Financial Audit Report Imgix

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Financial & Audit Report
May 31, 2013 & 2012
CONTENTS
FINANCIAL OVERVIEW 2012 - 2013 ...................................................................................................... 2
MANAGEMENT STATEMENT OF RESPONSIBILITY .......................................................................... 3
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ................................................. 4
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Financial Position................................................................................ 7
Consolidated Statements of Activities ............................................................................................. 8
Consolidated Statements of Cash Flows ........................................................................................ 10
Notes to Consolidated Financial Statements.................................................................................. 11
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT’S REPORT ON ADDITIONAL
INFORMATION......................................................................................................................................... 36
OTHER FINANCIAL INFORMATION (not subjected to auditing procedures)
Tuition and Fees, Room and Board 2004 - 2013 ........................................................................... 38
Student Enrollment 2003 - 2012 .................................................................................................... 39
Student Selectivity 2004 - 2013 ..................................................................................................... 40
Endowment Market Value 2004 - 2013 ......................................................................................... 41
Net Assets and Liabilities 2004 - 2013 .......................................................................................... 42
ELON UNIVERSITY
FINANCIAL OVERVIEW 2012 – 2013
We are pleased to present to you the continued strong financial results of another productive year at
Elon University. The institution’s financial strength is indicative of accomplishments in all of its
programs. The details of some of these achievements are located on our Annual Report website:
http://www.elon.edu/e-web/bft/business/annual_report_2013/

Elon University continues to receive top national rankings - one indication of the institution’s strength
and vitality. Elon earned a long list of top honors in the 2013 “America’s Best Colleges” rankings by U.S

News & World Report, including the #1 “up-and-coming” university in the South and the #1 master’s-
level university in the South with “an unusually strong commitment to undergraduate teaching.” Elon also
earned recognition in the U.S. News “Great Schools, Great Prices” rankings, rating among the top 15
Southern universities based on a combination of academic quality and net costs for students and their
families. In addition, Elon is consistently ranked by Kiplinger’s and Fiske as one of the nation’s best
values. For the 11th consecutive year The Princeton Review has included Elon in its list of the “Best 378
Colleges” in the nation. Bloomberg Businessweek named Elon’s MBA program the nation’s #1 part-time
program and gave the undergraduate business program a top-50 national ranking. The President’s
Community Service Honor Roll recognized the university for the seventh year as a national leader in
service-learning and civic engagement. Elon is also a leading producer of Peace Corps volunteers and one
of the top universities for producing Fulbright scholars. The university’s commitment to sustainability
and other environmental initiatives has been recognized by U.S. News & World Report and the Sierra
Club, and for the fourth consecutive year, The Princeton Review has named Elon one of the most
“environmentally responsible green colleges” in the United States

Elon University continues to invest in academic programs and facilities. The university continued its
commitment to creating a premier residential campus with the opening of The Station at Mill Point
neighborhood in August 2012. The 24 townhouse-style homes and commons building provide 324 juniors
and seniors with an off-campus experience while remaining part of the university community. Lakeside
Dining Hall, which opened in February 2013, provides 38,000 square feet of state-of-the-art dining and
meeting space and includes international food options. Hunt Softball Park, which also opened in February
2013, is the newest addition to Elon’s athletics facilities. The Numen Lumen Pavilion, the university’s
multifaith center, opened in March 2013 to nurture interfaith dialogue, reflection, and understanding

Elon expanded its campus with the purchase of the 20-acre Snyder Campus of Elon Homes and Schools
for Children, located adjacent to the university’s South Campus. The land and buildings will provide
expanded space for academic and student life programs, as well as health and wellness services for
students, faculty, and staff

Consistent with the university’s sustainability efforts, the number of LEED-certified buildings on campus
has increased to 17, including homes in The Station at Mill Point neighborhood

