1 Orientation for New Advisory Board Members WPI Financial Overview October 23, 2008 Presented by Jeffrey Solomon, Executive Vice President/CFO

The FY09 Budget: Sources of Revenue Undergraduate tuition & fees $111.7M Less aid funded by operations ($38.4M) Less aid funded by endowment/restricted gifts ($5.1M) Net undergraduate tuition & fees $68.2M 55% Net graduate tuition 8.7M 7% Summer session tuition 2.5M 2% Subtotal net tuition & fees $79.4M 64% Endowment/investment income 17.5M 14% Auxiliary operations 16.4 M 13% Corporate/professional education 5.0 M 4% Indirect cost recovery 3.1 M 2% Unrestricted gifts 2.6 M 2% Other revenue 1.2 M 1% Total revenue$125.2 M 100% 2

Price of a WPI Education FY05FY06FY07FY08FY09 Tuition$29,550$30,990$32,818$34,300$35,850 Fees$180$400$500$530$540 Room & Board$9,164$9,460$9,960$10,410$10,880 Total$38,894$40,850$43,278$45,240$47,270 Percent Change5.0%5.9%4.5% 3

Tuition Discount 4 Freshmen All Students Impact of new enrollment management strategies has driven decline in tuition discounting while enrollment continues to grow.

Research Award Volume (In Millions) 5 $12.1 M $14.6 M

Corporate & Professional Education 6

7 Endowment-Market Value History In Millions

Endowment-Performance History 8

Endowment-Market Value Comparison In Millions 49Tufts$1,452,058 69BU$1,101,386 92RPI$812, Northeastern$679, RIT$656, WPI$404,745 9 Values as of June 30, 2007 per NACUBO. For private institutions to which a high number of WPI students apply for admittance.

Endowment-Asset Allocation 10 Public Equity 37% Public Equity 46% Hedge Funds 25% Real Assets 18% Fixed Income 12% Private Equity 8% Hedge Funds 21% Fixed Income 17% Real Assets 8% Private Equity 8%

The FY09 Budget: Uses of Funds Salaries & wages $60.1M 48% Health insurance 4.6M 4% Other benefits 11.0M 9% Subtotal compensation $75.7M 61% Other operating expenses 27.9M 22% Debt service/depreciation 13.1M 11% Utilities 6.7M 5% Contingency 1.8M 1% Total $125.2M 100% 11

Debt Outstanding (In Millions) 12

Change in Net Assets from Operating Activities (In Thousands) 13

Expendable Net Assets (In Millions) 14

Significant Financial Ratios Significant Ratio & Definition WPI Actual FY2000 WPI Actual FY2004 WPI Actual FY2006 WPI Actual FY2007 WPI Actual FY2008 Moody’s Large “A” FY Expendable Financial Resources to Debt (Measures availability of expendable net assets to cover long term debt) Expendable Financial Resources to Operations (Measures amount of time institution can cover expenses without relying on additional net assets from operations) Maximum Annual Debt Service to Operations (Measures debt affordability & other flexibility within operating budget) 5.8%8.0% 7.5%6.9%5.8% 4. Operating Margin (Indicates excess margin by which revenues cover operating expenses) 1.3%-4.9%3.3%1.2%0.6%5.2% 15

Major Strategic Planning Goals For FY 2009 – FY 2015 Promote WPI Plan and enhance quality of academic programs (Goals 1 & 2) Strengthen support for research & graduate education (Goal 3) Develop, renovate & adequately maintain campus facilities to support academic and campus life needs – refer to approved seven-year major capital plan (Goals 4 & 5) Promote WPI as a national university (Goal 6) Develop non-traditional sources of revenue as a means of strengthening WPI financially & keeping it affordable (Goal 7) Adequately fund capital campaign & improve alumni relations (Goal 8) 16

Approved Seven-Year Major Capital Plan In Priority Order ($ in Thousands) 17