Budget and Finance

UNIVERSITY OF CINCINNATI JUNE 30, 2 008

Statement of Revenues, Expenses and Changes in Net Assets Highlights:

The University’s aggressive efforts related to improving operations were responsible for a $29 million increase in
operating revenues, primarily from student tuition and fees. Additionally, operating costs were contained to a minimal
increase of $4 million. Non-operating revenues increased in general with the exception of the adjustment for the fair
value of investments. The fair value of investments decreased by $97 million during 2008 compared to an increase
of $167 million in 2007. Overall, the University’s net assets decreased in 2008 by $43 million which was attributable
to the loss on the fair value of investments.

Continuous financial improvements have been achieved and are evidenced by comparing certain 2008, 2007, and
2006 financial results. This analysis excludes financing activities, loss on disposal of assets, and certain other non-
operating expenses. The result of the analysis is an improvement in 2008 of $44 million and $42 million in 2007.

(in thousands) 2008 2007 2006

Operating revenues

598,542

569,806

535,040

Operating expenses

(933,041)

(926,900)

(928,705)

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

Total

(56,742)

(100,380)

(142,565)

One of the University’s greatest strengths is the diverse stream of revenues that supplements its student tuition and
fees, including voluntary private support from individuals, foundations and corporations along with government and
other sponsored programs; state appropriations and investment income. The University has aggressively sought,
and will continue to seek, funding from all possible sources consistent with its mission to supplement student tuition,
and will prudently manage the financial resources realized from these efforts to fund its operating activities.

Operating

• Operating revenues increased by $29 million in 2008, compared to $35 million in 2007, primarily from
  increased tuition revenue, grants and contracts, sales and services of educational departments, and
  auxiliary enterprises.


• Tuition is the primary source of funding for the University. For 2008, the State legislated a cap in Ohio
  residential tuition; Ohio graduate and non-Ohio resident tuition was not capped. Tuition and fees for the
  2007-2008 academic year ranged from $4,542 to $28,473 for Ohio residents and from $11,394 to $49,653
  for out-of-state residents. Given the tuition cap, the increase in tuition revenues was driven mainly by
  enrollment increases, which ranged from 3% to 2% in 2008 and 2007, respectively.


• Sales and services of educational departments revenue increased by $7 million in 2008, compared to a $3
  million increase in 2007.


• Revenue from auxiliary enterprises increased by $5 million in 2008 and $3 million in 2007.


• Operating expenses in total were contained to an increase of $6 million in 2008, compared to a reduction of
  $2 million in 2007. The increase in 2008 was mainly attributable to an increase in research activity
  expenditures.