Increasing enrollment in Elon’s undergraduate and graduate programs provides a solid financial base for
the institution. All major financial indicators moved in a favorable direction this past year, which is
detailed in the following pages. Some highlights include an increase in assets and net assets (assets minus
liabilities) of 20% and 14%, respectively, as well as a 6.7% growth in net tuition revenue (tuition minus
financial aid). The university’s endowment continued its recent growth and ended the year with a market
value of $159 million as of May 31, 2013, the highest in Elon’s history

This strong financial foundation, combined with the significant program achievements noted on the
website, places Elon in an excellent position to meet the aspirations of its strategic plan, the Elon
Commitment

Leo M. Lambert Gerald Whittington
President Senior Vice President for Business, Finance and Technology
2
ELON UNIVERSITY
MANAGEMENT STATEMENT OF RESPONSIBILITY
The management of Elon University has prepared the accompanying consolidated financial statements in
accordance with generally accepted accounting principles and is responsible for their integrity, objectivity
and fair presentation

The management of Elon University maintains a system of internal control designed to provide
reasonable assurance, on a cost-effective basis, that assets are safeguarded, transactions are executed in
accordance with management’s authorization and financial records are reliable for preparing financial
statements. This system of control provides reasonable assurance that errors or irregularities that could be
material to the consolidated financial statements are prevented or detected within a timely period. Key
elements in the system include the communication of policies and procedures, selection and training of
qualified personnel, and organizational arrangements that provide an appropriated division of
responsibility. Management believes that, as of May 31, 2013 and 2012, Elon University’s system of
internal control was adequate to accomplish the objectives discussed herein

Elon University’s Board of Trustees addresses its oversight responsibility for the consolidated financial
statements through its Audit Committee, which is composed of Trustees who are independent of Elon
University management. The Audit Committee meets at least three times annually with the University’s
management and independent auditor to review matters relating to financial reporting, auditing and
internal control. To ensure auditor independence, the independent auditor has full and free access to the
Audit Committee during the meetings both with management present and in executive session without
management present

The independent accounting firm is engaged to audit, in accordance with auditing standards generally
accepted in the United States of America, the financial statements of Elon University. The auditor was
given unrestricted access to all financial records and related data including minutes of all meetings of the
Board of Trustees and its committees. All representations made to the independent auditor by University
management during the audit were true and accurate and to the best of their knowledge and belief

Leo M. Lambert
President
Gerald Whittington
Senior Vice President for Business, Finance and Technology
3
Grant Thornton LLP
201 S College Street, Suite 2500
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Charlotte, NC 28244-0100
T 704.632.3500
F 704.334.7701
www.GrantThornton.com
To the Board of Trustees of
Elon University: Grant Thornton LLP
201 S College Street, Suite 2500
REPORT
We have OF INDEPENDENT
audited the accompanying CERTIFIED PUBLIC ACCOUNTANTS
consolidated financial statements of Elon University
Charlotte, NC 28244-0100
T 704.632.3500 (the
University) (a nonprofit North Carolina corporation), which comprise the Fwww.GrantThornton.com 704.334.7701
consolidated
To the Board
statement of Trustees
of financial of as of May 31, 2013, and the related consolidated statement of
position
Elon University:
activities, and cash flows for the year then ended, and the related notes to the financial
statements

We have audited the accompanying consolidated financial statements of Elon University (the
University)
Management’s (a responsibility
nonprofit North for the Carolina corporation), which comprise the consolidated
financial statements
statement
Management of financial
is responsible position forasthe
of preparation
May 31, 2013, andandfairthepresentation
related consolidated
of these statement
consolidated of
activities, and cash flows for the year then ended,
financial statements in accordance with accounting principles generally accepted in the and the related notes to the financial
statements

United States of America; this includes the design, implementation, and maintenance of internal
control relevant to the preparation and fair presentation of consolidated financial statements
Management’s
that are free from responsibility for the financial
material misstatement, statements
whether due to fraud or error

Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally accepted in the
Auditor’s responsibility
United States of America;
Our responsibility is to express this includes
an opinion the design,
on theseimplementation, and maintenance
consolidated financial statementsofbased internal
on
control relevant to the preparation and fair presentation
our audit. We conducted our audit in accordance with auditing standards generally accepted in of consolidated financial statements
that United
the are freeStates from of material
America. misstatement, whetherrequire
Those standards due to that
fraudweorplan
error.and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements are free from
Auditor’smisstatement

material responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on
our audit
An audit. involves
We conducted performing our audit in accordance
procedures with audit
to obtain auditing standards
evidence aboutgenerally acceptedand
the amounts in
the United States
disclosures in the of America. Those
consolidated standards
financial requireThe
statements. thatprocedures
we plan and perform
selected dependthe audit
on theto
obtain reasonable assurance about whether the consolidated
auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements are free from
material
consolidated misstatement

financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the University’s preparation and
An audit
fair presentation involvesofperforming the consolidated procedures to statements
financial obtain auditin evidence
order to about
design the
auditamounts
proceduresand
disclosures
that are appropriate in the consolidated financial statements

in the circumstances, but not for The procedures
the purpose selected depend
of expressing an opinion on theon
auditor’s judgment, including the assessment of the risks
the effectiveness of the University’s internal control. Accordingly, we express no such opinion. of material misstatement of the
consolidated
An audit alsofinancial includes statements, evaluating the whether due to fraud
appropriateness or error. In
of accounting making
policies usedthoseand risk
the
assessments, the auditor considers internal control relevant
reasonableness of significant accounting estimates made by management, as well as evaluating to the University’s preparation and
fair presentation
the overall presentation of the of consolidated financial
the consolidated statements
financial in order to design audit procedures
statements

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the
We effectiveness
believe that the of theauditUniversity’s
evidence we internal control. Accordingly,
have obtained is sufficient andwe express no such
appropriate opinion.a
to provide
An audit also
basis for our audit opinion. includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating4
Grant Thornton LLP
the overall
U.S. member presentation
firm of Grant Thornton International Ltdof the consolidated financial statements

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion

4
Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all
Opinion respects, the financial position of the University as of May 31, 2013, and the results of
material
In our
its opinion,and
operations theitsconsolidated
cash flows financial
for the statements referredintoaccordance
year then ended above present
with fairly, in all
accounting
material respects,
principles generallythe financialinposition
accepted of the
the United University
States as of May 31, 2013, and the results of
of America

its operations and its cash flows for the year then ended in accordance with accounting
principles
The generally
financial accepted
statements in theUniversity
of Elon United States of and
as of America

for the year ended May 31, 2012 were
audited by other auditors. Those auditors expressed an unmodified opinion on those 2012
The financial
financial statements
statements of report
in their Elon University as of and
dated September for the year ended May 31, 2012 were
21, 2012

audited by other auditors. Those auditors expressed an unmodified opinion on those 2012
financial statements in their report dated September 21, 2012

Charlotte, North Carolina
September 20, 2013
Charlotte, North Carolina
September 20, 2013
5
Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd
5
Grant Thornton LLP
ELON UNIVERSITY
THIS PAGE INTENTIONALLY LEFT BLANK

