median report not-for-profit organizations confront ......not-for-profit organizations confront...
TRANSCRIPT
MEDIAN REPORT
U.S. PUBLIC FINANCE SEPTEMBER 18, 2014
Table of Contents:
SUMMARY 1 PRESSURE ON REVENUE GROWTH INTENSIFIES FOR MANY ORGANIZATIONS 2 OPERATING PERFORMANCE REMAINS STABLE WITH EXPENSE CUTS 3 FINANCIAL RESOURCE GROWTH SERVES AS A CREDIT STABILIZER 3 CAPITAL SPENDING MODERATES, A POTENTIAL LONG TERM COMPETITIVE ISSUE 4 APPENDICES 7 MOODY’S RELATED RESEARCH 35
Analyst Contacts:
NEW YORK +1.212.553.1653
Matthew Kuchtyak +1.212.553.6930 Associate Analyst [email protected]
Susan Fitzgerald +1.212.553.6832 Senior Vice President [email protected]
Karen Kedem +1.212.553.3614 Vice President - Senior Analyst [email protected]
Kendra M. Smith +1.212.553.4807 Managing Director - Public Finance [email protected]
Edith Behr +1.212.553.0566 Vice President - Senior Credit Officer [email protected]
Not-for-Profit Organizations Confront Ongoing Revenue Pressure in Fiscal 2013 Medians Investment Returns and Philanthropy Serve as Credit Stabilizers for Some
Summary
Fiscal year (FY) 2013 not-for-profit organization medians reflect intensifying revenue pressure, with a rising number of organizations unable to generate top line growth. Revenue strains will force organizations to continue to contain costs to maintain stable operating performance. These pressures are partially mitigated by growing financial reserves, with stronger philanthropy and investment returns supported by market conditions.
The FY 2013 not-for-profit organization medians1 highlight the following trends:
» Pressure on revenue growth intensified, with 40% of not-for-profit organizations experiencing a decline in operating revenue in FY 2013. Lower-rated entities, research institutes, and service and advocacy organizations faced the greatest revenue constraints. Pressure on unrestricted earned revenue will continue for most sub-sectors. Philanthropic organizations will fare the best as investment income and fundraising rebound, while research institutes will continue to be the most pressured.
» Many not-for-profit organizations have successfully managed expenses to sustain steady operating performance. Most not-for-profits benefit from having a flexible expense structure, allowing them to adjust expenditures to compensate for declining revenues. Expense pressures will build in coming years, however, as not-for-profits, particularly those that act in a competitive marketplace, such as museums, will need to invest to remain attractive.
» Growing financial resources act as a credit stabilizer as more not-for-profits recover cash lost during the recession. Given shrinking expense bases for many organizations, financial reserves now provide greater flexibility relative to operations. Over 73% of not-for-profits’ cash and investments exceeded FY 2008 levels in FY 2013, a percentage expected to grow in FY 2014 and 2015 given investment returns.
» Capital spending has slowed significantly, with the median age of plant climbing each of the past five years. Sector-wide debt issuance has moderated, as capital investment declines following a period of large investment before the recession. Cultural organizations and research institutes – those sub-sectors generally the most reliant on sustained capital investment – have cut back significantly in recent years.
1 Moody’s medians for not-for-profit organizations are based on our analysis of fiscal year 2013 data for 95% of our rated non-for-profit organizations (other than
education and healthcare). We currently rate 96 separate organizations in this sector based on their stand-alone credit quality. See Appendix I for descriptions of and key statistics for the four sub-sectors covered by this report: cultural organizations, philanthropic organizations, research institutes, and service and advocacy organizations.
U.S. PUBLIC FINANCE
2 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Pressure on revenue growth intensifies for many organizations
Revenue growth intensified in FY 2013, with 40% of not-for-profit organizations experiencing a decline in operating revenue. The median revenue growth for the sector, at 1.8%, lagged our 2% proxy for inflation for the first time since FY 2010. Intensifying revenue pressure continues a trend that has plagued not-for-profit organizations since the financial crisis. An average of 39% of organizations have experienced annual declines in operating revenue over the past five fiscal years, compared with just 18% from FY 2004-2008.
Revenue pressure is not spread evenly across sub-sectors (see Exhibit 1). Research institutes and service and advocacy organizations experienced a disproportionate share of revenue pressure in FY 2013, with 59% and 46%, respectively, experiencing declines in operating revenue. Research institutes were adversely affected by constrained grant revenue, with just three rated research institutes increasing grant and contract revenue in FY 2013. Even those sub-sectors that fared better on a relative basis experienced increasing revenue pressure in FY 2013. Median revenue growth for cultural institutions, for example, fell to 2.3% from a robust 6.0% in FY 2012.
EXHIBIT 1
Sub-sectors Experience Different Periods of Revenue Pressure % of Rated Not-for-Profit Organizations with Declining Revenue, by Sub-sector
Note: ARRA supplemental funding paid in FY 2009 and FY 2010 bolstered research institutes’ revenue. Source: Moody's Investors Service
Not-for-profits across most sub-sectors will face continued revenue pressure. Constrained government funding, changing technology, increased competition, and shifting consumer preferences will challenge organizations to grow revenue at the rate of inflation in coming years. Philanthropic organizations will fare the best given their reliance on investment returns and philanthropy. Research institutes will continue to be the most pressured as even elite institutions struggle in a stagnant funding environment.2
2 Independent Research Institutes: Challenging Environment Drives Multiple Strategies, September 2014
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
% o
f Not
-for
-Pro
fits
with
Dec
linin
g Re
venu
e
Fiscal Year
Recessionary Years Cultural Organizations Philanthropic OrganizationsResearch Institutes Service and Advocacy Organizations
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
U.S. PUBLIC FINANCE
3 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Operating performance remains stable with expense cuts
Despite sustained revenue pressures, many not-for-profit organizations have maintained stable operating performance over the past five years by cutting expenses to compensate for declining revenue (see Exhibit 2). The median operating margin and cash flow margin have remained relatively unchanged between FY 2009 and FY 2013.
EXHIBIT 2
Not-for-Profits Have Lowered Expenses to Combat Declining Revenues
Source: Moody's Investors Service
While most organizations have maintained operating performance despite top line pressure, a material number are experiencing considerable operating stress. Nearly one-third of rated not-for-profits across all sub-sectors had an operating cash flow margin below 5% in FY 2013.
Not-for-profits have also become more reliant on gift revenue. In FY 2013, not-for-profit organizations would have run a median 22.3% deficit excluding gift revenue, compared to a 16.6% deficit in FY 2009.
Moving forward, expense pressures will build on not-for-profits, particularly impacting those organizations that need to invest to thrive in competitive markets. Organizations with a small scale and less ability to garner efficiencies will be the most pressured.
Financial resource growth serves as a credit stabilizer
Strong market returns led to increased financial resources in FY 2013, as balance sheets were bolstered by investment income and strong philanthropic support. Sector-wide cash and investments grew by $7.2 billion in FY 2013, or 10.7%, to an aggregate $74.9 billion. Similar to other sectors where balance sheet strength is a significant credit factor (such as private colleges and universities), nearly three-quarters of organizations have recovered cash lost during the recession (see Exhibit 3). Financial reserves now provide a greater operating cushion, especially given declining or stagnant expenses for many not-for-profits. Further improvement in sector-wide balance sheets is expected for FY 2014 and 2015 due to favorable investment performance.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
% o
f Rat
ed N
ot-f
or-P
rofit
s
Fiscal Year
% of NFPs with Declining Revenues % of NFPs Cutting Expenses
U.S. PUBLIC FINANCE
4 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
EXHIBIT 3
Gradual Growth in Cash Serves as a Credit Stabilizer % of Rated Entities with Total Cash & Investments Greater than FY 2008 Levels
Source: Moody's Investors Service
Philanthropic and cultural organizations benefit the most from the financial markets’ rebound as they have larger endowments and greater philanthropy. Service and advocacy organizations benefit the least since investment income and gifts are generally not meaningful contributors to the their credit profiles.
Capital spending moderates, a potential long term competitive issue
Capital spending has slowed significantly over FY 2009-2013, with median age of plant increasing in each of the last five years. Nearly two-thirds of not-for-profits failed to invest in capital at a level sufficient to fund depreciation in FY 2013, compared with just 37% in FY 2008 (see Exhibit 4). One large sale by Howard Hughes Medical Institute (Aaa stable) contributed to an overall sector-wide increase in debt in FY 2013. Aggregate debt outstanding declined slightly for the other 90 rated entities in the sample set.
EXHIBIT 4
Many Not-for-Profits Reduce Capital Investment, Leading to Increasing Age of Plant
Source: Moody's Investors Service Although not-for-profit organizations have varying capital needs, cultural organizations and research institutes – those sub-sectors with the greatest need to invest in capital to remain competitive – have reduced capital investment the most. The median capital spending ratio, which compares annual capital investment to depreciation, declined to 0.59 in FY 2013 from 2.05 in FY 2009 for cultural organizations. Capital spending at research institutes declined to a median 0.74 from 1.28 over the same period.
40.0%
46.7%
63.3% 63.3%
73.3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2009 2010 2011 2012 2013
% o
f Rat
ed E
ntiti
es
Fiscal Year
Not-for-Profit Organizations Private Colleges & Universities
8.0
8.5
9.0
9.5
10.0
10.5
11.0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007 2008 2009 2010 2011 2012 2013
Median Age of Plant (x)
% o
f NFP
s by
Cap
ital S
pend
ing
Ratio
Buc
ket
Fiscal Year
Less than 1x 1x-2x 2x-3x Above 3x Median Age of Plant [right axis]
U.S. PUBLIC FINANCE
5 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Since many organizations invested heavily in capital projects up until the financial crisis, a hiatus in capital spending is not necessarily a significant near-term credit concern. However, we expect that capital-intensive institutions, most of which have sharply decreased capital investment post-recession, will require additional investment over the next several years to remain competitive, likely resulting in additional borrowing.
