The University of Texas at
San Antonio
FY 09 Annual Financial Report
Highlights
January, 2010
Annual Financial Report
Highlights
The Annual Financial Report (AFR) is made up of three primary
statements with many supporting schedules.
1. Balance Sheet – Explains what we own, our obligations and
what is available.
2. Statement of Revenues, Expenses and Changes in Net Assets
(SRECNA) – Shows the results of operations for the year.
3. Statement of Cash Flows – Shows what revenue came in,
what was expended and what is left.
Review pie charts and ratios that help explain our financial condition
2
UTSA FY 09
Balance Sheet
The Balance Sheet has three sections:
Assets: What we own - Items that are available to
meet operating costs of the Institution, plus
buildings, land, equipment, etc.


Investments decreased by $12.7 due to
decreases in fair market value.
Capital Assets increased by $24.8M
predominantly due to the construction of
Engineering Building and other lab
renovations.
Liabilities: Our obligations -Amounts due and payable
within one year or beyond.
Net Assets: What’s available - Capital Assets net of
depreciation, endowment funds and other
unrestricted funds.


Amount invested in Capital Assets increased
predominately by $24.8M due to construction.
Unrestricted Net Assets decreased by $11.2M
due to an increase in operating expenses of
$43.3M. Additionally, a decrease in unrestricted
quasi endowments due to a decrease in the fair
market value of investments.
The University of Texas at San Antonio –
Balance Sheet ($ in millions)
ASSETS:
2009
2008
Variance
% Change
Current Assets
157.2
161.8
(4.6)
(3%)
Noncurrent Assets
218.5
231.2
(12.7)
(5%)
5.8
4.3
1.5
35%
654.2
629.4
24.8
4%
1,035.7
1,026.7
9.0
1%
149.5
153.7
(4.2)
2.5
2.3
0.2
Total Liabilities
152.0
156.0
(4.0)
(3%)
NET ASSETS:
Invested in Capital
Assets, Net of
Related Debt
654.2
629.4
24.8
4%
89.0
89.6
(0.6)
(1%)
Unrestricted
140.5
151.7
(11.2)
(7%)
Net Assets
883.7
870.7
13.0
Other Noncurrent Assets
Capital Assets, net
Total Assets
LIABILITIES:
Current Liabilities
Noncurrent Liabilities
Restricted
(3%)
9%
1%
The Statement of Revenue, Expenses, and
UTSA Operating Revenues ($ in millions)
Changes in Net Assets (SRECNA) . This
Student Tuition and Fees Net
- Net
of Discounts
of Discounts
statement is called the “Operating Statement” Sponsored Programs
as it reports the results of operations for the Sales and Services of Educational Activities
year.
Auxiliary Enterprises

Tuition and Fees increased by $13.4 (9%).
Sponsored Programs decreased by $14.8M (18%)
due to Pell and State Sponsored Programs being
reported as non-exchange sponsored programs and
SSEA respectively.
Other
Total Operating Revenues
Total Operating Expenses
Operating Loss
2009
2007
161.5
143.5
764.9
72.8
9.6
6.7
15.1
21.7
2.5
2.0
240.6
259.7
315.6
388.8
(129.1)
(75.0)
2008
2006
148.1
118.7
79.7
73.
27.7
6.0
17.9
14.
23.1
3.2
215.3
256.5
293.8
348.7
(92.2)
Nonoperating Revenues (Expenses):
Non-Operating




Operating Loss is calculated before State
Appropriations. Operating expenses outpaced
operating revenues causing an increase of $36.9M
(40%).
State Appropriations slightly increased by $.8M
(.7%).
Income (Loss) Before Other Revenues decreased
by $29.6M (108%) due to decrease in FV of
Investments, an increase in Operating Loss, and
decrease in investment income.
Mandatory Transfers represent amounts transferred
to System to pay debt service and Nonmandatory
Transfers represent anticipated bond proceeds
transferred to UTSA to fund construction projects.
State Appropriations
Appropriations
State
Gift Contributions
Non-Exchange
Sponsored Programs
Net Investment Income (Loss)
10.9
Gift Contributions
6.5
Net Inc. (Dec.) in Fair Value of Investments
12.4
Net Investment Income (Loss)
4.4
Gain/(Loss) on State of Capital Assets
(0.1)
Net Inc. (Dec.) in Fair Value of Investments
(28.2)
Other Nonoperatin Revenues/Expenses
0.0
Income
Incomeg(Loss)
(Loss) Before
Before Other
Other Revenues,
Revenues, Expenses, Gains(2.2)
Expenses,
or Losses Gains or Losses
50.1
Gifts and Sponsored Programs
.3
Gifts and Sponsored Programs
0.0
1.5
Additions
Additions to
to Permanent
Permanent Endowments
Endowments
4.0
Re-Class
From
(To)
Institutions
38.9
Reclass From (To) Other Institutions
(48.7)
Mandatory
(31.8)
Mandatory Transfers
Transfers - Comp & Sys
-Debt Svc
(19.7)
Admin
Non-Mandatory
8.5
Nonmandatory Transfers
Transfers
- Comp & Sys Admin
141.9
As on the previous exhibit, Change in Net Assets
was $13.0M. This is predominately due to debt
issued for construction projects for which bond
proceeds are due from System.
114.7
97.
13.5
0.0
6.1
5.8
4.1
12.7
(13.6)
0.0
27.4
32.
.5
20.6
4.4
4.9
97.8
19.8
(28.3)
(16.6)
(2.2)
(1.4)
9.1
28.
6
(1.5)
Change in Net Assets
Change in Net Assets
Net Assets, Beginning of the Year
Net Assets, Beginning of the Year
126.2
13.0
635.1
870.7
68.
109.4
7
566.4
761.3
Net Assets, End of the Year
Net Assets, End of the Year
883.7
761.3
870.7
635.1
Transfers
Transfers From
From (To)
(To) Other
Other State
State entities
entities