6
ELON UNIVERSITY
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
May 31, 2013 and 2012
2013 2012
ASSETS:
Cash and cash equivalents $ 16,572,619 $ 5,947,326
Accounts receivable, net 3,124,078 2,215,433
Prepaid expenses and other assets 2,063,626 1,212,205
Inventories 78,211 68,039
Deposits with bond trustee 37,295,185 18,695,138
Contributions receivable, net 5,525,091 6,839,278
Investments 211,336,740 187,522,905
Loans to students, net 3,874,838 4,396,765
Bond issue costs 1,238,308 1,089,839
Construction in progress 23,594,224 32,164,352
Property and equipment, net 274,352,321 222,594,352
Total Assets $ 579,055,241 $ 482,745,632
LIABILITIES:
Accounts payable $ 7,826,987 $ 7,029,093
Accrued liabilities 12,561,756 12,817,947
Student deposits 5,507,299 5,450,896
Deferred revenue 2,947,772 2,793,287
Other liabilities 5,594,122 4,126,969
Obligation under capital leases 1,037,888 1,150,819
Bonds payable 159,395,000 109,105,000
Obligation under interest rate swap agreements 9,126,616 11,416,065
U.S. Government advances for student loans 3,455,674 3,534,937
Total Liabilities 207,453,114 157,425,013
NET ASSETS:
Unrestricted 244,096,239 207,606,347
Temporarily restricted 33,934,344 31,130,768
Permanently restricted 93,571,544 86,583,504
Total Net Assets 371,602,127 325,320,619
Total Liabilities and Net Assets $ 579,055,241 $ 482,745,632
The accompanying notes are an integral part of these consolidated financial statements. 7
ELON UNIVERSITY
CONSOLIDATED STATEMENT OF ACTIVITIES
For the Year Ended May 31, 2013
Temporarily Permanently
Unrestricted Restricted Restricted Total
CHANGES IN NET ASSETS:
Revenues and gains:
Tuition and fees $ 177,051,421 $ - $ - $ 177,051,421
Tuition discount (34,367,708) - - (34,367,708)
Net tuition 142,683,713 - - 142,683,713
Sales and service of auxiliary enterprises 31,398,680 - - 31,398,680
Federal grants 817,029 - - 817,029
State grants 1,567,074 - - 1,567,074
Other grants 753,602 - - 753,602
Contributions 13,676,078 4,211,895 1,688,637 19,576,610
Contributions - Pledges - 2,386,523 463,678 2,850,201
Investment income 699,663 403,946 - 1,103,609
Gain on investments 6,624,300 6,754,721 4,475,988 17,855,009
Loss on disposal of property and equipment (1,767,931) - - (1,767,931)
Athletics 3,288,465 245,029 - 3,533,494
Other sources 1,339,013 186,652 54,662 1,580,327
Total Revenues and Gains 201,079,686 14,188,766 6,682,965 221,951,417
Net Assets Released From/To Restrictions 11,080,115 (11,385,190) 305,075 -
Total Revenues, Gains and Other Support 212,159,801 2,803,576 6,988,040 221,951,417
Expenses:
Instruction 86,462,802 - - 86,462,802
Student services 29,073,578 - - 29,073,578
Auxiliary enterprises 29,964,252 - - 29,964,252
Academic support 7,423,122 - - 7,423,122
Institutional support 25,035,604 - - 25,035,604
Total Expenses 177,959,358 - - 177,959,358
Increase in Net Assets before change in interest
rate swap agreements 34,200,443 2,803,576 6,988,040 43,992,059
Change in value of interest rate swap agreements 2,289,449 - - 2,289,449
Increase in Net Assets 36,489,892 2,803,576 6,988,040 46,281,508
Net Assets - Beginning of Year 207,606,347 31,130,768 86,583,504 325,320,619
Net Assets - End of Period $ 244,096,239 $ 33,934,344 $ 93,571,544 $ 371,602,127
The accompanying notes are an integral part of these consolidated financial statements. 8
ELON UNIVERSITY
CONSOLIDATED STATEMENT OF ACTIVITIES
For the Year Ended May 31, 2012
Temporarily Permanently
Unrestricted Restricted Restricted Total
CHANGES IN NET ASSETS:
Revenues and gains:
Tuition and fees $ 165,928,171 $ - $ - $ 165,928,171
Tuition discount (31,923,257) - - (31,923,257)
Net tuition 134,004,914 - - 134,004,914
Sales and service of auxiliary enterprises 29,735,518 - - 29,735,518
Federal grants 699,327 - - 699,327
State grants 1,710,228 - - 1,710,228
Other grants 165,207 33,000 - 198,207
Contributions 2,478,258 4,241,577 2,210,690 8,930,525
Contributions - Pledges - 651,250 425,775 1,077,025
