independent auditors' report · independent auditors’ report on internal control over...

INDEPENDENT AUDITORS' REPORT The Administrators of the Tulane Educational Fund Tulane University New Orleans, Louisiana We have audited the accompanying statements of financial position of Tulane University (the “University”) as of June 30, 2012 and 2011, and the related statements of activities and cash flows for the years then ended. These financial statements are the responsibility of the management of the University. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the University’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Tulane University as of June 30, 2012 and 2011, the changes in its net assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. As disclosed in Note 17 to the financial statements, the University’s operations continue to be significantly impacted by the effects of Hurricane Katrina in fiscal 2012 and 2011. In accordance with Government Auditing Standards, we have also issued our report dated November 9, 2012 on our consideration of the University’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Our audits were conducted for the purpose of forming an opinion on the financial statements of the University, taken as a whole. The accompanying schedule of expenditures of federal awards is presented for the purpose of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non Profit Organizations, and is not a required part of the

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financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditure of federal awards is fairly stated in all material respects in relation to the financial statements as a whole.

November 9, 2012

Tulane University Schedule of Expenditures of Federal Awards for the Year Ended June 30, 2012, and Independent Auditors’ Reports

TULANE UNIVERSITY

TABLE OF CONTENTS

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INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 1–2

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 AND ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3–5

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 6–24

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 25–27

SCHEDULE OF FINDINGS AND QUESTIONED COSTS 28–34

STATUS OF PRIOR-YEAR AUDIT FINDINGS 35

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of Administrators of Tulane University New Orleans, Louisiana

We have audited the financial statements of Tulane University (the “University”) as of and for the year ended June 30, 2012, and have issued our report thereon dated November 9, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control over Financial Reporting

Management of the University is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the University’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the University’s internal control over financial reporting. Accordingly, we do not express an opinion on the University’s internal control over financial reporting.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency or a combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis.

Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined previously. Compliance and Other Matters

As part of obtaining reasonable assurance about whether the University’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The

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results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we reported to management of the University in a separate letter dated November 9, 2012.

This report is intended solely for the information and use of the Board of Trustees, Audit Committee, management, others within the University, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

November 9, 2012

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 AND ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

To the Board of Administrators of Tulane University New Orleans, Louisiana

Compliance

We have audited Tulane University’s (the “University”) compliance with the types of compliance requirements described in the OMB’s Circular A-133 Compliance Supplement that could have a direct and material effect on each of the University’s major federal programs for the year ended June 30, 2012. The University’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the University’s management. Our responsibility is to express an opinion on the University’s compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the University’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the University’s compliance with those requirements.

In our opinion, the University complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2012. However, the results of our auditing procedures disclosed instances of noncompliance with those requirements, which are required to be reported in accordance with OMB Circular A-133 and which are described in the accompanying schedule of findings and questioned costs as items 2012-1, 2012-2, and 2012-3.

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Internal Control over Compliance

Management of the University is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the University’s internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the University’s internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, we identified certain deficiencies in internal control over compliance that we consider to be significant deficiencies as described in the accompanying schedule of findings and questioned costs as items 2012-1, 2012-2, and 2012-3. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. The University’s response to the findings identified in our audit is described in the accompanying schedule of findings and questioned costs. We did not audit the University’s response and, accordingly, we express no opinion on the response. Schedule of Expenditures of Federal Awards

We have audited the financial statements of the University as of and for the year ended June 30, 2012, and have issued our report thereon dated November 9, 2012, which contained an unqualified opinion on those financial statements. Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the financial statements as a whole.

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This report is intended solely for the information and use of the Board of Trustees, Audit Committee, management, others within the University, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

November 9, 2012

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TULANE UNIVERSITY

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFOR THE YEAR ENDED JUNE 30, 2012

Contract/ FederalDescription (pass-through grant number) CFDA Number Expenditures

RESEARCH AND DEVELOPMENT — Cluster: Department of Health and Human Services: Center for Disease Control and Prevention 93.061 43,068$ Center for Disease Control and Prevention 93.067 (45,596) Center for Disease Control and Prevention 93.135 1,212,519 Center for Disease Control and Prevention 93.262 308,287 Passed through Boat People SOS, Inc. (1U50DP001698) 93.283 11,668 Passed through Boat People SOS, Inc. (5U50DP001698-04) 93.283 22,982 Passed through Louisiana Office of Public Health (056708/704275) 93.994 2,008 Passed through University of Alabama at Birmingham (305851) 93.541 6,170 Passed through University of Mississippi Medical Center (66681010812-04-ATEF) 93.137 75,943 Passed through University of Mississippi Medical Center (68121-ATEF-01) 93.137 (109) Passed through University of Mississippi Medical Center (68121-ATEF-02-001) 93.137 114,398 Center for Disease Control and Prevention 93.RD (614) DHHS — Health Resources and Services Administration — Passed through City of New Orleans (K11-430) 93.914 77,436 DHHS — Health Resources and Services Administration — Passed through Emory University (S300344) 93.110 127,515 DHHS — Health Resources and Services Administration — Passed through Emory University (S856343) 93.110 9,075 DHHS — Health Resources and Services Administration — Passed through Program for Appropriate Technology (DHH.1542-05307-CRT) 93.RD 131,171 DHHS — Health Resources and Services Administration — Passed through Roomers, Inc. (003276) 93.RD 1 DHHS — Office of Public Service 93.297 605,237 DHHS — Substance Abuse & Mental Health Serv Adm — Passed through The Regents of the University of California, San Francisco (5738sc) 93.243 85,184 DHHS — US Food and Drug Administration 93.103 168,885 NIH — National Center on Minority Health and Health Disparities — Passed through University of Texas MD Anderson (32695/98213847) — ARRA 93.701 63,167

(Continued)

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TULANE UNIVERSITY



RESEARCH AND DEVELOPMENT — Cluster: Department of Health and Human Services: NIH — National Institute of Biomedical Imaging & Bioengineering 93.286 239,087$ NIH — National Institute of Nursing Research — Passed through Louisiana State University Health Science Center (30759) 93.361 12,687 NIH — National Institute of Nursing Research — Passed through University of Miami (6-6749R-3712) 93.361 3,516 NIH — National Cancer Institute 93.393 2,479,950 NIH — National Cancer Institute 93.395 373,560 NIH — National Cancer Institute 93.396 1,576,527 NIH — National Cancer Institute 93.398 10,070 NIH — National Cancer Institute — ARRA 93.701 48,932 Passed through Dana Farber Cancer Institute (1123315) 93.395 7,618 Passed through Health Research, Inc. (55-0917-03) 93.393 6,744 Passed through Louisiana State University Health Science Center (09-91-047) 93.070 8,103 Passed through Louisiana State University Health Science Center (SPH-E12S-BG-149) 93.393 11,720 Passed through Louisiana State University Health Science Center (09-91-047) — ARRA 93.701 (17) Passed through Louisiana State University Health Science Center (09-91-047-A2) — ARRA 93.701 16,835 Passed through Louisiana State University Health Science Center (11-91-023) — ARRA 93.701 25,089 Passed through National Childhood Cancer Foundation (98543-1195) 93.399 19,493 Passed through SAIC — Frederick, Inc. (HHSN2612008000001E/S12-337) 93.RD 215,154 Passed through University of Oklahoma Health Science Center (27469-083) 93.395 1,523 NIH — National Center for Complimentary and Alternative Medicine 93.213 278,435 NIH — National Center for Research Resources 93.306 (2,788) NIH — National Center for Research Resources 93.389 15,726,108

(Continued)

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TULANE UNIVERSITY



RESEARCH AND DEVELOPMENT — Cluster: Department of Health and Human Services: NIH — National Center for Research Resources — ARRA 93.701 708,792$ Passed through Louisiana State University (51374) 93.389 23,967 Passed through Louisiana State University Health Science Center (27312) 93.389 153,230 Passed through Louisiana State University Health Science Center (12-91-006) 93.389 196,412 Passed through Louisiana State University Health Science Center (2P2RR018766-08) 93.389 1,911 Passed through Louisiana State University Health Science Center (5P0RR021970-07) 93.389 17,143 Passed through Louisiana State University Health Science Center (5P20RR020159-08/44827) 93.389 940,951 Passed through Louisiana State University Health Science Center (P20RR018766) 93.389 250,763 Passed through Louisiana State University Health Science Center (P20RR021970) 93.389 16,819 Passed through Texas A&M Research Foundation (S110089) 93.389 174,050 NIH — National Heart, Lung, Blood Institute 93.837 4,599,014 NIH — National Heart, Lung, Blood Institute 93.838 972,346 NIH — National Heart, Lung, Blood Institute 93.839 117,243 NIH — National Heart, Lung, Blood Institute — ARRA 93.701 310,826 Passed through Case Western Reserve University (HHSN268200900049C) 93.RD 460 Passed through Case Western Reserve University (HHSN268200900049C) — ARRA 93.701 79,260 Passed through Children’s Hospital (SC280158TUL) 93.837 108,040 Passed through Duke University (2055 Protocol # 01) 93.838 126,269 Passed through Emory University (S607589) 93.837 55 Passed through Institute for Clinical Effective (HHSN268200900029C) 93.RD 69,106 Passed through Johns Hopkins University (1 R01 HL106786-01/20010890) 93.838 96,857 Passed through Johns Hopkins University (1 R01 HL106786-02/200108903) 93.838 139,531 Passed through Louisiana State University Health Science Center (149200695A) 93.RD (453)

(Continued)

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TULANE UNIVERSITY



RESEARCH AND DEVELOPMENT — Cluster: Department of Health and Human Services: Passed through Louisiana State University Health Science Center (N01-HR-56172) 93.RD (1)$ Passed through Sepulveda Research Corporation (H-TU-2/1RC2HL101851-02) — ARRA 93.701 12,737 Passed through The Research Foundation of State University of New York (R01HL070227-01/R740226) 93.839 70,534 Passed through University of Arkansas for Medical Sciences (36947) 93.837 42,340 Passed through University of Pennsylvania (HHSN268200800003C) 93.RD 33,701 Passed through University of Texas Health Science Center (0007257A/1R01HL089472-02) — ARRA 93.701 24,173 Passed through University of Virginia (GC11976-135620) 93.837 33,009 Passed through Wake Forest University (N01-HC-95182) 93.847 22,019 Passed through Wake Forest University (HHSN268200900040C) 93.RD 69,029 Passed through Wake Forest University (WFUHS 33001) 93.RD 38,057 NIH — National Institute of Dental & Craniofacial Research 93.121 878,229 NIH — National Institute of Dental & Craniofacial Research — ARRA 93.701 659 NIH — National Institute of General Medical Sciences 93.859 1,067,404 Passed through Louisiana State University and A&M College (61561) 93.859 95,920 Passed through Louisiana State University Health (8P20GM103458-09) 93.RD 92,490 NIH — National Institute of Mental Health 93.242 1,002,610 NIH — National Institute of Mental Health — ARRA 93.701 358,816 Passed through Children’s Hospital Boston (88420) 93.242 35,550 Passed through The Regents of the University of California — San Francisco (10306763) 93.242 31,592 Passed through University of Connecticut Health (2337302) 93.242 23,043 NIH — National Institute on Aging 93.866 1,776,530 Passed through Alton Ochsner Medical Foundation (1R01AG022536-04S1) 93.866 309 Passed through University of Colorado Health Science Center (5P01AG032958-02/FY09.177.001) 93.866 91,334 NIH — National Institute on Alcohol Abuse and Alcoholism — Passed through Louisiana State University Health Science Center (149200952J) 93.891 21,565

(Continued)

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TULANE UNIVERSITY



RESEARCH AND DEVELOPMENT — Cluster: Department of Health and Human Services: NIH — National Institute on Alcohol Abuse and Alcoholism — Passed through Louisiana State University Health Science Center (P60AA009803/09-64-902) 93.891 849,012$ NIH — National Institute on Alcohol Abuse and Alcoholism — Passed through Regents of the University of California, Davis (08-001380-01) 93.273 (1,182) NIH — National Institute on Drug Abuse 93.279 378,797 NIH — National Institute on Drug Abuse — ARRA 93.701 4,428 Passed through The Medical College of Wisconsin (1) 93.279 6,731 NIH — National Institute of Allergy and Infectious Disease 93.855 7,959,246 NIH — National Institute of Allergy and Infectious Disease — ARRA 93.701 390,632 NIH — National Institute of Allergy and Infectious Disease 93.RD 3,506,825 Passed through Autoimmune Technologies, LLC (AUTOIMM 001-09/12) 93.855 702,874 Passed through Baylor Research Institute (3U19AI057234-06S2) — ARRA 93.701 607,452 Passed through Baylor Research Institute (3U19AI057234-06S3) — ARRA 93.701 415,379 Passed through Biohelix Corp (1R43AI088787-01) 93.855 582 Passed through Biohelix Corp (5R43AI088787-02) 93.855 (514) Passed through Case Western Reserve University (1R01AI084816-01/RES505393) 93.855 62,954 Passed through Case Western Reserve University (1R01AI084816-03/RES505393) 93.855 181,425 Passed through Case Western Reserve University (U19AI076981-03/RES505210) 93.855 161,625 Passed through Case Western Reserve University (3U19AI076981-03S1/RES50519) — ARRA 93.701 118,257 Passed through Children's Hospital (SC278658TUL2) 93.855 20,095 Passed through Corgenix Medical Corporation (CONXFILO 002-11/12) 93.855 5,406 Passed through Duke University (2030859) 93.855 217,344 Passed through Duke University (3035885) 93.855 9,569 Passed through Duke University (303-1071) 93.855 (6,347) Passed through Duke University (5U19AI067854-06/2030888) 93.855 72,596 Passed through Duke University (5U19AI067854-06/3035886) 93.855 10,108

(Continued)

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TULANE UNIVERSITY



Passed through Duke University (5U19AI067854-07/2030839) 93.855 135,009$ Passed through Fred Hutchinson Cancer Research (5UM1AI068618-06/000071893) 93.855 27,496 Passed through Immune Disease Institute (IDI) (5U19AI070302-04) 93.855 (2,761) Passed through Institute for Clinical Research (M07-LO-007-0704-01) 93.855 (11,870) Passed through Integral Molecular, Inc (HHSN272200900055C) 93.RD 70,803 Passed through Integrated Biotherapeutics, Inc (1U01AI078023-01) 93.RD 68,906 Passed through Louisiana State University Health Science Center (5R01DA030053-03/PO#003691) 93.279 62,012 Passed through Louisiana State University Health Science Center (1R01DA030053-02) 93.855 147,232 Passed through Lovelace Respiratory Research Institute (HHS2662004000951/N01-AI-400) 93.RD (6,103) Passed through Mapp Biopharmaceutical, Inc. (7015-03/1U01AI082276-01) 93.856 100,005 Passed through Mapp Biopharmaceutical, Inc. (7012-01) 93.RD 33 Passed through Molecular Express, Inc. (ME-090109-01) 93.855 76,195 Passed through Nanotherapeutics, Inc. (HHSN272200900015C/COA 2) 93.RD 126,868 Passed through New York University School of Medicine (03-0857/5R21AI059476-02) 93.855 50 Passed through Northwestern University (5R01AI094595-02/60029730 TU) 93.855 338,213 Passed through Planet Biotechnology Inc. (5R44AI053005-07) 93.RD 77,061 Passed through Population Council (1 U19 AI065412 /SC07104/SC0) 93.855 74,273 Passed through Population Council (SC0721/R37AI040877) 93.855 302,466 Passed through Population Council (SH1119/5R01AI084133) 93.RD 88,074 Passed through Population Council (SH1202) 93.RD 11,253 Passed through Seattle Biomedical Research Institute (TU-16022) 93.855 162,349 Passed through The Aaron Diamond AIDS Research Center (1R01AI084765-03/381-300) 93.855 413,026 Passed through The Aaron Diamond AIDS Research Center (5R01AI069991-04/372-400) 93.855 77,654

