Tower cranes were in use at The Yoh Football Center and West Edens Link – a new dormitory complex that will accommodate about 350 students

Duke had another good fiscal year in 2000-2001. As a group, our academic programs finished the year with additions to reserves, due to continued efforts by the schools and colleges to contain costs and increase revenues. These funds will finance capital projects and buffer future budget shortfalls. We continue to constrain administrative costs through redesign, increased collaboration, and investments in technology. We are also upgrading and replacing administrative systems to manage our resources more effectively and respond to the growing information demands of our complex organization.

Despite a weakening economy and lackluster investment markets, university net assets for the year ended June 30, 2001, remained essentially flat at $4.4 billion. After five years of total returns averaging 29.1 percent, the total return on Duke’s long-term investment portfolio was minus 4.6 percent. Excellent charitable support coupled with fiscal responsibility offset this loss.

The university’s financial strength and flexibility are reflected in our credit ratings. The university maintained its AA+/Aa1 bond ratings from Standard and Poor’s and Moody’s. Only a few universities enjoy higher ratings, and each has a level of endowment per student several times that of Duke.

.Duke faculty and staff have now moved into their attractive new Trinity Heights homes, designed by Duke to encourage employees to live next to East Campus and to add stability to the neighborhood.

The Duke University Health System posted a modest operating surplus before a write-down representing goodwill and other assets related to a hospital affiliation and provider operations. The write-down will reduce future annual amortization changes and better position the health system for positive operating results.

Duke’s relatively rapid ascent as one of the world’s leading research universities is all the more remarkable given its modest resource base. Nevertheless, preserving Duke’s academic quality will require substantial investments in teaching, research, and infrastructure.

I close this report by expressing yet again my warm appreciation to the countless people who in the past year contributed to Duke’s current strength and excellent prospects.

Tallman Trask III
EXECUTIVE VICE PRESIDENT