Pepperdine University Annual Report 2005

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Annual Report 2005–2006

Our 2005 annual report is themed, “Celebrating the Human Spirit.” On the cover and throughout these pages, we are pleased to spotlight several students, facult y, staff, and generous donors whose lives exemplify our theme.

The first is Helen Young.

Helen Young Helen Young, a University Life Regent, graduated in 1939 from George Pepperdine College’s second graduating class. Wife of the late M. Norvel Young, she has served the University community for more than 50 years. The Youngs’ love, devotion, and sacrifice for the school was recognized in October 2005 with the dedication of the M. Norvel and Helen M. Young Center on the Drescher Graduate Campus. The Young Center is home to the Graduate School of Education and Psychology, and Pepperdine’s Center for the Family.

Reaching up, reaching beyond, always pressing forward: this is the passion of the human spirit.

— Andrew K. Benton April 12, 2005

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Message from the CHAIRMAN 2

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There is a sense in which the University and the public have come to expect great things from Pepperdine…

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t hardly seems possible that five years have passed since Andrew K. Benton was inaugurated as Pepperdine’s seventh president. During that time, the Pepperdine community has celebrated several extraordinary accomplishments, strengthening the University in every area of academic and student life.

President Benton has quietly and confidently led his administrative team in advancing each of the goals he articulated in his inaugural address: financial resources, diversity, strengthening Pepperdine’s heritage of faith, fostering a sense of community, and, leading the University’s quest for enhanced scholarship and culture.

While all the initiatives have been pursued on multiple fronts, we have emphasized them individually on an annual basis.

This past year we focused on the subject of scholarship and culture. In reality, the entire University has always worked tirelessly to improve scholarship and culture—building the faculty, supporting research and writing, and giving our students an educational experience that could only be had at Pepperdine, a place where concern for mind, body, and spirit is a defining characteristic.

There is a sense in which the University and the public have come to expect great things from Pepperdine and these past five years have fulfilled those high expectations. In this report you will read about many of the advancements that have been made by this truly blessed institution.

I count it an honor to be affiliated with Pepperdine and an even greater honor to serve as chairman of such a distinguished Board of Regents. The Pepperdine Regents are people who accept the challenges and responsibilities of supporting the University in “reaching up, reaching beyond, always pressing forward,” in the words of President Benton. My congratulations go to the fine faculty, the faithful staff, and the talented leadership team assembled by the president, as well as the many alumni and friends of the University who have joined hands to bring about another record year for Pepperdine.

Edwin L. Biggers

Chairman, Board of Regents

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ur Nation has developed over time on the ambitions of men and women inspired by determination, commitment to progress, discovery, and renewed faith. Since that time, and inspired by the spirit of those giants in history, the world has seen all manner of scholarly and cultural advancements. When we consider this heritage we conclude that the most enduring legacy we may leave future generations is a commitment to academic excellence, to Christian faith and, of course, to the human spirit.

We hope and we believe our accomplishments at Pepperdine University might be considered some of the best brought to the world’s window. True spiritual expression, productivity, scientific discovery, art, music, literature, athletic competition, and much more are Pepperdine’s contributions of scholarship and culture.

These broad fields of study represent the daily work and hourly joy of what we do at Pepperdine. Moreover, they represent the determination and the aspirations of our impressive and talented men and women.

When we speak of strengthening scholarship and culture, we are referring in large part to reason, learning and research, and the ambitions we see everyday in our University community.

I believe that scholarship is a building block of progress; it is the key tool to breakthroughs and discoveries. Scholarship in our world—at our University—is proof that the life of the mind is alive and well. It gives power to ideas and casts a determined vision for what lies ahead.

Our emphasis also includes culture. Every community in the world has a culture. That culture, wherever it is, embodies the values, virtues, and quality of life admired and demonstrated by people who form that culture. Our continued aspirations for culture at Pepperdine are not so very different from our intended legacy for the world; we are a community in pursuit of truth. We are tirelessly dedicated to diversity, excellence, and faith; a culture C.S. Lewis defined as “a rarity, attained with difficulty and easily lost.”

Scholarship and culture, as we view them, can truly be summarized as products of mind and heart, soul, strength and faith; products of the human spirit. From discovery to creativity, from exploration to invention, astronomy to music, the history of our planet is full of examples of this truth and the heroes who have emulated it. At Pepperdine, we are proud to introduce more such heroes to the world. You will read about many of them here.

At Pepperdine, we also have a challenge to be excellent.

We believe the vision of strengthening our scholarship and of deepening our appreciation for­—and contribution to—culture is a large part of that challenge. I truly believe it is part of what excites and motivates us all.

During the last two decades Pepperdine conducted two very successful campaigns—“The Wave of Excellence” and “Challenged to Lead.” I believe the strong call to excellence in both campaigns succeeded because it stirred the hearts of every person involved at the deepest human level. The response to that campaign demonstrated a truth discovered by Austrian writer Stefan Zweig. Zweig, forced to flee his beloved Europe in the dark days of the late 1930s and early 1940s, said “only that which points the human spirit beyond its own limitations into what is universally human gives the individual strength superior to his own.”

Reaching up, reaching beyond and always pressing forward is the passion of the human spirit. It is the passion which motivates our work today. In that spirit, we celebrate our successes and give thanks to God for the many people who support our mission of excellence.

Andrew K. Benton

President

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Message from the President

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Education is for improving the lives of others and for leaving your community and world better than you found it.

—Marian Wright Edelman

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f the world’s leading architects and designers were challenged to create a seminal monument to celebrate the human spirit, you can imagine the great diversity of ideas that might emerge. Some might project such a monument in terms of its boldness and sheer height; an imposing tower of power and strength. Others might suggest a

monument much more subtle in nature, more inviting of individual inquiry and interpretation.

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One of our chief goals at Pepperdine University is to strengthen and sustain our History has seen creation of many such monuments honoring the human spirit. Arguably, the Statue of Liberty is one of the best. Unlike monuments which honor individuals or memorialize events, the Statue of Liberty honors an ideal. That humankind cherishes ideals is, in itself, an enduring characteristic not only of an enduring human spirit, but of humanity authored by God. One of our chief goals at Pepperdine University is to strengthen and sustain our emphasis on scholarship and culture in the context of Christian higher education. We are committed to seeing each faculty member rise among his or her peers in scholarship and thinking; to promoting nationally recognized scholarship in support of excellence in teaching. Teaching is, after all, our first priority.

As Pepperdine remains committed to preparing our students for meaningful careers, we are equally committed to helping them develop as citizens, as philanthropists, and as individuals of faith and compassion. In short, we are committed to helping our students become better people. We believe that our commitment to enriching students’ lives in all aspects of mind, body, and spirit defines Pepperdine’s special place in American higher education. Our love and concern for each other as human beings created in the image of God further distinguishes Pepperdine from many other institutions of higher learning.

We do not wish to be a dispensary of knowledge, some giant intellectual vending machine, but rather a scholarly community where teachers and students study together, explore together, invent, compose, create, discover, and grow together. This is the idea of higher learning in the classical sense, where professors form an inner circle of intellectual fellowship and support, and students form an outer circle of discipleship and scholarship. From their mentors, students learn to think critically and creatively, examining and celebrating the feats and failures of human history. And at Pepperdine, this study does not happen in isolation; it happens in community. Here, there is shared excitement and a fellowship of learning that permeates the atmosphere when and where our people come together.

E. Chadwick MOONEY E. Chadwick Mooney is a Pepperdine Life Associate and University Board member. Mooney’s love for golf and for the University has resulted in his endowment of an annual athletic scholarship for one of Pepperdine’s golf scholar-athletes. This is one of many opportunities taken by this director of investments in his consistent support of charitable and philanthropic causes.

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emphasis on scholarship and culture in the context of Christian higher education.

Not only do Pepperdine students like the quality education they get here, but they appreciate being valued by faculty and staff. Education at Pepperdine is not restricted to the classroom, and neither is the care and attention our faculty members give students. It is true, whether in Malibu or Los Angeles, Heidelberg, Hong Kong, Buenos Aires, or any of our campuses circling the globe.

