Cornell University 2016-2017 Financial Report

2016-2017 Financial Report

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1

Cornell University 2016-2017 Financial Report

CONTENTS

Highlights 3

Message from the Executive Vice President and Chief Financial Ofﬁ cer 4

Financial Review by the University Controller 5

Report of Independent Auditors 8

Notes to the Consolidated Financial Statements 13

University Administration 40

Board of Trustees and Trustees At Large 41

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The audited Financial Report is available online at: http://www.dfa.cornell.edu/about-us/reports

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CORNELL UNIVERSITY HIGHLIGHTS

2016-17

2015-16 2014-15

Fall enrollment (excluding in absentia)

Undergraduate 14,566 14,315 14,453

Graduate 5,965 5,879 5,757

Professional 2,857 2,746 2,663

Total fall enrollment 23,388 22,940 22,873

Degrees granted

Baccalaureate degrees 3,646 3,758 3,674

Masters degrees 2,792 2,598 2,502

Ph.D. degrees 555 555 555

Other doctoral degrees (J.D., M.D., D.V.M.) 403 386

374

Total degrees granted 7,396 7,297 7,105

Tuition rates

Endowed Ithaca 50,712$ 48,880$ 47,060$

Contract Colleges

Resident 33,968$ 32,740$ 30,910$

Nonresident 50,712$ 48,880$ 47,050$

Medical Campus 52,500$ 50,950$ 49,500$

Business 61,584

$

59,532$

58,192

$

Law 61,400$ 59,950$ 59,360$

Veterinary Medicine 33,732$ 32,750$ 31,800$

Volumes in library (in thousands) 8,184 8,087 8,046

Academic workforce

Full-time employees

Faculty 3,964 3,842 3,705

Nonfaculty 881

882

888

Part-time employees

Faculty 299 285 281

Nonfaculty 153 192 145

Total academic workforce 5,297 5,201 5,019

Nonacademic workforce

Full-time employees 11,225 10,866 10,475

Part-time employees 611 575 579

Total nonacademic workforce 11,836 11,441 11,054

University Endowment

Market value of total university endowment (in millions) 6,516.4$ 5,757.7$ 6,037.5$

Unit value of Long Term Investment Pool 55.51$ 52.32$ 57.31

$

Gifts received, excluding pledges (in millions) 535.9$ 512.0$ 540.3$

New York State appropriations through SUNY (in millions) 132.0$ 131.5$ 131.4$

Medical Physician Organization fees (in millions) 1,050.4$ 982.4$ * 927.6$

Sponsored research volume (in millions)

Direct expenditures 493.4$ 496.3$ 497.4$

Indirect-cost recovery 131.5$ 138.0$ 138.6$

Selected land, buildings, and equipment items & related debt (in millions)

Additions to land, buildings, and equipment 545.0$ 471.4$ 335.8$ *

Cost of land, buildings, and equipment 7,613.6$ 7,115.0$ 6,662.0$

Outstanding bonds, mortgages, notes payable and capital leases 1,356.7$ 1,519.5$ * 1,542.8$

* Certain prior-year amounts have been reclassified to conform to the current year presentation.

4

MESSAGE FROM THE EXECUTIVE VICE PRESIDENT AND

CHIEF FINANCIAL OFFICER

Cornell’s ﬁ scal position strengthened in a number of ways in ﬁ scal year 2017. Our operating margins improved, invest-

ment return was 12.5 percent, and post-retirement beneﬁ t and swap liabilities decreased by $50 million and $81 mil-

lion, respectively. There continues to be an extraordinary demand for a Cornell education, and we are well-positioned

under the leadership of our new President, Martha E. Pollack, to remain one of the preeminent research institutions

in the world.

Over 47,000 prospective students applied for 3,375 undergraduate places in the Class of 2021, and we remain selective

in our admissions process, with a 12.7 percent acceptance rate for fall 2017 freshman applicants, compared with 14.1

percent a year ago. Cornell also maintains a steady matriculation yield rate, which has consistently averaged more than

50 percent. And, with 11.5 percent of our undergraduate students from outside the United States, our geographical

proﬁ le remains diverse and global. We achieve this level of selectivity and diversity while honoring our commitment

to our land-grant mission, with 31 percent of the Class of 2021 hailing from New York state.

University operating revenues have grown by 25 percent over the past ﬁ ve years, from $3.2 billion to $4.0 billion. The

largest growth area has been the Medical Physician Organization at Weill Cornell Medicine, which now makes up over

26 percent of the University’s total operating revenue (compared to 22 percent in ﬁ scal year 2012).

Cornell remains a leader in research, a critical factor in attracting outstanding faculty members and enhancing the

educational experience for both undergraduate and graduate students. The University generated almost $600 million

in grant and contract revenues in ﬁ scal year 2017, comprising 15 percent of the University’s total operating revenues.

Operating costs at Cornell are less dependent on endowment payout than other highly endowed institutions, mostly

due to the University’s revenue diversity. Less than 9 percent of the University’s operating costs was funded from its

endowment in ﬁ scal year 2017. University operating expenses increased over $160 million, or 4 percent, from over $3.8

billion to $4.0 billion, this past year. This is mainly the result of the almost 7 percent increase in the Medical Physician

Organization over the same period. The University experienced an operating loss of $7.5 million this year.

As of June 30, 2017, Cornell had $1.3 billion of bonds and notes outstanding, including $137 million of outstanding

commercial paper. The University has a notional amount of $785 million in interest rate swaps, whose fair value is de-

termined by an external swap consultant. Change in valuation between June 30, 2016 and June 30, 2017, decreased the

mark-to-market liability by $81 million, due to the change in interest rates over this period. In February, the University

redeemed its Series 2009 taxable bonds with a maturity date in January 2019.

Over the past ﬁ scal year, there has been no shortage of uncertainties. We have, however, managed through these chal-

lenges to place Cornell on a ﬁ rmer ﬁ scal footing. I am certain that the coming year will continue to present chal-

lenges for higher education, which we are committed to facing head-on, while focusing on our commitment to “One

Cornell” and mission-critical priorities set forth by President Pollack. With this in mind, I am conﬁ dent that our cher-

ished institution will continue to forge a path as a leader among its peers, and remain a preeminent research university

with a global impact.

Joanne M. DeStefano

Executive Vice President and Chief Financial Ofﬁ cer

5

year ended June 30, 2017. More information about these

and other recent standards impacting the University can

be found in Note 1P.

FINANCIAL YEAR IN REVIEW

Statement of Financial Position

The University’s overall net assets increased by $985.6 mil-

lion. Because of this performance in the current year, the

statement of ﬁ nancial position, or balance sheet, has been

strengthened, with over of $10.0 billion in net assets, includ-

ing $3.1 billion in unrestricted net assets.

Assets

Cash is subject to variation from year to year because of the

University’s holdings as of June 30 in cash equivalents, i.e.,

securities with an initial maturity term of ninety days or less.

At the end of ﬁ scal year 2017, cash was $.8 million lower

than the prior year, which represents a decrease of .5 percent.

Receivables from all sources, more fully disclosed in Note 2

of the consolidated ﬁ nancial statements, decreased by $96.8

million, or 11.3 percent.

Investments as of June 30, 2017 were $7.1 billion, an 8.2

percent increase from the prior year. The increase in the

fair value is primarily the result of unrealized net gains as

of the end of this ﬁ scal year in addition to an increase of 6.1

percent in participation in the LTIP. Fair-value adjustments

are often related to the asset allocations in the portfolio, with

some sectors outperforming others.

The University continues to enhance its physical plant with

new buildings, improvements to older buildings, and infra-

structure projects. The $247.5 million or 6.2 percent increase

in land, buildings, and equipment in ﬁ scal year 2017 consists

of projects placed in service as well as construction in prog-

ress (“CIP”). During the ﬁ scal year, the University placed

into service renovations to Upson Hall, Cornell Health,

and Kimball Hall. CIP at ﬁ scal year-end includes several

major projects, such as the College of Veterinary Medicine

expansion and the Ag Quad Utility Infrastructure Upgrade

and Landscape Revitalization. Cornell Tech also recorded

a capital lease for a co-location building (now named “The

Bridge”) at a value of $64.2 million.

Liabilities

In total, accounts payable and accrued expenses decreased

by $75.8 million for the year.

Of the deferred beneﬁ ts of $610.5 million, $395.2 million

relates to pension and other postretirement beneﬁ ts, which

decreased 11.3 percent over the prior year due to factors

OVERVIEW

The University ended the ﬁ scal year with over $10.0 billion

in net assets, up from $9.0 billion the previous year. Total

unrestricted net assets are $3.1 billion. Total assets increased

by $668.9 million, while total liabilities decreased by $316.8

million. The change in net assets from operating activities

increased from the prior year, with a $7.5 million net op-

erating loss for the year, and the change in net assets from

non-operating activities swung from a decrease of $391.9

million in the prior year to an increase of $993.1 million in

the current year. Market conditions were responsible for a

large part of the change in net assets.

NEW STANDARDS, EMERGING ISSUES,

AND INITIATIVES

The Financial Accounting Standards Board (FASB), which

establishes ﬁ nancial accounting and reporting standards

for public and private companies and not-for-proﬁ t or-

ganizations, continues to be very active. Since January of

2014, the FASB has issued sixty-seven new updates, some

of which could have signiﬁ cant changes for accounting and

reporting. The University monitors closely the FASB’s Ac-

counting Standard Updates (“ASUs”), and evaluates each

for relevance and impact.

Three recent updates are of particular importance to the

University. ASU 2014-09—Revenue from Contracts with

Customers (Topic 606) is intended to provide a compre-

hensive, industry-neutral revenue recognition model to

increase ﬁ nancial statement comparability across companies

and industries, and signiﬁ cantly reduce the complexity in-

herent in today’s revenue recognition guidance. ASU 2016-

02—Leases (Topic 842) addresses the criticism that current

accounting standards do not adequately inform ﬁ nancial

statement users of the full nature and implications of leasing

transactions. The new standard will require operating leases

to be recognized as right-to-use assets and lease liabilities

on the balance sheet. Finally, ASU 2016-14—Not-for-Proﬁ t

Entities (Topic 958): Presentation of Financial Statements

for Not-for-Proﬁ t Entities is intended to improve the infor-

mation presented in ﬁ nancial statements and notes about

a not-for-proﬁ t entity’s liquidity, ﬁ nancial performance,

and cash ﬂ ows. The revenue recognition and not-for-proﬁ t

reporting standards are effective for ﬁ scal year 2019, and the

new lease standard for ﬁ scal year 2020.

ASU 2017-07—Compensation—Retirement Beneﬁ ts (Topic

715) allows only the service costs to be presented as operat-

ing expenses; the other elements of the net periodic costs

must be considered non-operating. The effective date of this

change is the ﬁ scal year ending June 30, 2019; however, the

University has elected to adopt this standard for the ﬁ scal

FINANCIAL REVIEW BY THE UNIVERSITY CONTROLLER

6

described below. These liabilities are further disclosed in

Note 6.

Funds held in trust for others represent resources that are

invested by the University as a custodian for other closely

related parties. Independent trustees are responsible for

investing the funds and for the designation of income

distribution. The decrease of $16 million was the result of

a combination of withdrawals amounting to $35 million,

and an increase in market value.

The bonds and notes payable decline of $235.1 million was

due primarily to the 2009 bond debt defeasance of $250 mil-

lion and $29 million in principal payments, offset by $52.7

million additional debt for the Hudson JV building and

project loans. These bonds and notes payable are further

disclosed in Note 8.

Operating Revenues

For ﬁ scal year 2017, operating expenses exceeded operating

revenue by .19 percent, resulting in a $7.5 million net oper-

ating loss. The Medical Physician Organization continues

to grow, with revenues up 6.9 percent, reaching almost $1.1

billion, driven by the maturation of the Lower Manhat-

tan practices and network physicians. All other operating

revenue, excluding the Medical Physician Organization,

had a net increase of $136.6 million, or 4.8 percent, while

operating expenses increased by $161.6 million, or 4.2 per-

cent. The following graph shows University consolidated

revenues for the past ﬁ ve years.

In ﬁ scal year 2017, gross tuition revenue increased by 4.6

percent, as a result of Board-authorized tuition increases

and a slight increase of 448 students, for an overall enroll-

ment of 23,388. The scholarship allowance represents the

amount of institutional grant aid for the cost of attendance;

this allowance remained relatively consistent with the prior

year. Additionally, the University provides ﬁ nancial aid to

students to defray the cost of living expenses; this aid is

reported in supplies and general expense, and is disclosed

in Note 10.

Combined direct and indirect revenues from grants and

contracts increased slightly, by 1.7 percent.

Contribution revenue for operations was $297.6 million,

or an 11.6 percent increase from the prior year.

Distributed investment return increased by 8.5 percent in this

ﬁ scal year. Investment payout on the long-term investment

pool (“LTIP”) shares is the major component of this revenue.

The LTIP is a mutual-fund-like vehicle used for investing

the University’s true endowment funds, funds functioning

as endowment, and other funds that are not expected to be

expended for at least ﬁ ve years. Investment return included in

operating revenues consists of amounts appropriated by the

Board of Trustees from the pooled endowment, and income

and realized gains and losses on investments from working

capital and non-pooled endowments and similar funds.

Revenue for educational activities and other sales and ser-

vices increased by $33.9 million, or 4.9 percent. Of this

increase, $24.4 million resulted from additional support

from New York Presbyterian Hospital.

Net assets released from restrictions represents the transfer of

funds from temporarily restricted net assets to unrestricted

net assets as a result of the satisfaction of donor-imposed

contribution stipulations with respect to timing or purpose.

In ﬁ scal year 2017, this amount was $356.9 million.

Operating Expenses

Expenses for compensation and beneﬁ ts are the major

component of operating expenses for a research university,

and Cornell is no exception. Consistent with the prior year,

salary and beneﬁ t expense is 64.3 percent of overall operat-

ing expenses. This expense increased by $142.8 million, or

5.9 percent. Beyond the overall salary improvement plan,

averaging 2.3 percent in Ithaca, compensation at WCM

was a major component of this increase, due to increased

headcount related to strategic initiatives and expansion of

the Medical Physician Organization.

Supplies and general expense decreased in ﬁ scal year 2017

by $10.6 million, or 1.6 percent.

Other operating expenses remained relatively ﬂ at. The Uni-

versity is committed to managing overall costs without

jeopardizing its ability to carry out its missions and strategic

initiatives, and continues to focus efforts on streamlining,

efﬁ ciencies, and reducing administrative burden. The fol-

lowing graph shows University consolidated expenses for

the past ﬁ ve years.

LONG-TERM INVESTMENT POOL

Source and applications (in millions)

Beginning market value

Gifts and other additions

Withdrawals

Realized and unrealized gain/(loss)

Ending market value

Unit value at year-end (in dollars)

$0

$1,000

$2,000

$3,000

$4,000

$5,000

2013 2014 2015 2016 2017

Fi s cal year ended June 30

Operating Revenues

(in millions)

Net tu ition

Grants and contracts

Contribut ion s

Medical physicians

organization

Educational acti vities,

sales and services

All oth er operating

revenue

7

Non-Operating Revenues and Expenses

Non-operating activities represent those in support of the

University but not directly related to its core activities. These

would include funding from New York State for buildings;

funding from donors restricted to capital projects, trusts, or

endowments; investment returns, net of amounts distrib-

uted; and non-operating income and expense affected by

fair-value adjustments at ﬁ scal year-end.

