Annual Report 17-18 Including financial statements Contents Financial results The following table illustrates the financial results of the University presented on a funding basis as well as in accordance with Our financial health accounting standards for not-for-profits (NFPS). A reconciliation between two presentations can be found starting on page 58. Financial results 1 President’s message Chair’s message Gervan Fearon, President and Vice-Chancellor Figure 1 Chair of the Board’s message 2 Funding NFPS Funding NFPS 2017-18 2017-18 2017-18 2017-18 2016-17 2016-17 Chair of Senate’s message 3 ($000s) Actual Budget Actual Budget Actual Actual Leadership Revenue Message from leadership 5 I am delighted to extend a warm welcome on behalf of the entire Brock University team. Student fees 167,446 167,875 167,658 167,875 158,341 158,451 Governance Grant revenue 97,371 96,326 96,156 95,028 95,009 94,160 Governance at Brock University 6 Brock has enjoyed an outstanding year, marked by successes that reflect teaching Internal chargebacks 9,426 8,792 9,703 Our financial health Board of Trustees 6 and learning as well as research excellence and partnerships that contribute to Inter-fund revenue 3,239 3,138 4,859 Senate (Pullout 1) i opportunities for our students and, the vibrancy of our surrounding communities. Other revenue 48,600 47,826 73,383 70,958 46,182 71,386 Total revenues 326,082 323,957 337,197 333,861 314,094 323,997 Mission and values A comprehensive university with nearly 19,000 students, we are a leader in teaching Operating costs Brock’s Mission Statement ii excellence awards and home to 10 Canada Research Chairs. Our academic programs Brock’s values ii Personnel costs (205,233) (212,939) (212,064) (216,295) (196,994) (204,882) and committed staff help Brock attract more and more students and partners. Inter-fund expense (23,288) (18,590) (20,965) Integrated Strategic Plan and Confirmed first-year applications this fall are 15 per cent above last year; we are Strategic Mandate Agreement ii Other operating costs (92,419) (92,428) (113,085) (117,281) (90,611) (110,297) particularly delighted to see applications from Niagara rise by 13 per cent. Total operating costs (320,940) (323,957) (325,149) (333,576) (308,570) (315,179) The big picture iv Funding surplus (before discretionary 5,142 - 12,048 285 5,524 8,818 Excellence in students 11 Brock also strives to advance Indigenous engagement, human rights and inclusivity. appropriations) Brock Sports achievements 12 We are creating a new Vice-Provost position for Indigenous engagement to advance Discretionary appropriations (5,132) (5,500) Student experience 14 gains already being made at the University; have created a President’s Advisory Funding surplus (after discretionary 10 - 12,048 285 24 8,818 Excellence in teaching Committee on Human Rights, Equity and Decolonization; and established a Director of appropriations) Teaching Awards 18 Human Rights and Equity. Graduate Studies Brock relishes opportunities to collaborate with community partners on major initiatives, Graduate Studies Awards 22 and this year signed Memoranda of Understanding with both the Town of Lincoln and Research Awards and Statement of operations metrics the Niagara Parks Commission. We are also partnering to help develop a new regional Canada Research Chairs 24 Figure 2 economic plan, and strengthen our area’s talent and innovation capacity to support Research 25 Brock (1) Median (2) Average (2) Community engagement 29 economic competitiveness, not-for-profit social activities and broad-based social prosperity. By student headcount ($000s) April 2018 April 2017 April 2016 April 2017 April 2016 April 2017 April 2016 1 Brock innovations 32 In the past decade, our generous supporters have enabled Brock to invest more than Student fees (primarily tuition) 8.92 8.47 8.20 8.96 8.59 8.79 8.30 Donations (Pullout 2) ii a quarter billion dollars in state-of-the-art, environmentally smart infrastructure. Grant 5.99 5.92 5.87 9.68 9.69 10.92 10.79 Excellence in 2017-18 iv These investments let the University leverage its capacity to help attract and retain Personnel costs 11.29 10.95 10.60 13.78 13.47 14.06 13.69 Alumni success viii investment and talent to the region. Scholarships 1.20 1.17 0.99 1.34 1.28 1.43 1.37 Alumni and staff Interest on long-term debt 0.38 0.39 0.40 0.26 0.27 0.27 0.27 Excellence in staff 43 The improvements continue at a heightened pace. Brock’s Goodman School of Investment income 0.11 0.12 0.06 0.81 0.42 0.82 0.50 Business is completing a $24-million expansion and modernization that will see some (1) Certain Brock metrics have been adjusted to account for reclassifications. Our people 44 (2) Calculated using