Download - Exeter Leadership Weekend - Managing the Academy's Finances

PEA LEADERSHIP WEEKEND - 2013

Managing The Academy’s Finances

Justin Merrill, Acting Chief Financial Officer

Tony Downer ‘75, Trustee

PRESENTATION OVERVIEW

• Resources


• Resources

• Trends


• Resources

• Trends

• Guiding Principles


• Resources

• Trends


• Key Trustee Decisions


• Resources

• Trends


• Key Trustee Decisions

• Challenges & Strengths

PEA RESOURCES

• Our People 210 Faculty, 432 Staff

• Our Campus 131 Buildings, 1.5mm Square Feet

670 acres

• Our Endowment $1.08 billion (preliminary 6/30/13)

$50mm in debt

PEA Revenues: FY 2014 - $91.1mm

Endowment Draw52%

Annual Giving & Current Gifts

9%

Net Tuition & Fees31%

Other8%

2013-14 Revenue

PEA Expenses: FY 2014 - $91.0mm

Comp & Benefits57%

Plant & Tech19%

Dept Expenses14%

Other10%

2013-14 Expenses

PEA TRENDS - I

• Tuition FY 2004: $30k, FY 2014: $46k

CAGR – 4.4%

• Endowment 6/30/03: $557.4mm, 6/30/13: $1.08 billion

CAGR – 6.8%

• Financial Aid FY 2004: $8.9mm, FY 2014: $20.3mm

CAGR – 8.6%

Percentage receiving aid: 36% / 47%

PEA TRENDS - II

• Benefits Eligible Headcount FY 2005: 521, FY 2013: 534

CAGR – 0.3%

• Compensation & Benefits FY 2004: $33.9mm, FY 2014: $52.1mm

CAGR – 4.4%

• Plant and Technology FY 2004: $6.8mm, FY 2014: $17.1mm

CAGR – 9.7%

Guiding Principles

• Accessibility, Affordability, Diversity

• A commitment to compensate our faculty and staff

• Manage our financial and our physical resources with a

long-term perspective – Intergenerational Equity

• Plan, spend, and invest conservatively in order to minimize

programmatic and community disruptions

• Budget and manage to an annual break-even outcome

Key Trustee Decisions - I

• Set tuition

Keen sensitivity to affordability/accessibility

Impact on financial aid census

Positioning relative to our peer schools

• Determine compensation increases

Above, below or equal to CPI

Key Trustee Decisions - II

• Set financial aid policies

Families with incomes under $75k free

• Set financial aid census targets

Financial aid largely funded from endowment

with additional support from the Exeter Fund

and current gifts

Key Trustee Decisions - III

• Determine endowment draw

Yale formula

Recent increase in the target spend rate from

4.5% to 5%

Sustainability of endowment value

Key Trustee Decisions - IV

• Allocate surpluses

Plant reserve, technology reserve, faculty

housing, quasi endowment

• Approve new positions

• Ensure high discipline in expense management

• Approve new buildings/new projects/new

initiatives

Deferred maintenance catch-up

Capital Projects Funding Policy

Performing arts center/second turf field/cage

replacement

Our Challenges

• Reduction in projected endowment returns

• Restraining the increase in tuition

• Compensating our people/controlling our costs

• Maintaining our facilities

• Funding initiatives

Our Strengths

• An unmatched endowment – absolute & per pupil

Level of endowed financial aid permits unmatched

accessibility

• Faculty compensation at top of peer group

• A well maintained plant

• A supportive alumni/alumnae base

• An extremely robust and qualified applicant pool

• Sound guiding principles

PEA FINANCIAL CONDITION

• We are extraordinarily fortunate.

• Our community is NEVER

complacent, NEVER satisfied

• Driven to do more

• Determined to be the best