Perhaps scholarship and culture may be thought of as “Olympics for the mind and heart,” where professors and students, indeed, where ordinary people strive for excellence in the pursuit of knowledge and creativity, in the service of humanity. In that sense, Pepperdine has been a “competitor” from the beginning.

In its first year, 1937, Pepperdine sought and received academic accreditation, an amazing feat.

Throughout its early days, the small institution recruited and retained fine teachers and staff members who served with heart, hand, and mind. Though its reputation did not extend far beyond the Los Angeles campus then, Pepperdine College was an excellent school that produced hundreds of schoolteachers and school administrators as well as counselors, ministers, missionaries, and businesspeople. As the decades passed, the college became a university and competed at higher and higher levels. Today, the University has a well-deserved entry in the “World Olympics” of education, being nationally and internationally ranked among the world’s most prestigious institutions of higher learning.

However, while Pepperdine has been placed in the company of some of the finest institutions of higher learning in America, it sees itself in a category of one. It tries to imitate no other university. It is not similar to the secular institutions or other faith-based schools at the top of the various “best colleges” polls. Pepperdine’s true competition is with itself, trying to better itself year by year, in every aspect of education. In other words, the University constantly strives to be a better Pepperdine.

And so, this year, in this annual report, we showcase the strengthening of scholarship and culture at Pepperdine. We honor the achievements of the University and its people. Through this small monument of our own, Pepperdine University celebrates the human spirit.

Leon Dixson Leon Dixson is drawn to leadership, having served as Seaver College’s Student Government Association class senator as a sophomore, class president during his junior year, and student body president in his senior year. The business administration major also studied abroad with Pepperdine’s Heidelberg and Florence programs. After graduating in April, he plans to volunteer or work in the legal field before going to law school.

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Re v ie w A Very Good Year

Pepperdine recorded a number of significant achievements in 2005 which reflect the University’s excellence in academic enterprises, athletic competition, and other important areas which strengthen the foundation for continued success in the years ahead. Here is a sampling:

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Welcome to Pepperdine University

Law School Rising

Incoming Pepperdine freshman and transfer students in August 2005 numbered 837, chosen from among more than 7,800 applications—the largest applicant pool in Seaver College history.

The law school’s U.S. News & World Report national ranking jumped 22 places to Number 77. This was the most significant rise in the rankings of any law school in the nation.

Wave Relief

A Global Perspective

Moving quickly in the wake of Hurricane Katrina, the University created both the Wave Relief Web site (www.pepperdine.edu/waverelief ), dedicated to relief efforts for Katrina victims, and the Student Assistance Program, aimed at providing housing and temporary enrollment for undergraduate and graduate students impacted by the devastation.

The Graziadio School of Business and Management announced a partnership with Deutsche Bank. The two organizations plan to initiate global change through the European Foundation for Management Development’s global responsibility initiative program. Pepperdine is the only American university invited to join EFMD.

Generous Friends Thanks to an initial gift from an anonymous donor, the Chester H. McCall Endowed Scholarship Fund for doctoral students in the Organizational Leadership program was established at the Graduate School of Education The Forstmann Scholarship recipients and Psychology. Four new ethnic diversity scholarships were also developed. The School of Public Policy announced the establishment of the Forstmann Scholarships thanks to a generous gift of $1 million from the school’s longtime friend, philanthropist Theodore J. Forstmann. Twenty-four students will receive significant scholarship assistance over the next two academic years, and an additional 10 to 15 students will receive funding for research projects.

Celebrating Scholarship The prestigious Fulbright Scholarship was awarded to current full-time MBA student Kari Filerman and Seaver 2005 alumna Evelyn Baca. A total of over 30 Seaver undergraduates applied for nationally competitive fellowships, with Bryceson Tenold winning the Levy Fellowship at Hebrew University in Israel.

Teaching for Amer ica Pepperdine had the highest acceptance rates in its region for applicants to the Teach for America program. Five out of nine Pepperdine students were accepted into this competitive program, which accepts less than 30 percent of applicants nationwide.

National Champions Pepperdine won the NCAA National Collegiate Men’s Volleyball Championship in May. The Waves, with their fifth national volleyball title, became the first team ever to defeat UCLA in a championship match on the Bruins’ home court.

A Presidential Wave In a visit to the White House during NCAA Champions Day, the Pepperdine men’s volleyball team presented President George W. Bush with “Surfboard One,” a Dewey Weber surfboard. The custom-designed short board honored the President as “team captain” and the story and photos appeared around the world.

The Pepperdine NCAA championship volleyball team with President Bush

Kari FILERMAN Pepperdine graduate student Kari Filerman of Agoura Hills has been awarded a Fulbright scholarship to work in Mexico on U.S. acquisitions to gain a higher share in the Hispanic banking market. Filerman was selected on the basis of her academic and professional achievement, as well as for having demonstrated leadership potential in business management.

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Praise for the Business School

BSLA Continues to Dominate

The Graziadio School’s full-time MBA program in 2005 was ranked second in the world for its organizational behavior program based on alumni recommendations. In May, the Los Angeles Business Journal reported that the school was named the “Pacesetter” among all regional business schools.

The Black Law Students Association’s (BSLA) national trial tournament was also held in the spring in Seattle where, for the second straight year, a Pepperdine team won the regional championship.

Voted “Most Beautiful Campus”

Here is a sample of other pride points owing to a tremendous year for Pepperdine and for its five schools.

According to The Princeton Review’s 2006 annual college guide, Pepperdine University has the “most beautiful campus” in the nation. This edition’s rankings were based on a survey of over 100,000 students nationwide.

U n iv e rsi t y-w i d e

Alumni Unite

Howard A. White Award

Riding a wave of enthusiasm in support for Pepperdine, alumni chapters, affinity groups, and involvement by alumni at athletic events increased in 2005, along with alumni giving to the annual fund. From mentoring students to helping alumni with their careers, alumni at Pepperdine from each of the five schools continued to contribute to the University in a variety of meaningful ways.

Ten full-time faculty members representing all five of Pepperdine University’s schools were recipients of the 2005 Howard A. White Award for Teaching Excellence. Named in honor of Pepperdine’s fifth president who skillfully served for 30 years as teacher and administrator, the award recognized Douglas Kmiec, Gordon Lloyd, Priscilla MacRae, Farzin Madjidi, Marshall Nickles, Milton Pullen, Christopher Soper, Kendra Killpatrick, Regan Schaffer, and Ariff Kachra.

Opera Students Shine Several Flora Thornton Opera Program students are on the path to professional opera success like their Pepperdine predecessors. Seaver students Margaret Lane and LaShawna Ngadiuba were accepted into two prominent summer programs in Austria. Soprano Christin Wismann received a continued vocal study award from Conejo Valley-based Village Voices Chorale. Fellow soprano Kelsie Villahermosa was one of three Pasadena Fine Arts Club vocal competition winners and one of six national finalists in the National Opera Association (NOA) vocal competition held in New York at the organization’s 50th anniversary convention. Professor Henry Price presented a lifetime achievement award to Beverly Sills (in absentia) at the NOA’s Golden Anniversary Banquet.

N.T. Wr ight Launches Lecture Series N.T. (Tom) Wright, one of today’s best-known and respected New Testament scholars and Bishop of Durham in the Church of England, launched the inaugural Frank Pack Distinguished Christian Scholar L ec tu re Pro g ram and S eaver College’s 2005 Distinguished Lecture Series in January.

The World’s Greatest Classical Guitar Competition The Ahmanson Charitable Community Trust provided major funding to help Pepperdine create the world’s preeminent guitar competition—the Parkening International Guitar Competition, named for and directed by Distinguished Faculty member Christopher Parkening.

An Outpouring of Response Pepperdine’s dedication to service produced large-scale relief efforts from the entire University community. The devastation caused by the tsunamis in Southeast Asia in December 2004 spurred students, staff, and faculty to fundraising action. Six Pepperdine students raised money and flew to Sri Lanka to volunteer for a month with the nonprofit organization Children of Joy. And following Hurricane Katrina, Pepperdine provided support, food, and clothing to hurricane victims. At its annual Step Forward Day, students delivered donations of 300 $50-gift cards plus water and toiletries to evacuees at the Los Angeles Dream Center. Pepperdine athletics assisted with collections and donations. Pepperdine’s Rotary Club sponsored “Pepperdine 4 Katrina,” a nonprofit eBay auctioning organization created to help the victims of Hurricane Katrina.

