MESSAGE FROM THE CHIEF OPERATING OFFICER

Despite challenging economic markets, the Virginia Tech Foundation maintained strong financial support of the university and received record contributions during the past year. Concurrently, new real estate developments were initiated to support university strategic initiatives.

Financial support of university programs totaled $95.3 million as compared to $77.9 million in the previous year. Revenues and investment activity for the year totaled $145.7 million, a decrease of 28 percent compared to the previous year. Total assets decreased to $926.0 million from $940.9 million for the previous year. Net assets increased to $722 million to $707.3 million. The value of the Virginia Tech endowment was $527.6 million at the end of the fiscal year. The consolidated endowment earned -0.7 percent, considerably in excess of the domestic and international equity markets.

Real estate development to support strategic initiatives of the university moved forward with several projects. All governmental approvals were obtained and construction will soon begin on a university research center in Arlington, proximate to federal research agencies that support substantial components of the university´s research agenda. Armada Hoffler and Bruce Smith Enterprise began redevelopment of the former Red Lion Inn property, which will generate income to the foundation through a land-lease and carried interest. Two buildings neared completion in the Virginia Tech Corporate Research Center, which will provide facilities for university research centers, while construction began on two additional buildings for private company tenants. A $7 million interior upgrade at Hotel Roanoke was completed. Construction started on a clubhouse for the Pete Dye River Course, home of the university´s intercollegiate gold team.

The foundation continues to engage in the regional community in ways that contribute to the advancement of the university. Financial support was provided for preliminary work on behalf of the proposed Virginia Tech Carilion School of Medicine and Research Institute. The foundation participated in the consortium providing debt financing for construction of the Taubman Museum of Art in Roanoke, Virginia. Investment was made through the NewVa Investment Fund in four early-stage companies. Planning was initiated for Phase II of the Virginia Tech Corporate Research Center, which will provide space for additional companies and research centers. Foundation employees received the United Way´s Special Achievement Award and volunteered their time and talent to other community service organizations.

The impact of private support is felt daily in the lives of Virginia Tech students and faculty. Financial aid of $18.4 million was provided, which enabled capable, deserving students to begin or continue their education. More than $35.7 million went to academic programs, faculty support, and university facilities. The significance of private support is felt across the university and by those it serves throughout the state, nation, and world.

Sincerely,

Raymond D. Smoot Jr.

Chief Operating Officer and
Secretary-Treasurer