`
`
`
`University of Minnesota
`
`Consolidated Financial Statements for the Years
`Ended June 30, 2016 and 2015, Independent
`Auditors’ Report, and Management’s Discussion
`and Analysis
`
`

`

`
`
`Financial Report
`
`
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`
`
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` 3
`
`Independent Auditors’ Report
`
` 5 Management’s Discussion and Analysis (Unaudited)
`
`22
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`Consolidated Financial Statements
`as of and for the Years Ended June 30, 2016 and 2015
`
`22
`
`23
`
`24
`
`25
`
`27
`
`Consolidated Statements of Net Position
`(Excluding Component Units)
`
`Component Units—Statements of Financial Position
`
`Consolidated Statements of Revenues, Expenses, and
`Changes in Net Position (Excluding Component Units)
`
`Component Units—Statements of Activities
`
`Consolidated Statements of Cash Flows
`(Excluding Component Units)
`
`29
`
`Notes to Consolidated Financial Statements
`
`80
`
`Required Supplementary Information (Unaudited)
`
`81
`
`Schedules of Funding Progress for Supplemental
`Benefits Plan and Other Postemployment Benefits
`
`84
`
`Supplemental Schedules
`
`
`
`
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`
`
`90
`
`85
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`86
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`88
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`Independent Auditors’ Report on Additional Information
`
`Statements of Net Position by Campus
`
`Statements of Revenues, Expenses, and Changes in Net Position by Campus
`
`Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance
`and Other Matters Based on an Audit of Financial Statements Performed in Accordance with
`Government Auditing Standards
`
`
`2
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`

`

`Deloitte & Touche LLP
`
`Suite 2800
`50 South Sixth Street
`Minneapolis, MN 55402-1538
`USA
`
`Tel: +1 612 397 4000
`Fax: +1 612 397 4450
`www.deloitte.com
`
`
`
`
`
`INDEPENDENT AUDITORS’ REPORT
`
`
`The Board of Regents
`University of Minnesota
`Minneapolis, Minnesota
`
`Report on the Consolidated Financial Statements
`
`We have audited the accompanying consolidated statements of net position of the University of Minnesota
`(the “University”) as of June 30, 2016 and 2015, the related consolidated statements of revenues,
`expenses, and changes in net position, and cash flows for the years then ended, and the related notes
`to the consolidated financial statements, which collectively comprise the University’s basic financial
`statements as listed in the table of contents.
`
`Management’s Responsibility for the Consolidated Financial Statements
`
`Management is responsible for the preparation and fair presentation of these consolidated financial
`statements in accordance with accounting principles generally accepted in the United States of America;
`this includes the design, implementation, and maintenance of internal control relevant to the preparation
`and fair presentation of consolidated financial statements that are free from material misstatement,
`whether due to fraud or error.
`
`Auditor’s Responsibility
`
`Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
`We did not audit the financial statements of the discretely presented component units. Those statements
`were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it
`relates to the amounts included for the discretely presented component units, is based solely on the
`reports of the other auditors. We conducted our audits in accordance with auditing standards generally
`accepted in the United States of America and the standards applicable to financial audits contained in
`Government Auditing Standards, issued by the Comptroller General of the United States. Those standards
`require that we plan and perform the audit to obtain reasonable assurance about whether the financial
`statements are free from material misstatement. The financial statements of the discretely presented
`component units were not audited in accordance with Government Auditing Standards.
`
`An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
`the financial statements. The procedures selected depend on the auditor’s 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 University’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 opinion.
`
`3
`
`
`
`
`
`