98.1
115.5
3.8
28.7
The University of Texas at San Antonio
FY 09 – Statement of Cash Flows





Cash from operations includes tuition
and fees and expenditures for
operations includes salaries,
scholarship/fellowship and supplies.
Noncapital financing activities
include State appropriations and
Gifts.
Capital and related financing
activities include purchase of
equipment and construction of
buildings.
Investing Activities include the
purchase/sale of investments,
interest income and endowment
income distribution.
Cash & Cash Equivalents increased
by $11.2M due to cash provided for
noncapital financing.
($ in millions)
Cash Flows
2009
2008
Cash received from operations
281.1
277.7
Cash expended for operations
(366.6)
(337.1)
Net cash used by operating activities
(85.5)
(59.4)
Net cash provided by noncapital financing activities
156.8
111.3
Net cash used by capital and related financing activities
(49.3)
(26.3)
Net cash used by investing activities
(10.8)
(38.8)
Net increase in cash and cash equivalents
11.2
(13.2)
Cash and cash equivalents, beginning of the year
64.6
77.8
Cash and cash equivalents, end of year
75.8
64.6
5
UTSA FY 2009 Sources of Revenue by
Category
Operating Sources by Category
($ in Millions)
State of Texas
$131.1
31%
Federal
Government
$74.1
18%
Institutional
Resources
$48.1
12%
Student & Parent
$161.5
39%
6
UTSA FY 09 Sources of Revenue
Operating Sources
($ in Millions)
Local Government
Grants
$.6
0%
Private Gifts & Grants
$9.8
2%
Endowment & Interest
Income
$4.7
1%
Federal Grants &
Contracts
$74.1
18%
Tuition & Fees
$161.5
39%
Sales & Services
$9.6
2%
Net Auxilary
$21.6
6%
Other Income
$1.8
1%
State Appropriations
$112.5
27%
State Grants &
Contracts
$15.6
3%
Research Development
$3.0
1%
7
UTSA FY 09 Uses of Funds
Operating Uses
Auxiliary Enterprises
$26.1
7%
Scholarships and
Fellowships
$30.1
8%
Capital Outlay
$10.1
3%
Other Expenses
$.2
0%
Instruction
$107.9
29%
Operations and
Maintenance of Plant
$36.8
10%
Institutional Support
$40.4
Student Services
11%
$24.5
7%
Research
$35.9
10%
Academic Support
$35.2
10%
Public Service
$19.2
5%
8
Comparison of Sponsored Programs for
FY09 and FY08
$2.1
4%
$4.2
8%
$.1
0%
$22.6
44%
$2.3
3%
$4.4
7%
$.1
0%
$27.0
40%
$14.1
21%
$10.9
21%
$2.3
4%
Restricted ResearchFederal
Restricted Research- NonFederal
Unrestricted ResearchGeneral
Unrestricted ResearchDesignated
Restricted Non-ResearchFederal
Restricted Non-ResearchNon-Federal
Unrestricted NonResearch- General
Unrestricted NonResearch- Designated
$2.6
4%
$5.2
10%
$4.5
9%
FY 08
$10.7
16%
$6.2
9%
FY 09
9
Comparison of Sponsored Programs for FY09 and FY08
Sponsored Programs
Federal
Non-Federal
Restricted Research
General
Designated
Unrestricted Research
Total Research Expenditures
Federal
Non-Federal
Restricted Non-Research
General
Designated
Unrestricted Non-Research
FY 08
FY 09
22,574,016
4,523,394
% Change
26,966,122
6,178,993
27,097,410
19%
37%
22%
109%
12%
78%
33,145,115
5,159,454
2,344,581
10,757,935
2,618,437
7,504,034
13,376,372
34,601,444
10,905,815
2,088,135
46,521,487
34%
29%
10%
26%
6%
2%
6%
14,091,550
2,287,820
12,993,950
16,379,370
4,147,020
127,159
4,401,523
125,077
4,274,179
4,526,600
Non-Research Expenditures
17,268,129
20,905,970
21%
Total Expenditures
51,869,574
67,427,457
30%
10
Reconciliation of Research Expenditures to
AFR Operating Expenses - Research
Reconciliation:
FY 08
FY 09
26,773,114
35,929,725
F+A
5,188,035
6,356,539
Capital Outlay
2,640,295
4,235,223
34,601,444
46,521,487
Statement of Revenues, Expensed and
Changes in Net Assets- Research Expenses
Total Research Expenditures
11
UTSA FY 09 Analysis of Financial Condition
Composite Financial Index