U.S. PUBLIC FINANCE
6 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Basis for medians Moody’s medians for not-for-profit organizations are based on our analysis of fiscal year 2013 data for 95% of our rated not-for-profit organizations (other than education and healthcare). We currently rate 96 separate organizations in this sector based on their stand-alone credit quality. This excludes 15 public university foundations for which the credit strength of their affiliated universities is factored into their ratings.
The appendices include medians and other financial statistics for not-for-profit organizations as of September 2, 2014 as presented below:
» Appendix I: Overview of Not-for-Profit Organization Sub-sectors
» Appendix II: Not-for-Profit Medians, FY 2009-2013
» Appendix III: Not-for-Profit Medians by Rating Category
» Appendix IV: Not-for-Profit Medians by Sub-sector
» Appendix V: Rated Institutions by Sub-sector
» Appendix VI: Rated Institutions by Rating
» Appendix VII: Moody's Not-for-Profit Ratio Definitions Medians for some rating categories and sub-sectors presented in Appendix III and Appendix IV are based on relatively small sample sizes. These medians, therefore, may be subject to potentially substantial year-over-year variation.
The medians are the outcome of a complex rating process that incorporates a broad variety of quantitative and qualitative factors. As such, there will be a wide range of values for individual ratios within each rating category. In assigning ratings, we do not assign an organization’s precise rating level simply by comparing ratios to medians, but rather weigh core credit variables over time as well as in relation to broad competitive trends in the sector. These variables include market position, operating performance, balance sheet and capital investment, governance and management, as well as legal security and debt structure.
Data for FY 2009 – 2012 may not match the December 2013 publication of the FY 2012 not-for-profit organization medians. Data included in this report are based on current ratings, as of September 2, 2014, which may have changed since the publication of the FY 2012 medians in December 2013. In addition, the data for this publication include initial ratings assigned since December 2013 as well as any data adjustments made since that time. Fiscal year 2009 – 2013 medians in this publication are based on the same subset of not-for-profit organizations for all five years and are derived from nominal values not adjusted for inflation.
The not-for-profit sector does not share a common fiscal year, although most organizations end their year on June 30 or December 31. We derive medians based on audited financial statements as of fiscal year ends ranging from February 28 to December 31. This can be a complicating factor when comparing data, especially since endowment values and reported investment returns will vary considerably depending on the reported fiscal year end of the rated organization.
U.S. PUBLIC FINANCE
7 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Appendix I
Overview of Not-for-Profit Organization Sub-sectors (FY 2013 financial data)
Cultural Philanthropic Research Service / Advocacy
Description Organizations committed to cultural enrichment, including museums, aquariums, zoos, performing arts venues, and public radio
Entities with a charitable mission and primary purpose of distributing funds to other entities for various uses
Non-degree granting organizations whose primary purpose is research
Diverse group of issue-oriented organizations, often with a mission to provide services to a body of constituents; includes membership organizations, religious organizations, social service agencies, professional associations among others
Examples Carnegie Hall, Wildlife Conservation Society, Smithsonian Institution, California Academy of Sciences, New York Public Library
Andrew W. Mellon Foundation, UJA-Federation of New York, American Legacy Foundation
Cold Spring Harbor Laboratory, Carnegie Institution of Washington, Rockefeller University, National Academy of Sciences
YMCAs, World Wildlife Fund, Salvation Army, Nature Conservancy, AARP, Archdiocese of Indianapolis
Median Rating by Number of Ratings
A1 Aa1 Aa3 A1
Median Rating Weighted by Amount of Debt Outstanding
Aa3 Aaa Aa1 A1
Underlying Rating Range Aaa to Baa1 Aaa to A2 Aaa to Baa2 Aa2 to Baa3
Number with Moody's Underlying Rating
37 9 23 27
Amount of Debt Outstanding $5,055 million $872 million $4,733 million $2,407 million
Credit Strengths Typically well-diversified revenue bases; instances of strong state and/or local government operating and capital support; strongest fundraising of all sub-sectors with examples of extraordinary philanthropic support to prominent institutions
Tend not to be capital intensive (often only borrowing for administrative headquarters); significant financial resource bases to cushion debt and operations
On average, balance sheets provide good support for debt and operations; may have more flexibility to contain operating expenses in response to declining revenue
Well-diversified revenue bases; generally balanced to positive operating performance; often broad and diversified member and donor bases
Credit Challenges Usually capital intensive; competition from other not-for-profits as well as for-profit venues; visitor-driven revenues can fluctuate in response to external forces
Need for strong investment management and oversight in light of heavy dependence on endowment spending; face difficult choices to contain operating expenses and grant commitments in response to investment losses
Grant-dependent research organizations susceptible to pressure on federal funding for research and shifting research priorities; some institutions are highly capital intensive needing to maintain up-to-date facilities and infrastructure
Typically thinner levels of financial resources as a result of modest fundraising for endowment; varying levels of market competition
Median Total Financial Resources ($000)
$319,974 $1,139,645 $316,408 $141,492
Median Debt Outstanding ($000)
$94,895 $55,000 $68,663 $56,665
Median Expendable Financial Resources-to-Debt (x)
2.41 22.03 3.81 2.43
Median Expendable Financial Resources-to-Operations (x)
2.32 6.91 1.65 0.81
Median Average Operating Margin (%)
-1.8 -4.1 0.2 3.5
Median Operating Cash Flow Margin (%)
14.4 -0.4 7.3 10.5
U.S. PUBLIC FINANCE
8 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Appendix II
Not-for-Profit Medians, FY 2009-2013
Year 2009 2010 2011 2012 2013
Sample Size 91 91 91 91 91
Key Financial Statistics:
Debt Outstanding ($000) $65,867 $71,532 $67,360 $73,134 $71,112
Unrestricted Financial Resources ($000) $99,201 $100,922 $109,090 $103,840 $122,818
Expendable Financial Resources ($000) $143,228 $164,379 $185,142 $189,980 $214,888
Total Financial Resources ($000) $235,791 $238,133 $262,194 $224,623 $274,578
Total Cash & Investments ($000) $216,710 $228,147 $251,584 $248,769 $283,690
Monthly Liquidity ($000) $100,569 $126,871 $132,237 $134,648 $153,415
Annual Liquidity ($000) $132,370 $139,419 $149,385 $153,536 $178,184
Operating Revenue ($000) $102,857 $105,160 $115,145 $125,763 $119,698
Change in Operating Revenue (%) 0.7 1.1 2.7 3.8 1.8
Total Expenses ($000) $107,466 $105,313 $113,534 $120,273 $117,799
Change in Expenses (%) 1.3 0.4 3.5 3.3 2.3
Total Gift Revenue ($000) $15,116 $12,930 $15,384 $16,376 $11,947
Average Gift Revenue (3yr avg) ($000) $18,749 $15,932 $15,794 $14,048 $14,089
Capital Ratios:
Unrestricted Financial Resources-to-Direct Debt (x) 1.27 1.33 1.39 1.40 1.62
Expendable Financial Resources-to-Direct Debt (x) 1.97 2.13 2.40 2.33 2.83
Total Financial Resources-to-Direct Debt (x) 3.01 2.89 3.31 3.21 3.81
Total Cash & Investments-to-Direct Debt (x) 3.29 3.19 3.37 3.71 4.01
Debt to Operating Revenues (x) 0.68 0.67 0.63 0.61 0.63
Debt Service to Operations (%) 3.7 3.7 4.0 3.8 3.9
MADS to Operations (%) 6.2 5.7 5.7 5.3 5.5
Variable Rate Exposure - Before Swaps (%) 61.3 53.2 53.6 37.7 38.3
Monthly Liquidity to Demand Debt (%)[1] 228.1 232.5 269.8 380.8 352.4
Annual Liquidity to Demand Debt (%)[1] 294.6 263.2 296.4 434.4 432.7
Capital Spending Ratio (x) 1.27 1.01 0.96 0.83 0.64
Age of Plant (Number of Years) (x) 8.93 9.53 9.86 10.10 10.45
Balance Sheet Ratios:
Unrestricted Financial Resources-to-Operations (x) 0.79 0.85 0.80 0.73 0.83
Expendable Financial Resources-to-Operations (x) 1.40 1.49 1.54 1.66 1.93
Free Expendable Financial Resources-to-Operations (x) 0.53 0.55 0.71 0.66 0.84
Monthly Days Cash on Hand (x) 353 403 390 373 474
Annual Days Cash on Hand (x) 464 472 425 431 563
Monthly Liquidity as a % of Total Cash & Investments (%) 51.7 57.8 58.6 59.0 58.2
Operating Ratios:
Operating Margin (%) 1.9 1.7 1.8 1.2 1.6
Average Operating Margin (%) 1.9 1.7 1.3 1.8 0.9
Operating Margin Excluding Gifts (%) -16.6 -15.7 -16.6 -20.3 -22.3
U.S. PUBLIC FINANCE
9 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Not-for-Profit Medians, FY 2009-2013
Year 2009 2010 2011 2012 2013
Sample Size 91 91 91 91 91
Operating Cash Flow Margin (%) 9.4 11.3 12.4 10.3 10.4
Debt Service Coverage (x) 2.38 2.99 2.76 2.67 2.43
Average Debt Service Coverage (x) 2.70 2.72 2.75 2.78 2.52
Average MADS Coverage (x) 1.87 1.84 1.72 1.87 1.83
Return on Net Assets (%) -6.6 6.3 9.6 2.4 9.5
Return on Financial Resources (%) -14.3 7.8 12.2 2.5 12.5
Contribution Ratios: [2]
Gifts (%) 13.0 11.4 14.5 16.1 16.5
Investment Income (%) 12.6 11.9 11.2 11.0 11.2
[1] Median values for monthly and annual liquidity to demand debt are derived from only those issuers that have at least $1 of demand debt outstanding.