`

`
`
`Opinion
`
`In our opinion, based on our audits and the reports of the other auditors, the consolidated financial
`statements referred to above present fairly, in all material respects, the financial position of the University
`as of June 30, 2016 and 2015, and the results of its operations and its cash flows for the years then
`ended and the financial statements of the discretely presented component units as of and for the years
`ended June 30, 2016 and 2015, in accordance with accounting principles generally accepted in the United
`States of America.
`
`Other Matters
`
`Required Supplementary Information
`
`Accounting principles generally accepted in the United States of America require that the management’s
`discussion and analysis and the schedule of funding progress, as listed in the table of contents, which are
`the responsibility of the University’s management, be presented to supplement the basic consolidated
`financial statements. Such information, although not a part of the basic financial statements, is required
`by the Governmental Accounting Standards Board who considers it to be an essential part of financial
`reporting for placing the basic consolidated financial statements in an appropriate operational, economic,
`or historical context. We and other auditors have applied certain limited procedures to the required
`supplementary information in accordance with auditing standards generally accepted in the United States
`of America, which consisted of inquiries of management about the methods of preparing the information
`and comparing the information for consistency with management’s responses to our inquiries, the basic
`consolidated financial statements, and other knowledge we obtained during our audits of the basic
`consolidated financial statements. We do not express an opinion or provide any assurance on the
`information because the limited procedures do not provide us with sufficient evidence to express an
`opinion or provide any assurance.
`
`Other Reporting Required by Government Auditing Standards
`
`In accordance with Government Auditing Standards, we have also issued our report dated November 28,
`2016 on our consideration of the University's internal control over financial reporting and on our tests of
`its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
`matters. The purpose of that report is to describe the scope of our testing of internal control over financial
`reporting and compliance and the results of that testing, and not to provide an opinion on internal control
`over financial reporting or on compliance. That report is an integral part of an audit performed in
`accordance with Government Auditing Standards in considering the University’s internal control over
`financial reporting and compliance.
`
`November 28, 2016
`
`
`
`
`
`
`
`
`4
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`

`

`
`
`Management’s Discussion and Analysis
`(Unaudited)
`
`Introduction
`
`This discussion and analysis of the University of Minnesota’s (the University) consolidated financial
`statements provides an overview of the consolidated financial position and activities of the University for the
`years ended June 30, 2016, 2015, and 2014. The discussion has been prepared by management and should be
`read in conjunction with the consolidated financial statements and the accompanying notes.
`
`The University of Minnesota is both the state’s land-grant university, with a strong tradition of education and
`public service, and a major research institution, with faculty of national and international reputation. Its
`mission is to offer undergraduate, graduate, and professional instruction through the doctoral degree, and to be
`the primary state-supported academic institution for research and extension services.
`
`The University of Minnesota, founded in 1851, has five campuses (Twin Cities, Duluth, Morris, Crookston,
`and Rochester), research and outreach centers, and extension service offices throughout the state.
`
`The University’s enrollment for all five campuses is approximately 67,000 students, with the Twin Cities
`campus having the largest student enrollment of approximately 51,000 students. The University is among the
`top nine public research institutions nationally. The University is the state’s major research institution with
`expenditures of approximately $692.7 million, $700.2 million, and $679.7 million in fiscal years 2016, 2015,
`and 2014, respectively, for research under various programs funded by governmental and private sources.
`
`The Duluth campus is a comprehensive regional university that offers instruction through the doctoral degree
`and has unique research strengths in natural and freshwater resources. The Duluth campus consistently ranks
`among the top Midwestern regional universities.
`
`The Morris campus is ranked as one of the top public liberal arts colleges in the nation and is a leader in
`environmental issues.
`
`The Crookston campus provides career-oriented education at the baccalaureate level, primarily in
`polytechnical disciplines.
`
`The Rochester campus is focused on meeting the educational needs of students in the southeastern Minnesota
`area at the upper division undergraduate and post-baccalaureate levels and conducts research in the areas of
`health sciences and biotechnology.
`
`Mission
`
`The University of Minnesota’s mission, carried out on multiple campuses and throughout the state, is threefold:
`research and discovery, teaching and learning, and outreach and public service.
`
`
`• Research and Discovery—To generate and preserve knowledge, understanding, and creativity by
`conducting high quality research, scholarship, and artistic activities that benefit students, scholars, and
`communities across the state, the nation, and the world.
`
`• Teaching and Learning—To share that knowledge, understanding, and creativity by providing a broad
`range of educational programs in a strong and diverse community of learners and teachers, and to
`prepare graduate, professional, and undergraduate students, as well as non-degree-seeking students
`
`
`
`5
`
`