New York State has provided signiﬁ cant appropriations, over

$212.8 million in the past ﬁ ve years, to allow the University

to build and improve the facilities for the contract colleges.

The current year revenues increased by $3.5 million from

the prior year.

In 2016, funding was received from the New York City

Economic Development Corporation and used for the con-

struction of the new campus on Roosevelt Island. Grants and

contracts for capital acquisitions decreased by $8.4 million

in the current year because this project is near completion.

Non-operating contributions for buildings, trusts, and

permanent endowment were $390.5 million, resulting in a

59.0 percent increase from the prior year.

The $175.0 million year-over-year increase in value of in-

terest rate swaps is based on the fair value of the debt swap

portfolio at June 30.

The overall non-operating gain of $993.1 million for ﬁ scal

year 2017 is driven by the remaining income and expense

items that are signiﬁ cantly affected by market factors. The

$405.0 million gain reﬂ ected as investment return in the

non-operating section is net of the amount distributed of

$355.9 million reﬂ ected in the operating section of the state-

ment of activities. The total operating and non-operating

return for ﬁ scal year 2017 is a $760.9 million gain, which

includes $361.0 million of unrealized gains. The investment

return for long-term investments was 12.5 percent for the

year, as compared with -3.3 percent in the prior year. Over

the last three years, the annualized return of the long-term

investments is 4.0 percent.

The $195.4 million year-over-year increase, reﬂ ected as

the change in pension and postretirement costs in the

non-operating section, is affected by numerous factors.

This ﬁ gure includes gains, losses, and other changes in the

actuarially determined beneﬁ t obligations arising in the

current period but not yet reﬂ ected within net periodic

beneﬁ t cost. The actuarial gains were driven primarily by

increases in the discount rates used and by favorable actual

vs. expected investment returns.

Summary

As we celebrate the inauguration of Cornell University’s

President Martha E. Pollack and the ofﬁ cial opening of our

exciting new Cornell Tech campus on New York City’s Roos-

evelt Island, we are buoyed by the prospects for an incredible

future. The current year’s ﬁ nancial results are indicative of

the University’s commitment to manage operating expenses,

enhance new and existing revenue streams, and improve pro-

cesses and procedures. I am conﬁ dent that we will continue

to strengthen our business model and our commitment to

“One Cornell” through focus and connectivity, and remain

dedicated to our stewardship responsibilities.

William Sibert

University Controller

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

5,197.5$

5,378.1$ 3,794.3$ 4,223.2$ 4,921.8$ 4,786.9$ 5,188.6$ 5,896.3$ 5,973.7$ 5,629.0$

236.8 190.5 573.9 210.6 155.3 287.4 349.7 378.2 337.0 479.2

(130.1) (340.9) (578.7) (286.9) (233.0) (354.1) (422.2) (440.8) (439.2) (414.0)

73.9 (1433.4) 433.7

774.9 (57.2) 468.4 780.2 140.0 (242.5) 669.1

5,378.1$ 3,794.3$ 4,223.2$ 4,921.8$

4,786.9$ 5,188.6$ 5,896.3$ 5,973.7$ 5,629.0$ 6,363.3$

65.37$ 45.12$

47.38$ 53.58$ 50.67$ 53.30$ 58.45$ 57.31$ 52.32$ 55.51$

$0

$1,000

$2,000

$3,000

$4,000

$5,000

2013 2014 2015 2016 2017

Fi s cal year ended June 30

Operating Expenses

(in millions)

Compensatio n and

Ben efits

Purchased Servic es

Suppl ies and General

Expense

Maintenance and

Facilities C osts

Interest Expense

Depreciation Expense

8

FINANCIAL

STATEMENTS

Report of Independent Auditors

CONSOLIDATED

To The Board of Trustees of Cornell University

We have audited the accompanying consolidated ﬁ nancial statements of Cornell University (the “Uni-

versity”), which comprise the consolidated statement of ﬁ nancial position as of June 30, 2017 and the

related consolidated statements of activities and of cash ﬂ ows for the year then ended.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated ﬁ nancial

statements in accordance with accounting principles generally accepted in the United States of Ameri-

ca; this includes the design, implementation and maintenance of internal control relevant to the prep-

aration and fair presentation of consolidated ﬁ nancial statements that are free from material misstate-

ment, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on the consolidated ﬁ nancial statements based on our au-

dit. We conducted our audit in accordance with auditing standards generally accepted in the United

States of America. Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the consolidated ﬁ nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

in the consolidated ﬁ nancial statements. The procedures selected depend on our judgment, including

the assessment of the risks of material misstatement of the consolidated ﬁ nancial statements, whether

due to fraud or error. In making those risk assessments, we consider internal control relevant to the

University’s preparation and fair presentation of the consolidated ﬁ nancial statements in order to de-

sign audit procedures that are appropriate in the circumstances, but not for the purpose of expressing

an opinion on the effectiveness of the University’s internal control. Accordingly, we express no such

opinion. An audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of signiﬁ cant accounting estimates made by management, as well as evaluating the

overall presentation of the consolidated ﬁ nancial statements. We believe that the audit evidence we

have obtained is sufﬁ cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated ﬁ nancial statements referred to above present fairly, in all material

respects, the ﬁ nancial position of Cornell University at June 30, 2017, and the changes in its net assets

and its cash ﬂ ows for the year then ended in accordance with accounting principles generally accepted

in the United States of America.

Other Matter

We have previously audited the consolidated balance sheet as of June 30, 2016, and the related consoli-

dated statements of activities and cash ﬂ ows for the year then ended (not presented herein), and in our

report dated October 27, 2016, we expressed an unmodiﬁ ed opinion on those consolidated ﬁ nancial

statements. In our opinion, the information set forth in the accompanying summarized ﬁ nancial in-

formation as of June 30, 2016 and for the year then ended is consistent, in all material respects, with

the audited consolidated ﬁ nancial statements from which it has been derived.

October 25, 2017

PricewaterhouseCoopers LLP, 1200 Bausch & Lomb Place, Rochester, NY 14604

9

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF JUNE 30, 2017 AND JUNE 30, 2016 (in thousands)

2017 2016

Assets

1 Cash and cash equivalents 181,265$ 182,096$

2 Accounts receivable, net (note 2-A) 392,435 404,061

3 Contributions receivable, net (note 2-B) 902,846 986,322

4 Prepaid expenses and other assets 136,032 140,377

5 Student loans receivable, net (note 2-C) 79,211 80,956

6 Investments (note 3) 7,124,578 6,587,175

7 Land, buildings, and equipment, net (note 4) 4,256,807 4,009,285

8 Funds held in trust by others (note 5) 110,917 124,960

9 Total assets 13,184,091$ 12,515,232$

Liabilities

10 Accounts payable and accrued expenses 637,597$ 713,414$

11 Deferred revenue and other liabilities 190,025 195,448

12 Obligations under split interest agreements (note 5) 133,459 135,444

13 Deferred benefits (note 6) 610,516 656,410

14 Funds held for others (note 7) 137,093 153,065

15 Obligations under capital leases (note 9) 67,842 4,359

16 Bonds and notes payable (note 8) 1,332,261 1,567,368

17 Government advances for student loans 50,679 50,730

18 Total liabilities 3,159,472 3,476,238

Net assets (note 11)

19 Unrestricted 3,120,525 2,698,090

20 Temporarily restricted 3,329,946 3,204,004

21 Permanently restricted 3,574,148 3,136,900

22 Total net assets 10,024,619 9,038,994

23 Total liabilities and net assets 13,184,091$ 12,515,232$

The accompanying notes are an integral part of the consolidated financial statements.

10

CONSOLIDATED STATEMENT OF ACTIVITIES FOR THE YEAR-ENDED JUNE 30, 2017 (in thousands)

(WITH SUMMARIZED INFORMATION FOR THE YEAR-ENDED JUNE 30, 2016)

Temporarily

Unrestricted Restricted

Operating revenues

1

Tuition and fees 1,044,627$ -$

2 Scholarship allowance (367,731) -

3

Net tuition and fees 676,896 -

4 State and federal appropriations 150,912 -

5 Grants, contracts and similar agreements

6 Direct 451,023 -

7 Indirect cost recoveries 146,037 -

8 Contributions 88,777 208,851

9

Investment return, distributed 213,667

142,237

10 Medical Physician Organization 1,050,433 -

11

Auxiliary enterprises 162,433

-

12 Educational activities and other sales and services 722,590 -

13 Net assets released from restrictions 356,928

(356,928)

14 Total operating revenues 4,019,696 (5,840)

Operating expenses (note 10)

15 Compensation and benefits 2,585,582 -

16 Purchased services 315,228 -

17 Supplies and general 655,409 -

18 Maintenance and facilities costs 132,302 -

19 Interest expense (note 8) 52,635 -

20 Depreciation 280,176 -

21 Total operating expenses 4,021,332 -

22 Change in net assets from operating activities (1,636) (5,840)

Nonoperating revenues and (expenses)

23

State appropriations for capital acquisitions

45,096 -

24

Grants, contracts and similar agreements for capital acquisitions

31,168 -

25

Contributions for capital acquisitions, trusts and endowments

10,258 69,391

26

Investment return, net of amount distributed

147,906 237,496

27

Change in value of split interest agreements

19,979 (16,111)

28 Pension and postretirement changes 64,213 -

29 Swap interest and change in value of interest rate swaps 55,560

-

30 Other (8,659) -

31 Net asset released for capital acquisitions and reclassifications 58,550

(158,994)

32 Change in net assets from nonoperating activities 424,071 131,782

33 Change in net assets 422,435 125,942

34 Net assets, beginning of the year 2,698,090 3,204,004

35

Net assets, end of the year 3,120,525$ 3,329,946$

The accompanying notes are an integral part of the consolidated financial statements.

11

Permanently 2017 2016

Restricted Total Total

-$ 1,044,627$ 998,942$

1

- (367,731) (352,179) 2

- 676,896 646,763 3

- 150,912 149,138 4

5

- 451,023 444,818 6

- 146,037 142,010 7

- 297,628 266,629 8

- 355,904 327,906

9

- 1,050,433 982,430 10

- 162,433

160,853

11

- 722,590 688,667

12

- - - 13

- 4,013,856 3,809,214

14

- 2,585,582 2,442,735 15

- 315,228 313,165 16

- 655,409 666,041 17

- 132,302 122,324 18

- 52,635 56,803 19

- 280,176 258,698 20

- 4,021,332 3,859,766 21

- (7,476) (50,552) 22

- 45,096 41,604 23

- 31,168 39,592

24

310,886 390,535 245,669 25

19,612 405,014 (467,085)

26

6,703 10,571 (4,236) 27

- 64,213 (131,152)

28

- 55,560 (119,020) 29

(397) (9,056) 2,763 30

100,444 -

-

31

437,248 993,101 (391,865) 32

437,248 985,625 (442,417) 33

3,136,900 9,038,994 9,481,411 34

3,574,148$ 10,024,619$ 9,038,994$

35

12

CONSOLIDATED STATEMENTS OF CASH FLOWS

2017 2016

1 985,625$ (442,417)$

2 Proceeds from contributions for capital acquisitions, trusts and endowments (464,383) (293,552)

3 Depreciation and amortization 271,339 253,481

4 Net realized and unrealized (gain)/loss on investments (672,248) 202,286

5 Pension and postretirement changes (64,213)

131,152

6 Change in value of interest rate swaps (81,451) 89,965

7 Bond call premium 18,973 -

8 Loss on disposals of land, building, and equipment 7,470 4,181

9 Other adjustments (10,825) (22,101)

Change in assets and liabilities

10 Accounts receivable, net 11,626 10,546

11 Contributions receivable, net 83,476

107,521

12 Prepaid expenses and other assets (4,703) (5,751)

13 Accounts payable and accrued expenses (1,700) 19,757

14 Deferred revenue and other liabilities (5,423) 4,489

15 Obligations under split interest agreements 12,058 (10,992)

16 Deferred benefits 18,319 (2,316)

17 Net cash provided/(used) by operating activities 103,940 46,249

18 Proceeds from the sale and maturities of investments 17,338,583 9,900,735

19 Purchase of investments (17,181,628) (9,723,130)

20 Acquisition of land, buildings, and equipment (net) (453,370) (450,016)

21 Student loans granted (12,655)

(17,273)

22 Student loans repaid 14,974 13,090

23 Change in funds held for others, net of unrealized (gain)/loss on investments (29,034) (28,102)

24 Net cash used by investing activities (323,130) (304,696)

Proceeds from contributions for capital acquisitions, trusts and endowments

25 Investment in endowments 395,753 207,687

26 Investment in physical plant 65,202

81,219

27 Investment subject to living trust agreements 3,428 4,646

28 Principal payments of bonds, notes payable and capital leases (279,731) (181,860)

29 Proceeds from issuance of bonds and notes payable 52,731 154,068

30 Bond call premium, bond premium and issuance costs (18,973) 27,292

31

Government advances for student loans (51) (2,262)

32 Net cash provided by financing activities 218,359 290,790

33 Net change in cash and cash equivalents (831)

32,343

34 Cash and cash equivalents, beginning of year 182,096 149,753

35 Cash and cash equivalents, end of year 181,265

$

182,096$

36 Cash paid for interest 61,497$ 61,725$

37 Increase/(decrease) in construction payables, non-cash activity 7,334$ 9,895$

38 Assets acquired under capital leases 64,267$ 1,561$

39 Gifts-in-kind 10,250$

16,562

$

Cash flows from financing activities

Supplemental disclosure of cash flow information

The accompanying notes are an integral part of the consolidated financial statements.

FOR THE YEARS-ENDED JUNE 30, 2017 AND JUNE 30, 2016 (in thousands)

Cash flows from operating activities

Change in net assets

Adjustments to reconcile change in net assets

to net cash provided/(used) by operating activities

Cash flows from investing activities

13

NOTES TO THE

CONSOLIDATED

FINANCIAL

STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

A. Description of the Organization

Founded in 1865, Cornell University (“the University”) is dedicated to a mission of learning, discovery, and

engagement. Cornell is a private university, the federal land-grant institution of New York State, and a member

of the Ivy League. Cornell administers four contract colleges, which are also units of the State University of New

York. Described as the ﬁ rst truly American university because of its founders’ revolutionary egalitarian and

practical vision of higher education, the University is dedicated to its land-grant mission of outreach and public

engagement. Cornell’s community includes almost 23,400 students, nearly 4,000 faculty, and approximately

278,000 alumni who live and work across the globe.

The University comprises colleges and schools in Ithaca, New York (seven undergraduate units and four graduate

and professional units), New York City (two medical graduate and professional units, together with its physician

organization referred to collectively as “Weill Cornell Medicine”), and Doha, Qatar (the “Weill Cornell Medical

College in Qatar”). Also in New York City, the Cornell Tech campus offers graduate programs in applied sciences,

including two programs offered jointly with the Technion - Israel Institute of Technology under the auspices of

the Joan and Irwin Jacobs Technion-Cornell Institute (“Jacobs Institute”).

The University is subject to the common administrative authority and control of the Cornell University Board of

Trustees. The University is prohibited from using funds attributable to the contract colleges (i.e., those colleges

operated by the University on behalf of New York State) for other units of the University. Except as speciﬁ cally

required by law, the contract and endowed colleges at Ithaca, Cornell Tech in New York City, and Weill Cornell

Medicine (“WCM”) are, to the extent practicable, governed by common management principles and policies

determined at the private discretion of the University. In addition to the activities of the endowed and contract

colleges, the University’s subsidiaries and certain afﬁ liated organizations are included in the consolidated ﬁ -

nancial statements. All signiﬁ cant intercompany transactions and balances are eliminated in the accompanying

consolidated ﬁ nancial statements.