[2] Since values represent the median issuer for each contribution ratio, each individual issuer's ratios will sum to 100%, but the median values may not total 100%.
U.S. PUBLIC FINANCE
10 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Appendix III
Not-for-Profit Medians by Rating Category, FY 2009-2013
Aaa
Year 2009 2010 2011 2012 2013
Sample Size 8 8 8 8 8
Key Financial Statistics:
Debt Outstanding ($000) $166,510 $154,543 $151,873 $145,203 $145,210
Unrestricted Financial Resources ($000) $1,147,290 $1,226,645 $1,258,202 $1,256,697 $1,355,043
Expendable Financial Resources ($000) $1,400,382 $1,500,096 $1,631,175 $1,580,932 $1,757,841
Total Financial Resources ($000) $1,800,025 $1,903,411 $2,041,609 $1,996,715 $2,185,779
Total Cash & Investments ($000) $1,895,446 $1,998,484 $2,134,041 $2,139,057 $2,292,814
Monthly Liquidity ($000) $699,171 $697,606 $794,101 $708,541 $765,279
Annual Liquidity ($000) $989,431 $945,607 $898,703 $835,599 $902,896
Operating Revenue ($000) $294,589 $281,609 $264,190 $277,474 $284,197
Change in Operating Revenue (%) 1.7 -3.6 -5.3 3.7 3.0
Total Expenses ($000) $271,599 $275,523 $275,724 $289,362 $279,952
Change in Expenses (%) 1.4 -2.3 -4.2 4.5 1.7
Total Gift Revenue ($000) $3,676 $2,632 $5,125 $11,407 $4,602
Average Gift Revenue (3yr avg) ($000) $2,498 $2,887 $3,811 $6,388 $7,045
Capital Ratios:
Unrestricted Financial Resources-to-Direct Debt (x) 8.64 9.04 10.19 9.84 8.82
Expendable Financial Resources-to-Direct Debt (x) 8.80 9.40 10.41 10.21 9.44
Total Financial Resources-to-Direct Debt (x) 10.14 11.02 12.49 12.61 13.16
Total Cash & Investments-to-Direct Debt (x) 12.15 13.08 14.20 15.03 16.11
Debt to Operating Revenues (x) 0.89 0.85 0.87 0.87 0.93
Debt Service to Operations (%) 2.4 3.6 4.1 4.1 3.7
MADS to Operations (%) 9.2 6.9 7.2 6.0 5.8
Variable Rate Exposure - Before Swaps (%) 62.1 67.2 79.0 79.8 70.4
Monthly Liquidity to Demand Debt (%)[1] 840.2 866.0 890.2 766.8 958.2
Annual Liquidity to Demand Debt (%)[1] 977.6 1075.5 1158.3 1106.9 1177.5
Capital Spending Ratio (x) 1.31 1.16 1.05 1.67 0.78
Age of Plant (Number of Years) (x) 9.91 10.88 12.04 11.60 11.55
Balance Sheet Ratios:
Unrestricted Financial Resources-to-Operations (x) 11.40 13.06 16.88 15.94 15.01
Expendable Financial Resources-to-Operations (x) 11.40 13.06 16.88 15.94 15.01
Free Expendable Financial Resources-to-Operations (x) 10.25 12.06 16.01 14.91 14.43
Monthly Days Cash on Hand (x) 1960 2062 2449 2031 2077
Annual Days Cash on Hand (x) 3010 3531 3937 2858 3504
Monthly Liquidity as a % of Total Cash & Investments (%) 32.9 30.6 34.0 32.6 31.6
U.S. PUBLIC FINANCE
11 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Not-for-Profit Medians by Rating Category, FY 2009-2013
Aaa
Year 2009 2010 2011 2012 2013
Sample Size 8 8 8 8 8
Operating Ratios:
Operating Margin (%) 3.3 4.0 2.1 2.1 -7.5
Average Operating Margin (%) -6.4 -1.2 0.6 -0.3 -5.5
Operating Margin Excluding Gifts (%) -7.3 -8.2 -8.2 -17.8 -16.2
Operating Cash Flow Margin (%) 11.8 13.4 14.6 10.5 4.5
Debt Service Coverage (x) 4.66 2.89 2.81 1.79 0.55
Average Debt Service Coverage (x) 1.52 2.06 3.16 2.12 1.24
Average MADS Coverage (x) 1.26 1.24 1.38 1.34 0.92
Return on Net Assets (%) -19.6 6.3 8.6 2.0 7.9
Return on Financial Resources (%) -21.5 7.2 8.7 2.5 8.4
Contribution Ratios: [2]
Gifts (%) 2.0 0.7 1.2 3.6 1.4
Investment Income (%) 88.1 88.6 88.1 85.9 87.6
[1] Median values for monthly and annual liquidity to demand debt are derived from only those issuers that have at least $1 of demand debt outstanding.
[2] Since values represent the median issuer for each contribution ratio, each individual issuer's ratios will sum to 100%, but the median values may not total 100%.
U.S. PUBLIC FINANCE
12 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Aa
Year 2009 2010 2011 2012 2013
Sample Size 34 34 34 34 34
Key Financial Statistics:
Debt Outstanding ($000) $65,235 $65,401 $65,318 $65,488 $69,303
Unrestricted Financial Resources ($000) $144,998 $156,821 $156,387 $166,361 $196,803
Expendable Financial Resources ($000) $271,338 $304,129 $337,943 $321,071 $366,063
Total Financial Resources ($000) $354,102 $412,029 $432,271 $441,870 $489,650
Total Cash & Investments ($000) $353,304 $390,227 $441,599 $439,588 $459,451
Monthly Liquidity ($000) $146,576 $171,463 $199,878 $214,557 $207,883
Annual Liquidity ($000) $152,900 $206,814 $214,360 $221,727 $259,771
Operating Revenue ($000) $125,567 $128,596 $144,564 $171,500 $177,245
Change in Operating Revenue (%) 0.5 1.3 3.5 4.4 3.9
Total Expenses ($000) $116,178 $122,104 $137,051 $133,863 $130,664
Change in Expenses (%) 0.8 1.4 4.1 2.7 2.5
Total Gift Revenue ($000) $16,863 $13,161 $11,060 $17,536 $23,350
Average Gift Revenue (3yr avg) ($000) $16,620 $14,711 $14,722 $13,662 $16,380
Capital Ratios:
Unrestricted Financial Resources-to-Direct Debt (x) 2.21 2.29 2.39 2.41 3.13
Expendable Financial Resources-to-Direct Debt (x) 4.39 3.98 4.74 4.39 5.19
Total Financial Resources-to-Direct Debt (x) 5.34 5.18 5.58 5.63 6.13
Total Cash & Investments-to-Direct Debt (x) 4.97 5.44 6.19 5.72 6.21
Debt to Operating Revenues (x) 0.52 0.58 0.56 0.57 0.57
Debt Service to Operations (%) 2.6 2.7 3.7 3.3 3.0
MADS to Operations (%) 6.4 5.7 5.7 5.6 6.0
Variable Rate Exposure - Before Swaps (%) 51.8 42.0 41.9 23.5 22.0
Monthly Liquidity to Demand Debt (%)[1] 302.0 358.4 324.0 400.5 358.9
Annual Liquidity to Demand Debt (%)[1] 412.5 490.4 340.9 571.5 391.1
Capital Spending Ratio (x) 1.18 0.97 1.22 0.85 0.77
Age of Plant (Number of Years) (x) 8.34 8.26 8.51 9.02 9.41
Balance Sheet Ratios:
Unrestricted Financial Resources-to-Operations (x) 1.04 1.11 0.91 0.76 1.15
Expendable Financial Resources-to-Operations (x) 2.01 2.21 2.57 2.38 2.92
Free Expendable Financial Resources-to-Operations (x) 1.00 1.25 1.41 1.72 2.12
Monthly Days Cash on Hand (x) 492 554 532 538 633
Annual Days Cash on Hand (x) 623 682 606 604 648
Monthly Liquidity as a % of Total Cash & Investments (%) 49.2 49.6 47.3 50.5 51.4
Operating Ratios:
Operating Margin (%) 2.7 2.5 2.4 2.1 3.6
Average Operating Margin (%) 4.3 2.1 2.0 2.8 2.6
Operating Margin Excluding Gifts (%) -13.1 -18.8 -23.1 -20.7 -23.1
Operating Cash Flow Margin (%) 12.5 11.7 12.2 13.2 12.4
U.S. PUBLIC FINANCE
13 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Aa
Year 2009 2010 2011 2012 2013
Sample Size 34 34 34 34 34
Debt Service Coverage (x) 3.72 3.35 3.34 3.63 3.42
Average Debt Service Coverage (x) 3.36 3.36 3.29 3.39 3.53
Average MADS Coverage (x) 2.36 2.12 1.74 1.91 2.18
Return on Net Assets (%) -9.8 7.0 7.8 3.8 10.8
Return on Financial Resources (%) -15.9 8.5 12.1 3.9 12.2
Contribution Ratios: [2]
Gifts (%) 12.4 9.6 12.0 17.1 20.7
Investment Income (%) 14.9 14.9 13.0 12.3 13.7
[1] Median values for monthly and annual liquidity to demand debt are derived from only those issuers that have at least $1 of demand debt outstanding.