`

`
`
`interested in continuing education and lifelong learning, for active roles in a multiracial and
`multicultural world.
`
`• Outreach and Public Service—To extend, apply, and exchange knowledge between the University and
`society by applying scholarly expertise to community problems, by helping organizations and
`individuals respond to their changing environments, and by making the knowledge and resources
`created and preserved at the University accessible to the citizens of the state, the nation, and the world.
`
`
`Operations
`
`The University of Minnesota conducts its mission activities at its campuses and other facilities throughout the
`state. Each year, the University of Minnesota:
`
`• provides instruction for approximately 67,000 students;
`
`• graduates approximately 15,800 students, 40 percent with graduate or first professional degrees on the
`Twin Cities campus;
`
` •
`
` provides over 300 student exchange programs, ranking third nationally with learning abroad programs;
`
`• conducts research sponsored by the National Institutes of Health, the National Science Foundation,
`other federal, state, and governmental agencies, and numerous private companies and foundations;
`
`reaches out to more than one million Minnesotans through various outreach and public service
`activities.
`
`•
`
`
`Consolidated Financial Statements
`
`The consolidated financial statements are prepared in accordance with generally accepted accounting
`principles prescribed by the Governmental Accounting Standards Board (GASB). The consolidated financial
`statements required under these reporting standards include the Consolidated Statements of Net Position; the
`Consolidated Statements of Revenues, Expenses, and Changes in Net Position; and the Consolidated
`Statements of Cash Flows. All are reported on a consolidated basis for the University as a whole. Also
`required are the financial results of the University’s legally separate component units.
`
`In fiscal year 2016, the University implemented GASB Statement No. 72 (GASB 72), Fair Value Measurement
`and Application. The investment definition defined in GASB 72 no longer considers the University’s patents
`as investments. GASB 72 required the University to implement retrospectively. As a result, the University
`recorded $15.4 million as a reduction to investments and an increase in operating expenses and cumulative
`effect of change in accounting principle for fiscal year 2015. Refer to Footnote 2 for additional information.
`
`In fiscal year 2015, the University implemented GASB Statement No. 68 (GASB 68), Accounting and
`Financial Reporting for Pensions—an amendment of GASB Statement No. 27, and GASB Statement No. 71
`(GASB 71), Pension Transition for Contributions made Subsequent to the Measurement Date–an amendment
`of GASB Statement No. 68. GASB 68 and 71 require state and local government employers to recognize a net
`pension liability for defined benefit plans where the entity is a participant. The University pension plans
`impacted by GASB 68 and 71 are the State Employees’ Retirement Fund (SERF and MSRS) and Public
`Employee Police and Fire Fund (PEPFF and PERA). The University recorded a deferred outflow of resources,
`a net pension liability and a deferred inflow of resources of $75.0 and $25.1 million, $244.4 and $266.5 million,
`and $348.6 million and $368.2 million, in fiscal years 2016 and 2015, respectively. Refer to Footnote 1 and
`Footnote 6 for additional information related to the implementation of GASB 68 and 71.
`
`
`
`6
`
`

`

`
`
`
`Financial Highlights
`
`The University’s financial position remains strong with assets of $6.0 billion, an increase of $0.1 billion from
`fiscal year 2015. Liabilities increased to $2.5 billion compared to $2.4 billion for fiscal year 2015. The
`University’s net position, the difference between total assets, deferred outflows of resources, total liabilities,
`and deferred inflows of resources, increased year over year to $3.3 billion as of June 30, 2016 compared to
`$3.2 billion as of June 30, 2015.
`
`The following chart summarizes total assets, deferred outflows of resources, liabilities, deferred inflows of
`resources, and net position as of June 30, 2016, 2015 and 2014, respectively:
`
`
`
`The change in net position represents the financial results during the fiscal year and is the difference between
`total revenue and total expense. The University’s net position increased $107.1 million in fiscal year 2016
`compared to a decrease of $610.5 million in fiscal year 2015 due to the implementation of GASB 68.
`
`With the implementation of GASB 68 and 71, the University recorded a cumulative effect of a change in
`accounting principle of $682.5 million in fiscal year 2015. GASB 72, implemented in fiscal year 2016,
`required the University to present the changes retrospectively. As a result, an additional $14.5 million was
`recorded as a cumulative effect of a change in accounting principle in fiscal year 2015 for a total of $697.0
`million. A cumulative effect of a change in accounting principle is the cumulative impact to the consolidated
`financial statements related to prior fiscal years.
`
`
`
`
`
`
`
`7
`
`

