Annual Financial Report 2024 2025

Virginia Tech Financial Report 2024-2025

15. Long-term Leases Payable Long-term leases represent the university’s obligation to pay owners for the right to use the present service capacity of their assets. These obligations are primarily for leases of facilities, such as office space in the North End Center and Gilbert Place buildings, the North End Center parking garage, space in the Children’s National Hospital, and var ious office and laboratory spaces in the Virginia Tech Corporate Research Center. The university’s lease agreements for facilities typically range from 3-20 years, with renewal options equal to the base term appearing more frequently in the university’s 3-5-year lease agreements. The university utilizes stated or implicit rates when determinable, otherwise the university uses its incremental borrowing rate to discount lease payments. The weighted-average remaining lease term on the university’s leases is 13.6 years with a weighted-average discount rate of 3.57%. The university’s leases are primarily with the foundation and its subsidiaries. Several of the university’s leases with the foundation operate on a nonprofit basis, in which the rent owed is trued up at regular intervals to ensure cost-only rent. These agreements make up the majority of the university’s 20-year leases. The university’s long-term lease portfolio does not contain provisions for variable payments based on the university’s future performance or usage of the underlying assets. Additionally, university’s long-term lease portfolio does not contain provisions for residual value guarantees. The university had no impairment losses on its long-term lease portfolio in fiscal year 2025. The university has two commitments totaling $1.2 million commencing in fiscal year 2026. Long-Term Leases Payable Activity As of June 30, 2025 (all dollars in thousands) Beginning Ending Current Balance Additions Retirements Terminations Balance Portion Long-term leases payable Land $ 2,586 $ - $ 205 $ - $ 2,381 $ 211 Building 187,165 3,096 20,755 901 168,605 19,958 Equipment 24 - 24 - - - Infrastructure 62 - 32 - 30 30 Total long-term leases payable $ 189,837 $ 3,096 $ 21,016 $ 901 $ 171,016 $ 20,199

Future Principal Commitments For fiscal years subsequent to 2025 (all dollars in thousands)

Land

Building

Infrastructure

Total

2026 2027 2028 2029 2030

$

211 $

19,958 $

30 $

20,199 18,595 14,786 13,466 9,288 45,385 33,417 12,221 2,996

187 187 196 200 868 221

18,408 14,599 13,270 9,088 44,517 33,196 12,167 2,921

- - - - - - - - - -

2031-2035 2036-2040 2041-2045 2046-2050 2051-2055 2056-2059

54 75

100

481

581

82

-

82

$

2,381 $

168,605 $

30 $

171,016

Total future principal requirements

Future Interest Commitments For fiscal years subsequent to 2025 (all dollars in thousands)

Land

Building

Infrastructure

Total

2026 2027 2028 2029 2030

$

79 $

5,611 $

1 $

5,691 4,985 4,379 3,913 3,530 13,141 5,880 1,306

73 67 61 55 63 47 37 23

4,912 4,312 3,852 3,475 12,966 5,817 1,259

- - - - - - - - - -

2031-2035 2036-2040 2041-2045 2046-2050 2051-2055 2056-2059

175

326

363

7 -

30

6

6

$

686 $

42,537 $

1 $

43,224

Total future interest requirements

38