ANNUAL FINANCIAL REPORT
2011 2012 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT
REED HUTCHINSON Photography Notes toFinancialStatements Financial Statements Transmittal Letter Management’s DiscussionandAnalysis Highlights Letter fromChancellorGeneD.Block CONTENTS 29 24 23 06 04 01 Letter from Chancellor Gene D. Block
The 2011–12 academic year was filled with outstanding accomplishments by UCLA’s students, faculty and staff. It also marked my fifth year as UCLA’s chancellor. During that half decade, which has coincided with one of the most challenging periods for public funding of higher education in our nation’s history, our campus has thrived. Today, UCLA is stronger than ever and enjoys unprecedented respect and acclaim around the world.
Todd Ceney/UCLA Photography Todd Thanks to our planning of the past several years and an extraordinary collective effort that is not only campus-wide but also extends to parents, alumni and donors, UCLA is well positioned to continue our upward trajectory toward our centennial in 2019 and beyond — despite the State of California’s continued disinvestment in our great institution. Academic and Research Excellence. UCLA’s reputation, nationally and interna- tionally, continued to soar in 2011–12. Third-party rankings illustrate the regard in which an institution is held, even though they are imperfect measures of a uni- versity’s excellence, and we were especially proud of our standing in three surveys. Washington Monthly, which publishes rankings based on cutting-edge scholarship, commitment to service and access for low-income students, placed UCLA No. 2 in the U.S. Internationally, the Shanghai Jiao Tong Academic Ranking of World Univer- sities placed UCLA No. 12, and the Times Higher Education rankings, from London “Today, UCLA is placed us at No. 13 in the world. UCLA researchers received more than $1 billion in competitively awarded grants stronger than ever and contracts, marking the third consecutive year our campus exceeded that impres- sive figure. This three-year performance would be an extraordinary achievement in any environment, but it is particularly so in this era of declining federal funding for and enjoys research. Throughout the campus, UCLA faculty continued to break new ground in their unprecedented research. Among the most intriguing examples, electrical engineering professor Aydo- gan Ozcan is developing technology that utilizes standard cell phone components to create mobile medical labs to aid in the fight against global disease. Professor respect and acclaim Wenyuan Shi of our School of Dentistry created a mouthwash that targets the bac- teria that is the principal cause of tooth decay and cavities — and could eventually prove to be the end of tooth decay. In another important project, UCLA researchers around the world.” led by Dr. Beate Ritz identified two genetic markers that may help determine which Parkinson’s disease patients will experience a more rapid decline in motor function; the discovery has sparked hopes for new therapies. Our stellar faculty also continued to bring honor to UCLA by earning election to the most prestigious academic societies and winning national and international research awards. Among those numerous accolades were not one but two Crafoord Prizes, awarded by the Royal Swedish Academy of Sciences, to physics and astronomy ANNUAL FINANCIAL REPORT | UCLA ANNUAL - 2012 2011
01 professor Andrea Ghez and mathematics professor Terence Tao. It was an auspicious achievement for UCLA scholars to win two of the four awards presented by the Royal Academy in 2012. Computer science professor Judea Pearl received the A.M. Turing Award — considered the “Nobel Prize in Computing” — from the Association for Computing Machinery. Teo Ruiz, professor of history and of Spanish and Portuguese, was awarded the National Humanities Medal at the White House by President Obama. “President Clinton was Laure Murat, associate professor of French and Francophone studies, received a Gug- genheim Fellowship. And Professor David Jewitt received two of the highest honors in his field, the Kavli Prize in astrophysics and the Shaw Prize in astronomy. the featured speaker Civic Engagement. In very tangible ways, our academic year began and ended with civic engagement. Before classes started, more than 7,000 Bruins participated in our of the inaugural Luskin third annual UCLA Volunteer Day, cleaning, painting, gardening and making repairs at 26 sites throughout Los Angeles. This new UCLA tradition has, in its brief history, strengthened the culture of volunteerism among our students — many of whom are Lecture for Thought already committed to service when they arrive on campus. We also extended the spirit of Volunteer Day with the introduction of “One Bus, One Cause,” an initiative that
Leadership, which was introduces students to opportunities for ongoing volunteer work by sending busloads Letter from Chancellor Gene D. Block of Bruins into the community to address needs at various service organizations. Our collective responsibility to one another was one of the touchstones of a stir- established by longtime ring lecture at Royce Hall in May by former President Bill Clinton. President Clinton was the featured speaker of the inaugural Luskin Lecture for Thought Leadership, supporters Meyer and which was established by longtime supporters Meyer and Renee Luskin to facilitate high-level dialogue among scholars, leaders and our community on pressing societal issues. And as the year came to a close, Jessica Jackley, entrepreneur and co-founder Renee Luskin to of the peer-to-peer lending website Kiva, echoed the theme of civic responsibility in her keynote at the College of Letters and Science commencement. facilitate high-level Diversity and Access. We remain a beacon of access and opportunity for students of all backgrounds. The students admitted to UCLA for the fall of 2012 represented our most ethnically, geographically and socioeconomically diverse class to date. dialogue among Diversity is a priority, not just in the demographics of our student body, faculty and staff, but also in ensuring a welcoming environment where all viewpoints are scholars, leaders and respected. Building on our Principles of Community, we developed a series of public events, curricula and programs that further our obligation to equip students for suc- cess in a complicated, interconnected world. I enjoyed teaching one of these seminars our community on during the spring quarter. Financial Security. The dramatic decline in state support of the University of Cali- pressing societal issues.” fornia system has prompted UCLA to become much more financially self-reliant, and we are well on our way with a multifaceted strategy to transform the funding model and enable UCLA to truly thrive in this new environment. Because of prudent financial planning, we were able to continue making strategic investments in 2011–12 to enhance the UCLA experience for students and faculty. We continued to expand both graduate and undergraduate student housing. Con- struction continued on the Edie and Lew Wasserman research building in the Jules Stein complex, and planning progressed for a residential conference center, medical
ANNUAL FINANCIAL REPORT | UCLA ANNUAL - 2012 2011 education building, the expansion of Schoenberg Hall, and the renovation of space
02 at the School of Theater, Film and Television, among others. While we remain focused on administrative and academic efficiencies, we also have a promising effort underway to increase revenue from intellectual property and the licensing of faculty inventions. The results will become apparent over the next several years, when we expect that higher returns and a more stable revenue stream will not only benefit UCLA and our faculty inventors but also promote regional eco- “While we remain nomic development. We enjoyed another impressive year in raising funds through the generous sup- focused on port of our alumni, parents and supporters. For 2011–12, the university raised $402 million, with 58,358 donors giving more than 75,000 gifts. In the past several years, the university has been consistently ranked as the top public institution nationally in administrative and higher education fundraising by the Council for Aid to Education. Among the most notable contributions of the past 12 months was a $50 million academic gift to the School of Public Health — the largest in its 50-year history — from faculty member Jonathan Fielding and his wife, Karin Fielding. In February, in recognition of the gift, the school was renamed for the Fieldings. In addition, the School of Law
efficiencies, we also closed a successful fundraising campaign that exceeded its ambitious goals, bringing Letter from Chancellor Gene D. Block in more than $110 million. The funds have already resulted in new research centers have a promising effort that have elevated the school’s national profile and enabled faculty and students to have an even greater impact in the community. As we continued to deepen the culture of engagement and philanthropy at UCLA, underway to increase we also advanced planning for a forthcoming fundraising campaign. The campaign will strengthen the platform for UCLA’s second century of excellence and enable new generations of students and faculty to build upon the remarkable legacy of achieve- revenue from ment that has made UCLA such an important engine of opportunity and a vital con- tributor to the advancement of our society. intellectual property Athletic Prowess. 2011–12 offered numerous occasions to celebrate the achieve- ments of our athletic teams, as our student-athletes and coaches continued to enhance UCLA’s outstanding record in NCAA athletics. The Bruin baseball team advanced to and the the College World Series for the second time in three years. Our women’s volleyball team defeated the University of Illinois for the NCAA championship — the program’s licensing of faculty fourth national crown and UCLA’s 108th in all. The men’s volleyball team marked a noteworthy and bittersweet milestone as well — the retirement of the legendary Al Scates, who led Bruin volleyball teams to an astounding 19 NCAA championships inventions.” during his 50-year run as coach. Throughout the year, we eagerly followed the prog- ress of the renovation of Pauley Pavilion (and we celebrated its reopening in October). Finally, the achievements of our students, faculty and staff, and the extraordinary support of our alumni and friends, significantly advanced UCLA’s ability to meet our vital role as a great public research university during the past year. Thank you for your commitment to UCLA.
Gene D. Block
ANNUAL FINANCIAL REPORT | UCLA ANNUAL - 2012 2011 Chancellor
03 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT
CAMPUS ANDFINANCIALHIGHLIGHTS UNIVERSITY OFCALIFORNIA,LosAngeles At June30,2012and2011 Other Supplies Operating Benefits and Expenditures Salaries Materials and Wages EXPENDITURES: State Educational Sales Appropriations Grants and and Services Contracts REVENUE: LIABILITIES: ASSETS: NET POSITION: EMPLOYEE COUNT Undergraduates ENROLLMENT -FALL QUARTER CAMPUS LANDAREA Nonoperating Expense(CoreActivities) Operating Expense Nonoperating Revenue(CoreActivities) Operating Revenue Total NoncurrentLiabilities Total CurrentLiabilities Total NoncurrentAssetsandDeferredOutflows Total CurrentAssets End ofYear Beginning ofYear Full-Time Equivalent andResidents Graduates, andInterns Principal OperatingExpenditures: Principal SourcesofNonoperatingRevenue: Principal SourcesofOperatingRevenue: (includes over7,000casualsandstudents) Student Tuition andFees
(dollars inmillions)
146 795 5,252 8,723 30,730 13,476 27,199 $ 712 $ 534 $ 1,256 $ 2,557 $ 5,595 $ 5,449 $ 379 $ 2,957 $ 945 $ 579 $ 5,364 $ 4,569 $ 6,293 $ 1,041 $ 10,300 $ 1,577 $ 4,007 $ 3,965 419 acres 2012
129 802 4,511 9,520 29,923 13,431 26,162 $ 663 $ 480 $ 1,050 $ 2,370 $ 5,064 $ 4,935 $ 480 $ 2,753 $ 951 $ 503 $ 5,064 $ 4,262 $ 5,555 $ 1,044 $ 11,034 $ 1,514 $ 3,965 $ 3,554 419 acres 2011 04 FINANACIAL HIGHLIGHTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT
Students study in the Powell Library rotunda. Students studyin the PowellLibrary KYLE ALEXANDER Photography 05
MANAGEMENT’S DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT universityofcalifornia.edu/reportingtransparency/. consolidated auditedfinancialreportsoftheUniversity of Californiaareavailableathttp://www. the operationandmanagementofthreenationallaboratories fortheU.S.DepartmentofEnergy. The and a statewide Division of Agricultural and Natural Resources. The University is also involved in encompasses 10campuses,whichincludefivemedicalschoolsandcenters,fourlaw world, isdedicatedtoexcellenceinteaching,research,healthcareandpublicservice.TheUniversity The UniversityofCalifornia,onethelargestandmostacclaimedinstitutionshigherlearningin THE UNIVERSITYOFCALIFORNIA can befoundathttp://www.cancer.ucla.edu/Index.aspx?page=1118. www.uclafoundation.org, andinformationrelatingtotheJonssonCancerCenterFoundation(JCCF) to TheUCLAFoundationcanbefoundintheseparatelyissuedauditedfinancialstatementsathttps:// MD&A andthenotestoFinancialStatementsfocusmainlyoncampus;informationrelating campus foundations(theUCLAFoundationandtheJonssonCancerCenterFoundation).However, the cash flows—encompasstheUCLAcampusanditsdiscretelypresentedcomponents,affiliated of net position; the statement of revenues, expenses and changes in net position; and the statement of Accounting StandardsBoard(GASB).Thethreebasicfinancialstatementsinthisreport—thestatement accounts, whicharemaintainedinaccordancewiththestandardsprescribedbyGovernmental Report, while not separately audited, is prepared from the official University ofCaliforniarecords and UCLA isoneof10campuses within theUniversity of Californiasystem.TheUCLAAnnualFinancial financial statementsandtheaccompanyingnotes. 30, 2011.Thisdiscussionwaspreparedbymanagementandshouldbereadinconjunctionwiththe the fiscalyearendedJune30,2012,withselectedcomparativeinformationfor the financialpositionand operatingactivitiesofthe UniversityofCalifornia,LosAngeles(UCLA), for The objectiveofManagement’s DiscussionandAnalysis(MD&A)istogivereadersanoverviewof ANALYSIS DISCUSSION & MANAGEMENT’S 06 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT School ofSchool Nursing ofSchool Dentistry Jonathan and Karin Fielding of School Public Health SchoolDavid Geffen of Medicine HEALTH SCIENCESPROGRAMS Sciences Social Physical Sciences Life Sciences Institute International Institute of Environment the and Sustainability Humanities General COLLEGE OFLETTERSANDSCIENCE the 10UCcampusesfor2011-12fiscalyear: The followingchartreflectsthecurrentfunds’revenuesandexpenditurestotalnetpositionof graduate scholarshipservingalmost40,000studentsinthefollowing schools: Campus –TheLosAngelescampusspans419acresinWestwood andisdevotedtoundergraduate this annualreportencompassthefollowing: California system,withanannualbudgetthatexceeds$5billion.Thefinancialstatementsincludedin UCLA was founded in 1919 and is financially the largest campus in the 10-campus University of THE LOSANGELESCAMPUSOFUNIVERSITYCALIFORNIA $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 – ALLCAMPUSES REVENUES, EXPENDITURESANDNETPOSITION REVENUES, EXPENDITURESANDNETPOSITION,ALLCAMPUSES $0
Berkeley
Davis (dollars inthousands)
Irvine
Los Angeles PROFESSIONAL Medicine: Biomedical Basic Sciences Letters Biomedical and Basic Sciences Science: BASIC BIOMEDICALSCIENCES ofSchool Theater, Film and Television of andSchool Arts the Architecture ofSchool Law Meyer and Luskin Renee of School Public Affairs John E.Anderson Graduate of School Management SamueliHenry of School Engineering and Applied Science Graduate of School Education &Information Studies Merced
Riverside EEUSEXPENDITURES REVENUES SCHOOLS San Diego
San Francisco (dollars inthousands)
Santa Barbara POSITION NET
Santa Cruz 07
MANAGEMENT’S DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT http://www.uclahealth.org/. Geffen SchoolofMedicineat UCLA.InformationrelatingtoUCLAHealthSystemcan be foundat Report for23consecutiveyears.TheMedicalCenteristhe primaryteachinghospitalfortheDavid care systemsintheworld.Ithasbeennamed“BestHospital intheWest” byU.S.News&World throughout theregion,UCLAHealthSystemisamong most comprehensiveandadvancedhealth the UCLAMedicalGroupwithitswide-reachingsystemof primary-careandspecialty-careoffices Santa Monica,ResnickNeuropsychiatricHospitalatUCLA, MattelChildren’s HospitalUCLA,and UCLA HealthSystem–ComprisedofRonaldReagan MedicalCenter, UCLAMedicalCenter Conference CenteratLakeArrowhead. more than11,000students;off-campusstudentandfacultyapartments; andmore,includingtheUCLA housing morethan11millionvolumes;acogenerationpower plant;on-campusstudenthousingfor existing buildingleasesforvariousprogrammaticactivities.UCLA’s buildingsinclude12libraries, along with194existingbuildings.Offcampus,UCLAownsormanages247buildingsandhas98 As of fall 2011, UCLA’s on-campus physical plant included five on-campusbuildingsunderconstruction, events secondtonone. and theUCLAFilm&Television Archiveprovidebothacademicprogramsandawidearrayofpublic The CenterfortheArt of Performance at UCLA,the Fowler Museum atUCLA,theHammer Museum has beengiventothreefacultyandfouralumni. received 10NationalMedalsofScienceandoneFieldsMedal;thePresidentialMedalFreedom receiving the Nobel Peace Prize in 1950). UCLA alumni include 12 Rhodes Scholars; faculty have in chemistry, physicsandmedicine(andtosixalumni,ineconomicschemistry, withonealumnus to education,researchandpublicservice.NobelPrizeshavebeenawardedfivefacultymembers, for thefiscalyearendedJune30,2012.UCLA’s employeesaredistinguishedfortheircontributions filling approximately30,000full-timeequivalentpositionsandspent$3billionincompensationcosts UCLA employsover41,000faculty, administratorsandstaff(includingcasualstudentemployees) over 39,000individualstudentsfromthemanycommunitiesofSouthernCaliforniaandbeyond. professional andcareerdevelopment,academicenrichmentpersonalgrowth.Thesecoursesattract UCLA Extensionoffersthepublicmorethan5,000continuingeducationcoursesannually, covering to research. the NationalAcademies;facultyawards;numberofdoctoratesawarded;andotherfactorsrelating based onthenumberofcompetitivelyawardedresearchgrantsandcontracts;facultymembershipin placed UCLA9thamongthenation’s toppublicandprivateresearchuniversities.Thisrankingwas million. In2010,themostrecentlyavailableranking,CenterforMeasuringUniversityPerformance, conducted oncampusatanygiventime.For2012,UCLAexpendituresforresearchexceeded$700 reform, thecostofhealthcareandmedicaladvances.Morethan6,000researchprojectsarebeing community focuses on environmentalissues, economic and socialpolicyconcerns, public education The campus’missionalsoincludesastrongdedicationtoresearchandpublicservice.UCLA diversity ofacademicprogramsenjoyedbyUCLAstudents. the bestinnation,andsomeareamongworld.Fewuniversitiesofferrange different subject areas. Known for academic excellence, many of UCLA’s programs are rated among graduate classes each quarter and supported more than 120,000 course enrollments per quarter in 160 During the2011-12academicyear, UCLAdeliveredmorethan3,200differentundergraduateand 08