B. Basis of Presentation

The accompanying consolidated ﬁ nancial statements are prepared in accordance with U.S. generally accepted

accounting principles (“GAAP”). Net assets, revenues, gains, and losses are categorized based on the existence

or absence of donor-imposed restrictions.

The University’s Board of Trustees, with consideration to the actions, reports, information, advice, and counsel

provided by its duly constituted committees and appointed ofﬁ cers of the University, including University Counsel,

has instructed the University to preserve the historical dollar value of donor-restricted (true) endowment funds,

absent explicit donor direction to the contrary. As a result, the University classiﬁ es as permanently restricted net

assets the original gift value of true endowments, plus any subsequent gifts and accumulations made in accordance

with the directions of the applicable gift instruments. In accordance with accounting standards, the portion of

the true endowment fund not classiﬁ ed as permanently restricted net assets is classiﬁ ed as temporarily restricted

net assets except when the fair value of the endowment fund is less than its historical dollar value. For these “un-

derwater” funds, the difference between historic dollar value and fair value is reﬂ ected in unrestricted net assets.

Temporarily restricted net assets also include gifts and appropriations from the endowment that can be expended,

but for which the donors’ purpose restrictions have not yet been met, as well as net assets with explicit or implied

time restrictions, such as pledges and split interest agreements. Expiration of donor restrictions is reported in

the consolidated statement of activities as a reclassiﬁ cation from temporarily restricted net assets to unrestricted

net assets on the net assets released from restriction lines.

Unrestricted net assets are the remaining net assets of the University.

14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

C. Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and in bank accounts, money market funds, and other temporary in-

vestments held for working capital purposes with an original maturity term of ninety days or less. The carrying amount

of cash equivalents approximates fair value because of their short terms of maturity. Cash that is part of the University’s

investment portfolio is reported as investments and included in Note 3.

D. Contributions

Contributions, including unconditional promises to give (pledges), are recognized as revenues in the appropriate categories

of net assets in the periods received. A pledge is recorded at the present value of estimated future cash ﬂ ows, based on an

appropriate discount rate determined by management at the time of the contribution. Amortization of this discount in

subsequent years is included in contribution revenue. A contribution of assets other than cash is recorded at its estimated

fair value on the date of the contribution. Contributions for capital projects, endowments, and similar funds are reported

as non-operating revenues. Conditional promises to donate to the University are not recognized until the conditions are

substantially met.

Temporarily restricted net assets include contributions to the University and to the Cornell University Foundation (the

Foundation), an afﬁ liated entity that is included in the consolidated ﬁ nancial statements. The Foundation maintains a

donor-advised fund for which the donors can make recommendations to the fund’s trustees regarding distributions to the

University or other charitable organizations. Distributions from the Foundation to external charitable organizations are

recorded as non-operating expenses.

E. Investments

The University values certain ﬁ nancial and non-ﬁ nancial assets and liabilities, on a recurring basis, in accordance with a

hierarchy that categorizes and prioritizes the sources used to measure and disclose fair value. Fair value is deﬁ ned as the

price associated with an orderly transaction between market participants at the measurement date. This fair-value hier-

archy is broken down into three levels based on inputs that market participants would use in valuing the ﬁ nancial instru-

ments, which is based on market data obtained from sources independent of the University. The hierarchy of inputs used

to measure fair value, and the primary valuation methodologies used by the University for assets and liabilities measured

at fair value, are disclosed below.

Investment income is recorded on an accrual basis, and purchases and sales of investment securities are reﬂ ected on a

trade-date basis. Realized gains and losses are calculated using average cost for securities sold.

Investment return included in operating revenues consists of amounts appropriated by the Board of Trustees from the

pooled endowment, as well as income and realized gains and losses on investments from working capital and non-pooled

endowments and similar funds. Unrealized gains and losses on investments, any difference between total return and

amounts appropriated from the pooled endowment, and income and realized gains reinvested per donor restrictions are

reported as non-operating activities.

F. Fair-Value Hierarchy

The University values certain ﬁ nancial and non-ﬁ nancial assets and liabilities, on a recurring basis, in accordance with a

hierarchy that categorizes and prioritizes the sources used to measure and disclose fair value. Fair value is deﬁ ned as the

price associated with an orderly transaction between market participants at the measurement date. This fair-value hier-

archy is broken down into three levels based on inputs that market participants would use in valuing the ﬁ nancial instru-

ments, which is based on market data obtained from sources independent of the University. The hierarchy of inputs used

to measure fair value, and the primary valuation methodologies used by the University for assets and liabilities measured

at fair value, are disclosed below.

The fair value of Level 1 securities is based upon quoted prices in accessible active markets for identical assets. Market price

data is generally obtained from exchange or dealer markets. The University does not adjust the quoted price for such assets.

The fair value of Level 2 securities is based upon quoted prices for similar instruments in active markets, quoted prices for

identical or similar instruments in markets that are not active, and model-based valuation techniques for which all signiﬁ -

cant assumptions are observable in the market or can be corroborated by observable market data. Inputs are obtained from

various sources, including market participants, dealers, and brokers. In determining fair value of ﬁ nancial instruments,

the University considers factors such as interest-rate yield curves, duration of the instrument, and counterparty credit

15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

risk. The fair value of Level 2 securities is determined using multiple valuation techniques including the market approach,

income approach, or cost approach.

The fair value of Level 3 securities is based upon valuation techniques that use signiﬁ cant unobservable inputs.

Inputs used in applying the various valuation techniques refer to the assumptions that are used to make valuation deci-

sions. Inputs may include price information, credit data, liquidity statistics, and other factors. A ﬁ nancial instrument’s level

within the fair-value hierarchy is based on the lowest level of any input that is signiﬁ cant to the fair-value measurement. The

University considers observable data to be market data that is readily available and reliable and provided by independent

sources. The categorization of a ﬁ nancial instrument within the fair-value hierarchy is, therefore, based upon the pricing

transparency of the instrument, and does not correspond to the University’s perceived risk of that instrument.

G. Derivative Instruments

The University has approved the use of derivatives by outside investment managers, based on investment guidelines ne-

gotiated at the time of a manager’s appointment. The derivatives are used to adjust ﬁ xed income durations and rates, to

create “synthetic exposures” to certain types of investments, and to hedge foreign currency ﬂ uctuations. The University

records the fair value of a derivative instrument within the applicable portfolio. The change in the fair value of a derivative

instrument held for investment is included in non-operating investment return in the consolidated statement of activities.

In addition, the University holds other derivatives to manage its current and/or future long-term debt. These instruments

are recorded at fair value as either prepaid or accrued expenses in the consolidated statement of ﬁ nancial position, and

the swap interest and change in fair value is recorded as non-operating activity in the consolidated statement of activities.

Derivatives involve counterparty credit exposure. To minimize this exposure, the University manages counterparty risk

by limiting swap exposure for each counterparty and monitoring the ﬁ nancial health of swap counterparties, and has

structured swap documents to limit maximum loss in the event of counterparty default.

H. Land, Buildings, and Equipment

Land, buildings, and equipment are stated in the consolidated statement of ﬁ nancial position at cost on the date of ac-

quisition or at fair value on the date of donation, net of accumulated depreciation. Depreciation is computed using the

straight-line method over the estimated useful life of the asset, and is reﬂ ected as an operating expense. Expenditures as-

sociated with the construction of new facilities are recorded as construction in progress until the projects are completed.

The University’s collections of art, rare books, and other property have been acquired through purchases and contributions

since the University’s inception. They are recognized as capital assets and are reﬂ ected, net of accumulated depreciation,

in the consolidated statement of ﬁ nancial position. A collection received as a gift is recorded at fair value as an increase in

net assets in the year in which it is received.

I. Split Interest Agreements

The University’s split interest agreements with donors consist primarily of charitable gift annuities, pooled income funds,

and charitable trusts for which the University serves as trustee. Assets held in trust are either separately invested or included

in the University’s investment pools in accordance with the agreements. Contributions of split interest agreements, net of

related liabilities, increase temporarily restricted net assets or permanently restricted net assets. Liabilities associated with

charitable gift annuities and charitable trusts represent the present value of the expected payments to the beneﬁ ciaries based

on the terms of the agreements. Pooled income funds are recognized at the net present value of the net assets expected at

a future date. Gains or losses resulting from changes in fair value, changes in assumptions, and amortization of discount

are recorded as changes in value of split interest agreements in the appropriate restriction categories in the non-operating

section of the consolidated statement of activities.

J. Funds Held in Trust by Others

Funds held in trust by others represent resources that are not in the possession or under the control of the University. These

funds are administered by outside trustees, with the University receiving income or residual interest. Funds held in trust

by others are recognized at the estimated fair value of assets or the present value of future cash ﬂ ows due to the University

when the irrevocable trust is established or the University is notiﬁ ed of its existence. Gains or losses resulting from changes

in fair value are recorded as non-operating activities in the consolidated statement of activities.

16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

K. Endowments

The responsibility for accepting, preserving, and managing those funds entrusted to the University rests, by law, with the

Board of Trustees; however, the Trustees have delegated authority for investment decisions to the Investment Committee

of the Board of Trustees. The Investment Committee determines investment policy, objectives, and guidelines, including

allocation of assets between classes of investments.

The University’s investment objective for its endowment assets is to maximize total return within reasonable risk param-

eters, speciﬁ cally to achieve a total return, net of expenses, of at least ﬁ ve percent in excess of inﬂ ation, as measured by

the Consumer Price Index over rolling ﬁ ve-year periods. The achievement of favorable investment returns enables the

University to distribute over time increasing amounts from the endowment so that present and future needs can be treated

equitably in inﬂ ation-adjusted terms. Diversiﬁ cation is a key component of the University’s standard for managing and

investing endowment funds, and asset allocation targets are subject to ongoing reviews by the Investment Committee of

the Board of Trustees.

The University applies the “prudent person” standard when deciding whether to appropriate or accumulate endowment

funds, and considers the following factors: the duration and preservation of the endowment fund, the purposes of the

institution and the endowment fund, the general economic conditions including the potential effect of inﬂ ation or deﬂ a-

tion, the expected total return of the fund, other resources of the University, the needs of the University and the fund to

make distributions and preserve capital, and the University’s investment policy.

The Board authorizes an annual distribution from endowment funds that is within a target range of 4.4 percent to 5.9

percent of a 12-quarter rolling average of the unit fair value. The Trustees may occasionally make step adjustments, either

incremental or decremental, based on prior investment performance, current market conditions, and/or any of the factors

for prudent judgment described above. Total distributions, or spending, are presented as investment return, distributed,

on the consolidated statement of activities, and includes endowment payout and an administrative fee that supports the

investment and stewardship costs of the University endowment.

The New York Prudent Management of Institutional Funds Act (“NYPMIFA”) established a requirement related to appro-

priations from endowments for which the fair value falls below the historic dollar value (“underwater”). The University,

in compliance with NYPMIFA, notiﬁ ed available donors who had established endowments prior to September 17, 2010

of the new law, and offered these donors the option of requiring the University to maintain historical dollar value for their

endowment funds. A minority of donors requested this option; for those who did, the University has designed procedures

to ensure that the University maintains historical dollar value by not expending the payout on any underwater fund.

L. Sponsored Agreements

Revenues under grants, contracts, and similar agreements are recognized at the time expenditures are incurred. These

revenues include the recovery of facilities and administrative costs, which are recognized according to negotiated prede-

termined rates. Amounts received in advance and in excess of incurred expenditures are recorded as deferred revenues.

M. Medical Physician Organization

The Medical Physician Organization (“MPO”) provides the management structure for the practice of medicine at the WCM

academic medical center and the Physician Organization Network. In addition to conducting instructional and research

activities, physician members generate clinical practice income from their professional services to patients. MPO revenue

represents patient care and management service agreement fees. Expenses of the clinical practice, including physician

compensation, administrative operations, and provision for uncollectible accounts, are reﬂ ected as University expenses.

N. Use of Estimates

The preparation of ﬁ nancial statements in conformity with U.S. GAAP requires management to make estimates and

assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses during the reporting period.

Management’s assumptions are primarily related to the appropriate discount rate for the purposes of fair-value calcula-

tions, to allowances for doubtful accounts and contractual allowances, and to self-insured risks. Actual results may differ

from those estimates.

17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

O. Comparative Financial Information

The consolidated statement of activities includes prior-year information in summary form rather than by restriction class.

Such information does not include sufﬁ cient detail to constitute a presentation of prior-year data in conformity with U.S.

GAAP. Accordingly, such information should be read in conjunction with the University’s consolidated ﬁ nancial statements

for the prior ﬁ scal year from which the summarized information was derived.

P. Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-03–Imputation of Interest (Subtopic

835-30): Simplifying the Presentation of Debt Issuance Costs, to reduce the cost and complexity in presentation of debt

issuance cost by aligning its presentation with the debt discount or premium. This update requires all costs incurred to

issue debt to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability.

The effective date of this change for the University was the ﬁ scal year ended June 30, 2017. Implementation of this stan-

dard update resulted in the reclassiﬁ cation of $7.5 million and $10.7 million from the prepaid expenses and other assets

line to the bonds and notes payable line for the ﬁ scal years ended June 30, 2017 and 2016, respectively. The unamortized

issuance costs have been added to the unamortized premium and issuance costs line in the Summary of Bonds and Notes

Payable table in Note 8.

In April 2015, the FASB also issued ASU 2015-05–Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-

40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which provides guidance to help entities

evaluate whether a cloud computing arrangement includes a software license. If there is contractual right to take possession

of software at any time during its hosting period without signiﬁ cant penalty, and it is feasible to either run the software on

the University’s hardware or contract with another party unrelated to the vendor to host the software, then the contract

(or portion thereof) is accounted for as an acquisition of software. Otherwise, the contract is accounted for as a service

contract (i.e., expensed). The effective date of this change for the University was the ﬁ scal year ended June 30, 2017. The

University performed an analysis of its cloud computing arrangements and determined that no contracts met the criteria

as software acquisition under this new standard.

In March 2017, the FASB issued ASU 2017-07—Compensation—Retirement Beneﬁ ts (Topic 715): Improving the Presenta-

tion of Net Periodic Pension Cost and Net Periodic Postretirement Beneﬁ t Cost. Currently, net periodic costs are recorded

as operating expenses and are comprised of: service costs, interest costs, expected return on assets, and amortized net loss/

(gain). This accounting standard allows only the service costs to be presented as operating expenses; the other elements

of the net periodic costs must be considered non-operating. The effective date of this change is the ﬁ scal year ending June

30, 2019; however, the University has elected to adopt this standard for the ﬁ scal year ended June 30, 2017. The impact of

this presentation change is a reclassiﬁ cation of $17.6 million and $7.8 million, from operating to non-operating expense,

for the years ended June 30, 2017 and 2016, respectively. The pension and postretirement changes line on the consolidated

statement of activities includes both the change in funded status and the other components of net periodic costs. These

two amounts are separately disclosed in the Summary of Obligations and Funded Status table in Note 6C.

In May 2014, the FASB issued ASU 2014-09–Revenue from Contracts with Customers (Topic 606) at the conclusion of a

joint effort with the International Accounting Standards Board to create common revenue recognition guidance for U.S.

