Benedictine University Annual Report 2008-2009 Honoring the Benedictine Monks
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Benedictine University Annual report 2008-2009 honoring the Benedictine monks (At left) Fr. Daniel Kucera, O.S.B. (later Abbot, Bishop and Archbishop), brought St. Procopius College into Fr. Theodore Suchy, O.S.B., taught biology from the modern post-war world as president from 1959 to 1965 and then again from 1971 until 1976 as Illinois the late 1960s until spring 2009 and continues in his Benedictine College. He was succeded by the institution’s first lay president, Richard C. Becker (far right). role as director of the Jurica-Suchy Nature Museum. Fr. Christian Ceplecha, O.S.B., taught history from Fr. Jerome Dobry, O.S.B., worked in the business office in the 1950s until the early 1960s. the 1940s until the early 1990s. (From left) Fr. Gerard Mach, O.S.B.; Fr. Francis Clougherty, O.S.B.; Fr. Christian Ceplecha, O.S.B.; Archbishop Fr. Zachary Hrisko, O.S.B., served as registrar and Daniel Kucera, O.S.B.; Br. Alphonse Kerpta, O.S.B.; Fr. Timothy Marceau, O.S.B.; Fr. Sylvester Healy, O.S.B.; worked in the admissions office in the 1960s. and Fr. Richard Shonka, O.S.B. Circa 1970. On the cover: The Benedictine community (top to bottom) circa: 1908, 1970 and 2006. hen we wrote to you a year ago, our nation was in the midst of a recession. There appeared to be no escape from bad news A messAge and unprecedented events weighing down the economy. Our from the investments were suffering from the battered stock market, and this continued to be the case through year’s end. However, office of excluding the effects of any investment losses, this past year’s financial results were actually strong. Overall enrollment continued to reach BUsiness And Wnew heights and we ended the year with very good liquidity. We were also able to strengthen our position by engaging a new major bank to provide us finAnce with higher quality credit facilities. This speaks volumes given the turmoil in the banking sector and a strict lending environment. Charles Gregory Executive Vice President At the end of fiscal 2009, total assets on our Statement of Financial Position decreased $7.3 million from the prior year primarily from the decline in our Allan Gozum investments. However, cash flow remained strong, enabling us to build our Vice President of Finance cash reserve and keep the balance on our line of credit down to zero. This places us in a better position to weather the uncertain environment. The primary capital addition for the year was the build-out of the lower level of the Birck Hall of Science, which added seven new classrooms and helped accommodate growth in the near-term. With the low interest rate environment, we took the opportunity to enter into several interest rate swap agreements to “fix” the rates on the bonds and to hedge our risk against future rate hikes. After subtracting total liabilities from our assets, we are left with total net assets of $54.5 million, 8.3 percent less than last year’s balance. On our Statement of Activities, gross tuition revenue rose above the $70 million level for the year. The change in net assets for all classifications was a negative $5 million. Excluding the investment loss and the fair value change on the interest rate swap agreements, net assets increased $5.4 million. However, we cannot totally ignore the impact of the investment losses and its effect on the availability of student scholarships. The recession has also affected our private gifts and grants, which dropped from the prior year. On the spending side, we continued to make investments in our personnel and in service-related costs supporting our higher enrollment. At the time of this writing, the economy has shown signs of improvement and the stock market has begun to recover. However, the jobless rate continues to be high. We are sensitive to this reality, and so we will continue to provide those initiatives that assist our students and which make us truly Benedictine. We have much to be thankful for and are cautiously optimistic about our chances for achieving future success, even during these rough times. Year ended May 31, 2009 Annual Report 2008-2009 1 Statement of Financial Position Information As of May 31 Assets 2009 2008 Current assets: Cash and cash equivalents $ 10,449,035 $ 7,040,310 Receivables, net 6,853,280 7,163,277 Promises to give 325,000 422,632 Prepaid expenses and other assets 326,110 665,878 Total current assets 17,953,425 15,292,097 Loans receivable from students 2,289,481 2,232,292 Investments 19,690,346 