2008-09 Financial Statement Highlights
- During 2008-09 the University's long-term debt decreased to $644 million.
- Principal payments of $39 million were made during the year.
- Ratings were reviewed by Moody's and Standard & Poor's in September 2008 in conjunction with the restructuring of the Series 2003 and 2006 bonds.
- Moody’s Investor Services upgraded the University to an Aa3 rating with a “Stable” outlook.
- The upgrade of the rating from A1 to Aa3 was primarily driven by Moody’s expectation of continued strong trends in operating cash flow, balance sheet growth and a strengthening student market position.
- Standard and Poor’s remained at A+ with a “Stable” outlook.
Moody's Investors Service rating reflects:
- The University’s large diversified enrollment base, with highly reputable graduate programs and continued healthy growth in net tuition per student; continued strengthening of student demand most directly demonstrated by a ramp-up in yield on admitted students.
- Healthy and highly consistent cash flow generated by the University as a whole stemming from strong performance of health system, growing research activities and a rising endowment.
- Large financial resource base which has exhibited continuous growth over the last few years as fundraising and investment returns fueled growth.
- Potential for significant expansion in fundraising success as senior leadership team focuses on investing in development infrastructure.
- Relatively heavy reliance on healthcare operations (64% of total revenue) which has historically been more volatile than other University operating units, although recent performance has been strong and hospitals are leaders in
- Highly competitive environment for students (demonstrated by low matriculation rate of 23%) may place pressure on future tuition flexibility,although recent enrollment trends have been sustained as the University
has lowered its discount rate;
- Capital spending requirements are likely to remain substantial, but opening cash flow and rapid retirement of debt should continue to sustain debt capacity.