Bishop N. T. Wright

Terry SCHROEDER Terry Schroeder has known success as a member of Pepperdine’s water polo team, as the team’s coach for 20 years, and as a licensed chiropractor. As a competitive water polo player, Schroeder played on four U.S. Olympic teams, including three times as team captain -- winning the Silver Medal twice.

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Students Tes tify Befor e Cong r ess In April, an unprecedented event took place when two undergraduates from Seaver college testified on Capitol Hill within hours of each other, on the same topic: federal student aid funding. Ileana Abreu and Trinity Thorpe shared how they had personally benefited from assistance.

Building a “Pepperdine House” Pepperdine joined with the Wood-Claeyssens Foundation to cosponsor funding for one of six Habitat for Humanity (HFH) houses called “Pierre’s Place: The Pepperdine House.” The Pepperdine House will be a legacy to two men of service and vision, Pierre Claeyssens and George Pepperdine.

Pepperdine People on the Move In May 2005, Christopher Soper, chair of Seaver College’s Social Science Division, became director of Pepperdine’s Center for Faith and Learning. The center was created six years ago, thanks to the efforts of its visionary founding director, Distinguished Professor of Religion Richard Hughes, who is devoting his time to teaching and to a major book project. The center provides support for faculty in all five schools of the University as Professor Richard Hughes they seek to engage in cuttingedge, original scholarship and classroom teaching within a framework of Christian values and beliefs. Support from The Lilly Endowment allows the Pepperdine Voyage, a Lilly vocation project, to continue its work under the direction of University Chaplain D’Esta Love.

Payson Librar y Upgrades Enhancements designed to assist students and faculty with their learning, teaching, and research needs have been added to Payson Library. Services now include new computers, a new electronic course reserve option, a virtual reference service, a new federated database, an improved article linker service, expedited delivery service, and an enhanced online catalog.

Connections to Community Improving services to students, faculty and staff through enhanced functionality and more efficient access to information is what the new “Connections 2 Community” (C2C) project is all about. Groundwork has begun and implementation will take place in phases from July 2006 through August 2008 replacing existing student, human resources, and finance applications with Oracle-PeopleSoft software.

Home Again After days of pounding rain, the skies cleared for Pepperdine’s Homecoming 2005 festivities in February. The event united a record number of alumni from all of Pepperdine’s schools, including George Pepperdine College, and for the first time, a special London International Program reunion took place.

Tim Russer t Delivers Keynote Address Tim Russert, moderator of NBC’s Meet the Press, was the keynote speaker at Pepperdine University’s 29th annual Pepperdine Associates Dinner whose theme was, “Celebrating the Human Spirit.”

The black-tie event honored the University’s extended family of friends, alumni, and benefactors in April at the Beverly Hilton Hotel in Beverly Hills.

Tim Russert

Emilio and Gloria Estefan Honored Pepperdine’s Hispanic Council hosted its second annual American Spirit Awards Dinner and Scholarship Benefit in August at the Regent Beverly Wilshire Hotel in Beverly Hills, recognizing leadership and service that exemplifies compassion, tolerance, and understanding.

S E AV E R C O L L E G E Sports Medicine Degree Launched A newly created bachelor of arts degree has been added to the sports medicine program. Endorsed by the American College of Sports Medicine, the new degree is designed for students seeking employment in the fitness, health-promotion, wellness, or clinical exercise professions.

National Science Foundation Grants Continue In campus science laboratories, Seaver continues to receive multi-year grants from the National Science Foundation. The most recent one will fund “REU Site: Undergraduate Research in Biology: Cellular Stress Physiology,” conducted by Natural Science Division professors Jay Brewster, Steve Davis, Michael Folkerts, Donna Nofziger Plank, and Doug Swartzendruber.

Faculty Publications—A Sample of Recent Effor ts John F. Wilson, Seaver professor and director of the Institute for the Study of Archaeology and Religion, published a book titled, Caesarea Philippi, the first comprehensive history of this ancient city.

Many other full-time Seaver faculty members have published books in the past fiscal year, including Cyndia S. Clegg, The Peaceable and Prosperous Regiment of Blessed Queene: Elisabeth; Alexander C. Diener, Homeland Conceptions and Ethnic Integration Among Kazakhstan’s Germans and Koreans; Phillip B. Thomason, El Coliseo De La Cruz, 1736-1860; and Stanley Warford for the computer science textbook, Computer Systems, (3rd Edition).

Endowed Scholarships Seaver College established four newly-named endowed professorships: Priscilla MacRae, the Frank R. Seaver Professor in Natural Science; Victoria Myers, the Blanche E. Seaver Professor in Humanities; Steve Rouse, the Frank R. Seaver Professor in Natural Science; and Henry Price, the Blanche E. Seaver Professor in Fine Arts.

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Information Technology; Carl Flynn, Student Information and Services; Carlos Meneses and Tim James, Transit Services; Lauren Joyce, Student Disability Services; Leon Martinez, Facilities Management and Planning; and Wendy Power, Student Activities and Leadership Development.

Songfest performers

Songfes t Tr adition Continues Every spring, students from both Greek and non-Greek groups come together to put on a musical extravaganza that has become a Pepperdine tradition since 1953: Songfest. The 2005 show called Patent Pending, was about inventiveness, design, creativity, imagination, and engineering. It was the largest Songfest in more than a decade with more than 350 students, faculty, and staff participating.

Tenur e-tr ack Positions Nine tenure-track faculty members were appointed in the 2004-05 academic year, three from underrepresented minorities, and four of whom are women.

Music Man Delights Audiences As part of the Mary Pickford-Stotsenberg Performances Series, the Pepperdine Fine Arts Division Theatre Department presented Meredith Willson’s The Music Man as its Fall 2004 musical at the Malibu campus’ Smothers Theatre during November. The two lead actors were Tanner Redman and Christin Wismann.

Chihuly Tops Weisman’s Attendance Records

Chihuly exhibit at the Weisman

Pepperdine’s Frederick R. Weisman Museum concluded its most wellattended exhibition in history with an exhibit featuring the world renowned glass art of Dale Chihuly.

The exhibit attracted a diverse audience of almost 32,000 elementary schoolchildren, high school students, and people from all age groups and backgrounds, many of whom were first-time visitors to Pepperdine.

Professor Caldwell Joins Advisory Council The president and chairman of the board of directors for the Council on Foreign Relations in New York invited Seaver College Professor Dan Caldwell to join its Chairman’s Advisory Council. The Distinguished Professor of Political Science will help oversee a number of the council’s programs and activities.

Seaver Dean Recognizes Exemplary Staff The annual Dean’s Staff Service Awards honored a dozen staff members for such characteristics as teamwork, dedication, competence, and cheerful attitudes. The award winners in fiscal year 2005 are: Rosa Aguila and Silvano Espinosa, Pepperdine Dining Services; Nan Bartlett, Payson Library; Sampson Brue and Gilbert Fernandez, Public Safety; Dennis Dalrymple,

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THE GRAZIADIO SCHO OL OF BUS I N E S S A N D M A NAG E M E N T B-Plan Competition is a Success As winners in the school’s first annual Business Plan Competition, two full-time MBA students earned $20,000 to start their new enterprise, The Parvez Michel Company. Parvez Taj and Emilie Fritz began the competition as one of 27 Graziadio student teams, advancing to first place after being chosen for the top award by an experienced panel of business executives.

Faculty in Print Full-time business school professors coauthoring books during the 2005 fiscal year included: Robert M. Fulmer, Growing Your Company’s Leaders; Christopher G. Worley, Organization Development and Change, (8th edition); and William O. Stratton, Introduction to Management Accounting, (13th edition).

