2022 financial highlights

During the fiscal year, Troy University continued to encounter many of the operational challenges that carried over from the onset of the pandemic but has successfully adapted its operations to the circumstances and our efforts supported by the students, faculty and staff to overcome in this environment. A volatile economic horizon projected to last several years will put downward pressure on net tuition as inflation pressures continue to increase and labor shortages continue to prevail. The University has encountered additional financial challenges due to the decreasing number of high school graduates entering college. Nationally, college enrollment declined for a third straight year since the pandemic. However, I am pleased to report that the University’s financial position remains strong with an increase in net position for the last four years. This is a remarkable achievement considering this year was the fourth consecutive year of no increase in tuition. The University continues to strive to provide a high-quality education at an affordable price. A crucial element affecting the University’s future continues to be our funding relationship with the State of Alabama as supplemented by tuition revenue. The University’s strong financial position will provide some protection against future funding reductions or adverse economic conditions.

The University committed federal, state and institutional resources to enhance the safety of our campus and facilities by providing additional technology and by providing necessary financial support to students and programs especially impacted by the pandemic. Simultaneously, the University continued to make strategic investments in its people and physical capital that have been critical to advance the University’s goals of increased enrollment and retention. The University and many of its colleges and programs rank among the best in the nation — an external validation of our commitment to quality and the work of our faculty and students.

One of the critical factors in continuing the quality of the University’s academic programs is the development and renewal of capital assets. The University continues to implement its long-range plan to modernize its complement of older facilities, along with balanced investment in new construction. This strategy addresses the University’s growth needs and the continuing effects of technology related to teaching, recruiting and service to students.

Capital asset additions primarily represent replacement, renovation and new construction of academic, administrative and athletic facilities, as well as significant investments in equipment, including information technology. Capital asset additions continue to increase with plans to build two new academic buildings and renovate an athletic facility. The total cost of those additions is more than $64 million. Other facilities planned, phased in infrastructure improvements include four dormitories totaling $15 million. These capital asset additions were primarily funded with reserves for renewal and replacement, debt proceeds and capital grants and contracts.

Good stewardship of our resources continues to be a primary focus. For the past three years, actual operational revenue has exceeded operating expenses providing growth to our reserves. In addition, the University completed the sale of its Phenix City old campus buildings that generated $3 million and eliminated the debt on the current river-front building. Undeveloped land contiguous to the Dothan Campus was sold for $2.4 million, which will facilitate growth in the community through the development of new homes in the area.

The following report summarizes the financial activities at Troy University, including our component entities and direct support organizations. These impressive results were achieved during unprecedented challenges and result from the extraordinary commitment and dedication of the strong leadership of our Board of Trustees, Chancellor Hawkins, our administration and the entire University community. I am pleased to present this annual financial report for Troy University for the year ended Sept. 30, 2022.

James M. Bookout, Ed.D., CPA, CITP Senior Vice Chancellor, Financial Affairs and Online Education

HISTORY OF ASSET & DEFERRED OUTFLOWS GROWTH IN MILLIONS

HISTORY OF ASSET & DEFERRED OUTFLOW GROWTH IN MILLIONS

History of total asset growth

TROY continues to maintain and protect its strong financial position. This financial health, as reflected in total asset growth, is a result of prudent utilization of financial resources, including careful cost controls, conservative utilization of debt and adherence to a long-range capital plan for the maintenance and replacement of campus facilities.

Revenue by source

One of TROY’s strengths is the diverse stream of revenue that supplements tuition and fee revenue, including private support from foundations and corporations, along with sponsored programs, state appropriations, investment income and auxiliary services. TROY’s tuition rates remain competitive with peer institutions, demonstrating a commitment to provide high-quality higher education at an affordable price.

Expense by function

In addition to revenue diversification, Troy University makes cost containment an ongoing priority. This is necessary as the University continues to face significant financial pressures, particularly in the areas of compensation, employee benefits, energy, technology and ongoing maintenance of facilities and infrastructure. Troy University is committed to recruiting and retaining outstanding faculty and staff. Scholarships also continue to be a significant commitment for the University as it focuses efforts on the recruitment and retention of students.

Revenue By Source

Expense By Function