`

`
`
`The following chart summarizes total revenues, expenses and the changes in net position for the years ended
`June 30, 2016, 2015 and 2014, respectively:
`
`
`
`
`
`The University experienced an increase in total revenue of $88.1 million or 2.6 percent due to increases in all
`revenue categories partially offset by decreases in net investment income of $66.0 million. Operating revenues
`increased $68.7 million or 3.2 percent. Total expenses increased $67.5 million or 2.0 percent primarily due to
`increases in operating expenses. The University continues to focus on instruction, research and public service
`while continuing to emphasize controlling operating expenses.
`
`Consolidated Statements of Net Position
`
`The Consolidated Statements of Net Position present the consolidated financial position of the University at
`the end of the fiscal year, under a classified balance sheet format that reflects current and noncurrent assets,
`deferred outflows of resources, current and noncurrent liabilities, deferred inflows of resources, and reports
`net position under four separate classifications.
`
`
`
`
`
`
`
`8
`
`

`

`
`
`A comparison of the University’s assets, deferred outflows of resources, liabilities, deferred inflows of
`resources, and net position as of June 30, 2016, 2015 and 2014 is summarized in the table below:
`
`
`Condensed Statements of Net Position
`(in thousands)
`
`Assets
`Current assets
`Noncurrent assets, excluding capital assets
`Capital assets, net
`Total assets
`
`2016
`
`2015
`
`2014
`
`1,160,883$
`
`
`1,855,782
`
`3,027,802
`
`6,044,467
`
`695,807$
`
`
`2,264,034
`
`2,957,133
`
`5,916,974
`
`589,977$
`
`2,231,939
`
`
`2,900,494
`
`5,722,410
`
`Deferred outflows of resources
`
`
`
`25,303
`
`
`
`25,100
`
`Liabilities
`Current liabilities, excluding long-term debt
`Noncurrent liabilities, excluding long-term debt
`Long-term debt
`Total liabilities
`Deferred inflows of resources
`
`503,612
`
`
`483,016
`
`1,500,632
`
`2,487,260
`
`473,587
`
`
`502,318
`
`1,421,428
`
`2,397,333
`
`444,319
`
`
`208,518
`
`1,282,507
`
`1,935,344
`
`
`
`298,892
`
`
`
`368,220
`
`457,506
`
`
`889,332
`
`304,669
`
`1,632,111
`
`3,283,618$
`
`275,097
`
`
`927,436
`
`297,469
`
`1,676,519
`
`3,176,521$
`
`812,356
`
`1,004,191
`
`
`289,366
`
`1,681,153
`
`3,787,066$
`
`
`
`Net position
`Unrestricted
`Restricted—expendable
`Restricted—nonexpendable
`Net investment in capital assets
`Total net position
`
`Assets
`
`Current assets are used to support current operations and consist primarily of cash and cash equivalents, net
`receivables and short-term investments.
`
`Noncurrent assets consist primarily of investments, capital assets net of accumulated depreciation, and student
`loan receivables.
`
`
`
`
`
`
`9
`
`

`

`
`
`The following charts illustrate the composition of total assets:
`
`
`
`
`
`
`
`
`10
`
`
`
`
`
`