MANAGEMENT’S DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Total Other OperationalExpenditures Depreciation Expense All Others University Extension Medical Center Neuropsychiatric Hospital Neuropsychiatric Institute Basic BiomedicalSciences School ofTheater, FilmandTelevision School ofPublicAffairs School ofPublicHealth School ofNursing School ofMedicine School ofManagement School ofLaw School ofEngineeringandAppliedScience Studies School ofEducationandInformation School ofDentistry andArchitecture School oftheArts College ofLettersandScience Organizations (dollars inmillions) Subtotal Organizations equivalent employeefiguresandoperatingexpensesbyorganization. the followingtablereflectscompositionofUCLAfor2012,listingenrollmentfigures,full-time core activityexpendituresisdiscussedinfurtherdetailthesubsequentsectionsofMD&A, An Overview–WhileUCLA’s financialinformationconcerningassets,liabilities,revenuesand
Full-Time
Undergraduates 27,199 27,199 21,940 3,300 Fall Enrollment 534 365 238 822 ------
Interns and Interns Graduates, Residents 13,476 13,476 2,285 1,914 1,086 1,844 2,686 380 492 626 352 902 496 361 52 - - - - -
Employees Equivalent Students) (Includes 4,763 30,730 2,205 2,557 30,730 640 246 394 6,879 858 692 7,771 574 764 7,333 3,497 68 34 34 429 47 17 30 54 27 289 62 13 615 14 25 175 13 57 257 12 28 152 29 335 15 85 183 36 48 49 18 397 30 51 264 68 848 51 20 59 31 25 55 427 34 21 392 34 487 392 294 392 294 $ 2,557 $ 263 Salaries Wages and 28 26 2 Operating Expenses Expenditures $ 2,891 $ 162 Other 24 9 Expenditures $ 5,449 $ 425 1,550 1,338 Total 116 119 09
management’s DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT THE CAMPUS’FINANCIALPOSITION GEP. $1.3 billionand$697million, respectivelyinTRIPand$1.2billion$1.3billion, in For 2012and2011,UCLA’s investmentsincluded$1.7billionand$1.8 billion, respectivelyinSTIP, percent in2011.STIPhadpositive returnsof2.4percentand2.5in20122011, respectively. a positive return of 20.2 percent in 2011. TRIP had positive returns of 6.7 percent in 2012 and 11.2 acceptable levels of risk. The GEP portfolio return was a negative return of 0.7percent in 2012 and intended tooptimizeinvestmentreturnsovertimeinaccordance withinvestmentobjectivesandat The RegentsoftheUniversityCalifornia(TheRegents) utilize assetallocationstrategiesthatare investment vehicleforindividualendowmentsandfundsfunctioning asendowments. return objectiveandisintendedtosupplementSTIP. TheGEPisa balancedportfolioandtheprimary of scaleinvestinginalargepoolacrossbroadrange assetclasses.TRIPismanagedtoatotal the opportunitytomaximizereturnonlong-termcapital bytakingadvantageoftheeconomies The UniversityusesSTIPtomeetoperationalliquidityneeds. TRIPallowsparticipatingcampuses (GEP). Cashforoperationsandbondproceedsconstruction expendituresareinvestedinSTIP. Investment Pool (STIP), the Total Return Investment Pool (TRIP) and the General Endowment Pool Investments heldbytheUniversityareprincipallycarriedinthreeinvestmentpools:ShortTerm consistent withmarketperformance. 2011. Generally, overthepasttwoyears,capitalassetshaveincreasedwhileinvestmentsfluctuated UCLA’s totalassetshavegrownby$780millionto$10.3billionin2012,compared$9.5 The Campus’Assets the assetsandliabilitiesofcampus.Thedifferencebetweenisnetposition. The statementofnetpositionpresentsUCLA’s financialpositionattheendoffiscalyear. Itdisplays ASSETS ANDDEFERRED
CURRENT NONCURRENT AND DEFERRED OUTFLOWS 2012 $1,577 $8,723 OUTFLOWS 2011 $1,514 $8,006 $5,252 $1,041 2012 LIABILITIES $4,511 $1,044 2011 (dollars inmillions) $4,007 NET POSITION DEFERRED OUTFLOWS NONCURRENT AND CURRENT NET POSITION 2012 $3,965 2011
NET POSITION 10
MANAGEMENT’S DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT ($14 million),notesandmortgagesreceivable($79million)otherassets($63million). Other assetsincludeinventories($48million),accountsreceivables($606pledgesreceivable Pavilion Renovationandtheimplementationofelectronicmedicalcenterhealthrecordsproject. the 16th Street Medical Office Building for$75 million. Projects under construction include the Pauley buildings andimprovementsincludedtheSantaMonicaReplacementHospitalfor$351million Total additionstocapital assetswere$681millionin2012and$5212011.Capitalized plants andinfrastructure,remotecentersforeducationaloutreach,researchpublicservice. buildings, libraries,studentservices,housingandauxiliaryenterprises,healthsciencecenters,utility teaching, researchandpublicservicemissionforpatientcare.Thesefacilitiesincludecoreacademic Capital assets,netcontinuestoincreaseinorderprovidethefacilitiesnecessarysupportUCLA’s under theUniversity’s fundingpolicy. ThefundingpolicycontributionsforUCLA2012 were$508 (UCRP) represents theunfunded portion ofthe actuarial determined annual required contributions and forretireehealthbenefits. TheUniversity’s obligationtoUniversityof California RetirementPlan The University has a financial responsibility for pension benefits associated with its defined benefit plan • ObligationstoUCRPandforretireehealthbenefits financial institutionforthepurposesofprovidingadditional liquidity. In February2012,theUniversityenteredintoa$215million revolvingcreditagreementwithamajor AA byFitch. Standard & Poor’s with a stable outlook. The University’s Limited Project RevenueBonds are rated Bonds arecurrentlyaffirmedatAa2withastableoutlook byMoody’s InvestorsServiceandAA-by stable outlook. The University’s Limited Project Revenue Bonds and Medical Center Pooled Revenue Moody’s InvestorsService,AA+byFitchwithastableoutlookandAAStandard&Poor’s with a The University’s GeneralRevenue Bond ratingsarecurrentlyaffirmedatAa1withastableoutlookby previously outstandingdebtand$28millioninprincipalpaymentsamortizations. outstanding debtin2012were$160million;including$38millionfortherefinancingorrefundingof of $63millionwereissuedtofinanceorrefinancecertainUCLAfacilitiesandprojects.Reductions In 2012,$466millionofdebtwasissued.GeneralRevenueBonds$403andcapitalleases commercial paperoutstandingattheendof2011. assets, includes$165millionofcommercialpaperoutstandingattheend2012and$33 financing forcapitalassetsduringtheconstructionperiod.UCLA’s debt,whichisusedtofinancecapital federal andstatesupport,revenuebonds,bankloansleases.Commercialpaperprovidesinterim end of2011.Capitalassetsarefinancedfromavarietysources,includingequitycontributions, Debt increasedby$437millionto$3.3billionattheendof2012,compared$2.9 issuance ofadditiondebtandincreasesintheobligationsforretireepensionshealthbenefits. Campus liabilitiesgrewto$6.3billionin2012,compared$5.52011,mainlyduethe The Campus’Liabilities 2012 and2011,respectively. derivatives, are reported as deferred outflows of resources totaling $52 million and $37 million for Changes infairvaluesoftheUniversity’s interestrateswaps,thataredeterminedtobehedging Deferred OutflowsofResources 11
MANAGEMENT’S DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT They increasedby$26millionto$175million. Other Liabilities Other obligation. TheunfundedliabilityforthecampusasofJuly1,2011actuarialvaluationwas$3.3billion. the obligationforretireehealthbenefitsisduetoimpactofamortizingUniversity’s unfunded you-go basis. The increase of $264 million and $326 million in both 2012 and 2011, respectively, in of CaliforniaRetireeHealthBenefit Trust (UCRHBT)baseduponaprojectionofbenefitsonpay-as- annual retireehealthbenefitexpense.TheUniversityfundstheexpensethrough The University’s obligation for retiree health benefits is based upon an actuarialdetermination of the 2011 were$419million,whichrepresents23.3percentofcoveredcompensation. million, which represents 26.5 percent of covered compensation. The funding policy contributions for benefits. decrease isduetopensionplanfundingrequirementsandincreases intheobligationforretireehealth and forotherpurposes.AsofJune30,2012,unrestrictednet positiondecreasedto$183million.This of the net position is allocated for academic and research initiatives or programs, for capital purposes, Although unrestrictednetpositionisnotsubjecttoexternally imposedrestrictions,substantiallyall restrictions governing their use must be classified asunrestricted for financialreportingpurposes. Under generallyacceptedaccountingprinciples,netposition thatisnotsubjecttoexternallyimposed global equitymarkets. expendable fundsisprincipallyrelatedtoarevaluationofexternaltrustsandslightdeclinein projects; trusteeheldinvestments;orotherthirdpartyreceipts.In2012,thedecreaseinrestricted subject to the University’s spending policy; support received from gifts, appropriations or capital accordance withtherestrictionsplaceduponthemandmayincludeendowmentincomegains, subjected to externallyimposed restrictions governing their use. Netpositionmaybespentonly in Restricted expendablenetposition,whichtotaled$1.3billionin2012and$1.42011,is distribution. in nonexpendablenetpositionwereprincipallyduetoinvestmentperformanceexcessoftheincome and theestimatedfairvalueofcertainplannedgivingarrangements.In20122011,increases Restricted, nonexpendable net positionincludes the corpusof the Campus’ permanent endowments its physicalfacilities. – was$2.3billionin2012,anincreaseof$309millionover2011asthecampuscontinuestoinvest outstanding debtusedtofinancetheacquisition,constructionorimprovementofthesecapitalassets The portionofnetpositioninvestedincapitalassets–accumulateddepreciationandrelated assets, netofrelateddebt;restrictednonexpendable;expendable;andunrestricted. the year-end totalto$4billion.Netpositionisreportedinfourmajorcategories:investedcapital liabilities arededucted.Duringtheyear, thecampus’netpositionincreasedby$42million,bringing Net positionrepresentstheresidualinterestinCampus’assetsanddeferredoutflowsafterall The Campus’NetPosition
include federalrefundableloans,andaccruedvacationderivativeinstruments. 12
MANAGEMENT’S DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT NET POSITION ransfers to(from)capitalaccounts ransfers to(from)coreactivities manent endowments OTHER CHANGESINNETPOSITION OTHER NONOPERATING ACTIVITIES EXPENSES REVENUES (dollars inmillions) End ofyear Beginning ofyear Increase innetposition T T Per Capital giftsandgrants State capitalappropriations Income (loss)beforeotherchangesin Gain (loss)ondisposalofcapitalassets, Income (loss)fromcoreactivities Expenses associatedwithcoreactivities Other expenses Interest expense Depreciation andamor Supplies andmaterials Utilities Scholarships andfellowships Salaries andbenefits Revenues suppor Other revenues,net Investment income,net Private gifts,net Sales andser Grants andcontracts,net Pell Grants State educationalappropriations Student tuitionandfees,net activities: that matchestherevenuesupportingcoreactivitiesofUCLAwithexpensesassociated Below isasummarizedcomparisonoftheoperatingresultsfor2012and2011,arrangedinformat recorded asnonoperatingrevenues. including stateeducationalappropriations,privategiftsandinvestmentincome,arerequiredtobe budgeted forfundamentaloperationalsupportofthecoreinstructionalmissionCampus, deteriorated. In accordance with GASB requirements, certain significant revenuesrelied uponand operating resultsforthefiscalyear. Itindicateswhetherthefinancialconditionhasimprovedor The statement of revenues, expenses and changes in net position is a presentation of the Campus’ THE CAMPUS’RESULTS OFOPERATIONS net position net ofproceeds vices, net ting coreactivities tization
Operating $
3,824 2,957 5,449 4,569 YEAR ENDEDJUNE30,2012 (880) 712 294 534 945 579 44 41 88 - - - - -
Nonoperating $
226 379 120 146 795 649 50 26 91 49 ------
$ $
3,965 3,824 2,957 4,007 5,595 5,364 (104) T (261) (231) 320 284 712 120 534 226 945 379 579 137 otal (30) 91 50 44 41 53 66 42 4
Operating $
3,419 2,753 4,935 4,262 (673) 271 663 480 951 503 YEAR ENDEDJUNE30,2011 46 56 55 - - - - -
Nonoperating $
129 195 480 129 802 673 37 47 43 ------
$ $
3,419 2,753 3,554 3,965 5,064 5,064 T 271 951 107 206 663 129 480 195 480 503 411 otal (21) (21) 37 47 35 67 17 46 56 98 - 13
MANAGEMENT’S DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT State EducationalAppropriations Other NonoperatingRevenues Depreciation AndAmortization Scholarships AndFellowships (Pell Grants,NetInvestments State EducationalAppropriations State Educational Appropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State Educational Appropriations State EducationalAppropriations State Educational Appropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations Other NonoperatingRevenues Depreciation And Amortization Other NonoperatingRevenues Other NonoperatingRevenues Other NonoperatingRevenues Depreciation AndAmortization Other NonoperatingRevenues Other NonoperatingRevenues Other NonoperatingRevenues Depreciation AndAmortization Depreciation AndAmortization Other OperatingRevenues Scholarships AndFellowships Depreciation AndAmortization Depreciation AndAmortization Depreciation AndAmortization Other NonoperatingRevenues Other NonoperatingRevenues Other NonoperatingRevenues Other NonoperatingRevenues Other NonoperatingRevenues Depreciation AndAmortization Other NonoperatingRevenues Scholarships AndFellowships Depreciation AndAmortization Depreciation AndAmortization Depreciation AndAmortization Scholarships AndFellowships Scholarships AndFellowships Depreciation AndAmortization (Pell Grants,NetInvestments Depreciation AndAmortization Scholarships AndFellowships Scholarships AndFellowships Scholarships AndFellowships Other NonoperatingRevenues Other NonoperatingRevenues Depreciation AndAmortization Scholarships AndFellowships (Pell Grants,NetInvestments Depreciation AndAmortization (Pell Grants,NetInvestments (Pell Grants,NetInvestments Scholarships AndFellowships Scholarships AndFellowships Scholarships AndFellowships Scholarships AndFellowships (Pell Grants,NetInvestments (Pell Grants,NetInvestments Scholarships And Fellowships (Pell Grants,NetInvestments (Pell Grants,NetInvestments Scholarships And Fellowships (Pell Grants,NetInvestments (Pell Grants,NetInvestments Scholarships AndFellowships (Pell Grants,NetInvestments (Pell Grants,NetInvestments (Pell Grants,NetInvestments Student TuitionAndFees Educational ActiviesAnd (Pell Grants,NetInvestments (Pell Grants,NetInvestments Supplies AndMaterials Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Salaries AndBenefits Other OperatingRevenues Other OperatingRevenues Grants AndContracts Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Auxilary Enterprieses Student TuitionAndFees Educational ActiviesAnd Student Tuition AndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Income AndOther) Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials instructional andnon-instructional programs. over thepastseveralyearsgiven theeffectsofstate’s financialcrisisthatrequired reductionsinboth support andself-supportingenterprises. Thevarietyoffundsourceshasbecomeincreasingly important State ofCalifornia,studentfees,federallysponsoredgrants andcontracts,medicalcenters,private A majorfinancialstrengthofUCLAincludesadiversesource ofrevenues,includingthosefromthe Revenues inthevariouscategorieshaveincreasedordecreasedoverlastyearasfollows: housing, foodservicesoperationsandparking. includes theUCLAHealthSystem,educationalactivitiesandauxiliaryenterprisessuchasstudent faculty forsupportoftheirfundamentalactivitiesornewacademicinitiatives.Salesandservicerevenue some of the most prominent researchers in the country. Gifts to the campus allow crucial flexibility to opportunities for undergraduate and graduate students to participate in basic research alongside core componentsthatsupporttheinstructionalmissionofUCLA.Grantsandcontractsprovide State ofCaliforniaeducationalappropriations,inconjunctionwithstudenttuitionandfees,arethe from $5.1billionin2011to$5.42012,anincreaseof$301million. Revenues tosupportUCLA’s coreactivities,includingthoseclassifiedasnonoperatingrevenues,grew Revenues SupportingCoreActivities Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Grants AndContracts Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Grants AndContracts Interest Expense Grants And Contracts Grants AndContracts Salaries And Benefits Auxilary Enterprieses Grants AndContracts Grants AndContracts Grants AndContracts Salaries And Benefits Salaries AndBenefits Grants AndContracts Auxilary Enterprieses Auxilary Enterprieses Auxilary Enterprieses Grants AndContracts Grants AndContracts Grants And Contracts Grants AndContracts Auxilary Enterprieses Auxilary Enterprieses Grants AndContracts Auxilary Enterprieses Auxilary Enterprieses Grants AndContracts Other Expenses Grants AndContracts Auxilary Enterprieses Auxilary Enterprieses Auxilary Enterprieses Auxilary Enterprieses Auxilary Enterprieses Income AndOther) Auxilary Enterprieses Auxilary Enterprieses Medical Centers Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Other Expenses Interest Expense Interest Expense Other Expenses Other Expenses Other Expenses Other Expenses Other Expenses Other Expenses Other Expenses Medical Centers Private Gifts Other Expenses Other Expenses Other Expenses Other Expenses Other Expenses Medical Centers Medical Centers Medical Centers Medical Centers Other Expenses Medical Centers Other Expenses Medical Centers Medical Centers Medical Centers Medical Centers Medical Centers Medical Centers Medical Centers Medical Centers Medical Centers (Pell grants,netinvestmentsincome REVENUES EXPENSES State educationalappropriations Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Utilities Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Grants andcontracts,net Depreciation and amortization Depreciation andamortization Other operatingrevenues,net Other nonoperatingrevenues REVENUES REVENUES REVENUES REVENUES REVENUES REVENUES REVENUES EXPENSES Scholarships andfellowships REVENUES REVENUES REVENUES REVENUES REVENUES EXPENSES EXPENSES EXPENSES REVENUES EXPENSES EXPENSES REVENUES EXPENSES REVENUES EXPENSES EXPENSES EXPENSES EXPENSES EXPENSES EXPENSES EXPENSES Student tuitionandfees,net EXPENSES EXPENSES REVENUES Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities auxilary enterprieses,net auxilary Grants andcontracts,net Educational activiesand Supplies and materials 2012 2012 (dollars inmillions) (dollars inmillions) Medical centers,net Private gifts,net Interest expense Other expenses Salaries and and other) 2011 2011 benefits Utilities $41 $54 $44 $56 $46 $88 $120 $129 $127 $190 $195 $226 $271 $320 $379 $480 $480 $503 $534 $579 $663 $945 $951 $712 $945 $951 $1,074 $1,219 $1,679 $1,738 $3,419 14
