FY22 financial report print.indd

Virginia Tech Financial Report 2021-2022

Statement of Net Position The Statement of Net Position (SNP) presents the assets, liabilities, and net position of the university as of the end of the fiscal year. The purpose of this statement is to present a snapshot of the university’s financial position to readers of the financial statements. The data presented aids readers in determining the assets available to continue operations of the university. It also allows readers to see what the university owes to vendors, investors, and lending institutions. Finally, the SNP provides a picture of the university’s net position and the restrictions for expenditure of the components of net position. Sustained increases in net position over time is one indicator of the financial health of the organization. The university’s net position is classified as follows: Net investment in capital assets – Net investment in capital assets rep resents the university’s total investment in capital assets, net of accumulat ed depreciation, amortization, and outstanding debt obligations related to those capital assets. Debt incurred, but not yet expended for capital assets, is not included as a component of net investment in capital assets. Restricted component of net position, expendable – The expendable category of the restricted component of net position includes resourc es the university is legally or contractually obligated to expend, with restrictions imposed by external third parties. This category partially consists of quasi-endowments totaling $54.4 million. The investment of quasi-endowments is managed by VTF. Restricted component of net position, nonexpendable – The nonex pendable category of the restricted component of net position consists of endowment and similar type funds where donors or other outside sources have stipulated, as a condition of the gift instrument, the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income to be expended or added to principal. The university’s nonexpendable endowments of $13.6 million are included in its column on the SNP. Unrestricted component of net position – The unrestricted compo nent of net position represents resources used for transactions relating to academic departments and general operations of the university, and may be used at the discretion of the university’s board of visitors to meet current

expenses for any lawful purpose in support of the university’s primary mis sions of instruction, research, and outreach. These resources are derived from student tuition and fees, state appropriations, recoveries of facilities and administrative (indirect) costs, and sales and services of auxiliary enterprises and educational departments. The auxiliary enterprises are self-supporting entities that provide services for students, faculty, and staff. Examples of the university’s auxiliaries are intercollegiate athletics and student residential and dining programs. Total university assets increased by $273.4 million or 8.3% during fiscal year 2022, bringing the total to $3,565.3 million at year end. Current assets grew by $36.3 million. The growth is largely the result of an increase in accounts and contributions receivable of $19.5 million, predominantly in grants and contracts, and an increase of $6.8 million in cash and cash equivalents. There were also smaller increases in prepaid expenses ($4.1 million), due from the Commonwealth of Virginia ($3.2 million), invento ries ($2.5 million) and a slight increase in notes receivable. Noncurrent as sets grew by $237.1 million. Capital assets, net, increased by $167.2 million reflecting the ongoing construction of university research and instructional facilities, and the capitalization of completed facilities discussed in detail in the following section, Capital Asset and Debt Administration . Long-term investments rose $58.7 million mainly due to investments strategies that place more funds in the long-term endowment pool for investment purposes. Noncurrent cash and cash equivalents increased $13.5 million due to an increase in commercial paper and cash funding to cover capital project payables at year end. There was also an increase of $5.3 million in the due from the Commonwealth of Virginia line item attributable to additional capital activity being funded by VCBA 21st century bonds and maintenance reserve appropriation funding. Other noncurrent assets rose by $4.8 million predominantly as a result of an increase in the restricted other postemployment benefit (OPEB) asset for the Virginia Sickness and Disability Program (VSDP). Accounts and contributions receivable fell by $6.6 million due to a decrease in capital project being funded by private funding while noncurrent notes receivable fell by $2.1 million. Total university liabilities decreased by $245.6 million or 16.0% during fiscal year 2022. The current liabilities category increased $59.1 million and the noncurrent liabilities category decreased by $304.7 million. The rise in current liabilities was due to an increase of $25.1 million in commer cial paper which was used to temporarily fund capital projects as well as a

Summary of Assets, Liabili�es, and Net Posi�on

Assets, Liabilities and Net Position For the years ended June 30, 2022 and 2021 (all dollars in millions)

2022

2021 (restated)

4,000

2022

2021

Change

3,500

Amount

Percent

(restated)

3,000

Current assets

$

427.4 $

391.1 $

36.3

9.3 % 7.9 % 8.9 % 8.3 %

Capital assets, net

2,279.7

2,112.5

167.2

Other assets

858.2

788.3

69.9

2,500

Total assets

3,565.3

3,291.9

273.4

2,000

Deferred outflow of resources

108.6

142.8

(34.2)

(23.9)%

1,500

Current liabilities

365.7 922.2

306.6

59.1

19.3 % (24.8)% (16.0)%

Noncurrent liabilities

1,226.9 1,533.5

(304.7) (245.6)

Total liabilities

1,287.9

1,000

Deferred inflow of resources

262.1

86.1

176.0

204.4 %

500

Invested in capital assets, net

1,704.4

1,521.3

183.1

12.0 %

Restricted

259.1 160.4

251.7

7.4

2.9 %

Unrestricted

42.1

118.3 308.8

281.0 % 17.0 %

Assets

Liabilities and Net Position

Assets

Liabilities and Net Position

$

2,123.9 $

1,815.1 $

Total net position

8

Management's Discussion and Analysis