`

`
`
`The University's current and noncurrent assets as of June 30, 2016, 2015 and 2014
`(in thousands)
`
`Current assets
`Cash and cash equivalents
`Receivables, net
`Investments
`Other assets
`Total current assets
`
`Noncurrent assets
`Capital
`
`2016
`
`2015
`
`2014
`
`Increase (Decrease)
`From 2015 to 2016
`From 2014 to 2015
`Amount
`Percent
`Amount
`Percent
`
`350,385$
`
`
`305,573
`
`459,515
`
`45,410
`
`1,160,883
`
`183,451$
`
`
`285,336
`
`185,724
`41,296
`
`
`695,807
`
`243,049$
`
`
`312,323
`676
`
`
`33,929
`
`589,977
`
`166,934$
`
`
`20,237
`
`273,791
`
`4,114
`
`465,076
`
`91.0%
`7.1%
`147.4%
`10.0%
`66.8%
`
`(59,598)$
`
`
`(26,987)
`
`185,048
`7,367
`
`
`105,830
`
` (24.5%)
` (8.6%)
`27374.0%
`21.7%
`17.9%
`
`
`
`3,027,802
`
`
`
`2,957,133
`
`
`
`2,900,494
`
`
`
`70,669
`
`2.4%
`
`
`
`56,639
`
`2.0%
`
`Other noncurrent assets
`Cash and cash equivalents & other assets
`Receivables, net
`Investments
`Total other noncurrent assets
`
`111,665
`
`
`74,186
`
`1,669,931
`
`1,855,782
`
`150,656
`
`72,444
`
`
`2,040,934
`
`2,264,034
`
`68,522
`
`
`71,699
`
`2,091,718
`
`2,231,939
`
`(38,991)
`
`
`1,742
`
`(371,003)
`
`(408,252)
`
` (25.9%)
`2.4%
` (18.2%)
` (18.0%)
`
`82,134
`
`
`745
`
`(50,784)
`32,095
`
`
`119.9%
`1.0%
` (2.4%)
`1.4%
`
`2.2%
`
`
`
`194,564$
`
`3.4%
`
`
`
`Total assets
`
`As of June 30, 2016, total assets increased $127.5 million primarily due to increases in cash and cash
`equivalents, and capital, partially offset by decreases in investments. Investments decreased $97.2 million
`primarily due to a decrease in Temporary Investment Pool investment activity. Cash and cash equivalents
`increased $126.1 million. Noncurrent cash and cash equivalents consist of unspent bond proceeds of $107.4
`million and $148.3 million in fiscal year 2016 and 2015, respectively. Capital assets, net of accumulated
`depreciation, increased $70.7 million due to increased spending on construction projects, specifically the
`Combined Heat and Power Plant, the Tate Science and Teaching building renovation and the Intercollegiate
`Athletics Village. Refer to Footnote 4 for additional information related to capital assets.
`
`Liabilities
`
`Current liabilities are obligations that are expected to become due and payable during the next fiscal year.
`Current liabilities consist primarily of accounts payable and accrued liabilities including salaries and
`compensation-related expenditures, and unearned income. Current unearned income is comprised of revenue
`related to summer session tuition and fees deferred to the following fiscal year, and funds received in advance
`of expenditures on sponsored accounts.
`
`The University’s noncurrent liabilities consist primarily of accrued liabilities, capital obligations, notes
`payable, leases and bonds payable (long-term debt). The University’s long-term debt represents 60 percent of
`total liabilities or $1,500.6 million as of June 30, 2016 compared to 59 percent or $1,421.4 million as of June
`30, 2015.
`
`
`
`
`6,044,467$
`
`
`
`5,916,974$
`
`
`
`5,722,410$
`
`
`
`127,493$
`
`
`
`11
`
`

`

`
`
`The following charts illustrate the composition of total liabilities:
`
`
`
`
`
`
`
`
`12
`
`
`
`
`
`