(Continued)

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TULANE UNIVERSITY



Passed through The Broad Institute (6220070-5500000341) 93.RD 828,890$ Passed through The Broad Institute (6220072-5500000452) 93.RD 71,901 Passed through The George Washington University (R01AI071778/06-M33/27736-1) 93.855 8,779 Passed through The Regents of the University of California — San Francisco (3995sc) 93.855 15,987 Passed through The Scripps Research Institute (5-24240) 93.855 96,481 Passed through The Scripps Research Institute (AI076005-05/5-24359) 93.855 121,517 Passed through The Scripps Research Institute (5-24258) 93.855 146,138 Passed through The Scripps Research Institute (4R33AI079782-03/5-24370) 93.855 236,084 Passed through Thomas Jefferson University (5P01AI082325-02/08003000QD0) — ARRA 93.701 51,456 Passed through University of Alabama at Birmingham (N01-A1-30025) 93.855 1,890 Passed through University of Medicine and Dentistry of New Jersey — NJMS (191675T) 93.855 342,599 Passed through University of Pennsylvania (1P01AI071739-04/547986) 93.855 22 Passed through University of Pennsylvania (2R01AI-074362-04/557107) 93.855 536,331 Passed through University of Pennsylvania (549979/2430103) 93.855 502 Passed through University of Pennsylvania (5R01AI074362-05) 93.855 46,783 Passed through University of Pennsylvania (P01AI071739) 93.855 302,914 Passed through University of Pennsylvania (5P30AI045008-12/553058) 93.856 14,085 Passed through University of Pennsylvania (5P30AI045008-13/553058) 93.856 228,511 Passed through University of Pittsburgh (5U19AI082623-02/9006374) 93.855 75,915 Passed through University of Pittsburgh (1U19AI082623-02/0010712) 93.855 128,300 Passed through University of Pittsburgh (5U19AI082623-03/0010712) 93.855 314,574 Passed through University of Puerto Rico Medical Science Campus (1R01AI084142-01) 93.855 1,137 Passed through University of Texas Health Science Center (5R21AI059048-07/00059) 93.856 2,603

(Continued)

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TULANE UNIVERSITY



Passed through University of Texas Health Science Center (5R01AI059048-08/0005957A) 93.856 108,722$ Passed through University of Texas Medical Branch (10-066) 93.855 (13) Passed through University of Texas Medical Branch (2U54AI057156-09/12-060) 93.855 102,336 Passed through University of Texas Medical Branch (5U54AI057156) 93.855 3,389 Passed through University of Texas Medical Branch (5U54AI057156/12-043) 93.855 88,195 Passed through University of Texas Medical Branch (5U54AI057156-08/11-043) 93.855 154,577 Passed through University of Texas Medical Branch (5U54AI057156-08/11-054) 93.855 232,139 Passed through University of Texas Medical Branch (5U54AI057156-08/11-059) 93.855 207,732 Passed through University of Texas Medical Branch (5U54AI057156-09/12-054) 93.855 56,505 Passed through University of Texas Medical Branch (5U54AI057156-09/12-057) 93.855 31,150 Passed through University of Wisconsin — Madison (X539136) 93.855 197,686 Passed through Weill Medical College of Cornell University (5U19AI076982-03/07091037) 93.855 4,357 Passed through Weill Medical College of Cornell University (5U19AI076982-04/12010113) 93.855 651,439 Passed through Westat, Inc. (N01HD-3-3345) 93.RD 8,141 Passed through Yale University (2R56AI45510-12/M12A11213(A0856)) 93.855 320,938 Passed through Yale University (A07201(M09A10037)) 93.855 33,823 NIH — National Institute of Arthritis & Musculoskeletal 93.846 2,961,051 NIH — National Institute of Child Health & Human Development 93.864 196,885 NIH — National Institute of Child Health & Human Development 93.865 2,466,283 NIH — National Institute of Child Health & Human Development — ARRA 93.701 548,161 NIH — National Institute of Child Health & Human Development 93.RD 3,005,640 Passed through Duke University (NICHD-2005-18) 93.865 2,648

(Continued)

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TULANE UNIVERSITY



Passed through Gilead Sciences, Inc. (CO-US-104-0402 PO#11074877) 93.865 35,417$ Passed through Harvard University (114074.0634) 93.865 30,321 Passed through Harvard University (114074.0636) 93.865 24,030 Passed through Harvard University (114074.0734.AMP) 93.865 725 Passed through Harvard University (114074.0734.OH) 93.865 203,289 Passed through Harvard University (114074.0736.SMARTT) 93.865 277,288 Passed through Harvard University (114050.0007) — ARRA 93.701 7,106 Passed through Harvard University (114050.0022) — ARRA 93.701 8,770 Passed through University of Alabama at Birmingham (000249533-049) 93.865 3,555 Passed through University of Miami (6-6623C-3712) — ARRA 93.701 745 Passed through University of Pennsylvania (548974/HD053781-04/2616326) 93.865 28,486 Passed through Westat, Inc. (8771-S10) — ARRA 93.701 153,632 Passed through Westat, Inc. (7887-S020) 93.RD 103,748 Passed through Westat, Inc. (8530-S025) 93.RD 707,067 NIH — National Institute of Diabetes, Digestive & Kidney Disease 93.847 1,600,068 NIH — National Institute of Diabetes, Digestive & Kidney Disease 93.848 300,697 NIH — National Institute of Diabetes, Digestive & Kidney Disease 93.849 1,119,326 NIH — National Institute of Diabetes, Digestive & Kidney Disease — ARRA 93.701 95,484 Passed through Joslin Diabetes Center, Inc (1U01DK074556-01) 93.847 29,496 Passed through Joslin Diabetes Center, Inc (2-12-790-05) 93.847 62,428 Passed through Kaiser Foundation Research Institute (8354) 93.847 16,606 Passed through LSU — Pennington Biomedical Research Center (1R01DK087092-S01) 93.RD 7,476 Passed through Northern California Institute for Research & Education (YAF1637-06/081785) 93.847 10,773 Passed through The Regents of the University of California — San Francisco (4609sc) 93.849 1,679 Passed through University of Cincinnati (7801) 93.847 26,715 Passed through University of Pennsylvania (550844/2610366) 93.847 32,830 Passed through University of Pennsylvania (555805/2738981) 93.847 57,758 Passed through Wake Forest University (WFUHS/TU12360) 93.847 84

(Continued)

- 15 -

TULANE UNIVERSITY



NIH — National Institute of Environmental Health Sciences 93.113 2,094,354$ Passed through Baylor College of Medicine (101457722) 93.226 1,863 Passed through Constella Group, Inc. (016.05069/16084) 93.RD 16,270 Passed through University of Louisville Research Foundation, Inc. (OGMB100858) 93.113 6,985 Passed through University of Louisville Research Foundation, Inc. (OGMB110272) 93.113 23,603 NIH — National Institute of Neurological Disorders & Stroke 93.853 615,146 NIH — National Institute of Neurological Disorders & Stroke — ARRA 93.701 71,888 Passed through The Scripps Research Institute (7R01NS052301-04/PO#5-2015) 93.853 (257) NIH-National Library of Medicine — ARRA 93.701 112,285 Passed through South Carolina Research Foundation (24777) 93.879 33,812 Passed through University of New Orleans (08-197-S1) — ARRA 93.701 467 Agency for Healthcare Research and Quality — Passed through The Leapfrog Group (2U18HS013690-03) 93.226 (7,094)

Total Department of Health and Human Services 79,882,624

Department of Energy: US Department of Energy 81.049 1,481,210 Passed through Los Alamos National Laboratory (162787-1) 81.RD 81,880 Passed through Nicholls State University (A901885) 81.086 142,702 Sandia National Laboratories 81.RD 8,442

Total Department of Energy 1,714,234

National Science Foundation: National Science Foundation 47.041 584,436 National Science Foundation 47.049 1,202,423 National Science Foundation 47.050 496,795 National Science Foundation 47.074 1,457,565 National Science Foundation 47.075 144,935 National Science Foundation 47.076 112,685 National Science Foundation 47.079 90,819 National Science Foundation — ARRA 47.082 1,424,066 Passed through Baton Rouge Area Foundation (PHY-091787) 47.049 21,408 Passed through Columbia University (1 (Acct. #5-24914)) 47.041 8,277 Passed through Duke University (08-SC-NSF-1027) 47.049 (1,226) Passed through Indiana University (BCS-1127410/BL-4842960-TU) 47.075 24,441

(Continued)

- 16 -

TULANE UNIVERSITY



Passed through Louisiana Board of Regents (LEQSF(2011)-PFUND-261) 47.081 10,000$ Passed through Louisiana Board of Regents (LEQSF(2011)-PFUND-262) 47.081 8,200 Passed through Louisiana Board of Regents (LEQSF(2011)-PFUND-263) 47.081 10,000 Passed through Louisiana Board of Regents (LEQSF-EPS(2012)-OPT-IN-10) 47.081 22,765 Passed through Louisiana Board of Regents (LEQSF-EPS(2012)-OPT-IN-11) 47.081 4,223 Passed through Louisiana Board of Regents (LEQSF-EPS(2012)-PFUND-292) 47.081 8,241 Passed through Louisiana Board of Regents (LEQSF-EPS(2012)-PFUND-293) 47.081 5,392 Passed through Louisiana Board of Regents (LEQSF-EPS(2012)-PFUND-295) 47.081 1,577 Passed through Louisiana Board of Regents (LEQSF-EPS(2012)-SURE-64) 47.081 963 Passed through Louisiana Board of Regents (NSF(2010-15)-RII-Tulane) 47.081 471,492 Passed through Louisiana Board of Regents (NSF(2011)-LINK-58) 47.081 4,587 Passed through Louisiana Board of Regents (NSF(2011)-SURE-21) 47.081 5,000 Passed through Louisiana Board of Regents (NSF(2011)-SURE-22) 47.081 4,344 Passed through Louisiana Board of Regents (NSF/LEQSF(2007-10)-CyberRII-05) 47.081 (415) Passed through Louisiana Museum Foundation (TUL-145-02/03) 47.076 10,517 Passed through Louisiana State University and A&M College (EPS-1047309) 47.081 60,293 Passed through Louisiana State University Health Science Center (23484) 47.080 (906) Passed through Michigan State University (61-2518TU) 47.074 4,842 Passed through University of Louisiana at Monroe (SAS001-TU/P0006201) 47.074 2,100

(Continued)

- 17 -

TULANE UNIVERSITY



Passed through University of Louisiana at Monroe (SAS001-TU-00) 47.074 2,969$

Total National Science Foundation 6,202,808

Department of State — Agency for International Development: US Agency for International Development — Passed through Abt Associates Inc. (18502) 98.RD 456,642 US Agency for International Development — Passed through Academy for Educational Development (RLA-C-00-05-00064-00/356-00) 98.RD 82,637 US Agency for International Development — Passed through Helen Keller International (HKI-Tulane No. 001) 98.RD (2,493) US Agency for International Development — Passed through IntraHealth International, Inc. (623-A-00-05-00020-00) 98.RD (116) US Agency for International Development — Passed through John Snow, Inc. — JSI (13062-02/GHS-I-03-07-00002-00) 98.RD 286,065 US Agency for International Development — Passed through Johns Hopkins University (TU-GC-01) 98.001 (11,339) US Agency for International Development — Passed through Johns Hopkins University (GHH-1-00-07-00032-00) 98.RD 402,663 US Agency for International Development — Passed through Johns Hopkins University (GPH-A-00-02-00008-00) 98.RD 11,339 US Agency for International Development — Passed through Macro International, Inc. (31548-8S-1202/TUL-HSC-146-08/0) 98.RD 795 US Agency for International Development — Passed through Macro International, Inc. (31548-10S-1513/623-C-00-08-000) 98.RD 4,077 US Agency for International Development — Passed through Medical Care Development Intern (GHS-005) 98.RD 37,151 US Agency for International Development — Passed through Population Council (SH0905) 98.RD 388,918 US Agency for International Development — Passed through Population Council (B06.120XA/SHO620) 98.RD 1,302,217 US Agency for International Development — Passed through Public Health Institute (1011789) 98.RD 95,406 US Agency for International Development — Passed through Social Sectors Development Strategies, Inc. (USAID-2-2-LOA-TUL-1/GHH-I-00-0) 98.RD 160,013 US Agency for International Development — Passed through UNICEF (RFPS-USA-2011-501108) 98.RD 40,558

(Continued)

- 18 -

TULANE UNIVERSITY



US Agency for International Development — Passed through University of North Carolina, Chapel Hill (5-36554/GHA-A-00-08-00003-00) 98.RD 860,222$ US Agency for International Development — Passed through University of North Carolina, Chapel Hill (5-36604/GPO-A-00-08-00003-00) 98.RD 658,984 US Agency for International Development — Passed through University of North Carolina, Chapel Hill (5-36610/GPO-A-00-09-00003-00) 98.RD 78,115

Total Department of State — Agency for International Development 4,851,854

Department of Navy — Office of Naval Research & Development: US Office of Naval Research 12.300 954,329 US Office of Naval Research 12.910 54,752

Total Department of Navy — Office of Naval Research & Development 1,009,081

Other: NASA: NASA-John C. Stennis 43.001 97,085 NASA Headquarters — Passed through Louisiana State University (53680) 43.RD (1,042) NASA Headquarters — Passed through University of Maryland (Z658003) 43.RD 104,416

Total NASA 200,459

National Oceanic and Atmospheric Administration: National Oceanic and Atmospheric Administration — Passed through Louisiana State University (54237) 11.417 7,010 National Oceanic and Atmospheric Administration — Passed through Louisiana State University (48128) 11.RD (2,873) National Oceanic and Atmospheric Administration — Passed through Louisiana State University (59062) 11.RD 27,302 National Oceanic and Atmospheric Administration — Passed through RAND (9920100060) 11.431 (1)

Total National Oceanic and Atmospheric Administration 31,438

National Park Service 15.RD 533 National Security Agency 12.901 26,629 Regional Procurement Support Office 12.RD 192,408 US Air Force 12.630 149,443 US Army Corps of Engineers 12.RD 396,780

(Continued)

- 19 -

TULANE UNIVERSITY



US Army Medical Research: US Army Medical Research 12.420 1,750,247$ Passed through Antek Inc. (AR-TU-001) 12.420 (181) Passed through Xavier University of Louisiana (OSP-12-211218-001) 12.420 52,028

Total US Army Medical Research 1,802,094

US Army Research Center 12.431 1,684,422 US Department of Agriculture: US Department of Agriculture 10.001 423,602 US Department of Agriculture 10.256 31,709 US Department of Agriculture 10.664 7,413