GAAP and international accounting standards. This framework ensures that entities appropriately reﬂ ect the consideration

to which they expect to be entitled in exchange for goods and services, by allocating transaction price to identiﬁ ed per-

formance obligations, and recognizing that revenue as performance obligations are satisﬁ ed. Qualitative and quantitative

disclosures will be required to enable users of ﬁ nancial statements to understand the nature, amount, timing, and uncertainty

of revenue and cash ﬂ ows arising from contracts with customers. In August of 2015, FASB issued ASU 2015-14–Revenue

from Contracts with Customers (Topic 606): Deferral of the Effective Date, which makes ASU 2014-09 effective for the

ﬁ scal year ending June 30, 2019. The University is planning for the implementation of this new standard.

In February 2016, the FASB issued ASU 2016-02–Leases (Topic 842) which provides accounting guidance for leases from

both the lessor’s and lessee’s perspective. The main difference between previous GAAP and Topic 842 is the recognition of

lease assets and lease liabilities by lessees for those leases classiﬁ ed as operating leases; however, the University will evaluate

other impacts of the new guidance. The new standard will be effective in the ﬁ scal year ending June 30, 2020. The University

has begun its planning for implementation of this new standard.

In August 2016, the FASB issued ASU 2016-14–Not-for-Proﬁ t Entities (Topic 958): Presentation of Financial Statements

for Not-for-Proﬁ t Entities to improve the information presented in ﬁ nancial statements and notes about a not-for-proﬁ t

entity’s liquidity, ﬁ nancial performance, and cash ﬂ ows. The signiﬁ cant changes under the new guidance include the

reduction of net asset classiﬁ cations to two categories based on the existence or absence of donor restrictions, and addi-

18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

tional disclosure requirements related to board designation of net assets, and related to the liquidity and availability of the

entity’s ﬁ nancial assets. ASU 2016-14 is effective for the ﬁ scal year ending June 30, 2019. The University is planning for the

implementation of this new standard.

Q. Reclassiﬁ cations

The University reclassiﬁ ed certain lines in the consolidated statement of ﬁ nancial position to conform to the current year

presentation. These changes impacted the prepaid expenses and other assets, deferred revenue and other liabilities, and

bonds and notes payable lines. In addition, changes impacting the consolidated statement of activities were made on the

compensation and beneﬁ ts and the pension and postretirement changes lines due to the early adoption of ASU 2017-07,

and certain prior year expenses within the purchased services and supplies and general lines to conform to the current

year presentation. Also, the impact of net settlements of the interest rate swaps was reclassiﬁ ed from interest expense to

the swap interest and change in value of interest rate swaps line. Finally, revenue from WCM’s agreement with New York-

Presbyterian Hospital was reclassiﬁ ed from MPO revenue to the educational activities and other sales and services line.

R. Income Taxes

The University is a not-for-proﬁ t organization as described in Section 501(c)(3) of the Internal Revenue Code and is gen-

erally exempt from income taxes on related income pursuant to the appropriate sections of the Internal Revenue Code. In

accordance with the accounting standards, the University evaluates its income tax position each ﬁ scal year to determine

whether the position is more likely than not to be sustained if examined by the applicable taxing authority. This review

had no material impact on the University’s consolidated ﬁ nancial statements.

2. RECEIVABLES

A. Accounts Receivable

The University’s receivables from the sources identiﬁ ed in the table below are reviewed and monitored for aging and

other factors that affect collectability.

Accounts receivable from the following sources were outstanding as of June 30:

The patient accounts receivable for medical services was comprised of the following at June 30, 2017 and 2016, respectively:

commercial third parties 67.3 percent and 64.4 percent; federal/state government 16.7 percent and 15.3 percent; and patients

16.0 percent and 20.2 percent. Note 12 provides additional information related to the reinsurance receivable.

Other accounts receivable include receivables from other government agencies, matured bequests, and receivables from

other operating activities.

B. Contributions Receivable

Unconditional promises to give, or pledges, are recorded in the consolidated ﬁ nancial statements at present value using

discount rates ranging from 1.0 percent to 7.0 percent. The methodology for estimating uncollectible amounts is based on

an analysis of the historical collectability of contributions receivable. Contributions are expected to be realized as follows:

2017 2016

Grants and contracts 95,361$ 85,386$

New York Presbyterian Hospital and other affiliates 40,484 44,603

Patients (net of contractual allowances) 118,608 131,669

Reinsurance receivable 103,726 102,891

Student accounts 13,659 16,095

Other 60,339 59,329

Gross accounts receivable 432,177$ 439,973$

Less: allowance for doubtful accounts (39,742) (35,912)

Net accounts receivable 392,435

$ 404,061$

SUMMARY OF ACCOUNTS RECEIVABLE

19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

Contributions receivable as of June 30 are intended for the following purposes:

At June 30, 2017, conditional promises not reﬂ ected in the consolidated ﬁ nancial statements, which consist primarily of

bequest intentions and conditional promises with signiﬁ cant requirements, were $460,329.

C. Student Loans Receivable

In keeping with Ezra Cornell’s vision, the University has a “need-blind” policy of admission. Many students receive ﬁ nancial

aid that consists of scholarship/fellowship grants, work-study opportunities and, when appropriate, student loans.

Student loan programs are funded by donor contributions, other institutional sources, and governmental programs,

primarily the Federal Perkins Loan Program. The amounts received from the federal government’s portion of the Perkins

program are ultimately refundable to the federal government and are reported as a liability on the University’s consolidated

statement of ﬁ nancial position as government advances for student loans.

Credit worthiness is not a factor when granting a student a loan from institutional or federal resources; the loan is based

on ﬁ nancial need. However, once the loan is in repayment status, the University monitors, no less than quarterly, the ag-

ing of the student loans receivable. If a loan is 75 days past due, the University generally will not release a transcript and/

or diploma. If the loan is 180 days past due, the University evaluates whether to assign the account to an external agency

for collection.

The Cornell University Bursar authorizes any write-off of a student loan receivable; such write-offs are based primarily

on the aging report and an evaluation of any recent activity in the account. Overall default rates and general economic

conditions are evaluated at least annually. The University, because of its close and continuing relationship with its students

and graduates, seeks to work closely with the students to help ensure repayment. At June 30, 2017, the average default rate

approximated 9.1 percent, with a rate of approximately 2.2 percent on the federal revolving loan portfolio. Student loans

are considered to be in default status when over 150 days past due. The average rate includes both the federal loans and

the institutional loans.

Student loans are often subject to unique restrictions and conditions and, therefore, it is not practical to determine their

fair values. The allowance for doubtful accounts is for all loans, whether in repayment status or not.

The two tables below provide additional information about the student loan receivables and the allowances associated with

federal and institutional loan programs.

2017 2016

Less than one year 372,009$ 366,885$

Between one and five years 413,276 561,661

More than five years 242,001 155,652

Gross contributions receivable 1,027,286$ 1,084,198$

Less: unamortized discount (96,517) (67,371)

Less: allowance for uncollectible amounts (27,923) (30,505)

Net contributions receivable 902,846$ 986,322$

SUMMARY OF CONTRIBUTIONS RECEIVABLE

2017 2016

Program support 469,049$ 521,273$

Capital purposes 184,457 289,949

Long-term support 249,340 175,100

Net contributions receivable 902,846$ 986,322$

EXPECTED PURPOSE OF CONTRIBUTIONS RECEIVABLE

20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

3. INVESTMENTS

A. General Information

The University’s investments are overseen by the Investment Committee of the Board of Trustees. The University’s invest-

ment strategy incorporates a diversiﬁ ed asset allocation approach and maintains, within deﬁned limits, exposure to the

movements of the world equity, ﬁxed income, commodities, real estate, and private equity markets. Based on guidelines

established by the Investment Committee, the University’s Investment Ofﬁce directs the investment of endowment and

trust assets, certain working capital, and temporarily invested expendable funds.

The University maintains a number of investment pools or categories for speciﬁ c purposes as follows:

Total earnings on the University’s investment portfolio for the ﬁ scal years ended June 30 is presented in the following

table:

B. Fair Value

The University’s investment holdings as of June 30, categorized in accordance with the fair-value hierarchy, are summarized

in the following table:

2016

Federal

revolving

Institutional Total allowance Total allowance

Allowance at beginning of year (2,360)$ (2,501)$ (4,861)$ (4,647)$

Current year provisions 964 (138) 826 34

Current year write-offs - (252) (252) (248)

Allowance at end of year (1,396)$ (2,891)$ (4,287)$ (4,861)$

CHANGE IN STUDENT LOAN ALLOWANCE

2017

2017 2016

Long-term investments (LTI)

Long-term investment pool (LTIP) 6,363,271$ 5,629,008$

Other LTI 394,477 343,333

Total LTI 6,757,748$ 5,972,341$

Intermediate-term 62 277,263

Separately invested and other assets 366,768 337,571

Total investments 7,124,578$ 6,587,175$

INVESTMENT POOLS/CATEGORIES AT FAIR VALUE

2017 2016

Interest and dividends, net of investment fees 75,608$ 77,473$

Net realized gain/(loss) 324,262 210,733

Net unrealized gain/(loss) 361,048 (427,385)

Total investment return 760,918$ (139,179)$

SUMMARY OF INVESTMENT RETURN

SUMMARY OF STUDENT LOANS RECEIVABLE

2016

Receivable Allowance Net receivable Net receivable

Federal revolving loans 49,365$

(1,396)$ 47,969$ 51,714$

Institutional loans 34,133 (2,891) 31,242 29,242

Total student loans receivable 83,498$ (4,287)$ 79,211$ 80,956$

2017

21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

Level 1 investments consist of cash and cash equivalents, equity, and ﬁ xed-income securities with observable market prices.

Fair value is readily determinable based on quoted prices in active markets. Unsettled trade receivable and payable valua-

tions are reﬂ ective of cash settlements subsequent to the ﬁ scal year-end and are also categorized as Level 1. The University

does not adjust the quoted price for such instruments, even in situations where the University holds a large position and

a sale of all its holdings could reasonably impact the quoted price.

Investments that are classiﬁ ed as Level 2 include domestic and foreign equities, as well as ﬁ xed income securities that trade

in markets that are not considered to be active. Fair value is based on observable inputs for similar instruments in the mar-

ket, and obtained by various sources including market participants, dealers, and brokers; the University’s custodian secures

pricing for these assets. The fair value of derivative investments is based on market prices from the ﬁ nancial institution

that is the counterparty to the derivative.

Level 3 investments have signiﬁ cant unobservable inputs, as they trade infrequently or not at all. The inputs into the deter-

mination of fair value are based upon the best information in the circumstance and may require signiﬁ cant management

judgment. Investments included in Level 3 consist primarily of the University’s ownership in real estate, oil and mineral

rights, limited partnerships, and equity positions in private companies.

C. Investments Using Net Asset Value

The net asset value (“NAV”) column above represents the University’s ownership interest in certain alternative investments.

As a practical expedient, the University uses its ownership interest in the NAV to determine the fair value of all alternative

investments that do not have a readily determinable fair value, and have ﬁ nancial statements consistent with the measure-

ment principles of an investment company or have the attributes of an investment company. The NAV of these invest-

ments is determined by the general partner and is based upon appraisal or other estimates that require varying degrees of

judgment. If no public market exists for the investment securities, the general partner will take into consideration, among

other things, the cost of the securities, prices of recent signiﬁcant placements of securities of the same issuer, and subse-

quent developments concerning the companies to which the securities relate. The University has performed signiﬁcant due

diligence around these investments to ensure that NAV is an appropriate measure of fair value as of June 30.

Securities not included in investment portfolio

Cash and cash equivalents 69,963$ -$ -$ -$ 69,963$ 84,714$

Level 1

fair value

Level 2

fair value

Level 3

fair value

Net

asset value

2017

Total

2016

Total

Cash and cash equivalents 332,132$ 16,566$ -$

-$ 348,698

$ 323,766$

Derivatives (342) (1,918) - - (2,260) (3,527)

Equity

Domestic equity 419,412 61,390 1,656 207,434 689,892 646,613

Foreign equity 697,320 33,534 6,744 506,785 1,244,383 886,137

Hedged equity - - 4,945 430,809 435,754 629,455

Private equity - - 47,822 1,332,736 1,380,558 1,173,988

Fixed income

Asset backed fixed income - 26,646 929 - 27,575 29,604

Corporate bonds - 213,805 2,888 - 216,693 446,485

Equity partnership -

74 -

459,107

459,181

478,517

International 15,585

76,629

- -

92,214

110,355

Municipals - 11,005 - -

11,005

12,998

Mutual funds (non-equity) - 19,921 - -

19,921

22,603

Preferred/convertible - 15,103 5,014 - 20,117 28,929

Other fixed income - 105 - - 105 5,737

US government 42,897 87,886 - - 130,783 156,155

Marketable alternatives - 152 - 878,830 878,982 722,079

Real assets - 1,350 23,953 1,160,483 1,185,786 936,496

Receivable for investments sold 19,842 - - - 19,842 39,336

Payable for investments purchased (58,727) - - - (58,727) (83,011)

Other - - 24,076 - 24,076 24,460

Total investments 1,468,119$ 562,248$ 118,027$ 4,976,184$ 7,124,578$ 6,587,175$

INVESTMENTS AT FAIR VALUE

22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

The following tables provide additional information about alternative investments measured at NAV:

Asset class Strategy NAV in funds Remaining life

Unfunded

commitments

Timing to draw

commitments

Buyout $ 337,326 $ 329,677

Growth 327,515 204,258

Venture capital 667,895 162,660

Total private equity $ 1,332,736

1 to 10 years

$ 696,595

1 to 10 years

Real estate 574,092 308,893

Natural resource 586,391 282,761

Total real assets $ 1,160,483

1 to 10 years

$ 591,654

1 to 10 years

Distressed 214,158 76,194

Leveraged loans 48,215 6,250

Mezzanine 96,757 132,593

Multi-strategy 99,977 93,167

Total fixed income $ 459,107

1 to 10 years

$ 308,204

1 to 10 years

Emerging markets 123,757

Global equity 163,420

Foreign index 219,608

Total foreign equity $ 506,785

Global equity long/short 250,006

U.S. equity long/short 180,803

Total hedged equity $ 430,809

Marketable Event driven 153,223

alternatives Global macro 725,607

Total marketable

alternatives

$ 878,830

Domestic equity

Indexed

207,434

Total domestic equity $ 207,434

Total for alternative investments using NAV

$ 4,976,184 $ 1,596,453

Hedged equity

SUMMARY OF ALTERNATIVE INVESTMENTS MEASURED USING NET ASSET VALUE

Private equity

Real assets

Fixed income

Foreign equity

23

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

D. Level 3 Investments

The table below presents a summary of Level 3 investment activity. All net realized and unrealized gains/(losses) in the

table are reﬂ ected in the accompanying consolidated statement of activities. Net unrealized gains/(losses) relate to those

ﬁ nancial instruments held by the University at June 30, 2017. There were no signiﬁ cant transfers into or out of Level 3

during the ﬁ scal year ended June 30, 2017.

Level 3 equities not priced by qualiﬁ ed third parties (e.g., brokers, pricing services, etc.) are valued using discounted cash

ﬂ ow, taking into account various factors including nonperformance risk, counterparty risk, and marketability. Investment

value is also derived using a market approach through comparison to recent and relevant market multiples of comparable

companies. Start-up assets, held by the University’s student-run venture fund or other similar programs, are maintained

at or near initial investment amounts due to the nature of the activity.

