UNIVERSITY OF CINCINNATI JUNE 30, 2 008
The following graph illustrates the University’s assets, liabilities and net assets:
(in thousands)
500,0001,000,0001,500,0002,000,0002,500,0003,000,0003,500,000Assets Liabilities Net Assets2008 2007 2006Current Assets
Current assets consist primarily of cash and cash equivalents, short-term investments and receivables. Cash and
cash equivalents and short-term investment balances include both operating cash and capital debt proceeds. In
2008, the level of cash and short-term investments increased by $28 million, primarily a result of the University’s cash
operating policy that was originally implemented in fiscal year 2007. Deposits with bond trustees increased by $4
million; a result of depositing capital interest related to the issuance of debt. These factors contributed in part to an
overall increase of $37 million, or 13%, in total current assets.
Endowment and Other Investments
In 2008 the University’s endowment exceeded $1 billion for the fourth year in a row. According to the National
Association of College and University Business Officers Endowment Study, the value of the endowment ranks in the
top 10% of all US institutions of higher education, both public and private.
The University invests its endowment to maximize total return over the long term with an appropriate level of risk.
The success of this long-term investment strategy is evidenced by strong returns sustained over long periods of time
and the University’s ability, in the face of current challenging markets, to limit losses. Changes in the fair value of the
endowment portfolio will not have a meaningful immediate impact on the portion of investment income available to
support current-year operating expenses because the University makes such distributions pursuant to its spending
rate policy.
The University’s endowment value decrease of $88 million in 2008 is a result of the following:
- Negative investment returns of $60 million in 2008.
- Funding added to existing endowments and the establishment of new endowments of $38 million
- Distributions to beneficiaries and fees of $66 million.
In 2007, investment returns, new funding and distributions were $145 million, $17 million and $72 million,
respectively.
Under its endowment spending policy, the University uses its endowment to support current operations in a way that
generates a predictable stream of support, while at the same time maintaining the purchasing power of endowment
funds adjusted for inflation. The spending policy provides for annual distributions of 5% (temporarily increased to 6%
for 2007 through 2009) of the three-year quarterly moving-average market value of assets in the investment pool.