FY 2005 - University of Missouri System

Management’s Discussion and Analysis (unaudited)F o r t h e y e a r s e n d e d J u n e 3 0 , 2 0 0 5 a n d 2 0 0 4Fiscal Year 2005 Compared to Fiscal Year 2004Total Operating Revenues increased $189.7 million over fiscal year 2004 to $1.5 billion in fiscal year 2005. Thisfluctuation is due to increases in tuition, patient medical services and revenues related to certain auxiliary operations.Nonoperating Revenues include funding sources such as State Appropriations, State Bond Funds, FederalAppropriations and Gift and Investment Income. These sources are categorized under GASB standards as nonoperatingbecause they are not generated as a result of the University’s core missions of teaching, research and public service. Thefollowing is a graphic illustration of revenues by source, including both operating and nonoperating revenue streamsfor fiscal year 2005.Tuition and Fees, net of Scholarship Allowances, which includes University resources used to reduce fees charged tostudents for related services, increased 14.0% or $43.7 million over fiscal year 2004. This was primarily due to Boardapprovedincreases in undergraduate and graduate tuition and related enrollment fees of 7.5%.As a research institution, the University receives a substantial amount of funding through Federal, State and PrivateGrants and Contracts. The University experienced growth in this revenue source of 13.4% from $259.1 millionin fiscal year 2004 to $293.9 million in fiscal year 2005. Federal grant funding and State grant funding increasedsignificantly in fiscal year 2005 with increases of 13.4% and 23.2%, respectively. Modest increases of 6.9% occurredin private grants and contracts.Patient Medical Services, which includes fees for services provided by the University Hospitals and Clinics andrelated health care units (“UHC”) and the University Physicians Practice Plan, increased $74.2 million or 15.1% overfiscal year 2004. Of this increase, $4.0 million relates to the operations of the University Physicians and $70.2 millionrelates to UHC.Following two years of consecutive cuts, the University experienced an increase in fiscal year 2005 to its coreappropriations from the State of Missouri, resulting in net State Appropriations of $430.1 million. In fiscal year 2004,the University’s core appropriations were cut 5.5% with additional extraordinary withholdings of $9.7 million withheldfrom the State. Subsequently, the State of Missouri released the extraordinary withholdings throughout fiscal year2004, resulting in net State Appropriations of $421.4 million in fiscal year 2004.In fiscal year 2005, State Capital Appropriations and State Bond Funds of $4.7 million, consisting primarily offunding for the Health Sciences Center on the Kansas City campus, decreased $49.5 million from $54.2 million in fiscalyear 2004. In fiscal year 2004, the State of Missouri released $34.3 million of bond funds for the new sports arena onthe Columbia campus. The remaining State Capital Appropriations in fiscal year 2004 consisted primarily of fundingfor the Life Sciences Center on the Columbia campus, which opened in August 2004, and the Health Sciences Centerin Kansas City.2 0 0 5 F i n a n c i a l R e p o r t : U n i v e r s i t y o f M i s s o u r ia c o m p o n e n t u n i t o f t h e S t a t e o f M i s s o u r i