MANAGEMENT’S DISCUSSION & ANALYSIS $3,824 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT core activities,asofJune30,2012: The followingchartdisplaysthecategoriesofbothoperatingandnonoperatingrevenuesthatsupport and fees. increases, andotherinflationary costincreaseswerenotavailable,leadingtoinstudent tuition the expirationoffederalstimulus programs.Stateresourcesforenrollmentgrowth,faculty andstaff decreased in2012by$101millionasthestatecontinuesto addressitsfiscalchallengesanddueto 2012 and 2011, respectively, accounts for 7 percent of UCLA’s revenue. State educationappropriations State Educational Appropriations supplemental tuitionlevelsin2012and2011. Professional degreesupplementaltuitionvariesbydiscipline, althoughmostprogramsincreased undergraduate andgraduatesupplementtuitionfeesincreased 3percentand4respectively. low-income studentswhichresultedinthe23percentincrease inscholarshipallowances.Non-resident of therevenuegeneratedfromthesefeeincreaseswasusedfor financialaidtomitigatetheimpacton decline instateeducationalappropriations.Consistentwith pastpractices,approximatelyone-third and feesincreased16percent17percent,respectively. Thesefeeincreaseswerenecessitatedbythe and 39,593inthefallof20112010,respectively. Undergraduateandgraduatemandatorytuition The student enrollment increased 3 percent on a year-over-year basis, with enrolled students of 40,675 account for11percentofUCLA’s revenue. Student Tuition andFeesrevenue,netofscholarshipallowances,increased$76millionin2012 Total (dollars inmillions) Student Tuition andFees,net Scholarship allowance University Extension Summer Sessions Student tuitionandfees Private gifts,net revenues, net Other nonoperating $190 $226 Grants andcontracts,net $945 auxilary enterprieses,net auxilary Educational activiesand $1,219 from the State of California were $379 million and $480 millionin (dollars inmillions) 2012
$ $
2012 (239) 699 579 75 44
$ $
Medical centers,net $1,738 Other operating revenues, net Other operatingrevenues,net $88 $379 appropriations State educational 2011 (193) 583 503 72 41 and fees,net Student tuition $579
$ $
Change 116 (46) 76 3 3 15
MANAGEMENT’S DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Foundation andontothecampus, during2012and2011,wasforthePauleyPavilionrenovation. through TheUCLAFoundation forvariouscampusneeds.Thelargestgiftmovingthrough TheUCLA million, representinga$31million increasefrom2011.Approximately66percentofthese giftscame These fundsgenerallyarerestrictedtousesdesignatedbythe donor. In2012,revenuestotaled$226 by TheUCLAFoundationorJonssonCancerCenter untiltransferredtothecampusforuse. Private Giftrevenue,considerednonoperatingeithercomesdirectly fromthedonororisheld percent or$14million. off-campus housing,intercollegiateathletics,ASUCLA’s bookstoreandparkingservices,increased5 rates fromthird-partypayors.Salesauxiliaryenterprises, includingon-campusstudenthousing, $131 millionin2012.Thegrowthisgenerallyassociatedwith anexpandedpatientbaseandhigher Revenue fromeducationactivities,primarilyphysicians’professional fees,netofallowances,grewby patients. Assistance PercentagecontainedintheAmericanReinvestmentandRecoveryActforpoorindigent additional reimbursementsof$2millionand$16million,respectively, relatedtotheFederalMedicaid rates, outpatientvolume,andMedicarevolume.During20122011,themedicalcenterreceived and 2011,respectively. Therevenuegrowthinbothyearsisprimarilyduetoincreasescontract The UCLAHealthSystemrevenues,netofallowances,increased$59millionand$155in2012 auxiliary enterprises. Sales andServices,net with theprioryear. such astheDepartmentofHealthandHumanServicesNationalScienceFoundationthatended the American Recovery and Reinvestment Act of 2009 (ARRA) funded grants from federal agencies Federal grantandcontractrevenuedecreased$23millionfrom2011,whichisprimarilyattributedto 18 percentofUCLA’s revenue.Theawardedgrantsandcontractdollarsfor2012exceeded$1billion. in 2012and2011,respectively–were$945million$951accountingfor incur, includinganoverallfacilitiesandadministrationcostrecoveryof$191million$192 Grants andContracts,net Total (dollars inmillions) Sales andServices Total (dollars inmillions) Grants andContracts Auxiliar Educational activities UCLA HealthSystem Local gover Private industries State agencies Federal gover y enterprises,net nment representsrevenuefromUCLAHealthSystems,educationalactivitiesand nment –fromfederal,state,privateandlocalsources,recognizedasexpenditures
$ $ $ $
1,738 2,957 2012 2012 192 319 900 637 945 40 76
$ $ $ $
1,679 2,753 2011 2011 183 305 769 660 951 38 70
$ $ $ $
Change Change 131 204 (23) 14 59 (6) 2 9 6 16
MANAGEMENT’S DISCUSSION & ANALYSIS State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations State EducationalAppropriations Other NonoperatingRevenues Depreciation AndAmortization Other NonoperatingRevenues Other NonoperatingRevenues Other NonoperatingRevenues Depreciation AndAmortization Other NonoperatingRevenues Other NonoperatingRevenues Other NonoperatingRevenues Depreciation AndAmortization Depreciation AndAmortization Scholarships AndFellowships Depreciation AndAmortization Depreciation AndAmortization Depreciation AndAmortization Other NonoperatingRevenues Other NonoperatingRevenues Other NonoperatingRevenues Other NonoperatingRevenues Other NonoperatingRevenues Depreciation AndAmortization Other NonoperatingRevenues Scholarships AndFellowships Depreciation AndAmortization Depreciation AndAmortization Depreciation AndAmortization Scholarships AndFellowships Scholarships AndFellowships Depreciation AndAmortization (Pell Grants,NetInvestments Depreciation AndAmortization Scholarships AndFellowships Scholarships AndFellowships Scholarships AndFellowships Other NonoperatingRevenues Other NonoperatingRevenues Scholarships AndFellowships Depreciation AndAmortization (Pell Grants,NetInvestments Depreciation AndAmortization (Pell Grants,NetInvestments (Pell Grants,NetInvestments Scholarships AndFellowships Scholarships AndFellowships Scholarships AndFellowships Scholarships AndFellowships (Pell Grants,NetInvestments (Pell Grants,NetInvestments Scholarships AndFellowships (Pell Grants,NetInvestments (Pell Grants,NetInvestments Scholarships AndFellowships (Pell Grants,NetInvestments (Pell Grants,NetInvestments Scholarships AndFellowships (Pell Grants,NetInvestments (Pell Grants,NetInvestments (Pell Grants,NetInvestments (Pell Grants,NetInvestments 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT (Pell Grants,NetInvestments Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Other OperatingRevenues Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Student TuitionAndFees Educational ActiviesAnd Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Supplies AndMaterials Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Grants AndContracts Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Salaries AndBenefits Grants AndContracts Grants AndContracts Grants AndContracts Salaries AndBenefits Auxilary Enterprieses Grants AndContracts Grants AndContracts Grants AndContracts Salaries AndBenefits Salaries AndBenefits Grants AndContracts Auxilary Enterprieses Auxilary Enterprieses Auxilary Enterprieses Grants AndContracts Grants AndContracts Grants AndContracts Grants AndContracts Auxilary Enterprieses Auxilary Enterprieses Grants AndContracts Auxilary Enterprieses Auxilary Enterprieses Grants AndContracts Grants AndContracts Auxilary Enterprieses Auxilary Enterprieses Auxilary Enterprieses Auxilary Enterprieses Auxilary Enterprieses Income AndOther) Auxilary Enterprieses Auxilary Enterprieses Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Income AndOther) Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Interest Expense Other Expenses Interest Expense Interest Expense Other Expenses Other Expenses Other Expenses Other Expenses Other Expenses Other Expenses Other Expenses Medical Centers Other Expenses Other Expenses Other Expenses Other Expenses Other Expenses Medical Centers Medical Centers Medical Centers Medical Centers Other Expenses Medical Centers Other Expenses Medical Centers Medical Centers Medical Centers Medical Centers Medical Centers Medical Centers Medical Centers Medical Centers Medical Centers (Pell grants,netinvestmentsincome State educationalappropriations Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Private Gifts Depreciation and amortization Depreciation andamortization Other operatingrevenues,net Other nonoperatingrevenues REVENUES REVENUES REVENUES REVENUES REVENUES REVENUES REVENUES EXPENSES Scholarships andfellowships REVENUES REVENUES REVENUES REVENUES REVENUES EXPENSES EXPENSES EXPENSES REVENUES EXPENSES EXPENSES REVENUES EXPENSES REVENUES EXPENSES EXPENSES EXPENSES EXPENSES EXPENSES EXPENSES EXPENSES Student tuitionandfees,net EXPENSES EXPENSES REVENUES Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities Utilities auxilary enterprieses,net auxilary Grants andcontracts,net Educational activiesand Expenditures inthevariouscategorieshaveincreasedordecreasedoverlastyearasfollows: to students. core activitiesofthecampus,depreciationcapitalassets,andscholarshipfellowshippayments behalf oftheUniversity. Otherexpensesarerelatedtogoodsandservicesusedforoperationofthe core expenses arerelated to salariesandbenefits ofacademic andadministrativestaffworkingon expenses, totaled$5.6billion,up$531millionfrom$5.1billionin2011.Almosttwo-thirdsofUCLA’s UCLA’s expensesassociatedwithcoreactivitiesfor2012,includingthoseclassifiedasnonoperating The ExpensesAssociatedwithCoreActivities core activities,asofJune30,2012: The followingchartdisplaysthecategoriesofbothoperatingandnonoperatingexpensesthatsupport Supplies andmaterials 2012 2012 (dollars inmillions) (dollars inmillions) Medical centers,net Private gifts,net Interest expense Other expenses Salaries and and other) 2011 2011 benefits Utilities Other expenses $712 Supplies andmaterials $534 Interest expense $120 $41 $54 $44 $56 $46 $88 $120 $129 $127 $190 $195 $226 Salaries andbenefits $271 $3,824 $320 $379 $480 $480 $503 $534 $579 $663 $712 $945 $951 (dollars inmillions) $1,074 2012 $1,219 $1,679 $1,738 amortization Depreciation and $320 Utilities $41 fellowships Scholarships and $44
$3,419 $3,824 17
MANAGEMENT’S DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT or lossonthedisposalofcapitalassetsandothernonoperatingexpenses. variety ofexpensecategories,includingtravel,rent,insurance,repairsandmaintenance,plusanygain Other ExpensesAssociatedwithCoreActivities, in lightofreducedstateappropriations. volumes. The University continues to find opportunities to manage the costs of supplies and materials for generalsuppliesnecessarytosupportexpandedresearchactivityandincreasedmedicalpatient inflationary pressureonthecostsformedicalsuppliesandlaboratoryinstrumentshigher Supplies and Materials increased by $54 million or 11 percent during 2012, primarily due to places ahighpriorityonstudentfinancialaidaspartofitscommitmenttoaffordability. $320 millionin2012from$2872011,anincreaseof$33or11percent.UCLA to provide financial support for lowincome students, the Campus financial aid, in allforms, grew to revenue, notasanoperatingexpense.Onacombinedbasis,theCampuscontinuesitscommitment $231 millionin2011to$2792012.Thesescholarshipallowancesarereportedasanoffset by the Campus, also forms of scholarship and fellowship costs, increased in 2012 by $48 million, from million in2012.However, scholarshipallowances,representingfinancialaidandfeewaiversawarded reported asanoperatingexpense,decreased$15millionfor2012,from$56in2011to$41 Scholarships andFellowships,representedaspaymentsoffinancialaidmadedirectlytostudents costs andemployercontributionstotheUniversityretirementplan. average salaryperFTE.Benefitsincreasedby$217millionor21percentduetohigherhealthinsurance million or8percentduetoa3increaseinthenumberofFTEsand5 related tosalariesandbenefits,whichgrewby$404millionin2012.Salarieswagesincreased$187 (FTE) positions, a 3 percent increase over the prior year. Over68percentof UCLA’s expensesare Salaries andBenefits Capital appropriationsarefrombondmeasuresapprovedby theCaliforniavoters. sources increased,capitalappropriationsfromtheStateofCalifornia decreasedby$13millionin2012. modernization andseismiccorrectionforexistingfacilities. Althoughothercapitalassetfunding UCLA’s enrollmentgrowthrequiresnew facilities,inadditiontocontinuingneedsforrenewal, specified program. Only incomeearnedfromgiftsofpermanentendowments is availableinfutureyearstosupportthe capital giftsandgrantsmayonlybeusedforthepurchaseor construction ofthespecifiedcapitalassets. available tosupportUCLA’s operatingexpenses inthecurrentyear. Statecapitalappropriationsand Similar totheothernonoperatingactivitiesdiscussedabove, otherchangesinnetpositionarealsonot Other ChangesinNetPosition disposal ofcapitalassets,mainlyfortheremovaltwostructures. net depreciationinthefairvalueofinvestmentsduetoabondretirementand$30millionlossfor investments andthegainorlossondisposalofcapitalassets.In2012,UCLArealizeda$26million used tosupportoperatingexpenses.Theyincludenetappreciationordepreciationinthefairvalueof UCLA’s othernonoperatingactivitiesarenoncashtransactionsandthereforenotavailabletobe Other NonoperatingActivities coverover41,000employeesfillingapproximately30,000full-time-equivalent withanincreaseof$49millionfor2012,consistsa 18
MANAGEMENT’S DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Cash andcashequivalent,beginningofyear Net cashusedbyinvestingactivities Net cashprovided(used)bycapitalandrelatedfinancingactivities Net cashprovidedbynoncapitalfinancingactivities Cash paymentsforoperations Cash receivedfromoperations (dollars inmillions) Cash andcashequivalent,endofyear Net increaseincashandequivalent Net cashprovidedbyoperatingandnoncapitalfinancingactivities Net cashprovided(used)byoperatingactivities investment purchases,salesand,toalesserextent,income. Cash usedbyinvestingactivities,offsetinvestmentexpense,islargelytheresultofroutinetiming for purchasesofcapitalassetsandprincipalinterestpayments. financing, stateandfederalcapitalappropriations,giftsforprojectspartiallyoffsetbyuses Net cashof$58million,providedbycapitalandrelatedfinancingactivities,representsnewexternal activities, includingstateeducationalappropriations,privategiftsandgrants,investmentincome. operational support of the core instruction mission of the Campus are reported as noncapital financing million in2012.InaccordancewithGASBrequirements,certaincashflowsrelieduponforfundamental UCLA’s cashindemanddepositaccountsincreasedby$40million,from$822million2011to$862 A summarycomparisonofcashflowsfor2012and2011isasfollows: accounts managedbytheOfficeofPresidentonadailybasis. held indemanddepositaccounts,isminimizedbysweepingavailablecashbalancesintoinvestment The statementofcashflowspresentsthesignificantsourcesandusescash.UCLA’s cash,primarily THE CAMPUS’CASHFLOWS through budget cuts. The budgetthrough The cuts. state2013 budget assumed adoption governor’s of the revenue-raising initiative Legislature the and resolves governor about the $8 billionby of the gapadopted package The budget billion for 2012. In May, California. of State the for the billion governorgap$15.7 of a budget identified The University ofCalifornia’s budget state-funded billion, for$2.378 upfrom is slightly $2.272 2013 economic growth.that fuels millions ofstate, dollarsin andprivate andpromotesknowledge federal funding, of new thediscovery capacity toinnovate. The ofexcellence itsstudents, programs best attracts leverageshundreds the of centerbenefits, the alwaysCalifornia’s been has at and of andsocial steadystreamofknowledge a talent, system, isCalifornia aworldof University the of part as UCLA, center of learning, known for generating LOOKING FORWARD
$ $
(4,883) 4,511 2012 (376) (372) 822 730 358 862 58 40
$
$
(4,295) 4,323 2011 (122) (436) 565 787 815 822 257 28
$
$
Change (254) (588) (217) (457) (400) 188 257 494 (57) 40 19
