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Audited Financial Statements for Fiscal Year LAWRENCE UNIVERSITY OF WISCONSIN Appleton, Wisconsin FINANCIAL STATEMENTS Including Independent Auditors' Report As of and for the Years Ended June 30, 2014 and 2013 LAWRENCE UNIVERSITY OF WISCONSIN TABLE OF CONTENTS Independent Auditors' Report 1 Financial Statements Statements of Financial Position 2 Statements of Activities 3-4 Statements of Cash Flows 5 Notes to Financial Statements 6-34 ~AKER TILLY Baker T ill) Vtrchow Krause, LLP 777 E Wisconsin Ave, 32nd Floor M ilwaukee, WI 53202-5313 rel414 777 5500 fa" 414 777 5555 bakerrilh com INDEPENDENT AUDITORS' REPORT To the Board of Trustees Lawrence University of Wisconsin Appleton, Wisconsin We have audited the accompanying financial statements of Lawrence University of Wisconsin (the "University"), which comprise the statements of financial position as of June 30, 2014 and 2013, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lawrence University of Wisconsin as of June 30, 2014 and 2013, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the financial statements, net assets as of June 30, 2012 have been restated for a change in accounting principle related to the release of net assets related to gifts for capital additions. Our opinion is not modified with respect to this matter. ,. ... ~ ~~ v~ )Lm.~~,L~ Milwaukee, Wisconsin October 1, 2014 ~ r n. depend~J'Imembero Page 1 BAKER TILLY INTERNAl IONAL An Alftrmat ive Acrion Egual Opporrumry Employer THIS PAGE IS INTENTIONALLY LEFT BLANK LAWRENCE UNIVERSITY OF WISCONSIN STATEMENTS OF FINANCIAL POSITION June 30, 2014 and 2013 2014 2013 ASSETS Cash and cash equivalents $ 11,902,722 $ 4,775,705 Receivables Students accounts, net of allowance for doubtful accounts of $301,000 and $291,000 146,011 249,600 Government grants 168,242 76,373 Accrued interest 120,638 118,925 Contributions, net of allowance for doubtful accounts of $72,800 and $65,468 30,095,173 10,146,516 Other 161,509 170,335 Inventories 243,008 294,362 Prepaid expenses and other assets 3,164,754 4,184,465 Student loans receivable, net of allowance for doubtful loans of $972,000 and $892,000 5,667,837 5,776,264 Investments 248,539,224 218,398,530 Property and equipment, less accumulated depreciation 109,052,449 111,582,812 TOTAL ASSETS $ 409,261,567 $ 355,773,887 LIABILITIES AND NET ASSETS LIABILITIES Accounts payable $ 1,097,460 $ 1,432,001 Accrued liabilities 7,185,769 7,593,561 Deferred income and deposits 1,019,821 1,114,651 Due to student organizations 274,357 251,752 Postretirement obligation 2,699,292 2,609,595 Asset retirement obligation 3,271,170 3,198,055 Annuities payable 2,138,993 1,611,996 Long-term debt 35,495,261 37,094,910 U.S. government grants refundable 1,695,570 1,709,419 Total Liabilities 54,877,693 56,615,940 NET ASSETS Unrestricted 101,840,878 90,144,822 Temporarily restricted 69,912,050 58,556,356 Permanently restricted 182,630,946 150,456,769 Total Net Assets 354,383,87 4 299,157,947 TOTAL LIABILITIES AND NET ASSETS $ 409,261,567 $ 355,773,887 See accompanying notes to financial statements. Page2 LAWRENCE UNIVERSITY OF WISCONSIN STATEMENT OF ACTIVITIES Year Ended June 30, 2014 Temporarily Permanently Unrestricted Restricted Restricted Total OPERATING REVENUES Tuition and fees $ 62,247,913 $ - $ - $ 62,247,913 Room and board 7,657,492 7,657,492 Less: tuition discounts (29,576,516) (29,576,516) Net Student Revenue 40,328,889 40,328,889 Auxiliary enterprises 1,752,055 1,752,055 Investment return designated for current operations 2,187,466 7,810,361 145,237 10,143,064 Government grants 535,387 535,387 Contribution revenue 2,726,330 2,726,330 Other income 543,498 131,014 674,512 48,073,625 