Cornell University 2011-2012 Annual Report - DFA Home - Cornell ...

The University is committed to managing overall costswithout jeopardizing its ability to carry out its missionsand strategic initiatives; for fiscal year ending June 30, 2012,the University achieved that goal. Although total operatingexpenses increased by $140.5 million, or 4.7 percent, thatincrease is less than last year’s increase of $170.4 million,or 6.1 percent.Non-Operating Revenues and ExpensesApproximately five years ago, the University changed theformat of its statement of activities to include an operatingmeasure and non-operating measure, designed to providemore meaningful information to the readers. Non-operatingactivities are those over which the University generally canexercise little control, such as funding from New York Statefor buildings, funding from donors restricted to capitalprojects, trusts or endowments and non-operating income,and expense affected by fair market value adjustments atfiscal year-end.New York State continues to provide significant appropriationsto build and improve the facilities for the contractcolleges. The current year revenues increased by $16.5 million,or 37.1 percent, from the prior year. A review of thepast five years demonstrates the state’s ongoing support forthe contract colleges, with over $214.0 million appropriatedduring that time for buildings and building improvements.The remaining income and expense items in the non-operatingsection are all significantly affected by market factors.The $255.2 million “loss” reflected as investment return inthe non-operating section should not be interpreted as anoverall loss. As the line item emphasizes, this is return netof amount distributed, ($298.2 million), as reflected in theoperating section of the statement of activities. The totaloperating and non-operating return is approximately $43.0million – a positive return.The income associated with the pension and postretirementis affected by numerous factors. This figure represents thecurrent-year adjustment for the unfunded status of thedefined benefit pension plan at the Medical College andthe postretirement medical benefit plans at both campusesless the amount of operating and non-operating expense/revenue recorded in prior years for these liabilities.The $166.5 million unrealized loss is separately disclosed toclearly identify this amount as a change in the fair marketvalue of the debt swap portfolio based on the current yearvaluation as of June 30, 2012.As you can see from a review of the non-operating section,the “expenses” and overall non-operating loss of $80.1million are based primarily on the impact of June 30 fairmarket value adjustments.Statement of Financial PositionThe University’s overall net assets decreased, but by less thanone half of one percent. In short, the balance sheet remainsvery strong, with a total of $7.5 billion in net assets, including$2.4 billion in unrestricted net assets.AssetsCash is subject to variance from year to year because of theUniversity’s holdings as of June 30 in cash equivalents: i.e.,securities with an initial maturity term of ninety days orless. At the end of fiscal year 2012, cash was $116.6 millionhigher than the prior year, which represents an increase of79.8 percent; the increase is based on cash equivalents atJune 30, 2012.2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12$ 2,750.4 $ 2,720.8 $ 3,070.2 $ 3,623.2 $ 4,180.4 $ 5,197.5 $ 5,378.1 $ 3,794.3 $ 4,223.2 $ 4,921.8124.3 88.9 234.8 202.0 128.7 236.8 190.5 573.9 210.6 155.3(128.1) (116.4) (37.1) (33.7) (125.1) (130.1) (340.9) (578.7) (286.9) (233.0)(25.8) 376.9 355.3 388.9 1013.5 73.9 (1433.4) 433.7 774.9 (57.2)$ 2,720.8 $ 3,070.2 $ 3,623.2 $ 4,180.4 $ 5,197.5 $ 5,378.1 $ 3,794.3 $ 4,223.2 $ 4,921.8 $ 4,786.9$ 42.65 $ 46.51 $ 50.11 $ 55.42 $ 66.62 $ 65.37 $ 45.12 $ 47.38 $ 53.58 $ 50.675