Fair value at

June 30,

2016

Realized

gain/(loss)

Unrealized

gain/(loss)

Purchases Sales

Transfers

in/(out) of

Level 3

Fair value at

June 30,

2017

Equity

Domestic equity 3,416$ -$ (1,664)$ -$ (96)$ -$ 1,656$

Foreign equity 17,857 (1,495) 2,337 2,485 (14,440) - 6,744

Hedged equity 1,949 (6) (256) 3,448 (190) - 4,945

Private equity 42,058 - 5,418 500 (154) - 47,822

Fixed income

Asset backed fixed income 1,006 - - - (77) - 929

Corporate bonds 127 5 (239) 3,209 (214) - 2,888

Preferred/convertible 4,959 - 55 - - - 5,014

Real assets 27,383 (172) (1,648) 397 (2,007) - 23,953

Other 24,460 297 (3,080) 2,399 - - 24,076

Total level 3 investments 123,215$ (1,371)$ 923$ 12,438$ (17,178)$ -$ 118,027$

SUMMARY OF LEVEL 3 INVESTMENT ACTIVITY

Asset class Redemption terms Redemption restrictions*

Private equity n/a** n/a

Real assets n/a** n/a

Fixed income Rolling 2 year redemptions with 90 days notice***

50% of each new contribution has 2 year

lock up and 50% has 3 year lock up

Foreign equity

Ranges between thrice-monthly redemption with 2 days notice, to rolling 3

year redemption with 90 days notice

No lock up provisions

Hedged equity

Ranges between quarterly redemption with 30 days notice, to 25% per

year redemption with 90 days notice

No lock up provisions

Marketable

alternatives

Ranges between quarterly redemption with 65 days notice, to 33%

redemption per year with 60 days notice

14.38% has remaining lock up for 12

months

Domestic equity Daily redemption with 2 day notice No lock up provisions

* Represents initial investment lock up restriction. No other material redemption restrictions, such as redemption gates, were in place at year end.

** These funds are in private equity structure, with no ability to be redeemed.

*** 88.04% of NAV is in private equity structure, with no ability to be redeemed. Redemption provisions for the remaining 11.96% are shown above.

REDEMPTION INFORMATION FOR ALTERNATIVE INVESTMENTS MEASURED USING NET ASSET VALUE

24

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

Level 3 asset-backed ﬁ xed income investments are valued using discounted cash ﬂ ows. Preferred/convertible ﬁ xed income

investments are valued using discounted cash ﬂ ows or a market approach using a dividend multiplier. Investments in start-

up companies, as described above, are valued at or near initial investment amounts.

Level 3 real assets represent directly owned real estate, and oil or mineral rights. To the extent feasible, third party apprais-

als are used to value real estate directly owned by the University. If current appraisals are not available, fair value is based

on the capitalization rate valuation model or discounted cash ﬂ ow, corroborated by local market data, if available. Oil and

mineral rights are valued based on industry standard revenue multiplier methodologies or discounted cash ﬂ ow.

The following table provides additional information related to the valuation of the investments classiﬁ ed by the University

as Level 3.

The methods described above may produce a fair-value calculation that is not indicative of net realizable value or reﬂective

of future fair values. Furthermore, while the University believes its valuation methods are appropriate and consistent with

other market participants, the use of different methodologies or assumptions to determine the fair value of certain ﬁnancial

instruments could result in a different estimate of fair value at the reporting date.

Level 3

fair value

Valuation technique(s) Unobservable input

Range (weighted

average)

Equity

Domestic equity $ 1,656 Start-up valuation

Foreign equity 6,744 Third-party pricing

Hedged equity 4,945 Third-party pricing

Private equity

18,016

Discounted cash flow/market

comparable

Discount rate

4.4% - 12.1% (5.2%)

Discount for lack of marketability

15% - 20% (19.5%)

Earnings multiple 7.4x

Revenue multiple 1.7x

3,745 Start-up valuation

26,061 Third-party pricing

Fixed income

Asset backed fixed 929 Discounted cash flow

Discount rate 2.6% - 3.7% (3.4%)

Corporate bonds 2,888 Third-party pricing

Preferred/convertible 5,014 Market comparable

Dividend multiple 17.0x - 21.2x (20.4x)

Real assets

12,720 Cap rate valuation model

Capitalization rate 4.5% - 6.9% (5.3%)

3,020 Discounted cash flow

Discount rate 15%

Years to maturity 12

1,176 Sales comparison approach

Recent transactions

4,700 Start-up valuation

2,337 Third-party pricing

Other

8,252 Discounted cash flow

Discount rate 2.1% - 5.3% (2.6%)

Years to maturity 5 - 14 (8)

1,170 Start-up valuation

14,654 Third-party pricing

Total Level 3 investments

$ 118,027

QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENT

25

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

E. Derivative Holdings

The use of certain ﬁ nancial derivative instruments is governed by either the University’s written investment policy, speciﬁ c

manager guidelines, or partnership/fund agreement documents. Speciﬁ cally, ﬁ nancial derivative instruments may be used

to manage foreign currency exposure, to obtain commodity exposure, to create synthetic exposure, or to obtain protection

against increases in interest rates. These derivatives, based on deﬁ nitions in GAAP, are not designated as hedging instruments.

As part of its overall diversiﬁ cation strategy, the University allocates a percentage of its assets to investment managers spe-

cializing in securities whose prices are denominated in foreign currencies. The investment guidelines provide discretion

to these managers to adjust the foreign currency exposure of their investment portfolios by using derivative instruments.

The derivatives are used for buying or selling foreign currency under a short-term contract to lock in the dollar cost of a

speciﬁ c pending purchase or sale of a foreign security, and selling foreign currency under a longer-term contract to hedge

against a general decline in the dollar value of foreign security holdings.

Some investment managers have discretion, limited by overall investment guidelines, to use derivative instruments to create

investment exposures that could not be created as efﬁ ciently with other types of investments. These synthetic exposures

in the University’s portfolio consist of four types: 1) forward contracts used to increase exposure to a foreign currency

beyond the level of underlying security investments in that currency; 2) futures contracts used to create exposures to assets

where the futures market provides a more efﬁ cient investment than the underlying securities; 3) swap contracts, also used

to provide a more efﬁ cient means to gain exposure than the underlying securities; and 4) option contracts used to adjust

the exposure of the long-term portfolio to interest rate volatility.

The University entered into option contracts on interest rate swaps as a way to mitigate the impact of a signiﬁ cant rise in

interest rates in the future. Under the terms of certain option contracts on interest rate swaps, the University is obligated

to make future premium payments. At June 30, 2017 and 2016, the University had unfunded premium payment commit-

ments of $4,097 and $5,411 respectively. The University’s premium payment schedule is as follows: $1,025 for the year

ending June 30, 2018; and $1,024 annually for the years ending June 30, 2019, 2020 and 2021.

The following table provides detailed information on the derivatives included in the investment portfolio as of June 30.

Location

Derivative type

Notional

amount

# of

Contracts

Fair value

Notional

amount

# of

Contracts

Fair value

Investments

Foreign currency -$ 43 (341)$ -$ 35 252$

Synthetic (3,464) 2 (1) (3,458) 1 (95)

Interest rate 301,004 3 (1,918) 444,703 4 (3,684)

Total fair value 297,540$ 48 (2,260)$ 441,245$ 40 (3,527)$

FAIR VALUE OF DERIVATIVE HOLDINGS IN STATEMENT OF FINANCIAL POSITION

2017

2016

26

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

4. LAND, BUILDINGS, AND EQUIPMENT

A. General Information

Land, buildings, and equipment are detailed as follows:

Certain properties, for which the University has possession and beneﬁ cial use for an indeﬁ nite period and which other

entities may also record as assets, are included in the consolidated statement of ﬁ nancial position, as follows: (1) land, build-

ings, and equipment of the Contract Colleges aggregating $742,876 and $712,553 at June 30, 2017 and 2016, respectively,

the acquisition cost of which was borne primarily by New York State and (2) land, buildings, and equipment for which

titles rest with government and corporate agencies aggregating $2,438 and $2,048 at June 30, 2017 and 2016, respectively.

The future commitments on capital projects in progress, excluding projects funded by New York State, are approximately

$100,229 at June 30, 2017.

B. Cornell Tech Campus

In December 2011, the University, in partnership with Technion-Israel Institute of Technology, won the Applied Sciences

NYC competition to build and operate a new applied sciences and engineering campus in New York City. The city com-

mitted through the New York City Economic Development Corporation (NYCEDC) a location and seed funding for the

initial construction of the new campus. Under the terms of the agreement with the NYCEDC and the ninety-nine year

ground lease for Roosevelt Island, the University made the commitment to create the new applied sciences campus in three

phases, with milestones in 2017, 2027, and 2037. In addition, the University has enrollment, faculty, and other operational

commitments as part of the agreement.

In 2014, the University broke ground on Roosevelt Island, taking the ﬁ rst steps toward the completion of the Phase I de-

velopment commitments, which include the ﬁ rst academic building, a residential building, a corporate colocation space,

and an executive education facility. The total cost of demolition of the existing structures on the site is considered to be

a prepaid cost of the ground lease, and will be amortized over the term of the lease. At June 30, 2017, the unamortized

amount of the demolition costs is $53,458.

On March 31, 2016, the University entered into a joint venture with the Hudson Companies through its subsidiary H/R

Tech Residential LLC. The purpose of the new joint venture, called Hudson Cornell Residential JV LLC, is to construct

and operate the new residential facility on the Cornell Tech campus. The University has an equity interest of 86.59 percent

and controlling ﬁ nancial interest and, therefore, consolidates the joint venture. This consolidation resulted in $130,786

included in land, buildings, and equipment attributed to the joint venture at June 30, 2017. In addition, Hudson Cornell

Tech LLC, a subsidiary of Hudson Cornell Residential JV LLC, held bonds and notes payable related the construction of

the residential building (the House) (see Note 8A). Unrestricted net assets of $5,625 and $5,754, representing the minor-

ity interest of H/R Tech Residential LLC, is also consolidated into the University’s net assets at June 30, 2017 and 2016,

respectively. Operating activity is immaterial in the current ﬁ scal year.

The Bridge is a condominium association comprised of a “Cornell Unit” and one or more other units initially owned by

the developer and/or its afﬁ liates. The University has entered into a lease agreement for the Cornell Unit for a term of

thirty-ﬁ ve years. The capital lease is reﬂ ected in the consolidated statement of ﬁ nancial position as increase on the land,

buildings, and equipment line of $64,212 as of June 30, 2017, with a corresponding liability presented as obligations under

capital leases. As part of the lease agreement, the University has also made a commitment in the form of gap rent for the

LAND, BUILDINGS, AND EQUIPMENT

Book value at Book value at

June 30, 2017 June 30, 2016

Land, buildings, and equipment 5,745,468$ 5,384,208$

Furniture, equipment, books, and collections 1,310,794 1,236,420

Capital Leases 68,708 4,452

Construction in progress 488,652 489,898

Total before accumulated depreciation 7,613,622$ 7,114,978$

Accumulated depreciation (3,356,815) (3,105,693)

Net land, buildings, and equipment 4,256,807$ 4,009,285$

27

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

developer’s unit(s) in amount not to exceed $2,982 annually, or $44,731 over twenty years. The annual amount gap rent

is adjusted based upon the occupancy level in the developer’s unit(s). During the year ended June 30, 2017, no payment

was made for gap rent.

Cornell Tech met its ﬁ rst milestone when faculty, staff, and researchers moved into the ﬁ rst academic building (Bloomberg

Center) on Roosevelt Island during the summer of 2017, and students, faculty, and researchers moved into the House in

advance of the fall semester. In addition, programs and operations in both the Bloomberg Center and the corporate co-

location building (“The Bridge”) are slated to begin during the 2017-2018 academic year, rounding out the University’s

operational commitments.

5. OBLIGATIONS UNDER SPLIT INTEREST AGREEMENTS AND FUNDS HELD IN TRUST BY OTHERS

The University reports its obligations under split interest agreements at fair value. The fair value of the obligation is cal-

culated annually and considered Level 3 in the fair-value hierarchy. The discount rate is based on average return of invest-

ment grade corporate bonds, weighted using a schedule of actuarial estimates of the lives of the income beneﬁ ciaries and

the relative value of the agreements.

The University’s interest in funds held in trust by others is considered Level 3 in the fair-value hierarchy. Trusts in which

the University has an income interest are valued annually using estimated cash ﬂows based on average actual income over

three years. Remainder interests are based on annual valuation reports received from the funds’ trustees. The discount rates

used to estimate present value are based on the average return of investment grade corporate bonds, weighted according

to a schedule of actuarial estimates.

The following tables summarize the fair values and activity of funds held in trust by others and obligations under split

interest agreements.

2017

Total

Valuation

methodologies

Unobservable

inputs

Range

(weighted

average)

Funds held in trust by others

Remainder 50,067$ Present value calculation Discount rate 3.20%

Years to maturity 0-56 (13)

Lead and perpetual 60,850 Discounted cash flow Discount rate 4.30%

Total funds held in trust by others 110,917$

Obligations under split interest agreements 133,459$ Discounted cash flow

Discount rate 3.60%

Years to maturity 0-76 (16)

SPLIT INTEREST AGREEMENTS AT FAIR VALUE AND LEVEL 3 QUANTITATIVE INFORMATION

Fair value

at

June 30,

2016

Realized

gain/(loss)

Unrealized

gain/(loss)

Purchases Sales

Transfers

in/(out) of

Level 3

Fair value

at

June 30,

2017

Funds held in trust by others

Remainder 64,650$ 1,208$ 488$ 2,280$ (18,559)$ -$

50,067$

Lead and perpetual 60,310 355 185 - - - 60,850

Total funds held in trust by others 124,960$ 1,563$ 673$ 2,280$ (18,559)$ -$ 110,917$

Obligations under split interest agreements 135,444$ -$ (1,985)$ -$ -$ -$ 133,459$

SUMMARY OF LEVEL 3 SPLIT INTEREST AGREEMENT ACTIVITY

28

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

6. DEFERRED BENEFITS

A. General Information

Accrued employee beneﬁ t obligations as of June 30 include:

Accrued postemployment beneﬁ ts include workers’ compensation and medical continuation beneﬁ ts for those on long-

term disability. Other deferred beneﬁ ts include primarily vacation accruals, deferred compensation, and medical beneﬁ t

claims incurred but not reported. Additionally, the University provides various beneﬁ ts to former or inactive employees

after employment, but before retirement, that are recognized when they are earned.

B. Pension and Postretirement Plans

The University’s employee retirement plan coverage is provided by two basic types of plans: one based on a predetermined

level of funding (deﬁned contribution), and the other based on a years-of-service calculation to determine the level of

beneﬁt to be provided (deﬁned beneﬁt).

The primary deﬁned contribution plans for Endowed Ithaca and for exempt employees (those not subject to the overtime

provisions of the Fair Labor Standards Act) at WCM are carried by the Teachers Insurance and Annuity Association, the

College Retirement Equities Fund, the Vanguard Group (WCM only), and Fidelity Investments (Endowed Ithaca only), all

of which permit employee contributions. Total contributions of the Endowed Ithaca and WCM plans for the ﬁscal years

ended June 30, 2017 and 2016 amounted to $111,336 and $103,083 respectively.

WCM maintains the University’s only deﬁ ned beneﬁ t plan. The participants include non-exempt employees at WCM who

meet the eligibility requirements for participation. The plan was frozen in 1976 for exempt employees at WCM and the

accrued beneﬁ ts were merged with the active non-exempt retirement plan in 1989. In accordance with Employee Retire-

ment Income Security Act (ERISA) requirements for the deﬁned beneﬁt plans, the University must fund annually with an

independent trustee an actuarially determined amount that represents normal costs.

