2012 Annual Report

Letter from Jeffrey Fernandez, Vice President for Finance and CFO

We are pleased to present the CY 2012 unaudited financial statements of the Woods Hole Oceanographic Institution (WHOI). The Institution faced several challenges in 2012. These ranged from managing cost increases in our unrestricted budget, to higher-than anticipated spending for cost-share on foundation-funded science and other science-related projects. We also succeeded in building stronger controls and processes associated with large project management.. WHOI continues to deal with significant cost containment pressures to keep our researchers cost-competitive with others in their fields.  The level of funded sponsored research was stable, and WHOI continues to enjoy the support of organizations and individuals who recognize the long-term benefits of basic research.

Statement of Financial Position

WHOI continues to have a strong balance sheet. At December 31, 2012 WHOI’s total assets were $531 million, total liabilities were $278 million and total net assets were $252 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 $59.1 million.

The Endowment’s $361 million represents 68% of the total assets at December 31, 2012.

Statement of Activities

WHOI’s total operating revenues decreased slightly by $1.0 million; from $220 million in CY 2011 to $219 million in CY 2012; and the Institution’s change in net assets from operating activities was ($4.4) million.

$14.7 million of endowment income and appreciation was distributed to operations as follows:

  • Education          $7.0 million
  • Research           $4.4 million
  • Unrestricted    $3.3 million

The Institution had overhead costs of $90.0 million, and approximately 67% of that amount, $60.4 million, was recovered from government and non-government research. The remainder was institutional expenses.

WHOI paid $4.9 million in interest during CY 2012 and $1.5 million in principal payments on the $59.1 million outstanding debt in CY 2012. 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 oceans 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 commercial marketplaces. We have also begun several initiatives to identify operational efficiencies and refine our cost distribution methods to offer sponsors and patrons the most cost-effective research.

Last updated: October 9, 2013