 4%)
Institutional
Support
($96m, 12%)
Depreciation
($65m, 8%)
Other
($7m, 1%)
Student &
Academic
($365m, 45%)
Operations &
Maintenance
($69m, 8%)
Research
($130m, 16%)
Public Service
($46m, 6%)
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Net Position
$2,000
$1,631
Millions
$1,500
$1,444
$1,234
$1,000
$500
$0
2012
2013
2014
Year
15
$200
Total University of Alaska Debt Outstanding
June 30, 2014
$180
$160
$140
Millions
$120
$100
$80
$60
$40
$20
$0
16
$18
Total Annual Debt Service
June 30, 2014
$16
$14
Millions
$12
$10
$8
$6
$4
$2
$0
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Operating Cash & Investments ($144M)
Cash
($25m, 18%)
Corporate Bonds
$56m, 39%
Money Market
Funds
($41m, 28%)
Intn'l Govt Bonds
($2m, 1%)
Federal Agencies
($6m, 4%)
U.S. Treasuries
($14m, 10%)
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Financial Metrics
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Viability Ratio
(Measures debt burden and debt capacity)
6
Norm/Average = 3 (see red line)
Expendable Net Position
Debt
5
Value
4
3
2
1
0
2012
2013
Fiscal Year
2014
20
Return on Net Position Ratio
(Measures the return on total net position)
7
Change in Net Position
Total Net Position
Norm/Average = 3 (see red line)
6
5
Value
4
3
2
1
0
2012
2013
Fiscal Year
2014
21
Primary Reserve Ratio
(Measures the level of reserves relative to expenses)
5
Expendable Net Position
Total Expenses
Norm/Average = 3 (see red line)
4
Value
3
2
1
0
2012
2013
Fiscal Year
2014
22
Composite Financial Index (CFI) (1 of 2)
(Measures overall financial health)
7
6
Norm/Average= 3 (see red line)
CFI:
38% Primary Reserve Ratio
37% Viability Ratio
25% Return on Net Position Ratio
5
Score
4
3
2
1
0
2012
2013
Fiscal Year
2014
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Composite Financial Index (CFI) (2 of 2)
Primary Reserve Ratio
3.52
Return on Net Position
Ratio
5.73
4.84
Viability Ratio
Key:
Green triangle = University of Alaska
Inside triangle = Norm (represents a value of “3”)
Outside triangle = Outer limit of scale
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