MANAGEMENT’S DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT and medical suppliescosts of byand medical the faced hospitals along throughout SouthernCalifornia, with of providing continue them significantly. toincrease benefits salaries, rising costs of additionthe In to institution. anacademic as function The cost related andthe toits care services demand for health costs and added responsibilitiesthe competitiveand the market,along with financial in challenges The UCLA Health System has positivefinancial demonstrated continuesit very results,although face to bargaining forunion-representedemployees. subsidized survivorannuitiesforspousesanddomesticpartners. Thesechangesaresubjecttocollective new tierwouldnotofferlumpsumcashouts,inactivemember cost-of-livingadjustments(COLAs)or increase theearlyretirementagefrom50to55,butretainmany ofthecurrentfeaturesUCRP. The a newtierofpensionbenefitsapplicabletoemployeeshired onorafterJuly1,2013,whichwould These contributionratesarebelowUCRP’s total fundingrequirements.TheRegentsalsoapproved employee memberandemployercontributionsto6.5percent and12percent,respectively, inJuly2013. and 10percent, respectively, ofcoveredcompensationinJuly2012.TheRegentsapprovedincreasing 26.4 percentofcoveredcompensation.Memberandemployercontributionsincreasedto5percent 78 perceent.ThetotalfundingpolicycontributionsintheJuly1,2011actuarialvaluationsrepresent or 82.1percentfunded.AsofJuly1,2012,thefundedratioisexpectedtodecreaseapproximately contributions. TheunfundedliabilityfortheUCLAasofJuly1,2011actuarialvaluationwas$1.8billion UCRP costsarefundedbyacombinationofinvestmentearnings,employeememberandemployer to collectivebargainingforrepresentedmembers. formula using botha member’s age andyears of Retirement Plan servicecredit upon retirement,subject employees hiredonorafterJuly1,2013,andnon-grandfatheredmembers,thatisbasedagraduated was $3.3billion.TheRegentsapprovedaneweligibilityformulafortheRetireeHealthPlanall benefits on a pay-as-you-go basis. The unfunded liability for the UCLA July 1, 2011 actuarial valuation Currently, the UniversityofCaliforniadoesnotpre-fundretireehealthbenefitsandprovidesfor operating costsanddebtservice. the traditionalmanner, withhousingfeessettogeneratesufficientrevenuecoverdirectandindirect responding is byhousing continuestoberequiredinordersatisfydemand,andUCLA building atcapacity. occupied design Campus arecurrently residence halls Affordableandaccessiblestudent effect nottime. is determinableatof which this likelycontinuesupport will economy 2013 in toreflect the the changes in financialand the markets, donors qualityof UCLA’s the in of programsimportance its mission.and the At private time, same the of private level The supporters support Campus. continued underscores holdthe the confidence among regard its alumni, universities high which corporations,colleges andin andthe foundations andother UCLA’ssupport isprivate a testament to its distinction as a leader in philanthropy among thenation’s bipartisan effortunderwaytofocusoninnovationandcompetitivenessforthenation. Foundation. Whilethefederalgovernmentworksthroughitsownfinancialconstraints,thereisa and Human primarily Services, throughNational the Institutes of Health, andScience theNational oftwo-thirds UCLA’s research of revenueHealthfederal Department comes fromagencies, two the budgets research awardsofgranting the federal trendsin agencies.the Over received paralleling closely UCLA remains highly competitive in attracting federal grants and contracts revenue, with fluctuations in recognized theimportanceofcontinuedsupportforCalifornia’s highereducationinstitutions. held on November 6, 2012, this ballot measure (Prop 30) was approved voters by the of California, who November on0009) the would address which about ballot, gap. billion $5.6 of the At the general election Public Safety Protection Act Attorney of - 2012 and Local referenceSchools General number (The 12- 20
MANAGEMENT’S DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT external financing,external gifts sources. and other capital programprovided will be from a combination of sources, including the State of California, and continues goals its to assess long-term capitalpublic requirements. service The support for UCLA’s UCLA must have abalanced array of many categories of facilities to meet its education, research and and investprogram infrastructure expansion.in operating coverto marginsufficient debt, provide workingcapital, purchase equipmentstate-of-the-art providers other with links andpayers. Paymentmaintain to an strategies need must the recognize strategicthrough making investmentsmarketthe strongerefficiencies, in presence its and expanding by poor.for the Further, UCLAHealthSystemremains competitive the by reducing improved coststhrough results in commercial contracts have helped addressthe lack of support for medical education and care includes Positivewhich competing incommercial markets andoffering qualityregional services. high The continuing financial UCLAHealthSystemis the predicatedsuccess a of on multifaceted strategy, reduce ratesorpaymentgrowthtothemedicalcenterinfutureyears. resulthave a as of declined payment reductions. ChangestotheMedi-Calprogramwilllikelylimitor center. payment medical of their toouracademic teachingin years,Medicarefew last margins the Over Medi-Cal (California’s Medicaid cost insurance added program), payments notthe health do recognize care for adisproportionateshare of themedically underserved in California. Other than Medicare and educationcare professionalstechnologies, biomedicalresearch, the andtrainingof health new andthe maintaining UCLA andupgradingthe facilities, Health System also with additional costs associated faces changes in assumptions or changes in other factors affecting such forward-looking information. such forward-looking affecting factors other in orchanges assumptions in changes results, actual reflect to orelsewhere report this in contained information forward-looking update to undertake not UCLA does assumptions. various using was and derived factors various upon based is information This forward-looking information. forward-looking such in or suggested projected those from may differ materially results actual that mind in kept be itshould information, such In reviewing information. forward-looking contain – future the in ormay occur will or anticipates expects UCLA that or developments events activities, address Litigation Reform Act of 1995. All statements – other than statements of historical facts, which by its representatives, may contain forward-looking statements as defined inthe PrivateSecurities made statements ororal above outlined as written including by UCLA, provided information Certain Cautionary NoteRegardingForward-LookingStatements 21
MANAGEMENT’S DISCUSSION & ANALYSIS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT
KYLE ALEXANDER Photography “pods” in which students and faculty can utilize library resources, conductresearchandworkwith oneanother.“pods” inwhich students andfacultycanutilizelibrary The researchcommons intheCharlesE.Young ResearchLibrary, completed inFall2011,offers22flexible, technology-enabled 22 FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Corporate FinancialServices Associate Vice Chancellor/Controller Allison Baird-James Respectfully submitted, statements underaseparatecolumntitled“Foundations.” Foundation canbefounddiscretelyrecordedonthecampus’ financial separate, tax-exemptUCLAFoundationandtheJonssonCancerCenter Organizations AreComponentUnits,thefinancialactivityoflegally In compliancewithGASBStatementNo.39,DeterminingWhetherCertain Standards Board(GASB). accordance withthestandardsprescribedbyGovernmentalAccounting University ofCaliforniarecordsandaccounts,whicharemaintainedin Financial Report,whilenotseparatelyaudited,ispreparedfromtheofficial and Analysisdetailonlylocalcampus activity. ThisseparateUCLAAnnual The accompanyingFinancialStatementsandManagement’s Discussion report istransmittedtoTheRegents. University ofCaliforniabythefirmPricewaterhouseCoopers,whose are auditedaspartoftheConsolidatedAnnualFinancialReport The UCLAFinancialStatementsarenotindividuallyaudited,butrather (UCLA), forthefiscalyearendedJune30,2012and2011. and theresultsofoperationsUniversityCalifornia,LosAngeles The accompanyingFinancialStatementsreflectthefinancialposition LETTER TRANSMITTAL 23 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT
See accompanying Notes toFinancialStatements. At June30,2012and2011 STATEMENT OFNETPOSITION UNIVERSITY LIABILITIES DEFERRED OUTFLOWOFRESOURCES investments t-term ASSETS NET POSITION Current por Pledges receivable,net Accounts receivable,net Investments heldbytrustees Investment ofcashcollateral Shor Cash Unrestricted Restricted: Invested incapitalassets,netofrelateddebt Other noncurrentliabilities Obligation forretireehealthbenefits Obligation toUCRP Long-ter Obligations underlifeincomeagreements Federal refundableloans Other currentliabilities Funds heldforothers Current por Commercial paper Deferred revenue Accrued salariesandbenefits Accounts payable Deferred outflowfrominterestrateswapagreements Other noncurrentassets Capital assets,net Notes andmor Pledges receivable,net Investments heldbytrustees Investments ofcashcollateral Investments Other currentassets Inventories Total restricted Expendable: Nonexpendable: Noncurrent liabilities Current liabilities Noncurrent assets Current assets m debt Funds functioningasendowment Annuity andlifeincomefunds Annuity andlifeincomefunds T Total assets Total net position Other Appropriations Debt Capital service Loans projects Gifts Grants Endowment and income contracts Endowments Endowments Total liabilities otal deferredoutflowofresources tion of long-term debt tion oflong-term receivable,net tion ofnotesandmortgages tgages receivable,net OF CALIFORNIA,LOSANGELES (dollars inthousands)
$ $
10,247,585 5,230,343 3,343,792 1,435,324 3,073,161 8,670,443 1,577,142 1,521,933 2,301,635 6,293,518 5,252,523 1,040,995 4,006,819 606,721 842,949 209,561 554,131 419,527 230,750 175,448 508,208 115,791 225,844 147,048 307,499 164,520 183,251 16,000 72,603 47,226 48,451 37,474 64,437 60,382 80,293 52,752 18,770 52,752 (2,295) 6,809 1,198 1,161 7,691 6,059 5,535 2012 157 412 14 42 - - - -
CAMPUS
$ $
4,873,362 2,996,595 1,156,086 2,729,362 7,968,111 1,514,360 1,650,468 1,992,249 5,555,214 4,510,738 1,044,476 9,482,471 3,965,216 593,518 784,238 196,577 547,418 531,722 229,710 149,707 418,913 143,095 241,407 228,055 280,168 118,457 322,499 16,313 72,630 42,957 40,360 38,884 66,493 56,670 37,959 37,484 14,875 18,723 33,294 37,959 6,686 1,484 4,130 9,199 8,964 2011 153 410 12 42 - - - -
$ $
1,485,333 1,767,731 1,614,108 1,976,256 1,753,394 137,902 387,398 377,008 128,951 690,833 232,420 175,042 139,286 208,525 222,862 187,594 23,158 17,879 46,329 19,300 13,258 16,660 35,268 35,268 8,941 2,945 1,332 5,400 2,945 4,207 2012 550 167 FOUNDA ------
TIONS $ $
1,553,720 2,027,826 1,786,534 1,579,052 1,782,172 327,936 394,963 153,950 669,808 160,369 182,585 179,697 203,120 245,654 210,104 241,292 11,943 13,770 39,480 35,550 24,516 16,958 22,803 14,279 18,116 22,803 35,550 5,407 2,197 1,510 2011 172 ------24
FINANACIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT
See accompanying Notes toFinancialStatements. Beginning ofyearrestated NET POSITION Transfers endowments Permanent Capital giftsandgrants State capitalappropriations OTHER CHANGESINNETPOSITION Other nonoperatingrevenues(expenses) Gain (loss)ondisposalofcapitalassets,net Interest expense Net (depreciation)appreciationinfairvalueofinvestments t Term InvestmentPool Investment income Private gifts Federal PellGrants State hospitalfeegrant Build AmericaBondsfederalinterestsubsidies State financingappropriations State educationalappropriations NONOPERATING REVENUES(EXPENSES) otal operatingexpenses Other operatingexpenses Campus foundationgrants Depreciation andamortization Supplies andmaterials Utilities Scholarships andfellowships Benefits Retiree healthbenefits UCRP benefits Salaries andwages otal operatingrevenues OPERATING EXPENSES Other operatingrevenues,net Private gifts Sales andservices: Grants andcontracts: Student tuitionandfees,net OPERATING REVENUES At June30,2012and2011 STATEMENT OFREVENUES,EXPENSESANDCHANGESINNETASSETS UNIVERSITY End ofyear Increase innetassets Income (loss)beforeotherchangesinnetposition Net nonoperatingrevenues Campus foundations Securities lending,net Shor Operating loss T T Auxiliar Educational activities Medical centers Local Private State Federal y enterprises,net OF CALIFORNIA,LOSANGELES
(dollars inthousands)
$ $
2,556,884 1,738,598 3,965,216 4,568,833 5,448,784 4,006,819 (120,335) (104,440) (879,951) (260,967) 410,632 319,139 899,793 191,545 636,799 337,171 226,020 379,474 712,103 293,764 533,774 522,896 332,995 578,671 618,984 (30,022) (26,132) 87,964 40,523 75,801 65,620 90,781 50,155 10,851 29,909 44,445 41,291 41,603 8,283 4,219 2012 - - - -
CAMPUS
$ $
2,369,612 1,679,483 3,553,961 4,261,789 4,935,003 3,965,216 (128,841) (673,214) 359,426 304,557 769,367 182,833 659,594 142,270 195,076 479,790 663,446 270,561 479,763 483,310 206,939 503,072 206,570 411,255 651,552 (21,366) (21,662) 54,359 38,344 70,180 66,979 37,021 46,795 10,313 29,817 45,662 56,284 17,098 2,947 2011 - - - - -
$ $
1,782,172 1,753,394 235,347 184,606 184,606 237,191 (59,790) (28,778) (24,816) (52,585) (77,401) 48,623 36,936 (2,206) 1,844 2012 244 FOUNDA ------
TIONS $ $
1,334,029 1,782,172 115,059 161,321 361,886 448,143 172,366 361,886 371,128 198,762 163,124 77,015 57,833 1,803 2011 (631) 105 ------25
FINANACIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Current: Current (to)/fromretirementofindebtedness At June30,2012and2011 TRANSFERS UNIVERSITY See accompanyingNotestoFinancialStatements. otal transfers Indirect costrecovery Loans Renewals andreplacements Investment inplant: Retirement ofindebtedness Unexpended balances-plant T Intrafund transferdepreciation Intrafund transferassets Net adjustments Indirect costrecover Net revenueofbondsandotherindebtednessprograms Interfund Intercampus Intrafund OF CALIFORNIA,LOSANGELES y (dollars inthousands)
$ $
210,632 337,171 53,225 72,086 1,100 2012 (136) 130 134 ------
CAMPUS
$ $
124,698 142,270 (89,215) 34,301 72,145 2011 (162) (181) 614 70 ------26
FINANACIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT
Cash andcashequivalents,beginningof yearrestated Intercampus transactions Investment income,netofinvestmentexpenses Purchase ofinvestments: Proceeds fromsalesandmaturitiesofinvestments: CASH FLOWSFROMINVESTINGACTIVITIES Transfers Interest paidondebtandcapitalleases Principal paidondebtandcapitalleases Refinancing/prepayment ofoutstandingdebt Purchases ofcapitalassets Proceeds fromthesaleofcapitalassets Proceeds fromdebtissuance Capital giftsandgrants Build AmericaBondsfederalinterestsubsidies State financingappropriations State capitalappropriations Commercial paperfinancing CASH FLOWSFROMCAPITAL ANDRELATED FINANCINGACTIVITIES Transfers Other receipts(payments) Gifts receivedforotherthancapitalpurposes: Federal PellGrant State educationalappropriations CASH FLOWSFROMNONCAPITAL FINANCINGACTIVITIES Transfers Other receipts(payments) Operating expensesandgrants Loans issuedtostudentsandemployees Payments forscholarshipsandfellowships Payments tosuppliersandutilities Payments forotheremployeebenefits Payments forretireehealthbenefits Payments toUCRP Payments toemployees Private gifts Collection ofloansfromstudentsandemployees of: Receipts fromsalesandservices Grants andcontracts Student tuitionandfees,net CASH FLOWSFROMOPERATING ACTIVITIES At June30,2012and2011 STATEMENT OFCASHFLOWS UNIVERSITY Cash andcashequivalents, endofyear Net increase(decrease)incashand equivalents Net cashprovided(used)byinvestingactivities Other investments Other investments Net cashusedbycapitalandrelatedfinancingactivities Interest paid Proceeds fromissuance Net cashprovidedbynoncapitalfinancingactivities Other privategifts Private giftsforendowmentpurposes Net cashprovided(used)byoperatingactivities Auxiliar Educational activities Medical centers y enterprises,net OF CALIFORNIA,LOSANGELES (dollars inthousands)
$ $
(1,443,932) (2,650,024) 1,739,373 (519,305) (151,177) (465,920) (137,870) (132,599) (577,192) (371,898) (375,837) 318,864 875,866 917,076 583,486 821,722 283,816 411,677 131,226 230,380 379,474 861,719 729,869 (41,291) (67,364) (17,361) 58,662 10,329 90,779 55,502 11,125 17,663 11,876 45,945 23,915 50,155 39,997 57,863 (9,871) 7,410 2012 (696) CAMPUS ------
$ $
(1,254,055) (2,368,350) 1,690,621 (475,139) (159,508) (133,914) (159,994) (478,918) (436,175) (122,631) 304,940 761,648 967,166 502,847 564,928 220,341 195,156 479,790 256,794 821,722 787,109 (10,356) (71,106) (56,284) (59,213) (14,974) 46,555 38,952 10,265 36,992 35,210 32,455 13,767 10,199 29,399 60,505 46,795 28,491 1,225 9,029 4,863 2011 (115) - - - - -
$ $
(235,180) (383,602) (118,603) 120,506 445,486 18,906 37,635 80,790 37,635 (3,929) 1,510 1,332 2012 (178) FOUNDATIONS ------
$ $
(162,054) (496,691) (167,389) 274,296 298,351 108,607 30,951 59,611 59,611 (3,635) 1,510 2011 681 829 ------27
FINANACIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT
REED HUTCHINSON Photography The Academic Resources and Campus Services Fair is a popular Bruin Day destination. Powell Library isinthebackground. Fair isapopularBruinDaydestination. PowellLibrary The AcademicResources andCampusServices 28
