JHU Financial Report 1995
Notes to Financial Statements
June 30, 1995 and 1994
JHU Financial Report 1995
Notes to Financial Statements
June 30, 1995 and 1994
Johns Hopkins University is a private, nonprofit institution of higher education based in Baltimore, Maryland. The University provides education and training services, primarily for students at the undergraduate, graduate and postdoctoral levels, and performs research, training and other services under grants, contracts and similar agreements with sponsoring organizations, primarily departments and agencies of the United States Government. Certain members of the faculty also provide professional medical services to patients at The Johns Hopkins Hospital and other hospitals in the Baltimore area.
(b) Basis of Presentation
The financial statements include the accounts of the various academic and administrative divisions, the Applied Physics Laboratory (APL), The Johns Hopkins University Press and certain affiliated organizations which are controlled by the University, including JHPIEGO Corporation and Peabody Institute of the City of Baltimore.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosures of contingencies at the date of the financial statements and revenues and expenses recognized during the reporting period. Actual results could differ from those estimates.
In 1995, the University adopted the revised standards for financial reporting set forth in Statement of Financial Accounting Standards No. 117, "Financial Statements of Not-for- Profit Organizations," and changed its method of accounting for contributions received to adopt the provisions of Statement of Financial Accounting Standards
No. 116, "Accounting for Contributions Received and Contributions Made." The provisions of these statements were applied retroactively and, accordingly, the financial statements for 1994 have been restated. Adoption of Statement No. 117 resulted in significant changes in the format and content of the basic financial statements and changes in the classification and presentation of certain items. Adoption of Statement No. 116 resulted in changes in the measurement and timing of recognition of contributions.
A summary of the effect of adoption of Statements No. 116 and No. 117 is as follows at June 30 (in thousands):
| 1994 | 1993 | |
| Total fund balances, as previously reported | $1,537,023 | 1,501,294 |
| Elimination of unexpended research and training awards | (193,048) | (205,591) |
| Recognition of contributions receivable and interests in perpetual trusts | 31,526 | 22,172 |
| Total fund balances, as restated | $ 1,375,501 | 1,317,875 |
Total fund balances, as restated, are classified as follows at June 30 (in thousands):
| 1994 | 1993 | |
| Payables and deferred revenues under split interest agreements | $27,052 | 25,465 |
| Refundable advances from U.S. Government for student loan programs and other long-term liabilities | 36,326 | 35,445 |
| Advances under grants and contracts | 27,434 | 23,782 |
| Net assets | 1,284,689 | 1,233,183 |
| Total | $1,375,501 | 1,317,875 |
Under the revised financial reporting standards, net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the University are classified and reported as follows:
Temporarily restricted -- Net assets subject to donor- imposed stipulations that may or will be met either by actions of the University and/or the passage of time.
Unrestricted -- Net assets that are not subject to donor-imposed stipulations.
Under provisions of Statement No. 116, contributions, including unconditional promises to give, are recognized as revenues in the period received. Contributions received for capital projects or perpetual or term endowment funds and contributions under split interest agreements or perpetual trusts are reported as nonoperating revenues. All other contributions are reported as operating revenues. Conditional promises to give are not recognized until the conditions on which they depend are substantially met. Contributions of assets other than cash are recorded at their estimated fair value at the date of gift, except that contributions of works of art, historical treasures and similar assets held as part of collections are not recognized or capitalized. Contributions to be received after one year are discounted at a rate commensurate with the risk involved. Amortization of the discount is recorded as additional contribution revenue and used in accordance with donor-imposed restrictions, if any, on the contributions. Allowance is made for uncollectible contributions based upon management's judgment and analysis of the creditworthiness of the donors, past collection experience and other relevant factors.
(c) Cash and Cash Equivalents
Short-term investments with maturities at dates of purchase of three months or less are classified as cash equivalents, except that any such investments purchased with funds on deposit with bond trustees or with funds held in trusts or by external endowment investment managers are classified with the deposits and investments, respectively. Cash equivalents include short- term U.S. Treasury securities and other short-term, highly liquid investments and are carried at cost which approximates market value.
(d) Investments
Purchased investments are stated at cost or amortized cost where appropriate. If the market value of an investment declines to a level below carrying value and the decline is considered to be other than temporary in nature, the carrying value of the investment is adjusted to market value and a loss is recognized. The cost of investments sold is determined using the average cost method.