Additionally, the University provides health and life insurance beneﬁ ts for eligible pre-Medicare and Medicare-eligible

retired employees and their dependents, based on the attainment of a set of deﬁ ned service and age requirements. The cost

of providing these beneﬁ ts is accrued during the service lives of employees.

C. Obligations and Funded Status

The following table sets forth the pension and postretirement plans’ obligations and funded status as of June 30:

2017 2016

Postemployment benefits 27,526$ 27,694$

Pension and other postretirement benefits 395,243 445,623

Other deferred benefits 187,747 183,093

Total deferred benefits 610,516$ 656,410$

SUMMARY OF DEFERRED BENEFITS

29

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

The accumulated beneﬁ t obligation for the pension plans was $150,761 and $136,219 at June 30, 2017 and 2016, respectively.

The accumulated beneﬁ t obligation differs from the projected beneﬁ t obligation in the table above in that it includes no

assumptions about future compensation levels. It represents the actuarial present value of future payments to plan partici-

pants using current and past compensation levels. For postretirement plans other than pensions, the accumulated beneﬁ t

obligation is the same as the projected beneﬁ t obligations because the liabilities are not compensation-related.

D. Net Periodic Beneﬁ t Cost

Net beneﬁ t expense related to the pension and postretirement plans for the ﬁ scal years ended June 30 includes the

following components:

2017 2016 2017 2016

Service cost (benefits earned during the period) 9,509$ 7,199$ 30,535$ 24,731$

Interest cost 6,758 6,190 24,734 25,150

Expected return on plan assets (6,621) (6,552) (18,811) (19,223)

Amortization of prior service cost (92) (92) - -

Amortization of net (gain)/loss 3,576 793 8,054 1,543

Net periodic benefit cost 13,130$ 7,538$ 44,512$ 32,201$

NET PERIODIC BENEFIT COST

Pension benefits

Other postretirement

2017 2016 2017 2016

Change in plan assets

Fair value of plan assets at beginning of year 96,109$ 92,405$ 257,704$ 263,208$

Actual return on plan assets 13,147 1,963 38,434 (6,181)

Employer contribution 6,000 5,500 23,052 18,887

Benefits paid (3,726) (3,759) (18,052) (18,210)

Fair value of plan assets at end of year 111,530$ 96,109$ 301,138$ 257,704$

Change in benefit obligation

Benefit obligation at beginning of year 160,601$ 121,274$ 638,835$ 538,217$

Service cost (benefits earned during the period) 9,509 7,199 30,535 24,731

Interest cost 6,758 6,190 24,734 25,150

Actuarial (gain)/loss 2,728 29,697 (46,851) 65,896

Gross benefits paid (3,726) (3,759) (16,614) (16,497)

Less: federal subsidy on benefits paid - - 1,402 1,338

Projected benefit obligation at end of year 175,870$ 160,601$ 632,041$ 638,835$

Funded status

(64,340)$ (64,492)$ (330,903)$ (381,131)$

Amounts recognized in the consolidated

statement of financial position

(64,340)$

(64,492)$ (330,903)

$ (381,131)$

Amounts recorded in unrestricted net assets not yet amortized as components of net periodic benefit cost

Prior service cost (416)$

(508)$ -

$ -$

Net actuarial (gain)/loss 44,933 52,307

97,315

171,844

Amount recognized as reduction in unrestricted net assets 44,517$ 51,799

$ 97,315$

171,844$

Amounts recorded in nonoperating pension and postretirement changes

Change in amounts not yet amortized as components of net

periodic benefit cost

7,282$ (33,584)$ 74,529$ (89,758)$

Other components of net periodic benefit cost (3,621) (339) (13,977) (7,471)

Total nonoperating pension and postretirement changes

3,661$ (33,923)$ 60,552$ (97,229)$

SUMMARY OF OBLIGATIONS AND FUNDED STATUS

Pension benefits

Other postretirement

30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

The amounts of prior service costs and actuarial gains/losses that will be amortized into net periodic beneﬁ t cost for the

year ending June 30, 2018 are estimated as follows:

E. Actuarial Assumptions

Assumptions used in determining the pension and postretirement plans’ beneﬁ t obligations and net periodic costs are:

The health care cost trend rate assumption has a signiﬁ cant effect on the amounts reported for other postretirement (health

care) plans. Increasing the health care cost trend rate by one percent in each future year would increase the beneﬁ t obligation

by $150,992 and the annual service and interest cost by $15,545. Decreasing the health care cost trend rate by one percent

in each future year would decrease the beneﬁ t obligation by $102,830 and the annual service and interest cost by $11,025.

F. Plan Assets

The University’s overall investment objectives for the pension plan and postretirement medical beneﬁ t plan assets are

broadly deﬁ ned to include an inﬂ ation-adjusted rate of return that seeks growth commensurate with a prudent level of

risk. To achieve this objective, the University has established fully discretionary trusts with a custodial bank as trustee and

investment manager for WCM’s deﬁ ned beneﬁ t pension plan and the postretirement medical beneﬁ t plan for the Univer-

sity’s endowed employees on the Ithaca campus. Under those trust agreements, the custodial bank establishes investment

allocations and implements those allocations through various investment funds in order to carry out the investment

objectives. The custodial bank has also been appointed as investment manager for WCM’s postretirement medical beneﬁ t

plan with full discretion as to investment allocations in speciﬁ c named funds managed by the bank.

The University’s Retirement Plan Oversight Committee (“RPOC”) is chaired by the Vice President and Chief Human Re-

sources Ofﬁ cer, with committee members selected from across multiple disciplines at the University. Its primary purpose

is to assist the University in fulﬁ lling its ﬁ duciary responsibilities by providing guidance and oversight for the University’s

retirement plans, including oversight of the custodial bank. The RPOC, in accordance with an Investment Policy State-

ment, and in conjunction with its outside consultant, regularly reviews the investment strategies, along with evolving

institutional objectives, and will make recommendations regarding possible changes to asset allocation and investment

managers accordingly.

Risk mitigation is achieved by diversifying investments across multiple asset classes, investing in high quality securities,

and permitting ﬂ exibility in the balance of investments in the recommended asset classes. Market risk is inherent in any

portfolio, but the investment policies and strategies are designed to avoid concentration of risk in any one entity, indus-

try, country, or commodity. The funds in which the plan assets are invested are well-diversiﬁ ed and managed to avoid

concentration of risk.

Pension benefits

Other postretirement

Prior service cost (92)$ -$

Net actuarial (gain)/loss 2,453 3,204

Total 2,361$ 3,204$

ESTIMATED COMPONENTS OF NET PERIODIC BENEFIT COST

2017 2016 2017 2016

Used to calculate benefit obligations at June 30

Discount rate 4.04% 3.94% 3.97% / 3.96% 3.83% / 3.79%

Rate of compensation increase 3.00%

3.00%

Used to calculate net periodic cost at July 1

Discount rate 3.94% 4.80% 3.83% / 3.79% 4.67% / 4.61%

Expected return on plan assets 7.00% 7.00% 7.30% 7.30%

Rate of compensation increase 3.00% 3.00%

Assumed health care cost trend rates

Health care cost trend rate assumed for next year n/a n/a 6.00% 6.50%

Ultimate trend rate n/a n/a 4.50% 4.50%

Years to reach ultimate trend rate n/a

n/a 5 5

SUMMARY OF ACTUARIAL ASSUMPTIONS

Pension benefits

Other postretirement

31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

The expected rate of return assumptions are based on the expertise provided by investment managers at the custodial bank.

The factors that impact the expected rates of return for various asset types includes assumptions about inﬂ ation, historically

based real returns, anticipated value added by investment managers, and expected average asset allocations. The expected

return on plan assets by category for the ﬁ scal year ended June 30, 2017 are similar to the prior ﬁ scal year: 7.4 percent on

equity securities, 3.6 percent on ﬁ xed income securities, and 5.5 percent on real estate, compared to 7.2 percent, 4.4 percent

and 5.5 percent, respectively.

The fair values of the pension plan assets and postretirement medical beneﬁ t plan assets are categorized according to the

fair-value hierarchy. Both the pension plan and postretirement medical beneﬁ t plans invest in funds to meet their invest-

ment objectives. The asset allocation is based on the underlying assets of the various funds. The fair-value level is based

upon each fund as the unit of measure. The fair value of the plans’ assets as of June 30 and the rollforward for Level 3 assets

are disclosed in the tables below.

Target

allocation

2017 2016 2017 2016

Percentage of plan assets

Equity securities 39-85% 65% 62% 77% 72%

Fixed income securities 15-55% 29% 32% 23% 28%

Real estate 0-5% 6% 6% 0% 0%

Total 100% 100% 100% 100%

SUMMARY OF PLAN ASSETS

Pension benefits

Other postretirement

Fair value,

June 30,

2016

Realized

gain/(loss)

Unrealized

gain/(loss)

Purchases Sales

Transfers

in/(out) of

Level 3

Fair value,

June 30,

2017

Mortgage-backed securities 2,627$ -$ 51$ 307$ -$ -$ 2,985$

Real estate 5,736 - 209 801 - - 6,746

Total Level 3 assets 8,363$ -$ 260$ 1,108$ -$ -$ 9,731$

SUMMARY OF LEVEL 3 PENSION PLAN ACTIVITY

PENSION PLAN ASSETS AT FAIR VALUE

Level 1

fair value

Level 2

fair value

Level 3

fair value

2017

Total

2016

Total

Cash and cash equivalents

Money market 342$ -$ -$

$ 342 $ 287

Equity securities

U.S. small cap - 7,629 -

7,629 5,695

U.S. large cap - 32,008 -

32,008 28,677

U.S. multi cap - 6,798 -

6,798 5,757

U.S. REITS - 2,695 -

2,695 2,411

Emerging markets - 8,053 -

8,053 4,795

International equity - 15,371

-

15,371 11,836

Fixed income securities

U.S. high yield bonds -

6,140

-

6,140 4,846

Corporate bonds -

20,557

-

20,557 20,093

Mortgage-backed securities - 30 2,985

3,015 5,009

International fixed income - 2,176 -

2,176 1,041

Other types of investments

Real estate - - 6,746

6,746 5,736

Receivable for investments sold - - -

- 769

Payable for investments purchased - - -

- (843)

Total assets 342$ 101,457$ 9,731$

$ 111,530 $ 96,109

32

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

G. Expected Contributions and Beneﬁ t Payments

The expected annual contributions and beneﬁ t payments that reﬂ ect anticipated service are as follows:

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 established a prescription drug beneﬁ t

known as “Medicare Part D” that also established a federal subsidy to sponsors of retiree healthcare beneﬁ t plans. The

estimated future government subsidy amounts are reﬂ ected in the table above.

H. Contract College Employees

Employees of the Contract Colleges are covered under the New York State pension plans. Contributions to the state retire-

ment system and other employee beneﬁ t costs are paid directly by the state. The amount of direct payments made by the

state on behalf of Contract College employees are not currently determinable and are not included in the consolidated

ﬁ nancial statements. The University reimburses the state for employee beneﬁ t costs on certain salaries, principally those

associated with externally sponsored programs. The amounts reimbursed to the state during the ﬁ scal years ended June

30, 2017 and 2016 were $16,834 and $18,192, respectively, and were included in operating expenses.

7. FUNDS HELD FOR OTHERS

The University, in limited instances, invests funds on behalf of related parties. Independent trustees are responsible for the

designation of income distribution. The value of the funds included on the investment line in the consolidated statement of

ﬁ nancial position was $259,275 and $268,421 for the ﬁ scal years ended June 30, 2017 and 2016, respectively. The University

recognizes an offsetting liability for funds held for others, with one adjustment described below.

Pension benefits Employer paid Government subsidy

University contributions

2018 6,000$ 23,077$ n/a

Future benefit payments

2018 5,989 19,347 1,773

2019 5,969 21,324 1,955

2020 6,474 23,191 2,152

2021 7,299 24,952 2,354

2022 7,678 26,500

2,572

2023-2027 46,112 161,680 16,828

EXPECTED CONTRIBUTIONS AND BENEFIT PAYMENTS

Other postretirement

POSTRETIREMENT PLAN ASSETS AT FAIR VALUE

Level 1

fair value

Level 2

fair value

Level 3

fair value

2017

Total

2016

Total

Cash and cash equivalents

Money market 4,816$ -$ -$ 4,816$ 2,428$

Equity securities

U.S. small cap - 33,086 - 33,086 27,058

U.S. large cap - 92,696 - 92,696 80,380

Emerging markets - 36,549 - 36,549 26,311

International equity - 61,415

- 61,415 43,750

U.S. REITS - 7,564

- 7,564 7,160

Fixed income securities

U.S. high yield bonds - 18,710

- 18,710 11,528

Corporate bonds - 40,199 -

40,199 55,067

Emerging markets debt - 6,087 -

6,087 4,017

Receivable for investments sold 2,125 - -

2,125 1,425

Payable for investments purchased (2,109) - -

(2,109) (1,420)

Total assets 4,832$ 296,306$ -$

301,138$ 257,704$

33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

The New York Hospital-Cornell Medical Center Fund, Inc. (“Center Fund”), which beneﬁ ts Weill Cornell Medicine and

the New York-Presbyterian Hospital, is the major external organization invested in the University’s long-term investment

portfolio with assets and an offsetting liability of $174,655 and $162,153 for the ﬁ scal years ended June 30, 2017 and 2016,

respectively. Because WCM holds a signiﬁ cant beneﬁ cial interest in the assets of the Center Fund, the liability is reduced

by $122,182 and $115,356 for the ﬁ scal years ended June 30, 2017 and 2016, respectively, representing the present value of

the future income stream that will beneﬁ t WCM.

The Boyce Thompson Institute for Plant Research (“BTI”) is an independent, non-proﬁ t organization whose mission is

to advance and communicate scientiﬁ c knowledge in plant biology to improve agriculture, protect the environment, and

enhance human health. In 2017, BTI elected to withdraw its assets from the University’s long-term investment portfolio.

The withdrawal was completed in July 2017. The fair value of BTI investments was $44,881 and $68,824 as of June 30,

2017 and 2016, respectively, with an offsetting liability on the University’s consolidated statement of ﬁ nancial position.

8. BONDS AND NOTES PAYABLE

A. General Information

Bonds and notes payable are reported at carrying value, which is the par amount net of unamortized issuance costs, pre-

miums, and discounts. Bonds and notes payable as of June 30 are summarized as follows:

Debt and related debt service for borrowings by New York State for the construction and renovation of facilities of the

Contract Colleges are not included in the consolidated ﬁ nancial statements because they are not liabilities of the University.

Under the DASNY Revenue Bond Series 1990B agreement, this bond series is a general obligation of the University and is

secured by a pledge of revenue. The University has not granted a pledge of revenue on other debt.

