Budget and Finance

UNIVERSITY OF CINCINNATI JUNE 30, 2 008

Medicine’s $24 million Millennium Plan deficit through a $15 million transfer from an expendable endowment fund and
a $9 million transfer from a quasi-endowment fund, both of which were established for the benefit of the College of
Medicine. The Millennium Plan, initially established to increase the University’s research initiatives and facilitate
strategic faculty new hires in the College of Medicine, was dissolved due to a lack of state and federal funding. The
research growth plan is now addressed through the Medical College’s annual budget and planning process.

The University’s endowment spending policy distribution has also been temporarily increased from 5% to 6% for 2007
and 2008 to address the deficit in unrestricted new assets. Additionally, the deficit will continue to be addressed
through budget cuts and multi-year funding using a combination of departmental and central budget sources to
resolve these fund deficits over time.

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

The statement of revenues, expenses and changes in net assets presents the University’s results of operations. In
accordance with GASB reporting standards, revenues and expenses are classified as either operating or non-
operating. A summarized comparison as of June 30 for years 2008, 2007 and 2006 follows:

(in thousands) 2008 2007 2006

Operating revenue:

Student tuition and fees, net $ 272,910 $ 260,605 $ 230,778

Grants and contracts 172, 338 167,866 168,574

Auxiliary enterprises, net 82,415 77,039 73,815

Other 70,879 64,296 61,873

Total operating revenues 598,542 569,806 535,040

Operating expenses:

Instruction 283,503 285,671 281,857

Research 157,843 153,247 144,764

Auxiliary enterprises 78,163 77,509 80,397

Depreciation 87,765 87,360 79,096

Other 325,767 323,113 342,591

Total operating expenses 933,041 926,900 928,705

Operating loss (334,499) (357,094) (393,665)

Non-operating revenues (expenses):

State appropriations 193,814 185,864 179,857

Federal and state grants (non-exchange) 27,633 24,494 22,092

Gifts 56,310 46,356 49,151

Investment income, net 72,739 60,311 54,443

Increase (decrease) in fair value of investments (96,616) 166,878 130,169

Interest on capital asset related debt (41,264) (40,245) (31,005)

Other non-operating expenses (1,600) (9,892) (6,909)

Total non-operating revenues 211,016 433,766 397,798

Income (loss) before other revenues, expenses,

gains or losses (123,483) 76,672 4,133

Capital appropriations 39,362 8,778 19,344

Capital grants and gifts 1,228 2,675 7,587

Additions to permanent endowments 37,668 16,966 13,414

Increase (decrease) in net assets $ (45,225) $ 105,091 $ 44,478