Pooled endowment and similar funds are invested on the basis of a total return policy to provide income and to realize appreciation in investment values. Realized investment gains accumulated by these funds may be used to support operations. Such gains are allocated only to pooled funds which have a market value in excess of historical value.
Investment income included in operating revenues consists of income and realized gains and losses on investments of working capital and nonpooled endowment funds and the annual appropriation of income and realized gains for pooled endowment funds approved by the Board of Trustees. Any excess of income and realized gains earned over the appropriated amount for pooled endowment funds and income on investments held under split interest agreements are reported as nonoperating revenues.
(e) Deposits with Bond Trustees
Deposits with bond trustees consist of debt service funds and the unexpended proceeds of certain bonds payable. These funds are invested in short-term, highly liquid securities and will be used for construction of or payment of debt service on certain facilities.
(f) Investment in Plant Assets
Investments in plant assets are stated at cost or at estimated fair value if acquired by gift, less accumulated depreciation and amortization. Depreciation of buildings and equipment and amortization of leasehold improvements are computed using the straight-line method over the estimated useful lives of the assets. Land, library collections and certain historic buildings are not subject to depreciation.
Title to certain equipment purchased using funds provided by government granting or contracting agencies is vested in the University. Such equipment is included in investment in plant assets. Certain facilities and equipment used by the APL in connection with its performance under agreements with the United States Government are owned by the government. These facilities and equipment are not included in the balance sheet; however, the University is accountable to the government for them.
(g) Split Interest Agreements and Perpetual Trusts
The University's split interest agreements with donors consist primarily of irrevocable charitable remainder trusts for which the University serves as trustee. Assets held in these trusts are included in investments. Contribution revenues are recognized at the dates the trusts are established after recording liabilities for the present value of the estimated future payments to be made to the donors and/or other beneficiaries. The liabilities are adjusted during the term of the trusts for changes in the value of the assets, accretion of the discount and other changes in the estimates of future benefits.
The University is also the beneficiary of certain perpetual trusts held and administered by others. The present values of the estimated future cash receipts from the trusts are recognized as assets and contribution revenues at the dates the trusts are established. Distributions from the trusts are recorded as contributions and the carrying value of the assets is adjusted for changes in the estimates of future receipts.
(h) Refundable Advances from the U.S. Government
Funds provided by the United States Government under the Federal Perkins, Nursing and Health Professions Student Loan programs are loaned to qualified students and may be reloaned after collections. These funds are ultimately refundable to the government and are included in other long-term liabilities. These advances totaled approximately $25,075,000 and $24,127,000 at June 30, 1995 and 1994, respectively.
(i) Functional Expenses
Costs related to the operation and maintenance of physical plant, including depreciation of plant assets, are allocated to program and supporting activities based upon periodic inventories of facilities.
(j) Insurance
The University, together with certain other institutions, has formed captive insurance companies which arrange and provide professional liability, general liability and property damage insurance for their shareholders. Defined portions of claims paid by these companies are self-insured. The University's annual payments to the companies for insurance coverage are based on actuarial studies and are charged to expenses.
(k) Agreements with Affiliated Institutions
The University has separate administrative agreements for the exchange of services with The Johns Hopkins Hospital and certain other medical and educational institutions. Costs incurred by the University in providing services to these institutions and the related reimbursements are reported as unrestricted expenses and revenues, respectively, in the appropriate functional and source classifications. Costs incurred by the University for services provided by these institutions are reported as expenses in the appropriate functional classifications.
(l) Financial Instruments
Fair values of financial instruments approximate their carrying value in the financial statements, except for investments and indebtedness for which fair value information is provided in notes 5 and 7, respectively.
The University's external investment managers are authorized to use specified derivative financial instruments in managing the assets under their control, subject to restrictions and limitations adopted by the Board of Trustees. Futures contracts, which are commitments to buy or sell designated financial instruments at a future date for a specified price, may be used to adjust asset allocation, neutralize options in securities or construct a more efficient portfolio. The managers have made limited use of exchange-traded interest rate futures contracts. Margin requirements are met in cash; however, the managers settle their positions on a net basis and, accordingly, the cash requirements are substantially less than the contract amounts. Forward currency contracts, which are agreements to exchange designated currencies at a future date at a specified rate, may be used to hedge currency exchange risk associated with investments in fixed-income securities denominated in foreign currencies and investments in equity securities traded in foreign markets. The managers settle these contracts on a net basis and, accordingly, the cash requirements are substantially less than the contract amounts. Changes in the market value of the futures and forward currency contracts are included in investment income and were not significant in 1995 and 1994.