Total US Department of Agriculture 462,725

US Department of Defense: US Department of Defense — Passed through AVI BioPharma, Inc. (51490) 12.RD 8,937 US Department of Defense — Passed through AVI BioPharma, Inc. (51635) 12.RD (8,648) US Department of Defense — Passed through AVI BioPharma, Inc. (54303) 12.RD 212,238 US Department of Defense — Passed through AVI BioPharma, Inc. (55735) 12.RD 284,706 US Department of Defense — Passed through Morphotek, Inc. (4300027583/HDTRA1-10-C-00) 12.RD 119,167

Total US Department of Defense 616,400

US Department of Education 84.215K 23,588 Passed through University of New Orleans (23) 84.215 39,612 US Department of Homeland Security — Passed through Jackson State University (634956/HSHQDC-10-D-00037/5-558) 97.061 15,197 US Department of Housing and Urban Development: US Department of Housing and Urban Development 14.RD 382,208 Passed through Louisiana Board of Regents: Passed through Louisiana Board of Regents (RCEEP-04(2007-10)) 14.RD 695,171 Passed through Louisiana Board of Regents (RCEEP-05(2007-10)) 14.RD 315,483 Passed through Louisiana Board of Regents (RCEEP-06(2007-10)) 14.RD 411,294 Passed through Louisiana State University Health Science Center (1102590084D) 14.RD (12,267)

Total US Department of Housing and Urban Development 1,791,889

(Continued)

- 20 -

TULANE UNIVERSITY



US Department of Justice: US Department of Justice — Passed through Pegasus Research Foundation (2009-RS-CX-K015) 16.610 29,714$ US Department of Justice — Passed through Pegasus Research Foundation (RS-CX-K089) 16.RD 16,695

Total US Department of Justice 46,409 US Department of the Interior 15.808 93,214 US Environmental Protection Agency — Passed through University of Texas Medical Branch (11-032) 66.509 3,380 Veterans Administration Medical Center 64.RD 122,620 Total other 7,699,239 TOTAL RESEARCH AND DEVELOPMENT — Cluster 101,359,840$ STUDENT FINANACIAL ASSISTANCE — Cluster: Department of Education: Federal Pell Grant Program 84.063 5,447,626$ Federal Supplement Educational Opportunity Grant Program 84.007 (103,126) Federal Work Study 84.033 2,178,452 Federal Perkins Loan Program 84.038 40,676,293 Federal Direct Loan Program 84.268 126,495,796 Total Department of Education 174,695,041

Department of Health and Human Services: Health Professions Student Loan Program 93.342 2,543,517


TOTAL STUDENT FINANCIAL ASSISTANCE — Cluster 177,238,558$ Department of Housing and Urban Development: US Department of Housing and Urban Development Passed through City of New Orleans (RX-210-2010151-09A / 661158) 14.UNKNOWN 1,425,783$ US Department of Housing and Urban Development Passed through UNITY for the Homeless, Inc. (LA0092B6H031003) 14.235 83,271 US Department of Housing and Urban Development Passed through UNITY for the Homeless, Inc. (LA23032) 14.235 24,678 US Department of Housing and Urban Development Passed through UNITY for the Homeless, Inc. (HPRP-009(09)) 14.257 62,854 Total Department of Housing and Urban Development 1,596,586 Department of Education: US Department of Education 84.015A 190,900 US Department of Education 84.015B 211,726 US Department of Education 84.016A 1,980 US Department of Education 84.022A 100 US Department of Education 84.047A 246,452 US Department of Education 84.116E 10,000 US Department of Education 84.325D 187,721 US Department of Education 84.UNKNOWN 104,742 Passed through Recovery School District (688362) 84.366B 4,574 Passed through University of New Orleans (82) 84.215K 6,431 Total Department of Education 964,626

(Continued)

- 21 -

TULANE UNIVERSITY



Department of Health and Human Services: Center for Disease Control and Prevention 93.067 13,267,600$ Center for Disease Control and Prevention 93.262 29,409 Center for Disease Control and Prevention 93.283 16,683 Passed through Louisiana Office of Public Health (55347/692322) 93.197 909 Passed through Louisiana State University Health Science Center (SPH07-E1010) 93.063 (102) Passed through University of Alabama at Birmingham (000390237-0002) 93.069 240,394 Passed through University of Alabama at Birmingham (000405367-001) 93.991 33,466 Passed through University of Texas Health Science Center (0006981J) 93.110 31,238 Passed through University of Texas Health Science Center (0008966-H) 93.110 2,944 Passed through University of Texas Health Science Center (0005634H) 93.283 9,233 Passed through University of Texas Health Science Center (0008622/8757B) 93.283 15,647 DHHS-Administration for Children and Families — Passed through Louisiana Office of Family Support (647181) 93.575 (4) DHHS-Administration for Children and Families — Passed through Louisiana Office of Family Support (687690) 93.575 2,503,324 DHHS-Administration for Children and Families — Passed through Louisiana Office of Family Support (360-100155; CFMS# 701618) — ARRA 93.708 270,884 DHHS-Centersfor Medicare and Medicaid Services — Passed through Louisiana Bureau of Health Services (GNOCHC) 93.UNKNOWN (71,651) DHHS-Centersfor Medicare and Medicaid Services — Passed through Louisiana Office of the Secretary (659365/667210/677457) 93.UNKNOWN 1,025 DHHS-Centersfor Medicare and Medicaid Services — Passed through Louisiana Public Health Institute (PCASG) 93.779 143,004 DHHS-Health Resources and Services Administration 93.110 376,700 DHHS-Health Resources and Services Administration 93.249 196,354 DHHS-Health Resources and Services Administration 93.510 160,447 DHHS-Health Resources and Services Administration 93.516 461,352 DHHS-Health Resources and Services Administration 93.884 198,029 DHHS-Health Resources and Services Administration 93.918 586,209

(Continued)

- 22 -

TULANE UNIVERSITY



DHHS-Health Resources and Services Administration 93.925 89,919$ DHHS-Health Resources and Services Administration — ARRA 93.404 117,575 Passed through Louisiana Office of Public Health (57633) 93.110 9,785 Passed through Louisiana Office of Public Health (055182) 93.994 240 Passed through Louisiana Office of Public Health (56649) 93.994 103,659 Passed through University of Alabama at Birmingham (000413974-001) 93.516 63,324 NIH-John E. Fogarty International Center 93.865 1,571 NIH-John E. Fogarty International Center 93.989 365,624 NIH-John E. Fogarty International Center — ARRA 93.701 28,589 NIH-National Cancer Institute Passed through American College of Radiology (U10CA21661) 93.UNKNOWN 5,113 NIH-National Center for Research Resources 93.389 453,024 NIH-National Center for Research Resources — ARRA 93.702 405,032 NIH-National Center on Minority Health and Health Disparities 93.307 75,497 NIH-National Center on Minority Health and Health Disparities 93.309 69,531 NIH-National Heart, Lung, Blood Institute 93.837 128,744 NIH-National Heart, Lung, Blood Institute 93.838 112,354 NIH-National Institute of Mental Health 93.281 17,505 NIH-National Institute on Aging 93.866 (5) NIH-National Instof Child Health & Human Development 93.865 688,657 US Department of Health and Human Services — Passed through City of New Orleans (PATHWAYS) 93.UNKNOWN 190,196 US Department of Health and Human Services Passed through Louisiana Public Health Institute (90BC0014-365) — ARRA 93.727 32,782 Agency for Healthcare Research and Quality Passed through Health Research & Educational Trust (HRET) (80797) 93.UNKNOWN 1,617


Department of Homeland Security: Federal Emergency Management Agency 97.044 82,737 Passed through Louisiana Department of Military Affairs (PW4982) 97.036 6,234,389 Passed through Louisiana Department of Military Affairs (14592-U101) 97.036 176,457 Passed through Louisiana Department of Military Affairs (14593-U100) 97.036 1,147,075 Passed through Louisiana Department of Military Affairs (6957 (B)) 97.036 650

(Continued)

- 23 -

TULANE UNIVERSITY



Passed through Louisiana Department of Military Affairs (6959 (A)) 97.036 9,260$ Passed through Louisiana Department of Military Affairs (17491 (U060)) 97.036 495,000 Passed through Louisiana Department of Military Affairs (17469 (U043)) 97.036 87,332 Passed through Louisiana Department of Military Affairs (17411 (U029)) 97.036 21,030 Passed through Louisiana Department of Military Affairs (16608 (T000)) 97.036 (202,764) Passed through Louisiana Department of Military Affairs (16380 (U060)) 97.036 108,591 Passed through Louisiana Department of Military Affairs (8462 (U060)) 97.036 924,200 Passed through Louisiana Department of Military Affairs (15649 (U060)) 97.036 (569,246) Passed through Louisiana Department of Military Affairs (15957 (U060)) 97.036 (1,020,454) Passed through Louisiana Department of Military Affairs (17221 (U060)) 97.036 40,672 Passed through Louisiana Department of Military Affairs (17595 (N)) 97.036 2,310 Passed through Louisiana Department of Military Affairs (18497 (U060)) 97.036 243,695 Passed through Louisiana Department of Military Affairs (19631 (T000)) 97.036 62,205

Total Department of Homeland Security 7,843,139

Other: Corporation for National Service 94.013 18,186 National Endowment for the Arts 45.024 73,939 National Endowment for the Humanities 45.164 118,131 National Endowment for the Humanities 45.169 15,078 Passed through Louisiana Endowment for the Humanities (10-011-004) 45.129 (9,579) National Institute of Standards and Technology 11.609 2,845 National Science Foundation 47.041 165,738 National Science Foundation 47.049 11,907

(Continued)

- 24 -

TULANE UNIVERSITY



National Science Foundation 47.074 103,216$ National Science Foundation 47.076 22,164 Passed through Louisiana Board of Regents (NSF/LEQSF(2006-10)-LAMP-Phase) 47.076 (70) Passed through Louisiana Board of Regents (NSF/LEQSF(2010-15)-LAMP-SA-10) 47.076 25,598 Passed through Louisiana Board of Regents (NSF(2011)-LINK-61) 47.081 2,024 Passed through Louisiana Board of Regents (NSF(2011)-SURE-20) 47.081 5,000 Passed through Louisiana Board of Regents (NSF (2011)-LINK-63) 47.081 2,090 Naval Medical Research Center 12.UNKNOWN 127,055 US Agency forInternational Development 98.UNKNOWN 1,136,256 Passed through Academy for Educational Development (3760-TUL-01) 98.UNKNOWN 117,193 Passed through American Council on Education (HED110-9726-DGN-11-01) 98.012 104,500 Passed through World Vision, Inc. (663-A-11-0009-01) 98.UNKNOWN 34,298 US Army Medical Research 12.420 29,173 US Department of Commerce — Economic Development 11.307 209,345 US Department of Energy 81.049 54,755 US Department of Energy - Passed through JEH Consulting, Inc (JEH-TUL-802) 81.UNKNOWN (413) US Department of Justice 16.524 278,803 US Department of Labor 17.261 147,984 US Department of State — Passed through Institute of International Education (S-ECAAS-10-CA-044(DT)) 19.010 6,893 US Department of State — Passed through Institute of International Education (S-ECAAS-11-CA-033(DT)) 19.010 406,452 US Environmental Protection Agency 66.514 3,575 US Environmental Protection Agency 66.607 404

Total Other 3,212,540

TOTAL EXPENDITURES OF FEDERAL AWARDS 313,648,716$

See notes to schedule of expenditures of federal awards. (Concluded)

- 25 -

TULANE UNIVERSITY

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2012

1. BASIS OF PRESENTATION

The accompanying schedule of expenditures of federal awards includes the federal grant activity of Tulane University (the “University”) and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Federal direct programs are presented by federal department and by individual federal awards. Federal pass through programs are presented by the entity through which the University received the federal financial assistance.

2. FEDERAL LOAN PROGRAMS

The federal student loan programs listed below are administered directly by the University and balances and transactions relating to these programs are included in the University’s financial statements. The balance of the loans outstanding as of June 30, 2012 consist of:

Loans IssuedDuring Outstanding

CFDA Fiscal Year Balance atNumber 2012 June 30, 2012

Department of Education — Federal Perkins Loan Program 84.038 4,808,153$ 40,676,293$

Department of Health and Human Services — Health Professions Student Loan Program 93.342 388,184 2,543,517

3. FEDERAL DIRECT LOAN PROGRAM

During the year ended June 30, 2012, the University processed new loans of $126,495,796 under the Federal Direct Student Loans. Under Federal Direct Student Loans, loans are provided to eligible borrowers and parents directly by the federal government through a private education lending organization.

- 26 -

4. SUBRECIPIENTS

Of the federal expenditures presented in the schedule, Tulane University provided federal awards to subrecipients as follows:

Contract/ Amounts ProvidedDescription CFDA Number To Subrecipients

Center for Disease Control and Prevention 93.061 17,138$ Center for Disease Control and Prevention 93.067 6,602,335 Center for Disease Control and Prevention 93.135 132,114 Center for Disease Control and Prevention 93.137 139,071 DHHS — Administration for Children and Families 93.575 1,640,894 DHHS — Administration for Children and Families — ARRA 93.708 114,056 DHHS — Health Resources and Services Admin 93.249 99,970 DHHS — Health Resources and Services Admin 93.516 68,541 DHHS — Health Resources and Services Admin 93.918 25,973 National Endowment for the Arts 45.024 13,965 National Endowment for the Humanities 45.164 117,256 National Science Foundation 47.041 37,352 National Science Foundation 47.076 37,018 National Science Foundation 47.081 (417) National Science Foundation — ARRA 47.082 144,774 NIH — National Center on Minority Health and Health Disparities 93.307 5,665 NIH — National Institute of Biomedical Imaging & Bioengineering 93.286 158,839 NIH — John E. Fogarty International Center 93.989 156,406 NIH — National Cancer Institute 93.393 21,958 NIH — National Cancer Institute 93.395 27,663 NIH — National Cancer Institute — ARRA 93.701 22,616 NIH — National Center for Complimentary and Alternative Medicine 93.213 119,439 NIH — National Center for Research Resources 93.389 26,389 NIH — National Heart, Lung, Blood Institute 93.837 763,525 NIH — National Heart, Lung, Blood Institute 93.838 83,173 NIH — National Institute of Allergy and Infectious Disease 93.855 1,741,940 NIH — National Institute of Allergy and Infectious Disease — ARRA 93.701 98,355 NIH — National Institute of Allergy and Infectious Disease 93.RD 1,653,653 NIH — National Institute of Child Health & Human Development 93.865 421,386 NIH — National Institute of Child Health & Human Development — ARRA 93.701 535,711 NIH — National Institute of Child Health & Human Development 93.RD 514,366 NIH — National Institute of Diabetes, Digestive & Kidney Disease 93.848 4,270 NIH — National Institute of Diabetes, Digestive & Kidney Disease 93.849 209,082 NIH — National Institute of Environmental Health Sciences 93.113 361,968 NIH — National Institute of Neurological Disorders & Stroke 93.853 20,827 NIH — National Institute of General Medical Sciences 93.859 51,116 NIH — National Institute of Mental Health 93.242 54,371 NIH — National Institute on Aging 93.866 (12,065) NIH — National Institute on Drug Abuse 93.279 95,008 NIH — National Institute on Drug Abuse — ARRA 93.701 5,273 Regional Procurement Support Office 12.RD 148,839 US Agency for International Development 98.001 (11,339) US Agency for International Development 98.RD 552,847 US Agency for International Development 98.UNKNOWN 170,274

(Continued)

- 27 -

Contract/ Amounts ProvidedDescription CFDA Number To Subrecipients

US Army Corps of Engineers 12.RD 301,951$ US Army Medical Research 12.420 182,959 US Army Research Center 12.431 933,372 US Department of Agriculture 10.001 126,787 US Department of Education 84.215 4,502 US Department of Education 84.215K 19,372 US Department of Energy 81.049 669,394 US Department of Housing and Urban Development 14.RD 903,650 US Department of Justice 16.524 18,400 US Department of Labor 17.261 14,233 US Department of the Interior 15.808 29,058 US Office of Naval Research 12.300 218,658

20,613,931$

(Concluded)

* * * * * *

- 28 -

TULANE UNIVERSITY

SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2012

Part I — Summary of the Auditors’ Results

Financial Statements

Type of auditor’s report issued: Unqualified

Internal control over financial reporting:• Material weakness(es) identified? Yes X No

None • Significant deficiency(ies) identified? Yes X Reported

Noncompliance material to financial statements noted? Yes X No

Federal Awards

Internal control over major programs:• Material weakness(es) identified? Yes X No

None • Significant deficiency(ies) identified? X Yes Reported

Type of auditor’s report issued on compliance for major programs: Unqualified

Any audit findings disclosed that are required to be reported in accordance with section 510(a) of OMB Circular A-133? X Yes No

Identification of Major ProgramsCFDA Number

Student Financial Assistance Cluster US Department of Education - PELL 84.063 US Department of Education - SEOG 84.007 US Department of Education - FWS 84.033 US Department of Education - Federal Perkins Loan Program 84.038 US Department of Education - Direct Loan 84.268 US Department of Health and Human Services - Health Professions Student Loan Program 93.342Center for Disease Control and Prevention 93.067NIH-National Center for Research Resources 93.702

Dollar threshold used to distinguish between Type A and Type B programs: 3,000,000$

Auditee qualified as low-risk auditee? X Yes No

- 29 -

Part II — Financial Statement Findings Section

No matters are reportable.