Composite Financial Index
measures the overall financial
health by combining four core
ratios into a single score: primary
reserve ratio, expendable
resources to debt ratio, return on
net assets ratio and the annual
operating margin ratio.
The CFI decreased by 1.5
primarily due to decrease in the
fair value of investments of
$28.2M, decrease in bond
proceeds as a result of
completion of several
construction projects, and a
decline in operating margin.
6.0
4.4
4.0
3.7
3.6
3.5
2.0
2.0
0.0
2005
2006
2007
2008
2009
12
UTSA FY 09 Analysis of Financial Condition
Operating Expense Coverage Ratio

Measures an institution’s ability
to cover future operating
expenses with available year-end
balances. Ratio is expressed in
number of months coverage.
6.0
5.0
5.0
5.1
4.2
4.2

Decrease from 5.1 months to 4.2
months is due to decrease in
unrestricted net assets as a
result of decreases in Quasi
Endowments Investments. In
addition, operating expenditures
have increased by $43.3M.
4.0
3.6
3.0
2.0
1.0

System satisfactory rating is at
two months or above and should
be stable or improve.
0.0
2005
2006
2007
2008
2009
13
UTSA FY 09 Analysis of Financial Condition
Debt Service Coverage Ratio

This ratio measures the actual
margin of protection provided to
investors by annual operations.
Calculation is used by Moody’s
Investment Services, system-wide to
determine bond rating. This is
watched very closely so UT System
can maintain AAA bond rating.
4.0
3.0
3.0
3.1
2.9
2.4


Trend helps to determine if an
institution has assumed more debt
than it can afford to service.
The debt service coverage declined
but still exceeds UT System’s
benchmark of greater than 1.8. This
means that our net resources are 2.1
times what we are currently
expending for debt payments. The
ratio decreased as a result of a
reduction in operating performance
and an increase in debt service.
2.1
2.0
1.0
0.0
2005
2006
2007
2008
2009
14
UTSA FY 09 Analysis of Financial Condition
Expendable Resources to Debt Ratio

This ratio measures an
institution’s ability to fund
outstanding debt with existing net
asset balances should an
emergency occur.
0.8
0.7
0.7


UTSA’s debt ratio changed
slightly due to a increase in debt
associated with Engineering
Building Phase II.
This ratio shows that more and
more of our resources are going
towards paying off debt.
System’s Satisfactory benchmark
is 0.8x or greater.
0.7
0.6
0.6
0.5
0.4
Restated
Restated
0.2
0.0
2005
2006
2007
2008
2009
15
UTSA FY09 Analysis of Financial Condition
Debt Burden Ratio

This ratio examines the
institution’s dependence on
borrowed funds and cost of
borrowing relative to overall
expenses.
10.0%
8.5%
8.6%
8.0%
6.6%


UTSA’s debt burden ratio
increased slightly as a result of a
major capital improvements
program resulting in increased
debt service payments this year
of $3.5M. The institution is
heavily reliant on debt to fund
cost.
6.0%
5.7%
5.9%
5.0%
4.0%
2.0%
0.0%
2005
2006
2007
2008
2009
System’s Satisfactory benchmark
is less than 5.0%.
16
UTSA FY 09 AFR Summary

UTSA continues to receive a “Satisfactory” rating from
UT System as a result of a healthy financial condition.

UTSA’s operating margin ratio decreased from 7.3% for
FY 2008 to 4.0% for 2009. Expenditures exceeded
revenue growth as expected. Strategic initiatives were
implemented, new positions were hired, equipment was
replaced and planned capital renovations were
completed. The university must establish an
appropriate level of reserves and closely monitor its
debt capacity.
17