(m) Sponsored Projects
Revenues under grants, contracts and similar agreements with sponsoring organizations are recognized as expenditures are incurred for agreement purposes. These revenues include recoveries of indirect costs which are generally determined as a negotiated or agreed-upon percentage of direct costs, with certain exclusions. Indirect cost recovery revenues for the academic and support divisions of the University were $117,886,000 in 1995 and $110,517,000 in 1994.
In accordance with an agreement between the United States Government and the University, the APL has been designated a national resource. Under the agreement, if the University should determine that it can no longer sponsor the APL or the Secretary of the Navy should determine that the Navy can no longer contract with the University with respect to the APL, the University will establish a charitable trust to provide for the continued availability of the APL. The trust would be administered by five trustees and the corpus would consist of the University s interest in the APL facilities, including land to the extent necessary, and the balances in the University's APL stabilization, contingency and research fund on the date the trust is established, less certain costs. Upon termination of the trust, the corpus, in whole or in part, would be returned to and held and used by the University for such educational or research purposes and in such manner as the trustees and University shall agree.
The APL stabilization, contingency and research fund is included in unrestricted net assets and was approximately $148,850,000 and $147,285,000 at June 30, 1995 and 1994, respectively, including net investments in property and equipment of $66,164,000 and $70,127,000, respectively. At June 30, 1995, APL purchase and subcontract commitments were approximately $39,000,000.
| 1995 | 1994 | |
| Reimbursement of costs incurred under grants and contracts, primarily APL | $110,401 | 69,051 |
| Affiliated institutions, primarily Johns Hopkins Hospital | 13,783 | 6,531 |
| Students and others | 10,293 | 17,525 |
| Subtotal | 134,477 | 93,107 |
| Less allowance for doubtful accounts | 533 | 628 |
| Subtotal | 133,944 | 92,479 |
| Medical services to patients, less allowances of $43,500 in 1995 and $33,700 in 1994 | 43,400 | 38,000 |
| Total | $177,344 | 130,479 |
| 1995 | 1994 | |
| Unconditional promises expected to be collected in: | ||
| Less than one year | $7,826 | 2,178 |
| One year to five years | 51,547 | 50,693 |
| Over five years | 106,885 | 33,027 |
| Subtotal | 166,258 | 85,898 |
| Less unamortized discount and allowance for uncollectible accounts | 80,158 | 35,054 |
| Total | $86,100 | 50,844 |
At June 30, 1995, the University had also received bequest intentions of approximately $64,000,000 and certain other conditional promises to give. These intentions and conditional promises to give are not recognized as assets and, if they are received, they will generally be restricted for specific purposes stipulated by the donors, primarily endowments for faculty support, scholarships or general operating support of a particular department or division of the University.
| Carrying value | Market value | |
| Cash and short-term investments | $89,411 | 89,411 |
| Debt securities | 436,885 | 433,441 |
| Common and preferred stocks | 334,235 | 382,737 |
| Limited partnership and similar interests | 41,898 | 82,748 |
| Mortgages and notes receivable and other investments | 85,931 | 84,902 |
| Total | $988,360 | 1,073,239 |
Investments are summarized as follows at June 30, 1994 (in thousands):
| Carrying value | Market value | |
| Cash and short-term investments | $73,172 | 73,172 |
| Debt securities | 427,065 | 419,217 |
| Common and preferred stocks | 291,434 | 313,543 |
| Limited partnership and similar interests | 52,518 | 84,648 |
| Mortgages and notes receivable and other investments | 84,684 | 84,041 |
| Total | $928,873 | 974,621 |
The market values of investments are generally determined based on quoted market prices or estimated fair values provided by external investment managers or other sources. In the limited cases where such values are not available, carrying value is used as an estimate of market value.
At June 30, 1995 and 1994, assets of endowment and similar funds, including cash and cash equivalents and investments, amounted to $746,356,000 and $702,893,000, respectively, at cost and $838,220,000 and $746,777,000, respectively, at market. Certain assets of endowment and similar funds are combined in a common investment pool known as the Endowment Investment Pool (EIP). Each individual fund purchases or disposes of shares on the basis of the market value per share at the end of the quarter during which the transaction takes place. At June 30, 1995 and 1994, assets of the EIP, including cash and cash equivalents and investments, amounted to $733,070,000 and $651,678,000, respectively, at cost and $761,700,000 and $698,428,000, respectively, at market. Net investment income of the EIP was $27,433,000 in 1995 and $29,305,000 in 1994, and the realized net gains on security transactions were $7,291,000 in 1995 and $11,854,000 in 1994.
