REPORT NO. 2009-160 MARCH 2009 UNIVERSITY OF CENTRAL FLORIDA_part4 pot

MARCH 2009 REPORT NO. 2009-160
UNIVERSITY OF CENTRAL FLORIDA
A COMPONENT UNIT OF THE STATE OF FLORIDA
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Description Beginning Additions Reductions Ending
Balance Balance
Nondepreciable Capital Assets:
Land 9,684,659$ $ $ 9,684,659$
Works of Art and Historical Treasures 238,250 57,500 295,750
Construction in Progress 8,123,507 59,839,757 569,396 67,393,868
Total Nondepreciable Capital Assets
18,046,416$ 59,897,257$ 569,396$ 77,374,277$
Depreciable Capital Assets:
Buildings 595,825,567$ 8,785,533$ $ 604,611,100$
Infrastructure and Other Improvements 34,031,046 7,916,210 41,947,256
Furniture and Equipment 193,025,975 22,445,341 12,059,980 203,411,336
Library Resources 85,683,884 5,735,599 252,577 91,166,906
Leasehold Improvements 11,237,129 2,383,363 13,620,492
Works of Art and Historical Treasures 333,798 71,438 11,766 393,470
Other Capital Assets 16,424,860 480,713 40,507 16,865,066
Total Depreciable Capital Assets
936,562,259 47,818,197 12,364,830 972,015,626
Less, Accumulated Depreciation:
Buildings 158,508,758 18,080,058 176,588,816
Infrastructure and Other Improvements 8,298,001 1,549,680 9,847,681
Furniture and Equipment 139,331,465 21,146,542 9,334,111 151,143,896
Library Resources 61,424,323 4,017,215 247,500 65,194,038

Leasehold Improvements 1,562,246 1,243,473 2,805,719
Works of Art and Historical Treasures 186,270 75,831 7,363 254,738
Other Capital Assets 13,832,671 913,022 27,956 14,717,737
Total Accumulated Depreciation
383,143,734 47,025,821 9,616,930 420,552,625
Total Depreciable Capital Assets, Net
553,418,525$ 792,376$ 2,747,900$ 551,463,001$

7. DEFERRED REVENUE
Deferred revenue includes student tuition and fees received prior to fiscal year end related to subsequent
accounting periods, auxiliary prepayments, and contracts and grant prepayments. As of June 30, 2008, the
University reported the following amounts as deferred revenue:
Description Amount
Contract and Grant Prepayments 15,591,448$
Auxiliary Prepayments 2,212,175
Student Tuition and Fees 871,046
Total Deferred Revenue
18,674,669$

8. LONG-TERM LIABILITIES
Long-term liabilities of the University at June 30, 2008, include bonds, compensated absences, and other
liabilities. Long-term liabilities activity for the fiscal year ended June 30, 2008, is shown below:
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UNIVERSITY OF CENTRAL FLORIDA
A COMPONENT UNIT OF THE STATE OF FLORIDA
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Description Beginning Additions Reductions Ending Current
Balance Balance Portion
Bonds Payable 223,095,160$ 38,780,000$ 45,784,203$
216,090,957$
7,083,233$
Loans and Notes Payable 6,050,000 50,000
6,100,000
Installment Purchases Payable 542,653 2,351,700 577,135
2,317,218
690,485
Compensated Absences Payable 28,231,965 3,666,031 2,597,163
29,300,833
2,051,059
Postemployment Health Care
Benefits Payable 4,096,000 1,395,000
2,701,000
Other Noncurrent Liabilities
4,403,123 4,403,123
Total Long-Term Liabilities
257,919,778$ 53,346,854$ 50,353,501$ 260,913,131$ 9,824,777$

Details of these long-term liabilities are discussed in subsequent notes.
9. BONDS PAYABLE
The University had the following bonds payable outstanding at June 30, 2008:
Bond Type and Series Amount Amount Interest Maturity
of Original Outstanding Rates Date
Issue (1) (Percent) To
Auxiliary Revenue Bonds:

