Y

Financial Report
2022–2023
Yale University
 Yale University Financial Report 2022–2023

1 Highlights
2 Message from the President
4 Message from the Senior Vice President for Operations and the Vice President for Finance
6 Financial Results
6 Overview
10 Operating Revenue
13 Operating Expenses
15 Physical Capital
17 Endowment
19 Management’s Responsibility for Financial Statements
20 Report of Independent Auditors
22 Consolidated Statements of Financial Position
23 Consolidated Statement of Activities
24 Consolidated Statements of Cash Flows
25 Notes to Consolidated Financial Statements
60 The President and Fellows of Yale University
60 The Officers of Yale University

Front cover (from top left, moving clockwise)

Brad Erkkila, facility manager for the Yale Analytical and Stable Isotope Center, with the recently
installed Mini Carbon Dating System (micadas). Photo: Andrew Hurley
Kline Biology Tower. Photo: Lee Faulkner
Anjelica Gonzalez, associate professor of biomedical engineering, and 4th year graduate student
Rita Matta working in the lab. Photo: Matt Lavitt
Examining plant specimens. Photo: Michael Marsland
Back cover (from far left, moving clockwise)
Yale Medicine, Pediatrics. (pictured: Nina N. Brodsky) Photo: Allie Barton
Materials research in the university cleanroom. Photo: Dan Renzetti
Students at the Yale Center for Engineering, Innovation, and Design. Photo: Michael Marsland.
Amin Karbasi, associate professor of electrical engineering, computer science, and statistics and
data science, took part in a “Faculty Research Blitz” at the launch event. Photo: Dariusz Terepka

Copyright ©2023 Yale University

Highlights

Fiscal Years

Five-Year Financial Overview ($ in millions) 2023 2022 2021 2020 2019

Net Operating Results - Management View $ 147 $ 167 $ 276 $ 125 $ 87

Financial Position Highlights:

Total assets $ 54,426 $ 54,719 $ 56,223 $ 44,696 $ 44,428
Total liabilities 9,698 10,025 11,931 12,964 12,186
Total net assets $ 44,728 $ 44,694 $ 44,292 $ 31,732 $ 32,242

Endowment:
Net investments, at fair value $ 40,504 $ 41,122 $ 41,913 $ 30,957 $ 30,295
Total return on investments 1.8% 0.8% 40.2% 6.8% 5.7%
Spending from endowment 4.3% 3.8% 5.0% 4.8% 4.6%

Facilities:
Land, buildings and equipment, net
of accumulated depreciation $ 5,748 $ 5,598 $ 5,508 $ 5,438 $ 5,251
Disbursements for building projects $ 448 $ 378 $ 380 $ 437 $ 447

Debt $ 5,138 $ 5,164 $ 5,200 $ 5,242 $ 3,775

Statement of Activities Highlights:

Operating revenues $ 5,104 $ 4,810 $ 4,579 $ 4,247 $ 4,105
Operating expenses 4,936 4,540 4,201 4,044 3,835
Increase in net assets from operating activities $ 168 $ 270 $ 378 $ 203 $ 270

Five-Year Enrollment Statistics 2023 2022 2021 2020 2019

First-Year Enrollment Class of: '26 '25 '24 '23 '22

First-Year applications 50,060 47,240 35,220 36,844 35,306
First-Year admitted 2,289 2,509 2,299 2,269 2,229
Admissions rate 4.6% 5.3% 6.5% 6.2% 6.3%
First-Year enrollment 1,554 1,786 1,264 1,550 1,573
Yield 67.9% 71.2% 55.0% 68.3% 70.6%

Total Enrollment:
Yale College 6,645 6,536 4,703 6,092 5,964
Graduate and professional schools 8,161 8,031 7,357 7,517 7,469
Total 14,806 14,567 12,060 13,609 13,433
Sources:
Yale College Term Bill and Financial Aid:
Yale College term bill $ 80,700 $ 77,750 $ 74,900 $ 72,100 $ 69,430
Average grant award for students receiving aid $ 64,686 $ 59,944 $ 58,340 $ 59,205 $ 57,633

1
2 Yale University Financial Report 2022-2023
As we make our physical campus ever more efficient, beautiful, and conducive to innovative teaching and
research, we are pleased, too, to help accelerate the renaissance in our home city. In December, I announced
the creation of a new scholarship program, the Pennington Fellowship. This new initiative—separate from
and incremental to New Haven Promise—supports New Haven public school students who choose to
attend HBCUs; strengthens our connections with these institutions; and addresses, in part, historical
disparities in educational opportunities. Yale and New Haven officials also launched the Center for Inclusive
Growth, which underscores our commitment to bringing the university’s scholarly strengths to bear on
developing and implementing strategies for growing the city’s economy to benefit every neighborhood. In
addition, Yale School of Medicine and Yale New Haven Health System are working to strengthen their
preexisting alliances for excellence in education, research, and care.

Investments in New Haven complement the university’s campus-wide Belonging at Yale initiative for a
stronger, more inclusive community. In the past decade, Yale has more than doubled the enrollment of
first-generation and Pell-eligible undergraduates and significantly increased the matriculation of those who
are from historically underrepresented groups. There are approximately 500 more first-generation students
in Yale College today than in 2013, and a full 86 percent of Yale College students graduate debt-free.

To build on these signal advances in affordability and accessibility, we announced this year the historic goal
of raising $1.2 billion for student support. As increasing access to Yale is vital to the future of this university
and our contributions to the world, this initiative focuses on new giving for scholarships and fellowships
across the university. I am pleased to report meaningful progress to date: In February, Yale School of
Medicine announced a $25 million gift from The Starr Foundation toward medical student financial aid
that has enabled the school to reduce expected student borrowing from $15,000 to $10,000 by replacing
the loan with an additional $5,000 in scholarship. Medical school students with demonstrated financial
need will be able to graduate with only $40,000 of debt, compared to $200,000 nationally. In that same
month, Yale Law School expanded its Hurst Horizon Scholarship Program, significantly increasing the
number of students (from 51 to 80-90 students per year) who will receive financial aid for the cost of
tuition, health insurance, and fees. Beginning in 2022-2023, Yale Divinity School is meeting the full
tuition need of all students receiving financial aid.

Of course, an altogether more excellent institution depends on excellent leadership. To advance this pursuit,
Yale has welcomed three new deans out of a total of sixteen as well as two vice presidents in fiscal year
2023—all of whom contribute critically to our university initiatives. Alongside this diverse group of leaders,
our support for field-defining faculty—from mentoring and development programs to initiatives that
improve faculty life—will reinforce and amplify the university’s iconic strengths to propel Yale for years to
come.

It is a privilege for me to present the 2022-2023 Financial Report, reflecting the dedicated efforts of so
many Yale faculty, staff, students, and alumni. To all those who have helped Yale to achieve transformative
outcomes together this year—indeed, over more than a decade in the presidency—I offer my enduring
gratitude.

Peter Salovey
President
Chris Argyris Professor of Psychology

3
Message from the Senior Vice President for Operations
and the Vice President for Finance

Financial Results

Yale finished the year ended June 30, 2023, with a surplus from operations on both a generally accepted
accounting principles (GAAP) and a Management View basis – the way Yale looks at financial information
for internal discussion and decision-making purposes (see page 6 for additional information). The
university generated a surplus from operations of $167 million on a GAAP basis and $147 million on a
Management View basis.

The university finished the year in a strong financial position, from both an operations and balance sheet
perspective, with $44.7 billion in net assets – a reflection of the university’s continuing financial strength.

Revenues and Expenses

Operating revenues continued to grow at a robust pace, increasing by 6.1% to $5.1 billion for the year.
Spending from the endowment, Yale’s largest source of operating revenue, increased by 11.7% over the
prior year to $1,752 million. Medical services income, the second largest source of operating revenue,
increased by 7.1% over the prior year to $1,422 million. Grant and contract income, the third largest source
of operating revenue, increased by 7.9% over the prior year to $1,038 million. Tuition, room and board,
net of financial aid, declined by 0.7% as the university continued to enhance its need-based scholarships to
increase the affordability of a Yale education to the broadest range of students. The increases in financial
aid more than offset increases in the number of students and term bill rates (the “sticker price” before
reductions from financial aid).

Operating expenses increased by 8.7% over the prior year. Personnel costs – salaries, wages, and benefits
– grew by 6.9%, which was largely attributable to increased headcount and salary and wage inflation, which
were partly offset by a 2.0% decrease in the cost of providing employee benefits. Other operating
expenditures increased by 13.1%, driven primarily by an increase in non-salary expenses resulting from
continued growth in on-campus activity after the pandemic as well as the inflationary environment.

Yale Endowment

The investment return generated by the Yale Endowment was 1.8% for the year, well less than the spending
from the endowment of 4.3% based on the market value at the beginning of the year. This caused the
market value of the Yale Endowment, net of spending, to decline by more than $600 million. This intentional
result – spending more than the endowment generated for the year – highlights the importance and efficacy
of the Endowment Spending Policy. Since investment returns can be highly volatile, the smoothing
component of the policy (explained more fully in Footnote 1d of the financial statements) guards against
drastic fluctuations in spending. Having a stable flow of endowment income – the university’s largest
source of revenue – is crucial to enabling the university to carry out its mission in a thoughtful, planful, and
effective way. The smoothing component helpfully moderates annual changes – up or down – to the
amount of support the endowment provides to the operating budget each year.

4 Yale University Financial Report 2022-2023

Capital Spending Highlights

Capital spending for the year totaled $448 million, an increase of 19% from the prior year, with
investments in a number of major projects. Work continued on the renovations to 100 College Street
which, at the time of writing this letter, is effectively complete. This space now houses the departments of
Neuroscience and Psychology, as well as the Wu Tsai Institute. The transformation of Kline Tower,
completed over the summer, reintroduced it as a new hub for several departments across the sciences and
the newly-formed Institute for Foundations of Data Science. Construction at the Peabody Museum, which
began in fall 2020, will conclude this year. The building – including a glass-ceilinged central gallery,
additional space for exhibitions, and a new education center – is slated for a grand reopening in 2024, once
reinstallation of displays and exhibits is finished. Significant investments also continued in an array of other
state-of-the-art facilities for the sciences. This multi-year initiative aims to revolutionize the university’s
facilities in these areas to accelerate science, reimagine engineering, and advance Yale’s historical strength
in science. These investments in the university’s physical assets are both exciting and crucial for advancing
the university’s mission in the years to come.

Strategic Alignment of Yale School of Medicine and Yale New Haven Health System

The Yale School of Medicine (YSM), which generates roughly half of the operating revenue for the
university, carries out research, teaching, and clinical care in close partnership with the affiliated Yale New
Haven Health System (YNHHS), which is a separate entity from the university. Together they form one
of the largest academic medical centers in the country. This year, YSM and YNHHS began meaningful
conversations and actions to foster greater strategic alignment and integration. Among other objectives, this
collaboration is intended to better align the clinical enterprises and clinical strategic plans, improve patient
access and experience, implement newly-established funds flow principles, and develop a comprehensive
payer strategy. There is much work still to be done, but by leveraging the strengths of both institutions,
this initiative will further enhance their collective impact on patient care, education, research, and growth.

Looking Ahead

Yale’s strong operating results and net asset position enable the university to continue to support its current
faculty, staff, students, and community while simultaneously investing in new areas to advance the
university’s strategic academic priorities.

We are grateful to all of the faculty, staff, students, alumni, friends, and members of the New Haven
community who make it possible for us to carry out the university’s mission. The shared commitment to
excellence is inspiring. We look forward to another year supporting Yale in its mission to improve the world
today and for future generations through outstanding research and scholarship, education, preservation,
and practice.