- 30 -

TULANE UNIVERSITY

SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2012

Part III — Federal Award Findings and Questioned Cost Section

2012-1 Noncompliance and significant deficiency in the University’s internal control over compliance Federal program: Federal Work-Study Program (FWS) CFDA # 84.033 Criteria or specific requirement: Record keeping requirements, 34 CFR 675.19(b) cite that a school must follow the record retention and examination provisions and establish and maintain program and fiscal records that are reconciled at least monthly. Condition – The University has not complied with the established policies and procedures regarding the work-study program which requires University personnel to reconcile fiscal records on a monthly basis; ensure that students do not receive federal work-study payments in excess of amounts earned and ensure that the students to not work while in class. Questioned Costs – For the purposes of this condition, there are no questioned costs. Context – We noted the following conditions:

• Five (5) students out of ten (10) students tested worked while scheduled to be in class; and

• Two (2) students out of ten (10) students tested received federal work study wages in excess of the awarded amount.

Effect – The University is not in compliance with their established policies and procedures and federal regulations. Cause – The University did not properly adhere to established University procedures which require University personnel to reconcile fiscal records on a monthly basis, to ensure that students do not receive federal work-study payments in excess of amounts earned, and ensure that the students to not work while in class. Recommendation – We recommend that management of the University assess the adequacy of established policies and procedures regarding the work-study program, and consider providing additional training to its personnel on such policies and procedures. Views of responsible officials and planned corrective actions – In response to the first issue of students who worked at their FWS job during periods of time when they were scheduled to be in class, we wish to acknowledge that management and the auditors have both confirmed that there exists no federal regulation prohibiting a student from earning FWS funds during the same period of time in which they are scheduled for class. While management adheres to published federal regulations governing the FWS program, we

- 31 -

understand the auditors have received special guidance from the Department of Education (DOE), which has not been disseminated by DOE to the public, that identifies as an audit issue such cases where a student earns FWS funds during a period of time in which they are scheduled for class. While this is not specified in any regulation, management believes that the audit team is identifying a “best practice” in regard to the FWS program, and Tulane has included in the institution’s current Federal Work Study Student Handbook (http://tulane.edu/wfmo/student-employment/upload/FWS-HANDBOOK2012-13.pdf) the following:

“Students are not permitted to work during class time. You should provide your supervisor with your official class schedule to assist him or her in creating work schedules that do not conflict with class schedules.”

Management understands the University is required to ensure that the federal funds are used for intended purposes and therefore stands by the supervisor’s signature and authorization of all student FWS timesheets that the student actually performed work during the hours indicated and that FWS funds are being used for their intended purposes.

Evidence shows that eleven (11) students were tested for the FWS program, which represented a review of the timesheets for 203 different work shifts over the periods being tested. Audit results indicate that in the case of 13 of these 203 work shifts (6.4% of all tested work shifts), students worked for a total of 26.25 hours during which the students were also scheduled to be in class.

To assure that students are adhering to university policy regarding not working during scheduled class time, the University is improving the training of all FWS supervisors in an effort to be sure that policy is enforced. In addition, an improved reporting system is being implemented to identify any scenarios which indicate that a student worked during a time when scheduled for class, so that FWS funds will not be used to cover the student’s earnings in such a case.

In response to the second issue of students who received FWS earnings in excess of their awarded amount, management acknowledges these two occurrences. After review management recognized that one student was actually eligible for a higher FWS award and subsequently was able to increase the FWS award so that received FWS earnings did not exceed the total FWS award. After review of the second case, management subsequently had the amount of FWS funds received in excess of the student’s FWS award paid directly from an institutional account.

Management has implemented a new reporting system with the University’s payroll department to be able to promptly identify students whose FWS earnings are nearing their FWS award levels. In place now for the current academic year, management believes that this improved reporting process will assure the University is adhering to established policies and procedures regarding the FWS program.

http://tulane.edu/wfmo/student-employment/upload/FWS-HANDBOOK2012-13.pdf

- 32 -

2012-2 Noncompliance and significant deficiency in internal control over compliance Federal program: Federal Pell Grant Program (PELL) CFDA # 84.063 Criteria or specific requirement: OMB Circular A-133 Compliance Supplement, Part 5 Section (N) (4) specifies that when a student receives Title IV assistance and withdraws from an institution, the institution must determine the amount of Title IV aid earned by the student as of the withdrawal date. The difference between any amount earned that is less than the amount disbursed must be returned to the Title IV program within the prescribed time frame. The 2011 – 2012 Student Financial Aid Handbook, Volume 3, Chapter 3, page 3-41 specifies that the amount a student is eligible for and can receive in PELL during the year is based upon their attendance. The 2011 – 2012 Student Financial Aid Handbook, Volume 4, Chapter 1, page 4-29 specifies that a student’s eligibility for Title IV loans must be determined prior to disbursement. The eligibility is determined based upon the total number of hours enrolled and the University must ascertain that the student began attendance at least half-time in the enrolled courses. Condition – The University has not complied with Title IV regulations that specify that the University should determine student eligibility prior to the disbursement of Title IV aid to students. The regulations also state that if a student unofficially withdraws from school within a certain time frame a refund must be processed either using the 50% point, for institutions not required to take attendance, or the student’s last documented date of attendance. Questioned Costs – $694 for one (1) student that received Title IV aid for classes where attendance was not documented. Context – We noted the following conditions: The University had a total population of two hundred and ninety-seven (297) students who received Title IV aid for the Fall 2011 and Spring 2012 semesters and received a non-passing grade in all courses enrolled. When a student fails to attain a passing grade in all classes enrolled, the Department of Education assumes that the student unofficially withdrew from the University, thus requiring a Return of Title IV Funds calculation to be prepared based on the student’s last date of attendance. The Department of Education also requires the University to support and document the student’s last date of attendance. Ten (10) of the two hundred and ninety seven (297) students were selected for testing in which we noted the following:

• The University does not appear to have procedures in place to support and document that students are only disbursed Title IV aid for classes attended as required by the Department of Education. The University disburses aid to students based on classes enrolled and not attended, which resulted in three (3) students out of ten (10) receiving Title IV aid for classes where attendance was not indicated by professors. Management subsequently provided documentation from professors which indicated that two (2) of the students attended class, which results in one (1) student being in noncompliance. This resulted in $694 in excess PELL grant being disbursed to the student.

• The Department of Education allows institutions that do not require attendance to be taken to utilize the 50% point to prepare the Return of Title IV calculations provided that initial attendance in class is verified by the University. In instances where dates other than the 50% point are utilized to prepare the Return of Title IV Funds calculation, the University must maintain information to document and

- 33 -

support the last date of attendance utilized by the University to prepare the calculation. Based on procedures performed, we noted the University does not maintain documentation to support the last date of attendance. The calculation is based on the last date of attendance that is inputted into the University’s system by the professors; however, there is no documentation to support such input dates.

Effect – Federal expenditures are overstated on the accounting records of the University related to the questioned costs identified of $694 that are due and payable to the Title IV program of the Department of Education. Cause – The University failed to adhere to established procedures to verify students’ attendance prior to the disbursement of Title IV Aid and to maintain documentation to support a student’s last date of attendance. Recommendation – We recommend that management of the University immediately make the necessary determination as to the status of students that unofficially withdraw from the University, prepare the Return of Title IV Funds calculation, and return the funds to the Title IV program of the Department of Education in a timely manner. The University should also consider whether changes to the existing procedures regarding monitoring of student status are needed. Views of responsible officials and planned corrective actions – In response to the issue of the three (3) students identified during testing for whom the auditors question whether the students attended specific classes, management remains in the process of trying to receive confirmation of attendance directly from each respective class instructor/professor for the classes in question for these 3 students.

Management acknowledges that in the case of one student, if the student is determined to have never have started the specific class in question, then a reduction in their Federal Pell grant is needed.

The University has already implemented a new attendance policy for the School of Continuing Studies (whose student population accounts for the great majority of the cases where students conclude a semester without a passing grade). This new policy requests for all instructors to report to management a student’s failure to attend the first three classes of the semester. Therefore, this new attendance reporting process should assure that this population of students is quickly identified as whether or not they have begun enrollment.

The University has in place several procedures to determine that a student has begun attendance and adheres to regulation requiring the proper return of Title IV funds disbursed in such cases where a student failed to meet the federal attendance requirements.

- 34 -

2012-3 Noncompliance and significant deficiency in internal control over compliance Federal program: Center for Disease Control and Prevention CFDA # 93.067 Criteria or specific requirement: Equipment records shall be maintained, a physical inventory of equipment shall be taken at least once every two years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequately maintained. Condition – The University has not complied with the established policies and procedures regarding physical inventory observations which require University personnel to perform a physical inventory of equipment at least once every two years. Question Costs – $19,895 Context – We noted the following conditions:

• Two (2) items recorded as Computer Equipment in the amount of $5,769 each are located in Ethiopia, therefore we were unable to physically inspect the items. .

• One (1) item recorded as Scientific Equipment in the amount of $8,358 is located in Ethiopia, therefore we were unable to physically inspect the item.

• Management indicated that these items had not been selected for inventory observation by management due to their location in a foreign country.

Effect – The University is not in compliance with their established policies and procedures and federal regulations. Cause – The University did not properly adhere to established University procedures which require University personnel to perform a physical inventory of equipment at least once every two years and reconcile to the equipment records. Recommendation – We recommend that management of the University adhere to established policies and procedures regarding the inventory of federally-funded fixed assets. Views of responsible officials and planned corrective actions – We agree with the finding. The University will extend its policy of requiring a physical inventory of all equipment assets every two years to include equipment purchased and shipped overseas for use in foreign countries pursuant to government grants. This condition is isolated to foreign based assets due to the difficulty of obtaining accurate inventory observations overseas. The Property department shall work with the in-country project director to complete the required inventory prior to this calendar year end and then on a bi-annual basis going forward.

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TULANE UNIVERSITY

STATUS OF PRIOR-YEAR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 30, 2012

Not applicable.

CONTENTS

I NDE P ENDENT AUD I TOR S ’ R E PORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

F I NANC I A L STATEMENTS

Statements of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Statements of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5–6

Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Tulane University, a private research university founded in 1834, is one of the most respected universities in the country. Tulane has

been a member of the prestigious Association of American Universities since 1958. With research and educational partnerships that

span the globe, top-ranked programs in academic and professional schools and its location in historic New Orleans, Louisiana, Tulane

offers an unparalleled educational experience for its 13,486 students.

About the cover: An aerial view shows the Tulane University uptown campus, with its iconic oak trees and century-old buildings facing

St. Charles Avenue (bottom right). The New Orleans skyline and the Mercedes-Benz Superdome are in the distance.

(Photo by Jackson Hill)

TULANE UNIVERS ITY

Financial Statements For The Years Ended June 30,2012 and 2011

3

I N D E P E N D E N T A U D I T O R S ’ R E P O R TTHE ADMINISTRATORS OF THE TULANE EDUCATIONAL FUND

We have audited the accompanying statements of financial position of Tulane University (the

“University”) as of June 30, 2012 and 2011, and the related statements of activities, and cash flows

for the years then ended. These financial statements are the responsibility of the University’s management.

Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United

States of America. Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatement. An audit

includes consideration of internal control over financial reporting as a basis for designing audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an

opinion on the effectiveness of the University’s internal control over financial reporting. Accordingly,

we express no such opinion. An audit also includes examining, on a test basis, evidence supporting

the amounts and disclosures in the financial statements, assessing the accounting principles used

and significant estimates made by management, as well as evaluating the overall financial statement

presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position

of Tulane University as of June 30, 2012 and 2011, and the results of its operations and cash flows

for the years then ended in conformity with accounting principles generally accepted in the United

States of America.

As disclosed in Note 17 to the financial statements, the University’s operations continue to be

significantly impacted by the effects of Hurricane Katrina in fiscal 2012 and 2011.

New Orleans, Louisiana

November 9, 2012

4

TULANE UNIVERS ITYSTATEMENTS OF F INANCIAL POS IT IONJUNE 30 , 20 1 2 AND 20 1 1 ( IN THOUSANDS )

ASSETS:Cash and cash equivalents

Deposits in trust

Accounts and other receivables, net

Contributions receivable, net

Loans receivable, net

Investments

Prepaid expenses and other assets

Property, plant and equipment, net

TOTAL ASSETS

LIABILITIES AND NET ASSETSLiabilities:

Accounts payable and accrued liabilities

Deferred revenue and refundable deposits

Notes payable and lines of credit

Bonds payable

Federal student loan funds

Total liabilities

Net Assets:Unrestricted

Unrestricted, funds functioning as endowment

Total unrestricted

Temporarily restricted

Permanently restricted

Total net assets

TOTAL LIABILITIES AND NET ASSETS

The accompanying notes are an integral part of the financial statements.

