Financial Statements

Statement of Activity and Cash Flows *

In millions
For the year ended June 30, 2006 2005 2004
Revenues
MBA Tuition and Fees $73 $68 $65
Executive Education Tuition 81 76 71
Publishing 119 106 98
Endowment Distribution 71 62 56
Unrestricted Current-Use Gifts 12 8 8
Housing, Rents, and Other 9 9 8
Interest Income 3 2 3
Total Revenues $368 $331 $309
Expenses
Salaries and Benefits $167 $153 $139
Publishing and Printing 42 35 35
Space and Occupancy 38 35 31
Supplies and Equipment 15 15 24
Professional Services 22 16 14
Fellowships 19 17 15
University Assessments 10 10 10
Debt Service 4 4 4
Other Expense 28 22 22
Total Expenses $345 $307 $294

Cash From Operations

$23

$24

$15
Use of Endowment Gifts or Appreciation 14 13 13
Cash Before Capital Activities $37 $37 $28

Capital Expenses

$(49)

$(79)

$(54)
Use of Gifts for Capital Projects 12 49 28
Net Capital Expenses $(37) $(30) $(26)

New Borrowings

$38

$7

$7
Debt Principal Payments (4) (3) (8)
Other Activity (26) (15) (1)
Net Debt and Other $8 $(11) $(2)
       
Change in Unrestricted Reserves $8 $(4) $0
Beginning Balance, Unrestricted Reserves $52 $56 $56
Ending Balance, Unrestricted Reserves $60 $52 $56

* This statement presents a managerial view of Harvard Business School operations focused primarily on cash available for use. It is not intended to present the financial results in accordance with generally accepted accounting principles (GAAP). A presentation in accordance with GAAP would report higher operating revenues for gifts and endowment distribution and would include depreciation expense, yielding income from operations of $12 million in fiscal 2006. Cash flows, however, would be equivalent under GAAP.


Consolidated Balance Sheet

In millions
For the fiscal year ended June 30, 2006 2005 2004
Assets
Cash $25 $21 $14
Unrestricted Reserves 60 52 56
Receivables, Loans, and Other Assets 178 165 195
Invested Funds:
 Endowment Investments 2,190 1,924 1,603
 Current Fund Investments 18 17 43
 Interest in Trust Held by Others 132 124 120
Facilities, Net of Accumulated Depreciation 415 390 336
Total Assets $3,018 $2,693 $2,367
Liabilities
Deposits, Advances, and Other $39 $30 $30
Deferred Revenue 36 34 32
Other Debt Owed to University 25 - -
Building Debt 108 74 70
Total Liabilities $208 $138 $132
Composition of Net Assets
Unrestricted Reserves $60 $52 $56
Undistributed Income and Other 36 28 14
Pledge Balances 56 83 122
Student Loan Funds 11 11 11
Investment in Facilities 307 316 266
Endowment and Other Invested Funds 2,340 2,065 1,766
Total Assets Net of Liabilities $2,810 $2,555 $2,235