[2] Since values represent the median issuer for each contribution ratio, each individual issuer's ratios will sum to 100%, but the median values may not total 100%.
U.S. PUBLIC FINANCE
14 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
A
Year 2009 2010 2011 2012 2013
Sample Size 40 40 40 40 40
Key Financial Statistics:
Debt Outstanding ($000) $72,418 $80,417 $76,030 $78,311 $75,696
Unrestricted Financial Resources ($000) $56,062 $66,459 $75,477 $64,952 $98,495
Expendable Financial Resources ($000) $91,192 $109,189 $128,509 $120,538 $131,333
Total Financial Resources ($000) $145,793 $166,811 $180,385 $192,183 $209,922
Total Cash & Investments ($000) $154,942 $167,832 $184,971 $183,884 $204,884
Monthly Liquidity ($000) $71,166 $83,152 $97,171 $98,858 $108,993
Annual Liquidity ($000) $72,954 $97,715 $118,592 $112,036 $123,254
Operating Revenue ($000) $97,263 $96,634 $108,543 $115,287 $107,481
Change in Operating Revenue (%) 0.8 0.4 3.1 3.9 0.5
Total Expenses ($000) $93,158 $92,812 $100,562 $105,028 $106,911
Change in Expenses (%) 1.7 -0.5 4.3 4.5 3.2
Total Gift Revenue ($000) $20,504 $18,966 $17,487 $17,644 $16,370
Average Gift Revenue (3yr avg) ($000) $23,498 $20,905 $18,387 $18,941 $19,613
Capital Ratios:
Unrestricted Financial Resources-to-Direct Debt (x) 0.68 0.67 0.67 0.71 0.93
Expendable Financial Resources-to-Direct Debt (x) 0.96 1.11 1.37 1.25 1.43
Total Financial Resources-to-Direct Debt (x) 1.69 1.93 2.29 2.17 2.30
Total Cash & Investments-to-Direct Debt (x) 1.89 2.03 2.42 2.39 2.32
Debt to Operating Revenues (x) 0.75 0.73 0.72 0.69 0.67
Debt Service to Operations (%) 4.2 4.0 3.9 4.0 4.5
MADS to Operations (%) 6.1 6.0 6.9 5.7 7.2
Variable Rate Exposure - Before Swaps (%) 78.2 54.2 50.5 36.0 32.5
Monthly Liquidity to Demand Debt (%)[1] 97.2 120.6 143.4 223.2 273.0
Annual Liquidity to Demand Debt (%)[1] 103.5 126.9 157.6 224.0 273.0
Capital Spending Ratio (x) 1.46 1.04 0.93 0.60 0.50
Age of Plant (Number of Years) (x) 9.89 10.57 10.41 10.71 11.46
Balance Sheet Ratios:
Unrestricted Financial Resources-to-Operations (x) 0.41 0.48 0.43 0.41 0.49
Expendable Financial Resources-to-Operations (x) 0.89 1.02 1.22 1.05 1.21
Free Expendable Financial Resources-to-Operations (x) -0.01 0.14 0.27 0.18 0.29
Monthly Days Cash on Hand (x) 306 371 319 286 336
Annual Days Cash on Hand (x) 312 381 344 307 352
Monthly Liquidity as a % of Total Cash & Investments (%) 56.9 61.4 60.4 60.1 61.5
Operating Ratios:
Operating Margin (%) 1.3 1.0 1.4 -0.9 -0.9
Average Operating Margin (%) 1.7 1.5 1.1 1.8 -1.0
Operating Margin Excluding Gifts (%) -19.1 -19.8 -24.6 -28.2 -30.6
Operating Cash Flow Margin (%) 9.4 10.4 8.7 8.0 5.7
U.S. PUBLIC FINANCE
15 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
A
Year 2009 2010 2011 2012 2013
Sample Size 40 40 40 40 40
Debt Service Coverage (x) 2.07 2.93 2.71 2.32 1.88
Average Debt Service Coverage (x) 2.58 2.56 2.63 2.53 2.25
Average MADS Coverage (x) 1.62 1.49 1.38 1.48 1.29
Return on Net Assets (%) -9.5 7.6 13.3 -3.0 10.7
Return on Financial Resources (%) -11.4 8.6 12.6 -3.8 12.5
Contribution Ratios: [2]
Gifts (%) 18.6 18.1 20.2 16.5 17.0
Investment Income (%) 10.8 10.8 9.9 9.8 10.5
[1] Median values for monthly and annual liquidity to demand debt are derived from only those issuers that have at least $1 of demand debt outstanding.
[2] Since values represent the median issuer for each contribution ratio, each individual issuer's ratios will sum to 100%, but the median values may not total 100%.
U.S. PUBLIC FINANCE
16 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Baa
Year 2009 2010 2011 2012 2013
Sample Size 9 9 9 9 9
Key Financial Statistics:
Debt Outstanding ($000) $23,836 $20,018 $19,900 $29,587 $66,247
Unrestricted Financial Resources ($000) $15,259 $27,242 $34,610 $44,017 $51,445
Expendable Financial Resources ($000) $47,415 $42,152 $49,902 $51,601 $59,455
Total Financial Resources ($000) $53,883 $50,248 $51,358 $54,946 $61,822
Total Cash & Investments ($000) $48,205 $57,783 $61,970 $74,004 $72,500
Monthly Liquidity ($000) $36,432 $41,232 $51,042 $57,366 $59,016
Annual Liquidity ($000) $44,780 $41,232 $54,468 $57,894 $59,016
Operating Revenue ($000) $94,927 $96,660 $98,181 $99,240 $89,293
Change in Operating Revenue (%) 2.7 2.3 1.7 2.4 -3.9
Total Expenses ($000) $94,132 $96,965 $97,106 $96,429 $91,181
Change in Expenses (%) 1.0 2.8 5.4 -0.3 -5.4
Total Gift Revenue ($000) $8,508 $7,378 $10,212 $10,788 $9,237
Average Gift Revenue (3yr avg) ($000) $14,668 $9,371 $7,708 $9,414 $10,635
Capital Ratios:
Unrestricted Financial Resources-to-Direct Debt (x) 0.30 0.33 0.51 0.51 0.74
Expendable Financial Resources-to-Direct Debt (x) 0.57 0.50 0.71 0.57 0.96
Total Financial Resources-to-Direct Debt (x) 0.57 0.51 0.71 0.58 0.96
Total Cash & Investments-to-Direct Debt (x) 0.61 0.68 0.86 0.89 1.18
Debt to Operating Revenues (x) 0.56 0.54 0.52 0.49 0.51
Debt Service to Operations (%) 4.5 3.9 4.2 4.3 5.7
MADS to Operations (%) 4.9 5.2 4.8 4.3 4.2
Variable Rate Exposure - Before Swaps (%) 86.4 23.6 24.8 25.8 26.6
Monthly Liquidity to Demand Debt (%)[1] 309.1 244.5 289.0 444.2 150.1
Annual Liquidity to Demand Debt (%)[1] 309.1 244.5 289.0 464.4 166.3
Capital Spending Ratio (x) 1.14 0.87 0.82 0.83 0.57
Age of Plant (Number of Years) (x) 8.42 8.98 9.45 9.48 9.51
Balance Sheet Ratios:
Unrestricted Financial Resources-to-Operations (x) 0.37 0.41 0.34 0.29 0.42
Expendable Financial Resources-to-Operations (x) 0.61 0.49 0.59 0.83 0.76
Free Expendable Financial Resources-to-Operations (x) -0.15 -0.09 -0.04 -0.08 -0.01
Monthly Days Cash on Hand (x) 222 225 201 237 208
Annual Days Cash on Hand (x) 222 225 201 237 208
Monthly Liquidity as a % of Total Cash & Investments (%) 94.2 85.0 83.2 86.7 77.6
Operating Ratios:
Operating Margin (%) -1.0 2.4 1.1 2.0 2.4
Average Operating Margin (%) 0.0 -0.1 0.5 1.2 0.8
Operating Margin Excluding Gifts (%) -17.4 -8.7 -13.5 -17.3 -14.5
Operating Cash Flow Margin (%) 8.5 11.2 10.6 12.1 13.3
U.S. PUBLIC FINANCE
17 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Baa
Year 2009 2010 2011 2012 2013
Sample Size 9 9 9 9 9
Debt Service Coverage (x) 1.99 2.69 2.38 2.92 2.13
Average Debt Service Coverage (x) 2.49 2.33 2.28 2.61 2.43
Average MADS Coverage (x) 2.56 2.19 2.11 2.50 2.75
Return on Net Assets (%) 1.6 2.2 4.6 4.2 6.4
Return on Financial Resources (%) -7.1 -3.1 13.2 7.0 14.7
Contribution Ratios: [2]
Gifts (%) 12.6 10.5 11.3 14.3 14.9
Investment Income (%) 3.7 3.9 3.9 4.3 4.4
[1] Median values for monthly and annual liquidity to demand debt are derived from only those issuers that have at least $1 of demand debt outstanding.
[2] Since values represent the median issuer for each contribution ratio, each individual issuer's ratios will sum to 100%, but the median values may not total 100%.