$ 10,987

17,495

65,048

63,298

41,225

969,122

21,536

736,072

$ 1,924,783

$ 101,187

45,315

71,154

454,843

40,791

713,290

128,528

80,978

209,506

481,258 520,729

1,211,493

$ 1,924,783

2012 2011

$ 15,738

14,021

67,786

54,629

42,205

1,032,402

22,267

711,397

$ 1,960,445

$ 102,727

40,805

58,222

447,195

40,124

689,073

141,830

90,402

232,232

528,348 510,792

1,271,372

$ 1,960,445

5

TULANE UNIVERS ITYSTATEMENT OF ACT IV IT IESYEAR ENDED JUNE 30 , 20 1 2 ( IN THOUSANDS )

Temporarily Permanently TotalUnrestricted Restricted Restricted 2012

OPERATING REVENUESTuition and fees

Less: Institutional scholarships and fellowships

Tuition and fees, net

Government grants and contracts

Private gifts and grants

Medical group practice

Affiliated hospital agreements/contracts

Endowment income

Investment income and gains, net

Recovery of indirect costs

Auxiliary enterprises

Other

Net assets released from restrictions

Total operating revenues

OPERATING EXPENSESInstruction and academic support


Organized research

Public service

Libraries

Student services

Institutional support

Scholarships and fellowships



Disaster costs (net recoveries)

Other

Total operating expenses

Increase (decrease) in net assets from operating activities

NON-OPERATING ACTIVITIESNet realized and unrealized losses

Net unrealized losses on interest rate swaps

Accumulated gains used for spending

Transfers between net asset groups

INCREASE (DECREASE) IN NET ASSETS

BEGINNING NET ASSETS

ENDING NET ASSETS


$ 428,480

(146,474)

282,006

146,809

37,360

79,626

36,077

8,926

2,153

31,364

65,691

47,914

44,920

782,846

257,605

29,766

156,779

13,202

25,288

26,643

78,578

13,332

101,978

80,449

(10,001)

13,378

786,997

(4,151)

(6,300)

(6,455)

(3,124)

(2,696)

(22,726)

232,232

$ 209,506

$ –

$ 30,736

32,934

708

(44,920)

19,458

5,883

5,883

13,575

(25,364)

–

(33,988)

(1,313)

(47,090)

528,348

$ 481,258

$ –

$ 10,669

10,669

4,741

4,741

5,928

4,009

9,937

510,792

$ 520,729

$ 428,480

(146,474)

282,006

146,809

78,765

79,626

36,077

41,860

2,861

31,364

65,691

47,914

–

812,973

257,605

29,766

156,779

13,202

25,288

26,643

78,578

13,332

101,978

80,449

(10,001)

24,002

797,621

15,352

(31,664)

(6,455)

(37,112)

–

(59,879)

1,271,372

$1,211,493

6

TULANE UNIVERS ITYSTATEMENT OF ACT IV IT IESYEAR ENDED JUNE 30 , 20 1 1 ( IN THOUSANDS )

Temporarily Permanently TotalUnrestricted Restricted Restricted 2011

OPERATING REVENUESTuition and fees

Less: Institutional scholarships and fellowships

Tuition and fees, net

Government grants and contracts

Private gifts and grants



Endowment income

Investment income and gains, net

Recovery of indirect costs


Other

Net assets released from restrictions

Total operating revenues

OPERATING EXPENSESInstruction and academic support


Organized research

Public service

Libraries

Student services

Institutional support

Scholarships and fellowships



Disaster costs (net recoveries)

Other

Total operating expenses

Increase (decrease) in net assets from operating activities

NON-OPERATING ACTIVITIESNet realized and unrealized gains (losses)

Net unrealized losses on interest rate swaps

Accumulated gains used for spending

Transfers between net asset groups

INCREASE (DECREASE) IN NET ASSETS

BEGINNING NET ASSETS

ENDING NET ASSETS


$ 397,814

(136,321)

261,493

161,438

33,306

79,189

34,560

8,642

4,109

32,565

62,637

36,598

41,020

755,557

237,846

28,867

159,863

12,863

24,208

25,989

74,816

12,855

97,361

76,716

(5,529)

9,395

755,250

307

4,835

(1,255)

(3,226)

(3,581)

(2,920)

235,152

$ 232,232

$ 10,079

34,037

1,694

(46,020)

(210)

4,690

4,690

(4,900)

146,332

–

(34,309)

(418)

106,705

421,643

$ 528,348

$ 18,448

5,000

23,448

4,878

4,878

18,570

3,999

22,569

488,223

$ 510,792

$ 397,814

(136,321)

261,493

161,438

61,833

79,189

34,560

42,679

5,803

32,565

62,637

36,598

–

778,795

237,846

28,867

159,863

12,863

24,208

25,989

74,816

12,855

97,361

76,716

(5,529)

18,963

764,818

13,977

151,167

(1,255)

(37,535)

–

126,354

1,145,018

$1,271,372

7

TULANE UNIVERS ITYSTATEMENTS OF CASH FLOWSYEAR ENDED JUNE 30 , 20 1 2 AND 20 1 1 ( IN THOUSANDS )

CASH FLOWS FROM OPERATING ACTIVITIES:(Decrease) increase in net assetsAdjustments to reconcile increase (decrease) in net assetsto net cash (used for) operating activities:

Depreciation and amortizationAsset retirementsNet realized and unrealized investment losses (gains)Net decrease in fair value of interest rate swap agreementsContributions restricted for permanent investmentContributions of propertyGrant receipts used for capital purposesInsurance and FEMA recoveries receivedChanges in operating assets and liabilities:

Decrease in accounts and other receivablesIncrease (decrease) in contributions receivableDecrease (increase) in prepaid expenses and other assetsDecrease in accounts payable and accrued liabilitiesIncrease (decrease) in deferred revenue and refundable deposits

Net cash used for operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of investmentsProceeds from the sale of investmentsPurchase of property, plant and equipment, net(Increase) in deposits in trustStudent loans issuedProceeds from collections of student loansGrant receipts used for capital purposesFEMA recoveries net of advances received and released

Net cash used for investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:Contributions restricted for permanent investmentProceeds from issuance of bonded debtRepayment of bonded debtProceeds from issuance of notes payable and lines of creditRepayment of notes payable and lines of creditIncrease in federal student loan fundsAnnuities paid

Net cash provided by financing activities

NET DECREASE IN CASH AND CASH EQUIVALENTSCASH AND CASH EQUIVALENTS AT BEGINNING OF YEARCASH AND CASH EQUIVALENTS AT END OF YEARSUPPLEMENTAL DISCLOSURES:Interest paid

$ 126,354

46,589915

(151,167)1,255(7,874)(1,380)(9,773)(5,705)

7,7983,407(191)

(6,343)(9,117)

(5,232)

(391,712) 424,025(93,485)(1,534)(5,857) 5,7379,7735,705

(47,348)

7,874 34,363

(70) 93,207(84,164)

733(974)

50,969

(1,611) 17,349

$ 15,738

$ 17,355

2012 2011


$ (59,879)

50,152181

31,6646,455(5,928)

(317)(3,083)

(11,243)

2,738(8,669)

409(9,880)4,510

(2,890)

(310,663) 342,415(72,056)(3,474)(5,058) 6,0383,083

11,243

(28,472)

5,928 24,785 (16,815) 114,400(101,468)

667(886)

26,611

(4,751) 15,738

$ 10,987

$ 18,450

8

1

Tulane UniversityNotes to the Financial Statements Years Ended June 30, 2012 and 2011

S U M M A R Y O F S I G N I F I C A N TA C C O U N T I N G P O L I C I E S

The summary of significant accounting policies followed by Tulane University (the university) is

presented below and in other sections of these notes. Tulane University is a private research

university founded in 1834.

B A S I S O F P R E S E N T A T I O N

The accompanying financial statements have been prepared using the accrual basis of accounting.

The financial statements have been consolidated to include the accounts of Tulane University,

Tulane Murphy Foundation, Inc., Tulane International, L.L.C., Howard Memorial Association,

Riversphere One and all auxiliary activities.

The university utilizes three net asset categories, which are described as follows:

Unrestricted net assets include the following:

• Unrestricted net assets include funds not subject to donor-imposed stipulations. The revenues

received and expenses incurred in conducting the educational, research and service missions of

the university are included in this category. Additionally, this category includes the health care

services associated with the School of Medicine Medical Group Practice and the professional

services provided under affiliated hospital agreements. The university has determined that any

donor-imposed restrictions for current or developing programs and activities are generally met

within the operating cycle of the university, and therefore, the university’s policy is to record

these net assets as unrestricted.

• Unrestricted funds functioning as endowment include funds designated by the Board of

Administrators for investment purposes. The earnings on such funds are distributed to support

university operations.

Temporarily restricted net assets include gifts for which donor-imposed restrictions have not been met,

annuity and life income funds, contributions receivable (where the ultimate purpose of the proceeds

is not permanently restricted), accumulated but undistributed gains and losses on donor restricted

endowment funds, and distributed but unspent earnings on donor restricted endowment funds.

Permanently restricted net assets include gifts, trusts and contributions receivable, which are

required by donor-imposed restriction to be invested in perpetuity. Only the income from such

investments is available for program operations in accordance with donor restrictions.

9

R E V E N U E R E C O G N I T I O N

Tuition and fees, net — Student tuition and fees are recorded as revenues during the year the

related services are rendered. Advance payments are recorded as deferred revenue. Financial

aid provided by the university is recorded as a reduction to tuition and fees.

Government grants and contracts — Revenues are recognized when allowable expenditures

are incurred under such agreements and contracts. Advance payments are recorded as

deferred revenue.

Medical group practice — Revenues for health care services rendered by the medical group practice

are recorded at contractual or established rates net of discounts and contractual adjustments.

Charity services and bad debts are recorded in the operating expenses caption entitled Medical

Group Practice.

U S E O F E S T I M A T E S

The preparation of financial statements in conformity with accounting principles generally accepted in

the United States of America requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date

of the financial statements, and the reported amounts of revenues and expenses during the reporting

period. Actual results could differ from those estimates.

A L L O C A T I O N O F C E R T A I N E X P E N S E S

The financial statements present expenses by functional classification in accordance with the

overall mission of the university. Certain natural expenses are allocated to the respective functional

classifications based on certain criteria. Depreciation expense, plant operations and maintenance,

and retirement of plant assets are allocated based on square footage occupancy. Interest expense

is allocated to the functional categories that have benefited from the proceeds of the debt. The

expenses allocated are as follows (in thousands):

2012 2011

Depreciation $ 50,152 $ 46,589

Retirement of plant assets $ 181 $ 915

Plant operations and maintenance $ 53,350 $ 49,898

Interest expense on indebtedness $ 18,406 $ 17,656

C A S H E Q U I V A L E N T S

Cash equivalents include short-term, highly liquid investments with a maturity of three months or

less at the time of purchase. Cash equivalents representing assets of endowment and similar funds

and annuity and life income funds are included in the caption Investments.

10

I N V E S T M E N T S

Equity securities with readily determinable values and most debt securities are valued based on

market quotations. Certain fixed income securities are valued based on dealer supplied valuations.

Where fair values are not determinable through market quotations estimates are supplied by

external investment managers and a valuation review is conducted by management. Such review

includes obtaining and reviewing audited and unaudited financial information from investment

managers, holding discussions with external managers and general partners, and evaluating

investment returns in light of current conditions. University-held real estate, mortgages and royalty

interests are valued at cost or original appraised value. The university’s investment in University

Healthcare System, L.C. is accounted for using the equity method (see Note 16).

Depreciation is not recorded for endowment fund real estate investments. In the opinion of the

university’s management, the excess of realizable market value over the book value of such

property would be sufficient to preclude the impairment of endowment net assets even if de-

preciation provisions were made. This excess is considered sufficient to permit the distribution

of a portion of the rentals and royalties derived from these properties to current operations.

E N D O W M E N T S P E N D I N G P O L I C Y

The pooled endowment spending policy is based upon the average market value of the previous

twelve quarters multiplied by a specified percentage. The percentage for the pooled endowment for

the fiscal years ended June 30, 2012 and 2011 was 5.0%. Accumulated investment gains are

used to fund the difference between payout and current earnings.

A N N U I T Y A N D L I F E I N C O M E A G R E E M E N T S

The university has agreements with donors that include irrevocable charitable remainder trusts,

charitable gift annuities, and life income funds where the university serves as trustee. Assets held

in trust are generally comprised of investments. Such values are reported as temporarily restricted

net assets net of the estimated future payments to be made to donors or other beneficiaries.

O T H E R F I N A N C I A L I N S T R U M E N T S

The university occasionally uses derivatives to manage the market risk associated with outstanding

variable rate debt. Derivative financial instruments are reported at fair value with any resulting gain

or loss reported in the non-operating section of the statement of activities.

11

P R O P E R T Y , P L A N T A N D E Q U I P M E N T

Property, plant and equipment are recorded at cost, or if donated, at fair market value at the

date of donation. Depreciation is computed on a straight-line basis over the estimated useful

lives of the related assets. The estimated useful lives are as follows: buildings, 20 to 50 years,

improvements, 10 to 20 years, and equipment and library books, 4 to 20 years.

Certain works of art and historical treasures have been recognized at their estimated fair value

based upon appraisals or similar valuations at the time of acquisition. Works of art and historical

treasures are not depreciated.

Conditional asset retirement obligations related to legal requirements to perform certain future

activities related to the retirement, disposal, or abandonment of assets are accrued utilizing

physical site surveys to estimate the net present value of applicable future costs such as

asbestos abatement or removal.

The university reviews long-lived assets for impairment whenever events or changes in circum-

stances indicate that the carrying value of an asset might not be recoverable through future

utilization. An impairment charge is recognized when the fair value of an asset is less than

its carrying value.

D E F E R R E D F I N A N C I N G C O S T S

In connection with the issuance of the various bonds and notes payable (see Notes 10 and 11),

financing costs approximating $10.6 million have been capitalized and are being amortized over

the respective lives of the bonds. Accumulated amortization of these deferred financing costs

approximated $1.6 million and $1.2 million at June 30, 2012 and 2011, respectively. Deferred

financing costs are included in the caption prepaid expenses and other assets on the statements

of financial position.

M E D I C A L G R O U P P R A C T I C E

The university’s medical school faculty provides professional services in the Tulane University

Hospital and Clinic and other community hospitals. Under these agreements, professional

revenues are included in the unrestricted net assets grouping and are distributed in accordance

with specified formulas.

I N T E R N A L R E V E N U E C O D E S T A T U S

The university has been granted tax-exempt status as a not-for-profit organization under Section

501(c)(3) of the Internal Revenue Code.

12

2

N E W A C C O U N T I N G P R O N O U N C E M E N T S

Effective July 1, 2011, the university adopted ASU 2010-24, Health Care Entities (Topic 954):

Presentation of Insurance Claims and Related Insurance Recoveries, which clarifies that a health

care entity should not net insurance recoveries against a related claim liability. The adoption of

ASU 2010-24 did not have a material impact on the 2012 and 2011 financial statements.

In April 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820):

Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S.

GAAP and IFRSs (ASU 2011-04). The guidance provided in this ASU is effective for fiscal years

beginning after December 15, 2011. The university has not determined the impact, if any, on the

financial statements from the adoption of this ASU.

A variety of proposed or otherwise potential accounting standards are currently under study by

standard-setting organizations. Because of the tentative and preliminary nature of such proposed

standards, the university has not yet determined the effect, if any, that the implementation of

such proposed standards would have on the financial statements.

D E P O S I T S I N T R U S T

Deposits in trust at June 30, 2012 and 2011 consist of investments at fair value of $17,495 and

$14,021 (in thousands), respectively, set aside primarily for medical malpractice self insurance.

