Town MeetingTown Meeting

2005 / 2006 Budget2005 / 2006 BudgetJune 2005June 2005

American University of BeirutAmerican University of Beirut

A Year of ProgressA Year of Progress Balanced Operating Results for last three years Balanced Operating Results for last three years

and Balanced Operating Budget for 2005/06and Balanced Operating Budget for 2005/06 Balanced Capital Budget that supports Balanced Capital Budget that supports

significant new construction and continued significant new construction and continued investment in academics and medicineinvestment in academics and medicine

Continuing Revenue growth at the AUBMCContinuing Revenue growth at the AUBMC Inception of Strategic Planning Initiative Inception of Strategic Planning Initiative

Hard RealitiesHard Realities Investment draw is declining in 04/05 & 05/06Investment draw is declining in 04/05 & 05/06 Donor support for operations ( non-restricted funds) has Donor support for operations ( non-restricted funds) has

declined declined Rising fuel costsRising fuel costs Lebanese economy remains fragile and continues to suffer Lebanese economy remains fragile and continues to suffer

from slow growthfrom slow growth Substantial Government receivablesSubstantial Government receivables

Oil PricesOil Prices

32.9

58.2

49.4

71.2

85.1

46.9

0

10

20

30

40

50

60

70

80

90

Jan-04

Feb-04

Mar-04

Apr-04

May-04

Jun-04

Jul-04

Aug-04

Sep-04

Oct-04

Nov-04

Dec-04

Jan-05

Feb-05

Mar-05

Apr-05

May-05

US

$

$/barrel - Int

$/barrel - Local

Challenges AheadChallenges Ahead Stable enrollment Stable enrollment Better management of student Better management of student

enrollment with focus on quality and enrollment with focus on quality and diversitydiversity

PhD programs on the horizonPhD programs on the horizon Operating costs of new student facilitiesOperating costs of new student facilities Maintaining faculty strengthMaintaining faculty strength Continued renewal of AUB’s existing Continued renewal of AUB’s existing

infrastructure infrastructure

What’s coming in 2005-06?What’s coming in 2005-06?

Major dislocations associated with Major dislocations associated with major building projectsmajor building projects

Outsourcing of HIPOutsourcing of HIP

Budget AssumptionsBudget Assumptions Stable overall student population

10% increase in fuel costs vs. 2004/2005 & 58% vs. 2003/2004

8% increase in Library periodical costs

6% increase in replacement and renewal

RecommendationsRecommendations

2.75 to 5.0% increase in tuition rate

Average of 3.7%

6% increase in student scholarships

2.0% pool for merit increases

Net Revenue GrowthNet Revenue GrowthUS$ Million

Tuition Rate Increase2.9

Increased Hospital Revenues 3.9

Sub-Total6.8

Less: US Aid, Investment Income (1.0)

Total 5.8

Operational InvestmentsOperational InvestmentsUS$ MillionUS$ Million

Deferred Maintenance/Project SupportDeferred Maintenance/Project Support 0.40.4

Selected Support InitiativesSelected Support Initiatives 1.21.2

Enhanced FacultyEnhanced Faculty 0.60.6

TotalTotal 2.22.2

Need Based Financial Support Need Based Financial Support ($000)($000)

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

1998 1999 2000 2001 2002 2003 2004 2005 2006

Loans

Scholarships

Faculty InvestmentFaculty Investment

Full-time Faculty *Full-time Faculty * 01/0201/02 02/0302/03 03/0403/04 04/0504/05 05/0605/06

ProfessorProfessor9090 105105 118118 133133 132132

Associate ProfessorAssociate Professor 133133 130130 116116 107107 111111

Assistant ProfessorAssistant Professor 118118 121121 151151 161161 170170

TotalTotal 341341 356356 385385 401401 413413

* Including visiting academic staff and Medicine

Cost CreepCost CreepUS$ MillionUS$ Million

2.0% Merit Pool2.0% Merit Pool 1.31.3

Benefit costs & SubsidiesBenefit costs & Subsidies 0.50.5

FuelFuel 0.60.6

PeriodicalsPeriodicals 0.30.3

Supply CostsSupply Costs 0.20.2

Renewal and ReplacementRenewal and Replacement 0.50.5

OtherOther 0.20.2

TotalTotal 3.63.6

Non-Instructional Support Non-Instructional Support Services CostsServices Costs

CostsCosts

($000)($000) 01/0201/02 02/0302/03 03/0403/04 04/0504/05 05/0605/06 ∆ ∆ PAPA%%

AcademicAcademic 7,9057,905 9,0509,050 9,4259,425 10,87010,870 12,58912,589 12.3%12.3%

Per StudentPer Student 1,2721,272 1,3611,361 1,3541,354 1,4961,496 1,7321,732 8.0%8.0%

Non-AcademicNon-Academic 14,15514,155 15,12115,121 14,05714,057 15,55115,551 16,00516,005 3.1%3.1%Per StudentPer Student 2,2772,277 2,2732,273 2,0192,019 2,1412,141 2,2022,202 -0.8%-0.8%

TotalTotal 22,06022,060 24,17124,171 23,48223,482 26,42126,421 28,59428,594 6.7%6.7%

Per StudentPer Student 3,5493,549 3,6343,634 3,3733,373 3,6103,610 3,9343,934 2.6%2.6%

Vital Capital ProjectsVital Capital Projects Total Project Cost (USD Millions)

Charles Hostler Student Center 21.9

Olayan School of Business 18.4

Irani Engineering Complex 11.5

Scientific Research Building 4.5

Medical Arts Facility (old OPD) 8.0

School of Nursing 2.8

Issam Fares Institute 4.3

Dar Al-Handasah Architecture Bldg 4.3

Bechtel Bldg 3.0

Engineering & Science Library 4.0

Total 82.7

05/06 Capital Budget05/06 Capital BudgetMajor ProjectsMajor Projects

US$ MillionsUS$ Millions

Major Capital ProjectsMajor Capital Projects 26.226.2

FacultiesFaculties 2.02.0

ASHA funded projectsASHA funded projects 1.81.8

AUBMCAUBMC 3.63.6

Other AUB ProjectsOther AUB Projects 5.75.7

Total 05/06 Capital Total 05/06 Capital 39.339.3

05/06 Capital Budget 05/06 Capital Budget FundingFunding

Renewal & ReplacementRenewal & Replacement $10.6 million $10.6 million

Related Investment IncomeRelated Investment Income $0.8 million $0.8 millionAUB FundingAUB Funding $11.4 million $11.4 million

Balance Carry Forward (Prev.Approved) $4.8 millionBalance Carry Forward (Prev.Approved) $4.8 millionLoan Financing Loan Financing $12.7 million $12.7 millionDonor FundingDonor Funding $8.6 million$8.6 millionAmerican Schools &American Schools &Hospitals Abroad (ASHA)Hospitals Abroad (ASHA) $1.8 million $1.8 million

TotalTotal $39.3 million $39.3 million

Long-Term ObjectivesLong-Term Objectives

Academic Excellence

Service Excellence

Financial Balance