ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS ► Board policy 3-410 requires each university to provide the Arizona Board of Regents with audited annual financial reports and a ten-year ratio analysis of selected data from the financial reports. ► With the changes in reporting requirements required with the implementation of GASB 34/35 and 39 in 2002 and 2004, respectively, the universities and central office staff prepared 10 new ratios. At its December 2005 meeting, the Board’s Audit Committee approved these ratios and requested the universities to prepare them beginning with FY 2005 financial data, even though implementing the new ratios at this time would result in only four years of comparative data. ► Therefore, this FY 2005 annual financial ratio analysis uses data from the universities’ FY 2005 audited financial statements together with data from three previous annual reports, covering the period July 1, 2002, through June 30, 2005. ► Each university has presented 10 ratios over the four-year period. The ratios serve as indicators of the universities’ financial strengths and weaknesses. See pages 4 through 18 for the ratio analysis and graphs. University detail is presented on pages 19 through 21. ► Over the 4-year period, a decreasing share of the universities’ revenues came from state General Fund appropriations, with this share at a 4-year low (Ratio1). This trend is expected to continue as the universities compete with other state priorities for General Fund support, forcing the universities to implement tuition increases, aggressively compete for research funding, and pursue entrepreneurial activities. ► Net tuition and fees as a percentage of total revenue (Ratio 2) increased 7% at ASU, 5% at NAU, but only 1% at UA over the 4-year period, while the percentage of gifts, grants, contracts, and TRIF revenue (Ratio 3) and other revenue (Ratio 4) remained relatively flat. ► In FY 2005 Arizona State University’s current year revenue was less than current year expenses, resulting in ASU using $4.4 million of net assets (fund balances) to operate the university (Ratio 5). Calculation of the same ratio for ASU and its component units (Ratio 6), as required by GASB 39, shows that current year revenue was sufficient to cover current year expenses, with a slight (3%) cushion. ► In FY 2005 Northern Arizona University showed an increasing ability to keep current year expenditures well within current year revenues (Ratios 5 and 6), indicating a continuing strengthening of NAU’s financial condition. Page 1 of 19 ► The University of Arizona, while on a slight 4-year downward trend when looking at the university alone, kept current year expenditures within current year revenues (Ratio 5). When looking at the same ratio calculated for both UA and its component units (Ratio 6), UA is on an upward trend, with a 5% cushion in FY 2005. ► The ability of ASU’s expendable net assets (those assets available for use for operations) to keep pace with total expenses (Ratio 7) has shown a downward trend over the 4-year period. However, the ability of ASU’s unrestricted net assets (the most liquid assets) to keep pace with total expenses (Ratio 8) has remained relatively stable. ► The ability of UA’s expendable net assets to keep pace with total expenses (Ratio 7) has shown a downward trend over the 4-year period, as has the ability of its unrestricted net assets to keep pace with total expenses (Ratio 8). ► The ability of NAU’s expendable net assets to keep pace with total expenses (Ratio 7) has fluctuated over the 4-year period, but increased over the prior year and is greater than at either ASU or UA. The ability of NAU’s unrestricted net assets to keep pace with total expenses (Ratio 8) has trended upwards over the 4-year period and is greater than at either ASU or UA. ► The universities consistently earn solid investment bond ratings by showing adequate capacity to pay interest and to repay principal on its debt. The universities continue to maintain strong ratings for both System Revenue Bonds (SRBs) and Certificates of Participation (COPs) from Moody’s and Standard & Poor’s. • ASU and UA continue to maintain an Aa3 rating on SRBs and an A1 rating on COPs from Moody’s, and an AA SRB rating and an AA- COPs rating