Spring 2020 Update to the Rensselaer Community
From the President's Desk
Our journey of transformation continues as we realize the mission of Rensselaer in new and tangible ways. We continue to reach milestones and build momentum as we grow and evolve. We are off to a strong start in 2020, and I look forward to the rich and rewarding semester ahead of us. I would like to take this opportunity to share a few highlights of where we are as a university.
After years of planning, and two successful pilots, this summer we broke down the barriers of the traditional academic calendar and fully implemented The Arch, our unique program for expanding the perspective of our rising juniors with personal and professional development opportunities. More than 210 academic courses, numerous field trips, evening programs, and pop-up courses were provided during the inaugural summer. As the only cohort on campus during their summer semester, rising juniors had enhanced access to our world-class research facilities, and undivided attention from members of the faculty and administration. They were also provided the opportunity to experience the Capital Region's offerings during the spectacular summer season.
This fall, 229 of the 464 students that were away chose to pursue an internship or co-op at one of the leading companies who have partnered with the Center for Career and Professional Development (CCPD). Students secured opportunities within the United States and throughout the globe. Of the 188 positions secured in the United States, the majority were located in the New York, Florida, Texas, and California. Of the 41 students who secured an international position, 33 were located in Asia, five in Europe, two in Bermuda, and one in Africa. Notable domestic companies that our students secured away opportunities with include Hasbro, ExxonMobil, Johns Hopkins Applied Physics Laboratory, Johnson & Johnson, Eli Lilly, Disneyland Resort, Google, Comcast, Cisco Systems Inc., and Collins Aerospace. Internationally, students gained experience at top companies such as BMW, Bosch, Oxford Instruments, Applied Materials, Deloitte, BIOS, and OSG Group.
As a direct result of The Arch, we have doubled the number of students who partake in internships and co-ops. The experience students gain from these opportunities makes them highly employable at the time of graduation and provides them a truly unique developmental approach to education rarely found at the undergraduate level.
The demand for a Rensselaer education continues to be strong. We were able to select, and enroll, an extremely talented and diverse group of students. The 1,665 newly enrolled students represent the strongest academic incoming class in Institute history. The class average on the SAT was 1411 (based on the 1600 scale). Ten students had perfect ACT scores, 78 were valedictorians or salutatorians of their high school graduating class, and approximately 64% ranked in the top 10% of their class. The newest members of the Rensselaer family hail from 42 states, the District of Columbia, Puerto Rico, and 23 countries outside the United States.
Our students are attracted to Rensselaer because of the exceptional quality of our faculty, the strength and relevance of our distinctive programs, and our rising reputation. I thank our deans and department chairs for their leadership, and all of our faculty for their expertise, collaboration, and commitment.
This fall we welcomed 15 new professors to the faculty for the 2019-2020 academic year, each of whom bring new areas of discipline and perspectives to Rensselaer. As The New Polytechnic, there are two key tenets which offer the structural underpinning for academic decisions made at the university. First, we are collaborative and multidisciplinary, because the greatest opportunities and challenges cannot be addressed by even the most brilliant person working alone, nor by a single discipline, sector, nation, or generation. The second factor that guides us is our focus on the most pressing global challenges surrounding our food, water, and energy supplies; our need for sustainable and resilient infrastructure, structures, and materials; human health and the mitigation of disease; national and global security; the allocation of valuable natural resources; and a changing climate. Our new faculty members allow us to further unite a multiplicity of perspectives to do great work.
In September, we were honored to be listed among the best employers in New York State in the inaugural Forbes list of America's best-in-state employers. Our staff deserve this designation for the outstanding work they do to improve administrative and service support for the educational, research, and student life dimensions of the Rensselaer experience. We have created a high-performing work culture and our staff contribute greatly to our results by focusing on the highest priorities, by achieving new levels of efficiency, and by offering creative solutions for more effective resource utilization. I thank everyone in the Rensselaer community for all you do in your respective roles to further our mission.
In December, we unveiled the most powerful supercomputer to debut on the November 2019 Top500 ranking of supercomputers, also the most powerful supercomputer in New York State, at the Center for Computational Innovations (CCI). Part of a collaboration between IBM, Empire State Development (ESD), and NY CREATES, the eight petaflop IBM POWER9-equipped AI supercomputer is configured to help enable users to explore new AI applications and accelerate economic development from New York's smallest startups to its largest enterprises.
We named the supercomputer AiMOS (short for Artificial Intelligence Multiprocessing Optimized System) in honor of Rensselaer co-founder Amos Eaton. AiMOS is the most powerful supercomputer housed at a private university, the 24th most powerful supercomputer in the world, and third-most energy efficient.
