Financial Summary
This financial summary presentation covers the FY2021 financial results, federal funding support for higher education, pandemic uncertainties, revenue breakdown, and annual changes in net position. It includes unaudited amounts for discussion purposes only. The content includes images and figures depicting various financial aspects such as operating expenses, income, depreciation, interest expenses, net other non-operating revenues, and changes in the net position.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
Financial Summary Board of Trustees Presentation January 20, 2022
FY2021 Financial Summary Federal Funding Support for Higher Education Bond Ratings Upgrade
Disclaimer All Amounts are Unaudited, Preliminary Financial Results FY2021 Audit is Ongoing For Discussion Purposes Only
FY2021 Financial Summary
Pandemic Uncertainties Safety and Wellness Investments Fiscal Year 2021 Fiscal Year 2021 Careful fiscal Careful fiscal planning and planning and cost controls cost controls Unit-Level Budget Reductions and Cash Rescissions Hospital, Housing, and Auxiliaries - Lost Revenues - Return to Operations Federal Program Support Hybrid and In-class Learning SHIELD Testing Programs Capital Investments 5
FY21 Financial Summary (all figures in thousands of dollars) Including Payments on Behalf Excluding Payments on Behalf Revenues Used to Fund Operations $ 7,261,630 $ 5,368,207 Operating Expenses -6,795,476 - 4,902,053 Income before interest, depreciation, and net non-operating revenues 466,154 466,154 Depreciation -270,124 -270,124 Interest Expense -54,656 -54,656 Net Other Non-Operating Revenues $ 328,964 $ 328,964 Change in Net Position $ 470,338 $ 470,338
Annual Change in Net Position FY21 470 FY20 442 * FY19 378 FY18 638 53 FY17 FY16 -276 FY15 115 FY14 307 -400 -200 0 200 400 600 800 $Millions * includes $205M FY2020 correction in the University's OPEB balances (retiree health benefit) as determined by CMS
FY21 Revenues Private Gifts 4% Investment Income 1% Patient Care 5% Auxiliary Enterprises 5% Tuition and Fees 23% Change from FY19 * Educational Activities 7% Tuition and Fees Sponsored Programs Patient Care (Hospital) State Appropriations Grants, Nonoperating * Educational Activities Auxiliary Enterprises Patient Care Private Gifts Investment Income 3% 11% 8% 5% 121% 8% -33% 12% 32% -52% $5.383 B Grants, Nonoperating 8% Sponsored Programs 19% State Appropriations 12% * Comparisons to FY2019 (pre-pandemic) ** Nonoperating grants include GEER, MAP, Pell, HEERF, and PRF Patient Care (Hospital) 16% Excludes payments on behalf ($1.893 B)
FY21 Expenses Depreciation 5% Student aid 4% Change from FY19* Compensation and benefits Supplies and services Student aid Depreciation 14% 1% 65% 11% $5.173 B Compensation and benefits 58% Supplies and services 33% * Comparisons to FY2019 (pre-pandemic)
Tuition and Fees 1,400 1,234 Tuition and Fees ($millions) 1,193 1,193 1,233 1,168 1,200 1,000 800 600 400 200 0 Trends in Tuition and Financial Aid FY2017 38 366 763 FY2018 29 378 787 Financial Aid FY2019 24 375 795 FY2020 22 393 819 FY2021 21 400 812 SPRINGFIELD CHICAGO URBANA-CHAMPAIGN 250 Financial Aid ($millions) 197 200 171 150 119 118 113 100 50 0 FY2017 4 35 74 FY2018 4 36 79 FY2019 4 35 80 FY2020 5 55 111 FY2021 5 69 123 SPRINGFIELD CHICAGO URBANA-CHAMPAIGN Includes HEERF support: FY 20 $30.2 FY21 $38.8
Higher Education Emergency Relief Fund (HEERF) FY2020 and FY2021 $ millions Total Direct Student Support Institutional Portion * 34.0 66.5 88.7 HEERF I HEERF II HEERF III 31.7 31.7 83.9 65.7 98.1 172.6 Total 147.3 189.2 336.4 * Includes Minority Serving Institution (MSI) payments Does not include the Governor s Emergency Educational Relief Fund (GEER): $9.8M
Uses of Institutional and MSI Funds, FY20 and FY21 $ Millions Lost Revenues, 43.6 $29.5M expended FY20 Faculty & Staff Training, 2.2 Other Uses, 3.9 $74.4M expended in FY21 Distance/Hybrid Learning Hardware & Software, 4.0 $85.3M deferred to FY22 Student Aid, 6.0 $189.2M Institutional + MSI COVID Campus Safety Related, 10.8 Fee and Housing Refunds, 33.3 $103.9M Expended FY20+FY21 MSI -Minority Serving Institution
Federal & State Funding for Hospital & MSP Federal & State Funding for Hospital & MSP Federal Provider Relief Fund (CARES Act) General Distribution for COVID-related expenses and lost revenue: $15.2 million (FY20) High Impact Distribution to hospitals with large volume of COVID inpatients: $17.8 million (FY20) $17.8 million (FY21) Safety-net Distribution to hospitals who care for vulnerable populations: $43.1 million (FY21) Phase 4 General Distribution for COVID-related expenses and lost revenue: $ 1.6 million (FY22) Illinois HFS Provider Stability Fund State allocation of CARES Act funds for distribution to Medicaid providers to help offset COVID-related expenditures Distribution to Hospital in December 2020: $28.3 million (FY21) TOTAL Received from Federal and State sources: $123.8 million 14