13

A C C O U N T S A N D O T H E R R E C E I V A B L E S

Accounts receivable consist of the following at June 30, 2012 and 2011 (in thousands):

2012 2011

Student receivables, net of allowance

for doubtful accounts of $9,497 and $9,375 $ 5,693 $ 5,137

U.S. Government, state and other contract receivables, net

of allowances for doubtful accounts of $455 and $592 42,891 49,599

Patient and related receivables, net of allowances for

discounts and doubtful accounts of $8,944 and $9,905 11,833 9,092

Other receivables 4,631 3,958

Total $ 65,048 $ 67,786

Management regularly assesses the adequacy of the allowance for doubtful accounts by performing

ongoing evaluations of the various components of the accounts receivable portfolio, including such

factors as the differing economic risks associated with each category, the financial condition of spe-

cific borrowers, the economic environment in which the borrowers operate, the level of delinquent

accounts, and the past history of the various borrowers and the university. Factors also considered by

management when performing its assessment, in addition to general economic conditions and the

other factors described above, included, but were not limited to, a detailed review of the aging of the

various receivables and a review of the default rate by receivables category in comparison to prior

years. The level of the allowance is adjusted based on the results of management’s analysis.

Considering the other factors already discussed herein, management considers the allowance for

doubtful accounts losses to be prudent and reasonable. Furthermore, the university’s allowance is

general in nature and is available to absorb losses from any receivables category. Management

believes that the allowances for doubtful accounts at June 30, 2012 and 2011 are adequate to

absorb credit losses inherent in the portfolio as of those dates.

3

14

C O N T R I B U T I O N S R E C E I V A B L E

Unconditional promises are included in the financial statements as contributions receivable andrevenue of the appropriate net asset category. Contributions are recorded after discounting at 6.0%to the present value of the future cash flows.

Management expects unconditional promises to be realized in the following periods (in thousands)at June 30, 2012 and 2011:

2012 2011

In one year or less $ 17,545 $ 33,815Between one year and five years 43,641 44,418More than five years 24,022 14,948

85,208 93,181 Less: discounts of $11,217 and $9,037 and allowancesfor uncollectible pledges of $10,693 and $29,515 (21,910) (38,552)

Total $ 63,298 $ 54,629

Management follows a similar approach as described in Note 3 for accounts receivable in evaluating the adequacy of the allowance for contributions receivable. Management considers theallowance for uncollectible pledges to be prudent and reasonable. Furthermore, the university’sallowance is general in nature and is available to absorb losses from any contributions receivablecategory. Management believes that the allowances for uncollectible pledges at June 30, 2012 and 2011 are adequate to absorb any uncollectible pledges as of those dates.

Contributions receivable at June 30, 2012 and 2011 have restrictions applicable to the following (in thousands):

2012 2011

Endowments for departmental programs and activities $ 20,107 $ 14,723Departmental programs and activities 14,078 15,064Capital purposes 29,113 24,842

Total $ 63,298 $ 54,629

4

15

5 L O A N S R E C E I V A B L E

Loans receivable consist of the following at June 30, 2012 and 2011 (in thousands):

2012 2011

Perkins student loan program $ 40,676 $ 41,606Primary care loan program 2,011 2,083Other loan programs 1,013 991

43,700 44,680Less: allowance for doubtful accounts (2,475) (2,475)

Total $ 41,225 $ 42,205

The university makes uncollateralized loans to students based on financial need. Student loans arefunded through Federal government loan programs or institutional resources. At June 30, 2012 and2011, student loans represented 2.1% and 2.2% of total assets, respectively.

The university participates in the Perkins federal revolving loan program. The availability of funds forloans under the program is dependent on reimbursements to the pool from repayments on outstandingloans. Funds advanced by the Federal government of $40,791 and $40,124 at June 30, 2012 and2011, respectively, are ultimately refundable to the government and are classified as liabilities in thestatement of financial position. Outstanding loans cancelled under the program result in a reduction offunds available for lending and decrease the liability to the government.

At June 30, 2012 and 2011 the following amounts were past due under student loan programs (in 000s):

June 30, 1–60 days past 60–90 days past >90 days past Total Past due2012 $1,956 $463 $3,510 $5,9292011 $1,675 $702 $3,000 $5,377

Management follows a similar approach as described in Note 3 for accounts receivable in evaluatingthe adequacy of the allowance for loans receivable. Allowances for doubtful loan accounts are established based on management’s best estimate of the collectability of the receivables and currenteconomic factors which, in management’s judgment, could influence the ability of loan recipients to repay the amounts per loan terms. Amounts due under the Perkins loan program related to thegovernment funded portion, are guaranteed by the government and, therefore, no reserves are placedon any balances past due under that program.

Management considers the allowance for doubtful accounts to be prudent and reasonable.Furthermore, the university’s allowance is general in nature and is available to absorb losses fromany loans receivable category. Management believes that the allowances for doubtful accounts atJune 30, 2012 and 2011 are adequate to absorb any uncollectible loans as of those dates.

16

I N V E S T M E N T S A N D A S C 8 2 0 - 1 0 , F A I RV A L U E M E A S U R E M E N T S A N D D I S C L O S U R E S

ASC 820-10 adopts a hierarchy approach for ranking the quality and reliability of the information

used to determine fair values in one of three categories to increase consistency and comparability

in fair value measurements and disclosures. The highest priority (tier 1) is given to quoted prices

in active markets for identical assets. Tier 2 assets are valued based on inputs other than quoted

prices that are “observable”. For example, quoted prices for similar securities or quoted prices in

inactive markets would both be observable. In tier 3, the inputs used for valuation are not observ-

able or transparent and assumptions have to be made about how market participants would price

the underlying assets. Investments are classified based on the lowest level of input that is signifi-

cant to the fair value measurement.

Investments consisted of the following at June 30, 2012 (in thousands):

Tier 1 Tier 2 Tier 3Investment Type (Quoted prices (Significant (Significant

in active markets) Observable inputs) Unobservable inputs) Total

Short term money funds Domestic equitiesInternational and global equitiesAbsolute return and long short fundsPrivate Equity and Real Assets

(Limited Partnerships)Government bonds and notesCorporate bonds and notes

Total investments at fair value by tier

University Healthcare Systemon the equity basis

Real Estate and royalty interests at original cost or appraised value

Investment receivables and otherat cost or appraised value

Total investments valued at otherthan fair value

Total investments

Deposits in trustShort term money fundsDomestic equitiesCorporate bondsGovernment bonds, notesTotal deposits in trust at fair value by tier

6

$ 4,431173,37216,405

_

–13,22050,232

$ 257,660

–

–

–

$ 5,685741

––

$ 6,426

$ 6,42787,388

107,009123,774

–12,43636,615

$ 373,649

–

–

–

$ 221–

5,0285,820

$ 11,069

–$ 10,021

8,620121,624

142,402––

$ 282,667

–

–

–

–

––

–

$ 10,858270,781132,034245,398

142,40225,65686,847

$ 913,976

8,565

36,921

9,660

55,146$ 969,122

$ 5,906741

5,0285,820

$ 17,495

17

Investments consisted of the following at June 30, 2011 (in thousands):

Tier 1 Tier 2 Tier 3Investment Type (Quoted prices (Significant (Significant

in active markets) Observable inputs) Unobservable inputs) Total

Short term money funds Domestic equitiesInternational and global equitiesAbsolute return and long short fundsPrivate Equity and Real Assets

(Limited Partnerships)Government bonds and notesCorporate bonds and notes

Total investments at fair value by tier

University Healthcare Systemon the equity basis

Real Estate and royalty interests at original cost or appraised value

Other investments at cost orappraised value

Total investments valued at otherthan fair value

Total investments

Deposits in trustShort term money fundsDomestic equitiesCorporate bondsGovernment agency bonds, notesTotal deposits in trust at fairvalue by tier

$ 2,527206,70424,136

_

–7,542

–

$ 240,909

–

–

–

$ 472748

––

$ 1,220

$ 41,34767,99578,303

121,575

–16,99155,109

$ 381,320

–

–

–

$ 2,184–

3,4247,193

$ 12,801

–$ 14,568

28,425179,086

119,086––

$ 341,165

–

–

–

–

––

–

$ 43,874289,267130,864300,661

119,08624,53355,109

$ 963,394

13,862

36,921

18,225

69,008$1,032,402

$ 2,656748

3,4247,193

$ 14,021

18

Reconciliation of Tier 3 assets at June 30, 2012 and 2011 (in thousands):

2012

Long Short funds Private Equity and Internationaland Absolute Real Assets – Equities – Limited Domestic

Total Return funds Limited Partnership Partnerships EquitiesBeginning Balances,

July 1, 2011Total reclassificationsTotal gains and losses,

(realized/unrealized)Purchases, issuances,

(capital advanced)Redemptions

(capital returned)

Ending balances,June 30, 2012

2011

Long Short funds Private Equity and Internationaland Absolute Real Assets – Equities – Limited Domestic

Total Return funds Limited Partnership Partnerships EquitiesBeginning Balances,

July 1, 2010Total reclassificationsTotal gains and losses,

(realized/unrealized)Purchases, issuances and

settlements (capitaladvanced/returned)

Ending balances,June 30, 2011

$ 341,165(60,183)

(6,865)

99,378

(90,828)

$ 282,667

$ 179,086(15,986)

(10,921)

31,033

(61,588)

$ 121,624

$ 119,086 –

9,295

34,385

(20,364)

$ 142,402

$ 28,425(24,521)

(10,368)

23,960

(8,876)

$ 8,620

$ 14,568(19,676)

5,129

10,000

–

$ 10,021

$ 357,272(71,281)

57,163

(1,989)

$ 341,165

$ 225,058(76,472)

26,619

3,881

$ 179,086

$ 96,2208,834

19,622

(5,590)

$ 119,086

$ 22,174–

6,531

(280)

$ 28,425

$ 13,820(3,643)

4,391

–

$ 14,568

19

The Financial Accounting Standards Board issued a standards update pertaining to Fair Value

Measurements and Disclosures for Investments in Certain Entities That Calculate Net Asset Value

per Share in September 2009. Fair values are determined by the use of calculated net asset value

per ownership share. As a result of the update, the university transferred $60,183 and $71,281 in

2012 and 2011 respectively, from tier 3 to tier 2 based on the liquidity provisions in the underlying

investments. In complying with the update, the university makes the following disclosures about its

investments at June 30, 2012 that feature net asset value per share in tiers 2 and 3.

(a) This category includes investments in partnerships that invest primarily in common stocks

across various sectors and market caps and across different geographic regions. The firms do not

short and do not employ leverage. Investments representing approximately 89% of the value of this

category were liquid as of June 30, 2012. Generally, these funds do not have lock-up periods after

the initial investment.

(b) This category includes investments in hedge funds that invest primarily in equities, both long

and short. Managers of these funds have the ability to shift investments by geography, sector, and

exposure, both on a net and gross basis. Investments representing approximately 66% of the value

of this category were liquid as of June 30, 2012. Generally, restriction periods range from three to

twenty-four months as of June 30, 2012.

(c) This category includes investments in hedge funds that invest in event-related equity and

credit, arbitrage, short selling and other marketable assets and strategies. The category is

comprised of approximately 25% equity and the remainder debt and other investments, and

provides a consistent return, with low volatility and limited correlation to equity and fixed income

markets. Investments representing approximately 70% of the value of this category were liquid

as of June 30, 2012. Generally, restriction periods range from one to twenty-one months as of

June 30, 2012.

$ 148,095

163,335

111,165

35,842

91,431

50,971

$ 600,839

–

–

–

–

$ 80,970

27,504

$ 108,474

Daily, Monthly, Quarterly

Monthly, Quarterly

Quarterly

N/A

N/A

N/A

1–60 days

45–65 days

65 days

N/A

N/A

N/A

Global and DomesticLong Only Equity (a)

Equity long/short hedge funds (b)

Absolute Return hedge funds (c)

Enhanced Fixed Income (d)

Private Equity (e)

Private Real Assets (f)

Total

Fair Value(in thousands)

UnfundedCommitments

Redemptionfrequency if

currently eligibleRedemptionNotice Period

20

(d) This category includes investments in hedge funds where managers pursue opportunistic

exposure to distressed loans and other senior credits, emerging market debt and high yield

bonds. The category is comprised of approximately 20% equity and the remainder debt and

other investments, and provides a consistent return, with low volatility and limited correlation to

equity and fixed income markets. Only 2% of the investments in this category were not available

to be redeemed because of lockup restrictions as of June 30, 2012.

(e) This category includes private equity partnerships including buyout, venture capital, and

distressed investment funds. Many of the partnerships are funds of funds that invest in multiple

funds across strategies. These investments cannot be redeemed. Distributions from each fund will

be received as the underlying investments are liquidated. Most funds have a primary term of ten

years. Approximately 38% of private equity NAV is in buyout strategies, 41% in venture capital,

20% in distressed, and 1% in other.

(f) This category includes several partnerships in oil and gas and U.S. real estate funds. Many of

these partnerships are funds of funds that invest in multiple funds. These investments cannot be

redeemed but are subject to liquidation distributions as the underlying investments are liquidated.

Most funds have a primary term of ten years. Approximately 68% of the NAV in this category is in

oil and gas and natural resources partnerships. The remaining 32% is in real estate funds.

The university also makes the following disclosures about its investments at June 30, 2011 that

feature net asset value per share in tiers 2 and 3.

$ 131,383

164,572

152,082

41,632

88,374

30,712

$ 608,755

–

–

–

–

$ 47,492

21,079

$ 68,571

Daily, Monthly, Quarterly

Monthly, Quarterly

Quarterly

N/A

N/A

N/A

1–60 days

45–65 days

65 days

N/A

N/A

N/A

Global and DomesticLong Only Equity (a)

Equity long/short hedge funds (b)

Absolute Return hedge funds (c)

Enhanced Fixed Income (d)

Private Equity (e)

Private Real Assets (f)

Total

Fair Value(in thousands)

UnfundedCommitments

Redemptionfrequency if

currently eligibleRedemptionNotice Period

21

(a) This category includes investments in partnerships that invest primarily in common stocks

across various sectors and market caps and across different geographic regions. The firms do not

short and do not employ leverage. Investments representing approximately 74% of the value of this

category were liquid as of June 30, 2011. Generally, these funds do not have lock-up periods after

the initial investment.

(b) This category includes investments in hedge funds that invest primarily in equities, both long

and short. Managers of these funds have the ability to shift investments by geography, sector, and

exposure, both on a net and gross basis. Investments representing approximately 61% of the value

of this category were liquid as of June 30, 2011. Generally, restriction periods range from three to

twenty-four months as of June 30, 2011.

(c) This category includes investments in hedge funds that invest in event-related equity and

credit, arbitrage, short selling and other marketable assets and strategies. The category is

comprised of approximately 25% equity and the remainder debt and other investments, and

provides a consistent return, with low volatility and limited correlation to equity and fixed income

markets. Investments representing approximately 44% of the value of this category were liquid

as of June 30, 2011. Generally, restriction periods range from one to twenty-one months as of

June 30, 2011.

(d) This category includes investments in hedge funds where managers pursue opportunistic

exposure to distressed loans and other senior credits, emerging market debt and high yield bonds.

The category is comprised of approximately 20% equity and the remainder debt and other invest-

ments, and provides a consistent return, with low volatility and limited correlation to equity and

fixed income markets. Only 8% of the investments in this category were not available to be

redeemed because of lockup restrictions as of June 30, 2011.

(e) This category includes private equity partnerships including buyout, venture capital, and

distressed investment funds. Many of the partnerships are funds of funds that invest in multiple

funds across strategies. These investments cannot be redeemed. Distributions from each fund will

be received as the underlying investments are liquidated. Most funds have a primary term of ten

years. Approximately 41% of private equity NAV is in buyout strategies, 37% in venture capital,

18% in distressed, and 4% in other.