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT below, Foundationactivityisdisclosedonthe UCLAfinancialstatementsinaseparatecolumn. In accordancewiththestatements oftheGovernmentalAccountingStandardsBoard(GASB) detailed campus’ recordsuntilsuchtime asgiftsaretransferredfromtheFoundationtocampus. UCLA. The financial activities oftheseparately incorporated Foundationare notreflectedwithinthe encouraging voluntaryprivategiftsforthebenefitof Jonsson ComprehensiveCancerCenterat The JonssonCancerCenterFoundationisa501(c)3organization establishedforthepurposeof are transferredfromtheFoundationtocampus. separately incorporatedFoundationarenotreflectedwithin the campus’recordsuntilsuchtimeasgifts and administeringthefullrangeofprivatecontributionsfor thecampus.Thefinancialactivitiesof The UCLAFoundationisanonprofit,public-benefitcorporation organizedforthepurposeofaccepting Understanding ofASUCLA’s Relationshipwith theUniversity, datedJune28,1974. the UCLAcampus.ASUCLAconductsactivitiesoncampuspursuanttoStatementof and 2011hasbeenincludedinthefinancialstatementsordertoreflecttotalactivityof The Associated Students ofUCLA(ASUCLA)’s financialdataforthefiscalyearsendedJune30,2012 have notbeenindividuallyaudited. financial statements,ofwhichUCLAisapart.ThestatementsfortheLosAngelescampus Medical Center. TheUniversityofCaliforniasystemissubjectedtoanannualaudittheconsolidated in this annual report present the combined activities of the Los Angeles campus, includingthe UCLA the largestcampusin10-campusUniversityofCaliforniasystem.Thefinancialstatementsincluded The LosAngelescampusoftheUniversityCalifornia(UCLA)wasfoundedin1919andisfinancially discretely presentedinthestate’s generalpurposefinancialstatementsasacomponentunit. through appropriationsfromthestate’s annualBudgetAct.TheUniversity’s financialstatements are and approved by the state Senate. Various University programs and capital outlay projects are funded majority of the 26-member independent governing board (The Regents) is appointed by the Governor the securityofitsfundsandcompliancewithcertainstatutoryadministrativerequirements.The full powersoforganizationandgovernment,subjectonlytosuchlegislativecontrolnecessaryensure administered bythecorporation“TheRegentsofUniversityCalifornia,”whichisvestedwith institution. TheCaliforniaStateConstitutionprovidesthattheUniversityshallbeapublictrust The UniversityofCalifornia(theUniversity)wasfoundedin1868asapublic,state-supported ORGANIZATION/FINANCIAL REPORTING ENTITY University ofCalifornia,LosAngeles Years EndedJune30,2012and2011 STATEMENTS FINANCIAL NOTES to 29 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT DEFERRED OUTFLOWOFRESOURCES (in thousandsofdollars) Deferred outflowsfrominterestrateswapagreements Other noncurrentassets on thelastbusinessdayof fiscalyear, asquotedonarecognized exchange orutilizinganindustry Investments. Investmentsarestatedatfair value.Securitiesaregenerallyvaluedatthelastsaleprice equivalents areconsideredtobe short-terminvestments. Cash. The significantaccountingpoliciesofUCLAaresummarized asfollows: position fortheyearsendedJune30,2012and2011. implementation of Statement No. 64 had no effect on the University’s net position or changes in net 2011. ThisStatementclarifiestheexistingrequirementsfor theterminationofhedgeaccounting.The however, theUniversityadoptedthisStatement early, effectiveforthefiscalyearbeginningJuly1, Accounting Termination Provisions, effective for the University’s fiscal year beginning July1, 2012; In June2011,theGASBissuedStatementNo.64, UCLA FoundationorJohnsonCancerCenterFoundation. The adoption of Statement No. 63 did not result in any adjustments to the financial statements for the follows: of StatementNo.63ontheUniversity’s financialstatementsfortheyearendedJune30,2011wasas and deferredoutflowsinthefinancialstatements.Theeffectofchangesfromimplementation the fiscalyearbeginningJuly1,2011.ThisStatementmodifiespresentationofdeferredinflows beginning July1,2012;howevertheUniversity adopted thisStatementearly, makingiteffectivefor Resources, DeferredInflowsofandNetPosition, In June2011,theGASBissuedStatementNo.63, changes innetpositionfortheyearsendedJune30,2012and2011. of the University. Implementation of Statement No. 61 had no effect on the University’s net position or requirements fortheassessmentofcomponentunitsthatshouldbeincludedinfinancialstatements effective fortheUniversity’s fiscalyearbeginningJuly1,2011.ThisStatementmodifiestheexisting In November2010,theGASBissuedStatementNo.61, Accounting StandardsBoard(GASB). accrual basisofaccounting.TheUniversityfollowsaccountingprinciplesissuedbytheGovernment accepted in the United States of America, using the economic resources measurement focus and the The financialstatementshavebeenpreparedinaccordancewithaccountingprinciplesgenerally SIGNIFICANT ACCOUNTINGPOLICIES Noncurrent assets T Total assets otal deferredoutflowofresources UCLA considersallbalancesindemanddepositaccountsto be cash.Allotherhighlyliquidcash
PREVIOUSL $ $
8,185,410 5,009,475 Y ISSUED 54,272 2011 Derivative Instruments:ApplicationofHedge Financial ReportingofDeferredOutflows
The FinancialReportingEntity:Omnibus, effective fortheUniversity’s fiscalyear $ $
CHANGE (37,959) (37,959) (37,959) 37,959 37,959
$ $
AS REVISED 8,147,451 4,971,516 37,959 37,959 16,313 2011 30 NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT industry standardpricingservice, whenavailable.Financialinstitutionsorindependentadvisors have the last sales price on the last day of the fiscal year, as quotedon arecognizedexchange orutilizingan foreign currencyexchangecontracts, stockrightsandwarrants,optionsswaptionsare valuedat Derivative financialinstruments. income isaccruedasearned.Giftsofsecuritiesarerecordedbased onfairvalueatthedateofdonation. average costoftheinvestmentsold.Dividendincomeisrecorded ontheex-dividenddateandinterest Realized gainsorlossesarerecordedasthedifferencebetween theproceedsfromsaleand Investment transactionsarerecordedonthedatesecurities arepurchasedorsold(tradedate). revenues, expensesandchangesinnetposition. gains andlossesresultingfromforeigncurrencychangesare includedintheUniversity’s statementof are translatedattherateofexchangeonrespective transaction dates.Realizedandunrealized end spotforeigncurrencyexchangerates.Purchasesandsales ofinvestmentsandtheirrelatedincome Investments denominatedinforeigncurrenciesaretranslatedintoU.S.dollarequivalentsusingyear- University’s proportionalinterestinthefairvalueoftrustassets. to theUniversityarebaseduponpresentvalueofexpectedfutureincomeor, ifavailable,the either theincomeorremainderthatwillnotbecomeapermanentendowmentupondistribution fair valueofinterestsinexternallyheldirrevocabletrustswheretheUniversityisbeneficiary are valuedatcontractvalue,plusreinvestedinterest,whichapproximatesfairvalue.Estimatesofthe and interestpayments,discountedatprevailingratesforsimilarinstruments.Insurancecontracts those companies.Mortgageloans,heldasinvestments,arevaluedonthebasisoftheirfutureprincipal Investments inregisteredinvestmentcompaniesarevaluedbaseduponthereportednetassetvalueof approximates fairvalue. Deposits withtheStateofCaliforniaarevaluedatcontractvalue,whichUniversitybelieves had areadymarketforsuchinvestmentexisted. value issubjecttouncertaintyand,therefore,maydiffersignificantlyfromthethatwouldbeused partnerships, alongwithdirectinvestmentsinrealestate,arenotreadilymarketable,theirestimated a reasonableestimateoffairvalueatJune30.Becausetheprivateequity, realestateandabsolutereturn appraisals. TheUniversitybelievesthecarryingamountofthesefinancialinstrumentsandrealestateis June 30.Interestsincertaindirectinvestmentsrealestateareestimatedbaseduponindependent return partnershipsarevaluedasofMay31,adjustedforcashreceiptsanddisbursementsthrough receipts, cashdisbursements and securitiesdistributionsthroughJune30.Investmentsinabsolute provided bythegeneralpartnersofrespectivepartnershipsasMarch31,adjustedforcash international funds.Interestsinprivateequityandrealestatepartnershipsarebaseduponvaluations corporate asset-backedsecurities.Privateequitiesincludeventurecapitalpartnerships,buyoutand Investments also include private equities, absolute return funds, real estate, real assetandcertain these investments. appropriate risk-adjusteddiscountrates.TheUniversitybelievesthisapproximatesthefairvalueof income securitiesarevaluedonthebasisoftheirestimatedfutureprincipalandinterestpaymentsusing As aresultofinactiveorilliquidmarkets,certaininvestmentsinnon-agencymortgage-backedfixed- source. in thesecuritybeingvalued.Certainsecuritiesmaybevaluedonabasisofpriceprovidedbysingle last business day of the fiscal year are valuedatthe quoted bid priceof adealerwho regularly trades standard pricingservice,whenavailable.Securitiesforwhichnosalewasreportedasoftheclose Derivativeinstrumentsarerecorded atfairvalue.Futurescontracts, 31
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT collections, andspecialcollections arecapitalized. cost inexcessof$5,000anda usefullifeofmorethanoneyeariscapitalized.Allcostsland, library a usefullifeofmorethanone year. Minorrenovationsarechargedto operations.Equipmentwitha to infrastructureandbuildings aregenerallycapitalizedifthecostexceeds$35,000and if theyhave future minimum lease payments. Significant additions, replacements, majorrepairsand renovations value. Intangibleassetsincludeacquiredgoodwill.Capitalleases arerecordedatthepresentvalueof and estimation methods that are uncertain and, therefore, the estimates could differ from actual fair valueatthedateofdonationincasegifts.Estimates offairvalueinvolveassumptions library collectionsandspecialarerecordedatcost atthedateofacquisition,orestimated Capital assets,net.Land,infrastructure,buildingsandimprovements,intangible assets,equipment, typically determined under the weighted average method, which is not in excess ofnet realizable value. Inventories. of netposition. investments, andloansprovidedbyothersourcesareclassifiedasmortgagesreceivableinthestatement other Universitysources.MortgageloansprovidedbytheShortTerm InvestmentPoolareclassifiedas loans, primarily to faculty, are provided from the University’s Short Term Investment Pool and from are providedfromfederalstudentloanprogramsandotherUniversitysources.Homemortgage Notes andmortgagesreceivable,net. conditions aremet. endowments andintentionstopledge,arerecognizedasreceivablesrevenueswhenthespecified year promisedatthepresentvalueofexpectedcashflows.Conditionalpledges,includingpledges net ofallowanceforuncollectibleamounts,arerecordedaspledgesreceivableandrevenueinthe Pledges receivable, net. Unconditional pledges of private gifts to UCLA to be received in the future, faculty forservices. private grantsandcontracts,educationalactivitiesamountsduefromstudents,employees accrued incomeoninvestmentsandotherreceivables.Otherreceivablesincludelocalgovernment reimbursements duefromstateandfederalsponsorsofexternallyfundedresearch,patientbillings, Accounts receivable,net.netofallowanceforuncollectibleamounts,includes depreciation ofinvestmentsinthestatementrevenues,expenseandchangesnetposition. Changes infairvalueofderivativesthatarenothedgingrecordedasnetappreciationor derivatives withnegativefairvalues). be deferred inflows (for hedging derivatives with positive fair values) or deferred outflows (for hedging flow hedge.Underhedgeaccounting,changesinthefairvalueofhedgingderivativesareconsideredto Certain derivativesaredeterminedtobehedginganddesignatedaseitherafairvalueorcash Derivatives arerecordedatfairvalueaseitherassetsorliabilitiesinthestatementofnetposition. University’s counterpartiesaremajorfinancialinstitutions. or receivedisrecognizedoverthelifeofagreementsasanadjustmenttointerestexpense.The without exchangeoftheunderlyingnotionalprincipalamounts.Thenetdifferentialtobepaid counterparty offixed-andvariable-rateinterestpaymentsperiodicallyoverthelifeagreement debt tochangesinmarketinterestrates.Interestrateswapagreementsinvolvetheexchangewitha The Universityhasenteredintointerestrateswapagreementstolimittheexposureofitsvariable-rate when availableordiscountedexpectedfuturenetcashflows. estimated thefairvalueofinterestrateswapsandtotalreturnusingquotedmarketprices Inventories, consistingprimarilyofsuppliesandmerchandise forresale,arevaluedatcost, Loanstostudents,netofallowanceforuncollectibleamounts, 32
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT recorded onasystemwidebasis. statements donotreflectanyliabilitiesforself-insurance claims,astheseestimatedliabilitiesare expenses in UCLA’s Statement of Revenues, Expenses and Changes in Net Position. UCLA’s financial predetermined ratesappliedtopayrollandotherexpenses. These amountsarereflectedasoperating present valueoftheanticipatedfutureclaims.Eachcampus fundstheself-insuranceliabilitythrough reported. Theestimatedliabilitiesarebaseduponanindependent actuarialdeterminationofthe reasonably estimated.Theselossesincludeanestimatefor claimsthathavebeenincurred,butnot a systemwidebasiswhenitisprobablethatlosshasoccurred andtheamountoflosscanbe limits, withexcessliabilitycoverageprovidedbyanindependent insurer. Liabilitiesarerecordedon employee healthcareandgeneralliabilityclaims.Theserisks aresubjecttovariousclaimandaggregate Self-insurance programs.TheUniversityisself-insuredformedicalmalpractice,workers’compensation, owed uponterminationoftheprogram. receivable and the related federal refundable loan liability representing federal capital contributions supported bythefederalgovernment.UCLA’s statementofnetpositionincludesboththenotes Federal refundableloans.CertainloanstostudentsareadministeredbyUCLAwithfundingprimarily on behalfoforganizationsthatarenotsignificantorfinanciallyaccountabletotheFoundations. Funds held for others. advance oftheevent,suchasstudenttuitionandfees,feesforhousingdiningservices. sponsors thathavenotbeenearnedunderthetermsofagreementandotherrevenuebilledin Unearned revenue. Unearned revenue primarily includes amountsreceived from grant andcontract borrowings. income earnedontax-exemptborrowingsduringthetemporaryinvestmentofprojectrelated Interest onborrowingstofinancefacilitiesiscapitalizedduringconstruction,netofanyinvestment — arenotdepreciated. for publicexhibition,educationorresearch,includingart,museum,scientificandrarebookcollections Inexhaustible capitalassets—suchaslandorspecialcollectionsthatareprotected,preservedandheld reversionary interestarealsocapitalizedanddepreciated. Capital assetsacquiredthroughfederalgrantsandcontractswherethegovernmentretainsa Estimated economiclivesaregenerallyasfollows: lease ortheeconomiclifeofasset. improvements areamortizedusingthestraight-linemethodovershorteroflifeapplicable Equipment undercapitalleasesisamortizedovertheestimatedusefullifeofequipment.Leasehold Depreciation iscalculatedusingthestraight-linemethodoverestimatedeconomiclifeofasset. Funds heldforothers result fromthe Foundations actingasanagent,orfiduciary, Library booksandcollectibles Library Intangible assets Computer software Equipment Buildings andimprovements Infrastructure 15 years 2–10 years 3–7 years 2–20 years 15–33 years 25 years 33
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Obligations underlifeincomeagreements. grants andcontractsforspecific operatingactivities,andsalesservicesfrommedical centers, Revenues andexpenses.OperatingrevenuesofUCLA includereceiptsfromstudenttuitionandfees, budgetary policiessurrounding thevariousrevenuesourcesorwhetherexpenseisarecurring cost. including considerationofpriorandfuturerevenuesources, thetypeofexpenseincurred,UCLA’s Expenses arechargedtoeitherrestrictedorunrestrictednet positionbaseduponavarietyoffactors, following categories: Net position.positionisrequiredtobeclassifiedforaccountingandreportingpurposesintothe pollution remediationliability. support theactivity. TherewerenoexpectedrecoveriesatJune30,2012and2011reducingthe additional informationthatrefinestheestimates,orfrompaymentsmaderevenuesources annually and may increase or decrease the cost of recovery from thirdparties, if any, as a result of agencies haveindicatedthattheUniversityisamongresponsibleparties.Theliabilitiesarerevalued involved groundwater, soilandsedimentcontaminationatcertainsiteswherestateotherregulatory the expectedcashflowtechnique,areaccruedasaliability. Pollutionremediationliabilitiesgenerally expected pollutionremediationcostsandrecoveriesfromthirdparties.Thecosts,estimatedusing Pollution remediationobligations. expendable netposition;allothersareclassifiedasrestricted,nonexpendableposition. and changesinnetposition.Resourcesthatareexpendableuponmaturityclassifiedasrestricted, losses areincludedinothernonoperatingincome(expense)thestatementofrevenues,expenses recorded asrevenue,netoftheincomebeneficiaryshare,atdategift.Actuarialgainsand interest isreportedasaliabilityinthestatementofnetposition.Giftssubjecttosuchagreementsare these agreementsarerecordedatfairvalue.Thediscountedpresentvalueofanyincomebeneficiary with livingincomebeneficiarieswhereUCLAhasaresidualinterest.Theinvestmentsassociated other purposes. position isallocatedforacademicandresearchinitiatives or programs,forcapitalprograms for specificpurposesbymanagementorTheRegents.Substantially allofUCLA’s unrestrictednet of relateddebt,isclassifiedasunrestrictednetposition.Unrestricted netpositionmaybedesignated Unrestricted. The net position that is neither reserved, restricted nor invested in capital assets, net the providerrequiresresourcestoremainintact. restricted netpositionuntilthespecificresourcesareusedforrequiredpurposeoraslong Restricted. UCLAclassifiesthenetpositionresultingfromtransactionswithpurposerestrictionsas construction orimprovementofthoseassets. net ofaccumulateddepreciation,reducedbyoutstandingdebtattributabletotheacquisition, Invested incapitalassets,netofrelateddebt. passage oftimeareclassifiedasexpendablenetposition. that canbefulfilledbyactionsofUCLApursuanttothoserestrictionsorexpirethe Expendable. ThenetpositionwhoseusebyUCLAissubjecttoexternallyimposedrestrictions UCLA’s permanentendowedfunds. retained inperpetuitybyUCLA,isclassifiedasnonexpendablenetposition.Thisincludes Nonexpendable. Thenetpositionsubjecttoexternallyimposedrestrictions,whichmustbe Upon anobligatingevent,UCLAestimatesthecomponentsofany Obligationsunderlifeincomeagreementsrepresenttrusts ThiscategoryincludesallofUCLA’s capitalassets, 34
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT cancer researcharereportedas grantoperatingrevenue. when therelatedexpenditures areincurred.SpecialstateappropriationsforAIDS,tobacco andbreast State appropriationsforcapital projectsarerecordedasrevenueunderotherchangesin net position purchase agreementswiththeState PublicWorks Boardandarealsoreportedasnonoperating revenue. State financing appropriations providefor principalandinterestpaymentsassociatedwithlease- expenses areincurredtosupporteithereducationaloperations orotherspecificoperatingpurposes. basis. Stateeducationalappropriationsarerecognizedasnonoperating revenue;however, therelated State appropriations.TheofCaliforniaprovidesappropriationstotheUniversity onanannual for theyearsendedJune30,2012and2011asfollows: Scholarship allowancesarenettedinthestatementofrevenues,expensesandchangesnetposition are classifiedasscholarshipandfellowshipexpenses. student andthirdpartiesonbehalfofthestudent.Paymentsfinancialaidmadedirectlytostudents fees, housinganddiningcharges,recreationalcenterothertheamountthatispaidby UCLA recognizesscholarshipallowancesasthedifferencebetweenstatedchargefortuitionand service associatedwithstudentunionandrecreationalcenters. of UCLA.Asmallportionthestudentfees,reportedascapitalgiftsandgrants,isrequiredfordebt Student tuitionandfees.Substantiallyallofthestudentfeesprovideforcurrentoperations as otherchangesinnetposition. State capitalappropriations,giftsandgrants,forendowmentpurposesareclassified value ofinvestments,interestexpenseandgainorlossonthedisposalcapitalassets. other than capitalpurposes, investment income, net unrealized appreciation ordepreciationinthefair appropriations, “Build America Bonds” federal interest subsidies, federal Pell Grants, private giftsfor Nonoperating revenuesandexpensesincludestateeducationalappropriations,financing UCLA. foundation grants to UCLA are recorded by UCLA as gifts when the foundations transfer the gifts to recognized as operating expenses by thefoundations. Private gift or capital revenues associated with contributions are fundamental to the core mission of the foundations. Foundation grants to UCLA are recognized as operating revenues onthe foundations’ statements since, in contrast to UCLA, such The foundationsareestablishedtofinanciallysupportUCLA.Privategiftsthe activities ofUCLA. and investmentincome,sincetheGASBdoesnotconsiderthemtoberelatedprincipaloperating including stateeducationalappropriations,certainfederalgrantsforstudentfinancialaid,privategifts instructional missionofUCLAaremandatedbytheGASBtoberecordedasnonoperatingrevenues, Certain significant revenues relied upon and budgeted for fundamental operational support of the core revenues, expensesandchangesinnetpositionasoperatingactivities. programs andservicesoftheUCLAcampusmedicalcentersarepresentedinstatement educational activitiesandauxiliaryenterprises.Operatingexpensesincurredinconductingthe enterprises ofauxiliary Sales andservices Student tuitionandfees Scholarship Allowance (dollars inthousands) Total
