On several fronts, the past 12 months have been both rewarding and challenging for the Virginia Tech Foundation.

Through the continued generosity of our alumni and friends, the university reached record levels of giving of $71.4 million. Included in this total was the largest single gift ever recorded in our history, a $23 million donation of technologies and patents. Our ability to receive and manage such diverse gifts in support of Virginia Tech speaks to the flexibility and responsiveness of the foundation. The foundation also reached a record level of total assets under management, exceeding $541 million. Our endowment also reached an all-time high of $340 million. Endowment value per full-time student exceeded, for the first time, $13,000. Additionally, the foundation provided $38 million in support of the university, including a record $8.1 million dollars of scholarships to deserving students.

The Hotel Roanoke and Conference Center project continued to exceed expectations in both financial and programmatic objectives. The Virginia Tech Corporate Research Center continued to expand, completing Research Building XII, a 50,000-square-foot multi-tenant facility. The CRC also culminated a multi-year economic development effort when Pharming Healthcare announced its intent to open a major biotechnology facility in the park.

The external investment markets proved to be a trying experience for the investment managers of the Virginia Tech Foundation. For example, large-cap stocks, as evidenced in the S&P 500, gained 22.8 percent, while the Russell 3000, indicative of the overall equity market, gained only 1.5 percent. Our portfolio is broadly diversified in order to protect the contributions made by donors in times of turbulent markets. The Virginia Tech Foundation posted a 5 percent total return for the 12 months ending June 30, 1999. Over the past 10 years, our consolidated endowment portfolio has produced an annualized return of 11.7 percent.

Future levels of foundation support to university programs are dependent on the continued generosity and support of the alumni and friends who have given so willingly of their talents and resources in the past year. On behalf of the foundation, and most especially on behalf of our university, we sincerely appreciate your continued commitment to Virginia Tech.

Clifton C. Garvin Jr., Chairman of the Board

Gene A. James, President