U.S. PUBLIC FINANCE
18 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Appendix IV
Not-for-Profit Medians by Sub-sector, FY 2009-2013
Cultural
Year 2009 2010 2011 2012 2013
Sample Size 36 36 36 36 36
Key Financial Statistics:
Debt Outstanding ($000) $80,105 $100,148 $98,145 $93,924 $94,895
Unrestricted Financial Resources ($000) $100,900 $112,767 $111,188 $97,564 $119,163
Expendable Financial Resources ($000) $162,015 $177,382 $191,573 $191,850 $219,621
Total Financial Resources ($000) $271,464 $290,253 $280,654 $275,564 $319,974
Total Cash & Investments ($000) $267,535 $285,536 $298,320 $303,154 $328,579
Monthly Liquidity ($000) $112,229 $134,235 $140,625 $139,513 $151,220
Annual Liquidity ($000) $130,842 $149,833 $158,990 $154,950 $177,841
Operating Revenue ($000) $78,744 $71,639 $72,597 $75,785 $82,486
Change in Operating Revenue (%) -0.9 -0.6 2.2 6.0 2.3
Total Expenses ($000) $72,683 $71,371 $75,555 $84,328 $86,983
Change in Expenses (%) 1.9 -1.2 4.6 4.5 3.5
Total Gift Revenue ($000) $26,567 $21,899 $22,746 $22,840 $34,053
Average Gift Revenue (3yr avg) ($000) $25,016 $24,673 $24,207 $21,769 $24,557
Capital Ratios:
Unrestricted Financial Resources-to-Direct Debt (x) 0.88 0.89 1.03 1.14 1.39
Expendable Financial Resources-to-Direct Debt (x) 1.59 1.96 2.17 2.11 2.41
Total Financial Resources-to-Direct Debt (x) 2.91 3.04 3.03 3.06 3.40
Total Cash & Investments-to-Direct Debt (x) 2.66 2.75 3.09 3.29 3.03
Debt to Operating Revenues (x) 1.12 1.37 1.44 1.32 1.26
Debt Service to Operations (%) 4.9 5.1 5.0 4.8 5.1
MADS to Operations (%) 10.3 12.2 11.4 10.9 10.5
Variable Rate Exposure - Before Swaps (%) 94.4 69.7 77.1 79.4 65.5
Monthly Liquidity to Demand Debt (%)[1] 121.7 159.0 180.5 199.5 229.1
Annual Liquidity to Demand Debt (%)[1] 143.4 162.6 180.5 223.6 234.4
Capital Spending Ratio (x) 2.05 1.11 0.71 0.69 0.59
Age of Plant (Number of Years) (x) 9.54 9.76 10.52 11.12 11.50
Balance Sheet Ratios:
Unrestricted Financial Resources-to-Operations (x) 1.15 1.43 1.33 1.09 1.21
Expendable Financial Resources-to-Operations (x) 2.01 2.29 2.58 2.12 2.32
Free Expendable Financial Resources-to-Operations (x) 0.57 0.72 0.91 0.79 1.18
Monthly Days Cash on Hand (x) 584 657 675 665 640
Annual Days Cash on Hand (x) 608 754 795 755 765
Monthly Liquidity as a % of Total Cash & Investments (%) 45.7 46.0 42.8 40.7 41.9
U.S. PUBLIC FINANCE
19 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Not-for-Profit Medians by Sub-sector, FY 2009-2013
Cultural
Year 2009 2010 2011 2012 2013
Sample Size 36 36 36 36 36
Operating Ratios:
Operating Margin (%) 1.6 0.8 -1.0 -2.7 -1.7
Average Operating Margin (%) 3.6 2.2 0.2 0.1 -1.8
Operating Margin Excluding Gifts (%) -29.4 -30.4 -34.4 -34.1 -30.6
Operating Cash Flow Margin (%) 13.9 17.2 13.7 16.0 14.4
Debt Service Coverage (x) 2.46 3.59 2.66 2.57 2.07
Average Debt Service Coverage (x) 2.93 3.07 2.85 2.91 2.35
Average MADS Coverage (x) 1.45 1.13 1.29 1.41 1.42
Return on Net Assets (%) -15.5 5.6 8.6 -2.3 9.3
Return on Financial Resources (%) -19.7 5.7 11.9 -4.2 12.4
Contribution Ratios: [2]
Gifts (%) 22.8 22.6 22.5 22.6 24.0
Investment Income (%) 18.5 19.6 18.3 17.3 17.2
Admissions and Memberships (%) 15.4 15.8 17.1 17.8 16.9
[1] Median values for monthly and annual liquidity to demand debt are derived from only those issuers that have at least $1 of demand debt outstanding.
[2] Since values represent the median issuer for each contribution ratio, each individual issuer's ratios will sum to 100%, but the median values may not total 100%.
U.S. PUBLIC FINANCE
20 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Philanthropic
Year 2009 2010 2011 2012 2013
Sample Size 7 7 7 7 7
Key Financial Statistics:
Debt Outstanding ($000) $55,000 $55,000 $55,000 $55,000 $55,000
Unrestricted Financial Resources ($000) $497,660 $518,656 $515,585 $427,790 $1,011,903
Expendable Financial Resources ($000) $860,715 $908,283 $1,034,706 $966,176 $1,011,903
Total Financial Resources ($000) $860,715 $908,283 $1,034,706 $966,176 $1,139,645
Total Cash & Investments ($000) $824,349 $873,382 $969,615 $913,882 $1,031,660
Monthly Liquidity ($000) $330,971 $345,855 $415,876 $389,483 $580,059
Annual Liquidity ($000) $426,288 $415,579 $476,369 $474,391 $695,326
Operating Revenue ($000) $97,310 $93,785 $125,387 $125,890 $200,234
Change in Operating Revenue (%) -12.1 -3.6 -3.8 1.3 4.1
Total Expenses ($000) $116,963 $101,547 $115,176 $109,811 $114,998
Change in Expenses (%) 1.7 -13.2 4.6 -2.6 12.0
Total Gift Revenue ($000) $15,560 $16,285 $17,865 $18,466 $11,778
Average Gift Revenue (3yr avg) ($000) $5,187 $10,615 $16,570 $17,539 $16,036
Capital Ratios:
Unrestricted Financial Resources-to-Direct Debt (x) 7.66 8.15 8.29 6.00 21.30
Expendable Financial Resources-to-Direct Debt (x) 16.78 18.18 19.81 20.44 22.03
Total Financial Resources-to-Direct Debt (x) 17.34 19.35 22.45 28.13 30.88
Total Cash & Investments-to-Direct Debt (x) 16.92 18.42 18.84 17.51 22.39
Debt to Operating Revenues (x) 0.73 0.67 0.73 0.70 0.68
Debt Service to Operations (%) 2.0 2.6 3.0 2.1 1.8
MADS to Operations (%) 4.1 4.2 3.8 3.3 3.2
Variable Rate Exposure - Before Swaps (%) 51.1 53.2 53.6 54.1 54.3
Monthly Liquidity to Demand Debt (%)[1] 1221.9 1338.7 1594.8 1412.5 1933.5
Annual Liquidity to Demand Debt (%)[1] 1699.7 1576.9 1674.2 1496.7 2850.7
Capital Spending Ratio (x) 0.65 0.41 0.63 0.42 0.27
Age of Plant (Number of Years) (x) 6.66 7.70 8.63 10.00 8.80
Balance Sheet Ratios:
Unrestricted Financial Resources-to-Operations (x) 2.59 3.17 3.73 3.50 5.56
Expendable Financial Resources-to-Operations (x) 3.86 4.38 5.01 4.65 6.91
Free Expendable Financial Resources-to-Operations (x) 2.81 3.70 3.74 3.94 5.29
Monthly Days Cash on Hand (x) 940 1107 1253 1164 1582
Annual Days Cash on Hand (x) 1075 1331 1510 1418 2183
Monthly Liquidity as a % of Total Cash & Investments (%) 33.7 49.0 46.4 55.3 46.4
Operating Ratios:
Operating Margin (%) -20.2 1.9 5.0 0.9 -4.9
Average Operating Margin (%) -9.8 -6.0 -4.4 4.3 -4.1
Operating Margin Excluding Gifts (%) -211.7 -184.1 -190.5 -215.1 -255.1
Operating Cash Flow Margin (%) -18.4 2.5 6.5 3.1 -0.4
U.S. PUBLIC FINANCE
21 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Philanthropic
Year 2009 2010 2011 2012 2013
Sample Size 7 7 7 7 7
Debt Service Coverage (x) -7.57 1.10 4.95 1.26 -0.11
Average Debt Service Coverage (x) -0.42 -0.48 0.08 1.94 0.38
Average MADS Coverage (x) -0.56 -0.39 0.05 1.49 0.38
Return on Net Assets (%) -16.1 7.2 11.0 5.9 12.5
Return on Financial Resources (%) 10.8 7.8 11.1 5.9 12.5
Contribution Ratios: [2]
Gifts (%) 66.4 65.5 68.4 69.2 80.7
Investment Income (%) 25.8 26.5 22.7 22.2 17.2
[1] Median values for monthly and annual liquidity to demand debt are derived from only those issuers that have at least $1 of demand debt outstanding.
[2] Since values represent the median issuer for each contribution ratio, each individual issuer's ratios will sum to 100%, but the median values may not total 100%.
