2014 Money & TCU: The Financial Report of Texas Christian University

(Read our reports on TCU's finances for FY2013 and FY2012, as well as our reports on TCU Athletics expenditures for the past three years, here - here - here)

With yet another fantastic year under its belt, I think it is fair to say TCU has emerged as a financial juggernaut in the world of higher education. During FY2014, which spanned from June 1, 2013 through May 31, 2014, TCU set records for revenues, expenses, gross assets, net assets, and endowment funds as well as net revenues and cash on hand.

Add it all together: TCU is flying high.

And yes, questions will persist around TCU regarding the growth in tuition and scholarships at our favorite university, and the nature of financial responsibility versus taking care of our students. But, I for one take great comfort in knowing that TCU is financially solvent, responsible, and well positioned for future success. How we spend our money and resources in the future, well, that's a conversation for another day.

So, without further adieu, I give you the financial report of Texas Christian University for FY2014.

(PriceWaterhouseCoopers provided auditing services again for TCU)

Revenues & Expenses

	FY2014	FY2013	FY2012
Revenues	$637,593,857	$549,758,910	$441,642,790
Expenses	$483,096,425	$452,917,777	$445,774,825
Net Revenue	$154,497,432	$96,841,133	($4,132,035)

$154 million in net revenue is a high water mark for TCU, which saw revenue rise in each of its reported categories. At this pace, TCU will be generating $1 billion in annual revenue during its 2020-2021 fiscal year. When you stop to think about it, it is fairly astounding: Over a 24 month period, TCU has grown its gross revenue by almost $200 million, while increasing expenses at only 1/5th that rate.

Revenues

	FY2014	FY2013	FY2012
Contributions, Grants, & Gifts	$88,125,905	$70,469,133	$57,591,543
Tuition & Fees	$349,288,369	$324,021,197	$295,513,724
Residential Administration	$28,097,477	$26,204,950	$25,251,638
Dining Services	$17,928,982	$16,415,785	$16,046,587
Athletics & Campus Rec	$31,275,446	$25,819,320	$11,337,701
Bookstore	$1,199,587	$1,256,555	$1,357,569
Other	$11,222,465	$10,921,990	$11,032,074
Investment Income	$17,584,982	$3,442,675	$13,884,772
Royalties	$35,309,121	$20,000,914	$22,909,729
Rental Income	$993,082	$795,634	$723,992
Net Gain (Securities)	$53,345,722	$47,503,921	($17,006,143)

Contributions dropped in FY2012, the year after the big fundraising push for the new Amon G. Carter stadium, but they have rebounded strongly over the last two years, up almost 60%. Consistent increases in tuition, room, and board have helped those revenue sources grow, along with the continued success in the athletic arena. And, not to be forgotten, Royalties have also grown quite a bit over the last three years thanks to our new platform in the Big 12.

Expenses

	FY2014	FY2013	FY2012
Grants/Scholarships	$110,794,219	$99,705,544	$91,482,695
Compensation for Officers, Directors, Trustees	$6,790,584	$6,276,397	$5,727,890
Salaries and Wages	$155,973,730	$147,630,210	$138,295,140
Pension Plan Accruals	$13,960,978	$15,837,052	$31,254,161
Employee Benefits	$25,076,026	$25,806,802	$22,849,746
Payroll Taxes	$10,579,053	$9,845,152	$9,181,171
Legal	$670,199	$564,636	$665,782
Accounting	$382,540	$685,179	$564,528
Professional Fundraising	$52,064	$136,266	$138,567
Other	$21,650,172	$19,312,869	$17,073,049
Advertising/Marketing	$2,047,065	$1,760,553	$1,608,285
Office Expenses	$15,642,580	$14,768,694	$14,912,066
Information Technology	$2,824,207	$2,424,869	$2,366,005
Occupancy (Hotels)	$16,682,272	$15,791,804	$17,704,508
Travel (Flights & Rentals)	$16,105,171	$16,027,238	$14,521,612
Conferences & Conventions	$994,309	$1,048,655	$861,102
Interest	$12,081,994	$8,868,652	$10,663,156
Depreciation	$41,262,456	$37,646,790	$34,533,477
Insurance	$2,344,515	$2,110,938	$1,999,187
Dues & Subscriptions	$5,930,707	$5,560,710	$5,647,396
Food Services	$14,860,185	$13,723,988	$13,142,758

Nothing much to note here, these numbers are always more interesting than informative. It IS interesting to note the dramatic decrease in payments to employee retirement and pension plans, which is something that was hotly debated at a TCU faculty senate meeting a few years ago. TCU has made it clear they would be cutting back on this benefit to cut costs, and they have certainly achieved their goal to the tune of 50%.

Also, for those doing math at home, tuition revenue has gone up almost $50 million, while grants/scholarships have only increased by $20 million over the same period.

Balance Sheet

Cash On Hand

	FY2014	FY2013	FY2012
Cash	$3,486,602	$3,398,963	$11,799,319
Savings	$63,965,365	$8,854,069	$38,772,248
Pledges/Grants Receivable (net)	$54,773,167	$44,122,419	$65,181,207
Accounts Receivable (net)	$28,784,057	$25,417,472	$24,329,631

Nothing much to say... We have plenty of cash.

Assets & Liabilities

	FY2014	FY2013	FY2012
Total Assets	$2,606,377,356	$2,301,635,724	$2,085,935,294
Accounts Payable	$66,342,308	$59,768,006	$66,895,486
Deferred Revenue	$24,433,490	$25,280,101	$21,774,621
Bond Liabilities	$475,925,771	$398,442,583	$394,312,090
Other Liabilities	$78,286,294	$78,334,124	$133,595,180
Total Net Assets	$1,961,389,493	$1,739,810,910	$1,469,357,917

Again, nothing much to say, except that a 15% rise in total assets every year is pretty strong, yes?

