WHOI 2002 Annual Report subnav

Financials > Report from the Vice President for Finance and Administration and Chief Financial Officer

Report from the Vice President for Finance and Administration and Chief Financial Officer

Carolyn Bunker
Carolyn Bunker
Substantial progress was made this year in achieving the vision articulated by President and Director Bob Gagosian (see the President’s Report). We increased research support to the Ocean Institutes, completed the first phase of improving our shore facilities, and began construction of a new coastal research vessel. Despite persistent weakness in the financial markets, the Institution’s overall 2002 financial position is healthy. We continue to show positive operating results.

Sponsored research revenue released to operations increased 10 percent to $97.5 million in 2002 compared to an increase of 14 percent to $88.8 million in 2001. Federally sponsored research, excluding ship and submersible operations, was $59.1 million compared to $58 million in 2001. This growth demonstrates the Institution’s ability to compete successfully for research grants and contracts. The Institution had a planned, modest under-recovery of overhead expenses.

Gifts, grants, and pledges from private sources totaled $13.8 million in 2002, a remarkable achievement considering global economic problems. Outstanding pledges at the end of 2002 were $4.5 million, compared to $1.8 million in 2001. Friends of the Institution continue to be generous during this difficult financial period.

Although our endowment declined from $268.2 million in 2001 to $234.6 million in 2002, the results were in line with our benchmarks. Our 2002 endowment total return of -11.4 percent outperformed the S & P 500 index of -22.1 percent. Our endowment spending policy seeks to preserve the fund’s real purchasing power while providing a predictable stream of income to support annual budgetary needs. During 2002, we distributed $5.4 million of endowment income to education and $4.1 million to research.

The Institution had $8 million in long-term debt on its statement of financial position at year-end, and the use of low-cost, 1 percent at year-end, tax-exempt debt has a substantial financial benefit. We anticipate that tax-exempt borrowings will finance a substantial portion of planned new laboratory space on the Quissett Campus as well as renovations to existing laboratories in the Village Campus. State-of-the-art laboratory space is essential if we are to remain competitive in the conduct of research, graduate education, and recruitment and retention of the best scientists.

In October 2002, a fire occurred in the Clark Laboratory on the Quissett Campus. There were no injuries and minimal fire damage but extensive smoke damage, compounded by the sensitive nature of many instruments and facilities in the laboratory. We immediately resettled the two dozen affected investigators in temporary workspaces, and began the cleanup, which includes replacement or repair of equipment. We expect this work to be completed by summer 2003. The Institution recorded a receivable of $13.3 million to reflect the estimated insurance proceeds that will cover the cost of restoring the building to a pre-fire condition. Following the fire, we have undertaken a comprehensive review of all our facilities and emergency procedures to further minimize the risk of such an event.

The Institution will safeguard the assets created over 72 years to ensure that our research and education continue to thrive. We are indebted to the scientists, staff, students, trustees, and friends whose contributions and talents enable us to pursue our vision of furthering understanding of the oceans.

Carolyn A. Bunker, Vice President for Finance and Administration