U.S. PUBLIC FINANCE
22 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Research
Year 2009 2010 2011 2012 2013
Sample Size 22 22 22 22 22
Key Financial Statistics:
Debt Outstanding ($000) $68,900 $69,320 $69,303 $69,303 $68,663
Unrestricted Financial Resources ($000) $102,974 $99,034 $124,479 $120,196 $144,789
Expendable Financial Resources ($000) $204,550 $200,668 $243,562 $245,583 $272,608
Total Financial Resources ($000) $247,240 $235,763 $278,897 $285,844 $316,408
Total Cash & Investments ($000) $223,600 $245,218 $278,510 $277,889 $304,218
Monthly Liquidity ($000) $80,920 $104,902 $112,218 $105,131 $139,258
Annual Liquidity ($000) $135,500 $125,044 $133,779 $162,157 $183,854
Operating Revenue ($000) $150,912 $151,235 $148,768 $151,190 $151,380
Change in Operating Revenue (%) 4.6 3.4 5.6 -1.2 -2.5
Total Expenses ($000) $141,482 $142,412 $149,245 $148,660 $141,617
Change in Expenses (%) 1.3 4.8 4.7 2.9 -1.8
Total Gift Revenue ($000) $10,895 $8,518 $10,661 $14,812 $10,530
Average Gift Revenue (3yr avg) ($000) $11,249 $8,755 $10,021 $11,429 $14,616
Capital Ratios:
Unrestricted Financial Resources-to-Direct Debt (x) 2.13 1.87 2.02 1.70 1.34
Expendable Financial Resources-to-Direct Debt (x) 2.64 2.43 3.29 2.80 3.81
Total Financial Resources-to-Direct Debt (x) 3.97 2.87 4.21 3.81 5.11
Total Cash & Investments-to-Direct Debt (x) 3.79 2.88 3.62 3.37 3.94
Debt to Operating Revenues (x) 0.61 0.58 0.54 0.55 0.62
Debt Service to Operations (%) 3.4 3.2 3.6 3.3 4.3
MADS to Operations (%) 6.4 5.9 5.5 4.9 5.3
Variable Rate Exposure - Before Swaps (%) 56.1 44.8 45.5 31.0 26.7
Monthly Liquidity to Demand Debt (%)[1] 243.4 239.2 277.3 414.9 239.2
Annual Liquidity to Demand Debt (%)[1] 368.3 274.0 311.0 433.6 432.7
Capital Spending Ratio (x) 1.28 1.07 1.05 0.90 0.74
Age of Plant (Number of Years) (x) 8.82 9.41 9.98 9.53 10.36
Balance Sheet Ratios:
Unrestricted Financial Resources-to-Operations (x) 0.60 0.62 0.41 0.53 0.62
Expendable Financial Resources-to-Operations (x) 0.95 1.02 0.95 1.03 1.65
Free Expendable Financial Resources-to-Operations (x) 0.75 0.83 0.76 0.71 1.26
Monthly Days Cash on Hand (x) 227 261 234 257 315
Annual Days Cash on Hand (x) 313 286 291 319 315
Monthly Liquidity as a % of Total Cash & Investments (%) 40.0 41.3 43.9 40.9 42.2
Operating Ratios:
Operating Margin (%) 2.0 2.3 1.2 -0.4 -0.5
Average Operating Margin (%) 0.4 1.2 1.6 0.9 0.2
Operating Margin Excluding Gifts (%) -9.6 -9.0 -7.4 -20.2 -14.7
Operating Cash Flow Margin (%) 10.4 10.5 12.7 9.2 7.3
U.S. PUBLIC FINANCE
23 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Research
Year 2009 2010 2011 2012 2013
Sample Size 22 22 22 22 22
Debt Service Coverage (x) 2.61 3.03 3.35 2.50 2.34
Average Debt Service Coverage (x) 2.69 2.88 3.54 3.15 2.44
Average MADS Coverage (x) 1.98 2.02 2.06 2.33 1.84
Return on Net Assets (%) -14.4 7.3 12.6 2.2 7.4
Return on Financial Resources (%) -16.7 8.8 14.8 3.8 13.0
Contribution Ratios: [2]
Gifts (%) 10.5 7.6 9.7 12.1 10.8
Investment Income (%) 8.5 7.5 6.7 7.5 8.6
Grants and Contracts (%) 52.7 59.6 58.1 57.8 55.0
[1] Median values for monthly and annual liquidity to demand debt are derived from only those issuers that have at least $1 of demand debt outstanding.
[2] Since values represent the median issuer for each contribution ratio, each individual issuer's ratios will sum to 100%, but the median values may not total 100%.
U.S. PUBLIC FINANCE
24 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Service / Advocacy
Year 2009 2010 2011 2012 2013
Sample Size 26 26 26 26 26
Key Financial Statistics:
Debt Outstanding ($000) $64,118 $68,402 $61,180 $60,223 $56,665
Unrestricted Financial Resources ($000) $53,133 $73,249 $71,378 $78,970 $105,850
Expendable Financial Resources ($000) $96,636 $100,514 $114,509 $117,506 $129,760
Total Financial Resources ($000) $108,629 $114,973 $118,261 $132,851 $141,492
Total Cash & Investments ($000) $137,834 $151,567 $150,813 $161,645 $185,863
Monthly Liquidity ($000) $80,683 $90,854 $99,441 $116,280 $135,346
Annual Liquidity ($000) $80,683 $92,776 $101,725 $118,532 $139,984
Operating Revenue ($000) $147,995 $148,271 $154,546 $157,368 $163,525
Change in Operating Revenue (%) 0.5 0.4 3.2 4.1 1.0
Total Expenses ($000) $147,172 $148,676 $145,660 $152,198 $157,710
Change in Expenses (%) -0.5 -0.5 2.6 3.1 2.8
Total Gift Revenue ($000) $9,797 $6,149 $9,563 $8,253 $8,977
Average Gift Revenue (3yr avg) ($000) $14,820 $9,348 $9,028 $8,248 $9,213
Capital Ratios:
Unrestricted Financial Resources-to-Direct Debt (x) 0.87 1.16 1.32 1.17 1.54
Expendable Financial Resources-to-Direct Debt (x) 1.45 1.62 1.74 1.58 2.43
Total Financial Resources-to-Direct Debt (x) 1.68 2.27 1.98 2.31 2.91
Total Cash & Investments-to-Direct Debt (x) 2.95 3.21 3.48 3.76 4.01
Debt to Operating Revenues (x) 0.44 0.46 0.45 0.42 0.40
Debt Service to Operations (%) 3.7 3.4 2.5 2.8 2.9
MADS to Operations (%) 4.1 4.1 4.4 4.1 4.5
Variable Rate Exposure - Before Swaps (%) 19.9 12.6 0.0 3.4 3.4
Monthly Liquidity to Demand Debt (%)[1] 302.0 365.8 280.5 795.0 584.4
Annual Liquidity to Demand Debt (%)[1] 366.9 405.7 303.3 863.0 609.3
Capital Spending Ratio (x) 0.87 0.99 1.13 0.83 0.88
Age of Plant (Number of Years) (x) 8.49 8.68 8.21 11.00 10.47
Balance Sheet Ratios:
Unrestricted Financial Resources-to-Operations (x) 0.44 0.50 0.49 0.53 0.53
Expendable Financial Resources-to-Operations (x) 0.71 0.71 0.60 0.75 0.81
Free Expendable Financial Resources-to-Operations (x) 0.20 0.23 0.19 0.27 0.42
Monthly Days Cash on Hand (x) 258 282 288 278 270
Annual Days Cash on Hand (x) 273 299 288 299 297
Monthly Liquidity as a % of Total Cash & Investments (%) 85.2 85.1 83.3 83.2 81.8
Operating Ratios:
Operating Margin (%) 2.8 2.9 3.3 3.0 3.8
Average Operating Margin (%) 3.4 2.2 2.8 3.3 3.5
Operating Margin Excluding Gifts (%) -3.5 -2.1 -4.9 -5.8 -3.8
Operating Cash Flow Margin (%) 8.7 10.0 9.5 10.0 10.5
U.S. PUBLIC FINANCE
25 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Service / Advocacy
Year 2009 2010 2011 2012 2013
Sample Size 26 26 26 26 26
Debt Service Coverage (x) 2.74 2.81 2.86 2.98 2.71
Average Debt Service Coverage (x) 2.43 2.56 2.67 2.76 2.90
Average MADS Coverage (x) 2.41 2.27 2.36 2.51 2.55
Return on Net Assets (%) 2.4 7.5 6.9 3.9 10.6
Return on Financial Resources (%) -6.2 9.0 12.0 7.4 11.6
Contribution Ratios: [2]
Gifts (%) 5.1 5.5 6.6 7.6 6.5
Investment Income (%) 4.7 4.7 4.6 4.4 4.5
[1] Median values for monthly and annual liquidity to demand debt are derived from only those issuers that have at least $1 of demand debt outstanding.
[2] Since values represent the median issuer for each contribution ratio, each individual issuer's ratios will sum to 100%, but the median values may not total 100%.