(f) This category includes several partnerships in oil and gas and U.S. real estate funds. Many of

these partnerships are funds of funds that invest in multiple funds. These investments cannot be

redeemed but are subject to liquidation distributions as the underlying investments are liquidated.

Most funds have a primary term of ten years. Approximately 84% of the NAV in this category is in

oil and gas and natural resources partnerships. The remaining 16% is in real estate funds.

22

Endowment dividend and interest income, net of expenses, amounted to approximately

$3.4 million and $5.1 million respectively, for the years ended June 30, 2012 and 2011.

In accordance with the university’s endowment spending policy, $37.1 million and $37.5 million

of accumulated gains were used to fund current operations for the years ended June 30, 2012

and 2011, respectively. Unrestricted investment income and gains consist primarily of earnings

on unspent bond proceeds.

Temporarily restricted net assets at June 30, 2012 and 2011 include annuity, life income and

other investments at market value of approximately $28.6 million and $28.7 million respectively.

Permanently restricted net assets at June 30, 2012 and 2011, include the investment assets at

fair value of the Tulane Murphy Foundation (the Foundation) that amounted to $67.5 million

and $63.8 million, respectively. The university is the sole beneficiary of the Foundation, and a

majority of the Foundation’s directors are members of the university’s Board of Administrators.

During the years ended June 30, 2012 and 2011, income from the Foundation, which is restrict-

ed to specific purposes, amounted to approximately $1.9 million and $1.7 million, respectively.

Investment return, net of investment management fees of $11.1 million and $9.8 million for

2012 and 2011, respectively, is composed of the following for the years ended June 30, 2012

and 2011 (in thousands):

2012 2011

Operating:

Endowment income $ 41,860 $ 42,679

Investment income and gains, net 2,861 5,803

Total Operating Return 44,721 48,482

Non Operating:

Net realized and unrealized gains (losses) (31,664) 151,167

Accumulated gains used for spending (37,112) (37,535)

Total non-operating return (68,776) 113,632

Total investment return $ (24,055) $ 162,114

23

T E M P O R A R I L Y A N D P E R M A N E N T L YR E S T R I C T E D N E T A S S E T S

Temporarily restricted net assets at June 30, 2012 and 2011, (in thousands) benefit the

following functions:

2012 2011

Academic departments and instruction $ 330,405 $ 367,410

Student financial aid and scholarship 82,643 98,781

Capital projects 50,375 42,192

Operations 17,835 19,965

Total $ 481,258 $ 528,348

Permanently restricted net assets at June 30, 2012 and 2011, (in thousands) benefit the

following functions:

2012 2011

Academic departments and instruction $ 336,121 $ 332,677

Student financial aid and scholarship 163,328 157,670

Operations 21,280 20,445

Total $ 520,729 $ 510,792

7

24

E N D O W M E N T F U N D S A N D D I S C L O S U R E SU N D E R A S C 9 5 8 - 2 0 5

Management for the university, with the Board of Administrator’s concurrence, has interpreted

UPMIFA as not expressly requiring the preservation of purchasing power (real value) for donor

restricted endowment funds absent donor stipulations to the contrary.

Tulane classifies as permanently restricted net assets the original value of gifts donated for

permanent endowment, any subsequent gifts to such endowments, and accumulations

subsequently made at the direction of the applicable donor instrument.

Endowment funds net asset composition as of June 30, 2012 and 2011 (in thousands):

2012

Temporarily PermanentlyUnrestricted Restricted Restricted Total

Donor restricted endowment funds – $ 344,469 $ 520,729* $ 865,198

Board designated endowment funds $ 80,978 – – 80,978

Total endowment funds $ 80,978 $ 344,469 $ 520,729 $ 946,176

2011


Donor restricted endowment funds – $ 403,544 $ 510,792* $ 914,336

Board designated endowment funds $ 90,402 – – $ 90,402

Total endowment funds $ 90,402 $ 403,544 $ 510,792 $ 1,004,738

*Funds reflect original gift corpus adjusted for any donor requirements.

8

25

Changes in endowment funds net assets for the year ended June 30, 2012 and 2011

(in thousands):

2012


Net assets, beginning of year $ 90,402 $ 403,544 $ 510,792 $1,004,738

Investment Return

Net appreciation

(realized and unrealized) (6,300) (25,087) – (31,387)

Total investment return (6,300) (25,087) – (31,387)

New gifts 10,669 10,669

Endowment assets used

for expenditure (3,124) (33,988) – (37,112)

Other – – (732) (732)

Total non investment changes (3,124) (33,988) 9,937 (27,175)

Net assets, end of year $ 80,978 $ 344,469 $ 520,729 $ 946,176

2011


Net assets, beginning of year $ 88,549 $ 296,276 $ 488,223 $ 873,048

Investment Return

Net appreciation

(realized and unrealized) 4,835 141,577 – 146,412

Total investment return 4,835 141,577 – 146,412

New gifts 23,448 23,448

Endowment assets used

for expenditure (3,226) (34,309) – (37,535)

Other 244 – (879) (635)

Total non investment changes (2,982) (34,309) 22,569 (14,722)

Net assets, end of year $ 90,402 $ 403,544 $ 510,792 $1,004,738

26

C O M P O S I T I O N O F E N D O W E D F U N D S

The university’s endowment fund assets are managed around asset components with different

characteristics. These are pooled endowment funds, funds managed under the Louisiana

Education Quality Support Fund (LEQSF), separately invested endowment funds, and university

owned real estate.

The approximate asset composition of these funds at June 30, 2012 and 2011 is as follows:

2012 2011

Pooled funds $ 667,460* $ 690,717*

LEQSF pooled funds 144,828 146,385

Separately invested funds 105,276** 133,330**

Contributions receivable 20,107 14,723

Investment income receivables and other 8,505 19,583

Total endowment related net assets $ 946,176 $1,004,738

*This category includes $32.4 million in university owed real estate that returned approximately $1.3 million and $0.6 million in net rents and royalties for the years ended June 30, 2012 and 2011.

**This category includes an investment of approximately $9.0 million and $14.0 million in University Healthcare System,L.L.C. and investments of approximately $46.1 million and $66.0 million in Murphy Oil Corporation common stock atJune 30, 2012 and 2011.

F U N D S W I T H D E F I C I T S

From time to time, the fair value of assets associated with individual endowment funds may fall

below the level that the donor or UPMIFA requires the university to maintain as a fund of perpetual

duration. These deficiencies fell across 167 and 205 individual endowment funds and totaled

approximately $6.4 million and $4.7 million at June 30, 2012 and 2011. Management is

monitoring these deficiencies and either discontinued or curtailed payouts on these funds in

fiscal 2011 and 2012.

R E T U R N O B J E C T I V E S A N D R I S K P A R A M E T E R S

The university has adopted endowment investment and spending policies relative to its pooled

endowment funds that attempt to provide a predictable stream of funding to programs supported

by its endowment while ensuring that purchasing power of the assets do not decline over time.

The pooled endowment assets are invested long term in a manner intended to produce results that

exceed the rate of inflation plus the payout percentage.

27

The Board of Regents of Louisiana (BOR) provides investment guidelines for LEQSF funds that

are more restrictive in terms of investment choices that are available. Accordingly, these funds

are managed with the expectation of lower volatility and with a bias toward preservation of capital.

Even so, the long term expectation is that these funds will generally return inflation plus 5%.

Separately invested funds are managed to meet donor expectations.

S T R A T E G I E S E M P L O Y E D F O R A C H I E V I N G O B J E C T I V E S

To satisfy its long term rate of return objectives, the university relies on a total return strategy in

which investment returns are achieved through both capital appreciation (realized and unrealized)

and current yield (interest and dividends). The university targets a diversified asset allocation that

places a greater emphasis on equity–based investments to achieve its long term return objectives

within prudent risk constraints.

S P E N D I N G P O L I C I E S A N D I N V E S T M E N T O B J E C T I V E S

The university has a policy with respect to its pooled endowment funds of appropriating for distri-

bution each year approximately 5.0% of its pooled endowment fund’s average fair value over the

prior 12 quarters through the calendar year end preceding the fiscal year in which the distribution

is planned.

This policy is consistent with the objective of maintaining the purchasing power of the endowment

assets as well as to provide additional real growth through investment return. In the years ended

June 30, 2012 and 2011 the university used approximately $33.6 million and $32.1 million in

pooled endowment assets for spending.

The BOR provide spending guidelines for those accounts that are matched by state funds through

the LEQSF program. Those guidelines generally provide for preservation of capital via consumer

price index measurements and by averaging the fund values of the previous five years. Generally

values that fall below the CPI adjusted balances will forgo a distribution in the subsequent year.

For fiscal 2012, the BOR suspended application of the CPI feature of its payout formula, thus

allowing payouts in fiscal 2012 when fund value is higher than original fund corpus. In the years

ended June 30, 2012 and 2011, the university used approximately $6.0 million and $5.4 million,

respectively, in such assets for spending.

Separately invested funds generally produce dividends and interest that are then made available

for spending. In the years ended June 30, 2012 and 2011, such items totaled $2.0 million and

$2.2 million, respectively.

E N D O W M E N T A S S E T S U S E D F O R S P E N D I N G

The university made $37.1 million and $37.5 million of endowment assets available for spending in

the years ended June 30, 2012 and 2011, respectively.

28

P R O P E R T Y , P L A N T A N D E Q U I P M E N T

Property, plant and equipment consist of the following at June 30, 2012 and 2011

(in thousands):

2012 2011

Land $ 22,369 $ 22,369

Buildings and improvements 861,480 784,532

Equipment 185,078 180,029

Library books and materials 150,879 141,772

Construction in progress 31,219 55,163

Gross property, plant and equipment 1,251,025 1,183,865

Less: accumulated depreciation (514,953) (472,468)

Property, plant and equipment, net $ 736,072 $ 711,397

The university capitalizes interest related to construction of major facilities. Capitalized interest

is recorded as part of the related asset, and is amortized over the asset’s estimated useful life.

Capitalized interest amounted to $0.3 million and $1.3 million, respectively, for the years ended

June 30, 2012 and 2011.

At June 30, 2012 the university’s construction in progress included amounts for a network and

technology upgrade and an uptown research facility. Purchases of property, plant and equipment

included in accounts payable as of June 30, 2012 total $2.8 million.

9

29

N O T E S P A Y A B L E A N D L I N E S O F C R E D I T

Notes payable at June 30, 2012 and 2011, consist of the following (in thousands):

Amounts drawn under short term credit lines, as described below

One unsecured note for $1.5 million due in installments through

2036 with interest fixed at 4%.

Two unsecured term notes dated June 2006 with quarterly

principal installments ranging from $125 to $500 with

$15 million due in June 2013. Interest is borne at the London

Interbank Offered Rate (LIBOR) minus 50 basis points

(0% and 0% at June 30, 2012 and 2011).

Four unsecured term notes totaling $20.5 million drawn under a

non revolving credit agreement dated December 2007. Principal

installments commenced at $107 per quarter on January 1,

2009 and peak in fiscal 2014 at $430 per quarter. The notes

term out through 2047 at $101 per quarter. Interest is borne

at LIBOR plus 77 basis points (1.24% and 1.07% at June 30,

2012 and 2011).

Total notes payable

The university had $140 million in lines of credit with four banks to meet short term seasonal

cash requirements at June 30, 2012 and 2011. The lines expire as follows: $40 million on May

23, 2013, $20 million on March 27, 2013, $50 million on December 31, 2013 and $30 million

on April 4, 2013. Principal is payable upon demand. At June 30, 2012 and 2011, there was

$33.650 million and $19.751 million drawn on these lines, respectively. Interest rates applicable

to these lines are based on several defined indices.

10

$ 33,650

1,385

17,125

18,994

$ 71,154

2012 2011

$ 19,751

1,422

17,625

19,424

$ 58,222

30

B O N D S P A Y A B L E

Bonds payable consist of the following at June 30, 2012 and 2011 (in thousands):

Mortgage Bonds Series 1982 with annual maturities through

2022, fixed interest rate of 3.00%.

Tax exempt Louisiana Public Facilities Authority Refunding

Revenue Bonds Series 2007 A-1 with annual maturities of

$5,160 to $13,805 from 2014 through 2035, fixed interest

rates from 4% to 5%.


Revenue Bonds Series 2007 A-2 with annual principal payments

of $1,525 to $4,045 from 2013 through 2036, bearing interest

at 67% of three-month LIBOR plus 70 basis points. The rate in

effect at June 30, 2012 is 1.01%.


Revenue Bonds Series 2007B with maturities of $12,950 on

December 15, 2022 and $20,535 on December 15, 2032.

The series was issued as taxable with conversion to tax exempt

rates scheduled for December 18, 2007. The conversion took

place as scheduled. The interest rate in effect at June 30, 2012

was 4.55% on the bonds due in 2022 and 4.65% on the bonds

due in 2032. Annual principal payments of $1,045 to $2,510

are due from 2014 to 2032.

The Administrators of the Tulane Educational Fund Series 2007C

Taxable Refunding Revenue Bonds with annual principal payments

ranging from $2,110 to $7,590 from 2013 through 2036, bearing

interest at three-month LIBOR plus 30 basis points. The rate in

effect at June 30, 2012 was 0.76%.

(continued)

11

$ 915

192,565

45,685

33,485

103,135

$ 985

192,565

62,180

33,485

103,135

2012 2011

31

$ 16,534

30,000

–

439,884

8,311

$ 447,195

Tax Exempt Louisiana Public Facilities Authority Variable

Rate Revenue Bonds, Series 2009 (Dormitory) was delivered

on December 9, 2009 and matures December 9, 2041. The face

value of the issue is $30,000 with draws being made to fund

construction. Principal is due in annual installments beginning

with $365 on December 9, 2012 and ending with $2,120 on

December 9, 2041. These bonds can be called at any time and

may be put by the bondholder after 10 years and every 5 years

thereafter. Interest is priced at 67% of the sum of one-month

LIBOR plus 3.50%. At June 30, 2012 this rate was 2.51%.

Tax exempt Louisiana Public Facilities Authority Variable

Rate Bonds, Series 2010 (Energy) were delivered on

March 25, 2010 and mature on March 25, 2042. The face

value of the issue is $30,000 with draws being made in

calendar 2010 to fund construction. Principal is scheduled

in annual installments beginning in fiscal 2012 at $250

and ending in fiscal 2042 with $1,500. The bonds may be

called at any time and may be put by the bondholder after

10 years and every 5 years thereafter. Interest is priced

monthly at 67% of the sum of one-month LIBOR plus 2.65%.

At June 30, 2012 this rate was 1.94%.

Tax exempt Louisiana Public Facilities Authority Variable Rate

Revenue Bonds, Series 2012 was delivered on May 24, 2012

and matures on May 24, 2019. The face value of the issue is

$11,325 with draws being made to fund technology improvements

and equipment. Principal is scheduled in bi-annual installments

beginning in 2013 at $500, with a final repayment amount of

$5,825 due May 24, 2019. At June 30, 2012 this rate was 2.15%.

Total bonds payable principal outstanding

Bond underwriters premium

Bonds payable

$ 30,000

29,750

11,325

446,860

7,983

$ 454,843

2012 2011

32

The university issued tax exempt bonds in 2010 through the LPFA to support undergraduate

campus dormitory construction and medical school campus infrastructure improvements. The

Series 2010 bonds were fully drawn by December 31, 2010 whereas the Series 2009 bonds

have been fully drawn to match construction requirements that are expected to conclude by

December 31, 2012. In each case the bond purchaser is a large commercial bank.