Jack F. Callahan, Jr. Stephen C. Murphy

Senior Vice President for Operations and Vice President for Finance and
Chief Operating Officer Chief Financial Officer

5
 •

6 Yale University Financial Report 2022-2023

7
8 Yale University Financial Report 2022-2023
7

9
10 Yale University Financial Report 2022-2023
11
12 Yale University Financial Report 2022-2023
13
14 Yale University Financial Report 2022-2023
15
16 Yale University Financial Report 2022-2023
17
18 Yale University Financial Report 2022-2023
Management’s Responsibility for Financial Statements

Management of the university is responsible for the integrity and reliability of the consolidated
financial statements. Management represents that, with respect to the university’s financial
information, the consolidated financial statements in this annual report have been prepared in
conformity with accounting principles generally accepted in the United States of America (“U.S.
GAAP”).

The accompanying consolidated financial statements have been audited by the university’s
independent auditors, PricewaterhouseCoopers LLP. Their audit opinion, on the following page,
expresses an informed judgment as to whether the consolidated financial statements, considered
in their entirety, present fairly, in conformity with GAAP, the consolidated financial position and
changes in net assets and cash flows.

The university maintains a system of internal controls over financial reporting, which is designed
to provide a reasonable assurance to the university’s management and the Yale board of trustees
regarding the preparation of reliable published financial statements. Such controls are maintained
by the establishment and communication of accounting and financial policies and procedures, by
the selection and training of qualified personnel, and by an internal audit program designed to
identify internal control weaknesses in order to permit management to take appropriate corrective
action on a timely basis. There are, however, inherent limitations in the effectiveness of any system
of internal control, including the possibility of human error and the circumvention of controls.
Accordingly, even an effective internal control system can provide only reasonable assurance with
respect to financial statement preparation. Furthermore, the effectiveness of the internal control
system can change with circumstances.

The Yale board of trustees, through its Audit Committee comprised of members not employed by
the university, are responsible for engaging the independent auditors and meeting with
management, internal auditors, and the independent auditors to independently assess whether
each is carrying out its responsibilities. Both the internal auditors and the independent auditors
have full and free access to the Audit Committee.

Stephen C. Murphy Shannon N. Smith

Vice President for Finance and University Controller and
Chief Financial Officer Chief Accounting Officer

19
 Report of Independent Auditors

To the President and Fellows of Yale University

Opinion

We have audited the accompanying consolidated financial statements of Yale University and its
subsidiaries (the “University”), which comprise the consolidated statements of financial position as of
June 30, 2023 and 2022, and the related consolidated statements of activities for the year ended June 30,
2023 and of cash flows for the years ended June 30, 2023 and 2022, including the related notes
(collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of the University as of June 30, 2023 and 2022, the changes in its net assets for the
year ended June 30, 2023, and its cash flows for the years ended June 30, 2023 and 2022 in accordance
with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of
America (US GAAS). Our responsibilities under those standards are further described in the Auditors’
Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are
required to be independent of the University and to meet our other ethical responsibilities, in accordance
with the relevant ethical requirements relating to our audit. We believe that the audit evidence w e have
obtained is sufficient and appropriate to provide a basis for our audit opinion.

Other Matter

We previously audited the consolidated statement of financial position as of June 30, 2022 and the related
consolidated statements of activities and of cash flows for the year then ended (the statement of activities
is not presented herein), and in our report dated October 21, 2022, we expressed an unmodified opinion
on those consolidated financial statements. In our opinion, the information set forth in the accompanying
summarized financial information for the year ended June 30, 2022 is consistent, in all material respects,
with the audited consolidated financial statements from which it has been derived.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in the United States of America,
and for the design, implementation, and maintenance of internal control relevant to the preparation and
fair presentation of consolidated financial statements that are free from material misstatement, whether
due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the University’s
ability to continue as a going concern for one year after the date the consolidated financial statements are
issued.

20 Yale University Financial Report 2022-2023

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’
report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will
always detect a material misstatement when it exists. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Misstatements are
considered material if there is a substantial likelihood that, individually or in the aggregate, they would
influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with US GAAS, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.
● Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements.
● Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the University’s internal control. Accordingly, no such opinion is
expressed.
● Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
consolidated financial statements.
● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the University’s ability to continue as a going concern for a
reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control-related
matters that we identified during the audit.

Other Information

Management is responsible for the other information included in the annual report. The other information
comprises the Yale University Financial Report 2022-2023, but does not include the consolidated financial
statements and our auditor’s report thereon. Our opinion on the consolidated financial statements does
not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and consider whether a material inconsistency exists between the other information and
the consolidated financial statements or the other information otherwise appears to be materially
misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the
other information exists, we are required to describe it in our report.

Boston, Massachusetts
October 27, 2023

21
Yale University Consolidated Statements of Financial Position
as of June 30, 2023 and 2022 ($ in thousands)

2023 2022
Assets:
Cash and cash equivalents $ 845,424 $ 712,614
Accounts receivable, net 410,200 405,683
Contributions receivable, net 960,379 1,020,493
Notes receivable 84,427 89,912
Investments, at fair value 45,679,156 46,472,072
Right of use assets 272,115 179,645
Other assets 425,957 240,814
Land, buildings and equipment, net of accumulated depreciation 5,747,983 5,598,069
Total assets $ 54,425,641 $ 54,719,302

Liabilities:
Accounts payable and accrued liabilities $ 609,528 $ 615,340
Advanced payments and other deposits 219,969 194,594
Lease liabilities 351,122 253,081
Other liabilities 1,219,944 1,368,728
Liabilities under split-interest agreements 132,280 130,816
Bonds and notes payable 5,137,633 5,164,430
Liabilities associated with investments 2,027,204 2,298,288
Total liabilities $ 9,697,680 $ 10,025,277

Net Assets:
Net assets without donor restrictions: Yale University $ 9,140,807 $ 8,592,595
Net assets without donor restrictions: non-controlling interests 3,061 1,621
Total net assets without donor restrictions 9,143,868 8,594,216
Net assets with donor restrictions 35,584,093 36,099,809
Total net assets $ 44,727,961 $ 44,694,025

Total liabilities and net assets $ 54,425,641 $ 54,719,302

The accompanying notes are an integral part of these consolidated financial statements.
22 Yale University Financial Report 2022-2023
Yale University Consolidated Statement of Activities
for the year ended June 30, 2023 with summarized comparative totals for the year ended June 30, 2022 ($ in thousands)

Without Donor With Donor

Restrictions Restrictions 2023 2022
Operating
Revenues and releases:
Net tuition, room and board $ 458,307 $ - $ 458,307 $ 461,513
Grant and contract income, primarily for
research and training 1,038,268 - 1,038,268 962,088
Medical services income 1,421,914 - 1,421,914 1,327,268
Contributions 18,666 115,338 134,004 232,582
Allocation of endowment spending from
financial capital 497,194 1,255,181 1,752,375 1,568,442
Other investment income 74,580 7,331 81,911 69,731
Other income 216,895 92 216,987 188,495
Total revenues 3,725,824 1,377,942 5,103,766 4,810,119
Net assets released from restrictions 1,294,808 (1,294,808) - -
Total revenues and releases $ 5,020,632 $ 83,134 $ 5,103,766 $ 4,810,119

Expenses:
Salaries and wages $ 2,328,136 $ - $ 2,328,136 $ 2,114,898
Employee benefits 744,823 - 744,823 759,791
Depreciation, amortization and interest 441,202 - 441,202 407,795
Other operating expenditures 1,422,107 - 1,422,107 1,257,816
Total expenses 4,936,268 - 4,936,268 4,540,300
Increase in net assets from operating activities 84,364 83,134 167,498 269,819

Non-operating
Contributions 8,316 317,143 325,459 381,535
Total endowment return 74,969 683,715 758,684 265,880
Allocation of endowment spending to operations (311,275) (1,441,100) (1,752,375) (1,568,442)
Other investment income 197,955 740 198,695 501,857
Change in funding status of defined benefit plans 289,684 - 289,684 503,181
Other increases 37,433 7,418 44,851 47,369
Net assets released from restrictions 166,766 (166,766) - -
Increase (decrease) in net assets from non-operating activities 463,848 (598,850) (135,002) 131,380
Total increase (decrease) in net assets - Yale University 548,212 (515,716) 32,496 401,199
Change in non-controlling interests 1,440 - 1,440 842
Total increase (decrease) in net assets 549,652 (515,716) 33,936 402,041

Net assets, beginning of year 8,594,216 36,099,809 44,694,025 44,291,984

Net assets, end of year $ 9,143,868 $ 35,584,093 $ 44,727,961 $ 44,694,025

The accompanying notes are an integral part of these consolidated financial statements.
23
Yale University Consolidated Statements of Cash Flows
for the years ended June 30, 2023 and 2022 ($ in thousands)

2023 2022
Operating activities:
Change in net assets $ 33,936 $ 402,041
Adjustments to reconcile change in net assets to net cash
used in operating activities:
Depreciation and amortization 349,607 340,039
Realized and unrealized gain on other investments (169,278) (512,958)
Net endowment investment (gain) loss (319,868) 106,046
Change in non-controlling interests (1,440) (842)
Change in funding status of defined benefit plans (289,684) (503,181)
Non-operating contributions (325,459) (381,535)
Contributed securities (52,815) (118,421)
Proceeds from sale of donated securities 13,881 44,640
Other adjustments 25,891 (9,898)
Changes in assets and liabilities that (use) provide cash:
Accounts receivable (4,517) (7,709)
Contributions receivable 19,907 3,962
Other operating assets 84,364 (1,435)
Accounts payable and accrued expenses (22,142) (191,042)
Advances under grants and contracts and other deposits 25,375 20,116
Other liabilities (112,029) 94,516
Net cash used in operating activities (744,271) (715,661)

Investing activities:
Student loans repaid 12,380 12,021
Student loans granted (6,946) (5,578)
Purchases related to capitalized software costs and other assets (44,727) (26,560)
Proceeds from sales and maturities of investments 7,895,758 10,593,403
Purchases of investments (6,853,674) (10,189,985)
Purchases of land, buildings and equipment (471,490) (424,953)
Net cash provided by (used in) investing activities 531,301 (41,652)

Financing activities:
Proceeds from restricted contributions 365,666 554,497
Proceeds from sale of contributed securities restricted for endowment 38,934 73,781
Contributions received for split-interest agreements 8,104 9,027
Payments made under split-interest agreements (15,905) (15,840)
Repayments of long-term debt (19,313) (16,489)
Repayments to the Federal government for student loans (2,040) (2,858)
Net cash provided by financing activities 375,446 602,118

Net increase (decrease) in cash and cash equivalents 162,476 (155,195)

Cash and cash equivalents, beginning of year 775,982 931,177
Cash and cash equivalents, end of year $ 938,458 $ 775,982

The accompanying notes are an integral part of these consolidated financial statements.
24 Yale University Financial Report 2022-2023
Yale University
Notes to Consolidated Financial Statements
1. Significant Accounting Policies
a. General
Yale University ("Yale” or the “university") is a private, not-for-profit institution of higher education
located in New Haven, Connecticut. The university is governed by the Yale Corporation (the
“Corporation” or the board of trustees), a body comprised of the President, ten appointed Successor
Trustees, six elected Alumni Fellows, and the Governor and Lieutenant Governor of Connecticut, who
are board members ex officio.
The university provides educational services primarily to students and trainees at the
undergraduate, graduate and postdoctoral levels, and performs research, training and other services
under grants, contracts and other similar agreements with agencies of the federal government and other
sponsoring organizations. The university's academic organization includes Yale College, the Graduate
School of Arts and Sciences, thirteen professional schools and a variety of research institutions and
museums. The largest professional school is the Yale School of Medicine, which conducts medical
services in support of its teaching and research missions.

b. Basis of Presentation
The consolidated financial statements of the university include the accounts of academic and
administrative departments of the university, and affiliated organizations which are required to be
consolidated under the applicable accounting guidance.
The university measures aggregate net assets and net asset activity based on the absence or
existence of donor-imposed restrictions. Net assets are reported as without donor restrictions and with
donor restrictions and serve as the foundation of the accompanying consolidated financial statements.
Brief definitions of the two net asset classes are presented below:

Net Assets Without Donor Restrictions - Net assets derived from tuition and other institutional resources
that are not subject to explicit donor-imposed restrictions. Net assets without donor restrictions also
include board-designated funds functioning as endowment.