AiMOS will serve as a test bed for the New York State-IBM Research AI Hardware Center, which aims to advance the development of computing chips and systems that are designed to push the boundaries of AI performance. AiMOS will provide the modeling, simulation, and computation necessary to support the development of this hardware. AiMOS was built using a heterogeneous system architecture that includes IBM POWER9 CPUs and NVIDIA GPUs, the same technology as the world's smartest supercomputers, the US Dept. of Energy's Summit and Sierra supercomputers. This enables AiMOS with a capacity of eight quadrillion calculations per second.
As the home of one of the top high-performance computing systems in the world, we are excited to accelerate our ongoing research in AI, deep learning, and in fields across a broad intellectual front. AiMOS will support the work of Rensselaer faculty, students, and staff who are engaged in a number of ongoing collaborations that employ and advance AI technology. These initiatives include the Rensselaer-IBM Artificial Intelligence Research Collaboration (AIRC), which brings researchers at both institutions together to explore new frontiers in AI, Cognitive and Immersive Systems Lab (CISL), and The Jefferson Project, which combines Internet of Things technology and powerful analytics to help manage and protect one of New York's largest lakes, while creating a data-based blueprint for preserving bodies of fresh water around the globe.
Higher Education Landscape and Financial Results
The continued focus on the execution of the Rensselaer Plan 2024, including our strategic investments in our students, faculty, and the campus, has enabled us to strengthen our financial position and be well-positioned to address the changing higher education landscape. Across higher education, universities are facing a multitude of challenges including changing demographics, concerns over affordability, and increasing costs. At the same time, research and fundraising opportunities, and strong capital markets, provide opportunities to strengthen the university's financial position. We continue to leverage and expand our partnerships with the corporate community, donors, and alumni to enhance our research programs and develop unique opportunities for our students, and are well positioned to address the changing environment in which we operate.
Driven by continued strong demand for a Rensselaer education and sound fiscal management, Fiscal Year 2019 results reflect a three percent increase in net assets, an operating result of $32.7 million - the strongest in our history - and exceptional cash flows from operations of nearly $33 million.
|Cash Flow from Operations (USD thousands)|
|Operating Result (USD thousands)|
We continue to invest in capital improvements to support faculty, academic programs and infrastructure. In fiscal year 2019, nearly $19 million was invested throughout the campus to support the goals of the Rensselaer Plan 2024. These investments, along with all of the investments made over the past 20 years, have enhanced the student experience, enabled the development of new academic programs, and expanded our research into new areas.
We remain committed to our retirees and to ensuring the pension plan is adequately funded to meet our commitments. In Fiscal Year 2019, $12.8 million was contributed to the plan. During 2019 we continued to experience volatility in the pension liability driven by changes in key actuarial assumptions, such as the discount rate utilized for determining future obligations, the assumed rate of investment return on pension assets, and participant life expectancies. Through the strategic focus on the management of plan assets and continued contributions, over time we have seen significant reductions in the pension liability. The pension liability was $104 million at June 30, 2019, a reduction of nearly $50 million over the past four fiscal years.
In Fiscal Year 2017, we committed to "The Crossover," an eight-point cost-saving and asset-generation plan designed to consolidate and strengthen the balance sheet. A key milestone in this plan was to have long-term debt and endowment equalized by Fiscal Year 2020. While we achieved this goal by the end of Fiscal Year 2018, we remain focused on continuing to grow the endowment, while at the same time reducing long-term debt. As of June 30, 2019, the endowment exceeded long-term debt by over $35 million.
|Long Term Debt|
Fiscal Year 2020 Outlook
In Fiscal Year 2020, we have continued to strengthen the balance sheet and our financial position through the refunding of our existing 2010 tax-exempt debt. The transaction is expected to be completed in June 2020 and will enable us to further reduce our ongoing interest expense, limit our long-term interest rate risk, and fully amortize the debt over the terms of the obligations. In Fiscal Year 2020, including the benefit of the tax-exempt refunding of 2010 tax-exempt bonds, we expect to reduce long-term debt by $63 million. We anticipate Fiscal Year 2020 results will moderate relative to Fiscal Year 2019, as the launch of the Arch is now complete and undergraduate enrollments have stabilized. Additionally, we expect to contribute approximately $7.4 million to the defined benefit plan in Fiscal Year 2020, all of which will be funded with cash from operations.
I look forward to continuing to work with the Rensselaer community as we address the global challenges that face the world of the 21st century. Together we will change lives, advance society, and, indeed, change the world.