7,941,375 145,237 56,160,237 Net assets released from restrictions 16,671,940 (16,671,940) Total Operating Revenues 64,745,565 ( 8, 730, 565) 145,237 56,160,237 OPERATING EXPENSES Instruction 19,413,073 19,413,073 Research 636,922 636,922 Public service 1,654,269 1,654,269 Academic support 4,197,921 4,197,921 Student services 5,781,212 5,781,212 Institutional administration 13,942,200 13,942,200 Physical plant operations 6,891,134 6,891,134 Auxiliary enterprises 687,307 687,307 Interest expense 1,298,191 1 ,298,191 Depreciation 6,872,778 6,872,778 Total Operating Expenses 61,375,007 61,375,007 Operating Revenues in Excess of Operating Expenses 3,370,558 (8,730,565) 145,237 (5,214,770) NONOPERATING INCOME (LOSS) Investment return in excess of amounts designated for current operations 8,090,961 17,424,947 149,973 25,665,881 Contributions for long-term purposes 2,562,146 31,711,827 34,273,973 Change in beneficial interests in trusts 60,387 119,322 179,709 Change in value of split interest agreements (120,437) 19,397 47,818 (53,222) Other nonoperating items, net 354,974 19,382 374,356 Total Nonoperating Income 8,325,498 20,086,259 32,028,940 60,440,697 Change in Net Assets 11,696,056 11,355,694 32,174,177 55,225,927 NET ASSETS- Beginning of Year, Restated 90,144,822 58,556,356 150,456,769 299,157,947 NET ASSETS - END OF YEAR $ 101 ,840,878 $ 69,912,050 $ 182,630,946 $ 354,383,874 See accompanying notes to financial statements. Page 3 LAWRENCE UNIVERSITY OF WISCONSIN STATEMENT OF ACTIVITIES Year Ended June 30, 2013 Temporarily Permanently Unrestricted Restricted Restricted Total OPERATING REVENUES Tuition and fees $ 58,663,565 $ - $ - $ 58,663,565 Room and board 7,290,480 7,290,480 Less: tuition discounts (26,269,424) (26,269,424) Net Student Revenue 39,684,621 39,684,621 Auxiliary enterprises 1,736,060 1,736,060 Investment return designated for current operations 1,536,517 7,255,393 157,894 8,949,804 Government grants 560,180 560,180 Contribution revenue 2,938,833 2,938,833 Other income 498,645 166,291 664,936 46,954,856 7,421,684 157,894 54,534,434 Net assets released from restrictions 10,266,956 (1 0,266,956) Total Operating Revenues 57,221,812 (2,845,272) 157,894 54,534,434 OPERATING EXPENSES Instruction 19,002,406 19,002,406 Research 660,707 660,707 Public service 1,594,289 1,594,289 Academic support 4,216,823 4,216,823 Student services 5,574,770 5,574,770 Institutional administration 11,978,975 11,978,975 Physical plant operations 6,071,220 6,071,220 Auxiliary enterprises 706,855 706,855 Interest expense 1,699,094 1,699,094 Depreciation 6,819,760 6,819,760 Total Operating Expenses 58,324,899 58,324,899 Operating Revenues in Excess of Operating Expenses (1,103,087) (2,845,272) 157,894 (3,790,465) NONOPERATING INCOME (LOSS) Investment return in excess of amounts designated for current operations 6,168,775 7,852,502 135,142 14,156,419 Contributions for long-term purposes 5,991,220 6,941,099 12,932,319 Change in beneficial interests in trusts 34,889 95,210 130,099 Change in value of split interest agreements (16,572) 81,135 (43,860) 20,703 Other nonoperating items, net 420,432 20,878 39,384 480,694 Total Nonoperating Income 6,572,635 13,980,624 7,166,975 27,720,234 Change in Net Assets 5,469,548 11 '135,352 7,324,869 23,929,769 NET ASSETS- Beginning of Year 25,337,759 106,758,519 143,131,900 275,228,178 Net asset reclassification due to change in accounting principle 59,337,515 (59,337,515) NET ASSETS- Beginning of Year, Restated 84,675,274 47,421,004 143,131,900 275,228,178 NET ASSETS- END OF YEAR, RESTATED $ 90,144,822 $ 58,556,356 $ 150,456,769 $ 299,157,947 See accompanying notes to financial statements.
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