1992 - Housing 19,080,000$ 1,106,430$ 6.0 2013
1997 - Bookstore 3,570,000 2,067,286 4.85 - 5.125 2017
1997 - Parking Garage II 7,960,000 4,883,843 4.85 - 5.375 2018
1999 - Parking Garage III 8,435,000 5,846,485 4.00 - 4.75 2020
1999 - Housing 28,140,000 1,250,000 4.875 - 5.00 2010
2000 - Housing 31,695,000 28,474,220 4.35 - 5.25 2031
2001 - Parking Garage IV 7,770,000 6,028,962 4.1 - 5.0 2022
2002 - Housing 14,055,000 11,168,302 2.75 - 4.5 2021
2004A - Student Health Center 8,000,000 6,808,196 3.5 - 5.0 2024
2004A - Parking Garage V 18,455,000 15,292,326 3.0 - 4.2 2024
2007A - Housing 38,780,000 38,085,983 4.0 - 5.50 2030
Total Auxiliary Revenue Bonds
185,940,000 121,012,033
State University System Revenue Bonds:
1997A Series 3,191,043 2,371,207 4.63 - 5.0 2016
1998 Series 11,156,956 7,948,090 4.4 - 5.0 2023
2001 Series 5,857,239 4,784,745 4.0 - 5.0 2026
2003A Series 6,580,959 3,396,634 5.0 2013
2005A Series 1,569,530 1,370,323 3.625 - 4.125 2022
2006A Series 15,483,742 15,207,925 4.0 - 5.0 2030
Total State University System
Revenue Bonds
43,839,469 35,078,924
Capital Improvement Revenue Bonds
2007 - Health Sciences Campus 60,000,000 60,000,000 4.38 2038
Total
289,779,469$ 216,090,957$
Note: (1)
Includes unamortized bond discounts and premiums, and deferred losses on refunding issues.

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A COMPONENT UNIT OF THE STATE OF FLORIDA
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Auxiliary revenue bonds were issued to construct student parking garages, housing facilities, a bookstore,
and a health center. Auxiliary revenue bonds outstanding, which include both term and serial bonds, are
secured by a pledge of traffic and parking fees, housing rental revenues, bookstore revenues, and an
assessed transportation fee based on credit hours.
State University System bonds were issued to acquire and construct various University facilities. These
bonds are secured by and payable from the capital improvement and building fees, which are remitted to
the State Board of Education to be used to retire the bonds. The State Board of Education and the State
Board of Administration administer the principal and interest payments, investment of sinking fund
resources, and compliance with reserve requirements.
The University extinguished long-term debt obligations by the issuance of new long-term debt instruments
as follows:
¾ On September 12, 2007, the University issued $38,780,000 of University of Central Florida
Dormitory Revenue Refunding Bonds, Series 2007A. The proceeds were used to defease
$15,005,000 and $23,770,000 of outstanding State of Florida, Board of Regents, University of
Central Florida Housing Revenue Bonds, Series 1996 and 1999, respectively; $1,250,000 of the
1999 revenue bonds were not defeased and remained outstanding. Proceeds were placed in an
irrevocable trust with an escrow agent to provide for all future debt service requirements on the
defeased bonds. As a result of the refunding, the University reduced its debt service requirement
by $3,550,530 over the next 22 years and obtained an economic gain of $2,198,191. At
June 30, 2008, the outstanding balance of the defeased bonds (series 1999) was $23,770,000.

The University agreed to lease to its blended component unit, the UCF Finance Corporation
(Corporation), through a ground sublease, a parcel of property located in Orange County, Florida, to
construct facilities containing approximately 198,000 square feet with classroom, laboratory, and
administrative office space together with related infrastructure. The facilities will be used solely for
education and research purposes and will be operated and managed by the University. The University and
the Corporation simultaneously agreed to enter into a capital lease where the Corporation will lease the
facilities to the University for the occupancy of the facility.
The Corporation issued capital improvement bonds totaling $60,000,000 for the construction of a health
facility for the University’s medical school. The bonds are secured by a letter of credit issued by a local
bank not to exceed $60,000,000. The bonds are variable interest rate bonds, with an interest rate of 3.75
percent at June 30, 2008, and mature on July 1, 2037. The University has agreed to pay a base rent equal to
all amounts due and payable under the bond indenture and all amounts required to be paid associated with
the bond issuance.
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Because the Corporation issued variable rate bonds, it entered into an interest rate swap agreement with a
local bank, effective July 1, 2007, which expires July 1, 2037. A swap can be terminated as a result of any
of several events, which may include a ratings downgrade of the swap counterparty, covenant violation by
either party, bankruptcy of either party, or a swap agreement default of either party. Any such termination
may require the Corporation to make significant termination payments in the future or to refinance the
outstanding bonds at the prevailing market interest rate at the time of refinancing. The swap agreement
allows the bonds to attain a fixed interest rate of 4.38 percent which is expected to be an effective hedge