U.S. PUBLIC FINANCE
26 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Appendix V
Rated Institutions by Sub-sector (Ratings as of September 2, 2014)
Rating State Institution Sub-sector
Aaa CA J. Paul Getty Trust Cultural
Aaa NY Metropolitan Museum of Art Cultural
Aaa DC Smithsonian Institution Cultural
Aa1 CA The Broad Foundations Cultural
Aa2 CA Academy of Motion Picture Arts & Sciences Cultural
Aa2 MA Museum of Fine Arts Cultural
Aa2 NY Museum of Modern Art Cultural
Aa2 DC National Geographic Society Cultural
Aa3 NY American Museum of Natural History Cultural
Aa3 IN Children's Museum of Indianapolis Cultural
Aa3 DC National Public Radio Cultural
Aa3 MO Nelson Gallery Foundation Cultural
Aa3 IL Poetry Foundation Cultural
Aa3 MO St. Louis Art Museum Cultural
Aa3 MA The Sterling And Francine Clark Art Institute Cultural
Aa3 NY Wildlife Conservation Society Cultural
A1 IL Art Institute of Chicago Cultural
A1 NY Carnegie Hall Cultural
A1 IN Indianapolis Museum of Art Cultural
A1 IL Lyric Opera of Chicago Cultural
A1 IL Shedd Aquarium Society Cultural
A2 MN American Public Media Group Cultural
A2 CA California Academy of Sciences Cultural
A2 PA Carnegie Museums of Pittsburgh Cultural
A2 IL Field Museum of Natural History Cultural
A2 MA Isabella Stewart Gardner Museum Cultural
A2 NY Lincoln Center For The Performing Arts Cultural
A2 CA Los Angeles County Museum of Natural History Foundation Cultural
A2 NY New York Public Library Cultural
A2 GA Woodruff Arts Center Cultural
A3 IL Chicago Symphony Orchestra Cultural
A3 IN Indiana Historical Society Cultural
A3 CA Los Angeles County Museum of Art Cultural
A3 NY Metropolitan Opera Association Cultural
A3 CA Performing Arts Center of Los Angeles County Cultural
Baa1 NY Alvin Ailey Dance Foundation Cultural
Baa1 PA Franklin Institute Cultural
Aaa DC American Legacy Foundation Philanthropic
Aaa NY Andrew W. Mellon Foundation Philanthropic
U.S. PUBLIC FINANCE
27 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Rated Institutions by Sub-sector (Ratings as of September 2, 2014)
Rating State Institution Sub-sector
Aaa NY Doris Duke Charitable Foundation Philanthropic
Aaa MO Hall Family Foundation Philanthropic
Aa1 NY UJA-Federation of New York Philanthropic
Aa3 MA Combined Jewish Philanthropies of Greater Boston Philanthropic
A1 IL Jewish Federation of Metropolitan Chicago Philanthropic
A1 CA Walt And Lilly Disney Foundation Philanthropic
A2 MN Blandin Foundation Philanthropic
Aaa MD Howard Hughes Medical Institute Research
Aaa NJ Institute For Advanced Study at Princeton Research
Aa1 DC Carnegie Institution of Washington Research
Aa1 NY Rockefeller University Research
Aa1 TN St. Jude Children's Research Hospital Research
Aa1 MA Whitehead Institute Research
Aa2 DC Carnegie Endowment For International Peace Research
Aa2 DC Henry J. Kaiser Family Foundation Research
Aa3 DC Brookings Institution Research
Aa3 NY Cold Spring Harbor Laboratory Research
Aa3 MA Draper Laboratory Research
Aa3 DC National Academy of Sciences Research
Aa3 CA Scripps Research Institute Research
A1 MA Broad Institute Research
A1 ME Jackson Laboratory Research
A1 OK Oklahoma Medical Research Foundation Research
A1 CA Salk Institute For Biological Studies Research
A2 CO University Corporation For Atmospheric Research Research
A3 WA Fred Hutchinson Cancer Research Center Research
A3 CA SRI International Research
Baa1 CA Sanford Burnham Medical Research Institute Research
Baa1 PA Wistar Institute Research
Baa2 MO MRIGlobal Research
Aa2 IN National Collegiate Athletic Association Service / Advocacy
Aa2 VA Nature Conservancy Service / Advocacy
Aa2 PA Western Pennsylvania School For Blind Children Service / Advocacy
Aa3 DC AARP Service / Advocacy
Aa3 DC American Association for the Advancement of Science Service / Advocacy
Aa3 MD American Center For Physics Service / Advocacy
Aa3 PA National Board of Medical Examiners Service / Advocacy
Aa3 NY Salvation Army (Eastern Territory) Service / Advocacy
Aa3 DC World Wildlife Fund Service / Advocacy
A1 MN Amherst H. Wilder Foundation Service / Advocacy
U.S. PUBLIC FINANCE
28 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Rated Institutions by Sub-sector (Ratings as of September 2, 2014)
Rating State Institution Sub-sector
A1 CO Auraria Higher Education Center Service / Advocacy
A1 IL Catholic Bishop of Chicago Service / Advocacy
A1 NY Consumers Union of United States, Inc. Service / Advocacy
A1 NY Institute of International Education Service / Advocacy
A1 CA Salvation Army (Western Territory) Service / Advocacy
A1 TX Texas Medical Center Service / Advocacy
A1 MD United States Pharmacopeial Convention Service / Advocacy
A2 IN Archdiocese of Indianapolis Service / Advocacy
A2 FL NCCI Holdings, Inc. Service / Advocacy
A2 DC Service Employees International Union Service / Advocacy
A2 VA United Negro College Fund Service / Advocacy
A3 CA Diocese of Oakland Service / Advocacy
A3 CO National Conference of State Legislatures Service / Advocacy
Baa1 TX Diocese of Austin Service / Advocacy
Baa1 NY YMCA of Greater New York Service / Advocacy
Baa2 PA Philadelphia Corporation For Aging Service / Advocacy
Baa3 TX YMCA Greater Houston Area Service / Advocacy
U.S. PUBLIC FINANCE
29 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Appendix VI
Rated Institutions by Rating (Ratings as of September 2, 2014)
Rating State Institution Sub-sector
Aaa DC American Legacy Foundation Philanthropic
Aaa NY Andrew W. Mellon Foundation Philanthropic
Aaa NY Doris Duke Charitable Foundation Philanthropic
Aaa MO Hall Family Foundation Philanthropic
Aaa MD Howard Hughes Medical Institute Research
Aaa NJ Institute For Advanced Study at Princeton Research
Aaa CA J. Paul Getty Trust Cultural
Aaa NY Metropolitan Museum of Art Cultural
Aaa DC Smithsonian Institution Cultural
Aa1 DC Carnegie Institution of Washington Research
Aa1 NY Rockefeller University Research
Aa1 TN St. Jude Children's Research Hospital Research
Aa1 CA The Broad Foundations Cultural
Aa1 NY UJA-Federation of New York Philanthropic
Aa1 MA Whitehead Institute Research
Aa2 CA Academy of Motion Picture Arts & Sciences Cultural
Aa2 DC Carnegie Endowment For International Peace Research
Aa2 DC Henry J. Kaiser Family Foundation Research
Aa2 MA Museum of Fine Arts Cultural
Aa2 NY Museum of Modern Art Cultural
Aa2 IN National Collegiate Athletic Association Service / Advocacy
Aa2 DC National Geographic Society Cultural
Aa2 VA Nature Conservancy Service / Advocacy
Aa2 PA Western Pennsylvania School For Blind Children Service / Advocacy
Aa3 DC AARP Service / Advocacy
Aa3 DC American Association for the Advancement of Science Service / Advocacy
Aa3 MD American Center For Physics Service / Advocacy
Aa3 NY American Museum of Natural History Cultural
Aa3 DC Brookings Institution Research
Aa3 IN Children's Museum of Indianapolis Cultural
Aa3 NY Cold Spring Harbor Laboratory Research
Aa3 MA Combined Jewish Philanthropies of Greater Boston Philanthropic
Aa3 MA Draper Laboratory Research
Aa3 DC National Academy of Sciences Research
Aa3 PA National Board of Medical Examiners Service / Advocacy
Aa3 DC National Public Radio Cultural
Aa3 MO Nelson Gallery Foundation Cultural
Aa3 IL Poetry Foundation Cultural
Aa3 NY Salvation Army (Eastern Territory) Service / Advocacy
U.S. PUBLIC FINANCE
30 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Rated Institutions by Rating (Ratings as of September 2, 2014)
Rating State Institution Sub-sector
Aa3 CA Scripps Research Institute Research
Aa3 MO St. Louis Art Museum Cultural
Aa3 MA The Sterling And Francine Clark Art Institute Cultural
Aa3 NY Wildlife Conservation Society Cultural
Aa3 DC World Wildlife Fund Service / Advocacy
A1 MN Amherst H. Wilder Foundation Service / Advocacy
A1 IL Art Institute of Chicago Cultural
A1 CO Auraria Higher Education Center Service / Advocacy
A1 MA Broad Institute Research
A1 NY Carnegie Hall Cultural
A1 IL Catholic Bishop of Chicago Service / Advocacy
A1 NY Consumers Union of United States, Inc. Service / Advocacy
A1 IN Indianapolis Museum of Art Cultural
A1 NY Institute of International Education Service / Advocacy
A1 ME Jackson Laboratory Research
A1 IL Jewish Federation of Metropolitan Chicago Philanthropic
A1 IL Lyric Opera of Chicago Cultural
A1 OK Oklahoma Medical Research Foundation Research
A1 CA Salk Institute For Biological Studies Research
A1 CA Salvation Army (Western Territory) Service / Advocacy
A1 IL Shedd Aquarium Society Cultural
A1 TX Texas Medical Center Service / Advocacy
A1 MD United States Pharmacopeial Convention Service / Advocacy
A1 CA Walt And Lilly Disney Foundation Philanthropic
A2 MN American Public Media Group Cultural
A2 IN Archdiocese of Indianapolis Service / Advocacy
A2 MN Blandin Foundation Philanthropic
A2 CA California Academy of Sciences Cultural
A2 PA Carnegie Museums of Pittsburgh Cultural
A2 IL Field Museum of Natural History Cultural
A2 MA Isabella Stewart Gardner Museum Cultural
A2 NY Lincoln Center For The Performing Arts Cultural
A2 CA Los Angeles County Museum of Natural History Foundation Cultural
A2 FL NCCI Holdings, Inc. Service / Advocacy
A2 NY New York Public Library Cultural
A2 DC Service Employees International Union Service / Advocacy
A2 VA United Negro College Fund Service / Advocacy
A2 CO University Corporation For Atmospheric Research Research
A2 GA Woodruff Arts Center Cultural
A3 IL Chicago Symphony Orchestra Cultural
U.S. PUBLIC FINANCE
31 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Rated Institutions by Rating (Ratings as of September 2, 2014)
Rating State Institution Sub-sector
A3 CA Diocese of Oakland Service / Advocacy
A3 WA Fred Hutchinson Cancer Research Center Research
A3 IN Indiana Historical Society Cultural
A3 CA Los Angeles County Museum of Art Cultural
A3 NY Metropolitan Opera Association Cultural
A3 CO National Conference of State Legislatures Service / Advocacy
A3 CA Performing Arts Center of Los Angeles County Cultural
A3 CA SRI International Research
Baa1 NY Alvin Ailey Dance Foundation Cultural
Baa1 TX Diocese of Austin Service / Advocacy
Baa1 PA Franklin Institute Cultural
Baa1 CA Sanford Burnham Medical Research Institute Research
Baa1 PA Wistar Institute Research
Baa1 NY YMCA of Greater New York Service / Advocacy
Baa2 MO MRIGlobal Research
Baa2 PA Philadelphia Corporation For Aging Service / Advocacy
Baa3 TX YMCA Greater Houston Area Service / Advocacy
U.S. PUBLIC FINANCE
32 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Appendix VII
Moody's Not-for-Profit Ratio Definitions
Age of plant (number of years)
Provides a rough indicator of institutional deferred maintenance as well as the operating efficiency of the existing plant facilities.