Net Assets With Donor Restrictions - Net assets that are subject to explicit donor-imposed restrictions on
the expenditure of contributions, including those given to be maintained in perpetuity; income and gains
on contributed assets subject to donor-imposed restrictions not yet appropriated for spending by the
Corporation and student loan funds. In addition, net assets with donor restrictions include restricted
contributions from donors classified as funds functioning as endowment. Restrictions include support of
specific schools or departments of the university, for professorships, research, faculty support,
scholarships and fellowships, library and art museums, building construction and other purposes. When
time and purpose restrictions expire, net assets with donor restrictions are reclassified to net assets
without donor restrictions.

25
Measure of Operations - The university's measure of operations as presented in the consolidated statement
of activities includes revenue from tuition (net of certain scholarships and fellowships) and fees, grants
and contracts, medical services, contributions for operating programs, other investment income, the
allocation of endowment spending for operations and other income. Operating expenses are reported on
the consolidated statement of activities by natural classification.
The university’s non-operating activity within the consolidated statement of activities includes
contributions to the university’s endowment and for building construction and renovation, investment
returns and other activities related to endowment, unrealized gains and losses on interest rate swaps and
long-term benefit plan obligation funding changes.

Liquidity - The university’s financial assets available within one year of the date of the consolidated
statement of financial position for general expenditure as of June 30 are as follows, in thousands of
dollars:

2023 2022
Total assets, at year end $ 54,425,641 $ 54,719,302
Less nonfinancial assets:
Land, buildings and equipment, net of accumulated depreciation 5,747,983 5,598,069
Other assets 425,957 240,814
Right of use assets 272,115 179,645
Financial assets, at year end 47,979,586 48,700,774

Less those unavailable for general expenditure within one year due to contractual
or donor-imposed restrictions:
Restricted by donor with time or purpose restrictions 855,395 914,040
Subject to appropriation and satisfaction of donor restrictions
including board-designated endowments 42,273,707 43,255,859
Other long-term notes receivable 84,427 89,912
Financial assets available to meet cash needs for general expenditures within one year $ 4,766,057 $ 4,440,963

The university has $4,766.1 million of financial assets that are available within one year of the date of
the 2023 consolidated statement of financial position to meet cash needs for general expenditure
consisting of cash of $845.4 million, accounts receivable of $410.2 million, contributions receivable of
$105.0 million, and short-term investments of $3,405.5 million. In addition to these available financial
assets, a significant portion of the university’s annual expenditures will be funded by current year
operating revenues including tuition, grant and contract income and medical services income. The
university has a policy to structure its financial assets to be available as its general expenditures,
liabilities, and other obligations come due. As part of its liquidity management, the university invests
cash in excess of daily requirements in various short-term investments, including U.S. government
instruments.

Additionally, the university has board-designated funds of $7,052.7 million. Although the university
does not intend to spend from this endowment, other than amounts appropriated for general
expenditure as part of its annual budget approval and appropriation process, amounts from its board-
designated funds could be made available if necessary. However, both the board-designated funds and

26 Yale University Financial Report 2022-2023

donor-restricted endowments contain investments with lock-up provisions that would reduce the total
investments that could be made available, as described in Note 2.

c. Cash and Cash Equivalents

Cash and cash equivalents are recorded at cost, which approximates fair value due to their short-term
nature and include institutional money market funds and similar temporary investments with maturities
of three months or less at the time of purchase. Cash and short-term investments awaiting investment in
the long-term investment pool are reported as investments and totaled $1,210.2 million and $1,556.3
million at June 30, 2023 and 2022, respectively. Short-term investments included in the long-term
investment pool which may otherwise qualify as cash equivalents under the university’s policy are
accounted for as investments by policy and are accordingly not included within these cash disclosures.

Supplemental disclosures of cash flow information include the following, in thousands of dollars:

2023 2022
Cash paid during the year for interest $ 119,350 $ 166,862

Noncash investing activities:

Land, buildings and equipment purchases
payable to vendor $ 61,359 $ 46,148

The following table summarizes supplemental cash flow information related to leases for the year ended
June 30, in thousands of dollars:

2023 2022
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from financing leases $ 7,462 $ 7,719
Operating cash flows from operating leases 12,165 9,798
Financing cash flows from financing leases 8,366 6,691

Non-cash lease related items:

ROU assets obtained in exchange for new and remeasured
financing liabilities $ 120,137 $ -
ROU assets obtained in exchange for new and remeasured
operating liabilities 3,237 20,572

The following table provides a reconciliation of amounts reported within the consolidated statements of
financial position that sum to the total of the amount shown in the consolidated statement of cash flows
for the years ended June 30, in thousands of dollars:

2023 2022
Cash and cash equivalents $ 845,424 $ 712,614
Cash included in investments, at fair value 93,034 63,368
Total cash and cash equivalents shown in the
consolidated statements of cash flows $ 938,458 $ 775,982

27
d. Investments

Fair Value - The university's investments are recorded in the consolidated financial statements at fair
value.

Fair value is a market-based measurement based on assumptions that market participants would use in
pricing an asset or liability. As a basis for considering assumptions, a three-tier fair value hierarchy has
been established which categorizes the inputs used in measuring fair value. The hierarchy of inputs used
to measure fair value and the primary methodologies used by the university to measure fair value
include:

• Level 1 – Quoted prices for identical assets and liabilities in active markets. Market price data
is generally obtained from relevant exchange or dealer markets.
• Level 2 – Inputs, other than the quoted prices in active markets, that are observable either
directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in
markets that are not active, or other inputs that are observable.
• Level 3 – Unobservable inputs for which there is little or no market data, requiring the
university to develop its own assumptions.

Assets and liabilities measured at fair value are determined based on the following valuation techniques:
• Market approach – Prices and other relevant information generated by market transactions
involving identical or comparable assets or liabilities; and/or
• Income approach – Techniques to convert future amounts to a single present amount based
on market expectations, including present value techniques and option-pricing models.

The fair value of publicly traded fixed income and equity securities is based upon quoted market prices
and exchange rates, if applicable. The fair value of direct real estate investments is determined from
periodic valuations prepared by independent appraisers.

Investments are exposed to various risks, such as interest rate, market and credit risks. Due to the level of
risk associated with certain investments, it is at least reasonably possible that changes in the values of
investments will occur in the near term and that such changes could materially affect the amounts
reported in the university’s consolidated financial statements.

Derivatives - Derivative financial instruments in the investment portfolio include interest rate swaps
which are recorded at fair value with the resulting gain or loss recognized in the consolidated statement
of activities.

Resell and Repurchase Agreements - Cash paid relating to resell agreements is generally collateralized by
federal agency and foreign debt securities. The university takes possession of the underlying collateral
and monitors the value of the underlying collateral to the amount due under the agreement. Cash
received under repurchase agreements is collateralized by investments in asset-backed securities,

28 Yale University Financial Report 2022-2023

 corporate debt, federal agency debt, and foreign debt securities. Collateral fair value is monitored to the
amounts due under the agreements.

Management Fees - The university records the cost of managing its endowment portfolio as a decrease in
non-operating activity as a component of total endowment return within the applicable net asset class in
the consolidated statement of activities. Management fees consist of the internal costs of the university’s
Investments Office (the “Investments Office”), outside custodian fees, and fees for external investment
managers and general partners.

Total Return - The university invests its endowment portfolio and allocates the related earnings for
expenditure in accordance with the total return concept. A distribution of endowment return that is
independent of the cash yield and appreciation of investments earned during the year is provided for
program support. The university has adopted a current endowment spending policy in accordance with
the Uniform Prudent Management of Institutional Funds Act (“UPMIFA”) as adopted in the State of
Connecticut, designed specifically to stabilize annual spending levels and to preserve the real value of the
endowment portfolio over time. The spending policy attempts to achieve these two objectives by using a
long-term targeted spending rate combined with a smoothing rule, which adjusts spending gradually to
changes in the endowment’s fair value. An administrative charge is assessed against the funds when
distributed.
To the extent that a donor-restricted endowment fund falls below its historic dollar value a
deficit would exist, and it would be reported as a reduction of net assets with donor restrictions.
Spending from an endowment fund in a deficit position would continue under the spending policy so
long as the fund’s value is more than 70% of its historical dollar value. At June 30, 2023, there were
323 endowment funds in a deficit position totaling $14.0 million in aggregate, the fair value of which
totaled $512.8 million with a corresponding historic dollar value of $526.8 million. At June 30, 2022,
there were 174 endowment funds in a deficit position totaling $5.1 million in aggregate, the fair value
of which totaled $214.1 million with a corresponding historic dollar value of $219.2 million.
The university uses a long-term targeted spending rate of 5.25%. The spending amount is
calculated using 80% of the previous year’s spending and 20% of the targeted long-term spending rate
applied to the fair value at the start of the prior year. The spending amount determined by the formula is
adjusted for inflation and taxes and constrained so that the calculated rate is at least 4.0% and not more
than 6.5% of the endowment’s fair value as of the start of the prior year. The actual rate of spending for
2023 and 2022, when measured against the previous year's June 30th endowment fair value, was 4.3%
and 3.8%, respectively.
The university determines the expected return on endowment investments with the objective of
producing a return exceeding the sum of inflation and the target spending rate. Asset allocation is the key
factor driving expected return. Yale’s asset allocation policy combines tested theory and informed market
judgment to balance investment risks with the need for high returns. Both the need to provide resources
for current operations and the desire to preserve the purchasing power of assets lead the endowment to
be weighted toward equity investments.
The university manages the majority of its endowment in its Long-Term Investment Pool (the
“Pool”). The Pool is unitized and allows for efficient investment among a diverse group of funds with

29
varying restricted purposes. In addition to university funds, the Pool includes assets of affiliated entities
where the university has established investment management agreements.

e. Leases
At the inception of an arrangement, the university determines if an arrangement is, or contains, a lease
based on the unique facts and circumstances present in that arrangement. Lease classification,
recognition, and measurement are then determined as of the lease commencement date. For
arrangements that contain a lease, the university (i) identifies lease and non-lease components, (ii)
determines the consideration in the contract, (iii) determines whether the lease is an operating or
financing lease, and (iv) recognizes lease right of use (“ROU”) assets and lease liabilities. Lease liabilities
and their corresponding ROU assets are recorded based on the present value of lease payments over the
expected lease term. The interest rate implicit in lease contracts is typically not readily determinable, and
as such, the university uses its incremental borrowing rate based on the information available at the lease
commencement date, a rate which represents one that would be incurred to borrow, on a collateralized
basis, over a similar term, an amount equal to the lease payments in a similar economic environment.
Some leases include options to renew and/or terminate the lease, which can impact the lease term. The
exercise of these options is at the university’s discretion and the university does not include any of these
options within the expected lease term where it is not reasonably certain that these options will be
exercised.
Fixed, or in-substance fixed, lease payments on operating leases are recognized over the expected
term of the lease on a straight-line basis, while fixed, or in-substance fixed, payments on financing leases
are recognized using the effective interest method. Variable lease expenses that are not considered fixed,
or in-substance fixed, are recognized as incurred. Fixed and variable lease expense on operating leases is
recognized within other operating expenditures in the consolidated statement of activities. Financing
lease ROU asset amortization and interest costs are recorded within depreciation, amortization and
interest in the consolidated statement of activities. The university has elected the short-term lease
exemption and, therefore, does not recognize a ROU asset or corresponding liability for lease
arrangements with an original term of 12 months or less.
Operating and financing leases are included in right of use assets and lease liabilities in the
university’s consolidated statements of financial position as of June 30, 2023 and 2022.
The university leases to others portions of certain buildings owned for retail and research
purposes. Leases are generally five-year terms or less and are classified as operating leases. These leasing
arrangements are not material to the consolidated financial statements.

f. Land, Buildings and Equipment

Land, buildings, and equipment are generally stated at cost. Annual depreciation is calculated on a
straight-line basis over the lesser of the remaining useful lives or the lease term for financing leases,
ranging from 15 to 50 years for buildings and improvements and 4 to 15 years for equipment.

g. Other Assets
Other assets include prepaid pension costs, insurance receivables, capitalized software costs, deferred
expenses, and inventories. Capitalized software costs are amortized on a straight-line basis over the
estimated useful lives of the software, ranging from 5 to 10 years.