At June 30, 1995 and 1994, other investments include $60,186,000 and $55,675,000, respectively, of investments held by the University under deferred compensation agreements. Such amounts approximate the University's related liability to employees which is included in other long-term liabilities. At June 30, 1995, investments having a market value of $6,724,000 were pledged as security for the payment of unemployment claims and investments having market values of $7,999,000 and $3,094,000, respectively, were pledged as security for certain bonds and notes payable and for certain indebtedness of Johns Hopkins Hospital. At June 30, 1995, commitments for purchases of investments were approximately $34,000,000.
| 1995 | 1994 | |
| Land | $34,312 | 34,312 |
| Land improvements | 14,762 | 14,752 |
| Buildings and leasehold improvements | 776,610 | 762,972 |
| Equipment | 317,802 | 315,777 |
| Library collections | 78,116 | 71,692 |
| Construction in progress | 13,841 | 10,208 |
| Subtotal | 1,235,443 | 1,209,713 |
| Less accumulated depreciation and amortization | 489,020 | 451,678 |
| Total | $746,423 | 758,035 |
The University is obligated with respect to the following issues of bonds payable at June 30 (in thousands):
| 1995 | 1994 | |
| Maryland Health and Higher Educational Facilities Authority (MHHEFA) issues: | ||
| Revenue Bonds of 1979, 5.40% to 6.40%, due January 2009 | $5,450 | 5,850 |
| Revenue Bonds of 1981, 59% of prime interest rate, due October 1996 | 517 | 865 |
| Revenue Bonds of 1982, 59% of prime interest rate, due July 1997 | 1,644 | 2,327 |
| Revenue Bonds of 1983, 6.00% to 9.88%, due July 2013, net of unamortized discount of $2,144 and $2,270 | 29,880 | 30,410 |
| Revenue Bonds of 1985 (APL/STScI Project), 67.22% of prime interest rate, due October 2000 | 4,813 | 5,615 |
| Revenue Bonds of 1985A, 6%, due July 2015, net of unamortized discount of $2,660 and $2,743 | 8,000 | 7,917 |
| Revenue Bonds of 1985, 73.32% of prime interest rate, due January 2001 | 5,500 | 6,500 |
| Refunding Revenue Bonds of 1988, 5.30% to 7.50%, due July 2020, net of unamortized discount of $714 and $727 | 202,211 | 206,553 |
| Subtotal | 258,015 | 266,037 |
| Other issue -- Fifth Off-Street Parking Serial Bonds, Series A, 4.26%, due October 2009 | 248 | 269 |
| Total bonds payable | $258,263 | 266,306 |
The Revenue Bonds of 1979 are secured under a collateral security agreement which provides for a security interest in certain investment securities and requires that the market value of such securities exceed a specified level. At June 30, 1995, investment securities with a market value of $6,967,000 were held by the trustee under the agreement. The Revenue Bonds of 1981 and 1982 and the Fifth Off-Street Parking Serial Bonds are secured under loan agreements which provide for mortgages on certain of the University's property and equipment. The Revenue Bonds of 1983, 1985 (APL/STScI Project), 1985A, 1985 and 1988 are unsecured general obligations of the University. The loan agreements relating to the Revenue Bonds of 1983 and 1985A provide for limitations on the amount of indebtedness the University may incur.
The Refunding Revenue Bonds of 1988 were issued for the purpose of advance funding portions of the Revenue Bonds of 1983 and 1985A. The net proceeds were irrevocably placed in trust pursuant to escrow agreements and used to purchase government securities which are payable as to principal and interest at such times and in such amounts as to pay all principal and interest on the refunded portions of the Revenue Bonds of 1983 and 1985A. Accordingly, such portions of those Revenue Bonds are considered to have been extinguished and neither the indebtedness ($178,910,000 at June 30, 1995) nor the irrevocable trusts are included in the balance sheet.
