2013 Annual Report

Letter from Jeffrey Fernandez, Vice President for Finance and CFO

Woods Hole Oceanographic Institution faced several challenges in 2013. These ranged from managing cost increases in our unrestricted budget, reduced federal funding and cost containment pressures to keep the Institution competitive with others in their field. We successfully identified and implemented several operational efficiencies this year, and we will continue to evaluate costs and cost distribution methods, in order to offer scientists and their sponsoring agencies the most cost-effective research. Once again the Institution received an AA- rating with a stable outlook from Standard & Poor’s. This favorable rating will enable the Institution to continue and further relationships with business partners, both federal and non-federal. We also continue to succeed in building stronger controls, processes, and systems to support our science and an evolving organization.

Statement of Financial Position

WHOI continues to have a strong balance sheet. At December 31, 2013 WHOI’s total assets were $562.5 million, total liabilities were $231.9 million and total net assets were $330.6 million.

Net assets represent the accumulated financial strength of a not-for-profit organization and are an important gauge of its ability to carry out its mission. Included in the liabilities is the Massachusetts Health and Educational Facilities Authority bond debt of $57.6 million.

The endowment, $396.3 million, represents 70% of the total assets at December 31, 2013.

Statement of Activities

WHOI’s total operating revenues increased by $2.9 million; from $213.5 million in CY 2012 to $216.4 million in CY 2012; and the Institution’s change in net assets from operating activities was ($1.3) million.

$16.5 million of endowment income and appreciation was distributed to operations as follows:

  • Education          $6.9 million
  • Research           $5.7 million
  • Unrestricted       $3.9 million

The Institution had overhead costs of $87.5 million, and approximately 66% of that amount, $57.8 million, was recovered from the government and non-government research. The remainder was institutional expenses.

WHOI paid $4.8 million in interest during CY 2013 and $1.6 million in principal payments on the $57.6 million outstanding debt in CY 2013. The Federal government allows interest and depreciation for real property and equipment in the Institution’s overhead rates for reimbursement.

Summary

The Institution’s commitment to understanding the ocean is unchanged; however, the federal funding environment continues to provide a challenge. WHOI is looking to expand its sources of revenue by leveraging its industry recognized core skills in both the federal and industry marketplaces. We have begun an Institution-wide initiative to examine WHOI’s blueprint for success in future years.

 

 

Last updated: October 10, 2014