$ $
279,324 238,627 40,697 2012
$ $
231,294 193,334 37,960 2011 35
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Grant andcontractrevenue. gains, tobeexpendedfortheoperational requirementsofUCLAprograms. Institutional FundsActallows forinvestmentincome,aswellaportionofrealizedand unrealized Endowment spending.UnderprovisionsofCalifornia law, the UniformPrudentManagementof classification andhoursworked. at ratesbaseduponlengthofserviceandjobclassification andcompensatorytimebaseduponjob Compensated absences.UCLAaccruesannualleave,includingemployer-related costs,foremployees statement ofnetposition. by theUniversity, aremadetoUCRHBTandreducetheobligationforretiree healthbenefitsinthe plan, asactuariallydetermine.UCLAcontributionstoward retiree healthbenefits,atratesdetermined center retireehealthbenefitexpenseisbasedupontheannual requiredcontributiontotheretireehealth Retiree health benefits and obligations for retiree health benefits. UCLA’s cost for campus and medical UCLA’s obligationtoUCRPinthestatementofnetposition. Contributions toUCRParemadebaseduponratesoramountsdeterminedbyTheRegents,andreduce expense isbasedupontheannualrequiredcontributiontoUCRP, asactuariallydetermined. UCRP benefitsandobligationtoUCRP. UCLA’s costforcampusandmedicalcenterUCRPbenefits University’s AnnualFinancialReport. expenses andchangesinnetposition.ThefinancialrecordsoftheUCRHBTarereportedwithin a result,thecampus’requiredcontributionsarerecognizedasanexpenseinstatementofrevenues, the University. ThecampusisrequiredtocontributeatarateassessedeachyearbytheUCRHBT. As the campus to the UCRHBT are made to a cost-sharing single-employer health plan administered by The UCRHBTprovidesretireehealthbenefitstoretiredemployeesofthecampus.Contributionsfrom UCRHBT andhastheauthoritytoamendorterminateTrust. exempt basisunderanarrangementsegregatedfromUniversityassets.TheRegentsservesasTrustee of the risks,rewardsandcostsofprovidingforretireehealthbenefitstoaccumulatefundsonatax- Benefit Trust (UCRHBT) toallow certain University locationsand affiliates, includingUCLA,to share Retiree healthbenefitsexpense.TheUniversityestablishedtheofCaliforniaHealth information becomesavailable. that estimated amounts accrued could change significantly based upon settlement, or as additional rendered andadjustedinfutureperiodsasfinalsettlementsaredetermined.Itisreasonablypossible Retroactive adjustmentsareaccruedonanestimatedbasisintheperiodrelatedservices Laws andregulationsgoverningMedicareMedi-Calarecomplexsubjecttointerpretation. as wellestimatedretroactiveadjustmentsunderreimbursementagreementswiththird-partypayers. from patientsandthird-partypayers,includingMedicare,Medi-Calothers,forservicesrendered, Medical centerrevenue.revenueisreportedattheestimatednetrealizableamounts million, $153millionfromfederallysponsoredprogramsand$39othersponsors. sponsors. FortheyearendedJune30,2011,facilitiesandadministrativecostrecoverytotaled$192 totaled $191million,$149millionfromfederallysponsoredprogramsand$42other and HumanServices.FortheyearendedJune30,2012,facilitiesadministrativecostrecovery reimbursement ratesnegotiatedwithUCLA’s federalcognizantagency, theU.S.DepartmentofHealth completed. Recoveryoffacilitiesandadministrativecostsfederallysponsoredprogramsisatcost expenditures are incurred or, in the case of fixed-price contracts, when the contract terms are met or sources. UCLArecognizesrevenueassociatedwiththedirectcostsofsponsoredprogramsasrelated UCLAreceivesgrantandcontractrevenuefromgovernmentalprivate 36
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Use ofestimates. 501(c)(3). UCLA Foundation,theJonssonCancerCenterFoundationandASUCLAareexemptunderSection is exemptfromstateincometaxesimposedundertheCaliforniaRevenueandTaxation Code.The by theUniversityisalsoexemptfromfederaltaxunderIRCSection115(a).Inaddition, the InternalRevenueCode(IRC).BecauseUniversityisastateinstitution,relatedincomereceived Tax exemption.TheUniversityisrecognizedasatax-exemptorganizationunderSection501(c)(3)of the netpensionliabilitybeincluded inpensionexpensetheperiodofchange.As of June30, municipal bondratewhenplan assetsarenotavailable.Thisstatementrequiresthatmost changesin investments, totheextentthat planassetsareavailabletopaybenefits,andatax-exempt, high-quality payments arerequiredtobediscounted usingasingleratethatreflectstheexpected ofreturnon the benefittermsandlegalagreementsexistingatpension plan’s fiscalyearend.Projectedbenefit The totalpensionliabilityisdeterminedbasedupondiscounting projectedbenefitpaymentsbasedon is measuredasthetotalpensionliability, lesstheamountofpension plan’s fiduciarynetposition. employees. ThisStatementrequiresrecognitionofaliability equaltothenetpensionliability, which for measuringandreportingpensionliabilities plansprovidedbytheUniversitytoits effective forUCLA’s fiscalyearbeginning July 1,2014.ThisStatementrevisesexistingstandards In June2012,theGASBissuedStatementNo.68,AccountingandFinancialReportingforPensions, its financialstatements. FASB andAICPA Pronouncements.UCLAisevaluatingtheeffectthatStatementNo.66willhave on Codification ofAccountingandFinancialReportingGuidanceContainedinPre-November30,1989 Statements No.54, This Statement resolves conflicting guidance that resulted from the issuance of two pronouncements, of GASBStatementsNo.10and62, In March2012,theGASBissuedStatementNo.66, have onitsfinancialstatements. previously reportedasassetsandliabilities.UCLAisevaluatingtheeffectthatStatementNo.65will liabilities, and recognizes, as outflows of resources or inflows of resources, certain items that were of resourcesordeferredinflowsresources,certainitemsthatwerepreviouslyreportedasassetsand effective forUCLA’s fiscalyearbeginningJuly1,2013.ThisStatementreclassifies,asdeferredoutflows In March2012,theGASBissuedStatementNo.65, 60 willhaveonitsfinancialstatements. the facility to UCLA at the end of the arrangement. UCLA is evaluating the effectthat Statement No. operating afacility, obtainingtherighttocollectfeesfromthirdparties,andtransferringownershipof arrangements arerecordedwhenthemeetcertaincriteria,whichincludebuildingand private partnershipsasserviceconcessionarrangementsinthefinancialstatements.Service beginning July1,2012.ThisStatementrequiresUCLAtoreporttheactivitiesforcertainpublic- and FinancialReportingforServiceConcessionArrangements, New accountingpronouncements. and actualamountscoulddifferfromthoseestimates. are reasonable,theybaseduponinformationavailableatthetimeestimateorjudgmentismade expenditures duringthereportingperiod.Althoughmanagementbelievesestimatesandassumptions assets andliabilitiesatthedateoffinancialstatementsreportedamountsrevenues assumptions thataffectthereportedamountsofassetsandliabilitiesdisclosurecontingent generally acceptedintheUnitedStatesofAmericarequiresmanagementtomakeestimatesand Thepreparationoffinancialstatementsinconformitywithaccountingprinciples Fund BalanceReportingandGovernmentalType Definitions,andNo.62, InNovember2010,theGASBissuedStatementNo.60, effectiveforUCLA’s fiscalyearbeginningJuly1,2013. Items PreviouslyReportedasAssetsandLiabilities, Technical Corrections–2012AnAmendment effectiveforUCLA’s fiscalyear Accounting 37
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT to benefitfromdiversification andeconomiesofscale.GEPisabalancedportfolio theprimary GEP isaninvestmentpoolin whichalargenumberofindividualendowmentsparticipate inorder income securities. Investments authorizedbyTheRegentsforTRIPincludea diversifiedportfolioofequityandfixed- range ofassetclasses.TRIPismanagedtoatotalreturnobjective andisintendedtosupplementSTIP. capital bytakingadvantageoftheeconomiesscale investing inalargepoolacrossbroad TRIP allowsparticipant campuses theopportunitytomaximize the returnonlong-termworking Program withtermsupto40years. primarily tofacultymembersresidinginCalifornia,under theUniversity’s MortgageOrigination maturity offiveandone-halfyears.Inaddition,forSTIP, The Regentshasalsoauthorizedloans, Investments authorizedbyTheRegentsforSTIPinclude fixed-income securitieswithamaximum in STIP. endowment investmentpoolsawaitinginvestment,orcashforadministrativeexpenses,isalsoinvested other operatingexpensesforcampusesandmedicalcentersisinvestedinSTIP. Theavailablecashin to maximizecurrentearnedincome.Cashprovideforpayroll,constructionexpendituresand of theeconomiesscaleinvestinginalargepoolwithbroadrangematuritiesandismanaged STIP allowsparticipantstomaximizethereturnsontheirshort-termcashbalancesbytakingadvantage foundations bytheInvestmentCommitteeofTheRegents. be managed by the Chief Investment Officer. Asset allocation guidelines are provided to the campus of Trustees foreachcampusfoundationmaydeterminethatalloraportionoftheirinvestmentswill Officer, orareseparatelyinvested.PursuanttoTheRegents’policiesoncampusfoundations,theBoard (TRIP), GeneralEndowmentPool(GEP),andotherinvestmentpoolsmanagedbytheChiefInvestment investments areassociatedwiththeShortTerm InvestmentPool(STIP),Total ReturnInvestmentPool and establishesinvestmentpolicy, whichiscarriedoutbytheChiefInvestmentOfficer. These The Regents,asthegoverningBoard,areresponsibleforoversightofUniversity’s investments Investments is theprimarydifferences. recognized bankinginstitutions,was$18.8millionand$37.5million,respectively, Depositsintransit 30, 2012and2011,thecarryingamountofUCLA’s demanddeposits,generallyheldinfivenationally exception forthisinstitutionandcontinuestomonitortheinstitution’s financialcondition.AtJune of theUniversity’s bankswereloweredbelowthesethresholds.TheUniversityapprovedatemporary group ratingof65orhigherasdefinedbySheshunoffBankRatingReports.In2012,ratingsforone on longtermdebtofA3orhigherbyMoody’s, A-orhigherbyStanford&Poor’s oranAssetPeer Under Universitypolicy, depositsareonlyheldatfinancialinstitutionsthatmaintainanissuerrating accounts onadailybasis. Cash indemanddepositaccountsisminimizedbysweepingavailablecashbalancesintoinvestment The Universitymaintainscentralizedmanagementforsubstantiallyallofitscashandequivalents. 1. CASHANDEQUIVALENTS financial statements. UCRP isexpectedtoincrease.UCLAevaluatingtheeffectthatStatementNo.68willhaveonits to UCRPbasedupontheUniversity’s fundingpolicy. UnderStatementNo.68,UCLA’s obligationto 2012, UCLAreportedanobligationtoUCRPof$508million,representingunfundedcontributions 38
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT not includedinthecampus’statement ofcashflows. in conjunction with the management of the trust assets and payments from the trust to third parties are cash flowsasitisrelatedtolong-term debtrequirements.Investmenttransactionsinitiated bytrustees UCLA’s deposits tothetrustareclassifiedasacapitalandrelatedfinancing activityinthestatementof unspent proceedsplusaccumulatedinvestmentincome. investments were$14,000atJune30,2012and$12,000 30,2011.Thisbalancerepresentsthe accordance withvariousindentureandotherlong-termdebt requirements.Thefairvaluesofthese Noncurrent investmentsheldbytrusteesareforthefuture paymentofprincipalandinterestin requirements. agency obligations, commercial paper or othercorporate obligations meetingcertaincredit rating The trustagreementsforlong-term debt permittrusteestoinvestinU.S.andstategovernmentor fiduciary forthebondholderorasagentUniversity. investments heldbytrusteesareinsured,registeredor thecampus’trusteeorcustodialbank,as UCLA hasenteredintoagreementswithtrusteestomaintaintrustsforlong-termdebtrequirements.All 2. INVESTMENTSHELDBYTRUSTEES More detailabouttheUniversityofCalifornia’s investmentscanbefoundintheauditedAnnualReport. is limited. funds onthematuritydateofApril25,2013.Priortodate,abilitywithdraw additional sixmonthperiodsbyagreementwiththestate.TheUniversityispermittedtowithdraw annually, payable quarterly. The agreement expires on October 25, 2012 and can be extended for under CaliforniaGovernmentCodesection16330.ThedeposittoSAIFbearsinterestat2.0percent The Universityhasdepositsof$1billionintheStateAgencyInvestmentFund(SAIF).SAIFwascreated physical securities.Theyarenotusedforspeculativepurposes. for portfolio rebalancing in accordance with The Regents’ asset allocation policy and as substitutes for Derivative instruments,includingfutures,forwardcontracts,optionsandswapareauthorized an investmentposition,arealsoauthorizedfortheGEP. return strategies,whichmayincorporateshortsales,plusderivativepositionstoimplementorhedge in theongoingmanagementofportfolios.RealestateinvestmentsareauthorizedforGEP. Absolute Fixed-income investment guidelines permit the use of futures and options on fixed-income instruments along withcertainsecuritizedinvestments,includingmortgage-backedandasset-backedsecurities. fixed-income portionoftheinvestmentportfoliosmayincludebothdomesticandforeignsecurities, The University’s investmentportfoliosmayincludeforeigncurrencydenominatedequitysecurities.The be includedinactivelyorpassivelymanagedstrategies,alongwithamodestexposuretoprivateequities. the investmentportfoliosincludebothdomesticandforeigncommonpreferredstockswhichmay include equitysecurities,fixed-incomesecuritiesandcertainotherassetclasses.Theportionof Investments authorized byTheRegents for GEP, otherinvestmentpoolsandseparateinvestments University’s estimatedinterestinexternallyheldirrevocabletrusts. are thosethatcannotbepooledduetoinvestmentrestrictionsorincomerequirements,representthe Other investmentpoolsprimarilyfacilitateannuityandlifeincomearrangements.Separateinvestments agreements. investments, assetsassociatedwithendowmentsareinvestedinaccordancethetermsof investment vehicleforendowedgiftfunds.Wheredonoragreementsplaceconstraintsonallowable 39
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Allowance foruncollectibleamounts Accounts receivable At June30,2011 Allowance foruncollectibleamounts Accounts receivable At June30,2012 (dollars inthousands) Accounts receivable,net Accounts receivable,net The compositionofpledgesreceivableatJune30,2012and2011issummarizedasfollows: 4. PLEDGESRECEIVABLE fees, investmentsales,tuitionandauxiliaryenterprises. Other accountsreceivableareprimarilyrelatedtoprivategrantsandcontracts,physicians’professional follows: Accounts receivableandtheallowancesforuncollectibleamountsatJune30,20122011areas 3. ACCOUNTSRECEIVABLE ofpledgesreceivable Less: Currentportion otal pledgesreceivable,net Less: Total pledgesreceivable,outstanding (dollars inthousands) Noncurrent por T
Allowance foruncollectiblepledges Unamor tized discounttopresentvalue tion ofpledgesreceivable
ATE &FEDERAL ST GOVERNMENT $ $ $ $
125,734 126,102 98,130 98,436 (368) (306)
$ $
$ $ $ $
279,328 358,502 278,552 362,683 13,750 14,930 MEDICAL CENTERS (79,174) (84,131) (6,059) 7,691 2012 (684) (496)
$ $
18,163 19,530 $ $ $ $
(8,964) 9,199
2011 (676) (691) 188,456 199,990 230,039 243,237 (11,534) (13,198) OTHER
$ $ $ $
593,518 684,594 606,721 704,356 (91,076) (97,635) TOT AL 40
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Libraries andcollections Intangible assets Equipment Buildings andimprovements Infrastructure AND AMORTIZATION ACCUMULATED DEPRECIATION Construction inprogress Special collections Libraries andcollections Intangible assets Equipment Buildings andimprovements Infrastructure Land ORIGINAL COST (dollars inthousands) Capital assets,net Accumulated depreciation Capital assets, Allowance foruncollectibleamounts receivable Notes andmortgages At June30,2011 Allowance foruncollectibleamounts receivable Notes andmortgages At June30,2012 (dollars inthousands) and amortization at originalcost Notes andmor Notes andmor The campus’capitalassetactivityfortheyearsendedJune30,2012and2011isasfollows: 6. CAPITAL ASSETS,NET amounts, areasfollows: Notes andmortgagesreceivableatJune30,20122011,alongwithallowancesforuncollectible 5. NOTESANDMORTGAGES RECEIVABLE tgages receivable,net tgages receivable,net
$ $ $ $ $
7,361,932 5,111,439 4,645,626 2,716,306 1,756,669 397,651 540,660 471,234 583,952 995,712 14,919 78,626 23,303 89,687 6,407 7,979 2010 2010
AMOR DEPRECIA $ $ $ $ ADDITIONS
TIZATION 520,791 270,560 283,102 112,117 172,483 26,325 28,789 66,984 20,430 73,033 2,000 4,470 2,218 TION (744) AND 144
$ $ $ $
CURRENT 6,686 7,136 6,809 7,312 (450) (503) $ $ $ $ DISPOSALS DISPOSALS
(42,123) (35,293) (64,620) (53,887) (3,511) (3,319) (6,029) (3,509) (1,149)
(46) - - - - -
$ $ $ $ $ NONCURRENT
4,873,360 2,944,743 1,925,833 7,818,103 1,008,809 5,220,047 $ $ $ $
414,570 578,400 754,336 604,248 19,389 80,798 52,092 90,538 59,047 60,772 60,627 62,415 7,235 6,551 (1,725) (1,788) NOTES 2011 2011
AMORTIZATION DEPRECIA $ $ $ $ ADDITIONS
(209,941) 293,765 172,221 680,635 136,707 675,025 12,790 12,928 31,224 21,606 87,027 27,716 NONCURRENT 6,826 MOR TION AND $ $ $ $ 150 121
TGAGES
13,583 13,703 11,976 12,096
(120) (120) $ $ $ $ DISPOSALS
DISPOSALS
(101,429) (71,542) (13,010) (11,568) (36,001) (10,368) (13,707) (14,829) (42,982) (29,911) (595) - - - -
$ $ $ $
79,316 81,611 79,412 81,823 (2,295) (2,411) $ $ $ $ $ TOT
5,230,343 3,166,966 2,087,686 8,397,309 1,102,534 5,865,161 AL 423,166 629,426 544,395 618,257 121,762 20,611 87,624 50,191 7,385 6,077 2012 2012 41
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT *bond couponratesareshown ofoutstandingdebt Noncurrent portion Less: otal outstandingdebt Capital leaseobligations Capital leaseobligations-staterevenuebonds andotherborrowings Mortgages MedicalCenterRevenueBonds University ofCalifornia LimitProjectRevenueBonds University ofCalifornia GeneralRevenueBonds University ofCalifornia LONG-TERM FINANCING: Commercial paper INTERIM FINANCING: (dollars inthousands) T Series 2004and2007,net
