audited financial statements
consolidated financial reports
each of the consolidated financial reports provides an overview of the financial position of the university of dayton with comparative information from the previous year. the overview is prepared by management and should be read in conjunction with the audited financial statements and notes.
the university of dayton is a private roman catholic national research university in dayton, ohio. founded in 1850 by the society of mary (the marianists), it is one of three marianist universities in the nation and the largest private university in ohio.
in fiscal year 2017-18, through bold investments in our people and our mission, the university of dayton continued to strengthen our teaching, research, creative work, and community engagement. in pursuit of our strategic vision to become a university committed to the common good, the university enhanced its excellence and extended its impact in dayton, across the country, and around the world.
each effort helped build our reputation as a top-tier catholic research university dedicated to innovation, imagination and creativity, and allowed us to expand our reach.
led by the powerhouse work of the university of dayton research institute, our research portfolio continues to set new records with a total value of $1 billion for all sponsored research contracts. for fy18, annual sponsored research jumped to $150 million. we earned the top spot nationally for all federally sponsored materials research and development. we again ranked first among all catholic universities for sponsored engineering r&d.
teaching and learning is at the heart of ud’s mission. we made strides on a key priority to make a university of dayton education more accessible and affordable to all by establishing 22 new scholarship funds, most of which are fully endowed, and expanding our ud sinclair academy and flyer promise scholars initiatives. these initiatives are aimed at removing financial barriers for high-achieving students to increase their access to a ud education.
we continue to expand our faculty to serve a growing undergraduate student body, hiring a record 61 new full-time faculty. we also set new records for first-year enrollment, including enrolling one of the most racially and socioeconomically diverse entering classes in our history. we initiated efforts to increase and diversify enrollment of international students through our partnership with shorelight education by creating udayton global.
these investments have delivered meaningful returns. not only are more students enrolling, they’re graduating. we’re proud that during the last three years, 80.4 percent of our first-year students have earned a ud degree within five years. our retention rate for first-year students returning for their sophomore year has surpassed 90 percent. those numbers put us above most of our peers and in the company of selective national universities.
our partnership with 2u, arguably the premier education technology corporation in the world, has enabled us to launch ud graduate degree programs in the school of business administration, the school of law and the school of education and health sciences. the law school is creating one of the nation’s first accredited hybrid juris doctor programs, blending online and on-campus instruction and will enroll its first students in fall 2019.
relationships with community and corporate partners continue to offer real-life experiential learning that allows students to expand their skills and knowledge. our partnership continues with premier health to redevelop the former montgomery county fairgrounds into onmain, an innovative new near downtown district, and we will anchor the redevelopment of the historic dayton arcade by establishing an entrepreneurial learning and working hub.
with all of the great work happening at the university of dayton, we are taking steps to tell the ud story to a larger audience. we launched an updated brand and identity to anchor a new national reputation campaign and increased visibility for the university by joining the american talent initiative and hosting a statewide gubernatorial debate.
looking to the future, we have made great strides in planning our first comprehensive fundraising campaign in nearly 20 years. we made strategic investments in the advancement division to strengthen long-term engagement of alumni and friends that is already paying off with two consecutive years of record fundraising.
on behalf of the entire administration, faculty, and staff, i am proud to share the tangible results of our work to advance the university of dayton in the spirit of our catholic, marianist mission. i look forward to another year of thoughtful financial stewardship and strategic investments as we continue to build a sustainable foundation with growth in excellence and impact.
eric f. spinapresident
as we continue to realize and implement president eric spina’s strategic vision, the university of dayton is making major institutional investments to ensure continued growth and strategic differentiation. these investments include additions of new faculty lines to enable instructional and scholarship excellence as well as seed working capital to support our partnership with our hybrid online education partnership. the university continues to experience double digit growth in sponsored research and increased headcount to support several burgeoning programs. as we prepare to expand our fundraising capacity and our ability to market ourselves on a national scale, we added significant resources to our advancement and marketing & communications functions, respectively.
it is notable that while making such significant investments, the university was able to continue its long track record of strong operating performance, with a core unrestricted operating margin of 5.5% and total operating margin of 8.2%. we expect to see further strengthening in the five-year time horizon as returns from these investments begin to accelerate and major revenue categories continue to diversify.
we continue to strengthen the balance sheet and increase its value to nearly $1.8 billion through asset growth in long term investments driven by market returns in excess of our long term target of 7%. we also made multiple additions to our physical plant, including the ud arena renovation, adele center and the beginning of major renovations to roesch library. liabilities also grew by more than $20 million, however, our new long term debt issuance of $75 million was offset by other debt retirement and reductions in several liability categories, including post retirement benefits, deferred revenue, and accounts payable.
the market recognized our continued strength during our debt issuance in april. s&p and moody’s deemed our outlook to be stable and affirmed our ratings of a+ and a2, respectively.
the following discussion and analysis provides an overview of the financial position of the university of dayton for the year ended june 30, 2018 with comparative information for the previous year ended june 30, 2017. this overview has been prepared by management and should be read in conjunction with the audited financial statements and the notes that follow this section.
andrew t. horner
executive vice president for business &