Notes Payable
The University is obligated with respect to the following notes payable at June 30 (in thousands):
| 1995 | 1994 | |
| MHHEFA note due February 2001 | $1,110 | 1,305 |
| MHHEFA note due November 2015 | 57,274 | 58,497 |
| MHHEFA note due February 2025 | 15,532 | 8,187 |
| MHHEFA note due November 2020 | 19,499 | 19,768 |
| Note due June 2002, 10% | 8,961 | 9,819 |
| Note due December 2002, 7.91% | 12,270 | 12,390 |
| Note due July 2004, 3% (government subsidized effective rate) | 757 | 808 |
| Note due January 2012, 10% | -- | 59 |
| Note due June 2012, 8.90% | 3,039 | 3,115 |
| Note due December 2019, 8.88% | 85,396 | 86,339 |
| Total notes payable | $203,838 | 200,287 |
The MHHEFA notes are part of a pooled loan program issue of MHHEFA. The notes are unsecured general obligations of the University and bear interest at a variable rate (4.79% at June 30, 1995). Under terms of the loan agreements, the University may be required to provide security for the loans in certain circumstances.
The notes due June 2002, December 2002 and June 2012 are unsecured general obligations of the University. Under terms of the related loan agreements, the University may be required to provide security for the loans in certain circumstances. The note due July 2004 is secured by mortgages on certain of the University's property and a collateral account with a trustee in which investment securities having a market value of $1,032,000 at June 30, 1995 have been deposited. The note due December 2019 is secured by certain of the University's property.
The aggregate annual maturities of the bonds and notes payable (based on principal outstanding at June 30, 1995) for the five years subsequent to June 30, 1995 are as follows: 1996, $13,041,000; 1997, $13,543,000; 1998, $14,411,000; 1999, $13,272,000; and 2000, $14,406,000.
Total interest costs incurred on indebtedness were $32,919,000 in 1995 and $32,738,000 in 1994, of which $102,000 was capitalized in 1994.
The estimated fair value of the University's indebtedness is determined based on quoted market prices for publicly-traded issues and on the discounted future cash payments to be made for other issues. The discount rates used approximate current market rates for loans or groups of loans with similar maturities and credit quality. The carrying amount and estimated fair value of the University's indebtedness are summarized as follows at June 30 (in thousands):
| 1995 Carrying Amount | 1995 Estimated Fair Value | 1994 Carrying Amount | 1994 Estimated Fair Value | |
| Variable rate loans | $105,889 | 105,889 | 103,063 | 103,063 |
| Fixed rate loans | 356,212 | 394,828 | 363,530 | 388,911 |
| Total | $462,101 | 500,717 | 466,593 | 491,974 |
Fair value estimates are made at a specific point in time, are subjective in nature and involve uncertainties and matters of judgment. The University is not required to settle its debt obligations at fair value and settlement is not possible in most cases because of the terms under which the debt was issued and legal limitations on refunding tax-exempt debt.
Unrestricted net assets consist of the following at June 30 (in thousands):
| 1995 | 1994 | |
| Net investment in property and equipment, excluding APL | $207,932 | 205,582 |
| APL stabilization, contingency and research fund | 148,850 | 147,285 |
| Funds designated for divisional and departmental support: | ||
| Realized gains on endowment and similar funds | 259,230 | 269,181 |
| Funds functioning as endowment funds | 142,043 | 135,387 |
| Other gifts and income | 173,499 | 155,150 |
| Student loan funds | 9,179 | 8,375 |
| Total | $940,733 | 920,960 |
Temporarily restricted net assets consist of the following at June 30 (in thousands):
| 1995 | 1994 | |
| Contributions for instruction, research and divisional support | $56,442 | 45,721 | Split interest agreements | 13,053 | 11,628 | Term endowment funds | 345 | 336 | Land subject to time and purpose restrictions | 13,188 | 13,188 |
| Total | $83,028 | 70,873 |
Permanently restricted net assets consist of the following at June 30 (in thousands):
| 1995 | 1994 | |
| Perpetual endowment funds | $335,747 | 257,025 |
| Interests in perpetual trusts | 27,118 | 25,709 |
| Split interest agreements | 11,849 | 10,122 |
| Total | $374,714 | 292,856 |
The Hospital is a member of Johns Hopkins Health System Corporation (JHHS) and is incorporated, governed and operated separately from the University; however, the University and Hospital maintain a close relationship and share facilities and provide services to each other in order to fulfill more effectively their respective corporate purposes.
The sharing of facilities and services is negotiated annually and set forth in a Joint Administrative Agreement (JAA). Costs charged to the Hospital under the JAA, related primarily to the provision of professional medical services by the University, aggregated approximately $39,800,000 in 1995 and $34,600,000 in 1994. Costs charged to the University under the JAA, related primarily to rental of Hospital facilities under a renewable one- year lease, aggregated approximately $29,600,000 in 1995 and $28,300,000 in 1994.