Lectur e Ser ies Taps Author Dennis Bakke The school’s Dean’s Executive Leadership Series featured bestselling author Dennis Bakke on April 25, 2005. He is cofounder and former CEO of AES, a worldwide energy company with revenues of $8.6 billion. Several other noted professionals were featured as speakers in the series.

Dennis Bakke

Human Capital Institute Partnership Pepperdine is the first American university to join the Human Capital Institute’s academic affiliates program. In this partnership, Pepperdine will codevelop a series of Human Capital Leadership Programs for the Southern California business community.

Entrepreneurship Program The business school’s inaugural Entrepreneurship Symposium in June featured three award-winning entrepreneurial business leaders including Inc. magazine’s Entrepreneur of the Year and Graziadio alumnus Victor Tsao.

E2B Collaboration The business school’s Education-to-Business (E2B) program connected the needs of the education system to that of the business community through solution-driven programs. In 2004, Pepperdine partnered directly with prestigious companies such as The Coca-Cola Company, Experian, Baxter, Los Angeles Business Journal, Time Warner Cable, and J&R Fleet Services to identify strategic problems or opportunities confronting the organizations.

Graziadio Golfers Unite

Alumni Access to Center for Learning in Community

One of the business school’s most prominent events is the annual Friends of George Graziadio (FOGG) golf tournament which honors the founder’s legacy with an event featuring Mr. Graziadio’s favorite sport. In 2004, the tournament raised more than $70,000 to support student scholarships and special initiatives.

Educational technology doctoral alumni who work in northern and southern California school districts can now tap into a support service organization, the Center for Learning in Community. A federal grant housed at the center has supported dissertation research for three GSEP doctoral students this past year.

T H E G R A D UAT E S C H O O L O F E D U C AT I O N A N D P SYC H O LO G Y Flurry of New Books Published by GSEP Authors Books authored this year by GSEP full-time faculty include: Promising Practices Connecting Schools to Families of Children with Special Needs, and Promising Practices for Family Involvement in Schooling Across the Continents,

by Diana Hiatt-Michael; Laws Affecting Clinical Practice, coauthored by Susan Hall; and Spiritually Oriented Psychotherapy, coedited by Edward P. Shafranske. Shafranske was also an invited participant and facilitator at the American Psychological Association’s 2005 Educational Leadership Conference in Washington, D.C.

A Collaboration in China A school faculty team was led by its dean, Margaret J. Weber, to Beijing, Jinan, Shanghai, and Hong Kong to meet with educators about opportunities for collaboration in teacher education and educational research, and a faculty exchange program.

Dr. Dennis Lowe Honored

Wher e Technology and Lear ning Inter sect The California Department of Education has given Linda Polin a grant for her to work with a large contingent of middle school educators. Professor Polin, director of the EdD in educational technology program, was also named to the Jan Davidson Endowed Professorship in Educational Technology in honor of her work in technology and learning.

V isiting Pr of essor Tackles Subs t ance A buse in Schools A recently-funded project by Covina-Valley Unified School District will enable visiting psychology professor Robert Hohenstein to supervise individual and group psycho-educational counseling services for district students to combat possible drug, alcohol, or tobacco abuse.

Diversity Series A Diversity Speakers Series was developed in tandem with the University’s Center for Faith and Learning and the GSEP Diversity Council, inviting individuals to speak about ethnic diversity, vocation, and faith to the students and faculty.

Superintendent Advisory Council The Graduate School of Education and Psychology formed a Superintendent Advisory Council to establish relationships with state school superintendents who will advise GSEP on teacher credentialing, administrative training, and master’s and doctoral programs.

Dennis Lowe

The Graduate School’s Center for the Family launched a free e-newsletter containing relationship tips and resources on topics of interest to couples, parents, and students as well as updates about local events. Subscribers receive the newsletter six times per year.

Center director, psychology professor Dennis Lowe, received the 2005 John Trent Servant Leadership Award at the Association of Marriage and Family Ministries (AMFM) Conference in Scottsdale, Arizona.

New Graduate Degree in Progress The Graduate School’s newest graduate degree program, the master of science in workplace learning and performance (MSLP), will launch in Fall 2006. The four-semester program will prepare students for professions in the design and development of workplace training and performance improvement initiatives.

T H E S C H OO L O F P U BL IC P O L I C Y Prospects For Democracy Five esteemed scholars presented lectures in the school’s Prospects for Democracy in the Middle East fall series. Starting the event off was Joseph Kechichian, a former fellow in the graduate school’s Davenport Institute, covering the prospects for democratization in the conservative Arab gulf monarchies. Visiting Professor James Coyle was the next guest speaker, exploring the successes, limitations, and needs of the democratic experiment in Israel, Turkey, and Iran. Comparing Iraq’s challenges with four nations that have made progress toward a liberal democracy was the series’ third speaker, James Q. Wilson, the University’s Ronald Reagan Professor

Daniel A. RODRIGUEZ Daniel A. Rodriguez has an annual teaching assignment that takes Seaver College students on an “Urban Plunge.” The spiritual discernment weekend retreat, spent at an urban rescue mission, homeless shelter, or rehabilitation home, is designed to prompt serious vocation questions about serving the dispossessed, homeless, and poor in the name of Christ. Rodriguez, a Fuller Theological Seminary graduate, is an associate professor of missions at Pepperdine.

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of Public Policy. Professor Robert Kaufman presented the fourth lecture, giving a broad overview of the Arab-Israeli conflict and the death of Yasser Arafat. The school’s former John M. Olin professor Michael Novak presented the final lecture on “Religion and Democracy: The Case of Islam.”

Graduate Students Help International Partners This summer, eight School of Public Policy graduate students worked with the following policy and humanitarian organizations in Armenia and the Republic of Georgia including World Vision, American Councils for International Education, United Nations Development Program, and Public Policy students with Armenian children the U.S. Agency for International Development. Under Professor Angela Hawken’s leadership, the students specifically worked on health care, children’s welfare, national security, education and economic development, and political reform in the Southern Caucasus region.

form and foreign affairs. This event convened eight members of the House of Representatives with scholars from the graduate school and other highly regarded think tanks for informal discussions.

T H E S C H OO L O F L AW Law Faculty Release Several New Books There were many impressive 2004-05 published works by several School of Law’s faculty authors. They included a book by Robert F. Cochran, Law and Intermediate Communities, The Case of Torts; and a law review article

by Joel A. Nichols, Religious Liberty in the Thirteenth Colony: Church-State Relations in Colonial and Early National Georgia.

Advocacy Teams V ictor ious

Public Policy Faculty Authors Full-time faculty members who wrote and/or coauthored books in 2005 include: James R. Wilburn and Gordon Lloyd (coauthoring with several others), Business and Religion: A Clash of Civilizations?; and David Davenport, coauthoring A Country I Do Not Recognize: The Legal Assault on American Values. In late 2004, Bruce Herschensohn, a Davenport Fellow in the School of Public Policy, published the novel Passport, which traces U.S. foreign policy for past 40 years.

Discussing de Tocqueville Professor Wilson returned in spring 2005 to discuss the influence of European thinkers on American thought and action. During three, regularly-scheduled classes, he provided overviews of French political thinker Alexis de Tocqueville’s Democracy in America, Adam Smith’s Wealth of Nations, and Karl Marx’s Estranged Labor and The Communist Manifesto.

Dr. Rober t Klitgaar d Shares Career Insights In October 2004, the School of Public Policy welcomed Dr. Robert Klitgaard to campus as part of the career service office’s ongoing luncheon series on career choices. Klitgaard is the dean of the Pardee RAND Graduate School, as well as the Ford Distinguished Professor of International Development Security.

Congressional Retreat In August 2005, the School of Public Policy and The Heritage Foundation cohosted an exclusive bipartisan congressional retreat on entitlement re-

Joshua Hill and Elliot Anderson

Two School of Law appellate advocacy teams scored major wins in the spring at the Federal Bar Association’s Thurgood Marshall Moot Court Competition in Washington, D.C. Pepperdine’s team of Joshua Hill and Elliot Anderson, studentcoached by Nick Firetag, won the national championship by beating 30 teams. Anderson earned Best Advocate awards in both the preliminary and final rounds. The team of Nori Horton and Kelly Craven, student-coached by Connie Chuang, was awarded Best Brief.

