2020 Bondholders Report

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2020 Bondholders Report BONDHOLDERS REPORT 2020 BONDHOLDERS REPORT TABLE OF CONTENTS 1 Introduction 2 2020 Financial Report 3 Supplemental Bondholder Information Official Statement Disclosures Applications, Students & Enrollment Faculty & Other Data Medical Centers Consolidated Endowment and Invested Funds University Liquidity Future Debt Service 4 Supplemental Financial Reports Supplementary Information (General Revenues) Housing and Food Services Department of Intercollegiate Athletics UW Medicine Clinical Enterprise—UW Division Metropolitan Tract Student Services and Facilities Fees—Seattle Campus University of Washington 2020 BONDHOLDERS REPORT This report includes financial and operating information on the University of Washington (the “University”). As a preface to reviewing the materials, we suggest starting with the University’s Financial Report, which highlights the accomplishments, opportunities and challenges facing the University. The enclosed audited financial statements are as of June 30, 2020, the University’s fiscal year end. Also included is a supplemental report, which includes additional financial and operating information, provided for the benefit of the holders and beneficial owners of the bonds. This section includes some information that is also provided in the University’s Financial Report. This information may contain adjustments resulting from changes in methodology or timing. If you have comments, questions or need additional information, please feel free to contact us using the information shown below. Annette Sommer Shannon Thompson Chad Cook Tyler Benson Senior Associate Associate Treasurer Senior Analyst Analyst Treasurer (206) 685-2472 (206) 616-9969 (206) 897-1693 (206) 221-8982 [email protected] [email protected] [email protected] [email protected] Vivia Zhu Treasury Intern (206) 221-6752 [email protected] The information presented in this report is not intended to cover all material information that may be relevant to the outstanding bonds of the University of Washington. The information contained herein has been obtained from University officers, employees, records and other sources believed to be reliable. The University of Washington is under no legal obligation to provide the bondholders report, nor should it be construed that the University will provide such information in whole or in part in the future. 4333 Brooklyn Ave NE, Campus Box 359441, Seattle, Washington 98105 Phone: 206.221.6752 Fax: 206.685.1761 TableTable ofof ContentsContents 1 INDEPENDENT1 INDEPENDENT AUDITORS’ AUDTIORS’ REPORT REPORT 3 MANAGEMENT’S3 MANAGEMENT’S DISCUSSION DISCUSSION AND ANALYSIS AND ANALYSIS 19 FINANCIAL20 FINANCIAL STATEMENTS STATEMENTS 24 NOTES24 TONOTES FINANCIAL TO FINANCIAL STATEMENTS STATEMENTS 67 SCHEDULES67 SCHEDULES OF REQUIRED OF REQUIRED SUPPLEMENTARY SUPPLEMENTARY INFORMATION INFORMATION INSIDE BACK COVER BOARDINSIDE OF REGENTS AND ADMINISTRATIVE OFFICERS BACK COVER BOARD OF REGENTS AND ADMINISTRATIVE OFFICERS University Facts FISCAL YEAR FISCAL YEAR FISCAL YEAR 2020 2015 2010 Academic Year Academic Year Academic Year 2019-2020 2014-2015 2009-2010 STUDENTS Autumn Enrollment (headcount) Undergraduate 42,544 39,331 34,972 Graduate 14,628 13,333 11,996 Professional 2,209 2,006 1,913 TOTAL 59,381 54,670 48,881 Professional and Continuing Education - Course and Conference Registrations 90,714 76,245 63,178 Number of Degrees Awarded Bachelor’s 11,508 10,145 9,290 Master’s 4,957 4,117 3,269 Doctoral 845 838 703 Professional 598 554 523 TOTAL 17,908 15,654 13,785 FACULTY1 4,864 4,561 4,169 FACULTY AND STAFF2 31,093 27,264 24,741 RESEARCH FUNDING - ALL SOURCES (in thousands of dollars) $ 1,631,329 $ 1,308,801 $ 1,317,614 SELECTED REVENUES (in thousands of dollars) Net Patient Service and Other Medical-Related Revenues3 $ 2,949,012 $ 2,283,022 $ 1,473,779 Gifts, Grants and Contracts 1,762,883 1,444,765 1,314,485 Tuition and Fees4 1,058,271 914,419 527,958 Auxiliary Enterprises and Other Revenues 719,578 614,185 315,363 State Appropriations (Operating) 415,030 255,156 347,425 Investment Income 207,993 227,404 308,752 SELECTED EXPENSES (in thousands of dollars) Medical-Related3 $ 2,577,507 $ 2,068,491 $ 1,043,171 Instruction, Academic Support, and Student Services 2,121,064 1,640,377 1,291,234 Institutional Support and Physical Plant 936,834 767,784 525,273 Research and Public Service 873,225 765,036 733,769 Auxiliary Enterprises 589,895 291,628 165,612 CONSOLIDATED ENDOWMENT FUND5 (in thousands of dollars) $ 3,560,000 $ 3,076,000 $ 1,830,000 SQUARE FOOTAGE6 (in thousands of square feet) 27,202 22,326 18,526 1. Prior to 2018, this number represents headcount for core faculty (Professorial, Instructional and Research). Starting in 2018, this number represents full time faculty from all campuses including the Medical Centers. 2. Full time equivalents – restated (historically) using centralized data source and enterprise definitions 3. Includes Valley Medical Center in 2020 and 2015 only 4. Net of scholarship allowances of $198.8 million in 2020, $142.7 million in 2015 and $82.5 million in 2010 5. Stated at fair value 6. Gross square footage, all campuses KPMG LLP Suite 2900 1918 Eighth Avenue Seattle, WA 98101 Independent Auditors’ Report The Board of Regents University of Washington: Report on the Financial Statements We have audited the accompanying financial statements of the business-type activities and the discretely presented component unit of the University of Washington (the University), which comprise the statements of net position as of June 30, 2020 and 2019, and the related statements of revenues, expenses and changes in net position, and cash flows for the years then ended, and the related notes to the financial statements, which collectively comprise the University’s basic financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and the discretely presented component unit of the University of Washington as of June 30, 2020 and 2019, and the respective changes in financial position and, where applicable, cash flows thereof for the years then ended in accordance with U.S. generally accepted accounting principles. KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. Emphasis of Matter As discussed in note 1 to the financial statements, the financial statements of the University of Washington, an agency of the state of Washington, are intended to present the financial position, the changes in financial position and, where applicable, cash flows of only the respective portion of the governmental activities, the business type activities, each major fund, and the aggregate remaining fund information of the state of Washington that are attributable to the transactions of the University of Washington and its discretely presented component unit. They do not purport to, and do not, present fairly the financial position of the state of Washington as of June 30, 2020 and 2019, the changes in its financial position, or, where applicable, its cash flows for the years then ended in accordance with U.S. generally accepted accounting principles. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information U.S. generally accepted accounting principles require that the management’s discussion and analysis on pages 3 through 18, and the schedules of required supplementary information on pages 67 through 72, be presented to supplement
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