FISCAL YEAR 2001

The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with standards established by the Financial Accounting Standards Board (FASB) for external financial reporting by not-for-profit organizations.

FINANCIAL STATEMENT HIGHLIGHTS
Balance Sheet

The balance sheet presents the College's financial position as of August 31, 2001. The College's largest financial asset is its investment portfolio, representing approximately 68% of the College's total assets, with a fair market value of $160 million as of August 31, 2001. The investment portfolio includes $146.7 million relating to the College's endowment, which represent contributions to the College subject to donor-imposed restrictions that such resources be maintained permanently by the College, but permit the College to expend part or all of the income derived therefrom. The endowment is managed to achieve a prudent long-term total return (dividend and interest income and investment gains). The Trustees of the College have adopted a policy designed to preserve the value of the endowment portfolio in real terms (after inflation) and provide a predictable flow of income to support operations. In accordance with the policy, $8.1 million of investment return on the endowment portfolio was used to support operations in fiscal year 2001.

The College's second largest and oldest asset is its physical plant, consisting of land, buildings, furniture and fixtures, and equipment. During fiscal year 2001, the College invested approximately $7.2 million in its physical plant to fund roof repairs and windows, and renovated various classrooms. As of August 31, 2001, the net book value of plant assets was approximately $45.1 million, representing approximately 19 percent of the College's total assets.

The College's liabilities of $41.5 million are substantially less than its assets. As of August 31, 2001, accounts payable and accrued expenses represent the College's most significant liability, at $12.1 million.

In accordance with FASB standards, the net assets of the College are classified as either unrestricted, temporarily restricted or permanently restricted. Unrestricted net assets are not subject to donor-imposed restrictions. At August 31, 2001, the College's unrestricted net assets totaled approximately $137 million. Of this amount, approximately $89 million represents endowment appreciation and funds designated for long-term investment (quasi-endowment funds) by the College's Trustees. Temporarily restricted net assets are subject to donor-imposed restrictions that will be met either by actions of the College or the passage of time. Permanently restricted net assets are subject to donor-imposed restrictions that stipulate that they be maintained permanently by the College, but permit the College to expend part or all of the income derived therefrom. The College's permanently restricted net assets consist of endowment principal cash gifts and pledges.

VIEW BALANCE SHEET

Statement of Changes in Net Assets

The statement of changes in net assets presents the financial results of the College and distinguishes between operating and non-operating activities. Non-operating activities principally include investment return in excess of the expendable amount determined by the College's endowment spending policy; unrestricted bequests; and capital campaign contributions and related expenses.

The College achieved an operating surplus for the seventh consecutive fiscal year. Notwithstanding this, the College's net assets decreased by $17.9 million overall. This decrease is comprised of a decrease in unrestricted non-operating net assets of approximately $29 million, due to a loss on investments resulting from weakened market performance on the endowment portfolio during the fiscal year. The decrease was offset by an increase of $4.3 million from operating activities and a net increase of $6.8 million from changes in temporarily and permanently restricted net assets.

Unrestricted operating revenues totaled approximately $102 million. The College's principal sources of unrestricted operating revenues were student tuition and fees, net of student aid, representing 51 percent of operating revenues, and grants and contracts for research and training programs, representing 22 percent of operating revenues. Investment return, auxiliary activities, government appropriations, and other sources comprise the remaining 27 percent of operating revenues. Operating expenses totaled $98 million; program services expenses, which consist of all expenses other than institutional support, represented 88% of total expenses, at $86.4 million.

VIEW NET ASSETS

Published Tuesday, Aug. 27, 2002