Pulitzer Prize Winner Speaks In Spring 2005, Ed Larson, a Pulitzer Prize recipient from the University of Georgia, was a Distinguished Visiting Professor, teaching “Health Care Organization, Financing, and Ethics.” His course was offered through the Straus Institute for Dispute Resolution which, for the fourth time in seven years, was ranked nationally as Number 1.

Solicitor General Keynote Speaker at Annual School of Law Dinner The 42nd solicitor general of the United States, Theodore B. Olson, was keynote speaker at the law school’s annual dinner held in early March at the Bonaventure Hotel in Los Angeles.

Dedicated to Helping Others When he entered the law school, Will Grignon was one of the school’s first blind students. He graduated second in his class (’03) and is now an attorney in Los Angeles who gives generously to help disadvantaged children. Grignon was one of a select few University alumni at the 2005 Pepperdine Associates dinner spotlighted as an outstanding example of the human spirit.

Sharon M. CLARKE Sharon M. Clarke loves two aspects about teaching: meeting with students during office visits, and making math fun for them.

An assistant professor in the Natural Science Division since 2003, Clarke was instrumental in organizing the Spring 2005 “Who Wants to be A Mathematician?” competition for area high school students, sponsored by the American Mathematical Society.

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Putnam Takes Top Honor s

Waves Claim All-Spor ts Tr ophy

Three-time Pepperdine All-American and 2005 NCAA runner-up Michael Putnam concluded a four-year collegiate career in April 2005 in which he became one of the most decorated student-athletes in Pepperdine history. Winner of the Byron Nelson Award as the country’s most outstanding golfer, Putnam was the second Pepperdine golfer named to a United States Walker Cup Team, joining Jason Gore who was selected to the team in 1997.

The dominance of the Waves continues on the nation’s fields, courts, links, and aquatic centers. For the 2004-05 NCAA year, Pepperdine was awarded the inaugural All-Sports Trophy as the top-ranked institution in the nation without a football component by the NCAA Division I-AAA Athletics Directors Association. This is a part of The National Association of Collegiate Directors of Athletics (NACDA)—U.S. Sports Academy Directors Cup award program.

Dunphy Accolades Abound

Marv Dunphy

In his 22nd season coaching men’s volleyball, head coach Marv Dunphy marked his 400th collegiate victory. Dunphy was honored with four 2005 Coach of the Year awards from fellow head coaches at Pepperdine, the MPSF, the Tachikara/American Volleyball Coaches Association, and the NCAA.

Coach of t he Year Honor s for Gibbs The NCAA also presented yet another 2005 Coach of the Year award to Pepperdine, honoring women’s golf coach Laurie Gibbs. Her team finished 4th in the nation. Six other Waves teams earned NCAA rankings: men’s tennis (4th), water polo (7th), baseball (17th), women’s tennis (18th), men’s golf (31st), and women’s soccer (33rd).

Waves Win Five WCC Titles Pepperdine teams this year won five West Coast Conference championships in baseball, men’s golf, women’s golf, men’s tennis, and women’s tennis. For the first time in its program history, Pepperdine’s baseball team swept the WCC major player awards, claiming its Player of the Year (Chad Tracy), Pitcher of the Year (Paul Coleman), and Freshman of the Year (Barry Enright).

Michael Putnam

Honor Roll of Scholar Athletes A total of 83 Pepperdine student-athletes were named to the 2005 WCC Commissioner’s Honor Roll for their work in the classroom, including three Waves who registered a perfect 4.0 GPA during the 2004-05 academic year.

Coach Scolinos Remembered In May, Pepperdine honored legendary baseball coach John Scolinos, an alumnus who coached the Waves from 1946 to 1960. The Pepperdine Athletics Department and 50 alumni unveiled and dedicated a bronze plaque with the announcement of the John Scolinos Distinguished Player award.

Women’s Tr ack Added With a view toward the future, the athletics department has added women’s track with its first season of competition beginning in Spring 2006.

This brings the total number of NCAA Division I sports sponsored by Pepperdine to 15. Women’s track is the first sport added at the University since its women’s soccer program debuted in 1993.

The Al Duer Award At the annual Waves Club dinner in June, Pepperdine Athletics Director, John Watson, presented Bob and Denise Beaman along with Ted and Carolyn Porter with the University’s Al Duer Award for their significant gifts to advance the mission of Pepperdine sports. Longtime booster Lou Colombano, the outgoing chair of the Waves Club Athletics Board was recognized for his two years of dedicated service and over 20 years of promoting the Waves.

Waves Baseball Team

Eugene P. KIM Eugene P. Kim is an assistant professor at the Graduate School of Education and Psychology. His professional achievements range from international social/educational research to coordinating a community-based professional development school to founding an educational outreach to homeless and welfare families in Hollywood.

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m ovi n g p e pp e r di n e f o rwar d

Advancement Team

The Advance me nt Team supp orts Pe pp erd i ne’s ri s e i n prom i nence

front row (from left to right): Lou Drobnick, Ronald Phillips, Helen M Young, Charles Runnels, Israel Rodriguez, Michael Warder second row (from left to right): Sara Jackson, Catherine Kort, Avesta Carrara, D’Laine Lyons, Claudia Arnold, Ann Kratz third row (from left to right): Chris Sangster, Stacy Taylor, Dawn Petterson, Debi Klein, Michelle French, Patty Atkisson, Nicole Hall, Keith Hinkle top row (from left to right): Jonathan Kemp, Jere Yates, Curt Portzel, Michael Berry, Sam Lagana

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he dedicated professionals who make up the Advancement team at Pepperdine possess an unabashed enthusiasm for sharing the University’s dreams with friends who care passionately about Pepperdine’s future. The Advancement team is focused on maximizing Pepperdine’s potential and its impact as a Christian institution of higher education.

The staff works diligently to articulate the University’s long-term dreams and aspirations, while securing funds to meet annual operational needs.

Advancement is a collaborative, ongoing effort to support Pepperdine’s rise in prominence among the most wellknown and respected universities in America. A national search to select executive leadership for the Advancement team continues, along with tremendous progress and forward momentum. Under the interim leadership of President Andrew K. Benton and other senior advancement officers, fiscal year 2005 has been a year of significant growth and achievement.

Highlighting just a few of the extraordinary people who helped Pepperdine University realize dreams within the last fiscal year, we want to thank these individuals whose passion for the University’s mission is exemplary.

The Pepperdine community honored the late M. Norvel Young and his wife, Helen M. Young, by dedicating the M. Norvel and Helen M. Young Center a few hours after the September 2005 Founder’s Day ceremony. At that time, the Graduate School of Education and Psychology Drescher Graduate Campus building was officially named for the University’s third president and second chancellor, and his beloved wife, who founded the Associated Women for Pepperdine (AWP). This extraordinary couple gave decades of service to the University and Mrs. Young continues her encouragement and support as a Life Regent. The 6,975-square-foot, state-of-the-art facility will ensure that the Youngs will be forever remembered as central figures in the proud history of Pepperdine.

Sharon and Terry Mullin are counted among the University’s closest friends and ardent supporters. They are committed to helping young people receive an education that celebrates ethical conduct, character development, and faith, in addition to essential qualities one might expect from a superior academic institution.

Also noteworthy, Leon and the late Margaret Rockwell provided a major legacy to Pepperdine honoring their family by funding several academic and residential facilities on the Malibu Campus. The University was pleased to acknowledge their most recent gift, the Margaret M. Rockwell Student Dining Center, designed as a place of fellowship and reprieve for students, staff, and faculty, located in the heart of the Drescher Graduate Campus. This dining center will long memorialize the nurturing and family-centered spirit of Dr. Rockwell’s beloved wife, Margaret.

In lasting honor to their cherished five children and grandchildren, Phyllis and Angelo R. Mozilo named the Mozilo Family Executive Dining Center in Villa Graziado.

Their generous gift demonstrates the Mozilos’ ongoing commitment to the George L. Graziadio School of Business and Management and the Executive Center.