and will have fluctuations in value in future years based upon market yields.
The University entered into a support agreement such that it will fund certain deficiencies that may arise in
the event the Corporation is unable to make the minimum payments on the bonds. The University is
obligated only to the extent it has legally available revenues to cover the unpaid amounts. Annual
requirements to amortize all bonded debt outstanding as of June 30, 2008, are as follows:
Fiscal Year Ending June 30 Principal Interest Total
2009 7,083,233$ 9,931,666$ 17,014,899$
2010 8,427,000 9,636,156 18,063,156
2011 8,804,606 9,275,728 18,080,334
2012 9,181,613 8,898,130 18,079,743
2013 9,580,454 8,484,459 18,064,913
2014-2018 48,723,312 36,016,578 84,739,890
2019-2023 47,854,974 24,543,598 72,398,572
2024-2028 38,132,698 13,980,701 52,113,399
2029-2033 25,614,305 5,754,160 31,368,465
2034-2038 13,920,000 1,558,070 15,478,070
Subtotal
217,322,195 128,079,246 345,401,441
Less: Net Bond Discounts,
Premiums, and Losses 1,231,238 1,231,238
Total
216,090,957$ 128,079,246$ 344,170,203$

10. LOANS AND NOTES PAYABLE
In the 2006-07 fiscal year, the UCF Finance Corporation entered into two line of credit agreements of
$6,000,000 and $7,000,000 with a local bank. The proceeds of the lines of credit are to be used for the
construction of the health facilities for the University’s medical school and the Burnett Biomedical Sciences
Center. The lines of credit carry a variable interest rate equal to 63.7 percent of 1 month LIBOR (2.46 and
5.32 percent at June 30, 2008, and 2007, respectively) plus 1.35 percent, and both mature in April 2012.
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On October 4, 2007, the Corporation entered into an additional line of credit agreement of $37,000,000
with a local bank. The proceeds of the line of credit are to be used for the construction of the health
facility for the University’s medical school. The line of credit carries a variable interest rate of 63.7 percent
of 1 month LIBOR (2.46 percent at June 30, 2008) plus 1.35 percent and matures in July 2012.
The lines are collateralized by designated revenues for the payment of debt service. At June 30, 2008, and
2007, the amounts outstanding totaled $6,100,000 and $6,050,000, respectively. The Corporation had
$43,900,000 and $6,950,000 available remaining on its line of credit agreements at June 30, 2008, and 2007,
respectively.
11. COMPENSATED ABSENCES PAYABLE
Employees earn the right to be compensated during absences for annual leave (vacation) and sick leave
earned pursuant to Board of Governors’ Regulation 6C-5.920 and bargaining agreements. Leave earned is
accrued to the credit of the employee and records are kept on each employee’s unpaid (unused) leave
balance. The University reports a liability for the accrued leave; however, State appropriations fund only
the portion of accrued leave that is used or paid in the current fiscal year. Although the University expects
the liability to be funded primarily from future appropriations, generally accepted accounting principles do
not permit the recording of a receivable in anticipation of future appropriations. At June 30, 2008, the
estimated liability for compensated absences, which includes the University’s share of the Florida
Retirement System and FICA contributions, totaled $29,300,833. The current portion of the compensated
absences liability is the amount expected to be paid in the coming fiscal year, and is based on actual
payouts over the last three years calculated as a percentage of those years’ total compensated absences
liability.

12. CERTIFICATES OF PARTICIPATION PAYABLE – COMPONENT UNITS
During the 2006-07 fiscal year, certifications of participation were issued by the Golden Knights
Corporation for the construction of a football stadium on the campus of the University. The certificates
were issued for approximately $46 million in tax exempt certificates of participation and $19 million in
taxable certificates of participation. The two certificates outstanding, which include both term and serial
certificates, are secured by a pledge from the University of Central Florida Athletic Association, Inc., of
gross ticket revenues, stadium club seat and luxury suite contributions. The interest rates on the
certificates of participation range from 4.0 percent to 6.0 percent and the maturities range from March 1,
2031, to March 1, 2036.
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The University entered into support agreements with UCF Convocation Corporation and the Golden
Knights Corporation such that it will fund certain deficiencies that may arise in the event either
corporation is unable to make the minimum payments on the bonds. The University is obligated only to
the extent it has legally available revenues to cover the unpaid amounts.
13. POSTEMPLOYMENT HEALTH CARE BENEFITS
Effective for the 2007-08 fiscal year, the University implemented Governmental Accounting Standards
Board Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than
Pensions, for certain postemployment health care benefits administered by the State Group Health
Insurance Program. The requirements of this Statement are being implemented prospectively, with the
actuarially determined liability of $52,106,000 at July 1, 2007, the date of transition, amortized over
30 years. Accordingly, for financial reporting purposes, no liability is reported for the postemployment