`

`
`
`The University's current and noncurrent liabilities as of June 30, 2016, 2015 and 2014
`(in thousands)
`
`Current liabilities
`Accounts payable
`Accrued liabilities and other
`Unearned income
`Long-term debt
`Total current liabilities
`
`Noncurrent liabilities
`Accrued liabilities and other
`Unearned income *
`Long-term debt
`Total noncurrent liabilities
`
`2016
`
`2015
`
`2014
`
`145,992$
`
`
`294,940
`62,680
`
`
`300,531
`
`804,143
`
`140,114$
`
`
`259,912
`
`73,561
`
`309,805
`
`783,392
`
`131,403$
`
`
`244,389
`
`68,527
`
`272,026
`
`716,345
`
`482,955
`
`61
`
`
`1,200,101
`
`1,683,117
`
`502,264
`
`
`54
`
`1,111,623
`
`1,613,941
`
`205,360
`
`
`3,158
`
`1,010,481
`
`1,218,999
`
`Increase (Decrease)
`From 2015 to 2016
`From 2014 to 2015
`Amount
`Percent
`Amount
`Percent
`
`5,878$
`
`
`35,028
`
`(10,881)
`
`(9,274)
`
`20,751
`
`(19,309)
`
`
`7
`
`88,478
`
`69,176
`
`4.2%
`13.5%
` (14.8%)
` (3.0%)
`2.6%
`
` (3.8%)
`13.0%
`8.0%
`4.3%
`
`8,711$
`
`
`15,523
`
`5,034
`
`37,779
`
`67,047
`
`6.6%
`6.4%
`7.3%
`13.9%
`9.4%
`
`296,904
`
`
`(3,104)
`
`101,142
`
`394,942
`
`144.6%
` (98.3%)
`10.0%
`32.4%
`
`Total Liabilities
`
`
`
`2,487,260$
`
`
`
`2,397,333$
`
`
`
`1,935,344$
`
`
`
`89,927$
`
`3.8%
`
`
`
`461,989$
`
`23.9%
`
`
`
`* Total is less than 1 percent - not included in the graph.
`
`As of June 30, 2016, total liabilities increased $89.9 million primarily due to increases in long-term debt.
`Accrued liabilities increased $15.7 million primarily due to the gradual amortization of the University’s full
`liability related to Other Post-Employment Benefits (OPEB). The University recorded an increase in the OPEB
`liability of $18.0 million and $18.9 million in fiscal years 2016 and 2015, respectively. As of June 30, 2016,
`the cumulative OPEB liability of $138.2 million was recorded as a current liability of $6.0 million and a
`noncurrent liability of $132.2 million.
`
`Long-term debt increased $79.2 million or 5.6 percent. The University issued General Obligation Bonds Series
`2015B and Series 2016A, with a par amount of $10.1 million and $122.5 million, respectively, and Special
`Purpose Revenue Bonds Series 2015A, with a par amount of $90.1 million in fiscal year 2016. Additions from
`the issuance were offset by normal amortization of the bonds, premiums and discounts. Refer to Footnote 5
`for additional information related to long-term debt.
`
`Deferred Outflows and Inflows of Resources
`
`In fiscal year 2014, the University implemented GASB Statement No. 65 (GASB 65), Items Previously
`Reported as Assets and Liabilities. GASB 65 specifies certain items that were previously reported as assets
`and liabilities must be reclassified and reported as deferred outflows and inflows of resources. Deferred
`outflows of resources are items previously reported as assets that result in the outflow of net position in the
`current reporting period for activities applicable to a future reporting period. Likewise, deferred inflows of
`resources are items previously reported as liabilities that result in the inflow of net position in the current
`reporting period for activities applicable to a future reporting period. As of June 30, 2016, the deferred
`outflows of resources increased $0.2 million and deferred inflows of resources decreased $69.3 million.
`
`Net Position
`
`Net position represents the residual value of the University’s assets and deferred outflows of resources, after
`deducting liabilities and deferred inflows of resources and consists of the following three classifications:
`
`
`• Unrestricted net position—Includes assets that are not subject to limitations or stipulations imposed by
`external entities and that have not been set aside for capital or endowment purposes. These assets are
`
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`available for any lawful purpose of the institution and include resources that may be designated for
`specific purposes as determined by management or the Board of Regents.
`
`• Restricted net position, which is divided into two categories—expendable and nonexpendable—
`Expendable assets are available for expenditure by the institution, but only in accordance with
`restrictions placed on their use by donors and other external entities. Nonexpendable assets are also
`externally restricted, but are required to be retained in perpetuity, including the University’s true
`endowments and institutional contributions to refundable loan programs.
`
`• Net investment in capital assets—Includes property, plant, and equipment, net of accumulated
`depreciation, reduced by the outstanding balances of debt attributable to these capital assets.
`
`