The generous commitments of these and all of Pepperdine’s special friends and benefactors, ensures that the legacy of George Pepperdine will be passed on to future generations.

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Senior ADMINISTRATION 20

Charles B. Runnels Chancellor

Andrew K. Benton President and Chief Executive Officer

Chancellor Runnels has been sharing the dreams of Pepperdine University for more than 39 years.

Taking his great love for students, he seeks out those willing to partner with Pepperdine and make the school’s dreams become reality. Chancellor Runnels continues this important work by offering counsel to President Benton in the area of advancement. The chancellor also directs a program he founded 28 years ago, the Youth Citizenship Seminar, which inspires high school students to make a personal contribution to America’s future.

President Benton directs his management team with leadership skills built on a career in higher education. The president has served in several key leadership roles at Pepperdine over the past 21 years, the last five as president. Though he planned for a career in law, Benton’s desire to work with young people in their own pursuit of higher education put him on a career path leading to his current role as the University’s seventh president. One of President Benton’s favorite activities is spending time with the students, both in the Waves Café and in the classroom as a teacher.

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Darryl L. Tippens Provost Provost Tippens earnestly promotes academic excellence and Christian values at the University. This year marks his fifth as Pepperdine’s chief academic officer. The provost continues to devote significant time to issues of academic planning, program development, and the advancement of scholarship at all five schools.

Charles J. ( Jeff) Pippin Vice President for Finance and Administration In 1981, this certified public accountant joined the Pepperdine staff and subsequently earned his MBA from Pepperdine’s business school. Pippin is the University’s chief financial officer with broad responsibilities including financial planning and operations, investment, debt and treasury management, new construction, campus planning and facility operations, special programs, educational centers operations, business services, human resources, and public safety.

Gary A. Hanson Vice President and General Counsel Hanson’s original connection with Pepperdine as a School of Law graduate has multiplied since joining the staff over 23 years ago. As the University’s chief legal officer, Hanson oversees the governmental affairs of the University as well as the regulatory issues, risk management, insurance, and equal employment opportunity operations.

Nancy Magnusson Durham Vice President for Planning, Information, and Technology Professor, administrator, graduate school dean, and director of the London programs are all positions that Magnusson Durham has filled since she first came to Pepperdine in 1979. She continues as a leader by directing the University’s critical areas of strategic planning and information management.

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Senior ADMINISTRATION 22

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James R. Wilburn Dean, School of Public Policy

Kenneth W. Starr Dean, School of Law

W. David Baird Dean, Seaver College

Dean Wilburn’s 35 years with Pepperdine University began with the Malibu campus planning team.

Earning his MBA from Pepperdine’s Presidential/Key Executive program, he has held several positions at the University including professor, provost, vice president, and dean of the business school. With extensive experience in public policy, Dean Wilburn is an expert on American history, business strategy, corporate governance, and Russian reform.

As an author, he has penned several books on American history, business management, and leadership.

With the end of fiscal year 2005, Dean Starr completed his first full year as a law school dean. An attorney who specializes in appellate work, Dean Starr is a constitutional scholar and author. He is internationally known for his service in several governmental posts including counselor to U.S. Attorney General William French Smith; U.S. Court of Appeals judge, D.C. Circuit; and solicitor general of the United States.

This Howard A. White Professor of History continues to teach and is an honored author and expert on Native Americans, the American West, the history of Oklahoma, and the Churches of Christ in Oklahoma. In his 17 years at Pepperdine, Dean Baird has been chair of the Humanities and Teacher Education Division, Fulbright Senior Lecturer in New Zealand, visiting professor for the Heidelberg program, and the undergraduate school’s dean since 1998.

Linda A. Livingstone Dean, Graziadio School of Business and Management

Margaret J. Weber Dean, Graduate School of Education and Psychology

Dean Livingstone was chosen to be the first woman dean of the Graziadio School in 2002. She has extensive experience as a business school administrator, award-winning teacher, and author of business textbooks and numerous scholarly articles for business journals.

Building on the school’s mission to develop values-centered leaders for contemporary business practice, Dean Livingstone continues to strengthen the Graziadio School’s ties with the business community.

Selected in 2001 to direct the Graduate School, Dean Weber has had a career in research, teaching, and university administration. She is an expert on the socialization of graduate students, and faculty development – just two of many topics that Dean Weber has covered in published articles. She is an administrator and strong advocate of the scholarpractitioner model of learning which educates students in theory as well as practical application.

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I

n 2005 the University was again blessed by strong operations and growth of assets, while continuing the focus on excellence in all areas of University life and endeavor.

Total assets now exceed $1 billion, increasing nearly 7 percent from one year ago. The $69 million increase in total assets we enjoyed during fiscal 2005 was the result of

FINANCIALS

favorable investment performance and net operating surpluses.

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The University’s investments and cash increased $92 million during fiscal 2005, again resulting from positive operations and investment returns. The University’s investment portfolio has rebounded well from the period of volatility and negative returns in the capital markets we experienced four years ago. Our continued long-term diversified investment strategy, combined with our five-year averaging of market values for determining the level of endowment support has produced outstanding results in protecting the investment portfolio and providing stable resources to fund our academic operations. During fiscal 2005, our investment portfolio generated total income and gains of approximately $82 million, for an approximate 14 percent total annual return.

We have truly been blessed to witness the dramatic growth in the University’s endowment over the last 33 years, since we moved to the Malibu campus. It is a sobering thought to realize that only 33 years ago, the University’s endowment was a mere $1 million. At the end of fiscal 2005, University investment funds functioning as endowment totaled $483 million, a 13 percent increase from one year ago. During fiscal 2005, total endowment support increased to $23 million, a near 11 percent increase from last year. Over time, we would hope to see support from our endowment increase, providing more opportunities to expand financial aid to our students or create ongoing support for other University operations.

During fiscal 2005, we completed the construction of our Drescher Graduate Campus, the home to three of the University’s four graduate schools: the George L. Graziadio School of Business and Management, the Graduate School of Education and Psychology, and the School of Public Policy. The final phase of construction included 56 faculty and staff residences, the majority of which were sold in fiscal 2005, generating $21 million in resources that are now available to fund further campus investment. Over the past several years, we have dramatically increased the function and beauty of our Malibu campus, as evidenced by our significant investment in property, facilities, and equipment of $143 million during the past five years. The Drescher Graduate Campus was of course the largest component of this increase. Looking forward, we see this trend continuing through the renovation and expansion of our Malibu campus.

The University’s long-term obligations decreased slightly from one year ago, and totaled $203 million at the end of fiscal 2005.

The University’s significant general asset reserves and our ability to cover debt service from operating cash flow are strong contributors to our recently reaffirmed “A1” credit rating from Moody’s Investors Service. The value of the University’s financial strength was proven shortly after our fiscal year-end, when in August of 2005, we took advantage of a very favorable interest rate environment, and refinanced over $106 million of our outstanding debt, realizing present-value interest savings of nearly $6 million.

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The University’s net assets now total over $804 million, with almost $600 million of that balance “unrestricted” or available to cover any possible contingency. Only six years ago, the University’s net assets totaled $674 million, with $484 million unrestricted at that time. The last several years have seen impressive growth.

Today, the University enrolls approximately 8,000 students in its five colleges and schools. The University’s academic operations remain strong, due primarily to our diversified enrollment base and a significant increase in student demand. This demand growth has been particularly remarkable during the past decade for our increasingly prestigious undergraduate programs. Seaver College now accepts just 28 percent of undergraduate applicants, compared to 78 percent 10 years ago. During that same time frame, applications to Seaver College have more than doubled and Seaver’s yield rate on accepted applicants increased to 38 percent from 29 percent, illustrating our significant improvement in stature among undergraduate college applicants. Today we compete for the best students against the best public and private academic institutions, and we are winning students’ hearts and minds.

While on balance we are well positioned for continued application growth, enrollment declines at the Graziadio School of Business and Management have caused us to reexamine that school’s business model and future goals. While we would certainly prefer to have experienced stable enrollment rates at the Graziadio School, its enrollment declines have been in line with decreases noted in the national MBA marketplace.