2017 2016

Interest rates

Final

maturity

Dormitory Authority of the State of New York (DASNY)

Revenue Bond Series

1990B-fixed rate 31,150$ 34,275$ 4.50 to 5.00% 2025

2000A-variable rate/monthly 37,875 40,300 0.78 to 1.29 2029

2000B-variable rate/monthly 52,805 55,720 0.78 to 1.29 2030

2004A&B-variable rate/weekly 65,850 68,750 0.40 to 0.91 2033

2008B&C-fixed rate 109,210 112,235 5.00 2037

2009A-fixed rate 268,155 274,950 4.00 to 5.00 2039

2010A-fixed rate 285,000 285,000 4.00 to 5.00 2040

2016A-fixed rate 121,920 125,850 2.00 to 5.00 2035

Tax-exempt commercial paper 52,890 52,890 0.46 to 0.93 2037

Tompkins County Industrial Development Agency (TCIDA)

2002A-variable rate/monthly 32,245 34,045 0.78 to 1.29 2030

2008A-fixed rate 59,155 60,885 3.00 to 5.00 2037

Empire State Development 1,500 1,625 - 2029

2009 Taxable-fixed rate -

250,000 5.45

2017

2007A Taxable commercial paper 83,890 83,890 0.50 to 1.25

-

Hudson Cornell Residential JV LLC 80,949 28,218

2.72 to 3.48 2019

Other 6,271 6,502

4.90 to 6.63 2039

Outstanding bonds and notes payable 1,288,865

$ 1,515,135$

Unamortized premium and issuance costs 43,396 52,233

Total bonds and notes payable 1,332,261$ 1,567,368$

SUMMARY OF BONDS AND NOTES PAYABLE

34

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

During the ﬁ scal year ended June 30, 2017, the University redeemed Series 2009 taxable bonds with a maturity date in

January 2019. The University incurred a $18,973 make-whole call premium on an early redemption, reported as non-

operating other in the consolidated statement of activities. During the ﬁ scal year ended June 30, 2016, the University re-

structured the DASNY Series 2000A and Series 2000B bonds and the TCIDA Series 2002A bonds to a ten-year, variable-rate

direct purchase with Bank of America Merrill Lynch. The variable rate is calculated using a percentage of LIBOR plus the

applicable margin. Additionally, the University issued $125,850 DASNY Series 2016A ﬁ xed-rate bonds to effect a current

refunding of DASNY Series 2006A bonds in order to achieve present value savings. The University wrote off $6,042 of

bond premium and $2,265 of Series 2006 bond issuance costs.

Hudson Cornell Tech LLC, a subsidiary of Hudson Cornell Residential JV LLC (see Note 4B), contracted with Wells Fargo

Bank, N.A. for a variable-rate building and equipment loan up to $105,000. The University has consolidated $80,949 and

$28,218 of debt attributable to the subsidiary at June 30, 2017 and 2016, respectively. The loan is secured by a security

interest in the building and equipment.

The University maintains tax-exempt and taxable commercial paper programs. Tax-exempt commercial paper is used to

ﬁ nance qualiﬁ ed capital projects and equipment purchases for the Ithaca and WCM campuses. Taxable commercial paper

is also used for these purposes, and can be used to ﬁ nance short-term working capital needs. The maximum authorized

amount of each commercial paper program is $200,000.

Scheduled principal and interest payments on bonds and notes for the next ﬁ ve ﬁ scal years and thereafter are shown below:

The University estimates future interest payments on variable-rate debt based on the Securities Industry and Financial Mar-

kets Association (SIFMA) rate for tax-exempt debt and the London Interbank Offered Rates (LIBOR) rate for taxable debt.

B. Interest Rate Swaps

The University approved the use of interest rate swaps to mitigate interest rate risk in the debt portfolio. Interest rate swaps

are derivative instruments; however, their use by the University is not considered to be hedging activity, based on deﬁ ni-

tions in generally accepted accounting principles.

Through the use of interest rate swap agreements, the University is exposed to the risk that counterparties will fail to meet

their contractual obligations. To mitigate counterparty risk, the University limits swap exposure for each counterparty.

Master agreements with counterparties include netting arrangements that permit the University to net amounts due to

the counterparty with amounts due from the counterparty. Utilizing netting arrangements reduces the maximum loss in

the event of counterparty default.

The University’s swap agreements contain a credit-rating-contingent feature in which the counterparties can request col-

lateral on agreements in net liability positions. At June 30, 2017 and 2016, the University did not have collateral on deposit

with any counterparty.

The University’s interest rate swaps are valued as of June 30 by an independent third party that uses the mid-market levels,

as of the close of business, to value each agreement. The valuations provided are derived from proprietary models based

upon well-recognized ﬁ nancial principles and estimates about relevant future market conditions and the University’s credit

worthiness. The University’s interest rate swaps are classiﬁ ed as Level 2 in the fair-value hierarchy.

At June 30, 2017, the University had ﬁ ve interest rate swap agreements to exchange variable-rate cash ﬂ ows for ﬁ xed-rate

cash ﬂ ows without the exchange of the underlying principal amount. Net payments or receipts of the swap agreements are

recorded as adjustments to the swap interest and change in value of interest rate swaps line in the consolidated statement

Year Principal Interest Total

2018 30,955$ 41,205$ 72,160$

2019 113,304 40,321 153,625

2020 33,714 36,758 70,472

2021 35,266 41,991 77,257

2022 36,949 40,653 77,602

Thereafter 1,038,677 444,749 1,483,426

Total 1,288,865$ 645,677$ 1,934,542$

ANNUAL DEBT SERVICE REQUIREMENTS

35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

of activities. In all agreements in effect at June 30, 2017, the counterparty pays a variable interest rate equal to a percentage

of the one-month LIBOR.

The following table provides detailed information on the interest rate swaps at June 30, 2017, with comparative fair values

for June 30, 2016. The swaps are reported based on notional amount.

2017 2016

Location

Notional

amount

Interest

rate Termination date

Basis

Level 2

fair value

Level 2

fair value

Swap interest and change in value of interest rate swaps

34,045$ 4.52 July 1, 2030 LIBOR (6,939)$ (9,581)$

89,892 3.92 July 1, 2038 LIBOR (21,289) (29,407)

275,000 3.88 July 1, 2040 LIBOR (95,715) (129,286)

192,500 3.48 July 1, 2041 LIBOR (40,574) (58,169)

193,829 3.77 July 1, 2044 LIBOR (50,735) (70,260)

Total fair value (215,252)$ (296,703)$

FAIR VALUE OF INTEREST RATE SWAPS IN STATEMENT OF FINANCIAL POSITION

C. Standby Bond Purchase Agreements

The University has a standby bond purchase agreement with BNY Mellon (expiring January 2019) to purchase the DASNY

Series 2004 bonds in the event that these bonds cannot be remarketed. In the event that the bonds cannot be remarketed

and the agreement is not otherwise renewed, the University will be required to redeem the bonds or reﬁ nance the bonds

in a different interest rate mode. In the event that the bonds cannot be remarketed and the University did not redeem, the

University will have a current obligation to purchase the bonds tendered.

D. Lines of Credit

The University maintains two $100 million lines of credit with annual expiration dates of January 31 and April 1. As of

June 30, 2017 and 2016, the University had not borrowed against either line of credit. The University records the working

capital lines of credit activity and outstanding balances as other liabilities in the consolidated statement of ﬁ nancial position.

9. LEASES

Although the University generally purchases, rather than leases, machinery and equipment, the University does enter into

operating lease agreements for the use of real property. The University has also entered into capital leases for buildings;

use of capital leases for equipment is immaterial. Total operating lease expenses were $35,829 and $31,284 for the ﬁ scal

years ended June 30, 2017 and 2016, respectively. The future annual minimum lease payments in the following table are

payments under operating leases expiring at various dates through June 30, 2068, and principal payments under capital

leases expiring at various dates through September 30, 2051.

ANNUAL MINIMUM LEASE PAYMENTS

Year Capital Operating

2018 5,216$ 42,851$

2019 4,829 43,355

2020 4,250 42,339

2021 3,803 41,798

2022 3,503 38,154

Thereafter 46,241 436,586

Total minimum lease payments 67,842$ 645,083$

36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

10. FUNCTIONAL EXPENSES AND STUDENT AID

Total expenses by functional categories for the ﬁ scal years ended June 30 are as follows:

The expenses for operations and maintenance of facilities, depreciation, and interest related to capital projects are allocated

to functional categories based on square footage. The amounts allocated for operations and maintenance were approxi-

mately $150,379 and $177,241 for the ﬁ scal years ended June 30, 2017 and 2016, respectively.

Student ﬁ nancial assistance is shown as a component of instruction expense unless the assistance is for tuition and man-

datory fees. If the assistance is for tuition and mandatory fees, the amounts are recorded as scholarship allowance, which

reduces tuition revenue. Total ﬁ nancial assistance amounts classiﬁ ed as instruction expense were $45,262 and $46,156 for

the ﬁ scal years ended June 30, 2017 and 2016, respectively.

11. NET ASSETS

A. General Information

The University’s net assets as of June 30 are as follows:

2017 2016

Instruction

$ 867,208 $ 823,090

Research

598,089 594,050

Public service

128,583

123,850

Academic support

292,272

274,152

Student services

173,896 167,401

Medical services

1,133,964 1,063,601

Institutional support

569,532 548,525

Enterprises and subsidiaries

257,788 265,097

Total expenses

$ 4,021,332 $ 3,859,766

FUNCTIONAL EXPENSES

SUMMARY OF NET ASSETS

Unrestricted

Temporarily

restricted

Permanently

restricted

2017

Total

2016

Total

Endowment

True endowment (32,345)$ 1,557,031$ 3,030,208$ 4,554,894$ 3,952,559$

Funds functioning as endowment (FFE) 1,427,824 352,801 - 1,780,625 1,631,638

Total true endowment and FFE 1,395,479$ 1,909,832$ 3,030,208$ 6,335,519$ 5,584,197$

Funds held by others, perpetual - - 180,925 180,925 173,525

Total University endowment 1,395,479$ 1,909,832$ 3,211,133$ 6,516,444$ 5,757,722$

Other net assets

Operations (306,192) 445,858 - 139,666 118,004

Student loans 5,302 113 48,361 53,776 52,210

Facilities and equipment 2,746,192 225,863 - 2,972,055 2,809,746

Split interest agreements - 65,809 41,922 107,731 95,314

Funds held by others, other than perpetual - 28,965 23,392 52,357 67,125

Contributions receivable, net - 653,506 249,340 902,846 986,322

Long-term accruals (720,256) - - (720,256) (847,449)

Total net assets 3,120,525$ 3,329,946$ 3,574,148$ 10,024,619$ 9,038,994$

37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

Unrestricted net asset balances for operations are primarily affected by operating activities and strategic decisions to invest

expendable balances in funds functioning as endowment and capital projects. Long-term accruals represent longer term

liabilities including the unfunded amount of pension and postretirement beneﬁ ts, vacation accruals, conditional asset

retirement obligations for asbestos remediation, and fair value adjustment on interest rate swaps.

B. Endowment

The University endowment net assets at June 30 were held in support of the following purposes:

Of the endowment assets held at the University, 96 percent was invested in the LTIP at June 30, 2017 and 2016. The LTIP is a

mutual-fund-like vehicle used for investing the University’s true endowments, funds functioning as endowment, and other

funds that are not expected to be expended for at least ﬁ ve years. The University employs a unit method of accounting for

the LTIP. Each participating fund enters into and withdraws from the pooled investment account based on monthly unit

fair values. Participation in the LTIP using unrestricted funds requires a minimum investment of one hundred thousand

dollars and a commitment of at least ﬁ ve years.

At June 30, 2017, 713 of 7,085 true endowment funds invested in the LTIP had a total historic dollar value of $467,714

and a fair value of $435,369, resulting in these endowments being underwater by a total of $32,345. The University holds

signiﬁ cant appreciation on endowments to offset these temporary decreases in value. The University has maintained these

true endowment funds at their historical book value.

Changes in the endowment net assets, exclusive of funds held in trust by others, for the ﬁ scal years ended June 30 are

presented below:

2017 2016

Academic programs and research 1,840,470$ 1,511,788$

Financial aid 1,601,140 1,463,388

Professorships 1,362,084 1,151,134

General purpose and other 1,249,398 1,202,771

Facilities support 103,893 97,691

CU Foundation 178,534 157,425

Total true endowment and FFE, end of year 6,335,519$ 5,584,197$

SUMMARY OF ENDOWMENT PURPOSE

SUMMARY OF ENDOWMENT ACTIVITY

Unrestricted

Temporarily

restricted

Permanently

restricted

2017

Total

2016

Total

True endowment and FFE, beginning of year 1,169,610$ 1,733,156$ 2,681,431$ 5,584,197$ 5,883,517$

Investment return

Net investment income 10,528 30,436 770 41,734 44,230

Net realized and unrealized gain/(loss) 203,032 437,714 740 641,486 (225,517)

Total investment return 213,560$ 468,150$ 1,510

$ 683,220$ (181,287)$

New gifts 936 36,699 349,612

387,247 184,454

Amounts appropriated for expenditure/reinvestment (83,175) (236,642)

2,763 (317,054) (295,331)

Other changes and reclassifications 94,548 (91,531)

(5,108) (2,091) (7,156)

Total true endowment and FFE, end of year 1,395,479$ 1,909,832

$ 3,030,208$ 6,335,519$ 5,584,197$

38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

12. SELF-INSURANCE

The University retains self-insurance for property, general liability, student health insurance, and certain health beneﬁ ts

and, for medical malpractice, has an equity interest in a multi-provider captive insurance company.

A. Medical Malpractice

The University obtains medical malpractice insurance through MCIC Vermont (“MCIC”). MCIC is a

reciprocal risk retention group that provides medical malpractice insurance coverage and risk management ser-

vices to its subscribers. MCIC is owned by the University, New York-Presbyterian Hospital, and four other institu-

tions of higher education and their respective teaching hospitals. All of WCM’s faculty physicians are enrolled in

MCIC. The medical malpractice incurred but not reported liability is calculated annually on an actuarial basis.

WCM has recorded medical malpractice liabilities of $151,006 and $150,096 at June 30, 2017 and 2016, respectively, as

other liabilities in the consolidated statement of ﬁ nancial position. In addition, WCM maintains a reinsurance program

with MCIC with anticipated recoveries of $103,726 and $102,891, respectively, recorded as accounts receivable (Note 2A).

B. Student Health Plan

The University has established a self-funded student health plan under Section 1124 of the New York State Insurance Law

(“NYSIL”). The Student Health Plan (“SHP”) provides health insurance coverage to students at the University’s Ithaca-

based campuses. The table below presents a summary of SHP operations occurring during the University’s ﬁ scal years

ended June 30.

The University has established reserves with the amounts necessary to satisfy obligations of the plan. Based on an analysis

and recommendation of a qualiﬁ ed actuary, and with the approval of New York State, the reserve for medical claims in-

curred but not reported (“IBNR”) and claims reported but not paid (“RBNP”) is maintained at an amount not less than

14.5 percent of expected medical claims and 5 percent of expected pharmacy drug claims. In addition, a separate contin-

gency reserve has been established for the purpose of satisfying unexpected obligations in the event of termination of the

plan. The contingency reserve is maintained at an amount not less than 5 percent of the total current plan year premiums

and is invested in the University’s endowment. NYS requires that the assets of the contingency reserve consist of certain

investments of the types speciﬁ ed in Section 1404 of NYSIL. The speciﬁ ed types of investments include U.S. government

securities categorized in fair-value hierarchy Level 1, of which the University holds $42,897 and $65,622 in its investment

portfolio as of June 30, 2017 and 2016 respectively (Note 3B). Premium revenue is billed in advance of the plan year (un-

earned) and recognized as revenue on a monthly basis as coverage is provided. The changes in the unearned premiums

and SHP reserves during the ﬁ scal years ended June 30 are presented below.

