Response to Carol Quillen - November 20, 2009

I will reply to two factual points:

• Financial Leverage: I used a standard definition of leverage, as assets divided by equity. On June 30, 2009 Rice had $3990M in investments and $726M in debt, implying equity of $3264M and leverage ratio of 1.22:1.00. This is what my leverage figure of 120% referred to. Instead of computing financial equity as investments minus debt, one could compute it as net assets minus property and equipment. The result is essentially the same. (See Rice 2009 Financial Statement.)
• Faculty Role: A recent refrain by the Rice Administration is that the Rice faculty also objected to the establishment of the Shepherd School and the Jones School. No doubt, the establishment of these schools was accompanied by a vigorous debate, but the introduction of the new degree programs was approved by the Rice faculty. For example, see Minutes of the Faculty, April 28, 1975, where the five-year program leading to the Bachelor's of Music and the Master's of Music degrees was approved in first reading by the faculty with only a single negative vote. Similarly, see Minutes of the Faculty, February 22, 1977, where the program for the Master of Business and Public Management degree was approved in second reading by the faculty unanimously. In contast, the discussion of the proposed Rice-BCM merger has so far been silent on whether the Rice faculty will be asked to approved the degrees granted by Rice's medical school, once BCM becomes part of Rice.

Moshe Vardi