Yale is well positioned to attain its goal of financial equilibrium and to make the necessary investments to assure the University's continued success in fulfilling its mission. Total assets have grown to $7.4 billion, with liabilities of $0.9 billion. Highlights for the fiscal year that ended June 30, 1997 include the following:

• The operating budget deficit was $3.8 million. The 1998 operating results are expected to be in balance.
• The Endowment increased to $5.8 billion, primarily as a result of an investment return of 21.8%.
• The University continued to make progress in improving its infrastructure, investing $130.6 million in renovations and construction during the year.
• The refinancing of $136.0 million of its tax-exempt borrowings takes advantage of savings opportunities available through lower fixed interest rates.
• The Yale Campaign just completed was a resounding success. Contributions from alumni and friends topped $1.7 billion over the five-year period of the campaign, exceeding the goal of $1.5 billion.

The total increase in net assets of $937.3 million is primarily the result of Endowment gains and gifts to the Endowment of $47.0 million in 1997 that were received from alumni and friends.

New information systems will come on-line in the next eighteen months that will affect the entire University, enhancing our ability to work effectively and efficiently. The change-over from many of our legacy systems to state-of-the-art client server architecture will take place during 1998 and 1999.