30 Yale University Financial Report 2022-2023

h. Collections
Collections at Yale include works of art, literary works, historical treasures, and artifacts that are
maintained in the university's museums and libraries. These collections are protected and preserved for
public exhibition, education, research, and the furtherance of public service. Collections are not
capitalized; purchases of collection items are recorded as expenses in the university’s consolidated
statement of activities in the period in which the items are acquired.

i. Split-Interest Agreements
The university's split-interest agreements with donors consist primarily of charitable gift annuities,
pooled income funds, and irrevocable charitable remainder trusts for which the university serves as
trustee. Assets are invested and payments are made to donors and/or other beneficiaries in accordance
with the respective agreements.
Contribution revenue related to charitable gift annuities and charitable remainder trusts is
recognized at the date the agreements are established. In addition, the fair value of the estimated future
payments to be made to the beneficiaries under these agreements is recorded as a liability. For pooled
income funds, contribution revenue is recognized upon establishment of the agreement at the fair value
of the estimated future receipts, discounted for the estimated time period until culmination of the
agreement.

j. Beneficial Interest in Trust Assets

The university is the beneficiary of certain irrevocable perpetual trusts and charitable remainder trusts
held and administered by others. The estimated fair values of trust assets are recognized as assets and as
gift revenue when reported to the university.

k. Net Tuition, Room and Board

Tuition, room and board revenue is generated from an enrolled student population of approximately
14,800 and 14,600 in 2023 and 2022, respectively, and is recognized in the period in which it satisfies
its performance obligations. Net tuition, room and board revenue from undergraduate enrollment
represents approximately 62.5% and 58.5% of total tuition, room and board revenue in 2023 and
2022, respectively.
The university maintains a policy of offering qualified applicants admission to Yale College
without regard to financial circumstance, as well as meeting in full the demonstrated financial need of
those admitted. Student need in all programs throughout the university is generally fulfilled through a
combination of scholarships and fellowships, loans and employment during the academic year. Tuition,
room and board revenue has been reduced by certain scholarships and fellowships in the amounts of
$460.1 million and $416.6 million in 2023 and 2022, respectively.

l. Contributions
Unconditional promises to give that are expected to be collected within one year are recorded at their net
realizable value. Amounts expected to be collected in future years are recorded at the present value of
estimated future cash flows, which includes estimates for potential uncollectible receivables. The
discount on those contributions is computed using an interest rate that reflects the time value of money

31
applicable to the year in which the promise is received. Amortization of the discount is included in
contribution revenue.
Contributions are considered conditional when the underlying agreement includes a
performance barrier and a right of return or a right to release promised assets exists. Conditional
promises to give are not recognized as revenue until the performance barrier and the right of return or
release have been overcome.

m. Grant and Contract Income

The university receives grant and contract income for exchange and non-exchange agreements from both
governmental and private sources. Revenue from exchange agreements is recognized when performance
obligations are met. Revenue from conditional non-exchange agreements is recognized as performance
barriers are overcome and as the university overcomes either a right of return of assets transferred or the
right of release of a promisor’s obligation to transfer assets. Grant and contract revenue from conditional
non-exchange agreements is generally recognized as qualified costs of sponsored programs are incurred.
At June 30, 2023 and 2022, the university has research activities which are contractually authorized by
the sponsor, but for which costs have not yet been incurred, totaling $1,649.0 million and $1,612.3
million, respectively.
In 2023 and 2022, grant and contract income from the federal government totaled $776.8
million and $743.3 million, respectively. Recovery of facilities and administrative costs of federally
sponsored programs is at rates negotiated with the university's cognizant agency, the Department of
Health and Human Services. The current negotiated rates expired on June 30, 2023. New rates are
currently being negotiated for July 1, 2023 based on actual costs incurred in fiscal year 2022.

n. Medical Services Income

The university provides medical care to patients primarily under agreements with third-party payors,
including health maintenance organizations, that provide payment for medical services at amounts
different from standard rates established by the university. The university determines performance
obligations based on the nature of the services provided and recognizes revenue as it satisfies those
performance obligations. Generally, these performance obligations are satisfied at the point in time the
service is provided.
Medical services income is reported net of contractual discounts from third-party payors and
implicit price concessions to uninsured patients. The university estimates the discounts based on
contractual agreements and estimates the implicit price concessions based on its historical collection
experience with these classes of patients.

The following table summarizes patient care revenue for the university, net of allowances and discounts
at June 30, in thousands of dollars:

2023 2022
Gross revenue $ 2,546,766 $ 2,337,674
Allowances and discounts (1,788,371) (1,628,166)
Total patient care revenue $ 758,395 $ 709,508

32 Yale University Financial Report 2022-2023

In 2023 and 2022, net patient revenue, included in income from medical services, totaled $553.2
million and $515.5 million from insurance companies, $197.4 million and $192.9 million from
Medicare, $65.9 million and $74.6 million from Medicaid, and $107.8 million and $88.9 million from
other third parties, respectively. In 2023 and 2022, income from medical services is offset by denials,
charity care and bad debts of $165.9 million and $162.4 million, respectively.

o. Net Assets Released from Restrictions

Net assets released from restrictions are based upon the satisfaction of the purpose for which the net
assets were restricted or the completion of a time stipulation. Restricted operating activity including
contributions and net investment return earned, which are restricted, are reported as net assets with
donor restrictions and reclassified to net assets without donor restrictions when any donor-imposed
restrictions are satisfied. Non-operating restricted net assets associated with building costs are
reclassified to net assets without donor restrictions when the capital asset is placed in service.

p. Self-Insurance
The university self-insures at varying levels for unemployment, disability, workers’ compensation,
property losses, certain healthcare plans, general liability, and professional liability, and obtains coverage
through a captive insurance company for medical malpractice and related general liability losses.
Insurance is purchased to cover liabilities above self-insurance limits. Estimates of retained exposures are
accrued.

q. Tax Status
The university has been granted tax-exempt status under section 501(c)(3) of the Internal Revenue
Code.
The university is subject to several provisions of the Tax Cuts and Jobs Act (the “Act”), enacted
on December 22, 2017. Specifically, the Act introduced excise taxes on net investment income and
executive compensation, as well as updated rules for calculating unrelated business taxable income. The
university records tax assets and liabilities in its consolidated financial statements based on reasonable
estimates determined using current guidance, including the U.S. Treasury Department final regulations.

r. Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in
the United States of America (“GAAP”) requires management to make estimates and judgments that
affect the reported amounts of assets and liabilities and disclosures of contingencies at the date of the
consolidated financial statements and the reported amounts of revenues and expenses during the
reporting period.
Significant estimates made by management include the valuation of certain investments and
interest rate swap agreements, the estimated net realizable value of receivables, estimated asset
retirement obligations, liabilities under split interest agreements, estimated tax liabilities, and the
actuarially determined employee benefit and self-insurance liabilities. Actual results could differ from
those estimates.

33
s. Related Parties
The university and Yale New Haven Hospital (the “Hospital”) are parties to an affiliation agreement that
establishes guidelines for the operation of activities between these two separate organizations. These
guidelines set forth each organization's responsibility under the common goal of delivering
comprehensive patient care services. The university provides professional services from faculty of the
Yale School of Medicine and a variety of other administrative and clinical services. See additional
disclosures in Notes 3 and 5.

t. Recent Authoritative Pronouncements

On July 1, 2021, the university adopted new accounting guidance related to pension and postretirement
plan disclosures. The impact of adopting the new guidance was not significant to the university’s
consolidated financial statements.
On July 1, 2021, the university adopted new accounting guidance related to credit losses. The
impact of adopting the new guidance was not significant to the university’s consolidated financial
statements.
In June of 2022, the Financial Accounting Standards Board (“FASB”) issued new accounting
guidance related to the valuation of equity securities subject to contractual sale restrictions. The guidance
is required to be implemented in the university’s fiscal year 2026 with early adoption permitted. The
standard is not expected to have a significant impact to the university’s consolidated financial statements.

u. Summarized 2022 Financial Information

The 2023 consolidated financial statements include selected comparative summarized financial
information for 2022. Such information does not include sufficient detail to constitute a presentation in
conformity with GAAP. Accordingly, such information should be read in conjunction with the
university’s 2022 consolidated financial statements, from which the summarized financial information
was derived.

2. Investments
The university endowment maintains a diversified investment portfolio with a strong orientation to
equity investments and strategies designed to take advantage of market inefficiencies. The university’s
investment objectives are guided by its asset allocation policy and are achieved in partnership with
external investment managers operating through a variety of investment vehicles, including separate
accounts, limited partnerships and commingled funds. The university’s heavy allocation to non-
traditional asset classes, such as marketable alternative strategies, private equity (venture capital and
leveraged buyouts) and real assets (real estate, timber, energy and minerals) generates return potential
and diversification in the portfolio.

34 Yale University Financial Report 2022-2023

The components of endowment and non-endowment investments, net of related liabilities at June 30 are
presented below, in thousands of dollars:

2023 2022
Endowment investments:
Long-term investment pool $ 40,428,680 $ 41,059,569
Other 75,426 62,704
Total net endowment investments 40,504,106 41,122,273
Non-endowment investments:
Long-term investment pool 300,000 300,000
Fixed income 1,353,074 1,347,771
Derivatives 109,874 (75,334)
Other 1,381,837 1,477,453
Total non-endowment investments 3,144,785 3,049,890
Net investments, at fair value $ 43,648,891 $ 44,172,163

As described in Note 1d, investments are recorded at fair value. The following tables summarize the fair
values of the university’s investments by major type and related liabilities as of June 30, in thousands of
dollars:

2023 Level 1 Level 2 Level 3 Total

Investments, at fair value:
Cash and short-term investments $ 1,261,048 $ - $ - $ 1,261,048
Fixed income 3,054,758 1,950 4,335 3,061,043
Common stock:
Domestic 1,292,811 11,576 1,154 1,305,541
Foreign 281,671 - 42,229 323,900
Total common stock 1,574,482 11,576 43,383 1,629,441
Other equity investments:
Developed equities - - 1,529,689 1,529,689
Real assets - - 320,216 320,216
Venture capital - - 196,454 196,454
Total other equity investments - - 2,046,359 2,046,359
Other investments 50,236 484,940 320,899 856,075
Total leveled investments, at fair value $ 5,940,524 $ 498,466 $ 2,414,976 8,853,966
Investments at net asset value 36,825,190
Total investments $ 45,679,156

Liabilities associated with investments:

Securities sold, not yet purchased $ 500,356 $ - $ - $ 500,356
Other liabilities 37,800 22,656 1,466,392 1,526,848
Total liabilities associated with investments $ 538,156 $ 22,656 $ 1,466,392 2,027,204
Non-controlling interests 3,061
Net investments $ 43,648,891

35
2022 Level 1 Level 2 Level 3 Total
Investments, at fair value:
Cash and short-term investments $ 1,738,669 $ - $ - $ 1,738,669
Fixed income 3,385,938 - 1,185 3,387,123
Common stock:
Domestic 773,049 11,050 1,006 785,105
Foreign 775,418 - 57,539 832,957
Total common stock 1,548,467 11,050 58,545 1,618,062
Other equity investments:
Developed equities - - 1,604,274 1,604,274
Real assets - - 439,971 439,971
Venture capital - - 227,937 227,937
Total other equity investments - - 2,272,182 2,272,182
Other investments 22,732 329,740 314,319 666,791
Total leveled investments, at fair value $ 6,695,806 $ 340,790 $ 2,646,231 9,682,827
Investments at net asset value 36,789,245
Total investments $ 46,472,072

Liabilities associated with investments:

Securities sold, not yet purchased $ 186,022 $ - $ - $ 186,022
Other liabilities 109,697 337,958 1,664,611 2,112,266
Total liabilities associated with investments $ 295,719 $ 337,958 $ 1,664,611 2,298,288
Non-controlling interests 1,621
Net investments $ 44,172,163

Included within cash and short-term investments are restricted short-term investment balances held as
collateral in the amount of $1,117.1 million and $1,493.0 million as of June 30, 2023 and 2022,
respectively.

