October 20, 2016
The financial position of the University of Michigan remains strong, according to the fiscal year 2016 consolidated financial statements, adopted Thursday by the Board of Regents.
At the close of the fiscal year June 30, the university's net position, which represent residual interest in the university's assets after liabilities are deducted, stood at $13 billion, down slightly from $13.3 billion a year earlier. This change is largely attributed to a net investment loss of $130 million on the university's investment portfolio, compared to net income of $358 million the previous year.
Among the financial highlights in the report are these:
• The university again earned the highest credit ratings available from Standard & Poor's (AAA) and Moody's Investor Services (Aaa). U-M is one of only six public universities in the country to maintain both of these ratings, which are a strong indication of the institution's financial health.
• The U-M research enterprise tallied a record year of $1.39 billion in research expenditures, up 7.2 percent from the previous year. Much of that gain came from federal research funding.
• U-M Hospitals and Health Centers continued its strong financial performance during the year, with an operating margin of 6.3 percent — or $190.4 million — on operating revenues of $3 billion.
• The value of U-M's endowment fell to $9.7 billion, a decline from $10 billion the previous year, reflecting a small net investment loss and endowment spending, which was partially offset by new endowment gifts.
The consolidated financial statements of the university are audited by the independent accounting firm of PricewaterhouseCoopers LLP.