Application and enrollment trends are extremely important to the University, since our operating revenue is comprised primarily of student-related revenues (items such as tuition, fees, and auxiliary revenue). These items account for approximately 80 percent of the University’s total revenue. We have been fortunate to see our net tuition per student grow 31 percent since 2000 to approximately $19,000 in 2005, resulting from the University’s mix of graduate programs and increasing undergraduate demand.

Of course, along with increased net tuition revenues we know we must continue to increase our investment in our students’ academic and community experience. Accordingly, we have endeavored to direct the University’s resources to improving our academic, social, and spiritual programs and facilities.

During fiscal 2005, the University’s instruction, research, and student service expenses increased by over $4 million, to nearly $114 million. Including these items and academic support, fully 95 percent of each net tuition and fee dollar received is expended on products and services that directly impact each student’s experience here at Pepperdine University.

We remain thankful for the many ways we have been blessed at Pepperdine University. Close examination of the progress we have made over the past 68 years, and the past year alone, removes any doubt that God’s hand is in our work. With such continued blessings, we are confident that the years ahead will continue to unfold the great promise that is Pepperdine University.

Charles J. Pippin

Vice President for Finance and Administration

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Consolidated Statements of Financial Position at July 31, 2005 and 2004 (In thousands)

ASSETS

Cash and cash equivalents

2005 $

19,578

2004 $

8,193

accounts of $966 and $1,104, respectively

3,646

4,350

Other accounts receivable

3,112

2,940

losses of $2,030 and $2,132 respectively

25,870

29,549

Contributions receivable, net

15,588

18,243

Prepaid expenses, inventories, and other assets

7,382

6,834

Student receivables, less allowance for doubtful

Student loans, less allowance for loan

Investments 657,792 577,412 Assets held as trustee or agent

91,721

87,113

Property, facilities and equipment, net

293,773

314,565

Total assets

$

1,118,462

$

1,049,199

$

22,094

$

26,502

Accrued salaries and wages

3,689

3,680

Student deposits, advance payments, and deferred revenue

7,282

6,563

U.S. government-funded student loans

14,893

14,600

Trust and agency obligations

63,602

61,682

Long term obligations

202,724

205,788

Total liabilities

314,284

318,815

598,081

542,226

Temporarily restricted

64,268

60,597

Permanently restricted

141,829

127,561

Total net assets

804,178

730,384

FINANCIALS

LIABILITIES AND NET ASSETS Liabilities: Accounts payable and accrued liabilities

Net assets: Unrestricted

Total liabilities and net assets

$

1,118,462

$

1,049,199

This financial information is summarized from the July 31, 2005, Consolidated Financial Statements of Pepperdine University, which have been audited by our independent auditors. The statements were prepared in accordance with generally accepted accounting principles applicable to colleges and universities. A complete copy of the audited financial statements is available free of charge upon request from the office of the Controller.

In the spirit of the recent Sarbanes-Oxley legislation (not yet required of non-profit corporations) and consistent with our ongoing efforts to improve corporate governance, the Board of Regents has established an Audit Committee and approved its Charter. Five independent members of the Board of Regents comprise the Audit Committee, which meets at least quarterly and is responsible for the selection and retention of the independent auditors, as well as the determination of their independence. The Audit Committee also reviews the University’s systems of internal control and oversees the Auditing Services function. Finally, the Audit Committee has established a system to receive and investigate confidential and anonymous communications concerning the processing and presentation of financial information.

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Consolidated Statements of Activities for the years ended July 31, 2005 and 2004 (In thousands) REVENUES Student tuition and fees

Unrestricted

Temporarily Restricted

Permanently Restricted

$ 198,744

$

$

–

–

2005 Total

2004 Total

$ 198,744

$ 193,895

Less student aid (50,169)

–

–

Net student tuition and fees 148,575

–

– 148,575 146,724

Room and board

–

– 22,970 22,135

22,970

Private gifts and grants

8,645

Endowment support

22,880

2,095

2,271

(50,169)

13,011

(47,171)

14,922

129 255 23,264 21,006

Government grants

2,879

–

–

2,879 2,940

Sales and services

8,722

–

8,722 7,521

–

Other revenue 5,954 2,636 19 8,609 5,534 Net assets released from restriction

8,822

(8,822)

Total revenues 229,447

–

(3,962)

–

2,545

–

228,030 220,782

EXPENSES Instruction and research

80,661

–

– 80,661 78,223

Academic support

27,772

–

– 27,772 29,725

Student services

32,947

–

– 32,947 31,282

Public service

9,806

–

–

Auxiliary enterprises

17,558

–

– 17,558 16,956

Management and general

39,116

–

– 39,116 40,572

Membership development

1,519

–

–

1,519 1,400

Fundraising 8,825

–

–

8,825 8,954

Total expenses 218,204

–

– 218,204 216,444

9,806 9,332

Change in net assets before non-operating revenues and expenses

11,243

(3,962)

2,545

9,826

4,338

Adjustment of actuarial liability

–

3,921

(2)

3,919

Investment income

6,821

144

152

7,117

6,550

Net realized and unrealized gains from investments

56,273

114 10,826

67,213

42,914

NON-OPERATING REVENUES AND EXPENSES

Appropriation of prior years endowment gains (15,963)

–

(454)

– (15,963) (14,591)

Other (2,519) 3,454 747

1,682 1,102

Total non-operating revenues and expenses

44,612

7,633 11,723

63,968

35,521

Change in net assets

55,855

3,671 14,268

73,794

39,859

Net assets at beginning of year 542,226

60,597 127,561

Net assets at end of year

$ 598,081

$ 64,268

$ 141,829

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730,384 690,525

$ 804,178

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PEPPERDINE UNIVERSITY BOARDS The Board of Regents is the legal governing body and chief policy board of the University.

Life Regents are recognized and honored for their extraordinary service as past regents. The University Board is a national advisory group that provides additional guidance and leadership. The University administration, working in tandem with the governing and advisory boards, shapes the direction of the University. The guidance provided by these distinguished and committed men and women is greatly valued.

B O A R D O F R E G ENT S

Virginia B. Braun

Edwin L. Biggers

Janice R. Brown Circuit Court Judge U.S. Court of Appeals for the District of Columbia Circuit

Chairperson

President (Retired) Hughes Missile Group

Jose A. Collazo Chairman of the Board, President, and Chief Executive Officer Infonet Services Corporation

Robert G. Jackson Vice Chairperson

BOARDS

President (Retired) Ford Motor Land Development Corporation Susan F. Rice Secretary Principal SFR Consulting Frederick L. Ricker Assistant Secretary Vice President and Program Director Northrop Grumman Space Technology William S. Banowsky President Emeritus Pepperdine University Andrew K. Benton President Pepperdine University Sheila K. Bost Certified Family Life Education Primary Relationships Marriage & Family Therapist Intern, Private Practice

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Gail E. Hopkins Orthopaedic Surgeon John D. Katch Regional Manager, Public Affairs (Retired) Southern California Edison Company

Jerry S. Cox President Cox & Perkins Exploration, Inc.

Thomas P. Kemp Chairman and Chief Executive Officer (Retired) Coca-Cola Bottling Company of Los Angeles

W. L. Fletcher III Owner Park Centre Properties, LLC

Arthur G. Linkletter Chairman Linkletter Enterprises

Matthew K. Fong President Strategic Advisory Group

Eff W. Martin

George Foreman

Michael T. Okabayashi Partner Ernst & Young

Lynn C. Fritz Director General Fritz Institute

James R. Porter Principal Porter Capital Partners

Linda M. Gage

Rosemary Raitt General Partner KVI Corporation and FKC

Terry M. Giles Owner Giles Enterprises

SPIRIT

Glen A. Holden United States Ambassador (Retired)

Russell L. Ray, Jr. Chairman, Executive Committee World Airways, Inc.