health care benefits liability at the date of transition.
Plan Description
. Pursuant to the provisions of Section 112.0801, Florida Statutes, all employees who
retire from the University are eligible to participate in the State Group Health Insurance Program, an agent
multiple-employer defined-benefit plan. The University subsidizes the premium rates paid by retirees by
allowing them to participate in the plan at reduced or blended group (implicitly subsidized) premium rates
for both active and retired employees. These rates provide an implicit subsidy for retirees because, on an
actuarial basis, their current and future claims are expected to result in higher costs to the plan on average
than those of active employees. Retirees are required to enroll in the Federal Medicare program for their
primary coverage as soon as they are eligible. A stand-alone report is not issued and the Plan information
is not included in the annual report of a public employee retirement system or another entity.
Funding Policy
. Benefit provisions are pursuant to provisions of Section 112.0801, Florida Statutes, and
benefits and contributions can be amended by the Florida Legislature. The University has not
advance-funded or established a funding methodology for the annual Other Postemployment Benefit
(OPEB) costs or the net OPEB obligation. For the 2007-08 fiscal year, 330 retirees received
postemployment health care benefits. The University provided required contributions of $1,395,000
toward the annual OPEB cost, comprised of benefit payments made on behalf of retirees for claims
expenses (net of reinsurance), administrative expenses, and reinsurance premiums. Retiree contributions
totaled $1,965,000.
Annual OPEB Cost and Net OPEB Obligation
. The University’s annual OPEB cost (expense) is
calculated based on the annual required contribution (ARC), an amount actuarially determined in
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accordance with the parameters of Governmental Accounting Standards Board Statement No. 45,
Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. The ARC
represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year
and amortize any unfunded actuarial liabilities over a period not to exceed 30 years. The following table
shows the University’s annual OPEB cost for the year, the amount actually contributed to the plan, and
changes in the University’s net OPEB obligation:
Description Amount
Normal Cost (Service Cost for One Year) 2,141,000$
Amortization of Unfunded Actuarial Accrued Liability 1,797,000
Interest on Normal Cost and Amortization 158,000
Annual Required Contribution 4,096,000
Interest on Net OPEB Obligation -
Adjustment to Annual Required Contribution -
Annual OPEB Cost
(
Expense
)
4,096,000
Contribution Toward the OPEB Cost (1,395,000)
Increase in Net OPEB Obli
g
ation 2,701,000
Net OPEB Obligation, Beginning of Year -
Net OPEB Obli
g
ation, End of Year 2,701,000$

The University’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the
net OPEB obligation as of June 30, 2008 (the year of implementation), was as follows:
Fiscal Year Annual Percentage of Net OPEB
OPEB Cost Annual Obligation
OPEB Cost
Contributed
Beginning Balance, July 1, 2007 $ $
2007-08 4,096,000 34.1% 2,701,000

Funded Status and Funding Progress
. As of July 1, 2007, the most recent actuarial valuation date, the
actuarial accrued liability for benefits was $52,106,000, and the actuarial value of assets was $0, resulting in
an unfunded actuarial accrued liability of $52,106,000. The covered payroll (annual payroll of active
participating employees) was $255,646,117 for the 2007-08 fiscal year, and the ratio of the unfunded
actuarial accrued liability to the covered payroll was 20.4 percent.
Actuarial Methods and Assumptions
. Actuarial valuations of an ongoing plan involve estimates of the
value of reported amounts and assumptions about the probability of occurrence of events far into the
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future. Examples include assumptions about future employment and termination, mortality, and health
care cost trends. Amounts determined regarding the funded status of the plan and the annual required

