benedictine university annual report 2008-2009 honoring the

When we wrote to you a year ago, our nation was in the midst of
a recession. There appeared to be no escape from bad news
and unprecedented events weighing down the economy. Our
investments were suffering from the battered stock market,
and this continued to be the case through year’s end. However,
excluding the effects of any investment losses, this past year’s
financial results were actually strong. Overall enrollment continued to reach
new heights and we ended the year with very good liquidity. We were also
able to strengthen our position by engaging a new major bank to provide us
with higher quality credit facilities. This speaks volumes given the turmoil
in the banking sector and a strict lending environment.
At the end of fiscal 2009, total assets on our Statement of Financial Position
decreased $7.3 million from the prior year primarily from the decline in our
investments. However, cash flow remained strong, enabling us to build our
cash reserve and keep the balance on our line of credit down to zero. This
places us in a better position to weather the uncertain environment. The
primary capital addition for the year was the build-out of the lower level
of the Birck Hall of Science, which added seven new classrooms and
helped accommodate growth in the near-term. With the low interest rate
environment, we took the opportunity to enter into several interest rate
swap agreements to “fix” the rates on the bonds and to hedge our risk against
future rate hikes. After subtracting total liabilities from our assets,
we are left with total net assets of $54.5 million, 8.3 percent less than
last year’s balance.
On our Statement of Activities, gross tuition revenue rose above the
$70 million level for the year. The change in net assets for all classifications
was a negative $5 million. Excluding the investment loss and the fair
value change on the interest rate swap agreements, net assets increased
$5.4 million. However, we cannot totally ignore the impact of the investment
losses and its effect on the availability of student scholarships. The recession
has also affected our private gifts and grants, which dropped from the
prior year. On the spending side, we continued to make investments in our
personnel and in service-related costs supporting our higher enrollment.
At the time of this writing, the economy has shown signs of improvement
and the stock market has begun to recover. However, the jobless rate
continues to be high. We are sensitive to this reality, and so we will
continue to provide those initiatives that assist our students and which
make us truly Benedictine. We have much to be thankful for and are
cautiously optimistic about our chances for achieving future success,
even during these rough times.
Year ended May 31, 2009
A messAge
from the
office of
BUsiness And
finAnce
Charles Gregory
Executive Vice President
Allan Gozum
Vice President of Finance
Annual Report 2008-2009 1