Town Meeting 2006 / 2007 Budget June 2006 American University of Beirut

A Year of Progress Balanced Operating Results for last four years and Balanced Operating Budget for 2006/07 Balanced Operating Results for last four years and Balanced Operating Budget for 2006/07 Balanced Capital Budget that supports significant new construction and continued investment in academics and medicine Balanced Capital Budget that supports significant new construction and continued investment in academics and medicine Continuing Revenue growth at the AUBMC Continuing Revenue growth at the AUBMC Pooled Assets of $407 million as of April 30 Pooled Assets of $407 million as of April 30

Current Challenges Donor support for operations ( non-restricted funds) has not grown Donor support for operations ( non-restricted funds) has not grown Rising fuel costs Rising fuel costs Lebanese economy remains fragile and continues to suffer from slow growth Lebanese economy remains fragile and continues to suffer from slow growth Growing Government receivables Growing Government receivables Increasing Government Tax burden Increasing Government Tax burden

Oil Prices

Challenges Ahead Flat enrollment Flat enrollment PhD programs on the horizon PhD programs on the horizon Operating costs of new student facilities Operating costs of new student facilities Adding faculty strength Adding faculty strength Continued renewal of AUB’s existing infrastructure Continued renewal of AUB’s existing infrastructure

Budget Assumptions  Stable overall student population  7% increase in fuel costs vs. 2005/2006 & 26% vs. 2004/2005  11% increase in fuel and electricity consumption  11% increase in Library periodical costs

Tuition Rates Tuition Rates  Realigning tuition rates across all faculties  Fair and consistent approach to pricing  Unify tuition rates into three main categories: - Medicine - Professional (Business, Engineering) - Science & liberal arts

Tuition Rates Tuition Rates

Recommendations Recommendations  Rationalize the tuition rate structure over time Average of 4.3% next year  5.9% increase in student scholarships  2.0 – 4.0% pool for merit increases

Net Revenue Growth US$ Million Tuition Rate Increase3.1 Increased Hospital Revenues3.3 Sub-Total6.4 Add: US Aid, Investment Income 2.6 Total 9.0

Operational Investments US$ Million 0.7 Financial Aid 1.0 Hostler Center 0.7 Enhanced Faculty 0.4 Selected Support Initiatives 0.2 Scientific Research Bldg. 3.0Total

Need Based Financial Support ($000)

Faculty Investment 06/0705/0604/0503/0402/03 Full-time Faculty * Professor Associate Professor Assistant Professor Total * Including visiting academic staff and Medicine

Cost Creep US$ Million – 4.0 % Merit Pool 1.2 Benefit costs & Subsidies 1.0Fuel 0.3 Deferred Maintenance/Project Support 0.4Periodicals 0.3 Supply Costs 0.2 Provision for VAT increase 0.3Other 6.0Total

Non-Instructional Support Services Costs ∆ PA% 06/0705/0604/0503/0402/03Costs($000) 17.5%13,39611,39410,6599,4259,050Academic 17.8%1,8301,5541,4671,3541,361 Per Student 0.0%17,23217,27516,21014,05715,121Non-Academic 0.0%2,3542,3562,2312,0192, %30,62828,66926,86923,48224,171Total 7.0%4,1843,9103,6983,3733,634

Vital Capital Projects Total Project Cost (USD Millions)  Charles Hostler Student Center 23.1  Olayan School of Business 20.3  Irani Engineering Complex 14.1  Scientific Research Building 4.4  Medical Arts Facility (old OPD) 8.8  School of Nursing 3.1  Issam Fares Institute 4.7  Dar Al-Handasah Architecture Bldg 5.0  Bechtel Bldg 3.0  Engineering & Science Library 4.0  Cooling Plant 2.9 Total 93.4

06/07 Capital Budget Major Projects US$ Millions US$ Millions 23.1 Major Capital Projects 1.7Faculties 1.8 ASHA funded projects 3.1AUBMC 2.5 Other AUB Projects 32.2 Total 06/07 Capital Total 06/07 Capital

06/07 Capital Budget Funding Renewal & Replacement $11.3 million Related Investment Income $0.6 million AUB Funding $11.9 million Balance Carry Forward (pre approved) $10.0 million Loan Financing $2.2 million Donor Funding $6.3 million American Schools & Hospitals Abroad (ASHA) $1.8 million Total $32.2 million

Long-Term Objectives  Academic Excellence  Service Excellence  Financial Balance