During 2012 the university purchased par $16.495 million of Series A-2 bonds. The trustee was

instructed to retire these bonds. A realized gain of $1.922 million is included in other revenues

on the statement of activities.

The 2007A-1 Series proceeds were used to establish a proceeds fund to defease portions of five

earlier tax exempt bond issues. The 2007A-2 Series proceeds were used to redeem $61 million in

previously issued taxable bonds. The 2007B Series proceeds were used to escrow $31.820 million

toward redemption of certain 1997 tax exempt issues. The 2007C Series proceeds were applied

toward escrows established to defease portions of six previous tax exempt issues and three

previous taxable issues.

The annual principal maturities for bonds payable at June 30, 2012 are as follows (in thousands):

Fiscal Year Amount

2013 $ 4,175

2014 11,805

2015 12,515

2016 13,040

2017 13,625

2018 and thereafter 391,700

Total $ 446,860

All of the above described outstanding bonds payable, excluding the mortgage bonds payable,

are general obligations of the university. The university is required to comply with certain

covenants that, if not met, limit the incurrence of additional certain long term indebtedness

and the sale of certain assets. The university was in compliance with its covenants at June 30,

2012 and 2011. The mortgage bonds are secured by first mortgages on the facilities financed

and by endowment and similar fund investments in government bonds having a book value and

a market value approximating one hundred twelve thousand dollars at June 30, 2012 and

2011. In addition, annual net revenues from the residence halls and from student fees are

pledged for debt service to the mortgage bonds.

33

13

D I S C L O S U R E O F F A I R V A L U E O F F I N A N C I A L I N S T R U M E N T S

The estimated fair value of all significant financial instrument amounts has been determined

by the university using available market information and appropriate valuation methodologies.

The following methods and assumptions were used to estimate the fair value of each class of

financial instrument.

Accounts and Contributions Receivable — The university considers the carrying amounts of these

financial instruments to approximate fair value.

Loans Receivable — Loans receivable are amounts principally due from students under federally

sponsored programs that are subject to significant restrictions. Accordingly, it is not practical to

determine fair value.

Investments — Investments at fair value were approximately $914 million and $963 million at

June 30, 2012 and 2011. Market values are used when available. Other investments totaling

approximately $55 million and $69 million are reported at carrying values because it was not

practical to apply fair valuation techniques and application of such techniques was not expected

to result in materially different values (see Note 6).

Bonds Payable — The fair value was approximately $438 million and $424 million at June 30,

2012 and 2011, respectively. The fair value was estimated using rates currently available for debt

with similar terms and remaining maturities.

Other — The university considers the carrying amounts of all other financial instruments to be a

reasonable estimate of fair value.

R E T I R E M E N T P L A N S

Retirement benefits for substantially all employees are provided through the Teachers Insurance

and Annuity Association, the College Retirement Equities Fund and Fidelity Investments. Under

these defined contribution plans, contributions are applied, as directed by each participant, to

annuities and/or to the purchase of shares or participation units in a variety of mutual funds.

The amount of contributions made by the university is based upon the employee’s salary. Plan

contributions are funded as they accrue. For the years ended June 30, 2012 and 2011, contri-

butions to the plans were approximately $19 million and $18 million, respectively.

12

34

P R O F E S S I O N A L L I A B I L I T Y I N S U R A N C E

The university maintains a self-insurance program for professional medical services rendered by its

medical faculty, including residents and interns. The trust fund assets of $11,809,000 and

$11,837,000 and associated liabilities of $9,869,000 and $9,805,000 at June 30, 2012 and

2011, respectively, are included in unrestricted net assets.

During 1976, the State of Louisiana enacted legislation that created a statutory limit of $500,000

for each medical professional liability claim and established the Louisiana Patient Compensation

Fund (State Insurance Fund) to provide professional liability insurance to participating health care

providers. The constitutionality of the statutory limit has been upheld by the Louisiana Supreme

Court, but is subject to its review at any time. The university participates in the State Insurance

Fund, which provides up to $400,000 of coverage for settlement amounts in excess of $100,000

per claim. The university carries commercial liability insurance for claims that might exceed

amounts funded by the self-insurance trust fund or the State Insurance Fund.

C O M M I T M E N T S A N D C O N T I N G E N C I E S

Amounts received and expended by the university under various federal and state programs are

subject to audit by governmental agencies. Management believes that adjustments, if any, that

might result from such audits would not have a significant impact upon the financial position of

the university.

The university is a party to various litigation and other claims, the outcome of which cannot be

presently determined. Management’s opinion is that the outcome of such matters would not have

a significant effect upon the university’s financial position or statement of activities.

14

15

35

O P E R A T I N G L E A S E S — L E S S E E

The university leases certain real property. These leases are classified as operating leases and have

lease terms ranging up to twelve years. Total lease payments amounted to approximately $4.213

million and $3.985 million, respectively, for the years ended June 30, 2012 and 2011. Future

minimum rental payments on non-cancellable operating leases with lease terms in excess of one

year as of June 30, 2012, are as follows (in thousands):

Fiscal Year Amount

2013 $ 4,033

2014 3,572

2015 3,649

2016 3,370

2017 3,096

2018 and thereafter 264

Total $ 17,984

O P E R A T I N G L E A S E S — L E S S O R

The university leases office and other rental space to other businesses. Lease terms range from

one to 99 years, with options of renewal for additional periods. All such property leases provide

for minimum annual rentals and all rental revenue has been recorded on a straight-line basis.

Following is a schedule by years of future minimum rental payments under operating leases as

of June 30, 2012 (in thousands):

Fiscal Year Amount

2013 $ 2,406

2014 2,131

2015 1,476

2016 1,492

2017 1,407

2018 and thereafter 80,638

Total $ 89,550

The 99 year land lease dated March 1995 relates to the hospital/clinic as described in note 16.

36

S H A R E D S A V I N G S A G R E E M E N T

The university entered into an agreement dated December 2006 with a major energy controls

company to construct and install energy conservation improvements and measures valued at

approximately $17 million on the university’s main campus. The physical assets are owned by

a third party with whom the university has contracted to share future energy savings associated

with more efficient operation of the physical facilities. Over the twelve-year term, the university

expects to share annual energy cost savings of $2.7 million to $3.4 million with the third party

owner. Realization of the energy savings are guaranteed by the energy controls company. The

university may purchase the fixed assets at the end of the term for fair market value. The

university paid the owner $3.4 million and $2.7 million during the years ended June 30, 2012

and 2011, respectively, under this agreement and such amounts are included in the plant

operations and maintenance cost total.

I N T E R E S T R A T E C O L L A R S A N D S WA P S ( I N T H OU S A N D S )

The university entered into two interest rate collars on February 29, 2008 in replacement of an

interest rate hedge completed in fiscal 2006. The first collar was an interest rate hedge of the

university’s taxable variable rate debt. This collar had a notional amount of $103,135, and

terminated on February 15, 2011.

On January 23, 2009 the university entered into a forward starting swap of interest rates that is

effective February 15, 2011 pursuant to continued hedging of the university’s taxable variable

rate debt. The notional amount is $103,135. The university accepted a fixed rate of 3.195% in

exchange for its 3-month U.S. Dollar LIBOR rate. The swap terminates in February 2017. The fair

values of this swap at June 30, 2012 and 2011 were $10,384 and $5,584 due the counterparty.

In a second transaction, a hedge was devised to protect against interest rate fluctuations on the

university’s tax exempt variable rate debt. This swap had a notional amount of $62,180, terminat-

ed on February 15, 2011 and featured a floor and a cap based on 67% of the 3-month U.S,

Dollar LIBOR rate (67% of LIBOR). This arrangement was amended on January 23, 2009 and

replaced with an interest rate swap wherein the university fixed its interest rate at 2.334% until

maturity in February 2017. The fair values of this arrangement at June 30, 2012 and 2011 were

$4,677 and $2,875, respectively, due the counterparty.

In two additional interest rate swap transactions executed on December 22, 2008, the university

fixed its LIBOR interest rates on two variable rated notes payable with beginning notional values

of $17,112 and $18,750 at 2.34% and 2.18% until June 22, 2013 and December 21, 2014

respectively. The combined fair values of these arrangements were $919 and $1,066 due the

counterparty at June 30, 2012 and 2011.

The combined values of these agreements at June 30, 2012 and 2011 were included as approxi-

mately $15,980 and $9,525 in the caption accounts payable and accrued liabilities on the

Statement of Financial Position. In 2012, the effect on the statement of activities is recorded in

37

the non-operating section as $6,455 in net unrealized losses on interest rate swaps. The fair value

of the interest rate swap is based on the present value of the fixed and floating portions of the

agreements and therefore is considered a tier 3 input (See Note 6).

A roll forward of the fair value measurements for the university’s financial liability measured at esti-

mated fair value on a recurring basis using significant unobservable (Level 3) inputs for year ended

June 30, 2012 and 2011 is as follows (in thousands):

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Total Realized/UnrealizedGains (Losses) included in:

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Total Realized/UnrealizedGains (Losses) included in:

H O S P I T A L / C L I N I C J O I N T V E N T U R E

Effective March 31, 1995, the university entered into a joint venture agreement with Hospital

Corporation of America (HCA), for the continued operation of the Tulane University Hospital and

Clinic. Under the joint venture agreement, a new entity, University Healthcare System, L.C.

(UHS), a Louisiana Limited Liability Corporation, was formed. Through June 30, 2005, the

university retained a 20% interest in UHS. Effective July 1, 2005, the university accepted a

dilution in interest to 17.25% when HCA contributed Lakeside Hospital to the partnership.

Under the terms of the joint venture agreement, the university provides services to UHS under

a Shared Services Agreement, an Academic Affiliation Agreement and other related agreements.

These services include a variety of overhead services, such as plant operations, security and

telecommunications, as well as a variety of direct and indirect medical educational and related

16

Balance,July 1, 2011

Realized Gains(Losses)

UnrealizedGains (Losses)

Purchases,Sales, Issuancesand Settlements

Transfer Inand/or Outof Level 3

Balance,June 30, 2012

$ (9,525) $ – $ (6,455) $ – $ – $ (15,980)

Balance,July 1, 2010

Realized(Losses) Gains

Unrealized(Losses) Gains

Purchases,Sales, Issuancesand Settlements

Transfer Inand/or Outof Level 3

Balance,June 30, 2011

$ (8,270) $ – $ (1,255) $ – $ – $ (9,525)

38

services. Additionally, the university leases to UHS the land upon which the hospital and clinic

facilities are located, and leases office space to UHS and to HCA in a university-owned building.

For the year ended June 30, 2012 and 2011, the university recorded revenue and cost recover-

ies of approximately $44.9 million and $44.1 million, and as of June 30, 2012 and 2011,

recorded approximately $2.6 million and $2.3 million as receivable from UHS, related to

these agreements.

Summarized audited financial information about the financial position of the unconsolidated

joint venture entity as of December 31, 2011 and 2010 are as follows (in thousands):

Current assets $ 64,503 $ 71,744

Property plant and equipment, net 93,048 96,259

Other assets 116 124

Total assets $ 157,667 $ 168,127

Current liabilities $ 95,651 $ 79,783

Long term debt 6,847 7,336

Total liabilities 102,498 87,119

Partners’ equity 55,169 81,008

Total liabilities and partners’ equity $ 157,667 $ 168,127

Summarized financial results for the years ended December 31, 2011 and 2010 are as follows

(in thousands):

Net revenues $ 407,019 $ 431,262

Operating expenses 409,756 383,072

Depreciation and amortization 15,980 16,864

Goodwill Writeoff – 37,955

Other 7,543 8,857

Net loss $ (26,260) $ (15,486)

The university’s share of partners’ equity at June 30, 2012 and 2011 was approximately

$9 million and $14 million, respectively.

2011 2010

2011 2010

39

$ 232,897

12,986

78,361

324,244

28,074*

(112,458)

(160,632)

79,228**

$ 84,757

(5,529)

–

$ 79,228

H U R R I C A N E K A T R I N A

On August 29, 2005, Hurricane Katrina struck the Gulf Coast area causing widespread damage

throughout the region, including the New Orleans Metropolitan area. The university’s campuses

experienced extensive property damage from the hurricane, including the losses of research-related

assets, fine arts materials, equipment, building contents and valuable documents. Hurricane

Katrina caused a necessary interruption of Tulane’s business. The university resumed partial

operations with the spring 2006 semester. The university incurred significant costs to replace,

repair, and remediate damage to its properties, demolish and remove damaged improvements

and contents, and to reconstruct facilities and buildings.

Estimated cumulative disaster losses (excluding business interruption costs) and costs as of

June 30, 2012 and 2011 are summarized as follows (in thousands):

Restoration of buildings and grounds

Equipment replacements

Other incremental disaster-related operating costs

Direct gross incremental out-of-pocket disaster costs

Net book value of fixed improvements and equipment destroyed

Less: construction and replacement equipment capitalized

National Flood Insurance Program, FEMA, and other

insurance recoveries

Disaster costs, net of recoveries

Net amount expensed in fiscal 2007–2010

Net amount recovered in fiscal 2011

Net amount recovered in fiscal 2012

Total disaster costs

*Net book value destroyed was determined on the basis of replacement costs deflated to the in service date and depreciated to the loss date.

**Excludes business interruption, certain research losses, and lost arts and library materials.

17

$ 237,371

12,986

80,102

330,459

28,074*

(117,430)

(171,876)

69,227**

$ 84,757

(5,529)

(10,001)

$ 69,227

2012 2011

40

The university had commercial insurance policies in effect at the time of the hurricane,

including all risks property, casualty, library and fine arts, and specialized equipment in

addition to National Flood Insurance policies. As of June 30, 2012, the university had

received approximately $300 million in commercial and National Flood Insurance Policy

recoveries. Unallocated commercial insurance recoveries totaling $225 million were recorded

as operating revenues in the statements of activities across fiscal 2007 and 2006. During

fiscal 2009, the university reached final settlement with its fourth and final layer of property

insurance and recorded proceeds in the amount of $3.0 million included in the caption net

disaster recoveries in the accompanying statement of activities.

The university also qualifies for assistance through various state and federal government

agencies such as FEMA. University representatives are working with FEMA and the state to

identify costs that qualify for reimbursement.

The following constitutes a summary of the university’s cumulative funding from FEMA at

June 30, 2012 and 2011:

2012 2011

Cumulative FEMA cash received $ 105,782 $ 95,708**

Receivable from FEMA 234 70

Total FEMA cash received and receivable $ 106,016 $ 95,778

Cumulative FEMA advances recognized as recoveries $ 93,694 $ 85,140*

FEMA advances recorded as deferred revenue 12,322 10,638***

Total cost recoveries and deferred revenue $ 106,016 $ 95,778

*Of this amount, $11.2 million and $5.7 million were recognized in disaster cost recoveries in the years ended June 30, 2012 and 2011, respectively.

**Of this amount, $10.0 million and $7.0 million were received in the years ended June 30, 2012 and 2011, respectively.***This amount will be recognized when FEMA obligates the underlying projects’ worksheets.

S U B S E Q U E N T E V E N T S

The university completed its subsequent events reviews through November 9, 2012 for the years

ended June 30, 2012 and 2011, respectively.

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