`The following charts illustrate the composition of the University’s total net position:
`
`
`
`
`The University's total net position as of June 30, 2016, 2015 and 2014
`(in thousands)
`
`
`
`2016
`
`457,506$
`
`2015
`275,097$
`
`
`2014
`
`812,356$
`
`Increase (Decrease)
`From 2015 to 2016
`From 2014 to 2015
`Amount
`Percent
`Amount
`Percent
`
`182,409$
`66.3%
`
`(537,259)$
` (66.1%)
`
`889,332
`
`
`304,669
`
`1,632,111
`
`3,283,618$
`
`927,436
`
`
`297,469
`
`1,676,519
`
`3,176,521$
`
`1,004,191
`
`289,366
`
`
`1,681,153
`
`3,787,066$
`
`(38,104)
`
`
`7,200
`
`(44,408)
`
`107,097$
`
` (4.1%)
`2.4%
` (2.6%)
`3.4%
`
`(76,755)
`
`
`8,103
`
`(4,634)
`
`(610,545)$
`
` (7.6%)
`2.8%
` (0.3%)
` (16.1%)
`
`
`
`Unrestricted
`Restricted:
`Expendable
`Nonexpendable
`Net investment in capital assets
`Total net position
`
`The University’s unrestricted net position increased $182.4 million in fiscal year 2016 primarily due to an
`increase in Temporary Investment Pool (TIP) cash remaining in local banks compared to a decrease of $537.3
`million in fiscal year 2015 due to the implementation of GASB 68 and 71, which was partially offset by fiscal
`year 2015 activity. The University’s restricted expendable net position decreased $38.1 million and $76.8
`million in fiscal years 2016 and 2015, respectively, due to changes in market values related to endowments
`and the recording of the University’s net pension liability.
`
`Consolidated Statements of Revenues, Expenses and Changes in Net Position
`
`The Consolidated Statements of Revenues, Expenses, and Changes in Net Position present the institution’s
`operating, nonoperating, capital and endowment related financial activity during the year. This statement
`
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`differentiates between operating and nonoperating revenues and expenses, and it displays the net income or
`loss from operations. Operating revenues are those generated by the University’s principal ongoing operations
`such as tuition, sponsored research grants and contracts, and sales and services provided by the University’s
`educational and self-supporting auxiliary units. State appropriations are reported as nonoperating revenues, as
`are gifts and other revenues for which the University does not give equal value in exchange for the resources
`received. Operating revenues were 64 percent and 65 percent of total revenues for fiscal year 2016 and 2015,
`respectively.
`
`
`
`
`
`
`
`
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`
`The University's Operating, Nonoperating and Other Revenue for the years ended June 30, 2016, 2015 and 2014
`(in thousands)
`
`Operating revenues
`Grants and contracts
`Student tuition and fees, net
`Auxiliary enterprises, net
`Educational activities
`Other operating revenue *
`Total operating revenues
`
`Nonoperating revenues
`Federal appropriations
`State appropriations
`Grants, gifts, and other
` nonoperating, net
`Net investment gain
`Total nonoperating revenues
`
`Total other revenues
`Total revenues (noncapital)
`
`2016
`
`2015
`
`2014
`
`Increase (Decrease)
`From 2015 to 2016
`From 2014 to 2015
`Amount
`Percent
`Amount
`Percent
`
`897,685$
`
`
`751,418
`
`414,217
`
`160,984
`83
`
`
`2,224,387
`
`872,420$
`
`
`740,540
`
`399,256
`
`143,339
`99
`
`
`2,155,654
`
`836,819$
`
`
`732,821
`
`376,449
`
`147,134
`137
`
`
`2,093,360
`
`25,265$
`
`
`10,878
`
`14,961
`
`17,645
`
`(16)
`
`68,733
`
`20,367
`
`
`663,705
`
`18,192
`
`
`642,069
`
`19,072
`
`
`614,791
`
`2,175
`
`21,636
`
`
`423,563
`
`
`19,175
`
`1,126,810
`
`395,357
`
`
`85,215
`
`1,140,833
`
`396,147
`
`
`234,407
`
`1,264,417
`
`127,697
`
`
`3,478,894$
`
`94,298
`
`
`3,390,785$
`
`117,438
`
`
`3,475,215$
`
`28,206
`
`(66,040)
`
`
`(14,023)
`
`33,399
`
`
`88,109$
`
`2.9%
`1.5%
`3.7%
`12.3%
` (16.2%)
`3.2%
`
`12.0%
`3.4%
`
`7.1%
` (77.5%)
` (1.2%)
`
`35.4%
`2.6%
`
`35,601$
`
`
`7,719
`
`22,807
`
`(3,795)
`(38)
`
`
`62,294
`
`(880)
`
`
`27,278
`
`(790)
`
`
`(149,192)
`
`(123,584)
`
`(23,140)
`
`
`(84,430)$
`
`4.3%
`1.1%
`6.1%
` (2.6%)
` (27.7%)
`3.0%
`
` (4.6%)
`4.4%
`
` (0.2%)
` (63.6%)
` (9.8%)
`
` (19.7%)
` (2.4%)
`
`
`
`* Total is less than 1 percent - not included in the graph.
`
`Total revenues increased in fiscal year 2016 by $88.1 million primarily due to increases across all revenue
`categories, partially offset by decreases in investment income. Operating revenues increased $68.7 million or
`3.2 percent mainly due to increases in grants and contracts, and auxiliary enterprises. Revenues from sales
`and services of educational activities increased $17.6 million due to timing of normal business activity. In
`addition, the University received a payment in the amount of $3.0 million as a result of the Minnesota
`Depa