Berklee Consolidated Financial Statements: May 31, 2022, and 2021

Letter from the Assistant Vice President/ Controller of Finance

I am pleased to share that Berklee is coming out of the pandemic in a position of financial strength. We ended fiscal year 2022 with an operating surplus of $16.9 million, or 5.4% margin, which is greater than our annual targeted margin of 2–4%. Total operating revenues of $313.3 million were up almost $76 million or 32% over the original budget. Net tuition and fees of $273 million made up 87% of total revenues, and this was a 41% increase from fiscal year 2021. The increase was primarily due to the enrollment increase of 12%, a return to full capacity for room and board activities, and the inaugural year of Berklee NYC’s Master of Arts in creative media and technology, which far surpassed its enrollment goal of 20 students with 79 students enrolled.

Returning to campus full time was not an easy task. This took many hours of planning, testing, and careful consideration to ensure the health of our students, staff, and faculty. Some of the increase in expense directly relates to the resumption of on-campus life. These expenses include COVID-19 related infrastructure costs including Broad testing, Tufts medical support, extra cleaning protocols, and restructuring of offices and staff setup to support the return to work for a new post-COVID-19 hybrid modality.

Fiscal year 2022 total operating expenses of $296 million were up almost $54 million or 22% over prior year, but were 2.1% below the original budgeted amount of $303 million. A personnel expense increase of $22 million was largely due to a return to in-person activity, staff and faculty returning from furlough or reduced hours, and the removal of the hiring freeze, along with equity adjustments, bonuses, and staff promotions.

Materials, supplies, and other non-personnel expenses of $109 million were 13.5% over prior year while staying $7.2 million below the original approved budget. This was an increase of $22.3 million from 2021.

Cash flow has been consistent since the return to campus and with the increase in enrollment and tuition rates. This has allowed us to return to investing funds in capital and financial investments. A major purchase in fiscal year 2022 was 12 Hemenway, which was purchased in cash for $18 million, and we plan to invest an additional $14 million in cash in renovations.

At year end, our balance sheet remains strong, however, has declined due to the market losses taken in our endowment and pension assets. The endowment valuation of $407 million versus $447 million in the prior year reflects market performance with year-to-date losses averaging 4% for both endowment and pension. Unrestricted net assets are 70% of the total, which is positive relative to most institutions. 

We are excited about the year to come as we continue to grow and emerge from the pandemic stronger and well positioned to continue to invest in Berklee. For 2023 we are focused on our strategic investment priorities to ensure high quality education and affordability, and enhancing the student experience. We are focused on optimizing global presence while continuing to expand online education and demographic reach and hope to continue enrollment growth across all campuses.

View Berklee's consolidated financial statements.

Tayla Burke

Assistant Vice President / Controller of Finance