President's Report 2008

Fiscal 2008 was another strong financial year for Villanova, with the University’s endowment reaching an all-time high. Contributing to the successful year were robust operations, healthy investment returns, a significant reduction of long-term debt and the successful conclusion of Transforming Mindsand Hearts: The Campaign for Villanova.

• Cash increased by $14.0 million, principally due to a favorable operating budget variance for fiscal year 2008. The increase in the operating cash balance reflects the University’s ongoing efforts to accumulate cash for future capital expenditures.

• Investments increased by $19.5 million, as the endowment reached an all-time high of $355.3 million. This was the result of a 4.1% return on the endowment, cash inflows from planned savings of $8.3 million, and cash contributions from the capital campaign of $9.5 million.

• Land, buildings and equipment, net, increased by $34.7 million. This was the result of several large construction projects, including the Davis Center for Athletics and Fitness and the North Campus parking garage, each of which were completed during FY 2008, and Driscoll Hall, new home for the College of Nursing and the new School of Law Building.

• Long-term debt decreased by $7.5 million, as a result of the University’s scheduled principal payments on its existing debt issues.

• Net assets increased by $49.5 million, primarily as the result of operating income of $28.9 million, and contributions and pledges related to Transforming Minds and Hearts: The Campaign for Villanova, which was successfully concluded in December 2007.

• Operating income amounted to $28.9 million, for an operating margin of 8.5%.

While Villanova’s 2008 fiscal year was strong, the University, along with the entire global community, has been affected by the recent uncertainty and turbulence in our economy and financial markets. Moving forward, Villanova will continue to engage in the disciplined and conservative budget practices that have served us well over the long-term. We will also closely monitor the impact of the economy on all aspects of our operations, with special attention given to the effect on our students.

Villanova will continue to use its resources to support and enhance its reputation for academic excellence, to build, maintain and improve facilities to meet the evolving needs of its students, faculty and staff, to meet its debt service obligations and to finance strategic programs and initiatives.

Over the next year, the University will align its primary financial objectives with the overall strategic vision, plan and direction of the University, acknowledging that we may need to make critical decisions regarding some initiatives and operations.

Whatever challenges we may face, the Villanova community shares an unwavering commitment to provide our students with an outstanding educational experience. We will focus our efforts to ensure we are well-positioned to fulfill our mission in both the short- and long-term.