from S&P. The rating outlook for ASU and UA remains stable, meaning that based upon present debt levels in relation to net assets, a rating is not likely to change over the intermediate term, typically six months to two years. These ratings are in the upper half of the investment grade rating categories. • NAU has maintained an A2 SRB rating and an A3 COPs rating from Moody’s, and an A+ SRB rating and an A COPs rating from S&P. The rating outlook for NAU also remains stable. The most recent Moody’s and S&P’s analyses are available upon request from the universities. ► Debt ratios (Ratio 9) have remained relatively stable in the 3-5% range over the 4-year period and remain within the acceptable 10% range required by rating agencies. Page 2 of 19 ► Total financial resources of both the university and its component units as a proportion of the total direct debt of the university and its component units (Ratio 10) has increased over the 4-year period at UA but decreased at both ASU and NAU. A higher percentage indicates more university and component unit resources to cover the total debt of the university and component units. At June 30, 2005, UA had sufficient financial resources to pay 90% of its total debt; NAU had sufficient resources to pay 50% of its total debt; and ASU had sufficient resources to pay 41% of its total debt. ► An additional year of information will be added to this ratio analysis each year until ten years of information is again provided. 2/16/06 Page 3 of 19 ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS Ratio 1 Description of Ratio State General Fund Appropriations Total Revenue Element definition: State General Fund Appropriations are state of Arizona legislative General Fund appropriations to the universities and do not include university tuition collections remitted to the state by the universities and then appropriated back to the universities. Total Revenue includes operating, nonoperating, and other revenue and gains. FY 2005 RATIOS NAU 38% UA 28% ASU’s FY 2002 ratio of 39% declined to 32% in FY 2005. NAU declined from 43% in FY 2002 to 38% in FY 2005. UA declined from 33% in FY 2002 to 27% in FY 2004, then rebounded only slightly to 28% in FY 2005. A declining trend in this ratio reflects a continuing shift in responsibility for funding the universities, with decreasing support from the state General Fund and increasing dependence on other sources including tuition, government (primarily federal) and private research grants, private gifts, and entrepreneurial efforts. 1. Ratio of State General Fund Appropriations to Total Revenue 50% 40% 30% 20% 10% ASU NAU Page 4 of 19 05 20 04 20 03 20 02 0% 20 ASU 32% State General Fund Appropriations as a percentage of Total Revenue steadily declined at all three universities from FY 2002 through FY 2004, leveling off at NAU in FY 2005, continuing to decline at ASU, and increasing 1% at UA in FY 2005. We would expect a continued decline as the universities compete with other state priorities for limited state General Funds, thus requiring them to enhance revenues from all other sources (see Ratios 2, 3, and 4). UA ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS Ratio 2 Description of Ratio Net Tuition & Fees Total Revenue Element definition: Net Tuition and Fees are tuition and fees paid by students and are net of scholarship allowances. Total Revenue includes operating, nonoperating, and other revenue and gains. FY 2005 RATIOS NAU 24% UA 15% ASU’s FY 2002 ratio of 23% increased to 29% in FY 2005. NAU increased from 19% in FY 2002 to 24% in FY 2005. UA increased only 1% from FY 2002 to FY 2005, 14% to 15%. Increases in this ratio reflect the increasing reliance on, and the upward pressure on, student tuition and fees as a revenue source to operate the universities and to service the debt on capital construction in the wake of declining State General Fund Appropriations as a percentage of Total Revenue. 