Accumulated depreciation divided by depreciation expense
Annual Days Cash on Hand (X)
Measures the number of days an institution is able to cover its cash operating expenses from Annual Liquidity
Annual liquidity times 365 divided by total expenses less depreciation less additional, unusually large non-cash expenses
Annual Liquidity ($)
Measures the amount of unrestricted cash and investments from operating and endowment/long-term accounts that can be liquidated and spent within one year.
Unrestricted operating funds available within one month plus unrestricted operating funds available within one year plus lesser of endowment funds available within one month and endowment funds available within one year or unrestricted board designated net assets and unrestricted working capital (or other unrestricted funds commingled with the endowment)
Annual Liquidity to Demand Debt (%)
Measures an institution’s ability to repay its demand debt from its Annual Liquidity
Annual liquidity divided by demand debt
Average MADS coverage (x)
Measures margin of protection for maximum annual debt service payments, averaged over three years.
Three year average of annual operating surplus (deficit) plus interest and depreciation expenses, divided by maximum principal and interest payments
Average operating margin (%)
Averages operating margin over three years for a longer-term view. Three year average of annual operating surplus divided by three year average of total revenues
Capital Spending Ratio (%)
Measures the annual investment in capital facilities compared to annual depreciation expense.
Purchases of property, plant and equipment (from statement of cash flows) divided by depreciation
Debt service to operations (%)
Measures burden of actual debt service payments relative to overall operating budget.
Actual annual debt service divided by total operating expenses
Direct debt ($)
Measures direct obligations of institution. Institutions obligations (e.g. bonds, notes, commercial paper, capital lease, bank loans, and draws upon lines of credit)
Direct debt service coverage (x)
Measures actual margin of protection for annual debt service payments from annual operations.
Annual operating surplus (deficit) plus interest and depreciation expenses, divided by actual principal and interest payments
Expendable financial resources ($)
Measure of financial resources that are ultimately expendable. Total unrestricted and temporarily restricted net assets less net investment in plant
Expendable financial resources-to-direct debt (x)
Measures coverage of direct debt by financial resources that are ultimately expendable.
Expendable financial resources divided by direct debt
Free expendable financial resources-to-operations (x)
Measures coverage of annual operating expenses by expendable resources remaining after pro-forma payment of all direct debt.
Expendable financial resources less direct debt, divided by total operating expenses
Gifts and pledges (% of total revenue)
Measures reliance on gift revenue as a percent of total revenue. Gift revenue divided by total operating revenues
U.S. PUBLIC FINANCE
33 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Moody's Not-for-Profit Ratio Definitions
Grants and contracts (% of total revenue)
Measures reliance on grants and contracts as a percent of total revenue. Grants and contracts revenue divided by total operating revenues
Investment Income (% of total revenue)
Measures reliance on investment income (endowment spending) as a percent of total revenue.
Investment income revenue divided by total operating revenues
MADS to operations (%)
Measures maximum annual debt service burden on the annual operating budget.
Maximum annual debt service divided by total operating expenses
Monthly Days Cash on Hand (X)
Measures the number of days an institution is able to operate (cover its cash operating expenses) from Monthly Liquidity
Monthly liquidity times 365 divided by total expenses less depreciation and additional, unusually large non-cash expenses
Monthly Liquidity ($)
Measures the amount of unrestricted cash and investments from operating and endowment/long-term accounts that can be liquidated and spent within 30 days.
Unrestricted operating funds available within one month plus lesser of endowment funds available within one month or unrestricted board designated net assets and unrestricted working capital (or other unrestricted funds commingled with the endowment)
Monthly Liquidity to Demand Debt (%)
Measures an institution’s ability to repay its demand debt from its Monthly Liquidity Monthly liquidity divided by demand debt
Operating cash flow margin (%)
Indicates the excess cash flow margin (or deficit) by which annual cash flow cover operating expenses.
Adjusted total unrestricted revenues (adjustments include limiting investment income to 5% of average of previous three years cash and investments and subtracting net assets released for construction and acquisition of fixed assets), less total unrestricted operating expenses, plus depreciation plus interest plus other large non-cash expenses, divided by adjusted total unrestricted revenues
Operating margin (%)
Indicates the excess margin (or deficit) by which annual revenues cover operating expenses.
Adjusted total unrestricted revenues (adjustments include limiting investment income to 5% of average of previous three years cash and investments and subtracting net assets released for construction and acquisition of fixed assets), less total unrestricted operating expenses, divided by adjusted total unrestricted revenues
Return on financial resources (%)
Indicates the direction and degree to which an institution has improved its financial resources (excluding plant).
Increase (decrease) in total financial resources divided by average total financial resources (the sum of beginning and ending total financial resources divided by two)
Return on net assets (%)
Indicates direction and degree to which an institution has improved its total resource base.
Increase (decrease) in total net assets, divided by average total net assets (the sum of beginning and ending net assets divided by two)
Total cash & investments-to-direct debt (x)
Measures coverage of direct debt by assets that generate investment return. Total cash and investments divided by direct debt
Total cash & investments ($)
Measure base of assets that generate investment return. Total cash and investments
Total expenses ($)
Measures size of operating budget. Total operating expenses
Total financial resources ($)
Measures total financial wealth of institution. Total net assets less net investment in plant
U.S. PUBLIC FINANCE
34 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Moody's Not-for-Profit Ratio Definitions
Total financial resources-to-direct debt (x)
Measures coverage of direct debt by total financial resources including permanent endowments.
Total financial resources divided by direct debt
Total gift revenue ($)
Measures philanthropic support of institution committed to annual operations, capital and endowment.
Total gift revenue (unrestricted, temporarily restricted, and permanently restricted)
Total revenues ($)
Measures overall size of operating budget. Total adjusted operating revenue as stated in audit, plus 5% of average three year cash and investments level, less net assets released for capital, less realized and unrealized gains or losses. Individual colleges may have other adjustments made to operating revenues based on additional information not included in audit
Unrestricted financial resources ($)
Amount of most liquid financial resources. Total unrestricted net assets less net investment in plant
Unrestricted financial resources-to-direct debt (x)
Measures coverage of direct debt by the most liquid financial resources. Unrestricted financial resources divided by direct debt
Unrestricted financial resources-to-operations (x)
Measures coverage of annual operations by the most liquid financial resources. Unrestricted financial resources divided by total operating expenses
Variable Rate Exposure (%)
Measures the portion of direct and indirect debt issued in variable rate mode. Sum of par amount of debt outstanding under all series of bonds and other debt issued as variable rate securities, divided by total comprehensive debt. (variable rate bonds synthetically swapped to a fixed rate are included in variable rate debt)
U.S. PUBLIC FINANCE
35 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Moody’s Related Research
Industry Outlook:
» 2014 Outlook – US Higher Education, Not-for-Profits and Independent Schools, November 2013 (160659)
Rating Methodology:
» Not-for-Profit Organizations (other than Healthcare and Education), March 2014 (164670)
Special Comment:
» Independent Research Institutes: Challenging Environment Drives Multiple Strategies, September 2014 (175119)
Excel Supplement:
» Not-for-Profit Organizations Confront Ongoing Revenue Pressure in Fiscal 2013 Medians (Excel Supplement, September 2014 (175467)
To access any of these reports, click on the entry above. Note that these references are current as of the date of publication of this report and that more recent reports may be available. All research may not be available to all clients.
U.S. PUBLIC FINANCE
36 SEPTEMBER 18, 2014
MEDIAN REPORT: NOT-FOR-PROFIT ORGANIZATIONS CONFRONT ONGOING REVENUE PRESSURE IN FISCAL 2013 MEDIANS
Report Number: 175466
Authors Matthew Kuchtyak Susan Fitzgerald
Editor Karen Kedem
Associate Analyst Aparna Bansal
Production Associate Srinivasan Raghavan
© 2014 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. (“MIS”) AND ITS AFFILIATES ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY’S (“MOODY’S PUBLICATIONS”) MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS FOR RETAIL INVESTORS TO CONSIDER MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS IN MAKING ANY INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s Publications.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.
MIS, a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Shareholder Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”
For Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail clients. It would be dangerous for “retail clients” to make any investment decision based on MOODY’S credit rating. If in doubt you should contact your financial or other professional adviser.