Financial Highlights Graphs

The operating results for Saint Mary’s College continued to improve during the fiscal year ended June 30, 2013. Primary evidence of this improvement is the $23.8 million increase in net assets that included a $1.6 million increase in net assets from operations (or net income) for the fiscal year. The increase in net assets from operations primarily resulted from continued growth in net student revenues.

As shown in the accompanying graph, the increase in net assets from operations that occurred during the fiscal year ended June 30, 2013, was the continuation of a three-year trend of improved operating results. The increase in net assets from operations also represents the College’s continuing recovery from the Great Recession and the success of strategies implemented to strengthen programs and facilities.

The remainder of the overall increase in net assets that occurred during the fiscal year can be attributed to macro-economic factors, including the recovery in global equity markets and the gradual increase in long-term interest rates. These factors were evidenced by a $16.9 million increase in the market value of the College’s long-term (primarily endowment) investments and by a $6.2 million decrease in the market value of the College’s liability for an interest rate exchange (or swap) agreement.

The increase in the market value of long-term investments also represents the continuation of a five-year trend in the recovery of the College’s endowment from the credit crisis and Great Recession as shown in the accompanying graph. Strategies to closely monitor portfolio risk and to further diversify portfolio investments have resulted in a $44.3 million or a 44.3 percent increase in the market value of endowment investments between June 30, 2009, and June 30, 2013. The changes in the macroeconomic environment also allowed the College to modify its variable rate demand bond structure to further stabilize and simplify it.

The fiscal year ended June 30, 2013 demonstrated continued improvement in the College’s operating results. It also demonstrated that the College was positioned to take advantage of trends in global financial markets to both increase its investment return and restructure its debt.

Many of the strategies formulated and implemented by the College to improve operating results and take advantage of global financial trends will continue to be pursued in the year and years ahead. These strategies include the further diversification of endowment investments, the further simplification and stabilization of the debt structure, the strategic expansion of funding for institutional student financial aid, the investment in programs that attract and retain students, the investment in new and renovated facilities and technology infrastructure, as well as the maintenance of a higher level of resources earmarked for fundraising operations. These and other strategies should help assure that Saint Mary’s College continues to successfully pursue its mission as it begins its second 150 years of operation.

Respectfully submitted,

Peter A. Michell
Vice President for Finance and Treasurer

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Saint Mary's College of California
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Moraga, CA 94575
(925) 631-4000
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