2. Ratio of Net Tuition and Fees Revenue to Total Revenue 50% 40% 30% 20% 10% ASU NAU Page 5 of 19 05 20 04 20 03 20 02 0% 20 ASU 29% Net Tuition and Fees increased as a proportion of Total Revenue over FY 2002 levels, with the most significant increase in FY 2004 resulting from the tuition increases emanating from the Regents’ Changing Directions initiative. While committing to maintaining resident undergraduate tuition levels in the lower one-third of senior public institutions, the Regents increased tuition for the 2003-2004 academic year in order to manage the impact of declining state appropriations (Ratio 1). This ratio leveled off in FY 2005 at NAU and UA and increased at ASU. UA ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS Ratio 3 Description of Ratio Gifts, Grants, Contracts, & TRIF Revenue Total Revenue Element definition: Gifts, Grants, and Contracts come from private donors, additions to endowments, and government (primarily federal) and private research grants and contracts. TRIF Revenue is ABOR’s share of state sales tax revenue approved under Proposition 301 (November 2000). Total Revenue includes operating, nonoperating, and other revenue and gains. FY 2005 RATIOS NAU 24% UA 42% Total gifts, grants, and contracts and TRIF revenue remained relatively constant as a percentage of Total Revenue from FY 2002 through FY 2005. ASU’s FY 2002 ratio of 25% declined slightly to 24% in FY 2005. NAU’s FY 2002 ratio of 24% remained at that level in FY 2005. UA’s FY 2002 ratio of 40% increased to 42% in FY 2005. UA’s greater restricted funding from the federal government and private donors causes its ratio to diverge from ASU’s and NAU’s. As the universities’ new research infrastructure buildings funded by HB 2529 come on line in FY 2006 and 2007, more research funding should be generated by all three universities and this ratio is likely to increase. 3. Ratio of Gifts, Grants, Contracts, and TRIF Revenue to Total Revenue 50% 40% 30% 20% 10% ASU NAU Page 6 of 19 05 20 04 20 03 20 02 0% 20 ASU 24% UA ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS Ratio 4 Description of Ratio Other Revenue Total Revenue Element definition: Other Revenue includes auxiliary enterprises revenue, investment income, and all other revenue, both operating and nonoperating, not included in the numerators of Ratios 1, 2, and 3. Total Revenue includes operating, nonoperating, and other revenue and gains. FY 2005 RATIOS NAU 13% UA 15% Other Revenue as a percentage of Total Revenue fluctuated only slightly, remaining in the 13% to 15% range, at all three universities from FY 2002 through FY 2005. Considering this ratio in conjunction with Ratios 1, 2, and 3 helps to explain the upward pressure on tuition rates. ASU’s FY 2002 ratio of 13% increased to 15% in FY 2005. NAU’s FY 2002 ratio decreased from 14% to 13% in FY 2005. UA’s FY 2002 ratio of 13% increased to 15% in FY 2005. 4. Ratio of Other Revenue to Total Revenue 50% 40% 30% 20% 10% 05 20 04 20 03 20 02 0% 20 ASU 15% ASU NAU Page 7 of 19 UA ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS Composition of University Total Revenue Ratios 1, 2, 3, and 4 Combined University Total Revenue Composition 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 15% 13% 24% 24% 15% 42% 29% 24% 15% 32% ASU 38% NAU 28% UA Other Revenue Gifts, Grants, Contracts, and TRIF Revenue Net Tuition and Fees State General Fund Appropriations Page 8 of 19 ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS Ratio 5 Description of Ratio Net Revenue (University Only) Total Revenue (University Only) Element definition: Net Revenue equals total revenue less total expenses. Total Revenue includes operating, nonoperating, and other revenue and gains. Both figures are for the university only and do not include component units. FY 2005 RATIOS This ratio indicates whether or not current year revenues were sufficient to cover current year expenses, thereby avoiding the need to deplete net assets to operate the university. NAU 8% UA 1% This ratio declined at ASU from FY 2002 through FY 2005 (5% to -0.4%). In FY 2005, current year revenue was less than current year expenses, resulting in ASU using $4.4 million of net assets (fund balances) to operate the university. UA’s ratio increased from 2% in FY 2002 to 3% in FY 2003, then declined to 1% in both FY 2004 and FY 2005. The university was required to use almost all current year revenue to pay current year expenses in FY 2005. NAU’s ratio increased from -1% in FY 2002 to 8% in FY 2005, indicating its increasing ability to cover current year expenses with current year revenue. 