SUMMARY OF STUDENT HEALTH PLAN OPERATIONS

July 1 -

August 16

(prior plan

year)

August 17 -

June 30

(current plan

year)

2017

Fiscal year

total

July 1 - August

16

(prior plan

year)

August 17 -

June 30

(current plan

year)

2016

Fiscal year

total

Total premium revenue 3,693$ 26,965$ 30,658$ 3,652$ 24,753$ 28,405$

Expenses

Medical and prescription drug expense 2,976 14,264 17,240 2,843 14,348 17,191

Health center capitation 786 5,299

6,085 463 5,088 5,551

Administrative fees 82

2,387 2,469 358 2,626 2,984

Total expenses 3,844

$ 21,950$ 25,794$ 3,664$

22,062$ 25,726$

Net income from health plan operations (151)$ 5,015$ 4,864$ (12)

$ 2,691$ 2,679$

39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

SUMMARY OF STUDENT HEALTH PLAN UNEARNED PREMIUMS

2015-2016

plan year

2016-2017

plan year

2014-2015

plan year

2015-2016

plan year

Balance as of July 1 3,625$ -$ 3,412$ -$

Balance as of June 30 - 2,270 - 3,625

Net change (3,625)$ 2,270$ (3,412)$ 3,625$

2017

Unearned premiums

2016

Unearned premiums

13. CONTINGENT LIABILITIES

The University is a defendant in various legal actions, some of which are for substantial monetary amounts, that arise out of

the normal course of its operations. Although the ﬁ nal outcome of the actions cannot be foreseen, the University’s admin-

istration is of the opinion that eventual liability, if any, will not have a material effect on the University’s ﬁ nancial position.

14. SUBSEQUENT EVENTS

The University has performed an evaluation of subsequent events through October 25, 2017, the date on which the con-

solidated ﬁ nancial statements were issued and determined no material impact on the University’s consolidated ﬁ nancial

statements.

SUMMARY OF STUDENT HEALTH PLAN RESERVES

2017 2016 2017 2016

Balance as of July 1 2,500$ 2,409$ 1,547$ 1,374$

Balance as of June 30 3,203

2,500 1,723 1,547

Net change 703$ 91$ 176$ 173$

IBNR/RBNP reserve

Contingency reserve

40

UNIVERSITY ADMINISTRATION

Martha E. Pollack, President

Michael I. Kotlikoff, Provost

Augustine M.K. Choi, Provost for

Medical Affairs and Stephen and Suzanne

Weiss Dean of Weill Cornell Medicine

Joanne M. DeStefano, Executive Vice President

and Chief Financial Ofﬁ cer

Madelyn F. Wessel, University Counsel and

Secretary of the Corporation

Judith A. Appleton, Vice Provost

Robert A. Buhrman, Senior Vice Provost

for Research and Vice President for Technology

Transfer, Intellectual Property and Research

Policy

Stephen M. Cohen, Executive Vice Provost for

Weill Cornell Medicine

Gerald L. Hector, Vice President for Financial

Affairs

Daniel P. Huttenlocher, Vice Provost for Cornell

Tech

Barbara A. Knuth, Senior Vice Provost

David A. Lifka, Vice President for Information

Technologies and Chief Information Ofﬁ cer

Ryan T. Lombardi, Vice President for Student

and Campus Life

Joel M. Malina, Vice President for University

Relations

Kenneth M. Miranda, Chief Investment Ofﬁ cer

Glen C. Mueller, University Auditor

Mary G. Opperman, Vice President and Chief

Human Resources Ofﬁ cer

John A. Siliciano, Deputy Provost

William E. Sitzabee, Interim Vice President for

Infrastructure, Properties and Planning

Laura M. Spitz, Vice Provost for International

Affairs

Rebecca J. Stoltzfus, Vice Provost for

Undergraduate Education

Paul J. Streeter, Vice President for

Budget and Planning

Charles F. Van Loan, Dean of Faculty

Frederick M. Van Sickle, Vice President for

Alumni Affairs and Development

ACADEMIC UNITS

Charles H. Dyson School of Applied Econom-

ics and Management, Edward W. McLaugh-

lin, David J. Nolan Interim Dean

College of Agriculture and Life Sciences

Kathryn J. Boor, Ronald P. Lynch Dean

College of Architecture, Art, and Planning

Kent Kleinman, Gale and Ira Drukier Dean

College of Arts and Sciences

Gretchen Ritter, Harold Tanner Dean

College of Engineering

Lance R. Collins, Joseph Silbert Dean

College of Human Ecology

Alan D. Mathios, Rebecca Q. and James C.

Morgan Dean

College of Veterinary Medicine

Lorin D. Warnick, Austin O. Hooey Dean

Cornell SC Johnson College of Business,

Soumitra Dutta, Dean

Cornell Tech

Daniel P. Huttenlocher, Dean

Cornell University Library

Vacant, Carl A. Kroch University Librarian

Faculty of Computing and Information

Science, J. Gregory Morrisett, Dean

Graduate School

Barbara A. Knuth, Dean

Law School

Eduardo M. Peñalver, Allan R. Tessler Dean

School of Continuing Education and

Summer Sessions, Glenn C. Altschuler,

Dean

School of Hotel Administration

Kate Walsh, Interim Dean

School of Industrial and Labor Relations

Kevin F. Hallock, Kenneth F. Kahn Dean

Samuel Curtis Johnson Graduate School of

Management, Mark W. Nelson, Anne and

Elmer Lindseth Dean

Weill Cornell Graduate School of Medical

Sciences, Gary Koretzky, Dean and Senior

Associate Dean for Research at Weill Cornell

Medicine

Weill Cornell Medical College

Michael G. Stewart, Vice Dean and the

E. Darracott Vaughan, Jr. M.D. Senior

Associate Dean for Clinical Affairs

Weill Cornell Medical College in Qatar

Javaid I. Sheikh, Dean

UNIVERSITY

ADMINISTRATION

41

BOARD OF

TRUSTEES AND

TRUSTEES AT LARGE

LEADERSHIP

Robert S. Harrison, Chair

David D. Croll, Vice Chair

Barton J. Winokur, Vice Chair

Jan Rock Zubrow, Chair of the Executive

Committee

Ex Ofﬁ cio Members

Andrew Cuomo, Governor of New York State

John J. Flanagan, President of the Ne w York State

Senate Assembly

Carl E. Heastie, Speaker of the New Yor k State

Senate Assembly

Other Members

Richard A. Baker

Yamini Bhandari

Matthew L. Biben

Jessica M. Bibliowicz

Douglas L. Braunstein

David J. Breazzano

Dara Brown

Mario Cilento

Chad O. Coates

Ezra Cornell

Gary S. Davis

Nicole B. DelToro

David M. Einhorn

Elizabeth C. Everett

Krisberg

Stephanie K. Fox

Thomas T. Groos

Alexander Hanson

Patricia E. Harris

Katrina E. James

Kraig H. Kayser

Ruben J. King-Shaw Jr.

Peggy J. Koenig

Robert S. Langer Jr.

Bruce V. Lewenstein

Linda R. Macaulay

Pamela G. Marrone

Lowell C. McAdam

Ronald D. McCray

John F. Megrue Jr.

Mary J. Miller

Howard P. Milstein

John A. Noble

Barbara Goldman

Novick

Armando J. Olivera

Donald C. Opatrny

William D. Perez

Leland C. Pillsbury

Jonathan K. Poe

Bruce S. Raynor

Girish V. Reddy

Gene D. Resnick

Susan T. Rodriguez

Paul A. Salvatore

Martin F. Scheinman

Dalia P. Stiller

Chiaki Tanuma

Ratan N. Tata

Michael A. Troy

Sheryl Hilliard Tucker

M. Eileen McManus

Walker

Padmasree Y. Warrior

Laura A. Wilkinson

Mariana F. Wolfner

Craig Yunker

Jia Zhu

Karen P. Zimmer

COMMITTEES

Audit Committee

Barton J. Winokur, Chair

Kraig H. Kayser, Vice Chair

Ruben J. King-Shaw, Vice Chair

Board of Overseers - Weill Cornell Medicine and

Graduate School of Medical Sciences

Jessica Bibliowicz, Chair

Robert Appel, Vice Chair

Robert A. Belfer, Vice Chair

Jeffrey Feil, Vice Chair

Barbara Friedman, Vice Chair

Sanford I. Weill, Chair Emeritas

Buildings and Properties Committee

Leland C. Pillsbury, Co-Chair

Dalia P. Stiller, Co-Chair

Susan T. Rodriguez, Vice Chair

Executive Committee

Jan Rock Zubrow, Chair

Finance Committee

David D. Croll, Co-Chair

Doug L. Braunstein, Co-Chair

Peggy J. Koenig, Vice Chair

Investment Committee

Donald C. Opatrny, Chair

Gary S. Davis, Vice Chair

Girish V. Reddy, Vice Chair

Committee on Academic Affairs

William D. Perez, Co-Chair

Karen P. Zimmer, Co-Chair

Committee on Alumni Affairs

Gene D. Resnick, Chair

Nicole B. DelToro, Vice Chair

Committee on Board Composition

and Governance

Ronald D. McCray, Chair

Committee on Development

Gary S. Davis, Co-Chair

Paul A. Salvatore, Co-Chair

Committee on University Relations

Craig Yunker, Chair

Linda R. Macaulay,Vice Chair

Martin F. Scheiman, Vice Chair

Committee on Student Life

Armando J. Olivera, Chair

Elizabeth C. Everett Krisberg, Vice Chair

Barbara G. Novick, Vice Chair

42

Trustee-Community Communications

Committee

Ezra Cornell, Chair

Emeritus Chairmen of the Board

Peter C. Meinig

Harold Tanner

Other Emeritus Trustees

Robert H. Abrams

Ellen Gussman Adelson

Lilyan H. Afﬁ nito

John E. Alexander

Robert J. Appel

Stephen B. Ashley

Richard A. Aubrecht

C. Morton Bishop

Robert W. Bitz

Robert T. Blakely III

Kenneth H. Blanchard

Franci J. Blassberg

Richard Booth

Ann Schmeltz Bowers

James L. Broadhead

Dwight L. Bush Sr.

Michael W.N. Chiu

J. Thomas Clark

Laura J. Clark

Abby Joseph Cohen

Paul F. Cole

Robert A. Cowie

Diana M. Daniels

Kenneth T. Derr

Ira Drukier

John S. Dyson

Robert R. Dyson

Anne Evans Estabrook

Fred J. Eydt

Mary C. Falvey

Miguel A. Ferrer

Stephen W. Fillo

David R. Fischell

Samuel C. Fleming

Cheryl A. Francis

Barbara B. Friedman

H. Laurance Fuller

James Lowell Gibbs Jr.

Blanche S. Goldenberg

Kenneth A. Goldman

Paul A. Gould

Myra Maloney Hart

Joseph H. Holland

Denis Hughes

H. Fisk Johnson

Thomas W. Jones

Albert J. Kaneb

Robert J. Katz

Karen Rupert Keating

Robert D. Kennedy

Harvey Kinzelberg

Benson P. Lee

Charles R. Lee

Jon A. Lindseth

Marcus H. Loo

Carol Britton MacCorkle

Eli Manchester Jr.

Thomas A. Mann

Dale Rogers Marshall

Kevin M. McGovern

Peter C. Meinig

Ronay A. Menschel

Robert W. Miller

Elizabeth D. Moore

Rebecca Q. Morgan

Edwin H. Morgens

N.R. Narayana Murthy

John P. Neafsey

Carolyn Chauncey Neuman

Peter J. Nolan

Lubna Suliman Olayan

Margaret Osmer-McQuade

Roy H. Park Jr.

Jeffrey P. Parker

Andrew M. Paul

Robert A. Paul

William E. Phillips

Philip R. Reilly

Irene B. Rosenfeld

Jerold R. Ruderman

Robert L. Ryan

William D. Sanders

Nelson Schaenen Jr.

Robert W. Staley

Patricia Carry Stewart

Sherri K. Stuewer

Martin Y. Tang

Harold Tanner

Lisa M. Skeete Tatum

Peter G. Ten Eyck II

Allan R. Tessler

Samuel O. Thier

Andrew H. Tisch

Paul R. Tregurtha

Sanford I. Weill

Roger J. Weiss

Philip M. Young

Michael J. Zak

David W. Zalaznick

43

WEILL CORNELL MEDICINE

AND GRADUATE SCHOOL

OF MEDICAL SCIENCES

BOARD OF OVERSEERS

Jessica Bibliowicz, Chair

Robert Appel, Vice Chair

Robert A. Belfer, Vice Chair

Jeffrey Feil, Vice Chair

Barbara B. Friedman, Vice Chair

Sanford I. Weill, Chair Emeritus

Tarek Abdel-Meguid

Hushang Ansary

†

Madelyn Antoncic, Ph.D.

Ajay Banga

Ron Baron

Her Highness Sheikha Moza Bint Nasser

Lloyd C. Blankfein

David Blumenthal, M.D.

Augustine M.K. Choi, M.D.

*

Chelsea V. Clinton

Abby Joseph Cohen

David M. Cohen

Alberto Cribiore

Caroline R. Curry

Ellen Davis

Robert S. Dow

Ira Drukier

Sanford B. Ehrenkranz

Israel A. Englander

Anne E. Estabrook

David R. Fischell, Ph.D

Samuel Fleming

†

Charlotte M. Ford

Harold Ford, Jr.

Kelli Olsen Ford

Kenneth C. Frazier

Antonio M. Gotto, Jr., M.D., D.Phil

Paul A. Gould

Jeffrey W. Greenberg

Maurice R. Greenberg

Leonard M. Harlan

Robert S. Harrison

†

Catherine C. Hart, M.D.

Raymond R. Herrmann, Jr.

†

John Kanas

Evan H. Katz

Robert J. Katz

Harvey Kaylie

Michael M. Kellen

James M. Kilts

Harvey Klein, M.D.

†

Gary Koretzky, M.D., Ph.D.*

Charles R. Lee

Thomas H. Lee, M.D.

Arthur Mahon

†

Raul Martinez-McFaline

Michael T. Masin

Peter C. Meinig

Ronay A. Menschel

Edward H. Meyer

Sandra R. Meyer

Howard P. Milstein

Edwin H. Morgens

Rupert Murdoch

†

Stuart Mushlin, M.D*

Spyros Niarchos

Timothy O’Neill

Margaret Osmer-McQuade

†

Nancy C. Paduano

Nelson Peltz

Martha E. Pollack*

Stanley B. Prusiner, M.D.

Bruce Ratner

Philip R. Reilly, M.D, J.D.

Burton P. Resnick

Frank H. T. Rhodes

†

David N. Roberts

Isadore Rosenfeld, M.D.

†

Zev Rosenwaks, M.D.

Richard G. Ruben

Lewis A. Sanders

Herbert J. Siegel

A.J.C. (Ian) Smith

Daisy M. Soros

Patricia Carry Stewart

†

Nan Goldman Swid

Harold Tanner

†

Samuel O. Thier, M.D.

Andrew H. Tisch

Igor Tulchinsky

Roger J. Weiss

†

Carolyn S. Wiener

Barry Wolf

* Ex ofﬁ cio

†

Life Overseer

44

The Cornell University Financial Report is produced by:

The Division of Financial Affairs

Cornell University

341 Pine Tree Road, Ithaca, New York 14850-2820

[email protected]

http://www.dfa.cornell.edu

607-255-6240

Additional copies of this report are available at:

https://www.dfa.cornell.edu/about-us/reports

Cover photo courtesy of Cornell University Photography.

Ho Plaza, Ithaca New York.

Diversity and Inclusion are a part of Cornell University’s heritage.

We are an employer and educator recognized for valuing AA/EEO,

Protected Veterans, and Individuals with Disabilities.

10/2017 150 CUDPS

45