financial information from 14 other comprehensive universities. Reviewing the numbers of Canada’s most modern teaching and learning space for Business students housed in Annual Report 2017-18 Financial results – funding basis 47 a striking piece of architectural design. Brock’s tuition is in line with the average; however, grant revenue per student continues to fall well below the sector average. Brock must operate more efficiently with below-average funding and this is seen in the lower personnel costs per-student. Despite having Responsibility centre results 54 The beautiful new Rankin Family Pavilion will also open this fall, transforming Brock’s iconic lower personnel costs per-student, Brock’s percentage of its operating budget utilized for personnel* is 70.8 per cent compared to Funding basis reconciled to the Schmon Tower and giving our region a high-tech centre of excellence with augmented Financial Statements 58 the average of 66.9 per cent as a result of having less funding at our disposal. Brock continues to invest in students through increasing reality facilities, 3-D makerspace, high-performance computing, incubator capacity and Reconciliation of net assets 60 scholarships. Interest and investment income metrics are in line with Brock’s comparatively weak reserves and high debt levels. more. This will revolutionize the opportunities available to students and community Financial review of the audited *Based on 2016-17 Council of Ontario Finance Officers (COFO) reporting, which is not directly comparable to a NFPS or funding basis. Financial Statements 64 partners through entrepreneurial learning, social enterprises and business opportunities. Taking a closer look at some A passionate advocate of environmental stewardship, Brock is also completing a Financial health metrics of the numbers 65 massive overhaul of our power generating facilities, replacing quarter-century-old Figure 3 University Risk Management 73 gas-powered engines with high-efficiency units, eliminating more than 50 tonnes of Brock(1) Median (2) Weighted average (2) Financial Statements emissions per year and using 26 per cent less fuel. April 2018 April 2017 April 2016 April 2017 April 2016 April 2017 April 2016 Statement of Administrative Primary reserve ratio 17.1% 14.6% 11.7% 26.4% 24.1% 38.5% 36.1% Responsibility 75 All of us at Brock – faculty, students and staff – embrace these important initiatives, Debt burden ratio 2.9% 3.0% 3.1% 2.6% 2.5% 2.9% 3.0% Independent Auditor’s Report 76 and more, because we are committed to helping achieve world-class excellence that Interest burden % 2.4% 2.5% 2.6% 1.7% 1.7% 1.5% 1.6% Statement of Financial Position 77 supports regional development and prosperity. We will continue to strive for future Interest coverage 4.23 3.70 3.35 7.89 3.68 7.21 5.93 Statement of Operations 78 advancements through collaboration and partnerships across the University and region. Viability ratio 39.3% 31.9% 24.5% 177.4% 189.9% 127.0% 120.1% Statement of Changes in Net Assets 79 Net operating revenues ratio 9.2% 5.1% 7.5% 7.1% 8.2% 9.1% 8.6% Statement of Cash Flows 80 This report contains certain forward-looking information. In preparing the 2017-18 Annual Report, certain assumptions and Employee future benefits per student headcount ($000s) $(0.68) $(0.53) $(1.12) $(3.03) $(3.27) $(2.36) $(3.24) estimates were necessary. They are based on information available to management at the time of preparing the budget. Endowment per student headcount ($000s) $5.15 $5.01 $4.50 $8.75 $6.96 $7.56 $6.89 Notes to Financial Statements 81 Users are cautioned that actual results may vary. Appendix Throughout the text in this annual report, financial values have been rounded to the nearest thousand. (1) Certain Brock metrics have been adjusted to account for reclassifications. (2) Calculated using financial information from 14 other comprehensive universities. Facilities Management (FM) utilities savings 98 Refer to page 68 for explanations of the debt-related financial health metrics. 4 Chair of the Board’s message Chair of Senate’s message Gary Comerford, Chair of the Board, Brock University David Whitehead, Chair of Senate, Brock University On behalf of the Board of Trustees at Brock University, it I would also like to extend the Board’s sincere gratitude to Tom In 2017-18, Senate welcomed Brock’s new President and • Has dedicated state-of-the-art Senate committee rooms is my pleasure to invite you to review and reflect upon the Traves, who served for 12 months as Brock’s Interim President, Brock’s new Chair of the Board of Trustees. that accommodate all Senate committees, working groups positive story that is told in the pages of our 2017-18 Annual through July 2017.