While not part of a leveling category, fair values for certain investments held are based on the net asset
value (“NAV”) of such investments as determined by the respective external investment managers,
including general partners, if market values are not readily ascertainable. These valuations involve
assumptions and methods that are reviewed by the Investments Office.

Investments at NAV as of June 30, in thousands of dollars, include:

2023 2022
Developed equities $ 5,159,727 $ 4,455,361
Emerging equities 1,379,524 1,648,280
Leveraged buyouts 10,041,213 8,888,559
Marketable alternatives 5,443,689 5,303,852
Real assets 4,837,564 5,488,279
Venture capital 9,963,473 11,004,914
Total investments, at NAV $ 36,825,190 $ 36,789,245

Certain investment companies are required to be consolidated for financial reporting purposes, and the
related assets and liabilities of those investment companies have been included in these consolidated
financial statements. Where such entities are not wholly owned by the university, the portion of the

36 Yale University Financial Report 2022-2023

consolidated entity's net assets that is not owned by the university is reported as a non-controlling
interest.

The fair value of consolidated investment company assets and liabilities included in the university’s
consolidated financial statements, in thousands of dollars, include:

2023 2022
Consolidated investment company assets $ 90,798 $ 125,108
Consolidated investment company liabilities 4,098 4,692
$ 86,700 $ 120,416

Level 3 investments are valued by the university or by its external investment managers using valuation
techniques standard in the industry in which they operate. The Investments Office reviews these
valuation methods and evaluates the appropriateness of these valuations each year. In certain
circumstances, when the general partner does not provide a valuation or the valuation provided is not
considered appropriate, the Investments Office will determine those values.

The following table summarizes quantitative inputs and assumptions used for Level 3 investments at
June 30, for which fair value is based on unobservable inputs that are not developed by external
investment managers. Weighted averages were calculated based on relative fair values. Significant
increases or decreases in these unobservable inputs may result in significantly higher or lower valuation
results.

Fair Value (in 000s) Range Weighted Average

Significant
Asset Class 2023 2022 Valuation Technique Unobservable Input 2023 2022 2023 2022
Calibrated price of recent
Calibrated price of recent round in private
Emerging equities $ 43,383 $ 58,545 investment investment N/A N/A N/A N/A
NAV of the underlying NAV of investment
fund holding company N/A N/A N/A N/A

Developed equities $ 1,529,689 $ 1,604,274 Carried interest calculation Fund high water mark N/A N/A N/A N/A
Indicative market
Fixed income $ 4,335 $ 1,185 quotations Recent funding activity N/A N/A N/A N/A
Real assets $ 320,216 $ 439,971 Discounted cash flow Discount rate 8.0 - 12.0% 8.0 - 12.0% 10.0% 10.0%
Trusts $ 221,845 $ 208,054 Net present value Discount rate 4.5% 3.7% N/A N/A
Venture capital $ 196,454 $ 227,937 Tax analysis Likelihood of taxation 0.0% 0.0% N/A N/A
$10,822 -
Other investments $ 99,054 $ 106,265 Market comparables Price per acre $53,288 $8,834 - $9,164 $15,243 $9,000
University pooled unit
Liabilities $ (1,466,392) $ (1,664,611) Various methods market value $4,757 $4,885 N/A N/A

The valuation process for investments at NAV and those categorized in Level 3 of the fair value hierarchy
includes evaluating the operations and valuation procedures of external investment managers and the
transparency of those processes through background and reference checks, attendance at investor
meetings, and periodic site visits. In determining the fair value of investments, Investments Office staff
reviews periodic investor reports, interim and annual audited financial statements received from external
investment managers, and material quarter over quarter changes in valuation; and assesses the impact of
macro market factors on the performance. The Investments Office meets with the Corporation’s

37
Investment Committee quarterly to review investment transactions and monitor performance of external
investment managers.

Realized and unrealized gains and losses are reported in total endowment return, net of fees. Included in
net realized and unrealized gain (loss) in Level 3 reported below were unrealized gains of $15.5 million
and unrealized losses of $114.1 million that relate to investments held at June 30, 2023 and 2022,
respectively.

The tables below present the change in fair value measurements for the university’s Level 3 investments
during the years ended June 30, in thousands of dollars:

Developed Real Venture

2023 equities assets capital Other Liabilities Total
Beginning balance $ 1,604,274 $ 439,971 $ 227,937 $ 374,049 $ (1,664,611) $ 981,620
Realized and unrealized
gain (loss), net 347,949 (68,141) 2,254 (2,108) 50,347 330,301
Purchases 31,117 - 207 13,605 (55,593) (10,664)
Sales (453,651) (51,614) (33,944) (16,929) 203,465 (352,673)
Ending balance $ 1,529,689 $ 320,216 $ 196,454 $ 368,617 $ (1,466,392) $ 948,584

Developed Real Venture

2022 equities assets capital Other Liabilities Total
Beginning balance $ 1,388 $ 618,580 $ 479,519 $ 388,308 $ (1,739,077) $ (251,282)
Realized and unrealized
(loss) gain, net (92,809) 189,832 (218,602) (29,784) 30,998 (120,365)
Purchases 23,117 19,342 3,013 51,161 (74,012) 22,621
Sales (1,388) (377,764) (35,993) (32,974) 117,480 (330,639)
Transfers in 1,673,966 - - - - 1,673,966
Transfers out - (10,019) - (2,662) - (12,681)
Ending balance $ 1,604,274 $ 439,971 $ 227,937 $ 374,049 $ (1,664,611) $ 981,620

Transfers into Level 3 consist primarily of investments reclassified from NAV to Level 3 when the
practical expedient is not used, while transfers out of Level 3 consist of investments reclassified from
Level 3 to NAV due to the use of the practical expedient.

38 Yale University Financial Report 2022-2023

Agreements with external investment managers include certain redemption terms and restrictions as
noted in the following table:

Fair Value (in 000s) Unfunded Commitment (in 000s)

Asset Class 2023 2022 Remaining Life 2023 2022 Redemption Terms Redemption Restrictions
Redemption terms range from
monthly with 3 days notice to Lock-up provisions range
Developed equities $ 6,689,416 $ 6,059,635 No Limit $ 112,872 $ 82,872 annually with 90 days notice. from none to 7 years.

Redemption terms range from

monthly with 15 days notice to
closed end structures not available Lock-up provisions range
Emerging equities 1,379,524 1,648,280 No Limit 67,650 126,000 for redemption. from none to 7 years.

Closed end funds not eligible for

Leveraged buyouts 10,041,213 8,888,559 1-25 years 4,228,144 4,523,006 redemption. Not redeemable.

Redemption terms range from

Marketable monthly with 30 days notice to Lock-up provisions range
alternatives 5,443,689 5,303,852 No Limit 111,173 115,719 annually with 90 days notice. from none to 5 years.

Closed end funds not eligible for

Real assets 5,157,780 5,928,250 1-25 years 1,996,579 2,456,597 redemption. Not redeemable.

Redemption terms range from 2

years with 3 years notice to closed
end structures not available for
Venture capital 10,159,927 11,232,851 1-25 years 2,284,191 2,095,548 redemption. Not redeemable.

Total $ 38,871,549 $ 39,061,427 $ 8,800,609 $ 9,399,742

The fair value of fixed income securities of $328.4 million and $176.8 million was provided at June 30,
2023 and 2022, respectively, to collateralize securities sold, not yet purchased.

The university may employ derivatives and other strategies to (1) manage against market risks, (2)
arbitrage mispricing of related securities, and (3) replicate long or short positions more cost effectively.
The fair value of derivative positions held at June 30 and related gain (loss) for the year, in thousands of
dollars, were as follows:

2023
Assets Liabilities Gain (Loss)
Endowment:
Other $ 1 $ 26 $ (275)
1 26 (275)
Other:
Interest rate swaps 149,976 48,682 190,978
149,976 48,682 190,978
Gross value of derivatives 149,977 48,708 $ 190,703

Other-counterparty netting (14,487) (14,487)

Collateral:
Cash collateral received 22,850 -
Securities collateral received/(posted) 55,480 (16,994)
Total net exposure for derivatives $ 57,160 $ 17,227

39
2022
Assets Liabilities Gain
Endowment:
Other $ 538 $ 17 $ 181,928
538 17 181,928
Other:
Interest rate swaps 31,642 121,154 498,015
31,642 121,154 498,015
Gross value of derivatives 32,180 121,171 $ 679,943

Other-counterparty netting (31,642) (31,641)

Collateral:
Securities collateral received/(posted) - (88,688)
Total net exposure for derivatives $ 538 $ 842

Derivatives are reported as other investments and other liabilities for fair value leveling purposes. The
university initiates derivatives under legally enforceable master netting agreements. The net exposure for
derivatives is presented above, net of these master netting agreements and required collateral.

Interest Rate Swaps

Interest rate swaps are used to manage exposure to interest rate fluctuations. The notional amount of
contracts that pay based on fixed rates and receive based on variable rates was $2.3 billion for both June
30, 2023 and 2022. The notional amount of contracts that pay based on variable rates and receive based
on fixed rates were $500.0 million and $800.0 million at June 30, 2023 and 2022, respectively.

Derivative assets are reported as investments in the consolidated statement of financial position and
derivative liabilities are reported as liabilities associated with investments. Gains and losses on derivatives
used for investing are reported as part of total endowment return and gains and losses related to
university debt management are reported as other investment income in the consolidated statement of
activities as non-operating activity.
Derivatives held by limited partnerships and commingled investment trusts in which Yale
invests pose no off-balance sheet risk to the university due to the limited liability structure of the
investments.
Certain investment transactions, including derivative financial instruments, necessarily involve
counterparty credit exposure. Such exposure is monitored regularly by the university's Investments
Office in accordance with established credit policies and other relevant criteria.

Endowment investments include beneficial interests in outside trusts of $182.7 million and $168.6
million at June 30, 2023 and 2022, respectively.

40 Yale University Financial Report 2022-2023

The following investments held under split-interest agreements are included in the endowment
investment portfolio, in thousands of dollars:

2023 2022
Charitable gift annuities $ 277,923 $ 289,105
Charitable remainder trusts 106,666 103,370
Pooled income funds 5,176 5,675
$ 389,765 $ 398,150

Split-interest liabilities reported in the consolidated statement of financial position totaled $132.3
million and $130.8 million at June 30, 2023 and 2022, respectively, and are recorded at fair value
using Level 2 measurements.

The university has agreements with certain affiliates to invest in the Pool. The obligation to these
affiliates included in other liabilities within liabilities associated with investments is $1,177.1 million
and $1,370.6 million at June 30, 2023 and 2022, respectively. The largest balance recorded is for Yale
New Haven Health System (YNHHS), with $849.0 million and $1,037.0 million invested at June 30,
2023 and 2022, respectively.

A summary of the university's total investment return as reported in the consolidated statement of
activities is presented below, in thousands of dollars:

2023 2022
Investment income $ 438,816 $ 371,926
Realized and unrealized gain (loss), net of
investment management fees 319,868 (106,046)
Total endowment return 758,684 265,880
Other investment income 280,606 571,588
$ 1,039,290 $ 837,468

Endowment investment returns totaling $1,752.4 million and $1,568.4 million were allocated to
operating activities in 2023 and 2022, respectively, using the spending policy described in Note 1d.

41
3. Accounts Receivable
Accounts receivable from the following sources were outstanding at June 30, in thousands of dollars:

2023 2022

Medical services $ 320,495 $ 323,304

Grant and contracts 150,998 116,048
Affiliated organizations 115,809 119,644
Publications 6,590 7,267
Other 53,081 73,998
646,973 640,261
Less: Allowance for doubtful accounts (236,773) (234,578)
$ 410,200 $ 405,683

Medical services receivables are net of discounts and allowances of $220.8 million and $218.5 million at
June 30, 2023 and 2022, respectively.