Endowment Funds

	FY2014	FY2013	FY2012
Beginning of Year Balance	$1,256,029,327	$1,110,867,981	$1,191,899,686
Contributions	$14,406,762	$17,494,442	$11,024,191
Net Investment Gain/Loss	$179,244,836	$184,348,844	($35,526,500)
End of Year Balance	$1,393,241,318	$1,256,029,327	$1,110,867,981

As of the end of May 2014, the endowment was valued at $1.4 billion, which I believe is the high water mark in its history. TCU tells us that $83 million is invested in external trust funds, $353 million in limited partnerships, $2 million in interest rate cap & derivatives, and $292 million in hedge funds. In addition, the endowment holds mineral interests worth, at fair market value, approximately $144 million.

Other Notes

• TCU reported 5,601 paid employees, up from 5,416 in FY2013 and 5,236 in FY2012.
• Of TCU's more than five thousand employees, 303 are paid $100,000 or more per year. That is up from 276 in FY2013 and 250 in FY2012.
• In addition to employees making $100k or more, TCU also paid 91 separate contractors more than $100k in FY2014. The largest were HC Beck ($25 million), Linbeck Group ($20 million), Sodexo ($16 million), Brandt ($5 million), and Hahnfeld Hoffer Stanford ($5 million).
• As part of its $110 million in grants and scholarships, TCU allocated those funds the following way: Undergraduate Financial Aid ($86 million), Graduate Financial Aid ($12 million), Grants in Aid ($3 million), Stipends ($4 million), and Tuition Equalization Grants ($4 million).
• TCU took out a $120 million loan in 2010 to finance construction of Amon G. Carter Stadium; $44 million was retired during FY2014.
• TCU took out a $103 million loan to finance campus construction in 2013, $80k was retired during FY2014.
• At the end of 2013, TCU took out a $50 million loan to finance the renovation of Daniel Meyer Coliseum. As of the end of FY2014, only $2 million had been issued and none had been retired.
• TCU paid Nike $598,349 for uniforms and equipment.
• TCU paid AT&T $541,290 for phone services.
• TCU paid American Airlines $390,872 for charter air travel.
• TCU paid Roger Williams Chrysler Dodge Jeep $233,227 for new vehicles.
• TCU paid Business Jet Access $225,207 for private jet charters.
• TCU was given a gift of 125 stock shares worth approximately $7.4 million, which TCU promptly sold.
• TCU was given one house worth $136,250.
• For use by the equestrian team, TCU was given 11 horses worth $944k.

Compensation

One note: The data above represents TCU's fiscal year, which ran from June 1, 2013 through May 31, 2014. However, compensation data is measured on a calendar year basis, so this data covers January 1, 2013 through December 31, 2013.

In the past, we have detailed everyone in the filling. This year, we are only going to do the top 7 or so. Go read the filling to see all 19.

Gary Patterson (Head Football Coach)

	CY2013	CY2012	CY2011
Base Pay	$3,489,284	$2,987,885	$2,587,557
Bonuses		$150,000	$184,000
Total Compensation	$3,940,026	$4,008,150	$3,120,760

Victor Boschini, Jr. (Chancellor)

	CY2013	CY2012	CY2011
Base Pay	$1,021,744	$930,077	$791,051
Bonuses	$100,000
Total Compensation	$1,742,196	$1,486,299	$1,234,823

Trent Johnson (Head Men's Basketball Coach)

	CY2013	CY2012	CY2011
Base Pay	$1,644,022	$1,096,870*
Bonuses
Total Compensation	$1,672,345	$2,213,784

*Coach was hired mid 2012, thus his salary here is from a partial year. His base salary is $1.6 million. He received $1 million as a one-time bonus to help him move to DFW.

James Hille (Chief Investment Officer)

	CY2013	CY2012	CY2011
Base Pay	$521,840	$510,235	$482,831
Bonuses	$122,889	$95,438	$173,756
Total Compensation	$1,114,351	$1,401,973	$935,815

Chris Del Conte (Athletic Director)

	CY2013	CY2012	CY2011
Base Pay	$534,244	$509,435	$408,546
Bonuses	$133,250	$141,772	$80,666
Total Compensation	$830,853	$811,527	$632,213

Jim Schlossnagle (Head Baseball Coach)

	CY2013	CY2012	CY2011
Base Pay	$374,065	$335,275	$298,309
Bonuses	$2,500	$32,500	$55,410
Total Compensation	$480,093	$466,303	$452,472

Calvin (Eddie) Williamson, Jr. (Associate Head Coach, Football)

	CY2013	CY2012	CY2011
Base Pay	$305,294
Bonuses
Total Compensation	$410,860

Compensation Notes

• For most employees in the 990 filing, pay is a combination of the following: Base, bonuses, deferred comp from earlier years (to encourage retention), other compensation (country clubs, private jets, etc.), and nontaxable benefits.
• Private/charter jet travel was provided to the wives of Victor Boschini, Gary Patterson, Jim Schlossnagle, and Eddie Williamson.
• Memberships to Colonial were provided to Victor Boschini, Chris Del Conte, Donald Whelan, James Hille, Trent Johnson, Jim Schlossnagle, Gary Patterson, Nowell Donovan, and Eddie Williamson.
• Victor Boschini deferred $360k of salary until 2016, when it will be paid if he is still employed.
• Victor Boschini received a $100k bonus.
• Chris Del Conte received a $83k bonus.
• Jim Schlossnagle received an $2,500 bonus. (WTF is the point...)