L I F E R E G ENT S (non-voting)

Travis E. Reed President Reed Investment Corporation

Joe R. Barnett Lodwrick M. Cook Robert R. Dockson Gerald R. Ford Hari N. Harilela Jerry E. Hudson Jerve M. Jones Richard M. Scaife Flora Laney Thornton Alton C. Watson William R. Waugh J. McDonald Williams Helen M. Young

Carol Richards B. Joseph Rokus Chairman and CEO Berkley Industries Charles B. Runnels Chancellor Pepperdine University Marilyn D. Simpson

 

Rosa Mercado Spivey Physician Los Angeles Unified School District

UNIVERSITY BOARD

William W. Stevens Chairman of the Board (Retired) Triad Systems Corporation

Pat Boone Chairperson

Stephen M. Stewart Vice President Stewart Brothers Drilling Company

Fred A. Ballin, Jr. Robert Barbera Thomas J. Barrack, Jr. William Beazley Andrew K. Benton A. Ronald Berryman John S. Broome Viggo Butler Robert M. Davidson Edmond R. Davis K. Duane Denney Robert E. Dudley Maureen Duffy-Lewis Mark W. Dundee Paul G. Flynn Shirley Reid Frahm Hank Frazee

William H. Swanson Chairman and Chief Executive Officer Raytheon Company Thomas J. Trimble Senior Vice President/ General Counsel and Corporate Secretary (Retired) Southwest Gas Corporation Robert L. Walker Vice President for Development Texas A&M University Edward V. Yang Chief Executive Officer NetStar Systems Ltd

G. Louis Graziadio III Bart M. Hackley, Jr. Mary Heckmann Bruce Herschensohn Thomas E. Higgins William T. Huston Carl J. Lambert John T. Lewis Ian R. Linde Muriel Lipsey Jim Long John S. MacIntosh Seiji Masuda Gregory R. McClintock Glen McDaniel Carl Minton E. Chadwick Mooney Velma V. Morrison William S. Mortensen Aaron Norris Stephen E. Olson Terry Hamilton Quimby Frank E. Raab John Ratzenberger Charles B. Runnels Richard C. Seaver Margaret A. Sheppard Richard L. Stack Dorothy Straus Terralynn Walters Swift Augustus Tagliaferri Charles H. Taylor Robert A. Virtue Lew O. Ward Ellen Weitman Jeremy N. White Gary L. Wilcox

Tari ROKUS Tari Rokus, a member of the Seaver Board of Visitors, is as dedicated to Pepperdine today as she was when she came to Seaver College as a freshman in 1973. She and her husband, Joe, graduated in 1976, and two of their children are currently enrolled at Pepperdine. In May of 2004, Tari and Joe were honored with the Al Duer Award for their support of Pepperdine athletics.

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l o o ki n g back …

In Andrew K. Benton’s September 23, 2000 inaugural address, he upheld that, “We must remain committed to the people we are called to serve.” During the first five years of his administration, President Benton has persevered in doing just that in leading the University’s continued rise to prominence among the nation’s most respected universities. What follows is a glance back on several outstanding and tangible accomplishments that have bolstered the University in five areas that the President underscored in his inaugural address— strengthening our resources, diversity, connection to our heritage, sense of community, and our emphasis on scholarship and culture.

2000-01

3 Dr. Darryl L. Tippens, the James W. Culp Professor of English at Abilene Christian University, is selected as provost.

5 Moore Haus in Heidelberg, Germany, home to Seaver students since 1965, begins a much-needed restoration.

3 The 55,000 square-foot state-of-the-art graduate facility in Irvine is dedicated.

4 For the first time since 1995, the men’s baseball team takes the WCC Championship.

4 Step Forward Day, begun 12 years earlier, signs on a record 800 student volunteers.

5 Thomas J. Trimble begins a distinguished four-year term as Board of Regents chairman.

5 Dr. Margaret J. Weber, previously an Oklahoma State University associate dean, is named dean of the Graduate School of Education and Psychology (GSEP).

4 A new GSEP applied psychology and social relations program is approved to begin in the fall.

4 Former NBA head coach Paul Westphal signs on as head coach of the men’s basketball team.

4 Flora Laney Thornton, esteemed friend and Life Regent, establishes a $1 million endowment benefiting the Opera Program.

3 Leaving Baylor University, Dr. Linda Livingstone becomes dean of the Graziadio School of Business and Management.

2001-02

3 General H. Norman Schwarzkopf addresses 26th Annual Pepperdine Associates Dinner guests.

5 The University’s largest National Science Foundation grant is awarded to Dr. Stephen Davis.

4 Supreme Court Justice Ruth Bader Ginsburg is keynote speaker at the School of Law dinner.

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4 The Military Honor Garden and the Annie and Grover Sam Cultural Arts Center Wing are dedicated.

4 The Volunteer Center’s second annual Week of Peace, Hope, and Justice raises awareness about worldwide human injustices.

4 The School of Law hosts a conference of religiously affiliated law schools titled “Viewing Law Through the Eyes of Faith.”

4 World-renowned classical guitarist Christopher Parkening is named Distinguished Faculty Member.

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4 Better teachers and better teaching methods result from a GSEP $4 million technology grant.

4 Pepperdine is among eight universities selected to participate in the nonprofit Jumpstart program.

SPIRIT

2002-03 3 In Buenos Aires, Argentina, the student facility is dedicated, honoring benefactors Gloria and Glen Holden.

4 Proud members of the football program (1946-61) present a commemorative wall plaque.

4 The Center for the Arts Guild’s gala raises a record $160,000 for the ARTSReach Program.

4 Almost 300 undergraduate students volunteer their spring break to work in Project Serve.

4 Pepperdine rates among Entrepreneur magazine’s Top 100 U.S. Colleges and Universities.

4 National rankings place the Graziadio School’s Fully-Employed MBA program 22nd and Executive MBA program 23rd.

4 Pepperdine is ranked in the top tier of America’s Best Colleges by U.S. News & World Report.

3 The one-year anniversary of “9/11” marks the site dedication for the Heroes Garden.

4 The School of Law also announces a loan forgiveness program, funded by the Caruso family.

5 Center for Communication and Business, home to Seaver’s two largest divisions, is dedicated.

4 The law school announces its first postgraduate degree in an emerging field: dispute resolution.

4 The nation’s most prestigious mock trial competition goes to the law school’s trial advocacy team.

2003-04

5 Former U.S. Solicitor General Kenneth W. Starr becomes dean of Pepperdine’s School of Law.

5 The new Drescher Graduate Campus and the Villa Graziadio Executive Center open on a spectacular 50.4-acre plateau overlooking the Pacific Ocean.

4 The Volunteer Center hosts National Hunger and Homelessness Awareness Week.

4 Longtime Southland resident Edwin L. Biggers becomes chairman of the Board of Regents.

4 Pepperdine’s chapter of the International Justice Mission sponsors “Back to School in Iraq.”

5 Construction and Campus Planning complete refurbishment of historic Stauffer Chapel.

4 A juris doctor/master of divinity joint degree program debuts – the first of its kind in the Western United States.

4 Athletics claims 3rd consecutive WCC Commissioner’s Cup. 4 Hispanic Outlook nationally ranks Pepperdine No. 27 for awarding master’s degrees to Hispanics.

4 The Financial Times ranks the Graziadio School’s Executive MBA program in Top 75 worldwide.

4 The Graphic wins best news, sports, features sections, and features photo in state competition.

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As a Christian university, Pepperdine affirms That God is That God is revealed uniquely in Christ That the educational process may not, with impunity, be divorced from the divine process That the student, as a person of infinite dignity, is the heart of the educational enterprise That the quality of student life is a valid concern of the University That truth, having nothing to fear from investigation, should be pursued relentlessly in every discipline That spiritual commitment, tolerating no excuse for mediocrity, demands the highest standards of academic excellence That freedom, whether spiritual, intellectual, or economic, is indivisible That knowledge calls, ultimately, for a life of service.

Neil Clark WARREN Neil Clark Warren graduated from George Pepperdine College in 1956. Fond memories of those youthful college days include falling in love with a beautiful coed, Marylyn, whom he married. As a psychologist, Warren spent 35 years conducting private counseling, research, and public speaking before founding the fast-growing online relationship service, eHarmony.com.

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The Mission of Pepperdine University Pepperdine is a Christian university committed to the highest standards of academic excellence and Christian values, where students are strengthened for lives of purpose, service, and leadership.

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