Annual Financial Report 2024 2025

Virginia Tech Financial Report 2024-2025 Management’s Discussion and Analysis (Unaudited)

university. The foundation is not part of this MD&A, but details regarding its financial activities can be found in Note 27 of the Notes to Financial Statements. Transactions between the university and this component unit have not been eliminated in this year’s financial statements. The following GASB statements of standards became effective and were implemented in fiscal year 2025: Statement 101, Compensated Absences and Statement 102, Certain Risk Disclosures . GASB Statement 101, Compensated Absences, was issued in June 2022. This statement requires a liability to be recognized for leave that is attributable to past service, accumulates, and is more likely than not to be used or paid, as well as for leave that has been used but not yet paid. Certain leave types, such as parental leave, are only recognized once the leave begins. Liabilities are measured based on the employee’s pay rate as of the financial statement date and include additional compensation amounts that are directly and incrementally tied to the leave payments. The university adopted GASB Statement 101 in fiscal year 2025 with an implementation date of July 1, 2024 and fiscal year ending June 30, 2024 has been restated as follows: Net position June 30, 2024 $ 2,972,030 Accrued compensated absences (4,199) Adjusted net position June 30, 2024 $ 2,967,831 In December 2023, GASB issued Statement 102 Certain Risk Disclosures . This statement aims to improve transparency regarding certain risks faced by state and local governments. Specifically, the statement requires disclo

Virginia Polytechnic Institute and State University, popularly known as Virginia Tech, is a comprehensive land-grant university located in Blacksburg, Virginia. The university offers approximately 280 graduate, undergraduate, and professional degree programs through its nine academic colleges: Agriculture and Life Sciences; Architecture, Arts, and Design; Engineering; Liberal Arts and Human Sciences; Natural Resources and Environment; Pamplin College of Business; Science; Virginia-Maryland College of Veterinary Medicine; and Virginia Tech Carilion School of Medicine. Virginia Tech has evolved into a position of increasing national promi nence since its founding in 1872, consistently ranking among the nation’s top universities for undergraduate and graduate programs. The university is an agency of the Commonwealth of Virginia and therefore included as a component unit in the Commonwealth of Virginia’s Annual Comprehensive Financial Report. The 14 members of the Virginia Tech Board of Visitors govern university operations. Members of the board are appointed by the Governor of Virginia. Overview This unaudited Management’s Discussion and Analysis (MD&A) is required supplemental information under the Governmental Accounting Standards Board’s (GASB) reporting model. It is designed to assist readers in under standing the accompanying financial statements and provide an overall view of the university’s financial activities based on currently known facts, deci sions, and conditions. This discussion includes an analysis of the university’s

sure of vulnerabilities arising from concentrations (lack of di versity in significant resource inflows or outflows) and con straints (external or internal limitations on a government’s operations or finances). The university must assess and dis close when such factors could lead to a substantial impact, particularly if related events have occurred, are occurring, or are likely to occur within 12 months of the financial statement’s issuance. Required disclosures include the nature of the concentration or con straint, associated events, and any mitigation actions taken. The statement is effective for fiscal years beginning after June 15, 2024, and all report

financial condition and results of operations for the fiscal year ended June 30, 2025. Compar ative numbers are included for the fiscal year ended June 30, 2024, and have been restated for the implementation of GASB Statement 101, Com pensated Absences . Since this presentation includes highly summarized data, it should be read in conjunction with the accompanying basic financial statements, including notes and other supplementary in formation. The university’s management is responsible for all of the financial information presented, including this dis cussion and analysis. The university’s financial statements have been pre

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ing periods thereafter. The university adopted GASB Statement 102 in fiscal year 2025 with an implementation date of July 1, 2024. The university deter mined there were no concentrations and constraints that met the disclosure requirements of GASB Statement 102. In April 2023, the National Association of College and University Business Officers (NACUBO) issued Advisory Report (AR) 2023-01 Public Institutions: Accounting for and Reporting Financial Aid as a Discount to supersede AR 2000-05. The updated reporting framework standardizes the treatment of institutional scholarships, grants, and other financial aid as a reduction of tuition and fee rev enue (contra-revenue) rather than as a scholarship expense. The new guidance also refines the methodologies used to estimate tuition discounts, improving alignment with financial aid disbursements and enhancing consistency and transparency across public institutions. The university adopted NACUBO AR 2023-01 in fiscal year 2025 with an implementation date of July 1, 2024.

pared in accordance with GASB Statement 35, Basic Financial Statements—and Management’s Discussion and Analysis—for Public Colleges and Universities , as amended by GASB Statements 37, 38, and 63. The three required financial statements are the Statement of Net Position (balance sheet), the Statement of Revenues, Expenses, and Changes in Net Position (operating statement), and the Statement of Cash Flows . These statements are summarized and analyzed in the following sections. In accordance with Section 2100 of the GASB codification, the university’s nine affiliated corporations were evaluated on the nature and significance of their relationship to the university. The Virginia Tech Foundation Inc. (VTF or the foundation) was determined to be a component unit and is presented in a separate column on the university’s financial statements. VTF serves the university by generating significant funding from private sources and aggressively managing its assets to provide supplemental funding to the

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