contributions of the employer are subject to continual revision as actual results are compared with past
expectations and new estimates are made about the future. Projections of benefits for financial reporting
purposes are based on the substantive plan provisions, as understood by the employer and participating
members, and include the types of benefits provided at the time of each valuation and the historical pattern
of sharing of benefit costs between the employer and participating members. The actuarial methods and
assumptions used include techniques that are designed to reduce the effects of short-term volatility in
actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the
calculations.
The University’s initial OPEB actuarial valuation as of July 1, 2007, used the entry age cost actuarial
method to estimate the unfunded actuarial liability as of June 30, 2008, and the estimated 2007-08 fiscal
year annual required contribution. This method was selected because it is the same method used for the
valuation of the Florida Retirement System. Because the OPEB liability is currently unfunded, the actuarial
assumptions included a 4 percent rate of return on invested assets, which is the University’s expectation of
investment returns under its investment policy. The actuarial assumptions also included a payroll growth
rate of 4 percent per year. Initial health care cost trend rates for employees not covered by Medicare was
9.6 percent, grading to 5.5 percent in half percent steps after nine years and for employees covered by
Medicare was 9.1 percent grading to 5.5 percent in half percent steps after eight years. The unfunded
actuarial accrued liability is being amortized over 30 years as a level percentage of projected payroll on an
open 30 year period. The remaining amortization period at June 30, 2008, was 29 years.
14. RETIREMENT PROGRAMS
Florida Retirement System
. The Florida Retirement System (FRS) is primarily a State-administered,
cost-sharing, multiple-employer, defined benefit retirement plan (Plan). FRS provisions are established by
Chapters 121 and 122, Florida Statutes; Chapter 112, Part IV, Florida Statutes; Chapter 238, Florida
Statutes; and Florida Retirement System Rules, Chapter 60S, Florida Administrative Code; wherein
eligibility, contributions, and benefits are defined and described in detail. Essentially, all regular employees
of participating employers are eligible to enroll as members of the FRS.
Benefits in the Plan vest at 6 years of service. All members are eligible for normal retirement benefits at
age 62 or at any age after 30 years of service, which may include up to 4 years of credit for military service.
The Plan also includes an early retirement provision, but imposes a penalty for each year a member retires

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before his or her normal retirement date. The Plan provides retirement, disability, and death benefits, and
annual cost-of-living adjustments.
A Deferred Retirement Option Program (DROP) subject to provisions of Section 121.091, Florida
Statutes, permits employees eligible for normal retirement under the Plan to defer receipt of monthly
benefit payments while continuing employment with an FRS employer. An employee may participate in
the DROP for a period not to exceed 60 months after electing to participate. During the period of DROP
participation, deferred monthly benefits are held in the FRS Trust Fund and accrue interest.
The State of Florida establishes contribution rates for participating employers. Contribution rates during
the 2007-08 fiscal year were as follows:
Class or Plan
Percent of Gross Salary
Employee Employer
(A)
Florida Retirement System, Regular
0.00 9.85
Florida Retirement System, Senior Management Service
0.00 13.12
Florida Retirement System, Special Risk
0.00 20.92
Deferred Retirement Option Program - Applicable to

Members from All of the Above Classes or Plan
0.00 10.91
Florida Retirement System, Reemployed Retiree
(B) (B)
Notes:
(A)
(B)
Employer rates include 1.11 percent for the postemployment health
insurance subsidy. Also, employer rates, other than for DROP participants,
include .05 percent for administrative costs of the Public Employee Optional
Retirement Program.
Contribution rates are dependent upon retirement class or plan in which
reemployed.

The University’s liability for participation is limited to the payment of the required contribution at the rates
and frequencies established by law on future payrolls of the University. The University’s contributions for
the fiscal years ended June 30, 2006, June 30, 2007, and June 30, 2008, totaled $6,278,463, $8,281,310, and
$8,566,603, respectively, which were equal to the required contributions for each fiscal year.
Section 121.4501, Florida Statutes, provides for a Public Employee Optional Retirement Program
(PEORP). The PEORP is a defined contribution plan alternative available to all FRS members in lieu of
the FRS defined benefit plan. University employees already participating in the State University System
Optional Retirement Program or the DROP are not eligible to participate in this program. Employer
contributions are defined by law, but the ultimate benefit depends in part on the performance of
investment funds. The PEORP is funded by employer contributions that are based on salary and
membership class (Regular Class, Special Risk Class, etc.). Contributions are directed to individual member
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