Stanford University Reports FY2010 Financial Results

STANFORD, Calif--(BUSINESS WIRE)-- Stanford University reported its financial results for fiscal year 2010 (FY2010), which ended August 31, 2010. Consolidated net assets increased $1.5 billion, or 7.5%, to end the year at $21.4 billion. The increase in net assets was largely due to positive investment returns. Consolidated results include the University, Stanford Hospital and Clinics, and Lucile Salter Packard Children's Hospital at Stanford. Net assets include the value of the endowment, expendable funds, plant facilities and other assets, less debt and other liabilities.

Net assets of the University, excluding the hospitals, increased $1.4 billion, or 8%, to $19.4 billion. The University’s endowment rose in value by 10% over the past year to approximately $13.9 billion. The growth in endowment resulted from investment gains, endowment gifts and other funds transferred into endowment, offset by the annual payout for university operations. Payout declined 11% to $855 million in FY10, supporting approximately 26% of operating expenses in FY2010, compared to 31% in FY2009.

In addition to the decline in payout, FY10 results reflect salary freezes, administrative streamlining, continued donor support and positive investment returns. The University ended the year with a surplus from operations of $210 million, compared to $362 million in the prior year. Revenues remained constant at $3.5 billion.

“When the financial downturn unfolded in 2008-2009, the University took swift action to reduce expenses and lower the endowment payout to operations,” said Randy Livingston, Vice President for Business Affairs and Chief Financial Officer. “While Stanford is in a stronger financial position today, we remain wary of the economic climate, the volatility of financial markets and the uncertainty around Federal research funding and healthcare reform.”

The net assets of the hospitals, which are each separate legal entities, increased $97 million to $2.0 billion in FY2010. The hospitals had a combined operating surplus of $152 million.

In April 2009 the University issued taxable debt and placed approximately $800 million of proceeds in money market funds to ensure adequate liquidity to meet potential capital calls from investment partnerships and to support University operations. In light of improved financial conditions, the University plans to reduce the liquidity fund to $400 million over the next several months.

FY2010 results were reported to the university's Board of Trustees on December 14 and are posted on the Stanford bondholder web pages (http://bondholder-information.stanford.edu).

Information in this press release contains statements that, to the extent they are not recitations of historical fact, may constitute "forward-looking statements." In this respect, the words "estimate," "project," "anticipate," "expect," "intend," "believe" and similar expressions are intended to identify forward-looking statements. A number of important factors affecting the university's business and financial results could cause actual results to differ materially from those stated in the forward-looking statements.