Current por Commercial paper net position. million in2011isreportedasinterestexpensethestatementofrevenues,expensesandchanges years ended June 30, 2012 and 2011, respectively. The remaining $120.3 million in 2012 and $128.8 expense, netofinvestmentincome,totaling$18.1millionand$8.3wascapitalizedduringthe the yearsendedJune30,2012and2011was$138.4million$137.1million,respectively. Interest earned on tax-exempt bond proceeds during construction, is capitalized. Total interest expenseduring Interest expense associated with financing projects during construction, net of anyinvestment income UCLA’s outstandingdebtatJune30,2012and2011isasfollows: bonds, capitalleaseobligationsandotherborrowings. Commercial paperandbankloansprovideforinterimfinancing.Long-termfinancingincludesrevenue or forsuchotherpurposesasareauthorizedbyTheRegentsthroughtheissuanceofdebtobligations. The Universitydirectlyfinancestheconstruction,renovationandacquisitionoffacilitiesequipment, 7. DEBT tion ofoutstandingdebt 3.0–6.6%
INTEREST RA * 0.0–10.0% 1.8–7.0% 3.2–5.3% 2.0–6.3% 0.3–7.5% 0.1–0.4% TES
MA TURITY YEARS 2013–2049 2013–2042 2013–2042 2013–2047 2013–2050 2013–2112 2012
$ $ $
1,509,998 3,153,453 3,317,974 (164,520) 624,621 382,057 519,410 164,520 (80,293) 75,832 41,542 2012
$ $ $
1,188,214 2,731,031 2,882,782 (118,457) 656,767 400,740 525,494 (33,294) 33,294 21,861 56,412 2011 42
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Less: Currentportion debtandcapitalleasesatJune30,2011 Long-term Principal paymentsandamortizations Refinance orprepayofprincipalonbankloan New obligations debtandcapitalleasesatJune30,2010 Long-term Year EndedJune30,2011 Less: Currentportion debtandcapitalleasesatJune30,2012 Long-term Principal paymentsandamortizations Refinance orprepayofprincipalonbankloan New obligations debtandcapitalleasesatJune30,2011 Long-term Year EndedJune30,2012 (dollars inthousands) Noncurrent por Noncurrent por General Revenuesarecertainoperating andnonoperatingrevenuesoftheUniversityconsisting ofgross General RevenueBondsarecollateralized solelybyGeneralRevenuesasdefinedinthe Indenture. the tax-exemptbondstobeincluded inthegrossincomeofbondholdersforfederaltax purposes. bond indenturesrequiretheUniversitytousefacilitiesin awaywhichwillnotcausetheintereston property, exceptpledgedrevenues,anddonotconstitutegeneralobligations ofTheRegents.Revenue provisions. Revenuebondsarenotcollateralizedbyanyencumbrance, mortgage,orotherpledgeof serial andtermmaturities,containsinkingfundrequirements andmayhaveoptionalredemption facilities oftheUniversity. Theygenerallyhaveannualprincipaland semiannual interestpayments, Revenue bondshavefinancedvariousauxiliary, administrative,academic, medicalcenterandresearch University ofCaliforniaRevenueBonds obligations oftheUniversity. or otherpledgeofpropertysecuringcommercialpaperand thepaperdowntoconstitutegeneral financed andconstituteslimitedobligationsoftheUniversity. Thereisnoencumbrance,mortgage is collateralized by apledgeof the revenuesderived from theownership oroperationoftheprojects The program’s liquidityissupportedbyavailableinvestmentsinSTIPandTRIP. Commercialpaper capital fortheUniversity. and otherworkingcapitalneeds,standbyorinterimfinancingforgiftfinancedprojects capital projects, interim financing of equipment, financing of working capital for the medical centers exempt andtaxablecomponents.CommercialPapermaybeissuesforinterim/permanentfinancing The Universityhasavailablea$2.0billioncommercialpaperprogram,issuedintwoseries,withtax- Commercial Paper 2011 isasfollows: Activity withrespecttoUCLA’s currentandnoncurrentdebtfortheyearsendedJune30,2012 Outstanding DebtActivity tion atJune30,2011 tion atJune30,2012
$ $ $ $
2,654,028 2,370,474 2,279,741 2,451,433 2,600,728 2,370,474 (138,269) REVENUE 402,591 (18,615) (53,300) (25,750) (93,287) (90,733) BONDS 75,925
OTHER BORROWINGS MOR TGAGES AND
$ $ $ $
(13,138) 58,117 39,576 41,542 56,412 54,613 56,412 (1,705) (1,966) (1,732) (1,799) - - -
CAPIT OBLIGA $ $ $ $
136,341 310,249 432,856 457,883 420,933 395,008 420,933 AL LEASE (25,657) (25,027) (25,925) (26,001) 62,951 TIONS - -
$ $ $ $
2,729,362 2,847,819 2,819,799 3,073,160 3,153,453 2,847,819 (165,631) (118,457) (121,020) 465,542 212,266 (18,615) (80,293) (38,888) TOT AL 43
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT stated interestrateof4.9percent,maturingin2112. refinance capitalprojectsorforsuchotherpurposesasauthorized byTheRegents.bondshavea In February2012,GeneralRevenueBondsforUCLAtotaling $400millionwereissuedtofinanceor expense overthetermofbonds. average interestrateof4.9percent.Thedeferredpremiumwill beamortizedasareductiontointerest The bondsmatureatvariousdatesthrough2028.tax-exempt bondshaveastatedweighted outstanding GeneralRevenueBondsand$15.2millionofMultiple PurposeProjectRevenueBonds. $6.5 million,wereusedtopayforprojectconstructionandissuance costsandrefund$40.6millionof finance andrefinancecertainfacilitiesprojectsofUCLA.Proceeds,includingabondpremium In August2011,GeneralRevenueBondstotaling$52.8milliontax-exemptbondswereissuedto 2012 Activity All indenturespermittheUniversitytoissueadditionalbondsaslongcertainconditionsaremet. and MedicalCenterPooledRevenueBonds. rate swapagreementsmaybeatparitywithorsubordinatetospecificMedicalCenterRevenueBonds subordinate totheMedicalCenterRevenueBonds.Thepledgeofmedicalcenterrevenuesforinterest Revenue Bonds.ThepledgeofmedicalcenterrevenuesunderMedicalCenterPooledBondsis the Medical Center Pooled Revenue Bonds, interest rate swap agreements and specific Medical Center Medical CentergrossrevenuesarenotpledgedforanypurposeotherthanundertheIndentures as maintaincertainotherfinancialcovenants. times; set limitations on encumbrances, indebtedness, disposition of assets and transfer services; as well Center RevenueBondIndenturesrequirethemedicalcentertoachievedebtservicecoverageof1.1 collateralized byapledgeofthespecificgrossrevenuesassociatedwithmedicalcenter. TheMedical Medical CenterRevenueBondshavealsofinancedcertainfacilitiesofUCLA’s medicalcenterandare bonds andcertainotherfinancialcovenants. year sufficientforthemedicalcentergrossrevenuestopayannualprincipalandintereston Center PooledRevenueBondIndenturerequiresthemedicalcenterstosetrates,chargesandfeeseach medical centers.MedicalcentergrossrevenuesareexcludedfromGeneralRevenues.The and are collateralized by ajoint and several pledge of the gross revenues of allfive oftheUniversity’s Medical CenterPooledRevenueBondsareissuedtofinancetheUniversity’s medicalcenterfacilities certain otherfinancialcovenants. University toachievethesumofgrossprojectrevenuesequal1.1timesdebtserviceandmaintain pledge consistingofthesumgrossrevenuesspecificprojects.TheIndenturerequires Limited ProjectRevenueBondsareissuedtofinanceauxiliaryenterprisesandcollateralizedbya certain otherfinancialcovenants. each year sufficient forGeneral Revenues to pay forthe annual principaland intereston thebonds and income. TheGeneralRevenueBondIndenturerequirestheUniversitytosetrates,chargesandfees from educational,auxiliaryandother activities; andother revenues, including unrestrictedinvestment student tuitionandfees;facilitiesadministrativecostrecoveryfromcontractsgrants;revenues 44
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT mature in2031. Bonds issuedtofinancetheUCLAreplacementhospitalsinSantaMonicaand Westwood; thebonds 2011, respectively. Themajorityofthatamount,$114.3million,isattributedtoStateLeaseRevenue Capital leasesenteredintowithotherlessorstotaled$190.2millionand$143.8in2012 conclusion oftheleaseterm,ownershiptransferstoUCLA. state willprovidefinancingappropriationstoUCLAsatisfytheannualleaserequirements.At are sufficienttosatisfythestate’s leaserevenuebondrequirementswiththeunderstandingthat Upon completion,thebuildingsandequipmentareleasedtoUCLAundertermsamountsthat as theprojectisconstructed. the state.Bondproceedsremainondepositwithstate,astrustee,untilUniversityisreimbursed buildings tobeusedbytheUniversity. Duringtheconstructionphase,Universityactsasanagentfor as capitalleases.Thestatesellsleaserevenuebondstofinanceconstructionofcertainstate-owned The Universityhasenteredintolease-purchaseagreementswiththestateofCaliforniathatarerecorded Capital Leases no outstandingborrowingsunderline-of-creditcommitmentsatJune30,2012and2011,respectively. to supplementcommercialpaperprovideinterimfinancingforbuildingsandequipment.Therewere As partoftheUniversity, UCLAmayuseuncollateralized bank linesofcreditwithcommercialbanks collateralized byrealproperty. of landorbuildingsandtheconstructionrenovationcertainfacilities.Themortgagesare Mortgages andotherborrowingsconsistofcontractualobligationsresultingfromtheacquisition Mortgages andOtherBorrowings 45
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Total outstanding long-term Derivative instrument- Deferred premiumand of Principal portion Less interestcomponent Total futuredebtservice 2053–2112 2048–2052 2043–2047 2038–2042 2033–2037 2028–2032 2023–2027 2018–2022 2017 2016 2015 2014 2013 Year EndingJune30 (dollars inthousands) debt pooled revenuebonds Medical Center net -MedicalCenter deferred financing, future payments of futurepayments payments andnethedgingderivativeinterestrateswapwillvary. derivative interestrateswapswillremainthesame.Astheseratesvary, variable-ratebondinterest assume that current interest rates on variable-rate bonds and the current reference rates of the hedging of thevariable-ratebondsorimpacthedgingderivativeinterestrateswaps,theseamounts and thereafterarepresentedbelow. AlthoughnotapredictionbyUCLAofthefutureinterestcost associated hedgingderivativeinstrumentsforeachofthefivefiscalyearssubsequenttoJune30,2012 Future debtservicepaymentsforUCLA’s fixed-andvariable-ratedebtnetreceiptsorpaymentson Future DebtServiceandHedgingDerivativeInterestRateSwaps of CaliforniaRetirementSystem. Information on the retirement plans can be obtained from the 2011-12 annualreportof the University Regents hastheauthoritytoestablish andamendthebenefitplans. benefit planforUCLAemployees whoweremembersofPERSelectedearlyretirement. The Retirement System(PERS)Voluntary EarlyRetirementIncentive Program(PERS-VERIP),adefined funded withemployeenon-electiveandelectivecontributions; andtheCaliforniaPublicEmployee’s plans withoptionstoparticipateininternallyandexternally managedinvestmentportfoliosgenerally University ofCaliforniaRetirementSavingsProgram(UCRSP) thatincludesfourdefinedcontribution Plan, asingleemployer, definedbenefit planfundedwithUniversityandemployeecontributions;the Most UCLAemployeesparticipateinUCRS.UCRSconsists of TheUniversityCaliforniaRetirement 8. THEUNIVERSITYOFCALIFORNIARETIREMENTSYSTEM (UCRS) $ $
2,654,029 2,673,528 3,699,930 6,373,458 1,565,920 REVENUE 114,343 288,295 434,768 639,691 737,061 820,854 873,529 179,967 179,808 178,156 178,390 182,676 (29,556) 10,057 BONDS
P ARTICIPATION CER $ $
TIFICATES OF ------
BORROWINGS MOR AND OTHER $ $
TGAGES 41,542 11,986 14,473 29,556 4,698 1,942 1,942 1,942 1,941 2,008 2,487 ------
$ $
104,232 181,023 382,050 382,050 566,277 184,227 84,937 38,075 38,101 37,567 37,906 37,963 6,473 CAPIT ST ATE AL LEASES ------
$ $
173,314 75,832 75,832 38,710 34,357 28,239 23,210 19,077 10,490 97,482 OTHER 3,429 3,373 4,692 7,737 - - - - -
$ $
1,078,327 3,153,453 3,143,396 7,127,522 3,984,126 1,565,920 P AYMENTS 473,478 680,521 850,237 948,296 223,413 223,224 222,357 225,974 233,137 114,343 288,295 10,057 TOT AL -
$ $
3,143,398 PRINCIP 294,949 416,099 481,816 472,049 479,885 400,000 166,095 90,572 86,124 80,162 79,981 79,526 16,140 AL
$ $
3,984,124 1,165,920 178,529 264,422 368,421 476,247 598,442 132,841 137,100 142,195 145,993 153,611 122,200 INTEREST 98,203 46
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT 2011 isasfollows: UCLA’s annualUCRPbenefitexpenseandrelatedinformationfortheyearsendedJune30,2012 unfunded actuarialliabilitiesorsurplusoveraperiodofupto30years. funding that,ifpaidonanongoingbasis,isprojectedtocoverthenormalcosteachyearandamortize determined annualrequiredcontributions.Thecontributionrepresentsthelevelof The University’s annualUCRPbenefitexpenseisindependentlycalculatedbasedupontheactuarially UCRP BenefitsandObligationto or alumpsumequaltothepresentvalueoftheiraccruedbenefits. interest; vestedterminatedmemberswhoareeligibletoretiremayalsoelectmonthlyretirementincome percent annually. Upontermination,membersmayelectarefundoftheircontributionsplusaccumulated Employee contributions to UCRP are accounted for separately and currently accrue interest at 6.0 for 2012and2011,respectively. subject tocollectivebargainingagreements.UCLAcontributionswere$136millionand$71 losses, andchangesintheactuarialassumptions.Employeecontributionsbyrepresentedemployeesare valuation. Theyincludeallchangesaffectingfuturecosts,adoptedbenefitchanges,actuarialgainsand actuarial assumptionsandthePlanprovisionsadoptedattimeofpreparation The totalfundingpolicycontributionratesasofJuly1,2011arebasedonallthePlandata, amount. bases werecombinedtoasingleamortizationbaseandamortizedover30-yearperiodasleveldollar actuarial costmethod.Indeterminingthefundingpolicycontribution,allJuly1,2010amortization The Regents’contributionfundingpolicyisbasedonapercentageofpayrollusingtheentryagenormal Contribution Policy Revenue Code. compensation overaconsecutive36-monthperiod,subjecttocertainlimitsimposedundertheInternal living adjustments.Themaximummonthlybenefitis100percentoftheemployee’s highestaverage the pensionbenefitisdeterminedbysalaryrate,ageandyearsofservicecreditwithcertaincost-of- period. Generally, fiveyearsofservice arerequiredforentitlementtoplanbenefits.Theamountof more. Anemployeemayalsobecomeeligiblebycompleting1,000hoursofservicewithina12-month appointed toworkatleast50percenttimeforanindefiniteperiodoradefiniteofyear survivor benefitstoeligibleemployees.Membershipintheretirementplanisrequiredforallemployees UCRP provideslifetimeretirementincome,disabilityprotection,deathbenefitsandpre-retirement University ofCaliforniaRetirementPlan(UCRP) Beginning ofyear Obligation toUCRP University contributionstoUCRP Adjustment toannualrequiredcontribution Interest onobligationtoUCRP Annual requiredcontribution Actuarial valuationdate (dollars inthousands) End ofyear Increase (decrease)inobligationtoUCRP Annual UCRPcost
July 1,2011 $ $
(351,475) 424,719 439,447 508,208 434,963 (36,338) 83,489 31,854 2012
UCLA July 1,2010 $ $
(328,175) 364,469 385,240 418,913 382,618 (29,957) 54,443 27,335 2011 47
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Significant actuarialmethodsandassumptionsusedinthevaluation were: with thelong-termperspectiveofcalculations. reduce short-termvolatilityinactuarialaccruedliabilitiesand theactuarialvalueofassets,consistent to thatpoint.Theactuarialmethodsandassumptionsused includedtechniquesthataredesignedto and thehistoricalcostpatternofsharingbenefitcosts between theUniversityandplanmembers University andplanmembers,includethetypesofbenefits providedatthetimeofeachvaluation Projections ofbenefitsforfinancialreportingpurposesare basedupontheplanasunderstoodby Actuarial MethodsandAssumptions The fundedstatusofUCRPforthecampusesandmedicalcentersasJuly1,2011wasfollows: All UCRPassetsareavailabletopayanymember’s benefit. future. revisions asactualresultsarecomparedwithpastexpectationsandnewestimatesmadeaboutthe bargaining discussionsonthecontributionrate.Actuariallydeterminedamountsaresubjecttoperiodic projection ofbenefitsdoesnotexplicitlyincorporatethepotentialeffectsresultscollective amounts andassumptionsabouttheprobabilityofoccurrenceeventsfarintofuture.The Actuarial valuationsrepresentalong-termperspectiveandinvolveestimatesofthevaluereported Funded Status as follows: and thenetobligationtoUCRPforUCLAyearsendedJune30,20122011are The annualUCRPbenefitcost,thepercentageofcostcontributedto · · · Projected inflationat3.5percent; Projected salaryincreasesranging from4.3to6.8percentperyear; Assumed returnoninvestment of7.5percentperyear; Unfunded actuarialaccruedliabilityasapercentageofcoveredpayroll Covered payroll Funded ratio Actuarial accruedliability Actuarial valueofplanassets (dollars inthousands) Unfunded actuarialaccruedliability Net obligation(benefit)toUCRP: Percent ofannualcostcontribution: Annual UCRPbenefitcost: (dollars inthousands) June 30,2011 June 30,2012 June 30,2011 June 30,2012 June 30,2011 June 30,2012
$ $
418,913 508,208 359,427 410,632 85.8% 80.8% UCLA MEDICAL CENTERS
$ $ $ CAMPUSES AND
(43,011,985) 35,315,069 (7,696,916) 7,899,551 (97.4)% 82.1%
48
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT also investaccountbalancesin certainmutualfunds. and nonelectivecontributions to investmentfundsmanagedbytheChiefInvestmentOfficer. Theymay Participants intheDCPlan, SDCPlan,the403(b)Planand457(b)maydirecttheir elective There werenoemployercontributionstothe457(b)Planfor theyearsendedJune30,2012and2011. contributions. UCLAmayalsomakecontributionsonbehalf ofcertainmembersmanagement. The University’s 457(b)Deferredcompensation Plan(457(b)Plan)acceptspretaxemployee 457(b) DeferredCompensationPlan University mayalsomakecontributionsonbehalfofcertain membersofmanagement. The University’s Tax-Deferred 403(b)Plan(403(b) Plan) acceptspretaxemployeecontributions.The Tax Deferred403(b)Plan June 30,2012or2011. employee contributions.TherewerenoemployercontributionstotheSDCPlanforyearsended of certaindesignatedemployees.Employercontributionsarefullyvestedandthereisnoprovisionfor The SupplementalDefined ContributionPlan (SDCPlan) accepts employercontributions onbehalf University mayalsomakecontributionsonbehalfofcertainmembersmanagement. for certain summer session teaching or research compensation for eligible academic employees. The The University has aprovisionfor matching employerand employee contributionstotheDCPlan represented employees. In April2010,pretaxemployeecontributionswerediscontinued,subjecttocollectivebargainingfor base. ForSafeHarborparticipants,monthlyemployeecontributionsare7.5percentofcoveredwages. percent ofcoveredwagesdependinguponwhetherarebeloworabovetheSocialSecuritywage For UCRPmembers,monthlyemployeecontributions range fromapproximately2.0percentto4.0 participants (part-time,seasonalandtemporaryemployees)whoarenotcoveredbySocialSecurity. contributions are mandatory for all employees who are members of UCRP, as well as Safe Harbor The DCPlanacceptsbothafter-tax andpretaxemployeecontributionsthatarefullyvested.Pretax Defined ContributionPlans(DCPlan) plans alsoacceptqualifiedrollovercontributions. whichever islater, inaccordancewithInternalRevenueCodeminimumdistributionrequirements.The elect todeferdistributionoftheaccountuntilage70½orseparationfromserviceafter70½, vested andaredistributableatretirement,terminationofemploymentordeath.Participantsmayalso available toallUniversityemployees.Participants’interestsintheplansarefullyandimmediately UCRSP includesfourdefinedcontributionplansprovidingretirementsavingsincentivesthataregenerally University ofCaliforniaRetirementSavingsProgram(UCRSP) total UCRPwas24years. accrued liabilityovertheactuarialvalueofassetsatJuly1,2011forcampusesandmedicalcenters fair value of investments over a five-year period. The amortization period for the excess of actuarial The actuarialvalueofassetswasdeterminedbysmoothingtheeffectshort-termvolatilityin and futureexpectationsforcampusesmedicalcenters. · · · Assumed retirementages,employeeturnoveranddisabilityratesbasedonactualplanexperience Future lifeexpectancybaseduponrecentgroupmortalityexperience;and Entry AgeNormalactuarialcostmethod; 49