Moodys Upgrades Rating from A1 to Aa3
Rating Action: Moody's upgrades University of Illinois' ratings; outlooks stable 08 Dec 2021 Moody's Investors Service has upgraded the following University of Illinois (U of I) ratings; issuer rating to Aa3 from A1; Auxiliary Facilities System Bonds (AFS) to Aa3 from A1; Certificates of Participation (COPS) to Aa3 from A1; Academic Lease Revenue Bonds to Aa3 from A1; South Campus Bonds to A1 from A2; and Health Services Facilities System (HSFS) bonds to A3 from Baa1. Total direct debt outstanding at the end of fiscal 2020 was approximately $1.5 billion. The outlook for University of Illinois is stable. RATINGS RATIONALE The upgrade of University of Illinois' ratings reflects continued favorable operating performance, further balance sheet growth, and strong enrollment despite operating volatility caused by the pandemic. These organic improvements were supplemented by significant federal pandemic support and strong investment returns, leading to material EBIDA accretion and balance sheet improvement with debt remaining relatively modest. The upgrades also reflect the State of Illinois' (Baa2/stable) own improved fiscal and financial position, supporting Moody's expectations of continued steady and on-time operating support to the university, whose dependance upon the state in terms of operating funds is about 30%. .. Source: https://www.moodys.com/research/Moodys-upgrades-University-of-Illinois-ratings-outlooks-stable--PR_907470368
Current U of I System Ratios to Peer Institution Medians Desired Trend Moody's Medians FY2020 Moody's Key Credit Ratios University of Illinois*** Fiscal Year Liquidity Ratios Spendable Cash & Investments to Operating Expenses (x) Total Debt to Operating Revenues (x) 2018 2019 2020 2021 A1 Aa3 Aa2 0.7 0.7 0.7 0.8 0.7 0.7 0.7 0.2 0.2 0.2 0.2 0.6 0.5 0.7 Monthly Days Cash on Hand (days) 171 196 187 181 175 147 164 Leverage Ratios Spendable Cash & Investments to Total Debt (x) 2.9 2.9 3.0 3.6 1.2 1.4 1.2 Annual Debt Service Coverage (x) 6.2 3.1 3.1 3.4 1.9 2.7 2.3 Debt Service to Operating Expenses (%) 2.7 2.9 2.6 2.2 5.4 4.2 4.8 Total Debt-to-Total Capitalization (%) 19.9 18.9 18.3 15.9 31.8 27.7 33.3 Total Debt-to-Cash Flow (x) 1.4 2.8 3.0 2.9 5.8 5.0 4.9 Notes: * The University s FY 2021 ratios are compared to Moody s FY 2020 Medians ** On December 8th, 2021, the Moody s rating agency upgraded the University s AFS rating to Aa3 from A1 . *** These ratios are calculated based on the University of Illinois System FY 2021 draft financial statements, which includes operating and non-operating revenues and expenses of the three universities, the AFS and UI Health system. FY 2017 to 2020 data calculated by Moody s. FY 2021 data calculated by the Office of Capital Financing and actual Moody s results may vary. Quality Increase
Factors Impacting Bond Rating Quantitative Factors QualitativeFactors Revenue Growth Operating Margin Cash Flow Debt Service Coverage Liquidity OverallFinancial Resources Overall Reputation Student Demand Market Position Governance Capital Planning Federal and State Policies Macroeconomic Conditions 18
Three large-scale and unpredictable events in 12 years have required careful financial management 2008 2008- - 2010 2010 2015 2015- - 2017 2017 2020 2020- - 202X 202X State of Illinois State of Illinois Budget Impasse Budget Impasse Exceeded $450 Million Shortfall Budget Reductions and Cash Rescissions Budget and Financial System Enhancements Great Recession Leadership Transitions State Budget Shortfalls $500 million State of Illinois receivables Stewarding Excellence and Cost Reduction Committee Initiatives Furloughs Layoffs Voluntary Retirement Programs Pandemic Pandemic Negative Financial Impact Exceeded $330 Million for Universities and $127 Million for Hospital Voluntary Retirement Programs Federal Support Budget Reductions and Cash Rescissions Accelerate Efficiency and Organizational Effectiveness Initiatives
Comprehensive and Collectives Strategies to Address Budget Challenges Reorganize for Optimal Efficiency and Productivity Manage Cash Strategically Streamline Decision Making Innovate Processes and Services Reduce Redundancies Develop More Robust Budget and Decisions Support Systems Identify Cost and Scale Efficiencies
Thanks to Faculty, Staff, and Students Across the System for their Careful, Comprehensive, and Diligent Efforts to Help Navigate the Impact of the Pandemic.