5. Ratio of Net Revenue (University Only) to Total Revenue (University Only) 10% 5% 0% 05 20 04 20 03 20 02 -5% 20 ASU (0.4%) ASU NAU Page 9 of 19 UA ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS Ratio 6 Description of Ratio Net Revenue (University + Component Units) Total Revenue (University + Component Units) Element definition: Net Revenue equals total revenue less total expenses. Total Revenue includes operating, nonoperating, and other revenue and gains. Both figures are for the university and its component units. Reporting of financial data for component units is required under GASB 39 beginning with FY 2004 financial statements (see note below). FY 2005 RATIOS ASU 3% NAU 8% UA 5% This ratio indicates whether or not current year revenues of the university and its component units as defined by GASB 14 and 39 were sufficient to cover current year expenses of the university and the component units, thereby avoiding the need to deplete net assets to operate the university and the component units. All three universities and their component units met current year expenses with current year revenue in FY 2005. ASU’s FY 2004 ratio of 3% remained constant for FY 2005. NAU’s FY 2004 ratio of 6% increased to 8% in FY 2005, indicating an increasing ability to operate the university and its component units with current year revenue. UA’s FY 2004 ratio of 4% improved to 5% in FY 2005, also indicating an increasing ability to operate the university and its component units with current year revenue. NOTE: ASU’s component units, as defined by GASB 14 and GASB 39, are: ASU Foundation; Arizona Capital Facilities Finance Corporation (ACFFC); ASU Alumni Association; Collegiate Golf Foundation; Mesa Student Housing, LLC; Arizona State University Research Park, Inc.; Sun Angel Endowment; and Sun Angel Foundation. NAU’s component units are: Northern Arizona University Foundation, Inc. and Northern Arizona Capital Facilities Finance Corporation (NACFFC). UA’s component units are: The University of Arizona Foundation, Inc.; The University of Arizona Alumni Association; Law College Association of The University of Arizona; and Campus Research Corporation. Page 10 of 19 ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS 6. Ratio of Net Revenue (University + Component Units) to Total Revenue (University + Component Units) 10% 5% 05 20 20 04 0% ASU NAU Page 11 of 19 UA ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS Ratio 7 Description of Ratio Expendable Net Assets Total Expenses Element definition: Expendable Net Assets are assets available for use for operations. They include both unrestricted and expendable restricted net assets; they exclude endowments and net assets invested in property. Total Expenses include operating, nonoperating, and other expenses and losses. FY 2005 RATIOS NAU 22% UA 17% This ratio measures whether or not expendable net assets have kept pace with total expenses. ASU’s FY 2002 ratio of 24% declined to 21% in FY 2005 and UA’s FY 2002 ratio of 24% declined to 17% in FY 2005, both indicating that expendable net assets have not kept pace with total current year expenses and that expendable net assets continue on a downward trend. NAU’s FY 2002 ratio of 17% increased to 22% in FY 2005, indicating that expendable net assets have kept pace with total current year expenses and are on an upward trend. 7. Ratio of Expendable Net Assets to Total Expenses 30% 25% 20% 15% 10% ASU NAU Page 12 of 19 05 20 04 20 03 20 02 5% 20 ASU 21% UA ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS Ratio 8 Description of Ratio Unrestricted Net Assets Total Expenses Element definition: Unrestricted Net Assets are a subset of expendable net assets (see Ratio 7) and represent those net assets that can most quickly be converted to cash. Total Expenses include operating, nonoperating, and other expenses and losses. FY 2005 RATIOS NAU 16% UA 8% ASU’s FY 2002 ratio of 15% fluctuated only slightly over the 4-year period, returning to the 15% level in FY 2005. NAU’s FY 2002 ratio of 10% increased to 16% in FY 2005. UA’s FY 2002 ratio of 12% declined to 8% in FY 2005. 