Receivables for medical services, net of contractual adjustments, are primarily based on negotiated
contracts with the following:

2023 2022
Insurance companies 45% 45%
Payments due directly from patients 19% 22%
Medicare 19% 17%
Commercial insurance and others 13% 11%
Medicaid 4% 5%

The university assesses credit losses on accounts receivable on a regular basis to determine the allowance
for doubtful accounts.

The net receivable from the Hospital amounted to $107.6 million and $112.9 million at June 30, 2023
and 2022, respectively. Balances are settled in the ordinary course of business. The university recognized
$531.8 million and $492.2 million in revenue and incurred $131.8 million and $135.5 million in
expenses related to activities with the Hospital during the years ended June 30, 2023 and 2022,
respectively.

42 Yale University Financial Report 2022-2023

4. Contributions Receivable
Contributions receivable consist of the following unconditional promises to give as of June 30, in
thousands of dollars:

2023 2022
Purpose:
Operating programs $ 467,832 $ 501,570
Endowment 602,067 636,325
Capital purposes 111,789 107,334
Gross unconditional promises to give 1,181,688 1,245,229
Less: Discount to present value (108,324) (111,307)
Allowance for uncollectible accounts (112,985) (113,429)
$ 960,379 $ 1,020,493

Amounts due in:

Less than one year $ 423,809 $ 418,213
One to five years 483,615 531,880
More than five years 274,264 295,136
$ 1,181,688 $ 1,245,229

Discount rates used to calculate the present value of contributions receivable ranged from 0.07% to
7.00% at June 30, 2023 and 2022.

The university had conditional pledges of approximately $12.9 million and $16.4 million at June 30,
2023 and June 30, 2022, respectively, which are subject to donor-imposed conditions.

5. Notes Receivable
Notes receivable at June 30, in thousands of dollars, include:

2023 2022

Institutional student loans $ 44,042 $ 43,465

Federally-sponsored student loans 6,695 10,911
Notes receivable 46,880 48,312
97,617 102,688
Less: Allowance for doubtful accounts (13,190) (12,776)
$ 84,427 $ 89,912

Student Loans
Institutional student loans are funded by donor funds restricted for student loan purposes and university
funds made available to meet demonstrated need in excess of all other sources of student loan
borrowings. Interest accrues at fixed rates upon loan disbursement.
Management regularly assesses the adequacy of the allowance for credit losses for student loans
by performing ongoing evaluations of the student loan portfolio, including such factors as the differing

43
economic risks associated with each loan category, the financial condition of specific borrowers, the level
of delinquent loans, and, where applicable, the existence of any guarantees or indemnifications.
Federally-sponsored loans represent amounts due from current and former students under certain
federal loan programs. Loans disbursed under these programs can be assigned to the federal government
in certain non-repayment situations. In these situations, the federal portion of the loan balance is
guaranteed. Federally-sponsored student loans have mandated interest rates and repayment terms
subject to restrictions as to their transfer and disposition.
Amounts received from the federal government to fund a portion of the federally-sponsored
student loans are ultimately refundable to the federal government and have been reported as part of
other liabilities in the consolidated statement of financial position. The recorded value of student loan
instruments approximates fair value.

Notes Receivable
The university and the Hospital entered into an agreement under which the Hospital will reimburse the
university over a 40-year term for advances made relating to the construction of Hospital facilities. The
payment includes interest based on the five-year Treasury bill plus 175 basis points, which resets every
five years. In 2020, the interest rate was reset, and the monthly payment was adjusted accordingly.

6. Right of Use Assets and Lease Liabilities

The following table summarizes the university’s lease assets and liabilities as of June 30, in thousands of
dollars:

Right of use assets and liabilities Consolidated statement of financial position location 2023 2022
Right of use asset - Operating Right of use assets $ 31,703 $ 46,506
Right of use asset - Financing Right of use assets 240,412 133,139
Right of use liabilities - Operating Lease liabilities 32,355 47,304
Right of use liabilities - Financing Lease liabilities 318,767 205,777

The following table summarizes the university’s lease related costs for the year ended June 30, in
thousands of dollars:

Lease cost Consolidated statement of activities location 2023 2022

Financing lease cost
Amortization of right of use assets Depreciation, amortization and interest $ 10,279 $ 10,279
Interest on lease liabilities Depreciation, amortization and interest 7,462 7,719
Operating lease cost Other operating expenses 12,496 10,114
Total lease cost $ 30,237 $ 28,112

44 Yale University Financial Report 2022-2023

The following table summarizes maturities of lease liabilities as of June 30, 2023, in thousands of
dollars:

Financing Operating Total

2024 $ 153,668 $ 9,065 $ 162,733
2025 10,753 7,052 17,805
2026 10,878 5,960 16,838
2027 11,004 5,259 16,263
2028 11,133 2,264 13,397
Thereafter 193,945 5,236 199,181
Undiscounted expected future cash flows 391,381 34,836 426,217
Discount (72,614) (2,481) (75,095)
Discounted expected future cash flows $ 318,767 $ 32,355 $ 351,122

The following table summarizes information about financing and operating leases as of June 30, in
thousands of dollars:

2023 2022
Financing Operating Financing Operating
Weighted-average
remaining lease term (years) 11 7 19 9
Weighted-average discount rate 1.93% 1.53% 3.66% 1.76%
Total undiscounted lease liability $ 391,381 $ 34,836 $ 287,376 $ 50,732

During the fiscal year ended June 30, 2023 the university committed to exercising a purchase option
during the fiscal year ended June 30, 2024 for a building that it currently leases. As part of the
remeasurement, the lease classification for all existing operating and financing leases in the building were
reassessed and determined to be financing leases.

7. Other Assets
Other assets at June 30, in thousands of dollars, include:

2023 2022
Prepaid pension costs $ 168,634 $ -
Insurance receivables 142,042 140,923
Software costs, net of accumulated amortization 53,325 39,906
Deferred expenses 43,955 42,315
Inventories 18,001 17,670
$ 425,957 $ 240,814

Prepaid pension costs represent the amount by which the fair value of plan assets exceed the defined
benefit obligation at June 30, 2023. At June 30, 2022, the defined benefit pension obligation exceeded
the fair value of the plan assets, and the funded status is included in other liabilities (see Note 12).

45
Amortization expense related to other assets included in operating expenses amounted to $14.6 million
and $14.2 million in 2023 and 2022, respectively.

8. Land, Buildings and Equipment

Land, buildings and equipment at June 30, less accumulated depreciation and amortization, in
thousands of dollars, are as follows:
2023 2022
Land and real estate improvements $ 139,394 $ 137,203
Buildings 8,785,418 8,380,253
Equipment 535,769 624,506
9,460,581 9,141,962

Less: Accumulated depreciation and amortization (4,146,360) (3,961,507)

5,314,221 5,180,455
Construction in progress 433,762 417,614
$ 5,747,983 $ 5,598,069

Depreciation expense included in operating expenses amounted to $312.4 million and $306.7 million
in 2023 and 2022, respectively.

9. Other Liabilities
Other liabilities include obligations of the university that will be paid over extended periods of time and
consist of the following as of June 30, in thousands of dollars:
2023 2022
Employee benefit obligations $ 860,230 $ 993,684
Compensated absences 82,233 78,275
Financial aid grant obligations 55,825 49,674
Asset retirement obligations 39,727 38,229
Other 181,929 208,866
$ 1,219,944 $ 1,368,728

Included in employee benefit obligations are defined benefit plan liabilities in excess of plan assets.
These liabilities amounted to $572.7 million at June 30, 2023 and $743.8 million at June 30, 2022
(see Note 12).

46 Yale University Financial Report 2022-2023

10. Bonds and Notes Payable
Bonds and notes payable outstanding at June 30, in thousands of dollars, include:

Interest Rate Calendar Year Outstanding Balance

at June 30, 2023 of Maturity 2023 2022
CHEFA tax-exempt bonds:
Series S 5.00% 2027 $ 111,205 $ 111,205
Series T 5.00% 2029 93,625 93,625
Series U 1.10% 2033 250,000 250,000
Series V 1.73% 2036 200,000 200,000
Series X 0.25% 2037 125,000 125,000
Series 2010A 0.68% 2049 300,000 300,000
Series 2013A 1.73% 2042 100,000 100,000
Series 2014A 2.80% 2048 250,000 250,000
Series 2015A 0.38% 2035 300,000 300,000
Series 2016A 1.90% 2042 399,320 399,320
Series 2017A 2.28% 2042 170,920 170,920
Series 2017B 2.44% 2029/2037 194,530 194,530
Series 2017C 3.51% 2040/2057 383,380 383,380
Series 2018A 5.00% 2025 67,610 67,610
Total CHEFA bonds 2,945,590 2,945,590

Medium term notes 7.38% 2096 125,000 125,000

Taxable Series 2020A 1.59% 2025/2030/2050 1,500,000 1,500,000
Commercial paper 3.87% 2023 500,000 500,000
US Department of Energy 2.70% 2029 18,526 24,786
Principal amount 5,089,116 5,095,376
Less: Bond issue costs (16,632) (17,524)
Plus: Unamortized premiums and discounts, net 65,149 86,578
$ 5,137,633 $ 5,164,430

CHEFA Tax-Exempt Bonds

The university borrows at tax-exempt rates through the Connecticut Health and Facilities Authority
(“CHEFA”), a conduit issuer. CHEFA debt is a general unsecured obligation of the university. Although
CHEFA is the issuer, the university is responsible for the repayment of the tax-exempt debt.

Series S bonds total $111.2 million, bear a fixed interest rate of 5.00%, and mature in July 2027. These
bonds include a net premium of $11.7 million as of June 30, 2023.

Series T bonds consist of $93.6 million Series T-2 bonds maturing in July 2029. The Series T-2 bonds
bear a fixed interest rate of 5.00% through June 2029. These bonds include a net premium of $20.0
million as of June 30, 2023.

Series U bonds consist of 1) $125.0 million Series U-1 bonds and 2) $125.0 million Series U-2 bonds,
both maturing in July 2033. After a remarketing on February 8, 2022, Series U bonds bear a fixed
interest rate of 1.10% through February 10, 2025.

Series V bonds total $200.0 million, bear interest at a daily rate, and mature in July 2036. The bonds
may be converted from a daily rate period to other variable rate modes or to a fixed rate mode at the
discretion of the university.

47
Series X bonds consist of $125.0 million, bear fixed interest rate of 0.25% through February 8, 2024,
and mature in July 2037.

Series 2010A bonds consist of 1) $150.0 million Series 2010A-3 and 2) $150 million Series 2010A-4,
maturing July 2049. Series 2010A-3 have a fixed rate of 0.25% through February 8, 2024. On
February 8, 2022, Series 2010A-4 was remarketed from a fixed rate of 2.00% to a fixed rate of 1.10%
through February 10, 2025.

Series 2013A bonds total $100.0 million maturing in July 2042. Series 2013A had a fixed interest rate
of 1.45% through June 30, 2022. On July 1, 2022, the Series was remarketed at a daily variable interest
rate.

Series 2014A bonds total $250.0 million, maturing in July 2048. On February 7, 2023 the Series was
remarketed from a fixed rate of 1.10% to a fixed rate of 2.80% through February 9, 2026.

Series 2015A bonds total $300.0 million and mature in July 2035. After a remarketing in July 2021,
the bonds bear a fixed interest rate of 0.38% through July 11, 2024.

Series 2016A bonds consist of 1) $150.0 million Series 2016A-1 bonds that were remarketed on July
1, 2022 from a fixed rate of 1.45% to a daily variable interest rate and 2) $249.3 million Series 2016A-
2 bonds bearing a fixed interest rate of 2.00% through June 30, 2026. Series 2016A-2 include a net
premium of $203 thousand as of June 30, 2023. Both bond series mature in July 2042.