29,280,828 Bond proceeds held in trust 996 180,767 Bond issue costs, net 301,510 320,568 Property and equipment, net 54,503,579 54,382,758 Promises to give 550,018 825,713 Intangibles, net 50,000 100,000 $ 95,339,355 $ 102,615,023 Liabilities and Net Assets Current liabilities: Advances under line of credit $ – $ – Deferred revenue 2,181,383 3,537,072 Accounts payable and accrued expenses 4,853,409 5,181,835 Current portion of bonds payable 1,286,207 1,216,640 Current portion of capital lease payable 233,408 248,675 Deposits held in custody for others 1,051,153 910,466 Total current liabilities 9,605,560 11,094,688 Bond and note payable, less current portion 27,657,040 28,943,777 Refundable U.S. government grants for student loans 1,947,462 1,961,028 Interest rate swap aggreement liabilities 576,389 Deferred lease incentive 536,728 609,919 Deferred rent liability 282,132 257,263 Capital lease payable 223,015 272,269 Total liabilities 40,828,326 43,138,944 Total net assets 54,511,029 59,476,079 $ 95,339,355 $ 102,615,023 2 Benedictine University Statement of Activities Information Years ended May 31 2009 Temporarily Permanently Unrestricted Restricted Restricted Total 2008 Revenue and other support: Tuition and fees $ 72,945,837 $ – $ – $ 72,945,837 $ 62,731,552 Less scholarships and grants (25,246,556) – – (25,246,556) (22,123,611) Net tuition and fees 47,699,281 – – 47,699,281 40,607,941 Private gifts and grants 1,155,339 947,352 90,118 2,192,809 3,969,366 Government grants and contracts 8,573,261 – – 8,573,261 7,379,092 Investment income (4,834,686) (2,365,883) (2,633,072) (9,833,641) 1,022,957 Other income 941,023 – – 941,023 1,112,237 Auxiliary enterprises 3,701,681 – – 3,701,681 3,605,112 Net assets released from 900,502 (506,659) (393,843) – – restrictions Total revenue and 58,136,401 (1,925,190) (2,936,797) 53,274,414 57,696,705 and other support Expenses: Compensation: Salaries 25,807,571 – – 25,807,571 22,686,310 Benefits 5,787,519 – – 5,787,519 5,200,575 Total compensation 31,595,090 – – 31,595,090 27,886,885 Utilities 1,998,197 – – 1,998,197 1,814,458 Depreciation 2,973,464 – – 2,973,464 2,973,049 Interest 938,625 – – 938,625 1,206,806 Bad debts 500,000 – – 500,000 458,603 Supplies and services 19,657,699 – – 19,657,699 17,384,009 Total expenses 57,663,075 – – 57,663,075 51,723,810 Increase (decrease) 473,326 (1,925,190) (2,936,797) (4,388,661) 5,972,895 in net assets Other changes in net assets: (576,389) – – (576,389) – Change in fair value of interest rate swap agreement Change in net assets (103,063) (1,925,190) (2,936,797) (4,965,050) 5,972,895 Net assets, beginning of year 42,175,536 6,187,180 11,113,363 59,476,079 53,503,184 Net assets, end of year $ 42,072,473 $ 4,261,990 $ 8,176,566 $54,511,029 $ 59,476,079 Annual Report 2008-2009 3 A letter from University development Dear Alumni and Friends: The past year has presented many challenges. We have faced tremendous hardships as a nation. Although the struggle is not over, throughout history our nation has rallied during difficult times with a stronger conviction to securing a brighter and better future for generations to come. Benedictine University is no different. We have been challenged by the uncertainties of a nation in economic crisis. This crisis has affected our students and their families. The Benedictine community of faculty, staff, alumni and friends has come together to support the ever-changing needs of our students. Through the leadership of our President and Board of Trustees, tuition was frozen for the 2009-2010 academic year to help students during this time of economic turmoil. This endeavor and a variety of incentives to assist traditional and non-traditional students further their education were accomplished through teamwork. We have also focused on reconnecting with our alumni nationwide through events, electronic communication and by establishing alumni chapters while informing them on the status of the University. Benedictine is looking to the future to see what the needs and demands of our students will be in the coming years. We are committed to making this institution grow while maintaining our Benedictine mission and vision. As we move forward, the support of those who have passed through these halls is crucial. Equally important is the support of those who agree with our mission and who have seen what a difference the University has made in the life of their child. We ask that you give great thought to making a donation during this new fiscal year in order to continue supporting the needs of our students and the goals of the University.