8. Ratio of Unrestricted Net Assets to Total Expenses 30% 25% 20% 15% 10% 05 20 04 20 03 20 02 5% 20 ASU 15% This ratio measures the coverage of annual operations by the university’s most liquid assets, those unrestricted net assets than can be the most quickly converted to cash. A higher percentage indicates more operating flexibility by the university. ASU NAU Page 13 of 19 UA ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS Ratio 9 Description of Ratio Debt Service Payments (Interest + Principal) Total Expenses Element definition: Debt Service Payments include the interest and principal payments for the university’s System Revenue Bonds (SRBs) and Certificates of Participation (COPs). Total Expenses include operating, nonoperating, and other expenses and losses. FY 2005 RATIOS NAU 6% UA 5% ASU’s FY 2002 ratio of 3% increased to 4% in FY 2003 and returned to 3% in both FY 2004 and FY 2005, indicating that the university’s debt service remains relatively constant as a percentage of the university’s Total Expenses. NAU’s FY 2002 ratio of 4% increased to 5% in FY 2003 and FY 2004 and to 6% in FY 2005, indicating that the university’s debt service is increasing as a percentage of Total Expenses. UA’s FY 2002 ratio of 5% dropped to 4% in FY 2003 and FY 2004, then returned to the 5% level in FY 2005, indicating that the university’s debt service remains relatively constant as a percentage of the university’s Total Expenses. 9. Ratio of Debt Service Payment (Interest + Principal) to Total Expenses 30% 25% 20% 15% 10% 5% 20 03 20 04 20 05 0% 20 02 ASU 3% This ratio measures the burden of debt service payments relative to, or as a proportion of, overall expenses of the university. This is one of the key ratios considered by rating agencies to determine ratings for SRBs and COPs. Rating agencies generally view 10% or less as a significant indicator of satisfactory creditworthiness, thus allowing debt instruments to be sold at more favorable interest rates. All three universities are within the acceptable range and demonstrate that they have adequate resources to meet existing debt requirements. ASU NAU Page 14 of 19 UA ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS Ratio 10 Description of Ratio Total Financial Resources (University + Component Units) Direct Debt (University + Component Units) Element definition: Total Financial Resources include restricted and unrestricted expendable and nonexpendable net assets of the university, plus permanently and temporarily restricted and unrestricted net assets of the component units, excluding net property and equipment of the component units. Direct Debt is the total outstanding capital debt of the university and its component units. Reporting of financial data for component units is required under GASB 39 beginning with FY 2004 financial statements. FY 2005 RATIOS ASU 41% NAU 50% UA 90% This ratio measures coverage of debt by all resources available to the university, including those of its component units. A larger percentage indicates the availability of more resources to cover total university and component unit debt. ASU’s FY 2004 ratio of 57% declined to 41% in FY 2005, indicating fewer resources of the university and its component units to cover total university and component unit debt. NAU’s FY 2004 ratio of 66% declined to 50% in FY 2005, also indicating a decline in total resources of the university and its component units to cover total university and component unit debt. UA’s FY 2004 ratio of 78% improved to 90% in FY 2005, indicating the availability of an increasing amount of university and component unit resources to pay total university and component unit debt. Explained differently, at June 30, 2005, ASU had sufficient financial resources to pay 41% of the total debt of the university and component units, down from 57% at June 30, 2004. NAU, at June 30, 2005, had sufficient financial resources to pay 50% of the total debt of the university and component units, down from 66% at June 30, 2004. UA, at June 30, 2005, had sufficient financial resources to pay 90% of the total debt of the university and component units, up from 78% at June 30, 2004. This ratio, as is the case for all ratios in this analysis, is valid as of June 30, 2005, only. The universities are “going concerns” and, therefore, payment of the total direct debt is not required as of June 30, 2005, but will be paid off