Series 2017A bonds consist of 1) $85.5 million Series 2017A-1 bonds and 2) $85.5 million Series
2017A-2 bonds. Both bond series were remarketed from a fixed interest rate of 5.00% to a weekly
variable interest rate on July 1, 2022. Both bond series mature in July 2042.

Series 2017B bonds consist of 1) $82.4 million Series 2017B-1 bonds that bear a fixed interest rate of
5.00% through July 2029 and mature in July 2029 and 2) $112.1 million Series 2017B-2 bonds that
bear a fixed interest rate of 0.55% through July 2023 and mature in July 2037. The Series 2017B-1
bonds include a net premium of $19.8 million as of June 30, 2023. On July 3, 2023, the Series 2017B-
2 bonds were remarketed to a fixed rate of 3.2% through June 30, 2026.

Series 2017C bonds consist of 1) $123.3 million Series 2017C-1 bonds maturing in July 2040 and 2)
$260.1 million 2017C-2 bonds maturing in July 2057. Series 2017C-1 bonds bear a fixed interest rate
of 5.00% through January 2028 and include a net premium of $13.4 million as of June 30, 2023. On
February 2, 2023, Series 2017C-2 was remarketed from a fixed interest rate of 5.00% to a fixed interest
rate of 2.80% through February 2, 2026.

Series 2018A bonds total $67.6 million, bear a fixed interest rate of 5.00%, and mature in July 2025.
These bonds include a net premium of $3.5 million as of June 30, 2023.

48 Yale University Financial Report 2022-2023

Notes Payable
Medium-term notes bear a fixed interest rate of 7.38% and mature in 2096, with an optional
redemption provision in the year 2026. The discount associated with these notes was $120 thousand as
of June 30, 2023.

Taxable Bonds
Taxable bonds, Series 2020A, in the amount of $1.5 billion were issued on June 9, 2020 consisting of:
2020A-1 in the amount of $500 million bearing a fixed rate of 0.873% through maturity due April 15,
2025, 2020A-2 in the amount of $500 million bearing a fixed rate of 1.48% through maturity due
April 15, 2030, and 2020A-3 in the amount of $500 million bearing a fixed rate of 2.40% through
maturity due April 15, 2050. The bonds are subject to an optional redemption (in whole or in part)
prior to maturity at the written direction of the issuer to the trustee.

Commercial Paper
Commercial paper consists of notes issued in the short-term taxable market and is sold at a discount
from par. The maturities of individual notes are issued in ranges from one day to no more than one year
and fall, on average, in a range of thirty to sixty days. The discount associated with commercial paper
was $3.4 million as of June 30, 2023.

Other Financing Arrangements

The university financed a wind energy project, Record Hill Wind, LLC, through a financing
arrangement with the U.S. Department of Energy. The financing arrangement is non-recourse debt to
the university and bears interest at rates ranging from 2.24% to 2.78%.

Scheduled maturities of the debt obligations, in thousands of dollars, are as follows:

2024 $ 504,835
2025 504,835
2026 72,445
2027 2,601
2028 111,783
Thereafter 3,892,617
Total $ 5,089,116

Certain CHEFA Series are subject to tender by bondholders. To the extent all bonds subject to tender
could not be remarketed, $2.0 billion of bonds scheduled for maturity between 2033 and 2057 would
be due when tendered.

Total interest expense incurred on indebtedness was $93.8 million and $71.0 million in 2023 and
2022, respectively. Interest capitalized to land, buildings and equipment totaled $5.6 million and $5.0
million in 2023 and 2022, respectively. Amortization expense related to bond issue costs included in
operating expenses amounted to $3.6 million and $3.4 million in 2023 and 2022, respectively.

49
11. Retirement Plans – Defined Contribution
The university maintains defined contribution plans for faculty and certain staff employees. Participants
may direct employee and employer contributions to annuities, mutual funds, and other investment
options. Retirement expense for these plans amounted to $165.2 million and $146.9 million in 2023
and 2022, respectively, and is included in operating expense.

12. Pension and Postretirement Plans – Defined Benefit

The university has a noncontributory, defined benefit pension plan for staff. The staff pension plan
provides payments based on the employee’s earnings and years of participation.
In addition, the university provides postretirement benefits including health benefits based on
years of service, life insurance, and a pay-out of unused sick time. While the university’s subsidy of the
cost of comprehensive health care benefits differs among retiree groups, substantially all employees who
meet minimum age and service requirements and retire from the university are eligible for these benefits.
Non-faculty employees are paid 50% of unused sick time and receive life insurance benefits upon
retirement from active status.
The university uses a June 30 measurement date for its defined benefit plans.

The following table sets forth the pension and postretirement plans’ funded status that is reported in
other assets or other liabilities within the consolidated statements of financial position at June 30, in
thousands of dollars:

Pension Postretirement
2023 2022 2023 2022
Change in benefit obligation:
Benefit obligation, beginning of year $ 1,983,077 $ 2,407,762 $ 1,409,933 $ 1,708,602
Service cost 69,846 101,014 56,129 66,548
Interest cost 73,438 58,060 53,227 38,456
Benefit payments (57,895) (51,846) (31,966) (32,101)
Assumption changes (280,114) (536,173) (133,597) (253,543)
Actuarial loss (gain) 17,875 4,260 93,617 (118,029)
Benefit obligation, end of year $ 1,806,227 $ 1,983,077 $ 1,447,343 $ 1,409,933

Change in plan assets:

Fair value, beginning of year $ 1,895,798 $ 2,066,964 $ 753,421 $ 802,442
Actual return on plan assets 127,016 (166,373) 54,152 (96,185)
University contributions 13,169 49,945 100,457 80,623
Benefits paid (57,895) (51,846) (31,966) (32,101)
Expenses paid (3,227) (2,892) (1,466) (1,358)
Fair value, end of year $ 1,974,861 $ 1,895,798 $ 874,598 $ 753,421
Funded Status $ 168,634 $ (87,279) $ (572,745) $ (656,512)

Benefit Obligation
The benefit obligation represents the actuarial present value of expected future payments to plan
participants for services rendered prior to that date, based on the pension benefit formula. In calculating
the value, the participants’ compensation levels are projected to retirement.

50 Yale University Financial Report 2022-2023

The accumulated benefit obligation differs from the benefit obligation above in that it does not consider
assumptions about future compensation levels. It represents the actuarial present value of future
payments to plan participants using current and past compensation levels. The accumulated benefit
obligation for the pension plan was $1,586.5 million and $1,705.5 million at June 30, 2023 and June
30, 2022, respectively.

Assumptions used in determining the year end obligation of the pension and postretirement plans are:

2023 2022
Weighted-average discount rate -
all plans except unused sick pay plan 4.65% 3.75%
Weighted-average discount rate - unused sick pay plan 4.85% 3.75%
Weighted-average increase in future compensation levels 3.19% 3.18%
Projected health care cost trend rate (pre-65/post-65) 6.82%/13.02% 7.08%/12.73%
Ultimate trend rate (pre-65/post-65) 5.00%/5.00% 5.00%/5.00%
Year ultimate trend rate is achieved 2033 2031
Mortality RP2014 Collar Adj., RP2014 Collar Adj.,
Scale MP2019 Scale MP2019

Changes in assumptions during the year resulted in a net decrease to the pension benefit obligation and
postretirement benefit obligation at June 30, as follows, in thousands of dollars:

2023 2022
Pension Postretirement Pension Postretirement
Discount rate $ (280,114) $ (217,182) $ (525,707) $ (411,253)
Inflation - - 148 9,223
Medicare Part B reimbursement trends - (2,694) - -
Medicare Advantage and EGWP trends - 86,279 - -
Salary scale - - (10,614) 726
Medical trend rates - - - 147,761
$ (280,114) $ (133,597) $ (536,173) $ (253,543)

Net Periodic Benefit Cost

Net periodic benefit cost for the plans includes the following components for the year ended June 30, in
thousands of dollars:

Pension Postretirement
2023 2022 2023 2022
Service cost $ 69,846 $ 101,014 $ 56,129 $ 66,548
Administrative expenses 2,967 2,753 1,400 1,400
Interest cost 73,438 58,060 53,227 38,456
Expected return on plan assets (135,690) (126,466) (59,348) (51,274)
Net amortization:
Prior service cost 1,663 2,725 - -
Net loss - 29,855 - 7,432
Net periodic benefit cost $ 12,224 $ 67,941 $ 51,408 $ 62,562

The service cost component of net periodic benefit cost is included in employee benefits as a part of
operating expenses in the consolidated statement of activities. The components of net periodic benefit

51
cost other than service cost, are included in other increases, which is reported as non-operating activity in
the consolidated statement of activities.

Assumptions used in determining the net periodic benefit cost of the pension and postretirement plans
are:

2023 2022
Weighted-average discount rate -
all plans except unused sick pay plan 3.75% 2.45%
Weighted-average discount rate - unused
sick pay plan 3.75% 2.15%
Expected long-term rate of return 7.25% 7.25%
Weighted-average compensation increase 3.18% 3.13%
Health care cost increase (pre-65/post-65) 7.08%/11.68% 6.22%/5.46%
Ultimate trend rate (pre-65/post-65) 5.00%/5.00% 4.50%/4.50%
Year ultimate trend rate is achieved 2031 2030
Mortality RP2014 Collar Adj., RP2014 Collar Adj.,
Scale MP2019 Scale MP2019

The funded status consists of the cumulative unfunded net periodic benefit cost and the cumulative
change in funded status of defined benefit plans. The components of the change in funded status of
defined benefit plans, which is reported in non-operating results, for the year ended June 30, in
thousands of dollars, include:

Pension Postretirement
2023 2022 2023 2022
Unrecognized net actuarial loss $ (253,304) $ (238,935) $ (34,717) $ (224,234)
Amortization of unrecognized obligation (1,663) (32,580) - (7,432)
$ (254,967) $ (271,515) $ (34,717) $ (231,666)

During fiscal year 2023, the postretirement plans experienced a $93.6 million actuarial loss largely
attributable to a change in retiree cost sharing for healthcare coverage for Medicare-eligible former
hourly employees. The pension plan experienced an actuarial loss of $17.9 million largely attributable to
updated census information. At the same time, both plans experienced assumption change gains as
summarized on the prior page, and asset losses of $5.2 million and $8.7 million for the postretirement
and pension plans, respectively.

During fiscal year 2022, the postretirement plans experienced a $118.0 million actuarial gain largely
attributable to claims experience. The pension plan experienced an actuarial loss of $4.3 million largely
attributable to updated census information. At the same time, both plans experienced assumption change
gains as summarized on the prior page, and asset losses of $147.5 million and $292.8 million for the
postretirement and pension plans, respectively.

52 Yale University Financial Report 2022-2023

The cumulative amounts of these adjustments reported as deductions to net assets in the consolidated
statement of financial position at June 30, in thousands of dollars, include:

Pension Postretirement
2023 2022 2023 2022
Unrecognized net actuarial (gain) loss $ (234,556) $ 18,748 $ (1,362) $ 33,355
Unrecognized prior service cost 3,396 5,059 - -
$ (231,160) $ 23,807 $ (1,362) $ 33,355

Actuarial gains or losses and prior service costs resulting from plan amendments are amortized over the
average remaining years of service of active participants.

Plan Assets
The defined benefit plan assets are valued utilizing the same fair value hierarchy as the university’s
investments as described in Note 1d.