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT contribution fromtheUniversity. implicit subsidyassociatedwith retireehealthcostspaidduringthepastyearisalsoconsidered tobea by theUniversityaresubsidizing thepremiumsforretirees.Thiseffectiscalledimplicit subsidy. The retirees. Sincethesamegrosspremiums applytobothgroups,thepremiumspaidforactive employees to havehigherhealthcarecoststhanactiveemployees.Thisis primarilyduetotheolderaverageageof active employees and retirees, based on a blend of their health costs.Retirees, on average, are expected The grosspremiumsformemberswhoarenotcurrentlyeligible forMedicarebenefitsarethesame In additiontotheexplicit University contribution provided to retirees,there is an“implicit subsidy.” the excess,ifany, ofthepremiumoverapplicableportionUniversity’s contribution. Active employeesdonotmakeanycontributions toward theretireehealthbenefitplans.Retireespay maximum Universitycontribution,increasingto100percent after20yearsofservice. provisions that generally require 10 years of service before becoming eligible for 50 percentof the five yearsofservice.RetireesemployedbytheUniversityafter1989aresubjecttograduatedeligibility before age55andhaveatleast10yearsofservice,oriftheyretirelater 1990 andnotrehiredafterthatdateareeligiblefortheUniversity’s maximumcontributioniftheyretire toward the cost ofother benefits available toretirees. Retirees employedby theUniversity priorto Contributions toward wellness benefits are made by the University. The University does not contribute Contributions towardmedicalanddentalbenefitsaresharedbetweentheUniversityretiree. the claimsincurredandactuariallydeterminedlevelofbutnotreportedliability. trend analysis of the historic cost, utilization, demographics and administrative expenses to provide for plans. Premiumratesfortheself-insuredplancontributionsaresetbyUniversitybasedupona determined byapplyingthehealthplancontractratesacrossnumberofparticipantsinrespective University andretireecontributionstowardpremiumsmadeunderpurchasedplanarrangementsare by the University. The contribution requirements are based upon projected pay-as-you-go financing. The contributionrequirementsoftheUniversity and eligibleretireesareestablishedmaybeamended Contribution Policy Membership inUCRPisrequiredtobecomeeligibleforretireehealthbenefits. University ofCaliforniaRetireeHealthBenefit Trust. and amendtheplans.Additionalinformationcanbeobtainedfrom2011-2012annualreportof (retirees) oftheUniversityCaliforniaanditsaffiliates.TheRegentshasauthoritytoestablish benefits, primarilymedical,dentalandvision,toeligibleretireestheirfamilymembers The Universityadministerssingle-employerhealthandwelfareplanstoprovide 9. RETIREEHEALTH BENEFITCOSTSANDOBLIGATIONS to thatobligationareallzerofortheyearsendingJune30,2012and2011. The annualrequirementcontribution,netobligationtoPERS-VERIPandanychangesoradjustments The Universitypreviouslymadecontributionstotheplansufficientmaintainpromisedbenefits. under thisvoluntaryearlyretirementprogram. PERS members.AsofJuly1,2012thereare659systemwideretireesorbeneficiariesreceivingbenefits retirement underprovisionsoftheplan.TheUniversitycontributedtoPERSonbehalftheseUC- supplemental retirementincomeandsurvivorbenefitstoUC-PERSmemberswhoelectedearly The University of California PERS-VERIP is a defined benefit pensionplan providing lifetime University ofCaliforniaPERS-VERIP 50
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT about thefuture. to periodicrevisionsasactualratesarecomparedwithpast expectationsandnewestimatesaremade collective bargainingdiscussionsonthecontributionrate.Actuarially determinedamountsaresubject trends. Theprojectionofbenefitsdoesnotexplicitlyincorporate thepotentialeffectsofresults include assumptions about future employment, mortality, investment return and health care cost amounts andassumptionsabouttheprobabilityofoccurrence ofeventsfarintothefuture.Examples Actuarial valuationsrepresentalong-termperspectiveand involve estimatesofthevaluereported Funded Status years endedJune30,2012and2011areasfollows: to theretireehealthbenefitplan,andnetobligationforbenefitsUCLA The annualretireehealthbenefitcost,thepercentageofcostcontributed and 2011isasfollows: UCLA’s annualretireehealthbenefitexpenseandrelatedinformationfortheyearsendedJune30,2012 unfunded actuarialliabilitiesoveraperiodofupto30years. funding that,ifpaidonanongoingbasis,isprojectedtocoverthenormalcosteachyearandamortize determined annualrequiredcontribution.Thecontributionrepresentsthelevelof The University’s retireehealthbenefitexpenseisindependentlycalculatedbasedupontheactuarially Retiree HealthBenefitExpenseandObligationfor Benefits Beginning ofyear Obligations forretireehealthbenefits University contributionsforretireehealthbenefits Adjustment toannualrequiredcontribution Interest onobligationtoretireehealthbenefits Annual requiredcontribution Actuarial valuationdate (dollars inthousands) End ofyear Increase inobligationsforretireehealthbenefits Annual retireehealthbenefitcost Net obligation(benefit)totheretireebenefitsplan: Percent ofannualcostcontribution: Annual retireehealthbenefitcost: (dollars inthousands) June 30,2011 June 30,2012 June 30,2011 June 30,2012 June 30,2011 June 30,2012
$ $ July 1,2011
1,171,161 1,435,324 (124,549) 403,678 264,163 343,542 (79,380) 64,414 2012 $ $
1,156,086 1,435,323 206,939 332,995 UCLA 17.9% 23.2% UCLA $ $ July 1,2010
1,156,086 830,148 435,994 325,939 396,960 (84,792) (71,021) 45,757 2011 51
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Significant actuarialmethodsandassumptionsusedinthevaluationwere: long-term perspectiveofthecalculations. short-term volatilityinactuarialaccruedliabilitiesandthevalueofassets,consistentwith that point.Theactuarialmethodsandassumptionsusedincludetechniquesaredesignedtoreduce and thehistoricalcostpatternofsharingbenefitcostsbetweenUniversityplanmembersto University andplanmembers,includethetypesofbenefitsprovidedattimeeachvaluation Projections ofbenefitsforfinancialreportingpurposesarebasedupontheplanasunderstoodby Actuarial MethodsandAssumptions of theUniversityCaliforniaandHealthWelfare Programs. Additional information on the retiree health plans can be obtained from the 2011-2012 annual reports The fundedstatusoftheplanforcampusesandmedicalcentersasJuly1,2011wasfollows: • Healthcarecosttrendraterangingfrom7.5to12.5percentfornon-Medicareand20.0 five-yearperiod; assetsexpectedtobeusedfinancebenefits,smoothingtheeffectofgainsandlossesovera • Assumed return on investment of 5.5 percent per year, representing the return on the University’s andfutureexpectations. • Assumed retirement ages, employee turnover and disability rates based on actual plan experience • Futurelifeexpectancybaseduponrecentgroupmortalityexperie nce; and • EntryAgeNormalactuarialcostmethod; yearsasaflatdollaramountonclosedbasis; • Amortizationoftheeffectschangesinplandesign,or changesinassumptions,over30 closedbasis; • Amortizationoffutureactuarialgainsandlossesover15yearsasflatdollaramounton amountonaclosedbasis; • Amortizationoftheinitialunfundedactuarialaccruedliabilityover30yearsasaflatdollar • Projectedinflationat3.0percent; ultimaterateof5.0percentovernineyears; percentforMedicareinitially, dependingonthetypeofplan,reducedbyincrementstoan Unfunded actuarialaccruedliabilityasapercentageofcoveredpayroll Covered payroll Funded ratio Value oftheimplicitsubsidyincludedinactuarialaccruedliability Actuarial accruedliability Actuarial valueofplanassets (dollars inthousands) Unfunded actuarialaccr ued liability
MEDICAL CENTERS
$ $ $ $ CAMPUSES AND
(14,726,665) (14,648,758) 7,899,551 2,259,855 (185.4)% 77,907 0.5%
52
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT Unrestricted Restricted (dollars inthousands) Gifts andother Annuity andlifeincome Help intrustbyothers Funds functionalasendowments Endowments Annuity andlifeincome Endowments Expendable Nonexpendable from theseFoundations. endowment investmentsand$84 millionfromcurrentfunds),respectively, weretransferredtoUCLA endowment investmentsand $89 millionfromcurrentfunds)and$135($51 from UCLA. During the years ended June 30, 2012 and 2011, gifts of $162 million ($73 million from and theJonssonCancerCenter Foundation(JCCF), their assets are dedicatedforthesolebenefit of missions ofthecampusandUniversity. Althoughindependentboards governtheUCLAFoundation foundations to provide valuable assistance in fundraising, public outreachand other supportfor the Under UniversitypoliciesapprovedbyTheRegents,eachindividual campusmayestablishseparate UCLA Foundations University was$32.3millionforbothyearsendedJune30,2012 and2011. approved byTheRegents.totaldistributiontransferred toUCLAfromendowmentsheldbythe the endofeachyeartosupportcurrentoperationsforfollowing yearisbaseduponaratethat The portionofinvestmentreturnsearnedonendowmentsheldbytheUniversityanddistributedat been made. the realizedandunrealizedappreciationwithendowmentafterannualincomedistributionhas income and bycapitalgainsmayvary significantly fromyear to year. TheUniversity’s policyis toretain on totalreturn,theproportionofannualincomedistributionprovidedbydividendandinterest investments aremanagedtoachievethemaximumlong-termtotalreturn.Asaresultofthisemphasis real terms(afterinflation)andtogenerateapredictablestreamofspendableincome.Endowment endowment incomedistributionpoliciesaredesignedtopreservethevalueofin The endowmentsheldbytheUniversityareadministeredonasystemwidebasis.University’s University Endowments follows: The bookvalueandmarketforendowmentstheyearsendedJune30,20122011,areas Endowments andgiftsareheldadministeredeitherbytheUniversityorUCLA’s Foundations. 10. ENDOWMENTSANDFOUNDATION GIFTS Total restricted T otal
$ $
1,528,434 1,521,934 1,291,142 230,750 317,071 554,132 353,052 230,792 66,475 6,505 2012 412 42
UCLA
$ $
1,655,608 1,650,467 1,420,715 146,920 341,165 547,418 384,802 229,752 229,710 5,141 2011 410 42
$
$
1,614,108 1,753,394 906,615 690,833 139,286 387,398 377,008 128,951 707,493 13,258 16,660 2012 -
FOUNDATIONS $ $
1,782,172 1,579,052 891,128 669,808 203,120 327,936 394,963 153,950 687,924 14,279 18,116 2011 - 53
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT nature andsignificanceoftheirrelationshipwiththeUniversity. are presenteddiscretelyinaseparatecolumnontheUniversity’s financialstatementsbecauseoftheir are componentunitsoftheUniversity. Thecombinedfinancialstatementsofthesetwofoundations Foundation/UCLA istoraiseanddistributefundsforcancerresearchatUCLA.Thesetwofoundations Center Foundation/UCLAwasestablishedin1956.TheprimarypurposeoftheJonssonCancer Los Angelescampus,theUCLAFoundationwasestablishedin1945.Inaddition,JonssonCancer these foundations,theirassetsarededicatedfortheUniversityofCalifornia,LosAngeles.For other supportforthemissionsofcampusandUniversity. Althoughindependentboardsgovern establish aseparatefoundationtoprovidevaluableassistanceinfundraising,publicoutreach,and Under UniversityofCaliforniapoliciesapprovedbyTheRegents,eachindividualcampusmay 12. CAMPUSFOUNDATION INFORMATION follows: Operating expenses,byfunctionalclassification,fortheyearsendedJune30,2012and2011,areas 11. OPERATING EXPENSESBYFUNCTION UCLA’s financialstatementsunderaseparatecolumntitled“Foundations.” The financialactivityoftheseparatelyincorporatedFoundationsarecombinedandpresentedin Other Depreciation enterprises Auxiliary Medical centers Student financialaid Operations andmaintenanceofplant Institutional support Student services Academic support Public service Research Instruction (dollars inthousands) Total
$ $
1,388,195 5,080,250 1,450,865 293,764 276,478 153,505 427,683 738,806 106,104 23,202 44,224 77,486 99,938 2012
$ $
1,240,220 4,563,334 1,284,846 270,561 252,277 137,720 348,284 702,469 100,161 19,686 59,277 78,931 68,902 2011 54
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT *Net ofinvestmentsheldforJonssonCancerCenterFoundation Cash andequivalents-June30,2012 Cash andequivalents-June30,2011 Investing activities Noncapital financingactivities Operating activities Net cashprovided(used)by: CONDENSED STATEMENT OFCASHFLOWS Net position-June30,2011 endowments Permanent Nonoperating revenues Operating expenses Operating revenues AND CHANGESINNETPOSITION CONDENSED STATEMENT OFREVENUES,EXPENSES otal netposition Unrestricted Restricted otal liabilities Noncurrent liabilities otal assets Current liabilities Noncurrent assets Current assets CONDENSED STATEMENT OFNETPOSITION Year endedJune30,2012 (dollars inthousands) Net increase(decrease)incashandequivalents Net position-June30,2012 Increase innetposition Income beforeotherchangesinnetposition Operating income T T T ended June30,2012and2011isasfollows: Condensed financialstatementinformationrelatedtotheUniversity’s campusfoundationsfortheyears
$ $ $ $ $ $ FOUNDATION*
1,607,740 1,759,819 1,770,028 1,739,728 1,739,728 1,962,583 (118,106) (225,684) UNIVERSITY OFCALIFORNIA,LOSANGELESFOUNDA 202,764 171,571 131,988 187,587 222,855 (24,810) (30,300) (78,923) (54,113) 35,268 80,271 37,635 48,623 1,469 1,269 UCLA (200)
CANCER CENTER FOUNDA $ $ $ $ $ $
JONSSON
(11,507) 12,144 13,035 13,666 13,673 13,666 7,298 6,368 7,912 5,761 1,522 1,522 1,528 TION (497) 519 41 63 22 (6) 7 7 - - -
TIONS $ $ $ $ $ $
1,614,108 1,767,731 1,782,172 1,753,394 1,976,256 1,753,394 (118,603) (237,191) 139,286 187,594 208,525 184,606 222,862 (24,816) (28,778) (77,401) (52,585) 35,268 80,790 37,635 48,623 1,510 TOT 1,332 (178) AL 55
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT *Net ofinvestmentsheldforJonssonCancerCenterFoundation Cash andequivalents-June30,2011 Cash andequivalents-June30,2010 Investing activities Noncapital financingactivities Operating activities Net cashprovided(used)by: CONDENSED STATEMENT OFCASHFLOWS Net position-June30,2010 endowments Permanent Nonoperating revenues Operating expenses Operating revenues AND CHANGESINNETPOSITION CONDENSED STATEMENT OFREVENUES,EXPENSES otal netposition Unrestricted otal liabilities Restricted Noncurrent liabilities otal assets Current liabilities Noncurrent assets Current assets CONDENSED STATEMENT OFNETPOSITION Year endedJune30,2011 (dollars inthousands) Net increase(decrease)incashandequivalents Net position-June30,2011 Increase innetposition Income beforeotherchangesinnetposition Operating income T T T
$ $ $ $ $ $ FOUNDATION*
1,574,299 1,779,718 1,322,575 1,770,028 1,770,028 2,015,678 (167,559) (152,315) UNIVERSITY OFCALIFORNIA,LOSANGELESFOUNDA 351,611 235,960 108,784 195,729 210,100 171,142 245,650 447,453 370,438 199,296 35,550 59,611 77,015 1,469 UCLA 633 836
CANCER CENTER FOUNDA $ $ $ $ $ $
JONSSON
(10,809) 10,275 11,454 12,144 12,150 12,144 7,391 4,753 6,818 5,332 1,224 TION (177) (534) 170 690 690 48 41 (7) 6 6 - - -
TIONS $ $ $ $ $ $
1,579,052 1,786,536 1,334,029 1,782,172 2,027,828 1,782,172 (167,389) (163,124) 361,886 203,120 210,106 241,292 108,607 172,366 245,656 448,143 371,128 198,762 35,550 59,611 77,015 TOT 1,510 681 829 AL 56
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT of oneyearareasfollows: Future minimumpaymentsonoperatingleaseswithinitialorremainingnon-cancelabletermsinexcess respectively. ThetermsofoperatingleasesextendthroughMarch2027. lease expensesfortheyearsendedJune30,2012and2011were$73.7million$60.4million, UCLA leasesland,buildingsandequipmentunderagreementsrecordedasoperatingleases.Operating million atJune30,2012and2011,respectively. Amounts committedbutunexpendedforconstructionprojectstotaled$516.5millionand$683.9 Contractual Commitments 13. COMMITMENTSANDCONTINGENCIES outcome ofsuchmatterswillnothaveamaterialeffectonUCLA’s financialposition. uncertainties inanylitigation,UCLAmanagementandcampuscounselareoftheopinionthat currently inlitigation,arisingthenormalcourseofitsactivities.Althoughthereareinherent UCLA iscontingentlyliableinconnectionwithcertainotherclaimsandcontracts,includingthose position. believes thatanyliabilitiesarisingfromsuchauditswillnothaveamaterialeffectonUCLA’s financial relates toresearch,studentaid,medicalcenteroperationsandotherprograms.UCLAmanagement federal and state programs and are subject to audit by cognizant governmental agencies. This funding Substantial amountsarereceivedandexpendedbyUCLA,includingtheUCLAmedicalcenters,under Contingencies Year EndingJune30 (dollars inthousands) Total 2023–2027 2018–2022 2017 2016 2015 2014 2013
ANNUAL LEASE $ $
PAYMENTS MINIMUM 231,372 21,373 59,092 45,882 27,639 33,696 39,959 3,731 57
NOTES to FINANCIAL STATEMENTS 2011 - 2012 | UCLA ANNUAL FINANCIAL REPORT
ELENA ZHUKOVA Photography only in electronic format. This report and Thisreport only inelectronicformat. reports fromprioryearsareavailable reports contact UCLAGeneralAccountingat Annual Financial Report isavailable Annual FinancialReport was preparedbytheCorporateAccountingDivisionof at www.accounting.ucla.edu (310) 794-2603oremail: [email protected] The UCLA 2011-12 Annual Financial Report The UCLA2011-12AnnualFinancialReport CREDITS For more information, For moreinformation, The UCLA2011-12 University of California, LosAngeles University ofCalifornia, Corporate Financial Services, Corporate FinancialServices, www.ucla.edu Charts andPieGraphs,ValentinCharts Sahleanu Copy Editor, Urish Larry Cover Photograph,KyleAlexander Cover Design,SuzannahMathur Director/Designer,Art Wanda D.Decca