Investment income 736,478 310,885 7,494 1,054,857
Gain on investments (594,802) (524,225) (719,615) (1,838,642)
Loss on disposal of property and equipment (1,857,164) - - (1,857,164)
Athletics 3,273,079 295,788 - 3,568,867
Other sources 1,289,492 155,139 11,358 1,455,989
Total Revenues and Gains 171,640,535 5,163,414 1,935,702 178,739,651
Net Assets Released From/To Restrictions 6,120,537 (6,117,282) (3,255) -
Total Revenues, Gains and Other Support 177,761,072 (953,868) 1,932,447 178,739,651
Expenses:
Instruction 81,111,031 - - 81,111,031
Student services 26,593,041 - - 26,593,041
Auxiliary enterprises 26,459,544 - - 26,459,544
Academic support 7,427,870 - - 7,427,870
Institutional support 23,892,920 - - 23,892,920
Total Expenses 165,484,406 - - 165,484,406
Increase (decrease) in Net Assets before change in
interest rate swap agreements 12,276,666 (953,868) 1,932,447 13,255,245
Change in value of interest rate swap agreements (7,956,769) - - (7,956,769)
Increase (decrease) in Net Assets 4,319,897 (953,868) 1,932,447 5,298,476
Net Assets - Beginning of Year 203,286,450 32,084,636 84,651,057 320,022,143
Net Assets - End of Period $ 207,606,347 $ 31,130,768 $ 86,583,504 $ 325,320,619
The accompanying notes are an integral part of these consolidated financial statements. 9
ELON UNIVERSITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
May 31, 2013 and 2012
2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Increase in Net Assets $ 46,281,508 $ 5,298,476
Adjustments to Reconcile Increase in Net Assets to
Net Cash Provided by Operating Activities:
Depreciation 9,437,139 8,986,386
Amortization of bond issue costs 86,904 75,843
Contributions of assets - other (999,206) (505,929)
Contributions of assets - property and equipment (10,208,267) -
Contributions of assets - endowment (123,473) (56,556)
Contributions restricted to endowment (2,003,842) (2,579,908)
(Gain) loss on investments (17,885,009) 1,838,642
Loss on disposal of property and equipment 1,767,931 1,857,164
(Increase) decrease in:
Accounts receivable (908,645) 826,647
Prepaid expenses and other assets (851,421) (337,888)
Inventories (10,172) 14,551
Contributions receivable 1,314,187 2,814,633
Loans to students 521,927 (135,689)
Increase (decrease) in:
Accounts payable 797,894 1,366,390
Accrued liabilities 61,104 782,988
Student deposits 56,403 549,536
Deferred revenue 154,485 194,327
Other liabilities 1,467,153 506,308
Obligation under interest rate swap agreements (2,289,449) 7,956,769
U.S. Government advances for student loans (79,263) (215,171)
Net cash provided by operating activities 26,587,888 29,237,519
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales and maturities of investments 17,677,036 6,776,908
Purchases of investments (22,606,656) (16,739,332)
Proceeds from disposal of property and equipment 9,680 -
Purchases of property and equipment (44,103,672) (44,906,501)
Increase in deposits with bond trustee (18,600,047) (12,964,295)
Net cash used by investing activities (67,623,659) (67,833,220)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bond issuance 54,595,000 40,340,000
Payments for bond issue costs (235,373) (442,946)
Reduction of capital leases (520,878) (299,069)
Principal payments on bonds (4,305,000) (3,590,000)
Contributions restricted to endowment 2,127,315 2,636,464
Net cash provided by financing activities 51,661,064 38,644,449
Net increase in cash and cash equivalents 10,625,293 48,748
Cash and cash equivalents, Beginning of year 5,947,326 5,898,578
Cash and cash equivalents, End of year $ 16,572,619 $ 5,947,326
The accompanying notes are an integral part of these consolidated financial statements. 10

Management and independent auditor to review matters relating to financial reporting, auditing and internal control. To ensure auditor independence, the independent auditor has full and …

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