The following table summarizes the fair values of investments by major type held by the staff pension
plan at June 30, 2023 in thousands of dollars:

2023 Level 1 Level 2 Level 3 Total

Investments, at fair value:
Cash and short-term investments $ 30,081 $ - $ - $ 30,081
US government securities 96,681 - - 96,681
Common stock:
Domestic 49,313 - - 49,313
Foreign 1,484 - - 1,484
Total common stock 50,797 - - 50,797
Other equity investments:
Real assets - - 23,918 23,918
Total other equity investments - - 23,918 23,918
Other investments 419 - - 419
Total leveled investments, at fair value $ 177,978 $ - $ 23,918 201,896
Investments at net asset value 1,785,610
Total investments 1,987,506
Liabilities associated with investments $ 17,360 $ 196 $ - 17,556
Net investments 1,969,950
Benefit payable 4,911
Fair value, end of year $ 1,974,861

53
The following table summarizes the fair values of investments by major type held by the staff pension
plan at June 30, 2022 in thousands of dollars:

2022 Level 1 Level 2 Level 3 Total

Investments, at fair value:
Cash and short-term investments $ 32,537 $ - $ - $ 32,537
US government securities 132,298 - - 132,298
Common stock:
Domestic 35,849 - - 35,849
Foreign 1,926 - - 1,926
Total common stock 37,775 - - 37,775
Other equity investments:
Real assets - - 32,334 32,334
Total other equity investments - - 32,334 32,334
Other investments 299 - - 299
Total leveled investments, at fair value $ 202,909 $ - $ 32,334 235,243
Investments at net asset value 1,656,228
Total investments 1,891,471
Liabilities associated with investments $ 141 $ 280 $ - 421
Net investments 1,891,050
Benefit payable 4,748
Fair value, end of year $ 1,895,798

The following table summarizes the fair values of investments by major type held by the retiree health
plan at June 30, 2023 in thousands of dollars:

2023 Level 1 Level 2 Level 3 Total

Investments, at fair value:
Cash and short-term investments $ 40,873 $ - $ - $ 40,873
US government securities 52,491 - - 52,491
Common stock:
Domestic 31,060 - - 31,060
Foreign 14,761 - - 14,761
Total common stock 45,821 - - 45,821
Other investments 334 - - 334
Total leveled investments, at fair value $ 139,519 $ - $ - 139,519
Investments at net asset value 744,468
Total investments 883,987
Liabilities associated with investments $ 6,865 $ 69 $ - 6,934
Net investments, at fair value 877,053
Receivable 2,455
Fair value, end of year $ 874,598

54 Yale University Financial Report 2022-2023

The following table summarizes the fair values of investments by major type held by the retiree health
plan at June 30, 2022 in thousands of dollars:

2022 Level 1 Level 2 Level 3 Total

Investments, at fair value:
Cash and short-term investments $ 16,845 $ - $ - $ 16,845
US government securities 64,605 - - 64,605
Common stock:
Domestic 21,826 - - 21,826
Foreign 15,397 - - 15,397
Total common stock 37,223 - - 37,223
Other investments 164 - - 164
Total leveled investments, at fair value $ 118,837 - $ - 118,837
Investments at net asset value 636,672
Total investments 755,509
Liabilities associated with investments $ 87 $ 178 $ - 265
Net investments, at fair value 755,244
Receivable 1,823
Fair value, end of year $ 753,421

The table below represents the change in fair value measurements for Level 3 investments held by the
staff pension plan for the plan’s year ended June 30, in thousands of dollars. There are no Level 3
investments held by the retiree health plan:

Pension
2023 2022
Beginning balance $ 32,334 $ 21,364
Unrealized (loss) / gain (4,622) 13,727
Purchases - 1,512
Sales (3,794) (4,269)
Ending balance $ 23,918 $ 32,334

The investment objective for the pension and retiree health plans seeks a positive long-term total return
after inflation to meet the university’s current and future plan obligations. Asset allocations for both
plans combine tested theory and informed market judgment to balance investment risks with the need
for high returns. Actual plan asset allocations by category at June 30 are as follows:

Pension Retiree Health

2023 2022 2023 2022
Developed equities 38.4% 28.3% 44.7% 33.8%
Emerging equities 2.5% 4.9% 4.0% 7.5%
Marketable alternatives 16.4% 16.1% 16.7% 16.3%
Fixed income 4.9% 7.0% 6.0% 8.6%
Leveraged buyouts 15.6% 14.2% 8.9% 8.9%
Venture capital 12.2% 17.5% 8.8% 14.0%
Real assets 8.8% 10.5% 6.8% 9.0%
Cash 1.2% 1.5% 4.1% 1.9%

55
The pension and retiree health long-term rate of return assumption is determined by adding expected
inflation to expected long-term real returns of various asset classes, considering expected volatility and
correlation between the returns of various asset classes.

Contributions
Annual contributions for the pension and retiree health plans are determined by the university
considering calculations prepared by the plans’ actuary as well as other factors. Expected contributions
on a cash basis to the retiree health plan in fiscal year 2024 are $121.2 million. There are no
contributions expected to the pension plan in fiscal year 2024.

Benefit Payments
The following estimated benefit payments, which reflect expected future service, are expected to be paid
out of the plans, in thousands of dollars:

Fiscal year Pension Postretirement Total

2024 $ 68,133 $ 44,431 $ 112,564
2025 72,319 48,926 121,245
2026 76,759 52,297 129,056
2027 81,388 56,362 137,750
2028 86,098 60,794 146,892
2029-2033 502,324 368,925 871,249
$ 887,021 $ 631,735 $ 1,518,756

13. Net Assets

The university’s net assets as of June 30, in thousands of dollars, includes:

2023 2022
With Donor Restrictions:
Donor-restricted endowments, perpetual in nature $ 5,883,346 $ 5,530,421
Student loans, perpetual in nature 52,850 52,999
Donor-restricted endowments, subject to spending policy
and appropriation 27,810,806 28,663,194
Board designated endowment, subject to spending policy
and appropriation 327,357 298,908
Unexpended gift balances 1,509,734 1,554,287
Total net assets with donor restrictions $ 35,584,093 $ 36,099,809
Without Donor Restrictions:
Board designated endowment, subject to spending policy
and appropriation $ 6,725,358 $ 6,890,737
Funded status of defined benefit plans (404,111) (743,791)
Derivatives 109,874 (75,334)
Undesignated 2,709,686 2,520,983
Non-controlling interest 3,061 1,621
Total net assets without donor restrictions 9,143,868 8,594,216
Total net assets $ 44,727,961 $ 44,694,025

56 Yale University Financial Report 2022-2023

Yale’s endowment consists of approximately 8,500 funds established for a variety of purposes.

The endowment includes both donor-restricted and board-designated endowment funds. Board
designated endowment funds are designated by the Corporation to function as endowments and include
funds that have donor-imposed purpose restrictions. The university endowment fund composition by
fund type as of June 30, in thousands of dollars, includes:

2023 Without Donor Restrictions With Donor Restrictions Total

Donor-restricted endowment $ - $ 33,694,152 $ 33,694,152
Board-designated endowment 6,725,358 327,357 7,052,715
$ 6,725,358 $ 34,021,509 $ 40,746,867

2022 Without Donor Restrictions With Donor Restrictions Total

Donor-restricted endowment $ - $ 34,193,615 $ 34,193,615
Board-designated endowment 6,890,737 298,908 7,189,645
$ 6,890,737 $ 34,492,523 $ 41,383,260

The classification of endowment net assets by purpose as of June 30, in thousands of dollars, is as
follows:

2023 2022
Undesignated $ 9,070,176 $ 9,437,657
Teaching and research 9,957,821 10,105,276
Facilities and operations 7,426,505 7,463,516
Financial aid 7,278,778 7,369,578
Other specific purposes 7,013,587 7,007,233
$ 40,746,867 $ 41,383,260

Changes in endowment net assets for the fiscal year ended June 30, in thousands of dollars, were:

2023 Without Donor Restrictions With Donor Restrictions Total

Endowment net assets, beginning of year $ 6,890,737 $ 34,492,523 $ 41,383,260
Investment return:
Investment income 74,679 364,137 438,816
Net appreciation 290 319,578 319,868
Total investment return 74,969 683,715 758,684
Contributions 8,316 283,574 291,890
Allocation of endowment spending (311,275) (1,441,100) (1,752,375)
Other increases 62,611 2,797 65,408
Endowment net assets, end of year $ 6,725,358 $ 34,021,509 $ 40,746,867

57
2022 Without Donor Restrictions With Donor Restrictions Total
Endowment net assets, beginning of year $ 7,048,097 $ 35,234,755 $ 42,282,852
Investment return:
Investment income 62,511 309,415 371,926
Net depreciation (12,179) (93,867) (106,046)
Total investment return 50,332 215,548 265,880
Contributions 1,625 299,730 301,355
Allocation of endowment spending (278,461) (1,289,981) (1,568,442)
Other increases 69,144 32,471 101,615
Endowment net assets, end of year $ 6,890,737 $ 34,492,523 $ 41,383,260

14. Functional and Natural Classification of Expenses

The consolidated financial statements report certain categories of expenses that are attributable to one or
more program or supporting functions of the university. Expenses reported by functional categories
include allocations of costs for the operation and maintenance of plant, interest on indebtedness and
depreciation and amortization expense. The university applies various methods to allocate costs among
the program and support functions, the most significant of which is based on the amount of building
space utilized.

Operating expenses by functional and natural classification for the fiscal year ended June 30, in
thousands of dollars, were:

Administration
Patient care and and other
Programmatic other related institutional
2023 support services support Total
Salaries and wages $ 1,459,902 $ 698,754 $ 169,480 $ 2,328,136
Employee benefits 499,294 175,040 70,489 744,823
Depreciation, amortization and interest 410,799 11,770 18,633 441,202
Other operating expenditures 1,077,892 247,447 96,768 1,422,107
Total operating expenses $ 3,447,887 $ 1,133,011 $ 355,370 $ 4,936,268

Administration
Patient care and and other
Programmatic other related institutional
2022 support services support Total
Salaries and wages $ 1,324,115 $ 635,674 $ 155,109 $ 2,114,898
Employee benefits 500,771 185,671 73,349 759,791
Depreciation, amortization and interest 365,717 17,061 25,017 407,795
Other operating expenditures 938,765 244,017 75,034 1,257,816
Total operating expenses $ 3,129,368 $ 1,082,423 $ 328,509 $ 4,540,300

58 Yale University Financial Report 2022-2023

15. Commitments and Contingencies
The university is involved in various legal actions arising in the normal course of activities and is also
subject to periodic audits and inquiries by various regulatory agencies. Although the ultimate outcome is
not determinable at this time, management, after taking into consideration advice of legal counsel,
believes that the resolution of these pending matters should not have a material adverse effect upon the
university's financial position.
The university has outstanding commitments on contracts to construct campus facilities in the
amount of $393.2 million at June 30, 2023. Funding for these projects is expected to come from capital
replacement reserves, gifts, and debt.

16. Subsequent Events

Management has evaluated subsequent events for the period after June 30, 2023, through October 27,
2023, the date the consolidated financial statements were issued. Other than what has been disclosed in
Note 10, there were no subsequent events that occurred after the balance sheet date that have a material
impact on the university’s consolidated financial statements.

59
 ffi

ffi

60 Yale University Financial Report 2022-2023

 Photos: Dan Renzetti, John Hassett, and Tony Fiorini

In July 2022, Yale University opened the In 2017, the provost named an advisory
Jackson School of Global Affairs—the first new committee of eight senior faculty members to
professional school created at the university in assess whether the Jackson Institute should be
more than four decades. Hundreds gathered in converted into an independent professional
Woolsey Hall on October 15, 2022, for an opening school. The committee issued a report
celebration and dedication ceremony to mark the recommending that the institute be made
milestone. into a school of global affairs that provides
the “intellectual underpinning for evidence-
The Jackson School is home to Yale’s master
based policymaking” and is “oriented around
in public policy in global affairs, a master
the principle that solutions to global policy
of advanced study in global affairs and the
challenges are attainable and that scholarly
undergraduate major in global affairs. Jackson’s
research at Yale can change the world.”
interdisciplinary academic programs inspire and
prepare Yale students for global leadership and In 2019, the Yale Board of Trustees approved
service. plans to expand the institute into a professional
school. In January 2022, the university
Prior to becoming a stand-alone professional
announced that the $200 million fundraising
school, the Jackson School was known as the
target for the school’s endowment had been
Jackson Institute for Global Affairs, founded in
reached and that the school opening would take
2010 after a transformative gift from John W. ’67
place in Fall 2022.
and Susan G. Jackson in 2009.
Yale
your.yale.edu/fr22-23