Dome Corporation (Dome)
Dome is a for-profit, corporate joint venture of the University and JHHS which provides property management and development and certain other services to its owners and others. Costs charged to the University by Dome, related primarily to property rentals and management services, aggregated approximately $10,400,000 in 1995 and $10,500,000 in 1994. The University has guaranteed payment of up to $2,500,000 of debt obligations Dome may incur under terms of a credit enhancement agreement relating to the financing of certain properties and, together with JHHS, has agreed to provide Dome with funds required, if any, to meet its obligations under the agreement.
The University has a retiree benefits plan that provides postretirement medical benefits to employees who meet specified minimum age and service requirements at the time they retire. The University pays a portion of the cost of participants medical insurance coverage. The University's portion of the cost for an individual participant depends on various factors, including the age, years of service and time of retirement or retirement eligibility of the participant. The University has established a trust fund for its retiree benefits plan and intends to make contributions to the fund approximately equal to the annual net postretirement benefit cost, including amortization of the transition obligation over a period of 20 years.
The postretirement benefit cost for 1995 and 1994 includes the following components (in thousands):
| 1995 | 1994 | |
| Service cost | $1,995 | 1,974 |
| Interest cost on accumulated postretirement benefit obligation | 5,587 | 4,810 |
| Amortization of transition obligation | 3,137 | 3,137 |
| Actual return on plan assets | (639) | (111) |
| Other, net | 456 | (82) |
| Total | $10,536 | 9,728 |
The status of the University's postretirement benefit plan is summarized as follows at June 30 (in thousands):
| 1995 | 1994 | |
| Accumulated postretirement benefit obligation | ||
| Retirees and beneficiaries | $45,727 | 36,824 |
| Other fully eligible participants | 14,697 | 15,955 |
| Other active participants | 17,018 | 14,369 |
| Subtotal | 77,442 | 67,148 |
| Plan assets at fair value | (11,156) | (3,030) |
| Unrecognized net loss | (4,629) | (619) |
| Unrecognized prior service cost | (1,490) | -- |
| Unrecognized transition obligation | (56,452) | (59,589) |
| Accrued postretirement benefit cost | $3,715 | 3,910 |
The transition obligation was established at July 1, 1993 and is being amortized to postretirement benefit cost over 20 years. The discount rates used to calculate the accumulated postretirement benefit obligation were 7.75 % at June 30, 1995 and 8.25% at June 30, 1994. The trend rates for growth in health care costs used in the calculation for 1995 were 11% - 14% for 1996 for participants under age 65 and 9.5% for 1996 for those over 65; these growth rates were assumed to decrease gradually to 6%-7% in 2003 and to remain at those levels thereafter. The health care cost trend rate assumption has a significant effect on the postretirement benefit cost and obligation. An increase of 1% in the assumed annual health care cost trend rates would increase the aggregate service and interest cost components of postretirement benefit cost for 1995 by approximately $925,000 and increase the reported accumulated postretirement benefit obligation at June 30, 1995 by approximately $8,300,000. The plan assets consist primarily of investments in mutual funds managed by an independent investment management organization.
The University leases certain other facilities used in its academic and research operations under long-term operating leases expiring at various dates to 2014, subject to renewal options in certain cases. Certain of these facilities are leased from Dome and other affiliated organizations.
The aggregate annual minimum rents to be paid to the expiration of the initial terms of these leases are as follows at June 30, 1995 (in thousands):
| Affiliates | Others | Total | |
| 1996 | $9,994 | 4,012 | 14,006 |
| 1997 | 7,950 | 3,621 | 11,571 |
| 1998 | 7,986 | 3,290 | 11,276 |
| 1999 | 7,887 | 2,792 | 10,679 |
| 2000 | 7,941 | 1,737 | 9,678 |
| After 2000 | 83,644 | 8,221 | 91,865 |
| Total | $125,402 | 23,673 | 149,075 |
At June 30, 1995, unexpended research and training awards committed to the University by sponsoring agencies (exclusive of contracts at APL) were approximately $269,500,000. These awards are not recognized as assets, but they will be collected as expenditures are made by the University in accordance with the related agreements, which typically have a term of one year.
Amounts received and expended by the University under various federal and state programs are subject to audit by governmental agencies. In the opinion of management, audit adjustments, if any, will not have a significant effect on the financial position of the University.
The University is a party to various litigation and other claims in the ordinary course of business. In the opinion of management, appropriate provision has been made for possible losses and the ultimate resolution of these matters will not have a significant effect on the financial position of the University.
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