over time. NOTE: Please see note to Ratio 6, listing component units for each university. Page 15 of 19 ARIZONA UNIVERSITY SYSTEM FY 2005 FINANCIAL RATIO ANALYSIS 10. Ratio of Total Financial Resources (University + Component Units) to Direct Debt (University + Component Units) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 20 04 20 05 0% ASU NAU Page 16 of 19 UA ARIZONA STATE UNIVERSITY Financial Ratios for Fiscal Years 2002 to 2005 (dollars in millions) Ratio 1 FY 2003 FY 2004 FY 2005 State General Fund Appropriations 321 312 313 336 Total Revenues 833 846 935 1,044 38.5% 36.9% 33.5% 32.2% ASU only 2 Net Tuition and Fees Revenue 188 206 253 302 Total Revenues 833 846 935 1,044 22.6% 24.3% 27.1% 28.9% Gifts, Grants & Contracts, and TRIF Revenue 212 207 219 254 Total Revenues 833 846 935 1,044 25.5% 24.5% 23.4% 24.3% ASU only 3 FY 2002 ASU only. TRIF - Technology & initiative research funding. ASU's share of the state education sales tax. 4 Other Revenues 112 121 150 152 Total Revenues 833 846 935 1,044 13.4% 14.3% 16.0% 14.6% ASU only 5 Net Revenues 44 7 2 Total Revenues 833 846 935 1,044 5.3% 0.8% 0.2% -0.4% ASU only 6 Net Revenues 32 38 Total Revenues 1,036 1,182 ASU and component units 7 186 184 213 216 789 839 933 1,048 23.6% 21.9% 22.8% 20.6% Unrestricted net assets ASU only 131 150 160 789 120 839 933 1,048 15.2% 15.6% 16.1% 15.3% Debt Service Payments (int & princ) 27 36 29 33 Total Expenses 789 839 933 1,048 3.4% 4.3% 3.1% ASU only 10 3.2% Total Expenses Total expenses 9 3.1% Expendable Net Assets ASU only 8 (4) 3.1% Total financial resources , net 444 444 Direct debt 784 1,087 56.6% 40.8% ASU and component units ASU Financial Services Prepared: December 2005 Page 17 of 19 NORTHERN ARIZONA UNIVERSITY Financial Ratios for Fiscal Years 2002 to 2005 (dollars in millions) Ratio 1 FY 2003 FY 2004 FY 2005 State General Fund Appropriations 112 111 112 118 Total Revenues 264 271 294 311 42% 41% 38% 38% NAU only 2 Net Tuition and Fees Revenue 51 53 71 74 Total Revenues 264 271 294 311 19% 20% 24% 24% Gifts, Grants & Contracts, and TRIF Revenue 64 67 71 76 Total Revenues 264 271 294 311 24% 25% 24% 24% NAU only 3 FY 2002 NAU only TRIF - Technology & initiative research funding. NAU's share of the state education sales tax. 4 Other Revenues 37 40 40 40 Total Revenues 264 271 294 311 14% 15% 14% 13% NAU only 5 Net Revenues Total Revenues NAU only 6 (3) 264 -1% 2 15 24 271 294 311 1% 5% 8% Net Revenues 19 28 Total Revenues 305 333 NAU and component units 7 46 62 52 64 Total Expenses 267 269 279 287 17% 23% 19% 22% Unrestricted net assets Total expenses NAU only 9 29 37 45 267 26 269 279 287 10% 11% 13% 16% Debt Service Payments (int & princ) 11 14 15 18 Total Expenses 267 269 279 287 NAU only 10 8% Expendable Net Assets NAU only 8 6% 4% 5% 5% 6% Total financial resources , net 95 108 Direct debt 144 217 66% 50% NAU and component units Prepared by Northern Arizona University Comptroller Page 18 of 19 UNIVERSITY OF ARIZONA Financial Ratios for Fiscal Year 2002 to 2005 (Dollars in Millions) 1 2 3 FY FY FY FY Ratio 2002 2003 2004 2005 State Appropriations Revenue 329 324 317 334 Total Revenues 997 1,083 1,149 1,204 33% 30% 28% 28% Net Tuition and Fees Revenue 140 150 173 182 Total Revenues 997 1,083 1,149 1,204 14% 14% 15% 15% Gifts, Grants, Contracts, and TRIF Revenue 396 463 493 511 Total Revenues 997 1,083 1,149 1,204 40% 43% 43% 42% TRIF - Technology & Initiative Research Funding. UA's share of the State education sales tax revenues. 4 5 6 Other Revenues 127 146 166 177 Total Revenues 997 1,083 1,149 1,204 13% 13% 14% 15% Net Revenues (Univ Only) 19 34 15 13 Total Revenues (Univ only) 997 1,083 1,149 1,204 2% 3% 1% 1% Net Revenues (Univ + Comp Units) 49 66 Total Revenues (Univ + Comp Units) 1,244 1,311 4% 5% 7 Expendable Net Assets** 232 222 204 207 Total Expenses 978 1,049 1,134 1,190 24% 21% 18% 17% **Unrestricted and Restricted 8 9 Unrestricted Net Assets 120 121 107 101 Total Expenses 978 1,049 1,134 1,190 12% 12% 9% 8% Debt Service Payments (Prin & Int)* 46 46 48 54 Total Expenses 978 1,049 1,134 1,190 5% 4% 4% 5% Total Financial Resources (Univ + Comp Units) 628 707 Direct Debt (Univ + Comp Units) 808 789 78% 90% * From Cash Flow Statement 10 UA Financial Services Prepared: December 2005 Page 19 of 19